Aliens

aliens1

Why does the average detached house cost $796,182 in Toronto, and $919,900 in Vancouver? After all, who can afford them? Those prices represent a huge multiple of the average household income for both cities, which has led many people to the same conclusion: Canadians are being priced out of their own homes by foreign buyers. Not just any foreigners. Chinese.

It’s a meme pushed relentlessly by realtors and their marketers, then regurgitated on cue by a gullible and fact-challenged media. Just watch this clip which aired on Vancouver television on May 30th, 2011:

In the last two years Van-area realtors worked hard at creating a buy-now-or-buy-never frenzy among the locals by raising the spectre of waves of cash-imbued Chinese buyers. That led to fake Chinese realtors buzzing White Rock by helicopter and fake Chinese buyers giving TV interviews in condo sales offices. Meanwhile suburban agents like Gee Moore were telling reporters fake things like this:

“Burnaby is very attractive because it is up high and for its proximity to Metrotown for the Asians. It has always been prices were higher in North Burnaby, but now more and more it’s those areas. They’re getting all the Asian buyers. Almost 90 per cent of higher-end house buyers are foreign.”

Ninety per cent foreign?

This was a low point for the Canadian real estate industry, of course. Creating a new Yellow Peril, appealing to the basest of xenophobic fears, all in the name of higher sales, higher prices and higher commissions. And it worked. Suddenly we heard serious talk about the need for restrictions on foreign property ownership, like they have in Australia (one of the less tolerant places on the planet). In that country non-permanent residents are disallowed from buying resale homes unless they receive government approval. Mexican laws prevent foreigners from acquiring oceanfront land. Even little PEI limits the size of property non-Islanders can own.

To its credit, the BC government has told the Canada-firsters to buzz off.  “British Columbia does not have any policies in place that limit foreign ownership of residential properties,” it says. “We have not identified any conclusive evidence that foreign ownership of residential property is itself measurably affecting the B.C. real estate market in a way that requires government intervention in a private market.”

But hold on. Does anyone have any empirical evidence on where buyers are actually coming from? Especially in urban BC where ridiculously-stupid real estate prices are universally blamed on HAM?

Actually, yes. Quietly, real estate boards – made up of the same horny house humpers who tell you the Chinese are ubiquitous – compile statistics on precisely where purchasers originate from. In Victoria, for example, we know that 65.5% of the people buying homes already live in that city. Another 18% come from BC, while 14% traveled from elsewhere in Canada. The foreigners? Just three per cent.

But how about Vancouver and the Lower Mainland, where the realtors have joyously described mass HAM invasions of Richmond, West Van, Burnaby, White Rock and Shaughnessy? How else could prices have increased by up to 70% in a decade without an unbridled torrent of moohlah from all those wealthy industrialist playboys in Guangdong?

Turns out the Vancouver board does the same thing. Currently 88% of all real estate buys in the region are being made by people who live there. About 6% come from elsewhere in Canada, and only 6% don’t live in the country. Seriously.

What conclusions can we draw from this? Obviously that prices are insane not because of immigrants or foreign investors, but because the locals have made them that way through house horniness, speculation, competition and greed. Here are five more:

  • Realtors who scare people with race-based marketing are pond scum.
  • Most folks are unbelievably gullible and will swallow anything.
  • The media should be ashamed of itself. Honestly.
  • Real estate is making us intolerant.
  • If you want lower house prices, people, stop buying.

There’s nobody to blame but yourself.

236 comments ↓

#1 Smoking Man on 07.23.13 at 6:57 pm

What is this, Bond Yields Dropping as per my Batman call.

http://www.bankofcanada.ca/rates/interest-rates/canadian-bonds/

Vegas on Thur dogs, will be posting Pics and comments on my shit blog. Defiantly some post here too.

My delete finger is ready. — Garth

#2 Leon Sam on 07.23.13 at 7:03 pm

First!

But in all seriousness most of the chinese/asian people who buy live here. Its in our culture to save money. Most of my friends have houses, but thats because we dont party every weekend on know how to manage our money. So when my friends buy a place, I guess its over seas buying up Vancouver!. The other type of chinese people are those who move here and live here for a few years, find out there are no jobs/opportunities and move back. :p

#3 East Van on 07.23.13 at 7:05 pm

One of the funniest critiques of the current state of journalism ever:

https://www.youtube.com/watch?v=U7FTF4Oz4dI

#4 Rob on 07.23.13 at 7:15 pm

Just need to spread some more bubble FEAR . This slow motion deflation really sucks.

#5 Bobby on 07.23.13 at 7:16 pm

Realtors are like salesmen of any stripe.

Who believes what they say anyways?

Had one realtor tell me 2X4 construction was better than 2X6 as the house wouldn’t get so hot. Go figure.

#6 AK on 07.23.13 at 7:17 pm

#1 Smoking Man on 07.23.13 at 6:57 pm
“Vegas on Thur dogs, will be posting Pics and comments on my shit blog. Defiantly some post here too.”

====================================
I hope that you will be staying at a MGM property.

I hear that there are bed bugs in the Caesars Properties. :-)

#7 Priced Out on 07.23.13 at 7:20 pm

Garth, thanks for posting those statistics about foreign buyers. I’ve been waiting years to see if such statistics existed, and like you I always suspected it was insignificant. Separating all the realtor’s (or people in general) who misguided people by instilling this brand of fear are another group of realtor’s (people) who don’t realize that the large fraction of Asians who are buying properties are simply Asian Canadians. I suspect they don’t know how to determine the difference which is sad.

#8 Nemesis on 07.23.13 at 7:21 pm

“At 81 flights per week, Vancouver now offers more flights to and from China than any other city in North America.”

http://www.cbc.ca/news/canada/british-columbia/story/2013/07/19/bc-china-eastern-doubles-flights.html

It’s the MapleSyrup, right? Right?

Oh yes, I almost forgot…

“We have seen an increase in travel by 50 per cent from mainland China over the last 12 months, so it has been big.” – BC Premier Christy Clark

[NoteToGT: Empirical evidence? Scads, actually... Primary sources.]

#9 Doctor Fierce on 07.23.13 at 7:24 pm

I live in Vancouver. The yellow peril meme is a part of the city’s culture and dialogue. Most people are now getting it. They sold the city to each other. Like Ireland in 2008. Read When Irish Eyes Are Crying by Michael Lewis. Notice anything?

http://www.vanityfair.com/business/features/2011/03/michael-lewis-ireland-201103

#10 Andrew on 07.23.13 at 7:29 pm

Wow only 3% and 6% for foreign buying. I would have expected it to be much higher percentage…

#11 timmy on 07.23.13 at 7:30 pm

Where’s the evidence for the stat of percentage of foreign buyers? What’s the source? If you spent any time in Vancouver you would know those figures are false. Who are all those buyers in Coal Harbor? The ones where almost 30 percent of the units sit empty?

Vancouver Conference Board states house prices in Vancouver have actually risen, despite all this gloom and doom. The crash might come next year? The year after?…Maybe when they limit foreign ownership and speculation?

#12 Average Joe on 07.23.13 at 7:31 pm

Yep, there is some Arab and Asian real-estate owners in Vancouver. Some have kids going to schools here and they just buy them a condo, other just keep the place and phone number so they can get Canadian papers even if they don’t reside here. Reality is slowly and painfully setting in…..as described on this blog. Prices are coming down, most homes over $1 mil are hard to get rid off. The change is in the air and most of us hate to accept the the “sure thing” is no longer so sure.

#13 Steve-O on 07.23.13 at 7:31 pm

Garth – where the people were living immediately before they purchased the house is only half of the equation.

Since most of the arguments about the bubble are related to ratios of income to price etc. , isn’t it also important to know where the money is coming from?

Isn’t it possible that there are Chinese families buying expensive houses using money from China? Are there any stats on that?

Deniers. — Garth

#14 AK on 07.23.13 at 7:33 pm

Ford to hire 800 white collar workers .

Get ready doomers. They are also coming out with a mind blowing numbers report tomorrow.

#15 al on 07.23.13 at 7:37 pm

no doubt that the filthy foreigners were buying up real estate.

even if the buyer is a canadian resident, the money actually comes from abroad from corrupted crooked weasels – some bribe taking commie uncle in mainland or some auntie in Mumbai or some other scumbag family member.

it is naive to think, that if the buyer is a canadian resident or a citizen, they actually always pay their own money.

unless there are actual ethnic statistics, the numbers mean nothing and nobody would dare to compile ethnic statistics.

#16 blobby on 07.23.13 at 7:38 pm

Can we also blame the banks for allowing people to borrow these high prices?

The other thing – in Vancouver, you only need to walk around coal harbor to see what a complete ghost town that place is. Thousands of expensive properties – sitting empty (but owned). Now i’m not saying these are foreign owners – but I will ask – WHO owns these properties and aren’t living in them??

And would it not be wise to introduce a empty-home tax similar what i hear they have in Montreal?

#17 Ralph Cramdown on 07.23.13 at 7:39 pm

I’m firmly in the “not proven either way, would like more data” zone on this issue. But I would point out that in a market made at the margins (and they always are), 6% foreign buyers is NOT insignificant. If they’re planning on landlording, the effect is less than if they’re using the place for only 2-10 weeks a year or just leaving it vacant as a store of wealth. If they’re a consistent 6% year in and year out the effect is less than if they’re 6% hot money that will become -6% when fads change.

And “We have not identified any conclusive evidence that foreign ownership of residential property is itself measurably affecting the B.C. real estate market in a way that requires government intervention in a private market.”??? I bet it took a whole pride of weasels to write that loophole-filled sentence. What would it take to get from there to “Foreign ownership is not appreciably affecting the BC real estate market”? Studies, data and the desire to know.

#18 T.O. Bubble Boy on 07.23.13 at 7:40 pm

Turns out the Vancouver board does the same thing. Currently 88% of all real estate buys in the region are being made by people who live there. About 6% come from elsewhere in Canada, and only 6% don’t live in the country. Seriously.

HA! Caught you!

There is no way that this is 88%… that is probably a made-up from the same RE board whose realtors use lucky 888’s in the pricing of those million-dollar homes.

What’s the real number?

#19 T.O. Bubble Boy on 07.23.13 at 7:46 pm

Also – looking at whether or not it is “locals” buying the property is irrelevant… where is the cash coming from is the key question? It is mortgage debt, or a ‘gift’ of cash from a hard-to-track offshore source?

For example (in Toronto)… was the exchange student buying a $1.2M bungalow in Willowdale last year using her salary to buy the house?
http://www.cbc.ca/news/canada/story/2012/03/14/real-estate-overseas-investors.html

#20 mark on 07.23.13 at 7:49 pm

“like they have in Australia (one of the more racist places on the planet)”

Dear me. Now who is gullible and fact-challenged?

#21 Smoking Man on 07.23.13 at 7:51 pm

It is absolutely insane what the herd has done to real estate, between the last 2 to 4 years I liquidated most of my real estate, thinking it was insane back then.

I’m a big boy, I bet wrong, and knew I bet wrong, but made up for it 10 fold in the markets. Luck

It’s not the point, we have a huge under employed youth yet we use temp labour insuring the pool of available slaves is big ensuring the young will have a hard time finding jobs, and when they do, they will be low paying.

It’s horrible for our young, not everyone is comfortable lying, scamming taking. Some young are straight shooters, honest as hell, you can’t make email smoking men no matter what you do. and when you throw in smarts, deductive reasoning you are left with an entire generation of people who feel hopeless and worthless.

I’m going to do something about it.

#22 al on 07.23.13 at 7:52 pm

some regions of the world (Russia, China, India) have no rule of law and corruption is so massive, that those folks don’t care how much they have to spend to get the money legit.

if some dude makes $20000 a month or in a week in bribes, they could not care less what transfer fees and taxes they need to pay to get some far removed relative to buy RE in Canada – it’s better than hoarding cash in some hellish place.

foreign corruption proceeding going into canadian RE is a real issue, and nobody wants to crackdown since it’s “good for the economy”

#23 Donald Trump on 07.23.13 at 7:54 pm

Oh yes..statistics …..uh huh.

” Foreign ownership ” ?

Of course…if you have ” acquired ” citizenship, and with your assets acquired offshore buy a number of properties in new homeland , that would be domestic purchase ..correct ?

#24 guava.ca on 07.23.13 at 7:56 pm

The number 1 reason for the high cost of the average detached house:

http://www.bankofcanada.ca/wp-content/uploads/2010/09/selected_historical_page57_58.pdf

The number 2 reason for the high cost of the average detached house:

http://www.conferenceboard.ca/hcp/details/society/income-inequality.aspx

#25 deaner on 07.23.13 at 7:58 pm

My girlfriend’s father is an economic class immigrant from mainland China. Far more successfully than I, but the guy’s attitude towards risk is so different than mine because his definition of normal is 20% ROI on just about anything per year. I would guess Vancouver real estate appears perfectly normal to him.

(I don’t own, and no reading this blog has not helped my relationship with my girfriend’s parents).

Some ‘astronaut’ economic class immigrants have an impact similar to foreign investors, but are not technically foriegn. Wouldn’t they be counted as local renters in your data?

I agree that the HAM argument is massively overstated as prices everywhere in the GVRD are inflated. However, it’s not racist to record data or even impose restrictions. Wouldn’t it then finally put the HAM argument to rest and calm people down?

#26 Snowboid on 07.23.13 at 7:59 pm

This may be a year old, but still is an interesting read from a Vancouver real estate agent writing about foreign ownership:

http://www.vancourier.com/business/Foreign+buyers+gobbling+Vancouver+houses/6564490/story.html

#27 father on 07.23.13 at 8:00 pm

garth 90 % of people in vancouver think ham are buying all these houses and that won’t change until msm start’s telling the truth

#28 AK on 07.23.13 at 8:00 pm

#13 Steve-O on 07.23.13 at 7:31 pm
“Isn’t it possible that there are Chinese families buying expensive houses using money from China? Are there any stats on that?”

====================================
If that were the case, shouldn’t the Debt to Income ratio be lower than 161.8 percent ?

#29 Dean Mason on 07.23.13 at 8:00 pm

I just heard a U.S. mortgage ad on a Buffalo radio station for a 10 year fixed rate mortgage for 3.25%. Here in Canada lowest 10 year fixed rate mortgage rates are 3.99% Bank of Nova Scotia,ING Direct,Manulife Bank.

Royal Bank of Canada,TD Canada Trust,BMO are higher at 4.29%. I hear constantly that fixed rate mortgages are funded by the bond market but if you look at 10 year Canada bond yields at 2.40% versus 2.49% U.S. 10 year bond yields they are almost the same.

The 74 basis points to 104 basis points more charged by these Canadian lenders is pure profit and has nothing to do with the Canadian or any other bond market.The 3.25% 10 year fixed mortgage in the U.S. is with no points,fees either.

