From thesaurus.com:
Main Entry: fool
Part of Speech: noun
Definition: stupid or ridiculous person
Synonyms: ass, birdbrain, blockhead*, bonehead*, boob*, bore, buffoon, clod*, clown, cretin*, dimwit*, dolt*, dope*, dumb ox, dunce, dunderhead, easy mark*, fair game, fathead, goose*, halfwit, idiot, ignoramus, illiterate, imbecile, innocent, jerk*, lamebrain*, lightweight*, loon, moron, nerd*, nincompoop*, ninny, nitwit, numskull*, oaf, sap*, schlemiel*, silly, simpleton, stooge*, sucker, turkey, twerp, twit, victim
Antonyms: brain
In the vein of thinking about people for who may be the greater of the above synonyms (greater fool), let's discuss this article from the Globe and Mail which highlights a reputable survey from Bing Thom Architects (press release) that has been done regarding the Vancouver housing market. This survey dispels some of the myths surrounding the Vancouver condo market.
Foreign Owners - nope
Vacant condos - no, not really
Investors - yup, yup, yup - 50 to 60%+ of condos are owned by investors
The question is, why do these investors continue to hold onto a low yielding investment like a downtown condo?
The answer is that they believe that the price will rise in the future. In other words, they hope to find a greater fool in the future whom they are able to sell to.
No, there isn't anyone else to blame except local speculators, ahem, investors, who have bid up prices and snapped up developer units at an unprecedented pace over the past few years.
Here is a snippet from the press release:
In addition to an estimate on empty condos, the study found that:
• Condo ownership is a relatively new form of housing for Vancouver. Over 88 percent of condo units in Downtown Vancouver have been built since 1990.
• Less than 40 percent of downtown condos have more than one bedroom.
• The majority of condos are not occupied by the property owner.
• The majority of non-owner occupied condos are owned by BC residents, with a scattering of foreign owners, predominately from the western US states such as California, Washington, and Arizona.
• Owner-occupied units are typically worth $30,000 to $40,000 more than nonowner occupied units, and the more bedrooms the unit has, the more likely it is to be owner occupied.
• A family with one child in the City of Vancouver earning the median income of $75,000 a year would have great difficulty in finding and paying for a condo bigger than one bedroom, even if condo prices were to fall 25 percent below 2008 assessment levels.
That last one is a doozy and despite better career prospects that is why I don't live in Vancouver with my wife and two children.
I know that the study cites that 5-8% of condo units are vacant but I'd really like to see how that compares to other cities to see if it is a factor in our housing market at the margins.
ReplyDeleteThat press release suggests that that their sample of 2400 is just under 10% of the possible inventory downtown. So that's still a fairly large absolute number, I'd think; because there *are* so many.
ReplyDeleteWhat I missed is what they're empty "for" - if they were destined to become rental inventory, then it'd be a fairly substantial rental vacancy rate that you don't hear about much.
The methodology of the study is questionable, why would you sample 13 entire buildings instead of 2400 random units? It seems that could introduce significant error to the results. Hard to say without seeing the study in full.
ReplyDeleteI wonder how many of the vacant condos are being held for the Olympic rental pool? Should be lots of good rental deals and a flood of condo listings next March.