Guess what?

MEDICINE modified

On Friday the crazy people in Australia will begin doing something the crazy people in Vancouver and Toronto should envy. A big Parliamentary inquiry into home ownership kicks off in a country where they relish fine house porn as much as we do. Maybe more. It seems Australia and Canada have the last two remaining bloated, swollen, humped-up, dirigible-sized, gasbaggish middle-class housing bubbles in the world.

Opening testimony may sound familiar. More on that in a moment.

Meanwhile Canada’s biggest bank had some interesting things to say Monday about what the panicked house-buying masses in YVR and the GTA might soon expect, where prices romp and the Bank of Mom thrives. Despite the lowest mortgage rates ever, the bank points out affordability has eroded (duh) as peak house is achieved. It also says the current seller’s market in both bubblicious burgs could be whacked:

“The eventual normalization of monetary policy has the potential to affect housing affordability adversely across Canada. RBC expects the Bank of Canada to start raising the overnight rate in the second quarter of 2016. Exceptionally low interest rates have been a key factor maintaining housing affordability at mostly manageable levels in recent years. The effect on affordability of a rise in interest rates would be most visible in high-priced markets.”

Remember what I told you (Friday) that Fed boss Janet Yellen is saying? US rates will be rising about 1% a year from the absurdly low level of present. That is called ‘normalization’ and it’s inevitable. This will impact bond yields, naturally, and take fixed-term mortgage rates along for the ride. People borrowing at 2.5% today should expect to renew at 5%. And house prices that went up because money went down, will reverse.

This will happen long before the Bank of Canada changes its rate, which will increase the prime, business loans, your HELOC and variable-rate mortgages. RBC says that will start in the spring. So, far, far in advance, you’ve been warned. The people who believe the real estate price increases of recent years cannot be reversed (basically everyone you know), are set to join those who swore pet.com was headed for the stars or Bre-X was the future. And don’t forget Nortel.

Well, back to the land of ‘roos, where cheap rates, property-friendly laws, house lust and politicians who can’t stop diddling the marketplace have made Australia like us. The media is real estate-crazed, veins run thick with hormones and everybody’s an amateur specuvestor. Like here, the horny masses have tried to blame offshore interests for their raging prices. Unlike here, Australia consequently adopted a mess of tough and discriminatory laws. They haven’t worked, of course, because foreign buyers may be visible, but they ain’t the cause.

The result of all this, say two housing economists ready to face lawmakers, is a ‘bloodbath’ in the making. Lindsay David and Philip Soos are well-researched and highly-respected dudes who would fit right in with this pathetic blog, as they believe there is absolutely no way a bubble of the kind now enveloping Melbourne or Vancouver can survive.

These guys claim there’s actually an oversupply of housing (think about the new condos going up in the GTA), just as there was in the US before the wheels came off the economy. Here’s a sample of what they will be saying:

“Contrary to the analyses of the vested interests, the data clearly establishes Australia is in the midst of the largest housing bubble on record. Policymakers are caught between a rock and a hard place, as implementing needed reforms will likely burst the bubble. Australian economic history and recent international events illustrate collapsing housing bubbles can quickly increase the number of unsold properties [stale stock], shattering the pervasive myth of a deleterious dwelling shortage. Falling housing and rental prices, including sales, would be a doomsday trifecta for investors as they suffer losses in both capital prices and net rental incomes.”

The economists sound eerily familiar when they argue that down-under property values have become decoupled from economic reality – bearing no relation now to incomes, rents, inflation or economic growth. “What event or set of events triggers the beginning of the end of the housing bubble is not yet known,” they say. “A bloodbath in the housing market, however, appears a near certainty due to the magnitude of falls required for housing prices to again reflect economic fundamentals.” As you might expect, they have been ridiculed by the housing lobby.

Hmmm.

So what does the Aussie finance minister (curiously named Joe Hockey) say in response? There’s no bubble, he argues, because people wouldn’t be buying houses if they couldn’t afford them. So buzz off.

JOE modified  And what does our finance minister say? “It’s not a huge concern at this point,” insists Joe Oliver. “I’ve said again and again we don’t think there’s a bubble – the Bank of Canada agrees with that, CMHC and the OECD.” (Well, actually, the central bank claims housing in Canada is over-valued by up to 30% and the OECD has warned about excessive consumer borrowing.)

There is one big difference between Canuckistan and the Land of Matilda, however.

Australians will watch a formal inquiry into what’s driving the sexed-up market, how flipping,  and speculation have impacted prices, the impact of tax laws (like negative gearing) on real estate and how it might all be reformed. We get to watch Love it or List It.

136 comments ↓

#1 David Lee on 06.22.15 at 7:53 pm

OMG!!! Mr. Turner quoted by Vancouver Sun:

http://www.vancouversun.com/business/affordability/Barbara+Yaffe+Home+buyers+suckers+into+bidding/11157773/story.html

#2 Steve on 06.22.15 at 7:54 pm

“There’s no bubble, he argues, because people wouldn’t be buying houses if they couldn’t afford them”

I fell off my chair, although this is scary (for Australians), when it comes form mouth of a person who makes important decisions

#3 IM in C on 06.22.15 at 7:56 pm

The political party that allows the residential real estate market to collapse will be the political party that will be out in the political wilderness for the next 25 years. Don’t expect any political party to actually try and burst the bubble. They will do everything in their power to keep the bubble inflated

#4 Wait... bubble? on 06.22.15 at 8:00 pm

You said there is no crash in the cards for Real Estate.
Therefore, there is no bubble.

Therefore, aforementioned folks don’t belong on this blog?

#5 First? on 06.22.15 at 8:02 pm

First?!

#6 Chris on 06.22.15 at 8:02 pm

Impossible. I am first. Australia is the other crazy market and people there also blaming foreigners ie Chinese curiously.

#7 j0n on 06.22.15 at 8:04 pm

j0n here from “Don’t Do It” (http://www.greaterfool.ca/2015/05/22/dont-do-it-2/).

Update: decided to shun the burbs and stay renting out in the country, prizing liquidity and flexibility over the family homestead. Wife’s going back to school anyways so will re-evaluate in 3 years when she’s done and f/t again. Kids can stay put, ride their dirt bikes and atv’s in the fields, all while enjoying the scent of cow manure; much better than the stench and stress of the city!

thx all for the advice.

#8 BobC on 06.22.15 at 8:10 pm

So far in the 2 years I’ve been following this blog I can’t pick a time Mr. t has been wrong. I saved a ton by following his advise on selling gold. Ok, I sold after another $250/oz loss.
What I cannot understand though is why I would rebalance by buying more bonds knowing the price will drop. It just seems stupid.

Not if you buy the correct bonds, in the weightings I detailed. They have a useful role in dampening volatility, mitigating equity swings. A balanced portfolio is balanced for a reason. Do not expect every asset class to advance every month. — Garth

#9 mitzerboy aka queencity kid on 06.22.15 at 8:11 pm

dat thar picture of joe owe makes one think of the old sayin …
a picture is worth a thousand words

#10 takla on 06.22.15 at 8:12 pm

the monotony of it all, bubble housing reset and Imminent interest rate increase…but it never seem to happen…

#11 Joe Hockey - Treasurer and Member for North Sydney on 06.22.15 at 8:13 pm

Aye, Garth, there you go again. You’re such a dag.

Your analysis is simply not fair dinkum, like kangaroos loose in the top paddock.

There is no bubble here, it’s gone walkabout.

I have no idea what your pozzy is or what you do to make a quid, but you’re none too good at predictions.

Why don’t you grab your togs (or go in the nuddy) and an esky and climb back in your ute and head for the beach for the summer? Leave predicting to experts like meself.

Stop spitting the dummy and being such a knocker.

Rack off, yobbo!

#12 TurnerNation on 06.22.15 at 8:13 pm

No, got it.

Deal with Goldbugs/metalheads finally. We need this in Canada (as in the land of the free):

https://en.wikipedia.org/wiki/Executive_Order_6102

“”forbidding the Hoarding of gold coin, gold bullion, and gold certificates within the continental United States”.”

Why would you need a shiny metal (or barrel of oil or roll of copper) store in your basement?
Industrial use only.

