The imbalance

bone modified

It only take s day or two of reading comments here to conclude Vancouver people are not like the rest of us. Talking to them about finding balance and diversification in their lives is like arguing with a disease. Logic ain’t got a chance when it’s fighting chemistry.

The sheer magnitude of YVR’s hormone imbalance was in evidence again Monday when local realtors trotted out the latest numbers. Record sales for March, and a price increase that was ten times the inflation rate. Right. Move along. Nothing to see here.

The key point is that Vancouver now has a 44-day supply of houses, down sharply from just a month ago. This is getting close to that of the GTA, which has three times the number of people and an actual economy. Plus subways. And massive, car-laden expressways carving their way through silly residential areas and wasteful green space.

There were 5,173 sales last month in a region with a population of less than two and a half million people. Compare that to fewer than 8,000 sales in the GTA, where six million souls live. Deals in YVR in March were 56% above the 10-year average for the month. It’s easy to see Vancouver is obsessed even before you start talking about the value of the trades.

The real estate board Frankenumber jumped more than 23% to $815,000, and the average detached house price is now sitting at $1.78 million. More than anything else, it seems that supply and demand are tipping this whole thing into uncharted waters. With just over 7,300 properties on the market, active listings have plunged by 40% from year-ago levels. At the same time, the provincial government has been pumping houses with some serious anti-flipping rhetoric from the premier and a fat holiday on land tax for first-time buyers. This is also the place, remember, where scads of people can put off paying their property taxes and home owner grants are available for people who lives in houses worth as much as $1.2 million. Seriously.

Well, add in a cheap-money policy from the Bank of Canada, plus the federal Home Buyer’s plan, first-time buyer tax credits, taxpayer-funded mortgage insurance to keep rates low for even high-risk borrowers, plus media-fed terror that foreigners are scooping houses and you get this outcome: homes people can’t afford.

See for yourself. Here is what’s become one of the most famous housing bubble charts in the world:

1VAN CHART

As I detailed in a pathetic blog post recently, when supply and demand are out of whack, prices bloat. Risk builds. Smart people sell. These days the supply of new listings has plunged as valuations plump – for classic reasons. (a) Homeowners relish the wealth effect of thinking they’re sitting on a gold mine that every weather-weary Torontonian or Guangdong industrialist craves, which will go up forever, and (b) they understand they could never afford to buy their own houses. So if they sold, where would they go? In a rapidly rising market logic tells us it makes sense to cash in your chips and harvest the taxless capital gain. And move to a normal place. But (as I said) logic is in short supply at the moment.

Conversely, when prices fall (like in Calgary, or Halifax), the number of listings rises – since real estate is seen as a dodgy investment vehicle. More emotion. It keeps people from selling when they should or buying when it’s affordable.

The reasons why Vancouver is parabolic, and now infecting the bewildered burbs surrounding it, is largely irrelevant. The debate on this site about foreign buyers versus local horniness is moot. No government will ban offshore buyers, tax them into oblivion or otherwise erect walls to keep the locals safe. The damage is done. Mortgage debt’s off the chart. Savings have been plowed into houses. Basement suites are ubiquitous. A whole city has embraced a one-asset strategy. You need only look at the chart above to reach two conclusions. It cannot last. And the higher the line snakes, the more precipitously it could fall.

If Vancouver real estate were a stock, puts would be everywhere. The pros would be shoveling it as fast as possible into the hands of newbie investors. Risk would be coming off the table, since the eventual outcome appears certain. Regulators would be doing everything possible to blunt the speculative advance. Owners with windfall gains would be jumping off, looking for the next dog to ride.

But Van people are not like the rest of us. Infected.

Postscript:

This just arrived from blog dog Elaine. Apparently there are pockets of actual humans still alive in corners of the city…

“Just wanted to share my price to rent ratio with you here in Vancouver. We rent a solid 1950s(updated) bungalow for  $2100 a month (yes the whole house). Very similar bung down the street just sold for (you’d better sit down), $1,620,000 (300kish over ask). So our price to rent ratio is ….63!

“Prices like this, we’ll never own a house in YVR (and who cares?). I will cry my way to the bank. We are perfectly happy enjoying the yard, garden and walk to the store. No killer commute from the burbs. Space for the kids. Meanwhile friends are committing financial suicide by taking on huge mortgages for tiny townhouses or condos they will soon outgrow. Why bother? As long as landlord doesn’t sell (could happen but I don’t see a shortage of places to rent in our price range) we’ll be ok sans homeownership. We can always leave in retirement and buy somewhere sane with cash, if prices don’t correct (they will). I have no worries. Just feel sad for young families committing themselves to a lifetime of financial pain, at these absurd prices. Love the blog.”

233 comments ↓

#1 ole Doberman on 04.04.16 at 6:20 pm

First. Booyah!

#2 Rapier Wit on 04.04.16 at 6:26 pm

Perhaps a bit off topic for today’s Garth offering, but still somehow pertinent. Traveling a bit of late and ran across this. It seemed to sum up several salient themes of late.

http://www.indystar.com/story/money/2016/03/30/pete-planner-your-problems-not-your-parents-problem/82366098/

#3 World coming to an end on 04.04.16 at 6:27 pm

Never thought I’d write this, but I actually kind of miss Smoking Man’s posts. Hope his liver didn’t give out…

#4 ole Doberman on 04.04.16 at 6:31 pm

The chart looks similar to gold in 2011 when it went parabolic from 1500 to 1900, then we know what happened. But Garth gold we dont really need, so housing is different. Sheesh im sooo glad i dont live there

#5 the Jaguar on 04.04.16 at 6:41 pm

You’re going to get mail, Garth. It’s that bit about BC folks not being like the rest of us. Try being an Albertan and having them as neighbours. At your feet or at your throat pretty much. We keep the BC interior alive with tourism and good ideas but they hate our guts. That’s where Christie Clark is from which explains her lack of diplomacy towards our province. She might have to temper that now since she needs Alberta to buy hydro electric power from that big new project that will provide renewable energy. Let’s talk pipelines, Christie.
As for the lower mainland, don’t look for unity and common resolve as an approach to their problems. It’s a very segmented society out there. One group in Surrey, another in Richmond and Burnaby. Another one in North Van who just got sanctions lifted. None of them like one another. There all ‘special’, of course.
Thank god there is a mountain range between us.

#6 Bram on 04.04.16 at 6:41 pm

I’m curious:
What do you think would normalized prices look like?
1.78M for detached is pretty insane.
Intrinsically, with speculation aspect removed, would it need to go to 1.2M? 0.8M? Or even 0.4M?

Personally, I find it hard to say.

What would the $400K from the yr 2000 be in 2016?
The inflation calculator says $530K.

Do you think that is where it will crash to?

Bram

#7 joey jo jo on 04.04.16 at 6:42 pm

Thanks for the wake up call Garth. I was at some open houses this weekend here in downtown Van. ~600k condos. Line ups at every one. All the potential buyers were white Canadians fyi.

#8 mishuko on 04.04.16 at 6:42 pm

My heritage is from Guangdong… let me tell you that I’ve talked to my grandparents and they tell me it’s night and day difference between the rich and poor.

Barely middle class just a stupid rich and stupid poor wall.

#9 sockeye sam on 04.04.16 at 6:50 pm

YVR is on sale. These were not locals driving up and down my street looking for a parking spot to go to the open house up the block last week end.Hundreds of people looking at one reno’d house built in the 1930’s on a 44 wide lot and possibly a leaky basement. I’m not even going to mention where I think their from but it ain’t Mars. Getting to chicken sh*t to even go there. Use your imagination.Some of the most beautiful iron parked outside.Like going to a car show. What ever, pump it up. I guess?

#10 Bob Dog on 04.04.16 at 6:51 pm

Yet another highly educated and experienced software developer I know has officially abandoned Canada for the USA. Lets face facts. The situation we are all facing is the result of the obscene policies of our own corrupt government. I have never in my life felt less patriotic. I no longer have any love for Canada and would never serve this country in any way.

Is this the goal of our government. To force out he best and brightest in favour of money laundering criminals.

When will justice be served. Our elected officials and lawmakers are guilty of crimes that merit punishment beyond death.

#11 Madcst on 04.04.16 at 6:54 pm

…. Crazy…. I give up… Saving all these years was foolish….

#12 Andres on 04.04.16 at 6:56 pm

Hi Garth, scary chart. Do you know the debt to income ratio of Vancouver area? Is it greater than the rest of the country?

Thanks for your work.

#13 TurnerNation on 04.04.16 at 6:57 pm

Attn. new blog dogs. The following user names are available. Reserve yours today.

Republic of Dollarama
Atsa the Boy
Snaggle Toothed Millionaire
Kim Long-Branchidian
Schlock Picker
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Ingot We Trust
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I want a Pecuniary Peony
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————–

Reserved:
Blog Dog Poloz

#14 peterpaul on 04.04.16 at 7:02 pm

Locals can’t afford those homes, who’s buying them then?

#15 Panhead on 04.04.16 at 7:04 pm

Oh yeah … we’re special out here all right … speaking as an ex East Vanner …. love living in the burbs and skytraining it into Van every so often for a fix. Or walking onto the ferry for a Vic fix. Great place to call home …

#16 YVR on 04.04.16 at 7:05 pm

There lies the problem. To continue this Ponzi scheme, YVR must immigrate more people and allow offshore money to pole into RE.

It’s not locals who are crazy. It’s the politicians. And there going to destroy YVR.

31 shootings in Surrey in 90 days. Wait a few more years. This place gonna be a Rio de Janero.

#17 Silent the people on 04.04.16 at 7:06 pm

Well put Garth! The train is nearing the station and what’s going to happen is obvious! I hope the young
will have time to recover and the old will have stayed out!
I just wish the governments would pay a price but
they will have left the station to gold plated pensions and
“I told you so” observations…..

#18 YVR on 04.04.16 at 7:08 pm

Post 5:

Politicians who are corrupt (take bribes or profit from policies) should face life in prison.

The working class has to rise up and say enough is enough.

Look at the Panama papers scandal, why am I not surprised. Heads need to roll. All of them. Let’s hope Anonymous can take a leading role.

#19 Vanre is on fire on 04.04.16 at 7:14 pm

And u would think the job market would be the same… Well no companies are actually firing people in YVR , talked to 2 of my friends both p.eng. recently laid off and cannot find a job. Will be realtors soon along with the rest of us

#20 Ground Hog Blog on 04.04.16 at 7:15 pm

You may not have noticed but you wrote a blog entry yet again about YYR RE.

#21 S.Bby on 04.04.16 at 7:15 pm

I wonder if Peter Brown was deferring his property taxes? $80,000/yr. House sold in about two weeks for $31.1 million.

http://www.vancouversun.com/business/canaccord+founder+peter+brown+point+grey+mansion+sells+million/11824153/story.html?__lsa=6202-e347

#22 sockeye sam on 04.04.16 at 7:16 pm

#14 peterpaul

You are absolutely 100% correct that locals can’t afford these homes.Please feel free to come over to the hood (Dunbar)and see who’s buying them. Then you can post who’s buying them.
Pretty bloody sad that I’m not about to tell ya!

#23 Balmuto on 04.04.16 at 7:16 pm

More signs that we’ve lost our minds:

http://www.financialpost.com/m/wp/blog.html?b=business.financialpost.com/news/economy/canadians-bursting-with-confidence-because-they-have-faith-in-their-housing-market

#24 Victoria Real Estate Update on 04.04.16 at 7:20 pm

# 197 Move on VREU

“And no government, whether provincial or federal, and no political party, will ever touch the tools that facilitate this global capital scourge.”

… And HAM is the only reason Vancouver house prices have been rising… And this has made Vancouverites flock to Victoria to buy real estate… And this won’t stop because “no government will ever touch the tools that facilitate this global capital scourge.”… Therefore, house prices in Victoria will never stop rising…

Has anyone ever called you a nutbar?

Just asking.

That sums it all up for you. You keep arguing with me based on your whacky assumptions.

I’ve exposed that the basis of your argument for higher house prices forever in Victoria is the sort of thing an extremist would come up with.

You should start your own nutbar blog.

#25 IKnow on 04.04.16 at 7:25 pm

Infected with the Hong Kong flu

#26 edgy in Nanaimo on 04.04.16 at 7:26 pm

FYI Nanaimo should not be on the list of “normal” places to move to.

Fun facts about Nanaimo:
1. 2/3 people have smoked too much pot and brain cells are depleted (see # 3).

2. The climate consist of a) mold and moss growing season, b) sand-storm like tree pollen season, c)everything turns brown and dies season, and then back to a.

3. Driving rules in Nanaimo are unique: you may not put your turn signal on when turning–only after turning, especially after cutting someone off, then you can put your signal on to indicate what you just did. This is likely due to fact #1.

4. Most well-to-do businessmen got their start growing pot ( a recent fire in a heritage building in DT Nanaimo was likely caused by grow op in the bsmt).

5. Don’t catch crabs in the harbor–they grow big only because of the brown trout they eat (boats in the marina discharge effluent…)

#27 IKnow on 04.04.16 at 7:30 pm

#16 YVR
“31 shootings in Surrey on 90 days…”

———————

Keep at least part of greater Vancouver ‘affordable’

#28 common sense on 04.04.16 at 7:34 pm

All I can say is WOW…just when you think the YVR housing market couldn’t get nuttier it goes up another notch..

It’s not even an 11, it’s more like a 36.

#29 acdel on 04.04.16 at 7:36 pm

All I can say is “yep”, good blog Garth!

#30 Gregor Samsa on 04.04.16 at 7:36 pm

Quote of the day for you:

“There are many ways to create economic suicide on a national level. The major way throughout history has been by indebting the economy. Debt always expands to reach a point where it cannot be paid by large swaths of the economy. That is the point where austerity is imposed and ownership of wealth polarizes between the One Percent and the 99 Percent.

Today is not the first time this has occurred in history. But it is the first time that running into debt has occurred deliberately, applauded as if most debtors can get rich by borrowing, not reduced to condition of debt peonage.”
— Michael Hudson, “Killing the Host”

#31 Linda on 04.04.16 at 7:37 pm

I am deeply impressed by the power of the small dog holding the very large bone:) Bet that dog is a fierce defender of its territory…..

#32 West Coast on 04.04.16 at 7:38 pm

Of course everyone over 55, sitting on multi-million dollar properties in YVR, is deferring their taxes……..Do you really think we have the money to pay property taxes – OMG!!
http://blogs.vancouversun.com/2010/03/06/property-tax-deferral-might-or-might-not-work-for-you/

“General B.C. Property Tax deferral info:
• defers property tax payments on certain properties until property is sold;
• modest fees and simple (non-compounding) interest are charged;
• previously open to:
o seniors (aged 55 and over);
o widows and widowers (at any age);
o persons with disabilities (at any age, if meeting certain criteria);
• temporary measure for BC homeowners with at least 15% equity in their home who claim “financial hardship” was allowed to defer 2009 and/or 2010 property tax;
• new proposal extends deferral opportunity to households “supporting” a dependent child under age 18 (“supporting” is broadly defined, e.g. paying child support for child not living with you);
• more information is available on BC government’s website.

Time to view the old roller coaster video folks………..remember the one?
https://www.youtube.com/watch?v=hqOn5XEm86A

#33 crowdedelevatorfartz on 04.04.16 at 7:38 pm

@#21 S. Bby

When old school multi millionaires dump their properties for cash…..time for people to pay attention.
Purchased in 1983 for 2.5 million. On the block today for 31.5 million.
Even a multimillionaire knows when its time to cash in and take the money.

#34 common sense on 04.04.16 at 7:41 pm

#5 jaguar

I always thought the world revolved around Toronto.

Now I know.

Thank you.

#35 acdel on 04.04.16 at 7:43 pm

#3 World coming to an end

Don’t worry about Smoking Man; he is busy writing the last chapters of his book. I cannot wait to read on how Shirley Valentine fits into all this. :)

#36 Smoking Man on 04.04.16 at 7:43 pm

#3 World coming to an end on 04.04.16 at 6:27 pm
Never thought I’d write this, but I actually kind of miss Smoking Man’s posts. Hope his liver didn’t give out…

Flu bad one.

Need a few more days

#37 Notorious on 04.04.16 at 7:48 pm

“If Vancouver real estate were a stock, puts would be everywhere. The pros would be shoveling it as fast as possible into the hands of newbie investors”

As if S&P weren’t as overvalued as YVR.

Phony job numbers, trillion dollar debts, stagflation, bail ins and EU on the verge of a collapse.

It’s about time this fake dirty world resets itself.

#38 A Man on 04.04.16 at 7:48 pm

Agree to most of your facts and saying except foreign buyer; don’t have access to any data, all my calculation are based what i see in my office most of the time. As banker, noticed huge percentage of clients are foreign tourist bringing $250000+ thru wire transfer to put down payment of the investment property and going back to their world as don’t have longer visa to stay. Huge impact on locals….

#39 Cowpoke on 04.04.16 at 7:49 pm

Are prices catching up to the money supply??

#40 When will they raise rates? on 04.04.16 at 7:52 pm

When Garth says “parabolic”, he’s not even exaggerating… That chart is in fact, a parabola. I’m now rooting for it to go higher. Way higher. At this rate of price increase (y=x^2), one can only imagine what the prices will reach for a piece of crap detached shack in 1 – 2 years.

3 million? 4,5,6 million? 10 million? LOL

This is epic. So will the crash be.

Got the popcorn ready. I can’t wait to laugh at these fools – Chinese or Canadian, doesn’t matter – the tears will be quite a joy to behold when this sucker comes crashing down and the morons are completely ruined.

These people are freaking IDIOTS.

#41 Chaddywack on 04.04.16 at 7:54 pm

Does this unexpected upturn in prices lately change your prediction of a correction followed by slow declines and flat values for years. In other words, is a true “crash” on our way?

#42 polecat on 04.04.16 at 7:56 pm

It must be exhausting Mr Turner.

#43 sanddancer on 04.04.16 at 7:58 pm

Everything you say, Garth, makes perfect sense and has done so for the past 4/5 years or so yet prices keep climbing. Recently at almost vertical levels as your graph shows !!
It looks more and more like low interest rates are here to stay for the forseable future, the likelihood of seeing ” historical normal ” rates ( say 5 -7 % ) simply will not likely happen for many years.
As the average family/wage earner can simply not afford these prices, and had not been able to for some time, then there must be other reasons why these prices keep climbing.
So long as capital keeps leaving China to be placed in ” safe haven” countries and assets then prices will continue upwards.
The effect on the GVRD has been greater than the 5% reported, time will show this to be true.
This is not a racist view or a complaint, simply a observation from someone who keeps his eyes and ears open to what is happening around themselves.
It would not take much of an effort to look into this and find the truth behind the “stories ”
Thx

#44 crowdedelevatorfartz on 04.04.16 at 7:58 pm

Garth .
Just curious. While I know you dont have a minute of time for gold pumpers.
Do you consider a “position” in the yellow metal ( or for that matter oil?) worth while in a balanced portfolio? 5% ?

Too much. Own the TSX in an ETF and you have all the exposure you need. — Garth

#45 Bla bla bla on 04.04.16 at 8:00 pm

Vancouver & it’s people do primarily suck big time. Overated city in so many ways. Shit weather. Way to expensive. Pussy hockey team to boot. List goes on…

#46 Terrence on 04.04.16 at 8:01 pm

It’s boat loads of cash fleeing from Europe & Asia putting there money anywhere that offers the best return!North America is the place to be to invest right now, the smart $ has been here for quite a few years buying all real estate in VAN&TO! Truth is Garth will be right 1 day in the next 3 to 5 years! In the meantime look for housing to keep climbing into the stratosphere and the USA stockmarkets also to keep skyrocketing DJI will hit lucky 21000 or more very soon so stay invested & stay on the wild ride, just know when to get off! Timing any market is tuff as hell , but Garth’s info on real estate will be 100% correct!

#47 jess on 04.04.16 at 8:01 pm

18 YVR on 04.04.16 at 7:08 pm

Lori Wallach, the director of Public Citizen’s Global Trade Watch:

“Nearly five years after the U.S.-Panama Free Trade Agreement vote, the Panama Paper leak proves once again how entirely cynical and meaningless are the lavish promises made by American presidents and corporations about the economic benefits and policy reforms from trade agreements. The top promise about the benefits of the U.S.-Panama FTA was that it would end Panama’s financial crime secrecy protections and tax haven and money laundering activities, but this leak shows that, if anything, Panama’s outrageous financial crime facilitation has intensified while the FTA’s investor protections and official U.S. stamp of approval has increased inflows of dirty money to Panama.”

… usa free trade deal with panama

final text
https://ustr.gov/trade-agreements/free-trade-agreements/panama-tpa/final-text

Panama is Canada’s second-largest export market in Central America. Bilateral merchandise trade reached USD240m 2011, up 10.1% on the previous year.

Ed Fast, Minister of International Trade, said of the deal: “Panama is one of the fastest-growing markets in the Americas and a strategic gateway to Latin America. This agreement is a key part of our government’s plan to open new markets to increase Canadian exports as part of the most ambitious trade expansion plan in our nation’s history.”

http://www.tax-news.com/news/Canada_Panama_FTA_Receives_Royal_Assent____58831.html

Treaty Update: Panama – Canada
19 March, 2013
Panama and Canada signed a TIEA on March 17, 2013

=========

#48 jaybee on 04.04.16 at 8:01 pm

This can’t end well. Toronto is over-heated, but Vancouver is just insanity.

#49 Doug t on 04.04.16 at 8:03 pm

#37 – spot on – the world economy is a shit show of a joke – GREED to the extreme has destroyed any sense of fairness and human compassion – just look around the world, the corporate elite, politicians and banksters of the world have created one hell of a powder keg. The match could be lit at any time and then we all will pay

#50 sockeye sam on 04.04.16 at 8:08 pm

#38 A Man

So is what you are saying is they fly over to greet the cash they have just wired, scoup a Vancouver property and now they have to leave because the visa is about to expire and the house stays vacant?That’s what I thought. So do you happen to know what the future plan is for the vacant home that sits here sometimes for years and is getting beaten by the weather?

#51 Mazochist ritual on 04.04.16 at 8:08 pm

This is becoming a mazochist ritual.

Is there really nothing else to discuss when it comes to money and investing?

This is becoming as retarded as real estate in Vancouver.

#52 bigtowne on 04.04.16 at 8:11 pm

Tourist season is just around the corner here in the belly-button of Canada…Taronto. I feel a debt is owed to Garth for his enduring financial info and care to us heathen citizens so here is your T.O. driving primer for visitors:

Fellow citizen visitor please note when you are on the by-ways; roads; and highways attempting a lane change in the GTA…(you probably imagine a smooth easy lane change). No way, Jose your fellow T.O. drivers will absolutely under no circumstances allow a smooth lane change as it challenges and offends their sense of who they are. Toronto people believe courtesy on the road is an unseemly and bad way to act so be prepared they will block you from Hamilton to Whitby if necessary.

So there you go Canada now you can come; enjoy; visit; spend money…but you cannot change lanes ever.

#53 preet89 on 04.04.16 at 8:11 pm

DELETED

#54 john on 04.04.16 at 8:12 pm

I guess the host and great many of his followers can’t understand the Vancouver RE phenomenon. It is happening in other cities around the world. Sydney, Melbourne, Toronto, San Francisco, Shanghai (houses up 60% in six months) .
It is the great migration of the wealthy asians from Russia China India and others with corrupt and oppressive regimes to the perceived “safe” countries with good standard of living, no religious problems (yet) like Europe, and not many restrictions.
It is not going to stop anytime soon.
In the passed, countries were conquered by wars, now it is by economic might.

Nobody is conquering us, dude. — Garth

#55 Silver on 04.04.16 at 8:15 pm

this will be fun.
try and tell someone in downtown yvr that property prices could go down…. or ham is not the problem they are.

you get complete disbelief…. that you could be so stupid…
especially the educated university crowd…

as a side note…
A very skilled shop i’m doing a side job at is down 10 welders since I’ve been there… no new jobs on the books. this is a very well rated and respected iso standards shop. abrupt and sudden. i feel for them.

they do real work, not apps…

Silver

#56 pwn3d on 04.04.16 at 8:33 pm

lol, every month another massive gain in YVR and YYZ and some fool keeps going around saying it’s been going down for 3 years.

comedy.

#57 acdel on 04.04.16 at 8:35 pm

#51 Mazochist ritual

How about the Panama endearment funds for the one’s that preach do as I say; what are your thoughts?

I bet that little pooch in the pic would not put up with that..

#58 deaner22 on 04.04.16 at 8:36 pm

The panama papers will provide more evidence for your favorite argument as to why Vancouver house prices are so high.

Take a five minute look at the list of Canadians implicated in the panama papers, here: http://offshoreleaks.icij.org/search?country=CA&q=&ppl=on&ent=on&adr=on

Guess which ethnicity is ~36% of the list or about 8 times over-represented? (I know this ethnicity guessing is highly inexact, but the disparity is too big to miss, unless one is missing it on purpose). Guess which province is 2x overrated?

Does Canada share tax info with China? It seems pretty consistent with the theory that Canada’s strategy is that of a tax and privacy haven for wealthy Chinese.

#59 Sebee on 04.04.16 at 8:42 pm

Seriously, where else can that chart go? No I mean it, seriously. Can you say Felix Baumgardner?

#60 BOOM! on 04.04.16 at 8:43 pm

Dear Pathetic blog:

Tomorrow is ‘Primary Day’ here in the state of WI. You know, the land of cheddar heads and beer. Tomorrow we get to select our next potential presidents from a motley group of promise makers. Some have even had prior political experience running a state, or as legislators, and failed businessmen.

I know where my vote will be cast, also for who I shall cast a ballot in lesser races. Surprisingly, after discussions today at breakfast, and lunch, I feel I may be in a decided minority.

Thankfully, it is merely a primary. Unfortunately, we must endure almost eight full months of lies, dam lies, and statistics until the fateful day when maybe 60% show to cast ballots for their choices.

Ya gotta wonder if all the wars were worth fighting for THIS?

#61 DON on 04.04.16 at 8:44 pm

#9 sockeye sam on 04.04.16 at 6:50 pm

YVR is on sale. These were not locals driving up and down my street looking for a parking spot to go to the open house up the block last week end.Hundreds of people looking at one reno’d house built in the 1930’s on a 44 wide lot and possibly a leaky basement. I’m not even going to mention where I think their from but it ain’t Mars. Getting to chicken sh*t to even go there. Use your imagination.Some of the most beautiful iron parked outside.Like going to a car show. What ever, pump it up. I guess?
***********************

It could also be that the cars were bought with housing leverage. But I do understand your point of view. I am sure there is a little bit of every type of real estate scenario occurring in Van, joint mortgages, Foreign Money, trendy locals outdoing the Jones etc etc. Of all these scenarios have come together to form the perfect storm.

The idea that most home owners can’t sell for fear of not being able to own the same digs in a similar or the same neighborhood is most likely bang on. In Van it is all about living in the trendy areas close to the action.

#62 Rick on 04.04.16 at 8:44 pm

You’re right Garth, nobody’s conquering us. We are just rolling over:(

#63 takla on 04.04.16 at 8:47 pm

Whats the chance your MLA is a home owner??Ya thought so
https://www.google.ca/url?sa=t&rct=j&q=&esrc=s&source=web&cd=1&cad=rja&uact=8&ved=0ahUKEwiwkeOJovbLAhUUzmMKHVFmB68QFggbMAA&url=https%3A%2F%2Fwww.leg.bc.ca%2Flearn-about-us%2Fmembers&usg=AFQjCNFnb9ONAH7LiRi8PRExMTrQxAJYkQ
Nothing and I mean nothing will change when polititions have a vested interest in high realestate prices

#64 Westvan on 04.04.16 at 8:57 pm

” This is getting close to that of the GTA, which has three times the number of people and an actual economy”

What’s so different about torontos economy. Last time I checked BC had more growth than Ontario… And Toronto sucks, who wants to live there? That’s your problem Garth your an old east coast guy who still thinks Toronto is cool. Haha.

#65 Darren on 04.04.16 at 9:00 pm

“Men, it has been well said, think in herds; it will be seen that they go mad in herds, while they only recover their senses slowly, and one by one.”

#66 salonist on 04.04.16 at 9:08 pm

Nobody is conquering us, dude. — Garth
the invader immigrant…George Jonas

#67 Mars Cheung on 04.04.16 at 9:09 pm

They can determine the number of Nasty Air B&B’s with anecdotal info from Craigslist, but can’t make heads nor tales out of the tax documents and land transfer stats in governments hands to determine the number of HAM?

http://www.vancouversun.com/news/local+news/rental+housing+residents+says+vancouver+councillor/11829126/story.html

Check your backside for a new tattoo that says “I’m stupid”. Because that’s what the deniers think of you. Now go back to sleep, you don’t need to know.

#68 Vic gal on 04.04.16 at 9:10 pm

Next to be hit might be the renters. We live in Victoria and our landlord is now selling to cash in… Might be a challenge even to find a house to rent for our price range ($150o /month with utilities) in this neighborhood (Fairfield). Thinking renters may be next ones impacted.

#69 WUL on 04.04.16 at 9:16 pm

Ahh, spring. The boys of summer start the regular season, the Masters, Lord Stanley’s beer stein and yoga pants in Ft. McMurray.

