Vancouver homes at rock-bottom prices.

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Imp

Lifer
Feb 8, 2000
18,829
184
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OK, you're the 2nd person to say the bolded in this thread, but I never heard about this in any news. I also checked on internet and there's no mention of this rule, e.g.:
http://www.soldwithscott.com/Ontario-Mortgage-Rules-Changes-July-9th-2012.html

Is it only Vancouver/B.C. specific rule or something? Even then, you shouldn't generalize to the whole Canada.

Woops, nope, you're right.

You can still have 5% down, just not on properties valued at $1 million or more. More accurately, I think CMHC will no longer insure mortgages for properties valued over $1 million. I forgot the second part. To borrow money from a bank and not have the mortgage insured, you usually need 20% down.

However, people were apparently borrowing that 5%. I heard it may be harder to do that now, but may still be going on.

Edit: Wow, this is depressing:

http://www.discountmortgagecanada.com/nomoneydown.asp
 
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tokie

Golden Member
Jun 1, 2006
1,491
0
0
Bad city.

There is no rational reason why prices are so high in Vancouver. People talk about "Asian money" but really prices spiked because of a bubble a long time ago, and people got used to things costing that much.

Now people assume it is normal to spend 50% (or more) of their net income on housing in Vancouver. No wonder there is not much entertainment in that city -- nobody has money to spend on good food / attractions. Though I guess they can use the 'free' mountains.
 

Eug

Lifer
Mar 11, 2000
23,753
1,309
126
Just curious, where do you live? Where have you traveled to in the world for a comparison?
I was born and raised in the Canadian prairies, but have visited all over the US, and some parts of Europe and Asia.

I currently live in Toronto, and have lived in Vancouver in the past. And yeah, Vancouver is absolutely gorgeous. I just think it feels a bit small and overly insular, and I do agree the pricing went too high there. I've also lived in Montreal before. Awesome city, but I didn't like the French-English politics there.

But yeah, depending upon my pay scale, I might rather rent in Vancouver than move to the midwest (or move back to the prairies) to live in a big home. However, if I was in an entry level job I might prefer going to a cheaper place than going to Vancouver, for financial reasons.


I understand the economics of house pricing. That still doesn't make a dumpy bungalow that is falling apart a good or wise purchase at $700K.
I'm not sure why I have to keep repeating this. The $700K is land value. The vast majority of those homes are demolished immediately upon purchase.

That $700000 purchase generally means a $1 million+ property, after the new house is built. In fact, the build cost for the new home might be another $700000, meaning it's a $1.4+ million property. Depends on the neighbourhood though.

(For an upscale home in Canada, the build cost may be in the ballpark of about $200 per square foot or more, so it'd cost about $700000 for a 3500 sq. ft. home, including builder's profit.)

The ones that aren't torn down are gutted and heavily renovated.

Too bad there is a concrete monstrosity under construction on the adjacent lot.

You don't like rich neighbours? Some concrete monstrosities are fugly, but others are friggin' beautiful. Either way though, it's pretty much indicative of what I said before. If the existing property has a dumpy home on it, and it's in an decent enough neighbourhood, the dumpy home will be immediately demolished.

BTW, AFAIK, most of those concrete homes go for more than $200 per square foot. It's likely to be a very high end home.
 
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IndyColtsFan

Lifer
Sep 22, 2007
33,656
687
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I'm not sure why I have to keep repeating this. The $700K is land value. The vast majority of those homes are demolished immediately upon purchase.

I know WHY it is that expensive (the land), but that really is irrelevant. Paying $700K for a small lot of land and then having to pay to have the house bulldozed and then to pay for another house to be built is even worse.
 

IronWing

No Lifer
Jul 20, 2001
69,543
27,849
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You don't like rich neighbours? Some concrete monstrosities are fugly, but others are friggin' beautiful. Either way though, it's pretty much indicative of what I said before. If the existing property has a dumpy home on it, and it's in an decent enough neighbourhood, the dumpy home will be immediately demolished.
The net worth of my neighbors don't much interest me. The monstrosity is pretty much filling the lot and is tall, therefore blocking the view, hence ugly. The two houses that were torn down, puny as they were at 2500-3000 sq ft each, at least didn't look like bunkers and didn't pollute the view. Also, the behemoth has been under construction for four years and counting (Google Earth is great), four years living next to a construction zone, no wonder the neighboring house is for sale.

Edit: Realtor who posted the pic estimates the value at $70,000,000. That's a whole heap o' concrete, that is.
 
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Eug

Lifer
Mar 11, 2000
23,753
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I know WHY it is that expensive (the land), but that really is irrelevant. Paying $700K for a small lot of land and then having to pay to have the house bulldozed and then to pay for another house to be built is even worse.
Well, as you said, a dumpy crap home is nothing anyone wants to live in. That's why there is preference to get these types of properties.

ie. If land value is $700000, and you want a huge modern home, then you want to get a property that costs close to $700000 - where the house is near worthless.

What you don't want is to get a similar property with a 1980s 2-story house for $900000, because the house won't be up to your specifications, but the land value is only $700000. You're basically paying $200000 too much for a $700000 property, since you're going to demolish the home anyway.

To put it another way, if you want to buy a house in these areas, your true price range isn't $700000. It's $1+ million. If you can't afford that, maybe you should be moving to a different area, or else renting.

