Goats & scapegoats

“Good news Londoners, Stockholmers, and San Franciscans,” says the new age, NY-based Quartz media thing, “Vancouver may have solved one of your toughest problems. Last year, the Canadian city topped UBS’s Global Real Estate Bubble index, a ranking of cities most at risk of being in a property bubble; the bank said Vancouver’s housing market was in ‘overdrive.’ But in the last four months, house prices have taken a marked turn downwards.”

As the world is apparently noticing, Van sales plopped 40% last month and prices keep eroding. “So how did Vancouver tame its roaring housing market?” Quartz asks. The answer from their US perspective is simple – a 15% foreign buyers tax. Given the fact the Canadian dollar’s weak, the central bank’s rate in the ditch and our bankers are money pimps, that must be the deciding factor, it concludes.

“Of course, what worked for Vancouver may not work everywhere—and indeed, if other cities adopt such a foreign buyers’ tax, it may end up putting even more pressure on the markets of cities that don’t,” Quartz adds. “Still, it shows that there are ways to bring a runaway market under control.”

Well, unlike my guest-blogger colleagues, Rowat & Lewenza, each of whom have recently admitted human frailties and attitude adjustments, I’m stickin’ with my story. Van’s market was rolling over months before the 15% shocker was applied, with sinking sales and a loss of market momentum that actually began almost one year ago. It’s just a fact of life – in a world where Americans now blame everything bad on Muslims – it’s easier to find a scapegoat than face our own stupidity. The Foreign Buyers tax was the final market gust that blew the house of cards over. It was not at the heart of the collapse. This is a lesson Toronto’s yet to learn.

By the way, how bad are things? The local real estate board claims prices are down just 3.7%. So what’s the big fuss about?

Local realtors see it differently. Like Stuart Bonner, a Re/Max dude toiling in the tony Westside. “There were 37 detached home sales in January, 73% less than January 2016,” he tells clients., “and 60% less than the 10 year average. Of last month’s sales, 4 received over the asking price and 30 sold below the asking price.” In other words: Sellers 4, Buyers 30.

As for prices (still outrageous), in this hood they’re 24% less than just eight months ago. Listings have swollen 20% from last winter, which means there’s a 15-month supply of detached houses for sale (compare that to less than 10 days in Toronto). For Bonner, this real estate slaughter could be the result of buyers retreating from too-high asking prices, plus uncertainty over politics in general and Trump in specific.

Like all other assets, houses rise and fall due to supply and demand. A year ago demand was insatiable in the Lower Mainland and supply was limited. Prices raced. The average detached topped $1.8 million. Today demand is tepid and supply is swelling. The average for a detached has plunged to the $1.4 million range. And it would appear there’s more to come.

Is Vancouver headed for 33% correction, or worse?

Source: GreaterFool Global Macroeconomics Research Dept., Real Estate Board of Greater Vancouver

Given recent price trends – even if the real estate board is fibbing and fudging and hiding behind its Frankenumbers – it would appear difficult for Vancouver to escape a 33% price reduction in this current correction. That would put it in line with the national decline that occurred in the US, and the last housing plop in the GTA more than 25 years ago. Of course, it could be far worse – if Trump imposes his Border Adjustment Tax, for example, or the province’s real estate-diddling government is replaced by the rabid socialists.

But back to the basic question: did the Chinese Dudes tax do this, as many people (like Quartz editors and the deplorables who flock to this pathetic site) believe?

Well, it helped. The best stats around show 9.9% of Van sales went to offshore buyers, a number that has now dropped by at least half. (Toronto realtors last week said fewer than 5% of sales there are to foreigners.) So when you carve out 5% of buyers, it helps destabilize everything. More consequential has been the widespread, media-fueled belief that Guangzhou titans were Hoovering up properties, creating the buy-now-or-buy-never FOMO that propelled sales and prices. In Van, that’s gone. And that’s good.

Toronto’s problem is more fundamental. A huge imbalance between supply (tiny) and demand (swelling). As prices are pushed higher, even fewer listings materialize since most people can no longer afford to sell and move. It’s a self-perpetuating vicious circle. Crap houses in questionable areas of 416 are getting 10 offers and selling for 25% above list. No conditions. Prices of detached homes from Niagara Falls to Cobourg – two hours of commuting from the core – are bloating as never before. The Vancouverization of the GTA is in full swing. And, yes, it will have the same outcome.

When and why are unknown. But don’t blame the yellow guys.

145 comments ↓

#1 TurnerNation on 02.05.17 at 2:17 pm

Suggested titles for Gartho’s next book:

– Minister of cabinets: home reno tips and traps.

– How to Buya Da House: Don’t!

– How to invest and have fungible with it.

– Bearded old goat-seer.

– The Whole Hog: Why there’s no replacement for displacement (pipe deams).

– Dive bars, Fast Cars, Money Jars: my frugal life.
(With foreword by Smoking Man)

– Heir in the Awful Places: a guide to succession planning.

#2 Randy on 02.05.17 at 2:19 pm

Bubbles can last for a long, long time

#3 Noodles on 02.05.17 at 2:22 pm

Until interest rates rise there will be no return to reasonable prices. It’s all about the monthly nut.

So prices up 200% over the last decade and if it drops 30% this year Garth claims victory?

There is no ‘victory’ possible while people ratchet up historic levels of debt. After house prices correct, that borrowing will live on. — Garth

#4 tiny supply on 02.05.17 at 2:23 pm

Toronto’s problem is more fundamental. A huge imbalance between supply (tiny) and demand (swelling).

How is that supposed to be solved any time soon?

#5 chskin on 02.05.17 at 2:36 pm

Another form of a foreign buyers tax is to say that non-residents may only buy new builds. That way it creates construction jobs and adds to the housing stock of the nation. A bit more elegant than 15%.

#6 crowdedelevatorfartz on 02.05.17 at 2:48 pm

“tiny” and ‘swelling” should never be used in the same sentence unless , of course, one is describing a realtors “portfolio”

#7 Michael King on 02.05.17 at 2:53 pm

This property is my “poster child” for the ongoing Vancouver Westside RE madness. First listed in May/16 for 3.6 and change. Lowered in Sept./16 to 3.5 and change. It’s been off the market since mid Dec. and has now reappeared with a new agent. Still has delusional pricing IMO. New listing my a**!

http://andrewhasman.com/mylistings.html/listing.r2134908-3465-w-30th-avenue-vancouver-v6s-1w3.63283153

#8 Londoner on 02.05.17 at 3:05 pm

“The Vancouverization of the GTA is in full swing. And, yes, it will have the same outcome.”

If this is the Vancouverization of the GTA then can we conclude that GTA prices potentially have a lot higher to go? I mean since GTA incomes are significantly higher than Van incomes, wouldn’t the level of debt and speculation also be higher? GTA avg house price @ $800k vs Van avg house price @ $1.8mil.

#9 For those about to flop... on 02.05.17 at 3:09 pm

This is Melissa McCarthy’s wicked impersonation of Sean Spicer on SNL last night.

It was pretty funny…period…

M42BC

https://m.youtube.com/watch?v=QBf9bSNYje8

#10 pathcontrolmonk on 02.05.17 at 3:12 pm

“yellow guys”? Puhleez, nobody blames the Koreans or Japanese.

#11 InvestorsFriend on 02.05.17 at 3:18 pm

That Chart is deeply Flawed

What does the trend line on the average house price chart represent?

If it is supposed to represent what would have happened with a constant annual average percent increase in prices, well it simply does not do so.

Any conclusions drawn from this trend line, such as the expected 33% decrease to hit the trend line, are flawed.

A constant annual percentage growth is called exponential growth and will always eventually “hockey stick” on an arithmetic scale.

Here you plot 40 years. If you want to show a proper trend line as a straight line, you MUST use a logarithmic scale. That is simply the math of the matter.

#12 Go TrumPatriots Go!!!! on 02.05.17 at 3:18 pm

…straight to hell, with your deflated balls :(

#13 isuckless on 02.05.17 at 3:23 pm

Last year was less that 5% foreign buyers in Van
Now is 9.9%
In six months? 14.34%?
Real number 40%???

#14 When Will They Raise Rates? on 02.05.17 at 3:29 pm

Toronto’s problem is more fundamental. A huge imbalance between supply (tiny) and demand (swelling).