My landlord listed this joint a month ago. An OK yurt in an OK ‘hood. 2 showings.

Silence.

#70 greyhound on 04.04.16 at 9:16 pm

“If Vancouver real estate were a stock, puts would be everywhere. ” Interesting that with apacolyptic predictions for Van real estate, not a single post or comment on how to make money on the coming trend change.
As far as I can tell it’s not possible to buy puts on real estate, but one could buy them on listed Van RE outfits, & home improvement companies. I’ll look into specific ideas and comment again. In the meantime, any other suggestions?

#71 preet89 on 04.04.16 at 9:18 pm

There is no other city on the west coast of Canada like Vancouver. It is one in a million. People WANT to pay millions to live here. There is no more land being made. In 2020 people will be looking back wishing they bought in 2016 and made another $500,000 to $ 1,000,000 on their property. EXACTLY the same as the people in 2012 are saying NOW!!!

It virtually costs nothing to borrow for a house and won’t for a generation or more. Canada/Vancouver now is not what is was back in the 80’s or earlier. Oldies need to stop comparing now to then.

The oldies NOW are the same ones who don’t know what a Tesla car is. They are out of touch with the new generation of living. We order our cars, not get scammed from a stealer dealer. You can’t compare your non-tech lives with the new way of living.

I can only imagine reading this blog in the early 1900’s when the oldies then would be saying that the motor car is no good compared to the horse and buggy.

Face it, oldies just don’t get it.

#72 Robert on 04.04.16 at 9:19 pm

#61. Garth is right, this is not invasion but colonization. Talk to any First Nations neighbors about it, they are intimately familiar with the net result.

#73 john on 04.04.16 at 9:19 pm

The Europeans came to North America and displaced the locals (Indians) out of the good farm land by force, so they can work on it. Now wealthy people come from numerous very populous countries (don’t need to work) and buying the properties in the choice locations and force the locals out. Different means the same end result.

#74 DON on 04.04.16 at 9:25 pm

#26 edgy in Nanaimo on 04.04.16 at 7:26 pm

FYI Nanaimo should not be on the list of “normal” places to move to.

Fun facts about Nanaimo:
1. 2/3 people have smoked too much pot and brain cells are depleted (see # 3).

2. The climate consist of a) mold and moss growing season, b) sand-storm like tree pollen season, c)everything turns brown and dies season, and then back to a.

3. Driving rules in Nanaimo are unique: you may not put your turn signal on when turning–only after turning, especially after cutting someone off, then you can put your signal on to indicate what you just did. This is likely due to fact #1.

4. Most well-to-do businessmen got their start growing pot ( a recent fire in a heritage building in DT Nanaimo was likely caused by grow op in the bsmt).

5. Don’t catch crabs in the harbor–they grow big only because of the brown trout they eat (boats in the marina discharge effluent…

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

Bang on!

you can also add that it pours in Nomindo, much like Vancouver. It can be sunny on either side of Nanaimo but the city itself gets pounded.

One other thing, the hard drugs rule in Nanaimo.

Still not Surrey though.

#75 A Canadian Abroad on 04.04.16 at 9:30 pm

Couldn’t pay me to live in Vancouver. Been there dozens of times before. 320 days of rain. 20 days of sunshine. Drug problems. Homelessness. Dirty streets.

No thanks!

#76 Panama papers and CRA on 04.04.16 at 9:32 pm

Let ’em eat cake eh Garth?

Some of the world’s most successful and powerful people have private stores of wealth. Wow. Who’d have thought? — Garth

That is quite a remarkable statement to go on record from the former head of the Canadian Revenue Agency.

You got something against private wealth? — Garth

#77 DON on 04.04.16 at 9:33 pm

#36 Smoking Man on 04.04.16 at 7:43 pm

#3 World coming to an end on 04.04.16 at 6:27 pm
Never thought I’d write this, but I actually kind of miss Smoking Man’s posts. Hope his liver didn’t give out…

Flu bad one.

Need a few more days
***********************

Take care it is a nasty one, the worst hangover feeling I have had in years…lingers on. Now in beautiful BC one can see the the ground move as the pollen count is up. Sometimes cold weather is good. People out here went right from the flu to allergies.

#78 BOOM! on 04.04.16 at 9:37 pm

#71 Preet89

Before you plunk down your $1,0000 deposit for the new TESLA unbuilt yet, bought on sight, clueless…
best review reliability ratings on their existing products.

“Much worse than average”…. similar to Chrysler-Fiat’s bottom score. As for this fossil, I’ll wait and see what a 2 yr old one sells for, if it is similar to Detroit Iron, should be able to buy one for HALF the Monroney sticker.

What, Preet, don’t know what a Monroney sticker is, Google it big boy, and understand WHY it was developed.

Really, nothing “new” here, just the young thinking THEY invented the world. (yawn)

M64WI

#79 Bruce on 04.04.16 at 9:39 pm

The big problem is, the average detached price of $1.78m is far less than a 1000 sf condo in some cities in China.

If it’s possible, many people want to trade a YVR house with a Chinese small condo.

The Chinese government is fighting the efforts of some Chinese people.

#80 Brydle604 on 04.04.16 at 9:39 pm

Preet 89

I am 70,
I am on the Tesla Model 3 List,
Are you?
Was in the Real estate business as a Salesperson and Property Manager late 70 and 80s.
Have been in the computer business.
I have seen it all, and yes Real estate can and will go Down in value.
Presently involved in the TSX Junior Resources as CEO and CFO of several public companies, a tough business to be in right now, but it will have its day again.
Us old farts are not dead yet!

#81 George Martin Sr. on 04.04.16 at 9:40 pm

“Yet another highly educated and experienced software developer I know has officially abandoned Canada for the USA. Lets face facts. The situation we are all facing is the result of the obscene policies of our own corrupt government. I have never in my life felt less patriotic. I no longer have any love for Canada and would never serve this country in any way.

Is this the goal of our government. To force out he best and brightest in favour of money laundering criminals. ”

The ‘Talent Drain’ is a flood. The flights south are fully booked. Young Canadians are quickly realizing that the future does not mean a life in Canada. But, my little escapee’s, I can promise you that life is so much sweeter living working elsewhere, it’s like a blanket has been thrown over your heads, and when it comes off, a whole new world appears.

Buying a house in the US is a breeze and cheap, with the disposable income you have from not paying EI and CPP along with paying half the direct taxes your education starts to pay off immediatley. Ron Carrick posted a plan for millenials yesterday that had you working until you were eighty to get the things your parents had. With one airline ticket you can have all that now. I

t’s Canada’s Trudeau Liberal that are holding you back. What are you waiting for. Either live with years of impoverished misery and high taxes going to pet projects or get out and live, up to you.

#82 Toronto is Cool on 04.04.16 at 9:41 pm

And Toronto sucks, who wants to live there? That’s your problem Garth your an old east coast guy who still thinks Toronto is cool. Haha.

Nice try, the #1 choice destination of new Canadians is Toronto: why? they don’t have to learn French and
Vancouver has too many junkies, pot heads, winos, lefties, ‘seekers’,hippies, spiritualists,healers, dreamers, new agers, life coaches, DUI politicians, aroma therapists, etc….
the only good thing about Vancouver is that they take Canadian dollars at par

#83 learningfromyou on 04.04.16 at 9:50 pm

#10 Bob Dog on 04.04.16 at 6:51 pm
>The situation we are all facing is the result of the >obscene policies of our own corrupt government.
>I have never in my life felt less patriotic. I no longer have any love for Canada and would never
>serve this country in any way.

Thank Garth for this post, as always.
I think I will give up reading the posts because sometimes I take them too personal and they hurt me personally from time to time.

I was waiting for my daughter to come out from the school when I read the blog above. I did not pay for her school. I do not know if I should write the following, I just promise it will be my last post for this blog.

Right away I remember the past when I was a professional working for banks and leaving besides a 200 pounds pig, imagine the first floor on a building, a brick wall, the window and on the other side the pig and the smell emanated from it the whole night, on top of that in the room I used to sleep the pig’s owner prepared the foot for the animal, the brick wall became hot and by 1am I was able to sleep. It was a friend who provided me that place to sleep in order to save my work in the city.

Imagine walking to the ocean, in despair, thinking about the way of leaving that prison without walls, and telling God that in any circumstances you blamed him for your situation, a place where you promised yourself to never have kids or create a family to suffer what you were suffering, dark times come together with dark thoughts.

All the sudden, Canada gives you a blue letter saving my life accepting me here if that prison allowed me to leave, like a little light at the end of a freaking dark tunnel.

Imagine taking a plane in disbelief expecting to be pulled out before taking off because of a missing signature on a paper or a just a misunderstanding, still in the air and considering the possibility of the plane returning to drop you off back in the prison.

Canada is the country of my kids, it also allowed me to become a citizen, like anybody else I get my passport and travel the world if I want.

How come I won’t do anything valuable for this country?

I’m disagree with the conservative and liberals, I do not think that any party represent my interests today, but the parties are not Canada.

BUT

I cannot reflect my political disagreement against the country that saved my life.

Like everyone of us, we have a dark side and a bright one, depending on the circumstances we show one or another, it happens in every minute of our life.

I have nothing against anybody, I just hope that without knowing each other one day we can meet doing something great for this country, the country of my kids, the country that saved my life, one day we can meet showing our bright sides together for something.

Garth, I will keep reading your blog forever, in silence.

#84 everythingisterrible on 04.04.16 at 9:51 pm

#5 the Jaguar
Cry me a river bud. lose that chip on your shoulder all that animosity is in your head. Who’s pushing pipelines at 35$bb. no one wants tar sands oil with the world drowning in sweet crude. All the alberta trades guys are gonna be coming over to peace river to work on LNG projects and we will all get along together just like before.

#85 White Crock BC on 04.04.16 at 9:51 pm

RE: BC tax deferment.

It’s a bit of a joke. I take advantage (why not?) but it should really be “means tested”

#86 acdel on 04.04.16 at 9:54 pm

#71 preet89

Then by all means ignore what Garth has been saying and continue to buy. Don’t stop at one; buy two or three or four for all I care; just leave your parents (hopefully they are still with you) out of it, let them enjoy their retirement in peace, enjoy your riches or downfall!

#87 John on 04.04.16 at 9:56 pm

#71 preet89

That was funny. Vancouver one in a million? Try exploring the world a little. You’ll find much nicer cities than Vancouver

#88 vic guy on 04.04.16 at 10:02 pm

BC will be of two classes.
The have.
The have not.

#89 BOOM! on 04.04.16 at 10:07 pm

#36 Smoking Man

Get Well soon! Not as much color here when you aren’t posting. Hope you beat this flu, hear it can get real nasty.

Take your time, need you in full form when you return.

M64WI

#90 preet89 on 04.04.16 at 10:08 pm

Umm, about the Tesla. Consumer Reports rate the Model S it as the BEST CAR EVER — E V E R ! ! !

You can’t buy a Model S for 1/2 price anywhere.

What other car makers IMPROVE their cars AFTER they sell them like Tesla does with software improvements!!

Elon Musk should, no has to get a Nobel Prize for what he has done with Tesla.

What other car company has hundreds of THOUSANDS of orders BEFORE the car has even been made???

Tesla and Apple should join forces!!!! The best two companies in the WORLD!

#91 pathcontrolmonk on 04.04.16 at 10:08 pm

DELETED

#92 WalMark of Sadkatoon on 04.04.16 at 10:10 pm

yvr. best time to sell. ever

#93 ulsterman on 04.04.16 at 10:12 pm

Madcst: “…. Crazy…. I give up… Saving all these years was foolish….”

Yes it was. The house i rent has appreciated $2,000/week tax free (it’s in his aged parents’ names) for the past five years. Even blog dogs on this site with their amazing buy-low, sell at the top stock-picking abilities cannot keep up with this perfromance. It is utterly hopeless.

As money escapes China at an ever-increasing rate and interest rates plateau or creep up at a glacial pace, there’s little to cause a price correction. Anyone who has sat on the Vancouver sidelines for 5+ years needs a 50%+ correction just to get back to the point where they thought prices were too high!

In the intervening years, most house renters have rented homes with 1980’s bathrooms and kitchens, and have little security of tenure, waiting for “the call”.

#94 Cory on 04.04.16 at 10:17 pm

4.04.16 at 6:51 pm
Yet another highly educated and experienced software developer I know has officially abandoned Canada for the USA. Lets face facts. The situation we are all facing is the result of the obscene policies of our own corrupt government. I have never in my life felt less patriotic. I no longer have any love for Canada and would never serve this country in any way.

Is this the goal of our government. To force out he best and brightest in favour of money laundering criminals.
————–

Sadly, I find myself thinking the same way these days. not a leader anywhere to be seen at any level of government these days. Only power hungry salary seekers who would never make that kind of income in the real world. Sickening but we only have ourselves to blame. The people hold the power, not politicians. We just don’t exercise that power because, well, we’re Canadians and passive to say the least. Politicians know it and rely heavily on it.

The whole BC / Van real estate thing is an embarrassment, as I have said before. The fact no politician has the guts to stop such an illusion says it all. And, just who is lending these stupid amounts of money to such stupid people? must be the credit unions. I am well aware of banks killing deals because the “appraisals” are too high and the banks are saying they want the diff in cash or they won’t lend. Rightfully so if you want to overpay for something then it should be your own skin that’s in the game, not mine. I just can’t see OSFI, and chartered banks doing such reckless lending CMHC or not. Since credit unions are provincially regulated, it seems logical credit unions are the culprits in this ridiculous hosing (not a typo) market since Christy wants the illusion to continue…..you know, to retain power. Same old same old.

If governments step in to save these dummies when it crashes that will be the end of my already waning love for Canada. I am already sick of subsidizing debtors via low interest rates. I am not willing to subsidize stupid reckless behavior so someone can live in a house they clearly cannot afford.

#95 Cory on 04.04.16 at 10:18 pm

*I don’t mean OSFI is a lender but they do regulate the chartered banks, so they’d be just as guilty in my opinion.

#96 Brian Ripley on 04.04.16 at 10:25 pm

“It’s easy to see Vancouver is obsessed” Garth

My Double Double chart looks for the next SFD price doubling sometime this year:

http://www.chpc.biz/vancouver-housing.html#Double

Apparently credulous buyers cannot say no to shorting cash in exchange for a wasting and negative yielding asset.

#97 WUL on 04.04.16 at 10:25 pm

LEARNINGFROMYOU:

Your comment was beautiful. I would feel blessed to have you as a neighbour.

Yesterday, here in McMurray, I met Tony from Kosovo. Smiling and laughing he recounted the unimaginable horrors visited upon the people in the former Yugoslavia by the monsters in our midst. He is now laid off from his heavy equipment job in the oil sands and is taking his happy family to Lethbridge to seek greener pastures.

