Vicious

BEWARE OF DOG

It’s now a month since I issued the latest (and last) ‘get out’ warning for homeowners in Delusia, aka YVR. Let’s review what’s happened since then.

But first, why (in early July) did I tell you the Van market was about to roll over?

Here was the warning on July 11th:

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

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

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

That evidence, presented at the time, was bountiful. Detached home sales were plummeting – even before the Chinese Dudes Crash Tax was applied by an accident-prone provincial government. The number of deals tanked by 8% from May to June. The decline was 30% in Burnaby, 28% in Richmond, 26% in East Van and 35% in the west. I asked: Does this look healthy to you?

Meanwhile the sales-to-list ratio was plunging, a barometer of supply-and-demand which was flashing yellow. In early July it was at the lowest level in three years, toppling from a peak of 83% in March to 59% during the summer. In the east end of town, it plopped from 86% to 49% and in the west from 82% to 46%. Ill winds were blowing.

And more: RBC’s affordability survey showed families being crushed, with over 100% of net income required to afford the average home even with a 25% deposit. Your city is an accident waiting to happen, this pathetic blog said. Get out.

And more: fewer jobs, as 40,000 full-time positions were being lost, replaced with thirty thousand part-timers. The national labour stats were turning in April and May as the economy stuttered in the wake of the Fort Mac fires, trailing trade numbers, weakening dollar and volatile oil. In July, they hit fail.

How could it not have been obvious a month ago, and earlier, that this gasbag was ready to blow? Prices wobbled higher on thinning trade, with fewer market participants, an abrupt end to multiple offers and a withering of interest at the top end of the market. Of course, all of this was being cleverly masked by the Greater Vancouver Real Estate Board which publishes headline-grabbing year/year price stats and attempts to fool the mainstream media. It works. Month after month. That’s what an engineered Frankenumber is supposed to do – keep consumers blind to key trends.

Well, since then things have (predictably) fallen off a cliff. The BC 15% levy on Chinese buyers (the new head tax) was the final straw. The market is now in serious trouble. It’s not so much that foreigners have dissipated, but that FOMO has. Remember that over 90% of all transactions in Vancouver are local-to-local, but that the irrational fear of missing out had driven these folks into a debt-snorfling, buy-now-or-buy-never frenzy. So when people think the Chinese dudes have departed (thanks to the tax), they back off, join the sidelines and wait for the market to fall. So it does. Even more than it already was.

Real estate is the most volatile and emotional of assets. This should give you all the proof you need that people create bubbles. Economies never do. And everyone will pay a price for this gaseous Godzilla.

Days ago I gave you Zolo’s report on the market, which the MSM has since picked up and spread widely. Here’s the latest summary of Vancouver detached houses. Ouch. Down 21% in a month, and now down 9% over the year – just weeks after the realtors told us it was up 32%.

SUMMARY

And here is a chart showing average sold prices in Vancouver. This is exactly why it made utter sense for anyone with a windfall gain in YVR to be cashing out of that market over the past year. Nobody ever gets creamed by selling too soon.

SOLD CHART

Prices are down 18% in Richmond in a month. They are negative 22% in Burnaby over the past 90 days, while North Van houses have given up 10% so far. Over the whole region, there was a drop of 19% in sales last month, even before the tax took place. Richmond sales are down 96% and in Burbaby it’s a 95% collapse. As this blog also told you, the sales/list ratio went from over 100% before July 25th to just over 50% two weeks later. In the first two weeks of August, total sales in the west end fell by 94%, to just three.

In a word, it’s freefall. The average detached house is $300,000 cheaper than it was at the peak, with more to come. How much more is an open guess. Count on lots.

TOTAL SALES

Finally, this is not just a Vancouver story. With real estate-related activity now adding up to 20% of the national economy – more than energy and all manufacturing combined – a collapse in YVR will have national implications. “Over-reliance on the real estate market is hardly the sign of a healthy economy,” TD economists said this week.

Of course, nobody in Toronto believes it. But it’s time to get out there, too.

159 comments ↓

#1 BOOM! on 08.19.16 at 5:57 pm

West Coast real estate Beavers losing their teeth!

film at 11….

#2 racoon on 08.19.16 at 5:59 pm

Hm, I live in Burbaby.

#3 Bram on 08.19.16 at 6:03 pm

I believe it when I see it on Teranet HPI.

Until then, no confidence in Zolo with their price avg over SFH+Townhome+Condo combined.

#4 F.dover on 08.19.16 at 6:03 pm

Garth right.
Multi-million dollar SFH wrong.

#5 Johnny D on 08.19.16 at 6:04 pm

I hope this real estate mania, Garth’s millenial millionaires and countless other misrepresentations by the media and outright lies finally gets people to question what they hear and see in the news everyday. Too much B.S. out there.

#6 Holden Muhkok on 08.19.16 at 6:06 pm

2nd????

#7 LJ on 08.19.16 at 6:11 pm

You can distinctly hear the “Fat Lady” warming up to sing, over in the direction of stage left.

She will be striding onstage for her performance soon…

Should be a great show!!!

#8 Interstellar Old Yeller on 08.19.16 at 6:12 pm

Of course, nobody in Toronto believes it. But it’s time to get out there, too.

I couldn’t suppress an “ooh!” upon reading that pronouncement. Dramatic times ahead, in Toronto? This should be educational. (At the very least, maybe people will stop asking me when we’re buying a house.)

#9 dosouth on 08.19.16 at 6:14 pm

Here on the BC Isle, a neighbour just sold his “on the water” (cliff) for $359k over assessed value. Single mother just divorced snapped it up…..there is no explaining common sense – must have been a really good settlement….

#10 Victoria Real Estate Update on 08.19.16 at 6:15 pm

It’s no secret that oodles of celebrities, athletes, etc. choose to live in Florida (all over it actually). It’s all about the lifestyle. Florida boasts year-round warm weather and beautiful beaches with warm water. It’s no wonder so many rich people choose to call it home.

Link # 1
Link # 2

With Florida being such a desirable area for American and international celebrities, why is it that house prices there are so much cheaper than in Canada?

The answer is easy: Canada has a massive housing bubble. House values in the Great White North have been inflated by lax lending standards that have been poorly enforced, allowing mortgage fraud (CMHC doesn’t verify income on mortgage applications).

Below are examples of houses in Florida that have the following characteristics:

* Minimum 1,600 sq. ft. of above ground main living area
* Minimum 3 beds, 2 baths
* 2006 or newer
* Attached double garage

What do Americans pay for a house like this in beautiful Florida?

$124 K, Lehigh Acres, FL (Cape Coral, Fort Meyers)

$153 K, Jacksonville, FL

As I’ve said, Canada has a massive housing bubble that extends from coast to coast.

You sure can’t find a similar house anywhere near those prices in Humboldt, Saskatchewan. What do Canadians pay for a similar house in this small prairie town?

I went through some listings in Humboldt and this appears to be the least expensive home that satisfies the above criteria, although, at 1,258 sq. ft., it is significantly smaller than either of the two Florida homes.

(google the entire next line to view the listing)

$349,000 – 702 7 Street, Humboldt, SK

So Canadians pay more than twice as much for a smaller home in a tiny prairie town with cold winters than Americans pay for bigger homes in beautiful Florida, with its warm winter weather and stunning beaches.

Canada’s housing bubble is indeed massive.

#11 Smartalox on 08.19.16 at 6:30 pm

Look for a dead cat bounce sometime before the end of the year, as the first wave of dry powder picks at ‘bargains’.

The real pain will come when the spring market fails to materialize.

My wife has relatives who are trying to sell and downsize their chipboard palace outside Atlanta. They’ve been complaining about their lack of progress, and grumbling about having to reduce their asking price.

I was too polite to ask for specifics, so instead, I went to Zillow for a look see:

Their initial ask: $600k
Their reduced ask: $589k ($11k drop)
Zillow’s estimate: $561k (!)
Days on Market: 101

They paid (2006): $575k
Note that this was in the run-up to the crash in 2007.

Oh, and their home is one of over 100 on the market, in a 5-mile radius. One of the most expensive.

This is a fifty-something couple, putting three kids through college, without much of a plan for retirement.

THIS is the sort of thing Vancouver has to look forward to, only with all dollar figures DOUBLED.

#12 Context on 08.19.16 at 6:37 pm

Historically the ride down might hesitate but don’t buy as this is called a false bottom. This is going to be one very long ride until a real bottom hits. Memo to all the losers: You should have sold sitting back in a rental apartment counting the dividends but too late now, so enjoy the ride.

#13 Self Directed on 08.19.16 at 6:39 pm

#2 Bram on 08.19.16 at 6:03 pm

I believe it when I see it on Teranet HPI.

Until then, no confidence in Zolo with their price avg over SFH+Townhome+Condo combined.
———————
The comparison is YoY to the same sales mix. What don’t you understand? Confidence will get you creamed.

#14 paulo on 08.19.16 at 6:42 pm

2 points on the yvr call garth double or nothing that yyz 416/905/705 see the same fate in 60 days?
i am thinking the party is over and the hang over will be very painful, on the brighter side the weather is great last weekend before we get back to school in Ernest have a great one one and all

#15 not 1st on 08.19.16 at 6:43 pm

#5 Victoria Real Estate Update on 08.19.16 at 6:15 pm

—-

Next time do a little more home work, like looking into what Americans pay in property tax and capital gains.

Keeps a serious lid on things when you have a $20k property tax bill and pay 30% tax on home proceeds.

Nothing to do with location or weather.

#16 buzzbombas on 08.19.16 at 6:48 pm

#4 Victoria Real Estate Update on 08.19.16 at 6:15 pm
It’s no secret that oodles of celebrities, athletes, etc. choose to live in Florida (all over it actually). It’s all about the lifestyle. Florida boasts year-round warm weather and beautiful beaches with warm water. It’s no wonder so many rich people choose to call it home.
———————————–

Don’t forget the zika mosquitoes…they really enjoy it there as well, especially Miami Beach where they can buzz amongst the celebrities and gliteratti and spread the love(and virus)

#17 For those about to flop... on 08.19.16 at 6:53 pm

I just got back from taking my wife to physio and grocrery shopping,pretty mundane day really.

Or as Ryan Lochte would describe it…

My wife was forced to lay down on a table ,remove some clothing and beaten to a pulp which our assailants removed $75 from my wallet.

We were then driven to a grocery store and after being forced to overpay for half rotten food at gunpoint we escaped on shift change.

I can’t even tell you what Starbucks did to us….too graphic…

M42BC

#18 Pepito on 08.19.16 at 6:55 pm

Actually, the data you have posted here today re the 96% and 95% callapse in sales for Richmond and Burnaby, respectively ,indicates that you were probably wrong regarding the influence of foreign buyers on the Van market especially in view of your previous posting some time ago showing that both Richmond and Burnaby had the highest percentage of foreign buyers… much higher than the 10% you continue to quote. Certainly looks like correlation at the very least.

Not at all. It’s the fear of foreign buyers that moves the market more than the buyers themselves. You are mouthing exactly that. — Garth

#19 MSM-Free Zone on 08.19.16 at 6:57 pm

“…..A realtor who worked at a firm under investigation by the Real Estate Council of B.C. has filed a lawsuit against her former employer, alleging New Coast Realty pressed her to engage in the “blatantly unethical” practice now known as shadow flipping and then withheld more than $240,000 in commissions after she refused……Ms. Yu said Mr. Wu also spoke with her and other realtors about enhancing their commissions. She said he told the realtors to assign contracts to “friendly” buyers so they could obtain two commissions on a single deal…..”
_________________________

Always gratifying to witness the unethical being eaten by their own offspring.

http://www.theglobeandmail.com/news/british-columbia/bc-real-estate-firm-under-investigation-is-sued-by-former-agent/article31462252/

#20 pathcontrolmonk on 08.19.16 at 7:02 pm

With JT opening up half a dozen visa centers in China, and promising 400,000 “student” visas/ year to citizens of that same country, perhaps the bubble will never pop…

#21 Dan on 08.19.16 at 7:03 pm

Thank god. It’s about time this gasbag blew up. How about Canadians talk about something other than real estate for change.

Seriously, try going 1 day without talking about real estate.

Talk about the weather, something fun you did the other day. Talk about the olympics but don’t bring up real estate for a day. Bet you can’t.

Wonder why it’s such a mess now?

FOMO, real estate sponsored news 24/7 and policies to hook every sucker into a massive mortgage and debt servitude. I hope it ends. I’ll be a nice change.

#22 Victoria Real Estate Update on 08.19.16 at 7:05 pm

It’s already too late for hundreds of not thousands of recent Vancouver buyers to get out within taking a substantial loss.

By getting out now they would lose a lot more than just their down payment.

When they bought they were convinced that they had secured future financial security. That smugness will disappear as they learn the truth about Vancouver’s price plunge.

What they own is massive amounts of debt on properties that are losing astonishing amounts of value each day. In Vancouver there is no bottom in sight. After 16 years of bubble inflation, many would argue that Vancouver’s market correction will be one for the record books.

As I’ve said many times, Canadians will learn the same lessons that Americans did. No Canadian city will be an exception.

#23 Frank on 08.19.16 at 7:07 pm

Lol, VREU is a clown.

“Florida has nice weather, therefore I can predict home values in Canada. It’s the most popular place and economic powerhouse of America because people with names you’ve heard of live there, here’s two random links to prove it”

It’s warm in Costa Rica too, why don’t you compare property there. Equatorial Guinea too.

Notice how real economists talk in terms of inventory and sales volume and you make ASCII graphs. You’re a boob. Make a prediction with a time and a number.

#24 FOMO turning to FOND on 08.19.16 at 7:09 pm

Fear Of No Deal

SM laid it out yesterday. Perception became reality.

Perception was that a sucker was born in China every minute who would overpay for RE in Vancouver.

Instead it is a local phenomenon. Radical financing and unadulterated lust for debt.

There are bag holders who bought at the top in the last 3 years. These things take time to unwind…..

Realtors, mortgage brokers, builders and so on as part of one family trading properties amongst themselves up and up and up until selling to an outsider … the greater fool.

It’s hard to comprehend and even harder to track.

Vancouver RE is a gigantic pump and dump.

Good luck trying to get out with a clean shirt.

Garth’s advice to “Get Out” actually came 6 months late. But better late than never.

July was not the first time I warned. — Garth

#25 Jhan Bhaia on 08.19.16 at 7:10 pm

Are we as close to an impeding collapse in Toronto? No crash tax here.

#26 Context on 08.19.16 at 7:16 pm

#4 Victoria Real Estate :- Ah if only I was younger with an adventuresome wife in hand we would buy a mansion dated 1865 which is fully updated. Taxes are $1366 per year with 5 bedrooms plus a den and too many rooms to detail here. A bit of money might be spent on the 3rd floor with two rooms 14×14 or put them together. This town is a tourist attraction and would be the perfect B&B or maybe a museum that serves lunch. No pictures of the full basement as who wants to see the old dungeon. Asking: $75,000.

#27 fleabitten monkey on 08.19.16 at 7:18 pm

Then you have Tsur Somerville saying it’s a really bad idea to use the actual averages to draw any conclusion because the “high end” home sales may have been coming down which skews the averages. Is there any data mining anyone has done to determine this is or is not a factor in moving from 1.5 mill to 1.1 mill in YVR? This is a logical question and if it really is the case that roughly the same mix of sales is observed at 1.5 mill as with 1.1 mill averages, it’s far more scary and it needs to be known.

#28 Corban on 08.19.16 at 7:19 pm

I feel sorry for the people left holding the hot potato.

#29 Millennial905er on 08.19.16 at 7:19 pm

50% of me feels compelled to call this blog out for making this claim since 2011… But seriously, who is saddling themselves with million dollar mortgages? Hubs and I bought a modest detached for 360k back in 2010, our debt to income is still not a great 1:1… (combined income of 180k & we owe 180k on the house, planning on paying off in next 7 yrs). A big part of this situation has to be money laundering! There is no way someone in our position is buying a million dollar home…. Right?!

#30 conan on 08.19.16 at 7:20 pm

Who is the guest blogger tomorrow? Is it Smoking Man?

I read your first chapter Smokie….. I read the whole thing, which means it is not crap. Thought I would say that cause some comments have been unduly harsh IMHO.

Stop drinking you frickin moo-ron.

#31 Brazil ex-pat on 08.19.16 at 7:23 pm

RE FINALLY begins to fall in YVR – now that all the evidence is in.

And yes…..can’t wait for Smokey’s book. Sounds like it will be kind of like The Hangover.

#32 JuliaS on 08.19.16 at 7:27 pm

The problem is that if the houses in Van deflate below 1mil they’ll, once again, be eligible for CMHC coverage. That’s where the real bottom lies – at the $1 mil mark. Every house that breaches that waterline becomes a taxpayer liability.

#33 S.Bby on 08.19.16 at 7:27 pm

In Burnaby, detached house values are dropping by anywhere from $600 to $800 each day.

#34 Smoking Man on 08.19.16 at 7:28 pm

#29 conan on 08.19.16 at 7:20 pm
Who is the guest blogger tomorrow? Is it Smoking Man?

I read your first chapter Smokie….. I read the whole thing, which means it is not crap. Thought I would say that cause some comments have been unduly harsh IMHO.

Stop drinking you frickin moo-ron.
…..

Kissed and slapped in the face at the same time..

#35 common sense on 08.19.16 at 7:29 pm

#17 Flopper

Glad you made it back alive!

Garth: Do you see small town Ontario taking a big hit, where prices have only increased around 30% the past 4 years with a majority of buyers have come down from Toronto ?

#36 pathcontrolmonk on 08.19.16 at 7:34 pm

If this is the start of RE armageddon, cue the whingers demanding to be bailed-out.

#37 Brazil ex-pat on 08.19.16 at 7:34 pm

#24 FOMO turning to FOND on 08.19.16 at 7:09 pm
Fear Of No Deal

SM laid it out yesterday. Perception became reality.

Perception was that a sucker was born in China every minute who would overpay for RE in Vancouver.

Instead it is a local phenomenon. Radical financing and unadulterated lust for debt.

There are bag holders who bought at the top in the last 3 years. These things take time to unwind…..

Realtors, mortgage brokers, builders and so on as part of one family trading properties amongst themselves up and up and up until selling to an outsider … the greater fool.

It’s hard to comprehend and even harder to track.

Vancouver RE is a gigantic pump and dump.

Good luck trying to get out with a clean shirt.

Garth’s advice to “Get Out” actually came 6 months late. But better late than never.

July was not the first time I warned. — Garth
+++++++++++++++++++++++++++++++++++++

China has been buying for 20 years – my friend at the Asian Banking Centre CIBC on Burrard street was their banker.

#38 Dave on 08.19.16 at 7:41 pm

I say we make the head tax 50 percent.

#39 Chaddywack on 08.19.16 at 7:45 pm

Time to buy soon? Last time the YVR market started to correct down in 2009 it was a very very short decline. I missed out on that one.

Also McCallum wants to increase immigration from one country (China) massively so there will likely be enough Chinese new immigrant (and speculative) demand in Vancouver to keep the party going.

#40 How many times must I say it on 08.19.16 at 7:45 pm

I got out. Bought in 2010 for 800k and sold for 2 bangers at the end of June. Is there a prize over and above winning this lottery?

#41 Setting the Record Straight on 08.19.16 at 7:48 pm

In YVR what percentage of the SF housing stock would be sold in a typical year?

What would be the percentage increase in the housing stock each year?

What about condos?

#42 Westvan on 08.19.16 at 7:53 pm

Yes it’s slowed down. Have prices dropped. No.
Take the luxury market out and it’s the same as Calgary .nobody is dropping prices , they want what their BIL got in April. Luxury market skewin averages. It’s still a sellers market. Still multiples bids.

#43 No Bounce & Why Mar. Peak? on 08.19.16 at 7:58 pm

Support Zolo info. since based on MLS real time data but what I don’t get is the Mar. peak?

Since 1980, all past asset bubble bursts due to recession yet in March, cumulative job creation was +33,000 and GDP was +0.3%. Cumulative February numbers were -8,000 and +0.5%, respectively.

Does not seem to be the economic data in March or February to trigger such a rapid price drop in YVR RE. Unless there were many speculators that knew in advance of the Crash Tax and got out in advance at any price?

One thing now is for certain, a bounce is unlikely.

The only large growth sector left in the economy is RE et al. and with YVR out of it, this now only leaves 416 RE holding the bag. Cumulative job creation as of July was -31,000 and cumulative GDP as of May was -0.2%. June/July saw about 110,000 full time jobs lost (replaced only in part by Garth’s McJobs and the “self employed”).

If we were playing with recession for the past 6 months or so, we will be in it now by Oct/Nov if the YVR RE numbers hold true and as Garth warns today, 416 RE not far behind.

#44 mouldyinYVR on 08.19.16 at 7:58 pm

Think the City of Vancouver gives a *** about affordable housing. Read this and weep!

http://www.theglobeandmail.com/news/british-columbia/concord-sues-vancouver-for-trying-to-sell-land-intended-for-low-rise-housing/article31462394/

“Concord sues the City of Vancouver for trying to sell off a piece of land that was originally intended for a low-rise housing project when Concord Pacific turned it more than 20 years ago.
The land 601 Beach Cres. was one component of millions of dollars’ worth of community benefits Concord provided through negotiations with the city as part of the company’s massive redevelopment on the north shore of False Creek.

However, it is now positioned directly across the bridge from………Ian Gillespie’s Vancouver House……marketed as a high-end residence, which is expected to ‘transform’ the neighbourhood.”

(Don’t worry – the neighbourhood’s already been ‘transformed’ – 25 year old condos in this neighbourhood go for $1,000. per square foot)

“But Concord says that the site, which is made up of half Concord land and half land from another source, was supposed to be used for charitable, community purposes.”

Etc. etc……….worth a read………..

#45 Bram on 08.19.16 at 8:00 pm

#13 Self Directed on 08.19.16 at 6:39 pm
The comparison is YoY to the same sales mix. What don’t you understand?

Instead of accusing me not understanding…
Why don’t you read the zolo website.

I will quote verbatim here for those who have difficulties reading, like you seem to have:


Average price not what you expected? Here’s why.
The change in average home price is affected by two factors:

The proportions of home types sold has changed. This means that the mix of homes sold has shifted from a majority of higher-priced homes to a majority of lower-priced homes, or vice versa.
Assuming the mix of homes is relatively stable, all homes are being sold for more or less than the last period.
For example, if the average price decreased from last year, all homes sold this year were either sold for less and/or the majority of them were budget-friendly condos, rather than expensive single-family homes.

The latter is EXACTLY the case… condos get sold, SFH’s not. Price drops.
The graph is sales mix is RIGHT THERE on that page too.

#46 head tax...gimme me a break dude on 08.19.16 at 8:00 pm

Hey.\Why are you constantly referring to the 15% tax on foreigners as a the new chinese head tax.
Are you retarded or something ????

#47 Lulu on 08.19.16 at 8:00 pm

NO!!! NO!!! NOOOOOOOO!!!! VANCITY IS DIFFERENT, WE HAVE THE OCEAN, THE MOUNTAIN AND THE CULTURE, WE ARE IMMUNE TO ANY DOWNTURN!!!!! YOU GUYS ARE THE DELUSIONAL ONE……HAHAHHAHAHA

Renter!!!!!!! Are you ready? Say it louder!!!hahaha.

#48 ANON on 08.19.16 at 8:04 pm

All good things…

#49 palebird on 08.19.16 at 8:06 pm

#10 Humboldt..wow,that is the surest of signs that things are completely out of control..ever been there? Not missing anything except a few cows and hogs.

#50 vulcan without ears on 08.19.16 at 8:06 pm

Tulipomania is finally over…
Now run for the hills and back up the truck with cash…

#51 Dave on 08.19.16 at 8:11 pm

Re :”With JT opening up half a dozen visa centers in China, and promising 400,000 “student” visas/ year to citizens of that same country, perhaps the bubble will never pop…”

the erosion of our sovereignty continues…

#52 400,000 “student” visas/year = a Hail Mary on 08.19.16 at 8:14 pm

The Chinese appear to be very good business people.

It is unlikely any of the 400,000 or so that may come to Canada, and not solely YVR, will unlikely give YVR RE its “Hail Mary” reprieve with these numbers in Vancouver:

-SFH Avg Sold Price (Aug 15 to Aug 18) drop of $100,000 ($1.2 MM to $1.1MM) and yearly price change from +3.6% to -5.2%.

And Canada:

-Cum. GDP of -0.2% as of May (-0.5% annualized).
-Cum. Job Creation of +13,200 as of July with 110,000 full time jobs lost in June/July alone.

They’d have to be the dumbest RE investors on planet Earth to buy per the above + add 15% penalty on top of that.

#53 Snowboid on 08.19.16 at 8:14 pm

#15 not 1st on 08.19.16 at 6:43 pm…

If you followed the links provided by VREU you would see the actual tax bills for 2015.

The Jacksonville property had a tax bill of $ 1748 – hardly $ 20,000.

Capital gains of 30% – nope in fact you have a $ 250K exemption per person (have to resided in the home for 2 yrs out of the last 5 yrs) – so no capital gains owing on the Jacksonville property.

Property taxes are even lower in Arizona, we pay $ 1300 US on a home that would sell for about $ 235K US today.

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

#23 Frank on 08.19.16 at 7:07 pm…

The point is obvious to all, even RE pumpers, Canadian real estate is heading for a Hindenburg-like disaster.

VREUs’ points are made even more obvious by showing how ridiculous Canadian prices are compared to US prices.

It doesn’t take an economist to see the fundamentals of Canadian real estate are broken.

I don’t feel sorry for anyone that hasn’t heeded the sage advice of the esteemed Professor.

#54 Freedom First on 08.19.16 at 8:21 pm

#10 VREU

Yes. VREU, you are right on the money. It is why you are under attack all the time.

#55 StatMonkey on 08.19.16 at 8:25 pm

Average prices of single family detached have not fallen in Vancouver.

Changes in sales mix (less detached sold) obviously makes the average price lower.

SFD home #1 is work the same as last month and 30+% higher than last year.

We don’t deceive with stats here on this blog ;)

#56 JWD on 08.19.16 at 8:27 pm

Agreed. Unfortunately the worst financial mistake for many like me that call it home, is not buying into YVR market over the last 15 years. Sure a correction is in the making and long overdue but looking at those that bought more than 3 years ago are very glad they did. The time-line, size and longevity of the correction will be interesting. Unless its more than 30% it won’t matter much to those on the outside.

#57 TurnerNation on 08.19.16 at 8:32 pm

Here in T2/Wynn Kommunist Kanada la-la land any innate traits or strengths I might be born with naturally only would be use to “oppress” others, so… I should become:

Yours in “white liberal guilt” (let the chaff of my hanging millstone be the grist to your rumor mill) ,

X40ON

(Ps. I still won’t be admitted into any government job I bet…)

#58 Tony on 08.19.16 at 8:37 pm

Re: #22 Victoria Real Estate Update on 08.19.16 at 7:05 pm

The bottom might come at 3 times the family income or around $235,000 for a single detached home. It could overshoot to the downside first to something like $175,000 before bouncing upwards to 3 times income.

#59 TurnerNation on 08.19.16 at 8:38 pm

Say Lamb last night at a King St W. rooftop party.
I thought the adage is Don’t sht where you…sht?

#60 Patricia on 08.19.16 at 8:38 pm

Long time reader and lurker.. When I read articles like the following one I realize there is no end to the insanity.

http://edmontonjournal.com/business/real-estate/spillover-effects-of-b-c-s-real-estate-tax-on-foreign-buyers-can-benefit-alberta-real-estate-agents-say

#61 Bram on 08.19.16 at 8:44 pm

An exercise for those who like to dig a little deeper than misleading aggregates from bogus head lines.

STEP1
====
Browse to: https://www.zolo.ca/vancouver-real-estate/trends

STEP2
====
Click on ‘detached’ tab, below graphs, and note: SFH ALL: +4%

STEP3
====
Click on ‘townhouse’ tab, and note: TOWNHOUSE ALL: +26%

STEP4
====
Click on ‘condo’ tab, and note: CONDO +6%/+20%/+7%/+17% depending on size.

So all home types are positive YoY, even though the headline aggregate says: -9.2%

Why? because the aggregate now has far fewer SFHs in it than a yr ago.
Rich foreigners stopped buying the high end (read: houses), and local paupers still borrow for bachelor condos.

YVR did not just do a -21.3% MoM, neither did it do a -9.2% YoY.

Numeracy is lacking in Canada.

On Sept 14, you will get the REAL, and scientifically correct numbers.

Bram

#62 Context on 08.19.16 at 8:46 pm

The last time I was in Jacksonville was the last time and you couldn’t sell me anything there. I was glad to hit the road and get out of there. My kind of people live in West Virginia as can kickback and relax.

#63 Smoking Man on 08.19.16 at 8:48 pm

Hillary Rooten Clinton. The Spirt of Marie Antonetta lives on..

https://youtu.be/2Xnd4hVDhwA

I’m miss long branch. I’m selling the shack in Maskoka… I don’t like the people here.

