Lost dog

COFFEE modified

Days ago a blog dog and occasional poster from Kitsilano made a conditional offer in his Vancouver hood. Then he sat and wrote a long note about why he regrets me.

“It’s been a long journey,” he started, “but I am saying good bye. I have read this blog consistently almost from the beginning. I have no doubt it has helped many people throughout Canada make informed decisions about finance and real estate. Unfortunately, you did not help me one bit other than provide occasional entertainment.”

For you heathens, Kits is one of Van’s it neighbourhoods. About 40,000 people live in this piece of the Westside between the Art Deco Burrard Street bridge and tony West Point Grey. It’s young. Over 60% of the residents are below the age of 40, and they earn about the average for the city – sixty thousand. And yet, thanks to low mortgage rates, basement suites, the Bank of Mom, house lust and (as noted below) foreign buyers, the average detached house costs almost $1.6 million.

(By contrast, the centrally-located, Toronto demand neighborhood of Leaside also has an average house price of $1.5 million. The average household income there is $330,000.)

So why would people making that kind of income over-extend to buy a house that comes with a lifetime of debt?

Silly. This is Vancouver. The only point of existence here is to own a house. And to hate those you perceive are preventing it.

“Your advice about Vancouver was dead wrong,” says the Kits dog. “Man up and admit it. The market should not have been measured relative to the rents and income of residents. It is truthfully driven by foreign investment. I live here and know – you do not.

“We contacted the nice Asian couple who has been subsidizing our rent for 18 months. We asked if they wanted to sell and if so how much they wanted. They wanted $1m more than they paid in 2010. Virtually every house in our neighbourhood is now owned by mainland Chinese. The house next door to the one that we are purchasing just sold. It is now being advertised on craigslist rentals properties. Clearly, an “investor” purchased the property.

“There are 60 schools in Vancouver with more than 50% ESL students. Some schools have more than 70% ESL. Did that happen by accident? Does Pickering have schools with 70% ESL?

“The real estate prices in this city may or may not end badly. As long as a significant number of mainland Chinese want to park money in Vancouver there will be less and less opportunity for local tax paying residents to buy a single family home. Go ahead, call me a racist and tell me there are no stats to support my assertions. My response – good bye.

“Your arguments made good sense and we decided not to buy. Who could have predicted that our city would be purchased a little bit at a time by foreigners until they dominated the market and started competing against each other for property? Clearly, you and we did not. Do everybody a service, and stop implying this market is like every other market. It has unique aspects, and one of them is material foreign money.

“It no longer matters anyway. The average family in Vancouver can no longer afford a single family home. Foreigners will continue to buy and they will play musical chairs with each other until the music stops. Most people you guided against buying a single family home in Vancouver likely never will be able to now. I honestly believed that with our family income and the length of time we have earned that income that we would have a very nice home by now. The market simply continued to move against us. Oh well, the good news is that we capitulated and I never have to visit this site again.”

See what real estate in Vancouver does to your brain? Bitter, resentful, angry. And after all that useful common sense and resistance has been worn down to the bone – capitulation. Now we have another young family gone from liquidity and mobility to debt and materialism. You can bet our departed colleague will come to defend and justify those prices that households like his cannot, and should not, afford.

Good luck to him. Hopefully, it works. But renewing a million-dollar mortgage in five years might be a life-altering experience. Is he counting on more Chinese coming along, making his place worth $3 million? How does this ever end well?

But let’s put perception aside for a moment. Instead, here are some facts.

The median sales price for a detached house in Kits is currently $1.6 million. Prices peaked at $2.3 million in the winter of 2013. We are now back down to where values were in early 2011. Take a look at the chart below and you can see there is a volatile, erratic – and emotional – component to this. No surprise there.

KITS PRICES modified

And what of foreign money? Is it solely responsible for the locals not being able to buy single-family homes within an easy bike ride of DT Vancouver? Well, we don’t know. No stats exist on purchases by people who used cash coming from offshore – which means perception runs amok. But we do have a demographic profile, thanks to Stats Canada.

Here is the population breakdown by language on one of the more upscale streets in Kitsilano. It’s typical.

LANGUAGE modified

Of course, this doesn’t mean houses can’t be owned by shadowy Chinese investors who have parked their money in Vancouver and, as a result, are treating the locals to subsidized rents (as our lost dog admits). But this is hardly a ghetto. Except in some minds.

About 28,500 properties change hands each year in Vancouver. This is the story of one.

Makes you wonder. Why?

264 comments ↓

#1 Randy on 07.14.14 at 6:14 pm

Owning an over-priced home…not the purpose of my existence !

#2 Diane on 07.14.14 at 6:21 pm

As a Kits resident, I feel the need to point out that most of the people who live here don’t own the house, they rent one of the suites. The house I live in has five residents in three suites, including the the owner lives by herself in the attic. And most of the renters are university students (UBC is 15 minutes away by bus), which skews the demographics.

Stats Can reports 40% ownership. — Garth

#3 Diane on 07.14.14 at 6:22 pm

Not that I don’t think the house prices aren’t crazy and you shouldn’t buy (I do!). But you can’t look at the statscan demographics and conclude that the buyers are young, english speaking people. Because they aren’t.

Let us know your data. — Garth

#4 Mike on 07.14.14 at 6:26 pm

The only way I see Vancouver continuing to rise without any foundation is if it becomes a New York or London where houses are in the millions (so I have heard).

I agree with you Garth this is a HUGE gamble when all your wealth is tied up in one asset class with a massive mortgage set to renew in 5 years (or worse floating).

I live in the Kelowna area and you can still by a mansion overlooking the lake for less than $1mil. Maybe a few more people need to let go of Vancouver and move inland.

#5 dosouth on 07.14.14 at 6:27 pm

As one moves on another takes its place….is the circle of life & real estate. Be interesting in even 6 months to see how much “Kits boy” has lost…..

….but then again in Kits it is different.

#6 Gabi on 07.14.14 at 6:33 pm

Not sure about Van, GTA is screwed for sure
Not at least 6 families, bearly make payments but confident that the only way RE goes is up
Crazy times

#7 Diane on 07.14.14 at 6:37 pm

Let us know your data. — Garth

Garth, your data was about *residents* being mostly young (under 40) with average earnings and mostly english speaking. I agreed with that, but said you can’t extrapolate this to the owners – since there are so many renters, especially young university student renters.

Your own data – that the ownership rate is 40% – supports the fact that most of the residents are renters.

#8 raisemyrent on 07.14.14 at 6:40 pm

WOW. What a sad post. So many things to say. I’ll focus on this: I’m assuming they’ve been reading since 2008.
So, Garth (and many others) has been “wrong” for 6 years, THEREFORE, everybody else must be right for the duration of a mortgage.
May I borrow your crystal ball?

#9 Maz4kra1 on 07.14.14 at 6:45 pm

Chinese Banks Halt Yuan Remittance Program.
https://twitter.com/BenRabidoux/status/488742075702071296/photo/1

#10 MissisaugatoVancouver on 07.14.14 at 6:45 pm

Garth, come visit North Vancouver…all new houses are $1.3M upwards and surprise…all have a wok kitchen and basements with 2 suites. Realtors tell stories of buyers wanting the district to remove the 4’s from addresses.

You are right…rent now (for rest of us (rest of your life)) and let the HAM buy up Vancouver.

#11 pinstripe on 07.14.14 at 6:46 pm

this blog refers to foreign money and how the hornies are risking their future buying real estate.

When will there be some investigative reporting to check on laundered money impacting the housing industry?

#12 A Box in the Sky on 07.14.14 at 6:47 pm

The average household income in Leaside is 330k?

That sounds insanely high. What is the median?

#13 sideline sitter on 07.14.14 at 6:51 pm

My Chinese friend (from HK) has repeatedly told me… as soon as prices decline, very Chinese investor gets cold feet and sells in a Tsunami.

He went to high school in BC after immigrating, but that was 20 years ago (he moved back to Asia now, but visits every Summer).

So, what will be telling is what happens when prices start to decline.

What goes up, must come down!

#14 Happy Renting on 07.14.14 at 6:52 pm

Average Leaside household income is $330k pa? Day-um!

As for Kits Dog, I’m sorry it’s an unfriendly break up, but even being a reader for less than a year I understand the overt message is to tone down risk and examine the value received for your accommodation costs. The underlying assumption is that each of us will take all information and opinions offered, examine them, make a decision for our own personal circumstances, and then take responsibility for our decision. No crystal ball available at any time (though always 20/20 hindsight.)

It’s a free blog, though. I guess the dissatisfied can ask for their money back!

#15 Humpty Dumpty on 07.14.14 at 6:53 pm

Lost Cause…

Three New JPMorgan IT Deaths Include Alleged Murder-Suicide

http://wallstreetonparade.com/2014/07/three-new-jpmorgan-it-deaths-include-alleged-murder-suicide/?utm_source=rss&utm_medium=rss&utm_campaign=three-new-jpmorgan-it-deaths-include-alleged-murder-suicide

Guess they’ll be creating a chart for this trend soon….

#16 gladiator on 07.14.14 at 6:56 pm

Garth, there is a total of 119 schools in Vancouver (link: http://en.wikipedia.org/wiki/Vancouver_School_Board )
If 60 of them are 50+ % of ESL students, it implies that more than 25% of students as foreign-born. This is not anecdotal evidence that is so easy to brush off. Do you still believe that HAM has a minor/negligible effect on Van’s housing market?
HAM is real and significant to Van.

Where does it say half the students are ESL? — Garth

#17 nu on 07.14.14 at 6:58 pm

House prices have been elevated for so long, that there must by now be a huge number of people who will be toast when interest rates go up and house prices come crashing down.

I have been wondering if this is going to be a bit like ‘if you owe the bank a hundred pounds, you have a problem, but if you owe it a million, it has’. Will it be a case that there will have to be some sort of mass write-off of negative equity, as happened in the US?

#18 Fred Smith on 07.14.14 at 7:01 pm

Mike,

I also live in Kelowna and NO you cannot buy a mansion for under a million…lol. Doesn’t matter if it sees the lake or not.

#19 tim on 07.14.14 at 7:02 pm

Secret path revealed that allows wealthy Chinese to transfer billions overseas by buying pricey property in Vancouver, New York and Sydney

http://business.financialpost.com/2014/07/14/secret-path-revealed-that-allows-wealthy-chinese-to-transfer-billions-overseas-buying-pricey-property-in-vancouver-new-york-and-sydney/

And Garth says the Chinese buyers haven’t had an effect on Vancouver real estate…

I read it. Nothing about Vancouver. — Garth

#20 Dave on 07.14.14 at 7:05 pm

I see one of the big banks is offering home equity line of credit for prime + 0%…borrow some cash home onwners, its cheap!!

#21 mark on 07.14.14 at 7:05 pm

It’s a sneaky government that doesn’t keep accurate stats on this kind of thing.

One might believe it’s their intention to keep the whole thing shrouded in nothing more than conjecture.

#22 Son of Ponzi on 07.14.14 at 7:06 pm

It’s true that not many Chinese live in Kits.
They are the landlords and live in Vancouver West and Point Grey.

Link? — Garth

#23 Smartalox on 07.14.14 at 7:16 pm

Garth, the median price information on the chart that you published vary wildly. If the median sale price is the price where 50% of houses sold in that month sold for more than that value, and 50% of houses sold in that month sold for less than that value, I doubt that the sample size is large enough (more than 20 sales, especially in the winter market) or distributed evenly enough for the analysis not to be skewed by outliers.

if the median sale price drops from $2.3M to $1.6M, would that justify saying “Median sale prices in ‘Kits’ have dropped 30%” Based on your comparison, the statement is true, but obviously not meaningful or statistically significant. If it were, the streets would run red with ink, if not blood.

Median incomes (the income at which 50% of residents make more, and 50% of residents make less) are assessed over a much larger number of people (data points, to a statistician).

If you have better data, share. — Garth

#24 Bob Rice on 07.14.14 at 7:17 pm

DELETED

#25 The_Iceman on 07.14.14 at 7:21 pm

Garth / fellow readers:

…here’s a link to the “ESL majority in 60 of Vancouver’s school” article.. (From the Vancouver Sun front page on 08 July 2014).

Being resident here, I can certainly empathize with the blog dog from Kitsilano.

http://www.vancouversun.com/health/students+majority+more+than+schools+Metro+Vancouver/10005768/story.html

“Of the roughly 550 schools in Metro Vancouver, there are 65 — primarily in Richmond, Surrey and Vancouver — where more than half of the students are English learners.” In other words, in 11.8% of Vancouver schools, ESL students make up half the learners. Are you seriously bothered by less than 6% of the student population not speaking English? I sure hope not. There’s a word for that. — Garth

#26 Uh Oh Canada on 07.14.14 at 7:22 pm

The herd exists mainly in the city. It’s the quickest, most efficient way to spread the hype- if everyone in a highly populated area believes the same thing. Therefore, anyone not thinking like the herd feels abnormal, even though the whole herd is heading down a cliff.

We are shaking our heads at all them crazy city folks.

#27 takla on 07.14.14 at 7:23 pm

who cares where the money comes from?rich mainland Chinese,weathy Japanese,Iranian millionairs,or white Europeans/Canadians ….free market participants come in all colours and creeds,more power to them, they can set up shop in kerisdale,west van ,marpol ect ect and pay those prices and inherite the accompanying lung desease that comes with living in hi density,conjested traffic intense areas and have their pocket books picked by the reset.
Just don’t let them know about the benefits of country living,less conjestion,moderate housing costs,less pollution /cleaner air and far less traffic.Im still within 1 hrs drive of that hell hole they call downtown van,yet ive got deer/bear in my backyard garden daily with a great farmers market a mile away.When I go outside @ night I don’t hear traffic,car alarms,ambulances,police ect ect and when I look up I can actually see star’s,no light pollution…gotta luv it!

#28 Smartalox on 07.14.14 at 7:29 pm

Having said everything above, while anecdotal evidence suggests that the housing stock in ‘Kits’ may be overbought by cash buyers (both foreign and domestic), this phenomenon has little to to with the rising chorus of institutional economists decrying Canadians’ record low levels of equity and record high levels of personal debt, since the majority of Canadians do not live in ‘Kits’.

Low housing equity and high personal debts are cross-Canada phenomena, caused in part by factors controlled at the national level (national interest rates, national mortgage market policies and indemnity programs, nationally regulated financial institutions, for example).

In this case, in terms of national statistics, the presence of more foreign cash buyers would improve these results, (higher equity rates, lower levels of personal debts) not make them worse, as has been the trend.

#29 Bob Rice on 07.14.14 at 7:30 pm

Well Garth, looks like this ride is gonna go on a little while longer… confidence/perception is crucial. Housing is less about fundamentals and more about psychology.. and Canadians are psycho.

http://www.bnn.ca/News/2014/7/14/Price-surge-fuels-housing-optimism-to-highest-since-2008.aspx

#30 Ronh on 07.14.14 at 7:30 pm

Step right up and be a debt serf. Next!

#31 admit it on 07.14.14 at 7:31 pm

And what of foreign money? Is it solely responsible for the locals not being able to buy single-family homes within an easy bike ride of DT Vancouver? Well, we don’t know.

–> Well, we Do know. Plus the reader mentioned ESL populations of 50%+. I don’t think these kids just magically appeared.

It is true that those that listened to this blog over the last 5 years made a mistake of a lifetime.

Admit you’re wrong. It is not the end of the world if you do.

Look at the Kits price chart. — Garth

#32 3s on 07.14.14 at 7:32 pm

A bogun is the glam version of a redneck…

http://thingsboganslike.com/?s=property

Enjoy;)

#33 Sheane Wallace on 07.14.14 at 7:34 pm

Nice music to my ears.

You know of course what 1.6 mil. will buy you in Switzerland, Austria, Germany, places with better health care, actual pensions, huge vacations, free Universities in the centre of Europe where people can drink beer on the streets and actually know how to plays sports…

2 years baby and daddy is saying good bye.
Germany or England it is.

#34 admit it on 07.14.14 at 7:35 pm

1200 under age 17 students at $13,000 a pop coming to Surrey this September. Parents get free visa. Half will buy a house for future.

We will deny this also :S

Link? — Garth

#35 John Of Brisbane on 07.14.14 at 7:37 pm

The story reminds me of the Gold Coast ( Australia) in the eighties, where you can replace the Chinese with the Japanese, fast forward to today and most of that HAM went down the drain and the market balance returned. Resorts and the like were bought back for fractions of what had been paid, and bought a large local benefit, with a lot of money being poured in.

#36 Victor V on 07.14.14 at 7:38 pm

http://www.thestar.com/business/real_estate/2014/07/14/canadian_homes_20_per_cent_overvalued_ratings_agency.html

OTTAWA—Fitch Ratings says Canada’s real estate market is as much as 20 per cent overpriced and cautions the government may need to take more measures to slow down borrowing on homes.

Fitch is the second U.S. financial agency to sound the alarm on Canadian home prices in the past week, with the Morningstar research firm predicting a 30 per cent correction was possible over the next few years.

#37 JO on 07.14.14 at 7:39 pm

The notion of foreign money inflating our
asset prices is real but only affects some
pockets. Yes there will be a correction at some
point but as long as rates rise orderly
and do not exceed 4-5 %, any correction
will be a buying opportunity. The major
global trend in my view over the next 15-20
years or so is even more asset price
inflation as the massive amount of
money in deposits and increasingly
shaky gov’t bonds in Europe/china/ and
Japan desperately seek a home.
CIO of Allianz, manages 800B, just said
He will be adding more RE and infrastructure.
Just one recent example.
Sharp declines on blue chips and good
quality RE are to be bought.
JO

#38 Dean on 07.14.14 at 7:39 pm

I read it. Nothing about Vancouver. — Garth

Vancouver’s real estate market has also seen the impact, having been “fuelled tremendously in the last couple of years by high-end wealthy Chinese and Hong Kong buyers,” according to real estate agent Malcolm Hasman.