After our conversation and handshakes (and wow,did he have a grip), I resolved to never complain again.

Best wishes and good luck.

#98 Bottoms_Up on 04.04.16 at 10:28 pm

#6 Bram on 04.04.16 at 6:41 pm
————————-
Draw a trend line….appears to be about 900k. Could shoot below that as the pendulum swings.

#99 pathcontrolmonk on 04.04.16 at 10:33 pm

Deleted? Really? Let’s try again, in the recently released Panama Papers China/HK led the world in hidden, untaxed assets. When local YVR buyers try to compete with such dirty money, the outcome is reflected in those charts. Meanwhile, between 2004-2014 developing economies lost $7.8 trillion in illicit capital outflows.

#100 For those about to flop... on 04.04.16 at 10:36 pm

I wasn’t going to post today as Bitter Much is giving me diarrhea ,but I just got a phone call to go and work at a guys house that has balance.

The client is a former NHLer and used to be on multimillion dollar a year deals but his house is quite modest and last time I worked there I asked him after the renovation was he going to sell , thinking that he was upgrading and he said ” this house is all we need,plus I don’t want all my money tied up in real estate”.

I am looking forward to seeing him tomorrow.People with money but with a down to earth attitude are the best people to work for.

////////////////////////////
Boom , I left you a message on the previous page.

M41BC

#101 Sky HIgh on 04.04.16 at 10:41 pm

All around me on the westside of YVR, houses sell over asking, many are vacant or ready for demolition.The purchasers appear to be off shore, ie, don’t speak english
Where will this end and what will it look like?

#102 Crabby on 04.04.16 at 10:43 pm

Garth, what do you think of this study: http://www.scmp.com/comment/blogs/article/1929324/study-reveals-awfulness-canadian-investor-immigration-income-tax

Do you think that the investor program is fanning the flames of the HAM and propelling the housing prices? These immigrants are considered Canadians so per any real estate survey, they are considered local, but the money is coming from abroad. I’m on the fence about this so please reply and tell me what to think (I usually just do what you say).

#103 Mortgage Mountain on 04.04.16 at 10:46 pm

31 shootings in Surrey in 90 days. Wait a few more years. This place gonna be a Rio de Janero.

YVR,

I thought your comments were a really bad joke until I did a quick Google search. What the hell is going on there? Those shooting numbers are insane for Canada.

#104 Ronaldo on 04.04.16 at 10:47 pm

For those who contributed to Irvin Leroux’s fight with CRA here is an update.

http://www.lerouxed.com/

#105 Wild west on 04.04.16 at 10:48 pm

I’ll Give you another one. I work in SFO and live in Vancouver. running a global sales organization and raking it in US$ Well into the top 0.4% (according to my CRA auditor) of van earners – yes, I am a taxpayer and as a new Canadian, proud to contribute, through my success, to my community (ps, I don’t drve flashy cars, wear stupid status watches, or other “visible” wealth), I volunteer and took my pity seriously – so save the anti-high earner “must be stealing it” rhetoric.

I rent a $6m house in soulless Kerrisdale – based on a next door’s comp sale of a smaller house (sold 3 times in 1 year to non Asian looking “investors”, by an Asian looking “developer”) – for a mere $3800 per month.

The landlord, a non Asian local “investment property” owner (really nice guy in his 30’s) who lives in a basement with two kids, saving to subsidize my rent, and makes 2/8ths of what I do, just asked me if I wanted to extend my lease by another year beyond current (I have been here for 3).

He threw in a good Reno and landscaping. The cap ratio on $6m and a $3800 rent is, well, making me money.

My friend, beats me by renting a first Shaugnessy mansion, he did a $40k reno (bit of granite, steel, paint and turf) and locked in anothe non Asian “investor” on a $4k rent for a 3 year lease (He runs a start-up that a US group wanted to buy for $35m on revenues of $5m, in hyper growth and employment into some 20 people locally…).

I say this, not to brag, but to let you know that my “savings” rate allowed me to save some $600k in 4 years (bonuses and stock options) which have grown well in a balanced, globally diversified portfolio.

My base salary allows me to save more, I have no debt and can not only move without paying anyone 5% but can focus on building wealth.

My other friend, a self proclaimed “spec(ulative) builder” just put in every penny he owns to buy a shaugnessy mansion to rebuild and sell to a “Schinis” in 18 months with carrying costs that are carcinogenic – but that is, apparently, “normal”.

I spent 20+ years to get to a top career spot and do well. Took tons of risks,mean be fired on a dime I I miss targets, and spend a lot of time away from family, burning 60-70 hour weeks regularly (save me the bull about taxing the “rich”) and someone else takes total risk in a nonchalant way and that is normal?

How do I explain that to my kids? Yes, leave and go to to the other myriad of places that are also “best places on earth” (like all the other younger people from Van) where you can enjoy life in the pursuit of happyness and balance.

Garth, thank you for showing me the way some 7 years ago…

#106 IKnow on 04.04.16 at 10:51 pm

A friend who works at a bank back-office said – Canada has far more relaxed wealth reporting rule compared to US.
What that means to his work practically is that his team needs to be far more thorough to comb database for information to meet US regulations compared to Canada.

Translation: much easier to somehow get money into Canada from the eyes of regulatory agency.

Must be old news, but nonetheless.

#107 acdel on 04.04.16 at 11:04 pm

#90 preet89

Cannot argue with you on this post; this guy is a genius, unbelievable!

#108 HellYeah on 04.04.16 at 11:07 pm

To anyone creating a chart showing growth over time – such as Vancouver house prices – please consider using a logarithmic scale for the Y axis. Thanks.

#109 The other white meat (pork) on 04.04.16 at 11:08 pm

90 preet

I saw a piece on BBC world about the Tesla and its reliability problems so I googled it (something you should try) and Consumer Reports rates it a “do not buy ” based on serious reliability issues. What goes wrong? Just about everything it would seem, especially the drive trains.

Tesla loses a fortune on every car they sell and it’s questionable as to how long their current business model can continue. They appear to be one of those “unicorn” companies with a ridiculously overvalued stock price. Are you familiar with the Tucker 48 ?

#110 Ronaldo on 04.04.16 at 11:08 pm

#26 edgy in Nanaimo on 04.04.16 at 7:26 pm

” FYI Nanaimo should not be on the list of “normal” places to move to. ”

My guess is you live on Protection Island.

#111 sockeye sam on 04.04.16 at 11:09 pm

DELETED

#112 Star Stuff on 04.04.16 at 11:11 pm

105 Wild west on 04.04.16 at 10:48 pm

I’ll Give you another one. I work in SFO and live in Vancouver. running a global sales organization and raking it in US$ Well into the top 0.4% (according to my CRA auditor) of van earners – yes, I am a taxpayer and as a new Canadian, proud to contribute, through my success, to my community (ps, I don’t drve flashy cars, wear stupid status watches, or other “visible” wealth), I volunteer and took my pity seriously – so save the anti-high earner “must be stealing it” rhetoric.

I rent a $6m house in soulless Kerrisdale – based on a next door’s comp sale of a smaller house (sold 3 times in 1 year to non Asian looking “investors”, by an Asian looking “developer”) – for a mere $3800 per month.

The landlord, a non Asian local “investment property” owner (really nice guy in his 30’s) who lives in a basement with two kids, saving to subsidize my rent, and makes 2/8ths of what I do, just asked me if I wanted to extend my lease by another year beyond current (I have been here for 3).

He threw in a good Reno and landscaping. The cap ratio on $6m and a $3800 rent is, well, making me money.

My friend, beats me by renting a first Shaugnessy mansion, he did a $40k reno (bit of granite, steel, paint and turf) and locked in anothe non Asian “investor” on a $4k rent for a 3 year lease (He runs a start-up that a US group wanted to buy for $35m on revenues of $5m, in hyper growth and employment into some 20 people locally…).

I say this, not to brag, but to let you know that my “savings” rate allowed me to save some $600k in 4 years (bonuses and stock options) which have grown well in a balanced, globally diversified portfolio.

My base salary allows me to save more, I have no debt and can not only move without paying anyone 5% but can focus on building wealth.

My other friend, a self proclaimed “spec(ulative) builder” just put in every penny he owns to buy a shaugnessy mansion to rebuild and sell to a “Schinis” in 18 months with carrying costs that are carcinogenic – but that is, apparently, “normal”.

I spent 20+ years to get to a top career spot and do well. Took tons of risks,mean be fired on a dime I I miss targets, and spend a lot of time away from family, burning 60-70 hour weeks regularly (save me the bull about taxing the “rich”) and someone else takes total risk in a nonchalant way and that is normal?

How do I explain that to my kids? Yes, leave and go to to the other myriad of places that are also “best places on earth” (like all the other younger people from Van) where you can enjoy life in the pursuit of happyness and balance.

Garth, thank you for showing me the way some 7 years ago…
****

Beauty!..nice job. Man my life sucks!!

#113 acdel on 04.04.16 at 11:21 pm

Ok, last post before Garth bars me; YEAH, Brad Wall, there is hope after all!

#114 Brazil ex-pat on 04.04.16 at 11:21 pm

Your absolutely right. Vancouver people are most definitely not like the rest of us.

#115 cramar on 04.04.16 at 11:23 pm

#191 paul on 04.04.16 at 4:29 pm
My American says:

At 67 I’m one of those boomers who is never going to retire. Although I own everything (including a very nice house on a lake) – there are lots of expenses.

Property taxes are over $7,000 yr. Insurance is $3,000. With taxes and utilities (gas, electric, sewer, water) It costs us $1,400 a month to live in a house we own. This does not count health insurance, which I pay $300 a month (a great discount). To top it off – the state and fed tax our SS that we already paid tax on.

New roof $12,000. Eventually new mechanicals . A little nicer car is $30k, minimum.

They call it the American Dream, cause it’s best experienced when you are asleep.

—————————

Nice to live on the lake, but. . .

Never going to retire because your living expenses are way too high? It is your choice. Hope the view is worth it.

My employment ended at 54. Didn’t need to work anymore since living expenses are a fraction of what yours are.

Ah, freedom!

#116 Nemesis on 04.04.16 at 11:30 pm

“The debate on this site about foreign buyers versus local horniness is moot.” – HonGT

#YouMeant,”Moo”-Right?

https://youtu.be/LiCa8hS7TLc

#117 Panama papers and CRA on 04.04.16 at 11:31 pm

#76 Panama papers and CRA on 04.04.16 at 9:32 pm
Let ’em eat cake eh Garth?

Some of the world’s most successful and powerful people have private stores of wealth. Wow. Who’d have thought? — Garth

That is quite a remarkable statement to go on record from the former head of the Canadian Revenue Agency.

You got something against private wealth? — Garth

What’s your and the CRA definition of “private wealth” and “private stores of wealth”?

#118 Adam on 04.04.16 at 11:31 pm

Here is a house in West Vancouver at 931 22nd Street which just sold for
$2.92 million (Feb 22, 2016). It was listed at $2.399 so $521K over asking:
http://cathy-liu.com/mylistings.html/details-54808598
The crazy thing: It sold 12 months earlier for $1.945 million (Feb 7, 2015). An increase of $975K or 50.12% in one year!
Previous sales history of this house:
$1.385 million (June 14, 2011)
$430K (August 31, 1997)
It is the same house with one bathroom built in 1952 in all of these sales. That is an almost 7 fold increase in less than 20 years. Over 10.5% annual return compounded since 97. Vancouver Real Estate is undeniably the greatest investment on earth!

#119 WUL on 04.04.16 at 11:32 pm

When I mentioned my resolution to never complain again about life in Canada, I neglected to add a caveat.

If I hear anyone sing the praises about the Harper Government, I will fill my lungs and bellow.

#120 Ponzius Pilatus on 04.04.16 at 11:38 pm

#151 TRT on 04.04.16 at 1:05 pm
And since rents are being mentioned, I can tell you rental properties are skyrocketing in Vancouver as we speak.

2 years ago, you could rent a townhome in suburbs for $1500. Now it’s $2000. A detached home for about $1800. Now it’s $2600.

And this doesn’t even include Vancouver prices.
Foreign students with big money pushing up rental prices.

Prove it. — Garth
————–
Christy is bringing in 50 k Chinese students.
Obviously, they won’t, be part of the homeless in the east end.

Post a link to the BC government bringing in 50,000 students from China. — Garth

#121 sockeye sam on 04.04.16 at 11:58 pm

#118 Adam

Once known as the Canadian dream.

I did and I’m just a stupid bus driver with a grade four Education.Ask most millionaires and they’ll tell ya, “it’s luck , just dumb luck.
Gotta go Uncle Daddy’s calling.

#122 Sheane Wallace on 04.05.16 at 12:00 am

#46 Terrence on 04.04.16 at 8:01 pm
It’s boat loads of cash fleeing from Europe & Asia putting there money anywhere that offers the best return!North America is the place to be to invest right now, the smart $ has been here for quite a few years buying all real estate in VAN&TO! Truth is Garth will be right 1 day in the next 3 to 5 years! In the meantime look for housing to keep climbing into the stratosphere and the USA stockmarkets also to keep skyrocketing DJI will hit lucky 21000 or more very soon so stay invested & stay on the wild ride, just know when to get off! Timing any market is tuff as hell , but Garth’s info on real estate will be 100% correct!

—————————-

Nobody in the world cares about our non-consequential county, and our miserable weather.

It is the local idiots and their equally stupid overloads who will destroy their sh..ty currency and whatever is left from the economy deluding themselves.

I have never seen such conditioned bunch of brain-frozen idiots (that includes me), the only rational people I see are outsiders, but when they spend sufficient time here they got converted as well with no chance of reverting back to normal..

If there is the perfect matrix in place this is it.
I always thought that hell would be a cold, not a worm place.

#123 Sheane Wallace on 04.05.16 at 12:02 am

BTW the only rational, independent behaviour in such conditions are the rants of the likes of Smoking man. Accompanied by heavy drinking.

#124 too much debt on 04.05.16 at 12:07 am

There were 5,173 sales last month in a region with a population of less than two and a half million people. Compare that to fewer than 8,000 sales in the GTA, where six million souls live.

Hmmm…those are crazy numbers…the kind of numbers you might see when people who don’t live in Vancouver come in and buy up houses. BTW last week while riding the skytrain in Richmond I counted 14 cranes currently building condos (in Richmond alone), that doesn’t include condo sites that are currently being preloaded (huge piles of sand used to compact the groudn…aka:floodplain) or the unfinished condos where the crane has been taken down but they are still finishing the inside. Just in case there was any doubt on what is driving the economy in the lower mainland.

