The hurt

VET modified

Trust me. This will be the last time in a while that I deal with the topic of foreign cash and Canadian real estate. Reading yesterday’s pathetic blog comments shows you how excesses in West Coast housing are ripping the social fabric. As prices bloat, so does disappointment, which breeds resentment and then intolerance.

Intellectually, people must know that taxing out-of-town buyers or foreign investors won’t drop local prices by a single dollar. But, emotionally, they’re seeking someone to blame and punish. Like this blog heroically stated yesterday, the reason prices are stupid is because stupid people are paying them.

Anyway, here’s a small vignette about how all this is messing with people’s lives, and their heads.

John and Trish bought a little house in the 3300 block of West 19th in Vancouver back in the early Nineties, when a lot there was going for $200,000. They have a view of English Bay from the back deck, as well as the forest of condo towers downtown. It’s prime turf, what the locals call “Westside,” bowing slightly when they utter the word. This, as everyone who obsesses about real estate will tell you (and that’s pretty much the entire population) is a Ground Zero for wealthy offshore buyers.

“We’ve seen a lot of old homes get mowed down and replaced by new ones,” John tells me. “In the last year things have really changed around here and it is almost like living in a new subdivision that will never be completed. Our background noise on our used-to-be quiet sun deck is the sound of excavators, nail guns, music blasters from all the construction.”

Just like upscale hoods in Toronto – Leaside or Lawrence Park, for example – land values have inflated so much that tearing houses down to replace them with giant boxes, often fugly, is an ongoing event. And it’s a constant irritation in this age of the endless reno.

“But what is about to happen at the end of our street takes the cake,” he says.

Somebody bought two adjacent houses and the plan is to level them and erect a larger structure of more than 5,000 square feet. “One of the houses was built around twelve years ago and the other had a complete reno around two years ago,” John explains. “Both houses still have all the appliances in them and one has a hot tub. They will be mowed with everything inside. Both houses have been vacant for around two years and the newspapers pile up and the lawn s are never mowed.”

The couple had a friend who lived in one of the homes, and he sold it ten years ago for $460,000. But that was long ago, and before this relatively small neighbourhood became a hotbed of speculation and unrealistic appreciation. The newer home sits on land that has just sold for $2.8 million, and the older house changed hands for $3.28 million.

John snapped this picture of the two today:

HOUSES modified

Without a doubt, there is no finer example of Greater Foolism in this horny land than what is happening here. Whether the idiot building the monster house on a street of little character homes and 33-foot lots is a foreign speculator (unlikely), a local bozo businessguy or deluded Chinese Mainlander is beside the point. This will end in tears.

John and Trish are moaning about the change, as many are in Vancouver or Toronto hoods where serious money has changed all the rules. “Every summer our property taxes increase and we are getting taxed out. Our kids go to school in the area and our jobs are here. We don’t want to sell. These two lots with the soon to be one house will be the first time we’ve seen this happen in our area. All the other lots are small on this street and now this monster is about to be built. The nerve!”

Well, there ya go. It’s called change. There is not a single upscale area in any major city, in an era of real estate overkill and historically cheap money that is not feeling this kind of pressure. Nor is there any petition that will stop it, or legislative changes that can prevent people from buying, flipping, blowing up or aggrandizing houses. This will go on until the conditions that have bred our house lust erode. And that is certainly coming.

Without doubt, the smart action is for John and Trish to park the angst, recruit a greater fool of their own, turn their modest home into a $3 million tax-free windfall, rent a McMansion down the street or a luxury condo, and wait for the inevitable. This will all unwind on its own, and the once-in-a-lifetime opportunity will pass.

There is no inevitability about higher prices in YVR, the Westside, or this street. This is a Nortel moment. Vancouver has no exemption from the laws of economics. If there ever was a moment to cash in, we’re there.

Just rejoice you’re not the new Nutbar on West 19th. A world of pain awaits him.

226 comments ↓

#1 TurnerNation on 05.13.15 at 7:17 pm

C’mon we know only real Canadians are ones wearing Canadian Tuxedos:

http://thecanadiantuxedo.com/about/

#2 ILoveCharts on 05.13.15 at 7:22 pm

Blog dogs (and Garth if you will still talk to me despite our different views on foreign ownership,) I need some help.

1) At what point (total value of portfolio,) should someone move from self-managing (Canadian Couch Potato style,) to leveraging the services of a financial planner?

2) What exactly does this person do? Do I transfer my money to their account or give them access to mine and they will then execute trades or do they just give me a list of things (ETFs, bonds, currency exchange, etc.) to execute on a quarterly basis?

3) Is two and twenty good or would you recommend a pure fee-only arrangement?

#3 bobo on 05.13.15 at 7:24 pm

WTF- how much longer can this go on

#4 MissisaugatoVancouver on 05.13.15 at 7:25 pm

G, come out and say it… they should sell to the Chinese…

#5 Raincouver on 05.13.15 at 7:26 pm

a realtor commenting on that Christy Clark article

“It is a well known fact that foreign investment especially for China, contributes, greatly to our inflated values here. Christy Clark is falling short for those wishing to have an affordable lifestyle in Vancouver. New condo construction is a one time contribution to the economy if those who purchase do not move in. Coal harbour is 20% occupied and business hoping to cater to locals have failed dramatically. At what point does our premier stand up for her citizens and quit chasing the almighty foreign dollar? We are told to expect another 1 million folks over the next 20 years, well how about saying no? The demand for infrastructure is already costing in the billions and do we need more rationing of water and diminshing farmland to accommodate all the newcomers. Economic well being is not always measured in monetary gain. Sometimes it’s an affordable house on a quiet street with clean air and a quick commute to work.”

that same realtor has this on his facebook page

“How we protect our environment and reduce green house gas emissions is by not resigning ourselves to the fact that our population has to increase by one million people in the next 25 years. We are building condominiums at record speeds not to satisfy current local demand but to cater to global hoards of wealth looking for safe havens to park their money. This foreign money has artificially inflated values here in Vancouver and has contributed little to the economic well being of our community. Coal Harbour sits 80% vacant while nearby restaurants and businesses struggle to keep alive.
These one million new comers are going to strain our resources, our infrastructure and our environment. That is not the quality of life I am looking forward to. Will the mayor be happy with 150 thousand cyclists peddling across the Burrard st. bridge everyday. One million more people will not make this the greenest city in the world by 2020 it will only contribute to us maintaining the title holder of the most congested city in North America. And the winner is?”

#6 Dan on 05.13.15 at 7:27 pm

Nutbar #1!

#7 JustMe on 05.13.15 at 7:29 pm

Canada: House prices rose 0.2% in April

The Teranet-National Bank Composite HPI reached a new record in April, but this is true only in two of the 11 regions covered, namely, Vancouver and Toronto. In eight of the other regions, a price correction is underway. With prices at their highest since January 2008, the Edmonton market has not so far been impacted as much as Calgary by the collapse of oil prices. But it remains that the big picture is not one of generalized strength, despite the stimulus provided by historically low mortgage rates.

https://www.nbc.ca/content/dam/bnc/en/rates-and-analysis/economic-analysis/economic-news-teranet.pdf

#8 bigtown on 05.13.15 at 7:32 pm

John and Trish have been blessed by our Good Lord of the World of Real Estate. You can’t say Blessings don’t abound throughout our great country and Garth has reason to encourage these shy folk to CASH OUT NOW.

There is nothing to add to this post but again praise the Good One for Garth and also for heavenly high house prices.

#9 Interstellar Old Yeller on 05.13.15 at 7:33 pm

Three million dollar windfall??? Cash out and retire!

#10 Freedom First on 05.13.15 at 7:34 pm

I feel very grateful. Starting out as a teenager on my own through unforeseen circumstances, I learned an important lesson at a very young age. If money was the answer to any problem I had, I wasn’t thinking long enough or hard enough. I needed hard work and creativity to survive, and eventually, prosper.

I think too many people have the same problem. That is that they have more money than brains, and with the majority of people, it is other people’s money.

#11 lala on 05.13.15 at 7:34 pm

Garth the Turner, let the pee pee get what they deserve. Its time for people like lala to get in action and make some loot, i can smell the blood, its so strong the smell…

#12 Vancouverite on 05.13.15 at 7:34 pm

It’s just crazy that people are continuing to pour $$$ into real estate in Vancouver these days.

#13 eat pie on 05.13.15 at 7:35 pm

Sometimes the cards aint worth a dime, if you dont lay em down…

#14 John_inalowlycondo on 05.13.15 at 7:36 pm

Best pic here yet, that is one good looking pup.

It’s prime turf, what the locals call “Westside,” bowing slightly when they utter the word.

Nice :)
CBC radio’s show The Debators really should send out an invite for you to appear on the show, your wit would fit in well.

With all of that said I having been reading this pathetic blog for while now, I get the message, Van and the GTA aren’t all the special, what goes up goes down etc.

What about my pathetic little town, Kingston ON, huge growth in real estate prices over the last 15 years.
#2 retirement community in Canada, so I am told. 2 hours from TO and Montreal, a government town, steady pay cheques etc. The number of times I have been told things have changed here forever, there is a new normal for house prices in Kingston bla bla bla.
Can we get on with the correction already, I am tired of living in what is literally the cheapest house in Kingston. I have the cash/income and am ready to move up. Your blog is the only reason I haven’t pulled the trigger. Thanks for that.

John

#15 Senta on 05.13.15 at 7:36 pm

“This is a Nortel moment”. Agree, absolutely.

#16 Meanwhile, in France.... on 05.13.15 at 7:38 pm

People are idiots. Look what $1.8 million (CAD) can buy you just outside of Bordeaux, France. This is a property and lifestyle worth a couple of million dollars.

http://www.frenchestateagents.com/french-property-for-sale/view/51868AI33/house-for-sale-in-bordeaux-gironde-aquitaine-france

#17 Sean on 05.13.15 at 7:40 pm

Serious question: Is Van real estate in the midst of the greatest real estate bubble ever? OK, I guess Japan circa 1989 was maybe crazier.. but this seems nuttier than anything I heard / read of the US bubble. Opinions?

#18 TS on 05.13.15 at 7:41 pm

My favourite is the people in downtown Toronto and Vancouver who complain about high daycare prices.

If you buy a house in neighbourhoods for $600,000+, wouldn’t it be fair to assume that you could afford $2000 a month for daycare?

Plus, there very little home daycares in these hoods because you need two adults working full time in good jobs to afford the mortgage.

Buy in a premium neighbourhood and everything costs more.

Even the plumbers are gonna try to gouge you!

#19 Mark on 05.13.15 at 7:43 pm

“that same realtor has this on his facebook page”

Bizzarre. I thought the phrase, “you know when a politician is lying when his lips are moving” was limited to politicians. But I guess it can be extended to certain Realtors as well.

“Is two and twenty good or would you recommend a pure fee-only arrangement?”

Two and twenty? As in, 2% right off the top every year and 20% of the gains? That’s craziness. Run away from anyone suggesting such as a compensation arrangement.

“This is a Nortel moment. Vancouver has no exemption from the laws of economics. If there ever was a moment to cash in, we’re there.”

Nortel moment indeed. We’re almost a decade and a half into the economic devastation that the popping of the Nortel bubble brought to Canada’s technology sector. With still no end in sight, as the sector is but a fraction of its former size and influence. It could be just as bad for RE this time around as well.

#20 BobC on 05.13.15 at 7:49 pm

Please answer post #2. Please…….

#21 mark on 05.13.15 at 7:51 pm

From what I’ve seen most people going this level of crazy have money to burn anyway.

My boss is worth about $20 mill (liquid) owns a monster house and then bought an old beach house, did some renos then 5 years later basically knocked the thing down, except for a couple of walls to minimise planning issues, putting green outside, temp controlled wine cellar inside, you name it. The place cost 300k, he’s spent over a million doing it up. These days places on the same water front strip can’t sell for 600k.

What he’s made since equity markets (Dimensional funds all the way) turned in 2009 would have well and truly cleaned up what he’s spent or would lose on any sale. The business keeps pouring money into his pocket and the portfolio keeps throwing off dividends.

I see what you’re saying about us plebs taking the windfall, but the guy buying the knockdowns and building the monster, he might be doing a lot better than we know.

#22 Marco on 05.13.15 at 7:52 pm

Thanks Garth. I think we are very nearing the inevitable.

From Christie Clarke:

“By trying to move foreign buyers out of the market, housing prices overall will drop. That’s good for first time home buyers, but not for anybody who’s depending on the equity in their home to maybe get a loan or use that to finance some other projects.”

Yikes.

Any little thing to keep the party going…

Cheers.

#23 Million Dollar Journey on 05.13.15 at 7:54 pm

@ilovecharts, if you are comfortable managing your own portfolio, why are you considering going to a fa? Are you close to retirement and looking for a 2nd opinion?

#24 Brian on 05.13.15 at 7:55 pm

Reminds me of the gameshow who want to be a millionaire, where they ask the audience. There are so many blog dogs here that are certain foreign money is driving 604 RE, that you know the audience is right.

#25 Joseph R. on 05.13.15 at 7:58 pm

Speaking of pain, it look like the interest rates aren’t going up in Canada anytime soon, Garth, despite actions for the US Fed later this year.

The BoC recently announced that it will be loosening its target inflation rates of 1-3% and let it rise higher, if necessary, as per Monetary Policy Report delivered on April 15:

“On the surface, lower interest rates would be expected to promote more borrowing, which would increase this vulnerability [debt-to-disposable income ratio]. However, in the near term, lower borrowing rates will actually mitigate this risk, by reducing payments for mortgage holders and giving us more economic growth and employment gains.”

Source: http://www.bankofcanada.ca/2015/04/opening-statement-150415/

#26 Luis on 05.13.15 at 7:58 pm

Gotta give you credit Garth, your honesty is very clear, and I have to respect that, even when you are wrong.

Sometimes such honesty can contradict your own position, however.

“Both houses have been vacant for around two years and the newspapers pile up and the lawn s are never mowed.”

BECAUSE OF HAM!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

Who else could possibly afford the thousands of vacant homes and condos all over Vancouver?

Glad to see you are coming around to what is common sense street knowledge ;)

You have no idea who the owner is. — Garth

#27 Rob on 05.13.15 at 8:03 pm

I agree that economics don’t support this house lust. But it will continue. At the beginning of every year news of RE correction or stock market correction tends to be the buzz only to see the opposite throughout the year. Yes the fundamentals do not support the RE market, but I wouldn’t hold my breath.

#28 PM on 05.13.15 at 8:09 pm

Of course they should sell but they’re fools just like the rest hoping to ride the wave up endlessly. Of course nothing helps speculation like low carrying costs and Vancouver has that in spades

http://www.theglobeandmail.com/report-on-business/economy/housing/the-real-estate-beat/property-tax-survey-could-cause-grumbling-among-home-business-owners/article20795900/

We have the nations lowest property tax so it’s easy to sit on a tax-free investment growth hoping that another 12 months brings another $100K.

Want to address housing affordability? Raise property taxes. Then people wouldn’t sit on empty properties waiting for a fool to pay their foolish price. People would use houses for living in. Then we could use that tax money to pay for transit instead of having stupid referendums about tacking it on to PST.

#29 RayofLight on 05.13.15 at 8:11 pm

I was having a nap this afternoon and the phone rings, wakes me up. The guy on the other end ( Indian sounding accent), says he is from Revenue Canada, there are problems with my taxes and a warrant has been issued for my arrest. I said OK, and hang up. Two minutes later, the phone rings again, call from what sounded like the same guy, and he said I should take this seriously ,an arrest warrant is a serious matter. I said Revenue Canada knows where I live, send the cops, then maybe in jail I can finish my nap without being disturbed by phone calls. My bags are packed, still waiting, no more phone calls.

#30 sirex on 05.13.15 at 8:13 pm

LOL @ Garth.

