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It really is different in Victoria some how and I hate it.
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Jul 10, 2020 19:34
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sitchensis posted:I was watching the Big Short last night and I really felt the despondency of the characters when subprime mortgage defaults went up, but the cost of the investment vehicles within they were packaged increased in price. Every local and (mostly) legal market fundamental. I'm pretty sure there's still tons of capital flight from China, as well as international money laundering.
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Jul 10, 2020 19:41
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Baronjutter posted:It really is different in Victoria some how and I hate it. Boomers are still rich and never stopped plying their kids with downpayment money. COVID has killed the service industry but it hasn’t done anything to the retired govt ministry employees with good pensions and a giant house in Oak Bay.
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Jul 11, 2020 03:36
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My grandfather moved to Oak Bay from Halifax after WWII. He bought his lot for $1,000 and then spent $5,000 on a new car instead of buying the other 5 vacant lots beside his.
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Jul 11, 2020 03:52
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If you have no kids then there is absolutely nothing wrong with continuing to rent. Seriously. If you can do this I would suggest you do it, I guarantee you it's probably cheaper than all the unrecoverable costs of owning (mortgage interest, strata fees, maintenance, insurance, etc), and moreso now than at any time in the past several years.
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Jul 11, 2020 03:59
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qhat posted:If you have no kids then there is absolutely nothing wrong with continuing to rent. Seriously. If you can do this I would suggest you do it, I guarantee you it's probably cheaper than all the unrecoverable costs of owning (mortgage interest, strata fees, maintenance, insurance, etc), and moreso now than at any time in the past several years. Have you seen rent prices? There are a lot of reasons not to buy a house but the unrecoverable costs are almost certainly not one of them, at least not where I am.
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Jul 11, 2020 12:47
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They're talking Vancouver and Victoria. Rents are high, but the equation of "should I get a mortgage or should I rent and put the difference into index funds?" still falls in favour of renting. It's the difference between renting a house for $3-$4K/month and getting a $1.5mil mortgage to buy that same house. (And even fewer people can get a $1.5mil mortgage then can pay $3-$4K/mo in rent.)
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Jul 11, 2020 15:51
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What kind of rental is it, though? I used to 100% be all "rent is cheaper, invest the difference" but after renting in Toronto you get fed up with the choices. Small, lovely layouts or being at the mercy of some corporate property management company who gets on the UN Human Rights shitlist or some amateur landlord who'll kick your rear end to the curb because they "need to move their grandmother in" (renovate and make more money through Airbnb).
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Jul 11, 2020 17:50
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The rental market was REALLY terrible up until a couple of months ago but a combo of the BC government introducing the vacancy tax, increasing renter protections and covid killing the airbnb market has helped enormously.
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Jul 11, 2020 18:25
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ChickenWing posted:Have you seen rent prices? In vancouver you can rent a 1bdrm apartment for $1700-2000. The same 1bdrm apartment will cost you about $500k to buy. With mortgage interest around 3% and 100k downpayment, you're already paying 1k a month excluding any property tax, strata fees, or maintenance costs. Obviously mortgage interest payments decrease over time, but the money you put into your apartment is not earning money from other more diversified investments, so unless your property value goes up (it always goes up  ), you're just straight up leaving money on the table, let's just say the mortgage interest and lost opportunity cost together is 3% on average each year. All included it really doesn't offer much if any value above just renting.
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Jul 11, 2020 20:12
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Baronjutter posted:It really is different in Victoria some how and I hate it. What is Victoria doing about high housing costs? Do they have a NIMBY or YIMBY council or both? Building more rental or condos or ? Bi-la kaifa posted:My partner and I are about to buy in Cowichan. It's considerably less insane here because no one wants to pay the high property taxes. Prices have even gone down a tiny bit. Still loving ridiculous though. I can't wrap my head around a new home costing $35000 in the eighties compared to $450000 now, for the same home, with no updates or improvements. Heaps of retirees from BC and Alberta flooding to the island trying to buy roughly the same number of detached homes would explain the price increase. Unless there's there's been a significant amount of suburban sprawl around there I dunno the area. qhat posted:In vancouver you can rent a 1bdrm apartment for $1700-2000. The same 1bdrm apartment will cost you about $500k to buy. With mortgage interest around 3% and 100k downpayment, you're already paying 1k a month excluding any property tax, strata fees, or maintenance costs. Obviously mortgage interest payments decrease over time, but the money you put into your apartment is not earning money from other more diversified investments, so unless your property value goes up (it always goes up A big focus on the upside of owning vs renting is often that the underlying value of the property can increase, but the other thing that's often unsaid is that there is a value to owning the asset itself in that you can borrow against it. Depending on your goals in life that ability to borrow can be highly valuable to absolutely essential. Even if the property stays absolutely flat in value, your equity in the property increases, and your ability to borrow against the property increases. The ability to borrow significant amounts of money opens a lot of doors and opportunities. This fact alone can justify buying vs renting.
