The money changers

STUDENT modified

“It’s pretty sad what is happening in my city,” says Chad, “but they must have a market for it.”

You betcha, Chad. Another reason why Vancouver is so unique these days. In Toronto, for example, you usually have to go to a sleazy place next to a tat parlour and a kick-boxing studio, go through a door covered in metal bars and talk to a woman with a nose ring to get a payday loan. But not in YVR, baby, where debt, financial servitude and negative cash flow are mainstream. You want some money because you’re broke and willing to pay 19%? Just come to Vancity.

Quietly, Canada’s largest credit union, with $18.4 billion in assets, has entered the slimiest little corner of the financial universe – giving emergency loans to people who have run out of money and are desperate enough to pay anything to get it. “Need money fast?” the ads say. “We can help with that.”

VANCITY modified

The interesting point is that Vancity’s a major force in keeping the Vancouver unreal estate market alive. Its current portfolio of residential mortgages clocks in at about $11,000,000,000, and you can presume the bulk of it is high-ratio, high-risk, CMHC-backed loans in a city where the average detached house costs 15 times the average income. But Vancity is not just a quasi-bank. These guys are highly aggressive.

In the most unaffordable, dangerous, unstable housing market in North America, Vancity has been a leader in leveraging people into real estate they can’t actually afford. For example, the company is now willing to ‘loan’ virgins half of their 5% down payment at the nominal rate of 0.01% so they’ll qualify to borrow half a million dollars. That, of course, is basically free money.

Then there’s the ‘Mixer Mortgage’, so you can buy a house with “a partner, family members, a roommate or friends.” What a legal quagmire that can turn out to be. And Vancity is still in the business of liar loans, letting self-employed people state their incomes, then adding 15% more for qualifying purposes and even offering 35-year amortizations.

There are mortgages for people who want to turn their garages into houses. And the ‘Springboard’ mortgage is set up to basically give people homes worth $300,000 or less. “If you live in non-profit housing, are on a low income, and have no money saved for a down payment, this program could be right for you. If you qualify, we’ll loan you the money for a 20% down payment, plus a mortgage for the balance of the purchase price.”

So what happens if you buy a piece of real estate without actually having much, or any, money? If you let Vancity give you a 0.01% downpayment loan, or take the cash-back loot they’re offering, or just give you 100% financing because you’re low-income and struggling with no savings? What happens if you become so debt-strapped buying a house that you can’t afford food in week three of a long four-week month?

Simple. Get a Vancity “Fair & Fast” payday loan, and start shelling over 19% interest.

There are many reasons why real estate costs what it does in Vancouver. Vancity is one of them. So is the average savings rate, which is negative (the only province). Plus the social disease called house lust. Add this to the usual list of geography, climate and foreign cash. Truth is, the housing market’s turned into a speculative casino, and everybody is playing, aided and abetted by a near-bank largely unencumbered by federal regulation (credit unions in BC are overseen by the provincial Financial Institutions Commission, not Ottawa), or much of a conscience.

But, like Chad says, Vancity must know what it’s doing.

Or at least what’s coming.

189 comments ↓

#1 armpit on 06.14.15 at 5:04 pm

Why so early?….Rain kept you inside?

#2 Victoria Real Estate Update on 06.14.15 at 5:04 pm

At the end of 2013 (beginning of 2014) condo prices in Saanich East had fallen 14.4% below peak (2010).

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

(source: Victoria’s board)
(3-month median)

For the following information keep in mind that the current assessed value of a property reflects the value as of July 1, 2014.

As I’ve recently shown, there are several core area condos listed well below assessed (July 1, 2014) value:

*** 26% Below Assessed Value ***
*** 307 – 1035 McClure Street ***
* 1 bed, 1 bath condo
* close to downtown
* quiet side street, corner suite
* pets allowed

*** 13% Below Assessed Value ***
*** 108-3215 Alder Street ***
* 1 bed, 1 bath condo
* minutes from downtown
* spacious suite, pets allowed

*** 13% Below Assessed Value ***
*** 403 – 3277 Glasgow Avenue ***
* 1 bed, 1 bath condo
* minutes from downtown
* spacious suite, pets allowed

I’ve written about these condos in the past. They continue to sit on the market lonely and unloved.

In a flat market (year-over-year), these condos would probably sell close to their assessed values.

These condos will probably sell for significantly less than their assessed values. This suggests a falling market (year-over-year).

#3 Victoria Real Estate Update on 06.14.15 at 5:05 pm

Recently I posted SFH price charts showing significant price declines from peak (2010) to the end of 2013 (beginning of 2014) in separate areas of Greater Victoria:

Oak Bay: – 15%
Victoria: -13%
Langford: -21%

From May 2014 to May 2015 Greater Victoria’s SFH average price was flat, despite upward skewing of the average price due to a change in the sales mix. This is evidence that values of individual houses have actually fallen year-over-year.

. Average Single Family Home Price. .
. . . . . . Greater Victoria. . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . .
+ 1%. . . . . . . . . . . . . . . . . . . . . .
…0%. . . .*. . . . . . . . . . .*. . . . . .
– 1%. . . . . . . . . . . . . . . . . . . . . .
———————————————————-
. . . . . . .May. . . . . . . . .May. . . . .
. . . . . . .2014. . . . . . . . 2015. . . .

(source: Victoria’s board)
(6-month average)

All of these stats can be verified using information from Victoria’s RE board

Realtors have posted comments accusing me of lying with stats. Apparently they haven’t taken the time to verify the information.

#4 charles on 06.14.15 at 5:08 pm

The following numbers are from the credit market summary data table released by Statistics Canada last Friday:

At the end of March, 2015 the total household, government (all levels) and business debt in Canada (bottom line of the credit market summary data table – total debt outstanding) was $5.89 trillion.

In the first 3 months of this year the total debt outstanding in Canada increased by $122 billion. For that 90 day period it increased at a rate of $1.35 billion per day.

In the calendar year 2014 the total debt outstanding in Canada increased by $258 billion. In 2013 it increased by $287 billion. In 2012 it increased by $272 billion.

The start date of the data table can be changed by clicking on the “add/remove data” tab at the top of the page.

http://www5.statcan.gc.ca/cansim/pick-choisir?lang=eng&p2=33&id=3780122

#5 chapter 9 on 06.14.15 at 5:11 pm

It will be only a matter of time before Vancity becomes a new statistic on The Mortgage Lender Implode-O-Meter site!!!

#6 Victoria Real Estate Update on 06.14.15 at 5:14 pm

This year (January through May), SFH sales have been 15% below Victoria’s long-term average.

Realtors have posted comments claiming that comparisons of SFH sales should go back only 8 or 10 years. Of course they want that. Here’s why:

2012: lowest SFH sales total since 1984
2013: second lowest SFH sales total since 1984
2011: third lowest SFH sales total since 1984

(source: Victoria’s board)
(not population adjusted)

Since 2007 we can say that, in general, SFH sales across Greater Victoria have been extraordinarily slow and not at all representative of Victoria’s long-term average.

Limiting SFH sales comparisons to 8 or 10 years ago would be unfair and extremely misleading.

To get a representative average value for yearly SFH sales totals across Greater Victoria, I’ve used sales data from the last 10 years as well as data from 11, 12, 13,…15,…20 years ago…- each year from 1986 to present (population data goes back to 1986).

2007’s SFH sales total worked out to be a close approximation for Greater Victoria’s long-term average (population adjusted).

In 2015 we are 15% behind 2007’s pace.

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

(source: Victoria’s board)

#7 Wile Kyoto on 06.14.15 at 5:15 pm

But no Garth!
I saw a picture at my Vancity branch showing the president gal talking with the Dalai Lama!!!!
this is all for the “greater good”!
lalalala off to yoga
on a main arterial, blocking traffic
except the bicycle lane
that would be stupid

#8 Get back Loretta on 06.14.15 at 5:16 pm

And all along we thought their “Make Good Money” slogan was about ethics. Bwahahahaha. Taking my money out of that casino this week.

#9 Victoria Real Estate Update on 06.14.15 at 5:20 pm

Wealthy buyers from China will not stop Victoria’s well established general price downtrend (since 2010). The whole idea is pure fabrication and completely false. Here’s why:

* In 2014, foreign buyers accounted for only 1.6% of total sales across Greater Victoria (source: Victoria’s board).

* As Garth has pointed out, Cameron Muir of BC’s RE Association recently stated that: “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.”

* Wealthy buyers from China were buying houses in Vancouver in 2008-09, yet this happened:

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

. . . . . Vancouver House Prices. . . . . .
. Percent Below July 2008 Price Level . .
. . . . . . . . . . . . . . . . . . . . . . . . . . .
. .0%. . .*. . . . . . . . . . . . . . . . . . . .
– 1%. . . . . . . . . . . . . . . . . . . . . . . .
– 2%. . . . . . . . . . . . . . . . . . . . . . . .
– 3%. . . . . . . . . . . . . . . . . . . . . . . .
– 4%. . . . . . . . . . . . . . . . . . . . . . . .
– 5%. . . . . . . . . . . . . . . . . . . . . . . .
– 6%. . . . . . . . . . . *. . . . . . . . . . . .
– 7%. . . . . . . . . . . . . . . . . . . . . . . .
– 8%. . . . . . . . . . . . . . . . . . . . . . . .
– 9%. . . . . . . . . . . . . . . . . . . . . . . .
-10%. . . . . . . . . . . . . . . . . . . . . . . .
-11%. . . . . . . . . . . . . . . . . . . . . . . .
-12%. . . . . . . . . . . . . . . . . . . . * . . .
—————————————————————-
. . . . . .July. . . . December. . . . May. . .
. . . . . 2008. . . . . 2008 . . . . . 2009. . .

(source: Teranet’s index)

Prices in Vancouver would have continued to fall in 2009 if rates hadn’t suddenly been slashed from near-normal to emergency levels.

Wealthy buyers from China didn’t prevent Vancouver’s major price decline in 08-09 and they couldn’t stop Victoria’s current decline even if more of them bought here.

There is simply nothing to back the claim that wealthy buyers from China have suddenly discovered Victoria or that they could have a positive effect on house prices.

So far, Victoria’s price decline has taken place without the strong downward force of rising interest rates.

Rates will rise and that will probably start soon (realtors post comments saying that rates will never rise).

Victoria’s price decline will speed up as rates rise.

#10 Kevin on 06.14.15 at 5:22 pm

If these people with no money get such easy financing, what does it matter to them if they default?

#11 Victor V on 06.14.15 at 5:25 pm

Forest Hill mansion price drop from $12,000,000 to $10,995,000 and now down to $9,600,000.

http://themashcanada.blogspot.ca/2015/06/price-drop-2-115-dunvegan-road-forest.html

#12 Linda on 06.14.15 at 5:33 pm

Ah yes, the payday loan. This has been a common sight in Calgary for at least a decade. I’m not sure exactly how many of these payday loan outlets exist in Calgary but I’d guess at least 100.

It bewilders me how anyone could think going to one of these places is a good idea. We’ve had a few cases where the legal limit of interest was exceeded by more than just a little. Though the legal limit is more than enough to cause heart failure as it is set at 60%.

I know some people fly ‘under the radar’ & don’t want to have a bank account. Others are desperate & turn to the loan company because they see no other way to cover their expenses. Am I naive to think that the number of people who fit the description is only a small fraction of the actual users of the payday loan companies? I can’t help but believe that people use these companies out of sheer financial ignorance of how expensive they are.

#13 Debt Collector on 06.14.15 at 5:47 pm

I work part-time for a payday loan company in Ontario. They charge 21% for two weeks. That is, if you borrow $100 on June 1, you owe $121 on June 15. These VanCity guys are pikers!

#14 Karen Etheridge on 06.14.15 at 5:50 pm

How can these mortgages be legal? Doesn’t the law state that a deposit must be at least 5%, and credit cannot be used (i.e. you must have cold hard cash)? Apparently Mr. Flaherty didn’t go far enough.

I’m a client of VanCity, but this is pretty disgusting, and I have no wish to be a shareholder and party to such practices.