Wow. A realtor. — Garth

#39 Sheane Wallace on 07.14.14 at 7:44 pm

and don’t get me started on GMO, you know what my organic store bill is?

#40 HD on 07.14.14 at 7:54 pm

Aweeeee Kitsilano….It is a lovely place to live.

I stayed there for 4 yrs until I moved right on the outside of the ‘kits border.…South Granville. Lovely neighborhood.

It would be insane to buy anything in Kits at these current valuations. Rent is way cheaper. No discussion.
As per the kits blog dog rant…..there are so many fallacies in his argument that I don’t even know where to start. So I won’t bother commentating on this.

I will say though that the whole ESL kid thing rubs me the wrong way. What’s an ESL kid? A non-white kid? Does a Caucasian kid who doesn’t have English as a first language qualifies as ESL? What about those kids who came to Canada with perfect English they learned in their home country on top of their first language…ESL kid too?

Best,

HD

#41 Adrian on 07.14.14 at 8:07 pm

Garth – I agree with 99% of your points, however I do feel foreign investment is having an impact on house prices and is driving real estate out of reach for Canadians in some locations.

Housing is a necessity and not a place for foreigners to park money. Canada needs to take the lead from other countries and either restrict foreign investment in residential real estate or place monetary measures in place to make it unattractive.

Any amount added to the bubble via foreign investment is to much.

Walls never work. — Garth

#42 Lilyflor on 07.14.14 at 8:07 pm

Looks like he capitulated just in time!

Chinese back Halts yuan program

http://m.us.wsj.com/articles/chinese-banks-halt-experimental-yuan-remittance-program-1405345453?mobile=y

#43 zee on 07.14.14 at 8:07 pm

Garth, I agree with most that you are underestimating the impact of foreign money,specifically HAM money, on the market.
Explain why Vancouver prices are higher than Toronto even though incomes are higher in Toronto. Simple, more Chinese people in vancouver than toronto.

Read this blog for ten minutes to discover that. You’re obsessed. — Garth

#44 T.O. Bubble Boy on 07.14.14 at 8:12 pm

@ #12 A Box in the Sky on 07.14.14 at 6:47 pm
The average household income in Leaside is 330k?

That sounds insanely high. What is the median?
——————————————–

Zoocasa says $156k… but seems a bit dated.
http://www.zoocasa.com/en/toronto-on-real-estate/2762687-148-leacrest-rd-toronto-on-m4g1e9-c2937279

#45 Fred on 07.14.14 at 8:14 pm

Well, here is some US stats to mull over. It would be good if Canada tracked all foreign purchases, then again that might mean some bureaucrat would have to work. That would clear the air on the debate but until then, I side on the HAM argument.

http://www.businessinsider.com/chinese-all-cash-buyers-in-us-housing-2014-7?utm_source=androidapp&utm_medium=referral

#46 4 AM Sunrise on 07.14.14 at 8:19 pm

#39 HD on 07.14.14 at 7:54 pm

Isn’t an ESL kid just a kid who’s enrolled in the school’s ESL program? There are varying levels. Level 1 is where they don’t speak any English at all. I think level 4 or 5 is where they get 1 to 2 hours of ESL instruction/homework help per day, and then they take regular classes the rest of the time.

The hard part about teaching science to ESL students is I have to teach the science concept AND teach the words that are used to explain that concept. Helping them decode the textbook takes up half of the time.

#47 Vermithrax on 07.14.14 at 8:22 pm

G-Man’s advice didn’t “help this guy one bit”? Obviously he didn’t follow the advice of the past few years or would have portfolio gains of 30%+.

#48 JuliaS on 07.14.14 at 8:25 pm

Garth, this has been posted in your comment section before and you ignored it. Bloomberg article on Chinese buyers driving up housing costs in California.

http://www.bloomberg.com/news/2014-07-08/chinese-cash-bearing-buyers-drive-u-s-foreign-sales-jump.html

Maybe you could post one of your sarcastic responses to this one as well.

Is this California? — Garth

#49 brainsail on 07.14.14 at 8:26 pm

What is an ESL student with a thank very much to any one that responds?

#50 Fred on 07.14.14 at 8:26 pm

Interesting articles here folks…
Sorry Garth.
http://blog.besthomesbc.com/category/chinese-investors/

For what? We knew this three decades ago. — Garth

#51 eddy on 07.14.14 at 8:29 pm

#32 Sheane Wallace on 07.14.14 at 7:34 pm

Nice music to my ears.

You know of course what 1.6 mil. will buy you in Switzerland, Austria, Germany, places with better health care, actual pensions, huge vacations, free Universities in the centre of Europe where people can drink beer on the streets and actually know how to plays sports…

2 years baby and daddy is saying good bye.
Germany or England it is.


you forgot to mention vat on groceries and two buck a litre for gas, and income tax deducted from your savings account the instant the bank enters the interest paid, the government deduction is typed in red.
I was born in UK but lived here since childhood. When I return from Europe or UK, I feel like kissing the ground at Pearson,
few in the euro-zone are happy, i talked to a Swiss school teacher, around 30 yrs old , he said home ownership was out of the question for his generation, i said ‘who buys real estate?’ he said ‘the aristocrats’

#52 Rainclouds on 07.14.14 at 8:29 pm

#39 HD
What’s an ESL kid? A non-white kid? Does a Caucasian kid who doesn’t have English as a first language qualifies as ESL?

Answer: The new immigrants of school age are assessed quickly after arriving.(Usually that week) Based on their score by standardized testing they are then placed in the appropriate ESL class of the school they will be attending. Some arrive with no english, some are perfectly fluent. The country of origin or race is not relevant.(Asian kids are sometimes fluent, caucasion kids sometimes not)

School boards in BC get federal and provincial funding based on the numbers.

Added into the mix are International Students who are coming here for a finite time and pay fairly high tuition (primarily to improve their english).

#53 Catalyst on 07.14.14 at 8:31 pm

Please Garth. Educate yourself.

http://www.vancouversun.com/life/Opinion+Recognizing+foreign+buyers+drive+Vancouver+real+estate+prices+racism/9907365/story.html

http://www.huffingtonpost.ca/2013/01/04/chinese-investment-canada-natural-resources_n_2404775.html

http://www.theglobeandmail.com/report-on-business/economy/housing/foreign-buyers-buoy-vancouver-housing/article4264572/

An opinion piece, an article on Chinese investments in natural resources in 2012 and a three-year-old clipping thin on facts? Real convincing. — Garth

#54 Willdaman on 07.14.14 at 8:36 pm

Garth, if dude is complaining about following your advice since the beginning of the blog, perhaps you should post the Kits median home price from that point in time instead of only from 2011?

Only if he was able to buy then. — Garth

#55 Don Derc on 07.14.14 at 8:38 pm

$1.6 million…and I used to complain how my parents got the deals on real estate and my generation got screwed. Until I bought my first house in wpg in 1988 for $39K. And then all my rental properties doubled in price. “Nuff said. I live in “the lower mainland” and I don’t buy the HAM complaint. What about HIM (indian) or HIMM (hot Italian macho money) or me (camp – cdn and mex pesos)?

The us border, the mountains, and the ocean, and the lack of land drive up the prices. Buy a house in abbotsford tdy because it’s the last time you’ll have a yard for under $300K. Everything is “pre-sell condos” that will drop 15% over the next 3 years. I’m with Sheane – I’m out “soon” but it’s either Mexico or Italy (long story). Canada is a great country, but an even greater country to leave.

Why? Because retirement is gonna kill me – nickled and dimed to death – it will be expensive. Condo fees in Vcr range from $300 monthly to $700 monthly – just like those old apt buildings that ring around Toronto. What will it be like in 5 years?

Carry on wayward sons and daughters….

#56 brainsail on 07.14.14 at 8:43 pm

I think I just connected the dots. ESL = English speaking language.

#57 Sheane Wallace on 07.14.14 at 8:49 pm

OK, It is the rich foreigners, I agree.

Now can we please stop CMHC?

#58 Fred on 07.14.14 at 8:50 pm

See the chart and read the last 5 paragraphs sir.

Twelve-year-old data. You haters are desperate. — Garth

#59 Ralph Cramdown on 07.14.14 at 8:53 pm

Offered without comment, except to note the questionable uses of the words “misrepresent” and “tantamount.”

http://www.cbc.ca/news/canada/british-columbia/vancouver-students-falsely-labelled-english-language-learners-1.2543834

#60 Mike on 07.14.14 at 8:54 pm

I agree with Kits dude. I moved back from SoCal in 2007 and have been echoing your sentiment since then – 7 years. Market’s gone skyward. I do business in China, 90% of our sales are to China. Foreign money abounds in Vancouver. Unless something makes that stop, hang on for higher prices – renting people like me are screwed… I’ve stopped holding my breath. I give.

So, 90% of your income comes form Chinese sales, and you lament the Chinese influence? Suck. Blow. — Garth

#61 TS on 07.14.14 at 8:55 pm

Do people in Toronto and Vancouver realize how much less they would have to make if they moved to some other city?

Let’s get this straight: Toronto requires you to pay $700,000 for a house for a fixed up 1920’s 17 foot wide junker, $2000 a month for daycare and the highest auto insurance rates in Canada.

You could move to Sault Ste. Marie, buy a $100,000 house, have you wife stay at home and live off a $65,000 a year salary.

What the eff gives?

#62 Freedom First on 07.14.14 at 8:56 pm

The Greater Fool title of your Blog was well chosen Garth.

Thank you for another reality check that makes me feel so awesome always putting Freedom First.

#63 Catalyst on 07.14.14 at 8:58 pm

An opinion piece, an article on Chinese investments in natural resources in 2012 and a three-year-old clipping thin on facts? Real convincing. — Garth

Yeah, I know – you want StatsCan data. It doesn’t exist.

If you need further proof when the average home takes nearly 100% of net income before food doesn’t tell you that there are outside influences at work. Then I don’t know what to tell you.

I can’t say it’s the Chinese, but I haven’t heard many opinions other than that which makes sense.

#64 Bob Rice on 07.14.14 at 8:58 pm

DELETED

#65 Roman on 07.14.14 at 9:00 pm

Vancouver RE is a joke, so in Canada biggest cities.
3 hours north and super nice houses in DT Seattle are offered for 700k-1mln.
So it’s like nothing. And everything is 2 times bigger and cheaper there, while salaries at 20-40% higher than in Canada (at least in mine field).
Also opportunities are endless, not like in this country with unique aspects ™, which has following choice to offer, unless of course one wants to live completely in the middle of nowhere:
either housing reach Van,
freezing AB,
housing reach GTA decanter,
a government province – where ones wouldn’t like to be unless working in governmen
and finally, taa-daaa, a province with a wrong language.

That dude’s capitulation looks exactly like so many others buying markets at 6 years high.

#66 mic on 07.14.14 at 9:00 pm

ok …I’ll do it ;-) ESL = English as a Second Language

#67 Mike on 07.14.14 at 9:01 pm

I enjoy the business, but I certainly don’t make enough money to buy a Vancouver home from the profits! I can only afford to rent in Cloverdale to do business in China! I think I’ll move to China and open shop, way more margins there.

#68 Sean on 07.14.14 at 9:01 pm

Brainsail… ESL means English as a Second Language

#69 Cici on 07.14.14 at 9:03 pm

Poor sucker…he should have taken up a productive hobby instead of real estate porn.

Being buried under excessive mortgage debt in an era of rising interest rates is a horrible way to go down – even in Kitsilano.

#70 Nemesis on 07.14.14 at 9:05 pm

#What? #There’sGoingToBeACivicElection? #Quick!RoundUpTheUsualSuspects! #&FormAnotherCommittee #SameOldDogsSameOldTricks

“It’s important to get the magnitude and the depth of this phenomenon of global capital in Vancouver’s residential real-estate market.” – Andy Yan, Researcher for BTA Works – the research and development department of Bing Thom Architects.

[G&M] – “Vancouver targets housing speculation”

…”The City of Vancouver is launching an agency to help figure out how to limit investor speculation in housing – a controversial issue in Vancouver’s inflated market certain to be debated in this fall’s municipal election.

Mayor Gregor Robertson, who will be seeking a third term in November, cast the Vancouver Affordable Housing Agency on Thursday as a “research hub” to help create 2,500 new affordable homes by 2021 – 500 of them in the first three years.”…

http://www.theglobeandmail.com/news/british-columbia/vancouver-targets-housing-speculation/article19559458/

[NoteToGT: Oh, the Irony… something to do with MayorGregor’s affordable housing ‘ComeToJesus’ moment arriving shortly after his being compelled to vacate the Kitsilano marital abode and ‘rough it’ in the WestEnd.]

#71 Republic_of_Western_Canada on 07.14.14 at 9:05 pm

There’s only 2 reasons to live in Kits. When you swim and play tennis – a lot. And can’t afford a Hollyburn membership and a place with it’s own pool up in the Properties. (OK, a third when you have to take the bus up the hill to UBC every day.)

As a former resident of Point Grey (in the days when 1.5 mil actually bought something there) I’d have expected the majority of the worn-out residential stock down in Kits, Lugano Beach etc to have long since been torn down.

Despite the penchant of snow-weary white people to live in the lower mainland until they get sick of the congestion and costs, the one opportunity sky-high prices present might be to finally raze 40’s and 50’s buildings and put in decent steel-framed architecture. With bullet-proof weather envelopes.

In the ’60s and ’70’s, if you bought in during one of the periodic RE crashes, it sort of made sense to move/live there. Now with all the negatives, one really has no business even showing up. Don’t waste time bitching about insane prices, limited career opportunity, hour-long jams on the Lion’s Gate, druggies, rain-caused madness, and long-lost west-coast living. Just get the hell out.

#72 wheredabeef on 07.14.14 at 9:09 pm

So let me get this straight…if I say please and thank you, I get a coffee for $2.40 and the dinner listed “in” the other side of the board…..as long as the dinner isn’t some kind of mystery meat, sign me up.

#73 FormerSaskie on 07.14.14 at 9:09 pm

It is good of you, Garth to continue this blog day after day providing information that isn’t easily available ( or nearly as entertaining) elsewhere. I have made better financial decisions than I would have on my own because I have read this blog and some of your books.

I don’t understand why people will tie themselves to so much debt for a house. Having no extra money for living is not a fun place to be. Stupid stupid stupid!

#74 Son of Ponzi on 07.14.14 at 9:09 pm

Vancouver’s real estate market has also seen the impact, having been “fuelled tremendously in the last couple of years by high-end wealthy Chinese and Hong Kong buyers,” according to real estate agent Malcolm Hasman.

Wow. A realtor. — Garth
—————
Malcolm is a hugely successful Realtor.
One should assume he know’s what he’s talking about:

Malcolm Hasman is respected as the top industry leader in the marketing of Vancouver and West Vancouver’s most beautiful and waterfront luxury real estate. His impeccable reputation as Vancouver and West Vancouver’s Top Real Estate Agent – Year after Year – was highlighted on the FOX TV special Millionaires & Mansions that featured many of his luxury real estate properties along with his 26 year career as one of North America’s top real estate agents. Year after Year, Vancouver’s #1 Real Estate Agent* Malcolm brings a wide selection of Vancouver and West Vancouver’s most sought after & desirable luxury real estate listings to the Vancouver and West Vancouver market and offers the most effective and successful marketing programs available in the industry today… 

#75 Mike on 07.14.14 at 9:10 pm

Hey Freedom, I’ll write another rent cheque and snack on a couple more freedom fries? What the..? Not like I have a choice now anyways… slow correction or crash – I’m ready!!

#76 Cici on 07.14.14 at 9:11 pm

#8 raisemyrent

You raise a good point, and apparently even the nasty crash in the 80s didn’t just fall out of the sky and take everyone by surprise…certain experts had been predicting it six years before and up to when it happened.

No one has a crystal ball, but if you haven’t got enough capital to buy in without risking all of your personal savings and your rent is being subsidized, what’s there to lose?

#77 Mark on 07.14.14 at 9:11 pm

The evidence is pretty strong that Canada’s RE is being propped up, especially in Vancouver and Toronto, but CMHC subprime mortgage insured credit. Not by “Chinese” money (evidence of which is practically non-existent).

When the CMHC rules were tightened last year in F’s Budget 2013, house prices went down in the GTA, GVR, and Calgary. And they’ve continued to fall over the past year and a quarter. And will continue to fall as additional supply comes to market while subprime credit guarantees at the CMHC fail to expand meaningfully.

#78 Mark on 07.14.14 at 9:13 pm

“Foreign money abounds in Vancouver.”

Really? Why isn’t it trickling down into wages and prices? Why is leverage and household debt off the charts? Foreign investment would imply de-leveraging, and increases in salaries. Not the stagnation that we see.

#79 Al on 07.14.14 at 9:15 pm

Vancouver is out of control and it isn’t coming back. People are nuts about becoming rich via real estate. Many have and will continue to do so for the foreseeable future. And yes, HAM is real. Like it or not.

#80 Vangrrl on 07.14.14 at 9:17 pm

#55 Brainsail:
ESL stands for English as a Second Language. Doesn’t matter where you’re from!

#81 Son of Ponzi on 07.14.14 at 9:19 pm

An opinion piece, an article on Chinese investments in natural resources in 2012 and a three-year-old clipping thin on facts? Real convincing. — Garth
——————
The truth has no expiry date.

