The journey

A new condo development goes on sale in the Vancouver burbs Saturday morning. People started lining up outside Wednesday at 9 am. By opening bell, there should be about 500 buyers for 306 units. All of them are expected to be Asian.

The obsession with real estate evident in Asian culture is having serious repercussions in places where it’s concentrated. That includes BC’s Richmond and (lately) West Van, and towns like Richmond Hill, Unionville and Markham in the GTA. HAM (hot Asian money) is largely blamed for 21% of all sales in Vancouver last month topping $1 million, and an onslaught of buyers pushing new housing prices up in Scarborough.

This has resulted in average prices jumping beyond the means of 95% of working families. Now the average cost of a detached home in Vancouver is $890,000 – 11 times the average household income – and in Toronto’s 416, a SFH averages $775,000, or eight times income. House pumpers say income ratios are now irrelevant, since Canada is in the crosshairs for ‘international investors’ – code for ‘Chinese.’

You need only read this blog for a day or two to see the social impact. What people perceive as the destruction of affordability at the hands of mainland Chinese has resulted in racism, stereotyping and fear. Maybe justified. Maybe not.

Have the Chinese screwed up housing? Apparently nobody has any good stats on the nationality of buyers in either Toronto or the Lower Mainland. But what’s obvious is the glee with which the Canadian real estate community has embraced the Asian invasion – using this as a giant and welcome marketing tool. Locals are told to buy now or be priced out forever, and to snap up properties at inflated, insane, nosebleed valuations, because there’s a foreign guy in a rented Mercedes careening closer.

That this will end in heartache and bitterness is self-evident. But what will be the damage when that occurs?

Apparently the feds are finally interested. Now that houses are beyond the reach of citizens.

Word is the Office of the Superintendent of Financial Institutions (OFSI), the dudes who worry about the regulation, solvency and integrity of our banking system, are now beavering away trying to quantify the influence of HAM. The reason is obvious. Every thinking person (which apparently excludes much of Vancouver) knows this irrational, culturally-fired mania will end. And the more influence Asian money has on real estate lending now, the greater the crunch when it dries up.

Of course, all you have to do it flip on Global BC or CITY-TV in Toronto to understand that prices are rising not just because of Asian buyers, but the perception of Asian money. The lunatic idea that house prices have no ceiling has actually been absorbed by both media and legions of buyers. And as values jump, so does mortgage debt – since nobody you know has received a pay raise lately.

That’s what has OFSI’s panties in a knot. Here’s what one of the regulators told the Financial Post: “The housing market including real estate linked lending activities is among a set of emerging issues, risks and markets across the Canadian financial system. We do this so that we can better understand the risks and impacts these may pose on federally regulated financial institutions.”

Amen. Bring it on.

Now, a final word on the scariest potential outcome of the HAM tsunami (which is what OFSI really fears). It’s not ever-higher prices and unaffordable houses we need to worry about, but what happens when this mess unwinds. If it’s true (and it seems to be) that Asian buyers are moving in a self-reinforcing herd, collectively believing they can make money by buying any shack in their path, what happens when they decide it’s time to sell?

As one of my Van real estate insiders points out, “if you have a market driven by one group of people on one side, and if that group decides to switch sides (i.e. the Chinese become sellers), then who can buy?  Nobody. When the tide turns – people will not know what hit them.”

Prices would tumble, of course, perhaps even cascade lower. The value of all homes in an urban market would be affected, peeling away equity. But mortgage debt would remain. The result: cheaper houses, underwater owners, negative equity and real estate which turns cold, illiquid and unsalable in a matter of months, if not weeks. Hard to imagine that power of sales and financial ruin would not follow for many.

So, worry not about the Asians. Let them buy. Just don’t you.

293 comments ↓

#1 Anna on 06.03.11 at 9:10 pm

You are racist.

You can’t read. — Garth

#2 Siddelly on 06.03.11 at 9:16 pm

For anyone cashing out of Point Grey, this may be your last golden opportunity at these inflated prices. Take action! But get it all in writing and demand a large (100,000) non-refundable deposit. You will look back in 5 years and realize that you truly hit the jackpot.

#3 Kat on 06.03.11 at 9:18 pm

Amen…your are awesome Garth!

….First! (ha)

#4 Mr. Lee on 06.03.11 at 9:18 pm

Many of my country men are speculators, and some our down right foolish gamblers. Notwithstanding the price of an item is determined by what one is willing to spend on said item, that being said the value of that same item may be at odds with its price. That realization often results in a net loss for one who was willing to pay the price for the item.

#5 Kat on 06.03.11 at 9:20 pm

sorry…spelling error “you” are awesome Garth!

#6 BBC on 06.03.11 at 9:21 pm

Funny thing, this herd sells to each other and the locals sit on the sidelines and watch…. How do you say ‘Greater Fool’ in chinese?

#7 Rafa on 06.03.11 at 9:22 pm

Finally first??

#8 THE SMOKING MAN STIKES AGING on 06.03.11 at 9:24 pm

Bubble me this Bubble me that, the cat…a darn….. forgot the poem, it’s Friday and I AM WASTED AGAIN.

OK kids lesson 101 as I predicted fixed rate mortgage rates in free fall, Cha Ching,,,,,, Over night rate going no where Carneys’s testies are in a knot…….

O what is this to real estate on a roll in the GTA

http://www.theglobeandmail.com/report-on-business/toronto-real-estate-board-weighs-enhanced-online-listings/article2046850/

Ya see Gartho is a smart man so are all of you……. But the mob or masses or what ever else you want to call the over schooled idiots are going to buy real estate like there is no tomorrow.

Play the player and harvest your profit………………..

#9 TaxHaven on 06.03.11 at 9:25 pm

“…collectively believing they can make money by buying any shack…”

Do you have any stats on this? ALL Asian-origin buyers are planning this? Or just the mortgage-holding, second-generation young families brought up locally?

The high-end Asian buyer wants to OWN here, has no intention of selling and doesn’t need a Canadian mortgage.

Yes, when this unwinds it will be messy. But only for those with mortgages.

Not the point. It’s everyone (not just HAM) who bought in (almost all with mortgages) who will be hit. — Garth

#10 T.O. Bubble Boy on 06.03.11 at 9:26 pm

If you need more proof of the HAM takeover, realtors are now selling “Asian Inspired Residences” in Vancouver:

http://priceypads.com/23747/asian-inspired-residence-2798000/

(for $2.798M, right in the HAM sweetspot of $2M-$3M)

#11 JSS on 06.03.11 at 9:27 pm

What an awesome article!

#12 BB on 06.03.11 at 9:28 pm

So………..BPOE’s been right all along.

#13 chris on 06.03.11 at 9:29 pm

I live in Vancouver and my friends and relatives who have bought recently (within the last two years) at these unbelievable prices honestly believe that there are thousands of Chinese investors lined up to get into Canada and especially Vancouver (and maybe they are right), so they wanted to get in before being priced out forever. My sister-in-law keeps asking me when I am going to buy because her house has appreciated 30% in the last year. She lives in an area now targeted by mainland Chinese investors. My “bearish” comments fall on deaf ears. My friends show me MLS listings of houses in their neighbourhoods that are now listed at hundreds of thousands more than they paid a year or two ago. It’s seriously delusional here. It’s hard for me to argue with their logic since they have been right for years and I have been wrong for as many. I don’t see Vancouver prices slowing down until the property bubble pops in China…

#14 Heart of the World on 06.03.11 at 9:30 pm

Another good post. Thanks for this.

It amazes me that as a part of the ‘this time it is different’ narrative that always attends bubbles, we now have the narrative that ‘China is different’ and will always be an economy in the ascent. We know that (post 2008) the anarchy of capitalism’s ‘invisible hand’ didn’t work out so well, after 250 years of free market economies: so now we think that some hybridized version of central planning and free markets won’t implode somewhere along the line? Seems to me that such an ‘ad hoc’ system is particularly perilous.

In the absence of yield for money invested post QE and QE 2 (and QE 3?) hot money recycled from the US Fed printing presses has been inflating currencies and blowing bubbles throughout the ’emerging economies’ (read China and India, and others). So some of this real estate mania in my view is blowback across the Pacific Ocean from Fed policies in Washington. When she blows — watch out!

#15 Signpost in the bushes on 06.03.11 at 9:32 pm

IS THERE ANY DATA on the effects of a two tier price structure or two tier taxation rate on real estate sales to Nationals versus non-Nationals from countries which have implemented such a program? In 1989 there was a two tier price structure for real estate in Bermuda (and perhaps this is still the case?); non-Nationals were charged twice the price charged to Nationals.

If this were to be implemented in Canada, would this not have a cooling effect on prices?

#16 disciple on 06.03.11 at 9:33 pm

Why would HAM be buying into a falling market? Doesn’t make sense.

Neither does your question. — Garth

#17 squidly77 on 06.03.11 at 9:35 pm

The Canadian real estate industry which includes, realtors, mortgage brokers and unfortunately the MSM are doing a great dis-service to Canadians, their behaviour, greed and the way that they pump and spin month end reports is shameful.

They will become what the NAR has become, unliked, untrustworthy and unwanted. Simply put, they will become a pest to society and a nuisance to all.

#18 I. Muvrini on 06.03.11 at 9:35 pm

Regarde maman, je suis le premier!

#19 BPOE on 06.03.11 at 9:37 pm

This is what dumb dumbs like Aussie roy and the american and junius just don’t get.1 billion plus potential customers want to buy Vancouver. Any selling by Asians or any other group for that matter will have ZERO affect. International investors have had years and years to sell. But they don’t? You want to know why? It’s called VALUE folks. When over a billion people want what you got then your sitting pretty. Anyone check out the new Quinet development in Richmond, lineups around the block. Funny how just recently on this blog it was stated Richmond was slipping out of favour. Check out the lineups for new developments and the TRUTH is Richmond is HOT HOT HOT. But I guess Canadians don’t mind being second class citizens in their own Country renting. The left wing Conservative Government is making housing a WINNING situation for all who BUY. Vancouver is WINNING everyday and in everyway.

#20 Debtisforever on 06.03.11 at 9:37 pm

Yes but, are things slowing in the Vancouver new condo market? I live near this development http://www.polyhomes.com/newwater and I do not think that this one has sold out. In fact, it went on sale a week ago and when I walked by the sales center on Wednesday afternoon (a good 5 days later), they had music blaring on loudspeakers outside, presumably to drown out the sound of crickets. There was no one there except 5 sales people inside, and the parking lot was empty. No flashy sales signs posted outside saying “SOLD OUT!!!” or “95% SOLD BUY NOW!” Odd. There are also a couple developments in New West I know haven’t sold out either. Times are changing?

#21 TurnerNation on 06.03.11 at 9:37 pm

Ah by the picture I see you’ve flown Air Canada.

Got Bonds??

CME Saves The Best For Friday 6 PM Last, Lowers Treasury Bond Margins

As of a few minutes ago, the initial and outright margins for 10Y and 30 Y Treasury Bond Futures, 10 Year On The Runs, 7 Year Interest Rate Swaps and LT US Treasury Bond Futures were all lowered by up to 19%

http://www.zerohedge.com/article/cme-saves-best-friday-6-pm-last-lowers-treasury-bond-margins

#22 Mr Buyer on 06.03.11 at 9:39 pm

I do not like the rising wave of prejudice I am seeing. Blaming Asians for this housing bubble is laughable. Houses have doubled in price all over the country. The supply demand relationships have been corrupted by the supply of money. Presently the setting of a house price is governed only by the daring of the seller and the willingness of the buyer to assume debt. The ability to obtain the financing is almost a given (or has been recently). Some entities will benefit from this in the long run but not the masses. The same thing happened with stocks that lead to the start of the depression.

#23 Desi on 06.03.11 at 9:41 pm

The house which was selling for 400K in 2007 is now selling for 600K so even if prices correct 50% it would only come down to 2007 levels so, even in best case scenario, people who have been waiting for housing correction since 2007 would not be able to buy it cheap. Had they bought in 2007, they would have lived in their own houses and had also benefited from cheap mortgage rate. History not only respect people who were always right but also respect those who admitted that they were wrong. There is nothing wrong in admitting Garth that you couldn’t recognized the HAM factor while you were predicting housing crash and you couldn’t put your figure on what would be the new normalize house price would would be…

#24 squidly77 on 06.03.11 at 9:49 pm

I do not like the rising wave of prejudice I am seeing. Blaming Asians for this housing bubble is laughable.

Then point your finger at the realtors, they’re the ones blaming the Chinese.

#25 TaxHaven on 06.03.11 at 9:52 pm

@T.O.Bubbleboy, that West Vancouver home is a BARGAIN when you consider what that price currently gets you in Shanghai or Hong kong. Especially for those who won’t need to borrow.

#26 Frank Rizzo on 06.03.11 at 10:00 pm

First?

#27 Cato on 06.03.11 at 10:05 pm

Many of the elite in China are now seeking to escape the mess they played a big part in creating. Canadians rail against human rights violations & environmental destruction around the globe but are careful to tip toe around china. Not a peep about the money washing into the country that was earned from just these misdeeds.

For each dollar earned a Canadian is at a significant disadvantage to their Chinese counterpart due to taxation. The Canadian is labouring under an oppressive tax regime to provide the society many of the upper class in China lust after but are unwilling to support.

So we welcome this capital with open arms and seem to treat a dollar as a dollar regardless how it was earned. This is blood money, and we deserve the repercussions that are surely coming for accepting it. The society we enjoy today was due to the sacrifice of those who came before. Its not for sale to the highest bidder by those with blood on their hands.

#28 The InvestorsFriend (Shawn Allen) on 06.03.11 at 10:08 pm

WHERE ARE THE DEAD BEATS? (There are few dead beats as long as they have lines of credit to hide their situation)

I sent the following to Candian Bankers Association last night.

TransUnion reports:

The LOC delinquency rate (the ratio of LOC accounts 90 days or more delinquent) is the lowest of any product category at 0.21 percent.

Let’s think about why. So let’s see if I am short the payment for my car loan or mortgage I have to find the money someplace.

But what if I don’t have the cash to pay my minimum payment on the old line of credit? That’s right, I can simply withdraw the money from the line of credit and make the payment and all is good.

I actually tried this as an experiment with both HSBC and TD bank. I walked up a bank machine withdrew cash and put it in an envelope and made the payment with the exact same cash amount and lo and behold the computers were happy and said I was paid up on time. Hilarious. I did this two months in a row. Works like a charm.

And while I am at it I could easily take money from the line of credit and make the mortgage payment. Ain’t it sweet? No one need never have a problem repaying debt as long as the they can keep borrowing new money to make the payments. Just ask the United states of America for example.

Now what are the implications? Well one implication is that delinquency figures of today cannot be compared to those of 20 years when few of us had lines of credit. 20 years ago if you lost your job you were soon late on payments. Not so today, many people can merrily keep borrowing on the line of credit without even asking the bank for permission and the bank is none the wiser that you are making all your payments with borrowed money.

Canadian banks had better pray we don’t get a major house price crash here or major recession. This charade they have set up can only last so long. (Ask Greece).

#29 LJ on 06.03.11 at 10:10 pm

Vancouver is not going to have a “nice long slow decline,” as Garth has predicted recently for the Canadian markets. It is going to POP so loud that the world will hear. Probably some time after they get the cup. Then all those who bought properties recently can go cry in it.

#30 cognizant on 06.03.11 at 10:11 pm

I don’t care if the entire country of China is hell bent on moving here, there will still be an eventual correction. At one point even the HAM will decide that Vancouver is unaffordable and seek greener pastures else where. That’s when the trouble begins, when the whole herd of momentum investors all exit at the same time.

This is going to end so badly, with destroyed communities, ruined lives, and many tears.

#31 JohnnyBGood on 06.03.11 at 10:12 pm

At what point does the Canadian residential RE market become ripe for an even BIGGER collapse than that which occurred (and continues) in the US?

Americans now eat Spam and we have HAM.

#32 T.O. Bubble Boy on 06.03.11 at 10:13 pm

Replace the word “watermelon” with “Vancouver Real Estate”:

Watermelon Woes Continue With Price Drop

For some, there’s simply no hope of profit. There are markets where as many as 80 to 90 percent of watermelon vendors have shut up shop.

#33 P F Murphy on 06.03.11 at 10:18 pm

So what is happening here is not HAM, but HAD (Hot Asian Debt). Since the Chinese banks were not into loaning money, people used to have to save it up and buy their real estate money down. I wonder how hard it will be for Canadian banks to chase those debtors into China to recover the funds. Oh, but I forgot. That’s what CMHC and Canadian taxpayers are all about

#34 wes_coast on 06.03.11 at 10:18 pm

Garth, your last statement is a homerun! ‘Let them buy – Just don’t you’. There is no need for any of us to be racist because of Asian money. We regulate our economy and if we open the door to foreign investment we can’t bitch that foreigners are investing. This ‘HAM’ will be the catalyst for a US style crash that we – the vultures – so un-patiently wait for. Garth won’t say it but I will. Places like Vancouver ARE different. Different in how they will crash while less bubbly markets may just moderate lower and slower. Sure Vancouver won’t be cheaper than Regina but in percentage terms the drop to the long run average here is going to be achieved with a higher velocity. The higher up this ponzi scheme goes the better chance we’ll overshoot on the way down. For those of us that play this smart – we will praise the greater fools from Asian that made the bubble pop. Stow the racism and play this to your advantage. The HAM have an Ocean of ignorance between home and Vancouver that prompts their ill thought out ‘investment’ but for those Canadians that are buying a house today out of fear of being priced out – what’s your excuse? 2nd biggest country in the world with less population than the CITY of Mexico. Ya. We’re running out of space. Panic! Hurry! The Asians are coming!!

#35 Carp on 06.03.11 at 10:20 pm

I’ve given up with my Vancouver friends (I have plenty) … they are enjoying the cool-aid. Some claim they have made more money in their life time with real-estate than they have working. I.E they did all the write moves and now have a $1M real-estate – still plenty of debt mind you and one asset. I hope them all well. Me, on my rental hobby farm, can see new legumes growing and my first grapes on the vine. And I have no stress with my cash in good hands.

#36 Bill Gable on 06.03.11 at 10:20 pm

Don’t worry – the HAM will end when the realization hits that Shanghai and most of China is an RE ponzi scheme.

#37 Mr Buyer on 06.03.11 at 10:21 pm

I was not pointing my finger. I was stating what I think is obvious. I do not think Mr Turner is racist or that he assumed the position of a racist. I am under the impression he was commenting on the state of affairs.Iif the government tries to make the Chinese scapegoats for this bubble we should clearly respond that the supply of money is responsible (the banks).

#38 Mikey the Realtor on 06.03.11 at 10:34 pm

#23 Desi
“The house which was selling for 400K in 2007 is now selling for 600K so even if prices correct 50% it would only come down to 2007 levels”

You’re hired!!! with math like that I can see you becoming my top agent, when can you start?

#39 cognizant on 06.03.11 at 10:37 pm

Desi on 06.03.11 at 9:41 pm wrote:
“The house which was selling for 400K in 2007 is now selling for 600K so even if prices correct 50% it would only come down to 2007 levels”

Check your math.

#40 Ralph Cramdown on 06.03.11 at 10:37 pm

Everybody just assumes that these HAMs are wealthy capitalists-with-Chinese-characteristics, but it isn’t always true. BC is fast tracking immigrants who want to be fish plant workers, front desk clerks and long haul truckers, and bankers will lend, lend, lend.

But seriously, the OSFI could find that: a) foreign investors have been putting down 5-20% and, due to CMHC insurance, the banks aren’t at risk, or b) they’ve been paying cash and don’t show up in bank loan portfolios at all. Either way, “Move along, nothing to see here.”

#41 Jed on 06.03.11 at 10:41 pm

Over your heads with the Chinese stuff
What’s this crap about being anti-Chinese? We are talking about market behaviour (euphoria, mania; followed by depression) which Chinese home buyers are engaging in, not negative comment about a people. Canadians themselves are buying into the bubble and will have consequences just as the Americans, Irish, Spanish, Australians, etc. do. This has nothing to do with disliking a people because of their culture. Stupidity is a common characteristic across cultural/racial boundaries, just as intelligence is (which it seems some posters do not have).

#42 EJ on 06.03.11 at 10:42 pm

A government that cared about its people would never have allowed something like this to happen.

When sales drop off and prices start plummeting, then you’ll start seeing the reports in the news about all the foreign money laundering that’s been going through the Vancouver housing market. Government, CMHC, banks, salesmen, all complicit in the act.

#43 wetcoaster on 06.03.11 at 10:45 pm

Reality sucks to those who think the Asians will not influence the market on the way down. They got in with dirty commie money so they care not if they have to sell at 30% loss when they got the money for being connected to the government. It’s the cost of escaping from communism.

I do get sick of these people who think the Chinese are such wise and intellegent investors. I recall the local immigrant Asian who ran the corner store when I was a kid who would screw you for penny candy if he could. They care not about us, or a hospice for OUR and THEIR dying relatives, just about what is in their wallet. These are legitimate concerns and realities Garth expresses, not racism, get over it or hit the road.

#44 Peter Pan on 06.03.11 at 10:47 pm

I have a couple of friends who moved here from Taiwan about 15 years ago and they own and live in Point Grey (or very close) and they’ve told me they’re tired of the Mainland Chinese moving in.

#45 this is wonderland on 06.03.11 at 10:54 pm

#1 Anna

There have been times when the tone of Garths posts of been questionable, but please explain how this post was racist.

#46 Whitby on 06.03.11 at 10:54 pm

My local branch teller gave me some insight today as to how bad things are in Whitby Ontario. They see more and more people coming into the branch with jars of coins as they are broke, customer after customer is swapping money back and forth between lines or credit and credit cards to pay bills, and literly no savings for the average Joe. Also the bank manager I deal with keeps telling me that more and more the banks are not agreeing with home valutions. +3 for Garth. Mortgage rates fell accross the big banks today -1 Garth.

