No guff

STORE modified

The Bank of Canada won’t drop interest rates on Wednesday. They don’t need to. Besides, they wouldn’t dare.

First, there’s the dollar which this week swelled uncontrollably (I know the feeling) to almost the seventy-eight and a half cent US level. That’s the highest so far this year and a big leap from the days when this pathetic and irreverent blog posted a dollar bill emblazoned with T2 in a sombrero. Mea culpa. All he had to do was promise to spend $125 billion we don’t have, and voila.

Actually the budget did quite a bit for the loonie, promising all that stimulus spending over the current Liberal mandate and totally abandoning the goal of a balanced budget. Like the quantitative easing/bond-buying binge in the US, this helps inflate asset values because it literally creates money.

So, as mentioned the other day, the TSX is the best-performing index in the world at the moment (up more than 5% YTD). It’s also reflecting a bump in commodity prices, with oil having bounced off its lows of two months ago, to more than forty bucks. (It’s interesting to note the average commodity bear market lasts a withering 22 years with prices plopping 54%. This one is just seven years old and values have toppled 66%. The conclusion – done and done.)

And then there’s the data. As suspicious as it was, the January GDP number for Canada was friskier than a hormonal moose, while the March job stats left most economists somewhat shocked. It’s hard to believe more than 40,000 new paycheques were churned out last month, but that was the official report – and it supported the narrative that Canada, like crude, may have just bounced off the bottom.

So, no rate drop. Don’t need it.

But more importantly, reducing the cost of money any further would risk blowing up one of the very pillars supporting this borrow-and-spend economy, which is residential real estate. As written in stone here yesterday, it is societal obsession and rank speculation which is now turning an inflated market into a classic bubble with but one outcome. More than anything else – rich Chinese dudes, sleazy realtors or your mom – it’s been ultra-cheap money which has fed housing. Properties are not worth more because their intrinsic value has risen, but because they’re cheaper to carry.

The correlation between prices and rates is irrefutable. But it’s the relation between houses and debt that really has the central bank worried. My colleague Ryan Lewenza, chief Canadian strategist at Raymond James, mashed up this chart. Wow.

debt

So for all those people in Vancouver and elsewhere who stare at me with their doe eyes and say, ‘But Garth, it must be evil foreign guys buying because regular people don’t have the money’, this chart should tell you where the cash comes from. The banks. When debt goes up, so do prices. When prices bloat, so does borrowing. It’s no mistake real estate has never cost this much, or that families have never owed so heavily.

It all means risk. And no more rate drops. Not in your lifetime.

It also means our new finance minister, Bill Morneau, has a big problem on his hands. “We’ll watch what happens in the market,” Morneau said on TV. “And should we believe that there are things that we should do, we will consider those. We won’t give any advance sense of what we’re going to do because we’ll pay attention along the way and come to the right conclusions.”

Bill’s first action to cool the nation’s housing blaze failed. The new down payment rules (effective mid-February) to ensure first-time buyers have more skin in the game through larger down payments did diddly. If anything, the fact he telegraphed these changes almost two months in advance just threw more gas on the fire. Buying intentions were advanced. More bidding wars erupted. Prices spurted higher. So did risk.

If the April numbers coming out of Toronto and Vancouver approximate those of March, a responsible government would move more aggressively to shut down the markets’ advance. Let’s wait and see if we have one.

Meanwhile, lock in your mortgage.

178 comments ↓

#1 G on 04.12.16 at 5:34 pm

First!

#2 XenoPhobe on 04.12.16 at 5:37 pm

Im just here to be a XenoPhobe. Thank you very much.

#3 John Smith on 04.12.16 at 5:39 pm

Can’t wait for the crash

#4 Randy on 04.12.16 at 5:39 pm

The 30 year Bubble Economy keeps growing.

#5 armpit on 04.12.16 at 5:40 pm

Garth… what is your outlook on farmland? Do you own any?

#6 sanddancer on 04.12.16 at 5:43 pm

If “regular people” are fully responsible for the off the charts prices in the lower mainland then I’d like to know how they can possibly qualify for the huge morgages needed to buy the average property ??
As you say, wages etc haven’t even remotely kept pace with prices and even at these average dept ratios per person the math simply doesn’t add up ??……you can’t borrow that much $$$

#7 Old Man Too on 04.12.16 at 5:44 pm

According to the venerable CBC, Edmonton has 1328 new unlived in homes…That should bring prices down. But then nobody in YVR or TO cares about Edmonton.

http://www.cbc.ca/news/canada/edmonton/newly-built-but-unsold-homes-at-all-time-high-in-edmonton-1.3531691

#8 Jimmy on 04.12.16 at 5:45 pm

First!!
Get better SM.

#9 tom coates on 04.12.16 at 5:45 pm

i’ve been reading all sorts of gloom and doom about pensions in the near zero rate environment we find ourselves in…the greys (i’m a grey) have the money but we aren’t making any money on our pile…so we aren’t spending with confidence…i’m not into buying more toys but i might spend more on transportation or travel if i had confidence and more cash flow…at the end of the day i’m looking for a trouble free retirement…if you make me afraid about my pension i’m hanging on to everything i have..government diapers or depends..i need to have confidence

#10 Jumpman on 04.12.16 at 5:47 pm

Jumpman Jumpman those boys up to something… more fuel for the fire.
http://www.nytimes.com/2016/04/13/world/americas/canada-vancouver-chinese-immigrant-wealth.html?_r=0

#11 steerage steward on 04.12.16 at 5:49 pm

China’s 1 Percent Flock to Canada
http://www.nytimes.com/2016/04/13/world/americas/canada-vancouver-chinese-immigrant-wealth.html

#12 Brazil ex-pat on 04.12.16 at 5:50 pm

http://www.cnn.com/2016/04/11/politics/democracy-spring-arrests-protests-washington/

Speaking of politics, very little coverage of Democracy Spring where nearly 1000 people have been arrested in DC protesting bankers buying off politicians. But as we learned yesterday if your name is Goldman Sachs – purchasing your favorite govt is what you do for a living.

#13 Caught In The Grip on 04.12.16 at 5:51 pm

If one were to overlay aggregate Canadian bank earnings, I would suspect the trend would follow home prices & debt in similar fashion.

Shouldn’t one be concerned about the bank earnings (& their future share prices) then? There is no way they can come out of a housing correction unscathed given the fact that they have supplied the debt to fuel the bubble.

#14 Brazil ex-pat on 04.12.16 at 5:54 pm

DELETED

#15 Brian Ripley on 04.12.16 at 5:55 pm

I updated my Housing Starts Chart
http://www.chpc.biz/housing-starts.html

Of course Alberta/Calgary have waylaid their housing construction industry, and there is a slow down in BC/Vancouver as well, except it just means a heightened mania to buy anything with a roof in the YVR.

CITY ANNUALIZED
​Housing Starts MAR 31, 2016
​Toronto +0% Y/Y
Montreal +70% Y/Y
Vancouver +2% Y/Y
Calgary -37% Y/Y​

PROVINCIAL ANNUALIZED
​Housing Starts MAR 31, 2016
Canada +16% Y/Y
ON +29% Y/Y
QC +58 Y/Y
BC +7% Y/Y
AB -30% Y/Y

#16 Victoria Real Estate Update on 04.12.16 at 6:04 pm

NO ECONOMIC TRIGGER WAS REQUIRED FOR VICTORIA’S RECENT PRICE DECLINE

In 2010 there was excitement in Victoria as its housing market had recently shown significant year-over-year price gains.

The local media was all over it.

Local real estate professionals and mortgage holders thought that higher prices every month in Victoria was the new norm. Recent buyers gloated. Smugness was heavy. Real estate was the talk of the town.

Those who chosen not to buy, they said, would never get in. Recent buyers bragged to their friends about how much money they had made on their houses, based on what they heard the house down the street sold for.

Many who had recently taken on huge mortgages knew that they had bought just before things really went nuts and that the recent upward price movement would guarantee higher prices in Victoria from then on. How could anything stop prices from rising? It just wouldn’t happen.

They thought the current level of excitement with respect to real estate wouldn’t stop. They knew this, of course, because they had become overnight authorities on housing markets and they knew what to expect. They had, after all, shown a natural level of brilliance by buying when they did.

Those who disagreed with their assessment of things obviously didn’t know what they were talking about.

This was also the attitude in many American cities in 2006 just before house prices began to fall. Those who were smug about their paper gains were waiting for more.

It didn’t happen. House prices in several American cites fell more than 50%. West coast markets were among those that experienced the most speculative buying in the US. Increased levels of speculative buying was part of the reason that west coast markets were among those hit the hardest by the inevitable market correction.

As prices fell the smugness disappeared along with the paper gains. It was a disaster for many families.

The US economy wouldn’t have experienced the severe problems it did starting in 2008 if house prices hadn’t reached bubble levels and then, inevitably, began to correct in 2006.

Prices in the US haven’t recovered to the peak level reached in 2006, despite 7 years of emergency level interest rates.

The attitude in Victoria right now is similar to what it was in 2010, immediately before prices fell significantly.

This chart shows what happened with house prices in Victoria after the excitement began to disappear in 2010. Victoria’s housing market simply turned on a dime. It’s the classic outcome of a bubble market that had too much buyer excitement. It was a natural consequence of prices not being grounded in economic fundamentals – incomes and rents (think Victoria today).

Much of today’s market excitement is based on false information. Real estate “professionals” and the media are to blame for convincing many locals that wealthy buyers from Asia are moving the market. The stats show that only 0.68% of local real estate deals went to buyers from Asia.

This will result in an even deeper price correction in Victoria. It may also be steeper than it would have been if locals haven’t been given dangerous false information.

Victoria’s major price decline could begin by the end of this month.

As with Victoria’s last significant price decline, no economic trigger will be required. In fact, prices fell after 2010 in Victoria in a highly stimulated environment of falling 5 year mortgage rates.

. . . . . . . Single Family Home Prices. . . . . . . . .
. .Percent Above/Below May 2010 Price Level. . .
. . . . . .x = Toronto, * = Victoria (City). . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
+25%. . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . x. . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
+20% . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
+15%. . . . . . . . . . . . . . . .x. . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
+10% . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
+ 5%. . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
….0%. . . x*. . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
– 5%. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . .*. . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
-10%. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . .*. . . .
——————————————————————————
. . . . . . .May . . . . . . . .May. . . . . .December.
. . . . . . .2010. . . . . . .. 2012. . . . . . .2013. . .

(sources: indices of Victoria’s R/E board, Toronto’s R/E board)

The price data for Victoria (City) was taken from the local board’s frankenumber price index so the price plunge that it shows (11.7%) was likely significantly deeper and prices probably continued to fall well into 2014. Any price improvement that may have happened since then would be far less than what the frankenumber price index shows.

Prices across Greater Toronto gained 22.0% over the same period of time.

#17 Tuna on 04.12.16 at 6:13 pm

I heard an ad on the local radio the other day…

“Are you afraid that your adult children are being priced out of the Vancouver housing market forever?”

Here we go I thought to myself…

“Well join us at our free seminar on how you can help your adult children get on the housing ladder while protecting your own retirement funds…”

Yeah right I thought. People in Vancouver are actually bat s*** crazy, and they’re bordering on 1939 style scapegoating with their whinging about the Chinese. Greed and fear. Greed and fear.

#18 Move on VREU on 04.12.16 at 6:13 pm

“Victoria’s major price decline could begin by the end of this month.”

Alright everyone, VREU is predicting in that oh so qualified and learned way that April will be the month that prices COULD turn on a dime in Victoria.

Oh, if only that could be true. Instead, I will put out my ‘credible’ prediction, because what other kind are there on the internet, that we will see record sales and even more price increases – and this will last for years.