#15 Freedom First on 06.14.15 at 5:51 pm

Usury is evil. No exception.

I live debt free and always put my own Freedom First. If you don’t look after yourself, other people will look after you, and Garth has been showing us for years how they do it.

If you want consumer protection, look in the mirror. Nobody else has your back. I know, as I have been self supporting since 17 through circumstances beyond my control. I have been blessed, and I am grateful.

#16 Mister Obvious on 06.14.15 at 5:52 pm

Here’s my Vancity story. I swear every word is true…

I had a residential mortgage at Vancity in 1986 on which I was making biweekly payments. Things were going okay for the first couple of months then their computer system started to act up. I had my usual payment taken followed by another one only three days later.

When I discovered this ‘extra payment from nowhere’ I went in and complained. They said to me “You’re perfectly correct sir; an extra payment has been taken. We’ll reverse that right away”. And so they did. Two weeks later, same thing happened. I went back and complained. They agreed an extra payment had been taken (again) and they reversed that one too.

Then it started to get really bad. Payments were coming out at random times every five days, every nine days every two days. I found myself visiting Vancity often to get my payments straightened out. They were, of course, very apologetic and offered me this tip:

“If you keep less than a single payments balance in that account then the computer can’t take it. You should just put in enough funds to cover a payment a day or two before the payment comes due”

I thanked them for that sage advice then demanded to see the manager. I sat in an office with the manager and he said this to me:

“Well, you’re a computer guy so you should understand that, when trying to correct software problems like these, some systems take priority over others. It so happens our commercial accounts are having problems too and they take priority over member accounts. That’s where we’re spending most of our effort right now. We’ll get to the problems in your account as soon as we can.”

I took their advice and went one step further. I promptly took out all funds from my Vancity accounts and moved it all to the Bank of Montreal. Then I went to the Vancity every two weeks and manually deposited my biweekly mortgage payment. I did this until the term of the mortgage was up. Then I moved the mortgage to the Bank of Montreal and never looked back.

#17 crowdedelevatorfartz on 06.14.15 at 5:55 pm

Vancity
With the most nauseating, ass kissing, politically correct tv ads ever produced.
I think they’ve covered just about everyone in BC with this ad…
https://www.youtube.com/watch?v=xAJtlpTekr4&list=PL0DA4087C2CD0999D&index=1

Caucasians, asians, gays, straights, singles, marrieds, men, women….yup that just about covers it!
Rolling……. Cut! Print!

#18 Julia on 06.14.15 at 5:56 pm

Vancity is not the only financial institution that grosses up self employed declared income. Is it on the assumption that not everything is declared ? If so that is obscene.

#19 batt519 on 06.14.15 at 5:57 pm

Stop The Insanity!!

Buy $ilver.

#20 North Burnaby on 06.14.15 at 6:07 pm

Buying into pre-sale condos early is not only a great investment, but it also acts as a forced savings account for young people too!

Good drugs today? — Garth

#21 Chris in Nanaimo on 06.14.15 at 6:11 pm

So looks like open racism has made it across the Strait of Georgia to Nanaimo.

Drove past some realtor bench ads this morning that had been vandalised. Pretty much most bench ads here are for realtors. The only ones that had been vandalaized featured realtors of Asian decent and/or had cantonese writing. One ad had ‘GO AWAY’ sprayed over it.

The paranoia is spreading.

#22 Hot Albertan Money on 06.14.15 at 6:26 pm

Does anybody even read Victoria Real Estate Update’s posts?

4 posts in 15 minutes? Give it up dude

#23 Rainmaker on 06.14.15 at 6:31 pm

It really is sad to see so many people taking advantage of others – but it is the world we live in and it’s all around us.

Even with some companies listed on the stock market – it’s an old boys club between the company managers on the BOD. In many cases executives seek out individuals they have a relationship with to sit on their BOD. When it comes time for the BOD to decide on executive compensation or address poor performance, well you can guess what happens.

That said, I do believe many companies are ethical with good governance, but just as many are not in my view. One has to vigilant all the time, there are far too many people looking out for themselves and taking advantage of others.

On a positive note, I believe this blog is making a positive contribution in that Garth has shared a number of sound principles on how to manage our finances. In addition he continues to point out the many risks and perils we all face in today’s society.

Thank Garth.

#24 Smartalox on 06.14.15 at 6:43 pm

Isn’t the ‘gradk in the pic the same nitwit who was arrested for impersonating a member of the Canadian Forces on live TV last rememberance day?

#25 Drill Baby Drill on 06.14.15 at 6:43 pm

I will bet with anyone right now that when this all blows up these very same mortgage borrowers will demand that the “Government” provide relief checks to cover their debt.
This happened in the USA in 2009.

#26 Russ L on 06.14.15 at 6:56 pm

Hey the slider didn’t work for me. So how can I know what $1500 will cost me. :)

At the very least, this comment is about as useful as most of the other ones each day.

Cheers, Russ

Oh, and a Happy Father’s Day to the breeders out there.

#27 Centurion on 06.14.15 at 7:00 pm

If I had a dollar for every time Victoria Real Estate Update mentioned 2007…

#28 Drill Baby Drill on 06.14.15 at 7:00 pm

“Victoria Real Estate Update”

Here is a quarter, now blog someone who cares.

#29 crowdedelevatorfartz on 06.14.15 at 7:07 pm

@#20 North Burnaby
“Buying into pre-sale condos early is not only a great investment, but it also acts as a forced savings account for young people too….”
+++++++++++++++++++++++++++++++++++

While I realize that north Burnaby is somewhat higher in elevation than the rest of the lower mainland I didnt realize that severe sunstroke could occur.
The Kensington Medical clinic is open today.
Seek help.

#30 DisgustMadeMePost on 06.14.15 at 7:10 pm

Good grief.

Just found out my accountant friend not only bought a house but paid OVER LIST!! List was 1.6. She is now trying to sell her original home for 1.2.

For someone who is almost 55 (her hubby is older) with kids in university… I am speechless.

Holy smokes… Someone light the fuse already.

My brother just got back from Dubrovnik. I’m thinking I’d rather go soak in the blue Adriatic than pay off another half million mortgage!

#31 LH on 06.14.15 at 7:14 pm

Thou shalt not lend money upon usury to thy Brother.
But to the stranger, thou mayst lend upon usury.

So Payday loans are Kosher after all, it says so in the good book.

#32 Uber Comes to the Real Estate Market on 06.14.15 at 7:17 pm

This is a bit off topic but there is a development in the US which may have some affect here if it can attract enough interest. It is a new approach that has been developed by a company called Redfin. Time will tell if it is successful. If it is, and if we adopt it here in Canada, it could mean a mass extinction event for real estate agents: RE/MAX would have to RE/THINK their approach.

And not a single tear will be shed.

#33 Vanshity on 06.14.15 at 7:20 pm

Money Changers:
Where’s Jesus when you need him.
BTW, Vanshity is what the other Credit Unions used to call VanCity.
Vancity used to introduce some inventive products such as the Plan 24, but now they seem to have gone off se bonkers.
Time to bring in FIFA, sorry FICOM.

#34 LH on 06.14.15 at 7:20 pm

Usury and its children (the whole financial industry, of which Smoking Man, Garth, and yours truly alike are part of) may be considered the worlds second oldest profession. It has been around since the invention of coinage, and maybe even before that, as informal credit systems. Vancity is just the latest chapter in this proud tradition.

#35 Beston McEckerly on 06.14.15 at 7:20 pm

With a lot of the small communities selling rural real estate..seems like it would be hard to find buyers and sellers since these towns are shrinking. Buy at your own risk basically? I guess unless there is a commodities boom again..

#36 ShawnG in TO on 06.14.15 at 7:28 pm

and people claim there’s no subprime in Canada… well only in abundance and in the most overpriced market. this will not end up well.

looks like BC will raise taxes. but surely not on yoga.

#37 West Coast on 06.14.15 at 7:28 pm

Hi Garth,

Well times have changed. VanCity should think twice about what it is currently promoting (see reference to thrift below!)
“A credit union is a cooperative, not-for-profit financial institution organized to promote thrift and provide credit to members” ……who are given “a safe, convenient place to save and borrow at reasonable rates at an institution that exists to benefit them, not to make a profit.”
http://www.coopfcu.org/about-us/membership/what-is-a-credit-union.html

#38 BG on 06.14.15 at 7:31 pm

I’ve been offered a job in Richmond, BC.
85k/year.

Currently in Montreal I make about the same and live downtown.

I visited Vancouver before and liked it, but I stuck the downtown to Stanley park area.

Is Richmond a good area for a millennial with girlfriend?

#39 Investorz on 06.14.15 at 7:41 pm

“Toronto condo vacancies at all time high”

Headlines like this are starting to come out, in blogs and Twitter. Vacancies stats, can we trust those?

Clicking around I came across that 2014 article where our friend Brad Lamb said 50% of condos are foreign-owned. I know I know, the CMHC says it’s 3%. And banks says they don’t know. How about that, can I trust banks when they say they can’t know this?

I really hope the government can force CREA to open up their data. And our banks should be know where the sales are going. It’s 2015 you know…

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

Source: http://www.cbc.ca/news/business/toronto-s-condo-king-says-50-of-condos-are-foreign-owned-1.2734554

#40 Ret on 06.14.15 at 7:45 pm

So much for government oversight by BC and CMHC.

Similar shenanigans have to be happening in Ontario from the amount of credit and helocs that even low income people are carrying.

Student loan debt? Many of the students at McMaster tell me that they will be $35-40,000 in debt after a three year degree, which is basically useless in the job market. What will the rising interest rates do to student loan debt?

Why doesn’t that graduate’s sign say, “Ready to word TODAY!”

The beer and fine arts party is over. It is time for him to be reliant on himself and not the charity of others.

#41 Max Green on 06.14.15 at 7:51 pm

#22 Hot Albertan Money on 06.14.15 at 6:26 pm

Does anybody even read Victoria Real Estate Update’s posts?

4 posts in 15 minutes? Give it up dude
—————————–
Much like the smoking guys posts, I skip over them also.
Victoria Real Estate needs links to actual charts.

#42 Van real on 06.14.15 at 7:53 pm

i agree that Victoria Real estate should tone it down. Nobody cares about Victoria. I live in Vancouver and I couldn’t care less about Victoria. Stop it already!

To BG. No dude you want to live in Vancouver not a suburban wasteland

#43 Turtle on 06.14.15 at 7:59 pm

Re: Victoria

When you tell someone “please stop”, they think about you as an enemy not a friend. And then everybody is their enemy, nobody is a friend and posting comments is the act of war for them. Very negative energy.

Victoria, don’t put yourself in a situation like that. Say something that people actually want to listen, change it up a little.

I think I read most of the comments on this blog in last 6 years, but for Victoria’s and Mark’s comments my action is …

… scroll baby, scroll.

Too much negative energy. I need a strong doze of Smoking Man just to neutralize.
Peace everybody!

#44 Mark on 06.14.15 at 8:03 pm

“How can these mortgages be legal? Doesn’t the law state that a deposit must be at least 5%, and credit cannot be used (i.e. you must have cold hard cash)? Apparently Mr. Flaherty didn’t go far enough.”

No “law” states that. The Bank Act only applies to federally chartered institutions, not provincially regulated institutions such as “Vancity” and most of the Credit Union sector. Its obvious that provincially regulated institutions, to wit: credit unions, are not being regulated to the same standards as the federally chartered Schedule 1 Bank Act institutions.

I imagine that if the federal government were to try and regulate provincially chartered banks, their actions would be ruled ultra vires on account of the division of powers provisions in the Constitution.

#45 Raisemyrent on 06.14.15 at 8:04 pm

#38 BG
Take the job if you want to live in Vancouver proper, move to Vancouver proper (don’t compromise much as to justify leaving Montréal), and commute to Richmond via skytrain if possible, or drive, or car2go. Get the lay of the land and decide if you want to stay at that job or find something else somewhere else (if living near your work is big for you). Ditto for whatever accommodation you find (my friend just came here from Montréal and signed a 3-month lease for a furnished place while she figured it out)
Richmond is a calm/safe/clean area, but it will be a bit of a change from downtown Montréal (way smaller city). People also joke that there’s one way in and one way out, so traffic can be bad. It’s great to drive THROUGH, though (highways).

