Question: “Why should a condo in Vancouver cost more than a condo in Toronto (or any other big city in Canada)?”

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Correct Answer: “No good reason.” (full marks plus bonus)

Alternative Answer: “It’s a Bubble, Stupid.” (full marks, but no bonus due to unnecessary impoliteness)

Incorrect Answers: “Supply and Demand”, “Everybody Wants One (or two or three)”, “The Views”, “Only Insiders Will Be Able To Live Here”, “Because Downsizers Are Richer Here”, “We Are Running Out Of… Fresh Air?”

Points Further Deducted For Any Answer Qualified With: “Last Year I Made More Money In RE Than In My Last 20 Years Working As A (xyz)” or “What Else Are You Going To Do With Your Money?”

Back of the Class: “(anything involving the words ‘Property Ladder’ or ‘Bullet-Proof’)”, “I’ll Get Rich, Rich I Tell You!! (manic laughter)”


Obliquely related story:

Major condo developers in Vancouver are shutting out average buyers by selling their most affordable new units privately – to clients of select realtors and “family and friends” – before their advertised sale dates, The Globe and Mail has learned.

Eager buyers camp out in lineups for hours or days before the sales events. Thousands also sign up online to get “VIP” access, only to find out on opening day they had no chance. Several have said they were then invited to buy something more expensive.

Mr. Rennie said developers advertise to the public as a sort of fallback policy. If the insiders who get first dibs do not buy enough units, they can sell what is left to the next tier of interested buyers.

Toronto realtor Andrew la Fleur said condos are selling out to insiders in that hot market, too. He said he is one of the few agents whose clients get first crack at properties before the public. He estimates 95 per cent to 100 per cent of new condos are sold to insiders that way. “I think the public is just unfortunately misinformed or uneducated,” Mr. la Fleur said. “Those of us in the industry can see this coming a mile away and we know how to get our clients in at an opportune time.”
However, he said he does not think most units in Toronto will be flipped, because condo prices are not increasing in that city like they are in Vancouver.

– from ‘Vancouver developers shutting out regular buyers with insider condo sales’, Kathy Tomlinson, G&M, 17 Jun 2016 [hat-tip 3rdRock]

The average price of a single-family detached home in the Greater Vancouver area has increased as much in the past five months as it did from 1981 to 2005.

So profound, it deserves to be said again:
“The average price of a single-family detached home in the Greater Vancouver area has increased as much in the past five months as it did from 1981 to 2005.”
– from ‘World Out Of Whack! Which of these crazy real estate markets will be the first to bust?’, Zerohedge, 16 Jun 2016

For Those Who Have Lost All Perspective, Think On This

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After surviving a serious illness and divorce, Denise Franklin was more than ready to start over. With a $25,000 budget, she approached architect Henry Yorke Mann to help her build a home fit for a fresh start in rural British Columbia. Mann saved money by severely restricting the size and material cost. Designing the 280-square-foot space in a mandala shape, Mann gave this home all the essentials and more. Franklin loves nature, and it was important that the home feel connected to the outdoors. A front porch reaches out into her front yard and vegetable garden. Mann used all natural and local materials — no synthetic or plastic materials were used in any part of the home. Durable, insulated metal roofing keeps the home well protected from the elements.
– from ‘Tiny B.C. cabin — at 280 sq. ft. — provides more than enough space to start a new life, and garden’, National Post, 14 Jun 2016

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“Watch The Money Go Round, Watch The Money Go Round, Got It Wrapped Up Tight, Got It Safe And Sound….”

