Awesome

CHEATER modified

As you might imagine, it’s a burden being right most of the time. Not that I mind the genuflecting or rose petals strewn in my path, the autographs, cool swag and shapely, panting groupies, but it puts more pressure on me. Like, how do you beat this?

  • Yes, rates go up in September.

The economics crew at Scotiabank has decided to throw their weight behind me. “With perhaps two strokes of a pen, the domestic economy has improved enough to raise our conviction that the Federal Reserve will hike by September,” the bankers said on Thursday. It’s because (as I told you) the economic data just keeps on getting riper.

Big job gains (280,000 in May and over 200K in 15 of the last 16 months), lots of unfilled positions (best in 14 years), boffo car sales (Chrysler’s sold more every month for 62 of them), shrinking deficit (best in nine years) and now improved trade figures, climbing home sales and plump retail sales.

Remember all those doomers and America-haters who came here to chortle after lousy Q1 Winter-from-Hell econo numbers? Forget that. “ We may now be dealing with the possibility that the economy didn’t actually contract by 0.7% in Q1 and may have either contracted by less or was perhaps even flat, and that Q2 could be easily 2.5% growth with the significant possibility of 3%+ growth,” says Scotia.

So what?

So, the Fed hikes in September. Bond yields continue to fatten. And you have seen the bottom for Canadian mortgage rates. Once the Fed moves, it will keep at it. The target is about 3% higher than now by the end of 2017. And the Bank of Canada will eventually follow suit. Count on it.

  • No, the Chinese are not eating Vancouver.

Sure, the local real estate cartel would love you to believe the Yellow Peril is about to price you out of a house forever (so buy now). We’ve seen marketers get local ladies of Asian heritage to pose fraudulently as Chinese buyers, plus masquerade local Asian-Canadian realtors as Mainlanders representing moneybag industrialists from Guangdong. We’ve heard about the rich Asian dudes invading White Rock, Naniamo and currently (horrors) Victoria.

But it ain’t so. As I told you. Now the BC Real Estate Association has decided to back me up. Chief egghead Cameron Muir and I may not agree on a lot of things, however this is an exception. He’s written a report to spell out why. “When we look at this idea that foreign investors are such a dominant force in the housing market that they’re driving up housing prices and eroding affordability for first-time buyers, we find that there’s no evidence of that,” he concludes.

Not that there’s no Asian influence, of course. And it’s often concentrated in certain areas, like the Westside and Richmond, or Markham, Unionville and Richmond Hill in the GTA. But nobody (including me of the BCREA) can find evidence that offshore money amounts to anything exceeding even 5% of the total market. (In Victoria the realtors say it’s 1.6%.)

“Foreign investment is less than five per cent of the market in Metro Vancouver, and through our collection of available data and analyses,” says Muir, “we haven’t found one data point or one piece of analysis that points to foreign investment as outside of five per cent of overall sales activity in the region.”

If Chinese folks looked like Germans, people in Vancouver might have to blame the real culprits. Themselves.

  • Yes, you borrowed too much. This won’t end well.

The Bank of Canada knows what’s coming, saying on Thursday interest rates will “normalize” (that means ‘go up’) and people who borrowed too much could be screwed. In the event of an economic shock, the bank adds, “the impact on the economy and financial system would be severe if it were to materialize.” This is because, “In the event of a deeper and more widespread shock to incomes, highly indebted households with limited liquid financial assets could have difficulty servicing their debt.”

The most likely catalyst is a jump in unemployment, the kind now being felt in Alberta – where people have the greatest debt (250% of average incomes, vs 164% for the country as a whole). Of course, real estate is at the epicentre of this borrowing orgy, since we’ve used cheap money – not income gains – to buy ever-pricier homes.

Says the bank: “Although house-price growth on a national basis has slowed modestly, it continues to outpace income growth, and over-evaluation in the Canadian housing market remains a concern. As the economy gains strength and interest rates begin to normalize, the most likely scenario is that house prices stabilize at a level consistent with underlying fundamentals.”

Hmmm. Do you think the ‘underlying fundamentals’ support $1.1 million houses in 416 and $2 million homes in YVR?

Me neither. And I’m omniscient.

203 comments ↓

#1 Roderick W. McIverson, IV on 06.11.15 at 6:01 pm

Hilarious. My wife hung an identical sign outside our house when I got home from my “work weekend” with Katie. Talk about EMBARRASSING!!!

#2 Fred on 06.11.15 at 6:03 pm

FIRST!!!

(yay!)

#3 Victoria Real Estate Update on 06.11.15 at 6:05 pm

At the end of May the total number of single family homes sold across Greater Victoria (January through May) was 10% less than in 2007 without population adjustment and 15% less than in 2007 with population adjustment.

Total Single Family Home Sales
. . . .January through May. . . .
. . . . . Greater Victoria. . . . . .
. . . . . . . . . . . . . . . . . . . . . .
2007…*****************
2015…**
————————————————-
. . . . .-15%. . . .-10%. . . . 0%

(source: Victoria’s board)

2007 represents an average year for Greater Victoria in terms of total SFH sales (more on that soon).

To understand the big picture we must look at interest rates:
* In May 2007, 5-year fixed mortgage rates were at 5.64%.
* In May 2015, 5-year fixed mortgage rates were at 2.44%.
(source: ratehub.ca)

Lowering interest rates has a stimulative effect on a housing market. The total number of SFHs sold so far this year in Victoria should have been much higher than in 2007 (January through May), not 15% lower.

Imagine if mortgage rates had been 2.44% in 2007. There would have been a lot more sales that year.

Imagine if rates today were at 5.64%. Complete disaster.

SFH sales have increased year-over-year, but that’s the small (short-term) picture. You’ve already read about the big (long-term) picture.

#4 Victoria Real Estate Update on 06.11.15 at 6:09 pm

It’s pathetic that the local media has recently tried to convince Victorians that wealthy buyers from China have recently discovered Victoria and are heating up the housing market.

The source of their information? Realtors.

No stats. Nothing. Only the opinions of realtors.

Last year foreign buyers accounted for 1.6% of property sales in Greater Victoria.

Of course the local media didn’t mention that.

Even if sales to wealthy buyers from China did increase in Victoria, it wouldn’t stop the price slide that has been in effect since 2010.

As I’ve pointed out several times, wealthy buyers from China were buying properties in Vancouver in 08-09, but that didn’t stop prices from correcting 12% at that time. Prices would have continued to fall in Vancouver if interest rates hadn’t suddenly been slashed from near normal levels to emergency levels in 2009.

There’s no proof that more wealthy Chinese buyers are buying in Victoria. Even if it was true, we know from Vancouver’s recent experience that it wouldn’t turn Victoria’s falling housing market around.

Perhaps the local media will start using the opinions of local used car salesmen when they write about the status of the local economy.

Pathetic standards – now that’s newsworthy.

#5 WHATFORWHAT? on 06.11.15 at 6:10 pm

FIRST

#6 Sebee on 06.11.15 at 6:21 pm

Canadian Consumers = Greece? Or not yet?

#7 diesel8019 on 06.11.15 at 6:22 pm

Garth, I agree that bank of Mom, overdose on credit, etc is the major factor in Vancouver RE, but you still don’t give enough of a nod to the HAM influence in this market. The real data isn’t correct, it’s actually non-existent:

http://www.scmp.com/comment/blogs/article/1819499/exposing-bogus-analysis-ignores-role-foreign-money-vancouvers-housing

#8 Mister Obvious on 06.11.15 at 6:23 pm

That picture has ‘Vancouver east side dump’ written all over it. Or maybe ‘Burnaby dump’. Either way, it’s probably near seven figures.

#9 JSS on 06.11.15 at 6:25 pm

Ok, I admit I’m kinda dumb even though i read this blog daily. but is it safe to assume that as the US economy grows, Canada’s economy will also grow, meaning more profitability for Canadian corps? leading to higher wages, and higher interest rates here too?

#10 sideline sitter on 06.11.15 at 6:26 pm

Once the media, and *gasp* the RE Boards concede on this bubble, you know it’s about to deflate!

#11 PM on 06.11.15 at 6:26 pm

Cool. Approaching the midway point of the year. Any portfolio re-balancing tips to consider for the later half the year?

#12 Millenial on 06.11.15 at 6:31 pm

Hey Garth,
So when they raise rates in September how much do you think it’ll go up?

0.25%?

1.0%?

#13 Christopher Dillon on 06.11.15 at 6:33 pm

Here’s a different take on the BCREA report:

http://www.scmp.com/comment/blogs/article/1819499/exposing-bogus-analysis-ignores-role-foreign-money-vancouvers-housing

#14 ian young article on 06.11.15 at 6:40 pm

Can you comment on this article by Ian Young?

In the comment section, a reader asked about house price index increases from cities across Canada… with the implicit assumption that foreign buyers are not buying in Quebec City. Ian Young claims that price-index alone isn’t sufficient. Instead, it should be affordability, and he claims that Quebec City folks are making more where as Vancouver is not, and that is why the unaffordability is high.

Consequently, the difference between real-estate appreciate in Vancouver vs Quebec City versus affordability must heavily suggest money from “foreign sources” (irrelevant of whether they are “foreigner” or not).

http://www.scmp.com/comment/blogs/article/1819499/exposing-bogus-analysis-ignores-role-foreign-money-vancouvers-housing?comment-sort=all#comments

Ian Young might as well work for the real estate board. He is obsessed with mythical heaps of foreign money and ignores the fact all real estate is local. — Garth

#15 HFT Dude on 06.11.15 at 6:41 pm

Canada and the U.S. are going in opposite directions.

“According to the Fed, U.S. households’ net worth rose $1.63 trillion in the first quarter of this reaching, reaching a new, all-time high of $84.9 trillion. Most of the gains have been in financial assets and savings accounts.”

“Importantly, the latest surge in wealth was not driven nor sustained by any debt “bubble.” As the chart above shows, household leverage has declined significantly since 2008, all the while net worth rose to new all-time highs. Household leverage today is about the same as it was back in 1990.”

http://scottgrannis.blogspot.ca/2015/06/household-wealth-increases-leverage.html

#16 can't have it both ways on 06.11.15 at 6:44 pm

If we have no data on foreign ownership
how is it that the magic 5% number comes about?

Why not 15%

What I’d really like to see is an analysis on price vs demand. If demand increases/decreases by 5%, how much impact does that have on house prices?

Simple thought analysis:
100 houses for sale
100 buyers
average price sold = 500K

95 buyers –> average price sold = ???
105 buyers –> average price sold = ???

#17 Pope Francis on 06.11.15 at 6:51 pm

Yes Garth, you are omniscient, and that is why I read your blog every day. Except Sunday, of course. You will go straight to Hell for posting on the Sabbath so flagrantly. But otherwise, you have my blessings, my son.

I just wanted to explain to you Canadians why I only allowed 10 minutes for your Prime Minister to meet with me.

http://www.msn.com/en-ca/news/world/harper-gets-only-10-minute-papal-visit/ar-BBkWTTA?ocid=mailsignoutmd

The truth? Your PM is an insufferable a-hole. Putin was at least entertaining and engaging, not a complete lying fraud, which is why we hung out for 50 minutes the day before and really hit it off.

Harper? A slimy douchebag even by the standards of an institution that has as long and bad a record as ours does.

Please keep him at home in Canada. Better yet, make sure he is not in office much longer. Then I will come visit Canada and give a full two hours to his successor. Promise.

Thank you and blessings to you all.

#18 rk usa on 06.11.15 at 6:51 pm

re: The target is about 3% higher than now by the end of 2017. And the Bank of Canada will eventually follow suit.

eventually but only if the Canadian economy is doing as well, (doubt it) either price of oil goes up big time or manufacturing employment otherwise Canada will lag US rates for some time to keep the dollar down to encourage manufacturing exports to replace oil

#19 Rory on 06.11.15 at 7:03 pm

The cheap money is world wide and supporting bubbles everywhere. Real estate in Canada, Stocks in the US, Bonds in Europe etc… All 3 are bubbles.

