The obvious

Since I never gloat about being right (it would make me even less tolerable) let’s focus on the lessons in the latest dump of numbers out of Ottawa.

In case you missed it, Chinese dudes are history. They obviously irritate a lot of people who come here to relieve themselves, but they’re not responsible for bloating house prices in YVR and the GTA by 150% in a decade. We did that. Now the government backs me up. Non-beavers own just 3.4% of the properties in Toronto and 4.8% in Van. Yawn. That equals 3% of the value of all GTA houses and 5.1% of those in the Lower Mainland. Foreigner buyers like condos best (they’re easy to rent), but overall less than 1% of the condo stock in our 17 major cities is theirs.

This is consistent with every other attempt to measure the impact of offshorers. However it will be rejected by those whose prejudice, narrow world view, victim mentality and bigotry make them keen to blame Asians. They’ll boogle you with stories of money laundering, casinos, family cash, numbered companies, fraud and tax evasion (as well as kids in Lambos), but stats are stats. We’re not being overrun. The housing market is 95%-dominated by locals. There’s nobody to blame for stupid prices but folks like your BIL who turned housing into an investment asset financed it with epic levels of debt. This will not end well. The report this week will accelerate that.

Lessons:

Never trust politicians with your house.

There was no solid evidence for the BC or Ontario governments to impose a tax on non-local buyers. Those moves came as an uninformed, kneejerk response by people trying to save their political skins. Instead of being principled, they bowed to the lowest common denominator of public opinion. The 15% tax in Toronto and Vancouver was obviously race-based and we should all be ashamed of it. Of course, it failed. So did we.

Blame cheap credit and speculation. Big change coming.

House prices spiked when the Bank of Canada dropped rates and banks began a race to the bottom with mortgage costs. Flippers, speculators and amateur landlords moved in. When mortgages hit 2% in the spring of 2017, houses prices were rising 30% a year. Canadians did not use cheap money to retire debt, but merely snorfled more of it. The facts are irrefutable. Now we owe more than can be repaid in a lifetime. With money costs being normalized and new lending regs in place soon, it all changes.

News flash. Everyone does NOT want to move here.

House sales and prices dipped in Toronto and Van after the Chinese Dudes taxes were imposed, not because foreigners ran away but because the locals thought they would. So they stopped buying. The market instantly reacted. All the proof anyone needed of what moves it.

The news this week is further evidence there’s nothing backstopping the residential housing scene in Canada. Immigration hasn’t spiked, remaining consistent with decades past. There is no torrent of money from Beijing or Guangzhou. Interest rates in North America are inexorably rising. The economy has been good, but is cooling now. US tax reform may lure investment bucks away and our trade deals are under attack. Why do so many people in this delusional country think everyone in the world wants to move to Kitsilano? Or Etobicoke? To Halifax? Or Calgary?

They don’t. Nine of ten real estate sales are between consenting Canadians – every one adding new debt. Those who bought in fear of being priced out by a Chinese guy, in a bidding war with eight other locals, have a long road ahead of them now.

Don’t blame the blog.

This pathetic site is not anti-real estate. Hey, I own property. But over the past nine years of tedious, repetitive, nauseating, mind-numbing, tortuous posts, the message has been of balance. Never put all your eggs in one asset at one address on one street, especially when buying takes every dollar and thrusts you into debt. Moisters desperate to get a condo with extreme leverage that ties them down and costs twice as much a month as rent, are the brain-washed spawn of the Bank of Mom.

This is an asset class that’s been loved to death. Expensive to buy, a burden to own and carry, oft illiquid, it’s no place to grow net worth any more. If you want a house, can afford it without sacrificing balance and don’t mind a loss, go ahead. Get one. Just don’t blame anyone else for paying too much. Not cool. And now, not true.

266 comments ↓

#1 dakkie on 12.19.17 at 5:01 pm

Bank of Canada’s Poloz Is Right to Be Worried

http://investmentwatchblog.com/bank-of-canadas-poloz-is-right-to-be-worried/

#2 Ben on 12.19.17 at 5:08 pm

First

#3 Robert B on 12.19.17 at 5:22 pm

Well said Garth…

But I still love my home. Not a house but a home .

It looked like foreigners went to Condos in Toronto and Vancouver by over 7% of the sales…

#4 nosurprise on 12.19.17 at 5:23 pm

No surprises Garth, but I’m sorry that crap statscan report doesn’t say a whole lot. The foreign buyer boogyman just distracts people from the real issue. Everybody knows most foreign buyers (you are right, about 5%) don’t just wire the cash to Canada and sit on it like a bank account across the ocean. Most of these investors don’t want simply a boring real estate investment. They want access to Canadian schools, clean air, low crime, diverse and tolerant society, and above all lax taxation laws and even weaker enforcement. Our skills focused immigration policy is a deserved point of national pride, but our naive and unfair tax laws make it too easy for Port Moody to foot the bill for west van residing millionaires who only declare poverty line levels of income and enjoy some of the best public services in the world.

#5 Fake News Again on 12.19.17 at 5:25 pm

“In case you missed it, Chinese dudes are history. They obviously irritate a lot of people who come here to relieve themselves, but they’re not responsible for bloating house prices in YVR and the GTA by 150% in a decade. We did that.”

Wrong. They have been talking about this ALL DAY on the radio here in YVR. Caller after caller – including realtors – are saying 50% of the transactions are with proxies with the 2 millions dollars being wired in offshore.

Denial continues to be a river in Egypt.

#6 Canada's building code... on 12.19.17 at 5:30 pm

to the builders lurking on this blog…

What is the real cost of building a 2×6 structure from wood, filled with R24, decked with TyVec plastic wrapping and beaver barf boards?

Not to sound ignorant guys, but the quality of building in Canada is stuck somewhere in the 19th century.

Realtors and builders got lucky and hit the jackpot for a few years when interest rates were dead.

#7 Nick on 12.19.17 at 5:32 pm

While I agree with the overall post I wanted to mention that the headline numbers are CMAs (ie GTA/GVA). When you look at the main cities only, and for condos, ownership is much higher.

8% of all condos in the City of Toronto are foreign owned.

12% of all condos in the City of Vancouver are foreign owned.

#8 nosurprise on 12.19.17 at 5:35 pm

Hey Garth, you know how the banking system works right? Explain to me how this is all caused by house horny Canadians if median household income is 68k in TO and Van. In real life terms that means you need a 100k in your jeans and no matter how much you whine about foreign buyer bidding wars, crap land development policies, or waves of new immigrants, the loan officer is going to ask for 3 years of pay stubs and say if you have zero other debt that he will let you buy a house worth 500k max. That will be even less in about 10 days. So if median blended housing costs are over a million in the GVR and close to 800k, how does that happen? In the real world, the bank simply says no.

#9 SmarterSquirrel on 12.19.17 at 5:35 pm

Everyone around me buying the semidetached homes (half a house as Garth has called them in the past) in Toronto for over $1m are local Canadians. We have nobody to blame but ourselves for the bidding wars and for driving prices to where they have gone. Hopefully sanity comes back to the market eventually and people can buy a house and still have money left after paying their monthly mortgage and property tax to invest in a portfolio for a financially healthy retirement. After all what’s the point of a home if it prevents you from enjoying life.

#10 Boombust on 12.19.17 at 5:36 pm

#5 Fake News Again

Duh.

What else did you EXPECT RE industry people to say?

After all, if what they say can spook unsuspecting locals into buying, it’s all the better for them, isn’t it?

Give your head a shake.

#11 Mark on 12.19.17 at 5:40 pm

Good riddance, maybe that extremely racist and entirely RE-sell-side concocted meme, of “Chinese” (or occasionally, Russians, Persians, etc.) bringing money to Canada to price Canadians out of real estate will finally die.

It was easy enough to see in the other statistical data, that the whole meme was fake. This is just another independent data point of verification.

On that note, new Ross Kay interview on TalkDigitalNetwork. Pretty good, and he certainly tells it like it is, especially with all the fakery from the RE boards after the 2013 apex of prices coincident with Budget 2013’s crackdown on CMHC subprime mortgage issuance.

#12 the ryguy on 12.19.17 at 5:40 pm

Id probably just cancel the comments..it wont be pretty today.

#13 TheSpangler on 12.19.17 at 5:41 pm

I would take that figure with a grain of salt.

Much like how when you buddy tells you how many girls he has hooked up with, or when a girl said she has only been with XX number of dudes.

#14 Damifino on 12.19.17 at 5:42 pm

#3 Robert B

Well said Garth… But I still love my home. Not a house but a home .
———————————-

I love my home too, even though I rent it. But I could learn to love a different one if I had to.

I’m a bit fickle that way.

#15 KLNR on 12.19.17 at 5:54 pm

@#6 Canada’s building code…

about $225sqft for a very basic fit/finish in Toronto.
reno’d an 1880’s vic in Toronto – absolutely solid house.
this “lucky” streak is almost 20yrs for me.

#16 Smartalox on 12.19.17 at 5:56 pm

I don’t know about low, low interest rates being the key cause of the housing bubble.

At least in Vancouver: I moved here in 2003, and even then, prices were exorbitant, in terms of the quality of house versus the price, but of course, nothing like what has happened since.

When I bought a condo in 2007, the interest rate of my mortgage was about 5%, discounted from about 7%, and even then, it was over-priced for what I got, but that was consistent with the market at the time.

I admit that the gains in the past decade were supercharged by the low, low, ’emergency’ interest rates after the great recession, but the market was already rife with flippers and speckers, jacking up prices in lieu of any real industry.

#17 AGuyInVancouver on 12.19.17 at 6:01 pm

#5 Fake News Again on 12.19.17 at 5:25 pm
“In case you missed it, Chinese dudes are history. They obviously irritate a lot of people who come here to relieve themselves, but they’re not responsible for bloating house prices in YVR and the GTA by 150% in a decade. We did that.”

Wrong. They have been talking about this ALL DAY on the radio here in YVR. Caller after caller – including realtors – are saying 50% of the transactions are with proxies with the 2 millions dollars being wired in offshore.

Denial continues to be a river in Egypt.
_ _ _
Sadly you are just wasting your breath. There will never be a significant decline in home prices in Vancouver, but let’s just chalk it up to low interest rates, shall we?

#18 Kim on 12.19.17 at 6:02 pm

Garth, I am Chinese-Canadian and my wife is mainland Chinese (but has US citizenship). We both work hard. We pay our taxes. We don’t hate ourselves, nor do we hate the majority of hard working Chinese dudes.

However, there is a segment of the mainland Chinese population that drives up prices here in Vancity. There’s no denying it. The report by statscan is bunk. Why? Because of how they define ‘foreign’. People with PR, new immigrants, people who come here to study but buy multimillion dollar homes, they aren’t counted because they’re considered Canadian. How else could you correlate the fact that Vancouver proper has the lowest per capita income but one of the highest prices in the lower mainland? Or that West Van has high child poverty rates but multimillion dollar mansions. I doubt folks over there are getting a discount on their rents. The fact is, there are astronaut families, who come here, leave the wife and kids who declare zero income, and whose dad works overseas and doesn’t declare their income. Or better yet, these homes are owned by numbered companies like how our very own Morneau does it.

It’s not racist to point out facts. While locals have bought up the condo and townhome market (with Christy’s free money), the fact remains that the high end market is high because mostly of rich mainland Chinese looking to stash their wealth. now that their comrade Xi has decided to enforce the transfer of funds overseas, the buying has also conveniently stopped. There are some locals caught in this flipping/speculation game who will lose a lot but to think that “foreigners” only account for 3% of the market is stupid. Unless you decide that “foreigner” means those who have never immigrated here, or don’t have family members who are students, house wives, etc in this country.

#19 SimplyPut7 on 12.19.17 at 6:02 pm

Local speculators and flippers won’t listen to you Garth until their bank asks them to remove the investment property from their HELOC and Home Capital or some other non-bank/private lender will only give a loan at a rate of 12% a year.

#20 Marcus on 12.19.17 at 6:07 pm

My wife’s family and friends laugh at this “It’s not the Chinese” cry of ignorance. They being Asian and in the property market world wide know that a shit tin of PLA money has been funneled into BC, Wa State, Oregon and California. Bus loads of Asians going thru communities buying on first sight as well as sight unseen. This fueled the bubble and yes the rest of it was the govt and domestic speculation. Enjoy the pop. LOL!Never believe govt stats ……. ever.

#21 FOUR FINGERS WATSON on 12.19.17 at 6:11 pm

……………. and inflation is only 1.6 %. Right Garth ?

#22 Blacksheep on 12.19.17 at 6:15 pm

“Foreigner buyers like condos best (they’re easy to rent), but overall less than 1% of the condo stock in our 17 major cities is theirs.”
———————————
Across 17 major cities, sure, but what about just VAN & TO? Where the pricing insanity has occurred?

“Non-residents, defined as those whose principal residence is outside of Canada, owned 15.5 percent of condos built in 2016-2017 in Vancouver, and 11.3 percent in Toronto, Statscan data showed.

https://www.cnbc.com/2017/12/19/reuters-america-update-3-non-residents-focus-on-new-condos-in-vancouver-toronto.html

Prof. from Simon Fraser University said on CBC today,
(paraphrasing) “the only way to accurately track foreign ownership, is via Canadian income tax documents, as there are just to many loopholes being exploited, resulting in inaccurate foreign ownership numbers.”

#23 Newcomer on 12.19.17 at 6:19 pm

#3 Robert B on 12.19.17 at 5:22 pm
….

It looked like foreigners went to Condos in Toronto and Vancouver by over 7% of the sales…
————

Not quite. 7% of the owners live abroad. We don’t know what percent of recent sales that works out to. Some of those owners will be foreign investors, some will be people owning a pied-a-terre, and others will be Canadians who winter elsewhere, or who are working abroad, but have a condo as a home-base here. It would be interesting to see how this number compares in other cities around the world. My guess is that it is nothing remarkable.

#24 LivinLarge on 12.19.17 at 6:21 pm

“Realtors and builders got lucky and hit the jackpot for a few years when interest rates were dead.”…and let’s hope that a large proportion of the ones who got into the business in the last 19 years had the brains to sock a hell of a lot of their incomes in 60/40 portfolios because there will be plenty of them dropping like flies come the spring. This happened in 1990 and it wasn’t pretty and it has to happen in 2018 too. Just the normal result of a cyclical market correction.

Having been married to a R/E agent when the 1990 correction hit, I have zero faith that any of the thousands of recent agents had the stones to save over 50% of their commmissions so there’s going to be an enormous up tick in applications for welfare unless EI is available to the now unemployed agents and I don’t recall that it is.

The world won’t end anymore than it did from ’92-98 but it sure isn’t going to be pretty.

#25 Not the whole truth on 12.19.17 at 6:21 pm

You would expect home ownership in Vancouver to roughly match the demographics of the people living here. That is not the case. You would expect the faces on realtor signs to match the demographics of people living here. That is not the case. You would expect the photos of people lining up to buy condos presales to match the demographics of people who live here. That is not the case. You would expect people living in the most expensive neighbourhoods in the Lower Mainland to declare the largest incomes. That is not the case. I believe the truth I observe with my own eyes.

#26 Blacksheep on 12.19.17 at 6:21 pm

The same Simon Fraser Prof. also said today, that the percentage of foreign ownership of condos in Van, is currently over 19%, according to SFU research.

#27 Cdn Mom on 12.19.17 at 6:25 pm

Show me the numbers…
Show me the definitions…
Show me how many numbered companies own residential RE, besides apartment buildings…
Show me the beneficial owners of those companies…

Show me a link to all of this StatsCan data, before I’ll believe their conclusions. I tried to find that data today, but came up empty.

#28 Redrum on 12.19.17 at 6:25 pm

I love how you use false statistics when they support your biased opinion.

Actually they are the only stats. If you have better, please offer. – Garth

#29 Blame Game on 12.19.17 at 6:25 pm

Everyone wants someone to blame for their own failures. If owning a home is important to you, you can make that happen with even a mediocre job.

If owning a home in Kitsilano is important to you, then you need to be rich in capital. Sorry folks, that’s just life and life ain’t fair. Fortunately, you aren’t alone and there are many many Canadians who don’t have the capital to play in Kitsilano.

You can keep complaining about it or you can change your attitude. Realize there is a life outside of Kitsilano that is enjoyed by many many Canadians. You can still be successful in life without that V6K postal code, you know.

Millennials are entitled, no matter how frustrated they are by that expression. There is no doubt about it.

“I am mad and have every right to be, because you all have had it so much better than me! :'( :'( :'( “

#30 Matt F on 12.19.17 at 6:29 pm

Love it. I have been preaching this for years as well to my inner circle. As a 31 year old, I am surrounded by people who swore Chinese dudes were showing up to open houses with garbage bags of cash. This is Obviously not the case. Would have been way more of a dent in the market from the foreign tax.

Realtors and industry people will be hitting the media hard this week calling it fake results, numbered companies, blah blah blah.

It doesn’t take a genius to look at the relationship between Canadian citizens record debt levels and the cost of housing.

Looking forward to some properties out here in BC to go on sale in the coming years.

Thanks for fighting the good fight Garth.