#82 Count Flipalot on 07.14.14 at 9:19 pm

When you live in a very small living space that’s usually no bigger than a jail cell, as do most renting or owning Vancouverites (especially Kits) , the end psychological result after years living that way is bitter, resentful and angry.

#83 Cici on 07.14.14 at 9:22 pm

#26 takla

I like this part of what you said: “who cares where the money comes from?rich mainland Chinese,weathy Japanese,Iranian millionairs, or white Europeans/Canadians ….free market participants come in all colours and creeds,more power to them”

#84 Flawed on 07.14.14 at 9:24 pm

#3 Diane on 07.14.14 at 6:22 pm
Not that I don’t think the house prices aren’t crazy and you shouldn’t buy (I do!). But you can’t look at the statscan demographics and conclude that the buyers are young, english speaking people. Because they aren’t.

Let us know your data. — Garth

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

She did. She lives there like I do. We see, talk and get informed by real people with real information everyday. Unlike public servants at statscan in taxottawa. What? Unless your a paid PS you can’t conduct your own set of stats? I believe the people of Van way before a bunch of bs bureaucrats.

#85 Flawed on 07.14.14 at 9:26 pm

#77 Mark on 07.14.14 at 9:13 pm
“Foreign money abounds in Vancouver.”

Really? Why isn’t it trickling down into wages and prices? Why is leverage and household debt off the charts? Foreign investment would imply de-leveraging, and increases in salaries. Not the stagnation that we see.

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

Easy. Cash is kept offshore. I mean really? Friggin everyone knows this.

#86 Aggregator on 07.14.14 at 9:26 pm

From the co-founders of the MLS frankenumber, Altus Group, comes a new service to help Canadian banks frankenumberize their residential mortgage assets as unreported REO inventory piles up on their balance sheets while real RE sales (including unreported private and FSBO sales, ex presales) decline, leaving banks with a lower sample size to value all those MBS and covered bonds valued at origination.

Altus Says Talking With Canada Banks on Real Estate Risk

Altus Group Ltd. (AIF), a Canadian real estate advisory firm, is in talks with at least two of the country’s big banks to help them assess their real estate risk amid concern from regulators about frothy markets.

Many of the banks have issued requests for proposals asking for an independent analysis of their real estate assets, Altus Chief Executive Officer Bob Courteau said.

“We are now starting to consult with the banks,” Courteau, 58, said July 8 in an interview at Bloomberg’s Toronto office. “We even want to build products for the banks that allow them to do a risk profile on a portfolio.”

Oh but don't you worry. Bilderberg's latest member, Employment Minister Jason Kenny, got his instructions this year to ramp up immigration and promote more climate change and sustainable development. That'll pump up the market.

#87 Butch on 07.14.14 at 9:26 pm

I dunno Garth – a good investor needs to constantly reevaluate information in an attempt to unseat their own biases.

Are you constantly testing against the data? What did you think the data was saying in 2013? Did 2014 meet your predictions? Are we right on track?

#88 };-) aka Devil's Advocate on 07.14.14 at 9:28 pm

LOL.

All I can say is that if I was to relocate back to the Lower Mainland of British Columbia it would definitely be in my best interest to learn Mandarin.

When in Rome, do as the Romans do and in Vancouver that means UNDERSTANDING CHINESE CULTURE because it is a dominant different subculture that has and continues to grow stronger and faster than any other in that region.

I have many Korean and Japanese clients. Neither are particularly fond of the Chinese, just as there are many Canadians are who are not particularly fond of Americans.

“I do not like that man very much. I must get to know him better.” – Abraham Lincoln

There is one thing alone that is driving up the price of British Columbia real estate and that is everyone else in the world (H.A.M. and Eastern Canadians included) who can possibly affording to compete for their own piece of paradise doing so.

Seriously… B.C. vs. any other Canadian Province as a place to live? No contest. But to each their own, although if you think otherwise you must realize you ARE in the minority. So don’t give us any crap. We are pretty friggin’ AWESOME and obviously most agree because they are prepared to pay big bucks for a chunk of that AWESOMENESS.

Yes it certainly is different here };-)

#89 Habs76-79 on 07.14.14 at 9:32 pm

While it is likely foreign money has had an impact in some ways on pockets of real estate, it’s not likely why house prices have reached insane and absurd prices in parts of Canada.

These so called wealthy foreigners, btw notice how many here make sure to single them out as mostly NON-WHITES did not become wealthy by being stupid with money. Sure they like all people probably have made financial mistakes, but I doubt they have some intelligence quotient above most others.

Now for many who have parked money in some places of Canadian real estate, well will likely be hurt when the bubble bursts.

No, if one wants to bitch about the markets (not all markets are booming or even remotely strong) it would be better to oh maybe start with much of the crap on HGTV! Talk about a channel that has gone from general home and garden and DIY stuff and shows to HOUSE PORN! Feed this pablum to empty headed dweebs who watch the channel like a religion, well I bet HGTV has more to do with much of the idiocy of over priced house porn.

Toss in as Garth says all sorts of distorted, misleading to out right lying stats and clap trap by all the realty organizations, the banks and even govt. propaganda well, too many rather mush brained fools are buying into it all as if it all came from God. Markets that will likely blow up in their faces and they will then CRY VICTIM!

Yep, but victim of their own ill-planning and stupidity.

#90 Mean Gene on 07.14.14 at 9:33 pm

The 12 step program to Real Estate capitulation.

#91 Vanecdotal on 07.14.14 at 9:41 pm

I spent most of the first 15 years of my adult life, up until a few years ago, and spent most of my young adulthood working, living and playing in the area. I also have a family member who is still in school in Kits, and I regularly spend time in the Westside to this day. I got to know a lot of the people in the area, home owner-occupiers, condo dwellers, renters, landlords and the local workforce. It was a great mix of income levels, ages, and ethnic backgrounds, a fantastic place to be! Then, something began to change. Despite making a good income, I was priced out of even an entry-level starter condo by early 2000’s. I witnessed first hand the transformation of the Westside during that time period, from vibrant bustling family neighbourhoods, with lots of kids around, young families and older long-time residents, to more darkened homes at night, with no-one living in them, fewer people on the street, way fewer younger kids. Long term SFH owners I knew began selling out and moving away by the early 2000’s, this accelerated in the coming decade. Luxury retailers were opening in the area and downtown, while more local businesses of all stripes closed, and For Lease replaced them. Mediocre houses were suddenly selling over ask with multiple offers, then quickly torn down, or sometimes gut-n-reno’d, then rented out or re-listed for sale in a short timeframe. Many of these that I’d see daily on my travels, would be flipped multiple times in the coming years, each time for substantial price increases. (at least until fairly recently). The neighbourhoods were becoming noticeably quieter, emptier, and it was noticeable. I’d never even heard of the term HAM until a few years ago, I only knew that some invisible force was driving a rapid and unprecedented reshaping of my neighbourhood. Looking back, I suspect it has been a mix of both substantial inflows of foreign wealth pouring in, (to an area with arguably some of the most desirable school catchments in Canada, and also home to some world-renowed private schools), and the availability of cheap credit prompting local speculators potential home-buyers afraid of being “priced out forever” to jump in. The exact percentage of either has yet to be (at least publicly ) determined. We need some reliable and accurate, objective and unbiased market data on what the true drivers of Vancouver’s housing market are, but I believe the present government lacks the political will to do so. Until then we do not know what propelled this market unprecedented levels, however I can tell you from my personal experience there is most certainly something incongruous about the speed at which this transformation occurred, whatever those drivers may be.

#92 Retired Boomer - WI on 07.14.14 at 9:42 pm

I detect some sour notes by reading tonight’s posts.

No, HAM is NOT a material influence on RE. The California article noted, “more Canadians bought than Chinese, but the Chinese bought higher priced homes.”

Put that in context of Vancouver, and it would appear YOU the Canadian buyer, are the price problem.

The subject of tonights post, the unsatisfied renter, well what do I say? It is a FREE country, and you are FREE to make your own mistakes. It is a FREE blog with great financial advice. That includes not buying RE at prices that don’t justify value, but feel FREE to incur disabling debt.

We alas, have yet to invent the cure for stupid, but we can often see it in others actions. Best of luck.

#93 saskatoon on 07.14.14 at 9:43 pm

why is nobody talking about today’s new ontario budget in relation to the sinkin’ real estate ship?

just curious: i thought it was very interesting news–especially the new mandatory ontario pension plan.

downgrading credit rating?

#94 Ronaldo on 07.14.14 at 9:44 pm

#56 Sheane Wallace on 07.14.14 at 8:49 pm

”OK, It is the rich foreigners, I agree.

Now can we please stop CMHC?”

Foreign buyers have been around since I can remember. Even back in the fall of 1974 after property prices crashed (the most in West Vancouver), Henry Block was stating that prices in the lower mainland would continue rising due to Asian influence and shortage of land. Keep in mind that at that time inflation was running at 11 to 12% and it wasn’t until a couple years before that banks even included the spouses income to determine eligibility for a mortgage. In 74 they made it 50% in order for newbies to be able to buy. Lending standards were very tight.

The point you make about CMHC is likely the biggest driver of the skyrocketing prices in Vancouver and Toronto. If the changes made by CMHC had not taken place the Asians would still be buying but a lower prices. It’s all about loose money policy, no risk lending by the major banks and historically low interest rates. Take CMHC and low interest rates out of the equation and see what happens. Nothing new here.

#95 Wiggleroom on 07.14.14 at 9:48 pm

You’re comparing individual income in Kits to household income in Leaside? Why not apples to apples — that’s not a fair comparison.

It won’t change much. — Garth

#96 Lurcher on 07.14.14 at 9:52 pm

Kits guy succumbed to fear vs. logic. It’s a left brain/right brain primal type of thing. The old “buy now or be priced out forever” mantra got stuck in his head. I can’t say I can’t blame him though. Get in before it’s too late scare tactic; has been peddled by the RE cartels and media for so long now that it’s an ingrained thing. Until RE is not seen as a sure thing will anything change.

BTW: I rented in Kits for two years 2008-2010 and the landlord/owners were Caucasian. They have a lot of rental property in Kits.

#97 ILoveCharts on 07.14.14 at 9:54 pm

It’s the best information we have but I really would have preferred to see you point out the obvious flaw in comparing stats on the average household income in a neighbourhood to the price for a single class of house (the single family home) in that neighbourhood.

I encourage everyone to take a look at Kits on Google Maps. You will find that a very large area is old low-rise crappy buildings. The people making $60k are living in those. Some people making $60k live in the houses – they probably bought in 2002 or earlier and can withstand any kind of a downturn. Houses selling for over a million today are probably going to Mainland Chinese or appropriately wealthy professionals.

#98 brainsail on 07.14.14 at 9:55 pm

#67 Sean on 07.14.14 at 9:01 pm

#79 Vangrrl on 07.14.14 at 9:17 pm

Thank you!

#99 the Jaguar on 07.14.14 at 9:57 pm

All that anger & angst from the Kits Dog. Don’t take any of it personally, Garth. Those who come to the blog should be here for thoughtful insight (well…not always, and I could mention names), a review of others opinions, hopefully to gain ones own perspective on what we think the markets are doing and where they are going. Housing or otherwise.
Kits Dog just wants to play the blame game because he is second guessing his actions. No doubt. Imagine living in Vancouver these days ( I did at one time for a couple of years) and watching the entire lower mainland explode before your eyes. Feeling like you will never own a home and be debt free. It must be creating a lot of anxiety for those who don’t feel they can live elsewhere due to job concerns or other ties to the area (emotional or otherwise). I for one would not want to live there again. Weekend visits are enough for me. Kits Dog: You dug your own hole, so you may as well just step forward and get into it. Nobody, including Garth pushed you into it.

#100 Lurcher on 07.14.14 at 9:59 pm

Regarding that graph on the Vancouver median prices; I don’t doubt it because I recently read elsewhere (can’t recall where) that Vancouver detached has had wild price swings in the last few years. Much more than ever before in history; but it’s masked by that goofy “benchmark index” the RE board uses.

#101 Len on 07.14.14 at 10:00 pm

“Well, we don’t know. No stats exist on purchases by people who used cash coming from offshore”

Well – as I often mention, the stats exist, they are just not published. If a person in BC is purchasing a property, they must verify their identity and their place of residence, including their citizenship status. And where the money for the purchase price is coming from. The BC government knows the numbers, as do the BC realtors. It’s just that the numbers are not made public.

Why is this information not transparent? Everything else is then a guesswork. Why???

BC has nothing to do with it. Ever hear if FINTRAC? — Garth

#102 Sheane Wallace on 07.14.14 at 10:01 pm

Kenney and Poloz in Copenhagen for Bilderberg meeting?

http://www.truthandaction.org/2014-bilderberg-meeting-copenhagen/.

Hello? At taxpayer’s expenses?

#103 Potato on 07.14.14 at 10:03 pm

Re: the up-top discussion with Diane on the Kits demographics.

Ultimately it doesn’t matter whether the owners are rich or not, it’s the residents (owners and tenants) who pay the prices and set the fundamentals — unless the rich landlords are willing to subsidize rent forever. So if $60k is the average income, that’s what supporting housing prices in the area.

Now of course, if there are multiple units in the average house then take that into consideration. But even if the average house had 3 units, $1.6M is nearly 10X the (adjusted) average income… I haven’t been to see, but how many units can these houses be split up into?

So it looks pretty clearly like speculation to me (and whether the speculation is local or not — and I suspect there’s just enough HAM to drive the local frenzy, see today’s case study — it’s speculation all the same and best avoided until sanity returns).

Speaking of today’s case study, I can’t understand his point of view. He was living happily with subsidized rent, why pay up to buy the same place? There was no tale of woe and renoviction involved, it sounds like they just stepped up to volunteer for that punishment.

#104 KommyKim on 07.14.14 at 10:12 pm

RE: #103 flawed on 07.13.14 at 11:29 pm
#48 KommyKim on 07.13.14 at 7:57 pm
RE: #6 Flawed on 07.13.14 at 3:25 pm
PRIVATE sector workers have not had an increase in wages in 20 years.

What a load of crap!

Your the communist so you woul know

http://www.edmontonsun.com/2012/09/01/gunter-public-sector-wages-are-getting-out-of-hand

The article YOU posted above agrees with ME and not yourself. A quote from the link above:
“And whereas the incomes of private-sector employees have advanced just 10% against inflation in the past 20 years, federal employees have come ahead 22% in real terms.”
Maybe the reason YOU haven’t received a raise in 20 years is all the “Flawed” work you do.

#105 bill on 07.14.14 at 10:13 pm

On our nightly walks down 8th avenue to alma and back to yew would indicate that the overwhelming majority of house owners on that stretch are european.
as for Vanecdotal’s comment on empty streets!
Not a chance. lots of young folks out partying at lola’s and the beagle and the many other bars in the neighbourhood.
its kits for crying out loud. drunken laughter late at night and that ‘skunk smell’….ya know?

#106 dienekes on 07.14.14 at 10:17 pm

Houses are cheap where i live. Im a tradesman earning 300k a year, no overtime, no weekends. Mortgage paid. Just planning the next vacation to enjoy with my children aged 7, 5, 2
People who live in places like that, to take on debt like that are completely retarded. Ill buy them out 4 times over, cash, before they put a dent in the principal.

#107 Mr Buyer on 07.14.14 at 10:17 pm

A big component of the ESL thing is foreign students home-staying with native speakers and paying tuition to attend classes at publicly funded schools. It is really quite a racket now because the native speaker experience is diluted to such an extent now that it is really just classrooms of ESL students studying remedial English for extended periods in classes composed of other ESL students. Just imagine your worst French teacher reading directly from the worst French textbook and you get a fairly good ideal what these students are up against. Needless to say there is a real resentment towards these ESL students in these host schools that have been swamped by them. Anyways, the huge ESL numbers may not be the result of foreigners taking up residence but rather renting rooms and at premium prices in some cases. Publicly funded schools selling seats to non-residents.

ESL students comprise 6% of the school population, according to the province. What was that about ‘swamping’? — Garth

#108 Ken on 07.14.14 at 10:20 pm

We are in the euphoria phase of Canada’s housing bubble.

#109 Andrew Woburn on 07.14.14 at 10:30 pm

#60 TS
Do people in Toronto and Vancouver realize how much less they would have to make if they moved to some other city?
————————————
#70 Republic_of_Western_Canada
There’s only 2 reasons to live in Kits. When you swim and play tennis – a lot. And can’t afford a Hollyburn membership and a place with it’s own pool up in the Properties. (OK, a third when you have to take the bus up the hill to UBC every day.)
=========================

What the current real estate craziness tells me is that, for many middle and upper-middle class Canadians, housing is a life-style statement and a badge of tribal identity far more than an investment. If you style yourself as a bourgeois bohemian (“bo-bo”), the psychic pain of debt slavery in Kitsilano is actually less than the unspeakable horror of living in Surrey or Langley where nobody will ever say anything clever, sign petitions, own a bicycle or even know that the CBC runs a radio service. Yes, you could live on a lot less in Sudbury, but really, darling!

Kits became cool because it was the local centre of the 1960’s counter-culture which then drew in the bo-bo’s. Eventually economics catches up as it did in Manhattan. When the artists leave, the bo-bo’s will follow en masse to some new Brooklyn. Does anyone still remember that Toronto’s Yorkville was once a hippie heaven?

#110 Knockthemdown on 07.14.14 at 10:32 pm

Fitch Ratings is watching ….

http://www.huffingtonpost.ca/2014/07/14/canada-housing-market-fitch-ratings-agency_n_5585756.html

Are they serious? Relax, it is all good Torcuver :)

#111 Son of Ponzi on 07.14.14 at 10:32 pm

Forget about ESL.
Get your kids into GFL – German as your First Lanquage.
Join the Weltmeisters.

