The frauds

Scuzzbucketry is apparently universal, at least among realtors.

You remember the fake Chinese sisters selling condos in Vancouver a couple of years ago? Sure ya do. It was classic. Two local marketing babes of Asian heritage posed as siblings over from the mainland to scoop a few new condos for their parentals. Of course, the dufuses with the cameras and the reporter notebooks fell for it, and the chicks soon found themselves on TV in another breathless Global report on how HAM is eating Van.

Then there were the fake Chinese real estate agents in the yellow helicopter buzzing the skies of the Lower Mainland, as another marketer tried to incite panic among the natives. Buy-now-or-buy-never was the message. But it was phoney. The ‘Chinese’ were realtors from Richmond and Burnaby, and the media types (in the back of the copter) were fooled again.

And who can forget the rental lawn Asians hired by a developer in the burbs? They were paid to form a line-up and feign panting anticipation outside the sales office of a new pre-build. It made the supper-hour newscast, of course, even though all the lawn chairs the ‘buyers’ spontaneously brought were brand new, and exactly the same. And did I mention the fake invasion of White Rock?

Well, you get the drift. For a few years now the real estate industry has deliberately set loose a big dose of Yellow Peril, because there’s nothing like competition and fear to make the house-buying juices flow. And while nobody is denying that foreign buyers are a fact of life in Toronto, Vancouver, Richmond Hill, Burnaby, Markham, Surrey or Unionville – and in some pockets have formed strong communities and a pervasive presence – there’s no statistical evidence the fear is justified.

By the way, check out the vid above. Seems Chinese realtors have no trouble being as racist, insensitive, exploitative and douchbaggery as our guys. Property developers here hire Asians to ‘prove’ their real estate is internationally tasty and drive the locals into a buying frenzy. Chinese dudes, it turns out, do exactly the same. We have a bubble, overbuilding and massive real estate risk. Ditto in China.

So I see there’s a petition circulating in Vancouver to slap controls on foreigners buying area properties. “It’s time to stand up and protect our community—Vancouver is not for sale,” it says dramatically. “The housing needs of Greater Vancouver residents are more important than the profit margins of foreign speculators. We demand that Premier Christy Clark, Mayor Gregor Robertson and all other mayors and city councillors of the Greater Vancouver Regional District introduce laws to curb foreign investment in residential real estate by the end of 2015.”

Now why would 17,000 people sign this? Because the realtors have done their job in spades. Legions of people, from the #DontHave1Million Twittering moist Millennials to Boomers priced out of a trophy home on the Westside, believe stupid real estate values are the fault of relatively small number of buyers who principally live elsewhere. Of course – as we saw with the unwavering acceptance of the fake Asians – the media wants to believe it, too.

But taxing foreign buyers more or requiring residency status would do diddly for prices. No ‘housing needs of Greater Vancouver residents’ would be met by such an action. The reason average people can’t afford average houses is because real estate is a speculative mania in both YVR and the GTA, fed by a heady mix of dirt-cheap money, CMHC largesse, realtor bravado, expanding subprime mortgages, the Bank of Mom and HGTV-inspired property lust. This pathetic blog will also remind the morons posting intolerant messages on the petition that there exists zero statistical evidence foreign money has any meaningful influence on the overall market.

In fact, one of the few real estate boards collecting data on buyer origination (as I have referenced before) is just across the ditch, in Victoria. No, it’s not Vancouver in size, price or demographics. But it does give us an accurate snapshot of where area buyers are coming from. And it ain’t Guangdong.

VIC-BUYERS-CHART

The hate-foreign-buyers petition is beneath us. So are lawn Asians, fake Chinese realtors and phoney HAM sisters. It’s as ugly here as rented foreigners over there.

If you want someone to blame, check the mirror.

292 comments ↓

#1 Yogi Bear on 05.12.15 at 7:28 pm

If you want someone to blame, check the mirror.

Yeah, you just did that. Prepare to be bombarded with hate mail.

#2 West Coast on 05.12.15 at 7:30 pm

No kidding….this is more like it:
http://www.theglobeandmail.com/globe-investor/personal-finance/household-finances/house-poor-couple-debt/article24370722/

Read this and weep….apparently the couple featured in the above article work in the ‘financial services industry’….and are typical of highly indebted Canadians. Sadly, they are following their dream……. soon to be their nightmare…..
However, they don’t seem to be embarrassed by their situation – which is ‘cringe-worthy’ enough. Perhaps they’ve been told that bankruptcy is an option that they shouldn’t worry about. Or perhaps their relatives will bail them out. Maybe their retired parents can return to work – no doubt they will soon be babysitting (gratis) full time. Who knows!
Could the ‘jar lady’ help them? – I don’t think they are ready for Garth!

Or how about this – HELOCs here we come!

http://www.theglobeandmail.com/report-on-business/economy/housing/growing-popularity-of-home-equity-lines-of-credit-spur-debt-warnings/article24381598/

“Canada’s banks have quietly made a seismic shift in their lending over the past 15 years, turning to home equity lines of credit as their largest non-mortgage consumer lending product.”

Look in the mirror for sure….

#3 ILoveCharts on 05.12.15 at 7:31 pm

We’re not talking about people, we are talking about money. A chunk of the money is originating here (in the form of mortgages,) and a chunk of the money is originating offshore (even in cases where it looks like a “local” person has made the purchase.)

That is not debatable – why are we even having this debate?

#4 Made in BC on 05.12.15 at 7:36 pm

One govt employee run/full of retired wrinklies city like Victoria is your “HAM is not here” proof?

And JFK was killed by a lone gunman hitting a moving target 3 times from 200 yards with a crappy bolt action rifle as well.

#5 [email protected] on 05.12.15 at 7:37 pm

Prepare for witty comebacks from Garth today! Judging by today’s post topic he is feeling feisty and ready todo anonymous internet comment section battle!

#6 TurnerNation on 05.12.15 at 7:39 pm

My Dollarama sell program is begun.

Hey I put my honey where my mouth is.

#Realtress

#7 HD on 05.12.15 at 7:39 pm

From the video above:

M: If we were to use Indians, would they be cheaper?

F: They would be about the same price as blacks…but we rarely use them…

M: Awwwww

—————–

LMAO. Can’t make that stuff up, can ya?

Best,

HD

#8 Michael on 05.12.15 at 7:39 pm

I’m in Vancouver and used to think HAM wasn’t to blame, either. Now there is data that strongly demonstrates otherwise.

http://wp.me/p3DjoG-8r

What data? Nothing conclusive in that link. — Garth

#9 canadianjoe on 05.12.15 at 7:42 pm

Scuzzbucketry is universal, among every business group. You just happen to hate realtors for some reason. I don’t approve of their tactics, but they are far from the worst scumbags out there.

#10 JG on 05.12.15 at 7:43 pm

“If you want someone to blame, check the mirror.”

That’s what Prentice said, and it cost his party big time.

While I agree, it seems it’s almost unacceptable to most, to say it or print it. You are spoiling their dream. :)

I’m running for nothing. — Garth

#11 Made in BC on 05.12.15 at 7:44 pm

#160 Ralph Cramdown on 05.12.15 at 8:50 am
#151 Made in BC — “The other thing that never gets mentioned about 1982 is people kept 100% more money in their pockets than they did today because taxes are double what they were back then.”

The top marginal Federal Tax rate is 29% this year. in 1985 it was 34%. Federal taxes for the top bracket were 17% higher then. Ontario tax was 48% of basic Federal tax, for a combined marginal (asymtotic) rate of 50.32%.
+++++++++++++++++++++++++++++++++++++

Ralph you forgot about 57 taxes that we now pay (about 5 or 6 on gasoline alone) that were not here in 1982. There is nothing you can buy that does not have MANY forms of tax on it. Even food has tax as it was driven with a truck that paid 5 kinds of gas tax on it to deliver. Check out the many RE taxes and property taxes you pay now. Parks, meters etc etc……all forms of tax. Taxes that are many many times higher than inflation and especially wages.

Please come back with a rebuttal with all the taxes outside of income tax in 1982. I think the list will be short.

#12 ShawnG in TO on 05.12.15 at 7:45 pm

check the mirror. is that a line borrowed from Prentice? dumb-dumbs don’t like to hear that.

#13 some provinces impose restrictions on 05.12.15 at 7:47 pm

P.E.I. imposes higher property taxes on anyone who is not a resident of the island — not just foreigners — and forbids them from owning more than five acres of land or 50 metres of waterfront without special permission from the Island Regulatory and Appeals Commission.

In Canada, several provinces have protections in place limiting the amount of agricultural land foreigners can buy.
■Alberta limits non-residents to two plots of agricultural or recreational land not exceeding a total of 20 acres.
■Saskatchewan restricts sale of agricultural land to foreigners to 10 acres.
■Manitoba prevents non-residents from owning more than 40 acres of farmland and requires that they move to the province within two years of purchasing the land.
■Quebec doesn’t allow non-residents to purchase farmland at all without permission from the Commission de protection du territoire agricole du Québec. A non-resident is anyone who has lived in the province for less than 366 days within the 24 months preceding a real estate transaction.

Bad laws don’t justify more bad laws. — Garth

#14 Michael on 05.12.15 at 7:48 pm

What data? The data that shows Vancouver prices are increasing from the top down. Can’t think of how that happens from locals borrowing money.

As I said, foreign buyers impact certain hoods and strata. They do not set the price of Vancouver Specials in East Van. You do that. — Garth

#15 John on 05.12.15 at 7:48 pm

One particular home in SE Calgary has a twin sister home one block away which is now up for sale. The asking price is now $6,000 below the selling price about 4 years ago. Meaning, what goes up comes down. Ditto for Vancouver. It’s never different this time. Interesting moves upwards on the German Bund and US treasury yields. That’ll punt rates up regardless, leaving Janet Yellen to tag along. Then it’s a mega buyer’s market if anyone can get a mortgage…. and Harper get’s to go to the polls and get his just rewards.. Bonus.

#16 pathcontrolmonk on 05.12.15 at 7:49 pm

Are the people who bought CDN passports for $1 mil really “locals”?

Show me one. — Garth

#17 Chaddywack on 05.12.15 at 7:50 pm

Visible Minorities make up only 12% in Victoria. Of those only 4% are Chinese…..

Vancouver is 52% Visible Minority (one questions whether the term is accurate) of that nearly 30% are Chinese.

I know you mentioned that Victoria is not similar to Vancouver in size or demographics, but surely comparing Vancouver to Victoria would be significantly different in the levels of foreign buying. It seems only natural that investors would want to put their money where they feel comfortable. With the large Chinese population in both Vancouver and Toronto it makes perfect sense that the amount of foreign investment would be higher in those two cities than Victoria.

I don’t know if it’s necessarily accurate to compare Victoria to Vancouver.

Being ‘visible minority’ does not mean you flew in from China. Sheesh. — Garth

#18 everythingisterrible on 05.12.15 at 7:51 pm

http://www.cbc.ca/news/canada/british-columbia/ubc-housing-expert-wants-more-oversight-on-foreign-real-estate-investment-1.3062595

From a UBC Geography professor, regrading other cities that DO collect the data on foreign real estate investment. Our government needs to follow Australia’s lead.

“It has been demonstrated beyond doubt, because they have the data, that overseas investment is a key factor.”

I think this guy would know more about the subject.

David Ley has as much cred as Cameron Muir. — Garth

#19 Willy H on 05.12.15 at 7:52 pm

“If you want someone to blame, check the mirror.”

__ __ __ __

Didn’t Jim Prentice just use this phrase?

Look where he ended up!

Yes. He didn’t lie. — Garth

#20 Robbie on 05.12.15 at 7:52 pm

#3 Canadian Joe

As a Realtor and a long-time reader of Garth’s blog I can attest that he doesn’t hate Realtors…he recommends them for many Buyers and Sellers. He does hate misrepresentation/lies however, but, of course, it is not just Realtors who are guilty of that.

#21 bigA on 05.12.15 at 7:53 pm

I applaud your opposition to all racism. Honest. Please get some *Vancouver* stats.

You say that the average household income in YVR is just over 70,000, that a mortgage here takes over 90% of household income — do you seriously believe that the majority of houses are being bought by people here?

There are so many Canadians with Asian genes in Vancouver. Do you not know of any whom you could ask — to get around this whole racism thing?

‘Asian genes’. New low. — Garth

#22 PM on 05.12.15 at 7:54 pm

Despite sharing the same same letter of the alphabet at the beginning of their names Victoria isn’t Vancouver. May as well bring up foreign ownership percentages in Prince George.

There isn’t data saying foreign investment is juicing prices but there also isn’t data saying it isn’t.

Other cities have more data and are taking action to limit foreign ownership, so it’s plausible. Either way the average Vancouver income of $70K isn’t buying the average Vancouver house of $1M. Debt horny or not, no bank is making that loan.

At the very least the city and province could implement some way to track owner but then it might reveal weaknesses in the biggest industry juicing the economy and that would be bad.

#23 takla on 05.12.15 at 7:54 pm

The problem of over priced housing in YVR is directly related to demand,Demand from local residents,Retirery’s from across Canada and recent weathy immigrants.Im sure the wealthy folks from around the world that took up Canada’s offer of jumping the immigrant line-up with “no interest loans”{800,000.00 I believe}to said Gov of Canada,have found a home here in Vancouver as well,and im sure most of these folks aren’t renter’s!

I know what piss’s of the locals is the unoccupied homes that have been sold to investers from all the groups I mentioned.I know someone who works for Canada post delivery and many hi-end homes in the west end have no occupants,just landscapers..

So what? How would forcing occupancy make one iota of difference to overall market prices? — Garth

#24 Freedom First on 05.12.15 at 7:57 pm

Look in the mirror. That is the only person that can have you living in gratitude for your blessings. Or you can live in worry and self-pity for what you don’t have. Your choice. No exception.

Be happy, don’t worry. Freedom First.

#25 Made in BC on 05.12.15 at 7:57 pm

■Quebec doesn’t allow non-residents to purchase farmland at all without permission from the Commission de protection du territoire agricole du Québec. A non-resident is anyone who has lived in the province for less than 366 days within the 24 months preceding a real estate transaction.

Bad laws don’t justify more bad laws. — Garth
++++++++++++++++++++++++++++++++++++

How are they bad laws? People that MOVE HERE and contribute to the economy is awesome. Please come here with your culture, wealth of knowledge and contribute and pay taxes. My wife and I rarely go to a “Canadian” style restaurant. It’s always foreign as the food is so good.

The trouble is…….wiring over 2 million dollars to a one time benefit to a RE agent…..is not contributing to Canada. It’s hurting it.

Ask the agent, and the seller, and the city collecting the property taxes. — Garth

#26 Michael on 05.12.15 at 7:57 pm

East Van specials are being bought by Van West sellers. Locals borrowing money can’t afford them.

Come to Vancouver and look at all the homes being bought for 7 figures, then torn down and replaced by monster homes which then are often left empty. No way locals can afford to do that.

The problem in countries like China and Russia is they have rich people, but still have authoritarian governments. They are taking their money out of their own countries in massive amounts and parking much of it in real estate in places like London, Sydney and Vancouver.

#27 Metro Van Observer on 05.12.15 at 7:58 pm

We who live here in Metro Van don’t need stats to see the truth that we see here in our daily lives. It’s obvious to anyone who lives here that the phenomenon of yellow peril is real. 17,000 signatures is an indicator of how strongly people feel & know the problem to be real. Vacant homes, foreigners outbidding locals, money laundering etc. is commonplace.

Stats can’t track illicit funds being laundered here but the locals know the truth.

Yes, I understand you don’t need proof. Besides, that’s hard. — Garth

#28 TurnerNation on 05.12.15 at 8:02 pm

Lefties, keep talking oil down! See you at $70.

#29 everythingisterrible on 05.12.15 at 8:03 pm

#17
David Ley has as much cred as Cameron Muir. — Garth

Ad Hominem – an experts opinion that doesn’t align with yours. Stay classy Garth.

That could have been a compliment. — Garth

#30 Mark on 05.12.15 at 8:03 pm

“Stats can’t track illicit funds being laundered here but the locals know the truth.”

“the locals” are obviously not smart enough to look at Vancity and the other subprime lenders and see that they’re the ones responsible for the bubble.

Pinning a subprime credit bubble onto a specific ethnic group is pretty much about as low as it gets. Didn’t we have WW2 because of a certain few regimes that also tried this with certain ethnic groups?

#31 Goldie on 05.12.15 at 8:05 pm

I love the HAM posts. It’s where everyone in the comments WHO DOESN’T LIVE IN VANCOUVER tries to tell us that we are wrong about HAM, while everyone who actually lives here meekly tries to interject without being libelled by accusations of racism.

And even though I am a solid observer of HAM and laugh at those who try to deny its existence, I’m still not going to sign that petition because I feel that creating those restrictions is anti-free market and only land that is subject to the national interest (which does not include residential) should face restrictions on foreign ownership.

It’s a Vancouver conceit to believe foreign buyers only want real estate there, or that larger cities (like Toronto or Montreal) don’t also have swelling visible minority populations. The others seem more mature about it. — Garth

#32 Realtor007 on 05.12.15 at 8:06 pm

Dont tell us that an average family income of approx $75k pushed sfh prices to almost $1.4mm. There is far more at play here.

Bard Lamb has offered to show you proof, did you take him up on it?

Check out the average household income and average detached price in Toronto. Then you can apologize. — Garth

#33 Linda on 05.12.15 at 8:08 pm

Don’t know if it is still in place but Canmore, Alberta used to have a rule that made developers offer lots to the locals first at reduced pricing. Not sure of exact level of reduction, it was a percentage I believe.

China has so many people, I have difficulty believing they could have any empty housing. Perhaps more accurately the reason the housing is empty is because many of the locals there can’t afford it. And while I agree it is scuzzy, it is simply a fact of human nature to want what others want. If it wasn’t so, why then does it work over & over again? Even knowing you are being manipulated doesn’t seem to stop the attraction, though it does help with the resistance levels. Funny though that in Vancouver realtors use Oriental foreign buyers to ramp up the lust level while in China they use Caucasians to do the exact same thing.

#34 smoke and fly on 05.12.15 at 8:10 pm

As a Vancouver resident, I would estimate 90% of homes today have a renters suite or two. That is how people afford a house here.

Exactly. And they pay dearly to have people in the basement. — Garth

#35 Mean Gene on 05.12.15 at 8:12 pm

That video is wEiRd!

#36 CC on 05.12.15 at 8:13 pm

I have directed equity and debt investment in projects where 100% of the units have pre-sold to mainland chinese buyers. Just saying. I sold my residence to a UBC student with a $300K car, too.

Oh, so you’re part of the problem? Or is this a boast? — Garth

#37 Ralph Cramdown on 05.12.15 at 8:14 pm

#11 Made in BC — “Please come back with a rebuttal with all the taxes outside of income tax in 1982.”

If you want to say something, bring facts, with citations. The original poster put forward a laughable story, which I discredited with about one minute of google-fu.

#38 What about CMHC? on 05.12.15 at 8:18 pm

This is an eye opener for many of you.

What kind of Asian are you? 2 minute video:

https://youtu.be/DWynJkN5HbQ

#39 Marco on 05.12.15 at 8:21 pm

Interesting blog this evening Garth.

Yes the difference between perception and reality.
We perceive that if foreign buyers are buying on the West side and other desirable hoods then they must be having an effect on those Vancouver specials for instance in East Van. If everyone thinks they will be priced out if they don’t bid high in East Van for instance then naturally prices will stay lofty.
As soon as prices are perceived as being unrealistic in these areas, as they are now, then reality will sink in. A house is only worth what someone will pay for it.
In this era of low rates and realtor propaganda no wonder our perceptions on house prices are skewed. Foreign buyers are having an impact in some areas in Van, Garth doesn’t deny this, but our perceptions led astray by salespeople have a big impact too.

