Delusions

LIFE

A good thing I stopped caring what people think. That happened years ago when (during a period of temporary insanity) I held public office. The doors of the House of Commons elevator I was riding in opened onto the main corridor where the media cabal was hanging out. Hey boys, I said. The doors closed and we continued on our way upstairs.

The next day there was a large photo on the wire with the caption, “MP Garth Turner never goes anywhere without two blonde, female aides.” Not having any Amazons at that time, I looked hard at the picture and saw I was indeed flanked by two women – both of them House of Commons internal couriers.

Not long after, a story appeared in the Globe about how “millionaire Parliamentarian Garth Turner” had purchased a unit in an exclusive downtown Ottawa condo where rock stars (Alanis Morsette), dilettantes (Belinda Stronach) and hockey heroes (some big, scary dudes) lived. I was insulated by wealth, obviously, from the concerns of working stiffs while sucking off a government wage.

But, I rented. It was cheap. Unlike other MPs living it up in hotels and putting it on their expenses, I never claimed a dime. So I concluded (a) people will believe whatever they wish to be true about others and (b) the hell with them.

Lately you may have noticed on this blog how some folks like to dispute whatever is said. Why they don’t just leave is an interesting question. But a fav topic is the extent to which Canadian housing affordability has been destroyed by foreign buyers. My position is simple: of course offshorers influence some prices in Van or Toronto, but not enough to move the entire market. Instead, it’s locals who do that, hopped up on cheap money, fueled by FOMO and whipped into a speculative frenzy by Global, the Globe and an army of hungry realtors.

When data supports this long-stated belief, it’s trashed. When some junior UBC prof writes a paper quoting ill-researched media reports decrying Chinese, it’s a party. Once again, people believe what they want, and nothing will change that except a market decline.

Now it looks like they may get one. As the tide goes out, we’ll see who’s left holding the bag. I doubt it will be thousands of guys from Guangzhou. As I wrote here and in the HuffPost the other day (more flaming), rising prices on thinning sales volumes is not a good sign. As you also know, sales of homes in June tumbled from May (not an uncommon event) but have fallen seriously from year-ago levels – up to 40% in some hoods. Third, the sales-to-listing ratio now clearly peaked a year ago and has been declining since. One realtor last week declared the tony Westside to be “a buyer’s market.”

Now we have new analysis from indy housing analyst Ross Kay suggesting the tide’s already receding, with the flow of capital into the Vancouver market massively diminished. Says he: “When we warned of the perfect storm, this is what we were talking about.  The $4 billion in capital that entered Vancouver between February and March to support house price gains had dropped to just under 1/2 billion in June.  That was the most volatile reduction recorded in the history of Canadian real estate.”

What that means in practical terms is this: insane increases in selling prices are coming to an end. Kay says the market is now entering “its first phase of correction” which will continue unless the Bank of Canada loses its mind and chops the trendsetting rate once again. Price gains are forecast to drop by more than half, and “the average selling price in the second half of 2016 is forecast to be 11.35% lower than in the first half of the year.” More significantly, the analyst says, “a 20% correction could very well be recorded by June 2017.”

As you know, that would shave about $350,000 off the value of the average detached in YVR (where 91% of all houses are assessed at over a million). Finally, this: “June of 2016 recorded the highest number of closings reported across Canada and the mortgage debt assumed to make those deals happen is about to be reported by the Banks and StatsCan.  It appears Canada’s housing bubble may very well be cracking the moment household debt tied to mortgages sets a new record.”

Kay, by the way, disagrees with me about foreign cash and its impact on the market. He argues it is now the withdrawal of that capital which will cause an unstable, wobbly, entirely speculative pyramid to topple – because it’s not supported by economic fundamentals. In other words, locals (who still make up 95% of all trades) have been over-reaching, over-borrowing and buying beyond their practical means to grab a piece of the pie they perceive is slipping away.

This will probably end in the tears of those who borrowed excessively to buy too much, and the regret of many more who watched the biggest windfall of a lifetime pass them by. As I said at the outset, people will believe what they want to believe and these days the V in YVR stands for “victim.” The howls as this all deflates will be deafening.

CRACK

Above is a crack house. “I’m totally pro-RE,” says blog dog Alex, “but even this is getting a little ridiculous. Lol.

“This is a 3 bedroom rancher that was a grow op and meth lab and flop house for all sorts of delinquents in the worst part of Maple Ridge, a suburb of Vancouver that takes an hour to drive to (two hours in rush hour). This house was declared derelict, boarded up and had all utilities physically removed due to the above mentioned enterprises that were run from it. It is located across an empty lot that was one of the worst “tent cities” for the homeless in the city.

The lot is less than a quarter acre, and it is by all accounts a tear down. I should know, I’ve had the chance to look at this house extensively in person, inside and out. It was bought at a foreclosure auction at the end of 2015 for $300K. It is now for sale for $1.3 million. Wow. Now THAT’s crazy ….and it’s now been removed from the MLS. Could be sold?

I rest my case. Get out.

191 comments ↓

#1 Randy on 07.18.16 at 6:26 pm

Delusions are critical to survival

#2 pathcontrolmonk on 07.18.16 at 6:27 pm

Oh the irony, ICYMI: Chinese Media Is Now Warning Canada’s Housing Crash Will Be Worse Than The US

https://betterdwelling.com/city/vancouver/chinese-media-now-warning-canadas-housing-crash-will-worse-us/

#3 Serenity Now on 07.18.16 at 6:36 pm

Calgary is taking quite the beating. New duplexes are going at prices 50k less than what they were 6 months ago. Overall stats don’t show average price coming down from last year, but on a listing by listing basis you can definitely see the cracks starting to form.

Renovation money that has been dumped into houses in the past few years possibly a reason for overall average pricing not falling hard in the detached sector?

Anyone seeing the same thing?

#4 Afraid To Sell on 07.18.16 at 6:39 pm

Folks,
I’ve posted before…late stage Gen Xer, good job, bought in North Vancouver in 2000 for $395 K, really haven’t done much to upgrade the house. Its old and kinda tired recently had it appraised at $1,950 K. Kids walk to great schools, we walk to a nice shopping area, tons of dog trails…But I know selling for $1,950 K is like winning the lottery! Just can’t get it done…

#5 MoneyDriven on 07.18.16 at 6:41 pm

Garth would you be able to provide link to any of Ross Kay sources regarding “capital inflow drop” and /or “a 20% correction could very well be recorded by June 2017.”and / or “the average selling price in the second half of 2016 is forecast to be 11.35% lower than in the first half of the year.”

Is it just his prediction or is it backed by other sources…

On a side note, capital inflow is by far greater around Chinese new year than June, not really apple to apple comparison.

Thanks and please fight the good fight.

#6 John on 07.18.16 at 6:44 pm

So as the un-wind happens when do we know we have hit bottom or is the “recovery” just a fools rally? We might be a little time away from that but what are the signs to look for?

#7 valleyrenter on 07.18.16 at 6:46 pm

Came across something interesting today in my daily web travels. Happened to come across a blip in the L.A. Times mentioning that sales of ultra high end properties are drying up. Their take on it was that global wealth was worried about the state of affairs on the planet and as such not snapping up R/E. Seems to be the polar opposite view here in delusional 604.

#8 Help in Calgary on 07.18.16 at 6:46 pm

Garth, long time reader and appreciate your public service blog.

But at what point are you going to shout from the roof tops it’s time to buy. For example the avg house in Calgary is $500K – do you see this correcting to $300k in 3-5 years….longer?

Or is this wishful thinking. thanks

#9 Mark R on 07.18.16 at 6:47 pm

How do you say “head for the exits” in Mandarin?

#10 CJ on 07.18.16 at 6:49 pm

If only there were a name for that….

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

#11 Smartalox on 07.18.16 at 6:50 pm

When data supports this long-stated belief, it’s trashed. When some junior UBC prof writes a paper quoting ill-researched media reports decrying Chinese, it’s a party. Once again, people believe what they want, and nothing will change that except a market decline.

I could have sworn that poorly-researched, thickly-biased and oft quoted twaddle was written by a junior associate from SFU. But maybe there was more than one?

#12 crowdedelevatorfartz on 07.18.16 at 6:50 pm

Pokeman and Vancouver real estate……almost in the same delusional state of denial.

#13 Manderson on 07.18.16 at 6:51 pm

First?!

#14 young & foolish on 07.18.16 at 6:51 pm

“This is what is “goosing” house prices. Worthless money, basically being given away.”

Many people took notice and commented on the article by Don Pitts yesterday. Could this really be happening? Will money become “worthless” in the future?

#15 Andrew Woburn on 07.18.16 at 6:52 pm

“At this year’s giant solar show – Solar 2016 – a future with abundant, clean and cheap energy was discussed and on display. Success will be based on the continuation of five trends:

– The Germans and Chinese have been dramatically transitioning to renewable energy by government edict, which has massively driven down costs for everyone through innovation and mass production;

– The Americans, … are increasingly adopting and developing viable solar “distributed power” units — a do-it-yourself and market-based approach designed to dramatically reduce or free residences and industries from any dependency on grids or utilities;
“Distributed power” is being adopted by developing countries to leapfrog the traditional giant power utility and extensive grid model. …two-thirds of renewable development is underway in developing nations, led by China;

– A materials science breakthrough involving solar cells made from a material called perovskite will be introduced next year and will drive down solar cell costs and exponentially increase efficiency;

– Battery storage technology is advancing so dramatically that within three years a “tipping point” cost-wise will allow anyone with renewable power generation such as a rooftop solar system to go off grid. … “Batteries are now US$650 per kilowatt hour and will be US$425 soon. In less than three years, they will hit US$200 and then there will be mass adoption.” ”

http://business.financialpost.com/diane-francis/bright-future-on-display-for-renewable-energy-at-giant-solar-show

There is little question that the cost of solar storage batteries have fallen and will be driven continuously down even if the above claims are too optimistic. The cost/efficiency of rooftop solar will increase leading to wide-spread adoption which could eventually threaten the distribution business of electrical utilities.

Grid costs are largely fixed. As more customers generate their own power, the net cost of providing grid power per remaining customer will increase. This will encourage more people to leave the grid and accelerate what some have called a “death spiral” for utilities.

We are a long way from this point yet and it would be a mistake to underestimate the self-preserving political power of regional utilities. In the US a couple of states have already begun to put the brakes on roof-top solar to the point Tesla (SolarCity) among others has abandoned the business in those jurisdictions. Still it is an issue that long-term utility investors should note and monitor. It also makes you wonder if Ms. Wynne is as dumb as her detractors think to offload Hydro One.

#16 TCContrarian on 07.18.16 at 6:56 pm

” More significantly, the analyst says, “a 20% correction could very well be recorded by June 2017.” ”

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

And another 10-20% for 2018,
and another 10-20% for 2019…

…then I become interested in buying.

#17 Don't get your hair in a dander, Garth! on 07.18.16 at 6:56 pm

Sorry, fundamentals still look good to me. On the other hand, stocks are looking increasingly sketchy.

The real estate boom, especially in 416, has years left to go. YVR at least two more, as well.

#18 Andrew on 07.18.16 at 6:57 pm

Funny.

You talk about people believing what they want, yet you like to constantly quote the same person (Ross Kay) simply because he supports your ideas. You also like to promote statements made by bankers when it supports your notions, but when they don’t (such as the BMO Chief Economist recently saying the housing market is massively affected by foreign buyers), you don’t say a word about it. Face it, you cherry pick your facts and opinions as much as the next person to support your argument.

It appears you like to believe what you want, but nobody else can without being labelled a fool.

Tl;dr – This writer of this blog is as impartial as its commenters.

Actually Doug Porter did not say that. — Garth

#19 Thebarold on 07.18.16 at 7:00 pm

Finally watched the big short. So how does one short Canadian real estate (without selling your house and moving)?

#20 John on 07.18.16 at 7:03 pm

Such a question.. what do you think about helicopter money? Can BOC he so hopeless that it would flood the economy with money, and then a crazy inflation would begin?

#21 Mrs Bluesky on 07.18.16 at 7:04 pm

Oh, let the kids and basement dwellers play their Pokemon Go. It gets them outside in the fresh air for a change.

#22 S.Bby on 07.18.16 at 7:04 pm

Vancouver’s hot housing market inspiring people to get into a career in residential real estate.

http://www.news1130.com/2016/07/18/vancouver-housing-realtor/

It sounds like these people don’t read this blog…

#23 Bank of Millennial on 07.18.16 at 7:14 pm

#6 John

History has shown us it takes roughly 2.5yrs-3yrs to hit bottom when things start to move…. of course you need to anticipate regional differences.

#24 Bytor the Snow Dog on 07.18.16 at 7:20 pm

@4 Afraid to Sell

Is your job based in YVR? Are your skills portable? You won the lottery, take it.

