The politicians giveth. They taketh away. They also screweth over.
One day after BC’s tax-tax budget, with reflection, thought and a few single-malts, it’s clear government has crossed a line. Elected officials have purposely, deliberately, set a course to crash a housing market. And they admit it.
When Finance Minister Carole James was asked, bald-faced, if the Dippers are attempting to engineer a price plop, she said, “Yes.” Then she admitted the province brought in $500 million in new annual housing taxes without actually knowing the consequences. “We’re take some very bold steps. There are firsts here and we’re going to track it carefully.”
Legislation without modelling. This must be a first. To its credit the BC realtors’ association had a stark response: “I can’t imagine a government telling homebuyers who bought a home in the last year that we are purposefully trying to put you under water.” And under the waves could cover a shocking number of people.
If prices in Van drop just 25%, which suddenly seems like a no-brainer possibility, a stunning one quarter of all households with mortgages go into negative equity. That means their mortgages are greater in size than their property is actually worth. Yikes. And not only would they have a monster debt and have shed their savings/downpayment, but mortgage rates are guaranteed to increase this year and next, completely diddling the family balance sheet.
It gets worse.
A politically-driven market decline – now almost certain with the spec tax, the 20% go-home tax, the higher property tax, the empty houses tax plus the expansion to most of the province, along with rising loan rates and the borrower stress test – will mean lower appraisals, decreased lending limits, reduced mortgage originations, job loss and (most significant) less building. So fewer new homes. Just when the populace is screaming for ‘more supply.’
If private construction slows (count on it) the $6 billion in public money the NDP is committing to build ‘affordable’ homes will seem like one widdle finger in a bursting seawall – leading to more spending and more taxes.
But it gets even worse.
The ‘speculation tax’ – 2% annually of a property’s value by next year – isn’t a tax on speckers or flippers at all. It’s just another hit on the wealthy. And the definition of rich is anyone owning two properties. While most BCers support this because they think it pokes a stick in the eye of well-off foreigners, the biggest impact could be on Canadians, and the locals whose cottages, cabins, ski lodges and recreational properties are about to be creamed.
Far more ‘second’ properties in BC are owned by folks who live in Alberta or Ontario than in China. There are thousands of resort homes in the mountains or the Okanagan which for decades have been in the possession of families in Calgary or Edmonton, while a prime market for Victoria condos has always been southern Ontario. Now those people – the Dippers have confirmed – will be slapped with a 2% tax that will cost $1,000 a month on a property assessed by the province at $600,000.
Only by renting the property out continuously on a one-year term, moving in full-time, or getting a job and paying income tax in BC, can this Hoovering be stopped. Meanwhile the owners from other provinces pay local property tax. They pay income tax. They pay sales tax, gas tax, utility bills and spend millions on goods and services while at home in BC. “This changes the economics of buying and holding real estate,” says BeeMo economist Robert Kavcic. And as a result, you can expect a wave of sales – and the same downward pressure on prices in the rural areas as will occur in YVR, Victoria, Kelowna and the LM.
It’s a sad Balkanization of the country. Now dudes from the GTA are just as unwelcome on the Left Coast as dudes from Guangdong. The incentive to dump assets in BC is huge – exactly what the NDP and its supporters seem to cheer for.
So, put it all together. Scary. A forced market meltdown. A debt crisis in an untold number of households. Reduced economic activity. The expulsion of fellow Canadians. Tax, tax and more tax. And yet, if Vancouver real estate prices dropped by 50% – plunging the province into recession – 98% of the population still could not afford a detached house.
Higher mortgage rates, new borrowing regs and moronic household debt levels were bringing a market correction anyway. Political incompetence might make it Biblical.
410 comments ↓
Let me interpret…….
When Finance Minister Carole James was asked, bald-faced, if the Dippers are attempting to STOP THE MONEY LAUNDERING, she said, “Yes.”
Inconsequential. – Garth
BCers have become lazy. Why invest and grow a business when all you have to do is buy a house? Real Estate is a non-productive asset. It sucks capital way from all other assets. Hopefully now BC can get back to sustainable growth and focus other parts of the economy that have been neglected.
Its a ballsy move by the NDP…but like you said yesterday, Mills are now the largest voting block, and this will definitely get their attention and maybe get them into a house in the near future.
Who knows. There will be undoubtable carnage from this, but honestly Im ok with it. Its draconian for sure, but when I read those dirty piece of garbage libs tucked away a warning about laundering foreign money…20 Fu**in ye years ago, to hell with them all.
I would have never thought i’d vote NDP..but you know what, follow up this with throwing crocked politicians in Jail (and seizing assets/suspension of pensions of course) and they might swing me over.
What do they call it Garth? A lifestyle audit? Any former high up should be given one ASAP. I have ZERO problem with people making a buck, I am beyond tired of corruption and Ill gladly get behind any party that ferociously attacks it.
Comments will be juicy today..get your popcorn :)
Once again, Garth hits the nail on the head here. The problem is not a physical shortage of housing. Nor foreign buyers (which are mostly non-existent, and foreign selling and outflows may very well be more prominent over the past few years). Its all about excess speculation and credit.
To fix this problem, the government has taken a number of steps to basically reduce the amount of credit available for speculation in RE.
Unfortunately for the “landlord families” which have hoarded 20-30 properties, mostly on high amounts of credit, they’re going to basically be “ground zero” for the RE implosion. Already, we’ve seen plenty of examples of their valiant efforts to foment the allusion of rising prices in the past few years simply so they can do one final round of cash-out refinancings, and keep their loans current. After all, cash flow and rents simply don’t cut it anymore.
The efforts to attack speculators on a rental or ownership basis seem quite unwarranted however, and foreign buyer taxes are likely to collect only minimally as there are very few if any foreign buyers. Government policy set through populism, rather than deference to actual statistics and science, is rather unfortunate and could lead to some pretty significant long-term consequences. If the Government of BC is willing to confiscate value from home owners, including sellers of houses, through these tax grabs, why should they be trusted not to do the same for the various other types of investments that are proposed or are operating in BC? Unwittingly the government thinks they’re trying to help housing affordability, but they may be damaging the long-term availability of capital to legitimate, non-speculative housing purchasers, as well as capital availability to BC industry.
My husband and I moved from Toronto to Texas a week before the elections in 2016. A week later I was not very happy about it. However, here we were able to afford a fairly big detached house in one of the best school districts (with a pool) for less than 350k. We are also making more money here 230k a year,, with great health benefits, and we have savings for the first time in years. In Canada we had rent a townhouse in Mississauga, we could not buy a house because of the bidding wars, and had almost no savings eve though my husband and I had profesional jobs. Don’t get me wrong I love Canada, but the life we now have here, would have been hard to get there. I know we still have to see the Clown president on the news every day. Nothing is perfect… Just saying
Welcome to my nightmare……
Australian banking analyst Brian Johnson uses the analogy of a desert island to explain how quantitative easing, or printing money, has driven up property prices.
http://www.abc.net.au/news/2018-01-17/surging-property-prices-explained-using-a-coconut/9337328
Hi Garth, my 60/40 portfolio is doing great!
Thanks
Becki
Single malt?
I like GlenGrant, Glenfiddich.
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It’s a sad Balkanization of the country. Now dudes from the GTA are just as unwelcome on the Left Coast as dudes from Guangdong. The incentive to dump assets in BC is huge – exactly what the NDP and its supporters seem to cheer for.
So, put it all together. Scary. A forced market meltdown. A debt crisis in an untold number of households. Reduced economic activity. The expulsion of fellow Canadians. Tax, tax and more tax. And yet, if Vancouver real estate prices dropped by 50% – plunging the province into recession – 98% of the population still could not afford a detached house.
Higher mortgage rates, new borrowing regs and moronic household debt levels were bringing a market correction anyway. Political incompetence might make it Biblical.
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What strong words!
Balkanization when laughing at the Balkans?
What an irony.
Surpassing anything I have ever said on this blog.
And then I am the idiot and the scaremonger?
Oh, you have seen nothing yet my friends, absolutely
nothing.
I’m confused. You’ve spent years telling us the housing market is overvalued and that locals are mainly to blame (aided by low interest rates). Yet when a government actually acts on your sentiments to take on those local forces you criticize them for it! There is a lot to like in this budget including the speculation tax, the pre-sales registry and finally allowing higher property taxes on high-end properties.
Now your line of thinking seems to jive with that of realtors, that nobody should ever lose equity and real estate should always keep going up.
I know you’re confused. It’s okay. No, really. – Garth
“NDP is committing to build ‘affordable’ homes will seem like one widdle finger in a bursting seawall – ”
Classic Gartho. I’d expect the Dippers plugging the dike. In the name of inclusion.
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Elected officials have purposely, deliberately, set a course to crash a housing market.
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Wasn’t that part of the BC NDP and Greens election platform?
http://www.bcgreens.ca/affordable_homes
https://www.bcndp.ca/latest/600k-thats-what-christy-clark-cost-many-bc-families
I will never forget visiting a top french cuisine millionaires restaurant in Toronto with plate north of 100 $, salad north of $ 25 and bottle of decent french wine north of 100 $ and the homeless begging guy in front of it, I was the only one from the company, giving him a (rather large) bill.
I will never ever forget the look on his face.
World class city? Sure.
Premier John Horgan’s NDP government has taken steps to tamp down speculation in B.C. real estate by imposing a new speculation tax and increasing the foreign buyers tax to 20 per cent.
http://vancouversun.com/news/local-news/b-c-budget-2018-b-c-ndp-increases-and-extends-housing-taxes-in-effort-to-rein-in-speculation
After having lived in whistler for two years and tried to buy into the market – it is impossible for Canadians to compete with people coming in from Hong Kong (where there is zero income tax) and laying out 3 Million plus for a house. They park their wife and kids here and commute back and forth during school holidays thus paying no Canadian income tax since the breadwinner does not “live” in BC. Locals cannot compete in this market. Prices have risen crazily over the last 4 years. A house listed for $900k 4 years ago just sold for 2.8M last month. I can afford $900k but not 3Million. I’m not looking for a mansion, just a 3 bedroom, 2 bath house. So i’m All for a crash since I cannot compete with people who have not paid income tax for the past 15 years.
Did you even read the post? Guess not. – Garth
And just think a lot of this could have been solved if the Bank of Canada had just started raising the rates earlier instead of dithering around looking for any old reason to keep them so low for so long.
Now- we have government legislation – and when it all collapses how agile and nimble will they be to remove all the added restrictions and tests and taxes. Sheesh.
#2 Arto on 02.22.18 at 4:45 pm
BCers have become lazy. Why invest and grow a business when all you have to do is buy a house?
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I’d say the whole Canadian economy has become lazy, in a way. Why bother investing and creating new businesses, technologies, etc, when you can just build houses and condos, or sell them, or lend out money? It’s distorted our whole economy. We were already lagging 20 years ago when it comes to business and technological innovation, and having our economy focused more and more on residential real estate surely hasn’t been helping it.
Didn’t B.C. introduce the Foreign Buyer Tax and then it blew over to Ontario? Could Ontario be due for a speculator tax like this one in B.C?
NDP Housing crash catalyst…not cause. You have already gone over that a million times ( the real cause of the runup). Perhaps finally this may bring sense back into the market. No..Vancouver and Toronto will never be affordable…but the suburb SFH shouldnt be 1 million. Crazy. People may be underwater…but NDP wont be the cause..they were greater fools.
There are thousands of resort homes in the mountains or the Okanagan which for decades have been in the possession of families in Calgary or Edmonton, while a prime market for Victoria condos has always been southern Ontario. Now those people – the Dippers have confirmed – will be slapped with a 2% tax
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The BC provincial government wasn’t satisfied with federal interprovincial equalization payments, so they created their own.