#13 Aaron on 06.22.15 at 8:19 pm

You totally missed the role of negative gearing in pushing up house prices here and the ability of people to buy investment properties in their self-managed super funds (Aussie equivalent of an RRSP or TFSA). With negative gearing, you buy an investment propert with the plan of renting it out at a loss. Your net loss is subtracted from your income, lowering your taxable income and allows you to avoid paying a marginal tax rate of 40 or 45% if you are in one of the top brackets. Additionally, when you sell the property you only pay half the capital gains tax. Investors are pushing first time home-buyers out of the housing market in many major cities here.

Garth, you are a bit off on your claims about foreign buyers in Oz. While they are definitely copping some of the blame for the rise in house prices here, it is far from the only cause getting substantial media attention. The Labour Party and the Greens are both trying to make reforms to negative gearing and the RBA and other banks are saying thay negative gearing has to be reformed to help reign in housing prices. Slow releases of new land have also been widely blamed for the rise in prices. People are paying $200k to $300k+ for postage stamp sized lots in small cities simply because new lots are relatively scarce. The other group getting the blame is immigrants. During the commodities boom, immigration rates were particularly high and population growth was outpacing the construction of new housing. With the bust, housing is catching up with immigration or even passing it.

#14 Nemesis on 06.22.15 at 8:24 pm

“There is one big difference between Canuckistan and the Land of Matilda, however.” – HonBruce

#CrikeyBruce,YouCanSayThatAgain… #TheyDressFunny

https://youtu.be/nKm2r2zUT7w

#BonusBruce,Or… #MoreTalesFromTheBordello

https://youtu.be/_f_p0CgPeyA

#15 Mark on 06.22.15 at 8:26 pm

“Don’t expect any political party to actually try and burst the bubble. They will do everything in their power to keep the bubble inflated”

How well did that work in the US? Do you think policy makers went through the housing collapse just for the fun of it? No, they threw practically everything they could at the “problem”, and still haven’t managed to achieve a recovery. And by taking steps to prop up housing prices, they actually stimulated the construction of more housing making the inevitable equilibrium price even lower than it otherwise would be. Damaging the collateral that underlies the mortgage finance system even further.

The problem in Canada is that government is inherently heavily involved with the system of mortgage finance, by way of the CMHC. As the housing prices continue their descent on account of physical over-supply, and as the economy heavily weighted towards FIRE/construction continues to weaken/deflate — bad loans will start piling up at the CMHC.

Eventually the CMHC will be forced to come to Parliament and ask for an appropriation of public funds. To make payments to the banks who hold the defaulted mortgages.

Will a government be willing to do this? Make payments of taxpayer money to the CMHC to be given to the banks? I’m not so sure, especially if its a NDP government with an avowed hatred for the banks. And if the market is convinced there is any uncertainty as to the ability/willingness of the CMHC to make good on its guarantees, there will be severe turbulence in the Canadian MBS market.

In such a scenario, even with low policy rates (ie: 0%) to fight the weak Canadian economy — Garth’s pronouncement of 5% mortgage renewals might seem conservative if investor confidence leads to mortgage market participants demanding a substantial risk premium. A good chunk of Canada’s mortgage debt is held by highly leveraged institutions (banks/insurers), so increased volatility automatically increases the applicable regulatory capital risk weighting. And hence, increases equity capital requirements. I don’t imagine bank equity would do so well in such a scenario, so a double-whammy which would drive spreads much wider.

#16 Randy Randerson on 06.22.15 at 8:35 pm

“See no evil, speak no evil, and hear no evil.” – Joe Oliver.

#17 gold inquery on 06.22.15 at 8:43 pm

When was the inquiry for the $1900 gold (or whatever the top was)?

There wasn’t one?

How come gold is $1188 now?

Maybe the invisible hands of the market?

Why would real estate be immune to that?

#18 gladiator on 06.22.15 at 8:46 pm

Love the pic.
Something like “second-hand sex toys”

#19 Rexx Rock on 06.22.15 at 8:53 pm

Garth is right,we may see only 3% or 4% rise in house prices in Vancouver and Toronto than the usual 7% to 10 % a year.Victoria is still booming so all you Alberta tradesmen should come to Victoria and find work.Houses are cheap in Victoria compared to Vancouver at only $500,000 for a small house.

#20 crowdedelevatorfartz on 06.22.15 at 8:54 pm

@#3 IM in C

“….. will be the political party that will be out in the political wilderness for the next 25 years…..”
++++++++++++++++++++++++++++++++++++

You mean like THIS party?

http://www.google.ca/url?sa=t&rct=j&q=&esrc=s&frm=1&source=web&cd=8&cad=rja&uact=8&ved=0CEgQFjAH&url=http%3A%2F%2Fwww.cbc.ca%2Fm%2Fnews%2Fpolitics%2Fstephen-harper-s-polling-picture-bleak-but-history-offers-him-hope-1.2798115&ei=Hq6IVYKQNs77oQT8roagCw&usg=AFQjCNEX8U1hg7j74YayI1Kp1V0ypKMHpw&bvm=bv.96339352,d.cGU

a la Brian Mulroney?

NEVER underestimate the voters gullibility.

#21 Habs76-79 on 06.22.15 at 9:00 pm

As to Oliver’s comments of no bubble, LOL.

If I may?

Do not assume that those in positions of power in government and by extension even its bureaucrats are smarter than average. I remember reading a number of years ago that a study of the reported I.Q.’s of the year 2001 inaugurated US Congress showed that the average I.Q. of members of that Congress was BELOW the average I.Q. of the US citizenry itself. I am confident that our National Parliament would probably trace a similar line in terms of average I.Q.

We as people in society need to stop holding on to the myth that just because a person attains political office in any field of government or holds a high position in bureaucracy or also even that of a corporation are by such smart or smarter than the average member of society. They may not be so smart!

We all likely have witnessed dolts and assorted idiots in any and all governments, in various government bureaucracies and have seen many an idiot proverbially crash corporations big, not so big or small into the ground.

Stop putting these people by extension of attained positions in life, proverbially on high pedestals.

THEY NEED TO EARN IT BY EFFORT, SMARTS AND END RESULTS!

#22 Habs76-79 on 06.22.15 at 9:04 pm

P.S.

I’m confident that Garth has met with and worked with many an idiot or dolt in Parliament and government bureaucracy with his years in public office. He is probably too kind to name names though. ;-)

#23 OldGeezer from the bush on 06.22.15 at 9:05 pm

I remember an old bloke (very wealthy) telling me some time ago now, that his family got an enormous start when his grandfather bought up a multitude of houses for rental purposes following Australia’s gold based land boom of the 1840’s-1890’s.
The crash was gi-normous.
Will history repeat? Of course.
https://www.mup.com.au/items/11957

#24 ANON on 06.22.15 at 9:07 pm

“Bloodbath” & “Doomsday trifecta.”

Cheerful fellas. Probably great collectors of roo on the barbie recipes for quite some time.

#25 TurnerNation on 06.22.15 at 9:09 pm

Australia has bogans.

#26 Goldie on 06.22.15 at 9:09 pm

#12:

Do you realize that by advocating for the seizure of gold from private citizens so that it can be held only by the government and industry, you are in effect acknowledging that gold has great value? You defeat your own argument when you try to imply that it’s a worthless metal.

#27 bigtown on 06.22.15 at 9:10 pm

The only decent Canadian TV series LOVE IT OR LIST IT is shown on HGTV in the states so one thing is for sure: Canadians are capable of good television production without the help of the government or tax subsidies.

Back when the housing crisis kicked in in Arizona and Las Vegas in 2008 it seemed like overnite you were sitting in a hotel lobby in Vegas and they were busing in folks to house shop in the burbs and condos on the strip then as soon as you got up the next day it was over. Same thing happened in Fort Myers and Cape Coral and thousands and thousands of tradesmen and Mexican construction workers had to get up and leave town all of a sudden. Money moves fast.

#28 batt519 on 06.22.15 at 9:12 pm

I knew my last relationship was doomed when I asked Little Ms Finebottom how she’d cope with the $400k mortgage on her GTA palace if home prices dropped to 1982 levels. Her reply was that that would be impossible since her abode wasn’t built until ’87…

I’m safely in $ilver and small on real estate.

#29 New guy on 06.22.15 at 9:17 pm

Bullcrap.
Taxpayer will bail ALL underwater homeowners while renters can look forward to neverending rent-increases.
C’mon folks, who is really screwed here and as always are renters!!!
After All homeowners always get approved.

#30 Smoking Man on 06.22.15 at 9:18 pm

Ha, yes in the spring, rates will rise. It’s like a broken record.