#20 Canadians flying blind on 06.11.15 at 7:07 pm

Garth what can consumers do to demand or force the RE industry to open up their grip on information? The biggest purchase of everyone’s lives and you have to trust biased people with vested interests. Realtors and their gang of thugs have inflated the RE. The Re industry HATE free and open markets. Why won’t the government in Canada force those criminals to open up MLS? Who can we write letter to? Let start a movement to open up MLS to everyone. Communist realtors have got to go.

#21 Tony Mears on 06.11.15 at 7:07 pm

#3 Vancouver corrida Real Estate Update

“2007 represents an average year for Greater Victoria in terms of total SFH sales (more on that soon).”

Nonsense. 2007 was the HIGHEST year in terms of unit volume. Here are the actual annual numbers from the VREB website.

2005 4210
2006 4008
2007 4464
2008 3335
2009 4117
2010 3236
2011 3069
2012 2907
2013 3068
2014 3451

This invalidates your whole line of reasoning. As I said yesterday, obsessing on 2007 is pointless. The Victoria market has been balanced since 2013 and is now moving into a sellers market.

#22 John on 06.11.15 at 7:08 pm

oday’s Real news from the 905 real world,too real! Real Estate Agent admits that housing sales still happening but prices are soft; realtor selling off all mutual funds; bank refuses ‘bridge financing’………… Translation: While houses are still selling, the velocity is slowing precipitating lower prices to keep things moving, and not helping morale is the refusal of at least one major bank to approve a simple bridge finanancing application for fear of a house sale @ one end collapsing before Canada Day, resulting in a caputualtion move of the realtor to go all cash on his investment porfolio and HUNKER DOWN. Full Stop. CORRECTION

#23 June on 06.11.15 at 7:12 pm

June, rates go up next week. Stocks are doing too well for that not to happen sooner than September. Enjoy the panic, it won’t be epic but 10-20% haircut in one year. Check Calgary real estate board stats for what is coming in the west…

#24 Dave in NS on 06.11.15 at 7:13 pm

The Bank of Canada knows what’s coming, saying on Thursday interest rates will “normalize” (that means ‘go up’)

Unless they don’t. This “normalization” (increase) has been predicted (hoped for) for some time yet it hasn’t happened yet.

My prediction: Interest rates will likely increase. Unless they don’t.

I had a finance professor who used to say, “If you think you have all the answers, you probably don’t understand the questions.” (That and, “The market is smarter than you are.”)

It will do what it does because it always has. And it will do so in spite of our predictions. (Please look at previous posts on this blog over the last several years and tell me I am wrong- there have been a lot of bold, cataclysmic and ultimately incorrect predictions)

Whatever it is that destroys the “unclean” (ie those in debt), IF it does it will serve no one. You might feel better that you are “right”, but we will all be living up trees and our investments will be worth toilet paper in the face of the great, massive correction many seem to be wishing for. So being right is great. Be careful what you wish for.

Such a correction, if it ever happens will server no one. Not even the clever.

#25 Ray Vasquez on 06.11.15 at 7:16 pm

Any rate increase is peanuts and will not be sustainable for long.

This is so lame about a 0.75%, 0% to 0.25% rate going to 1.5% to 2.00% in 1 to 2.5 years at best. If we see this at all.

Just 8 years ago, central bank rates, Bank of Canada, U.S. Federal Reserve were in the 4.5% to 5.5% range.

Worldwide central banks are cutting rates from 6%, 5%, 4% range to 3%, 2%, 1.5% like South Korea, Australia, New Zealand, Thailand etc. not to mention the ECB at 0.05% or lower, negative rates.

We are in a slow growth, stagnant economy and poor job quality creation. Wait until 2016, 2017, 2018 come around.

This is such a joke all this talk about increasing interest rates. Even the bond market yields are still peanuts and going up at a crappy, low pace.

#26 Chaddywack on 06.11.15 at 7:16 pm

People at work were discussing Muir’s article today and the consensus from them was “It’s a bunch of BS”

Whether it’s true or not the entire city of Vancouver believes that it’s foreign money.

#27 Andrew Woburn on 06.11.15 at 7:17 pm

Oops.

“Toronto condo vacancies surge to all-time high”

http://www.theglobeandmail.com/report-on-business/economy/housing/toronto-condo-vacancies-surge-to-all-time-high/article24893918/

#28 Goldie on 06.11.15 at 7:21 pm

What were Mr. Muir’s criteria that he used to determine foreign ownership as a percentage of the overall market? Everyone keeps saying that it’s extremely difficult to figure it out, so how did he solve it?

“If Chinese folks looked like Germans, people in Vancouver might have to blame the real culprits. Themselves…” – This is obviously intended to be inflammatory and I suppose I’ll take your bait. We can’t hold honest discussions about Chinese, yes, CHINESE ownership in Vancouver without being slandered or libelled with accusations or insinuations of racism every time the subject comes up. Accusations of racism, more so than at any time in the past, are used to stifle debate in our country these days if you’re white and happen to have a different opinion to the official narrative or happen to have a disagreement with any nonwhite ethnic group.

If you’re not 100% pro-immigration, you’re a racist… If you don’t side with an ethnic minority against the police in any incident, you’re a racist… If you don’t support every different religion under the sun, you’re a racist… If you think it’s unfair that some groups pay less taxes or qualify more easily for loans that you yourself would be denied even if you met the exact same economic credentials, you’re a racist… The list goes on and on…

And what’s truly racist is that the above only applies to white people. If any other group has an objection to something done by whites, accusations of racism are bypassed and the actual issue in question is examined. Sometimes we even say that they are coming forth with legitimate grievances or that their issue stems from “institutional racism”.

Sure , it’s true that some people from any ethnic group are going to turn out to be racist, but it’s also true that many others who are unhappy with a certain situation are unhappy with things that have nothing to do with the race of the other group who are making their lives harder, which brings me back to your insinuation above: If Germans were buying up Vancouver real estate and driving the prices ever more absurdly higher, I, and many others, would be just as ticked about it. Perhaps even some nonwhite people would be unhappy about it, which would of course make them racists.

I still love you Garth but sometimes we need to cut through the PC crust and pull out a piece of the undercooked, bloody meat filling…

#29 Richard on 06.11.15 at 7:22 pm

Interest rates will have to follow the Americans to the upside or foreign investors will not invest here .That is why interest rates in Canada are usually higher than the U.S.

#30 mitzerboy aka queencity kid on 06.11.15 at 7:28 pm

Blessed be garth
and thank you

#31 Dan on 06.11.15 at 7:29 pm

Monster reversal in yields today. It’s still way too early to call a bottom in interest rates.

#32 Metro Van Observer on 06.11.15 at 7:29 pm

Key take away from Muir’s report itself…

“While no hard number on foreign buyers
in the Metro Vancouver housing market
exists…”

The first step needs to be to begin compiling this data. How can one say that foreign investment is not significant without hard evidence?

Is it in the BCREA’s self-interest to quiet calls for a tax or restrictions on foreign investment?

If foreign investment is so insignificant, then why the hesitation on the part of the gov’t to implement controls that really shouldn’t impact the market anyhow then?

#33 MSM-free Zone on 06.11.15 at 7:30 pm

Should our own BoC decide to follow suit in ‘normalizing’ Canadian interest rates this fall, I wouldn’t count on any market correction toward affordable homeownership any time soon.

Having been accustomed to sucking gravy from the CMHC teat for so long, there is no way the Big Six nor CREA will ever allow supply/demand market forces to normalize the Canadian housing market.

Should recent HGTV-addicted home buyers, who bought with 5% down, suddenly find themselves over-extended at renewal time, you can be certain that both the Big Six and CREA already have their lobbying briefs prepared, ready to convince any future Finance Minister that a return to 35 or 40 year terms is the only way to keep monthly payments ‘affordable’ for these self-inflicted morons.

Besides, what Finance Minister in his right mind would be willing to eat crow and billions in government-backed CMHC mortgage defaults at election time?

#34 Goldie on 06.11.15 at 7:44 pm

#17 pope Francis

I’ve always liked you as a pope , and that look of disgust on your face in the picture you linked to as you stand next to Harper makes me like you even more. Surely it must have made your skin crawl having to stand so close.

#35 Rifles on 06.11.15 at 7:45 pm

Meanwhile over back at the National Post we see a house in West Van go for $1m (37%) over asking to…wait for it…a buyer from mainland China. Nothing to see here. Can and Garth say so and they have the numbers to prove it.

#36 Llewelyn on 06.11.15 at 7:45 pm

Get out the pom poms and sing along with the Bellamy Brothers

We have freedom, we have money.
Here in the land of milk and honey.
Counting our chickens way too soon.
Kids of the Baby Boom.

#37 pypes_diver on 06.11.15 at 7:54 pm

Garth, you are totally right that interest rates will be rising but you’re off to about 9 months.
You can be sure to mark it on your calendar. Americans haven’t learnt their own lesson about watching how they spend. The stock market is too volatile to take any sudden rate change at this time which will lead to the days of depression.
1. They are averaging $7,281.00 in credit card dept.
2. The FED’s have skewed and distorted figure of job creation, similar to our Realtor’s have done with the housing market in Canada.

http://www.thesimpledollar.com/the-state-of-american-credit-card-debt-in-2015/

http://www.bloomberg.com/news/articles/2015-04-03/weak-jobs-gain-gives-fed-new-reason-to-delay-first-rate-increase

http://www.cnbc.com/id/102514623

#38 Georgekal on 06.11.15 at 7:59 pm

Another question about the Chinese myth is why would an investor buy one house in GTA for $1.0 mill when they can buy 2-3 houses in the Florida and California and have some rental income.

#39 IM in C on 06.11.15 at 7:59 pm

The political party that allows a house-a-geddon (or anything remotely like it) to occur on their watch will be the political party that will be sent out to the political wilderness for the next 25 years!
So, any sort of faltering in the Canadian real estate market… ain’t gonna happen

#40 bigtown on 06.11.15 at 8:01 pm

My boomer sister is moving to one of those backwaters present in all Canadian provinces where you can rent a full house for under $600 a month due to the local closing of forestry and fishing etc. If you check out the small towns and cities across our great nation you will see these new hybrid locals with their very expensive COLUMBIA duds and TILLEY hats parking their $50,000 Lincoln MKX in town trying to look regional but failing.

The most courteous Canadians I bump into in the GTA and in Canada in general seem to be Asian folk from Vietnam or China or Hong Kong or Korean or Thais. I am totally biased in that area from sixty years of more than excellent interaction with these good people.

#41 Doomer Gloomer on 06.11.15 at 8:05 pm

Hey Garth, You seem so confident about a rate hike. I am willing to bet you $10,000 (ok make it $100,000) that we won’t see a rate increase in 2015 from the Yellen or Poloz. Easiest $100K you’ll ever make if you take my bet. Do we have a deal? Just reply accepting the bet and I will reply with my info. I am willing to put the cash in escrow if you are.
I am betting you won’t.

#42 Johnny Polymer on 06.11.15 at 8:05 pm

“Interest rates will be going up in September”

You just mean going back to 1%, up to me a person who reads this blog and your words daily as one of your “groupies” is waiting for it to be past that.

When does your crystal ball foresee that to happen?

Thanks for not deleting this in advance.

#43 MD on 06.11.15 at 8:09 pm

Every month a quarter million baby boomers are retiring from work force in USA, there goes the reason for job creation.

#44 BS on 06.11.15 at 8:10 pm

Meanwhile over back at the National Post we see a house in West Van go for $1m (37%) over asking to…wait for it…a buyer from mainland China.

Did you notice they only reported who bought this one house? Why this one? There were literally hundreds of other houses sold that very same day. They didn’t report on the ones sold for way under asking or the majority of other houses that were bought by locals. They didn’t report on the thousands of other houses that have been up for sale for months with no offers.

These stories are contrived by realtors and people lap it up. It starts with listing the house for way under market value, then if a Chinese guy bites they call in the media. As Garth pointed out when they can’t find a real Chinese person they fake it. All staged.

