Get out

SEPTIC modified

My advice on real estate in Vancouver bears repeating. Get out.

If you’ve made a windfall profit, take it and run. If you’re leveraged up to the pits and speculating on big gains, bail. If you’re within a few years of retirement with most of your net worth in four walls, suck it out. If you cannot afford to see your equity peeled back by a third or more, and stay that way for years, then retreat. If you listened to Mom and bought a condo with diddly down, get out. If you’re a Westside gazillionaire, and want to stay that way, sell. If you just bought a shack for $2.8 million, well, too late.

The evidence of a substantial decline in the months ahead seems overwhelming.

Sales of detached homes have withered. Remember this chart from a few days ago?

CHART 1

Sales across Delusia fell by almost 8% from May to June. And beyond that, look at these toppling numbers for the various regions tracked by the local real estate board: Burnaby -30%, New West -8%, Poco -33%, Richmond -28%, Squamish -52%, Van East -26%, Van West -35%, Van North -1.2%, Whistler -41%. Does that look healthy to you?

At the same time, multiple bid situations are becoming increasingly rare. Months ago every property was being fought over by a dozen or more desperate parties. Now a seller’s lucky to get competing bids in any number.

And look at the sales-to-listings ratio. This is a barometer of market health, measuring supply and demand, which is now flashing yellow. It’s dropped to the lowest level in more than three years, after peaking in March. Back in the spring a house had a 73% chance of being sold in any one month, while now it has declined to 59%. In East Van the number has withered from an 86% sales-to-listings ratio a year ago down to just 49% now. In the other end of town, from 82% to 46% in the same time frame.

RATIO CHART

Chart: GlobalBC

Beyond these realtor-generated stats, house-horny, real estate-engorged YVRers should worry about a few other things. Like those foreign-ownership numbers everyone dissed the other day. Critics howled that a 3.3% barbarian level was misleading since the damage (from planeloads of Chinese billionaires) had already been done before the counting began. If true, what will sustain a market where the average family makes $70,000 and the average SFD is priced at $1.7 million?

Speaking of unaffordability, RBC’s latest survey alone should have had homeowners dialing realtors begging to get listed. When more than 100% of take-home income is required to just carry a house you already 25% paid for, your city is an accident waiting to happen. Get out.

And how about the latest national employment report on Friday? Forty thousand more lost full-time jobs, replaced by part-time positions, with 30,000 fewer manufacturing positions and so many newly unemployed, laid-off, punted people claiming to be ‘self-employed’. With a disproportionate amount of its provincial GDP dependent on real estate, BC is as much at risk as its jewel city.

Mostly, we should fear human nature. We move in emotional, unthinking herds with trending attitudes that inevitably lead to excess, loss and regret. Economies do not create bubbles. Only people can do that.

Young Ned wrote me yesterday from Calgary. His words pose a fitting conclusion to this post which has a two-word message.

“I know an old couple currently living in Calgary. They’ve been close family friends forever, and as they’re financially responsible, almost-retired folks I enjoy chatting with them about personal finances. This Christmas they visited family in Vancouver and ended up extending their stay an extra 2 weeks without explanation. When they were finally home, they happily announced that they had bought a condo in North Van to avoid being priced out of the market. The realtor even told them about how easy it was to commute from this location to downtown via water taxi. They should have no trouble selling that kind of rad lifestyle to any one of the desperate young professionals renting in the city, the realtor said.

“This couple didn’t go to Vancouver with any intention to buy. There is only a slim chance they will retire in Van. They’ve taken a chunk out of their retirement savings and added a mortgage, and they genuinely can’t explain why they did it. I stopped short of calling them “part of the damn problem” because I value their friendship more than I value being a petulant ass… but some people are going to get hurt in this market. It’s not just a rat race anymore, it’s a race where the course is sprinkled with rat poison…”

196 comments ↓

#1 Brazil ex-pat on 07.11.16 at 6:34 pm

“Sales dropping” will not mean anything until houses go back under a million dollars.

#2 JSS on 07.11.16 at 6:35 pm

In other news, both the TSX and Dow Jones looking pretty good YTD.

Certainly a better investment than housing. Look ma! Dividend income without working for it! No hands!

#3 calgaryPhantom on 07.11.16 at 6:39 pm

Meanwhile in Calgary. Houses are getting sold for 10-15% less than 2015 assessed values.

#4 TurnerNation on 07.11.16 at 6:40 pm

Yes Kaputs time on TLT.

#5 common sense on 07.11.16 at 6:44 pm

Sadly this will not be the first bad story.

Great advice by the realtor don’t you think? Nothing REAL in his advice to the naive couple.

Wow.

#6 Van Isle Renter on 07.11.16 at 6:44 pm

Last week Global ran a story about a “financial planner” who paid $1 miilion + for a house in East Van. Bully bid, no house inspection. The place needsmassive repairs to everything from the structure to plumbing to electrical to mould. He was in tears as he admitted that he was “endangering his daughters health” by living there.

My wife looked at me and said “What do you think about that guy’s story?”

I said “I think two things. First, that when the story of peak Greater Fool in Van is written, he’ll be the guy everyone points at. Second, if he was my financial planner, I’d bolt.”

All done kiddies. Fork time.

#7 Closer Look on 07.11.16 at 6:48 pm

Reduced listings does not mean reduced demand.

Sales are declining because the listings have declined. Most of the remaining inventory is so ridiculously overpriced and complete garbage. Anything ‘reasonably priced’ if there is such a thing is selling instantly. If any decent inventory comes on the market it will be absorbed instantly.

And the spillover effect of price appreciation has fully embedded itself on Vancouver Island. Same situation where prices up 30% in bedroom communities, and stuff that did not sell for years is selling at full asking inflated prices.

#8 crowdedelevatorfartz on 07.11.16 at 6:48 pm

Hmmm.
Every other Garth comment was…..” dont put all your eggs in one financial basket…..”
First time I think I’ve seen him say emphatically to……”get out of Vancouver real estate……”

Thats a biggie.

Speaking of economic meltdowns…..Anyone notice how many Alberta plates there are driving around Delusia these days?

#9 BOOM! on 07.11.16 at 6:48 pm

All good BUBBLES eventually POP!!

That’s why I decided in a name change, from Retited Boomer, WI which isa who, and what I are to BOOM! so you will know -without a doubt- when in your particular situation – BOOM!! the excrement has struck the propelling device.

For some, alas, it may already be TOO LATE!

Well, can’t say you have not been warned. See you in bankruptcy court. (Nah, I have no intention of seeing you, or anybody else there, least of all, myself).

I am slightly diversified, nimble, fluid, and watch my stuff daily.

Sold HSY after its bloomed like blue-green algae on a takeover rumor. -Thank You for the unearned profit, Mondolez!!

Easy Money, no rocks, or real estate needed…

M64WI

#10 Cal-gary on 07.11.16 at 6:51 pm

People in Calgary have too much money. Two words: “sunshine list”

http://www.alberta.ca/salary-disclosure.cfm

When thousands of public employees in Alberta average 150k/year you know things are #%^@!.

If you are working in the private sector it makes sense that you can make this money after years of slaving and 0 job security (oil and gas sector). But in the public sector there is no accountability for their performance, and they seem to have 100% job security.

May be things need to change. The public sector should be accountable for the salaries of their employees, and it should be based on the performance and the economy just as in the private sector.

Some people have been saying the NDP is not doing a bad job. How about that Garth? The PC’s have bloated these salaries to this point, and may be instead of focusing on taxes for the rich (which only went up a few percent in Alberta with the NDP), we should look at the accountability of the government to the people.

PC – give private sector what they want, but they also feel entitled to take, and take. Redford government another perfect example.

Never voted NDP before, but tempted not to vote PC again in the next election.

#11 Irent on 07.11.16 at 6:51 pm

Do they need to get out in GTA as well?
What are your recommendations Garth

#12 Frank on 07.11.16 at 6:52 pm

Good. I don’t want to buy but a correction here would relieve those in jobs tied to the real estate industry from employment. While I don’t have glee in seeing others lose their job it would benefit me. Thanks to NIMBYism there aren’t enough houses and our rent is drum tight. A few thousand economic sacrifices should loosen the rental market above 1% availability.

#13 Big English on 07.11.16 at 6:54 pm

Garth, what happend to the slow melt?

Your first couple of paragraphs made me feel quite sick….for those that own.

#14 F.dover on 07.11.16 at 6:56 pm

I talked to an old time Real estate Broker in Digby County N.S. on the week end and asked him, except for the exceptional few dozen, what is the average price of a high end home here in South West Nova, and his reply was, around $150,000. Interesting. Same sun, same moon, same country….

#15 CPDLC on 07.11.16 at 6:57 pm

“Be wary following the MASSES….sometimes the M is silent”

Unknown

#16 ROCK BEATS PAPER on 07.11.16 at 6:57 pm

Excellent post. Thanks Garth.

#17 Fed-up on 07.11.16 at 6:58 pm

Prices in YVR and the GTA (and most of Canada for that matter) have a lonnnnnnnng way to drop before they make any sense to a local and fiscally responsible working family .

A 15 year meteoric rise has a tendency to create the quagmire we find ourselves in.

#18 Victoria Real Estate Update on 07.11.16 at 6:59 pm

Has there been a bigger housing bubble than Vancouver’s anywhere in the world at any time? I doubt it.

When well over a third of new mortgages taken out last year had a debt-to-income ratio of at least 450%, you know it’s only a matter of time before that market implodes. See (second chart)

The same situation has existed in Victoria over the last 3 years where approximately one in three new mortgages had the same extreme debt to income ratio of at least 450% (see same chart). Source: the Bank of Canada.

Compare that with Halifax, for example, where only about one in twenty mortgages were of that sort.

Ignore the rumours that wealthy buyers from China have been moving Victoria’s market. (This chart) shows that, in Victoria, only 0.68% of all deals went to buyers from
Asia.

Locals are guilty of pumping the bubbles to the max in Vic and Van. And there’s nothing sustainable about prices when incomes are nowhere near being able to support these bloated prices.

Corrections in these two markets could be epic.

I think Garth’s advice for Vancouver should be applied to Victoria: Get Out!

#19 Victoria Real Estate Update on 07.11.16 at 7:01 pm

Replace debt to income with loan to income in my previous post.

#20 I love real estate on 07.11.16 at 7:01 pm

Sorry Garth but you are completely wrong. You just don’t understand the factors pushng our major urban markets higher.

I feel you are doing a significant moral wrong to those younger people who might follow your advice and be priced out of the maret forever.

Your blog is interesting. But on this point, you have been decisively incorrect for nearly a decade now.

Not. Gonna. Happen.

Sure. Canadian housing will be the only asset in human history to rise without end. Right. — Garth

#21 pathcontrolmonk on 07.11.16 at 7:01 pm

By the way, it wasn’t very nice of you to call a guy “scum” the other day. All he said was he thought new immigrants should speak English or French. Other than immigrants who speak neither official language, I would expect most Canadians would agree.

When you start telling people how to speak it’s not Canada any more. — Garth

#22 Dispatches from Under the Bridge on 07.11.16 at 7:03 pm

They are going to fix it.

http://www.cbc.ca/news/canada/british-columbia/de-jong-real-estate-1.3673844

Tax all of those empty places. Only the ones that are empty a full twelve months a year though Gregor says. Must be thousands and thousands of them, right?

#23 Smartalox on 07.11.16 at 7:04 pm

Ah Ned, I greatly fear the same thing from my Albertan Mother-in-law. She visits YVR regularly, (to dote on her adorable grandson, which is nice) but also looks wistfully at condo developments, going so far as to visit the sales offices of new developments.

She’s resisted purchasing to date, but I can’t help but worry that a few too many bong hits, and she’ll get hooked.

The down side is that she’ll never get her money out of her place in Edmonton, and I’d hate to see her long two homes, for the sake of thinking that it’s a sound investment.

She has a DB pension, and has divorced well, but I really worry that on one of these visits, she’ll ‘surprise’ us with news that she’s bought a condo that she’ll ultimately hate.

#24 Sixtyfourk on 07.11.16 at 7:05 pm

Vancouver real estate is insane.

I would like to see you discuss what’s happening in Japan.

1) BoJ owns ~50% of the all Japanese equity ETFs ( http://www.bloomberg.com/news/articles/2016-04-24/the-tokyo-whale-is-quietly-buying-up-huge-stakes-in-japan-inc )

2) BoJ’s QE on steroids to the point that they are the largest holder of JGBs — approaching 1/3 of the entire market. ( http://www.bloomberg.com/news/articles/2016-03-23/five-fault-lines-show-japan-bond-market-close-to-breaking-point )

3) There is credible talk (!!!) of helicopter money in Japan.

I can’t get my mind wrapped around price discovery in markets where a central bank prints money to buy assets.

What does a share of a Japanese company being priced at, say, $30 mean when the largest market participant creates money to purchase the shares?

Japan ended up here after two decades of effectively zero percent interest rates.

We are now at 7-8 years of zero percent interest rates.

Its different this time????

#25 cecilhenry on 07.11.16 at 7:06 pm

Who in the world goes on a little trip and randomly buys a house!! In another city.

What about the months of careful assessment, planning and reflection.

With closing costs, other costs, and they do not even live there.

Scary. At least to some.

#26 BOOM! on 07.11.16 at 7:06 pm

It might be a ‘slow-melt’ but, with an unknown bottom….

So, if you are in sell mode, price it realistically, if you however, are in ‘BUY’ mode make your qualified offer ridiculously low – you never know when you can ‘catch’ the panicked buyer, but wait a day – there will be another along shortly…

#27 A Yank in BC on 07.11.16 at 7:08 pm

Looks like earnings trump brexit. Handily so. Once again, it pays to ignore the headlines. This couch feels so nice.

#28 BOOM! on 07.11.16 at 7:09 pm

Wonder why they use different trucks? Can’t they just ‘wash out’ the same truck?

You really don’t think those MILK tankers never haul…well, less than food grade stuff do you?

#29 Nero on 07.11.16 at 7:10 pm

Heh heh….

https://youtu.be/_EVZwTMmk8c

#30 I can see clearly now... on 07.11.16 at 7:13 pm

“If you’ve made a windfall profit, take it and run. If you’re leveraged up to the pits and speculating on big gains, bail. If you’re within a few years of retirement with most of your net worth in four walls, suck it out. If you cannot afford to see your equity peeled back by a third or more, and stay that way for years, then retreat. If you listened to Mom and bought a condo with diddly down, get out.”

housing glut coming up….

personally I’m praying to the Cental Bank dieties….
to keep the debt levered up….
1 US rate hike in December….is my best guess….
Brexit = massive global surge in (coordinated Central Bank action)….they’ve got our backs….my new religion.

#31 Goldie on 07.11.16 at 7:17 pm

Not that it matters to me personally, but why was Surrey, Vancouver’s largest and most populated suburb, not included in the chart?

#32 George Hull on 07.11.16 at 7:22 pm

I just was watching Bloomberg and RJ O’Brien said we will see 1% 10 year treasury bond yields.

This will push mortgage rates here and real estate will keep climbing on the backs of people’s savings.

#33 Toronto Dweller on 07.11.16 at 7:23 pm

Watch out Vancouver, we’re catching up to you!
A bully bid of $500k over asking for this gem
http://www.theglobeandmail.com/real-estate/toronto/bully-bid-for-little-italy-semi-avoids-a-price-war/article30767016/

#34 Long Branch Apprentice on 07.11.16 at 7:24 pm

I’m just going to leave this here…

The Irish Economic Collapse That’s Driving Some to Suicide

https://www.youtube.com/watch?v=tEbav2MefH0

Those crazy Irish, could never happen here though.

#35 Letssee on 07.11.16 at 7:25 pm

Let’s see…..you’ve called this for over 5 yrs now, so i respectfully won’t be holding my breath !!!
If interest rates don’t climb then debt can be easily serviced so no falling prices, and interest rates aren’t going to climb meaningfully anytime soon, simple as that really !

#36 Cottingham a bargain on 07.11.16 at 7:27 pm

Your post above about Vancouver Garth , although probably true and I agree with, just solidifies my point of view about the GTA.

A long way up for prices still to go

#37 The Wet Coast on 07.11.16 at 7:27 pm

You know that point in a horror flick when you know the victim is toast. We’re there.

I tell my 25 year old daughter who thinks she’ll never be able to afford a house in Vancouver and will have to move to Edmonton to watch and learn. People will be talking about the meltdown that’s coming for the rest of her life.

#38 Ronaldo on 07.11.16 at 7:37 pm

This is for you BOOM.

http://www.kitco.com/news/video/show/Gold-Game-Film/1301/2016-07-11/Gold-ETFs-Reach-Record-High-Outpacing-Official-Sector

#39 For those about to flop... on 07.11.16 at 7:41 pm

I am o.k with the 195,it’s the million in the front of it that is giving me problems…

M42BC

http://www.rew.ca/properties/R2089613/5009-somerville-street-vancouver

#40 AK on 07.11.16 at 7:42 pm

#4 TurnerNation on 07.11.16 at 6:40 pm
“Yes Kaputs time on TLT.”
====================================
After 31 years, the Bond Bull is about to expire.

#41 Anthony Savino on 07.11.16 at 7:43 pm

I just bought some 30 year 7.75% Indian bonds. Canada is not interested in giving me interest.

#42 the Jaguar on 07.11.16 at 7:44 pm

The Friday unemployment statistics resonate here in Calgary as one walks by a store front clear of all signs of occupancy on a Monday morning. The same one that was fully occupied on the previous Friday. I guess some move out on the weekend to save face. You get a real sense that it isn’t just those working in oil and gas that are shedding jobs. It’s everybody. Alberta drove a lot of new job creation stats. Not now. One also notices a lot of recently completed condos that do not look very occupied. If any of the blog dogs (Aggregator?) know that sales/occupancy statistics would be interested to know. The developers are quietly renting some of them, but given the rental market is currently not in a landlords favour, it cannot be easy.

#43 Please Take My Money. I Beg You. on 07.11.16 at 7:46 pm

I’m sitting in a hotel lounge right now in Kelowna. The bartender is getting off shift and rushing to meet her realtor to put an offer on a house. Her words: “I have to move my butt and get the offer in fast. If you’re not fast in this market, you’re homeless. Wish me luck.”

#44 rainclouds on 07.11.16 at 7:48 pm

Sooooo, if I’m reading between the lines,
Here in Van-stupid its time to GET OUT!!!!!

This warning comes without any interest rate increase, that will be the other shoe dropping in 2 yrs…..

Premier Cleavage say Buh Bye. The Bolsheviks are taking your job………….well done!

#45 not 1st on 07.11.16 at 7:50 pm

This post cracks me up. Vancouver isnt a housing bubble. It a receptacle for capital flight which has been loosened by globalization and swashing around the planet. You can easily find out for yourself where its coming from.

#46 P Sydney on 07.11.16 at 7:53 pm

Common sense would say this isn’t sustainable, for either Vancouver or Toronto. But still, I haven’t talked to anyone in Toronto who believes R/E will drop, including a friend who’s house dropped at least 25% in 1989.

I sold my Toronto house in 2012 to move out of the city, and at that time I thought the market was overvalued. That house is probably worth 20%-25% more now than when I sold it.

What Garth is saying makes perfect sense, but if the masses believe R/E will always go up, who knows when this will end?

Garth, I know you said that all markets are local, but I’m interested in how you think a market correction in Van will affect the GTA and the general perception of R/E in other markets as well. Maybe a future blog post?

#47 F.dover on 07.11.16 at 7:55 pm

S&P hit all time high today, but economy far too bad to raise interest by 0.00000001% any time before we all die of old age, let alone as soon as tomorrow morning.

#48 Bill Gable on 07.11.16 at 7:59 pm

“There are a lot of people who have permanent residency who are not paying taxes in B.C., they are paying it somewhere else.”

New rules were enforced on June 10, demanding buyers reveal their status, whether they are Canadian citizens or permanent residents when filling out a property transfer tax form, for the purchase of a home. Those who are neither are asked to disclose their country of citizenship.

Amid the growing discontent provincial Finance Minister Mike de Jong released the first set of findings on foreign home ownership today.

The preliminary data suggests that in Metro Vancouver five per cent of all real estate purchases were made by foreign buyers, almost all of them Chinese nationals.

This was not news to anyone, and New Democratic Party Leader, John Horgan and the party’s Housing Critic, David Eby, held a news conference this afternoon to demand the government introduce a ‘speculation tax’, a two per cent tax on the assessed home value for those who don’t pay income tax in Canada.

John Horgan says, “self-declaration on a form doesn’t work”. He said Australia discovered this in similar attempts as it does not account numbered companies and blind trusts. Horgan says income tax returns are the only way to understand what is occuring.

Link: http://tinyurl.com/gqrmsq2

#49 robert james on 07.11.16 at 8:00 pm

http://www.bnn.ca/News/2016/7/11/Why-Vancouver-housing-may-have-hit-its-dot-com-bubble-peak.aspx http://www.scmp.com/property/international/article/1987371/asian-real-estate-conference-ridicules-canadian-governments#

#50 Mark M. on 07.11.16 at 8:00 pm

When you start telling people how to speak it’s not Canada any more. — Garth

Oh the irony.

#51 Arfmooocat on 07.11.16 at 8:14 pm

When you see the momentum change… BAIL

#52 bella on 07.11.16 at 8:29 pm

Realtor on the Toronto news at 6pm says good time to buy a condo in T.O. Single detached price has made these a good buy .People keep drinking the Kool-Aid

#53 Damifino on 07.11.16 at 8:29 pm

#6 Van Isle Renter

Further to your post about the “financial planner” who paid $1 million plus for a house in East Van (without inspection) that’s endangering his daughter’s health.

I saw that teary-eyed dupe on TV too. The news reporter asked him if he would change anything if he could have a do-over.

“No… not a thing”, says he.

What an airhead.

#54 VICTORIA TEA PARTY on 07.11.16 at 8:30 pm

CURRENCY WARS PAYING YVR A VISIT?

It’s been tough for China’s slower-growing economy for the past couple of years.

But recent stock market increases over there, including the Hong Kong market, indicates some sort of corner is in the process of being turned.

SOME BACKGROUND

Maybe some of this progress can be tied to the government’s decision to crack down on its citizens, who keep sneaking out money for investments elsewhere.

We are being told that only 5 per cent of BC real estate purchases having occurred in recent weeks were executed by “foreigners”.

But has anyone broken down where in Vancouver, for example, were the most popular purchases, which weren’t and how much did those puchases affect prices?

I have no clue.

Also, how many Chinese government spooks are afoot in wondrous YVR and what are they reporting back to their spymasters?

MEANWHILE OUT OF TOWN…

When you look across the world’s stock markets and economies, it is a very troubling picture.

You have Germany’s pride and joy Deutchbank which is on the verge of plunging into something very financially bad never mind many of the banks of southern Europe. Will enough money be able to be printed to bailout out these financial brigands?

As well, Germany is in potentially desperate economic condition because it depends on a healthy export market to survive, as in half their economy is tied to those exports.

Now a new British PM is about to take over from the discredited David Cameron as the Brexit business proceeds on its confused and halting course.

As for the US markets, they are still the cleanest dirty shirt in the “laundry” basket.

Canada’s market is tiny and heading for trouble as real estate begins to implode.

BACK TO CHINA…

I think the main reason why China’s wagging its finger (fist actually) at its citizens’ foreign investment adventures is that it needs more financial credibility in the eyes of the rest of the world, especially following its agonizing work in changing its economy from industrial to service.

Why? It needs this credibility for ammo as the international Currency Wars continue unabated. That is a complex and visible conflict that attacks our pocket books on a daily basis.

