Of debt & data

PETS SIGN modified modified

For a mortgage broker, a guy who scratches out a living giving money to house-lusty GTA couples, Damian is a skeptic.

“I’ve had clients in the last couple weeks come in looking for additional financing,” he says. “It seems ‘shadow lending’ is more prevalent now-a-days and people are trying to pay these awful loans out before their renewal period… If people are borrowing from these lenders at 12% and also have an 80% mortgage with a credit union or maybe a bank if they’re lucky, wouldn’t this be considered sub-prime?”

You bet. And it’s a far more common practice than most people think. With the average detached 416 shack now at $1.047 million, and no CMHC insurance available, buyers have to cough up a 20% down payment, plus finance the double land transfer tax. On a modest $1.5 million house, it means showing up with $352,000 in cash, then taking on a $1.2 million mortgage. If you lack that in your chequing account, there are brokers who will happily lend you the missing hunk of the down. Yes, at double-digit rates of interest. And, yeah, it’s prime Canadian subprime.

Debt’s a disease now out of control in our midst. In fact, Damian’s mom is a good example. “She’s 66, got laid off in the summer, not enough money to live on, and has a townhouse in Vaughan worth roughly $700,000,” he says, “with a mortgage. I’ve talked to her about selling and renting, to max out on this crazed market. I know what you’re thinking. Good luck trying to predict the peak. But if I’m advising her, I don’t want to be the guy that convinces her to sell at 700k and prices soar to 800k… I have enough brothers and sisters that I won’t hear the end of it.”

Adds the broker: “But I just feel when people in the GTA run for the door, they’ll run for it faster than they got in.”

Nowhere are the dangers of the one-asset strategy most Canadians have adopted more acute than on the coast. All real estate is local, and in BC its obsession has produced the only negative savings rate in Canada, as locals routinely spend more than they earn, making up the difference with debt, delusion and basement suites. The average house in Metro Van, as a result, costs $1.248 million and increased 23% last year. The average detached in the city is $2.5 million. The mega-lending credit union Vancity helps facilitate this with a palate of mortgages you won’t see anywhere else – dishing out loans to unrelated buyers of a single property, financing sketchy laneway houses, or gifting the self-employed who have no proof of income, plus enabling first-time buyers without savings.

As prices detach from the economy and local incomes, people look to cast blame. While an intoxicating mix of cheap rates and rank speculation has led to the embrace of debt and an obsession with houses, the social consequences turn ugly. The young feel shut out and blame the old. Long-time residents watch their hoods fall victim to speculation and excess. Old stockers decry foreign buyers, blaming them for idiot prices while they relish in the wealth effect they bring. And so Vancouver morphs from a hip and livable city into a giant cauldron of listings, simmered in greed and anti-Chinese.

Politicians are feeling the heat. And succumbing. The federal Libs say they’ll be collecting and analyzing the data on foreign buyers – everyone’s favorite straw men. The provincial government is now playing along, issuing a request for proposals on a “Foreign Investment Research Initiative” which may report in six months. The mandate: “Examine key factors affecting prices for new and resale homes in B.C.; impact of foreign home ownership on home prices, with a particular focus on the Lower Mainland; what sources of data are needed to measure the extent of foreign home ownership and price impacts; to what extent other jurisdictions are experiencing impacts from foreign home ownership, and what measures they are taking.”

What will it find?

Not much, muse the premier and the BC Real Estate Association – which has been providing politicians (secretly) with data over the last five years. Christy Clark is on record as saying most real estate deals in YVR are local-to-local, while her government claims: “There is a perception that foreign investors and speculators are driving an affordability crisis in residential real estate — particularly in Greater Vancouver. The data we have does not support this perception.” Meanwhile the realtors say their numbers show “less than 5%” of buyers are non-residents.

Well, let’s wait and see. The report might confirm that rich dudes escaping from mainland China are destroying Vancouver, or it could prove human greed and mania are fomenting a destructive racist envy.

Meanwhile there’s hard data from the closest major market. Victoria ain’t Vancouver, but it’s not Winnipeg, either. Here’s what an internal report from the local real estate board shows. Apparently everybody dreams of living in that lovely burg. But they’re not.

BUYERS

 

 

258 comments ↓

#1 JRH on 01.31.16 at 11:54 am

Good Morning !

#2 Darth Noxuss on 01.31.16 at 11:55 am

FIRST

#3 Turtle on 01.31.16 at 12:04 pm

What kind of work can you find at 66?

#4 boonerator on 01.31.16 at 12:15 pm

One aspect of this HAM problem seems to be how do we define ‘”foreign money”.
We sold in Victoria in 2014 and the buyers work in Victoria and have Chinese names.
We did hear via our realtor that the buyers were communicating with the bank of mom and dad who still live in China.
So, if, and we do not know if they did, mom and dad chipped in to help with the payments, is that “foreign money”?
And if they did, how would you research that?

#5 Scott in Gibsons on 01.31.16 at 12:18 pm

The Canadian housing correction might be a few months or years away. Global interest rates still seem to be headed lower with the Bank of Japan joining the EU, Denmark, Sweden and Switzerland by setting a negative interest rate. US rates will have to go higher or the US dollar will go too high to fast and cause disruptions throughout the global system. Yellen getting the results of her experiment and they are not good! Meanwhile, foreign RE buyers will continue to purchase their “5%” of the Vancouver market as the flow of money out of Asia increases. China has burned through $700 billion of their $4000 billion reserves in the last year trying to supply their people with US dollars, some of which is bundled into nice little $10k packages and hidden in luggage and clothing for the trip through YVR. If they get caught, the nice Canadians give most of it back later!
This might be the start of the Canadian housing correction, but don’t underestimate the risky actions the central bankers will take to keep the bubbles going. Now that global governments/corporations/individuals are in record debt, their job is to keep us there and collect the payments forever. Sane people can see that what we are doing is unsustainable and are calling for debt to be defaulted on so the healing can begin such as what happened in Iceland after ’08. I say give the bankers one more chance to take global debt and interest rates further into lala land before calling for the RE correction. Fasten your financial seatbelts! This is going to be cool!!

#6 Scott in Gibsons on 01.31.16 at 12:19 pm

Correction, US rates will have to go lower!

#7 SWL1976 on 01.31.16 at 12:28 pm

Well if Christy Clake said it, it must be true.

Personally I don’t care cause I have no dog in this fight, but you sure did pour some gas on the fire for the comment section here Garth.

Should make for an intersting read. While Victoria and Vancouver are within eye shot at times, they are a galaxies apart in many ways.

Looking forward to the verdict

#8 Panhead on 01.31.16 at 12:32 pm

Here we go … another waste of our money … photoopchristie can get all the info she needs for free from Global …

#9 salmon rear end arm on 01.31.16 at 12:33 pm

the Chief would know what to do, we need the Chief

#10 ShawnG in TO on 01.31.16 at 12:34 pm

War is peace
Freedom is slavery
Ignorance is strength

we freely choose to be debt slaves, and financial ignorance is moists’ biggest strength.

we are 2 out of 3. now, please start the bombs so we can achieve peace.

#11 Nothing will happen on 01.31.16 at 12:35 pm

Toronto R/E will not crash, people are now living with debt, basically hand to mouth. Greed and jealously are two characters of today’s society. This will keep the R/E market floating. Also the fact that there is tons of outside money coming to Canada. Not a bad thing, lots of “Canadians” have made money from this opportunity.

#12 Jake Hickerson on 01.31.16 at 12:37 pm

Higher and more taxes, higher unemployment and very low interest rates, more property tax deferral laws, easier loan and down payment regulations will just make things worse.

Canadian real estate has not had a correction in 20 years at the very least. It should of had at least 3 by now.

#13 Happy prairie guy on 01.31.16 at 12:40 pm

I know the cauliflower discussion has pretty well run its course but couldn’t resist sharing my yesterday’s buy at Kansas City’s city market. TWO of them for one USD so even with our slightly improved $ only a buck forty three!

M65MB

#14 UncleFester on 01.31.16 at 12:41 pm

Morning.

#15 For those about to flop... on 01.31.16 at 12:45 pm

Last time we touched on this topic I wrote a post and nothing I have seen personally in the last 6 months has changed my view.
I believe the number of transactions to foreign buyers to be somewhere between 10 to 15 percent on the west side of Vancouver between Granville and Dunbar during the last decade.
On the east side I would not be surprised if this number is less than 2/3 percent.The prestige is just not there nor the desire to live there.
If the government does start to collect data and such it is a little too late anyway the ship he’s sailed.
I personally benefited from the foreign influence, during the past decade I worked on high end luxury new builds and probably 60to70 percent was foreign money.
Not so much in the early 2000s but by 2005/06 I noticed a definate change in buyer and also completed a lot of jobs where the owner was never on site as the were living in China.
Some of my clients were Chinese /Canadian so they were classified as locals in my mind.
I only worked on a small percentage of the houses sold during this time, but I talk to guys from other trades at the hardware store and have worked on realtors houses and they were giddy with the foreign influence ,like I said less than 20% but enough for them to use it as a tool to whip the market into a frenzy.
I also recall when the GFC happened guys were scared of losing their jobs and things took a brief dip but then as we slid into 2009 the feel good factor of the 2010 Olympics was enough to kick start everything back up again and the rest is history as they say.

M41BC

#16 Nick on 01.31.16 at 12:56 pm

More distortion from Garth (not sure why?)
Vancouver is internationally renown as a safe-haven destination for capital.

From a recent bloomberg article:

“A Sotheby’s survey of realtors in 2013, for example, found that international buyers made up 40 percent of luxury sales in Vancouver and a quarter in Toronto, according to the CMHC report.” http://www.bloomberg.com/news/articles/2015-12-03/foreign-buyers-increase-condo-stakes-in-canada-cities-cmhc-says

This is the HIGH end, but it distorts everything else. Of course, official numbers must be taken with a grain of salt, as anyone knows, it’s easy to obscure the source of capital purchasing these properties. All fueled by cheap global capital, surplus of cash, and nervous affluent fleeing emerging markets.

Great idea – let’s take “official numbers” with a grain of salt and trust those coming from the real estate-pumpers at Sotheby’s! — Garth

#17 Cash is King on 01.31.16 at 12:59 pm

# 3 Turtle on 01.31.16 at 12:04 pm

What kind of work can you find at 66?

Walmart greeter? Competing with college & university students for part-time hours at Tim’s? Charging the kids minimum wage to watch the grandkids?

#18 westcoaster on 01.31.16 at 12:59 pm

Having lived in Vancouver for most of my life and in Victoria for the last 30 years I can tell you unequivocally that the demographics of the two cities are miles apart from each other and do not serve as reasonable comparables.
In the mid-90’s I returned to Vancouver for a high school reunion and decided to, for old times’ sake, walk my school route. It was a beautiful summer evening. People were out, walking their dogs and puttering in their gardens. Whereas in the late ’70’s I would have seen, overwhelmingly, WASPS, I saw exactly none on my 1 mile route to school. Any “For Sale” signs had Asian names on them as realtors.
Victoria, on the other hand, is overwhelmingly WASP territory (the current shorthand more appropriately for “White Anglo-Saxon Pagan” rather than “Protestant”).
“Local” may be defined as those with Canadian citizenships and that’s fair enough but the heritage (and I believe financial pedigree) is Asian, not Caucasian. This, I believe, is what people are seeing.
This is not in any way a racist commentary. It is simply an objective observation. My personal worldview includes the concept of a global melting pot. But anybody who thinks that the Vancouver real estate $ derives historically from Canadians when looked at in a timeline encompassing 30-40 years doesn’t know the city. My impression is that the population demographic changed significantly post-’86 Expo and that a careful look at the real estate landscape in particular would evidence that.

I said, clearly, Victoria is not Vancouver. But if investment in VYR is 10 times that in Victoria, the total will be about 6%. Close enough to realtor numbers. — Garth

#19 Randy on 01.31.16 at 1:00 pm

What can you say. A lot of Canadians are ignoring reality but they believe in Government supported bubbles.

#20 Stacey Easton on 01.31.16 at 1:11 pm

Most of the time governments tax something or someone that needs it or uses plenty of it.

Why has no government in Canada taxed CMHC premiums, debt and interest payments, mortgages.

My cousin in Buffalo, New York sad there is a tax on mortgages to register it in the whole state of New York.

There is a 50 cent tax per $100 mortgage and an special additional 25 cents tax per and 30 cents tax per $100 mortgage if near a certain area, city.

Check it out, http://www.tax.ny.gov/pit/mortgage/mtgidx.htm.

You can also google new york’s mortgage tax.

#21 Mark on 01.31.16 at 1:12 pm

If all this “money” is coming into Canada from “China”, as alleged, try to find the rich Canadians who are selling to the Chinese. Try to find them. But the fact is, they largely don’t exist because its not Canadians getting rich selling to the Chinese. Its Canadians selling to other Canadians, and then lending the proceeds back to the buyers through the banking system (which, by necessity, requires the deposit/borrowing of every dollar that is lent into the RE marketplace).

When this feedback loop is disrupted, wham, prices will collapse. The few percent that house prices have fallen in most Canadian cities (including GVR/GTA) over the past few years will turn to a flood of discounts, as people race to sell. Volatility on the upside is historically matched with volatility to the downside.

#22 cd on 01.31.16 at 1:12 pm

in vancouver, pay day loan usage is up a crazy amount. I am assuming toronto is following the trend as well.

http://bc.ctvnews.ca/b-c-payday-loan-use-up-nearly-60-per-cent-report-1.2756471

#23 CREA PART OF THE MAFIA!!! on 01.31.16 at 1:12 pm

It’s official, but still so surprisingly blatant!

http://www.theguardian.com/world/2016/jan/29/mafia-bosses-caught-police-raid-mountain-hideout

#24 Retired Boomer WI on 01.31.16 at 1:18 pm

… “Yes, and at double-digit interest rates. Yeah, and it’s PRIME Canadian Sub-prime.”

When you get your regular “Bank Loan” for your 80% at whatever bargain rate you can, and your 20% down payment at double-digit rates. PLUS whatever closing costs you needed to borrow…… bingo – SUB PRIME!!

Now, does any right thinking Canadian believe for a minute these “borrowers” have the full intent to PAY off
a mortgage like that, or are they just planning on “flipping” it to the next bigger sucker when prices escalate a bit further? OR, maybe waiting it out a few months then apply for the HELOC, just in case….

When properties fail to go up, they walk, jingle mail.
OH, they are recourse loans, no problem…chase me.

Do you thinking Canadians believe the BANKS, and CMHC are going to shoulder these collection costs alone. Silly Beavers, you will “share” their pain.

Wait, when the “new” TAX maybe a 3% transaction tax on RE AFTER the problems have manifest themselves into taxpayer ‘guaranteed’ issues.

I love to see “Roasted Fool” being cooked well, but this time, it is really beyond the pale. When TSHTF I will be amazed if anyone finds the fan. Just think of the damage to an already stumbling Canuck economy…

You were not here to see the misery America went through with our sub-prime crap. If you believe we are really finished, as in ‘over’ with the fallout from our crisis, you might be a buyer for that quaint 2.3 million dollar impaired lot for sale yesterday in Van.

We are just arranging the deck chairs for round two, the taxpayer’s revenge!

#25 JamesA on 01.31.16 at 1:22 pm

I bet a good way to get a youtube viral video in Canada would be to go under cover to one of those sketchy loan places. Just go to several and discribe some nightmarish money situation and see how bad the loan shark esk rate is. With the Micheal Lewis book based movie out there I think subprime is on the mind. Mind you people probably don’t want to know how bad it is. Scary stuff Garth.

#26 BS on 01.31.16 at 1:27 pm

Debt’s a disease now out of control in our midst. In fact, Damian’s mom is a good example. “She’s 66, got laid off in the summer, not enough money to live on, and has a townhouse in Vaughan worth roughly $700,000,” he says, “with a mortgage.

Mortgages held by 66 year olds used to be unheard of. In the past once you were past 40 you could not get a 25 year amortization on a mortgage. It had to be paid off at 65. Today 64 year old Walmart greeters are getting 25 year mortgages. I suspect this new segment of senior mortgages has a much larger impact than foreign money.

#27 Nobody on 01.31.16 at 1:27 pm

As a White Anglo-Saxon Jewish (WASJ?) immigrant who bought their 604 house cash thanks to selling the even more overpriced place in London.

Can I just say I’m unhappy about the accusations of Chinese money being used to secretly drive up the price of local houses – we have worked hard for 2000 years to be the official source of blame for this sort of thing and it’s very annoying that this rich heritage of anti-semitism is so easily replaced by cheaper anti-sinoism

#28 Shawn on 01.31.16 at 1:31 pm

Cash and Debt Redux

Since the topic is Debt I will take the liberty of posting again my thoughts on the $75 billion of excess cash.

What $75 billion excess cash

“Canadians are holding onto $75 billion worth of cash… Negative interest rates will be flushing those dollars loose…. ”

*****************************************
Actually most of this cash was created by the banks when someone took out a loan and a deposit=cash was created. Which is a wonderful thing.

At present time there is no such pile of cash sitting in the bank vaults. It is offset by loans that were in turn used to buy (and hence to fund production of) houses, cars and vacations and all manner of things and services desired.

So the $75 billion is already at work in the economy. Same goes for corporate cash, it is not in the office safe. It represents bank deposits which are offset by loans to someone or it represents a federal T-bill and therefore represents money already spent by the government.

Any one individual may have too much cash and can go get it and buy stocks or a house. Where will the cash go? Correct, right back in someone’s bank account.