The Vancouverization of Victoria continues….

#19 3s on 04.12.16 at 6:14 pm

http://www.nytimes.com/2016/04/13/world/americas/canada-vancouver-chinese-immigrant-wealth.html?hp&action=click&pgtype=Homepage&clickSource=story-heading&module=photo-spot-region&region=top-news&WT.nav=top-news&mtrref=www.nytimes.com&gwh=486E1D179ECB014E79765D6B6C5F4C0B&gwt=pay

#20 JSS on 04.12.16 at 6:16 pm

I would rather invest in the TSX (e.g. XIU ETF), then in housing. I foresee the TSX to hit 14,100 by year’s end.

#21 Tuna on 04.12.16 at 6:16 pm

If “regular people” are fully responsible for the off the charts prices in the lower mainland then I’d like to know how they can possibly qualify for the huge morgages needed to buy the average property ??
As you say, wages etc haven’t even remotely kept pace with prices and even at these average dept ratios per person the math simply doesn’t add up ??……you can’t borrow that much $$$

————————————————————-

The average person surely can’t, but the media is focusing on the above average house when they run those stories on crazy selling prices. Speculators/investors/well off buyers are paying those prices and it’s skewing the market stats… meanwhile the peons get whipped into a frenzy and get all 1939 towards anyone with the slightest Asian persuasion.

#22 common sense on 04.12.16 at 6:16 pm

Visited a friend in St. Catherines today who had rented a house…

Small 2 bedroom, 800 sq ft…$1000 rent, Landlord paid $140 in 2014 put in $10,000…listing price today? $250,000. Why? Basic supply and demand…few houses available in the Niagara Peninsula for sale.

Friend’s new rent is $1200 tiny 1 bedroom apartment as very few rentals are on the market.

Oil correction over? For now…Houses bubbling, markets bubbling due to stimulus and low rates. Far more oil on the market and demand slowing compared to last crash.

Enjoy it while we can folks…the balls are still in the air!

#23 CrashMan on 04.12.16 at 6:23 pm

Its always “cant wait for the crash”. Year after year after year. I dont think its happening people. Get on with your life !

#24 Market Inquisitor on 04.12.16 at 6:23 pm

I agree with your sentiments Gartho, but large part of the Loonie rally has to do with oil, but still a welcome sign. Totally agree BOC won’t drop rates and will be much more likely to raise them.

Speaking of oil.. We have the Opec meeting coming, here are my thoughts.

https://marketinquisitor.com/2016/04/12/opec-oil-doha-meeting-outlook

#25 Steve on 04.12.16 at 6:26 pm

Still confused

#26 That guy on 04.12.16 at 6:29 pm

What does the R mean in the plot?

#27 Victoria Real Estate Update on 04.12.16 at 6:31 pm

“Properties are not worth more because their intrinsic value has risen, but because they’re cheaper to carry.”

With house prices in Victoria not much higher than in 2008 it’s a case of a major loss in intrinsic value (-30%?). This drop in value is being hidden by cheaper carrying costs.

If interest rates would have remained at 2008 levels, instead of being slashed to emergency levels, we would have much lower house prices today in Victoria (-30%?).

Basically houses in Victoria are intrinsically worth less than in 2008. (-30%?) (-40%)

To understand this you need to understand Garth’s statement about intrinsic value.

Properties across Canada are not worth more because their intrinsic value has risen (even though house prices are approx. 30% higher than in 2008), but because they’re cheaper to carry.

There has been no gain in intrinsic value of houses in Canada that are more expensive by 30%, for example, compared to 2008.

The intrinsic value of houses in Victoria (that are almost the same price as in 2008) have fallen a lot (30%?) since 2008.

#28 Randy on 04.12.16 at 6:39 pm

The Obama Bubble team is working hard to hide the bad news.

https://www.youtube.com/watch?v=Ne4YJYLm62g

#29 Mark on 04.12.16 at 6:42 pm

“Shouldn’t one be concerned about the bank earnings (& their future share prices) then? There is no way they can come out of a housing correction unscathed given the fact that they have supplied the debt to fuel the bubble”

The 1990s experience taught us that banks can dramatically outperform the RE market, especially coming out of a RE bubble. The big-5 mostly quadrupled their share prices and grew their earnings significantly.

Why? Because banks invest in credit, which is senior to equity in the capital structure of the ownership of a house. The credit positions are guaranteed, in theory, by the CMHC. So basically the banks own a money good bond in an otherwise deflationary environment. Throw an expansion of risk premia into the mix, and bank earnings should do well.

Additionally, as speculative enthusiasm in the economy leaves the housing sector, it will have to go somewhere. While banks are unlikely to be the severe outperformers of the stock market going forward, the entire stock market should see significantly more interest. Currently the “Canadian” housing market trades at a P/E of around 35, while the stock market trades at 15 or less. So if you run the math, with the valuations cyclically reversed, you have the stock market growing by ~6X relative to housing.

The early 1990s bubble was characterized heavily by people speculating with ~25% downpayments as CMHC subprime mortgage insurance was only minimally available to speculators. The contemporary RE bubble up to the ~2013 peak, was characterized by the average credit buyer bringing a 10% down-payment to the table. So on a relative basis to the stock market, the RE bubble today is extreme compared to that of the early 1990s.

The real wildcard for bank equity owners is what the government ultimately does when they’re presented with a $100-200B expense to recapitalize the CMHC. I personally expect the GoC to implement a special surtax against the banking sector, and impose various quid pro quos including requiring them to take over certain insolvent credit unions particularly in the bubbly cities, at a loss. So just like (then Finance Minister) Paul Martin’s rejection of bank mergers caused a significant drop in the bank stocks, I expect a similar sort of event to occur at some point in the future.

“What does the R mean in the plot?”

“R” is the correlation coefficient, which is a concept in statistics describing how related two datasets are.

#30 Mike in the Okanagan on 04.12.16 at 6:45 pm

Garth, in case you think HAM is just a myth in Vancouver check out this article in today’s NY Times:

http://www.nytimes.com/2016/04/13/world/americas/canada-vancouver-chinese-immigrant-wealth.html?_r=1

That’s funny. The NY Times rewriting the Province. — Garth

#31 Madcat on 04.12.16 at 6:47 pm

According to the article, many of the wealthy young Chinese supercar owners are known as “fuerdai” which is a Mandarin word that translates as “rich second generation.”

“In Vancouver, there are lots of kids of corrupt Chinese officials,” said Shi Yi, 27, the owner of Luxury Motor, a car dealership that caters to affluent Chinese. “Here, they can flaunt their money.”
http://blogs.theprovince.com/2016/04/12/how-serious-is-vancouvers-real-estate-crisis-the-new-york-times-is-profiling-us/

Really, there is no denying foreign investment is driving the Vancouver housing market…. My landlord was bragging how his buddy made $300,000 last year flipping a house that he had only owned for just over a year lol! I don’t know really why I bother working… in fact, I don’t know why anyone in Vancouver bothers to work at all. All we really need to do is just by a house, wait a year and flip it for an 25%….

#32 Star Stuff on 04.12.16 at 6:48 pm

#26 That guy on 04.12.16 at 6:29 pm

What does the R mean in the plot?

The retard correlation coefficient.

#33 common sense on 04.12.16 at 6:49 pm

You people make me laugh when you say they may or should RAISE RATES…

PLEASE..Think about it…for a moment…

1 and I say 1 ONE .25% basis points and everyone starts screaming….

This year? Never…maybe after the US Election…

The show (joke) must go on or what is the alternative? T2 being held responsible or Yellen for ending the party?

C’mon…think about it.

#34 For those about to flop... on 04.12.16 at 6:50 pm

VRUE………………………………………………………..
…………….W………………………………………………
…………………H…………………………………………..
…………………….O……………………………………….
……………………………………………………………….
…………………………C…………………………………..
……………………………..A………………………………
…………………………………R…………………………..
……………………………………E………………………..
………………………………………S……………………..
…………………………………………?…………………..

M41BC

#35 White Crock BC on 04.12.16 at 6:52 pm

Like clockwork, at some point over the next few days, spokesmen for Saudi Arabia and/ or Russia will be saying: “Pact? What pact?”

Wait for it.

#36 rates on 04.12.16 at 6:56 pm

DELETED

#37 Bonhomme Carnaval on 04.12.16 at 6:57 pm

Prices will continue to increase until a combination of the following factors occur :

– rates rise
– unemployment rises
– bankruptcies rise
– demographics take effect

Values have been disconnected from fundamentals for years, but people have been equally disconnected and delusional.

In an ever increasingly ‘mobile’ economy, the vast majority of people seek to tie themselves down to one geographic location (?).

There’s nothing that says that prices cannot regress by 60, 70, 80 or even 90%. It wouldn’t be the first time that an ‘unimaginable’ economic event occurs.

In addition, when values decline the % vs. (T) curves will be different for every province, every city, every neighborhood.

Lastly, if I had to make a prediction (even though I don’t believe in crystal balls) on when we should start to experience a soft/hard landing of the Canadian residential real estate market (depending on your location); somewhere between Q3 2017 and Q2 2018.

#38 Mark on 04.12.16 at 6:57 pm

“There has been no gain in intrinsic value of houses in Canada that are more expensive by 30%, for example, compared to 2008. “

Very true and well put. Meanwhile the TSX-index constituent companies have retained/re-invested 8 years of their cashflows, less a relatively small amount paid out as dividends. Balance sheets are extremely clean. Cash levels are extreme (with ironically a lot of corporate cash financing the RE bubble!).

Can you imagine what the TSX index would be at if the TSX were to be speculated up to levels similar to that of contemporary housing? We’re probably looking at an index level in excess of 50,000.

The ‘sad’ thing about this is that very few Canadians will be able to participate because their portfolios are severely overweight housing and debt. The rocket will take off, but almost nobody will be on it!

#39 Former Oil Patch Worker on 04.12.16 at 6:58 pm

I hope some of that deficit makes it’s way to me. Oh well the good news I am not paying much in the way of taxes!

Maybe I can get a job gassing up the new F35’s when they arrive. Stealth fighters are definitely a national priority for Canada. After all, look at the number of F18’s we’ve lost in combat over the last 20 years. Also, we need to be able to protect ourselves from Russian aggression. We’ll probably also need some in flight refueling planes since the F35 can’t get from Cold Lake to the arctic and back again on a single tank. Or maybe they could put a gas station in Yellowknife so they could make a pit stop.

#40 mike from Mtl on 04.12.16 at 7:01 pm

#24 Market Inquisitor on 04.12.16 at 6:23 pm
I agree with your sentiments Gartho, but large part of the Loonie rally has to do with oil, but still a welcome sign. Totally agree BOC won’t drop rates and will be much more likely to raise them.

=====================================

Agreed. Wouldn’t that be something; BoC raises and Fed doesn’t (because they’re cornered and can’t admit).

#41 understood by few on 04.12.16 at 7:05 pm

And another wall of unreadable copypasta from VREU.

People who bought in 2010 are doing fine (if they bought in the core). Problem with any city wide estimate is you have the sales mix and different municipalities to deal with. People who bought in the core had their assessments go down after 2010, however, at worst sales prices in the were flat. Overall prices were down, but there were less listings in core (which helped prop up prices.. supply meet demand). Now prices have jumped a good 30-40% from 2010 levels (in core).

If you weren’t allergic to realtors you could ask one to set you up with a list of pendings to verify for yourself. Then you can use e-value BC to see what prior sales were.

You’re whole “prices could drop” thing is tiring. Same goes for any asset.