True story And this was before 2008: A realtor is leaving his non realtor buddies at a bar and urges one of his buds to purchase a place on the West Side because Chinese are still buying there. Sales pitch or not? When rates rise we will see the difference between perception and reality.

Cheers. Go Habs Go!

#40 Nemesis on 05.12.15 at 8:21 pm

“David Ley has as much cred as Cameron Muir.” — Garth

#Ouch!… #Let’sPlaySpotTheDifference…

http://www.miabc.com/event-1714291

http://www.geog.ubc.ca/persons/david-ley/

#41 Clearwater on 05.12.15 at 8:23 pm

hi all,

Appologize yesterday for the desperate call for attention about job losses in our company. Not looking for sympathy, but I just felt it was noteworthy and many headlines you see in the msn are not even as big (job loss wise) as you see in the headlines. This is not an isolated incident as I know that many of our peer companies are in the same boat and numbers are similar or worse. In cowtown every in the o&g sector is pretty pumped if they still have their job.

For those comments about severence my understanding of the law is that severance is pretty limited as in two weeks pay max unless if you have 2 years with the company. Not much to live on for long.

Big severance packages are not required by law but I would like to hear more if you thinkmim wrong.

Cheers and thanks for the responses yesterday.

#42 Retired Boomer - WI on 05.12.15 at 8:25 pm

Can’t tell by the smell id its bologna or HAM. Who cares, put your money where you wish to live. For this old goat it is not where the top prices are today.

Make your selection based on what you can currently afford, not tomorrow’s mythical income, those unicorns have left the building.

Invest in what you believe to be the future, not the current, nor the past. The first shall be last, and who knows where you will be besides worm food, guaranteed.

Never take life too seriously, who gets out alive?

#43 Andrew Woburn on 05.12.15 at 8:27 pm

Remember all those retail and blue collar jobs about to be lost to automation? But you’re OK. You went to college.

“New machine could one day replace anesthesiologists”

http://www.washingtonpost.com/business/economy/new-machine-could-one-day-replace-anesthesiologists/2015/05/11/92e8a42c-f424-11e4-b2f3-af5479e6bbdd_story.html

#44 HAB Sandwiches on 05.12.15 at 8:28 pm

Along with the HAM comes HAB (Hot Asian Babes). I love immigration.

#45 Ronaldo on 05.12.15 at 8:31 pm

”If you want someone to blame, check the mirror.”

Isn’t that what the former premier of Alberta said too?

Truth hurts. Expect a lot of hate mail for sure.

#46 Realtor007 on 05.12.15 at 8:35 pm

Check out the average household income and average detached price in Toronto. Then you can apologize. — Garth

Bigger pay cheques but sfh is $400k less, for most of us plebs $400k is no chump change. Nobody is denying that there is no foreign money helping out Toronto price increases as well, they just like BC better for the weather and scenery.

You might want to rethink the ‘bigger paycheques’ statement. — Garth

#47 GAV on 05.12.15 at 8:37 pm

It defies all common sense (and personnal experience) to suggest foreign money is not creating the bubble in the lower mainland.
When the average price exceeds the level that the local population can pay, even with low intetest rates, where do you think the wealth comes from? You cannot create wealth from working on Starbucks.
The only industry in Vancouver is yoga clothes.

Toronto has similar metrics. Explain that. — Garth

#48 cramar on 05.12.15 at 8:38 pm

#2 West Coast on 05.12.15 at 7:30 pm
No kidding….this is more like it:
http://www.theglobeandmail.com/globe-investor/personal-finance/household-finances/house-poor-couple-debt/article24370722/

—————-

They work in financial services!??

He is from India. That explains it. He has never heard of Murphy’s Law—Anything that can go wrong, will go wrong!

#49 Sierts on 05.12.15 at 8:39 pm

Hot Asian Money pouring into Canada.
this statement is so yesteryear!
Why should hot or cold money from anywhere pour into a country, that is deindustrialized, debt ridden and doomed?
the “hot” money these days stays in the third world.
just because the holders of the money prefer to invest, where there is a prospering future to be expected.

#50 Harbour on 05.12.15 at 8:40 pm

You don’t want to miss a credit card payment in Dubai

http://www.gleems.com/520011/gleems-looks-at-the-abandoned-supercars-of-dubai/

#51 Gulf Breeze on 05.12.15 at 8:41 pm

The city of Victoria is under 300,000, population wise. It might be half that. Asians tend to buy in larger population centres. This is not a yellow peril story. It is a black and white and read all over story. The most credible mainstream papers are reporting on the impact of a tidal wave of Chinese sheltering their money outside of their country. The real story here is not whether it is happening or not, but whether the Chinese government will institute capital flight laws. This, to me, is the real risk for anybody buying in Vancouver, Manhattan, Melbourne, etc…

#52 IKnow on 05.12.15 at 8:41 pm

#14 Michael on 05.12.15 at 7:48 pm
What data? The data that shows Vancouver prices are increasing from the top down. Can’t think of how that happens from locals borrowing money.

As I said, foreign buyers impact certain hoods and strata. They do not set the price of Vancouver Specials in East Van. You do that. — Garth

Mr Garth: The reason, you finally said something right about the dynamics felt here in YVR.
And the reason local people have the courage to set Millions plus prices for small plots of east van land is due to perceived non-stop enthusiasm of YVR land by wealthy foreign/local/landed/absentee/… Chinese.
So China money has first order effect on YVR real estates value, can we agree on that?
And even if just mildly agree, then why keep debating or suggesting that China money has no substance?
The effect does not need to be direct, as in some far away chinese guy buying up a whole area in East Van, does not need to be that.
A psychological influence is plenty enough, and YVR people are all submerged in that perception.

#53 Gulf Breeze on 05.12.15 at 8:44 pm

Clearwater, No need to apologize. Reading about your company was very interesting and I really hope that you continue to report on your part of the world!

#54 Blacksheep on 05.12.15 at 8:47 pm

HD #218,

“what if your overexposure to the topic clouded your judgement through disinformation and hindered your ability to make an educated decision?”
————————————
Years ago I reviewed a great deal of information on this topic. Much of it was unsupported conjecture, but a very small % of it, was simply unexplainable.

This IS the low hanging fruit. The easy target. The debate I cannot lose, because its based on Physics….Unless of course some sneaky terrorist activated his suitcase sized, Hadron Collider that fate filled Manhattan morning, creating a Black Hole and thus throwing all laws of physics into a state of disarray…..I got this.

See, I don’t need to explain or know what took place, I only need to find a single undeniable Physics anomaly to prove it could not have happened as advertised and the whole story comes unglued.

Garth, your stand up friends and every one else, is of course free to believe anything they choose. We just happen to have a different take on things and that just fine with me.

Thanks for the convo.

#55 Andrew Woburn on 05.12.15 at 8:50 pm

#11 Made in BC on 05.12.15 at 7:44 pm
Please come back with a rebuttal with all the taxes outside of income tax in 1982. I think the list will be short.
=================

As Slick Willie said (how did he get that name, anyway), I feel your pain. I live in BC, the land of a thousand taxes. Of course I get all choked up when our inspiring Premier titters on about our low income tax rates. Must be from the smoke coming out of my ears.

Ralph kind of underplayed the nominal income tax rates in 1982. I was a tax planner in those happy days and top earners in BC were paying a top marginal rate of 65% – unless they were my clients. Hidden in the price of almost everything was a manufacturers sales tax levied at the wholesale level which meant you also got to pay PST on the federal tax.

Whether on average the old system cost more than today’s stealth taxes is hard to say. Certainly the BC government has taken this tried and true maxim to heart.

“The art of taxation consists in so plucking the goose as to obtain the largest possible amount of feathers with the smallest possible amount of hissing”

– Jean Baptiste Colbert quotes (French Economist and Minister of Finance under King Louis XIV of France. 1619-1683)

#56 down and out on 05.12.15 at 8:50 pm

http://www.oftwominds.com/blogmay15/bubble5-15.html Garth is not alone in his views .

#57 Smoking Man on 05.12.15 at 8:51 pm

For those of you looking to re doing a mortgage,

Variable all the way..

Mfg not coming back to Ontario till we rid the commies.
Banking and insurance using more off shore labour. Suppressing wage growth in the only sector that has the potential to lift things up.

Telecoms going to get bitch slapped when google offers wireless. Those jobs will get creamed.

Electricity going to go up up up.

The huge corp profits in the last few years only going to management and share holders and not trickling down to the slaves that could spark some growth.

The slaves consumption driven by debt. Not wage growth. That will dry up soon.

Low oil prices till the next war in middle east.

No damn way in China, Canada will spike the over night. In fact my crystal ball sees negative rates on the horizon.

We need wage inflation to drive growth to pay down debt, the opposite is happening.

Variable all the way.

#58 Dan on 05.12.15 at 8:55 pm

Garth , do you think that the Chinese central govt’s policy paper on housing of April 10 2010 has anything to do with a possible increase of foreign money into the hot areas? My contacts in Guangzhou and Shenzhen are telling me the more affluent are using Canada’s housing as a parking space for their cash since this has come into practice (news from local Chinese newspapers).
read this it’s in english :-) : https://books.google.ca/books?id=QEvmK8PGGOIC&printsec=frontcover&dq=inauthor:%22Jianbo+Ma%22&hl=en&sa=X&ei=1p5SVerVKor7sATTpYD4Bg&ved=0CB0Q6AEwAA#v=onepage&q=no%20more%20than%20one%20apartment%20or%20house&f=false pages 50 thereabouts.
All my other information is in Chinese sadly.

#59 valleyrenter on 05.12.15 at 8:55 pm

#34- smoke and fly

Bingo! You hit the nail on the head. That’s how it’s done in the Valley anyways.

Take a couple working full time. Add in a pre-approval for $300,000. Stir in a 2 bedroom basement suite that will cover an additional $200,000 in mortgage. Pour all ingredients into a pan and bake at 375F till done. Presto, you now have a house for $500,000!

#60 Grantmi on 05.12.15 at 8:56 pm

#4 Made in BC on 05.12.15 at 7:36 pm

And JFK was killed by a lone gunman hitting a moving target 3 times from 200 yards with a crappy bolt action rifle as well.

And not even a good marksman to boot. LHO was average according to his military record!!

#61 Hot Albertan Money on 05.12.15 at 8:56 pm

If you want someone to blame, check the mirror.

RIP Garth’s web servers

#62 Canuck on 05.12.15 at 8:59 pm

So since you’re bullish on the US, would you go as far as taking out US citizenship if you were eligible?

Not really. Happy where I am. And with having a larger US portfolio than a Canadian one. — Garth

#63 Gulf Breeze on 05.12.15 at 9:00 pm

As for bonds, in order to finance spending doesn’t a country have to offer higher yield to attract buyers, if the country appears to be at risk? But what if the greatest default risk, within any given country is a rise in rates that would initiate a real estate collapse and sky high unemployment rate? Strange days

#64 Washed Up Lawyer on 05.12.15 at 9:01 pm

#41 Clearwater on 05.12.15 at 8:23 pm

For those comments about severence my understanding of the law is that severance is pretty limited as in two weeks pay max unless if you have 2 years with the company. Not much to live on for long.

Big severance packages are not required by law but I would like to hear more if you thinkmim wrong
**********************************

You cannot rely upon that which follows because I am not your lawyer and I have never met you. A significant portion of my practice used to be wrongful dismissal stuff and I have conducted many trials and appeals on employment matters.

Your understanding of salary in lieu of notice are partially folklore and appear to be based only upon the bare minimum set out in the Employment Standards Act. The common law adds to that minimum. The bare minimum is used to pound waiters, roofers and janitors etc. when their employment contract is terminated.

Contact an employment lawyer. In Calgary, it used to be routine that we would grant an initial interview for free to suss out the case. Avarice and a recession may have changed that. Phone around and find a hungry young legal beagle who will meet with you. Depending upon your circumstances, you may be entitled to more and sometimes a simple demand letter may get you what you are entitled to beyond the legislated minimum.

My statement of account for my modest fee is in the mail.

Best wishes.

#65 Smoking Man on 05.12.15 at 9:01 pm

Oh one more , real estate will still be good in GTA for two reasons.

The herd is stupid as shit. And of the 2000 people coming here every month, 20% have a ton of loot.

Dr Smoking Man.
PhD in Herdonomics.

#66 cto on 05.12.15 at 9:02 pm

#2 west coast
Re the globe article on house poor couple.
What sickens me the most is that they appear to think that they can overcome this without any fear of the pain. Its as if seems they are expecting a bailout because they know the government suckholds to the voter and will legislate measures to bail these morons out with my taxes. My god! Maybe I am the greaterfool!

#67 PM on 05.12.15 at 9:03 pm

Toronto has similar metrics. Explain that. — Garth

Slightly higher income. Cheaper houses. Foreign investment is a factor there too (just like London, New York, Sydney) its just more balanced with other industries. In Vancouver we got a lot less so foreign investment makes up a higher percentage of bubble factors.

Its not a binary state. Its a sliding scale.

#68 Musty Basement Dweller on 05.12.15 at 9:05 pm

The condo market in Vancouver and the lower mainland is totally flat in terms of price and has been so for 7 or 8 years. But it doesn’t seem to get much publicity.
I have heard many first account examples of this, the most recent being today from a buddy of mine.
He just bought a 1 bedroom condo near Sapperton for his son for $185 K. The lady selling it paid $190k in 2008.
My calculations don’t show that as a great investment, although there are so many more deep and soulful reasons than that to “own” a place eh? :)

#69 Mark on 05.12.15 at 9:05 pm

“Telecoms going to get bitch slapped when google offers wireless. Those jobs will get creamed.”

Not a chance. Google is no more capable of building infrastructure than the established telcos, and they’ll need employees as well. Telcos aren’t going anywhere, even in a hypothetical situation of Google being an entrant.

#70 devore on 05.12.15 at 9:06 pm

#31 Goldie

…while everyone who actually lives here meekly tries to interject without being libelled by accusations of racism.

Speak for yourself, ok?

You’re displaying the classic fallacy where you believe others you see who are like yourself, also believe like you do.

Besides, you’re contradicting yourself. If visible minorities are so predominant here, then obviously they live here, and residency is the first step to citizenship.

#71 ANON on 05.12.15 at 9:06 pm

Hot Canadian Money in going to Asia. Then HAM washing ashore in Canada. What’s next, tens of trillions of US hotties asking for their pound of flesh around the globe? Bain-maried Euros demanding their own periphery to cough-up what they can’t issue -with a cherry on top, please- or else? Greater Fool becoming a dog blog? Oh, wait…

#72 deaner on 05.12.15 at 9:06 pm

I discussed this with some folks at work the other day (Richmond, BC). I was outvoted regarding the correct answer.

It’s really disappointing to hear people’s level of understanding. If any ‘foreigners’ are causing a problem, it would be permanent residents who arrived via the investor class scheme, not true foreign investors.

Good luck passing a Charter challenge on a law prohibiting Chinese-born permanent residents. Notwithstanding clause?

Shiller is still is as correct as here in 2012. It’s all sociology, psychology, and chasing past returns:
https://www.youtube.com/watch?v=fzhDGY8_VcU
– “Glamour cities are more bubble prone than run of the mill standard cities”

#73 The Real Jimbo on 05.12.15 at 9:06 pm

This is utter madness. For several years Garth has been insisting that foreign buyers have very little influence on Vancouver real estate prices. Denial of the truth has reached almost comical proportions.

Garth, you’re not on the front lines. We are. You fly in for your business, stay in a downtown hotel loaded with Americans waiting for their cruise ship departure, and fly out. “Nope, no Asian peril here.” And the irrelevant charts of Victoria’s demographics somehow proves it.

But we were born and raised in Vancouver. We live and work here. We’ve moved to 4 different suburbs of Vancouver in the last 10 years. Everyone of them have been rapidly taken over by your “fake Asians”. When Canadian families sell, wealthy Chinese purchase. Over and over and over. Canadian families cannot afford $1.5M for houses. And even if they could, they no longer want to live in bombed-out communities void of Canadian culture.

I recently received a flyer in the mail from a realtor. In English it stated “We can help you sell your home fast!” Under it was a line of Chinese characters. I was curious if the Chinese portion said the same thing. I went over to our neighbor for a translation. It read, “We can help you find your perfect home.” Canadians sell, Chinese buy.

Go to local schools, universities, malls, etc and there is a sea of your “fake Asians” and no Canadians. The evidence is overwhelming. My nephew dropped out of university. I was unhappy about it and asked him, “Why would you do that? Why?” His response was, “I don’t speak the language.” Tutorials groups all in Chinese. The few Canadians are ostracized.

Canada is a sovereign, independent nation. Canadian politicians have not only the right but duty to put Canadians first. Real Canadians. Average Canadians. Our children and our grandchildren. Not just special interest like well-connected developers, realtor, and wealth managers, who benefit from this colonization. I hope I see they day that the politician responsible are all charged with treason.

TREASON – a violation of allegiance to one’s sovereign or to one’s state. the betrayal of trust or confidence; breach of faith; treachery.

By ‘real Canadians’ do you mean the white kind? — Garth

#74 crowdedelevatorfartz on 05.12.15 at 9:08 pm

You’re farting into a hurricane of ignorance Garth.

You cant convince any of these people otherwise.
You show your stats and the dont believe them and post their internet “stats”.
When the market drops, and the Gweilo start having their houses repo’ed.
http://www.google.ca/url?sa=t&rct=j&q=&esrc=s&frm=1&source=web&cd=1&cad=rja&uact=8&sqi=2&ved=0CB0QFjAA&url=http%3A%2F%2Fen.wikipedia.org%2Fwiki%2FGweilo&ei=haNSVevcFtLEogSx3oG4BA&usg=AFQjCNFeebsH0LUiFhVXDGVW2CWgkuJFsA&bvm=bv.93112503,d.cGU

…..and they’ll still blame everyone else for their stupidity

#75 Renter's Revenge! on 05.12.15 at 9:10 pm

That video is unbelievable! It’s almost as if they want to be duped. They’re more like us than we want to admit. Anything to avoid the disappointment of reality.

Umberto Eco on the universality of conspiracy theories (that they are a way of avoiding personal responsibility):

https://www.youtube.com/watch?v=DuGpw0-B9-s

#76 devore on 05.12.15 at 9:13 pm

#33 Linda

Funny though that in Vancouver realtors use Oriental foreign buyers to ramp up the lust level while in China they use Caucasians to do the exact same thing.

Grass is always greener somewhere else. In Europe, everything cool is American. In US, everything expensive is European style. When I was in a store in Korea, I came across a “Canadian formula” face cream. I don’t even know what a Canadian formula is supposed to be, but obviously the Koreans were enamoured with it.

We want what we think other people have, because what other people have is obviously so much better than what we have.

#77 Republic_of_Western_Canada on 05.12.15 at 9:14 pm

Garth, why don’t you move to Baoding or Canton for two (2) years, live with the locals, and carry on a business or employment there.

Report back and let us know how your fantasy affair with chinese nationals on the ground has turned out.

You can leave now. — Garth

#78 bigA on 05.12.15 at 9:14 pm

#21 bigA

The “new low” is you resorting to ad hominem in order to dismiss the main point of my message, Garth. You and I both know there is nothing wrong with having any particular genes from wherever.

I am on your side, and have been ever since you snail-mail responded to my Dad’s question a couple of decades ago. I hit “submit” (for #21) to try to challenge you to:
(1) get Vancouver stats, or
(2) to explain how Vancouver incomes could be responsible for most of the real estate transactions, all over YVR.

You know the household incomes. Does the math work?

