Vancouver Real Estate

[Flamenspiel]

Interesting headline that came up on BNN and in the the front page of the Globe and Mail this morning. Apparently the banks are issuing loans without understanding the risk, this is significant.

"Canadian banks allow foreign clients with no credit history, including students, to qualify for uninsured mortgages without proving the sources of their income – a practice that exempts non-Canadians who have money in the bank from the scrutiny domestic borrowers face when buying a home or an investment property."

“The bank doesn’t understand what the risk is,” Ms. Duhaime said. “If the bank were to start from scratch, the outcome might be different. They might not issue the mortgages.”

http://www.theglobeandmail.com/real-...ticle31869946/

[MillerTime GFG]

I posted this in the Millionaire Migration thread (http://forum.calgarypuck.com/showthr...#post5854081):

"The banks I know that are doing it are TD, Scotia, and National Bank. NB no longer does it through the broker channel (due to some fraud), but their requirements for qualifying were 35% down, and 12 month's PIT in a Canadian account."

So no income requirements, just proof that there are enough funds for 12 months' payments.

[CorsiHockeyLeague]

I guess they figure if they have 35% down their risk is effectively nil, given the likelihood of the market dropping that much?

[Flamenspiel]

^^That's not a complete assessment of the risk, and if there are a lot of these around it could be a problem. Are these types of loans the backbone of the RE market in VA? How many of these loans are there, and what percentage of the buyers are doing this? Certainly will be an interesting thing to look at.

[blankall]

Originally Posted by CorsiHockeyLeague

I guess they figure if they have 35% down their risk is effectively nil, given the likelihood of the market dropping that much?

A buyer would now also need to be able to pay the 15% foreign owner tax in Vancouver.

So a buyer needs 50% of the purchase price plus the 12 months of payments up front. As a foreigner is most likely not going to have any credit here and have a work history that cannot be easily confirmed, using the same "scrutiny" to assess foreign buyers and domestic buyers doesn't make sense.

All that being said, this system really only benefits flippers in a market where things are continually going up. That's not really happening anymore. At least no in Calgary or Vancouver.

[afc wimbledon]

Vancouvers due a 40 or 50 percent drop, it may cost me half a mill' but there's a part of me that still wants it to happen just so the morons that think they're financial genius's for buying a house twenty years ago get a taste of reality.

[Red]

And now the Mayor is looking to tax vacant properties.

http://www.cbc.ca/news/canada/britis...-tax-1.3761496

[Flamenspiel]

I could certainly see a condo crash, especially if the foreign buyers are all bailing, maybe not so much the single unattached homes.

[blankall]

Originally Posted by Flamenspiel

I could certainly see a condo crash, especially if the foreign buyers are all bailing, maybe not so much the single unattached homes.

If anything it's looking like the opposite is happening. The condo, although overpriced, are still in reach of the locals. The unattached homes, starting at 1.5 mil for an eastside shack, are totally out of reach of the locals.

In the past 5 years a huge gap opened in between the price of "starter homes" (ex. condos) and unattached. That gap is likely to close and become more of a gradual step, as opposed to the ridiculously steep curve it is now.

http://www.huffingtonpost.ca/2016/09..._11837936.html

Prices on detached homes are already down. Although a lot of that could be due to the abnormal bump we had in January finally wearing off. Foreigners were pouring money in ahead of China's new regulations on exporting cash, which limit exports to around $50k.

[MillerTime GFG]

FWIW, 65% LTV (loan to value) or lower is kind of the magic number where a lot of exceptions (ie. higher debt servicing allotments) can be made, not just for foreign buyers.

[Fuzz]

When it comes to overpriced real estate, Vancouver's "bubble risk" is unmatched on the planet, according to a report by
Swiss bank UBS.
The rise in Vancouver's average housing prices compared with the growth in average wages, rents and other economic factors make it the most likely to experience a sudden downward correction compared with 17 other large cities around the globe, according to the UBS Global Real Estate Bubble Index released this week.

http://www.cbc.ca/news/canada/britis...bank-1.3781527

Man, this could be a bloodbath. Think of all the people who upgraded over the past few years, riding the rising wave of prices, seeing their $300k condo go to $600k, parleying that up to a $1 million place. The problem is, it's probably only worth 600k. From what I have heard, this is really common. People will be in way to deep to walk, but see a massive asset devaluation. It's gonna be ugly.

[chemgear]

Originally Posted by Fuzz

http://www.cbc.ca/news/canada/britis...bank-1.3781527

Man, this could be a bloodbath. Think of all the people who upgraded over the past few years, riding the rising wave of prices, seeing their $300k condo go to $600k, parleying that up to a $1 million place. The problem is, it's probably only worth 600k. From what I have heard, this is really common. People will be in way to deep to walk, but see a massive asset devaluation. It's gonna be ugly.

It's okay, it's just the Chinese.

[afc wimbledon]

Originally Posted by chemgear

It's okay, it's just the Chinese.

Kidding apart I wonder how mainland Chinese home owners will react to probably the first housing bubble crash they've ever seen, I suspect no matter how savy they are at what ever business they do the sight of losing hundreds of thousands in a few weeks will freak them out completely and they'll dump their houses, it could exacerbate a crash badly.

[rubecube]

Well this is pretty unsurprising.

http://bc.ctvnews.ca/hidden-cameras-...k&_gsc=IkKEgjR

Vancouver’s rental market is so tight that landlords are asking for – and getting – sexual favours instead of rent, even though the practice is illegal, a CTV News hidden camera investigation has discovered.

Dozens of online ads offer the chance at free rent to female tenants willing to have sex with their landlord. One posting seeks a “a sexy slut,” while another references a “friend with benefits.”

When a CTV News employee tracked down some of these landlords by posing as someone interested in cheap rent, our cameras recorded an array of sexual propositions – and claims this wasn’t the first time these men had traded their rooms for sex.

EDIT: The statement from the cop is just...ugh.

Const. Brian Montague of the Vancouver Police Department said the force is aware of the issue, but it’s not a priority for his investigators because the people involved are consenting adults.

[peter12]

Originally Posted by rubecube

Well this is pretty unsurprising.

http://bc.ctvnews.ca/hidden-cameras-...k&_gsc=IkKEgjR



EDIT: The statement from the cop is just...ugh.

Well, this is clearly evidence of a fairly depraved and desperate culture, but I don`t see how it should be a priority for the police.

[rubecube]

Originally Posted by peter12

Well, this is clearly evidence of a fairly depraved and desperate culture, but I don`t see how it should be a priority for the police.

I'm not saying it should be but the argument that it's "consenting adults" is pretty ignorant. These are predators preying on desperate people.

[peter12]

Originally Posted by rubecube

I'm not saying it should be but the argument that it's "consenting adults" is pretty ignorant. These are predators preying on desperate people.

Yup. Honestly, it is pretty ugly.

Vancouver is an incredibly unjust, stratified city.

[rubecube]

Originally Posted by peter12

Yup. Honestly, it is pretty ugly.

Vancouver is an incredibly unjust, stratified city.

Needs more condos.

[peter12]

Originally Posted by rubecube

Needs more condos.

People just need to learn to live with more condos.

[nik-]

If I had a dollar for every time I had to sleep with a landlord for a place to stay I'd have like ...

... $24