will this wretched Olympic village cost us?
Now there is this http://vancouvercondo.info/2009/06/mould-risk-at-olympic-village.html which means at the least buyers will want a lock solid guarantee on future leakage problems, pushing the city's liability well into the future.
The numbers I heard on News 1130 were from $400 to $1000 Million cost to the city. I assume some of that will be recovered form sales, however either way you slice it, this seems like a bigger mess every day.
Government and Private ventures DO NOT MIX WELL. Why? Because the Private takes most of the profits, while the Government takes most of the losses.
Who advised the city on this deal..does anyone know? Which law firm, which financial advisers? We should hear from them, or at least we should know who they are. Any readers know or can find out?
.....................................................
Mortgage rates between a rock and a bigger rock
Latest ING rates:
5 Year Variable 2.85%
1 Year Fixed 3.39%
2 Year Fixed 3.59%
3 Year Fixed 3.65%
4 Year Fixed 4.09%
5 Year Fixed 4.49%
7 Year Fixed 5.50%
10 Year Fixed 5.50%
We are about 1% higher than a month ago.
The five year is most important number and we are near pricing people out again and losing the huge push we got from the spring drop in mortgage rates.
They are going up, because the bond market is pricing in a recover and rising inflation. If they are right, then rates could rise pretty fast.
If they are wrong then rates could go back down once it becomes apparent that the recovery and inflation were just an illusion.
So if things get better, mortgage rates could shoot back up to the more normal 5-6%.
For mortgage rates to go down, we would have to see evidence of more weakness, job losses, deflation and a severe recession.
Pick your rock.
Deciphering Trumponomics 2.0
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The year is nearly over and the U.S. will see Donald Trump in the White
House in 2025. Ryan Detrick’s analysis of historical equity returns found
that st...
3 hours ago
I have no idea how this is costing so much.
ReplyDeleteThe "affordable" housing units are now going to cost $110 million for 250 units. Thats $440K per unit!!! How on earth that happened i will never understand because the land was FREE (they already owned it). How the hell does it cost $440K for units that probably average 1000sf. You can get full 3000sf homes built for far less than $440K. It sounds like these to break even they will have to sell the places for $500K+ and they would basically be giving away the land at that price.
I would really like to know how developers can sell places in yaletown for 400K with paying for the land and still make a nice profit, and these fools cant even do that with free land.
The city should audit the numbers for management fees and other unusual stuff, but I doubt they will.
ReplyDeleteThis whole thing smells of financial wolves taking advantage of sheep.
Fish,
ReplyDeletePlease come over to Rob Chimpan's blog and help me out with Dave. The guy thinks there's only sunshine and fresh air coming out of CMHC data. I haven't the understanding of the data like you do. Come on over...
vomitingdog
Thanks for the invite VMD- but I better stick to one blog at a time.
ReplyDeleteI'm so frustrated with these data-picking bulls, Fish. Inventory is going down, interest rates will stay low, BOC will print lots of dosh, rental rates only go up and chickens will never come home to roost because our banks haven't been as irresponsible as the US!! Our house prices are now higher than London but that's OK because everyone wants to move here.
ReplyDeleteV-Dog
V-Dog, I am sorry if I touched a nerve. I understand your frustration but I think it is misplaced. Some of the points you raise above are simply the facts (e.g. sales, inventory, interest rates, BOC policy, better banks). Raising said points does not make one a data picking bull.
ReplyDeleteIt seems to me that most bearish arguments have little data to back up such expectations.
Let's revisit my history. The first day I started posting on these blogs (over a year ago) I said that my expectations were a minor price correction. Would I have said such a thing at that time if I was really a 'data-picking bull'?
Dave - you are right, the current data supports a stable market with possibly even some upside, as anxious buyers worrying that they missed the bottom, throw a few bids at or above listing prices.
ReplyDeleteHowever data can change quickly in overbought markets. We went from a MOI of about 6 to 20 in the space of several months last year.
I wouldn't do a victory dance too soon. Wait until we are well and truly out of this recession, the City and Province are still solvent post Olympics and THEN if housing has not suffered a more serious correction, we will hand you the laurels of the prophet.
My friend just bought a 300k condo and is looking to buy a mid-tier Vancouver presale condo for 2012. She is single, with a modest means and keeps changing jobs. If prices stay flat and interest rates go up I would think she will end up bankrupt. She insists she is taking on no risk.
ReplyDeleteA year ago she predicted the price drop last fall and that the spring would bring the return of a new hot market. Being right on those points seems to have convinced her of a powerful, sustained upward trend in the market.
I simply am amazed that normally smart people are convinced that prices will experience large single digit increases year after year after year. And that they base their financial decisions on this assumption.
Fish, I am not doing a victory dance. I don't think we yet know where this market is going to go.
ReplyDeleteIf, prices in December 09 are similar to December 08, then I think that will be a bell-weather of a stable market going forward. If prices in December 09 are moderately lower than December 08, then I think the market will continue down in 2010.
The guy follows me here. Sheesh! Is there no bear cave when one can hibernate?
ReplyDeleteV-Dog
Panda,
ReplyDeleteYour story points out how people in Vancouver take on a condo mortgage in place of a child or two. The difference is that in about 20 years, you will hopefully see your child go to university, find an occupation and maybe even enjoy grandchildren someday. What will a Vancouver condo give you other than a big, fat assessment to make you bankrupt in your old age?
You gotta love this city :P
Panda:
ReplyDeleteWhat risk is your friend really taking on? Assuming she has few assets at risk,and minimal DP, the worst that happens is she walks away, no point hounding her into bankruptcy if she can't pay, (blood from a stone...), a few years of bad credit, parents lose the DP they gave her (guessing), so where is the risk?
Answer: With you and I as taxpayers via CMHC, and with you and I as bank shareholders via CPP, private PP's and RRSP's for the portion CMHC doesn't cover.
Hey Alex, good point. I talked with her some more, and now I also agree bankruptcy is not in the cards.
ReplyDeleteI asked her about what she would do if interest rates go up and prices stay flat or decline. She denied the possibility of price declines. But she also explained that she could always scrimp and save and take on some room-mates.
So I think her solution to a bear market is to wait it out and take on room-mates and cut her expenses right back for as long as it takes.
See what the economist Nouriel Roubini said about the current and future state of our global economy
ReplyDeletehttp://www.rgemonitor.com/roubini-monitor/257210/us_job_report_suggests_that_green_shoots_are_mostly_yellow_weeds
This is not going to end well...
I hope he loses his tenure for that one. ;)
ReplyDeleteHuh? You hope Roubini loses his tenure at Stern for saying he sees more downside?
ReplyDeleteV-Dog
I don't know if I'm puzzled or more gob-smacked. Explain?
Oh well, this blog now has its resident realwhore scumbag. :P
ReplyDeleteV-Dog, see the winking face? It's called sarcasm.
ReplyDeleteIs it? I thought it was just another day in the life of Dave.
ReplyDeleteVD
Hey there great blog! Does running a blog similar to this take a massive amount work?
ReplyDeleteI've absolutely no knowledge of programming however I was hoping to start my own blog in the near future. Anyways, if you have any recommendations or tips for new blog owners please share. I know this is off topic nevertheless I simply wanted to ask. Cheers!
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