So, back to YVR.

It looks like, in the result, that China is having some kind of influence over YVR’s incipient real estate debacle. But how much?

Many of you, I fear, are about to live in interesting times in YVR.

#55 Closer Look on 07.11.16 at 8:44 pm

Let’s see…..you’ve called this for over 5 yrs now, so i respectfully won’t be holding my breath !!!
If interest rates don’t climb then debt can be easily serviced so no falling prices, and interest rates aren’t going to climb meaningfully anytime soon, simple as that really

———

Exactly. If this market insanity is driven 97% by locals, then the only variable of importance will be interest rates.

And look – more than half way through the year – and the 4 promised Fed hikes have been reduced to zero, ergo no pressure on mortgage rates. The seemingly impossible and ridiculed concept of BOC cutting our rates again is now miraculously back on the table.

Yawn…low rates for another decade.

Hey, the realtors were the only ones that accurately called that rates would be low for a decade and here we are a few short years away from a decade of ’emergency rates’. No one wants to trust the realtors, but the have been the only correct group.

Mortgage rates could decline further and this market will still crumble. We have probably reached a debt wall. — Garth

#56 Fitzmancam on 07.11.16 at 8:50 pm

The most corrupt and irresponsible act by banks and lenders is the summation of Gross Debt Service Ratio (HDD). It’s nice to include your car paynrnt, your insurance, your utilities, your student loan, but negligent without arriving at the monthly cost for a child a dog a sick parent. i have 3 kids and they sure cost me more than my cheap mortgage from the [email protected] who never thought to mention this obvious cost.

#57 TurnerNation on 07.11.16 at 8:52 pm

#34 Long Branch Apprentice

That is a good Youtube video. (I usually don’t want anything posted here due to Gold nutism. Outside of 1puglife too)

It will become Kanada’s fate soon, too. Take everything said by elites and turn it around to make sense.
Trickle down = Trickle down DEBT – their debt foisted onto us. See: USA Subprime crash.
Risk on…for us.

#58 BOOM! on 07.11.16 at 8:58 pm

#38 Ronaldo

So, shiny yellow hits $1356.50 (after hours today). Where did that $1900 price go? How much were the dividends? Was there a ‘split’ in share price?

Hmmm. Not very impressed, but then Gold is only a great buy when it hits a 3 year low, or better. Silver much the same. I did well buying FCS when it was gasping for air last year and sold it when it peaked over $11 later. That was enough excitement for me in the metals world. Copper & Silver have industrial uses, gold not so much.

You can lose your money your way, I’m more familiar with my way. (mine tends to recover)

#59 Be Careful on 07.11.16 at 9:00 pm

I watched my parents almost loose it all in 89 – 90 real estate crash. Believe me, it was a vivid lesson as a young person I am glad to have gone through. My father mortgaged up to his eye balls, managed to weather the long, painful downturn and held on to all of his investment properties but only by blood, sweet and tears. As a hard working immigrant he was determined not to give up. I don’t remember seeing my father much growing up, it took all of his hours to just keep us afloat. Anyone who does not see the impending bust coming has a real rude awakening waiting for them right around the corner, only the toughest will be able to weather the storm. As for me, we sold last year, pocketed a fist full of cash and have been happily renting. I am waiting patiently for the blood on the street and then I will reimerg with all my bucks back into the real estate game. I am grateful for the experience, as this time in Canadian real estate, smell just about the same as the last major crash.

#60 Bully Bid on 07.11.16 at 9:07 pm

There is no such thing as a bully bid, it is called a stupid bid. I’ve gone to auctions many times and the “bullies” will simply have paid way more than the nice kids. Let them keep paying for their moment of hubris for the rest of their lives. Perhaps that is what is needed.

#61 protea on 07.11.16 at 9:07 pm

WHY BREXIT CAME ABOUT

Garth I know you sick and tired of the Brexit debate but the following information adds some solid reasons for why 52% VOTED FOR IT.

I have deleted the long article you copied and pasted. The original is here. Next time use a link. — Garth

#62 Sarah on 07.11.16 at 9:14 pm

“And it never failed that during the dry years the people forgot about the rich years, and during the wet years they lost all memory of the dry years. It was always that way.” – Steinbeck

Humans are easily deceived, easily led. I wonder if we might finally be heading for some overdue dry years. I’ve long forgotten them, and this insane market has convinced me to no longer make bets either way.

#63 Sarah on 07.11.16 at 9:20 pm

#21 pathcontrolmonk – Canadian here, and I agree. We’ve lost that battle though. Extreme PC culture says you’re racist to even make that comment. So much for free speech. Just enjoy today.

#64 WUL on 07.11.16 at 9:23 pm

Perhaps we may witness the motto on B.C. licence plates converted to “Beautiful (Poor) British Columbia”.
And, please, do not get me wrong. I wish nothing but the best for Alberta’s sister. Your wilderness bounty helped shape me, my wife and my kids with our thousands of hours spent between hikes in Yoho to landing Chinooks near Gold River and many points between. Preserve that bounty.

The speckers with boatloads of Kitimat bungalows are probably not feeling particularly sanguine tonight owning a handful of shacks pumped up by Premier Clark’s outlandish fairy tale on the soon to be realized LNG boom and boon.

Thanks Shell!!! See today’s Globe and Mail re its decision on LNG Canada.

Oh well, if the gov’t out there continues down the path of paying Petronas huge tax dollars to actually build the first LNG plant out on the west coast, Ms. Clark might be able to leave her riding across the bridge in Kelowna and win a seat in Pouce Coupe in the spring of 2017. And yes, I have been to Pouce Coupe.

Sometimes I feel like our two provinces are served by political lesser lights.

#65 april on 07.11.16 at 9:26 pm

#7 – Apparently listings have been scarce for months now but sales continued up until recently. The overdue correction is here…………

#66 common sense on 07.11.16 at 9:27 pm

#43 Money Man

What? The realtor wasn’t there to pick her up with contract ready except for signature and deposit?

Disgusting.

#67 FearInVancouver on 07.11.16 at 9:31 pm

BUT, BUT, BUT!!… Cameron Muir, the Chief Economist for the BCREA says we’re all going to be okay, and that there is no bubble. It’s not like he has a hidden agenda or anything, right? He says detached homes are A-Okay. In fact, when asked about a bubble he laughed out loud! Funny!!!

———————–

Cameron Muir, the chief economist for the B.C. Real Estate Association (BCREA), the professional association for B.C. realtors, is one of few who deny there is anything unusual about Vancouver’s scorching market. When asked about a bubble, Muir laughed the label off.

“A bubble is where prices grow at an unsustainable rate for a long period of time, where you end up seeing rampant speculation in the market place,” he added. “This current market cycle has been rather short to be calling it a housing bubble. One year of pretty strong price growth in the market is not enough evidence to suggest there is a bubble.”

Source: Global News BC

———————–

So there you have it. No evidence to suggest a bubble. Sorry Garth, better luck next time!

#68 Ret on 07.11.16 at 9:38 pm

Everybody in Hamilton is thrilled that their home is going up by roughly $25,000 a year with the latest MPAC assessments.

I have heard this story 3x in 3 days.
“Hey, I get to live in a house for free. I only make $24 bucks an hour and I live in a $450,000 home that pays me $25,000 a year to live there. I can’t wait to flash those new numbers at [email protected] when I re-fi my mortgage. Just call me Mr. Genius. I’m gunna treat myself to some new toys or buy a rental property!”

Whiskey Tango Foxtrot is going on? It won’t just be Van and T.O. that take a hit when the bubble pops. The well off take a financial hit for sure. The less than well off that have been sucked into this RE mania will wind up far worse off.

#69 crowdedelevatorfartz on 07.11.16 at 9:41 pm

Aaaaaannnnd
In the middle of this total real estate clusterfrack…… we have the Provincial Legislature “convening a rare emergency sitting on July 25” to …..wait for it enact a new law allowing a new tax on vacant housing that sits empty for longer than 6 months……taking effect a mere 3 months before the next provincial election……a complete coincidence Im sure….
The fact that the beleagered poll numbers for Christy Cleavage may have something to do with the “too little too late” knee jerk reaction were summed up very eloquently by a young mother on the 6pm News as she was pushing her stroller in Downtown Vancouver….
” The govts(Provincial and Municipal) have been making huge amounts of money in transfer taxes and this is the best they can do? Too little too late. People cant afford to live here and are LEAVING!”

#70 Victor V on 07.11.16 at 9:43 pm

B.C. government approves plan for Vancouver to tax people who leave residential property vacant

http://natpo.st/29zjLxt

#71 Smoking Man on 07.11.16 at 9:52 pm

This is the shit should really be worried about.

https://youtu.be/-Ar5p-tV8cQ

#72 protea on 07.11.16 at 10:02 pm

#59 WHY BREXIT CAME ABOUT

Garth Apologies will use a link in future.

By the way your thoughts on YVR are very accurate. I live (rent) in East Vancouver . One street over being Franklin St just East of the PNE there are 3 homes for sale which appear to be very quiet as they have been on the market for a couple of weeks. haven’t seen that for sometime.

#73 ANON on 07.11.16 at 10:05 pm

Economies do not create bubbles. Only people can do that.

And since economies are created by invisible hands or taken hold of by “central planners” as the zero guys love to pint), this is obviously a moral failure, and cannot be explained in a mathematical and logical way. :)

#74 kc on 07.11.16 at 10:08 pm

Watched this last night. They had white and black foreigners posing as international “investors & buyers” to keep up the market and show that all the ghost cities are being sold off… they used these people to suck in common folk to buy there also after being told these apartments were being sold off… FOMO in a grand scale…. sounds just like what is happening in Vancouver….

yellow peril at its finest here… FOMO to the off shore money…

LOL

cheers

http://www.cbc.ca/passionateeye/m/episodes/chinese-dreamland

#75 Russ on 07.11.16 at 10:09 pm

BOOM! on 07.11.16 at 6:48 pm

All good BUBBLES eventually POP!!

That’s why I decided in a name change, from Retired Boomer, WI which is a who, and what I are to BOOM! so you will know -without a doubt- when in your particular situation – BOOM!! the excrement has struck the propelling device.

For some, alas, it may already be TOO LATE!
===============================

I like the name change too. It brings a smile as I remember this other classic.

https://www.youtube.com/watch?v=FCSBoOcGFFE&feature=youtu.be

Vancouver owners will realize that “reality can hit you hard Bro”.

#76 mouldy in YVR on 07.11.16 at 10:10 pm

………well said………and thanks……

#77 Brazil ex-pat on 07.11.16 at 10:18 pm

Italian bank run has begun…..

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

#78 Andrew Woburn on 07.11.16 at 10:18 pm

#62 WUL on 07.11.16 at 9:23 pm

Sometimes I feel like our two provinces are served by political lesser lights.
=====================

Or dimb bulbs.

#79 Smoking Man on 07.11.16 at 10:21 pm

A blog dog sent me this link.

Posting it is kind of going over the edge. Hunter always said you don’t know where the edge is till you go over it.

I’m a Gambling Man.

My dad is dying. A Nazi killer, he should have been granted amunity to death.

https://youtu.be/-Ar5p-tV8cQ

David Ike MSM villain..

I just don’t know anymore. MF your take on this clip.

Do we pretend that the white vs black is a anomaly. Or is there sinister powers of the new vow rich sucking up to phrases and correct spelling to keep the lie going.

Man kind fate is in MF hands.

#80 Smoking Man on 07.11.16 at 10:25 pm

Wrong link on my last post
… Strees drinking is my story.

#81 pathcontrolmonk on 07.11.16 at 10:31 pm

There is even a poll at the bottom of this article asking if the govt should restrict ALL foreign RE purchases!

“…92% of the value of new building permits in Metro Vancouver each year is being sold to foreign nationals — most from China.”

“Pointing that out is not racist — it’s a factual observation based on the B.C. government’s own data.”

http://vancouver.24hrs.ca/2016/07/11/discussing-vancouver-housing-data-isnt-racist?utm_source=addThis&utm_medium=addthis_button_facebook&utm_campaign=Discussing+Vancouver+housing+data+isn%E2%80%99t+racist+%7C+Vancouver+24+hrs#.V4Qxk_2LoZ0.facebook

#82 Smoking Man on 07.11.16 at 10:34 pm

Damn it I can’t find the link. David ike on zios.

Know this, the machine is in an all out panic. Back against the wall. Not a good thing for non Nictonites with force field sheels.

Megalo maniacs finger nails barley clutching power.
They should have band the Internet to late.

Now we face a standoff of Putin ICBMs vs MSM sucks ups.

MSM never realy valued life. What they don’t know there’s is on line.

Putin’s not fking around.

#83 Trojan House on 07.11.16 at 10:37 pm

“When you start telling people how to speak it’s not Canada any more. — Garth”

Last time I checked, Canada had two official languages – English & French. My family kept their language but also learned to speak one of the officials – guess which one. Immigrants can keep their language but I believe it is imperative to learn either English or French.

Out of context. — Garth

#84 Keith in Calgary on 07.11.16 at 10:38 pm

DELETED

#85 Self Directed on 07.11.16 at 10:39 pm

Garth is screaming at 2+ Million souls to turn back and go the other direction. Through the noise, you can barely hear his pleas.

This next phase is called “Public Mania”. This is NOT the smart money phase. This is the prick that pops the bubble which takes us into the “Blow off” Phase.

The fear is yet to come. Still quite delusional.

We are now sitting in the eye of a perfect storm so huge, that what is coming will blow the shingles off every standing structure from DT Van to the far reaching sticks. A mass sell off will occur. First, all those “Vacant” houses will go up for sale, then the rest of the “Empty Nesters” will join in. The buyers mindset will quickly change from FOMO to SBAW. “Last In” are going to get slaughtered.

#86 ww1 on 07.11.16 at 10:41 pm

As this s a slow night here in the comment section – despite Garth having very strongly suggested that everyone invested in YVR real estate “RUN AWAY” – I thought I’d try to puzzle out comment formatting. Is it just plain old HTML embedded in a WordPress blog posting like this link suggests?

Do HTML lists work ? :

like this
and this

If so, maybe we can even sneak in images like this :

As edits of postings are not allowed, I may very well be posting “Nope – that doesn’t work” shortly.

#87 ww1 on 07.11.16 at 10:44 pm

Nope – that doesn’t all work.

Simple stuff like bold and intaiics does. Good to know.

Links with proper descriptions do.

Embedded lists don’t seem to add the bullet point punctuation.

And embedding images does not work at all. THANK GOODNESS . Just think of the cat pictures we would be seeing if not.

#88 Chumpy le Chump on 07.11.16 at 10:50 pm

A while back i posted that i was putting my West Van home up for sale. I want to share the grisly details.

I paid $1,013,000 for it in June 2013, and put perhaps $100,000 into improvements/renovations.

Listed it for $1,888,000. As soon as we got a sniff of an offer from the first weekend of open house, (they wanted to schedule a building inspection), my wife of 15 years announces she wants a divorce.

We sell the house 2 weeks later for $1,850,000. Deal closed on June 30th. Took my half of the proceeds and walked.

just found out she put an offer on a condo in Whistler, which is baffling because 1) she has no job 2) she has been out of the workforce for 13 years and has no marketable career. How could she get a mortgage.

i warned her not to do it, but hey, she never listened before.

In the weeks leading up to the closing date, i started to get a sick feeling…like i was Goldman Sachs in 2008, just realizing that all those mortgage bonds are worthless, and that others are coming to this realization.

#89 Godth on 07.11.16 at 10:50 pm

Over it. Who cares. Boring. Screwed – gotcha. And then what?

#90 Smoking Man on 07.11.16 at 10:51 pm

Nothing like being in the safety of a Gazibo. Drinking and thinking about shit.

Your dad an angle who loved all of man kind including his Nazi assassins. Who spared his life way back then. And now there asking me to play along while they change his meds to kill the man of men who happens to have a broken hip at 99 who has a broken hip.

I’m not playing along. Don’t give two shits that his hip is broken. I did not sign the DNR I don’t know what world this man is in. But I’m not taken him out with out his permission.

Let the universe decide.

He was may dad, still is. A bit of hip pain is better than no unrecognized words he spews

#91 jay on 07.11.16 at 10:52 pm

This guy found solution to Vancouver’s high real estate price. https://www.youtube.com/watch?v=8eJlcF5G9qM&feature=youtu.be

#92 Post on 07.11.16 at 10:52 pm

In Vancouver there had been a shrinking inventory of single family homes in the last 3 years. And for every new rare listing you had multiple offers. Many of these homes were flipped (sometimes twice). This left house owners terrified of selling their property and missing out on future gains. The market rose by so much in the last 3 years, that nobody wanted to list. And when they did, they asked realtors what it was worth and accepted the advice and then it was sold in a day, leaving the feeling that they sold too cheap.

Now, pent up new listings of SFH’s are coming out in bigger quantities. The problem is that the new listing price is WAY higher than what comparable properties just sold for – even last month. Properties are now being listed at levels that might be 25-50% higher than what they may have sold for 2 months ago. For example many properties in the hottest parts of Vancouver are now being listed at DOUBLE what they would have sold for last year.

So now you’re seeing lots of price reductions. But after these price reductions, new listing prices are still at super crazy prices. Houses with listing prices comparable to sold prices early in the year are still selling strong.

That’s why condos and townhouses are still selling well. They’re prices are more in line with recent sales.

#93 Love My Kia on 07.11.16 at 10:53 pm

When the word is to ‘GET OUT’, its already too late.

The rats are scurrying to run out the burning building.

If someone disagrees with you today Garth, then they are truly delusional and in need of mental help.

#94 Julie K. on 07.11.16 at 10:54 pm

“…commute from this location to downtown via water taxi.”

Water taxi = Sea Bus

Obs young Ned is not at all familiar w/LOLO et al. The commute from NV->Downtown via SeaBus is quite easy actually comparative to traversing Burrard Inlet via 2nd Narrows or Lions Gate.

Interesting NV down only 1.2%. And why no stats on WV? Or Sunshine Coast (which has recorded a banner year).

#95 SickofBC on 07.11.16 at 10:59 pm

Websites like zillow (USA) and viewpoint (nova Scotia)are some of the best resources for an informed consumer . I wish they had these websites for the rest of Canadians , especially in Toronto and Vancouver , I think if Canadians had all the information on any given house at there finger tips , they wouldn’t be willing to pay 100 000$ more for the same property being flipped 1 year later , I believe if they had viewpoint in the rest of Canada it could help prices get back to normal.
No wonder TREB is fighting tooth and nail to keep the consumer uninformed ,
http://www.cbc.ca/beta/news/canada/toronto/real-estate-ruling-appeal-1.3673618

#96 El Presidente Trump on 07.11.16 at 11:18 pm

Milo and Ann ready to build my WALL…

http://media.breitbart.com/media/2016/07/Milo-Ann-Lead-640×480.jpg

#97 Sencha on 07.11.16 at 11:23 pm

Idea…they should bring back the rochester ferry. Allow Torontonians to buy homes in rochester. Ride the ferry back and forth every day/night. There’s nowhere else to buy…

#98 Lee on 07.11.16 at 11:34 pm

Driving home from Bay and Adelaide today at 6:00 p.m. Traffic bumper to bumper. Restaurants and sidewalks were jammed with people. But apparently property values about to crash in Toronto. Did you see the small house on Grace that listed for $1.4 and sold for $2.1? Nobody listens when I say $2 Million average sfh in Toronto by year’s end. Up, up, up.

Why would anybody listen to a guy saying prices will rise 75% in six months? What are you vaping? — Garth

#99 Life among the Stars on 07.11.16 at 11:39 pm

#80 Smoking Man on 07.11.16 at 10:34 pm

Damn it I can’t find the link. David ike on zios.

Know this, the machine is in an all out panic. Back against the wall. Not a good thing for non Nictonites with force field sheels.

————————-

David Icke took a few too many footballs to the head… good to see Smokey and Icke are on top of things!

“In his ancient-astronaut narrative, Icke argues that humanity has been genetically manipulated by the Babylonian Brotherhood, an ancient race of bloodlines from the Middle and Near East, known throughout history as the Illuminati and originally extraterrestrial.

In Infinite Love is the Only Truth (2005), Icke introduces his three categories of people. The highest level of the Brotherhood are the Red Dresses. These are “software people” or “reptilian software”. They lack consciousness and free will, and their human bodies are holographic veils.[119] A second group, the “sheeple” (the vast majority of humanity), are conscious, but do as they are told and are the Brotherhood’s main energy source. They include the “repeaters”, people in positions of influence who repeat what other people tell them; he cites doctors, teachers and journalists as examples.[119]

The third group, by far the smallest, are those who see through the illusion; they are usually dubbed dangerous or mad. The Red Dress genetic lines interbreed obsessively to make sure their bloodlines are not weakened by the second or third levels of consciousness, because consciousness can rewrite the software.”

#100 Snowboid on 07.11.16 at 11:49 pm

#85 SickofBC on 07.11.16 at 10:59 pm…

In our case, there were dozens of other online resources in Phoenix AZ. The only time we saw our agent was during the showings, opening the home for the inspection, and when he handed over the keys at close of escrow.

The Maricopa County Assessor and Tax offices have online resources – for example one of our favourite areas near the Arizona Biltmore: http://maps.mcassessor.maricopa.gov/?esearch=16412125&slayer=0&exprnum=0

Also online was information on where the floodplains are, termite issues (common in AZ) etc.

Back when we purchased in 2010 all the real estate work was done online through DocuSign. No lawyers needed, we did have to see a notary for one signing.

We also got about $ 800 back from our buyers agency as a bonus – sharing commission with the buyer – who would have thought!

#101 Greyhelm on 07.11.16 at 11:51 pm

Ontario doctors just settled with the government for an increase of 2.5% per year over the next few years, and are saying they need 3.2 just to break even. Does anybody believe them? I think the government gave them too much.

#102 not 1st on 07.12.16 at 12:02 am

“It would be a great thing to destroy the housing market”

Vancouver is the weak link in the chain in the global crack-down on money laundering.

That’s according to former Wall Street short seller Marc Cohodes who tells CKNW’s Jeremy Lye why in order to save Vancouver’s real estate market, it might be necessary to destroy it.

http://www.cknw.com/2016/07/08/201079/

#103 DON on 07.12.16 at 12:02 am

#13 Big English on 07.11.16 at 6:54 pm

Garth, what happend to the slow melt?

Your first couple of paragraphs made me feel quite sick….for those that own.
*****************

I believe we were already in the slow melt – if you put aside the realtor advertisements in the last 12 months. The once bustling building boom has now tempered down. Now time for the new and resale home sales, then condos?

#104 MSM-Free Zone on 07.12.16 at 12:06 am

Ironic that Vancouver home sales began plummeting shortly after the BC government announced the end of ‘self-regulation’ by the province’s REALTURD®’s.

“….The announcement comes a day after a special advisory group issued a damning report on a decade of self regulation, which recommended several measures, including raising maximum fines for misconduct from $10,000 to $250,000 for agents….,”

http://www.cbc.ca/beta/news/canada/british-columbia/christy-clark-real-estate-report-1.3658442

#105 DON on 07.12.16 at 12:10 am

#62 WUL on 07.11.16 at 9:23 pm

Yup

Only the tip of the iceberg.

#106 Robert on 07.12.16 at 12:44 am

I was scouted for a job with a tech company in YVR. It would have meant a move, modest increase in compensation. Did a drive by the location, factored in the costs of the move, the hours long commutes, the loss of community, without even factoring the insane cost of housing. No thanks. Good luck Vancouver employers and business owners.

#107 Dispatches from Under the Bridge on 07.12.16 at 12:46 am

“So, shiny yellow hits $1356.50 (after hours today). Where did that $1900 price go? How much were the dividends? Was there a ‘split’ in share price?”