#46 PM on 06.14.15 at 8:10 pm

That’s far from pay day loans. Pay day lenders are the ones that have interest which works out to 40%APRs etc. Check out the slider on MoneyMart, that’s disgusting: http://www.moneymart.ca/

The Vancity loan is effectively a credit card. Sure it’s not a great rate but unless you consider ever credit card out there to be usury then it’s nothing to be shocked about.

#47 Dan on 06.14.15 at 8:12 pm

Yikes. Vancity has “Northern Rock part deux” written all over it.

#48 Ole Doberman on 06.14.15 at 8:17 pm

Interesting youtube, other than the silly host, it sounds like a condo builder in Vancouver sent random invites to a cocktail party not telling people what it is, then you show up for a free prize but what they are really trying to do is get you to buy a condo? I dunno:

https://www.youtube.com/watch?t=289&v=3d1ch7DJbws

#49 Nora Lenderby on 06.14.15 at 8:17 pm

Truth is, the housing market’s turned into a speculative casino, and everybody is playing, aided and abetted by a near-bank largely unencumbered by federal regulation …, or much of a conscience.

Unencumbered by the thought process too, apparently. Who are these people? If they are honest, they don’t appear competant.

#50 Bobby on 06.14.15 at 8:18 pm

This story is about predatory money lenders. There are lots of them here in Victoria, so many in fact, the mayor of Esquimalt wants to limit the number that can set up shop in her community. If business wasn’t good, they wouldn’t exist. But considering they are expending, I think is somewhat telling.
For the record, I like Victoria Real Estate updates. I know the market here in Victoria and much of what he/she posts is correct. I just saw another home I was watching sell for 10% less than what it was originally listed for. So much for a hot, seller’s market.
I recently had a realtor tell me that a solid market in Victoria would be of upwards of 1000 sales a month. Even with sales the last few months, the sales aren’t there yet.
Perhaps buyers and sellers should be asking realtors the tough questions.

#51 DisgustMadeMePost on 06.14.15 at 8:21 pm

Lol … Lived in Richmond for 1 year.
Would never live there again . Boring and the traffic sucks.

3 road is a nightmare and hideous to see with the elevated rapid transit line.

OTOH Steveston is nice and it’s not THAT far to drive to get to Vancouver.

Good dim sum at the Aberdeen Mall.

Still, one good earthquake and the whole thing slides into the deep blue.

Does that help?

Oh, and gas today is 139.9!

#52 Washed Up Lawyer on 06.14.15 at 8:22 pm

Dear Toronto,

If you are going to get rid of the Gardiner, please consider assisting Calgary with its $5 billion SW ring road. Reduce, re-use and recycle.

Do not smash it into concrete dust to feed to cattle (Yes, cattle have been fed concrete dust). Cut it into re-usable chunks.

We have lots of idled large trucks that can transport it to Cowtown.

Lovingly,

Calgary

#53 Mark on 06.14.15 at 8:33 pm

‘Well times have changed. VanCity should think twice about what it is currently promoting (see reference to thrift below!)”

The problem with Credit Unions is that while they wrap themselves around the flag of being ‘better’ than the “big” banks — in reality, they are less efficient and have less access to capital (hence the higher interest rates they must pay). They pay very little in terms of income tax because they’re designed to be inherently minimally profitable. Thus they create less risk-adjusted value for their ultimate owners and those with funds available to lend.

Unfortunately, if a good chunk of Canada’s credit union sector collapses due to falling RE prices and their over-exposure to such, management will probably blame the big-5. They will blame “those evil big corporations”. Effectively the credit unions are setting themselves up for failure, and setting themselves up to scape-goat capitalism when they do.

#54 ANON on 06.14.15 at 8:36 pm

@#34 LH on 06.14.15 at 7:20 pm

I think making promises is in fact the oldest profession :)
Coinage made it easier to circulate those promises. Then paper and electronic bits facilitated the expansion even further.

#55 Fed-up on 06.14.15 at 8:51 pm

North American stock markets have done little and nothing so far this year. TSX up .7%, Dow up .4% and S&P up 1.7%. Yes, yes I know buy preferred shares, fixed assets, REIT’s and ETF’s then re-balance and think long term, yadda, yadda, I got it.

What will these stock markets look like if they actually DO raise rates in September? 2015 could prove to be a “challenging” year to say the least.

Meanwhile, on paper, the financially moronic are up 10% (yet to be crystallized in most cases I know) in Toronto and Vancouver by leveraging nearly 100% of the purchase price of a flea and termite infested crack house.

Sounds about right.

#56 coastal on 06.14.15 at 8:58 pm

Victoria Update makes some logical posts about assessment sales. I recently discovered several Bear Mountain properties for sale at up to 50% above assessment. Now that’s frigging criminal.

#57 Mark on 06.14.15 at 9:12 pm

“What will these stock markets look like if they actually DO raise rates in September? 2015 could prove to be a “challenging” year to say the least.”

The TSX tends to outperform the US indices during periods of rising rates. In USD$ terms, the TSX hasn’t gone anywhere in 4 years (ie: look up the ticker symbol EWC), while the US indices (ie: VTI) have powered forward nearly 90%. There’s a huge amount of ground the TSX (Canada) will be making up over the next number of years.

Meanwhile, on paper, the financially moronic are up 10% (yet to be crystallized in most cases I know) in Toronto and Vancouver by leveraging nearly 100% of the purchase price of a flea and termite infested crack house.

No they aren’t. At best, an owner of a typical individual property in those locales is even, if not slightly down.

#58 BS on 06.14.15 at 9:19 pm

If these people with no money get such easy financing, what does it matter to them if they default?

Like walking in casino with no money and they ask if you want to gamble for free. If you win you have to pay part of the winnings back. If you lose, you leave the casino with no money like when you walked in. Really nothing to lose.

#59 devore on 06.14.15 at 9:21 pm

#38 BG

Is Richmond a good area for a millennial with girlfriend?

You live in downtown Montreal, and you want to know if you should move to boring suburbia?

#60 BS on 06.14.15 at 9:33 pm

I visited Vancouver before and liked it, but I stuck the downtown to Stanley park area.

Is Richmond a good area for a millennial with girlfriend?

Richmond is a suburb of Vancouver and really there is no comparison between the two. The commute from Vancouver to Richmond is not bad driving or by skytrain. You will be going opposite of traffic. The difference in cost of renting a condo in Vancouver vs Richmond is minimal. Take the job in Richmond but live in Vancouver. Downtown is the place to be IMO if you don’t have kids.

#61 Nagraj on 06.14.15 at 9:34 pm

GT’s post today is good old-fashioned responsible journalism, rare in Canada.

A notable NYT writer once said – if you wanna know the truth ask the victim, ask the guy who’s sobbing.

Well, the PayDay lenders are laughing, Vancity is chuckling.

#62 Sheane Wallace on 06.14.15 at 9:34 pm

predatory lending
19 % a year while paying your < 1 % interest on deposit.

Poor soles are forced to live pay cheque to pay cheque due to excessive inflation caused by credit issued to other 'trustworthy' debtors. Race to excessive indebtedness. Ensured by government. Bringing prosperity and affordable housing.

What a pile of crap.

#63 rampant inflation on 06.14.15 at 9:40 pm

who cares about VANcity? they’re doing what every bankster does. make money, line their own pockets, then when they go belly up, the taxpayer foots the bill.

isn’t that how the banking system works best?

#64 Panhead on 06.14.15 at 9:48 pm

I joined the original (I think) VanCity on East Hastings many moons ago as it was the only finacial institution open on weekends. I went in to do some banking on a Sat morning and the line up was out the door. As I had another appointment I asked the lady at the front desk if I could use her phone. This was before cell phones. she said “no.” I argued with her a while as I was a “member.” Still no success so when I got to the till I asked to withdraw all my money (enough to buy a house in East Van for cash at the time.) The manager was called and tried to smooth things over but I took my money and ran. Never been back either …

#65 OffshoreObserver on 06.14.15 at 10:05 pm

Must views. Here is first of 8:
http://andrewhallam.com/2012/12/passive-investing-the-evidence-the-fund-management-industry-would-prefer-you-not-to-see-part-1-the-outperformance-myth/

#66 Smoking Man on 06.14.15 at 10:07 pm

In Africa it is said, there’s a place elephants go to die. I don’t know that place or care to visit it.. Its their thing.

Today I discovered where humans go to die.. Its a place on the Colorado River, a hot place. Know to locals as Laughlin, Navada on one side, Bull Head Arizona on the other side of the river.

Its a place where multiple sightings of 90 year old men with hairy backs, bald heads and no hair where the socks are worn.

Its a place where if they still have a spouse, she’s 300 lbs, less she’s a smoker and weighs in at 80 with a oxygen tank in her back pack.

Panic sets in for some when they lower one of these old beasts into to pool. Clearly they know he’s wearing a diaper. Everyone scatters in a panic out of the pool. Except for me…I’m into my 10th bud light and I haven’t left the pool since I started drinking..

When they lowered him into the pool leaving 114 degrees into 75 degree releaf. He smiles and remembers his good old days… Occasionally oggoling over some 65 year old smoking woman.

He spends 20 Min in the water. Then the contraption that got him in, gets him out.

We find out later, he left the hotel in the correners black station wagon..

I’m trapped here till Tue, then off too pool parties on the roof of the Cromwell..

Again I won’t fit there either .. 21 year olds to 45 Year olds..

Where is a place for the 55 Year old other than swingers clubs to fit it.

This is my mission.

#67 Llewelyn on 06.14.15 at 10:12 pm

In 2007 I was helping a friend renovate a townhouse he purchased for his daughter in Philadelphia. In the space of one week 14 different mortgage front men knocked on the door to offer a variety of mortgage products based on increasing the value of the townhouse and providing instant cash on the inflated value.

At the same time over 15 townhouses on the street were converted from rentals to homeownership by offering NINJA mortgages to the existing unemployed tenants.

I had an opportunity to talk to several of the new homeowners and determined that the only reason they agreed to purchase their unit was that they got a cash payment from the mortgagee, and that their initial mortgage payments were lower than their current rent.

As we all know by now once the teaser rate ended the cost of home ownership led to foreclosure and eviction.

When I returned to Ontario I decided to investigate this rather odd state of affairs and discovered that the toxic NINJA mortgages had become valuable products that were being purchased by major financial institutions at a premium (commissions for all), packaged in a new type of blended mortgage backed security, and sold to unsuspecting institutional investors at a premium (more commissions for all). I know it sounds weird but that’s how the modern monetary world works.

Contrary to the opinion of most economic commentators many components of this crazy house of cards exists in Canada today. Unfortunately the inherent risk is being camouflaged by the belief that the teaser rates being offered in 2015 will never increase and that the market value of Canadian real estate will always increase. Get a feeling we’ve seen this movie!!

Many Canadians seem to have lost sight of the fact that our financial institutions, including Van City are being encouraged to provide products for packaging within mortgage backed securities. As I mentioned previously most mortgage related derivatives are actually guaranteed by naïve Canadian homeowners and sold at a premium without any risk to the financial institution as a means to generate additional funds to support the creation of additional mortgages.

As Garth continues to point out there is no guarantee that rates will remain low over the full term of the mortgage or that the market value of real estate will not decline to more affordable levels.

I see very little difference between offering mortgages to unemployed people in Philadelphia and offering mortgages at inflated market values to employed people in Canada. Financial institutions compete to recruit potential homeowners as a means of generating substantial profits with minimum risk. I am not saying this practice is wrong only that it seems to be based on a reality that may have a limited shelf life.

We seem to have put the foxes in charge of the supply of hen houses. We happily borrow funds from the foxes to buy a hen house and agree to give them most of our eggs. Why? Because the value of hen houses never declines don’t you know.