I’m a firm believer that the entire tax system needs to be over hauled. Things such as OAS, child benefits, daycare subsidies and all other gov’t funded welfare programs should be given based on an income and net worth bases.
I think CRA should look into cash back and travel points credit cards in the business sector. I know a few who get $20k a year in travel points. This is untaxed income in my opinion. There is a big difference between personal credit card points (all purchases are after tax dollars). Business purchases or employer reimbursements for goods and services for the business are done in pre tax dollars therefore a 1 or 2% cash back on credit cards is untaxed revenue.
Income tax should be family based once married. It’s not fair that 2 households with the same income can be taxed completely different based on the income difference between spouses.
Our selfie PM should worry more about actual fairness rather than the illusion of it!
Garth, now you’re being inconsistent. On the one hand, you’re saying that the market will go down when interest rates rise etc., and all the moisters who bought will be weeping, and that’s okay. But now that the government is saying that the prices and speculation is out of control, and that basically what you predicted SHOULD happen to stabilize the market, avoid money laundering, you’re saying that the government is overstepping. According to what you were saying earlier, if the government in BC brings down the prices now, it will stop a much harder collapse (uncontrolled) in the future. So what’s the problem?
Also, I don’t completely understand, why are you saying that it’s not fair that the government is subsidizing the owners (with different tax incentives), but now that the government is actually pulling away from such policies, and wants to punish speculation, you’re saying again that it’s not fair. I don’t understand how these things are consistent. You need to pick one, it’s either good to give incentives to property owners, or bad. You can’t complain in both cases that the government is wrong. All of this, is of course, my humble opinion.
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When Finance Minister Carole James was asked, bald-faced, if the Dippers are attempting to engineer a price plop, she said, “Yes.”
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That is badass! My hero for the last few months was Jordan Peterson, but now it’s Carole James. How is it that the liberals manage to do so much damage everywhere they go? I bet they never saw the attack coming from the left!
Market decline in gta will be biblical. Already seeing in parts of north york. Sauga too and obv richmond hill/markham. We’re not even into spring yet in this first year of the market rolling over. Watch for lots of listing, competing prices (on the downside) and a whole lot more
NDP – New Democratic Party
It should really be changed to No, Don’t, Please, because it seems that’s what BC is going to be yelling. That 2% tax is a gigantic slap in the face, followed by a bending over. I hope they spit first.
The NDP is a very dangerous political party. They destroy economies in one fell swoop. The did it in BC in the 1990s and they are on track to once again destroy it. When will they learn that government intervention only leads to heartache. You’re right Garth by saying that the private sector is going to stop building houses. The supply will become even worse and nothing will be solved but in the meantime the economy will go in the crapper. Nicely done you NDP morons.
I dunno Garth…looks like you’re chasing your tail a bit on this one. Nothing in the 30 point housing plan does anything that would prevent a house horny moister as you like to call them from asking Mom and Dad for a few hundred thousand and keep buying. If this is what has really caused the bubble to inflate as you have said so many times here, there shouldn’t be anything to fear from policies that target foreign buyers, out of BC tax residents, tax evaders, and money launderers right since combined they represent an insignificant portion of the issue compared to house horny locals. Right?
If you are seeking ground zero for this tax look no further than Whistler, shangri la for second homes and out of province owners. Places I was looking at 3 years ago have since doubled and many newish buyers rely on the ski rental crowd to fund mortgages while also paying high strata fees. They use it a couple of weeks, winter and summer, and rent it for the rest of the time, hoping to build equity on continued price appreciation while running at breakeven on costs. An additional $1000/mth is going to hurt and throw this calculation out the window. Boom.
So the NDP has grabbed the carving knife and is going to eyeball it and roughly guess how much fat to cut off the pig.
We will see what happens.
The only thing on the Liberals menu was a Cholesterol Sandwich…
M43BC
lessons learned?
https://www.ft.com/content/254bb8a8-1940-11e7-a53d-df09f373be87
For Stan’s eyes only:
https://youtu.be/ArSLNJNUEIM
I am no dipper but the Liberals HAD to go. I sometimes wonder if a set government term length would be wiser. They always seem to get corrupted. But it get’s even worse … we are subjected, as you know, to many more taxes than you mentioned. Transit anyone?
Only by renting the property out continuously on a one-year term, moving in full-time, or getting a job and paying income tax in BC, can this Hoovering be stopped. Meanwhile the owners from other provinces pay local property tax. They pay income tax. They pay sales tax, gas tax, utility bills and spend millions on goods and services while at home in BC
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Yes!
Tax them more. Municipal, provincial, federal taxes! Carbon taxes. pleasure taxes.
They are rich so they can pay.
I own wild bill 1000 bucks for the orgasmic pleasure I just experienced. Sending it with my T4 form.
Garth,
In Vancouver, a huge number of house owners rent their basement for $100 bills. Plenty of $100 bills in their wallets.
They of course don’t declare it to the government.
Everybody cheat in BC.
How exactly is the government going to find out that a house or condo is empty?
They will keep the heating on. Doesn’t cost much here.
Then they will install various timers to turn on/off the lights at specific times. We will end up with robots living in Vancouver, with no humans at all!
Not going to crash the RE market a single penny!
I sure hope this doesn’t mean the orange license plates move over to vacation at Kootenay Lake instead of the Okanagan.
Garth,
Is it really the Dippers who are doing this or the Greens because if the Greens don’t get thier way, the Liberals will take over?
I thought only locals were in the market ? So who cares
Locals just gona keep buying
Our family has $1m in cash sitting in brokerage accounts – we are late 30’s and now 40% of it is in cash – every single one of our friends in the last 3 years has impulsively thrown themselves in to the Vancouver housing market – virtually none of them spent a minute doing any research, thought about the political climate etc. I spent three years going from dinner party to dinner party having to listen to every single person there laugh about how much money they’ve been making in their property. I’ve spent three years writing, corresponding, analyzing, researching, following thought leaders, media coverage, capital flows, tracking chinese language websites (including their central bank disclosures) to gain perspective on where I thought this was all going to go. I made a call in April of 2016 that we had hit the peak in the real estate cycle in BC. Anyone who spent any time on this would have come to the conclusion that the market was going to turn – whether naturally or artificially – because it was and is totally unsustainable. Point being, I worked my ass off for three years and had to stay mentally disciplined while every one of our peers went balls deep in to the real estate market. Worst example is one of Bob Rennie’s VP’s who dove head first in to a $3m home last year believing that prices would never go down. Of all people, positioned to have insight in to what might lay ahead, he should have taken pause. He didn’t. Nobody cries for people who loose money in stocks – everybody who buys stocks is generally lazy so when prices go down they have no one to blame but themselves because they knew they didn’t have the discipline to research things themselves. That’s why they hire stockbrokers, because then they have someone to point a finger at when things go sideways. The housing market in BC is akin to trading in PENNY STOCKS and the Liberals turned it all in to a casino. The NDP is doing the dirty work that the Liberals didn’t have the balls to do 10 years earlier. Little late – sure, but the alternative is letting it go Tokyo style and then we all suffer 30 years of negative equity instead of a few years of getting this shit under control. And, the cold hard truth, is that recessions are normal – they are necessary, they purge bad debt and poor decisions from the system so that it can all get more resilient over time. The colossal clusterfuck that the Liberals let happen is theirs to bear – not the NDP. The NDP are the adults in the room on this file and they are doing what’s hard but necessary – kind of like making your children to their homework.
As an aside, remember when Jeff Rubin – one of our most renowned economists called for oil to never EVER fall below $150 a barrel again? When collective delusions take hold people get hurt – believing that real estate could never turn is kind of like saying – age will never catch up with me. It’s a lie – real estate cycles run longer than the business cycle – but they do turn. This will teach us all a lesson that boomers who lived through the 80’s likely remember quite well.
All things revert to the mean. Period.
“cottages, cabins, ski lodges and recreational properties are about to be creamed.”
Dang, I seem to have misplaced my tiny violin.
Also if your strata has rental restrictions you are off the hook. 6O% of stratas have rental restrictions. So the Victoria and kelwona condos are safe
So much for living up to their promise of not diddling with peoples hard earned equity. I guess they don’t feel it has been hard earned. I recall Horgan commenting to Christy Clark in the election campaign debate about how her policies were responsible for increasing the average price of a home in GVR by $600,000. Well, if one govt can be essentially taking action to increase housing prices (by virtually no action at all to control run away prices) is anyone surprised that the opposing govt is trying to do the opposite? At least C James was “honest” in her response. This could really blow things up in a bad bad way. I feel there needs to be a reset in the price of housing in BC but I hope it doesn’t murder families at the same time. But, hey, isn’t real estate a long game???? Isn’t that what realtors always say? It will always go up in the long term.
the 20% go-home tax-GT
IMHO this sounds so much better than ‘The Chinese Dude tax”
Call me dumb or whatever you want BUT,
Why does Canada need, want or allow any foreign ownership of residential real estate and shelter?
Give my one good reason please. Thank you.
It is a proudly free society. Or used to be. – Garth
The BC’s government’s actions may appear rather extreme but we should keep in mind that it was government* that got us into this free-money mess.
This housing bubble is not market-driven, it’s the product of central banker short-term reactionary thinking and developer-friendly politicians.
The gentrification of BC was bound to end up as the political target of choice.
*Flawed (or non-existent) regulations and political pandering.
Boo-boo it sucks to own in bc.
Hmmm I thought a 40% was not going to happen?
Must of read that on drudge report☺.
So, put it all together. Scary. A forced market meltdown. A debt crisis in an untold number of households. Reduced economic activity. The expulsion of fellow Canadians. Tax, tax and more tax. And yet, if Vancouver real estate prices dropped by 50% – plunging the province into recession – 98% of the population still could not afford a detached house.
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So, Garth, what you’re saying is that the BC gouvernment didn’t do enough if 98% of the population still could not afford a detached house with these changes. If this plunges the province into recession one way or another, maybe going full monty might have been better in the short term for longer term gain by the NDP. This might be a smart move if they hit bottom now while the rest of the country continues motoring and the rest of Canada only hits a recession in a couple of years or so from now. The worst could possibly be past BC by then.
At least the BC gouvernment projects having balanced budgets going forward. That would be a plus and I can respect that if it happens.
Sometimes drastic efforts are necessary in drastic times. The current real estate climate is drastic. I do feel for the homeowners who get whacked by this but no one said life was ever fair. Especially when the writing was on the wall.
Today, many may say this was an insane decision by the NDP (I don’t though) however in a few years from now, we may all have a very different opinion. My hope is that it will be for the better for the general population.
#19 i would guess Ontario or Toronto follows BC and introduces a vacancy or speculation tax as well as a registry to track assignments of condo agreements.
#10 AGuyInVancouver on 02.22.18 at 5:10 pm
I’m confused. You’ve spent years telling us the housing market is overvalued and that locals are mainly to blame (aided by low interest rates).
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Garth gets painted as a real estate doomsayer. However, all he really says is that fools blow their brains out investing 100%+ of their net worth in 1 asset class and that is irresponsible. People get stressed and enslave themselves to debt repayment for the first 5 years until they have enough room to breathe. By then, the best parts of life have passed them by. The spouses hate each other and the kids grow up without their parents. Daddy can’t take the great career opportunity in Calgary because he can’t rent the condo in Vancouver out for enough to cover the mortgage.
All sorts of bad comes from the emotional rather than rational decision to buy a home you can afford without stretching.