It’s called an attempt to talk down this market.. And it won’t work.

Not with this herd, been out of the game for a week.

My conclusion from my trip. Only people that are spending in the USA are retail market investors and there kids.

The working schleps not so much…good housing numbers today south side.

Problem..67% are purchased cash. No mortgage.

Sorry but you can swallow what yellen spews..

Not I ..

Bricks = no debt
G7 drowning in dept.

You know where my loots parked.

#31 Musty Basement Dweller on 06.22.15 at 9:19 pm

Does anyone know if aussieland has a CMHC equivalent that supports this housing price nonsense on the back of taxpayers!?

#32 MSM-free Zone on 06.22.15 at 9:20 pm

“…Despite the lowest mortgage rates ever, the bank points out affordability has eroded (duh) as peak house is achieved…..”
_________________________

Crocodile tears from a crocodile bank (can you say teaser mortgage rates and TFW’s?)

That’s quite the arrogant statement coming from the Royal Bank of Temporary Foreign Workers, whose repeated record profits have been backstopped by Canadian taxpayers.

#33 Daddy Issues on 06.22.15 at 9:23 pm

Re #11

Joe , didn’t know that you were Austin Powers father ?

https://www.youtube.com/watch?v=kZ7TuUbxJBg

#34 seeing it from both sides on 06.22.15 at 9:25 pm

And again, the ‘bubble’ in BC is ONLY in the Metro Vancouver/Richmond core (specifically anything with a strip of dirt) and it will self correct through market forces when demand dries up. Econ 101. No intervention tools have worked because obviously the demand is still there, for whatever the reason.

I’m tired of the constant bleating of bubble talk, as if that micro region is representative of the whole real estate market in the Lower Mainland (and Canada for that matter). I know people in Coquitlam (just 30 minutes from the core) that have been trying to sell their condos for months now, at 2009 prices, and still not sold. A 1000 sq ft 2 bed/2 bath/2 balconies/2 parking stalls, next to the mall and new skytrain station can be had for under 280k, and still on the market more than 90 days. Where’s the 30% overvaluation generalisation?

The media only spotlights the frenetic action (likely through realtor antics) on a handful of properties (in the core) and whips the audience into a frenzied chant of bubble that reverberates around the world, and picked up by economists that have no clue about the lay of the land. People that live here know that ‘Vancouver’, as referenced by the media, ends roughly at Rupert St. I am with Joe O…there is no bubble in Canada as a whole, only high demand in micro regions. I might also add that a few nights here and there renting out a room through airbnb could help carry the mortgage payments if in a bind.

#35 Llewelyn on 06.22.15 at 9:27 pm

Does the concept of balancing the supply of housing with demand and affordability still exist in Canada.

It appears to me that housing units are being treated as an asset class and that a body of professionals are so busy peddling assets and creating derivatives that they are ignoring a number of basic fundamentals.

Housing units actually have to be occupied to establish a value. Canada plans to construct 180,000 to 190,000 new units this year without assuring that units in the pipeline will not require more than 32% of the income of the intended market.

CMHC does not seem too concerned about affordability but they certainly should. Once excess funds are extracted out of the economy to secure accommodation other sectors of the economy will contract.

The importance of the residential construction industry to Canadian GDP is significant and any abrupt correction would ripple far and wide.

We have reached the point where even a mortgage rate of 0.0% may not bring housing prices into line with the household incomes of projected buyers. Any increase in mortgage rates will certainly initiate a correction that is bound to put a damper on Canadian GDP.

The affordability of housing should be followed closely by all investors in all forms of Canadian assets.

#36 Freedom First on 06.22.15 at 9:32 pm

Australia and Canada. Can you say “Double Bubble?”

The coming results will be epic pain.

#37 carlosthedwarf on 06.22.15 at 9:39 pm

http://www.macrobusiness.com.au/2015/06/bubble-war-rolls-on/

Australian mainstream media out in force today with the “It’s different here” mantra again.

Also worth noting that the “Domain Group senior economist” is part of the Sydney Morning Herald’s Domain real estate arm, which accounts for about 40% of revenue for the paper. So it’s the typical vested interest.

#38 gut check on 06.22.15 at 9:51 pm

@ #17 gold inqiery (or however you spelled it)

you have to look under the non-glittering rocks, but it’s happened/happening:

http://www.forbes.com/sites/timtreadgold/2015/02/24/the-justice-department-goes-hunting-for-a-gold-price-fix/

http://www.reuters.com/article/2014/01/17/deutsche-gold-fix-idUSL5N0KR19G20140117

#39 Nemesis on 06.22.15 at 9:52 pm

“See no evil”… Randerson’sRandiness…

#BasedOnCowboyBob’sNovel,Or… #ProductionNotesForSmokingMen… #StrangerThanFiction…

https://youtu.be/JvTni7Nggi0

[NoteToGT: Sanguine doesn’t begin to describe his Boss… Of course, in those days… you could smoke in Pubs.]

#40 OttawaMike on 06.22.15 at 9:53 pm

#30 Smoking Man on 06.22.15 at 9:18 pm
You know where my loots parked
————————————————–

Bank of Greece?

#41 Smoking Man on 06.22.15 at 9:55 pm

Tylonal.

R-4606 R-4607 R-4608

Found out even figtet jocks from Nelis AFB who breach that air space get into deep do do.

But what got me on my treck out to Rachel.

20 Air force dudes in that little dinner. Did not say a word to each other.

Is that some kind of rule or protocol for those that work the base. when with civilians no talking period .

20 min..while I was there..only ordered food. No talking to each other..

I need to know…

And I’m glad never made it to the sign on Groom Lake Road.

#42 Nagraj on 06.22.15 at 9:56 pm

This Joe Hockey person carries on as if the Down Under economy had nothing wrong with it, kinda like this Joe Oliver person.
But there are sharp divisions of opinion in Australian ruling circles, which divisions are out in the open – the Harper regime on the other hand still manages to present a united front, notwithstanding Poloz’s lukewarm contradiction. Maybe the fact that the Aussie Senate is an US-style Senate makes the difference.

{On the ground, public opposition to AUSTERITY policy in Australia and Britain is well organized and advanced compared to Canada – wonder how Canada will catch up; probably this catching-up will manifest in opposition to provincial spending cuts.}

#43 Jay_Huhman on 06.22.15 at 10:03 pm

The IQ estimate of US Congress members is from the Weekly World News, a joke newspaper.

http://weeklyworldnews.com/headlines/36094/study-congress-filled-with-morons/

#44 Mark on 06.22.15 at 10:07 pm

“Does anyone know if aussieland has a CMHC equivalent that supports this housing price nonsense on the back of taxpayers!?”

In my research, I haven’t been able to find anything like Fannie Mae/Freddie Mac/FHA (USA) or CMHC (Canada) existing in Australia. The Australian banks appear to be funding the bubble entirely at their own risk.

http://www.smh.com.au/federal-politics/political-news/australian-housing-market-facing-bloodbath-collapse-economists-20150622-ghu8a6.html

Just like in Canada, high prices created a state of severe oversupply, and now, falling prices. Just like in Canada, the headlines are full of buyers at the extreme margin, so-called “Chinese”, paying top dollar. In both countries, the sales mix is extremely pertinent to understanding what is really going on, rather than simply observing the “headline” numbers which are against an increasingly limited upper-end segment of the market.

#45 Washed Up Lawyer on 06.22.15 at 10:11 pm

A few years ago, the Australian Parliament held an inquiry into work camps and fly-in/fly-out work forces. The sage Parliamentarians travelled to Fort McMurray and Nfld/Lab among other places.

On this real estate inquiry, maybe they will travel to Dunbar, Long Branch and Fort McMurray (again). I’ll fire up the Barbie.

Bonus – they can collect my pithy comments on the Calgary market without travelling there.

The report resulted in recommendations and suggestions.

“Cancer of the bush or salvation of our cities”.

http://www.tonywindsor.com.au/releases/130213.pdf

#46 van on 06.22.15 at 10:17 pm

cities with most expensive housing! Singapore, Honk Kong,Vancouver, San Francisco, Sidney, Toronto.
What do they have in common?
It happened in the last 20 years, during the same time that people in mainland Chine acquired considerable wealth.
China is a crowded and oppressed country, a great majority of the people with the means will move out to greener pastures, it is called migration. It has been happening through history. There is simply not enough houses in the target cities to supply the demand. The prices will stay high.