Victoria is a horrible place to buy right now. That’s because of the sale to listing ratio. It’s a sellers market. You are never going to get a “fair” price when there are more (horny) buyers than (greedy) sellers. You missed out on the dip and now you will have to wait this cycle out until we end up in a buyer’s market again (which will come, it always does). Could be a while though with the excitement around “Vancouver money”, which may or may not be real, but is definitely a driver in the current craziness.

Also, the deep low you are hoping for won’t happen. Yes prices will drop, but in Victoria you are competing to buy in desirable areas against families with 2 gov’t incomes (so easily 140K gross). Those gov’t income families also have pensions, so no worries about putting enough money into investments, it can all go into their “nest egg” home which they expect to appreciate greatly before retirement.

#42 I love real estate on 04.12.16 at 7:09 pm

It sounds like all the economic elements are there for a steady price increase in the 416/905 for a long time to come. No bubble here.

I’m starting to like the Liberals after all :)

#43 Jesse Harrison on 04.12.16 at 7:19 pm

Canada 30 year bond today is 1.99%. Rates will rise when dinosaurs roam the earth again.

#44 Panhead on 04.12.16 at 7:19 pm

#17 Tuna on 04.12.16 at 6:13 pm
I heard an ad on the local radio the other day…
“Are you afraid that your adult children are being priced out of the Vancouver housing market forever?”

Let me guess … CKNW … probably sandwiched between 10 minutes or more of other commercial drivel …

#45 rainclouds on 04.12.16 at 7:22 pm

#12 Brazil

Live in any of these places? 32 of 50 in…………BRAZIL! Quite an accomplishment………..and yes, I have been to Brazil.

http://www.visualcapitalist.com/violent-cities-world/

#46 WalMark of Sadkatoon on 04.12.16 at 7:24 pm

it’s sad that we need to be made to understand that there’s a correlation between debt and asset price

#47 common sense on 04.12.16 at 7:25 pm

#34 Flopper : Now that’s funny!

#35 White Crock BC : BINGO! Manipulation? Never.

Has anyone noticed since the great rebound on 2016, NOT 1 FED official has been marched out to talk up the economy yet they were there daily when things went south for a while…

#37 Bon man: I take demographics for $100.

#48 WalMark of Sadkatoon on 04.12.16 at 7:25 pm

the correlation between debt and real estate prices in YVR and YYZ would be even tighter

#49 IKnow on 04.12.16 at 7:27 pm

#18 Move on VREU

Vancouverization of Victoria continues….

—————-

As long as the China-sub-urbanization-resortization of Vancouver continues….

#50 Prairieboy43 on 04.12.16 at 7:28 pm

@#39 FOPW, Airstip in Inuvik, accommodates f18. There is a hanger there specifically for the event. 4-6 jets out of Inuvik. Plus I think each jet has a team of 10-15 members.
PB43

#51 mike leblond on 04.12.16 at 7:28 pm

“China’s rich kids head west” ” Why China’s Super Rich send their kids aborad” (including Vancouver, that is…) http://www.newyorker.com/magazine/2016/02/22/chinas-rich-kids-head-west?intcid=mod-most-popular

#52 rainclouds on 04.12.16 at 7:29 pm

#41 understood, “in Victoria you are competing to buy in desirable areas against families with 2 gov’t incomes (so easily 140K gross). Those gov’t income families also have pensions, so no worries about putting enough money into investments, it can all go into their “nest egg” home which they expect to appreciate greatly before retirement.”

Interesting theory. On the other side of the country Halifax is a mirror image demographically speaking. (Pop aprox 400k, Provincial Capital/Government, 5 Universities, Major Naval Base) Housing is much cheaper………

#53 ThePressure on 04.12.16 at 7:30 pm

Sadly, I’m giving in and signing up for a mortgage today. I’m trying to leverage the cheap rates to buy in a community that I think is undervalued. I don’t expect huge returns or frothiness but I think that it is a safe investment.

What is interesting to me is what my bank is encouraging. I want to make a large down payment. Keep the monthly payments very reasonable and avoid getting too leveraged. They want me to split my down payment in half and buy two properties, maximizing my leverage on each. Wowza.

#54 Okanagan Man on 04.12.16 at 7:34 pm

VREU, please no more graphs looking at the period 2010 to 2014.

Who cares when it is 2016. The market may go down in the future, but I think it still has legs. Anyone who bought in 2010 in the core is doing just fine with their investment.

April numbers will once again show an increase. If so perhaps you could just drop it for a while.

#55 BOOM! on 04.12.16 at 7:38 pm

“No bubble here.”

Funny, but WHERE have I heard that before? Hmmmm, can’t put my finger on it exactly, but I think it had something to do with Real Estate? Maybe, Florida, no it was California, no wait, resort properties… maybe Beanie Babies, or collectibles of another sort. Fine art, perhaps??

I forget. No, it was emerging markets. No, wait, I think it was high yield bonds, or, maybe Blondes….

Maybe it was food groups which have seemingly exploded in price? Dam, I can’t remember what was the ‘hot thing’ last time I looked. Maybe it was Smoking Man’s novel -not yet e finished Masterwork- but we await.

Maybe, if I just stay properly invested I’ll just grow richer, over time? …sort of like magically…

#56 Doug t on 04.12.16 at 7:38 pm

Business partner of mine just got back from 4 city business trip to China – executives for 3 of the largest pulp and paper mills in the world told him the corruption in their banking system is so significant that govt officials are afraid to open it to investigation fearing the results could topple the economy to the ground – and yes they said the rich there are definitely moving money out as fast as they can

#57 jess on 04.12.16 at 7:41 pm

best defense is an offense? “Don’t hate the player, hate the game. ” franchised rogues

mossack says:
“These reports rely on supposition and stereotypes, and play on the public’s lack of familiarity with the work of firms like ours”
=====================================
Mossack Fonseca and the ‘Lava Jato’ (car wash)… April 8, 2016
http://www.newsroompanama.com/news/panama/panama-pummeled-twin-scandals

The murky history of Financial Pacific
Posted on April 11, 2016 in Panama
SCANDAL plagued Financial Pacific(FP) with its reported links to money laundering, former President Ricardo Martinelli, stock manipulation and jailed ex- Supreme Court Judge, Alejandro Moncada Luna was recommended to clients of Mossack Fonseca as a brokerage par excellence.
http://www.newsroompanama.com/news/panama/murky-history-financial-pacific

#58 Porsche on 04.12.16 at 7:44 pm

I don’t think I’ve ever seen a Brazil ex-pat post

DELETED

#59 Chaddywack on 04.12.16 at 7:44 pm

Am I right that all this stimulus will hike inflation? If so, could the BOC avoid raising interest rates in an inflationary environment? What are the risks of not raising interest rates during inflation?

(I wasn’t around in the early 80s when it happened before)

#60 WallOfWorry on 04.12.16 at 7:51 pm

IMF downgraded global GDP growth forecast yet again today. Greece, Puerto Rico, Brazil, all on their way to not being able to even service their debt. The concern Garth raises about Canadian employment applies equally to the US – all jobs in the low paying service industry (at least Canada has manufacturing coming back a little). So while we can all agree that the real estate evaluations defy logic, the sad reality is that this charade can carry on far longer than anyone can anticipate as the US has a long road ahead of it to ever restore rates to normal levels (wasn’t it just 6 months ago they said 4 increases in 2016, now it looks like maybe one may occur).

#61 bigtowne on 04.12.16 at 7:53 pm

The Leap into Poverty and export macrame instead Manifesto campaign has never meditated on the truism: when the world hands you lemons make lemonaide or in the case of Alberta when the world hands you energy sell oil?

If ever a person was a shoe-in for Prime Minister it has to be Rachel Notely…the NDP are really forever goners if they don’t see the Prime Minister in Rachel nothing will bring them out of their coma.

T2 knows how to put a fire under a currency. I had no idea how much I luv our guv’mnt.

Did ya see all those low profile dead end careers upping their game as samples of NDP possibilities. Wow a new low in Canadiana. Just when u think it aint possible. Yes my fellow citizens we are a funny bunch at the end of a long mean winter season. Where is that bottle of Jack Daniels?

#62 Yuus bin Haad on 04.12.16 at 7:56 pm

I don’t believe the Liberals’ plan involves creating money.

#63 Linda on 04.12.16 at 7:57 pm

Apparently oil’s recent rise is on speculation that OPEC will come to an agreement on price-fixing – er – limiting output so as to allow oil prices to increase. Since the members of OPEC apparently need petrodollars to be somewhat more robust as hey, they too have budgets to balance & current oil prices are not delivering the rosy forecast they would like. Whether OPEC will come to agreement is another matter. Plus there is the small issue of an oil glut to get through before any price increase could be said to be reliable in nature.

As for interest rate increases, some slight adjustments upward may occur. I should think the government is going to want very slow & not too high rate increases given the massive stimulus (deficit) budget. Plus there is still that little question as to whether explosive growth in retirees will have a dampening effect on economic growth or interest rates in general (vide Japan).

#64 Mick on 04.12.16 at 8:02 pm

Almost no chance for a rate drop tomorrow, but I do expect some dovish, negative leanings in the press conference to stop CADs rise.

#65 Porsche on 04.12.16 at 8:08 pm

TANKER JAM

http://finance.yahoo.com/news/band-plays-global-oil-glut-130103301.html;_ylt=AwrXnCDljQ1XnVcAoTGTmYlQ;_ylu=X3oDMTEzYThhM21qBGNvbG8DZ3ExBHBvcwMyBHZ0aWQDVklEUFJEXzEEc2VjA3Nj

#66 Mark on 04.12.16 at 8:11 pm

“Am I right that all this stimulus will hike inflation? If so, could the BOC avoid raising interest rates in an inflationary environment? What are the risks of not raising interest rates during inflation?”

The deficit “planned” by the Liberal government is, adjusted for inflation, fairly similar to the deficits actually ran by the Conservatives ($26B/year over the decade of Harper’s government). So I wouldn’t expect it to be any more inflationary than was experienced under Harper.

The real elephant in the room is the severe amount of demand truncation that is likely on account of homeowners no longer being able to extend their credit lines and the speculators being forced to reign in their activity. It is for this reason that CPI will likely continue to trend down, especially with a rising CAD$. Necessitating further rate cuts.

Of course they’re “on hold” tomorrow, but come the end of May, if the USD$/CAD$ pair is closer to $1.2, they very well could move downwards another 25bp.

If an inflationary period existed, of course, not raising rates might allow the economic distortions to become even more severe. But the real battle today is deflation, and the BoC’s next move is very likely to be cuts. Especially as there is mainstream acceptance of the falling/stagnant RE prices experienced in Canada in the post-2013 period.

#67 Mark on 04.12.16 at 8:13 pm

“it’s sad that we need to be made to understand that there’s a correlation between debt and asset price”

If foreign inflows were a factor, then there would be decorrelation. No decorrelation = no meaningful foreign inflows. Its pretty simple.

In extremus, if the entirety of Vancouver were bought “in cash” by “Chinese”, debt would trend towards zero.

#68 Victoria Real Estate Update on 04.12.16 at 8:22 pm

# 18 Move on VREU

# 197 Move on VREU (April 3rd)

“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…

Nutbar stuff.

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

Do all Victoria real estate “professionals” think there’s a global capital scourge?

#69 sanddancer on 04.12.16 at 8:27 pm

Just imagine Garth of there is even some truth to that Nyt article…..a 20 yr old art student and a $500k Rolls-Royce. ….maybe that level of foreign $$ being deposited into our local economy has an effect !!!

#70 Victoria Real Estate Update on 04.12.16 at 8:27 pm

# 54 Okanagan Man

Perhaps if you could read and comprehend what others write you’d be able to understand the relevance of some of my charts.