Lately he has been forecasting price decreases because of changing market conditions. He never encourages governments to intentionally roast a market. That sort of market interference by the government creates tremendous uncertainty for investors. The world is uncertain enough without politicians walking in and changing the game with the flick of a pen.
Think of it from a slippery slope perspective: What’s to stop Trudeau from walking in and changing the capital gains inclusion rate to 75 or 100%? That would screw Garth and his clients (… and me as a taxable account investor). House prices were about to correct due to natural, predictable market forces. Stocks will do the same from time to time too.
When you get politicians that feel they have a moral imperative to make rash changes without forecasting the impact, you really up the risk from an investment perspective. You can model out immigration, GDP, wage and salary growth etc etc. Throw a new top-line tax in the mix and all the black at the bottom of your spreadsheet turns to red. If the risk of governments doing that to you is high, it impacts your buy-sell decision greatly from an investment perspective. Investors like predictable investments. Rational homeowners do too.
The BC NDP have increased uncertainty. They can’t project the impact of their own decision here. If they are going to remain internally consistent, then the only predictable thing that can be said about what they’ve done is that they want lower house prices in BC. If you are an investor, you have to take that to mean that even if prices do go up in the short term its just a matter of time before the BC NDP raise taxes or levy new taxes to screw you later. Why would you want to own right now in that environment? Why would you want to pay their ridiculous new taxes for the next few years, holding out hope the BC Liberals take over and return your “hard-earned” equity? Just cash out now and fine something better to do with your money than wait for the NDP to take it from you.
While most BCers support this because they think it pokes a stick in the eye of well-off foreigners, the biggest impact could be on Canadians, and the locals whose cottages, cabins, ski lodges and recreational properties are about to be creamed.-GT
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Me thinks the BC govt. is using this threat as a negotiating tool in regards to their dispute with Alberta
I voted NDP so they would do exactly what the NDP has done. If they didn’t I vote Green. This is our fight and our children’s future we are protecting. Folks without children, and those from outside BC do not have a dog in the fight and should shut up.
Any idea what the taxes collected will be spent on? Is there a positive side to the madness?
#14 Stan Brooks on 02.22.18 at 5:15 pm
I will never forget visiting a top french cuisine millionaires restaurant in Toronto with plate north of 100 $, salad north of $ 25 and bottle of decent french wine north of 100 $ and the homeless begging guy in front of it, I was the only one from the company, giving him a (rather large) bill.
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Maybe you work with a bunch of dicks?
What is your point?
#33 Rooster on 02.22.18 at 5:42 pm
For Stan’s eyes only:
https://youtu.be/ArSLNJNUEIM
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Oh, I will remember that,
now go back to paying your taxes, slave!
I’m really glad about the BC housing changes on the taxation side. We live in Vancouver with 2 almost teenagers and we want to move into a bigger house. We haven’t been able to keep up with the price inflation and haven’t wanted to take on million(s) in debt. We have a paid off house and significant savings. A 25% even 50% drop would be awesome for our housing aspirations. I wish they had also done the foreign buyer tax on Squamish/Whistler and Farming properties. So many things to like in the budget. And we can still hope that they come up with a better way of finding out payments to lawyers than the gross over-reach that the Supreme Court ruled went too far. Kudos to the Premier etc. for doing what they promised.
” the biggest impact could be on Canadians, and the locals whose cottages, cabins, ski lodges and recreational properties are about to be creamed.”
Isn’t this the issue kind of. I always talk to my parents about this, when they were my age, they had 2 kids and owned a detached house and a cottage along with 2 cars. Our current generation is lucky to be able to afford a house.
Our generation will have a lower standard of living than the boomers did, there will be some repercussions of this as politicians pander to this generation. Political risk.
Garth is worried about the people who can afford a second home for fun when so many of us through no fault of our own cannot afford a first home.
And he thinks the our Canadian society we built is profoundly free to any foreigner while it is profoundly unfree for those born and bred here whose families built the nation.
Does he know the Chinese do not allow foreign ownership?
Big fails today Gartho. Real big.
You do not have the right to own real estate, no matter what the Dippers make you believe. – Garth
#19 Natalie on 02.22.18 at 5:25 pm
Didn’t B.C. introduce the Foreign Buyer Tax and then it blew over to Ontario? Could Ontario be due for a speculator tax like this one in B.C?
????????????????/
With home sales trending down and Land Transfer Tax revenue dropping I certainly would not put it past Wynne to do exactly that if she is re-elected.
It is a proudly free society. Or used to be. – Garth
………………….
How proud are you that the average family cannot afford the average family home anymore?
I hear everyone had a home assigned to them when the reds ran Poland. They rebelled. – Garth
There really is NOT a shortage of housing supply in Vancouver:
https://www.theglobeandmail.com/real-estate/vancouver/academic-takes-on-vancouvers-housing-supply-myth/article37015584/
I highly recommend to the plebs Harbour 60. Great steaks.
Great service.
Can’t pay 3 digits for a stake alone?
So sad.
You can’t make this sh*t up – politicians who actually believe these kinds of measures are good shows their incompetence and sheer stupidity – oh well peeps elected them right Trump?
RATM
These new taxes will be a nightmare to administer. Thousands will claim exemptions for one reason or another. Arbitrations will be just that: arbitrary.
It’s the same thing that’s happened with rrsp home buyers program, 40 year mortgages, low rates, central banks buying up bonds to keep the yields low that inflated this bubble. This is the opposite end of the spectrum. Like Garth said a few days ago if you don’t like it move or else stop bitching about the taxes.
#26 Rifles on 02.22.18 at 5:39 pm
Whistler is exempt from the Speculation Tax.
“The new tax will apply to Metro Vancouver, Fraser Valley, Capital and Nanaimo Regional Districts, and Kelowna and West Kelowna
Well Garth, it appears you are taking more of a beating than even u probably expected.
It’s about time something was done to correct what the liberals did in Vancouver. I hope people get what they deserve. Leaving things as is and hoping they correct one day is not the answer. Policy will have to be brought in and someone look like the bad guy to compensate for others greed.
People have done this too themselves. Treating real estate like the stock market except paying no capital gains. Well there is a tax and fee for everything. Why should read estate be so special?
Half of these greedy people just rent out their places part time on Airbnb and get 3-4 times what they would get in monthly rent. Or the others rent out their mouldy basements for ridiculous amounts and usually for cash.
I hope it’s a huge crackdown and we get back to a somewhat normal level where people stop pretending they are millionaires.
Methinks the Queen is not amused with the little boy from the colonies antics.
In the context you present, this indeed appears to be the policy of ninnies. In the context of 0 down/ 40 year mortgages, is it as radical as you portray? Context is important.
I’m voting NDP in the Ontario elections a few months from now!!!
Wouldn’t it be a lot simpler to just force the criminals to raise interest rates by 5%
I imagine any tax assessments will be very slow to be lowered as the prices head deep south.
Got to get the tax revenue from somewhere don’t we?
WOW.
#62 Stan Brooks on 02.22.18 at 6:15 pm
I highly recommend to the plebs Harbour 60. Great steaks.
Great service.
Can’t pay 3 digits for a stake alone?
So sad.
////////////////
I don’t know why you let this guy in your house Garth.
All he does is drag shit in on the bottom of his shoe spreads it around and then leaves.
His time is coming. – Garth
If 98% of the population still could not afford a detached house after a 50% drop in price, then you’ve just confirmed what you’ve repeatedly refused to confirm.
Average families cannot afford average detached houses in most major cities. This won’t change in Vancouver no matter how many taxes are passed. – Garth
Tough titties I say. Prices weren’t coming down on the west coast as the mentality is this is nirvana. Polls can’t be counted on for a quarter point if we’re lucky. The agents on TV laugh still at the new laws. A 2×4 on the head is exactly what was needed.
What a head scratcher! Who should I feel most sorry for, those with a second ski vacation home, or working people forced to live in vans in Van-couver? Hmmmm…real poser that one.
Now let’s see the justice department do ITS work cleaning up money laundering. Go Eby! And hooray for you, Carol James. You ARE the bad ass we need and have needed for ten years
The NDP is building expectations that will be its downfall. People seem to think they will be given houses. – Garth
Freezing in the Prairies: And just think a lot of this could have been solved if the Bank of Canada had just started raising the rates earlier. Now, we have government legislation – and when it all collapses how agile and nimble will they be to remove all the added restrictions and tests and taxes.
“how agile and nimble will they be to remove the added restrictions, tests and taxes”
You first have to define the subject “they”. There are a number of political bodies: the US Fed which sets interest rates in the US, the Bank of Canada which sets interest rates in Canada, CMHC which is a federal body, the banks which are federally regulated and the Province of British Columbia. These political bodies, being independent, will act independently. BC is going to collapse and the Dippers will be thrown out of office. Four years from now along with the provincial restrictions, tests and taxes. The federal restrictions and tests on borrowing will not be thrown out because CMHC and the banks will need them to protect themselves from the collapse. The Bank of Canada will follow the US Fed as it always does. The US Fed will continue to raise interest rates.
Re: Horgan flips Notley the bird.
We spend a lot of Rec. time in Osoyoos during the summer.
Every second vehicle (or 90% of the trucks costing over 80K) are from Wild Rose country. Osoyoos lives or dies on the tourist $ and already got wacked pretty hard when the patch slowed down.
If this 2% tax sticks, that town is screwed.
Hey…there’s too many idiots on the lake during summer anyhow. Who knows, this may just create an opportunity to acquire some modest priced property for retirement.
When life gives you lemons (NDP) make lemonade (with vodka of course)
Garth, doesn’t the market (especially condo) need more units listed right now for it to be in a good state? The lack of listings seems to be quite unhealthy which the NDP is attempting to address (even if market forces were going to eventually do its thing).
Lately this is only way I can take comment section and balkonization of Kanada as of some time ago.
https://imgur.com/a/IVwFW
Out of those 3 I would recommend one in the middle, (ardberg 10), on a nose reminds me of two things burned 5hp 480v el motor with winding insulation melted to oblivion, and infirmary where my mother worked when I was kid. Very complex but excellent single malt. Other two are good, but not Ardberg10 good.
It is a proudly free society. Or used to be. – Garth
====================================
Hmmm. Seems unassailable. Who doesn’t like proud and free?
Except, it doesn’t account for the fact that the “free and proud” societies (whatever that means) are competing in a global economy with ones not quite so free (but definitely just as proud).
Seems a fair point to consider when waxing rhetorical?
I’m all for freedom, but alas it IS difficult to compete with slavery. As someone who worked in the ME for incredibly profitable slave-drivers and watched how they grew to global dominance on the backs of their cheap labour force, I do know of whence I speak…
I bet Calgary is starting to look pretty damn good now!
#28 vanreal on 02.22.18 at 5:38 pm
The NDP is a very dangerous political party. They destroy economies in one fell swoop. The did it in BC in the 1990s and they are on track to once again destroy it. When will they learn that government intervention only leads to heartache. You’re right Garth by saying that the private sector is going to stop building houses. The supply will become even worse and nothing will be solved but in the meantime the economy will go in the crapper. Nicely done you NDP morons.