Have you ever been to China? — Garth

#47 Sheane Wallace on 06.22.15 at 10:21 pm

Joe’s look speaks volumes.

Too bad he won’t be charged in future criminal investigation, they only charge sane people.

#48 Steve French on 06.22.15 at 10:30 pm

Well, Lindsay David has put his cards on the table and balls on the line.

Let’s all check back on December 31, 2017, to see if he was proved correct, or was just talking trash.

http://blog.australiaboomtobust.com/2015/06/young-australians-build-a-security-fence-around-them-to-stop-intergenerational-theft/

“Comments made by the PM over the last few days gives me the unfortunate, but great confidence, that my forecast that the Australian housing bubble will burst leaving at least one major bank either bailed out, nationalised or bust by the end of 2017 is more likely to come to fruition.”

#49 Mr. White on 06.22.15 at 10:31 pm

Now that prices in Calgary are starting to drop off the cliff the real estate industry has started to talk about greater home affordability.

These guys are astonishing. Read the Calgary Herald for some solid laugh time.

#50 Wetcoast on 06.22.15 at 10:32 pm

If low interest rates were the cause of the real estate bubble then the bubble would be evident everywhere. But that is not the case. The bubble is evident only in areas popular to the Chinese – Vancouver, Ricmond etc.

Don’t get out much, do you? — Garth

#51 Steve French on 06.22.15 at 10:38 pm

ps: Australia Big 4 banks are:

Commonwealth Bank of Australia
Australia and New Zealand Banking Corporation (ANZ)
Westpac Bank Australia
National Australia Bank

Their combined balance sheet assets are over AUD $3 trillion.

That represents 220% of Australian GDP.

http://blog.australiaboomtobust.com/2015/06/too-big-to-save-big-4-balance-sheet-blowout/

If one of those heavyweights goes down, we are talking major sovereign risks here dude.

#52 Joe2.0 on 06.22.15 at 10:45 pm

DELETED

#53 Kurt on 06.22.15 at 10:45 pm

Congrats, j0n! Good for you!

#54 Jordy on 06.22.15 at 10:47 pm

Just rebalanced and added more north american pref shares XPF, they are on sale right now, nicely diversified 50/50 US/Can and nice yield :-)
Thanks Garth, you are a rock star….

#55 Jane Lillteton on 06.22.15 at 11:04 pm

I don’t have anything in stocks, bonds, ETF’s, REIT’s, mutual funds, etc. I am not comfortable with these.

I am 65 years old and a widow and am getting my C.P.P., husband’s C.P.P survivor C.P.P, OAS and his pension as a survivor.

All this is $3,500 a month which meets all my expenses. A modest $275,000 house and no debts at all, I am still left with $1,000 a month after taxes.

So far, I have accumulated a $36,000 in a 1.75% savings account, cashable GIC’s if I need money, it is there.

My husband was a good saver, provider as I am a good provider, saver too. We were always cautious.

He left me with a $350,000 in life insurance and is now in 3.1% compound interest 5, 7 year GIC’s since 2014. A GIC broker help me with these putting it in 4 different financial institutions.

I put a $214,000 RRSP back in 2006 in a 15 year GIA with Equitable Life at 4.5%. I had no company pension like him.

It will be worth $414,150 in 2021 when I have to decide RRIF or annuity for my RRSP.

My two adult children are doing well and are debt free, financially doing well so this is great for the whole family.

I sure hope interest rates are going up in 4, 5, 6 years because it would be a refreshing change for sure. I have alot of money coming due.

#56 Not Spending on 06.22.15 at 11:07 pm

Great post on Kangaroo Land today Garth.

Both Phillip and Lyndsay are well respected in economic circles down under but are the scourge of RE Agents and some of our illustrious Pollies.

Interesting to note also that Joe H’s wife owns a family RE business that is located in Canberra / Sydney and is quite profitable.

Joes latest “Epic” quote was recently when he addressed First Home Buyers.

“Young kids only need to find that really great job that pays great money and they can then go to the bank and borrow lots of money”.

Unfortunately Joe’s lost a bit of credibility down under of late.

#57 Michael Francis on 06.22.15 at 11:13 pm

Add to our woes the collapse in the price of iron ore. That stuff that Australia if full off and whose price will remain forever and a day above $180.00 per ton.
Now it’s around 60 bucks a ton.

#58 Smartalox on 06.22.15 at 11:17 pm

I recall Kristy Klark saying something unguarded when the anti-foreigner petition first made the news. She said that her government was loath to do anything to the housing market that would negatively impact the equity “that people had built up in their homes”.

It left the impression (on me) that she’d been advised that the electorate viewed their house price windfalls as their ‘right’, and that it wasn’t her government’s place to deprive them of that.

And maybe it’s not; but once the market weighs in, the government may not be able to do anything to stop it either.

#59 New guy on 06.22.15 at 11:25 pm

Have you ever been to China? — Garth

**********

WOULD YOU WANT TO LIVE THERE IF YOU HAD SOME REAL DOUGH ????????????

#60 Sydneysider on 06.22.15 at 11:32 pm

Every Canadian commentator cites the Australian law against unapproved foreign ownership, but none seems to realise that it has not been enforced over the last decade.

That said, the common belief in the Eastern Suburbs of Sydney is that much current action is being driven by local developers, who are buying to renovate or create duplexes. Frankly, I don’t believe rich Chinese would buy the original condition shacks that are coming on the market. They have better taste.

#61 Bottoms_Up on 06.22.15 at 11:35 pm

#17 Gold inquery
————————
Real estate is immune because of government interference. Does the government insure purchases of gold on margin? Does the government allow people to raid RRSPs to buy gold?

#62 betamax on 06.22.15 at 11:54 pm

#34: “in Coquitlam…A 1000 sq ft 2 bed/2 bath/2 balconies/2 parking stalls, next to the mall and new skytrain station can be had for under 280k… Where’s the 30% overvaluation generalisation?”

Show us the MLS listing. I looked at open houses today in that area, and anything 1,000 sq/ft under $400k is old, low-rise junk.

#63 Mark on 06.23.15 at 12:02 am

“If one of those heavyweights goes down, we are talking major sovereign risks here dude.”

I’m not sure about sovereign risks, but that’d be one mother of a debt to equity swap (sometimes called a ‘bail-in’) to resolve such institution.

The deflationary implosion of such would be epic. I’d actually expect the sovereigns to be bid to the moon simply on account of investor fear of owning anything else.

#64 Karma on 06.23.15 at 12:07 am

There are millions and millions of greater fools in China right now…

http://www.bloomberg.com/news/articles/2015-06-22/china-margin-trades-buckle-as-selloff-puts-364-billion-at-risk

#65 cashb4elvis on 06.23.15 at 12:11 am

Well Garth, it turns out that cash rather than Elvis is really the king….am surprised you never counsel loyal followers to switch into cash at key inflection points in the economy….unless of course you save these goodies for your rich and famous clients and not for the great unwashed blog masses

http://www.theglobeandmail.com/globe-investor/investment-ideas/wealthy-canadians-are-holding-on-to-cash/article25067532/

#66 PM on 06.23.15 at 2:31 am

To what extent has cheap money created bubbles elsewhere? Carl Ichan was saying something about stocks being overpriced.

#67 takla on 06.23.15 at 2:33 am

re#29 new guy….your post is “bull crap”
annual rent increases in B.C are capped at 2 % ubove inflation annually.Most landlords don’t attempt yrly increases,especially when they find “good renters” who pay on time and keep their homes in good condition.
And don’t think as a underwater home owner the gov is going to rescue you from your deft financial decisions related to home purchases and debt .
Renting is the new cool,housing subsidized by a nice landlord near you..gotta love it!

#68 Debtfree on 06.23.15 at 2:43 am

Yikes ! Joe down unda would rather risk a gastric sleeve operation than shut his cake hole to lose 20 kilos . What a sensible guy . We should make a switch quick before we lose one or the other .

#69 bdy sktrn on 06.23.15 at 2:47 am

#34 seeing it from both sides on 06.22.15 at 9:25 pm
And again, the ‘bubble’ in BC is ONLY in the Metro Vancouver/Richmond core (specifically anything with a strip of dirt) and it will self correct through market forces when ***demand dries up.***
————————————————-
the demand for a strip of dirt in van was off the charts compared to other cdn cities in 1980.

there is less dirt now , way less than 1980.
there is 3x the people with 10x the cash.
with less supply.

people will always want to live near the ocean/beaches/downtown.

the demand will keep on it’s upward trajectory. we don’t want to live in coq.

