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Vancouver real estate, buying into the million dollar hype.

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Buying into the Real Estate Hype could put you down and out.
Vancouver, is touted as one of the best cities to live in the world.

Many in society are wondering, is it?

One mantra that has inflamed many is; “British Columbia, the best place on earth”.

Who spreads these mantras?

The politician no doubt, looking to either spread their mantra to the world as a source of pride or perhaps to get British Columbian’s to buy into it?

The federal government of Canada’s Finance Minister Jim Flaherty is looking to clamp down on home mortgage regulations, what many think as a safeguard for Canadians in debt.

Perhaps this mortgage regulation is geared to prevent a possible mirroring of a U.S. housing meltdown, Canadian style. The Bank of Canada have stated many Canadians are stretched to the limit financially.

The real estate industry, particularily British Columbia, counter that these regulations will be a detriment to Canadians. Of course, some see this as those in the Realty industry once again spreading fear and hype, as certainly this may be seen as a slight against potential commissions on their part.

One wonders how this could be a detriment to Canadians? Perhaps an answer can be found if one looks further into the British Columbia Realty industry hype we have all read in the media.

Perhaps a political move is underfoot against this federal ruling? Who is to say? Perhaps a musing by some looking for answers why this ruling is good or bad. This question is for whom?

Could real estate hype begininning with the “Best place to Live in the world” or “Vancouver, one of the best cities in the world to live” fuel real estate speculation?

Many wonder if a reality check is in order as to why house prices have skyrocketed in the last decade? One example of many, is a 1,000 square foot single family home in downtown Vancouver, off Manitoba Street and 14th Avenue went for $300,000.00 in 1999. Granted, it was a 40 year old fixer upper, but certainly not out of reach for a handyman with basic tools.

Not to spread rumour and innuendo, but it is said in the summer of 2009, that same house which has changed little, located on Manitoba and 14th Street was to be sold in the spring of 2010 and expected to reach between $1,500,000.00 to $2,000,000. Hmmm, certainly a handsome profit for the homeowner, especially if a bidding war amongst purchasers ensues.

Median salaries have not gone up accordingly, real estate and property taxes have gone up exponentially, so what is the mystery? Supply and demand? Hype? Perhaps a bit of both.

Real estate in British Columbia, particularly Vancouver and surrounding regions as far as Hope, BC have many wondering, if British Columbia is the best place in the world, it seems, anyone who can truly afford a single family home within the Greater Vancouver Regional District (GVRD), especially Vancouver and nearby burgs better have a million dollars on hand.

Condos costing up wards of a half million dollars for 400 square feet of living space, if you can call it living, could buy a mansion in many parts of Canada. Point Roberts, Washington. U.S.A., close to the ocean, sharing a border with British Columbia have 1,200 square foot homes at half the cost of around $200,000. Funny, when you think of it, if not being a U.S. city, but being part of British Columbia and a 20 minute to Richmond, BC, these same water view properties would be in the two million dollar range. Can you see the hype?

Outside the GVRD a nearly new 1,200 square foot modest home can be had for around $200,000 in Hope, British Columbia. If you work in the GVRD and live in Hope, BC, the monthly travel expenses will equal or surpass your monthly mortgage payment. Certainly not a feasible way to get into the housing market.

Most British Columbian’s with a modest dual income can enter the realm of the millionaire, but are forced to live far beyond their means, resulting in a cash poor-house rich lifestyle.

It’s been said some homeowners sometimes have to make a choice of food and clothing over housing payments, some choose housing. People buy into the hype Realtors (“Fear Mongering”) love to spread “Buy now, cause they are not making any more land!”

Setbacks, such as job loss, divorce, sickness, car or home repair, a rise in interest rates, will put many in dire financial straits. Certainly, homes built with in law suites can be a warning sign for many, as Realtors gleefully chime as a way for the homeowner to get into the real estate game. The problems with this are self explanatory. Your tenant loses their job, good luck trying to evict them, there are laws in British Columbia to prevent this.

A rise in property value can mean an increase in monthly payments, world events in economy as we have witnessed cause changes in financial fortunes for everyone. Prime Minister Harper once stated, all is getting better now, but Canadians should not be too smug. No truer words spoken.

Financial advisers warn of economic shifts which could happen if mortgage rates climb a percent or so. A rise of a percentage point could bankrupt many cash poor, house rich homeowners. The question then would be, how would this affect friendly Realtor? Most likely counting their commission on your home, winners regardless if you lose your home.

Beautiful British Columbia may still be the best place in the world, but for some, British Columbia maybe wearing too much rouge, applied by a political makeup artist looking to protect their own kind and maintaining the hype all too clear for the many, but lost in translation when it comes to affordable housing.

http://english.cctv.com/20091228/103435.shtml

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Land registry changes fall short, natives say

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While new legislation makes it easier to start development, band also wants right to collect property transfer tax

The federal government moved yesterday to make it easier for native bands to undertake large-scale commercial development on reserves by permitting the establishment of land registry systems that give comfort to investors.

But the Squamish Nation in British Columbia, which wants to develop prime real estate at the foot of Vancouver’s Lion’s Gate Bridge, says the changes do not go far enough. The band also wants the right to collect a property transfer tax, a levy that would be harmonized with the tax currently imposed by the province on the sale of lands that are not part of an aboriginal reserve.

“If we are to be truly self-sufficient, we will need all the modern tools of governance and public finance to ensure fair value for our lands,” Squamish Chief Gibby Jacob told a news conference in Ottawa.

“As a people struggling to survive in a competitive and value-driven society, it is becoming increasingly important for us to weigh the costs of using a scarce resource – land – with the benefits we would get from development.”

The federal government said late yesterday that it will talk further with native bands about potentially allowing them to levy the property transfer tax.

