Moral hazard

HAZARD modified

The average Vancouver detached house costs $1,209,452, or 20% more than in Toronto, where three times as many people live, making 30% more income. But this is an improvement. A few weeks ago Van SFHs averaged $1,361,023.

Any way you slice it, Vancouverites have drunk the Kool-Aid and will spend decades paying for it. This is now a city of basement suites, garage conversions, laneway houses and micro-condos reminiscent of Happy Tails Purr & Woof Kennels. A recent survey found 60% of people without real estate say it’s because they can’t accumulate 5% down. But they still think they should have property.

The more that housing’s expensively unattainable, the more people crave it. As a result, BC’s the most indebted place. The savings rate is negative. And moral hazard abounds.

To refresh your memory, it takes a 5% downpayment to get a 95% mortgage from a lender who is then insured by CMHC against the high risk associated with such debt. No insurance, no loan. No 5%, no deal. Except in Vancouver.

Watch this.

“We get it: saving for your first home can be a serious challenge — especially here in BC. Even a 5% down payment can sometimes feel like an unattainable financial goal. This video will give you a basic overview of how the Down Payment Helper Mortgage will match the amount you’ve currently saved for your down payment, up to a maximum of $12,500.”

In other words, you no longer need 5% to buy a house in Vancouver – only half that, or $12,500 to net a $500,000 condo. It’s called the ‘Down Payment Helper Mortgage’ now being offered by Vancity, BC’s local bank which masquerades as a credit union. The bankers will actually upfront half the cash for the down, plus appraisal and legal costs, so they can remove the last remaining obstacle to the indenture of the virgins – money.

Here we are: real estate at grossly inflated levels. Banks dropping lending standards. Ownership with just 2.5% down. Cheap mortgages guaranteed to reset higher in a few years. So how, exactly, is this different from the US, circa 2004?

That’s right. It isn’t. Except we’re special. A fifth of BC residents say they’d shack up with someone else just to qualify for a home loans. Another quarter say they’ll be buying lottery tickets in order to fund a real estate down payment. And our bankers will clearly do anything they can to keep the river of debt flowing.

So how does Vancity pay for this largesse, and the flaunting of CMHC guidelines?

Simple. More interest. The virgins are required to sign up for a five-year fixed loan with the max 25-year am, at slightly more than the regular rate. The premium is between a half point and .55% over the first five-year term. It all means the monthly payment on a $500,000 condo (mortgage, strata fees and tax) equals about $3,200, with $488,000 in debt. Of course, you can rent the same two-bedroom unit today for $1,600. No debt.

By the way, Vancity’s moral hazard does not end with giving children free money so they can be fully loaded with financial obligation. The Mixer Mortgages allows you to share a home loan with other people and break one of my cardinal rules (Thou Shalt Never Mortgage with Anyone Thou has Not Slept With). The Creditline Mortgage lets a borrower make interest-only payments, so the mortgage is potentially eternal. Similar loans are now banned in the States. And the Laneway Mortgage allows conversion of your tool shed or garage so people can live there and you don’t need to see them much. Oh yes, and “The laneway mortgage package includes free legal and appraisal services, plus a preferred interest rate and the potential to earn up to two per cent cash.”

Now, many people in Vancouver blame filthy-rich Chinese immigrants for swooping in, buying mansions, and making real estate unaffordable, even when no statistical evidence exists. And they may be right – at least as far as the big properties on the Westside are concerned (where prices are now falling).

But we all know. That’s just the Kool-Aid talking.

YATTER modified

Chart source: Yattermatters.com

192 comments ↓

#1 Frustrated on 04.20.14 at 6:13 pm

How much longer do we have to wait !!!!

#2 crowdedelevatorfartz on 04.20.14 at 6:14 pm

Vancouver Real Estate Bubble….
In the immortal words of Sir Winston.
The beginning of the end? Or the end of the beginning?

#3 GPG on 04.20.14 at 6:15 pm

Garth. It looks like a rather large segment of the population of the United States haven’t seen all of the news reports that their economy is in recovery mode.

Advice to Democrats: Don’t say ‘recovery’

#4 Fleabitten Monkey on 04.20.14 at 6:15 pm

$3200 per month is a lot of dough for someone young, especially when they have to rely on getting a kick in of $12,500 from the bank. They should just save it…but oh… that would mean they’d have to wait to buy for awhile….and that is just so un-hip like.

#5 Joe on 04.20.14 at 6:21 pm

I just spoke to a buddy of mine who has 4 houses.
He rents 3 of them but owns none of them outright.

He explained to me that the bank just loaned him 200k
at below 2.5% vari. R

I’ve tried to point out that interest rates will eventually climb, but he doesn’t care.
They are going to buy another…

#6 Bill Bonkers on 04.20.14 at 6:24 pm

And your point is, sir?

#7 Chickenlittle on 04.20.14 at 6:30 pm

Happy Easter everyone!

BTW Smoking Man, I Googled that guy (something White) that you were signing autographs for.

I’m disappointed. That’s not what I pictured you looking like. I had imagined sort of a Gary Busey type.

Oh well.

#8 Shawn on 04.20.14 at 6:39 pm

Why Prices Rise.

Why did the perpetual bonds value double when interest rates fell in half.

Because that is how the math works.

When interest rates and required returns on assets fall, their prices rise!

House prices are higher because people require less return on them. Ask (for lower returns) and ye shall receive (lower returns).

As someone suggested recently the required cap rates are lower.

It’s just financial math.

When will it end? Who knows. I react to such things I don’t predict them.

High house prices, with low returns? Avoid owning (especially) rental real estate.

#9 dan on 04.20.14 at 6:40 pm

This blog is pathetic. Real estate is called real estate with reason. Laundering money through real estate is matter of fact legal in Canada. But nobody talks about that because business and entrepreneurial spirit are essence of neoliberal capitalism. Criminal rules the mighty north and actually who cares?
There must be reason why only mostly anglos build houses from garbage and not any solid material
It is called money circulation…

#10 HrHulot on 04.20.14 at 6:40 pm

Just when you think the RE ballon couldn’t take another pump, another gush of air. The resilience is incredible. When will it burst? Or maybe never. Perhaps we’ve been sitting here like a bunch of dolts on the sidelines listening to Garth.

#11 pathcontrolmonk on 04.20.14 at 6:41 pm

What is “kool-aid”?

#12 High Plains Drifter on 04.20.14 at 6:42 pm

Misplaced sympathy runs rampant here. Canada and Australia have similar marching orders and they include indenturing as many as will sign up. Sooner or later my price will arrive and hopefully I won’t wobble too much with the loot in my jeans. On this Easter Sunday, I would worry more about following false Idols.

#13 JO on 04.20.14 at 6:43 pm

All indications I see are that GTA RE is in the classic blow off stage. Many of the recent buyers are broke and often have down payments from a relative.
We really need a sharp correction to stop this mania before we turn into Spain or Ireland. When the correction comes, we will all pay with a CAD that will likely be low 70’s or worse and an army of young borrowers and boomers crying for a bailout.
This is what you get in our corrupt neoliberal economic system.
Don’t be surprised if they keep this game going out of luck into 2016 …
JO

#14 Linda Mulligan on 04.20.14 at 6:47 pm

So you are o.k. as long as you pay the interest on the one kind of mortgage. Didn’t that used to be a loan shark practice where as long as you paid ‘the vig’ then the shark would not send the enforcer(s) to beat you up? Did we not outlaw these kind of money loaning practices at one point – I guess when the government promised to get tough on crime they didn’t think the white collar kind qualified.

#15 dan on 04.20.14 at 6:48 pm

And what actually “moral hazard”, means in times when economy is reduced to next guy to you trying to get into your pocket or vice versa? Because you know, all those people between you and your dream are called job creation…

#16 LJ on 04.20.14 at 6:50 pm

So, if they had to abide by government guidelines, the kids would have to be making $10,000/month or $120,000/year (not including the other elements of PITH). Don’t think that is a true reflection of our youth today…

“[They] are so screwed.”

#17 Air Canada Baggage Handler on 04.20.14 at 6:55 pm

Thank you all for your support over the recent kerfuffle about me.

I am pleased to announce I will be pursuing future endeavours shortly and have signed up for courses to become a real estate agent and mortgage broker, with future plans to train as a home inspector. In three months I’ll be in business!

I believe my attention to detail and focus on client-centred fiduciary responsibility will serve me well in the onward and upward world of residential real estate.

Air Canada always kept me on the tarmac, but I will be flying high soon with you!!!

Whether it is gently dropping your carry-on bag from the plane with your iPod, grandma’s urn with ashes, and Swarovski crystals into the 100% Canadian-made metal carrier below, or advising you carefully to ignore that home inspection report and get your parents to secretly loan you the 5% you need to buy that soon-to-double semi-detached shack, I always have and always will know whose interest I am acting in.

I will updating my LinkedIn page shortly and let you all know here. Please connect and say hello :)

My future motto:

“If I can’t sell you your next house, I can get you the money to buy it from a couple of guys, or at least fix the inspection report to make it all possible – it’s all about making it happen”

(P.S….the ‘drop’ was not “20 feet” as reported by mainstream media hacks, it was only 6 metres, so get over yourselves, all you haters!)

#18 X on 04.20.14 at 6:56 pm

It really is a shame that more is not done to regulate the RE industry. When it all collapses, fortunately for the powers that be, the sheep will believe whatever they are fed from the media. I am doubtful the articles will be about the gov’t not having done enough to prevent this, and they certainly won’t risk their advertising revenue on trashing the RE industry.

#19 Cici on 04.20.14 at 6:56 pm

I can’t believe that people in this country can’t find anything better than (mostly all) crappola real estate to spend their hard-earned money on.

What we are witnessing is a serious lack of creativity that could lead to profound cognitive impairment if left to continue to spiral out of control ;-(

#20 Ralph Cramdown on 04.20.14 at 7:05 pm

https://www.youtube.com/user/MerleHazard/videos

#21 Smoking Man on 04.20.14 at 7:17 pm

#7 Chickenlittle on 04.20.14 at 6:30 pmHappy Easter everyone!

BTW Smoking Man, I Googled that guy (something White) that you were signing autographs for.

I’m disappointed. That’s not what I pictured you looking like. I had imagined sort of a Gary Busey type.

Oh well.

……….

Americans are idiots, mind you the ones wanting pics and autographs, hammered…..

This one chic was rubbing my back, in clear view of my wife…

I look over at her with a bit of a smug grin

My wife nearly died laughing.
Knowing how disappointed that chic would be if we went up stairs…

That’s love is all I’m saying

#22 William Bell on 04.20.14 at 7:19 pm

Gotta love VanCity !

http://goo.gl/sXwtRL

#23 crowdedelevatorfartz on 04.20.14 at 7:20 pm

@#17 Air Canada

Good one! Hilarious.

#24 dan on 04.20.14 at 7:31 pm

all people today are homeless because the most important relation they have with their homes is monetary value. When that started actually?

#25 Craig on 04.20.14 at 7:41 pm

“Now, many people in Vancouver blame filthy-rich Chinese immigrants for swooping in, buying mansions, and making real estate unaffordable, even when no statistical evidence exists.”

Garth we’ve already been through this a few times before. I posted links to two separate articles that proved mainland chinese influence on the Vancouver housing market. Both articles had the numbers which you kept banging on the table for.

Why do you still deny their influence? Is it some deep rooted fear or anxiety that keeps you perpetually self-deluded?

No, just bad articles. — Garth

#26 Ralph Cramdown on 04.20.14 at 7:44 pm

The thing I don’t understand about bankers…

If you study their history, they always end up making stupid loans on easy terms at the top of the credit cycle. Then they spend the next two or more years writing stuff off and lending far less, and at far more rigorous terms at the bottom of the cycle, to rebuild their tattered balance sheets. Keynes noted that “A sound banker, alas, is not one who foresees danger and avoids it, but one who, when he is ruined, is ruined in a conventional way along with his fellows, so that no one can really blame him.”

Why don’t some banks, realizing this, pull in their horns a bit when everybody else is getting stupid, keeping their powder dry for the inevitable asset price crash that follows? The don’t have to call themselves the “First Countercyclical Bank of the West” or go on talk shows claiming that asset prices are stupid and they stopped lending six months ago. Just tighten up credit and raise rates — even at the expense of loss of market share — when everyone else’s lending criteria have gone to stupid. But it never happens that way. I guess any bank president who suggested it would be fired by his board and replaced by a more pliant lender-in-chief.

“When the music stops, in terms of liquidity, things will be complicated. But as long as the music is playing, you’ve got to get up and dance. We’re still dancing.” — Chuck Prince, Citigroup CEO, Summer 2007

http://www.nakedcapitalism.com/2007/07/musical-chairs-theory-of-markets-chuck.html

#27 Steve French on 04.20.14 at 7:50 pm

“The plans of the diligent lead surely to abundance, but everyone who is hasty comes only to poverty.”