#47 honest weights on 06.03.11 at 10:57 pm

I wouldn’t blame the Asians for the bubble. I would blame the government who’s allowing them to buy houses as stock and not the houses that they are. The locals are getting shafted beyond measure unless, of course, you owned property at the right time, ride the wave, sell and move to a cheaper place/area. How can Canadians ever get ahead living under such oppressive tax conditions with a government allowing Rich Asians, whose government allows them to keep most of their money, to come in and buy Canadian property by the score.
Money being used for ‘self preservation’ sucks life out of everybody.

#48 sluggo on 06.03.11 at 11:01 pm

“It’s hard for me to argue with their logic since they have been right for years and I have been wrong for as many.”

BS, 95% of those people don’t understand it. The RE market topped in the spring of 2008 as it should have. In an attempt to pull this country from the brink during the ABCP debacle, the financial dickheads engineering the recovery underestimated the capital flow backed by CMHC MBS and failed to spread the cash around causing a major misallocation of capital and seeing as we’re not alone on this planet in the zirp vacuum, every other country has done the same and now leverage abuse is at extremes. Risk on the retail level has not been hedged and when the post credit bubble contraction takes hold, it will be a bitch.

#49 BPOE on 06.03.11 at 11:06 pm

Again and again I am proven 100% correct with FACTUAL info. Folks, the Banks just lowered mortgage rates…..AGAIN!
OTTAWA — Most of Canada’s banks lowered mortgage rates for the second time in a week on Friday, by another 0.10 per cent in most cases.
Royal Bank of Canada started off the announcements on Friday, soon followed by TD Canada Trust. The smaller Laurentian Bank and Desjardins Group joined the parade late in the afternoon, before Bank of Nova Scotia and Bank of Montreal threw in at the end of the day.
right folks twice in the last few weeks. Want to know why? Because everyone knows with the exception of the naysayers on this blog that interest rates aren’t going up any significant amount …EVER. Folks check back in here at Christmas time and see if the rates are higher. Remember the higher interest rates stated coming this summer? Isn’t happening. Remember Junius stating interest rates upward in Fall? Ain’t happening. And who could forget stupid Shiller stating in 2006 that Vancouver is the bubbliest City in the World before it started its ascent. Remember the american, that poor uneducated soul in polluted backwater Seattle stating housing to fall in Vancouver by 40%. Wow folks Vancouver never looked so good. When the bashers come online you know you have something special.

#50 Mister Obvious on 06.03.11 at 11:10 pm

I am so grateful to be alive and living in Vancouver in these tumultuous but oh-so-interesting times. Each day brings a fresh loaf real estate anxiety. Or shall I say, it would, if I was a player. But I’m merely a spectator way up in the stands with my binoculars and a nice hot coffee. I expect a good show.

#51 Mean Gene on 06.03.11 at 11:12 pm

If the OFSI determines that H.A.M. (horny asian money) is impacting housing affordability, what could they do, not really their functional authority.

They may have to pass their concerns to the Federal Finance department to dream up a solution.

Tax the crap out of capital gains on residential real estate held as a investment, with citizens allowed to claim back the excess on their income tax returns??

#52 BPOE on 06.03.11 at 11:17 pm

Never bet against Vancouver NEVER. Your friends story prove a strong harsh lesson. If you chose a diversified portfolio over Vancouver you lost BIG TIME. Still waiting for poeple to post how renting and investing beat out being a homeowner in Vancouver (que cricket sounds)
chris on 06.03.11 at 9:29 pm
I live in Vancouver and my friends and relatives who have bought recently (within the last two years) at these unbelievable prices honestly believe that there are thousands of Chinese investors lined up to get into Canada and especially Vancouver (and maybe they are right), so they wanted to get in before being priced out forever. My sister-in-law keeps asking me when I am going to buy because her house has appreciated 30% in the last year. She lives in an area now targeted by mainland Chinese investors. My “bearish” comments fall on deaf ears. My friends show me MLS listings of houses in their neighbourhoods that are now listed at hundreds of thousands more than they paid a year or two ago. It’s seriously delusional here. It’s hard for me to argue with their logic since they have been right for years and I have been wrong for as many. I don’t see Vancouver prices slowing down until the property bubble pops in China…
.

#53 2 can play this game on 06.03.11 at 11:18 pm

today I heard on the radio if you owed $10k on credit card you might have a chance to get that amount reduce. courtesy by the bank/govt
of course the chinese won’t let the west out do them. they also doing some funny number in the background
there’s a reason why these chinese buyers have unlimited supply of money…and why not? they have $1 trillion to spend!! Anybody holding USD must be very rich

http://www.theglobeandmail.com/report-on-business/international-news/global-exchange/china-to-clean-up-billions-worth-of-local-debt/article2040943/

#54 BoomerBoy on 06.03.11 at 11:19 pm

RBC is again leading the Big 6 banks with a 10 basis point rate cut on all fixed-rate mortgage terms.

This is the third such rate reduction in the last 16 days. Some lenders (Prospera Credit Union) are offering 3.55% for a 5-year fixed rate mortgage – wow!

P.S. The Asian angle is way overblown. I expected a higher standard from you Garth. Intonations of racism (intended or not) are most unbecoming.

#55 Anna on 06.03.11 at 11:20 pm

_________________________________
All of them are expected to be Asian.

HAM (hot Asian money)

‘international investors’ – code for ‘Chinese.’

mainland Chinese has resulted in racism, stereotyping and fear. Maybe justified. Maybe not.

Have the Chinese screwed up housing?

because there’s a yellow guy in a rented Mercedes careening closer.

So, worry not about the Asians. Let them buy. Just don’t you.
______________________________
I can read just fine.

Picking words out of sentences and context says more about you than anyone. — Garth

#56 smartalox on 06.03.11 at 11:26 pm

So has anyone actually studied the HAM phenomenon to determine the root causes? I know that Canada requires certain classes of potential immigrants to invest a certain amount here, for a certain amount of time. What’s the minimum investment? About $800,000 per adult, I think. So are all these investor buying companies, or setting up factories, creating high value employment opportunities for other Canadians? No, they’re buying stagnant, illiquid houses. I’ll bet that they’re not even doing the (should be) patented Garth Turner home equity harvest to build a diversified investment portfolio.

How long do investor class immigrants have to keep their money invested in this country, before they can cash out and call themselves Canadian? Two years? Five? That’s when the crash will happen.

I just hope none of these investors are leveraged back home: it sure would suck if falling Canadian real estate values decimated the value of their investments, when the time comes to pay it back.

#57 Nostradamus Le Mad Vlad on 06.03.11 at 11:29 pm


With China dumping 97% of its short-term US T-Bill holdings, as well as decreasing its monthly purchases of regular US T-Bills, empty cities in Mongolia and China, HAM fueling RE in the GTA, west and north Vancouver, there is no doubt that there is something strange happening in the world.

“. . . since Canada is in the crosshairs for ‘international investors’ – code for ‘Chinese.’ Have the Chinese screwed up housing?”

My better half (from China) told me many moons ago that very wealthy Chinese would pay cash, and live in north and west Vancouver only, but the present generation, who have been indoctrinated more in the western culture than Chinese, are not fabulously wealthy and thus, up to their eyeballs in debt, expecting their parents to bail them out when needed.

Maybe they will get lucky, but probably not.
*
Soros and Obama A Karl Marx Production. Destroying the US$. Further to #118 Fat Bastard on 06.03.11 at 5:18 pm (last post), you may find this interesting. US Treasury Look out for the BoC.

Barter Economy This screws govts. up worldwide. No GST – PST – HST. Dismembered What creditors of the US will do when their time comes. Bitcom Currency Up 200K% — electric currency. Black Eagle Trust Fund and 9-11. Someone made a whole lotta money! An excellent look at the way the west is going now — replacing full-time jobs with volunteers (unpaid). Lots of disconcerting behavior in the world; wonder if this has an effect on HAM here? China building 36 mln. low-cost homes by 2015. What are they expecting?

Calculation Error Whoops! We slightly miscalculated, but Ann Coulter, the fine American Rethuglokrat says, radiation is good for you! Plus Vitamin D protection. The Stockholm Syndrome Caused by a combination of fluoride and lithium in drinking water? Two items to avoid — Vaccines and antibiotics. Here too.

Free Energy Our future is here and now. Illegal Immigration? These will be the ones who vote Obama back in.

China is correct. The Stuxnet virus, created by the CIA and Mossad is likely the first of many to come. PET’s cradle-to-grave nanny state, from a Eurozone perspective.

#58 Utopia on 06.03.11 at 11:31 pm

OSFI is getting interested in the Vancouver housing bubble?

Wow.

OK, there is no way in hell that the Office of the Superintendent of Financial Institutions would be getting involved unless the banks themselves had expressed concerns or made complaints. No way.

They have more data than the rest of us. Maybe things are worse than even I thought and there are now legitimate concerns that Chinese buyers of bubble-priced Canadian real estate could actually destabilize our banking system…..Yikes.

I grew up in that part of the world. Perhaps I am just immunized against the ongoing Asian invasion and take it all for granted as it is just business as usual to me. This has been going on for many years already although not at these scary nose-bleed levels of investment.

If China does keep tightening credit though there is a real possibility that Asian investment could swamp Vancouver and much of the sought after BC locations like Whistler, Victoria, West Vancouver and the resort areas of the Easter Fraser Valley.

Capital flight out of China might just be a risk that accelerates the bubble to the stratosphere and right into a Tulip-style mania. I might just stop mocking the issue as a result of todays news.

Seriously…OSFI cares?…..Wow!

#59 reality guy on 06.03.11 at 11:34 pm

The fix is simple,

– Raise property taxes another 3 %

– You have to prove you live in the house and that your a canadian citizen ==> subtract 4%

– You can only live in one house. If you use it as a rental, then nothing.

This will weed out the speculators and the non canadians ruining our way of life….

#60 nonplused on 06.03.11 at 11:37 pm

A great article today Garth.

I like to play my chess 2 or 3 moves ahead, and today I have misgivings about another possible black swan.

First, to describe the situation at Fukushima as it is now understood:

Cores 1 & 2 are likely not in the pressure vessel anymore, and the containments are leaking via all the water they are pumping in (and have to pump in).

Core 3 is probably still in the pressure vessel but that is the only good news.

The stored spent fuel in #3’s cooling pool has been largely dispersed around the site from the explosion that sent so much material upward.

A lot of radiation continues to leak, and some estimates are that the release is already 10 times worse than Chernobyl, only it isn’t done yet.

At least 2 experts are saying that if the wind hadn’t been blowing out to sea, Japan would already be cut in half by a no-go zone.

There is still a good chance of a magnitude 8 aftershock, and typhoon season is just ahead.

So here is the “black swan”. What if the Japanese decide to get out of dodge? How does the economic growth story continue with one of the largest economies in the world in a death spiral?

And how in the heck are they going to clean up that mess?

What of the 18 reactors in the US with similar designs? Are they all ticking time bombs, waiting for an unforeseen totally foreseeable disaster?

Remember the blackout some years ago? How many nukes had SCRAMed and were running on diesel? How many could get more diesel if they were running low? What if the grid had stayed down a week?

Seems to me the we now know, and so do the bad guys, that all you have to do is take the grid down for a couple of weeks and the whole place will be a smouldering nuclear waste zone in a couple of months.

But at least at this point, we cannot get by without them, and we certainly can’t afford to decommission them.

Carl Sagan speculated more than once that maybe the reason space seems so devoid of other radio transmissions was that technologically advanced societies inevitably could not survive the age of nuclear warfare. But he didn’t speculate that maybe you can’t even survive nuclear power. Einstein seems to have, but I think he might have been more disillusioned with the type of reactors they were building (designed to make plutonium).

So the world ends not with a bang but a whimper, as forecasted. And the form of the end of the world: giant cockroaches instead of a “Stay-Puff” marshmallow man.

#61 Stevie Why ?? on 06.03.11 at 11:39 pm

in response to BPOE 19….. when Van falls into the Pacific may everyone EXCEPT YOU ….. have a lifeboat !!!

#62 Rich Renter on 06.03.11 at 11:39 pm

Are all these sales insured by CMHC or is the HAM arriving in briefcases financed by Chinese banks. It’s time the govt pulled the plug on CMHC IMO.

#63 disciple on 06.03.11 at 11:40 pm

#16 – disciple on 06.03.11 at 9:33 pm
Why would HAM be buying into a falling market? Doesn’t make sense.

Neither does your question. — Garth

Fair enough. Went overboard on the rum this evening, sorry. I don’t ask questions for which I don’t already have an answer. I guess HAM is just as delusional as the rest of us…but blaming HAM is interesting, I previously discounted this influence, but perhaps it is significant…I dunno…good night

#64 Basil Fawlty on 06.03.11 at 11:42 pm

The word on the street in Vancouver is that this is the number one international choice for rich people from China to live.
They want to get their money out and buying a house for a couple mill is no problem.
However, let’s put it in perspective QE to infinity is still in the cards and purchasing power continues to erode. One day relatively soon a million dollars won’t mean as much as it did.

#65 Ed on 06.03.11 at 11:43 pm

If all these asians are actually pulling massive amounts of cash out of Chinese banks to invest in Vancouver RE, why haven’t we heard of any runs on Chinese banks?

#66 Burnt Norton on 06.03.11 at 11:50 pm

#1 Anna on 06.03.11 at 9:10 pm

Thanks for succinctly illustrating that one cannot even enter into a discussion of this phenomenon without fear of being labelled as such.

Even if it were politically correct to restrict foreign ownership for the benefit of Canadian citizens, governments probably wouldn’t want to jeopardize the land transfer / property tax gravy train.

In the end, people will vote with their feet. A sterile, absent and self-serving populus may buy up places in so-called popular areas, but any true sense of community will dry up eventually without involvement and input from local residents.

It’s been happening in Vancouver for 30+ years, following the European exile / brain drain since the turn of the century. In the 80’s and 90’s it mainly changed Kerrisdale and Shaughnessy. Now it’s changing Dunbar and Point Grey. To recognize it does not make me racist. I actually don’t have a problem with it because I appreciate the benefits inherent in a globalized free-market. Community is here, just often not next door.

Vancouver is a fascinating city, partly because of the cultural diversity, but also because of our consequentially nebulous identity. An identity that factors into curiosities like the fickle Vancouver Canucks bandwagon and the fact that some dufus thought that it would be a great idea to drop a bunch of paper confetti strips onto the ice at GM Place the other night. Do ya think that would have happened in any other Canadian city?

#67 Stevie Why ?? on 06.03.11 at 11:52 pm

BPOE = Biggest Prick On Earth ( prick cud b ur finger …. cud b ur wazoooo….. OR ….. CUD B THE BUBBLE )

#68 604genX on 06.03.11 at 11:54 pm

For residents of the PRC (mainland Chinese), the other issue driving capital flight is the change of regime scheduled for 2012. Who knows if the new premier will institute capital restrictions. Therefore get your money out while you can….but where?

Plus this muddies predictions further:
http://www.businessinsider.com/china-to-bail-out-local-governments-2011-5

It wont end well, but it is difficult to see a quick end to this insanity.

#69 Ozy - TOO LATE to save CHMC folks! on 06.03.11 at 11:57 pm

Read the entire -scary- story here:
http://www.canada.com/story_print.html?id=c01f405f-5d93-44d4-8802-91913c1dbc76&sponsor=

#70 Mr. Reality on 06.03.11 at 11:59 pm

Sheeple

Denial – it is everywhere. Denial is a hot commodity. I love denial. When everyone around me is in denial….just like the summer of 2008…..I start shorting denial.

Right now is exactly like the summer of 2008 and we all know what happened in the fall of that year. This fall will be very interesting…..

Move your investments into a mix of low risk fixed income, cash, or short the crap out of the TSX, the S&P 500 and oil. Inverse ETF’s are a valuable investing tool in a diversified portfolio.

They are hiding the decline. The classic signs of a real estate bubble are rampant. Remember, foreign buyers are the last buyers in a bubble. Always have been always will be. History is repeating itself.

Mr. R.

#71 daystar on 06.04.11 at 12:03 am

This is without a doubt, one of your top hundred entries, Garth. Very impressed. You’ve captured the essence of what is happening.

I can’t help but add to what you’ve said here. In some ways, its a reminder of what you’ve already said in the past.

Firstly, real estate values in Vancouver and Toronto hav approached casino status, where housing has become a dot.com high flyer. Apparently, we need to be reminded of how dot.com’s ended. The selloff was so extreme and violent, so quick, that people lost 20% in a day, like nothing. Thats how it works only with real estate, sellers won’t get the chance to liquidate it in a day. A person buying at or near the peak of dot.com mania thought they were going to make a 50% gain in 2 weeks and 2 months later, after several adjustments to their sell orders, they were lucky if they walked away with half. The dummies here who talk up real estate as though fundamentals and math will never enter the equation are either on their way to bankrupcy, or they have absolutely no skin in the game, save the bad karma achieved should an even greater fool actually believe them. Its a bubble, and they always end badly.

Secondly, Chinese buyers for the most part, are not thieves but profited from real estate in China. We see posts of a city built for a million with only tens of thousands occupying the city. Did that city get built by stolen money too? Only if one considers profiting off of a huge real estate bubble in urban China, can one believe it to be so… and if thats the case, there are a good deal of thieves here in Canada as well and as some stupids are poorly educated, many real estate speculators, gambling with borrowed money, also happen to be white (or whatever else, borrowers with profit for motive know no bounds, save the shut ins, next in line to bear inbred children ’cause the rest of the world ain’t good enough for ’em).

Hey, a few quick words to the racists and bigots and stereo typing labellers out there, we know who we are… ever heard of this thing called “the wealth effect”? Ever wonder how mortgage debt has exploded by 45% to top over a trillion in this nation in a mere 5 years in Canada, how it came to be?

Ever been told a hundred times or more (for some reason, having not the smarts to have it sink in once), that our real estate bubble in Canada has been created by credit, not earnings, and it will, as has happened with real estate bubbles in the U.S., Japan, Britain, Spain, Portugal, Ireland, Iceland, now the Phillipines, Australia, France, most especially CHINA and here… end badly? No bubble inflates forever… no… not one.

Canada’s bubble, like the rest of the real estate bubbles created around the world were inflated through credit with the blessings of governments and lobbying of banks and developers to create “the wealth effect” of whom many have profited. To believe that Canadians haven’t profited from this “effect” is to dismiss what homes are worth today compared to a mere 5 years ago. The comparative mind who sold to soon, complains and blames. The comparative mind who stereotypes, labels and bigots, belittles for power and advantage. The comparative mind who missed out, buys at the top and then blames the seller/bank/government/Chinese/Garth and Earths orbit for their stupidity, fails and all the while, the comparative mind, the one that complains of not getting “his or her cut” for whatever reason, while offering at best pity, to those just like them, are a tough love… at best… for the rest.

So I’ll say it again. Real estate bubbles are nothing new. Governments create them to retain power and feed greed. After all… they represent the greedy too. As well as the greedy banks… and greedy investors… and realtors… and speculators… and everyone else who profits down the line, including the bigots and scapegoaters who find speculators of a different skin, as easy to blame for all their stupid problems.

The nature of this world, readers, is non possession. We see it with the true love a mother has for a child. We see it with what people take with them to the cemetary. We see it with what the generations have left us to remember them by from centuries to millenia. We see it with the witness of a tree planted by the ones who knows its shade, they shall never sit under and yet, here we blog and read on a website that is by its very nature, about what we possess.

Beyond our physical possessions, I assure you all, some of us don’t possess much else other than sickness, mental, emotional and physical held together with common threads of sick beliefs of possession which put us as odds with this world and its health.

So… just as Chinese speculators invest in Canada against financial fundamentals that are sure to bring loss to what they covet and possess, buy or sell, so too, will the rest of Canadians in some way, know the feeling of loss, shared or impersonal. Interconnected, we are by systems and laws of which some of us, have yet to begin to have a self given chance to understand. Our morality will be tested. Our ability to not only know the difference between right and wrong but to do whats right or wrong, will also be tested. Every pious act, every obsessive expression, every cold, callous and unfeeling notion, remembered. The lucky will beg for forgiveness, knowing humility, having embraced the truth. The unlucky will live in a delusion, a fantasy, a reality that has very little in it that is real.

I’m reminded of what one Aldous Huxley had to say as one person asked him what he had learned through his life, having had experiences with those that had been more… evolved and he said, “Y ‘know, its funny. You are probably expecting me to say something profound at his point, something ultra wise, but… its to be kinder”.

Being products of our own environment, both micro and macro, I can’t help but believe after all this time, beating the truth into the dense, that he’s still right, regardless of the tactic I choose, but… karma is karma. Better to get your lumps from a Daystar, a Dog star, a “scorcher”, a Sirian… than to get it from someone who really doesn’t care about you at all.

http://en.wikipedia.org/wiki/Sirius

#72 Pat on 06.04.11 at 12:04 am

@ #23 Desi

Desi, learn English. Until then stick to simple sentences- noun, verb, adverb/adjective.