#70 cynically on 06.23.15 at 3:24 am

Re #21 – I totally concur and it is the fault of the apathetic Canadian character that allows such nonsense to go on at all government levels both provincial and federal. I hearken back to the Senate as a prime example of the public’s failure to demand change.

#71 Christy Clark on 06.23.15 at 4:17 am

She said the miserable locals should move to Fort St John.

#72 Dose on 06.23.15 at 6:17 am

Aussie Joe Hockey owns 4 homes. He wants prices UP! Government in bed with The Property Lobby.

http://www.smh.com.au/federal-politics/political-news/treasurer-joe-hockeys-impressive-housing-portfolio-20150610-ghkqzd.html

Call ’em out, peeps. Your Ministers may be in the game and up to their eyeballs.

#73 I'm stupid on 06.23.15 at 7:27 am

HAM is not real. You need to understand Chinese culture to understand how Canadian Chinese buy huge homes. I worked in a Chinese restaurant while going to school. I’m by no means an expert but learning the culture by taking to Chinese-Canadians I have some insight.

I remember a waiter at the restaurant that taught me a lot about life, he was a very smart man. I went for dinner at the restaurant recently and he was still working part-time, just to pass time during retirement. He lives in a 5000sq foot home. This is how it’s possible. He had a modest home. Then his son who became an engineer got married and they needed more space so they bought this huge house. A Chinese household has multiple generations living in the home. The household income is high because there are often 4 income streams. The parents income and the son and his wife’s income.

If you notice, the majority of Asians buying high-end clothing, cars or homes are all under 40 and they do it because of the sacrifices of their parents and the unique cultural living arrangements.

If Canadian culture worked the same way, all the oldest sons of every boomer would simply live in their parents home and have huge amounts of disposable income, to spend on luxury items.

#74 Kreditanstalt on 06.23.15 at 7:38 am

They don’t need inquiries…all they need to do is stop expanding the supply of money and credit.

Problem solved. The result is called HONEST MONEY.

#75 Leo Trollstoy on 06.23.15 at 7:53 am

With the threat of deflation firmly in the rearview and the spectre of a depreciating CAD, Canadians find themselves as a nation of net importers as the trade deficit widens (just like Australia)

http://www.financialpost.com/m/wp/blog.html?b=business.financialpost.com//news/economy/canadas-trade-deficit-balloons-to-second-biggest-on-record

#76 LLewelyn on 06.23.15 at 7:55 am

Let me see if I have got this right. Homeowners can trot on down to their closest bank and negotiate a HELOC at 3.4% and then move two desks over and buy a nice ETF that is generating a 7.0% return. All the while the market value of both your house and your new ETF’s continue to increase. Sounds like heaven to me!!!

Come on folks give your head a big shake. How long do you think this shmozzle of a big ‘con’ game can continue before the sellers run out of buyers.

In their quest for profits financial institutions package their mortgage liabilities into derivatives and pass them on to investors. They have become nothing more than commission salespersons exploiting the confidence that a $20 bill can be bought for $10.

At the risk of sounding like a broken record the majority of risk now rests with ordinary Canadians who bought into the con. Like any con its nothing but big profits and good news until someone pulls back the curtain and confidence disappears into the sunset. Ever seen that movie before?

I think Einstein may have said it best

“Insanity is doing the same thing, over and over again, but expecting different results.”

#77 Londoner on 06.23.15 at 8:19 am

We get to watch Love it or List It.

We now have Love It or List It in the UK, presented by that loveable duo, Kirsty and Phil, from the other property show – Location, Location, Location. Sadly, it’s nowhere near as exciting as the HGTV version :(

“US rates will be rising about 1% a year from the absurdly low level of present”

Reminds me of that chart showing the history of IMF world growth forecasts. There was an inflection point in the chart where growth would dramatically take off. First it was Q1 2012, then Q2, followed by Q3, Q4, Q1 2013, Q2 2013… you get the picture.

#78 Karl Nixon on 06.23.15 at 8:36 am

@mark – we have Genworth and QBE underwriting mortgages in Oz

#79 Holy Crap Wheres The Tylenol on 06.23.15 at 8:50 am

#41 Smoking Man on 06.22.15 at 9:55 pm
Tylonal.
R-4606 R-4607 R-4608
Found out even figtet jocks from Nelis AFB who breach that air space get into deep do do.
But what got me on my treck out to Rachel.
20 Air force dudes in that little dinner. Did not say a word to each other.
Is that some kind of rule or protocol for those that work the base. when with civilians no talking period .
20 min..while I was there..only ordered food. No talking to each other..
I need to know…
And I’m glad never made it to the sign on Groom Lake Road.
____________________________________________
Heres answers.
Yes deep dodo, can lose rank and demotion. Everyone who pilots an aircraft knows where it is.
Talking outside on duty perhaps, was an officer present?
If so then no talking. Talking to civies not likely.
Even though you may not have made it to the sign, if you were within one statute mile, they made you already.

Whats with the SQL programing code?

#80 maxx on 06.23.15 at 9:07 am

“We get to watch Love it or List It.”

Which would make Canadians the most extreme fools on the planet- almost entirely manipulated by emotion.

Can’t wait to see the game of G12 catch-up which could follow.

Go Canaduh!

#81 TurnerNation on 06.23.15 at 9:13 am

Keg restaurants income fund just upped their payout. Middle market must be ok. I recommend only their bar food menu (10-15$).
Will consider for next year’s Tfsa.
PZA (pizza pizza) too, similar yield.

#82 TurnerNation on 06.23.15 at 9:18 am

Dee. Another hidden unspoiled gem you likely know is Stratengers patio not far from there and in Leslieville. Best brunch I’ve had. Both places have Indian owners who mix that into food flavors.

#83 Trading Naked on 06.23.15 at 9:23 am


#64 Karma on 06.23.15 at 12:07 am
There are millions and millions of greater fools in China right now…

I heard there were jumpers over there after that last tumble. And a jumper here off the Cambie Street bridge. I heard that from a banker…you won’t see that stuff in the news. Sad stuff.

My mother asked me if I was “buying China” (hell no). I then discovered on Twitter that mothers throughout the Western world were asking their trader children if they were “buying China”.

#84 Trading Naked on 06.23.15 at 9:29 am

#59 New guy on 06.22.15 at 11:25 pm
Have you ever been to China? — Garth

**********

WOULD YOU WANT TO LIVE THERE IF YOU HAD SOME REAL DOUGH ????????????

There’s a daily air quality report in PPM’s. The locals are well-versed in what’s an acceptable range of Parts Per Million of dirty particles in the air. Hence the face masks. Some of my fellow Western travellers were coughing and hacking until they put on their industrial-grade 3M face masks that they’d brought just in case. Good thing they did.

Any takers?

Try living and breathing in a condo beside the Gardiner Expressway. I’m sure that is no more emblematic of all of Canada than Beijing is of China. — Garth

#85 cramar on 06.23.15 at 9:56 am

Well the FED is making sure people get it that rate hikes are coming.

“A key official at the Federal Reserve said Tuesday there could be two interest-rate hikes this year as he said the stock market isn’t showing signs of being in a bubble.”

http://www.marketwatch.com/story/feds-powell-eyes-two-2015-hikes-as-he-dismisses-bubble-fears-2015-06-23

#86 bdy sktrn on 06.23.15 at 10:16 am

live readings

hogtown
Pollutant Measured 1-Hour
Concentration
O3 graph 22 ppb
PM2.5 graph 11 µg/m3
NO2 graph 12 ppb

maotown
Pollutant Measured 1-Hour
Concentration
O3 graph 74 ppb
PM2.5 graph 162 µg/m3
NO2 graph 18 ppb

Vantown
Nothing but sunshine and roses!

there are dozens of cities (most all of them in Eastern china) which are as bad or worse than beijing. http://aqicn.org/city/beijing/

china vs canada in air quality is like NHL vs midget A

#87 bdy sktrn on 06.23.15 at 10:20 am

Hong Kong (CNN)Only eight Chinese cities met the country’s air quality standards in 2014, according to China’s Ministry of Environmental Protection, although this was an improvement on 2013 when just three made the grade.

The worst cities were in the industrial province of Hebei, where the average reading of PM2.5 — tiny particles that can embed themselves deep in the lungs — were 93 micrograms per cubic meter — almost triple the country’s national standard of 35.

