Vancouver Homes – Guest at Beggars Banquet

POP!

There is no real estate bubble in Vancouver but, according to a panel of speakers at a recent Board of Trade event, a lack of clear transitional rules leading up to the return of the provincial sales tax is having a negative effect on the real estate industry.

Who Said That?

That was the message delivered by the panel of three real estate industry experts, including the Board’ President-Elect Eugen Klein, to a packed house at the Board of Trade’s Bubble Trouble event on October 21 at the Fairmont Hotel in Vancouver.

Other panelists included Ward McAllister, president of Ledingham McAllister Properties, and Richard Wozny, of Site Economics Ltd. The panel was moderated by David Podmore, CEO of Concert Properties Ltd.

According to Klein

Each of the speakers presented information that helped to set the overall picture of what they consider to be a solid overall market that is not in the midst of a bubble. But they directed their strongest comments towards the impact that the lack of transitional rules is having on the market right now.

  • “Potential buyers, especially the under-25 group, are sitting on the sidelines,” said Klein. “It’s also affecting home renovation projects with HST on them because consumers don’t know what to do.”

Beggers Banquet

McAllister was the most vocal in his criticisms, noting that he and his company have been “literally begging” the provincial government for transitional rules since the results of the referendum to repeal the HST were announced.
  • “What is amazing to me is that it took the government three days to bring this new tax in and now they are telling us it is going to take up to 18 months to unravel,” said McAllister. “This is really hurting us in the new home business just because of the uncertainty.”

Helping Hands

Both Klein and McAllister noted that they are seeing developers taking on a portion, or even all, of the HST on their product to try and remove that uncertainty for potential buyers.

Vancouver Real Estate Perspective

Other information provided by the speakers suggested that the Metro Vancouver real estate market is healthy and stable.

  • Wozny forecasted that low interest rates will hold steady into the foreseeable future, which will translate into continuing sales, and McAllister highlighted immigration data that shows that approximately 52,700 immigrants will move to British Columbia in 2011. Of that total, some 42,000 will move into the Metro Vancouver area, meaning that the need for new housing will remain strong.
  • Klein pointed to steady residential sales driven by high-end property demand in Richmond, West Vancouver and the Westside of Vancouver. He also updated major commercial projects that will add approximately five million square feet of retail space and 1.5 million square feet of office space to Metro Vancouver by 2015.
  • “Putting the residential and commercial real estate sectors in perspective, the Lower Mainland remains a very desirable place to live and work,” said Klein.

Sympathy for the Devil

The buy-in to all this is whether you believe the words. Presumptive, is that the under-25 group might proffer an alternate view suggesting that even without the HST, they ‘do’ know what to do. Disenfranchised with the rhetoric they have little sympathy for these words for they have lost their dream bubble. Instead their dream is a place in which low income is the reality. A reality that precludes the idea of owning a Vancouver home of their dreams.

Easily forgotten is that the under-25’s are more aware of their plight than ever before. A look at the Rolling Stones’ lyrics from 1968’s Beggars Banquet, might explain just how much they really do know about the people who ask them to believe.

“What’s confusing you – It’s just the nature of my game – Just as every cop is a criminal – And all the sinners saints – As heads is tails – Just call me lucifer – I’m in need of some restraint

So if you meet me – Have some courtesy – Have some sympathy, and some taste – Use all your well-learned politesse – Or I’ll lay your soul to waste”

Text and Image Copyright Real Estate Board of Greater Vancouver. Reprinted with permission.

Images and Lyrics Courtesy Rolling Stones

About Larry Yatkowsky

Larry is a recognized real estate expert. A veteran professional, his experienced counsel leads Vancouverites in his west side community to place their trust in a man passionate about his work. Uncompromising ethics bring a balanced approach to realizing your real estate dreams.

When Life Moves You - contact Larry:

*Disclaimer: Statistics Courtesy REBGV. While believed to be accurate they are not guaranteed.
**Numbers provided may vary as they are dynamically posted by the REBGV.