#25 Chaddywack on 07.18.16 at 7:20 pm

My brother bought a house in Whalley (the poor area of Surrey) 3 years ago for $425k. He was offered $850k by a local realtor (of Indian decent) who stated to him that it was an “offshore mainland Chinese buyer.” No prejudicial intent in my statement, but it is not often that you see an Indian who is able to speak fluent Mandarin, so I was suspect of this claim. Regardless I told my brother IF it is a legit offer demand no subjects and SELL. My brother doesn’t like the area, but he figures if he is getting $850k now, next year it will be close to a million so he’s sitting on his hands.

He still brags to me though about how he’s doubled his money in a few years and I’m renting in Calgary. I wish he would have sold…….what was he thinking!?

#26 Bytor the Snow Dog on 07.18.16 at 7:21 pm

@15 Andrew Woburn- sounds like the distributed power model is where it’s at. F these big corporate utilities and their profit margins.

#27 Jimmy on 07.18.16 at 7:22 pm

Big money in Pokemon
Virtual world stuff.
Y’all too old and blind to see $$ opportunity from this part of the herd.

#28 Ronaldo on 07.18.16 at 7:23 pm

#4 Afraid To Sell on 07.18.16 at 6:39 pm

Folks,
I’ve posted before…late stage Gen Xer, good job, bought in North Vancouver in 2000 for $395 K, really haven’t done much to upgrade the house. Its old and kinda tired recently had it appraised at $1,950 K. Kids walk to great schools, we walk to a nice shopping area, tons of dog trails…But I know selling for $1,950 K is like winning the lottery! Just can’t get it done…
————————————————————–
Yep. You and many many more like you will never take advantage of this while the few that do will come out smelling like a rose. Unfortunately the last ones holding the paper are the ones that will be paying for those that capitalized from these over inflated prices. Others will be saying, “We shoulda or we coulda” as they watch the value of their houses drift away. I know of two young couples, friends and relatives who have recently cashed out and one moved to Victoria and the others to Langley and purchased twice the home they had plus a huge stash to boot for their retirement fund. Others will sell and buy something in same area and take on more debt. They will be very sorry. This is the year that the real estate party comes to an end. It’s all over the news now and is all that people are talking about even in my geezer group.

#29 Andrew on 07.18.16 at 7:25 pm

Actually Doug Porter did not say that. — Garth

______________________________________

You must have read something different to me then:

“It appears that not everyone believes, as we do, that a recent rapid escalation in foreign buying is a driving factor behind the recent surge in Vancouver and Toronto home prices,” said Porter.

“…look at what has transpired in the past year — prices have absolutely surged, while credit growth has barely budged. Something besides domestic borrowing has clearly fanned the flames. We will simply note the anecdotal evidence that many foreign buyers do not borrow to buy,” said Porter

I responded to a poster saying BMO claimed the market was “massively affected” by foreign buyers. Doug Porter did not say that. — Garth

#30 Swanson on 07.18.16 at 7:27 pm

“So I concluded (a) people will believe whatever they wish to be true about others and (b) the hell with them.”

Ain’t that the truth.

This whole “blame the foreigners” thing is just out of control. Hard evidence is staring right at them, yet the sheeples would rather believe in some tinfoil hat conspiracy theories.

Never mind the xenophobic and racist undertones: if we don’t look at the problem for what is really is, we cannot solve the problem.

#31 mouldy in YVR on 07.18.16 at 7:27 pm

How many ways can you spell s.p.e.c.u.l.a.t.i.o.n? “investment in stocks, property, or other ventures in the hope of gain but with the risk of loss”
…referencing #2’s link…..”Why aren’t we discussing our declining incomes in Canada? ….income in BC is one of the lowest in Canada………Vancouver house prices have risen 172% in the last 15 years while income has only moved up 10%…..”
…..BC government has only one card in its hand and that is the real estate card……..
Watch out!

#32 Ronaldo on 07.18.16 at 7:37 pm

#14 young & foolish on 07.18.16 at 6:51 pm

“This is what is “goosing” house prices. Worthless money, basically being given away.”

Many people took notice and commented on the article by Don Pitts yesterday. Could this really be happening? Will money become “worthless” in the future?
——————————————————

I would say that it has already become worthless. EG:
In 1969 a million dollars would buy you 50 Vancouver Specials. Today, around .6 of 1. How’s that for a drop in purchasing power?

More like an inflation of stupidity. — Garth

#33 AB Boxster on 07.18.16 at 7:39 pm

Recent article I read said that the computing power in a smart phone is 1 million times more powerful that NASA’s computing power when they landed on the moon.

And they are being used to search and capture imaginary beasts that don’t really exist, for no particular purpose other than its ‘really cool’.

The world is doomed.

#34 Ponzius Pilatus on 07.18.16 at 7:41 pm

#4 Afraid To Sell on 07.18.16 at 6:39 pm
Folks,
I’ve posted before…late stage Gen Xer, good job, bought in North Vancouver in 2000 for $395 K, really haven’t done much to upgrade the house. Its old and kinda tired recently had it appraised at $1,950 K. Kids walk to great schools, we walk to a nice shopping area, tons of dog trails…But I know selling for $1,950 K is like winning the lottery! Just can’t get it done…
—————–
Every homeowner in the Lower Mainland is in a similar situation.
Should I stay or should I go?
Garth says: Get out.
You’ll ignore the advise of the Bearded One at your own peril.

#35 Doog on 07.18.16 at 7:50 pm

Even a moderate earthquake, causing only a bit of damage, here should give people cause to revalue the RE here. There is some real risk, but the low frequency of tremors allows people to forget about it.

#36 The Wet Coast on 07.18.16 at 7:53 pm

I have been returning my family to Vancouver from the US over the last few months. Until we decided to rent I was at every open house in Coquitlam from Jan – Mid June. I have some really good stories but this is my favorite. I went to an open house in Westwood Plateau and had to park 2 blocks away. There were at least 50 people tramping around the place. The house looked OK from the outside. But inside was a different story. There was a new 4×8 sheet of plywood on the outside deck and in front of the sliding doors. The realtor told me he made the owners put it down as someone was going to fall through the deck, the seal on every window except 2 was broken, the appliances were a disaster and the house was plumbed with early poly B with acetyl fittings and I was pretty sure the roof was toast. Ask was $1.4 mil and it went for $1.6 mil!

Then in early May it just stopped. How the hell does that happen? I’d go to open houses and there wouldn’t be anyone except the realtor. The better properties would have a few folks looking at them. One realtor confided it was his slowest open house in 3 years. How does that happen so fast? It was like someone threw a switch somewhere. I will puzzle over this the rest of my life, as I have never seen anything like it.

#37 BOOM! on 07.18.16 at 7:53 pm

Another day, another $500 gain in the investments. Sure beats betting on dodgy RE investments. My stuff can be sold with a mouse click, represent liquidity, and are not leveraged.

Yes, they do represent some individual stocks, some ETF’s, and some mutual fund indexes. So, sue me.

It is somewhat diversified, no overseas stuff, as that has demonstrated it has currency risks, and costs more. Besides, good American companies I hold already get 40-60% of sales abroad. I’ll bet on the home teams.

MF, my young investor friend, still looking for your learned response.

Watch the political conventions closely. Should be both parties support their respective nominees without question, or debate, I would look elsewhere, as they’re interests are probably not mine….

No, can’t win them ALL… but for now it has been a hell of a ride in 2016!

M64WI

#38 Basil Fawlty on 07.18.16 at 7:54 pm

Great information Garth, thanks for reporting. I totally agree that the economic fundamentals do not support the average selling prices in YVR. We saw a big drop in prices in 1981. The cranes shut down over night, while Daon Dev and Nelson Skalbania were soon bust, as reverse leverage ate their jockeys.

#39 Cecil Henry on 07.18.16 at 8:05 pm

RE #15 and China

There are serious problems with Chinese infrastructure.

Made at Walmart applies in China too. Energy is no exception.

1. Built to Fail: Is This System Destined to Take Over the Earth?

https://alfinnextlevel.wordpress.com/2016/07/18/built-to-fail-is-this-system-destined-to-take-over-the-earth/

2. Climate Apocalypse Cult-Ideology Drives Green Energy Disaster

https://alfinnextlevel.wordpress.com/2016/07/17/climate-apocalypse-cult-ideology-drives-green-energy-disaster/

#40 Self Directed on 07.18.16 at 8:06 pm

Poloz and Morneau are idiots to try cutting rates again. The difference on a 500K 25yr mortgage from 2.49 to 2.24 is a measly $60.00.

Rates should stay where they are, or follow the US… in time.

People, the bottom is here now. Don’t listen to Royal LePage, or those Capital Direct commercials. Let the listings flow!! The end of “No Subjects”… building inspectors.. get back to work!!

#41 Metaxa on 07.18.16 at 8:08 pm

@ #4 Afraid To Sell:

Being old, I’ve seen this party before, danced this same dance many times.

Back in the day it was tissue paper strategically employed to keep your interest, now it is silicone and things are “different” in only superficial ways. The dance, however remains the same.

Now is a real good time to take your paper gains and make them real.

I did it just last year in Calgary….sold out of real estate to a large property management firm just before the oil thing…not smart, just real lucky.

Thing is there are folks who tell me I got out too soon. Did I? I’ve got a whack of cash sitting waiting on a letter of clearance from CRA (due any day now…ha!)

They don’t. Have a whack of cash…
Neither do you.

Take it from an old guy…pocket your gains.
Unless you want to holiday like a dentist from the USA, killing lions and stuff, you can retire on your tax free capitol gains and walk both your kids and dogs wherever and whenever you want to.

#42 Self Directed on 07.18.16 at 8:12 pm

Hey everyone… I’m starting to think Jimmy might be a Tweenager.

Now I feel bad for the hurtful comments, so I take them back. Good job, buddy!! Keep on reading and having fun.

#43 A River of Tears On The Way on 07.18.16 at 8:12 pm

Poor Garth, they just love to pick on you. Not to worry, many will soon be crying a river and the 1% will just say, “You were warned.”

“Why should fools have money in hand to buy wisdom, when they are not able to understand it?”

– Proverbs 17:16

#44 Scumop on 07.18.16 at 8:19 pm

The chasing of ever increasing bubble prices is being carried out by people with very low reproductive rates.

If even a tiny bit of this economically irrational behaviour is genetically driven, we should over the next several generations see a reduction in financial stupidity of this sort. They will be outbred by people with more kids and less tendency to chase “tulips”, or perhaps who are better at math.

Sadly, none of us will be around the to see those happy days. But its still pleasant to think about. Evolution in action, improving the species, one helicopter generation at a time.

#45 Sell sell sell on 07.18.16 at 8:19 pm

To Mr. Afraid to sell. . .you will regret not selling for the rest of your life. Don’t make the biggest mistake of your life by not taking the money and running. What because of dog trails, shopping plazas and walking distance to schools? Crazy. The Italians have a saying “Don’t kick a gift horse in the mouth.” If someone is going to give you 1.95 and you don’t take it, you’re going to loose big time.

#46 Mean Gene on 07.18.16 at 8:19 pm

If you were to ask Joe Average Canadian, if you had 10 million dollars to invest they would probably answer buy real estate… so they apply the same logic to international investors. Personally, i would buy a house in Hawaii before Vaincouver.

#47 AK on 07.18.16 at 8:20 pm

Chinese Media Is Now Warning Canada’s Housing Crash Will Be Worse Than The US

#48 Say What? on 07.18.16 at 8:21 pm

“Now it looks like they may get one.”- Garth

—————————————————————

You may be premature in that declaration. As you have many times in the past.

#49 Say What? on 07.18.16 at 8:26 pm

Now it looks like they may get one. As the tide goes out, we’ll see who’s left holding the bag. I doubt it will be thousands of guys from Guangzhou.” – Garth

————————————————————–

So do I. By then, they’ll have already largely made their money and gotten out. Smart.

#50 Say What? on 07.18.16 at 8:30 pm

The bank of Canada loses it’s mind? Hey, they’ve already done that. The whole banking system has become a charade. Pile more debt on an already steaming pile with no regard for the future. That’s the BoC.

#51 Darrel on 07.18.16 at 8:31 pm

http://thetyee.ca/Opinion/2016/07/12/Chinese-Buyers-Vancouver-Home-Prices/

How Chinese buyers are driving Vancouver prices

#52 Bram on 07.18.16 at 8:35 pm

#19
Finally watched the big short. So how does one short Canadian real estate (without selling your house and moving)?

If you want to do that: You could buy put options on Canadian mortgage insurers. E.g:
https://www.google.com/finance?q=TSE%3AMIC&ei=sXONV9C7G6KQjAKS6aCwCQ

Personally, I would never go there.
The odds are you will miss-time it. (Just look at how long Garth has been expecting a correction.)

Even if you get the timing right: the US housing crisis is distinctly different from the Canadian one.

To my knowledge, those ‘side-bets’ mentioned in the Big Short have no Canadian equivalent.
I don’t think Credit Default Swaps are a thing here.
Those derivatives, if any, will surely not dwarf the country’s mortgage debt, like they did in the US.

Different country, different crisis.
I would be looking for growth in other industries, as opposed to ‘shorting’ anything.

Bram

#53 crowdedelevatorfartz on 07.18.16 at 8:35 pm

@#18 Andrew
“This writer of this blog is as impartial as its commenters……”
*******************************************

In the immortal words of that perfect example that good dental hygiene does work…….
Donny Osmond..

“Go away little girrrrrrrl before I beg you to staaaaayyy”

#54 Urbancorp = Criminals on 07.18.16 at 8:36 pm

Disgusting…. Where isis the government protection of deposits?

http://www.financialpost.com/m/wp/blog.html?b=business.financialpost.com/personal-finance/mortgages-real-estate/pretty-disgusting-urbancorp-restructuring-leaves-hundreds-of-families-without-homes-or-deposits

#55 Doug t on 07.18.16 at 8:36 pm

Sooooooo when bozo at bank of canada does cut the rate ( he will) then prices keep going up?

#56 crowdedelevatorfartz on 07.18.16 at 8:39 pm

@#27 Jimmy
“Y’all too old and blind to see $$ opportunity from this part of the herd.”
*******************************************
Then PLEASE ask the “herd” to shuffle over to their own yard and stop creeping normal people out with your incessant staring at a virtual image on a telephone superimposed on to real life……..oh …..and…….

watch out for that bus.

#57 nonplused on 07.18.16 at 8:45 pm

Prices are set at the margin. Foreign buyers may only make up 3% of sales but if all they do is buy and never sell over the years that adds up. However they will also be the first to sell, and they will do so all at once.

If even last year’s 3% buyers panic all at once and want out, the clearing price will be hard to find. “Don’t catch a falling knife” as they say. As Garth has repeatedly said, people who live in Vancouver cannot afford to buy in Vancouver and that won’t change when even 3% of the property owners decide it’s time to sell. When this market gives, it going to give hard. And then when you count all the local speculators, whoa.

The crack house discussed at the end of the post seems to argue a point I have made here before; the Vancouver bubble is largely supported by the drug trade and drug money laundering. Of course a crack house is worth $1.3 million to the gangs. First, you get your customers all in one place with a roof over their heads. Second, you can claim the income is “rent” and launder it. Third, even if the price of the house declines, at least you got some of the cash “into the system”. It’s the price you pay to transfer illegal cash transactions into real bank credits you can use to buy a Porsche, or an Escalade with “spinners”. (Yes, all those guys driving black Escalades with spinners on them are dealing. Pull up if you need something. No sane person would put low profile racing tires and “spinners” on an off road vehicle. They are advertising.)

#58 Nelley on 07.18.16 at 8:48 pm

OTOH 93% of Canadians do not live in Metro Vancouver. That one market is on a whole different paradigm than anywhere else in the country-I can understand why wealthy Chinese would pay top dollar to live there, but I don’t get the big attraction for anybody else (not at these prices).

#59 it’s only Trump and coal (but I like it)…. on 07.18.16 at 8:56 pm

Limitary hoodlum,
zinfandel blowhole feoffment,
capitulation…..

bring it on….

#60 WalMark of Sadkatoon on 07.18.16 at 9:04 pm

YVR and YYZ deserve what they get. Greedy Degenerates.

#61 it’s only Trump and coal (but I like it)…. on 07.18.16 at 9:06 pm

“The howls as this all deflates will be deafening.”

so, GT, will this be the leading edge of a recession?

#62 Freedom First on 07.18.16 at 9:11 pm

#2 pathcontrolmonk & #8 Help in Calgary

Yes. I agree with the Chinese media. The Canadian RE crash will be worse than the U.S. crash. And there will be lots of blame to go around. Of course, like in the U.S., some areas of the country will be hit much harder than other areas.
……………………………………………………………………….
Help in Calgary. I hope this will help you:

Always, always, always, be liquid, diversified, and balanced. Income, cash, and cash flow are always important. I have never never ever put myself in a position to let myself become stressed over the state of my finances. Keep in mind, I had to learn quickly at 17, when I found myself, through fate, to have to be fully self supporting, starting with 0. The thought of asking for help never crossed my mind. I did what I had to do, and, though I made some mistakes, I became an expert in looking after myself decades ago, in every area of my life.

Lastly, never never never beat yourself up over anything. (Simply do what you have to do to make it right). There is always people just waiting to beat you up, so you don’t have to do it to yourself.

#63 Cottingham a bargain on 07.18.16 at 9:11 pm

29 Bingham. 30 foot lot , 1400 sq ft home about 30 years old Richmond hill. 16 offers sold for 970k , 220k above ask.

No slow down in RH that’s for sure .

#64 TurnerNation on 07.18.16 at 9:15 pm

#15 Andrew Woburn you know taxpayers will see no benefit to that money. It will be thieved away as usual.
Two words: Sunshine list.

Expect continued tax hikes, highest electricity cost in the free world, and crumbling infrastructure.

Care to bet?

#65 Gregor Samsa on 07.18.16 at 9:16 pm

#3 Serenity Now

I’ve been following the Calgary market for a while and I would say it’s currently in a form of stasis. Sellers have dropped prices a bit, but for the most part are holding firm at or near “break even.” Nobody is panic selling below this level. Buyers are still around and still buying things. The only thing really suffering are the high and low ends – overpriced mansions and overpriced hole in the walls are not moving at all.

This is what a low interest rate environment looks like. No creative destruction is possible, things just sort of fester. Interestingly, this is the exact same thing happening to the overall global economy right now. It’s being slowly choked by low interest rates, but the low rates also prevent a rapid drop (for a while, anyways).

People predicting the end is neigh in Vancouver would be well served to look at Calgary. Calgary is holding on despite high unemployment and lousy economy for nearly two years. If that didn’t kill it, what will?

But given time and no new economic oil boom, people holding on to their prices will eventually be forced to blink and at some point, a critical mass might be reached that would tank the market.

Or the criminal Bank of Canada will lower interest rates to dead zero and try to goose the market one last time…. I don’t count that out.

#66 TCContrarian on 07.18.16 at 9:19 pm

#6 John on 07.18.16 at 6:44 pm
“So as the un-wind happens when do we know we have hit bottom or is the “recovery” just a fools rally? We might be a little time away from that but what are the signs to look for?”
**********************************************

When everyone you know thinks RE is not a good investment and “should be avoided”.
I know it sounds impossible, but that’s the essence of contrarian investing (which I’ve been doing, successfully, for some time now).
There are other indicators of course, it’s not easy, and it takes loads of patience and being able to go against the popular opinion – which is greatly influenced by mass media.

#67 Aggregator on 07.18.16 at 9:19 pm

#54 Urbancorp = Criminals – Disgusting…. Where isis the government protection of deposits?

There is no deposit protection. These are the folks that were lined up outside waiting to sign paper contracts that explicitly state that their deposit is unsecured and that the developer will hold possession of the property title until occupancy. This is what happens when you buy off emotions and don't assess risk.

#68 fleabitten monkey on 07.18.16 at 9:20 pm

Now if that Maple Ridge shithole sells for $1.3 mill or even $1 mill, that’s truly newsworthy for all sorts of reasons. Lets get an update when you know more.

#69 Nemesis on 07.18.16 at 9:28 pm

“The next day there was a large photo on the wire with the caption, “MP Garth Turner never goes anywhere without two blonde, female aides.”… – LongJohnTurner

#JustAnotherOccidental… #MinisterialUnderachiever,Or… #”DreamsOfTheRedChamber”… #HowLiuZhijun’sLongJingWozDinged…

[NDTV] – 47 Mistresses: Director of Shanghai Railway Bureau Sex Scandal Exposed

…”Zhu Ruifeng, founder of the website ‘rmjdw49.com’, which reports on official’s scandals, exposed Lei Zhengfu. Recently, Zhu reported on Long Jing, former Director of Shanghai Railway Bureau, and his 47 mistresses. This outnumbered Lei Zhengfu…

…According to rmjdw49.com, former Shanghai Railway Bureau Director, Long Jing, keeps dozens of mistresses and has sexual relations with hundreds of women. Three of them have given birth to his children.”…

http://www.ntd.tv/en/programs/news-politics/china-forbidden-news/20140502/136328-47-mistresses-director-of-shanghai-railway-bureau-sex-scandal-exposed-.html

[SCMP] – Disgraced minister had sex with TV stars, report says

…”A report by the outspoken New Century magazine said Shanxi businesswoman Ding Shumiao – whose dealings with Liu are said to have led to him being placed under investigation in January – had arranged for Liu to have sex with attractive young women, including stars from a television series in which she had invested about 50 million yuan (HK$59 million).

That series is believed to be Dream of the Red Chamber, based on a classic novel about ancient nobles and their love affairs. The magazine did not name the stars and deleted the report from its website a day later.

Meanwhile, the identity of the stars who were among Liu’s bevy of up to 18 mistresses was one of the hottest topics on the internet yesterday.”…

http://www.scmp.com/article/739598/disgraced-minister-had-sex-tv-stars-report-says

[NoteToGT: Just between the two of us, when you consider his stamina I’m astonished that the Chinese leadership didn’t award LongJing the Order of Heroic Exemplar, First Class.]

#70 Grey Dog on 07.18.16 at 9:37 pm

Afraid to Sell #4. I hear you loud and clear! Unionville, lots of dog trails, walk to boutique grocery store, or 7 minute drive to whole foods, twice in 32 years needed ambulance or fire trucks 1 minute 30 seconds door to door, 20 minute trail walk to village and its shops, bus at end of street takes me direct to hospital 20 minutes including stops. Other amenities galore minutes away, sell and move….where??? No debt have investments, shouldn’t quality of life mean something? Vacate cause there are now some empty houses with abandoned pools breeding mosquitoes around me?

#71 Yuus bin Haad on 07.18.16 at 9:42 pm

Used to be one had to stir the pot to get things going; now everything’s so wound up, one just has to sit back and watch.

#72 Andrew Woburn on 07.18.16 at 9:43 pm

#14 young & foolish on 07.18.16 at 6:51 pm
Will money become “worthless” in the future?
=======================

Money is nothing more or less than a claim check on the goods and services you can buy with it. On a global basis, the worth of all the money in the world at any point in time must be exactly equal to the market value of all the assets and services it could buy at that point.

If banks increase the money supply faster than the supply of assets and services increases, the purchasing power of any unit of money decreases (inflation) but the aggregate money supply cannot become worthless.

#73 bubu on 07.18.16 at 9:46 pm

China discovered Calgary now:) http://www.cbc.ca/news/canada/calgary/calgary-condo-record-price-1.3684434

I told you AB is on the list next…

#74 The Spectre on 07.18.16 at 9:49 pm

It seems that our Selfie-Minister also doesn’t care. He is so retarded speaking English with all his uhs and ohs. Finally the press noticed:

http://www.nationalpost.com/m/wp/blog.html?b=news.nationalpost.com/news/canada/uh-certainly-i-uh-does-justin-trudeau-really-say-uh-all-the-time

And am mot even mentioning him flying as a butterfly in those gay parades.

What an embarrassment!

#75 Ex-Cowtown on 07.18.16 at 9:50 pm

#15 Andrew Woburn on 07.18.16 at 6:52 pm

“At this year’s giant solar show – Solar 2016 – a future with abundant, clean and cheap energy was discussed and on display. Success will be based on the continuation of five trends:

– The Germans and Chinese have been dramatically transitioning to renewable energy by government edict, which has massively driven down costs for everyone through innovation and mass production;

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

You need to get your head out of the Green Glory Hole. Germany is rapidly scaling back on renewables, which are causing bankruptcies in some of their largest utilities.

http://notrickszone.com/#sthash.NErzfnQa.HaI4Mv3F.dpbs

http://notrickszone.com/2016/07/15/german-power-giant-risks-becoming-largest-bankruptcy-in-german-business-history/#sthash.vZo7YWFC.dpbs

England has slashed support for renewables and just dismantled their Department of Energy and Climate Change.

Several other countries have thrown in the towel on this scam.

http://www.thegwpf.com/philippines-wont-honor-paris-agreement/

The only people still running headlong into the whirling blades of this financial disaster are Ontario, Alberta and now our scientifically illiterate federal Liberal government.

Only the bankers (and Al Gore and his band of thieves) want to see this whole mess of renewables continue as they see $$TRILLIONS$$ in profits to be scammed out of taxpayers.

http://joannenova.com.au/2016/07/climate-change-is-potentially-a-7-trillion-dollar-money-making-venture-for-bankers/

I’m never amazed that people who cannot acknowledge or reconcile competing interests are the easiest ones to scam. Their need to believe makes them easy marks.

#76 Freedom First on 07.18.16 at 9:54 pm

#2 pathcontrolmonk & #8 Help in Calgary

P.S. – I also wrestled a mama black bear into submission with my bare hands, after she became mad at me for coming between her and her cubs. I hope that helps.

#77 crowdedelevatorfartz on 07.18.16 at 9:58 pm

@#36 The Wet Coast
“One realtor confided it was his slowest open house in 3 years. How does that happen so fast? It was like someone threw a switch somewhere. I will puzzle over this the rest of my life, as I have never seen anything like it.”
*******************************************
Fascinating observation.
Has the worm turned?