I’ve tried to influence you, and will now stop.

#79 Made in BC on 05.12.15 at 9:14 pm

The trouble is…….wiring over 2 million dollars to a one time benefit to a RE agent…..is not contributing to Canada. It’s hurting it.

Ask the agent, and the seller, and the city collecting the property taxes. — Garth
++++++++++++++++++++++++++++++++++++

If one time commissions and property taxes were enough tax to run a country……well do I need to say anything else?

#80 mark on 05.12.15 at 9:16 pm

I’m confused, when should we trust realtor statistics?

Don’t trust prices and sales, but trust them on buyer origin?\

Then don’t. We’ll use yours instead. — Garth

#81 fixie guy on 05.12.15 at 9:17 pm

@#3 ILoveCharts

It’s as patently obvious as it is steadfastly ignored. Honestly discussing how many buyers in that ‘local’ number are really new, dual-citizenship Canadians buying with off-shore money, and in any realistic market sense foreign buyers, is too socially barbaric. The instant that magic toque of citizenship touches their head their asset history becomes Canadian too.

#82 Greg on 05.12.15 at 9:17 pm

OK if HAM’s out, wonder if marijuana legalization would have an impact on the Van housing market?

#83 Buddha on 05.12.15 at 9:19 pm

Hey Smokster, Yep!

…Musing, 2025…Savers are ruled antipatriots and guilty of egocrime. The Ministry of Heroic Debt Holders operates realignment camps that will be remembered for generations as prisons for savers…

Back to sleep.

#84 Halifax Observer on 05.12.15 at 9:19 pm

Patti Croft, former Rbc chief economist, says foreign investment is responsible for 5% of the national real estate demand and 40% of the Vancouver luxury market demand. She states it at the 2:20 mark here.

https://m.youtube.com/?#/watch?v=kK5SO_2ZbLo

#85 Made in BC on 05.12.15 at 9:19 pm

#44 HAB Sandwiches on 05.12.15 at 8:28 pm
Along with the HAM comes HAB (Hot Asian Babes). I love immigration.
+++++++++++++++++++++++++++++++++++

You know that Vancouver is the hardest place to meet chicks in N.America right? Looks like you have just explained why.

#86 Mister Obvious on 05.12.15 at 9:20 pm

Thanks for the video. A real eye opener.

I detect a fundamental difference between the two countries in the concept of ‘foreign credibility’.

In Canada we fear foreigners will swallow up all the good stuff. Apparently in China, foreigners actually ARE the good stuff.

It’s a slimy bit of business either way, but a poignant illustration of a huge cultural divide.

#87 Clearwater on 05.12.15 at 9:20 pm

Not that I give a rats ass abour vancouver re but when I stayed at a friends place last summer it was pretty noteworthy that the fancy resedential tower right beside stanly park looked to be about 90% vacant based on the lights on during the evening. Im told from my friend that I was staying with that this is the norm. Anecdotal and one building but it seems to me that foriegn non residential buyers are purchasing places and not living in them. This has to be bad news for the “real” local economy.

Living in vancouver is ok if you dont give a shit about Having a mortgage so whats all the fuss about. It is what it is, move on. It will coorect or it won’t.

#88 Italians love real estate on 05.12.15 at 9:22 pm

I live in one of the towns you mentioned Garth .

To deny the influence of overseas buyers from China when you can’t go to a public place without hearing mandarin being spoken, or Farsi or Russian well then you are in denial.

Foreign buyers in the GTA and Vancouver are very real indeed.

Had you been an adult in the 1950’s and 60’s I suppose you would have denied the influx of Italian immigrants as well and there influence in T.O ..LMAO

Canadian citizens speak Mandarin and Farsi, too. Does your grandmoher still speak Italian? My wife’s mother still speaks Polish. Canadians, all. — Garth

#89 JG on 05.12.15 at 9:23 pm

“HAB Sandwiches on 05.12.15 at 8:28 pm
Along with the HAM comes HAB (Hot Asian Babes). I love immigration.”

Amen

#90 Marco on 05.12.15 at 9:24 pm

I think we need to get house prices down to fundamentals.

Utopian vision:

Please, all you Boomers with house lottery tickets.
Who saw your houses appreciate astronomically due to policies post 2008, do not sell until we the people, not the realtors, have perceived a proper price point for housing,
and interest rates have risen to normal levels to the delight of savers.

Is this not more the reason why prices are high as opposed to foreign buyers?

Cheers.

#91 Don Derc on 05.12.15 at 9:28 pm

I wonder what Mexicans think as us Canuckleheads buy in droves in P Vallarta, Cancun etc. Watch out for WASP ? (white anglo saxon pesos).

Is Canada a racist country? Yup.

Got an issue with immigrants stealing your job, raising home values? Look in the mirror.

250,000 immigrants a year are let into this country – because you and I are too busy complaining, getting rich, and NOT making babies.

I think the Vcr petition shows just how stupid we are out here in the lower mainland. We have high auto emmissions – that’s why we built the port mann bridge – to cater to the car and to move off shore product easier in the west. Just one example.

Fraud? Garth your next article should be called “Comatose” – make sure you have a picture showing some lard ass rump sticking out of the voting booth. Make sure to show a chart indicating the debt of each province AND capitol city. As we slashed our throats with high mortgages on over priced homes, and carry high personal debt with no savings, the Gov’t elected said ditto.

We truly are the authors of our own slow demise.

#92 Smoking Man on 05.12.15 at 9:35 pm

Garth please tell me Lorie Goldstein is not your enemy.

Love that guy..he’s been drinking Jack tonight..he’s gone appe shit on the tree huggers on Twitter.

Asked him to hire me, I’ll work for free, got a lot of shit to say..

But then again, you probably have a bigger audience that the sun..

Never mind.

#93 waiting on the westcoast on 05.12.15 at 9:37 pm

#27 Metro Van Observer on 05.12.15 at 7:58 pm
We who live here in Metro Van don’t need stats to see the truth that we see here in our daily lives. It’s obvious to anyone who lives here that the phenomenon of yellow peril is real. 17,000 signatures is an indicator of how strongly people feel & know the problem to be real. Vacant homes, foreigners outbidding locals, money laundering etc. is commonplace.

Stats can’t track illicit funds being laundered here but the locals know the truth.