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Jul 11, 2020 21:55
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Femtosecond posted:A big focus on the upside of owning vs renting is often that the underlying value of the property can increase, but the other thing that's often unsaid is that there is a value to owning the asset itself in that you can borrow against it. Depending on your goals in life that ability to borrow can be highly valuable to absolutely essential. There is value in that, but the most favoured type of HELOC by the banks is the readvanceable one where you can only withdraw the amount of equity you have built up, which is basically just using the money that you'd have available whether you have a mortgage or not, and the only difference is you now have to make interest payments on it and the bank can call you on it at any time. The only value that comes that HELOC is investing it in other income producing assets (dividend paying stocks/bonds, or also commonly another income producing property) so you can essentially turn the mortgage interest into a deduction on your tax returns.
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Jul 11, 2020 22:53
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And just elaborating a bit more on what I'm saying, I'm making the assumption that the rent you pay is equal or lower than the unrecoverable costs of owning a financed property, which is at least certainly true (as others have pointed out) here in Vancouver + Victoria. The value proposition of owning is obviously going to be different if that assumption doesn't hold in your area. YMMV
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Jul 11, 2020 23:00
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qhat posted:And just elaborating a bit more on what I'm saying, I'm making the assumption that the rent you pay is equal or lower than the unrecoverable costs of owning a financed property, which is at least certainly true (as others have pointed out) here in Vancouver + Victoria. While I'm pretty sure this is true for single family homes, is it true for smaller apartments and condos? A $600,000 new build shoebox condo rents for $2000-$2500 right now. With a 5% down payment you're looking at monthly interest of $1200 or so, plus say $200 in strata fees, $100 in property taxes, and $200 opportunity cost on the $30k down payment. Still quite a lot of buffer room in there for skyrocketing insurance rates or an incompetent strata jacking fees up to pay for candles or whatever, and still come in well under the $2000/mo you'd pay minimum in rent. Obviously not everyone can save up the down payment and/or cover a $3000/mo cash flow hit instead of $2000, but I think ever since rentals went crazy in Vancouver over the last few years your assumption about rent being lower than the unrecoverable costs is no longer true.
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Jul 12, 2020 17:20
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Those are some really low condo fee and property tax amounts.
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Jul 12, 2020 17:23
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Jordan7hm posted:Those are some really low condo fee and property tax amounts. Assessed value of $600K in Vancouver is $1500/year in property tax, I believe so it’s only $25/mo low on that part at least. E: strata fees average 35-40 cents per sqft, so that’s a bit more than 570 sqft worth at the low end. Subjunctive fucked around with this message at 17:34 on Jul 12, 2020 |
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Jul 12, 2020 17:31
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Goddamn Vancouver vs Ottawa in that case. e: did not realize Vancouver has the lowest property taxes in North America. Jordan7hm fucked around with this message at 17:42 on Jul 12, 2020 |
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Jul 12, 2020 17:38
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Subjunctive posted:Assessed value of $600K in Vancouver is $1500/year in property tax, I believe so it’s only $25/mo low on that part at least. That doesn't factor in the basic grant though. You're looking at $1100 after the grant. I know there are some shitshow buildings downtown with $400/mo strata fees for 500sqft units, but a recently built 4 story mid-rise unit in Mt Pleasant or whatever isn't going to be over $200/mo for a 550sqft unit (which is all you're going to get for your $600,000 or $2000/mo in rent). In any event, there's enough buffer room in comparing unrecoverable costs for property tax and strata fees to double and still come out "ahead" on that comparison alone.