It is only the realtors word you are taking that it was in fact a foreign buyer. The media never did any due diligence to confirm it was a foreign buyer or investigated if the house was purposely listed below market value to create multiple bids. I can’t believe people fall for this stuff. It is called marketing.

#45 ALL CAPITAL LETTERS AND RUN ON SENTENCES on 06.11.15 at 8:10 pm

@ #6 Sebee on 06.11.15 at 6:21 pm
“Canadian Consumers = Greece? Or not yet?”

Not yet, … actually, probably never. You are equating Greek national debt with Canadian personal debt, which is not a fair comparison.

Greek citizens, for the most part, have a long standing culture of minimizing what they wish to share with the state – tax evasion, coupled with corruption. The Greek gov. is actually the “consumer” who overspent leading to their current dilemma. This is in contrast to Canadian consumers who, for the most part, willing pay property, sales and income taxes to the state.

So if you wish to make an unbalanced comparison that is fine, but it is actually the Greek government that has made commitments without a supporting revenue stream. In Canada, it is the consumer who has made the commitment, probably without foresight of future economic impacts. So the comparison would be if Canadians were buying homes, despite only half of the home buyers ever having jobs to make payments on them. Clearly not the case.

Another big difference is the Greek Government can’t possibly “sell” it’s assets to back out of it’s long-term commitments…. Hey , Angie… how about $10B in forgiveness, for say the Acropolis, we’ll even throw in an unused freeway, and an under-capacity shipping hub. In-debited Canadian citizens conceivably could, albeit for a possible loss, sell their homes. And some probably should while prices are high.

Which brings me to a question for Garth, or the minions, which is actually slightly more relevant to today’s topic…
Whatever the percentage of foreign activity is in the Canadian housing market, be it 0.05% or 5%, is Canada a net importer, or exporter of foreign property investment? That is, are Canadian real estate investors sending more $$$ out of the country than is coming in from external sources? If we are a net exporter (i.e. foreign $$$ coming into Canada), is that not actually a good thing for Canada (unless you don’t own a house and want to buy one)?? In the case of a Fed hike, should foreign investment not subside via a withdrawal from the market, potentially at a loss? In other words, leaving the difference behind in Canada, in the hands of the citizens that were smart enough to sell to them originally.

I’ll stop rambling now, hold my breath, and await my berating.

#46 Retired Boomer - WI on 06.11.15 at 8:11 pm

Garth,

I’ll believe interest rate rise only AFTER I’ve seen one. Sort of like a flying saucer.

That said, the RE issues of two cities in Canada affect me in no way. While 416 is interesting, it’s a colder Chicago.

I DO hope the call for interest rates to rise is correct, it is well past time. Then maybe our representatives can start working on some of our real problems.

OOPS too close to re-election, forget THAT idea!

#47 Realtor007 on 06.11.15 at 8:12 pm

“A quarter of Canadians say they are looking to buy a home, with many noting their local housing market is becoming a buyer’s market”

http://www.theglobeandmail.com/report-on-business/economy/housing/the-real-estate-beat/sensing-a-buyers-market-a-quarter-of-canadians-looking-to-own-a-home/article24907572/

Good job! Your propaganda is working! — Garth

#48 Rates on 06.11.15 at 8:18 pm

I remember when the Fed was going to increase rates when employment hit 6.5%. They changed that to an obtuse ‘data dependent’ and wordsmithing like they are ‘patient’. I can’t wait for higher rates – what’s wrong with 10 bps right now? Is three months that big of a deal, or do they really not have that much confidence?

#49 LP on 06.11.15 at 8:22 pm

#28 Goldie on 06.11.15 at 7:21 pm
*******************

Good letter!

#50 Dean on 06.11.15 at 8:23 pm

Meanwhile over back at the National Post we see a house in West Van go for $1m (37%) over asking to…wait for it…a buyer from mainland China. Nothing to see here. Can and Garth say so and they have the numbers to prove it.

Listed under value to start a bidding war. The new normal and sign of slimy realtors.

#51 Kreditanstalt on 06.11.15 at 8:30 pm

The Fed hike? THE MARKET may hike.

The Fed EXISTS solely to rig the price of money.

But they’re losing control. In a box. They know they’ve destroyed real price discovery across dozens of markets and that rates should be higher, but they are Dow-dependent: do you really think they have much choice anymore?

#52 Nobleton Bill on 06.11.15 at 8:30 pm

Roderick W. McIverson, IV on 06.11.15 at

LMFAO….you nailed it! Awesome.

“Hilarious. My wife hung an identical sign outside our house when I got home from my “work weekend” with Katie. Talk about EMBARRASSING!!!”

#53 Freedom First on 06.11.15 at 8:35 pm

Yes, knowing what people are like, I don’t know how you do handle the pressure. Never mind the adoring hordes of Amazons, Garth, us dawgs are also aware of the volumes of hate mail you have received over the years, trying to knock you off your Blog for being all knowing and sharing nothing but the truth. Even going so far as to publicly, and deservedly so, shame all of the bold 2 faced liars.

Regarding the pic, the cheater, be it a man or a woman, deserves to be royally screwed over by the divorce courts. I never cheated on a girlfriend in my life. It’s not nice. They always know going in that I live alone. Honesty is always the best policy. No exception.

#54 Mark on 06.11.15 at 8:39 pm

“Interest rates will have to follow the Americans to the upside or foreign investors will not invest here .That is why interest rates in Canada are usually higher than the U.S”

Higher interest rates imply currency depreciation. If Canada can keep its rates low without triggering inflation, which seems likely given Canada’s excess export capacity, then Canadian interest rates can remain lower than those of the US for a very considerable period.

Remember that there are literally trillions of USD$ sitting outside the US waiting to come back and cause demand on the US economy (and thus inflation). The same doesn’t exist for the CAD$ which is basically a rounding error in global currency reserves, both public and private. If anything, the foreign accumulation of CAD$ reserves on account of Canada having the capacity as an exporter is positive for the CAD$. After all, the only long-term reason to accumulate reserves is for security of the ability to import — thus it is logical that over time, reserve accumulation will be in the currencies of nations which are chronic net exporters. The US once served this role post-WW2 as an export powerhouse (and thus, a viable currency to accumulate for ‘reserves’) but has been gradually losing such as its trade balances have gone chronically negative.

#55 Vancouver Troy on 06.11.15 at 8:39 pm

I don’t understand how the U.S. economy can be improving if the national debt is still growing (now 18 trillion).

Isn’t that like me saying my personal finances are improving while my credit card debt spirals out of control?

You don’t print your own money or simply tax to pay interest. — Garth

#56 Victoria Real Eatate Update on 06.11.15 at 8:41 pm

#21 Tony Mears

You are incorrect.

From the local board’s site I have taken yearly SFH sales totals from as far back as the mid 80s.

2007 was an average year for SFH sales in Greater Victoria with population adjustment for an apples to apples comparison.

More on this soon.

#57 The American on 06.11.15 at 8:47 pm

While on this plane, I came across a very saddening news piece. Canada, meet a semblance of your new neighbor once rates go up and affordability goes down. Many people will be exiting their homes, selling for less than originally purchased, taking great losses, and moving to more humble areas. It is very difficult to digest, but alas this is the reality. Yes, this is the future “new” for many Canadians will be a difficult adjustment.

Here is a prime example. Felecia, seen in this video, once was living in the upper East side of Manhattan in her four bedroom, 3 1/2 bathroom flat, overlooking Central Park. Today? Well, she’s walking the streets of Jackson, Mississippi, eating pieces of Burger King, and she can’t keep it together with her hair, make-up, and nails. Bless her heart. Yes, this will be your new neighbor, Canada.

http://www.ijreview.com/2015/06/342147-youre-pretty-much-gonna-want-to-drop-what-youre-doing-and-watch-this-video-more-than-once/?utm_source=Facebook&utm_medium=Organic&utm_content=conservativedaily&utm_campaign=Culture

#58 Pulp Faction on 06.11.15 at 8:48 pm

“As the economy gains strength and interest rates begin to normalize, the most likely scenario is that house prices stabilize at a level consistent with underlying fundamentals.”

Oooo…underlying fundamentals…..

That means we are going to go back to things making sense again. Party’s over. Cool.

#59 Pterodactyl on 06.11.15 at 8:51 pm

According to a report on Seattle TV today Chinese investors are abandoning Vancouver for the Metro Seattle area. If they WERE a factor in Vancouver that’s about to change:

http://www.king5.com/story/news/local/bellevue/2015/06/11/chinese-investors-seattle-bellevue/71095644/

#60 jess on 06.11.15 at 8:53 pm

NYC clamping down on ex-Airbnb slumlord

By Julia Marsh

April 13, 2015 | 1:33pm
…”That one came to light after a guest at the E. 27th Street flophouse wrote to Gawker’s Valley Wag site that Jaffee had put eight beds in one room, eight in the second room and six more in the hallways.”‘
http://nypost.com/2015/04/13/nyc-clamping-down-on-ex-airbnb-slumlord/

#61 Victoria Real Eatate Update on 06.11.15 at 8:53 pm

#21 Tony Mears

You’ll need to do more research before making accusation like you have.

I’ve done all of the necessary research and that includes about 30 years worth of sales data for Victoria.

#62 New guy on 06.11.15 at 8:54 pm

“When we look at this idea that foreign investors are such a dominant force in the housing market that they’re driving up housing prices and eroding affordability for first-time buyers, we find that there’s no evidence of that,” he concludes.

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

Another canadian BS.
They’re saying that so that government does not introduce restrictions on foreigners and thus not crash the gravy train for their members….DUH.
Just ask Christy Clark.

#63 New guy on 06.11.15 at 8:57 pm

But nobody (including me of the BCREA) can find evidence that offshore money amounts to anything exceeding even 5% of the total market

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

Do you mean the whole canadian market ??????
God, that would be a lot.
5% of whole of canada and probably 70% for the whole of Van west side and richmond.
Good grief…………

Ah, the BC association, dude… — Garth

#64 New guy on 06.11.15 at 9:03 pm

The Bank of Canada knows what’s coming, saying on Thursday interest rates will “normalize” (that means ‘go up’) and people who borrowed too much could be screwed. In the event of an economic shock, the bank adds, “the impact on the economy and financial system would be severe if it were to materialize.” This is because, “In the event of a deeper and more widespread shock to incomes, highly indebted households with limited liquid financial assets could have difficulty servicing their debt.”

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

Yup, taxpayer bailout on the way no doubt.
Cdn at 60 c US and real estate higher by 15 % a year from now.
If there’s anything i learned about this shadowy country is that real estate is job 1 and nothing else matters.

#65 Garth, don't listen to anyone: neither of these two post-colonies can't raise the rates on 06.11.15 at 9:06 pm

Garth, don’t listen to anyone: neither of these two post-colonies can’t raise the rates

That would be suicide on verge of coming-up bankruptcy. Capitalistic Oligarchy living its last spasms. Proof is the harder by day life you ALL have to endure.

Yeah, they will raise 0.25 then drop it again in 6 months….. you read it here first.

#66 dosouth on 06.11.15 at 9:10 pm

Still don’t see the increase….too much hesitation on Poloz ‘s recent media statement, trying to psyche out the majority I would assume.

Real Estate and person debt continue to be “bothersome”..

Bank of Canada offers few clues…

#67 Waterloo Resident on 06.11.15 at 9:12 pm

BANNED

#68 jess on 06.11.15 at 9:16 pm

assessing vulnerability
http://www.bankofcanada.ca/wp-content/uploads/2015/06/fsr-june15-christensen.pdf

#69 Vicpaul on 06.11.15 at 9:19 pm

#28 Goldie
“I still love you Garth but sometimes we need to cut through the PC crust and pull out a piece of the undercooked, bloody meat filling…”

I’m smellin’ what you’re cooking. It is the great unsaid…present day white guys were not/are not responsible for the systemic mistreatment of various groups over the last three hundred years – yet each day we’re reminded/expected to remediate all. Of course, it’s right and just to admit and partake in the healing from transgressions – with our Native peoples, Africans, Jews, Women, ?. I guess a question that could be asked is, have these groups every wondered what it’s like to be scorned and criticized, vilified as evil and oppressive by everyone else on the planet who is not white – just because you are….and you’re only eight or twelve or fifty.
I know – way off point, but got me thinking.