– Proverbs 21:5

#28 Craig on 04.20.14 at 7:50 pm

“No, just bad articles. — Garth”

The articles I posted were from reputable sites using government figures to back them up. How can that be bad?

Van prices are high because Van people pay them. Stop looking for straw men. — Garth

#29 Steve on 04.20.14 at 7:53 pm

Easier terms equal bigger bubble. Bigger bubble equals bigger blam. This thing is like a run away locomotive ridden by an infinity of lunatics forcing an army of monkeys to type up nefarious papers of servitude. The best thing is to chronicle the whole spectacle and take a few pictures of the wreck. You can’t reason with unreasonable people.

#30 Craig on 04.20.14 at 7:57 pm

“Van prices are high because Van people pay them. Stop looking for straw men. — Garth”

Garth, it’s not about “looking” for anything. It’s about honestly acknowledging the facts. The fact is mainland chinese buyers have had (continue to have) an influence on the van market.

I just don’t get why you still deny it when concrete reputable evidence has been presented to you contradicting your claims?

Nobody denies offshore money influences markets. But it is not responsible for Van crack shack mansions. You did that. — Garth

#31 SashToronto on 04.20.14 at 7:59 pm

Lets stick to talking about finances, as the correction didn’t happen. I understand we all thought that was going to happen from 2008-2012. It didn’t, not even in 2013, not even in the spring market of 2014 and not for the foreseeable future.

The system keeps chugging along. If it does happen next year or the year after it might pull prices back to 2012 levels, big deal. Too many people are horny for a house. Rent costs just as much as a mortgage. Let talk about something else, because the same thing every day is getting BOOORRRIINNNGGG. Garth said himself we wont have a US style collapse but a slow devaluation over time, so really who cares, as long as the property you buy is worth more 20 years from now.

I understand some properties are in crazy valuation in big cities, but for the most part normal people can afford normal prices outside the big cities.

PS. Interest rates have been the same since 2008.. get over it. Until it does go up to 5-6% dont’ talk about it or try to predict when that will happen as the bankers don’t even know, they keep pushing it out. Economic developments is what they are using to gauge this so good luck.

#32 Smoking Man on 04.20.14 at 8:07 pm

Renee just emailed me…. Handsome Family coming to masey hall June 6.

Dogs they are awesome…. Because of True Detective…
Boom sold out shows in Europe….

Thank Nic Pizzalotto, the writer…. Who’s rust chole character, and quotes derived from this pathetic blog…….

#33 I'm stupid on 04.20.14 at 8:11 pm

@5 Joe

I remember when I was a boy in the late 80s-early 90s, my fathers friend was similar to your buddy. He owned 18 homes, including the one he lived in. He was a Realestate lawyer (talk about all your eggs in one basket) I remember because he took me for a ride in his new Porsche. Man I loved that car, I remember dreaming of owning one when I grew up. The poor guy lost everything once homes corrected and became illiquid.

#34 Daisy Mae on 04.20.14 at 8:13 pm

#13 JO: “All indications I see are that GTA RE is in the classic blow off stage. Many of the recent buyers are broke and often have down payments from a relative.
We really need a sharp correction to stop this mania before we turn into Spain or Ireland. When the correction comes, we will all pay with a CAD that will likely be low 70′s or worse and an army of young borrowers and boomers crying for a bailout.
This is what you get in our corrupt neoliberal economic system. Don’t be surprised if they keep this game going out of luck into 2016 …”

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

Listening, #10 HrHulot?

#35 juno on 04.20.14 at 8:14 pm

#1 Frustrated
How much longer do we have to wait !!!!

==========================
Who say you have to wait. with basically zero down you can buy buy buy right now.

You live and you die. In between your living. If you want to attach yourself to a huge mortgage go ahead.
25 year of mac and cheese. and pack jelly sandwich is not what I call living.

Or you can rent the same place for fractions of the price with no rish and headaches

#36 pricedoutfornow on 04.20.14 at 8:17 pm

I rent a 1950s bungalow, 4 beds, 2 baths, roof that looks like it’s about to collapse in Vancouver for $2000/month. this place is assessed at close to a mill. We could never afford the mortgage on this place, but the rent, sure ya, we can do it. People are on crack in Vancouver. The woman next door, divorced I think, with two teenage kids, has someone living in the basement. I’m so happy we live in a full house and don’t have creepy people living in the basement. Who cares if we don’t own it? Owners have had this house in their family for 40 years, don’t think they’re in any hurry to sell. And they keep it nicely renovated and attend to any maintenance issues ASAP. I have no issues with renting. Let the fools get the big mortgage and the headache with the furnace and basement tenants. yeesh. When will the madness end.

#37 randman on 04.20.14 at 8:19 pm

Here’s Denninger on the financilization of our lives
Housing is addressed in my excerpts..

I want to advance a “unifying theory” if you will that underlies all of these ills. I’ve talked about it a bit in the last year but I believe we must bring it front-and-center in our economic debates both among our associates and in the political sphere.

It is simply this: We must stop and reverse the financialization of all areas of our economy.

What am I speaking of in this regard? The increasing acceptance by us in being sold a payment instead of a price.

You may not have noticed it but virtually everything nowdays is sold this way. And unlike the various perverse games that are played in Washington DC to screw you in one form or another this one is completely under your control; no President, Senator or Representative can force you, at gunpoint, to acquiesce.”

……

“Of course houses are the worst offenders in this regard. That’s how we wound up with the housing bubble — financialization. And it’s how we’ll get screwed again and again until we stop it, because as soon as you allow this sort of manipulation to take place in something as essential as housing (or transportation) you are going to get reamed by it no matter whether you participate or not.

No, you don’t “win” by participating while others “lose.” You all lose because you overpay.

Let me expound on that a bit. When we allow financialization to take place the means by which you overpay seems complex or even ethereal but it really isn’t. The banksters and other people in the transaction have a huge database of outcomes to look at for statistical purposes. That is, they know what the odds are of your defaulting on a given loan and since they have millions of examples they have an enormous amount of information in this regard. You, on the other hand, have none of that information and what’s worse is that even if you did it wouldn’t help you much because you don’t know where you fall on the curve.

It is human nature to believe in our own exceptionalism. However the fact is that experiences on an individual basis tend to fall on a statistical bell curve; some bad, the median being the most-likely, and some good. The goal of financialization is to allocate almost all of the benefit from a given basket of transactions across that bell curve to everyone except you.”

http://market-ticker.org/akcs-www?post=228947

#38 Turtle on 04.20.14 at 8:21 pm

“Van prices are high because Van people pay them… ” — Garth

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

The only way it’s possible that people are getting extra loads of debt from anywhere and anyone. This time it is Vancity giving their “helping” hand. The other time it is mother-in-law … etc. It can’t go forever.

What if your employer finds out that you have $1 mil debt, but making only $50k. She will never take your “no” as an answer. And why should she? You asked your bank, your MIL … etc to be a slave forever, why should your employer pass on such a sweet opportunity? If she wants someone to stay late, to work your butt off without any recognition and pay increase, … etc – you are the man.

Is your “home ownership” gives you enough satisfaction to overcome all these work related issues? What if you are so stressed out that you can’t get it up anymore? Don’t let your wife ever feel sorry for you. It will never be forgotten.

If I live in Vancouver without owning a house, I would move somewhere else.

#39 DaleFromCalgary on 04.20.14 at 8:23 pm

#1 – The answer to your question is that trends go on longer than you think they should. Or, as a U.S. Federal Reserve chairman remarked decades ago: “The market can stay irrational longer than you can stay solvent”. #26 answered your question in a different sort of way.

The Canadian real estate market will rise endlessly until the BANG! moment, like it did until the last collapse in February 1982. I know old Calgary realtors who swear they know the exact day the market collapsed back then because the phones stopped ringing. Not just figuratively, but there actually was a day when no new clients called looking for a house. It will happen again.

#40 Daisy Mae on 04.20.14 at 8:25 pm

#25 Craig: “Garth we’ve already been through this a few times before. I posted links to two separate articles that proved mainland chinese influence on the Vancouver housing market.”

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

‘Proved’? The media and most people are full of s**t. If I were to trust — and I do — it’d be Garth.

#41 randman on 04.20.14 at 8:25 pm

Nobody denies offshore money influences markets. But it is not responsible for Van crack shack mansions. You did that. — Garth

I’m 100% in agreement with Garth here…
Too many people in our society these days refuse to accept responsibility …..

We have allowed this to happen because we have created or allowed banks and governments to create the situation
allowing offshore money to tsunami in…

Look in the mirror Craig…while you were occupied with chasing skirt and driving fancy cars…..the bad guys switched the furniture around and pulled the rug out ….

Get yerself edumacated me boy!

#42 Craig on 04.20.14 at 8:26 pm

“Nobody denies offshore money influences markets. But it is not responsible for Van crack shack mansions. You did that. — Garth”

Excuse me, I did what? You’re taking a passive aggressive tone Garth, is that really necessary?

Canada, and subsequently Vancouver, is the largest absorber of people trying to bail out of China….in the world. So it’s not just simply a matter of “offshore money influencing markets”, they are a major contributor.

So how do you know their influence isn’t helping to cause crack shack mansions?

Clearly this is sore topic for you.

#43 hohoho on 04.20.14 at 8:26 pm

> … Nobody denies offshore money influences markets. But it is not responsible for Van crack shack mansions. You did that …

Touché. HAM only makes monster mansions unaffordable, not 120-year-old Victorian semis. Sales figures for above and below $1M show CMHC influence on the housing market.

#44 Smoking Man on 04.20.14 at 8:29 pm

#37 randman on 04.20.14 at 8:19 pm

Ever heard of THE UCC.

Like a wrench in the bell curve….

#45 Freedom First on 04.20.14 at 8:31 pm

Great post Garth!

Yes, the Canadian: Financial Industry, the RE industry, the MSM, and the Government have all done exactly what all of the other countries did to feed their own RE binges which lead to horrific RE market crashes. Market manias are seen by many people as they are occurring, but often only seen by many millions of people after they personally have been fleeced into financial ruin. Moral hazard, great title to match the great pic.

#46 Entrepreneur on 04.20.14 at 8:31 pm

We found American people really nice when we were down in the States a while ago but we don’t like the politicians so much and that goes with Canada too. Were you a politican at one time Smoking Man?

This is for the flippers or neighbours that only think of fixing their place but could care less what they do to your side of the property. These rude people read The Ten Commandments wrong; it doesn’t say “Piss on thy neighbour.”

The bank is just trying to be a mommy and daddy trying to help out. So sad. The wheels are turning loud and fast now. Not nice to treat people like this.

#47 Craig on 04.20.14 at 8:32 pm

“Nobody denies offshore money influences markets. But it is not responsible for Van crack shack mansions. You did that. — Garth”

Furthermore you’ve stated in numerous posts, including tonight’s post, that British Columbians are “too poor” with “negative bank accounts”, who can barely muster up the 5% down payment to buy a crappy cornflake condo.

So if by your perpetual declarations that British Columbians can’t buy million dollar homes, who’s buying them?

#48 airhead princess on 04.20.14 at 8:45 pm

Garth….you are cracking us up with your wacko stand against any admission of the existence of HAM. The Government of Canada, China…City of Vancouver, all newspapers, land titles office, South China Morning Post….CRA etc etc ad nauseum have all published papers and statistics about the state of HAM in Vancouver and Canada in general. You alone are the barking dog . Have you ever been to Vancouver….. aside from a hotel ballroom in Burnaby?

Those people live there. Like you. — Garth

#49 Roman on 04.20.14 at 8:48 pm

Absolutely see no reason why banks shouldn’t PAY clients to sign them up for a mortgage. They would make so much sense.

This works so beautifully with car dealerships and (where factory pays incentive to dealers to sell cars).

You just need to bring it to a logical end: one goes to a presentation center, signs up mortgage with 2000$ on unit delivery, and the bank finances everything else and pays you directly 500$ for sign up. Can be done through a broker of course, lets apply some best practices here.

#50 Kreditanstalt on 04.20.14 at 8:52 pm

How about doing away with taxpayer-funded mortgage insurance altogether?

What about forcing the Federal Government to live within its means, balance its budget annually and quit issuing new debt?

How about instructing the Bank of Canada to quit manipulating (“targeting”) interest rates and get out of the asset-propping-up business?

Or just abolish it. Think how prudent and responsible lenders would become overnight without a money printer behind them!

And imagine how affordable housing would become – INSTANTLY!

#51 Smoking Man on 04.20.14 at 8:52 pm

 Entrepreneur on 04.20.14 at 8:31 pm

Chill out man, idiot Americans are those that get hammered at casino’s and want pics with me….

That’s why I’m never giving up my identity, celebrities have a horrible life….