---

I was once speaking to an Asian friend in Vancouver who was telling me exactly this. He and a lot of his friends had moved from Asia to Vancouver, but were finding it hard to find such properties in the neighbourhoods they were looking in. The properties were too built up already. They wanted to build say a modern 4500 square foot house, but didn't want to pay for a property AND a 20 year-old 3000 square foot house. What they wanted was a property and a dumpy old house on it that was worthless, but that kind of property was exceptionally hard to find, because they had all been bought up in previous years.

BTW, this is sort of what is happening in my neighbourhood in Toronto. I live in upper-mid range neighbourhood in Toronto. Very nice neighbourhood, but a less nice toward the edges, and definitely not super high end. However, in the prime area of the neighbourhood, there are a lot of old homes on big lots, a lot of which are inhabited by very elderly people. There is kind of morbid old people death watch by the builders. When they die, the builders swoop in and buy the property, demolish the old war time bungalow, and build a modern 2-storey home on the property.

Note that this is in the city. These neighbourhoods are very well established, since the World War II era. It's just that these neighbourhoods are changing dramatically.

The difference in places like the midwest is that there are vast new suburbs that are built on farmland. There was nobody living there in the first place, except some cows and a farmer or two. It's a very different type of real estate.
 

Eug

Lifer
Mar 11, 2000
23,753
1,309
126
Hah. I just looked at that listing with the "cottage" on the lot. That's Point Grey. That's actually my #1 favourite neighbourhood in all of Vancouver. It's right in the city, but it's oceanfront property, and it's very close to University of British Columbia. And it's a completely mature neighbourhood. It's also very close to Vancouver's very popular in-the-city beaches. It's not one of these brand new waterfront neighbourhoods out in the boonies somewhere.

http://en.wikipedia.org/wiki/West_Point_Grey

It's also one of the most expensive neighbourhoods in all of Canada.

So yeah, of course it's bloody expensive.
 
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rh71

No Lifer
Aug 28, 2001
52,856
1,048
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my cousin has been making bank working as a mortgage broker for TD in Calgary. She is 100% commission and buyers frequently borrow over $300k. Seriously sick numbers even I can't believe - I thought NY was bad with overinflation. Seems most of the big cities in Canada are worse.
 
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Eug

Lifer
Mar 11, 2000
23,753
1,309
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$300000 per se isn't necessarily a huge amount, esp. in Calgary, the centre of the Canadian oil boom. Calgary is one of the richest cities in Canada, if not the richest.

Plus, it's all context. If a home is worth $650000 (which is very common in Calgary), then a $300000 loan is not really a big deal. OTOH, if the home is only worth $375000, then $300000 is a reasonably big amount.
 

Imp

Lifer
Feb 8, 2000
18,829
184
106
my cousin has been making bank working as a mortgage broker for TD in Calgary. She is 100% commission and buyers frequently borrow over $300k. Seriously sick numbers even I can't believe - I thought NY was bad with overinflation. Seems most of the big cities in Canada are worse.

Dude, $300k is nothing in places like Toronto, Vancouver, or many other larger towns, even in less inflated markets, which is sad.

The $700k for land thing can't lead to any good. I worked on a job in the past year where a couple bought a $1.2 million-ish property (guess from similar listings in area at time), then gutted it with a $1.5 million reno/rebuild. This is in a nicer, but still semi-butt end of down nowhere near downtown or in a rich part of town. So, the property is now supposedly worth $2.7 million in an area surrounded by $1.25 milllion houses, not close to downtown or an extremely desireable location.
 

Rudee

Lifer
Apr 23, 2000
11,218
2
76
Vancouver is a nice place to visit for the few months out of the year when it's not pouring rain. Otherwise, it's a pass.
 

iGas

Diamond Member
Feb 7, 2009
6,240
1
0
roofus100 found the house pictured. It is on the ocean.
I saw the pics after the previous post, thanks. However, I'm not in the same class as the people that own that property, because to me the view does not worth $16 million.
 
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iGas

Diamond Member
Feb 7, 2009
6,240
1
0
I wouldn't pay $30k for that shit hole. I could see $689k if it was right on the strand in Redondo Beach but Vancouver? Fuck, I live in San Diego, CA and you could buy my house for half that.
I have to agree. $16,000,000 would buy a hell more in La Jolla than one in Vancouver.
 

IronWing

No Lifer
Jul 20, 2001
69,543
27,849
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I saw the pics after the previous post, thanks. However, I'm not in the same class as the people that own that property, because to me the view does not work $16 million.
True. I've concluded that ocean front property falls in the same category as feeds, floats, f%$#s, or flies.
 

Eug

Lifer
Mar 11, 2000
23,753
1,309
126
where i live, 700$k could buy about 150-200 acres

someday i hope to have that many
If you drive a couple hours outside of Toronto, you can also buy a couple hundred acres for that much. However, you'd be in the middle of nowhere.

BTW, in London, Ontario, you can buy a house + 50 acres of land on the outskirts of the city (but still within the city limits) for around $2 million. But it's London, Ontario. Nice city, but kinda small, and not very interesting. Great place to raise a family though, and the commute to downtown (if you can call it that) is only about 20 mins.
 

Imp

Lifer
Feb 8, 2000
18,829
184
106
Related story. Wonder how many condo buyers are or will be going through the same thing?

Not feeling an ounce of sympathy seeing as how these speculators gambled (helping to push up prices to stupid levels) and lost, plus they gambled on the "Trump" name. Really? The guy who's gone bankrupt a bunch of times, is a full-time attention whore, and a dick?

“Everybody on their own or through advisors — financial advisors, real estate brokers or pension administrators — heard about this opportunity and was attracted because of the name Trump,” says Heydary.

http://www.thestar.com/business/art...tled-investors-to-close-deals-they-now-regret
 
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