(50% of 600 is 300)

#73 Veej on 06.04.11 at 12:10 am

Garth

There are 1.4 billion Chinese. More that 1 million of them are millionaires. 60% of them want to leave. China has implemented strict property ownership rules limiting residential holdings to 2 per family. Most of the millionaires are wealthy because of real estate. Austrailia limits as well now and if you leave the country you have to sell. Canada of course has done nothing and thusly is now overcome with yellow fever. Racism is growing rapidly and whats really funny is the asians that have been here for longer than say a decade have become the most racist. They say the charlie come latelys are buying with dirty money, are here to use and abuse our over generous social programs, pay as little tax as possible and have no intention of integrating with Canadian society or even learning english. Meanwhile they are pricing Canadians out of their own cities and forcing the ones that are stubborn / dumb enough to buy into debt they have no hope of ever repaying. Great situation. Someone should inform Jason Kenney that being Immigration Minister means more that letting in as many wealthy asians as you can find and selling passports to the highest bidder. There are other potential immigrants you know…

#74 Vulture Fun on 06.04.11 at 12:14 am

jjss at VCI blog in Vancouver recently posted this link to a Landcor study about the make-up of Van buyers in the luxury range (2 – 3 mil). They claim 74% of luxury buyers in 2010 were off-shore Chinese. The methodology is interesting. They screened out Chinese surnames associated with Western sounding first names. I was dubious of the HAM claims at first, but this looks like the first attempt to put together some data, however sketchy. Anecdotally, if you walk around with your eyes open, it is hard to deny the influence of HAM.

http://www.bclocalnews.com/tri_city_maple_ridge/mapleridgenews/business/122754428.html

#75 aussiescott on 06.04.11 at 12:15 am

Hey BPOP, here is what happens when the “HAM” runs out, bury your head in the sand all you like but be prepared to have your ass smacked.
The Gold Coast has been investment paradise for many years and has primarily been built on “HAM”.
And before you ask, the reason buyers are flocking from Brisbane and Sydney to buy them is because the bubble has quite popped yet in the major cities and the fools have their heads firmly buried in the sand.

http://www.goldcoast.com.au/article/2011/02/05/289371_gold-coast-real-estate.html

#76 Vulture Fun on 06.04.11 at 12:20 am

Some might remember that Landcor came out with a similar study that suggested that for OVERALL sales in BC about 5% were Chinese. There was some debate about who was included in that group (off-shore only, resident but not citizen, Canadian citizen of Chinese origin).

#77 Burnt Norton on 06.04.11 at 12:23 am

That should be “…the ice at Rogers Arena…” of course. See, we can’t even decide on a name for our rink. Lol. Doesn’t matter, in a few years it will be something like Cathay Pacific Pavillion anyway.

#78 Stevie Why ?? on 06.04.11 at 12:24 am

the pic depicts the herd so resplendent in their aura of optimism …… CEPT ONE ……. who just had his knackers taken off faster than Charas 115 MPH “slapshot”

#79 Veej on 06.04.11 at 12:26 am

Timely study for those foolish enough to think that asians don’t have much of an affect on the market:

http://www.bclocalnews.com/tri_city_maple_ridge/mapleridgenews/business/122754428.html

#80 noworries on 06.04.11 at 12:27 am

Just put your 5 percent down. If it goes up cha chimg if it goes down claim bankruptcy and cha ching. We all lose..

#81 Prufrock on 06.04.11 at 12:28 am

@1 Anna on 06.03.11 at 9:10 pm:

“You are racist.”

This is so absurd as to sound as if it were planted to stir controversy. I will rise to the bait.

Anna, if you exist (I have trouble believing that people you do), you are a PC idiot. Racist? This is about an internationally privileged class purchasing in a market outside of their own, driving up prices locally. It wouldn’t matter if these people were were German, British, or (hell), even Ontarians, the fact would remain that the money was not made locally, and is out of touch with the people that live here. Racism has nothing to do with it. Class would be a more astute analysis, but you miss that. What we are dealing with here is economic imperialism, pure and simple.

#82 Deliverator on 06.04.11 at 12:31 am

The obsession with real estate evident in Asian culture is having serious repercussions in places where it’s concentrated. That includes BC’s Richmond and (lately) West Van, and towns like Richmond Hill, Unionville and Markham in the GTA.

I understand there is little need for someone in the 401 to understand or care about much that is outside his or her area code, but I thought I might clarify something for those of you who, through some accident of birth, or perhaps blunt head trauma, possess a modicum of curiosity.

West Van(couver) is a separate municipality located on the North Shore of Burrard Inlet, just west of North Vancouver. It is what might be called an affluent community, typified by the British Properties, which used to represent the pinnacle of GVRD real estate. According to the Vancouver Real Estate Rumor Mill on Hot Asian Money (VRERMOHAM, or just about the only thing anybody talks about these days), not a lot of Mainland Chinese are finding their way there these days, though it is predicted to happen Real Soon Now.

The area of Vancouver proper punctuated with the smell of bacon these days is properly called the West Side. This is the location of the trendy Cambie, Kitsilano, Kerrisdale, Dunbar as well as the up-scale Shaughnessy and Point Grey communities. Although, since a shack in Cambie goes for ~$1.7M and Dunbar at least $2M, you’d be hard-pressed to crane your neck far back enough to see the top of such a scale, let alone to know where ‘up’ is. The point is, don’t look down, because it’s a long, long way.

This area is also not to be confused with the West End, which is dominated by the sort of people who like to parade through the streets in leather chaps and tutus every June.

Just saying.

I am well aware of the difference between WV and areas like Arbutus. But check the latest sales stats and the realtor hype. WV is the new Richmond. — Garth

#83 Utopia on 06.04.11 at 12:36 am

#2 Siddelly

Get a large deposit of 100,000? Siddelly, that is only 3 percent or less of the value of Point Grey properties these days. Try a larger amount..or cash.

Moving on…

I am convinced that Greece (and the Greeks) are going to default. They will not, can not, accept the incredibly onerous conditions now being imposed on them by the ECB and the IMF without war breaking out amongst the general public.

I feel we have reached a kind of critical mass of anger and resentment amongst the general population. Disgust is perhaps a better term for the reaction to the conditions they are being asked to accept.

Bondholders had better get prepared for a close haircut because this country is literally being driven to the wall and the people there are saying “No” in no uncertain terms….

This should be one hot summer.

#84 Prufrock on 06.04.11 at 12:48 am

#14 Heart of the World

Good post, but duh!

Yeah QE1,2 (and soon to be) 3 has had an effect, but not in so much in China. China has had their own version of QE which has blown a housing bubble of astronomical proportions. Ghost cities: Google it. It’s not a question of if, but when it implodes, and how much inflation will occur in the meantime. Will 600K still be 600K when it finally collapses or will 600K look like chump change by then? This is the tough question. Excess liquidity is a stealth form of inflation: what seemed expensive before is no longer so because of easy credit. When will that dry up? That’s the question.

Can you answer it Garth?

BTW Garth, I appreciate you keeping the flame alive.

P.

#85 Chaos on 06.04.11 at 12:52 am

Are we there yet?

Are we there yet?

Are we there yet?

Who’s flyin’ this woofin’ plane anyways?

Are we there yet?

What do you mean they let someone on this plane carrying a real estate bubble?

Don’t those idiots know that real estate bubbles are dangerous?

Didn’t they recognize the person with the bubble at the screening station?

Don’t they know that in a confined space a bubble full of hot air has only one way to go?

Is it too late to get offa this thing?

I have to pee.

Are we there yet?

Soon kids, soon.

#86 Sasquatch on 06.04.11 at 12:59 am

There are several things that don’t make sense about HAM.

Are they buying cash? I have not met a single foreigner that can get a Canadian mortgage just stepping off the plane. Is the check sporting a bank of China seal or something.

How many of these “Chinese” are coming from China? I can easily walk neighborhoods of Calgary or Winnipeg and be the only whitey on the block. However each and every one of them is 2nd/3rd generation Canadians. They all love the NHL, Timmies, and say EH just as well as me.

Also both Van, and Tor cities have fair sized china-towns. Just because the buyer has yellow skin doesn’t make em a Chinese national.

Can any-one answer with a true story of selling to a certified “made in China” national?

#87 Deliverator on 06.04.11 at 1:02 am

The house which was selling for 400K in 2007 is now selling for 600K so even if prices correct 50% it would only come down to 2007 levels so, even in best case scenario, people who have been waiting for housing correction since 2007 would not be able to buy it cheap.

It’s pretty clear you slept through math class. You and people like you are the reason that this housing bubble has persisted for as long as it has.

A $400k home that appreciates 50% is indeed valued at $600k. That same home, when it depreciates by 50% will then be valued at $300k, or a 25% haircut off the original purchase price. Maybe you don’t mind throwing away $100k. If so, please ask GT to forward me your email address, and we’ll get to talking about locating a trash bin near me where you can dump yours.

#88 Van on 06.04.11 at 1:06 am

This graph seems to suggest Vancouver’s bubble will deflate shortly after the commodity cycle peaks.

http://i51.tinypic.com/2r551r5.jpg

Makes sense when you consider one of the only remaining indutries in Vancouver is junior mining companies.

#89 DJH on 06.04.11 at 1:12 am

In countless industrialized countries, governments have regulated their immigration policies in order to favour profit-making by its wealthier citizens. The immigrants either supply cheap labour (Germany, Spain, USA, etc.) or are wealthy and do things like drive up real estate values (Vancouver and Toronto). Meanwhile, ordinary citizens pay the financial, sociological and emotional price this wealth generating strategy entails. In my view, our governments and their self-interested business partners are responsible for the situation we are experiencing (real estate values, etc.). Too many Canadians (especially those making up our younger generation) are paying too great a price for this favouritism towards the already wealthy. The only solution is a change in government immigration policy, but I don’t expect any action from Harper. Money speaks louder than common sense.

#90 Priced_out on 06.04.11 at 1:13 am

Garth Man, when sales are lower than previous year you mention over here with so much proud. Today TREB published results and they are 6% higher than last yr.
Problem is chinease are more than 1.2 billion and more than 4 million families worth more than million dollars. They are obsessed with this country especially VAN area, they do not care about unemploykment because they have their own businesses and they are doing pretty good as far as income wise. So they say “to hell with canadians” we will drive the market and that is what they are doing. Once they buy they will never sell becoz they make a maximum of down payment and can easily manage monthly payments.
Let’s consider a fact that we are talking about 1.2 billion and 95% of them hate their own system and they want to get out of there.
Garth what you preach here might make sense in normal market but it is really different here.

#91 Get Real on 06.04.11 at 1:13 am

BPOE

I am assuming that you are a Canucks fan..

#92 James on 06.04.11 at 1:14 am

To Anna, First Post:

Garth is not racist – Speaking the truth. Awesome article. Some people need to learn how to read properly – GOD!!!

#93 Jimbo on 06.04.11 at 1:19 am

My wife and I sold our suburban Vancouver condos a while back and are now renting. I figure that we can’t lose…

If this bubble crashes, then we will be well positioned (with cash) to take advantage of a buyer’s market.

If, on the other hand, the Asians keep on flooding in with the HAM and transforming suburb after suburb into colonies of China, then we simply won’t want to live in Vancouver anymore since I want to live in Canada – not China with its “I need to show everyone that I’m richer and better than my neighbors” culture. We’ll move away for a less expense, traditionally humble Canadian lifestyle elsewhere.

Win – win either way.

#94 LH on 06.04.11 at 1:43 am

Chinese people don’t rent cars, they pay cash.

About half of all new Mercedes in North America roll off the lot LEASED.

Conclusion: if you see a younger white person driving a Mercedes, chances are that she/he is LEASING it!

Not when they’re coming from the airport. — Garth

#95 Chaddywack on 06.04.11 at 1:43 am

I don’t know what to believe anymore….there seems to be no end in sight to this insanity.

#96 Crazy on 06.04.11 at 1:56 am

You know the story about the people of Thriftville. Well, they are here. It is happening. They are buying everything they can.

#97 BROMANCE on 06.04.11 at 2:07 am

China’s a bigger bubble than Canada. Man, this is going to get bloody. Take it from someone whose in the 6th year of hell: you can’t even imagine what it will be like. One day it will hit you-you’re not rich, although on paper you once were, you’re not wealthy, and you can see how you could actually soon be poor. And have to work hard just to keep from dropping completely through the cracks. And to all potential amateur landlords-you better bring your A game. And for God sakes talk to successful property owners so you don’t make the simple mistakes that will cause all hell to break loose. I can’t emphasizes this enough. Its not that difficult, but you’ll want to do things that will blow your face off. You have got to hustle and find out what’s what.

#98 Jody on 06.04.11 at 2:26 am

Yea, but, after the Chinese go away we will have the Indians, they will bring all their call center riches and buy out the Chinese, and then after the Indians it will be the Brazillians with their new found trillions from offshore oil wealth. Of course out here in Alberta the boom is on again baby, oh yeah! Buy now or be priced out forever! Prices only go up!

Hahahahahahaha!

Oh good gawd, we are so screwed. So far it’s been great telling people, “I told you so.” And we keep having to put up with more and more crap like this, some people just need a good hard smack upside the head.

http://www.hastingsstargazette.com/event/article/id/25007/group/News/

http://www.truecrimereport.com/2011/05/duncan_south_carolina_police_t.php

http://www.rutherford.org/articles_db/press_release.asp?article_id=914

http://www.rawstory.com/rs/2011/05/18/eighty-four-year-old-man-allegedly-beaten-by-police-officer-after-calling-911/

#99 Phil Indablanque on 06.04.11 at 2:28 am

It’s not the Journey it’s more like heard it from a friend who heard it from a friend who …

#100 FranSix on 06.04.11 at 3:10 am

The opposite side of the trade would be controlling the risk in all of the liquidity of housing price associated bonds. If and when the housing price bubble collapses, the credit default swaps on ‘covered bonds’ (really another type of Asset Backed Commercial Paper) rise. So the bigger players in the commercial banking are buying up the risk, forming risk cartels. As long as counterparties are accumulating risk in covered bonds, there is the perception of limitless liquidity in any asset market. Thus you have a commodified market in housing prices. The sudden reversal comes when leverage dries up and a whole market of covered bonds go illiquid.

#101 kansai92 on 06.04.11 at 3:22 am

#23 Desi: are u daft boy?
A 50% haircut on a 600k property takes you to 300k.
Ya declines are a bitch aren’t they

#102 not asian on 06.04.11 at 3:23 am

“if you have a market driven by one group of people on one side, and if that group decides to switch sides (i.e. the Chinese become sellers), then who can buy?”

I was just told by a realtor friend that she has a large pool of china buyers, whose only income is from buying presales, then flipping (assigning) contracts. It has been very lucrative for the past few years. They only have to put down 5-10%. Some developers will even assist. So most of them will buy several units (7-8) at one time. That explains why in Richmond, BC there are hundreds of people camping out for 3 days to buy a presale. In fact, they are have been sitting there since Wednesday, and the doors won’t open till tomorrow, Saturday. I guess we may think they are crazy, but in fact, they are crazy like a fox. The lucky ones will be making at least $70-80,000.00 when they flip their contracts to their fellow countrymen. This ponzi scheme will continue as long as nobody drops the ball.

#103 kc on 06.04.11 at 3:27 am

23 Desi on 06.03.11 at 9:41 pm

“The house which was selling for 400K in 2007 is now selling for 600K so even if prices correct 50% it would only come down to 2007 levels”

I am sure someone has corrected this mistake of yours by now, however in case not…. 50% of 600K is 300K so where does that figure play on your yearly examples? 2004??

#104 oldmac on 06.04.11 at 3:51 am

I swear Garth some of the posters get more ridiculous as you get closer to the truth. Your message has been the same ever since. Let me kindly address some of the ‘questions’ these people have (whether or not their posts have taken the form of a question, the lack of perception portrayed in the posts inherently makes them so).

-BPOE, 1 Billion plus potential customers? So every man woman and child in China will eventually by a house in Vancouver? Is smoking meth a hobby of yours?
Have you no knowledge of the gigantic housing bubble they have in their own country? Do you not realize that this type of herd mentality can easily swing in the other direction?
I realize that you’re (<-take note of the usage people) probably a realtor and you base your life around senseless delusion, but somewhere in the back of your mind you must know the truth.
If the Chinese GDP is being pumped by top down edicts and not by demand of the masses, their (<-again, take note) show will eventually stop too, or slow drastically. This will have an impact, that is undeniable.
To believe this can go on forever is willful ignorance, or a pathetic attempt at deception. Is HAM your last bastion?

-Desi, Sure some people can make some fantastic cash buying at inflated rates and then selling later at further inflated rates. Timing our sales is how we make money in the market. But that's usually done with money we've already earned, not borrowed. It's also usually done with sums that won't take the average Canadian 25-35 years to pay off.
Investing is usually done successfully by people who have at least a semblance of a clue. If you need proof of the fact that our new home buyers don't know what they're doing, please review the next episode of Holmes on Homes. Never have I seen people so willing to jump into a life long investment while knowing so little about it. It's embarrassing. Do people not know what rotting wood looks like? I guess not.

Chinese investors may have loads of cash but us locals – the ones who do the majority of the buying, do not. What Garth has been saying all along is this: if you have no wage increases or job creation to go along with these inflated asset prices, you will eventually have economic stagnation at best (and likely a harsh correction). This wouldn't be a problem if said asset could be paid off in a short time frame, not by a lifetime of debt servitude. It's houses we're talking about here guys, not a fancy stereo system. If people dump all their money into the house and buy groceries on credit, the ceiling will be reached eventually.

-Anna, were you insulted by the Mercedes comment? Please enlighten us as to what exactly makes Garth a racist. If I tell you that most Irish people burn easily with very little sun exposure, is that also racist? Or is it just that there is some statistical correlation there?

Houses are great IF:

-They are purchased for a sum in line with the buyers income.
-If said buyers income is reasonably stable, or they have multiple income avenues should one not work out.
-If there was a significant enough down payment so that tax payers won't be on the hook for other peoples' poor decisions.
-If the house if built solidly, by professionals or well informed do-it-yourselfers (I'd hazard to guess that is far from the case for most); so that the owner will not incur egregious repair costs.

These conditions must exist for a healthy economy, because a home is still far and away the largest purchase most people will make in their lifetime. We need these conditions so we can spend our productive capacity on creation of new intellectual property, exploitation of resources, and improvement of the quality of life.
What we don't need is more under-educated greater fools buying into a dying paradigm and spending their lives paying for it.

In closing, don't be insulted if you own a home and you've done so responsibly. Don't assume all renters are mouldy basement dwelling troglodytes. And please, for the love of god, don't perpetuate this social-mental deficiency by caving to the whims of your peers. Some day I want to go to space, dammit, don't make it harder for me.

#105 Jake T. on 06.04.11 at 4:25 am

A primary residence is not an investment. It is just a place to live and people will learn this in Canada like they did in U.S., Japan,Ireland,U.K. etc. Now if Canadian housing prices drop in 2011,2012 etc. no one knows but I see other countries being affected in the next 12 to 18 months. Goodluck real estate junkies.

#106 Onthesidelines on 06.04.11 at 4:45 am

Actually, what is the cause of these insane valuations is no longer important to those like myself who have their own sense of what value is. It matters not one iota that the market is pricing some crack shack on the west side at 1.5 mil or that hords are lining up to buy 50sq meter boxes in Richmond. Simply put, few ordinary people with half a brain are willing to enslave themselves for the rest of their lives to buy such properties.

Whether it crashes or not is also irrelevant because even after a crash which does make housing affordable, places like Vancouver will be economically devasted dead zones.

Whichever way this plays out, it’s all bad news.

#107 Steevo on 06.04.11 at 5:26 am

Noun 1. yellow man – offensive term for an Asian man
derogation, disparagement, depreciation – a communication that belittles somebody or something
Oriental, oriental person – a member of an Oriental race; the term is regarded as offensive by Asians (especially by Asian Americans)

Like white, or black? — Garth

#108 David B on 06.04.11 at 6:04 am

So, worry not about the Asians. Let them buy. Just don’t you.

————————– point taken!

There is of course an Asian Culture as compared to a Canadian Culture … where one family lives in a home of great size and one where two -three families live in a home half size or less … couple this to fact that as of July 2010 Mandarin overtook French as Canada’s second most spoken language! In Quebec English is now second to Muslin languages.

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

Times are changing and perhaps old Canadians and new alike will become the renters of our land not owners. If so and our bank accounts are full …. who will complain?

#109 JC on 06.04.11 at 6:10 am

Greater fool in Cantonese is Shūi Yū or directly translated as water fish aka fish in a barrel. It’s a colloquial reference to anyone who is taken in by shysters after failing to do adequate due diligence. It also suggests blind greed.

#110 X on 06.04.11 at 6:56 am

When the tide turns, my guess would be that the HAM would pull out in droves. A foreign property owner in Canada has no true vested interest to hold on to a losing property. (at least a homeowner will spout out that they’ve got to live somewhere, while they desperately try to sell)

#111 the_apocalyptic_one on 06.04.11 at 7:04 am

The game will be over when its over and there are so many black swans waiting in the wings that this could happen anyday now. And when the slaughter starts, neither Garth nor the best Chinese tea leaves reader can predict how fast or how severe the downturn will be, it could be 20% (the first year) or it could be 50%, it may even be 80% before its all said and done, in some places. Only thing for sure it won’t be a Soft Landing, this plane has no landing gear and with the gas gauge broken, no one has any idea how much gas is left in it; for all we know it may be running on fumes.
CRAAAAAAAAAASSSSSHHHHHHHHHHH!!!!

Renters, your patience will be rewarded, even though your patience is beginning to rival that of Job. But with never before seen tactics (and frauds) practiced by all parties involved from the snake oil salesmen (aka realtors) to Central banksters to pockets lined with cash by developers politicians to banks big and small, such a historic bubble had to inevitably be the result. But now matter how big the bubble all it takes to burst it is a little pin prick and the financial world today is one giant Walmart filled with nothing but pins of all sizes – KAAAAAAAAAABOOOOOOOOM!!!

So this unprecedented financial tomfoolery, trickery or downright fraud at the highest levels had to have bred fools, great fools, greater fools and now (we hope) the greatest fools. The most telling sign now is that the fools are purportedly not available in Canada any longer so must be imported from China.

This does not end well!

My apologies for borrowing your punch line Garth.

#112 BrianT on 06.04.11 at 7:38 am

What is wild about the Vancouver story is that it is occurring in the midst of the overall North American economic depression. The USA is ten times as large as Canada, by far our largest trading partner and the USA does not have even a single city that has booming RE at this time. The bullish thesis seems to be that as long as China booms, Vancouver and Canada overall will be OK even if the USA goes right down the toilet. No one knows for sure exactly how everything plays out but IMHO the attitude that the economic problems of the USA won’t affect Canada in a major way is illogical.