I’m even signing my books, smoking man…

Who in there right mind would want the curse of celebrity…

Camera, phones, Imagen having a sore back, going for a massage where a neon sign says open…

Life would be over….

I love Americans….

#52 Victor V on 04.20.14 at 8:53 pm

http://business.financialpost.com/2014/04/20/cash-back-mortages-a-deal-from-your-bank-that-regulators-are-not-keen-on/

Rob McLister, editor of Canadian Mortgage Trends, says there’s not much banks or insurers can do if consumers are coming up with their 5% through other means, such as borrowing from family or putting it on a credit card.

“Lenders have been giving cash back, it’s kind of a loophole to the 100% financing rule prohibition,” Mr. McLister says, referring to a previous rule change that demanded the minimum 5% down. “But you can still get that down payment by borrowing at 18% on your credit card, if you want to.”

#53 Yuus bin Haad on 04.20.14 at 8:55 pm

#11 Garth is just testing you.

#54 retired WI Boomer on 04.20.14 at 9:01 pm

When I can lend out “other peoples money” and you -the tax payer- will guarantee my stupidity, well you just might have 2007-8 all over your face when the bubble blows.

Consider shorting Canada. It is apparent their Federal government is just as silly as ours.

#55 Craig on 04.20.14 at 9:10 pm

“Those people live there. Like you. — Garth”

Living there and being ‘canadian’ are two different things. Do you know the difference?

What an ignorant person you are. — Garth

#56 Joe on 04.20.14 at 9:11 pm

#6 Bill Bonkers
My point is that if anything goes sideways with this amount of debt/leverage he’s done.
No backup plan, no cash in the bank.
All in.
For anyone who follows cyclical patterns Sept 2015 is the beginning if the next war+economic cycle.
It’s the perfect storm.

#57 Craig on 04.20.14 at 9:13 pm

“Those people live there. Like you. — Garth”

Also, the talk of the town is how there are no lights on most of the properties owned by foreigners because they don’t actually live there.

Coal Harbour is called a ghost town because so few people actually live there.

#58 n416 on 04.20.14 at 9:29 pm

Smoking Man’s Mystery Solved!

It’s all coming together now:

Long ago, when Smokey was a young lad, a Smoking Boy really, he was rejected by a prestigious all-boys private school in Toronto, Upper Canada College (UCC).
Who knows now why he was rejected – was it the atrocious spelling, the evasive interview answers, the ‘chip-on-his-shoulder attitude’, the faint whiff of smoke around him?
We don’t know, and don’t care. The fact is he was rejected, and had to attend a local public school on the wrong side of the tracks. When the time came to go to college, the only one Smokey managed to gain admittance to was Seneca College (not exactly Harvard), also in Toronto.
The shame of failure, the public humiliation, the dread of the “And where did you go to school” question were seared into Smokey’s psyche. The scars ran deep. Smokey needed an outlet for the rage burning inside him. He stopped meeting people. He has found solace in a bottle, sometimes something stronger. He railed against the educational machine, hoping that by putting those preppies down he would elevate himself above them. But something deep inside still caused him to crave the high life that passed him by, the magical letters UCC kept calling his name… So when drunk or high only moderately, Smokey invented a Universal Consciousness Consolidator, just to get a little UCC in his life. Smokey would soar in rapturous stupor and observe the burghers, way below, going on about their boring life, with their resumes and obedience certificates. When crashing back down to Earth, Smokey invariably landed near the dreadful Seneca college – which in his hallucinations became Seneca Niagara Casino & Hotel.

#59 Smoking Man on 04.20.14 at 9:29 pm

WTF is a TRILOBITE

Got a message from the UCC..

ANYONE?

#60 tkid on 04.20.14 at 9:47 pm

A trilobite is a marine fossil from millions on millions of years ago. There is, or was, a quarry near Welland Ontario where you could find the odd trilobite fossil. I found a trilobite’s tail there, fossilized. I gave it to the teacher as he seemed fascinated with it.

Trilobites are very very cool and if anyone has called you a trilobite, or compared you to a trilobite, it is absolutely a compliment.

#61 Porsche on 04.20.14 at 9:48 pm

Keystone delayed again… ha ha

http://finance.yahoo.com/news/pipeline-delay-gives-boost-obamas-140311787.html

#62 dan on 04.20.14 at 9:51 pm

do I feel anti Chinese sentiment in some posts here?

#63 tkid on 04.20.14 at 9:56 pm

Keystone delayed again… ha ha

I do not know what Obama’s problem is. He has a war over oil and gas brewing with Russia. Russia has threatened to cut off supplies to a Europe who is now demanding supplies from the US.

And Obama’s response is ‘Canadian oil is dirty oil.’

WTF? I mean seriously now. Would not the intelligent move be to secure Canadian oil for the US, even if it is to refine and ship it off to Europe?

By the time the US and Obama decide Canadian oil isn’t so dirty we might be shipping it north to Putin.

#64 Fractional Reserve Donut on 04.20.14 at 10:20 pm

r > g.

Is there a way out? If there is, it’s closing fast.

Will you make it?

#65 James on 04.20.14 at 10:23 pm

Interesting. Preparing to purchase a home in the US, and I’m subject to an inspection of my assets that are going to go into the 20% downpayment. Lenders here actually care that you have your own money to put towards a purchase, and not the proceeds of another loan.

5% is almost nothing in terms of equity. It means the bank (or rather the government) is on the hook for the vast bulk of the purchase price.

#66 Suede on 04.20.14 at 10:30 pm

How do I make a large home loan to someone and get insured by CMHC?

#67 Jen on 04.20.14 at 10:32 pm

@tkid

I think Smoking Man actually meant “troglodyte”, not “trilobite”. Whether his mistake was a result of the alcohol or his lack of an “obedience certificate” is debatable. It could be both, I suppose.

#68 Vangrrl on 04.20.14 at 10:32 pm

The ad: ‘You’ve scrimped, you’ve saved… Demonstrated your commitment…’ And yet have only 12k?? Who are the people they’re targeting? 22 yr olds? 12 grand is pocket change if you’re mid 30s and up. I love the ‘clap on the back, good on you self-denying Canadian, now you can TREAT yourself because you scrimped for oh, 2 years?…. My god we are entitled. Pathetic.

#69 MathProfessor on 04.20.14 at 10:33 pm

The graphs clearly show that HAM is the cause of prices going up up up in West Van and Van West.

Otherwise, prices in North Van and East Van would have risen just as much…

And seriously, do you really think people care about mortgage payments when buying $3 million dollar homes. $15,000 a month mortgage payments by locals???

Its HAM.

#70 will on 04.20.14 at 10:35 pm

Garth, a blast from the past: The following is a small extract from a book called “From Sour Dough to SuperStore. The Kelly Douglas Story”(1990):

“But the CPR boom years that Vancouver enjoyed between 1886 and 1892 were beginning to wind down. A number of small stores and some of the high rollers declared bankruptcy. Logging declined in step with economic depression in the United States. For the first time, Vancouver saw men out of work as construction stopped and salmon canneries and mills closed. Real estate values fell as mortgages were foreclosed on some of the West End mansions of the newly rich. . .”

Well we hope for Vancouver’s sake that history does not repeat itself, but if it does, watch for churches to be setting up soup kitchens.

#71 45north on 04.20.14 at 10:39 pm

So how does Vancity pay for this largesse, and the flaunting of CMHC guidelines?

Vancity cannot know whether or not CMHC will actually pay in case of default. A one page letter would set them straight.

#72 KommyKim on 04.20.14 at 10:43 pm

RE: #47 Craig on 04.20.14 at 8:32 pm
So if by your perpetual declarations that British Columbians can’t buy million dollar homes, who’s buying them?

The banks; via finanical illiterates who only look at the monthly payments. Low interest rates have driven this mania and only higher rates will quell it.

#73 mustamortize on 04.20.14 at 10:45 pm

Just to clarify something in the post: if a BC credit union is lending over 80% LTV, the mortgage cannot be interest only. All insured high ratio mortgages must be amortizing – interest only high ratio died in 2008 with the first of F’s changes.

#74 Nemesis on 04.20.14 at 10:47 pm

#MoralHazard #AllSheWantsToDoIsDance #ButButThey’reSoWellEquipped

Yikes! That LeaderIllustration, AuldPol… it works. On so many levels.

Actually happened to me once. Twice – if you count the GreyWhale. I digress…

The DeeperMystery is, “Why does MoralHazard+Vancouver = DonHenley?”…

I guess it’s because, you can take the Bunny out of HollyWood… but you can’t take the HollyWood out of the Bunny.

FoodForThought – an EcdysiastParable [strictly speaking, I wouldn’t watch this if I were you, SM – it could lead to MoralHazard]:

http://youtu.be/DHLObEGxZT4

Oh yes… we’re back to the Chinois debate again, are we?

How tiresome. All I’ll say about that, is this, “And yet it moves.”

I might to add to that…

They Don’tDance but they sure are well equipped… and they certainly know how to march…

Say, have you been RobsonStrasse lately, AuldPol?:

https://www.youtube.com/watch?v=1vA4T1wfJLE

[NoteToSelf: BuyWhiteFlag… assiduously practice MandarinObeisance… Pray you are captured by that battalion and settle for nothing less than the harshest regimes and strictest of punishments. Oh yes.. commission Merle Hazard to perform the Obligatory POW Ballad… CollectRoyalties. Move to a LaneWay.]

#75 P-gizzle on 04.20.14 at 10:51 pm

If the average household income in Van is roughly $84 000, how did prices get so high. Maybe it’s being driven by people who live in places where they make more than $84 000?

Until you’ve been to a few open houses in Vancouver, you can’t tell me that offshore buyers have no impact on prices. It may not be PC, but it’s not racist, nor is it xenophobic.

How do you possibly know they come from offshore? — Garth

#76 IN MISSISSAUGA on 04.20.14 at 10:52 pm

How come:

2290 Saxony Crt back on the mkt for another auction:

http://www.realtor.ca/propertyDetails.aspx?propertyId=14311186&PidKey=87903596

#77 Meager Bacon on 04.20.14 at 11:09 pm

How much longer will the market remain irrational before I become insolvent? There has to be some end in sight with this type of behavior..can’t go on forever.

#78 Bumbly Bratwurst on 04.20.14 at 11:12 pm

Garth, you have mentioned Canadian cities where there are many realtors and low sales like Toronto for example.

In what Canadian City would there be a high proportion of real estate sales to realtors in business? May such a city attract more realtors in the next few years?

#79 Shawn on 04.20.14 at 11:13 pm

So you Wanna open a bank…

Suede at 66 asks:

How do I make a large home loan to someone and get insured by CMHC?

********************************************
It’s easy, just come up with millions of capital to start your own bank and be sure to follow tons of regulations. For CMHC loans follow their guidelines.

There have actually been a good number of new banks opened in Canada in the past ten years.

It can be done but it is a daunting task. Be prepared to lose money the first five years, at least.

It would be easier to buy some bank shares.

All this talk of CMHC and HAM is wasted breath. To whatever extent those two things drove up the prices that won’t be changing any time soon so why bother whining?

The thing is make your bet on which way house prices will go and if you want to make a financial bet on it go ahead.

You can’t short houses, but you can short a mortgage lender like Home Capital. Go ahead. You pays your money and you takes your chances.

Vote with your wallet.

I have made financial bets that U.S. house prices will rise. Bought shares in two U.S. banks and a U.S house builder. So far, so good.

I also basically long the Canadian house market as I own a house and my largest equity is a residential land developer in (mostly) Alberta.

I paid my money and I takes my chances.

#80 drydock on 04.20.14 at 11:14 pm

Toronto food bank usage up in suburbia, saw the same thing in Vancouver.

http://news.google.ca/news/url?sr=1&ct2=ca%2F1_0_s_8_1_a&sa=t&usg=AFQjCNGYirMY-BkGa9z79rMzpzcI2uWylA&cid=52778475442692&url=http%3A%2F%2Ftoronto.ctvnews.ca%2Fvisits-to-food-banks-in-toronto-s-suburbs-up-almost-20-since-2008-1.1782655&ei=5IpUU9_VPIPRgAeg8wE&rt=SECTION&vm=STANDARD&bvm=section&did=-5674796689643866681&sid=en_ca%3Ab&ssid=b

#81 sheane wallace on 04.20.14 at 11:17 pm

This is insanity.

savers: you screwed!

#82 BG on 04.20.14 at 11:20 pm

I saw this Toyota TV commercial today.
Like usual, they were talking money in terms on monthly payment rather than actual the price.

The joke of the commercial was some dude – having just bought the car – not being able to tell his friend the actual price of it. He would only say “$$$ monthly” or “$$$ daily”.
And they made it sound like this was a selling point.

We’re so screwed.