All courtesy of Federal, Provincial and Municipal Marxist “planners” who have restricted land use, layered on red tape in the form of regulations and fees, resulting in 90% fewer housing starts per year than 10 years ago. It’s all part of UN agenda 21’s “densification” and “sustainable development” in the name of “climate change”. This, while simultaneously shipping in 100’s of thousands of new immigrants into GTA and the Golden Horseshoe each year.

By the way, they are now planning on expanding the Greenbelt… It’s called the “Blue belt”.

Here is their Blue belt plan to restrict even more land, as they attempt to herd everyone into tiny “sustainable”, “planned growth” areas.

http://www.growourgreenbelt.ca/bluebelt_plan

First it was the Oak Ridges Morane, then the Niagara Escarpment, then the Green Belt, now the Blue Belt. These F’ers are relentless.

#15 Smartalox on 02.05.17 at 3:31 pm

@Noodles (#3):

Note that 200% on the way up is wiped out by a 50% drop on the way down!

Suddenly, 33% is looking to be a much steeper loss!

#16 paulo on 02.05.17 at 3:44 pm

There is very little doubt that the GTA is heading for a epic
real estate value correction. when you effective remove the first time buyer from the market you remove the foundation whats left is a house of cards waiting to fall.
Toronto is a or was a nice urban city,world class is stretching it. people of means have many options,and the world is there oyster. as the locals are priced out, the RE floggers push the story of “immigrants with suit cases of money” sustaining the stupidity really.. wheres the line up. 1.5 million dollar century semi’s requiring 200 grand of reno’s to be livable would put Toronto at the bottom of the list,to live in or invest in. it will likely only take one major economic event to unwind the big smokes real estate run,the smoke will be values going up in smoke,fire starts likely in May or June of this year

#17 go leafs go on 02.05.17 at 3:44 pm

your chart would make more sense if it was logarithmic. try it. see what happens.

#18 Euro observer on 02.05.17 at 3:47 pm

#121 InvestorsFriend on 02.05.17 at 1:54 pm
Some are sure the Canadian dollar is “doomed”

———————————–

You are saying there is no inflation? Just look at the grocery stores, all fruits imported, most of the veggies. a lot of food is imported. And prices are going up and up.
No place to park at Costco.

#19 Euro observer on 02.05.17 at 3:48 pm

and the Ontario hydro bills are certainly going down… Not.

#20 Vancouver in the Rearview on 02.05.17 at 3:51 pm

What methods are you using for your straight-line projection? If it’s just straight-line, I would argue that you cannot treat the last several years as being representative of where the market should land. There is an obvious change in the slope of prices that occurs ~2003/2004, when things start to get bubbly. If one is going to look at the last forty years of price growth, I would suggest that the last ten years should be treated differently given the policy madness related to housing that unfolded in Canada in the wake of the great financial crisis. You could use methods like interrupted time series analysis to be able to determine if there is a change in the level and the slope of price appreciation (Eyeballing it would suggest there is) and then account for that in your modelling of downside projection, weighting growth in the last ten years differently.

Bottom line from my perspective? I think you underestimate the potential downside loss for Vancouver. A detached house at $1.2 Million is still insanely unaffordable given the lousy wages and crazy cost of living, and unsustainable if one expects interest rates and the accompanying cost of money to rise as you (and I) do.

#21 Wrk.dover on 02.05.17 at 4:13 pm

Talked to a 416 late boomer yesterday. Knows what is going on there and plans to sell in two years. They all seem to say that don’t they?

#22 Entrepreneur on 02.05.17 at 4:20 pm

“When and why are unknown” GT…but we can give an educated guess. Clue, we are all exhausted in all avenues.

Can transfer the this thinking to climate change deniers or believers, the unknown of when and eventually why.

It all can be denied, twisted, controlled, ignored but the truth will prevail.

#23 Rock pape scissors on 02.05.17 at 4:32 pm

Though what I am posting is based on the views of a financing guy on Bay Street and I can cannot vouch to how accurate his statement may be but it made me consider how possible his statement is.

As we spoke a few weeks ago I asked what his thoughts of this pending housing bubble that could possibly go seriously wrong and many, many Canadians could be in serious trouble with their homes. He seemed quite convinced that the banks already have a plan “B”..should prices drop, and when those who need to refinance are technically underwater and Banks will only loan for what the true value is – what happens, he believes that the home itself (wood, brick, tiles) are relative. The value as we all know is the actual land, so he feels certain that banks or very powerful investment firms will essentially take over shortfall by taking possession of the “land” and lease it back to the homeowner. That’s right, just like a typical trailer park – you set up your home, but pay a lease for the right to park it on the spot! He made a very important observation, in Europe for centuries Kings and Lords owned large swaths of land and the locals would pay the right to habitat on their land -such as today. The new world (North America) never had that such designation but things could possibly turn that way. You can’t have tens upon thousands leaving abandoning their homes – nope, keep the home but lease the land. Again, this isn’t my personal view but it makes the most sense. He did finally say that this was all planned many many years ago. How best to take the very thing homeowners have worked so hard but will release without screaming – it keeps them in their home and releases them from this massive shortfall, Brilliant and well executed.

#24 The Totally Unbiased, Highly Intelligent, Rational Observer on 02.05.17 at 4:34 pm

President Donald J. Trump is the biggest reality television-radio-book-Internet celebrity star around. Everyone who is anyone is tuning in to watch him. His ratings keep on soaring higher and higher. Donald Trump does not get drunk, or smoke, or use illegal drugs, or have tattoos, or have any doubts that he is a real man who loves beautiful women. He is clearly what a real American man was meant to be.

Inevitably, and so sadly, this brings out the envy and jealousy of all the burned out old celebrity wannabes, who lay around drunk in gutters everywhere with cigarette butts dangling from their lips to try to act “cool.” When they contrast their own sordid behavior with that of Donald Trump’s behavior, which is as pure as the driven snow, they fear that all the bad examples they have tried to set will be countered and undone by him. Those in Hollywood, and various other dens of iniquity, whose opinions never used to matter, and whose opinions still do not matter, are now clamouring loudly for some attention too. It is a very competitive and nasty business, that show business.

There is a very real fear gripping Hollywood that soon everybody will be watching The Donald show live, all day, every day, and nobody will bother watching the trashy productions of the talent-less, gender-confused, tattoo-covered, Hollywood drug addicts and sex perverts any more. Even teleholics can eventually grow tired of the same old stupid smut over and over and over all the time. The producers of this stuff will have to pump into their shows even more canned laughter and fake clapping and cheering sounds to compensate for the fact that no real people will be watching any of it anymore. Since nobody will be watching their shows anyway, they might as well sell even more of the program time to advertisers. Television did not necessarily have to be used for evil, even though it previously has been. Now, with the coming of Donald Trump, television can finally be used for good. While he “drains the swamp” in Washington, Donald Trump can also “drain the sewer” in Hollywood.

Donald Trump achieved what he did by honest hard work and by good clean living. In sharp black and white contrast, with zero shades of gray, the Hollywood derelicts chose to take what they thought was the easy way of illicit sex, illegal drugs, and rock and roll noise. The big difference is that Donald Trump is a REAL celebrity who became rich and famous by doing things that were useful and good, whereas the Hollywood celebrity wannabes are just a bunch of ACTORS who tried to get rich and famous by doing things that were useless and bad. It is probably theologically significant that the Greek word for actor is hypocrite.

#25 Rainclouds on 02.05.17 at 4:55 pm

I’m with #10/19

The trend line presumably was overlaid by Cameron Muir with a ruler and means squat. Typical realtor BS optimism.

US Price to Income /Rent/ Inflation/ during similar time period

http://inflationdata.com/articles/inflation-adjusted-prices/inflation-adjusted-housing-prices/

This US data goes back 117 yrs and Canada is comparable

http://observationsandnotes.blogspot.ca/2011/07/housing-prices-inflation-since-1900.html

Considering the party is just coming to an end and we have already seen a 19% reduction. 33% in Van is probably midpoint.

#26 Kevin's Fanzone on 02.05.17 at 4:58 pm

Help !! I’m drowning in 2 feet of snow in greater vancouver. Long live climate change !!

