Housing/Construction Costs
- Thread starter KYG
- Start date
A friend of mine is a builder, and he seems to think that the next few years leading up to the Winter Olympics is going to be extremely busy.
A lot of the construction is being financed by speculators, rather than people looking for a new house to live in.
A lot of the construction is being financed by speculators, rather than people looking for a new house to live in.
Prices will drop after the construction surge for the 2010 Olympics is over. Sometime in mid 2009. Right now, it's insane to try to build anything. The quality isn't going to be there because a lot of the people working as skilled trades, aren't skilled and don't care about quality or know enough to deliver quality. The price is steep because of the shortage of trades and it's hard to schedule trades in a cost effective manner. When the length of time required for construction is doubled, the carrying costs begin to bite.KYG said:
Lot's of factors to consider when any market is bullish:
Q.What's driving the prices up
A. Low interest rates
Consider - Interest rates are rising and will continue to rise due to the US trade deficit with the rest of the world
Q. What will drive the price down
A. A slow down in demand
Consider - When the average home price is 700k new home buyers go away unless they can borrow large sums of money at very low interest rates.
Everything else is speculation unless you have a crystal ball.
DS
Q.What's driving the prices up
A. Low interest rates
Consider - Interest rates are rising and will continue to rise due to the US trade deficit with the rest of the world
Q. What will drive the price down
A. A slow down in demand
Consider - When the average home price is 700k new home buyers go away unless they can borrow large sums of money at very low interest rates.
Everything else is speculation unless you have a crystal ball.
DS
3 Years ago you can do a rough estimate of $1 per square feet to build a house. (For a normal house, not a house with 24k gold toliet seat, and a sub zero refrig and all the other bells and whistles).....today you will be lucky to build the same house for $1.50 per square feet.
Better be prepare, this price is here to stay for a while, right past 2010....cause there is a HUGE shortage on tradesman.
Better be prepare, this price is here to stay for a while, right past 2010....cause there is a HUGE shortage on tradesman.
Pretty sure you meant $100 per square foot and now $150 per square foot for what you call a normal house.dick9994 said:
At the lot prices in the Lower Mainland, it doesn't make sense to not put in a system to preheat your water and air with in ground coils. Once you get to the pricing we have (400,000 for lot and 405,000 for 2700 square feet), it doesn't make sense to not dress the house up to justify the $900,000 selling price.
Sorry ya I meant $100 per square foot then and $150 per square feet today.....my mind was on the hockey game yesterday...sorry my bad 
Ya I must say it doesn't make sense to build a house today, for me to build a 4,000 feet house at $600k and my lot value at $400k.....that means the cost of the house would be 1 Million....if I was to sell the house 6 months later, I would be lucky to get back 800k.
With interest going up, purchasing power will go down, therefore, the higher price houses will flat line, and start to decline within the next few years....do I hear people re-newing their mortgage, and can't handle the new paymemts....then again the buyer can always opt to extend their mortgage to 30 or 35 years.
Ya I must say it doesn't make sense to build a house today, for me to build a 4,000 feet house at $600k and my lot value at $400k.....that means the cost of the house would be 1 Million....if I was to sell the house 6 months later, I would be lucky to get back 800k.
With interest going up, purchasing power will go down, therefore, the higher price houses will flat line, and start to decline within the next few years....do I hear people re-newing their mortgage, and can't handle the new paymemts....then again the buyer can always opt to extend their mortgage to 30 or 35 years.
falling price
The rule of thumb in the real estate and investing game, the market drops down and then gains again usually every 7 years. I'm not saying it will drop really low but that is the rule of thumb with real estate/inverstments purcheses. But around Van COULD MAYBE be a different story with the 2010 games coming to the area.KYG said:
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I lived in Calgary during the 1988 Olympics...the major problem this time around is both material and labour have gone up a lot. Supply and Demand their is a major shortage on trademan.....and anyone who has their ticket in a certain field, will get hired over the phone. Material cost have gone up a lot...a lot of houses are using "finger joint" 2x4 to cut cost.
The shortage on the labour front is not going to look any better today, or after 2010...you hear it on the news all the time, how BC is trying to recruit people from anywhere in the Canada. I know this will come out as a racist remark, but it's not intended to be....the only way you can build a house today at the lowest possible dollar is to hire an East Indian contractor......they'll be willing to work under the normal wages....also I witness one house being built by a family business (this is not their home they were building)....the grandfather was digging (ya a 70 year old man digging)....and the 2 YOUNG teenage kids trying to wheel barrel concrete.
The shortage on the labour front is not going to look any better today, or after 2010...you hear it on the news all the time, how BC is trying to recruit people from anywhere in the Canada. I know this will come out as a racist remark, but it's not intended to be....the only way you can build a house today at the lowest possible dollar is to hire an East Indian contractor......they'll be willing to work under the normal wages....also I witness one house being built by a family business (this is not their home they were building)....the grandfather was digging (ya a 70 year old man digging)....and the 2 YOUNG teenage kids trying to wheel barrel concrete.
that's my whole argument against the olympics ... since Expo 86, who DOESN'T know that Vancouver exists?dcuplover said:
this is just a massive rip-off for some gordo cronies to make another fast buck and leave us paying for it.
To build the house is still the cheapest part of the deal. Expect most houses to cost anywhere from 20K to 75K to actually build to completion.d_Duck55 said:A dollar per square foot ... you must live in a very *nice* house. Is it at a highway rest stop with a crescent moon cut out of the door?
Try a dollar per square inch and you will still be at the low end
Now, the REST of your 700K investment is just the property...
As for contractors, all I can say is find a reputable one that has been around for a while. Put a bid out and take the middle of the road offer. The most expensive ones ae doing it just because it'll be worth it to them if you bite at that price... but they are too busy or don't really want the job for whatever reason (but you can expect a damned quality job IF you do get them). The cheapest are willing to cut corners and you'll have problems (costly ones at that) later on down the road.
Alot of people are tempted to go with the cheapest contractor (not talking people who hire contractors for a living, but your average joe-wants-a-house-built fella).... and they (like out beloved government) don't realise that there's alot of truth to the following saying:
You can have a job done fast, done good (s'cuse the improper English) or cheap. Pick any 2 and drop the other. Our Gov't insists on Fast & Cheap... so guess what suffers?
Bah.... no more rambling. Reliable contractors only, references required, make sure you follow up on references... even if it means going out to past sites and talking with the current residents. It's your cash, demand the best.
Me out...
this is just a massive rip-off for some gordo cronies to make another fast buck and leave us paying for it.[/QUOTE said:
