The new abnormal

PARENTS modified

Dylan and his wife make two hundred large and rent a two-bedder in the tony West End of Vancouver, where they moved from Calgary a few years ago. Everything was cool until their landlord told them he was selling. But how could he not? The dude was offered more than $2 million for the very dated 1,200-square-foot unit. Yikes.

“We’re on a fixed term lease that ends next month,” Dylan posted on this blog. “The new owner just informed us that if we want to stay the rent is going up 40% (to over $3000 per month with no upgrades or improvements). Our first reaction was naturally to scoff at that… however, having spent the weekend researching rentals here it’s clear that this may be the going rental rate for 2 beds in YVR. Worse still is that there appears to be bidding wars happening in the rental market too, with some prospective landlords telling us that the price has moved from what they had posted just days ago.

“We’re both well compensated professionals, grossing over $200k combined which for YVR is quite good but apparently not near enough to rent in the city! We have been pre-approved for a $1m mortgage, but can’t bring myself to even consider purchasing right now. In fact, we went to a few open houses on the weekend just to see and it was a zoo, people arguing over getting in to see the RE agent first so that they can make the ‘right’ impression (presumably in the hopes that their over asking bid is the ‘lucky’ winner). One person told the agent that she was willing to waive the inspection if that put her over the top. Sadly it appears none of us out here can avoid getting burned by this mania…let’s hope the coming correction comes swiftly.”

Lea and her husband have just given up on Canada, and moved back to the States. “Since coming back I have taken to surprising my fellow Americans with Canadian home prices,” she tells me. “Thank you for your blog. When we were living in North Van, it made me feel sane for being shocked at the prices.”

This week Bank of Montreal egghead Sal Gualieri published a small, three-paragraph update on the real estate market in Canada compared to that in the States, where prices have recovered about 50% of the loss they suffered in the pre-2008 meltdown. As you know, the average Canadian property price topped $500,000 last month for the first time in history. The average detached 416 price is over $1.2 million and the benchmark Vancouver price is $1.4 million. That last number is up 30% in a year, while the inflation rate was merely 2%.

As Sal reports, the average Canadian house (expressed in current Canadian dollars – which has gained a ton since February) is 41% more expensive than its American counterpart (US$384,402 vs $271,803). Of course the Yanks also have the ability to deduct mortgage interest from their taxable incomes, pay at least 30% less in personal tax (depending on the state), and can lock in a fixed mortgage rate for 30 years.

“That’s a big reversal since the start of the millennium,” he points out, “when housing was much more expensive south of the border (even before the U.S. bubble) thanks, in part, to the lowly loonie at the time and more reasonably-priced properties in Vancouver and Toronto. While these two cities in no way represent the national average price, they certainly have a major effect on it, as they now account for half the value of Canadian home transactions.”

CHART

This is dam about to burst. When is unknown. The outcome is not. Dylan and his wife make three times the average income and feel they cannot afford rent. They’ve been approved for a million-dollar mortgage, and feel they cannot afford to buy. Real estate has turned from shelter into commodity, the object of frenzied, obsessive activity by people who are speculating on fat, easy profits (greed) or desperate to buy while they still can (fear).

House prices, on average, 40% higher in Canada than the US is the definition of absurdity. Our economy is barely moving, the oil sands are burning, exports are toppling and debt is exploding, while the US stays in recovery mode with a 50% drop in unemployment since the recession and rapidly improving national finances.

All around us is evidence we’ve lost our collective minds. House prices have detached from the economy, and the social impact of million-dollar shacks is palpable. Average families are being forced to borrow massive amounts with little or no increase in incomes. Saving and investing is plunging as debt expands. Worse, we’re turning into a nation of xenophobes and racists, trying to blame others for the mess we’re all busy creating. Every study, report or new story with an anti-Chinese thrust is plastered all over this pathetic blog’s comment section.

Truth be told, lots of people have made lots of money in real estate over the past five years. The sellers, I mean. Not the buyers. With every new price plateau attained comes an elevated amount of risk. The greed and fear you see around you, which so complicate and bedevil the lives of people just wanting a decent place to live, are the harbingers of crisis.

Of course, I could be wrong. It might be worse.

206 comments ↓

#1 ILoveCharts on 05.09.16 at 6:33 pm

“Truth be told, lots of people have made lots of money in real estate over the past five years. The sellers, I mean. Not the buyers.”

You can’t be a seller if you are never a buyer.

#2 Beppi Chisholm on 05.09.16 at 6:34 pm

First! Booyah!

#3 Bobby13 on 05.09.16 at 6:36 pm

There feelings are not alone. When the 1% are having trouble makes you wonder how the lower income families are going to keep feeding themselves. This has amazingly gone on longer than I would have ever guessed.

#4 TRUMP on 05.09.16 at 6:37 pm

BNN streamer today ….

“IMF advises Bank of Canada to lower interest rates if growth is not sustainable”

The time to buy is when there’s blood on the streets.

The patient are going to make some big money real soon.

#5 BOOM! on 05.09.16 at 6:38 pm

Note MY name…. I believe we are in the cusp of the China melt into reality, the US burp, and the Canadian…well Iu’m not sure what you might call that one… the slow burn, or the mighty Dump!

I started lightening up on weaker credits today. No where to hide. Politics are a mess. Greed and credit make a hell of a shot-gun marriage until the baby DEBT is born, and he grows he takes more than GREED earns, and FEAR wants to go live with mom.

You live your way, I’ll live mine…

Debt Free, and growing my modest nest egg safely.

#6 pathcontrolmonk on 05.09.16 at 6:38 pm

Prices have been getting frothy in Seattle over the past year too. The difference being that the economy is also booming, unemployment is non-existent, tech workers are flooding in to the city and the IRS has better algorithms for catching tax cheats

#7 ed on 05.09.16 at 6:42 pm

“Of course, I could be wrong. It might be worse.”

It certainly might get worse–it probably will, now that the IMF is saying the B of C should consider another rate cut. I think this fire is the real ‘beast’.

#8 TRT on 05.09.16 at 6:42 pm

Not sure if this will be posted but at least Garth will read it.

In North Surrey, at the Sheraton Hotel, there are several buses that come to the hotel every day carrying tourists from Asia. The buses have a foreign lettering on sides.

The tourists stay for a few days and scope out the real estate. They buy and then leave. I have a aquantaince who works at the hotel and he says this is a daily occurrence.

I told him that the reason for this is that the tourists are scoping he area and planning to set up base here in the future for their kids. (Ala foreign student/Supervisa/10 yr visitor visa programs). –who needs a worthless PR anymore!

Stay here next time Garth. Do some leg work.

“A foreign lettering”? Seriously? You’re an embarrassment.– Garth

#9 First on 05.09.16 at 6:42 pm

FIRST!!!!!!!!!

#10 Stop on 05.09.16 at 6:43 pm

Stop the madness! Wake up, refuse to mortgage yourself into oblivion. Stop using credit, stop buying junk you don’t need, stop going to open houses. Stop blaming others. Stop buying Audi’s you cannot afford. Stop with your designer labels. Stop!

#11 powder_hound86 on 05.09.16 at 6:44 pm

I can tell you one thing, this housing mania certainly makes my goal of starting a financially secure family that much more difficult.

Me and the wife are still saving saving saving, all we can do.

Its ironic that if our savings actually paid an interest rate and houses were cheaper we’d likely consume and spend more than we do now.

#12 yyz2yvr on 05.09.16 at 6:47 pm

First!

#13 gut check on 05.09.16 at 6:48 pm

I cannot believe that our second most socialist province doesn’t have better rent controls!

People are going to have to start refusing to move, refusing to pay the increase, and allowing the landlords to take them to the Tribunal (or whatever body does evictions in BC)

I say that Dylan should tell the landlord he’ll see him in court, then I’d put a PR package together and farm it out to every media outlet the world. I’d set up crowdfunding. I’d start a youtube channel with daily updates of the apartment hunt, our landlord’s communications, and results of media inquiries.

Someone’s going to have to do it eventually. It might as well be you, Dylan. I hope you’re reading this.

#14 Balmuto on 05.09.16 at 6:48 pm

“As Sal reports, the average Canadian house (expressed in current Canadian dollars – which has gained a ton since February) is 41% more expensive than its American counterpart (US$484,402 vs $271,803).”

There must be a typo in the first number – I think you meant US$384,402.

#15 Dr. Strangelove on 05.09.16 at 6:48 pm

Optimism driven by fear and propaganda. The same mindset and feeling like one, when masses obsessively followed Adolf Hitler in his suicidal onrush.

#16 disgrace on 05.09.16 at 6:50 pm

No holding back here…. very open and lays the blame where it should be.

https://ca.news.yahoo.com/foreign-buyers-crushing-home-dreams-vancouver-canada-b-133008569.html

You just proved the point. Last time this weak link will be posted here. — Garth

#17 The TRUTH shall set you free on 05.09.16 at 6:52 pm

“Building a house with borrowed money is like collecting stones for your own tomb.”

-Ecclesiasticus 21

#18 Damifino on 05.09.16 at 6:53 pm

Hey Dylan, my rent in downtown YVR for a 2BR is $2800. Been here four years. Rent controls have kept it to where it is, would probably be $3000 if moving in today.

Yep… $3000 for a 2 BR seems about the going rate.

#19 Smoking Man on 05.09.16 at 6:55 pm

Just wait till BOC cuts. They have no choice with oil sands shut down and exports on life support. When usdcad was 1.45 we had a massive trade surplus. At 1.30 worced in years.

We need a 1.36 usdcad for balanced trade.

Absolute madness will follow after the cut.

Don’t think one is coming. They didn’t think Australia would cut either.

Dr Smoking Man.

#20 James on 05.09.16 at 6:55 pm

Regarding the cost difference between Canadian and USA homes you said that Canadian homes are just 41% more but I suggest that they are actually 78% more based on the numbers you gave.

You would need to add $212,599 USD (78% of the value of the American home) to the average American home to equal a Canadian home in USD.

Not comforting.

Thanks for the blog.

#21 Cory on 05.09.16 at 6:57 pm

As I said before, the whole thing is embarrassing. Where is the leadership to do the right thing and put a stop to it?

#22 Godth on 05.09.16 at 6:57 pm

Ego, money, corruption, politics. Late stage capitalism is like late stage Mayanism. Good luck and good night.

#23 Beam me up Scottie on 05.09.16 at 6:58 pm

It’s true. Go to Craigslist and search for a 2 bedroom apt in downtown Vancouver. 7 or 8 months ago it was rare to see a 6 or 7k per month unit. Now it’s common… in fact there are multiple listing that range from 7k to 17k per month or more. PS: 550k Lamborghinis with 16 year olds behind the wheel are common. It’s beyond insane. Reminds me of the child’s tale The Emporers New Clothes or The Marching Mortons by Don Kornbluth. Beam me up…

#24 Paul on 05.09.16 at 6:58 pm

You know, Vancouver and Seattle aren’t that different in terms of climate or even job prospects.

Benchmark detached for Vancouver = $1.4M CAD, @ today’s exchange rate = $1.08 M USD.

Median sale in Seattle = $0.5M, or $0.7M for 4-BRs.

So don’t worry, Vancouver is only 50-116% overpriced. :)

#25 JSS on 05.09.16 at 7:02 pm

Forget buying or renting in Vancouver.

Is it not cheaper to stay in a decent hotel suite in Vancouver, complete with a kitchenette, and a separate room, for cheaper than $3K a month?

Plus you get your room cleaned, and bed sheets changed.

#26 JO on 05.09.16 at 7:02 pm

I lend money in Toronto area to mostly middle class and good income applicants. The majority of applicants are simply refinancing their current inflated home to buy another and in some cases putting a mortgage on the new home to. Most young suckers are relying on gifts from family that in some cases are borrowed to
There is a massive amount disregard going in. The debt is exploding at the same time as rates are plumbing new lows
I do tell most bkt to do it. But to no avail. The few that are declined often react as if we are crazies and then they proceed to find a shady outfit to get the money anyway
When this busts and our currency is wiped out, our taxes increased far beyond the wildest imagination with cuts in most services, you will see many of these recent buyers crying and complaining and asking for a bailout
It is completely out of control
Nothing but a massive control fraud by the bank of Canada and the banks and the government with complacent buyers who are reckless
It is scary to watch
I can’t wait for the correction
Most of these people deserve to get wiped out

#27 LH on 05.09.16 at 7:06 pm

Read the book “Capital Returns”.
Till there is a supply response (new SFHs)
Prices will stay sky high and rents will eventually follow.

Downtown Toronto houses (c01, c02) are still a long term hold.

#28 Dan Blanton on 05.09.16 at 7:08 pm

Could peak mortgage be like peak oil? A looming threat that just withers away to the backpages of history books? The only way housing prices will go down is if mortgages start to rise. Now the IMF is saying for Poloz to consider a CUT not a raise. Everything is goosed due to QE, politicians can’t scale back or raise rates because it will be a black mark on their record as THEY who caused the collapse and they won’t get re-elected.

Is there still a lot of road for the can to be kicked?

#29 Robert K. on 05.09.16 at 7:08 pm

Almost identical to our situation. My wife and I make over $200K combined. We spent this weekend looking at tiny one bedroom units for the first time (Vancouver central). It was insane – people literally throwing money manically into agents hands. It was worse than I’d possibly imagined. We wrote off the house dream but now can’t even seem to afford a tiny condo in this city with what I thought was a decent income. This post is bang on.

#30 common sense on 05.09.16 at 7:09 pm

#13 Cory

Leadership and “Do the right thing” in today’s world do not belong in the same sentence.