#71 Gerry on 04.12.16 at 8:27 pm

If you think that speculation is not responsible for driving prices in Toronto and Vancouver, think again

http://www.nytimes.com/2016/04/13/world/americas/canada-vancouver-chinese-immigrant-wealth.html?hp&action=click&pgtype=Homepage&clickSource=story-heading&module=photo-spot-region&region=top-news&WT.nav=top-news&_r=0

#72 Victoria Real Estate Update on 04.12.16 at 8:32 pm

# 41 understood by few

Prices in the core are not 40% higher than in 2010.

You real estate “professionals” take lying to new levels.

First it was “buyers from Asia suddenly discovered Victoria”. That was proven wrong with stats – 0.68% of buyers in Victoria were from Asia.

Now prices are 40% higher than in 2010.

No proof. Just lies.

#73 gut check on 04.12.16 at 8:33 pm

#64 Mick on 04.12.16 at 8:02 pm
Almost no chance for a rate drop tomorrow, but I do expect some dovish, negative leanings in the press conference to stop CADs rise.

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

I agree. I imagine there is some backroom mulling of a cut – some pressure to do it. CAD is on a tear that could not have been foreseen.

#74 BS on 04.12.16 at 8:40 pm

If the April numbers coming out of Toronto and Vancouver approximate those of March, a responsible government would move more aggressively to shut down the markets’ advance. Let’s wait and see if we have one.

Surely you jest?

The T2 government will ride this bubble until it implodes. With housing going parabolic right now we may be months away from the big pop.

Then we go in and out of recession for 3 years, lots more borrowing, declining tax revenues, new lows on the CAD and the Liberals are decimated in the next election.

#75 off with your head on 04.12.16 at 8:46 pm

#34 For those about to flop… on 04.12.16 at 6:50 pm

VRUE………………………………………………………..
…………….W………………………………………………
…………………H…………………………………………..
…………………….O……………………………………….
……………………………………………………………….
…………………………C…………………………………..
……………………………..A………………………………
…………………………………R…………………………..
……………………………………E………………………..
………………………………………S……………………..
…………………………………………?…………………..

M41BC
/////////////////////////////////////////////
Take a look in the mirror .

M41BC …………….W………………………………………………
…………………H…………………………………………..
…………………….O……………………………………….
……………………………………………………………….
…………………………C…………………………………..
……………………………..A………………………………
…………………………………R…………………………..
……………………………………E………………………..
………………………………………S……………………..
…………………………………………?…………………..

#76 Kevin in Wpg on 04.12.16 at 8:52 pm

We are in the “Return to Normal” stage in Winnipeg. The spring selling season is going to hurt.

http://blog.stocktwits.com/wp-content/uploads/original_15986178.png

http://members.shaw.ca/shomimore/wpg_march_real_estate.jpg

#77 Variable for Life on 04.12.16 at 8:57 pm

“Meanwhile, lock in your mortgage.”

No thanks, variable beats out fixed historically. I’m all-in variable for my remaining mortgage.

If we see an interest rate hike, it will certainly be an insignificant amount.

#78 Cici on 04.12.16 at 8:58 pm

#6 sanddancer

Easy: shadow lenders (check out how many Vancouver families are cash strapped due to their high home loans and have to eat in food banks), big downpayment gifts from mom/dad or other family members, and rental suites (which are now apparently part of the carrying cost calculation for mortgage approval). It all helps, until it doesn’t…

#79 gladiator on 04.12.16 at 9:04 pm

I second #6 sanddancer’s question

Can anyone share any ideas of how this can happen?

Bueller?

#80 IHCTD9 on 04.12.16 at 9:15 pm

#74 BS on 04.12.16 at 8:40 pm
If the April numbers coming out of Toronto and Vancouver approximate those of March, a responsible government would move more aggressively to shut down the markets’ advance. Let’s wait and see if we have one.

Surely you jest?

The T2 government will ride this bubble until it implodes. With housing going parabolic right now we may be months away from the big pop.

Then we go in and out of recession for 3 years, lots more borrowing, declining tax revenues, new lows on the CAD and the Liberals are decimated in the next election.
—————-

T2 will actually be on his knees praying for the bubble to hold on ~four more years. If it does, CPC should not even bother trying to run in the next federal election and just wait for the planets to start coming out of alignment.

#81 For those about to flop... on 04.12.16 at 9:17 pm

Off your [email protected]

And here I was thinking “Who cares” in the mirror would be ?SERAC OHW

M41BC

#82 gut check on 04.12.16 at 9:25 pm

great blog post Garth!
I don’t understand how a rate cut would blow the real estate market though – wouldn’t that goose it?

or maybe by blow you mean inflate?

#83 Samantha on 04.12.16 at 9:26 pm

Garth, a responsible government should stay away from the real estate market, and let the free market establish the prices of houses, condos, and land. And yes, this also means dismantling CMHC.

#84 The Great Gazoo on 04.12.16 at 9:26 pm

US DOE Energy Information Agency is forecasting US domestic oil production to decline from 9.18 million barrels of oil per day in Jan to 8.11 million barrels of oil per day in Sept of this year, see table 4a.

This represents a 1 million barrel per day decline in only 9 months. Pretty significant decline if you ask me! This figure does not include declines in production from around the world due to massive capex cuts we have seen.

http://www.eia.gov/forecasts/steo/

On the demand side, the International Energy Agency is forecasting world oil demand to grow by 1.2 million barrel per day in 2016.

https://www.iea.org/oilmarketreport/omrpublic/

Many other organizations forecasting higher demand figures, but lets be conservative shall we. So 1 + 1.2 = 2.2 million barrel per day change in supply demand balance – just from these two items in 2016.

No wonder oil is heading higher.

#85 Love my Kia on 04.12.16 at 9:30 pm

Just watching Trump on CNN, he is saying that the US is being ripped off on trade deals and he will renegotiate to their advantage.

With this knowledge, why would anyone in Canada want Trump to win? Its akin to being excited choosing your executioner.

Con ideology at work, short sightedness.

#86 fancy_pants on 04.12.16 at 9:56 pm

lock in your mortgage? Yeah really, heaven forbid they pound us with another 1/4 % bump. More QE before any significant rate increases. QE is the tool of choice: easy to hide, and works like a giant debt eraser. And inflation will be reported @2 % regardless whether cauliflower is $2 a head or $8 a head. ta-da!

#87 AK on 04.12.16 at 10:00 pm

Love the picture above.

Las Vegas, baby….

#88 BS on 04.12.16 at 10:01 pm

gladiator on 04.12.16 at 9:04 pm
I second #6 sanddancer’s question

Can anyone share any ideas of how this can happen?

Every time a property is sold money is made available to buy a new one. For example do you think the person who sold that Dunbar bungalow for $4 million last week is putting the money into RRSPs? Nope, they are buying a bigger and better house with $4 million down. Wages do not matter with $4 million down and a HELOC to help with the mortgage payment.

Then for ever property that gains value new/more credit is made available to buy a second, third or fourth property. Or buy your kids a house. The bubble has created massive equity for so many home owners. When you have enough equity wages are irrelevant to the lender.

Can’t make ends meet from your wages after you buy the bigger and better house or your second property? No problem just use the HELOC as an ATM. You do not need wages when your house is an ATM. Until the ATM stops producing cash.

#89 Mark on 04.12.16 at 10:06 pm

“With this knowledge, why would anyone in Canada want Trump to win? Its akin to being excited choosing your executioner. ”

Because Canada is a significant supplier of industrial inputs to the US manufacturing machine? So if the US gets back on its feet by pursuing a more balanced trade agenda, Canada is almost certain to benefit.

Also Trump has pledged to abolish certain abusive labour importation schemes like the H-1B visa. This would be good for Canadian IT and engineering professionals who have largely been muscled out of the US market by lower-cost offshore resources and service providers.

Whether it will all work, I don’t know. But the economic policy pursued in the area of trade in goods and labour over the past 2 decades has been relatively disastrous to the US and Canadian economies. Trump is at least proposing to examine and repeal some of the most abusive practices.

#90 Sheane Wallace on 04.12.16 at 10:11 pm

But more importantly, reducing the cost of money any further would risk blowing up one of …

Repeat with me: It is not money, it is coupons. Money are up 15 % YTD, coupons are down.

#91 family beagle on 04.12.16 at 10:27 pm

My wife works with a few RE buyers from China and says they paid minimum down and got regular bank mortgages based on their foreign assets. They secured mortgages before they got a job/immigrated, because their low wage here would disqualify them.

I believe majority of speculative purchases are mortgaged as well…the majority of spec home buyers I know are locals or from the interior who own multiple properties backed by equity and 20% down. Your debt/price chart gets a wag.

#92 Bottoms_Up on 04.12.16 at 10:28 pm

Well it appears the liberals rejigged their child benefits calculator, now with the input of adjusted family net income (instead of gross):

http://www.budget.gc.ca/2016/tool-outil/ccb-ace-en.html

It is worth double checking if you haven’t done it in awhile.

#93 No Mercy on 04.12.16 at 10:30 pm

#39 Former Oil Patch Worker

Why invest in F35s? Teck from the 1990’s versus Drone Teck of of now!

http://www.fool.com/investing/general/2014/01/04/drones-are-the-future-of-war-so-why-is-the-pentago.aspx

Next

#94 No Mercy on 04.12.16 at 10:37 pm

#6 sanddancer

I know someone,in Vancouver, who’s tax return was 50k net income but had 1.2 Million in debt for 2 homes worth 1.4 Million last year.

What is wrong with that scenario?

Next.

#95 Sheane Wallace on 04.12.16 at 10:43 pm

#94 No Mercy on 04.12.16 at 10:37 pm
#6 sanddancer

I know someone,in Vancouver, who’s tax return was 50k net income but had 1.2 Million in debt for 2 homes worth 1.4 Million last year.

What is wrong with that scenario?

Next.
——————-

No worries, it is the new norm.

Big Bill M. is watching it with a microscope, not that he can find anything with it

#96 WalMark of Sadkatoon on 04.12.16 at 10:49 pm

What is wrong with that scenario?

I totally agree. I also know a wage slave who has a similar income who was able to secure 3 homes and $2m in debt. I guess I underestimated his determination and the stupidity of our lenders

#97 DON on 04.12.16 at 11:10 pm

#6 sanddancer on 04.12.16 at 5:43 pm

If “regular people” are fully responsible for the off the charts prices in the lower mainland then I’d like to know how they can possibly qualify for the huge morgages needed to buy the average property ??
As you say, wages etc haven’t even remotely kept pace with prices and even at these average dept ratios per person the math simply doesn’t add up ??……you can’t borrow that much $$$
*******************

Leverage, either their own home, parents home etc.

#98 Okanagan Man on 04.12.16 at 11:11 pm

#70 VREU…..I won’t stoop to your level with the pathetic personal insults.

I guess everyone who disagrees with you is a realtor? What about all the people who are buying the houses in Victoria? Are they all realtors too?

You are predicting a major price decline starting in April…..Not going to happen !

#99 wtf on 04.12.16 at 11:14 pm

I don’t think this market will stop in the lower mainland.
People are going crazy buying and selling higher in matter of weeks. Surrey of all places, 40 year old homes unrenovated are going for around $1 million! fml!

#100 Sheane Wallace on 04.12.16 at 11:16 pm

#96 WalMark of Sadkatoon on 04.12.16 at 10:49 pm
What is wrong with that scenario?

I totally agree. I also know a wage slave who has a similar income who was able to secure 3 homes and $2m in debt. I guess I underestimated his determination and the stupidity of our lenders
———————-
Lenders are not stupid. Politicos backing CMHC are.

#101 chumpy le chump on 04.12.16 at 11:21 pm

I posted a few weeks ago that I had decided to list my house. I live in the western part of West Vancouver.