#68 S.Bby on 06.14.15 at 10:13 pm

These crazy lending practices are why I will not buy real estate in YVR at this point. I would be putting my hard earned resources up against someone else who has no skin in the game. It’s quite ironic when someone like me with money behind them feels they cannot participate in a market where apparently no one really has anything to risk.

#69 Show Me The Money on 06.14.15 at 10:13 pm

I read Victoria real
estate, keep up the good work, if you don’t like it don’t read it.

#70 Randy Randerson on 06.14.15 at 10:13 pm

Isn’t this really just like getting a cash advance through your credit card? Not exactly nosebleeding level rate, but high nonetheless. Only people desperate and stupid enough would do cash advance for long term uses. Short term, ie a few days would be fine.

Funny how Vanshitty is even giving people the options to repay the loan back with monthly installments. Most people are too stupid to understand how daily compound interest works.

#71 Leo Trollstoy on 06.14.15 at 10:14 pm

Forest Hill mansion price drop from $12,000,000 to $10,995,000 and now down to $9,600,000.

Irrelevant price drops since FMV is likely $7m and the place was probably last sold for $4m, 5 years ago.

Not sure why posters care about price drops in isolation. Useless info.

#72 old gringo on 06.14.15 at 10:16 pm

I witnessed first hand the destruction south of the 49th.
The “pay-check crack houses, the pawn shops, the repo nut-cases etc etc . Families decimated after years of hard work and a real estate market far better then Canada’s right now.
You really need to find that “greater fool” or run back to the Bank of Mom double ASAP.
Any interest rate increase now will be the last nail in this bubble market.

#73 Randy Randerson on 06.14.15 at 10:18 pm

#56 coastal on 06.14.15 at 8:58 pm

Funny you should mentioned that. I went up to the golf course back in 2010, just to check out what all the hypes were about. Stupidest drive up the mountain with tonnes of turns and curves. Houses back then were selling in the 600 to 800k range. I thought, who the F would want to buy a house way out in the Langford area. Then the bottom drops when it was exposed that the original developers were just flipping houses to each other to drive up the price.

Victoria, land of the newly weds and the nearly deads.

#74 Leo Trollstoy on 06.14.15 at 10:20 pm

As inflation continues to pick up steam, these pay day loans are gonna be killer.

Hopefully this insane indebtedness will slow or halt the increasing real estate prices in Toronto and Vancouver.

#75 Sheane Wallace on 06.14.15 at 10:25 pm

6 trillions in debt, 160 k for each person in Canada, growth of debt by 5 % per year and inflation is 2 %? while GDP growth is less then that?

While monetary base M0 is 75 billions?
M1 – 770 b, M2 – 1320 b, M3 – 1.95O b,

owing 3 times the monetary base?

Holly guacamole…

#76 Leo Trollstoy on 06.14.15 at 10:27 pm

Inflation on the rise. Expect more of the same. You’ve been warned!

http://www.bloomberg.com/news/articles/2015-06-12/wholesale-prices-in-u-s-increased-in-may-as-fuel-costs-climbed

Im going to be sitting pretty baby! U.S.A.! U.S.A.! U.S.A.!

#77 xnexus on 06.14.15 at 10:27 pm

Ah, Vancity. The friendly credit union that tried to scam its members into voluntarily raising their line of credit interest rates….

http://www.cbc.ca/news/canada/british-columbia/b-c-credit-union-urges-customers-to-pay-more-1.785842

The greatest trick the devil ever played was to convince the world he didn’t exist. The greatest trick Vancity every played is in convincing the media they are an “ethical” organization.

#78 DON on 06.14.15 at 10:27 pm

#38 BG on 06.14.15 at 7:31 pm

I’ve been offered a job in Richmond, BC.
85k/year.

Currently in Montreal I make about the same and live downtown.

I visited Vancouver before and liked it, but I stuck the downtown to Stanley park area.

Is Richmond a good area for a millennial with girlfriend

**********************************
NOPE – Richmond is a traffic quagmire – so is getting out of it. It is flat and at ocean level, no view, no kitsilano beaches. You’ll end up wanting to be downtown in the west side that is if you let yourself be wrapped up in the besting your friends scheme. Then again to each their own. Not my first pick – if you move trying White Rock – you go against the traffic to work (in Richmond). Nice beaches, relatively trendy, close to the border, close to ferries to the islands. Wide open spaces and farmland just around the corner. Be prepared for the rain, and layered clouds, I am not Kidding. I have seen it rain in Vancouver like I have seen it pour in Tofino on the west coast of Vancouver Island. Good thing about the rain, at least its not snow, but it is relentless in the fall winter and even spring. I used to play soccer all around Greater Vancouver.

But then again life is about different experiences and I live on the West Coast for many reasons, but I would like to see a White Christmas every once in a while. Just to set the mood.

Take care and good luck!

#79 Sheane Wallace on 06.14.15 at 10:28 pm

M3 was 38 b in 1970, now is 55 times more.. 1.9 trillions, wow

http://www.tradingeconomics.com/canada/money-supply-m3

#80 Sheane Wallace on 06.14.15 at 10:30 pm

M3 in Germany has increased 20 times between 1970 and now, in Canada – 55 times, we are richer! Wow!

#81 Carl on 06.14.15 at 10:36 pm

A problem as I see it, is that you/some/many…who knows, are saving for your deaths. I suppose that is admirable in some circles, but it’s odd to me.

#82 DON on 06.14.15 at 10:40 pm

#50 Bobby on 06.14.15 at 8:18 pm

This story is about predatory money lenders. There are lots of them here in Victoria, so many in fact, the mayor of Esquimalt wants to limit the number that can set up shop in her community. If business wasn’t good, they wouldn’t exist. But considering they are expending, I think is somewhat telling.
For the record, I like Victoria Real Estate updates. I know the market here in Victoria and much of what he/she posts is correct. I just saw another home I was watching sell for 10% less than what it was originally listed for. So much for a hot, seller’s market.
I recently had a realtor tell me that a solid market in Victoria would be of upwards of 1000 sales a month. Even with sales the last few months, the sales aren’t there yet.
Perhaps buyers and sellers should be asking realtors the tough questions.
*******************************

My wife made the same comment to me the other day while driving around the city. They are everywhere. I started to see it about 5 years ago – I new something was up.

As yes Victoria Real estate is definitely on the right path. He/she just needs to develop thicker skin and don’t worry about the fact-less naysayers. They are getting mad as reality is starting to set in.

Mixes drinks and partying like there is no tomorrow and not ones thinks about the mother of all Hang Overs.

#83 Cici on 06.14.15 at 10:43 pm

Concerning Victoria Real Estate Update’s Posts…

If you don’t like them, don’t read them. Scroll through and move on without boring me with your bully tactics. Besides, it’s much more laborious for the rest of us to scroll through all of your “negative” posts, than it is to scroll through VREU’s two or three or four posts anyways.

At least this person has good intentions, and is trying to protect various people from potentially getting fleeced in that market. But all the rest of you can do is bicker and complain? I guess that’s the kind of thing Garth is referring to when he mentions the word “pathetic” in line with this blog.

#84 Dave on 06.14.15 at 10:43 pm

Vancity is not to blame….there needs to be policies in place to prevent this from happening.

#85 whitehorn on 06.14.15 at 10:44 pm

#167, brett “We have been watching a segment of the market in Calgary. 22 homes in the segment. Most have been on the market for three months, one since early last Dec.

What do we find interesting? They are not selling, they are still on the market BUT prices have not been reduced. The oldest one on the market has been vacant for 4 months.

Are sellers not adjusting to the new reality or are buyers that few and far between?”//

I agree and with all the media coverage on real estate, it is hard to determine – What is going on? Anyways, I have a relative in Edmonton who needs to sell a house to settle an estate. Talking at a family gathering, the house has been on the market for close to 60 days and there has been one viewing, and have recently dropped their sale price. This tells me, the market is extremely “WEAK” in Alberta, despite what all the talking heads are saying consistently in the newspapers, business channels, and BNN. Plus, going forward with no expected revival in the oil market for at least a year, real estate will only get cheaper. The longer, this becomes stagnant unlike 08/09 downturn, real estate may have a long bottoming cycle similar to the late 80’s, where some say it took upwards of 15 years to get return on investment. Yes it can happen again this time.

#86 DON on 06.14.15 at 10:46 pm

Truth is, the housing market’s turned into a speculative casino, and everybody is playing, aided and abetted by a near-bank largely unencumbered by federal regulation (credit unions in BC are overseen by the provincial Financial Institutions Commission, not Ottawa), or much of a conscience.

But, like Chad says, Vancity must know what it’s doing.

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

This is part of the reason the party continues in Van.

#87 boonerator on 06.14.15 at 10:47 pm

If I had a dollar for every time some self-righteous person informed me that they can’t stand the banks, Credit Unions are the only ethical place to bank…..

Go Vancity, you are providing some great ammunition next time someone tells me that.

#88 Bob Dog on 06.14.15 at 10:47 pm

That’s it. Moving all my cash out of vancity tomorrow. I initially opened the account when the vermin at RBC got caught outsourcing IT jobs to India. I have a TD account still.

19% is nothing. The loan sharks at cash money charge 599% Apr. At least the gubmt forces them to post this rate.

#89 patient in richmond on 06.14.15 at 10:48 pm

forgot to mention lots of store signs are in mandrin only now

#90 Cici on 06.14.15 at 10:48 pm

#38 BG

Personally, I’d stay put…unless you love traffic jams, Lululemon activewear, BC weed and paying at least three times more on monthly rental or mortgage expenses.

You’d have to really love the area if you were willing to take the job at the same salary, because you’ll be spending a lot on the move, and may end up paying higher taxes on top of all of that if and you decide to buy a home.

#91 VanCity D-man on 06.14.15 at 10:50 pm

Hey Victoria Real Estate Update, keep the updates coming. The truth must be heard. Thx!

#92 yogidayoga on 06.14.15 at 10:56 pm

Garth,

Debtors’ prisons are just around the corner…I suggest that the new prison uniforms include yoga pants(non-transparent ones)….maybe the burrard bridge could be used as the pre-sentencing holding pen…traffic jams be damned!

#93 Retired Boomer - WI on 06.14.15 at 10:56 pm

VanCity’s interest rate is quite HIGH for a short term loan.

About what any ‘legal loan shark’ operation charges today.
A “Cash Advance” on my credit card would cost essentially the same per anum.

Who needs that Credit Union when I can ‘serviced’ by VISA or Mastercard or Discover?

#94 crowdedelevatorfartz on 06.14.15 at 11:00 pm

Hmmm
VanCity’s payday “loans” indicative of a new low in Canadian banking?

https://www.google.ca/url?sa=t&rct=j&q=&esrc=s&frm=1&source=web&cd=2&cad=rja&uact=8&ved=0CC4QFjABahUKEwi8wtec2pDGAhXNOYgKHdINADc&url=https%3A%2F%2Fwww.policyalternatives.ca%2Fpublications%2Fmonitor%2Flocal-financial-crisis&ei=cT9-VfzFL83zoATSm4C4Aw&usg=AFQjCNG6Rq1HiD9H7U6R93i6YImgJYu0Iw

#95 Spectacle on 06.14.15 at 11:05 pm

Re#9. Victoria real estate update…..

Thanks again for the data and analysis victoria Update!

Your factual posts provide an industrious insight into the direction real estate in other areas of Canada are currently or going to begin and continue to fall.

#96 Waveriders on the storm on 06.14.15 at 11:06 pm

Garth, how to rebalance before the coming collapse?

http://www.marketwatch.com/story/why-you-should-care-that-robert-prechter-is-warning-of-a-sharp-collapse-in-stocks-2015-06-08?siteid=yhoof2

Forget Elliot wave theory, what if it is a tsunami?

People stopped listening to Prechter about three “collapses” ago. — Garth

#97 Mark on 06.14.15 at 11:11 pm

“6 trillions in debt, 160 k for each person in Canada, growth of debt by 5 % per year and inflation is 2 %? while GDP growth is less then that?”

But velocity is crashing. Now, if velocity picks up, then there could be a problem.

“Inflation on the rise. Expect more of the same. You’ve been warned!”

Planet Earth is calling, they want you back.