The population as a whole can only reduce said cash hoard by paying back the loans which destroys a loan and a deposit of equal amounts.

I think CIBC is wrong to suggest that Canadians as a population have too much cash. It is only some individuals that have too much and it offsets those with too much debt. Can’t have one without the other. I think CIBC must have meant that certain individuals have too much cash. But it they spend it someone else gets the cash. Must pay off loans to reduce cash. Capich?

One man’s cash is offset by another man’s (or government’s) debt.

Consider that bank deposits are cash to the owner of the depositor and represent a debt of the bank.

As some have pointed out, loans create deposits which are cash. The borrower together with the bank created the “cash”. Hence it is only the borrower who can destroy that cash by repaying the loan. (Imagine a $500k loan repaid by $500k cash from a cheque on a another back. Our banking system sees a reduction of a $500k deposit which we call cash and a loan is wiped off the books.

All cash is credit, get over it. Cash is a claims check (think coat check) on goods and services. He who has cash (such as a bank deposit) is owed goods and services by no one in particular but by the economy as a whole.

#29 BS on 01.31.16 at 1:37 pm

westcoaster on 01.31.16 at 12:59 pm

Having lived in Vancouver for most of my life and in Victoria for the last 30 years I can tell you unequivocally that the demographics of the two cities are miles apart from each other and do not serve as reasonable comparables.

Thats true that Victoria has a different demographic. But then why is Victoria so expensive and ranked the second least affordable place behind Vancouver? We know there are differences with Vancouver but both cities are still unaffordable. What the similarities? House horny locals with cheap and easy credit seem to be present in both places. Imagine how many senior mortgages are in Victoria. Probably plenty of 90 year olds with 20 years left on their mortgage.

Greater Victoria has the second least affordable housing market in Canada, according to an international study of urban housing markets. – See more at: http://www.timescolonist.com/news/local/victoria-rated-second-least-affordable-housing-market-in-canada-1.1736646#sthash.BPrRbaKe.dpuf

#30 Investorz on 01.31.16 at 1:44 pm

At my work (international company in Toronto) chinese people transfer from the Shanghai office every year. They get their permanent residency soon after and then their parents come. Before their parents come they sell their condo, which they tell me have appreciated far faster than those in Canada. A typical 2 bedroom is 800k canadian. The parents put the downpayment down on the Toronto house. Some have 1.2 million dollar houses. Their total income is below 90k. This is making colleagues talk, as you can imagine.

Is that unfair? No, they don’t break the rules. If I was in their position, I would do the same. Wouldn’t you? Shanghai is dirty and even food is dangerous. Canada is a paradise for them.

Now, does this ‘type of buyer’ represent a large part of purchases in Toronto? Probably not.

#31 Jay on 01.31.16 at 1:45 pm

There’s one thing that I really noticed that bothers me. On paper, you might think that I have a negative savings rate.

However, that’s because it’s stupid to put your money into a savings account. It makes way more sense to store your money on something that’s going to at least match inflation. In reality, I’m putting away almost 10% of my gross.

When we talk about the spectacular negative savings rate, is this phenomenon affecting that?

#32 JB on 01.31.16 at 2:00 pm

Garth, why don’t we just agree to disagree on the effect of ‘Asian’ money on Vancouver real estate. You have repeatedly confirmed that the buying is local. I don’t think you or anyone else has been able to identify Canadian sources who purchase properties at the top end of the pyramid. The extreme prices on the Westside of Vancouver and Richmond filter out to the suburbs and has a much greater effect than you give it credit for. Here’s a true story: A friend of mine sold the long time family home in the Granville & 41st neighbourhood. The old house sold for 3 million. It was torn down and a year later a larger home was built on the site. Selling price? $ 12 million. Local money paid that? I don’t think so. Was the appraisal my friend used to set the selling price of her home that underpriced? No, but it just did not take into account how highly prized the property was to those who could see the right kind of a new house on it – one that took into account the principles of Feng Shui. (The company that built the new home had a detailed sign in Cantonese erected on the property during construction). Last week I had Dim Sum with coworkers. One of them related a story about their recent property assessment of their East Side home. He noticed that his neighbours house, which was an exact copy of his own, was valued $35,000 less than his. He contacted B.C. Assessment and asked for an explanation. He was told his neighbours house had a laneway that faced towards his back yard. This was undesirable (‘bad Qi’). Yes, BC Assessment takes Feng Shui into consideration in their valuation of properties. (Please contact them for confirmation of this). Offshore money is the source of the tidal forces washing over Vancouver. The locals have been forced to swim in it and will no doubt be the little fish that wash up on the beaches if their finances falter in any way. This is not an ‘anti Asian’ sentiment, it is recognition of a primary force affecting the Vancouver market.

#33 Peter schift on 01.31.16 at 2:06 pm

Buy land in Timmins…go explor resources

Hahahahahahhhaah

#34 45north on 01.31.16 at 2:06 pm

But I just feel when people in the GTA run for the door, they’ll run for it faster than they got in.

people in Vancouver too

Chinese in Vancouver: I sort of think that they make up 1% of the market. Very significant if they’re bringing money. However money from Alberta is more significant. Like double. Same language, same money, same country. So the downturn in Alberta is very significant and will ( probably is ) having an affect in Vancouver.

boonerator: So, if mom and dad chipped in to help with the payments, is that “foreign money”?

And if they did, how would you research that?

you wouldn’t I mean if you were the government you wouldn’t.

cd: in vancouver, pay day loan usage is up a crazy amount.

that got my attention

Retired Boomer WI: You were not here to see the misery America went through with our sub-prime crap. If you believe we are really finished, as in ‘over’ with the fallout from our crisis, you might be a buyer for that quaint 2.3 million dollar impaired lot for sale yesterday in Van.

We are just arranging the deck chairs for round two, the taxpayer’s revenge!

I followed the housing bubble bust in the US. Banks would refuse to foreclose. People stayed in their houses for years not paying the mortgage but not maintaining them either. Losses were hidden. I’m thinking Canadian banks cannot afford to hide their losses.

#35 LL on 01.31.16 at 2:06 pm

Okay Garth you convince me!

#36 "Buyers came from Canada" on 01.31.16 at 2:17 pm

Buyers came from Canada meaning they were physically present in Canada. What a joke. What is like to know is what percentage were other than PR and citizens.

But sheep will buy it.

#37 "Buyers came from Canada" on 01.31.16 at 2:20 pm

So realtor numbers are tru this time?

#38 Victoria on 01.31.16 at 2:24 pm

People in Victoria seem to think that the chinese are pushing up prices. The ones that own homes think more and more will come here and make them rich :-). The owns that don’t own blame the Chinese.

Very strange ….

#39 Steve on 01.31.16 at 2:29 pm

Friend of mine can’t buy / but found a fixed up insul brick home / fancy kitchen / cool shower / high end toilet

$3500 per month / plus heat / hydro / cable / water
he said the owner might sell / $1.1 million / he wants first rights / he has $70k saved / and is 50
he said it’s cheap because he can walk to work / but drives instead / live is grand

#40 Frank on 01.31.16 at 2:30 pm

I agree that people in Van spend too much. I know them.

But the Victoria thing is misleading, they often establish roots here first. Send a kid to school, kid gets PR and a wire transfer for a down payment. Who bought that house? A local or foreign investor? A local as far as we care.

#41 WUL on 01.31.16 at 2:31 pm

I am buying into this whole minimalism thingy.

Today, I move across Ft. Mac to my new tenancy. I have not bought gasoline in 2 and ½ years. Liberating.

Everything I own fits into a hockey bag except my collection of old and vintage car batteries (about 30 of them).

I agreed on the el cheapo rental about January 10. On or about January 20, the owner of the shack said he was going to list it for sale. That clinched the deal. It means about 14 months of secure renting.

My next comment will be from the other side of the mighty Athabasca River.

#42 Still Employed in AB on 01.31.16 at 2:40 pm

First I’d like to thank Smoking Man for his caring and compassionate comment yesterday regarding the state of affairs in Alberta.

I think many people are focusing on the second half of today’s post. We should really be paying attention to Damian’s story. When the mortgage brokers are telling their loved ones to sell WE SHOULD ALL SIT UP AND PAY ATTENTION.

#43 LL on 01.31.16 at 2:45 pm

Now can we talk about something else (it`s not a fun debate).
Like why the RE over heated market has not collapse yet?

#44 Joe2.0 on 01.31.16 at 2:46 pm

Here’s the low down.
All of the large economies (aka players)have large computers.
Computers playing chess with us (or against) the consumer, a fraction of a penny at a time.
Some one farts in India and they know about it.
This hi tech game ends with mucho inflation, debt and tears.

#45 common sense on 01.31.16 at 2:55 pm

I have some tulips, beanie babies, 1990’s baseball cards, Louisiana land for sale….

Any takers?

Please.

#46 Metaxa on 01.31.16 at 2:56 pm

@ #27 Nobody…LOL. well, more like a Snort Out Loud but pithy, germane and funny…you rock.

The rest of you online experts who wonder about the 66 year old ladies ability to work…while I’m not 66 I am 64 and have three distinct lines of income exclusive of any investment income.

None of which takes me more than 4-6 hours in a day, none of which begin earlier than 9:30 am and none of which last into the late afternoon.

Individually they would look to you snobs like Wal Mart greeter wages/income but cumulatively I’m just shy of 6 figures, start at 9:30, home by 2 most days ,holidays off, long vacations…simply waiting for my lady to tire of her job then we are done.

Never underestimate your elders, what we lack in speed we more than make up in enthusiasm and ability.

#47 Nemesis on 01.31.16 at 3:03 pm

#Victoria?… #Seriously?… #Or,”Daddy,WhereDidAllThePunkawallahsGo?”…

[TimesColonist] – Vancouver Condo Raj Ravishes Dowager Empress: Bengal Lounge G&T Set Relegated To Endangered Species List

“The new owners of the Fairmont Empress are destroying its history and everything that this heritage landmark stands for. We stood by and watched as they ripped out the weeping sequoias, and removed the ivy. Now they have plans to renovate into a modern contemporary hotel … this includes getting rid of the iconic Bengal Lounge.” – Suzanne Johnston, Heritage Activist

http://www.timescolonist.com/business/empress-seeks-more-customers-with-makeover-bengal-fate-draws-fire-1.2151655

#Meanwhile,InOakBay…

https://youtu.be/UPWBaNQxVWI

#InOtherNewsColonial,Or… #TheLastRefugeOfScoundrels?…

[G&M] – Victoria’s affordable homes prompting early moves out of Lower Mainland

…Victoria has what Vancouver is now missing: houses that are affordable to the middle-class buyer, little traffic, and a lot of tasteful housing stock, including some of the best heritage housing in the country. It also has lower wages, a slow pace of life and a ferry ride if you need to get to the Lower Mainland – all of which can be off putting to some people.

Those negatives did not, however, put off one of the world’s largest real estate firms, Engel & Volkers.

When the German luxury real estate company moved into Canada, they started with a franchise in Victoria, followed by Calgary and then Vancouver late last year.

“They only go into key cities, only in markets that are active and destination markets,” franchise co-owner Scott Piercy says.

“Absolutely, we’re seeing a huge number of Vancouver. They are selling property and then banking pretty good money and coming here. For them, it’s the perfect storm.”…

http://www.theglobeandmail.com/life/home-and-garden/real-estate/victorias-affordable-homes-prompting-early-moves-out-of-lower-mainland/article28462590/

[NoteToGT: I may have taken some editorial liberties with the TimesColonist Leader…]

#48 Trent Schwartz on 01.31.16 at 3:10 pm

Interesting about the poster and a New York Mortgage tax.

It is the first time I heard anything like that. I think the only way to rein in this speculation and high debt levels in Canada is to have an annual mortgage tax that matches the property taxes one pays.

So, here in Barrie, Ontario, most people I speak with are paying $4,500 a year in annual property taxes.

They should pay an additional $4,500 a year mortgage tax or debt tax for having a mortgage. It is a requirement to have home insurance when someone has a mortgage.

This way the interest savings of hundreds a month will be wiped out and make it really difficult to buy a real estate with high debt levels.

This would also force richer speculators that buy houses in Vancouver or Toronto or anywhere else to pay cash or they would be paying a lot of annual property, debt taxes of $10,000, $15,000+ a year.

#49 GS in T.O on 01.31.16 at 3:13 pm

#27. Nobody

I just loved your commentary. You summed up how quickly and easily people are to judge and blame others. It was funny and clever and probably made many people pause for thought

#50 Retired Boomer WI on 01.31.16 at 3:19 pm

Yes, some Banks, (mostly the too big to fail you’ve heard so much about) were very slow to foreclose. Certainly not all were slow. Some Banks that were not slow to foreclose, were stupid, in that they left now empty houses remain unheated, unwinterized, unattended.

I could show you several right here in my wee town of 560. They all sold afterward, for far LESS than they would have recovered had the Banks, perhaps thought the whole process through in a better way. No perfect solutions either way are there?

One a beautiful full brick ranch, 2 car garage, finished basement, with 2 full baths, hot water baseboard heat went unwinterized. Great home, high remediation costs.
Sold for under $40 Grand AS IS. Today, good luck replacing it, building only, for under $200 G. (on about 2.5 acre lot).

Yeah, there were great buys, but the old owners lost jobs, moved out -bye- never to be heard from again.

Retired banker owns it. I viewed it when it was for sale as a foreclosure. (more curious than serious)

#51 North Burnaby on 01.31.16 at 3:22 pm

Be greedy when others are fearful. Its time to buy into Calgary & Ed,onton real estate market.

#52 Victoria Real Estate Update on 01.31.16 at 3:23 pm

0.68%

Only 0.68% of properties sold in Victoria in 2015 were to buyers from Asia.

Readers of the comments section of this blog (in 2015) may remember some of the links that came with some of the comments that quoted local realtors saying, among other things, that Asian buyers were driving the upper end of Victoria’s housing market.

It turns out that the hard facts show that this was false.

As well, several comments were posted on Garth’s blog saying that wealthy buyers from Asian had suddenly discovered Victoria in 2015. This, of course, was also completely false.

Not only were Asians not flooding into Victoria to buy everything they could get their hands on at higher and higher prices, but the hard facts also show that sales of single family homes in 2015 were below Victoria’s long-term average.

I always laughed when I read those “news articles” that gave the impression that something had changed in Victoria and that wealthy buyers were flooding into our city and buying up properties and that this would continue so buyers better get in now or be priced out….

It was obviously a pathetic attempt by the (real estate friendly) local media to convince locals that it was a good time to buy in Victoria.

Where are those (realtors?) who posted nasty comments directed at me? They were wrong about everything. Will they be back? It’s always nice to have them join the conversation. Will they post under new names again? Will they try to post under my name again?

#53 Mark on 01.31.16 at 3:26 pm

“This hi tech game ends with mucho inflation, debt and tears.”

You sure its not deflation? The result of increased productivity is usually deflation. Entire sectors of the Canadian economy (ie: the high tech and IT sectors) have largely been moved overseas. Yet despite this loss in domestic production in those sectors, the price of IT and high tech (particularly communications hardware) is cheaper than ever. What used to cost an upper middle class salary for employees in the sector, now is barely even a middle class, and is an upper-lower class salary on account of the huge glut. Very deflationary.

” followed the housing bubble bust in the US. Banks would refuse to foreclose. People stayed in their houses for years not paying the mortgage but not maintaining them either.

I’m sure you read my comments the other day with interest; my (separated) friend in Calgary hasn’t made a house payment in over 6 months on a house bought at the 2013 peak of the market with 95% financing. Actually had moved out of the house briefly in preparation for what he thought would be a rapid foreclosure and sale. But nary a word from the bank except a registered letter wondering where the mortgage payment was.

He’s since moved back in (why bother paying rent somewhere else!), and has pictures all over his Facebook account of having set up a portable pool, filled with water in the dining room for his young son to play in.

Offshore money is the source of the tidal forces washing over Vancouver.

If that were remotely true, then there would be a much greater lift in all asset classes in the Vancouver area, not just RE and the local banking sector’s asset base (ie: loans). But right now, the data appears to better support the idea of foreign *selling* of Canadian assets, not the purchase of such. In fact, as a friend of mine who flew to Shanghai ex-YVR the other day commented, she’s never seen so much in terms of exit currency inspections “at the gate” in her time travelling the route ever.

#54 fleabitten monkey on 01.31.16 at 3:26 pm

In our hood in East Van the townhouses we live in have just reached a record selling price of $1.1million. Whereas 7 months ago, just last summer they reached a new record of $850K. How does this make any logical sense? 29pct increase in less than a year. $250K uptick. This is insanity.

#55 Rexx Rock on 01.31.16 at 3:30 pm

Vancouver and Victoria homes are selling to couples who make over $150,000 and putting down at least $100,000 down.Thats what a couple of realtors told me and they said also lots of new buyers looking because of rising prices every year and tired of not owning a great investment.

#56 Leo Trollstoy on 01.31.16 at 3:30 pm

But if I’m advising her, I don’t want to be the guy that convinces her to sell at 700k and prices soar to 800k… I have enough brothers and sisters that I won’t hear the end of it.”

fundamentally wage slaves are cowards. don’t forget to wish your boss a good morning tomorrow.

#57 bdy sktrn on 01.31.16 at 3:44 pm

West End block sells for twice what it did two years ago

Young buyers backed by Hong Kong families have been paying top prices for prime locations
BY JOANNE LEE-YOUNG, VANCOUVER SUN JANUARY 29, 2016

VANCOUVER — Two adjacent properties taking up a prime, full city block on Alberni between Nicola and Broughton streets in the West End have been sold for almost twice what they went for less than two years ago.