#83 Doug in London on 04.20.14 at 11:25 pm

@Meager bacon, post #77:
Yes, the market is irrational, no doubt about that. If you don’t own a house and stay out of the market, or sell a house and take your profits if you do own one how would that make you insolvent? If you avoid an irrational market that should PREVENT you from becoming insolvent. I highly recommend you read past postings in this blog.

#84 Old Man on 04.20.14 at 11:28 pm

#63 tkid – Refineries in Europe are closing down as refined oil is being shipped from USA now. Who will be the biggest oil producer in the world next year – USA.
Canada is fast asleep as our oil and gas transmitted through pipelines has increased in cost by 60% in the past 5 years. Caesar and his sock puppet were at a meeting in Germany recently explaining to Angela Merkel that our vast gas supplies could replace Russia if needed. Angel laughed in his face for him thinking long term, as she had to explain to this idiot that Canada didn’t even have the infrastructure in place. Now while Caesar is spinning his wheels, the USA commenced in 2010 spending $billions to retrofit existing LNG terminals to export natural gas by ship tankers to fuel the needs of Europe in the immediate future. In the meantime Caesar and his gang of misfits are going in circles making speeches about pipelines, and are looking for the $3.1 billion that is missing.

#85 Tripp on 04.20.14 at 11:40 pm

“Another quarter say they’ll be buying lottery tickets in order to fund a real estate down payment.”

Wow, hard to believe how many of us have lost the ability to think rationally!

#86 ozy - does it mean Toronto has 50% more appreciation in the wings on 04.20.14 at 11:57 pm

does it mean Toronto has 50% more appreciation in the wings?

if so, I TOTALLY love the Vancouver-ization of TO. Tight is good.

“The average Vancouver detached house costs $1,209,452, or 20% more than in Toronto, where three times as many people live, making 30% more income. But this is an improvement. A few weeks ago Van SFHs averaged $1,361,023.”

#87 My Life is a Pile of Shit on 04.21.14 at 12:05 am

If a credit union can upfront half the down payment by charging more interest, why can’t it upfront the whole down payment and charge even more interest? What’s better than buying real estate with 2.5% down? Buying real estate with nothing down, of course! It shall be called The Down Payment Eliminator Mortgage.

#88 Ralph Cramdown on 04.21.14 at 12:15 am

#63 tkid — “I do not know what Obama’s problem is. He has a war over oil and gas brewing with Russia. Russia has threatened to cut off supplies to a Europe who is now demanding supplies from the US.”

Reason it out.

– Putin and his band of merry Oligarchs need revenue from selling energy to Europe, hopefully under current quasi-monopoly conditions, as much as Europe needs the energy.
– Eagle Ford and Bakken producers probably aren’t keen on a big pipe from Canada making oil prices more competitive for Gulf coast refiners.
– Many US consumers, including all those along the eastern seabord, already pay energy prices linked to the market in the North Atlantic basin and Brent crude prices. Keystone XL wouldn’t change the prices they pay.
– Your average energy consumer probably doesn’t have a lot of faith that KXL would mean a big drop in energy prices, soon, but a lot of Democrat supporting environmental supporters consider it a defining issue.
– Steve Harper and the various Alberta premiers have done less than zero to get to yes, even to the point of public statements that if this president says no, they’ll wait for the next one.

Energy independence? Right now North America is sitting on what some estimate to be a century’s supply of natural gas. Rather than keeping the cost of living advantage of cheap home heating, and cheap petrochemical feedstocks for for the chemical manufacturing industries and those which use them as inputs, we’re frantically building LNG export terminals which can only increase the cost of domestic gas and decrease energy and chemical feedstock prices in foreign countries.

Place your bets.

#89 Doug in London on 04.21.14 at 12:22 am

The more that housing’s expensively unattainable, the more people crave it.
—————————————————————
That’s so counterintuitive. With prices so high, and such a big mortgage to maintain a house if you buy it, why don’t more people just say to hell with it and rent?

#90 johnny d on 04.21.14 at 12:39 am

The Chinatization of Canada continues. With people living in converted garages, sheds, multiple families per home, all we need is a good shanty town or two in Vancouver. Soon people will pay their life savings for a spot in a trendy neighborhood that looks like this:

http://mobile.bloomberg.com/image/index/pKISbwVuPwu-CpydsHPB-_ZzUeF8YNn3pSP_hdYcB-j_KGwrQHg-BQQNye7mpv9YsmxWeDgUMdFCQD2u5sKfDJjCkKewecua_szkFcu9T9WGnVy_Lawbu0V8rpjFW0EqSy9LgdOivoZIgoTTnmDMHy35BzMj8JEBB702nFK7sJhhzsGQ5g**

#91 Spectacle on 04.21.14 at 12:48 am

Thanks Garth, your tenacious as always!

#11 pathcontrolmonk on 04.20.14 at 6:41 pm
What is “kool-aid”?

My answer today:

Drinking the Kool-Aid” is a metaphor commonly used that refers to a person or group holding an unquestioned belief, argument, or philosophy without critical examination. It could also refer to knowingly going along with a doomed or dangerous idea because of peer pressure. The phrase derives from the November 1978 Jonestown Massacre, where members of the Peoples Temple, who were followers of the pro-Communist cult leader Reverend Jim Jones, committed suicide by drinking a mixture of a powdered soft drink flavoring agent laced with cyanide.

Much like the governing members of society who are destroying our Western society through the “Agenda 21”.

Real estate will be the least of your worries. Our society ( Greece, Spain, China, America, Canada, EU) is being divided up, and Crushed. Eg: did anyone really vote to close bridges , shut streets for bike lanes, shut down water generated electricity, …. Confiscate land from homeowners for pipelines. Anyone?

Do your research, as Garth helps guide the way. And get involved before it’s too late. Google Rose Koire , Behind the Green Mask. It supports what Garth is illustrating daily for us, and he does it free of cost!

#92 Doug from Victoria on 04.21.14 at 12:51 am

For Vancouver real estate, maybe it’s not a question of where the people came from but where the money came from? It sure didn’t come from 84k a year wages and likely not from big money elsewhere in Canada…

#93 P-gizzle on 04.21.14 at 12:55 am

“How do you possibly know they come from offshore? — Garth”

Our RE agent is Chinese… she’s not shy about asking agents or chatting up house hunters.

I’m not saying offshore buyers are the ONLY reason, but to deny any impact isn’t a fair representation of what’s going on.

#94 Agnes on 04.21.14 at 1:03 am

Three things.

1) Trend is up over 25years period.

2) Cheap mortgages guaranteed to reset higher in a few years. – Garth.

Partially true. Except that rates will be marginally higher.

3) Population growth exploded between 1960 and 2011. Matter of supply and demand.

#95 Red Deer Rob on 04.21.14 at 1:06 am

I still have an account with Vancity even after moving to Alberta. Not too sure why I still keep a balance in there. Maybe it’s time close that chapter of my life and move on.

I’m an Albertan now and need to let go of the delusional Vancouver dream.

Too many young people in my demographic trading freedom for real estate and debt servitude. It boggles my mind how people make these ridiculous purchases without ever crunching the numbers. They’re like sheep going to the slaughter.

For me, I avoided the trap reading books like – The Theory of The Leisure Class – by Thorstein Veblen and – Wealth of Nations – by Adam Smith. Both are excellent observations of how society and economies work. I recommend those books to my like minded blog readers.

#96 ultraman on 04.21.14 at 1:13 am

“Vancity, BC’s local bank which masquerades as a credit union.”

You got that one right. I should know, I worked there for 11 years. Employees are pressured and formed to take advantage of the innocence and ignorance of the people. Success in doing so is acknowledged in a cultish kind of way.

#97 stop lying on 04.21.14 at 1:18 am

How do you possibly know they come from offshore? — Garth

http://www.businessinsider.com/if-china-is-an-economic-miracle-why-are-their-millionaires-leaving-2011-11

The gist of the 2011 survey: ~960,000 millionaires (assets over 10,000,000 yuan which in 2011 worth about 1,600,000 cad), 60% of which want to or are in the process of emigrating, 37% of which whose destination of choice is Canada.

That 37% is equivalent to 213,120 Chinese who had over 1.6 million dollars CAD who wanted to come here.

In 2011 there was 185,000 millionaires in Canada.

No HAM here, right…

#98 Future Expatriate on 04.21.14 at 1:58 am

#63 Obama’s problem is simple.

Pipelines leak. Like, always.

#99 Marco Polo on 04.21.14 at 2:30 am

The monster home at 2290 Saxony didn’t sell. Its up again for auction Apr 27. I remember before this housing bubble there were many more properties sold by auction. Perhaps a taste of the future.

#100 Painted Toenails on 04.21.14 at 2:40 am

First hand experience with HAM. In Victoria. The wife and child are living in one of their million plus homes in ‘town’ while the husband is working – presumably in Hong Kong, perhaps somewhere else.

HAM exists here. It really does. To what extend is arguable.

These folks bought several verrry high end homes about 4 years ago and have lost hundreds of thousands as the market has fallen.

This does not appear to have affected their plans to purchase a high profile property here at all. Mention has been made of the bad market but it is dismissed as having been a few bad years. “The prices are going UP”.

#101 devore on 04.21.14 at 2:53 am

#77 Meager Bacon

Why would you become insolvent? Did you borrow a bunch of money to short it?

#102 jane24 on 04.21.14 at 3:02 am

I have a feeling in my bones from being old and having seen several RE crashes to date that interest rates have at last reached the end of their low rate cycle and will move up in the short term.

Hubby and I are either eliminating debt or setting it in stone.

Canada will also feel the chill but not through govt mortgage changes as too close to your federal election and no one wants blood on their hands. When interest rates move up globally it won’t be the Canadian govt’s fault, it will be blamed on the market, but move up they will as inflation is down everywhere.

Young folk should enjoy their 20’s, travel, change jobs to build careers – you are indeed only young once. Building a property too early in your life ties you down and brings in too much stress.

#103 Freedom First on 04.21.14 at 3:07 am

#59 Smoking Man

Trilobite- a computerized laser lobotomy procedure.

A Trilobite is performed only for the purpose of altering the brain waves of a normally sane person to facilitate an overwhelming obsession with buying an overpriced house/condo.
Also known as becoming “house horny”.

#104 Buy? Curious? on 04.21.14 at 3:44 am

Um, that Killer Whale is swimming AWAY from the dog. See the direction of its dorsal fin. So like most people, some see the pint glass half-full or half-empty and it’s the same with risk. Some see the reward, others are immobilized by fear.

Take these Chinese people that come over to buy a property, do you think it’s going to stop anytime soon? If you buy a property now, and sell it in a few years time to some family from China, do you think you’ll sell it for more or less than what you paid for it? You’ll probably make 10x what your deposit was, then you can scurry to Winnipeg, Hamilton or St. John’s and buy the house of your dreams then. Vancouver has the worst Canadians. They’re all so angry and blame everyone for their problems. I’d never go back.

Speaking of Canadians, on a whole, they have to be the most sheltered, closed minded, (Garth, could I reference a cute term used for cats?) on the entire planet. It’s the land of Forrest Gumps, well, east of the rockies that is.

https://www.youtube.com/watch?v=tf8sH0qfmD8

Rob Ford 2014! You know he’s going to win, don’t you?

#105 diff-rent-Dan on 04.21.14 at 3:50 am

the deniers,

Forget it, I’ve made mention of the Mysterious Money,(is that more politically correct);here in n.van.BC,the sales continue,and nothing under 1.5 million
I might add, and yet a bunch of the recent sales remain
empty to this day.Who might I ask could possibly afford this kind of expenditure,at least my fellow locals,anyways,without an attempt at least to try and
rent the places to recoup some of that cost! I don’t
understand why this irks Garth so….boots on the ground,so they say. I agree about the hysteria from the past media (bctv et al), but that does nothing to
disprove my point today.
Dan

#106 Bullishbcbear on 04.21.14 at 5:53 am

Look out San fransisco Vancouver is nipping at your heels There are two places in the world where HAM wants to park and sit. San Fran and Vancouver screw The T.O. It’s nothing but a vapid Canadian backwater , van is the gateway to Asia and all the property is boxed in by mountains and ocean. Garth I love ur blog and insights and agree with u on the rest of Canada But as far as SFH are concerned Van city is rock solid. Nothing will stop the foreign buyers. These statistics aren’t kept for a reason Good luck everyone!!

#107 Hamlessinseatle on 04.21.14 at 6:57 am

All this HAM talk. What if it were substituted it with HRM?

Hot Russian Money. Pastey white enuff ? Lol lol

#108 maxx on 04.21.14 at 7:10 am

#24 dan on 04.20.14 at 7:31 pm

“all people today are homeless because the most important relation they have with their homes is monetary value.”

Brilliantly put.

Huge swaths of cash need to be sucked out of circulation.

Yesterday…no, at least 14 years ago.