#113 Lisa on 06.04.11 at 7:48 am

The HAM are playing Monopoly with Canadian real estate…they think they are going to get rich quick. They treat their cash like Monopoly money. Don’t assume they have many more millions on top of the 2-3 million they are throwing at these little Monopoly houses. They are playing a high stakes game. They are nouveau riche and drunk with their perceived power and wealth. They have no real intention of making a real life here in Canada, learning the language and getting into Canadian society. It’s a huge red flag.

#114 jerry on 06.04.11 at 7:49 am

Hi Garth

I would like to encourage you to write your next book with the ages 24-34 demographic in mind. The impact of peer pressure and well meaning but poorly informed relatives is playing havoc with basic investment strategies and the overwhelming allure of buy versus rent in housing.

These “kids” (mine included) all seem to know “some friend” that made a “ton o money”.

For your efforts, I would predict that the boomer bound parents would all buy these as stocking stuffers .

#115 bigrider on 06.04.11 at 7:54 am

Ok. Looks like I have to admit, the chungs, chongs and chings have overwhelmed the Sopranos, sinopoli’s and Sarducci’s when it comes to the RE humping obsession.

Turn over the reins my Italian bretheren, there is a new breed in town.

#116 boom boom bust on 06.04.11 at 7:56 am

I am a small business owner and would like the government to give me a raise, 7 weeks paid vacation, and full pension after 30 years. Why should I break my balls creating jobs, and risking capital when I can sit on my capital, work less hours, and make more money working for the post office?

#117 bigrider on 06.04.11 at 7:57 am

Look, with all this HAM in Vancouver, at least we know there will be a plethora of jobs for blackjack and baccarat dealers.

I predict the opening of at least 10 new casinos over next ten years. Great revenue for BC !

#118 Mr Buyer on 06.04.11 at 7:58 am

I am thinking a detailed and accurate accounting of the initiation and propagation of this bubble would be of great value. I saw a documentary of the great depression that was 70 years to late and did not go far enough in pointing out who exactly benefited from that tragedy. I am talking fine grain minute by minute forensic accounting. ACCOUNTABILITY. Who is benefiting now and in the period of austerity to come and was instrumental in fostering the conditions for a bubble to form, directly or indirectly . I really want to know exactly. I think it was Eisenhower that had a name plate on his desk in the Oval office that read “THE BUCK STOPS HERE.” I cannot help but respect the man. Character ( I have to admit I do not know how he was as a president).

#119 Devore on 06.04.11 at 8:07 am

#16 disciple

Why would HAM be buying into a falling market? Doesn’t make sense.

Which falling market is HAM buying into? Certainly not Victoria.

#120 Neo on 06.04.11 at 8:12 am

BPOE,

There isn’t 1 billion Chinese able to pay for Vancouver real estate. There are only 670,000 Chinese millionaires. To put that in perspective. The U.S with a 1/5 of the Chinese population has 4,715,000 millionaires.

#121 Neo on 06.04.11 at 8:21 am

I actually noticed quite a few people have no idea how many millionaires are in China. Here is the link. Where are you people getting one million and 4 million Chinese millionaires from…lol..

670,000 folks

http://updatednews.ca/2010/06/20/countries-with-the-most-millionaires-2010/

#122 Love this Blog on 06.04.11 at 8:47 am

Garth nothing you said, is racist. But I KNEW, just KNEW someone would come along, on their high horse, and accuse you of it. I started reading the comments, wondering when I would come across it. Didn’t take long. Post #1. This is a BIG part of what’s wrong in Canada right now.

#123 BoomerBoy on 06.04.11 at 8:53 am

Here is a simple formula on how to turbo-charge your equity position, if you still have a mortgage.

Regardless of how much equity you cuurently have on paper, it is wise to pay down your mortgage as soon as possible. Weekly or bi-weekly payments are the simplest method of reducing the amortization period.

Interest rates have never been so forgiving for those prudent enough to accelerate their mortgages. Remember, extra payments come right off the principal.

There are two ways you can go in this market. You can “feel rich” and load up your HELOC to the hilt on stuff you don’t need, or you can turbo-charge your equity by reducing the principal while the value of your home continues to rise.

Worst case scenario is that if the market goes south or interest rates rise, you will have less debt to deal with. But if the market keeps rising, your equity grows by leaps and bounds.

It’s a win-win situation.

Your logic is that of a foolish real estate-blind ingenue. If the bank will give you a mortgage at 3% and the financial market will give you 8%, and house values are destined to fall, paying down the loan and increasing equity in an at-risk asset is hardly sound. — Garth

#124 bridgepigeon on 06.04.11 at 9:17 am

60 Nonplused
Germany shut down 8 of their 17 reactors right away with plans now to close them all. Many there feel they can’t afford not to decomsission them. Fukushima, perhaps already 10 times worse than Chernobyl as you wrote, is a massive coverup with associated lies and disinformation There is simply no science available now to turn this off. Where is the radiation going and what are its effects are the important questions now.

#125 Love this Blog on 06.04.11 at 9:25 am

I had an interesting experience Thursday night. I was at a company social, and one young lady sitting next to me was bragging about the house she just bought. (she is 32) Someone asked where it was…..she told them the street, but didn’t know the address. She then explained how she was SOOOOO sick of looking at houses, she only looked at this one for 15 minutes before she bought. I am dead serious. She laughed and laughed as if it were the world’s biggest joke. She then went on to say she had paid asking price, as it seemed fair…………..didn’t try and negotiate a lower price.
The smile faded somewhat when one of our Engineers, who used to work for the city in question, asked if the house had “No-corrode” sewer pipe…………….a cardboard type of pipe used heavily in the 60’s that is now collapsing and needs to be removed. The “new buyer” re-stated “Well, I don’t know, like I said I only looked for 15 minutes before I bougth!!” A bit indignant, perhaps that someone would rain on her parade. The Engineer stated she may want to check this out before signing off on the purchase, and renoegotiate a bit if it had the old sewer pipe. The new buyer said “It’s too late now, they are bringing the papers by work tomorrow for me to sign”.

SO…..THIS IS THE TYPE OF BUYER THAT IS DRIVING THE CURRENT MARKET. The crash will come, it will be very painful for most, and most importantly, it will be well-deserved.

#126 Leftcoast on 06.04.11 at 9:47 am

As North Americans it’s our birthright to go abroad and buy up properties, who do the Asians think they are!
We would never go to Panama,Mexico,Costa Rica…. and price out the locals.

#127 Borrow as much as you Can on 06.04.11 at 10:04 am

#28 The InvestorsFriend (Shawn Allen) on 06.03.11 at 10:08 pm
WHERE ARE THE DEAD BEATS? (There are few dead beats as long as they have lines of credit to hide their situation)
—————————————————————–

It’s crazy but that is the truth. After watching people with no money live it up and enjoy life with no work or sacrifice I thought why not me? Why work and save and live within a budget while people who make less me live a better lifestyle? Yes, I know unless everything continues going up (housing) I will be forced to go bankrupt. Once you become a home owner the banks will give you all the credit you want. My mortgage allows me to skip a payment or I can borrow from LOC to pay mortgage. I’ve only once had to do that.My only worry is can the banks come after my wife. The mortgage,LOC and credit cards are in my name. My wife works and she doesn’t like the thought of going bankrupt but who cares when the world is bankrupt and the system is a house of cards. You look at the economy, stock market or the world in general and nothing make sense. Why not enjot the ponzi. Like I said my only worry is if I have to go bankrupt can they come after my wife?

#128 Anotherlowlyrenter on 06.04.11 at 10:09 am

Everybody talks as if the Chinese only know to buy. But they don’t like losing money either in a falling market. Ask any Hong Kong resident and they will tell you that the Chinese know how to push a trend up – and they know how to push it down. I personally witnessed two periods in the last 20 years where the “Chinese are coming” mantra was used to justify purchase. From a Hong Kong newspaper in 1996 just before the 65% crash:

http://www.thestandard.com.hk/news_detail.asp?pp_cat=&art_id=34439&sid=&con_type=1&d_str=19961113&sear_year=1996

#129 BPOE on 06.04.11 at 10:11 am

If anyone’s interested what I look like I’ve uploaded my picture.

http://tinypic.com/r/znpwsp/7

#130 The American on 06.04.11 at 10:17 am

#31: JohnnyBGood, you asked, “At what point does the Canadian residential RE market become ripe for an even BIGGER collapse than that which occurred (and continues) in the US?” In answer to your question, Canada has already exceeded that point. Why, its all the talk inside the global banking realm right now and it is fully understood it is going to be horrifically ugly. It is, however, no longer the talk of health and good standing, but instead it is the the biggest concern on many people’s minds. Harper has FUBARed Canada more than what even many of me and my constituents could imagine. FUBAR, for those of you who do not know, is F*cked Up Beyond All Recognition. When there are figures out that Vancouver housing is 11 times the average family income, and GTA is 8 times the average family income, there will be a massive correction. The U.S. collapsed nearly 4.8 times the average family income. A dirty little secret that nobody really wants to make front-page news is that Canadian delinquencies are up 50% since 2008 timeframe. Funny how THAT never really makes “news,” but instead gets buried in the papers. Anyway, Canadians household debt now exceeds that of Americans, all the while when Canadians earn less on average, pay much higher taxes, and have less going into savings than Americans.

The average mortgage in Canada in 2010 was $171,500, or what is now nearly the price of 100% of the average home in the U.S. Mortgage debt averaged for all households, including those without mortgages, is $63,126. So, you asked at what point does the Canadian collapse become worse? By all indicating factors, its well beyond the point of no return.

http://www.cbc.ca/news/story/2011/02/17/vanier-institute-household-debt.html

http://www.npr.org/blogs/money/2011/04/25/135628600/where-the-housing-bubble-lives-on (an excerpt from National Public Radio in the U.S.)

http://www.canadianmortgagesinc.ca/2011/02/average-household-debttoincome-ratio-at.html (although it is understood the true Canadian savings rate is actually at a -2% as of now).

http://www.cbc.ca/news/business/story/2011/02/17/vanier-institute-household-debt.html

http://canadianprofiteer.com/family-debt-to-income-ratio-hits-record/

http://www.cga-canada.org/en-ca/ResearchAndAdvocacy/AreasofInterest/DebtandConsumption/Pages/ca_debt_default.aspx

Americans and Europeans alike are well aware of the bubble in Canada, so the question to be begged is, “Why aren’t Canadians aware after having seen this movie three or four times in the past few years?” It truly is unbelievable.

#131 skeptee on 06.04.11 at 10:23 am

If asian Buyers are responsible for this housing price hike. why dont to they invest in USA where they can get a house half the price they are paying here.

#132 d on 06.04.11 at 10:26 am

Anna…Seriously!!!
Good to read 99% of blog dogs are not putting up with the likes of Anna’s absurd accusations. Ironically her comments are rooted in ignorance.

It used to be a very bold statement to accuse one as racist; it used to have meaning….but based on how Anna (without merit) came to this conclusion about Garth, I assume she does it every other day. The more people like her do it the less impact it has when some is truly being racist. It’s revolting. Anna, you’re part of the bigger problem and not part of the solution like you think you are.

We all know Garth chooses his words very carefully and I commend Garth for not changing his writing style for all the ‘Annas’ out there…you know those people who need every statement to be politically correct. (IMO – “Political correctness is a cure to which there was no disease” )

Don’t be an Anna!

#133 cb on 06.04.11 at 10:26 am

We’re immigrants in Calgary of around 15 years.

Calgary is a nice town overall, but we can simply no longer afford to live here, we really are priced out forever. so, we asked ourselves, what’s the point ? what are we doing here ?

don’t want to spend our entire lives working just to live in a poorly constructed box and be forced to ride a miserable third world transit system due to excessive parking costs. (higher than Manhatten I’m told) OK, we have other none-financial reasoning to leave to, but cost of housing/living aspect is a large part of the equation.

We’re not wealthy, earning (I guess) around average. (80k ish me, wife and two young children)

So, its with mixed feelings, we’re leaving the country, moving to somewhere more affordable.

#134 allister on 06.04.11 at 10:26 am

I don’t buy the HAM argument. Most chinese residents make $10 a day. There are 7 billion people in the world, and I don’t here anything about rich Europeans, rich Shieks, rich Americans, Rich anybody else driving up our real estate. You mean to say its ONLY the main land chinese doing this?

Personally, I would bet its stupid Canadians doing the RE inflation, like they did in Calgary, Edmonton, Sask, Mississauga and so on. Virtually free money is flowing from Canadian Banks.They love it when we sell our soul to them for 30 years.

Mark Carney needs to be a man and put rates above inflation. The Bank of Canada is run by a leader who can’t make decisions.

#135 American Werewolf on 06.04.11 at 10:27 am

Hey Baghdad BPOE,

Do you honestly think anywhere near a billion people on the globe have 2-3 million to dump on a Richmond home?

The answer is no. You perspective is a fairy tale. And even if they did, their herd desire would merely be temporary and susceptible to drying up and buying Seattle property the minute some asshole tells them its a better deal.

#136 David Jensen on 06.04.11 at 10:27 am

You don’t have to do much travelling around the world to realize that, compared to Canada, most of the highly populated developing countries are pollution and violent crime ridden cesspools with unreliable infrastructure and sanitation.
So, what are the hundreds of millions of new millionaires being created in those places over the next two decades going to do?
Many of them are going to buy a better place to live, and many of those will pick Canada.
And the more that come…and tell their countrymen how great it is here, the more that will follow.
Real estate is location, location, location, and Canada’s major cities are among the greatest locations to live on Earth.

#137 MR Sheep on 06.04.11 at 10:27 am

BPOE explain to me how renting from the bank makes sense? If you buy a house for 600000 with 25% down, leaving me with a 450,000.00 mortgage over 25 years at a interest of 3.740% the final cost is $841227.00 This also does not including any other costs of house ownership. How do I make money:)? My down payment of 150000 would make 7500 a year with 5% interest, after 25 years it would be 187500 this is not even with compound interest. Please explain to this sheep how much money the house would have to rise in order to make money. Thanx for your help.

#138 eddy on 06.04.11 at 10:27 am

Article about the end of the British Monarchy:

http://thedailybell.com/2417/Queen-Worried-About-Empires-Meltdown.html

#139 BDG-YYC on 06.04.11 at 10:27 am

Gawwd Garth … !!!!

All the Vancouver blather gets tiring. But hey what can you do but a bit of research … http://www.guidetobceconomy.org/bcs_economy/mainland_southwest.htm

Just one stat in my view needs to be appreciated in order to have an understanding of the state of affairs as far as the economy in the GVA.

80% … EIGHTYpercent of the economy is SERVICE SECTOR !!!!

Combine this gem of a statistic with this equally telling tidbit …
” B.C. is faring worse than other provinces, with 56 per cent of its residents reporting they were carrying an increasing debt load, compared with 42 per cent nationally”

“http://www.cbc.ca/news/canada/british-columbia/story/2009/05/26/bc-rising-household-debt.html

Conclusion? House of cards !! An economy based on people mowing eachother’s lawns using borrowed money supported by, and entirely dependant on continuously rising RE values and a steady stream of new arrivals looking to mow thier way to wealth.

BPOE better be right because there is no capacity for an economy that is so extremely consumer based and credit dependant to weather a downturn.

A bubble in search of a pin per chance ???

#140 Daisy Mae on 06.04.11 at 10:33 am

Anna on 06.03.11 at 9:10 pm

“You are racist.”

You can’t read. — Garth”

Wow! Good for you, Garth.
Another excellent article.

#141 Jim on 06.04.11 at 10:35 am

Vancouver May Real Estate stats show, rising prices on rising volume and falling inventory.
Richmond up.
Vancouver up , including East Vancouver,
West Van up.
Burnaby up.
Explain?

#142 American Werewolf on 06.04.11 at 10:38 am

@Ed
“If all these asians are actually pulling massive amounts of cash out of Chinese banks to invest in Vancouver RE, why haven’t we heard of any runs on Chinese banks?”

Maybe this money isn’t coming from Banks. Maybe its being embezzled straight from the corporations that make all that shiny shit we buy at Walmart. Maybe they know that throwing it into a risky asset and losing half of it is better than putting it into a bank their government can and will freeze.

Just a thought. No one knows the real stats on the HAM story, and no one even knows how legit all this money is.

One day China is struggling to transition from an agrarian to industrial society–fueled by dirty energy and monopoly yuan–and the next day every man, woman, child and dog in that country has 3 million CAN to blow on a shanty dig in Vancouver. Something doesn’t add up.

#143 Bruce on 06.04.11 at 10:40 am

Actually, a Toronto house is more expensive than a Vancouver one. A Rosedale house is usually more than 5 million and a Lawrence Ave house is more than 10 million. Not many such houses are owned by Chinese.

#144 All is knowledge on 06.04.11 at 10:41 am

Chinese are very good family oriented people and make excellent neighbours. They are no different than any other races. They want to live a good healthy life and provide a good future for their family. Chinese are victims just as all other races of big business which is all about profit. So when the market crashes as surely it will based on economic fundamental revertation to the norm, they will suffer too. I blame big business greed and lack of government regulation in lending standards for this housing casino. But we should not be surprised by this as the casino mentality is alive and prospering in all of our governments as a way to make money. It is promoted in marketing by our government owned OLG. Just go to casino Niagara and you will get lucky. Likewise buy a house and you will get lucky. Only later do you realize you were taken in and now you must pay the consequences of being duped.

#145 American Werewolf on 06.04.11 at 10:45 am

@MR Sheep
“How do I make money:)?”

Make sure you also include property transfer tax and real estate commissions on a sale into the equation. And to top it off, consider the scenario of “moving-up” after 10 years–each time a new home is purchased, you are stuck at the start of an interest loaded loan again before paying off a significant portion of the principle on your last loan.

At the end of the day, unless you actively renovate from cash and add-on to dramatically increase your property value, you do not make money. The realtors & banks always win.

#146 Bruce on 06.04.11 at 10:45 am

As to my knowledge, many Canadian Chinese are very poor. They live a very miserable life, that’s the reason they like to leave Canada to work in China. That 1 million out of 1.4 million Chinse are millionair is just nonsense.

#147 Utopia on 06.04.11 at 10:48 am

Well then maybe it is time that CMHC was finally regulated by OSFI too. They might get something done about granting full CMHC insurance coverage to permanent residents, just for starters.

You see, you don’t need to be a Canadian Citizen to qualify with our housing insurer.

http://www.google.com/search?ie=UTF-8&oe=UTF-8&sourceid=navclient&gfns=1&q=canadian+citizenship+requirement+for+cmhc+insurance

http://www.cic.gc.ca/english/newcomers/about-pr.asp#pr_can

#148 allister on 06.04.11 at 10:51 am

#136 Jensen

Heres the Vancouver crime rate. 600 violent crimes so far this year.

http://vancouver.ca/police/organization/planning-research-audit/district-statistics.html

#149 Leftcoast on 06.04.11 at 10:52 am

131 skeptee on 06.04.11 at 10:23 am

If asian Buyers are responsible for this housing price hike. why dont to they invest in USA where they can get a house half the price they are paying here.
————————————————————-

Invest in a rising market and Canada is the preferred place to live.

#150 The InvestorsFriend (Shawn Allen) on 06.04.11 at 11:08 am

Borrow as much as you Can at 127 , asks Can They Come After his wife if he goes bankrupt.

Yes, if you are bankrupt, she will be too, one the features of marriage.

So they can come after her money, yes. As far as any interest they have in coming after her, that is purely a matter of taste.

#151 SwampLily on 06.04.11 at 11:13 am

#1 Anna, look up the definition of “racist.” No one here is saying that he or she believes any race to be superior to another. Talking about what the Chinese are doing does not make one “racist.” Oh brother…

#152 BoomerBoy on 06.04.11 at 11:22 am

“Your logic is that of a foolish real estate-blind ingenue. If the bank will give you a mortgage at 3% and the financial market will give you 8%, and house values are destined to fall, paying down the loan and increasing equity in an at-risk asset is hardly sound.” — Garth

Unlike you Garth, I refuse to predict the future and therefore cannot claim to know it.

The fact is that anyone in the GTA who followed your mantra say 3-4 years ago, is now at least 25% behind the market, instead of a proud home-owner, several years closer to being mortgage-free.

“Destiny is no matter of chance. It is a matter of choice: It is not a thing to be waited for, it is a thing to be achieved.”
William Jennings Bryan

You are blind. — Garth

#153 Utopia on 06.04.11 at 11:31 am

#131 skeptee

“If Asian Buyers are responsible for this housing price hike, why don’t they invest in USA where they can get a house half the price they are paying here?”
——————————————————————-

Because the US government is in conflict with China over trade imbalances, the Yuan peg, human rights, resources issues and competition overseas plus a host of other irritants. These are big news in China where even the hint of a trade war is ruffling feathers. The US may not be the first or best overseas destination for storage of wealth and diversification of private individuals nor is it seen as a good quality of life option as that country is mired in a deep recession.

The reasons that Chinese are not flocking to Seattle or other American centers in the same way they are attracted to Vancouver is likely more related to politics, nationalism and trade relations than anything else.

We just seem like a more secure destination. There is less animosity here and virtually no anti-China rhetoric filling the daily airwaves. Certainly nothing like the rhetoric coming out of the mouths of some US politicians lately.

#154 Karl on 06.04.11 at 11:32 am

“You need only read this blog for a day or two to see the social impact. What people perceive as the destruction of affordability at the hands of mainland Chinese has resulted in racism, stereotyping and fear. Maybe justified. Maybe not.”

I am not calling you a racist. You don’t strike me as one, but could you please explain to me when racism and stereotyping is justified?
Also, for the last year you’ve been saying that rich Asian millionaires were smart and wouldn’t buy an asset that was destined for doom. Why the change of tone?