Visited a friend who sold her condo in Burlington last week for $380, up 26% from the fall in 1 day. Shody finishes, dents in walls, etc,etc,etc….All I thought was Thank god you sold it quick before anyone had a chance to really look at everything.

#31 Brazil ex-pat on 05.09.16 at 7:13 pm

This must be the “1%” blog. All the stories are about 200K here and 300K there earners. When I was living in the Lower Moldland probably 1 in 20 people I knew made that much money.

#32 Raincouver on 05.09.16 at 7:14 pm

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#33 WUL on 05.09.16 at 7:15 pm

#140 Smartalox
Re your comments on the redevelopment of Fort Phoenix:

“…What’s more, the demand for homes in the Fort Mac area is set to soar, as so many people will be without housing now….

The winning move is to rebuild quickly, then sell while demand is strong (supply is low), and before everyone else has rebuilt.

Sellers may not recover all their costs, but they’ll do a lot better than if they walked away, and won’t have to deal with competition from future new developments on the thousands of hectares of local land that have now been cleared – without the hassle of having to obtain permits.”

A few points:

I do not think I would want to be the first to venture forth with a rebuild in the burnt out hoods. What if few others exhibit that enthusiasm?

Also, there may be a slight problem with hazardous materials and toxins resulting from the burning of buildings:

http://www.calgaryherald.com/health/fort+mcmurray+wildfire+will+leave+toxic+legacy+experts/11906866/story.html

Finally, the lands immediately outside the limits of Ft. Mac is neither privately nor municipally owned land. It is provincially owned land and it is unlikely that developers will be able to acquire those lands.

#34 Bonhomme Carnaval on 05.09.16 at 7:18 pm

Dylan, move to Quebec where we have draconian rent controls! Not to mention that a 1,200 sq. ft. shanty flat, albeit well located near a metro station, will run you about $ 1.00/sq. ft.

Moreover, after 10 years you have an ‘acquired right’ (droit acquis), hence the landlord has to buy back your lease!

Oh, and the wildlife is easy on the eyes…

Peace

#35 bubu on 05.09.16 at 7:19 pm

Let alone Toronto or Vancouver….Look at Calgary… even wit this oil price the prices are 7% up YoY… Edmonton is starting also to go up….

#36 Henry Olivere on 05.09.16 at 7:20 pm

All the people that asked for lower interest rates and cuts to interest rates from the Bank of Canada, U.S. Federal Reserve, ECB etc. are now complaining about negative interest rates and ultra low interest rates.

Economists, advisors, analysts all got what you wanted and now are scared and concerned of a real estate, debt crash or deep correction 25%+.

What did you expect with a 75% cut interest rates and loose lending criteria and policies. You are all hypocrites.

#37 IKnow on 05.09.16 at 7:25 pm

Hong Kong has been like this for the past 15 years.
People there have mastered the culture of RE speculation for a few generations.
Vancouver is just getting molded into the same form.
Price escalation at YVR has a decade to go.

Hong Kong has 7.2 million people and one of the world’s highest densities. YVR’s a village in comparison. — Garth

#38 unknown on 05.09.16 at 7:27 pm

Do you still maintain there will not be a crash?

I love your blog, but I’m still grappling with possible contradiction on your end. On the one hand, you’ve always maintained there will not be a crash.

But if housing goes up 20-30% in one year,
The definition of a crash is when it comes down 30% (in one year?), correct?

So what will precipitate a real-estate downtrend?

You’ve also stated many times you don’t believe in “foreigners”… but I’ve never read a blog post about “foreign money”. You can have Canadian residents who fund their house purchases from overseas earned money.

I haven’t seen you indicate interest rates will rise substantially in the next two years…

so what’s the turning point?

Isn’t that why pricing will keep on going up?

All real estate is local. — Garth

#39 Blogbitch on 05.09.16 at 7:28 pm

Another rate cut? Sigh. When will it end?

#40 Cici on 05.09.16 at 7:29 pm

Happy to report that even if this gasbag of a Canadian market doesn’t ever deflate, I won’t be suckered into buying. I was worried that with a baby on the way, my partner would ramp up the pressure…however, he got royally disgusted when he started scanning the RE sites and saw the price increases in our town (which is cheap incomparison to Van or TO, but still way overvalued…many sellers of 40- to 50-year old bungalows that are in need of serious renovations and have been sitting on the market unsold for some three years have suddently upped their asking prices by $50,000 to $100,000!). I don’t get the methodology…but whatever, the important part is that he wants to downsize our rental to save more $$ and maybe even eventually cross the border ;-)

#41 Shawn on 05.09.16 at 7:32 pm

American Home Prices to Rise?

Since about 2010 I have placed real money down to bet that U.S. home prices would rise. I bought shares in two U.S. banks and one home builder.

These bets are “in the money”. And I expect U.S. home prices to rise further. The sharply lower Canadian dollar added an extra boost.

Around that time Garth was saying “Buy America”.

Also around that time a lot of people posting here were sure U.S. home prices would continue to fall. The U.S. banks were “technically insolvent” etc. Yeah, not so much…

We have discussed and updated the above chart many times on this site. My view has been consistent, the lines will converge more so by the American prices rising than the Canadian prices declining. So far, so good. My updated view now would be Canada will come down, the U.S. will rise.

#42 Smoking Man on 05.09.16 at 7:33 pm

How The Donald will make America Great Again.

MUST SEE CLIP FOR CONSERVATIVES.

https://youtu.be/W7I92r9GqUw

#43 johnnny on 05.09.16 at 7:37 pm

#7 TRT- those buses can be seen through out the BC
interior,in places like Clearwater,Valemount,
“Prince”, Smithers, “Rupert”, etc… etc….
The driver has instructions.If he sees a bear near the
side of the road.He is to stop!!!
Everyone bails out of the bus, and a frenzy of photography occurs.Also admonishments,not to get too damn close!

#44 Michael King on 05.09.16 at 7:39 pm

Writing from Vancouver (Kitsilano). This latest piece by Garth only illustrates how surreal the local real estate market has become. I’m retired and have lots of time to walk around the neighbourhood. This year’s spring selling season I am certainly seeing fewer “For Sale” signs. While properties are selling it seems that those sales are taking longer. With prices so absurd I believe there are finally some signs of a market peak. The link will take you to an example. This property has been listed for 35 days and is in a lovely part of the city. A year ago, a friend sold a similar duplex for over the asking price of 1.8 million. It sold in a week and is just blocks away. There other properties in the neighbourhood that have been listed for weeks as well. Something is definitely up.

http://www.lisamacintosh.com/listings.htm

#45 james on 05.09.16 at 7:41 pm

“the Yanks also have the ability to deduct mortgage interest from their taxable incomes, pay at least 30% less in personal tax (depending on the state), and can lock in a fixed mortgage rate for 30 years.”

Yes, and those are very very handy as my last income tax return told me.

You forget one more: we can refinance at will. No penalties.

#23: “You know, Vancouver and Seattle aren’t that different in terms of climate or even job prospects.”

Ha ha ha, I’m dying here. Job prospects? Vancouver? Ha ha ha ha ha. Sorry, but slinging retail goods or houses doesn’t count. No manufacturing, no technology, no head offices, etc etc.

#5 “Prices have been getting frothy in Seattle over the past year too. The difference being that the economy is also booming”

Compared to other US cities, it is doing well. Let’s not forget Boeing just let go of 7600 people.

And yes, keeping a close eye on prices. Some areas are preposterous right now. Even Green Lake is unaffordable to all but a tiny number of people, despite being sketchy at night.

#46 james on 05.09.16 at 7:44 pm

#21 “Ego, money, corruption, politics. Late stage capitalism is like late stage Mayanism.”

That is the most childish comment I have ever seen.

You really think communism, feudalism, socialism, tribalism (etc) lack ego, wealth disparities, corruption or political intrigue??

Good lord, it’s hard to even parse this.

PS: We don’t have capitalism. In a capitalist society there are no bailouts, subsidies (e.g., Bombardier), taxpayer funded mortgage insurance programs, welfare cheques, etc.

#47 WalMark of Sadkatoon on 05.09.16 at 7:44 pm

i never witnessed the US real estate implosion. i just took advantage of it. watching the Canadian (or should i say YYZ and YVR) pressure cooker is fascinating.

the weird thing is that even tho i purchased in FL at rock bottom prices, the yoy increase in real estate prices in YVR and YYZ are giving FL a run for its money! frickin incredible. prices gains at the bottom of a cycle rising faster than from the bottom of a cycle. mind boggling

#48 Why Not Me? on 05.09.16 at 7:48 pm

Garth, you really should stop making predictions. Especially regarding house prices and interest rates. The IMF has just made some suggestions to the BoC regarding low growth in Canada. I.E. “The bank last year updated the extraordinary tools it has at its disposal, which include negative interest rates, forward guidance, large-scale asset purchases and funding for credit.”

And you think ‘low growth’ is good for real estate? Funny. — Garth

#49 Freedom First on 05.09.16 at 7:49 pm

Dylan and wife. You gross over $200,000 per year and you are worried about paying 3 or 4 thousand a month for rent? Try cultivating an attitude of gratitude. Ingrates.
You 2 really are richer than you think.

Think of the living standards for the billions of people in the 3rd world countries. Then, get on your knees and say thank you.

#50 Chaddywack on 05.09.16 at 7:50 pm

I’ve actually heard about this happening. I had a few friends who have had landlords extort them essentially because they signed “fixed term” leases for a year that do not automatically convert to month to month afterwards. The range of 30-50% increases are not uncommon at all. It’s the new reality in Vancouver. We just have to deal with it, they own the property, we don’t.

#51 will on 05.09.16 at 7:52 pm

” the Yanks also have the ability to deduct mortgage interest from their taxable incomes, pay at least 30% less in personal tax (depending on the state), and can lock in a fixed mortgage rate for 30 years”

Why is that Garth? How come we don’t get to deduct mortgage interest?

#52 WalMark of Sadkatoon on 05.09.16 at 7:55 pm

#18 Smoking Man on 05.09.16 at 6:55 pm

on the money

#53 Frank on 05.09.16 at 8:05 pm

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#54 Cottingham a bargain on 05.09.16 at 8:06 pm

“Truth be told, lots of people have made lots of money in real estate over the past five years. The sellers, I mean. Not the buyers. ”

The sellers were once buyers . I believe today’s buyers will fair just as well as sellers in the future as yesterday’s buyers did.

Control your own destiny

#55 bigtowne on 05.09.16 at 8:12 pm

Asian people are a major plus to Canada and have been for a long time. Personally I have been on my face flat broke but thanks to an Asian friend I was able to get back up.

We are lucky to have Chinese in Canada and we should celebrate our Chinese folks and try and learn from all their skills in business and family which tend to show very well on them.

The Chinese arrive in Canada and want to fit in and follow the rules….call that a great society.

#56 Cottingham a bargain on 05.09.16 at 8:13 pm

LH at #26-

I agree with you except not sure what your obsession is with c01 or c02. All GTA going higher and certain 905 areas middle, central think Yonge and 407 hwy7 radius probably going to appreciate at far greater clip than C area.

Also, all that Vancouver madness tells me is that we have seen nothing yet for GTA.

Keep buying.

#57 Andrew Woburn on 05.09.16 at 8:19 pm

Uber and Lyft are withdrawing their services from Austin, Texas over a apparent dispute over the city’s requirement that drivers be fingerprinted. But this is not the first time technology has disrupted the taxi industry.

“Cab service in New York is about to be revolutionized,” was the lead in a March 4, 1907 story in the New York Times about a technology called the taxameter, “whereby the exact distance traveled and the exact amount of the fare to be paid are accurately registered on a dial attached to the motorcab.”

But some things remain ever the same.

“While these cabs are considered the beginning of the greatest revolution in street conveyance here since the hansom was evolved in 1834, nevertheless it means suffering to the cabmen and their families.”

Maybe it ain’t over till it’s Uber.

https://timeline.com/the-new-taxi-tech-of-a-century-ago-meters-freaked-out-cabbies-too-c1e94a5580bf#.x4xb2n1ti

#58 Westvan on 05.09.16 at 8:21 pm

Vancouver population grows by 40000 every year , lowrates , easy borrowing from locals and huge inflows of foreign investment. People telling the truth aren’t Xeno’s. They’re just telling it like it is. It is what it is , you can get your let your back down Garth people aren’t as sinister as you think.

SFU study on how foreign money is the cause.
http://www.cknw.com/2016/05/08/sfu-study-foreign-buyers-vancouver-housing-market/

#59 MSM-Free Zone on 05.09.16 at 8:25 pm

I wouldn’t count on a housing correction anytime soon.

Clearly, the people responsible for controlling and preventing this kind of bubble insanity have long since been lobbied, bought, and paid for by the minority of people who have the most to gain financially from this insanity.

How else can you explain the total regulatory disregard for what is so blatantly obvious to the rest of the population?

#60 Blobby on 05.09.16 at 8:27 pm

This makes no sense.. Landlords are not allowed to raise your rent that much in Vancouver..

#61 ANON on 05.09.16 at 8:28 pm

#35 Henry Olivere on 05.09.16 at 7:20 pm

You are all hypocrites.

The blame-game hasn’t even started…trust me, you ain’t seen nothing yet.

#62 ARP on 05.09.16 at 8:29 pm

ELE: Bring on the asteroid!

At least it would give people something else to think about besides housing!

#63 Chris on 05.09.16 at 8:35 pm

Living standards in Canada going to continue to deteriorate. If you can move to the US and escape this madness it will be great. But few can.

#64 JK on 05.09.16 at 8:38 pm

#50
The Yanks get to deduct mortgage interest because they must pay capital gains tax on the sale, unless they buy another house at greater value within a year. Kind of forces you to remain in the market.
We get to keep all our gain from a principal residence so you could cash out and get your arse to Costa Rica with all your dough.