Yes, I understand you don’t need proof. Besides, that’s hard. — Garth

~~~~~~~~~~~~~~~~~

Wow, wow, wow…

Garth – great response. In keeping with Godwin’s law (all blogs will denigrate to Hitler/Nazi commentary, I have supplied a Goebbels’ quote to remind us how broad emotional plead build monuments to hatred…

Metro Van Observer – a little lesson on another observer who made up stories to rationalize problems in their country… Didn’t end well…

“As socialists, we are opponents of the Jews, because we see in the Hebrews the incarnation of capitalism, of the misuse of the nation’s goods.” Joseph Goebbels

#94 Italians love real estate on 05.12.15 at 9:39 pm

estate on 05.12.15 at 9:22 pm
I live in one of the towns you mentioned Garth .

To deny the influence of overseas buyers from China when you can’t go to a public place without hearing mandarin being spoken, or Farsi or Russian well then you are in denial.

Foreign buyers in the GTA and Vancouver are very real indeed.

Had you been an adult in the 1950’s and 60’s I suppose you would have denied the influx of Italian immigrants as well and there influence in T.O ..LMAO

Canadian citizens speak Mandarin and Farsi, too. Does your grandmoher still speak Italian? My wife’s mother still speaks Polish. Canadians, all. — Garth

C’mon Garth . Absolutely not the same as these individuals are as new to the country and area as Italians were in the fifties and sixties.

This denial of foreign influence in our RE market will prove to be your Achilles heal in your argument against the continuation of the RE bull market.

First, newcomers today are exactly like newcomers decades ago. Canadians all. Second, my point is that bloated prices are far more the result of rates, mortgage insurance, debt embrace, stupidity and house lust than the ‘foreigners’ who happen to live in your town, and are your neighbours. — Garth

#95 Ronaldo on 05.12.15 at 9:39 pm

#86 Marco

”do not sell until we the people, not the realtors, have perceived a proper price point for housing,”

High hopes there I would suggest.

#96 Glass Half Full on 05.12.15 at 9:41 pm

Clearwater, I can totally relate to your job situation in Calgary. The official job numbers mask the amount of pain currently occurring in the patch. Contractors make up a very large percentage of the professional work force and they have been let go in droves or have had their hours cut back to a bare minimum. In addition many companies have cut salaries by 10-20% or instituted 4 day work weeks. None of this data shows up in the unemployment numbers.

In my company starting next week, we have been mandated to take either an unpaid Friday or Monday off until cash flow improves. As you mentioned, the entire office is in agreement and most are just happy to have a job.

If you are not in the patch, there is still a great deal of denial that this is nothing more than a mild slow down. On the side, I am a licensed realtor and the most naïve to our new economic realities are fellow real estate professionals. Trying to explain to them that fundamentally our energy based economy has changed and that this recession has more potential to look like the 80’s than the 2008 recession is generally met with scorn and contempt.

Hang tough.

#97 Ronaldo on 05.12.15 at 9:43 pm

#82 Greg on 05.12.15 at 9:17 pm

”OK if HAM’s out, wonder if marijuana legalization would have an impact on the Van housing market?”

About as much impact as trying to put out a house fire with a garden hose. Another myth.

#98 Chris in London on 05.12.15 at 9:47 pm

Hi Garth,

I appreciate the amount of effort you put into this blog. I’ve been a loyal follower for years now and haven’t missed a post in a long time. I don’t recall any blog posts directly addressing how to set up finances with a significant other. I’m sure there is quite a bit of variability depending on the job types, interests, age, relationship status etc, but I was curious if you had any general principles that could be followed.

Regards,

Chris

#99 Cici on 05.12.15 at 9:55 pm

Now why would 17,000 people sign this? Because the realtors have done their job in spades.

______________________________________________

Yeah, I know…I was trying to explain this to my mother the other night. It was like trying to talk to a brick wall. she has many Asian friends, but insisted that “Asian foreigners from Vancouver” (whatever the hell that means) have already bought up everything in that market and are now buying up all the property in Victoria. Apparently her and my sister are really worried about it, although sis has a great apartment that she loves in a great area and at a great price. Go figure.

In the meantime, I’ll eschew all granite, marble, melomene and the like, and in turn direct my attention towards enjoying life, with a little investing on the side.

Which way will the markets turn? I don’t, and for the time being, I just don’t care ;-) Planted half of my garden last week, and had my first golf lesson tonight (fun, fun, fun). Tennis is on Friday, and I’ll be taking sailing lessons come June.

Fabulous experiences…this is where I want to piss my time and money away.

#100 The Real Jimbo on 05.12.15 at 9:56 pm

By ‘real Canadians’ do you mean the white kind? — Garth

The great irony is that we keep talking about citizens from a foreign nation (Chinese from China) who have priced us out of our own city. And you keep bringing up race.

It’s a shame that it wasn’t Americans or Germans buying up our real estate. Because then we’d put a stop to it without any fear of stepping on the toes of the politically correct.

Answer the question. — Garth

#101 Smoking Man on 05.12.15 at 9:57 pm

#93 waiting on the westcoast on 05.12.15 at 9:37 pm“As socialists, we are opponents of the Jews, because we see in the Hebrews the incarnation of capitalism, of the misuse of the nation’s goods.” Joseph Goebbels
….

Put this one in the bank,

positive productive people give off long wavelengths to the universe,that attracks and luck always finds them.

Negative unproductive slime sucking complaines give off short wave lenghts, which attracts bad luck.

Who the fk is Joseph Goebbels compared to Dr Smoking Man.

PhD in ?

#102 Mr.Hulot on 05.12.15 at 10:00 pm

#94 Italians love real estate on 05.12.15 at 9:39 pm

Paysan, how much did your parents have in their pockets when they came to Canada? I know my dad came here with $300 in 1956, not millions to invest in Canadian RE without even a commitment to live here.

Most immigrants to Canada today are not wealthy people. But, like your parents, they are courageous and deserve to be welcomed. — Garth

#103 drydock on 05.12.15 at 10:04 pm

After watching the video i realize i now have a big future in renting myself out as an exotic non asian neighbor in China.
Who would of thought?
Is there an agency?

#104 Lorne on 05.12.15 at 10:07 pm

#33 Linda
China has so many people, I have difficulty believing they could have any empty housing.
……
The thing is, they have so many people they have to try to keep them employed, so the construction industry is great for employment. I have spent some time in a few Chinese cities, and travelled to others, and you will notice MANY 30 story apartments being built…and many others, already built, who have very few tenants.

#105 Hamburglar on 05.12.15 at 10:09 pm

More rhetoric…… One only needs to look at the scoreboard ……embarrassing

#106 The American on 05.12.15 at 10:10 pm

OMG. Please don’t tell me that people are still using the antiquated, politically incorrect (and potentialy derogatory) term “Oriental” to refer to Asian people.

#107 fleabitten monkey on 05.12.15 at 10:10 pm

I’d like to see something constructive come from the petition, either directly or indirectly. If the ham argument and it’s influence on prices in the lower mainland BC is indeed a fallacy, then let’s prove that out. If the opposite is in fact the case and it has direct correlation then let’s get that concluded on. Show us all the quants. Then we can all get on with it and put this debate to bed.

There is no conclusion. In a free country local markets will always have outside buyers impacting things, whether they are fleeing China or Alberta. Vancouver needs to get over this and grow up. — Garth

#108 bill on 05.12.15 at 10:11 pm

#97 Ronaldo on 05.12.15 at 9:43 pm
I understand those involved like to stay ‘liquid’ consequently it is stored in various ‘safe’ places as a source of ready cash for cars , parties and to purchase more contraband…..

#109 Italians love real estate on 05.12.15 at 10:18 pm

First, newcomers today are exactly like newcomers decades ago. Canadians all. Second, my point is that bloated prices are far more the result of rates, mortgage insurance, debt embrace, stupidity and house lust than the ‘foreigners’ who happen to live in your town, and are your neighbours. — Garth

Well this in essence is the fundamental question . How much of RE prices are the result of rates and various pro housing policies and how much are the result of ” new Canadians” as I will call them, since you refuse to call them foreigners Garth, the instant they are living among us.

I look forward to a comprehensive and exhaustive study on the subject , from a reliable source , since all we have right now is anecdotal really on both sides of the discussion.

#110 BP on 05.12.15 at 10:19 pm

http://ici.radio-canada.ca/regions/montreal/2015/05/12/002-centre-ville-montreal-ile-des-soeurs-proprietaires-condus.shtml

#111 Herf on 05.12.15 at 10:22 pm

#41 Clearwater

“Big severance packages are not required by law but I would like to hear more if you thinkmim (sic) wrong.”

Clearwater, try searching online for “severance calculator”. The one that will likely pop up is by a certain Toronto-based employment law firm and appears to have an Ontario bias (although I have a hard time understanding why the same Common Law principles and case precedents wouldn’t apply in other provinces outside maybe, Quebec). This calculator purports to tell you what your full severance entitlements are (not just the minimum entitlements under the employment standards act, which is all the employment standards government grunts are prepared to tell you).

Be aware that your entitlements might be limited if you signed some sort of employment contract with the employer that limit the maximum amount of your severance and/or if you’re a member of a union and subject to a union agreement.

In any event, again I urge you to seek solid legal counsel from a competent employment lawyer in your jurisdiction who can look at the specific circumstances surrounding your situation.

#112 PM on 05.12.15 at 10:28 pm

I understand that without data the debate over the impact of foreign ownership is heated but this:

…Vancouver realtors use Oriental foreign buyers …

Seriously? It’s 2015. Lets not use antiquated terms to classify people.

And don’t assume all foreign investment comes from China. BRIC’s have had the fastest growing economies in the last few years and China is only one of them.

#113 x-moose on 05.12.15 at 10:33 pm

There is a BBC documentary “Super reach and us”. It is dull and poiticaly correct to the fault, yet they allowed to slip the following thesis – It is the government policy throughout to induce the populace to take on debt: indebted people do not strike. They are afraid of loosing their jobs and ability to pay mordgage that comes with it.

#114 Woke to the Sounds of Horking on 05.12.15 at 10:35 pm

First, Mr Turner, I’m wondering if ‘douchebaggery’ is strictly a noun and would thus be better amended to ‘douchebaggist’, which is an adjective. Could you please explain your word choice?

Second, re your advice to structure one’s portfolio to be weighted in favor of US stuff; does this also apply to long-term portfolios that get balanced only twice yearly? One-third of my equity indexes are made of Canuck stuff. Thinking of adjusting it down to one-sixth.

Thanks!

#115 Godth on 05.12.15 at 10:38 pm

People should probably be more worried about this foreign money (however true) drying up. Industry got exported and we became consumers of their cheap labour for cheap products, now if they want to bring their money back over here and buy your house for stupid money…

Of course that’s just short term thinking but what’s new. Globalization.

#116 Karma on 05.12.15 at 10:38 pm

#106 The American on 05.12.15 at 10:10 pm
“OMG. Please don’t tell me that people are still using the antiquated, politically incorrect (and potentialy derogatory) term “Oriental” to refer to Asian people.”

It’s only ‘derogatory’ in the US. Not sure why… It just means “East”…

#117 Smoking Man on 05.12.15 at 10:46 pm

I just read something somewhere that sobar lawyers make less money than drunkin lawyers….

But the sobar lawyers are happier.

I’m calling bs on the happier bit….

#118 Chris on 05.12.15 at 10:47 pm

well, sometimes it is hard to tell if a house is purchased with local money or foreign money even if it is purchased by a local person. My friend who lives in Van is from China. She studied in Canada before marrying a Canadian resident. She has since purchased two homes in Van both with down payment from her parents in China. So I guess that would be counted as a purchase by a local Van person but in reality it is not. I don’t doubt that most of the purchasers are local people but there is also a good mix of purchases that are funded by money overseas. MAybe that fraction is just enough to add fuel to the fire and make the market so crazy. On the flip side, it is really sad that with so much foreign money coming this way, Canada’s economy is as stale as it is, other than the housing market of course.

On another note, I remember you said to build a diversified portfolio but no mutual funds and no ETFs, is that right? Why?

No mutuals, no stocks. — Garth

#119 Tim on 05.12.15 at 10:50 pm

DELETED

#120 Nagraj on 05.12.15 at 10:52 pm

Many years ago I took night courses, for two years running, in MANDARIN. I did that for two reasons, because I’m good at languages and I’ve always been curious about Chinese, and because it was a good excuse to hang out at Washington’s Georgetown campus.

Mandarin grammar is ludicrously simple, but pronounciation is supremely difficult.
It’s – unlike Romance languages – a monosyllabic language; not that there aren’t compound words, but nothing like what you get in German.

So I concluded that it’s a fast language, and ipso facto maybe the Chinese think faster than we do.

Put that in your racist pipe oh HAMOPHOBES. Yer slow.

#121 kommykim on 05.12.15 at 10:54 pm

On page B1 of the Victoria Times Colonist is an article about a $5.3M estate for sale. The very last line reads, “Potential buyers for such homes are often Asian, he said.” The “he” being a realtor.
I was going to post a link to the online article, but that version doesn’t mention Asians at all. It’s been edited out:
http://www.timescolonist.com/business/5-3-million-for-peninsula-estate-highest-price-in-the-region-so-far-1.1931614
Hmm….

#122 suede on 05.12.15 at 11:04 pm

Stupid people

a petition against foteign ownership?

this wont bring prices down.

when prices finally come down, basement dwellers will not want a house, or will complain to the govt they have negative equity and want a hand out.

#123 bdy sktrn on 05.12.15 at 11:12 pm

#47 GAV on 05.12.15 at 8:37 pm
It defies all common sense (and personnal experience) to suggest foreign money is not creating the bubble in the lower mainland.
When the average price exceeds the level that the local population can pay
=============
someone can sure as hell pay…avg hh income $470,000 woah nellie.
http://blogs.theprovince.com/2015/04/09/what-does-your-postal-code-say-about-you-new-online-tool-profiles-canadian-neighbourhoods/?utm_content=buffer2fe59&utm_medium=social&utm_source=linkedin.com&utm_campaign=buffer

————————
#48 cramar on 05.12.15 at 8:38 pm
#2 West Coast on 05.12.15 at 7:30 pm
He is from India. That explains it. He has never heard of Murphy’s Law—Anything that can go wrong, will go wrong!
=====================
my RE buddy has a client with 36 large properties in distant 604 – is going to buy a farm for his 18yo son.
those from urban India know about land acquisition
——————————

#49 Sierts on 05.12.15 at 8:39 pm
Hot Asian Money pouring into Canada.
this statement is so yesteryear!
prefer to invest, where there is a prospering future to be expected.
—===============
umm, capital punishment for business corruption?

———————–
#51 Gulf Breeze on 05.12.15 at 8:41 pm
The city of Victoria is under 300,000, population wise. It might be half that. Asians tend to buy in larger population centres.
==================
along transit (NOT bus) lines.
in tokyo the trains were a dense web through the entire developed land mass.
victoria may as well be moose jaw to the uberurban metrotown patron.
————————
#52 IKnow on 05.12.15 at 8:41 pm
#14 Michael on 05.12.15 at 7:48 pm
What data? The data that shows Vancouver prices are increasing from the top down. Can’t think of how that happens from locals borrowing money…
A psychological influence is plenty enough, and YVR people are all submerged in that perception.
_________________
like the psychology of not having $3-5m for a decent west side house.
it is pure domino effect. the best paid young ppl got priced out of the west side, they then overwhelmed the demand for e/n van, which has then driven a set of buyers to nw/coq/ , and so on eastward.

It is a big splash in the deepest end of the pool, of course it will be felt all the way to the shallow end.

#124 Carpe Diem on 05.12.15 at 11:12 pm

DELETED

#125 Rabbit One on 05.12.15 at 11:13 pm

On May-11th
#196 MF
“He said his friend bought a condo, made 100k off of it, and now has reinvested it into 3 other condos and the renters are “paying off his mortgages”.”

This is the exact same behaviour as someone who won the lottery, put all winnings to next lottery tickets = not smart.

#126 bdy sktrn on 05.12.15 at 11:14 pm

CORRECTION – omission

avg hh income in ***shaughnessy****

——————————
123 bdy sktrn on 05.12.15 at 11:12 pm
#47 GAV on 05.12.15 at 8:37 pm
It defies all common sense (and personnal experience) to suggest foreign money is not creating the bubble in the lower mainland.
When the average price exceeds the level that the local population can pay
=============
someone can sure as hell pay…avg hh income in ***shaughnessy****
$470,000 woah nellie.

#127 The American on 05.12.15 at 11:14 pm

At #116: Karma, incorrect. The word, “Oriental,” refers to material objects, such as rugs, food, souvenirs, etc. Never, NEVER, refer to a human being as “Oriental.” Asian is the term used to refer to a person of Asian descent. Don’t believe me? Ask someone from Asian descent. The term “Oriental” is often construed as offensive, even if you’re not in the U.S. Perhaps a person of Asian descent is just being polite and not speaking up when this ignorant term is used.

#128 Tim on 05.12.15 at 11:21 pm

Anyone who lives in Vancouver can see the huge percentage of Asians. Young people are leaving the city in droves becaues they can’t afford to live here. The writing is on the wall.

You bet it is. — Garth

#129 Mark on 05.12.15 at 11:22 pm

“and a chunk of the money is originating offshore (even in cases where it looks like a “local” person has made the purchase.) “

There’s no evidence for anything other than negligible/statistically insignificant amounts coming from offshore. The bubble in Canadian housing prices can be entirely explained through expansion in credit against Canadian houses, and record debt levels.

“Money” arriving offshore (and realistically speaking, there really aren’t many CAD$ offshore as Canada has mostly been running trade surpluses for a long time now) would have the effect of reducing leverage in the market. Yet every time we see the stats, leverage seems to be rising, fully explaining the housing prices.

Additionally, if its really ‘foreign money’ coming ashore, why are Canadians so reluctant to trade against such? Why do record numbers of Canadians own their own homes?

#130 HJD on 05.12.15 at 11:25 pm

Human nature being what it is, feeling unsettled or disturbed if one’s neighbourhood undergoes a change in ethnic profile is to be expected. I think this is what’s behind the unease in areas in and around Vancouver. There’s bound to be controversies about the reasons, justifications and implications of this sort of demographic shift. If Canada’s decision to go with a multicultural policy was a wise move, which I think it was, time will sooth rough edges as integration and assimilation gradually move their way through society. Let’s hope our politicians are able to supply intelligent and useful leadership through the required societal transition. Sooner or later we’ll all look and sound the same.

#131 Entrepreneur on 05.12.15 at 11:38 pm

“It is better to be safe than sorry” and listen to the people; they know by living with them. Maybe have to dig dipper into the statistics and break it down. Who is responsible and where is the paperwork to prove it? Some so-called reputable people are not so honest and change figures/facts “with a stroke of a pen.”

#132 Too Much Debt on 05.12.15 at 11:39 pm

Having lived in both Vancouver and Victoria I totally agree with the above statement that HAM is not driving the Victoria real estate market. However Victoria house prices have been flat as a pancake since 2008, no gains in 7 years. This despite the fact that the median family income in Victoria is $10,000 higher than in Vancouver I guess the people of Victoria are smarter and less house horny than their provincial friends across the water. I highly doubt it…there must be something else driving the Vancouver market then? What could it be? It is HAM, just because the local Vancouver Board doesn’t report it doesn’t mean it is not there. The proof is in the numbers that you provided, Victoria has no HAM and prices have been flat for 7 years while Vancouver prices have been on a steady climb. If HAM is not to blame then implementing foreign buying restrictions should have no effect on the market, so lets implement some and see what happens.

http://www.statcan.gc.ca/tables-tableaux/sum-som/l01/cst01/famil107a-eng.htm

http://www.housepriceindex.ca/

#133 Dave on 05.12.15 at 11:47 pm

Condos in Greater Vancouver – flat since 2009
Houses in Greater Vancouver – up 47% since 2009
Houses on west side- up 81% since 2009

Does that look like a market driven by low rates and local wages to you?

Of course driving an entire side of the city up in price is going to effect the surrounding areas. Had the West Side not exploded we’d be paying A LOT less for all other areas

#134 Too Much Debt on 05.12.15 at 11:56 pm

Great Post Garth

#135 Shawn on 05.13.15 at 12:01 am

Racist?

I don’t like this racist term being thrown around so freely and being used as a weapon. It’s a weapon of mass destruction. It’s a harsh accusation to make. It should not be made lightly. If applied very strictly perhaps we are almost all racist to some degree or other. Let only he or she who is free of all stereotypes and fears of those different from themselves hurl this epitaph. (Saints only please.)

By experience most of us have learned to be a lot more tolerant of other races and religions over our lives. I don’t think most of us over 50 can claim we grew up in an environment and families and churches that always welcomed different races and cultures. Let us learn to live together not hurl nuclear epitaphs.

#136 BS on 05.13.15 at 12:02 am

When the average price exceeds the level that the local population can pay, even with low intetest rates, where do you think the wealth comes from? You cannot create wealth from working on Starbucks.

The local population owned houses prior to the bubble. Where does the wealth come from for these new houses? Locals selling their current property and buying a new one with more borrowed money. I will give an example of how a local with a modest income can buy a multi $million house.

Local couple making $65K each ($130K combined) who bought a house in Burnaby in 2003 for $500K with 20% down. Now 12 years later they paid off half the $400K mortgage so they owe $200K. Interest rates are now at 2.6% compared to 6% in 2003 so they can now afford to borrow a lot more money even at the same $130K combined income. Their house they bought in 2003 for $500K is now worth $1.4 million. They have $1.2 million in equity and now with lower rates they can borrow twice as much money and maintain the same payment. They can also now buy a house with both a suite and laneway house as a mortgage helper and borrow more money with the same income. Lets do the math on what they can afford now with the same $65K (each) income they had in 2003:

– 1.2 million in equity ($1.15 million after RE commissions for a down payment)
– With current interest rates they can qualify for a $700 mortgage without suite income.
– If they buy a house with a laneway house and basement suite they can easily qualify for a $800K plus mortgage.

Bottom line this couple making a modest $65K each can now buy a $2 million house and it is just as affordable as the $500K house they bought in 2003.