#31 Hey, what's up Doc? on 12.19.17 at 6:31 pm

Garth, you are so full of it! Foreigners own well over 5%. And they have had a big impact on prices. Stats depend on how you measure and count things. There are very many resident stand-in buyers backed by foreign money. Don’t you know that? They will never be picked up by the counting system the Feds have used. And purposely so.

#32 OttawaMike on 12.19.17 at 6:31 pm

I mostly agree with your hypothesis on foreign buyers but not StatsCan’s methodology: telephone surveys.
Seriously? That data is reliable?

On another note,diid anybody notice the price plunge on long US treasuries today? Get ready for it. Cheap rates are toast with Trump Tax Reform.

#33 I'm Angry/Jealous And Will Pretend I'm Asian on 12.19.17 at 6:32 pm

Hey guys I’m Chinese and so is my wife and 100 billionaire corrupt relatives all living here buying up every property in the much desired nation you used to have.

Garth, you’re wrong we NEED to live in Canada because of the wonderful climate and kind hearted wonderful folk who are willing to sell their country to me. Canada has the most beautiful places like Winnipeg and Surrey and Hamilton near those old beautiful steel plants.

So your readers should not listen to you and not blame themselves and their gov’ts. We Chinese are the problem and because, like, I’m Chinese from Peiging and my wife is from Gangzhou near North Korea, so I will verify that FACT!

Sayonara as we say in China! I’m we are sorry for your lives sucking.

#34 Hey, what's up Doc? on 12.19.17 at 6:37 pm

Really full of it! If someone doesn’t agree with you, then they must be a bigot. Or a racist. With a narrow world view. Really?

#35 Ardy on 12.19.17 at 6:39 pm

Hey Garth, good if you can do a future post on how this will all end.

Record debt needs payback. Retirement savings the obvious casualty. Less spending=lower economic numbers in future years.

The market always goes up; but Greece’s is in the crapper. Will we be there in 35 years when mils near retirement?

Just considering the exit strategy. Would love your thoughts? Btw I’m a mil now 36 whose 1.5 years from being mortgage free on a$700K home (conservative since neighboring properties sold for$850K) after only 4.75 years of being an owner. [Clearly sucking up here].

Maybe I’ll send you my story someday. I’m diversified too, with a US index fund charging just 0.08% among international and CAD index funds. No preferred or bond exposure – counting the wife’s gold plated Fed pension fixed exposure for now. Will add those once house debt is cleared. Nuff for now.

RD

#36 Poloz on 12.19.17 at 6:42 pm

No wonder you had no comments for person #18 & 22?

Your so called stats are “fake news”.

Not my stats. The government’s. Go yell at them. – Garth

#37 Dillion Zambehauer on 12.19.17 at 6:43 pm

Ok so seriously then, who is buying the houses in Van?
Aliens? Average salary is $70k, houses are $2 million.

I’m all ears, please explain.

#38 Chaddywack on 12.19.17 at 6:45 pm

Someone needs to hold the real estate Boards and realtors accountable for this BS.

I was seeing an apartment to RENT….yes rent in Vancouver and a realtor is showing it. First of all she brings the other person before me and hands her a rental application in front of me to up the pressure. Then….get this…..she tells me that she has had interest in the apartment from “someone offshore” and asks me if I can go $200/month over the rental list price.

I walked, but they’re a big part of the problem. The foreign person myth is alive and well even in the rental market!

#39 LS in Arbutus on 12.19.17 at 6:46 pm

Living here in Arbutus neighbourhood in Vancouver with literally 1-2 empty houses on every block, I don’t buy that foreign buyers haven’t had a big impact on this market. Also the amount of flipping going on these past few years, is beyond incredible. Come live in the ‘hood.

That said, to the extent there are foreign buyers they are in the same boat as everyone else and they aren’t “special.” They buy with credit, either in their home country or in Canada and that’s currently playing out in the lack of sales here. Market is sliding.

Now just need to get onto beneficial ownership rules. Which will also be coming. Just a matter of time. Governments need their tax revenues. As well, money laundering is no joke. More transparency is coming.

#40 Confucius on 12.19.17 at 6:49 pm

#Fake News Again
#18 Kim

WELL SAID!

Why did StatsCan report on Vancouver and Toronto regarding “foreign ownership” and CHMC reports on Montreal with 7.6% foreign ownership in condo’s. C’mon, really?

StatsCan could not count the number of people in a room.

#41 Hans on 12.19.17 at 6:52 pm

Stats don’t lie…..but they sure don’t tell the truth either.

Case in point – Unemployment Stats – doesn’t include those that have “given up” looking for work. How exactly would one collect that information?

My bet is on collection of this data from baristas at the local Starbucks. Ask them how many people they see hanging out all day. Hahahah. Quality government data collection to go with inflation stats, taxation rates, foreign ownership stats, and other forms of doublespeak.

#42 millmech on 12.19.17 at 6:54 pm

#8 nosurprise
This is easy to figure out, a coworker bought a house in Pitt Meadows for $600,000, with $200,000 down(bank of Mom), three years later house reassessed at $850,000. Buddy then takes out $150,000 from his HELOC to buy investment condo for $300,000 that rents for $1200.Condo is reassessed one year later for $370,000.Buddy then takes $200,000 from home HELOC and $70,000 from gains on investment condo and buys another investment condo for $450,000 that rents for $1500.
I know quite a few people who are doing this and are not cash flow positive but alas real estate only goes up and the Government would never let interest rates rise, they believe this 100%

#43 LS in Arbutus on 12.19.17 at 6:54 pm

Flop, I’ve not been looking at the market much lately as I can see it’s sliding and that’s all I need to know. Per @Hutchyman on Twitter can see LOTS selling for 82% – 90% of assessed. Can’t see how it’s going to “turn around….”

You’ve probably seen this one, but too good not to post.

3964 W 21st
Bought May 8 *2017* $2.812 million
Assessed $2.865
Listed $2.980 million

https://www.remax.ca/bc/vancouver-real-estate/na-3964-w-21st-avenue-na-wp_id194245895-lst/

https://www.bcassessment.ca/Property/Info/QTAwMDAwMEg0QQ==

#44 oncebittwiceshy on 12.19.17 at 6:54 pm

#4 nosurprise: “Hey Garth, you know how the banking system works right?”
<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<

Yeah, buddy, we all know how the banks work.
https://www.bloomberg.com/news/articles/2017-05-23/in-home-capital-s-mortgage-mess-blame-the-unlucky-brokers

"Home Capital Group Inc. disclosed that 45 independent brokers submitted loan applications that misstated borrowers’ income and other details."
<<<<<<<<<<<<<<<<<<<<<<<<<<<<

http://www.huffingtonpost.ca/2017/01/11/mortgage-fraud-canada_n_14103764.html

Canadian Mortgage Fraud Spikes 52% As Home Prices Soar
<<<<<<<<<<<<<<<<<<<<<<<<<<<<<
https://betterdwelling.com/1-in-5-canadian-homeowners-commits-mortgage-fraud-says-top-broker/
<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<
https://www.theglobeandmail.com/real-estate/mortgage-fraud-rising-in-canadas-hottest-housing-market/article33570435/

"The majority of mortgage-fraud applications have come from Ontario and British Columbia, where home prices have risen the most in recent years."

#45 Bela Pelosi on 12.19.17 at 7:00 pm

“The 15% tax in Toronto and Vancouver was obviously race-based and we should all be ashamed of it. Of course, it failed. So did we.”

I’m the person responsible for this tax. I originally got the information for it from the most knowledgeable journalist on the South China Morning Post, Ian Young. Don’t believe me then ask him or Tom Davidoff or Steve Saretsky, ah but this info won’t be posted here because of your policy of censoring anyone who knows more than you do.

#46 People are Strange on 12.19.17 at 7:00 pm

Everybody, stop fretting! Harold the jewelry buyer is handing out mortgages.

#47 People are Strange on 12.19.17 at 7:09 pm

So at this rate 2 bedroom condos will cost as much as 2 bedroom bungalows. Or are we already there. The bungalow doesn’t come with $700 condo fees. Decisions…decisions!

#48 Howard on 12.19.17 at 7:09 pm

Remember last year when John McCallum claimed he conducted a survey that showed Canadians overwhelmingly favoured massive increases to our immigration intake? Except, oh my, this survey/consultation/whatever he called it was a complete fabrication. Bottom line, be skeptical of what comes out of a government orifice.

McCallum did not do that, nor was it his survey. – Garth

#49 T on 12.19.17 at 7:11 pm

2013 was not the apex is house prices. Get a grip on reality Mark.

You continue to push this idea of 2013 apex prices. It’s just an idea in your head with absolutely no data to back it up. Apex was 2016 on the west coast and 2017 in the gta.

I don’t know what agenda you are pushing with your delusion, and where you find all this time to do it, but it’s time to stop.

#50 Another Annoying Millennial on 12.19.17 at 7:12 pm

Government stats show Asians are not to blame for rising house prices. #fakenews
More seriously, only the realtor loving crowd believed their lies. Don’t ask a barber if you need a haircut.

#51 RE_Investor on 12.19.17 at 7:12 pm

I remember this house was bought by a foreign student (June2016) studying at Humber College Lakeshore campus. He liked the decor of this 2 million dollar lakeside home, that his overseas parents purchased it, sight unseen. This was put for sale this August2017. Still unsold. May have to drop price again.

Here’s the listing realtor website. All great RE agents.

https://www.realtor.ca/Residential/OfficeDetails.aspx?OrganizationId=103644#Page=2

#52 After Communism on 12.19.17 at 7:14 pm

The shift toward more socialism causes the cost of houses to rise. The more people who get housing without producing a house, for example, the higher the cost of houses. The bigger the government, the taxation, the higher the cost basis of everything.

The immigrants do vote 100% for Liberal-secularism-leftism and displace the born-here, which vote 50% Conservative-Christian-rightism, changing politics over time.

Replacing 27% of the population over the last 30 years with foreigners (at 0.8% immigration per year), instead of born-here Canadians, has changed the political price structure of Canada permanently.

#53 When the Whip Comes Down on 12.19.17 at 7:15 pm

So we have a key distinction here which is between the residency of the buyer and whether THE CAPITAL is their own. Or whether the resident is simply a proxy/nominee, whatever you want to call it, and THE CAPITAL is NOT their own. I suspect the government has no practical way to determine this difference. However, its a critical difference to highlight in the argument.

#54 Chaddywack on 12.19.17 at 7:15 pm

Here’s how the stats are being spun in Vancouver.

20% of NEW condos.

http://www.cbc.ca/news/canada/british-columbia/vancouver-non-residents-statistics-canada-figures-1.4456657

#55 Scully on 12.19.17 at 7:15 pm

Ahhh Garth, you will be nailed to the proverbial cross tonight! Fear & greed will be seen through anecdotal comments from people who don’t want deal with the RE- ality that low rates and lax lending can bring. Next they’ll stop blaming foreigners and start blaming boomers. Lol!

#56 Doug t on 12.19.17 at 7:16 pm

This stuff doesn’t matter today – I have to put my dog down tomorrow

RAnothing

#57 Porsche on 12.19.17 at 7:16 pm

I hear the Chinese dudes have moved to a new playground not far away, it’s called Seattle.

#58 robert james on 12.19.17 at 7:18 pm

# 18 Kim It will be interesting to see if the politically correct ,, know nothing about Vancouver,, posters slam you with the usual race card.. lol

#59 cjv604 on 12.19.17 at 7:18 pm

Garth, please address the obvious loop holes around buying real estate through proxies, the students who own 50 million dollar mansions, the rampant money laundering through BC casinos, or how Richmond BC is one of poorest postal codes in metro vancouver-yet everyone seems to own 3 million dollar houses. Also touch on why you cherry pick results of studies that only feed your ridiculous narrative that offshore money is not playing a role in $1200 per sq/ft condo prices?

What kind of locals do you think can afford these homes?

http://www.cbc.ca/news/canada/british-columbia/vancouver-non-residents-statistics-canada-figures-1.4456657

#60 Nonplused on 12.19.17 at 7:19 pm

I think for any market to attract speculators there has to already be a localized bubble. By that I mean the regular participants in the market have to cause the price rises before speculators would become interested. So for example when gold went to $1900 and ounce and then crashed that was speculators piling in and then cashing out, but it could only happen because of the strong support gold was already receiving during the now defunct “gold bug” era.

Gold, like any other mined commodity, will always gradually rise in price due to the way mining works. The best ores are mined first because that’s cheapest, but as those are depleted they have to mine progressively more expensive deposits. However there is a limit because as the price rises demand falls. Economics 101. So people who buy gold as a store of wealth are right to expect that it will rise in price over time but not at a rate higher than general economics would dictate. Maybe at inflation or a bit above. Except, of course when a mania sets in.

The same is true of housing, or not housing in particular because wooden houses are a depreciating asset; you have to replace them eventually so their terminal value is always zero, so I mean land.

Land is scarce, and the closer it is to a major downtown center, the scarcer it is. So the land can be expected to rise in value as the city expands and the population grows. Even in a city like Calgary where we are surrounded by hay fields in every direction that produce maybe $10,000 a year per quarter so they are essentially not worth much, the price goes up and up because they are close to town. But the price of land within walking distance of downtown goes up even more because it is scarce. It goes up to the point where it is worth it to tear down the existing structures and put up something bigger, like a condo. This is because as the city grows it becomes increasingly inconvenient to live next to the hay fields.

The reason the price of land went so ballistic in Vancouver is because for the most part they have a 2nd world transportation system there. Some people spend 2 hours commuting 1 way. So land located near the core got very expensive. And once the trend was established in came the speculators, most of them local.

Land prices also rose in the burbs. I like to think of it as like putting up an old stile tent with a pole in the middle. When you push up the middle, the rest of the tent rises too just not as high.

I think Garth’s purchase of the Belfountain store was brilliant because buildings like that last so much longer than a wood structure, and also it produces revenue. However even there he had to spend significant money renovating, and the land probably won’t go up in value as fast as something downtown would. But a wood structure is worth practically zero after 70 years, the land is all you’ve got left at that point. So don’t buy houses, buy land. Location, location, location.

#61 Porsche on 12.19.17 at 7:20 pm

#32
What the f%$k is Liberal-secularism-leftism?

lol

#62 Kia driver on 12.19.17 at 7:21 pm

http://www.cbc.ca/news/canada/montreal/montreal-real-estate-foreign-1.4455983

http://www.cbc.ca/news/canada/montreal/montreal-construction-boom-economy-politics-1.4377497

#63 Fatman on 12.19.17 at 7:22 pm

Conservative-Christian-rightism
Is there no Liberal-Christian-leftism?

#64 Doctor Data on 12.19.17 at 7:24 pm

#162 Dr. Dolittle 
“Researchers confirmed .. formaldehyde in McMansions….. affect human behavior…..”

†**********
Government mind control via building materials is well researched in the alt media. The Roman oligarchy used lead in the plumbing to subjugate the masses, today’s equivalent is the highly poisonous PCV’s. Trump banned the use of Canadian softwood in holmes because it harbors the tiny socialist mites and their welfare queens. Look it up.

Don’t risk insulting your intelligence. Or yourself … I came this close yesterday…..

#65 Leichendiener on 12.19.17 at 7:24 pm

We have seen the enemy and they are us. Yes, of course, bus loads…. blah, blah, blah. It’s now all about servicing debt or the RE market heads to the rhubarb. In the face of rapidly rising US interest rates, the latter is now a certainty.

#66 Locality on 12.19.17 at 7:25 pm

Interesting article from CBC. Non-residents snapping up 20% of new-build condos in the last couple of years in Vancouver and Richmond.

That would actually give some credence to the claim that non-resident buyers have been a big factor on prices in the past couple of years. The timing of the spike in non-resident ownership coincides with the price spike.

http://www.cbc.ca/news/canada/british-columbia/vancouver-non-residents-statistics-canada-figures-1.4456657

#67 Howard on 12.19.17 at 7:26 pm

Honest question : the use of proxies (visiting students, etc) to buy real estate and therefore not counted as a foreign buyer in the stats, as well as dodging the 15% tax. Is it actually illegal for them to do that? Is it considered fraud, or simply a rich uncle back home giving a nice gift to the 19 y/o UBC student?

I’m confused as to whether the laws needs to be changed, or whether existing laws simply need to be enforced.

Maybe you should worry about how the Bank of Mom allowed so many unqualified buyers to come up with 20% deposits to avoid CMHC insurance that CMHC volumes crashed 40% and the banks ended up with risk-riddled portfolios. Now we have a universal stress test as a result. Keep your eye on what actually matters. – Garth

#68 Becky on 12.19.17 at 7:29 pm

#18 Kim
I agree with everything you said.

I also agree with Garth’s points about low rates and local speculators, sure, but to say that foreigners had no impact on rising property prices in Van and Toronto is ridiculous!!! Of course they did, and there’s nothing racist about that true statement. To remind you, the BC provincial government found that about 15% of buyers in Van area were foreign before the new tax was introduced.