The World Health Organization’s guideline for maximum healthy exposure is 25.

Baoding, China’s most polluted city, is home to 11 million people and is perhaps best known for its donkey meat burgers.

#88 Doug in London on 06.23.15 at 10:22 am

There’s no bubble, he argues, because people wouldn’t be buying houses if they couldn’t afford them. So buzz off.
*******************************************
The logic in that argument reminds me of something I read in The Globe and Mail, business section back in 2006 which said something like: The economy is so much better managed today that recessions are now a thing of the past.

#89 r1200c on 06.23.15 at 10:26 am

“Luxury home” for sale on auction in Edmonton… supposedly a first: http://globalnews.ca/video/2069370/luxury-edmonton-home-goes-up-for-unreserved-auction/

It’ll be interesting to see Deadmonton’s RE pumpers reaction to this if it craters…

#90 Calgary Rip Off on 06.23.15 at 10:40 am

#49 Mr. White

Calgary hasnt been “affordable” since 2004 when prices were reasonable.

EVERYTHING is overpriced in Calgary.

#55 Jane Lillteton:

So your finances are in order and you obviously dont have to work. How are you going to spend the valuable time you have left?

#91 waiting on the westcoast on 06.23.15 at 10:47 am

New Guy – there are many more opportunities for the ambitious in China. While some of their wealthy will try to leave and cash out, that is no different than our ex-pats going to Argentina or Costs Rica.

It is hard to walk away from all of your network, business culture, etc, just to buy some property with better air quality. BTW – many cities in China have much better air quality. Beijing is one of their worst cities for pollution.

#92 Trading Naked on 06.23.15 at 10:53 am


Try living and breathing in a condo beside the Gardiner Expressway. I’m sure that is no more emblematic of all of Canada than Beijing is of China. — Garth

OK, how about a new condo in what looks to be a future gated community, complete with schools and hospitals, near UNESCO-protected quaint little Pingyao village (inland)? There’s a high-speed train station next door, too.

Oh wait, the community had a conference recently about air quality. Any takers?

I hear Qingdao on the coast (beer! Woo-hoo!) is breathable. The wealthy have their villas there.

We are so fortunate in Canada that air quality is not a problem in most urban/suburban locales. In China…choose carefully.

#93 Renter's Revenge! on 06.23.15 at 11:08 am

“A Chinese household has multiple generations living in the home. The household income is high because there are often 4 income streams. The parents income and the son and his wife’s income…If Canadian culture worked the same way, all the oldest sons of every boomer would simply live in their parents home and have huge amounts of disposable income, to spend on luxury items.” – #73 I’m Stupid

The trade-off is that you’re still living with your parents, or worse, your in-laws! Baaaarrrrf!

#94 4 AM Sunrise on 06.23.15 at 11:32 am

#67 takla on 06.23.15 at 2:33 am
re#29 new guy….your post is “bull crap”
annual rent increases in B.C are capped at 2 % ubove inflation annually.Most landlords don’t attempt yrly increases,especially when they find “good renters” who pay on time and keep their homes in good condition.

True, but that’s only if you stay put in one place. I’m renting this here studio in West Vancouver for $850/month. I heard that a new tenant would have to pay something like $1000 for the same. Rents have gone up all over the North Shore these past two years. Good thing I have no need to move.

#95 gladiator on 06.23.15 at 11:32 am

Just a note about RE market in North York: It’s hot-hot-hot! Recently drove on Finch avenue and saw more SOLD signs than ever.
And no, I am not in RE (a renter, btw).

#96 Mike S on 06.23.15 at 11:40 am

“– the likelihood of a rising CAD$ as a liquidation of speculative excess against the CAD$ and towards the USD$.”

Can happen, especially if oil recovers, but I wouldn’t bet on it for the near term

“– the likelihood of housing declines and forced consumer austerity being a drag on the ‘consumer’ economy for much of the next decade.”

Sure, however because we import many of the things we consume, the prices for these items are not set in CAD. For instance, yesterday I noticed the “ben and jerry’s” ice cream I buy from time to time, went up 20% vs. a year ago. Gas prices are ~1.2 CAD now, so we are back to normal here as well

“– the relative low-existence of CAD$ outside of Canada, hence less need to protect the currency from the spectre of capital flight?”

Not sure why capital flight and CAD outside Canada related

“– Canada’s credit quality being relatively better than the US on account of lower levels of government debt and unfunded obligations?”

Again add provinces, CMHC obligations and expected future deficits

“– Canada’s heavy investment in industry allowing it to run long-term trade surpluses.”

You mean the energy sector?
It doesn’t seem to help us in the past couple of months
About the long term. How do you know that alternative sources of energy won’t be much cheaper in about 10-20 years?

#97 waiting on the westcoast on 06.23.15 at 11:43 am

So i checked out an air quality index site and a number of US cities are in the moderate range. LA has 1/2 the PPM levels of Beijing. While it currently sucks, China has been developing solar and other green technologies to alleviate the pollution. Give them 10-20 years to reduce the levels. Check out this site:

http://aqicn.org/city/beijing/m/

#98 waiting on the westcoast on 06.23.15 at 12:02 pm

Mike S – I appreciate your efforts to help Mark understand.

Another air quality site (more visual):

Waqi.info

#99 NoName on 06.23.15 at 12:11 pm

#93 Renter’s Revenge!

The trade-off is that you’re still living with your parents, or worse, your in-laws! Baaaarrrrf!

——————————-
you got this wrong.
Actually it is a very good trade-off, no daycare bill, have moly maid on site daily, meals made from sckratch, and maybe with their oas and that other thingy they could fund kids resp… am I wright or worng, on this one?

#100 maxx on 06.23.15 at 12:14 pm

#13 Aaron on 06.22.15 at 8:19 pm

“You totally missed the role of negative gearing in pushing up house prices here……. With negative gearing, you buy an investment propert with the plan of renting it out at a loss. Your net loss is subtracted from your income, lowering your taxable income and allows you to avoid paying a marginal tax rate of 40 or 45% if you are in one of the top brackets.”

Negative gearing will be really cute once rates rise. Those teeth will really grind the wealth effect out of the low-level 45%-ers. Now could be one of the worst times for this ploy- especially in older condos.

#101 TurnerNation on 06.23.15 at 12:21 pm

Fed Governor Powell sees rate hikes in Sept. On the wire.

#102 Mike T. on 06.23.15 at 12:27 pm

‘Come on folks give your head a big shake. How long do you think this shmozzle of a big ‘con’ game can continue before the sellers run out of buyers. ‘

until July 8 or 9

Greece will sign on to the BRICS development bank on one of those two days

Harper signed us up when the G7 announced oil is over by 2100….what are we gonna do with all that debt?

my popcorn machine is ready for the theatrics!

#103 Lorne on 06.23.15 at 12:40 pm

#86 bdy sktrn on 06.23.15 at 10:16 am
live readings

hogtown
Pollutant Measured 1-Hour
Concentration
O3 graph 22 ppb
PM2.5 graph 11 µg/m3
NO2 graph 12 ppb

maotown
Pollutant Measured 1-Hour
Concentration
O3 graph 74 ppb
PM2.5 graph 162 µg/m3
NO2 graph 18 ppb

Vantown
Nothing but sunshine and roses!

there are dozens of cities (most all of them in Eastern china) which are as bad or worse than beijing. http://aqicn.org/city/beijing/

china vs canada in air quality is like NHL vs midget A
……….

Having lived for a year in two different Chinese cities, including Shanghai, I can confirm that you are absolutely correct….there is no comparison to any city in Canada and many, many cities in China!

#104 Mister Obvious on 06.23.15 at 12:54 pm

“Insanity is doing the same thing, over and over again, but expecting different results.”
—————————–

I once tried to connect to the Greater Fool website and got a message saying “server not found”. I tried again two more times got the same result. Then, on the fourth try, I was connected and began to read these comments.

Am I insane? (Of course I am… for reading this section)

Ever get a pop up window that says “Cancel or Retry”?

Why doesn’t it say “Cancel or Insane”?.

BTW, reading what I have about Einstein it seems unlikely he ever said anything so trite.

If you think you’ve come up with a brilliant saying it behooves you to attribute it to Einstein. It will get much more mileage.