#98 PM on 06.14.15 at 11:19 pm

predatory lending
19 % a year while paying your < 1 % interest on deposit.

So every credit card and savings account out there? Unsecured credit is pricey, this isn’t new. They are just giving you a cash advance on your credit card.

#99 unsold GTA condo inventory on 06.14.15 at 11:41 pm

Just saw the chart from yesterday. The 29% increase looks big, but the total unsold inventory is about 1200 units. It would be interesting to see this number in context.

Also any data if the larger supply has started to push down prices?

#100 Freedom First on 06.14.15 at 11:44 pm

Victoria Real Estate Update

Thanks again for your Posts. Most unfortunate that some a-holes do not realize that there is other cities in Canada other than Toronto and Vancouver. Holy Mother of God, how some of them communicate. They are the center of the Universe.

I lived for years in Toronto, and also visited Vancouver often. I am happy I don’t have to live in either place. They are worse than Calgary.

#101 Steve French on 06.14.15 at 11:48 pm

Smoking Man:

lol, i wouldn’t be sticking around that swimming pool when the diapers are lowered in…

#102 Kilby on 06.14.15 at 11:52 pm

Vancity is an embarrassment to all credit unions everywhere. Being members of two credit unions we would not go near Vancity, this has been building for years and the members need to take a serious look at who they have been electing. Sad seeing such corporate greed in what is supposed to be an alternative to the “big banks”. One of our cu’s still has annual profit sharing which is why we quit big banks 30 years ago.

#103 BS on 06.14.15 at 11:58 pm

But, like Chad says, Vancity must know what it’s doing.

Vancity knows what they are doing alright. They are lining the pockets of insiders with huge salaries and bonuses due to growing revenues.

Remember the CEO of Countrywide Mortgages Angelo Moziloin during the US bubble. He knew what he was doing too. He made $500 million in total compensation between 2001 and 2006 and sold off over $100 million in personal stock in 2007 while he was buying back stock with shareholders money just before the bubble popped. I bet he was surprised it popped. Just dumb luck he sold off all his shares. In the end Countrywide was toast and he paid a $67 million fine for insider trading. He still netted a half billion over 6 years after paying the fine.

http://content.time.com/time/specials/packages/article/0,28804,1877351_1877350_1877339,00.html

https://en.wikipedia.org/wiki/Angelo_Mozilo

#104 AACI Homedog on 06.15.15 at 12:01 am

Hmmm….if they were a regular bank we could invest in their stock or etf. Who will be profiting…the credit union members or the CEO’s ?

#105 waiting on the westcoast on 06.15.15 at 12:02 am

#38 BG on 06.14.15 at 7:31 pm

“I’ve been offered a job in Richmond, BC.
85k/year. Currently in Montreal I make about the same and live downtown. I visited Vancouver before and liked it, but I stuck the downtown to Stanley park area. Is Richmond a good area for a millennial with girlfriend”

Like others here from Vancouver (or formerly), I would not live in Richmond. Even Steveston, which is quaint, would get boring pretty quick. I would suggest either right downtown or maybe along the Skytrain corridor on Cambie. But no further south than 33rd Ave. The Cambie corridor is a little more residential but you can take Skytrain both into Van and Richmond. Cambie has loads of parks, breakfast/coffee/shopping but still close enough to the Olympic Village and downtown for fun.

#106 BS on 06.15.15 at 12:03 am

Unsecured credit is pricey, this isn’t new. They are just giving you a cash advance on your credit card.

Most people with a pulse can get an unsecured line of credit at a rate under 6%. This is for people who can’t get a LOC, credit card, etc. Really subprime. Like the people who take out Vancity mortgages.

#107 vancouver on 06.15.15 at 12:06 am

1. I’m not a realtor but the Victoria RE dude should poser once a week at the most. Market is not moving in a day.
2. The guy that want to move from Montréal… go check a doctor for concussion symptoms… why would you want to move from one of the most European city on North America which is close to new York and other major cities? West coast has no identity, except from RE obsession.
3. Vanity, coast capital, Westminster savings are the main credit unions around, I bet one of them will not be around in 5 years.
4. Racism and stuff, people are complain about mandarin only signs in Richmond, well that is just a stupid business decision as it targets only a percentage of clients.
5. Foreign investment and ham, yes it exists but common, who pays half a million for a house 90 minutes from dt? Cmhc maybe?
6. My bet is that yelled janet comes with at least more hints on rates this month which will tank the bonds… hence higher fixed mortgage… bye bye Canadian RE.
7. The politicians will do something stupid as well that will be seen as the black swan event for the RE… in my union the black swan was the oil price drop… check Alberta…

#108 New guy on 06.15.15 at 12:13 am

Plus the social disease called house lust. Add this to the usual list of geography, climate and foreign cash.

&&&&&&&&&&&&&

Glad to see you come around on the foreign cash thingie GT.

#109 waiting on the westcoast on 06.15.15 at 12:14 am

Victoria Update

Love your posts but agree with another poster here who suggested not to get defensive and pummel the blog with a myriad of posts. I have watched many properties over the past few years and definitely see a general downward trend in the larger acreages.

#110 millenial1982 on 06.15.15 at 12:30 am

Hit the young pool smokey. More to look at and besides some chicks really dig old dudes!

#111 Bobs ur uncle on 06.15.15 at 12:32 am

Weird – not one mention of Greece by anyone tonight. Apparently no last minute deal. Gonna be an interesting Monday.

#112 Lester on 06.15.15 at 12:33 am

Bob Mugabe will sort this one. Crash the CAD to over one trillion to the US. Savers and holders of financials get screwed. Property owners who are heavily mortgaged celebrate. Canada adopts the Greenback as it currency and becomes the newest state in Union. Bobs your Uncle. So buy urban property and lots of it. Just don’t buy a farm. Robbed Rhodesian.

#113 Cyclist on 06.15.15 at 1:06 am

Re: Victoria RE update

here is how its done

“The average sale price for the rest of the island peaked in 2008 and we are now only getting close to revisiting those valuations”

http://www.vireb.com/index.php?page=20

See? One post. One link. Simple and brief. Bloggers can research further if they wish.

Did I piss anybody off??

#114 Herf on 06.15.15 at 1:47 am

#38 BG

“Is Richmond a good area for a millennial with girlfriend?”

That depends. How do you like the idea of living in an area that seismologists predict will undergo liquefaction when the “Big One” hits the BC coast? (Should do wonders for Vancouver and vicinity real estate values).

#115 NoOneOfConsequence on 06.15.15 at 1:53 am

According to the financial gurus and analysts at Vancity – the average home price is destined to reach 3.5 million or more. That 624 square foot condo you are purchasing today for 390,000? Yep – pretty much guaranteed to be worth 2 million before you know it.

Mainstream media and Vancity are spouting this like its already a given fact.

http://www.theprovince.com/news/vancouver/great+density+debate+Just+fast+Metro+Vancouver+growing/11132383/story.html

House porn at it’s absolute dirtiest…..bleh…I feel slimy just reading that trash.

#116 The American on 06.15.15 at 1:58 am

And the worst capitalized banking system goes to? Canada! Yes, it’s true. This news is 9 months old. Want to know something really funny, though? It’s only gotten worse since then. Prudent? HELL NO! Time to wake up, people, and stop saying “We’re different…”

http://www.sovereignman.com/offshore-banking-2/presenting-the-most-pitifully-capitalized-central-bank-in-the-west-hint-its-not-the-fed-14950/

http://www.zerohedge.com/news/2014-09-03/presenting-worst-capitalized-central-bank-west-hint-not-fed

http://www.pinnacledigest.com/blog/dscaroknight/bank-canada-presenting-worst-capitalized-central-bank-west

#117 Nagraj on 06.15.15 at 2:00 am

Sheane Wallace
on M1,M2, etc.
I recall that quite some time ago Mish Shedlock spilled much ink debating how M1, etc., is calculated. (I don’t have a point of view, the topic is somewhat over my head.) BUT inflation and deflation are defined by the relationship of money supply to GDP. Unhappily, what GDP measures and how it’s measured is also open to serious debate. Be all that as it may, MSM – and this blog – keep using the term inflation as if it simply meant price increases. For MSM the confusion deftly avoids charging plain old corporate greed.

ROBERT PRECHTER
was mentioned in the posts. Speaking of Shedlock, I recall him writing that neither Prechter nor any other sane analyst could’ve foreseen the degree of Fed interference in the mkts. That latter point must needs reference:

DAVID STOCKMAN
who’s torn Fed data dependence to shreds. Especially BLS labour data. [It comes as no surprise to me that notwithstanding GT so many blogdogs, moi y inclus, have dismissed the StatsCan May jobs numbers.] SOMETHING IS FISHIE

“Gentlemen, please question your premises.”

[It might be worth mentioning that E-Wave Theory correctly predicted the sickening rise in German GDP under Hitler.]

Closer to home: under Harper, ALL officialdom has, particularly so, lost its ability to speak authoritatively. Enter gut instinct. (Mine says I aint never wrong.)

#118 observer on 06.15.15 at 2:46 am

It make me laugh when the analyst comes out and says Canada has good banking regulations.

Yeah they do, they have the governments ball in their hands and keep on squeezing the gutless government ofr more regulations to protect them and place the risk on the tax payers.

Its time for a change!

#119 observer on 06.15.15 at 3:55 am

Greece in at its 11th hours and no agreement

If all hell breaks loose they should think about jailing their bankers just like iceland. Get rid of those who cause the epic fail. Canada should look at these rule if an Epic Fail does occur. The people pulling the strings are the one whom has cause the problem .

http://theantimedia.org/iceland-recovering-fastest-in-europe-after-jailing-bankers/

#120 Kalergie on 06.15.15 at 4:05 am

Garth,
Have you seen this?
http://www.cbc.ca/news/business/the-national-lust-for-home-equity-lines-of-credit-should-we-worry-1.3106533

#121 Vanecdotal on 06.15.15 at 4:13 am

#38 BG

As other posters have pointed out, don’t live in Richmond if you don’t have to, unless you enjoy sitting in chocking traffic gridlock every day. Suburban concrete wasteland comes to mind. It’s also 4′ below sea level on an alluvial flood plain that would likely liquefy in an earthquake. That said, there are a few decent pockets, Steveston being one, and pretty agrarian areas on the outer fringes, but rents (and owning) are (inexplicably?) a fair premium for that area, (for Richmond).

Definitely consider living in Van to be near the real action, Van Westside, particularly Kits is a great area, walking distance or short bus/cab ride to best beaches, pubs, and downtown, but rents (and owning) are $$$$. 5 min. further South is Kerrisdale, and while a bit sleepier, still close enough to the fun, and you will get more space for less $$$ as a rental. (Owning is still premium $$$$ here too though). As someone else suggested Cambie corridor is a good option too, (just not too far south, agree stay north of 33rd), plus you could commute to work by Skytrain. Even if you drive to work, you’ll be mostly against rush hour traffic so win-win.

If you work flexible hours, as someone else pointed out White Rock is a good option 15 min. South of Richmond down the 99 freeway, beautiful little hamlet, lively enough in summer, but pretty dull in winter. More of an older crowd, it’s a sort of “Kits” for the Freedom 55ers. Your rental $ will go waaay farther here however, and owning while still expensive, is “reasonable” by Vancouver standards. Forget it though if you have to commute to/from Richmond during rush hours, the George Massey Tunnel is a freakin’ traffic nightmare both ways, if you miss your conterflow lane, add another 45 min-hour to your commute. Good luck to you whatever you decide.

#122 Vanecdotal on 06.15.15 at 4:15 am

“Chocking” should be “Choking”. Der.