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Jul 12, 2020 17:43
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qhat posted:There is value in that, but the most favoured type of HELOC by the banks is the readvanceable one where you can only withdraw the amount of equity you have built up, which is basically just using the money that you'd have available whether you have a mortgage or not, and the only difference is you now have to make interest payments on it and the bank can call you on it at any time. The only value that comes that HELOC is investing it in other income producing assets (dividend paying stocks/bonds, or also commonly another income producing property) so you can essentially turn the mortgage interest into a deduction on your tax returns. Yes this is all true. Two things to add tho: 1) Ok breaking my argument about dismissing gains, if the property does increase in value you can get a HELOC that is based on the new value, so yeah free extra cash to borrow. (eg. the HELOC is based on the current assessed value, which may be several hundred thousand more than your original mortgage) 2) The house remains an asset of value that can be signed against in more, I dunno what you call these, old fashioned, "go to the bank manager and ask for a loan", type borrowing situations. If you have no assets the bank is never going to approve a loan for you, but if you have property that you can put up as collateral that starts to make things possible. (I've never personally done this) Jordan7hm posted:Goddamn Vancouver vs Ottawa in that case. The fact that Vancouver has some extraordinarily expensive detached home real estate really distorts the property taxes. If you have a small apartment you're on the winning side of the equation. If you look instead at tax collected/capita Vancouver is in the middle of the pack in Metro Vancouver Jordan7hm posted:Those are some really low condo fee and property tax amounts. Yeah $200 is low... For new builds as well there has been a trend of fees being set low for marketing purposes. Given the insurance situation, if anyone was doing the math on whether they could afford a property, for a no frills building, I'd pencil in $400 for fees to be conservative because that may be where they end up !
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Jul 12, 2020 18:37
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Putting an offer in on a house today lol
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Jul 13, 2020 15:23
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That's it guys, here comes the crash. Seriously though, congrats. What neighborhood?
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Jul 13, 2020 15:28
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Don’t need to outwait the crash, just baronjutter.
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Jul 13, 2020 15:35
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Femtosecond posted:2) The house remains an asset of value that can be signed against in more, I dunno what you call these, old fashioned, "go to the bank manager and ask for a loan", type borrowing situations. If you have no assets the bank is never going to approve a loan for you, but if you have property that you can put up as collateral that starts to make things possible. (I've never personally done this) This is a really critical point. A home is likely to be a person's first real leverageable asset, and in a debt-driven economy that's a pretty big launchpad.
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Jul 13, 2020 15:37
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ChickenWing posted:This is a really critical point. A home is likely to be a person's first real leverageable asset, and in a debt-driven economy that's a pretty big launchpad. Launchpad to what? The only thing I can think of is starting a business, but that doesn't seem so great because you can lose your business and your house at the same time. Maybe buying more houses?
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Jul 13, 2020 15:58
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Boot and Rally posted:Launchpad to what? The only thing I can think of is starting a business, but that doesn't seem so great because you can lose your business and your house at the same time. Maybe buying more houses? Launchpad to renovating your kitchen! It pays for itself!!
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Jul 13, 2020 16:49
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You buy a house for 600k, a year later it's worth 700k. You use those gains to open a line of credit and re-do your kitchen. Now your house is worth 800k. Now you can buy the fancy car of your dreams, you deserve it. Next year your house will be worth 900k so expand that line of credit and maybe buy an investment condo. Rent out the condo and the suckers are paying your mortgage for you!! Next year that 250k condo is worth 300k and your house is 1.1 million. Just keep maximizing your debt, debt is so cheap right now and housing only goes up you'd be a fool not to. I'd normally say this in a mocking tone but drat it's been working well for a lot of people over the last 10-15 years. I'm not comfortable with that level of risk though. Just one small house I can live in for the rest of my life without the fear of a landlord kicking or pricing me out every few years at a price that still is only 1/3 our income is all I'm after.
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Jul 13, 2020 16:58
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But is it in Langford?
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Jul 13, 2020 17:13
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Boot and Rally posted:Launchpad to what? The only thing I can think of is starting a business, but that doesn't seem so great because you can lose your business and your house at the same time. Maybe buying more houses? Margin trading! Paying for post-secondary school! Bailing out your parents when they convert their retirement savings to Tether! Extended periods of unemployment! HELOC as emergency fund seems pretty common.
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Jul 13, 2020 17:25
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Baronjutter posted:Just one small house I can live in for the rest of my life without the fear of a landlord kicking or pricing me out every few years at a price that still is only 1/3 our income is all I'm after. I mean and that's it really right? Everyone has to live somewhere and there's a point where it becomes worth it just for the emotional stability.
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Jul 13, 2020 17:34
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Boot and Rally posted:Launchpad to what? The only thing I can think of is starting a business, but that doesn't seem so great because you can lose your business and your house at the same time. Maybe buying more houses? Starting a business would be the big one. There are loan programs through the business development bank where you wouldn't need to offer up an asset as collateral, but they can exclude certain business expenses that may be crucial depending on the type of business.
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Jul 13, 2020 20:44
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Can you not use the diversified investments that you've accumulated by not buying the house as collateral instead?