Alberni Street Nominee Ltd., which paid $83.4 million for the buildings at 1444 Alberni and 740 Nicola in March 2014, is under contract to sell them (which means the deal hasn’t been finalized), said local developer Bruno Wall, who is a partner in the company along with Peter Wall and others.

The deal is estimated by real estate industry sources to be in the range of $160 million. The buyers are Hong Kong-based Asia Standard International Group Ltd. and Landa Global Properties, a relatively new, Vancouver-based developer headed by 27-year-old Kevin Cheung and Scott Wang, 31.

The two executives have been making a name for themselves in local real estate circles, sometimes paying high prices for prime locations.

Cheung and Wang, who both grew up in Vancouver, are backed with capital from their Hong Kong-based families, who develop real estate in Shanghai.
———————-
here’s your ‘local’ westside buyers.

see it’s not foreigners afterall!

#58 A Yank in BC on 01.31.16 at 3:47 pm

Victoria might just as well be Winnipeg when you try to extrapolate data over to the mainland market. There is just no comparing the two. It’s apples to oranges.. in my opinion.

#59 Suede on 01.31.16 at 3:47 pm

The hockey stick continues…

Look for a rise in listings in YVR as word gets out that people are making out like bandits. Everyone will want in.

When poloz decreases rates, the bull will run for another season.

Cauliflower futures will rise another 25% at that point with a falling CAD.

The cure for high prices is high prices.

Pass the popcorn…

#60 Asthesheepsleep on 01.31.16 at 3:50 pm

In the end he who hold the gold makes the rules..

#61 bdy sktrn on 01.31.16 at 3:53 pm

The few percent that house prices have fallen in most Canadian cities (including GVR/GTA)
——————-
mark see above – up 80 million (100%) in 2 years is not down a ‘few percent’

as much as leo’s childish sniping is annoying you really do ask for it.

#62 Ryan S. on 01.31.16 at 4:01 pm

This is capitalism people. Get used to it.

#63 ILoveCharts on 01.31.16 at 4:17 pm

You can’t compare Vancouver to Victoria. You might as well say that Toronto and Detroit are the same because they appear close together for someone looking from across the continent.

#64 ed on 01.31.16 at 4:22 pm

“Thinking is difficult, that’s why most people judge.” [Or blame a scapegoat]. ― C.G. Jung

Looking at the dumbed down education system in BC (and the fact at least 50% of people here start smoking pot in their teens before their brains have fully developed), the future of good ideas and good solutions does not look good.

#65 Investx on 01.31.16 at 4:24 pm

And how about some stats to show what proportion of Canadian mortgages are subprime?

Might not be significant if years after hitting debt levels comparable to the US and we haven’t experience a crash, let alone a melt, yet.

Otherwise, wouldn’t this broken clock have been correct years ago?

#66 Mark on 01.31.16 at 4:34 pm

“The parents put the downpayment down on the Toronto house. Some have 1.2 million dollar houses. Their total income is below 90k. This is making colleagues talk, as you can imagine.”

“Now, does this ‘type of buyer’ represent a large part of purchases in Toronto? Probably not.”

Seems reasonable, although as you point out, not sure if such is statistically representative. The key is that there’s still a huge amount of debt involved.

The “HAM” promoters want you to believe that every Asian person in Canada is bringing large amounts of ‘cash’ from overseas to buy Canadian RE, without credit. This “HAM” theory simply is not supported with evidence. For starters, there just isn’t much CAD$ overseas to actually bring to Canada.

#67 Victoria Real Estate Update on 01.31.16 at 4:35 pm

# 40 Frank

Are you a realtor? Probably.

Read the facts again, digest and accept them.

Only 0.68% of sales were to Asian buyers in Victoria in 2015. That’s all of Asia, not just China.

Make all the excuses you want, but the facts can’t be changed.

There is nothing misleading about the facts.

What’s been misleading has been the words of those realtors who have told locals false things, for example, that wealthy buyers from China have recently discovered Victoria and are driving the market and pushing prices higher.

It sounds like you are one of them.

#68 Brazil ex-pat on 01.31.16 at 4:37 pm

I keep reading on this blog there is no data on foreign ownership yet there are charts on foreign ownership.

Which is it? I think the convenient relatives theory makes the most sense as I keep hearing and reading about it all the time. Plus its what everyone does all over the world including here in Brazil. HAM lives people !! One of many reasons we left (the politics not the people :-) Loving the 12% interest we earn in the bank with our converted USD !! No portfolio required. And by the way, the $R has GAINED against the Cdn dollar in the last 4 months for all you Brazil doomers. Look in your own back yard.

Speaking of where’s the data? Yet another reason why global warming is a complete scam. The data is corrupt. But the data comes from government so what else is new.

http://dailycaller.com/2016/01/28/300-scientists-want-noaa-to-stop-hiding-its-global-warming-data/

#69 Of debt & data - Realties.ca on 01.31.16 at 4:40 pm

[…] Source: http://www.greaterfool.ca/2016/01/31/of-debt-data/ […]

#70 Brazil ex-pat on 01.31.16 at 4:42 pm

Mark

Offshore money is the source of the tidal forces washing over Vancouver.

If that were remotely true, then there would be a much greater lift in all asset classes in the Vancouver area, not just RE and the local banking sector’s asset base (ie: loans). But right now, the data appears to better support the idea of foreign *selling* of Canadian assets, not the purchase of such. In fact, as a friend of mine who flew to Shanghai ex-YVR the other day commented, she’s never seen so much in terms of exit currency inspections “at the gate” in her time travelling the route ever.

++++++++++++++++++++++++++++++++++++

Yes because a piece of crap 40 year old townhouse in E. Van worth 1.1 million gaining 250K in 290 days with a 70K average family income definitely points down……

oh wait…..that statement is remotely wrong

#71 Mark on 01.31.16 at 4:43 pm

“And how about some stats to show what proportion of Canadian mortgages are subprime?”

A lot of that would turn on how ‘subprime’ is defined. The loosest definition of ‘subprime’ is simply mortgages which are not considered prime — mortgages which are judged by the banks not to be of high enough quality to go onto their books without insurance or other enhancement. By that measure, most CMHC-insured mortgages, at least at the time of issuance, are subprime. And this makes up a very large chunk of the Canadian marketplace.

In the USA, they tended to commonly define ‘subprime’ as anything >80% LTV, as that’s the threshold that Fannie Mae/Freddie Mac required. In Canada, the minimum for a prime loan is 20% down per the Bank Act, but banks in practice typically have set the threshold much higher.

Of course, bankers, Realtors, and mortgage brokers have, on both sides of the border, played fast and loose with the facts and definitions, distorting and twisting such to fit their own narratives. For example, some industry people will tell you that LTV has nothing to with mortgage quality — an obvious mistruth, but there are literally people who run around claiming 95% LTV mortgages are not subprime, even though, in the practical sense, not a single financial institution or investor in the world considers them to be ‘prime’.

So if you get an answer to your question, be very careful with definitions, and make sure the definition that is used in, say, your Canadian data, is matched against a similar definition in your comparison dataset.

#72 Victoria Real Estate Update on 01.31.16 at 4:47 pm

# 53 Rexx Rock

You really have no clue about Victiria’s housing market.

Prices don’t rise here every year. We had 4 years of falling prices from 2010 through 2014 (at least) and that was while 5 year mortgage rates were falling. All other major Canadian markets showed strong price gains over the same period of time.

I’ll gladly post charts for you showing these and other important facts that will remove any misunderstanding that you have.

If there was any improvement in prices in Victoria in 2015 it sure wasn’t anything like what the local real estate board’s frankenumber stats show.

Overall, Victoria’s housing market has performs weakly compared to other Canadian markets since 2010.

Those are the facts.

In typical fashion, you have, once again, written false things about Victiria’s housing market that have no facts to back them.

#73 Johnny D on 01.31.16 at 4:49 pm

#62 Ryan S. on 01.31.16 at 4:01 pm
This is capitalism people. Get used to it.
———————————————-

Last time I checked, giving people something they haven’t earned was called socialism. Zero-down-40-year mortgages are a prime example of this, and is apart of what kicked off this frenzy.

#74 broader mind on 01.31.16 at 4:49 pm

So all the smart foreign buyers have left the greatest real estate pyramid game of all time and are leaving Canadian banks and Canadian’s holding the bag (the greatest fools).Our poor government has no idea how to safely unwind this mess.

#75 Mark on 01.31.16 at 4:50 pm

“mark see above – up 80 million (100%) in 2 years is not down a ‘few percent’”

Two properties are hardly a statistically relevant sample. For all we know, this particular developer owns multiple properties in the GVR and is just flipping them between related companies to generate higher valuations for their other properties which are being unloaded. Have you ever heard of the concept of “pump and dump”? Should be very familiar to Vancouver-ites as Vancouver stock scams are basically legendary.

#76 Victoria Real Estate Update on 01.31.16 at 4:52 pm

Correction: 2010 through 2013 ( at least)

#77 ROCK BEATS PAPER on 01.31.16 at 4:57 pm

Those pesky foreigners have oversupplied the oil market by 2% and look what happened. Removing 5% of inventory from a market has a huge effect at the margin.

#78 Victoria Real Estate Update on 01.31.16 at 5:00 pm

# 53 Rexx Rock

. . . . . .Single Family Home Prices. . . . . . .
Percent Above/Below May 2010 Price Level
. . . . . x = Victoria, * = Saskatoon. . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . .
+ 9%. . . . . . . . . . . . . . . . . . . *. . . .
+ 8%. . . . . . . . . . . . . . . . . . . . . . . .
+ 7%. . . . . . . . . . . . . . . . . . . . . . . .
+ 6%. . . . . . . . . . . . . . . . . . . . . . . .
+ 5%. . . . . . . . . . . . . . . . . . . . . . . .
+ 4%. . . . . . . .*. . . . . . . . . . . . . . . .
+ 3%. . . . . . . . . . . . . . . . . . . . . . . .
+ 2%. . . . . . . . . . . . . . . . . . . . . . . .
+ 1%. . . . . . . . . . . . . . . . . . . . . . . .
. .0%. . .x*. . . . . . . . . . . . . . . . . . . .
– 1%. . . . . . . . . . . . . . . . . . . . . . . .
– 2%. . . . . . . . . . . . . . . . . . . .x. . . .
– 3%. . . . . . . . . . . . . . . . . . . . . . . .
– 4%. . . . . . . . . . . . . . . . . . . . . . . .
– 5%. . . . . . . . x. . . . . . . . . . . . . . . .
—————————————————————-
. . . . . May. . . May. . . . . . . November. .
. . . . .2010. . .2012. . . . . . . . .2015. . . .

(sources: price index – Victoria’s R/E board (website), Saskatoon’s R/E board)

Follow the * symbols from left to right for Saskatoon and the x symbols for Victoria.

EPIC HOUSING MARKET FAILURE

At the end of November 2015, SFH prices in Victoria were 2% below the peak level reached in May 2010, according to the local board‘s index. Victoria’s housing market simply failed to take advantage of the lowest interest rates in Canada’s history.

Interest rates have been at emergency levels since 2009. As a result, all Canadian housing markets should have posted strong price gains each year that this strong stimulus has been in place. Saskatoon’s market did what it was supposed to. Victoria’s didn’t.

No excuses. Failure is the only conclusion that can be drawn here.

THE MYTH OF VICTORIA’S WARM WEATHER ADVANTAGE

The chart busts this myth. Clearly the colder city won.

There is no correlation between average winter temperature and the price performance of a housing market. US data backs this up.

HOUSE PRICES FALL AS RATES RISE

This sums up the future of house prices in Victoria.

No matter what the Bank of Canada does with its key rate, Canadian 5-year fixed mortgage rates will be moving higher, beginning almost immediately, for the next 2 to 3 years. The bond market controls fixed rates. All first-time buyers in Canada will be affected by this.

SUGAR-COATED STATS

Realtors have a vested interest in keeping house prices high in Canada.

The index levels (stats) used to put the above chart together were taken from the local board’s website. Many would argue that the 2% price decline since 2010 is fudged to some degree and that the actual price decline is more than that. We are, after all, talking about the local board’s frankenumber.

#79 Victor V on 01.31.16 at 5:05 pm

http://www.bloomberg.com/news/articles/2016-01-29/canada-s-one-legged-stool-economy

Abraham Lincoln famously said that “a house divided against itself cannot stand.” One corollary that Canadians can take as gospel: An economy built on housing can’t stand for too long either.

#80 Linda on 01.31.16 at 5:06 pm

Regarding Damien’s Mom – it does not matter if she ‘might’ gain another $100,000 in potential value by waiting to sell. Here is a 66 year old who is recently laid off, hasn’t ‘enough’ to live on & is sitting on a property that has a mortgage. Hopefully she has substantial equity, but even if not, sell asap for the highest price possible (she can always hold out for the best price but list it NOW) & hopefully shed that sucking wad of debt before the market sheds value. If she does have equity north of 50%, then she will exchange debt for what will hopefully be ‘enough’ to live on & maybe even in comfort. Yes, she’d have to rent but news flash – despite the many news articles on planning to live to age 90 or even 95, not everyone is going to live that long. The lady should enjoy life while she still has it, not be worrying about how she is going to pay the mortgage or find work at age 66.

#81 Robert on 01.31.16 at 5:06 pm

Nope, no HAM here in BC? The spillover effect from YVR to YYJ is real enough. http://www.theprovince.com/business/follow+money+vancouver+real+estate+market+concerns+spring/11683456/story.html?google_editors_picks=true. So where is Revenue Canada in all of this? Instead of going after legitimate high income earners here who are playing by the rules, RevCan could be zeroing in on the property flipping, non-declared foreign income, AirBNB rental, money laundering crowd. Tax evaders, whether foreign resident or home grown, should be target numero uno. Why they could even re-assign the auditors that Harper had bullying charities and church groups.

#82 fleabitten monkey on 01.31.16 at 5:08 pm

Garth the Clark Govt in BC is also on record as saying they’d be careful before doing anything to impact foreign ownership of local RE because they wouldn’t want to damage the equity people currently have in their homes. How does this reconcile to what you have captioned in today’s post. Its contradictory. On one hand they say it has little if any impact on the other they infer putting up barriers would damage the locals.

#83 Mark on 01.31.16 at 5:09 pm

“In our hood in East Van the townhouses we live in have just reached a record selling price of $1.1million. Whereas 7 months ago, just last summer they reached a new record of $850K. How does this make any logical sense?”

Ummm, perhaps the sales mix last summer was more uniformly distributed amongst the population of townhouses, while right now, only the highest end models are moving?

I don’t have data specifically for individual areas of Vancouver, but vigour at the high end, and a slump at the mid to lower-range (ie: closer to the entry-level) has characterized a large amount of the Canadian RE marketplace. So what you’re probably observing is not prices having risen $250k on identical existing townhouses, but rather, that the mix of properties moving has shifted dramatically more towards the higher end. Even from townhouse to townhouse, there can be substantial variations in interior finishings and long-term upkeep which can have a significant impact on realized pricing. Especially these days with the trend being towards extensive renovations prior to (re)sale.

#84 BS on 01.31.16 at 5:11 pm

bdy sktrn on 01.31.16 at 3:44 pm

here’s your ‘local’ westside buyers.

see it’s not foreigners afterall!

These are developers who bought the land in downtown Vancouver (not the westside) to build condos. The condos will be sold to locals who will use CMHC insured mortgages to buy them. This article actually proves Garth’s point on who is driving the market.

#85 Joe2.0 on 01.31.16 at 5:15 pm

#53 Mark
Judging by housing prices and grocery costs and the way my salary continues to go less far I’m going inflation.
But how about both, inflation and deflation during the unwinding of this financial global mess…

#86 not 1st on 01.31.16 at 5:18 pm

Ahh Garth, you are still at pains to understand vancouver. You still think 30 somethings with $70k jobs are borrowing a couple hundred G from broke boomer parents then going into the bank and begging for million dollar loans.

NONE of that is happening. People with 70k jobs are leaving in vancouver.

The remaining Canadian asian expats are collaborating to onshore chinese business gains into a capital exempt asset ie house. They often use collateral loans in Macau to do this because you cannot take more than $50k out of china at one time.

But you will never believe that will you?

#87 Lulu on 01.31.16 at 5:22 pm

highest RE in the world already burst namely Hong Kong, there already a downward trend yet still ranked No 1 in the world and expert predicted that citizen need to save 19 years straight without eating and spending, just save up their salary to buy a average apartment there, you call Vancity and T dot crazy? Even Australia ranked ahead of Vancity this year to No 2 after HK.

Imagine if all of us don’t need to pay any sort of tax and how easily to afford RE in Canada, in my dream!!!!

#88 Turtle on 01.31.16 at 5:24 pm

#17 Cash is King

What kind of work can you find at 66?

Walmart greeter? Competing with college & university students for part-time hours at Tim’s? Charging the kids minimum wage to watch the grandkids?

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

Exactly my point. There are only so many years you can sell your labour, and after that is over… that is it. You are done. If you didn’t build your personal “cash machine” to produce some money without selling yourself, than you would have to sell your asset (house) for money… Cash is King – no doubt.

Garth has mentioned at least one hundred times that the biggest fear of all has to be “to run out of money”. I am afraid. Why do all these 66 y.o. people don’t see it coming?

Mortgage is hard. Do it early in life.

#89 Big Dipper on 01.31.16 at 5:26 pm

I’ve seen regular ads on TV by an outfit promising high yield returns to investors. Claimed it was based on home ownership. The ad suggested it was low risk. I did not note the name of the outfit.