——————————————————-
sure they (NDP) had their BS
(glenn clark as premiere: what a goof he was, and SOOO hated, to boot with his smug arrogance). but let’s not think the greasy BC libs, esp in their last 5 yrs, how they didn’t blow the province apart between haves and havenots…if not for many excellent reporters embarrassing them (thanks to the great exposes and stories by Kathy Tomlinson, Kerry Gold, Sam Cooper, Andy Yan, etc) then the bc libs would have been even more corrupt.
have a read column today by Globe and Mail’s Gary Mason
”BC NDP ignore elites and tables budgets for those who need help”
https://www.theglobeandmail.com/opinion/bc-ndp-ignores-elites-and-tables-budget-for-those-who-need-help/article38061351/
even the new bc lib leader wilkinson agrees they messed up and ‘missed the boat’…won’t be so easy for those greasy bc libs to come after the NDP.
lastly: read the comments after any financial analysis reporting (even financial post today as i’d read, or was it last night?)
seems MANY are happy the NDP are bringing in some harsh and long overdue medicine.
It is a proudly free society. Or used to be. – Garth
………………….
How proud are you that the average family cannot afford the average family home anymore?
I hear everyone had a home assigned to them when the reds ran Poland. They rebelled. – Garth
………………………..
…..and today the Poles are proud and free. I hear the average family can afford the average family home.
You should be applauding the ndp. Now your predictions will come true. Otherwise just a massive fail. Something needed to be done. Stop using housing as a commodity. If the rich want to make money grow some balls and invest in the stock market. Otherwise stop buying more properties with your helocs and screwing over the new upcoming hard working folk.
“Whistler is exempt from the Speculation Tax.
“The new tax will apply to Metro Vancouver, Fraser Valley, Capital and Nanaimo Regional Districts, and Kelowna and West Kelowna”
————————————
That’s what I get for only skimming Garth’s blog before posting. OK then Kelowna, is now on the watch list.
Boo hoo…how dare they try and make housing more affordable for the local working population! Many people have seen the value of their house triple over the last 15 years, so bring on the 30% haircut. Housing should be nothing more than an investment, right Garth?
“One day after BC’s tax-tax budget, with reflection, thought and a few single-malts”
Enjoy a nice Islay whiskey myself.
The NDP is building expectations that will be its downfall. People seem to think they will be given houses. – Garth
*******************
I would love to see the article where anyone said they would be given houses. As for people thinking they’d be given houses? I’m not a psychic, so can’t comment.
…..To its credit the BC realtors’ association had a stark response: “I can’t imagine a government telling homebuyers who bought a home in the last year that we are purposefully trying to put you under water.” And under the waves could cover a shocking number of people.
If prices in Van drop just 25%, which suddenly seems like a no-brainer possibility, a stunning one quarter of all households with mortgages go into negative equity. That means their mortgages are greater in size than their property is actually worth. Yikes. And not only would they have a monster debt and have shed their savings/downpayment, but mortgage rates are guaranteed to increase this year and next, completely diddling the family balance sheet.
_______________________________________________________
Have a hard time finding sympathy. If you’ve overpaid for an asset – basically everyone in YVR or Lower Mainland who’ve purchased in the last couple years – and are in debt up to the nostrils, who’s fault is that? Why it’s your own of course. I mean really, what kind of dummy finances a single asset with a price tag of 10 or 20 times annual salary – even with low interest???
Comrade Horgan (LOL – I love it!) and his droogs are bringing RE down. It needed to happen. There will be casualties for sure.
#22 I’m Stupid
“Income tax should be family based once married. It’s not fair that 2 households with the same income can be taxed completely different based on the income difference between spouses.”
You have to think about how people react to proposed rule changes like yours. First, your proposal will just result in people not getting married because the tax implications are just too burdensome. In fact for many people already married it would save money in year 1 to pay a divorce lawyer and divorce. For those that for some reason won’t divorce the economics of having a second income might be significantly impacted that it no longer makes sense for them to work. What your proposal would do is essentially push most second incomes 100% into the top tax bracket. For people making $50,000 a year and paying $2,000 a month for child care that just might not make sense.
Married or not, people are individuals and must be treated as such. And a marriage is a contract between 2 individuals, not the state.
DELETED
You’ve said many times that the Governments have artificially caused the housing bubble by basically offering money for free. Now one Government has the audacity to try and fix it & now you’re more pissed than ever.
How would you do it?- other than, what you suggested yesterday – leave your birthplace and move to – Timbuktu
I give the NDP a ‘10’ for brainwashing. – Garth
Just buy a house in Hamilton. Prices are pretty much right back up to April levels. Garth already told you.. Move or shut up. Since rent rates have gone up so much my tenants wouldn’t dare think of moving. Unfortunately I think in about 5 more years it’ll be time to cash out and live off a balanced portfolio. It’ll still have a primary residence though. I wouldn’t let someone else dictate where I live.
Hope that all of the anti-pipeline ijuts in the LMD see their house prices cut in half. ‘Cause that is what they want, isn’t it? Affordable housing for all.
They don’t actually think their old houses on postage-sized lots in that soggy city are really worth over a mill, do they? Take out the flippers, drug money launderers, super cheap money, and the many Chinese trying to get their money out of the home country, and we’ll see what’s left.
Or did they just vote in the dippers for free daycare, free university, no bridge tolls and other (promised) socialist goodies?
Should be an amusing ride down to watch, even in Kelowna (non-socialist land) where half the town is owned by Albertans as vacation properties.
I wonder how Starbucks girl is feeling right about now..
I am highly supportive of these new NDP policies, and the next step to help curb corruption will hopefully be taken once the Eby-German report on money laundering in the housing market through casinos is due. I am expecting that this report will be an eye-opener for the average BC citizen who has been dutifully paying their taxes and playing by all the rules, only to see they are getting farther and farther behind in this province.
https://globalnews.ca/news/4031720/money-laundering-bc-real-estate-david-eby/
With the closing of all of these loopholes and scams that launder ill-gotten cash and that hide the true offshore ownership of so many properties, perhaps it will finally be revealed publicly how the liberal gov’t hid the essence of what was really going on for a decade.
In my view politicians in this province should have the local people as priority number one (not offshore people, not developers flipping pre-sales in HK and Shanghai), and have the foresight to think long-term about the viability and affordability of this city for the little people paying their taxes and contributing to their communities. The measures taken this week is a refreshing start in this direction.
I don’t know why you let this guy in your house Garth.
All he does is drag shit in on the bottom of his shoe spreads it around and then leaves.
………
Stan Brooks is a miserable dude. At least he has found a forum that lets him post. I think it gives him joy……………..no? Stan? :)
In BC, many seem to be cheerleading the NDP 2018 budget. I don’t see a lot of local negative comments.
Moi? I think I will let the dust settle…as irrational exhuberance bereft of sober second thought is historically is baaaad thing.
If the current RE bubble took say 10 years to build, it appears the NDP aim to implode it in the next few months. It seems their net was cast far and wide.
Left- of – Center parties tend to use ideological hammer/s to conquer their opposition, or “snake oil ” a cure as opposed to something more objective and quasi-surgical.
Of all the analyses I’ve read, I think Garth’s is THE best
(this comment is 100% suck -up free).
As Garth alluded to earlier and I will expand on, potential purchasers will need lawyers and accountants in addition to realtors and bankers . That creates dreaded UNcertainty, a real market killer.
Yeah Garth. God forbid the government should try to crack down on the blatant fraud and money laundering that has been uncovered in Vancouver.
According to you apparently we should just let drug money funnel into our real estate market and distort it. Better to sit there and do nothing rather that trying to intervene right?
The spec tax will be interesting. Perhaps it will be dialed back. But if the price of a sane housing market is a reduction in empty Vacation properties then so be it. As for supply, you have no idea what is going on here and have just swallowed the propaganda of the development industry hook line and sinker. Construction is flat out. We can literally not build any faster. A big problem is that units are being snapped up for speculative purposes instead of going to people to live in. That is not ok. And the government is starting to address it.
Here is an interesting fact. With 300,000 people moving to canada this year, we need to produce 34 homes/apartments each and every hour. This need to be continuous production 24 hours a day 7 days a week.
This is assuming boomers don’t die off faster than babies are born.
Last year 278,000 Canadians died. Immigration was 280,000. – Garth
Canadians never voted ‘in’ an NDP BC government, an NDP Alberta government, nor a Liberal Federal government.
They only voted ‘out’ the previously, arrogant, corrupt, over-lobbied, self-serving, morally bankrupt, ideologically-blinded and undemocratic government before them. Rinse and repeat, it’s the Canadian way.
Unless, of course, you live in Ontario, where the virtual certainty of any subsequent government repeatedly self-combusts in a predictable and spectacular fireball shortly before any provincial election.
“If prices in Van drop just 25%, which suddenly seems like a no-brainer possibility”
Since there has been no modelling, this prediction is also speculation. But I’d be happy if it happened in Burnaby, since my wife would like to buy a house.
BC types better hope Arizona and Florida dont follow suit. As a Canadian who moved to the US about 40 years ago, I am sorry to see how provincial governments seem to be at each others throats. Your observation on how BC has initiated the balkanization of Canada is regrettably appropriate.
#67 Freewestcoast
Yup.
But in the mood the NDP seem to be, they will probably demand that you provide the name of your landlord and their address so you can get their other promise:
the $400 rental rebate.
Now THAT will send the cockroaches scrambling for the nearest crack in the wall or they will just have to decrease rent by that amount and break the law, which, they are already doing by not declaring rental income.
For the laid back people they act as in YVR, they’re also pretty greedy when it comes to any proceeds having to do with RE.
I wonder if Hgwy 93 out to Invemere will get a little quieter on the long weekends…that entire town is dependent on Calgary showing up on the weekends..can’t wait to tell my buddy this weekend that BC wants about $12k in tax from him! This should get interesting.
“With 300,000 people moving to canada this year, we need to produce 34 homes/apartments each and every hour. This need to be continuous production 24 hours a day 7 days a week.”
Garth separately addressed you, but I might add that family size tends to be over 2 for newcomers. So your numbers need to at least be chopped in half.
Having said that, producing 300k new housing units per year isn’t a big deal for the Canadian RE industry, so even if your math wasn’t flawed, it still would not represent a meaningful problem. Replacement/refurbishment of depreciated/depleted housing units represents more of a demand on the RE industry than new construction.
How would you do it?- other than, what you suggested yesterday – leave your birthplace and move to – Timbuktu
I give the NDP a ‘10’ for brainwashing. – Garth
—
Sorry Garth, but that’s a total cop out. The massive run up in house prices, unsupported by fundamentals, is a social ill. What you do (or have done) to fix it?
Not my job. I just come here for the dogs. – Garth
Ha. The NDP budget…at least they remembered to do a find and replace to swap the term Kulak out for Speculator before sending their budget off to print.
This province just keeps getting more interesting by the day. I’ll hang around to watch the events unfold, but one ought to be mindful, as it may even become hazardous to Vulch in this place. Anything is possible with this gang.
Time to play the arbitrage between the outgoing NDP in Alberta and the incoming train wreck in BC.
Oh boy Garth, looks like you’re getting spanked tonight by some happy Dipperettes and dudes. BTW, the safe word is “NDP.” ;)
Garth, far be it from me to question your interpretation but this can’t be true! If so, it is the worst piece of legislation that any government has ever come up with! Worse than “carbon taxes”!
I live in Calgary so I obviously know a number of people who own weekend cottages anywhere from the Alberta border to the Okanogan. Fernie and Radium are very popular places for cottages as well as every single lake between and around. These areas are not experiencing a housing shortage and the building of the cottages and condos is an important component of the local economy. I have a friend out there who makes his living building log cabins for people mostly from Alberta. He’s going to be crushed. He typically employees 2 – 3 laborers as well, and I suspect they won’t be working anymore either.