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Watch The Money Go Round

“Given the rogue nature of the industry in this province, I’m not surprised someone calling for more transparency and professionalism would be considered a threat. In a sector that often seems unregulated, it has never been easier to make gobs of cash – legally or illegally. Few want to jeopardize the dynamics that are allowing many to get filthy rich very quickly.”
– from ‘Oversight of British Columbia’s housing market is a sham’, Gary Mason, G&M, 31 May 2016

“Representatives of two real estate companies are traveling with the B.C. Premier on a trade mission to Asia, raising questions about the optics of the perceived partnership at a time when many are calling for an end to foreign real estate investment.
The B.C. government lists more than 60 companies taking part in the trade mission to Korea, Japan and the Philippines as part of the province’s strategy to create more international trading partners.
Listed among those companies are two real estate brokerages Nu Stream Realty and Sutton West Coast Realty.”
“It’s bad optics,” said University of British Columbia business professor Tsur Somerville.
“At a time when people in the Lower Mainland are very concerned about the extent to which foreign capital is driving up prices here and contributing to affordability options, it seems a little bit politically dicey to take [brokerage] firms … along on a trip to Asia.”

– from ‘B.C. real estate companies join Christy Clark on trade mission to Asia’, CBC, 28 May 2016 [hat-tip 3rdRock]

Vested Interests Rule, Okay? – Any Change In The Vancouver Housing Market Will Not Be Coming From Government Policy

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The interests of BC Liberal Party donors who fund Premier Christy Clark’s salary top-up appear to be determining the government’s response to the housing affordability crisis in the province, says NDP critic David Eby.
A lot of BC Liberal donations come from wealthy people in the real estate industry, and the party’s person in charge of keeping them flowing is himself a top marketer of condo developments, Bob Rennie.
A recent City of Vancouver study found that roughly 12.5 per cent of condos in the city are empty, Eby said. And yet the government has declined to take steps to discourage owners from allowing condos or other homes to sit empty.
Asked Eby, “Why would [Clark] rush to put an additional tax on international investors holding these condos empty if she’s getting major donations from luxury condo builders who want this to continue?”
Clark confirmed this week that she has personally received in total more than $300,000 from the BC Liberal Party in annual stipends since she became leader in 2011.


Elections BC’s database of political contributions shows many people and companies involved in the real estate industry gave the BC Liberals donations in the tens of thousands of dollars in 2015, the most recent year for which figures are available.
Names appearing near the top of the list, each having given at least $50,000 during the year, include the Aquilini family, Bosa Properties Inc., Concord Pacific, Developments Corp. Inc., Shape Properties, and developers Rick Ilich and Peter Redekop.
The fundraising chair for the Liberals is condo marketer Rennie, whom The Tyee recently reported gave the party $73,500 in 2015.
“Bob Rennie’s a great example,” Eby said. “Here’s a guy who is one of the most famous condominium sales agents in North America who is running the fundraising for the Premier who refuses to put a tax on speculative investors driving up the prices of condos in Metro Vancouver.”
People can’t help but ask questions about Rennie’s involvement in the party and how it might affect Clark’s policy choices, said Eby. “Why is she refusing to act? Is it because the chair of her fundraising committee is a condo salesman? That is a legitimate question in my mind and one we should all be asking.”


– from ‘Clark’s Pay from Donors Too Tied to Real Estate Moguls’, Andrew MacLeod, TheTyee.ca, 2 May 2016

“Who is going to drive our buses and make art?”

Gayle Swain shared the story of her outof-the-ordinary Vancouver-born parents while sitting at a sidewalk table with four friends at Wicked Café, at Seventh and Hemlock. One of those friends was born in B.C., in Port Alberni, while two are immigrants, from Britain and the U.S.
The foursome had mixed feelings about what is happening to this fast-changing city, where relatively few have deep roots.
Even though they valued how the world’s cultures peacefully coexist in the city, they also regretted how in-migration has been a factor in the city’s fast-rising housing prices and in the way neighbourhoods are becoming “construction zones.”
When a flashy sports car interrupted their conversation by roaring down Hemlock, the friends also commented on how traffic in the city was becoming increasingly “aggressive” and “crazy.”