#78 Bottoms_Up on 07.18.16 at 10:02 pm

#74 The Spectre on 07.18.16 at 9:49 pm
———————————–
Sure, go ahead and attack a man who is bilingual for impections in English…. C’est une bonne strategie n’est pas? You lost the election, get over it.

#79 Nemesis on 07.18.16 at 10:02 pm

#BonusLongJingDingALing…

https://youtu.be/UaEC-lWSlmI

#80 Andrew Woburn on 07.18.16 at 10:05 pm

#64 TurnerNation on 07.18.16 at 9:15 pm
#15 Andrew Woburn you know taxpayers will see no benefit to that money. It will be thieved away as usual.
Two words: Sunshine list.

Expect continued tax hikes, highest electricity cost in the free world, and crumbling infrastructure.

Care to bet?

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

That would be a bad bet. The cohesion of mercenary armies and criminal gangs has always depended on an efficient division of the spoils.

Besides I’m from BC where the government supplements its allegedly low tax rates by milking BC Hydro and our captive provincial auto insurance agency.

#81 Jerry on 07.18.16 at 10:14 pm

#33 AB Boxster on 07.18.16 at 7:39 pm

Recent article I read said that the computing power in a smart phone is 1 million times more powerful that NASA’s computing power when they landed on the moon.

And they are being used to search and capture imaginary beasts that don’t really exist, for no particular purpose other than its ‘really cool’.

The world is doomed.
====================

Glad they brought back some moon rocks for the $375 million they spent getting there.

#82 Arfmooocat on 07.18.16 at 10:14 pm

That crack shack was stolen for 300K

#83 chuck Clark on 07.18.16 at 10:19 pm

700 Sussex!! The condo fees for the smallest suite were higher than my rent at the time. What a struggle, I’ve never had to run garage exhaust through a park bench before. Did you ever complain about the smell of the restaurants even though you moved into a small building with TWO restaurants in it? I still have notes from an NCC meeting – one of them told us to use a fountain “or something” instead of an ugly cooling tower.

#84 John in Mtl on 07.18.16 at 10:25 pm

#27 Jimmy on 07.18.16 at 7:22 pm

Big money in Pokemon
Virtual world stuff.
Y’all too old and blind to see $$ opportunity from this part of the herd.

Yep, just read that Pokemon GO mnakes about 825,000.00 per day! Angry birds made 96 million in 2014 (not sure the year date) and following year made 200 million!!

The game sure has its upsides (getting out more, meeting strangers and neighbours you never talk to, etc.). Downsides: people are no longer “present”, they are wholly engrossed and hypnotized by their electronic divinity. May they get run over by a bus!

Personally I think people a little crazy, okay, a lot crazy – there is a whole REAL world out there to see and discover and you don’t need to chase pocket monsters (Pokemons, that is the name’s origins) to get in on the fun and discovery. This world / society has goen mad, to care more about virtual things than the real world. They also forget who and what sustains their life… no, its not their job, it is nature, the REAL WORLD; for which many have no respect and are so alienated
from, it is just too sad to comprenend.

I wish the entire planetary grid of communication would go down for a month… it might bring people out of their stupor!

#85 the Jaguar on 07.18.16 at 10:25 pm

#3 Serenity Now::

I follow a group of neighbourhoods in the northwest/inner city north east areas which I know like the back of my hand. There has clearly been some price adjustment. I think there are also holdouts who haven’t faced reality but still have funds to draw on their Heloc’s or savings from the good bonus days in oil & gas. They’re like poker players in Vegas praying for the resurrection of their last winning hand. What’s scary is the condo market. All those towers coming on line at the same time, many of which must have significant investor units purchased by peeps in the same industry just mentioned. And out migration in the city has left things a ‘renters market’. Nobody wants to breathe a word or there might be panic in the streets. Never mind the 50% commercial occupancy, you can smell trouble in residential, too. It’s being kept under wraps by the media and even the savy like Aggregator.

#86 BS on 07.18.16 at 10:40 pm

78 Bottoms_Up on 07.18.16 at 10:02 pm
#74 The Spectre on 07.18.16 at 9:49 pm
———————————–
Sure, go ahead and attack a man who is bilingual for impections in English…. C’est une bonne strategie n’est pas? You lost the election, get over it.

That’s a new one. The bilingual card. How dare someone criticize someone who is bilingual. Who cares if he has “impections” if he speaks french.

#87 Marius on 07.18.16 at 10:45 pm

https://betterdwelling.com/city/vancouver/chinese-media-now-warning-canadas-housing-crash-will-worse-us/

#88 Scully on 07.18.16 at 10:48 pm

Garth, you can’t fix stupid. I could show the doubting plebs all the evidence of mortgage debt in this mouldy city and they’d tell me it’s not enough proof, it’s all HAM. But the truth is it’s not all HAM. Fear and greed Garth, that’s all it is. Oh, and after an insane start to the year it’s getting very quiet out there.

#89 Jon from SK on 07.18.16 at 10:50 pm

Excellent post, Garth. Please keep up the good work.

#90 WUL on 07.18.16 at 10:52 pm

#73 bubu on 07.18.16 at 9:46 pm
China discovered Calgary now:) http://www.cbc.ca/news/canada/calgary/calgary-condo-record-price-1.3684434
I told you AB is on the list next…

@@@@@@@@@

If you step onto my 86 year old mother’s balcony in her 7th floor, 2 bed apartment on 26th Avenue at about 3rd St. in SW Calgary, you will be staring straight at The River in which that swish condo is situate. YTou can see her apartment building in the photo the at the bottom of the CBC article. I suspect her rent is about $1400/mo.

Construction of he River over the last 3 – 4 years created dust and noise and deprived her of sleep. And, it took away her view of the charming Elbow River in The Mission. A fun hood.

Floodplain Central in Cowtown. Cheap, mud filled Rolls Royces will be dragged from the parkade of The River in the next few years.

Climate change.

#91 AB Boxster on 07.18.16 at 10:59 pm

#81 Jerry on 07.18.16 at 10:14 pm

Glad they brought back some moon rocks for the $375 million they spent getting there.

————————–
Found Pikachu yet?

#92 Snowboid on 07.18.16 at 11:06 pm

#15 Andrew Woburn on 07.18.16 at 6:52 pm…

Our power company down south (APS) has been offering to ‘lease’ rooftops. They cover all the costs of installation, etc and offer a small reduction on your power bill.

Methinks they came to the same conclusion about the future of power companies!

#93 Maldroit Ape on 07.18.16 at 11:08 pm

Speaking of Delusions at least one of them maybe is unraveling and thanks to the illiquidity of real-estate at that.

Trump might be too poor to finance the campaign for the general election! He won’t file his tax returns so possible to know for sure but his 90 page FEC filling is full of dubious nonsense. Made a big deal about self financing then we find out they are loans he made to his campaign and he was expecting the RNC to pay back (and lots of the primary spending went to his own company).

And the irony of it all, the populist Brexit vote he celebrated has significantly impaired the value of the very golf course in Scotland where he you know confused remain voting Scotland for leave Britain. Moreover the fear mongering he is spreading has taken the bottom out of the high end property market so more illiquidity. Now he is complaining that Clinton has all the wall-street money and he can’t afford to advertise so he is making noise about breaking up the banks (I wonder if Deutche Bank can pull his LOC or loans ?)

#94 NotAGreaterFool on 07.18.16 at 11:10 pm

Ross Kay materials :

http://talkdigitalnetwork.com/2016/06/too-late-for-gov-regs-to-cool-real-estate-market/

#95 DON on 07.18.16 at 11:18 pm

#29 Andrew on 07.18.16 at 7:25 pm

Actually Doug Porter did not say that. — Garth

______________________________________

You must have read something different to me then:

“It appears that not everyone believes, as we do, that a recent rapid escalation in foreign buying is a driving factor behind the recent surge in Vancouver and Toronto home prices,” said Porter.

“…look at what has transpired in the past year — prices have absolutely surged, while credit growth has barely budged. Something besides domestic borrowing has clearly fanned the flames. We will simply note the anecdotal evidence that many foreign buyers do not borrow to buy,” said Porter

I responded to a poster saying BMO claimed the market was “massively affected” by foreign buyers. Doug Porter did not say that. — Garth
************

Andrew.

It appears you need to stop spinning the evidence and start listening carefully. Why are you here, on this blog if you disagree and the blog comments are worthless. I wouldn’t waste my time on a so called loser blog. What skin to you have in the game? Housing sentiment is changing. As for the tipping point – it could have already happened. All that has to happen is for one peer leader to get disgusted with prices and decide not to buy and travel the world instead. It’s happened before, sentiment always changes as people look for new adventures. Why are you here?

#96 45north on 07.18.16 at 11:27 pm

More significantly, the analyst says, “a 20% correction could very well be recorded by June 2017.”

Figure a $1 million house in Vancouver ( actually $989,621 )

Alterna bank says that if your annual household income is $172,000 then it’ll give you a mortgage of $803,834 minus default insurance = $789,621. That’s $4,228 a month.

https://www.alterna.ca/Personal/HomeBuying/Mortgages//selector.alternamortgages.com

20% correction would be the end of life as we know it

#97 White Crock BC on 07.18.16 at 11:28 pm

Bottoms_Up on 07.18.16 at 10:02 pm

C’est une bonne strategie n’est pas? You lost the election, get over it.

——————————

Tu veux dire: “n’est ce pas”?

#98 DON on 07.18.16 at 11:29 pm

#80 Andrew Woburn on 07.18.16 at 10:05 pm

#64 TurnerNation on 07.18.16 at 9:15 pm
#15 Andrew Woburn you know taxpayers will see no benefit to that money. It will be thieved away as usual.
Two words: Sunshine list.

Expect continued tax hikes, highest electricity cost in the free world, and crumbling infrastructure.

Care to bet?

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

That would be a bad bet. The cohesion of mercenary armies and criminal gangs has always depended on an efficient division of the spoils.

Besides I’m from BC where the government supplements its allegedly low tax rates by milking BC Hydro and our captive provincial auto insurance agency.
************

Andrew W.

Thank you for the valuable research and insight.

A couple years ago, while discussing solar power, an acquaintance, laughed at the suggestion that solar power would be viable anytime in the future. “It will never be efficient or viable” he claimed. I looked at him and said, ‘you know I bet that’s what they said about the first car when the first model came out and a horse could still beat it’. I guess he never expected (envisioned) the continued research and innovation.

I also like you take on the high BC Hydro and ICBC rates. And shouldn’t the BC government diversify into solar, wind, geothermal, tidal instead off building Site C Dam.

Thank you for the info, I also appreciate the updates on robotics.

Cheers,

#99 Winterpeg on 07.18.16 at 11:30 pm

I know real estate is “all local” but will it all translate eventually into a 20% drop or more in other markets other than Van, T.O. or Calgary?

#100 Keith in Calgary on 07.18.16 at 11:33 pm

The River Condo sales story is a FRAUD. MSM bullshit to the extreme.

They reported this “story” a couple of years ago when they broke ground, more than once in fact.

Show me the money. Only a f_ _ _ ing moron would pay that kind of money in today’s market…….especially when you can buy the same thing for 1/4 the price across the street.

LAIR, LAIR, PANTS ON FIRE !!!

#101 Keith in Calgary on 07.18.16 at 11:34 pm

Or should that be……..LIAR, LIAR.

#102 DON on 07.18.16 at 11:46 pm

#36 The Wet Coast on 07.18.16 at 7:53 pm

I have been returning my family to Vancouver from the US over the last few months. Until we decided to rent I was at every open house in Coquitlam from Jan – Mid June. I have some really good stories but this is my favorite. I went to an open house in Westwood Plateau and had to park 2 blocks away. There were at least 50 people tramping around the place. The house looked OK from the outside. But inside was a different story. There was a new 4×8 sheet of plywood on the outside deck and in front of the sliding doors. The realtor told me he made the owners put it down as someone was going to fall through the deck, the seal on every window except 2 was broken, the appliances were a disaster and the house was plumbed with early poly B with acetyl fittings and I was pretty sure the roof was toast. Ask was $1.4 mil and it went for $1.6 mil!

Then in early May it just stopped. How the hell does that happen? I’d go to open houses and there wouldn’t be anyone except the realtor. The better properties would have a few folks looking at them. One realtor confided it was his slowest open house in 3 years. How does that happen so fast? It was like someone threw a switch somewhere. I will puzzle over this the rest of my life, as I have never seen anything like it.
**************

I have been reading the book, “The Tipping Point – How Little Things Can Make a Big Difference” Malcom Gladwell. The first 5 chapters explain by use of case studies and of course hindsight how trends start and fall. Hard to put down, an informative book much like the recent movie the big short. Chances are if we are talking housing bubble the tipping point has already occurred, is underway or is about to happen. All it takes is for human sentiment to change under different context and circumstances. Right now in Vancouver people are voicing their disgust at the insane prices and others are starting to take notice. Yes the ‘Chinese are coming’ and the FOMO are acting as the catalyst to inflate the bubble, but sooner or later.