I would also love to see a list of all the tools, timing and criteria Stats Canada used to come up with these obviously not accurate numbers and how exactly did they identify foreign buyer from non foreign buyer. I also wonder from which point in time did they start collecting data. Also wondering if they bothered to track the source of where the money that was used to buy properties came from/ wired from. All in all- I’m extremely skeptical about these “findings”

There’s also a reason why the Chinese government pushed in new policies to severely restrict the funds that are leaving China for the purpose of buying offshore properties, and it surely doesn’t make it seem like Chinese buyers are as insignificant as Garth likes to describe them.

Not to mention the Toronto and Vancouver condo builders who were sending sales teams to Hong Kong and main land China and heavily advertising all over the cities (there’s pictures and articles of that all over- google it) – definitely NOT because Chinese buyers are so insignificant here!

Sorry Garth, love your blog, read it daily, agree with most of the things you say, but I’m not in on this one.

Why would you? As I said last week, prejudice stains deep. – Garth

#69 Danny on 12.19.17 at 7:30 pm

Garth thanks for these new stats.
Yes low interest rates for a time period well over the original time line intent surely brought in a large number of people who could qualify for a mortgage….which in turn caused the unprecedented price war…….flames that realtors fanned.
Now comes the bad news…..the life time sentence of mortgages owing people…….very little or no inheritance money for generations 50 years from now.
Just drove along the Lakeshore Road neighborhoods from Etobicoke to Cabbagetown……unspeakable number of high rise towers under construction…….many to be completed by end of 2018……interesting to see if the existing unusual flood of ‘for sale condos” during this season which is usually low sales will just continue for the whole year….in 2018!
Even next few months will probably speak volumes……if as you say money will flow south as you just said. …”US tax reform may lure investment bucks away ”

Maybe the Trump Family will get really nervous as investigation into ‘Gov” emails reveal some unlawful stuff.
Remember Donald pushed the FBI to investigate Hilary’s email……now he doesn’t want his family emails reviewed.
Two faced Donald …….what is good for the goose is good for the gander!

#70 mark on 12.19.17 at 7:31 pm

It does not give a whole lot of credibility saying there “stats canada” figures or stats and then splatter them on a blog. If there not accurate why publish them?

As opposed to what? Stats Mark? – Garth

#71 oncebittwiceshy on 12.19.17 at 7:31 pm

#31 Bela Pelosi
#23 Dillion Zambehauer
#4 nosurprise
#22 Blacksheep
#26 Confucius
#5 Fake News Again

Okay, kids, I’ve included a link to a local Surrey man that owns 10 properties. Can you post a link with a Chinese investor owning as many. Anyone, anyone, anyone.

http://vancouversun.com/news/local-news/surrey-man-sentenced-fined-for-real-estate-income-tax-evasion

“B.C. title documents show that Dhudwal currently owns 10 properties in Surrey, valued at $8.8 million in total. In various mortgage documents for these homes, Dhudwal lists his occupation as “self-employed” and also “janitorial,” as well as “sawmill worker.”

#72 Howard on 12.19.17 at 7:37 pm

#67 Howard on 12.19.17 at 7:26 pm
Honest question : the use of proxies (visiting students, etc) to buy real estate and therefore not counted as a foreign buyer in the stats, as well as dodging the 15% tax. Is it actually illegal for them to do that? Is it considered fraud, or simply a rich uncle back home giving a nice gift to the 19 y/o UBC student?

I’m confused as to whether the laws needs to be changed, or whether existing laws simply need to be enforced.

Maybe you should worry about how the Bank of Mom allowed so many unqualified buyers to come up with 20% deposits to avoid CMHC insurance that CMHC volumes crashed 40% and the banks ended up with risk-riddled portfolios. Now we have a universal stress test as a result. Keep your eye on what actually matters. – Garth

————————————-

No arguments with any of that Garth. Canadians are financially illiterate and the government has scandalously aided that illiteracy.

I was just curious how the law views the use of resident proxies to purchase real estate on behalf of offshore rich people.

#73 Smor's on 12.19.17 at 7:41 pm

What the Stats Canada figures fail to show is where foreign money is used to by a Canadian resident a piece of real estate.

Proxy ownership is hard to track. FINTRAC reporting requirements are routinely violated by real estate agents. See link (apologize as I don’t know how to add the link properly)

http://www.cbc.ca/news/business/fintrac-real-estate-money-laundering-1.3761343

Also, lawyers are exempt from FINTRAC reporting requirements.

Lawyers are not exempt. – Garth

#74 For those about to flop... on 12.19.17 at 7:43 pm

Pink Snow falling in Vancouver.

Either that or one of my neighbours is leaking transmission fluid…

M43BC

“Mapping Internet Prices Around the World

Bill Gates said that “the Internet is becoming the town square for the global village of tomorrow.” He’s right, but that doesn’t mean that internet is affordable everywhere yet. We recently came across a report showing that broadband access in the Southern Hemisphere is more expensive than the north. It also showed that some countries have mind-blowingly expensive internet and that highly affordable internet can often be found in the most surprising places. (The world’s cheapest internet can be found in Ukraine – and Iran!)

North America
In North America, things are pretty consistent. You can move around the continent without too much variation in internet costs. Of the NAFTA nations, Mexico is the cheapest. The average cost of broadband internet there is only $26 per month. On our visualizations, we clumped the Caribbean in with South America, except for the Bahamas and Bermuda. Internet in the Bahamas ($77) is $11/month more expensive than in the U.S.A ($66). Bermuda’s monthly average is over $126/month.

South America
This map contains 44 countries and territories. Overall, internet here is pretty affordable. On the South American mainland, internet prices average just over fifty bucks monthly. The islands, however, have remarkably inconsistent pricing. Some have internet costs 2-3x that of their immediate neighbors. For instance, the Dutch side of Saint Martin (Sint Maarten) has a monthly average of $73, while the French side’s is only $20!

Asia
Overall, the world’s largest continent has very affordable internet. Notably, China and India offer their 2.7 billion combined residents broadband for less than $40/month, on average. In a few Asian countries, such as Brunei and Laos, internet costs skyrocket to roughly $250/month, but these are the exceptions, not the rules. Elsewhere, broadband costs are more in line with the Americas. Extremely cheap internet is provided in Russia ($10), Syria ($12), Kazakhstan ($13), and Iran ($5.40). These countries are reminders that a reputation for technological advancement does not necessarily result in the most affordable internet.

Africa
Overall, Africa is the worst place to have internet access. Many countries didn’t even have data to review. The original report says: sub-Saharan Africa fared worst overall with almost all of the 31 countries measured found in the most expensive half of the table, 16 of them in the most expensive quarter. The extremes are huge. In Egypt, broadband costs less than $15 monthly, but in Namibia it costs over $450. In Burkina Faso, the priciest of all, internet costs an astonishing $963 per month! On the other hand, a spacious apartment in the country’s capital will only cost you about $460/month.

Oceania
All countries in Oceania are among the bottom half of nations when it comes to internet affordability. Australia ($60) and New Zealand ($65) are comparable to most Western European nations, but the most interesting case in Oceania is Papua New Guinea, where internet cost a staggering $590 each month. A few years ago, internet cost over 225% of the average annual income. Prices are nowhere near that high today. (We found this incredible research paper that explains why.)

So how much does internet cost in your country? ”

https://howmuch.net/articles/cost-of-broadband-internet

#75 Dolce Vita on 12.19.17 at 7:44 pm

STILL and mind boggling that people posting they do not believe there will be a significant decline in YVR.

Hello: Avg. price changes already -7.4% y/y in Vancouver, -12.5% quarterly and -16.4% in the past month (the latter seasonal but not y/y, that is bad news).

1 economic shock will create the largest devaluation in Cdn. RE history as this is its largest bubble, ever.

Look at history of RE in Canada, there has NEVER been a soft landing, never, ever; rather, a rapid crash.

All for it. Wipe the smile off of the smug RE investors on this Blog and that will happen before 2018 is done.

#76 Still here on 12.19.17 at 7:46 pm

“Nine of ten real estate sales are between consenting Canadians – every one adding new debt.” – its worse – 19 out of 20…

#77 The FB stats are BS on 12.19.17 at 7:47 pm

Sorry Garth but the stats are missing all the foreign money hiding behind numbered companies, family and friends buying, etc.

#78 Happy Housing Crash Everyone! on 12.19.17 at 7:49 pm

For those who don’t know I hate SHYSTERS. I really hate how useless they are and the lies they repeat over and over. Like the Chinese boogeyman buying up Canada. Then ..Why are we seeing crashing housing prices and for sale signs littering the GTA for MONTHS and months and months now? most of which remaining UNSOLD, UNWANTED. CMHC and cheap easy credit is the main reason. If this not true explain crashing prices and UNSOLD homes all over GTA? Why isnt the boogieman buying up homes without having to fight other Canadian bidders? Empty open houses everywhere. I can’t believe how uneducated SHYSTERS have tricked the masses.

BTW Garth you know the government isn’t stupid . They can see through SHYSTER lies and KNOW the masses are so stupid that just by imposing a tax on the boogeyman it stop stupid people from themselves. All the SHYSTERS here know that’s true. I HATE SHYSTERS… I HATE YOU!

#79 Blacksheep on 12.19.17 at 7:49 pm

“Okay, kids, I’ve included a link to a local Surrey man that owns 10 properties. Can you post a link with a Chinese investor owning as many. Anyone, anyone, anyone.”
—————————
I’ll bite.

Dhudwal dude or any other Canadian citizen can own a 1000 houses in Surrey, who gives a shit?

The topic of todays blog was the Gov data release on foreign RE ownership in Canada and Garth’s interpretation of it.

Relevance?

#80 chopstix on 12.19.17 at 7:51 pm

garth you’re gloating?…with selected data given perhaps.
i think kathy tomlinson (globe and mail) summed it up well today on these ‘findings’:
”No mention from data collectors of proxy ownership factor, where property is in name of family member who is Cdn permanent resident (student, spouse) but foreign buyer is beneficial (real) owner. Significant in #VanRE”
https://twitter.com/KathyTGlobe

#81 Blacksheep on 12.19.17 at 7:59 pm

Once # 71,

More importantly, why single out “a Chinese investor”

Is Mr Dhudwal an ‘Indian investor’?

Lets just stick with the term ‘Foreign investor’, ethnicity or country of origin is irrelevant and only serves to distract from the point of the discussion.

#82 the Jaguar on 12.19.17 at 8:01 pm

Real estate, like every other relationship in life is about compromise. It’s perfectly natural to want a home base that provides comfort and is a reflection of who you are, where you keep those (hopefully few) possessions that you find personally meaningful, and access to other interests, be it green spaces, hip neighbourhoods with shops and restaurants, schools for your kids, dog parks for your other kids, and maybe also is small part of a strategy that that could turn out to be a good long term investment. But compromise it is. You own it, but it also owns you. A wise person once told me the smart move is to invest in the smallest square footage that will meet your requirements and basic interests. The key is understanding yourself and what will meet those interests. I have never understood what people who think they need 3500-4000 square are running from…
The maintenance of it all is overwhelming, just as a life spent worrying about pleasing others at the expense of your own desires is overwhelming. And ultimately soul destroying. Granite can’t compete with forest bathing.

#83 Bc36 on 12.19.17 at 8:03 pm

I actually dont care what the real cause of our insane prices is at this stage; I just want the truth and this is not it.

Garth just because these are the only stats out there does not make them right and I don’t understand why you blindly follow this survey as fact. We won’t get to the bottom of this until the CRA gets involved in a big way with lifestyle audits on everyone who declares zero income and owns a $2M house.

#84 Dolce Vita on 12.19.17 at 8:04 pm

Of course over the top BUT what $1000 of these stocks would be worth Sept. 2013 (view chart):

https://www.fool.com/investing/general/2013/09/20/the-best-performing-stock-since-1980.aspx

So much for the genius single asset RE strategy and those that think they are.

What balanced investments over time can look like…pay attention Millennials that have time on their side. Do not listen to Boomer Ma & Pa.

Hint: $1000 in Eaton Vance stock 1980 = $1.3 MM in 2013.

Imagine what that $20,000 downpayment on a 1980 home would be worth today if instead some of that had been diverted to stock purchases.

Listen to Garth Millennials that have time on their side. The above should be a wake up call of what can be in 40 years time.

#85 For those about to flop... on 12.19.17 at 8:05 pm

pm
Flop, I’ve not been looking at the market much lately as I can see it’s sliding and that’s all I need to know. Per @Hutchyman on Twitter can see LOTS selling for 82% – 90% of assessed. Can’t see how it’s going to “turn around….”

You’ve probably seen this one, but too good not to post.

3964 W 21st
Bought May 8 *2017* $2.812 million
Assessed $2.865
Listed $2.980 million

https://www.remax.ca/bc/vancouver-real-estate/na-3964-w-21st-avenue-na-wp_id194245895-lst/

https://www.bcassessment.ca/Property/Info/QTAwMDAwMEg0QQ==

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

Hey LS ,I’ve missed you!

I did a couple of CONFIRMED PINK SNOW posts and asked you if you wanted to polish the numbers.

Anyway the house you put up I did a post on it already.
Maybe a week or so ago,some slow learners out there.

As you highlighted people still trying to make a buck in segments where the tide has turned and that buyer only bought it in May and had it back on by August if my memory serves me correct.

I previously wrote a post about the amount of Pink Draws in my study, where the seller didn’t lose after expenses were forked out but they didn’t make any profit either.

These people might feel hard done by at the moment, but if things continue in the same vain then perhaps one day in the not too distant future then they might eventually realize that they dodged a financial bullet.

The second part of this is next Spring or whenever if the latest buyer purchased for speculation,then how do they fair having paid say 6/7 percent more than the previous guys and into a deteriorating market.

I’m not sure the numbers will be that high as I suspect a lot of owners will be stubborn and try and wait it out,but I’m sure at some stage I will be forced to publish some repeat offenders…

M43BC

#86 Look deeper at the stats on 12.19.17 at 8:06 pm

Another narrative will emerg in the coming days about the stats released today. Yes it’s 5 percent of the existing stock but of the properties bought and sold this year it’s closer to 25 percent So a quarter of new builds coming on the market are foreign buyers. This doesn’t even include proxies. It’s all there.

#87 SW on 12.19.17 at 8:07 pm

#41 Hans on 12.19.17 at 6:52 pm
“Stats don’t lie…..but they sure don’t tell the truth either.
Case in point – Unemployment Stats – doesn’t include those that have “given up” looking for work. How exactly would one collect that information?”

Well you can hang around Starbucks if you want, but I’d look up the trend in Canada Labour Force Participation Rates.

Fwiw, it’s about 65% which means that at least 35% of us are not gainfully employed…whatever that means. They can’t all be ageing slackers like me :-)

#88 Tony on 12.19.17 at 8:08 pm

Buying and selling condos is the surest way to go broke in Vancouver and Toronto. Anyone who would pay $1,000,000 for something that costs $50,000 to build must be devoid of all brain cells and have a strong dislike for money.

#89 Lorne on 12.19.17 at 8:08 pm

#68 Becky

#18 Kim
I agree with everything you said.

I also agree with Garth’s points about low rates and local speculators, sure, but to say that foreigners had no impact on rising property prices in Van and Toronto is ridiculous!!! Of course they did, and there’s nothing racist about that true statement. To remind you, the BC provincial government found that about 15% of buyers in Van area were foreign before the new tax was introduced.

I would also love to see a list of all the tools, timing and criteria Stats Canada used to come up with these obviously not accurate numbers and how exactly did they identify foreign buyer from non foreign buyer. I also wonder from which point in time did they start collecting data. Also wondering if they bothered to track the source of where the money that was used to buy properties came from/ wired from. All in all- I’m extremely skeptical about these “findings”

There’s also a reason why the Chinese government pushed in new policies to severely restrict the funds that are leaving China for the purpose of buying offshore properties, and it surely doesn’t make it seem like Chinese buyers are as insignificant as Garth likes to describe them.

Not to mention the Toronto and Vancouver condo builders who were sending sales teams to Hong Kong and main land China and heavily advertising all over the cities (there’s pictures and articles of that all over- google it) – definitely NOT because Chinese buyers are so insignificant here!

Sorry Garth, love your blog, read it daily, agree with most of the things you say, but I’m not in on this one.
………
Why would you? As I said last week, prejudice stains deep. – Garth
………
You have to stop using this “prejudice” argument against anybody who disagrees with you, Garth! It holds little water, especially when many of these people are on the ground floor on the west coast and are seeing what is happening….as opposed to being in the centre of the universe, in Toronto. Not only that, but many are born in Asia to boot and have a far better feel for the mentality of that part of the population of this planet!

#90 Willy H on 12.19.17 at 8:11 pm

“Now the government backs me up. Non-beavers own just 3.4% of the properties in Toronto and 4.8% in Van.”

Not too surprised by these percentages, however we have no context. How would this compare to other cities of a similiar size in the USA and Europe? Cities like Chicago, Philadelphia, Boston, Atlanta, Munich, Frankfurt, Lyon etc ….

Yes, these percentages are rather low, but what is the full impact of these foreign buyers in our key markets? A small percentage can have a much larger effects.

We are still data poor in my opinion. We cannot make any meaningful assessments at this point.

From what I have read 10% of London, UK real estate transactions are to foreigners and this is a city that is considered a world financial capital (for now!*) with major cultural and historical assets that eclipse anything the GTA or GVA have to offer.
*pending Brexit!

