# Technical analysis of Vancouver Real Estate



## Berubeland (Sep 6, 2009)

I thought some people here might enjoy a post I read about TA of the Vancouver Real Estate market. 

Technical analysis is not my bag but here's the article anyways I know some people here use TA in their stock buying. 

http://vreaa.wordpress.com/2010/09/...ng-prices-with-the-aid-of-technical-analysis/


----------



## Scottlandlord (May 27, 2010)

Berubeland said:


> Technical analysis is not my bag


I'll help you understand it. 

There is some good info. but it is simply another blog. Anyone interested in the Vancouver market needs to go there, spend time there, and meet with experienced and licensed professionals.


----------



## Berubeland (Sep 6, 2009)

Yes, and with all your emphasis on professionalism and licensing you must have been 100% behind landlord licensing when it was proposed.


----------



## dogcom (May 23, 2009)

On the news hour today they are saying the brief buyers market is already drying up. One lady looking for a home since the summer said that about 80% of the homes on her want list are already sold.

Despite this I would still think we should have some sort of correction but you never know with a market people always want to get into. I also don't see all that much speculation around except maybe with condos but even there a lot of the buying has come from the deep pockets of asian investors.

The asian investors stick to the good areas like West Richmond and Vancouver and will not generally buy in areas that are cheaper even at half the price. This market is unlike anything else in Canada and the majority of Canadians and I am one of them can't participate in this market unless you are already in the market.


----------



## Scottlandlord (May 27, 2010)

Berubeland said:


> Yes, and with all your emphasis on professionalism and licensing you must have been 100% behind landlord licensing when it was proposed.


What are you going on about now??

I *am *for professionals I hire being educated, experienced, and licensed.

Being licensed for your job not only tells me you are legally allowed to do your job(!), it tells me you respect yourself, your profession, and your clients. For example, if you are a "landlord rescuer" you need to be licensed to appear before the Landlord and Tenant Board. If you are not, it shows me that you are either dishonest or simply can't pass those darn nasty tests you need to take.

I look beyond someone's own personal "sales hype" telling me how great they are. Even if they have a $9.99 blog of their own telling me how great they are as they try to snatch unsuspecting clients 

In real estate we are dealing with large sums of money. It's important to learn as much as you can and to hire the best and to learn from the best. 

I always warn people to avoid getting scammed by unlicensed used car salespeople who invite you to their 'carnival' of self-hype and seeking quick "gotcha type sales." These types usually get very angry when their sales pitches are called by those who know what they are up to.


----------



## Cal (Jun 17, 2009)

Scottlandlord said:


> What are you going on about now??
> 
> I *am *for professionals I hire being educated, experienced, and licensed.
> 
> ...


I would offer a word of caution. Just because someone has a license to practice a certain occupation does not guarantee that they will respect their profession or their clients.

And just because someone does not have a license does not mean that they are uneducated or inexperienced.

I would recommend an individual doing their due diligence prior to hiring a RE contractor, mechanic or lawyer.

In regards to you looking beyond someones 'sales hype'. I have seen no sales hype on this website. I do however have difficulty in looking past your intentions to discredit and dishonor another individual on this site. Especially and individual who I feel is a contributor with the intention of helping other forum members. 

We get it...you will respond saying you want to make sure everyone hires a professional, and that they should get the best professional out there for their RE business. That is an answer that you feel is safe and non accusatory of other members.

Not everyone hires a RE agent, for sale by owner. Not everyone takes their car to a licensed mechanic for repairs. They know the mechanic is not licensed. They are ok with that.

Now, unless you are accusing anyone of misrepresenting themselves. We get your opinion. Drop it. I can only speak for myself (and I guess the other member who has stated that he is going to ignore all of your posts) but your presence on this site has not seemed to contribute much at all.

Again your opinion has been stated several times on this site for others to read, it does not need to be restated over and over again.

Thank You and good day.


----------



## kcowan (Jul 1, 2010)

Berubeland said:


> Yes, and with all your emphasis on professionalism and licensing you must have been 100% behind landlord licensing when it was proposed.


This is an unecessary comment. It is tantamount to "baiting".