I have a friend who has a cabin, well house, in Invermere which is probably was I should say worth about $600,000 and I can assure you he’s flipped! Where is he going to get $1,000 a month in after tax income? Who is he going to sell it to? The whole community he’s in was built specifically for weekenders, the town itself has no need of the properties for locals. In fact much of the local economy depends on building these units in the bare mountains and then maintaining the lawns and cleaning the house, as well as all the money the weekenders spend on food, beer, and gas while they are there. He’ll have to sell if he can, and once he does or should I say if he does I doubt he’ll continue to visit and spend money as often.
This has to be a mistake because it’s so stupid.
I am so glad I bought an trailer for $32,000 rather than a property in BC. I know the trailer will be worth approximately $0 when I am done with it, but I consider that to be a small price to pay for the 20 years of service compared to what people who bought condos on the hill in Fernie are about to experience, plus I had quite a bit more freedom when it came to destination. When you own a cottage or a condo you really only have 1 vacation destination. My trailer has been everywhere from Dinosaur Provincial Park to the Columbia ice fields to the Shuswap to Kukanusa and back and all points in between plus other points that were too remote to mention, and they can’t get me with this tax.
The reason I bought a trailer, besides the increased optionality over having a cabin, was because I found the already discriminatory property taxes in BC offensive. In some if not many areas of BC that are highly populated by weekenders, they already have a two-tier property tax system where the permanent residents pay about 10% as much property tax as the weekenders. So far it has sort of all been justified by arguing that the weekenders we driving the infrastructure requirements and the permanent residents deserved some sort of bonus for I don’t know, running the shops I guess. Anyway those taxes were a reduction for full time residents more than say an increase on weekenders compared to what they paid in Calgary for similarly appraised real estate. However, this 2% extra charge on top, is, IMHO, going to be just a bridge too far. Back to said $600,000 used to be worth cottage, taxes are going from $3,000 a year to $15,000 a year. That will be a deal breaker. If what Garth says is correct. I can’t believe it though. Nobody could be that stupid.
I am dumbfounded. I am having an existential crises because I can’t believe Garth is so wrong about something when I’ve followed him for years, probably since the beginning, and his advice and insights has always been so sound and helpful. Yet he can’t possibly be right about this unless I consider the idea that politicians in BC are so stupid they would intentionally destroy the economy of at least 1/3 the land mass of the province. It just doesn’t make sense.
This blog never seems to amaze me. Locals who have not bought before the boom have been almost run out of the province by speculators, foreign or otherwise. There is no housing shortage, and less building will be normal. The building binge here is epic, with people who have no business owning more then one house are trying to double their pleasure by signing papers for a second helping.
So what if their gamble blows up, who honestly gives a flying f? So what if your second house becomes a pain in your ass, go somewhere else, take the outsized gains and buy in Alberta for example, or Northern Ontario.
I love the discouraging tone of even if it drops by half 98% could still not afford a house. What kind of reasoning is that? If locals can’t buy, whose market is this then? Let it drop by 75% then. Speculators and established people had the run of the field for over a decade, they can make alternate arrangements like the poor slobs who live pay check to pay check for the privilege of attaining shelter.
Not everyone is crying in their beer for those about to flop. Market giveth, and taketh. From zero to hero and back. Enjoy the ride folks, lots of silliness has to go away so we can get back to affordability and reasonable (not cheap) housing.
The reason the NDP get elected is so that we realize why we should not elect the NDP! I am buying lots of popcorn for this one, it will be epic.
Now the NDPs move is criticized ?
Were we not criticizing banks and govs, and speculators, and foreigners for bidding up prices and hurting the locals who want to live here?
I think the NDP moves are reasonable and even a little weak, however lets see what happens.
Anyone who rails against these moves is clearly a winner in the property market. Those who lost are those who have been swindled by policy.
I sincerely hope for a major decline in real estate prices so I can keep my family together in the same city.
I spent $250,000 for each of 7 children to raise them to age 18. I don’t want them spread all over North America so they can buy a home and get a better paying job. So far none of them have a home.
I am bitter.
#5
Would you prefer a clown PM?
I think this is great news. At least real estate will become more affordable to the millenials.
And those who bought, they should not have bought in a bubble.
Too bad, so sad.
Zero sympathy for anyone… as with any investment, it comes with risks… which include political risks
#77 45north
the Dippers will be thrown out of office.
————————–
I don’t think so. The voters seem to be happy with the budget. They did what they promised during the election campaign. It is an anti-establishment movement that suits the times.
I recently read an article that said Trump benefits politically from his obnoxious tweets because it appeals to his voter support base that wants to give the finger to the establishment.
all you disenfranchised cry babies should curse your sheeple parents’ asses – they watched television as the jobs all went to Mechindia
Last year 278,000 Canadians died. Immigration was 280,000. – Garth
…………………..
An Introduction to the Study of Population. On the average day, about 1070 babies are born in Canada, and 575 people die.
Babies don’t own houses. Most people dying do. – Garth
Meanwhile #justin is in India dressing up in costume and inviting people who have been convicted of attempted murder to dinner. Lots of brains there and by lots I mean none.
Anyone who bought within the last couple years is acceptable collateral damage. This market needs to be fixed, badly.
Hey Garth, I don’t agree with you all the time but it’s sure amazing how dumb some of the people that comment on your blog. Someof them are so envy that they didn’t buy a house or there priced out in Vancouver. I live in the okanagan moved here from van 2 years ago to Get out of the rat race. I couldn’t afford van. People if you can’t afford to buy a house or rent in the lower mainland MOVE!!! Visit mommy and daddy on weekends!
And if u think your entitled to a house in van go get 3 jobs then and don’t be so @&$? Lazy! Head north where housing is cheaper! Friends can come visit!! Garth how do you put up with all these entitled brats?
#40 Caleb Landry – <> I echo your sentiment.
Financial genius bankers 2008 f*ck up meets political genius 2018 f**ck up for maximum impact of a decade long unintended consequences of genius financial/social engineering.
The west did it to the Chinese in the 1800’s, so now it seems to be payback time!
https://jonrappoport.wordpress.com/2017/10/24/the-current-killer-opioid-epidemic-and-the-great-19th-century-opium-wars-against-china/
Well someone with access to the Mls told me what a house on Somerville st just went for and I thought about another house a couple of doors down that sold a while ago to help show what was already happening before any of the latest measures were in place.
5009 Somerville st was and old dilapidated house that was purchased in 2016 for 1.4m
It was an act of exuberance that encapsulated that time in the city,I said at the time they overpaid by at least 200k.
That house has since been demolished and a new one is getting built as this was the only way not to have taken such a high percentage hit relative to price point.
An attempt to sell it as is but failed.
A couple of doors down equally ancient but fully renovated house at 4961 Somerville just sold after listing for roughly the same number they had to settle for 1.21.
So my main point is the person that just bought 4961 got that one for 200k or 13.5% less and is fully renovated.
This sort of stuff has been happening in my neighborhood for the last year or so without much fanfare and this is at the bottom rungs of the Vancouver proper ladder.
With the NDP’s policies it will be an easy out for speculators to say that they were denied an exit from the market without taking a hit.
I say bull.
I have plenty of cases that have been on the market since late 2016/ early 2017 waiting to fleece someone not paying attention.
If capital preservation was your number one goal after getting caught in the cookie jar then you’ve had enough time…
M43BC
Asking
2017-05-24 : $1,399,000
2017-06-28 : $1,379,000
2017-12-04 : $1,298,000
Just sold for 1.21
…
https://www.zolo.ca/vancouver-real-estate/4961-somerville-street
$$$$$$$$$$$$$$$$$$$$$$$$$$$$
Feel free to make a donation.
Flop For Fox Fund…
http://www.terryfox.org/get-involved/ways-to-give/
SCM never bothered me one bit?
Whats all the fuss?
I got much more riled up when the realtors were on the blog trying to pump up property prices.
Hi, Garth. Thank you for continuing your blog. I’m still lurking.
—
The parade of human stupidity cheers it’s own demise. No wonder Justin won.
GTA guess: about a 30-40% drop.
Van: I don’t care. I covered my @ss.
Canada: The continuing theme of self-inflicted woe.
The next natural step in communist utopia. Confiscate and restrict capital outflow, restrict travel out side of the dog house.
Dolce Vita: that $400 rental rebate..stupid for sure…base it on income…and really what’s $400..zilch in the bigger pic.
Garth i don’t think many honestly feel that he NDP’s policies will bring prices down to finally allow them get into the BC RE market…i think it’s just that we (middle class) finally feel listened to (at least for now) what with all the rot and corruption that has been allowed to pervade this province for so long and by so many arrogant, smug and self serving (municipal, prov and fed) politicians …just also look at the anger towards the govt and cra over not cracking down on overseas trusts/banks/havens for the very rich…i think people are just fed up with stupid, selfish, self serving politicians.
Well, you will reap the consequences. – Garth
“So, put it all together. Scary. A forced market meltdown. A debt crisis in an untold number of households. Reduced economic activity. The expulsion of fellow Canadians. Tax, tax and more tax.”
It’s over in this country Garth. I’ve been retired for years and I’m only in my 50’s. My wife will be exiting the workforce in just 2 more years. It’s not worth working to make more in Canada because you really don’t. The workplaces here are over regulated, micro-managed, toxic and too fast paced. Who needs all that crap and stress. My best advice if you live in Canada, if you can, is to get out of debt fast and leave the workforce as soon as you can and just start collecting your pensions as quickly as possible. Canada is declining socially, culturally, and economically very quickly now. The next step on our radar is the possibility of leaving this country. Canada and Canadians today are too highly indebted, overworked, stressed out, unfriendly, selfish, entitled, unmotivated and anti-social. The grass is not greener here anymore.
#109 Gurpal Samjit
Meanwhile #justin is in India dressing up in costume and inviting people who have been convicted of attempted murder to dinner.
—————————-
At least he didn’t give them ten million dollars. Or did he?
Garth the housing bubble has ruined lives. My cousin moved to Vancouver for a job. He is an IT guy and even though the housing market went up, he still owed more then the house was worth. He even had to borrow the fake equity just to survive . He ended up going bankrupt and found another IT job in Europe. He is Canadian born and is so sour from what happened that until housing prices crash, they will NEVER come back to Canada. He hates SHYSTERS more then I do. The housing bubble has created a fake economy where useless idiots sell RE and think they create value. Canada has the potential to be a real economic powerhouse. Canada could become like a Germany. Instead we give away our resources for pennies and sell RE to each other while the SHYSTER cheer!
Garth, respectfully, I think it’s time to consider that maybe, just maybe, you are wrong on foreign ownership. I don’t know why or how you don’t see it- but people have been bleating on this blog for YEARS about this. First we didn’t have the monitoring. Then we didn’t have clear enough data. Then the supposed data came and it was garbage. The glaring hole is that corporations in Canada are shady AF. Scant details are known about who owns these corporations. So all the homes bought up by corporations- taking what could be entry level shitty beat up homes off the market- hovering and entire segment of desirable entry level, foot on the ladder properties away- that’s a problem. For every Canadian. No foreign ownership. The world is not a monopoly board. No more.
You are fighting the wrong battle. – Garth
And at the same time people in Vancouver have been warned for YEARS that it’s foolish to pile on debt, but most of them didn’t listen.
A year ago my sister-in-law was rubbing her newfound equity in my face.
My response to her now is “easy come, easy go.”
No sympathy here. Something needed to be done.