#103 tom black on 07.19.16 at 12:07 am

ok so which of the great big financially solid Canadian banks are going to pooh themselves when this game is up?

names please of the lenders most exposed?

own bank stocks and reading this.. bye bye

#104 DON on 07.19.16 at 12:07 am

#65 Gregor Samsa on 07.18.16 at 9:16 pm

#3 Serenity Now

I’ve been following the Calgary market for a while and I would say it’s currently in a form of stasis. Sellers have dropped prices a bit, but for the most part are holding firm at or near “break even.” Nobody is panic selling below this level. Buyers are still around and still buying things. The only thing really suffering are the high and low ends – overpriced mansions and overpriced hole in the walls are not moving at all.

This is what a low interest rate environment looks like. No creative destruction is possible, things just sort of fester. Interestingly, this is the exact same thing happening to the overall global economy right now. It’s being slowly choked by low interest rates, but the low rates also prevent a rapid drop (for a while, anyways).

People predicting the end is neigh in Vancouver would be well served to look at Calgary. Calgary is holding on despite high unemployment and lousy economy for nearly two years. If that didn’t kill it, what will?

But given time and no new economic oil boom, people holding on to their prices will eventually be forced to blink and at some point, a critical mass might be reached that would tank the market.

Or the criminal Bank of Canada will lower interest rates to dead zero and try to goose the market one last time…. I don’t count that out.
************
CBC Calgary or the national site is saying that this is turning out to be the worst recession Alberta has faced in while. http://www.cbc.ca/news/canada/calgary/td-economics-report-alberta-recession-gdp-forecast-1.3684056
And it has just got underway…I wonder what they will say when the downturn takes hold. Why are they not diversifying into other energy markets to create jobs?

#105 TRUMP on 07.19.16 at 12:11 am

A 3 bedroom ranch ex-crackhouse for 1.3mil.
Geez….I missed out on another bargain.
Be more open minded Garth.
Just think of the endless possibilities.

There’s a sucker born every minute…….
And they all buy real estate in Vancouver.

#106 AisA on 07.19.16 at 12:13 am

Go ahead , make my day. Cut that rate just one more time so we can hear the Crickets go silent as well.

#107 The Spectre on 07.19.16 at 12:36 am

#78 Bottoms_Up
#86 BS on 07.18.16 at 10:40 pm
————————
Very weak argument.

Never met anyone who spoke two languages (at least) that had such a dirty speech as he has. And or a drama queen, sorry, drama teacher and politician that’s a total disaster.

When you didn’t memorize your speech, or needs to improvise, and has very shallow understanding what you’re talking about, I know it gets difficult.

Maybe Butts didn’t review that part of the script with him yet?

Too much CBC guys.

#108 Maldroit Ape on 07.19.16 at 1:32 am

@DON#95

Thanks for the quote:

“…look at what has transpired in the past year — prices have absolutely surged, while credit growth has barely budged. Something besides domestic borrowing has clearly fanned the flames. We will simply note the anecdotal evidence that many foreign buyers do not borrow to buy,” said Porter

It is interesting because there can be another interpretation of the events of this narrative. Remember the $8 dollar cauliflower? The crash in oil prices really took a toll on our growth, lots of infrastructure investment in the oil patch with spillover to parts beyond, lots of high income jobs lost (construction, engineering, transport, management etc). So Poloz cuts interest rates to juice borrowing and the dollar falls a lot: http://www.cbc.ca/news/business/canadian-dollar-drops-to-lowest-level-since-2004-1.3163316 and the usual narrative is of course prices went up because Canadian housing is cheaper for foreigners.

But there is a thing being overlooked: the effect that this would have on snowbirds and foreign vacation property owners (rich oiliers). First some bad things have happened: income has fallen (CDN pension, lost job), and the carrying cost has gone a lot higher (22%+) for the property. So what to do ? well they have gains from the looney collapse and due to the housing crash in the US and subsequent recovery sometimes a nice bump in the value of their property. So they sell the property and now slightly richer spend the whole year in Canada maybe thinking they are a real-estate genius instead of really lucky and go and buy a nice property or 3 or rope in their children by acting as bank of mom (grand-mom). http://globalnews.ca/news/2499016/canadian-snowbirds-in-sell-mode-because-of-lagging-loonie.

So you have to wonder how much of the activity is being funded by repatriation of funds as there are quite a lot of snowbirds and Canadians and we have some pretty substantial overseas assets.

So if you add that some really cheap domestic money, some fast foreign money, some diminished lending standards (harpers 40 year 0% down mortgages), an opaque (MLS, Franken-numbers ), monopolistic market (realtors(R)), demographics add a bucket of mania to taste and we have a rollicking bubble. Good times but we have hit a credit wall so declining sales volumes and price declines are a head and the herd mentality will follow.

Hopefully for the sake of Canadians we remain our level headed selves, the US recovery continues (even if the markets flip out) and our price diminished exports goods and services start attracting buyers. Even if things get bad many of our over extended homeowners will keep their jobs and dignity and can refinance their loans at low interest rates paying off the debt spending and saving again. Like drinking way too much the aftermath will suck but most of us will be ultimately be fine as our southern neighbors were, if we keep our heads we can even avoid the apocalyptic bullet/gold/tp hoarding panic and make sure we help those in need.

#109 Writing on the wall... on 07.19.16 at 2:38 am

Reading Delusia posts today…replay of talk and minutiae “facts” from 80s pre-Calgary RE crash and 90s pre-416 RE crash…hanging by a string and polishing the port holes on a sinking ship.

History just keeps on repeating.

Writing is on the wall, YVR RE is beginning to crash, Garth warning too late but the first to do so.

Can’t wait to read the weeping and gnashing posts to come.

#110 juno on 07.19.16 at 2:41 am

.
#36 The Wet Coast on 07.18.16 at 7:53 pm

Mabey its because rev can is now getting into the picture and evaluating tax brackets to the 2.5 million dollar homes. Just recently sold. And also wonder how someone who is living on low tax brackets with heavy government funding, or in some cases wealhfare grants, is able to afford a multi million dollar house.

Take the Chinese which we are scaring off, the drug money, the money laudrying out of the equation along with a huge debt load. and Voila you have the “Perfect Storm”

#111 Damifino on 07.19.16 at 2:46 am

#75 Ex-Cowtown

I’m with you. I thank providence fossil fuels will still be available when the ‘green revolution’ collapses. The next step is nuclear fusion but that’s 50 years off. In the meantime humanity will rely, as usual, upon the one source of energy that is cheap, plentiful and reliable.

#112 Freedom First on 07.19.16 at 3:20 am

#76 Freedom First

Yes. Damn, am I ever awesome!
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>

#76 Freedom First, I hereby nominate you to be President of the “Freedom First Impersonator Fan Club”. You really get me.

#113 Ed on 07.19.16 at 3:32 am

Chinese influence?

I am over in Japan for a few weeks, visiting my wife’s relatives. Chinese tourism has increased greatly here the past few years; Japanese businesses see this as opportunity. Chinese people are buying condos and homes in droves but no one is complaining and there is no silly talk of this affecting affordability. Houses here are like cars–as soon as you buy a new home it depreciates in value because it becomes used & older. No one sees homes as an investment. Chinese buy a home and then use it for the week or two there are here on vacation but who cares? I think it is a sign of a mature culture to be able to not assume the worst about other people and wear your redneck opinion around your neck for everyone to see. It seems house stupidity is uniquely Canadian.

#114 Shawn on 07.19.16 at 3:35 am

Misunderstanding of Money and Banks

#165 Sheane Wallace on 07.18.16 at 4:48 pm responded to me:
#154 shawn

Which part of: ‘somebody else is consuming the fruits of your labour’ did you nod understand?

Of course there are more claims on wealth due to banking model and monetary policies, which diminishes your claim, the one of the producer, at the expense of somebody else who does nothing productive.

**********************
I don’t recall even reading your false sound bite there. I don’t have to read your posts closely since I already know you have a warped view.

Firstly most fruits these days BY FAR come from the output of capital not labour. For example I just finished touring old fashioned wind mills where it took hours to squeeze out a bit of product but where factories these days churn out vast quantities on a tiny fraction of the labour of old. The fruits of capital belong to the owners of capital (like factories, machines , land and building and software for example) not to labour.

Second, I don’t know of any borrower who is getting money without a promise to repay out of future earnings. Welfare recipients do share the fruits of my labour and capital however.

We live in a system that gives average people a great life and a minority of people a very rich life. I have no complaints to share some of what the system allows me to produce with others. Without the system we would be subsistence farmers or hunter gatherers.

#115 Shawn on 07.19.16 at 3:41 am

Another false soundbite about banking

#72 Andrew Woburn on 07.18.16 at 9:43 pm posted:
#14 young & foolish on 07.18.16 at 6:51 pm
Will money become “worthless” in the future?
=======================

Money is nothing more or less than a claim check on the goods and services you can buy with it. On a global basis, the worth of all the money in the world at any point in time must be exactly equal to the market value of all the assets and services it could buy at that point.

If banks increase the money supply faster than the supply of assets and services increases, the purchasing power of any unit of money decreases (inflation) but the aggregate money supply cannot become worthless.

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

The following from above sounds true but is false.

“On a global basis, the worth of all the money in the world at any point in time must be exactly equal to the market value of all the assets and services it could buy at that point.”

Untrue, in fact while all wealth can be measured in money, most wealth is not in the form of money. The total amount of money in the world (bank deposits and currency) is a tiny tiny fraction of all the wealth in the world.

We have tried to increase the money supply and have done and yet inflation is very low and the worry is deflation.

Your post is about what was predicted to happen with central bank printing (inflation) it never happened partly because the velocity of money changing hands slowed down.

#116 Pokemon mania or religion? on 07.19.16 at 5:34 am

#84 […]This world / society has goen mad, to care more about virtual things than the real world. They also forget who and what sustains their life… no, its not their job, it is nature, the REAL WORLD;[…]

Not defending the craze that is Pokemon but hasn’t mankind always chases the virtual; the invisible?

Maybe VR as whole should be looked at from a different angle. It seems the players are devoting their time religiously and willing to pay for it as well.

Could be an evolution of sorts from the oldest trick in the book.

Please, no offense to anyone with a true religious background.

#117 Yuan depreciation done? on 07.19.16 at 5:45 am

Chinese money in Vancouver has been exaggerated as we now know. Maybe it wasn’t less than 5%, maybe it’s 10% but not enough to sustain the price increases we’ve seen.

Now what? 90% of deals written by locals (from all backgrounds) to speculate on vast amounts of fresh capital to arrive in Vancouver. That’s all.

Capital is drying up and analysts are saying the Yuan deval. is done. Yuan deval. was largely responsible for the run up in YVR prices this Spring.

http://www.bloomberg.com/news/articles/2016-07-18/yuan-s-best-forecaster-says-this-currency-slump-is-close-to-over4

“Yuan’s Best Forecaster Says This Currency Slump Is Close to Over”

YVR has peaked. Garth is right. Get out if you still can. Seems that buying interest has already left town…

Crash is prolonged but prices won’t rise and inventory will start to increase.

Now we learn that even Chinese media is telling their readers to get out.

Could be a slow melt.. could be a stampede… do you want to wait to find out?

#118 Madcat on 07.19.16 at 6:32 am

3 AB Boxster on 07.18.16 at 7:39 pm
Recent article I read said that the computing power in a smart phone is 1 million times more powerful that NASA’s computing power when they landed on the moon.

And they are being used to search and capture imaginary beasts that don’t really exist, for no particular purpose other than its ‘really cool’.

The world is doomed.”

– All I know is that my kid downloaded this game and immediately started running around outside trying to fund Pokémon with his buddies…

RUNNING OUTSIDE with BUDDIES. No complaints from mom about this game yet….

#119 Shawn on 07.19.16 at 6:36 am

Have we reached….

The point of no returns?

John Mauldin just wrote about the age of no returns.

I like point of no returns as a better play on words.

Some have called long government bonds “return-free risk”. Sounds right but it keeps getting worse.

Mauldin told how bank of Japan (not government of Japan) might issue perpetual bonds at these low rates. I don’t claim to understand that but a central bank issuing bonds is like it selling bonds which lowers the money supply rather than increase it. No I think the government might issue the bonds to the central bank which is printing money.

#120 Sharp Pencil on 07.19.16 at 7:02 am

Two things:

1) It’s not immigrants buying multi million dollar houses, don’t get down on legitimate migrants, it’s the crooks who loot government ministries doing that. The crooks don’t care about the price, as long as they can launder as much money safely into Canada as possible as quickly as possible.

2) Obama’s economy is an illusion, the real numbers state the obvious

http://www.cnbc.com/2016/07/18/jobs-and-employment-seven-reasons-the-us-picture-is-still-weak.html

#121 Bottoms_Up on 07.19.16 at 7:34 am

#107 The Spectre on 07.19.16 at 12:36 am
————————————————–
Weak argument in rebuttal of an ad hominem attack. You expected more?