Would this be sub-prime lending? Of course, a second mortgage would be wiped out and worthless in a down RE market.

#90 Goldie on 01.31.16 at 5:27 pm

Foreign FINANCING is the issue, not foreign “ownership”; and unless the government really wants to become intrusive, they won’t track any of that money as part of this weak and useless study. The numbers will show much lower “foreign ownership” than is actually the case.

The government will do whatever it can to downplay foreign ownership because it is in their best financial interests to do so. The study will show a hilariously low level of “foreign ownership”, they will proclaim from the rooftops that it was “local” all along, then the race card will be taken from its usual place at the top of the deck and put into play.

#91 Kevin Browne on 01.31.16 at 5:28 pm

Garth – how much of a mortgage rate increase would it take, in your view, to spur a correction in the housing market? How much of a US interest rate rise would it take to see that kind of increase? And roughly what timeline?

My thoughts are that if the US rises by 1% this year (with the justification of continued job creation), and continues to rise into 2017, we could see mortgages 1% higher in Canada in 2017, which would be enough to cool down if not spur a correction in the housing market.

#92 The Iceman on 01.31.16 at 5:45 pm

Well…here we go again. Thanks, Garth, for opening-up this can of worms again.

I fail to see why you do not recognize the elephant in the room here in Greater Vancouver.

At the higher-end market for single family homes in Greater Vancouver, the effect of offshore (mostly Chinese) buyers is a slam-dunk. I can cite numerous articles (from reputable publications) stating this – please see below.

The B.C. Ministry of Education did a survey last year of the percentage of ESL students at each school. As I have noted before, the percentage of ESL at Cook Road Elementary in central Richmond (…a few blocks from my place) is 66% (…yes…2 out of every 3 students). Please explain this? These are not kids of Canadian-born Chinese, since they would already know English.

Have you been to Vancouver lately? Have you been down “the main drag” in Richmond (No. 3 Road)? You would think you’ve just landed in Hong Kong. (There are several recent local news stories of the residents here starting to get pissed-off because they feel like foreigners in their own country. There is a strata about 1 km south of my place that now conducts their meetings totally in MANDARIN. Are you kidding me? And you’re telling me that the Chinese have little effect on real estate prices here?)

I encourage you to pay a visit out here and to pound the pavement for a few days. In fact, I would love to take you out for dim sum at one of the many hundreds of Chinese restaurants in Richmond.

On a macro-economic basis, how else do you explain the nuthouse that Vancouver has become? If incomes are stagnant, then WHAT is driving the prices higher? …it can only be either: 1) “domestically-sourced” money being borrowed, or 2) money being brought in from the outside (…I pick #2).

You always trot out the stats from Greater Vancouver Real Estate board when stating what they THINK is the (“low”) percentage of foreign buyers in Vancouver. Yet you always tell us to not believe ANYTHING published by the RE associations. Why do you suddenly believe them in THIS instance?

http://www.richmond-news.com/news/coun-au-sign-language-concern-not-limited-to-chinese-businesses-1.2157127

http://www.richmond-news.com/news/mandarin-speaking-strata-council-to-get-province-s-attention-1.2149587

http://www.richmond-news.com/city-hall/chinese-sign-cop-can-expect-abuse-1.2130987

https://www.biv.com/article/2015/12/dont-expect-vancouver-home-prices-cool-any-time-so/

https://www.biv.com/article/2015/11/controversial-foreign-ownership-study-about-money-/

https://www.biv.com/article/2015/6/4m-teardown-sells-1m-over-asking-price-throwing-mo/

#93 Mark on 01.31.16 at 5:46 pm

“Would this be sub-prime lending? Of course, a second mortgage would be wiped out and worthless in a down RE market.”

Of course. Its paper the banks/credit unions/CMHC won’t touch, which says pretty much everything you need to know about it.

“how much of a mortgage rate increase would it take”

Shouldn’t take any rate increase to drive a continuation of price declines. Overcapacity and demand exhaustion leads to lower prices. Lending standards additionally are tightening independent of rate changes. Additionally, it is likely that incomes are deflating in much of Canada. Rates could (and probably will) come down even further and the RE market probably would not reverse course.

Foreign FINANCING is the issue

How so? There is very little evidence for any foreign involvement in financing Canadian RE. And the Canadian banking sector is almost entirely internalized to Canada.

#94 For those about to flop... on 01.31.16 at 5:49 pm

#89 Big Dipper on 01.31.16 at 5:26 pm
I’ve seen regular ads on TV by an outfit promising high yield returns to investors. Claimed it was based on home ownership. The ad suggested it was low risk. I did not note the name of the outfit.

Would this be sub-prime lending? Of course, a second mortgage would be wiped out and worthless in a down RE market.

////////////////////////

I believe the outfit you speak of is known as Capital Direct.

M41b

#95 Cici on 01.31.16 at 5:50 pm

#27 Nobody

So funny! You rock ;-)

#96 fleabitten monkey on 01.31.16 at 5:52 pm

Mark #83
These are identical units Mark. Same complex, same space. I live in them. In fact 2 just sold last week for $1.1 mill. The first sold advertised. Then a neighbor approached the realtor and sold to one of the unsuccessful bidders on the first property. There is an openhouse today for one in another row and it won’t be hard to bet what price it will end up getting. So, like I said, insanity.

#97 Hellandback on 01.31.16 at 5:56 pm

All you have to do is walk around the malls in Victoria and you can clearly notice the increase in Asian families and not just students. The demographic is definitely changing.

To say they are not having an influence in Vancouver and not responsible for the luxury market increase is putting the blinders on. Every fact known is billions are leaving China to Vancouver to put into real estate. Even the banks admit it. How could it not influence it ? Not to mention the mass corruption in the real estate bizz that’s uncovered every week in the media.

Believing Christy Clark is like believing in Santa Claus. The woman is a pathological liar and a politician.

And it’s just so handy Asians look different, isn’t it? — Garth

#98 For those about to flop... on 01.31.16 at 5:59 pm

#90 Goldie on 01.31.16 at 5:27 pm
Foreign FINANCING is the issue, not foreign “ownership”; and unless the government really wants to become intrusive, they won’t track any of that money as part of this weak and useless study. The numbers will show much lower “foreign ownership” than is actually the case.

The government will do whatever it can to downplay foreign ownership because it is in their best financial interests to do so. The study will show a hilariously low level of “foreign ownership”, they will proclaim from the rooftops that it was “local” all along, then the race card will be taken from its usual place at the top of the deck and put into play.

////////////////////////////////

Hey Goldie ,I guess I was trying to say something similar in post # 15.
The term you used was” foreign financing “where as the term I came up with was” foreign influence ” because I work on jobs where the money is coming from China but they have Chinese / Canadians helping get the deal done so the numbers could show up on both counts.

M41BC

#99 johnnny on 01.31.16 at 6:11 pm

#56 – Leo Trollstoy – fundementally wage slaves are cowards.
Any idea how many of our “conflict” armed forces veterans are now wage slaves?
Are they cowards tough boy?

#100 Big Dipper on 01.31.16 at 6:14 pm

#283 BS on 01.31.16 at 1:06 pm

(1) “The only problem is that NDP label sends investment capital fleeing ”

(2) “The Saudis are manipulating the price of oil? Actually they are doing the opposite by not cutting production.”

—————————————————-

(1) Apparently not. So far the NDP label has proven to be of substantial benefit to Corporate Alberta.

(2) you Sir, are an idiot.

#101 Popeye the Sailor Man on 01.31.16 at 6:18 pm

If they think the 0.68% Asian has goosed the market wait till the 5.66% from Alberta can’t sell there Alberta home to retire in Victoria.

It would take only a 12% drop of them migrating to Victoria to wipe out the Asian effect.

Thoughts any one?

#102 acdel on 01.31.16 at 6:29 pm

As an Albertan; as you know we are going through fairly rough times but reading the comment from all of those on the West Coast wishing to get ahead and make a life for themselves; man, I feel for you! I am starting to get the impression that you are much worst then we are here! It’s not right for all the hard workers to be placed in this situation; something needs to change..

#103 ben on 01.31.16 at 6:31 pm

Looking forward to these idiots taking on sub-prime getting a good rinsing. Why should the risk-adverse be outbid by the innumerate?

And as your chart shows there is no HAM coming to top things up when prices tank.

Prices are high because Canadian banks are creating fresh money irresponsibly, by their staff in order to secure bonuses.

Same as the USA. Same as the UK where we had a bank run. It’s the banks.

#104 Harbour on 01.31.16 at 6:33 pm

#51 North Burnaby on 01.31.16 at 3:22 pm

Be greedy when others are fearful. Its time to buy into Calgary & Ed,onton real estate market
……………………………………………………………………
Never try and catch a falling knife

#105 Jimmy on 01.31.16 at 6:39 pm

Re #92 The Iceman

So many of us locals can see it. Garth just doesn’t want to offend anyone so he denies it. Just go for a walk in Vancouver and you see Chinese any where there is a for sale sign.

Vancouver has the largest Asian population in the country. They are Canadians, not ‘Chinese.’ They like real estate. As do you. Suck it up. — Garth

#106 westcoaster on 01.31.16 at 6:39 pm

I said, clearly, Victoria is not Vancouver. But if investment in VYR is 10 times that in Victoria, the total will be about 6%. Close enough to realtor numbers. — Garth

So, I would like to ask you this question, Garth. How come you dis other realtor “data” but are so ready to swallow the info from that same source that downplays the foreign investment component.
You (and they) can’t have it both ways. They appear in the media with their helicopters, etc. and yet when people express fear of the yellow horde they spout data inferring that the Asian $ component isn’t so significant?
Not sure if there’s a credible “arm’s length”/objective party that could cut to the truth of it.
Make no mistake, I’m a huge GT fan, having read this blog and put it into practise even predating the blog’s existence. I respectfully maintain, however, that you’ve got this wrong. I also notice in your comment that you do not address the historical element in this: Vancouver has changed for decades now. That is the reality. To say that the current purchases come overwhelmingly from “Canadians” doesn’t address the legacy of $ dating back pre-1990.
Also, saying that you “clearly said Victoria isn’t Vancouver” is a non-starter for me in parsing out your argument as posted in this blog.
Respectfully………

#107 ben on 01.31.16 at 6:40 pm

Jesus christ. “Be greedy when others are fearful”. Do you have any idea, Burnaby, how many finance forums that’s trotted out on? Think it’s clever?

If you’ve been interested in economics for 4 weeks here’s the digest:

1. “in the long run we are all dead” – Keynes. Trotted out by any idiot who can’t respond to something

2. “Be greedy when others are fearful” Buffet – if you think Buffet dives in every time there is a drop and wins ask him about UK Tesco.

3. “It’s supply and demand” – enough already my simple friend

4. “If the currency drops it’s good for manufacturing” – I guess you boys don’t like evidence.

The web is *full to the brim* of guys with quotes like this. Every. Day.

#108 Gerry on 01.31.16 at 6:41 pm

“hristy Clark is on record as saying most real estate deals in YVR are local-to-local, while her government claims: “There is a perception that foreign investors and speculators are driving an affordability crisis in residential real estate — particularly in Greater Vancouver. The data we have does not support this perception.” Meanwhile the realtors say their numbers show “less than 5%” of buyers are non-residents.”

Chrisy Clark is an idiot. It boggles the mind how such a simple mind got in power. She is the most dishonest, opportunistic Premier we have ever seen. What data is she referring to? The data she refuses to collect? Those developers weren’t stupid when they funded her campaign.

#109 Ronaldo on 01.31.16 at 6:52 pm

#3 Turtle on 01.31.16 at 12:04 pm

”What kind of work can you find at 66?”

Feeding turtles at the Vancouver aquarium.

#110 Freedom First on 01.31.16 at 6:52 pm

#80 Linda

Linda, your post nailed it perfectly. Pure wisdom.
———————————————————-

Yes. Debt’s a disease. And it’s world wide since
forever.Be it RE markets, stock markets, PM markets, tulips, anything. World wide, the financially fear and greed driven masses behave counter intuitive to sound financial management.

Let’s just look at all Canadian consumer debt levels right now, be it credit card debt, student debt, consumer loans, pay day loans, mortgages, helocs, LOC debt. The debt levels are astronomical.

Many many many Canadians are being financially de-nutted this very moment, however, sadly, many more Canadians who are currently engaged in financially deviant practices think it wont happen to them.

Lastly, just because some people have money, or make lots of money, don’t think for a minute they are not capable of gross financial mismanagement. The only difference between them and the less wealthy, or lower income people, is that the numbers are bigger. Count on it.

#111 John on 01.31.16 at 6:56 pm

#41 – the MINIMALISM THINGY…. is the future whether we go there willing or unwilling ; it is indeed liberating. No debts; good investments, cash anmost importantly free from the cravings of keeping up with the Jones, BMWs, granite, Caribbean cruises, nightly bar hopping, disigner this or that on a whim. It’s great! Now there are degrees of minimalism comfort level, but laughing in the face of the next gadget or whatever etc is empowering. Go ahead Poloz make my day. We’re not playing. Our adult kids are learning real fast on this file. Ok, we’re nags; but with good hearts… like Garth.

#112 Bottoms_Up on 01.31.16 at 6:56 pm

#90 Goldie on 01.31.16 at 5:27 pm
————————-
Agreed, the actual point of this exercise should be to determine where the money comes from. And not that a canadian addressee has purchased the place.

#113 mark on 01.31.16 at 6:57 pm

Those figures aren’t that surprising. I was in Victoria last year, the demographics looked like Victorian England.

#114 John on 01.31.16 at 7:00 pm

At some point the paradigm will slide along the ol’ slide rule to minimal, quality and simpler alternatives and much more rewarding associations, family and puppies to make you feel warm and fuzzy…………. Multiply that by millions of people and even Walmart starts to squirm. As for the square foot floggers. Career change may be on the horizon.

#115 genbizx on 01.31.16 at 7:03 pm

how can we trust the data the feds or province find? hasn’t this blog talked about the ridiculous state of data gathering on anything and everything related to real estate? would any of these real estate pushers want to stop the gravy train?
” oh, look at the data…we gathered it ourselves…see this line right here? yep..95.3% local to local transactions…ya right…

#116 Fine Wild Roasted Gonads on 01.31.16 at 7:04 pm

#41 WUL on 01.31.16 at 2:31 pm

I am buying into this whole minimalism thingy.

Today, I move across Ft. Mac to my new tenancy. I have not bought gasoline in 2 and ½ years. Liberating.

Everything I own fits into a hockey bag except my collection of old and vintage car batteries (about 30 of them).

I agreed on the el cheapo rental about January 10. On or about January 20, the owner of the shack said he was going to list it for sale. That clinched the deal. It means about 14 months of secure renting.

My next comment will be from the other side of the mighty Athabasca River.
————
You really are washed up! Don’t all the Ft.Mac lawyers live in Calgary?

#117 Hellandback on 01.31.16 at 7:05 pm

Garth, you need to get off playing the race card. It’s common sense observations. Your credibility is waning.

You talked about ‘mall Asians.’ Maybe you should worry about your own creeds. — Garth

#118 the Jaguar on 01.31.16 at 7:07 pm

Can we please qualify the term “foreigner” for all time on this blog?
A person who is a non resident of Canada can buy a property in Canada and obtain financing from a Canadian bank.
A permanent resident of Canada ( who might be someone who was just granted this status from the government of Canada and was born in another country) can buy a property in Canada and obtain financing from a Canadian bank.
People who are resident in Canada but not citizens of Canada ( working permit, study permit, etc) can obtain not only financing from a Canadian bank, but assistance from CMHC, Genworth, etc. to buy a property in Canada.
The point is that the term ‘foreigner’ as it applies to who is buying property in Canada is a little more complex than just throwing around the word ‘foreigner’.
A more interesting question is the same one that applies to all similar matters. Motive, Means, Opportunity. Who stands to benefit. Follow the money. The truth can always be found using that methodology.

#119 SoggyShorts on 01.31.16 at 7:09 pm

When we read “sales dropped 5% compared to last year”
Is that just from MLS listings, or does it include new homes?
I do work on new builds only, so I’m not nearly as interested in bob selling to dave as I am Jayman or Pacesetter….

#120 Alberta Blue Blood on 01.31.16 at 7:10 pm

Those stats could be fiddled with because of all the hoops non-residence buyers must go through.

We lived in Europe for 5 years, was shocked to find out that if we wanted to buy a home back in Canada, we would be considered non-residents, even if we said we were moving back for good.

The reason we were considered non-residents for home buying purposes? Because our money was (and still is) coming from outside of Canada. Even if you are a Canadian citizen, born and raised here.

Also, non-residents need at least 35% down, which we had. In BC people who don’t live in their homes full time pay a premium in property taxes. It’s very prohibited for non-residents to buy in Canada.

How did we get around those pesky rules? Our son ‘bought’ the house; it’s all in his name, we just pay the bills.

And I’m offsetting the small mortgage by running a B&B from the home, something you can’t do from a rental. The B&B customers will pay 100% of my living expenses, not to mention the plush tax write-offs I’m invoking.

I’m just pointing out that stats like this can be wrong. The stat they need to follow is how many people in Van own more than one house? I think that would prove very interesting.

#121 Big Dipper on 01.31.16 at 7:12 pm

#94 For those about to flop… on 01.31.16 at 5:49 pm

#89 Big Dipper on 01.31.16 at 5:26 pm
I’ve seen regular ads on TV by an outfit promising high yield returns to investors. Claimed it was based on home ownership. The ad suggested it was low risk. I did not note the name of the outfit.