#125 Another Albertan on 04.05.16 at 12:12 am

Nearly a decade ago, I was engineering and constructing a sizeable SAGD oil sands facility. I had a catch-up phone call with one of my best friends from childhood. He hadn’t lived in Alberta since 1995 when he left for the US for graduate studies.

My friend was a hockey player. By all accounts and evaluations, he would have likely been drafted into the NHL. Instead he chose to go to school and got his M.D. and his Ph.D. He’s now a triple-trained and triple-board-certified oncologist in the United States and is on the academic staff at a noted Ivy League medical school.

On the phone call, I described what was happening with the oil sands construction craziness of 2004-2007. I described how cost estimates were rising on my project at 15% per quarter. Costs were more than doubling on a year-over-year basis.

“15% per unit-time?” he asked. “If I grow something in a Petri dish that grows at a rate like that, do you know what it’s called? Cancer. NOTHING biological grows at a pace that rapid without having side effects – either to itself, its host, or its environment. In human terms, what you are doing is completely unsustainable.”

His comments floored me at the time and have stuck with me for nine years.

Readers may apply this logic to their own observations, be it real estate, the energy and natural resources markets, etc.

Nothing grows at a rapid pace without having side effects. Nothing grows ad infinitum.

Everyone else’s mileage may vary.

#126 Upenuff on 04.05.16 at 12:13 am

Well, I took a quick look at an open house, 2.8 million, 14 year old north Burnaby house with a view yesterday…. The realtor and only other looker were inside speaking in Mandarin. I said hello and did the 15 minutes of personal walk about…. no response from the realtor, I then said thanks and good bye…. YVR is indeed different. Things change and people sell for a reason. Lots of money… the people selling are from Mainland China, they see a deal and they want the cash… no different than anywhere else… greed is killing the west coast…. everyone hold on out here.

#127 hope & ruin on 04.05.16 at 12:22 am

I want all the blog dogs to know that I will be running for the leadership of the federal NDP party. Please come out in support!

Yes, the NDP that also-ran party, that got all confused when T2 shifted to the left and and screwed up the whole spectrum. Now they exist as some frankenstein ensemble of day-care pushing, environmentalists, representing working class families through increased taxation to support their other client, the public sector. wait, what…?

big dipper, will you be my campaign manager?

#128 ulsterman on 04.05.16 at 12:37 am

Preet89 “In 2020 people will be looking back wishing they bought in 2016 and made another $500,000 to $ 1,000,000 on their property. EXACTLY the same as the people in 2012 are saying NOW!!!”

A couple of years ago I’d have said you were just another mindless pumper, but I think you could easily be correct. When prices no longer bare any relation to local incomes, some other factor is clearly driving average prices to $1.8m.

#129 Unhinged Citizen on 04.05.16 at 12:54 am

So, a $1,700,000 mortgage carried at 3.00% for 25 years will cost approx. $8,000 per month to carry.

That’s nearly $100,000 of your annual, take-home income in supporting the cost of the debt ALONE. Not to mention the the pesky costs like food and heat, God forbid you have offspring.

So Garth, what industry in Vancouver, pays those kinds of wages or salaries? Genuine question. I want to believe your narrative that demand is mostly local, but I know many refugees from the GVR who fled because they couldn’t get work that paid $2,500 out of university.

So which industry is supporting these housing prices, since it’s not shady, embezzlement money from the Third World.

#130 Bubble bubble I see trouble on 04.05.16 at 12:58 am

Compare the blue SFD line in Garth’s chart to this graph.

See any similarities?

https://commons.wikimedia.org/wiki/File:Stages_of_a_bubble.png

#131 Darth Cheney on 04.05.16 at 1:05 am

Serious question. How do I buy credit default swaps on Canadian mortgage bonds?

#132 Tony on 04.05.16 at 1:08 am

Re: #33 crowdedelevatorfartz on 04.04.16 at 7:38 pm

The guy’s a real estate agent. I’m sure it’s Richard Scott Bibby.

#133 fishman on 04.05.16 at 1:10 am

In first 100 comments of this blog many have written Vancouver & its people are obsessed,insane, moneyed class forcing locals out,crime & drug ridden(30 shootings &gunfights in 90 days),wet. As Bla bla bla succinctly put it: Vancouver & its people suck big time. I have to admit that such constructs by so many from so far makes me kinda proud & happy. Its like your working shoals of fish in an area over a period of time. You see boats running up & down on the horizon;others run by;some stop & try for awhile , lose patience, they come they go. Meanwhile you just hunker down & load cause you got the spot figured out.

#134 macroman on 04.05.16 at 1:16 am

Garth, you are a standup Canuck providing a fantastic free real estate (and investing) consulting service to those that have a clue. Coodoes to you.

I happen to disagree (like you care) with much of your financial philosophy…US interest rates, gold as a perserver of wealth, yada yada but you hit most of our breathern with cold hard facts that might keep families together rather than the imminient gong show.

Vancouver is a medium suburb of several Chinese cities. China has how many greater urban areas larger than the population of Canada?

Canada first, Vancouver second, is the absolute best possible place to land in the coming global financial implosion.

Yes it all is a bubble butt this is the least expensive first world.

Oh, that P.S. for $2100 in the Van Zoo, we pay $2000 for Okanagan Lake with two boat lifts. 1.6 mil with piece of mind and a whole lotta fun.

#135 JohnnyO on 04.05.16 at 1:22 am

I would love to know where I can find an updated bungalow for rent in Vancouver for $2100. Seems unusually cheap based on what I’ve seen.

#136 Steve French on 04.05.16 at 1:26 am

ahahahahaha. Only the gullible middle class and poor actually pay tax on income and capital gains.

We rich have offshore accounts where we properly hide our wealth, thereby paying no tax to the common good.

It’s the natural order of things, and its impossible to change.

Don’t like it? Think it’s not fair?

Too bad d–kweed! You dumb tree hugger. Why don’t you sit in a circle and sing kumbaya. You deserve to be a commoner.

I on the either hand deserve to be rich!!!! Fabulously wealthy beyond your wildest dreams!!! And the use of offshore tax havens are a crucial part of that strategy.

So get back to work before I fire you! Next time you’ll be out on the street for showing such impertinence. I want you to be polite and smile like a nice little peasant.

Ahhhh.. neo-liberalism.

Now that tastes sweet.

Dumb peasants. Dumb millennials! You deserve to be poor because even as you’re bent over a barrel, you look behind you and smile and just keep taking it.

#137 Mark on 04.05.16 at 1:30 am

Demographic has Vancouver rated as 2nd most expensive city for housing in the entire world.

#138 macroman on 04.05.16 at 1:35 am

Crap, I meant we pay $10000 per month with a canoe launch.

Our neighbor to the west (with a really nice tan) I can’t understand and they BBQ coyotes on the spit.

Our neighbor to the east is a Redneck with snow machines and BBQ’s buffalo by the quarter on a spit with a bitumen glace. Somewhat tastier.

This place sucks. Calgary and Van, you know you have struck gold.

#139 too much debt on 04.05.16 at 1:41 am

#83 LearningFromYou

I’m disagree with the conservative and liberals, I do not think that any party represent my interests today, but the parties are not Canada

I could not agree more, I am find myself in the same boat. I would describe myself as centre, whether that is centre right or centre left it doesn’t matter. However in Canada we have no centre party at all, we are becoming the United States which makes me sad. All I want is a fiscally conservative, social liberal party and I would be happy…is that too much to ask? Isn’t that where the Liberals used to be?

#140 macroman on 04.05.16 at 1:50 am

DELETED

#141 A Man on 04.05.16 at 1:55 am

#50 sockeye sam

That’s what the idea seems to be; increasing the net worth thru capital appreciation; or for short term and mid term renting out to new and younger students (shared basis) from same descent, to be managed by a property manager who might be senior student or PR (Of course from same background). As a pro business guy I welcome foreign investment but do not like to put my city and town on sale (by lusty countrymen to wealthy buyers). Worst is this rental income is not even reported as most of them landlords are asking for cash. Be it a situation where the Prov govt gives tax benefit to renter (who in most cases falls in lower tax bracket until unless they are following Garth) and ding the landlord (higher tax bracket guy), which will help prov govt in increased tax collection and less motivation (to some scale) to buy investment property.

#142 Ed on 04.05.16 at 2:03 am

I personally believe in holding cash and foreign currency as a hedge against the up coming Cyprus event here in the US and Canada. Eventually the government is going to rob the banks accounts to pay off the 19 trillion owed to the world.
NIRP will only fuel more negative confidence into bank and central bank to solve the problem. Smart people will start hording cash and gold like there is no tomorrow.
Central banks want to abolish cash so you are forced to put your pay check in the bank so they can systematically steal it. They have to pay for their only product… DEBT. The nations of the world are mostly bankrupt. Because most currencies revolve around the US dollar, and since the US is virtually bankrupt with a 19 TRILLION and growing national debt, all those other currencies are worthless unto themselves as a result.

My question is: If banks can charge you money to leave your cash in their bank due to negative interest, will they pay me when I take out a loan? Reasoning is, my interest rate is negative, so they have to pay me. HELL NO. That will never happen.

I recently have converted some of my cash into to gold and silver. NOT paper gold or silver, but the real deal, the physical stuff I can stash.

If money is abolished, gold and silver will go through the roof. The latest price jump is just the beginning.

Sad some people are so misled. — Garth

#143 Exurban on 04.05.16 at 2:29 am

Post a link to the BC government bringing in 50,000 students from China. — Garth

With pleasure, Mr. Turner. First up,


Record numbers of international students choose B.C.

VICTORIA – More international students than ever are choosing British Columbia as a study destination, with latest figures showing a 20% increase in international students and a 28% increase in direct spending by international students.

“British Columbia is a world-class destination for tens of thousands of international students who bring economic, cultural and social benefits,” said Advanced Education Minister Amrik Virk. “This growth in international students is exciting for the education sector and the province. Our government is on target to meet its ambitious commitment to increase the number of international students by 50% by 2016.”

In 2012-13, 112,800 international students attended public and private post-secondary institutions, elementary and secondary schools, and private language training schools in B.C., up from 94,000 in 2009-10.

There have been notable increases in the number of students coming to B.C. from India (188%) and China (68%) over the three-year period.

Government is on track to meet its commitment to increase the number of international students coming to B.C. by 50% by 2016.

Next, for edumacational purposes only:

Canada wants to double its international student body: Federal government plans to attract more than 450,000 international students by 2022

The federal government announced Wednesday morning a plan that it hopes will attract more international students to Canadian post-secondary campuses.

The International Education Strategy aims to double the number of international students and researchers — to 450,000 — in Canada by 2022 in an effort to create jobs and stimulate the domestic economy.

[…]

B.C. hosted almost 26 per cent of Canada’s 265,377 international students in 2012. In addition to recruiting more, the government wants to prevent “brain drain” by making it easier for international students to obtain permanent residency after graduation.

That last point is referred to by cognoscenti as “pathway to citizenship”. The B.C. educational institution I work at has several hundred mainland Chinese enrolled for just that purpose. With the decline of the so-called Immigrant Investor Program, attention has shifted to getting younger members of mainalnd Chinese families into this immigration stream.

#144 pathcontrolmonk on 04.05.16 at 2:46 am

#120 Ponzius Pilatus

Garth, as a matter of fact the Cdn govt is trying to attract 450,000 foreign students by 2022
http://www.cbc.ca/beta/news/canada/british-columbia/canada-wants-to-double-its-international-student-body-1.2497819

Last year I had lunch with the dean of the department I graduated from at UBC, he told me that he has given up on teaching. His classes are dominated by kids who barely speak English, rarely show up to class but still manage to submit work beyond their scholastic ability. A city that nobody lives in and a university that many don’t study at.

#145 Van Om the Streets on 04.05.16 at 3:26 am

Re: 50,000 students from China, this somewhat official looking link says nearly 30,000 a couple years ago with a pretty healthy growth rate. Presuming they aren’t ridiculously including other Asian countries as “Chinese”, I’ve still seen worse hyperbole.

https://news.gov.bc.ca/stories/international-students-continue-to-choose-bc-as-a-study-destination

#146 Give us this Blog our daily Garth on 04.05.16 at 4:51 am

#31 Linda on 04.04.16 at 7:37 pm
I am deeply impressed by the power of the small dog holding the very large bone:) Bet that dog is a fierce defender of its territory

Linda, you don’t know Jack.

#147 pBrasseur on 04.05.16 at 7:30 am

Vancouver…

No clearer indication of irrational exuberance there than the shortage of listings, I mean who in their right mind wouldn’t want to sell their bungalow if some idiot was prepared to offer 2 million for it?

If Vancouver was anywhere close to rational the whole city would be for sale at once! Mind you that’s probably exactly what’s going to happen eventually…

As Garth says it doesn’t matter where the buyers come from, a bubble is a bubble and at such prices the buyers, locals or foreigners, are fools.

#148 Panama Papers Pandemonium on 04.05.16 at 7:40 am

#136 Steve French

Nice post, funny!

Truth though is that for tax-strapped governments this will be irresistible as well as for the media and the anti-Wall Streeters. That’s good. We need it and we need the money being diverted offshore. The people doing this are not the employers and innovators driving our economy.

As Piketty has made clear, the very rich now are mostly entitled inheritors of money, who have done little to make it themselves. A bunch of Rob Fords and Marco Muzzos.

Time to get all this grey-zone nonsense out into the open and deal with it.

#149 crowdedelevatorfartz on 04.05.16 at 8:20 am

@#103 Mortgage Mountain.
“I thought your comments were a really bad joke until I did a quick Google search. What the hell is going on there? Those shooting numbers are insane for Canada.”
*******************************************

Yep.
Drug “wars”. 31 shootings in 90 days. Surrey should catch up and surpass last years’ entire shooting “record” of 56 before May 31st by this rate. Nobody will talk to the police so they wring their hands and ask for the publics’ help….(and lets not forget the “Surrey 6 massacre” of ten years back when 3 low level drug dealers were executed in a condo and 3 innocent witness were shot dead for…well….being witnesses…..and then the near “mistrial” when it was revealed that one of the investigating police officers was having sex with a crown witness, a good looking bimbo girlfriend of one of the accused…. before and during the trial. ” …..A new way to “taint” witness testimony? Only the RCMP know for sure…..).
Well at least it hasnt reached Mexican levels of violence where dump trucks full of decapitated corpses are left to rot in a public place as an intimidating “show of force”…….yet.

#150 Estrella on 04.05.16 at 8:34 am

“Too easy to blame “outsiders” for Vancouver housing woes”.

Today’s article in the globe and mail. Vindication.

http://www.theglobeandmail.com//opinion/its-too-easy-to-blame-outsiders-for-vancouvers-housing-woes/article29514052/?cmpid=rss1&click=sf_globe

#151 cropgrower on 04.05.16 at 8:38 am

#125 Another Albertan……you have a very smart friend….