B.C.– Ungrateful, larcenous, morally bankrupt. That is the unfortunate conclusion drawn by many Albertans long before this recent tax was hatched by the half baked incompetent NDP government. VENGANZA! Spanish for revenge! And perfect timing on the part of the NDP who fail to realize that Albertans will vote with their feet. Since home prices have bloated in the BC interior due to significant buyer interest from those fleeing the high prices of the lower mainland it may well just be perfect timing for Albertans to cash out of their second homes and vacation properties anyway. Constant forest fires, rattlesnakes, poor drinking water, bleak winter skies and air quality alerts (haven’t even mentioned the local population of Hell’s Angels and others who seem to have married their first cousin). Revenge is a dish best served cold, and those who think they can prey on the generosity of their neighbours will get a plate full and fresh out of the freezer. Oh…and about the wine boycott…not exactly a hardship given the number of quality products available in Alberta due to privatization of sales, and even if any trade tribunal strikes down the current stance or it is withdrawn it won’t stop Albertans from mobilizing their own personal boycott. VENGANZA!
So Garth, here is an article someone sent me to “prove” that the new BC tax will not apply to Albertan weekenders:
http://www.rew.ca/news/ndp-plans-2-yearly-tax-for-non-resident-home-owners-1.13633285
Please refute.
The article is a year old and the finance minister yesterday confirmed all Canadians with rec or second homes in B.C. that are not rented out full-time will be taxed. – Garth
#131 chopstix
i think people are just fed up with stupid, selfish, self serving politicians.
————————————————————-
This is why a federal NDP government is possible in the next election. As another poster mentioned, people don’t vote in governments, they vote out governments.
Math is fun, the NDP crashes houses by 50% hypothetically so everyone can afford to buy, but with that much equity out of the housing markets from declining Helocs who will have the money to buy a house? Not the vast legion of now unemployed trades and all the spinoff jobs they created, everybody will not touch housing because that is what caused everyone to get financially destroyed.
The only group of people that will be to buy a house ( at a 40% discount 1,000,000-50%=$500,000+20% Frigging Bogeyman Tax=$600,000), will be the same people they are trying to prevent from doing so now. They can afford a Van special and with the left over cash head out to the valley and pick up a couple of distressed houses dirt cheap.
Bullet meet foot!
#112 -=jwk=- on 02.20.18 at 7:46 pm
The macho idea that if you can’t “make it” in Toronto you somehow ‘lost’ is ridiculous. It’s not you, it IS the city. Maybe in 50 years Toronto will be a true world class city.Right now it’s an awkward teenager growing in weird places and unsure of what to do with itself at the party.
My wife and I are big city folks. Shanghai. Los Angeles. Kuala Lumpur. Manhattan. Then, the transfer to Toronto in 2010. Fine big city, right? well, sort of. But not really. Appaling rental stock, and overpriced back then. So we bought a 2bed co-op and started saving. After a couple of years we realized this was useless, and the city was a pain in the ass to live in to boot. I remember flying back to NYC for interviews, staying at a friends in Jersey city. I commuted in with him, he was at the Amex building across from WTC in 34 minutes. I was at 44 Wall 10 minutes later. They paid $339 for 3/2 SFH.
Called home after the interview. Didn’t get/want the gig really and we had to leave Toronto… Where in 2015 could you buy a 3/2 SFH a 30 or 40 minute no transfer commute to King and Bay?
Something is wrong here, folks.
well their house has SOARED in value, this isn’t it but same area of JC (bergen-lafayette) and about same size…now selling for 350k SFH:
https://www.realtor.com/realestateandhomes-detail/594-Ocean-Ave_Jersey-City_NJ_07305_M50527-69314#photo13
We wound in Ottawa of all places, but bought too big of a house because it seemed so cheap compared to the big smoke. Be careful to buy what you need Matt, not what you can ‘afford’ by crazy toronto standards.
——
Took a look at the link. Nice house at first glance except for the fact that all 1st floor windows have bars over them. What kind of neighbourhood requires that?
—
Anywhere in NYC where that is the law. And since many shoppers in JC are from or work in NYC, they expect them to be there. Like that 20M brownstone on the upper west side? Gonna come with the kid protectors on all windows except one on the ground floor – just like this house. Our last place in manhattna didnt have them, they had the inner bars that prevent the window from opening more than 4″. Annoying. Rather have the bars.
So, going to post a link to a 350k SFH within 40m minutes of Bay and King? Without or without NYC kiddie bars? I’ll wait….
I agree with post #10 ( aguyinvancouver )
This will bring housing to affordable levels and is basically everything Garth has been saying should happen but now he’s mad the NDP are doing it?
Yes it would be nice for it to happen natural the. Nobody could point the finger at the person who caused it. But creating affordability for locals sounds like a good idea, I’m glad I don’t own two properties in bc
Births in Canada the last 5 years babies don’t buy houses but as the chain moves along their parents do.
For every person that dies in a year a lot of kids reach the nesting stage.
2012/2013 381,607
2013/2014 381,888
2014/2015 384,376
2015/2016 387,516
2016/2017 389,912
#103 Sydneysider
But I’d be happy if it happened in Burnaby, since my wife would like to buy a house.
———————————–
Have you no sympathy for the poor schlub who’d be losing 25% on what might be his only asset?
Geez Garth why are you so angry at the BC government. Vancouver real estate has been out of control for decades and the last few years are just ridiculous just like in Toronto. Are we to sympathize with people who bought in the last 2 years..in my opinion these people deserve to lose their shirt..anyone dumb enough to pay those prices should accept the strong possibility that they will end up losing money.
I think government should have acted far sooner before the speculation got totally stupid..the PC government should have never have allowed 30-40 year mortgages..should have never lowered the minimum downpayment back in 2006..the central banks should have kept interest rates higher and governmnets should have put the speculation taxes in place way earlier. But at some point the government needs to prick the bubble and better late than never.
Yes people will lose a lot of money and the ecoomy will weaken but the economy in BC and Toronto and much of Canada is based on a fantasy..the fantasy that real estate is actually worth the current prices.
Anyone who can afford two houses as well doesnt illicit much sympathy from me..so be it if they lose their shirt.
#132 Terry.
My best advice if you live in Canada, if you can, is to get out of debt fast and leave the workforce as soon as you can and just start collecting your pensions as quickly as possible.
——————————————————————
I totally agree. That’s what I did. I’m glad I did it. This is what a socialist system encourages.
132 Democracy Is Mob Rule on 02.22.18 at 8:01 pm
#109 Gurpal Samjit
Meanwhile #justin is in India dressing up in costume and inviting people who have been convicted of attempted murder to dinner.
—————————-
At least he didn’t give them ten million dollars. Or did he?
—-
Attempted murder does not qualify for taxpayer jackpot.
At this point there can be no debate that the socialists in charge of the ‘People’s Republic of British Columbia’ have spoken up and removed all doubt.
#116 A123 on 02.22.18 at 7:37 pm
I think this is great news. At least real estate will become more affordable to the millenials.
And those who bought, they should not have bought in a bubble.
Too bad, so sad.
—————————————————————–The biggest issue is that the powers that be created the bubble and know people may get crushed when they bust it.
You should be sad, these will be your friends and co-workers that will be hurt.
Relax everybody.
All this stuff is just another non-event.
Just like B20 and all other previous changes.
There will be no material price drop.
That housing ship is sailed.
#73 Penny Henny on 02.22.18 at 6:37 pm
#62 Stan Brooks on 02.22.18 at 6:15 pm
I highly recommend to the plebs Harbour 60. Great steaks.
Great service.
Can’t pay 3 digits for a stake alone?
So sad.
////////////////
I don’t know why you let this guy in your house Garth.
All he does is drag shit in on the bottom of his shoe spreads it around and then leaves.
His time is coming. – Garth
===================================
???
I’ll take 100 Stan Brooks over one Henny Penny.
Kinda amusing the latter complaining about the former when HP is a sh$t-stirrer par none.
Sounds like It’s about to become a great time to move to BC. Now if only there were jobs there….
So what you are saying is the housing market in YVR that was built on a house of cards, from people who are not millionaires or richer than they think, when you remove their properties from their net worth, could fall at any minute because a measly 2% a year could cause speculators to bail on the area.
Cool.
The realtors and media made it sound like BC real estate was going up at least 10% a year, wouldn’t that mean the people are still earning at least 8% before taxes every year on their properties?
Wouldn’t your ‘Move. Or Shut up’ movement have the same effect on prices? Or higher interest rates? Or B-20? Or should we let the markets be the markets and have a 2008 US-style housing crash?
Any government intervention that leads to people not buying in YVR would devastate the area, and leaving the area unchanged would devastate the area. The high cost of living was probably preventing new businesses from setting up their headquarters/companies and in-demand employees from moving across Canada to buy homes and raise a family.
Sounds more like a Catch 22 instead of a policy that is the new BC government’s fault.
This may get ugly for a few years. NDP are idiots. A gentle unwind was necessary. This was excessive.
Have a couple of friends (I have more than that, I swear!) who purchased a second SFH as an “investment” over the last 2 years. One purchased a SFH recently, to rent out. Highly leveraged in a suburb South of Vancouver, piece of crap for 1.4M+.
Friend’s rental house is negative cash flow to begin with- and now horizon for this investment may be 10 years+ as opposed to the 2-3 window they initially thought.
These friends-well intentioned, good people, are worried.
I got out of a small, dark, strata property and transferred equity into a SFH. Mortgage reasonable-one of us can work part time. Put away cash for savings and university.
Yeah Garth I’m a house horny millennial, but my ace-in-the-hole was a property I held onto for years. Plus steady jobs with guaranteed pension plans.
AND-no family doesn’t want to move to sh**hole cities-like Regina or Saskatoon or Winnipeg. (I hear they are balmy in the winter!) where jobs are less plentiful, but housing is cheaper.
For us, it was a trade-off; family, friends and good-paying jobs here in the YVR AND yes, a mortgage until we are 60. The most beautiful city and region in Canada. Yes, I hear Fredericton is lovely. AND if we need support from family and friends- its here.
The alternative we considered was-a job somewhere new (who knows whether we would like the change), depriving my kids of their grandparents and cousins-but a cheap house!!!!
Good luck everyone with that NDP government you elected!
Lisa Power on 02.22.18 at 5:17 pm
After having lived in whistler for two years and tried to buy into the market – it is impossible for Canadians to compete with people coming in from Hong Kong (where there is zero income tax) and laying out 3 Million plus for a house.
====================
The idea that people from Hong Kong are rich because they don’t pay tax is a little off.
It may still be true that Hong Konger’s pay little income tax but when I was there in the 80’s they were paying lots of other tax in the form of import duties etc. I seem to remember the tax on an imported vehicle was about as much as the landed cost of the car itself.
As a tax man at the time I thought this made a lot of sense. Trying to corral and tax income, even in law abiding Canada, is an inefficient process. Transaction taxes are easy. The rich pay more when they buy more. What’s not to like?
If it were my call I would scrap income taxes, go with GST and give poorer people a sliding scale refund to balance out the regressive aspect of transaction taxes.
Stan Brooks. All he does is drag shit in on the bottom of his shoe spreads it around and then leaves.
===================================
I’ll take 100 Stan Brooks over one Henny Penny.
Kinda amusing the latter complaining about the former when HP is a sh$t-stirrer par none.
—-
How about that -Garth guy?
He seems to get on the nerves probably the most. :)
#150 – That may be what you wish but as Garth has said and a couple of others that the results of B20 will not show for at least 6 months, also the newer policies to bring down the market will take a bit longer to show the effect, but will happen no doubt.
Garth on #138
“The article is a year old and the finance minister yesterday confirmed all Canadians with rec or second homes in B.C. that are not rented out full-time will be taxed. – Garth”
Thank you. I will appropriately warn my friends.
Albertan’s with BC property better get rolling…
The talk all over Kelowna right now is about Alberta hitting the exits…slow jog turning into a sprint as understanding on these new rules kicks in… I know about the talk because I am in Kelowna right now and TheSecretCode has all the inside connections BC wide.