What the HAM theorists fail to realize is all of the houses in Metro Vancouver were owned by locals prior to the bubble. It is the locals who are selling and using the proceeds of the bloated sale price to buy their next house. They don’t need income, they just need the massive tax free gain they got on their current RE plus low rates. You can edit the numbers and have a professional couple with $100K each income buying a $3 million house or a couple with the same income who only owned a condo buying a $1.2 million house. Bottom line the appreciation of RE with low rates is providing locals the means to buy at these prices even with modest incomes. Only 40% of buyers are first time buyers. The rest are move up buyers who are locals.

#137 Shawn on 05.13.15 at 12:04 am

Careful about wishing for lower house prices

What would eager house-lusting young’uns do if house prices melted 30% over the next three years.

My guess is they would stop buying and the cheaper houses got the more hesitant they would be to buy.

So who exactly would gain by this? (Just the few buyers at the lower prices, that’s who)

#138 Christopher Lackey on 05.13.15 at 12:14 am

This meme is really sad. All the stats in the world aren’t going to silence people’s worst instincts. Capital is mobile, period. Just ask all the croatians who saw Brits come and turn their seaside towns into their own personal muskoka. It’s not like they’re not going to shop at local stores when they’re there.

#139 SWL1976 on 05.13.15 at 12:15 am

The last line of the video sums up our modern world…

For the time being… The image has become the reality

#140 Pro HAM on 05.13.15 at 12:23 am

DELETED

#141 Dave on 05.13.15 at 12:28 am

“Shanghai-based Dan Scarrow, of Macdonald Realty Ltd., has followed the money and is among the few real estate executives speaking candidly about the transformative impact of Chinese wealth on Vancouver.

“Our analysis last year indicated that roughly one-third of buyers in Vancouver had some connection to mainland China,” Scarrow said. “China represents the greatest rapid accumulation of wealth in the history of the planet. That wealth is now spreading out of China and around the globe. It will transform not just Vancouver, but the entire world.”

“One top Vancouver real estate executive, who did not want to be named, said in 2011 it was estimated that for every $1-million spent on all types of real estate in Vancouver, $300,000 could be attributed to demand from China.”

“My market, the luxury real estate market, is primarily Asian buyers – mostly from mainland China,” said realtor Malcolm Hasman, a partner at Angell Hasman and Associates. Hasman said Asian buyers accounted for roughly 90 percent of sales of properties costing C$5 million(4.57 million US dollar) and more.”

“The influx is also having a trickledown effect as people sell out in prime locations and move to other neighborhoods driving up prices and widening the gap between housing costs and the condition of the local economy.

“We are in this unprecedented situation right now in terms of housing prices and how quickly they’ve escalated. They’ve become completely disconnected from local incomes,” said Geoff Meggs, a Vancouver city councillor.

Macdonald Realty. Yes, credible source. — Garth

#142 SpeakEnglish on 05.13.15 at 12:45 am

I can understand foreign investment into Canada is a necessity. We could assign a particular region for these people to come in and do their thing. We could set up a casino or gambling venue like Macau or Vegas and make them keep on flying in there corrupt black money. Does not look like we are morally concerend about the source of the investment as long as it happens.

#143 SydCixel on 05.13.15 at 12:45 am

“If you want someone to blame, check the mirror.”

Jim Prentice said the same thing, and look what happened to him.

#144 Mr.Hulot on 05.13.15 at 12:48 am

#102 Mr.Hulot on 05.12.15 at 10:00 pm

Those immigrants you talk of are most welcome here as those are the people that built this country. What we don’t need are immigrants of “convenience” with no real commitment to stay here who buy RE to park their money here and in turn drive up the price for everyone else.

#145 TRT on 05.13.15 at 12:49 am

Thanks for defending my cousin Garth. Builder in West Van who has an Asian realtor. Builds $5 million dollar homes and sells to … Ahem… Locals. Lol

If you ever come to speak in Vancouver, I can bring him out. 100% of his sales are to recent immigrants or to parents of foreign students.

#146 souvereigninternational on 05.13.15 at 12:58 am

Shift is happening. My Cousins realtor in Ajax warns of decline in real estate market. First -Buy, Buy, Buy – before you are priced out. Now – Sell, Sell, Sell – It will go down. Playing the human psychology with any angle, as long you get the comish.

#147 Jonathan B Worth on 05.13.15 at 1:00 am

Wow…out come the pitch forks.

Everyone wants to point fingers.

http://news.nationalpost.com/news/canada/richmond-couple-wants-to-talk-to-their-neighbours-about-trimming-a-hedge-but-nobodys-home-ever

#148 k on 05.13.15 at 1:12 am

Garth

I love you very much ….however you don’t understand the Asian economic invasion of Vancouver, They don’t care about Victoria. You can’t use the old rules. They want out of China to launder their money. WAKE UP !

#149 MoneyfromA$ia on 05.13.15 at 1:15 am

Garth, that small percentage of buyers that you claim is HAM are not just buying one property, they are buying multiple properties!

#150 Bobs ur uncle on 05.13.15 at 1:18 am

there exists zero statistical evidence foreign money has any meaningful influence on the overall market.

***

Could just as easily say:

there exists zero statistical evidence foreign money has *not had* meaningful influence on the overall market.

cause there’s no stats for Van. Which is clearly different from Victoria. Like comparing TO living to Hamilton. Which you would deride and belittle if it came from anyone else. Cmon Garth, without stats, its just BS conjecture on either side. Either way, doesn’t mean the local house humpers aren’t the source of their own problems. If you buy more than you can afford, that’s on you.

#151 NEVER GIVE UP on 05.13.15 at 1:49 am

Real estate is a religion in China.
It is so bad there, my Chinese employee (in China) told me that in small towns and all rural areas, people outside of the area cannot even buy a property there at any price.
You must show your residency card which is tied to your birth place. If it does not match you cannot buy.
Even the Chinese know better than to allow speculative buying on residential and farm property.
They are laughing at our naiveté.
The only places you can speculate in China is in Big Cities.
We are the greater fools that believe in unbridled free capitalism.
I only suits our governments right now because they are benefiting with higher tax assessments and easy incumbent election results when values are going up.
So who cares who gets hurt?
These peons from Vancouver who are starting on the property ladder don’t matter a tinkers dime to a politician who needs real votes from HOMEOWNERS who have benefited in the greatest property bubble the world has ever seen!
Even the Americans do not really believe in Free Enterprise or Capitalism. Every sector of the economy is gamed and has its Government friends who have first pick.
Why are we so nice? I say tax the hell out of any home that is not owner occupied.
Make it proveable.
Property is not pork bellies. We need it to live. It is as vital as food. It should not be allowed to become a futures market.
People will try to game this as well.
My employee in China said that she gets tickets for speeding and illegal left turns etc. sent to her in the mail by photo radar etc.
If you get too many points on your licence in China you will lose your licence. So to game this you go on China’s Craigslist equivalent and pay someone who is willing to take the points for your ticket! It costs about $100.00 of our money to pay someone to do this for you.
My point is Asia is full of cultures of people who look to the rules as something to game for preferential treatment. From Jails to Tickets to Real Estate transactions. If you can find a workaround you win extra.
I hope you do not deem this as racist. I am only telling the absolute factual truth about how things really are.

#152 Cdilla on 05.13.15 at 1:50 am

Garth,

I have praised this blog and sent it out to a lot of my peers, but every time you post these “head in the sand” articles it saddens me.

Anytime I send out your blog link, I have to add the Caveat “but he refuses to acknowledge foreign influence on prices”.

If you ran for office (ever again) I honestly wouldn’t vote for you, just because you can’t take a step back and say “maybe”, just “maybe” there is offshore cash playing a role in the Canadian housing market.

I’ve said clearly there for foreign buyers in all markets, and often concentrated in pockets. But they are not responsible for dumb overall prices. I’m sure there are lots of people who would mold their opinion to yours in order to gain your vote. Not me. — Garth

#153 By next Spring... on 05.13.15 at 1:53 am

… the RE markets in Canada will have started to correct in ernest including the bubbly trophy markets of Vancouver and Toronto.

Key is to sell at the right time and taking money off the table when the selling is good. Alas, judging by the listing volume the majority of mortgage owners are not taking the equity out as they have fallen in love with their debt anchors.

Americans had less foresight and less warning in 2008 to escape the crash there than Canadians have today. Equity of 30% or more is only good when it’s realized.

Prices will be lower by 30% over the course of 2 years.

#154 Bobby on 05.13.15 at 1:57 am

Sorry Garth, but you have lost me on this one. I work in Hong Kong and the SCMP is full of articles about corrupt Chinese officials getting caught moving money out of China into safe havens such as Canada. One article spoke of $20 billion of unaccounted money in one year alone. What astute business man bids up a crack house in Vancouver unless they don’t care what they sell it for. Yes, there is a lot of laundered overseas money pushing up Vancouver real estate. Sadly, no one is willing to admit it. I recently read a U.S. Article about the lax standards in Canada in determining the origins of property funds. What will change the market dramatically is new disclosure rules about buying property in Canada. Just watch everyone try to unload their properties.

#155 liquidincalgary on 05.13.15 at 2:26 am

speaking of housing…a colleague has a dozen units in lloydminster alone.

not only have rents dropped by 50%, in this hapless border city, but if you can come up with a damage deposit, your first three months are rent free…wtf?

#156 Kilt on 05.13.15 at 2:58 am

Victoria isn’t Vancouver
The majority of buyers are Canadian. But when you have 30% of the SFH being purchased by foreign money it will affect the market. I’m just surprised when I drive by the million dollar homes with kia’s and old toyota’s that more people are cashing out.
Kilt

#157 cynically on 05.13.15 at 3:04 am

Maybe it’s the term HAM Garth doesn’t take to but it is definitely asian (mainly Chinese ) money causing the very expensive real estate market in Vancouver. You have to live here and be affected by it to cast blame and yet it is not all bad as the local economy prospers a lot, provided the buyers remain here as live-in residents which some or many do not do as reports of dark residences at night for long periods are being reported.
Why Vancouver and not Toronto when the latter is bigger in in just about every measurement – population, business, culture, sports (the New York of Canada) but not in beauty and its proximity to Asia. Then it becomes a retirement city for older, richer Asians who must assimilate with Canadians to be accepted. Better yet become citizens but it is probably too late for that as far as local young people who must extend themselves to be able to afford a decent place to live. They are the ones who are probably hurting and if so have every right to be angry, not with the newcomers but with the government of the day which made the invitation to those same people to buy their way into Canada.
Where it goes from here no one knows but it won’t be those rich house buyers who get hurt when the RE fiasco merde hits the fan.

#158 Khoek on 05.13.15 at 4:06 am

Sorry Garth, agree with you most of time but you’re out to lunch here.

Sure Victoria, Surrey, and Delta are not being driven by foreign buyers but there is no bloody way that locals working in the Vancouver economy are snapping up west side homes for 3, 5, 7, 15 or 25 million dollars. Ppl don’t make that kind of coin here. Christ, the top 1% can’t afford most of those prices.

True, foreign investment isn’t the solution to all our problems and yes we Canadians have certainly contributed with our real estate mania and mountains of cheap debt, but Vancouver wouldn’t be at 11x earnings without the foreign money. To deny that is short sighted.

A full correction in the Vancouver market would require the Canadian debt bubble to blow AND a stop or significant slowdown to the foreign influx of cash, government imposed or otherwise.

#159 Khoek on 05.13.15 at 4:37 am

As a follow-up there are over 20000 homes on the west side valued at over 3 million dollars. To buy the cheapest one you’d need a $600,000 down payment and a monthly income of $40,000 to carry the mortgage and taxes. So basically you’d need to be a in the top 0.5% of Vancouver families to buy the cheapest home. There are only 10,000 such families in Vancouver, and a bunch of them live live somewhere other than the west side. The math doesn’t add up.

As further proof I’d encourage anyone to walk through any of those west side neighborhoods around dusk and count how many homes have lights on. I’ve done it. The answer is about 1 in 10. So either these weathly ppl choose to live in the dark or there are large numbers of them that don’t live there.

#160 Joe Calgary on 05.13.15 at 4:57 am

Waiting for the plane from Frankfurt to Calgary. Nothing but Asians, East Indians and Arabs at any gate going to Canada. We are screwed.

You disgust me. Stay in Frankfurt. — Garth

#161 Italians love realestate on 05.13.15 at 6:31 am

#102 Mr.Hulot on 05.12.15 at 10:00 pm
#94 Italians love real estate on 05.12.15 at 9:39 pm

Paysan, how much did your parents have in their pockets when they came to Canada? I know my dad came here with $300 in 1956, not millions to invest in Canadian RE without even a commitment to live here.

Most immigrants to Canada today are not wealthy people. But, like your parents, they are courageous and deserve to be welcomed. — Garth

Your parents had 300 hundred bucks more than mine did then mr .hulot.

They then went on to make their millions in real estate.

And now you’d like to deny others the same opportunity? Telling. — Garth

#162 the jaguar on 05.13.15 at 7:18 am

Garth:
Would be curious to know if you have read the recent articles written by Terry Glavin in the National Post on the Chinese governments efforts and intent to recapture funds removed illegally from the country and its possible impact on the high end home purchases in the lower mainland (?). And then there is a very tiny article in todays Post (page A6) about proposed legislation called the ‘Removal of Foreign Criminals Act’. Is it just me that wonders at the timing?

#163 Ralph Cramdown on 05.13.15 at 7:23 am

#132 BS — “I will give an example of how a local with a modest income can buy a multi $million house.”

Your numbers work, except they don’t explain who’s buying the house that they’re selling. A couple in a position similar to theirs when they bought it ($130k income in 2003 inflated to today’s equivalent wage, and 20% downpayment saved) wouldn’t qualify for the mortgage.

#164 Hair Guy on 05.13.15 at 7:45 am

What people comparing Garth to Prentice seem to be ignoring is that when Prentice talked about men and mirrors, he was seen to be ducking his own share of the responsibility. Garth, on the other hand, doesn’t share any responsibility for what’s happening with Vancouver real estate. If he did, it wouldn’t be happening.

#165 Chris on 05.13.15 at 8:16 am

I don’t really see the drawback of restrictions on foreign buyers from a logic perspective.

If there is no critical mass of foreign/offshore buyers distorting the market, then logically restrictions would have very little discernible effect on the market.

So there’s really no downside to implementing them, apart from a bit of additional red tape. And I don’t think a little more red tape will slow the real estate mania to any appreciable extent.

(I’m aware that effective restrictions would be tricky to implement, since foreign purchases could (and probably are) being made through corporations or local intermediaries, but there are ways around this, just like CRA’s attribution rules deal with similar issues for tax purposes.)

More government overhead, less investment, no effect on house prices. Brilliant strategy. — Garth

#166 BlackDog on 05.13.15 at 8:33 am

Statistics are used much like a drunk Smoking Man uses a lamppost: for support, not illumination.

#167 Italians love real estate on 05.13.15 at 8:45 am

e on 05.13.15 at 6:31 am
#102 Mr.Hulot on 05.12.15 at 10:00 pm
#94 Italians love real estate on 05.12.15 at 9:39 pm

Paysan, how much did your parents have in their pockets when they came to Canada? I know my dad came here with $300 in 1956, not millions to invest in Canadian RE without even a commitment to live here.

Most immigrants to Canada today are not wealthy people. But, like your parents, they are courageous and deserve to be welcomed. — Garth

Your parents had 300 hundred bucks more than mine did then mr .hulot.

They then went on to make their millions in real estate.

And now you’d like to deny others the same opportunity? Telling. — Garth

Now seriously Garth ,show me where I said that I did not want to accord them the same opportunity?

However ,Much like the comment by mr hulot at #132, they are not coming over here penniless like my parents did but with enough financial means to cause the RE increases we are seeing.

Even so and unlike others who would have restrictions placed , I welcome the dollars to our economy , provided they are legally gotten proceeds.

#168 H on 05.13.15 at 8:45 am

Did it snow in April too? The idea if the Fed raising rates in the US is laughable.

__________________________________
U.S. retail sales were unchanged in April as households cut back on purchases of automobiles and other big-ticket items, suggesting the economy was struggling to make a strong rebound after barely growing in the first quarter.

Economists polled by Reuters had forecast retail sales rising 0.2 percent last month.

#169 Italians love real estate on 05.13.15 at 8:47 am

Sorry meant mr hulot at #142

#170 pBrasseur on 05.13.15 at 8:55 am

It’s not just about foreign money it’s about cultural differences between different ethnic groups.

For example Chinese, whether they hold a Canadian passport or not are particularly fond of RE. We live here, we know it. In all our big cities there are development projects targeted specifically at them. There may be several explanations for that including the RE frenzy going on is the mother land. It doesn’t really matter, it’s just a fact.

Actually this this true of other ethnic groups as well especially those that come from the developing world where governments are notoriously corrupt and financial (paper) assets not trusted, they often prefer hard assets such as land. Who could blame them.

Those are just interesting facts if you want to understand this bubble, which is not to say that there are no other even more important facts that do not involve ethnicity at all.

As for foreign money itself I still believe it is significant because all the new deposits enable the Canadian banking system to fabricate new piles of money through credit. This is essential, to multiply the fish you need at least one fish to start with.

Still taxing foreign money is a dumb solution, foreign money comes here because WE have a problem, not the other way around.

You said: “Chinese, whether they hold a Canadian passport or not…” A person with a Canadian passport is Canadian. ‘Chinese’ is a nationality, not a racial description. The comingling of these concepts belies a prejudice running deep in Vancouver and elsewhere in our society. Sad. — Garth

#171 Dee on 05.13.15 at 8:55 am

The level of anti-immigrant racism everywhere lately is both disappointing and scary. I came to this country years ago with less than a thousand dollars (and a lot more than that in debt back home), in part because Canada seemed like a great place to make a life and in part because I had no job prospects in the economy back home.

Today I live in Toronto–one of the great cities–and can’t believe my luck. I have wonderful friends, a supportive community I volunteer in, am a citizen, make six figures, and have no debt (here or in my birth country). In fact, I could be one of those “foreigners” buying real estate, except I’ve read enough to know that’s a bad idea here these days.

Would you all rather that me, the five figures per year I pay in taxes, and (most especially for the somewhat older crowd) the decades I’ll be paying for your retirement after most of you saved nothing, have stayed home?

Or is this all ok because I’m white and come from an English-as-first-language country?

#172 Ralph Cramdown on 05.13.15 at 9:20 am

More government overhead, less investment, no effect on house prices. Brilliant strategy.

This theory, that Canada (household income US$65+) needs* investment income from China (household income US$10k) in order to house all our citizens is pretty freakin’ bizarre.

* – Or that it is even helpful, if not necessary.

#173 -=jwk=- on 05.13.15 at 9:21 am

@#3 We’re not talking about people, we are talking about money. A chunk of the money is originating here (in the form of mortgages,) and a chunk of the money is originating offshore (even in cases where it looks like a “local” person has made the purchase.)

That is not debatable – why are we even having this debate?
————————-

Quoted for truth. Through my Chinese wife we have many friends that were drop shipped here from China. All offshore money, all cash. Of course they are ‘local’ buyers because they just bought a local address! Duh!

#174 -=jwk=- on 05.13.15 at 9:22 am

@ #169
Dee, you too will be outbid by a foreigner who has no intentions to stay here and make this his home …just wait your time will come…

#175 Ralph Cramdown on 05.13.15 at 9:24 am

#169 Dee — “Or is this all ok because I’m white and come from an English-as-first-language country?”

The primary issue for many of us is people who don’t actually immigrate, work, invest and pay taxes here, but park their money here while doing all of the above elsewhere. Their skin colour isn’t ‘white,’ it’s ‘invisible.’

#176 Rabbit One on 05.13.15 at 9:25 am

Often Italians are described as Real Estate lovers, and it is ok, (regardless of the Citizenship status) but how come it is not ok if someone mention about other kind?

#177 webfeat on 05.13.15 at 9:51 am

The racism in this thread makes me sad.

#178 John Prine on 05.13.15 at 10:03 am

A realtor acquaintance in Vancouver had a client who, when his listing expired said he was going to try and sell privately to save on commission. House was in poor condition with 3 questionable additions (tear down)in the Norgate neighbourhood The house went on Craigslist for a little over $900,000 and was sold in a matter of days for $4,000 over asking, there were no conditions and no home inspection, the buyers said they didn’t care as they were agents for mainland Chinese.

Greater fools. — Garth

#179 James on 05.13.15 at 10:06 am

Singapore and HK introduced higher stamp duties on foreign purchases of local property in order to cool the market. And it worked.

http://www.propertywire.com/news/europe/foreign-buyers-most-expensive-2015011210028.html

#180 saskatoon on 05.13.15 at 10:12 am

“The doctrine of state multiculturalism has failed and will be no longer be state policy.”

– Prime Minister David Cameron

Is David Cameron racist too, Garth?

#181 waiting on the westcoast on 05.13.15 at 10:21 am

There were ~850 houses listed for over $3M. There are ~67,000 detached homes in Vancouver. If HAM is buying up the bulk of that luxury housing, it is not translating into a massive migration of locals into lower priced homes or requiring a much higher price point.

The market is overheating due to high local ownership (thanks Mark for the reminder of the 70% metric) hanging onto properties (only ~10k listings versus 16-18k normally) and idiots who are buying due to fear of loss. The sheep want to be fleeced.

SM – while I agree with your positive vibe premise in general, there are lots of examples of the negative ilk amassing wealth/success/etc… Hate and fear bind people together to accomplish things as well (even very bad things).

#182 Holy Crap Wheres The Tylenol on 05.13.15 at 10:23 am

#101 Smoking Man on 05.12.15 at 9:57 pm
#93 waiting on the westcoast on 05.12.15 at 9:37 pm“As socialists, we are opponents of the Jews, because we see in the Hebrews the incarnation of capitalism, of the misuse of the nation’s goods.” Joseph Goebbels
……………………………………………………………
Put this one in the bank,
positive productive people give off long wavelengths to the universe,that attracks and luck always finds them.
Negative unproductive slime sucking complaines give off short wave lenghts, which attracts bad luck.
Who the fk is Joseph Goebbels compared to Dr Smoking Man.
PhD in ?