#105 Calgary Hostility on 06.23.15 at 12:58 pm

http://calgaryherald.com/business/local-business/report-forecasts-price-gains-for-calgarys-housing-market

Why are price “gains” needed? The price is still $200K above real values!!! The only way prices in Calgary will go down again is if interest rates skyrocket. What are they 2%? If it goes to 10% there would be a collapse, otherwise things will remain status quo.

Now you can get the benefit of living out in Cochrane and go on the 22 highway which is clogged with traffic due to the massive building increases.

Get in quick on the $500K houses that are worth really only $200K!! “Real” estate, keeping it phony.

#106 Has anyone seen this? on 06.23.15 at 12:58 pm

http://www.cknw.com/2015/06/23/metro-vancouver-not-the-only-target-of-foreign-investors/

(I thought this blog said Canadians were the number one source of RE buyers in the US. Chinese buy three times as much as Canadians apparently – please correct if wrong)

#107 Nagraj on 06.23.15 at 1:04 pm

(JABBERWOCKY)

– will we see a Canadian version of the aforementioned Australian formal inquiry into their housing mkt – after the Oct election? As a prelude to the new Canadian gov’t introducing its (inevitable) Affordable Housing Program?
Much would depend on the inquiry’s format.
Well, if Nagraj is called on to testify, he shall (not chanelling Smoking Man) unhesitatingly say:

‘Twas brillig and the slithy toves
Did gyre and gimble in the wabe;
All mimsy were the borogoves,
And the momeraths outgrabe.

And of Mr. Turner’s testimony it will be recorded that:

And, as in uffish thought Garth stood,
The Realtor, with eyes of flame,
Came whiffling through the tulgey wood,
And burbled as he came!

One two! One two! And through and through
The vorpal blade went snicker-snack!
Garth left him dead, and with his head
Garth went galumphing back.

#108 Nemesis on 06.23.15 at 1:22 pm

#InTheLandOfTheMooseRiders,Or… #’OlKrusty’sPopularityWanes,As… #ArchaeologistsUnearth… #IncontrovertibleEvidenceOf… #PreHistoricWaterFrontHousingForAll… #WithFirePits!…

[G&M] – Moose rider who stressed animal under investigation in B.C.

http://www.theglobeandmail.com/news/british-columbia/moose-rider-who-stressed-animal-under-investigation/article25070950/

[TimesColonist] – Christy Clark’s approval rating continues to slide in B.C.: poll

http://www.timescolonist.com/news/b-c/christy-clark-s-approval-rating-continues-to-slide-in-b-c-poll-1.1975652

[CBC] – CaveManCondos found on B.C.’s Calvert Island could be oldest in North America

http://www.cbc.ca/news/canada/british-columbia/footprints-found-on-b-c-s-calvert-island-could-be-oldest-in-north-america-1.3123779

#BonusCulturalStudies… #BroughtToYouByEdwardCurtis… #&TheMighty Kwakwa̱ka̱’wakwNation…

https://youtu.be/QB93E0Ct3W8

#109 I'm stupid on 06.23.15 at 1:24 pm

#93 renters revenge

My point wasn’t if the situation was good or bad. I just wanted to point out Chinese culture and why it works so well here. You have a right to your own choices as does everyone else in Canada but its not right to single out a group of people.

#110 seeing it from both sides on 06.23.15 at 1:26 pm

#62
Show us the MLS listing. I looked at open houses today in that area, and anything 1,000 sq/ft under $400k is old, low-rise junk.
—————-
e.g. enter a search on mls for 1180 Pinetree Way…
you can practically reach out and touch the new skytrain station and it’s a hop, skip and jump to the mall. Granted, it’s 25 years old, but it’s not junk like a West End condo built in 1960’s no parking, no in-suite laundry, at twice the price/sq.ft. Why is it ok to pay multi-millions for a crack shack (the epitome of junk) in Van? It’s ok for those that can and want to, but for those that can’t , there are other options. That’s life, suck it up.

#69
we don’t want to live in coq.
———

You miss the point of my post. I don’t care if one wants to live in Coq. or not, I was merely making the point that the ‘bubble’ is a micro region phenomenon, and not nation wide. A phenomenon created by people with your mindset (people who have probably never ventured past Rupert St.) that the core is the ONLY place to live. Hence, you must stop whining and pay the price.

#111 I'm stupid on 06.23.15 at 1:27 pm

NoName

You’re absolutely right. It does have its benefits but also its negatives. It’s their culture for one generation to take care of another and they have every right to do it. It’s not my situation as I’m not Chinese but I understand it and respect it.

#112 Andres on 06.23.15 at 1:33 pm

@ #46 van

I’ve never understood this argument that Vancouver will forever have an unlimited supply of buyers because everyone wants to live here. Don’t people need an actual source of income before they move? Vancouver’s economy isn’t actually expanding all that quickly, so why are people going to move here and buy an overpriced house when there are no jobs? Same with all these oppressed Chinese allegedly running over – don’t they need to work as well? As for the ones just buying property because it’s so beautiful, I never understood that either. Why would you buy a condo in a city where it’s only sunny and warm for three months a year instead of acreage in California, Florida or Mexico? Do people really behave this way? Again, it makes no sense.

#113 seeing it from both sides on 06.23.15 at 1:37 pm

#99
you got this wrong.
Actually it is a very good trade-off, no daycare bill, have moly maid on site daily, meals made from sckratch, and maybe with their oas and that other thingy they could fund kids resp… am I wright or worng, on this one?
————–

Correct…..was in Singapore recently….the trend now in landed property new build is 3 storeys (with elevator) to house 3 generations, as necessitated by crazy real estate prices. You want to talk crazy real estate prices? Take a trip to Singapore.

#114 devore on 06.23.15 at 1:41 pm

#29 New guy

Bullcrap.
Taxpayer will bail ALL underwater homeowners while renters can look forward to neverending rent-increases.

Bullcrap indeed. There are no neverending rent increases (1 per year, capped) and even with no rent controls between tenants, rents have been flat or pacing CPI in greater Vancouver.

You can take a look at some data on the region at http://bcnpha.ca/rhi/ which shows that employed, middle class households are neither struggling to pay rent nor to find rental housing in lower mainland.

#115 4 AM Sunrise on 06.23.15 at 1:46 pm

In the latest edition of Neighbour Wars: http://vancouver.craigslist.ca/nvn/zip/5086883336.html

“Free Parking Space near 13th and Lonsdale

I have a parking space I want used so that my neighbours stop treating it like a “guest” space.

The uglier the car the better!”

#116 45north on 06.23.15 at 1:52 pm

So what does the Aussie finance minister (curiously named Joe Hockey) say in response?

Australian finance minister Joe Hockey! this has confused me but that’s who he is:

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

Llewelyn: Let me see if I have got this right. Homeowners can trot on down to their closest bank and negotiate a HELOC at 3.4% and then move two desks over and buy a nice ETF that is generating a 7.0% return. All the while the market value of both your house and your new ETF’s continue to increase. Sounds like heaven to me!!!

Come on folks give your head a big shake. How long do you think this con game can continue before the sellers run out of buyers.

maybe they have run out of buyers. Don’t expect the real estate industry to put out a flyer with the headline “No More Buyers!”.

the banks are going to know before anybody else

#117 Smoking Man on 06.23.15 at 2:34 pm

Tylonal. Ha got numbers wrong
R-4806. R-4807 R-4808.

Restricted Sectors on a aviation charts. Ak area51

#118 Mark on 06.23.15 at 2:42 pm

“With the threat of deflation firmly in the rearview and the spectre of a depreciating CAD, Canadians find themselves as a nation of net importers as the trade deficit widens (just like Australia)”

Deflation isn’t in the rearview by any stretch of the imagination. Canada from time to time will be a net importer, especially with the extreme cyclicality of the resource sector involved. But on the balance and over the long term, Canada is a proven net exporter. Being a chronic net exporter is generally currency positive over the long run.

The Canadian housing bubble has barely popped (only modest decreases in the past 2 years) and CPI is barely positive. The US has a triple bubble in bonds, RE, and stocks which is set to pop, with negative YoY CPI already. The future appears very deflationary, with the credit cycle shifting towards the phase in which defaults are prominent.

#119 down and out on 06.23.15 at 2:49 pm

On the ground here in the deep southwestern edge of Ontario I was baffled by all the new construction of apartments and single family homes near the lake especially after the Heinz closure . Seems a lot of GTA folks are cashing out ,interesting how talking to some soon to be residents at the marina ,it is like they discovered a different country .