#112 Millenial-Falcon on 07.14.14 at 10:33 pm

Garth bud ,all I can do is shake my head while you and other politicians stick yours in the sand. There’s no data because no one has the balls to collect it for fear of being labeled a rascict. How can you say there is no influence, my banks signs and my condos are written in two languages and the second one is not French. I wonder why they would do this. A condo add on TV had Chinese sub titles I love how people from Ontario sit on their high horse about rasicst vancouverites while they are in Muskoka sipping drinks with their neighbours bob and Shirley ….. Come to metrotown Burnaby I’ll take u for a tour

Please tell me you don’t represent the next generation. — Garth

#113 Son of Ponzi on 07.14.14 at 10:39 pm

#104 bill on 07.14.14 at 10:13 pm
On our nightly walks down 8th avenue to alma and back to yew would indicate that the overwhelming majority of house owners on that stretch are european.
as for Vanecdotal’s comment on empty streets!
Not a chance. lots of young folks out partying at lola’s and the beagle and the many other bars in the neighbourhood.
its kits for crying out loud. drunken laughter late at night and that ‘skunk smell’….ya know?
————–
Of course, happy renters living it up.
The home”owers” are at home eating TV dinners and worry about how to pay for the extra assessment on their leaky condo.

#114 cantcurestupid on 07.14.14 at 10:42 pm

Rule of thumb for RE I find, if you can afford it while maxing TFSA & RSP with 20% down payment, why not ?? Wife & I just bought a condo 25% below MKT value cuz investor got sloshed & just wanted to get out. Lost $160k, not all RE goes up. We still didn’t touch TFSAs, & used my HBP. All good :)

#115 Uh Oh Canada on 07.14.14 at 10:42 pm

The herd usually exists in the cities. It’s the most efficient way to get a good population to believe in something- whether true or not. Therefore, when you think against the herd, you feel abnormal, even when the herd is jumping off a cliff.

Ah, we are all laughing at the city folks debting themselves for over 1 million. You’re better off moving. There are plenty of places that rival Kitsilano, but are probably better.

#116 Musty Basement Dweller on 07.14.14 at 10:45 pm

I guess the Kits blog dog that wrote Garth and that he wrote about tonight thinks that people (Asian or non) will continue to invest in housing in Vancouver even when the prices stagnate and fall. once things slow down the rates will bail from the ship. I wish him Good luck with that one bro, we will see what you think in 10 years with your investment strategy.

#117 HD on 07.14.14 at 10:50 pm

@ #45 4 AM Sunrise on 07.14.14 at 8:19 pm

@#51 Rainclouds on 07.14.14 at 8:29 pm

—————

That is exactly what I was trying to point in my post. The kits blog dog implies that the increase of ‘ESL students’ is evidence of ‘HAM’.

You cannot conclude that based on the number of ‘ESL students’ in schools since ‘ESL students’ don’t necessarily mean ‘Chinese foreigners’. That is a logical fallacy.

Best,

HD

#118 Ricardo on 07.14.14 at 10:50 pm

#4 Mike on 07.14.14 at 6:26 pm

The only way I see Vancouver continuing to rise without any foundation is if it becomes a New York or London where houses are in the millions (so I have heard).

I agree with you Garth this is a HUGE gamble when all your wealth is tied up in one asset class with a massive mortgage set to renew in 5 years (or worse floating).

I live in the Kelowna area and you can still by a mansion overlooking the lake for less than $1mil. Maybe a few more people need to let go of Vancouver and move inland.
+++++++++++++++++
And do what for a living Mike? I hear the hells angels aren’t recruiting and the price of BC Bud has dropped significantly.

#119 Smoking Man on 07.14.14 at 10:57 pm

Polishing off a book is exhausting, painful.. Agonizing.

Way harder than I thought, never doing this again…

#120 Andrew Woburn on 07.14.14 at 11:00 pm

Older readers and younger cinephiles will remember the classic scene in the James Dean movie, “Rebel Without a Cause” where bored California teens enliven their Saturday nights by racing their cars as fast as possible toward a cliff’s edge. The game was called “Chicken” and the loser was the first to turn away from the cliff. The James Dean character flinches at the last possible second but his rival goes over. The Kitsilano moaner above will know just how that feels when he renews at 5%.

winner is the last one to

#121 Financial Freedom at 40 on 07.14.14 at 11:02 pm

This is the story of one, a ‘hood, 2 intersections north of Leaside:

215 households
Avg household income: $406K
First language: English-342 Persian-70 Cantonese-46 Chinese nos-38 Mandarin-27 French-26 etc.
202 own, 13 rent Top occupation: 102 in health

In my old ‘hood the cohort buying is very different from the cohort selling. The 70+ year-old English speaking multi-generation Canadians knocking around in the same house they raised their family in is making a real estate killing selling now. Their new neighbours? Very transient, overseas most of the year, constantly flipping and moving, global, mobile, young adult kids alone while going to school. They rebuild and keep the property immaculate, sprucing up the entire street. Then they move on, money in search of the next opportunity, or get called back to business and family responsibilities.

What does real estate in TO do to your brain? Glad, charitable, delighted. And after all that inertia and fear of change has been worn down to the bone – celebration!

My mom & dad send their appreciation.

#122 };-) aka Devil's Advocate on 07.14.14 at 11:05 pm

ESL students comprise 6% of the school population, according to the province. What was that about ‘swamping’? — Garth

Maybe… but how about looking closer into the post secondary education system in British Columbia and the advantages afforded foreign students over domestic. There is an interesting story to be told there. For example: Foreign (Chinese) Students get first dibs on on-campus housing. Canadian citizens must go through a lottery for that which is left. We have friends whose kids are renting some of those Kits basement suites because they didn’t win the lottery for on-campus residences.

Of course it all comes down to improving foreign relations doesn’t it? Although a Chinese student I once had a conversation with admitted Canadians make it too easy to ignore the opportunity to take advantage of the offerings. I think maybe we should be so eager to educate our own populace first, don’t you? And maybe consider the grievances of our teachers as having some legitimacy. But what do I know, other than we pay hockey players ridiculous amounts of money for doing something far less important.

I remember taking a stats class which was easily 60% ESL, with a prof who had a HEAVY Chinese accent. Took me half the term just to understand what he was saying. Of course had I brushed up on my “Chinglish” sooner it’d probably have done a great deal to improve my mark.

Like I said/implied previously; we aren’t gonna change it so we’d best learn to adapt as quickly as possible. They are coming and they have the bucks to pay the price of admission. It’s the GOLDEN rule my friends. And maybe, just maybe, our governments CAN be bought };-)

#123 Knockthemdown on 07.14.14 at 11:06 pm

Watch CHINA – the end of house frenzy in Canada.

http://www.zerohedge.com/news/2014-07-14/chinas-secret-money-laundering-story-goes-mainstream-promptly-censored

Nothing – Nada – Vancouver Ground Zero

#124 Sydneysider on 07.14.14 at 11:08 pm

Vancouver and Sydney housing markets are often compared, so perhaps this story will bring some comfort to Vancouver renters.

http://www.smh.com.au/business/the-economy/the-rba-says-youre-probably-better-off-renting-20140714-zt6xx.html

To put things in perspective, it costs about $35K per annum to rent a Sydney house that would cost $1.2M to acquire, and at least $4K pa to run if nothing breaks down or falls off. Term deposits pay 4% at present, a historic low for this country I believe.

#125 Berniebee on 07.14.14 at 11:10 pm

#70 Republic_of_Western_Canada

And don’t forget Vancouver’s dirty little secret – the squalid East Hastings street area. A post apocalyptic ghetto of barred doors and windows featuring the dregs of humanity. As bad as Detroit’s worst skid row.
Not in Canada, you say? I’m not exaggerating.

The time I stopped at a traffic light while first driving along East Hastings will forever be seared into my memory. A typical overcast mid-week morning. I noticed that of the several dozen people within view, few were actually going any where. An obviously stoned woman floated by, steadying herself along the front of my car. A strange parade of derelicts walked, stumbled or swayed in front of me. One stopped his shopping cart in the middle of the street, pausing to have a conversation with…nobody. A hooker slowed for a look. I noticed two people sleeping on the sidewalk within 15 feet of the car. I lost count of the shopping carts – at least 10. The stoned woman tripped over a body, which did not move. The light changed and now relieved, I put the car in motion. That’s when I noticed that every single storefront had security bars behind the windows and metal grids in front of the doors. As I drove, I saw more and more people lining the street, leaning at storefronts or sitting on the sidewalk.
It was only later that I was told about the open drug markets all around the corner of East Hastings and Main. “Just don’t go there, day or night.”, I was warned. Vancouver. Incredible wealth in the mountains, matched only by the absolute despair of East Hastings.

#126 Mr Zipper on 07.14.14 at 11:19 pm

BNN ran a piece on HAM in Vanc…suggesting they might have had something to do with the price uptick…..a bit late……they suggest it has something to do with learning how to skirt the Chinese law on exporting Yuan……banks are complicit…so says BNN. Of course the political agenda is to call every one who’s right on this a raging racist……but tell that to all the people like the goner who can no longer afford in the area they grew up in. G…you’re dead wrong on HAM…..it’ll take a big man to admit it. The goner is right……these areas mentioned are now nearing 100% Mainland Chinese owned…..anyone living in Vancouver can attest to this fact. The politicians figured that if they kept calling locals racist they could flood immigrants in and hold down the protest. But that ship has sailed…….the Mainland Chinese are now the majority in Vancouver….thanks to quiet Canadian politicians.

Kits btw …is a crap hole……mostly older dumps built in between 1890 and 1920……there used to be train tracks running through it to carry people to the cannery jobs out in Steveston where the line ends. In the early part of the 20th century it was like live in purgatory….you had to be poor as a fish rat to live that far out. The good part of town was the west end…..which is now a gay sex circus.

#127 to_be_frank on 07.14.14 at 11:20 pm

Secret path revealed that allows wealthy Chinese to transfer billions overseas by buying pricey property in Vancouver, New York and Sydney.

http://business.financialpost.com/2014/07/14/secret-path-revealed-that-allows-wealthy-chinese-to-transfer-billions-overseas-buying-pricey-property-in-vancouver-new-york-and-sydney/

And Garth says the Chinese buyers haven’t had an effect on Vancouver real estate…

[I read it. Nothing about Vancouver. — Garth]
____________________________________________

I read it, too. Vancouver is mentioned in the third-last paragraph.

Ah yes, a non-quote from a buy-now-or-buy-never Van real estate agent. Useless. — Garth

#128 R on 07.14.14 at 11:29 pm

Here’s the thing about anecdotal evidence:

It’s useless for telling you anything about what’s really happening around you.

#129 bill on 07.14.14 at 11:30 pm

‘extra assessment on their leaky condo.’
for the first time in a couple of years we can see the building behind the green curtain at yew and broadway.
basically every older condo near us has had the treatment and for many blocks around….
this to me is the real lunacy.these condos are just plain shoddily built.

#130 fisheman on 07.14.14 at 11:31 pm

42 years living the westside Vancouver (anything west of Granville). I think of Kits & the False Creek area as a white enclave. Right now dirt (tear downs) from 1.5 to to 2.5 sell in seconds out here. East Indians do the basement. Chinese do the framing & East Indians finish off the roof. Then a container with all the goodies premade for the interior is dumped on the property. QED. Haven’t seen many Euro tradesmen on site lately; but nothing preventing any one of us from following a successful business model.

#131 Basil Fawlty on 07.14.14 at 11:35 pm

This blog continually brings up the issue of the affect of foreign money on Vancouver real estate. If I am understanding Garths point correctly, he suggests that HAM has not had a significant effect on real estate prices.
Being a resident of Point Grey and Vancouver resident for over 50 years, my opinion is that foreign money is a huge factor in real estate prices. I recently asked a Point Grey realtor with 30 years experience in the Westside about Garths opinion and he proceeded to tell me stor after storey of foreign money buying real estate. I questioned two friends who emigrated from Shanghai and have both purchased on the Westside and they could not believe that Garth could hold such an opinion. When you live here it is obvious.
Statistics? We don’t need no stinkin statistics, it’s as clear as the nose on your face.

#132 DON on 07.14.14 at 11:36 pm

Sounds like this guy is trying to justify why he decided to finally buy. If only his justification was enough. I had lived in Kits for years and it is a trendy neighborhood – students live there, but mostly young and old professionals most of which have no children. Great place to rent/live. But try to fight the traffic when you want to go somewhere and have to navigate the roads and bridges. Most stay put, enjoy the beach, etc. Oh the memories, bar hoping with the boys – on the hunt.

Anyways: I was there at the start when things were not so crazy: Of course credit was tighter back in 1999-2000- 2001. Condo’s on 4ths – one large bedroom were 160 – 189K. I have friends “who remember what happened to their parents in the 80’s who refuse to buy in Vancouver. Vancouver lacks head offices, it has always been a problem. Sure offshore folks are buying, but the on shore are the ones all in a tizzy, keeping up with the JONES. But lucky me I was able to get out of Vancouver, it is a hell hole for raging drivers and the gangs that live in the well to do neighborhoods. I remember a time when it was the Japanese buying up all the real estate and taking over Vancouver and things dried up and reverted to the mean.

It still amazes me that people can justify anything, dismiss real facts all because they think there is safety in numbers. Sales people scaring them! People want everything to happen on their imagined timelines or they throw a fit and complain. Lots of people driving new cars these days, owning big houses, big boats, expensive trips. They all must be hockey players, from Russia?

The “It hasn’t happened yet” argument “so…I am just going to go a head and do it anyway…cause my friends and anyone else are doing it”, is only valid in a world without consequence. Brainwash a generation into believing interests rates will never rise and you have trouble with perception. And decisions are made quickly much like when bungy jumping. If you think out all the factors – you might not be so quick to jump.

#133 Spectacle on 07.14.14 at 11:37 pm

Thanks Garth…..

Appreciate Your wordsmithmanship.

#134 benchwarmer on 07.14.14 at 11:38 pm

I’m priced out. Oh well I guess I will just keep renting and keep saving and investing real dollars.
Wow that was easy.

#135 Nomad on 07.14.14 at 11:40 pm

That was refreshing to see a chart trying to shed light on all the guessing regarding where the money is coming from.

At first I smirked at the “self-identified” first language, thinking many must answer English, even if it’s not. I answer English when my first language is French sometimes, out of paranoia, but then I remembered that not everyone is paranoiac ;)

How about a chart for all of Vancouver and all of Toronto.
We need more data. 90% of articles out there are backed by little facts.

Still, foreign money must have to do something about it, otherwise why the insane difference with Montreal. Montreal’s a kick ass city. I can’t believe 5 degrees colder than Toronto is keeping house prices more than 50% lower: the average detached bungalow is 290k. Is it that the demand is that much lower because of a high supply? Or is it that french Canadians have more debt averse? No way, they love credit.

Source on the 290k: http://www.newswire.ca/en/story/1287075/property-price-increases-within-a-slowing-montreal-real-estate-environment-in-the-fourth-quarter-of-2013

#136 DON on 07.14.14 at 11:48 pm

#124 Berniebee on 07.14.14 at 11:10 pm

#70 Republic_of_Western_Canada

Only 5 or so city blocks separate the downtown business district from the once strong east hasting district. And when you stop at a light – you ensure your doors are locked, never was hastled, but they looked the part. Most are good people who need our collective help. To say the least! I wonder what they think of the real estate market.

#137 Mark on 07.14.14 at 11:53 pm

“Easy. Cash is kept offshore. I mean really? Friggin everyone knows this.”

Impossible. The houses have to be bought somehow, which means there has to be sellers. Where are all the rich sellers?

#138 Mark on 07.14.14 at 11:55 pm

“People are nuts about becoming rich via real estate. Many have and will continue to do so for the foreseeable future. “

Not over the past year with RE price declines pretty much across Canada. People are becoming poorer by owning RE instead of, for example, Garth’s prototypical diversified portfolio.

#139 bill on 07.14.14 at 11:58 pm

Population of immigrant mother tongue families, showing main languages comprising each family, Canada, 2011

http://www12.statcan.gc.ca/census-recensement/2011/as-sa/98-314-x/2011003/tbl/tbl3_2-1-eng.cfm

#140 2CntsCdn on 07.15.14 at 12:05 am

Very few people do what they should do. Most just do what they want to do … then try to reverse justify it. That’s why there’s 1%’ers and the other 99%.

#141 Vanecdotal on 07.15.14 at 12:09 am

Re: #104 bill on 07.14.14 at 10:13 pm

I know both those haunts well, and the stretch you walk nightly, which is squarely in the UBC/young professional rental zone of older apartments and multi-suite SFHs. Those primarily European homeowners you are referring to are likely some of the “Old Guard” of Kits when there was a predominantly Greek (and other Mediterranean countries) population in that area, they have likely owned their homes for many years, and most of these SFHs are multi-suite income properties, some owner-occupied, some not. It’s arguably one of the livelier areas remaining on the Westside due to close proximity to the beaches and a decent semblance of what passes for nightlife in Kits. That said, it is waaaay more subdued than it once was. I know, because I was there contributing to the, ah, liveliness for quite some time. Not sure how long you’ve lived in the area but I still assert it is but a mere shadow of it’s former self. I will add Lola’s is the only nightclub on the Westside, (hence the higher concentration of drunken revelers), and the Beagle pub is one of the precious few remaining popular hangouts for the UBC crowd. If you branch out farther afield in your walks you will find… a ghost town, especially more than 5 blocks south of Broadway. I was speaking relative to what Kits used to be like which pales to today’s version.