“I only believe in statistics that I doctored myself”
― Winston S. Churchill

“Lies, damned lies, and statistics”
– a phrase popularized by Mark Twain

#91 FOUR FINGERS WATSON on 12.19.17 at 8:16 pm

#28 Redrum on 12.19.17 at 6:25 pm
I love how you use false statistics when they support your biased opinion.

Actually they are the only stats. If you have better, please offer. – Garth
……………………….
When you live in the middle of it we call it “ observing the obvious “. But people with cognitive dissonance have trouble with that. Ahem……..

I’ll take that as a no. Figures. — Garth

#92 cramar on 12.19.17 at 8:20 pm

Interesting comment on Global National this evening re. the current subject and the foreign-buyers tax. They said a way foreigners are getting around the tax is that it does not apply to pre-built homes. A foreign buyer pays for a house or condo before construction begins. Then sells it just before completion. Obviously for a profit.

Trouble is this will only work in an inflating market. They gave stats on how much YVT and TO real estate has gone up over the last 5 years, ignoring the fact of the drop in this past year.

#93 Tony on 12.19.17 at 8:21 pm

Something that hasn’t been discussed on this blog or any other financial blogs is residential real estate is falling in China. The fallout from this means the Chinese will likely unload their worldwide holdings of real estate before they sell local properties in China. The ones maxed to the hilt and looking at bankruptcy will be looking to unload worldwide real estate holdings.

#94 Dan on 12.19.17 at 8:23 pm

Sure – Over 20% of new condos in Vancouver and Richmond owned by non-residents. But, that doesn’t play a part in the crazy prices.

Not sure who you’re trying to protect here, Garth. Let the data speak for itself.

http://www.cbc.ca/news/canada/british-columbia/vancouver-non-residents-statistics-canada-figures-1.4456657

#95 TheSecretCode on 12.19.17 at 8:26 pm

Re: #42 millmech

Exactly. That is why prices don’t have to crash – not rising anymore presents a huge problem when you are net negative and those rent number are ridiculous. I bet buddy is not claiming the rental income to the CRA either.

#96 dr. talc on 12.19.17 at 8:29 pm

I believe fintrac is hoax management. But fintrac is the law, it’s in place and operational- everyone complies. And non resident vendors have a cash hold back until tax filing, that’s also the law- conclusion:’foreign buyers’ is a red herring argument

http://www.fintrac.gc.ca/intro-eng.asp

#97 akashic record on 12.19.17 at 8:30 pm

Politically motivated government stats are nothing new.

This government makes even appointments to satisfy ideological gender stats above all other considerations, like merit.

Of course, there is only one stats.

#98 Trojan House on 12.19.17 at 8:31 pm

Why would any foreigner want to buy real estate in Canada??!! It’s a freezing cold, arctic tundra for 6 months of the year. In fact, I’d be willing to trade houses with any foreigner who lives well south of the 49th parallel!

#99 AGuyInVancouver on 12.19.17 at 8:32 pm

#28 Redrum on 12.19.17 at 6:25 pm
I love how you use false statistics when they support your biased opinion.

Actually they are the only stats. If you have better, please offer. – Garth
_ _ _
“There are three kinds of lies: lies, damned lies, and statistics.” – attributed by Mark Twain to Benjamin Disraeli

#100 Long-Time Lurker on 12.19.17 at 8:32 pm

#102 Nonplused on 12.19.17 at 1:16 am

The economy, 50 years from now, will not run primarily on carbon based fuels. But what will it run on?

>Hopefully ITER (nuclear fusion).

https://www.iter.org

At least now I can just skim through the comments and look at what’s interesting and ignore the rest. Hi, to the people who were on here before the comments section went downhill.

#101 Bezengy on 12.19.17 at 8:39 pm

I hope whomever is buying that Vancouver real estate keeps buying. With only four have provinces left, three of which are dependent on oil, it seems BC is the last have province we have left, but with 25% of it’s economy based on housing, it will soon join the gang. So we’ll all officially be have not provinces. The socialists will be happy as we’ll all be poor. Hope everyone is planning on having a garden.

#102 paracho on 12.19.17 at 8:39 pm

Once again . Well said !
We have no one to blame but the local market and local participants . It was irrational and woven by cheaoermoney and easy mortgages . The party is starting to die down and soon the hangovers will start .

#103 For those about to flop... on 12.19.17 at 8:48 pm

Recent Sale Report.

Smartalox might enjoy this one.

2938 Discovery st,Vancouver.

Originally asking 3.9 then 3.4

Just sold for 3.2

Well it’s almost assessment time and a lot of people will be eager to see what the recommended retail price is for their property.

Then when they list next Spring they will be lucky to get anywhere near it.

What a Discovery that will be..

M43BC

https://www.zolo.ca/vancouver-real-estate/2938-discovery-street

#104 genbizx on 12.19.17 at 8:52 pm

I would need to know more about how those stats were gathered, Garth. I’m not eager to blame anyone but stats are not to be blindly trusted. Our stat gathering apparatus across the country is not what it used to be, I’m sure you’re aware. There are ways to “own” too that never show…nobody cares either way though. The seriousness and level of abuse of our system is scary and not even on the radar of people we entrust with safeguarding it.

#105 will on 12.19.17 at 8:53 pm

just for something completely different, check out this about japan RE. main points: house is worthless after mortgage paid off; construction boom is continuous; japanese accept all this.

https://www.theguardian.com/cities/2017/nov/16/japan-reusable-housing-revolution

#106 For those about to flop... on 12.19.17 at 9:03 pm

Recent Sale Report.

Smartalox might enjoy this one.

2938 Discovery st,Vancouver.

Originally asking 3.9 then 3.4

Just sold for 3.2

Tax assessment 3.9

Well it’s almost assessment time and a lot of people will be eager to see what the recommended retail price is for their property.

Then when they list next Spring they will be lucky to get anywhere near it.

What a Discovery that will be..

M43BC

https://www.zolo.ca/vancouver-real-estate/2938-discovery-street

#107 Paul on 12.19.17 at 9:05 pm

95 TheSecretCode on 12.19.17 at 8:26 pm

Re: #42 millmech

Exactly. That is why prices don’t have to crash – not rising anymore presents a huge problem when you are net negative and those rent number are ridiculous. I bet buddy is not claiming the rental income to the CRA either.
—————————————————————–
Rental income? Do you mean claim the loss.

#108 TheSecretCode on 12.19.17 at 9:06 pm

People are still arguing if YVR prices will fall? Hello!!!! SFD’s have been dropping six figures per house all year. Condo market last leg kicking.

Broke home owners trading sideways doesn’t cut it…you still need new entrants, otherwise you have big problems.

BC Assessment will tell you otherwise and make you feel good…these guys lag for so many years behind and then when 2009 hits they freeze the assessed values….. they are going to get your tax money.

The SFD market in YVR died in the spring of 2016.

Most already overlook YVR these days. Anyone not rooted for more than a decade has already moved away.

YVR was good in the late 90’s mid 2000’s…anyone left now just complains about the affordability that dominates their life – forcing some to work 2, 3 jobs. Now that is living the dream.

I have some skin in the YVR game. Rising house prices has been a nice payoff but is a total scam.

And I can tell you first hand that the prices didn’t take a major upswing until New Coast Reality started showing up in the mailbox.

My BC Assessed property value jumped 375K in one year 2015-2016 for a piece of garbage 1200sqft rancher from the 70’s that was ready to fall over. I put in some nice laminate though for about 2K.

One thing that will continue to deteriorate in Vancouver is the standard of living while costs increase. Again, rising house prices are a scam…and the banks run it.

Head to Montreal, where people talk about and eat good food and just live life.

#109 Karma on 12.19.17 at 9:07 pm

“Non-beavers own just 3.4% of the properties in Toronto and 4.8% in Van. Yawn. That equals 3% of the value of all GTA houses and 5.1% of those in the Lower Mainland.“

In other words, in Vancouver, for every 20 units of residential property, there is demand from 21 households (domestic and external). External demand is ON TOP of domestic demand as the domestic demand doesn’t not significantly grow faster than domestic supply (despite high immigration).

All that external capital ripples through to other sectors, causing locals in different areas to face the brunt of that external demand too, indirectly.

#110 Paul on 12.19.17 at 9:08 pm

6 dr. talc on 12.19.17 at 8:29 pm

I believe fintrac is hoax management. But fintrac is the law, it’s in place and operational- everyone complies. And non resident vendors have a cash hold back until tax filing, that’s also the law- conclusion:’foreign buyers’ is a red herring argument

http://www.fintrac.gc.ca/intro-eng.asp
—————————————————————–
This must be a new comedy club.
CRA is to busy nailing small businesses.

#111 Newcomer on 12.19.17 at 9:11 pm

We’ve got a great crowd here tonight.

Hands up: who thinks the moon landing was faked?

Love how you guys don’t get hoodwinked by facts. Keep on trusting your gut.

#112 TheSecretCode on 12.19.17 at 9:15 pm

Here are the variables at play not in order of dominance:

1. Foreign ownership.
2. Smurfing to avoid foreign ownership status.
3. Not so smart Canadians going nuts.
4. Smart banks pulling the strings.
5. Gov complicit with banks pulling the strings.
6. Fake data / false marketing
7. Central bank printing money (having everyone adopt bitcoin now or as of today bitcoin-cash up 50% today).

and the big one stated by Scotia to lead medium and long term housing in Canada…Immigration!

7. 300,000 immigrants for 2017 up from the average of 260k over the prior decade (highest level in a century)…increasing to 310k in 2018, 330k in 2019 and 340k in 2020.

#113 Where's The Money Guido? on 12.19.17 at 9:18 pm

Re: Now the government backs me up. Non-beavers own just 3.4% of the properties in Toronto and 4.8% in Van. Yawn. That equals 3% of the value of all GTA houses and 5.1% of those in the Lower Mainland. Foreigner buyers like condos best (they’re easy to rent), but overall less than 1% of the condo stock in our 17 major cities is theirs.
++++++++++++++++++++++++++++++++++++++++++++++++++++
I’m disappointed Garth that you are quoting these numbers before exploring more.
Cmon Garth, you believe CMHC and StatsCan?

Listening to CKNW Drex and Steele podcast (The Most Recent Foreign Ownership Numbers Are Out) this afternoon they had Josh Gordon-Asst. Professor at The School of Public Policy at SFU and Mark Waynes?-Realtor at Sutton West Coast Realty refuting those figures completely coming from that same report, stating the number of non-resident ownership of completed condos in 2016-2017 is 19% in Vancouver, 24% in Richmond, 23% in Coquitlam and 16% across the Metro Vancouver area. And that doesn’t include the people who have bought with overseas money. Their saying these numbers are base-line estimates!!!!
The millionaire investor program where you buy citizenship by going through Quebec accounted for 80% of them moving to Vancouver (Quebec makes the dough, then they leave), and buying 36,000 units alone. There are only 9,000 housing units for sale right now in Metro Van, so if only 1/4 of them were put on the market they would bring prices down bigly!
Reporter Kathy Tomlinson is saying this doesn’t include proxy owners either!
They said that if they stopped rthe source money that is foreign it would impact prices BIGLY!
The funny thing is they had Eric Bond from CMHC parroting Garth’s numbers earlier in their show, then had the rebuttal from Josh and Mark.
Lies, lies and more lies from the cartel trying to keep this bubble afloat! These scumbags should be pounding rocks in the slammer for their manipulation of the numbers!!!!!

#114 april on 12.19.17 at 9:18 pm

Listen to Ross Kay if want the facts. Garth has expressed it more then enough times but some people are just…………….

#115 Eyes wide shut on 12.19.17 at 9:22 pm

“There are lies, damned lies and statistics” – Mark Twain

#116 oncebittwiceshy on 12.19.17 at 9:25 pm

Blacksheep: “The topic of todays blog was the Gov data release on foreign RE ownership in Canada and Garth’s interpretation of it.

Relevance?”

<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<

Blacksheep, I'm very curious as to your sudden apparent and very new naivete.

The "foreign investor" aka "chinese investor" has been an ongoing realtor/broker/FIRE industry insider spurred meme for several years now in Vancouver and then Toronto.

Yes, they are an influence in the markets but these "insiders" try to propagate this myth of overwhelming foreign influence in order to sell. That is it. You can't lose on real estate in B.C. because of the endless foreign buyers trying to move money out of their country. C'mon.

The very same people that stand up and say that these "foreign investors" have destroyed the housing market in Vancouver by buying up multi million dollar mansions will also decry "trickle down economics". The middle class and poor can't profit by giving the rich more money.

Yet, these people would have us believe that these foreign purchases of multi million dollar mansions have created this distorted bubble market. Suck and blow, much.

I was providing evidence of local investors that are more problematic to the average home buyer in B.C.

Garth's position is the same. Local buyers/speculators are the problem.

Mortgage debt is higher in Ontario and B.C. then in any other province. Mortgage fraud is higher in B.C. and Ontario then any other province.

People that are still promoting the "foreign investor" influence are simply trying to provide support to markets that are turning.

You are an intelligent person. I'm sure that you bought a home intelligently and you will not be too adversely affected by the "correction".

I enjoyed your commentary as a "bear". The biggest problem with the "bears"prognostications were in the timing. You were right but at the wrong time.

Good luck.

#117 Victoria the original on 12.19.17 at 9:25 pm

Does this include numbered companies?

Unless I missed somethig many properties are apparently bought through numbered companies and not an individual.

#118 tunano on 12.19.17 at 9:25 pm

Please, go ahead and gloat a little … (I love it when you are right.) Thanks for all you do every day to instill some balance in a tilted world.

#119 Bongo on 12.19.17 at 9:25 pm

Sorry, I need to clarify that the article refers to condos built in the last two years. This corroborates the vast amounts of anecdotal information about developers marketing to foreigners that is still going on today.

#120 genbizx on 12.19.17 at 9:26 pm

#18 kim

well said…reality. not policorrect drivel. thanks. i lived in China 2 years. great people but i saw how those with money were anxious to get it beyond the reach of the gov. to places like cnda

#121 Leo Trollstoy on 12.19.17 at 9:30 pm

As I said before, there’s massive demand for tech workers. Thankfully Canada is listening and trying to get as many skilled workers as possible!

https://www.bloomberg.com/news/articles/2017-12-18/as-trump-snubs-high-tech-visas-trudeau-s-new-program-takes-off

It’s exhasting being right all the time!

#122 Where's The Money Guido? on 12.19.17 at 9:36 pm

One thing that is not being considered is the amount of money that Canadian gangs are using illicit laundered money to purchase properties.
It was stated ~5 years ago that the Hell’s Angels alone made $5 billion/year from marijuana trafficking in BC alone, not including all the other drugs they sell.
Wouldn’t that be a YUGE factor in our house prices.
Why isn’t anyone looking into that?
I bet it’s way bigger than the foreign element.

#123 TRUMP on 12.19.17 at 9:39 pm

I thought we were over REAL ESTATE already?

BITCOIN is the new story no?

#124 akashic record on 12.19.17 at 9:42 pm

I actually couldn’t care less who buys real estate here.

I find it funny though, that this country doesn’t have publicly available real estate sale prices for the consumers, yet it has comprehensive, public data about the buyers :)

#125 -=jwk=- on 12.19.17 at 9:43 pm

There is no torrent of money from Beijing or Guangzhou.

yes there is, I have seen it first hand in multiple occasions. The real question is why are their foreign buyers not using a local address? I don’t know of any.

#126 People are Strange on 12.19.17 at 9:46 pm

I hate to be blunt! Anyone who thinks this can keep going up is a either naive or just a moron. To keep a market going, you need the general populace to buy in so if they can’t afford it, it’s all over. We are past that point!

#127 People are Strange on 12.19.17 at 9:50 pm

I’m padding my retirement, but not with RE

#128 Adrian on 12.19.17 at 9:54 pm

#56 Doug t on 12.19.17 at 7:16 pm

“I have to put my dog down tomorrow”

I’m so sorry for you and your pup…

#129 Yuus bin Haad on 12.19.17 at 9:57 pm

Anybody catch tonight’s “This Is Us”?

No?

I got home late.

DAMN!

#130 West coast dude on 12.19.17 at 10:02 pm

#78……im guessing you have been SHYSTERED before? lol

#131 Tony on 12.19.17 at 10:10 pm

Re: #12 the ryguy on 12.19.17 at 5:40 pm

I know what you mean, I must have heard the same comment from Mark at least 100 times since 2013.

#132 akashic record on 12.19.17 at 10:13 pm

#126 People are Strange on 12.19.17 at 9:46 pm

To keep a market going, you need the general populace to buy in so if they can’t afford it, it’s all over. We are past that point!

—-

Why do you think smart money with mortgage free real estate and millennials with zero chance for real estate turned to the truly global reach, border-less Bitcoin and other cryptos?

#133 Ronaldo on 12.19.17 at 10:14 pm

#123 TRUMP on 12.19.17 at 9:39 pm

I thought we were over REAL ESTATE already?