#70 Julia on 06.11.15 at 9:20 pm

Garth, Banks passed on only half the last rate decrease. Will they pass on the full increase?

#71 Squirrel meat on 06.11.15 at 9:25 pm

The pumped up pope paid a visit and others are seeking German purity. Yikes. That should be reserved for beer only.

#72 profligate on 06.11.15 at 9:32 pm

Strange how the people who “didn’t gather any meaningful statistics ” two weeks ago suddenly have all kinds at their disposal. I don’t care one way or the other, the real estate circus is great entertainment here in YVR.

The millenials at work hate everyone because they (boomers, Asians, and whichever scapegoat of the week) are keeping them from obtaining a house and their birthright as Canadians. It can be great fun whipping them up with tales of how cheap houses were when my generation was buying. I love to regale them with anecdotes of ditch diggers and garbage men with a wife, two kids, a house and two cars on a single income. All of that while earning 20% on their savings accounts. The best part is that they believe it, kind of like so many people believe these manufactured statistics that keep popping up in the media.

#73 Montellino on 06.11.15 at 9:35 pm

#70 Julia

No, they will take a loss just for you…

#74 Conrad on 06.11.15 at 9:37 pm

Garth you keep underestimating the simple fact. Deflationary forces will be much stronger than inflationary forces over the next decade at least. Thats what all the serious (PHD level from top schools) economists have been saying for years (Paul Krugman to name just one). Its always fun to make fun of economists for never predicting short term events. but on big long term trends like this they know what they are talking about, and have spent their life and considerable intellectual capital studying it. Interest rates will be at or near the lower bound for at least 10 years.

#75 Washed Up Lawyer on 06.11.15 at 9:39 pm

Poor little Fort McMurray. The real estate pumpers are rank amateurs.

“If housing numbers from May are any indication the local real estate market could be starting to pick up.”

Or continue dropping into a chasm.

“While year over year sales volumes are down they have been steadily increasing for the last four months, the 72 homes sold in May is a seven per cent increase from April’s 65 sales.”

Seven more houses month over month in a city of 76,000. Oh, and by the way that is not a 7% increase, that is 7 more houses.In May 2014 104 sold.

“Housing values also jumped considerably month-to-month.”

“A single family home sold for an average of $704,000 in April that jumped to about $721,000 in May.”

Of course. Last year’s $800K houses are now selling at $750K.

http://www.mymcmurray.com/housing-market-starting-to-heat-up-report/

I guess it is buy now or never. I’ll take never.

#76 Cici on 06.11.15 at 9:55 pm

#14 Ian Young article

It’s hilarious that you people out West think that Quebec doesn’t any immigration. Hello, wrong! I don’t know the numbers, but I born in BC, and was happily surprised when I first came to Quebec by the multitude of ethnicities. Montreal has always been a major immigration hub, and Quebec City is getting more and more immigrants of all nationalities and ethnicities. For example, I work for a multinational company in Quebec City, and work alongside Germans, Asians, Africans (from various regions, including Senegal and Haiti), Americans, Calgarians, Romanians, Belgians, Ukrainians, Indians, Mauritians, Japanese, Mexicans, Nicaraguans, Columbians and Italians, not to mention lots of French people from France. At my last job in Quebec City, the employee make-up was about as equally as diverse, and is probably even more so now.

Quebec City is a thriving and diverse area, and is getting more so all the time. And, while immigration is growing, its not new here…just take a look in the history books. There’s a long history of German, Portuguese and Italian immigration, not to mention the influence of waves of English, Irish and Scottish immigration.

I don’t have the numbers, but I’m tempted to declaire that the influence of immigration is much higher in Quebec City than it is in Victoria, and probably even Van (as a percentage of overall population), yet house prices are more realistic here.

Why do you think that is? I, personally, think goverment policy has a lot to do with it, helped in part by realtors’ associations…we’ve had a little problem with inflation imbalances in this country over the last fifteen years, and house prices are just one way to level the playing field…

#77 ANON on 06.11.15 at 9:58 pm

Rates. Will. Rise.
The reasons for higher rates may be debatable (well, not really, if one remembers rates are merely the promise’s perceived level of trust), but rise they will.

.

#78 IKnow on 06.11.15 at 10:02 pm

#14, Garth said:
Ian Young might as well work for the real estate board. He is obsessed with mythical heaps of foreign money and ignores the fact all real estate is local. — Garth

———————————————-

Garth, have you responded to the question?
what do you mean all real estate is local?
Someone asked you a while ago this: if you move to China, then on the next day will you be totally Chinese in your mindset and source of wealth?

Regardless, I agree that money from China is NOT the cause of the YVR lust fever with real estates.
But that money definitely gives the psycho support.

#79 Mark on 06.11.15 at 10:04 pm

“Interest rates will be at or near the lower bound for at least 10 years.”

True, at least with respect to policy rates. However, rates against specific types of collateral can climb considerably.

The last major deflationary episode, the 1930s, saw policy rates very low, and central banks take extraordinary stimulative measures. However, this didn’t stop the balloon mortgages from the time from defaulting as the interest rates applicable against the specific collateral of residential housing had risen dramatically.

Ironically, it was the mass defaults in balloon mortgages that was the impetus for starting Fannie Mae and Freddie Mac to bring about the 30-year fixed term mortgage in the USA. Most of the Canadian market is based on balloon mortgages, so it is very possible, even in a deflationary environment, that rates rise considerably against those specific types of loans leading to the outcome of much higher rates as espoused by Garth et al. Me and Garth agree on the outcome — higher rates for mortgage borrowers, but we disagree on the mechanism.

#80 Tony Mears on 06.11.15 at 10:09 pm

#61 Victoria Real Estate Update

“You’ll need to do more research before making accusation like you have.

I’ve done all of the necessary research and that includes about 30 years worth of sales data for Victoria.”

I provided actual numbers from the VREB website. You have provided unsubstantiated assertions. Case closed.

#81 young & foolish on 06.11.15 at 10:16 pm

…. man, this blog is full of extremist posters …

sure, RE will soften and go sideways is some places, and perhaps down significantly in others … every market is cyclical, and RE has been on the upswing for many years …. you don’t have to be a genius to see that eventually, it will go down ….

But as an earlier poster put it “cheap money” is everywhere today … and it’s affecting ALL markets.

#82 Smoking Man on 06.11.15 at 10:29 pm

Nothing to say…..

Depression I think. no energy, no drive, no ambition, no sunshine. Not happy, not sad. Numb, and its not comfortable.

Why, I have no idea..Vegas in a few days. Gig offers in sunny climates up the ying yang.

Family doing great, portfolio going gang busters. Kids finally got there shit together.

Perhaps, the bozze is finally taken its toll.. I’m not Super Man after all.

Just a Smoking Man.

Whos board out of his mind….

#83 Andrew Woburn on 06.11.15 at 10:37 pm

“Why the [US] Housing Market Collapse is Set to Resume

The housing bubble was not nationwide. It was highly concentrated in roughly 25 larger metros in California, Florida, Arizona, Nevada, and the Northeast. It is in these metros where speculation was rampant, prices skyrocketed in 2004-2006 and the bulk of jumbo mortgages were originated.

For more than four years, I have shown that mortgage servicers have been reluctant to foreclose on the large loans that were shoveled out in these bubble metros. But they have had no problem foreclosing on smaller loans. Large bubble-era jumbo loans make up the bulk of the delinquent inventory of the too-big-to-fail banks. The latest data we have for securitized jumbo loans not \ guaranteed by the GSEs – from March 2013 – shows \ delinquency rates of 17-19%. That is why the delinquency rate for the first-lien portfolio of these huge banks is so high.”

http://econintersect.com/a/blogs/blog1.php/why-the-housing-market-collapse

#84 mortalifa on 06.11.15 at 10:40 pm

Garth

Why do you make the assumption that once interest rates start to rise that it will thereafter be a one way track upwards forever…..in Japan’s case a few years back, they started with slow .25 increases, but were then forced to backtrack and grind the rates back towards zero….my point is that with the fragile state of the world economy, it is impossible to assume that rates will always go in one direction …..capiche?

#85 Nemesis on 06.11.15 at 10:45 pm

#GreaterFoolExclusive!!! #Revealed:China’sDoubleTopSecret… #HelicopterRealtorFlightSchool!…

http://youtu.be/y_sLOmRgo-k

#86 Houseowner on 06.11.15 at 10:45 pm

With 2 years left on the fixed would you recommend resigning for another 5 year fixed?

#87 DON on 06.11.15 at 10:48 pm

#21 Tony Mears on 06.11.15 at 7:07 pm

#3 Vancouver corrida Real Estate Update

“2007 represents an average year for Greater Victoria in terms of total SFH sales (more on that soon).”

Nonsense. 2007 was the HIGHEST year in terms of unit volume. Here are the actual annual numbers from the VREB website.

2005 4210
2006 4008
2007 4464
2008 3335
2009 4117
2010 3236
2011 3069
2012 2907
2013 3068
2014 3451

This invalidates your whole line of reasoning. As I said yesterday, obsessing on 2007 is pointless. The Victoria market has been balanced since 2013 and is now moving into a sellers market

*****************************
Nonsense is right! You have no problem quoting the realtors who often than not play with the numbers.

Oak Bay may be a seller’s market – always is.

Lots more fore sale signs then sold signs out there. Victoria has a limited economy. Not all departments are replacing the retirees.

Lots of house, apartment rentals out there in every part of the city. Just checked into a house today, owners moving to Toronto. Desperate to get renters in. Lots of people have returned from working in Alberta. The promised ship building contracts have yet to start. Store fronts with for lease signs.

#88 Rebecca Sanders on 06.11.15 at 10:53 pm

“If Chinese folks looked like Germans, people in Vancouver might have to blame the real culprits. Themselves.”

Maybe the problem is that Vancouverites are crazy, but I’d like more and better data on what’s really going on in our housing market. We lack sound statistics on market trends (who trusts CREA numbers?), and as you mentioned in yesterday’s post, we are sorely lacking a Zillow.

Speaking for myself, I don’t care if our market distortion comes from China, Germany or Jupiter. I only want sound data to make sense of what’s going on.

#89 The Other Marco on 06.11.15 at 10:54 pm

Funny comments. Only an idiot wouldn’t want interest rates to go up.

#90 Timing is Everything on 06.11.15 at 10:59 pm

#28 Goldie

+1 Good post.

I thought you might get DELETED (Anti-something or other) or worse DELETED (Anti-Canadian)
———————————————————-
Garth, just 4 U…

http://tinyurl.com/cbmvbgu

#91 Gulf Breeze on 06.11.15 at 11:21 pm

Liquidity crisis in bonds if fed hikes. Not going to happen. They can yadayada all they want about the probability ( no, wait … possibility … whoa .. wait a minute probability!) but they won’t act. This has been going on for ages. They are trying to curb speculative excess by jawboning.

U.S fed rate increase isn’t going to happen for at least a year in the U.S. and possibly more in Canada. Read Roubini and Ambrose Evans Pritchard.

So many skewed reports and/or intentional misinterpretations of data by pols wanting to be reelected.

#92 holy cowboy on 06.11.15 at 11:31 pm

#76 Cici on 06.11.15 at 9:55 pm
#14 Ian Young article
…..work alongside Germans, Asians, Africans (from various regions, including Senegal and Haiti), Americans, Calgarians, Romanians, Belgians, Ukrainians, Indians, Mauritians, Japanese, Mexicans, Nicaraguans, Columbians and Italians, not to mention lots of French people from France.”

Just curious…how did Calgarians end up getting lumped in with all those other exotic species???
Also Haiti is in the Caribbean, not Africa….best check your atlas when you have a minute.

#93 holy cowboy on 06.11.15 at 11:36 pm

#74 Conrad on 06.11.15 at 9:37 pm
… Its always fun to make fun of economists for never predicting short term events. but on big long term trends like this they know what they are talking about, and have spent their life and considerable intellectual capital studying it. ”

I think Keynes nailed the long term forecast best when he said something like, in the long run we are all dead….