#152 IHCTD9 on 04.05.16 at 8:49 am

#90 preet89 on 04.04.16 at 10:08 pm
Umm, about the Tesla. Consumer Reports rate the Model S it as the BEST CAR EVER — E V E R ! ! !

You can’t buy a Model S for 1/2 price anywhere.

What other car makers IMPROVE their cars AFTER they sell them like Tesla does with software improvements!!

Elon Musk should, no has to get a Nobel Prize for what he has done with Tesla.

What other car company has hundreds of THOUSANDS of orders BEFORE the car has even been made???

Tesla and Apple should join forces!!!! The best two companies in the WORLD!
______________________

Take a hike.

#153 Robin Bennett on 04.05.16 at 8:51 am

Hey Garth, what’s happening to property taxes in Van? Are they rising with the ‘value’ of the houses? Perhaps to the point where the owners cannot afford to live in their own houses? This happened to long-time cottage owners in the Muskokas.

#154 cramar on 04.05.16 at 9:17 am

As bad as it is, Vancouver and Surrey murders are playing catch-up to American cities such as Chicago:

http://www.usatoday.com/story/news/2016/04/01/murders-shootings-soar-chicago-through-first-three-months-2016/82507210/

#155 James on 04.05.16 at 9:24 am

#89 BOOM! on 04.04.16 at 10:07 pm

#36 Smoking Man

Get Well soon! Not as much color here when you aren’t posting. Hope you beat this flu, hear it can get real nasty.

Take your time, need you in full form when you return.

M64WI
……………………………………………………………………
Since Smoking Mans medical departure most of the posting has not been so distracting. However when I need a dose of pure insanity I simply go to FOX and watch Donald Trump. I am still thinking he has checked into a rehab clinic to become a contributing member of society,……………………nah who am I kidding, that would never happen.

#156 IHCTD9 on 04.05.16 at 9:30 am

#139 too much debt on 04.05.16 at 1:41 am

All I want is a fiscally conservative, social liberal party and I would be happy…is that too much to ask? Isn’t that where the Liberals used to be?

______________________________________

Traditionally, for the most part yes; but this time – that guy was probably Mulcair. T2 fits in much better with the NDP (on the money front) than he does classic Libs. If you don’t believe me now, you will later.

Same thing happened in Ontario with Wynne as a so-called Liberal. More like a clueless career trough feeder with a 1 track agenda she’s not even trying to obscure. To Wynne, tax revenue is bottomless, and will always be there to fatten public service compensation. She is probably the worst thing for private sector manufacturing to have ever existed in Ontario.

By the time Wynne, Trudeau, and Notley have finished up, 200+ Billion in additional debt will be on the books, half that from T2 alone.

Ontario will probably even vote KW back in again.

There probably hasn’t been a worse time to be young and just starting out, in all of Canadian history…

#157 James on 04.05.16 at 9:32 am

Meanwhile friends are committing financial suicide by taking on huge mortgages for tiny townhouses or condos they will soon outgrow. Why bother? As long as landlord doesn’t sell (could happen but I don’t see a shortage of places to rent in our price range) we’ll be ok sans homeownership.
……………………………………………………………………..
Agreed however at least I can grow vegetables in my backyard when it all goes to hell in a hand-basket. You can’t grow anything 75 metres in the air surrounded by thin concrete walls. Tons of these useless investment condos will be flooding the market as rental units soon. I would be pissed if I purchased a condo and found my entire floor was rented.

#158 lee on 04.05.16 at 9:44 am

By the time any crash happens in Toronto prices will just revert back to what they are today. Anyone who put off buying five years ago has been totally screwed over if their intentions were to buy in Toronto. The ship has sailed. Don’t blame Garth. He has been saying for five years now that some “hoods” in Toronto will see no drop. I guess Toronto is a hood unto itself. At least the parts West of Markham Road are.

#159 SunShowers on 04.05.16 at 10:08 am

“You got something against private wealth? — Garth”

I, and most sensible people have something against wealthy people avoiding tax, essentially making the working stiffs who don’t have such means of tax avoidance pick up the wealthy’s share of the tax tab which pays for government services that everybody, including the wealthy, benefit from.

Either wealthy people are “job creators” whose taxes create jobs and build infrastructure, or they’re an elite cadre whose earned wealth justifiably grants them access to powerful offshore tax avoidance strategies unattainable to the majority of citizens.

You’ll have to give up one of your two favorite talking points Garth, because they’re mutually exclusive.

#160 West Coast on 04.05.16 at 10:08 am

Garth can you write about the Canadian Tax Gap?……What is going on with CRA?……….Why don’t we know the size of the tax gap and what can we do to pressure the government to release info?………..

#161 DodgedBullet on 04.05.16 at 10:14 am

“You got something against private wealth? — Garth”

Garth,

you are alienating readers, I understand what you mean but you respond only to the obvious.

There is a difference between private and hidden wealth, where the ends of the process of hiding wealth is to eschew taxes, launder money, profit from insider information.

What a leap. Lots of people have money they keep private, and earned. — Garth

#162 Bat Flipper on 04.05.16 at 10:22 am

The Canadian market is imbalanced for one market Single, detached homes in GTA and YVR.

The homes cost 800+, and they are consumed by a few groups of people.

– Upgraders/Downgraders. People moving from one property to another using their equity gains to transition.

– HAM. As The blog owner says, they only account for 5% of transactions, but the 5% is new buyers, so this is your market growth.

– Bank of Mom/Dad. Parents raiding their investments to get kids in the market.

Of course there is plenty of demand, the barriers to entry are low. Given a solid down payment, most mortgages can find a lender willing to give an approval with rates ranging depending on the income/credit. If your home is increasing in value by 10%+/year, then even paying a 5% loan makes sense.

Supply needs to increase or demand goes down. When will this happen? The great exodus. People decide it is too expensive and move. Boomers especially. When boomers start to cash out, we will see prices decline.

It is the only factor that the government can’t mitigate. Rates, job loss, etc. can be mitigated by changing mortgage rules, but a sudden increase in supply can’t be mitigated.

#163 Marie on 04.05.16 at 10:23 am

RE: #120 I can’t comment on the “50,000 students” you say are coming to BC. However, all colleges and universities work to attract foreign students. The reason, they pay more tuition than Canadian students do. For example, at UBC Canadian students will pay about $170 per credit, while foreign students pay about $800. In other words, foreign students are subsidizing Canadian ones!

#164 Barny Gold on 04.05.16 at 10:50 am

Trudeau Liberals bungling and total lack of direction, except to ‘kill the energy industry’ has put a stranglehold on the Canadian economy and that means tens of thousands of more job losses guaranteed.

http://www.bnn.ca/News/2016/4/5/Trade-gap-jumps-exports-slump-by-most-since-2009.aspx

Increasing civil service wages and giving an extra billion to the CBC for another Liberal Propaganda Campaign won’t hide the coming depression in Canada.

#165 Noel on 04.05.16 at 10:54 am

Real estate is more international now than its ever been. As long as there are trillions of dollars flowing out of China Vancouver house prices can, and will keep appreciating.

The reason Halifax, Edmonton, Calgary etc house prices are stagnant is because very few from outside the country (and most from inside for that matter) want to live in those cities.

Vancouver, and Toronto will keep going up for the foreseeable future until:

i) a huge increase in interest rates
ii) massive job losses across multiple sectors

I don’t see either of those happening this decade, do you?

#166 lee on 04.05.16 at 11:10 am

#165, Noel,

The job losses would have to be really massive. Given the infrastructure dollars coming, this will not occur for a while, if ever. We know government jobs aren’t going anywhere, and professional an IT positions will keep churning along. As long as the people in construction and related industries keep waking up and going to work, you’ll never see a downturn in Toronto. Not enough SFHs to meet the demand. As I have said before, I doubt there are more than 200,000 desirable SFHs in Toronto. This will never be enough to meet demand.

#167 NEVER GIVE UP on 04.05.16 at 11:12 am

“No government will ban offshore buyers, tax them into oblivion or otherwise erect walls to keep the locals safe.”
——————————————————————
ACTUALLY plenty of (responsible) governments have restrictions on foreigners purchasing property in their country.

Thailand has a thoughtful program whereby foreigners can only purchase Condos in the sky.

Many other countries have this option as does China.
Although in China even the locals cannot own the land they live on.

Many western governments have various degrees of foreigner dampening taxation such as England.
In some cases it does not go far enough.

To allow your property to become a Futures market and then Fund that Futures Market with taxpayers money (CMHC) is an affront to reasonable thinking.

#168 Calgary Rip off on 04.05.16 at 11:13 am

Garth,

Perhaps you could suggest to all the victim mentality people that come and complain about financial strategies.

Here are some:

1)Marry an American. That’s right. Then you too can encounter the mess and the benefits of the 50 states. Lots of cheap real estate: Nevada. Texas. Mississippi. Louisiana.

2)Leave Vancouver. Are these people married to the city? Move if you cant afford it! I remember when I lived in Nanaimo. People beg to have Burger King jobs there. Most crazy thing I have seen that Vancouver Island culture. And people talk about it like it is some kind of paradise. It is only paradise if your money is independent of the economy there. If it isnt, enjoy worrying about keeping your job in the sawmill. If you dont have a job, enjoy the job interviews. In about 45 seconds your prospective employer will size you up. If they dont like you, forget about a job. You may end up delivering the Harbour City Star paper for four hours a day.

There isnt anything so great about Vancouver. Maybe less hassle if you have a place because the water is less hard and doesnt build up on your pipes. Other than that the rain is like Seattle, sort of, although the culture is different and better than Seattle.

No one is to blame about Vancouver. Costs went up. Figure out a solution rather than trying to change things.

#169 NEVER GIVE UP on 04.05.16 at 11:31 am

Chicago’s murder rate soars 72% in 2016; shootings up more than 88%
—————————————————————–
Most murders are strictly due to prohibition laws. Gangs cannot call the cops to solve their disputes and thefts. They cannot use the courts to solve territorial disputes.

All of these murders are on you and I who agree with the Tyranny of prohibition.

All Drugs should simply be regulated and taxed at most to the degree of cigarettes. Problem solved. Sadly the Ostriches of our society will not see this.

#170 sockeye sam on 04.05.16 at 11:32 am

#153 Robin Bennett

BINGO!

#171 DodgedBullet on 04.05.16 at 11:35 am

“What a leap. Lots of people have money they keep private, and earned. — Garth”

Yes quite the leap indeed, however that is what people believe currently.

Just saying guv’nor.

#172 Big Dipper on 04.05.16 at 11:40 am

#127 hope & ruin on 04.05.16 at 12:22 am

“I want all the blog dogs to know that I will be running for the leadership of the federal NDP party. Please come out in support!”

———————————————-

You just don’t get it ruin. Social Democracy is not tied to a single name or party. We go with those who closest resemble our goals. Federally, that’s the Liberals.

When Mulcair started spouting about balanced budgets and sounding like a demented Con (is that an oxymoron?), his followers shifted to the Libs. You know the rest of the story.

Good luck with that nomination!

#173 Herb on 04.05.16 at 11:43 am

Lots of people have money they keep private, and earned. — Garth

Don’t be disingenuous, Garth, unless, of course, you know that there is no fire under all this smoke –

http://www.cbc.ca/news/business/panama-papers-neil-macdonald-1.3520491

#174 Number on 04.05.16 at 11:45 am

I like #125s comments as well.

However no one has provided any real evidence of a bubble other than sky falling proclamations which we’ve been hearing here for the last 15 years.

Someone here mentioned that housing value growth hasn’t been correlated with incomes for a while, then what’s your premise? How are stocks/ETFs that have seen similar increases any safer?
I’m not saying I disagree with you. I get your point that the risk of many types of investments going South simultaneously is unlikely and so it’s important to diversify. It’d be nice to see better reasoning than ‘horniness’.
The person who said they’re renting in Vancouver for less than $2500 sounds the smartest. That’s roughly the monthly interest on a loan to buy a home here right now if you put 10% down.
There’s risks inherent to that route as well – rents will go up, and the owners are more likely to sell with the higher prices. Moving your family, perhaps even changing schools, etc., with a month’s notice would not be much fun. If you’re covered by a healthy pension and can afford the payments then maybe buying a property could be a good decision?

#175 Roial1 on 04.05.16 at 11:58 am

You got something against private wealth? — Garth
———————————————————–
Well, when it has to be hidden from legitimate sight, YA!

Money laundering is a crime. Tax evasion is a crime.

You don’t support that “private wealth” do you?

#176 Roial1 on 04.05.16 at 12:10 pm

#164 Barny Gold on 04.05.16 at 10:50 am
Trudeau Liberals bungling and total lack of direction, except to ‘kill the energy industry’ has put a stranglehold on the Canadian economy and that means tens of thousands of more job losses guaranteed.
——————————————————————
That is just the kind of statement by a conservative that shows how ignorant they can be.

The “energy sector” was not “killed” by the Liberals.

Unless the Saudis are now running the government of Canada.
Last I heard THEY killed our (over supported) energy sector.

But I guess that to your ilk, only the cons do good.

Like “Dief the chief” did not kill the aircraft industry in Canada.
Or Brian did not accept that bag of money.
(I bet we never see that 5 million that he sued us out of.)

Try to learn SOMETHING truthful about what you say. BEFORE YOU SAY IT!

#177 Dups on 04.05.16 at 12:33 pm

I see you are steering clear of the big Panama Papers leak…. It is big news by the way.

Comment on what? Who cares? It doesn’t matter to my life, or yours. — Garth

#178 Damifino on 04.05.16 at 12:35 pm

#144 pathcontrolmonk

“Last year I had lunch with the dean of the department I graduated from at UBC, he told me that he has given up on teaching. His classes are dominated by kids who barely speak English, rarely show up to class but still manage to submit work beyond their scholastic ability.”

I’d like to see them try the same trick at BCIT or any other technical institute in Canada where practical, hands-on skills must be demonstrated in laboratories every day under tight time constraints.

Try searching the internet for the solutions to specific servo control design problems on tomorrow’s exam that were dreamed up by instructors the night before.

#179 bdy sktrn on 04.05.16 at 12:40 pm

#153 Robin Bennett on 04.05.16 at 8:51 am
Hey Garth, what’s happening to property taxes in Van? Are they rising with the ‘value’ of the houses?
———————
prop tax rising w inflation or just above.

as a % of prop value they continue to drop like a stone, about 4k tax on 1.5m shacks round here. Or 0.267% maybe the lowest in the world?

#180 BOOM! on 04.05.16 at 12:46 pm

Civic responsibility complete. MY vote has been cast & recorded.