There is a lender First Calgary Financial that has a 10 year fixed rate mortgage for 3.68% but how long will this 10 year fixed rate mortgage stick and nobody knows if this lender will stick around or be bought out by another company.

Polite,non complaining Canadians once again are paying 22% to 32% more for 10 year fixed rate mortgages.It’s just like Retail,taxes and many other things.We are all suckers.

#30 veej on 07.23.13 at 8:06 pm

You seem to be very selective as to what you and your readers are to believe when it comes to realtors and related associations. Basically don’t believe a word they say unless its a low percentage of foreign buyers in Toronto or Vancouver. Have you been to an open house in Van West in the last 5 years? Taken a stroll down 3 Road in Richmond? Enrolled your kid in a central Vancouver public school? You would swear you were in another country. The realtors have duped you Garth. Do you think they would actually report accurate information (if they had it) and potentially spoil their gravy train? And the BC government – the only industry left in BC is Asian immigration. Even the BC Libs aren’t stupid enough to tighten the taps on that one. You are way off base on this one Garth. Spend some time here in the areas mentioned and your tune will change. BC is not an acronym for British Columbia any longer. When the economy tanked in 08 the Feds panicked, dropped rates to nothing and tripled CMHC. At the same time they opened the flood gates to immigration.

Sad. — Garth

#31 Nemesis on 07.23.13 at 8:10 pm

By the way, AuldPol… here’s a recent splendid/topical anecdote from your own archives well worth a second viewing…

http://www.greaterfool.ca/2013/05/29/a-downward-spiral/#comment-244358

It’s bigger than you think. Much bigger.

#32 Rain bird on 07.23.13 at 8:14 pm

The stats of whether the buyer is local or foreign are very inaccurate. It’s to the foreign buyer’s advantage to say they’re local because it gives them more bargaining power. Via local contact they can use any address they want.

#33 John on 07.23.13 at 8:17 pm

Hi Garth,
Check out this article http://ca.finance.yahoo.com/news/oh-canada-home-expensive-land-110000828.html

According to Organisation for Economic Co-operation and Development (OECD) Canada is now 11% more expensive than UK or 22% more than the international average, thanks to housing costs. The OECD calculated that based on home prices to income, Canada’s real estate prices are overvalued by 30%. Compared to rents, real estate prices in Canada are overvalued by 60%.

Seriously people stop buying…

#34 Spiltbongwater on 07.23.13 at 8:18 pm

Garth, Rose Li the incoherent home buyer qualifies as being a local buyer. Your argument is invalid.

#35 veej on 07.23.13 at 8:37 pm

So tell us oh great Swamy… who then is buying these $920,000 palaces? All the hard working Vancouverites earning $68,000 family income and negative savings you keep going on about?

#36 Cici on 07.23.13 at 8:37 pm

Amen.

#37 Cici on 07.23.13 at 8:45 pm

#15 al

You need a shrink, big time.

#38 Randy on 07.23.13 at 8:46 pm

“the proportion of government-insured mortgages in Canada went from 30 per cent in 1988 to 75 per cent in 2013.”

In other words, taxpayers are on the hook for three-quarters of Canadian mortgages, should something go wrong in the market.

Source – Canso Investment Study….

Why am I getting nervous ?

#39 Marly on 07.23.13 at 8:47 pm

Eventually, Vancouver will end up exactly like Pheonix, Las Vegas, Seattle, and other derelict places where real estate values eroded rapidly as they rose. There is no sustainable industry in that entire city to help support the incomes required to own single family detached homes. Moreover people in BC are grossly indebted. When boomers die, grandchildren will be left holding depreciating assets when they cannot even make the property tax payments. Vancouver is headed straight for real estate ruin. That market is the most ridiculously overpriced real estate market in the world.

#40 Rentingbeaver on 07.23.13 at 9:02 pm

I like number five: if we want lower house prices, stop buying absurdly expensive houses(Genyz and Xers) I met a physician yesterday. She is married to another physician. She admitted that they just bought a home, after having their first child, that they would not pay off in their life time. So if they can’t afford the big houses, who does?. #saynotohousehorniness

#41 Droit du seigneur on 07.23.13 at 9:03 pm

Jill is hot! I’ll buy an overprice shack from her if it comes with jus primae noctis (law of the first night).
Jill, call me: 416-$$$-$$$$

#42 takla on 07.23.13 at 9:06 pm

What,no mention of the future baby KING on the blog today?Good,nothing to see there.moving along i was taken back by the admission of a fav niece{20 yrs old} that it seems the tobigtofailbanks are now trolling for the NEXT generation of suckers/debt slaves.She’s constantly approached by her bank to borrow and according to her,many of her friends are being courted as well.Do the bankers have no shame…Good thing she’s smart and listens to Uncle……;]

#43 father on 07.23.13 at 9:08 pm

These people are from your blog just imagine all those people I see every day, not once have I heard their local I’ve tried telling people what you say but that don’t fly

#44 Timing is Everything on 07.23.13 at 9:10 pm

#18 T.O. Bubble Boy – What’s the real number?

You’ll never ‘real’ly know…Ever.

#45 Cici on 07.23.13 at 9:11 pm

#28 AK

Good call.

#46 HD on 07.23.13 at 9:14 pm

#15 al on 07.23.13 at 7:37 pm

no doubt that the filthy foreigners were buying up real estate.
even if the buyer is a canadian resident, the money actually comes from abroad from corrupted crooked weasels – some bribe taking commie uncle in mainland or some auntie in Mumbai or some other scumbag family member.
it is naive to think, that if the buyer is a canadian resident or a citizen, they actually always pay their own money.
unless there are actual ethnic statistics, the numbers mean nothing and nobody would dare to compile ethnic statistics.

You don’t make any sense. Please re-read your own post and clarify.

Best,

HD

#47 #24 guava.ca on 07.23.13 at 9:16 pm

I hate when government talks about income inequality. It basically means that they are going to take bigger chunk of everyone’s income that is higher than minimum wage. The richest have means to avoid it. The middle class always suffer. Why? You cannot take from someone who doesn’t have anything, or from someone who is too powerful (super rich).

#48 @ 14 AK on 07.23.13 at 7:33 pm on 07.23.13 at 9:23 pm

Deep talent pool in Detroit? The smartest 1,000,000 left!

#49 Former Hippy on a Gulf Island on 07.23.13 at 9:31 pm

I would not accept information on foreign ownership from the Vancouver Real Estate Board as being any more accurate than anything else they have pronounced or compiled, without careful audit.

What information is used by the Board in determining residency? I suspect it is simply an address that is provided by a purchaser in the course of a sale.

If the money that is used for the purchase is not properly taken out of China, which is generally viewed as being the case, my expectation is that a mainland China buyer is going to take reasonable steps not to give a mainland China address in a publicly available document, and will instead find a way to provide a local address.

#50 Chickenlittle on 07.23.13 at 9:33 pm

#2 Leon Sam:

That’s why you make good neighbours: you don’t keep people up until all hours of the night.

#51 G-know on 07.23.13 at 9:43 pm

Question: if a foreigner incorporates a BC company, does the house purchase count as local?

#52 nancy on 07.23.13 at 9:47 pm

Garth you are a smart man, but you are waaayyy off on this topic. What is the definition of a foreign buyer? Someone with a visitor visa? Or non-Canadian passport? Or permanent resident? Applying for landing papers? Student visa? Wife and kids in Canada, and husband in China?
I am a real estate agent selling property in West Vancouver, and the only buyers that are looking are those from China because the local buyers cannot afford those prices. I cannot tell you what their status is, but do know that most of them 99% do not speak a word of english. I have never asked to see their passports, but I can assume somehow they have a foothold into Canada by some means. I heard that one chinese buyer purchased 10 properties each over $1m. Local buyer you think? Vancouver Westside, Richmond, condo pre-sales….mostly sold to chinese buyers as well. Please do not tell me that you believe the stats that indicate the majority are not foreign buyers. You need to define who foreign buyers are. I will have to rethink my opinion of you.

#53 Future Expatriate on 07.23.13 at 9:47 pm

There you go again, Garth, with your FACTS.

Telling facts to xenophobes is like trying to teach a pig to sing.

“Never try to teach a pig to sing. It wastes your time and annoys the pig.” – Mark Twain

#54 Party On Garth on 07.23.13 at 9:50 pm

You really lost me on this one Garth. I guess becoming a latte Liberal really got to you. Disappointing.

The numbers are not mine. Sorry they did not support your prejudice. — Garth

#55 don on 07.23.13 at 9:51 pm

Ak car companies are not selling cars but are selling debt. I have seen many adds for 96 month loans.If you do not understand the long term implications of pulling demand from the future with expanded credit you do not understand economics. I have a question was the us economy doing great in 2006/2007 or was it sick as a dog?

#56 father on 07.23.13 at 9:55 pm

I believe you garth about 6% (I thought it was about 10%) the locals have taken on so much risk it is crazy

#57 TurnerNation on 07.23.13 at 9:59 pm

What I was mentioning, SCU.TO (yield 8%!) I know of several downtown locations closed, within the past few years. End of an era.

Still, I refuse *BUX’s gossamer marketing attempts. Lest I walk away rubbing my posterior in a yuppie-like fashion.

Smoking man, tonite was another Duke Devon’s patio event. On a clear day you can see Bay St.
A small respite for workaday tax farm schlubs like myself.

#58 al on 07.23.13 at 10:10 pm

@#46 HD on 07.23.13 at 9:14 pm

very simple – corruption filthy money being sent to Canada, so someone – a family member, friend etc. will buy real estate for the purpose of safekeeping the money and for the money laundering purposes.

please read the post by #19 T.O. Bubble Boy – it’s all there for you, and there is nothing racist or xenophobic in recognizing this sad reality.

the only reason that “exchange student” pays $400k over asking for a dump which is listed for $800k already, is that some folks don’t care how much it costs, and the only hard working folks like that are some corrupted crooks.

because they don’t work for their money – it’s corruption proceeds.

as for statistics, show the numbers by ethnicity of the buyer and their income, see who’s buying what and for how much then.

By ‘ethnicity’? And would your Canadian-born neighbours of Asian descent make your hit list? You’ve lost it, dude. — Garth

#59 TurnerNation on 07.23.13 at 10:10 pm

Tabula Rasa: what makes this weblog’s comment section truly terrifying.

Strained and furrowed, though brows ideas shred.

#60 AK on 07.23.13 at 10:10 pm

#53 don on 07.23.13 at 9:51 pm
“I have a question was the us economy doing great in 2006/2007 or was it sick as a dog?”
====================================
Don,

Listening to Peter Schiff will not make any money for you.

#61 2CentsCdn on 07.23.13 at 10:19 pm

#54 don
“selling dept not products”
I 100% agree …. industry has learned how to trick people who have little hope, money or patience to (sort of) buy stuff by spreading and kicking the payment pain way down the road (houses, cars, hot tubs you name it). All of this does not bode well for economies in the future (ours or other countries). Future spendable dollars are getting spoken for now. We’ve figured out how to fog customers into the new world of “what’s my payment?” instead of the old world “what’s the price?”

#62 Bob Chan on 07.23.13 at 10:21 pm

BC = Bring Cash

Nuff said?

#63 al on 07.23.13 at 10:22 pm

By ‘ethnicity’? And would your Canadian-born neighbours of Asian descent make your hit list? You’ve lost it, dude. — Garth

they make the list like that – Mr. So and So, local-born college student or a waiter, with the income of $35000 or no income at all, buys a house (condo) or two or three for $500k or $2 million each etc.

very simple list, easy to make a list like that

Now you’re scaring me. — Garth

#64 Van local on 07.23.13 at 10:22 pm

As a local. I don’t believe it. But this is home and I enjoy it:)

#65 father on 07.23.13 at 10:27 pm

I think some of the blog dawgs like believing in this myth about ham. I was born here and worked like a dog and would not pay these high prices for houses. 1.5 years ago so many of my friends bought million dollar houses and the banks were giving money away like crazy to them

#66 raisemyrent on 07.23.13 at 10:33 pm

Guys,
These mythical foreign investors wouldn’t be getting mortgages (especially with CHMC insurance), would they?

Somebody whose eyes aren’t as tired as mine at the moment should quickly look up the amount of mortgage applications (if possible, with insurance) in the last 10 years, and correlate it with the number of sales in Vancouver over the same period(good luck getting a trusty number for that last one). A close correlation would imply a low number of cash-flinging foreigners, me thinks.
I do concede that there are a lot of Asian CANADIANS in town (didn’t Stats Canada say ~50% last year), and that it would be tough to track where the money was really coming from, who already lived here, etc., but to go from 6% per Garth to 90% or whatever stupid number they threw out in the video is quite the jump… remember, 62% of stats are made up on the spot.
It was also bit laughable to infer from the video that people would buy here instead of in China; as if property values were close at all…
P.S. Who says all these units all over town are always empty? Don’t confuse frequently closed blinds on floor-to-ceiling windows with real estate myths.

#67 Uh Oh Canada on 07.23.13 at 10:37 pm

As an ex-Vancouverite, I’d like to mention something else that has helped with the rise of real estate: drug money. The underground marijuana trade has made many wealthy, even locals of Asian descent. It is true that BC has no industry and the Government has no choice but to turn a blind eye, as long as it keeps the local economy going.

#68 HD on 07.23.13 at 10:38 pm

#57al on 07.23.13 at 10:10 pm
@#46 HD on 07.23.13 at 9:14 pm

By ‘ethnicity’? And would your Canadian-born neighbours of Asian descent make your hit list? You’ve lost it, dude. — Garth

————————————————–

Exactly where I was getting at.

Your argument falls apart. Does not make sense.

Would a Canadian resident with European ancestry using funds coming from abroad make the ‘ethnic’ list?

Don’t get it yet?

Best,

HD

#69 nsguy on 07.23.13 at 10:44 pm

You are way off on this one! Being in the trenches is the only way to see the Purchase and Sale contracts, and know where the buyers are coming from. In West Vancouver, my neck of the woods the Mainland Chinese buyers account for at least 70% of the buy side(I have done my own calculating). Interesting though, at this time we have 620(all time ever high) sfd’s on the market, and half of that inventory is made up from people who have just purchased within the last 3 years. Sales are trending at below 10 year averages. Go figure why these buyer would pay top dollar with those stats. I don’t think their realtors have let them in on local stats, because if they held off buying for a couple of months things would get pretty interesting.

I showed you my numbers. Now show me yours. Link for ‘at least 70% on the buy side’ being Chinese? Otherwise we’ll think you made it up. — Garth

#70 Mark on 07.23.13 at 10:44 pm

“The 74 basis points to 104 basis points more charged by these Canadian lenders is pure profit and has nothing to do with the Canadian or any other bond market.”