BITCOIN is the new story no?
————————————————————–
No. Bitcoin is the old story. BitcoinCash and Ethereum are the new story. Have you checked out the price action on these since monday? Roger Ver and his buddy are bailing out of Bitcoin and into BitcoinCash which is why it is up 40%(ETH). All downhill for Bitcoin now. There are far better alternatives out there. It’s had its day. Time to move on. People need to keep up to date before they mortgage the house and pile into something that has no future. Need to follow the money.

Gambling, not investing. – Garth

#134 april on 12.19.17 at 10:23 pm

# Right on! and according to Ross Kay houses on the West side of Vancouver have dropped 500 thousand…not alot when one is asking millions but a start.

#135 april on 12.19.17 at 10:30 pm

#75 – forget to include in comment #130 that the 500 thousand drop happened in one month….one month!!

#136 Bob Loblaw on 12.19.17 at 10:33 pm

Garth, I respectfully disagree with today’s blog post. The methodology used to collect these stats is flawed. I’ve read every post today and have yet to read any explanation or opinion from you regarding the use of proxies, PR status, astronaut parents or millionaire students, to name a few.

Nor have we read how $70K household incomes could have driven prices to these heights. Mom and dad and low rates could not alone have driven East van tear downs prices to $1.5M. It’s just not possible.

These are the questions that sceptics like myself cannot reconcile with the data released by Stats Can.

So don’t believe it. Your choice. – Garth

#137 akashic record on 12.19.17 at 10:41 pm

Instead of chewing on the same boring bone day after day, why don’t you learn new, interesting, profitable tricks old dogs?

https://www.youtube.com/watch?v=jEWm1OOHLkw

https://www.youtube.com/watch?v=WNCyZ7A9t9g

#138 Kelsey on 12.19.17 at 10:46 pm

Well that settles it then, the Ministry of Truth has spoken and created an official looking report. House prices aren’t bid up by hot foreign capital flows, unemployment is rock bottom, GDP is surging and inflation can’t get above 2%. Everyone else is living the Canadian Dream, so if you can’t afford to buy a house, start a family and pay off your student debt you are alone and there is no point demanding social change as you are likely a racist deplorable who can’t compete in the modern economy.

#139 Robert B on 12.19.17 at 10:48 pm

#3 Robert B

I thought my memory was sharp

From the Globe and mail Dec 17 2017

Non-residents owned 7.9 per cent of condos in Vancouver and 7.2 per cent of condos in Toronto, the report showed

https://www.theglobeandmail.com/news/national/foreign-ownership-in-toronto-vancouver-housing-markets-below-5-per-cent/article37381468/

#140 Mark on 12.19.17 at 10:52 pm

“As I said before, there’s massive demand for tech workers. “

Not for Canadian tech workers. The job boards are pretty much empty these days.

https://www.egbc.ca/Careers/Career-Listings?d=COMP&ps=25

Yes, that’s right, a grand total of two postings in the Computer/Software engineering field through APEGBC.

I think Troll is once again the victim of some pretty unfortunate propaganda.

#141 Old vs New on 12.19.17 at 10:56 pm

BitcoinCash and Ethereum are the new story

Nope, Ethereum is old news now too. It’s EOS and NEO that are all the rage now.

Coins that pay dividends as you are holding them. Sweet!

#142 Property Manager on 12.19.17 at 11:02 pm

I don’t know where the information came from ..there are many non resident non english speaking owners in high rises. All one needs is the owner’s list to see the numbers are much higher than this “research” states.

#143 Chinese Dude on 12.19.17 at 11:05 pm

While the data is about the percentage of real estate buyers who are not Canadian Citizens or permanent residents, I am more interested in the percentage of offshore money, though it’s hard to measure.

In Richmond, there are many “single moms” whose only job is to enjoy life and raise kids. They are single not because they are divorced, but their husbands work in another country (you know where is it) to support the family. That’s part of the reason why CRA is targeting Canada’s richest neighbourhoods.

In my opinion, ultimately, it’s not foreign buyers to blame, nor local buyers, it’s the inability of municipal and provincial governments. Why the hell they keep the property tax rate so low, while income tax rate so high?

Look at King County in Washington State, where property tax rate is about 1.01%. Property tax rate in Vancouver? 0.255%! While there is no income tax at all in Washington State, I paid several thousand $ income tax to the BC government last year.

If we here at YVR can implement the tax model in Washington State, real estate is guaranteed to drop.

#144 millmech on 12.19.17 at 11:09 pm

Why the price declines in Toronto and Vancouver? Shouldn’t the multibillionaires from China (which according to most of the posters tonight there are millions of them) all be buying these homes up like crazy because they are on sale now. I guess that the smart and financially astute Chinese investors only buy at the peak and will hold all the way down(see there not much different than us).
Bank of Mom much worse for the market than the bank of China, young people now demand early inheritance from parents(after all they earned it) to buy the most expensive house they can afford to buy. Everyone knows that a crappy starter home/townhouse does not get as many likes as a house nicer than their parents. Also as soon as the house builds equity guess what happens, they purchase an investment property or two.
This is all that I hear about lately is everyone making money off investment properties and they are not of Chinese origin, but I guess they are purchasing on behalf of said above foreign investors as to confuse the general public

#145 Smoking Man on 12.19.17 at 11:10 pm

She’s going to be 10 bucks by the new year

https://coinmarketcap.com/currencies/iota/

#146 TheSecretCode on 12.19.17 at 11:11 pm

The exchanges are crashing..frozen…the last price on bitcoin cash I am seeing is +525% on the day….wild!!!!!!

#147 TheSecretCode on 12.19.17 at 11:14 pm

Call it gambling…but this is an early Christmas present…in the form of six figures USD on the day!

#148 Happy Housing Crash Everyone! on 12.19.17 at 11:19 pm

The SHYSTER industry spent so much money in brainwashing the masses of the Asian boogeyman that the government did what the screaming masses wanted. Now everyone is scared to buy thinking no more HAM and so prices will continue crashing . SHYSTERS know they can’t back out of a lie(SHYSTER 101) and now they watch their lie destroy the housing bubble. BaHaHahahaha. Now they make up stories like the market will rebound in fall….BAHAhahahha. The market will slow down a bit and rebound in 2018? BaHaHahahaha. You scum are so finished. Nothing is selling or will sell. I heard many SHYSTERS are drowning in debt. BAHAhahhaaha

#149 NoName on 12.19.17 at 11:24 pm

funny

“The ship is short-haul: It can travel about 50 miles with its 1,000 lithium batteries after two-hour charge, which is the loading and unloading time for the ship, state news site ChinaNews.com reports. So it can be charged while it is docking.

Sadly, the Chinese spoiled the launch of this otherwise green cargo ship by using it to transport coal for electricity generation on the Pearl River in Guangdong Province.”

http://reneweconomy.com.au/china-spoils-launch-worlds-first-electric-cargo-ship-using-haul-coal-77100/

#150 akashic record on 12.19.17 at 11:25 pm

#138 Kelsey on 12.19.17 at 10:46 pm

Well that settles it then, the Ministry of Truth has spoken and created an official looking report. House prices aren’t bid up by hot foreign capital flows, unemployment is rock bottom, GDP is surging and inflation can’t get above 2%. Everyone else is living the Canadian Dream, so if you can’t afford to buy a house, start a family and pay off your student debt you are alone and there is no point demanding social change as you are likely a racist deplorable who can’t compete in the modern economy.

—-

Your best bet is to start up something where you can employ immigrants, become a “job creator hero”, who qualifies for as many government subsidies as possible. Don’t be shy, collect it. Tried and true script used by most rich Canadians.

#151 Ronaldo on 12.19.17 at 11:28 pm

#141 Old vs New on 12.19.17 at 10:56 pm

BitcoinCash and Ethereum are the new story

Nope, Ethereum is old news now too. It’s EOS and NEO that are all the rage now.

Coins that pay dividends as you are holding them. Sweet!
—————————————————————
Geez. Hard to keep up to these things. Seem to be coming up with a new one every few hours. NAGA (NGC) starts trading Dec. 22nd on the Frankfurt exchange. ICO’d at $1.00. Roger Ver behind this one as well. The new rage which is attracting huge dollars worldwide. 2018 will be an interesting year.

#152 Ronaldo on 12.19.17 at 11:32 pm

Gambling, not investing. – Garth
——————————————-
No arguments there. People love chasing bubbles.

#153 Proud Claustrophobe on 12.19.17 at 11:50 pm

Garth is wrong and he can call me a claustrophobe, hydrophobic or whatever. I think the data is actually scary and will be a call to action for the BC government. No wonder schools are closing in Richmond, Vancouver and Burnaby. If we want an empty city with no soul we’re on the right path. Kinda like raising a family in Las Vegas. No thanks.

#154 HE-LOCK on 12.19.17 at 11:53 pm

Pre Approvals:
Any pre approval committed prior to January 1st will remain valid for 120 days from the date of the original approval. Any extensions of an expired pre approval after December 31, 2017 must be qualified using the qualifying rate based on the new rules.

Should a pre approval that was committed in 2017 turn into a real deal, the old rules apply even if the closing date of the new purchase is greater than the expiry date of the pre approval, but no greater than 120 days from the date of the commitment for the real deal.

Example: A pre approval committed prior to January 1st expires March 15, 2018. Borrowers purchase a property closing May 1, 2018. If the real deal is committed on/before March 15th, we still qualify the deal using the old qualifying rate rule. The rate is no longer protected as the closing is beyond the expiry date of the pre approval, however the old rules still apply for qualification, as long as the deal closes within 120 days.

Just wondering if anyone here can verify if this is correct?

Garth?

#155 Jon B on 12.19.17 at 11:56 pm

You refer to the Bank of Mom a fair bit in reference to an unofficial source of money that you claim has a real influence on the rising cost of real estate. In fairness I think we should also consider another unofficial supply of RE funding: wealthy foreigners that have fully paid-up Canadians buy property on their behalf. I see both having a measurable impact on prices while neither can be researchered to produce credible statistics. That Stats Can report of today lacks useful context in my opinion.

#156 Vincent on 12.20.17 at 12:06 am

Over 20% (more like 50%) of new condos in Vancouver are foreign owned.

#157 paulo on 12.20.17 at 12:06 am

#136:
I suspect the data is very close to correct. the main culprit is a combination of artificially low interest rates, poor governance in mortgage underwriting and epic and what will in the end prove to be massive and dangerous intervention by the bank of mom and dad,whom have now
in many cases placed there retirement and possibly there own homes at risk to finance the kids house or engage in speculative property purchases. this will not end well. i do paralegal work, lately a good portion related to failed real estate deals. interestingly not one single case involves a “foreign” investor, claimant or respondent to date.

#158 milon on 12.20.17 at 12:17 am

Garth has a point, but that’s half of the glass. Foreign buyers are part of the problem. Before the introduction of 15% tax, they were part of the problem. It started in Vancouver. Then Vancouver had the tax. They came to the GTA, then GTA had the tax. They now are in Montreal. I bet they will start looking at London, may be Windsor (Casino). But, again they are part of the problem.

Then comes the Garth favorite, speculators. Yes, they are the problem, now. I know people who bought 10 houses with money collected from banks and do called investors. They only bought these properties for flipping/speculating whatever you prefer.

Then, there are people who HELOCs to buy at least one condo to flip. These are regular people, they don’t even understand we call them speculators. Well, they say they are investing.

I like Garth point, if you want a house, have it. But, don’t put your entire life savings on this, diversify. At the end of the day, you would want to call your house, the home.

#159 Participation vs. Marginal Buyer on 12.20.17 at 12:23 am

Dear Mr. Turner,

I hold you in the highest esteem and agree with much of your narrative regarding the long term escalation in house prices. However, your assertion that the most recent statistics fail to support the policy response of a foreign buyer tax is simply dead wrong.

As a student of the markets, I think you understand the important difference between the percentage of non-residents participating in property transactions compared to their ability to set prices as the marginal buyers. As an illustration, let’s say Sotheby’s is auctioning expensive art with both millionaires and billionaires present in the crowd to bid on these unique pieces. The billionaires represent a small fraction of the bidders and closed transactions (participation) but exert a much greater influence on price (marginal buyer) even for deals where they might not be the ultimate purchaser and the art was instead bought by “just” a millionaire.

Relying on a single statistic for your staunchly held opinion without acknowledging its limitations or nuances is a disservice to yourself, your blog, and your dedicated readers. Many of us consider your blog and its comment section as a forum for discussion and exchange of ideas in an effort to genuinely understand complex issues. It doesn’t matter who is eventually proven “right” if we all become better informed about the myriad of important issues your blog addresses.

As you have said many times, we’re all entitled to our own view on any given subject. In the interests of intellectual integrity, however, it’s vital to recognize the limitations of our opinions in a candid and transparent manner. I hope that you will respond to the distinction I’ve highlighted in a fashion commensurate with the high regard in which we all hold you.

#160 OttawaMike on 12.20.17 at 12:25 am

For your Christmas post:
Check out @Rachforde’s Tweet: https://twitter.com/Rachforde/status/942724955959119872?s=09

#161 Victor Y on 12.20.17 at 12:26 am

I guess the stat doesn’t count foreign money being wired to Canada. They could be used by “local” chinese people. It is hard to collect the data. But everyone in Raincouver know this. If I sound racist, I am chinese by birth. It is not about race, it is our society and culture being invaded, thanks for the massive immgration policy. thanks liberal.

#162 Exodus 2020 on 12.20.17 at 12:59 am

How much of recent sales were to non-resident buyers? That is how we need to measure the impact.

Total non-resident ownership percentage is meaningless, because it includes all the long term owners that have little impact on market prices since they simply live in their homes and don’t continually flip them driving prices higher.

#163 Smoking Man on 12.20.17 at 1:08 am

Boom MAGA got it’s tax reform.

Canada is doomed. Globalism got the wooden stake through the heart. About time.

#164 Fuzzy Camel on 12.20.17 at 1:11 am

If you want to make some dough, get the heck of Canadian Peso’s. Max your TFSA, open a brokerage account, buy USD. Take that USD and get a highly leverage ETF that tracks the DJIA. Or buy weed stocks, those are doing well.

Canada needs to slow down it’s housing market, this is beyond insane. I’m working 70 hours a week at my business trying to keep up with house horny Canadians binge-borrowing to buy real estate.

#165 jane24 on 12.20.17 at 1:13 am

If the Chinese govt has become so concerned that they are attempting to cut off corrupt money transfers from China, then that says it all really. Proof of the pudding.

Yes I have family in Quebec who are also concerned with their investment starved province being used as a rich man’s gateway to Canada. Unless you tie these folk up on arrival there is no way you can make them actually stay in Quebec! It’s a con. Money in govt coffers.

#166 morrey on 12.20.17 at 1:24 am

lets keep it real:
“Many people in Hong Kong feel that the property market is not a product that can be bought by ordinary people, and that Canada, Vancouver or Toronto, has now become the preferred choice for many Hong Kong people,” the Facebook post boasts.”
read more on how we in Canada are being played:
https://thinkpol.ca/2017/09/23/vancouver-developer-pre-sells-condos-for-cheaper-than-in-canada-at-hong-kong-fair-and-boasts-of-pricing-ordinary-canadians-out-of-the-housing-market/

#167 Rates vs Capital on 12.20.17 at 1:29 am

#28 Redrum on 12.19.17 at 6:25 pm
I love how you use false statistics when they support your biased opinion.

Actually they are the only stats. If you have better, please offer. – Garth

———-

Sorry, but the provincial data collected on the level of foreign ownership has a more comprehensive and sound methodology.

Remember, before the foreign buyer’s tax was put into place, many cities around Vancouver had high levels of foreign ownership. Places like Richmond and Burnaby had over 20% before the tax. These cities now have close to 10% and most recently greater vancouver data shows its almost 10% as we head into 2018.

Let me know when the feds get their act together and include proxy buyers and numbered companies. Oh, and they should include the pre-sale data since 20% of Vancouver’s condo’s this year were purchased by foreign buyers – those are likely bag holders from the other assignment flips of condos.

http://www.cbc.ca/news/canada/british-columbia/vancouver-non-residents-statistics-canada-figures-1.4456657

But hey, what’s 20% right? Its not like that could move the market right? Its not like 8% of marginal buyers in the US caused a 32% decline in prices.

#168 Rates vs Capital on 12.20.17 at 1:31 am

Tick tock…..only 12 more days until B20 kicks in.

If cheap rates and domestic speculation are really driving the market rather than foreign capital, then January 2018 data should reflect that 18% cut in credit through price and sale drops. If things remain the same in GTA and YVR, I guess foreign capital will have to be acknowledged as the driver.

Something tells me blog dogs are going to be disappointed…again.

#169 Blacksheep on 12.20.17 at 1:51 am

Once # 116,

BS: Blacksheep: “The topic of todays blog was the Gov data release on foreign RE ownership in Canada and Garth’s interpretation of it.

Relevance?”

<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<

Once: "Blacksheep, I'm very curious as to your sudden apparent and very new naivete.

The "foreign investor" aka "chinese investor" has been an ongoing realtor/broker/FIRE industry insider spurred meme for several years now in Vancouver and then Toronto."
——————————–
BS: I simply responded to your grouping me in with parties that disagree with your perspective on foreign investment in Canada.