#142 Son of Ponzi on 07.15.14 at 12:10 am

BTW: I rented in Kits for two years 2008-2010 and the landlord/owners were Caucasian. They have a lot of rental property in Kits.
—————
That’s why it’s so scary.
The Caucasian landlords all sold out in the last few years.

#143 4 AM Sunrise on 07.15.14 at 12:12 am

At 0:49 in this video, our blog host is helping us get more candy out of the candy dispenser of life:

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

Dude.

#144 Carpe Diem on 07.15.14 at 12:20 am

Let fools get what they want in Vancouver.

I lived there for 13 years. I loved the bike trails, the sea and skiing.

But it ain’t worth the mortgage!

In Ottawa, it’s not far to get mountain biking. 1 hour to a major hill for skiing and lots of water for boating or beaching.

We make more in Ottawa than Vancouver and family life is so much better being the 4th biggest city.

So good luck on the $1M purchase, that would have bought you so much more elsewhere.

Carpe Diem

#145 prairie person on 07.15.14 at 12:33 am

We keep hearing about how poor the mkt is in Victoria. Friends of mine put their house up for sale less than two weeks ago. It is sold. Got their price. May be a fluke, just lucky, but the deal is done.

#146 Matthew on 07.15.14 at 12:38 am

“Of the roughly 550 schools in Metro Vancouver, there are 65 — primarily in Richmond, Surrey and Vancouver — where more than half of the students are English learners.” In other words, in 11.8% of Vancouver schools, ESL students make up half the learners. Are you seriously bothered by less than 6% of the student population not speaking English? I sure hope not. There’s a word for that. — Garth”

Garth, are you trying to say that the other schools don’t have any non – English speakers? 6% is the approximate number if the other 485 schools have no non – English speakers.

“If you have better data, share. — Garth”

I think you missed Diane’s point. She’s saying that the problem is in your analysis and interpretation of the data, not that the data is poor.

#147 lurker on 07.15.14 at 12:39 am

Who buys the houses (foreign $ etc.) has nothing to do with wether or not it makes sense to buy vs. rent.

The core of Garth’s advice isn’t that the market will go up or down at a particular time, it’s that it’s nuts to go into massive debt when you have no other assets, when renting allows more flexibility, opportunity for investment, and infinitely less risk.

#148 Shawn on 07.15.14 at 12:42 am

Who’s bitter?

See what real estate in Vancouver does to your brain? Bitter, resentful, angry.

******
See what being wrong about real estate in Vancouver for years on end does to your brain? Bitter, resentful, angry?

Admit it, you were dead wrong. And oh so certain. You had facts and logic on your side. But, the madness of crowds has prevailed.

Was it not Newton who lamented being able to predict the movement of the planets but not of markets (re the South Sea (trading company) bubble). So you are in great company.

But Newton admitted he was wrong.

#149 Matthew on 07.15.14 at 12:45 am

Sorry, I meant Smartalox at comment #27, not Diane.

#150 Shawn on 07.15.14 at 12:49 am

How not to apologize

Off topic, but I saw a bank non-apology today.

After denying a woman access to her late husband’s accounts for months and months, the bank quickly corrected the matter when the woman went public.

The “apology” reads as follows:

“We have reached out to the customer to communicate that this issue has been resolved and apologized for any inconvenience.”

ANY inconvenience? ANY? Like there was some doubt that there was some?

This is a very common statement in “apologies” and suggests that the one apologizing is not really ready to admit that there was in fact an inconvenience.
For goodness sakes apologize for THE inconvenience. If not sure there was ANY inconvenience then don’t bother apologizing.

#151 TakingResponsibility on 07.15.14 at 1:34 am

I’m quite leery about Stats Can stats. The voluntary nature of the National Household Survey (that replaced the long form census) has apparently resulted in significant non-responses (28%) and even Stats Can has issued warnings and cautions about the reliability and comparability of the NHS data. There is discrepancy between Immigration data and Stats Can data, as well.

There is a huge population of Chinese people – newcomers, perhaps – in Canada. Certainly not a perception but a reality. Who really cares?? I don’t care that every other church has Chinese signage. Pfft, not my business. And, banks and schools have Chinese symbols and education. In red-neck Edmonton no less! Chinese people must be incredibly smart / powerful or they would have simply been integrated as other immigrant groups have. But….I have serious doubts that they are ALL coming with wads of cash, buying up houses, etc.

After all, as Garth argues, “No stats exist on purchases by people who used cash coming from offshore…”

But why would smart Chinese use cash to speculate? Who needs cash when anyone – Canadian citizen or not – Permanent resident or not – and length of Time in Canada is of no concern – can speculate on housing with complete CMHC insurance and encouragement. Ha! If any other country offered the kind of speculation that CMHC and the banks came up with here – wouldn’t you take it?? And if (I mean ‘when’) there is a loss, do you really think recourse reaches into other states (like China)??!! And, remember it wasn’t that long ago that the max amount insurable was not limited to one million or number of ‘units’.

So, on the subject of statistical data, does the public know that CMHC will NOT disclose the numbers regarding insuring non-permanent residents and/or permanent residents. One may request such data under research and reference requests and there is complete non-disclosure.

Frustrating. There are many many public servant minions within CMHC who come up with all kinds of mostly useless housing data but try to request data that CMHC surely must have and there is a blank.

#152 Joe Anderson on 07.15.14 at 1:44 am

No doubt foreign, especially Asian, demand influences Vancouver real estate, but it isn’t the sole driver of prices. I’ve lived in Vancouver my entire life, and I went to school and university with many wealthy Hong Kong and Taiwanese immigrant kids. I’ve also worked and done business with many first generation immigrants from Asia (in more recent years, there are more people o know from Mainland China). Of course, I also grew up with people from India, South Korea, and Vietnam amongst other places. The thing I noticed about people originally from Hong Kong especially is that they tended to have relatives who went to other places like San Francisco or LA or Toronto. They had options, and Vancouver was just one option. A lot of people I knew actually went back to Hong Kong, or even ended up leaving Vancouver for the US or Eastern Canada. They certainly aren’t the only ones buying in Vancouver. Also, I know Kits well and it is one of the whitest neighborhoods in Vancouver for lack of a better word. It’s not just the renters who are white, too. It is still an ethnically diverse neighborhood with lots of foreign, absentee landlords, but my knowledge of Kits makes me think it is low interest rates and dumb local money largely driving prices there.

#153 Chaddywack on 07.15.14 at 1:45 am

I agree, I rent in that area and I do believe the stats that Kits has the lowest Visible Minority population of Vancouver (16% as of 2009). This is from my very unscientific observation of seeing mostly “white” people walking around.

http://www.kitsilano.ca/2009/09/05/kitsilano-mostly-white-childless/

Sure maybe since 2009 it’s become almost 100% Chinese as some people claim, but I seriously doubt that the stats would be much different now.

Our landlord is Greek and he owns 4 other properties……maybe it’s all the HGM flooding Kits? Our entire condo building has maybe one or two Chinese-Canadian owners (speak English with no accent) so I just don’t see how our neighbourhood is being bought up by HAM………

Maybe it’s a Shaughnessy thing? I never see anyone in those yards or on the streets there…..must be foreign Chinese that own all of them

#154 Angryman127 on 07.15.14 at 1:45 am

Bitter? Regretful? Angry???

More like remorseful observant and accepting. Clearly the East has no clue what has happened in Vancouver. Our cries are met with denial and accusations of racism.

Kitsilano is a white enclave..one you no doubt visit on your trips from yvr through to Robson Street….check out the language charts in East Van. Talk to your island friends honestly about why they left Vancouver.

The East never gets it. Way, way too much arrogance.

#155 Corban on 07.15.14 at 1:50 am

My hot asian wife and I would love to know where we can get our hands on some of that hot asian money everyone is talking about. Is there an application form somewhere? I mean she’s hot, and asian so she qualifies right?

#156 Freedom First on 07.15.14 at 2:06 am

#74 Mike

I can tell from reading your posts that you have not the slightest conception of what Freedom First means. It is obvious you are swimming in self-pity and have learned nothing from Garth’s Blog, which teaches everything you need to know to attain financial sanity and an immense sense of gratitude that follows achieving freedom from financial worry. Mike, grow up.

#157 westsider on 07.15.14 at 2:10 am

Had a chat with a CBSA agent in Vancouver the other day.
They handle export licenses for automobiles. They said that they are inundated with export of Mercs and BMWs to China. They get 50 apps. a day. The same number goes for LandRovers. I did some number crunching on the models they told me, and it seems that it works out to $1.5 Billion of cars exported from Greater Vancouver to mainland China per year. The exporters say they can make $50K per car in Shanghai. Nothing wrong with doing good business.
I think that most people under-estimate the staggering among of money that is available from overseas. I live in East Pt. Grey and the house next to me was bought 5 years ago for over $2 million, and no one has ever been in it. There are at least 8 or 10 other houses within 2 blocks that are the same and they are valued at over $3.5 million. One still has the Christmas wreath on the front
door. One of the overseas owners, 2 doors from me,told me that he has 3 or 4 families from his hometown in China buying houses in the area.
No, things will probably not end well and the changes that have taken place for all the reasons you have noted will continue, but don’t under-estimate the flow of legal and illegal money into the lower mainland. It really skews the numbers and makes it hard to have an accurate conversation about what is happening here.

#158 johnny d on 07.15.14 at 2:22 am

@#73 Son of Ponzi on 07.14.14 at 9:09 pm

Then why don’t you just marry him.

#159 Cha Ching on 07.15.14 at 2:24 am

The streets are filled with the tears of renters who listened to real estate fear mongering for the last decade… QQ

Tasty!

#160 deaner on 07.15.14 at 2:40 am

Garth: “Well, we don’t know. No stats exist on purchases by people who used cash coming from offshore”

Len: Well – as I often mention, the stats exist, they are just not published.

Garth: BC has nothing to do with it. Ever hear if FINTRAC?

Does anyone know if a municipal government in BC could pass a law requiring publication of such info or submission to an independent Open Data type housing registry site containing the real estate transaction data info you’re describing?

There are lots of technical ways to collect and present the data, I just wonder if it’s legally possible for a BC municipality to share data with such a registry.

Municipal election turnout (coming in November) is hilariously dismal (30%), and this may be a popular policy on both the left and the right.

#161 Aggregator on 07.15.14 at 2:40 am

 #143 Aggregator on 06.18.14 at 2:58 pm

Either Vancouver or Toronto or both will be the next Renminbi settlement centre. So far Vancouver is more favorable as the North American gateway to the Pacific.

This will change everything. Expect an announcement soon. Dump your loonies, buy RMB.

Premier Clark pitches Vancouver as first offshore settlement centre for Chinese currency in North America

B.C. is ramping up efforts to make trade deals with Asian nations by charting a route to build the first international trading centre for China’s renminbi currency.

Premier Christy Clark sang the province’s virtues in Vancouver on Monday to an elite group of business people from China.

She told the invite-only forum that B.C. is making headway towards establishing Vancouver as the first offshore settlement centre for the renminbi, or RMB, in North America.

If you live in Vancouver or surrounding areas, pay attention. This will transform every neighbourhood and your way of life. Remember: in a democracy, one person equals one vote. In communism, one dollar buys one vote.

#162 HAM on BNN Deleted on 07.15.14 at 3:10 am

So….BNN talking HAM scares your giblets into deleting any mention….that’s classic traitor G….classic quisling.

Not everyones got their panties pulled up overtheir eyes.

http://www.vancouversun.com/life/Chinese+signs+questioned+West+Vancouver/10029193/story.html?google_editors_picks=true

A ‘Put Canada First’ group trying to rip down non-English signs is a disgrace. Bullies like you are just sad. — Garth

#163 Flawed on 07.15.14 at 3:19 am

The article YOU posted above agrees with ME and not yourself. A quote from the link above:
“And whereas the incomes of private-sector employees have advanced just 10% against inflation in the past 20 years, federal employees have come ahead 22% in real terms.”
Maybe the reason YOU haven’t received a raise in 20 years is all the “Flawed” work you do.

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

First of all…..nice cherry pick. Second of all we all know Govt numbers are BBBBBBSSSSSSSS. Especially when you take into account the fees, levies and nickel and diming they have been doing. There is twice as much money sucked out of your wallet compared to 20 years ago so even that measly 10% is nowhere near to be true.

Don’t think that’s true? Guess you need to read the below article about Debtario……..and how its going to drag Canada into the stone age thanks to all the GREAT work our Public Service has done for us.

http://armstrongeconomics.com/2014/07/04/sovereign-debt-crisis-alive-well-in-canada-ontario-is-one-of-the-largest-debts-in-the-world-among-sub-sovereign-governments/

oh……..and enter bitcoin

#164 Kits388 on 07.15.14 at 3:20 am

Hi Garth,

I am glad my post elicited so much debate – always a good thing. My home purchase has not closed so I have not said good bye yet.

A couple of things worth noting. I did not blame you for my decisions. I lived in Kits 6 years ago. I rent in West Van and purchased a home in West Van. I will pay more than you can imagine (cash) for my home and it will be less than 25% of my net worth. The home is close to our preferred schools. My only complaint is I paid more than I would have 6 years ago. Will I lose money eventually? Maybe. It’s all relative. I got tired of being asked to move every 18 months because a landlord is demolishing the home and building or flipping the residence. Life will go on if prices decline. In fact, I will simply upgrade my home because more expensive homes will likely decline more than mine on a relative basis.

Apparently, in 20 years there will be another 1 million residents in Van. Where will the 1%ers live? That’s another 10,000 people looking for homes in Van West and West Van.

I got lucky in life and can’t complain. I wish all the blog dogs well, regardless of where you live or what race you come from.

#165 Flawed on 07.15.14 at 3:22 am

#122 Knockthemdown on 07.14.14 at 11:06 pm
Watch CHINA – the end of house frenzy in Canada.

http://www.zerohedge.com/news/2014-07-14/chinas-secret-money-laundering-story-goes-mainstream-promptly-censored

Nothing – Nada – Vancouver Ground Zero

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

I guess if this actually comes true it will provide the truth Garth long has been asking for. Crow pie anyone?

#166 Future Expatriate on 07.15.14 at 3:23 am

It seems to me that HAM got that way by being smart and would be buying in California where you can get deals and not in a bubble market. If they wanted West Coast.

#167 observer on 07.15.14 at 5:49 am

ESL student are just people enrolled in ESL programs or school considers their english poor. You can be born here, white, black or whatever.

I was consider ESL when I was in high school, even though I start kindergarten here. I know lots of chinese elementary students in our elementary school which are reading in way below their grades and worst against the provincial crit.

Problem was my parent / grandparent wanted to keep their culture/ The refused to learn english and we spoke chinese at home.

Now a days with the major of schools having high asian students there really isn’t a need to learn english. So many students pay because of culture.

I stopped after my kid passed grade 1 chinese. And you can hear all the talk from other chinese grandparents. What a disgrace, you have to know chinese yaddy ya ya…

The old culture yaps without understanding, I wish they would mind their own f-n business

#168 liquidincalgary on 07.15.14 at 7:53 am

#176 Habs76-79

and just what colour is the sky, in your world?

#169 Down and out on 07.15.14 at 8:24 am

Garth your take on borrowing from the RRSP is right on,talking to financial adviser she quotes reality people telling people in LALA land to take out a RRSP loan sitting on it for 3 months going to mortgage broker and using this money for down payment (rrsp ) and stating some banks never catch up to the paper shuffle . This is just another abuse of the system which can put us all in peril . On the bright side some people who have talked to this adviser get straightened out and put on the right path others find our much later with a letter from CRa.

#170 HAM Sandwhich on 07.15.14 at 8:33 am

Garth,

So there are stats and reports on HAM in the States but you ignore the fact that it could be happening here too? Why? Why would the HAM stop at the 49th parallel?

Foreign buyers are hardly new. But they do not set market prices in an entire urban area. — Garth

#171 Nomad on 07.15.14 at 8:41 am

People, whatever happens with home prices, I can’t wait to find out. Either ways, it’ll be fun to go back and look at articles out there.

What I’d love to find is a site that compiled articles and public official announcements that happened in the US leading to 2008. A blog like this one. If there was such a blog, did it kick off online 4 years before the crash? Or did it start way before that (should we expect this type of asset bubble to hold up for another 4 years)? Were people commenting on those also stunned by how long their house prices were holding up?

#172 JWD on 07.15.14 at 8:48 am

The Blog dog is spot on. Garth, you need to walk the streets of Kits and see that the “data” is just not reliable. Virtually every other house has a side gate for single or multiple rentals. The vast majority of “residence” you see are the 60% under 40 renters. Asians, mainly chinese now dominate the ownership. Look for enrollment in area schools with a demographic breakdown. Or perhaps data on family names of asian decent. Pt Grey, Prince of Wales, Magee etc. Both my parents were born and raised on the West side, and I can tell you the neighborhood has completely changed. Sure, they are still well to do young local families with good jobs, or more to the point wealthy families that have helped them ( bank of Mom and Dad ). I still know a few owners in Kits and ALL of them bought before 2002, when it was still within reach.

Kits is a beautiful place- love the low rise residential feel so close to the beach and the city and the majestic old trees that line most streets. But the RE prices have gone mental. The rental yields to not add up at all. Queue the HAM – it’s the one and only reason and it’s real- data or not.

Real estate prices have gone mental because people – like the subject of my post above – are mental enough to buy. Some white people can be just as dumb as some Asians. — Garth

#173 Jimbo on 07.15.14 at 8:56 am

Smart asian money wouldn’t be parking their money in Canada or Canadian real estate unless there was no choice (i.e. to launder).