Listed it on March 21st. Had an open house the following weekend, with the idea of receiving offers up until March 31. We listed it for 86% more than what we paid in June 2013. We had put about $80,000 into renos and improvements.

Had about 37 groups through the house between March 24th and March 31st. Most were Chinese, but most of those were already living on the west side of Vancouver, and were interested in moving to West Van for the schools.

That group produced 2 offers, both of which fell apart at the last minute due to “financing problems”.

Did another open house last weekend, came up with a decent offer of 97.9% of the list price. The buyers were living on the west side of Vancouver. we accepted the offer.

My realtor, who is also a friend, had always been bullish on Vancouver RE. However, he said that he has seen things recently that he says just don’t make any sense. 60 people showing up for an open house in Dundarave. Houses in North Van with 11 bids going for $300K over list price.

I am so glad to have sold this place. I just wanted to take my money off the table. What a lot of people don’t talk about is that many people i know in WV are quietly selling and taking their money to Squamish, Whistler or somewhere else. There are a lot of people cashing in and getting out of the game.

#102 DON on 04.12.16 at 11:23 pm

#18 Move on VREU on 04.12.16 at 6:13 pm

“Victoria’s major price decline could begin by the end of this month.”

Alright everyone, VREU is predicting in that oh so qualified and learned way that April will be the month that prices COULD turn on a dime in Victoria.

Oh, if only that could be true. Instead, I will put out my ‘credible’ prediction, because what other kind are there on the internet, that we will see record sales and even more price increases – and this will last for years.

The Vancouverization of Victoria continues…

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

What? Victoria is not Vancouver. It is on an island with no metropolis. The island is now a retirement mecca – here for a good time…not a long time. Local incomes are much lower than Van. Who exactly who will buy all these houses, that were built for the retirees in every community up and down the island. Who exactly, come on project a little into the future.

#103 DON on 04.12.16 at 11:29 pm

#23 CrashMan on 04.12.16 at 6:23 pm

Its always “cant wait for the crash”. Year after year after year. I dont think its happening people. Get on with your life !
*****************************

It will happen when it happens….just because it is taking time does not mean it won’t happen. I guess it should have happened on your timeline.

Ignorance is not bliss…in this case. Human nature has not evolved. And every generation faces similar growing pains and thinks the world revolves around them. Millennials are being feared into buying as their history is limited.

#104 DON on 04.12.16 at 11:39 pm

#34 For those about to flop… on 04.12.16 at 6:50 pm

VRUE………………………………………………………..
…………….W………………………………………………
…………………H…………………………………………..
…………………….O……………………………………….
……………………………………………………………….
…………………………C…………………………………..
……………………………..A………………………………
…………………………………R…………………………..
……………………………………E………………………..
………………………………………S……………………..
…………………………………………?…………………..

M41BC
********************************

I care!

Why try and mock people? The effort you make is astounding. First Mark, now Victoria Real Estate.

#105 IKnow on 04.12.16 at 11:39 pm


If the April numbers coming out of Toronto and Vancouver approximate those of March

————————-

That’s very sure, over-bidding by 20% over a low-end asking price is the norm in Vancouver and Burnaby

#106 DON on 04.12.16 at 11:47 pm

#41 understood by few on 04.12.16 at 7:05 pm

…Also, the deep low you are hoping for won’t happen. Yes prices will drop, but in Victoria you are competing to buy in desirable areas against families with 2 gov’t incomes (so easily 140K gross). Those gov’t income families also have pensions, so no worries about putting enough money into investments, it can all go into their “nest egg” home which they expect to appreciate greatly before retirement

**************************
Victoria has always been a government town, so what happened when the bubble burst in the 80’s. Victoria was a government town back then as well. And these days there are less and less gov jobs, retirees are not being replaced on a one out – one in the door scenario.

Does everyone think like a realtor these days….

#107 DON on 04.12.16 at 11:50 pm

#63 Linda on 04.12.16 at 7:57 pm

Apparently oil’s recent rise is on speculation that OPEC will come to an agreement on price-fixing – er – limiting output so as to allow oil prices to increase. Since the members of OPEC apparently need petrodollars to be somewhat more robust as hey, they too have budgets to balance & current oil prices are not delivering the rosy forecast they would like. Whether OPEC will come to agreement is another matter. Plus there is the small issue of an oil glut to get through before any price increase could be said to be reliable in nature.

As for interest rate increases, some slight adjustments upward may occur. I should think the government is going to want very slow & not too high rate increases given the massive stimulus (deficit) budget. Plus there is still that little question as to whether explosive growth in retirees will have a dampening effect on economic growth or interest rates in general (vide Japan).
***********************

Just an honest question. Is it fair to use Japan as an example for Canada. Japan an island nation and Canada the second largest country in the world with lots of raw resources, well…way more than Japan.

#108 Vlad on 04.12.16 at 11:59 pm

There are some people who (understandably) feel a lot of regret over not getting into the Canadian real estate market in the past.

Most decisions of past look clear when you look at them from the future, however we can only act in the present. You can lament the lost opportunity, however what you need to be doing is concentrating on the opportunities at hand (hint, it’s not Canadian residential real estate), otherwise you will miss them as well, and will repeat your unhappy experience.

You live in a shallow, bleak world if you think that the recent Canadian real estate market fluctuation is the biggest investment opportunity of your life. The opportunities in front of you are virtually limitless, but you probably won’t be able to take advantage of them by luck alone.

Act. Here is a link to get you started.

https://www.youtube.com/watch?v=vQadYnrJeh0

#109 understood by few on 04.13.16 at 12:33 am

#52 rainclouds on 04.12.16 at 7:29 pm

Interesting theory. On the other side of the country Halifax is a mirror image demographically speaking. (Pop aprox 400k, Provincial Capital/Government, 5 Universities, Major Naval Base) Housing is much cheaper………

————

Desirability. If you check the RBC stats Garth posted Victorians pay a larger portion of income towards mortgage. As long as those ratios (income/mortgage payment) stay consistent, then it would take a huge drop in regional income in Victoria to result in Halifax house prices.

Not saying Victoria is better (Halifax is beautiful and housing looks like a steal comparatively ), but people are willing to fork out more to live in Victoria.

As far as my income theory goes, I know what my neighbours in our modest neighbourhood make. All the houses are sub benchmark (prices here always below the VREB benchmark) and all the incomes are well above median (around double give or take). Basically no one wanted to stretch themselves beyond 3-3.5x their gross household income on a house. 3.5x median family income won’t get you a SFD in Victoria (now, or any time in the past 8 years). It’ll get a mediocre townhouse or a decent condo.

#110 Brazil ex-pat on 04.13.16 at 1:15 am

DELETED

#111 YVR update on 04.13.16 at 1:35 am

What used to be HAM is now HAM + LOCALS. Locals are buying up everything in the valley from proceeds of their sales while HAM continues to buy in Vancouver.

Mentality now is prices will never come down. Can you blame them?

Vancouver going to have big issues going forward. How to retain skilled employees that were renting. Wait until the healthcare employee exodus begins en masse.

On another note, shopping for a relative for their wedding. Indian wedding. No shop accepts cards. All cash businesses.

Vancouver:

1) Ethnic stores: CASH
2) POT and Drugs CASH
3) Homebuilding partly CASH/MONEY LAUNDERING
4) Foreign inflows Money Laundering.

No industry here…Criminalopolis

#112 understood by few on 04.13.16 at 1:50 am

#72 Victoria Real Estate Update on 04.12.16 at 8:32 pm

Prices in the core are not 40% higher than in 2010.

You real estate “professionals” take lying to new levels.

First it was “buyers from Asia suddenly discovered Victoria”. That was proven wrong with stats – 0.68% of buyers in Victoria were from Asia.

Now prices are 40% higher than in 2010.

No proof. Just lies.

—————

Hmm.. I never claimed any asians discovered Victoria. I’ve always held there aren’t foreign buyers in Victoria (as per the stats).

I’m no professional, as you’ve claimed before. I don’t think I’d claim now is a horrid time to buy in Victoria if I were (or if I did I’d be pushing selling or some sort of transaction). My claims are you have no clue about the current state of real estate in Victoria.

My 30-40% number comes from my neighbourhood and some other areas I follow. In 2010 4 houses on my street sold. All low 500s. Most recent sale (less than a month ago) >700K. Sales from 2010-2015 were mid 500s and each sale at a higher price than the last. The prices weren’t keeping up with inflation, but there was no drop in this neighbourhood (like you repeatedly insist occurred throughout Victoria). Best price in late 2015 was 550K.

As for my friend’s areas. Hmm.. high 500s low 600s in 2010 now going for mid 700s to low 800s.

Seriously. Look at some sold prices then check to see if you can find previous sales. It is absolutely crazy right now. Sticking your head in the sand doesn’t change what is actually happening. My 30-40% number might seem crazy to you, but it’s less crazy than your 6% since 2010. 6% was right for my neighbourhood for 2010 to late 2015. Pretty much on the money actually. Things have gone nuts since then.

Some randoms that recently sold:

1872 Feltham Rd sold for 692K. It’s a junky 1950s home with a whopping 1600sqft (half of which is in a crappy basement), no suite, needs a roof, probably has no insulation in the walls (welcome to 1950s homes in Victoria) and is on a busy road. Last assessment? 567K. Unfortunately it hasn’t sold in the past 3 years, so no sales history. Probably could use about 100K in renos. No way that’s an 800K home after 100K in renos.

3440 DONCASTER DR – sold $752K, assessed 468K. According to BC assessment 2015 prices in that area were 543K at best (sale of 3851 ASCOT DR in Oct 2015).

1846 SAN LORENZO AVE – sold 752K. Best neighbouring sale in 2015? 691K (1922 SAN PEDRO AVE in may of 2015). 8% in a year?

1982 Kings Rd – sold for 751K. Sold Sept 2014 for 459K. Yeah, some major updates, but geez. 750K in that area for that tiny house? Plus the person buying probably has to rent out the suite to afford to live in their <1100sqft main floor.

I'm liking hating this one. Let's run the numbers shall we? Assuming moisters (because weird reclaimed wood aesthetics):
$50,100 Down payment (min down)
$13,020.00 PTT
$25,232.40 CMHC (can be rolled into mortgage, let's assume it is)
=
$726,132.40 Mortgage
25 year amortization at 2.5%
=
Aprox $3300/month for mortgage
$300/month for property tax
$100/month for insurance (might be a little high)
???/month for maintenance on an old house
~65K required for closing

Bah. Seems like a horrid investment. What do 1 beds go for now? $900? So you're still going to have to come up with $3000/month give or take, to live in part of your tiny old house? You can rent a whole house cheaper or just a main floor for much cheaper.

The only upside is you can own as many dogs as you want.

#113 NEVER GIVE UP on 04.13.16 at 2:06 am

Never before in History has there been a generation more willing to enter Slavery Through Debt!

The banks own you and dictate what you do with your time and your future time.

Watch out for a Black Swan Event that will cause much gnashing of teeth!

You all got your candy now but you will be swallowing Cod Liver Oil later!

#114 Frank on 04.13.16 at 3:40 am

This place is so sad.

Mark still blathering on about deflation and how “sales mix” is obfuscating the fact that Vancouver homes didn’t gain 20%, they actually only cost around $3.45.

VREU posting the same half-decade old stats as if it means something today.

Meanwhile. I was golfing with a few very pretty blondes last year who told me they bought presales. I thought they were insane, Vancouver condo building was overheated. Well the windows aren’t even in and their downpayment of $20K has locked them in for $100K increases in valuation.

You guys stay real.