Come on people. grow up. Be nice. Especially to newcomers! Otherwise the site will develop a reputation as an insiders clique.


----------



## HaroldCrump (Jun 10, 2009)

Scottlandlord said:


> I always warn people to avoid getting scammed by unlicensed used car salespeople


So now we have licensed user car salesmen? What is the world coming to?


----------



## Scottlandlord (May 27, 2010)

kcowan said:


> This is an unecessary comment. It is tantamount to "baiting".
> 
> Come on people. grow up. Be nice. Especially to newcomers! Otherwise the site will develop a reputation as an insiders clique.


Thank you. 

Berubeland views these websites as her own personal stomping grounds. As soon as she is challenged, she goes off on fits and has a melt-down.

I don't apologize if my comments have influenced her attempts to 'pick up' customers for her business. 

Now back on topic: I think these forums have great potential and I won't be shy in providing my ideas based on my decades in the real estate business. I hope that we can all feel free to debate without having stones thrown at us.


----------



## Berubeland (Sep 6, 2009)

Property Managers don't have to be licensed, people who rent residential properties don't have to be licensed. I did though go to a 2 year course in Property Management and graduated with honours in 1994. Incidentally I also won the only scholarship for top student. 

I don't have to be licensed to go to the Landlord & Tenant Board if I work for a corporation. Which I was until March 15th of this year in South Oshawa until the building was sold. 

I was even pinch hitting for a paralegal for a while when his cases conflicted. He was called in to help me when I got sued personally by a tenant. Its impossible to be a witness and the representative at the same time. He then asked me to help him out and I agreed. 

I don't have to be licensed to go to the Landlord & Tenant Board with the landlord as a "friend of the court" on the very rare instances when I rent to a bad tenant. This year...0 last year 1 case.

I don't need to offer this insurance to landlords, that if I make a mistake I will do everything I can to rectify the situation. Which I do not get paid extra for. Which real estate agents don't do even thought they are licensed and also exempt from the requirements. This is an ethical choice, I figure if I put them in, I should throw them out too. I also rerent the place again for free if they move out before the lease is up. 

I have spent an awful lot of time at the landlord & tenant board and keep up to date on the law. Yesterday I attended the Canadian Apartment Investment Conference. (Which just happens to be an accredited course for both RE agents and mortgage agents) Landlord & Tenant Law was a major point of several discussions by property managers. We all have to know the law. 

I also want to point out that the major hurdle to becoming a landlord is accumulating the funds to buy a property. After that you can be absolutely horrible and do all kinds of illegal acts and no one will take your property away from you. You can just rent it to someone else. 

Bad property managers get fired and don't get rehired. I have made my living in this industry for years, mostly working in very active management environments of high vacancy. Not only that our results are compared to other buildings for vacancy, for churn, for operational expenses. I am still chugging along and surviving after years, learning as much as I can and doing my absolute best to keep small landlords out of trouble. I give away as much free information as I can, I give away free leases, free applications, free cap rate spreadsheets, free advice and even emotional support for landlords dealing with difficult evictions. 

I have had a few people approach me about going to the Landlord & Tenant Board, even one from this board. She even offered to pay me and I told her I couldn't legally go because I am not a paralegal, nor have I ever claimed to be ever. I get calls all the time and even at times talk the landlord through filling out an N-4 and forms required. Again...for free. 

I originally had the idea to help small landlords and start my business, in the Sheriff's office, when I met a landlord who had learned that her tenant had left the apartment, but went through the entire eviction process, even thought she knew the tenant had left because the information line told her to. She didn't know enough to give a 24 hour notice of inspection and find the apartment abandoned. Instead she flew back and forth from Ottawa to serve notices and attend the hearing and then finally until she met me at the sheriff's office. I saved her $330 - 380 in enforcement costs that day. 

Then I decided to start my business to help small landlords, to bring to them the processes I had learned working for corporate landlords, from applications, to qualifying the tenant, to presenting suitable properties and so on and so forth. 