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Jul 13, 2020 22:10
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Lead out in cuffs posted:Can you not use the diversified investments that you've accumulated by not buying the house as collateral instead? I haven’t done it, but I’ve asked about it, and was informed that unless it’s treasury bonds or similarly unassailable items, you get a very low LTV limit (like 10%? I don’t recall specifically) versus being able to borrow more than half the estimated accrued equity of a piece of real estate. Houses are safe as houses, and they don’t want to have to do volatility analysis on your portfolio. I think it’s also harder to get a lien on stock holdings than a property. This was even the case where the assets in question are managed by the bank from whom I was seeking credit. If you’ve got a QuestTrade account I can’t imagine how uninterested a bank would be in letting you borrow against it unless you’re talking 8 digits.
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Jul 13, 2020 22:15
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I can borrow up to 30 (maybe more now) percent against my wealthfront holdings at 2% apr non-amortizing. Demand deposit of course, but pretty nice.
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Jul 13, 2020 23:43
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So our realtor wasn't looking confident about us winning this bid after he saw how much demand there is on this place. The listing was already a good 50k over assessed value, comparable houses were selling for almost exactly the assessed value, and the house most likely needs 50k in foundation work. And it sounds like to have any chance we need to offer at least 20k over asking price. Nope, not with those repairs needed. Even realtor is hinting we should pass on this and wait for the post-covid rush to cool down. Oh well, goodbye perfect 1930's dream house. Logic and markets and "the fundamentals" say prices should go down post covid in the longer run, maybe by winter. CMHC is saying to prep for a crash of 15-30%. But man, it's Victoria. The meme now is that due to trump and covid a huge influx of Canadians living in the US are going to move up here and they're all going to flock to Victoria. So some stupid reptile brain is shouting at me to "BUY NOW OR BE PRICED OUT FOREVER". Been ignoring that voice for 10 years while getting increasingly priced out. Foreverally priced out. Fully commodified permanently priced out forever and loving it.
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Jul 14, 2020 00:27
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Even here in the US there's little evidence so far that COVID has impacted prices or even sales, lots of stuff coming up and selling without too many price reductions since the beginning of the year. If there is going to be an impact it's going to take a while to reveal itself.
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Jul 14, 2020 00:59
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Claes Oldenburger posted:Flight from Vancouver. The entire Island coast from Nanaimo down to Sooke has gotten absolutely JACKED up from all the boomers and olds selling their places at stupid insane prices, moving to the island and having a couple hundred thousand left over. The flight madness, and retiree influx pumped up the Comox valley too. Every year for the past 5 that I've lived here, except the most recent one had the assessed value of the place I rent go up by 25 to 35% each year. This year it dipped in the single digits. The prices started at a lower level, but the rate of increase kept pace with the insanity of Vancouver.
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Jul 14, 2020 02:48
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As of 2016 apparently 783k Canadians live in the USA. How much of that comes back? It's wild how bad things are getting down there that I'm actually starting to wonder. With the entire tech scene able to WFH, how much of silicon valley comes back to Vancouver in the same time zone? A family friend of ours was based in Florida. They were musing about coming back to Canada, but given the insane ramp up of cases in Florida this week they decided to bail. Basically loaded up the minivan and drove straight here to BC over a day or two and are now quarantining themselves.
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Jul 14, 2020 04:40
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If you're looking to use securities as collateral then really the only thing you can do that with is a margin trading account. A bank will however loan you a significant amount of money to purchase an existing profitable business with a large upfront investment on your part though (like 30% of purchase price).
qhat fucked around with this message at 05:00 on Jul 14, 2020 |
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Jul 14, 2020 04:54
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Femtosecond posted:As of 2016 apparently 783k Canadians live in the USA. How much of that comes back? It's wild how bad things are getting down there that I'm actually starting to wonder. In tech, not a lot since the tech salaries immediately below the border are completely ridiculous compared to say Vancouver. Plus those same companies are now being like "if you move away we're going to pay you less". So yeah despite the pandemic and other things, the incentive is still extremely strong to stay.
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Jul 14, 2020 05:02
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qhat posted:In tech, not a lot since the tech salaries immediately below the border are completely ridiculous compared to say Vancouver. Plus those same companies are now being like "if you move away we're going to pay you less". So yeah despite the pandemic and other things, the incentive is still extremely strong to stay. On the other hand basically everyone I know in tech who has Canadian citizenship is making plans or already in the process of moving back. For them the pay cut is worth it to have even a semi-functional government and to not be surrounded by Americans. Obviously this is anecdotal, it would be interesting to see a real study.
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Jul 14, 2020 10:56
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