#109 maxx on 04.21.14 at 7:29 am

#26 Ralph Cramdown on 04.20.14 at 7:44 pm

Excellent read. Unassailable, interesting and relevant, as usual. We are truly fortunate to have you post here.

#110 unbalanced on 04.21.14 at 7:32 am

Craig—-have you ever heard the saying ” The Truth Hurts”. There you have it. One only has to realize the truth. The other part is accepting it. Even when crimes are committed. Is the proper sentence applied? Sssshhhh, be quiet. It isn’t the flavour of the topic some don’t want to hear. Oh well. Just have to remember this is not your blog.

#111 OttawaMike on 04.21.14 at 8:06 am

Ralph Cramdown on 04.21.14 at 12:15 am

All good points.

The question I always ask is why nobody wants to invest in a major refinery here in Canada so that we can export high value finished petroleum products?

#112 the jaguar on 04.21.14 at 8:09 am

#63 tkid: don’t look now, but something is gaining on you….it’s called American self sufficiency in oil. they don’t need Canadian oil. But destabilizing Russia could allow them access to building a pipeline across Syria to access European markets…that’s what they really want. It’s all about the money. Just another little bit of trouble being stirred up somewhere in the world in the name of “bringing democracy to someone who needs it”. But you never see them bringing “democracy” to places like the Congo or Rwanda. Only oil rich countries like Venezuela, Equador, Iraq, etc, etc. Follow the money/oil trail……

#113 chickenlittle on 04.21.14 at 8:19 am

Re: Smoking Man:

Hahahaha!!! That’s hilarious!

I’m glad you and the Mrs can have a few laughs!

#114 TurnerNation on 04.21.14 at 8:27 am

Things I learned in the Toronto Sun this weekend:

– Splashy ads with 96(!) month financing term on cars and trucks.
– “They” from “over there” coming to get us! Vote Cons.

#115 Really on 04.21.14 at 8:30 am

post 75
How do you possibly know they come from offshore? — Garth

-because they don’t speak English. Yes they may have Canadian Citizentship … but even you are not that naive.

That just told me a lot about you. — Garth

#116 Mac Marketing remember us? on 04.21.14 at 8:34 am

Here’s some info on the latest Mac Marketing marketing fiasco, very interesting reading:

http://whispersfromtheedgeoftherainforest.blogspot.com/

If you’re from BC urge you to write the RECBC and the BC Finance Minister to let them know your thoughts. Both of their email addresses are contained in the web article above.

#117 fixie guy on 04.21.14 at 8:38 am

“In other words, you no longer need 5% ….”

It hasn’t been a requirement for a long time. Commercials for down-payment loans saturated the airwaves out West for years. Somehow they remained unheard by market analysts.

#118 Penny Henny on 04.21.14 at 8:50 am

Garth-Here we are: real estate at grossly inflated levels. Banks dropping lending standards. Ownership with just 2.5% down. Cheap mortgages guaranteed to reset higher in a few years. So how, exactly, is this different from the US, circa 2004?
——————————————————-
Mortgage to reset at higher levels in 5 years. So does that mean 5 more years before the crash?

#119 T.O. Bubble Boy on 04.21.14 at 9:19 am

$900k House of the Day for Monday, April 21st:

3 Finalists
1) Semi-detached $899k dump near College/Dufferin, which apparently brings in $65k per year in rent.
2) Completely generic and unimpressive $899k burbs house near 407/Dufferin
3) 2-bdrm bungalow near Yonge&Steeles, which apparently just renovated even though the buyer would likely tear it down

WINNER
I’m going with #2. I’m still in shock that everyone in the GTA thinks that their 20+ year old basic burbs house is worth close to $1M.

#120 BigM on 04.21.14 at 9:38 am

I’m still in shock that everyone in the GTA thinks that their 20+ year old basic burbs house is worth close to $1M.

It is worth it, because there are still people dumb enough to pay that kind of money for it.

When we run out of these people, or better to say when they run out of money, then something can be done.

#121 Big Brother on 04.21.14 at 9:47 am

#21 Smoking Man on 04.20.14 at 7:17 pm
#7 Chickenlittle on 04.20.14 at 6:30 pmHappy Easter everyone!
BTW Smoking Man, I Googled that guy (something White) that you were signing autographs for.
I’m disappointed. That’s not what I pictured you looking like. I had imagined sort of a Gary Busey type.
Oh well.

……….

Americans are idiots, mind you the ones wanting pics and autographs, hammered…..

This one chic was rubbing my back, in clear view of my wife…
I look over at her with a bit of a smug grin
My wife nearly died laughing.
Knowing how disappointed that chic would be if we went up stairs…
That’s love is all I’m saying

……………………………………………………………………..
Yep that pretty much sums it up as for the image.
Smoking Man as Walter White in the world of MKULTRA, this is our territory. We make the chemicals that Smoking Man comsumes. We also programmed Gary Busey!

http://uproxx.com/tv/2013/03/definitive-walter-white-gifs/#page/1

#122 I m sofa king wee Todd did on 04.21.14 at 9:48 am

#119 T.O. Bubble Boy on 04.21.14 at 9:19 am
$900k House of the Day for Monday, April 21st:

3 Finalists
1) Semi-detached $899k dump near College/Dufferin, which apparently brings in $65k per year in rent.
————————————————
check out the photos, one of the bedrooms seems to be part of the living room

#123 Aggregator on 04.21.14 at 9:56 am

#71 45north

So how does Vancity pay for this largesse, and the flaunting of CMHC guidelines?

Banks, CUs and other lenders don't pay for anything. It's all about funding mortgages with conventional (if possible) or unconvential means to capital. Some of the larger CUs are using government-backed mortgage securities (through CMHC), but not all. Some are forced to take more risk and pile up risky loans on their balance sheets, since not doing so and missing out on the wave of rejected borrowers from major banks could put them out of business.

The problem is: when 80% of mortgages sit on the Big Six's balance sheet, and the government and the BoC have to continually provide them with guarantees and access to capital, the result will eventuallly lead to failures for ''too little to care' lenders. You can't have your cake and eat it too!

Here's a list what happens monthly to American CUs and small regional banks who take on too many risky loans or lost access to capital markets. Failed Bank List

It's not an immediate problem for small Canadian lenders, but it will be as they add more combustable material on their balance seets. All it takes it is a little market volitility or some exongenous shock to create a spark — then it goes boom!

#124 sciencemonkey on 04.21.14 at 10:01 am

Did anyone notice how blissfully smooth the highways in TO were this morning? Please gov workers and schools, take every day off… (and stop collecting your pay cheques).

#125 :):(Ying Yang on 04.21.14 at 10:27 am

Now, many people in Vancouver blame filthy-rich Chinese immigrants for swooping in, buying mansions, and making real estate unaffordable, even when no statistical evidence exists. And they may be right – at least as far as the big properties on the Westside are concerned (where prices are now falling).

My family are probably one of the Chinese immigrants as discussed. My parents came here from Hong Kong around 1980, Father and Mother both worked here, well educated, father an Engineer, mother a teacher. My mother actually had to go back to university here to be able to teach. As for the rest of my family Brother born in HK, me here in Vancouver. Long story short my parents saw the light years ago and sold the family home for a nice little profit and decided to rent. At the same time back around seven years ago my brother and I bought two condos for investment. I gave mine to my parents to live in, they just pay the utilities and tax as i moved here to Toronto. My brother still has the condo in the same building as a rental. Both paid for thanks to renters. At this juncture we have all considered selling but my parents need a home and what the hell even if I loose 30%-40% on the market value from today I’m still above or better on investment. If I was still in Vancouver today there is NO CHANCE in hell I would purchase a condo or any property in the area. Way overpriced! My friends that still live in the area have to purchase in the valley or out as far as Abbotsford and commute. I couldn’t do it and I hate the commute here in Toronto.

#126 Doug in London on 04.21.14 at 10:29 am

@sheane wallace , post #81:
We savers are doing just fine. There’s no need to put all your money into savings accounts or GICs that pay a pitifully low rate of interest. During market dips in late summer of 2011 and spring of 2012 I scooped up some cheap dividend paying stocks and ETFs. In the last half of last year I scooped up more dirt cheap REITs, preferred share ETFs, and dividend paying utility stocks, all of which not only hum along paying out dividends and distributions, but have also gone up in price this year. I’m semi retired living off these investments, and if that’s what you call being “screwed” I want more of it!

#127 Castaway on 04.21.14 at 10:52 am

#115 Really on 04.21.14 at 8:30 am
post 75
How do you possibly know they come from offshore? — Garth

-because they don’t speak English. Yes they may have Canadian Citizentship … but even you are not that naive.

—————–

Without a doubt the most ignorant xenephobic post ever. Get a f*ing clue dude!

#128 Old Man on 04.21.14 at 10:56 am

#111 Ottawa Mike – its simple, as the cost to build a refinery is too expensive.

#129 learningfromyou on 04.21.14 at 11:21 am

What do you make the Vancouver’s issue that big?

When I decided to have a pet at home, I added some conditions to my decision and I finished having fishes, 23 of them at a minimal maintenance cost ($5/month), even when I like the dogs I saw the expenses incurred by friends, something that I avoided.

The Vancouver problem is very easy to fix. Sell and Move, I can care less if the prices are related because of the people decision or foreign nationals buying at any price. In my honest opinion is the people bad behavior.

Garth, please forgive me if I touched your heart with this post knowing that Bandit is so important to you, I just wanted to make the point.

KISS: Keep It Simple Stupid

#130 "If you can't come up with the money, you're not for real" on 04.21.14 at 11:26 am

No one with a house for sale is going to complain about where the money comes from. Those complaining here about HAM should buy Mavis Beacon software, you will achieve the same result in less time.

#131 Idiot American on 04.21.14 at 11:38 am

#51 Smoking Man on 04.20.14 at 8:52 pm
Entrepreneur on 04.20.14 at 8:31 pm
Chill out man, idiot Americans are those that get hammered at casino’s and want pics with me….
That’s why I’m never giving up my identity, celebrities have a horrible life….
I’m even signing my books, smoking man…
Who in there right mind would want the curse of celebrity…
Camera, phones, Imagen having a sore back, going for a massage where a neon sign says open…
Life would be over….
I love Americans….

AAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAA

Read your crap last night. If you love us then why do you mock us! “Idiot Americans” I’ve lived in Canada for many years now. I married a Canadian and usually find Canadians to be among the kindest, most decent and polite people I have ever met. But you I have to take notice with buddy. You are a pompous fool, a blithering idiot, and you exist in a world of conjecture. Your persona of Smoking Man rings spot on of your real feelings about us I would surmise.
Here is a piece of advice for you, Stop drinking, gambling, smoking, bullshiting and womanizing, Get a life looser!
Don’t bother replying as I’m just going to skip your crap postings and consider them Musings of an Cretin!
Best regards,
Idiot American

#132 fixie guy on 04.21.14 at 11:51 am

@#124 sciencemonkey: Fortunately low driver quality offset reduced quantity to maintain slow travel. It only takes four cars in this city to cause a traffic jam: one to block each lane and a fourth to cut in at the last fifty yards.

#133 Poorgeoisie on 04.21.14 at 12:00 pm

Anyone make an Easter HAM joke yet? As whiteys we are often racist unknowingly or without intent. In the HAM scenario, the unintended racism arrives when we presume that Chinese millionaires came upon their riches by some fluke and not by being shrewd business people. Why are Chinese millionaires dumber than European ones? Most international papers, journals or magazines say don’t touch Canada but those wacky Chinese are just too stupid, just put a couple of 8’s in the ask and those superstitious idiots will come running.
I know what’s coming “I’m not racist, I’m just stating the truth”. But we know there are no actual stats to back the HAMsteria and why is that? If the data supported the HAM proponents, the boards would love it and would plaster the numbers everywhere. But if the data showed no significant HAM impact they might have trouble using their number one sales tool: exploiting people’s prejudice.

#134 Vancouver RE agent on 04.21.14 at 12:03 pm

I have been saying this for years. ZERO DOWN has been the norm for Vancouver for many years already. For the last 2 years I have been selling in Van to hipsters most could not come up with $500 (five hundred) for any expense let alone 12K down. You borrow downpayment from the same bank under the guise. Downpayment going down, rates are going down and hipsters are getting hornier on government Viagra. Some people (like Garth) keep complaining, others (like me) keep making money. Life is good!

p.s. And btw even if rates do go up (very unlikely) and hipsters will begin defaulting in droves government will bail them out. No two ways about that.