____________________________________________
Joseph Goebbels was a German politician and Reich Minister of Propaganda in Nazi Germany from 1933 to 1945. As one of Adolf Hitler’s closest associates and most devoted followers, he was known for his zealous orations and deep and virulent antisemitism, which led to his strongly supporting the extermination of the Jews when the Nazi leadership developed their “Final Solution”. So compared to Dr Joseph Goebbels vs Dr Smoking Man, no matter how virulent your opinions are you are simply not in the same class of person. Thank God for that. Otherwise we have to give you the coup de grâce.

#183 Holy Crap Wheres The Tylenol on 05.13.15 at 10:26 am

Sounds like the Vancouverites have a NIBY issue! Get over it Vancouver.

#184 Smoking Man on 05.13.15 at 10:26 am

#164 BlackDog on 05.13.15 at 8:33 am
Statistics are used much like a drunk Smoking Man uses a lamppost: for support, not illumination.
….

To bloody hungover to determine if this was an insult, or compliment.

Carry on.

#185 pBrasseur on 05.13.15 at 10:33 am

You said: “Chinese, whether they hold a Canadian passport or not…” A person with a Canadian passport is Canadian. ‘Chinese’ is a nationality, not a racial description. The comingling of these concepts belies a prejudice running deep in Vancouver and elsewhere in our society. Sad. — Garth

I think you’re overreacting a bit here sir! The «people of Chinese origin» that I know call themselves «Chinese » as a shortcut as well. We all know that a «person of Chinese origin» holding a passport in a Canadian.

In Canada some ethnic groups tend (at least in the first generations) to hang out more among themselves and replicate the cultural trends from their country of origin, I guess it has always been the case but maybe more today because the cultural differences are deeper. For that reason the «people of Chinese origin» appear to like RE very much, BTW it’s not just Vancouver also true in Montreal. The epicentres of the RE bubble in Canada are places where immigration is most notable.

I realize it’s a slippery subject but political correctness should not prevent us from discussing these things.

#186 waiting on the westcoast on 05.13.15 at 10:36 am

Garth – when you write posts like this… do you…

1. Sit back and maniacally laugh waiting to see the resulting carnage.

2. Pull out your lab notebook and measure the resulting percentage of the various arguments for a PhD thesis that you have been working on.

3. Check yourself for bruises and realizing they have all healed, go out into the world a throw a few rocks at glass houses…

Just curious… ;-)

#187 pBrasseur on 05.13.15 at 10:38 am

Most immigrants to Canada today are not wealthy people. Garth

True. But in Canada you don’t need to be wealthy to buy real-estate.

#188 Bottoms_Up on 05.13.15 at 10:38 am

let’s not forget within the percentages originating from BC and Local, there could be foreign money flowing in to residents.

How is this accounted for?

#189 H on 05.13.15 at 10:49 am

U.S. crude inventories fell by 2.2 million barrels in the last week, compared with analysts’ expectations for an increase of 386,000 barrels, according to a report by the Energy Information Administration.

Crude stocks at the Cushing, Oklahoma, delivery hub fell by 990,000 barrels, EIA said.

_________________________
What the above means:

“we expected Cushings to reach capacity”-didn’t happen

“we expected inventory to go up 386,000 barrels. Went down by 2.2 million.- a miscalculation of oil forecast for a 7 day period of 2.58 million barrels.

Sure, forecasts for 10 years out should be spot on. The numbers are so wrong for just 7 days out its comical. As mentioned, you will see $100 + oil by summer. And Goldman Sachs and Citi will be the first ones to call it.

#190 Calgary Rip Off on 05.13.15 at 10:55 am

Chinese and Asians are smart. They have to be to survive. Play some games at http://www.wuzheng.me (Go game) and you quickly realize that the thinking is incomprehensible. Why? In mainland China to be human is like being an ant. Just try and survive. And people wonder why Asians are buying up the real estate. Guess what if you are in China your grades are posted for everyone to see and if you dont make the cut, you end up working in a factory. And likely that factory worker is smarter than the Oil guy in Calgary making $300K+/year. To the average Chinese, life in Canada is utopia. People complain constantly about irrelevant nonsense when in reality they are living like kings. Do you have to worry about clean water and non poisonous food? Have to worry about being cut in two by a sword or shot to death? Most of these worries dont exist yet the human element of viciousness remains and is sublimated into covert hostility where it isnt what is said but what isnt that you have to watch out for. Instead of an attitude of gratitude people continually complain and whine about what they dont have rather than maximizing what they do. You have two arms, two legs, two eyes and a brain? What is your excuse?

#191 Mr.Hulot on 05.13.15 at 10:59 am

#139

“The influx is also having a trickledown effect as people sell out in prime locations and move to other neighborhoods driving up prices and widening the gap between housing costs and the condition of the local economy.”

With all due respect, Garth, the statement above from MacDonald Realty says it all. Or an analogy is when the best cuts of meat are being bought at any price by people who can afford them, the other lesser meats get bid up too. This is the reality.

#192 cramar on 05.13.15 at 10:59 am

#174 Rabbit One on 05.13.15 at 9:25 am
Often Italians are described as Real Estate lovers, and it is ok, (regardless of the Citizenship status) but how come it is not ok if someone mention about other kind?

———–

So are my wife’s Greek family. Italians, Greeks, Portuguese, Croatian, Czech, Poles, Chinese, Nigerian, Indians, Pakistani, Canadians, etc., etc., are all Real Estate lovers. In short, all people regardless of race, creed, colour, or origin, all desire owning housing as the right of passage into the good life. It is human nature, and we all have it.

#193 bill on 05.13.15 at 11:06 am

if ‘they’ are dumb enough to fall for the HAM myth
are we at all surprised ‘they’ are xenophobic as well?

#194 Babblemaster on 05.13.15 at 11:22 am

“Surrey or Unionville – and in some pockets have formed strong communities and a pervasive presence – there’s no statistical evidence the fear is justified.” – Garth

———————————————————-

Of course there isn’t any such statistical evidence! If the required data for such evidence was collected, collated, processed and disemminated, it would be considered racist.

#195 waiting on the westcoast on 05.13.15 at 11:26 am

I remember…

http://www.theglobeandmail.com/report-on-business/economy/housing/remember-when-what-have-we-learned-from-80s-interest-rates/article24398735/?service=mobile

#196 Josh in Calgary on 05.13.15 at 11:30 am

Linda,
“China has so many people, I have difficulty believing they could have any empty housing.”

You need to find the videos of the Chinese Ghost towns then. Developers there have built whole cities in anticipation of the masses moving in … then no one does because the locals can’t afford it.

As for all of you HAM supporters, can you answer one simple question. Why would these ultra rich (or even modestly rich) chinese people want to park $1 million plus at a time into Vancouver real estate at little to no return? Sure maybe there’s a few stupid rich guys out there, but not enough to support over valuation in an entire market. Most rich people are rich for a reason and want to invest in actual business ventures. Prices have departed from the intrinsic value of the house, which is either to provide a living space for your family or to collect a rent. Beyond that it’s sheer speculation. You can make short term, high risk money on speculation, but it’s a poor long term strategy.

#197 Rebecca on 05.13.15 at 11:31 am

I used to believe you about HAM not being a major influence in Vancouver, Garth. Then I moved to Vancouver, and now I am not sure. Flaunting Victoria stats is completely out of touch.

#198 AB Boxster on 05.13.15 at 11:34 am

I love how the race card is continually played on your blog Garth.

Canada is the most welcoming, open society in the in world. The Canadian culture (yes I believe there actually is one given that our country is almost 150 years old) has basis in European influence (English and French and native initially) and in more recent years stronger influence from Asian cultures. The pace of cultural change in Canada has not been without its challenges.

However, one overriding Canadian value, that I strongly believe in, is the principle of equality of opportunity.
I think that this is a core Canadian value, and I also think it is one reason why immigrants (other than refugees coming from some hellhole) are attracted to this country.

Herein lies the conunudrum.

Over the past several decades global wealth of individuals has increased massively. This is not a bad thing.
How does this impact me directly if there is a growing middle class or wealthy class in a country such as China or Russia? Directly, it does not. Good for them for succeeding in their country.

However, while individual wealth in the world has increased, the political systems in many of these countries are corrupt or unstable. So wealthy individuals seek a safe haven. Makes sense.

Are large amounts of offshore wealth being parked in Canada? Is this wealth being used to purchase property and drive up prices in this country? Does this wealth (accumulated under foreign systems, with vastly different legal and business rules) have an impact on the opportunity of Canadians?

Your position continues to be:

1. Show me the stats.
2. All wealth coming into this country is a good thing, regardless.
3. Those who question the issue and effect and impact are racist.

My question is this:
1. Why do we not make any effort to track these stats to understand the issue and effects?

I am not convinced that having massive amounts of offshore wealth coming into my country is a good thing.
Why? Because today, money buys opportunity.

And if the opportunities that are available in my country (opportunity to buy a home, get a decent education, get a decent job, etc) is compromised because massive amounts of wealth that are created in some other country and then parked in Canada, then I have a problem with this.
(Remember, Canadians citizens, have to play in Canada, under Canadian rules and under Canadian laws and live within Canadian economies)

So, I will continue to welcome immigrants from all over the world who want to participate in one of the most open cultures in the world, and contribute to the growth of our nation.

But I will also continue to question:
Is my country being bought up by offshore money?
If there are large amounts of offshore money being laundered into Canada.
If so, explain how this contributes to the stability, growth, social justice or opportunity in my country?

And frankly, if asking those questions makes me ‘racist’, then I will happily wear that badge.

#199 Non-smoker man on 05.13.15 at 11:39 am

Love ya, Garth.

I get what you’re saying, if RE agents make you believe that HAM is at the table in every bidding process, then, regardless of whether or not HAM is actually at the table, the prices goes up. This is true.

Though I agree that “there’s no statistical evidence the fear is justified”, there is also no statistical data that the fear is not justified. Often anecdotal evidence can be misleading. However, data on demographics of Vancouver residents is not anecdotal. It’s not racist to say that the Asian-born population in Vancouver continues to escalate. This is a fact.

Victoria is a poor example and you don’t have to be a demographics expert to understand that. Furthermore, the price escalation in one city don’t have to be driven by the same things in all cities. For instance, HAM certainly isn’t cause escalation in Fort SMackMurray, Edmonton or Calgary……but, in Vancouver, what is causing it? It ain’t jobs or salaries, that’s for sure.

Additionally, HAM doesn’t have to be a large piece of the pie to drive up house prices. They can be <10% and still have a substantial effect on the market mentality, especially impacting how people have to shop for homes, the bidding process and set the bars on what it takes to make WINNING bids on homes.

In essence, HAMS don't have to win every single bid to drive up market prices, they just have to be at the table. It's just like an auction. If there's someone willing to bid higher, they don't have to WIN the bid to have escalated the prices higher.

#200 Doug B on 05.13.15 at 11:45 am

In considering the outrageous house prices in Vancouver, it seems everyone overlooks the suburbs. I have a relative that just sold a condo in Langley, for 30 grand less than he paid for it 4 years ago. The condo market in the burbs has prices dropping like crazy. Can single family homes be far behind???

#201 Alberta is FINISHED on 05.13.15 at 11:46 am

http://www.cbc.ca/news/canada/calgary/trican-oilfield-service-firm-cuts-2-000-jobs-suspends-dividends-1.3072335

#202 Alberta is FINISHED on 05.13.15 at 11:48 am

You want more reality Alberta? Here it is. Alberta is FINISHED.

http://www.cbc.ca/news/business/global-oil-glut-grows-to-2-million-barrels-a-day-as-opec-pumps-more-1.3072423

#203 Prufrock on 05.13.15 at 11:52 am

It seems to me one of the points of the video is that there IS a real estate bubble in China and a lot of investment money is sloshing around. Can we not infer from that that a considerable amount of that money is sloshing into Vancouver?

To deny that foreign money (it has nothing to do with race) is affecting the Vancouver market seems absurd. As anyone who lives here knows, it affected it in the late 80’s with the handover of Hong Kong, and it is doing so again. Do locals participate in the frenzy? Absolutely, but that doesn’t mean that foreign money isn’t a factor.

#204 Vamanos Pest on 05.13.15 at 12:07 pm

Couldn’t live with myself if I didn’t speak out against this. The ignorant and xenophobic comments today are a disgrace. The sad part is, I know we’re all better than this.

I see now that our house lust has not only led to bad financial decisions, it has made us ugly. We’ve become so entitled that we interpret an inability to own a house as some grand injustice. That something must be wrong. That something must be done. That someone must be to blame.

What do you think owning a house is going to do for you? What need inside you will it fill? What desire could be so strong that you’d allow it to let you hate?

IT’S JUST A [email protected]&#ING HOUSE!

Sad. Ignorant. Shameful.

#205 Gen X Confessions on 05.13.15 at 12:08 pm

#23 takla on 05.12.15 at 7:54 pm

“I know what piss’s of the locals is the unoccupied homes that have been sold to investers from all the groups I mentioned.I know someone who works for Canada post delivery and many hi-end homes in the west end have no occupants,just landscapers..

So what? How would forcing occupancy make one iota of difference to overall market prices? — Garth”

Don’t empty homes mess with the supply side of the equation? Like a game of musical chairs, where there are less and less homes to live in? At the very least it would mess with the rental market. If all these houses were to go on the rental market, wouldn’t rents go down and owners get a little less picky about who their tenants are, thus making it easier for people to resist their home-buying urges? I agree with you, Garth, that the HAM debate is not the real issue, but I do wonder about the effect of pure speculation and empty homes.

#206 Timing is Everything on 05.13.15 at 12:20 pm

Just to be clear…City of Victoria population is only 80,000

http://tinyurl.com/2m8uax

I don’t know why this post does not get posted??
City of Victoria is a very small sample size wrt the City of Vancouver.

Not really comparable at all IMO.

Data is data. And you don’t have any. — Garth

#207 ILoveCharts on 05.13.15 at 12:22 pm

For possibly the first time…. Christy Clark – Premier of BC is now stating that foreign investment/ownership is driving up prices and any policy that would have an impact on them would drop prices.

http://www.cbc.ca/news/canada/british-columbia/b-c-premier-christy-clark-opposed-to-taxing-foreign-homeowners-1.3072443

‘”By moving foreign owners out of the market housing prices will drop,” she said.’

Garth – the number of people that you are saying are incompetent or liars increases by the day. It’s starting to look like Garth against the world out here in BC.

#208 Toronto_CA on 05.13.15 at 12:25 pm

Wow. A hot topic to be sure.

I think we can all agree that it is not great when large amounts of people who live in a place where corruption is ubiquitous take ill-gotten (or “hot”) money and launder that money by purchasing real estate in markets and driving up the prices for locals who earn their money in ethical and legal ways.

We just disagree here what effect that has in Canada, in particular in markets like the Vancouver area and pockets of the GTA.

As Garth has pointed out many, many, many times, the foxes are guarding the hen house and no reliable data exists on this largely unregulated industry we call “Real Estate”. My own suspicion, based on what has happened, is that the effects are stronger than Garth believes; not just directly but indirectly as locals try to compete with this and are drawn in by media stories of bungalows going for $400k over asking when purchased by an foreign university student (from China of all places). Would that count as a local sale if its in her name, even if the student funded not a cent of it herself? I suspect so.

#209 Randy Randerson on 05.13.15 at 12:27 pm

Every time the discussion turn to foreign ownership and HAM, all the racists and disgusting Vancouverites come out of the woodwork. It’s a sad day for Canada when the only way to be considered Canadians is to be white. If you’re Asian/Black/Middle Eastern/etc. and have citizenship, it doesn’t matter.

Racists.

#210 eddy on 05.13.15 at 12:27 pm

The mirror?
This is the system we are given, we opperate within it.
The system originated in the minds of others and was put before us.
Even if we think the system is fraudulent its all we have

#211 Made in BC on 05.13.15 at 12:29 pm

#37 Ralph Cramdown on 05.12.15 at 8:14 pm
#11 Made in BC — “Please come back with a rebuttal with all the taxes outside of income tax in 1982.”

If you want to say something, bring facts, with citations. The original poster put forward a laughable story, which I discredited with about one minute of google-fu.
++++++++++++++++++++++++++++++++++++

I’m not going to encourage your nostalgia by listing off ten pages of taxes here in BC. But nice try….

#212 Mike T. on 05.13.15 at 12:32 pm

#187 H on 05.13.15 at 10:49 am

???

where did you get that from?

http://www.cbc.ca/news/business/global-oil-glut-grows-to-2-million-barrels-a-day-as-opec-pumps-more-1.3072423

see ya at $25

build it up, burn it down

#213 suede on 05.13.15 at 12:33 pm

#134 BS

you nailed the house market in Vancouver.

If anyone wants an explanation of the herd and RE market, staple that post to your wall.

Price/income, etc.. doesn’t mean anything to the herd.

They know two things
1) Equity
2) Monthly mortgage costs

#214 Made in BC on 05.13.15 at 12:33 pm

As for all of you HAM supporters, can you answer one simple question. Why would these ultra rich (or even modestly rich) chinese people want to park $1 million plus at a time into Vancouver real estate at little to no return?
++++++++++++++++++++++++++++++++++++

It’s called diversification. Brazil has the same currency control problem as China. And the same corrupt govt.

#215 waiting on the westcoast on 05.13.15 at 12:36 pm

#189 Mr.Hulot on 05.13.15 at 10:59 am

“With all due respect, Garth, the statement above from MacDonald Realty says it all. Or an analogy is when the best cuts of meat are being bought at any price by people who can afford them, the other lesser meats get bid up too. This is the reality.”

Mr. H – see my post at #179… we are talking about a ~1.25% of the market. This is not some massive wave of buying that are pushing out huge swaths of households… probably 500 households MAX per year in Vancouver.

Like #202 Vamanos Pest points out. Let’s say it is happening… then the smart move is to wait and rent. If enough people realize that the price is too high (for whatever smart or foolish reasons they believe) and decide NOT to buy, the market will correct because there will not be any more “greater fools”.

That is Garth’s point – not that these things are not factors – just irrelevent to the decision to own. That is a personal decision that you have to weigh your personal circumstance, what you are willing to pay and in many cases in Vancouver, what you are willing to sacrifice.

If you are making the decision to buy, don’t blame the market for the price being too high… you are the market.

#216 bdy sktrn on 05.13.15 at 12:39 pm

B.C. Premier Christy Clark is ruling out a tax increase for foreigners buying homes in Metro Vancouver, as an online petition calling for a restriction on foreign investment gathers nearly 18,000 signatures.

Clark said the government is trying to tackle the growing challenge of home ownership in Metro Vancouver, but is ruling out applying an additional tax on foreign buyers.

“That is good for first-time owners, but not for anyone who is counting on the equity in their homes to maybe get a loan or use the money to finance some other projects,” Clark said.
http://www.cbc.ca/news/canada/british-columbia/b-c-premier-christy-clark-opposed-to-taxing-foreign-homeowners-1.3072443

#217 waiting on the westcoast on 05.13.15 at 12:44 pm

#198 Doug B on 05.13.15 at 11:45 am
…”The condo market in the burbs has prices dropping like crazy. Can single family homes be far behind???”

I live in Langley (renting an acreage for 1/2 of the cost of owning) and as your friend pointed out the condo market is doing poorly. SFH have done reasonably well as have acreages and their value continues to climb but not anywhere as steeply as in Van.

Typically the burbs do worse when the market shifts but the price points are significantly lower so while the %’s may be greater, the $ values are not as big of a hit. Ie a SFH going from 500 to 400k in Langley is a 20% loss but only represents 100k of your equity whereas in Van that same loss would be over 200k.

#218 Investorz on 05.13.15 at 12:45 pm

Your 75% local pie slice includes permanent residents.
That includes 3 coworkers who transferred from the our Chinese branch and put their savings along with their parents’ to buy a house in Markam.

There’s nothing illegal about this.
There’s nothing racist about this.

Canadians could do this if they wanted and they kind of are: parents are giving money to their children.

But where you are wrong is saying that foreign money is not pushing prices up. It is.

#219 Mark on 05.13.15 at 12:48 pm

“It seems to me one of the points of the video is that there IS a real estate bubble in China and a lot of investment money is sloshing around. Can we not infer from that that a considerable amount of that money is sloshing into Vancouver?”

No. We can’t infer that. Because the ‘money’ that is available in Vancouver is largely credit. Its not money at all. Its not ‘cash’. Its merely lending institutions being willing to give loans on metrics that weren’t previously available.

Garth has been over this a gazillion times, the people who are immigrating to Canada aren’t bringing much more than enough to buy a used Honda and an appartment rental downpayment and damage deposit. The few examples of offshore buyers in Canadian RE are not enough to move the needle in a market characterized by over 10 million housing units coast to coast.

If true ‘money’ were arriving in Vancouver from overseas, we would see rising incomes in Vancouver (not happening). We would see falling leverage in Vancouver (not happening). We would also see vigorous re-investment in sectors other than housing. Little to none of which is happening.

#220 waiting on the westcoast on 05.13.15 at 12:50 pm

#197 Non-smoker man on 05.13.15 at 11:39 am

…”In essence, HAMS don’t have to win every single bid to drive up market prices, they just have to be at the table. It’s just like an auction. If there’s someone willing to bid higher, they don’t have to WIN the bid to have escalated the prices higher.”

But – why do you have to participate in the auction for a house?

“Because its my birthday and I wants it” – Smeagol

There is a classic car auction in LV every year… I don’t buy any cars there… overpriced for something to get me to work everyday. But for some people, it is their passion, their hobby, or maybe just their penis extension and they are willing to pay much more for it. Doesn’t mean I need to.

I am feisty today… ;-)

#221 eddy on 05.13.15 at 12:53 pm

Thr Cameron quote refers to state policy and doctrine, which is social engineering. As usual language has been perverted beyond recognition.
Where the policy originated is the important question. The politicians job is to sell it to the voters who didn’t ask for it

#222 Carpe Dieam on 05.13.15 at 1:00 pm

Wrong assumption.

All Vancouverites have no clue how to drive in winter!

But hey! I got my first Delete!

#223 VICTORIA TEA PARTY on 05.13.15 at 1:02 pm

A YEAR FROM NOW “THEY’LL BE CRYING UNCLE…”