A shiny stainless unwashed food grade tanker? Or maybe the tanker yanker found a way to extract a piece? Was it a bottom load tank or the top load? If top load did it have the hydraulic safety rails? Maybe the tanker was washed out and it went down the drain? There again it is difficult to ever get that tank truly empty, maybe it’s all laying in the bottom of the trailer. More likely a load pimp got his greedy sticky little fingers on it and it just vanished into thin air, or more truthfully his pocket. I don’t really know, just stuff I heard riding around in my 389.

So many of you seem to have selective reading abilities. If not for so many unforeseen world events this housing market would have long ago crashed. The interventions to keep interest rates artificially low largely created this fiasco.

Back in the late eighties/early nineties we heard all of the same things we hear now really except the interest rates went astronomical. Speculators and flippers were the talk of the day then too. Many lost their shirts, even those just trying to buy a home for their family.

Victoria Tea Party, that says it all there I guess, a previous post actually did break that down so you either didn’t read it or didn’t grasp it. Many of you can’t seem to grasp the obvious because you are deeply committed to the point of view you have because the reality differs from that view. You can justify it by the evidence that house prices just continually rise. The bigger the bubble the more violent the pop.

The simple truth is that long ago housing prices exceeded the average income. A few months ago I encountered a woman in a store and had a three way conversation with her and the store owner. She said something that made me ask what she did for a living and she replied she was a mortgage broker. I asked how are people qualifying for these mortgages they obviously shouldn’t. She said there was a lot of creative thinking and measures employed. Like Dana Carvey used to say isn’t that special and so many of us really do think we’re special and immune to the realities that confront us.

We are in disastrous times and as this post says those who see the writing on the wall and take action will profit from the disaster, if they are in the position to. Those who don’t read it will be the ones providing aforementioned profits to their demise.

#108 Joe2.0 on 07.12.16 at 12:46 am

As long as countries continue quantitive easing = cheap money RE will continue to climb.

#109 lukas luo on 07.12.16 at 12:56 am

While I agree the YVR market is frothy, let me throw in my two cents why there is no imminent crash. The reason is simple – no or limited financial distress among homeowners at the current interest rate environment. The headline numbers for debt service ratio (e.g. 100% of take home income to service mortgage) is as muddy as the headline that 5% YVR transaction is by foreigners. The headline numbers don’t take into account other income sources.

First, it’s no secret that at least 90% of YVR homes have basement suites rented out. A typical Vancouver special has a two rental units which could easily bring in $1,600 / month. Many new homes also have a laneway home which could brining in additional $1,200 / month. At the current rates, $500 / month could service about $100K debt. Thus, a new house with a laneway home can service about $560K debt. While not all YVR homes have laneway units, the point is that rental income services a significant portion of a typical mortgage in YVR. We all know how many people actually report rental income to CRA (i.e. income not accounted for by the headlines).

Second, a lot of Asian families have multi-generations living under the same roof. The headline debt service numbers may only take into account the size of the mortgage relative to the borrowers income; it may not take into account that other family members (e.g. adults kids) who contribute to the mortgage payments and family expenses. Thus, the debt service ratios are inflated.

Third, while I don’t have the stats to back it up, anecdotally I have heard Chinese buyers (recent immigrants with permanent resident status) are taking mega mortgages not because they don’t have the money but because of other reasons. One reason might be that they couldn’t get all the necessary funds to pay in full in a short period of time because of China’s capital outflow restrictions (e.g. they pay 50% the purchase price and mortgage the remaining 50%). Another reason is that some people who have spouse and kids in Canada but earn their income elsewhere mortgage their purchase simply to avoid being on CRA’s radar. A lot of these people declare zero income in Canada and are smart enough not to pay for the full purchase in cash will deliberately take out hefty mortgages. One might ask how does one get a hefty mortgage if he has no income in Canada. Just as there are many ways to skirt China’s capital control, there are many ways to secure a mortgage with zero income. One approach is to personally guarantee your own mortgage with investments held outside the country. For example, one could obtain a mortgage from a bank operating in Canada (e.g. a Canadian schedule II bank with a strong presence in Asia) by securing the mortgage using a non-redeemable GIC investment held at the same bank in a branch outside the country.

In short, in the current interest rate environment any correction will be shallow as there will not be many sellers who are willing to sell for less than the most recent highs. If they don’t get the price they wanted, they will simply pull it off the market as there is no real catalyst for them to sell (not many are under financial distress).

#110 Entrepreneur on 07.12.16 at 1:18 am

Vancouver is in a mess and if I were a leader at any level I would be deeply humiliated. This is NOT leadership. Either way.

Most of us live by morals, raised by morals, work by morals, and this is how our system works and live by (don’t, pay a penalty). Most of us start a small business with that “silent” rule of conduct, an individual owner, one entity.

Some disagree, speak loudly and clearly, most using calmness, thinking of solutions. Unless in a group where voices are louder and emotions are cheered on, spread like wildfire. A group that hypes emotions to their advantage but downplay the disadvantages and consequences (real estate cartel).

We are humans with brains, choices, but one person is controlled and contained (now with technology); whereas, a group of people (big businesses, unions, government) decide the solution with their emotions/greed. One extreme to another.

It is not right for a leader at any level to allow this to happen to most of the people. People are important to the economy.

Night.

#111 Told you so... on 07.12.16 at 1:48 am

Garth, many posts ago I said a few times this would not be a gentile drop in the YVR RE market, that it would happen about now, rapidly and here we are…at the start of it all.

By the time most wake up (end of summer) it will be a race to jump ship. Most likely September to November. That is when the fun/angst will begin and the press starts to report the collapse.

Human nature then will be hard at work to bail at all costs to monetize whatever paper gains they have made.

You’re a good man for having re-posted to warn people.

Probably why Harper fired you, couldn’t handle your honest and caring nature. Always knew you were a softie beneath all that dollars and cents exterior of yours.

#112 More bad news in economy & 416? on 07.12.16 at 2:32 am

Agree with your assessment of the last Labour Force Survey, dismal and has been since late last year as has been GDP…ONLY major growth sector has been RE from YVR/416.

Funny how the Labour Survey received but a footnote in the MSM in the last week…bury your head in the sand syndrome…it will all go away by itself.

If the July 29 GDP Report and the August 5 Labour Force Survey are equally dismal or worse (job losses, no economic prospects to speak of) then there will be a mass exodus in YVR RE and it will be painful to watch.

Fear is a powerful human emotion (e.g., FOMO).

Question is, when will all this (jobs, GDP) hit 416? The last RE bastion propping up GDP in Canada.

#113 Ronaldo on 07.12.16 at 2:37 am

#56 BOOM! on 07.11.16 at 8:58 pm

#38 Ronaldo

So, shiny yellow hits $1356.50 (after hours today). Where did that $1900 price go? How much were the dividends? Was there a ‘split’ in share price?
————————————————————–
Well, for us Canucks gold in our loonies is now at $1769 which is only 7% below the high of $1895 of Sep. 5/11 when our currencies were at par. Many of the gold producers are up 400 to 500 percent since the January 20th lows. My best performer has been MUX, up 644% since July last year. When a sector is down over 90%, how much risk is there really? It was just a matter of time. Buy low, sell high.

If a stock is down 90% and goes back up 100%, its still only back to 1/5 of its original value and a long ways to go. That stock would have to rise 900% to get back to it’s original high.

This current bull market in pms is only getting started and those who understand this market will make a lot of money. If not for the current bull market in pm’s the TSX would not be where it’s at right now. Most people missed these rare opportunities in this sector in the past and will do so again this time. Little competition in this area.

Silver in USD is up 46% ytd. The producers are up much more than that. For example, FR 506%, EDR 348%, GPR 405% to name a few. These are just some that I own. P.S. I have never lost a penny trading in pm’s and I have been doing so for almost 50 years now. I know of no one else who bought silver in November of 2008 when the price hit below 9.00 ( I bought at 8.88) and sold at the exact top on May 1, 2011 at $49.44 before the markets opened for trading. I did. Eric Sprott sold several million dollars worth in the third week of April 2011. This and the fact that margins had increased several times in the days leading up to the blowoff was the clue that it was time to bail. Proceeds taken in USD’s and held til January this year and cashed out at $1.45 and good portion reinvested in the producers. Now time to take money off the table and invest in the next sector that is ready to go. It’s not rocket science. And this is outside of my balanced and diversified portfolio. It’s my play money.

#114 BillyBob on 07.12.16 at 4:45 am

When you start telling people how to speak it’s not Canada any more. — Garth

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

Glib. No one is “telling” people to speak a certain language. Just observing that if someone is sincere in their intentions to participate in a society they may wish to make at least a token attempt to learn one of its languages.

I do know that when my CBSA officer brother is interviewing someone about their luggage contents, and the person holds a Canadian passport and has for many years, yet is incapable of comprehending a word being said to him…the situation has become farcical.

I spend more time visiting non-English-speaking countries than in English-speaking ones, and I certainly don’t expect to be treated as a native if I can’t even muster a few local phrases. And that’s as a visitor, not a “citizen” possessing the local passport.

#115 Damian Hellman on 07.12.16 at 5:58 am

DELETED

#116 Irresponsible! on 07.12.16 at 6:07 am

#20 “I love real estate”

you do, do you?

“I feel you are doing a significant moral wrong to those younger people who might follow your advice and be priced out of the maret forever. ”

Are you afraid the millenials who start to reflect that they’re indeed priced out forever, move out of the GVRD and pick up their lives elsewhere?

So that’s your strategy. Put the fear of missing out FOMO into the next generation because if they leave, well there’s nobody left to keep paying for your overpriced beaver barf boxes with a 25 yr expiration date you dare call a “good investment”.

There’s more to life than constantly thinking about such a basic commodity as shelter. There are jobs and there is a life outside of the GVRD and even BC.

Not attractive to stay there. Too expensive, too many high paid public service sector employees. Unless you’re part of that club, there’s no reason to stay. Even if you’re one of the lucky ones who scored a full time full benefit position with min. 60k for eternity.. there are options.

FOMO is the name of your game. FOMO is your propaganda tool. Well, FOMO FU.

The world does not revolve around BC real estate.

#117 myth of rental income on 07.12.16 at 6:25 am

#107 Lukas Luo

“First, it’s no secret that at least 90% of YVR homes have basement suites rented out. A typical Vancouver special has a two rental units which could easily bring in $1,600 / month. Many new homes also have a laneway home which could brining in additional $1,200 / month. At the current rates, $500 / month could service about $100K debt. Thus, a new house with a laneway home can service about $560K debt.”

COULD WOULD SHOULD

Cheap rentals are full. Those trying to find idiots now renting at inflated levels can suck it.

There is a limit as to how much someone is willing to afford on shelter or can afford. Renters can’t leverage up in order to afford higher cost of living.

OOPS! Didn’t consider that, did you?

Renters tend to be allot more portable and less likely to commit to a long term agreement because its not in their best interest. Do you know why?

DUH! Renters are always at the mercy of their landlords and have evolved and learned. If landlords figure they can earn higher rents or put their house on the market to capitalize on a gain, guess what? The mentality of a tenant is to go with the flow. Why bother to seek long term agreements that can be terminated anyway?

Good luck to all the wannabee landlords out there. I hope you’re all up to your eyeballs and put all your eggs in one basket to have that East Vancouver rental home with 3 basement suites and 2 garages converted into suites only to afford the bloody mortgage.

Better put more granite and double sinks into those rentals! Time to invest into upgrades!

#118 When Will They Raise Rates? on 07.12.16 at 6:28 am

#32 George Hull on 07.11.16 at 7:22 pm

I just was watching Bloomberg and RJ O’Brien said we will see 1% 10 year treasury bond yields.

This will push mortgage rates here and real estate will keep climbing on the backs of people’s savings.
—————–
Until it doesn’t. – see Japan

#119 When Will They Raise Rates? on 07.12.16 at 6:39 am

Great post btw Garth!