Would this be sub-prime lending? Of course, a second mortgage would be wiped out and worthless in a down RE market.

////////////////////////

I believe the outfit you speak of is known as Capital Direct.

M41b

————————————-

Right. Thanks!

#122 Mark on 01.31.16 at 7:13 pm

“https://www.biv.com/article/2015/11/controversial-foreign-ownership-study-about-money-/”

Glad you posted this “The Iceman”.

A very relevant phrase:

“There is a public perception that mainland Chinese homebuyers are buying Vancouver houses with cash, but in the properties Yan studied this was not the case: 82% of the properties in the November 2 study had a mortgage, while 69% of mortgaged properties held mortgages from three banks: HSBC, CIBC and RBC.

There you go. Just credit junkies doing what they do best at the tail end of a bubble. Very little real “skin in the game”.

#123 Balmuto on 01.31.16 at 7:15 pm

“If people are borrowing from these lenders at 12% and also have an 80% mortgage with a credit union or maybe a bank if they’re lucky, wouldn’t this be considered sub-prime?”

I remember a 12% mortgage being offered by one of those payday loan places many years ago. At that time normal rates were around 6% I believe. I still thought it was a rip-off then. But in this environment, a 12% mortgage is simply usury. Any one taking these things out as a way to get into a market that they can’t afford really needs to give their head a shake.

#124 West Coast on 01.31.16 at 7:18 pm

http://www.theglobeandmail.com/news/british-columbia/officials-concerned-homebuyers-unaware-of-real-estate-risks/article28471686/

“the B.C. Securities Commission concerned about the level of speculation, misrepresentation or plain ignorance emerging”…. concern rising re speculation in and around Vancouver’s last “affordable” housing area….
Ever wonder where seniors, young renters and ‘regular’ working folk with young families live………….welcome to the ‘West End’ (NOT the West Side!!) Remember we have ‘The West End (see community plan link below), The West Side (from Ontario St. west to where the UBC endowment lands begin) and West Vancouver…that would be over the Lions Gate Bridge….

The West End needs more affordable housing……”over
2,800 households spend more than 50% of their
income on rent. Of these households, 55% are
singles, 27% are families and 18% are seniors.”
City of Vancouver – West End community Plan
http://vancouver.ca/files/cov/west-end-community-plan.pdf

#125 Mark on 01.31.16 at 7:18 pm

“And I’m offsetting the small mortgage by running a B&B from the home, something you can’t do from a rental. “

Why not? I’ve rented a few places in my time as an adult. Never have I seen a prohibition in a lease agreement against such activity.

#126 3s on 01.31.16 at 7:34 pm

In Sydney the same thing is happening. Pollies refuse to look into the effect of Chinese buyers while pointing at the “lack of evidence ” numbers , all while every man on the street can see with their own eyes the Asian buyers at auctions and piling out of over crowded apartments (the sewerage systems buckles under the load in most buildings) leased to cash paying Asian “students” with under reported rental income to the taxman, all while the whole scheme is marketed in China as a win only investment/path to residency! The cash and peer to peer nature of the whole thing makes it fly under the radar and is the very reason it is spreading like a wildfire! While back in regulation land, the numbers point to a blissful sleepy meadow….

#127 Big Dipper on 01.31.16 at 7:39 pm

The Victoria pie chart shows 87.24% “from BC”. What is the definition of “from BC” and how is it determined? For example:

-The buyer showed a Canadian passport and evidence of BC residence;

-The buyer showed a drivers licence;

-The buyer had a Canadian bank down payment cheque;

-The buyer was in BC on vacation and give a hotel address;

-The buyer had some temporary residency status;

-Etc.

If we do not collect this kind of data it can not be analyzed.

FINTRAC beat you to it. — Garth

#128 tkid on 01.31.16 at 7:40 pm

Link of the week:
http://jlcollinsnh.com/2012/01/06/index-funds/

Got it via http://www.mrmoneymustache.com/2012/05/29/how-much-do-i-need-for-retirement/ with a side trip to http://thepowerofthrift.com/

I know Garth believes thrift is about as sexy as a rhino’s mating call in January, but if you consider RRSPa and TFSAs to be a bill a la Hydro, Water, and Cable TV and always ‘pay ’em off’, you will do just fine.

#129 dutch4505 on 01.31.16 at 7:46 pm

Norman Blake…..American folk singer

“money was scarce, and times was bad, the groceries mighty plain”

welcoming vancouver to the new world order in late 2016/early 2017

#130 IKnow on 01.31.16 at 7:47 pm

Here goes again, yawn

When is HAM HAM, and when is HAM not HAM ?

Mr. Smith of Point Grey won the realty lottery!
Paid 500k 25 years ago, not cashed out $4M
Three kids, gave each kid $1M to buy a standard lot in Burnaby.
Is that $1M HAM or not HAM ?

Mr. Chen finished Masters degree, gets a job, gets landed status.
Parents are just middle class back home (avoiding the C word), send over $0.5M for Mr. Chen as downpayment for a moderate townhouse in Scarborough, is that HAM?

Mrs. Dai Ma landed immigrant, no income, but lives in a $3M house with W in her Vancouver address.
Looking for rental properties, tells her realtor to drive her around, promise to buy one house for every three shows (yes and real, I heard that), and will repeat that a few times.
The money passes through her hand, is that HAM?

#131 rk usa on 01.31.16 at 7:48 pm

re: a townhouse in Vaughan worth roughly $700,000

the Canadian Dream?

I think I would hang myself first

#132 John on 01.31.16 at 7:56 pm

First. Meaning saw our first robin today, January 31, 2016. Earliest ever. Forget Wiarton… .. Looks like it might mean an early hormone pumping housing event … or not.. just as likely a snow storm rocks robin…

#133 Panhead on 01.31.16 at 7:59 pm

#102 acdel on 01.31.16 at 6:29 pm
As an Albertan; as you know we are going through fairly rough times but reading the comment from all of those on the West Coast wishing to get ahead and make a life for themselves; man, I feel for you!

Don’t feel too sorry for us, we have done this to ourselves. You have to live out here to understand the mindset. It’s boggling at times to say the least.
Was back in northern Alta last fall for a wedding and spent a night around a campfire talking to a lot of locals out there and was happy to meet so many quality people … should have more of them out here … hope the pain doesn’t get too bad out there … we are all in this together …

#134 Entrepreneur on 01.31.16 at 8:14 pm

Collecting data is a good start but am not trusting their stats for the correct figure. Also, what I learned from an investment meeting is that the people buying in Vancouver do not even need a bank. So after reading the comment section money is been transferred through various means but not legally, I believe that. Where are the CRA hound dogs? You would think that they would be all over this sniffing this out!

Don’t give us any figures; give us the truth!

#135 acdel on 01.31.16 at 8:18 pm

#133 Panhead
#102 acdel on 01.31.16 at 6:29 pm
As an Albertan; as you know we are going through fairly rough times but reading the comment from all of those on the West Coast wishing to get ahead and make a life for themselves; man, I feel for you!

Don’t feel too sorry for us, we have done this to ourselves. You have to live out here to understand the mindset. It’s boggling at times to say the least.
Was back in northern Alta last fall for a wedding and spent a night around a campfire talking to a lot of locals out there and was happy to meet so many quality people … should have more of them out here … hope the pain doesn’t get too bad out there … we are all in this together …
—————————————————————–

I lived in Van during the good old 80’s; it probably my fondest memories if life, it was a real pleasure at that time. Yes, we are all in this together but I can see through all the comments that people are frustrated, lost, scared and envious. Canada as a nation is lost; perhaps Garth’s blog can get our collective minds together and make a difference. I know, many have called me delusional and many other descriptive s that I could care less about, but we can all agree that this is not working on a general purpose. I know I will get some heat about this, do as the French, Italians, etc, work to live not live to work. In all honesty I am still trying to work that lifestyle, C’est la vie!

#136 Herb on 01.31.16 at 8:23 pm

Now that this ugly non-subject has reared its head again, let me post a puzzlement:

Census Metropolitan Area Population 2013 (‘000)
Vancouver: 2,438.8
Ottawa/Gatineau: 1,3029
http://www.statcan.gc.ca/tables-tableaux/sum-som/l01/cst01/demo05a-eng.htm

Median Total Family Income 2013
Vancouver: $73,390
Ottawa/Gatineau: $101,070
http://www.statcan.gc.ca/tables-tableaux/sum-som/l01/cst01/famil107a-eng.htm

Average Single-detached Dwelling Price 2013
Vancouver: $767,765
Ottawa/Gatineau: 358,876
http://www.cmhc-schl.gc.ca/odpub/pdf/68189.pdf

[2013 figures are used because that is the last year for which Statscan figures are available.]

We know that Vancouver is the best place on earth and everybody wants to live there, and that Ottawa/Gatineau is not, but a lot of people have to live there because they work for the federal government or businesses and institutions supporting it. Your mission impossible, should you chose to accept it, is to account for the difference in single-dwelling prices between them without resorting to Asian money, hot or not.

#137 Rick on 01.31.16 at 8:23 pm

3s, didn’t know it was so bad in Australia. I considered moving there, but I’m retired. It seems the only way I can get in, is to tie up $500,000.00. Don’t want to do that:) Guess I can only visit.

Why is calling Chinese, frowned upon by some? Calling someone an American, Canadian or Indian is fine; if that is where they are from. Political correctness, I guess. The nice thing about being financially independent, is you can say what you feel.

#138 BG on 01.31.16 at 8:26 pm

On this topic I think pragmatism should be used rather than political correctness.

Asian or not, if there are such amounts of cash that come through immigration and inflate prices artificially (this money was not earned by producing anything in the Canadian economy) then it should be seen as a problem and addressed.

You can’t just watch middle class income earners getting priced out of the market and just shrug because those new “Canadians have right to bring cash and buy Real Estate”.

When globalization becomes complete, and were basically one country. Then why not.

But until then, I think it’s the government’s responsibility to ensure that people participating in the local economy get a shot.

#139 -=jwk=- on 01.31.16 at 8:30 pm

whether they are canadian or local is irrelevant – it’s where the money comes from behind the sale not the person making the sale! Follow the money all the way to China, says my “local”, recently Canadian Shanghai wife…

#140 Timmy on 01.31.16 at 8:31 pm

DELETED

#141 wallflower on 01.31.16 at 8:38 pm

U.S. GOVERNMENT TO REQUIRE OWNERS OF NEW YORK AND MIAMI LUXURY PROPERTY TO REVEAL IDENTITY
The U.S. Treasury Department today announced it will require people purchasing high end real estate in New York and Miami to disclose who they really are. Global Witness strongly welcomes this move, which will help stop the criminal and corrupt from hiding behind anonymously owned shell companies to launder the proceeds of crime through the property market.
Jan. 13, 2016

#142 What Tha on 01.31.16 at 8:41 pm

Hell and back,

“Mall asians”? Is that like “Scotch Irish”?

#143 Smoking Man on 01.31.16 at 8:43 pm

Testing a new fat finger error fixing key board .

Connetic Mulecular Theories

Huh.

#144 Nobody on 01.31.16 at 8:44 pm

What if the government introduced a law saying that property in Vancouver could ONLY be sold to Chinese?

That way the restricted demand would cause prices to drop, to the point where the 99% protesters could afford to buy – although a majority of them wouldn’t be allowed to.

#145 tundra pete on 01.31.16 at 8:49 pm

The chinese have been in Vancouver since before the railroad was built. They had to pay a head tax in order to come into the country. When they were building the railroad, the only jobs the chinese could get were placing explosives in the tunnels. This of course was very dangerous work. Most were killed.

At the same time Swedes, Italians, Irish, and Russians among others, were also coming into Vancouver. They were spared the head tax. They also worked on the railroad. Most were spared the very dangerous jobs.

B.C. really is the “melting pot”. Been so for a long time. Not much different today than it was in the 1800’s. Maybe a little busier. Foreign buyers are not driving up prices. Stupid, house horny, local fools are doing that. Good luck when that one comes unglued.

#146 espressobob on 01.31.16 at 8:54 pm

Damn these equity markets. Nothing worse than upside. Give us more pain, a lot more. Capitulation equals profit.

Whats an investor to do?

#147 IKnow on 01.31.16 at 8:57 pm

I said, clearly, Victoria is not Vancouver. But if investment in VYR is 10 times that in Victoria, the total will be about 6%. Close enough to realtor numbers. — Garth

———————————-

Garth, what are you trying to demonstrate here?

Is it this: HAM influence in Victoria is nowhere important or even noticeable, a common agreed “fact”, so TEN times that would still be No Big Deal (10 times epsilon = epsilon, Calculus 100). And anybody promoting the theory of HAM in Vancouver must either be racist or have devious ulterior motives?

My hypothesis has been the HAM effect is much more than 5%.
Garth how quantitative are you?
Familiar with critical transition theory?
No, don’t need advanced quantitative degree for that.
It appeals to qualitative common sense.
“Things” do Not scale linearly.
There is a critical or buckling point, with enough stimulation beyond that, for better or worse, the system blows up.

#148 sanddancer on 01.31.16 at 8:57 pm

Garth,
I have lived and worked in vancouver for the past 14 yrs. Many of my colleagues live in the tri-city area and Fraser valley. I have many recent examples of foreign money / buyers and how the local real estate market is being effected.
Your repeated attempts to minimize this effect on the local market is misplaced by quite a bit….it’s the reality of the area good or bad, but it is not insignificant. ..far from it !!!

#149 RazzleDazzle on 01.31.16 at 8:59 pm

Fintrac! Fat chance. Fintrac relies on self-reporting by realtors, mortgage brokers, notaries (but not lawyers!). Inherent conflict of interest as the larger the transaction, the better their bottom line.

“..data obtained by The Province shows that from January 2012 through May 2015 only two large cash transaction reports and five suspicious transaction reports were filed by realtors to Fintrac in the surging Vancouver, Richmond, West Vancouver and North Vancouver property markets.

In comparison, in that time period financial institutions in Vancouver reported 1,278,804 large cash transactions, and 8,246 suspicious transactions, according to Fintrac data. Fintrac is satisfied with reporting compliance from financial institutions, an official said. However, internal Fintrac documents say that banks are erring by not scrutinizing real estate as a high-risk money-laundering sector.”

All the while, a former RCMP investigator has become a private money laundering PI, working for Chinese institutions, has at least 7 investigations on the go.

Seems Chinese institutions are more concerned about this problem than we are.

http://news.nationalpost.com/news/canada/cash-buys-and-illicit-money-federal-audit-probes-vancouvers-real-estate-industry-for-money-laundering

#150 IKnow on 01.31.16 at 9:10 pm

#136 Herb on 01.31.16 at 8:23 pm


Your mission impossible, should you chose to accept it, is to account for the difference in single-dwelling prices between them without resorting to Asian money, hot or not.

——————————-

I worked at Nortel in Ottawa during its best days.
Ottawa impressed me as a tidy city, jobs were the key reason for people to be there.
1.5 hours away from Montreal, a short day-trip away, was always pleasant.
3.5 hours from Markham, all the Asian metropolitan feelings one would care to take in, also very nice, cheaper Chinese food there than Richmond YVR.

So what are the numbers now?
$390k for average SFH in Ottawa, $1.1M greater YVR (yes, should also include Surrey)?

No I’d fail the mission, really is impossible.
A bit warmer in YVR, but plenty more dreary days too.

#151 Mark on 01.31.16 at 9:10 pm

“Your mission impossible, should you chose to accept it, is to account for the difference in single-dwelling prices between them without resorting to Asian money, hot or not.”

That’s not too difficult. Vancouver is the administrative epicenter of the world’s precious metals mining sector. Deeply out of favour at the moment, and completely inversely correlated to the fiat/debt sector. As a result, many fortunes in Vancouver have either been gained (or more recently lost) on account of the sector.

Portfolio theory tells us that if an inversely correlated sector of the economy is deeply out of favour, that its inverse will be strongly in favour. Real estate is that inverse sector, its pricing derived from conditions in the fiat money system.

As the PM sector revives itself from its very long-term slump, look for the speculative capital of Vancouver to leave housing, and move towards the PM sector. At some level, Vancouver RE’s high P/E multiple has already incorporated a substantial amount of the income growth that will be accorded Vancouver residents when the miners eventually come back into favour after being out of favour for so long. Vancouver RE prices might not even fall that much as P/E ratios compress because incomes will definitely see decent growth in such a scenario.

Contrast such with Ottawa. Where you basically have, as the main ‘industry’, government. Government employment is boring. Government employees are, pretty much by definition, not risk takers. Over the long term, government compensation cannot grow much faster than inflation. If anything, on account of the huge amount of government debt and the likelihood of a long-term increase in its cost of service, government compensation is likely to lag the rest of the economy quite significantly for decades to come.

Bottom line is that, in any locale, if one wants to own RE with a minimum in long-term outlay, buying investments in the most inversely correlated sector to the local economy sector as possible, and holding those investments until a cyclical inversion has occurred, probably will provide the long-term lowest cost way of participating in the local RE market. But this requires a lot of patience and time frames that very few people have. Which is why it can be such a powerful contrarian strategy if executed properly.

#152 WUL on 01.31.16 at 9:11 pm

#111 John on 01.31.16 at 6:56 pm

When responding on my move to minimalism, part of your comment read:

“Our adult kids are learning real fast on this file.”

That is interesting and bang on. I told my family that I am going minimalist and my crafty sister responded that I am acting like a Millennial.

Yup. The end of the Consoomer Boomers.

So, in 7 days I turn 60. Sixty is the new Millennial.

Go ahead punk. Try to sell me something.