On the one hand, don’t time the market, buy etfs.

On the other hand, time the RE market, SELL your home.

Then don’t. See what happens. — Garth

#31 Russ L on 05.13.15 at 8:14 pm

Pissin’ in the wind. As sailors say (it’s not a good thing to do, gets the pant-legs wet).

B.C.’s history of racism has been active as long as Asian people have helped form our country.

The last paragraph of this story says it all.
http://www.nanaimobulletin.com/news/302441541.html

A softer version:
http://www.timescolonist.com/news/local/b-c-s-chinese-canadian-history-going-digital-1.1872476

#32 ANON on 05.13.15 at 8:14 pm

“As prices bloat, so does disappointment, which breeds resentment and then intolerance”

How true. However, you ain’t seen nothing yet. Just wait until prices crash. :(

#33 Djb on 05.13.15 at 8:19 pm

Same goes up in my hood at 16th and Blanca, tear downs sell right away by spec builders. Up goes the orange fencing around the trees. Then the sound of the back hoe crushing a house.

Btw Vancouver bills itself as the greenest city, did they include the 20 tons of crushed house being hualed off to a landfill in trucks only to have new meterials manufactured and hauled by trucks back in?

#34 David McDonald on 05.13.15 at 8:22 pm

Vancouver homeowners should take the money and run.

I totally agree with Garth’s assessment “rates up, Greece down”. However what to do? Higher rates will drive down US stocks but drive up the dollar. A Grexit will drive the Euro down even against the Canadian dollar. It seems I should buy a European ETF like XEU but when?

#35 crowdedelevatorfartz on 05.13.15 at 8:23 pm

“There is no inevitability about higher prices in YVR, the Westside, or this street. This is a Nortel moment. Vancouver has no exemption from the laws of economics. ……”

Truer words never spoken.

#36 BS on 05.13.15 at 8:24 pm

Reading yesterday’s pathetic blog comments shows you how excesses in West Coast housing are ripping the social fabric. As prices bloat, so does disappointment, which breeds resentment and then intolerance.

I live in YVR and have my whole life. I am a bear on RE which is rare for anyone in YVR. I am also not a believer HAM has had any substantial impact on RE prices in general.

But I want to address your comment above about resentment in YVR. Not true. Yes people in YVR generally believe HAM is driving prices. But, most people are jovial about it. Even some who don’t own homes see it as an opportunity in the future. Most YVRers talk about how great Vancouver is and that is why HAM wants to buy here. Other than bear blogs I never hear anyone putting the HAM thing in a negative light. It is always a positive in discussions. Most people see $ signs on the house or condo they own. They love it. That’s why Christy Clark has come out in support of it. She knows that is what most voters want. Like kissing babies. Good PR.

#37 raisemyrent on 05.13.15 at 8:24 pm

The latest crap I heard this past weekend here in Vancouver is that Hydro published stats that only 50% of units in coal harbour had power meters that were running. TRUE, THEREFORE unoccupied THEREFORE speculators THEREFORE foreigners THEREFORE houses cost a million. Sigh.

#38 Mister Obvious on 05.13.15 at 8:26 pm

teetering… teetering…

#39 Jimmy on 05.13.15 at 8:26 pm

Let’s say that’s a Cotoneaster hedge in the picture.
Green, healthy, and strong.
Then in a startling short time the hedge is dead.
Done in by the Oyster Shell Scale insect.

Sell before it’s too late.

#40 DR. WAYNE on 05.13.15 at 8:27 pm

” … the reason prices are stupid is because stupid people are paying them”. BINGO … John Wayne got it right when he said many years ago “Life if tough, and even tougher when you are stupid”.

Man … are there a lot of stupid people in Vancouver …

#41 W on 05.13.15 at 8:30 pm

Don’t freak out the masses. You should know this. There are municipal zoning by laws that control and restrict land development. To join two pieces of land together to build one house that is out of scale for the neighbourhood would require a land consent and variance approved by a committee. If the neighbours were that upset about it they could have petitioned it to their councillor and to the committee and shut it down. I see it happen all the time. Its not that hard…. One angry neighbour with valid concerns is all it takes. I don’t get why they’re complaining about it now after the fact, and to you. What does this have to do with your blog? They should complain to leaders within their community.

In any case, the two houses in the photo are nothing architecturally significant. What these people are complaining about is an older neighbourhood where gentrification is natural part of life… If you have a good community of ppl who participate in the neighbourhood and good municipal leadership with carefully laid out by laws, gentrification is generally a great thing.

#42 Hot Albertan Money on 05.13.15 at 8:30 pm

The newer home sits on land that has just sold for $2.8 million, and the older house changed hands for $3.28 million.

I’m no HAM conspiracist, so please don’t hit DELETE but… who is doing this?

If you eliminate HAM and those making the $70k YVR average then who is dropping $6.08 million on 2 “teardowns”?

Are there that many dumb rich people (of any background) in YVR?

#43 jess on 05.13.15 at 8:34 pm

watch this investigation into the chicken industry

FSIS is in charge of meat and poultry.

The two agencies have vastly different approaches. FSIS is required by law to inspect every carcass of meat and poultry sold to consumers. As a result, it has inspectors inside every processing plant in the country. FDA only inspects facilities every few years at best, but has some authority to require preventive testing and force a recall.

Calls to streamline this system date back more than 20 years. The Government Accountability Office first recommended creating a single agency in 1994

FRONTLINE’s investigation revealed how a dangerous strain of salmonella, called salmonella Heidelberg, made more than 600 people ill during an outbreak linked to Foster Farms chicken that lasted from March 2013 to July 2014. However, salmonella in poultry is not banned by the FSIS, and one in four pieces of chicken carry the bacteria, according to the agency’s own sampling.
yes, and all citizens are to blame to allow this to continue. The corporation passes the blame on the consumer.

http://www.pbs.org/wgbh/pages/frontline/trouble-with-chicken/

#44 ILoveCharts on 05.13.15 at 8:38 pm

@ Million Dollar Journey

I am not good managing my money. It’s all in cash

#45 A Yank in BC on 05.13.15 at 8:41 pm

It’s possible that the “Nutbar on W 19th” has so much money that he doesn’t particularly care what it’s worth in five years. Just someone who wants to build a nice big home for themselves in a very nice part of Vancouver. Some people have that kind of dough.

#46 Mark on 05.13.15 at 8:41 pm

“The BoC recently announced that it will be loosening its target inflation rates of 1-3% and let it rise higher, if necessary, as per Monetary Policy Report delivered on April 15:”

Bizarre. As the BoC would be hard pressed to even meet a 2% inflation target given the deflation embedded into the economy. I think the whole thing amounts to a bunch of jawboning, but its probably not going to work. Rates are going to come down further and the BoC is obviously behind the curve given how bad the economic numbers are as of late.

#47 everythingisterrible on 05.13.15 at 8:46 pm

#29 RayofLight

https://www.youtube.com/watch?v=2U34xsSZ5PA

#48 Godth on 05.13.15 at 8:46 pm

Just make it a requirement that all new immigrants (to BC) have to spend 5 yrs. in Prince George. Lord knows they could use some cultural exchange.

#49 Daisy Mae on 05.13.15 at 8:48 pm

“They have a view of English Bay from the back deck, as well as the forest of condo towers downtown. It’s prime turf, what the locals call “Westside,” bowing slightly when they utter the word….”

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

Ah…the West End. At least that’s what we called it then. We lived in a small apartment and could walk to English Bay to sunbathe. We walked to work, as well, in downtown Vancouver along Robson. Wonderful shopping along Granville and Hastings. Lots of great memories. It was an exciting city.

Couldn’t afford it now!

#50 crowdedelevatorfartz on 05.13.15 at 8:48 pm

@ # 42 Hot Albertan Money.

Perhaps you’ve never heard of this pompous idiot? Who live on Vancouvers West Side (Point Grey Rd)

http://www.google.ca/url?sa=t&rct=j&q=&esrc=s&frm=1&source=web&cd=2&cad=rja&uact=8&sqi=2&ved=0CCEQFjAB&url=http%3A%2F%2Fwww.bloomberg.com%2Fbw%2Farticles%2F2014-06-23%2Fchip-wilson-is-causing-problems-for-lululemons-new-ceo&ei=KfBTVc6EBIOPyASS8oC4CQ&usg=AFQjCNGl2zEjvF6KH30WnmqlCfxsrjt13g&bvm=bv.93112503,d.cWc

Or the house/monstrosity that he has spent YEARS building and rebuilding , much to his neighbors’ disgust.

http://www.google.ca/url?sa=t&rct=j&q=&esrc=s&frm=1&source=web&cd=2&cad=rja&uact=8&sqi=2&ved=0CCUQFjAB&url=http%3A%2F%2Fbc.ctvnews.ca%2Flululemon-founder-s-57-6m-mansion-is-b-c-s-most-expensive-home-1.2170630&ei=wfBTVbWZHIj5yQT4-oDICw&usg=AFQjCNGOiIzIQvlb3HihvkrtvCsNAmOysA&bvm=bv.93112503,d.cWc

Proof that rich people dont necessarily have taste.

#51 Italians love real estate on 05.13.15 at 8:49 pm

#26 Luis on 05.13.15 at 7:58 pm
Gotta give you credit Garth, your honesty is very clear, and I have to respect that, even when you are wrong.

Sometimes such honesty can contradict your own position, however.

“Both houses have been vacant for around two years and the newspapers pile up and the lawn s are never mowed.”

BECAUSE OF HAM!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

Who else could possibly afford the thousands of vacant homes and condos all over Vancouver?

Glad to see you are coming around to what is common sense street knowledge ;)

You have no idea who the owner is. — Garth
_____________

I know who the owner isn’t.

Any Canadian citizen with a job and a family to raise.

Citizenship has diddly to do with it. The average person with an average wage raising a family anywhere will never buy a $6 million property. — Garth

#52 Leo Trollstoy on 05.13.15 at 8:51 pm

Only the financially weak blame rising real estate prices on foreign ownership. That’s the hallmark of the financially weak: blame outwards. That’s why they’re weak in the first place.

#53 BS on 05.13.15 at 8:52 pm

If you eliminate HAM and those making the $70k YVR average then who is dropping $6.08 million on 2 “teardowns”?

95% of real estate sold in the Metro Vancouver and the Fraser Valley is sold below $1 million. Why all the focus on the top 1% of the market. Why do people continually spew out the average income of $70K and then talk about the top 1% of houses being sold like this one for $6 million which is the top 1/10 of 1%? 99.9% of the houses being sold are below this price point. Why care about the top 0.1%? Even if prices where normal you would not be in this market. There is no city in the world where the average income person can afford a top 1% priced house.

#54 Butch on 05.13.15 at 8:53 pm

Poloz going to change BoCs inflation target to 4%!

http://www.cbc.ca/news/business/stephen-poloz-may-let-inflation-creep-higher-don-pittis-1.3070933

#55 Mr. Pink on 05.13.15 at 8:54 pm

“Canadian home prices rose slightly in April — but Toronto and Vancouver were basically flat: Teranet”

http://business.financialpost.com/personal-finance/mortgages-real-estate/canadian-home-prices-rose-slightly-in-april-but-toronto-and-vancouver-were-basically-flat-teranet

#56 Smoking Man on 05.13.15 at 8:55 pm

Many, many, Asians are wealthy.

Do you know why…the culture.

They take risks, they gamble. Get the feng-shui right.

Place your bet.

No here, Canadians just complain about the wealthy, its how they were schooled.

#57 Blacksheep on 05.13.15 at 8:58 pm

Mark # 292,

“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?”
————————————–
Don’t try, to put words in my mouth.

The people on video Garth supplied, where at a RE promotion, meaning they are looking to potentially purchase RE. Who said they would only come to Van, if they could buy?

No one said instantly, anything.

Drive around the subdivisions of Richmond and you will see a lot of very average, looking homes, with an abnormally high % of expensive European sedans.

The cost of these sedans often approachs 100k, but look oddly, out of place.

Why does this occur?

Pride.

And pride, misplaced or not, is why homes will be purchased, ASAP.

#58 westsider on 05.13.15 at 8:58 pm

I have enough anecdotal info from my neighbourhood and my block alone, to talk about HAM, but this guy uses stats. to show it.https://vancouverflippersintrouble.wordpress.com/2015/05/05/mystery-solved/

#59 Cici on 05.13.15 at 9:00 pm

So sad…those little houses are so quaint, and actually quite roomy. Perfect for little families.

Sigh…the good old days really are gone…replaced by crap and plastic. Idiocracy is not just a movie.

#60 Mister Obvious on 05.13.15 at 9:03 pm

#41 W

“Don’t freak out the masses. You should know this. There are municipal zoning by laws that control and restrict land development.”
—————————-

I know of a particular case in Burnaby (circa 1987) where application was made to city hall (by a real estate agent) to subdivide (i.e. rezone) a 66′ lot into two 33′ foot lots. This was on a street where most of the existing lots were 66′ with established homes centered on those lots.

I read the report from the Burnaby planning department to city council. It strongly advised against the subdivision mostly on the grounds that it would degrade the character of the neighborhood. In addition it made points about setting a precedent that would put added stress on the local infrastructure.

Within 8 months the existing home was torn down, the lot was divided and two pressed cornflake ‘Vancouver special’ boxes replaced it. Since then a similar fate has befallen several other lots on the same street.

#61 TurnerNation on 05.13.15 at 9:03 pm

Definition of dead money:

http://finviz.com/futures_charts.ashx?t=GC&p=w1

Bricked into negative returns. Buried in Guildhall.

#62 Daisy Mae on 05.13.15 at 9:09 pm

“Every summer our property taxes increase and we are getting taxed out….”

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

This is a major problem, as well — those ‘assessed values’ and the property tax implications. Wow!

#63 Blacksheep on 05.13.15 at 9:09 pm

And don’t tell me its because they own businesses.

I too know Chinese and East Asian business men.

I have had multiple convos with them and the common denominator is both cultures are very much about perception & appearance.

Renting simply doesn’t give you the desired bragging rights.

#64 Randy Randerson on 05.13.15 at 9:18 pm

I wonder what will happen to all the hatred and resentment when RE price does crash. Will dumb Vancourites still blame HAM, foreigners, visible minorities with Canadian citizenship? Or, will they blame the government for not protecting them from their dumb selves?

I’m actually looking forward to not being the literal scapegoat.

#65 Heisenberg on 05.13.15 at 9:19 pm

Of course it’s HAM that’s caused this real estate bubble. To deny it is either due to ignorance or deceit.
Living in the YVR the last 35 years, I’ve seen the qualitative proof.
Am I angry or upset? Heck no! I’ve made a small fortune in real estate.
There’s a reason why the government doesn’t want to track this HAM proof. Because governments love foreign investment. In any form – but when it’s dirty money, they don’t really want to fess up to it.
That Asian money winds up in the economy in one way or the other, so it’s great for our country!
You entitled whiners that complain about how the HAM is ruining your chances at buying an executive detached house in Kits (which you don’t deserve), should consider that without the HAM, you might not even have a job to begin with.
We’re a HUGE port city. We are THE Asia Pacific Gateway. The Lower Mainland runs on mostly Asian money you fools! LOL.
Is the RE bubble going to pop? NOPE. It might deflate a bit, but it certainly won’t take a dive in the magnitude of Nortel, like Garth is claiming. Nortel went from $124 a share to under a dollar? Please. No house or land will ever see that type of price drop in YVR.
You might see a 20% drop at the worst, and in 5 years it would be back to setting new records.
The only way it would take a permanent drop is if China and its slave labour profits disappeared from the map – which I’m pretty sure won’t happen just yet. LOL.

On on the contrary, with Xi Jinping’s continued anti-corruption measures, you’re going to continue to see more and more of this money prop up RE prices of all the “liveable” west coast cities – YVR, San Fran, etc.