#115 Iced Landing on 04.13.16 at 4:01 am

House prices have been going up MOSTLY because interest rates on mortgages have been going down.

If rates stop falling, then house prices will simply stop rising. There is no other way for house prices to rise if rates won’t continue their drops.

The problem with this is that half of all buyers now are simply buying because they expect prices will continue to rise forever. If the day comes when house prices stop rising for more than 2 years, then those ‘INVESTORS’ will realize that the losses they are taking on rents will not be made up by yearly increases in the values of the property. When that happens those investors will be selling their investment properties in a panic, and that is when you will finally see prices starting to fall quite dramatically.

#116 Don Draper on 04.13.16 at 6:46 am

Off topic-ish, but I find it surprising and/or revealing that the Ottawa Real Estate Board has yet to release their numbers for the month of March. They are typically released by the 5th or 6th of the month and yet so far nothing. Curious that.

http://www2.ottawarealestate.org/home/NewsInformation/LatestNewsRelease.aspx

#117 fredfarkas on 04.13.16 at 6:47 am

Ottawa real estate board still has not released numbers for March.

#118 Ace Goodheart on 04.13.16 at 6:49 am

Re: “If the April numbers coming out of Toronto and Vancouver approximate those of March, a responsible government would move more aggressively to shut down the markets’ advance. Let’s wait and see if we have one.”

Responsible government? There is no such thing. Never has been. A government exists to keep itself in power, preserve its interests and the interests of those it is connected to, and above all, to get re-elected.

Such an entity is incapable of acting responsibly. Its very composition and purpose will lead it to act the opposite.

With regard to house prices and mortgages, as I’ve said before, home ownership and home financing is a very well set up scam to ensure that people work full time for 25-30 years and pay lots of interest and taxes. It is a recent phenomena which came about in 1946, following the second world war. Prior to that if you have a look at old property records you will see that very few people owned their houses. Most houses that date back prior to 1946 were “company owned” and were inhabited by employees.

Post second world war we saw the rise of governments and their associated services, and the tax regimes that support them. “National debt” was invented around this time also.

With the creation of the Social welfare state and massive, expensive governments, came the need to ensure a constant income stream from taxation. That is why we now “own” our houses (on 25 year payment plans). This keeps everyone working. When a person is old enough and earns enough to qualify for a mortgage they are then able to “buy” a house (ie, the bank buys it and they pay rent in the form of interest) and the person then works full time for 25 – 30 years to pay back the mortgage.

In doing so they create a 25-30 year stream of taxation revenue for a social welfare government.

That is why we all have houses (which we don’t own) and that is why no matter what government we get, no one is ever going to stop the mortgage “gravy train”.

#119 Dominoes Lining Up on 04.13.16 at 7:53 am

How delusional are we?

Two stories jump out on the front of the paper today.

“Average GTA home is $465K, but that won’t stop most first-time buyers”

http://www.thestar.com/business/2016/04/13/two-thirds-of-millennials-expect-to-afford-a-home.html

…..and then right below it:

“Less than half of workers in York Region hold permanent, full-time jobs”

http://www.thestar.com/news/gta/2016/04/13/precarious-work-just-as-rampant-in-york-region-as-toronto-report-says.html

So….average house prices are insane in terms of price to income, and yet only 48.9% of workers even have stable jobs.

Risky, perhaps?

#120 maxx on 04.13.16 at 8:08 am

#9 tom coates on 04.12.16 at 5:45 pm

“i’ve been reading all sorts of gloom and doom about pensions in the near zero rate environment we find ourselves in…the greys (i’m a grey) have the money but we aren’t making any money on our pile…so we aren’t spending with confidence…i’m not into buying more toys but i might spend more on transportation or travel if i had confidence and more cash flow…at the end of the day i’m looking for a trouble free retirement…if you make me afraid about my pension i’m hanging on to everything i have..government diapers or depends..i need to have confidence”

Excellent post….and your stance is entirely reasonable. Given the many assaults on DB pensions in the private sector over the past 15 or so years, it’s clear that ANYTHING can happen to benefits and pensions.
At 19, I lost a lot of money with a large company. Then in the mid-nineties, there was a downsizing which deeply affected us, so I vowed then and there to keep my investment interests at arms length forever. My level of trust went to zero vis-a-vis the private sector. Long story short, I became a rabid saver and planned for retirement – starting in my teens, but it became a mission in my early thirties.
We’ve never looked back. We do ride the interest rate roller coaster, but net worth rises every single year no matter the interest, by maxing out TFSAs, RSPs and non-registered savings.

Today, it is more important than ever to create an independent core of wealth that, even with zero rates, will last a lifetime. It can be culled from the usual employment sources and/or skimming investment profit on a systematic basis.
Relying on the private and even the public sectors for security can, as we are seeing in many cases, easily become a compromise and even terminal. Jobs numbers do not reflect quality jobs – service jobs are the norm. Multiple jobs are the norm. Zero-hour contracts are here to stay.

Relatively painless examples of spending we have cut, or cut back on:
– new cars (we had always bought new);
– restaurants (our food is now organic and far healthier) and we entertain more;
– new clothing – we buy designer and way better quality from any source but retail;
– furniture – we buy antiques – more beautiful, incomparable quality and don’t lose value;
– prepared (yuck) and fast (yuckier) foods;

– but, we do travel. We will never give this one up.

#121 Noel on 04.13.16 at 8:14 am

Don’t you think the Teranet data is useless ‘frankenstats’, cooked to make it look like the market is doing better than it is?

#122 AfterTheHouseSold on 04.13.16 at 8:15 am

#101 chumpy le chump
“I am so glad to have sold this place. I just wanted to take my money off the table.”

Thanks for getting back to us and congratulations.

#123 Caught In The Grip on 04.13.16 at 8:19 am

#66 Mark

Thanks for your commentary. Very informative. I agree – it’s as though the banks have a “get out of jail free” card with the CMHC. I think there will be changes in the latter phase of the housing downturn.

Shawn

#124 AfterTheHouseSold on 04.13.16 at 8:25 am

#108 Vlad
Link to: Lessons From the Great Minds of Investing

Thank you for the link Vlad. It was an informative, interesting and inspiring talk.

#125 Stoopid Idiot on 04.13.16 at 8:48 am

Interesting

The Salary Needed to Buy a Home in 27 Different U.S. Cities

http://www.visualcapitalist.com/salary-needed-buy-home-27-u-s-cities/

#126 fancy_pants on 04.13.16 at 9:09 am

#118 Ace Goodheart on 04.13.16 at 6:49 am

+1

And all of this is working in the framework of a fractional reserve, debt-driven system.

We have a vicious circle where the necessity to pay the existing debt creates a scarcity of money, and the only way to relieve the scarcity is to borrow more money, which aggravates the scarcity, which is only relieved by borrowing more money…

We get to pick the poison every 4 years, which may alter the journey but not the end result. Might as well live for now b/c the future has and is being spent now.

The gravy train has flipped common sense on it’s head. Debt is rewarded, saving is for losers. Under social welfare governments, this disparity will only grow. The rewards of saving are simply no longer there.

#127 TurnerNation on 04.13.16 at 9:19 am

Let’s just say the elites have won.
We have a worn out populace spending their 60-80hrs a week at commute and work tasks. A mindless white collar job or a lazy blue collar slap stick effort. They pretend to pay us we pretend to work?
Evenings spent binging on Netflix, pr0n or video games. Plugged into earbuds with mindless guttural chanting and nonsense streaming. Empowered!

Child rearing is outsourced to anonymous care givers then 20 years of State funded “education”.
Moronism and base tribal behavior is encouraged. Most advanced society evar.

All I know is my balanced port. Till death do we chart.

How about those Jays? Makes sense to earn 10m for tossing a ball around a few months. But those overpaid teachers….grrrr.

#128 WallOfWorry on 04.13.16 at 9:29 am

If the US is in such good shape why are consumers not spending? Maybe because job growth is restricted to low paying jobs, there is inflation in food, housing etc, and consumers are dependent upon ultra low rates? We have quickly gone from 4 rate hikes in 201 to a projected 1. Yikes!

http://www.wsj.com/articles/u-s-retail-sales-fell-in-march-1460550802

#129 BOOM! on 04.13.16 at 9:39 am

I just love the logic of today’s sign, “If it’s in stock, we have it.” Of course, means nothing!

Much like “Talking Heads” in the Media.

Talked with our village clerk on available lots yesterday.
They have quite a selection, $7,500 each or two build able improved lots (water, sewer, elec, and nat gas , paved street) for $14,000.

We will get two. Why not? Checkbook is plump just now.

#130 White Crock BC on 04.13.16 at 9:42 am

Who called it, less than 24 hrs ago?

From Globeinvestor on Wednesday morning.

Oil prices fall on producer meeting doubts, stronger U.S. dollar
Saudi Arabia oil minister rules out production cut; Iran won’t send oil minister to meeting in Doha: report

#131 Snoopy on 04.13.16 at 9:44 am

FOMO (fear of missing out) is the story of the Canadian housing market.

FOMO happenned in 2000 with tech stocks.

I’ve never seen a case of FOMO last as long as what we’ve seen in Vancouver and now in Toronto. So I’m open minded to the fact that people no longer value stocks and prefer putting their money on houses. Yes, it’ll be painful for their cash flow, but it could take a long time to have an impact.

Meanwhile the world is submerged in debt and scared money rushes into bonds, smashing the 10Y yield down everytime it perks up.

#132 Hot Albertan Money on 04.13.16 at 10:10 am

Meanwhile, lock in your mortgage.

For the standard 5, or if there ever a case for going 5 years+++?

#133 cramar on 04.13.16 at 10:20 am

#93 No Mercy on 04.12.16 at 10:30 pm

#39 Former Oil Patch Worker

Why invest in F35s? Teck from the 1990’s versus Drone Teck of of now!

http://www.fool.com/investing/general/2014/01/04/drones-are-the-future-of-war-so-why-is-the-pentago.aspx

Next

—————–

Unfortunately, the article is over 2 years old. One wonders what has changed since then as far as costs, technology projections, etc. I would think that the major worry now is the new Russian ballistic/cruise missile.

#134 WalMark of Sadkatoon on 04.13.16 at 10:27 am

u blog dogs write a lot. u guys bored and retired? there aren’t any medals awarded for this stuff yknow

#135 IHCTD9 on 04.13.16 at 10:28 am

#92 Bottoms_Up on 04.12.16 at 10:28 pm
Well it appears the liberals rejigged their child benefits calculator, now with the input of adjusted family net income (instead of gross):

http://www.budget.gc.ca/2016/tool-outil/ccb-ace-en.html

It is worth double checking if you haven’t done it in awhile.
___________________________________________

I ran the Bro’s gross through this calculator with no adjustments whatsoever and it spit out 10,350.00 per year benefit.

I ran it again with real world adjustments and it spit out 12,500.00 per year.

Add in the fact that my bro consults a professional for tax purposes, and I see no problem with the 14,400.00 he says he is going to get.

I ran our numbers again based on gross no deductions and it spit out $3282.00/yr. I ran again with our deductions and it spit out $4650.00/yr

Anyone know the definition of “adjusted family net income”

What do you think of this Big Dip?

Bro doesn’t have a huge income, but has a paid for house, investment properties, and a few hundred grand in the bank. But T2 is going to give him a tax free benefit of $14,400.00.

It may have turned out that between the big tax return, and huge CCB payment, that bro has recouped the majority – maybe all of his RRSP contributions for 2015 from T2…

#136 YVR news gets better! on 04.13.16 at 10:36 am

http://www.theprovince.com/business/local+business/website+shanghai+based+company+lists+vancouver/11847877/story.html

HAHAHAHAHA!!!