#135 RAINCLOUDS on 04.21.14 at 12:21 pm

Interesting data revealing long term investment returns for housing in US. Of course, it’s different here………….

http://www.businessinsider.com/americans-think-real-estate-is-the-best-investment-2014-4

#136 Babblemaster on 04.21.14 at 12:39 pm

“Here we are: real estate at grossly inflated levels. Banks dropping lending standards. Ownership with just 2.5% down. Cheap mortgages guaranteed to reset higher in a few years. So how, exactly, is this different from the US, circa 2004?” – Garth

—————————————————–

It’s different because interest rates are NOT guaranteed to rise in a few years. Those mortgages could very possibly be renewed at the same low rates.

They could. But won’t. — Garth

#137 Vancity on 04.21.14 at 1:13 pm

Garth,

$1600 a month doesn’t really get you a condo that’s worth $500K… you’d be paying closer to $2000 for that kind of property. Not quite $3200, but still.

#138 On the run again on 04.21.14 at 1:14 pm

With regards to the American comments, it must be remembered that America is a Police State. The citizens in and abroad are treated with the fascist hand.

Americans are forced to buy health insurance. Americans abroad are forced to submit taxes to the irs.

There are loopholes. Get a Canadian passport only. Dont report any American identity to Canadian banks, you are not required by law to disclose. The IRS has no jurisdiction in Canada so by law the IRS cannot touch anyone in Canada, it is all empty threat.

If harassed when abroad in USA, with a Canadian passport if harassed you can make a major international incident if Us personnel harass a Canadian with dominant Canadian citizenship.

The entirety of the Usa including its fascist government and Irs can talk to the hand.(Canadians dont buy USA real estate unless you want to deal with the IRS-even though you dont live there)

#139 Waterloo Resident on 04.21.14 at 1:17 pm

========= NEWS ALERT !!!! =========

The outbreak of Ebola Virus in seven west African countries has broken through all containment efforts and is spreading like wildfire. According to Christian Relief groups working in Guinea and Liberia, the number of confirmed infections jumped 15% in just the last 24 hours.

http://www.turnerradionetwork.com/news/438-pat

Notice to everyone: If you have any friends or relatives who are visiting Italy, please contact them immediately, they have less than one week before the borders of Italy are shut to everyone. No one will be allowed to enter or leave Italy (on the punishment of death) if it is confirmed that Italy has the Ebola virus.

If the Ebola virus has been confirmed to have spread to the rest of Europe then America has already set in motion to halt 100% international air traffic between the U.S. and Europe, with Asia being cut off 48 hours later.

This is serious news guys, that virus kills 80% who come into contact with it, it is a planet killer.

#140 broadway skytrain on 04.21.14 at 1:21 pm

It’s different because interest rates are NOT guaranteed to rise in a few years. Those mortgages could very possibly be renewed at the same low rates.

They could. But won’t. — Garth
————————————–

but the 75bps they do rise will cause a small handful defaults in the 416 and 604, ergo, no impact on prices.

—————-

Here is a piece of advice for you, Stop drinking, gambling, smoking, bullshiting and womanizing, Get a life looser!

——————–
because we all know the life of a monk is the most exciting of all!

Idiot American – hard to believe anyone could get bent out of shape by smokey’s slurred rantings – it’s comedy gold, man!

#141 Smoking Man on 04.21.14 at 1:22 pm

#130 Idiot American on 04.21.14 at 11:38 am

I was in a drunken stupper?

We are all idiots…. Canadians, Americans, mount everest shurpas..

And you are right about Canadians, kind, decent, polite.

There is a word for that, it’s called doormats…. We still have the Queen on our money.

At leased you guys a long time ago stood for something… Made country….

But having a population of too many idiots, the machine spits on your constitution, and rights.

So I take it, you’re not buying my book?

#142 miketheengineer on 04.21.14 at 1:27 pm

And in Hamilton, you can get ~7000sf home, Vicorian completely renovated…just the most beautiful home you can imagine. See the article in the Hamilton Spec.

http://www.thespec.com/living-story/4472915-renwald-grand-home-recalls-an-era-of-elegance/

All for about $900,000.

I really feel for those guys whose home “fell” down during
the reno’s to the foundation, after reading this article.

#143 broadway skytrain on 04.21.14 at 1:37 pm

127 Castaway on 04.21.14 at 10:52 am
#115 Really on 04.21.14 at 8:30 am
post 75
How do you possibly know they come from offshore? — Garth

-because they don’t speak English. Yes they may have Canadian Citizentship … but even you are not that naive.

—————–

Without a doubt the most ignorant xenephobic post ever. Get a f*ing clue dude!
———————————-

i’d say it’s 100% accurate.

NOBODY , absolutely NOBODY , grows up , and goes thru the k-12 school system in canada(except rural que) and does not speak english by the end of it. NOBODY.

so if you can’t speak english it’s virtually asured you did not grow up here, and yes, you ‘came from offshore’

are you completely ‘wee Todd did’ or did sm’s teachers teach you to scream RACIST! when faced with any fact about non whites?

Millions of native-born Canadians do not speak English and enjoy every right you have. Being Canadian does not mean you are white or anglo. — Garth

#144 Agnes on 04.21.14 at 1:39 pm

They could. But won’t. — Garth

Yeah like a quarter basis points over 5 years. Look at the 10 years bond rate. Signaling low rates for a very very very long time. Hence will push RE to new highs. The losers are the ones NOT in the market.

#145 drydock on 04.21.14 at 1:41 pm

http://www.maxkeiser.com/2014/04/mortgage-standards-are-plunging-its-muppet-fleecing-time-all-over-again/

#146 Agnes on 04.21.14 at 1:42 pm

Furthermore, a crash or significant correction is highly unlikely given that 2008 was just a few years ago. Maybe the next generation, maybe in the next 35-45 years.

#147 Nemesis on 04.21.14 at 1:47 pm

#FoodForThought #GameTheoreticalApproachesToPoliticalEconomy
#TheBichler&NitzanArchives #Chartism

[DV] – Profit from Crisis

…”Whether they are private owners like Warren Buffet or institutional investors like Bill Gross, they all seek not to perform but to out-perform – and outperformance means re-distribution. Capitalists who beat the average redistribute income and assets in their favor; this redistribution raises their share of the total; and a larger share of the total means greater power stacked against others. In the final analysis, capitalists accumulate not hedonic pleasure but differential power.”…

http://dissidentvoice.org/2014/04/profit-from-crisis/

#148 Agnes on 04.21.14 at 1:48 pm

#120 BigM on 04.21.14 at 9:38 am

Not when a dump cost 1M in downtown. Its all relative and bang for the buck. Everyone knows price won’t go back to 2009 level except for most people on this blog. Its nice to dream about it though. Alas, only a dream though.

#149 fixie guy on 04.21.14 at 1:49 pm

For those fixated on the effect of interest rates on the housing market, below are the American prime rates leading up to the 2008 collapse:

December 13, 2005 7.25
January 31, 2006 7.50
March 28, 2006 7.75
May 10, 2006 8.00
June 29, 2006 8.25
September 18, 2007 7.75
October 31, 2007 7.50
December 11, 2007 7.25
January 22, 2008 6.50
January 30, 2008 6.00
March 18, 2008 5.25
April 30, 2008 5.00
October 8, 2008 4.50
October 29, 2008 4.00
December 16, 2008 3.25

Their market collapsed when fraudulent mortgage lending practices flooding the market with high risk debt were finally revealed. Once that firehouse of liquidity was turned off it was game over no matter how interest rates changed. The Canadian difference is our federal government holds the fire house.

#150 coastal on 04.21.14 at 1:50 pm

Victoria real estate agents are so fricking desperate they went on CTV news last week claiming the Asians are buying back in to Victoria in a big way. Only problem is it is a very small area located by the university where Asians typically buy and ISN’T newsworthy. Of course the segment ends with the “will this Asian buying spread to the rest of Victoria ?” . It was so pathetic they may as well had a helicopter land at UVic. Since Victoria prices are the one market that’s down almost 10% from the rest of the country what’s so wrong with a little yellow journalism right ?

#151 Shawn on 04.21.14 at 1:54 pm

Whither the Debt Crisis?

A coming debt crisis and credit collapse has long been predicted and has refused to arrive although we got close in 2008.

At some point defaults could precipitate a debt crisis and credit would dry up. Or maybe credit will dry up precipitating a debt crisis.

You would think default rates would rise in advance as a warning sign. But the thing is the looser that credit is the lower the default rates (for a while at least). No one need default when new money can be borrowed to pay previous debts and interest on previous debt.

In today’s easy credit world, defaults are at record lows despite so many people apparently being over-indebted.

The bottom line is that the debt crisis may arrive rather suddenly without warning and credit windows slam shut all at once and it is reveraled that without new debt many people can’t pay the interest on the old debt.

Well, we shall see.

In regards to debt, Buffett has said never get into the position of being reliant on the kindness of lenders.

#152 sciencemonkey on 04.21.14 at 1:55 pm

I don’t think prices will ever come down in the GTA; I predict at least 5% yearly growth for the next 20 years, which would bring a $900,000 house to $2.4 million. (Note that I don’t own any RE, so I have nothing to gain from this. I’ll still be living in my walkup apartment.)

Sure, doomers say previous bubbles always ended up bursting, so it’s inevitable this one will as well. I think we need a new analogy when talking about RE prices: credit is to RE prices, as world food production is to the Earth’s population. Historically we have had a low Earth population, and famines that periodically reduced it in certain areas. However, all the while humanity worked to improve its food production technology. Look at our recent green revolution, and how high a total population we’ve reached!

Keeping with this analogy, past RE crashes (and perhaps one or two more in the future) are just credit famines. We will continue to improve the reliability and capacity of our credit production technology, and as a consequence we will experience fewer credit famines, and reach new plateaus in the cost of everything.

This vancity downpayment helper is just one example of a small new innovation in credit production technology. Generational mortgages in Japan are another. I have a good idea to throw in: since we get TFSA room increases pegged to inflation, it certainly makes sense to lobby for similar increases to the CMHC limit. In fact, we might use a delicious bit of circular reasoning to demand that the CMHC limit increase at a rate pegged to CREA’s numbers for RE appreciation! All it takes is a little imagination to be a credit production innovator.

#153 Old Man on 04.21.14 at 1:55 pm

#139 Waterloo Resident – yes, its a new strain or variant>>>>Saskatoon?

#154 Holy Crap Wheres The Tylenol on 04.21.14 at 2:15 pm

#141 Smoking Man on 04.21.14 at 1:22 pm
#130 Idiot American on 04.21.14 at 11:38 am
I was in a drunken stupper?
We are all idiots…. Canadians, Americans, mount everest shurpas..
And you are right about Canadians, kind, decent, polite.
There is a word for that, it’s called doormats…. We still have the Queen on our money.
At leased you guys a long time ago stood for something… Made country….
But having a population of too many idiots, the machine spits on your constitution, and rights.
So I take it, you’re not buying my book?

_____________________________________________

Smoking Man you have a book? What is it called, this Ive got to see. Interesting to say the least. I would guess the American is not interested in your UCC, which I see is Upper Canada Collage apparently.
So where can we peruse this literary masterpiece?

#155 Bobby on 04.21.14 at 2:16 pm

For #150 Coastal

Yes, I saw that too. Rather sad.

Next thing we will hear is some Asian investor just bought Langford.

#156 stop lying on 04.21.14 at 2:25 pm

Millions of native-born Canadians do not speak English and enjoy every right you have. Being Canadian does not mean you are white or anglo. — Garth

lol, what are you talking about, no parent would deprive their child of learning the native language of the country they are in. How are they supposed to go to school or get a job? And there’s millions of them? That would make our immigration policies the biggest fail of all time if that were true.

Anyways, as the link I gave earlier shows, HAM exists, and is significant. What it tells me is the reason there is no stats on the matter that the government is willing to divulge is not because the numbers are insignificant, but because they are significant and they would have a hell of a time trying to explain themselves without turning this into a whole racial thing.

When the immigrant investor program was cancelled there was 65,000 mostly Chinese millionaires on the waiting list. Many had already bought property. How much more proof do you need?

I enjoy the information that I get from this blog but on this subject you are so wrong because you want to be PC it makes me cringe.

What a sad blog today. — Garth

#157 Holy Crap Wheres The Tylenol on 04.21.14 at 2:27 pm

#139 Waterloo Resident on 04.21.14 at 1:17 pm
God I hope you don’t listen to Alex Jones. This is Smoking Man stuff.
Meanwhile back to you in Vancouver Garth.

#158 Nemesis on 04.21.14 at 2:45 pm

#MoralHazard #UnlicensedTransmitters #BellyDancingPoliticalSatirists

[AlArabiya] – Egypt arrests controversial belly dancer

…”Egyptian prosecutors have detained the controversial belly dancer and singer Sama al-Masri pending an investigation into an unlicensed television channel allegedly owned by her…

…Police raided [her] apartment and reportedly confiscated unlicensed transmitters, the Al Arabiya News Channel reported.”…

http://english.alarabiya.net/en/media/television-and-radio/2014/04/21/Outspoken-Egyptian-belly-dancer-detained-over-TV-channel.html

#BonusSamaAl-Masri

http://youtu.be/om_LQs_nVVc

[NoteToGT: As prominently featured in AlArabiya’s LeaderIllustration, I could not help but marvel at the sheer engineering genius underpinning Miss Sama al-Masri’s stunning [if unlicensed] convex wave emitters. Hopefully, once the Egyptian police have finished examining them… they’ll honour the SETI Institute’s request to donate her emitters to the fledgling AllenTelescopeArray.]