You can attack me, my business and my professionalism all you like. You will never get me to sit by and say nothing while you spread the myth of evil Tenant Duty Counsel without proof to people who don't know any better. I have never seen the kind of behaviour at any Landlord & Tenant Board, not Mississauga/Brampton, not Toronto South, not Toronto North, Toronto East, or the Whitby/Oshawa Board either. Do you really think you're the first person I've asked for proof about this? Or even an observation that they had experienced this or seen it? I just want to hear when and where. Do I monitor every single Board office every single second of every day? Of course not. 

I get it and everyone here pretty much gets that you think I'm unprofessional and horrible and all that. When you reply to a thread that cites a website that I thought might be of interest to the people here, some of whom use Technical Analysis in their stock picking, which was quite originally applied to the real estate market, you may refrain from continuing to try to emphasize that I am somehow inept, need to be licensed and so on. If I am wrong, feel free to correct what I am saying, I am always willing to learn, but you'll have to produce more than rumors to back up your correction. 

Oh and you didn't answer the question about if you approve of landlord licensing or not. I'm guessing that just applies to the people you'd like to discredit and prevent from getting business and used car salesman but not yourself.


----------



## kcowan (Jul 1, 2010)

Berubeland said:


> ... I'm guessing that just applies to the people you'd like to discredit and prevent from getting business and used car salesman but not yourself.


I would appreciate it if you would stop guessing...


----------



## dogcom (May 23, 2009)

I would actually like to hear what you think about what I said more to your topic instead of all the other stuff going on here berubeland and company. It may be that downtown Toronto has the same disconnect from other real estate for normal Canadians like Vancouver has.


----------



## Berubeland (Sep 6, 2009)

Sorry there Dogcom, 

This is the Sept 15th news release from CREA with my notes in Italics.

Seasonally adjusted national home sales activity via the Multiple Listing Service® (MLS®) Systems of Canadian real estate Boards in August rose 4.1 per cent from the previous month. This marks the first monthly increase since March 2010.

_But sales last month were down 35% from the previous month, so from July the market is down 31% for sales _

Activity was up most in Ontario and British Columbia, with monthly gains in these two provinces accounting for most of the improvement in national sales activity in August. Seasonally adjusted sales activity either increased or remained stable in over half of all local markets across Canada.

Year-to-date transactions are up 2.2 per cent compared to the first eight months of last year. Activity rose sharply over the second half of 2009 and reached levels that are unlikely to be matched in the final four months of 2010, so year-to-date comparisons are forecast to turn down in the coming months.

_My official guess/prediction is that by December we'll reach 10% reduction in price year over year. Many buyers like you've stated are priced out. Many first time buyers have to come up with 5% down. Real estate investors have to both come up with 20% down and qualify by income. The new CMHC rule is that 50% of the rent is added to your income for qualifying... but when you are buying additional properties your income is then further split using the Total Debt Service Ratio. So you only get to use about 20% of your rent on the property to qualify. If you are a high income earner, you'll be able to get a few mortgages but buying a lot of properties will be very difficult. (I learned that at the Durham REI Group) Having said that I learned at the Canadian Apartment Investment Conference that conventional lenders are back in the market (no CMHC insurance is required) so we'll see. Those are my thoughts _


----------



## Scottlandlord (May 27, 2010)

How many properties do you own?


----------



## Four Pillars (Apr 5, 2009)

I'm not a fan of technical investing for stocks - I think there is just too much randomness in the data.

I never thought of using TA for real estate. One problem I can think of is that you can only really analyze data from the market as a whole - and then apply it to a single house purchase/sale. Normally for stock TA you would look at the price changes for an individual stock with the idea of buying/selling that stock.


----------



## steve_jay33 (Aug 29, 2009)

This is better than Oprah. We should have a thread Berubeland vs. Scottlandlord


----------



## Berubeland (Sep 6, 2009)

From the website '**** my dad says':

"Don’t focus on the one guy who hates you. You don’t go to the park and set your picnic down next to the only pile of dog ****."

I'm ignoring him now, lets hope I can keep it up.  I apologize for disturbing the site.


----------



## dogcom (May 23, 2009)

Thanks for your reply berubeland and I agree with your comments. I also wonder if you think there really has been a speculative frenzy in real estate as many suggest. I simply don't see it like we saw it in Vancouver in 1980 or Toronto in 1989. We are overpriced but not because everyone is jumping over each other to buy anything they can find to flip it.