#64 StatMonkey on 08.19.16 at 8:55 pm

Average sale price for metro Vancouver home from Aug 1-19 is $890,000. It was $1.4 million a few months ago.

Did prices fall? Nope. Just the high end went dead as people got scared about whether foreign money inflows will continue.

If the high end in Metro can seizes for another few months, the valley prices will get clobbered come fall.

#65 White Crock BC on 08.19.16 at 8:57 pm

Canada, YVR and the 416 hardly have a monopoly on housing bubbles.

Article in the Globe today says that New Zealand, Australia and Norway are among many other countries that are in the same boat.

Guess it’s “not going to end well” for many other cities/ countries.

We’ll be in good company.

#66 Brian on 08.19.16 at 9:03 pm

#28

Some people are! My buddy and his wife have a 700k mortgage, similar income to you.

#67 Smoking Man on 08.19.16 at 9:13 pm

The entire concert, Advice, don’t listen to it with a fellow muskoka nabour baring Acid.

My favourite song honest bird is in here somewhere.

https://youtu.be/vwMaRo5nwok

#68 rainclouds on 08.19.16 at 9:14 pm

VREU “As I’ve said, Canada has a massive housing bubble that extends from coast to coast. No Canadian city will be an exception.”

Wrong. There are many locales in Canada that will NOT experience a housing correction…As pointed out by the oracle himself, Que and the maritimes are not bubbly.

Maybe stop taking amphetamines before responding to the folks who challenge your assertions. And for the love of god, shitcan the “data” . You make Ripley’s power points appear professional.

We get it. you believe housing is overdue for a correction. In defense of the MANY folks who have attempted to call you out on your “comparisons “Hemet Ca, Florence Az et al are not even close to anything civilized. Nobody wants to live there, including the people who do. There is O comparison to your beloved Victoria.

Maybe some BC Medication would help. Works for me when reading your diatribes.

#69 45north on 08.19.16 at 9:22 pm

Finally, this is not just a Vancouver story. With real estate-related activity now adding up to 20% of the national economy – more than energy and all manufacturing combined – a collapse in YVR will have national implications.

Parliament opens September 19 – a month away:

http://www.parl.gc.ca/housechamberbusiness/chambercalendar.aspx?Language=E

What is parliament going to do? Pass a law saying that sales must remain at last year’s level? No prices must drop to where people can pay them. Christy Clark wanted to make housing more affordable. Looks like she’s going to get her wish!

#70 Carlyle on 08.19.16 at 9:25 pm

Question for blog dogs.

I’m 40, my hottie wife is 34. She has 8 years in a DBPP and I just landed a permanent gov job also with a DBPP.

She will be leaving her job as my new position is in another province. I’ll hit 85 factor at age 62 with 23 years in my pension. So combined about 31 years of pensionable service when adding her 8.

My 23 years:

Benefits are 1.4% of your highest average salary earned up to the matching
average Year’s Maximum Pensionable Earnings (YMPE) times
your years of PSPP pensionable service; and
• 2% of your highest average salary above the matching average
YMPE, times your years of PSPP pensionable service

Hers I’m not sure of … I think better. Neither of us will have bridge benefits.

How do we evaluate what this is “worth” from a net value perspective … Ie: how much would we have to have saved to throw off what these pensions will give us monthly?

#71 james on 08.19.16 at 9:26 pm

#15

“Next time do a little more home work, like looking into what Americans pay in property tax and capital gains.

Keeps a serious lid on things when you have a $20k property tax bill and pay 30% tax on home proceeds.”

Ha ha ha. Hilarious.

You think all Americans have $20k property tax?

Mine is about $4k per year. Home value $475,000. Schools in area rated 9/10, 9/10 and 10/10. Low crime, etc.

And apparently you are unaware of the Section 121 exclusion that lets homeowners avoid capital gains tax upon selling their primary residence.

Stop making stuff up.

#72 Smoking Man on 08.19.16 at 9:26 pm

In my book. After me and Ashman get nuked in area 51 buy the machine. Idiots, we have are shields up.

I do karaoke in my plasma flier…

This was the song…..

https://youtu.be/0fi2z4KBnNE

Writing long gone Gonzo is so under rated…

#73 Carlyle on 08.19.16 at 9:28 pm

I should add assuming salaries 5 best years 67k for her, 95k for me

#74 BS on 08.19.16 at 9:32 pm

#59 Bram on 08.19.16 at 8:44 pm

I guess we are at the Denial stage.

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

#75 Smoking Man on 08.19.16 at 9:38 pm

Damn it, I figured out why libtards are so fkd.

They listen to the wrong music or sweet words from trees.. Ah, trees don’t talk…. Unless your acid.

https://youtu.be/sMqNFAU0tOw

I never found hunters bats.. My Mr happy. Can’t shut him up. Sort of embarrassed.

#76 Smoking Man on 08.19.16 at 9:54 pm

What God wants

https://youtu.be/wtq1_peTXbw

#77 WallOfWorry on 08.19.16 at 9:56 pm

#10…VREU: “It’s no secret that oodles of celebrities, athletes, etc. choose to live in Florida (all over it actually). It’s all about the lifestyle. Florida boasts year-round warm weather and beautiful beaches with warm water. It’s no wonder so many rich people choose to call it home.”

Not to detract from the critical analysis and profound insight offered…and really…who could argue that Canada is due for a healthy correction but….

When comparing relative real estate prices there are other considerations. Did anyone see the most livable cities list where 140 cities globally were compared? Doesn’t seem to be any cities from Florida…nor the US for that matter???

http://www.cntraveler.com/gallery/the-most-livable-cities-in-the-world?mbid=nl_081916_Daily&CNDID=44507675&spMailingID=9386167&spUserID=MTQ5MTgyNDM1MjU1S0&spJobID=981606505&spReportId=OTgxNjA2NTA1S0

#78 Tony on 08.19.16 at 10:00 pm

Re: #37 Dave on 08.19.16 at 7:41 pm

I’m all for even numbers or half a pair of chopsticks.

#79 Tudval on 08.19.16 at 10:03 pm

I call bull on that ‘analysis’. What, with a grand total of 3 detached houses sold in West Vancouver you take an average and call a crash?? What about your low volume indicator? HPI is the only thing to go about. I can guarantee you that nobody dropped their asking price by 20%. But even if a few sellers panic, it will be just as short lived as it was in 2009. And the market DID NOT turn until the tax was introduced, because buyers where staying away to find out how the government would act, with all the hysteria generated by the media. You just pretend you called it, when in fact the government did it. And let’s see what next spring brings and how you’re going to explain another bad call. It’s a bad call anyway since now it’s all political, no serious analyst will try to predict markets that are manipulated by the government.

My guess is this BC government gets tossed out and other policy changes may come, which may help or hinder the markets. It’s all in government’s hand now, they own any crash and all the immediate consequences.

#80 observer on 08.19.16 at 10:07 pm

Soon the backs are going have to call their margins..

Yep the freakin bad loan they help spawn.
Hopefully the governments makes the banks pay at least an deductible to people who defaults.

And unlike the american Canadians cannot get out by just walking. They have to live with their DEATH PLEDGE

#81 Self Directed on 08.19.16 at 10:10 pm

#43 Bram on 08.19.16 at 8:00 pm

Not accusing you. Yes, sales mix could be different and probably is considering total # of sales are way way down for this time of year. But don’t deny that it is but one metric intended to guide investors (or “would be” home owners) in decision making such as “Is now a good time to buy a house?”

I think the bigger story is, this website is part of the Realtor Propaganda Machine and it’s spewing bad press. If you look at Zolo Trends for Vancouver, they’ve added a “Pro Rated” line on the graph to tell a better story. Looks like Garth got their full attention.

#82 WUL on 08.19.16 at 10:13 pm

While reading Garth’s blog tonight, my jaw dropped.

#83 TCContrarian on 08.19.16 at 10:16 pm

“Schadenfreude (/ˈʃɑːdənfrɔɪdᵊ/; German: [ˈʃaːdn̩ˌfʁɔɪdə] ( listen); lit. ‘harm-joy’) is pleasure derived from the misfortune of others. Borrowed from German into English and several other languages, it is a feeling of joy that comes from seeing or hearing about another person’s troubles or failures. It is similar in meaning to the English term “to gloat” (which has no noun equivalent), meaning to express pleasure or self-satisfaction at one’s own success or at another’s failure.”
*********************************************

I know of at least one person who will enjoy this epic collapse (of housing bubble), in YVR.
I’m probably a close 2nd… LOL

#84 The American on 08.19.16 at 10:21 pm

At #69: James, thank you for posting what you did. It’s all true. I live in Seattle where property taxes run about 1% of the appraised value of the home. In my case, I pay about $12,000/year. In other states, however, where appraised values are lower, it can range anywhere from 1%-3% of appraised value. Texas is tough. A simple home of $500,000 yields about a $15,000 annual tax bill. As for capital gains, its also worthy to note that the first $250,000 of gains on a home is tax free as a single person, or the first $500,000 of gains is tax free as a couple.

Not 1st doesn’t know the full truth of half the things he/she posts. Sad.

#85 PDX Canuck on 08.19.16 at 10:23 pm

#15, Not First.

Where do you get your facts from?

1) property taxes are typically between 1-1.5%. “$20k”, like you said, would be accurate – but for a $1.5-$2M home, not a $500k home.

2) homes in the US are capital gains free for $500k (married couple)…not 30% like you said.

Accurate facts are important.

#86 The American on 08.19.16 at 10:25 pm

Smoking Man, I’m counting down the days to the U.S. Presidential Election! Just 80 days left until you are eating crow with your Donald Drumpf predictions. If you’ve been following the news, things aren’t looking up for him right now. He’s not really dealing with the “top brass.” Again, start saying “Madam, President.”