#123 davikk on 06.15.15 at 4:35 am

Toronto’s Epic Condo Bubble Suddenly Turns into Condo Glut, Unsold New Condos Spike To All-time Record. Industry In Denial.

http://investmentwatchblog.com/torontos-epic-condo-bubble-suddenly-turns-into-condo-glut-unsold-new-condos-spike-to-all-time-record-industry-in-denial/

#124 rampant inflation on 06.15.15 at 6:00 am

#96 Waveriders on the storm on 06.14.15 at 11:06 pm
______________________________________

Prechter … poor Prechter. you know he doesn’t trade markets any more. not since he kept losing money on his own analysis. now he’s just in T-bills and writing newsletters.

he’s really a horrible analyst. missed the whole bull market in the 1990’s. missed the whole commodity market in the 2000’s. he’s just a guy writing to a group of people that believe the world is coming to an end. there’s always a market for that crap.

and apparently, he doesn’t even credit AJ Frost any more. stop reading his newsletters, or anything he’s got to say. it’s a waste of everyone’s time.

#125 rosie "moving forward" in the knowledge that, "this won't end well" on 06.15.15 at 7:49 am

Vancouver got a mention in an article from Marketwatch!

http://www.marketwatch.com/story/foreign-investors-pose-threat-to-residential-real-estate-2015-06-15?dist=beforebell

#126 Ray Vasquez on 06.15.15 at 8:24 am

Most of these people are irresponsible and think they are entitled to buy anything they want.

Borrowing money to pay borrowed money is moronic and they know they can’t pay it back but they do it anyway.

By the way, 60″ big screen T.V.’s, 3 cars, 3 lazy boy chairs, granite or marble, countertops, $20,000 appliances, a $40,000 glass stairs are not a necessities.

Nobody puts a gun to their heads forcing them to buy this crap on credit or with high interest rates. They are entitled, financial morons.

Under a government with socialistic policies, they will get it all paid off for free, financial welfare is in fact what it is, us taxpayers, depositors, investors pay for it.

Now, I can see why people are trying to fool others and make the NDP as the utopian, economic saviours but they are really confiscators, appropriators of people’s work, savings, wealth, money, property!

#127 Turtle on 06.15.15 at 8:35 am

#113 Cyclist on 06.15.15 at 1:06 am
Re: Victoria RE update

here is how its done

===========

Thank you.
Lets hope Victoria will see it.

#128 Kalergie on 06.15.15 at 9:02 am

@#125: that article says “You can bet your last dollar that a good chunk of that Chinese money (of dubious origin) was earmarked for residential real-estate purchases, that is, the roofs over American heads.”

Sounds like a personal vendetta to me…

#129 Karma on 06.15.15 at 9:41 am

Another fine example of how the Chinese government uses the savings of the population to prop up the economy. Previously, it was regulating the interest rates that can be paid to depositors, which led to artificially low interest rates to SOE companies and banks. Now it’s influencing regular people to invest in the stock market so banks and SOEs can artificially recapitalize themselves with the savings of regular people, while these people take on risks they have no idea about. Terrible… Caveat emptor though…

http://www.bloombergview.com/articles/2015-06-14/stand-back-china-s-bubble-will-burst

#130 Cyclist on 06.15.15 at 9:56 am

“I’ve written about these condos in the past. They
continue to sit on the market lonely and unloved…….
These condos will probably sell for significantly less than their assessed values. This suggests a falling market (year-over-year).”

Vic REU – it suggests these condos are dogs with an assessment that is out to lunch. A vendor may accept the assessed value to make them appear to be a great deal.

Scroll baby scroll…..

#131 bdy sktrn on 06.15.15 at 10:11 am

Did anyone else have an awesome weekend? Huge street festival, perfect weather, ocean swimming, abundant wildlife, a productive day at the cabin, fresh free crab for dinner, no/light traffic, a perfect setting.

Got to love BC in the summer (although this winter was summer too)

Dow at -1% at open

Dow to close at -2% on the day.

Could be a rough week. Been waiting all year for a sale on stocks. maybe this is it?

Should hear back today on lowball offer for WA state acreage – Assessments in the area are OVER 2x sell/ask prices.

This is far far ‘worse’ than victoria situation.

VREU , you better get on this and write endless repetitive postings with unreadable ******* charts!

More and more ppl i know are ditching the ferry if at all possible – $250/trip has some friends considering the sale of gulf isl places. 170 to park and WALK on in tsawassen .

Expect vic to continue to decay as van doubles again. The offshore investors can’t tolerate victoria.

—————-
ot – for all dogs, more important than RE or $$ is health.
my friend has diabetes which apparently causes bad circulation, he scraped his foot on a fall, totally minor scrape, but it would not heal and today is an amputation maybe at the knee. poor bastard.

#132 Marie on 06.15.15 at 10:15 am

#65 hey OffshoreObserver, thanks for the link!

#133 Bottoms_Up on 06.15.15 at 10:49 am

#125 rosie “moving forward” in the knowledge that, “this won’t end well” on 06.15.15 at 7:49 am
——————————————————————-
Thanks for posting that link. It’s astonishing to think trillions of dollars have been ‘smuggled’ out of China and have ended up in real estate in various locales.

#134 Mike T. on 06.15.15 at 10:52 am

I don’t like the Tim Horton’s in my neighbourhood, so I stopped going.

It wasn’t going to change, but amazingly, I could!

How are people going to wake up to their full potential when they don’t even realize these basic basic powers.

#135 Dee on 06.15.15 at 10:55 am

Moved most of my money out of VanCity a long time ago. Still had some old GICs kicking around from before I got into investing–earning a high enough yield it was worth it to keep them. They just finally matured and VC wanted to roll them over to 1.25% GICs.

So, last week, I got rid of them for good. Bye, VanCity.

https://pbs.twimg.com/media/CHOk_AJUYAAuEI-.jpg:large

And then this post happens today…I’m good with my decision.

#136 Don Derc on 06.15.15 at 11:05 am

#66 smoking man – …and the first thing I did after reading was look at real estate in Laughlin and Bullhead. Still horny after all these years….

#137 Doug in London on 06.15.15 at 11:21 am

You can bash Vancity and their predatory loaning all you want, but the reality is that most people using their services got into that mess in the first place because of bad choices they made.

@Freedom First, post #15:
You’re quite right, you are your best consumer protection agency.

#138 NEVER GIVE UP on 06.15.15 at 11:24 am

What if?

The G7 got together and said we are going to keep emergency interest rates for 20 more years.

What would the downside be?

After all isn’t it all just a currency war right now to pump exports in a weak economic world?

Whoever raises rates first has to swallow a loss of export jobs.

Why bother? Just continue pumping paper into the market to control interest rates.

#139 still learning on 06.15.15 at 11:25 am

I must say I’m disappointed in VanCity. I went in for a personal loan and ended up getting the spiel for a mortgage. My hubby makes decent coin and we have very little debt (other than a car payment which is almost paid off) so we must be prime targets.

I heard every single argument that Garth has mentioned on his blog – how real estate always goes up and how you can’t lose etc. How we should think about a condo and then move up. On and on it went.

I didn’t really want to get into it with the loans officer (because I wanted my personal loan) but I did want to ask her how VC has the gall to basically indebt people the way they are with this ‘mortgage helper’ down payment thing.

It is indoctrination of the highest order.

I felt lucky to have come across this blog a while ago. Someday it might work for us to have a property, but neither one of us want a condo and we like the city so we’re dealing with renting for now.

#140 Karma on 06.15.15 at 11:26 am

Good reminder of our faults…

http://www.businessinsider.com/stupid-things-smart-people-do-2015-6

#10 extremely pertinent to Mark

#141 bdy sktrn on 06.15.15 at 11:31 am

more ‘sales mix’ madness!
———————
B.C. home sales reached an eight-year high for the month of May this year, when $6.4 billion changed hands during real estate deals.

The latest numbers from the B.C. Real Estate Association (BCREA) show that 10,174 residential units were sold last month, up 16.6 per cent from May 2014. Of those, 4,145 were sold in greater Vancouver, where a whopping $3.75 billion in sales was recorded.

The average price for a residential property in B.C. was $632,182 in May, up 11.8 per cent over 2014. In greater Vancouver, the average price was up 11.2 per cent to $905,701.

http://www.vancouversun.com/business/affordability/home+sales+eight+year+high/11137379/story.html

#142 Bottoms_Up on 06.15.15 at 11:45 am

#128 Kalergie on 06.15.15 at 9:02 am
———————————————
Tough to argue that a report on illegal money flows is a ‘personal vendetta’:

http://iff.gfintegrity.org/documents/dec2012Update/Illicit_Financial_Flows_from_Developing_Countries_2001-2010-HighRes.pdf

#143 45north on 06.15.15 at 11:48 am

Max Green: Victoria Real Estate needs links to actual charts.

that’s what I think. I’ve been looking for a couple of years and I don’t understand them yet.

that said, he still makes a valid contribution

#144 Bottoms_Up on 06.15.15 at 11:58 am

#116 The American on 06.15.15 at 1:58 am
——————————————————
Ok, you cherry-pick one stat.

The actual relevant stat you need to know? Canadian banks are heavily regulated, with checks and balances to ensure they are healthy:

http://www.osfi-bsif.gc.ca/Eng/fi-if/rg-ro/ar-lr/Pages/ip_faq.aspx

#145 Mark on 06.15.15 at 12:27 pm

“The G7 got together and said we are going to keep emergency interest rates for 20 more years.
What would the downside be?

In the short term, you’d have inflation of all asset classes that are bought on credit. In the medium term, you’d have overstimulation of those asset classes, to which an extreme supply side response would take place. Over the longer term, assets which are negatively correlated with interest rates would go into severe under-supply, and you’d see strong inflation, if not hyperinflation specifically in those asset classes.

In Canada, we reached the point roughly 2 years ago where the RE sector was so overstimulated that prices reached an apex as a severe supply-side response was induced. Its been stagnant to downwards ever since.

#146 Mister Obvious on 06.15.15 at 12:29 pm

There are days when I do feel some sympathy for the Greeks.

They have a long history of kowtowing to military and financial overlords. After being subsumed into the Ottoman Empire they were taxed heavily for hundreds of years. They were made to give up sons to be raised Muslim and sent to fight for the Sultan’s armies.

Then, of course, there was the Nazi occupation during World War II which I’m sure is too horrible to recount but still lives on in the national psyche.

“Sticking it to the man” is a historically ingrained survival tactic that has now become an essential component of the Greek character. Chiseling money and privilege from the system is seen as one’s nationalistic duty and certainly no source of shame.

Now the Greeks have the Eurozone bankers to contend with. It’s not going well.

The real battle is to re-mold the hearts and minds of a small Mediterranean outpost that was once the center of world learning but has since grown weary of foreign boots stomping in and taking over administration.

#147 kothar on 06.15.15 at 12:42 pm

These low rates have caused gorging on debt. Now when does it have to be repaid? I want to see all these people up to their eyeballs in debt to start paying it back, and if rates go up then the lesson they will have delivered. Live for today, but spend the rest of tomorrow and years and years latter in servitude to the debt! Only thing we need is for rates to go up to start it.

#148 Oceanside on 06.15.15 at 12:46 pm

“The average sale price for the rest of the island peaked in 2008 and we are now only getting close to revisiting those valuations”

http://www.vireb.com/index.php?page=20

See? One post. One link. Simple and brief. Bloggers can research further if they wish.

Did I piss anybody off??
____________________________________________
Pretty easy to understand, far less confusing than the one poster that is always complicating things with the Victoria “charts”
——————————————————————
Interesting, I am close to several realtors in both Victoria and mid Island, the market has gone from abysmal to very hot in the last 4 months. Bidding wars in sleepy Parksville and Qualicum. Prices here are back to the highs of 2008. Lots of people looking at the very slim inventory of $400,000 (popular price point) are from Victoria, Lower Mainland and Alberta. The unmentionable “foreign” buyers have discovered Victoria as an alternative to Vancouver and are driving prices up…

As an aside, in the last 3 years there has been a noticeable change in the types of cars one sees around the Parksville area, lots of new Mercedes, BMW and Jaguar, new big dealerships in Nanaimo are doing well with the changing demographic around here.