#120 Zen Headspace on 07.12.16 at 7:04 am

“Collective fear stimulates herd instinct, and tends to produce ferocity toward those who are not regarded as members of the herd.”
― Bertrand Russell, Unpopular Essays

Herd mentality is well researched and highly documented amongst philosophers such as Søren Kierkegaard and Friedrich Nietzsche , scientist Wilfred Trotter, psychologists Freud and Jung, and economists such as Thorstien Veblen to name only a few. It is easily seen in real estate investing through the cyclical frenzied buying (bubbles) or frantic selling (crashes) of homes. These sudden swings are rooted in irrationality and driven by emotion – greed in bubbles and fear in crashes. Suffering from collective irrationality, these home buyers are like sheep without a shepherd, lacking any sense of long-range vision and guiding principles to anchor their decisions. They are unsheltered, exposed and ready to become prey. They are ships without moorings.
(From: Zen Investor)

“Sheep all together, cars all together, people all together, crows all together, ants all together! Everywhere is full of herds! To breath comfortably, to feel free, to think better and to find the beauties of the unknown paths leave your herd! In whichever herd you are in, leave it!”
― Mehmet Murat ildan

#121 Herb on 07.12.16 at 7:46 am

#59 protea,

the reasons for Brexit listed in the link have less to do with the EU than global corporate capitalism. The EU paid for moves to develop the economy of poorer EU areas, a touch of “socialism” that losers in such transactions obviously resent.

Corporations move manufacturing (and corporate HQs) to lower-cost jurisdictions for corporate reasons. That is inherent in the drive to maximize corporate profits regardless of casualties. Brexit will not affect this. Corporations operate for “business” imperatives, not national, political or (gad) social ones.

The delusion Brexit supporters suffer is that they will be able to run a “tight little island” in global markets and operations. Unfortunately those of their leaders who suddenly faced and declined to take up that challenge acquired their wisdom only after the event.

#122 crowdedelevatorfartz on 07.12.16 at 8:10 am

@ Devil Advocate

Nothing to say?
Too busy trying to find a buyer for your 2012 leased Jag?
Its “different” in Kelowna?
All of the above?

#123 Andrewt on 07.12.16 at 8:16 am

#96 Lee on 07.11.16 at 11:34 pm
Driving home from Bay and Adelaide today at 6:00 p.m. Traffic bumper to bumper. Restaurants and sidewalks were jammed with people. But apparently property values about to crash in Toronto. Did you see the small house on Grace that listed for $1.4 and sold for $2.1? Nobody listens when I say $2 Million average sfh in Toronto by year’s end. Up, up, up.

—-

Thanks for describing afternoon rush hour in downtown Toronto for us. Very helpful.

If we are speaking anecdotally, the water cooler talk at work has shifted in tone. A lot more grumbling from folks about how expensive everything is, rather than how much their property is worth. Feels like people can sense a shift in the air but no one wants to jinx their house nest egg by mentioning that housing may have peaked.

#124 Lee on 07.12.16 at 8:46 am

Neil Irwin of the NYT agrees with me rates won’t be rising for a long time. Some properties in Toronto have gone up 75% in the last year in preferred hoods. Expect sfh average in TO to be $2 M by year’s end or shortly thereafter. Did you see the house on Grace that went for $2M? It’s a fairly typical sfh in Toronto, although nicely finished inside. A lot of the increases will be via rebuilds and renos, but there is a ton of that stuff coming onto the market this year and next. Take a walk through Willowdale and you’ll see. Many houses on each street getting gutted so average sales prices will skyrocket. This does not include semis, although even they are going through the roof.

#125 busman7 on 07.12.16 at 9:05 am

#81 Trogan House a misleading statement in light of the real facts: French
The Official Language Act of 1974 (French Loi sur la langue officielle), also known as Bill 22, was an act of the National Assembly of Quebec, commissioned by Premier Robert Bourassa, which made French the sole official language of Quebec, Canada.

#126 Moron Face on 07.12.16 at 9:08 am

So let it be known that Friday July 8, 2016 was the top of the bond market. Sell your government bonds.

You obviously do not comprehend why an investor should hold bonds. — Garth

#127 BOOM! on 07.12.16 at 9:33 am

#111 Ronaldo

I have never taken a serious look at PM (precious metals). Maybe I need to look at it? Play money, is what it is ALL about isn’t it?

I’ll look at the cycles, did that with oil, and was treated well, buying the majors at the height of despair (low oil) has put a smile on my puss. Same with healthcare investing a few years ago. They haven’t run out of Boomers yet.

Thanks for the history in PM.

Cheers!

#128 world traveller on 07.12.16 at 9:40 am

Things are heating up in Spain, and not just the weather, Brits that are resident in Spain are being denied service such a medical due to Brexit.
As expected the Spanish were going to make the Brits pay for Brexit. Spain should have some luck now trying to sell 800,000 unsold properties.
Spain didn’t follow the rules for Brexit, you can imagine now that they have carte blanche how many expats they will victimize.

#129 };-) aka Devil's Advocate on 07.12.16 at 9:45 am

How B.C.’s self-regulation failed

#130 I can see clearly now... on 07.12.16 at 9:56 am

“Mortgage rates could decline further and this market will still crumble. We have probably reached a debt wall. — Garth”

don’t tell that to the Central Bankers, you’ll get laughed out of town….

they (and debt) are the ‘glue’ holding it all together and they’ll NEVER stop doing what they’ve been doing….
you should request a nice chat with Mr. Bernake….for his perspective…I mean he ‘saved the world’ didn’t he?

#131 Andrew Woburn on 07.12.16 at 10:09 am

#93 SickofBC on 07.11.16 at 10:59 pm
Websites like zillow (USA) and viewpoint (nova Scotia)are some of the best resources for an informed consumer . I wish they had these websites for the rest of Canadians , especially in Toronto and Vancouver.
===========================

When we bought on the Island in 2012, we got massive amounts of information through our very helpful and patient realtor such as the number of times a property had been relisted and at what prices, and comparable sales in our target area. If you are not being offered that data, get another realtor. You can also get assessment values for virtually any property in BC at evaluebc.bcassessment.ca.

#132 Noel on 07.12.16 at 10:09 am

Mortgage rates could decline further and this market will still crumble. We have probably reached a debt wall. — Garth
_________________________

Not a chance without a rise in interest rates. Cheap money = asset price inflation.

One of the basic axioms of economics…

#133 Neil Armstrong on 07.12.16 at 10:10 am

When you start telling people how to speak it’s not Canada any more. — Garth

Damn right. When basic human rights like this are threatened, I want Mr. Frugal especially to understand that violence is a last option to protect those rights. My great-grandfather and grandfather didn’t fight tyranny in the old days in Europe and Africa for nothing. There is no such thing as ‘proper’ English or French anyway. Languages change over time. You bigots, go ‘f-educate’ yourselves.

#134 Time is #1 on 07.12.16 at 10:27 am

I live in a little slice of heaven in “Canada” called Ocean Park. 30 minutes from DT Van. If the market drops by a third then I’m still up as we are up 44% June 16 over Jun 15. Plus my property taxes would not skyrocket. My guess is it will rise as people from Van and China continue to buy here. Alternative, sell now and by twice the house at half the price in Kelowna(toured with a Realtor there last weekend)Not a bad option but it seems like a bit of a rougher place to raise kids. Real Estate is local and personal. Be careful about following sweeping messages and no matter where u live you should not have all your eggs in one basket.

#135 Harold Thatcher on 07.12.16 at 11:06 am

Every time the real estate market has crashed the stock market has rocketed higher, as it has begun to do now.

An excellent article on how bonds are dead for years to come.

http://business.financialpost.com/news/economy/if-the-message-the-bond-market-is-sending-is-right-we-should-all-be-terrified

Brexit has caused a huge flood of cash to the ‘safe haven’ of North America. The US markets are hitting all time highs, but great news, the TSX has another 10% to climb before we tickle the top end.

All our boring little dividend payers ( which pay higher yields than 99% of US stocks) are suddenly becoming the institutional darlings of the world.

If you have good boring stocks right now you’ve made 20% +++ this year already, get ready for another 30% because our PE’s are that much lower than the US, with a great earnings season of ++2% in the whisper numbers.

Buy stocks, go all in, back up the truck, fire away, this will RE ‘Investors’ indebted to RE with no free cash sick to their stomachs as RE prices peak, falter and dive, while stocks soar.

This my friends is called ‘The Stock Pickers Revenge’.

#136 dougalugaloo on 07.12.16 at 11:15 am

My advice on real estate in Vancouver bears repeating. Get out.

If you’ve made a windfall profit, take it and run.”

Garth…that is pretty big advice. Maybe you need blog piece of where exactly people should run to…..

#137 Damifino on 07.12.16 at 11:18 am

#108 Entrepreneur

“Vancouver is in a mess and if I were a leader at any level I would be deeply humiliated. This is NOT leadership.”
——————————-

Clearly, leaders are made of different stuff. People who can’t ignore withering humiliation on a daily basis are unfit to govern.

#138 unagi baggy on 07.12.16 at 11:18 am

Meanwhile in the world’s 3rd biggest economy….

“3 arrested for selling curry store chain’s discarded beef cutlets
→Crime Jul. 12, 2016 – 06:00PM JST ( 16 )

NAGOYA —

Police arrested three men on Tuesday for allegedly selling beef cutlets that a major Japanese curry restaurant chain intended to dispose of.

Kazuyuki Onishi, 75, head of a now effectively-defunct industrial waste disposal company….., are suspected of selling the waste from Curry House CoCo Ichibanya as food….”

How long before YVRers start eating expired sushi scraps

#139 Paul on 07.12.16 at 11:20 am

Is there a run on Italy’s banks???

#140 TurnerNation on 07.12.16 at 11:26 am

In my sht 1k FX account having a good time trading USD/CAD and GBP/USD. Use one as a leading indicator to other.

#141 TurnerNation on 07.12.16 at 11:29 am

Bernie endorsement of Hillary is out.
Told ya the Bush-Clinton ruling cabal is going nowhere. Since 1980.

USA where “anyone” may become president!

#142 RJ on 07.12.16 at 11:31 am

The B.C. government says it will clear the way for Vancouver to impose a vacancy tax on empty homes, which will make it the first major city in Canada to implement such a penalty amid skyrocketing rents and growing concerns about foreign investment and speculation.

#143 Ronaldo on 07.12.16 at 11:34 am

#125 Boom

Thanks for the pleasant reply. Now it’s time to go and climb some mountains. Take care and good investing.

#144 Ace Goodheart on 07.12.16 at 11:59 am

RE: #39 For those about to flop:

I am o.k with the 195,it’s the million in the front of it that is giving me problems…

M42BC

http://www.rew.ca/properties/R2089613/5009-somerville-street-vancouver

This is what I was talking about earlier. The interiors of these houses are absolutely brutal. Most of them are “land value” only.

So the problem is, finding enough people who can finance the purchase of the chosen rotten, mouldy old dump, and also finance tearing it down and replacing it with a million dollar + residence. Because no one who can come up with the purchase price of this house and others like it, would ever live in it.

Can you imagine waking up to that kitchen every morning, then getting in your Porsche 911 and heading to your 600K per year job? You’d have to be nuts.

#145 Balmuto on 07.12.16 at 12:15 pm

More signs we live in an upside-down investing world:

“Bill Gross, who built the world’s biggest bond fund at Pacific Investment Management Co. and is now at Denver-based Janus Capital Group Inc., has a similar perspective. “The sovereign bonds are not up my alley,” Gross said on Bloomberg Television last week. “It’s too risky.””

Government bonds. Too risky. From the Bond King himself. And others:

http://www.bloomberg.com/news/articles/2016-07-12/eaton-vance-s-gaffney-joins-morgan-stanley-in-warning-on-bonds

#146 jess on 07.12.16 at 12:37 pm

chinese marketing

Chinese Dreamland
The Passionate Eye

July 10, 2016

45:10

This doc examines the rise and fall of the Chinese property market through the experiences of Yana, a young entrepreneur, and her colourful (if unconventional) rent-a-foreigner business.