Those are words from my stock broker of decades, talking to me this morning, when I asked him where interest rates will be heading.

He predicts the Bank of Canada rate will be 1.25 per cent this time next year. No BS.

Those in-hock dolts, whom St. Garth of “We Live In Stupid Times” continues to expound upon daily, are STILL NOT GETTING THE MESSAGE, that the “cheap debt” party is beginning to wane. The musical chairs are being removed one by one; the frog still doesn’t realize he’s about to be boiled into some snobbish yuppie’s sidewalk cafe je ne sais quoi, or what the hell…

THE MARKETS HAVE RUN THE “HURRICANE FLAG” UP THE POLE, IN CASE YOU WERE BUSY GUZZLING YOUR LATEST LATEE…

The world’s major stock markets have been a bit frazzled and volatile in recent trading days for only one reason: THEY ARE BUSY DISCOUNTING THE IMPENDING RATE HIKE TO BE PROMULGATED SOON BY THE OWNER OF THE WORLD’S REIGNING RESERVE CURRENCY, the still good ol’ US of A.

Talk what you will of obvious empirical decline and ragged infrastructure and employment edges, but SOMEONE’S gotta be the world’s chief monetary referee until ANOTHER ONE STEPS IN!

So, good luck to the HGTV moisture-platoons and vacuum-tubed financial wonders (#2 West Coast) out there.

Crying Uncle a year from now, indeed.

It’ll become a “Lifestyle Thang” to be promoted and milked on what, the HGTV net?

Sure.

#224 Visible Minority on 05.13.15 at 1:11 pm

OMG…. Lots of ignorant fools here, I see

I came to Canada , 8 years ago with $5000 dollars.
Me and my wife worked really hard and still do and will always do.
5 Years back after becoming a proud Canadians, bought our first home for $650,000 with 20% down. Its almost paid off and will pay it all off when the mortgage term ends in Sep.

Next 3 years , all the money will go towards kids education funds and towards investments.

There are many friends of mine , in better position than me… all worked hard for it. Very proud of them.

Its not just about earning, its about spending too.
When people like us are not entitled to anything, it changes the perspective and lets you see things clearly.
Its also strength in Numbers… more earning members the better.

People spend all their money on junk and live paycheck to paycheck and complaint about affordability and foreign money. Its your freakin spending that sends money overseas.

Next time you see a visible minority trying to buy a Million dollar home, just think about stories like mine…

#225 Question mark on 05.13.15 at 1:13 pm

From the super hyped Vancouver,
Family of 4 with 140k income befire tax, 15.000 deposited in rrsp evry year, 2.000$ on kids daycares every month.
The question is if we find a 40 years old 450.000$ duplex 30km away from doentown should we jump on it?

#226 HD on 05.13.15 at 1:15 pm

“Mayweather made $210 million for a 36 minute job. That’s $5.8 million a minute—just under $100,000 a second. If you told me I could make $100,000 a second to get smashed in the face continually by Manny Pacquiao, with or without gloves, I’d probably just tough it out in there until he eventually killed me.”

http://waitbutwhy.com/2015/05/floyd-mayweathers-210-million-payout.html

Best,

HD

#227 oh get a grip people on 05.13.15 at 1:22 pm

Yes, interest rate policy + debt has driven up the housing market.

but noting this in conjunction with widespread home owner absenteeism across the Lower Mainland is certainly discussion worthy.

housing is not an investment…it is shelter. if people are going to treat it as an investment, it should be heavily taxed.

Absentee landlords are ruining the Lower Mainland.

who wants to live in an empty neighborhood existing of only idiot realtors pushing for sale signs into the ground and empty houses being flipped back and forth by non-residents?

The sheer incompetence, particularly with the CRA, in dealing with this matter is baffling

#228 bubbleman on 05.13.15 at 1:28 pm

so…..offshore buyers have little to no impact on house prices in yvr yet our premier says she opposes a tax on foreign buyers as it will lower house prices here?

http://www.cbc.ca/news/canada/british-columbia/b-c-premier-christy-clark-opposed-to-taxing-foreign-homeowners-1.3072443

#229 oh get a grip people on 05.13.15 at 1:31 pm

“The hate-foreign-buyers petition is beneath us. So are lawn Asians, fake Chinese realtors and phoney HAM sisters. It’s as ugly here as rented foreigners over there.”

Garth, You are deliberately obfuscating the issue by painting critics of these socially destructive housing policies as “racists” –

The issue is not “hating foreign buyers.” The issue is ensuring housing is treated as shelter, not an investment. It is UNFAIR to subsidize all these absentee landlords who don’t live here/pay tax here/contribute to the community….

The new 10 year Supervisa with China will just further complicate matters, as many of these folks will never be able to get PR now, so will simply buy property with no intention to integrate, as that door has now been closed.

Subsidize them how, exactly? — Garth

#230 Visible Minority on 05.13.15 at 1:38 pm

I am sure there are foreign buyers in Vancouver/ Toronto…. But not to an extent that affects home prices.

Why would they prefer Vancouver/ Toronto , if they can invest in New York ,California , London and so on ?

#231 Rexx Rock on 05.13.15 at 1:40 pm

Yvr and Gta are a booming markets.Supply and demand,good economy and high wages will continue to make these two cities great for future appreciation.Welcome the higher prices,it just means homeowners are getting richer every year.

#232 Ponzius Pilatus on 05.13.15 at 1:40 pm

#174 Rabbit One on 05.13.15 at 9:25 am
Often Italians are described as Real Estate lovers, and it is ok, (regardless of the Citizenship status) but how come it is not ok if someone mention about other kind?

———–

So are my wife’s Greek family. Italians, Greeks, Portuguese, Croatian, Czech, Poles, Chinese, Nigerian, Indians, Pakistani, Canadians, etc., etc., are all Real Estate lovers. In short, all people regardless of race, creed, colour, or origin, all desire owning housing as the right of passage into the good life. It is human nature, and we all have it.
—————
About 55% of Germans, Swiss and Austrians rent.

#233 Italians love real estate on 05.13.15 at 1:43 pm

#192 cramar on 05.13.15 at 10:59 am
#174 Rabbit One on 05.13.15 at 9:25 am
Often Italians are described as Real Estate lovers, and it is ok, (regardless of the Citizenship status) but how come it is not ok if someone mention about other kind?

———–

So are my wife’s Greek family. Italians, Greeks, Portuguese, Croatian, Czech, Poles, Chinese, Nigerian, Indians, Pakistani, Canadians, etc., etc., are all Real Estate lovers. In short, all people regardless of race, creed, colour, or origin, all desire owning housing as the right of passage into the good life. It is human nature, and we all have it.

The reason rabbit nobody objects to comments related to Italians love and involvement with RE is the same reason nobody credible objects to Darwinism and the certainty of evolution. It is simply accepted .nothing racist about it anyway.

Cramer you may be right about all the other groups of people but they are simply dwarfed by the predominance of italian canadians in all facets of RE , from construction, to supply to ownership and all related enterprises.

Let’s face it , practically all the builders in the GTA are italian owned companies minus a small minority’s ..lol

#234 The American on 05.13.15 at 1:49 pm

At #225: Question Mark, yes, you should TOTALLY go for it!!!

#235 Rational Optimist on 05.13.15 at 1:51 pm

Made in BC, can you suggest some good educational material for pre-school-aged children?

#236 cramar on 05.13.15 at 1:51 pm

Cheap shale gas is forecast to create lots of jobs in the U.S. Another sign that bodes well for continued U.S. growth.

http://www.marketwatch.com/story/cheap-shale-gas-to-create-thousands-of-new-plastics-jobs-group-forecasts-2015-05-13

#237 Bottoms_Up on 05.13.15 at 1:52 pm

#226 HD on 05.13.15 at 1:15 pm
——————————————
Trouble with that is he’d likely kill you with the first punch. Your partner might not be happy with your final paycheque ($50,000).

#238 Buffett on 05.13.15 at 1:54 pm

While I do not disagree with anything written in today’s post, I think it’s safe to assume that foreign buyers (whether they are new residents or non-residents) have influenced Vancouver’s market. How else could you explain average incomes of 72k and average house prices of 1000k? Everything Garth said is true – CMHC, bubble mentality, easy credit, have all contributed. But foreign money must also be a contributor, despite there being no statistical evidence at this moment in time. There have been no Facebooks, Microsofts, or Googles founded in Vancouver, nor has Wall Street relocated itself there.

#239 Bottoms_Up on 05.13.15 at 1:56 pm

#208 Toronto_CA on 05.13.15 at 12:25 pm
—————————————————-
You essentially have demand for Vancouver from various places.

Foreign money? Check.
Money laundering from the drug business? Check.
Boomers from across Canada searching for mild weather? Check.
Local families wanting to own a home? Check.

Pretty difficult for local families to compete with the other 3 forces.

#240 Bottoms_Up on 05.13.15 at 2:01 pm

And here’s my anecdotal story, discussions with colleagues with contacts to the mainland (China), Canada is seen as a good place to store wealth, and especially Vancouver, for real estate speculation. They know we have good health care and good schools, so that seals the deal.

#241 HD on 05.13.15 at 2:06 pm

#237 Bottoms_Up on 05.13.15 at 1:52 pm
#226 HD on 05.13.15 at 1:15 pm
——————————————
Trouble with that is he’d likely kill you with the first punch. Your partner might not be happy with your final paycheque ($50,000).

——————————

They were not my words/suggestions. That was a quotation from the article.

Besides, I reckon I could last a full minute against him ;)

Best,

HD

#242 Josh on 05.13.15 at 2:07 pm

http://www.vancouversun.com/Foreign+ownership+highest+downtown+Vancouver+condos+CMHC+report/10658524/story.html

#243 oh get a grip people on 05.13.15 at 2:13 pm

“Subsidize them how, exactly? — Garth”

It’s a matter of ideals. Absentee landowners are antithetical to an engaged citizenry/functioning democracy.

Everything from institutions to public services will decay/thrive based on how engaged the local population is to maintaining this system – i.e. how much skin they have in the game.

So yes, absentee landlords are being subsidized, as they are doing nothing to support the existing institutions/public services they profit off of. Moreover, society bears the opportunity cost of not having a productive social unit in that shelter, who could provide a net social benefit.

Nope, no subsidy there. — Garth

#244 Shawn on 05.13.15 at 2:26 pm

A Banker Complains About Fractional Reserve Banking

Charlie Munger says that to understand an issue, invert it and think about it from the other side.

So let me change the subject and do that with the so-called evil fractional reserve banking.

Imagine I open a bank with a million of my own cash money. Imagine that in a competitive market I can only charge 5% interest. After expenses I can’t make much charging 5% on my money.

I lend $900k to Joe. (I keep 10% back as a cash reserve) Joe buys a farm from Fred and then Fred deposits the money back in my bank. Now Fred expects me to pay 2% on his deposit and I do. Next I lend 90% of Fred’s deposit ($810k) to Bill at 5%. Bill buys a little store from a Jack who is retiring. Jack deposits the $810 in my bank and I pay him 2% interest. I then lend 90% of Jack’s $810 ($729k) to Martin at 5% who buys a big house from David who is moving into a nursing home. David deposits the $729 into my bank and I pay him 2%.

Let’s say all these loans and deposits happen on the first day. At this point the total money (deposits) that people have in my bank are $2,439,000 and I still have $1,000,000 cash because every dollar I loaned out came back in as a deposit. I have loans outstanding totaling also $2,439,000 (all the loans came back as deposits). Total assets (loans plus my cash) are $3,439,000. After deducting the deposits that I owe to customers my equity in the bank remains at $1 million. I have not yet collected or paid any interest because it is still day 1. In a year I would collect 5% of $2,439,000 and pay 2% of the same amount and net 3% or $73,170. My gross return before expenses if 7.3% of my million dollars.

Clearly this system has multiplied my original 1 million of cash and created new money of $2,439,000. (My original $1 million is still in the vault as each time I loaned money out a different customer brought it back and deposited it).

I can keep going until my loans and deposits total $10 million if I need to keep my cash reserve (the one million) at 10% and/or if I need to keep my equity at 10% of total assets. So, I can’t go on forever. But my bank TOGETHER with my customers has multiplied the money 10 times (It’s not loaves and fishes but Jesus would be impressed, I think)

My loan customers may complain they are paying interest on money I created from thin air. I counter that they created it by keeping on bringing it back to deposit again and also I counter that I am paying 2% interest on $2,439,000 of money created from thin air. And ultimately if I keep going on $9 million of created money. And how is that fair to me?

Actually, I think I am pretty happy with the system and so are my loan and my deposit customers. Everyone got what they wanted. Ultimately my $1 million can turn into $9 million of loans. I earn my 3% spread on $9 million for a gross interest profit of $270,000, which is 27% of my equity of one million. After all expenses I earn maybe 15% but I take the risk of defaults.

What’s not to like here? Has the money creation caused inflation? (Not necessarily, no)

#245 Shawn on 05.13.15 at 2:28 pm

I can keep going until my loans and deposits total $10 million if I need to keep my cash reserve (the one million) at 10% and/or if I need to keep my equity at 10% of total assets.

… this should say total $9 million

#246 Holy Crap Wheres The Tylenol on 05.13.15 at 2:32 pm

#189 H on 05.13.15 at 10:49 am

U.S. crude inventories fell by 2.2 million barrels in the last week, compared with analysts’ expectations for an increase of 386,000 barrels, according to a report by the Energy Information Administration.

Crude stocks at the Cushing, Oklahoma, delivery hub fell by 990,000 barrels, EIA said.

_________________________
What the above means:
“we expected Cushings to reach capacity”-didn’t happen
“we expected inventory to go up 386,000 barrels. Went down by 2.2 million.- a miscalculation of oil forecast for a 7 day period of 2.58 million barrels.

Sure, forecasts for 10 years out should be spot on. The numbers are so wrong for just 7 days out its comical. As mentioned, you will see $100 + oil by summer. And Goldman Sachs and Citi will be the first ones to call it.
__________________________________________
Plain and simple America has discovered oil in them thar fields. En ther a drivin pa! Drivin big fancy cars all summa! Told ya’ll before this would happen.

Come and listen to my story
‘Bout a man named Jed
A poor mountaineer,
Barely kept his family fed.
And then one day
He was shootin’ at some food,
And up through the ground came a-bubblin’ crude.

Oil that is, black gold, Texas tea.

Well the first thing you know
Ol’ Jed’s a millionaire,
Kinfolk said “Jed move away from there”.
Said “California’s the place you outta be”.
So they loaded up the truck
And they moved to Beverly.

Hills that is, Swimming pools, movie stars.

Well now it’s time to say
Goodby to Jed and all his kin,
They would like to thank
You folks for kindly droppin’ in.
You’re all invited back again to this locality
To have a heapin’ helpin’ of their hospitality.

Hillbilly that is, sit a spell, take your shoes off.

Y’all come back now, y’hear?

#247 Mark on 05.13.15 at 2:35 pm

“While I do not disagree with anything written in today’s post, I think it’s safe to assume that foreign buyers (whether they are new residents or non-residents) have influenced Vancouver’s market. How else could you explain average incomes of 72k and average house prices of 1000k?”

The willingness of Vancouver’s population to speculate is extreme. Over the past decade, the outlet has been housing. Previously it was in various other ventures, including, but not limited to, the precious metals mining sector and its penny stocks.

What we see a lot of in Vancouver is existing homeowners “moving up”, taking on a lot more debt. In some cases, 25-year amortizations are being written to people within years of retiring (where, in the past, it was verboten for a bank to do an amortization that exceeded the reasonable expectancy of a borrower in the workforce!). Additionally, through programs such as the property tax deferment program, the government itself is also speculating on appreciation.


Everything Garth said is true – CMHC, bubble mentality, easy credit, have all contributed. But foreign money must also be a contributor, despite there being no statistical evidence at this moment in time.

Why? I don’t think anyone denies that there is the occasional foreign purchase (much like occasionally a Canadian will go to Costa Rica or Mexico and make a purchase). But to claim that foreigners are responsible for the bubble is not supported by evidence, and is what Garth et al are trying to fight here.


There have been no Facebooks, Microsofts, or Googles founded in Vancouver, nor has Wall Street relocated itself there.”

But there is the sleeping giant of the precious metals sector which has its administrative/figurative headquarters in Vancouver. A $10k/ounce gold environment, which is quite plausible in the future would certainly put a decent non-credit-driven bid into the Vancouver housing market. Particularly at the high end. Housing and subprime credit just happens to be the antithesis of the precious metals, but just as the speculation has been so violent in housing and credit, such speculative violence could be repeated in other asset classes.

#248 Rainclouds on 05.13.15 at 2:37 pm

#207
‘”By moving foreign owners out of the market housing prices will drop,” she said.’

Did her handlers let her out of the cage again? Lose the muzzle?

As one journalist said about Christy Clarke “as dumb as a potted plant” The Premier hasn’t done anything to dispel this observation.

#249 Victoria Real Estate Update on 05.13.15 at 2:37 pm

# 231 Rexx Rock

“Yvr and Gta are a booming markets.Supply and demand,good economy and high wages will continue to make these two cities great for future appreciation.Welcome the higher prices,it just means homeowners are getting richer every year.”

You keep posting the same basic comment.

You consistently fail to provide any facts to substantiate your claims.

The economies of Toronto and Vancouver are not the reason we are seeing higher house prices in those cities. How can an economy be considered “good” when it requires emergency interest rates to keep it from (potentially) spiralling down?

Higher prices in Vancouver and Toronto are a direct result of lax lending standards (since 2000) and emergency interest rates (since 2009). Eventually those sources of stimulus wear off and house prices fall, as we are seeing in other Canadian cities.

History shows that Vancouver’s housing market has gone through more than one major price decline.

In the early 1980s, prices in Vancouver fell hard and fast (crashed?). (see 7th chart)

In 2008-09 prices in Vancouver fell at a rate of 14.2% PER YEAR (for 10 months) until EMERGENCY interest rates were brought in.

. . . . . Vancouver House Prices. . . . . .
. Percent Below July 2008 Price Level . .
. . . . . . . . . . . . . . . . . . . . . . . . . . .
. .0%. . .*. . . . . . . . . . . . . . . . . . . .
– 1%. . . . . . . . . . . . . . . . . . . . . . . .
– 2%. . . . . . . . . . . . . . . . . . . . . . . .
– 3%. . . . . . . . . . . . . . . . . . . . . . . .
– 4%. . . . . . . . . . . . . . . . . . . . . . . .
– 5%. . . . . . . . . . . . . . . . . . . . . . . .
– 6%. . . . . . . . . . . *. . . . . . . . . . . .
– 7%. . . . . . . . . . . . . . . . . . . . . . . .
– 8%. . . . . . . . . . . . . . . . . . . . . . . .
– 9%. . . . . . . . . . . . . . . . . . . . . . . .
-10%. . . . . . . . . . . . . . . . . . . . . . . .
-11%. . . . . . . . . . . . . . . . . . . . . . . .
-12%. . . . . . . . . . . . . . . . . . . . * . . .
—————————————————————-
. . . . . .July. . . . December. . . . May. . .
. . . . . 2008. . . . . 2008 . . . . . 2009. . .
(source: Teranet’s index)

Wealthy buyers from China didn’t prevent this from happening and they won’t stop Vancouver’s next major price correction.

Toronto’s housing market also has also gone through a major price correction (more on that in another post).

#250 Shawn on 05.13.15 at 2:38 pm

Self Sustaining System

Houses can continually rise in price if they have done so for a while and if everyone expects it to continue. In this situation I don’t worry if I lose my job and can’t pay since I will just sell the house at a profit. Banks think the same way. Lending standards get lax.

Up, up, we go.

Then, eventually something happens and houses stop going up. Big job losses or tighter lending policy could cause it. Suddenly houses stop rising in prices and then start to fall. Now it’s harder to borrow and people start to think house prices might fall. Buyers evaporate. House prices fall some more, a vicious cycle lower could result.

Maybe the cycles take a decade or two. Near the top no one has a fresh memory of how house prices used to fall or at least be flat.

When will this cycle top out? Has it already? It’s hard to say.

Pass the pop corn.

#251 gut check on 05.13.15 at 2:41 pm

It does strike me, though, that if citizens are gathering together to tell the government what they want that the government ought to listen.

Democracy and all that.

Not to mention that if there really aren’t that many foreign buyers it won’t matter at all and the question will be moot.

In short – there are good reasons to implement the requested changes and see what happens.

#252 Made in BC on 05.13.15 at 2:45 pm

#235 Rational Optimist on 05.13.15 at 1:51 pm
Made in BC, can you suggest some good educational material for pre-school-aged children?
+++++++++++++++++++++++++++++++++++

Youtube Baby Einstein. Hundreds of hours of free stuff. The kids love it and will be in grade 3 before then are even 3 years old….

#253 gut check on 05.13.15 at 2:48 pm

“So what? How would forcing occupancy make one iota of difference to overall market prices? — Garth”

Trickle down type of stuff.
if the unit must be occupied then it will be – either by renters or by the owner but lets face it you can’t live in more than one place at one time so… likely renters.

If there were more units for rent then the rental prices would have to come down.

If rental prices came down there would be less demand for units by current renters and by some speculators.

Less demand = lower price.

Trickle down theory 2:
Those investment units which are currently vacant would be rented and the wear and tear & expenses associated with that would discourage some buyers.

forced occupancy or higher taxes for vacant properties (or both, because they are kind of the same thing) is a good option. Why pooh-pooh it?

WADR, that is laughable. — Garth

#254 Mark on 05.13.15 at 2:49 pm

“It is UNFAIR to subsidize all these absentee landlords who don’t live here/pay tax here/contribute to the community….”

Who’s subsidizing whom? If a foreigner comes to Canada, brings a little bit of money (as there’s no evidence that they’re actually bringing any amounts of significance), and buys — they’re going to have to take out a mortgage. So they’re making mortgage payments. They’re paying property taxes but not really using any of the services. The excess that they paid for the house up-front has allowed the vendor to enjoy mostly un-earned profits.

Canadians have an abundance of assets and asset classes they can invest in outside of RE. Not only is Canadian RE not a crown jewel, it is amongst the worst asset class in the entire world for implied return. Canada should be far more worried about foreign entities coming and buying up our real crown jewels, which include our oil and gas industry (ie: Talisman), mines (Inco, Falconbridge), potash, etc. Look at the gold and silver sector right now — you can buy most of the mines for half of long-term highly depreciated book value. One miner I follow even has 80% of its market cap in cash. These assets are valued at nickels and dimes on the dollar. And eventually foreigners might steal those assets away on us, capping the upside to Canadians as well because we were too ignorant to value them properly.

#255 Made in BC on 05.13.15 at 2:50 pm

#224 Visible Minority on 05.13.15 at 1:11 pm
OMG…. Lots of ignorant fools here, I see

I came to Canada , 8 years ago with $5000 dollars.
Me and my wife worked really hard and still do and will always do.
5 Years back after becoming a proud Canadians, bought our first home for $650,000 with 20% down. Its almost paid off and will pay it all off when the mortgage term ends in Sep.
++++++++++++++++++++++++++++++++++

Truly thank you for coming to Canada and making it better with your contributions here. But you are not the issue people are discussing. It’s the guys wiring over 2 million dollars, parking it in an empty house which screws everyone else in many ways explained here many many times.