#149 Jojo on 06.15.15 at 12:51 pm

Surprised that the Vancouver Sun (mostly developer advertorial content) published this article. It’s the last of a three-part series on change in the rapidly growing suburb of Richmond, and identifies how the “Thompson neighbourhood has “the most expensive homes and the second highest level of household poverty” in Richmond because many residents under-report their global incomes to Canadian tax officials.”
It’s an anecdote from a local, however it is then backed up with data from Stats Can,
“The upscale neighbourhood of Thompson, where properties typically sell in the $1-million to $3-million range, ranks high for poverty, according to Statistics Canada figures.”
Sadly rather than digging in, the Vancouver Sun article degrades to focus on the omnipresent yellow peril red herring rather than examining the dichotomy any deeper.
Anyone seen an examination of this issue that sticks to the facts? Thompson can’t be the only place in BC, or in Canada where the incomes or so dramatically out of sync with property values.

http://www.vancouversun.com/business/Part+Ritzy+Richmond+neighbourhood+where+many+poor/11136169/story.html

#150 Squirrel meat on 06.15.15 at 12:55 pm

#66 Smoking Man on 06.14.15 at 10:07 pm

In Africa it is said, there’s a place elephants go to die. I don’t know that place or care to visit it.. Its their thing.

Today I discovered where humans go to die.. Its a place on the Colorado River, a hot place. Know to locals as Laughlin, Navada on one side, Bull Head Arizona on the other side of the river.

Its a place where multiple sightings of 90 year old men with hairy backs, bald heads and no hair where the socks are worn.

Its a place where if they still have a spouse, she’s 300 lbs, less she’s a smoker and weighs in at 80 with a oxygen tank in her back pack.

Panic sets in for some when they lower one of these old beasts into to pool. Clearly they know he’s wearing a diaper. Everyone scatters in a panic out of the pool. Except for me…I’m into my 10th bud light and I haven’t left the pool since I started drinking..
————————————–

Nirvana has been found. Cheap beer in a hot shitty (literally) pool.

But best to stay in the pool and away from the cliffs.

http://www.reviewjournal.com/news/nevada/man-dead-after-attempting-dive-laughlin-cliff

#151 raisemyrent on 06.15.15 at 1:02 pm

Smoking Man’s post was pure gold. I had to refrain from laughing out loud in the office (no I don’t work for the government; I’m on hold on the phone so I browse).

I appreciate Victoria Real Estate Update’s posts. I glance at them to get the main point normally, even if I used to scroll right through them (same goes for Smoking Man before I got his humour), but they come in handy for some people under certain situations. If you have conflicting data, bring it up, but if you live elsewhere or don’t care, don’t read them, but don’t have a go.
I don’t have a go at Garth or anyone when they post/talk about Toronto suburbs I’ve never heard about or don’t care for.
I scroll right through Mark’s posts, for instance.
1/3 to 1/2 of the posts on here are people having a go at other people (including this post now).
I’m lucky to go through a few comments per article because of all the fluff (including replies to comments on yesterday’s articles… you know who you are).

There’s a minor diesel spill in false creek this morning. Funny, we went to the beach yesterday and I saw all the boat madness and figured some people just do whatever they want (dump their toilets etc) and it kind of ruins it for everyone.

In other news, real estate went up everywhere! – CREA

#152 turn of the tide on 06.15.15 at 1:04 pm

#38 BG

I would *not move to Richmond or even vancouver with 85K salary (I lived just 4 blocks from Granville Island for about 5 years). It’s a soulless place. Beautiful but really cold, uninteresting and uninterested people – for the most part. Unless you already have lots of friends over there, you will have the hardest time of your live connecting with people in a meaningful way.

If you want better weather, and real people, look for opportunities in the interior of BC.

Or stay put, Montreal’s culture and people are so much more open and warm.

That’s my 2 cents. Best of luck.

#153 Md on 06.15.15 at 1:16 pm

Garth, I really think there should be filter option on the comment section of this blog.
That way I can set it to comments that are short and to the point…not these long stupid essays people write. Get someone to work on that please…that way I don’t have to read about what the sales stats in Vancouver were for the past 15 years.

#154 bdy sktrn on 06.15.15 at 1:31 pm

http://www.vancouversun.com/business/Part+Ritzy+Richmond+neighbourhood+where+many+poor/11136169/story.html

wowzer!

Van sun goes way out on a limb to point out the ‘official’ poverty among the mainly ****ese ‘hoods.

Nope, van is not different, not al all.

#155 bdy sktrn on 06.15.15 at 1:34 pm

#153 Md on 06.15.15 at 1:16 pm
Garth, I really think there should be filter option on the comment section of this blog.
—————————————-
scroll faster my son! i enjoy scrolling VREU’s , knowing all the work she puts into her ‘pieces’.

#156 Richmond George on 06.15.15 at 1:41 pm

DELETED (Anti-Chinese)

#157 Nora Lenderby on 06.15.15 at 1:42 pm

#110 millenial1982 on 06.15.15 at 12:30 am
Hit the young pool smokey. More to look at and besides some chicks really dig old dudes!

That you, DSK?

#158 The American on 06.15.15 at 1:42 pm

Bottom_UP: I disagree here. There was no cherry picking of data whatsoever. The truth is the truth. Canadian banks have zero requirements for reserves

American banks are required to have at least 10% reserve funds, much in part to thwart bank runs. Additionally, the FDIC, similar to the CDIC, insures all deposits up to $250,000 per tax ID. Whereas the CDIC only insures up to $100,000. The CDIC only has 0.43% on hand to insure all eligible deposits in Canada. That’s pathetic at the very best. Additionally, Canada has legislated confiscation of deposits in the event that Canadian banks deplete their capital. This is pure insanity.

As a depositor, I would feel extremely unsafe. Canadian banks were already quietly bailed out at the expense of both Canadian and American tax payers only a few years ago, and at per-capita levels that far exceeded the bailouts the American banks received. 64% higher to be exact. Not prudent at all, and is now easily searchable online. The banks in Canada referred to it as “liquidity injections” as opposed to bailouts, but two or three of the received these “injections” worth more than the entire bank’s value at the time. Speak of all the so-called regulations you’d like, but the fact is the banks have been behaving incredibly worse than most.

Couple this with the fact that Canadian banks are truly promoting the equivalent of sub-prime lending standards at historic low interest rates that reset about every five years, and you have a problem of extreme proportions. Safe? Hardly.

Now, add all of this up, throw in newer Basel III regulations, and you’re really screwed. No doubt Canadian banks are not well capitalized. All other banking systems know this, so why doesn’t Canada, and why aren’t Canadians being made wholly aware? Oh yes, because the CBC is tax-payer backed, and made to “unify” the nation, as opposed to raising red flags that would adversely impact the people as whole. It’s totally and completely twisted.

So I ask, what information would you go by, if you’re calling reserve requirements and eligible insured deposits “cherry picking?”
http://www.advfn.com/nyse/StockNews.asp?stocknews=RF&article=46237584

#159 Ray Vasquez on 06.15.15 at 1:43 pm

To Never Give Up #138

Look at Japan. They have done this for years and this is a real possible outcome of what could happen to the world.

An economic malaise, deflation in stocks, equity markets, crashing interest rates, crashing real estate markets, a very large older population with pension costs soaring and working longer and longer just to survive and a deep devaluation of the Japanese Yen with a large debt load.

#160 Nora Lenderby on 06.15.15 at 1:47 pm

#83 Cici on 06.14.15 at 10:43 pm
Concerning Victoria Real Estate Update’s Posts…
…But all the rest of you can do is bicker and complain? I guess that’s the kind of thing Garth is referring to when he mentions the word “pathetic” in line with this blog.

I agree about Her Late Majesty’s exquisitely crafted updates. Read them or scroll, just don’t whine you woofers.

I was always under the impression that the “pathetic” epithet was applied to the blog by our generous host’s despotic previous boss, the snarly and soon to be ex-PM.

#161 Mister Obvious on 06.15.15 at 1:59 pm

#153 Md

A short post is not guaranteed to be intelligent nor is a longer post necessarily a pointless ramble.

To determine the value of a post you have to actually read it. However, with experience, you learn what (and whom) not to bother with as you gain proficiency with the scroll wheel.

Garth has already given you a ‘filter’. It is this: Read these comments at your own peril. Better yet, don’t bother reading them at all. That’s a clear message from our host born out of his years of experience with inane, anonymous commentary.

That he continues to moderate for the usual taboos is a miracle in itself. You should not expect him to provide additional tools for your convenience.

#162 Karma on 06.15.15 at 2:04 pm

Aussie pain…

http://www.bloomberg.com/news/articles/2015-06-14/dental-job-at-half-pay-why-australia-wage-pain-is-just-starting

#163 Michael King on 06.15.15 at 2:04 pm

Enough has been said about how disappointing and sleazy is Vancity’s corporate behaviour. I agree. Spotted on Saturday: a 374 sq. ft. studio listed at $309,000 at 5th and Yew in Kitsilano. Today, I can’t find the listing so I guess it sold. How long is this going to continue? Vancouver is dying.

#164 Ray Vasquez on 06.15.15 at 2:08 pm

To #135 Dee

1.25% GIC’s at VanCity. I remember, in 1994, my grandfather had 5 year 9.25% GIC’s.

Looking at their website, their 3 year step up GIC is 1.70% held over 3 years and 5 year GIC’s are 1.70%. Ridiculous for GIC rates.

I know GIC rates are low but there is other financial institutions that pay 2.5% to 2.7% GIC rates which is still low but way better than 1.70% or 1.75%.

#165 Mark on 06.15.15 at 2:14 pm

“Additionally, Canada has legislated confiscation of deposits in the event that Canadian banks deplete their capital. This is pure insanity. “

No it is not ‘insanity’. It is punishing people who lend their money to banks who are over-leveraged. If there’s no incentive for people to lend their money to the highest quality institutions and borrowers, rather than the poorest quality, then what reason is there for anyone to be disciplined in their capital allocation? Why pick a good bank over a bad bank, if somehow government is going to make everyone whole if there’s failure? This is why debt-to-equity resolution of banks is so important in terms of cleaning up the banking system — sometimes called a “bail in”, rather than putting things on the taxpayers.

The big ‘mistake’ here is thinking that one is ‘depositing’ their money in a bank, rather than making a loan to the bank. The elderly can perhaps be forgiven because on account of their senility, but everyone else should clearly understand that banks act as principals, not as trustees when it comes to their “deposit-taking” activities.

Many years from now, historians will look back at the contemporary financial system and wonder why savers ever lent out their ‘savings’ to the current crop of hooligans running the asylum.

#166 Mark on 06.15.15 at 2:16 pm

“I scroll right through Mark’s posts, for instance.”

That’s unfortunate. You’re missing out on a bunch of valuable knowledge on the contemporary Canadian RE market and the macroeconomic implications of its collapse. But at least to your credit, you’re not going around making a total fool out of yourself like some of the posters over the years who have set out to do little other than troll me.

#167 Rainclouds on 06.15.15 at 2:57 pm

#153 Md

My concern? G-man finally gets tired of self centered imbeciles and shuts down the pathetic blog.

Is this brief enough?

#168 Victoria Real Estate Update on 06.15.15 at 3:06 pm

# 155 bdy sktrn

“scroll faster my son! i enjoy scrolling VREU’s, knowing all the work she puts into her “pieces”.

You used to post comments saying how great Vancouver real estate is. I’ve noticed you’ve stopped doing that as much, in fact, hardly at all lately.

It may have something to do with the chart I’ve posted that shows Vancouver’s 12% price slide in 08-09 that was stopped by emergency interest rates.

You obviously read that and were able to understand the chart.

You’ve been unable to refute the following points about Vancouver real estate:

* that Vancouver real estate has a history of major price declines
* that Vancouver real estate isn’t immune to a much bigger price slide in the near future that can’t be stopped by slashing rates from near-normal to emergency levels
* that Vancouver’s 08-09 price decline wasn’t prevented by wealthy buyers from China and what that says about future price slides

Instead of attempting to prove me wrong with facts (there aren’t any that would prove me wrong), you’ve shot several negative comments at me.

Along with several others (who keep posting under different names), you’ve tried over and over again to convince others to scroll past my comments.

Those who would like to see me stop will be disappointed.

Perhaps Garth could filter the type of comments that say nothing (like most of bdy sktrn’s).