Brush up on your syntax. The subject of the sentence “maybe justified, maybe not” is the word “what”. The subjective phrase is “what people perceive.” Racism is rarely justifiable, but perceptions often are. Your second question is spurious. — Garth

#155 TC on 06.04.11 at 11:32 am

Your’e absolutely correct Garth. The 08-09 crash was a warning shot to all to clean up your debts and save your money. We are not out this financial tsunami……..many people in this country are going to be financially crushed and they will be in disbelief and shock as to how fast it will hit them! I can see the financial reaper coming as clear as day!

#156 not 1st on 06.04.11 at 11:33 am

China hold multi-trillion reserves of U.S. dollars which they cannot directly invest back into tangible assets in the U.S. They don’t really want to invest it back into the U.S. anyway cause that will just return the U.S. to a real superpower again which is the status China wants. U.S. is in for a crash anyway which China wants.

So they are taking these reserves and investing in the next best place – Canada. We will be commodity servant to the superpowers for a long time and ride an economic tide as a result so why not have people on the ground pulling the levers.

Another theory is that chinese with money, know something about their own country that we don’t. Either its in a super bubble thats going to collapse, or that their capitalism model will eventually lead to political revolt and a state crackdown. Or there is an environmental and population catastrophe brewing or a real war with the U.S. is coming down the line.

Not every decision is about financial return. Chinese are noted for taking a very long view. Too bad the readers of this blog can’t figure this out.

Too bad you’re delusional. There is no evidence of sovereign national Chinese wealth funding Canadian residential real estate purchases. — Garth

#157 Kitchener1 on 06.04.11 at 11:34 am

Its just a matter of time until CMHC puts a limit on homes it will insure, probely in the 5 million dollar range.

the systematic risk posed by insuring properties in the 750k-1-2million range is just not feasibile. A 30% decline in asset value will wipe out CMHC.

As for HAM $$ its a totally different dynamic. A lot of that money is not legit to began with. Some of it may be, but you just cannot have that kind of capital flight without greasing some palms in China. It doesnt matter if the values go down to these folks, they got out of China, have their Canadian citizenship and they got there families out. thats what matters.

#158 The InvestorsFriend (Shawn Allen) on 06.04.11 at 11:40 am

P.S. to Borrow as Much as you can…

Our spouses debts are legally our debts… (and ladies welcome to the equality of men and women that you asked for)

And whether anyone comes after your wife or not she might want to go after a new man in the case of your bankruptcy.

A good man does not go bankrupt through irreponsible borrowing (he may through illness or very unusaul circumstances but a good man does not go bankrupt through sheer stupidity). And a real man who goes bankrupt does not then whine that the banks made him do it by letting him borrow too much. Not saying you would do that, but some guys (but not real men) do.

#159 BrianT on 06.04.11 at 11:44 am

#Lisa-There are a lot of stories out there about Chinese paying millions in cash for Vancouver RE-meanwhile as far as I know CMHC has no maximum limit on low money down taxpayer insured loans. Excepting sheer recklessness and disregard for the public, no one has a theory why the taxpayer should be on the hook for huge (e.g. over a million dollars) residential RE loans. My gut feeling is that the Chinese buyers are rarely putting down large sums-I could be wrong. It appears that CMHC feels that putting in a limit at eg. a million dollars would harm the market-that mentality should make the taxpayer and home owner sleep real well.

#160 Gord In Vancouver on 06.04.11 at 11:49 am

You are racist.

You can’t read. — Garth
________________________________

Good answer (and post), Garth.

#161 Utopia on 06.04.11 at 11:51 am

I will say one thing about this Greaterfool site. It consistently is ahead of the curve on almost every major national issue and lots of minor ones too. I can barely count the number of times the dawgs or Garth has brought up an issue here that I had not heard anywhere else only to see it as a major news story later. (Group hug). It might be a little left leaning but it does offer a close-up, no-holds-barred view and cross section of how Canadians are really feeling on a wide range of topics. It’s like a constant running poll. No wonder its so popular in Ottawa.

#162 Hoof - Hearted on 06.04.11 at 11:53 am

Garth isn’t being racist…whats happening is the obvious…becomes….OBVIOUS…..

People either ignored it, or didn’t care, when times were good. Then the “bubble” of silence weakened…A few had the jam to speak out…which gave the issue credibility, then the house of cars started to fall.

Any pumper etc realized they would look like a fool and idiot and have no credibility if the denied it, or more like tried to polish it up…

IMHO…the gravy train is over for the ” locals ” who bought into “keep up with the Wongs”, which they could never do…except for the CMHC which created a perverted version of equity.

All this is coming to a head….and I was furious when I firstsaw that Richmond article about HAM lineup.

This is reverse racism…

#163 Gord In Vancouver on 06.04.11 at 11:55 am

#131 skeptee

If asian Buyers are responsible for this housing price hike. why dont to they invest in USA where they can get a house half the price they are paying here.
_______________________________________

Canada’s market wasn’t given a chance to correct thanks to record lower interest rates that were brought in 2 years ago. America’s market crashed, scaring the crap out of all potential buyers.

Speculators like Asian buyers want immediate momentum, not long term gains.

#164 Mr Buyer on 06.04.11 at 12:04 pm

The following is a link to the Japanese government website in which radiation levels from across the country are published daily and have been for a long time (there are 54 reactors on this tiny geologically active island)…
http://www.mext.go.jp/english/incident/1303962.htm
I do not wish to get back into the exaggerations reported about the Earth Quake in Japan. I will say this, do not hold your breath waiting for Japan to collapse. No one has missed a day of work or classes where I live and we are 400km from Fukushima. Radiation levels have not changed from levels recorded before the catastrophe. Production levels for all auto manufactures surpassed 50% weeks ago and are increasing daily. The disaster occurred as consumer spending was slowing in America which attenuates the impact (most likely ever so slightly). The only way we will be able to compete with the Japanese is to work like they do. Good luck with that. Why would we want to do that? Well even in the depths of a more than 10 year stagnation they are facing 5% unemployment (ACTUALLY 4.7 PERCENT UNEMPLOYMENT TO BE PRECISE). You work for your children, for the benefit of their future (like my grandparents did). There are graduates going without full time jobs and it is not great here economically but it is not horrible either. They have just weathered the bubble they had to endure. They invest massively in research and development and most importantly they work as a team. A PhD acquaintance of mine was awarded a 3 year grant (1 week before the earthquake) consisting of a 3k a month salary to support her research in support of developmentally disabled (she has a son with autism). Immediately after the earthquake she changed her research to focus on supply chain dynamics and a second focus on effective training methods in the work place. She explained that as important as her work is she will better serve Japan by changing her focus for the time being. She was not asked to do so, she felt an obligation to do so. This is what we are competing with. The island tries to kill them every ten years or so and combine that with 120 million on these resource starved islands and you can understand where the deep commitment to one another comes from. It is not like they have much of a choice. Dreaming that we will magically return to manufacturing dominance is just that, a dream. The only way that will happen is if we work as hard, as smart an with as much commitment and dedication as the competition.

#165 Mikey the Realtor on 06.04.11 at 12:06 pm

My office is by the airport and I just got word that there is a whole plane load of HAM just landing, we are picking up a bus load for viewing right away, some of them don’t even want to eat or take a little breather from the long flight. Man, this business is just too easy.

I got Desi on my team and he just sold a place for $100k over asking, all by using his amazing math skills. As they always say, math and English are the most important subjects in HS, Desi nailed both.

#166 Hoof - Hearted on 06.04.11 at 12:10 pm

A bit off topic..

Has anyone heard any rumours (or facts) about BEST BUYS solvency ?

#167 Hoof - Hearted on 06.04.11 at 12:21 pm

It’s getting too easy to go into debt, Chilton warns

http://www.canada.com/vancouversun/news/business/story.html?id=0de6cf99-b5f8-40b1-a72c-153f6b39527b&k=46947&utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+canwest%2FF261+(Vancouver+Sun+-+BusinessBC)

Some 22 years after writing The Wealthy Barber, which became easily the bestselling personal finance book in Canadian history, David Chilton has a dire warning in The Wealthy Barber Returns, to be released this fall.

“One thing we’re seeing that we never saw 20 years ago is that all sorts of people who built up their RRSP through ‘pay yourself first,’ have simultaneously built up their credit line through the back end and their net worth has changed modestly if at all,” Chilton said.

“And the worst combination in the country is a line of credit and a home renovation -once they renovate one room, the other rooms pale by comparison, so they go on to the next room and it’s a never-ending cycle of renovation as they get deeper and deeper and deeper in debt.

“The four most expensive words in the English language are ‘while we’re at it.'”

The Home Renovation Tax Credit fuelled the phenomenon and sent the wrong signal after a credit crisis that was prompted by too much private debt, particularly in the U.S., Chilton said.

“That’s like starting an alcoholic’s rehab by taking him on a pub crawl. The problem with governments is they want to get re-elected.”

#168 Dark Sad Monster Bunny on 06.04.11 at 12:25 pm

139 BDGYYC – I didnt examine your link but I have read several others with similar figures.

If you want to spend sometime on the US “Bureau of Labour Statistics” you might find it a real eye-opener. Most large US cities have very similar economies when you divide them into sectors. I found only 2 (Cleveland and Milwaukee – go figure I thought they were ghost towns) that showed more than 10% of work force in manufacturing. Most are in the 7-9% range, though they dont tell us what they are manufacturing. There are of course anomolies.

In any large city you will find fairly consistent numbers in:

-Health
– Education
– Finance/Insurance/RE
– manufacturing
– retail
– hospitality
– transportation
– public safety/admin
– construction
– professional services

#169 Imstupid on 06.04.11 at 12:25 pm

Bpoe

Ya a billion people want what you have. 300 million make less than $50 per month and 400 million are middle class in China. Sound like alot but middle class is 5-10k a year upper middle class is about 10-50k a year and that eliminates another 200-300 million people. Their are fewer millionaires in China than the USA. So if all the million plus club want Vancouver real-estate maybe it will last. The Ham money only marginally supports the market, if it’s only ham money it won’t be sustainable. The problem is when one home sells for a ridiculous price everyone and their mother wants the same price and it all falls apart. Let me ask you a question would you re-buy your home for the current market value? I know I wouldn’t buy mine back for the same price. That’s how you know prices are too far off. If you ask any home owner, regardless of their position or view of property value, I bet the majority would not re buy their home for current market value. So you ask why then don’t I sell? I bought my home at 18 and it is payed for with hard work. Its not an investment, piggy bank or anything other than an asset. Sure I stand to lose a bundle but so what I’m happy and that’s the point you can’t consider anything an investment when no price is a que to sell. My stocks have predetermined sell points before I buy. My home does not. You can think what ever you like about the market going up or down but what’s your sell point? I bet you don’t have one so if your right homes in Vancouver are going to make you a billionaire. Canada was untouched by global ressesion because Canadiens used savings and then credit to avoid losing everything. They have hit the wall and will end up bankrupt. Look at the numbers look at the rate of household debt year after year for the last decade then ask yourself this at what point does the plug get pulled?

#170 Tim on 06.04.11 at 12:26 pm

Our Government lacks the balls to do anything about it. It is too late now. Richmond is ruined. Many have been forced to leave the Lower Mainland. What kind of community does this create? You forget that, even if housing tanks, many of these Asians actually like living in Vancouver and are unlikely to sell their houses and leave. Who would want to go back to Hong Kong? It is even more congested and smog ridden than Toronto

#171 TurnerNation on 06.04.11 at 12:32 pm

Paging Whistler Dude to the blog.

How’s it looking up there? I see many Reduced Price listings in the weekly Whistler paper. Taxes are high, something like $3.70+ per square foot of house per year??

#172 April Showers on 06.04.11 at 12:33 pm

BPOE, the only uneducated person here is you. You can barely spell, and your grammar is atrocious. Vancouver WILL BE GOING DOWN, and I think it already is. You love to pick on others who say nothing to you, but you are a coward. Do you mind shooting me your email address and contact information? I will come to your offices and have a visit with you and you can give me your side of the story, and I will give you mine. I’m not scared to tell you like it is. Are you scared? Garth, feel free to give my email to BPOE if he agrees. If he declines, he is a coward and liar who has zero credibility.

#173 Ronaldo on 06.04.11 at 12:35 pm

Reminds me of the pyramid schemes of the early 70’s such as Koscot and Dare To Be Great that swept across the U.S. and Canada and sucked in many of the newly arrived immigrants in the lower mainland and around the province. This is not going to end well at all. Unfrigginbelievable.

#174 Utopia on 06.04.11 at 12:46 pm

#65 Ed on 06.03.11 at 11:43 pm

“If all these Asians are actually pulling massive amounts of cash out of Chinese banks to invest in Vancouver RE, why haven’t we heard of any runs on Chinese banks?”
———————————————————

Runs of banks? Not too likely. There are four big commercial banks there; well capitalized and with some of the highest reserve requirements anywhere on the planet. They will easily survive any real estate correction that might occur in China. Here is Wiki discussing the biggest of them.

http://en.wikipedia.org/wiki/Industrial_and_Commercial_Bank_of_China

#175 Ronaldo on 06.04.11 at 12:53 pm

#19 BPOE – “When over a billion people want what you got then your sitting pretty”.

Guess I better not rush to sell the rest of my silver then. I hear that the Chinese are buying it up hand over fist. In fact they aren’t exporting it any longer either. Problem is that unlike housing, there is only 1 billion oz. available annually and only a small percentage of that for investment purposes. Personally, my choice right now would be silver.

http://www.silverinsights.com/_pages/_statistics/statistics_1.html

#176 Hoof - Hearted on 06.04.11 at 12:58 pm

An olde rperson once told me..”The world does not owe you a living, but it owes the chance to make a living”.

This HAM has gone too far.

This can easily be twisted into a racist issue, but what we through throw curve balls at our politicians, by taking a contrarian position.

aka how are they ging to address the issues of jobs, affordability, establishing roots…….Canadian citizens are losing hope,opportunity

In other words, how and when are they going to take care of US…don’t even bring immigration into the discussion. We are simply focussing on our side of the equation which is being ignored.

This then forces them into a corner “de-facto”

I think we are at another buuble….if we continue to allow more of this HAM, Metro Vancouver will be gutted and hollowed out….the people we need Dr’s , Teachers, Tradesmen etc. will have emigrated to where housing is more affordable, and we may never get them back.

All HAM does is skew numbers…false sense of security.

Cut and reduce HAM..before its too late

#177 T.O. Bubble Boy on 06.04.11 at 1:06 pm

@ #141 Jim

Vancouver May Real Estate stats show, rising prices on rising volume and falling inventory.
Richmond up.
Vancouver up , including East Vancouver,
West Van up.
Burnaby up.
Explain?

Please look at May 2011 vs. all of the Mays from 2004-2010.

You’ll notice that May 2011 was far below most of 2004-2009 in terms of volumes.

May 2010 was actually a slow month – so beating that by a few percentage points should not be considered an indication of anything, since May 2011 was still below the 10-year average for sales volumes.
(that’s right – it was below the average for 2001-2010)

#178 10caipirinhas on 06.04.11 at 1:08 pm

Off the thread topic, but RE related nonetheless…….one of my new employees at work just moved here from BC and is looking to rent a duplex or a house for the next 5 – 10 years. He sold his property in Vernon 2 years ago, and he and his wife have about $200K in the bank. They are not going to buy here because, in his words, “the entire RE market is a house of cards and properties are only worth 50% on the dollar”. He just hates realtors.

So, he has looked at 5 rental properties this week. Because he wants a duplex or SFH he has to be careful, as the large national rental companies usually only do townhouses or apartments, so the majority of what they need is held by private individuals, or as we have sometimes called them, “accidental landlords”.

I have been coaching him on how to do due diligence and deal with the slimeballs speculators and realtors trying to rent their flipper properties and weed them out ahead of time, so he does not get caught having to move or deal with a new landlord whose motives are not in his best interests. So far, 3 out of the 5 landlords he spoke to in person turned out to be speculators holding vacant homes that they were going to list on the market as soon as they had a tenant in place with a signed lease in hand. 2 of them were realtors.

I told him to say right up front to the prospective landlord that any lease will have a clause that if the property is listed for sale either thru MLS or privately, or if the title changes hands during the tenancy, that the lease becomes null and void and he can move out with 30 days notice and no undue financial ramifications on his part. All 3 of the landlords balked “after” saying upfront that they were just loooking for a good long term tenant for their investment property which they planned on holding for the next few years……heh. 2 of them eventually admitted that they were planning to list them right away once he moved in…..and the third never said anything just that the clause was unnaceptable.

The other 2 places he looked at were situations where the landlords had no problem with the clause, but they totally misrepresented the condition of the home over the phone and once he arrived it was not what he had expected.

In his words, a lot of these places have been vacant for months according to the owners. He is amazed at the amount of vacant stuff available for rent. I told him to make sure that he asks them to see the latest 2011 property tax bill as proof of ownership and to get the legal description so he can do an online search on the Alberta Land Titles SPIN system as well.

It’s going to be a fun few weeks here at work talking with him………I’ll report back as news develops.

Got another employee trying to close on a $150K condo. He tells me yestday that his mortgage broker tells him that HE HAS TO TAKE THE $100 A MONTH MORTGAGE INSURANCE or he will lose his $2,500 depositand the loan will not go thru. Well, that is a lie and a direct violation of about 3-4 various government statutes from various branches and, to be blunt, illegal as hell. So I told him to tell his mortgage broker to F-OFF and that he is fired, as well as the appropriate complaints will be filed with Consumer and Corporate Affairs, the Alberta Mortgage Brokers Assocation, the funding bank he got approved thru, etc, etc, etc, etc……

So the guy backs down big time, gets all apologetic, but gets fired anyways.

#179 Ronaldo on 06.04.11 at 1:10 pm

#23 Desi – the Ham factor is nothing new. This has been talked about as far as I can recall. In the RE crash of 74 when West Vancouver homes fell 30% in a period of a couple months from the highs that summer, Henry Block was talking about the Asian influence on housing in the lower mainland. Same in the early 80’s recession and especially after Expo 86 which basically was the beginning of the Chinese influence on RE in the lower mainland. Heck I remember my grade 9 teacher back in 1960 talking about the Asian influence where he stated that in the future, “they will look over the fence and they will like what they see, and, they will want to come over”. It was predicted years ago. Can you blame them? We live in a great country and we have endless amounts of space. Only thing, its getting mighty expensive right now.

#180 sensitivity training 101 on 06.04.11 at 1:10 pm

to those who have lost themselves in the “ism”:

this is why “racism” is pimped in public schools, and kids are steeped in it from the earliest age.

so, that when mavericks like garth speak truth…the name-calling ultimately begins.

this is why the wealthiest individuals and companies contribute so much money and time to promote organizations and curricula that support the “anti-racist” agenda.

“racism” has been designed to crush truth, and subdivide traditional values and culture.

control-freak companies like this…makes their job easier.

geesh…just look around!

this is why the leadership of both France and Britain have declared multi-culturalism to be dead.

if only we would do the same. it is a failed experiment.

for example, you speak truth about obama…doesn’t matter! you must be racist!

you speak truth about canadian immigration/foreign ownership policies…and chinese…doesn’t matter! people are trained not to listen! you are a racist!

this is the sad state of our socialist/communist/fascist society today.

people have lost the capacity to think as individuals, but instead–due to gross levels of low self-esteem and media demoralization programs–sacrifice themselves for the perceived systemic power offered by a greater cause.

again, this is the purpose of our current public educational system–to create an entire world comprised of Hoffer’s “true believer”.

#181 Utopia on 06.04.11 at 1:12 pm

I would say one of my biggest worries when discussing real estate in Canada is that the Vancouver bubble has all the potential to reverberate nationally when it does finally deflate. I cannot imagine a scenario where a bursting bubble there does not kill confidence in home buying everywhere, right across the country. It is just too big now.

#182 egghead on 06.04.11 at 1:20 pm

Asians don’t sell. They’re moving money out of China. Period. If anything OFSI is looking for a “technical” reason to defend old Wasp neighbourhoods from a complete changeover in culture. So obvious to all that live here but those like your first poster, Anna, who is programmed to think by the CBC.

#183 BoomerBoy on 06.04.11 at 1:30 pm

#158 The InvestorsFriend (Shawn Allen)

“Our spouses debts are legally our debts… (and ladies welcome to the equality of men and women that you asked for).”

Wrong! Unless both names are on the loan as joint and several or one spouse acts as guarantor for the other. Nice touch with the blatant sexist comment too.

He is correct. Matrimonial assets and liabilities are legally shared in most jurisdictions in Canada. — Garth

#184 Iceman on 06.04.11 at 1:44 pm

Richmond, B.C., is now, officially, “toast”.

I just finished listening to real estate shrill Ozzie Jurock on Michael Campbell’s “Money Talks” (CKNW 980) earlier this morning.

I had to go back to CKNW’s archives to re-listen to Ozzie, because I couldn’t belive what he said the first time. (Go to CKNW’s site: look for the archive on 04-Jun-11 at the 9:00 a.m. hour; Ozzie starts around the 47th minute).

Ozzie and Campbell were stressing how “localized” the RE market is – depending on specific locality and housing type (condo, SFH, etc…) you can have huge variations in market conditions.

Per Ozzie: Richmond condo sales in May: “…down 53%” (…from April I assume..he doesn’t state whether this is from the prior month or the prior year).

Richmond SFH sales: “…down 61% (new?) …down 9%” (…old?).

…would the last person left please turn out the lights.

(Can anyone get RE stats specifically by city and housing type? …the GVREB only gives an overview, presumably to hide frightening statistics like those mentioned aboe).

#185 BoomerBoy on 06.04.11 at 1:55 pm

#157 Kitchener: “…A 30% decline in asset value will wipe out CMHC.”

Pure fallacy. A decline in asset (housing) value does not trigger a CMHC insurance claim. Only default can trigger a claim.

Even in the last real estate crash (late 80’s – early 90’s), the mortgage default rate rose to an all-time high of 1.2%.

People hang on to their homes in Canada, even when they’re under water.

By the way, the Canadian Bank Act prohibits most federally regulated lending institutions from providing mortgages without mortgage loan insurance for amounts that exceed 80% of the value of the home.