#66 Frustrated Kiwi on 05.13.15 at 9:20 pm

#17 Sean “Is Van real estate in the midst of the greatest real estate bubble ever?”

Pretty much, I would guess. Although the same story as the above is being repeated around the world (huge number of tear downs around my neighbourhood, foreign buying which by some estimates makes up 30% of the Auckland market, prices completely out of whack with incomes and rents) – Vancouver seems about the biggest of them all. It’s one reason I stopped predicting an Auckland correction any time soon – because a bigger bubble is clearly possible.

#67 Investorz on 05.13.15 at 9:24 pm

Hey people, take a look at financial news. Bonds are being sold and yields are moving up.

US bank stocks are starting to move up because they profit from higher rates.

I would love to own a house right now. I’d cash out and invest most of the tax-free money in awesome companies that pay dividends. Then start a company.

#68 Montellino on 05.13.15 at 9:26 pm

If HAM is driving up prices in Vancouver, who is to blame for prices in the GTA, or Calgary until recently? Bottom line is – foreign ownership as a root cause is a stupid argument to make.. mirror, mirror on the wall I deserve granite and all…

#69 Yuus bin Haad on 05.13.15 at 9:29 pm

Yesterday’s thread was scary and disturbing (although not when one views those commenters as being the competition).

#70 Godth on 05.13.15 at 9:31 pm

The Era of Pretense
http://thearchdruidreport.blogspot.ca/2015/05/the-era-of-pretense.html

“Speculative bubbles are a great setting in which to watch eras of pretense in full flower. In the late phases of a bubble, when it’s clear to anyone who has two spare neurons to rub together that the boom du jour is cobbled together of equal parts delusion and chicanery, the people who are most likely to lose their shirts in the crash are the first to insist at the top of their lungs that the bubble isn’t a bubble and their investments are guaranteed to keep on increasing in value forever. Those of my readers who got the chance to watch some of their acquaintances go broke in the real estate bust of 2008-9, as I did, will have heard this sort of self-deception at full roar; those who missed the opportunity can make up for the omission by checking out the ongoing torrent of claims that the soon-to-be-late fracking bubble is really a massive energy revolution that will make America wealthy and strong again.

The history of revolutions offers another helpful glimpse at eras of pretense. France in the decades before 1789, to cite a conveniently well-documented example, was full of people who had every reason to realize that the current state of affairs was hopelessly unsustainable and would have to change. The things about French politics and economics that had to change, though, were precisely those things that the French monarchy and aristocracy were unwilling to change, because any such reforms would have cost them privileges they’d had since time out of mind and were unwilling to relinquish.”

over and over, and over again. The tragic comedy continues.
Will We Adjust to Life on a Finite Planet or Continue Devouring Our Future?
http://www.truth-out.org/opinion/item/13891-will-we-adjust-to-life-on-a-finite-planet-or-continue-devouring-our-future#

“The experience of a relatively easy 500 years of expansion and colonization, the constant taking over of new lands, led to the modern capitalist myth that you can expand forever,” Wright said. “It is an absurd myth. We live on this planet. We can’t leave it and go somewhere else. We have to bring our economies and demands on nature within natural limits, but we have had a 500-year run where Europeans, Euro-Americans and other colonists have overrun the world and taken it over. This 500-year run made it not only seem easy but normal. We believe things will always get bigger and better. We have to understand that this long period of expansion and prosperity was an anomaly. It has rarely happened in history and will never happen again. We have to readjust our entire civilization to live in a finite world. But we are not doing it, because we are carrying far too much baggage, too many mythical versions of deliberately distorted history and a deeply ingrained feeling that what being modern is all about is having more. This is what anthropologists call an ideological pathology, a self-destructive belief that causes societies to crash and burn. These societies go on doing things that are really stupid because they can’t change their way of thinking. And that is where we are.”

Good luck, we’re just not that smart.

#71 Lotus YVR on 05.13.15 at 9:34 pm

Having been in the construction/development business on the West Coast for 50 years, I have seen the booms and the busts in RE. The periods between those booms and busts were much shorter than they are today.
The busts were hard, but not totally devastating.

Today, the boom has gone on almost twice as long as any period that I can remember. Hopefully the bust on the horizon will not be too crippling.

There is always a tipping point for change, as Malcolm Cladwell points out…
“In the end, Tipping Points are a reaffirmation of the potential for change and the power of intelligent action. Look at the world around you. It may seem like an immovable, implacable place. It is not. With the slightest push—in just the right place—it can be tipped.”
― Malcolm Gladwell, The Tipping Point: How Little Things Can Make a Big Difference

Or, just maybe, Vancouver will continue to be one of the most expensive and sought after places in the world to live in.

#72 BG on 05.13.15 at 9:52 pm

You can’t just say HAM does not exist by saying RE is pumped up by locals and at the same time disregard the fact that these locals may be newly immigrated residents who bring considerable amounts money into the country.
Money that was not earned from the Canadian economy.

I’m no saying this is happening. I have no opinion on the topic and actually don’t care.

I’m just saying the arguments made against HAM I read here are often as bad as the arguments made to prove HAM.

#73 Washed Up Lawyer on 05.13.15 at 9:57 pm

My wife is a hard core West Coast-ophile hence we have done the 14 hour drive from Calgary to Vancouver more than a dozen times (now down to 11 hours with the Coca-Cola Highway). On our way to the Gulf Islands, Victoria, ,Whistler, Tofino, the Wikininnish Inn (sp?) and Powell River (Paradise!!)

We stayed at the Sylvia Hotel very often. Dank, musty rooms with soot stained walls from the natural gas stoves and a subpar tavern (by Alberta standards).

I just Googled it. The rooms have been dolled up quite a bit.

Who owns it now? Must be worth $1.3 Billion.

#74 Jim on 05.13.15 at 9:57 pm

I have a few financial planning questions.

I am looking for a non residency calculator. Say you have 2 mill in registered investments and are required to take out a certain % per year, paying 36,000 a year in tax. How long to be a non-resident to make declaring non-residency worthwhile? Is it worthwhile to pay 25% withholding tax, leave the country for 2 years and come back to Canada and have all your investments then outside a Rif and Lif. If you don’t take a lot of money out maybe makes sense to be outside of a Rif/Lif.

What about this idea of borrowing money to invest as an offset of taxes for taking out a Rif & Lif. Say you borrowed 500,000 against your house and put on margin another 300,000. That would be what a $40,000 interest tax deduction and would lower your tax bracket, but then need to pay 2,500 a month mortgage payments and income/capital gains on the invested money? Does it make sense to do this. May need to take more money out of Rif/Lif to pay mortgage etc and lose the benefit of your primary residence being tax free? When does it make sense to do this?

#75 Godth on 05.13.15 at 10:03 pm

#65 Heisenberg on 05.13.15 at 9:19 pm

It will end, and it won’t end well. It always ends…then come the tears.
https://www.youtube.com/watch?v=IWWwM2wwMww

#76 to_be_frank on 05.13.15 at 10:09 pm

We are letting in 300,000 legal immigrants per year (probably a small fraction of those who want to come), which equals the entire population of the Greater Toronto Area every 20 years. Most immigrants settle in a half-dozen major cities of this country. Some buy houses, and others rent. All need space. Of course that is going to have a huge impact on demand for real estate. The cause for this is a world splitting at the seams with 7.2 billion people, twice as many as 45 years ago, living on a planet with a degrading environment, dwindling forests and depleting oceans. Look at the masses of people streaming from Africa to Europe in leaky boats, over the US-Mexico border, and across the Indonesian straits to Australia. This did not happen back in my day when the world (and Canada) seemed so much bigger. Consequently, domestic living space and agricultural land values are rising quickly, and while prices may well correct in the short term, it appears that our young people will inevitably be sidelined from the housing market until much later in life, or commit financial suicide trying to live like their parents. I am one older person who feels the younger generation is having it harder than we had.

#77 Nora Lenderby on 05.13.15 at 10:12 pm

If this couple have the brains that God gave gravel, they’d have their house listed by now.

Consider that every city grew from being an idyllic village with a waterfront view to what it is today and you get the idea of what is happening.

Normal people cannot live within an easy stroll of Buckingham Palace, or the Kremlin these days. (Nor should they feel bad about that.)

I grew up in and around London, England. I could never imagine owning a house there. Ridiculous idea. Hence my arrival in Canada in ’82 with “foreign money” amounting to $25K. Which, hilariously, I promptly put into real estate…

I got sensible in the early ’90’s.

#78 DON on 05.13.15 at 10:13 pm

#49 Daisy Mae on 05.13.15 at 8:48 pm

“They have a view of English Bay from the back deck,

Ah…the West End. At least that’s what we called it then. W
*****************************

Where you used to live is still called the West end, the west side is west of cambie to UBC across from the West end. I left Van (west side) when real estate was just taking off but lending was still tight. Everything in Van is a mania, the coffee shops, lu lu lemon, bars. It is a scene and the summer is great for the youth and old alike. Too bad it only lasts for the 2-3 months, the rest of the time it rains…not exaggerating at all. The trendy live is a vacuum, reinforcing the mania. You spend most of your time in traffic or waiting for traffic lights if you are a pedestrian. Nope not for me.

Vancouver needs to get over itself, it seems to have more gang problems then Toronto. The grow ops litter all neighborhoods yes even the elite ones – easier to hide their.

#79 Brunett43 on 05.13.15 at 10:16 pm

Here you go Garth…Vancouver House Prices Fizzle As ‘Corrections Underway’ In Most Markets

http://www.huffingtonpost.ca/2015/05/13/toronto-vancouver-house-Toronto,

#80 MSM-free Zone on 05.13.15 at 10:18 pm

“…..This will go on until the conditions that have bred our house lust erode……..”
_________________________

Sure, but only if traditional free-market, supply/demand principles were allowed free reign in the Canadian housing market, without self-serving interference.

And we all know the government, CMHC, the Big Six, and CREA will never allow that to happen. Lobbied gravy never tasted so good.

#81 Smoking Man on 05.13.15 at 10:18 pm

Yah!!
Baby!!

Kathleen Wynne finally blocked me on Twitter..I’m in good company now.

She was pumping sex ed..

I said.

Your an Idiot , you just blew the minority/ethnic vote.
Biggest supporters of you tree hugging pick pocketing commies.

Tremendous satisfaction on my part..

I’m band….

#82 Mark on 05.13.15 at 10:19 pm

“US bank stocks are starting to move up because they profit from higher rates.”

No they don’t. US bank stocks profit from lower rates generally as they run a duration mismatch business, ie: borrow short, lend long. Any recent increase in stock prices is either the result of speculative enthusiasm in the stock market, or a belief that interest rates are once again going to fall again on account of Federal Reserve policy action. In other words, negative rates and/or more QE.

Contrast this with Canadian banks which generally run a fee-based business and do not implicitly speculate on the movement in interest rates, either up or down.

Much of the US financial sector, particularly firms and funds loaded up with long-term fixed income assets, such as pensions and insurers, will be substantially and dramatically damaged by higher rates. Some firms have actually started to realize the jig is up and are moving to divest their long-term financing operations, ie: GE.

#83 Leo Trollstoy on 05.13.15 at 10:22 pm

Inflation is coming to Canada. Over 2% easy. How could it not? It’s already happening.

Everybody and their uncle expects deflation that it’ll catch them off guard. The proverbial Black Swan event for the masses.

At least the BoC has an eye on it.

#84 Andrew Woburn on 05.13.15 at 10:26 pm

#17 Sean on 05.13.15 at 7:40 pm
Serious question: Is Van real estate in the midst of the greatest real estate bubble ever? OK, I guess Japan circa 1989 was maybe crazier.. but this seems nuttier than anything I heard / read of the US bubble. Opinions?
=======================

I once read, as the Japanese R/E bubble was swelling, that the estimated land value of the Imperial Palace in Tokyo exceeded the land value of the entire State of California. Now that is a serious bubble. Makes a million bucks for a bugspit East Van semi seem almost reasonable.

The US bubble appears to be reinflating in certain markets like San Francisco and Manhattan for much the same reasons. There are reports of entire condo projects selling out instantly to foreign buyers, mostly ethnic Chinese. It remains to be seen which side of the border wind up winning the crazy award, but in terms of price to affordability and downside risk, my money is on Vancouver.

Nevertheless, it is unlikely that events on either side of the border will top the Winnipeg boom of 1881-83 when the arrival of the railway led people to believe that the Peg was going to be the second Chicago.

“An instance of how quickly lots changed hands, and which came directly under the notice of the writer, may be given in illustration. “A” went into the Hudson’s Bay Company’s land office one morning in 1881 and purchased two lots for $700 each, making the required payment of one-fifth at the time. On passing through the corridor he met a gentleman going in, and had scarcely cleared the steps before he heard him calling to him to wait for a moment. He said, as they walked on down street, “You were just a moment before me in securing those two lots; I wanted them very much. What will you take for your bargain?” A said, “$200 each lot.” His reply was, “Come back to the office and ask them to make out the papers in my name and I will write out a cheque for $400.” In five minutes A had cleared $400 and his cheque was replaced by one from the purchaser, so that as a matter of fact he had not invested a cent.”

“The most absurd and crazy act committed by any single person during the whole period of the boom was the taking of a bath in champagne, by a lunatic who had realized a hundred thousand dollars by selling his farm, which adjoined a town site placed on the market by the CPR.”

http://www.mhs.mb.ca/docs/mb_history/53/greatwinnipegboom.shtml

#85 Sheane Wallace on 05.13.15 at 10:31 pm

3 millions? for that piece of crap?

It just shows how little is the worth of the confetti that we are paid with.

If that is Mark’s deflation, thank you very much, saw this evening shoes at $170 discounted to $149, the price was $70 6 years ago.

run away from the ca dollar.

#86 MinInMission on 05.13.15 at 10:32 pm

“Like this blog heroically stated yesterday, the reason prices are stupid is because stupid people are paying them.”

Amen GT, Amen.

#87 Sheane Wallace on 05.13.15 at 10:34 pm

#83 Leo Trollstoy

BOC is trying to talk the dollar down, Russian rubble might be a better choice in long run,

#88 Brian Ripley on 05.13.15 at 10:35 pm

“This will all unwind on its own, and the once-in-a-lifetime opportunity will pass.” Garth

It may have passed or perhaps never even arrived for most buyers in the last 5 years. The Georgia Straight had an intresting piece on what the bottom 80% of sales prices actually look like in Vancouver. I bulleted the main points in a mashup with the other extreme… the 100 million dollar condo sale in New York recently.

Hmmm, it may have passed for those folks as well:

http://www.chpc.biz/history-readings/pitching-unicorns-to-whales

#89 marketmenow on 05.13.15 at 10:37 pm

#26 Luis on 05.13.15 at 7:58 pm

“You have no idea who the owner is. — Garth”

Garth, in order to get around the whole HAM thing once and for all, why not coin a new moniker like UFO – unidentified foreign owner….

Now back to yesterday’s theme, have to hand it to the Vancouverites for marketing the liveability of a place which may have the worst weather on the planet….talk about lipstick on a pig!

Next we will see the Van realtor’s standing in front of fake palm trees in ads, and during the first visit by said foreign investor, said realtor summarily dismisses questions about the constant rain by wagging the finger and explaining the temporary gray weather phenomenon as being necessary to support the fragile green eco-system. When asked about the lack of palm trees, they can just reply….oh they bloom next month….

#90 45north on 05.13.15 at 10:38 pm

Without doubt, the smart action is for John and Trish to park the angst, recruit a greater fool of their own, turn their modest home into a $3 million tax-free windfall, rent a McMansion down the street or a luxury condo, and wait for the inevitable. This will all unwind on its own, and the once-in-a-lifetime opportunity will pass.

that would be the smart action but John in a benevolent mode has generously adopted the neighbourhood. This adoption doesn’t extend to going to meetings or following the actual planning process. W points out that there is a straight forward way to oppose monster houses. I know there is in Ottawa. John is delusional and it’s going to cost him.