#169 Seth Perry on 06.15.15 at 3:07 pm

@Hot Albertan Money

RE: Does anybody even read Victoria Real Estate Update’s posts?

Yes, I do and so do several others.

Keep up the good work Victoria Real Estate Update.

For the haters, if you don’t want to read it, just scroll past.

#170 lee on 06.15.15 at 3:15 pm

I’m going to coin a new phrase: “the mortgage default realization date”. It’s the date a home owner realizes he’s screwed.

However, I still say with probably 20 per cent of the full-time work force in Toronto having high paying, secure, pensioned government employment, Toronto prices will hold, except at the really upper end like 2 million plus.

#171 Pansy Quon on 06.15.15 at 3:27 pm

Garth, you’ve deleted posted articles by the Vancouver Sun and statements by the Mayor of Richmond. Are these two ‘scumbags’ now on our Greater Fool ‘Hate the Racist’s who deny Garth Turner is God’ list? I can’t wait to find out who else you’re prepared to smear in your zeal to rise to liberal mediocrity.

Both of the above were posted. In the case of the unfortunate Sun article, it has been referenced several times here today. That is sufficient. — Garth

#172 S.Bby on 06.15.15 at 3:38 pm

Sitting here eating my lunch at my desk; one of the little office clerks in the office lunchroom pontificating why everybody should buy real estate; “you always get your money back, renting you pay rent for your whole life and get nothing in the end…” Always a lot of lunchroom chit-chat about how great real estate is over the lunch hour. Is it something in the water in Vancouver?

#173 Leo Trollstoy on 06.15.15 at 4:07 pm

“I scroll right through Mark’s posts, for instance.”

A very financially sound and prudent decision.

There’s immense value in that. Kudos.

#174 Leo Trollstoy on 06.15.15 at 4:12 pm

Now that the U.S. Employment report shows tons of job creation, more people earning higher wages, and less people earning lower wages, I wonder when the Fed will hike. I think most economists believe in Sept. But honestly, it doesn’t matter if it’s exactly Sept. It’s coming sooner than later.

And now that the U.S. has left the threat of deflation behind in its latest wholesale report, I think investors who listened to Garth’s advice of having exposure to the U.S. economy are going to be well rewarded.

Sorry CAD, I hardly knew ye. Down you go. Alongside the Canadian economy.

#175 Calgary Rip Off on 06.15.15 at 4:26 pm

Read your post about Calgary yesterday. Housing would need to drop 200% for there to be any real problem. Why? House A cost 2005: $180K. House A cost 2008: $400K. Did they do major renovations? No. I hear about it all the time as people boast about how much their house is worth.

No, your house isnt worth that much. That is what the market value currently for your house because of the city’s economic conditions. “Real estate” is phony values. Therefore, do not buy properties just to make money, they are a place to live first, if you are lucky and actually end up paying off the mortgage, only then can you claim “ownership”. You are a slave to the bank until then.

I dont even pay attention to the mass media these days. Calgary Herald, CTV, its all designed for the old and fatigued to get their blood pressure up and give a momentary boost to their boring lives.

Next time there is some nonsense about the sky falling in Calgary, please ignore, because nothing happens quickly here, ever.

#176 Luc on 06.15.15 at 4:41 pm

How many millionaires in the world? Where do they live? How many in Canada?
BCG study: number of millionaire households in the world… https://www.bcgperspectives.com/content/articles/financial_institutions_business_unit_strategy_global_wealth_2014_riding_wave_growth/?chapter=2

#177 Mark on 06.15.15 at 4:44 pm

“And now that the U.S. has left the threat of deflation “

Explain why the USA has YoY deflation then. Deflation in the US isn’t a threat, its real. And with the US RE bubble now rolling over (again), it too will start to accelerate. Although not nearly at the sort of trajectory in store for Canada from much further elevated levels.

Do you ever get tired of repeating your jibberish?

The core Consumer Price Index increased year/year by 1.8%, just below the Fed target of 2%. Wrong again, Mark. — Garth

#178 4 AM Sunrise on 06.15.15 at 4:50 pm

#38 BG on 06.14.15 at 7:31 pm

Is your job in east Richmond? I’m asking because the tech parks are there so the typical salary would be about $85,000 a year. And if it is, your commute from Vancouver or anywhere is easier because you avoid the gridlock and riffraff along the main drag (No. 3 Road).

A few people here suggest that you live in Kitsilano. That area feels like le Plateau Mont-Royal if you’re into that.

#179 HD on 06.15.15 at 5:06 pm

#178 4 AM Sunrise on 06.15.15 at 4:50 pm

#38 BG on 06.14.15 at 7:31 pm
Is your job in east Richmond? I’m asking because the tech parks are there so the typical salary would be about $85,000 a year. And if it is, your commute from Vancouver or anywhere is easier because you avoid the gridlock and riffraff along the main drag (No. 3 Road).

A few people here suggest that you live in Kitsilano. That area feels like le Plateau Mont-Royal if you’re into that.
—————————
I moved from Montreal to Richmond 7 years ago. Worked and lived in Richmond for 1 year. Eventually moved to Vancouver (Kitsilano) while working in Richmond. That definitely improved my experience.

Yep, find a place in Vancouver and commute to Richmond is my advice as well. I agree with the poster above, Kitsilano would be the equivalent of Le Plateau.

I now work downtown and live 1.5 miles away from work right across the Granville Bridge. Best thing ever.

Bonne chance,

HD

#180 waiting on the westcoast on 06.15.15 at 5:09 pm

Mark – read this article… Lots of stats on the growth of the US economy since the great recession….

http://www.financialpost.com/m/wp/news/blog.html?b=business.financialpost.com/investing/investors-can-pay-now-for-fed-rate-hike-or-pay-more-later&pubdate=2015-06-15

While anecdotal, my businesses are all up revenue wise and feeling significant pressure on wage hikes (I have raised both managerial and front-line pay in 2/3 of my businesses this year).

#181 The American on 06.15.15 at 5:16 pm

At #177: Mark the Mornon, as an American and living in the U.S., I can assure you inflation is very, very real right now.

Additionally, fundamentals to support U.S. prices, both average and median, are well in line with reported household incomes, unlike in Canada. Sorry, Marsha, no real estate bubble here.

#182 Mark on 06.15.15 at 5:33 pm

“The core Consumer Price Index increased year/year by 1.8%, just below the Fed target of 2%. Wrong again, Mark. — Garth”

Actually -0.2%/year was CPI YoY. Clearly deflation. And without even the benefit of a full year of the much stronger USD$ or lower oil prices in the averages yet.

http://www.bls.gov/cpi/cpid1504.pdf

So not ‘wrong’ at all, and certainly not ‘again’.

Core CPI is all that matters to serious observers. — Garth

#183 raisemyrent on 06.15.15 at 5:42 pm

#172 S.Bby on 06.15.15 at 3:38 pm
indeed, that is an argument that I keep hearing again and again, your rent is going nowhere. I go through it when I explain I leased my car too. That one doesn’t last, though, as soon as you remind people that cars aren’t an asset. cars aren’t assets and only depreciate. Used-car salesmen are scum, real estate is a safe bet that always goes up, and realtors are professionals. Maybe in the future…
another one is referenced on this comment:
#175 Calgary Rip Off on 06.15.15 at 4:26 pm

though I think they’re getting on to a different point, you usually hear that market corrections are not to be worried about, because it’s already gone up so much and it would continue to go up after the correction that it all works out in the end. I have yet to meet anyone that can back that up with a spreadsheet that considers interest, rent, opportunity costs, misc costs, etc, and they usually take extreme or random numbers to make their case quickly, and move on (presumably proving you wrong). they do more math to work out the price per banana at the grocery store. don’t get me wrong, I hate spreadsheets, but I also don’t take 6-7 figure financial decisions lightly.

#184 bill on 06.15.15 at 6:31 pm

#38 BG on 06.14.15 at 7:31 pm
My advice would be to travel against the flow of the commuter traffic and place yourself in a neighbourhood that allowed you to do this.
take a good look at the way the YVR runways are aligned.
being underneath them can be a problem close to the airport.

#185 no skin in the game on 06.15.15 at 6:52 pm

re #68
S.Bby on 06.14.15 at 10:13 pm

These crazy lending practices are why I will not buy real estate in YVR at this point. I would be putting my hard earned resources up against someone else who has no skin in the game. It’s quite ironic when someone like me with money behind them feels they cannot participate in a market where apparently no one really has anything to risk.

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

I’m 100% with you on this.

These lending practices have created a phantom economy. Poor overextended souls have no extra cash to participate in the economy. Businesses taking a hit as well.

There are overleveraged debt slaves who can’t afford anything and foreign owners who are not living in the many places they’re holding.

It’s harder to make money here now as well. I’m packing up and looking elsewhere. The FIRE guys will do well but that’s about it.

#186 Ray Vasquez on 06.15.15 at 7:13 pm

To Mark #165

So why are they called deposits. They are not called loans. This is the B.S. that people can really give legal theft and confiscation an okay.

Mark, any property you think has your name, titled and registered is not yours. It is a loan to the municipality and province.

When your municipality and province has financial problems, they just take your condo, house, cottage, rental property.

This goes for your investments as well. They just go and take it all away. Wait, this is called theft, confiscation and appropriation.

Guess what, you are justifying socialistic policies and guess what, your going to get screwed too no matter what you do.

Mark, no wonder nobody takes your posts seriously!

#187 Andrew Woburn on 06.15.15 at 11:42 pm

This is a comment from Mish Shedlock’s blog site. Mish was asking how long US auto sales can hold up. Mish is a widely respected financial blogger.

“Old Guy • 7 hours ago
Mish, dealers do not load up on vehicles. Dealers are floor planned and are required to take the vehicles, even if they do not want them my friend. There are several lawsuits across the USA because vehicles were basically being stuffed down dealers throats and they were taking upwards to four or more months to sell certain models. The dealers had to pay for these vehicles once delivered. Thus the lawsuits. GM has now backed off the payment schedule and dealers pay when they sell them. You are correct that a vehicle is counted as sold once it leaves the factory headed for a dealer, but that is not the whole story. Dealers across the board were ready to riot. My wife’s uncle owns a Jeep/Chrysler dealership. Many vehicles also end up in huge (thousands of acres) outside storage facilities for those not selling. These are also counted as sold. Dealer stuffing goes on daily and excess capacity is shipped to storage facilities around the world. All automakers do it and it is the secret they do not like to speak about.”

http://globaleconomicanalysis.blogspot.ca/2015/06/no-rebound-in-manufacturing.html

#188 Victoria Real Estate Update on 06.16.15 at 2:03 pm

. . . . Calgary House Prices. . .
. . . . .Percent Below Peak. . . .
. . . . . . . . . . . . . . . . . . . . .
..0%. . .*. . . . . . . . . . . . . . .
– 1%. . . . . . . . . . . . . . . . . .
– 2%. . . . . . . . .*. . . . . . . .
– 3%. . . . . . . . . . . . . . . . . .
– 4%. . . . . . . . . . . . . . . . . .
– 5%. . . . . . . . . . . . . . . *. . .
—————————————————
. . . . . Oct. . . .Jan. . . . .May
. . . . .2014. . .2015. . . .2015

#189 Corey on 06.17.15 at 2:12 pm

Sorry. Who is Chad? This entire article is based around an opinion based quote (with no reference whatsoever to Vancity) by a person named Chad.

This is one of the poorest examples of “exposé” writing I’ve ever seen. I’m sorry that you think that only those who are rich are deserving of banking services but I personally think that Vancity has been doing more than other institutions to assist people in breaking away from the cycle of poverty. Yes there has to be safeguards in place to ensure that people can actually pay for the money that they’re borrowing but that’s not what a Fast and Fair loan is there for. That loan is there to keep people from going to predatory payday loan institutions and getting trapped in a never ending cycle of payments that they can never escape from. Poverty is not a quick and easy problem that can simply be fixed by ignoring it and having banks leave those who don’t have money in the dust.

I applaud Vancity for actually trying to help those who have been left behind by major banking institutions.