#94 Leo Trollstoy on 06.11.15 at 11:54 pm

Why the [US] Housing Market Collapse is Set to Resume

This would be fantastic.

I have a ton of USD pouring in monthly because of multiplexes I bought in FL in the last collapse.

I would love to see another collapse. Yes please!

#95 Leo Trollstoy on 06.11.15 at 11:57 pm

Garth you keep underestimating the simple fact. Deflationary forces will be much stronger than inflationary forces over the next decade at least. Thats what all the serious (PHD level from top schools) economists have been saying for years (Paul Krugman to name just one). Its always fun to make fun of economists for never predicting short term events. but on big long term trends like this they know what they are talking about, and have spent their life and considerable intellectual capital studying it. Interest rates will be at or near the lower bound for at least 10 years.

No deflation.

Krugman is a biased hack. That guy is always kissing left-wing a$$.

Economists are actually increasingly wrong on long-term predictions as the error bars trend larger.

Anybody who is predicting deflation is poor. That’s what I’ve noticed. I avoid poor people advice. Been there. Done that. Rich is better.

#96 Smoking Man on 06.12.15 at 12:23 am

Hookers

Allows your 19 year old mind to fool your 55 year old body that you still have game.

Shit we do for a thrill.

#97 Cici on 06.12.15 at 12:29 am

#92 holy cowboy

Oh whatever smarty pants, let’s split some hairs and ignite some political feuds, shall we.

Yes, Haiti is in the Carribean, BRAVO! I never said it wasn’t and I never said Haiti was in Africa. If you were as smart as you think you are, you would know that their are two definitions for the term “African,” one being people from Africa, and the other being “of or relating to Africa or people of African decent.”

You should also have noticed that I did say Africans (as in of “African decent”) from various regions (as in various parts of “the world”) as opposed to “people who specifically live on the African continent.”

Some 85% of Haitians are of African decent. And news for you, while the Asians, Europeans and other groups that live in and have citizenship in various African countries are considered African, they can still be said to be of Asian, Dutch, Polish, European or whatever else decent.

And, yes, here in Quebec, Calgarians are a minority population, and VERY exotic, and a very important part of our rich and diverse cultural heritage.

#98 Suede on 06.12.15 at 12:38 am

I’m wary when the consensus is all for one thing.

Sense i’m getting is “everyone says that rates are going up”

my question is…

“again?”

September and October are black swan months. Haven’t had a market blip in 4 years.

I applaud the fed if the hike. If they don’t, then all forecasters are wrong for the 17th time.

And the basement dwellers sigh again bc houses won’t get cheaper.

The time will come, grasshoppers.

#99 Victoria Real Estate Update on 06.12.15 at 12:48 am

# 80 Tony Mears

Case closed?

Lol you are making a bigger fool of yourself with every post.

Do you really think it is possible to determine Victoria’s long-term SFH sales per year average by going back only 10 years?

As I said, the sales numbers I used from Victoria’s RE board are from the 80s (when they first began keeping stats) to present.

I could post SFH sales totals from each year but that isn’t necessary.

You think you know what you’re talking about here but you don’t. Perhaps you should let this go. I’m sure many others who are following this conversation would agree.

#100 Carpe Diem on 06.12.15 at 12:53 am

I can’t believe I’d ever see a Vancouver vs Quebec City comparison.

My thoughts:

In Quebec city, affordability, stress and opportunities are high!

In Vancouver, debt, stress and people are high ….

It doesn’t take 2 hours in Quebec City to get to a major ski hill. It take 20 minutes!

And then the women … so much sweeter in Quebec City than anywhere else in Canada!

Hmmm … maybe it’s time I move from Ottawa to Quebec City.

Then again … Ottawa is awesome for so many reason ….

But I think Quebec City is just as wonderful and closer to family!

Both so much better than Vancouver. That city has no green spaces (throughout the city), transit sucks and people are boring and far too focused on RE.

It has no soul. Just bad drivers when it snows.

#101 RR on 06.12.15 at 12:53 am

#28 GOLDIE, agree with your comment 100%. Garth don’t you have any little birdies at any of the big FI’s you could ask about the real concentration of foreign funds? The BOC recently reached out to the big guys asking questions about originations from foreignears, specifically in the GVA. Surely you must have some contacts in the risk or treasury groups within the banks.
If someone’s bread and butter relies on keeping the market hot, do you think they will rock the boat? This is why the phrase about the market being balanced is tossed around so often. Nobody is willing to say (publically) young Canadians are screwed.

#102 Nagraj on 06.12.15 at 1:29 am

The number of completed and unsold condos in Toronto has risen from about 1,000 to about 2,800 between Feb and May. [Wolf Richter, “Toronto’s Epic Condo Bubble Suddenly Turns Into Condo Glut”]

This must be what the Poloz Poodles would reference as an internal as vs “external shock”.

Corporate developers and their lenders must be joyfully anticipating higher interest rates . . . and have probably already contacted whatever inner circles that matter nowadays to express their growing delight. They’re already constructing a Thank You card fifty stories high.
They’re so emotionally overjoyed they’ve developed physical symptoms: corporate incontinence.

#103 Blacksheep on 06.12.15 at 1:33 am

“But it ain’t so. As I told you. Now the BC Real Estate Association has decided to back me up.”
———————————————
I laughed out loud when I heard this on the CBC today.

What better story line could the BC REA possibly release, to deter any action that may impede the inflow of foreign $? All while giving Christy C. the platform to defend their true agenda.

I’m surprised you bought this crap Garth, I thought there was no data collected?

#104 Another Vancity Renter on 06.12.15 at 1:53 am

Did you hear…yellow peril has reached Whistler? This, according to one Whistler realturd’s April newsletter. If you’re from Vancouver, some (all) of this will sound familiar:

“Greetings from beautiful Whistler BC, here is your Whistler real estate market update!

The story of the current market conditions is: Get in now! The low Cdn dollar is driving strong interest from American buyers, and we are now seeing an increase in Chinese buyers. Once more Chinese buyers start coming to Whistler, the whole market will change dramatically, especially the high-end.

If you’re thinking of LISTING: Now is a great time. Choose an agent who will price your property at the “sweet spot”, and market it properly.

If you’re thinking of BUYING: get your homework done first as good properties in this market are going multiple offers, it’s becoming the norm. Make your offers as clean as possible (with the fewest amount of subjects). “

#105 grey swan on 06.12.15 at 2:20 am

Hi Garth….all depends on what you and your real estate
cartel friend`s consider foreign!??

#106 invariant on 06.12.15 at 2:35 am

Driverless Trucks to Hit Alberta’s Oilsands Region Replacing $200,000/yr Operators; Big Layoffs Coming

#107 X on 06.12.15 at 3:01 am

Garth is now in bed with Muir.
No principles.

I’m a great man when I agree with you. When I agree with another I’m a sell-out. You are a deep thinker, obviously. — Garth

#108 jane 24 on 06.12.15 at 3:26 am

Foreign buying is everywhere in the first world now.

I live in a sleepy little seaside town in Southern England and a Kuwaiti fund has just brought three hotels on the seafront. They are a bit tatty and do need investment. According to the local MP the Qatar sovereign fund is also interested in local investment. He sold us to them as part of his govt job remit.

Suddenly more women in black robes noticeable where as before the only noticeable local arabs were young students at our two universities. We may be the next Vancouver. How exciting!!

How should I react?

Sell my four houses?

Buy more houses?

Start a petition?

Complain to the media?

Advice from blog dogs please. Either here or on a postcard.

#109 Bobby on 06.12.15 at 3:55 am

For #21 Tony Mears, if it is a seller’s market here in Victoria why are all of the homes I’m looking at sitting on the market unsold or the sellers are reducing their prices. One home I just looked at sold for 6% under asking. Many are renewed listings at lower prices.
You must be a new realtor. I suggest you get out more and look around before you comment again.

#110 tim mulrona on 06.12.15 at 5:29 am

Poloz does not appear scared enough: Don Pittis

Blandly reassuring, is Bank of Canada governor really ready if something bad happens?

http://www.cbc.ca/news/business/poloz-does-not-appear-scared-enough-don-pittis-1.3109418

#111 I'm stupid on 06.12.15 at 6:26 am

The danger of leverage

John and Jane own a home with no mortgage valued at 1million. They decide to buy another home because houses always go up, but this time they don’t. They buy a $1million home as a rental property with 10% down. The value of houses decreases by 30%. Their net worth goes from 1.1 million to 500k and have a mortgage of 900k. That’s how the middle class gets gutted, by their own stupidity!

#112 Don Draper on 06.12.15 at 6:43 am

“Foreign investment is less than five per cent of the market in Metro Vancouver, and through our collection of available data and analyses,” says Muir, “we haven’t found one data point or one piece of analysis that points to foreign investment as outside of five per cent of overall sales activity in the region.”

——

So now you believe the numbers from the real estate boards? But sales numbers are to be taken with a grain of salt? Either you believe the numbers the RE boards release or you don’t.

#113 SWL1976 on 06.12.15 at 6:53 am

#88 Rebecca Sanders

Speaking for myself, I don’t care if our market distortion comes from China, Germany or Jupiter. I only want sound data to make sense of what’s going on.

Good luck with that.

Sadly, cooked books are not limited to just real estate these days.

So many people have delusion to the illusion

#114 Nagraj on 06.12.15 at 7:55 am

#109 tim mulrona: “Poloz does not appear scared enough: Don Pittis”

For contrast, consider Wednesday’s speech by the Australian central banker who called Sydney house prices “crazy” and then went on to wholly trash the cheery economic outlook presented by the Aussie gov’t’s federal Treasurer.

#115 gladiator on 06.12.15 at 8:31 am

You don’t print your own money or simply tax to pay interest. — Garth

Garth, I am very surprised that you keep insisting that the US prints its own money. The US Treasury has the right to mint coins only. It borrows the rest from the FED, which, although on the surface is accountable to the government, it in fact is an independent lender to it. Otherwise, the US government debt would be zero, zilch, nada.
Secondly, you mean that the US government has the right to tax more the economy to try to pay off its debt? I agree with this statement. But why didn’t it start doing it already? Riiight. Because this will throw its economy into a full-fledged depression. The small green shoots of the recovery are so abundantly irrigated with borrowed funds that if they stop borrowing it won’t be pretty. And by “they” I mean all levels of government as well as corporations that are now buying back record amounts of their own stock – all financed with virtually zero-cost borrowed funds.

#116 crowdedelevatorfartz on 06.12.15 at 8:46 am

@#107 jane24

“Advice from blog dogs please. Either here or on a postcard…..”
+++++++++++++++++++++++++++++++++++

Offer the Kuwaitis’ this man’s services.

http://www.google.ca/url?sa=t&rct=j&q=&esrc=s&frm=1&source=web&cd=3&cad=rja&uact=8&sqi=2&ved=0CC8QtwIwAmoVChMIpIeH9JeKxgIVxYCSCh2ZnwCP&url=http%3A%2F%2Fwww.youtube.com%2Fwatch%3Fv%3DjcEws7il4EY&ei=mdR6VeTWGMWBygSZv4L4CA&usg=AFQjCNEJtxFz6BaSGroF7iEe6fiE6NlRnQ&bvm=bv.95515949,d.aWw

#117 Holy Crap Wheres The Tylenol on 06.12.15 at 8:58 am

#82 Smoking Man on 06.11.15 at 10:29 pm
Nothing to say…..
Depression I think. no energy, no drive, no ambition, no sunshine. Not happy, not sad. Numb, and its not comfortable.
Why, I have no idea..Vegas in a few days. Gig offers in sunny climates up the ying yang.
Family doing great, portfolio going gang busters. Kids finally got there shit together.
Perhaps, the bozze is finally taken its toll.. I’m not Super Man after all.
Just a Smoking Man.
Whos board out of his mind…
____________________________________________
What do you mean you have nothing to say? You just typed ten sentences!