Meanwhile, Squamish officials said they are pleased with the new legislation. The changes, which would be instated only at the request of individual bands, amend the First Nations Commercial and Industrial Development Act to permit a land title and registry system to operate on reserve lands, essentially letting the bands transfer property rights to non-aboriginals.

Without that ability, the value of reserve lands has remained low.

The Squamish have several large developments planned for their reserves on the Burrard Inlet directly across from downtown Vancouver, a city which has arguably the hottest real estate market in Canada.

The first project will be condominium towers in Capilano. Developers will be given a 99-year lease to build on reserve land and, with the new law, they would be able to sell the condos along with the normal deeds and titles that apply to off-reserve properties.

But the Squamish also want to be able to collect a property transfer tax on the sale of those units at the current British Columbia rate, which is 1 per cent on the first $100,000 and 2 per cent on everything above that amount.

“The amendments introduced today take us only halfway to realizing our vision,” Chief Gibby said. “It still denies us a revenue stream to support this regulatory regime.”

The chief said the Burrard Inlet development will be “one of the most significant urban renewal projects in the world, providing oceanfront land for housing in a highly desirable neighbourhood.” Most important, he said, the money from the project will be used to provide housing and services for the Squamish people.

Tom Flanagan, a political science professor and expert in aboriginal affairs with close ties to the federal Conservative government, accompanied Chief Gibby at the news conference.

Allowing native communities to collect property transfer taxes, he said, “is “a logical step in [the] progression towards giving first nations the ability to raise governmental revenues for themselves, thereby becoming less dependent on transfers from the federal government.”

http://www.theglobeandmail.com/news/politics/land-registry-changes-fall-short-natives-say/article1396607/

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Reflections on the 2008 Canadian Tax Year

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Whether it is considered a welcome break or a hollow gesture, the federal government’s GST cut to five per cent took effect Tuesday with little fanfare and few complaints from retailers who collect the tax.

The government estimates that cutting the tax one percentage point will save Canadians $6 billion, which will flow back to them a few cents at a time, depending on the size of their purchases, adding up to about $150 to $200 per household each year, according to the Canadian Taxpayers Federation.

For big retailers like Future Shop, the change was a simple computer-system change, which gives their customers a break on the prices they’re paying.
Prime Minster Stephen Harper promoted the five-per-cent GST as part of his last election campaign.
Prime Minster Stephen Harper promoted the five-per-cent GST as part of his last election campaign.
J. P. Moczulski, Reuters
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“I would say consumers will be happy [about the cut],” Ram Manaktahla, general manager of the Future Shop outlet at Robson and Granville streets in downtown Vancouver said.

“Think of all the products customers [are buying]. From iPods to digital cameras, flat-screen televisions, laptops, notebooks — they’re saving one [percentage point] on all of them.”

Vancouver-based retail consultant David Gray added that the first stage of the Conservative government’s GST cut, from seven per cent to six per cent which took place July 1, 2006, went relatively smoothly for retailers, “so I think they know the drill.”

“The complaint of retailers is they’re essentially taking on the job of tax collector without a lot of support and basically no thanks,” Gray said. Whether the tax fluctuates, he added, is less of an issue.

However, government critics counter that cutting the consumption-based GST may mean little for average Canadians.

“Those with the highest salaries — the millionaires, the big banks, the [profitable] corporations … The ones that don’t need the help are going to get the most help,” from the GST cut, said federal NDP leader Jack Layton.

He added that average families may also see higher property taxes, post-secondary education fees and other bills.

Patricia Croft, chief economist with the investment firm Phillips, Hager & North, said anyone making big-ticket purchases will benefit from the consumption tax reduction.

However, she added that “in general, most economists would prefer a cut in income taxes. It’s a more efficient way to reduce the tax burden.

“By cutting the GST, hopefully it causes Canadians to spend more.”

The GST savings amounts to about $2 on the purchase of a $199.99 iPod MP3 player, $100 on a $10,000 home-theatre system or $300 on a $30,000 automobile.

Manaktahla said Future Shop gave its Christmas-season customers a jump on the GST break by knocking the percentage point off its prices starting Dec. 28. Customers who made purchases up to 30 days before that date could claim the reduction under the store’s “price-protection” guarantee.

Consumers need to be wary, however, to make sure they are getting full benefit of the cut, especially since the transition is occurring over the Christmas shopping period, according to tax expert Beverley Gilbert.

Gilbert, a chartered accountant and national tax-practice leader for the law firm Borden Ladner and Gervais, said people going to stores in January to return gifts purchased in December need to keep a close eye on their receipts to make sure they are credited for the full amount of GST that was paid on the gift in the first place.

Gilbert added that homeowners who take possession of new houses after Jan. 1 will get a GST break, too, but they will have to apply to the federal government for a rebate instead of seeing it knocked off the purchase price in their builder’s contract.

Consumers who have leased cars or other property should also see the GST cut in their payments, Gilbert added, even if they signed leases prior to Jan. 1.

John Williamson, national director of the Canadian Taxpayers Federation, however, defended this second trim in the GST.

Despite the criticisms, Williamson said the GST reductions from seven per cent to five per cent are broad-based measures that put, by his estimate, $10 billion a year back into people’s pockets.

“This is good news, particularly since $10 billion in the pockets of Canadian consumers is preferable to Ottawa hoarding the cash,” Williamson said.
Despite the criticisms, Williamson said the GST reductions from seven per cent to five per cent are broad-based measures that put, by his estimate, $10 billion a year back into people’s pockets.

“This is good news, particularly since $10 billion in the pockets of Canadian consumers is preferable to Ottawa hoarding the cash,” Williamson said.

http://www2.canada.com/vancouversun/news/business/story.html?id=34b943f3-2a71-422f-b676-10f1b85b4c7a&k=87417

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