Quit harping on CMHC. Only the feds can change the legislation, so take it up with Flaherty and Harper.

#186 confused and a little crazed on 06.04.11 at 1:55 pm

hi guys,

haven’t posted in a while.
Well this ” Anna” is seeing a tree as opposed the forest… Garth is just reinterating all the media / realtors/ mortgages brokers/ bloggers ( here). he is choosing their words. You go to a realtor and ask him/ her what is driving the west end market. What will they answer…I mean really. to use an analogy. Try explaining Vancouver hockey w/ o using the word Canucks

113 # Lisa
i agree with you on the most part …the investors do not give a rat’s ass about whether they contribute to the community …it’s about the potiential gain in $$$ wwhich lead me into

#131 Skiptee.

“Why does the chinese investor not buy into Europe / USA when some areas are half/ 60 % cheaper than here” It ‘s b/c their property is going down..with no discernable bottom in site… whereas we are going up.

same as a stock buy it when is going down?..normally try to buy when it is going up. Hope that helps

141 # Jim,

I’n not sure your East Van / Burnaby info is that accurate. I bike and drive around those areas quite consistently and some places are taking 3 monthes to sell or not at all and March – June is peak…a few extreme price sales may skew the data but overall the market is slow because I am seeing things on a ground level/ Frontline perspective

As for me…I was priced out in 2008. So it doesn’t matter if it goes up continually…It;s a moot point. I live my life trying to do the best i can, getting some returns on stocks using it to pay rent

#187 not 1st on 06.04.11 at 1:57 pm

The chinese society is not an open book like ours in the west. We have no idea how much debt or cash they have or what the politicos are planning to do with it. The top leaders are already known to be skimming the top of this boom for their own pockets. They could also be secretly buying up a place through its ex-pats without anyone knowing. What else could be the reason?

The buying frenzy is focused on chinese investors, why is there nobody from Korea or Taiwan or Vietnam and any other asian country flooding the market? The assumption that these asian buyers are simply stupid and have no idea what they are doing doesn’t hold water. There is another driver behind this that Garth hasn’t bothered to investigate….yet.

Incredibly, I have better things to do than investigate what isn’t happening. — Garth

#188 Kitchener1 on 06.04.11 at 2:08 pm

RE my post 157

want to correct it, i see CMHC limiting insurance at 500K in the near future.

#189 Daisy Mae on 06.04.11 at 2:12 pm

Off topic….

In West Kelowna’s WESTSIDE, Jim Nielsen writes a column called ‘May I Interrupt’. Jim was a former BC cabinet minister, MLA, municipal councillor, broadcaster, administrator and health care entrepreneur. He says and I quote:

“The simple solution for the HST mess, as offered by many, is to re-instate the exemptions that were in place prior to the imposition of the HST — simple and effective.”

As it is now, low income will be bribed with a one-time rebate of $175 which is an admission that it’s hurting the consumer and we all know it. It is costing families an average $350 per year. Clark also promises to lower the HST from 12% to 10%….by 2013, and for how long? LOL

Jim has the right idea…”simple and effective”.

#190 BoomerBoy on 06.04.11 at 2:21 pm

“He is correct. Matrimonial assets and liabilities are legally shared in most jurisdictions in Canada.” — Garth

You surprise me sometimes Garth. Here is a quote from Hoyes Michalos and Associates – Trustees In Bankruptcy:

“As long as your debts belong solely to you, then claiming bankruptcy should have no impact on your spouse or their credit rating, but sometimes the answer is not quite that simple.

If your spouse has not co-signed or guaranteed any of your debts then those debts belong solely to you.”

Source: http://www.hoyes.com/bankruptcy-affects-spouse.htm

The previous question did not mention bankruptcy. — Garth

#191 Neo on 06.04.11 at 2:29 pm

Who cares? Whatever is legal tender for the next 100 years or so is cool with me. — Garth

lol…Will it be cool if you get 50 cents on the dollar for the money you are holding onto right now? Because you would take a haircut if a new currency ever did happen and you aren’t going to be getting a dollar for dollar exchange. That’s the ultimate by-product of currency debasement.

Then I shall ensure I have lots of currency. What’s the problem? — Garth

#192 Devore on 06.04.11 at 2:31 pm

#125 Love this Blog

See, this is exactly what I mean. These people are buying houses, and have no idea what they are getting into. I doubt she is putting away 1-3% annually for house maintenance, probably not even the $200 a year some here claim is all that’s needed.

The “owner” in your scenario is already looking at many thousands to dig up her basement and replace the pipes, if it’s a developed basement throw in a few thousand more, and who knows what else they will find.

Or will she try to hang on as long as she can, praying, and hope to flip to a greater fool before any problems come up (oh yeah, we put in hardwood and stainless, wink wink)?

#193 TK on 06.04.11 at 2:32 pm

A little bit of Truth from German,s Der Spiegel

Things Will Have to Change

“This is what is so disturbing about the current situation: the fact that politicians seem so helpless and powerless. They have been given a new master, and it’s not us, the people, who tend to intervene in milder ways. Rather, it’s the ruthless financial markets. The markets drive politicians even further into anxiety, weakness, incapacity and lies. Those who govern us are now being governed by the banks. That’s the situation. “

#194 X on 06.04.11 at 2:38 pm

123 – ‘Worst case scenario is that if the market goes south or interest rates rise, you will have less debt to deal with.’

You forget that in this example, what would get wiped out is the money you just put in.

#195 randman on 06.04.11 at 2:42 pm

Hahahaha

Deliverator #87

Best post in awhile…I caught that too and was just
about to post a correction…

You did it better!

#196 randman on 06.04.11 at 2:47 pm

“Who cares? Whatever is legal tender for the next 100 years or so is cool with me. — Garth”

Garth…you should care and here’s why….

Fiat ( mandated ) currencies unbacked by PM’s
have a history of 40 years life expectancy on average

1971 Nixon removed the last linkage between gold and USD

1971-2011 Checkmate!

#197 Daisy Mae on 06.04.11 at 2:50 pm

“Your second question is spurious. — Garth”

There you go again….now, where’s my Webster’s dictionary? THERE it is….

“spurious adj. not genuine”

You do this on purpose, don’t you? LOL

#198 VancouverJoe on 06.04.11 at 2:56 pm

Garth tells the truth. It has nothing to do with racism.

People of European origin are visual minority in Vancouver. Is it racism to state the fact?

Is it racism to say the truth that Chinese are not willing to learn English?

Is it racism to state that they are self-sustainable? (they have own rich and poor, own companies employees and employers) They don’t need us :-)

#199 randman on 06.04.11 at 2:59 pm

Ronaldo #175

Your understanding of economics and monetary assets
make you wise beyond your years

I too have been accumulating the white metal

Unfortunately lost it all in in a terrible boating accident
on Oakanagan lake! :)

#200 supermike on 06.04.11 at 3:01 pm

As long as the Canadian government still allows Chinese people to buy houses in Canada, the housing price will go much higher.

Here are the reasons:

1. Chinese people are really really crazy about RE because of the super crazy Chinese housing market. From 2001-2011, the housing price increased around 10 times in China. Most of the Chinese people have been actually priced out. “Buy now or never” is true in China. And People who purchased apartments(there are actually not many houses in China, houses are for rich people only) years ago got very rich.

You might say this is only “house rich”. however,China is different from Canada. There are no laws to protect tenants. And there is rarely public housing. If you didn’t buy years ago, your life is miserable now because renting is really really not a pretty thing to do in China.

As a result, for 10 years, the crazy Chinese housing market has been telling Chinese people two things: buy now or never, housing price will never fall.

That’s why Chinese people will grab whatever houses they can afford, as many as possible. They won’t listen to anybody unless you don’t allow them to buy!

2. There is a term “Naked Official” in China. Lots of corrupt officials stay in China alone to continue to collect money in whichever way they can. Their wives and kids are living in other countries such as Canada, US, Australia…Many buyers in Vancouver and Toronto are those rich wives and children. They recklessly buy houses without even asking prices. They “robbed” money from average Chinese people so easily that they don’t care about money any more. Also, they desperately need to move their money out of China. Housing market is good for money laundering.

3. Most of the rich businessmen don’t feel secure in China. A recent survey showed that more than 50% of the rich businessmen in China plan to emigrate, at least their wives and children. not mention those who already did.

Those people are very rich and they are able to push the housing price much higher in certain areas in Canada.

The population of China is 1.5 billion. Most of them are not that rich at all, especially those 1 billion peasants. However, there are already 75 millions super rich Chinese with strong powering even if 5% of the population is rich.

In addition to those super rich officials and businessmen, the first thing those average new immigrants from China want to do is buy a house in Canada.

You won’t even believe how they buy houses. They bought houses 1-2 weeks after they landed in Canada! Even before they recovered from jet lag!

As I said, housing price is crazy in China. In some biggest cities in China, such as Shanghai, Beijing, a 3-bed apartment is worth 500K-600K CAN dollars. Those newcomers can easily buy a house here if they sell their apartment in China. Canadian houses are bargains for them. That’s why they bought houses here without even thinking about it.

So, if the Canadian government still allows Chinese people to buy houses in Canada. The bubble will be getting bigger and bigger for awhile! And Garth will have to keep telling people who bad the bubble is in next 3-4 years!

#201 Devore on 06.04.11 at 3:17 pm

What you see: Hey, Debbie, your basement smells like sewage again.

What they say: Yeah, well, happens to all houses in this area cause of the grade. Johnny will get around to fixing it eventually, he’s been busy at work lately you see, with all that overtime. For now we just mop it up and spray some baking soda around.

What they think: Oh god, we spent half a million, and all we got is this tear down shack we can’t afford to tear down. This never happened when renting. I hope in a year when prices go up 10% we will finally have equity and will take out a HELOC to fix the basement. Maybe in 2 years, next year is our anniversary, we’re going to Hawaii.

It’s funny, if this was a renter whose basement (sorry, garden-level) suite was flooding with crap, all the idiots here would be laughing, but amazingly “pride of ownership” requires you put up with bullshit a renter never would.

Of course, they could have bought a new-ish glue-shack in Milton or similar, a death trap firefighters won’t go into that comes with a two hour commute, but who said the Ameri… err, Canadian dream wouldn’t come with some sacrifices, like having to wake up at 5 am every day for the rest of your working life. We’re building equity here, not throwing our money away on rent like those fools!

#202 DM in C on 06.04.11 at 3:23 pm

Off topic, but RE story;

Went to look at a foreclosure property yesterday. In Calgary, seems there are a lot. In ‘most desired’ Tuscany no less.

Bank listed ‘as in, where is’ which I thought meant grow op — nope, just a pig of an owner who ripped everything out when he left — but left the dog crap.

Holes in the walls where he ripped out the stove fan, burn holes in the carpet, mice holes in the insulation in the basement. Chew marks on the trim where he let his dogs cut their teeth. And yes, it was the owner who did this, not a renter.

Probably $30k in remediation, cleaning and replacing floors. And the bank is asking $380k.

Not worth it. I don’t even think it’s worth it to low ball and spend my time fixing it up — even though it’s within the 3-3.5x salary affordability ratio.

I’ll keep my money, thanks.

#203 Chris L. on 06.04.11 at 3:36 pm

Amazing how people think talking about a race is racism. Seriously? Reading comprehension isn’t a strong skill for some people.

#204 realpaul on 06.04.11 at 3:48 pm

As far back as a year ago I pointed directly at the HAM phenom in Vancouver. I was told that the problem didn’t exist by the mainstream naysayers who collectively sighed that I couldn’t prove. So now that it’s headline news……why is everyone surprised? This is not a new issue.

I should point out to the numbskulls in the PC camp. These Chinese buyers are foriegn nationals…….this is a matter of citizenship rights and not a ‘racial issue’.
China is a separate country…….it is not a right for Chinese nationals to own real property inside Canadian borders. The fact that foriegn buyers from China are massing in ever growing waves in the real estate market is not a racism issue….it is a matter of national capitulation to an already glaring problem within the boundaries of Canadian citizenship rights and privelages.

Canada has become a scapegoat and an escape valve for the nasty Communist Party of China. Canada should not be alleviating the political problems of the Chinese by allowing an entire population of religious disidents and religious zealots to settle here in the first place.

It is a well known fact that the corruption in China’s bureaucracy is ubiquitous. Every civil servant, bank manager, political figure, police official that has access to government funds or is in a position to solict graft has their eye on Canada as a place to freely launder the money they steal. As one immigration officer in Beijing said about the commonality of wealth holdings by applicants with seemingly inoquous jobs withing government and middling position…” The civil servants seem to have amassed an unusual level of personal wealth.”

I will weather the cat calls and ad hominem attacks again I’m sure until these facts also become mainstream.

#205 bridgepigeon on 06.04.11 at 4:23 pm

163 Gord, Having done business with the Chinese community for many years, I disagree with the immediate returns notion with Asian speculators. I find this group in general to be way more long term focused on providing for future generations than average Canadians. A lot of the farmland north of the GTA is being bought by the Chinese. This land won’t be developed for many many years but it’s safe and Toronto will continue to expand. At the casinos or racetrack however, all prudence goes out the window…
164 Mr. Buyer, Better we have this conversation in a year from now…good luck with your move, naturally I think it’s a good idea…

#206 TurnerNation on 06.04.11 at 4:32 pm

#154, some of the junior blog dogs are still learning: “Never pick a fight with a man who buys ink by the barrel” as the old saying goes. ;)
(Not certain to whom this is attributed.)

Remember, the view never changes unless you are the lead dog. :-D
Lead, follow, or get out of the way.

#207 Hoof - Hearted on 06.04.11 at 4:38 pm

#183 egghead on 06.04.11 at 1:20 pm

Asians don’t sell. They’re moving money out of China

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

Dirty money, laundered, or made off the backs of exploited countrymen and patriated elsewhere is the equivalent of fiscal AIDS…it has worse karma than hospices on university campuses.

Shut the door before its too late.

#208 TurnerNation on 06.04.11 at 4:51 pm

I think the safest currency in the world is…

Canadian Tire money! It never loses its purchasing power vs. the Canadian dollar (5c of CanTire money will always be worth a nickel).
And CanTire money is only issued against real transfers of funds (cash back on purchases).

How about it, as a viable retirement strategy, hoarding CanTire money? :)

#209 Veej on 06.04.11 at 5:06 pm

#121 Neo

There are 1.1 million millionaires in China. It’s 2011 dumbass.

http://www.bloomberg.com/news/2011-05-31/china-s-millionaires-jump-past-one-million-on-savings-growth.html

#210 Veej on 06.04.11 at 5:12 pm

Not that he will ever do anything about it based on his homepage (frigging sell out, thanks for ruining BC), but it sure feels good to email him letting him know what a shitty job you think he is doing as immigration minister.

http://www.jasonkenney.ca/

#211 The InvestorsFriend (Shawn Allen) on 06.04.11 at 5:20 pm

Dear FIAT Currency nutbars (yes you):

Do you actually have any money in the bank to worry about?

Most people spend their pay check every two weeks and so inflation is not an issue there. Most people have no cash deposits in the bank nor do they own bonds or GICs and therefore nothing to worry about there.

Most people have debts and inflation (currency debasement) helps debtors.

If you have your wealth invested in real estate (which may be bad for other reasons) or in Canadian companies (stocks) your wealth is not invested in fiat currency.

A company making a widget at a cost of 50 cents and selling it for a dollar can do so whether the currency is dollars or donuts or scheckels. Inflation has little impact there.

Nutbars, unless you have actual wealth tied up in dollar bank deposits or GICs or bonds, you have nothing much to fear from currency debasement. The only real worry is when you invest in long-term bonds in which case inflation could hurt you a lot.

Now get out there and grab some of that fiat money and stop the worrying.

#212 SAD on 06.04.11 at 5:23 pm

There are also many foreign investors from India and Israel and now those countries with social unrest. The condo market in Canada is looking very attractive to people who live in far away places looking for a safe haven. New single family starts are way down in Ontario and B.C. Land prices in Ontario and B.C. have made SFD’s available only to well off people. This is one unhealthy market that cannot be determined based on previous patterns. With construction making up 20% of the G.D.P. no one should wish for a crash. H,F and C dreamed this game up to keep our economy going. Let people get in big time debt to keep the numbers looking good. Unfortunately the train is now on a runaway course. Social Darwinism at its best. They could of let the air out the bubble last winter but that would not get H and F elected now would it.

#213 The InvestorsFriend (Shawn Allen) on 06.04.11 at 5:27 pm

BoomerBOY 184, okay so your wife’s credit rating won’t be affected by your bankruptcy as such but I suspect you won’t be allowed to go bankrupt on your own without her if she has much money.

Anyhow she is still going to go off and look for a man after you go bankrupt, don’t you think?

If you don’t have enough money to pay your bills and your wife has the money then maybe ask your wife to increase your allowance.

#214 allister on 06.04.11 at 5:27 pm

So everyone thinks it rich Asians playing Real Estate Roulette – well read this.

http://www.financialpost.com/personal-finance/family/Debt+heavy+couple+liable+fall+victim+interest+rate+squeeze/4868571/story.html

#215 vyw on 06.04.11 at 5:33 pm

The tone of this article is unfortunate. Replace Chinese with pro hockey players, movie stars, dot-com millionnaires….would there be an issue here? About 30,000 Chinese immigrate to Canada every year and some will check out real estate and schools before making the big move.

The impact of Asian buyers was flagged months ago but their impact is felt now especially at the high end of the market, raising average prices. Here is the May 2011 report: http://www.rebgv.org/housing-price-index?region=all&type=all&date=2011-05-01.

The higher prices are localized in Richmond, Vancouver West-side and West Vancouver – and the number of sales are low ie. about 400 detached homes. Actually a number of other areas have seen no price increases and real estate prices are stable.

But there are some other factors here – and they’ve been flagged on this blog before. The lower number of listings is instructive. Homeowners moving up in this market will be very cautious. Why not stay put if the house price rises by 10%. If the property is worth $800K, that’s $80K in a year, better than preferred shares.

A related issue is the intergenerational shift in assets as the boomers assume the assets of their parents including houses that have already been paid for. Some boomers will choose to keep their parents’ house – either move in or rent out.

Finally there is the impact of interest rates. The big shift downward in house prices in 1982 and 1990 was caused by interest rates, and it took a number of years for the market to recover.

So what’s next? The heck should I know? My best guess is increasing prices for the near term due to strong demand, fewer listings and low interest rates, factors that can change in an instant.

#216 supermike on 06.04.11 at 5:41 pm

#203 Hoof – Hearted on 06.04.11 at 4:38 pm

Asians don’t sell. They’re moving money out of China

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

I totally agree.

There are certainly speculators from China. However, most of those Chinese buyers just desperately move their money out of China! They won’t sell soon because they are pretty rich. They don’t need cash any time soon. And the experience of last 10 years in China just leads them simply think RE is the best option for their money to park.

As I said above, 5% of Chinese population is 75 millions powerful buyers. twice the population of Canada!

So the government has to do something before things get too crazy.

Yes, all bubbles burst in the end. The question is when? 10 years later? 20 years later? If our government doesn’t do anything, the bubble can get way bigger with tons of money people are desperately trying to move out of China.

#217 Trailer Park Boys on 06.04.11 at 6:00 pm

Yeah..

We are thinking of asking Harper for a Gov’t hand-out..err…” Federal Stimulus Project “.

If we can convert shopping karts into some sort of Prius, we can solve 110% of the Maritime unemployment. Then we can sell hooch futures…

As a Bilderberg bonus, if we can train lobsters and cod to run a treadmill…what can we say…world is saved and we get the NoBull piece prize….

#218 Coho on 06.04.11 at 6:01 pm

It’s interesting this sensitivity to terms like yellow skinned man and oriental, but there’s no public outcry for bombing brown skinned people on the opposite side of the planet which have done nothing to us.

What do they call the quarter mil a pop missiles we’re unleashing on the Libyans? Freedom Phallic Series 1? Liberation Lobber Series 2?

But like the USA, when London says “Jump”, we ask “How high?”

#219 Trailer Park Boys on 06.04.11 at 6:13 pm

We think if we lobby for another railway…like Van Horne …..we can solve the problem,

We get all the money launderers to park their BMW’s , Lexus’s and Mercedes. and jpoinf the chia gang.

We build another railway….from Vancouver Island to China….that floats….

We know Pierre ” Burton”/” Trudeau ” referred to Canadian unity as the result of QUASI-spaghettti strands of steel imbedded in wooden crucifixes.

Let’s go the the next generation…

#220 Cognizant on 06.04.11 at 6:23 pm

I would say judging by this chart the VAST majority of Chinese RE buyers in Canada are putting their ENTIRE net worth into moss covered shacks.

http://www.zerohedge.com/sites/default/files/images/user5/imageroot/shirakawa/Global%20Wealth%2014.jpg

#221 Siddelly on 06.04.11 at 6:36 pm

#83 Utopia

Of course you are free to request 200 or 500 grand as your deposit, but the crucial part is getting the words Non Refundable Deposit written on the contract with all parties signing. You can easily weed out the potential flippers and time wasters with this legal wording. How much is your time worth in this casino?

#188 not 1st

We don’t want to seem like paranoid conspiracy theorists, but if we were rich mainlanders and needed a way to get some wealth out of China all the while knowing there was a yearly limit of around 200,000 dollars and we knew of a city where some of our extended family have moved to over the years, and coincidentally had a junior equities market that was known to be easily manipulated with come and go penny stock corporations, we may just say to ourselves-HMMMM……….
Lets say we register a company on the venture exchange that does business in Manchuria, lets call it “The Edible Sino Seaweed Corporation”, This company will legitimately need operating funds in both countries as well as having officers and employees flying back and forth ” doing business”. Perhaps this outfit might like an office at 11th and Camosun. The accountant wouldn’t have a problem proportioning off the kids study area from the filing cabinets I would think. Its done in business all the time. If the secretary doesn’t speak English there really is no problem! He can just hand over his iphone whereupon his trusted associates will translate all enquiries for him. Hit the Easy button!