If you honestly believe that, then go buy the bank shares. But on a more serious note, the BoC rate is 100 bp higher than the US rate, so you’d naturally expect the variance to be similar to that. Which it is.

#71 Unknown Marketer on 07.23.13 at 10:44 pm

I spend a lot of time in and around Vancouver and interact with Mortgage Brokers & Real Estate Agents…

There is a lot going on that does NOT hit main stream media and I totally read this blog for a couple of reasons and it’s not because I believe in everything GT says.

I also read it because of the “comments” some of you are totally idiot’s and some have good things to say.

What we have here is a platform to maybe get some real input from a lot of sources and more importantly some truths.

I do support opinions even when they are not my own.
Do I think we are going to crash ya..you bet and if you think we are not..smart people want to sell you a condo.

I just bailed and sit on 7 figures and sleep well.

What’s coming is not pretty and for those who have taken some of the advice here awesome..for those who wish it were different…stay with you beliefs at your own peril!

This is going to be an interesting show…buying popcorn as we speak.

#72 AK on 07.23.13 at 10:45 pm

Okay. I just watched the video above and the Real Estate Dude says that, “There is off street parking in West Van.?” – LMFAO

#73 al on 07.23.13 at 10:53 pm

http://www.scmp.com/comment/blogs/article/1102978/chinese-officials-behaving-badly

http://www.upi.com/Top_News/Special/2013/07/09/Russia-charges-former-Moscow-official-with-stealing-320-million/UPI-43761373342520/

bet they don’t care about interest rates or mortgage insurance

#74 TEMPLE on 07.23.13 at 10:58 pm

There’s nobody to blame but yourself.

I don’t know about that. As a lifelong renter, I’m pretty comfortable pointing fingers at everyone except myself. My arm is getting tired from all that pointing, though.

TEMPLE

#75 T.O. Bubble Boy on 07.23.13 at 11:03 pm

@ #57 / #62 al

You may have been missing my point with that post about the student buying the $1.2M house.

All I was trying to highlight is that money comes from many places, and the citizenship of the final buyer may be irrelevant if the funds found their way to that buyer from someone else. So, stats from a RE Board that state that the vast majority of buyers are local are as meaningful as a Rob Ford “survey” of car-driving burbs residents that states a preference for subways over LRT.

#76 Donald Trump on 07.23.13 at 11:06 pm

Listen you racists..

I have seen Garth in action…he is no racist.

His Amazons are the rainbow of the United Nations !

They represent our diversity which is out strength!

As they peel grapes, full massage , walk the pets , … and polish his Harley unicycle collection,…he makes 100% sure that they all have turns to be……

…drummmmm rolllll !

…….FIRRRRZZZSSTTT! for such an honour.

#77 Smartalox on 07.23.13 at 11:13 pm

@ Dr. Fierce, (#9)

That vanity fair article is great! And I think I found the similarity you mentioned: is it the fact that the government put an Irishman in charge of the ministry of finance?

#78 NotAGreaterFool on 07.23.13 at 11:13 pm

Here is the 416, while I understand the summer season is the slow season, I am seeing many homes close for under list price. Well over 50% in central Toronto for SFH. Could this be verification of the May 17 declaration when real estate died?

#79 grasshopper on 07.23.13 at 11:14 pm

Is “drug money” the missing link in BC?

#80 al on 07.23.13 at 11:15 pm

#67 HD
“..Would a Canadian resident with European ancestry using funds coming from abroad make the ‘ethnic’ list?..”

of course anybody would make a list – anybody who bought.

then you look at their income and their ethnicity.

you can easily compare income vs purchase price, and sure enough there would be lots of legitimate professionals and business people who bought for real.

think there’s going to be lots of european ancestry buyers, receiving funds from abroad and paying astronomical prices?

right, we don’t know, and if the only number given that most buyers are local, it means nothing

#81 not 1st on 07.23.13 at 11:23 pm

Garth, foreign interests often work with local ex pats to bring in off shore funds to buy up canadian assets like houses and farm land etc. The final sale shows up as a local owning it, but the funds are definitely coming in from other countries. Thus the 3% number is wildly skewed. Probably 10 times that amount.

For instance, there is a company right here in Sk who buys up farmland with offshore funds. The CEO is Canadian, lives here, been here a long time, but when he finds land he wants he makes a call overseas, funds come pouring, the asset is purchased in a Sask corporation and shares issued to the investors. Still a local purchase, but not at all locally owned.

#82 TO and GTA SFH and condo stats -July 23-905 looking pretty bad (avg -2.5% under asking price) on 07.23.13 at 11:24 pm

SFHs in 905 looking pretty bad: average -2.5% under asking price; looks like panic

http://recharts.blogspot.ca/2013/07/416-and-905-condo-sales-and-stats-july.html

http://recharts.blogspot.ca/2013/07/gta-sfh-sales-and-stats-july-23.html

http://recharts.blogspot.ca/2013/07/to-sfh-sales-and-stats-july-23.html

#83 Cowpoke on 07.23.13 at 11:30 pm

In case you haven’t ‘noticed’, approximately 1% of all available properties appears to control this market and its pricing. So 3% of the properties bought and or sold by Asian or foreign buyers can completely manipulate the prices of real estate in this country. Canada is and has been “SOLD OUT”!

What an ugly little blog we have today. — Garth

#84 Happy Apartment Dweller on 07.23.13 at 11:32 pm

I am also one of the ones that believes that the numbers of “HAM” investors are a relatively small percentage of the buyers during the insane period (2006-2012) in Vancouver.

Personally, I believe one just has to look at the people around them and around their neighbors and work colleagues, and ask who has been doing all of the buying in the last 5 years.

In my case, when I answer that question, most of the buyers fall into two categories…the young house horny and the dumb boomers. I know many boomers who now own multiple properties as a result of the buying binges that they have been on. One or two of them is starting to smell a rat and thinking of bailing so it’s going to be interesting to watch it play out. Most of them can’t stomach the thought of bailing at a loss. We’ll see what they think in a couple or four years.

#85 Son of Ponzi on 07.23.13 at 11:32 pm

Of course, Crispy Clark is pandering to the Asian community with now accounts for over 60% of the Lower Mainland’s population.

If a majority are in one community, how is it ‘pandering’? Is it not democracy? — Garth

#86 Son of Ponzi on 07.23.13 at 11:36 pm

Most developed countries have some sort of restrictions on foreign RE ownership.
What makes Canada so special?
Oh, I forgot we have unlimited space.

#87 Son of Ponzi on 07.23.13 at 11:43 pm

#51
Bang on.
Many foreigners use numbered companies to buy property.
They are rich, because they know how to hire the best lawyers and accountants.

If you think hiring expensive lawyers and accountants makes you rich, you’ve obviously never been there. — Garth

#88 Nosty in MadVladLand on 07.23.13 at 11:48 pm

-
SMan – Seen these? Concerns Hastings (murdered) and Snowden, who has (apparently) spilled the beans on a lot of the NSA’s secrets.

Hastings was about to reveal a whole pile of stuff (which explains the convenient accident). Snowden got wind and ran like a crazed divil. How many more whistleblowers are working for the gubmint? Fun times, no!

#89 devore on 07.23.13 at 11:48 pm

You can see how much HAM there is by looking in Richmond. Entire areas were bid up and bought out by speculators, razed down and replaced with monster houses. But there is no one to buy them. So I guess there was not that much HAM after all.

#90 timmy on 07.24.13 at 12:06 am

What difference does it make if they came over recently of if they were born here? Bottom line is they’ve driven the price of real estate through the roof and Garth is too much of a wimp to take this on

People buying real estate on the open market in an open country? What, exactly, do you want me to ‘take on’? – Garth

#91 Nemesis on 07.24.13 at 12:23 am

…”…how is it ‘pandering’? Is it not democracy?” — Garth

Right verb… wrong subject.

Oherwise… Yep. The BestDemocracy MoneyCanBuy.

http://vreaa.wordpress.com/2011/03/01/52-backed-by-real-estate-analysis-of-contributions-to-campaign-of-christy-clark-new-leader-of-the-bc-liberals/

#92 Donald Trump on 07.24.13 at 12:34 am

#78 grasshopper on 07.23.13 at 11:14 pm

Is “drug money” the missing link in BC?

====================================

Naaaahhhhhh

The fact that the Gov’t disbanded the Ports police and we have a Major Hells Angel’s influence is no cause for concern.

#93 retired WI Boomer on 07.24.13 at 12:38 am

Garth-

Your second to last statement was BEST.

“If you want lower house prices, people, stop buying.”

Very Correct !!!!!!! They’ll break like a FEVER.

#94 No-debt McDuffy on 07.24.13 at 12:46 am

Seems I’m going to have to have another little chat with my Chinese buddy Woo about his real estate investments. Now, not only is he missing out on some serious ROI for his erroneous ways and foolishly insisting prices will always rise (and losing the bet), he’s part of the reason prices have gone stupid. (In jest Garth, I read the article)

Dunno what it is about these Asian guys that are born in Montreal, but it seems you just can’t tell ‘em anything. Even when you show them on paper that they have actually been losing money over the last year or so, they just won’t give up that lust for residential dirt.

Just another Canuck living the dream. Toss him a couple hundred bucks to fly around in a helicopter for an hour or two and look the part, and I can guarantee he’s in.

#95 Nemesis on 07.24.13 at 12:47 am

One last… While we’re on the topic of democracy…

Who said this last week:

“America does not, at the moment, have a functioning democracy.”

Hint: #39… Used to farm peanuts.

#96 veej on 07.24.13 at 12:49 am

I showed you my numbers. Now show me yours. Link for ‘at least 70% on the buy side’ being Chinese? Otherwise we’ll think you made it up. — Garth

Your “numbers” come from the real estate cartel. The same group that for years you have been telling us are a bunch of liars. Suddenly we are supposed to believe only this number because it supports your misguided opinion?

I see. You made it up. — Garth

#97 CanSpeccy on 07.24.13 at 12:52 am

To evaluate the effect of foreign investment, isn’t it necessary to consider what proportion of sales, as well as purchases, are by foreigners?

If foreign buyers are accumulating 6% of all Vancouver RE offered for sale, that would surely have a significant impact on prices. But if for every foreign buyer there is a foreign vendor, then the foreign interest in the market will affect prices little if at all.

#98 Dienekes on 07.24.13 at 12:54 am

Corrupt Asians parking money in Overpriced illiquid depreciating realestate under the names of distant relatives (effectively giving the money away) to launder money, instead of parking it in liquid sheltered offshore accounts to be invested.
That is the stupidest thing I have ever heard.

Truth- a bunch of dumb white people in Vancouver overpaid on housing.

#99 JWD on 07.24.13 at 12:58 am

A friend bought a lot and built a spec house in west van a few years ago. He was highly recommended to get advice from a fung shei consultant. Sure enough the buyer was Asian and the price was appropriately loaded with 8’s. Quick sale and I think he was fortunate and timed the market well. Stats can always be deceiving and flawed as you point out Garth. Those stats are completely out of whack with what you see on the ground in certain communities such as the west side, west van, richmond etc. Certain other areas, delta, surrey, perhaps closer to your 6%, maybe less. I would have thought that number would be higher, but again, I think the numbers are flawed somehow. Who buys 900k houses on less than 100k household income? Hmm…

Either way, the gigs up. The market is tapped, rates are rising, people are highly leveraged. The flippers are gone. Real buyers only. We shall see….

#100 nancy on 07.24.13 at 1:04 am

What is RE Board’s definition of foreign buyer? visitor’s visa? student visa? not Canadian Citizen? applying for landed immigrant status? Wife and kids in Canada, but husband in China working?
BTW, many buyers from China do take mortgages on homes because they can’t transfer funds in one transaction.
All EVERY buyer that is looking in West Vancouver are non-english speaking Chinese. I haven’t asked to see a passport, but I can assure you that they have some foothold in Canada.
I heard that one buyer from China purchased 10 properties over $1m in West Vancouver within 1 week.
Another buyer from China purchased presale units on Granville Street and 68th.
I have to rethink my opinion of you Garth. You should know better than to believe those RE stats.

#101 FYI on 07.24.13 at 1:04 am

Something to consider….
When we sold our home a few years ago, a young professional couple showed a great deal of interest and made a few visits. The agreed to a price and to buy our place (verbal) and at the last minute, when we were going to get our lawyers involved and sign the papers (private sale) they told us they were no longer able to purchase the house. They were very apologetic and explained that the house was never for them, but that they were purchasing homes for relatives in the middle east. These homes were put in these Canadian’s names, but were being financed by their non-Canadian relatives. So statistically, it would have shown our home had been purchased by Canadians, when in fact that was not the case. Perhaps there is a lot more of this going on than we know? This couple indicated they had purchased homes often this way. They can’t be the only ones doing this?

Something certainly seems askew, when I see more and more development and homes selling fast and for outrageous prices. The stats regarding medium income also seem off….otherwise, how are people managing to pay their bills? It doesn’t add up.

#102 nancy on 07.24.13 at 1:05 am

Another buyer purchased 49 presale units on Granville and 68th.

#103 Beck on 07.24.13 at 1:06 am

#35 veej

I wonder the same.

I will accept that the number of off shore investors is low. But that leads to the question, how are vancouverites getting approved for mortgages on 900k when only making 70k and having neg savings?

So if it’s not off shore investors driving up prices, and it’s not locals…. It seems there is more going on here.

Garth I would appreciate some deeper digging as even you would have to wonder how locals could be getting approved for 900k houses on 70k salary and no savings. I suspect it is a combination of many factors, much like what happened to Detroit, not just one silver bullet. I suspect locals being approved for more mortgage than they should, off shore investors, drug money, as well as various other reasons I’m unaware of, are all working together to drive up prices.

It can’t simply be locals, there has to be a multitude of factors.

More importantly, What is gov doing to prepare for when the major driver of the economy stops? What innovation are we building in our economy to replace housing when the party is over? I guess one might start by putting lots of money and tech into our education system…. Oh scratch that let’s cut funding and hope for the best.

#104 Rob aka Captian and Mrs Slow on 07.24.13 at 1:43 am

Better than buying a house why not retire at 30

Why not Retire at 30

#105 Yitzhak Rabin on 07.24.13 at 1:44 am

The Manitoba Real Estate Association just deleted the column in their statistics showing average historical prices in 2012 and 2013. Data for Brandon is missing since March.

http://www.realestatemanitoba.com/statistics.htm

#106 bob on 07.24.13 at 1:47 am

Garth – this post is not useful today, because I have no idea what it means (or what you reported on what the real-estate reported on) “foreigner” means.

In many cases, e.g. the Chinese husband works overseas and the wife and kids stay in Canada. This would be your anecdotal HAM… but would it qualify has as ‘foreigner’?