#137 We're the fools on 04.13.16 at 10:38 am

Corruption money being laundered in Vancouver being fondled as real money by Canada is still here in the hands of wanted criminals says China.

http://news.nationalpost.com/news/canada/in-vancouver-there-are-lots-of-kids-of-corrupt-chinese-officials-here-they-can-flaunt-their-money

#138 bram on 04.13.16 at 10:45 am

From Teranet:

Our publication date scheduled for April 13 is delayed.
Please check back soon.

Hmm, technical reason? Or for a political reason, because the numbers are extraordinary, they run it by the powers to be first? Or await a BoC statement first?

#139 lee on 04.13.16 at 10:48 am

Banning imbedded fees on investment products will hurt investors: University of Calgary.

#140 Dyugle on 04.13.16 at 10:49 am

Garth I believe there is still more pain to come in commodities. In-fill drilling and high grading, which is what happens in a low cost environment, increases supply and further reduces prices. While this may allow a company to survive in the short term, it lowers their reserves. So these companies face a double hit going forward as the value of their reserves drops from depletion and commodity price. This also shortens the life of the reserves. At this point the debt covenants come into play. We are entering the phase now when the commodity producers are negotiating with the bond holders in order to stay out of bankruptcy. Some must go under to bring supply and demand back into balance. So while the bear market may be ending a new bull market is unlikely until production is cut and the storage glut is worked off.

#141 For those about to flop... on 04.13.16 at 10:54 am

#104 DON on 04.12.16 at 11:39 pm
#34 For those about to flop… on 04.12.16 at 6:50 pm

VRUE………………………………………………………..
…………….W………………………………………………
…………………H…………………………………………..
…………………….O……………………………………….
……………………………………………………………….
…………………………C…………………………………..
……………………………..A………………………………
…………………………………R…………………………..
……………………………………E………………………..
………………………………………S……………………..
…………………………………………?…………………..

M41BC
********************************

I care!

Why try and mock people? The effort you make is astounding. First Mark, now Victoria Real Estate.

//////////////////////////////////////
Don,you like looking at the same “chart” every second day good for you.

As other posters have pointed out it is the same old information ,I just tried to do it with a sense of humour which it seems that you are all out of…your loss…

M41BC

#142 Renter's Revenge! on 04.13.16 at 11:13 am

#127 TurnerNation on 04.13.16 at 9:19 am

“Let’s just say the elites have won.”

Agreed. I’m sure there’s nothing that frightens politicians and their puppet masters more than the thought of a young population that has enough free time to be well rested and to think for themselves. Think of all the trouble they would cause! LOL

Also, looking forward to becoming an elite one day.

#143 fixie guy on 04.13.16 at 11:17 am

The CMHC’s 2014 financial statement lists $214B in ‘loans and receivables’ under assets. That much federal housing stimulus might just have an impact on the market. Maybe even more than interest rates. Just saying…

#144 Brett in Calgary on 04.13.16 at 11:31 am

Meanwhile the layoffs continue in Alberta. Cenovus, for example, has shed 35% of its Calgary workforce, or around 2000 jobs since the downturn started. Rumor has it more cuts coming in June. The fact housing prices are relatively stable in this city is remarkable.

#145 IHCTD9 on 04.13.16 at 11:48 am

#101 chumpy le chump on 04.12.16 at 11:21 pm
I posted a few weeks ago that I had decided to list my house. I live in the western part of West Vancouver.

Listed it on March 21st. Had an open house the following weekend, with the idea of receiving offers up until March 31. We listed it for 86% more than what we paid in June 2013. We had put about $80,000 into renos and improvements.

Had about 37 groups through the house between March 24th and March 31st. Most were Chinese, but most of those were already living on the west side of Vancouver, and were interested in moving to West Van for the schools.

That group produced 2 offers, both of which fell apart at the last minute due to “financing problems”.

Did another open house last weekend, came up with a decent offer of 97.9% of the list price. The buyers were living on the west side of Vancouver. we accepted the offer.

My realtor, who is also a friend, had always been bullish on Vancouver RE. However, he said that he has seen things recently that he says just don’t make any sense. 60 people showing up for an open house in Dundarave. Houses in North Van with 11 bids going for $300K over list price.

I am so glad to have sold this place. I just wanted to take my money off the table. What a lot of people don’t talk about is that many people i know in WV are quietly selling and taking their money to Squamish, Whistler or somewhere else. There are a lot of people cashing in and getting out of the game.
__________________________________________

Good for you. Old school WV’rs are fools to even risk losing out on this once and a lifetime cash cow. Anyone out there trying to time the peak will be screwed the minute faith in the market wavers – it happens before the statistics prove it happened and is invisible. They will all be selling for what they’re offering when things topple.

To me – anyone debt free with a paid off house in Vancouver worth more than 2 million is a complete moron to not sell into this frenzy. Hell, no matter your financial situation, – if you can leave YVR with 2 Mil in your pocket free and clear – do it – now.

GTFO, and retire somewhere nice, no matter your age if you’ve met the criteria above. Work if you want, or hang out here all day!

There is just no reason to stay there, not family, not “where I grew up”, not “nice neighbourhood”, not “my City”, not nothing, grab a brain and make that 7 figure windfall happen – your time is running out.

#146 skip! on 04.13.16 at 11:57 am

#141 For those about to flop…

“Don,you like looking at the same “chart” every second day good for you.

As other posters have pointed out it is the same old information ,I just tried to do it with a sense of humour which it seems that you are all out of…your loss…

M41BC”

Skip the comments you dont like, it’s why the name comes first.

Making belittling and/or personal attack posts are a waste of time… which it seems you have way too much of.

#147 BOOM! on 04.13.16 at 12:03 pm

#127 TURNER NATION

Quite right. Yet, we must try to do the right things for our selves, and family, and what friends have ears, let them hear!

This will all probably end badly -for some- less badly for others.

We get to decide via our choices where we will end up.

3% off All-time highs today… How is that GIC working the “fearful ones”…?

#148 sanddancer on 04.13.16 at 12:14 pm

At some point Garth you may have to admit that you are wrong about the Yvr area and foreign $$ flooding in.
All the evidence is there for you to evaluate and see for yourself. ..this is not media hype, racism or jeolousy. …just a simple fact !!
Huge amounts of money has been leaving China recently and being safely deposited all over the world. …Vancouver is one of those destinations and it’s why your typical fiscal arguments aren’t working here. Your not wrong, your just unwilling to accept that there’s other forces also at play…..take a real look for yourself. ..please !!

Well aware of the influence. But over 90% of all trades are still being done by locals. — Garth

#149 Rifles on 04.13.16 at 12:14 pm

So why not simply make the proceeds from the sale of one’s primary residence taxable? Cap gains for all! Just because people have bought on the assumption that this ‘sacrosanct’ loop hole will always be there is no reason not to close it. Prices would ratchet back toute suite. This might not deter Vancouver’s money laundering elites but it would certainly influence the affordability equation.

#150 JamesA on 04.13.16 at 12:23 pm

This is interesting:

http://www.bloomberg.com/graphics/2016-angry-voters/

unfortunately, there are no easy fixes, despite what the lying gasbag politicians promise.

#151 Fubared on 04.13.16 at 12:31 pm

Out here in the GVRD my friend who just went bankrupt around a year ago just posted on facebook how interesting the home buying process is. I am having a hard time remaining productive and personally responsible, now that I realize us tax payers are just chumps to insure other peoples bad decisions.

#152 YVR update on 04.13.16 at 12:43 pm

http://www.cnbc.com/2016/04/12/chinese-scions-song-my-daddys-rich-and-my-lamborghinis-good-looking.html

#153 For those about to flop... on 04.13.16 at 12:44 pm

#146 skip! on 04.13.16 at 11:57 am
#141 For those about to flop…

“Don,you like looking at the same “chart” every second day good for you.

As other posters have pointed out it is the same old information ,I just tried to do it with a sense of humour which it seems that you are all out of…your loss…

M41BC”

Skip the comments you dont like, it’s why the name comes first.

Making belittling and/or personal attack posts are a waste of time… which it seems you have way too much of.

/////////////////////////////////////

C,mon now ,this is Greaterfool….the serious financial blogs are down the hall.
I dare all you guys to chirp Garth the next time he jests with someone…you won’t because you can’t handle a saucey response.
You don’t need a tonne of money to be on here ,but a sense of humour and some tough skin will help you.

Why is everyone so serious?…..Ahhhh….TAX SEASON!…I get it,,,

M41BC

#154 Bottoms_Up on 04.13.16 at 12:50 pm

#135 IHCTD9 on 04.13.16 at 10:28 am
———————————————–
You must also remember that your ‘Bro’ is fairly unique, in having a middle family income as well as a paid for house (while having young children around).

Most middle income families with young kids are strapped, and actually in a monthly spending deficit. More family support is a quick/easy way to reverse this trend….slowing/eliminating debt accumulation by the middle class, and perhaps circulating more money into the economy.

It is an interesting, social and just approach?

#155 Softy on 04.13.16 at 12:58 pm

DELETED

#156 jess on 04.13.16 at 1:03 pm

seems clear to me

…” Under federal law, real estate agents are required to identify their clients, verify where their money is coming from and report suspicious or large cash transactions to FINTRAC.
===================
However, a representative of the Canadian Real Estate Association whose name was redacted notes in an email to FINTRAC that compliance in the real estate sector is low.

Meanwhile, the Department of Finance has identified the real estate industry as highly vulnerable to money laundering and terrorist financing given its “very significant” size and the fact that it often involves large sums of money changing hands. ”

http://www.therecord.com/news-story/6493498-fintrac-steps-up-training-for-realtors/

#157 D.A. Aka Devil's Advocate on 04.13.16 at 1:27 pm

Kelowna residential market has gone NUTS! Absolutely pushin’ it with low supply, high demand resulting in bidding wars and rising prices. Been here, done this. Not fun.

SHIFT happens. Learn to ride the tide.

#158 Move on VREU on 04.13.16 at 1:58 pm

#18 Move on VREU

Vancouverization of Victoria continues….

—————-
#18 Iknow

As long as the China-sub-urbanization-resortization of Vancouver continues….

—-Finally, someone gets it and has connected the dots. The domino effect is in play with the scourge of foreign capital…

#159 Bobby13 on 04.13.16 at 2:00 pm

Don’t believe any numbers the government posts the government employees have been proven to be nothing but incompetent. Job growth ya right job growth backed by tax payers dollars don’t count that’s just highly paid welfare. Notice what other governments have released to try to make it look like they’re doing a good job and getting proven wrong or revised down. Ignore there nonsense.

#160 maxx on 04.13.16 at 2:06 pm

#33 common sense on 04.12.16 at 6:49 pm

“You people make me laugh when you say they may or should RAISE RATES…

PLEASE..Think about it…for a moment…

1 and I say 1 ONE .25% basis points and everyone starts screaming….”

Perhaps tptb ought to be a tad less worried about “everyone” screaming (yaaaawn) like spoiled brats – especially corporations claiming that re-establishing normal rates will harm exports (double yawn).

Stunned pecker borrowers (governments included) deserve to have their wallets whacked and idiotic low rates ought to be in the rear view mirror. As of 7 years ago. The healing would have begun soon after. Instead, tptb have made a bigger mess. Brilliant.

History will show the past nearly 4 decades as the lowest on the scale of fiscal intelligence.

“We made us a bunch of neat money toys to play with, and mucked things up reeaaaal goood!”

#161 understood by few on 04.13.16 at 2:08 pm

#152 YVR update on 04.13.16 at 12:43 pm
http://www.cnbc.com/2016/04/12/chinese-scions-song-my-daddys-rich-and-my-lamborghinis-good-looking.html

——————

“Many residents say the flood of Chinese capital has caused an affordable housing crisis.”