I’m sure there are many variations on this theme, and in the end it won’t stop the crash, only exacerbate it.

#222 Daisy Mae on 06.04.11 at 7:13 pm

SwampLily on 06.04.11 at 11:13 am#1 “Anna, look up the definition of “racist.” No one here is saying that he or she believes any race to be superior to another. Talking about what the Chinese are doing does not make one “racist.” Oh brother…”

Exactly. Absolutely stupid talk.

#223 Cory on 06.04.11 at 7:37 pm

I remember when houses were all boarded up in Richmond in 1996. Grass and weeds were up to the windows and all of the Chinese who had bought them packed up and went home. Just left the houses to rot.

Gee, I wonder if it could happen again or is it different this time?? lol

#224 Nostradamus Le Mad Vlad on 06.04.11 at 8:34 pm


NEWSFLASH: “Matrimonial assets and liabilities are legally shared in most jurisdictions in Canada. — Garth”

And now — Subject: Today’s Economy

I walked into my bedroom and see my wife packing a suitcase.

I asked, “What are you doing?”

She answers, “I’m moving to Nevada. I heard prostitutes there get paid $400 for doing what I do for you for free.”

Later that night, on her way out, my wife walks into the bedroom and sees me packing my suitcase.

When she asks me where I’m going, I reply, “I’m coming, too . . . I want to see how you live on $800 a year.”
*
#75 aussiescott — “. . . what happens when the “HAM” runs out, . . .”

Not to worry. Upon departure of HAM, a mega-quake (9.5 or higher) complemented by a swashbuckling tsunami will sink everything just past Hope, effectively leaving the Okanagan basking on the beachfront!

#85 Chaos — “Are we there yet?” — Well, I’m here so don’t have to go anywhere to get here. What about me? You’re in fine shape!

#110 X — “. . . the HAM would pull out in droves.”

Not necessarily. To whom would they sell their homes to? A lot of older, ‘wealthy’ Chinese simply pass their paid-for homes to their children, bypassing realtors, lawyers and the like.

But as said elsewhere, the current generation is an ‘instant-gratification’ group, and it is unlikely they will be able to sell pronto.

#116 boom boom bust — HA HA HA AH HA HAH AHAH HA HA HA! Oh dear, I’m exhausted.

Next lifecycle, arrange to be a politico — learn lotsa bafflegab jargon, spew forth wrong numbers and guarantee everyone everything!

Probably won’t live long enough to see how it all doesn’t work out, but it’s a bunch of laughs!

#138 eddy — Good link. They are a bunch of leeches, sucking taxpayers dry the world over. Do the same what France and the US did with their revolutions — toss ’em in the trash!

#134 allister — “. . . its stupid Canadians doing the RE inflation, . . .” — True, because it leads to this — #142 American Werewolf — “No one knows the real stats on the HAM story, and no one even knows how legit all this money is.”

That is the most accurate statement I have read to date on HAM — No one knows. The rest is pure conjecture.

#167 Hoof – Hearted — Great post. I remember The Wealthy Barber and all the helpful tips it had. Glad to see an updated version is coming out.

Boom, Bust and Echo is another one, the same rinse – repeat cycle we are currently going through. Excess and unnecessary debt levels will kill any hope of a recovery, regardless of who is in power in Ottawa.

#183 egghead — “Asians don’t sell. They’re moving money out of China.”

True, but if they are moving their money to a more ‘stable’ country’s economy, which — if any — country provides the most stability? Iceland and NZ (sans the ‘quakes) are pretty good, the west, Africa and middle east countries are basket cases, so there isn’t much left to choose from.

#219 Coho — Correct. It’s a convenient double-standard for the politically-correct jackasses to use, when it suits their needs. They can go screw themselves. No doubt they’ll enjoy it!

#225 Ben on 06.04.11 at 8:34 pm

Nice catch!

http://www.wimp.com/barehand/

#226 Mister Obvious on 06.04.11 at 8:36 pm

216 vyw

The tone of this article is unfortunate. Replace Chinese with pro hockey players, movie stars, dot-com millionnaires….would there be an issue here?

The ‘issue’ would remain unchanged. Assuming all other factors were equal, it would still be prudent to closely examine the phenomenon.

#227 TurnerNation on 06.04.11 at 8:39 pm

We knew this. We will fall to the standards of Mexico (or Greece):

Leaked U.S. cable lays out North American ‘integration’ strategy

The cable, released through the WikiLeaks website and apparently written Jan. 28, 2005, discusses some of the obstacles surrounding the merger of the economies of Canada, the United States and Mexico in a fashion similar to the European Union.

http://news.nationalpost.com/2011/06/02/leaked-u-s-cable-lays-out-north-american-%E2%80%98integration%E2%80%99-strategy/

#228 realpaul on 06.04.11 at 8:49 pm

The end of taxpayer funded stimulus has reintroduced ‘Mr Market’ to the US housing sector.

‘Falling faster than during the Great Depression’.

http://www.independent.co.uk/news/business/news/us-house-price-fall-beats-great-depression-slide-2291491.html

A Canadian can only wonder if our own phony price regime will fail when the CMHC debt is publicly recognized as the lynchpin of the entire country’s economic bust. The IMF and OECD have chastised Canada publicly for allowing debt levels to rocket out of control……………..how long do we have until the national debt goes on the critical list with the PIIGS.

The throne speech spoke of the deficit being ‘balanced ‘ by 2014……Hah !!!! The deficit is merely the current spending less a few redunancies and fancy dancing by the fed accountants. The national debt continues to skyrocket. You can only pay 100% on the debt service and the game is over. Its not like there is any wriggle room on rate reductions….they’ve already screwed that pooch.

I see a Paul Martin hail mary coming…..thats where deficits are ‘eliminated’ with massive increases in taxation and a redirection of debt to the local governments…which means….right you are…..higher taxes on property…local fees and services….etc etc etc.

#229 Raj on 06.04.11 at 9:15 pm

I don’t know who’s buying, but damn they are aggressive.

I put an offer on a house below asking (which was a bold move indeed), and the owner signed back at asking price.

Anyways, let’s just say that someone else decided to put in an offer, hence a bidding war ensued, of which I didn’t want any part of, so someone else won the property.

Anyways, they backed out after the inspection, so I was offered to re-submit a new offer. I obliged, again below asking price (what was I thinking yet again). Anyways, seems like another bidder came aboard, and put in a firm offer. I actually wanted to do a home inspection, what’s wrong with me right?

I should take on a lot more risk shouldn’t I, after all, I’m the buyer and the person taking on a boat load of debt.

Anyways, I lost round 2 as well, seems like people have a high risk threshold, even though I ended up bidding more than asking (but with an inspection condition on a home 50+ years old).

It’s nuts out there, and I’m not talking about Vancouver and those so called yellow people. I’m talking about Mississauga and all of the multi-colored people walking around.

#230 Patz on 06.04.11 at 9:26 pm

Garth, racist? I think not. Racism resulting from HAM and all the chatter about it. Possibly. But people anywhere do what they do to make their lives better—as they see it of course.

In the absence of hard stats we can only guess at the real effects of mainland Chinese in the market. But their is some evidence that the biggest cohort of Asians are professionals and entrepreneurs who come with their families, then leave the wife and kids here while they go back to their job or business because they could not make here what they make there.

If that’s true they are not only distorting the housing market they are a drag on our social economy, education, health care and infrastructure. Because their primary earners are not paying taxes in this jurisdiction. Is that their fault? No. It is up to our governments to figure out what’s going on and fix it. Policy.

I don’t have the answer ’cause I don’t even know if it’s a problem. But it sure looks like we should be finding out. And who should we be encouraging to immigrate? Rich anybodies who go right back home, or people who’ll work here and contribute their skills as well as their share of taxes.

#231 Imstupid on 06.04.11 at 9:37 pm

217 Supermike or stupid mike

Where do you get your numbers from? 75 million rich people in China. Where is that number coming from. Here’s a link according to bloomberge about that number and it pegs the number at 419 000. It’s from 2008 but I don’t think it went up 74.5 million since then. So check your facts before posting.
http://www.businessweek.com/blogs/eyeonasia/archives/2008/07/china_now_has_m.html

#232 Joe Realtor on 06.04.11 at 9:51 pm

#203
Generally speaking, “as is, where is” is standard operating procedure for bank-owned foreclosures or power of sales.

They want to unload the property while mitigating their losses with no liability or possibility of the new owner coming back at them for anything.

I’ve seen many properties like the one you described, that are trashed by the owners. One was at the Palace Pier in Toronto. The owner in default took everything he could (toilets, kitchen cupboards etc) and trashed what was left. It looked like a crack den.

#233 Neo on 06.04.11 at 10:17 pm

Who cares? Whatever is legal tender for the next 100 years or so is cool with me. — Garth

lol…Will it be cool if you get 50 cents on the dollar for the money you are holding onto right now? Because you would take a haircut if a new currency ever did happen and you aren’t going to be getting a dollar for dollar exchange. That’s the ultimate by-product of currency debasement.

Then I shall ensure I have lots of currency. What’s the problem? — Garth

********************************************

Your right Garth. If you live another 100 years you have nothing to worry about. (-:

#234 Neo on 06.04.11 at 10:29 pm

#210

Hey dumbass. My point was there isn’t one billion chinese capable of purchasing million dollar real estate in Vancouver as BPOE said.

1.1 million vs 670,000 is a rounding error as a percentage of 1 billion people.

Thanks for pointing that out though Poindexter.

#235 Onemorething on 06.04.11 at 10:37 pm

That my friends is why I no longer live in Canada.

Garth is bang on with this and the tail end of Asian investors are placing their bets!

I will say this again and again that when China RE get’s hammered the money always returns home where the Mainland, Hong Kong or Singapore who will take the brunt of the next RE downturn will leave Canadian cities wondering!

Smart investors have been out for almost a year now.

If you havent sold by now your done kiddies!

NOS LMV, I also agree with your statement below to a forumer. The first statement is what the MSM will deliver, the second will be the reality of it.

#110 X — “. . . the HAM would pull out in droves.”

Not necessarily. To whom would they sell their homes to? A lot of older, ‘wealthy’ Chinese simply pass their paid-for homes to their children, bypassing realtors, lawyers and the like.

But as said elsewhere, the current generation is an ‘instant-gratification’ group, and it is unlikely they will be able to sell pronto.

#236 BPOE on 06.04.11 at 10:45 pm

Folks, it’s not just Asia that wants Vancouver it’s the WORLD. P.S who cares about grammar when your getting RICH
More bull from the american I see posted. Typical american, jealous of Canada’s success
_______________________________________
“At what point does the Canadian residential RE market become ripe for an even BIGGER collapse than that which occurred (and continues) in the US?” In answer to your question, Canada has already exceeded that point. Why, its all the talk inside the global banking realm right now and it is fully understood it is going to be horrifically ugly. It is, however, no longer the talk of health and good standing, but instead it is the the biggest concern on many people’s minds

#237 Where's the money Guido??? on 06.04.11 at 10:47 pm

Re: #117 bigrider on 06.04.11 at 7:57 am

Look, with all this HAM in Vancouver, at least we know there will be a plethora of jobs for blackjack and baccarat dealers.

I predict the opening of at least 10 new casinos over next ten years. Great revenue for BC !

I beg to disagree, there won’t be more casinos because all the games will be on the net. Less overhead…

#238 Lost the taste for RE on 06.04.11 at 10:48 pm

#127 Borrow as Much as you Can — yes, your wife is on the hook too — for EVERYTHING that you’ve borrowed. Even if she leaves and divorces you tomorrow, she’s still liable. Hell, they can come after her for the total amount of debt.

Remember that scene in the early part of the 1951 version of Scoorge (Christmas Carol) when the man Scrooge lent money to can’t pay it back and exclaims, “I can’t take my wife to a debtor’s prison!” He could choose to leave her behind. You can’t.

Didn’t anybody ever tell you the “facts of debt”?

Honestly!

#239 BPOE on 06.04.11 at 10:50 pm

Another point lost on the american amongst other naysayers.
_________________________________________
213 SAD on 06.04.11 at 5:23 pm
There are also many foreign investors from India and Israel and now those countries with social unrest. The condo market in Canada is looking very attractive to people who live in far away places looking for a safe haven

#240 BPOE on 06.04.11 at 10:53 pm

The year 2015
Garth: This bubble is out of control and must burst
The american: My tellar friends in banking say Canada is over priced

Reality: Hey up another 20% in the last 4 years

#241 JohnnyBGood on 06.04.11 at 11:09 pm

#130 The American on 06.04.11 at 10:17 am

While my question was more rhetorical in nature, I do appreciate your response and the stats and links you provided.

“Why aren’t Canadians aware [of the bubble]…?” Like all bubbles, it doesn’t look like one to most of the people inside of it.

#242 poco on 06.04.11 at 11:28 pm

#209 Turner Nation
I think the safest currency in the world is…
Canadian Tire money! It never loses its purchasing power vs. the Canadian dollar (5c of CanTire money will always be worth a nickel).
And CanTire money is only issued against real transfers of funds (cash back on purchases).
How about it, as a viable retirement strategy, hoarding CanTire money?
______________________________________________
not so fast–good for a laugh

http://www.badeconomy.ca/corporate/277-canadian-tire-money-may-collapse-soon

#243 SP on 06.04.11 at 11:34 pm

#1 Anna

Your comment is naive. Racism is embedded into the psyche of any multi-racial society. Take a simple thought experiment and imagine the so-called Heroine Brigette DePape (or Marcelle) were of Black, Native or heaven-forbid Arab descendant born in Canada, do you really think that Canadian would have responded positively to such defiant act? She would be under investigation and charged with treason. This is Canada. Learned to live with it.

#244 Nostradamus Le Mad Vlad on 06.04.11 at 11:35 pm


Dictatorship Only in Canada, you say? Pity! Plus this.

Globalisation “In Germany, this is what politicians are hearing from their citizens today: “You spent billions to rescue the banks, and now I’m supposed to be footing the bill? Forget it!” Plus NAU. NAU We’re screwed, 95% of us.

Japan Exports of green tea banned. Fukushima Edgar Cayce had a lot of hit – miss predictions / prophecies. Japan seems to be one the hits, as the greater part of the country will sink. Part of earth’s changes, incl. the Canary Islands volcano / tsunami.

Bilderberg 2011 Further tax hikes, MM (more mayhem) and other BS. Walmart intent on wiping out small businesses. BoA Tables turned! Good for the couple! Three min. clip of the preceding. 10:41 clip Silver manipulation and the coming shortage.

McDonalds Fifty per cent of all new jobs in the US last month came from one source, and US jobs two. Transfer of Wealth Labor’s share of the money pool has shrunk to its lowest level ever. QE3? Oui, s’il-vous-plait!

Welcome To Our Nightmare! Now TSHHTF, it’s party time — let’s get blasted! Fury, UK loony tunes and US toppling. No Moolah in La Mancha to pay wages.

E.coli Biowar The elite are in full swing by poisoning Europe’s food supply. No doubt they get their grub elsewhere. Genetic Engineering “So, US scientists were weaponizing E. Coli back in 1986. Having failed to convince the world that Iran is a nuclear threat justifying conquest, is Iran about to be framed for a biological false-flag attack?” wrh.com. Another take — E.coli caused by GM crops running rampant. GMO’s — Another form of depop. using build-in diseases?

7:43 clip HAARP — This is what it’s for.

#245 kitchener1 on 06.04.11 at 11:42 pm

#186 BoomerBoy

wait and see,the feds are sitting very uneasy about the whole mess.

A friend of mine who is a mortgage broker recently informed me that there were just rumors floating around that the Conservative majority might be changing the rules again. like i siad , just rumors.

CMHC was set up to help first time home buyers.

1.2% default rate, thats a pipe dream if the market ever turns bad– 1980/82 was before 0 percent down, before CMHC would insure u with 5% down. the game has changed, there is a lot of leverage out there in RE. I will even say that never before has an asset class in Canadian history ever been as leverages as RE.

The US is NOT recovering, it is are biggest trading partner, thats bearish for all equites including RE

#246 vyw on 06.04.11 at 11:52 pm

#227

What’s to examine here?
Foreign nationals buying property in Vancouver? Is there a new story here?
As in any other jurisdiction, more buyers will tend to up the bid. When these buyers leave – #224 makes a good point about the late 1990’s when the HK Chinese (who were also blamed for rising prices in the late 1980’s) decided to leave – prices will correct.
Alot of local homeowners won’t list for fear of being shut out of a rising market – they’ll just end up as spectators in this market – nothing will happen to them. So what’s to examine here?

#247 poco on 06.04.11 at 11:57 pm

#203 DM in C
Went to look at a foreclosure property yesterday. In Calgary, seems there are a lot. In ‘most desired’ Tuscany no less.
Bank listed ‘as in, where is’ which I thought meant grow op — nope, just a pig of an owner who ripped everything out when he left — but left the dog crap.
Holes in the walls where he ripped out the stove fan, burn holes in the carpet, mice holes in the insulation in the basement. Chew marks on the trim where he let his dogs cut their teeth. And yes, it was the owner who did this, not a renter.
Probably $30k in remediation, cleaning and replacing floors. And the bank is asking $380k.
Not worth it. I don’t even think it’s worth it to low ball and spend my time fixing it up — even though it’s within the 3-3.5x salary affordability ratio.
______________________________________________
you might be suprised at how low some of these foreclosures eventually end up selling for — keep an eye on it and watch for price drops–it could end up being a steal—
i know a couple of tradesmen who target foreclosures like you describe–pick them up cheap–redo what’s required to bring them up to snuff for resale–they don’t make a fortune but keeps them going–they always list lower than their competition and have good success—court system is slow though

#248 OV Renter on 06.05.11 at 12:52 am

HAM & Leased Vehicles….. i am in the automotive leasing business in Vancouver, i know for a fact min 75% of all Beamers & Mercs are LEASED

Go Canucks Go!

#249 poco on 06.05.11 at 1:17 am

#186 BoomerBoy
People hang on to their homes in Canada, even when they’re under water.
______________________________________________
Sorry to burst your bubble but that’s not true anymore–there is a new breed that bought in the last few years amongst all the hype of RE prices only ever going up and have now realized the errors of their ways—-they are now listing their properties for what they paid or less–if everyone did a little research you’ld see the same thing i do
v878269-bought feb08-225k–sold 220k–condo
v877797-bought sept09-340k–sold 322.5k–condo
v870862-bought mar06-195k–sold 183.8k–condo
v870619-bought-june08-375–sold 347–sfh
v875452-boughtdec09-326k–sold 310–condo
v870106-boughtjune08-360k–sold 343.5–townhouse
Check the purchase dates—where did the equity go???
can anyone on this blog afford to lose the amount of money these owners did???
these are but a few of the many homeowners who got out of a declining market and had to bring a cheque to closing or lost their down payment in just a couple of years of home ownership and now find themselves in deep dudu–do you think they’ll be buying again soon???

I am quite confidant from my research into the tri cities area that there are hundreds of properties that are listed or have sold for what the owner paid or less or within 15k of what the owner paid in the last 2 to 3 years–again do you think these owners, after selling their property at a loss, will be buying soon????
I use within 15k —realtor fees– property purchase tax–legal fees= underwater

All the posters who still can’t see that parts of this country are in a steep housing decline better open up their eyes and do a little homework because you’ll never see it listening to your local RE board or Global TV

This is just the beginning–it is going to get a lot worse
condos are toast–townhomes starting to slide–when the SFH prices start declining in larger numbers–2008 may just look like a cake walk

PS–after the roar from the partiers dies down (Canucks win) and i head off to bed –i hear that familiar sound i’ve been hearing for about a year now in the tri cities–does anyone else? it sounds like this –hhhhhiiiiiiiiiissssssssssssss

#250 tran, Calgary on 06.05.11 at 2:35 am

Canada should learn from Singapore on how to handle foreign investments in real estate.

#251 rifles on 06.05.11 at 3:29 am

So how do you know the Chinese influence is all, or even mostly, HAM? Maybe it is PAM (Permanent Asian Money)? After all if you are mainland Chinese and faced with a shonky and whimsical dictatorship (See Ai’s recent arrest) Vancouver with it’s climate (I know, I know), good schools and heavy Asian community influence looks like pretty good relative hedge against thinkers going tits up in Shanghai. Whn you consider the alternative from a Chinese perspective – ie prices in HK or Shanghai – Vancouver does not look bad value for money (however strange/fictional most of us would find that concept when viewed fom a local perspective)

#252 Mr Buyer on 06.05.11 at 4:18 am

My wife just told me this afternoon that radioactive iodine levels have risen in Kelp and Sea Weed harvested here on the the Sea of Japan coast. She does not pay close attention to numbers cited in news stories but from what I can understand presently the levels have risen but are still well below critical levels. The Japanese will most likely not be eating any of the seaweed from the central and northern coast of the sea of Japan. This means water born contamination has made its way from the east coast to the west coast now. This news will kick the heck out of Japanese food imports now but they are a really minor export anyways (this even though the levels are very very low but who wants to eat something they know for sure is radioactive). This has got my wife pressuring me again to get a place in Canada. She will calm down tomorrow. Too bad though because we use seaweed everyday to make sushi, miso soup and a host of other stuff. We are going to have to pay a few yen extra to buy sea weed from other prefectures in Japan. What will likely happen eventually is that elevated radioactive iodine levels will be found in seaweed up and down both coasts. The wife absolutely will not go to the beach even though sea water radiation levels are unchanged from before the disaster. Guess we are swimming in community pools all summer.

#253 BrianT on 06.05.11 at 7:27 am

#246Kitchener-Re CMHC being set up to “help first time home buyers” that was the spin. The spin in the USA was that Fannie Freddie and writing off mortgage interest is all to “help home buyers”. In reality this increase in taxpayer funded debt raises RE prices which is a negative for anyone that does not own at this point. The bottom line is that these measures were all put into place because the financial powers need to increase revenue while shifting risk to other parties (the taxpayer). Now in the USA it has gotten so ridiculous that a hedge fund (GS) is pretending to be a major lending institution and thus is being subsidized on an ongoing basis by the taxpayer-you won’t catch Obama or any politicians explaining exactly what said taxpayer gets in return for this gift.