Also, I don’t know the data but estimate that ethnic Chinese in Vancouver to be ~17% (from Wikipedia). So clearly, 6% ‘foreign’ purchases is no small chump change.

#107 bob on 07.24.13 at 2:27 am

Let’s just do some math.
Assume 2000 units sold in vancouver
there are some 20 ‘neighborhoods’, so each area has 200 sales. Assume 4 of the 20 hoods are highly desirable by the HAMs, so the 6% of all sales clustered in those areas.

4/20 * 2000 = 400 sales
6% * 2000 = 120 sales

This still says 1/3 houses sold will be to foreigners
and that’s assuming your 6% properly counts foreigners.

#108 JuliaS on 07.24.13 at 2:43 am

“Currently 88% of all real estate buys in the region are being made by people who live there.”

Have you ever been to Richmond? 88% of people who live there are Chinese. On a weekend, try spotting a non-asian person at any public place. You’ll find 10 Waldo’s and a dozen Carmen Sandiegos before you spot a single non-asian person anywhere in the city.

You cannot separate ethnicity from nationality, can you? — Garth

#109 JUNO on 07.24.13 at 3:03 am

#2 Leon Sam on 07.23.13 at 7:03 pm

First!

But in all seriousness most of the chinese/asian people who buy live here. Its in our culture to save money.
=====================

Totally agree with you most of my asian friends have hedged their bets and have 2 to 4 homes. Even now they feel the prices have only one way to go and that is UP UP and UP. As long as the banks will loan their money, they feel its a good opportunity to be “ALWAYS”

With the Asians coming into Canada(especially BC) the move here and may get a half ass job somewhere where it doesn’t pay them tons of cash (paved with gold). But when they realize the taxes are at 40% and up compare to the measley 5 to 15% from their hometown, the soon realize one thing about our Socialist government. “You can’t get rich in Canada”.

Ontop of that our GST and PST are extremely high compare to China or HK or Singapore or Japan. That is why there are empty houses own by these type of foriegners. If we had jobs which pay well then you’ll see them live and stay.

They are only interested in the following, free education and heath care, especially pregnant women.

#110 JUNO on 07.24.13 at 3:13 am

Also note if Foriegners bought houses in Canada they would of taken a loan via US Currency. Note US Currency has gone up compared to Canada, that means they would of lost a good 10 to 15% on the exchange already

#111 R on 07.24.13 at 3:28 am

No asian is going to throw money just like that even though money is coming through corruption . Asian don’t want to spend if they don’t See profit.
This is pure house hornyness and bellif that house price always goes up. Harper govt used debt as an vehicle to get out of recession. It worked. Now it’s time for correction and after few years cycle will continue

#112 raisemyrent on 07.24.13 at 3:34 am

#83 – very true, and most of them “bought” with mortgages that they cannot afford in the long term.

#85 – don’t forget negative population growth (including immigration)

#113 Future Expatriate on 07.24.13 at 3:45 am

Yes indeed, illicit drug money fuels the BC economy, and just WAIT until California legalizes pot (inevitable AND soon.)

You want to talk about a boom going bust.

#114 Andrew Woburn on 07.24.13 at 4:01 am

I have lived in Richmond, Vancouver and West Vancouver since the eighties and this is my personal experience with HAM.

In the 80’s-90’s I lived in Richmond and knew various ethnic Chinese “astronauts” who had moved their families from the Philippines, Taiwan or Hong Kong. They mainly did business in Asia or, in some cases, also had operations in Toronto. To a man, they told me it was impossible to make money in Vancouver but they wanted their families to live there for the education, because there was a strong base of Chinese culture and because they really lived in Asia and it was quicker to get to Vancouver than Toronto or New York. Most of these people considered themselves as small businessmen but since they paid little or no tax, were insanely rich by our standards. They were landed immigrants but their money didn’t land with them.

We also knew a few Iranians who were escaping the Iran-Iraq conflict. Some were so rich they thought nothing of buying a West Vancouver luxury property as a local base that they never really lived in and then a waterfront condo for their teenagers to live in while they finished high school. Canadians have no concept of the wealth people can accumulate in Asia when they don’t pay taxes. I met other Iranians who owned major office blocks and their women only bought clothes in Paris.

Recently in selling a tear-down in West Van, I interviewed several prominent Chinese realtors. They all had the experience of serving Mainland Chinese buyers who had bought six to 20 properties in a single buying trip. The one I chose told me I had missed the peak in spring 2011 and that Mainland interest was waning because of price escalation and competitive US opportunities. However she said that original Chinese immigrants to Richmond had acclimatized and were getting over their reluctance to cross bridges and were beginning to be interested in West Van as they could sell their Richmond properties to Mainland Chinese for a good profit. She showed us a new listing she had in West Van for a new house at $5 million. While we were looking around it, two thirty-something Chinese couples showed up to look around. Within two days, one of them bought the property before it was officially listed.

We wound up selling our property not to Chinese but to Iranians who tore it down and built a 7,000 sq ft property valued at $5.0 million. HAM is not just Chinese. There are also 30,000 Iranians on the North Shore. Every day you walk on the West Van seawall, you also hear Russian/East European accents.

Does HAM influence price in Vancouver? Of course. In real estate as in trading a public company, very little of the total stock trades at any one time so price/value is set by the last buyer on small volumes. HAM may be a small portion of total volume but it sets the price at the margin and since HAM has much deeper pockets than overtaxed natives, HAM wins.

#115 Anonymous on 07.24.13 at 5:42 am

I know few people, who are studying in a college/university or working in a job after his studies in Toronto and their parents bought them a house, first for their sons to live in and second as an investment outside their country. I don’t know in which category does this money classified as in the statistics, foreign or not?

#116 Dean Mason on 07.24.13 at 5:47 am

To Mark #69

Fixed rate mortgages are funded and track benchmark Canada and U.S. bond market yields not the Bank of Canada rate and U.S. Federal Reserve rate.These two central bank rates affect the variable mortgage rates in Canada and U.S.

This is why you have not seen variable mortgage rates rise in the last 7-8 weeks unlike fixed rate mortgages have risen 30 to 60 basis points depending on the term and lender.Understand what different interest rates,bond yields are and how they affect mortgage rates before you make such comments.

It’s not only variable rate mortgages,variable rates for line of credits,certain credit cards,prime rates and certain other variable rate loans.

#117 Ballingsford on 07.24.13 at 7:04 am

Garth, I love the pic today; kitten escaping from the aliens!

Makes me want to run away and escape the blog dog alien posters on this site today.

Are there a lot of posters from BC today/last night? Kinda seems like they’ve had a bit too much BC bud. BC = British Cannabis

#118 T.O. Bubble Boy on 07.24.13 at 7:15 am

@ #87 devore on 07.23.13 at 11:48 pm
You can see how much HAM there is by looking in Richmond. Entire areas were bid up and bought out by speculators, razed down and replaced with monster houses. But there is no one to buy them. So I guess there was not that much HAM after all.
________________________________

Yep – and Midtown/North Toronto is next for a glut of unsold McMansions.

#119 Mr. Frugal on 07.24.13 at 7:24 am

If you want lower house prices, people, stop buying.
====================================

This line says it all. If you want prices to go down stop buying! If houses are too expensive, don’t buy. If Leaf Tickets cost too much, don’t buy. The only reason things are expensive is because we spend too much money on crap that we don’t need in the first place. To make matters worse, we’re willing to go into debt to do so. If we would all spend less, save more and invest wisely prices would drop and the consumer would have the upper hand.

#120 Work&Tumbel on 07.24.13 at 8:26 am

Smoking Man post #21

I agree with your post a 100% (that’s a first)

#121 Ralph Cramdown on 07.24.13 at 8:34 am

“If we would all spend less, save more and invest wisely prices would drop and the consumer would have the upper hand.”

What’s a wise investment in a depression? Since your spending is my income, unemployment spikes if we all spend less.

#122 al on 07.24.13 at 8:38 am

http://www.cbc.ca/news/business/story/2013/04/18/biz-real-estate-foreign.html

More real estate marketing designed to motivate you to intolerance, and a purchase. How’s that working for you? – Garth

#123 Steven on 07.24.13 at 8:40 am

In many countries in the world foriegners may not buy real estate with out becoming a citizen of the country in question. Instead such foriegn residents must rent.
Why should Canada be different? Canada for native born Canadians only.

My wife’s parents immigrated from Europe in the 1950s. No house for them? — Garth

#124 craig on 07.24.13 at 8:42 am

Why does the average detached house cost $796,182 in Toronto, and $919,900 in Vancouver? After all, who can afford them?

================================

If you applied the same logic regarding house prices in Canada, to stock market prices, you’d be screaming SELL!

The DOW, in just over 4 years, has gone from an all time low, to an all time high and that’s ok?

House prices are correcting slowly, as we speak but the DOW just continues to surge ahead.

The DOW is insane but people keep pouring their life savings into it, thinking it’ll just keep going higher and higher…

Sound familiar?

A Market meltdown is coming….stay tuned.

http://finance.yahoo.com/echarts?s=%5Edji+interactive#symbol=^dji;range=20000721,20130722;compare=;indicator=volume;charttype=area;crosshair=on;ohlcvalues=0;logscale=off;source=undefined;

Markets have recovered to 2008 levels. Meanwhile corporations are far more robust and profitable, while central banks have coordinated global monetary policy. What meltdown? — Garth

#125 JustTryingToProtectEquity on 07.24.13 at 8:56 am

JustTryingToProtectEthnicity

We are a nation of immigrants. We all came from somewhere else.

The issue is historic low interest rates, fast talking realtors and collective medias (that are losing their subscriber bases) that now rely on realtor/bank
advertising to stay afloat.

It is the perfect storm.

And, like during the Great Depression, it causes certain people to point their fingers… and blindly blame other ethnicities for our collective problem…

Debt.

#126 Bucky on 07.24.13 at 9:08 am

The posts with alternate definitions for BC make a point. BC is neither British nor Columbian. British Honduras changed its name to Belize, maybe time for BC to update as well. Hmmm, Condominia, Remaxstad, Debtistan?

#127 Morgan on 07.24.13 at 9:12 am

Faced with statistics that it’s not ‘foreign people’ people shift to focusing on ‘foreign money.’ So…. if I liquidate my Chinese stock holdings and buy real estate, am I bringing in ‘foreign money’? Or does it only count if I’m an immigrant from China who still has business holdings there? I think racism is overwhelming even a basic understanding of how global economies operate.

#128 JimH on 07.24.13 at 9:18 am

Canadians were once recognized throughout the world for their tolerance, sense of fairness and inclusiveness.

Perhaps many of the vitriolic posters above need to reexamine what it means to be a Canadian. There once was a time when it meant more than beer, hockey, cheap anti-Americanism and irrational xenophobia.

Laurier and Macdonald must be weeping.

#129 Kyle on 07.24.13 at 9:19 am

Someone may have already noted this, but wouldn’t the Asian woman in the video who moved here 5 years ago and has bought up 3 homes count as the 88% of ‘local buyers’? What’s the criteria for defining a ‘local’, or how many new sales are second or third homes?

If I had to guess, I’d say a large portion of the real estate insanity here in Vancouver is associated with stuffing your money under a mattress, only instead of a mattress, people (local, newbies, foreigners) are using a house. Probably not a good investment strategy, but it might be for those with little trust in Banks and then Chinese government…

We’re moving to a new place next week – We’re renting – One of the best locations in Vancouver, close to great shops / schools, 4 bedrooms, front and back yards, nice and bright, 2 car garage (I don’t have any cars), and likely in the $1.5M range if I were to purchase it. Instead, I’ll be paying $2250/month and saving the left-overs. We’re adapting nicely to the new renting paradigm, but it’s still concerning that the real estate market here in Vancouver is the way that it is because the entire City is dependent on this sector and if/when the house of cards collapses or people’s debts catch up to them, I can’t help but feel I’ll be on the hook for bailing them out…

#130 calgary rip off on 07.24.13 at 9:53 am

Garth have you ever been to China? Think of all of Canada’s population in one city. There are certain things that are severely punishable in China and given there are so many people, the culture is very very different than Canada. The Chinese you see here that are from the mainland must be extremely accomplished because everywhere there the society is extremely competitive. For example, try playing Xiangqi or Wei-chi against an amateur in China. Chances are you will lose. Their style is very very different, non confrontational and the message is only revealed at the very end of the game. I have played many games with mainlander Chinese on the internet and the majority of them, I lose, because their thinking style is incomprehensible. http://www.wuzheng.me <<<wei-chi site free where I play. As one guy put it: "To the average Chinese, your life is like Heaven. Come to China, and know real stress." Or, another player, "You have two eyes, two hands, two feet, what is your excuse?"

The severity of China is shown clearly by the idea that if you sign up to sell a kidney, say to get an I phone, once you sign, you cannot change your mind. Under the knife you go.

So given severe circumstances, to mainlander Chinese the house prices in Vancouver or Toronto or anywhere for that matter are not daunting. It is a matter of perspective. You may as well just say that all of Canada is a total rip off, including Saskatchewan now as well. There are job postings in Saskatoon for jobs that no one wants because the housing is 2.5 times what the true value is. Who would move there to pay that? But for immigrants who may view opportunity as both crisis and danger with opportunity intermeshed, all of these values said by Canadians as important go out the window. I remember finding it ridiculous how Canadian workers feel they have power as unions to force negotiations on the employer, laughable in fact. Try that in the USA or in China.

In Canada life is like paradise: Clean water and air, reasonable food costs. The only thing ridiculous is housing. And the argument that you can force house prices down by not buying is nonsense. Try doing that in Calgary where rents are the same as a mortgage and there are no rental controls, good luck.

Better advice would be: If you can afford to buy given rate increases and you will still qualify for renewal and you will be in the place more than 10-15 years, do it. Dont wait in hopes that prices will come down because in Calgary you will wait forever.

#131 Ralph Cramdown on 07.24.13 at 9:57 am

“Laurier and Macdonald must be weeping.”

Probably. MacDonald enacted the head tax in the Chinese Immigration Act of 1885. Maybe that isn’t what you meant to say?

#132 Ralph Cramdown on 07.24.13 at 10:07 am

“Condominia, Remaxstad, Debtistan?”

Greater East Asia Co-Prosperity Sphere

#133 Iconoclast on 07.24.13 at 10:09 am

If the stated percentage of foreign buyers is six percent, the real figure is certainly higher.

Student-visa holders buying 1M+ properties are certainly foreign-funded, but are probably counted as local.
Nothing nefarious about that.

No doubt there are genuinely shady money-laundering purchases too.
No problem. I say take their money. I won’t shed a tear for them if they lose 50%.

But even six percent of buyers is certainly enough to swing the prices
at the margins significantly… and anyone else who buys at the inflated prices
are likely going to get burned, badly.

