Burnaby NowPublished: Saturday, March 07, 2009
Re: Market not ready for optimism, On the Market column, Burnaby NOW, Feb. 25. Mr. McCarthy slags Bob Rennie for making market prognostications at the same time he holds himself out to be the only person capable of dispensing "truth" about the real estate market.
Yet Mr. McCarthy makes statements such as, "The average or median housing cost for all products are so excessive compared to similar units in Canada and North America ..." When has a home in Vancouver not been "excessive" in terms of price when compared to Winnipeg, Thunder Bay, Saskatoon, Quebec City, Halifax or Plum Coulee? Perhaps Mr. McCarthy would like to do an analysis comparing home prices in Vancouver with London, Paris, Tokyo, San Francisco and New York - some of the other most desirable places to live in world.
His reference to "tens of thousands of units bought entirely on speculation" implies that this is the condition here in the Lower Mainland. Perhaps he could explain why, as of Feb. 27, there are just over 100 units being offered on MLS and other sites such AssignmentsCanada.ca and craigslist etc., for sale as "assignments" or buyers selling contracts before they have to complete and take possession of the property. If there are "tens of thousands" of units sitting empty, why is the vacancy rate low, rents so high?
In many cases, it now costs less to buy a home in the Lower Mainland than it costs to rent the same home. When I refer to homes, I include condos, as they are the home of choice for more than 70 per cent of all buyers, including first-timers and downsizers.
History does seem to repeat itself, yet Mr. McCarthy did not refer to the last really big slowdown in the Lower Mainland real estate market in late 1980 on through the early '80s, nor did he mention that prices did not fall back to pre-1980 levels. Or that interest rates were 19 per cent or more. Nor did he mention that the astute buyers that bought in 1981/82 made returns of 1,500 to 2,500 per cent and more over the following 25 years.
For real estate investment experts, some self-proclaimed, such as Mr. McCarthy, always stand to gain more by buying at the lowest possible price. Anything that an investor can do to lower the price of the commodity he is about to buy works to the investor's advantage. Press releases without hard evidence and bafflegab are just some of the many ways this can be done.
My advice to any investor is to do your own due diligence. Believe nothing of what you hear and only half of what you read. Any experienced Realtor can supply you with the current market information you need - call a few and compare the info. Check out a few of the properties that are for sale, for rent. It's your money: Invest it wisely knowing that the best investment you can have in the Lower Mainland is a paid for home or a rental property that produces positive cash flow.
Mr. McCarthy quotes from the Realtor Code of Ethics, "Under all is land." It's unfortunate he did not read on: Article 1: A Realtor shall be informed regarding the essential facts which affect current market conditions. Article 19: the Realtor shall never publicly discredit any other registrant, if the Realtor's opinion is sought, it should be rendered with strict professional integrity and courtesy.
Donald G. MacKay, managing broker,
Amex Broadway West Realty