The article posted by #163 Flawed just points out once more that Bank of China (amongst others) continues to launder money. Nothing new here. This has been going on for decades.

Let’s rewind roughly 6 months and read this.
http://business.financialpost.com/2014/02/12/how-canadas-new-immigration-rules-could-slow-high-end-real-estate-sales/?__federated=1

House horniness, low rates, and stupidity is why house prices are still high.

Banks are tightening up, rates will go up, horniness will go down, prices will go down, HAM will be subdued even more and Kitsiliano will be back reading Garth’s blog.

#174 Whati s Up With That on 07.15.14 at 9:28 am

The following has nothing to do with real estate…
So I come across this YouTube guy, Stephan Molyneux, is giving me pause talking about domestic violence with full on stats and research backing up his presentation. It kind of lines up more with my own experiences as a child and in my 20s but I got to tell you it leaves me wondering how we have been served up a very different story for the past 40 years. Anyways you can check his presentation out here…
https://www.youtube.com/watch?v=-KgBVedec_0

#175 Shawn on 07.15.14 at 9:34 am

Dollars nd Votes

Aggregator at 160 said:

Remember: in a democracy, one person equals one vote. In communism, one dollar buys one vote.

************************************
Note sure you can buy a vote in communism.

It’s capitalism where one dollar equals one vote. But only in the financial area. Capitalism usually has democracy for the political system. (‘cept in China apparently)

#176 Mr Buyer on 07.15.14 at 9:49 am

#106 Mr Buyer on 07.14.14 at 10:17 pm
ESL students comprise 6% of the school population, according to the province. What was that about ‘swamping’? — Garth

Well I stand corrected. There is quite a difference between the assertion…

There are 60 schools in Vancouver with more than 50% ESL students. Some schools have more than 70% ESL. Did that happen by accident? Does Pickering have schools with 70% ESL?

As usual I ASSuMEd there was something approximating a stat in that statement and as usual I have supported the assertion a little knowledge is dangerous. In my defense I have personal experiences of returnees from Vancouver schools that have described this less than optimal conditions but at 6% ESL it clearly cannot be as widespread as I previously asserted. It is common knowledge now in the foreign ESL world that Vancouver ESL is now a less than optimal destination for foreign ESL students. Thankfully that is not my ASSerTION. I am just reporting what people that arrange that sort of thing tell me…

#177 Mr Buyer on 07.15.14 at 10:06 am

PS… I know better than to just accept an assertion. It was late, I was busy and touch screen typing on my wife’s $!!&ing portable device so I did not bother checking the assertion. It fit (but too well) with what I was being told by others but god in heaven it takes me five [email protected]!%!!ing minutes to type in a $!&!ing URL with the $%!!ing touch screen. What kind of sadist thought up these [email protected]*!!ing things? Anyways that is my story and I am sticking to it. Please forgive the profanity and it took 15 minutes to peck this out.

#178 Waterloo Resident on 07.15.14 at 10:10 am

Let us hope our real estate market does not collapse because with our manufacturing base quickly disappearing, there is almost no other place for most guys to work these days.

We only need so many doctors and teachers to go around. Just look at how many teachers cannot find jobs.

Yes, scientists and engineers are needed when we have a manufacturing base, but without any manufacturing the demand for engineers goes away by about 70% also.

So if housing construction falls, you will see a massive jump in the male unemployment rate. And women are already jumping at the bit when it comes to divorces, so just imagine how divorce rates will skyrocket here in Canada when tens of thousands of guys have to go to their wives and say “Honey, I lost my job today.” The next step his faithful wife will do is consult with a divorce attorney.

#179 Aggregator on 07.15.14 at 10:21 am

#168 Shawn

There is no such thing as free market capitalism when governments reward failure. What you speak of is crony capitalism, which is more or less communism in disguise, or at the very least, a transition towards it.

#180 -=jwk=- on 07.15.14 at 10:32 am

Give it up garth, Vancouver is gone. It’s not for Canadians anymore, it s for Chinese. You want better data? How about from the Van school district site:

•25% of K-Grade 12 students are designated ESL
•60% speak a language other than English at home

Are you saying ‘Canadians’ only speak English? Sure sounds that way. — Garth

#181 -=jwk=- on 07.15.14 at 10:32 am

http://www.vsb.bc.ca/about-vsb

#182 Timing is everything on 07.15.14 at 10:38 am

Blog dog from Kits is right and wrong. Mr. Turner you are right and wrong. In normal times interest rates would have moved higher by now and prices would have corrected not just in Vancouver but globally. Monetary and fiscal policy has ensured a long and steady climb in real estate. To what end? Who knows what the ultimate outcome will be? And what is normal times? What I do know is that I wouldn’t want a mortgage bigger than I should probably be carrying over the next ten years. Not a chance.
So maybe you were wrong about Vancouver, for now. But thanks to you forcing my hand in Kelowna I have done quite well by staying out of the market. After renting a very nice home for 5 years I have just purchased an amazing home for $150,000 less than the original purchase price when built only eight years ago. My mortgage payment is less than the rent of the previous home and I have pretty much banked the difference had I jumped in to the overheated market 5 years ago.
Timing is everything. Vancouver will have its turn.

I am not wrong in my message that housing will correct and those who put too much of their net worth into this single asset are courting significant risk. — Garth

#183 Nemesis on 07.15.14 at 10:44 am

#IsNothingSacred? #ThePoliticalEconomyOfSausages #Hamburg’s’AtlanticCircle’ #Or… #IsThatARügenwalderInYourTrousers… #OrAreYouJustHappyToSeeMe?

“The total penalty seems high at first glance but makes sense against the backdrop of the large number of companies involved, the duration of the cartel and the billions in sales earned in the market.” – Andreas Mundt, President, Deutsche Federal Cartel Authority.

[FT] – German sausage makers hit by €338m fine

…”According to the Federal Cartel Authority, some of Germany’s most successful sausage producers have been colluding for decades to fix prices of sausages and related products.

The cartel has been dubbed the “Atlantic Circle” – named after the Hotel Atlantic in Hamburg where the sausage producers first met. According to the cartel authority, 21 producers and 33 individuals, all of whom will share the fine, made concrete agreements to jointly raise prices to the detriment of consumers.

The sausage fines are the latest penalty to be announced this year by the Federal Cartel Authority against retail producers in Germany. Eleven breweries – including the Danish brewer Carlsberg – were hit with total charges of €338m for price fixing this year.”…

http://www.ft.com/intl/cms/s/0/5746dcd8-0c01-11e4-9080-00144feabdc0.html?siteedition=intl

[NoteToSaltierDogz: Rumour has it that UncleKarl was inspired to begin work on DasKapital when the then prevailing economic theory proved entirely inadequate to the task of explaining anomalous movements in the price of beer and sausages.]

#184 Rick on 07.15.14 at 10:46 am

18 Smoking Man on 07.14.14 at 10:57 pm

Polishing off a book is exhausting, painful.. Agonizing.Way harder than I thought, never doing this again…

———–;————

Yeah, I remember when I read my first book.

#185 };-) aka Devil's Advocate on 07.15.14 at 11:05 am

Foreign buyers are hardly new. But they do not set market prices in an entire urban area. — Garth

But of course they do. Just like Baby Boomers are able to outbid Milennials when it comes to Kelowna South where both Boomers and Milennials want to be. It’s the Golden Rule Mr. Turner. He who has the gold makes the rules and… sets the price of admission. Simple supply and demand. While HAM may not be wholly responsible it does have a HUGE influence in the ratcheting up process. Maybe do us a favour and spend a little more time in Vancouver instead of telling us what we don’t know from afar.

There is no statistical evidence on the number of sales in metro Vancouver to offshore residents, let alone the impact on average and median pricing. In fact, most commenters here routinely confuse Canadian buyers of Asian heritage with citizens of Mainland China. Actually, I don’t suspect it matters to them. In the search for why people can’t afford detached houses anymore, the wrong cause may well have been selected. (It might even be realtors like you, not the yellow-skinned folks.) — Garth

#186 Ralph Cramdown on 07.15.14 at 11:10 am

Nemesis re: Karl and sausages, I always did think he leaned to the ‘links.’

Speaking of Weinerfests, thanks for the heads up on the mayor decamping, coming out of the matrimonial home and moving to the West End. I had no idea. No crack pipe, no national coverage.

I think the Vancouver Sun article cited in #161 could have been improved with the headline “A Bridge Too Far?”

#187 };-) aka Devil's Advocate on 07.15.14 at 11:34 am

There is no statistical evidence on the number of sales in metro Vancouver to offshore residents, let alone the impact on average and median pricing. In fact, most commenters here routinely confuse Canadian buyers of Asian heritage with citizens of Mainland China. Actually, I don’t suspect it matters to them. In the search for why people can’t afford detached houses anymore, the wrong cause may well have been selected. (It might even be realtors like you, not the yellow-skinned folks.) — Garth

You are absolutely correct Garth “I (too) don’t suspect it matters”. What I do know is that price is set by a buyer willing to pay “the” price and once “that” price has been set it is a precedent for future prices as future sellers expect the same, or more. Take one HAM willing to pay more than market and it sets that precedent. Of course so too is it true on the way down but then more buyers pulling sellers back as those truly motivated sellers seek “the market”.

My point is HAM is real and it is a significant influence. REALTORS® don’t set prices – buyers do. Nothing absolutely NOTHING happens without a ready, willing and able buyer. And in the case of multiple buyers, he who can afford to pay most sets the price.

Oh and on a side note; a REALTOR® representing a seller has a duty to get that seller the very most they can for that sellers property. So hell ya, bring on the bidding war!

#188 anon on 07.15.14 at 11:48 am

As the old saying goes, if you cant beat them, join them.

By now. Better late than never.

I think we need a blog post on spelling. — Garth

#189 Gregor Samsa on 07.15.14 at 11:52 am

Canada’s current housing market is all about perception. As today’s headline states, more Canadians are starting to buy into the idea that housing will only go up from here.

I had a girl, buying in the extreme suburbs of Calgary tell me: “I really want to buy something now, because in a couple years I won’t be able to afford anything.” This is the common perception on the street.

I dare say that as long as interest rates stay low and the positive perception of housing remains, Canada’s housing market will continue to rise. I’m not looking for any correction until at least 2015.

Then why buy now? — Garth

#190 KommyKim on 07.15.14 at 11:52 am

RE: #163 Flawed on 07.15.14 at 3:19 am

The article YOU posted above agrees with ME and not yourself. A quote from the link above:
“And whereas the incomes of private-sector employees have advanced just 10% against inflation in the past 20 years, federal employees have come ahead 22% in real terms.”
Maybe the reason YOU haven’t received a raise in 20 years is all the “Flawed” work you do.

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

First of all…..nice cherry pick. Second of all we all know Govt numbers are BBBBBBSSSSSSSS. Especially when you take into account the fees, levies and nickel and diming they have been doing.

Ummmm. The “BBBBBBSSSSSSSS” was from the article YOU posted remember? Why did you post a link to a site full of BS to bolster your argument?
As for your 2nd link:
http://armstrongeconomics.com/2014/07/04/sovereign-debt-crisis-alive-well-in-canada-ontario-is-one-of-the-largest-debts-in-the-world-among-sub-sovereign-governments/
What does the “Sovereign Debt Crisis” have to do with private sector workers falling behind due to fees and levies and no wage gains?

#191 mingeford on 07.15.14 at 11:57 am

@ 168 down and Out

Nothing wrong in what people are doing. The money only has to be sat in an RRSP for minimum of 90 days in order to be used for the HBP.

#192 Dogman01 on 07.15.14 at 11:57 am

Canadian banks supporting “work-around” to bring Chinese money into Canada….we are the Money Laundering Tax Haven?

http://www.vancouversun.com/Judge+slams+CIBC+firing+Vancouver+employee/9550845/story.html

“The final incident that led to Ogden’s termination involved a pair of wire transfers structured to work around Chinese regulations that prohibited individuals from transferring more than $50,000 US out of the country annually. The issue was not the fact that Ogden used the work around — a practice CIBC supported, Wong wrote — but the unconventional way she did it.”

How is this ‘money laundering’? — Garth

#193 Ogopogo on 07.15.14 at 12:00 pm

#88 };-) aka Devil’s Advocate on 07.14.14 at 9:28 pm
We are pretty friggin’ AWESOME and obviously most agree because they are prepared to pay big bucks for a chunk of that AWESOMENESS.

Yes it certainly is different here };-)

Wow, reading this fetid pile of self-serving realturd propaganda is not only embarrassing for those of us who call BC home, but it almost makes me want to leave my heavily landlord-subsidized luxury condo in Kelowna.

Sadly, DA does represent the attitude of some knuckle-draggers in our neck of the woods. These are typically folks with little education who haven’t traveled much, hence the misconception that we’re “awesome”.

#194 Same story in 2007 on 07.15.14 at 12:02 pm

Multiple offers are now rampant in Edmonton. We have surely crossed the 2007 peaks…

The only thing that can ruin the party now is the pipeline… We need that pipeline in all directions, and we are good to go for a long time.

#195 Holy Crap Wheres The Tylenol on 07.15.14 at 12:18 pm

No stats exist on purchases by people who used cash coming from offshore – which means perception runs amok. But we do have a demographic profile, thanks to Stats Canada.
______________________________________________

Mind you wasn’t the last government run stat check 3 years ago in 2011. Much could have changed since then!

#196 debtified on 07.15.14 at 12:23 pm

HAM in Vancouver does exist. It has a powerful influence on the price but it accounts for a small percentage of the total number of sales. Canadians buy the majority of the houses in Vancouver.

The HAM may have spiked the fire that is the price escalation with a lighter fluid; it is still the Canadians, like this former blog-dog from Kits, that are fanning it and letting it spread like a wildfire.

It is the people like this Kits dog who are responsible for the very same problem that they are lamenting about.

#197 };-) aka Devil's Advocate on 07.15.14 at 12:25 pm

#192 Ogopogo on 07.15.14 at 12:00 pm

If you are so unhappy living in Kelowna why don’t you just leave?

#198 bill on 07.15.14 at 12:28 pm

#141 Vanecdotal on 07.15.14 at 12:09 am
I have resided in kits for the last 14 years and the previous 46 in marpole.
I think what you are seeing is really a reflection of boomer echos.
some years there are just more kids running around.
the last two years in our neighbourhood have seen an increase in the amount of young people .
I suspect that this current batch of young folks are an echo of the later boomer years.
I think this has more to do with ‘demographics’ than it does with ham or whatever .

#199 Ogopogo on 07.15.14 at 12:35 pm

#196 };-) aka Devil’s Advocate on 07.15.14 at 12:25 pm
#192 Ogopogo on 07.15.14 at 12:00 pm

If you are so unhappy living in Kelowna why don’t you just leave?

Did you not read the part about my “heavily landlord-subsidized luxury condo”? In Kelowna South, no less, easy walking distance to Strathcona beach and all the other beachlets off Abbott. Perfect location too near the bridge for x-country skiing at Telemark or hitting the 33 up to Big White.

Putting up with the likes of you is more than balanced out by the perks I get by living here.

#200 Ralph Cramdown on 07.15.14 at 12:42 pm

More anecdotes, spell checked:

http://www.macrealty.com/blog/detail/why-macdonald-realty-is-exploring-opening-an-office-in-shanghai-china

http://www.macrealty.com/blog/detail/dispatches-from-china

http://www.macrealty.com/blog/detail/dispatches-from-china-part-2-by-dan-scarrow1

http://www.theglobeandmail.com/report-on-business/international-business/asian-pacific-business/bc-real-estate-firm-looks-for-luxury-buyers-in-china/article16402404/

#201 Joe2.0 on 07.15.14 at 12:43 pm

The problem lies not within the logic or fundementals of this blog.

I generally have always agreed with Garth and his fact based blog.

But I’ve been the guy saying you are leaving out a huge driver of the market, shadow money.
It’s a fact and it’s significant and it’s not just China.

Start a blog on the suspect immigration policies, it’s a multi billion dollar bag of snakes.

#202 Long Time Lurker on Here on 07.15.14 at 12:51 pm

“But renewing a million-dollar mortgage in five years might be a life-altering experience. Is he counting on more Chinese coming along, making his place worth $3 million?”

That is a very powerful question. Isn’t that what everyone is expecting? ie, when you sell, there is always someone who will come along offering more money than you paid for?

This reminds me of the day when TSLA hit $250. Everyone who missed the boat was hitting themselves. Then you see people getting suckered in at the peak, only to see the stock falling back to $200 in the next few weeks.

#203 Silent the people on 07.15.14 at 12:58 pm

Garth,
You are probably seeing the doom and gloom you speak of real estate falls only on some ears! You can’t control the masses that keep proving you wrong! Thanks for your effort though….

#204 Aggregator on 07.15.14 at 1:01 pm

Ogden v. Canadian Imperial Bank of Commerce

[163]     Ms. Xu was a client of Ms. Ogden’s.  She emigrated from China in 2009 and lived in Richmond.  Ms. Xu had found a $5.7 million home in Vancouver that she wanted to buy.  She was approved for a $3.45 million personal line of credit through Ms. Ogden to finance, in part, the purchase of this home.  Ms. Xu testified that she needed to bring just over $500,000 into Canada from China for the deposit.

[164]     As a result of Chinese regulations at the time, each individual was restricted to transferring no more than $50,000 USD abroad annually out of China.  Working around these regulations was a challenge and a complicated process, but it was a practice CIBC supported.  There is no issue about this.  If, for example, a CIBC client wanted to send $150,000 from China to Canada, the money had to come from three accounts belonging to three different account holders in China and be transferred to three separate accounts belonging to three separate account holders in Canada.  As long as all the appropriate accounts were set up, the money could be moved.