I've been in the Valley my whole life and spend a lot of time in Van, as my brother lives there. I see the Ferraris and lamborghinis, even in the Valley, on an almost daily basis. These cars frequently have an "N" in the back window.
———————————–
Once: "The "foreign investor" aka "chinese investor""
———————————–
BS: This is a meme, you have never heard me say.

Why?

Its' just a distraction that leads to prejudice baiting and I wont bite.
———————————–
Once: "People that are still promoting the "foreign investor" influence are simply trying to provide support to markets that are turning."
———————————–
BS: My sister just sold her nice 5yr old condo in White Rock about two weeks ago. Her realtor said the buyers spoke a foreign language and paid slightly over ask with no bidding war.

Her realtor told my sister the buyers were attempting to acquire, multiple units in the complex.

You are free to believe what ever you like, but I'm here and I know what I am seeing.
————————————
"You are an intelligent person. I'm sure that you bought a home intelligently and you will not be too adversely affected by the "correction"."
———————————–
BS: Thank you. Yes I was conservative in my RE expenditure and have lots of equity cushion, regardless of what the market does. I'm really not concerned much about a correction, I have the Government running defense as we share mutual interests.
————————————
Once: "I enjoyed your commentary as a "bear". The biggest problem with the "bears"prognostications were in the timing. You were right but at the wrong time.

Good luck
———————————–
BS: Agreed, timing is everything. Unfortunately it took me years of renting and watching, not what the system says, but what the system does, to figure out they will simply not kill Van / T.O. RE values, intentionally.

Soften for political appeasement, sure, crash, no way.

It would be career suicide for politicos and their parties. Could things get away from them, of course, but they will do anything within their power to keep this RE pig airborne, (70% pop owns / 12% of GDP)
just like they did in 2008-09, right after I sold my personal RE.

Thanks for the reasonable convo and good luck to you also.

#170 Smartalox on 12.20.17 at 2:00 am

Flopper! Thanks for the shout out, and your latest ‘Discovery.

Zolo says that the listing was removed after failing to sell despite being priced at eighteen percent (18%) below assessed value. The assessments htat are due to come out soon, will be even HIGHER as they’ll be based on values assessed in July 2017.

Of course, these over-inflated values will pad the coffers of Vancouver’s city budget (goosed by another half a percentage point at the last minute recently by Vision Vancouver councillors), but they will also mean selling prices will be EVEN FARTHER BELOW those assessed values, literally making matters worse.

2017: trouble selling 15% below assessed value
2018: not selling at 25% below assessment, either.

Just imagine how that’s going to feel if you’re part of a group invested in a spec house. Higher taxes, lower prices, and greater (paper) ‘losses’ to add insult to injury.

Spring 2018 won’t be pink – it’ll be blood red.

#171 WileE Toronto on 12.20.17 at 2:11 am

#42 Millmech
#95 TheSecretCode

I am not a realtor or a chartered accountant or a banker but I wanted to add a comment that can be corrected if anyone has a better answer.

MILLMECH, when you get a mortgage or two for a rental property from a bank with merit (honestly), you must provide income verification for loans , the combined amounts of loans regardless of rent received is counted. (50-80% of rent can be included at the lenders discretion). Car payments, outstanding VISA, student loans, LOCs , are all easily visible to a bank when they pull your credit information.

I have good equity and cash flow positive (barely some months). All income claimed and taxes paid on NET income. I still have trouble borrowing from my equity at every bank and broker I have dealt with. Its not that easy, thank goodness.

TheSecretCode
I have heard this before on the blog. Why would you think they are NOT claiming rent when they are losing money (NET LOSS). A net loss is not taxable but those LOSSES can be used to offset future gains.

Owning and trying to rent for a monetary or capital gain has never been easy and is risky. Lots of math and skills required to do it properly and legally. Borrowing from Banks or alternative lenders has never been easy for me either, not sure your examples are accurate. For most people investing in a balanced portfolio is the safer bet but I enjoy owning, fixing and renting to lots of very nice people with pets for a small profit. Like Garth takes joy in sweeping the deck at Belfountain.

M47ON Go Leafs Go!

#172 Cloudy on 12.20.17 at 2:52 am

Garth, stats are for % owned of entire market. Look at recent trend and the % of transactions per year in recent years are SIGNIFICANTLY higher and easily one of the impacts on price run-up. Plus I’m guessing there are purchases that are foreigners in substance but not recorded as such. I hate to use this term but fake news.

#173 Flatlander on 12.20.17 at 2:59 am

Can’t believe that someone hasn’t already had the foreign buyer’s tax overturned based on the Charter of Rights Section 15. It’s clearly discriminatory based on origin and you can’t do that here.

#174 Wurst on 12.20.17 at 4:10 am

Over here in SG other parts of Asia as well they don’t allow foreignerds to buy landed property, ever, just look it up.. And definitely no way they’re gonna give you free citizens hip on top of that. No wonder everyone loves Canada RE! Maybe they know something we don’t? Just saying

#175 Barney on 12.20.17 at 4:44 am

Can someone explain then how with an average income of $70k in YVR (and even lower in TO) average house price there is $1.6 million?

No explanation implies flawed bs from stats canada.

The benchmark price for the average Van property is $1.046 million, and the average buyer is moving up from a condo or townhouse to a semi or a detached. They bring equity with them, and finance the rest. How hard is that to fathom? – Garth

#176 under the radar on 12.20.17 at 5:21 am

#67 Howard on 12.19.17 at 7:26 pm
Honest question : the use of proxies (visiting students, etc) to buy real estate and therefore not counted as a foreign buyer in the stats, as well as dodging the 15% tax. Is it actually illegal for them to do that? Is it considered fraud, or simply a rich uncle back home giving a nice gift to the 19 y/o UBC student?

I’m confused as to whether the laws needs to be changed, or whether existing laws simply need to be enforced

In Ontario with the introduction of the NRST it would be illegal to hold the property in the areas where the tax applies for a foreigner , if the purpose was to avoid the tax. You must disclose if the beneficial interest is being held for another person.

#177 Ponzius Pilatus on 12.20.17 at 6:25 am

The end of Uber?
EC highest court declares Uber a transportation company.
Can be regulated like taxi companies.
Airbnb is next.
And then bid coin.

#178 Ponzius Pilatus on 12.20.17 at 6:33 am

Next up is declaring robots as workers subject to the same benefits as humans.
Imagine a labour union for robots.
This may even apply to your robot vacuum.
Brave new world, indeed.

#179 Dharma Bum on 12.20.17 at 6:41 am

Blog Dogs suffer from Sinophobia.

https://www.quora.com/Why-are-people-scared-of-Asians

So misguided.

#180 fancy_pants on 12.20.17 at 6:58 am

wow, brilliant wrapping! … the shock when they open it to discover a telecaster will be priceless

#181 Sebee on 12.20.17 at 7:14 am

Garth,

Does the government not have a program to fast track landed immigrant status to those who bring money to invest?

#182 Eyestrain on 12.20.17 at 7:18 am

Honest question: are you people living in a suburb of Myopia?

The answer is soooooo obvious.
Our resident statistician, Flop has all the data. He just needs to call up all the Sold listings (not the “Old Sold” cuz that is really “Unsold” isnt it?).
Anway, just ask the occupant 2 simple questions:

1. If you were going to have a Blue Jay for dinner, who would it be ?

2. In Canada, which 3 families control the means of production ?

Whaddya say Flop?

#183 Bhad (BTC) Bhabie on 12.20.17 at 7:35 am

shoudoud 2 shuddins

Check out “Banking on Bitcoin” on Netflix
http://www.netflix.com/title/80154500?source=android

#184 Tony on 12.20.17 at 7:43 am

#6
150 to $200 Square foot depending on the builders buying volume discount

#185 dave in kincardine on 12.20.17 at 7:49 am

The alarming piece you said was that houses have gone up 150% in a decade. And yet inflation chugs along at 1-2% per year. Not to mention rising prices of gas, food etc.
Wages are stagnant since 2000, 18 years. Not good for those trying to keep up by investing. No one mentioned this problem. It is big problem.

#186 RealityISHigher on 12.20.17 at 7:50 am

These numbers are too low, we all know that they are much higher. There are so many ways that an individual/corporation can get into the Canadian RE market without being labelled as “foreign ownership”.

Toronto CMA is a pretty large area, would like to know the exact numbers for Toronto, Richmond Hill, Markham etc..

Foreign ownership accounted for 7.2% of all condo sales in CMA! That is massive. Since most hold these as investments, you can see how quickly it takes over a market. In 5 years, 36% of condos are owned by this group.

What are the number of properties owned by foreign elements as a total of all properties in GTA?

#187 Millmech on 12.20.17 at 7:51 am

#171
I have been friends with my co-worker for quite a while,he takes home $3500/biweekly,wife just over &1800/biweekly,no other bills than mortgages.
Mortgage payment on house is $1000/biweekly I believe so lots of cash to play the market,banks love people like them, they are planning on buying another house as soon as possible to add to their “portfolio”.

#188 Dr. Jane Goodall PhD on 12.20.17 at 7:57 am

Garth,
I confess I am still puzzled over your choice of imagery. Is that Rick’s drum kit from Def Leppard ? I am still not sure how it fits in with your narrative??

Happy Kwanzaa, jane

#189 TurnerNation on 12.20.17 at 8:01 am

Humans are simply tribal creatures. One cannot have it both ways: draping oneself and building in large patriotic flags; bursting renditions of O’Anthem.

Then not expect people to flip out when they hear foreign chatter or signage in another language. The fear of the ‘other’ looms large for some.

#190 NYCer on 12.20.17 at 8:20 am

From the report, it appears that around 10% (depending on what stat you refer to) are foreign ownership. Correct me if I am wrong but 10% does seem high. 1 in 10 homes are foreign owned sound pretty high to me.

You are wrong. It is around 5% of total sales. – Garth

#191 maxx on 12.20.17 at 8:46 am

#1 dakkie on 12.19.17 at 5:01 pm

Yes indeed. We needn’t look any further for the root cause of 171% debt to income. The wannabe factor that spurs twitchy little stoats to borrow their brains out for the trappings of the demographic they aspire to.
Central bankers knew precisely what this particular economic lever would produce – and lookie-lookie wot we got now….an economy where almost no one is secure, literally and figuratively and continues to slide sideways weakly. After a decade.

“More broadly, the Poloz BoC’s current policy, like that of the US Federal Reserve, is to boost asset prices even higher in the hope that the resulting wealth effect will trickle down to spur economic activity among ordinary Canadians.”

Canuckleheads gobbled that one up reeeeal gooood.

“America’s “everything bubble,” like Canada’s, has been stroked by a central bank that has been pushing credit growth at a rate faster than GDP growth, a textbook Ponzi scenario.”

There’s hardly a business anywhere that hasn’t got a credit card it pushes in your face as soon as you walk through the door. Payday loans, banks spending a fortune on credit “product” advertising, etc.

I’m gobsmacked that Canuckleheads are generally not swift enough to see through the CB rate game. There was a great time to buy and sell re and not to tap its equity for consumer junk. Those who bought and sold at the right time :-) are the indisputable winners.

Innumeracy and ignorance of basic personal finance in this age and especially going forward, is a disastrous national trait.

#192 Wow on 12.20.17 at 8:54 am

The comments were a “fun” read today. Thanks for that Garth. How’s your scotch? Need a top-up?

#193 jpsartres on 12.20.17 at 9:05 am

#189 TurnerNation on 12.20.17 at 8:01 am

Humans are simply tribal creatures. One cannot have it both ways: draping oneself and building in large patriotic flags; bursting renditions of O’Anthem.

Then not expect people to flip out when they hear foreign chatter or signage in another language. The fear of the ‘other’ looms large for some.”

Cue Sartre,

“L’enfer c’est les autres”

#194 Howard on 12.20.17 at 9:22 am

A Cryptocurrency Founder Sold All His Coins After 7,500% Rally

https://www.bloomberg.com/news/articles/2017-12-20/after-7-500-rally-cryptocurrency-founder-sells-all-his-coins

Don’t be left holding the bag, cryptomaniacs.

#195 Ardy on 12.20.17 at 9:24 am

Garth, while these stats are telling, it would be interesting to get past years stats to determine sales trends (accumulative) and debink negative bias. Haters can always argue the recent stats were for a bad year in a specific category.

#196 ipnightly on 12.20.17 at 9:30 am

Dear Mr. Turner (if that is your real name)
We patriots put a high price on wealth for the freedom it brings us. We don’t envy the foreigners who are wealthier than us, we can handle the competition and maintain our villas in Costa Rica and Tampa. Our concern is for those less fortunate, our valets and footmen who now cannot afford nearby shelter. Canada first #Mefirst ;-)

#197 For those about to flop... on 12.20.17 at 9:44 am

2:00 am
Flopper! Thanks for the shout out, and your latest ‘Discovery.

Zolo says that the listing was removed after failing to sell despite being priced at eighteen percent (18%) below assessed value. The assessments htat are due to come out soon, will be even HIGHER as they’ll be based on values assessed in July 2017.

Of course, these over-inflated values will pad the coffers of Vancouver’s city budget (goosed by another half a percentage point at the last minute recently by Vision Vancouver councillors), but they will also mean selling prices will be EVEN FARTHER BELOW those assessed values, literally making matters worse.

2017: trouble selling 15% below assessed value
2018: not selling at 25% below assessment, either.

Just imagine how that’s going to feel if you’re part of a group invested in a spec house. Higher taxes, lower prices, and greater (paper) ‘losses’ to add insult to injury.

Spring 2018 won’t be pink – it’ll be blood red.

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

Morning Smartie,yes indeed that house sold 18% below assessment.

It just sold and so what happens a lot of times is that at first it comes up as removed while the ink dries and then shortly they will switch it to sold.

Also the house on Windsor has been removed that was asking less than paid for and we will have to wait and see if it went ,or is just hibernating from the Pink Snow.

All they are doing is delaying the inevitable…

M43BC

#198 Bhad Bhabie on 12.20.17 at 9:48 am

#191 maxx on 12.20.17 at 8:46 am
….an economy where almost no one is secure, literally and figuratively

Wachu mean

&

Whereda wink

:-) dat no wink

#199 Lonsdale on 12.20.17 at 10:06 am

Have a read Garth , What do you think ?
20% to foreign buyers , that is significant

http://www.cbc.ca/beta/news/canada/british-columbia/vancouver-non-residents-statistics-canada-figures-1.4456657

Is that the 20th time this has been sent to me? A lot of folks in BC obviously love the CBC agenda. — Garth

#200 Rooster on 12.20.17 at 10:09 am

If you are wondering if now would be a good time to get the little lady something for Xmas have a look outside Canadian Tire today:

http://geekpic.net/pm-TFF82Z.html

Photo is actually DisneyWorld at 9 am EST today sent from my daughter’s soon-to-be ex-boyfriend (outside the new Pandora ride – believe it or not!)

#201 TnT on 12.20.17 at 10:12 am

George Weston Ltd & Loblaws Price Fixing on Bread

George Weston Ltd has been a fixture in Canada since 1882.

Loblaws has been a fixture in Canada since 1919.

These companies are literally the “hands that feeds us”.

George Weston Ltd & Loblaws will not face criminal charges or other penalties because they were granted the “immunity and leniency” program, which gives incentives for parties in exchange for “co-operation against others involved in the cartel”.

Price fixing a daily staple in unconscionable!

No jail time being served.

The ignorance we Canadians choose to live with is deserving that we are Sheeple and our role in Canada is to be fed, entertained, bred to be docile and fleeced (literally).

Add this to all the other lies we choose to live with….

Gas Plant
Ornge
Omar Khadr

I won’t even bother listing them all… WE all get what YOU vote for….

Enjoy….

#202 Frank on 12.20.17 at 10:14 am

What I’d be interested in learning more about is the number of residential properties registered under provincial or federal businesses. It seems to me that there are many tax benefits for buyers and speculators holding properties long term, to put them under a business. I think this would shed further light on the high levels of speculation we’ve seen over the past years.

Are there stats/trends published anywhere to pull this data?

#203 Richard Thorncroft on 12.20.17 at 10:33 am

(Garth, if you pass on this, I’m with you.)

If you missed my debut single “You can’t handcuff the wind”, you can catch my new Xmas duet with Bhad Bhabie featuring:

Nuttin’ for Xmas

Stolen Bread

Santa Bhabie

Santa wachu doin to momma

Seasonal best, Rich

#204 Proud Claustrophobe on 12.20.17 at 10:39 am

These numbers from the stats Can report don’t look small to me. “Of the most recently built condominiums, non-residents of Canada own at least 24 per cent of the units in Richmond, 23 per cent in Coquitlam, and 19 per cent in Vancouver, Yan found.”

We have a great city where a huge number of people live somewhere else because that’s where they work and pay tax and a huge number that live and pay tax here but can’t afford to live in the city. What genius came up with this!

The fact you cannot afford to live where you want is not someone else’s fault. Nor will any tax change that. How naïve many in Vancouver are. — Garth

#205 IHCTD9 on 12.20.17 at 10:52 am

#6 Canada’s building code… on 12.19.17 at 5:30 pm
to the builders lurking on this blog…

What is the real cost of building a 2×6 structure from wood, filled with R24, decked with TyVec plastic wrapping and beaver barf boards?
Not to sound ignorant guys, but the quality of building
in Canada is stuck somewhere in the 19th century.
_______

I’d say some pretty tough long lasting buildings were put up in the 1800’s (I live in one). I believe the Belfountain is one as well. Not efficient at all, but timber frames, triple brick, stone masonry, and steel roofing tends to last a long, long time compared to vinyl siding and asphalt shingles.