#27 jay on 02.05.17 at 5:03 pm

Chrusty flipflopped and dropped the foreign buyer’s tax for anyone with a work permit which is as easy to get as a bowl of wonton in Vancouver, now we’ll see if the tax was working . http://vancouversun.com/news/local-news/new-trend-sees-adults-with-families-entering-b-c-as-foreign-students

#28 ANON on 02.05.17 at 5:05 pm

That chart, hmmm, looks aaaawfully familiar, I could swear I’ve seen it many times before and it looked a bit different from the moment the promises were proven MIA, on, towards to the bottom. It even undershoot a bit, but just slightly. Could be different here, and this time, though.

#29 When Will They Raise Rates? on 02.05.17 at 5:12 pm

A house on my in-law’s street in RH – significantly smaller than their house which they paid 500k for 10 years ago – just sold for 2.3 million. 200 over ask.

It’s going parabolic.

I suspect the GTA crash will happen this year.

#30 Doug in London on 02.05.17 at 5:29 pm

It’s just a fact of life – in a world where Americans now blame everything bad on Muslims.
————————————————————-
Yup, that sums it up pretty good. Couldn’t have said it better. We Canadians aren’t any better, instead of blaming Muslims we blame Chinese house buyers or the government for all our troubles.

#31 CL on 02.05.17 at 5:47 pm

Everyone worries, including the banks. Yet one wonders just where the money is coming from? Banks will lend until the end simply because the taxpayer will foot the bill when it falls apart.

#32 Damifino on 02.05.17 at 5:51 pm

…it would appear difficult for Vancouver to escape a 33% price reduction in this current correction.
——————————————-

And let’s not forget, a 33% loss is all that’s necessary to erase a 50% gain. Percentages get meaner on the way down.

#33 Reply to #23 on 02.05.17 at 5:56 pm

Your comment is reminiscent of the Summi Pontificatus, an encyclical of Pope Pius XII published just shortly after the Invasion of Poland.

#34 GTA How Depressing on 02.05.17 at 6:09 pm

When average families cannot afford to purchase a home in an area in which they are we’re born and raised, this, to me, is a epic societal failure. Why protect foreign buyers, clearly Garth you and realtors don’t think there is an issue, so are we worried we are going to hurt their feelings? Clearly if they can afford to buy into our luxury markets a 15% tax will not kill them. I am not against people who want to come here, to live, work and contribute by paying taxes, but I don’t believe foreign speculators should be treated the same as Canadian citizens regarding home ownership.

#35 To the Moon on 02.05.17 at 6:18 pm

“The Vancouverization of the GTA is in full swing. And, yes, it will have the same outcome.”

If this is the Vancouverization of the GTA then can we conclude that GTA prices potentially have a lot higher to go? I mean since GTA incomes are significantly higher than Van incomes, wouldn’t the level of debt and speculation also be higher? GTA avg house price @ $800k vs Van avg house price @ $1.8mil.

———

GTA prices have much much higher to go to be on par with Vancouver. Smoking Man called a peak in 2018 and he will be right as 2017 will blast the 2016 record.

If the average family income of 70k can yield an average price of $1.5 million in Vancouver, then based on those fundamentals alone, the GTA market with higher average salaries, less debt to income, and a more diversified economy, can skyrocket.

Since apparently foreign capital had no significant influence – not sure how 20% foreign buyers in Richmond is not significant – but anyways, since it is not a driver then its ONLY local fundamentals that count. And TO’s are much much better than Vancouver’s. Ergo, a lot more room to move up.

But lets take our lead from the trusty real estate cartel – their frankenumber is sound; their motives pure; and their knowledge of foreign buyer levels to be accepted unquestioningly.

Its not like – ahem – the RE cartel lied through its teeth with the usual ‘less than 5%’ of sales narrative given to Vancouverites for years.

Every wonder why the RE industry is now sweating the foreign buyers tax after declaring the non-existent influence of foreign buyers and why they are cheering the tweaking of the tax?

If foreign buyers are not a driver, then why sweat the tax – just laugh it off as window dressing. Unless of course…….

#36 Yan on 02.05.17 at 6:19 pm

In every article Garth keeps telling us about falling in abyss Vancouver and imbalance in Toronto. Neither is true.Vancouver prices will go up this year and don’t expect any Toronto crash. It just won’t happen over the next 4-5 years.

#37 Cow Man on 02.05.17 at 6:24 pm

Amigos:
No one will address of the major reasons as to why there is a shortage of supply. That is the almost tax free speculation by developers on greenfield lands. Big developers buy the land and sit on it for years paying agricultural taxes, of less than $50 per acre. If the assessment went from “in use” to “as zoned assessment” the taxes would force the speculators to build on the land. Instead it sits there with minimum property taxes as its value increases. The developers are purposely shorting the supply to their own benefit. The Province does nothing to change the in use provisions of the Assessment Act. Of course every one feels richer because their assessment is going up. It only hurts the new entrants to home ownership. Everyone else increases their net worth.

#38 Anybody need a place to rent in Toronto ? on 02.05.17 at 6:29 pm

Owners are kings

#39 Kim on 02.05.17 at 6:41 pm

Until interest rates rise there will be no return to reasonable prices. It’s all about the monthly nut.

So prices up 200% over the last decade and if it drops 30% this year Garth claims victory?

———–

Noodles, learn some math will you?

An asset that goes up 100%, only needs to go down 50% to be back to normal.

A 30% drop in real estate is significant. For those who bought with less than 30% down at the peak, they are in negative equity most likely. For those who bought near the peak, they have almost lost their entire downpayment. But who knows, maybe people will find bargains and keep buying.

All I know is that YVR RE is full of risk right now. RE pumpers have for years said the stock market is a casino. Well, there is nothing more risky than YVR RE right now.

#40 Tony on 02.05.17 at 6:41 pm

A 15 percent foreigner’s tax on the GTA would knock prices down more than twenty percent overnight. Remember where you read this if and when the tax is enacted.

#41 crowdedelevatorfartz on 02.05.17 at 6:58 pm

@#23 Completely biased, Mercifully devoid of Intelligence, Irrational Propagandist

“the Hollywood derelicts chose to take what they thought was the easy way of illicit sex, illegal drugs, and rock and roll noise.
******************************************

Jealous?

#42 Marius on 02.05.17 at 6:59 pm

http://www.businessinsider.com/regulation-changes-in-china-could-crash-vancouvers-real-estate-market-2017-2

#43 For those about to flop... on 02.05.17 at 7:00 pm

After doing some investigating last night after seeing some Pink Snow in Richmond,i discovered the development in question has 3 phases and 9 units currently for sale at that site named Ora.

There had been over 20 for sale recently and with some sales in November/December recorded it will be interesting to see what happens to these people.

Some of these units had 2/3 price reductions before selling and some of the current listings openly flaunt the fact that they are listed so far below assessment.

Was there any reason to be paying 600/700 k in Richmond to live in a condo or to speculate?

In my research at this development I discovered multiple properties had been bought and sold on the same date ,same dollar amount and the same realtor doing the transaction.

In looking around I saw a chart that grabbed my attention, it shows after price per square ft. in Richmond being constantly around $530 before spiking in June at over $600 and retreating rapidly and clocking in at$470 by August 2016.

Not sure if they stop recording this information because it was getting too messy, but it’s one hell of a coincidence…

M42BC

https://www.buzzbuzzhome.com/ca/ora-phase-3

#44 crowdedelevatorfartz on 02.05.17 at 7:00 pm

@#35 Yam
“Vancouver prices will go up this year …..”
+++++++++++++++++++++++++++++++++++

Then buy a house this year and we’ll rename you “Squash”.
sorry, i couldnt help it……Yam / Squash …..it was funny at the time.

#45 Dave on 02.05.17 at 7:02 pm

The market has slowed down because the Chinese government is finally cracking down on illegal money flows. It has nothing to do with the 15% tax.

Nice theory, but wrong. The market started to tank last April, when there were neither controls nor a foreign buyer tax. — Garth

#46 Fleabitten Monkey on 02.05.17 at 7:08 pm

#35 – ehmm, so Yan? Are you suggesting SFD home prices in Vancouver have not fallen from peak? Are you refuting the data sets that are coming out or are you simply suggesting they are merely a sawtooth downwards to be followed by further ascent upwards?

#47 The Wet Coast on 02.05.17 at 7:12 pm

The main reason Vancouver house sales are falling is because the houses can’t be found, as they are under 20 feet of snow.

#48 Tony on 02.05.17 at 7:26 pm

I just checked mls for Belleville, prices haven’t budged upwards in years. Still the same. The difference between Lindsay and Peterborough is the property taxes are much lower or the mil rate is much lower.