#65 Smoking Man on 05.09.16 at 8:44 pm

Anyone compare San Francisco real estate to Vancouver.
It’s a wash. Locatioñ, location, location.

And just in. Ontario home insurance going up due to fort mack…wtf. 85% of tiny fort mack intact. ..

The wynee libtards at it again with there second favorite
Fk the people industry. .

Glad I own them…

#66 Ben Gold on 05.09.16 at 8:45 pm

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#67 crowdedelevatorfartz on 05.09.16 at 8:45 pm

@#30 Brazil Ex pat
“When I was living in the Lower Moldland probably 1 in 20 people I knew made that much money…..
********************************************

Is that why you moved? To meet a richer class of people?
You should have stayed.
The average tradesmen are pulling in $75k before working obligatory OT.
I know many many many tradesmen (and women) that are in the 100k+ “club”.
Perhaps hanging around with a plethora of “code geeks” wasnt the way to financial success?

#68 tundra pete on 05.09.16 at 8:48 pm

#20 Cory

Where is the leadership? Buying houses. Crusty Clark and Gaylord Robertson are making millions, where is the problem?

#69 crowdedelevatorfartz on 05.09.16 at 8:50 pm

@#59 Blobby
“This makes no sense.. Landlords are not allowed to raise your rent that much in Vancouver…..”
*******************************************
It makes perfect sense if the landlord SELLS the apartment(condo) to another NEW landlord.
The new landlord can charge what ever they want to ….
and judging by several of the comments… a 2 bedroom condo in the West End rents, on average, for 3k…..
My suggestion.
Move to Burnaby.

#70 MF on 05.09.16 at 8:55 pm

#10 powder_hound86 on 05.09.16 at 6:44 pm

“Its ironic that if our savings actually paid an interest rate and houses were cheaper we’d likely consume and spend more than we do now.”

Exactly. Why doesn’t the BOC HIKE rates? It would send the message that the economy is improving, and would also give people more yield on their investments. By investments I mean GIC’s. Honestly, nobody cares about stocks and bonds. The stock market is seen as a heavily manipulated and dangerous fool’s game… which has some truth to it.
Anyhow, why is this so hard for our “economists” at the BOC (you can extrapolate to all central bankers) to understand? Because they know that the policy of the last decade is not working, never did, and never will.. and it shows that they are incompetent.

It’s painfully obvious that it’s all about can kicking until the next guy gets in and has to deal with it all now.

MF

#71 MF on 05.09.16 at 9:01 pm

#55 Cottingham a bargain on 05.09.16 at 8:13 pm

Please let me borrow your crystal ball. Mine is not working that well.

To be honest, I think you should buy another 5 properties. Why not since it’s a guaranteed money maker. Make sure you put the bare minimum down, leverage to the max, and that you buy in solid/sick/bomb/amazing neighbourhoods like Yonge and Eg or King West next to the clubs bro.

#58 MSM-Free Zone on 05.09.16 at 8:25 pm

Perhaps. But I view them as incompetent and unable to delay the inevitable collapse like every other instance in history.

MF

#72 Shawn on 05.09.16 at 9:03 pm

Mortgages – American Style

#44 james on 05.09.16 at 7:41 pm said:

You forget one more: we (Yanks) can refinance at will. No penalties.

******************************************
True, Americans can lock in a 30 year rate that is currently not much higher than our five year rates and traditionally was lower than our five year. Then if rates drop they can refinance at a lower rate without paying interest differentials (There may be modest administrative fees).

I have never seen a good (or really any plausible ) explanation of why this deal can’t be offered in Canada.

No, it’s not the Bank Act that makes mortgages open after five years in Canada. It can’t be that because Americans are effectively getting open mortgages after zero years and yet locked in for 30 years if they choose.

I believe U.S. banks are required to give the borrower the option to refinance as part of the deal when it is a federally insured loan.

Normally, this would place the banks at too much risk, customers have the option to refinance if rates rise but the bank is stuck with the low rate mortgage if rates rise. This is the reason that U.S. banks pretty much are forced to securitise and sell off the mortgages to investors. Investors, unlike banks, are not leveraged 10 to 20 times and can accept the risk. (Getting your fixed income investment back early is not the end of the world). Investors unlike banks would be funding the mortgages with their own money.

In Canada, the securitisation market is dominated by CMHC and there are federal rules that severely restrict securitiation.

I suspect if the rules were changed then Canadian banks could offer 25 year fixed rate OPEN mortgages by securitising those loans to investors. This would remove the risk of higher rates from homeowners at a modest cost.

It would be…. just like in the States.

An no, it would not lead to a financial crisis since CMHC could still impose strict rules around income verification. And we would not need to offer the really silly mortgages that got the U.S. in trouble (2% for the first three years etc and then 5% etc.)

Whoever could bring 25 year OPEN mortgages to Canadians would be a national hero if rates ever rise a lot.

Yet, you never hear a peep in the financial press about this.

#73 betamax on 05.09.16 at 9:06 pm

Garth: “we’re turning into a nation of xenophobes and racists, trying to blame others for the mess we’re all busy creating.”

Garth, I don’t understand your binary thinking on this one. It’s not all or nothing. It’s not a case of the market being moved solely because of foreign investment, but neither is it a case of foreign investment having no impact whatsoever on Canadian housing markets.

Foreign money is definitely influencing the market, particularly in Vancouver. And yes, the Van market is also enormously influenced by locals indebting themselves to ridiculous levels.

But both those things are happening simultaneously, and each of those things serving as a driver for the other in a self-affirming feedback loop.

#74 MF on 05.09.16 at 9:09 pm

#54 bigtowne on 05.09.16 at 8:12 pm

While I agree with the over message in your post, “Asian” also means Indian, Filipino, Sri Lanken. These groups usually come here with nothing and work like dogs doing crap jobs so they can buy real estate in the far reaches of Scarborough where gangs operate. Or Brampton.

#41 Smoking Man on 05.09.16 at 7:33 pm

AMAZING AMAZING vid. Hilarious.
Thanks for that.

MF

#75 April. on 05.09.16 at 9:13 pm

The rent thing in YVR is really a thing. Common woe around the watercooler is that the one-year lease renewal came with a 40% to 60% increase. Renovictions are also a thing.

It’s totally crazy to buy here, but don’t get comfy in your rental digs.

#76 rainclouds on 05.09.16 at 9:16 pm

Read a quote from a contrarian billionaire investor whose name escapes me,

He was discussing herd mentality and his approach to investing when the numbers are out of whack.

“I would rather be wrong, wrong, wrong, right. than right, right, right, wrong……………..

Kinda applies to Vanstupid Real Estate

#77 rainclouds on 05.09.16 at 9:19 pm

#74 April “Common woe around the watercooler is that the one-year lease renewal came with a 40% to 60% increase”

I call BS, currently renting in Van and the increase cap is 2.9%, Find another watercooler…..

#78 RW_Z on 05.09.16 at 9:20 pm

How much might it matter that > 81% of Canada’s population is urban, whereas only about 67% of the US population is urban?

This is not a tacit “maybe it’s different here” argument. But wouldn’t this affect something.

#79 bobness on 05.09.16 at 9:21 pm

Doubtful this will be posted but I’m in South Burnaby and our property is void of bugs and the shrubs are dead. I’m curious if they’ll be expanding the cancer ward parking lots in BC anytime soon? Wonder what the cause is? I wonder if its arriving from the west via the Jetstream? We’re leaving as the wife is getting panicky. No bugs, wildlife missing…..we walked the Fraser yesterday and the beaches looked sterile. In two hours we were able to count 5 insect species other than the usual ants, woodbugs and rare butterfly.

#80 Smudgekin on 05.09.16 at 9:42 pm

Canada the skinny: A protected boundary for five banks and their profits.

#81 lawboy on 05.09.16 at 9:46 pm

#13 Balmuto

“…which has gained a ton since February) is 41% more expensive than its American counterpart (US$484,402 vs $271,803).”

There must be a typo in the first number – I think you meant US$384,402.
…..

Realtor IQ.

#82 genbizx on 05.09.16 at 9:47 pm

Problem is we really no idea what is going on in the real estate sector and that is sad, irresponsible, and, frankly, makes me a little embarrassed to be Canadian. We talk about what a great country we “are” but maybe “were” is better…

Garth likes to think it’s mania and not a large foreign influence but has no real hard data. Others focus on foreign money but also have no conclusive data. Really hard to believe that decisive action is not being taken to ensure that this is tracked to see what is happening and to track it out 10 or 20 years….

#83 Christopher Mewhort, EA on 05.09.16 at 9:47 pm

“The Yanks get to deduct mortgage interest because they must pay capital gains tax on the sale, unless they buy another house at greater value within a year. Kind of forces you to remain in the market.”

Uh, no. That rule ended with the Reagan tax overhaul in 1986. If you are going to spew US tax advice, try to keep up.

#84 paddler on 05.09.16 at 9:48 pm

Below is a link of an interview about the Vancouver Housing Market and where most of the money is coming from. It was broadcasted on NW980 news in Vancouver this AM. Garth might be interested in hearing this clip. Set audio time to 9am. Advance video to the 7 Minute mark. Unfortunately there are some commercials in between.

http://www.cknw.com/audio/

#85 Vic gal on 05.09.16 at 9:48 pm

We are currently renting in BC and #76 is right. Even if a new owner buys your place, they can not increase your rent more than 3%. They can only evict you if the owner does major renos (renoviction) or the owner or his immediate family moving in. And if they do not follow through in 6 months they need to pay you the equivalent of 2 months rent. Also need to give 2 months notice and give you last month free for moving expenses.

I am in your boat in Vic. Landlord selling house. Nothing to rent in Vic that as a single mom working full-time can afford. 2 other families on our street in same boat with young kids. I just bought a house, but not in Vic. Still affordable up island. Happy to be moving out of here!

#86 crowdedelevatorfartz on 05.09.16 at 9:52 pm

@#78 bobness

Not to worry.
There are plenty of ladybugs, wasps, flies, frogs, etc.etc.etc. in “North Burnaby” including a new strain of cockroach called “real-estatus pumpus’ ….
Apparently it has the ability to type.
They’re everywhere up here if you want some..

#87 Tony on 05.09.16 at 9:53 pm

Re: #32 WUL on 05.09.16 at 7:15 pm

Not April Fool’s Day. Who is going to move to Fort McMurray? Space aliens? Martians? With the price of oil, soon Fort McMurray would have been a ghost town anyway fire or no fire.

#88 understood by few on 05.09.16 at 9:55 pm

#59 Blobby on 05.09.16 at 8:27 pm
This makes no sense.. Landlords are not allowed to raise your rent that much in Vancouver..

——

Erm.. Reading comprehension? New owner. Rent increase limits are for the current landlord. New one can kick them out or insist on any rate they please.

Seems a few missed the fact the place sold. They are lucky to have the option to continue renting.

Personally I’d negotiate. A good long term renter is worth a bit. There is cost in seeking a new renter and risk (just like losing a good employee, it’s often cheaper to keep them).

#89 lawboy on 05.09.16 at 9:57 pm

#76 rainclouds

#74 April “Common woe around the watercooler is that the one-year lease renewal came with a 40% to 60% increase”

I call BS, currently renting in Van and the increase cap is 2.9%, Find another watercooler…..”

That’s if your lease is a month-to-month or if your one year lease converts to a month-to-month. If you have a ‘fixed term’ lease, that ends when it ends, you get offered renewal at the exorbitant rates described. The people sharing their experiences are not making this up.

#90 Dirt Dog on 05.09.16 at 9:59 pm

#39 Cici on 05.09.16 at 7:29 pm
Baby!!!! Yikes, wondered where you’d been.
The fun has just begun!!
Congrats.

#91 Bottoms_Up on 05.09.16 at 10:12 pm

#76 rainclouds on 05.09.16 at 9:19 pm
—————————-
But if the home has an offer to purchase on it, then the landlord could negotiate whatever they want in terms of increasing rent (ie, turn down the prospective purchaser because the renter has agreed to pay 40% more in rent)?

#92 WallOfWorry on 05.09.16 at 10:19 pm

Well coordinated monetary policy by Central Bankers globally? Hmmm….not so much.

http://www.wsj.com/articles/japan-makes-forex-intervention-threat-1462784536?mod=e2tw

#93 Steve French on 05.09.16 at 10:23 pm

re: real estate bubble

… make it stop.. make it stop!!!!!!

#94 gut check on 05.09.16 at 10:37 pm

okay I just read the law – scattered over a few websites (BC gov and BC residential tenancies info) – it looks like this landlord may not raise the rent more than the yearly amount.

It doesn’t matter if the place is up for sale.
It doesn’t matter that it was a fixed term.
It won’t matter if a new owner comes in either, unless he wants to occupy the premises.

okay?
so we’re clear.
Dylan is not in the pickly he thinks he’s in, from what I read.

talk about doomerism.

#95 Unhinged Loon on 05.09.16 at 10:37 pm

How does someone in Vancouver make $100,000 anyway?

They’re real estate agents, aren’t they?

What else is there in YVR? Selling home insurance? Selling cellphones?

#96 WallOfWorry on 05.09.16 at 10:38 pm

We are worried about Canadian consumer debt and you have the US gov debt at $19 T which can never be re-paid. Solution: currency wars.

The US has no manufacturing base left, no middle class and a surplus of minimum wage jobs.

#97 BS on 05.09.16 at 10:41 pm

“We’re on a fixed term lease that ends next month,” Dylan posted on this blog. “The new owner just informed us that if we want to stay the rent is going up 40% (to over $3000 per month with no upgrades or improvements).