#91 Sheane Wallace on 05.13.15 at 10:40 pm

#76 to_be_frank

You are complete idiot. Immigrants have no money, if they had why would they be coming here? Because of the weather or because of hockey?

Immigrants with no money would have no influence on the housing market unless someone decides to lend them the money at zero down, negative real interest rate and insured by CMHC. No normal lender will lend these loans.

France is 10 times cheaper than Canada in terms of houses in really great places and nice weather.

Just google what 3 millions will buy you in France, probably apartment in the centre of Paris and castle in the country side along with vineyard and maybe 1 millions left on the bank.

And that stupid Chinese company did not send their 64000 employees on vacation at the cost of 15 millions to Vancouver, no, they sent them to France.

Stupid idiots.

#92 Edith on 05.13.15 at 10:40 pm

“There is no inevitability about higher prices in YVR, the Westside, or this street. This is a Nortel moment.”
—————
Garth, you should stop making absurd apocalyptic statements like this. Vancouver West may be due for stagnation or even a correction (probably mild). But SFH’s in Vancouver West are not going to be dropping anywhere near as significantly a you predict here. Nortel shares tanked 99%.

Statements like these reduce your credibility.

A Nortel moment is the instant in which you realize you are pooched. — Garth

#93 Drill Baby Drill on 05.13.15 at 10:42 pm

Dear Pathetic Blog readers;
Bond prices are falling and yields are rising. This tells you that mortgage rates will soon be rising.

#94 abraxas on 05.13.15 at 10:43 pm

Can we borrow some of those mythical rich Asians here in New Brunswick? It’s getting hard to offload a $120,000 detached house in Saint John. And no I didn’t forget any zeros in the price.

#95 Sheane Wallace on 05.13.15 at 10:45 pm

#93 Drill Baby Drill on

Who cares? I will not buy government bond in my life no matter the yield. They can shove it in their behinds.

#96 Godth on 05.13.15 at 10:45 pm

#84 Andrew Woburn on 05.13.15 at 10:26 pm
At least the Peg has some good architecture to show for it. People obviously had great confidence to build that. Plus it’s basically in the geographic centre of N.A. and the legislative building is a great temple.
http://www.manitoba-eh.ca/legislative-virtual-tour.htm

The “pool of the dark star” is pretty cool to experience in person.

#97 IKnow on 05.13.15 at 10:46 pm

YVR people caught the Honk Kong realty-specula-lust flu.
Micro 300 sqft condo there on noisy street easily cost over $1M Cdn.
With that flu effect YVR single family houses should at least be $5M.
Garth may say we need to be more mature.
I say take more of the Realty-FX to resist the flu.

#98 Mark on 05.13.15 at 10:51 pm

“If that is Mark’s deflation, thank you very much, saw this evening shoes at $170 discounted to $149, the price was $70 6 years ago. “

Try comparing similar types of shoes, rather than picking dissimilar examples of shoes and then claiming an absurd amount of inflation based on such dissimilarity.

“Inflation is coming to Canada. Over 2% easy. How could it not? It’s already happening.”

Lots of reasons why inflation isn’t coming to Canada until a substantial quantum of excess consumer debt is liquidated. And no evidence of it existing in Canada either. CPI is still well under the target, and the Canadian dollar’s strengthening over the past few months has been quite significant.

Seriously, what happens when people can no longer tap the HELOCs, or refinance their CC’s into their mortgages? They slow/stop their spending. This causes deflation. Prices fall, which reinforces the cycle as does job loss. Fixed income owners in deflation have little income either. Issuers of top quality fixed income can issue at ultra-low rates (ie: government), so they do okay, but deflation also implies a credit-constrained environment in which lower quality issuers have trouble borrowing. The precious metals and their miners are some of the few relatively safe refuges that mere mortals can access to guard against such.

#99 Shawn on 05.13.15 at 10:54 pm

Said Mark, With Authority!

Mark on 05.13.15 at 10:19 pm

“US bank stocks are starting to move up because they profit from higher rates.”

No they don’t. US bank stocks profit from lower rates generally as they run a duration mismatch business, ie: borrow short, lend long.

****************************************
Maybe… but deposit rates have been near zero for several years. As rates rise they can likely keep deposit rates near zero for the first part of the rise and earn higher spreads.

Existing loans at lower rates will not be marked to market (banks don’t have to mark loans to market for interest rate movements).

U.S. bank spreads came down a lot as interest rates fell because they always had a pile of zero interest deposits and the spread on those came down. Spreads should rise as interest rates rise.

If the rise was extremely sharp then the banks would face higher deposit rates as old GICs rolled over and Mark’s contention would then likely be correct. We are probably miles from that scenario.

There will be pluses and minuses for the banks as rates rise. One negative, is fewer refinances upon which banks earn fees.

U.S. banks mostly securitize the really long loans and so they got that part of the interest rate risk off their books.

I think the bottom line here is don’t believe an off the cuff simplistic view of how U.S. banks will fare as rates rise.

I have a significant exposure to Wells Fargo and Bank of America so maybe my view is biased.

#100 Mark on 05.13.15 at 10:56 pm

“Immigrants with no money would have no influence on the housing market unless someone decides to lend them the money at zero down, negative real interest rate and insured by CMHC. No normal lender will lend these loans.”

There is no negative real interest rate lending in Canada, to immigrants or to the Canadian born and raised. But your general premise, that the existence of cheap CMHC subprime mortgage insurance has created a credit preference towards mortgages is quite valid.

I would go further and say that the credit preference accorded by CMHC subprime mortgage insurance, has actually amounted to a credit dis-preference towards the job creating productive sectors of Canada’s economy. We can see this in the incredibly lopsided economy we have, with full employment for anyone involved with RE, but a dying manufacturing sector and extreme underemployment in Canada’s engineering sector.

#101 sockeye sam on 05.13.15 at 11:00 pm

We are the couple that sent in this photo of the two houses on w. 19. One of the posts was If we had any brains we would sell”. Sell and go where to Surrey?I’m a transit operator and after my shift is finished in Grid Lock City I can jump in my car and have a ten minute ride home.If I had to commute after driving the monkey wagon all day I’d snap. My wife’s work is only a couple of Km. from our house as well and she won’t commute.The two kids are at U.B.C and all their friends and ours are here where we live.In 1990 the taxes were around $2000.00 per year and now they are close to $7000.00. The block that we live on has four vacant houses and all curtains and blinds are always closed. The yards are a mess.This neighborhood was not informed about the one house being built on two lots. The way we found out was last week a crew came in to put protection around the trees. The contractor informed me that one house on two lots was about to be built. Are we about to have an even larger vacant home with curtains and blinds closed all the time?

#102 Mark on 05.13.15 at 11:04 pm

“Bond prices are falling and yields are rising. This tells you that mortgage rates will soon be rising.”

XBB and XSB are within a couple percentage points of their all-time highs. Far greater falls have been experienced prior to surging to even greater heights. I wouldn’t call the bond bull market dead yet, especially as deflation sets into the Canadian economy.

Poloz is also jawboning for a BoC cut in 2 weeks. So in other words, run along now, nothing really to see. If mortgage rates go up in the next few years, the issue will be credit-worthiness, not policy rate or bond market rate hikes.

#103 Sheane Wallace on 05.13.15 at 11:05 pm

#25 Joseph R

By eating the savings of the savers and causing inflation to cover their behind. There is no free lunch. Savers and retirees will pay the price.

Every person with IQ higher than that of an amoeba (except Mark) would see what is coming – destruction of the Ca dollar. They target over 3 % inflation (maybe 6? 7?) while rates are near zero. Idiots.

#104 Taters in Tatters on 05.13.15 at 11:07 pm

Is this any cause for concern…could the couch potato portfolio be turned into mashed or even “scalped” potatoes?

http://www.theglobeandmail.com/globe-investor/funds-and-etfs/etfs/us-etf-companies-boost-bank-credit-lines-amid-liquidity-concern/article24420126/
EXCHANGE-TRADED FUNDS

U.S. ETF companies boost bank credit lines amid liquidity concern

#105 Sheane Wallace on 05.13.15 at 11:07 pm

http://www.cbc.ca/news/business/stephen-poloz-may-let-inflation-creep-higher-don-pittis-1.3070933

Hahahahahahahahahaha savers, congratulations.

#106 ANON on 05.13.15 at 11:08 pm

Probably the best article Onion has ever written, has been picked-up by Bloomberg:
http://www.bloomberg.com/news/articles/2015-05-12/riksbank-suffers-godfather-moment-as-deflation-pulls-it-back-in
Pure sardonic genius.

#107 debtified on 05.13.15 at 11:20 pm

No more HAM and REALTOR© in a while?…

Awesome!

Check out my IP, Garth. You’d be happy to know there are people who are willing to learn from you all the way down to fin del mundo. Looking forward to more actionable lessons. The HAM haters and the real estate porn lovers are not learning anything from you. The more you make sense, the more they hate you.

#108 devore on 05.13.15 at 11:20 pm

#18 TS

If you buy a house in neighbourhoods for $600,000+, wouldn’t it be fair to assume that you could afford $2000 a month for daycare?

No, in Canada you don’t have to be a millionaire to live in a million dollar house. We have people living in $5M properties unable to pay their property taxes, which are already the lowest in Canada, amongst major cities. You’d think there would be a moment where something clicks and they say ‘wait a minute…! I can’t actually afford the house I live in’

#109 Mark on 05.13.15 at 11:25 pm

“Some buy houses, and others rent. All need space. Of course that is going to have a huge impact on demand for real estate.”

It also has a huge impact on the supply of real estate, as many of those immigrants end up working in the business of real estate supply.

Also, if immigrants were arriving in excess of housing supply, rents would be skyrocketing. Yet we’re not seeing this. Rents are remarkably stable, meaning that housing supply is adequately keeping up with demand. Given that meaningful land constraints don’t exist anywhere in Canada, there is no reason why housing, over the long term, will cost anything on average higher than depreciated replacement cost.

#110 Mark on 05.13.15 at 11:29 pm

” But SFH’s in Vancouver West are not going to be dropping anywhere near as significantly a you predict here. Nortel shares tanked 99%.”

Most didn’t buy Nortel shares on credit, nor devoted an overwhelming majority of their finances to Nortel shares (except for Nortel employees, who were financially destroyed through their irresponsibility). But most houses are bought on credit even in Vancouver West. In some cases, extreme amounts of credit. Which means that as prices continue to fall, negative equity could make the losses even worse than most experienced with Nortel. Where, at best, the margin clerks liquidated the accounts of people who bought on credit before equity in a leveraged Nortel position went negative.

#111 RE good biz on 05.13.15 at 11:38 pm

RE makes world (or at least the economy) go round…

Let’s see a short list of who benefits from real estate:

– mortgage lender
– real estate agent
– mortgage broker
– appraiser
– architect
– interior designer
– building permit, exemptions, etc. fees
– construction industry labor
– construction industry material
– construction industry sales
– appliances manufacturer/sales
– transportation
– surveyor
– lawyer
– landscaping
– property tax
– land transfer tax
– HST
– advertising
– televison
– publshing
– alarm systems/monitoring

… feel free to add…

No wonder politicians, policy makers have no interest in decline of real estate sales, development, renovations, financing, etc.

Real estate is a monster “job creator”… I mean demand generator for labor and materials, services.

It is one of the least automated, labor intensive industry.

#112 gut check on 05.13.15 at 11:41 pm

“#42 Hot Albertan Money on 05.13.15 at 8:30 pm
The newer home sits on land that has just sold for $2.8 million, and the older house changed hands for $3.28 million.

I’m no HAM conspiracist, so please don’t hit DELETE but… who is doing this?

If you eliminate HAM and those making the $70k YVR average then who is dropping $6.08 million on 2 “teardowns”?

Are there that many dumb rich people (of any background) in YVR?”

this is the million dollar question.
Although I don’t particularly think the “A” in HAM is the worrying part… just that it’s HOT and it’s Money and it’s not Canadian (or maybe some of it is)…

In any case I’d like an answer, too. THIS MUCH MONEY is not coming from the bank of mom and dad. Puh-lease.

#113 Mixed Bag on 05.13.15 at 11:42 pm

#56 Smoking Man on 05.13.15 at 8:55 pm

Many, many, Asians are wealthy.

Do you know why…the culture.

They take risks, they gamble. Get the feng-shui right.

Place your bet.

No here, Canadians just complain about the wealthy, its how they were schooled.
———————–

Hence the Chinese links on OLG’s home page.

HAM’s not buying real estate, HAM is at the casino.

#114 cramar on 05.13.15 at 11:45 pm

“Nor is there any petition that will stop it, or legislative changes that can prevent people from buying, flipping, blowing up or aggrandizing houses.”

I often wonder about the municipal gov’t. that approves tearing down houses to build mega ones. Why don’t they pass bylaws that state that when tearing down an existing house, the replacement must be the same square footage?

#115 Hamburglar on 05.13.15 at 11:45 pm

#91 Sheane Wallace on 05.13.15 at 10:40 pm

You are complete idiot. Immigrants have no money, if they had why would they be coming here? Because of the weather or because of hockey?
————

Ad hominem …nice..Actually ur an idiot or completely naive …..

#116 Ralph Cramdown on 05.13.15 at 11:46 pm

#254 Mark — “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.”

Here’s a story (by which I mean Judge’s finding) about money moving to Canada from China:
http://www.canlii.org/canlii-dynamic/en/bc/bcsc/doc/2014/2014bcsc285/2014bcsc285.html#_Toc380741127

The key points, in my view, are that CIBC is comfortable with ‘structuring’ transactions like these and does them as standard operating procedure. Which strongly suggests that there aren’t just a few of them being done. And since CIBC is never a leader in anything, we can assume some of the other banks are doing them as well. The government of the PRC says US$1trillion has been embezzled over ten years, and everybody from Canada’s former ambassador to China on down figures a bunch of it has landed in Vancouver, due to our incredibly lax money laundering enforcement. All this stuff has been documented here in the comments section of this blog through links to reports from actual journalists.

And, as should be obvious but apparently needs pointing out, this money does not want to be tracked. It lies about its source as a matter of course, and always flows toward the jurisdiction with the worst controls.

#117 gut check on 05.13.15 at 11:47 pm

“#83 Leo Trollstoy on 05.13.15 at 10:22 pm
Inflation is coming to Canada. Over 2% easy. How could it not? It’s already happening.

Everybody and their uncle expects deflation that it’ll catch them off guard. The proverbial Black Swan event for the masses.

At least the BoC has an eye on it.”

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

I heard somewhere yesterday that BoC is looking at a target of 4%. !!! Very likely it was on CBC as it’s really the only mainstream thing I listen to. (I have learned that I only need to get info from one mainstream source these days since they all get the same scripts in the morning)

I just googled. yes, here it is: http://www.cbc.ca/news/business/stephen-poloz-may-let-inflation-creep-higher-don-pittis-1.3070933

#118 Mister Obvious on 05.14.15 at 12:18 am

#71 Lotus YVR

“Or, just maybe, Vancouver will continue to be one of the most expensive and sought after places in the world to live in.”
——————————

I was in born in Vancouver General Hospital sixty four years ago and have lived here all my life. I feel qualified to say a few (more) words about this city.

It was a charming town at one time. A largely ignored backwater in a stunning setting with the incomparable Stanley Park as it’s showpiece. I’m privileged to have been present as my city went though its post World War II coming-of-age in the 50’s, 60’s and 70’s.

Today little of it’s former allure remains. It’s choked with impossible traffic, rife with rabid speculation, undergoing obscene overbuilding, lacking sufficient employment, saddled with arrogant leadership, filled with panhandlers and con men hassling citizens and tourists alike on downtown streets, plugged solid with shopaholics and restaurant goers paying enormous markups on literally everything while tolerating curt and inefficient service.