#118 Gin Gin on 06.12.15 at 9:25 am

Repeat after me Garth: rates will never go up
Central banks will never raise interest rates, because they can’t. Find another reason for the housing market crash

What a surprise is in store for so all the snowflakes. — Garth

#119 SWL1976 on 06.12.15 at 9:52 am

#115 gladiator

————-

Yuuuuup!!!

#120 Tony Mears on 06.12.15 at 10:09 am

#99 Victoriaa Real Estate Update
“Lol you are making a bigger fool of yourself with every post.”

When you descend to ad hominem responses we all realize the argument is over.

#121 jess on 06.12.15 at 10:15 am

troll factories
Lyudmila Savchuk uncover journalist , recently went public about her experiences working for a Russian Internet propaganda factory in St. Petersburg. In an interview, she describes how clandestine workers are promoting the Kremlin’s message. By Benjamin Bidder
Paid as a Pro-Kremlin Troll: ‘The Hatred Spills over into the Real World’

By Benjamin Bidder

http://www.spiegel.de/international/world/interview-with-ex-russian-internet-troll-lyudmila-savchuk-a-1036539.html#spLeserKommentare

…Savchuk: They don’t even sign any contracts, which is why I am now submitting a lawsuit in a St. Petersburg court. That’s the only way of dragging these fiends into the public eye. We want to show the world who is behind these troll factories.

#122 CHERRY BLOSSOM on 06.12.15 at 10:16 am

The gov’t brings in 80,000 immigrants a yea. The Harper gov’t insists that we bring in only rich educated immigrants. They all want to live in Toronto and Vancouver. Get ready for a really big Consumer Recession. With all those kids who become so illiquid they won’t even be able to buy food.

And Garth you should perhaps also look at the big credit established for auto loans. EVERYBODY has a brand new car and owes big time for the a 6 year package.

What ever happened to “Living within your means” Perhaps the gov’t would like to remind the people of that little phrase.

The government does not ‘bring in’ anybody. People apply to live in Canada and we accept a stable, consistent annual number. Without immigration our population would decline, and economic prospects along with it. — Garth

#123 jess on 06.12.15 at 10:17 am

1 I’m stupid on 06.12.15 at 6:26 am

The danger of leveraged unknowns

http://www.osfi-bsif.gc.ca/eng/osfi-bsif/med/sp-ds/Pages/jr.aspx

shifting risk offshore to unregistered affiliates

What we are seeing more recently seems to fall into a different category. It appears to be being used by insurers to increase policy limits and sizes without changing net risk retention. This means that exposures ceded are quite large. It also means that exposures are going up without a commensurate increase in the capital of the direct writer.

#124 aizlynne on 06.12.15 at 10:33 am

The Fed Reserve cannot raise rates without showing their hand. We have had 7 years of ZIRP and yet somehow they can magically stop dow transports continued decline, or increase the pathetic lack of real jobs that pay a meaningful salary (old fart and part-timers looking for full time). But ya, celebrate those job numbers! After all, we have never known the Central Bank to lie before.

#125 Setting the Record straight on 06.12.15 at 10:40 am

@4
As I’ve pointed out several times, wealthy buyers from China were buying properties in Vancouver in 08-09, but that didn’t stop prices from correcting 12% at that time. Prices would have continued to fall in Vancouver if interest rates hadn’t suddenly been slashed from near normal levels to emergency levels in 2009.

&&&&&&
Evidence?
During the period of the declines, did the participation of offshore money alter?

#126 Buckhorn Bum on 06.12.15 at 10:58 am

“In a world where everyone wants to be reassuring, from real estate salesmen to financial advisers to politicians wanting your vote, we need a few trustworthy voices willing to remind us of the risks.”

Taken from CBC news today, I think they’re talkin about you Garth because you seem to be the only one that even thinks about risk!

#127 Doug in London on 06.12.15 at 11:04 am

@Rory, post #19:
You are quite right, this abnormally cheap money has the side effect of producing bubbles. What do you do in this kind of environment? Buy only investments that are on sale, a classic example being REITs in the last half of 2013. More recently that would be ETFs like CPD, XPF, and XEG if it drops below $13. Other good buys right now include HNY and CSE. I wouldn’t buy any yet, but keep a watchful eye on railway stocks, they may go on sale in the months to come.
As for houses in Toronto or Vancouver idea, have you ever heard the words forget it?

#128 Karma on 06.12.15 at 11:05 am

“By focusing on the growing riches of the “1 percent,” we miss another form of inequality that is bigger, and arguably even more dangerous.”

http://www.washingtonmonthly.com/magazine/junejulyaugust_2015/features/wealth_and_generations055898.php

#129 Marco on 06.12.15 at 11:08 am

@Gulf breeze

Ambrose:

“How this now unfolds for the world as a whole depends on the pace of tightening by the Fed. Futures contracts are still not pricing in a full rate rise in September. They are strangely disregarding the message from the Fed’s own voting committee – the so-called ‘dots’ – that further
rises will follow relatively soon and hard.”

Cheers.

#130 Balmuto on 06.12.15 at 11:09 am

Canada home prices rise another 0.9% in May, 4.6% year-over-year per Teranet. Calgary the outlier, down 3.3% on the month:

http://ca.reuters.com/article/businessNews/idCAKBN0OS1ET20150612

#131 Squirrel meat on 06.12.15 at 11:14 am

Dippers pull a trojan move.. just wait til angry beard wins.. anybody want to buy my house in Calgary?

http://www.theglobeandmail.com/report-on-business/industry-news/energy-and-resources/anti-pipeline-past-draws-disapproval-to-ndp-cabinet-members-aide/article24926697/

#132 Squirrel meat on 06.12.15 at 11:20 am

And its seem the former head of the IMF isn’t a pimp after all.

http://www.nytimes.com/2015/06/13/world/europe/dsk-acquitted-aggravated-pimping-charges.html?hp&action=click&pgtype=Homepage&module=first-column-region&region=top-news&WT.nav=top-news&_r=0

#133 Squirrel meat on 06.12.15 at 11:24 am

Bilderberg folks get to it on Thursday.

http://www.truthdig.com/report/item/headline_what_we_know_and_dont_know_about_this_years_bilderberg_meeting_201

#134 Marco on 06.12.15 at 11:34 am

From the Telegraph:

“Interest rate rise getting closer, says Bank of England policymaker”

Full article:

http://www.telegraph.co.uk/finance/bank-of-england/11670113/Interest-rate-rise-getting-closer-says-Bank-of-England-policymaker.html

Canada, UK all waiting on the Fed.

Cheers.

#135 bdy sktrn on 06.12.15 at 11:38 am

#59 Pterodactyl on 06.11.15 at 8:51 pm
… abandoning Vancouver for the Metro Seattle area. If they WERE a factor in Vancouver that’s about to change:
————————————-
cmon’ man, warn us when you let loose comedy like this.
you could cause spilled coffee, ruined keyboards and inhaled caffeine.

i hear there is a billion+ more of them, if a few make it to seattle it will make ZERO difference to van market, which btw has years left in it’s bull run.

#136 Roy on 06.12.15 at 11:38 am

Calgary home prices plunge

http://business.financialpost.com/personal-finance/mortgages-real-estate/calgary-home-prices-plunge-in-biggest-monthly-drop-on-record

-3.3% from April to May, largest monthly drop recorded for the city

#137 Estrella on 06.12.15 at 11:41 am

Very interesting read below blog dogs! I especially like the comments above how Canada’s government is so trustworthy! Have they investigated our senate? Duh!

http://www.bloombergview.com/articles/2015-06-12/canada-might-have-the-goods-to-become-a-superpower

Can’t wait for tonight’s post garth. Keep them coming.

#138 Retired Boomer - WI on 06.12.15 at 11:50 am

Abnormally cheap money brings on abnormally higher levels of debt.

Should rates begin ‘normalizing’ someday, maybe -if ever-
debtors will have an abnormally higher amount of financial pain paying off that debt.

Ask the Greeks how it feels when debt at even cheap rates can not be repaid.

Do the 1% offer money to debtors at cheap rates when their ability to repay seems questionable?

I would not, but I am a LONG way from, the 1%, and no big fan of debt.

Expect some market hic-cups when Greece Defaults.

Hurry Janet Y raise those short term FED rates -NOW!!

#139 Julia on 06.12.15 at 11:52 am

#100 Carpe Diem

But the income taxes in Quebec versus the rest of Canada though…
And the politics and language police?

I left Quebec for my career a few years ago, now in Toronto. Interesting perspective when you look in from the outside.

#140 Holy Crap Wheres The Tylenol on 06.12.15 at 11:55 am

#82 Smoking Man on 06.11.15 at 10:29 pm
Nothing to say…..
Depression I think. no energy, no drive, no ambition, no sunshine. Not happy, not sad. Numb, and its not comfortable.
Why, I have no idea..Vegas in a few days. Gig offers in sunny climates up the ying yang.
Family doing great, portfolio going gang busters. Kids finally got there shit together.
Perhaps, the bozze is finally taken its toll.. I’m not Super Man after all.
Just a Smoking Man.
Whos board out of his mind….
________________________________________

Crappy day here in the harbor on the boat. Decided to give up and go into the office. Looked at the forecast for the week here. The Indy could be a washout. Too bad I have tickets.
Smoking Man here’s your seven day forecast for Las Vegas.
Sat Sun Mon Tue Wed Thur Fri
102 104 106 106 106 106 102

You will definitely be Smoking!
Have fun!

#141 Hh on 06.12.15 at 12:05 pm

Ok finally you stick you neck out. September it is. If they delay you can delay on being boastful for about year(s).

It’s not me, pal. Scotiabank economists plus every observer on the Street. — Garth

#142 Butch on 06.12.15 at 12:07 pm

Maybe September isn’t as sure as you think Garth?

http://www.businessinsider.com/r–bond-selloff-a-wild-card-that-could-delay-fed-rate-hike-2015-6

#143 Marco on 06.12.15 at 12:19 pm

@bdy sktrn

“i hear there is a billion+ more of them, if a few make it to seattle it will make ZERO difference to van market, which btw has years left in it’s bull run.”

Now that’s realtor comedy! Or is it propaganda? hard to say.

China has less millionaires then the States.

Watch what happens when interest rates creep up.

By the way you owe me a keyboard, hahaha!

Cheers.

#144 Smoking Man on 06.12.15 at 12:34 pm

#138 Retired Boomer – WI on 06.12.15 at 11:50 am

How can Yellen spike, Kiwi was chopped yesterday, there is a world wide currency war going on..expect more chops on interest rates all summer.

#145 Mike T. on 06.12.15 at 12:45 pm

I think that the best way to understand the world is to observe it, obviously. What parts you observe will lead to various levels of understanding.

Observing nature is your best bet. If you want o understand what has happened to Canadians and real estate, I present to you the cobra lily.

The cobra lily is a pleasant, innocent looking plant. It acts to deceive its prey. Once it captures prey it traps in a tunnel full of fenestra (windows). An insect takes the bait and then gets itself stuck in a trap. You might have to use a bit of imagination (that exists?) to see the mechanism, but this is what was done to you/us.

well, you, I rent and have only cash….no debt.

watch, it’s amazing, the cobra lily uses the insects brain against itself to force it to make the wrong decision….
https://www.youtube.com/watch?v=TJpC05V2EaE

#146 NextYear on 06.12.15 at 12:48 pm

If they raise rate a tiny bit and then Housing rolls over and the economic data goes a bit negative and we see a tiny 10% drop in the stock market what do you think they will do??? they will panic

Look, they have been talking about raising rates now for years… then oil went down,they paniced and lower the rates

If they raise rate, this will prick the bubble they have worked so hard to inflate… then at the first sign of trouble we are right back at Zero percent interest rate and QE. Your are saying it yourself, if they raise rate people who borrow to much will be in trouble and housing will go down…then what? There is no way they will let it deflate

Zero percent interest rate with No QE is as tight as it get… well maybe a 0.25 increase… then it will be time to ease again… And they will do QE4… then QE5… then 6…

#147 Broke Dick on 06.12.15 at 12:51 pm

Smokey you’ll appreciate this story.
My computer picked up some disgusting virus, probably from this site. So I search through kijiji for someone to do repair and I see an ad from first year UofT computer engineering student willing to clear virus(es) and reload windows for $30.
He comes by to drop off computer after all repairs (yes, drop off) and I ask him for some business cards, he doesn’t have any. So I throw him an extra ten and tell him to get some cards printed.