BC has great rental laws to protect tenants if you have half a brain to use them. With the standard BC rental agreement you are protected from getting kicked out unless your landlord wants to move in personally (or their direct family) and rent increases are capped at inflation. If you agree to check and initial the “fixed term lease” box in the rental agreement you lose all your rights as a renter. The landlord can kick you out for no reason or raise the rent to what they want at the lease end. Anyone who would agree to a fixed term lease deserves a 40% rent increase.

On the other hand if someone just paid $2 million for the place $3K per month is still a pretty good deal for rent. Out of that $3K rent they likely have to pay at least $800 combined in property tax and maintenance fees per month. That leaves them with a 1.3% return on the $2 million before special assessments or other expenses.

#98 GTA Girl on 05.09.16 at 10:41 pm

Today’s TO Star article on Vaughan ON city council quietly circumventing the province”s green belt and voting for development. Many of us know that council is mostly owned by local developers. The insanity now includes a beautiful farmers fields in northern Kleinburg. A big developer just put up a sign for town homes starting at $800k. Stacked town homes. In a field, along a former gravel road, in close proximity to a electrical power lines, in walking distance of nothing. No planned schools, road improvements for a decade. Development isn’t even approved yet.

In years to come, we will look back to this time and see that shady mortgage companies, and developer backed investment vehicles was criminal scams operated openly and no one in govt cared

#99 Fleurdelys on 05.09.16 at 10:42 pm

I believed in a correction but this year the bubble is growing… It will explode. Will it be local? Not so sure… Fear will be national

#100 Okanagan Man on 05.09.16 at 10:54 pm

#83….may be it is your reading comprehension you should worry about.

Doesn’t matter if it is a new owner or not. Rent increases are limited to amounts as per the residential tenancy act. If it is a fixed term lease that is expiring and not going month to month (as most do) then tenant must move out at the end of the lease.

#101 The Statistical Truth of Vancouver on 05.09.16 at 11:00 pm

For those scratching your heads as to the complete and utter detachment of Vancouver’s prices from local incomes, contemplate this:

“From inception in 1986 to 2014, the IIP and QIIP brought 190,487 wealthy immigrants to Canada, and most ended up in Vancouver. An official figure is unavailable, but given that two-thirds of Federal Investor Immigrant Program and Quebec Investor Immigrant Program arrivals settle in BC, and the vast majority of Quebec arrivals promptly flee the French-speaking province, around 120,000 millionaire migrants have likely moved to Vancouver under both IIPs, a large majority of them from greater China. UBC’s professor David Ley estimates 200,000 under the three streams of the business program from 1980 to 2012.”

By the way, look at a graph of Vancouver house prices from the mid-80s until now, and you will see the corresponding increase in house prices with the creation of the IIP.

From 1986 onwards, Vancouverites started paying a 5x income ‘premium’ which has morphed into its current stratosphere price to income ratio.

The longevity and nature of the IIP program is all you need to know about government intentions to ‘address’ the impact of foreign capital or acknowledged ‘affordability crisis’ in Canada’s major centers.

And as foreign capital continues to push locals out, both renters, and owners that cash out, the Vancouver price appreciation will follow those people – putting new price pressures on rent and houses in new communities. You are seeing this now in Fraser Valley, Kelowna and Victoria.

Do low interest rates, the Bank of Mom and Dad, lax lending requirements, and entrenched greed and fear play into market prices? Of course, they do. Are they the main factor – no.

As for Dylan and his wife, they can simply come back to visit Vancouver in a few years as its transformation into a resort community for global capital will be complete at that point. The city will be hollowed out and all that will remain will be the indebted and indentured service class catering to the needs of the rich.

Now isn’t our nice little RE sector so beneficial to Canada :)

And its cute to think that in Provinces like BC, where the FIRE sector counts for 25% of GDP, and where the government is actively courting foreign money through such things as a doubling of ESL students (back door to residency and house purchases), that anything is going to change.

Oh, and for those arguing that attracting all that foreign capital is actually great for ‘economic development’ please read the government report that analyzed 30 years of the IIP’s existence.

Those millionaire ‘investors’ paid on average $1400 in taxes – thats not missing a 0 by the way – which is less than a nanny or refugee. Oh, and 1/3rd paid nothing at all as they failed to file income taxes.

That is the true nature of the system that is being protected – one that supports foreign capital at the expense of local capital and one that views housing as a commodity as opposed to local shelter.

http://www.scmp.com/comment/blogs/article/19293Z24/study-reveals-awfulness-canadian-investor-immigration-income-tax

No, foreign buyers are not the main driver. Your obsession with them, however, might be. — Garth

#102 John on 05.09.16 at 11:06 pm

You are wrong. It will be worse. For at least another 3 years.

#103 rainclouds on 05.09.16 at 11:23 pm

#88 lawboy
You are correct, however fixed lease is not common in BC. Month to month usually kicks in after the initial 1 yr lease. My understanding, this was about renewals, my comment stands
BUT
I expect going forward, given the vacancy rate, NEW renters will likely be faced with fixed lease. (Until it gets out of hand and politicians get an earful.)

#90 bottoms up
Sorry, no idea what you are saying

#104 Gandalf on 05.09.16 at 11:28 pm

A business colleague, early 40’s, married two young kids, been renting in West Van for 5 years paying $4500/mth finally decided to bite the bullet and buy a home in West Van 12 months ago for $2.1 mill. They put $600k down and took out a $1.5 mill mortgage. Payments almost $8k/mth. The bank told them they could qualify for another $200k LOC (enabling?) but they turned it down.

I told him he was crazy! But they were trying to keep up with the group they hang with and wife was putting pressure on!

Fast forward to this weekend…He had the top selling realtor come over to see what it might sell for today?

$3.5-3.8 was the range he gave and said it would sell quickly at that price point to Asians? $1.4-1.7 tax free in a year! I told him he was crazy not to take it…

He says they are hesitating because now you can’t buy a piece of crap in West Van for under $2 mill…so they are justifying staying put?

If this isn’t one of the biggest speculative asset bubbles of all time I don’t know what is!

I’ve worked in the financial markets for over 25 years and have seen it all and this one is a disaster waiting to happen!

Good luck bubble town!

#105 chuck guild on 05.09.16 at 11:30 pm

Visited my daughter in Burnaby on Fri. to see the Grandsons school play. saw an open house sign across from their rented basement suite for 12 noon on sat.
Brand new duplex side by side $1,680,000 each side 5 beds 4 baths 2360 sq ft. terrible floor plan and was told basement could be mortgage helper(1200) was told it would be illegal suite. Realtor was courteous even though we were not the normal suspects wow back home enjoying 6 more months of free rent until our property closes Really enjoy your blog Garth

#106 Ruben on 05.09.16 at 11:30 pm

Total violation of the Residential Tenancy Act.

#107 chuck guild on 05.09.16 at 11:31 pm

Opps NO LINEUPS or anyone in site

#108 JimmyD on 05.09.16 at 11:36 pm

@#68 crowdedelevatorfartz

Uh no, a new landlord cannot change the rent more than what is regulated. The only situation I can think of where they could would be if the tenants explicitly said they were only renting for a set period of time and then leaving. OR if the new owners intended to occupy the apartment themselves.

#109 HeartSutra on 05.09.16 at 11:39 pm

As houses are treated as investment, any gains in selling houses should be subject to taxation on 50% capital gain..

#110 Popeye the Sailer Man on 05.09.16 at 11:41 pm

I was a landlord for a few years; things to know as a renter.

Rent increases are limited to 2.9% for 2016 and they have to give you 3 months notice.

http://www.tenantsbc.ca/Rent%20Increases.htm

The current owner cannot ask you to leave to sell, the new owner has to take on the tenant agreement as is and can’t force you to sign a new one so don’t.

The new owner cannot ask you to leave unless his direct family is going to occupy it and then he has to give you 2 months notice after they own it. And then has to pay you back one months rent in compensation for your displacement.

If he asks you to move and does not have direct family live in it and you find out you can sue him.

http://www.tenantsbc.ca/eviction%20bc.htm

If you have questions about eviction, phone the Residential Tenancy Office toll-free at 1-800-665-8779 or in the Lower Mainland at 604-660-1020 or Victoria at 250-387-1602.

Also always pay your rent on time because if they can document that you have been late three times they can end you tenancy.

http://www.rto.gov.bc.ca/documents/Guides/ACT_English.pdf

http://www.bclaws.ca/EPLibraries/bclaws_new/document/ID/freeside/00_02078_01

http://www.bclaws.ca/EPLibraries/bclaws_new/document/ID/freeside/10_477_2003

READ and learn your rights and challenge the old or new landlord and file with the Residential Tenancy Office ASAP if there is an issue. Be careful of dates and time lines that are very important.

If you a good tenant you diserve protection and the law is on your side. many land lords are amateur and don’t know the law and a tenant that does is powerful. Be strong but respectful, Good luck.

#111 Suede on 05.09.16 at 11:46 pm

Omg.

10 person bidding war in Coquitlam. 50% over asking (which was a reasonable price).

I haven’t seen the fat lady since 2009.

I fear she went vegan in Vancouver.

If boc cuts again. Look for more hockey stick action. Yikes.

#112 Next Move Bubble on 05.09.16 at 11:49 pm

What will the bubble do next?

If there is no June fed increase, then this bubble will keep on going like the energizer bunny.

If there is no June fed rate increase, there will be no BOC increase in 2017, and this bubble has several years to go.

If there is no June fed increase, then we will have had unofficial warnings of interest rate increases since 2009 and official warnings of rate hikes since 2011 with the powers that be ‘warning’ Canadians not to take on too much debt.

All credibility is now lost…

Since early 2012, my professionally managed ETF loaded balanced portfolio has an annualized return of 2%. Yes, I get there are bad years and it has been one bad year.

There is almost now 400k sitting there, which if leveraged, would have yielded a phenomenal RE return.

Ah yes, hindsight investment is everything. But if there is no hike in June, I am cashing out a good chunk of my portfolio and going RE.

I have a one year fixed term lease with a young family with a potential for another year at most. This is a 13 year bull market in the lower mainland.

This is an institutionalized bull market supported by a lack of political will to take action, low rates, intergenerational lending, foreign capital and a constant supply of new immigrant buyers whose cultural preference is for bricks and mortar.

Sometimes you have to admit defeat – the definition of insanity is doing the same thing over and over again and getting the same result.

#113 Frank on 05.09.16 at 11:53 pm

The rent thing in YVR is really a thing. Common woe around the watercooler is that the one-year lease renewal came with a 40% to 60% increase. Renovictions are also a thing.

You’re making shit up. There are rent controls here. I’ve lived here a decade and never heard anyone get a double digit rent increase.

#114 Ponzius Pilatus on 05.10.16 at 12:00 am

Dylan, Bob
You’re gonna have to serve somebody,
It may be the devil or it may be the Lord
But you’re gonna have to serve somebody.

#115 Paul - Thanks JUSTIN!! on 05.10.16 at 12:33 am

Thanks JUSTIN!! Looove the infrastructure spending and the DEFICIT!

30% in 2 months price GROWTH IN housing, it’s totally amazing!!! Please don’t backtrack now, please keep supporting the economy, buddy!

All that money printed since 2009 finally got it’s way to real estate :) :) :)

but let be honest, harper made us rich, too

you keep STIMULATING, BABY, KEEP GOING, THE EKONOMY NEEDS IT! HAHA

please, make sure the printers do not run out of toner. we need more stimulus.

#116 greyswan on 05.10.16 at 12:36 am

I have read most of your daily posts and are entertaining, thought provoking….the pictures are hilarious!!
I believe most of your predictions concerning real estate has not paid off in most ways…thats okay…your very respected person!!
I just do not understand your view on foreign flows of money from Asia not being the reason for crazy, inflated real estate prices in Vancouver and Toronto regions!!?

#117 Vanreal on 05.10.16 at 1:05 am

Sorry Garth, but the West end is not tony by any stretch of the imagination. It is about 80% rental and highly transient. West side is tony. Need to know your Vancouver geography if you’re going to act like you know the city.

#118 unknown on 05.10.16 at 1:15 am

Do you still maintain there will not be a crash?

so what’s the turning point?

Isn’t that why pricing will keep on going up?

All real estate is local. — Garth


Um, so what’s your verdict (crash and under what circumstance) for Vancouver and Toronto? You know, the only two markets we care about here :)

#119 fishman on 05.10.16 at 2:14 am

Garth, we go back a ways. I started as a Reform bagman for John Cummins doubled down on the Alliance & ultimately the CPC & had any hope of future Ottawa influence dashed as the new PM began his reign sending John to the Gulag. It was with more than passing interest I watched you follow on that lonely train ride. I’ve been a fan ever since. Ok,our investments in politics wasn’t too successful, but we cancel each other out. I’m a gold bug, don’t trust the market, & am not diversified, & yes have way too much in GIC’s paying 3/4% That’s 4 for you & zero for me. I can be lazy & stupid & ignore your valuable & correct prognosis because 40 years of buy & hold Van commercial & residential R/E puts me in a financial spot where a 50% collapse in prices would still leave me with more money than I could spend in the too short time I got left, (unless I get 25 year old girlfriend with a passion for drugs).

I read you faithfully & respect your financial advice. And as far as that goes with my portfolio, your batting 80% & I’m at 20%. It’s just that your reasoned analysis that foreign money isn’t the R/E price driver out here gives me this cognitive dissonance thing.

