Funny you should bring homelessness up. I disagree that this market is creating it, or that its new. I say that because when I came back from the US in ‘86 one of the things I noticed was that we did not have the numbers of working poor or homeless that the US had, and I was pretty happy about that. Within a few years the problem had occurred here in spades, at elast in terms of homeless people (I still think that the States has us beat in terms of working poor, but that’s another story). The problem predates this market, and occurs in more places than the Lower Mainland.

I remember listening to someone on CKNW talk about what a good leader Jean Chretien was (and this was soon after he became PM), and a squeegee kid came up to do my windshield. The juxtaposition made me wonder: if we’ve got good leaders, why do we have our people sleeping on the street? The latest stat, that $89k per year puts you in the top 5% of tax payers, strikes me the same way. Its a helluva way to run a railroad when, in the midst of huge demand for commodities, lots of Canadians can’t pay rent and only 5% of taxpayers earn in excess of $89,000.

You’re describing a change of tenants. Buy a beater, get rid of the low paying tenant, reno, get a new tenant who pays more. That’s a time honoured approach to building wealth in real estate, and works in all markets…as long as there is housing demand. Ownership demand (which pushes prices up) isn’t required.

If you get rid of the tenants to flip, you still need housing demand. If the buyer isn’t going to live in the place it becomes rental supply. If the buyer is going to live in the place they’ve either a) left another place here, which contributes to rental supply, or b) are coming from outside this system, and are just contributing to housing demand. It boils down to the same thing: there isn’t enough housing supply, so the higher payers get the product.

What’s the solution? Long term you have to make owning rental housing more attractive. The market isn’t doing that without substantial risk (witness the criticisms of investing into the “bubble” vs. stocks, for example). Taxation changes? Perhaps tax deferred exchanges? Preferential treatment of rental income? Who knows. There are lots of dangers of unintended consequences. What is clear is that in a market like this it makes no sense to build or buy rental housing unless you are a) very risk tolerant and banking on continued capital appreciation b) get the units at a great price c) are some sort of long term holder.

I find your posts (or the articles that you post at least) informative, I only used Geezer’s the sky is falling descriptor of your posts to highlight the fact that bulls will take one piece of positive information and spin it in the face of 20 pieces of information that refute their thesis. That is if they even have a thesis. Obviously bears are guilty of this as well.

I wasn’t imputing motive on your part as an honest realtor or on Transglobe who is a good professional property manager. You are in fact right about the numbers as to why Cap did it. But my point is that there is a shortage in rental BECAUSE of the housing “boom.” OK: more people buy houses= higher values & taxes (operating costs) and higher construction (maintenance costs) BUT rents do not go up as quickly. So it’s not profitable to rent so people buy rentals and jack up the rentby evicting longterm tenants to splash some paint on or recarpet (i.e. “renovate”) or demolish and build freehold property to resell or convert. I bet you $ to doughnuts the proportion of immigration for our Mac jobs in this “hot” economy is smaller to what I just postulated which brings us full circle to greed.

I post information that is of interest. I would not consider myself a bull or bear, just financially prudent. Most people on the blog know I’m looking for a property to buy and would not overextend myself in case the market does dip.

I never put all my eggs in one basket, whether stocks or real estate.

Sounds like a plan to me. If your credit card is already tapped out I know a guy called “Big Tony” who can probably arrange some financing for you.

No, but if you read this and other blogs you will see many posters seem to think “the sky is falling” is a permanent condition.

FWIW, lots of folks here seem to subscribe to the seasonal variation idea. Rob often points out that he doesn’t buy it though.