I guess we are world class after all. But to be honest the livability of Vancouver has fallen off a cliff with much of that occurring in the past twenty years. It saddens me deeply to admit the place is becoming a dump. I suppose its time to look in the mirror.

#119 Grantmi on 05.14.15 at 12:23 am

http://bloom.bg/1PHP5C8

Rent Prices in Moscow Are Crashing

Vancouver next!!!!

#120 SWL1976 on 05.14.15 at 12:34 am

#70 Godth

These societies go on doing things that are really stupid because they can’t change their way of thinking.

Reminds me of my dear ol dad. He’s an old school farmer from way back who burns garbage. I remember telling him at a young age that he shouldn’t burn garbage, for it would be better to have to live on top of a pile of trash than breath toxic fumes. Well to this day he still burns garbage but every time he does he is reminded of what I said as a child, but still refuses to change his ways.

#73 Washed Up Lawyer – Enjoy your trip to the coast. I always enjoyed Powell River, but only ever seemed to get there when required to pull wrenches at the local mill. As local folklore goes… Once the largest salmon run in North America before they damned it off for hydro electric

#121 Carpe Diem on 05.14.15 at 12:52 am

John and Trish,

If you clear $2M from a sell of your place, invested at only 6% – that’s 120K of yearly revenue.

This can get you any exec-level rental you want and keep growing your investments in a diverse and extremely balanced way.

You’ve made good. Do you really think prices will keep going up forever?

If you do, keep paying those ever increasing taxes and stop whining.

Otherwise, sell.

#122 cat6 on 05.14.15 at 12:53 am

i’ll just leave these here..

http://www.vancitybuzz.com/2015/05/christy-clark-says-no-taxing-foreign-real-estate-investors/

http://www.vancitybuzz.com/2015/05/35-vancouver-house-units-sold-foreigners/

#123 Ivan the Moderate on 05.14.15 at 12:54 am

How is it possible to have a $73,000/year mortgage on a $747,000 house

http://www.theglobeandmail.com/globe-investor/personal-finance/household-finances/house-poor-couple-debt/article24370722/?click=sf_globefb

#124 Godth on 05.14.15 at 1:00 am

#101 sockeye sam on 05.13.15 at 11:00 pm

If you can’t recognize when the fish are jumping in the boat…you’ve won the lottery, cash it in. You sound like you’re stuck in a rut. You live in Canada, B.C. – not just the lower mainland. Perhaps you lack the imagination to reorganize your life elsewhere with your winnings. I’m sure your kids won’t lack the imagination to be gone once they graduate.

I detest the logic I’ve put forth but sometimes principles lose to pragmatism. I’ve always lived on this beach in my hut – but there’s a tsunami coming – no, I won’t leave, this is all I know. Fair enough, drown then.

#125 BS on 05.14.15 at 1:06 am

101

Sell and go where to Surrey?

No, sell and rent. However, if the only option was to sell and move to Surrey or stay and ride out the crash I would move to Surrey.

As you pointed out, the neighbourhood is hardly attractive anymore. I am not sure if your house is worth $3 million but if it is worth anything close to that only a fool would stay especially considering your blue collar job (and salary). You are about to take more than a 50% hair cut on your net worth. More than you will probably take home in wages for the rest of your life.

#126 NEVER GIVE UP on 05.14.15 at 1:07 am

If the reason for high prices is from CMHC rules and Low artificial interest rates.

Then why is Vancouver and Toronto the only cities still rising?

These are the only markets HAM is flocking to.

How can this be continually denied.

You only need one extra bidder to make a property go over the asking price.

#127 @sam sockeye on 05.14.15 at 1:30 am

re #101

Is it possible to sell and rent in Dunbar, Kerrisdale or Point Grey? You love the hood and that’s great but that is a whole lot of money you’re potentially leaving on the table if RE market sentiment turns.

Remember that story about the union worker who was offered a one time package payout for $1 mio or draw retirement until he kicks the bucket.

If you can’t fight them, join them. You’re Don Quixote fighting the foreign owned windmills.

Take the money and run .. or rent!

#128 Glen on 05.14.15 at 1:41 am

Bought a house in YVR 10 years ago for 800K, spent 200K on it, then letted it out. Cashed in for 3,500K (the buyer was a local developer who planned to demolish it and build a monster). Gains from the sale went into buying a tear down property in the westside that is currently rented out. The rest of the money went to TFSA, ETF’s RRSP’s, term insurance, and the large and justifiable CRA tax bill.

The market is hot, driven by cheap money, deflation (a result of the boomer retirement that has no large echo after it), and a desire to park money where there is political and economic stability (ie far from Russia, China, South America, or most places for that matter.

About the only thing that will hit YVR real estate is a mega thrust earthquake, or a sustained long term global recovery…I wage my bets on a 9.1.

#129 Glen on 05.14.15 at 2:12 am

As a follow up to my previous post, there is one other thing that could rock the boat – rezoning YVR RS-1 to duplex and higher density.

I’m a big fan of this, as it’ll allow more young people to get in on the market without too much visual change to neighbourhoods. It’ll also offer more options than just condos for those who can’t afford or don’t want a full lot size. Sadly, while rezoning RS-1 would bring land prices down, there is currently too much NIMBY BANANA push back against it.

For young people, I do not advise investing in condos in the YVR market. If you cannot afford land, better to just rent. While the market won’t tank, there are better returns to be had buying stocks and artwork, as opposed to overpriced, intensely marketed”luxury” micro units. After all, who needs a Miele fridge and a soaker tub in a studio flat!

#130 Shlomo on 05.14.15 at 2:39 am

Look at this open letter to Christy Clark, from VancouverCondo.info:

An open letter to Christy Clark from the bloggers at VancouverCondoInfo

Your sycophantic pandering to the moneyed classes betrays a wilful neglect of the very people who voted you into power. Yor blasé neglect of local constituents and their desires for affordable, local communities belies all your empty promises about putting British Columbians first. Your actions reveal that British Columbians are actually last on your list of priorities, as you move forward to eviscerate their very way of life. As you desperately try to open more conduits for the ever-growing pile of dirty money seeking to find a home on our fair shores, you wish you could reinterpret our national motto “From sea to sea” as a handbook for foreign investment in this once-great country.

Your myopic and solipsistic policies have doomed future generations of British Columbians to penury in their own land. Perhaps your one saving grace is that you were not the sole architect of this socio-economic catastrophe that’s unfurling, but had unfettered assistance from other, equally greedy and self-centered visionaries in power. If shame is not an emotion alien to you, you should do the decent thing and resign. But by now, the once-human Christy is probably buried under gnarly layers of subservience to her foreign masters, and open letters like this will probably go unheeded in the final, lurching grasps for more fistfuls of dollars.

Christy Clark, we call upon you to resign today and devote the rest of your life in humble service to this great province that you have wronged so immeasurably.

Sincerely,
VancouverCondoInfo

#131 observer on 05.14.15 at 2:44 am

Vancouver laneway house. What a joke, the tenants park in the middle of the alley. Can’t drive down unless your a superb driver.

I seen a few of them which had a kids playground almost in the middle of the alley. F-me, ungated, I can see one of those kids snatch because there is no way you have clear vision of your kids.

Also notice how close they are to the alley power lines. I swear to god, a few of these newly built laneway houses are only 5 feet away from the Capacitors and Power Regulators. Basically just outside of their bedrooms.

I use to fear build a house over 200 feet away from those big power lines, But seriously now your 5 feet away from a small one. I say that is way too close, wonder if anyone has conducted experiments on the effects on people health whom sleep right next to one of these things.

#132 Setting the Record Straight on 05.14.15 at 3:09 am

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

The government has in the past offered tax incentives to first-time home buyers, and is working on new benefits, but there is no concrete plan in place, Clark said.

“We are open to some new ideas.” ”

So they are working on new benefits to first time buyers.
I am so relieved. But if you want to try to push up housing prices, she haste answer.

As far as fresh ideas, perhaps we could take a leaf from Mark’s book and further stimulate the speculative spirits of Vancouver residents. Say promise first time buyers shares in BCstartup gold cos.

#133 Mark on 05.14.15 at 4:07 am

“Here’s a story (by which I mean Judge’s finding) about money moving to Canada from China:

One (rogue) CIBC employee engaged in this practice. She was, rightfully, fired. I hardly see how that constitutes a claim that such practices are systemic throughout the universe of immigrants, particularly those from China.

No doubt, there is a relatively small quantum of HAM in Vancouver. I don’t think anyone can deny it. But enough to move the market, doubtful. The GVR is home to literally millions of people, and a few thousand instances of HAM can’t possibly be influential enough to move an entire market. However, the systemic relaxation of lending practices and speculation can have an enormous impact.

“Every person with IQ higher than that of an amoeba (except Mark) would see what is coming – destruction of the Ca dollar. They target over 3 % inflation (maybe 6? 7?) while rates are near zero. Idiots”

Poloz is clearly trying to jawbone here, trying to tell people to sell bonds in an effort to stave off the deflationary trap that the BoC increasingly will be finding itself in. I would suggest his efforts will be completely unsuccessful. Look at the US central bank, they basically did QE for a few trillion and still didn’t manage to ignite inflation in the US economy.

Even Poloz admitted himself a few months back that it it was basically the job of central banks to play mind games with the market, so as to not ‘spoonfeed’ the speculators. To that, I would say simply, “watch the data, not whatever nonsense emanates from the talking heads on a particular day”. And the data is looking quite nasty for demand in the Canadian economy which is why there has been practically no price growth despite the currency dumping 20% of its value recently.

Hence, when you add it all up, the future for Canada is quite deflationary, the CAD$ will be supported through such deflation, and the benefits of such will accrue to those with the foresight to invest in asset classes which suffer legitimate scarcity.

And, as should be obvious but apparently needs pointing out, this money does not want to be tracked. It lies about its source as a matter of course, and always flows toward the jurisdiction with the worst controls.

Nice conspiracy theory, but the problem with the “Chinese money” theory in Canada is that there’s simply little to no evidence of it existing. If even a fraction of a trillion showed up in Canada, there would be evidence in the economy, in terms of a reduction in leverage. In terms of non-housing economic activity. Etc. Also, the presumption made is that these embezzling individuals would invest it solely in housing. Why not stocks? Why not businesses? Why not gold? Or artwork?

#134 Julia on 05.14.15 at 7:04 am

#108 Devore
#18 TS

“If you buy a house in neighbourhoods for $600,000+, wouldn’t it be fair to assume that you could afford $2000 a month for daycare?

No, in Canada you don’t have to be a millionaire to live in a million dollar house. We have people living in $5M properties unable to pay their property taxes, which are already the lowest in Canada, amongst major cities. You’d think there would be a moment where something clicks and they say ‘wait a minute…! I can’t actually afford the house I live in’”

It all goes back to people buying a house based on the mortgage payment they can afford “cheaper than rent” and not on a full affordability analysis based on – OMG – a budget.

#135 Italians love real estate on 05.14.15 at 7:12 am

The way I see it , John and Trish got lucky once and did one thing right.

1) when they bought their place on 3300 back in the nineties. Lucky

2) ignoring the advice from blog posters over the last decade to sell ..lol

Why? They are now unhappy, and obviously confused. The house has messed with their heads and clouded our clear decision-making. — Garth

#136 Smoking Man on 05.14.15 at 7:21 am

WARNING posters.

Canada now has bill C51
USA Patriot act.

Now British Gov doing same.

Free speech under attack. Msm is losing its cattle prong to stear the herd.

Social media and blogs are taking over the sphier of influence.

The machine don’t like it one bit.

Read this fellow slaves.

http://rt.com/uk/258105-new-anti-terror-law/

#137 Mountain Man on 05.14.15 at 7:48 am

“This is a Nortel moment.”

Quote of the day.

#138 Luis on 05.14.15 at 8:03 am

What about the impact of the new immigrants in both GTA and YVR? I understand these two cities together receive over 90% of all new immigrants that land in Canada every year. Those account for about 250 thousand/year as per government statistics. If we think in terms of families, that would mean probably around 83 thousand families of about 3 people per family (?), and 90% of this figure would mean about 75 thousand families needing a place to live in, whether buying or renting in YYZ or YVR.
I am one of those new immigrants. As such I have met many new immigrants like me. Most of them have spent the savings of their life to enter the housing market buying a house because of the “buy now or never” mentality. I still think that these prices are not logical and people are acting crazy however, what’s the impact of the new immigrants on the market? I think they are to take into account too.
Hope you see this message and reply.
Thanks.

#139 TurnerNation on 05.14.15 at 8:27 am

Anyone posted those Bomber layoffs?

#140 crowdedelevatorfartz on 05.14.15 at 8:58 am

@#101 sockeye sam
“I’m a transit operator”
++++++++++++++++++++++++++++++++++++

You’re a bus driver with a house valued at $3 mil. and you dont want to sell and rent in the same neighborhood…….

Let me guess, you voted “Yes” on the Translink ballot to raise your taxes……..

#141 crowdedelevatorfartz on 05.14.15 at 9:04 am

@#111 RE good biz
“RE makes world (or at least the economy) go round…

Let’s see a short list of who benefits from real estate:
++++++++++++++++++++++++++++++++++++

You left out one person that DOESNT benefit.

“New owner”

Because the new owner is being hosed by the 20 odd parasitic sales leeches you listed.

Starting with realtors.

Your list is a perfect arguement for renting and saving money.

#142 Ralph Cramdown on 05.14.15 at 9:05 am

#133 Mark — “One (rogue) CIBC employee engaged in this practice. She was, rightfully, fired.”

What are you, illiterate? CIBC’s grounds for termination were not that she engaged in a structuring transaction, but that she moved money through her own account as part of the process. The Judge said (para. 164): “Working around these regulations was a challenge and a complicated process, but it was a practice CIBC supported. There is no issue about this.” The Judge also said (para. 3) “I have concluded that there was wrongful dismissal and applicable heads of damage are compensatory, special and aggravated damages.”

So she was wrongfully fired and she wasn’t a rogue employee. So sayeth the Judge.

#143 Sonny on 05.14.15 at 9:10 am

Bombardier layoffs in Montreal, Toronto, Belfast

Bombardier Business Aircraft has announced it is cutting 1,750 jobs, including 1,000 in Montreal and another 480 in Toronto.

http://www.ctvnews.ca/business/bombardier-layoffs-in-montreal-toronto-belfast-1.2373471

#144 Shawn on 05.14.15 at 9:22 am

New Home Prices about Flat in March

New data released moments ago…

The New Housing Price Index (NHPI) was unchanged in March, following a 0.2% increase in February. Monthly price increases in eight metropolitan areas were offset by decreases in seven metropolitan areas, resulting in no change to the Canada level index.

http://www.statcan.gc.ca/daily-quotidien/150514/dq150514a-eng.htm?cmp=mstatcan

#145 robert james on 05.14.15 at 9:30 am

Over 20,000 people have signed this petition to restrict foreign ownership,,so far… http://www.cbc.ca/news/canada/british-columbia/premier-clark-was-asked-the-wrong-question-on-foreign-ownership-of-housing-1.3073486

Meaningless, and without consequence. Feel sad for Vancouver. — Garth

#146 Nagraj on 05.14.15 at 9:35 am

Youse guys jest aint buyin’ nuff o’ them there BUSINESS JETS. Get out there and buy yerself a BUSINESS JET. Already got one? Git anudder one. Jes fly it around. It’s fun. Goodness knows a lil fun never hurt nobody, eh?

While yer at it git some “BitGold” (XAU.V) too.

And a couple Apple swatches too. Give ’em to yer friends as birthday gifts – after yas gits em platinumplated of course. Don’t be so Scroogy.

Don’t yas feel sorry for them there 1,000 Bombarder workers laid off in Montreal? Sure ya do. An’ the 500 or so laid off in Tronna? Sure ya do.