Now stick a fork in it.

That is not money laundering. — Garth

#205 Son of Ponzi on 07.15.14 at 1:02 pm

Finally:

The Vancouver Affordable Housing Agency (VAHA) will also collect available data on issues such as vacant homes, and provide information on ways to limit investor speculation and unnecessary vacancies in Vancouver’s housing market.

#206 Paul on 07.15.14 at 1:08 pm

205 Son of Ponzi on 07.15.14 at 1:02 pm

Finally:

The Vancouver Affordable Housing Agency (VAHA) will also collect available data on issues such as vacant homes, and provide information on ways to limit investor speculation and unnecessary vacancies in Vancouver’s housing market
———————————————————-
That will work NOT

#207 Lurcher on 07.15.14 at 1:09 pm

Ponzi @142: the folks we rented from have not sold out. They have in fact bought more Kits properties in the intervening years. They own apt bldgs, condos, and townhouses. They are white. Get over it.

#208 Mark on 07.15.14 at 1:11 pm

“Yes, scientists and engineers are needed when we have a manufacturing base, but without any manufacturing the demand for engineers goes away by about 70% also. ”

2 out of 3 degreed engineers in Canada are not employed in engineering (and many are not employed at all, called ‘overqualified’ for most other positions despite being perfectly qualified and capable of working).

So this has already happened. After all, only a minimal number of engineers involved with housing construction and banking, the two main “industries” in Canada at the moment.

The loss of Nortel has been devastating to the Electrical/Computer Engineering sector in Canada, to the extent that new grads over the past decade are mostly unemployed.

#209 Alex n Calgary on 07.15.14 at 1:20 pm

I’m sure there are lots of chinese buying houses in Vancouver, lots, BUT people from Vancouver who are getting all excited have clearly never been to Toronto. TO is way more immigrant dense then Vancouver, all over the place, you guys would probably realize its not just you guys dense with immigration in Canadian cities.

In Calgary, more or less, a large percentage of immigrants all live in the same NE quadrant of the city, real estate is quite a bit cheaper there then the rest of Calgary.

The problem is that the decline and bubble decrease is not finite, its taking a long time, its making all of us edgy that we’re going to get priced out forever just like all those filthy house-floggers have been telling us.

Also I’m so sick of being booted from Rental to Rental in Calgary as they sell/reno/teardown/re-occupy I might have to buy at the top of the bubble just to end the cycle….but if I can hold onto this house rental a few more years, we might see some action!

#210 };-) aka Devil's Advocate on 07.15.14 at 1:20 pm

#198Ogopogo on 07.15.14 at 12:35 pm

Did you not read the part about my “heavily landlord-subsidized luxury condo”? In Kelowna South, no less, easy walking distance to Strathcona beach and all the other beachlets off Abbott. Perfect location too near the bridge for x-country skiing at Telemark or hitting the 33 up to Big White.

Hmmm. Interesting bundle of contradictions there Ogopogo. I wonder if you might just be nothing more than some resentful housebound agoraphobic not living in Kelowna at all but desperately wishing they could?

#211 I expose liars on 07.15.14 at 1:24 pm

HAM SCAM in the news AGAIN…… I guess Garth will delete the Vancouver Sun article and the Bank of China admission that the money laundering in fact has been a much larger issue than any one thought.

http://www.vancouversun.com/business/economy/Secret+path+revealed+China+billions+buying+foreign+real/10029551/story.html

Who’s the ‘lost dog’ now Gartho? Theres no HAM…no HAM….no HAM……no HAM…….oh my gosh…..theres billions of HAM HAM HAM…….and you missed it…..really?

Come back when you know what money laundering is. — Garth

#212 Son of Ponzi on 07.15.14 at 1:32 pm

#207 Lurcher on 07.15.14 at 1:09 pm
Ponzi @142: the folks we rented from have not sold out. They have in fact bought more Kits properties in the intervening years. They own apt bldgs, condos, and townhouses. They are white. Get over it.
————–
Wow, the Aquillinis are your landlord!
Ever ask them for tickets for Canucks games?

#213 liquidincalgary on 07.15.14 at 1:33 pm

Garth,

the largest population, of Americans, outside of America is right here in Calgary.

aprox 100 000

when can we start talking about Hot American Money in Calgary??

#214 @Aggregator on 07.15.14 at 1:35 pm

Aggregator:

Now stick a fork in it.

That is not money laundering. — Garth

—> The going rate to set up accounts in both countries and move $50,000 is 3-5%. Investors love Foreign students! ;)

#215 Ralph Cramdown on 07.15.14 at 1:42 pm

That is not money laundering.

It’s knowingly engaging in a criminal conspiracy. Send three Canadian smurfs into a CIBC with $9,000 each to deposit into three different aunties’ accounts and then have the aunties transfer it all into a fourth account, and see what happens.

And we’re not talking a conspiracy to smuggle Ai Weiwei out of China in a giant reproduction Ming vase addressed to Ed’s Warehouse. It was a conspiracy to get boodlers’ and carpetbaggers’ cash out of China and into Canadian real estate.

I looked at FINTRAC. It’s a joke. Lawyers don’t have to report. Others, for the most part, only have to record ID details, but not submit them unless they themselves deem them suspicious. In an age of ubiquitous government spying and big data, FINTRAC has to be the only agency in the Northern Hemisphere whose raw data is paper in filing cabinets scattered throughout a thousand real estate brokerages which see no evil and hear no evil.

Money laundering is the concealment of the origins of illegally obtained money. It does not include transferring assets between bank accounts. This is tedious. — Garth

#216 Western Observer on 07.15.14 at 1:42 pm

Fact: Ham does exist. This not a racist thing it is just a fact of life.

I grew up in Richmond – saw it happen

Where I live now it is starting to happen

Ham has made a lot of Retirees who sold & downsized or moved to where real estate is less expensive (Fraser Valley or the Interior) very wealthy.

Kelowna- not what it is cracked up to be. Think Surrey of the Okanagan. Vernon – Whalley (shady part of Surrey) of the Okanagan.

Garth – SFH’s are not going down in value (charts can be manipulated). Interest rates are not going up.

You have been saying interest rates are going up for 2 years and they continue to go down.

You are thinking old rules apply, situations from the past. The world is shrinking and new situations are happening.

What’s your definition of HAM? — Garth

#217 SHELTER THE MONEY NOT THE PEOPLE on 07.15.14 at 1:42 pm

Garth Please admit you are in denial.

There is an absence of statistical data on Foreign Hot Money not because the Gov doesn’t know about it. It is because they don’t want US to KNOW!

It’s a political hot potato.

I have been hurt directly and I am permanently angry about it.

Vancouver is in a class of cities targeted by Foreign Hot Money as well as London and Sydney. These would be the top three in the world destinations for Parking and Sheltering money.

Work backwards for a minute.

Where would you put your money if you were a resident of Iran or Lebanon or China and you had millions to get to safety?

Tell us how this has hurt you. — Garth

#218 Roial1 on 07.15.14 at 1:45 pm

About retiring to Europe.
A very EXPENCIVE idea.
I have just returned from there after 10 weeks and can say the above with authority.

Switzerland: Friend has a house on Lake Neuchatel. In two years she retires. She MUST sell her house. Why?
In Switzerland you carry a HUGE mortgage or pay a tax “added to your income” equal to what you would have made “IF” you rented the house out.
So.
My friend will have to sell before retiring as she can not carry that big mortgage, or the tax that she would have to pay, on her pension. (3000 SF/month)(3600cdn $)

(you think our bankers have it good. HA!)

England is a very expensive place as well and Germany is also. Austria is not so bad and has the best food and beer. Taxes in all are High. Plus VAT.

#219 Aggregator on 07.15.14 at 1:46 pm

That is not money laundering. — Garth

[181]     One of Mr. Clark’s first steps was to inquire about the practice of working around the Chinese wire transfer limits.  In an email exchange on March 2, 2011, with Steven Harvey, the National Director of the Anti-Money Laundering Group, Mr. Clark described a practice he had seen before and was seeing again with the wire transfer matter:

[182]     This process is often conducted using different remitters in the same Chinese city sending funds to one or more accounts in CIBC, then through a common Financial Advisor get the funds collected back in one account to be paid out to a law firm.

[183]     As Mr. Clark explained in cross-examination, one of his concerns – in the face of Chinese law that precluded export of $50,000 per person – was whether this practice was justified.  Namely, the practice of setting up the transaction in such a way that it enabled the client to say, “I am not bringing in $500,000 from China; me and these nine other third parties are each bringing in $50,000”.  As Mr. Harvey confirmed in his response, CIBC “generally [has] no obligation under any foreign law”.  Mr. Clark explained that, as a result of Mr. Harvey’s email, he understood there were no issues with the advisors structuring the transactions in this way and working around the Chinese regulations. 

It's not money laundering because i) Canadian banks have no obligation to foreign law and ii)  Know Your Customer (KYC) under Anti-Money Laundering (AML) guidelines is exactly that — just a guideline. So banks are free to wire all the dirty hoards of cash they want because THERE ARE NO RULES imposed by the negligent and barkless OSFI who continues to look the other way.

You want RE regulations? Then it has to start from the source. Otherwise every other regulation is meaningless as dirty money is free move.

As I said, it is not money laundering. You have absolutely no proof of ‘dirty’ money. You’re as inane as everyone else who thinks ethnic foreigners who have wealth must have stolen it. What a Caucasian arrogance.– Garth

#220 Habs76-79 on 07.15.14 at 1:48 pm

#167 Liquidincalgary

Habs76-79

and just what colour is the sky, in your world?
———————-

BLUE! What colour is yours?

#221 Tripp on 07.15.14 at 1:53 pm

#182 Nemesis on 07.15.14 at 10:44 am

Do we have a Canadian equivalent of the German Federal Cartel Authority?

If yes, they should be genuinely interested to look into the following industries: insurance, cable/internet providers, mobile communications, healthcare supply, construction materials, and insurance again.

Of course we have the Competition Bureau. And enough government already. — Garth

#222 Son of Ponzi on 07.15.14 at 1:56 pm

#207 Lurcher on 07.15.14 at 1:09 pm
Ponzi @142: the folks we rented from have not sold out. They have in fact bought more Kits properties in the intervening years. They own apt bldgs, condos, and townhouses. They are white. Get over it.
————
It’s quite common: Renters who think the Property Manager is the landlord.

#223 SHELTER THE MONEY NOT THE PEOPLE on 07.15.14 at 1:57 pm

Foreign buyers are hardly new. But they do not set market prices in an entire urban area. — Garth

If a market is balanced and operating normally it only needs a small percentage of excess purchasers to make it go up.

With HOT MONEY it just keeps on coming.

Even in China they cannot seem to get a grip on investors buying up apartments in entire cities that have no residents.

How can anyone deny that this type of investment mentality has no effect on the market?

#224 Chickenlittle on 07.15.14 at 2:15 pm

The Asians like to buy expensive stuff.

Back 20 years ago in my BC high school, one of the dads was telling me that he owns a large boat and does whale watching cruises. He said he could charge $50 per person, but then he would lose the Asian market because it was too cheap. Soooo…he charged them $300 per person and BINGO…full boat every time.

I don’t think the Vancouver market is fueled by Asians, but the high prices probably do encourage them to buy.

Just saying…

Unlike the people who hang out here, then drive their Kias to Costco? — Garth

#225 Italians love real estate on 07.15.14 at 2:19 pm

My own cousin who is a real estate agent( FYI lots and lots of Italians are real estate agents) says that real estate agents are all quote ” vultures” LOL

#226 SHELTER THE MONEY NOT THE PEOPLE on 07.15.14 at 2:20 pm

Tell us how this has hurt you. — Garth

You asked:
My situation is unique,
Mental illness devastated my family in the mid nineties.
My ex wife left me with the 5 kids after destroying all our family wealth.
I started to rebuild as a single dad in 99.
Remarried and had 2 more kids while rebuilding the family import wholesale business.
Was renting while trying to get back into a house.
I almost got in while we were renting a house for $2000 a month in 2003. Landlord was offering it to me for $425K.
I was a little scared because the same house was only $290 a couple of years earlier.
I decided to put the money back into the business.
Big mistake. I would have been many times wealthier if I simply bought and lived in that house making mortgage payments of $2000 a month.
It is worth 1.2 million now.
Meanwhile I rented another house in Burnaby for $2300 for a few years. It was purchased by Middle eastern money for $425K just before I moved in and it went up in Value $15k per MONTH while I was living in it for 2.5 years.
It was worth $850K when I moved out and it is now worth 1.4.
When I saw what was happening to my future I was pissed and still am.
Meanwhile I provide jobs to young people in a nation that is hostile to small business and ever so friendly to foreigners who can also borrow at 3% while my business can use Credit cards at 20%.
In addition to this slap in the face Foreigners can avail of the “NEW CANADIAN” Special mortgage rules that waives income proof if they put 35% down. While I as an “OLD CANADIAN” cannot.

While I sympathize, I fail to see how your situation is the result of foreigners. By the way, a non-citizen buying a house with a large downpayment needs to also qualify thusly: (a) They must have immigrated to Canada within the past 24 months (b) They must have landed immigrant status (c) They must have a minimum of three months’ full time employment in Canada (d) All debts held outside of Canada must be included in determining how much they can afford, or total debt servicing ratio (e) Plus a letter of reference from a recognized financial institution. — Garth

#227 Smoking Man on 07.15.14 at 2:21 pm

OK you muts, what I’ve been preaching here for the last 5 years finally goes main stream media..

http://business.financialpost.com/2014/07/15/the-way-millionaires-view-money-is-different-from-everyone-else/

#228 Westcdn on 07.15.14 at 2:25 pm

I thought this article sums up the great danger of Canada’s economic environment. My main concern these days, other than paying and complaining about my bills, is whether Canadians can earn enough to service debts – private and public. The item that caught my eye was the mentioning of plunging hours worked.
IF true and the trend continues, Canada is in for a lot of trouble. The Ontario Liberals will be launching a questionable public economic plan into the teeth of a potential storm (Yes, Ontario is mightier than Alberta). Their policies will feel good in the beginning. I am determined not to get caught like I was in 2008 so I am keeping a close watch on Canadian employment and earnings as a harbinger. Eventually our debt chickens are going to come home to roost and the question is: when? It is sunny today and tomorrow will be what it is – time to enjoy the moment.
http://wolfstreet.com/2014/07/15/is-canada-next-in-one-very-ugly-chart/

#229 SHELTER THE MONEY NOT THE PEOPLE on 07.15.14 at 2:41 pm

In addition to my last post I want to say that I have lots to be happy about.
I have 7 great kids and a beautiful wife.
I live pretty well in the Canadian Middle Class.

What I am upset about is that I was not able to participate in the great wealth grab of the last 100 years. It was unfairly distributed to Foreigners and others who were simply in the right place at the right time in History.

The entry fee was only a down payment on a house.

I would have been happy to have bought a house and paid off the mortgage and had a nice half million nest egg in it to do what I want.

Now It looks like I will be renting and working until I am 80 but on the upside its only cerebral work. So It will likely keep me alive longer.

#230 Down and out on 07.15.14 at 2:45 pm

#190 most of the big banks have a policy of not leaning mortgage money if down payment from a loan (example RRSP) that is why people go to another money leader for the mortgage .Legal (grey area)but why if you cannot rise or save for down payment would you put yourself even deeper in debt ,that is not living within your means but after to-days news on housing being up we on this blog must be like the boy who cried wolf ,I am truly at a loss to explain it.

#231 Bargains everywhere on 07.15.14 at 2:45 pm

As I said, it is not money laundering. You have absolutely no proof of ‘dirty’ money. You’re as inane as everyone else who thinks ethnic foreigners who have wealth must have stolen it. What a Caucasian arrogance.– Garth

_____

Maybe not stealing exactly. But many got it by exploitation of workers. This Chinese company that supplies Samsung was just caught using child labour. Latest from the WSJ.

http://online.wsj.com/articles/samsung-finds-evidence-of-child-labor-at-chinese-supplier-1405311837

And it’s not only China. Many third world countries regularly exploit their workers, using underage children or forcing employees to work for low pay in unsafe working conditions. We all remember the recent news from Bangladesh where over 1,000 people died in a factory after the walls collapsed. Employees were forced to continuing working there even after large cracks started appearing in the foundation. If they complained, they were fired.

http://www.bbc.com/news/world-asia-22476774

These business owners make huge money on the backs of workers they are exploiting in their home countries while selling their manufactured products to the west. Those of us in 1st world countries with better safety regulations and treatment of employees can never compete. So yeah, I’d call it ill-gotten gains in many respects.

Until safety regulations and employee treatment are more equally enforced in all countries around the world you’ll have a segment of business owners getting very wealthy through exploitation of the poor in 3rd world countries who have few rights.

#232 Nemesis on 07.15.14 at 2:46 pm

#@Ralph/199

Just between the two of us, when it comes to Macdonald Realty and offshore flows…

Well, let’s just say that they put out the ‘WelcomeMat’ quite some time ago:

http://tinyurl.com/lokczml

#233 Kevin Unfortunately in Winnipeg on 07.15.14 at 2:46 pm

I somewhat agree with Kitsilano but he should have even more regrets not buying Apple shares at $10 or gold at $300 also. He missed a huge opportunity in hindsight. Brilliant thinking.

In Winnipeg, the thought of paying $180,000 for a new house 10 years ago was ridiculous. Now, $350,000 is a great price and the consensus is that prices won’t go down so why not buy.