Some say voting preserves your right to bitch. II do believe this statement is ass-backward. When you vote, you may help elect that politician who proves utterly incompetent, lazy, or unethical. Therefore, you have NO right to bitch – YOU elected them!!

Weird world, eh?

Flopper… saw your note yesterday.

M64WI

#181 understood by few on 04.05.16 at 12:53 pm

#147 pBrasseur on 04.05.16 at 7:30 am

No clearer indication of irrational exuberance there than the shortage of listings, I mean who in their right mind wouldn’t want to sell their bungalow if some idiot was prepared to offer 2 million for it?

——————

It’s fear. Anyone willing to relocate would sell in a hot minute. People that wish to stay in Vancouver are afraid of selling. That’s where their job, family, hobbies etc are. If they sell they have to rent or move to the sticks. If they rent who’s to say the landlord won’t decide to realise his gains as well? There’s also that nagging fear that “Vancouver is different”. Silly, but the fear for many is if they sell they’ll never be able to buy in Vancouver again.

Upgrading is nearly impossible and dangerous if possible. Sure, sell your crap shack for 2mil, but is the bank going to lend you a million to buy the next step up? If there is something you can realistically upgrade to, who’s to say it’s value won’t jump in the next month and you’ll lose the bidding war to get it? Gotta sell your place first as no-one is going to accept an offer with condition to sale.

It’s a feedback loop. People being afraid means less listings, less listings means less supply ergo more craziness which in turn means more fear and even less people listing. Round and round it goes, where it stops, nobody knows.

#182 jess on 04.05.16 at 12:56 pm

so a “transparent” register of beneficial owners is USELESS

The author of Live it, Love it, Earn it (A Woman’s Guide to Financial Freedom) offers financial advice directed at American women.
======================
so get a guy who is 90 “natural person” code for STRAW owner
“We need to hire the Natural Person Nominee, pay him, make him sign lots of documents to cover us, make him sign resignations, make him get some proofs evidencing that he has the economic capacity to place such amount of moneys, letters of reference, proof of domicile, etc, etc.”

#183 bdy sktrn on 04.05.16 at 12:58 pm

blog dog Elaine. …

“Just wanted to share my price to rent ratio with you here in Vancouver. We rent a solid 1950s(updated) bungalow for $2100 a month (yes the whole house).

———————————–
3bd basements are 2100/mo in east van

sure hope Elaine has a good supply of moving boxes at hand.

#184 Rifles on 04.05.16 at 1:01 pm

“In a rapidly rising market logic tells us it makes sense to cash in your chips and harvest the taxless capital gain.”

So why not revoke said “taxless capital gain” and deflate this gas bag once and for all? Even federal/provincial governments floating the idea would ramp up inventory and hammer prices. There is nothing sacred about these windfalls.

#185 understood by few on 04.05.16 at 1:02 pm

#153 Robin Bennett on 04.05.16 at 8:51 am

Hey Garth, what’s happening to property taxes in Van? Are they rising with the ‘value’ of the houses? Perhaps to the point where the owners cannot afford to live in their own houses? This happened to long-time cottage owners in the Muskokas.

—————
As long as nearly all properties are appreciating the same %, then any change in property tax should be negligible. Your property tax increases when the value of your house increases relative to other houses in your city. I’ve had PT go down with an increase in assessed value (because my assessed value didn’t increase as much as others). Over the past 5-6 years my property taxes due have been within $20 year to year (despite a 20%+ change in assessed value).

That being said, IF a home owner’s property taxes go up, they can simply defer (as le honourable turner de garth stated). It’s stupid cheap to defer in BC and available to way too many people (“Oh you have a kid under 18? You can defer.”). As someone else stated, it’s not means tested. You just have to meet one of the many criteria.

#186 BOOM! on 04.05.16 at 1:02 pm

Love them soft market days. A preferred issue I have wanted to expand ownership in is “ON SALE” and today my limit order was filled!!

Will it prove a good buy, or falling knife?

I don’t know, I will get paid ~5% per annum while I determine that.

#187 fancy_pants on 04.05.16 at 1:19 pm

Trade deficit triples to $1.9B in February

http://www.cbc.ca/news/business/trade-deficit-february-1.3521131

free trade levels the playing field, we just didn’t get the memo and still buy like we are superior. when the jobs are all gone and the IOU’s to the importers are through the ceiling, who cares how cheap things are at the big box stores, the average person will be spending the majority of their dwindling disposable income on basic necessities.

Trade deficits are nothing new but the straw is getting heavy on the camel again. Globally, things are not moving in a positive direction – on any front. It’s not too hard to entertain the possibility of another meltdown coming down the pipeline. of course the state media will run with ‘nobody could have seen it coming.’

#188 Ponzius Pilatus on 04.05.16 at 1:24 pm

#151 TRT on 04.04.16 at 1:05 pm
And since rents are being mentioned, I can tell you rental properties are skyrocketing in Vancouver as we speak.

2 years ago, you could rent a townhome in suburbs for $1500. Now it’s $2000. A detached home for about $1800. Now it’s $2600.

And this doesn’t even include Vancouver prices.

Foreign students with big money pushing up rental prices.

Prove it. — Garth
—————–
Christy is importing foreign students by the plane loads.
They gotta live somewhere.

#189 JamesA on 04.05.16 at 1:37 pm

This is interesting:
http://www.bloomberg.com/news/articles/2016-04-05/san-francisco-tech-firms-see-workers-flee-from-4-500-rents

If you are making 110k in Austen Tx. you would have to make around 195k in S.F. to have the same quality of life. Some good numbers about home prices too.

The article lists quite a few decent alternatives for someone trying to avoid the cost of life in S.F.. In Canada we have so few options. Vancouver is out of the question. Toronto is probably out of the question if you want to do the family thing. Montreal, maybe, lots of fun but so cold and the language thing. Calgary? Maybe, you can ski in the winter, but, cultural wasteland when I lived there many years ago. What’s left? Halifax or Victoria? Halifax wins on the fact that they have less earthquakes? I have never spent much time in Victoria. It will probably be overrun by people fleeing Vancouvers prices. Some parts of rural Ontario are nice.

#190 Down and Out on 04.05.16 at 1:45 pm

http://www.oftwominds.com/blogapr16/triffins-paradox4-16.html Interesting way of looking at things

#191 Ponzius Pilatus on 04.05.16 at 1:46 pm

#90
What other car company has hundreds of THOUSANDS of orders BEFORE the car has even been made???
—————–
The Wartburg.
This was a car built in East Germany during communism.
It was very popular because it was “German made”.
People in Hungary, Polen, etc had to pay the full price and then wait up to 8 years for delivery.

#192 Ponzius Pilatus on 04.05.16 at 1:55 pm

#131 Darth Cheney on 04.05.16 at 1:05 am
Serious question. How do I buy credit default swaps on Canadian mortgage bonds?
————-
Simple.
Keep renting and when this thing blows, buy.

#193 “private wealth” on 04.05.16 at 2:06 pm

It did not take long….

Iceland’s prime minister has resigned over secret investments revealed in the Panama Papers

http://www.businessinsider.com/icelands-prime-minister-has-resigned-over-secret-investments-revealed-in-the-panama-papers-2016-4

#194 Jenny on 04.05.16 at 2:09 pm

Garth, in response to your postscript. Not sure where this person lives. We rent a townhouse in Burnaby-no yard, right against the canada one highway for 1900 because we moved in 4 years ago. If you want to rent a whole house in Vancouver it’s at least $3000 (and then it’s probably not that nice). Burnaby is about $2800 and coquitlam is about $2500. The only way it’s cheaper is if they are going to tear it down and it’s a short term lease.

$2000 to rent an entire house in Vancouver is completely unrealistic. It’s absolutely cheaper to rent than buy but rents are not this low.

Posting this person’s experience helps add to your argument (which I agree with) but it’s not accurate.

You (nor I) have any idea as to the accuracy. — Garth

#195 tkid on 04.05.16 at 2:18 pm

#175, private wealth does NOT equal “money laundering” or “tax evasion”. It means wealth held privately. In other words, it’s the money I have after I pay taxes.

And offshore bank accounts do not equal “money laundering” or “tax evasion” either. It means you hold your money offshore.

Money laundering is the generic term used to describe the process by which criminals disguise the original ownership and control of the proceeds of criminal conduct by making such proceeds appear to have derived from a legitimate source.

Tax evasion is the illegal evasion of taxes by individuals, corporations, and trusts.

Once I pay taxes on the money I earnt, whether through a salary or from interest, I can do whatever the hell I like with it. If I want it placed into an offshore account, I’ll do that. If I want to use it as the fuel for the most expensive hotdog barbeque, I’ll do that too.

The government can bay all it wants about offshore accounts. But it will have to prove in a court of law that the account owner had evaded paying taxes, or that the money came from illegal activities.

#196 jess on 04.05.16 at 2:22 pm

real estate shell game (new york times) nov 2015
This is so egregious! deed theft illustrates another way that limited liability company law used to create such entities has been twisted and stretched to conceal the ownership of real estate.

Relying on the secrecy of limited liability companies, white-collar thieves are targeting pockets of New YorkCity for fraudulent deed transfers, leaving the victims groping for redress.

” It was under those circumstances in February 2014 that she saw a commercial urging her to call MyHouseIsADump.com, a company that offered to buy houses in as-is condition, in cash, and to close the purchase within seven days.”

http://tinyurl.com/jxtmalo

#197 BOOM! on 04.05.16 at 2:24 pm

Some people here are confusing “TAX AVOIDANCE” which is perfectly legal, employs many accountants, reduces your taxes, and may keep you regular…

“TAX EVASION” is never legal, should be, and usually is prosecuted when found. It destroys reputations, costs money and will keep you under the watchful eye of the IRS or CRA for awhile, and will definitely make one quite ir-regular…

We have numerous tools at our disposal for ‘tax avoidance’ and the astute use them to the extent they can.

Don’t confuse the terms!!!

#198 understood by few on 04.05.16 at 2:48 pm

#188 Ponzius Pilatus on 04.05.16 at 1:24 pm

Christy is importing foreign students by the plane loads.
They gotta live somewhere.

—————–

Proof?

Rent prices are up because sale prices are up. Gotta pay the mortgage somehow.

#199 Bond Junkie on 04.05.16 at 2:58 pm

#131 Darth Cheney on 04.05.16 at 1:05 am
Serious question. How do I buy credit default swaps on Canadian mortgage bonds?

Short answer is that this product doesn’t exist and the long answer is that you’d be even more foolish to buy it. Canada mortgage bonds or CMB’s (as they are referred to by industry folk (me)) carry the full faith and credit standing of her majesty the Queen and the Government of Canada. So taxpayers are ultimately on the hook for any liabilities/writedowns incurred by CMHC as it is a Crown Corporation wholly owned and operated by the state. Recall in 2008 the U.S federal government took over control of Freddie and Fanny when they were placed into a conservatorship run by the Federal Housing Finance Agency. We just skipped a step.

#200 Capital X on 04.05.16 at 3:01 pm

Several posters have noted, in subtle detail, who the real buyers are in Vancouver. Anyone who says that the Chinese have not made a massive disturbance to demand and values is absolutely delusional. Vancouverites are not bidding up prices, they are simply buying into the only market we can. Renting a 1950’s Bung for $2,100 a month is lucky. With a rental vacancy rate at below 1% you are lucky to find a mediocre 2 bed apt for that price. I would like to see half of the posters here try and not get freaked out in this market when you have a family, kids in school, friends or family nearby, and the only option is to buy in, maybe rent (until your house is demolished) or face a massively daunting commute.

No, buying otherwise does not make much sense unless you are also selling into the market. If these prices were simply the result of stupidity and low rates, then every city across the country should have the exact same price increase ratio over the last several years. But we don’t. Only now are we seeing price increases in Vic, Nanaimo, Squamish and the Sunshine Coast. People have cashed out of Vancouver and are moving away. Come over to Vancouver and walk around and count the number of $300,000 cars you see driving by. This is Rolls Royce strongest market in the world. There are more supercars sold in Vancouver than anywhere else in North America. Trust me, the money that these newcomers have is being dropped on housing the same way calgarians used to by coffee for everyone in line at Tim Hortons. They have driven up prices like madmen.

This market is further impacted by the fact that there are some 4,200 air bnb units in DT Vancouver alone. That’s 4,200 condos that are taken out of the traditional housing pool. Last year was our biggest tourism year yet, wait to see what happens this summer.

Nobody knows when this market will cool or change. Show me an economist that has made consistent predictions. Don’t cherry pick their predictions, but consistent and reliable ones. Doesn’t happen. Economics is based on human nature, not science. Vancouver could level off, it could continue. What I do know is that many of the people I know have simply left. Try playing street hockey in Dunbar. Can’t. No kids left.

#201 Noel on 04.05.16 at 3:15 pm

#186 BOOM!

Smart. How long do you put your limit orders in for? Day? Week?

#202 understood by few on 04.05.16 at 3:16 pm

#197 BOOM! on 04.05.16 at 2:24 pm
Some people here are confusing “TAX AVOIDANCE” which is perfectly legal… snip

————–
Erm.. letter of the law isn’t “perfectly legal”.

Tax avoidance is the term used when “tax planning” is aggressive and against the “spirit of the law”. You can be prosecuted for tax avoidance.

Yes, it is completely different from tax evasion but “perfectly legal” isn’t correct either. Tax planning is perfectly legal, but it’s a fine line. I’m sure T2 would love to define most legal tax planning as avoidance (since all small corps are just tax scams according to him).

#203 S.Bby on 04.05.16 at 3:16 pm

We rent a solid 1950s(updated) bungalow for $2100 a month (yes the whole house)
————————————————-
Same here… $2,000/month for a 4 bedroom in Burnaby nice reno’d bungalow. Owners don’t care about the rent amount because they are only looking at their paper “gains”. Thanks for the subsidy they pay me to live there lol ! BTW there are lots of rentals around in the burbs… no shortages thanks to all the speculators and rents are not going up bcus wages aren’t up and you can’t finance rent. My investments pay for all my rent plus alot more income.

#204 Bram on 04.05.16 at 3:17 pm

What a leap. Lots of people have money they keep private, and earned. — Garth

RBC will keep your financial details just as private. Just not from the CRA.

Hiding money from CRA by using the expensive services of an offshore company has only one goal.

And guess what, the last thing I heard was that there are 450 Canadians listed as customers in the Panama Papers. Probably now scurrying for a plea deal with CRA before the full spot light hits them.

Bram

#205 Big Dipper on 04.05.16 at 3:19 pm

#195 tkid on 04.05.16 at 2:18 pm

#175, “private wealth does NOT equal “money laundering” or “tax evasion”. It means wealth held privately. In other words, it’s the money I have after I pay taxes.