On the TA I also don't see how it can be applied to real estate. In stocks you can sell the next day and then buy back in even on the same day as you see the TA you are using developing but you can't turn real estate around like that.


----------



## Berubeland (Sep 6, 2009)

Is there speculative frenzy? 

Well kind of sort of. 

Ok well, this are my observations. Landlords as a group tend to be very to frugal and conservative. There are many of my clients who are older, and many accidental landlords. For instance, one lady had a house, then her husband died and she didn't want to live in that house after a while, so she rented it out, she bought a new house, then her mom died and she got an inheritance and her mom's house. She bought herself a new house with the inheritance. Every once in a while she buys a house. The last one she bought she severed a lot and sold that. 

Then there's lots of folks in the trades who have bought rental properties some to buy a job and flip and others just to buy and hold. They use their skills to keep the place in good shape. 

The first thing I noticed about 7 years ago is that a lot of these people who had been long time landlords, cashed out, and or stopped buying properties to rent out. At the same time the tenant quality was going down as anyone with first and last and a job could just buy a house and not rent. 

For these people it didn't make sense to buy a house for $400K and rent it out for $1400 -$1600 per month. There's no money in it and considerable risk of damage/expenses. 

With the advent of Robert Kyosaki and his ilk of real estate gurus lots of really inexperienced and naive landlords who thought they could make a fortune by renting out to tenants who will pay your mortgage. 

The mantra is positive cash flow... but if you don't include real expenses like management, vacancy and maintenance, you're hurting. That's not $100 per month. You end up with properties that are not sustainable without cash donations from the owner. 

The rents have gone down since I've been in the business. Some areas have held steady...but expenses have gone up. 

So basically anyone buying recently unless they bought at a proper price has been speculating on appreciation. 

Then there's Brad Lamb's favourite customers the people who buy 50-100 pre-construction condos and rent/sell them once built. Basically I don't know any landlords who actually rent out condos for profit. I'm sure there are some, I just don't know any. 

I guess overall the problem is that people have gotten away from the fundamentals of income property investment, that the rent is supposed to pay the landlord, to people just buying a house for slim to none or even negative cash flow hoping appreciation will make them rich. 

How widespread is it? Well it hasn't been frenzied but it has slowly crept up on us. One thing for sure there's lots of landlords out there providing subsidized housing.


----------



## Scottlandlord (May 27, 2010)

steve_jay33 said:


> This is better than Oprah. We should have a thread Berubeland vs. Scottlandlord


Yeah, but Scottlandlord actually owns rental properties and makes his (very nice) living off it, and has for decades.

While berubeland once rented her basement, for a short time, and is all over the free sites advertising her services to 'manage' places for a fee from actual investors.

And I really wish Rachelle would take the government mandated courses to actually become a qualified property manager. I'd even be willing to donate a few bucks to her to do so. We need qualified PROFESSIONALS in our industry and fewer hucksters with a $9.99 blogsite.


----------



## GeniusBoy27 (Jun 11, 2010)

I think that with any market, there are always gems to be found. It takes patience to do so. Some of the best finds will never make it to the internet or websites. That's why it helps to have good agents and friends that can alert you to opportunities.

You still need to do due dilligence.

My wife and I went looking this weekend at land opportunity sales between Barrie and Toronto. Quite reasonable purchases, until you read the development codes, etc.

I agree with Scott, that being cheap on some things isn't always the best. Get a wonderful real estate lawyer, accountant, etc. Sometimes paying more does lead to better results. 

However, at the same time, I can ALWAYS learn from anybody, and some of the best tips I've received come from my 80 year-old neighbour 2 doors down, or a lady who talks to my mother-in-law at her store.

My gut agrees with Beurbeland that the market in Toronto is becoming cheaper, and I'm willing to sit and wait for better buying opportunities in 2011. However, I've started looking around the 905 for opportunities that may make sense now.

The one thing I will say to Berubeland is that under a holding company, and using multiple number companies, you can buy still a large number of properties.