Justin Fung is among the Vancouver-born who are struggling with whether they should become more mobile.
Fung has a solid career in Vancouver’s high-tech industry. But he believes he could get more out of his salary if he moved to the Seattle or San Francisco areas.
Fung, his wife (also born in Vancouver) and young daughter squeeze into a small condo in Vancouver. “There’s no space to yourself.”
He believes the family could afford to live in a larger home, even a detached one, in the U.S.’s West Coast high-tech regions.
Many of Fung’s ethnic Chinese and Caucasian friends with children have already moved to the suburbs or other cities.
“But some are already coming back to Vancouver. They miss the city and there’s a long commute,” he said. “I feel frustrated at where this city is going.”
The key reason Fung’s family is trying to stay close to the west side of Vancouver is to be near his inlaws and parents, who immigrated to Canada from Hong Kong in the 1970s.
Fung attended Eric Hamber Secondary School, where he said the student population in the 1990s became 95 per cent Asian, most with roots in Hong Kong and Taiwan.
“There was a kind of cultural exchange when I was attending high school in Vancouver. But I think that’s largely missing now,” he said, adding: “There’s a general negativity” about Metro’s in-migration trends.
“I’m very pro-immigrant for the right kind of people, for those with skills who will bring innovation,” Fung said.
But, echoing the findings of UBC geographers and others, Fung regrets how the federal government has welcomed many “wealthy people who drive up housing prices and treat this as a resort town.”
When Fung visits his parents on the west side of Vancouver, he notices many of the neighbouring houses are empty. It’s leading, he said, to a “hollowing out” of the city’s culture.

Lorne Korman, a psychologist, is among the 16 per cent of Metro Vancouver’s population who have arrived from other Canadian provinces or territories. He was raised in Montreal and has worked in Toronto.
He finds Metro Vancouver’s inhabitants are “less connected” than Quebeckers and more “laidback” than Torontonians. “In Montreal, we knew all our neighbours. We’d always be having a cup of coffee or glass of wine with them,” said Korman, who came to B.C. a decade ago with his Chinese-Canadian wife.
Living in Richmond and working in Vancouver, he has found residents of the growing metropolis tend to be “friendly on the outside. But you can never quite know what’s happening underneath. They’re polite, they make eye contact, but they’re harder to get to know.”
Given the city’s high mobility rate, Korman isn’t surprised a Vancouver Foundation study discovered that “loneliness” is a leading anxiety of city residents.
Even though Metro has a reputation as a “Lotus Land” of nature lovers and yoga practitioners, Korman said he’s found it surprisingly right wing.
“The B.C. Liberals aren’t really liberals.” He thinks the predominance of right-wing politicians is due to an exaggerated individualism among the relatively transient population.
The clinical psychologist says residents have allowed B.C. politicians to cut mental-health services to the marrow, unlike in Ontario. Too many people in Metro Vancouver, he says, “have a let-them-eat-cake kind of attitude. People without a voice are being neglected.”
With house prices and rents soaring in part because of wealthy newcomers, Korman wonders about the future of community and the middle and lower classes. “Who is going to drive our buses and make art?”
He finds Metro Vancouver has a “surreal” quality. As he cycles each day to his Broadway office from Richmond, he notices how many grand-looking new houses are, despite appearances, vacant.
“Their sprinklers go on in the rain.”

– from ‘In mobile Metro Vancouver, third-generation locals are hard to find’, Douglas Todd, Vancouver Sun, May 1, 2016

Prominent Vancouver Architect Bing Thom: ‘The City Has Become A Hotel’ – “I have done pretty well in my business, but I made more money from sitting on my Vancouver property than I made by working an entire lifetime. That tells you something.”

“I asked Bing Thom about the changes. The property boom has, of course, been good for the architectural profession, but Thom, who is now in his early seventies, is troubled by what is happening to his home town. “By all accounts, I have done pretty well in my business, but I made more money from sitting on my Vancouver property than I made by working an entire lifetime,” he said. “That tells you something.” Thom was alarmed that consumption has effectively replaced production as Vancouver’s growth industry. “The city has become a hotel,” he said.
– from The Golden Generation, by Jiayang Fan, The New Yorker, 22 Feb 2016