#153 BS on 01.31.16 at 9:17 pm

Bottoms_Up on 01.31.16 at 6:56 pm
#90 Goldie on 01.31.16 at 5:27 pm
————————-
Agreed, the actual point of this exercise should be to determine where the money comes from. And not that a canadian addressee has purchased the place.

We know the source of the money is mostly borrowed here in Canada. The mortgage debt level is correlated to the housing bubble. If it was money coming from China the money going towards houses would not show up as increased consumer debt year after year. In fact debt would be declining as locals cashed out, paying off their mortgages. No need to use realtor stats to verify this.

#154 Herb on 01.31.16 at 9:20 pm

re FINTRAC –

By the numbers
19,750,453 financial transaction reports received from reporting entities across the country
5,075 telephone and email enquiries answered
1,143 case disclosures of actionable financial intelligence assisting money laundering, terrorist financing and national security threat investigations in Canada and around the world
1,126 compliance examinations conducted across Canada
837 money services businesses registered and 169 registration renewals
298 policy interpretations provided to Canadian businesses and other stakeholders
16 administrative monetary penalties issued to encourage change in the non-compliant behaviour of reporting entities

http://www.fintrac-canafe.gc.ca/publications/ar/2014/1-eng.asp#s3

Does this mean that out of 19 M reported transactions there were only 1,126 questionable activities investigated, or only 1,126 questionable activities worth investigating found?

The rest of that annual report would seem to be bureaucratic irrelevance.

#155 acdel on 01.31.16 at 9:22 pm

#144 Nobody
What if the government introduced a law saying that property in Vancouver could ONLY be sold to Chinese?

That way the restricted demand would cause prices to drop, to the point where the 99% protesters could afford to buy – although a majority of them wouldn’t be allowed to.
—————————————————————–

Ha, good point! So, let’s get our collective minds together; what if this was the case???

#156 Freeman on 01.31.16 at 9:23 pm

I was talking to a guy who has 3 Condos. He told me that for anyone who has extra savings to invest, the only place to park their cash safely is in condos. He told me that every time he gets another $30,000 saved up he buys another condo. He now is searching for Condo #4.

I asked him why not invest in the stock market, and he said “ONLY LOSERS INVEST IN STOCKS”. He explained that your money can just ‘EVAPORATE’ in a minute in the stock market, while with condos they only go up. He told me that a condo he bought 6 years ago for $160,000 is now worth $410,000 and it will only go up and up. Interest rates at banks are so low that Condos are now the NEW SAVINGS ACCOUNTS IN CANADA !!!!

So that explains why Condos are going up in demand, it is because people are putting their money in condos instead of into savings accounts.

Now imagine millions and millions of Canadians all buying condos as their own personal ‘savings accounts’. And then suddenly they retire, and they try to sell their condos ALL AT THE SAME TIME !!!

There is a saying: “When a fire breaks out in a packed auditorium, suddenly the exits doors get really, really small.”

#157 crowdedelevatorfartz on 01.31.16 at 9:24 pm

@#136 Herb

“We know that Vancouver is the best place on earth and everybody wants to live there, and that Ottawa/Gatineau is not”
+++++++++++++++++++++++++++++++++++

Have some friends that moved back to Gatineau after living for 15 years in Vancouver. They miss the snow free winters but love the house prices and the “normal” house prices. Ive visited and done the “tacky tourist” routine. . Nice city and not Ottawa. ;)

#158 Alberta Blue Blood on 01.31.16 at 9:42 pm

#125 Mark

“And I’m offsetting the small mortgage by running a B&B from the home, something you can’t do from a rental. “

Why not? I’ve rented a few places in my time as an adult. Never have I seen a prohibition in a lease agreement against such activity.

>>> Because local zoning bylaws will not allow it. The B&B owner must be the owner of the house. To get my B&B license, I have entered into a rent to own agreement with my son, it was the only way they would provide me with the stamp of approval. Also, insurance.

Running a legal B&B is much different than subletting or other home based business.

#159 Maestro Wes Fresh on 01.31.16 at 9:53 pm

hold on, hang on…. people calling out others for the whole race/asian people populating malls and such. I don’t know what the malls look like in B.C., however, here’s what I think about in Toronto…

people say asians are coming here in droves as well. I tend to go out quite a bit. Malls, restaurants, movies. I go downtown, midtown, vaughan, brampton, mississauga etc. With that being said, I don’t see a lot of asians. I don’t go out and notice a dramatic increase in the amount of asians. The eye test tells me that.

By the way, I have plenty of asian friends and family members. I’m simply pointing out an observation. The whole “the asians are here buying everything” has failed the eye test. Media outlets are using stories like that as pump pieces to create panic.

#160 Frank on 01.31.16 at 9:59 pm

Went to open houses in Vancouver again. Yikes! Low inventory, high prices and they’re still busy! It scared us off.

Went to see a million dollar 2 bed (1200 sqft) townhouse. 4 boomer couples, made small talk with one. They’re looking to downsize. I guess they’re selling their $2M home, so pocketing $1M and paying cash for this place doesn’t seem outrageous. I just can’t believe that $1M doesn’t get you a closet in the master bedroom (half the current occupants clothing was stored in the closet a floor below). We (30-year old couple) can’t compete with cash.

I expect the January numbers to be new record setting numbers, Feb too I’m sure.

#161 For those about to flop... on 01.31.16 at 10:00 pm

[email protected]
Leo Toiletspray says you are low bar …if I could grab a low bar I would bang you over the head with it.
Why do you insist in working the same bunk theories into each post?
You already trotted this theory out 2 weeks ago and the boss shot it down.
Just like in every third post you like to trot out that the CAD only went down 1.6 yoy….been corrected on that 3 times.
I could go on but I have already wasted enough time on you.
Toiletspray is the second biggest troll on here and you for once in your life are the winner .Yeah fo you!
You are funking relentless….

M41BC

#162 Fiendish Thingy on 01.31.16 at 10:05 pm

I just can’t see how this doesn’t end without massive defaults, bankruptcies and foreclosures. People are going to run out of money, and run out of credit and equity to borrow against, and won’t be able to service their debt.

I have seen signs around the lower mainland “quick home purchases, we pay cash!” I saw the same kind of signs in the SF Bay Area just before the wheels came off the housing market there…

#163 Mark on 01.31.16 at 10:31 pm

“Just like in every third post you like to trot out that the CAD only went down 1.6 yoy….been corrected on that 3 times.”

The fact that the CAD$ only depreciated by 1.6% YoY is very clear from published Statistics Canada data:

http://www.statcan.gc.ca/tables-tableaux/sum-som/l01/cst01/cpis01a-eng.htm

“Because local zoning bylaws will not allow it.”

Fair enough. Doesn’t stop the AirBnB crowd, but I guess this is yet another aspect of implicit racketeering carried out by government — requiring ownership for a legit BnB license.

#164 acdel on 01.31.16 at 10:36 pm

#159 Maestro Wes Fresh
hold on, hang on…. people calling out others for the whole race/asian people populating malls and such. I don’t know what the malls look like in B.C., however, here’s what I think about in Toronto…

people say asians are coming here in droves as well. I tend to go out quite a bit. Malls, restaurants, movies. I go downtown, midtown, vaughan, brampton, mississauga etc. With that being said, I don’t see a lot of asians. I don’t go out and notice a dramatic increase in the amount of asians. The eye test tells me that.

By the way, I have plenty of asian friends and family members. I’m simply pointing out an observation. The whole “the asians are here buying everything” has failed the eye test. Media outlets are using stories like that as pump pieces to create panic.
—————————————————————–

Could not agree more; it is not about Asian’s, white’s, black, purple or green. It is about the system, is the ideology of being part of a country gone, should it be a global entity where all things are equal??, If so, should we not adhere to all the same rules for stability and fairness?? I am all about entrepreneurial opportunities and making a better life for one self under some same rules for all. Ok, last post, the scotch is trying my nerves, good night all!

#165 lookoutbelow on 01.31.16 at 10:38 pm

Where, oh where is the Canada Revenue Agency ??

The CRA should be getting its fair share from Capital Gains and the World-wide income that every taxpayer is supposed to report on their Tax Return.

I just don’t see it in the CRA published data! The Agency stands to make a fortune! Get on it, guys..

We all do report our incomes correctly, don’t we? Like all proud Canadians should.

#166 45north on 01.31.16 at 10:40 pm

Herb: Your mission, should you chose to accept it, is to account for the difference in single-dwelling prices between them without resorting to Asian money, hot or not.

in Vancouver the ratio of dwelling price to income is 10.46

in Ottawa/Gatineau it’s 3.55

I’d say that it’s HAM ( hot asian money ) even though 95% of real estate transactions are local to local. I’d say that hot asian money has had a disproportionate effect.

The average house in Metro Van, as a result, costs $1.248 million and increased 23% last year.

sources tell me at the upper half of the market the increase is more like 30% ( July 2014 to July 2015 ) and it looks like the increase July 2015 to July 2016 will be 50%. 50%! If this turns out to be true then those people borrowing the down payment at 12% will make a $1 million each. I mean if they sold they’d make a $1 million each.

at which point Vancouver real estate will have decoupled from the economy

#167 Nagraj on 01.31.16 at 11:00 pm

#110 FREEDOM FIRST wins an originality award for the phrase “financially deviant practices”.

If Poloz had a penchant for originality, instead of simply saying that Canadians make “bad financial decisions”, he might have said that Canada is a nation of financial deviants, why not.

#102 ACDEL “It’s not right for all the hard workers to be placed in this situation, something needs to change …”
Not only a cri de coeur but also a cri de guerre, reminds me of the ending of “Grapes of Wrath”.
Including the latest GDP number, Canadian GDP for the last twelve months reads all of 0.2% so change would do well to hurry up –
The absence in MSM, and in even more serious media, of the word ANGER next to the word ALBERTA – bespeaks a singularly pacific notion of human nature, yes.

Not unconnected to the above: Rona Chickaboom Ambrosia showed up, as I recall, in Question Period wearing the most ridiculous black leather jacket in the universe, yards of the stuff scrunched in folds around her neck, and the rest cut away to leave her belly exposed. (She skinned a baby hippo and, dang, there waddn’t enough to go round.) In this execrable get-up she accuses our prime ministerial prince of “swanning” in Davos. (Wherever that is.) “Swanning”? Is that a word? The people I happen to know are familiar with bargain-hunting, not swanning –
The dialogue between the prince and the leather monstrosity then devolved into some blabber about “natural resources”. I say devolved because “natural resources” is, as a term, haloed with jingoistic silliness. “What’s fer dinner tnite, hon?” “Natural resources.” “Oh God, not natural resources again!”

Since I’m “on a (vituperative) roll” I might as well bring up Mrs. Trudeau’s singing. A cut above Harpo howling O My Darling O my Darling O My Darling Clementine like some moonstruck hyena – but, Mrs. Trudeau, y’aint no Peggy Lee either.
Finally – tho I got nuthin against this Mulcair person FINALLY showin’ his hirsute face in Hamilton, and tho it wasn’t his doing to get bedecked with a blindingly, absolutely brilliant yellow scarf, still, given his physiognomy, the aesthetic effect would’ve been the same if he’d graced his coiffure with a peony.

Put the prince, Sophie, Chickaboom, the “socialist”, and Poloz (ugh) all on the same street as Harpo and let ’em all blissfully swan one another.

#168 Smoking Man on 01.31.16 at 11:11 pm

In a shead on Lake Simcoe. Ice fishing at the moment with dudes. Old hockey team mates. Fk they have aged.

It’s not about the fishing..

Feminists and T2 will never understand the standing ovation for the loudest beer fart.

It’s a Canadian thing.

#169 ROCK BEATS PAPER on 01.31.16 at 11:11 pm

Garth,
Your taking the wrong tact here. We need to aggressively market our RE to foreigners and hopefully double or triple the number of properties they buy. We should welcome their hard earned money and sell any assets that are at peak valuations.
We sold Nexen for a pretty penny. We should have let Potash Corp go too.

Air, water and land. We need to stop hoarding it.

#170 VanMom on 01.31.16 at 11:18 pm

Garth I love your daily blogs and mostly agree with you but I could not disagree more when all I see is Chinese buyers at every open house I have gone to since June 2014. We sold and are now renting. I look at rentals on Craigslist quiet often and 90% of the houses sold are for rent and the ones I’ve seen are all property managers for their Chinese investors. A lot of people I know are saying the same thing. Everyone is so upset about foreign investment driving prices up that there needs to be concrete data to support this mayhem.

#171 Leo Trollstoy on 01.31.16 at 11:24 pm

so much emo about HAM lol my only question is why government and RE boards don’t want to look into it prolly cuz it doesn’t exist or would show another problem like over-indebtedness. its just a marketing tool. everybody is getting tooled suckers

#172 Craigster on 01.31.16 at 11:31 pm

Mr. Turner, there is a saying in East London (UK)’s hip-hop culture: “beat dis” – ie prove me these people are wrong: http://www.theprovince.com/touch/news/vancouver/follow+money+vancouver+real+estate+market+concerns+spring/11683456/story.html?rel=838332

#173 Burt on 01.31.16 at 11:37 pm

Garth,

I dont understand your reluctance to admit that Chinese capital flight is having a major impact on select metro locations in North America.

In Canada, Vancouver is a major recipient.

Though your readers might be persuaded to believe the land of $2.5 million houses is all local greed and speculation, the reality on the ground is quite different.

A quick visit to one these hoods will show notably high vacancy – how many high net worth Canadians can afford to have $2.5+ million homes sitting empty year round?

If this was an isolated case, perhaps it could be attributed to noise – entire neighbourhoods of Vancouver are hollowed out and vacant. Literally hundredths of millions of land and condos sit empty – possibly billions at current land values.

Are we to believe the touted 0.01% of Canadians, which by your own admission only need $250,000+ to qualify as such, are sitting on whats likely close to a billion of vacant real estate in Metro Van?

Are we also to believe that those speculating on land assemblies in Vancouver are doing so with borrowed money, even though no possible business case can be made for developing land under prices being paid over the past 12 months?

To ignore local speculation as a cause of escalating values would be disingenuous, but to think that VanCity coupled with with overextended buyers can create the local market conditions is a silly notion.

Lastly, look to other locales with same issues. Do they show higher proportion of foreign ownership? No.

Most cities are struggling to figure out how to deal with the multitude of ways high net worth foreign individuals are using proxies to purchase.

To assume foreigners would be using their names to purchase here is naive at best, I wouldn’t expect stats to ever properly reflect the reality on the ground – and that is foreign funds land hoarding and overextended locals and now developers chasing the market.

#174 Mark on 01.31.16 at 11:39 pm

“We need to aggressively market our RE to foreigners and hopefully double or triple the number of properties they buy. We should welcome their hard earned money and sell any assets that are at peak valuations.”

I agree 100%. Canada should be praying that foreign money shows up and “decides” to buy our assets for top dollar. Rather than scooping up the cheap stuff when it is out of favour and unloved by Canadians. As is the case for a good swath of Canadian industry and much of Canada’s resource sector.

Its shocking that long-term assets can be bought today for significantly under even depreciated book value, and a fraction of long-term replacement cost. Let the Chinese buy West Vancouver at the current ~$15B its valued at — Canada/Canadians would do much better to preserve ownership of the jewels of Canadian business such as Barrick, Bombardier, Suncor, Potashcorp, Canadian National, etc., than a mere overhyped strip of land in a major city.

#175 Sunny Dispatches From Under the Bridge On Sunny Days with Sunny Ways My Good Friends/#Canadas Back on 02.01.16 at 1:00 am

Stephen Harper’s whole if you bring enough money we’ll sell you citizenship program was a dismal failure. Yet many of you would claim that they didn’t want to spend a couple of million to start a business and come here but they are perfectly willing to slap down the same 2 million to buy some run down falling apart house in Vancouver. I don’t think so. Actually it’s plain stupid to think the one thing with advantages was passed on but buying speculative real estate is more common than the flu. Idiotic.

#176 Kilby on 02.01.16 at 1:01 am

interesting that many of the owners of these two and three million dollar homes in Vancouver are listed as “Homemakers” and “students” with an average income of $18,000 a year…Not contributing much in the way of income tax……

#177 Bob dog on 02.01.16 at 1:03 am

Trump is going to axe the NAFTA visa when elected. Get out while you can. Palm trees and sunshine await the displaced Canadian.

#178 Mark on 02.01.16 at 1:21 am

“Are we also to believe that those speculating on land assemblies in Vancouver are doing so with borrowed money”

That’s exactly what that researcher, Andy Yan, himself of Chinese ethnicity (but Canadian citizenship), found when he actually did the research. To wit: “82% of the properties in the November 2 study had a mortgage, while 69% of mortgaged properties held mortgages from three banks: HSBC, CIBC and RBC. ”

https://www.biv.com/article/2015/11/controversial-foreign-ownership-study-about-money-/

Also, there is a near perfect correlation between credit expansion and Vancouver RE prices. Net foreign capital inflow would disrupt such relationship in an observable manner. Hence, the inference is that there is little net foreign monetary participation in Vancouver (or even Canadian) RE. Outflows may very well be overwhelming inflows at this point as witnessed by a significant escalation in currency exit controls anecdotally observed.

#179 M on 02.01.16 at 1:51 am

so..

RE , 30% of GDP… looks down
Oil, the king of resources… what.. 20 something % of GDP IS down
Services and investment will/are already affected by the pleague…look down
$ dineros in Trudeau le Beau policy of deficits..look/is/will be down…

…methinks is time to short the banks and buy gold again.
..and take any foreign bond investment that craps on the can pesso.
ditto the forex … long in anything with CND in the denominator.