#122 rosie on 07.19.16 at 7:53 am

Donald playing the long con?

https://twitter.com/realDonaldTrump/status/755254384062263296

#123 Willdaman on 07.19.16 at 7:59 am

Now this is interesting:

http://www.ft.com/fastft/2016/07/18/canadas-cibc-issues-first-sub-zero-bond-outside-europe/

“Canadian Imperial Bank of Commerce has sold a benchmark covered bond at a negative yield, becoming the first non European issuer to be paid to borrow from one of the continent’s oldest markets.

The €1.25bn bond pays no coupon and is priced to yield -0.009 per cent. If investors hold the debt to its maturity in July 2022, they are guaranteed to lose money, writes capital markets correspondent Thomas Hale.

CIBC’s bond is backed by Canadian residential mortgages.”

#124 TurnerNation on 07.19.16 at 8:43 am

Got USD? All that matters and making moves lately.

Trump’s running mate said something like He’s got most popularist support since Regan.

That’s right. ..both are Actors.

Distractions while we get robbed.

#125 CJBob on 07.19.16 at 8:47 am

#10 CJ on 07.18.16 at 6:49 pm

https://en.wikipedia.org/wiki/Confirmation_bias
__________________________
Absolutely, and of course it works in both directions. For those who are expecting real estate to continue to rise and those who are looking for signs of a drop (and have been looking for those signs for the past 8 years).

I’m not close enough to the Vancouver market to have an opinion. The signs I see in Toronto in the single family home market continue to point to a very tight market with few listings and many buyers looking to get in the market.

I went to Ribfest in Mississauga on the weekend and the number of people was incredible. Growth continues and I’d recommend buying close to the Go Train or other forms of transit. Traffic is getting worse by the day and there is no reason to believe it’s going to get any better.

#126 Ace Goodheart on 07.19.16 at 8:50 am

Just had a rather interesting experience that I thought I’d share with the fools and the blog dogs. Paid off the mortgage on one of the properties that we own. First time we ever did this, so took a trip over to the bank to see what was involved with removing the lien from the title to the property.

Well, that was an experience. I am wondering if anyone actually ever does this? We were received, with this request, like aliens from another planet asking for some unknown element. It was like we were speaking a language no one could understand.

I had to visit two branches of the same bank. I spoke to six people in total. I went through underling after underling, starting always with tellers (who had no idea what we wanted to do and one who even indicated it was not possible to do it), had a heated discussion with a mid level person who indicated that when the mortgage was paid, the bank not register a discharge on title, and would keep the mortgage on the title “just in case” we wanted to borrow more money at some future date.

I know a bit about law, so I was actually laughing to myself that this bank was setting itself up to be sued, as if a person pays their debt to you, with interest, in full, then you decline to release the lien from their property, you are liable for damages.

At any rate, after many discussions with many different people, each having no idea what we were trying to do, and each trying to convince us (when they did figure it out – ie, we want the mortgage registration off of our land) not to do it, for various reasons, we finally found someone who was willing to send an email to a head office somewhere and request a discharge of the mortgage from the title. We were told it would cost $370.00 to do this, + any accumulated interest (which was weird, because the balance owing is $0.00).

I am pointing this out, not as a complaint against banks, but to make an interesting point – it would appear that what we tried to do (and successfully did) is something that the people who work at banks have almost no experience with.

This would lead me to believe that almost no one is actually paying off their mortgages? I mean, they really had no idea. It appeared to be a request that they received so seldom, that no one at the bank even knew how to handle it (like I said, at one point, by refusing to register the discharge even though the loan had been paid in full, they were setting themselves up for a law suit, and they didn’t seem to even realize this).

We live in a weird, weird world. The more I dig into life each day and the older I get, the more I start to see it.

At any rate, happy mortgaging to all!

#127 IHCTD9 on 07.19.16 at 9:29 am

So I concluded:
(a) people will believe whatever they wish to be true about others and
(b) the hell with them.
________________________________________

^ The secret to winning at life, also a symptom of age wisdom, and adequate Vitamin B12 production.

#128 Ole Doberman on 07.19.16 at 9:33 am

Check out this latest Vancity beauty, only $4M:

http://www.rew.ca/properties/R2091716/2128-w-21st-avenue-vancouver?property_search=406138025

Strange thing about these is they only have one picture and hardly a description. Is this due to the high expectation of selling with hardly any effort – or are they just gambling on finding a greaterfool?

#129 Derek R on 07.19.16 at 9:47 am

#72 Andrew Woburn on 07.18.16 at 9:43 pm wrote:
Money is nothing more or less than a claim check on the goods and services you can buy with it. On a global basis, the worth of all the money in the world at any point in time must be exactly equal to the market value of all the assets and services it could buy at that point.

Almost but not quite. Money is a claim check on the goods and services you can buy with it plus a cancellation ticket for the existing debt that you can pay off with it. So on a global basis, the worth of all the money in the world at any point in time must be exactly equal to the market value of all the assets and services it could buy at that point plus all the debt that it could pay off at that point.

As it happens banks increase the amount of debt at the same time as they increase the amount of money when they issue a loan, so while the loans may cause inflation in the short term, those same loans cause deflation in the long term, leading to the situation that Shawn pointed out in comment #115.

#130 IHCTD9 on 07.19.16 at 9:50 am

#4 Afraid To Sell on 07.18.16 at 6:39 pm
Folks,
I’ve posted before…late stage Gen Xer, good job, bought in North Vancouver in 2000 for $395 K, really haven’t done much to upgrade the house. Its old and kinda tired recently had it appraised at $1,950 K. Kids walk to great schools, we walk to a nice shopping area, tons of dog trails…But I know selling for $1,950 K is like winning the lottery! Just can’t get it done…
___________________________________________

Good Grief man, sell and retire. Dog trails and walking to shop is worth zip, your kids can take the bus like 10 million odd other kids do.

Be a fool if you must, you’re living in an old, beat house, the problem is you think it is actually worth 1.9 (maybe more).

The sooner you realize it’s not worth anywhere near 1.9, the closer you are to becoming an actual real millionaire (limited time offer).

One chance in a lifetime buddy, blow this one and you’ll never see anything like it again.

#131 CJBob on 07.19.16 at 9:51 am

#126 Ace Goodheart on 07.19.16 at 8:50 am

This would lead me to believe that almost no one is actually paying off their mortgages?
________________________________
I wouldn’t agree with the conclusion. I paid off my mortgage two years ago and have a document from the Blue Bank indicating it was paid. I kept that and haven’t done anything else and I suspect 99% of people don’t either.

#132 Alberta Ed on 07.19.16 at 10:02 am

It’s difficult to take seriously anything you read, see or hear from any media source these days. Single-source reporting, as long as it complies with the current meme (‘climate change’ seems to be the topic de jour) is the rule; forget about fact checking or consulting other sources. MSM is struggling to survive, and no wonder: it’s no longer even remotely credible.

#133 Julie K. on 07.19.16 at 10:15 am

Going to buy me a virtual house…in the toniest hood of Vancouver.

When I feel the need, I can turn on my goggles and mow the lawn, fix the fence, paint the ceilings, fix the roof, upgrade the plumbing — all the homeowner jobs I truly relish.

When I have had enough, well, I simply power down my virtual home and head to my virtual spouse — the one who never needs to watch the NFL, NHL or MLS and I can say “Poke me Man”.

Works for me as all my $$$ stays invested — balanced and diversified earning me more cash flow than I can spend in a month!

I love the future!

#134 gonkman on 07.19.16 at 10:21 am

#126 Ace Goodheart on 07.19.16 at 8:50 am

This would lead me to believe that almost no one is actually paying off their mortgages?
________________________________
I wouldn’t agree with the conclusion. I paid off my mortgage two years ago and have a document from the Blue Bank indicating it was paid. I kept that and haven’t done anything else and I suspect 99% of people don’t either.

————————————————-

It is messed up that the bank didn’t want to discharge the mortgage. That is what is supposed to happen when their is no more lien on the property.

When you pay a car loan off you get a Lien discharge showing you it is paid off.

I had the same experience when I paid off our mortgage 2 years ago. I guess they don’t get many people.. let alone 40 year old people paying off a mortgage. :)

The tellers had NO idea what to do. After several teller minions couldn’t figure it out the Branch Manager was finally called in.

The Branch Manager got things moving and even waived the discharge fee after all the confusion.

Even the back-end mortgage section they called were clueless. I was paying off the remaining balance which was under the 15% per year maximum and they said “Fees” would be added for early payoff. I got that sorted out as there should be no fees.

Took 2 weeks to finally go through and I received the discharge papers about 2 weeks after that.

CJBob.. ensure you get the discharge done from the City.

If you provide the discharge proof to your Insurance company you “Should” get a discount on your Home Insurance. They give you a discount as now there is only one party to deal with in the event of a major claim.

It lowered my home insurance almost $200 a year. But it depends on the insurance company. My insurance company still gave me the discount even though there is still a Lien in the form of a Secured HELOC against my home.

#135 WalMark of Sadkatoon on 07.19.16 at 10:38 am

The thorn of greed enters quietly until it takes a pound of flesh upon removal

#136 Catalyst on 07.19.16 at 10:40 am

@ #126 Ace Goodheart

Firstly, answering questions on PPSA registrations is not a core function of a teller so I’m not surprised you would get the run around. A teller is there to process your transactions and not give legal advice.

As an experienced banker, I can tell you it is not common knowledge. Typically it is in the consumers advantage to not release the charge on payout so that if they want a HELOC or other facility then you don’t need to pay legal fees again. This has lead to present & future collateral charges being the norm at most banks.

Of course you can have your charge discharged, it is just not a common request to get at a branch. Unless you are switching banks to get a loan elsewhere, then this is usually handled between the banks without payout statements and letter of undertakings to which most clients wouldn’t be aware of the back end of things.

#137 Nelley on 07.19.16 at 10:51 am

#132Ed-many feel that Climate Change deniers such as yourself should be imprisoned for your dangerous rhetoric. Only the truly misguided cannot accept that Goldman Sachs exists only to guide our fragile planet to safety.

#138 Balmuto on 07.19.16 at 10:57 am

CIBC just issued a negative yield bond in Europe. That’s right, the Europeans are paying one of our banks to borrow from them (and the rest will follow I’m sure). These “covered” bonds are rock-solid though – they’re backed by mortgages held on the CIBC balance sheet. Now CIBC can lend out even more!
What a beautiful system. What could go wrong?

http://www.theglobeandmail.com/report-on-business/streetwise/cibc-first-canadian-bank-to-tap-europes-negative-yields/article30960486/

#139 Eks dee sipal on 07.19.16 at 11:13 am

#129 Derek R,
Which ‘banks’ are you referring to here?:
“As it happens banks increase the amount of debt at the same time as they increase the amount of money when they issue a loan…”

We’ve been through this a few times on this blog, and you and Shawn don’t seem to understand WHO is being indebted when money is created.

If you or I issue a loan, are we creating new money? No. The commercial banks and their members have FIRST DIBS on the money created by the central bank. This is something you will not ever address because either you do not understand it or you will not admit it.

Shall we tango further?

#140 Doc Meertan on 07.19.16 at 11:20 am

OH, what BS!!!!

“Developments don’t start until 70% of units have been presold???? What utter craaaaaaaaappppp!!!

http://www.bnn.ca/no-risk-of-1980s-style-condo-bubble-in-toronto-canada-s-housing-agency-says-1.528997

As an ex developer who’s borrowed millions of dollars from the banks I will testify to breaking ground with under 30% of units sold and projected and the rest on COC which was and is the norm. The ‘media’ in Canada really is farcical.

#141 Eks dee sipal on 07.19.16 at 11:21 am

#126 Ace Goodheart
Because you are ‘leasing’ any land from the British Royalty herself: Her Majesty Elizabeth the Second, by the Grace of God, of Great Britain, Ireland and the British Dominions beyond the Seas Queen, Defender of the Faith, Duchess of Edinburgh, Countess of Merioneth, Baroness Greenwich, Duke of Lancaster, Lord of Mann, Duke of Normandy, Sovereign of the Most Honourable Order of the Garter, Sovereign of the Most Honourable Order of the Bath, Sovereign of the Most Ancient and Most Noble Order of the Thistle, Sovereign of the Most Illustrious Order of Saint Patrick, Sovereign of the Most Distinguished Order of Saint Michael and Saint George, Sovereign of the Most Excellent Order of the British Empire, Sovereign of the Distinguished Service Order, Sovereign of the Imperial Service Order, Sovereign of the Most Exalted Order of the Star of India, Sovereign of the Most Eminent Order of the Indian Empire, Sovereign of the Order of British India, Sovereign of the Indian Order of Merit, Sovereign of the Order of Burma, Sovereign of the Royal Order of Victoria and Albert, Sovereign of the Royal Family Order of King Edward VII, Sovereign of the Order of Merit, Sovereign of the Order of the Companions of Honour, Sovereign of the Royal Victorian Order, Sovereign of the Most Venerable Order of the Hospital of St John of Jerusalem.

And if you know of my work, she is aka Lucille Ball.

#142 Lillooet, BC on 07.19.16 at 11:24 am

When a banking or money debate is on, Shawn cannot help but jump in!
Lol …

Still sightseeing in Europe?
Anything special to share with us here?