#159 World Traveller on 04.21.14 at 2:45 pm

Another victim of Ceasars TFW policy, Mr. “You won’t recognize Canada when I’m finished with it”, I guess that’s one campaign policy that was kept.

https://www.facebook.com/brothersgrillpizza

http://www.cbc.ca/news/canada/saskatchewan/waitresses-in-saskatchewan-lose-jobs-to-foreign-workers-1.2615157

#160 World According To Garthj on 04.21.14 at 2:47 pm

Millions of native-born Canadians do not speak English and enjoy every right you have. Being Canadian does not mean you are white or anglo. — Garth
——————————————————————-

So are they all locked up in their “Cdn bought homes”?

Last I checked you need English to:

1. Open a bank account to read your money.
2. Drive a car so you can read the instructions and read the road signs
3. Commute on a bus so you can “read” where you are going.
4. Read the food and menus and stuff you are selling in your store whatever it is because its THE LAW to have English/French on stuff sold in Canada.
5. I think I could go on and on about why you MUST speak English in Canada unless you are “sucking off the Canadian teet and not contributing in the form of taxes”.

Millions born and raised in Canada that don’t speak English? Pleeeeeeez Garth. This “anti-racism” thing of yours is really going too far. There is not wanting to speak english and CANT speak english (or french).

You don’t have to be WHITE or ANGLO to be a racist.

#161 World According To Garthj on 04.21.14 at 3:03 pm

#115 Really on 04.21.14 at 8:30 am
post 75
How do you possibly know they come from offshore? — Garth

-because they don’t speak English. Yes they may have Canadian Citizentship … but even you are not that naive.

That just told me a lot about you. — Garth
———————————————————-

Garth you don’t work for Govt anymore. You don’t have to keep hiding from people that Govt HIDES STATS about where people are from that are buying shacks for 1 million plus.

Bank have records (the law).
Which means Govt has records.
Govt decides not to divulge such records. Don’t want to look like they are “racist” if they divulge records that much the increase in prices is coming from off-shore.

Because we all know how OPEN AND ACCOUNTABLE GOVT IS RIGHT??????

Not……

BTW…….Canada (and Garth) seem to be the only ones who “magically” have not records. Cuz in the USA, Great Britain, Germany and everywhere else they do.

So that means that Govt is either STOOOOOPID. Or they are hiding them. I choose both actually.

NO HAM? Funny how Bill Good is doing an entire WEEK IN CHINA about HAM in Vancouver that does not exist.

http://www.cknw.com/2014/04/21/the-bill-good-show-10/

#162 Dupcheck on 04.21.14 at 3:06 pm

I do not like it when they say “first home”. They are so quick to decide for you. What makes them think that people need to change homes at all? Brainwashing tactics, keeping up with the Joneses etc etc. Also in what planet do we live that this supposed “first home” costs half million dollars? In what life can a normal family pay off their “second home”? Ridiculous…

#163 Italians love real estate on 04.21.14 at 3:46 pm

Do you really think that chart you put up today helps your cause regarding the risk associated with real estate Garth?

It is practically a siren call to the zombie like real estate humpers that populate this country.

As if anyone will make the interpretation that RE has been a bad idea past two decades

#164 Bargains everywhere on 04.21.14 at 4:00 pm

Millions of native-born Canadians do not speak English and enjoy every right you have. Being Canadian does not mean you are white or anglo. — Garth

If you add French into the mix as there are 7 – 8 million who speak it as their first (and maybe only) language then I think the comments are correct.

Let’s revise it to: If you are an adult who does not speak either of our official languages (at all), it’s almost certain that Canada was not your birthplace. What’s the big deal? If you’re willing to be a good citizen, we’re happy to have you.

#165 Habs76-79 on 04.21.14 at 4:02 pm

#144 Agnes:

Yeah like a quarter basis points over 5 years. Look at the 10 years bond rate. Signaling low rates for a very very very long time. Hence will push RE to new highs. The losers are the ones NOT in the market.

————–

Er sorry Agnes, but in life when one does not borrow money to not buy a product, that does not make them a loser. It’s a choice to control what and how much debt they may choose to carry.

Buying into the real estate market with a mortgage does not make one a winner either. The odds are the home you buy will cost you more to pay off especially if and likely when mortgage rates rise. Even at 1 or 2 % higher it could mean paying more than double the cost of the initial mortgage. Add to that paying property taxes over the 25 year term and most cities raise said taxes by 2-3-4% per year and that is also money spent on the home that will not be recouped later even if the value of your home appreciates much and you later resell it. Oh yeah, and lets add 25 years of maintenance costs on said home, roof, plumbing, HVAC, foundation, landscaping etc. all will be costs and will yes, vary from home buyer to home buyer, but will add to the total cost of your eventual (after the mortgage is paid off) home ownership.

Now lets also factor in many of these buyers playing the real estate ladder game. They may not just stay in said home for 25+ years (already not a real investment in wealth as I just noted above, especially with only 5% or less down) but will move up and take on more debt as they use the vapour of equity (they really do not have any but it’s a perception of such) to move up the mortgage debt scale. So they not only lose time but also add debt. Most home buyers have fallen prey to such. It was bad enough when a home cost you 2-3 times your annual income, but it’s worse at 5-6-7-8+ times your annual income.

Or how about the fools who use the perceived equity to take on home equity loans. Not a commercial break goes by on the radio or the t.v here without these home equity loan lenders. ” You need $20,000- $30,000- $300,000?” ” Let your home equity get it for you.” Yes, it’s sold as if it’s free money BUT IT’S NOT!!!! Ok, you need a new roof, most folks do not have the $20,000-$30,000+ to pay for one. So yeah you then borrow against the house to get the roof. That is ok as the new roof will not take value away from your “overpriced” home. But how many of these idiots use home equity loans to buy things that they can’t otherwise afford? Like $40,000-$50,000+ SUV’s or pick up trucks, fancy cars. Or take $10,000+ to buy overpriced stainless steel appliances for the home they most likely can’t afford. Or take $10,000+ for a so called dream vacation, etc.?

This added home equity loan debt only goes against the future value of your home. Already a value in jeopardy as I noted much earlier in my post as the costs of such home (in reality mortgage) buying really adds up over 25+ years.

But Agnes you have no better crystal ball than any other person here as to if and how much the home values may rise over 25+ years. Odds are they will rise with the natural inflation rate, but they may not. Rising values as we have seen over the last 10+ years are not sustainable over the next 25+ even if interest rates stay on the low side.

We in North America have not had a real wage increase to inflation increase since the mid 1970’s. If wages keep falling behind (especially real) inflation, the home prices cannot keep rising. The only reason why they are rising as much as they have in the last 10+ years is for one, lower interest rates making entry into the buying a mortgage market cheaper to start. Lower down payments too and yes even depending on two or even more solid incomes. But these things are nothing that can be guaranteed. The gas will run out in keeping this balloon inflated. Better questions are, will the balloon deflate slowly or will it just pop?

By not buying into IMO a retarded mortgage buying market, one is NOT and never has been a loser Agnes! Not taking on debt you may not feel good about is never a stupid move. Buying into a housing market is no necessarily a bad thing to do but one that should be based on balance of debt acquired to income and fair understanding as to what you are doing and what you get for all the money you must earn in your future to spend on paying back debt today. Buying a house is not an investment, it’s a place to live in, THAT’S ALL FOLKS! The rest of the story is a rather fictional one.

Buying into a real estate market to be say a landlord can make you income if the costs of the buildings are less than the return over say 25 years. Do you want to take said chance? Are you a landlord type personality? It won’t be easy money TRUST ME! Anyone saying so is a liar and probably a fool.

No, Agnes borrowing money for anything should be done with full knowledge as to the costs. Buying a mortgage is the biggest, one may do. But too many fools think more about the costs of a pair of shoes, a dress or a suit, or a carbon fibre hockey stick to play pond hockey with, or a new t.v. than they do about buying into a housing market at inflated prices which will likely not keep inflating at such rates into the next 25 years or so. All the while much as to the fairytale nonsense thinking the either GOT IT MADE! or will make off like bandits later on. Probably not going to happen for most of them Agnes! But maybe years of misery, divorce, ill-health and added lost decent/good jobs, well you can see, not as sweet of picture as you paint and likely any a**hole realtor, mortgage broker, banker or idiot personality peddling this crap on HGTV.

#166 Future expatriate on 04.21.14 at 4:06 pm

Great article… it’s not over yet down below. Double dip? Maybe.

QE Has Eviscerated California Housing Market; Top End Red Hot But Bottom’s Busting

#167 Italians love real estate on 04.21.14 at 4:34 pm

I really do think Garth that you do not understand and clearly under estimate, the unbelievable, unshakable belief that certain cultures , Italian , Asian for example and in that order have for RE as an investment.

They believe more strongly in RE than in god.

#168 Hans Merkelbach on 04.21.14 at 4:37 pm

It’s getting hotter in the proverbial (real estate) kitchen. The pots are boiling and imo soon boiling over. It will leave the masses that bought condos and semi-detached homes at these ridiculous Greater Vancouver prices in misery. Only few see it coming, the rest is in denial believing that housing values go up forever.

Tell Garth that I will behave in the future.

#169 T.J.BONES on 04.21.14 at 4:57 pm

Sir Garth Turner: First off, I sold off all my pipelines! Here’s why so long as the Reforneocon”s are in power, the pipe will not be built. Obama hates H guts, and will do anything to get him. The Old Man will tell you that this is called Economic Warfare, attrition. Alberta will pay dearly, supporting H. They are going to drive us into poverty, just to get him. Old Man, is it true that there are Two Battle US groups in the Indian ocean??

#170 TheCatFoodLady on 04.21.14 at 5:01 pm

#139 – Waterloo Resident: Holy pandemics, do you read God-like productions as well or some of the other & plentiful ‘scare bear’ sites? Did you stop & examine the logic in this ONE report proliferating all around the paranoia/sales sites on the interweb? Did you fact check the Ebola virus at all?

The outbreak is occurring in TWO countries – Guinea & Liberia. There were suspected cases in Sierra Leone, Mali, Ghana, Morocco, Portugal & Canada. All tested negative. In regards to Ebola testing, even a new strain will react to other reagents to show you have Ebola – that’s all anybody needs to know initially to get the containment ball rolling.

15% increase in confirmed cases? Probably – all that means is that suspected cases meeting the clinical definition of the disease or contacts of those known ill tested positive. It does NOT indicate 15% more people presenting with symptoms.

The travel restrictions posted by Turner Radio are ludicrous at best & are based on a rumour that a hospital in Pisa has received 40 illegal immigrants with Ebola from Guinea – lots of trouble with that report but I digress. IF there was a serious question about Ebola they’ve been tested by now – reports would be due imminently.

Part of this ‘story’ is that Italian authorities are clamping down on the news – garbage if an entire hospital is isolated & there would be zero reason to do that. But let’s say they did – everyone in or at the hospital as patients, staff, visitors or delivery types were frozen in place – you don’t think that wouldn’t get out? Ever hear of cell phones?

The pandemic timeline reflects a highly infectious AIRBORNE illness. Ebola, save for the Reston strain which can infect some people but doesn’t lead to illness. Ebola is a contact disease. Unless you’re eating imported deep fried fruit bats or monkey meat, are wallowing in the bodily fluids of those ill or dead from Ebola, handling corpses with no protection, you’re fine.

The world has been seeing outbreaks of Ebola since 1976 – 38 years. Not once has the world clamped down on international air travel & haven’t now – with outbreaks ongoing in two countries.

Furthermore – staggered ‘cease travel’ order is illogical… any disease that bad, worthy of a complete travel ban – everything would halt at more or less the same time.

Ebola is a horrible disease & I’m not making light of the current outbreak. I wouldn’t wish it on my worst enemy.

But it is NOT a planet killer & I wouldn’t lend any credence to medical stuff reported at Turner. There is no, as they report, media lid on the Ebola outbreaks. I’ve had no trouble following independent reports at any number of credible sites.

#171 Hans Merkelbach on 04.21.14 at 5:05 pm

Comment awaiting moderation. Should Garth accept my promise to behave would you mind changing my name to rembrandt.

