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jimtan
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What does affordability mean today?

Sat Apr 22, 2017 6:42 pm

In the past, I have argued that RE prices could keep rising as long as residents could move to cheaper homes out in the suburbs. That the bears were wrong as long as money kept flowing into the prime areas, and supply kept rising in new neighbourhoods.

In other words, affordability was a matter of location. 

Today, the situation has changed. Affordability is now an issue in all suburbs. Right after I sold my apartment in spring 2016, I was told by my realtor that there were no detached homes in Tsawwassen for under a million.

Burnaby, Delta and Surrey have all caught the fever. How many college graduates can afford million dollar crack shacks?

Remember that 50% of residents are still renters and rental vacancy is as low as zero in some areas.

Not surprising that there has been a massive backlash and governments are counter-attaching.

“Real estate speculators driving up prices to be target of reforms, Sousa says”

https://www.thestar.com/news/queenspark ... arket.html


Foreign buyers tax, expanded rent control coming to Ontario. In the short term, intervention is effective in breaking the momentum of a speculative surge.

Government intervention, as I warned you, is the new fashion in hot provinces. What next for metro Vancouver if prices don't moderate?
 
jimtan
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Re: What does affordability mean today?

Sat Apr 22, 2017 6:44 pm

In the long run, supply has to increase. Looks like Vision Vancouver has finally found some backbone. Remains to be seen how effective they will be.

However, BC's foreign buyers tax has been effective in shutting foreign buyers out from metro Vancouver. Steve, our honest realtor, has discovered an interesting kink in the market (see chart below). 

http://vancitycondoguide.com/luxury-hom ... uyers-tax/


Notice the bulge in inventory above the $2m price level. That's the result of a market without foreign buyers. The real market for local residents earning normal wages. That's the real (not theoretical) limit of affordability.

The REBGV benchmark price for detached is $1,489,400, up 1.03% month over month. The March price is nowhere close to the June 2016 peak. The benchmark price for Vancouver West detached is $3.5m, up 1.14% MoM. For Vancouver East, benchmark $1,452,200 up 1.87% MoM.

http://www.rebgv.org/home-price-index?r ... 2017-03-01




So, the critical battlegrounds are the markets for SFH in Vancouver East and 2-bed condo around False Creek which are bumping against the $1.5m to $2m resistance. The momentum in the suburbs will only resume if these key levels in the prime areas are breached.
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tdma800
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Posts: 2977
Joined: Wed Jan 23, 2008 9:12 am

Re: What does affordability mean today?

Sat Apr 22, 2017 7:06 pm

jimtan wrote:
In the long run, supply has to increase. Looks like Vision Vancouver has finally found some backbone. Remains to be seen how effective they will be.

However, BC's foreign buyers tax has been effective in shutting foreign buyers out from metro Vancouver. Steve, our honest realtor, has discovered an interesting kink in the market (see chart below). 

http://vancitycondoguide.com/luxury-hom ... uyers-tax/


steve saretsky is an unlicensed individual with an unlicensed website.  plonk
 
tdma800
Real Estate Talker
Posts: 2977
Joined: Wed Jan 23, 2008 9:12 am

Re: What does affordability mean today?

Sat Apr 22, 2017 7:07 pm

jimtan wrote:
In the past, I have argued that RE prices could keep rising as long as residents could move to cheaper homes out in the suburbs. That the bears were wrong as long as money kept flowing into the prime areas, and supply kept rising in new neighbourhoods.

In other words, affordability was a matter of location. 

Today, the situation has changed. Affordability is now an issue in all suburbs. Right after I sold my apartment in spring 2016, I was told by my realtor that there were no detached homes in Tsawwassen for under a million.

Burnaby, Delta and Surrey have all caught the fever. How many college graduates can afford million dollar crack shacks?

Remember that 50% of residents are still renters and rental vacancy is as low as zero in some areas.

Not surprising that there has been a massive backlash and governments are counter-attaching.

“Real estate speculators driving up prices to be target of reforms, Sousa says”

https://www.thestar.com/news/queenspark ... arket.html



^--- irrelevant drug reference
in the real world, to infinity and beyond
 
tdma800
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Posts: 2977
Joined: Wed Jan 23, 2008 9:12 am

Re: What does affordability mean today?

Sat Apr 22, 2017 7:11 pm

People that actually live in Vancouver would realize that the more homes are empty, that keeps taxes lower for everyone else.  A so called foreigner (OMG! not a canadian! the humanity! ) pays a lot of taxes on an empty home for services not used (schools, water, etc)
 
jimtan
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Joined: Tue Jul 31, 2007 10:59 pm

Re: What does affordability mean today?

Sat Apr 22, 2017 7:37 pm

Yawn
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tdma800
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Re: What does affordability mean today?

Sat Apr 22, 2017 7:38 pm

jimtan wrote:
Yawn

unlicenced linkless picture
 
jimtan
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Posts: 5435
Joined: Tue Jul 31, 2007 10:59 pm

Re: What does affordability mean today?

Sat Apr 22, 2017 7:58 pm

Here's the interesting thing, thanks to Steve. There is a massive amount of supply coming on line. The previous record was 20k apartments in 2008-9.

“Avalanche of New Supply Under Construction”

http://vancitycondoguide.com/avalanche- ... struction/


Then, there is the uncertainty of the election. Anything can happen.
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tdma800
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Re: What does affordability mean today?

Sat Apr 22, 2017 8:01 pm

^-- unlicensed individual and unlicenced website 

Lego has a new disney castle set
 
jimtan
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Re: What does affordability mean today?

Sat Apr 22, 2017 8:24 pm

Yawn Yawn
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tdma800
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Re: What does affordability mean today?

Sat Apr 22, 2017 9:07 pm

jimtan wrote:
Yawn Yawn

linkless toy picture
 
jimtan
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Posts: 5435
Joined: Tue Jul 31, 2007 10:59 pm

Re: What does affordability mean today?

Sat Apr 22, 2017 9:20 pm

Whoopee
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tdma800
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Re: What does affordability mean today?

Sat Apr 22, 2017 9:43 pm

jimtan wrote:
Whoopee

unlicenced linkless picture
 
jimtan
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Re: What does affordability mean today?

Sat Apr 22, 2017 9:51 pm

Like
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tdma800
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Re: What does affordability mean today?

Sat Apr 22, 2017 9:52 pm

jimtan wrote:
Like

unlicenced linkless picture

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