#87 Transplant on 08.19.16 at 10:26 pm

#15 not 1st on 08.19.16 at 6:43 pm
#5 Victoria Real Estate Update on 08.19.16 at 6:15 pm

—-

Next time do a little more home work, like looking into what Americans pay in property tax and capital gains.

Keeps a serious lid on things when you have a $20k property tax bill and pay 30% tax on home proceeds.

Nothing to do with location or weather.

——————————————————————–

Just so readers are not misled, the above comments are totally incorrect.

In the US, an owner selling his/her principal residence in which he/she has resided 2 of the previous 5 years (not necessarily contiguous) is allowed a capital gains exemption of $250,000 for an individual or $500,000 for a married couple. Further exemptions are allowed for special circumstances, e.g. job relocation, death or illness of a family member, natural disaster, etc. I have sold 2 homes since living in the US without paying $1 in capital gains taxes.

Just by happenstance I received my property tax assessment in the mail today. My home is assessed at $400,000 and is taxed at $5,000. This is in a major metropolitan area of Florida. My daughter lives in Chicago, a city with notoriously high property taxes. Her property is assessed at about $750,000 and is taxed at $10,000.

I’m not sure where some people get their information, maybe the internet.

#88 Bram on 08.19.16 at 10:28 pm

#72 BS on 08.19.16 at 9:32 pm
I guess we are at the Denial stage.

I may be a denier, but if I am, at least one that knows how to read, and interpret numbers.

I’ll believe the figures we’ll get on Sep 14 from Teranet.
Qualified statisticians will back those, with actual measurements from people who know what they are doing.
On top of that: they describe HOW they are doing it, in excruciating detail:
http://www.housepriceindex.ca/documents/MethodologyEN.pdf

Even Zolo’s numbers are not what the horde here believes them to be, if you look a little more carefully.

Teranet provides the same historical analysis as the realtor HPI, and with similar methodology. The Zolo trends analysis is taken from current MLS data. I know which number I’d focus on if contemplating an offer. — Garth

#89 Shawn on 08.19.16 at 10:33 pm

Great post from a great blog.

#90 The Wet Coast on 08.19.16 at 10:54 pm

Just sold my Georgia estate. Admittedly small town GA. Selling price $325,000 and $4500 annual tax. Take a look on Zillow. 119 Barrington Drive, Jesup Ga.

#91 meslippery on 08.19.16 at 11:01 pm

#10 Victoria Real Estate Update on 08.19.16 at 6:15 pm

——————-
By your reasoning Windsor should be the most expensive
City in Ontario.
Its the warmest, close to I-75 hop to Florida.

#92 Aggregator on 08.19.16 at 11:01 pm

#86 Bram

I'm not convinced about Zolo's numbers either. It seems more like a publicity stunt if you ask me. The average price is being skewed from a handfull of speculators who've been excessively boosting listing prices, like this:

2560 Garden Drive

Date    Price

05/21/16    $1,399,000
05/23/16    $2,399,000 +$1,000,000
05/26/16    $1,985,000 -$414,000

Sure you're going to get a pullback on average prices with a 15% tax. But that doesn't confirm a change in the underlying trend. Rates are still are low, banks are liquating mortgages (to lend more) and a new record batch a fresh FICO scores (immigrants) are coming in this year and next.

#93 Bram on 08.19.16 at 11:09 pm

Teranet provides the same historical analysis as the realtor HPI, and with similar methodology. The Zolo trends analysis is taken from current MLS data. I know which number I’d focus on if contemplating an offer. — Garth

Did you actually read the methodology page: there is nothing similar about it.
Teranet publishes data on successive sales of the SAME PROPERTY, SAME ADDRESS.

Realtors do not track sale prices of the same property over longer times. Neither does Zolo.

And again, the -21.3% MoM is pure bogus due to shift in property types from SFH to Condo.
You are facilitating the spreading of incorrect conclusions. Frankly, I expected better.

Bram

#94 Cdn Mom on 08.19.16 at 11:18 pm

Enough with all of Canada is in a RE bubble. These four Ontario properties are mine. Is this representative of a bubble?

$115,000 3 bdrm, 2 storey, 1200 sq ft
$172,000 6 bdrm, 2 storey, 2000 sq ft
$150,000 3 bdrm, 2 storey, 1200 sq ft
$155,000 2 bdrm, 1 storey, 1400 sq ft, 1.25 acres, 100 ft frontage on largest lake in the world

Should I be aghast when I compare them to a family member’s US property (3 bdrm bungalow) that is currently worth $30,000 US, that was purchased 15 years ago for $60,000? Should I compare a similar sized house on a lake that looks like an ocean to one in a Detroit suburb? No? Why not?

Generalizations are just wrong. None of the houses I listed above are outside the means of a normal Canadian family.

#95 Free Cosmic Advice for Smoking Bonehead on 08.19.16 at 11:25 pm

Actually Florida residency for rich Americans have as much to do with rules that protect them from seizures when they are up to no good in other states along with state taxes as anything else.

Smoking Reprobate, I’m going to let you in on a secret known by very few. I assume, given your idiotic diatribes, that honest bird is actually Free Bird (I wouldn’t click on any link you supplied). Now everyone knows that Ronnie Van Zant liked the Jack Daniels but what only a very few know is the meaning of the song as he wrote it and understood it. The true meaning is that one should drink a full bottle of JD and than getting a good long running start you should go as fast as you can toward the end of the dock where the water is. Now going as fast as you can when you reach the end of the dock jump as high and far forward as you possibly can and begin flopping your arms like a large bird. Here your true destiny will be revealed. If you fly you’re a Free Bird but should you fall into the water you are an eel and should descend to the bottom and search for the deepest part of the lake and find a crevice to live in as that then is your true destiny.

#96 For those about to flop... on 08.19.16 at 11:29 pm

In my attempt not to talk about Vancouver real estate for the whole time of August I spend my days looking at fascinating charts like this one…

http://imgur.com/flDg7mC

#97 Ouch Vancouver realtors and bagholder buyers on 08.19.16 at 11:29 pm

Look at the out of work realtors posting on garths blog. Many of you high school drop out realtors will have to get a real job. No more spin for you uneducated shysters. Many of you should be facing jail.

#98 ROCK BEATS PAPER on 08.19.16 at 11:33 pm

What a waste. We should have had delegations aggressively selling as much R/E as foreigners could snorful, instead we put a stupid head tax! Could have thrown in some fresh air and water on the house.

#99 Bram on 08.19.16 at 11:34 pm

#79 Self Directed on 08.19.16 at 10:10 pm
If you look at Zolo Trends for Vancouver, they’ve added a “Pro Rated” line on the graph to tell a better story.

Indeed interesting that they adjusted their website.

I don’t think that the pro-rated line makes the story look different, though.
It just shows which part of the graph is pro-rated (to the right of the line) and which part is not (to the left of the line.)

If I were in the market for a home, I would look at the price-development of the category I was interested in: SFH/TownH/Condo, and not the convoluted aggregate number.
And for all categories, it shows prices are up, YoY, not down.
Zolo would have been better off not including the aggregate nr.

The fact that last month saw virtually no SFH’s getting sold is quite something though.
A signal that demand is gone, and price should follow later.

But those that did get sold this month, did NOT do so at a steep -21.3% discount from previous month.

#100 AisA on 08.19.16 at 11:41 pm

The trend is flippin down. Is there a pun there?

Crash c’est ici.

Beware the minor stabilizing between the major drops.

#101 Ignorance Is Bliss on 08.19.16 at 11:57 pm

The future history books could indeed be questioning why we Canadians didn’t realize we had fallen into the same kind of housing crisis as in the U.S. only a few years prior. Why is it that so many cautionary tales are ignored?

#102 DON on 08.20.16 at 12:02 am

#23 Frank on 08.19.16 at 7:07 pm

Lol, VREU is a clown.

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

Great rebuttal.

Attacking the person…nice! Guess that makes you a bully.

#103 DON on 08.20.16 at 12:09 am

#66 rainclouds on 08.19.16 at 9:14 pm

VREU “As I’ve said, Canada has a massive housing bubble that extends from coast to coast. No Canadian city will be an exception.”

Wrong. There are many locales in Canada that will NOT experience a housing correction…As pointed out by the oracle himself, Que and the maritimes are not bubbly.

——————-

I take it you missed the blog on Halifax which had already started to come down from their bubbly market. It’s all relative depending on local income.

The market is determined by people’s comfort level, greed and fear took the market to extreme levels and debt and fear will bring it down. Human emotions are involved here, that and job losses, and the rates can stay low as they did and still are in the US. Numbers mean very little when human emotion is involved.

#104 waiting on the westcoast on 08.20.16 at 12:21 am

Smokey says… “Hillary Rooten Clinton. The Spirt of Marie Antonetta lives on..
https://youtu.be/2Xnd4hVDhwA
I’m miss long branch. I’m selling the shack in Maskoka… I don’t like the people here.”

Smokey – epic fail on so many levels. Trump would be more in line with a Marie Antoinette comparison.

Home is where the heart is… Look inward my friend…

#105 Comrade on 08.20.16 at 12:32 am

I wonder if bc libs had intel of falling market. And tried to get cheap votes for upcoming elections, and end up looking like the ones who helped cool the market, and did something about it.

#106 WUL on 08.20.16 at 12:37 am

Now that 6 LNG plants have been built and commenced production on the B.C. coast over the last 4 years, (with $200 million per month deposited into the Christy Prosperity Fund) homeowners in Vancouver have nothing to worry about.

Carry on voting the way you do.

#107 Randy Randerson on 08.20.16 at 12:39 am

Lots of American-haters tonight. What’s wrong, you hate Canada so much you have to make up stories about delusional property tax and capital gain tax? Poor Canadians with delusion of grandeur.