And offshore bank accounts do not equal “money laundering” or “tax evasion” either. It means you hold your money offshore. ”

———————————————

Maybe. But on the 2nd page of your return there is a question as to whether you own over $100k off-shore. If you do, but ticked the NO box and signed the return, you’ve submitted a fraudulent return. You can run but you can’t hide.

Once CRA has the Panama names they’ll cross check returns. This is when sweaty meetings with tax lawyers are arranged.

#206 S.Bby on 04.05.16 at 3:20 pm

BC seniors don’t all defer their property taxes; my elderly neighbour didn’t even know about BC property tax deferral until I mentioned it to her. Another guy thought it was at a very high interest rate until I told him to look on the website and it’s only .85% simple interest.

#207 Joe2.0 on 04.05.16 at 3:27 pm

Sale prices are up because of so much foreign investment.
Numbers don’t make sense otherwise.

#208 S.Bby on 04.05.16 at 3:27 pm

For the doubters… first rental house I see when I hit Craigslist…
3 bedroom, 2 bathroom, all utilities included $2,250.

https://vancouver.craigslist.ca/bnc/apa/5521617435.html

#209 Noel on 04.05.16 at 3:53 pm

#195 tkid

And offshore bank accounts do not equal “money laundering” or “tax evasion” either. It means you hold your money offshore.

The government can bay all it wants about offshore accounts. But it will have to prove in a court of law that the account owner had evaded paying taxes, or that the money came from illegal activities.

______________________

Very naive of you. I bet you thought Tony ran a waste management company.

Did the courts have to prove that the Icelandic PM did anything wrong? Nope, instant resignation. Any public figure caught up in this will be hopefully be held to the fire. David Cameron is currently lying his way through the press room about his own past tax schemes and his father’s current ones.

There will be huge fall out from this, both in the court of public perception and law.

#210 TheDude on 04.05.16 at 3:53 pm

I own a house in the Fraser Valley and have seen it’s “value” explode, more than doubled from what I bought at in 2011. My wife and I are 30 with two young kids, and as tempting as it is to sell (I fantasize daily), where would we go? Our family is in the area, as are our friends and our jobs. Despite what’s talked about here, the rental market is very tight and rates are significantly higher than our current all in monthly costs. Is it wise to uproot a family to cash in on $500k at 30? Or is it simply better to ignore the noise and continue on our merry way? I am conflicted but would appreciate anyone’s rational advice.

#211 tkid on 04.05.16 at 3:55 pm

Rent prices are up because sale prices are up. Gotta pay the mortgage somehow.

#198, agreed. If prices in Toronto and Vancouver get any more ridiculous I may never again live within an hours commute of Toronto.

#212 TheDude on 04.05.16 at 3:57 pm

One more thing, seems there is this huge provincial rivalry going on, when did this become a thing? Maybe I never noticed before but reading comments on this site has made me realize there are either a bunch of bitter trolls out there or we have serious hate-ons for fellow Canadians. What a detriment to our country with all this petty crap going on. Why on earth there would be trade walls between provinces in a country like Canada is beyond me.

#213 family beagle on 04.05.16 at 4:12 pm

Not rocket science. GVRD prices rise because currently there is price support. BC gov has lots of demographics on target markets, tourism stats, air travel, densification, lobbying, permit applications, business registrations, school registrations, medical claims, auto insurance policies, emergency call reports, dog licensing, etc… It’s an important industry, and it gets analyzed.

There are fewer available lots zoned residential in a region with a concentration of transportation, amenities and services, all in a pleasant climate governed by a social democracy. Flush with low interest capital and limited awareness of alternative investments, people are leveraging a rise in land equity and speculating the region’s popularity will last, or until price support runs dry. That chart, synonymous with the whelp, is demonstrating a hopeful leg up.

Raised BC rural, I rent in 604 and own a pristine little valley in the 250 sun belt, which I bought for $0.19 sqft. My property taxes are paid with one harvested tree every three years. I’m zoned farm/small bz/residential. I don’t particularly like Vancouver, and haven’t been there in 4 years, even though I currently lease a house on 5 acres for $900 mo. 20 kms east in the blueberry fields. I see frantic activity, but don’t care to participate, operating a small shop instead and selling on referral to Canadian and US patrons. I have snowshoes, a beater 4×4, and an extensive bevy of like-minded, lazy-ass friends, some of whom own multiple beater houses around the province valued in fluff. I have extremely wealthy clients and broke friends, and they aren’t much different in scruples. I concur with Garth’s analysis: don’t get stuck behind the eightball. Diversify the nest egg. Balance life with some quality living.

#214 calculations on 04.05.16 at 4:13 pm

We rent a solid 1950s(updated) bungalow for $2100 a month (yes the whole house). Very similar bung down the street just sold for (you’d better sit down), $1,620,000 (300kish over ask). So our price to rent ratio is ….63!

===

Your P/R would be 63 if you rented the “bung down the street”…

The P/R of the house what you rent is based on what your landlord paid for his/her house.

#215 april on 04.05.16 at 4:16 pm

#207 Joe. read Ross Kay @ Howestreet, as to why prices are up or on paper at any rate.

#216 tkid on 04.05.16 at 4:18 pm

#205, prove your allegations in a court of law. I am getting very very tired of all of this “I am so jealous” whining everyone does.

While you were running up the credit card bills, I went without cable tv, vacations, dining out, a car, etc etc. I made sure the bills were paid first, savings were paid second and if I had to sacrifice, then I had to sacrifice. Do I deserve a medal for this? Nah. But I don’t deserve to be called a money launderer, or tax evader.

And having money offshore is just wise. Because the current sets of governments have us in debt to the tune of over 1 trillion dollars, and that’s the just the feds plus Ontariowe’s debts. I think we’re going Greece; we won’t be rational when it comes to house prices, we keep adding to our debt loads, our infrastructure is falling to bits — how long will it be before Canada and the provinces are no longer able to pay off their bonds?

A more rational debate would be what is the max interest rate Canada/your province of choice can pay on the bonds they issue. Nah, let’s discuss offshore bank accounts and how everyone who owns one must have Done Something Wrong.

#217 Freedom First on 04.05.16 at 4:23 pm

#157 James

James, have you ever thought of getting a Life Coach? Your Plan B is out in left field. I’m here to help. No charge.

#218 Bottoms_Up on 04.05.16 at 4:28 pm

#216 tkid on 04.05.16 at 4:18 pm
————————————
Having money off-shore may not be wise. It may be tax evasion. There’s a societal and legal problem with that.

Should someone that earns money in the Canadian system, benefits from Canadian law/society, and who has profited while residing here (and no doubt profitted off the backs of their fellow Canadians), actively illegally avoid paying their fair share of taxes???

Avoiding tax is not illegal. Get over it. — Garth

#219 Bottoms_Up on 04.05.16 at 4:30 pm

What a leap. Lots of people have money they keep private, and earned. — Garth
——————————————————-
Garth, if there is nothing to hide, then there is nothing to hide. That is obvious.

Why should they share it with you? — Garth

#220 family beagle on 04.05.16 at 4:49 pm

#210 TheDude on 04.05.16 at 3:53 pm
I own a house in the Fraser Valley and have seen it’s “value” explode, more than doubled from what I bought at in 2011. My wife and I are 30 with two young kids, and as tempting as it is to sell (I fantasize daily), where would we go? Our family is in the area, as are our friends and our jobs. Despite what’s talked about here, the rental market is very tight and rates are significantly higher than our current all in monthly costs. Is it wise to uproot a family to cash in on $500k at 30? Or is it simply better to ignore the noise and continue on our merry way? I am conflicted but would appreciate anyone’s rational advice.

….

Pull the equity for 2.9% and invest at 6%.

#221 sockeye sam on 04.05.16 at 4:50 pm

#200 Capital X

This person is telling you everything I’ve been trying to say on this blog for months. Ya’ll think I’ve bee lying, calling me a racist, telling me to move,telling me to deal with it etc. etc. Now can you see?

#222 Dan on 04.05.16 at 4:58 pm

Well, somebody will make money, somebody will lose.
Houses will be there. They are made in Canada. What else is?

#223 Dan on 04.05.16 at 5:18 pm

How much money, marijuana trade generates in BC and Vancouver ? Calufornia (according to Guvernor), has IT companies, BC has drug trade. Both are clean, new economies. LED certified and earth friendly…
So grab her ass and pose for that photo, baby.
Because it is 2015, right?

#224 Bob Feld on 04.05.16 at 5:24 pm

Looking at the chart, I don’t see any meaningful correction over the past 40yrs. just a steady uptrend.
Wondering where are the cataclismic past RE events often mentioned on this blog.

cheers,
BF

#225 SunShowers on 04.05.16 at 5:26 pm

Avoiding tax is not illegal. Get over it. — Garth
———————————————————–

Legality and morality are two very different things.

After all, the CRA simply classifies tax avoidance as cheating the taxman by violating the spirit of tax law, rather than the letter (evasion).

Telling somebody to “get over something because it’s legal” doesn’t carry much weight when you consider that at one time slavery was legal.

That was funny. Did you cringe a little typing it? — Garth

#226 Jenny on 04.05.16 at 5:26 pm

I would say that I do have a very good idea of it’s accuracy as I have been looking for a rental property for the past 6 months closer to the downtown core than my current location. Nothing in the vicinity of $2000 for a whole house.

I am surprised you would use anecdotal information to build your argument. It normally seems you tear apart this type of information that realtor’s, realty boards are providing and the media use.

#227 Ace Goodheart on 04.05.16 at 5:46 pm

RE: “Avoiding tax is not illegal. Get over it. — Garth”

Yes, avoiding tax IS actually illegal (in Canada anyway):

http://www.cra-arc.gc.ca/E/pub/tp/ic88-2/README.html

Nope. The GAAP rules cover activities not deemed permissible. A whole mess of tax avoidance techniques are. Get over it. — Garth

#228 Ace Goodheart on 04.05.16 at 5:56 pm

RE: again: Avoiding tax is not illegal. Get over it. — Garth

Just in addition to what I just wrote, the transaction that the Canadian Govt is looking at, in terms of “tax avoidance”, is actually very illegal and it is quite a simple transaction. Essentially it goes like this:

Person or persons are operating some form of revenue generating business, be it a corporation or otherwise. Bottom line is it makes money.

The business pays “consulting fees” to an off shore company, usually located in one of our favorite tax haven countries. Usually quite a lot of money is moved off shore in this manner. The person or persons then simply deducts this “consulting fee” as an expense, obtains a tax deduction off the income of the business they are operating, and pays less tax on a reduced net income.

This sounds fine. Consulting fees are a legitimate expense, right?

However, when we go and look at the offshore consulting company, say in the BVI or in the Cayman Islands, we find a post office box loosely connected to a Law Firm. What is happening?

The consulting fees are being paid to a shell company, with no assets, no address and no employees, in a tax haven.

So where does all the money go? Usually it goes right back to the person who is running the business that deducted the fees as a business expense. Because that person also holds the consulting company, in trust through the Law Firm in the tax haven.

That is tax avoidance. That, and having the “head office” of your corporation in the BVI, even though the corporation does not do business there, the BVI does not even have an airport that is capable of being used by anything larger than a Cessna, and there is no infastructure to support large corporate head offices.

This is illegal. Technically, legal, but really, it is a load of crock.

Everyone needs to also remember, when we are letting people do this sort of tax avoidance, what we are really doing, is allowing persons who owe income tax, to move money off shore, not pay the tax, and then the government has to then borrow money, which you and I then pay interest on, to pay the expenses, that should have been covered by the taxes that were not paid.

In other words, tax avoidance costs all of us money, because we are paying interest on the money the government borrows, to fill the hole caused by the wealthy not paying their fair share.

#229 understood by few on 04.05.16 at 6:02 pm

#219 Bottoms_Up on 04.05.16 at 4:30 pm

Garth, if there is nothing to hide, then there is nothing to hide. That is obvious.

———

Oh, think you just revealed your identity there Mr Toews.

“He can either stand with us or with the child pornographers.”

Same genius logic you are using there. “If you have nothing to hide….”

Nope, sorry. Gov’t doesn’t get to look into every aspect of our lives, whether that is online activity or financial activity just so they can “catch the bad guys”.

#230 tax avoidance on 04.05.16 at 6:24 pm

RE: “Avoiding tax is not illegal. Get over it. — Garth”

Yes, avoiding tax IS actually illegal (in Canada anyway):

http://www.cra-arc.gc.ca/E/pub/tp/ic88-2/README.html

Nope. The GAAP rules cover activities not deemed permissible. A whole mess of tax avoidance techniques are. Get over it. — Garth

===

Nobody would care about tax avoidance if it was clear-cut and available for all tax-payers, which in reality does not seem to be the case, looking at the fact, that which segment of tax payers utilize it overwhelmingly.

I am sure, ou Garth would write countless articles about these techniques, right on this blog.

After all, it is probably at least as beneficial as TFSA.

#231 BOOM! on 04.05.16 at 7:24 pm

#201 NOEL

I usually write a “limit” order to buy for 60 days at MY pre-agreed price. Sometimes, they get filled, sometimes they expire worthless and unfilled.

I set the price, to buy, or sell if that is my intent.

The market, being the fickle creature that it is moves in reactions to those two BIG emotions – FEAR and GREED.

When “I” put in a limit order to sell, or buy it is at a price i have done my best to research as being a ‘fair’ price my by standards. When selling, it leaves ME a ‘fair’ profit.

When buying, it leaves me room to ‘earn’ a fair profit over time.

I am typically the genre of a “buy & hold” kind of investor, who likes individual stocks, as well as properly designed ETF’s and Funds (with low expenses). Should fundamentals change, I will reassess my decision.

I also bear the full responsibility for my own cooking.

#232 Pablo on 04.05.16 at 8:06 pm

It was very nice to see the post from Elaine. I’m glad there are sensible people out there who are able to resist the insanity of the masses.

#233 NEVER GIVE UP on 04.06.16 at 12:33 pm

#195 tkid on 04.05.16 at 2:18 pm
#175, private wealth does NOT equal “money laundering” or “tax evasion”. It means wealth held privately. In other words, it’s the money I have after I pay taxes.

And offshore bank accounts do not equal “money laundering” or “tax evasion” either. It means you hold your money offshore.
—————————————————————-
The tax farm slaves of our society will not agree that even harbouring your tax paid money in a foreign land is legal as our government will always want it close enough for future confiscation.

The incrementalism of our taxation system will eventually lead to all our wealth being a few clicks away from Government confiscation when they run into trouble.

This is all thanks to our society not respecting ownership of earned wealth and turning a blind eye to new and more invasive laws that reach into our bank accounts.

Taxation should stay out in the open as a VAT or GST tax and not the huge mess of tax law that we have now.

Today’s tax law is simply a burden on good living.