Perhaps intervention is warranted, perhaps not, but it is important to really understand the issue.

#134 Tim on 07.24.13 at 10:23 am

I think the truth is probably somewhere in between the two extremes views. There has undoubtedly been some false advertising, trying to panic middle class Canadians of all ethnicity into buying. However, the Chinese only signs in Richmond, BC are strong evidence that that culture has taken over there. Six percent would not have the political pull to have store signs in their language and exclude the official languages here. I have experienced it in Vancouver where Canadian(of all ethnicity) culture also takes a back seat. If you want to rent a house on the west side, you will be renting from immigrant Chinese who don’t speak English and are very rude. I have been turned away at a restaurant in Kerrisdale because I was not Chinese. I have patients bringing their mom’s to my office where the child is dressed in designer clothing and bragging about their new Mercedes while “mom”‘, who doesn’t speak english is collecting disability. There really are two problems. One is dishonest realtors and hype, the other is allowing people to buy their way into the country without contributing to our society.

#135 blase on 07.24.13 at 10:29 am

#112 Andrew Woburn

Well said.

Vancouver has been sold to the highest bidder. That highest bidder just happens to be boatloads of Hong Kongers who arrived after 1997, followed by waves of Mainland Chinese, as well as plane loads of Iranians, Seikhs, and Pakistanis.

I don’t have a problem with immigrants coming to Canada who take jobs that need filling. Sparrow dad in Asia with family in Canada? Not good for Vancouver in the long run, but great for a run up in house prices in the last 10 years.

Mark my words, when the CMHC blows up in a couple years, there will be a trail of dirty mortgage loans that will be on a Countrywide USA scale. Easy money with horrific results.

#136 blase on 07.24.13 at 10:33 am

Calgary Rip off, Nice post too!

#137 chumpay le chump on 07.24.13 at 10:34 am

i live in West Van, and i have noticed in my son’s school how the demographic has changed. there are many new Chinese and Iranian families- also, many UK, Aussie, and South African. It’s way more than 6% of the class.

there are 4 houses for sale on my block here in West Van. we close on a place in September- it was for sale for almost 1 year and paid 25% below list. i fully expect no real return on this house for at least 10 years.

#138 craig on 07.24.13 at 10:36 am

#128 calgary rip off

Good post.

#139 Muzzdl on 07.24.13 at 10:36 am

Garth,

All of the alien talk is a distraction. The real story has to be that housing in Canada (in General) and especially in Toronto and Vancouver is out of proportion with salaries. There is no reason to sacrifice 50% of take home money for 30 years or so just to “buy” a house. The only way to stop this insanity is for people to refuse to pay this extortion to the developers and banks.

#140 al on 07.24.13 at 10:50 am

http://manhattanmiami.com/resources/foreign-buyers-guide/

http://www.teamdirect.ca/foreign-buyers-guide

Canada looks a better place to buy real estate if you are a corrupt foreigner

How do either of those links suggest anything ‘corrupt’? — Garth

#141 The Prophet Elijah on 07.24.13 at 10:52 am

•Real estate is making us intolerant.
——————————————————–
And insolvent.

#142 Bob on 07.24.13 at 10:53 am

All of this – “are Chinese buying up Vancouver or not” – is a waste of time.

The reality is that a great deal of the high priced sales have been by ethnic Chinese. I don’t think that there is any question by those who live in Vancouver or know it well. Hell, even the ethnic Chinese themselves know that.

Most of these purchases have been made by newly granted “Permanent Residents”. It is ridiculously easy to get your permanent residency to Canada if you have money.

So all the facts and figures that Garth told at us tonight are a waste of time. The new Asian immigrants are technically Canadians. New Canadians with lots of money.

The truth is, if you have money, you can easily buy your way into Canada. Regardless of how you made your fortune abroad -usually in low tax collecting countries.

However, if you are an applicant for permanent residency and all you have is a desire to work hard and try to get ahead, good luck. The doors are closed. Only the rich need apply. Check the immigration laws.

So, this is not a question of weather the Canadian Government should restrict real estate purchases to Permanent Residences. Rather we should examine our immigration laws. Our current laws have their pros and cons. Pushing the price of real estate up in cities like Vancouver is one of the consequences.

Canada ended the investor/entrepreneur/self-employed immigrant program. Your statement that it is ‘ridiculously easy’ to become a permanent resident is false. Try a little research. — Garth

#143 Gyga on 07.24.13 at 11:01 am

“In Canada life is like paradise”

That sounds like Ministry of Immigration propaganda when they print their rozy pamphlets, rlfmao
Wake up, people
I know tons of people who can’t wait to go back
The days of old good Canada are gone.
Slavery is not the option

#144 Cory on 07.24.13 at 11:03 am

Garth, I agree with most of your commentary and logic on housing/real estate. However, this is not going to end regardless of what ‘should’ be happening. Canada is on the world radar for a housing bubble and all that the pond scum and gov’t can do is brag to the world how solid Canadian real estate is.

I am sure you read how Canadian retail sales surged last 1/4 even though household debt went with it, again. The debt part isnt talked about though and neither is the 96 month payment plans for new vehicles which were a big part of the rise.

Basically, the govt, and their pond scum friends, will keep this illusion of health and economic strength going likely well past our remaining time on this earth, or at least until after the next election!

#145 craig on 07.24.13 at 11:06 am

Folks it’s simple; if you think housing or anything else is too expensive – DON’T BUY IT.

Everything sells for the price that people are willing to pay. End of story.

You think AAPL is way to high at $442 – don’t buy it.

I don’t get the obsession with people constantly complaining about house prices. So rent – good for you.

I may think a Kia at $30K is a rip off but a Mercedes at $100K is a good deal.

My money, my debt, my call…. that’s life man.

#146 sebastian on 07.24.13 at 11:22 am

Garth, your numbers are horsecrap and completely unreliable. The numbers come from the buyers “telling” the realtors where they are from. There is nothing “official” about it.

When your chums in the CONS Who Only Serve US hand out citizenship and immigrant status to every corrupt official, drug dealing, human trafficking, sweatshop owning piece of scum from China who asks. Who then set up their wife in a 2.888 million dollar shack on the west side with a 20,000 dollar a month allowance, send little Ping off to Crofton House and get back to the homeland to do some serious money making.
While of course never declaring their offshore income to Revenue Canada. OF course making sure they secure their health care cards and that passport.

Who makes out? The real turds and their commissions. (only chinese speakers need apply) The property tax pigs at the city of van, The Mercedes dealers. The Piaget store. Hermes. The Jewellers. You know. Real people.

Having lived in the University Endowment Lands, Southlands, Dunbar and Mackenzie Heights over the past 15 years and been front row center for this whole spectacle…ghost houses, unfriendly-non social neighbours -wait its Vancouver.. Its always been like that- non English speakers out the wazoo, 17 year olds driving 300k cars, white kids sharing stories of mass segregation at the high schools (recent immigrant Asian kids not socializing with lower class white scum)

To read your pronouncement of it all being hogwash from your 55th floor office in Hogtown is really sickening. Are you still just a flunky for the Cons selling the masses the same race baiting pablum of not confronting and god forbid actually documenting who is buying real estate in this country. Where are they actually from, Where do they get their money, where are they actually domiciled, Where are they paying taxes- or more importantly, where are they not paying taxes-

Or are these questions just too sensitive to ask from a government that apparently has given up on its own citizens. Farming out hundreds of thousands of low wage jobs to desperate third worlders, attacking science and technology with the bible and theology and the only job creation is in the tars sands, selling mortgages and selling out the land to highest bidder. No questions asked.

So knock yourself out with this comment. Im sure it either ends up not being published or if you have the guts…will add some glib little bon mot intimating that I am conspiracy nut or racist or whatever. Could care less. The country is filled with people just as deluded to the realities as you are. Its why I left. Good Riddance, right?

Absolutely. That was nauseating. — Garth

#147 Foggy on 07.24.13 at 11:24 am

Asian buyers in US:

http://money.cnn.com/2013/07/08/real_estate/chinese-homebuyers/index.html

#148 Canadian Watchdog on 07.24.13 at 11:31 am

Below is Q2 YoY dollar volume for GTA’s largest 20 subdivisions by volume size.

YoY % | Subdivision | Town/City

-15.3%__Waterfront Communities C1 __Toronto (C01)
-7.0%__Patterson __Vaughan
-16.4%__Sandringham-Wellington __Brampton
+9.8%__Churchill Meadows __Mississauga
-5.2%__Fletcher’s Meadow __Brampton
-1.0%__Vellore Village __Vaughan
-16.5%__Unionville __Markham
-14.8%__East Credit __Mississauga
-0.1%__Niagara __Toronto (C01)
-1.3%__Hurontario __Mississauga
-30.5%__Old Oakville __Oakville
-4.3%__Erin Mills __Mississauga
-3.7%__Maple __Vaughan
-16.0%__City Centre __Mississauga
+9.5%__Central Erin Mills __Mississauga
+5.3%__Meadowvale __Mississauga
-4.3%__Meadowvale Village __Mississauga
+2.3%__Jefferson __Richmond Hill
+4.5%__Lisgar __Mississauga
+13.4%__South Riverdale __Toronto (E01)

#149 Penny Henny on 07.24.13 at 11:40 am

CURRENTLY 6% from out of the country.
3 years ago that number may have have been 3 times that.
Which would have made it very significant then.

Penny Henny

The numbers were almost identical at that time. — Garth

#150 walltiger on 07.24.13 at 11:41 am

Chinese, Iranian,Russian, let them come and overpay the house for their kids and wives. Some Canadians benefited, no? They could go work elsewhere and not pay tax, fine. People will make wealth where they can. Their kids will grow up to be Canadian, the will not go back to China, Iran or Russia. They will work, pay tax, raise family in Canada, just like any “older” Canadians. People, stop being myopic in your thinking and reasoning and look further down the road.

#151 Mike on 07.24.13 at 11:48 am

#122 craig on 07.24.13 at 8:42 am
Why does the average detached house cost $796,182 in Toronto, and $919,900 in Vancouver? After all, who can afford them?

================================

If you applied the same logic regarding house prices in Canada, to stock market prices, you’d be screaming SELL!

The DOW, in just over 4 years, has gone from an all time low, to an all time high and that’s ok?

House prices are correcting slowly, as we speak but the DOW just continues to surge ahead.

The DOW is insane but people keep pouring their life savings into it, thinking it’ll just keep going higher and higher…

Sound familiar?

A Market meltdown is coming….stay tuned.

http://finance.yahoo.com/echarts?s=%5Edji+interactive#symbol=^dji;range=20000721,20130722;compare=;indicator=volume;charttype=area;crosshair=on;ohlcvalues=0;logscale=off;source=undefined;

Markets have recovered to 2008 levels. Meanwhile corporations are far more robust and profitable, while central banks have coordinated global monetary policy. What meltdown? — Garth
———————————————————

It is not the sheer rise in price of an asset, in and of itself, that is the problem. The problem is housing has risen in price much farther and faster than incomes. If housing was previously severely under priced, and experienced a period of growth faster than income in order to catch up, then valuations would be fair.

In the stock market, valuations are base on earnings. P/E ratios look fair, meaning you are likely not over paying for stocks. This is based on historical metrics. Housing on the other hand is much higher than incomes, above historical metrics, suggesting it is overpriced. When you analyze the price of an asset, their prices are always relative to some other metric. A rise in price, in and of itself, does not indicate anything at all.

#152 Intuitive Missus on 07.24.13 at 12:00 pm

From today’s Globe & Mail.

“A new poll suggests that more Canadians are in debt this year and taking longer to settle their accounts.

The study released Wednesday by the Bank of Montreal found that 83 per cent of Canadians surveyed admit to having some form of debt, an increase from 74 per cent a year earlier.

But the poll also found that the average amount of monthly debt repayment has fallen by 13 per cent from a national average of $1,138 to $986. Regionally, those in Alberta had the highest amount of debt payments each month at $1,225, while those who live in Quebec reported the least amount at $768.”

#153 Penny Henny on 07.24.13 at 12:02 pm

if so many of the homes (house/condos) weren’t held by so few then why is it so cheap to rent in Vancouver??
I hear comments like a $1.5 million house renting for $2500/month and it makes no sense.
If that $1.5 million house was in Toronto you would expect $5000 +.
Many investor types in Vancouver. Prices could easily drop. But one thing is for sure, their problem has nothing to do with the Toronto market at the time being, maybe slightly with condos but nothing to do with HOUSES in the 416.
So c’mon people keep buying. I want to see a nice rise in price over the next year (when I plan to sell, and move to smalltown Ontario).
Penny Henny

#154 bill on 07.24.13 at 12:09 pm

Hey mark better clean your glasses…
garth wrote:
like they have in Australia (one of the less tolerant places on the planet)
NOT :
“like they have in Australia (one of the more racist places on the planet)”

Upon reflection and further research, I moderated the post. The R-word was too evocative. — Garth

#155 Bob on 07.24.13 at 12:14 pm

#140 “Canada ended the investor/entrepreneur/self-employed immigrant program. Your statement that it is ‘ridiculously easy’ to become a permanent resident is false. Try a little research. — Garth”

——————————————————–
Actually, the investor/entrepreneur/self-employed immigrant program has only been “paused”. Due to the fact that there are so many of these applicants already backlogged in the system.

As well, the Family Reunification route for obtaining residency is alive and well. So, among the hoards of investor class residents that have recently arrived, the family applicants related to those new residents and the backlog of investor class immigrants still in the system, there still exists plenty of ways for the wealthy applicant to get into Canada and buy Vancouver homes.

#156 AK on 07.24.13 at 12:18 pm

#138 al on 07.24.13 at 10:50 am

“Canada looks a better place to buy real estate if you are a corrupt foreigner.”

====================================
Al,
I will schedule some therapy for you with DR. Wayne.

#157 Old Man on 07.24.13 at 12:20 pm

I find it somewhat ironic that a pending Real Estate crisis is being blamed on a particular ethnic group. Canada is a country that welcomes all from a historical prospective which made us strong, so why are we now turning the tables? This is negative beyond the pale, and the frustration is nobodys fault but your own, so stop looking for others to blame. Always remember what Caesar did, as he was the one kicking you fools under the bus to follow the herd for buying Real Estate debt with a hidden political agenda, so you are pointing the finger in the wrong direction.

#158 Daisy Mae on 07.24.13 at 12:23 pm

Retirement Planning

If you had purchased $1,000.00 of Nortel stock one year ago, it would now be worth $49.00.

With Enron, you would have had $16.50 left of the original $1,000.00.

With WorldCom, you would have had less than $5.00 left.

If you had purchased $1,000.00 of Delta Air Lines stock, you would have $49.00 left.