#143 Capt. Obvious on 07.19.16 at 11:26 am

First time we ever did this, so took a trip over to the bank to see what was involved with removing the lien from the title to the property. … At any rate, after many discussions with many different people, each having no idea what we were trying to do…

Why would you try to do this at a branch? I would call the main number for the bank or get my lawyer to deal with requesting the discharge. I’m constantly amazed at how much time people are willing to put into doing things.

#144 cramar on 07.19.16 at 11:40 am

#57 nonplused on 07.18.16 at 8:45 pm

[snip]

(Yes, all those guys driving black Escalades with spinners on them are dealing. Pull up if you need something. No sane person would put low profile racing tires and “spinners” on an off road vehicle. They are advertising.)

———–

You can see these in Vancouver? YIKES!

I saw the exact same thing many years ago in an American city. Driven by a black dude. Laughed. I thought, Do you know how stupid that looks? Never realized it was a form of social advertising. If you see this in Vancouver, I’m glad than I live elsewhere. Nothing worse than a bad 15-year-old advertising campaign being recycled.

#145 Capt. Obvious on 07.19.16 at 11:40 am

The bond market is saying this is the end. Everyone is giving up and accepting low growth for the foreseeable future, and we’re talking a decade plus. 10 year US TIPS now yield 0.07% and has flirted with negative, and the 5 year is negative (has been since March). This does not bode well for employment.

#146 Andrew on 07.19.16 at 11:50 am

#95 DON

Andrew.

It appears you need to stop spinning the evidence and start listening carefully. Why are you here, on this blog if you disagree and the blog comments are worthless. I wouldn’t waste my time on a so called loser blog. What skin to you have in the game? Housing sentiment is changing. As for the tipping point – it could have already happened. All that has to happen is for one peer leader to get disgusted with prices and decide not to buy and travel the world instead. It’s happened before, sentiment always changes as people look for new adventures. Why are you here?

_____________________________________________

Don’t get me wrong a lot of what Garth says is great information, and taken with a pinch of salt this blog has excellent advice. Before I came here my money was sat in mutual funds and my wife and I were looking at buying a place, now I have a well balanced, diversified portfolio that I manage myself and absolutely no house lust. So, I’ve learned a lot from this blog and am forever thankful for it as it will stay with me for life.

That being said, some of Garth’s views are quite biased and he has views that the average Joe simply does not agree with. When people argue back in the comments section, he simply tarnishes them all with the same brush as fools who believe what they want to believe. I take an issue with that as he is exactly the same, only he has a platform to express his views. There are countless respected professionals out there who do not share Garth’s view of the housing market (notably foreign investment affecting it) yet they don’t ever get a mention in this blog. It’s bordering on propaganda at times and anyone who reads this blog as their sole source of financial information may find themselves indoctrinated to believe everything Garth says as gospel.

Not only that, he has a distinct inability to admit being wrong, and it frustrates a lot of his regular readers as it becomes almost dictatorial. This might be the politician in him coming out. I value his courage in making bold predictions in an unpredictable climate, but he needs to admit when he is wrong from time to time to maintain his credibility. Sweeping things under the rug doesn’t go unnoticed.

Most recently he has been saying for months that Canada would never go to negative interest rates, and now it’s starting to look a possibility he changes his tune to say he meant we would never get a negative mortgage rate. Well duh! Nobody was expecting that.

Overall this blog has great advice and I for sure will keep reading it. However, you need to know when to read between the lines and form your own opinion.

#147 IHCTD9 on 07.19.16 at 12:00 pm

#15 Andrew Woburn on 07.18.16 at 6:52 pm

It also makes you wonder if Ms. Wynne is as dumb as her detractors think to offload Hydro One.
____________________________________________

Wynne is not offloading Hydro One – only 60% of it, which leaves the organization as a horrifying fascist combination of both government and private ownership that just happens to bill out the most expensive line on most folks Hydro bill – and they don’t produce a single KW of power.

This is the worst possible out come, and I expect eventual draconian measures as more and more folks exit the grid over the decades to come. It will probably cumulate in the outlawing of privately held decentralized power production as already seen in some poorer countries in Europe (for the same reasons – at some point the grid would have to fold if too many folks disconnect and stop paying into it).

Buy from the government or go to jail.

#148 Nelley on 07.19.16 at 12:18 pm

#146Andrew-Very accurate summation.

#149 Willdaman on 07.19.16 at 12:26 pm

#146 Andrew.

Lots of muppets on here that take Garth’s word as gospel and don’t think critically for themselves. Don would make a fine right hand man to any dictator, Kim Jong Un might be looking?

#150 TRT on 07.19.16 at 12:32 pm

Kay gets it! This guy has had a solid track record regarding YVR real estate.

“…Kay, by the way, disagrees with me about foreign cash and its impact on the market. He argues it is now the withdrawal of that capital which will cause an unstable, wobbly, entirely speculative pyramid to topple – because it’s not supported by economic fundamentals…”

When HAM dries up, its over.

#151 TRT on 07.19.16 at 12:36 pm

An for the last time people, stop talking about rate increases! Yield curve has flattened and any rate increase will bring the economy to its knees.

More QE coming…hence the rise in US stocks.

#152 Victor V on 07.19.16 at 12:37 pm

CMHC sees no 1980s style housing bubble in Toronto high-rise condo market

http://business.financialpost.com/personal-finance/mortgages-real-estate/cmhc-sees-no-1980s-style-housing-bubble-in-toronto-high-rise-condo-market

“The report did not address speculative investing by individual investors.”

#153 Shawn on 07.19.16 at 12:37 pm

To kill poet

In Iceland airport now on way back.

Obervations:

Switzerland is quite a bit more expensive than Netherlands, Germany and France which we also visited.

Basil was very quiet the place is empty on Sunday’s as shops closed museums also closed on Monday. Zurich was much busier on the Monday but again 4 frank bottles of coke are a bother and eating out very expensive. Yet thousands were eating and drinking on the sidewalk tables Monday night. A beautiful but hot night and not a bug in sight so there was that. Zurick had a lot of cranes so the economy must be good. Also public transit everywhere we went was excellent and low cost. I recommend all inclusive guided tours which was most of our trip.

#154 Shawn on 07.19.16 at 12:38 pm

Above should say in response to lillooet not kill poet…

#155 Victor V on 07.19.16 at 12:40 pm

https://www.thestar.com/news/queenspark/2016/07/19/transit-spending-will-add-50-billion-to-ontarios-net-debt.html

Ontarians will eventually be riding more new public transit lines, but borrowing to pay for them will boost the province’s net debt an extra $50 billion by 2021, to a whopping $350 billion.

Those numbers were released Tuesday in a new report by Ontario’s independent Financial Accountability Office (FAO), which warned the province faces the risk of higher interest rates because of the debt load.

#156 Got It OTT on 07.19.16 at 12:41 pm

MPAC assessments are going in the mail for Ottawa. Last assessments were 2012 – in a city that is highly educated, gov’t employed and has the highest average household income in the country.

Average increase is 3.6% since 2012. Less than 1% a year. Or, for most, no increase at all. Condos are actually down and so are certain areas of the city.

And if you bought since 2012 and must sell now, the realtor fees, HST and closing costs ensure that you take a loss. Throw in mortgage interest and property taxes and it ain’t a pretty picture.

But things are different in Ottawa. We supposedly have the jobs, education, low interest rates, income, and immigration to know the difference.

#157 SquareNinja on 07.19.16 at 12:44 pm

The sign in the photo was obviously made by an old, outdated person, whose idea of a good time is drinking beer at a derelict bar with the other regulars who have no idea about the sea change in the world already at hand.

That said, consuming alcohol is many times a worse affliction than chasing virtual Pokémon could ever be.

#158 CalgaryPokemon on 07.19.16 at 12:47 pm

Rather than complain the owner of the house in the picture, should get his house evaluated through a realtor (to see the increase in the house value because of this…..be sure to mention that there is a pokestop right by the house)

#159 Ronaldo on 07.19.16 at 12:50 pm

#150 TRT

”When HAM dries up, its over.”

When the credit to the speculators dries up, it’s over. That will be soon.

#160 bdwy sktrn on 07.19.16 at 1:09 pm

#105 TRUMP on 07.19.16 at 12:11 am
A 3 bedroom ranch ex-crackhouse for 1.3mil.
Geez….I missed out on another bargain.
—————————-

unless it’s a triple lot or bigger that price is bullcrap.

1.3 in most of MapleRidge still gets you a mansion.

ask price can be any number, of course.

#161 Bram on 07.19.16 at 1:22 pm

#126 Ace Goodheart on 07.19.16 at 8:50 am

Just wow!
Let us know when the lien is finally gone.

And I think you should now also get the title to the house?
Some piece of paper, your bank now holds?
Make sure they give it to you.
It’s YOUR house now, not the bank’s.
Ugh.

#162 Ace Goodheart on 07.19.16 at 1:29 pm

RE: #136 Catalyst

“As an experienced banker, I can tell you it is not common knowledge. Typically it is in the consumers advantage to not release the charge on payout so that if they want a HELOC or other facility then you don’t need to pay legal fees again. This has lead to present & future collateral charges being the norm at most banks.”

That is EXACTLY what the guy I argued with for about 1/2 an hour said. Basically “we don’t release these liens off title to the property because you might want to borrow from us again”. I was like, “if I want to borrow again, then I’ll do what I did the last time, basically go to all of you guys, get rates and then play you off against each other to get the lowest rate. There is no guarantee I’ll come back to you”.

At any rate they are going to release the lien from the property title, with regard to the mortgage that I paid, in full, with interest. Amazing what you can accomplish, when you are persistent. Took the better half of a day, but I managed to remove a paid off lien from the title to a house.

#163 S.Bby on 07.19.16 at 1:54 pm

$8.4M Calgary condo sets three-year price record

Who would be dumb enough to pay $8.4 Million for this in Calgary?

http://globalnews.ca/news/2832533/8-4m-calgary-condo-sets-three-year-price-record/?utm_source=Article&utm_medium=MostPopular&utm_campaign=2014

#164 jess on 07.19.16 at 2:16 pm

Will money become “worthless” in the future?

… imagine a debt jubilee and Trump as the proclaimer lol couldn’t help myself
===========
Born of a Panic: Forming the Fed System

Published August 1, 1988 | August 1988 issue
https://minneapolisfed.org/publications/the-region/born-of-a-panic-forming-the-fed-system

https://upload.wikimedia.org/wikipedia/commons/c/ce/Morgan_cartoon-1.png
The Atlante fund will be made up by private money, reportedly worth €5bn, and will buy up shares and bad debt in struggling banks.

Debt: The First 5000 Years – Wikipedia, the free encyclopedia
https://en.wikipedia.or/wiki/Debt:_The_First_5000_Years
It explores the historical relationship of debt with social institutions such as … In ancient Israel, the resulting amnesty came to be known as the Law of Jubilee.

#165 Snowboid on 07.19.16 at 2:18 pm

#108 Maldroit Ape on 07.19.16 at 1:32 am…

Of the dozen Canadian owners within a two block radius of our Phoenix home, only one couple put their home on the market in the last year.

We almost listed, not because of increased costs, but because of the USD->CAD exchange rate – we did think more of the Canadians would have sold, however.

Of those eleven couples that remain, seven are from Alberta.

Why wasn’t there more sales?

First, the costs of maintaining a home in Phoenix is about 30% less than in the Okanagan, even with exchange factored in. We don’t pay much more to maintain the Phoenix and Kelowna homes combined as we did when we owned our SFH in Victoria. Other costs while we are down there are substantially lower (about 40%) than in Canada, such as food, fuel, booze, entertainment, etc – exchange included.

Second, and likely more important, the choice of spending the winter in the grey Okanagan vs the sun and warmth of Phoenix is a no-brainer!

#166 S.Bby on 07.19.16 at 2:26 pm

#4 Afraid To Sell on 07.18.16 at 6:39 pm
Folks,
I’ve posted before…late stage Gen Xer, good job, bought in North Vancouver in 2000 for $395 K, really haven’t done much to upgrade the house. Its old and kinda tired recently had it appraised at $1,950 K. Kids walk to great schools, we walk to a nice shopping area, tons of dog trails…But I know selling for $1,950 K is like winning the lottery! Just can’t get it done…
___________________________________________

If you want to lose a million dollars then stay put.
Seriously.

#167 jess on 07.19.16 at 2:44 pm

185 homes 16m. in deposits
$60-million in bonds on the Israeli stock exchange

http://business.financialpost.com/personal-finance/mortgages-real-estate/pretty-disgusting-urbancorp-restructuring-leaves-hundreds-of-families-without-homes-or-deposits

#168 Ronaldo on 07.19.16 at 3:08 pm

#157 SquareNinja

”That said, consuming alcohol is many times a worse affliction than chasing virtual Pokémon could ever be.”

But you can do it while you’re chasing a little white dimpled ball in a field of finely cut green grass. How bad is that? At least you’re not going to get run over by a bus or fall into an open manhole while doing it.