#148 bdy sktrn on 06.12.15 at 1:07 pm

don’t fight the herd –

604 lotto winner of 12.5m

reporter:”what r u gonna do now?”
lucky winner: “play it by ear, but RE is in our future”

someone arrange an intervention, quick!

#149 bdy sktrn on 06.12.15 at 1:29 pm

#143 Marco on 06.12.15 at 12:19 pm

China has less millionaires then the States.
————————
of course it does, way way more.

and they live in luxury and relative peace in nyc,socal,sf,fla,tx,+++ all of which are heaveny compared to most brown air sino cities.

van is easier to get in. (quebec program anyone?)
van has 94 chinese ‘themed’ shopping malls/plaza in richmond. (in ’91 i used to trek an hour+ across tokyo to the ONE store that had ‘western’ food )
van is safer (they generally don’t like guns)
All their friends are here.
And most importantly there is at least 5 good dim sum places within a one mile radius of every person located between stanley park and steveston hwy!

#150 Danforth on 06.12.15 at 1:31 pm

We know that the multiple of “average household income / average house sale price” has gone up over the years.

I’m curious, is there any source of a historic trend of this income/price ratio in a graph or timeline format, ideally by geography.

#151 Keith in Calgary on 06.12.15 at 1:32 pm

Using automobile sales on either side of the border as a sign of a pending or existing economic recovery is not exactly a valid methodology.

Subprime finance in the industry is what is driving the increased sales, as well as a return to manufacturer’s subvented lease programs with what will soon to be proven a unrealistic residual values. How history repeats itself is amazing.

While I could go and post about 5 + articles to support this, there is no point. Anyone reading this can find out for themselves that dealers now offer 96 + month financing terms with zero down and low rates OAC. And if you don’t have good credit there are a number Canadian and US companies that will write the paper at rates between 12-32%.

After 20 + years in the business I now work in the software industry supplying DMS systems to auto dealers across North America so the data is there for me to see every day of the week. In some US cities, you can even get 120 month car loans.

So, people are buying because the lenders are underwriting the existing negative equity, extending terms long beyond what is considered realistic or normal, accepting paper with userous rates to book the profit, etc.

People are not confident in their futures and making long term investments here, they are thinking short term because they need to get to work tomorrow, and will buy under any conditions, as long as their monthly payment doesn’t go up dramatically or at all.

Car sales were just one of a number of economic data points I mentioned, and not the primary one. But nice cherry pick. — Garth

#152 Sean on 06.12.15 at 1:33 pm

Garth can you breakdown what’s going on in the bond markets and what it means for us?

http://business.financialpost.com/investing/worst-bond-crash-in-30-years-is-early-warning-of-turmoil-to-come

Bond yields up and prices down. No surprise here. — Garth

#153 Nora Lenderby on 06.12.15 at 1:35 pm

#147 Broke Dick on 06.12.15 at 12:51 pm
My computer picked up some disgusting virus, probably from this site.

Or, more likely, from your lack of hygiene on other less salubrious areas of the InterTubes.

You can’t catch a virus from the commenters on this site, no matter how unsavoury they may be, unless you meet them in meatspace.

#154 maxx on 06.12.15 at 1:40 pm

Has the cb apparatus acquired a (large) whiff ‘o realtard communications spinitis?

At the grass roots level of the real economy, I certainly haven’t seen much evidence of optimism. People are for the most part spending their borrowings, not their savings (how happy is that?) and a bank employee told me that many are sacking their rsps and tfsas as well as increasingly juggling and putting off paying essential bills.

Canada is not the wealth-fostering nation it once was.

http://www.cbc.ca/news/business/should-stephen-poloz-be-more-worried-about-the-canadian-economy-1.3109418

The wider the smiles…….

#155 Yoga hater on 06.12.15 at 1:41 pm

reporter:”what r u gonna do now?”
lucky winner: “play it by ear, but RE is in our future”
—————–
And the cobra lily strickes again.
(good post #145)

#156 ShawnG in TO on 06.12.15 at 1:45 pm

@bdy sktrn
“RE is in our future”

that’s how lotto winners go bust after 5 years.

#157 Yoga hater on 06.12.15 at 1:45 pm

#148
well, these lucky locals will need all of the 12.5 mill to outbid the overseas investors.
Easy come, easy go.

#158 Ponies Pilate on 06.12.15 at 1:56 pm

Re: Picture
I thought Smocking Man lived in a nicer house.
Needs to cut the grass.

#159 omg the original on 06.12.15 at 2:01 pm

bdy sktrn on 06.12.15 at 1:07 pm

604 lotto winner of 12.5m

reporter:”what r u gonna do now?”
lucky winner: “play it by ear, but RE is in our future”
————

I remember back in the 1980s there was a show about broke lottery winners – back then winning $1 million was a big deal.

One guy they interviewed went through $500k winnings in about 18 months.

“On what?” the reporter asked. His reply “pizza and beer…..what else is there?”

But he and his friends had fun.

Anyways for somebody that thinks RE is the only thing to do with that type of money maybe its not a bad idea If they sink the entire $12 million in and do not lever excessively at least they will have a nice cash-flow income. At least it locks their capital up so they cannot do anything even dumber.

But god help them if they lever-up.

#160 no subprime on 06.12.15 at 2:01 pm

Tell me if this is not subprime … i might be wrong. Please scroll to “Cash Back Chart”
http://www.ratehub.ca/best-mortgage-rates/5-year/cash-back

Cash back mortgages return to you a percentage of your mortgage principal in a lump sum when your mortgage closes. Cash back mortgages differ from ‘0% down’ mortgages – which are no longer available in Canada – as they still require you to put your own money up front for a down payment, but you receive the lump sum after your mortgage closes.

#161 Ponies Pilate on 06.12.15 at 2:02 pm

Lulu Island was once a tranquil floodplain divided by dykes and dotted by picturesque farms.
Then they called it Richmond and with the new name came new money.

#162 omg the original on 06.12.15 at 2:07 pm

Danforth on 06.12.15 at 1:31 pm
We know that the multiple of “average household income / average house sale price” has gone up over the years.

I’m curious, is there any source of a historic trend of this income/price ratio in a graph or timeline format, ideally by geography.
————————–

Search for Case-Shiller index – its for the US but.

Although a few people would disagree with me, Canada is basically a subset of the US economy. So Case Shiller is a good proxy for Canada.

There is no good long-run data in Canada (for an index like Case Shiller long run is not 20 years).

#163 Ponies Pilate on 06.12.15 at 2:17 pm

Enter Varoufakis, the Black Swan.
The poker game called Nash Equilibrium will end when the Germans demand back the chips that they lend to Greece.

#164 run joe run on 06.12.15 at 2:20 pm

How can a global economy built on debt that almost crashed due to debt then bailed out with cheaper debt that today has more debt and lower interest rates than ever handle an increase in interest rates?

We are supposed to believe that a few hundred thousand more jobs at minimum wage will handle that?

#165 bdy sktrn on 06.12.15 at 2:34 pm

#147 Broke Dick on 06.12.15 at 12:51 pm
Smokey you’ll appreciate this story.
My computer picked up some disgusting virus, probably from this site. So I search through kijiji for someone to do repair and I see an ad from first year UofT computer engineering student willing to clear virus(es) and reload windows for $30.
He comes by to drop off computer after all repairs (yes, drop off) and I ask him for some business cards, he doesn’t have any. So I throw him an extra ten and tell him to get some cards printed.
——————————
I may know that guy, after reloading windows he loads an untraceable back door to a phantom port, and using an active-x logger and some sub-HTML script he can see EVERYTHING that your pc does.

what did you think you’d get for a 30 bucks?
good luck.

ps. just kidding.

#166 Ponies Pilate on 06.12.15 at 2:40 pm

The poker game will end because Merkel will not allow the Greeks to play the Nazi card any longer.

#167 Robert on 06.12.15 at 2:48 pm

Lets get real gang how can any of you suggest that you have a crystal ball on the economy or on interest rate direction. Is there really anyone on this blog that trusts those responsible for running our fine Country? Garth keeps suggesting that his idea of a balanced portfolio is hedged against huge losses and yet who could dispute that the DOW could not drop 30% over the summer or even perhaps more. Balanced and Hedged ??? Is the US going to raise rates in September I am sure that the Federal Reserve donot have this answer today. How many black swans can you count in the World economy today? Which one will materialize? How will it impact your financial well being? Even our Finance Minister made it clear to Canadians yesterday that he has no idea of the future.

The point of a balanced and globally diversified portfolio is to avoid the kind of paranoid fear you exhibit. If exposure to US large cap stocks is only 7-8% of your portfolio, why would you freak over a big (and temporary) drop in the Dow? — Garth

#168 Mark on 06.12.15 at 2:56 pm

“Anybody who is predicting deflation is poor. “

Couldn’t be anything further from the truth. Performance in the sort of investments that benefit from deflation, particularly bonds, have made their owners spectacularly wealthy. While those betting on inflation, by owning the traditional inflation hedges, are those who haven’t been accumulating a lot of wealth over the past decade.

Do you just make everything up as you go along? Sure seems that way. Living up to the Troll nickname, aren’t you?

#169 Edward on 06.12.15 at 3:06 pm

NEGATIVE EQUITY – Could it happen in Canada? Absolutely, especially if you bought in Saskatchewan or Ft. Mc. at the peak. Pretty much anywhere at the peak.

http://www.cnbc.com/id/102755072

#170 bdy sktrn on 06.12.15 at 3:11 pm

breaking news….

burrard bridge yoga class cancelled!

lulu pulled the plug and christy caved it seems.

see, vancouver can be sensible on occasion!

#171 bdy sktrn on 06.12.15 at 3:16 pm

just watched some idiot come flying around the corner , tires screaming, and take out a ducatti and a brand new yamaha dual sport parked on the street in front of my place, then take off full speed.

for some reason i parked my bike across the street late last night. weird.

#172 Sheane Wallace on 06.12.15 at 3:21 pm

#38 Georgekal

the reason is :
because we host the maple leafs and have Tim Hortons.

Who else has that? NO ONE!

#173 Karma on 06.12.15 at 3:27 pm

Suck it The American.

http://www.bloombergview.com/articles/2015-06-12/canada-might-have-the-goods-to-become-a-superpower

#174 Ray Vasquez on 06.12.15 at 3:29 pm

To #159 omg the original

My brother-in-law won a net 5 million dollar lotto jackpot in Arizona back in 1993.

He was a cost accountant making $58,000 a year back then and wife stayed at home taking care of the kids, 4 and 6 back then.

All they did was buy 30 year treasury bonds and 30 year Arizona tax free state G.O.’s at 8.00%, 8.5% rates.

According to him, they have no mortgage, no debts at all, a nice $500,000 paid off house and they now have $11 million dollars in various investments.

They are a rare breed when it comes to lottery winners.

#175 Broke Dick on 06.12.15 at 3:31 pm

#165 bdy sktrn on 06.12.15 at 2:34 pm
#147 Broke Dick on 06.12.15 at 12:51 pm
Smokey you’ll appreciate this story.
My computer picked up some disgusting virus, probably from this site. So I search through kijiji for someone to do repair and I see an ad from first year UofT computer engineering student willing to clear virus(es) and reload windows for $30.
He comes by to drop off computer after all repairs (yes, drop off) and I ask him for some business cards, he doesn’t have any. So I throw him an extra ten and tell him to get some cards printed.
——————————
I may know that guy, after reloading windows he loads an untraceable back door to a phantom port, and using an active-x logger and some sub-HTML script he can see EVERYTHING that your pc does.

=========================That’s ok, I only use that computer for porn.