An’ lets not forget CANADIAN TIRE either. Great Canadian hardware store.

#147 Rabbit One on 05.14.15 at 9:52 am

#133 Mark
>individuals would invest it solely in housing. Why not stocks? Why not businesses? Why not gold? Or artwork?

That is what you think, I and others, most western wealthy think, but that is not what the people described here think.
It is always always all about Real Estate.
Buying one? Buy two, even three is their mentality.

I don’t deny locals, long term residents, also have same mentality with help of easy lending standard, though.

As for illegally transferred money to Canada, it is amazing how clean it became once it is parked in form of real estate compare to liquid investment.

Our chartered banks, legal professionals do help clean on each buy and sell procedure, all traces are legal here, bank draft, real estate agengt’s in trust account, layer’s disbursement statement, provincial, municipal papers, all very clean looking.

Again,I am not saying all new money are dirty source.
I am saying ‘when illegal money comes’, the best to convert to R/E in Canada than to invest in liquid investment or to start businesses.

Bankers, mortagege brokers, legal conveyancer, are very helpful, “whatever it takes” to close your R/E deals here!

#148 Italians love real estate on 05.14.15 at 10:10 am

#135 Italians love real estate on 05.14.15 at 7:12 am
The way I see it , John and Trish got lucky once and did one thing right.

1) when they bought their place on 3300 back in the nineties. Lucky

2) ignoring the advice from blog posters over the last decade to sell ..lol

Why? They are now unhappy, and obviously confused. The house has messed with their heads and clouded our clear decision-making. — Garth
———–
Well, they may be unhappy as their note to you indicates or, just possibly they are using this forum as a means to boast about their good fortune and status , related to the ownership of a home they do in such a coveted neighborhood.

I believe that it would be very hard to be unhappy , living in an investment ( yes I said it ) that has risen 15 fold in a span of 20 years.

Afterall , like you and everyone else here has said , they could sell and move reaping the windfall.

The fact they haven’t done so says a lot.

Actions always speak louder than words.

Exactly. They’re not thinking clearly, all because of a house. Self-inflicted. — Garth

#149 tkid on 05.14.15 at 10:16 am

#101 – you’ve got property worth $3,000,000, you could sell it easily, the money will be tax free, you could retire on that cash without any issue, and you are whining about the height of the weeds in the front yards of the homes down the street?

THWACK!

Get a grip on reality. Sell. Spend a few bucks on cheapo condos for the kids and put the condos in the kids’ names. That’ll take you to two million, maybe two and a half million and you’ve set the kids up on the road to prosperity as they won’t have to ever struggle to repay a mortgage.

Take $200,000 and spend it touring the planet. When you get back to BC, you’ll have $90,000 worth of income to spend next year (that’s if you get unimaginative and invest solely in bank stocks). You will never have to commute again, or suffer idjits on the bus (I’ve heard tales of how people behave and what drivers go through).

Migawd dude, the rest of us would call a 3 million dollar windfall a freakin’ lottery win!

#150 Huh? on 05.14.15 at 10:17 am

It scares me that our government will likely have to help bail-out all the over-spending bozos who will be underwater in mortgage and HELOC debt when prices start to dip.

Meanwhile those of us taxpayers who, you know, didn’t buy what they couldn’t afford will be picking up the bill.

#151 Will on 05.14.15 at 10:18 am

Mark, I miss you at RFD. Personal finance forum isn’t even worth reading since you left.

#152 not me on 05.14.15 at 10:26 am

A bus driver sitting on lottery winnings, so beneath him to move to Surrey lol

Btw 2 “no” (referendum) votes from my household.

#153 not me on 05.14.15 at 10:30 am

Oh wait, I have an idea – why not set up “go fund” me page to raise $$ for the property taxes for the poor subjects of today’s blog.

#154 Mild One on 05.14.15 at 10:31 am

You are right, this definitely seems like the time to sell! My neighbor’s home just sold for 30% above assessed value in 10 days.

I do feel sorry though for my friend who sold his home 8 years ago in anticipation of the “crash” and has not yet been able to purchase another home in Vancouver.

If I were not in it for the long haul, I would be happy to sell now, however, this is my home and I am fortunately indifferent to the ebb and flow of house prices for now.

There are 2 vacant homes on my street – do you have the number so that I can call and “out them”?!

It is a crazy world!

Did your friend invest his money? If so, the returns have kept pace with Van house prices, and normally exceeded them. Additionally, mortgage rates have dropped, so I think your story is bogus, or your friend just sat cash. As for ‘outing’ people owning houses near you, how is that any of your business? You don’t own the street. — Garth

#155 young & foolish on 05.14.15 at 10:32 am

“On the one hand, don’t time the market, buy etfs.
On the other hand, time the RE market, SELL your home.”

Maybe there is just too much money in the system. Every country’s debt level is going up. RE may be over priced, but perhaps so are the equity markets.

#156 Godth on 05.14.15 at 10:37 am

#136 Smoking Man on 05.14.15 at 7:21 am

“They will also target those who perpetrate harmful activities for the “purpose of overthrowing democracy.”

Doublespeak, oh the irony. What Democracy?

This is why 9/11 still matters. The never ending “war on terror”, patriot act(s), militarization of police, etc. etc.

We’re not in Kansas anymore.

#157 Doug in London, soon to be back in Timmins 15 years ago on 05.14.15 at 10:44 am

Yes, I also think John and Trish should cash in their winning lottery ticket. In fact they should have done so by now. That 3 million is more than enough to retire on, even if in investments that pay a paltry yield like 2%. What the hell is wrong with them that they don’t see that? While I believe Garth when he tells us that foreigners are a small percentage of buyers in YVR, what if a foreigner buys their house? GREAT, a foreigner financing retirement for Canadians at a time when the Canada Pension plan pays out such paltry amounts of money, and corporate pension plans are struggling to stay afloat. We need MORE, not less, foreigners flush with cash we Canadians can retire with dignity.

A Nortel moment you say? Absolutely!!!!! I’m typing with one hand here, the other holding on to a nailed down table so I can finish posting this comment before getting sucked into the time tunnel and being shot back to the summer of 2000 when Nortel was up to $120 per share. I’m going to relive some memories of back then, like how it rained a lot in July and the excessive amount of mosquitoes it brought, and was cooler than average. By late July it warmed up, I’ll get to relive the last time I paddled the entire length of 6 Mile Rapids on the Groundhog River, 100 Km west of Timmins, as well as my first skydive 3500 feet above the Iroquois Falls Airfield. I may stay there long enough to relive when I started doing freefall, great fun! I think I hear Wake up to the sun by Limblifter playing, the first time I ever heard it, bye!

#158 Daisy Mae on 05.14.15 at 11:09 am

#60 Mr. Obvious: “Within 8 months the existing home was torn down, the lot was divided and two pressed cornflake ‘Vancouver special’ boxes replaced it….”

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

My grandparents home (‘the old homestead’) was torn down after their passing….and a monster home on the 33′ lot replaced it. This has happened all over Vancouver. The exterior designs appear to all be the same — wrought iron balconies, and so on.

#159 Protea on 05.14.15 at 11:19 am

Garth got a question for you . When a offshore buyer (non-Canadian) purchases a home in Canada are they subject to capital gains or taxed on the full gain when they sell the property ??

#160 Don't split the vote on 05.14.15 at 11:22 am

The national post and pollsters are doing everything to get the Cons relected.

They are suggesting the NDP is in the lead nationally. Let’s see if the sheep buy it and lead the Cons to victory once again.

#161 Mike T. on 05.14.15 at 11:24 am

Does Sockeye Sam not realize that with a 3M windfall he would no longer have to pilot a ‘monkey wagon’ (his words)?

Show some respect for the people that help operate your city and smarten up!

Good grief sell.

#162 Marlene from Victoria on 05.14.15 at 11:26 am

The Alberta election results are coming soon to a Federal riding near you.

http://news.nationalpost.com/news/canada/canadian-politics/new-poll-puts-federal-ndp-ahead-of-tories-and-liberals-suggesting-race-has-changed-drastically-after-alberta-election

Like him or not, Mulcair is by far the best leader available. The NDP will sweep the country and will have enough for a strong minority or small majority.
The Duffy revelations still to come will only enhance this.

Forget about TFSA increases – to be revoked.

Instead, look forward to proper taxation of the 1% (sorry Garth, I know this includes some readers and many of your clients).

Finally. Some economic justice.

If you a whining .01 percenter?

“Look in the mirror” rings true for you. (LOL)

Your corruption, lawlessness and shameless greed have pushed society to this point.

You blew it. If you had been more willing to share and support the societies around you the last 30 years like true historical conservatives, this would not be happening.

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

This will be very interesting as it unfolds.

“The race has changed drastically”

You better believe it.

#163 Prairieboy43 on 05.14.15 at 11:33 am

Vancouver 2020. http://www.theguardian.com/world/video/2015/may/14/china-van-carrying-50-people-video

#164 Quebec is Great on 05.14.15 at 11:39 am

John and Trish…

Please listen to Garth & sell your house. Despite emotional attachments, the tax free $$ you earn will set you up for a stress free life going forward. I’m happy to see you are in this position and wish you well. Perhaps next time I hear from you will be from a huge yacht in Barbados.

#165 Bottoms_Up on 05.14.15 at 11:41 am

#154 Mild One on 05.14.15 at 10:31 am
————————————————
Why doesn’t someone in Vancouver start a website where locals can add addresses that appear to be vacant? That would lead to a database of houses that are being treated as investments rather than homes.

Because it’s nobody’s business whether I choose to live in a property one week a year, always, or never. So long as I pay property taxes and other obligations, you have nothing to say about it, even in he People’s Republik of YVR. — Garth

#166 pinstripe on 05.14.15 at 11:46 am

When I visited the west coast recently, the geezers were confident to say that the global currency wars is forcing foreigners with money to move their money with the flight to safety in Canadian real estate. if it wasn’t for foreign and laundered drug money, bc would be dead. apparently there is more foreign money available than what has been witnessed to date.

I heard that marijuana user sales in Canada is a two billion dollars business per year. Money is not the issue in Canada.

anyone who took the wait and price will come down in real estate is not happy today.

#167 Bottoms_Up on 05.14.15 at 11:47 am

#145 robert james on 05.14.15 at 9:30 am
—————————————————–
I think first what needs to happen is a study to figure out just how much foreign money is coming in. I get the feeling there is much more of it funneling in through locals, thus making it harder to track (ie, it is being counted as local purchases rather than foreign). How many ‘locals’ own more than one property? And how many of those properties are empty?

#168 NEVER GIVE UP on 05.14.15 at 11:55 am

UBC Professor David Ley said:

(“As geographer Ley said, the federal and provincial governments are “missing in action.”

Clark hinted at the real fear when she voiced her concerns about doing anything that might endanger the billions in paper real estate wealth that continues to pile up. High housing markets have made a lot of people wealthy and contribute to tax revenues.

But there are clear dangers to the economy, not to mention fuel for racism in continuing the present course.)

#169 Bottoms_Up on 05.14.15 at 11:56 am

#138 Luis on 05.14.15 at 8:03 am
——————————————-
We have discussed this in the past. Immigration does convert into a significant share of monthly sales, I think in the ballpark of 20% for the GTA.

#170 NintendoGirl on 05.14.15 at 12:00 pm

I know the owner of one of those houses. Canadian citizen since the early 70’s, owned the house for years, who moved away to be near family elsewhere in Canada.

So, not HAM for the previous owner.

#171 Bottoms_Up on 05.14.15 at 12:01 pm

#18 TS on 05.13.15 at 7:41 pm
——————————————-
Well some people buy a house before they have kids. And then later find out daycare costs are higher than their mortgage payment.

So ya, daycare is like buying a 2nd house. That can be quite a shock.

The media doesn’t help either, making it sound like there is all this ‘daycare subsidization’. The subsidies are for the families with the lowest incomes. The government tax rebate for daycare is roughly 10% of the yearly cost.

#172 BCD on 05.14.15 at 12:04 pm

Without a doubt, there is no finer example of Greater Foolism in this horny land than what is happening here. Whether the idiot building the monster house on a street of little character homes and 33-foot lots is a foreign speculator (unlikely), a local bozo business guy or deluded Chinese Mainlander is beside the point. This will end in tears.
____________________________________________
Okay, but here is the thing—it WON’T end in tears. Garth, what you fail to realize is that the people ripping these new homes down are VERY sane, and not fools, they have money to burn. See, this is the thing, to the normal person it seems preposterous, but to the uber-rich people from other parts of the world it is chump change. If the market ever crumbles (and it won’t unless laws change either here or in China) the folks who spent all this money tearing down new houses will just laugh.
It’s like when you are a teenager—a used car seems like it will cost a fortune, then when you have an actual career you can’t believe you drove such a piece of junk in the first place! People who don’t have a lot of money aren’t even in the same ballpark as these wealthy investors. You have to be rich to even think lie this.
Or to use another analogy. I watched a documentary on this Mexican druglord. The documentary included images of the dudes basement when his home was raided. They pictures shown were of “pallets” of American money. Not boxes, “pallets”. I think the total figure was in the hundreds of millions. The guy had so much money his biggest problem was trying to hide it. Now, do you see what is happening in Vancouver.

#173 Vamanos Pest on 05.14.15 at 12:12 pm

Really? My house has appreciated so much that I can’t afford the taxes? That’s a problem I’m supposed to take seriously?

Get some real problems, and I’ll get you some real sympathy.

(I’ll bet you’re both healthy…and your kids are healthy and well adjusted…and the two of you are still in love…and at least one of you finds their job fulfilling…and ski trips. But gratitude? What, with these taxes?)

Garth, I’m barely hanging on here. You gotta give me something that makes sense to me. Soon.

#174 Blogbitch on 05.14.15 at 12:17 pm

You’ve got the dog pack frothing at the mouth again, Garth.

I appreciate that you’re going to focus on other topics in the coming posts. I always appreciate your insights, but like the financial situation in this country, shift happens.

#175 Fuzzy Camel on 05.14.15 at 12:35 pm

I’m laughing at all this, foreigners, immigrants, whatever you wish to call them, are having an impact on real estate demand and prices.

In the real world, I am seeing every piece of rentable property being bought up by recent indian immigrants. The Chinese have expensive taste, they are buying up the Bridlepath and other high end areas.

I just sold a duplex, half the buyers were Indian investors. Every duplex-able house in my area is being snapped up by Indians and converted into duplexes.

White Canadians, it seems have very little business drive, most are looking for the white picket fence with no potential to cash-flow.

Now, let us get to the enabler, CMHC mortgages (5% down if you can fog a mirror) and ultra low interest rates. We have a flood of enterprising immigrants, who have never seen a 1980’s housing crash, or interest rates go up (what they can go up??), who can highly leverage real estate. This is great for the economy in the short term, but really bad for Canadians long term. It is killing off any chance of an economic recovery. Essentially the Canadian economy now revolves around immigration, bringing them in with their money, housing them, and building infrastructure to keep up. No more manufacturing here with $500k houses the norm.

Also, your Canadian government is advertising in India/China, trying to get people to move here. That’s right, Canada is actively recruiting immigrants abroad, with the promise of a great paying job and all the maple syrup you can have. Go ask any recent Chinese/Indian immigrant why Canada? Oh, I saw an advertisement from your government in my home country.

Immigration is big business. Wynne loves it too, more taxpayers to milk for her communist teacher friends.

If rates do not go up this fall, they won’t go up ever. You might as well get a variable mortgage and buy up all the real estate you can, because real estate will be the driver of the economy for good.

If rates go up, well look out below.

How refreshing. An anti-Indian comment. — Garth

#176 to_be_frank on 05.14.15 at 12:37 pm

#138 Luis

“What about the impact of the new immigrants in both GTA and YVR? I understand these two cities together receive over 90% of all new immigrants that land in Canada every year. Those account for about 250 thousand/year as per government statistics.”