----------



## dagman1 (Mar 3, 2010)

Scottlandlord said:


> Yeah, but Scottlandlord actually owns rental properties and makes his (very nice) living off it, and has for decades.
> 
> While berubeland once rented her basement, for a short time, and is all over the free sites advertising her services to 'manage' places for a fee from actual investors.
> 
> And I really wish Rachelle would take the government mandated courses to actually become a qualified property manager. I'd even be willing to donate a few bucks to her to do so. We need qualified PROFESSIONALS in our industry and fewer hucksters with a $9.99 blogsite.


Not to derail the thread here, but I can't help but ask, what is this joke license that you have that you think makes you a "professional"? I think find it funny that you would throw those words around--I'm certain that a "qualified property manager" is nothing close to a professional in the true sense of the word.

F.W.I.W. I consider Berubeland to be an excellent contributor, not only in terms of her practical knowledge, but the quality of her writing and willingness to help. For your part, I have seen nothing of substance come from your mouth, which confirms that Berubeland is right: a license has nothing to do with competence or intelligence.

I would have guessed, but I don't have to as you already admitted it, you don't like the article because you have a substantial position in RE. Surprise! I think technical/fundamental analysis aside, anyone who thinks rationally about the RE market in Vancouver/Toronto will realize that it is substantially overvalued.

Berubeland advances a sound argument about why RE is overvalued. The best you can do is to discount the analysis because it comes from a blog rather than address the argument on its merits. It looks like you lose so far.


----------



## Scottlandlord (May 27, 2010)

dagman1 said:


> you don't like the article because you have a substantial position in RE. Surprise! I think technical/fundamental analysis aside, anyone who thinks rationally about the RE market in Vancouver/Toronto will realize that it is substantially overvalued.


I've yet to hear a rational argument on why it is over-valued.

And I've presented reasons why much of the conventional wisdom from non-RE investors is wrong. By not listening to what was before telephone chatter, and it now blog chatter, I've done very well over the past 20+ years.

One reason, being the economic rise of certain regions and immigration patterns to Canada, especially due to the US decline.

I'll help you out a little. Start reading The Street regularly.

http://www.thestreet.com/story/10862207/1/china-now-runs-the-world-soros-says.html


----------



## GeniusBoy27 (Jun 11, 2010)

On properties being overvalued, the Toronto market is due for a correction given the cyclical nature of real estate, and a return to more normal inventories.

However, on the longer term cycle, the Economist has made a comparison between various cities around the world, and considers Canadian cities to be cheap (including Toronto and Montreal, but didn't comment about Vancouver). I will caveat the statement with the fact that this analysis was done prior to the appreciation of the Canadian dollar.

I have heard anecdotally from friends in the real estate business a significant amount of purchasing from foreigners, but not just the Chinese, but also from the Middle East and Europeans.


----------



## Berubeland (Sep 6, 2009)

My reasoning for declaring the property market in Toronto is 

The gap between the average salary in Toronto and the average price of a house. (about $20,000) when I attended a lecture given by CMHC that was proclaiming a return of the renter due to those very statistics. In the last few years since then the gap has increased even more as prices have continued to go up. 

The rest of my reasoning goes as follows, every single day I get every single listing of multiple units that goes on the market in the GTA. There's not too much there worth purchasing from an investment standpoint. The asking prices are too high to justify buying them as a money making asset. 

The trend has been to drop expenses such as property management, vacancy and maintenance from the calculations to make a property look like a cash flow positive property when in fact it just isn't. Show me a property that doesn't require management or turn over tenants or require maintenance and I'll change my mind on this issue. Realistically if the owner goes into this situation fully aware of the risk, willing and able to infuse periodic cash donations, I don't have a problem with this. There are lots of kinds of property investing that are never cash flow positive such as hold land, redeveloping sites, changing zoning. 

What I specifically have a problem with, is those owners who don't know and are misled by people trumpeting the false assumption that real estate always goes up, just rent it out and you'll be fine kind of thinking. Furthermore they think they are doing something wrong because they do nothing but lose money. The only way they can get ahead is for nothing to go wrong... ever. Basically they are beat before they start.