#176 Bby604 on 06.12.15 at 3:33 pm

Ian Young might as well work for the real estate board. He is obsessed with mythical heaps of foreign money and ignores the fact all real estate is local. — Garth
——–
Cameron Muir works the crea and you discredited him many times in the past but now that his view aligns with yours he is credible and factual…. Get a grip

On this issue, we are aligned. Because it is the truthful and honest position. It’s refreshing to see Muir take off his house-humper hat. — Garth

#177 bdy sktrn on 06.12.15 at 3:43 pm

#175 Broke Dick
—————————
lol

#178 Ray Vasquez on 06.12.15 at 3:43 pm

I forgot to mention that he did buy each of his adult children $300,000 homes back in 2009 and gift them $700,000 each in 5.00%, tax free state G.O. bonds back in 2009 plus $65,000 in cash.

So really, it is more like $13.13 million dollars of total, family, net wealth since the 1993 lottery win

#179 Setting the Record Straight on 06.12.15 at 3:45 pm

#30 mitzerboy aka queencity kid on 06.11.15 at 7:28 pm
Blessed be garth
and thank you

&&&&&&
Gag me

#180 Keith in Calgary on 06.12.15 at 3:49 pm

No cherry picking here……I’d rather cut down the entire tree instead.

Stop using “adjusted stats” and look at the entire picture………….stop considering them as credible sources of information. They are not. Approximately 33% of the 320 million Americans are not working or have stopped looking for work. That is what I am referring to……a 280K massaged jobs number for one month tracking low income bartender and McDonald’s positions is hardly representative of an economic comeback.

The stock market is booming because of QE money, share buybacks and government manipulation. Not because there is underlying value representative of said values within those shares.

Home ownership rates in the US are plummeting on a percentile demographic basis.

I could go on…………

Don’t bother. Over 200K jobs in 15 of the past 16 months is all the Fed needs to see. Up she goes. — Garth

#181 Setting the Record Straight on 06.12.15 at 3:50 pm

@34
#34 Goldie on 06.11.15 at 7:44 pm
#17 pope Francis

I’ve always liked you as a pope , and that look of disgust on your face in the picture you linked to as you stand next to Harper makes me like you even more. Surely it must have made your skin crawl having to stand so close.

&&&&&&
He was probably thanking God for small mercies. It could have been even worse. It could have been Trudeau!

Your comments are becoming ugly and meaningless. Maybe you should stop. — Garth

#182 Bby604 on 06.12.15 at 3:51 pm

On this issue, we are aligned. Because it is the truthful and honest position. It’s refreshing to see Muir take off his house-humper hat. — Garth
——–
Funny now after the foreign ownership debate is gaining traction in political circles, the crea does 180 degree turn on their foreign money stance , There is no facts or data to support his or your or # don’thaveamillions view, so your “honest and truthful” although heartwarming is bunk

Muir is not with CREA, but rather the provincial association, which I do not believe had any public position on foreign investing. Muir is simply stating the obvious: Canadians are almost wholly responsible for current pricing. I agree. — Garth

#183 Setting the Record Straight on 06.12.15 at 4:02 pm

@40
The most courteous Canadians I bump into in the GTA and in Canada in general seem to be Asian folk from Vietnam or China or Hong Kong or Korean or Thais. I am totally biased in that area from sixty years of more than excellent interaction with these good people.

&&&&&&&&

Attributing personality traits to ethnic origin?
Isn’t this racism? I do not understand why these remarks are allowed when other remarks concerned racist are not.

Since when is ‘Thai’ a race? — Garth

#184 David #1 on 06.12.15 at 4:03 pm

Toronto condo vacancies at all time high according to blogTO. and you thought you were going to rent ….

http://www.blogto.com/city/2015/06/toronto_condo_vacancies_at_all_time_high/

#185 Setting the Record Straight on 06.12.15 at 4:18 pm

@76
think that is? I, personally, think goverment policy has a lot to do with it, helped in part by realtors’ associations…we’ve had a little problem with inflation imbalances in this country over the last fifteen years, and house prices are just one way to level the playing field…
&&&&&
I don’t understand what you are trying to tell us in this paragraph. Could you please elucidate.

#186 Blacksheep on 06.12.15 at 4:21 pm

“It’s refreshing to see Muir take off his house-humper hat. — Garth’
——————————————————
Garth, stop….your killing me, I never knew you were so funny!

Something about a Tiger and it’s stripe’s applies…

If Muir was adopting an opposite view, he would be supporting the realtors who are trying to scare people into buying. He’s not. It’s a solid stand. By the way, it should be “its stripes.” — Garth

#187 Roial1 on 06.12.15 at 4:24 pm

DELETED (Anti-Chinese)

#188 Setting the Record Straight on 06.12.15 at 4:30 pm

@97
me 85% of Haitians are of African decent. And news for you, while the Asians, Europeans and other groups that live in and have citizenship in various African countries are considered African, they can still be said to be of Asian, Dutch, Polish, European or whatever else decent.
&&&&&
I thought on this blog once you moved to a country, say Canada, that you were Canadian. So if you are originally from day France and have citizenship in Senegal you were Senegalese.

But I guess Quebecers would definitely mark Albertans as foreigners.

#189 bill on 06.12.15 at 4:35 pm

#176 Bby604 on 06.12.15 at 3:33 pm
perhaps Cam is covering his ass.does he see a day when clients phone to say your fellow realtors told me it was all ham buying up the vancouver….?
and complaining bitterly about what his fellow realtors implied?? or did! like the fake mainland Chinese helicopter real estate buyers and the young women that posed as buyers as well….
yeah that was really professional.
oh and the ‘asian place holders’ or shills as the carny folk say.

#190 S.Bby on 06.12.15 at 5:05 pm

#161: Ponies Pilate
Lulu Island
More than a coincidence for another famous Vancouver name: Lululemon .

#191 Bby604 on 06.12.15 at 5:10 pm

Muir is not with CREA, but rather the provincial association, which I do not believe had any public position on foreign investing. Muir is simply stating the obvious: Canadians are almost wholly responsible for current pricing. I agree. — Garth
——–
Regardless , He is in the business of selling houses , they will say whatever is beneficial to them, things have changed and this stance is better now that the political landscape has shifted slightly, ie a government intevention into the housing market will not be good for realtors , watch other realtors take this stance to get ahead of a growing discontent and voter pressure.

#192 Smoking Man on 06.12.15 at 5:14 pm

#165 bdy sktrn on 06.12.15 at 2:34 pm
#147 Broke Dick on 06.12.15 at 12:51 pm
Smokey you’ll appreciate this story.
My computer picked up some disgusting virus, probably from this site. So I search through kijiji for someone to do repair and I see an ad from first year UofT computer engineering student willing to clear virus(es) and reload windows for $30.
He comes by to drop off computer after all repairs (yes, drop off) and I ask him for some business cards, he doesn’t have any. So I throw him an extra ten and tell him to get some cards printed.
——————————
I may know that guy, after reloading windows he loads an untraceable back door to a phantom port, and using an active-x logger and some sub-HTML script he can see EVERYTHING that your pc does.

what did you think you’d get for a 30 bucks?
good luck.

ps. just kidding.
……

You can buy a pre loaded USB stick at radio shack , dose what the kid did for you…

#193 bill on 06.12.15 at 5:33 pm

#180 Keith in Calgary on 06.12.15 at 3:49 pm
your stats sound like the ones that are massaged ….
where did you get them from ie link?

#194 Andrew Grantham on 06.12.15 at 5:55 pm

No Asian dudes invading White Rock???????

#195 triplenet on 06.12.15 at 5:56 pm

#99. Victoria real estate

You are analysing average home price sales data.
Tell your wife she is average.
Then lie. ‘Cause you’re an average guy.
Wise people have no time for averages.
Average has never accomplished a thing.
Except sheep.
Ewe too.

#196 Gulf Breeze on 06.12.15 at 6:00 pm

@Marco,

Ambrose Evans Pritchard assumes there will be a tightening of the money supply, triggered by Greece, the fed, herding behavior in the crowded trade of fixed income. Granted.

I have to get this straight now. Do you think govts are going to be forced to raise yield to compete with corporate debt? If so, I understand that logic. But if the U.S fed risks triggering this fiasco, I’m thinking they will choose not to. Plenty to lose if they do, particularly in an election year.

#197 Sheane Wallace on 06.12.15 at 6:08 pm

#172 Sheane Wallace

for Bill C-24 Robo readers:
Post 172 was not sarcasm (i.e. treason) but pure patriotism.

#198 Sheane Wallace on 06.12.15 at 6:21 pm

Increase in long term bond yields and further steepening v.s. flattening of the yield curve clearly indicate that:

1. There is first rate hike coming soon/September in US and most likely others pretty soon after that, I bet on at least 1 .5 % increase in the next 2 years.

2. Mortgage rates are already increasing in the states – from 3 to over 4 % in few weeks.

Can you smell the storm coming? Are they losing the bond market?

PIMCO – the largest bond holder offloaded 2/3 of it’s treasuries portfolio.

It is starting folks,

Yield on Canadian 10 year bonds over 4 % in the next 2-3 years and yes, mortgages over 5.5%-6 %.

The cherry on the cake is that inflation actually would be higher than the interest rates, i.s negative interest rates policy will continue and savers will get screwed anyway.

BTW BOC will be delaying the rate hike initially due to the predicament with CMHC and Ca dollar will get creamed, going potentially to the .60 even 0.50 handle.

This will force late but much more aggressive rate hike on our part, just watch the feuerwerks,

#199 maxx on 06.12.15 at 7:04 pm

#15 HFT Dude on 06.11.15 at 6:41 pm

“Canada and the U.S. are going in opposite directions.

“According to the Fed, U.S. households’ net worth rose $1.63 trillion in the first quarter…….”

“Importantly, the latest surge in wealth was not driven nor sustained by any debt “bubble.” ”

I’d second that. Americans I’ve spoken with, post gfc, have been hell-bent on paying down debt and holding onto their homes. Seems many have succeeded and done just that. Bravo.

Way past time for Canada’s grass roots economy to pull away from bank’s teats to start building again.

#200 A Girl Who Invests on 06.12.15 at 7:12 pm

Anything interesting happening in the Saskatoon and Regina housing markets?

#201 Thornhill Guy on 06.12.15 at 7:18 pm

The issue is not foreign money, strictly speaking. However most purchases in Markham and Richmond Hill are by relatively recent immigrants from China and Iran. Since they are legal residents they would not show up as “foreign” but it certainly is money from overseas distorting the market. I see it all over my neighborhood no matter how much you try to deny it.

#202 ptbobman on 06.13.15 at 2:22 am

Good comments from realtor in West Van 4 $ million teardown:
Angell said if it wanted to preserve affordability, the government should have brought in those kinds of measures before the market exploded. “By the time they bring this in, the market will have changed,” he said.

Wachsmuth said the issue isn’t about where buyers are coming from, but what they’re doing with the properties.

“The housing market’s a weird thing,” he said. “Houses are simultaneously a possible investment and a human necessity. Because they are both of these things at the same time, you can get some really tough situations. Vancouver’s in the face of one of those right now.”
https://www.biv.com/article/2015/6/4m-teardown-sells-1m-over-asking-price-throwing-mo/

#203 Victoria Real Estate Update on 06.14.15 at 3:15 pm

. Saanich East Condominiums. .
. . . . . .Median Prices. . . . . . .
. . . .Percent Below Peak. . . . .
. . . . . . . . . . . . . . . . . . . . .
..0%. . .*. . . . . . . . . . . . . . .
– 2%. . . . . . . . . . . . . . . . . .
– 4%. . . . . . . . . . . . . . . . . .
– 6%. . . . . . . . .*. . . . . . . . .
– 8%. . . . . . . . . . . . . . . . . .
-10%. . . . . . . . . . . . . . . . . .
-12%. . . . . . . . . . . . . . . . . .
-14%. . . . . . . . . . . . . . .*. .
————————————————-
. . . . . May. . . .May. . . .Dec.
. . . . .2010. . . 2012. . . 2013