I fully agree with you – and said much the same thing in my earlier post #76. Immigration is a far more significant influence on rising real estate prices than offshore ownership, except possibly for the most expensive properties. There is willful ignorance of this fact because we do not collect data as they do in the US or Australia. At some point only wealthy people will be able to own a house or productive land in Canada, which is the way it is almost everywhere else in the world. There may be a valuation bubble ready to pop when interest rates rise, but massive pent-up demand fueled by our immigration policies will quickly reverse that. Canada’s population growth in percentage terms is the same as India’s, a country that can no longer feed itself, and the property market there is beyond the reach of anyone but the wealthy. Many Canadians scoff at the idea we are heading in the same direction, but they are sadly mistaken.

How bizarre. Canada has 33 million people while India has one billion more, in a smaller space. Our population growth rate is 1.1%. Figure it out. — Garth

#177 pinstripe on 05.14.15 at 12:39 pm

the buzz at the coffee shop this morning shows that many many Albertans are most pleased to have Rachel run the government.

the slime is starting to rise to the top with the doings from the past many years with the PCs running the province. now that most of the shredding is done the watchdogs are putting a stop to shredding. Even the CTF is quiet about where all ;the money has gone to.

Rachel will have todeal with a Big Mess. The alberta taxpayer has been screwed for too many years by a big powerful government.

#178 Mister Obvious on 05.14.15 at 12:45 pm

#165 Bottoms_Up

Tattletale websites are the first step. Kristallnacht is next. You give me the chills.

#179 Nagraj on 05.14.15 at 1:00 pm

#162 Marlene from Victoria:
I think you may very well be correct in predicting an NDP federal gov’t.

As for taxing me more – after this year’s tax bill I’m leaving the country as soon as that’s possible for me.
Speaking generally, you won’t get more out of the rich than they’re willing to fork over, even at the point of a gun.

But I think you’ve got it quite right re the mood of the country: immense anger, and that anger is justified no matter what province you live in. Average working Canadians understand they get ripped off every day in every way. The arrogance of overcompensated CEO’s is breathtaking. The genesis of the great Canadian housing bubble is NOT first and foremost buyer stupidity; it’s the grossly irresponsible leadership enabling that stupidity – and MSM propaganda.
Provincial debt is also a matter of leadership failure: what would Ontario look like WITHOUT that ca $300B owed? Talk about extend&pretend, or a Ponzi scheme.

“Millenials” won’t vote for either Harper or Trudeau, neither will their parents or any of their friends.

The Notley win in Alberta is not a freak exception – Conservatives and conservatives are well advised to understand the deep discontent in Canada.

Thanks for your brave post.

#180 Conservatives conserve the wealth of the rich on 05.14.15 at 1:04 pm

Don’t split the vote on 05.14.15 at 11:22 am
The national post and pollsters are doing everything to get the Cons relected.

They are suggesting the NDP is in the lead nationally. Let’s see if the sheep buy it and lead the Cons to victory once again.
___________________________________

You are 100% right. The CON owned propaganda media machine is lying in hopes that working class/middle class voters are stupid enough to split the vote(ask garth how the cons feel about us” sheep “) NDP has zero chance of winning and Harpers cons are in the same situation unless Canadians are fooled into split the votes. Don’t worry CONS we ware already on your stupid lies.

#181 Hot Albertan Money on 05.14.15 at 1:16 pm

Story about a Brad Lamb project in Ottawa…

http://ottawacitizen.com/news/local-news/developer-of-anticipated-gotham-condo-building

#182 Holy Crap Wheres The Tylenol on 05.14.15 at 1:24 pm

#136 Smoking Man on 05.14.15 at 7:21 am
WARNING posters.
Canada now has bill C51
USA Patriot act.
Now British Gov doing same.
Free speech under attack. Msm is losing its cattle prong to stear the herd.
Social media and blogs are taking over the sphier of influence.
The machine don’t like it one bit.
Read this fellow slaves.
http://rt.com/uk/258105-new-anti-terror-law/
_____________________________________________
Smoking Man have you been to Great Briton lately or ever? Ask people who live there and they will most likely say big to do, so bloody hell, now sod off.
Also in the same vein at your site, wow is this what some cleric believe. Crap were back in the middle ages again.
http://rt.com/news/233063-saudi-cleric-earth-sun/

#183 Blogbitch on 05.14.15 at 1:26 pm

And this just in… http://business.financialpost.com/personal-finance/mortgages-real-estate/calgary-home-prices-decline-in-march-for-the-first-time-since-2011

#184 Paul on 05.14.15 at 1:37 pm

#165 Bottoms_Up on 05.14.15 at 11:41 am

#154 Mild One on 05.14.15 at 10:31 am
————————————————
Why doesn’t someone in Vancouver start a website where locals can add addresses that appear to be vacant? That would lead to a database of houses that are being treated as investments rather than homes.

Because it’s nobody’s business whether I choose to live in a property one week a year, always, or never. So long as I pay property taxes and other obligations, you have nothing to say about it, even in he People’s Republik of YVR. — Garth
———————————————————-It’s kind of like posting what they paid or sold for whose
bossiness is that? Just adds fuel.

#185 pBrasseur on 05.14.15 at 1:53 pm

The BoC recently announced that it will be loosening its target inflation rates of 1-3% and let it rise higher, if necessary, as per Monetary Policy Report delivered on April 15

Translation: We (the BoC) won’t follow the FED even if a sinking CAD causes inflation. No choice the debt level is just too much, we’re cornered.

I read that a lady in Denmark was able to contract a loan with negative rate. Ain’t that great? Eh how about making money of that student loan…

I guess we’ll kick that can down the road as far as it goes!

http://www.nytimes.com/2015/02/28/business/dealbook/in-europe-bond-yields-and-interest-rates-go-through-the-looking-glass.html?_r=0

http://www.wsj.com/articles/danish-lenders-take-unprecedented-steps-to-combat-negative-interest-rates-1423576590

#186 nobody on 05.14.15 at 1:58 pm

#154 Mild One on 05.14.15 at 10:31 am
————————————————
Why doesn’t someone in Vancouver start a website where locals can add addresses that appear to be vacant? That would lead to a database of houses that are being treated as investments rather than homes.
__________________________________________

Because it’s nobody’s business whether I choose to live in a property one week a year, always, or never. So long as I pay property taxes and other obligations, you have nothing to say about it, even in he People’s Republik of YVR. — Garth

There is almost nothing I agree with in your last two posts, Garth. Your views on the impact of foreign ownership and the impact it has on local populations is myopic and poorly informed. Case in point is foreign owned unoccupied housing. Obviously you haven’t a clue as to the policies of other countries such as Spain to give an example where foreign owned, unoccupied housing is taxed at a premium. And many, many countries and cities have all kinds of laws on what and what size you can build in any given neighbourhood.

Your views on this issue are clearly antiquated and do not reflect the lessons that many countries and communities much older than Canada and Vancouver have learned a long time ago.

You really should spend a bit more time outside of Canada for the sake of your intellect.

#187 Shawn on 05.14.15 at 2:01 pm

The Message is in the Slant…

Blogbitch on 05.14.15 at 1:26 pm

And this just in… http://business.financialpost.com/personal-finance/mortgages-real-estate/calgary-home-prices-decline-in-march-for-the-first-time-since-2011

***********************************
Wow , first increase in March since 2011. That’s the first time in how many Marches? That would be four.

So after this Looooong? string of March increases (apparently three if 2011 also so a decrease) we now get a decrease (of 0.4%). Run for the hills?

Yet I think the headline is a bit overstated. Something like saying it rained for the first time since, well four days ago.

The same information can always be slanted in different ways.

How about Calgary New Home Prices decline by a miniscule 0.4% despite oil plus crash?

#188 Shawn on 05.14.15 at 2:07 pm

Fool Notions

I love the notion that debtor countries will be able to keep rates low forever because they can’t pay more interest.

To much demand for debt so the price will stay low?

That turns the standard supply and demand equation on its head.

Lenders have a say in interest rates. If lenders thought that countries would have the slightest problem paying then interest rates would rise.

Sovereign interest rates are low as long as debtor countries can convince lenders that they have absolutely no problem paying their interest at this rate or any reasonably foreseeable rate.

#189 TRT on 05.14.15 at 2:14 pm

Garth, enough with the the anti-Indian retorts.

I’m Indian. This is not about racism but about how you try to impress your views on others while knowing them to be false. It may help your hedge fund but The majority know the truth.

What hedge fund? The Greater Fool Pathetic Pool? — Garth

#190 Edith on 05.14.15 at 2:27 pm

Vancouver’s economy will thrive this year.

https://www.biv.com/article/2015/5/vancouver-set-have-one-countrys-fastest-growing-ec/

And a shortage of single family listings. A major correction in real esate coming – I think not.

Learn to read. The forecast is for a 16% drop in economic activity in YVR this year, compared to last. — Garth

#191 BCD on 05.14.15 at 2:34 pm

People here on the West Coast are so naive. They can’t imagine a world where there are thousands of people whose biggest problem is finding somewhere to SPEND their vast wealth. Yes, that’s right. The amount of millionaires overseas is staggering! Why is it so impossible to believe house prices are so high in Vancouver? Because people don’t even have the faintest clue how many rich people there are overseas whose wealth was accumulated by a different set of much less stringent rules–and now that wealth is seeking safe havens like Vancouver. The naivety is mind boggling.

Wake up folks.

#192 Edith on 05.14.15 at 2:36 pm

BC real estate sales the hotest in a decade!

http://www.vancouversun.com/business/affordability/home+sales+highest+mark+decade/11055302/story.html

The embedded video about HAM is just for you Garth.

#193 to_be_frank on 05.14.15 at 2:43 pm

How bizarre. Canada has 33 million people while India has one billion more, in a smaller space. Our population growth rate is 1.1%. Figure it out. — Garth

Most of Canada is tundra or shield where you cannot grow food. Half of Canada’s Class 1 farmland is in Ontario and we are losing that to urban sprawl (source: ontariofarmlandtrust.ca/wp-content/…/OFT-Farmland-Loss-Factsheet.pdf). So our sustainable human carrying capacity is much less than India’s, and also unlike most of India, we need to burn trees or fossil fuels to survive the winter. Call my views bizarre if you will, but I think we are too complacent.

#194 Mark on 05.14.15 at 2:50 pm

“I love the notion that debtor countries will be able to keep rates low forever because they can’t pay more interest. “

Nations that control their own currency can, of course, keep rates low forever “because they can’t pay more interest”. However, as seen in many places around the world, this eventually creates severe monetary instability.

Monetary instability can be either hyperinflation, or deflation. The key to knowing which way things swing is whether or not the low rates have induced internal malinvestment or no-investment. Or not.

I would suggest in Japan, the long-term low rate environment, along with the Japanese cultural affinity for productive investment, has created deflation. Japan has used the relatively cheap cost of borrowing to become more efficient as an economy. Japanese savers buckled down and saved more knowing they would only be able to minimally rely upon “interest” as a source of retirement income. Consumption on cheap credit is relatively muted.

Contrast this with the United States. Cheap credit has led to an orgy of speculation in high P/E multiple tech stocks which have never produced earnings (and probably never will). Cheap credit has led to severe consumption. And retirement savings are scant for much of the boomer population. The cultural affinity in the US is to spend, spend, spend! The long-term consequences be damned.

This is why I believe the outcome of low rates in Japan vs. the low rates in the US, may very well turn out to be dramatically different.

Where does Canada fit in? Well sort of in-between, although trending more towards Japan than that of the US. Canada has invested enormously in its energy sector in the past 15 years, securing long-reserve-life resources that provide a very significant base of exports. We have a very thrifty immigrant population. There’s a substantial commitment amongst the Canadian investing community to sectors, such as the precious metals miners, that perform well in deflation. If Canada plays its cards right, the sun definitely could shine on us quite brightly for the next few decades as the rest of the “developed” world re-jigs its finances to be less debt dependant. Also, since Canada has lagged so bad on productivity, there’s an enormous amount of room for improvement which is also deflationary.

#195 sockeye sam on 05.14.15 at 2:57 pm

To Mike T. I’m not disrespecting my passengers.My meaning of Monkey wagon is I’m calling myself the monkey who is driving the bus. Myself and no one else. I’m being disrespectful to myself. I’ll have to work on that. I love my job, my passengers and the company I work for. The whole point I’m getting at here is we don’t want to move.When we had children our plan was to send them to our local university (U.B.C). Why send the kids somewhere far away to school when we have a good one 10 minutes away? We are not wealthy people we can’t afford the airline tickets for them to come back home 2 to three times a year.The plan is to pass the house down to the kids.Again if we sold we wouldn’t be going into an area with a nice view like ours I like my view of downtown and the bay.We’ve thought about selling this place more than once and how many times I’ve said to my wife “these prices can’t keep going like this”. I think I started saying this around the $500.000 mark.More than likely the mega home being on our street is going to raise our taxes. It’s an annual thing.

“We are not wealthy people.” This is obviously false. You just have it all in a non-income-producing asset. Fuzzy thinking. — Garth

#196 hamburglar on 05.14.15 at 3:23 pm

http://www.bloomberg.com/news/articles/2015-05-14/debt-traders-to-fed-we-dare-you-to-try-raising-rates-this-year

——-
dunno bout those fed rate hikes….just a game of words

#197 Made in BC on 05.14.15 at 3:23 pm

#165 Bottoms_Up on 05.14.15 at 11:41 am
#154 Mild One on 05.14.15 at 10:31 am
————————————————
Why doesn’t someone in Vancouver start a website where locals can add addresses that appear to be vacant? That would lead to a database of houses that are being treated as investments rather than homes.

Because it’s nobody’s business whether I choose to live in a property one week a year, always, or never. So long as I pay property taxes and other obligations, you have nothing to say about it, even in he People’s Republik of YVR. — Garth
=++++++++++++++++++++++++++++++++++++

And as I stated yesterday……if property taxes were all that was needed to run the country……..do I need to say more?

#198 Edith on 05.14.15 at 3:25 pm

“Learn to read. The forecast is for a 16% drop in economic activity in YVR this year, compared to last. — Garth”
——————
Actually you’re the one who needs to learn how to read. The article says that the Vancouver economy will still be strong. It (or I) never said it will be stronger than last year.

#199 DM in C on 05.14.15 at 3:25 pm

Blogbitch, uh, ok DA….. still lurking, looking for external validation despite all your trumpeted treasures. Still pathetic.

and this?!? #197 “We are not wealthy people we can’t afford the airline tickets for them to come back home 2 to three times a year.” Well you could if you sold the damn house (sorry Garth). Invested properly, even with a low 4% annual return, you would gross $120k/yr. $10k/month would fund a few trips.

Why the heck are you keeping it to hand down to the kids? IT’S JUST A HOUSE. You only have one life — make use of your lottery win. It’s a big world out there.

My eye is twitching, these people. Garth, I don’t know how you do it.

#200 Mike S on 05.14.15 at 3:31 pm

“Bizarre. As the BoC would be hard pressed to even meet a 2% inflation target given the deflation embedded into the economy. I think the whole thing amounts to a bunch of jawboning, but its probably not going to work. Rates are going to come down further and the BoC is obviously behind the curve given how bad the economic numbers are as of late.”

It seems that they want to address the above 2% inflation that will be caused by the recent drop in CAD, without actually increasing the interest rates

That said, increasing the long term inflation target to say 4% per year, would drive the long term bond return to above 4%, wouldn’t it?

#201 Rational Optimist on 05.14.15 at 3:31 pm

195 to_be_frank on 05.14.15 at 2:43 pm

“Half of Canada’s Class 1 farmland is in Ontario and we are losing that to urban sprawl (source: ontariofarmlandtrust.ca/wp-content/…/OFT-Farmland-Loss-Factsheet.pdf).”