But, if you had purchased $1,000.00 worth of wine one year ago, drank all the wine, then turned in the bottles for the recycling REFUND, you would have had $214.00.

Based on the above, the best current investment advice is to drink heavily and be sure to recycle.

#159 bill on 07.24.13 at 12:31 pm

What an ugly little blog we have today. — Garth

you said it man!
the neighbours around my parents place [57 and granville ]
look a lot like they might be of Chinese ancestry .
conversation with them soon reveals that most of these people are canadian born and bred.
and if they were not their children certainly are.

#160 :):( Ying Yang on 07.24.13 at 12:33 pm

Regarding the above statement, its true. HAM rocks Vancouver. I am of Asian background (Hong Kong) and I have friends and relatives that have property in Vancouver. We even call it Hongcouver! It is insane as most of the people we know how own property have only ever been there once to sign papers and then leave. Property managers take care of the real-estate locally. It devalues the local economy as a lot of these properties are vacant. There is no profit to be made in local businesses as empty homes and condos don’t purchase bread, milk, eggs, vegetables, petrol, new televisions, etc. They also use less energy as most of them are on minimum values for climate control with almost zero usage on water. I know of at least 50 people that have property in Vancouver and do not rent it out. It just sits there vacant. I know why HAM is used here as back in the East you never know when your business could get nationalized or your bank account suddenly seized for taxation purposes. The economy over there is dynamic but risky. Big risks mean large gains and large losses. What can I say land is very important to the culture. I was raised here in Canada and only went back to University in Hong Kong for education. Parents wishes! My brother moved back there and has great opportunities in the Banking Industry, which by the way is the only business in Hong Kong. He does programing and makes great cash but can not afford property there so he purchased property in Vancouver. He rents out and never comes here to see it. It is his retirement home that is all. Myself I can’t stand Vancouver for its crazy traffic and everything is so expensive including real-estate although it isn’t much better here in the GTA!

#161 Blacksheep on 07.24.13 at 12:48 pm

Uh Oh Canada # 66,

Was at a BBQ last weekend, chatting with a friend of
a friend. It’s interesting what people will share with a stranger after a few beer.

As of April 1 2014, all current legal grow licences expire. Of the current 26,000 licences, half are located in BC.
This means nobody will be able to legally grow MJ, in any home or in any small industrial space in Canada.

The Gov. of Canada is changing the growing process
to a limited number, of commercial only operations.
It will be: Large scale, high security, fully inspected
and of course fully taxed under the Gov’s new watchful eye.

It is considered medicine, after all.

The impact of this change cannot be understated. This
is going to take multi millions in cash now spent, out
of the economy in the lower mainland. This action is
also expected to push the cost of the commodity up significantly.

How many 1000s of homes and commercial bays,
are currently used to grow MJ in Vancouver and
the Valley?

#162 Nemesis on 07.24.13 at 12:49 pm

@SmokingMan/#21…

NiceOne [and also/especially your recent practice in crisis intervention]…

[NoteToGT: Editorially speaking, there is a vast chasm separating "nauseating" from polemic/candour... more to the point, why is it that Dr. SmokingMan's new-found practice is burgeoning? Food for thought.]

#163 Donald Trump on 07.24.13 at 12:53 pm

Warning to all police, firefighters, schoolteachers: Most government pensions to be confiscated within a decade

http://www.thetruthseeker.co.uk/?p=75725

Yes, Detroit owes former government employees — teachers, firefighters, cops and more — a whopping $3.5 billion in current and future payments. Except Detroit doesn’t have $3.5 billion to pay the pensions. The city is in a state of economic collapse. Remember, the U.S. government used billions in taxpayer money to help General Motors move its manufacturing offshore to countries like China. As a result of economically-insane actions and criminal mismanagement, a city that used to be the hub of industrial output in America has become a ghost town of abandoned buildings, crumbling infrastructure and financial destitution.

But even as all this was becoming apparent, the government workers there continued to collect fat paychecks and pensions, all based on the promise that endless population growth would out-pace the rise in pension obligations. Many pensioners are owed over $100,000 a year from the government, and this is true across California, Illinois and many other states as well.

Chicago, for example, owes $19 billion in pension payments that it doesn’t have, and the city of Los Angeles is more than $30 billion in the hole. The story is much the same in every major U.S. city.

As the Detroit Free Press now reports:

Early this year, the Pew Center released a survey showing that 61 of the nation’s largest cities — limiting the survey to the largest city in each state and all other cities with more than 500,000 people — had a gap of more than $217 billion in unfunded pension and health care liabilities. While cities had long promised health care, life insurance and other benefits to retirees, “few … started saving to cover the long-term costs,” the report said.

Read that report here:
http://www.pewtrusts.org/uploadedFiles/wwwpewtrustsorg/Reports/Retire…

#164 Gold Forever on 07.24.13 at 12:55 pm

There are 65,000 thousands Chinese students studying in Canada. The aggregate spending of the Chinese students is $6 billion dollars, most of them goes to tutition.

Free education, eh?

#165 45north on 07.24.13 at 1:01 pm

Happy Apartment Dweller: I know many boomers who now own multiple properties. Most of them can’t stomach the thought of bailing at a loss.

Right now it would be a small loss – say 10% of the purchase price but they will hold on until it’s a bigger loss. Like what happened in the US.

#166 craig on 07.24.13 at 1:03 pm

#149 Mike

then valuations would be fair.
===================================

Fair to who Mike?

What is a fair valuation?

Like I said it’s all relative. You think the price is too high, others don’t.

So it is fair to them , no?

“”In the stock market, valuations are base on earnings. P/E ratios look fair, meaning you are likely not over paying for stocks. ”

You’re kiddin’ right?

#167 frank le skank on 07.24.13 at 1:19 pm

Considering the context of this blog I’m not sure what everyones point is regarding the amount of foreign buyers. So lets say 90% of the RE sales in BC are foreing buyers. Do you think that this will shelter BC from a crash? Do you think it’ll make the crash worst? Do you think the average prices of a house in Vancouver will always be higher because of all the foreign buyers? Do you think foreign buyers will bail when they find out Canadian RE is going down?

#168 :):( Ying Yang on 07.24.13 at 1:22 pm

#1 Smoking Man on 07.23.13 at 6:57 pm
What is this, Bond Yields Dropping as per my Batman call.
http://www.bankofcanada.ca/rates/interest-rates/canadian-bonds/
Vegas on Thur dogs, will be posting Pics and comments on my shit blog. Defiantly some post here too.

Smoking Man I just returned from Las Vegas yesterday, four days of 40+C temps. Hot as Hell, stayed at Aria full comp. I suggest the Carta Privada near the Main Cage on the casino level. Great table games and the girls are quite nice. Did not come out with a ton of cash but my win-loss statement for the year is OK. Did a tour out on Mount Charleston Monday and later some idiot hiker got stuck and they sent the police chopper out to save him. Poor officer fell couple hundred feet and died trying to rescue this guy. We were there when it happens. Sad ending to a nice day. Don’t drink too much Smoking Man. My advice is spend your money and nothing more. Spend it all and have fun. When your done, your done! My other advice is don’t let girlfriend or wife ever take control of your cash! My girlfriend spends it all and then come to me looking for more cash. I can always get another girlfriend but the cash is a little harder to get.

#169 Paul Caple on 07.24.13 at 1:25 pm

I live in London uk, we bought a house in a less salubrious part of south London last year for $850000can. I am certain the quality of our purchase is less that one could get in Vancouver for the same price. We bought because renting sucks in the UK. The bubble here has been far worse and it has not deflated – yet.

#170 Ralph Cramdown on 07.24.13 at 1:33 pm

“[...] Canada looks a better place to buy real estate if you are a corrupt foreigner”

How do either of those links suggest anything ‘corrupt’? — Garth

With respect, if you’re not corrupt, your money is clean and you’ve no plan to live in either place — i.e. from a pure investment standpoint — US real estate is currently a much better bet than Canadian. It’s undervalued versus our current overvalued state, you can get a 15 or 30 year mortgage with the rate locked for the term, but with a ‘free’ option to refinance should rates go down, versus Canada’s five or ten year terms with horrid early break fees, US cap rates are higher, and the investment is denominated in the world’s reserve currency rather than a commodity based petrodollar.

Canada’s purported housing bubble ain’t exactly a secret in publications a worldly investor would be likely to read, e.g. the South China Morning Post or the Economist. So who exactly would pick Canadian over US real estate as a foreign investment assuming equal access to either market? I never assume that people who’ve amassed significant wealth are stupid. Some are, but that isn’t the way to bet.

#171 Bill on 07.24.13 at 1:36 pm

Fair enough Garth .

I apologize to mark for my comment.
it would seem we are on the same wavelength after all.

#172 Ralph Cramdown on 07.24.13 at 1:38 pm

#162 Gold Forever

Dude, that’s $100,000 per year per student. Even driving the obligatory C Class and going to med school, it’d be hard to blow through that kind of dough and keep your grades up. I think your numbers are off.

#173 calgaryPhantom on 07.24.13 at 1:41 pm

Returned from a 2 week vacation in US. Travelled 4 different states.

Every time i travel outside Canada, i realize how much ‘house stupid’ people are here. We pay so much and yet live in a shoe box. And not just house, all other daily ‘stuff’ is also so expensive. And taxes too.

Why am i staying in Canada again?

#174 Ralph Cramdown on 07.24.13 at 1:42 pm

Yo, how come the BoE gets Sense and Sensibility and this blog gets Pride and Prejudice? Just wonderin’

#175 Future Expatriate on 07.24.13 at 1:43 pm

#144 PLEASE tell us you DIDN’T move to the US, but instead some lovely south of the US border beach haven which will soon have the de rigueur lovely little communist revolution and be hacking all the rich and highly stupid xenophobe expats and their blond blue-eyed kids to pieces.

#176 OK Kingpin on 07.24.13 at 1:52 pm

The data.. its all about the data, whoever owns the most data manipulates the market to suit their needs.

http://mayer320.wordpress.com/2013/07/17/have-you-considered-the-data/

#177 Godth on 07.24.13 at 1:57 pm

Am I the only one who remembers the buying spree the Japanese went on in the 80’s? How did that work out? @ short-memories.

#178 Ahead of the Curve on 07.24.13 at 2:08 pm

I just can’t believe how racist some of the comments are… It’s unbelievably sad. Stop blaming this race or that race for your own lack of wealth and self worth.

Is there anything stopping you from moving overseas? Or have you become so entitled that when you see demonstrations of wealth by other people, your first instinct is to attack them because they are different? Shame on you.

Here is the reality of the world. It’s becoming increasingly complex, and the work force is more educated and mobile. Obviously China will stand out because of sheer population numbers alone:

http://thelearningcurve.pearson.com/index/index-ranking

Now stop complaining. We have no one to blame!

#179 al on 07.24.13 at 2:11 pm

“..I know why HAM is used here as back in the East you never know when your business could get nationalized or your bank account suddenly seized for taxation purposes..”

here you said it, hence even if the value goes down 30% it’s still a “safe heaven” and who cares if it’s rented out and such

#180 Timing is Everything on 07.24.13 at 2:41 pm

#158 :):( Ying Yang – “…it isn’t much better here in the GTA!”

Good post. It may be worse in GTA, though.

Where would you draw the borders for a congestion charge zone in Toronto?

http://tinyurl.com/lm3rcj8

Of course, the new ‘tax’ will just go into the general revenue pile.

Garth, may soon have plenty of room to ‘4×4′ in downtown t.o. with the Hummer as more plebs pack into the subways and trains.
————————————-
As an aside, where is that infamous video of Rob Ford? Oh wait…

http://tinyurl.com/kgsb57p

I hope this post is not too evocative and will make the grade.

#181 D.D. Corkum on 07.24.13 at 2:50 pm

I’m surprised at the intollerance that some commenters display whenever Garth does a blog on this subject. Some of the comments ignore total common sence.

Garth, I’m sometimes suprised you keep doing this when you have to face such crazy resistance. Keep up the good fight.

#182 craig on 07.24.13 at 3:08 pm

#171 calgaryPhantom

And not just house, all other daily ‘stuff’ is also so expensive. And taxes too.

Why am i staying in Canada again?
=====================================

Lots of room in Detroit for a nice fellow like you.

Enjoy!

#183 Gold Forever on 07.24.13 at 3:12 pm

#170 Ralph Cramdown on 07.24.13 at 1:38 pm
___________________________

Overall, the total amount that international students spend in Canada ($8.0 billion) (My note: most of this is from Chinese students).

http://www.international.gc.ca/education/assets/pdfs/economic_impact_en.pdf

#184 nancy on 07.24.13 at 3:18 pm

#144 sebastian on 07.24.13 at 11:22 am

I agree with every word! It is obvious there is so much public discontent with our system as it is. Something needs to change. As you can tell, there is hostility and anger not towards a certain ethnic group, but towards our lax Government’s rules. People are angry at the fact that hard working Canadians are struggling to put a roof over their heads, yet our Government is turning a blind eye to new immigrants enjoying what our country has to offer while earning tax free dollars offshore and driving up the cost of living here. Garth, if only you spent a week in Kerrisdale, Oakridge, or Richmond you would know what it’s like. I would vote for whoever “fixes” this system which is so sadly broken.

#185 Ralph Cramdown on 07.24.13 at 3:24 pm

#176 Ahead of the Curve — “Stop blaming this race or that race for your own lack of wealth and self worth.”

That’s a nice league table, Curveball. How about this one?
http://cpi.transparency.org/cpi2012/results/
If somebody arrives from mainland China with a suitcase full of cash, it likely isn’t from honestly running a most excellent and efficient roadside vegetable stand. Theft, bribery, fraud and corruption are endemic.

Translation: if someone has more than me, they must have cheated. That’s noble. — Garth

#186 elchavo on 07.24.13 at 3:25 pm

“The media should be ashamed of itself. Honestly.”

January 2013
Canadians are paying off their debts faster, with the number of those more than three months behind on loan payments dropping to a record low, according to a report Thursday from Equifax Canada.

http://www.cbc.ca/news/business/story/2013/01/24/business-equifax-debt.html

July 2013
12% more Canadians have debt this year, BMO says

http://www.cbc.ca/news/canada/story/2013/07/24/business-bmo-survey.html

Brutal, brutal, brutal…

#187 Evangeline on 07.24.13 at 3:32 pm

in case anyone is interested, “Assembly” is an excellent Chinese movie that you can watch in full on youtube for free. be sure to put “captions on” so you can follow the English subtitles.

http://www.youtube.com/watch?v=aNIiBy_Z2Ag

#188 brainsail on 07.24.13 at 3:38 pm

“Overseas wealthy slow purchases of US real estate”

http://www.cnbc.com/id/100910782

#189 Old Man on 07.24.13 at 3:38 pm

I will never forget the day decades ago landed in Albuqerque, New Mexico at the Holiday Inn. This is when I had my first real Mexican food, and the waitress was bringing water all the time. I stayed for a couple of days as had a nice mountain site while kicking back at the pool, and at night was chasing a few gals :). I met this cowboy on a trip by the pool; a simple man, and said what do you do for a living? He said not much just shoe horses, so said what does that pay, and he said $100 a horse and do a couple a day. I learned a lesson as this was big money, so one never knows where a good career is hiding in life. Take note, as the hidden jobs pay the most.