#49 Tulips on 02.05.17 at 7:29 pm

#37 Anybody need a place to rent in Toronto ?
>> Owners are kings

Until more people own than ever, at which point owners become commoners. The commoners who toil to pay the taxes (interest, maintenance, property tax) for the few who enjoy the benefits without the cost (the true kings = renters).

#50 Lib/Left Takeover Team on 02.05.17 at 7:45 pm

Heh, heh, heh, now that all the testosterone junkies are busy watching a stupid football game created by the illuminati to control them, we have hacked in and are SEIZING THE MOMENT!!!

This blog henceforth shall be controlled and edited by pro-feminist/LGBTQ/environmentalist/progressives.

All contrary opinions will be DELETED!!!

(A few will be allowed to be displayed, merely for our own amusement)

Guide yourselves accordingly.

Enjoy the game, deplorable losers!

Bwaaahaaahaaahaaahhaaahhaaahaahhahahahaaa!!!

#51 George on 02.05.17 at 7:59 pm

DELETED

#52 Timmy on 02.05.17 at 8:05 pm

Vancouver went up by about 25% last year alone, so a 33% correction won’t move the needle for those who have been waiting to get into the market. This means prices will be like they were about 4 years ago.

#53 Yan on 02.05.17 at 8:06 pm

I remember reading a site in 2002. Daily they published
articles and graphs proving imminent US market crash within next 6 months. One poor guy even sold his condo in Buffalo too soon. No one knows what lies ahead. It won’t end soon as many of you think.

#54 ole Doberman on 02.05.17 at 8:08 pm

Reason people are buying despite unaffordability is because they DID learn the lesson in Vancouver – that even after a housing correction prices can still end unaffordable and you dont know when the party will end.
What a sad state indeed.

#55 Cowpoke on 02.05.17 at 8:19 pm

Counterfeit US money coming in from all over the world. The big Canadian sellout. Enjoy the show.

#56 D.D. Corkum on 02.05.17 at 8:55 pm

I concur with #10 and #16. It is misleading to show a 40-year chart with that kind of scale, and the alleged trend line has no mathematical basis.

A log scale would solve the problem. Alternatively, one could use inflation-adjusted dollars on a linear scale.

#57 Chaddywack on 02.05.17 at 9:08 pm

I think the biggest thing with the tax was the psychology behind it that made LOCALS hold off on buying.

I’ve finally stopped hearing from people that “The Chinese are buying up everything.”

Especially since this Chinese New Year did not seem to be too auspicious for buying…..I guess the year of the rooster has made people less cocky about their Vancouver real estate investments.

#58 NoName on 02.05.17 at 9:12 pm

Canada self reported overweight or obese in 2014, nearly half of population 14 mil (stats can), what bring me to topic of fast food

FAST FOOD INDEX

THE PIZZA PRINCIPLE
pizza UP – subway ride UP
BIG MAC INDEX
shows undervalued currency
POPCORK INDEX
higher sales – market UP
WAFFLE HOUSE INDEX
helps to determine severity of natural disaster, generally hurricane

https://goo.gl/eZTM6U

#59 Sean on 02.05.17 at 9:14 pm

A more traditionally drawn trend line (plotting the higher lows) points to about $700k for a detached… maybe a 60% decline. That sounds a bit more realistic for the post ecstasy hangover that’s coming.

#60 professional statisticologist on 02.05.17 at 9:15 pm

What don’t you guys understand about the graph?? It’s perfectly clear, you see the large blue down arrow that says 33%? That’s what you need to know it really isn’t that hard.

#61 Smoking Man on 02.05.17 at 9:17 pm

Wow, not only did Lady Gaga drop the mic, she slammed it. Great performance, no politics, a kind message of unity. Found it sincere.

I’m now a fan.

#62 The Wet Coast on 02.05.17 at 9:21 pm

53 Joe2.0

Good friend of mine a successful RE agent in Vancouver said that there is still loads of properties being bought up by foreigners via creative methods.
It’s the biggest game going.
___________________________________________

With sales off 80% in the high profile areas they must be the only ones buying. Which will make them very easy to find. Sound more like RE hype to me. Sales of RE are way down in many of the preferred spots for international money. Take a read what’s happening in Australia. Off shore money is walking away from deals, because they can’t get the money out. This also leads me to believe that Toronto is mostly local fools.

#63 Steven H on 02.05.17 at 9:24 pm

Joe2.0 on 02.05.17 at 8:16 pm
Good friend of mine a successful RE agent in Vancouver said that there is still loads of properties being bought up by foreigners via creative methods.
—————————————————–
According to Jan 2017 sales stats from Real Estate Board, only 87 detached houses sold in Vancouver. That doesn’t sound like “loads of properties” to me.
Your real estate friend is likely perpetuating the myth that foreigners are buying boatloads to scare locals into FOMO.

#64 Boombust on 02.05.17 at 9:26 pm

Joe2.0

Sure, Joe. Whatever you say.

#65 Leo Trollstoy on 02.05.17 at 9:28 pm

Many Torontonians consider declining GTA real estate prices to be like big foot. They’ll believe it when they see it. Otherwise it’s a myth.

#66 april on 02.05.17 at 9:31 pm

Is this 33% on top of the already 19.7% in Vancouver. I understand this is for houses. Does anyone have the numbers on the condo situation?

#67 Fanboi on 02.05.17 at 9:53 pm

#60 Smoking Man on 02.05.17 at 9:17 pm

Wow, not only did Lady Gaga drop the mic, she slammed it. Great performance, no politics, a kind message of unity. Found it sincere.

I’m now a fan.

Are you sure?

http://www.sbnation.com/lookit/2017/2/5/14518090/lady-gaga-donald-trump-protest-super-bowl-halftime-show-patriots-vs-falcons

#68 For those about to flop... on 02.05.17 at 10:01 pm

Hey April here is some Condo information for you.

Scroll down and under the first chart click on the word”condo” and after seeing all the red ,you will see some green.

I thought condo market was still going strong but last night I unearthed some Pink Snow falling in Richmond ,possibly 20/30 people in big trouble just in one development.

I even saw one where the mortgage was $2200 a month after putting 20% down and was currently being rented out for $1300 ,so that person is probably hurting.

Another unit was bought for 685 k last February and they can’t get an offer of 648 k for it and are leaking oil…

M42BC

https://www.zolo.ca/vancouver-real-estate/trends

#69 oncebittwiceshy on 02.05.17 at 10:03 pm

Joe2.0 “It’s the biggest game going.”

Sorry Joe, you’re speaking in the past tense when realtors could actually incite Vancouver buyers with these handcrafted stories.

Perhaps, you should take a look around instead of talking to your real estate friends. They have plenty of time to talk now.

It’s amazing that all the sellers don’t realize that all these foreigners are buying everything up. Sales are down precipitously and in only 5 days of February there have already been 50 price changes….37 down.

Average Change: -3.54% Up:13 Down:37
Overall $ Change: -3252076.00 Average Change Amount:-65041.52

Perhaps, you could be a little supportive and recommend your buddy for a job at your workplace.

#70 Spaccone on 02.05.17 at 10:17 pm

The time to pay the piper will come in the GTA. Demographic consequences will take its pound of flesh sooner or later. From anecdotal observations I see no one having the amount of kids that generations past had in the 70s to early 90s…older generations being replaced at a rate of 1 for every 3 or 4 cannot justify the current inventory for that long. Tons and tons of never-marrieds, failed-to-launch’s, and “dead branches” everywhere (myself included)…the only solution is tons of insta-Canadians brought in mainly from 2nd- and 3rd-world countries and that hillbilly weirdoland to the south of us (disclaimer: my parents came from 2nd-worldish conditions in Euroland).

#71 Smoking Man on 02.05.17 at 10:36 pm

After the 1/2 time show I told wifeepoo that the Patriots are going to win. She thought I was nuts.

I told her that Brady is a Trump Fañ and CNN head office is in Atlanta.

Either a god or an alien will make this happen.

I told her the final score would be 36 for God’s team. to 28 for CNN team. Well I need to work on the ucc a bit more. It’s not quite perfect yet.

May the force be with you dogs, It’s real.