Building like they did 100+ years ago would cost double or triple what a flakeboard box costs today. Have a look at some of the old cut stone houses built by Scottish Masons around Ontario – nobody could afford that kind of workmanship these days just for a regular family home. That stuff is for Millionaires now.

16 years ago I built a 400sf addition to the back of my house. It is on concrete piles, 2×6/tyvec/asphalt etc.. did all the labour myself and it ended up being 20.00/sf. So double it for adding in the labour, Double that again for a basement. Double it again for inflation and I should expect near 160-200 sf.

In reality, a new, turn-key, 2000 sf nicely finished home on an acre out here runs about 250.00/sf. I expect what the city takes and controls (ie makes more expensive) these days far exceeds what it was when I built the extension.

I am told the building itself costs about 150/sf to build, no land costs, no government costs. This cost for labour and materials should be close no matter where you build. By rights, labour and materials should be CHEAPER in the big cities compared to less populated areas.

#206 Kim on 12.20.17 at 11:00 am

Can someone explain then how with an average income of $70k in YVR (and even lower in TO) average house price there is $1.6 million?

No explanation implies flawed bs from stats canada.

The benchmark price for the average Van property is $1.046 million, and the average buyer is moving up from a condo or townhouse to a semi or a detached. They bring equity with them, and finance the rest. How hard is that to fathom? – Garth

——-

Actually that is hard to fathom. The higher prices go, the more difficult it is to move up, let’s say you bought a condo for 250k 5 years ago. Let’s say a single family home in your hood went for 600k also 5 years ago. Now let’s say prices have doubled since then. You sell your condo for 500k. But that single family home is now worth 1.2million. That means, even if you had bought with cash initially, and ignoring transaction costs, you still have to foot 700k, or borrow it somehow. Now this is an extremely simplified scenario but my point is when prices shoot even higher, the raw numbers you will need to borrow increase a lot, and even with low rates, you will have to pay a lot monthly. Unless money is rushing in offshore, this is a Ponzi scheme waiting to collapse. And now that Xi has instituted his controls, the market is waiting to collapse.

#207 cherry blossom on 12.20.17 at 11:01 am

I cannot believe that you believe the stupid government stats. I think they collected them for a 2 year period. Typical stupidity. This foreign buying has been happening for over 30 years. This colonization didn’t just happen within the latest 2 years. You are just like the stupid government, not listening to its people. God help us if we ever have to go to war..

#208 young & foolish on 12.20.17 at 11:07 am

Today the Globe is running an article where experts sound off on the TFSA …. it’s apparent success may lead to it’s demise as a tax shelter.

Anybody worried about this ?

#209 Ronaldo on 12.20.17 at 11:08 am

#164 Fuzzy Camel

I’m working 70 hours a week at my business trying to keep up with house horny Canadians binge-borrowing to buy real estate.
——————————————————————
Trying to keep up with the Joneses can be really difficult at times. That was funny.

#210 joblo on 12.20.17 at 11:11 am

http://media.loblaw.ca/English/media-centre/press-releases/press-release-details/2017/George-Weston-and-Loblaw-take-action-to-address-industry-wide-anti-competitive-activity/default.aspx

“Loblaw is offering customers a $25 Loblaw Card, which can be used to purchase items sold in Loblaw grocery stores across Canada. Starting on January 8, 2018, Loblaw customers can visit http://www.LoblawCard.ca to register and, if eligible, receive a card. The deadline for registration is May 8, 2018. In the meantime, customers can visit http://www.LoblawCard.ca to request a notification when registration opens.”

Register for $25 gift card.

#211 Victor V on 12.20.17 at 11:11 am

Foreign buyer home purchases declining in southern Ontario

https://www.bnn.ca/foreign-buyer-home-purchases-declining-in-southern-ontario-1.948990

TORONTO – New figures show foreign buyer home purchases are declining in a region of Ontario covered by a non-resident tax.

The provincial government says that people who aren’t citizens or permanent residents, as well as foreign corporations, accounted for 1.9 per cent of the transactions in the Greater Golden Horseshoe Region — which includes Toronto — from Aug. 19 to Nov. 17.

That is down from 3.2 per cent from the previous three months — a period that also saw a decline from the 4.7 per cent recorded in the first month the non-resident speculation tax was in effect.

In Toronto, the latest figures show 3.8 per cent of transactions were made by foreign buyers, which is lower than the 5.6 per cent in the previous three months.

The 15 per cent tax was imposed in April on buyers in the Greater Golden Horseshoe area — stretching from the Niagara Region to Peterborough — who are not citizens, permanent residents or Canadian corporations.

#212 Jose Wales on 12.20.17 at 11:15 am

There’s a great line in the Clint Eastwood movie “The outlaw Jose Wales”……..”don’t piss down my back and tell me it’s raining ”
….could be applied to these stats Canada figure !!!

#213 NoName on 12.20.17 at 11:25 am

genious

Charlie Lee, creator of the world’s fifth-biggest cryptocurrency, cashed in during a 75-fold rally this year.

The San Francisco-based software engineer whose litecoin was founded in 2011 sold and donated all of his holdings over the past few days, he said in a Reddit post. The disposal was aimed at preventing a “conflict of interest” when Lee makes comments on social media about the digital currency that could influence its price, he said.

https://www.bloomberg.com/news/articles/2017-12-20/after-7-500-rally-cryptocurrency-founder-sells-all-his-coins

#214 Herb on 12.20.17 at 11:26 am

At #109 on 07.08.16 at 11:39 pm, ROTFL posted a link headed “Distant Speculators and Asset Bubbles in the Housing Market.”

I would have hoped that the experts and critics on this board, including the host, would have taken cognizance of this post and accepted or disproved the conclusion that up to 5% of “distant speculators” (note the absence of any mention of race or skin colour) were enough to inflate house prices.

… we show that increases in purchases by distant speculators (but not local speculators) are strongly correlated with high house price appreciation rates …

http://www.econ.yale.edu/~shiller/behfin/2012-04-11/Chinco_Mayer.pdf

If so inclined, there are 52 pages of academic writing and statistics to argue with, but there is no point to keep insisting that “distant” money plays no role in our housing bubble.

It’s a matter of economics, not envy or xenophobia.

#215 Rational Observer on 12.20.17 at 11:28 am

The fact you cannot afford to live where you want is not someone else’s fault. Nor will any tax change that. How naïve many in Vancouver are. — Garth

——————————————————

Change the tax laws, Garth. Reduce income tax and increase property tax. The net effect is neutral on local taxpayers and reduces the incentive to use residential property as a bank vault.

Canadians? Naive? lol…

Property tax is the least fair. People should be taxed on income or consumption, not possessions. Absolutely feudal. — Garth

#216 Ponnaps on 12.20.17 at 11:34 am

Again, Garth, we are looking in the wrong place.

No survey of market activity is going to uncover two simple yet crucial factors driving prices UP, that you also seems to continuously disregard…

1. its not about origin of the buyer as much as it is about the origin of the money. Has any survey been conducted on Source of Funds and how much originated offshore?? overseas money not overseas dudes

2. All it takes is one transaction on a street or neighbourhood to set prices for future transactions. This is always how goes, no level-setting like the stock market… Transactions from these 4% foreign dudes could be all it takes to set upward prices, its not a trivial influence as the % suggests..

#217 Bytor the Snow Dog on 12.20.17 at 11:35 am

@163 Smoking Man-

Trump’s tax bill is more supply side/trickle down nonsense. Globalist to the core.

#218 IHCTD9 on 12.20.17 at 11:36 am

#8 nosurprise on 12.19.17 at 5:35 pm
Hey Garth, you know how the banking system works right? Explain to me how this is all caused by house horny Canadians if median household income is 68k in TO and Van.
_______________________________________

It isn’t those with 68K incomes buying 1 million crap pile boxes in the GTA – those folks are currently in the process of realizing it’s time to pack up and leave.

MANY households are 6 figures. At 2.48%, the only thing holding these folks back from buying right now was amassing the down payment – enter the BoM+D. A 1 Mil box (with a mortgage payment reducing 250K down from BoM+D) is a 750K mortgage which results in a 3300.00/mo. payment at 2.48. Not so hard for a lot of folks to do that payment.

NONE of the BoM+D patrons would own without having borrowed the big down payment. NONE of them would have bought at 6.4% rates like I had to do.

In a previous long standing RE climate, the same buyer would have had to save the minimum down, and then mortgaged 950K at 7.0% – this would have them paying 6700.00/month on the exact same house at the exact same price. More than DOUBLE. They would not, could not have bought at a 100+% increase in costs, no matter how moist they were. It would take a 525,000.00 contribution from the BoM+D to get that payment down to the previous scenario’s 3.3K/month.

Also, any Canadian owning RE at the time bubbly prices started got to ride the appreciation train. They can sell at huge prices, and then buy at huge prices simply because of this. Plus they would have gained some equity above and beyond appreciation from property improvements, and paying down the mortgage.

It will take high prices and double the current rates to start the meltdown short of some kind of crisis. Even then, there may still be plenty of RE crazed wingnuts somewhere who still have the big money and demented desire to buy a condemnable roach hotel in the GTA for 2-3 million for whatever reason. That’s all it will take to keep the bubble going.

#219 Ronaldo on 12.20.17 at 11:40 am

#178 Ponzius Pilatus on 12.20.17 at 6:33 am

Next up is declaring robots as workers subject to the same benefits as humans.
Imagine a labour union for robots.
This may even apply to your robot vacuum.
Brave new world, indeed.
————————————————————-
Well, not so far fetched. Bill Gates figures that any robot taking your job should be taxed.

https://qz.com/911968/bill-gates-the-robot-that-takes-your-job-should-pay-taxes/

#220 nosurprise on 12.20.17 at 11:43 am

#175 – Garth for your move up theory to pan out you would still need $100k cash in your jeans and $500k of equity in your existing home free and clear of any other debts and you would still need to max out all your lending power and you would probably still fall just short of an average home in GVR. In theory it is possible, but it still wouldn’t explain the other distortions such as inversely correlated housing prices to declared income tax rates across the region. It seems far more likely that maybe half of the run up is local speculators maxing out their lending power and probably the other half is 5-15% direct foreign ownership and other 15-20% non direct ownership though shell companies, buyers funneled through PRs, etc. This report does very little to answer all those unknowns and it is definitely not the slam dunk you are portraying here but hey its your blog.

#221 Renter's Revenge! on 12.20.17 at 11:45 am

#175 Barney on 12.20.17 at 4:44 am
Can someone explain then how with an average income of $70k in YVR (and even lower in TO) average house price there is $1.6 million?

No explanation implies flawed bs from stats canada.

The benchmark price for the average Van property is $1.046 million, and the average buyer is moving up from a condo or townhouse to a semi or a detached. They bring equity with them, and finance the rest. How hard is that to fathom? – Garth

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

That makes sense, but it also sounds slightly tautological. If “people have lots of equity” justifies high house prices, and then prices dropped 50%, equity would drop too, justifying the lower house prices. It’s like saying stock prices are high because people have lots of money in stocks. Fundamental analysis of markets requires some independent factor to evaluate the price of an asset. Hence the price to earnings ratio for stocks, or price to rent, or price to income ratio for property.

#222 Lonsdale on 12.20.17 at 11:46 am

#199 Lonsdale on 12.20.17 at 10:06 am
Have a read Garth , What do you think ?
20% to foreign buyers , that is significant

http://www.cbc.ca/beta/news/canada/british-columbia/vancouver-non-residents-statistics-canada-figures-1.4456657

Is that the 20th time this has been sent to me? A lot of folks in BC obviously love the CBC agenda. — Garth

——————————-
Agenda? That’s the facts. And 1 in 5 of new sales going to a foreign buyer is Ridiculous and should be stopped immediately.

#223 Proud Claustrophobe on 12.20.17 at 12:11 pm

The fact you cannot afford to live where you want is not someone else’s fault. Nor will any tax change that. How naïve many in Vancouver are. — Garth

As a much maligned 1%er I can live pretty much wherever I want. But there is an underlying issue of fairness with respect to home ownership in Vancouver. While it is quite correct to say that real estate ownership is not a right. It is also correct to say that everyone should have the same opportunity to live wherever they want so long as they work hard and have a little luck. There is a growing feeling that locals are at a disadvantage. Locals pay high taxes to support of social systems, obey environmental and labor laws, follow ethical business practices. Yet our government forces us to compete for shelter with folks that don’t face these hurdles. This is globalization run amuck and is one reason for the rise of Trump.

I have run production facilities my entire life and managed large diverse work forces. The one golden rule I learned early, is if one group felt another group was favored or had an advantage labor troubles would soon follow. If the situation in Vancouver was left unchecked social unrest would be the result. I am getting closer to the NZ position of banning foreign ownership outright. Immigrants are welcome, work hard buy a home and raise your kids here. If you want to work in another country, then fine, enjoy your house there.

I am sure you have some flippant cheeky remark.

I’ll just repeat yours and chuckle: “Everyone should have the same opportunity to live wherever they want so long as they work hard and have a little luck.” You have the opportunity, but it takes way more than a little luck. – Garth

#224 HaHaHa on 12.20.17 at 12:14 pm

Where did all the smart commenters to this site go? Same shite over and over people. Booooring

#225 Rational Observer on 12.20.17 at 12:16 pm

The fact you cannot afford to live where you want is not someone else’s fault. Nor will any tax change that. How naïve many in Vancouver are. — Garth

——————————————————

Change the tax laws, Garth. Reduce income tax and increase property tax. The net effect is neutral on local taxpayers and reduces the incentive to use residential property as a bank vault.

Canadians? Naive? lol…

Property tax is the least fair. People should be taxed on income or consumption, not possessions. Absolutely feudal. — Garth

—————————————————————

Hard to believe that on Tuesday, you complain about the tax free status of trust fund assets, and on Wednesday, you argue that the same assets should remain tax-free.

No further comment. I really don’t have any desire to effect change, in retrospect.

Twist things much? – Garth

#226 Jean Boulanger on 12.20.17 at 12:16 pm

After extensive research, I posted an expose about the bread price-fixing a fortnight ago, but the ad hoc tribunal here deemed it irrelevant, apparently.

Do you think it is a coincidence that all revolutions and several major wars were fought over the price of bread ?
Is it a coincidence that my daughter’s purse went missing while on a fact-finding mission to the USA, one of the major cartel players.

Sheeple wake up, your toast is ready!

#227 april on 12.20.17 at 12:18 pm

#199 – Why do people think that because it was said on CBC that it must be true. From what I understand the RE industry controls the press so now who do you believe?

#228 IHCTD9 on 12.20.17 at 12:21 pm

#219 Ronaldo on 12.20.17 at 11:40 am

Well, not so far fetched. Bill Gates figures that any robot taking your job should be taxed.

https://qz.com/911968/bill-gates-the-robot-that-takes-your-job-should-pay-taxes/
__________________________________

Bill must hate the unemployed. Obviously Robots can’t pay taxes as they do not earn a paycheque. That means the company “employing” the robots to make products will have to pay those taxes. That in turn means that said products will include said taxes in the sell price.

That then means the guy who lost his job will end up paying the robots’ taxes.

#229 april on 12.20.17 at 12:24 pm

I laugh at some of the bloggers here who try to tell Garth to look up certain areas pertaining to housing. Garth has access to more stats than any of you folks, your just advertising your own ignorance.

#230 Boombust on 12.20.17 at 12:26 pm

#220 nosurprise

Oh, I am quite sure rock bottom interest rates would have taken care of the rest of it!

#231 Giver - AB on 12.20.17 at 12:31 pm

#140 Mark on 12.19.17 at 10:52 pm

Hey Mark – I think you’re looking in the wrong place. bctechnology.com is where anybody in tech in BC goes for job listings. They currently have ~725 open job postings in the eng/software/web/tech/scientific category – most in Vancovuer. Tech in BC and particularly in Vancouver is booming. The problem is they have a hard time attracting workers with real estate prices…

In my experience a PEng in tech is pretty rare and pretty much irrelevant. Nobody asks for it and nobody pays more for it. Consequently, nobody would advertize a tech job opening with APEGBC.

——————————————————————-
“As I said before, there’s massive demand for tech workers. “

Not for Canadian tech workers. The job boards are pretty much empty these days.

https://www.egbc.ca/Careers/Career-Listings?d=COMP&ps=25

Yes, that’s right, a grand total of two postings in the Computer/Software engineering field through APEGBC.

I think Troll is once again the victim of some pretty unfortunate propaganda.

#232 Fish on 12.20.17 at 12:39 pm

there you go for a read hug a thug

https://globalnews.ca/news/3925330/convicted-criminals-in-manitoba-getting-early-release-from-prison/

Convicted criminals in Manitoba getting early release from prison

#233 Smartalox on 12.20.17 at 12:59 pm

People seem to be OK buying property with help from ‘The Bank of Mom and Dad’.