#120 Trading Naked on 05.10.16 at 2:20 am

This property has been on and off the market (currently off) in HAMtastic Richmond, BC for at least 5 years. The owners have watched helplessly as their neighbours’ houses sold left and right, after which they are bulldozed to make way for boxy yardless monstrosities. But theirs won’t sell. It just won’t. It has so many things going for it – right next door to a school, SFH, close to amenities…but the lot is oddly shaped. Sort of triangular. I guess that’s where the bad mojo is coming from.

Now imagine over-mortgaging yourself for a cursed house that just won’t sell in what’s supposed to be a hot market.

http://richmond-bc.canadianlisted.com/houses/10971-rosecroft-crescent-richmond-360-virtual-tour_3650625.html

#121 Freedom First on 05.10.16 at 3:19 am

#103 Gandalf

Your summary of Vancouver RE was right on the money. Absolutely correct.

Herd think. Powerful. Debilitating. Fugly.

#122 Jimm Beem on 05.10.16 at 4:07 am

Garth you are truly a nut job if you can deny that real estate tours of Chinese nationals are landing and buying and departing within a 72 hr time span. These are not Canadian immigrants or citizens…foreign nationals.

“Stay here next time Garth. Do some leg work.

“A foreign lettering”? Seriously? You’re an embarrassment.– Garth”

Garth…I have been on the receiving end of the Chinese property laundry game…I picked them up at the airport helped them buy one or two houses over an afternoon and they left…never having once applied for citizenship.

I have had customers in the car with unlimited budgets…it didn’t matter to them..they simply had to get money out of China.

This is Gods honest truth….I would drive these people around neighborhoods they’d heard about back in China….they would point at houses they wanted… including houses that were not listed for sale….I would stop the car, knock on the door and offer an absurd price to the owner….I was successful in getting these deals to work many times. No young local family can compete with a money laundering crook.

#123 Kenneth on 05.10.16 at 4:18 am

http://m.huffpost.com/ca/entry/9864968?utm_hp_ref=tw

A description of the HAM issue.

#124 TRUMP on 05.10.16 at 5:50 am

Stashin Cash……and waiting for the crash.

#125 jess on 05.10.16 at 6:19 am

whose interest?

The Looming Danger of All the Investment Fees You Don’t See
JEFF SOMMER MAY 7, 2016 new york times
================
Imagine Discovering That Your Teaching Assistant Really Is a Robot- wall street journal

=========
A new Stateline analysis shows that in all 50 states, the percentage of “middle-class” households—those making between 67 percent and 200 percent of the state’s median income—shrunk between 2000 and 2013. The change occurred even as the median income in most states declined, when adjusted for inflation. In most states, the growing percentage of households paying 30 percent (the federal standard for housing affordability) or more of their income on housing illustrates that it is increasingly difficult for many American families to make ends meet. Hover over states for details.
http://livingwage.mit.edu/articles/13-the-tipping-point-most-americans-no-longer-are-middle-class

#126 Buy Low Sell High on 05.10.16 at 7:05 am

A neighbour’s house in a desirable part of Toronto is going on the market in the next two weeks. They purchased it in August, 1989 during the bull run, for $285,000. The taxes back then were $585 per year. It will probably be listed around $1,200,000. The house is a wrecking ball and will most likely be sold to a builder as was the house that sold 6 doors east two years ago. My question for the dog bloggers is if it sells for $1,200,000 was this a great investment as many Canadians believe real estate to be? They bought in a bubble and are selling in a bubble which is better than selling in a downturn should the bloom ever come off the Toronto market.

#127 Lousy de loup on 05.10.16 at 7:10 am

The company I own has used the Immigrant Investor Program three separate times. It has played a notable role in creating almost one hundred jobs and many million in taxes and payroll deductions. As for the “immigrant investors”? I never met them…their principle $$ got paid back…on balance, a good program for small businesses looking to expand and create jobs in Canada.

#128 maxx on 05.10.16 at 7:28 am

“Saving and investing is plunging as debt expands.”

Disastrously low interest rates have everything to do with this and blame rests squarely and completely on the shoulders of our leaders. The Homer brigade swallowed the economist rock-star palaver of the past 2 -plus decades wholesale.

Were interest rates at levels that reward savers and investors of all stripes, a steady supply of retail sales, resulting taxes and money-motion “diversity” would ensue. An emotionally much healthier citizenry would result – what a concept!

What we now have, as opposed to that which is trending in the (more sensible) U.S. is a wasteful array of government spending designed to promote the re industry yet again, keep blue collars from going postal and taking a huge and expensive risk on “redesigning” Canada.

People hardly know the meaning of saving. They have been mentally warped by fear and desperation with rationality totally absent.

Spoke with a complete idiot yesterday who angrily insisted that TFSAs only serve to make the rich, richer. “Middle class families can’t save enough….bla,bla”. This displays the nasty “level the playing field” attitude of many in this country, whereby, rather than celebrating and emulating others’ success, there lives envy, bitterness and pretzel-logic attempts at justifying failure to save.

The phobic disease of bidding wars and the posturing designed to “increase chances” is creating a mess of proportions that will cause incredible suffering down the road.

If government can’t do the right thing, will banks do so through risk management practices?

Might banks be the economic guard-dogs of the future?

It would appear that the stuffed shirts charged with this important responsibility are simply continuing a long tradition of picking their arses.

#129 Apocalypse2016 on 05.10.16 at 7:34 am

The global disaster is taking shape right now, in front of our eyes.

Fort McMurray’s desolated areas will not be resettled. There is no point.

The fires will not be dampened by rains for months. In the meantime, they will spread and other huge fires will appear across North America as the worst global warming summer ever heats up.

Food shortages, huge new government debt, social chaos, all coming…to us.

The rest of the world is in even worse shape. 2016 shaping up to be the deaths of millions in desolate lands.

Rio Olympics will be their very own disaster. Here’s what one of the most famous Brazilians says:

http://www.dailymail.co.uk/news/article-3580785/Brazilian-football-legend-Rivaldo-urges-people-stay-away-summer-s-Rio-Olympics-crime-ridden-country-saying-putting-life-risk-here.html

“I urge all of you who are planning on visiting Brazil or coming for the Olympic Games this summer to stay in your countries. You are putting your life at risk here.”

Rivaldo should know :(

Philippines electing a new Trump-like president will destabilize the Pacific.

Russia, Ukraine coming to blows again.

Fascist anti-Muslim parties taking over Europe, Britain leaving the EU, terrorism about to spike enormously.

And at home, as today’s post makes clear, our wildly overvalued real estate and personal debt crises are about to deflate the Canadian balloon.

Apocalypse 2016 is here.

#130 jess on 05.10.16 at 7:55 am

– “Tax-free” so was that a good thing?

…”Under a 1917 law that gave Puerto Ricans US citizenship — but not the right to vote in US presidential elections — the interest earned on bonds issued by Puerto Rico is exempt from taxes, unlike that for other US states and cities…The territory approved a law in 2012 that allows Americans who become tax-domicile residents of Puerto Rico a 100 percent exemption on all capital gains, dividend and interest income.”
A Puerto Rico bona fide resident is an individual who is domiciled in Puerto Rico. Physical presence in Puerto Rico for a period of 183 days during the taxable year will create a presumption of residence in Puerto Rico for tax purposes.
http://www.portocapital.com/puerto-rico-act-22-tax-incentives-legislations-individual-investors-act/
========
see First BanCorp san juan
As of February 29, 2016, 16 of the 707 institutions that originally participated in CPP remained in the program
Troubled Asset Relief Program:
Capital Purchase Program Largely Has Wound Down
GAO-16-524: Published: May 6, 2016. Publicly Released: May 6, 2016.
http://www.gao.gov/assets/680/676954.pdf
http://wallstreetonparade.com/

#131 CJBob on 05.10.16 at 8:06 am

#48 Freedom First on 05.09.16 at 7:49 pm
Dylan and wife. You gross over $200,000 per year and you are worried about paying 3 or 4 thousand a month for rent?
____________________
Exactly, in this example they are paying 18% of their income for housing which is extremely low by any standard.

Also if rental housing is this tight in Vancouver then the conclusion is there are more people looking for housing than housing available. Thus pressure on prices indicating it will continue to rise. Supply and demand.

#132 cramar on 05.10.16 at 9:18 am

#78 bobness on 05.09.16 at 9:21 pm

Doubtful this will be posted but I’m in South Burnaby and our property is void of bugs and the shrubs are dead. I’m curious if they’ll be expanding the cancer ward parking lots in BC anytime soon? Wonder what the cause is? I wonder if its arriving from the west via the Jetstream? We’re leaving as the wife is getting panicky. No bugs, wildlife missing…..we walked the Fraser yesterday and the beaches looked sterile. In two hours we were able to count 5 insect species other than the usual ants, woodbugs and rare butterfly.

————–

Assuming that this is real and not a perception, it would be worth perusing. Is there some university, museum, or gov’t. agency that has experts in the natural sciences that could be contacted to do tests?

If they find something, go to the press. If what you say is true, something ominous is going on. Good luck.

#133 Catalyst on 05.10.16 at 9:21 am

” And you think ‘low growth’ is good for real estate? Funny. — Garth ”

Low Growth = Lower interest rates to spark inflation = Higher House prices

Welcome to the last 7 years…

Hardly. GDP is awful compared to the end of the GFC. Never, ever wish for low rates as they = trouble. — Garth

#134 The Final Post on 05.10.16 at 9:23 am

Real estate has become institutionalized in Canada and most Western (capitalist) countries.

With over 70 % of Canadians (including all the public servants and politicians) invested in it and many more via pensions, investments plans and even the CPP, the bias is to maintaining the status quo pricing or increasing it.

It is now implicitly a matter of government policy.

Housing is a basic need, but its pricing no longer reflects that , nor fundamentals, nor will it.

Reality has been suspended by changing financing requirements, relaxed lending standards, lowering of interest rates, no accountability or transparency with CREA , etc. , so there are no real references to establish price, save and except “want”. And there is no limit to “wants” with humans last time I checked.

Deciding to buy and commit your life to paying for a pile of bricks is a personal choice.

And one made easily (evidently so) as you have the whole country and its government policies, banks and RE agents behind you.

#135 cramar on 05.10.16 at 9:26 am

There was a story on the news last night about someone who just had a new home built in the fire zone. They moved in for one week, before it was completely burned to the ground. They had no insurance!

My first question, isn’t it a requirement that you have insurance at the time you get a mortgage? I don’t know about a new build. Maybe there was no mortgage on the house and it was a cash build. Maybe they were intending to get insurance soon, but just didn’t get around to it.

Bottom line—costly mistake.

#136 Life among the Stars on 05.10.16 at 9:45 am

#126 Apocalypse2016 on 05.10.16 at 7:34 am
——-

Here’s a little song I wrote
You might want to sing it note for note
Don’t worry, be happy
In every life we have some trouble
When you worry you make it double
Don’t worry, be happy

#137 Rabbit One on 05.10.16 at 10:09 am

I am a renter in Vancouver and also a landlord.

As for rent control, it only applies upon term lease renewal or while tenant is on month-to-month basis.

See :Page-1, 2: Length of tenancy

http://www2.gov.bc.ca/assets/gov/housing-and-tenancy/residential-tenancies/forms/rtb1.pdf

At the end of tenancy
Option ii): the tenancy ends and the tenant must move out of the residential unit If you choose this option, both the landlord and tenant must initial in the boxes to the right.

If you ticked this and initial, your lease contract end at the term expiry date, and you are supposed to move out of the property.

You are not protected by rent control.

These days, many owners, agents like this options.
(by greed)

It is easy to find next tenant with higher rent price (+40%), or easier to sell property 40% higher than last year.

#138 Damifino on 05.10.16 at 10:33 am

#113 Ponzius Pilatus

“You’re gonna have to serve somebody,
It may be the devil or it may be the Lord
But you’re gonna have to serve somebody.”

——————————-

Very true.

I once served divorce papers on a friend’s wife.

#139 fancy_pants on 05.10.16 at 10:36 am

In terms of standard of living, we in Canukstan are in the top 5% worldwide. Well, guess what, the world wants in. And our doors and arms are open wide. How can we serve you, how can we change for you?

Immigration, free trade, globalization and socialism are great equalizers. Many find their way in to our fertile country at the expense of us as a collective whole. Our overall standard of living has no where to go but down. You do the math.

As long as you own something the rest of the world wants, you will generally maintain your position. Those who were hedged with hard assets (RE) have made out well as a result.

I don’t see this changing much in the next decade or so as a whole – YVR and YYZ may be exceptions, but if they fall, the rest will gain that much more.

#140 coopoiler on 05.10.16 at 10:36 am

Why do people continually want/say, someone/ leaders should do something. What, are you still in grade school where everything is controlled for you. You then went to High School, had a little more freedom. Then maybe Uni and even more freedom/choice. Then finally adulthood where you control yourself. That is the process. Only adults buy real estate you and only you are responsible for your own actions do not expect to be bailed out of your bad decisions!

#141 Ray Skunk on 05.10.16 at 10:44 am

We have been pre-approved for a $1m mortgage, but can’t bring myself to even consider purchasing right now

Can’t bring himself to even consider purchasing?
Yet went out and got a pre-approval?

“u wot m8?”

#142 TurnerNation on 05.10.16 at 10:48 am

What’s a house? Bullish on commodities for next few weeks. ETFs for Nat Gas, Wheat, Coffee.
Hey, Joe.

#143 bill on 05.10.16 at 10:54 am

we have a 1 room for rent in kits near broadway and arbutus.
around 650 sq ft or so
if they are interested let me know ….
it will not be as expensive as downtown

#144 bill on 05.10.16 at 10:56 am

with your permission Garth ,Of course!

#145 Julia on 05.10.16 at 11:06 am

#132 Cramar

I believe banks require insurance on properties over which they hold security/mortgages.
Why would anyone not insure their home anyway?