#72 Pete from St. Cesaire on 02.05.17 at 10:44 pm

When average families cannot afford to purchase a home in an area in which they are we’re born and raised, this, to me, is a epic societal failure
——————————————
Trouble is that these housing bubbles and the whole 9-yards that go with them (HELOCS, etc) are the only thing supporting Canada’s economy now; and the ‘average family’ is lucky to have that artificial bubble to sit on. In the US it’s their policy of QE being pumped into the stock markets keeping their economy afloat without immediate hyperinflation. Once the economic collapse happens it will be like Zimbabwe.

#73 Kevin's Fanzone on 02.05.17 at 11:11 pm

DELETED

#74 45north on 02.05.17 at 11:13 pm

Given recent price trends, it would appear difficult for Vancouver to escape a 33% price reduction in this current correction. Of course, it could be far worse

Ross Kay mentioned that Toronto house prices declined 10% in the 1990s but that the good people of Toronto made it up simply by paying down their mortgage for 10 years. Once it looks like a 33% decline is possible, I’d say CMHC changes the rules so that it insures up to 90% of the mortgage – the bank takes the risk for 10% and at that point the housing market stops. Dead in its tracks.

#75 Roial1 on 02.05.17 at 11:26 pm

since most people can no longer afford to sell and move. It’s a self-perpetuating vicious circle. Crap houses in questionable areas of 416 are getting 10 offers and selling for 25% above list.
————————————————————
That has to be the most laughable statement EVER!

Take the money and RUN!

Get out of Dodge (TORONTO)

Get out of Ontario!

Out here on V.I. You can buy a great house and live on the invested proceeds of the million+ left over for the rest of your life.

What to do??? Lets see. I have gone skiing in the morning, golfing in the afternoon, and salmon fishing after dinner. Oh ya, and gulped down a few beers when the fishing was slow.

And the air is MUCH cleaner than ONT.

Next week we are off to Argentina, just for the fun of it.
That million goes a long ways.

#76 jay on 02.05.17 at 11:26 pm

The rental market is cooling down in Vancouver. https://vancouver.craigslist.ca/van/apa/5991011817.html

#77 Joseph R. on 02.05.17 at 11:31 pm

When the AFC division wins the Superbowl, it’s a bad omen for stocks:

http://www.marketwatch.com/story/the-fate-of-the-stock-market-could-rest-on-tom-bradys-shoulders-2017-01-30

“Oddly enough, this indicator has been correct 80% of the time since 1967,” said Sam Stovall, chief investment strategist at CFRA, said in a Monday note with the title, “Wall Street’s Odd Infatuation with Correlations that Lack Causation.”

#78 Renter on 02.05.17 at 11:59 pm

It’s been so long since we had a long term housing correction (early 90’s), that people just don’t realize what they are walking into.

Wife and I rent an new end unit townhouse in a new subdivision. Amateur investor. Nice guy, with a good family, but new to Canada (about 10 years). Same with the subdivision. Majority are new Canadians. Good neighbor’s, but completely uneducated about past housing bubbles.

I can only guess what our landlords mortgage is, but he is not an incredibly wealthy man. If I assume 10% down and mid 2% mortgage over 25 years, my monthly rent would barely cover his mortgage. That leaves maintenance, insurance and property taxes.

He honestly cannot be making money off this townhouse.

Worse thing is, he’s not alone … but we love the townhouse!

#79 NoName on 02.06.17 at 12:16 am

Yap this sums it up quite nicely.

https://mobile.nytimes.com/2017/02/05/opinion/meanwhile-in-canada-things-are-just-as-bad.html?smid=tw-nytopinion&smtyp=cur&referer=https://t.co/Fl1mms00uB

#80 When Will They Raise Rates? on 02.06.17 at 12:33 am

So I took last week’s advice and tried to gain a different perspective by watching some CNN…

Here’s what I watched:

https://www.youtube.com/watch?v=iM8jF7I_VRQ

WTF????????????

Is this where you people get your news???

How can you actually watch this and take it seriously? How can you stomach this for more than 30 seconds???

Geezus. Damn, Hillary supporters and Trump bashers are seriously messed up. LOL

#81 Rexx Rock on 02.06.17 at 1:04 am

Until wages drop or interests rates rise which they won’t house prices will rise in Ontario and Victoria.Its a norm to give your kids over $200,000 so they can purchase their first home in Victoria.Median family income in GTA and Victoria is well over $150,000 so its not a big deal.The standard is very high,everyone wants a house and its a great investment with over 20% annual price increases for the last couple of years.The sad note is renters feel so much shame and guilt and have to listen to so many homeowners bragging about easy money.

#82 Ponzius Pilatus on 02.06.17 at 1:16 am

#42 For those about to flop… on 02.05.17 at 7:00 pm
After doing some investigating last night after seeing some Pink Snow in Richmond,i discovered the development in question has 3 phases and 9 units currently for sale at that site named Ora.
————–
Ora means “pray” in Latin.
Lots of presale buyers are praying right now.

#83 Ronaldo on 02.06.17 at 1:23 am

”There is no ‘victory’ possible while people ratchet up historic levels of debt. After house prices correct, that borrowing will live on. — Garth”
—————————————————————–
Yep, when interests rates double in the next 5 years, people will be paying twice as much on a debt worth double the value of their homes. How can this end well?

#84 Reply to #70 on 02.06.17 at 1:24 am

A prediction should be made before (not after) the event.

“Prediction is very difficult, especially if it’s about the future.” – Niels Bohr

#85 Ponzius Pilatus on 02.06.17 at 1:24 am

Re:superbowl.
Humiliating to see the old Bush being wheeled in on a wheelchair.
Feeble with rotting teeth.
Sure, America the Great.
Not even former Presidents have a dental plan.
Karma, maybe?

#86 Van down cuz China restricts currency exchange on 02.06.17 at 1:49 am

China has new rules restricting amount of yuan that can leave the country. These new restrictions can/have reduced buying property anywhere.

Existing properties may have to be sold if the currency limits cannot cover existing mortgages.

This could be another reason for Van’s real estate changes.

http://www.businessinsider.com/regulation-changes-in-china-could-crash-vancouvers-real-estate-market-2017-2

#87 westcdn on 02.06.17 at 1:55 am

Wow what a game. Never give up. My favourite commercial: http://hollywoodlife.com/2017/01/30/mercedes-benz-super-bowl-commercial-2017-ad-peter-fonda-video/

It appeals to me. I need a lot of luck to follow. Oh,
M62ab

#88 Chart Needs R Squared Balue on 02.06.17 at 3:11 am

Trendline linear is fine as long as R squared > 0.9. If you want a formula for future data prediction, Polynomial Regression in Excel could also be used.

Pick a regression method with the highest R squared and that is as good a guess as any for the trend.

This chart similar to another floating around some YVR Realtor sites – that one projects a drop of 40
% or more…depends on the start year.

Nothing wrong with the chart provided R squared > 0.9.

#89 Dan.t on 02.06.17 at 4:35 am

Based on that chart, if I didn’t know what it represented, I still would not be a buyer even after the projected 33% drop.

Value would be more like (guessing since I can’t see the years, 2005-2006 prices). You see charts like this time and time in the stock market or commodity markets.

Asset starts to move (trend)upward, smart money gets on board or is already on board, public gets wind, the herd starts to see crazy price rises and profits, the news shoves it down the sheeples throat, public piles in, EUPHORIA, last suckers buy in, price peaks, starts to roll over, public thinks, it’s all good, just a correction, declines continue, investors underwater, oh god, if this things goes up just a bit I’m getting out, more sellers, prices fall, those hoping for a miracle panic, hit sell button hard and swear NEVER to invest in this thing again.

If that was a venture capital chart, it would most likely drop to 2002 prices (looks like bubble chart)- a more stable asset, and reasonable investor would consider 2005-6 prices but this is REAL ESTATE and its Canada’s pride and joy (everyone is a player and savvy investor), its pumped on tv 24/7, encouraged massively by government policies and I believe shady and honest foreign money plays big role too- so who knows.

Point being, if this was hyped up stock (I know it’s not) that would all play out in weeks or months- other assets based on cycles can be years and this real estate cycle is ending- 17-18 year run up would be ok if government hadn’t made policies to encourage reckless speculation, and massive debt levels- a normal correction would be ok but that looks like a big time bubble chart so who knows.

Maybe the real estate belief and love in Canada is so great that this all just keeps on defying logic- maybe the government will come up with even more ways to intervene in the free market- most likely. Either way playing and allowing speculation on housing is POOR goverment policy and it’s caused massive debt levels, unaffordable communities, made things worse not better for a whole upcoming generation- boomers made out like bandits. Congrats. Unfortunately their world is not our reality so following their footsteps in probably not the best course of action.