Why do you think I am in overdrive on my idea of selling the Kelowna SFD investment for buying a Calgary SFD?
Never has Calgary looked so good, where you can offload a Kelowna SFD for about 725k right now (not the 790k I was expecting) and get the equivalent SFD in Calgary for 490K………right now!!!!!!!
Execution on this is going to be the hard part. Sign is up and returning to Vancouver in the next few days…
As a reminder, my SFD in metro-van did not appreciate this year from last year – stayed flat on market forces alone…buckle up.
Interest rates going up again next month should help.
#154 – They only have themselves to blame for being naive enough to believe realtor spin. Regardless of what stage the housing market is at some win some loose.. That’s life.
#101 Bob Dog on 02.22.18 at 7:14 pm
Last year 278,000 Canadians died. Immigration was 280,000. – Garth
——-
Interesting fact!
Don’t tell that to people in Ontario, realtors and speculators were banking on the large immigration myth to keep the housing market going.
Why is everyone on such a big government kick of late? Are people really so incapable of managing their own lives that they think giving all of their money to government will fix that? I’ve always understood that more government is not the solution, it’s the problem. I guess BC didn’t think they were taxed enough, all of Canadians actually…
#155 Andrew Woburn
If it were my call I would scrap income taxes, go with GST
—————————————————————-
I’d vote for that.
My wife, who is a naturalized Canadian, would like to live in Vancouver but she has been disabused of that possibility by the cost of housing.
I have had to be blunt and tell her that we cannot possibly afford housing in the YVR region now or ever. She gets it and can’t imagine paying the astronomical mortgages people must endure out that way.
Still trying to convince her to move to Nova Scotia…work in progress!
Vancouver/West Coast is beautiful but just too much out of reach now and forever for us and many other Canadians.
Britons can’t live in London, either. Over 90% of Americans cannot afford to live in NY or SF. Average Toronto families cannot afford a detached in 416. People in Van have some quaint ideas. – Garth
#145 – Here, here!
So i’m no commie, definately a capitalist, and not a standard died in the wool ‘dipper’, but…
You have to ask yourselves. Is property (housing) a commodity to be traded by the world (10% foreign ownership in Vancouver, that we know of)… Or is it a requirement of society.
I think it’s the latter. What’s been allowed to happen in BC is insane. Junkers for 1M, 1 hour out of the city.
It takes bold leadership to correct it, no one, certainly me thought that would come in the form of an NDP government. It’s nice to see leadership in a province that’s been lacking it.
Our CREA seems to have been the ones in power in BC historically.
You think these rules launched by the NDP are going to have bite? This is all public.
Wait until you start seeing the non-public initiatives being spearheaded by Peter German and Eby. You ain’t seen nothing yet. The report is out next month…
And Vancouver SFD’s are squarely in the cross hairs.
If initiatives succeed, you are going to see collateral damage all over Vancouver. You will also be seeing news reports showing raids and people coming out hand cuffs in droves all over Vancouver.
I don’t think people in BC and the rest of Canada get what has happened in Vancouver and what is currently happening. Nothing is legit anymore in Vancouver. There is no such thing as making an honest living in Vancouver anymore.
How come West Vancouver can’t recruit any teachers? Good paying teacher jobs…all vacant, like the houses in W.Van.
Follow the money.
Garth,
“the finance minister yesterday confirmed all Canadians with rec or second homes in B.C. that are not rented out full-time will be taxed. – Garth”
——————————————-
Can you please clarify that your statement applies, to the proposed new annual tax of 1.95%, on assessed value (in 2019) for second (or more) home in BC, owned by Canadians (or anyone) but not rented out full time?
Thanks.
I only know what she said. And she said it. Everybody pays, foreign or domestic. – Garth
RE:
#150 renter in Surrey on 02.22.18 at 8:23 pm
Relax everybody.
All this stuff is just another non-event.
Just like B20 and all other previous changes.
There will be no material price drop.
That housing ship is sailed.
———————————————————–
But you’re so wrong. One constant has kept prices going up -> low rates, and lower rates. Look at a graph. But, what’s happening now…. Higher rates.
Watch the US hike -> and it will affect us in 2 ways:
-5 year fixed is based on the US Bond.
-We’ll be forced to hike as our lower dollar following each hike will drive the economy
Then we crash, then the dollar dives, then foreigners buy more homes at a discount.
This is all very predictable, get ready to buy when it dumps. Buy before at your own peril.
Tell me i’m not the only one that sees this pattern.
The BC Gov’t draconian measures are baseless and backward. Dictating what private property owners can and can’t do and making it punitive to own is not the path to prosperity. This is a slippery slope that keeps getting slipperier. If I want to buy three houses in BC and let them sit, that is my prerogative and part of what used to make this country great.
The real problem has and continues to be the CMHC – It allows banks to skip the all important step of properly pricing risk and is a moral hazard. Mortgages good bad and shit are packaged off their balance sheets.
Take CMHC out the of equation – the condo market plummets, which takes move up buyers off the ladder and SFH prices have to trend downward until the move up buyer can afford. Basic math folks.
The playbook in the GTA is – 2010 little Johhie buys said condo for $400k high ratio (any downpayment would have come from his parents) – today it is worth $750k – Johnnie clears 350-400k on the sale and now has a solid downpayment on the $1.2 Million home -which is only possible because rates a rock bottom and CMHC enabled someone who otherwise had no business buying a property to buy.
This displaces folks that actually have the income and the savings habits to buy, but may not have the same downpayment of the CMHC enabled Johhine. Repeat this tens of thousands of times across YVR/yyz.
Math
“I can’t imagine a government telling homebuyers who bought a home in the last year that we are purposefully trying to put you under water.”
It is all relative.
Nationalizing private property, including real estate overnight was definitely worse.
The icing of the cake was to start paying rent for the new *gov owner* and moving out of two rooms to make it available for new tenants, because your *rental property* was larger than what you or your family qualified for under the new housing policy standards.
The shared bathroom with scheduled hours was probably the greatest community building moment for the great political architects and leaders.
“I hear everyone had a home assigned to them when the reds ran Poland. They rebelled. – Garth”
Not over their family apartment! More likely, over political independence & fighting corruption, as I heard it. The Polish people I’ve met spoke fondly of the government-provided apartment, though there were complaints about how long it took to get it. And there were family feuds over inheritance…
As for Canada, real estate prices are driven by bank lending and we’ve allowed a build-up of debt-to-income ratios that has completely warped real estate-based balance sheets all over the country. See the graphs:
“Household Debt and House Prices”
&
“Change in Household Credit and Change in House Prices”
http://www.profstevekeen.com/data-on-credit-employment-and-house-prices/#Canada
Lisa Power on 02.22.18 at 5:17 pm
After having lived in whistler for two years and tried to buy into the market – it is impossible for Canadians to compete with people coming in from Hong Kong (where there is zero income tax) and laying out 3 Million plus for a house.
====================
The idea that people from Hong Kong are rich because they don’t pay tax is a little off.
It may still be true that Hong Konger’s pay little income tax but when I was there in the 80’s they were paying lots of other tax in the form of import duties etc. I seem to remember the tax on an imported vehicle was about as much as the landed cost of the car itself.
As a tax man at the time I thought this made a lot of sense. Trying to corral and tax income, even in law abiding Canada, is an inefficient process. Transaction taxes are easy. The rich pay more when they buy more. What’s not to like?
If it were my call I would scrap income taxes, go with GST and give poorer people a sliding scale refund to balance out the regressive aspect of transaction taxes.
Andrew, the people from Hong Kong I am referring to are not natives, but Brits, US, Irish, etc thst work in finance in Hong Kong and they love whistler. They have paid no income tax for years (their companies supply their cars), get cheap nannies, housekeepers, etc. and will freely tell you this. I also rented a house from one of this group and they are truly lovely people. But again, Canadians with a 55% tax rate cannot compete against buyers who pay no taxes, and as a tax payer to this country, I do believe that I should be able to afford a house in the second biggest land mass in the world with one of the smallest populations. I’m not expecting a house to be given to me, but when my household budget can afford a $900k house and there isn’t one to be found in this price range there is a problem. Hong Kong is landlocked so building is under geographic constraints. BC doesn’t have this issue so why aren’t we building a ton of houses? This is an artificial market where supply is kept artificially low compared to demand. I digress but the people buying up whistler are not Canadians and I do know a ton of Canadians who would love to buy there but they will never be able to compete in a local market taken over by tax free money.
#121
Just wait until the Indian Prime Minister comes for a state visit, dressed in Canadian flannel, toque, woolen work pants and carrying a double bladed axe to every photo op.
My absolute fave posters on this blog are the ones chearing for a 50 drop – which would take us back to to 2012ish in Vancouver, with no awareness of what the fallout from that big a crash would entail. As of their savings and jobs would be fully intact and they would cruise in and buy homes at prices they previously passed on and come out winners.
Take Garths advice, you missed it. Homes will never be 300k again in Burnaby and of they are god help us all. Those chearing these NDP moves have no idea what they are wishing for. Listen up your 40yo failures, homes were reasonably affordable 10 years ago. You missed it pal.
I only know what she said. And she said it. Everybody pays, foreign or domestic. – Garth
It is non-discriminating, inclusive, multicultural, in the true spirit of the Canadian democratic values.
https://ca.style.yahoo.com/sophie-trudeau-stuns-one-meghan-slideshow-wp-130312213/photo-p-strong-feb-21-2018-photo-171412325.html
B.C. measures to crack down on speculation could drive foreign buyers to Ontario…
https://www.theglobeandmail.com/real-estate/bc-real-estate-measures-to-crack-down-on-speculators-shift-spotlight-to-ontario/article38061009/
I guess Emma Lake Sask. will be the new Okenagon for Calgary folk. Chuckle.
“Math is fun, the NDP crashes houses by 50% hypothetically so everyone can afford to buy, but with that much equity out of the housing markets from declining Helocs who will have the money to buy a house? “
In every instance of a crash of any asset class in Canada that’s as overheated as housing is right now, something rose out of the ashes.
In the 1980s, as the commodities sectors crashed from the bubble of the 1970s, Toronto RE took off.
In the 1990s, it was the TSE/TSX and the tech sector in particular.
In the 2000s, after the TSE/TSX bubbled and crashed, the housing market (and commodities) rose out of the ashes.
We’re already almost 5 years past the peak of the Canadian housing market (reached in 2013). Something’s gotta rise up pretty soon. TSE/TSX earnings are actually very strong, but the precious metals sector, in particular, has so many absolutely fabulous companies. One firm I was looking at today is trading at a net of 3X cashflow, and a P/E of 6 based on latest reported audited figures. The sector is just so incredibly out of favour that its a near certainty of a significant rise at some point. Compare and contrast with the big no-earnings tech stocks, and cash flow negative Vancouver/Toronto RE. Its the participants in assets such as these which will enjoy an absolutely massive increase in purchasing power.
SimplyPut7 on 02.22.18 at 8:43 pm
#101 Bob Dog on 02.22.18 at 7:14 pm
Last year 278,000 Canadians died. Immigration was 280,000. – Garth
——-
Interesting fact!
Don’t tell that to people in Ontario, realtors and speculators were banking on the large immigration myth to keep the housing market going.
Yes, but this picture is missing something – the birth rate. Last year’s birth rate was higher then the death rate (389, 912) and with immigration thrown in we have twice as many people adding to our population than those who died.
And why is a 1% annual population increase a bad thing? It certainly assists the economy. – Garth
“Elected officials have purposely, deliberately, set a course to crash.“
Confused envy politicians. That is the job of the Fed.