Wow. Welcome to modern reporting. No facts, just repeat what people say and wash your hands of it. Not much of a leap from that to, “Many residents say it’s (group of people) causing (some problem).” Enter your favourite stereotype! Blacks/crime, illegal immigrants / job shortages, gays / the destruction of the sanctity of marriage.

Mad libs for bigots. Woo fun.

So Vancouver has fuerdai. That’s news? So does Seattle, LA, SF.. etc etc.

So ya, there are kids with cars you can’t afford. Has been for a long time. I knew plenty of international students at UVic with cars paid for by their parents (though nothing more excessive than a Viper). None of them owned property though.

On the topic of luxury cars, I heard these cars get shipped to China (when the kid leaves Canada) and are sold at a profit. No clue if that’s true, but considering you can import from the US (even with the poor dollar) and make out pretty well.. it’s believable.

#162 Investorz on 04.13.16 at 3:22 pm

“Chinese investors may be seeking to move money abroad amid instability in the country’s economy and stock market, even as the government clamps down on capital flight. A Juwai survey of real estate agents who work with mainland Chinese buyers found that 55 percent expected international property purchases to increase as people sought a safe haven for cash. Canada, particularly the cities of Vancouver and Toronto, has long been among the top targets for property investors from the Asian country.”

Bloomberg:
http://www.bloomberg.com/news/articles/2016-04-13/chinese-buyers-hungry-for-canadian-homes-with-inquiries-up-134

#163 Ronaldo on 04.13.16 at 3:45 pm

#157 D.A. Aka Devil’s Advocate on 04.13.16 at 1:27 pm

”Kelowna residential market has gone NUTS! Absolutely pushin’ it with low supply, high demand resulting in bidding wars and rising prices. Been here, done this. Not fun.

SHIFT happens. Learn to ride the tide.”

So, it’s taken 8 years for prices to return to their 2008 high. Now we’ll see if people go as crazy as they did 8 years ago. Should be interesting.

#164 Entrepreneur on 04.13.16 at 3:50 pm

Just delete the blog dogs that are realtors which I find annoying. Especially when they pretend they are someone else and telling a make-believe story.

To #42 cto from yesterday…”time to put monkeys in our central banks” agree and I will go further to say put “robots” in a high influential position that may cause chaos and uncertainty to the people.

No more “if” or “but” or “secret self-interest” at play, we need a higher intelligence, robots.

#165 Victoria Real Estate Update on 04.13.16 at 3:50 pm

# 98 Okanagan Man

You have zero credibility like “Move on VREU” and “understood by few” who claims house prices in the core have increased by 40% since 2010.

Once again you’ve made false accusations that anyone can verify as false by simply reading your comments.

Please find and post the exact quote where you claim I predicted a major price decline starting in April.

You can’t find a quote like that because one doesn’t exist.

Also please find the quote from yesterday or today where I used the word “realtor” prior to this post. Please post that quote as well. That quote doesn’t exist.

Please prove that you aren’t a realtor. You can’t and neither can “Move on VREU” and “understood by few”.

The three of you obviously want me to stop posting comments. It’s likely that you don’t want me to warn locals about the risks associated with buying real estate at any time, but especially when a massive housing bubble exists.

All three of you have posted unbelievably bizarre comments that should make anyone disregard anything you write in the future.

And keep looking back at my previous posts to find something that you can use to discredit me. When you find that please post it on this site.

#166 James on 04.13.16 at 4:18 pm

If the April numbers coming out of Toronto and Vancouver approximate those of March, a responsible government would move more aggressively to shut down the markets’ advance. Let’s wait and see if we have one.
……………………………………………………………………..
Snowballs chance in Tehran. More likely to see Smoking Man go to an AA meeting.

#167 dontcallmeshirley on 04.13.16 at 4:46 pm

CMHC insurance cap is $1 mill. Therefore, like it or not, the minimum price of a home will be $1 mill.

How high can it go?

Depends on how much downpayment people can muster up.

#168 IHCTD9 on 04.13.16 at 4:47 pm

#154 Bottoms_Up on 04.13.16 at 12:50 pm
#135 IHCTD9 on 04.13.16 at 10:28 am
———————————————–
You must also remember that your ‘Bro’ is fairly unique, in having a middle family income as well as a paid for house (while having young children around).

Most middle income families with young kids are strapped, and actually in a monthly spending deficit. More family support is a quick/easy way to reverse this trend….slowing/eliminating debt accumulation by the middle class, and perhaps circulating more money into the economy.

It is an interesting, social and just approach?
_______

They’re actually not a young couple just starting out (early 40’s), they have a couple young kids only because he adopted them. But you are right, they are probably not typical of those who qualify for a big CCB payment. Also I just learned from him they actually dumped over 100K into RRSP’s, so if the “net income” stipulation means after all deductions – then this new info explains everything.

One thing to keep in mind also, the typical bleeding heart, beat down, brokeass millennial we all hear about
are university educated, and live in a big city. Of course they’re strapped.

Out in the hinterland, Millenials do much better, and with much less income wise. Even single millenials can buy a house out my way. Couples making typical small town wages in a decent small town job still clear 75K a year. The married couples have new trucks, new ATV’s and quads, but will probably still get 10G’s CCB from T2!

#169 Dan on 04.13.16 at 5:14 pm

He has money to spend. This country generate over 900 billion dollars a year. So where is the beef?

#170 Mark on 04.13.16 at 6:00 pm

“Don’t you think the Teranet data is useless ‘frankenstats’, cooked to make it look like the market is doing better than it is?”

There’s no reason to believe that Teranet is, in any way, dishonest. They make their methodology very clear.

The problem is in the interpretation of their numbers. Basically Teranet’s methodology is a lagging filter, a low-pass filter. So it does show long-term price changes (with a lag), but is completely and utterly useless for telling you what’s been happening for the past year or two in either a bull or a bear market.

Its sort of like the Realtors with their ‘averages’. Without disclosing all the other statistics like median and the distribution of sales. Sure, the average transaction might look good, but what the Realtors generally aren’t making public is why those transactions rose in value — a significant shift to the overall sales mix distribution.

#171 Ace Goodheart on 04.13.16 at 6:13 pm

Another sweet preferred offering coming down the pipe:

http://www.marketwired.com/press-release/transcanada-announces-preferred-share-issuance-tsx-trp-2114555.htm

Been like Christmas for these things lately. One after the other.

#172 Okanagan Man on 04.13.16 at 6:36 pm

I posted that the Kelowna market was on fire weeks ago. I see that other blog dogs now confirm the same. We should not be seeing such increases, particularly given the job losses in the oil patch. I can also confirm through professional knowledge that trades are busy….

#173 WUL on 04.13.16 at 6:38 pm

I have felt sheepish for a few days after Carly from Cabbagetown reprimanded me, and rightly so, for an ignorant and hurtful comment I posted a few days ago. Carly was right and served to educate me.

I apologize and will strive to be better. The first thing I will do is attempt to remain on topic.

Thank you Carly.

I come here for the intelligent, lively and generally civil discourse that our host has fostered and I do not want to impair that.

Thank you Garth.

#174 Smoking Man on 04.13.16 at 7:04 pm

#166 James on 04.13.16 at 4:18 pm
If the April numbers coming out of Toronto and Vancouver approximate those of March, a responsible government would move more aggressively to shut down the markets’ advance. Let’s wait and see if we have one.
……………………………………………………………………..
Snowballs chance in Tehran. More likely to see Smoking Man go to an AA meeting.
………….

Whatever this fever was, I have no need for a smoke or drink. Insta-cure.

Unreal.

#175 off with your head on 04.13.16 at 7:12 pm

#141 For those about to flop… on 04.13.16 at 10:54 am

#104 DON on 04.12.16 at 11:39 pm
#34 For those about to flop… on 04.12.16 at 6:50 pm

VRUE………………………………………………………..
…………….W………………………………………………
…………………H…………………………………………..
…………………….O……………………………………….
……………………………………………………………….
…………………………C…………………………………..
……………………………..A………………………………
…………………………………R…………………………..
……………………………………E………………………..
………………………………………S……………………..
…………………………………………?…………………..

M41BC
********************************

I care!

Why try and mock people? The effort you make is astounding. First Mark, now Victoria Real Estate.

//////////////////////////////////////
Don,you like looking at the same “chart” every second day good for you.
///////////////////////////////////////////
or instead of providing douche comments you (m41bc ) could just as easily skip the comment, as I will be doing for your useless self centered drivel comments.

#176 For those about to flop... on 04.13.16 at 7:24 pm

#174 off with your head on 04.13.16 at 7:12 pm
#141 For those about to flop… on 04.13.16 at 10:54 am

#104 DON on 04.12.16 at 11:39 pm
#34 For those about to flop… on 04.12.16 at 6:50 pm

VRUE………………………………………………………..
…………….W………………………………………………
…………………H…………………………………………..
…………………….O……………………………………….
……………………………………………………………….
…………………………C…………………………………..
……………………………..A………………………………
…………………………………R…………………………..
……………………………………E………………………..
………………………………………S……………………..
…………………………………………?…………………..

M41BC
********************************

I care!

Why try and mock people? The effort you make is astounding. First Mark, now Victoria Real Estate.

//////////////////////////////////////
Don,you like looking at the same “chart” every second day good for you.
///////////////////////////////////////////
or instead of providing douche comments you (m41bc ) could just as easily skip the comment, as I will be doing for your useless self centered drivel comments.

///////////////////////////////////

It……is ………the ………same……..chart………every ……..two …..days…….pay…..attention……

M41BC

#177 understood by few on 04.13.16 at 7:26 pm

#165 Victoria Real Estate Update on 04.13.16 at 3:50
The three of you obviously want me to stop posting comments. It’s likely that you don’t want me to warn locals about the risks associated with buying real estate at any time, but especially when a massive housing bubble exists.
————-
You’re reading comprehension is poor. I’ve agreed it is a horrid time to buy in Victoria (prices are currently distorted and the market is completely in favour of sellers, absolutely horrible time to buy). But somehow I’m defending real estate and pumping by saying that? Or just because I don’t agree with your take on it?

You suffer from delusions of persecution. You think there is some big conspiracy to “pump” housing prices in Victoria. People are trying to silence your “message”. Have you met any realtors? They care more about their shoes than they do about trying to “pump” realty on some random blog.

Your claims are conflicting. We have a massive housing bubble in Victoria, but you insist housing prices have only increased 6% since 2010. There IS a bubble right now, and it’s much bigger than the little bit of hype we had in 2010. Once again, go look at some current sales. I posted some examples (which you’ve ingnored) and it’s insane what some of these places are going for. Totally nuts. But you refuse to look at actual current numbers, dismissing them as franken numbers and the likes. Sold prices can’t be faked. Seriously. They are reported to multiple agencies. Oh.. but I forgot, you wear tin foil to protect yourself from the evil realtor rays and believe everything they post is faked. Sure, they’ll twist stuff in their favour if possible, but they can’t fake sales prices or numbers or units sold.

Prove I’m not a realtor? I’ve alluded before that I’m in tech. Definitely not realty. Much more reliable money in tech. Plus I limit my physical encounters with the unwashed masses. Being a realtor is about as attractive to me as being a cashier at home depot or a “barista” at starbucks.

A realtor friend was complaining to me about some moisters that wanted a house that:

Is not in Langford (or Colwood etc)
Has a suite (need that sweet sweet rental income)
Max price of 500K

I’d rather bang my head against the wall than deal with people like that.

#178 Former Oil Patch Worker on 04.13.16 at 9:01 pm

#93 No Mercy, #133 cramar

I was being sarcastic. Or trying anyway.