#90 Saint Herb on 02.06.17 at 6:46 am

“The Vancouverization of the GTA is in full swing. And, yes, it will have the same outcome.”

But WHEN???

I’m so tired of being on the wrong side of this housing market.

At least my investment portfolio is finally making some gains.

#91 jess on 02.06.17 at 7:51 am

inequality is too soft a word
Publish What You Pay.

Backers say it will help keep payments to foreign nations in government coffers, not private pockets.

Both the House of Representatives and the Senate passed a motion to roll back the bi-partisan Cardin-Lugar provision, also known as Section 1504 of the Dodd-Frank Act Section 1504, in the same week that Rex Tillerson, former head of US oil giant ExxonMobil, was confirmed as Secretary of State.
http://www.publishwhatyoupay.org/

http://www.spiegel.de/international/tomorrow/poverty-and-prosperity-in-kenya-neighbors-across-the-divide-a-1131650.html

Continent of Secrets: Uncovering Africa’s Offshore Empires

Jul 25, 2016
https://panamapapers.icij.org/20160725-africa-offshore-game.html
Offshore companies play a major role in the $50 billion sucked out of Africa each year. This game will test your general knowledge of Africa, and challenge you to uncover secrets hidden inside the Panama Papers.

====================================================
canadian connection – $$$
the Saipem-Sonatrach scandal – Bedjaoui

https://panamapapers.icij.org/20160725-natural-resource-africa-offshore.html
…” Twelve of 17 companies under investigation by authorities in Italy in relation to a $10 billion oil and gas deal in Algeria were created by Mossack Fonseca

#92 maxx on 02.06.17 at 8:03 am

#5 crowdedelevatorfartz on 02.05.17 at 2:48 pm

““tiny” and ‘swelling” should never be used in the same sentence unless , of course, one is describing a realtors “portfolio””

Good grief that’s gross. Well done.

#93 Dominoes Lining Up on 02.06.17 at 8:08 am

Is this a sign of a financial tipping point?

Looks so from here.

https://www.thestar.com/news/gta/2017/02/06/john-tory-presses-premier-to-address-daycare-crisis.html

Toronto cannot afford to support daycare, city spaces only meeting 28% of local needs. The mayor wanted to impose road tolls on mostly 905ers (at little cost to him politically) but the premier refused, she needs those votes.

Now the mayor won’t raise taxes even to pay for local childcare, won’t even continue to subsidize school space used for daycares, again passing the buck to the province. His budget is too tight. Because property taxes are way too low.

So, the money ain’t there and neither is the political will to raise taxes.

Services like public health, many city staff unfilled positions, police are already being cut. The spending gap is high and cities cannot carry debt, by law.

The real underlying issue is how so many lemmings have gambled big time on over priced real estate and now have no room to move, no ability to pay for taxes or childcare, a true essential.

In my family, we made sacrifices. We both worked, and rented while the kids were small, to control costs while growing our assets.

Today, everyone is maxxed out, and expects everyone else to bend over to adapt to their “special” conditions

Especially governments lacking financial and political capital.

The blame game will be interesting political theatre. But it will only last until the bills are due.

Meltdown coming………………….

#94 waltermittywest on 02.06.17 at 8:15 am

#74 Roial1 on 02.05.17 at 11:26 pm
Out here on V.I. You can buy a great house and live on the invested proceeds of the million+ left over for the rest of your life.

What to do??? Lets see. I have gone skiing in the morning, golfing in the afternoon, and salmon fishing after dinner. Oh ya, and gulped down a few beers when the fishing was slow.”

Always laugh when I hear the old golfing and skiing on the same day bugaboo from the rainiest place on earth, but do not know anyone who has ever actually done it.

Challenge for the poster, post your full schedule and results here.

Golf where what time, ski where what time, fish where what time. Provide all times such as commuting, and logistical info on transporting the sports equip., and costs for green fees, lift tickets, fishing permits, etc.

Also what was your golf scores, how long did you ski, and how may fish did you catch…..then go back to your fantasy world!

#95 pBrasseur on 02.06.17 at 8:27 am

The Vancouverization of the GTA is in full swing. And, yes, it will have the same outcome. – Garth

Clearly, when most could not afford to buy their own home you know the market is sick. It’s only a matter of time before fundamentals take back their rights. A crash is a very real possibility at this point and when the herd starts to panic the consequences will be far reaching for the whole country, recovery could easily take a decade.

#96 crowdedelevatorfartz on 02.06.17 at 8:50 am

@#23 The Totally Unhinged, Highly Irrelevant, Rationalizing Obsfucator
********************************************

Is there a ruler on your planet?

#97 Bat Flipper on 02.06.17 at 9:20 am

Saying that there will be eventual regression in the Toronto RE market is without a doubt; however, it could be years till the supply picks up or the demand decreases. For the amount of supply, there is ample demand just based on organic growth. People get married, want to have kids. Get cash from parents or have them co-sign and they buy. The other side is demand.

We all have a place to sleep at night, so there is more than enough housing for people. There is a vacancy rate, which means a percentage of houses are empty every day. There is also plenty of houses that are vacant and not up for rent. A high leverage crude form of investment, that has worked for the past 9 years.

So, to get the price to reduce, increase the supply side which can be done a few ways:
– vacant house tax.
– foreign owned tax.
– tax benefits for building housing, especially high density housing.
– tax benefits for more people living in one house.
– etc.

Government can easily control people’s behavior through the use of taxation to achieve their goals. By adding or removing taxes for certain activities, they can manipulate the masses.

Want more people to take public transit? gas tax, road tolls, license plate taxes. while reducing public transit costs.

the same can be done for real estate.

#98 NoName on 02.06.17 at 9:24 am

As my 0 flips to 1 today, it hit me, best thing about boolean is that i am only older for a bit.

M41ON

#99 soost on 02.06.17 at 9:25 am

As I’ve said before- in Toronto – just like Vancouver – there are 1000 ignored reasons why this market should crash. In Vancouver, I believe that the 15% tax was the match.

I think that in Toronto it would do the same. As long as it is a SUFFICIENT condition to dip the market in the GTA I am for it. Its may not be grounded in reality – its certainly not grounded in xenophobia.

Regardless of what happens it may jolt the irrational psyche. Let’s get on with it.

#100 Reply to #95 on 02.06.17 at 9:38 am

It’s always good to start the day with a good chuckle.

#101 Bond Junkie on 02.06.17 at 10:18 am

Settle down Falcons fans… we are a long, LOOOONG ways off from the Vancouverization of the GTA.. like 10yrs off.

Everyones complaining about affordability, and I get that, Toronto is an expensive city. But you can still get a pimp pad in the 416 for 2mil. When 2=4 then I will admit we are in full V mode. But until 2=4… there can be no such claim. Sorry.

-Bj

#102 Musty Basement Dweller on 02.06.17 at 10:23 am

The Wet Coast on 02.05.17 at 9:21 pm
53 Joe2.0

Good friend of mine a successful RE agent in Vancouver said that there is still loads of properties being bought up by foreigners via creative methods.
It’s the biggest game going.
___________________________________________

With sales off 80% in the high profile areas they must be the only ones buying. Which will make them very easy to find. Sound more like RE hype to me. Sales of RE are way down in many of the preferred spots for international money. Take a read what’s happening in Australia. Off shore money is walking away from deals, because they can’t get the money out. This also leads me to believe that Toronto is mostly local fools.
≠=============
I think both of these arguments have merit. I believe there are many legal ways of transferring large amounts of capital into Canada from foreign countries, and it is still happening and having a big impact on prices. Although that is difficult to quantify, I would think it would be possible to quantify at least the percentages of sales that require local financing (often aka local fools). I would be interested in stats for that in Vancouver and Toronto.

Who cares? The impact on pricing is obviously negligible. Worry about things that actually matter. — Garth

#103 Wrk.dover on 02.06.17 at 10:33 am

I bailed on GTA when my $4/hr would not float a $50 grand entry house. So now at $40/hr they stay and buy for fuzzier math?

#104 Reply to #96 on 02.06.17 at 10:39 am

Taxation and subsidy aren’t the only ways to change people’s behaviour.

There’s also choice architecture (reducing choice overload, drawing attention to future outcomes of decisions, making options and attributes more understandable, giving feedback, creating incentives, inclusion of defaults in the choice frame, and so on).