Why is it suddenly NOT OK if ‘Mom and Dad’ live in a different country? Or have a different skin colour? Or different facial features?

#234 AGuyInVancouver on 12.20.17 at 1:13 pm

#73 Smor’s on 12.19.17 at 7:41 pm
What the Stats Canada figures fail to show is where foreign money is used to by a Canadian resident a piece of real estate.

Proxy ownership is hard to track. FINTRAC reporting requirements are routinely violated by real estate agents. See link (apologize as I don’t know how to add the link properly)

http://www.cbc.ca/news/business/fintrac-real-estate-money-laundering-1.3761343

Also, lawyers are exempt from FINTRAC reporting requirements.

Lawyers are not exempt. – Garth
_ _ _
Sorry Garth, that’s just plain wrong:

“Sections of the federal government’s anti-terrorism and money laundering financing law are unconstitutional because they violate solicitor-client privilege, the Supreme Court of Canada declared Friday.

In a 7-0 ruling, the court carved out an exemption for lawyers from the federal government’s 2000 law that targets money laundering and terrorist financing. The law still applies to other professions, such as financial institutions and accountants…”
http://business.financialpost.com/legal-post/lawyers-secure-exemption-constitutional-exemption-from-fintrac-reporting-rules

As to foreign buyers, we’ve gone round this before and in other posts you quasi-admitted it was part of the problem in Vancouver, but there was nothing anyone could do about it. The 20% of new condos going to offshore buyers is not irrelevant, especially when developers are pushing for “more supply” as the solution to the affordability crisis.

Try buying a property without your lawyer submitting a FINTRAC report. You can’t. – Garth

#235 IHCTD9 on 12.20.17 at 1:31 pm

“It is also correct to say that everyone should have the same opportunity to live wherever they want so long as they work hard and have a little luck.”
____________________________________

I feel the world should be void of hate, and war. Everyone should have enough to eat. No one should be poor. Everyone should be happy every day. No one should ever get sick. Everyone should love each other. The Leafs should win the cup one time out of 5 years at least.

#236 Doug in London on 12.20.17 at 1:41 pm

Why do so many people in this delusional country think everyone in the world wants to move to Kitsilano? Or Etobicoke? To Halifax? Or Calgary?
—————————————————-
You mean they don’t want to move to Kapuskasing or Flin Flon?

#237 Paul on 12.20.17 at 1:52 pm

Sold last night 13 offers $1,408,888

https://www.rew.ca/properties/W4006466/21-courtsfield-crescent-toronto-on

#238 SteveJ on 12.20.17 at 2:02 pm

So in many parts of Vancouver foreign ownership (in the strictest definition) is up to 8%, while SFU’s Josh Gordon has identified 20% of new condo builds to be “foreign” owned. The stats also include Canadians who’s principle residence is elsewhere. I realize you like to ignore this influence, but I’m not sure who you think are purchasing all these multimillionaire dollar homes on the westside or million plus condos. The term used should be foreign or global capital. Income earned abroad that’s not linked to the local economy. And as so many have mentioned the stats don’t include the huge number of proxies that purchase as student or homemakers, while the income earner resides and earns offshore. Nor does it include presale condos which are often asssigned (flipped) by global capital investors before completion and their names never appear on title (taxes paid? Who knows, but often avoided as CRA now seems intently curious of the practice). And of course locally incorporated companies owned by non-residents are also not included in the data. I realize you think there is no problem with decoupling the housing market from local incomes and yes speculation from locals is also huge; but let’s not pretend there is no influence from global capital sources that have priced local incomes out of huge segments of the market (or stretched them far too thin, though admittedly making thousands of other local residents rich). StatsCan will no doubt release more data when they cross reference property titles with tax returns. Perhaps the BC govt will change how presales are recorded so that part of the market can be more easily tracked. Knowledge is power.

#239 Paul on 12.20.17 at 2:03 pm

#234 AGuyInVancouver

Try buying a property without your lawyer submitting a FINTRAC report. You can’t. – Garth
——————————————————————–
Try selling.buying or leasing with an agent.
With out a Fintrack

#240 IHCTD9 on 12.20.17 at 2:06 pm

#206 Kim on 12.20.17 at 11:00 am

Actually that is hard to fathom. The higher prices go, the more difficult it is to move up, let’s say you bought a condo for 250k 5 years ago. Let’s say a single family home in your hood went for 600k also 5 years ago. Now let’s say prices have doubled since then. You sell your condo for 500k. But that single family home is now worth 1.2million. That means, even if you had bought with cash initially, and ignoring transaction costs, you still have to foot 700k, or borrow it somehow.
________________________________

The full 1.2 Million mortgaged at the old balloon inflating 2.48% is 5400.00/moth. That is a big chunk even for a well earning dual income. But our subjects had 300K in equity which is easily realistic, so the mortgage is down to 900K, and payment becomes 4000.00/month. That becomes sizeable, but doable for a decently employed couple working full time. If they rented out the basement illegally as so many do, now they may only be paying like 2000.00/month. I can easily see the 1.2 Mil prices at 2.48 rates and no enforcement of rental unit rules. Easy even.

The problems don’t show up until rates are 5.0 ($4700.00/month), 6.0 ($5100.00/month) or 7.0 ($5600.00/month) coupled with a crackdown on rentals.

The rates aren’t there yet, but it looks like they are coming.

#241 S.G. Tallentyre on 12.20.17 at 2:09 pm

I disapprove of what you say, but I will defend to the death your right to say it.

#242 Bhad Bhabie on 12.20.17 at 2:25 pm

DELETED

#243 Kim on 12.20.17 at 2:34 pm

#240

Yes a 1.2 million dollar home is doable at current rates and with a mortgage helper. BUT to move up from that (keep in mind that townhomes in east van are going for over 1 million) is very difficult unless you want to put everything in your house which some people do. My point is it gets progressively more difficult even at lower rates.

#244 Ubul on 12.20.17 at 2:45 pm

Try buying a property without your lawyer submitting a FINTRAC report. You can’t. – Garth

Which one will the lawyer submit every time when a property is purchased?

http://www.fintrac-canafe.gc.ca/reporting-declaration/rpt-eng.asp

http://www.fintrac-canafe.gc.ca/re-ed/real-eng.asp

#245 CBC breaking news ..... on 12.20.17 at 2:55 pm

Peter Mansbridge admitted under oath that the CBC faked the FLQ crisis. ” It was really a turf war between Weston’s and Premiere Moisson” he said in the Senate. Details to follow….

#246 BillyBob on 12.20.17 at 2:57 pm

The 15% tax in Toronto and Vancouver was obviously race-based and we should all be ashamed of it. Of course, it failed. So did we.

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

Your self-righteous virtue-signalling is tiresome, nauseating, and frankly, disappointing. Will you be buying trendy socks too soon?

Foreign money is not a race. The majority of it comes from a single country, hence it is mentioned frequently, but that’s also not a race. A debate about whether trying to prevent people not of your country purchasing it, is xenophobic – fine. (Of course, as long as you consider that many other countries have far tighter restrictions on foreign ownership. Bastions of intolerance like, Switzerland).

But the “racist” brush paints wide and discredits the one who wields it, not the the ones it targets, alas.

Funny thing is I want to believe you. Unfortunately I’m living both ends of the money pipeline so I have no choice but to believe my own eyes. Not someone perched in a tower in Toronto.

Just admit it. Faster. — Garth

#247 Victor V on 12.20.17 at 3:12 pm

U.S. House approves tax bill in win for Trump

https://www.bnn.ca/u-s-house-approves-tax-bill-in-win-for-trump-1.949143

WASHINGTON – The Republican-controlled U.S. House of Representatives gave final approval on Wednesday to the biggest overhaul of the U.S. tax code in 30 years, sending a sweeping US$1.5 trillion bill to President Donald Trump for his signature.

In sealing Trump’s first major legislative victory, Republicans steamrolled opposition from Democrats to pass a bill that slashes taxes for corporations and the wealthy while giving mixed, temporary tax relief to middle-class Americans.

#248 IHCTD9 on 12.20.17 at 3:56 pm

#243 Kim on 12.20.17 at 2:34 pm
#240

Yes a 1.2 million dollar home is doable at current rates and with a mortgage helper. BUT to move up from that (keep in mind that townhomes in east van are going for over 1 million) is very difficult unless you want to put everything in your house which some people do. My point is it gets progressively more difficult even at lower rates.
_____________________________________

I just go ahead and assume ALL regular working folks put everything in for a big city SFD. Everything they’ve got goes to the house. No savings at all. These folks are why this blog exists. 1 asset strategy.

If YVR/GTA ever corrects significantly, I will be going all in on cat food manufacturing stocks, as thousands of seniors will be living off it.

#249 RL on 12.20.17 at 4:01 pm

There’s this recurring theme that disbelief of official government stats must be due to inherent racism. I don’t think so (well, maybe part of it, but not the whole story). What we want to know is not, what was the impact of foreign BUYERS (easy enough to game the system), but what was the impact of foreign MONEY. Clearly much harder to track, but anecdotally, we’re hearing and seeing that it is MUCH higher than 5%. How much more – who knows? And perhaps even 5% was enough to make the domestic market overreact. I don’t think we walk back regulations on foreign investors as a result of this one data point. Houses should not become just another commodity, period.

They are. Get over it. – Garth

#250 Russ on 12.20.17 at 4:02 pm

Canadians? Naive? lol…

Property tax is the least fair. People should be taxed on income or consumption, not possessions. Absolutely feudal. — Garth

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

I’m with you completely Garth.

We should tax on income or consumption, not both.

And not as per current affairs where there is tax on income and consumption and possessions (including dog license) and taxes and services!

Imagine a consumption only tax…
no longer required:
RRSP, TFSA, Family trusts & other registered accounts, property assessment offices, a whole bunch of lawyers & CRA dudes.
It will beat USA tax improvements so more manufacturing comes to Canada.

Municipalities might need to do with less ’cause their income stream got hacked, but people will enjoy new freedoms as a result.

Utopia.
If I don’t want to support an over-sized government then I just need to spend less.

#251 Overheardyou on 12.20.17 at 4:07 pm

#42 millmech on 12.19.17 at 6:54 pm

—–

If this be true, housing is going to be spectacular in the coming years

#252 Ray on 12.20.17 at 4:07 pm

A “High-Speed Train” was making its debut run when it left the tracks doing 80 mph on a curve designed for 30 mph. The “Engineer “was talking to the conductor at the time. This is why autonomous trains, cars, and trucks are needed. Australia is at the forefront of this technology with autonomous trucks driving between mine sites. Another reason people cannot take their jobs for granted, Ergo 30 yr mortgages
https://www.nbcnews.com/news/us-news/amtrak-derailment-conductor-was-cab-engineer-deadly-washington-train-crash-n831341
https://www.inverse.com/article/25729-australia-mining-company-rio-tinto-autonomous-trucks-drills-trains

#253 Ubul on 12.20.17 at 4:43 pm

Just admit it. Faster. — Garth

https://www.marxists.org/reference/archive/mao/works/red-book/ch27.htm

#254 Kelsey on 12.20.17 at 4:44 pm

I bet house prices in Hawaii are expensive solely due to local speculators too…

Garth, I think most of the Blog Dogs get that cheap money is the primary factor and there are issues such as limited supply and NIMBYs that also play a role, and that locals share as much of the FOMO blame as anyone else, but to assume that hot capital flows don’t play an important role is just silly and toeing the politically-correct line. Canada is similar to an emerging market in that it can quickly be overwhelmed by large pools of overseas capital creating boom and bust cycles. It doesn’t matter where the people come from, what matters is where the money comes from (local economy vs. global). I’m half of the mind that you’re just trolling us with these posts!

When there’s evidence we are being overwhelmed by hot capital flows, I’m in. But there isn’t. – Garth

#255 alex stanford on 12.20.17 at 4:55 pm

https://ca.yahoo.com/news/trudeau-violated-provisions-ethics-law-172552292.html

but he is not in jail. He rules Canada instead.
He said sorry and that’s it.

same for the wild ‘the conflict of interest’ bill.
But hey, CRA is coming after you in the new year if you are a small business owner, doctor or a lawyer!

#256 SilverSon on 12.20.17 at 5:21 pm

When there’s evidence we are being overwhelmed by hot capital flows, I’m in. But there isn’t. – Garth

Agreed. Hot capital isn’t money that was borrowed in Canada yet Canada has $1.5-trillion in mortgage debt. The locals borrowed that $1.5-trillion. Unless hot capital flows have exceeded $100-billion (7% of $1.5 trillion) there’s no clear evidence that Canada is being overrun by it. Is hot capital flow over $100-billion?

#257 Gravy Train on 12.20.17 at 5:44 pm

#140 Mark on 12.19.17 at 10:52 pm
“[There’s] [n]ot [much demand] for Canadian tech workers. The job boards are pretty much empty these days.”

Mark, making use of a job board is literally the worst way of finding and getting a job (chance of success is 4%). See the Forbes’s article “The 10 Best And Worst Ways To Look For A Job” below:
https://www.forbes.com/sites/nextavenue/2016/09/05/the-10-best-and-worst-ways-to-look-for-a-job/#42a4e4632e7b

I want you to succeed in life, Mark, and in order to find and get your dream job I strongly suggest that you read Dick Bolles’s book What Color is Your Parachute?
https://en.m.wikipedia.org/wiki/What_Color_is_Your_Parachute%3F

You might also want to explore his Web site:
http://www.jobhuntersbible.com

#258 Ace Goodheart on 12.20.17 at 5:45 pm

Let the crash begin:

https://www.coindesk.com/low-can-bitcoin-go-charts-hint-11k-might-play/

This could be epic. Let’s see what happens when everyone tries to sell to lock in their gains (or reduce their losses).

Down she goes.

Oh well, there are probably a hundred or so new cryptos created out of thin air every week. Maybe one will be the new bitcoin?

#259 AGuyInVancouver on 12.20.17 at 6:19 pm

From that hotebd of Xenophobia, Global news:
“Canada overtook the U.K. for the first time to become the second top emigration destination for China’s rich, according to a well-known poll of the country’s high net worth individuals.

The U.S. remains No.1 choice, but “overall, U.S. cities have seen a fall in favour since the Trump presidency,” according to the annual survey, which was carried out by Hurun Report, a Shanghai-based research group, in association with Visas Consulting Group, a legal service for emigres…”
https://globalnews.ca/news/3609338/canada-now-no-2-emigration-destination-for-chinas-rich-report/

#260 BG on 12.20.17 at 6:23 pm

#141 Old vs New on 12.19.17 at 10:56 pm

“BitcoinCash and Ethereum are the new story”

Nope, Ethereum is old news now too. It’s EOS and NEO that are all the rage now.

Coins that pay dividends as you are holding them. Sweet!
—————————————————————

Paying dividends was always on the road map for Ethereum, and will be implemented.

Going after the last shiny thing in crypto is the best way to lose money.

#261 Richmond on 12.20.17 at 6:44 pm

So according to the Province news today, non residents own 24% of the new condo’s recently built in Richmond, 23% in Coquitlam, and 19% in Vancouver. But that couldn’t have an effect on prices, could it?

#262 darcelona on 12.20.17 at 8:47 pm

Finally the myth of foreign ownership has been debunked. If you guys ever want to see what foreign ownership looks like.. go to Los Angeles or NYC. At least 10-15 percent in southland and NYC is probably higher than that. But hey.. they’re Tier one RE market. Toronto is not on the same level no matter what some RE hack says.

#263 Another proud claustrophobe on 12.21.17 at 4:20 am

Garth, I’ve enjoyed your blog for a few years now and learned quite a bit from you and some of the contributors in the comment section. That said, I think you’re wading out into deep water, way over your head when it comes to foreign capital and it’s effects on the YVR real estate scene. These latest stats that you so heavily rely on just don’t jive with what’s really going on here. You really should take a trip out here and have a look around.
I’m sure there are a few of us Vancouverites here in the comment section who would love to give you a guided tour.

– insert flippant, cheeky remark here —>

#264 islander on 12.21.17 at 2:22 pm

“the message has been of balance”………Yes, the message has been of balance……….thanks, Garth, and happy holidays!

#265 Anne Wilson on 12.21.17 at 2:38 pm

There is no possible way for the government to know what % of house buyers are Foreign. There are so many ways to get around the tax. Maybe 50% are by proxy, maybe not but I bet it’s a large %. It’s not important now. The damage is done and we, who rent, and are waiting for the carnage, can all look forward to sunshine and rainbows. January 1st will be extra special this year. Champagne will taste extra sweet. So glad both my kids held out and were patient as they will be rewarded. Merry Xmas everyone.

#266 Mike_F on 12.21.17 at 5:16 pm

Garth – I’m a long time reader.

A couple of potentially significant things that the Stats Can results likely do not reflect:

1/ Permanent residents who purchase properties with cash from foreign family members, like parents. Not “foreign owned” – but still foreign money pushing up demand.

2/ Foreigners – or foreign money – purchasing and selling pre-sale development projects. This “property flipping” has been rampant in Vancouver and restricts supply and drives up demand.

How, exactly, is this different from the impact of the Bank of Mom? Or people fleeing from Toronto? – Garth