#147 Aggregator on 07.12.16 at 12:39 pm

Canadian banks just had the largest increase in insured mortgages on record. Chart (as of April)

Now they can securitize those mortgages — sell them to investors to clear their books — then create even more mortgages!

This is not going to end until the government stops supporting lenders with insurance and guarantees. Genworth still provides bulk mortgage insurance for >$1M properties, of which 90% is backed by the government (taxpayers).

#148 Renter's Revenge! on 07.12.16 at 12:53 pm

#132 Time is #1 on 07.12.16 at 10:27 am
I live in a little slice of heaven in “Canada” called Ocean Park. 30 minutes from DT Van. If the market drops by a third then I’m still up as we are up 44% June 16 over Jun 15.

wrong

1.44*0.67=0.9648

math

#149 Brazil ex-pat on 07.12.16 at 12:54 pm

#136 unagi baggy on 07.12.16 at 11:18 am
Meanwhile in the world’s 3rd biggest economy….

“3 arrested for selling curry store chain’s discarded beef cutlets
→Crime Jul. 12, 2016 – 06:00PM JST ( 16 )

NAGOYA —

Police arrested three men on Tuesday for allegedly selling beef cutlets that a major Japanese curry restaurant chain intended to dispose of.

Kazuyuki Onishi, 75, head of a now effectively-defunct industrial waste disposal company….., are suspected of selling the waste from Curry House CoCo Ichibanya as food….”

How long before YVRers start eating expired sushi scraps

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

Been to Superstore lately? They have been selling “2nds” from the USA forever. The Americans get the nicest produce, Canada gets the crap…..

Food in Brazil is awesome. Produce is big, leafy and rich !!

#150 Ponzius Pilatuse on 07.12.16 at 12:55 pm

#134 dougalugaloo on 07.12.16 at 11:15 am
My advice on real estate in Vancouver bears repeating. Get out.

If you’ve made a windfall profit, take it and run.”

Garth…that is pretty big advice. Maybe you need blog piece of where exactly people should run to…..
———————
Cute. You must be new here.

#151 Shane on 07.12.16 at 12:57 pm

We were wrong again. This is getting frustrating. Now the Fed people say no more increases in rates in the USA for long long time. here is the link.

http://www.theglobeandmail.com/report-on-business/international-business/us-business/feds-bullard-sticks-with-single-interest-rate-hike-view/article30881011/

#152 Brazil ex-pat on 07.12.16 at 1:19 pm

#142 Shane on 07.12.16 at 12:57 pm
We were wrong again. This is getting frustrating. Now the Fed people say no more increases in rates in the USA for long long time. here is the link.

http://www.theglobeandmail.com/report-on-business/international-business/us-business/feds-bullard-sticks-with-single-interest-rate-hike-view/article30881011/

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

Who is this “we”? Many of us have been saying NO RATE HIKES for a long time.

#153 Elizabeth on 07.12.16 at 1:25 pm

Just heard Garth on CBC’s Ontario Today responding to callers about home ownership. Kept thinking about the movie, The Big Short. Only a few outliers saw the likely outcome of the toxic financial instruments that were flying around. No one would listen, until it was too late. Like spitting in the wind. Is there a word that means both frustrating and sad?

#154 Mr. Frugal on 07.12.16 at 1:42 pm

#131 Neil Armstrong on 07.12.16 at 10:10 am
When you start telling people how to speak it’s not Canada any more. — Garth

Damn right. When basic human rights like this are threatened, I want Mr. Frugal especially to understand that violence is a last option to protect those rights. My great-grandfather and grandfather didn’t fight tyranny in the old days in Europe and Africa for nothing. There is no such thing as ‘proper’ English or French anyway. Languages change over time. You bigots, go ‘f-educate’ yourselves.

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

I don’t know why you would bring my name into it. You are the one that came on here blabbing about how you want to hit people with your fists. Me, I’m just here to read Smoking Man’s posts and spread a little love along the way.

#155 Mr. Frugal on 07.12.16 at 1:52 pm

#124 Moron Face on 07.12.16 at 9:08 am
So let it be known that Friday July 8, 2016 was the top of the bond market. Sell your government bonds.

You obviously do not comprehend why an investor should hold bonds. — Garth

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

Bonds are dry powder to be used when stocks go on sale. For example, when Garth said that Brexit would result in the end of the world as we know it. That was an excellent time to cash in some bonds and buy the dip. Now that we’ve had a good run and the skies are blue once again, it might be a good time to sell a few equity ETFs and buy some bonds for the next K-Mart blue light special on stocks.

My bet is that Donald Trump is elected in November and half of Wall Street has a seizure. That will be the time when you want to have a load of bonds and cash on hand to scoop up the bargains. But, that’s just my humble opinion.

Trump is unelectable and I said Brexit would penalize the British, not investors. I am correct, of course. — Garth

#156 Ace Goodheart on 07.12.16 at 1:59 pm

More signs we live in an upside-down investing world:

“Bill Gross, who built the world’s biggest bond fund at Pacific Investment Management Co. and is now at Denver-based Janus Capital Group Inc., has a similar perspective. “The sovereign bonds are not up my alley,” Gross said on Bloomberg Television last week. “It’s too risky.””
RE: #142 Balmuto:

Government bonds. Too risky. From the Bond King himself. And others:

http://www.bloomberg.com/news/articles/2016-07-12/eaton-vance-s-gaffney-joins-morgan-stanley-in-warning-on-bonds

He’s seeing it. Govt’s are going to start devaluing their currencies. Govt bonds are like cash. No underlying asset pool (just deferred taxes). They are directly linked to cash. They are unlike corporate bonds and equities, which are linked to the value of enterprises (and therefore not directly subject to currency devaluation).

Now is the time to carefully question what it is that gives one’s investments value. Governments produce nothing and they are like giant vacuum cleaners for money. They also print their own currencies, whose value is not linked to anything of substance.

I would say, people have to have a close look at what their monthly income is and consider whether or not it would be possible to purchase basic supplies, if the prices of food, say, doubled in 5 years. Or tripled.

#157 Tax on Empty Homes on 07.12.16 at 2:21 pm

If this couple leave the condo empty, it soon will be tax on empty homes. Double whammy.

http://www.theglobeandmail.com/real-estate/vancouver/bc-announces-changes-to-real-estate-market/article30852588/

#158 saskatoon on 07.12.16 at 2:39 pm

still holdin’ strong!

#159 Bottoms_Up on 07.12.16 at 2:41 pm

Garth you rocked the CBC Q+A session, nicely done! Some good questions were asked, and you provided direct, informative answers.

But the CBCers tweeted me to death afterwards. — Garth

#160 @tax on empty homes on 07.12.16 at 2:50 pm

I can rent my home for a month to relatives for $1 every six months.

Now what you going to legally to me? These laws are to shut up the renters, while doing nothing ;)

#161 @tax on empty homes on 07.12.16 at 2:51 pm

With a legal contract of course. $1/6months. And then it will take years to get the ‘data’. Hahaha.

#162 Moron Face on 07.12.16 at 2:53 pm

I know exactly why people think they should own bonds. However, long term bonds currently carry greater risk today than at any point in history since the 1940s. Far too many bonds have been issued and bought. As bond yields have declined, prices have increased. Inflation is here and real – the signs are everywhere. The market will reprice long term bonds with a vengence. Yields will rise but prices will fall more. Investors will be left holding an asset that is declining in value when inflation is considered. Equities are the safest alternative at this point. The world of investment risk is upside down.

If one requires a non equity portion of their portfolio I would suggest very short term bonds (i.e. 1-3 duration bonds).

#163 Vancouver Renter on 07.12.16 at 3:08 pm

GVA renter here. Rental rates are skyrocketing with housing prices too. Our 2 bedroom shack was assessed at 900k 3 yrs ago when we moved in. Now the owner tells us the latest assesment is 1.7 mil.

So in 3 years this houses like this rent from $1500/m upward to $2500-3000/mo. Owners are jacking up new rentals like the ever growing market.

We know this place will be cashed in soon and we’ll be looking for another rental we’ll be paying nearly double for. I almost rather own the space if you’re sinking in that much.

Paying $1600-1800 to live in a faux rich person’s dungeon basement just isnt for me.

#164 jess on 07.12.16 at 3:16 pm

February 21, 2016 8:00 a.m. Updated 2/26/2016
Alleged scams hit foreign house buyers: offshore shells
http://www.crainsdetroit.com/article/20160221/NEWS/302219981/alleged-scams-hit-foreign-house-buyers-flipping-distressed-detroit.
Telemarketing operators made it appear that the homes were flipped to hedge funds and foreign buyers for a profit, prosecutors allege.

====================
…”the nationality of the buyer but the source of the capital that is important. Money from China, the real estate agents said, can be transferred to a relative with an address in Vancouver, who then acts as the buyer… on larger transactions such as multi-family buildings, a Chinese national can open a Vancouver office…“Name the company Maple Leaf Enterprise and hire Joan Smith to head it. Suddenly you’re a Canadian investor. Actually, that would be a good way to go if you’re a long-term investor.”Burley agreed that is common for Chinese nationals to use local residents or companies as proxies when purchasing foreign real estate. But how many? “I have no idea,” Burley said, “I don’t think anyone does.”
===============
“structures” to avoid paying “almost any taxes”
By Simon Bouvier
The European Commission has announced it will tighten Europe’s anti-money laundering rules and increase transparency requirements for companies and trusts, putting the financing of terrorism and tax evasion in its crosshairs.
https://www.icij.org/blog/2016/07/new-eu-rules-tackle-money-laundering-and-tax-abuse
======================

#165 Freedom First on 07.12.16 at 3:29 pm

#111 Ronaldo

Yes. It is not rocket science. You do what I do. Keep it simple, think, understand that the Herd is controlled by the emotions of fear and greed, and always always always do what is best for yourself. Forever, my Freedom First. As it should be.

#166 TurnerNation on 07.12.16 at 3:30 pm

Bonds have shat the bed. Go long everything else till US election. And no rate hikes in an election year imo.

#167 rainclouds on 07.12.16 at 3:39 pm

#132 I live in a little slice of heaven in “Canada” called Ocean Park. 30 minutes from DT Van.

30 min, uhhhh ok, maybe at 2am …………….PS White Rock will get hammered when Van does.

heaven………………sure.

#168 TnT on 07.12.16 at 3:48 pm

Has there ever been a time that (maybe now?) that one would re-configure a traditional 60/40 portfolio to lesson the Bond exposure?

#169 Nemesis on 07.12.16 at 3:49 pm

#InOtherNewsBear,Or… #ForgetRealEstate… #TrulyBusyBeesPrefer… #Honey-Laundering…

[ColonialTimes] – Bee-ware of foreign honey influx, consumers warned

…”China — the world’s top honey-producing nation — shipped just $910 worth of honey to Canada during that period, while shipments from its immediate neighbours totalled more than $1.1 million.

But Scarlett suspects that most of the honey entering Canada is produced by China, shipped by third parties in an elaborate honey-laundering industry. Worse, it may not be honey at all but a blend of honey and corn syrup.

“We have a serious food-fraud problem,” he said.

Earlier this year, U.S. federal agents in Chicago seized 55 tonnes of honey from China that was accompanied by fake documentation from Vietnam. A second 55-tonne shipment of Chinese honey from Vietnam was seized by Homeland Security agents last week. Lab tests revealed “the honey had a greater than 99 per cent probability match with honey from China,” according to U.S. Immigration and Customs Enforcement…

The U.S. Department of Commerce levies a tariff of more than $2 per kilo on Chinese honey and federal authorities have uncovered surprisingly elaborate global schemes to bring honey from China into the country. Those investigations also revealed that exporters were stretching their product with syrup.