#120 jess on 06.23.15 at 2:49 pm

OECD chimin’ in
…” for OECD countries over the past five decades indicates that more finance is linked to sharply higher growth at low levels of financial development but that, above a certain point and at the margin, further financial expansion is associated with slower growth.”

“At today’s level of financial development, further expansion of bank credit to the private sector is shown to slow growth in most OECD countries. A rise of bank credit by 10% of GDP translates into a GDP growth rate that is 0.3 percentage points less than would otherwise be the case, according to the OECD.

Greater levels of stock market financing, on the other hand, are still seen to boost growth. An increase in stock market capitalisation by 10% of GDP is, on average across OECD and G20 countries, associated with a 0.2% rise of GDP growth.

Bank loans slow economic growth more than market-based credit, while credit to households – which is primarily aimed at the real estate sector – is a stronger drag on growth than credit to businesses.
Whereas financial expansion can help low-income individuals fund their projects and home ownership, it tends more to drive inequality. People with higher incomes can and do borrow more than those on lower incomes, and the benefits from growth in stock markets accrue more to high-income households who tend to have more wealth in equity. Similarly, the financial sector pays high wages, which are above what employees with similar profiles earn in the rest of the economy, increasing income inequality. In Europe, financial sector employees make up 20% of the top 1% earners, but are only 4% of overall employment.

http://www.oecd.org/economy/financial-sector-must-promote-inclusive-growth.htm

Long-established research on the “Resource Curse” focuses on three main areas – all of which can be applied to a degree to finance-dependent economies.
http://www.taxjustice.net/topics/finance-sector/finance-curse/

#121 raisemyrent on 06.23.15 at 2:51 pm

pet peeve. people quoting the insanity einstein crap confidently. not only is it not a verified einstein quote, but it’s not a definition of insanity by any measure (have you ever talked to an athlete?).
seems like some people need some good old education.

-queue the smoking man response

#122 waiting on the westcoast on 06.23.15 at 3:07 pm

From Financial Post article (link below)

“I believe that this program as we see it … is difficult to pass by us,” deputy parliament speaker and Syriza lawmaker Alexis Mitropoulos told Greek Mega TV.

“The prime minister first has to inform our people on why we failed in the negotiation and ended up with this result,” he said. “I believe (the measures) are not in line with the principles of the left. This social carnage … they cannot accept it.”

I live it when Socialists want an explanation…. It’s the golden rule… He who has the gold (IMF/ECB/etc) make the rules…

I was wondering how long it would be before the concessions would start. Europe will give some as well to give him some cred

Here is the link:

http://www.financialpost.com/m/wp/news/blog.html?b=business.financialpost.com/news/economy/greeces-latest-offer-to-creditors-draws-angry-backlash-back-home&pubdate=2015-06-23.

#123 Leo Trollstoy on 06.23.15 at 3:09 pm

Canada’s latest trade deficit, it’s 7th in a row, firmly establishes us as a net importer and foretells the continuing suppression of the CAD.

http://m.huffpost.com/ca/entry/7501888

Meanwhile, U.S. inflation is comfortable as the recovery strengthens.

#124 Renter's Revenge! on 06.23.15 at 3:12 pm

@ #99 NoName and #109 I’m stupid:

I understand that there are huge financial benefits to living with your parents for the rest of your life, and if that’s what people want to do, they can, and I’m not judging anyone for it. It’s just that everyone I’ve ever talked to in my life has complained about their parents getting under their skin from time to time, so I couldn’t imagine what it would be like living with them as an adult. It just sounds horrible in my mind. Mine would drive me insane. If there are people out there who are living with their parents and aren’t bothered by them at all, then they’re golden, of course :)

#125 jess on 06.23.15 at 3:26 pm

Scottish Labour’s justice spokesman Hugh Henry said: “This report is shocking and it’s also very worrying, because, on the face of it, it looks like Scotland is becoming the money laundering capital of Europe. It’s frankly unacceptable.”

..”The swindle allegedly emptied three of Moldova’s leading banks of almost all their funds.

Investigators say a key role was played by firms registered in Scotland.

The case has highlighted a huge rise there in limited partnerships, whose ownership is often opaque.

The report by the international investigation agency Kroll identified 20 UK LPs as allegedly involved in the complex fraud.

All but one of them are in Scotland.

One – which is now said to be owed the $1bn – is registered along with 420 other companies in a flat in a run-down part of Edinburgh.

Others are said to be involved share an address with more than 3,400 other companies nearby. “….

http://www.bbc.com/news/business-33193553

#126 Prairieboy43 on 06.23.15 at 3:37 pm

Living with Parents??? I would be divorced.
PB43

#127 davikk on 06.23.15 at 3:59 pm

San Francisco vs America in Housing Bubble 2

http://investmentwatchblog.com/san-francisco-vs-america-in-housing-bubble-2/

#128 Investorz on 06.23.15 at 4:07 pm

Transcanada cutting 185 jobs.

Chances are, many of them had fat mortgages.

#129 Paul on 06.23.15 at 4:33 pm

#128 Investorz on 06.23.15 at 4:07 pm

Transcanada cutting 185 jobs.

Chances are, many of them had fat mortgages.
————————————————————-
I guess that would make your day!

#130 bdy sktrn on 06.23.15 at 4:51 pm

#127 davikk on 06.23.15 at 3:59 pm
San Francisco vs America in Housing Bubble 2
——————————-
from your link:

“At the peak of Housing Bubble 1, the median house price in San Francisco was four times higher than the median price of existing homes in the US. It is now six times higher.”

It seems that it’s safe to buy some RE even at the tip-top of a bubble if you can hold for 7 yrs. Profitable too, if it happens to be in SF( or Van.) It’s the very same story all over again, just replace sf with 604.

“So, if you can’t afford that – even if you were born and raised in the city and had no intention ever of leaving – leave; that’s the message of these prices. Make room for people that can afford them. Or shack up with five other people.”

Easy money helps of course, but we all know that is not going to change (to a 3% overnight rate) for a long long time.

#131 bdy sktrn on 06.23.15 at 4:58 pm

if it happens to be in SF( or Van.)
——
416/nyc same applies

#132 Herf on 06.23.15 at 5:27 pm

#34 seeing it from both sides

“I might also add that a few nights here and there renting out a room through airbnb could help carry the mortgage payments if in a bind.”

You mean like this? :

http://calgaryherald.com/news/crime/calgary-home-destroyed-by-airbnb-renters-full-of-biohazards-owners-say

http://calgaryherald.com/news/local-news/this-was-a-drug-induced-orgy-calgary-couple-says-airbnb-renters-trashed-their-home

#133 maxx on 06.23.15 at 5:36 pm

#22 Habs76-79 on 06.22.15 at 9:04 pm

“P.S.

I’m confident that Garth has met with and worked with many an idiot or dolt in Parliament and government bureaucracy with his years in public office. He is probably too kind to name names though. ;-)”

He doesn’t need to.

#134 jess on 06.23.15 at 8:09 pm

how many public servants own extra properties in canada?

If this happens there why not here?

Corruption on your Doorstep looks at how corrupt money is used to buy property in the UK by analysing data from the Land Registry and Metropolitan Police Proceeds of Corruption Unit. Findings in the report include the fact that 36,342 London properties totalling 2.25 sq miles are held by offshore haven companies.

The research – analysing data from the Land Registry and Metropolitan Police Proceeds of Corruption Unit – found that 75% of properties whose owners are under investigation for corruption made use of offshore corporate secrecy to hide their identities.
http://www.transparency.org.uk/publications/15-publications/1230-corruption-on-your-doorstep/1230-corruption-on-your-doorstep

=====
and how many shell companies are registered in companies house in uk —ghost companies

By Richard Smith and Ian Fraser (www.ianfraser.org; @Ian_Fraser)

A Billion-Dollar Bank Fraud in Moldova, and 20,000 Opaque British Corporations
Posted on June 16, 2015 by Richard Smith

http://www.nakedcapitalism.com/2015/06/the-bank-fraud-in-moldova-and-20000-opaque-british-corporations.html

#135 Matt on 06.24.15 at 5:36 am

Out of date medicine is surely the image of pharmeutical field that main gold is to make more income.

http://www.myfreeshipping.ca

#136 bill on 06.24.15 at 5:34 pm

#107 Nagraj on 06.23.15 at 1:04 pm
hey that wasnt bad at all!!