#146 Ronaldo on 05.10.16 at 11:08 am

#126 Apocalypse2016 on 05.10.16 at 7:34 am

You should write a book.

#147 Rick on 05.10.16 at 11:11 am

Another example of government mismanagement and outright lies.

https://youtu.be/JNhZnfyaC3U

Show this to all the Fort Mac people.

#148 Julia on 05.10.16 at 11:12 am

#123 Buy Low Sell High
But how much has the house REALLY cost over 27 years? Maintenance? Improvements? Renovations? Add up all the expenses there would not have been in a rental and see what the real cost is.

A house is not an investment. They were lucky the timing worked and are cashing out at a good time.

#149 Bat Flipper on 05.10.16 at 11:17 am

Imagine buying stocks without knowing what the current price per share is or what the price history was for that share. When entering in your buy price, you just need to guess from what the seller says it is worth, but they could very well be lying. They could say their house is worth much more or much less than what it is worth.

Welcome to the real estate industry in Toronto.

Fortunately for the consumer, this is all to change. With the release of the MLS data, consumers will be able to see listings, days on market, current & past prices, etc.

Once the right website or app comes along, they will be able to use this information to empower the real estate consumer.

Right now, realtors can boost the market by withholding information to buyers causing much higher offers than warranted.

Would you immediately go under water to buy a home? most likely not.

Many realtors say that they won’t be replaced by an app or a website that is able to automate the task, but I would argue otherwise.

As technology progresses, it will make these types of tasks obsolete. Hell, you can even buy a castle on ebay.

http://www.ebay.com/itm/CASTLE-HOME-FOR-SALE-DONT-MISS-YOUR-CHANCE-TO-LIVE-LIKE-A-KING-/131806267492?hash=item1eb0440864:g:nrAAAOSwP~tW17Pt

#150 Attention Joanne! on 05.10.16 at 11:23 am

Good choice Joanne! If the pension you took is federally regulated by OFSI chances are it will not go broke any time soon. sixty grand a year the rest of your life! I call B.S. to any one on this blog who can get a guaranteed 6% return for the next 30 years. I know people firsthand who have taken commutated value of our Railroad pension only to see it slowly pissed away. Those that took the plan are doing quite fine. The whole idea of leaving to your estate , there are other things I am sure you can divest to them when you are gone. I am going to retire in 2 years at age 55 on a railroad pension. To take the commutated value only makes sense if I see a doctor and I get bad news about life span. You have made the right choice! I agree with a lot of stuff Garth says, but on this topic he is 100% wrong

#151 Flipstar on 05.10.16 at 11:30 am

Who wouldn’t want to buy after seeing an article like this.

Toronto House Prices Are Rising By $550 A Day

http://www.huffingtonpost.ca/2016/05/04/house-prices-toronto_n_9841878.html?platform=hootsuite

#152 Sio on 05.10.16 at 11:30 am

Hi – all renters facing a rent increase can check out your rights here. http://www.tenantsbc.ca/Rent%20Increases.htm

There is a prescribed annual increase, and they need to give 3 full months notice. So the most they can put it up, on Sept 1, is 3%, or $54 / month. And again 12 months later, and so on.

#153 I'm stupid on 05.10.16 at 11:47 am

Why does it matter how high house prices climb? Rent to buy ratio is the only metric that counts. Since you can’t borrow rent money it gives an accurate picture of the health of the economy. With a rent to buy ratio of over 28 in the gta it’s a losing proposition to be a landlord or buy at this moment. Being prudent and doing what makes financial sense is the difference between success
and failure. Sadly most will fail.

#154 TurnerNation on 05.10.16 at 11:56 am

I work with a few younger guys and always try to mentor them quietly.
To any young man I’d recommend opening a small trading account -stock options FX CFDs whatever – and make trades. Follow news. Read charts. Decide to buy or sell something, anything.
Grind away day in day out. Make decision after decision until you wake up knowing exactly what you must do each day.
Make money. Lose money. Blame the market. Blame yourself. Then settle on your own system.

In the markets there’s no Safe Rooms, no gold stars, no online petitions or other safety blankets favored by today’s weak nanny state kids. No one will congratulate you or like you or follow you.

Welcome to the real world, kid
The sooner you master the domain of real life, this will afford you a wonderful future of reasoned decision making and choices which pay off.

#155 Smoking Man on 05.10.16 at 12:01 pm

Ouch to all the BOND Bulls.

http://www.bankofcanada.ca/rates/interest-rates/canadian-bonds/

#156 lee on 05.10.16 at 12:19 pm

I don’t see how low interest rates hurt a housing market, as long as they stay low, or relatively low.

Why do you think they are low? — Garth

#157 Shawn on 05.10.16 at 12:28 pm

#136 fancy_pants on 05.10.16 at 10:36 am said:

Immigration, free trade, globalization and socialism are great equalizers. Many find their way in to our fertile country at the expense of us as a collective whole. Our overall standard of living has no where to go but down. You do the math.

*****************************************
1. Canadians do not have a collective living standard. It varies a lot by individual.

2. Why should people from other countries not be allowed to move to Canada? Why should such freedom not be considered a universal human right as long as the people abide by the laws and have no history of violence or serious criminal activity?

3. Average Canadian living standards have risen enormously in my 55 years of observing same. The trend appears set to continue based on technology. Free trade and globalization have greatly benefited most Canadians and this is set to continue. Free trade does harm certain protected and uncompetitive industries. But overall the benefits are huge.

4. Not sure what form of math you are following.

#158 ch on 05.10.16 at 12:34 pm

Guys I dont want to see any more talk about capping foreign purchases or taxing them. The last thing we need is for Canada to follow the xenophobic and racist policies of Australia, Singapore (basically the rest of the world). Lets stick to what works, unregulated markets.

#159 maxx on 05.10.16 at 12:58 pm

#39 Cici on 05.09.16 at 7:29 pm

Smart.

#160 family beagle on 05.10.16 at 1:04 pm

Meanwhile in Gold Country… the underground electrical is starting on our RV park, Slough Gardens. The site is cleared, landscaping in, driveway in. The lodge plans are being finalized and I’m looking at approx $38/sqft on a floating slab. With finishing, $65/sqft and well above building code (hemlock post and beam). The leech pond is percolating nicely and full therapeutic baths should be available soon. I’ll probably go to Cantire and get a cheap pool for the kiddies. It will be between six to ten sites with a central lodge/cookhouse (the provincial park directly across the street has day picnics only, hehe.) My buds are builder/electrician/plumber so should go slow with lots of breaks, partying, sing songs. Oldtimey barn raising alive and well in BC. My dream of being a trailer park slum lord is so close I can taste it. Should generate a modest income May thru Sept., plus boutique sales. The resident host can live rent free year round if they check in guests and keep the well pumps running. Wish I had it going for the fire refugees to stay, alas still much work to do. Celebrated by putting insurance back on the bike and going for a tool up the hwy. Glorious.

#161 IHCTD9 on 05.10.16 at 1:13 pm

#18 Smoking Man on 05.09.16 at 6:55 pm
Just wait till BOC cuts. They have no choice with oil sands shut down and exports on life support. When usdcad was 1.45 we had a massive trade surplus. At 1.30 worced in years.

We need a 1.36 usdcad for balanced trade.

Absolute madness will follow after the cut.

Don’t think one is coming. They didn’t think Australia would cut either.

Dr Smoking Man.
___________________________________________

If they cut – they might as well go right to zero and just get it over with.

#162 The Final Post on 05.10.16 at 1:15 pm

One cannot compare the current RE market in Canada to any previous period of house price inflation.

1) Never before has the RE industry been as important a driver of the economy of Canada

2) Never has mortgage financing been as cheap or as readily available

3) Never have the lending criteria been so lax

4) Never have foreign buyers been such a force in the market

5) Never has CRA been more lax in enforcing the tax code on RE transactions

6) Never have Canadian cities been so greedy for revenues and thereby compliant in approvals for inappropriate developments (building levies and taxes)

7) Never have Canadians been so willing to take out mortgages that are many multiples of their income

8) Never have Canadians RE buyers been so financially illiterate

9) Never have local / provincial politicians been so widely corrupt and so easily corruptible by RE interests

10) Never have Canadians been so manipulated and outright deceived by the RE industry

11) Never in Canadian history has the above 10 elements (points 1 to 10 ) occurred at the same time.

Simply not an “apples to apples” comparison.

Anybody relying on past history /experiences has never experienced this set of circumstances. Accordingly, their conclusions would likely be faulty.

It’s different this time? It would be the first. — Garth

#163 San Fransisco Ca on 05.10.16 at 1:16 pm

#64 Smoking Man on 05.09.16 at 8:44 pm
Anyone compare San Francisco real estate to Vancouver.
It’s a wash. Locatioñ, location, location.
And just in. Ontario home insurance going up due to fort mack…wtf. 85% of tiny fort mack intact. ..
The wynee libtards at it again with there second favorite.
Fk the people industry. .
Glad I own them…
…………………………………………………………..
Really Smoking Doink? What the hell do you know, have you ever been to San Francisco? You are comparing San Fran to Vancouver Canada, wow what a complete wipe out you are. Out in San Francisco it is know as the Wall Street of the West with an economy that dwarfs Vancouver and for that fact several provinces. Hell we inject 12 billion dollars a year just in tourism alone. No offense to Vancouver, pretty city but not in the same league as San Fran. Smoking Man go back to drinking you are so much into your self and your 8 mile long ego. Thanks for your input looser. You are the one owned!

#164 IHCTD9 on 05.10.16 at 1:27 pm

#20 Cory on 05.09.16 at 6:57 pm
As I said before, the whole thing is embarrassing. Where is the leadership to do the right thing and put a stop to it?
______________________

We fired them all, and elected idiots instead.

They then surrounded themselves with more clueless first time politicians ensuring the stupidity would be unadulterated, and indefatigable; from Bonavista, to Vancouver Island.

It’s only just getting started, enjoy the show!

#165 Ponzius Pilatus on 05.10.16 at 1:32 pm

#154
3. Average Canadian living standards have risen enormously in my 55 years of observing same. The trend appears set to continue based on technology. Free trade and globalization have greatly benefited most Canadians and this is set to continue. Free trade does harm certain protected and uncompetitive industries. But overall the benefits are huge.
————-
Shawn,
Care to back this ridiculous statement up?

#166 Fed-up on 05.10.16 at 1:37 pm

Hardly. GDP is awful compared to the end of the GFC. Never, ever wish for low rates as they = trouble. — Garth
———————————————————————————————

Aaaaaaaand they’re going lower. Aaaaaaaaand Yellen is a living joke who refuses to raise rates with the lowest unemployment in decades. Aaaaaaaaaand the whole world is seems to be going negative rate policy. Aaaaaand that means Preferreds will continue to suck ass and suck even more than they already do. Aaaaand foreign investors will continue to dump money here unabated. Aaaaand that means no real estate correction. Aaaand that means that those who waited to buy real estate have been run over by a well engineered freight train that just won’t stop rolling and with alarming force.

Kind of a 180 of what we’ve been told year after year after year after year…

#167 Ponzius Pilatus on 05.10.16 at 1:45 pm

DELETED

#168 Dan on 05.10.16 at 1:57 pm

Decent place to live? Berlin, Germany, EU.
But hey, they have a socialist past, no?

#169 IHCTD9 on 05.10.16 at 1:57 pm

#153 lee on 05.10.16 at 12:19 pm
I don’t see how low interest rates hurt a housing market, as long as they stay low, or relatively low.

_______________________________________

1,000,000.00 house at todays interest rates @ 2.5 vs when I bought @ 6.4 (seemed pretty low at the time)

**rough quick numbers**

2.4 % – 4479.00/month payment
6.4 % – 6637.00/month payment

Increase in monthly payment between 2.4/6.4 = +48%
Difference in payment per month – +$2158.00
Per Year – +$25,896.00

Gross income required to allow after tax payment of $25,896.00 in mortgage payment increases = ~$34,960.00

Raise required of your employer to cover mortgage increase from 2.5% to 6.4% = $16.81/hr.

I’d bet just the increase here is more than what a giant chunk of Canadians make all year total.

I don’t know what you do for a living, but if I walked into my boss’s office and asked for almost 17.00/hr raise – I’d be kicking pebbles…

#170 Vamanos Pest on 05.10.16 at 2:03 pm

The report by SFU’s Josh Gordon has been posted several times. Did ANY of you read it? Or did you just read the newspaper article about it?

I took the time to read it, and I think I’m actually stupider for having done so. If I was an academic, I’d be embarrassed to put my name on it. I’ll offer a quick critique by simply listing my concerns with the piece:

-difficult to find the actual report. After finding it, I realize this is because it is unpublished.

-lack of disclosure. Being a resident of the lower mainland, academic convention would ask that Dr Gordon disclose his own financial interest in the local real estate market. I would bet money that he does not own, but wants to. If this were true, the reader deserves to know as it would be an obvious source of bias.

-there is no disclosure, but there’s a disclaimer!? “all errors in judgement and data are (mine) alone”. In my life I’m not sure I’ve ever read another scholarly article that disclaims there may be “errors in data”. Sorry, but people with PhD’s are expected to be able to be factually accurate.

-He disclaims his own expertise in the area. This is NOT his area of research. One might ask why he “branched out” like this. Again, I’m quite suspicious this is because of a vested interest in the argument. If I’m wrong, I apologize. However, Dr Gordon must take some responsibility for such accusations himself, as they are in part a result of his failure to disclose his financial interests in the market that he’s discussing

-the report is riddled with unfounded assertions. Such assertions should always be footnoted (and I shouldn’t have to tell Dr Gordon this). Here’s a few examples:
-“for a time many have shied away from being frank about the matter due to potential accusations of bigotry or racism”
-“For Vancouverites the anecdotal evidence is all around them” (this one not only needs to be footnoted, basic writing skills would demand that Dr Gordon enlighten us non-Vancouverites as to what exactly he’s referring to here. Further, it is an outright troubling comment, as it’s ambiguity opens it to racist interpretation.)