#108 For those about to flop... on 08.20.16 at 12:49 am

I’ve been keeping an eye on the Chinese equity fund with the bank have some investments with.

The fund is now back to par after the meltdown last year, making up close to 20% in the last 3 months and could be the start of a new bubble.

I don’t have any money in the fund as I prefer to waste my money in India, but it goes to show that if you sit tight for a while it comes back most of the time.

China…where you have to be thick to invest here and the air is even thicker…

M42BC

#109 jane 24 on 08.20.16 at 1:06 am

So I guess that FOMO (fear of missing out) has been replaced by FOGI (fear of getting in).

This is exactly what happened in TO in the late 1980’s when the market crashed. The demand tap just turned off. I was an estate agent at the time but luckily got out just before the drop in water pressure hit the market! Everyone seems to decide overnight that this was not a good time to buy a house. I went from calculating folk’s profit if they sold to calculating how much it would cost them to get out as vendors sobbed. Not a happy time for many.

For the angry realtors on this site the big news is not the drop of reported sales prices and how the mix of sales impacted that but the drop in the number of sales. Once the FOGI fear is there, folks will not buy. Human nature.

#110 Steve on 08.20.16 at 1:26 am

Put a fork in it and have some fun

https://m.youtube.com/watch?v=fLj8Bp3wC80

#111 Few things last on 08.20.16 at 1:35 am

https://m.youtube.com/watch?v=DucceoUPlxY

They ain’t the only 30yrs that millionaires via saving in Canada.

Fame is good for nothing

#112 Black Lab on 08.20.16 at 1:59 am

Get ready for the shit show.

I hope I’m a better person in that I have convinced a family to sell and not buy.

You have 2.3 million now what?

Both known the sorc. They are still laughing but don’t know what to do whith the rest of their lives.

I’m helping them

Anything you want, for the rest of your life

#113 YVR2ZRH on 08.20.16 at 2:01 am

Stats clarification and update – Please read some of the details. The stats being quoted in the media are not completely accurate and there are lots of inaccuracies – see my explanations below. It is true that the market has tanked but don’t read all the headline numbers as being accurate.

With about 9 market days remaining in the month, we can start to look forward to how the month will end up. During the past two weeks, we have seen so many numbers in the media which highlights not only is the market falling but also that the intricacies of the underlying data are not well-understood by so many people. The message (although correct in that the market is bad) is so poorly explained and supported and thus the true state of the market is not clear to people. So – here is the summary of what is really happening. (This is Vancouver – REBGV region)

1.) Sales volumes will be down around 25% for unit sales but 33% for dollar volume. My model predicts a 10% decrease in condo sales (which is not much).
2.) The decrease in average price across the entire market is driven primarily by mix at this stage. It is not known how much is driven by actual price movement. Likely little so far. I predict maximum 2% across the board decrease this month from July.
3. ) Detached home sales are down significantly. This is likely more than a 50% decrease from July volumes and could be more than 65% down from August 2015.
4.) It is not clear what the benchmark price will do but we would expect that the condo price is probably almost unchanged. This market is mainly suffering from supply issues which will take time to resolve. Detached benchmarks are likely to fall in the higher-priced markets. The reason is that there will be buyers but only low-ball buyers testing sellers.
5.) The stats will be partially supported by the month-end date cutoff issues at REBGV. They report sales based on the date they get paperwork. Many of the sales recorded to beat the tax will actually show as an August sale, while they are actually July sales. Since these are from a period with a “different regulatory and tax framework” they are not really comparable and should perhaps be shown separately for accuracy purposes.
6.) Inventory will be up a bit but we still have a supply shortage in condos. Detached house MOI will increase to 10 or more.

Ultimately, this tax is taking money out at the top. It will take a couple months to see how it all plays out but the top of the market will now need to rely on move-up buyers and bona fide immigrants who are permanent residents.

We can already see the headlines coming but some of the intricacies of the stats will not really be understood.

I also have some stories from the front lines which I will get more info on next month and then write a more detailed update.

I’m generally bothered by the reference to a head tax – this is more accurately described as a stamp tax – or a foreign investor stamp tax. The goal of the tax is not to raise funds but actually to stop the transactions. It is important also to note that the money coming in from foreign investors should not be compared to the total trading volume of the market (i.e. foreign sales / total sales). However – it should be compared to the amount of new capital into the market (i.e. compared to foreign investors + first time buyers + savings or more crazy debt from existing buyers). Looking at the numbers on this – it appears that the foreign buyer is closer to 30-40% of new money. It also is close to 100% of new home construction. Thus – it is a massive – truly massive – amount of money. So – Garth – I have to just mention that your views of the percentage of the market are not entirely accurate because this is not a true measure of the market impact. (i.e. – if 100% of all sales were new product and the foreigners were 5-10% of that – I would agree- however – the market sales volume is primarily trading between existing homeowners – and thus, these transactions don’t really count in the denominator – – the true computation is foreign money into the market compared to total new money into the market. This is more like 40% – which is truly massive.

#114 Black Lab on 08.20.16 at 2:01 am

Sometimes the things you want are not the things you need

#115 Andres on 08.20.16 at 2:19 am

And the irony is that when these houses go from $1.5 million to $800m, all the complainers still won’t be able to afford the dream house they feel entitled to.

#116 Black Lab on 08.20.16 at 2:24 am

Garth will provide nothing more then the best understanding of the world.

Buckle up.

#117 Newcomer on 08.20.16 at 2:52 am

#90 Aggregator

Zolo doesn’t use list prices, only sales prices.

#118 bdy sktn on 08.20.16 at 4:02 am

#90 Aggregator on 08.19.16 at 11:01 pm

#86 Bram

I’m not convinced about Zolo’s numbers either. It seems more like a publicity stunt if you ask me. The average price is being skewed from a handfull of speculators who’ve been excessively boosting listing prices, like this:

2560 Garden Drive

Date    Price

05/21/16    $1,399,000
05/23/16    $2,399,000 +$1,000,000
05/26/16    ..1.9xx
………………….
I’ve been playing tennis at garden park for 20 yrs so I know this house and what lots in this hood go for

No speculation. Just realtor 101. At least the first price. A lowball to get everyone’s attention. The second price was stupid period. The third is the real price they hope to get.

The lot is worth 1.5. Structure maybe .3. It will sell for 1.8 assuming we keep along a steady path as we have been. This is peak pricing. It never got any higher and wont drop much if any. 4 years ago it was probably 1m. 2M gets you a stunner restored heritage in e van not a glorified special without a suite

If this drops by 50% , say 900k I will absolutely buy three like it. But it will only make 1.5 if another gfc hits.

Most all here BLIND to the zolo report you all keep quoting…
Van sun…
According to the zolo website
..
The average detached home is $2.6 million, down seven per cent compared to three months ago.
———–
Me
Detached down 7% in van. 10 in rmd and north van (highest of all areas). Take out few handfuls of the 4mil plus overseas deals (for now) and there you go. Everything else steady.
———
Van sun…
Detached homes in Richmond took the hardest hit compared to other markets with a 10 per cent price correction over the last three months down to $1.7 million.

North Vancouver detached homes fell 10 per cent in price in three months down to $1.8 million

————–
Keep waiting for cheap van houses boys cause that ain’t here yet.

I will bet 100 bucks that a now 1.5 mil lot/teardown.

in this hood does not go under 1.2 in the next 12 months. Any of you ‘sure thing’ re doomers wanna bet?

That’s a puny 20%off peak. Less than last year’s gains

Flop can hold the cash. Who,s in?

#119 bdy sktn on 08.20.16 at 4:22 am

To be more specific.
33 x 110 min lot
Death trap house
Not on busy street
Venables to grandview hwy
Commercial to Nanaimo

A most typical sale round here. 1.5 is the high water mark. 2 years ago these were 1.1..

You get the 7% drop for free. . I will assume there is no drop so far and base it on the high of 1.5.

Show me a sale of same for under 1.3 before Aug 20 2017 and flop gives you my hundred.

If the 7 drop is real you only need 13% more. Lots of talkers tonite.

#120 All things being equal on sales mix... on 08.20.16 at 4:23 am

Agree with many posters here about Zolo data reflecting more bargain properties being bought (condos, townhomes); hence, average price drops due to the sales mix change.

However, this also means fewer buyers for higher priced SFHs which in the end will drive their price down if those sellers wish to attract buyers.

Also, sales mix or not, the unit sales drop in SFHs in such a short period of time is flabbergasting – as in there is NO demand. This can only exacerbate the price of SFHs downward. There will always be sellers that “need to sell” and they will drop their price to do so.

So all things being equal, something is afoot in YVR RE and sales mix cannot explain that entirely away.

Crash Tax? Debt wall? Economy souring? We will find out soon enough…

#121 bdy sktn on 08.20.16 at 4:26 am

Correction

A sale of same under 1.2. (20% off 1.5)

#122 Self Directed on 08.20.16 at 4:27 am

#28 Millennial905er on 08.19.16 at 7:19 pm
(combined income of 180k & we owe 180k on the house, planning on paying off in next 7 yrs)
———-
7 years. This has always been the real problem with millennials and low interest rates. No sense of urgency to get the lender off title. I bet you both spend a crap load on starbucks.

#123 bdy sktn on 08.20.16 at 5:00 am

Wanna short yvr housing? This is your chance.

BTW. The full moon is lighting up the glass smooth waters of howe sound tonight. Seals slap their messages across miles. Swimming in the morning heat and the water looks exceptionally clear for snorkeling .prawn traps out. Skis and wake board ready. Drinks cold in a solar panel powered 12v fridge . Like 1000 miles away but just 1hr from city. Paradise. No ferry. Fun boat ride over. Friends coming on water taxi for the day. Kids away on trip.
If I get more relaxed I might turn to a gel.