The difference between being a small owner and being a larger investor for a multi-residential building is this margin of safety. No bank will finance a building over 6 units without those numbers plugged in. (They're supplied by CMHC) 

Really this is why there is such a gap between the small landlords and the big ones. For large landlords, an eviction is just another expense already accounted for, as are vacancy and property management. We try to minimize the bleeding as much as possible but for us, it's just part of the business. 

For small landlords who don't have these safety margins in place... they get to take money from their paycheck, LOC or savings to pay their mortgages, taxes and other expenses. Every time, year after year. 

Anyways from what I have observed, this changes at about the one million mark. This is far from attainable for the average bear. 

I believe there are good investment properties out there, but you have to search for them. I haven't seen in Toronto yet, a nice well kept, well managed property that will cash flow enough to cover all expenses under the $1,000,000


----------



## steve_jay33 (Aug 29, 2009)

Scottlandlord said:


> How many properties do you own?


And Scottlandlord how many properties do you own? (Seems fair to ask you the same question). I own my principal residence and that is all.


----------



## GeniusBoy27 (Jun 11, 2010)

Berubeland: 

The one thing the rent vs. own question hasn't answered is the impact of external factors, such as speculative property purchases from outside the GTA. It probably isn't putting significant pressures on single detached properties, but it could be putting pressure on the condo market. I'd be fascinated to know if anyone has looked at this impact.

Regarding properties: In general, I think you're correct. However, I have had the fortune of finding properties below the $1 million mark that have been cash flow positive from the start, but they've come under durress situations, and in the commercial arena.

The key is though that the margin is built from the need for the seller to sell quickly, and the ability to provide immediate cash flow to the seller.

So let me give an example.

The first property we bought was a work/live/loft condo with 2 parking spots. We used it commercially. I'm going to round off for simplicity sake.

Purchase price = $380,000 after renovations
Annual rent = $43,000, Monthly rent = $3600/month 

Right up front, that's more than the 10% gain that the real estate investment network says would be profitable. What were the conditions that allowed for this negotiation? It required renovation. The buyer was not in Canada. He was losing cash on the property and wanted to sell quickly.

Mortgage = $1400/month (that includes principle and interest)
Maintenance Fee and Property Management = $700/month
Property tax = $700/month.
Vacancy Allowance = $200/month
Maintenance + Insurance = $400/month

Total = $3400/month

So, it is possible to get cash flow positive properties for less from the start. As I said, the key though is to be non-emotional about the decision from the very start, and to figure out what the price point is for both you and the seller, and if there's a range where the properties will be accepted. My wife is very emotional about properties, and I've had to say no to a few properties that she wanted to buy for investment purposes. But on each purchase, I crunch the numbers and say yay or nay.

The added advantage of having commercial is I have a 5 year-lease in place (stability), and I can raise rents by any percentage.

I've had the fortune of adding a few more properties since then that have been similarly cash flow positive, and some that are slightly cash flow negative, but hopefully going positive soon. Having said that, it's probably some ridiculous ratio of properties viewed versus properties bought, but I like doing it! So it's a side hobby. However, properties that are cash flow positive don't last long on the market, so you better know your market, know the value, and move quickly or else the property is going to be snapped up in no time.


----------



## Berubeland (Sep 6, 2009)

I certainly agree with you that under certain conditions it is definitely possible to find a property that cash flows properly right here in the GTA.

Commercial and industrial are much less liquid than "residential" and a motivated seller makes all the difference. Small mixed use buildings are good too. You're right they go very fast. 

I would like to hear more from you about how to use holding companies and corporations to invest in real estate. This is very interesting to me and I know hardly anything about it. As a property manager, you get the building you're hired to manage. I am really good at turning properties around and filling them up and keeping them that way, but the ownership structure and tax implications and even generally the cash flow, are kept secret. Certainly with the owners I've worked with in the past.


----------



## Four Pillars (Apr 5, 2009)

GeniusBoy27 - How much did you spend on renos? I'm just curious if it was a major overhaul or a small reno.


----------



## GeniusBoy27 (Jun 11, 2010)

Mike:

It depends on the property, but generally small renovations.

Big renovations and a low property price is actually beneficial to us, since we have significant contacts in the development/construction side of the family.