-it is fallacy to use the lack of causal relationship between two variables as evidence for the presence of causal link between two others. (i.e. the argument that low interest rates (for example) is not the cause of high prices in Vancouver does not strengthen the argument that foreign money is the cause)

-Dr Gordon bases a large part of his argument on the Business Immigrant Program, however, in my opinion fails to explain how a program that ended in 2014 would have led to a surge in prices in 2015 and early 2016.

-Dr Gordon offers the weak loonie as one of the causes of the recent surge in prices. However, he fails to actually explore this as a cause. He offers it only in the context of the foreign investment as a cause. Why was there no call to strengthen the Canadian dollar with measures such as more hawkish central bank policy? Once introducing the weak loonie as a cause, Dr Gordon is compelled to both explore the cause, and offer policy solutions.

-“non-anglicized Chinese names, suggesting recent arrival.” Not footnoted. Stunning. Especially when one realizes that if not in fact true, the entire following argument in rendered invalid.

-if 12.7 billion dollars of foreign investment entered the Vancouver real estate market in 2015, one simply MUST discuss the economic consequences of enacting aggressive policy to slow this. This constitutes over $5500 dollars for every man, woman and child in the lower mainland. I know Dr Gordon isn’t an economist, but surely the obvious and drastic effect of withdrawing such a massive economic stimulus is not lost on him, and the issue needs to be accounted for in his discussion.

Overall, the report is so flawed that it serves as it’s own counterargument. Specifically, if someone with Dr Gordon’s credentials and research experience, not to mention intellect, I’m sure, can only produce a report that if submitted by a first year undergrad I would give a C+, it becomes quite convincing that in fact no such evidence exists. (Note, i’m not asserting the phenomenon of foreign investment raising prices doesn’t exist, just that the evidence doesn’t). At best, it serves as a call for better data collection.

#171 lee on 05.10.16 at 2:08 pm

IHCTD9 #166,

What you have proven is rising rates hurt a housing market. But my question is how do low rates hurt a housing market? I guess the point you are making is low rates hurt a housing market because they can’t stay low forever and will eventually rise and bite people. As long as they stay low, or go lower, I don’t see the hurt?

#172 Gonkman on 05.10.16 at 2:20 pm

Now I do own one of these investments described below but it has $0 Mortgage and was bought way before stupidity broke out for these “investments”.

I don’t consider mine an investment… its a place to live that costs me under $1000 a month including all utilities, taxes and insurance.

But a slightly modified list I found for everyone else who is loving their “RE” investment.

I think this pretty much sums up with Garth has said about it.

– It should be expensive. Ideally we’ll make it so expensive that it will represent a disproportionate percentage of a person’s net worth. Nothing like squeezing out diversification to increase risk!

– It should be not just an initial, but if we do it right, a relentlessly ongoing drain on the cash reserves of the owner.

– It should be il-liquid. We’ll make it something that takes weeks, no – wait – even better, months of time and effort to buy or sell.

– It should be expensive to buy and sell. We’ll add very high transaction costs. Let’s say 5% commissions on the deal, coming and going.

– It should be complex to buy or sell. That way we can ladle on lots of extra fees and reports and documents we can charge for.

– It should generate low returns. Certainly no more than the inflation rate. Maybe a bit less.

– It should be mortgaged! Another beauty of leverage. We can charge interest on the loans. Yep, and with just a little more effort we should easily be able to persuade people who buy this thing to borrow money against it more than once.

– It should be unproductive. Let’s be sure this investment we are creating never pays any Interest. No dividends either, of course.

– It should be immobile. If we can fix it to one geographical spot we can be sure at any given time only a tiny group of potential buyers for it will exist.

-It should be subject to the fortunes of one country, one state, one city, one town…No! One neighborhood! Imagine if our investment could somehow tie its owner to the fate of one narrow location. The risk could be enormous.

– It should be something that locks its owner in one geographical area. That’ll limit their options and keep ’em docile for their employers!

– It should be expensive to own, too! Let’s make sure this investment requires an endless parade of repairs and maintenance without which it will crumble into dust.

– It should be fragile and easily damaged by weather, fire, vandalism and the like! Now we can add-on expensive insurance to cover these risks. Making sure, of course, that the bad things that are most likely to happen aren’t actually covered. Don’t worry, we’ll bury that in the fine print or maybe just charge extra for it.

– It should be taxed! Why wait till this investment is sold? Unlike other investments, let’s tax it each and every year. Oh, and let’s raise those taxes anytime it goes up in value. Lower them when it goes down? Don’t be silly.

Pretty much sums it up…

#173 AG on 05.10.16 at 2:24 pm

An interesting idea…

http://www.theglobeandmail.com/real-estate/vancouver/vancouverites-aim-to-create-co-housing-space-within-a-condo-tower/article29799135/

#174 IHCTD9 on 05.10.16 at 2:27 pm

#161 Ponzius Pilatus on 05.10.16 at 1:32 pm

————-
Shawn,
Care to back this ridiculous statement up?
____________________________________________

Sounds about right to me. 37 million people on a giant rock filled with NR most countries can only dream of. We have a better standard of living than some living in the largest economies on the planet.

Free Trade was a boon for a place like Canada that so far has lived to manufacture products invented by others, and dig/pump/cut down -> sell. Having the US parked right next to us is awesome, not to mention most years the USD was pounding the CAD which was a double bonus if our economies were chugging along fine. China used the same basic formula to crawl into the first world (ongoing) with a bias towards exporting finished goods.

Real money comes from selling resources to folks who don’t live here – we have done that in spades thanks to NAFTA.

Globalism however, will hurt many 1st world economies in the long run unless said economy has loads of NR. Canada always seems to have at least one winner in its hand – better than many other countries.

#175 Ace Goodheart on 05.10.16 at 2:33 pm

Wondering….if Vancouver houses are really selling that fast and with that many offers, why are people using agents?

Consider that 5% commission on a 2.5 million dollar house works out to $125,000 that is a new Porsche in the driveway that a person is giving away (or $6250.00 in interest or dividends per year at 5% investment).

If the reason is that they don’t want legal problems or they don’t understand the process, I would submit that this is not a good reason. The agent doesn’t understand the legal process either (that is why we have real estate lawyers) and it is not a complicated process (there are standard forms).

Consider: You pay a real estate lawyer about $1000.00 to complete the transaction. You pay an agent $125,000 to essentially hold an open house and accept the highest offer.

The real estate lawyer can easily prepare the agreement of purchase and sale for you for whatever their hourly rate is (go ahead, hire the best lawyer in town and have them prepare a stellar, bullet proof agreement of purchase and sale – pay them $700 per hour for four hours’ worth of work putting together this document – that is $2800.00 – you still come out ahead $122,200.00 at the end of the day).

Better yet, have the lawyer present when you close the deal (again, pay whatever they are asking per hour, you are still making money).

Basically you are paying $125,000.00 to have a poorly educated “agent” present to negotiate what is probably the biggest and most important legal agreement of your entire life.

No real estate lawyer in the world is going to charge you that.

People……continue………..to not make sense………..to me.

Oh well.

Another day in polite, respectful, don’t ever ask questions or go against the flow, Canada.

#176 [email protected] on 05.10.16 at 2:37 pm

Xenophobia

https://ca.finance.yahoo.com/news/foreign-buyers-crushing-home-dreams-vancouver-canada-b-133008352.html

#177 Serve God on 05.10.16 at 2:50 pm

Serve the Lord, anything else just ain’t worth it!

#178 Al on 05.10.16 at 3:04 pm

Re: 172 – Ace Goodheart. You have a good point. It takes the same amount of work for a RE Agent to sell a $500,000 home as it takes for a $1,300,000 home and homes that sold for $500,000 in 2007 in some parts of the GTA now sell for $1,300,000 and up. Yest the commission has stayed at 5% for RE Agents.

#179 gladiator on 05.10.16 at 3:07 pm

Garth, the explosive increase in house prices in the last year in both Vancouver and Toronto would presume an explosive increase in population, given that, as you say, foreigners have almost nothing to do with it.
Where did all these people come from? Was there a baby boom that went unnoticed 20 years ago and now suddenly all this youth “needs a place to live in”?
Home ownership is above 70% in both Van and TO. Is it that more well-to-do renters suddenly decided to buy? Few of these can afford to suddenly buy at these levels.
This is one thing that doesn’t make sense.

The second one is how can the average house cost 1.2 million (talking about Toronto), whereas average family income is under 90k per year. How can this happen, or are all the buyers former condo/townhouse owners who are moving up the ladder and have built significant equity which they now are plopping into downpayments for detached houses? Or maybe the bank of Mom phenomenon is so powerful and widespread that it may be the culprit?

Hey fellow blog dogs in the lending field – can you please share your thought on this – what do you see happening?

And as I reported here a couple of years ago, I myself saw a Tai Pan Tours bus (with foreign letters, if you know what I mean) stopped by a Tridel office on Dufferin north of Finch in Toronto, with many Asian-looking people who went into the office in a very organized manner and the bus driver told me that they’re condo buyers. I did not ask where they are from, as I could see they’re definitely not locals.

And lastly, when, on 2 separate occasions, I discussed with a commercial RE broker from Toronto and a mortgage broker from Ottawa, I was told that I am a fool for not buying and that this bubble has a long way to go. Both of these guys had no interest to sell me anything – they simply shared their honest opinion, as they knew I am firmly against buying a dwelling at this time.

#180 NoName on 05.10.16 at 3:11 pm

**rough quick numbers**

2.4 % – 4479.00/month payment
6.4 % – 6637.00/month payment

260% (4%) increase in cost of borrowing, used as an example???

If fed starts reising rates that would be 16 consecutives of 0.25% (fed meets about 8 times a year) that would be rate increase every 6 weeks for 2yrs. if that would not spell out große katastrophe for people of this continent nothing else would. I queen her self doesn not care what shinaninas are done on her land to “her” people nothing will change… IMO

#181 Shawn on 05.10.16 at 3:23 pm

Living Sandards Have Risen

#162 Ponzius Pilatus on 05.10.16 at 1:32 pm
asked me to back up the following:

3. Average Canadian living standards have risen enormously in my 55 years of observing same. The trend appears set to continue based on technology. Free trade and globalization have greatly benefited most Canadians and this is set to continue. Free trade does harm certain protected and uncompetitive industries. But overall the benefits are huge.
————-
Shawn,
Care to back this ridiculous statement up?

**************************************
Not sure which statement is referred to but As far as the rise in living standards:

In 1977 a kid in my class seemed to shocked to understand that my family had two cars.

Until about 1980 fast food outlets were relatively rare. In 1970 you would have found very few Macdonalds or Tim Hortons in Canada. People shopped at Woolco (think Zellers).

You could find a parking spot downtown on weekdays because so few Moms even had a car to go shopping.

Grocery stores in 1970 were about 25% to at most 50% of the size of today.

Cars were absolute junk in the 1970’s Fords famously rusted out in three years. It was competition from Japan that soon made cars a lot better. Air bags, anti-lock brakes, GPS, reverse camera – none of that was yet available.

Families on vacation rarely stayed in Motels or ate in restaurants. Think tents, tent trailers and cook your own meals, all of them.

New houses were often no larger than 1200 square feet, one bathroom and no garage. And 50% more occupants than today.

Cell phones had not yet been introduced. Party lines were still around in some places.

Kids played outside, because there was no electronics to play with inside.

Very few Canadian kids got to Disney land or the likes in the 1970s.

Really, if you don’t understand that living standards today are vastly higher than 40 years ago and you don’t understand that free trade and globalization and technology are part of the reason, I can’t help you. If you are over 40 and have not observed that for yourself then no one can help you.

#182 IHCTD9 on 05.10.16 at 3:25 pm

#168 lee on 05.10.16 at 2:08 pm
IHCTD9 #166,

What you have proven is rising rates hurt a housing market. But my question is how do low rates hurt a housing market? I guess the point you are making is low rates hurt a housing market because they can’t stay low forever and will eventually rise and bite people. As long as they stay low, or go lower, I don’t see the hurt?
_______________________________________

My point was a little change in rates can pack a big punch. A 3.9% bump in rates increases your mortgage payment almost 50%

But now I see I’ve misunderstood your question.

Permanently low rates?

Houses prices go up – and permanently stay up.

It’s easy to imagine youth auto-exiting regions where they are permanently priced out.

Brain/youth drain forces wages higher in expensive regions and in a global economy, businesses where youth are priced out will go bankrupt trying to hire talent, or will pick up and move just like the youth.

Hard to say because its never happened. I expect there would be a lot of shuffling of people and wealth as the realization sets in that rates will stay low and seal everyone’s fate in stone.

I tend to think that the movement of youth could effect the market negatively in a low rate environment as the RE market is built from the bottom up. If you hinder the equity normally acquired by move-uppers from RE virgins – it will effect the price stability of whole pyramid.

FWIW, out my way rates are just as cheap as everywhere else – and for years too. The big houses aren’t selling quick, or for asking price. That seems normal to me due to the crap economy. Rates aren’t really playing much of a role…

#183 NoName on 05.10.16 at 3:26 pm

note to my self

Queen can only dosolve parliament on a PM request. We are doomed !!!