#124 eaglebay on 08.20.16 at 6:47 am

#68 Carlyle on 08.19.16 at 9:25 pm

Government job? Don’t you have any valuable skills beside sucking up to a pension for the rest of your life?
Hotties need real man. Sorry…

#125 OffshoreObserver on 08.20.16 at 7:48 am

#68 Carlyle on 08.19.16 at 9:25 pm
Question for blog dogs.

I’m 40, my hottie wife is 34. She has 8 years in a DBPP and I just landed a permanent gov job also with a DBPP.

She will be leaving her job as my new position is in another province. I’ll hit 85 factor at age 62 with 23 years in my pension. So combined about 31 years of pensionable service when adding her 8.

People like you and your “hottie,” civil servant wife–which is an oxymoron–are the reason I expatriated from growing Socialist Canada in 2010 and have been living with young GFs in Southeast/Asia.

My formal expatriation will be over the next 5 years.

I refuse to pay taxes for useless silly servants’ pensions.

I think you will both die from boredom before you can collect OAS.

#126 Julia on 08.20.16 at 8:07 am

Quebec not dropping? Not so sure about that. I think ertain areas are, others are flat.

My parents live in a medium sized city in Quebec, suburb of a major city.
Bought a very dated house in 2005. Full gut an reno. Retired, travelling a lot, decided to buy a condo in 2014 and sell the house.
House for sale for over 6 months, price drops, less than 10 visits. Many houses for sale and sitting on the market. Took it off the market and sitting empty.

Finally realized they don’t like condo living, put the condo on the market to move back into the house. Been on the market for 8 months now, 2 price drops. Now would get out with less than paid.

The house and condo are both average size and price point, nothing extravagant, and in great areas.

They are mortgage free on both properties and well within the rule of 90, so they’re ok, but they are realizing how bad the market really is after years of increases.
We know many younger people who got in with all they have and are now desperately trying to sell without any luck.

#127 Dale Fuchart on 08.20.16 at 8:45 am

Are we getting Rowat or Lewanza today?

#128 chopstix on 08.20.16 at 9:11 am

http://www.news1130.com/2016/07/13/vancouver-families-leave-cant-find-housing/

#129 chopstix on 08.20.16 at 9:15 am

http://vancouversun.com/news/local-news/feds-after-dragging-heels-plan-crackdown-on-vancouver-real-estate-tax-cheats

#130 Julia on 08.20.16 at 9:56 am

For those who read French, this article from this morning talks about municipal assessments that are being sent shortly. Assessment date is July 2015.

Montreal shows an overall increase of no more than 5%. Some areas show decreases.

http://affaires.lapresse.ca/economie/immobilier/201608/20/01-5012373-nouveau-role-foncier-la-plus-faible-hausse-en-15-ans.php?utm_source=dlvr.it&utm_medium=twitter

#131 YVR SFH Prices are Indeed Down on 08.20.16 at 10:02 am

Sales mix arguments aside, Zolo etc. there has been someone else tracking prices for some time. Just go here for REBGV pricing data (no stats, just simple subtraction and division):

http://www.robchipman.net/

It is a rare event to find his Avg Diff$ negative meaning Sale Price > List price and data is day by day (current enough):

In essence, almost all Avg. List Prices > Avg. Sale Prices.

Also and almost all his Sales/List ratios are under 100%, comfortably. He estimates if 100% a hot market. Peruse for yourself those numbers and draw the inevitable conclusion.

So YVR RE NOT a hot market and headed to a slow market, on average virtually everything sells below list.

Perhaps, Zolo data not that off after all?

BTW, no $ Million dollar averages in his data either.

#132 Mark es on 08.20.16 at 10:02 am

“I believe it when I see it on Teranet HPI.”

Then you’re doomed to live 2 or 3 years in the past. As that’s what Teranet’s numbers essentially are — a low pass filter which is stuck so far in the past that its not even useful in assessing the real-time state of the housing market in whatever city used.

And the irony is that when these houses go from $1.5 million to $800m, all the complainers still won’t be able to afford the dream house they feel entitled to.

If the ‘complainers’ invested in inversely correlated assets (ie: Canadian stock indices in particular), chances are, their downpayment funds will have grown by leaps and bounds relative to housing prices.

As I explained many times here, someone who took their down-payment funds in 1990, and merely invested them in the TSE index at the time (through the TIPS), had, by the end of the decade with dividend re-investment, enough in their account to buy an entire house. At what proved to be a fairly good entry point at the time to the housing market, and, in hindsight, an excellent time to exit stocks (as stocks have barely moved since 2001 after the blow-off top!).

#133 Wallie on 08.20.16 at 10:04 am

@Bram #59

You’re not comparing the same period. The -9.2% is for Jul 17 to Aug 14. The +4%/+26% is for Jun 19 to Jul 17. If you look at the aggregate for Jun 19 to Jul 17 it’s fairly consistent with the SFD/townhouse/condo breakdown from the same period.

#134 Mark on 08.20.16 at 10:07 am

“#111 YVR2ZRH”

Without getting too much into details, I definitely agree that you’re seeing the “fall” in prices exaggerated by the sales mix at this point. Just as the sales mix giveth, now it is taketh.

On that note, I have a plane to catch. Kingston this afternoon :)

#135 OUCH Realtors on 08.20.16 at 10:12 am

Wow sales CRASHED HARD! on van city. Looks like you realtors will be eating cat food. Many of you will go bankrupt as you will not be making any money for YEARS to come. Keep chirping on this blog but you high school drop outs are finished.

#136 Ace Goodheart on 08.20.16 at 10:16 am

RE: #10 Victoria Real Estate Update:

“Florida boasts year-round warm weather and beautiful beaches with warm water. It’s no wonder so many rich people choose to call it home.”

True. However it also boasts some of the world’s most brutal hurricanes, and summers that are so hot you literally melt. Southern Florida is a nice place to be, from November to April. The rest of the time, it is not.

It snows in Northern Florida:

https://www.google.ca/search?q=northern+florida+snow&espv=2&biw=1366&bih=631&site=webhp&tbm=isch&tbo=u&source=univ&sa=X&ved=0ahUKEwji5b7bldDOAhUFJh4KHYRlCjUQsAQIUQ

WRT Van real estate: It will be interesting to see what happens next. Housing prices there have obviously hit the “affordability threshold” (the point where an average middle class family, using every financial resource available to them and borrowing to the edge of their credit, can no longer afford to purchase a house). At that point, housing becomes affordable only to the 1%, so you are selling all of those houses to a very small group of people.

That is the point where sales fall off a cliff, so to speak.

The interesting thing to see will be whether sales pick up again if prices decline back into the “sweet spot” or “goldilocks zone” where the middle class can once again afford to purchase.

If sales do not pick up again at that point, then that would be evidence of a speculative housing bubble. If that happens, then there are going to be some really sweet deals in Canadian Chartered bank stocks, and I would also recommend purchasing shares of bankruptcy and insolvency companies.

#137 The Wet Coast on 08.20.16 at 10:51 am

The early part of this year I noticed huge numbers of people from Edmonton at open houses in Coquitlam. I could tell they were from Edmonton because they drove Ford trucks (no government motors for them) and spoke a northern Alberta dialect. The Oilers and the “Let the Eastern Bastards Freeze in the Dark” stickers on the trucks were evidence of where they were from. They had a realtor with them, usually from Vegerville to interpret. Then the the oil industry tanked. Word was the new NDP government in Alberta was preventing money from leaving the province. Then the BC government launched a new 15% tax. The tax was designed to reduce the Alberta advantage buying houses and proceeds of the tax are destined to help make the Canucks competitive in the NHL. In Toronto a similar tax is being considered as the Leafs have never been competitive. There was also a concern the Albertan’s might compete for manufacturing jobs in BC. However, both those jobs have been filled for some time. Housing prices now appear to be falling and a debate rages over the existence of the Ogopogo and the mythical Albertans. Whole branches of government and private industry are committed to producing conflicting real estate data utilizing statistical tools perfected at Enron.

#138 Setting the Record Straight on 08.20.16 at 10:56 am

The joy at the prospect of a Clinton victory is perplexing.

http://nationalinterest.org/blog/the-skeptics/hillary-clinton-could-easily-push-america-open-conflict-17398

#139 young & foolish on 08.20.16 at 11:02 am

… are we going to get Helicopter Money?

#140 rainclouds on 08.20.16 at 11:04 am

#101 Don” I take it you missed the blog on Halifax which had already started to come down from their bubbly market. It’s all relative depending on local income.”

Don’t need the blog, I was there last week. Prices declining, Sales moribund. Were never overtly high.

Regarding “local income”. Halifax median household income is higher than Vancouver and very similar to Victoria.

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

Perhaps a more valid comparison would be:
Canadian cities
-400k Pop
-universities
-military
-provincial capitol
-Ocean facing
-similar median incomes
-on or almost on an island

Yes, based on above,Victoria looks stupid expensive………

#141 BS on 08.20.16 at 11:53 am

#111 YVR2ZRH on 08.20.16 at 2:01 am

it should be compared to the amount of new capital into the market (i.e. compared to foreign investors + first time buyers + savings or more crazy debt from existing buyers). Looking at the numbers on this – it appears that the foreign buyer is closer to 30-40% of new money.

That assumes the foreign buyers never sell and no sales are from foreigner owners. Of course this is false. The question is what is the difference between local and foreigner owned sales. I do not see any reason why it would be different pre 15% tax. Although going forward foreigners who already own and use the property are less like to trade up, down or sideways due to the new tax on that trade. On the other hand foreigners who were speculating are likely going to sell in the coming months as the party is clearly over.

#142 BS on 08.20.16 at 12:08 pm

#117 bdy sktn on 08.20.16 at 4:22 am

To be more specific.
33 x 110 min lot
Death trap house
Not on busy street
Venables to grandview hwy
Commercial to Nanaimo

A most typical sale round here. 1.5 is the high water mark. 2 years ago these were 1.1..