#254 Love this Blog on 06.05.11 at 7:55 am

#230 Raj

I refer you to my post #125. Your answer is found there.

#255 Utopia on 06.05.11 at 9:32 am

#88 Van on 06.04.11 at 1:06 am

“This graph seems to suggest Vancouver’s bubble will deflate shortly after the commodity cycle peaks”.

http://i51.tinypic.com/2r551r5.jpg
———————————————————

If the data the image represents is accurate I would have to agree that this bubble is virtually at an end and on the verge of deflating. Who is the source, Van?

#256 grantmi on 06.05.11 at 9:44 am

#1 Anna on 06.03.11 at 9:10 pm

You are racist.

You can’t read. — Garth

Typical comment from someone who doesn’t like the truth, and because it’s directed [rightly so] to one group of individuals whether they be gender, ethnic, race, etc. YOU MUST BE A RACIST!!!!

The Democrap leaning media have been using this tacit against those who disagree with nObama’s policies as well.

But SMART individuals [unlike Ms. Anna] get it!!

Call a spade a spade Garth! [Oh Crap.. is that comment racists???]

#257 eaglebay on 06.05.11 at 10:22 am

#231 Patz
You sure don’t know anything about the
“Income Tax Act” do you?

#258 grantmi on 06.05.11 at 10:44 am

129 BPOE on 06.04.11 at 10:11 am

If anyone’s interested what I look like I’ve uploaded my picture.

You mean this is more like it!!! http://bit.ly/iX6fb2

#259 Mister Obvious on 06.05.11 at 11:04 am

247 wyv

So what’s to examine here?

Let’s assume some foreign nationals or (even seriously wealth hockey players) decided to bid up the price of potash to some insane nosebleed level.

Let’s further assume many thousand of Canadians were taking Government secured loans to buy as many shares as possible.

Would that be worth a look?

#260 vreaa on 06.05.11 at 11:14 am

“NUX TIX OR MORTGAGE PAYMENT?”
– Sign seen at the Saturday 4 Jun 2011, Second game of the Stanley Cup Finals, Vancouver Canucks vs Boston Bruins, CBC broadcast (second period).

Anybody else catch this playoff placard…?
More testimony to the pervasiveness of the preoccupation with real estate in Vancouver.

See:
http://wp.me/pcq1o-2sT

#261 kc on 06.05.11 at 11:15 am

207 TurnerNation on 06.04.11 at 4:32 pm

#154, some of the junior blog dogs are still learning: “Never pick a fight with a man who buys ink by the barrel” as the old saying goes. ;)
(Not certain to whom this is attributed.

Bill Clinton said this, and he was reffering to not getting into battles with the press.

#262 TurnerNation on 06.05.11 at 11:21 am

A bearish opinion:

http://blogs.barrons.com/focusonfunds/2011/06/03/sps-arbeter-bet-on-the-dollar-silver-faces-45-downside/

The SPDR S&P 500 (SPY) hasn’t gone much of anywhere in the past four months. Today’s closing of $130.42 a share takes the ETF back to early February levels.

At the same time, volatility has increased — a sign often seen at either market tops or market bottoms.

“We believe the wild swings of late represent a market top,” writes S&P’s chief technical strategist Mark Arbeter in a note to clients today.

“While the market has been flat over recent months, we have seen a mild deterioration in market internal data on the NYSE and NASDAQ. This, in our view, is evidence of slow distribution by institutions as the ‘smart money’ distributes stock to weaker hands without hurting the major averages,” he adds.

The reason why stocks didn’t see bigger losses on Friday — SPY dropped 1% — is probably because of the weakness in the dollar, the note suggests. The PowerShares U.S. Dollar Index Bullish (UUP) slid 0.8%.

#263 Ben on 06.05.11 at 11:37 am

HongKong one of the most densely populated places on earth.

http://www.wimp.com/apartmenttransforms/

#264 Debtfree on 06.05.11 at 12:42 pm

harper wants 36 billion for jets so he can kill people . While leaving canada and canadians at the bottom of the most important of lists . The kind of lists that grow economies . what a bloody ( literally) waste of our hard earned money . Some people like to build , some people like to destroy .
http://en.wikipedia.org/wiki/Planned_high-speed_rail_by_country
Even the south africans have pulled ahead of us …. Thanks to the neocons .

#265 Daystar on 06.05.11 at 12:50 pm

#216 vyw on 06.04.11 at 5:33 pm

A reasonable post. What is obvious to me is that some of us are guessing as to where Chinese buyers of Canadian real estate get their money but what should be obvious to those who care to look, is that China’s real estate is in a bubble. Never mind their communist government, its a capitalist society where real estate values are driven by credit and the valuations of Chinese real estate would make make any North American’s head spin in terms of value compared to earnings.

http://www.businessinsider.com/the-chinese-real-estate-bubble-is-the-most-obvious-bubble-ever-2010-1#property-values-are-rising-dramatically-1

Statistics from Goldman Sachs showed that over the past six years, housing price hikes have outpaced income rises by 30 percentage points in Shanghai and 80 percentage points in Beijing. Where have Canadians seen growth like this in real estate? Real estate has been a big winner in China, its made millionaires out of buyers who have access to credit and it should come as no surprise that some of them are now buyers of real estate in Vancouver and Toronto.

What is so hard about this for some readers to understand? Again, their construction boom is not a one hit wonder. China is thee #1 manufacturer in the world. People can rail away on how environmentally dirty they are all they like, but lets remember that they make more things than everyone else including having 1.3 billion people, they are heavily industrialized, their rate of construction is unprecidented and their expansion of credit is beyond comparison with other nations of the world.

A good number of Chinese investors/borrowers profited from growth, but its come with a heavy cost. Debt. As that debt outpaces the growth of earnings, just like anywhere else, it becomes unsustainable and thats what is happening in China right now. When their bubble blows is anyone’s guess but when it does blow, it could be enough to spin the world into a recession or worse. In hindsight, without such Chinese growth, no recovery would have taken place, the world would be there now.

#266 April Showers on 06.05.11 at 12:51 pm

I dedicate this song to BPOE, the lying coward…

http://www.youtube.com/watch?v=uelHwf8o7_U

#267 eaglebay on 06.05.11 at 1:16 pm

#263 TurnerNation
You’ve picked a few losers, now how about the winners?
Commodities are up and will be for the next decades.
More than half of the world’s population is trying to
improve their standard of living.
Most of the Asian countries have turned the corner and their economies are expanding. Even China.
Too many doomers and negative peoples on this blog. The World is not falling apart. Too bad dummers, I mean doomers.

#268 Basil Fawlty on 06.05.11 at 1:16 pm

“Who cares? Whatever is legal tender for the next 100 years or so is cool with me. — Garth”
“Then I shall ensure I have lots of currency. What’s the problem? — Garth”

Tell that to the seniors on fixed incomes, as many have a problem and would love your money.

Someone put their Depends on backwards? — Garth

#269 not 1st on 06.05.11 at 1:19 pm

harper wants 36 billion for jets so he can kill people .

—————

Are you for serious? Man, get informed before you post drivel. The jets are to protect our arctic sovereignty. Thats how the americans and russia protect there’s so we are just playing the same game.

Those jets will doubtfully ever see military action ever, but they will race up and down the coastline tracking incursions and letting this world know, this is ours, stay off.

#270 vyw on 06.05.11 at 1:28 pm

#260
Actually this happened with Nortel and countless other stocks, and the leveraged investors lost their shirts.
But this isn’t what’s happening in Vancouver
the significant increases from last month track back to a limited market of detached homes in Richmond, Vancouver West-side and West Van (about 400 homes turned over last month).
Most home-buyers are actually buying in other areas where prices are more reasonable.
Garth’s analysis has been solid and there are a number of RE markets unravelling across the country and Vancouver will not be immune to at least a correction. Although with low numbers of listings, strong demand, low interest rates and all cash deals (no interest rates), it may take awhile.

#271 he he on 06.05.11 at 1:39 pm

hey there #220 Trailer Park Boys…..great postings…..keep it up brother. R U Jim Lahey?

#272 Hoof - Hearted on 06.05.11 at 1:40 pm

#229 realpaul

I see a Paul Martin hail mary coming…..thats where deficits are ‘eliminated’ with massive increases in taxation and a redirection of debt to the local governments…which means….right you are…..higher taxes on property…local fees and services….etc etc etc.

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

Yes…of course. It buckpassing and downloading

IN BC….with Translink set up……as well as Metro Van Board…we have no accountability.

I just saw that Metro is engaged in another Mega project…an upgrade of sewage treatment.

http://thetyee.ca/Blogs/TheHook/Municipal-Politics/2010/06/04/HouseholdHook/index.html?commentsfilter=0

QUOTE:

However, the recently-approved plan indicates Metro will go ahead, on schedule, with or without funds from senior levels of government.

“Across Metro Vancouver, the current household levy for waste water treatment varies from $160 to $180,” stated Jackson in a press release today. “Without senior government cost sharing, those average household levies will increase 600 per cent over the next two decades for residents on the North Shore and in Vancouver.”

That means that by 2020, those residents could be paying close to $1,000 per year for waste water treatment services.

======

So they go full steam ahead, and ” hope” other levels of Gov’t will chip in.

Most of these politicians are a bunch of old farts, pigs at the trough that are egomaniacs and will retire soon, leaving future generations in hoc and mortaged for decades.

We need a revolution, yesterday…

#273 Trailer Park Boys on 06.05.11 at 2:27 pm

Yeah…CrowdedElevatorFartz was over. We had a great time.

http://www.youtube.com/watch?v=R6dm9rN6oTs&playnext=1&list=PL9275B7771D08B1BD

He says hi to everybody……..and hopes BPOE ain’t cheating on him

#274 pathrik M on 06.05.11 at 3:08 pm

The OFSI is actually an institution that is run by the banks, although it is a federal government department in name- right? So can we really expect any thoughtful and measured regulation and enforcement to come out of this?

#275 Bottoms_Up on 06.05.11 at 3:46 pm

#257 grantmi on 06.05.11 at 9:44 am
————————————–
I agree, Garth’s blog post is not racist.

‘Asian’ can be used to refer to someone from one of many different countries (including Russia), but it is not a racist term. (it’s like saying ‘European’)

Although if you ask any Chinese person whether they believe the statement “they’re taking over” is racist, they will not because to them it is a sign of their country’s power, wealth, reach etc.

#276 Paul on 06.05.11 at 4:14 pm

http://www.castanet.net/edition/news-story-62435-1-.htm#62435

#277 Page on 06.05.11 at 5:22 pm

First!

#278 penpal on 06.05.11 at 5:34 pm

# 268 eagle bay
to paraphrase you at #231 Patz;

Eagle bay, you sure don’t anything about the world economy, do you?

F’ing moron!
No, no problems anywhere in the world. The record low interest rates and gold hiting record prices happened for no good reason.

Go back to watching cartoons and reading comments dipshit.

#279 CEO on 06.05.11 at 5:42 pm

Interesting read. As someone who has done business in Asia for more than 30 years and in China specifically for more than a decade, I can tell you there are some simple answers as to why and some inevitable conclusions regarding what is to come. The majority of the money flowing into overpriced Vancouver realestate, has been “earned” via what we would consider rather “unethical or dubious” business practices. Most mainland chinese (99%) are having enough difficulty purchasing modest housing in China, where realestate has collapsed by 30%-50% in major centers. The escaping money is hoping to relocate and gain (buy) citizenship in a promising country, before their government either catches up with them, or changes the rules…which they are about to do by capping funds leaving China. This should have an interesting and significant impact on the hyper inflated market here. The “other” group throwing money about with reckless abandon, are the senior bureaucrats and politicians, who realize their days of treating their respective treasuries (and aquired bribes) like a personal piggy bank are coming to an end. So, they steal whatever isn’t nailed down and could care less what they pay for real estate or citizenship here, it’s not like they earned the money. The situation is similar to the Japanese artificially driving the US real estate and art markets skyhigh in the 80s. They knew that a Piccasso which sold for a million dollars a year prior wasn’t worth the 54 million they paid. It was simply all about evading inheritace taxes back in Japan. The bottom line is that most Canadians and almost all realtors, have trouble spelling, let alone understanding, the basic principals of economics or even what is driving their own market…so they blindly follow along and eventually pay the price for not doing their homework. I’m sure that I will receive many unfavourable comments for this post, as it is extremely “politically incorrect”…albeit truthful….good luck to all in the coming collapse.

#280 penpal on 06.05.11 at 5:49 pm

#
re 75% leasing on BMW’s and Mercedes

I think your ratio may even be a bit lite at 75%, but the distribution of those leases are key.

But, hey what to you expect out of people who can only scrape together 5% down for a home purchase – outright purchase for cash?

My bet is that 95% of the lower end of the range – 3 series BMW and C class Mercedes ($55 K and below) are leased whereas the top models 6 and 7 series BMW and S class Mercedes ($ 100 k and above) are more likely to be paid cash for or put on a purchase payment plan.

#281 Daystar on 06.05.11 at 6:18 pm

#205 realpaul on 06.04.11 at 3:48 pm

“Canada has become a scapegoat and an escape valve for the nasty Communist Party of China. Canada should not be alleviating the political problems of the Chinese by allowing an entire population of religious disidents and religious zealots to settle here in the first place.” – realpaul

Its interesting. You go on with your comment initially to explain how Chinese immigration is not a racist issue, but an issue of Canadian citizen rights and privileges, but then you say this, which is hard to be confuse as anything but racist. You’ve just called 1.3 billion people communist religious dissidents and zealots (I suppose, because they practice Buddhism).

All we are left to do is wonder why. You continue on…

“It is a well known fact that the corruption in China’s bureaucracy is ubiquitous. Every civil servant, bank manager, political figure, police official that has access to government funds or is in a position to solict graft has their eye on Canada as a place to freely launder the money they steal. As one immigration officer in Beijing said about the commonality of wealth holdings by applicants with seemingly inoquous jobs withing government and middling position…” The civil servants seem to have amassed an unusual level of personal wealth.” – realpaul

With this quote, you make a case to smear Chinese immigrants as corrupt… all of them, presumably, oblivious of the boundaries you’ve crossed.

“I will weather the cat calls and ad hominem attacks again I’m sure until these facts also become mainstream.” – realpaul

And not even knowing it!

What you really need, realpaul, is to get help. You happen to be a “club of Rome” kind of guy.

http://www.globalresearch.ca/index.php?context=va&aid=9380

As to where you “fit” in terms of a psychological/sociological perspective, alot has changed in terms of classifications and diagnosis.

This link below gives a rundown on behavioral traits associated and a brief historical:

http://www.mcafee.cc/Bin/sb.html

But here is the shocker. Sociopaths make up approximately 4% of the population when one includes all the subclassifications. One in 25 in some level or another, are just like you, realpaul. There’s no shame in acknowledging character flaws. Another 4% are borderline, add in depression/anxiety and you are a part of 1 in 5 but its still 1 in 5 that needs some help and sadly not all care out there is adequate (my best guess is 40% comes up short).

My best advice for you realpaul is to listen to the audio in this link. I’m just trying to help you, bud:

http://jari.podbean.com/2010/11/03/interview-with-dr-martha-stout/

#282 randman on 06.05.11 at 6:20 pm

Mr Buyer #253

“Guess we are swimming in community pools all summer.”

Yuckky!!!

And Chlorine is probably just as bad for you

Won’t catch me in pubic pools…

All that stuff from people’s bodies floating around…yuck!

#283 jess on 06.05.11 at 7:00 pm

the activity BETWEEN JURIDICTIONS

..”transfer pricing by artifically adjusting the price for internal transfer multinationals can shift profits into a low tax haven and costs into high tax countries where they can be deducted against tax.

…”Who is to say that the twenty million loan from Luxembourg subsidiary was conducted at the real market rate? It is often hard to tell. Sometimes the prices for these transfers are adjusted so aggressively that they lose all sense of reality: a kilogram of toilet paper from China has been sold for $4,121 a litre of apple juice has been sold out of Israel at $2,052, ball point pens have left Trinidad valued at $8,500 each.”
(page 12 Treasure Islands, Nicholas Shaxson)

laddering
“sliced structure between several jurisdictions each provides a new legal or accounting “wrapper” around the assets which are located elsewhere . This deepens secrecy and complexity ”

==

In 1915 the brothers, after being refused a request for income tax exemption made to David Lloyd George, moved to Buenos Aires to avoid paying income tax in the UK. The family later administered the business through a Paris trust that enabled it to legally avoid UK tax until the loophole was closed in 1991.[1]wiki
=
argentina
de la Torre became a national senator. In 1935 he initiated an investigation on the meat trade
=
THE VESTEY WAY BUSINESS MODEL
…’And when the prime minister still refused to play ball, the family reacted first by going into tax exile in Argentina, then by setting up an elaborate avoidance scheme centred on a Paris trust which was the bane of Inland Revenue investigators for more than 60 years. “Trying to come to grips with the Vesteys over tax,” one tax officer who attempted to take on the Vesteys is reputed to have said at the time, “is like trying to squeeze a rice pudding.”

“flee clauses”

‘IN 2010 Luxemberg authority pleaded laddering as an excuse for habouring N. Korean money”

#284 604 on 06.05.11 at 7:04 pm

WoW went for a ride on my motorcycle thru South Surrey/White Rock lots of houses on the market!! Tons of listings some sold signs but not many!

#285 45north on 06.05.11 at 7:12 pm

10caipirinhas: one of my new employees at work just moved here from BC

reading down “here” is Alberta

the US blogs used to have posts about accidental landlords, yours is the first Canadian post I have seen

good post

#286 jess on 06.05.11 at 7:19 pm

not number 1 “sovereignty? ”

there seems to be no such thing ask greece, ireland etc etc

#287 Nostradamus Le Mad Vlad on 06.05.11 at 7:20 pm


Lady Gaga’s exploding nipples or Alice Cooper in drag? Hmmm. ‘Owzaboud None of the Above?
*
Today’s Words Of Wisdom from wrh.com: “The first requirement to get a job in government is to have your brain surgically removed.”

Asbestos was the insulation used for the twin towers. Because they were perpetual money-losers, four jets were allowed to fly freely around on Sept. 11, 2001, with no USAF conveniently in sight. Now the same problem arises in Chicago’s Sears Tower. Guess who leases it? Egypt was saved from a nuke disaster. How convenient.

Japan “Contamination levels in the Japanese mountain village of Iitate are higher than in some parts of the Chernobyl exclusion zone.” Plutonium “Plutonium-240 has a half-life of 6563 years. Plutonium-239 has a half-life of 24,100 years.” wrh.com. Radiation in No. 1 reactor high.

Sprouts Another Brussels E.coli frame up? Cell Phones Don’t bother with the TSA scanners anymore. They will juggle yer jingles!

3:30 clip Know your money — gold and silver, not tungsten and lead filled bars. 4:02 clip EU-IMF US$114 bln bailout for Portugal, which means tax hikes, carbonazi taxes etc. 1:15 clip Big banks and Wall St. were not supposed to run the govt. Obama’s American Dream is at McDonalds. Obamanomics “It’s a sign of grim times indeed when the Obama administration is touting a potential $14 billion loss to the taxpayers as a great economic success.” With Soros’ help.

Truth “And Obama said on March 18 that Libyan ‘no fly’ mission will be only days and not weeks,and few days later he said : ” NATO is in charge of mission…”

“And now we know that the mission is extended to Sept.” wrh.com. That’s a good moment for the world’s economies to crater, for China to dump its US holdings and for TSTHTF.
Libya Seems WW3 is heating up, so the US can get out of paying its debts / bills. Next stop: Saudi Arabia and Iran. To Serve And Protect Not in Toronto anymore. Not War But computers are?

The Carbonazis are back and revving their campaign. Possibly they could volunteer to prevent forest fires, and stop exploding volcanoes. That would be useful. GW Horsefeathers These fruitcakes are beyond help. Put them on the next bus to Neptune — that will cool them off for a while!

Everything is changing so rapidly these days.

#288 TO Japanese on 06.05.11 at 7:23 pm

ok folks, scared of being accused of being racist? don’t worry, I’ll say it. screw the politically correctness. I’m Asian.

it pisses me off that those mainland Chinese are making houses unaffordable for us in OUR country! we work, work and work, trying to save pennies to finally one day buy a house, a condo, or a cottage!

yeah, it’s a free market, good for whoever’s got the dough. we don’t.

can’t wait for the real estate market to tank. we need a law that requires homebuyers to be residents of Canada. otherwise the locals will never be able to afford it. it’s insane!

#289 BrianT on 06.05.11 at 7:45 pm

#280CEO-Expect to be branded a sociopath when our local Dr. Phil reads your post.

#290 PLP on 06.05.11 at 8:26 pm

It’s like a game: US. Feds print money that doesn’t stay here (in NA) rather it goes to China (in order to create inflation there) and China lets their people take as much as possible money out of the country, thus reducing inflation.
Canada, in a bid for survival, lets them to buy RE and “invest” that money here, allowing for future inflation.

#291 Slow Learner on 06.05.11 at 8:44 pm

PLP (#291) – Very well articulated in two sentences.

#292 Onemorething on 06.05.11 at 8:53 pm

#89 TO Japanese

Best thing you can do is take advantage of the times and sell into this RE boom. When a HOME became House it turned into an investment so treat it like one or feel the pain.

No Stress – Liquidity – Smart Investing outside of RE to be had!

As for the second request by our goverment, it will never happen!

As for the Mainland Chinese, they will retreat at some point in masses to return home as that is where the money goes when the SH*T hits the fan!

#293 Chaos on 06.05.11 at 9:03 pm

Anybody can be FIRST!

The real gamblers are the one’s who bet who’s gonna be…

LAST!