..oh yes.. don’t forget to short Bombardier. while still a fair chance it’ll make it ..it’ll probably do so with shares at 10c or so

..and those biggies selling stuff to people ? SHORT those suckers too

..sounds like a plan. who said recessions are bad ? I love it

#180 M on 02.01.16 at 1:56 am

Mark I see your posting your subprime theory again. And I see Pitz is on Zeronutjob, posting the same garbage yesterday. Just in case anyone is wondering, Pitz and Mark are the same along with Mark77/Pitz on RFD.
The dollar is down, gold tanked, XIU: why bother, ABX: oops fell of a cliff. I will throw you a bone, yep real estate is finally trending downward. Still a few holdouts (Van/Tor/Vic/Edm???) but hey why not build a few charts and show us the real truth?

Seriously after arguing for so long about the same points you must be tired! Okay time for sleep and I see a statistical mirage on the horizon…

And Victoria Real estate Dude, why the hate for prices in Victoria? Its a house who cares??

#181 ken on 02.01.16 at 2:20 am

I think there is a big risk of biased/incomplete data coming from the real estate association. While a small sample, this I think shows what is likely happening with high end properties. A lot are all cash deals.

http://www.bcbusiness.ca/real-estate/who-is-buying-homes-on-vancouvers-angus-drive

This article also highlights that the “data” when collected will not be the full story
http://www.theprovince.com/business/follow+money+evidence+submitted+fraud+probe+points+concerns+about+vancouver+real+estate/11683456/story.html

While both of these still likely contribute to a minority of the sales in greater vancouver, I think they are the major issue in vancouver proper

#182 RazzleDazzle on 02.01.16 at 3:16 am

Even banks know that Fintrac has had zero follow-through. They comply with reporting regulations, yet don’t change business practices to prevent the behavior being regulated against.

“There are many sectors and products that are highly vulnerable to money laundering … domestic banks … were rated the most vulnerable, or very high,” the July, 2015, report says.

It said Canada spends $70-million (Canadian) a year on 11 agencies – including FinTRAC – tasked with fixing that.

“We are not seeing many prosecutions or crimes detected. So either it is spectacularly successful or it’s spectacularly useless,”

http://www.theglobeandmail.com/report-on-business/industry-news/the-law-page/canadian-banks-helping-clients-bend-rules-to-move-money-out-of-china/article26246404/

#183 It will still be about jobs... on 02.01.16 at 4:22 am

The Labour Force Survey’s over the next few months (e.g., this Friday report for the month of Jan. 2016) will tell the truth of where our economy is headed. On GDP we will not know until the end of March/April 2016 reports for early this year.

Right now, know one knows where growth will come from in the Canadian economy, all seem pessimistic and this blog is an example.

If no growth and in effect negative job creation, not even the Chinese will be able to bail us out. So why worry about it?

When people have no jobs, real estate will drop and rapidly as the mortgage broker points out.

And the banks cannot indefinitely suspend mortgage payments to help out as they have been doing in Alberta. They too are responsible to their shareholders and this negative income strategy will not last long. Their pockets are not that deep.

If the above happens and it looks like it will, then May and June of this year may well end up being very, very bad for Canada.

#184 maxx on 02.01.16 at 6:38 am

#28 Shawn on 01.31.16 at 1:31 pm

“Cash and Debt Redux…..”

Truly excellent and concise summary/description – thanks Shawn.

#185 Don Draper on 02.01.16 at 6:40 am

“Here’s what an internal report from the local real estate board shows.”
———–

So now we’re believing the data from the real estate boards? Sorry, but their past manipulation of data (highlighted frequently on this blog) doesn’t give them much credibility now.

Show me your stats. I’ll publish them. — Garth

#186 IHCTD9 on 02.01.16 at 7:00 am

#27 Nobody on 01.31.16 at 1:27 pm
As a White Anglo-Saxon Jewish (WASJ?) immigrant who bought their 604 house cash thanks to selling the even more overpriced place in London.

Can I just say I’m unhappy about the accusations of Chinese money being used to secretly drive up the price of local houses – we have worked hard for 2000 years to be the official source of blame for this sort of thing and it’s very annoying that this rich heritage of anti-semitism is so easily replaced by cheaper anti-sinoism
______________________________

LOL! Blame the Global market :)

Working in the steel industry, I know several very wealthy Jews – problem with the ones I know is without following them around for a while, you’d never know it. In fact, if you Google the richest Jewish guy I know, you get a bit of philanthropy – that’s it.

Maybe try driving a Bentley Continental GT to work – that should get some hate brewing! :)

#187 nimblenums on 02.01.16 at 7:16 am

And so Vancouver morphs from a hip and livable city into a giant cauldron of listings, simmered in greed and anti-Chinese.-Garth”

With the negative savings and Vancouverites being so bad at math, perhaps denizens of that numerically challenged town should be collectively referred to as “Dim Sum”, my high school math teacher would be proud of such a great pun

#188 nimblenums on 02.01.16 at 7:17 am

#3 Turtle on 01.31.16 at 12:04 pm
What kind of work can you find at 66?”

Consultant

#189 maxx on 02.01.16 at 7:29 am

#51 North Burnaby on 01.31.16 at 3:22 pm

“Be greedy when others are fearful. Its time to buy into Calgary & Ed,onton real estate market.”

Not by a long shot – I’d wait at least a couple more years, when the rot truly sets in.

#190 didaloo on 02.01.16 at 7:30 am

#46 Metaxa on 01.31.16 at 2:56 pm
@ #27 Nobody…LOL. well, more like a Snort Out Loud but pithy, germane and funny…you rock.

The rest of you online experts who wonder about the 66 year old ladies ability to work…while I’m not 66 I am 64 and have three distinct lines of income exclusive of any investment income.

None of which takes me more than 4-6 hours in a day, none of which begin earlier than 9:30 am and none of which last into the late afternoon.

Individually they would look to you snobs like Wal Mart greeter wages/income but cumulatively I’m just shy of 6 figures, start at 9:30, home by 2 most days ,holidays off, long vacations…simply waiting for my lady to tire of her job then we are done.

Never underestimate your elders, what we lack in speed we more than make up in enthusiasm and ability”

Just make sure Huey, Duey and Luey don’t find out about each other……

#191 muzleti on 02.01.16 at 7:39 am

#141 wallflower on 01.31.16 at 8:38 pm
U.S. GOVERNMENT TO REQUIRE OWNERS OF NEW YORK AND MIAMI LUXURY PROPERTY TO REVEAL IDENTITY”

Pretty dumb policy….wouldn’t the savvy ones just move on to Palm Beach, or Long Island?

#192 fancy_pants on 02.01.16 at 7:47 am

DELETED (anti-immigrant)

#193 boomindeed on 02.01.16 at 7:48 am

#239 Gavins Stupid on 01.30.16 at 10:00 pm
Hate me to death gang, but I’m living the dream, by not paying a dime in income tax, CPP or EI deductions to Canada. The EI & CPP deductions were almost 10 grand p/a when I last paid.

I don’t reside in Canada, officially nonresident status, citizenship untouched. It had to be done thoroughly and carefully, but I cut the cord. For over 10 years I have chosen only low tax jurisdictions to work. It’s worked out beautifully, 5 years in Texas, no state tax, low cost of living ( literally everything is 5 times cheaper and salaries are at minimum double).

Now, Thailand, income tax on corporate ex pats is 15% flat, there is no other taxes at all. The cost of living is way cheap, and I go to a beach resort every weekend. A nice meal is $2 and my condo in BKK’s Manhattan is a grand a month, the beach condo is $600, and it’s prime waterfront, white sand for miles, 2 hrs drive from the city.

Thailand is expanding so fast that ex pat workers are in high demand and paying huige premiums for expertise. It’s like working in Saudi Arabia these days.”

http://www.marketwatch.com/story/thailand-13-straight-months-of-negative-inflation-2016-01-31

The “stupid” part of your moniker seems apt!

#194 Herb on 02.01.16 at 7:49 am

#150 Iknow,

I suspect too.

#195 Herb on 02.01.16 at 7:50 am

#151 Mark,

hate to give comfort to your enemies, but that does not make sense.

#196 Herb on 02.01.16 at 7:53 am

#159 Maestro Wes Fresh,

may I suggest you open your eyes on one of your visits to downtown Toronto, or Markham, or most other GTA venues?

As to malls, have a look at the Pacific Mall for routine Asian shoppers, or Yorkdale for more stylish ones.

#197 Evangeline on 02.01.16 at 8:01 am

“Trump is going to axe the NAFTA”

Is that from one of his books?

I’ve never heard him say that. I’ve heard him say that he loves free trade but that he hates one-sided trade deals that result in huge trade deficits. He says free trade should be balanced trade and that U.S. trade deals need to be negotiated by smarter people than have negotiated its trade deals in the past. And he hates the game of China devaluing its currency, which he calls theft.

#198 West Coast Tree Dweller on 02.01.16 at 8:18 am

#27 Ha – ha ha – ha ha!

Yes, it must be frustrating for those of Semitic origin to watch these Asiatic johnny-come-lately s getting all the press for exploiting the housing market and taking advantage of poor working Gentiles!

Back in the good old days it was the Elders of Zion and the Rothschilds getting all the “attention” – now its the heathen Chinee and their ill-gotten gains!

Oh, well , the Jews had a good run. Cheer up, you can’t stay on top forever – maybe now you’ll get a couple of decent draft picks!

#199 fancy_pants on 02.01.16 at 8:18 am

Great idea, set up a gov’t review to look into this. But the micro mandate for that will be to tread carefully; remain politically correct even if it shrouds the truth. Being politically correct is far more important than being forthright. Just like self identification trumps biological reality. the latter never buys votes.

And hey, if they don’t like the results, nothing a few formatted hard drives can’t correct.

#200 CHERRY BLOSSOM on 02.01.16 at 9:01 am

As usual the politicians are way way too late. They should have had their eyes on the ball a long time ago. They should never have allowed CMHC to lower the 25% down payment. And Garth, why do you think everyone here in Vancouver calls it HONGCOUVER and just shake their heads at all the Chinese who don’t follow the rules of the road but drive Mercedes or even get out of the way for firetrucks or an ambulance. Vancouver has become a different little country.

#201 Noel on 02.01.16 at 9:21 am

You could have written that backwards: start with an anecdote about foreign buyers driving up prices, then allay fears about the myth of the greedy lenders suckering in their clients.

#202 White Crock BC on 02.01.16 at 9:52 am

Fed’s gonna raise four times this year huh?

http://finance.yahoo.com/video/rate-hike-not-until-2017-133815017.html

#203 Jake Hartman on 02.01.16 at 9:57 am

Happy February to you, we are going down again. TSX is down 204 points to 12,618. Remember, 2007, it was 15,000.

So far it looks like a mini Japan, we are almost 9 years in and the TSX is still lower by 16%.

#204 Investorz on 02.01.16 at 10:03 am

“TD Bank embroiled in Ponzi fallout” – Globe & Mail

Question: If TD didn’t catch a huge fraud by a notorious fraudster, should we believe they are catching mortgage frauds?

This will give WallStreet more fire for their short canada theme.

#205 jess on 02.01.16 at 10:05 am

7.6b shadown banking online investment industry

http://www.cbc.ca/news/business/china-ezubao-fraud-1.3428450

==============
easy peasy
..”dummy corporations and offshore bank accounts that conceal their identity and the source of the funds.

And most of it would never happen without the help — witting or unwitting — of lawyers, accountants and incorporators; the people who actually create these anonymous shell companies and help move the money.
See what happens when hidden cameras capture New York lawyers being asked to move highly questionable funds into the U.S. Steve Kroft reports.
http://www.cbsnews.com/news/anonymous-inc-60-minutes-steve-kroft-investigation/

#206 gut check on 02.01.16 at 10:38 am

I just listened to a Robert Kiyosaki podcast (two, actually, and one was a fascinating interview with Frank Luntz, ifyou know who that is…) anyway my point is that
Robert Kiyosaki and his business partners talk about “foreign investment in real estate” as it should be talked about.

People whose money is either ill gotten or soon to be confiscated for some other reason are looking to PARK MONEY offshore. It’s just a fact. it is a FACT.

The discomfort you all feel in reading the denials of reality come from congitive dissonance. The remedy is to stop this weird deference to ‘authority’ that we were trained up with.

Smoking Man’s assertions about education being indoctrination is important, and everyone would do well to take heed.

Many, many of our problems – the world over – could be fixed if we’d just realize that the so-called experts who say the same nonsense over and over and over are simply hypnotists capitalizing on our own inferiority complexes.

I trust myself. Trust yourselves. I mean examine your knee jerk reactions and ask why they exist. Examine the ‘evidence’ that supports those knee jerk reactions. It’s freeing & highly recommended.

foreign dollars flowing into the world’s real estate markets are impoverishing our cultures and demolishing once thriving cities. it has NOTHING to do with race – that’s just a little trick played on you to shut you up.

This is a corruption issue, a justice issue and a class issue. it will be the issue of our time.

#207 Trading Naked on 02.01.16 at 10:43 am

Funny somebody should mention Capital Direct…back when I worked in a bank, this guy would show up once a week with a stack of cheques from people in BC and AB made out to “Capital Direct”…and the back of them would be endorsed for deposit into his personal account. I don’t remember what happens to the money after that (maybe fed back into Capital Direct?). I have no ideal how Capital Direct works, nor do I have the business education to comment on any of this. I thought it was weird, and I did ask about this, but like those multiple $49,000 wire transfers coming in from China, I was told to not sweat it….just sayin’…

#208 IHCTD9 on 02.01.16 at 10:51 am

Out my way, there are many folks “fishing” for retired Torontonians with their listings. The ones that sit on the market way overpriced for a year or more (but still nowhere near a cool Mil) waiting for that one retired couple with a million+ burning a hole in their pocket searching for their “bargain priced” country retirement mansion.

Looking at it from where I sit, it’s easy to see how even distant markets where prices have gone nuts can affect certain local real estate prices hours away. This fishing in my area is a true long-shot game, but there’s always several casting a line, and trying to get lucky.

If a local wanted one of these houses, he’d have no choice but to pony up. The sale was never aimed at local folks in the first place, but rather the millionaire Toronto sellers moving out. The seller is undoubtedly aware that other nice houses in his area went for big bucks to these “foreign” (Toronto) buyers, so there is no negotiation because he wants to cash in too – never mind that he’s 150K+ over local market value. He only needs one buyer to step up, and he makes a bundle. So, The local buyer must either walk, wait, or lever up to pay the asking price.

Out here, locals walk – maybe locals in Vancouver levered up instead?

Easy to see how a spark in the form of a rich Chinese family paying way too much for a home could start a raging firestorm of greed. A couple 500K homes go for 1+ Million, next thing you know everyone on the block thinks their house is worth the same – then that part of the city thinks so too – then the whole city. Then the RE “speculators” (regular folks buying 2nd and 3rd houses) show up, and it just gets stupid from there on in.

A perfect storm of greed and entitlement kicked off by a handful of rich Asians, followed by hoards of Vancouverites looking to strike it rich.

#209 jess on 02.01.16 at 10:56 am

A.G. Schneiderman Announces Landmark Resolutions With Barclays And Credit Suisse For Fraudulent Operation Of Dark Pools; Combined Penalties And Disgorgement To State Of New York And Sec Of Over $154 Million

Barclays To Pay Total Penalty Of $70 Million – Largest Penalty Ever Levied On A Dark Pool Operator; Admits To Core Facts In The Attorney General’s Lawsuit; Admits To Violating Securities Laws; Agrees To Install Independent Monitor To Oversee Reforms To Its Electronic Trading Business

Credit Suisse Settlement Resolves Investigation Concerning Misrepresentations And Omissions About Its Dark Pool And Order Routing Services; Credit Suisse To Pay Combined Penalty Of $60 Million

Schneiderman: We Will Continue To Take The Fight To Those Who Aim To Rig The System And Those Who Look The Other Way
http://www.ag.ny.gov/press-release/ag-schneiderman-announces-landmark-resolutions-barclays-and-credit-suisse-fraudulent

#210 Yuyu on 02.01.16 at 10:59 am

#108 Gerry…

Christy Clarke = Marsha Brady (Maureen McCormick)

#211 IHCTD9 on 02.01.16 at 11:15 am

.#87 Lulu on 01.31.16 at 5:22 pm
highest RE in the world already burst namely Hong Kong, there already a downward trend yet still ranked No 1 in the world and expert predicted that citizen need to save 19 years straight without eating and spending, just save up their salary to buy a average apartment there, you call Vancity and T dot crazy? Even Australia ranked ahead of Vancity this year to No 2 after HK.

Imagine if all of us don’t need to pay any sort of tax and how easily to afford RE in Canada, in my dream!!!!
____________________________________________

Housing in all of Canada is fairly affordable – except Van/GTA. Stay out of those two cities and your good to go – especially if you sold out of HK!

I paid for my rural place in 14 years, save a nice nest egg at the same time, and got to spend and eat as well :).

#212 NoName on 02.01.16 at 11:23 am

Of topic, very of topic.

Having a breakfast with my son at truck stop, and listening to some old guy very passionately talking about firearms, and at the end he concluded how all school teachers should like cops powers in arresting crooks and be armed all the time. Oh the horror…

#SomeOnesWorstNitmareArmedTeachers

#213 The Other Chris on 02.01.16 at 11:23 am

I’m calling it now… by 2018 the median single detached home in Vancouver will be over $5 million.