You get the 7% drop for free. . I will assume there is no drop so far and base it on the high of 1.5.

Show me a sale of same for under 1.3 before Aug 20 2017 and flop gives you my hundred.

I think you have already lost the bet. But if I was you I would be more worried about the $300k your house went down already and how much more it is going down next month rather than the $100. In a few years those lots you describe will be sub $500K.

#143 CV5 on 08.20.16 at 12:29 pm

DELETED

#144 Ace Goodheart on 08.20.16 at 1:45 pm

RE: “Of course, nobody in Toronto believes it. But it’s time to get out there, too.”

I’ll never sell my house here. I intend to stay in it until they carry me out to a hearse.

That is just me. I like it, it’s paid for, it’s comfortable and I have other investments. If we get a real estate crash here, wonderful. Best news I’ll have had for a while. No more never-ending construction on my street. No more beautiful old houses being torn down and replaced with McMansions. No more endless property tax increases. The old neighbourhood will be back again.

I am fine with a crash.

Hopefully everyone else is too. It’s a dog eat dog world. We are all dogs. The idea is to make it as hard as possible, for you to be eaten by other dogs. That means, watch your debt levels.

#145 Future Expatriate on 08.20.16 at 1:49 pm

And with no flood of US conservaBorg moving north after Trump’s MASSIVE trouncing, (what? out of the liberal frying pan into the fire?) can’t count on a massive expatriate exodus to save the day either. Finally. Day of reckoning has come.

#146 For those about to flop... on 08.20.16 at 2:24 pm

#139 BS on 08.20.16 at 12:08 pm
#117 bdy sktn on 08.20.16 at 4:22 am

To be more specific.
33 x 110 min lot
Death trap house
Not on busy street
Venables to grandview hwy
Commercial to Nanaimo

A most typical sale round here. 1.5 is the high water mark. 2 years ago these were 1.1..

You get the 7% drop for free. . I will assume there is no drop so far and base it on the high of 1.5.

Show me a sale of same for under 1.3 before Aug 20 2017 and Flop gives you my hundred.

I think you have already lost the bet. But if I was you I would be more worried about the $300k your house went down already and how much more it is going down next month rather than the $100. In a few years those lots you describe will be sub $500K.

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

Hey B.S don’t rain on the guys parade…I’ve already told my missus that I am taking her out to dinner tonight as I just miraculously came across a $100 windfall.

Not real sure why out of all the people on this blog I was chosen as the bag holder.

Maybe coz I’m too dumb to run and too big to bail…

M42BC

#147 Smoking Man on 08.20.16 at 3:04 pm

So funny last night, two 50ish sisters table next to ours almost come to blows. , they were talking about their late parents being raving alcoholics. “One sister how dare you talk about that, it’s not true,” the other, “I found Gine bottles all trough out the house.”

Both sisters were pissed out of their mind, probably the only reason a scratching cat fight never happened. They could barely stand, let alone walk.

Starting to like Muskoka.

#148 Self Directed on 08.20.16 at 3:08 pm

Zolo shows Richmond has double digit losses monthly, quarterly, yearly… But check out Maple Ridge. Shows monthly increase even after 15% foreign buyer tax, and all the gains made in the past year appear to be holding steady.

Draw your own conclusions but it looks like FOMO taking hold of a market where Household incomes can afford to be stretched. Does not surprise me. However, not everyone is willing to make that commute or lifestyle change. It’s a different world out there.

#149 Brazil ex-pat on 08.20.16 at 3:16 pm

#142 Future Expatriate on 08.20.16 at 1:49 pm
And with no flood of US conservaBorg moving north after Trump’s MASSIVE trouncing, (what? out of the liberal frying pan into the fire?) can’t count on a massive expatriate exodus to save the day either. Finally. Day of reckoning has come.

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

Trump’s massive trouncing? Another reader of the Main Stream Media…….

#150 Bram on 08.20.16 at 3:31 pm

#128 YVR SFH Prices are Indeed Down on 08.20.16 at 10:02
there has been someone else tracking prices for some time. Just go here for REBGV pricing data (no stats, just simple subtraction and division):

http://www.robchipman.net/

Interesting info.
Thanks for sharing.

It matches Zolo because both average over all housing types, and are sensitive to drought in SFH sales.

#151 Bram on 08.20.16 at 3:53 pm

#130 Wallie on 08.20.16 at 10:04 am
You’re not comparing the same period. The -9.2% is for Jul 17 to Aug 14. The +4%/+26% is for Jun 19 to Jul 17. If you look at the aggregate for Jun 19 to Jul 17 it’s fairly consistent with the SFD/townhouse/condo breakdown from the same period.

First off: You’re absolutely right about the period.
Thanks for telling me.

Next: Zolo’s nrs are all over the place, as today, I am seeing:
Jun 22 – Jul 20
SFH: +7% YoY
TownH: +26% YoY
Condo: +25% YoY
With the Aggregate: +31.6% YoY (‘Past’ tab: Jun 22 – Jul 20)
Yes, closer match, but still off! As a matter of fact: impossible. If all three types increased +26% or less, how can the aggregate be +31.6%?
Not possible, unless the aggregate includes commercial/industrial sales?
Is the aggregate over a smaller region?
The aggregate should have been between the lowest (7%) and the highest (26%), in the teens, not the 30s.
Strange!

We’ll know how much sense Zolo makes when they publish the SFH/TownH/Condo YoY for Jul17-Aug14.
Somehow they publish break-down nrs later than the aggregate nrs.

Garth uses the word ‘Frankennumber’ when describing realtor data, and frankly, so far that seems rather apt for Zolo.

Teranet HPI may be slower to react (although not the 3yrs Mark claims, more like 3 months), but it is a lot more reliable.

Bram

#152 willworkforpickles on 08.20.16 at 4:04 pm

Real estate tops out every 17 to 18 years. Recessions come and go on average about 7 to 9 years.
Real estate isn’t due to top out again until 2023-24.
Another recession is due or has arrived and will come and go.
Real estate will stall for a year or two and then begin to ascend again.

#153 Rifles on 08.20.16 at 4:29 pm

My anecdotal survey (ie totally valueless) in the West Side YVR hood I inhabit has seen for sale signs blossom since the tax appeared. In my block a house that recently sold for over $4m reappeared at a similar price point. The difference now is that white Cayenne’s disgorging prospective buyers are no longer a constant in front of the house. It makes sense for the market to pause and for those buyers the tax has targeted to reassess and/or figure out how to avoid paying. It is too early to say what the impact of this will be and whether we will see Exodus or a shrug. Short term data mean very little and could be little more than a head fake. Spring 2017 is the window to watch. If the negative news piles up into the fall signs will abound in late January as sellers try and beat the rush. Then we will know whether those who said they don’t care if their house price falls 20+% actually meant that or whether they think this thing has legs to the downside and they better git while the gitting is good.

Furthermore if the looming provincial election shows a potential NDP win that will add another layer to the fear mix. Their talk about affordability and desire to appeal to the priced out forever masses will only add to the pressure. They don’t even have to say anything (and probably won’t as they don’t want to scare business away – yet). Moral suasion and the mere threat of them in the driver’s seat in Victoria will do the dirty work for them.

Finally, it will be interesting to see what offshore buyers that got in under the wore without having to pay the tax do. If, as is the case on the west side, they start to get the sense that the only realistic buyers for the style of houses they build are people who have to pay 15% and may face additional taxes under the NDP for non-occupancy etc, then will they join the sell parade too? Momentum has a life of its own and anyone who follows Chinese markets knows that they are among the most momentum driven investors going. if liquidity becomes a concern then the hulking white elephants of West Point Prey will join the stampede.

The next 9-12 months will tell all.

#154 Harden on 08.20.16 at 7:33 pm

Money quote: “It’s not so much that foreigners have dissipated, but that FOMO has.”

Wonder how many realtors are sweating bullets these days, the not so proud owners of multiple properties they were previously flipping with ease. Music has stopped.

#155 45north on 08.20.16 at 9:26 pm

Julia S: The problem is that if houses in Van deflate below 1mil they’ll, once again, be eligible for CMHC coverage. That’s where the real bottom lies – at the $1 million mark. Every house that breaches that waterline becomes a taxpayer liability.

I think that’s your mortgage talking. There’s no real bottom. Suppose you owned a house worth $1.1 million. if you owned it outright then you could sell it for $900,000. No big deal. But if you have a mortgage for $900,000 you lose your down payment. If you can sell.

Depending on the government, the banks and CMHC will go into self preservation mode – mortgages will be harder to get, conditions for CMHC insurance will be tougher. As I said, Parliament opens September 19 this year. I’m thinking that by that time, the downward trend will be clear to all. I’m guessing the government is not going to pour money into real estate. I mean it never said it would.

#156 Smoking Man on 08.20.16 at 10:29 pm

DELETED

#157 Smoking Man on 08.20.16 at 10:41 pm

To my bat skit. Crazy wife.

https://youtu.be/sUJkCXE4sAA

#158 NEVER GIVE UP on 08.20.16 at 11:31 pm

BC Gov is not finished its job.
Now they have to put in legislation forcing cities to process building permits in 3 months.

All the little empire builders who want to be nimbys and keep out too much development have to realize they were once looking for a home.

Selfish cities. Think about your own children? Where are they going to live?
`

#159 Future Expatriate on 08.22.16 at 10:04 am

#149: No, just a reader of actual real polls of actual real likely voters not just in the sticks, and human nature.

Not all Americans are morons; only about 30% tops at any given time. Ebbs and flows with time, but a good safe average.

Thus, no Trump Presidency.

But don’t take it from me and Garth; watch.

And if you really are in Brazil? ¡Viva la revolucîon!