See Thaler and Sunstein (2008), “Nudge: Improving Decisions about Health, Wealth and Happiness,” New Haven: Yale University Press.

#105 rainclouds on 02.06.17 at 11:11 am

Unwinding QE “will be a massive and long-lasting hit” for the mortgage market, said Michael Cloherty, the head of U.S. interest-rate strategy at RBC Capital Markets

https://www.bloomberg.com/news/articles/2017-02-06/the-mortgage-bond-whale-that-everyone-is-suddenly-worried-about

#106 Truthbetold on 02.06.17 at 11:11 am

I’m making a bold prediction just like Garth. Vancouver’s real issue is not RE, but rather earthquake. (California as well). The big one is coming. Long term stats suggest it’s overdue. I will predict just like Garth – it will happen we just don’t know when. My predictions are just as useless – an event without a timeline is of no real value to anyone. Garth has been predicting this crash for what, about 10 years now. Eventually it will happen, just like my earthquake.

#107 Self Directed on 02.06.17 at 11:15 am

#100 Bat Flipper on 02.06.17 at 9:20 am
Want more people to take public transit? gas tax, road tolls, license plate taxes. while reducing public transit costs.
…………………………………………………………..

Bat Flipper, already trying this (and failing) on the west coast.

Only ones successful at it are the fat Translink executives with their 6 figure salaries and bonuses (and you can bet they don’t ride a bus).

I personally think it’s a government conspiracy/scam. Let’s see… make transit unreliable and expensive so no one will use it, then charge them a fortune to own and operate a car. Check!

It’s just one of the contributing out of pocket expenses to live here. And people wonder why the economy is sucking.

#108 For those about to flop... on 02.06.17 at 11:22 am

Hey Spectacle, after seeing the carnage at Ora and your observation about there being a lack of activity and lack of lights on at nighttime ,I delved into another recent development called the Mandarin Residences on Number 3 Rd in Richmond and saw the same trouble brewing.

The building was a sellout and now the speculators are left holding the bag.They are expecting people to pay 600/700k for a 2 bed/2bath and there was some activity before Xmas but now some guys are trying to undercut other vendors by taking 40/50 k off and still no bites.

As you said, there is still a lot of product to become available in this area and the developers will still believe there is money to be made at a slightly lower price,but at some stage it will dawn on some of the current owners that buyers can get a 2017 development for less than they can for their stale 2014/2015 listing.

On another note, Happy Birthday to NoName, you and WULLY share the same week birthday wise, so you might as well go halves in a cake to save some money…

M42BC

#109 Sales mix important on 02.06.17 at 11:32 am

Prices haven’t fallen in vancouver. Sales mix is skewing average price downwards.

Plus frankennumbers being used to give illusion that prices are crashing so Feds don’t tighten mortgages any more.

Price correction in Vancouver is #Fakenews

#110 Doug in London on 02.06.17 at 11:42 am

@Yan, post #53;
Yes, I remember in early October 2002 I read an article where some “expert” said we were in a bear market that could go on for 10 years or more. After reading that analysis I knew we were at a market bottom. I was already fully invested, having bought equity mutual funds over the last year when they were on sale. Otherwise I would have gone on a frantic buying spree.

@Renter, post #79;
That’s what’s so great about the free market system. You are free to make smart choices, as you have, letting someone else willingly subsidise you. You also have the freedom to make not so smart choices, as your landlord has apparently done. Sure beats the hell out of the Soviet style centrally planned economy.

#111 saskatoon on 02.06.17 at 11:49 am

wow! that is an overly optimistic chart!

we’re a-headin’ back to 2001 prices boys.

#112 Rentin on 02.06.17 at 12:08 pm

Garth,

You could have done better with that chart. I actually think the 40 year trend line is lower. But you didn’t put the y axis on a log scale, so it has the same effect, but you draw much criticism on such an elementary error. You’re a smart guy. Perhaps you do this on purpose to see who is paying attention?

#113 For those about to flop... on 02.06.17 at 12:21 pm

Hey Broadway ,can you find out how much 718 E 62nd Ave went for?

They had it on for 1.5m and two days ago dropped 200k off it to 1.3m.

I would ask my guy ,but he doesn’t want to talk to me anymore…

M42BC

#114 Victor V on 02.06.17 at 12:32 pm

The golden opportunity of a pension windfall might be slipping away as interest rates rise

http://www.financialpost.com/m/wp/news/blog.html?b=business.financialpost.com/personal-finance/the-golden-opportunity-of-a-pension-windfall-might-be-slipping-away-as-interest-rates-rise&pubdate=2017-02-06

#115 Metaxa on 02.06.17 at 12:52 pm

#97 waltermittywest:
Always laugh when I hear the old golfing and skiing on the same day bugaboo from the rainiest place on earth, but do not know anyone who has ever actually done it.

Although the Metaxa’s don’t ski we do use that terrain for mountain biking, snowshoeing and hiking.

To me golf is a good walk ruined but…

We also use the local waters for kayaking, fishing and general beach type activities.

Let me assure you that you could, if you so desired, ski in the AM, golf in the PM and fish in the evening. At very certain times of year for sure and I do not know why anyone would want to spend a day like that but each to his own I guess.

From my compound the mountain is 45 minutes away if the road is plowed and sanded all the way up, the nearest golf course is 10…with at least three others under 30 minutes away. The ocean is a ten minute walk away. I can be on the water, set and fishing under 45 minutes.

So hold your fire, let the man brag. I have two lucky Vancouver refugee families in my hood, both younger families with school aged kids, who sold out of Van this past year and bought a $300,000 home here.

Money in the bank, good schools, brand new hospitals, ski, golf, fish all in one day and both have smoking hot wives…you jealous?

Plus they have me for a neighbour…its all about quality of life. I ignore Christy.

#116 JonicDonic on 02.06.17 at 12:56 pm

Q for #114 saskatoon
Facts:
Richmond:
2001 – $250.000 Single house price
2017 – 1,500.000 Single house price
15 years appreciation – 1,250.000
Question:
What correction % required to see 2001 price level?

#117 jess on 02.06.17 at 1:12 pm

too old jail ? alleged tax evasion and vote buying?

French billionaire and politician Serge Dassault (91 yrs) has been fined two million euros and banned from public office for five years for money-laundering and tax evasion. The senator and boss of Dassault Aviation and Le Figaro newspaper was found to have hidden over 40 million euros in foreign bank accounts…”
http://en.rfi.fr/france/20170202-french-industrialist-dassault-fined-two-million-euros-tax-evasion

Cash in plastic bags
http://en.rfi.fr/france/20160704-french-billionaire-dassault-trial-tax-evasion
===============================

The former prime minister has said he will only step down if investigators decide to press charges against him. But time is playing against Les Républicains. Presidential candidates have until March 17 to formally declare their bids. If Fillon is charged after that date, and keeps his word by quitting, then the conservatives would find themselves in the extraordinary situation of having no candidate in an election that was theirs to lose.

“Under French law it is not illegal for MPs to employ family members as assistants, provided they actually do the work.
http://en.rfi.fr/france/20170131-new-fake-job-revelations-rock-fillons-presidential-bid

======
marine le pen vs Emmanuel Macron the ” energetic outsider”

#118 Roial1 on 02.06.17 at 1:14 pm

#97 waltermittywest on 02.06.17 at 8:15 am

Golf where what time, ski where what time, fish where what time. Provide all times such as commuting, and logistical info on transporting the sports equip., and costs for green fees, lift tickets, fishing permits, etc.
===================================

1. Mulligans 12.30 pm. (membership)
2. Mount Washington 1/2 day (super senior=FREE)early morning till 11.30 (28 minutes from my driveway to parking)(roof box for gear)
3. Time from ski to golf with change at home 1 hour. (10 min. to Golf coarse)
4. 9 holes 2hours. (beer) then out to best friend’s boat for rest of day. (only two salmon in January. too cold and many windy days)
Oh, and just to rub it in, my wife is a gourmet cook from Europe.

Eat your heart out .

I believe you can verify all of the above as there are several other blog dogs here who live in the Comox valley on Vancouver Island. (AKA Lotus Land) LOL!

#119 IHCTD9 on 02.06.17 at 1:43 pm

#79 Renter on 02.05.17 at 11:59 pm
________________________

You are WINNING! :)

#120 TurnerNation on 02.06.17 at 1:44 pm

See y’all at Gold $1250. The looserish asset for losers. Traders excepted.