#190 Bill Grable on 07.24.13 at 3:42 pm

A new poll suggests that more Canadians are in debt this year and taking longer to settle their accounts.

The study released Wednesday by the Bank of Montreal (TSX:BMO) found that 83 per cent of Canadians surveyed admit to having some form of debt, an increase from 74 per cent a year earlier.

But the poll also found that the average amount of monthly debt repayment has fallen by 13 per cent from a national average of $1,138 to $986. Regionally, those in Alberta had the highest amount of debt payments each month at $1,225, while those who live in Quebec reported the least amount at $768.

ps. Noted – the Chinese coming to Canada are from Mainland China – Hong Kongers have moved on.

Link: http://tinyurl.com/lmx8l7y

#191 Smoking Man on 07.24.13 at 3:46 pm

#160 Nemesis on 07.24.13 at 12:49 pm

Bit of a conspiracy theory in your last post,

I got Google, know what you said..

Ying Yang, I spend what I spend. If I need more just few clicks on phone. Desided to bring one of my kids too, now that mom and dad are full blown lushes, need someone to carry us home. Much better than the other way around.. , if you dogs can put the dots together..

#192 craig on 07.24.13 at 3:53 pm

#184 elchavo

” Meanwhile, the Bank of Canada on Tuesday downgraded its economic growth outlook for the country to 1.9 per cent for 2012 and to two per cent for 2013, both three-tenths of a point lower than previously forecast.

The central bank says as a result, interest rates will be kept lower for longer due to the weak economy.”

==================================

No more rate hikes, summer is ending so the slow period for RE ends….away we go.

The current low RE prices won’t last for ever renters. Better get out there and put an offer in, cause prices are going back up ;)

PS – The US GDP number comes out July 31st.

Guesses anyone?

#193 30 days moving average applied to Toronto RE stats -see the results below on 07.24.13 at 4:01 pm

Just ignore the pile of crap that was posted in response to my work

Please tell me what you think. Does it look reliable to you ?

http://forums.redflagdeals.com/statistical-mirages-applicable-re-prices-stock-market-1363692/3/#post17168079

See more explanations on that webpage

My conclusions:
1 detached 416 homes -declining
2 detached 905 homes -steady
3 semi-detached 416-steady
4 semi-detached 905 -UP!!!, going up like crazy!
5 condos 416 -giving up
6 condos 905 -going down in panic, note that the average price converging with the median price!!! that means that the more expensive units are being discounted and they are reaching the median that is moving UP slightly because more expensive condos are joining the “average” pack in term of prices !

#194 cc on 07.24.13 at 4:25 pm

Garth,

I find it interesting that you didn’t respond to the very reasonable and astute comment #112 by Mr. Woburn. His experience reflects my own. While anecdotal evidence must be viewed with caution, it should not be ignored.

I have heard from someone directly involved that virtually all of the large house/lot sales in the British Properties (above the highway in West Vancouver) are to Chinese nationals (not ethnic Chinese) over the past several years.

As for your statistics (and as others have pointed out), they are likely quite flawed. The databases that have been compiled rely on people self-identifying as Canadian residents when they purchase. This information may say very little about where the money came from to make the purchase.

I abhor some of the racism expressed in the comments and find it repugnant. I have no racial preferences, for my neighbours or otherwise. What I do care about are distortions in the local real estate economy brought on, in part, by investors bringing in money from outside the country. I don’t care what colour, creed or religion these people are if they live hear, contribute to the economy and pay their fair share of taxes in Canada. Property taxes are but a small portion of the revenue needed to support the Canadian social safety net. Those who rely on our education, heath, etc. systems should contribute to them according to their ability.

As a country and, more importantly, as a community we want people who are going to live here and contribute (regardless of their ethnicity). We don’t want people who are gaming the system, or parking their money somewhere safe or speculating on real estate. Rules to prevent this behaviour aren’t xenophobic (though they can be). They are something to preserve the health and viability of our communities.

As someone pointed out, foreign money is either a part of the real estate problem or it isn’t. If we impose regulations to make our real estate less attractive to foreign money (not immigrants or people who are of different ethnicity), then we will surely see the answer in short order.

And, yes, before you reiterate it, I accept that locals also bear responsibility for the real estate situation in Vancouver. We continue to buy and pay increasingly inflated prices because we love it here. And what is resulting are overleveraged families and people under significant financial pressure. F has done his best to address some of these issues.

Hopefully you apply the same indignation to the untold thousands of Canadians who have bought property in the US recently. They make their money here, buy there and pay no American income tax. I trust you have the same message for them, as you do for the Vancouver Chinese you identified. “As a country and, more importantly, as a community we want people who are going to live here and contribute (regardless of their ethnicity). We don’t want people who are gaming the system, or parking their money somewhere safe or speculating on real estate. Rules to prevent this behaviour aren’t xenophobic (though they can be). They are something to preserve the health and viability of our communities.” If not, you are a hypocrite. — Garth

#195 al on 07.24.13 at 4:27 pm

no worries, more buyers are coming over with their filthy bribe money:

http://money.cnn.com/2013/07/24/news/companies/glaxosmithkline-china-impact/index.html

You have a problem. It’s not China. — Garth

#196 TnT on 07.24.13 at 4:34 pm

#182 nancy

Canada has always been and will forever be a Colony Country.

After the American Revolution our forefathers handpicked immigrants from Britain and Scotland to be subservient to the Crown. This was done to prevent another revolution. From there our mantra was to never show too much pride as Canadians so we don’t upset and sabre rattle with Britain or the boisterous and proud Americans. We kept Canada clean and efficient, producing / farming like little bees for Britain and America’s consumption.

Now as Canadians we do not reproduce enough worker bees to prop this economic pyramid therefore we need immigration.

Visualize 1.4 BILLION Chinese and 1.2 BILLION Indians

Visualize 35 MILLION Canadians spread out across the 2nd largest country in the world with all our untapped resources.

Visualize the top 1% richest families in Canada and imagine the conversations and planning they have regarding how we are going to keep this farm producing, maintain current profits and cover our Baby Boomer debt obligation.

Imagine if we had 60 MILLION Canadian worker bees running this farm instead of 35 MILLION… that would produce a lot of honey for the coffers. Enough to sustain profits and pay out the debt obligations for the “Baby Boomer” bees and keep them from protesting when they retire.

#197 Donald Trump on 07.24.13 at 4:41 pm

#158 :):( Ying Yang on 07.24.13 at 12:33 pm

Your story truly struck a chord in me.

I just love the individual , and classic story of immigrants, of how they overcame trials and tribulations, numerous hardships and , via their perserverance, were able to overcome the odds, build a future for their family and be a part of our multicultural mosaic.

Truly ,TRULY inspirational.

#198 Sign of the times on 07.24.13 at 4:43 pm

The madness continues in BC. Friends just closed on a home in Burnaby (BC) at upwards of $950k. In our conversation with them they mentioned that they had approximately $200k saved, so I’d expect the mortgage to be in the $750k range by the time you count closing costs and some renos which “have to be done”. She’s a teacher ($60k?) and itching to start a family and he’s a Shoppers Drug Mart franchisee that takes home upwards of $200k but, with the recent purchase, I’m assuming there’s some insecurity there. Just another anecdote…I must be missing something…

But are they Chinese? — Garth

#199 cc on 07.24.13 at 4:44 pm

oh, and as a specific example of bright foreigners gaming the system, i believe i read a short while ago about a practice of purchasing real estate through a trust or some sort of investment vehicle as a way of avoiding the property transfer tax. when the property is sold, the trust/vehicle is sold and the title technically doesn’t transfer (hence not triggering the tax). for some reason, i recall the article saying this loophole is only open to foreign investors. i may have the details wrong. and there is no doubt that Canadians investing abroad take advantage of similar loopholes.

my basic point is just that we need to be cognizant of ways in which our system is being “gamed” by foreign money leading to undesirable results and we need to put in place rules to stop this behaviour. if we want our real estate to be occupied and paid for by residents that contribute equally to our economic system, we should make it so. this isn’t racist at all. it is the regulation of actions, not ethnicity.

You have no idea what you are talking about. — Garth

#200 al on 07.24.13 at 4:46 pm

“You have a problem. It’s not China. — Garth”

the problem is that the real issue of foreign money flow into canadian RE is not being adequately addressed.

if the drug cartels start sending money to the Mexican students to buy up 1000s of condos in Toronto, would it be an issue or is it ok?

funny thing is, it probably would be ok, since many here would benefit.

so far there is no serious data on how much and what kind of foreign money gets put into RE in Canada.

because the banks, the agents, the contractors etc. are loving it.

#201 cc on 07.24.13 at 4:57 pm

Garth, there is no need to throw around words like “hypocrite”. it might fire up the readers but it debases the discussion.

for the record, i do think investors anywhere should follow the rules of where they are investing (and this would include Canadians in the US). what we are discussing is what the rules should be in our community.

my point, and the point of many others, is that it is not intolerant or racist to consider policies that attempt to correct market distortions caused by foreign money coming into the community. my further point is that the statistics cited in your report do not really tell us that foreign money is not a significant part of the problem (as you claimed).

the fact that this entirely reasonable discussion degenerates into ugly, racist remarks and, on the other hand, holier-than-thou sanctimony (and a refusal to seriusly consider the problem) is very unfortunate.

#202 Contrarian on 07.24.13 at 4:57 pm

Hi Garth,

Isn’t 6% foreign ownership kinda high? That’s enough to affect prices, I think. And those able to invest in foreign countries aren’t going to buy among the lowest priced real estate, either…

#203 cc on 07.24.13 at 5:03 pm

Garth, now you are embarrassing yourself. Does Mr. Cayo know what he is talking about?

http://www.vancouversun.com/opinion/columnists/Cayo+Loophole+helps+money+property+buyers+duck/8241427/story.html

The only element missing from this article that a 10 second google search turned up is the foreign angle. I may have been wrong about that but i’m not going to take the time to research it. Suffice it to say that foreign investors can (and do) also use this loophole.

Being glib doesn’t do you any favours.

Of course bare trusts exist, and have for years. Saying they apply to foreigners only is, as I said, incorrect. — Garth

#204 Bargains everywhere on 07.24.13 at 5:03 pm

Garth, the ‘racist’ label you drag out every time someone doesn’t agree with you is getting tiresome. It’s not about race or ethnicity, it’s about foreign money, regardless of where it came from. I’m sure that if it were Americans or British or Australians coming here and bidding up the price of real estate to the point that local families couldn’t afford it we would be equally disturbed.

Canadians are currently doing that very thing in Phoenix. We are bringing our foreign Canadian dollars to the US and bidding up housing prices as they are so cheap compared to Canada. If Americans don’t like it, are they racist?

And calling Australia one of the less tolerant places on the planet is really quite offensive. I could probably name at least 100 countries that are less tolerant than Australia. Check the human rights violations around the world before you make a comment like that.

For example, here’s a beauty this week from Dubai. A Norwegian woman who was raped and reported it to authorities ended up getting charged and sentenced for 16 months for having sex outside of marriage. Nice.

http://www.washingtonpost.com/world/middle_east/dubai-pardons-woman-charged-with-illicit-sex-after-rape-claim/2013/07/22/25e91322-f2b2-11e2-8464-57e57af86290_story.html

There are many, many countries that I would be quite fearful to live in as a woman. Australia would never be one of them.

Almost 90% of real estate sold in BC is bought by Canadian residents. Try blaming the right people for high prices. — Garth

#205 craig on 07.24.13 at 5:05 pm

Garth, time for a new pic / a new blog, me thinks. This one has been flogged to death and is just going in circles.

My .02;

As far as I’m concerned, we’re all immigrants in Canada.

The Asians have just as much a right to buy in Vancouver or Toronto or wherever in Canada they please.

It’s called Freedom.

#206 Ahead of the Curve on 07.24.13 at 5:08 pm

#183 Ralph Cramdown on 07.24.13 at 3:24 pm
——-

Did you read that website you sent? Notice that Hong Kong is less corrupt than the U.S. or the UK?

But perhaps you were referring to mainland China, which is also ahead of countries likeGreece and Mexico (whom we have a free trade agreement with).

Corruption exists everywhere, but don’t let that be the reason why you are poor!

#207 cc on 07.24.13 at 5:19 pm

Oh and one last point, Garth.

This from a CBC article regarding restrictions on foreign ownership of real estate (I am assuming you accept this as a source). After a discussion of those intolerant Australians (or is it racist Garth?), and those nasty Swiss (also racist Garth?), the author mentioned the ownership restrictions put in place in China:

China

China imposed new restrictions on property sales in 2010 — for locals as well as foreigners — in order to curb rising prices and real estate speculation. It raised down payments, tightened mortgage rules, introduced property taxes in several jurisdictions where they did not exist and put in place new limits on ownership.

Foreigners can own only one residential property for their own use (permanent residents are restricted to two properties).
Foreigners must reside in the country for one year before they can buy property.
Foreign companies who buy commercial real estate must use it themselves

While the Chinese government shouldn’t be held up as a paragon of virtue, it is somewhat ironic that Chinese citizens are engaging in economic behaviour in Canada that Canadian citizens could not do in China.

We live in an open, free and democratic country, despite what you wish. — Garth

#208 Nemesis on 07.24.13 at 5:25 pm

@SmokingMan/#189

Nope. No hidden meanings or fringe thinking… Just solid social science.

What I was tangentially referencing with regard to your “burgeoning practice” in crisis intervention is something called anomie. A term coined by the BabyDaddy of sociology… Émile Durkheim – whose early investigations into the causal linkages between suicide rates and HardTimes kick started the entire discipline.

Robert Merton would subsequently refine and expand upon Durkheim’s work to develop “Strain Theory”… sometimes also referred to as anomic strain.

Basically, for social scientists the study and understanding of anomie is akin to the attention that the engineering disciplines devote to materials and their response to harsh conditions.

I know a little bit about anomie… Here’s a good place for the curious to begin:

http://en.wikipedia.org/wiki/Anomie#Social_disorder

@Ralph/#172

Whether it’s Sense&Sensibility or Pride&Prejudice…

MarkTheCarney’s got you covered either way with his new Tenner…

http://mobile.bloomberg.com/news/2013-07-24/jane-austen-to-appear-on-new-10-pound-u-k-banknote.html

#209 Ralph Cramdown on 07.24.13 at 5:27 pm

So now you’re saying that everyone in the lower mainland should have to endure the effects of speculative asset bubbles driven by foreign cash so that some Canadians can enjoy foreign second homes or investment properties? I think you’re losing the common touch, GT.