#184 Grey Dog on 05.10.16 at 3:27 pm

How much did one,s home increase in value…31 years ago we bought in Unionville for $220,000, on 60′ lot, on ravine. In March, my exact model of home on 50′ lot, no ravine, sold a couple of streets over for $1,650,000. Someone want to do the basic math on that?

Within 31 years, we have had window replacements, 2 new roofs, 3 furnaces, 2 air conditioning units, 1 new kitchen, 2 paved driveways, new garage doors, etc, etc,…

#185 Raincouver on 05.10.16 at 3:30 pm

DELETED

#186 Grey Dog on 05.10.16 at 3:36 pm

Just did the math, home compounded in at just under 6.2%.

#187 WUL on 05.10.16 at 4:08 pm

An epiphany. I think I just discovered a capitalist fibre in my body. My landlord/roomie in Fort McPhoenix has been fighting fires all week so he may not have thought about this. The house, which is unscathed has been listed since March 1 and has had few showings and no bites.

I texted him now that he is on stand down and suggested he call his realtor and raise the list price as a result of the recent series of unfortunate events. With housing stock down 10%, perhaps a $100K bump fits the bill.

#Cutthroat

Perhaps I should not have been so hard on Air Canada in my comment the other day.

#Hypocrite

Maybe I am a capitalist after all.

#188 Entrepreneur on 05.10.16 at 4:08 pm

Read and listened to Josh Gordon, “author and assistant professor in the School of Public Policy at Simon Fraser University” so the word is out that it is foreign investors hitting Vancouver and Toronto. Even if don’t believe it, these solutions should be put in place.

His eight solutions: 1. more data, to be more informed; 2. stiffer penalties, for real estate agents; 3. end of self-regulation; 4. change how we tax, tax housing, not income; 5. plug the property tax loopholes, one issue is to the bare trust and then to create a company as the owner of the trust(“shelters them from having to disclose weather or not they are Canadian citizens”); 6. focus on community, to build up from the bottom and feel connected; 7. protect food, “protection of good, agricultural land;” 8. change how we build, build to affordability, tax exemptions. All a no-brainer if looking out for the people that live there!!!

Vancouver and Toronto are prime examples of what happens when government officials do not listen or ignore the people that live there. Hospitals are looking for nurses, in a big city? People are angry, very angry!

#38 Blogbitch…noticed for several years less birds, even the older women said “where are all the birds” and also noticed hardly any mosquitoes anymore. It has been dry here for years middle of Vancouver Island, everything needs water. Could Apocalypse #126 be right? One must take in the consequences of their actions when playing God on this earth.

#189 Nemesis on 05.10.16 at 4:14 pm

#TuesdayMischief,Or… #It’sBetterOnFantasyIsland!… #No,Really!…

[TimesColonist] – Court OKs Oak Bay Beach Hotel sale; many creditors receive nothing

…” Receiver Mike Bell of Ernst and Young said the deal means construction creditors, who are owed about $79 million, will effectively be made whole, while bondholders, secured and unsecured creditors will recover nothing.

In total, creditors have claimed in excess of $130 million, including interest owed, against the hotel that was developed by Bison Properties, headed by Kevin Walker. The hotel went into receivership two years after opening.”…

http://www.timescolonist.com/business/court-oks-oak-bay-beach-hotel-sale-many-creditors-receive-nothing-1.2250397

#190 barb on 05.10.16 at 4:15 pm

The possibility of a President Trump will keep Canadians from heading south. Gawd!

#191 Nemesis on 05.10.16 at 4:24 pm

#TheNewAbnormal,Or… #ForShame…

[CBC] – Burnaby veterans care facility lays off entire nursing staff due to financial crisis

…”All 54 full and part time nurses at the George Derby Centre in Burnaby received layoff notices Monday as the long term and veterans care facility attempts to deal with an ongoing financial crisis.”…

http://www.greaterfool.ca/2016/05/09/the-new-abnormal/comment-page-1/#comment-447887

#InOtherNews…

[GovBC] – BC Premier Fêtes Guangdong CPC Secretary Hu Chunhua & Delegation

https://news.gov.bc.ca/releases/2016PREM0054-000754#

#192 Rainclouds on 05.10.16 at 4:36 pm

[email protected] on 05.10.16 at 2:37 pm
Xenophobia

https://ca.finance.yahoo.com/news/foreign-buyers-crushing-home-dreams-vancouver-canada-b-133008352.html

What? I thought Garth explained this one. It’s under control – ok!

#193 RentYVR on 05.10.16 at 5:24 pm

Hi Garth,

Thanks for featuring us. Thought I would give a quick update: after much deliberation, we’ve decided to bite the bullet and pay up. Yes, it’s hard to comprehend a 40% increase in a zero growth economy, but I take some solace in the fact that we’re still far ahead in terms of P/R at nearly 55 (down sadly from well over 100…). Regarding the mortgage pre-approve, the scariest thing is that the broker noted that we don’t have any pre-existing debt, which she said is very rare among her clients…and yet they still somehow these people still qualify for large loans on inflated properties. This will not end well.

Finally, you’re absolutely correct in that it’s locals not foreigners driving the buying binge here. Every single person at the half dozen or so open houses we visited on the weekend was a local (small sample size I know), but all the open houses were all very busy (mostly with families not individuals) and the only language I heard was English.

For the other posters asking about rent controls, we’re on a fixed term lease so there are no protections. It wasn’t our call (obviously), but is common out here. And yes, I’ve confirmed with the rental board and tenant legal services.

Dylan

#194 Brazil ex-pat on 05.10.16 at 5:25 pm

#67 crowdedelevatorfartz on 05.09.16 at 8:45 pm
@#30 Brazil Ex pat
“When I was living in the Lower Moldland probably 1 in 20 people I knew made that much money…..
********************************************

Is that why you moved? To meet a richer class of people?
You should have stayed.
The average tradesmen are pulling in $75k before working obligatory OT.
I know many many many tradesmen (and women) that are in the 100k+ “club”.
Perhaps hanging around with a plethora of “code geeks” wasnt the way to financial success?

+++++++++++++++++++++++++++++++++++

I rest my case

#195 Brazil ex-pat on 05.10.16 at 5:26 pm

I said 200 to 300K……not 100k.

#196 April. on 05.10.16 at 5:31 pm

#77 Rainclouds – 2.9% good if you have a month to month rent. If you signed a lease – good luck to you.

#197 Smoking Man on 05.10.16 at 5:34 pm

#163 San Fransisco Ca on 05.10.16 at 1:16 pm
#64 Smoking Man on 05.09.16 at 8:44 pm
Anyone compare San Francisco real estate to Vancouver.
It’s a wash. Locatioñ, location, location.
And just in. Ontario home insurance going up due to fort mack…wtf. 85% of tiny fort mack intact. ..
The wynee libtards at it again with there second favorite.
Fk the people industry. .
Glad I own them…
…………………………………………………………..
Really Smoking Doink? What the hell do you know, have you ever been to San Francisco? You are comparing San Fran to Vancouver Canada, wow what a complete wipe out you are. Out in San Francisco it is know as the Wall Street of the West with an economy that dwarfs Vancouver and for that fact several provinces. Hell we inject 12 billion dollars a year just in tourism alone. No offense to Vancouver, pretty city but not in the same league as San Fran. Smoking Man go back to drinking you are so much into your self and your 8 mile long ego. Thanks for your input looser. You are the one owned
…………

Agree lefties…………

Oh what is this, Ghomeshi free as a bird cause lefty jilted lovers Agree woman lied. The second trial canceled do to Fibbing.

If your going lie. do it Right.

http://www.torontosun.com/2016/05/10/jian-ghomeshi-not-guilty-in-courts-condemned-on-social-media

#198 Bottoms_Up on 05.10.16 at 5:49 pm

#181 Shawn on 05.10.16 at 3:23 pm
——————————–
Depends how you define “living standards”.

40 years ago a single job was enough to raise a 3-child family, and pay off a house in 10 years. Little debt. Live close to your job. No screen time, lots of family and nature time. How do you quantify a human being that doesn’t have to work, yet can focus their efforts on raising children, putting healthy food on the table, keeping a clean house?

Today, 2 jobs, fast food, a mountain of debt, cars take 10 years to pay off, houses take 40 years to pay off, zombie children in front of three screens hardly qualifies as an improved living standard?

#199 Smartalox on 05.10.16 at 5:53 pm

Vamanos Pest:

THANK YOU for your post! I only read about 10 pages of that report from the associate lecturer from Simon Fraser, before its shoddy quality forced me to give it the toss.

I could only imagine that it was written to troll people into exposing their latent ignorance and desire to lap up any twaddle that lends quasi-academic legitimacy to their xenophobia.

The author’s disclaimer should have read thus: “I scanned a bunch of popular media articles that blame foreign investment for high housing prices. I summarized them in a way that appeals to, and affirms my biases. I offer no real evidence to support my conclusions”

That paper is an embarrassment to the University, in terms of the quality of what purports to be ‘research’. I’ll be interested to see if the University takes any action to denounce it, now that it’s been championed by the commercial media.

#200 Jennaru on 05.10.16 at 5:54 pm

Dylan,

Yes, you make good money. That doesn’t mean you should tolerate a new LL that is trying to subvert his or her legal obligations.

The new owner of your building cannot raise rent 40%. This is illegal. Go the Residential Tenancies section of the BC website: http://www2.gov.bc.ca/gov/content/housing-tenancy/residential-tenancies/during-a-tenancy/selling-a-tenanted-property. The following is set out at that link:

– The tenancy has to continue on the same terms and conditions, including the same rent, once ownership transfers. When your year is up, the landlord can only raise rent the maximum amount allowed each year. It changes every year, but for 2016 its 2.9%.
– The LL can only kick you out if he/she wishes to occupy the unit, have an immediate family member occupy the unit, or do major renovations that require the unit to be empty
– If the LL wants to kick you out for one of these reasons, he/she needs to give you TWO months written notice and can’t give it to you until LL takes possession of the property
– Having said that, the reality is that it’s often lucrative for an LL to get rid of the current tenant and get a new tenant so they can jack up the rent since the max rental increase cap only applies to existing tenancies
– To get around the limits to ending tenancies, LLs will often provide the 2 months-notice to a current tenant on the ground of needing to do extensive renos. They may or may not end up doing the renos. BUT if the renos require permits, the LL must have the permits in place before the LL can serve the 2 months notice.

Big picture:
– Your new LL probably knows all of this and gave you a heads up to see if you’d accept the increase and save him or her the pain and time of ending the tenancy and finding someone new
– If you don’t accept the rent increase, the LL will probably try to end the tenancy. You can demand that notice be given in accordance with the law; you can’t get kicked out without proper notice
– You’ll get to stay in the unit for at least 2 months AFTER the new LL takes possession since his notice isn’t valid until he takes possession
– If you get a notice to end tenancy on the ground of renos, then you ocan demand copies of the reno permits if you want to drag it out, as the notice still isn’t valid until the permits are issued
– But, it’s not unheard of for LL’s to end a tenancy on the grounds that they or a family member will occupy it, only to then fill it with someone else. By that time, you’re out, and it’s not worth going after the LL
– In the long run, the most this will likely do is buy you some extra time to look for another rental. But it could be a valuable few months.

Good luck!

#201 Bottoms_Up on 05.10.16 at 5:57 pm

#157 Shawn on 05.10.16 at 12:28 pm
———————–
I’ll give you an example of global free markets.

I have a certain skill. To make a living, i need to earn roughly $40/hr gross where I live (could probably move to a cheaper Canadian locale and make due at $20/hr). In the on-line (global) market, my skill sells for $10/hr. I cannot compete with that. Hence, if that was my mode or earning a living, my standard of living goes down.

#202 Metaxa on 05.10.16 at 6:18 pm

@ #170 Vamanos Pest

~Bravo~
~Stands~
~Clap~

I too found the .pdf and was astounded at the contents but no where as able to dissect it as you…

On a far more important matter…me 1, CRA 0.

Had to do with well aged and marinated capitol losses within a family trust vs minty fresh capitol gains but between my whinging, a tax lawyer and a CPA doing whatever they do and me paying the bills!…I won.
Far more than I was billed too, imagine that.

drinks are on me.

#203 Buy Low Sell High on 05.10.16 at 7:40 pm

#123 Buy Low Sell High
But how much has the house REALLY cost over 27 years? Maintenance? Improvements? Renovations? Add up all the expenses there would not have been in a rental and see what the real cost is.

A house is not an investment. They were lucky the timing worked and are cashing out at a good time.

Julia, I agree with you. I did not includ these other costs which only reduce the gain. Gray Dog @ 184 calculated an overall compound annual rate of return of 6.2% for his 31 year tenure and I think my example will come out to less. Also, these people are selling into a robust Toronto bull market; what if they sold in a different environment. Or, more aptly, what if all the buyers in Toronto and Vancouver sell in a flat or declining market? Some serious calculations need to be performed before diving in!

#204 crowdedelevatorfartz on 05.10.16 at 8:10 pm

@#194-195 Brazil expat

“We’re both well compensated professionals, grossing over $200k combined which for YVR is quite good… ”
******************************************

Apparently 200k divided by 2 doesnt equal 100k each per annum on your world.

I trust your “code monkey” skills are better than your reading comprehension and math?

#205 Ronaldo on 05.10.16 at 8:59 pm

#190 barb on 05.10.16 at 4:15 pm

”The possibility of a President Trump will keep Canadians from heading south. Gawd!”

Why is that

#206 Ronaldo on 05.10.16 at 9:03 pm

198 Bottoms-up

“Today, 2 jobs, fast food, a mountain of debt, cars take 10 years to pay off, houses take 40 years to pay off, zombie children in front of three screens hardly qualifies as an improved living standard?“

Can`t agree more.