#256 Victoria Real Estate Update on 05.13.15 at 2:52 pm

#238 Buffett

“Everything Garth said is true – CMHC, bubble mentality, easy credit, have all contributed. But foreign money must also be a contributor, despite there being no statistical evidence at this moment in time.”

Your claim that foreign money has contributed in a significant way to higher house prices in Vancouver is proven false by these two facts:

1. House prices in other (non Ham) Canadian cities have increased as much as in Vancouver.

If foreign money was behind Vancouver’s price run-up, then prices in Vancouver would have appreciated significantly more than in all other (or at least most other) Canadian cities, but that isn’t true.

There are two common reasons for price run-ups in all Canadian cities: lax lending standards (since 2000) and emergency interest rates (since 2009).

2. In 2008-09 prices in Vancouver fell at a rate of 14.2% per year (for 10 months) until emergency interest rates were brought in.

Vancouver experienced a significant housing price correction in recent years while some other Canadian cities didn’t.

If foreign money provided endless housing demand in Vancouver, then prices wouldn’t have gone through a major correction in 2008-09.

#257 Vanecdotal on 05.13.15 at 3:01 pm

So yesterday, Cristy Clark finally acknowledges (after being repeatedly pressed on this issue), that if we “were” to institute curbs on unrestricted foreign RE speculation in BC, home prices will decline. Seems like a resounding “YES”, there IS a significant (how significant remains tbd) influence on foreign investment in local RE, as other posters have pointed out, straight from our Premier’s mouth. Is she then, not a “credible” source on this topic?

Also certainly sounds like our govn’t HAS been tracking the relevant data needed to reach this conclusion, the same data they say keep saying they “don’t have”. Hmmm…

Fear not, however, they are “on it” as far as responsible stewardship of our province when it comes to a balanced approach to foreign investment: http://www.theglobeandmail.com/news/british-columbia/more-foreign-companies-buying-bc-farmland-to-earn-carbon-credits/article24324049/

… or maybe not:

“The B.C. government has acknowledged the amount of farmland being replanted with trees so companies can claim carbon credits is far greater than thought… But in a new fact sheet released this week, the government states that “an additional 7,000 hectares of land” have now been identified on which trees may have been planted for carbon credits.”

Too bad voting “is for suckers” as I’ve been told, just look at Alberta…. oh, wait.

#258 Vanecdotal on 05.13.15 at 3:02 pm

“Christy” Clark, der.

#259 Tornado Bob on 05.13.15 at 3:03 pm

Premier Cristy Clark of BC responds to the ‘restrict foreign buyers’ petition by saying that if we were to do so “prices would drop”.

Pretty strong acknowledgment that foreign buyers….not locals ..are what cause the insane escalation in housing prices. And…..if the foreign buyer is removed from supporting said insane market then …whamo….the market will tank.

She specifically said “It would be good for first time buyers but harm those with equity”. So her logic says ….since the majority now is foreign owned we protect their equity … while we continue to throw the locals under the bus? What nonsense.

Hey…she said what she said….I didn’t put words in her mouth.

We may not have the final say on this issue, and the ‘DROP” will come from another more powerful advocate for law and order…..namely The Peoples Republic of China. China has aggressively signed 62 ( and counting) extradition treaties…with Canada noticeably absent. However the Harper Government is hinting that it is signing a bill into law that allows it to extradite and strip the citizenship of wanted criminals ….that’s been in the news of late.

China has been very vocal about the number of wanted criminals hiding their money in real estate in Canada and they have said they want their criminals back…and whatever loot that can be recovered…said to be over 1 trillion dollars internationally.

What would things look like if suddenly the legal floodgates are opened and thousands of wanted criminals ( those who have looted entire ministries, banks, schools, hospitals etc) and suddenly thousands of houses were put on the market?

Premier Clark would have no say in that. I know…I know…it isn’t politically correct to even suggest that HAM exists in Canada….even in the face of very public facts to the contrary. Mayor Moonbeams almost mother in law has been imprisoned in China for looting Harbin….after buying several large homes and condo’s in Vancouver with her daughter.

This HAM DENIAL is understandable…no good liberal would ever point the finger at a foreign national who happens to share the ethnicity of a local voter…..we get it. However….it isn’t racist to point a finger at foreign buyers…when in fact they are not Canadians and they form a majority of the market above 1 million dollars. They have been panicked to get a foothold in Canada and have been willing to pay anything over list just to get their money into what they have come to think of as a safe haven to launder money.

But you can’t stop water from boiling out of the pot when the fire has been left unattended. I think this will come out with a giant KABANG at some point….the truth always does…so don’t be surprised if a foreign owners equity suddenly disappears…..in China they call that ”’going to jail’. And then…who will pay for that 8 million dollar house….when the last local offer was barely 2 million?

#260 Steve on 05.13.15 at 3:12 pm

Disclaimer: I’m Chinese from an immigrant family.

As a customer facing professional who deals with money everyday, the effects of offshore wealth having a huge impact on Toronto/Vancouver RE prices is clear to me.

To say that the RE bubble in Canada is only a result of foreign money is akin to saying that the 08 financial crisis was a result of bad subprime mortgages – not quite that simple and could not have happened without swaps/CDOs/conflict of interest issues in the equation as well.

Similarly, foreign money is a big factory at play, but not the one and only. BS #134 raises a second factor at play. Low interest rates, Canada being a great place to live in and the list goes on…

If there is one sole reason that we should attribute this bubble to, its the same one we can attribute to all other bubbles – greed.

#261 IKnow on 05.13.15 at 3:14 pm

#136

What the HAM theorists fail to realize is all of the houses in Metro Vancouver were owned by locals prior to the bubble. It is the locals who are selling and using the proceeds of the bloated sale price to buy their next house. They don’t need income, they just need the massive tax free gain they got on their current RE plus low rates. You can edit the numbers and have a professional couple with $100K each income buying a $3 million house or a couple with the same income who only owned a condo buying a $1.2 million house. Bottom line the appreciation of RE with low rates is providing locals the means to buy at these prices even with modest incomes. Only 40% of buyers are first time buyers. The rest are move up buyers who are locals.

I agree with all your assessment.
But there’s nothing wrong about the HAM theorists.
HAM theory is only about the factors that contribute to why a 500k house 12 years ago will now worth 1.4M.
That’s because YVR people believe HAM will always be enthusiastic about YVR land value.
Where may the upper limit be? Maybe 3M, anyone’s guess.
But judging from how much more expensive houses are in Shanghai and Hongkong vs YVR the HAM enthusiasts maintain there’s still a long way to go, so coupled with low rates, prices keep climbing.

Other cities in North Americas also have low rates, but how many cities see house prices gone up 300% in the last 13 years?
YVR is very singular!

#262 cramar on 05.13.15 at 3:28 pm

#232 Ponzius Pilatus on 05.13.15 at 1:40 pm

About 55% of Germans, Swiss and Austrians rent.

————–

Not when they came here in the 1950s.

#263 oh get a grip people on 05.13.15 at 3:55 pm

Maybe Garth should read some John Locke to learn about effective social policy.

Failure to “till the earth” “i.e. being an absentee land-owner (regardless of race, age, gender etc), particularly in highly evolved institutional societies like Canada, is BAD SOCIAL POLICY. It is rent-seeking behavior, essentially.

#264 Financial Freedom at 40 on 05.13.15 at 3:58 pm

Just flew from YVR home to YYZ. Vancouver is a vibrant, young-faced, globally diverse city, fortunate to be in a picturesque corner of Canada. I delighted in it all.

I think the social concerns around housing affordability in major urban centres and building a strong cohesive sense of community should always welcome open debate, analysis and solutions. I’ll take passion and caring over apathy any day, but data does balance the rhetoric.

Growing pains. They will pass. New forces will be at work in the world in 10 years, disrupting the status quo. We can all work on our ability to adapt as well, as change is certainly the constant.

#265 johnk on 05.13.15 at 3:58 pm

#208
Because Vancouver and Toronto are cheap compared to prime California, London, NY.
On another point, I live in Victoria and it was oh-so whitebread when I came. These days I’m happy to see non-Caucasian faces around town. The city is much more interesting because of this. Better food, too.

#266 BCD on 05.13.15 at 4:01 pm

I love the HAM posts. It’s where everyone in the comments WHO DOESN’T LIVE IN VANCOUVER tries to tell us that we are wrong about HAM, while everyone who actually lives here meekly tries to interject without being libelled by accusations of racism.

And even though I am a solid observer of HAM and laugh at those who try to deny its existence, I’m still not going to sign that petition because I feel that creating those restrictions is anti-free market and only land that is subject to the national interest (which does not include residential) should face restrictions on foreign ownership.
__________________________________________

I haven’t signed that petition either. . .”yet”. At the same time I also find it laughable when people try to tell me that Richmond or Vancouver (yes I actually live in these areas) are not being bought up by wealthy Chinese mainlanders through whatever means available (whether it is relatives who are citizens, money laundering etc.). I personally know of an asian “investor” from China who bought a house for a young couple with their names on the land title just so she could have somewhere to park her cash (I imagine they had a separate agreement drawn up with lawyers).

Real estate speculation and value oriented communities with a vibrant population are mutually exclusive. Garth, colour people’s comments however you want, as racist etc, this issue will come full circle when the true extent of what’s going on (both legally and illegally) eventually sees the light of day and cities are transformed into something completely foreign, with different values, beliefs and rules–but right in your backyard forever.

#267 Raincouver on 05.13.15 at 4:05 pm

Even our Premier, Crust Clark is in favour of HAM verses locals. She said ” By moving foreign owners out of the market housing prices will drop,”

Read the article here:http://www.cbc.ca/news/canada/british-columbia/b-c-premier-christy-clark-opposed-to-taxing-foreign-homeowners-1.3072443

She’s a housing economist now? — Garth

#268 CJ on 05.13.15 at 4:09 pm

Real estate in Calgary is just fine:

Jason Markusoff @markusoff · 1m 1 minute ago
Starkman: Parking-free condo will go up for sale/pre-sale this fall. 650 people registered for information, pre-presale

#269 Smoking Man on 05.13.15 at 4:15 pm

#182 Holy Crap Wheres The Tylenol on 05.13.15 at 10:23 am
#101 Smoking Man on 05.12.15 at 9:57 pm
#93 waiting on the westcoast on 05.12.15 at 9:37 pm“As socialists, we are opponents of the Jews, because we see in the Hebrews the incarnation of capitalism, of the misuse of the nation’s goods.” Joseph Goebbels
……………………………………………………………
Put this one in the bank,
positive productive people give off long wavelengths to the universe,that attracks and luck always finds them.
Negative unproductive slime sucking complaines give off short wave lenghts, which attracts bad luck.
Who the fk is Joseph Goebbels compared to Dr Smoking Man.
PhD in ?
____________________________________________
Joseph Goebbels was a German politician and Reich Minister of Propaganda in Nazi Germany from 1933 to 1945. As one of Adolf Hitler’s closest associates and most devoted followers, he was known for his zealous orations and deep and virulent antisemitism, which led to his strongly supporting the extermination of the Jews when the Nazi leadership developed their “Final Solution”. So compared to Dr Joseph Goebbels vs Dr Smoking Man, no matter how virulent your opinions are you are simply not in the same class of person. Thank God for that. Otherwise we have to give you the coup de grâce.
…..

Ha didn’t know that. Just assumed some kind of philosophy dude.

Note to self, always use UOG. Nevet assune.

#270 Christy Clark's own admission on 05.13.15 at 4:18 pm

Yesterday Christy Clark said restricting foreigners would drive prices down, which would be good for 1st time buyers but not good for people who already own, as their equity would decrease, not allowing them to borrow money to finance their projects.
Here you go Garth, Christy Clark also disagrees with you, as do I and all my friends here in Van.

She said there is no anti-foreigner law coming. Of course. — Garth

#271 Mister Obvious on 05.13.15 at 4:37 pm

#231 Rexx Rock

Welcome the higher prices,it just means homeowners are getting richer every year.
————————————–

Correction. Their potential wealth has increased provided carrying costs stay reasonable. Their actual wealth has not increaed until gains are crystalized through liquidation. Only then do they have some real money to work with.

#272 Petition on 05.13.15 at 4:50 pm

Almost 19,000 and counting.
Hoooah, we can make this a reality folks…..

It has already been dismissed. — Garth

#273 Arch Douche on 05.13.15 at 5:07 pm

#88 Italians love real estate on 05.12.15 at 9:22 pm
I live in one of the towns you mentioned Garth .

To deny the influence of overseas buyers from China when you can’t go to a public place without hearing mandarin being spoken, or Farsi or Russian well then you are in denial.

Foreign buyers in the GTA and Vancouver are very real indeed.

Had you been an adult in the 1950’s and 60’s I suppose you would have denied the influx of Italian immigrants as well and there influence in T.O ..LMAO

Canadian citizens speak Mandarin and Farsi, too. Does your grandmoher still speak Italian? My wife’s mother still speaks Polish. Canadians, all. — Garth

———————————————————

I find the idea of defining ones societal ideal by exclusion rather than inclusion to be very strange. Also the idea that because lots of people of different ethnic backgrounds are in cafes, it means they must have bid up real estate. Just because they’re foreign, doesn’t mean they’re stupid.

#274 Blacksheep on 05.13.15 at 5:32 pm

Just watched the video. @ 5:12 min. in I read this:

“In china, you can be anything with out any knowledge or education.”

“If your from the west”

“We just show up to give them a white face”

They’re buying RE in a given location because it has a couple Caucasian faces mulling about? The people in the Video are completely obsessed with the West. How badly do you think, the people shown would like to live in Vancouver?

First born, Right arm? How bought all the $’s they have…ding, ding, ding!

RE prices in Van are going nowhere but up with out some form of immigration intervention, which I by the way, think is an absolutely terrible idea.

Did I mention I own a home in the Valley?

Go Christy!

#275 everythingisterrible on 05.13.15 at 5:53 pm

What’s wrong with saying someone has to be a landed immigrant or citizen in order purchase re-sale RE? Big business (developers) still has global customer reach for brand new developments to keep all the construction guys working and residents get one layer of protection from rising prices from foreigners (not a landed immigrant or citizen)
Seems like a reasonable compromise for everyone.

Canadians can buy houses in Arizona or Florida. Seems reasonable. Folks down there are happy to sell to us. Grow up. — Garth

#276 Leo Trollstoy on 05.13.15 at 5:59 pm

A $10k/ounce gold environment, which is quite plausible in the future…

A far future where all us blog dogs are dead.

#277 Leo Trollstoy on 05.13.15 at 6:00 pm

Maybe the cycles take a decade or two. Near the top no one has a fresh memory of how house prices used to fall or at least be flat.

It’s already been 2 decades.

#278 Arch Douche on 05.13.15 at 6:07 pm

I think some of the problem with the debate about foreign influence over housing prices is that market dynamics are not simple. If a market is thin, opaque, it will not be efficient. If information about the depth of supply or demand, history, bid and ask, is scarce the quoted price might not reflect all information.

I wonder if this is the case of houses, where pricing stats are routinely manipulated by real estate boards and historical information is hard to find.

In an extreme example, if the only information provided to the market is that 2 German investors paid 100% over asking price, this will influence the remaining market participants. But much of the influence will be down to the fact that there is a deficit of other information available that is reliable to provide a true picture of the market.

Perception, not reality, creates the market. Without further information and provided with cheap credit, domestic buyers can easily drive the price based on the deficient information they have (MBS securities were expensive in 2007 – until everyone found they were filled with garbage). So is this lack of market information the rich German buyer’s fault?

Is the real issue, German/Chinese/Japanese/Russian people/White people/Old people/Young people/Albertan people (because eventually it’ll be your turn to feel the hate) or is it a lack of housing market transparency?

Regardless, it’s not what you want in life that matters, its what you are willing to give up. Before you decide that question for yourself, the world is a reminder of what you lack. The clearer you are on what you will and won’t give up, the more you know what you really need in life and the more you can enjoy what you already have without being so envious of others.

You can then happily pass up the stupidly priced house and not even care where the buyer came from (because we all came from somewhere didn’t we?).

#279 bill on 05.13.15 at 6:12 pm

#260 Steve on 05.13.15 at 3:12 pm
spot on!

#280 Mark on 05.13.15 at 6:13 pm

“What’s wrong with saying someone has to be a landed immigrant or citizen in order purchase re-sale RE?”

If a foreigner actually wants to throw their money away by buying here, why would we want to stop them?

Better that foreigners take our most overpriced and least returning assets off our hands, than the actual good stuff.

People who hate foreigners should be rooting for heavy foreign ownership of Canadian RE at super-elevated prices. After all, that’s the essence of leverage — sell assets with a low return, and buy higher returning assets with the proceeds.

#281 Made in BC on 05.13.15 at 6:14 pm

#276 Leo Trollstoy on 05.13.15 at 5:59 pm
A $10k/ounce gold environment, which is quite plausible in the future…

A far future where all us blog dogs are dead.
+++++++++++++++++++++++++++++++++

If you call about 8 or 9 years a long ways away. The “phoney financial crisis invented by bankers” is already 7 years old.

#282 oh get a grip people on 05.13.15 at 6:14 pm

Amazing how the posters on here are so terrified of being called “racists” they can’t piece together the poor social policy implications of absentee land-ownership. Using the “race” card is often the siren song a losing argument.

Property rights, as Locke managed to figure out hundreds of years ago, have a caveat that these lands be productively used. This isn’t exactly news folks.

The social policy moving forward is obvious: if a person’s home, regardless of race, age, nationality, maintains absentee status for more than 1/2 year, charge a substantial tax.

Shelter isn’t an investment. A tax would eliminate the rent-seeking implications and dis-incentivize absentee home ownership.

The upside is better public planning/policy i.e. school zoning, safety, etc.

“Shelter isn’t an investment.” In a country with a 70% home ownership rate, epic debt taken to finance it an the bulk of middle class net worth sitting there, it sure as hell is. — Garth

#283 Hamburglar on 05.13.15 at 6:16 pm

Canadians can buy houses in Arizona or Florida. Seems reasonable. Folks down there are happy to sell to us. Grow up. — Garth
————–
What wasn’t grown up about that? Completely good argument , Don’t be a di”k

#284 oh get a grip people on 05.13.15 at 6:16 pm

“Canadians can buy houses in Arizona or Florida. Seems reasonable. Folks down there are happy to sell to us. Grow up. — Garth”

What are the tax implications of Canadians owning homes in Arizona and Florida?

No one is calling for eliminating foreign ownership. Rather, better policy is required to address absentee home ownership

#285 Made in BC on 05.13.15 at 6:17 pm

#270 Christy Clark’s own admission on 05.13.15 at 4:18 pm
Yesterday Christy Clark said restricting foreigners would drive prices down, which would be good for 1st time buyers but not good for people who already own, as their equity would decrease, not allowing them to borrow money to finance their projects.
Here you go Garth, Christy Clark also disagrees with you, as do I and all my friends here in Van.

She said there is no anti-foreigner law coming. Of course. — Garth

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

NO…….actually she admitted that BC is hanging by a thread because of people borrowing against their homes. This is of course the worst thing you can do with your home in a bubble environment. And our beloved Premiere….endorses this practice.

#286 Timing is Everything on 05.13.15 at 6:26 pm

Data is data. And you don’t have any. — Garth

When you get the data for Vancouver, use that data. You don’t have that data at the moment.
—————————————————————–
But it does give us an accurate snapshot of where area buyers are coming from. – Garth

Should read:

‘But it does give us an accurate snapshot of where [Victoria] buyers are coming from.’

That’s all that data tells us. Nothing more.
————————————————————-

#287 The American on 05.13.15 at 6:28 pm

At #275: Everythingisterrible (in Canada), while we’re on your topic, let’s also no longer allow Canadians to purchase real estate in the U.S. on their Home Equity Lines of Credit (nearly all purchases of homes in the U.S. by Canadians are done like this). When the HELOCs start being called by the banks as property values fall in Canada (and they will and already ARE, just as it happened the U.S.), then what will Canadians do to pay off the HELOCs? Its the nastiest of all credit bubbles in the G20.

#288 Fed-up on 05.13.15 at 6:30 pm

For all those that are desperately trying to sway Garth’s opinion on this subject, I say to you all now, stop wasting your collective breath.

How about them Blue Jays?

#289 crowdedelevatorfartz on 05.13.15 at 6:50 pm

Christy Clark
Proof that even the village idiot can eventually get elected

#290 Entrepreneur on 05.13.15 at 6:56 pm

One reason one would not sign the petition, a person has invested in a house or several houses. I bet, right now, Christy Clark is trying to figure a way out of what she said.

Victoria Real Estate Update…It is called a “wave effect” from the high prices in Vancouver & Toronto.

Another reason to buy into Vancouver is the air & water.

#291 H on 05.13.15 at 7:02 pm

A few days ago there was a comment about the oil “just coming back on line”

If you want to know what the frack companies conditions are like, read about Trican well services. Globe and Mail and National Post.

They are one of the BIGGER Frac companies. They have a large fleet of horsepower.

You will quickly gather the speed these companies can react to rising prices of Oil. Or shall I say “non speed”

Half the employees are gone.
Financials are tapped

Frack companies are not sitting like firemen in the station waiting for the call. They CANT react.

#292 Mark on 05.13.15 at 7:17 pm

“How badly do you think, the people shown would like to live in Vancouver?”

What’s stopping them from coming to Vancouver and renting instead of owning? Why must the assumption always be made that nobody would immigrate to Canada unless they could instantly have home ownership?

The whole idea that nobody rents in China, and that renting is cultural taboo, is way, way overblown. A cultural meme that was essentially manufactured by the (Canadian) RE industry. I have a number of Chinese friends originally from the mainland, and they were all renters before coming to Canada. One particular young Chinese friend of mine, in her mid 20s, proudly told me that she was able to accumulate, at a job that paid a little over $15k/year, over $40k in savings by watching her money and renting. Not too many Canadian 20-something or even 30-something-year olds have $40k in savings unless they won the home equity lottery.