799 replies to this topic

[concorde]

I was figuring 180K mortgage @3% = $5400/yr = $450/month.
With the BoC rate at 0.25% I figured there could be mortgages at 3%.

Let me know where I can get 25 year money at 3%. Btw, the payments on that come out to $853.58/month

Bump it to 8%, which is more likely, the payments are $1389.27

and just for conversation sake, at 10% = $1635.66

As you point out you have to add in strata fees, but you also have property taxes, utilities such as heat and hot water which are usually covered in your rent in Victoria.

[jklymak]

Of course if you have 10% interest rates, inflation will likely be close to 7%, which will mean that your $900 rent will be $1770 in 10 years. Just saying that the risk cuts both ways.

[yodsaker]

Let me know where I can get 25 year money at 3%. Btw, the payments on that come out to $853.58/month

Bump it to 8%, which is more likely, the payments are $1389.27

and just for conversation sake, at 10% = $1635.66

As you point out you have to add in strata fees, but you also have property taxes, utilities such as heat and hot water which are usually covered in your rent in Victoria.

concorde,
what am i missing here (sincere question)?
i took 180 X3% =5400 divide by 12 = 450/month approx.
but i didn't say 25 yrs. i meant a low rate for 1-2-3 yrs and hopefully the buyer gets a salary raise or 2 or changes jobs upwards.
i figured mortgage + strata + utils could pretty well match the $750-900/month to rent a decent 1BR in the city centre.

[concorde]

$450 is the payment just on the interest, you also have to pay down the principle over the total period of the loan

[concorde]

Of course if you have 10% interest rates, inflation will likely be close to 7%, which will mean that your $900 rent will be $1770 in 10 years. Just saying that the risk cuts both ways.

With a high interest rate you get low inflation and vice versa. Why do you think we have had high inflation for the past few years when we have had record low interest rates.

[yodsaker]

$450 is the payment just on the interest, you also have to pay down the principle over the total period of the loan

of course...doh! i've done it myself but forgot!

[jklymak]

With a high interest rate you get low inflation and vice versa. Why do you think we have had high inflation for the past few years when we have had record low interest rates.

Inflation has been like ~2% for years now. Rents tend to track inflation rates.

Interest rates tend to track inflation a) because the BoC uses them to control inflation and b) banks and their investors expect a real return on their money.

[jklymak]

$450 is the payment just on the interest, you also have to pay down the principle over the total period of the loan

True, but you don't lose the principal, so comparing it to rent doesn't make much sense.

Anyhoo, back to 834 Johnson - I doubt anyone would be sad to see some well-built steel and concrete $200k condos on the market.

[concorde]

Inflation has been like ~2% for years now. Rents tend to track inflation rates.

Interest rates tend to track inflation a) because the BoC uses them to control inflation and b) banks and their investors expect a real return on their money.

Inflation has been running a lot higher than 2%/year and for a long time. Just some examples that I can think of

In 10 years, gasoline has doubled in price. Inflation -> 7-8%/year

In 10 years, the price of milk and groceries on average has doubled. It took a friend of mine to point this out to me, but I am currently spending twice what I did on groceries from 10 years ago.

At the peak of construction, construction costs were inflating at 2%/month or around 28-29% a year.

You need to remember the early 80's, what happened to inflation when interest rates hit 20%?

I'm going to stop now, as this is getting off topic...

[mat]

Inflation has been running a lot higher than 2%/year and for a long time. Just some examples that I can think of

In 10 years, gasoline has doubled in price. Inflation -> 7-8%/year

In 10 years, the price of milk and groceries on average has doubled. It took a friend of mine to point this out to me, but I am currently spending twice what I did on groceries from 10 years ago.

At the peak of construction, construction costs were inflating at 2%/month or around 28-29% a year.

You need to remember the early 80's, what happened to inflation when interest rates hit 20%?

I'm going to stop now, as this is getting off topic...

It is off topic, but relevant. If you wish to provide your insights, thoughts or prognostications try this thread.

Nobody seems to care about inflation - why?

[LJ]

Inflation has been running a lot higher than 2%/year and for a long time. Just some examples that I can think of

In 10 years, gasoline has doubled in price. Inflation -> 7-8%/year

In 10 years, the price of milk and groceries on average has doubled. It took a friend of mine to point this out to me, but I am currently spending twice what I did on groceries from 10 years ago.

At the peak of construction, construction costs were inflating at 2%/month or around 28-29% a year.

You need to remember the early 80's, what happened to inflation when interest rates hit 20%?

I'm going to stop now, as this is getting off topic...

Why is it when the government sets the CPI they don't include gas or housing in their basket of goods?

[Nparker]

Why is it when the government sets the CPI they don't include gas or housing in their basket of goods?

Because then we'd get an accurate picture of what inflation really is...and that's not to the government's best interest.

[yodsaker]

Because then we'd get an accurate picture of what inflation really is...and that's not to the government's best interest.

Yup!
Politicians get to stay in hotels on the taxpayer's dime and the chauffeur fills up the limo.

[Mike K.]

The834's website has been updated.

[spanky123]

Because then we'd get an accurate picture of what inflation really is...and that's not to the government's best interest.

They count it when prices are going down.

[Kapten Kapsell]

The 834 Sales Centre was 'hopping' today... I believe that quite a few of the units have now sold.

[Mike K.]

That's fantastic. I suppose a press release will be forthcoming with details.

[Nparker]

The 834 Sales Centre was 'hopping' today... I believe that quite a few of the units have now sold.

That would be great news. I hope this project can proceed on schedule, since it will give people hope that this recession is not the end of the world.

[Koru]

I just recieved this email from Chard this afternoon

Dear XXXXX

Chard Development Ltd. is proud to introduce our brand-new Victoria project - The 834. We are now selling and construction is scheduled to begin this Fall with completion in November 2011.

Located in downtown Victoria, BC - The 834 is just 5 minutes from the Inner Harbour and at the heart of a growing downtown neighbourhood with boutiques, shops and award-winning restaurants. With its savvy european-inspired suites, generous green spaces, amenities and bright green thinking, The 834 is a new face that’s fast becoming downtown’s favourite new neighbour.

With over 50 suites priced under $300,000 and starting from just $198,900 - The 834 is also the right building for today’s market.

INCREDIBLE VALUE
1 Bedrooms from $198,900
1 Bedroom + Dens from $249,900
2 Bedrooms from $324,900
Live/Work Townhomes from $390,000

Visit our website for floorplans, more about the building and to meet some of the people who make downtown Victoria the vibrant and unique place that it is. www.the834.com

In addition to our incredible suite pricing, two major banks are offering attractive deposit and fixed-rate mortgage financing which they will hold until the building is completed in 2011 - allowing you to take advantage of today's low interest rates!

Our Presentation Centre at 780 Johnson Street in Victoria (Corner of Johnson & Blanshard Streets) is open everyday from Noon-5pm (except Fridays) or call us at 250.382.6001.

Yours Sincerely

The 834 Sales Team

info@the834.com
P 250.382.6001
F 250.382.6009


THE 834 PRESENTATION CENTRE
780 Johnson Street, Victoria BC V8W 1N1
Hours - Noon-5pm Daily (Except Fridays)

[VicDuck]

Good to see they are building cheap condos downtown.