“Honey is coming to Canada from countries that have no tradition of honey production, so we know its being trans-shipped,” said Scarlett. “That honey — and I use the term loosely — is 50 cents a pound cheaper so it drives down the price for everyone.”…

http://www.timescolonist.com/news/b-c/bee-ware-of-foreign-honey-influx-consumers-warned-1.2298626

#170 jess on 07.12.16 at 3:49 pm

Oligarchs of the Treasure Islands

For the best part of three decades, George Rozvany was inside the multinational tax avoidance industry. Now, he lifts the lid on the perpetrators, the world’s most powerful oligopoly.
July 11, 2016

“The global community must also recognise the links between aggressive taxation behaviour, money laundering, corruption, organised crime and terrorism, of which the Brussels bombings and 9/11 are chilling reminders. This, unquestionably, is the financial sewer of humanity where the purpose for such money, no matter how malevolent, is simply hidden until used”, Rozvany says.

http://www.michaelwest.com.au/oligarchs-of-the-treasure-islands/?utm_content=buffer0b972&utm_medium=social&utm_source=twitter.com&utm_campaign=buffer

#171 still not getting it on 07.12.16 at 3:54 pm

Garth still seems to think people live in their homes the same way they buy etfs – timing the market and re-balancing based on market conditions. This is odd, given it seems to contradict his broader point about housing as a shelter, not an investment.

why would anyone sell their home because of market conditions? just as people buys their home when their personal situation permits it, so to, should they sell their home.

To sell your home, pay all the transaction fees, pay boat loads for rent, only to re-enter at some indeterminate time? Baffling, irrational, stressful, and short-sighted.

#172 still not getting it on 07.12.16 at 4:01 pm

Garth says:

“If true, what will sustain a market where the average family makes $70,000 and the average SFD is priced at $1.7 million?”

You are comparing a near-minimum wage earning couple to the price of SFD home in Vancouver?

Try condos next time.

#173 Winton Cheung on 07.12.16 at 4:05 pm

I just rented a glorious house on the North Shore of Vancouver at a sub-2.5% cap rate. If that doesn’t scream “bubble, ” I don’t know what will…

#174 Smoking Man on 07.12.16 at 4:30 pm

Leaning a bit to a BOC cut tomorrow.
If no cut expect very bearish comments.

#175 Smoking Man on 07.12.16 at 4:33 pm

#139 TurnerNation on 07.12.16 at 11:29 am
Bernie endorsement of Hillary is out.
Told ya the Bush-Clinton ruling cabal is going nowhere. Since 1980.

USA where “anyone” may become president!
……………………

Where do you think his massive following is going to vote.

My Call

1/4 won’t bother voting. 1/4 will go to trump, 1/4 to the greens, 1/4 to Crooked Hillary.

#176 Smoking Man on 07.12.16 at 4:51 pm

CRA is cracking down on small town Canada. Big mistake.

Any Gamblers out there playing at OLG. Your under the microscope.

Seneca is the only place to play.

http://business.financialpost.com/legal-post/cra-targeting-unregistered-small-town-contractors-in-tax-evasion-crackdown

#177 Brazil ex-pat on 07.12.16 at 5:00 pm

My bet is that Donald Trump is elected in November and half of Wall Street has a seizure. That will be the time when you want to have a load of bonds and cash on hand to scoop up the bargains. But, that’s just my humble opinion.

Trump is unelectable and I said Brexit would penalize the British, not investors. I am correct, of course. — Garth

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

Trump is un-electable but Clinton Cash who fraudulently has added hundreds of millions to her foundation with money coming from seedy dictators is a much better choice……

And people wonder why there is so much descent with Govt World Wide……

https://vimeo.com/168098445

#178 Whatcolouristheskythere on 07.12.16 at 5:12 pm

Frequently seen in comments posted here by rich / boomers / conservatives (witness Garth’s election poll last year):

In psychology, the false-consensus effect or false-consensus bias is an attributional type of cognitive bias whereby people tend to overestimate the extent to which their opinions, beliefs, preferences, values, and habits are normal and typical of those of others (i.e., that others also think the same way that they do).[1] This cognitive bias tends to lead to the perception of a consensus that does not exist, a “false consensus”.

Hilariously evident in post #175 – Smoking Man, assuming even he believes what he says

#179 Smoking Man on 07.12.16 at 5:40 pm

#178 Whatcolouristheskythere on 07.12.16 at 5:12 pm
Frequently seen in comments posted here by rich / boomers / conservatives (witness Garth’s election poll last year):

In psychology, the false-consensus effect or false-consensus bias is an attributional type of cognitive bias whereby people tend to overestimate the extent to which their opinions, beliefs, preferences, values, and habits are normal and typical of those of others (i.e., that others also think the same way that they do).[1] This cognitive bias tends to lead to the perception of a consensus that does not exist, a “false consensus”.

Hilariously evident in post #175 – Smoking Man, assuming even he believes what he says
……………………………..

That,s a hell of a lot of analysis for a gifted fiction writer.
If were you I would be leaning more to the side of a false ego.

But hey what do I know.

#180 ROTFL on 07.12.16 at 5:54 pm

Unelectable? Statistically tied in Florida, trailing by less than 3% in Ohio and Pennsylvania. And with the Libertarian and the Green polling around 5% and 3% respectively, who the heck knows?

P.S. Anybody else find that their on point, non-vulgar comments sometimes disappear down the memory hole without a trace?

#181 Jim on 07.12.16 at 6:05 pm

Garth, if you want to help the youngins, show them them the rationality of buying a home in an area they can afford. C’mon they are house horny! Compare buying in Hamilton or Oshawa to DT TO over say 7 years and show how insane they are being. Sure might have to find new jobs and they take a pay hit in ‘the boonies’ but end up better off in the long if they insist to buy. Show them how DT TO has become a luxury.

PS: Enjoyed you on CBC radio today.

#182 Damifino on 07.12.16 at 6:42 pm

#178 Whatcolouristheskythere

“…the false-consensus effect or false-consensus bias is […where…] people tend to overestimate the extent to which their opinions, beliefs, preferences, values, and habits are normal and typical of those of others”
—————————

What type of bias is it when you don’t believe your own opinion is worth a plug nickel, and that nobody could possibly care less about your values and beliefs?

That’s the outlook one must develop to function in the heart of Vancouver. To act otherwise is a recipe for heartache and sorrow.

#183 Bottoms_Up on 07.12.16 at 6:51 pm

#160 @tax on empty homes on 07.12.16 at 2:50 pm
——————————
Well, the problem for those chosing to rent their house for $2/year to relatives raises a lot of questions.

As rental income should be declared to the CRA as a source of income, $2 will no doubt get them to scruitinize your tax file. And if you don’t declare at all, they can then compare tax filings with ownership address and see the non-declaration.

As the CRA was recently infused with $500 million to fight local tax evasion, it’s probably in everyone’s best interest to tighten everything up.

#184 crowdedelevatorfartz on 07.12.16 at 7:09 pm

@#129 Devils Advocate
Interesting article.
I wasnt aware that the govt regulated the amount of the fines that the Real estate association could levy against one of its memebrs found lacking.
That being said ….perhaps the RE Assocoaition should have been a tad more proactive with its concerns and maybe let the media know it was an issue?
Now the BC Real Estate association has learned what many of Christy Cleavage’s many “friends” and political associates now know.
She’d toss her frail grannie under a bus to save her own skin.

#185 crowdedelevatorfartz on 07.12.16 at 7:31 pm

@#177 Brazil ExPat
“And people wonder why there is so much descent with Govt World Wide……”
********************************************
“Dissent” not withstanding.
Perhaps this observation might shed some light….

The Politics of Anger
Anger at immigration, globalisation, social liberalism, etc. If voters cant find a voice within the mainstream they will vote from outside the mainstream.
When the Soviet system collapsed in the early 90’s there was nothing to challenge “democracy”.
Globalisation has made the average person pay the price in layoffs, financial shenanigans and budget cuts.
All while politicians the world over busy themselves with “important” issues such as immigration, culture identity, race, the environment, human rights, and sexual identification.
All noble causes and totally irrelevent when someone can’t afford to eat.
Liberalism has ignored its grass roots to its own peril. Trump has locked into that anger when he promises to “take back control” .
The “mob” is as mad as hell and isnt going to take it anymore.
Human Resources personel seem to run companies with their politically correct “bully” tactics …that is, if they arent already on long term disability for “stress”.

Perhaps this book may be of help……

http://www.google.ca/url?url=http://www.goodreads.com/book/show/386527.Shut_Up_and_Listen&rct=j&frm=1&q=&esrc=s&sa=U&ved=0ahUKEwj5jYLCiu_NAhVU8mMKHSQ-D4kQFggdMAI&usg=AFQjCNEfS1ErXn9jkZT9N6LQuCxCK5HtBQ

#186 Time is #1 on 07.12.16 at 7:36 pm

#132 Time is #1 on 07.12.16 at 10:27 am
I live in a little slice of heaven in “Canada” called Ocean Park. 30 minutes from DT Van. If the market drops by a third then I’m still up as we are up 44% June 16 over Jun 15.

wrong

1.44*0.67=0.9648

math

I bought 10 years ago:) do that math.

Reply to 167-Rain clouds
Rain clouds-the name says it all:)

#187 CJBob on 07.12.16 at 7:41 pm

#180 ROTFL on 07.12.16 at 5:54 pm
P.S. Anybody else find that their on point, non-vulgar comments sometimes disappear down the memory hole without a trace?
___________________________
Yep, I assumed because I had something positive to say about robo advisors. Ooops, did it again…

#188 The Fonz on 07.12.16 at 7:43 pm

Dear Garth, sit on it. Ayeeeee

#189 The Fonz on 07.12.16 at 7:46 pm

Garth. Great post. Please do an article on how preferred shares are “safe stuff”. You jive turkey. Aaaayyyyyeeeee.

#190 crowdedelevatorfartz on 07.12.16 at 7:53 pm

@#186 Time Is #1
You still havent replied to your ridiculous statement that you live “30 minutes from Downtown Vancouver” Please explain how you manage to achieve that feat without warping spacetime.
Do you own one of these?

https://www.google.ca/url?url=https://www.engadget.com/2016/01/06/184-delivery-drone-for-people/&rct=j&frm=1&q=&esrc=s&sa=U&ved=0ahUKEwieqaOyj-_NAhVI52MKHR1CCjYQFggjMAU&usg=AFQjCNFbIzvMjw2p2MqY8zlqIzp03KETiQ

#191 Time is #1 on 07.12.16 at 8:46 pm

Reply to 190 Crowded…

Good grief, Focus on the point that is made not the color of the ink used to make it. 30 min a bit aggressive agreed. The new bridge will help.

#192 Housing data is not racist on 07.13.16 at 12:15 am

It looks like the data shows that the value of almost all new construction in YVR is purchased by foreigners.

Meaning that foreigners purchase almost the same value in property as the yearly building permits in YVR

#193 Try 50 on 07.13.16 at 4:32 am

Time is #1

I grew up in Ocean Park. 30 min to downtown? That’s cute.

#194 crowdedelevatorfartz on 07.13.16 at 8:23 am

@#191 Time is running out
“Focus on the point that is made….”
********************************************
YOU”RE the one that tossed that complete BS out there Mr TIME IS #1″.

Good luck paying the $10 per DAY bridge toll….and you’ll still sit in traffic at either the Knight St Bridge or Oak St……good luck with that 60+ minute commute

#195 Chaddywack on 07.13.16 at 12:48 pm

Vancouver is HOT HOT HOT!!! Royal LePage even says so!

http://globalnews.ca/news/2821059/latest-vancouver-real-estate-numbers-show-no-sign-of-even-a-mild-correction-study/

#196 swampcritter on 07.15.16 at 12:44 am

The thing is, why would the Vancouver real estate market ever need to rely on the earning power of local residents, when there are a kazillion investment dollars floating around in the earth’s atmosphere, looking for a place to land?