As I’ve said, I’m not convinced either way on the effects of foreign cash. But I think it is our duty and obligation to ourselves to find out, and take action if necessary, regardless of what other countries will or won’t allow Canadians to buy. That is their policy and their perogative, and this should be ours.

#210 jess on 07.24.13 at 5:29 pm

disclosed vs actual
http://www.sec.gov/news/press/2011/2011-267-chart-subprime-exposure.pd

Subprime Exposure: Misleading Statements
FOR IMMEDIATE RELEASE
2011-267
===
The testimony of Thomas J. Miller (Miller, 2007), Attorney General of Iowa, at a 2007 Federal Reserve Board hearing began by describing the Gresham’s dynamic that the interaction of accounting control fraud and modern executive compensation produces:
Over the last several years, the subprime market has created a race to the bottom in which unethical actors have been handsomely rewarded for their misdeeds and ethical actors have lost market share…. The market incentives rewarded irresponsible lending and made it more difficult for responsible lenders to compete. Strong regulations will create an even playing field in which ethical actors are no longer punished. (p. 3)
Despite the well documented performance struggles of 2006 vintage loans, originators continued to use products with the same characteristics in 2007. (note 2

http://backbillblack.com/the-best-way-to-rob-a-bank-is-still-to-own-one-a-postscript/

http://www.businessweek.com/articles/2013-05-30/daniel-mudd-fannie-maes-former-ceo-is-doing-awesome

http://projects.propublica.org/bailout/list

#211 jess on 07.24.13 at 5:33 pm

from the best to the worst

http://www.salon.com/2013/07/18/ayn_rand_killed_sears_partner/

#212 rosie "moving forward" on 07.24.13 at 5:35 pm

No matter the ethnicity or nationality of resent house buyers anywhere in Canada. The message of this blog is that they are all greater fools.

#213 Ralph Cramdown on 07.24.13 at 5:44 pm

#204 Ahead of the Curve — “But perhaps you were referring to mainland China, which is also ahead of countries likeGreece and Mexico [on the corruption index]“

China’s economy is seven times Mexico’s and 25 times Greece’s. Last I checked, Mexico and Greece were both democracies without currency controls, travel restrictions on citizens and massive state censorship and dissent suppression apparatus. But hey, business is business, right? You’ve got to kiss a lot of ass if you want permission to rent a pair of pandas…

#214 craig on 07.24.13 at 5:48 pm

UNBELIEVABLE!!

RED WINGS’ NEW ARENA STILL IN WORKS DESPITE CITY BANKRUPTCY

LANSING, Mich. — A state board on Wednesday unanimously gave the go-ahead for a new Red Wings hockey arena in downtown Detroit to be paid for in part with tax dollars as the broke city works through bankruptcy proceedings.

Fifty-six per cent of the overall project cost is private and 44 per cent public.

$650 million project – 44% taxes = $286 Million

I wonder what the pensioners think?

#215 Bargains everywhere on 07.24.13 at 5:50 pm

Almost 90% of real estate sold in BC is bought by Canadian residents. Try blaming the right people for high prices. — Garth

Yes, we get that. But what I’d really like to know is where the money came from to buy it. Was it earned in Canada or was it transferred in from a foreign country? The statistics you cited don’t really say one way or another. I wish there was some way we could find out.

I also have my own anecdote of foreign money in Canada. A girl I worked with had a Chinese boyfriend who came to university in Toronto and his parents back in China bought him a luxury condo here to live in. He was a Canadian resident but it was foreign money.

If we all have anecdotal stories like this then certainly there must be at least ‘some’ truth to it. I’m not sure why you have such a blind spot about it.

#216 Bargains everywhere on 07.24.13 at 5:52 pm

And by the way, there is nothing racist about this. They were friends of mine. I’ve been to his condo and it was beautiful.

Now that was funny. — Garth

#217 calgaryPhantom on 07.24.13 at 6:06 pm

#180 craig

And not just house, all other daily ‘stuff’ is also so expensive. And taxes too.

Why am i staying in Canada again?
=====================================

Lots of room in Detroit for a nice fellow like you.

Enjoy!

=====================================

I’ll tell you a secret. Detroit was big during/after World war. Today it’s a bankrupt state.
But i guess being an old guy, you still think Detroit is the place to be. Just like your age fellows recommend buying real estate.

#218 TakingResponsibility on 07.24.13 at 6:09 pm

Interesting – that meme of “tolerance”…..

It seems as though Canadians are very welcoming and tolerant to all newcomers as according to ‘official Canadian governmental websites’; we welcome approximately 250, 000 new “citizens” every year. Citizenship, off course, allows one the right to vote and the right to serve in military and other secure nationalistic duties.

And, it is worth noting that almost every departmental website is particularly very welcoming and very tolerant to people entering the housing market.

Especially CMHC.

Somehow CMHC has morphed into the Immigration department and is now the “go to resource for all your housing needs” (website quote.)

In six different languages no less. (website: “Housing for Newcomers.”) So nice and tolerant.

Note that the Canadian national housing insurers is Not just for new ‘citizens’.

CMHC will insure anyone with a permanent resident card, too. And, really, one never needs citizenship.

Website quote: “CMHC is Canada’s leading mortgage loan insurer. We have helped newcomers with permanent resident status become homeowners with a minimum down payment of 5% – regardless of how long they have been in Canada. Nonpermanent residents can also purchase a home with a minimum down payment of 10% of the value of the home.”

Yes indeed. We Canadians are very very helpful and welcoming. Tolerance galore.

I don’t know….. Investor program, schmogram….who cares. What I care about is how many permanent residents and non permanent residents’ homes the Canadian Public is insuring.

And, how that contributed to bubbly.

#219 Donald Trump on 07.24.13 at 6:18 pm

#202 Bargains everywhere on 07.24.13 at 5:03 pm

Garth, the ‘racist’ label you drag out every time someone doesn’t agree with you is getting tiresome. It’s not about race or ethnicity, it’s about foreign money, regardless of where it came from. I’m sure that if it were Americans or British or Australians coming here and bidding up the price of real estate to the point that local families couldn’t afford it we would be equally disturbed.

==================================

I have the “All In The Family ” DVD complete set.

From that, I have the de facto quasi Oxford certifiable idioms that apply to all diverse groups under the multicultural rainbow.

PS…Oh yeah? same to you ya $#%* $##@+

#220 CalgaryRocks on 07.24.13 at 6:25 pm

We live in an open, free and democratic country, despite what you wish. — Garth

I wish to buy my car in the US and also, while I’m there sign up with a US phone carrier. I want Hulu and US satellite service.

Then, I would like to do some major renos on my own house without having to ask a bureaucrat for a billion permits.

I would like to do all that from Canada, the free and democratic country.

#221 jess on 07.24.13 at 6:30 pm

http://billjohnsondetroit.com/blog_detail.php?id=371

Or, just note that Detroit is the largest city in a state that, according to the New York Times, spends more per capita on corporate subsidies — $672 or $6.6 billion a year — than most other states.
http://www.salon.com/2013/07/23/dont_buy_the_right_wing_myth_about_detroit/

#222 cc on 07.24.13 at 6:41 pm

nice work spiking my last comment. your name calling and actions reflect very poorly on you, Garth. beware of hubris.

You are obsessed. Go walk the dog. — Garth

#223 Timing is Everything on 07.24.13 at 6:57 pm

#212 craig – I wonder what the pensioners think?

Remember The Big Owe…

‘What Will Last Longer: The New Red Wings Arena Or Its Debt?’

http://tinyurl.com/kv5rp9r

#224 CrowdedElevatorfartz on 07.24.13 at 7:07 pm

Wow!
talk about tossing gas on a fire!
This whole “us vs them” reminds me of a conversation that i had with my semi-sober Uncle about 10 years back.
We were all sitting around the Sunday dinner table and he started ranting about “people from away” (as all non Prince Edward Islanders are referred to), driving up the real estate prices. Since I was living in Burnaby at the time AND I had recently purchased a cottage in PEI ….. I automatically fell into the “foreigner” designation.
I asked him ” How much is your 5 bedroom house worth?”
“$150k” , was his reply.
“How much do you pay in property tax?” I asked sweetly.
” $650.00 per year” , he grunted.
“Well, my cottage is worth $80k and I pay $1400.00 per year in tax! Double tax because I’m a non resident! And i’m here maybe 1 month out of twelve. So next winter when the roads are being plowed, and the garbage is being collected……… Thank ………Me.”

The entire room made less noise than a yard full of crickets

#225 Spiltbongwater on 07.24.13 at 7:14 pm

Does anyone know if Rose Li is single, and how I could make contact with her? Seems like she has some money.

#226 jess on 07.24.13 at 7:14 pm

…that surveys show more Americans prefer lice and colonoscopies over their elected lawmakers in Washington, the results, or lack thereof, speak for themselves.

http://www.publicpolicypolling.com/main/2013/01/congress-somewhere-below-cockroaches-traffic-jams-and-nickleback-in-americans-esteem.html

#227 Freedom First on 07.24.13 at 7:18 pm

Garth, thanks for your figures on the % of not Canadian born purchasing RE. I figured as much. I just listen to all the house horny/house obsessed Canadian born over the years to realize Canadians are as house horny as the rest of the world, and speaking of the rest of the world, we have had the opportunity of watching there RE crashes, and yet, many Canadians learned nothing. Balance, re-balance, diversify, liquidity, or suffer the consequences. And there will be consequences. No exception………sooner or later. Garth writes his free blog to try to save people from the many disaster scenarios which destroy your financial health. Over concentration in RE being the biggest wealth destroyer by far. By the way Garth, I never thanked you for the TFSA yet. Thanks, I make full use of it. I read your blog for quite a while before I started commenting. Made me think you had too many readers who took your advice to heart and were dismayed at the constant idiocy that you replied to with such patience and tolerance and kindness. I am learning from that, slowly, to try to practice the “Golden Rule” with all people. Fortunately for people it is very good that you write a blog like this and not me. I would have gotten into big trouble:) ….Freedom First.

#228 mark on 07.24.13 at 7:24 pm

After these comments can I also assume Canada is one of the most racist countries on earth?

#229 jess on 07.24.13 at 7:34 pm

Swiss Bank Leaker: ‘Money Is Easy to Hide’

….
SPIEGEL: The United States has taken tougher action against Swiss banks. Should the EU follow that lead?

Falciani: At first glance, that appears to be true — the US, for example, imposed a heavy fine against HSBC for money laundering. But I was surprised that the American authorities decided HSBC was “too big to jail” — in other words, they shied away from imposing prison sentences on bank managers, although it’s hard to imagine that top-level managers knew nothing of the bank’s systemic participation in money laundering.

SPIEGEL: How so?

Falciani: The MIS Global Technologies computer system alone, which makes it possible to use a form of double-entry accounting to conceal illegal income, costs several million dollars. Such investments are approved by a bank’s most senior managers.

SPIEGEL: Could you give us a dumbed down description of how money laundering through double accounting works?…

http://www.spiegel.de/international/business/interview-hsbc-swiss-bank-whistleblower-herve-falciani-on-tax-evasion-a-911279.html

=
Sm)art Investing: Rich Move Assets from Banks to Warehouses
By Christoph Pauly
Geneva Free Ports & Warehouses Ltd

…” $4 trillion nvested in “treasure assets,”

warehouse space -Swiss military bunkers blasted deep into Alpine rock are in great demand. But the free ports in Geneva and Zurich are even more popular because they offer what Swiss banks used to: the freedoms of a tax haven and maximum discretion.
Part 1: Rich Move Assets from Banks to Warehouses
Part 2: A Vehicle for Money Laundering
http://www.spiegel.de/international/business/art-as-alternative-investment-creates-storage-business-tax-haven-a-912798-2.html

#230 mark on 07.24.13 at 7:48 pm

Sorry Garth, cheap shot. But it’s worth remembering, the racist angle is great clickbait for a media in a death spiral.

Internally it generates the most comments on news sites, it leads the tv news, it’s jammed on the front page of newspapers and it has opinion page grandstanders making broad sweeping genralisations in an attempt further their own brand.

Unfortunately, it’s also picked up by international news services and all of a sudden you have random incidents and a few buffoons defining a whole country.

#231 Godth on 07.24.13 at 7:48 pm

226 mark

The last residential school closed in 1996, the reserve system persists, but sshhh – I don’t want to talk about it unless we call it progress.

#232 CrowdedElevatorfartz on 07.24.13 at 9:59 pm

@#228 mark
I’m so disappointed. After all the comments .I assumed we were THE most rascist…..

#233 Sydneysider on 07.24.13 at 10:43 pm

Congratulations, and the personal donation is a nice gesture too.

My suggestion is to give it to a charity that helps homeless young people, e.g.

http://www.covenanthousetoronto.ca/

Maybe Brad Lamb can be persuaded to match it.

#234 bo xilai on 07.25.13 at 5:44 am

Thanks Garth for exposing the tricks of Real Estate Agents – they truly are scum of the universe.

#235 Meh on 07.25.13 at 9:23 am

I wish more people would think we’re racist and horrible, well we are pretty horrible these days thanks to house prices. But we cop about 300k immigrants per year and we are continually having entire suburbs taken over by Asians and middle easterners.

Our government keeps the numbers of foreign buyers quiet in Australia, nobody really knows how much they’re buying. But I do wish they would bugger off.

I love it how you boomer morons impose crap on us that your WW2 parents wouldn’t have dreamt of imposing on you and which you never had to put up with.

Always nice to hear from Oz. — Garth

#236 Mike on 07.25.13 at 10:30 am

#166 craig on 07.24.13 at 1:03 pm

#149 Mike

then valuations would be fair.
===================================

Fair to who Mike?

What is a fair valuation?

Like I said it’s all relative. You think the price is too high, others don’t.

So it is fair to them , no?

“”In the stock market, valuations are base on earnings. P/E ratios look fair, meaning you are likely not over paying for stocks. ”

You’re kiddin’ right?

————————————————

Prices (P/E’s) are “fair” because they are in line with historical averages. House prices are much above the ratio of price to income historically. People overpay for stuff that’s going up in price, and generally convince themselves that they are getting their money’s worth for one reason or another (everyone in the world wants to live here). Houses are overpriced because I can get a job in the US paying me as much as I would make here, but buy a house for half the price.

The statement “you’re kiddin’ right?” makes no sense, so there is no response for that, aside from the fact that it only makes sense to value stocks based on their earnings, and what the price-to-earnings ratio has been in the past. Unless you choose to believe the world is a ponzi scheme, everything her makes sense.