#121 WaitingInVan on 02.06.17 at 1:55 pm

This is my favourite at the moment in Van. You can buy a duplex for just over a million:

https://www.realtor.ca/Residential/Single-Family/17610917/5408-MAIN-STREET-Vancouver-British-Columbia-V5W2R9#v=d

Or you can rent the same place for $2500 a month:

https://vancouver.craigslist.ca/van/apa/5953884925.html

To get the mortgage payment down $2500 a month, you need to put down $470,000! That doesn’t include strata fees, loss of investment income from down payment and maintenance. If you include all that, I think you would be down about $3000 a month buying. We have a long way to go before the maths makes sense for me!

#122 For those about to flop... on 02.06.17 at 2:23 pm

I will share this case study that I have seen a lot of in Richmond b.c

Purchased date and price of a condo.

March 2014 627k

Dec. 2014 650k

October 2015 673k

Dec 2016 …sold…uncertain of sale price,but we’re asking 728k

So as you can see by these numbers,even though it was flipped three times ,no real money was made with a couple only moving up in the 3.5 % range without adding in costs.

The developers are the big winners…

M42BC

https://evaluebc.bcassessment.ca/Property.aspx?_oa=RDAwMDBOQjRTQg==

#123 Kevin's Fanzone on 02.06.17 at 2:34 pm

DELETED

#124 bill on 02.06.17 at 2:36 pm

#97 waltermittywest on 02.06.17 at 8:15 am
not a problem at all to get in a a day of riding dirt bikes and going skiing that night on grouse.or heading up to whistler for more of the same.
in my long ago youth these activities along with dining out and drinking was how I spent my years between say 25 and 40 or so…

#125 Fed-up on 02.06.17 at 2:38 pm

#127 For those about to flop… on 02.06.17 at 2:23 pm

I will share this case study that I have seen a lot of in Richmond b.c

Purchased date and price of a condo.

March 2014 627k

Dec. 2014 650k

October 2015 673k

Dec 2016 …sold…uncertain of sale price,but we’re asking 728k

So as you can see by these numbers,even though it was flipped three times ,no real money was made with a couple only moving up in the 3.5 % range without adding in costs.

The developers are the big winners…

M42BC

https://evaluebc.bcassessment.ca/Property.aspx?_oa=RDAwMDBOQjRTQg==
———————————————————————-

And side liners big losers so far.

#126 jess on 02.06.17 at 2:51 pm

is this why putin banned gambling?
hacked slot machines
https://www.wired.com/2017/02/russians-engineer-brilliant-slot-machine-cheat-casinos-no-fix/

#127 Fed-up on 02.06.17 at 2:51 pm

I think both of these arguments have merit. I believe there are many legal ways of transferring large amounts of capital into Canada from foreign countries, and it is still happening and having a big impact on prices. Although that is difficult to quantify, I would think it would be possible to quantify at least the percentages of sales that require local financing (often aka local fools). I would be interested in stats for that in Vancouver and Toronto.

Who cares? The impact on pricing is obviously negligible. Worry about things that actually matter. — Garth

———————————————————————

Negligible?

Last week you said it takes just one moron to over-pay in a given neighborhood and it sets a new level of insanity for every other home in the area.

Foreign or local. No difference. Idiots are idiots. — Garth

Funny how a foreign buyer can’t do that.

#128 Smoking Man on 02.06.17 at 2:51 pm

The left losing their minds over Patriots win.
Look at this tweet.
Liberalism is a mental disorder.

Elizabeth® @MissLizzyNJ
The winner should be determined by who has more fans, not more points.
Winning is racist and Tom Brady is a fascist. #NotMySuperBowlChamps

#129 Ace Goodheart on 02.06.17 at 2:56 pm

Investing is like shopping. You look for high quality products, on sale.

Why people cannot figure this out is beyond me.

When I go to a gas station, I find people lined up across the street, to save like 2 cents per litre, on a purchase of 60 litres of fuel. That is a dollar twenty.

This is the normal way of shopping, look for deals, good prices, high quality stuff on sale. Never pay full price.

However, when we are talking houses, stocks, bonds, investment products, everyone wants to buy at the top of the market, and sell when things are cheap. Why is it that normal, sane people, who understand bargains and how to get a good deal, cannot see this?

There are sales right now. Fire sales. Assets being dumped, that are worth more than they are selling for. No one is buying.

Everyone wants the expensive stuff….

#130 InvestorsFriend on 02.06.17 at 3:02 pm

For those about to flop said:

So as you can see by these numbers,even though it was flipped three times ,no real money was made with a couple only moving up in the 3.5 % range without adding in costs.

The developers are the big winners…

******************************************
So, the company that actually added value by combining land, labour and materials to produce places to live are the big winners while those who merely flip property did not win. This is surely a the way it should be.

#131 For those about to flop... on 02.06.17 at 3:02 pm

Pink Snow falling in Coquitlam.

These guys got carried away by paying 800k for a townhouse in Coquitlam last year and are now fighting to get their money back.

If you click on the other sold properties nearby you can see there was a lot of Crealievers in this development…

M42BC

80-1430 Dayton Street, Coquitlam

Jan 12:$875,000
Feb 5: $865,000
Change: – 10000.00 -1%

https://evaluebc.bcassessment.ca/property.aspx?_oa=RDAwMDBaUUNZTQ==

#132 MouldyinYVR on 02.06.17 at 3:18 pm

https://vreaa.wordpress.com/2010/09/11/five-charts-predicting-future-vancouver-housing-prices-with-the-aid-of-technical-analysis/

Fun charts from the distant past…….

#133 For those about to flop... on 02.06.17 at 3:22 pm

Pink Snow falling in Richmond.

These guys are probably in bigger trouble than the last lot I featured.

At least the people in Coquitlam have a relatively new product to sell.

These guys spent 860k on a 40 year old duplex at the peak last June.

For those wondering what a Crealiever is ,it is someone who believes what the Canadian Real Estate Association tells them…

M42BC

10691 Seaward Court, Richmond

Oct 20:$1,100,000
Feb 5: $988,000
Change: – 112000.00 -10%

https://evaluebc.bcassessment.ca/Property.aspx?_oa=QTAwMDA1WDJNVg==

#134 For those about to flop... on 02.06.17 at 3:51 pm

pm
For those about to flop said:

So as you can see by these numbers,even though it was flipped three times ,no real money was made with a couple only moving up in the 3.5 % range without adding in costs.

The developers are the big winners…

******************************************
So, the company that actually added value by combining land, labour and materials to produce places to live are the big winners while those who merely flip property did not win. This is surely a the way it should be.

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

Hey Shawn, I guess I should have also said the realtors are doing o.k on this one as well.

Just for moving the Rubix cube around…

M42BC

#135 KATA on 02.06.17 at 4:14 pm

After 15 years of predicting a bubble even a 30% drop in price is not a burst of the bubble! house price went to far high. Few will be affected.

#136 conan on 02.06.17 at 4:28 pm

Based on moxie alone, this is the next leader of the Conservative Party.

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

#137 Rainclouds on 02.06.17 at 4:45 pm

#123 Joe “Many of the homes are being bought with intent to enter the rentals market taking advantage of the low inventory,not all multi million dollar homes.
Properties being bought up by large corporations with foreign interests.”

Corporations are now in the business of subsidizing half the rent and potentially taking huge losses in a declining price/volume RE market?

Perhaps “your friend” can provide data to back this up?

#138 Reply to #134 on 02.06.17 at 5:04 pm

“Long ago, Ben Graham taught me that ‘Price is what you pay; value is what you get.’ Whether we’re talking about socks or stocks, I like buying quality merchandise when it is marked down.” – Warren Buffett

#139 Steven H on 02.06.17 at 8:22 pm

Joe2.0 on 02.06.17 at 1:20 pm
I don’t think my RE friend is lying regarding the foreign money entering the market covertly considering he is on the front line.
He also said there have been hedge funds set up focusing on Vancouvers RE.
He did mention that the biggest decline in clientele is showing up amongst the locals(generic term) who he says are either priced out, over extended, or given up.
So that would explain the numbers.
——————————————————–

You sound like a realtor trying to hype up the market with claims of lots of phantom purchasers out there buying everything up. Maybe your RE friend is actually yourself?
The numbers do not support your wild claims.