Lay Canadians mostly think land is land. I think complacency is a very good word for it. A huge number of Canadians in the GTA seem to have no issue with our country’s very best farmland being subdivided and sold to them in the form of forty-foot lots.

I remember reading that Canada had as much Class 1 farmland as Hungary, a nation a fraction of the physical size and less than a third of the population. This was before we decided to really put the sprawl in overdrive.

#202 Squirrel meat on 05.14.15 at 3:40 pm

OMG, and now Obama and the Chinese are going to declare martial law and take over texas ….

http://news.nationalpost.com/full-comment/kelly-mcparland-texas-on-alert-for-secret-obama-plot-to-send-chinese-troops-to-seize-the-state

#203 Squirrel meat on 05.14.15 at 3:47 pm

Mad Max 3D – the documentary.

https://www.youtube.com/watch?v=hEJnMQG9ev8

#204 Julia on 05.14.15 at 3:51 pm

#171 Bottoms up
“The media doesn’t help either, making it sound like there is all this ‘daycare subsidization’. The subsidies are for the families with the lowest incomes. The government tax rebate for daycare is roughly 10% of the yearly cost.”

Make that about 4% for infants up to school age. Infant daycare here in Toronto is about $2,500 a month, $30,000 per year. Only $7,000 is tax deductible for a tax credit at the lowest bracket of 15.5% (?). That’s a $1,085 credit on $30,000 cost.

I currently pay for after school care only at $350 per month (going up to $500 in September but we will be done then) for 10 months a year + summer camps (the basic ones running a minimum of $275 a week but specialized can run up to $1,000 per week. We have to go to work so we need something.), 7 to 9 weeks per summer depending how much time off we take. So with only basic summer camps and after school care we easily run to $6,000 and up. At that age, the maximum deduction is $5,000 so a credit of $775, roughly 13%.

#205 S.Bby on 05.14.15 at 3:54 pm

I wish I had John’s “problems”.

#206 The American on 05.14.15 at 3:54 pm

Has anyone considered the considerable amount of counterfeiting U.S. Dollars in recent years has fueled the Vancouver housing market? Just pondering…

#207 Sean on 05.14.15 at 4:09 pm

Who wins with higher home prices?

The ones who bought early and are sitting and counting their on paper gains can only really benefit from taking loans out on their house. If they sell they still need to buy another place to live, its the reason why my parents haven’t sold their 4 bedroom house, it’s pretty much the same value as a small 2 bedroom condo in the city.

So what’s the gain here. Don’t property taxes go up? Who wins with all this over leveraged housing. All the owners who say prices will never go down, what’s the point of gloating if it’s only value on paper, its only real when you cash out and join the rental market.

#208 The American on 05.14.15 at 4:24 pm

At #204: Squirrel Meat, LMFAO! You realize this is like two-week old news? :-) My goodness the “news” and how its reported in Canada is so damn funny. All of America is laughing at the ignorance of the few people in Texas (their governor included) who are so paranoid, the paranoia created by the divisive right-wingers and racists who cannot handle having a black man holding office as U.S. President.

Unfortunately, there are the Tea Baggers in the U.S. who have little power and are laughable. For whatever reason, the rest of the world thinks this is how we think. It is not. The Daily Show in the U.S. brings great balance and perspective to these paranoid people’s antics. As John Stewart said it best, “The United States Government already controls Texas.” Watch this video below, and allow it to continue to get a great feel for how it is reported in a satyrical fashion…

http://www.washingtonpost.com/news/checkpoint/wp/2015/05/05/watch-jon-stewart-rip-reaction-to-jade-helm-15-the-military-exercise-spawning-conspiracy-theories/

#209 Mark on 05.14.15 at 4:28 pm

“It seems that they want to address the above 2% inflation that will be caused by the recent drop in CAD, without actually increasing the interest rates”

First, there’s been no meaningful acceleration in inflation with the CAD$ drop. And probably won’t be, as domestic demand is falling at a rate rapid enough to remove pricing power from the importers and their foreign exporters. USD$ prices are also falling, so the on-the-shelf cost of goods in CAD$ isn’t, and won’t rise.

Additionally, the weakening CAD$ trend is pretty much dead as the past month or two has shown. The CAD$ weakness largely being a reflection of the blow-off phase in the USD$ bubble.


That said, increasing the long term inflation target to say 4% per year, would drive the long term bond return to above 4%, wouldn’t it?

Of course, and probably much higher as if they allow expectations to go to 4% and are unsuccessful at their policy goal, why not 6%? Why not 8%?

This is all assuming that the BoC actually has inflation-inducing policy tools. I’m not convinced that they do. I believe the BoC will have a hard time keeping the Canadian economy out of significant deflation, especially considering the sheer magnitude of the housing bubble and the short-term debt that supports it. But if Poloz wants to jawbone, and scare some people out of bonds by at least positing a future with higher inflation, well, that might help. A big problem with deflation is that investment also comes significantly to a halt outside of a very limited subset of sectors. Investors end up taking the same view as consumers — why invest now, if its going to be cheaper to invest next year

#210 Mark on 05.14.15 at 4:35 pm

“So what’s the gain here. Don’t property taxes go up? “

Property taxes don’t increase on account of higher housing prices, but people feel a lot less grumpy accepting higher property taxes if their houses are appreciating, versus higher property taxes with housing depreciation.

In such case, it could definitely be argued that city workers have benefitted by the city’s ability to raise taxes relatively unimpeded. People who can’t ‘afford’ the tax hikes can simply be told to take out a HELOC to pay them, or use a property tax deferment program.


Who wins with all this over leveraged housing.

Realtors, banks, insurers and government. Which is why we have bubbles simultaneously in all of those sectors of the economy.


All the owners who say prices will never go down, what’s the point of gloating if it’s only value on paper, its only real when you cash out and join the rental market.”

Only very few people can actually cash out, especially with ownership rates elevated to all-time highs. There just aren’t very many willing and credit-worthy individuals out there to buy. Those who don’t own at this point are either committed housing bears, or are otherwise ineligible for ownership.

#211 Mark on 05.14.15 at 4:41 pm

“Has anyone considered the considerable amount of counterfeiting U.S. Dollars in recent years has fueled the Vancouver housing market? Just pondering…”

Those USD$ would have to purchase CAD$, which in turn, would definitely show up in the stats relating to current accounts. As it stands, there’s no evidence of this happening. If anything, with the CAD$ weakness, it may very well be the opposite occurring, that CAD$ is being sold to acquire, amongst other things, USD$.

“Lay Canadians mostly think land is land. I think complacency is a very good word for it. A huge number of Canadians in the GTA seem to have no issue with our country’s very best farmland being subdivided and sold to them in the form of forty-foot lots.”

A couple hundred dollars paid to WestJet, Porter, or Air Canada and the selection of a window seat can easily dispel the notion that the urban footprint of the Canadian population is anything of significance relative to available farm land.

Canada is a significant net exporter of food as well. A little bit of farmland converted to a higher value use (housing) is an insignificant drop in the bucket.

#212 Smoking Man on 05.14.15 at 4:46 pm

#182 Holy Crap Wheres The Tylenol on 05.14.15 at 1:24 pm
#136 Smoking Man on 05.14.15 at 7:21 am
WARNING posters.
Canada now has bill C51
USA Patriot act.
Now British Gov doing same.
Free speech under attack. Msm is losing its cattle prong to stear the herd.
Social media and blogs are taking over the sphier of influence.
The machine don’t like it one bit.
Read this fellow slaves.
http://rt.com/uk/258105-new-anti-terror-law/
_____________________________________________
Smoking Man have you been to Great Briton lately or ever? Ask people who live there and they will most likely say big to do, so bloody hell, now sod off.
Also in the same vein at your site, wow is this what some cleric believe. Crap were back in the middle ages again.
http://rt.com/news/233063-saudi-cleric-earth-sun/
……..

Goes to show, mental illness and religion always go hand in hand.

What a mental case that guy is.

#213 Leo Trollstoy on 05.14.15 at 4:48 pm

As inflation continues to rise in Canada, we will see what happens to the over indebted.

Inflation will clear 2% within the year.

#214 Vanecdotal on 05.14.15 at 4:48 pm

#197 sockeye sam

Dude, surely you realize, you would almost instantly become “reasonably” wealthy people if you sell now?

As other posters have pointed out, if you invest the proceeds of the house sale, (even conservatively) in a diversified portfolio,(hire a fee-based advisor, you could hire GT if it suits you). The cash those investments throw off annually would PAY for your rent in the SAME neighbourhood, and still leave you more than the median household income (perhaps quite a bit more) to live off of each year, WITHOUT even touching your capital! It keeps GROWING while you live off the $ the capital GENERATES for you.

If you stay and try to “time” the housing market you are risking the bulk of your paper wealth in a single asset. This market is at the mercy of political whims (at every level, largely beyond your control, both here and offshore). Values could rise some more. It could flatline. It could correct dramatically. Or all of the above, at ANY time going forward. Are you comfortable with that level of risk?

– You would be DEBT FREE
– If you choose to, both of you could RETIRE now, comfortably
– You DO NOT need to leave your ‘hood! You can rent an equivalent SFH home on a long term lease in the SAME area and still have plenty to live on each month WITHOUT touching the invested capital
– No property taxes (aside what’s already factored into rent)
– No maintenance costs
– Completely mobile, free to travel etc.

I can understand you seem emotionally attached to the house, but is seems the Universe is giving you a huge opportunity here.

If you chose to keep working, ALL your after tax income could be added to the invested sum to compound the growth, such that you could well be quite even MORE “wealthy” by the time you chose to retire.

You can structure your investments to leave a (sizable) tax-efficient legacy for your kids (that will begin to grow right away, while your still here on this sphere with them). This could potentially well exceed the value of them simply inheriting the home in the long run.

That is a beautiful area, and I emphasize with you, it’s sad to see the changes it’s undergoing, heartbreaking, but as someone else said, you’re tilting at windmills presently. You have WON the Van RE Lotto man. Know when to fold ’em. Best of luck to you.

#215 CalgaryRocks on 05.14.15 at 5:03 pm

This is why I like dogs better than people.

Guy is sitting on 3M$ lottery ticket and yet he complains. I wish I could tell him exactly what I think without getting deleted.

#216 AnotherVanRenter on 05.14.15 at 5:30 pm

$3800/month at 19th and Blenheim.

http://vancouver.craigslist.ca/van/apa/5021103173.html

Rent this place and retain $11,200 per month (pre-tax) of the income from house sale.

(unless this is the tear down on your street!)

#217 Julia on 05.14.15 at 5:30 pm

Who knows, they could sell the house and rent it back.

A woman I know sold her condo her in Toronto last year and while talking to the purchaser, found out it was for investment purposes and he was looking to rent. She sold and hasn’t moved.

#218 Squirrel meat on 05.14.15 at 5:48 pm

#211 The American on 05.14.15 at 4:24 pm

At #204: Squirrel Meat, LMFAO! You realize this is like two-week old news? :-) My goodness the “news” and how its reported in Canada is so damn funny. All of America is laughing at the ignorance of the few people in Texas (their governor included) who are so paranoid, the paranoia created by the divisive right-wingers and racists who cannot handle having a black man holding office as U.S. President.

Unfortunately, there are the Tea Baggers in the U.S. who have little power and are laughable. For whatever reason, the rest of the world thinks this is how we think. It is not. The Daily Show in the U.S. brings great balance and perspective to these paranoid people’s antics. As John Stewart said it best, “The United States Government already controls Texas.” Watch this video below, and allow it to continue to get a great feel for how it is reported in a satyrical fashion…

http://www.washingtonpost.com/news/checkpoint/wp/2015/05/05/watch-jon-stewart-rip-reaction-to-jade-helm-15-the-military-exercise-spawning-conspiracy-theories/
—————————————-
Comedians and cartoonists are definitely needed to keep the world sane!

#219 Realtor007 on 05.14.15 at 6:05 pm

Did your friend invest his money? If so, the returns have kept pace with Van house prices, and normally exceeded them. Additionally, mortgage rates have dropped, so I think your story is bogus, or your friend just sat cash. As for ‘outing’ people owning houses near you, how is that any of your business? You don’t own the street. — Garth

———————————————-

There is a lot of wrong in this statement, houses are bought on leverage so unless your cash is equivalent to that leveraged amount or very close you’re not making anywhere near what housing has made $ for $.

Leverage works well with financial assets, also. This comment is still bogus. — Garth

#220 NoOneOfConsequence on 05.14.15 at 6:09 pm

RE: #213 Mark

Property taxes are determined by taking a percentage of assessed value.

Assessed value is done by crown corporations to determine the market value of property.

Therefore, as your home increases in “value”, the amount of tax you pay also increases.

Every province and city in Canada uses this structure. Rates and processes are publicly available information.

If you are feeling investigative…you can research and see that increasing property tax rates are directly correlated to decreasing property values. There is some lag…but the correlation is there.

This is why many cities boast “no property tax increases”…it’s because assessed values have been steadily increasing…resulting in more $$$$$$$$ paid to municipal governments.

#221 PEAK STUPIDITY on 05.14.15 at 6:12 pm

HIGHEST SALES IN APRIL FOR BC IN A DECADE. WHAT IS GOING ON???

http://www.msn.com/en-ca/money/topstories/bc-home-sales-in-april-hit-highest-mark-in-a-decade/ar-BBjMue4?ocid=mailsignoutmd

#222 Shawn on 05.14.15 at 6:14 pm

Strange Claims Indeed…

Mark:

Only very few people can actually cash out, especially with ownership rates elevated to all-time highs. There just aren’t very many willing and credit-worthy individuals out there to buy. Those who don’t own at this point are either committed housing bears, or are otherwise ineligible for ownership.
*****************************************

Prices would not be near all-time highs if there were not a fair amount of buyers. Certainly not everyone can cash out.

And the argument by those who say the gain is not real until cashed out is silly. The gain is real until the market value goes down. One could make the same silly argument about cash since its value could decline. Value is as a point in time. It might not be there tomorrow but it is real today.

#223 Vanecdotal on 05.14.15 at 6:27 pm

@ sockeye sam

Another aspect to consider, as you seem to be stuck on the (irrational) but somewhat understandable “emotional” component of home “ownership” and still want something “that’s yours”.

Rent in your Van ‘hood, and if you “must”, buy (with cash, do careful DD on the local market and use Garth’s Rule of 90 – talk to an advisor first) a lovely cottage/cabin/vacation home in an already depressed-market locale OUTSIDE Greater Van. There are PLENTY of regions that fit this criteria to choose from starting just a few hours’ drive away, as well as globally. This can then be your “forever family home/gathering spot” for your family to return to regularly, or perhaps be where you ultimately want to retire to.

In the end, the kids/grand kids get the cottage as a bonus in the legacy. Win/win/win, and you still get to be a 1%r.

#224 TheAwakenedOne on 05.15.15 at 2:56 am

Sir Garth:

Always enjoy reading your posts and learning lots from it. I am holding out and waiting for the opportune moment when judgment day comes on this house of cards in YVR.

Then I’ll buy a small modest house with a yard and I will raise a Lab Retriever and name him Gartho… This is my dream.

If you’re wrong: I will continue to rent this small room for the rest of my remaining life cycle (in a 4m x 9m Sh*t-hole) and will personally custom-order a voodoo doll crafted in your likeliness… This is my nightmare.

But I still be dreaming of having a small yard and raising a Lab Retriever… maybe not in this lifetime.

What say thou, Sire ?

#225 Ogopogo on 05.15.15 at 10:50 am

I’m so glad I was financially illiterate in 2000. My Business major friends in university were all loading up on Nortel. I didn’t have a clue how to invest.

I remember their anguished faces after the collapse. I think they secretly envied my minuscule (by comparison) student loans, since so many of them experienced margin calls.

#226 George on 05.15.15 at 3:48 pm

DELETED (Anti-Chinese)