#214 Bbbbb buuut on 02.01.16 at 11:30 am

Vancouver Sun has a story on the front page today saying permanent residents from China in BC have halved in number in 2015 compared to 2014. Now if HAM is dissapearing who is going to pay 1.000.000$ for a dog house in eastvan?
There might be a reason for canadian banks to report awesome gains last year despite oil drop.
The answer is in the mirror!

#215 Smoking Man on 02.01.16 at 12:04 pm

Great link

Where are the men

http://www.therebel.media/while_migrants_rape_their_way_across_the_continent_where_are_europe_s_men

#216 Credibility on 02.01.16 at 12:23 pm

Huge thread on Reddit about this blog purposely denying impact of HAM and the reasons behind it. Will surprise most followers here.

Isn’t Reddit where the poor people go? — Garth

#217 Leo Trollstoy on 02.01.16 at 1:06 pm

Show me your stats. I’ll publish them. — Garth

aaaaand the thread goes silent…

#218 Leo Trollstoy on 02.01.16 at 1:09 pm

stop hounding WalMark of Sadkatoon already. he thinks getting call-back from company hr is hard so there’s no way he’s going to post anything sensible about banking. and now subprime? forget it. move on already. low bar

#219 SWL1976 on 02.01.16 at 1:10 pm

#206 gut check – BINGO

Isn’t Reddit where the poor people go? — Garth

Just because people may be poor, does not make them uninformed or misinformed. I personally have never been to Reddit, but I have been poor.

Justice in life and conduct of the State is possible only as first it resides in the hearts and souls of the citizens – Plato

They probably blog about cauliflower on Reddit. Losers. — Garth

#220 piccaso on 02.01.16 at 1:17 pm

Where’s the best place to live in a card board box in Canada for a retired person with no pension?

I would assume Vancouver Island, but maybe the Okanagan?

Thanks

#221 fixie guy on 02.01.16 at 1:19 pm

“…. there are brokers who will happily lend you the missing hunk of the down. Yes, at double-digit rates of interest. And, yeah, it’s prime Canadian subprime.”

Yet all real estate is local? You may want to rethink that. Houses are local, financing is national and subprime is finance.
The big change is brokers replaced the Cons. Canada started on subprime when Chretien first cranked up business model protections to mortgage lenders. It took a change in government to finally slow the diversion of public tax dollars to private financial institutions. The Cons wrecked Canada’s global competitive position to hand bankers a happy ending.

#222 IHCTD9 on 02.01.16 at 1:51 pm

#100 Big Dipper on 01.31.16 at 6:14 pm

So far the NDP label has proven to be of substantial benefit to Corporate Alberta.
__________________________________________

I’ll never understand guys like you.

Scream and curse before the NDP are elected that the Oil companies are not “paying their fair share”. Rub your palms together with glee after Rachael gets a majority in anticipation of cutting big business off at the knees. Then, when Notley reneges on her promise to “make them pay”, and does exactly what every neocon in the province wants them to do – you’re still cheering her?

Every hard left socialist in the Province want’s to tear her a new one. The Unions are screaming bloody murder. Every Neocon in the country is having a field day with this one…

…and you think she’s done great?

Can’t wait to see how you react when she cuts Corporate taxes for Big Oil.

#223 Mark on 02.01.16 at 1:52 pm

“. It took a change in government to finally slow the diversion of public tax dollars to private financial institutions. “

And exactly what ‘change’ was that? We know the CMHC was allowed to run rampant under Martin (started the zero down nonsense in the early 2000s). Harper (0/40 packages). And there’s been no meaningful changes yet by Trudeau.

About the only push-back that has been really and meaningfully seen at the CMHC was Flaherty’s announcement, in 2013, that the $600B limit to the CMHC’s direct guarantee authority would not be expanded.

Did Chretien remove the CMHC mortgage size cap? Or was that Martin? My history is kind of blurry, because, quite frankly, at that time, CMHC was basically only for welfare bums and the whole idea of people using it to buy million dollar houses would have been highly offensive to the vast majority of the population.

#224 waiting on the westcoast on 02.01.16 at 2:21 pm

I go on Reddit and I am not…. Oh, no, well I guess I am…

;-)

Fischer is now traipsing around Fed next steps. I still think they will raise in March. More jobs and job wage increases are inflating. The huge gains of the US$ and the drop in oil prices are holding inflation in check. The rest of the market is inflating and the Fed knows it. They will have to increase rates. I see at least three more to the end of 2016.

#225 Westvan on 02.01.16 at 2:23 pm

Foreign investment 5% in Van? Is global warming a hoax too? Gimme a break

#226 Noel on 02.01.16 at 2:30 pm

Four hikes far from a certainty this year, as per Fed’s Fischer:

“At our meeting last week, we left our target for the federal funds rate unchanged. Economic data over the intermeeting period suggested that improvement in labor market conditions continued even as economic growth slowed late last year. But further declines in oil prices and increases in the foreign exchange value of the dollar suggested that inflation would likely remain low for somewhat longer than had been previously expected before moving back to 2 percent. In addition, increased concern about the global outlook, particularly the ongoing structural adjustments in China and the effects of the declines in the prices of oil and other commodities on commodity exporting nations, appeared early this year to have triggered volatility in global asset markets. At this point, it is difficult to judge the likely implications of this volatility. If these developments lead to a persistent tightening of financial conditions, they could signal a slowing in the global economy that could affect growth and inflation in the United States. But we have seen similar periods of volatility in recent years that have left little permanent imprint on the economy. As the FOMC said in its statement last week, we are closely monitoring global economic and financial developments and assessing their implications for the labor market and inflation, and for the balance of risks to the outlook.”

#227 Natrx on 02.01.16 at 2:34 pm

That number might be Canadians but that definition of Canadian likely includes landed immigrants, or ‘family’ members of Canadians using their names. There are also wide reports and even cases of deception and fraud regarding who’s buying the houses, and even reports of Money laundering. So that ~97% number of ‘real’ Canadians buying up houses in Vancouver is likely lower.

#228 Paul on 02.01.16 at 2:40 pm

Was notified today that my TD Canada Trust LOC interest rate will increase on Feb 22 by 2.25% to 7.45%. Gues there not making enough money.

#229 yupki.me on 02.01.16 at 2:55 pm

If I was non-Chinese Canadian and thought that a Chinese person was the most likely to buy my house at an astronomical outrageous amount then I would use a Chinese realtor too for sure to maximize the chance of this event happening which is what my mother did.

A Chinese realtor sign does not mean that it’s a Chinese owner.

#230 S.Bby on 02.01.16 at 3:06 pm

Tides turn…

http://www.cbc.ca/news/business/snowbirds-loonie-real-estate-1.3425322?cmp=rss

#231 family beagle on 02.01.16 at 3:07 pm

I know lots of people who own multiple properties in 604. They bought through eighties and nineties and most are mortgage free. They don’t have intentions of selling unless the cost and effort exceed rental ROI.
They bought for 80k to 150k range and charge approx $2k for the upper and 1k for the basemnt. One buddy owns 4 houses, another owns six. They bought for rental income, not speculation. Any equity is a bonus. All wealthy barbers, accountants, contractors, etc. They drive cheap used cars and make their own beer and do a lot of outdoor rec, camping. Some bought large lots and subdivided. They live in Princeton, Williams Lake, Ashcroft, Keremeos, etc and own in Van, Burnaby, Tricities, Whiterock, North Van. Most wouldn’t live in 604. The market could drop 80% and they’re still ahead. They don’t own high end residential, they own basic suburban cattle sheds that generate constant rental income….

Two just stopped by, a neighbour is selling a drum set for $50. They want me to go in on it, $17 each. Monday noon and they have beer and the day planned out, both early fifties, semi retired, professional corner office wives.

#232 Godth on 02.01.16 at 3:10 pm

#225 Westvan on 02.01.16 at 2:23 pm

The good news is that it’s waaay easier to learn a language when you’re already in the stew. Any parents in Van. that aren’t encouraging their children to learn Mandarin are out to lunch.

#233 Paul on 02.01.16 at 3:15 pm

#220 piccaso on 02.01.16 at 1:17 pm

Where’s the best place to live in a card board box in Canada for a retired person with no pension?

I would assume Vancouver Island, but maybe the Okanagan?

Thanks

Victoria is better for that. Okanagan folks don’t like homeless people at all.

#234 Iconoclast on 02.01.16 at 3:26 pm

Seven?

Seven reports to Fintrac in over three years by Realtors ™ vs 1.2 million from the banks.

Yeah, nothing suspicious there.

You can’t buy a house without a FINTRAC notification. — Garth

#235 Yuyu on 02.01.16 at 3:27 pm

#196 Herb
Shocked, didn’t take you for a racist. But I guess they always crawl out of the woodwork at some point.

#236 family beagle on 02.01.16 at 3:31 pm

#220 piccaso on 02.01.16 at 1:17 pm

Where’s the best place to live in a card board box in Canada for a retired person with no pension?

I would assume Vancouver Island, but maybe the Okanagan?

Thanks

Victoria is better for that. Okanagan folks don’t like homeless people at all.

……

Quadra, Texada, Oliver, Spences Bridge, Boston Bar, Mission, Golden Ears, Coquitlam River, Dewdney, Deroche, Falkland, Seventy Mile, Quesnel, Lillooet, North of Pemberton, Robert’s Bank, Port Hardy, Sicamous. Lot’s of free rural land.

#237 Yuyu on 02.01.16 at 3:32 pm

#200 Cherry Blossom
Another one. The only people who call it Hongcouver are your racist associates. I bet you drive a “domestic” car? As if there is such a thing as a Canadian car. It’s a shame that the host allows such ignorance to be published.

#238 Yuyu on 02.01.16 at 3:36 pm

#206 gut check
aaaannnnd another one… OMG. Foreign money is destroying our cities? Robert Kiyosaki, that explains it.

#239 Blacksheep on 02.01.16 at 3:38 pm

Burt # 173,

“I dont understand your reluctance to admit that (foreign) capital flight is having a major impact on select metro locations in North America.”

“In Canada, Vancouver is a major recipient.”
————————————————
Often this blogs message, repeated almost daily, is about risk.

The risk of too many eggs in one basket when one ages (no time for a second chance) is constant. The fear of a RE correction, drives some (my past self included) to invest in ‘alternative vehicles,’ seeking return and safe harbour.

If Van RE valuations are driven by anything other than domestic debt (source irrelevant), risk deescalates as the local economy plays less role in its pricing stability.

With no substantiated reason to fear RE holdings, beyond the standard: Demand vs Supply equation, other investments some promote, lose appeal.

Remember: “Fear is the mind killer”

#240 Yuyu on 02.01.16 at 3:43 pm

#229 yupki.me
Finally! Someone with some semblance of a brain. That kind of logic is just too much for some on here. Herb, are you listening? Because vendors in Pacific Mall and Yorkville catering to specific clientèle means that “Asians” are taking over the country, right? :) Pfffft.

#241 morris on 02.01.16 at 3:47 pm

Reminds me of the movie “The Big Short” I watched this weekend, scary stuff

#242 Yuyu on 02.01.16 at 3:48 pm

*I meant Yorkdale, but Yorkville would work too. Lots of HAM at Bloor/Avenue Rd!

#243 family beagle on 02.01.16 at 3:53 pm

Ps…

#220 piccaso on 02.01.16 at 1:17 pm

Where’s the best place to live in a card board box in Canada for a retired person with no pension?


I forgot about Creston Valley and New Denver, Nakusp, and if Calgary cottage owners are bailing, there’s probably lots of cool squats around Nelson. Nelson also has great dining, so lots of good bin pickin’s.

#244 gut check on 02.01.16 at 4:03 pm

Yuyu – I think your keyboard is misfiring…. the “o”s are coming out as “u”s

#245 Noel on 02.01.16 at 4:06 pm

#233 Paul

It depends on your credit, but that sounds too high. Shop around at the other banks, you’ll most likely get a better deal.

7.45% is highway robbery…

#246 jess on 02.01.16 at 4:18 pm

Why Bernie Brand ice cream sales will go up!

https://www.globalwitness.org/en/reports/loweringthebar/

…”the results were shocking; all but one of the the lawyers had suggestions on how to move the funds. To see what some of them said, watch the video below:
https://www.globalwitness.org/shadyinc/

========

Suspicious Transactions
http://www.fintrac.gc.ca/publications/guide/guide2/2-eng.asp

#247 RimJabba on 02.01.16 at 4:28 pm

#215 Smoking Man on 02.01.16 at 12:04 pm

Pretty much bang on. My opinion on this is to sit back and let the femmies suffer their idiocy. No point in helping a bunch of self righteous know-it-all’s, who would stab you in the back so fast your head would spin. I helped a femmie once, she stabbed me in the back with a smile. Never again.

Look out for #1 and your family. The rest, well, not worth it. They’ll screw you over royal. Helping a femmie is like helping Stalin or some sort of poisonous snake, it will bite you, because that is it’s nature.

Better to let the rapees teach them a very hard lesson.

#248 Herb on 02.01.16 at 5:01 pm

#240 Yuyu,

if telling someone who professes not to see a lot of Asians in the GTA (Maestro Wes Fresh #159) to open his eyes and look makes me a racist, fill your boots.

I said nothing about the ownership of ethnic stores, but is the fact that there is an entire shopping centre dedicated to one enthnicity not an indication that there are a lot of shoppers of that ethnicity around? And where did I say that Asians were taking over the country?

Do you read, Yuyu, or merely launch your sensitivity off the handle?

#249 hope & ruin on 02.01.16 at 5:41 pm

Isn’t Reddit where the poor people go? — Garth

I think by ‘poor people’ he means millennials. And yes. we like reddit.

Today, I caught a TV show I’d never watched before. “My House, Your Money”.

Where boomers help their millennial children buy houses. Basically parents are gifting the down payment. Hilarious.

#250 salonist on 02.01.16 at 5:58 pm

#168 Smoking Man
add a lighter and we have the nectonite express with afterburner

https://www.youtube.com/watch?v=xGSGht1xJww

#251 investment abs on 02.01.16 at 6:03 pm

In 2008 official numbers about buyers profile from VIREB: http://www.vireb.com/assets/news/files/buyer_profile_news_release-w_handout.pdf

There was a clear trend that the buyers from Alberta were pouring oil money into the vancouver island RE (from 2006-2009). It probably continued during the oil boom period. The “foreign investor fear” looks something new starting 2010. Garth, why did VIREB stop releasing such buyer profile info? Do you smell something fishy here… :)

#252 YVR..lies on 02.01.16 at 6:12 pm

It has been shown that the foreign investors are using the realtors address and claiming to be citizens when purchasing in YVR and TOR. How could we then have accurate numbers as to foreign buyers. The system is corrupt!

Provide any proof of the above. — Garth

#253 RazzleDazzle on 02.01.16 at 6:18 pm

“You can’t buy a house without a FINTRAC notification. — Garth”

Not exactly… realtors are required to collect and store Fintrac paperwork, aka Record Keeping.

33-page requirements PDF for documents you’re putting into storage.
http://www.fintrac-canafe.gc.ca/publications/guide/Guide6/6B-eng.pdf

What realtor is going to want a government agency pouring over their compliance to this morass of regulation. Yet another disincentive to for them to report anything.

The only time Fintrac is ‘notified’ is when the realtor, or broker, or notary or bank files a suspicious transaction. 7 reports filed by realtors between 2012 and 2015 shows how effective that approach has been with that particular group.

Only reports of suspicious activity actually get sent to the big office in Ottawa.

#254 PR on 02.01.16 at 6:47 pm

…..hard data….from the local real estate board shows…

Please !!!!! Its like the, semi-fake, numbers of CREA. So childish to believe does numbers.

#255 Don Draper on 02.01.16 at 7:16 pm

Show me your stats. I’ll publish them. — Garth

——-

The issue isn’t my stats vs. your stats vs. some other group’s stats. The issue is do we believe these stats from a real estate board but treat the other stats that they publish with a healthy dose of skepticism, as you have pointed out so many times? I agree with you: we don’t know one way or another the size or influence of foreign money in Canadian real estate simply because there is no reliable data. I’m simply trying to bring into question the legitimacy of the source of the data.

#256 eva on 02.02.16 at 5:31 pm

It has been shown that the foreign investors are using the realtors address and claiming to be citizens when purchasing in YVR and TOR. How could we then have accurate numbers as to foreign buyers. The system is corrupt!

Provide any proof of the above. — Garth

see link for proof from BCSC hearings…using realtors address, in the article.
It has been shown that the foreign investors are using the realtors address and claiming to be citizens when purchasing in YVR and TOR. How could we then have accurate numbers as to foreign buyers. The system is corrupt!

Provide any proof of the above. — Garth
It has been shown that the foreign investors are using the realtors address and claiming to be citizens when purchasing in YVR and TOR. How could we then have accurate numbers as to foreign buyers. The system is corrupt!

Provide any proof of the above. — Garth

See link for the BCSC hearings, realtors address used in this case. In this case they got caught!
http://www.theprovince.com/touch/story.html?id=11683456

#257 James Kook on 02.02.16 at 8:04 pm

Sure, in Richmond, BC there is only 0.008% of Asians.
All the rest are Canadian.

#258 westcdn on 02.02.16 at 10:42 pm

SM Jan 31
“Testing a new fat finger error fixing key board –
Connetic Mulecular Theories! –
Huh?” I admit I laughed – been there, done that.

My local energy supplier sent me a letter saying they would send me a report periodically comparing me to my neighbours’ usage of comparable homes. It is a program copied from existing American ones. I am curious how I rank because I think I will rank low.

I guess it is the Albertan version of Ontario’s “smart” meters. Bring it on, I can handle the truth.