#172 Republic_of_Western_Canada on 04.21.14 at 5:06 pm

#88 Ralph Cramdown on 04.21.14 at 12:15 am

[…]

Energy independence? Right now North America is sitting on what some estimate to be a century’s supply of natural gas. Rather than keeping the cost of living advantage of cheap home heating, and cheap petrochemical feedstocks for for the chemical manufacturing industries and those which use them as inputs, we’re frantically building LNG export terminals […]

True ’nuff. What’s equally pathetic is the use of natural gas as an industrial fuel instead of reserving it for residential use, and shipping out oil sands bitumen from Alberta in unrefined form.

Use of coal is much more appropriate for industrial applications and general electricity generation as those institutions have the means for handling it, burning it most efficiently, and applying pollution control technologies (e.g. electrostatic precipitators). When the gas runs out, there will still be coal, but who wants to go back to the 1920’s regimen of hauling sacks of rock down into everyone’s basement to heat boilers with? It will still be -30 here in winter in 200 years.

What will eventually happen, if society isn’t yet torn apart from the pressures of irresponsible overpopulation, general resource depletion, and agricultural catastrophe, is most people will have to live in large-scale Soviet-style apartment complexes with dedicated coal-based heating (and maybe cogen electrical) systems.

Further, oilsands hydrocarbons are simply too valuable to be used as a means to push vehicles around or to heat buildings with. Bitumen froth is rich in cyclic aromatics (‘benzenes’) which are good for petrochemical feedstock but bad for burning in diesel engines.

We should be using coal as the primary energy source for large-scale electricity production, tar-sands water boiling, and heavy industry. The tar-sands should be used for petrochemical feedstock, lubricants, and aviation fuel – all to be consumed domestically. Finished plastics and similar products should be the only carbon-compounds we should be exporting from Alberta, regardless of immediate short-term pricing structures. Motive force to push most vehicles around, at least in concentrated areas like the Calgary/Edmonton/Fort Mac corridor should be electric motors using electricity from coal, nuclear plants, and some renewables. (Yes, nuclear. You need a big infrastructure of highly educated people, and special materials and tools, to run nuclear plants. Support for that increases the quality of life for everyone.)

For the greenies in the crowd, financial disincentives against large ‘pleasure’ vehicles and diesel truck (vs electric rail), as well as tax breaks for bicycle and foot/public transport, should be the norm. Not to mention tripling of property taxes for suburban property to discourage excessive commuting and product distribution.

It’ll happen sooner or later. Better to plan it in now in an orderly fashion, rather later when everybody is at each other’s throats.

#173 Ralph Cramdown on 04.21.14 at 5:15 pm

What a sad blog today. — Garth

If you want to change the direction, Garth, you need to bring data. “There’s no evidence that…” just isn’t good enough in the face of an ever-increasing number of anecdotes.

West Coast real estate agents have obvious motives to both play up and play down the numbers, depending on the audience, and I suspect they like not having hard numbers public. But other stuff cited here, including the South China Morning Post’s coverage and the lawsuit exposing CIBC’s explicit corporate tolerance of subterfuge to help mainland Chinese evade capital export controls to buy Vancouver houses, are not industry marketing material.

Likewise, story after story about Canadians being displaced by TFWs lead to the inescapable conclusion that some of these employers are paying below market wage (through cash kickbacks, payment in advance or renting living quarters to TFWs at above market rates in the “company town” model of yore) or are outright selling Canadian citizenship to these employees who will shortly be importing their families. I’m sorry, but it’s simply not credible that a franchisee in an urban market with a labour surplus needs to pay $2k+ plus expenses and relocation to an agency to hire a full time food service supervisor at market wage, except that that classification is eligible for eventual permanent resident status and there’s secretly money going the other way paying for that privilege.

#174 Stickler on 04.21.14 at 5:24 pm

@ #111 OttawaMike on 04.21.14 at 8:06 am

Ralph Cramdown on 04.21.14 at 12:15 am

All good points.

The question I always ask is why nobody wants to invest in a major refinery here in Canada so that we can export high value finished petroleum products?

———————————

I agree. I have been saying that for years!
I would invest. Canada & Alberta should too. Lots of lost tax revenue as it stands…

BTW …Did you know Canada has no emergency oil reserves? (and yes we do import oil)

According to a March 2001 agreement, all 28 members of the International Energy Agency must have a strategic petroleum reserve equal to 90 days of prior year’s net oil imports for their respective country.

Only net-exporter members of the IEA are exempt from the reserve requirement.

The exempt countries are Canada, Denmark, Norway, and the United Kingdom.

However, Denmark and the UK have both recently created strategic reserves due to their requirements as European Union members.

The problem is, Canada cannot divert exported oil during emergencies to Eastern Canadians because there is insufficient pipeline capacity to get western oil to Eastern Canada

…and because NAFTA’s proportionality clause, requiring Canada to export the same proportion of energy even if we experience shortages at home, stand in the way.

Thus, despite having plenty of oil, Canada is in the same boat as other oil- importing countries. When 47 countries conclude that international oil supplies are precarious enough for them to build reserves, why hasn’t our government made plans for supply crises?

Bush league…

#175 Smoking Man on 04.21.14 at 5:25 pm

#154 Holy Crap Wheres The Tylenol
Merging 3 manuscripts into one…

Being released as fiction so know one thinks I’m crazy…
But all my beliefs, opinions, trading secrets will jump out hard…

Keeping it flowing, no dead space is proving to be a bit tricky.. Think of wealthy Barber, being told by Hunter S Thompson.. With a bit of Steven king… And Tom wolf.

I need 30 days locked in room..

Short listed my literary agents…

#176 Stickler on 04.21.14 at 5:37 pm

@ #128 Old Man on 04.21.14 at 10:56 am

#111 Ottawa Mike – its simple, as the cost to build a refinery is too expensive.

——————
That is not true…its BS propaganda.
– The lost $ for producers on the spread
– the lost taxes for fed & prov governments
– the lost jobs spending into the economy (and added income tax base)

Its is viable.

Add in energy security (something Canada does NOT have).

#177 Old Man on 04.21.14 at 5:41 pm

I just received an update from Europe in regards to the Ebola scenario. I cannot state the info, as don’t want you to panic, but will give you a hint. False negatives have been established with re-testing! Nothing to worry about as they were all sent home, and WHO has issued a directive not to report the deaths.

#178 Stickler on 04.21.14 at 5:42 pm

@ Millions of native-born Canadians do not speak English and enjoy every right you have. Being Canadian does not mean you are white or anglo. — Garth

——————–
Hey, basic English or French is a requirement of citizenship…unless you are old.

Fact.

Not if you were born here. Fact. — Garth

#179 Stickler on 04.21.14 at 5:51 pm

@ #172 Republic_of_Western_Canada on 04.21.14 at 5:06 pm

Finished plastics and similar products should be the only carbon-compounds we should be exporting from Alberta, regardless of immediate short-term pricing structures.

—————————-

Totally agree!

#180 bob dog on 04.21.14 at 5:56 pm

This is outrageous. I am draining my VanCity account this week keeping only enough balance to make rent payments each month.

Thank the gods we still have NAFTA visas available. As they say in the dragons den. Im out! Watching this train wreck will be comical once I am no longer living here.

#181 Old Man on 04.21.14 at 5:57 pm

#176 Stickler – Mr. David Black has a proposal on the table for an oil refinery in BC. The modest cost will be $26 billion.

#182 TheCatFoodLady on 04.21.14 at 6:14 pm

#177 – Old Man… we’re big boys & girls & were there a genuine reason to panic, we’d want to know.

The ONLY reason to panic would be if this virus evolved to be airborne, yet maintained the currently known high death rates for strains effecting humans.

False negatives happen easily enough – specimens are often not received by testing labs in good shape. They may be taken too early meaning there are no antibodies for testing agents to react to.

Patients may have been ‘sent home’ after false negatives. Some may even have infected a few others – a FEW. You really think with the way people become ill that many around them would be willing to approach them & carry out the kind of care that would lead to infection?

The WHO, via Guinea will not stop reporting deaths. They will stop reporting deaths as Ebola deaths until/unless they are lab confirmed as Ebola. There are a whole lot of other nasty diseases with similar symptoms that kill people there.

This is not a disease we need to worry about here – really.

#183 Kris on 04.21.14 at 6:15 pm

RATES. They’re staying put for the foreseeable future, and they matter more than anything.

A lot of us come here for the daily dose of “it’s over” – Well, don’t hold your breath. This may keep going for 3-5 years yet.

#184 World According To Garth on 04.21.14 at 6:17 pm

Hey, basic English or French is a requirement of citizenship…unless you are old.

Fact.

Not if you were born here. Fact. — Garth
——————————————————-

Which means its virtually impossible that they contribute to Canadian society in any meaningful way because its impossible to do unless you can get around knowing and speaking English in order to get educated, buy things, get a bank account, drive a car, take a bus, work at a store, pay your taxes – independently. You would need a “crutch/coach” to do everything for you. Unless of course you need our very very expensive healthcare. Then you get anything you need without knowing English or french or apparently contributing financially. Welcome to Canada.

You are finished here. — Garth

#185 World According To Garth on 04.21.14 at 6:21 pm

No wonder National Defense costs so much money. They must need a boat load of linguists to deal with all the millions of Non French/English speaking Canadians that might be involved in the t word that the Govt feels it must spy on people 24 hours a day. Don’t think for a minute Canada is not doing what the Americans are.

http://armstrongeconomics.com/2014/04/21/how-your-cell-phone-threatens-your-liberty/

#186 WhiteKat on 04.21.14 at 6:22 pm

@Wallflower, re: your comment to me from the previous blog post. You’d need therapy too if you were a Canadian born in the US, and just found out you were a US tax cheat. Thank you so much for your concern, and your personal recommendations. :)

And yes there are blogs where many Canadians get together to commiserate as well as to plan our next moves as a group.

However, I also feel it is my duty to pass on the warning in whatever ways I can, to the 1 million other Canadians who have not yet figured out that they are not ‘lucky’ to have a US birthplace. The government is keeping this as quiet as possible, so when I see a connection between something that Garth is talking about, and if people respond to my comments either with questions or misinformation, I respond back. So far Garth has not deleted any of my comments, so obviously I am not causing any problems here.

If you don’t like my perseverance and dedication to the cause of protecting the rights and freedoms of ALL Canadians (because what’s going down is bad for all of us), – then don’t read my comments. There are people here whose comments I am tired of reading also, but I am not rude enough to tell them so – I just skip over them. How tough is that? It makes me wonder why my message bothers you so much.

#187 Suede on 04.21.14 at 6:39 pm

Shawn,

Alright, I’m in and can start doing all the legwork and finding accredited investors.

#188 SwanSong on 04.21.14 at 6:58 pm

Time to close up shop Garth.

The sheep have become enlightened by the true cause of this bubble.

#189 Dan on 04.21.14 at 7:05 pm

RATES. They’re staying put for the foreseeable future, and they matter more than anything.

A lot of us come here for the daily dose of “it’s over” – Well, don’t hold your breath. This may keep going for 3-5 years yet.

—————–

No kidding eh? Any hike will be so negligible in the next few years.This will allow cities like TO to close the gap with VAN.

#190 maxx on 04.21.14 at 7:48 pm

#81 sheane wallace on 04.20.14 at 11:17 pm

” This is insanity.

………….. savers: you screwed!”

Yes and mmmmmmm……..no. Saving is not exclusive of owning RE as many savers don’t much like the taste of bricks and mortar. Also, during times of insanity, savings make for greater quality of life. Most savers get how to balance the two.

#191 fisheman on 04.22.14 at 3:17 am

Post #173 touched on TFW’s. I”ve heard you have to guarantee a TFW two years of employment. Supposedly the kickback rate is $50,000/man. It works out that you get free labour for almost two years. You have to find work for the TFW someplace where English isn’t required, that in itself generally means minimum wage.
Also, the Chinese have been coming to B.C. for a long time. I had a Chinese girl friend that was born in Mao”s China. Her great grandfather came over here in the late 1870″s to work the placer gold : ten years before my great grandfather came from England to work the hardrock mines. The Chinese earned money here & went back to China to get themselves a wife (if they stayed off the opium). Now gambling instead of dope eats up their paychecks. And they fly instead of steam across the Pacific to fetch pretty girls. There is lots of them coming & going but more coming & you better get used to it if your going to live on the left coast.

#192 JL on 04.22.14 at 9:49 am

#14 Linda Mulligan

Yeah Linda, we outlawed interest only loans. Than line of credit you have that does not require debt reduction – those are illegal and no one’s noticed.

The difference between the “vig” a loan shark charges and an interest only loan is the fact that the vig is usually 10 points every WEEK. As in, I borrow $5000 and the vig is $500 every week. In a year you pay $26,000 in interest (over 500%) and you still owe the principal.

That compared to the prime plus 1% ANNUALLY I pay on a line of credit. $5000 line costs $200 per year.

Yeah exact same thing, good analogy.