There were missed opportunities in real estate but no debt and a thriving investment account are also symbols of unseen success.

#234 condopoor on 07.15.14 at 2:48 pm

Garth,

On days like this I don’t know where you find the patience.

Keep fighting the good fight…

#235 Mister Obvious on 07.15.14 at 2:56 pm

#201 Rexx Rock

“… Live in it for 18 months and flip it with no capital gains. While your living in the house look for a good deal on a lot. He said just do this for the next 10 years and you’ll own it with no mortgage…
——————-

The CRA will come knocking some day, better have a good story.

#236 Ronaldo on 07.15.14 at 3:02 pm

Vancouver believes it’s the “HAM” that has caused the sky rocketing real estate prices. Up here in the sunny Okanagan, we believe it’s “HOSEM” (Hot Oil Sands Easy Money), that has done it. The Albertans flock here every summer and fall in love with the place and before you know it, they buy up our nice little $200,000 vacation cottages. And why not, it’s only a small fraction of what they earn anyway. One across the street and one right behind me were bought by vacationing Albertans. The one across the street, went up for sale a year after it was bought and still not sold 4 years later and the grass is almost over the fence. Neighbor had to finally get someone to cut it. The one behind me was bought a year ago by a young couple with small child. Saw them once. Been sitting vacant since. Real estate really is an emotional asset. Especially vacation property. Just wish that they would get someone to look after their places is all.

#237 east coaster on 07.15.14 at 3:11 pm

All this talk about HAM is making me hungry!

#238 Joe2.0 on 07.15.14 at 3:31 pm

Garth you are being naive or stubborn about the money laundering aspect.

A large majority of the Persains that bailed when the shah left shared in the stolen loot.

Don’t believe me ask some of them.
The majority relocated in Vancouver and LA.
Since then there has been a pipeline with in their community to continue importing new canadians.

One good way is to pretend you are poor and at risk and get a church onboard.

Of course not all of the money is obtained illegally but it’s a tool that is fast tracking or bypassing supposed immigration protocols.

The Golden Rule = he who has the gold rules.

Your not seeing the trees for the forest.

I know I have said it before but you should get a blog going that will address and reveal our immigration system.

Like almost everything else that involves money it’s corrupt.

Now we’re dissing Persians? — Garth

#239 devore on 07.15.14 at 3:37 pm

#196 };-) aka Devil’s Advocate

If you are so unhappy living in Kelowna why don’t you just leave?

At least this time you only spent 1 sentence saying nothing, rather than the usual 3 paragraphs.

By your logic, every place even a single person lives in is “awesome”, because if it wasn’t “awesome” that person would move somewhere else that is “awesome”. But since they are not, they must be happy, because where they are is “awesome”.

Back in the real world, people live where they live for any of dozens of reasons. They might even think where they are is “awesome”, because they just haven’t been around the world very much.

#240 Dewflicker on 07.15.14 at 3:38 pm

I don’t really care where the money comes from – I am all for the free movement of capital (leaving aside certain double standards in the case of China). What I deplore is the destruction of neighbourhoods; the tearing down of lovely, well kept and serviceable homes to be replaced by glowing, environmentally unfriendly behemoth boxes. Beautiful and diverse gardens are replaced with brazilianed lawns and characterless cedar hedges. Backyards are paved and/or buried under 4 car garages.

I don’t pretend to be an arbiter of what is tasteful but part of the local discontent on the west side of Vancouver emanates from the dramatic and rapid change many neighbourhoods have seen. I watch the dump trucks rumble by everyday and it saddens me that we (our civic leaders) refuse to take even the most rudimentary steps to preserve some of what makes our neighbourhoods special.

http://www.theglobeandmail.com/life/home-and-garden/real-estate/who-will-speak-for-vancouvers-trees-and-gardens/article18590224/

#241 Mike T. on 07.15.14 at 3:43 pm

#192 Ogopogo on 07.15.14 at 12:00 pm

my favorite are the people who call Kelowna a ‘world class’ city

those are the truly clueless – yes it’s a nice place, there are an un-limited number of nice places as well

also, should we start a pool as to when DA gets himself banned again?

#242 brainsail on 07.15.14 at 3:57 pm

Is there a full moon tonight?

#243 Joe2.0 on 07.15.14 at 4:00 pm

Not dissing just stating a fact.
I have Persain friends who agree.

Having traveled the planet extensively I understand the appeal of Canada.

What pisses me off is that many people who were born and raised here will never be able to afford to buy a home because of our immigration system.

What a stupid comment. A house is not a right, and immigrants have brought immeasurable benefit to our country. — Garth

#244 Happy Renting on 07.15.14 at 4:03 pm

#229 SHELTER THE MONEY NOT THE PEOPLE on 07.15.14 at 2:41 pm

You’re suffering from a bad case of coulda-woulda-shoulda. You did have an opportunity to participate in the real estate lottery: the $425k house in 2003 you turned down. At the time you didn’t know if it would sink back down to $290k (or lower) or skyrocket to $1M+. If it had sunk in value after you’d bought it you’d be regretful. If your business had really taken off after investing the potential down payment into it you wouldn’t lament not having bought a house back then. You are focusing only on the path not taken that could have made you wealthier. “If I’d only known in advance the winning lotto numbers being pulled last Friday I would be rich now.” Life doesn’t work that way. Let go of your bitterness and truly appreciate what you have.

#245 Smoking Man on 07.15.14 at 4:10 pm

 

Yellen defends loose Fed policy, says job market still too weak
For those of you that think rates are tide to inflation

Rather than the job market…

It don’t get any clearer than this….

Your wrlcome

Reuters  – ‏22 minutes ago‏     WASHINGTON (Reuters) – Federal Reserve Chair Janet Yellen said U.S. labor markets are far from healthy and signaled the Fed will keep monetary policy loose until hiring and wage data show the effects of the financial crisis are “completely gone.

#246 BobDog on 07.15.14 at 4:13 pm

DELETED

#247 pocketspock on 07.15.14 at 4:20 pm

I like Kits. The houses are nice, the streets are clean and even the dogs look happy and well fed.

However, I love the cheap rent in Chinatown, taking a bus to Kits to enjoy the view and going back home.

#248 TheManwhoStaresatSheeple on 07.15.14 at 4:35 pm

BRICS announce 100 billion reserve bypassing Fed and developed world central banks:

http://brics6.itamaraty.gov.br/media2/press-releases

“11. BRICS, as well as other EMDCs, continue to face significant financing constraints to address infrastructure gaps and sustainable development needs. With this in mind, we are pleased to announce the signing of the Agreement establishing the New Development Bank (NDB), with the purpose of mobilizing resources for infrastructure and sustainable development projects in BRICS and other emerging and developing economies. ”

“13. We are pleased to announce the signing of the Treaty for the establishment of the BRICS Contingent Reserve Arrangement (CRA) with an initial size of US$ 100 billion. This arrangement will have a positive precautionary effect, help countries forestall short-term liquidity pressures, promote further BRICS cooperation, strengthen the global financial safety net and complement existing international arrangements. We appreciate the work undertaken by our Finance Ministers and Central Bank Governors. The Agreement is a framework for the provision of liquidity through currency swaps in response to actual or potential short-term balance of payments pressures. ”

18. We remain disappointed and seriously concerned with the current non-implementation of the 2010 International Monetary Fund (IMF) reforms, which negatively impacts on the IMF’s legitimacy, credibility and effectiveness…….in case the 2010 reforms are not entered into force by the end of the year.”

http://postimg.org/image/lbe8ykcnx/

#249 };-) aka Devil's Advocate on 07.15.14 at 5:02 pm

#239 devore on 07.15.14 at 3:37 pm

#241 Mike T. on 07.15.14 at 3:43 pm

LOL too funny

};-)

#250 Flawed on 07.15.14 at 5:17 pm

What a stupid comment. A house is not a right, and immigrants have brought immeasurable benefit to our country. — Garth

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

You measurable debt don’t you?

http://news.nationalpost.com/2011/05/17/immigrants-cost-23b-a-year-fraser-institute-report/

#251 Flawed on 07.15.14 at 5:18 pm

Sorry…

You mean measurable debt don’t you?

#252 deaner1234 on 07.15.14 at 5:30 pm

Garth : By the way, a non-citizen buying a house with a large downpayment needs to also qualify thusly: (a) They must have immigrated to Canada within the past 24 months (b) They must have landed immigrant status (c) They must have a minimum of three months’ full time employment in Canada (d) All debts held outside of Canada must be included in determining how much they can afford, or total debt servicing ratio (e) Plus a letter of reference from a recognized financial institution. — Garth

Garth, you’re assuming that any of those documents from China are truthful. This assumes that the immigrant’s accounting of foreign assets or assets held by corporations is held to anything like Canadian accounting standards. My father-in-law is HAM via the Quebec program living in Richmond. He bought an apartment with mortgage and is rarely in Canada. He certainly never had a job here.

Or they would just say that son is working for dad and meet the requirements through a combination of the two.

How hard do you think it would be to get a signed letter from a bank official?

I give up. Take me to your leader. — Garth

#253 randman on 07.15.14 at 5:37 pm

Having traveled the planet extensively I understand the appeal of Canada.

What pisses me off is that many people who were born and raised here will never be able to afford to buy a home because of our immigration system.

What a stupid comment. A house is not a right, and immigrants have brought immeasurable benefit to our country. — Garth

Hey Joe

It is a stupid comment…we do the same thing in vacation areas …ask the locals in Cabo San Lucas or Pattaya or a host of other spots around the world, what they think of us buying up their housing and driving prices up?

People that complain about this aspect of capitalism are usually socialist whiners …wanting their cake and eating it too

For someone who has travelled the world…this should be obvious!

#254 Ralph Cramdown on 07.15.14 at 5:40 pm

You have absolutely no proof of ‘dirty’ money.

Here in Canada, there’s a reverse onus. People who regularly deposit large quantities of cash, or who are discovered with a large quantity of cash in their possession have to come up with a good, verifiable story about how that money isn’t dirty.

Of course we haven’t been talking about physical cash, but wire transfers, so this isn’t about money laundering, but circumvention of capital controls.

You’ve got an overdeveloped sense of trust if you think these people were completely clean elsewhere when earning their money, but did that one little criminal (in China) thing of evading capital controls with the help of smurfs and banks here and there, but they’ll be law abiding taxpayers here in Canada.

Try it yourself. Go to your local CIBC and say you need to move $US1mm from Haiti (or somewhere), and it’s all perfectly legit, but you’ll be using a number of friends’ accounts both here and there, and you’ll be breaking the amount into a number of $7k-$9k SWIFT transfers at least 48 hours apart. You can even tell the manager you’re ‘Honourable.’ I’d be curious as to the reaction.

There is no exception for the proof of wire funds origin. — Garth

#255 Mixed Bag on 07.15.14 at 5:49 pm

#229 SHELTER THE MONEY NOT THE PEOPLE on 07.15.14 at 2:41 pm

FWIW, I remember looking at houses in the late 90’s early 00’s, thinking the ones I wanted (nothing fancy, decent bungalow in a decent area) were expensive at $175K. Whoda thunk prices would go up to where they are now? Fast forward several years, married, a baby… was stunned to learn the markets rose that much higher! As a first-time buyer, growing up frugal, wow, 300K for a similar house. Ultimately, more experienced family members, with similar mentality, knew this was a fair price, and with mortgage lender also commenting that the price was good, that allayed our anxiety, so we made the jump. The house is worth more now (not $1M, that’s for sure), and for various reasons we’re staying put for now.

I’ve missed on opportunities due to fear of making a move, and lost opportunities by sticking my foot in my mouth. What can I do except learn, move forward, and be grateful for what we do have – beautiful children, our health, and the means to support ourselves.

Did immigrants with moolah unfairly push up the price of housing in my city? Who knows. Ultimately I’ve learned that life is not fair, and when I really understood it, is when I learned to be more aware of the world and its workings around me.

#256 SHELTER THE MONEY NOT THE PEOPLE on 07.15.14 at 6:20 pm

#244 Happy Renting on 07.15.14 at 4:03 pm
Thanks for your perspective and grounding.
I do appreciate that.

What I really want to get across is that the whole bubble should not have happened in the first place.
I feel that I should have been able to buy a year later when my business was more able to come up with the down payment.
That would have been the normal way things would have worked and have worked since WW2.
I wasn’t looking for a huge lottery win but more a family home to pay off the mortgage and retire in.

I feel external factors like Low interest rates and Government manipulation as well as foreign ownership pumped up the market so fast I could not make enough money to keep up with the rising market.

Yes I would have been happy if I had won the RE lottery but some other poor sap would have been complaining here instead of me.

A person who contributed as much as I have to this economy should be able to buy a suitable home. That wont happen any more. I will now only invest in stocks and my business and die a renter. I could buy now but again I feel it will be a bad move. Only now I am much more sure it will be a bad move.

Some of my kids are earning well now and they are not buying either. This is not the normal way things should work.
We can’t pull up the roots of our whole family and move to Windsor On where RE is Cheap. So we stay here and continue to get beat up while waiting for the long awaited correction.

We are still winners though. All of my kids are staying in Vancouver. Nothing worse than spending $200,000.00 on raising a kid and they move 2000 miles away.

#257 John Prine on 07.15.14 at 6:35 pm

213 liquidincalgary on 07.15.14 at 1:33 pm
Garth,

the largest population, of Americans, outside of America is right here in Calgary.

aprox 100 000

when can we start talking about Hot American Money in Calgary??

I bet a lot of them rent as they would see housing prices as ridiculous in Calgary.

#258 Sheane Wallace on 07.15.14 at 6:36 pm

The Fraser Institute report (download the PDF here or see it below) says newcomers pay about half as much in income taxes as other Canadians but absorb nearly the same value of government services, costing taxpayers roughly $6,051 per immigrant and amounting to a total annual cost of somewhere between $16.3-billion and $23.6-billion.

I thought these are the people driving prices up… another scam apparently.

What else would you expect from people getting established here? Enough with the immigrant-bashing. — Garth

#259 Ralph Cramdown on 07.15.14 at 6:43 pm

There is no exception for the proof of wire funds origin. — Garth

Proof of origin? The other financial institution on the SWIFT network, and appropriate ID and date of birth for the smurf on the Chinese side. Per Aggregator’s citation in #204, CIBC would report to FINTRAC receiving a wire for SmurfA from Smurf1, for SmurfB from Smurf2 … SmurfJ frim Smurf10. Those monies then go to the lawyer’s account (internal Canada EFT, over $1,000, FINTRAC reported, sources would be the Canadian Smurfs?). The lawyer transfers the money to the purchaser’s lawyer on closing. Lawyers are exempt from FINTRAC, but if an EFT is used, the banks might report the transaction between lawyers’ trust accounts.

All these reports are electronic, and FINTRAC says institutions must report the sender and receiver as they appear in the SWIFT message, with no exception for “and we know they’re smurfs and related transactions because we’re working for the controlling mind, putting one over on the Chinese government, which we believe to be legal in Canada”).

Lawyers are not exempt from FINTRAC. — Garth

#260 Expat on 07.15.14 at 6:56 pm

#218 Roial1 on 07.15.14 at 1:45 pm
“About retiring to Europe. A very EXPENCIVE idea.”

Nonsense. Certainly not true for Spain. Rents in Valencia, where we are right now, run about a 1000CAD/month for a nice 130 sq/mt 3 bedroom flat with 12 ft. ceilings right downtown. Food is excellent and inexpensive compared to Canada. Our cost of living here will be significantly less than in Vancouver. Good wine is 3-5 bucks a bottle, membership in a fully equipped gym costs about 20 bucks a month and the climate, of course, is excellent year round.

Why anyone would remain in Canada after retirement or, indeed, during their working years if they don’t have to is beyond me.

#261 Joe2.0 on 07.15.14 at 11:44 pm

Re 243
What a stupid comment.

People who enter the housing market via shadow banking or by skirting the supposed fair immigration process are inflating the housing market.
More demand=higher prices.

#262 OffShoreObserver on 07.16.14 at 5:22 am

#144 Carpe Diem on 07.15.14 at 12:20 am
Let fools get what they want in Vancouver.

Also, How to make $900,000!!!

I used to live in Vancouver–Shaughnessy, growing up; West End after 16 years old.

Sold my little hotel in 2010–all my wealth was in one asset in one city.

I was turning 57–now 60–and I hated the climate in Vancouver.

Now I live in Vietnam, after Thailand.

I rent a villa for $450/month in Da Nang.

Food is inexpensive, healthy and excellent.

Medical care is great, but “trust no one.”

I am going to look at properties in Hoi An, which is 25 minutes South of Da Nang because my lease is up in August.

Why would I purchase anything in Canada?

http://hoianhouse.com/

#263 Snowboid on 07.16.14 at 11:57 am

#4 Mike on 07.14.14 at 6:26 pm…

We looked at one of those Kelowna ‘mansions’ overlooking the lake last week.

Brand new, high-end throughout – but it’s already falling apart. Large cracks in the ceilings with shoddy repairs, scraped hardwood floors that squeak with uneven areas.

Absolute crap, poor design, lousy construction, but wonderful view!

#264 Snowboid on 07.16.14 at 11:57 am

#198 Ogopogo on 07.15.14 at 12:35 pm…

Of course, don’t forget that the golden god of Kelowna RE once stated Kelowna is a cesspool, and he was moving out, forever.

Apparently he is off his ‘meds’ again, and it’s a cycle of anger we’ve come to expect from the peddler of sand.

We too rent a luxury condo, not as close to the lake, but heavily subsidized by the owner!