One of the things that is important is to have good relationships with trades people that you trust. If you don't have that, they can run up your prices.

Berubeland: I'll get back to that with some thoughts on holding companies on another thread. It may take a little time to explain it properly, so I'll post as a separate thread this weekend if I have the time.


----------



## Young&Ambitious (Aug 11, 2010)

Interesting comparing Vancouver to international markets and how in that sense our real estate can be called a 'deal'. Another thing to note that is that Vancouver will always be stronger than many other Canadian cities due to the large variety of business and market type exposure, exports/imports, tourism, etc. There has not been much of a correction over the past few years alike many other cities worldwide. As such for discussion's sake I'd like to put forth the idea that perhaps the Vancouver market can be considered lower risk than other cities for real estate investment purposes and on an international basis even sustainable.


----------



## Berubeland (Sep 6, 2009)

Vancouver is showing serious signs of illness  Toronto still seems OK but I noticed that in the 905 region inventory is building up. 

I was looking at Brampton the other day and I couldn't believe how many houses were for sale in the small area I was looking at. I was talking to an agent who works in Leslieville and she has seen no signs of slow down. She apparently did an offer on a house recently with 40 offers. 

So who knows


----------



## K-133 (Apr 30, 2010)

I think that there are two major things to consider with real estate in Vancouver:

-a- There are a lot of very wealthy foreign dollars there, directly impacting the market prices.

-b- Property Taxes are subsidized, therefore every person can afford more mortgage. e.g. On an $800,000 (market value) downtown condo, property taxes are $3000/year. If we look at a market on the other end, the equivalent condo in Ottawa would cost $500,000-$600,000 (market value) and property taxes would be $7000/year. That means that the equivalent person can potentially afford $4000/year more in mortgage payments - that's huge!

Overall, one may argue that prices are inflated due to the fact that people can afford more mortgage, but one cannot discard the fact that. Either way, the market prices are not artificial. The biggest risk to the market in Vancouver, as far as I'm concerned, is the sustainability of a subsidized property tax system. My guess, is that this subsidy is driven by tourist revenues, and is there to ensure that BC residents can afford to continue residing there and therefore, continue serving the tourist market.


----------



## FrugalTrader (Oct 13, 2008)

I wonder what would happen to Vancouver real estate if they stopped subsidizing property tax. I mean, it's not uncommon to have a $1M house there, which would work out to be about $10k/year. But I guess, if you can afford a $1M house, then another $10k shouldn't be an issue.


----------



## GeniusBoy27 (Jun 11, 2010)

I would see some of the elderly Vancouverites have issues with property taxes rising (especially if income isn't changing) ...


----------



## kcowan (Jul 1, 2010)

Young&Ambitious said:


> IAs such for discussion's sake I'd like to put forth the idea that perhaps the Vancouver market can be considered lower risk than other cities for real estate investment purposes and on an international basis even sustainable.


Vancouver has become a true Pacific city in the sense that Asians can relocate into any neighborhood rather than just into the Richmond ghetto. But Asians proved to be very fickle investors last time there was a downturn. The ultimate measures like P/E for stocks is price/rent and price/wages and both of these are offscale for Vancouver.



Berubeland said:


> Vancouver is showing serious signs of illness  Toronto still seems OK but I noticed that in the 905 region inventory is building up.
> 
> I was looking at Brampton the other day and I couldn't believe how many houses were for sale in the small area I was looking at. I was talking to an agent who works in Leslieville and she has seen no signs of slow down. She apparently did an offer on a house recently with 40 offers.
> 
> So who knows


The issue is that Toronto is really a conglomeration of markets. When we lived there in the 80s, Markham overtook Oakville as the leader in wages and this impacted housing prices. Inner city neighborhoods offer less volatility.


----------



## jamesbe (May 8, 2010)

Ottawa's market is dead IMO, no matter what agents will tell you.

My house and 5 others on my street have been listed since August with NO VIEWINGS!


----------



## Cal (Jun 17, 2009)

jamesbe....curious as to your situation, 5 houses for sale on your street, are they about the same sq ft, listing price and such? Or are they completely different sizes, quality...

No viewings...curious to see who drops in asking price first and who sells first.


----------