Reader Comments:

stats don't lie Says:
November 4th, 2011 at 6:19 am

“the Lower Mainland remains a very desirable place to live and work…”

… if you don’t need to earn a salary that can pay for a house there.

vanpro Says:
November 4th, 2011 at 8:06 am

Ward McAllister’s immigration numbers are a work of fiction. See latest plunging immigration stats for BC and Vancouver from Stats Can as detailed by Central 1 Economics and RBC Economics. Vancouver’s pop. growth is down to just 1.7% per annum (a lowly 6th out of all CDN cities behind Toronto, Calgary and others) due to: (1) international immigration is plunging to 10 yr. lows and (2) net out-migration to other provinces in search of better jobs, economic opportunities and lower housing costs:

http://www.central1.com/publications/economics/pdf/briefing/1739%20BC.pdf

http://www.rbc.com/economics/market/pdf/citytrend.pdf

Boombust Says:
November 6th, 2011 at 8:09 am

What a bunch of lying, shameless shysters.

L8erDude Says:
November 6th, 2011 at 9:47 am

vanpro,
Most Chinese immigration to Vancouver is vastly under-reported. The young Chinese family you see buying that west side home is already a Canadian citizen, thanks to their parents securing them a passport in the early 1990s before the Chinese takeover of Hong Kong.
These “immigrants” never show up in the immigration stats, yet the fact is, most new arrivals from out of country are already Canadian!

vanpro Says:
November 6th, 2011 at 5:52 pm

L8erdude: but they would show up in population stats (once they buy that house and reside here) which shows near 10 yr. low population growth for Vancouver (at 1.7% per annum) and we are a lowly 6th out of all CDN cities behind Toronto, Calgary etc…When the Hong Kong Chinese were immigrating here in the early 1990’s we were at way higher pop growth and way higher immigration – and those were the really rich Chinese….didn’t stop the Vancouver real estate bust, downturn that started in 1994/95 (when unaffordability hit last record high before current record high) and then prices stayed down, depressed until 2002.

Bubbleboy Says:
November 6th, 2011 at 9:49 pm

Condos are toast. Watch or developers giving discounts or packaging up free cars,gift cards, etc…….

There have been tons of assignments listed on Craigslist and Rennie Marketing. There are still many speckers and flippers out here trying to make a quick buck that will get burned and become landlords to empty suites. Very much deserved if that happens to you. It’s not fair to hard working families that cannot afford these homes. It’s payback time…….

Saea Says:
November 9th, 2011 at 9:36 pm

I am over 25 with a masters degree in engineering with a stable job and i am not buying in this over-inflated market. The laws of physics say what goes up, must come down!

November 9th, 2011 at 11:03 pm

Saea
“laws of physics say what goes up, must come down”

That same law applies the other way as well. Nobody knows if this is the top. It may just be an adjustment to the current cycle. A few years from now these prices may seem a bargain – what of the law then?

L8erdude Says:
November 10th, 2011 at 8:19 am

“The laws of physics say what goes up, must come down”!

one of the most asinine statements I’ve read online.
what goes up must come down is the law of gravity, not physics (or real estate). Did you say you had an engineering degree? LOL

Grammar Nazi Says:
November 11th, 2011 at 3:15 pm

“Instead there dream” should be “Instead their dream”

Normal Joe Says:
November 11th, 2011 at 3:30 pm

“A few years from now these prices may seem a bargain – what of the law then?”

The law will be that you need to be a gangster, trust fund baby, trophy wife, grow op or foreign prince to buy a home in Vancouver. What normal working joe or joeanne can afford to buy in Vancouver? The tinker? the tailor? the soldier? the sailor? the butcher? the baker? the teacher? the gardener? the bus driver? the chef? the shop owner? the hotel employee? All no….

When you compare the prices here to wages and other places you realize Vancouver has become Canada’s geriatric Monaco, and that only the rich are welcome here. I would encourage everyone without rich parents who is under 40 to look for a better place to live. There is no opportunity for you here.

November 11th, 2011 at 5:29 pm

@grammar
Corrected – thanks for the help.

November 11th, 2011 at 5:33 pm

@Normal
Nice rant! Are the readers here to assume that you have a solution?

L8erDude Says:
November 11th, 2011 at 6:59 pm

@ Normal Joe,
You need to be all these things to buy a detached house. Other property class are still quite affordable at most income levels.
I think we ought to give up believing everyone should own a house with yard, etc. Vancouver is quickly transitioning to density and eliminating the single family home to make room for the swells of people who need housing.
Personally, if detached housing gets any more expensive I’ll be selling mine and buying a 1/2 duplex. The future is upon us.

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