#169 Ronaldo on 07.19.16 at 3:14 pm

#165 Snowboid

”Second, and likely more important, the choice of spending the winter in the grey Okanagan vs the sun and warmth of Phoenix is a no-brainer!”

Agree. There is much more to life than accumulating money. If you can afford it, why not. You only get one chance at it as far as I know.

#170 Barb on 07.19.16 at 3:15 pm

Banks are apparently finding innovative ways to make money:

Heard of a 20-something who deposited a cheque from a prospective purchaser of his expensive (~3K) computer equipment.

To his chagrin, the cheque bounced and he was dinged $160 by RBC. When he asked why, RBC replied “it’s interest”.

One good thing: he hadn’t shipped the computer yet.

#171 Freedom First on 07.19.16 at 3:16 pm

#133 Julie K.

Thanks for the laugh! Though in reality, any woman, no matter how ugly, can always find a man. Men just aren’t that bright when it comes to women.

#172 Sean on 07.19.16 at 3:21 pm

http://www.cbc.ca/news/business/cibc-negative-yield-bonds-1.3685259

now what?

#173 Braj on 07.19.16 at 3:33 pm

@ #162 Ace Goodheart on 07.19.16 at 1:29 pm

Yo Ace, in response to one of your previous posts I had inquired into your ‘investing strategy’.. Thought I may have some better luck this time. Copied the post from before below.
——————————————————————–
——————————————————————–
“What people really have to worry about, is that your dollars, your salaries, your income, your savings, are being trashed by governments who are happily borrowing and transferring your children’s and grand children’s and great grand children’s tax dollars (and the value of your currency) to an increasingly smaller group of individuals. That is my big worry, and it drives my investment behaviour. I avoid anything remotely associated with the value of currency (ie, any Western or European currency).”

————————————————————————————–
What kind of investments do you hold? I’m ready to eat up any advice on the issue.

Would you suggest investing in stock market ETFs? Canada / US / International? I’m looking for a more passive ‘set it and forget it’ method I guess..not even sure anymore.
——————————————————————–
——————————————————————–

Insane what it took to pay off that mortgage though..wow. Good on you.

#174 IHCTD9 on 07.19.16 at 3:40 pm

#55 Doug t on 07.18.16 at 8:36 pm
Sooooooo when bozo at bank of canada does cut the rate ( he will) then prices keep going up?
____________________________________________

Yep, until the last quivering Canadian nickel that was never borrowed has finally been sunk into a mortgage obligation.

The final Chapter of the YVR RE lunacy could end up being taught in Universities of Economics and History the world over – alongside the Dutch Tulip mania – for centuries to come.

#175 jess on 07.19.16 at 3:41 pm

Under the proposed new restrictions:

No more than 5 percent of bank lending to residential property investors across New Zealand would be permitted with an LVR of greater than 60 percent (i.e. a deposit of less than 40 percent).
No more than 10 percent of lending to owner-occupiers across New Zealand would be permitted with an LVR of greater than 80 percent (i.e. a deposit of less than 20 percent).
Loans that are exempt from the existing LVR restrictions, including loans to construct new dwellings, would continue to be exempt.

These proposed new restrictions would take effect on 1 September 2016 and simplify the LVR policy by removing the current distinction between lending in Auckland and the rest of the country.

Mr Wheeler said: “The drivers of the housing market strength are complex and action is required on many fronts that extend well beyond financial policy. Broad initiatives to reduce the underlying housing sector imbalances need to remain a top priority.

“A sharp correction in house prices is a key risk to the financial system, and there are clear signs that this risk is increasing across the country. A severe fall in house prices could have major implications for the functioning of the banking system and cause long-lasting damage to households and the broader economy.

http://www.rbnz.govt.nz/news/2016/07/reserve-bank-consults-on-new-nationwide-investor-lvr-restrictions

#176 Nelley on 07.19.16 at 3:56 pm

#155Victor-to put that 350 billion into perspective-population of Ontario is 13.6 million-lets estimate 20% have any real money at all-that is 2.72 million Ontarians-each one of these is on the hook for $128700 just in provincial debt-not even discussing federal and municipal.

#177 Lillooet, BC on 07.19.16 at 3:57 pm

#154 Shawn on 07.19.16 at 12:38 pm
Above should say in response to lillooet not kill poet…

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

Shawn’s Europe vs Steve’s Europe …

#178 CJBob on 07.19.16 at 4:04 pm

#172 Sean on 07.19.16 at 3:21 pm
now what?
__________________
Garth said to avoid GIC’s but I just got 1.4% on a 1 year term with the orange guy. I might need the money next year if I decide to redo the kitchen. Seems a reasonable amount to me given the short term bond funds aren’t doing much better and could easily do worse over the next 12 months.

1.4%? Seriously? — Garth

#179 James on 07.19.16 at 4:17 pm

Nope not YVR at all.
Ah ha Smoking Mans shit bungalow home finally located in Long Branch! Now wheres his broken down pickup truck with a cracked windshield. Oh yes and dogs, he said he has dogs. They must be junkyard dogs?

#180 cramar on 07.19.16 at 4:26 pm

#126 Ace Goodheart on 07.19.16 at 8:50 am

————–

Fascinating tale! I suspect you are right that almost nobody pays off their mortgage anymore. Many boomers I know own their own pads outright, but the mortgage was paid off many years ago. Probably a small percentage of bank clients would do this in the past, when it was more common.

And when you downsize and buy a house for cash, there is no mortgage registered against the property, so this is not an issue.

#181 Renting in YVR on 07.19.16 at 4:27 pm

Ok everyone, after you sell your house and starting renting a place, make sure you DO NOT sign a lease agreement with a Fixed Move-Out date:

http://www.cbc.ca/news/canada/british-columbia/west-end-apartment-owners-using-loophole-to-jack-up-rent-say-tenants-1.3199432

The renter in this story was unaware he signed an lease with a fixed move-out date. After the lease had expired, he was forced to either move out as per the agreement, or sign a new lease with a 20% increase.

#182 Rat on 07.19.16 at 4:39 pm

DELETED

#183 Rinse and repeat on 07.19.16 at 5:23 pm

Vancouver real estate prices (Vancouver) hide this posting
Poster is correct, there is no “real estate bubble”.
1) The Vancouver and lower mainland is playing catch-up value wise to other world class cities (or at least, wanna-be-world-class-cities).
2) Thank 80’s Socreds for exposing “us” to the world at Expo 86.
3) Thank Campbell’s fake Liberal party in the 2000’s for 2010 Olympics for exposure part two!
4) The rest of Canada wants to live here. (Everyone from rich to homeless, we take ’em all).
5) Countries like China are destroying the homeland and need new territory to destroy.
6) BC’s reasonably stable lifestyle is a magnate to people who currently live in inhospitable countries.
7) Lower income people move out to allow wealthier people to move in. It has happened all over the world.
Now it is our turn.
You have your photos and memories of the past. Cherish them because they are forever gone.
Next up… Aldergrove!!!

#184 Jenn on 07.19.16 at 5:26 pm

“The final Chapter of the YVR RE lunacy could end up being taught in Universities of Economics and History the world over – alongside the Dutch Tulip mania – for centuries to come.”

Nope. There a lot of politicians, bureaucrats, and real estate developers who are winning the lottery right now. The wage slaves are too dumb and busy to notice.

#185 Sold on 07.19.16 at 5:32 pm

I own 2 detached houses in East Vancouver – no mortgage on the principal residence and a moderate sized mortgage on the investment property. I sold my 4-year-old principal residence in March. I have security cameras around the perimeter of my house. Of the 150+ families that dropped by for the open house and the 10+ offers (it was sold in 2 days), 95%+ are local Chinese. I am ethnic Chinese so I can tell the difference between a FOB from mainland China and a local Chinese Canadian.

I don’t want to renovate and move into my investment property (30+ year-old). I had been talking to my Indo-Canadian builder. He along with many of his builder friends in Vancouver each own about 4 to 10+ properties, most with zero down. This essentially pulls the demand forward and artificially constrains the supply.

While I am not flushed with wealth like these Indo-Canadian builders, I certainly have the cash to buy. My dilemma is – should I be stupid to wait or idiotic to jump in now? What I do know is that many of my elderly relatives are using their house equity to buy condos in Vancouver, one of my young nephews with modest income fudge his income and bought 2 houses, etc. My elderly relatives may have Alzheimer’s and my nephew would have never experienced a prolonged real estate down turn. I am in my mid-40s so I remembered what my parents went through in the early 80s.

Are the Chinese buying? Sure – local ones. Are these foreign Chinese? You can fabricate or believe in that if that is what you were hoping for. I have to pay 6-figure income tax so no, I do not have the luxury of owning a multi-million dollar house while declaring no income to get free community center membership, free public schools for my kids, etc.

Say what you want. I am sitting pretty so I can afford to just state the facts. But I sure like the news media that says the prices gone up 36% in June. Either they got an A+ in Kindergarten math where they can’t tell the difference between annualized gain from monthly gain, need to sensationalize the news to get eye balls, or need to comfort themselves after jumping into the market the past year.

Warren Buffet said – you only truly know who is naked when the tide goes out. Within a year or so, I should find out if I am stupid or an idiot.

#186 dsw on 07.19.16 at 5:37 pm

@178

1.4% is pathetic.

Why not something like ZCS? It is pretty stable, and throws off 3.29% And, you aren’t locked in for a year.

I mean, what if a buying opportunity pops during that lock in period?

#187 Elise on 07.19.16 at 5:46 pm

It’s cracking already in the USA, the ultra rich segment in NY area is starting to go down the toilet: http://www.zerohedge.com/news/2016-07-18/hamptons-housing-market-has-crashed-luxury-home-sales-drop-half-prices-plunge

#188 CJBob on 07.19.16 at 6:50 pm

#186 dsw on 07.19.16 at 5:37 pm
@178

1.4% is pathetic.

Why not something like ZCS? It is pretty stable, and throws off 3.29% And, you aren’t locked in for a year.

I mean, what if a buying opportunity pops during that lock in period?
____________________
I have other cash for investing and past performance is not a guarantee of future….with rates absolutely dropping like a stone. 1.4% in 6 months may look amazing, or not, but I’ll sleep well at night.

#189 nonplused on 07.19.16 at 8:16 pm

#144 cramar

You are probably right the spinners have pretty much gone away. However they are likely using a new advertising method that we aren’t on to yet. It could have been tattoos for a while but now everybody has them so that can’t be it. But there is something. People “in the culture” always know how to find each other.

In my day there was a secret spot in the trees on the Fernie ski hill which strangely even had a picnic table. That’s where the “420” crowd would meet. Someone lead me in but I couldn’t tell you where it was or if it’s still there now.

There is always a somewhat secret way of communicating for such things. Spinners may have been 15 years ago and then the cops figured it out but I guarantee they have a new signal now.

Same as when I was young unmarked white box vans always seemed to have really good deals on stereo equipment.

#190 };-) aka Devil's Advocate on 07.20.16 at 5:44 pm

#165 Snowboid on 07.19.16 at 2:18 pm
Of the dozen Canadian owners within a two block radius of our Phoenix home, only one couple put their home on the market in the last year.

We almost listed, not because of increased costs, but because of the USD->CAD exchange rate – we did think more of the Canadians would have sold, however.

Of those eleven couples that remain, seven are from Alberta.

Why wasn’t there more sales?

First, the costs of maintaining a home in Phoenix is about 30% less than in the Okanagan, even with exchange factored in. We don’t pay much more to maintain the Phoenix and Kelowna homes combined as we did when we owned our SFH in Victoria. Other costs while we are down there are substantially lower (about 40%) than in Canada, such as food, fuel, booze, entertainment, etc – exchange included.

Second, and likely more important, the choice of spending the winter in the grey Okanagan vs the sun and warmth of Phoenix is a no-brainer!

On THAT we agree, albeit difficult to snow ski in Phoenix and the Okanagan (from Baldy to the ‘Stoke) does offer some of the very best worldwide.

#191 };-) aka Devil's Advocate on 07.20.16 at 6:09 pm

My position is simple: of course offshorers influence some prices in Van or Toronto, but not enough to move the entire market. Instead, it’s locals who do that, hopped up on cheap money, fueled by FOMO and whipped into a speculative frenzy by Global, the Globe and an army of hungry realtors. G. Turner

While I agree “whipped into a speculative frenzy by Global, the Globe and an army of hungry realtors”, on the offshore influence… it is bigger than you know and, while a political and “social convention” hot potato, the grass roots of what is pushing lower mainland BC prices, so much so it is forcing people out of their hoods into others, like Kelowna, which is in turn forcing those people out of their ‘hoods.

We’ve got a pretty good gig here in Canada. We live in a virtual Disney Land. Sure Phoenix is great for Snow Birds but… Sure Tuscany is beautiful. Sure, Mexico is awesome too. But really at the end of the day where woud you rather live? So too is it with much of the other 7 billion bodies on this planet. It all comes down to supply and demand.

Trump gets in it might not matter so much anymore so enjoy it while we’ve got it my friends.