Finally – and about time. Those who live in YVR have had enough of real estate mania.
Thank you, NDP!
“I only know what she said. And she said it. Everybody pays, foreign or domestic. – Garth”
—————————————-
This was my interpretation, thanks.
This was obviously meant to force speculators to sell or rent out their investment RE, but is going to screw those successful enough to acquire a second recreational property, which of course, is totally fine with the losers who couldn’t even manage to buy a single primary residence to begin with.
Increased taxation never fixed anything.
Now, back to that Osoyoos retirement vulcthing….
And yet, if Vancouver real estate prices dropped by 50% – plunging the province into recession – 98% of the population still could not afford a detached house.
————–
Agreed. So it looks likes they will have to drop by more than 50%.
The current market conditions were produced by irresponsible government policy, epitomized by Christy Clark’s First Time Home Buyer’s Loan, which covered half the downpayment for people too broke to come up with 5% down. Looked at in terms of what that has done to moister couples, it can be likened to a dealer passing out free heroin samples in the schoolyard. Looked at in terms of what it did to the condo market, it can be likened to the waiter, in The Meaning of Life, forcing that last mint on Mr. Kreosoate.
Counteraction was needed to offset the madness. I’ve never been a fan of the NDP, but they have gained my respect now. I’m sure the people sleeping in tents and vehicles here will extend their condolences to the rich people from out of province who are inconvenienced in the process of getting them out of the cold.
#153 Simply Put,
You are correct. Cheaper housing will provide an incentive for honest businesses to move to B.C and the economy could easily restructure. The future restructure will be built on a more diverse and dynamic base, rather than a singular bubble.
Working people in tech etc…need places to live in a real economy, not an economy based on collecting property like baseball cards or purchased as collateral to back gambling debt in drug money laundering schemes.
We don’t want to be the ghost town built on fentanyl.
This blog is getting scary again. – Garth
Love this
“I can’t imagine a government telling homebuyers who bought a home in the last year that we are purposefully trying to put you under water.” And under the waves could cover a shocking number of people.”
Translation: I can’t believe the government telling our customers that they were fools for believing us, and they are going to have to realize how much they just threw at us just a few months ago, and how we cheered them on to overbid with full confidence. We had some very good years, very good years….
“The playbook in the GTA is – 2010 little Johhie buys said condo for $400k high ratio (any downpayment would have come from his parents) – today it is worth $750k”
Try closer to $500k, the increase between 2010 and the 2013 peak. The only reason why you might think that a $400k unit bought in 2010 is ‘worth’ $750k is through an inappropriate extrapolation of average sales figures particularly during the era in which a disproportionate number of sales were of high-spec, up-market luxury condo units in the GTA/GVR.
Now $100k in ‘free’ equity is still historically abnormal, but hardly the overly dramatized and exaggerated return that you’re implying. Its also comparable to the return of the TSX index over the same interval, 12k -> 15.5k.
I have to agree with most of the comments here – it’s about time government listened to the people. I never vote NDP but I’m impressed they actually took action to try and topple this real estate ponzy scheme. Corruption, money laundering, and offshore money has destroyed BC for locals. I hope these measures come to GTA and Toronto.
As an aside- when locals can’t afford average homes its clear to me that foreign ownership needs to be limited.
“So, put it all together. Scary. A forced market meltdown. A debt crisis in an untold number of households. Reduced economic activity. The expulsion of fellow Canadians. Tax, tax and more tax. And yet, if Vancouver real estate prices dropped by 50% – plunging the province into recession – 98% of the population still could not afford a detached house.”-GT
—————————————————————-
I see you’ve finally beginning to see things my way, Garth! Debt-based ‘prosperity’ isn’t sustainable and it was only a matter of time…the time has come.
A whole lot of people(kind) are going to find out that leverage cuts both ways!
TCC
HELOC balances appear to be surging at their fastest pace in five years—even faster than mortgages, reports Bloomberg.
Borrowers can tap helocs for up to 65 percent of the value of their homes, and the funds are most commonly used for making renovations, investing and consolidating debt.
Has anyone entertained the idea that Canadians are entering a financial crisis and HELOCs are being used as a last resort to avoid the inevitable?
Another product – CHIP reverse mortgages. Why are these dominating the airways at present?
Oh well; we all have to learn our lessons. If anyone bought recently and over leveraged themselves and didn’t listen to you Garth, you can’t blame the BC govt. we all knew this was bound to happen. I don’t care what realty employees are complaining about. Or developers. Good grief. A one asset strategy is always the worst idea. If a correction happens in BC real estate and wipes you out then you were over leveraged and you’ve learned a hard lesson. Developers are more than happy to out price the public but whine like crazy if suddenly their profits may be affected. Kind of tired of it. I’ll stick with my home; its shelter and a place for memories not an investment only.
“I’m really glad about the BC housing changes on the taxation side. We live in Vancouver with 2 almost teenagers and we want to move into a bigger house. We haven’t been able to keep up with the price inflation and haven’t wanted to take on million(s) in debt…”
I’m usually quiet and post articles I believe people will enjoy. I’m thankful for the site Mr. Turner has set up and the information that he provides. I’m sure many have changed their ways of thinking because of reading him.
To the point though with the above quote. What your saying, is that you want prices to drop to afford a bigger home. That’s good and understandable. But you do know that your house will decrease in value too? Putting you right back in the same situation as your in now. Not to mention higher interest rates and tighter lending standards.
Huge Kudos to the BC NDP. When was the last time we had courageous politicians around. It is becoming increasingly evident just how spineless the previous liberals were. I have never voted for the NDP but certainly will now. Granted it may be tough love but it is long overdue.
Secondary property owner address of buyers from outside of BC, sales 2007:
Alberta for that period:
6,319 sales – 67% of total sales.
2,197,646,308 sales volume – 58% total of sales volume.
Landcor Data Corp.
So Garth, what was NDP supposed to do?
They don’t have much fiscal leverage as ZIRP, mortgages, etc. are mandated at federal level. They did what they have to do to crash the insane RE party. They got elected on this issue and they have to cater to their base. And I hear David Eby is a good guy. :-)
Would’ve be nice to offer some alternatives – actually was wondering when reading if you are subtly trolling your community here :-).
I agree with so many comments here and probably most are not NDP supporters, but people are frustrated and bitter.
Oooh boy it’s housecleaning week on here! And here I thought it was only the USD that was in deep trouble.
Firstly SCM and his ‘I didn’t know that higher minimum wages means a whole lot of rapid automation’ ultra left loon delusion is out, and now we have Stan Brooks insulting all of us for not eating at Harbour 60 tonight.
All we need next is Mark to tell us that peak real estate prices in the GTA occurred in 2013.
I’ll let you BC folks handle this one.
For Etobicoke Blues, there is a breakfast with Christine Elliott at 9am Sunday at Canadiana. You know I’ll be there at 8.30.
M48ON – UltraBlues!!
Recreation properties such as mountain ski houses, lakeside condos in Osoyoos or cabins in the woods are basically impossible to lease out full time. They are situated in, and designed for recreational use. So, not just the current owner, but any subsequent owner is looking at a 2% fee every year as the recreational part time use will not change. Who will actually buy these now? It’s a double whammy of lots of listings and few buyers. The dippers are doing more harm to local recreational industries and vacation spots than they are to real estate specers. So whats the discount I would need to see to purchase a second property that costs me an extra 2% per year? With 40 years to enjoy it, that would equal a 45% discount.
NDP!!!
NDP!!!
NDP!!!
Hey corrupt Liberals, go take a hike, eh
Guy on the radio worried about a tax on his 4 million dollar property that he laddered into by way of huge equity gains from originally buying a property in West Vancouver for 162k back in the day.
Cry me a river brah.
Garth you are coming across very condractiory!! Your thought process is probably that the NDP government over reacted in terms of their heavy handiness! Housing was a big issue in the past election and with a coalition government held together with a thin majority they had to act boldly! Surely you must understand that if they ever want to be reelected!
I feel as someone who is not a socialist that the budget was a brilliant tactic towards holding onto power and giving some hope to the young folks. The Liberals caused all this insane market and something had to be done about it. I remember you telling me to sell my real estate assets and renting! I followed your advice and have never slept so well in all my entire life that I thank you for. Will buy back at a later stage but will wait for at least a minimum 30% drop and then become a purchaser again. Time to buy sometime in 2019 ! Hopefully my predications fall in place thanks once again Garth,
Garth, again respectfully, if I’m fighting the wrong battlefield, than you’re directing fire trucks away from some burning stench. Globalization and lax oversight of global investment in residential real estate is the biggest wrong of this generation. It’s a blatant lack of protecting citizens of this country. This is not a game of monopoly. And if we treat our country like it’s for sale to the highest bidder – a parking lot for foreign money to buy up our cities – then what does that make us? I’ll answer that. Morally corrupt. We’re a laughing stock. Canada’s for sale, y’all. No need to say where your money came from or how. It doesn’t matter in the frosty north.
That is not the reason you can’t afford a house. – Garth
Millennials are a large voting block now. Most (including myself) are around the age that they’re looking to buy a house and start a family. Problem is housing has now become completely unaffordable (even in more rural commuter towns). Those who rent get screwed by astronomical rent Increases and shady landlord practices. Those who try and buy get shut out of the market or over leveraged. I doubt an entire generation of millenials are going to just continue putting up with this.
Hence why in BC millenials are voting to bring in policies to fix this. No one wants to raise a family in a tiny condo. Moving to some remote area to find housing is also not a feasible option for most because finding jobs in rural areas is extremely difficult.
BC smartened up by introducing these policies, hopefully GTA will too.
Gorden Gekko: Greed is good.
Carole James: Pain is good.
Ironically, Carole is the MLA for Victoria-Beacon Hill. This riding will be hit with a ton of bricks w/ the new overnight 20% FBT and the new 2% spec tax.
So BC. you want to tax non-BC income tax paying people like us here in Alberta who own property in your province?
Calling on all Albertans to stand strong and start dumping BC Real Estate.
Garth
Am betting that if you put a silver medal on Bandit, he would not take it off(okay maybe chew it a bit). The Canadian woman hockey thug who took off her medal, topped even the North Korean who tried to trip the Japanese guy in the speed skating!
Britons can’t live in London, either. Over 90% of Americans cannot afford to live in NY or SF. Average Toronto families cannot afford a detached in 416. People in Van have some quaint ideas. – Garth
I am officially so special now.
Almost forgot to ask the obvious: and why is that?
How is it good for the Britons, etc.?
After plowing through 174 comments I wanted to respond to at least 10 posters but then just decided it wasn’t worth my time. I’ve been to Cirque du Soleil shows with less going on. Not sure how you do it Garth.
On a positive note, did you read that…? Neither did I. Sweet!
Nobody has the right to own real estate, but everyone should have the opportunity too. At the heart of the issue is equality of opportunity and not equality of result. This is one of the principles the great democracy to the south was founded on, which was the concept that everyone is entitled to Life, Liberty and the Pursuit of happiness. At issue, is many folks feel the system is stacked against them, and they are not wrong. The NDP, Trump, Brexit and many others are simply outcomes of this frustration. I should never have needed to vote NDP, but my intent was to say screw you. Take globalization and put it in the trash heap of failed ideas. My tribe and me did well before it, and we will do just fine after.
#193 Ian on 02.22.18 at 9:54 pm
Oooh boy it’s housecleaning week on here! And here I thought it was only the USD that was in deep trouble.
Firstly SCM and his ‘I didn’t know that higher minimum wages means a whole lot of rapid automation’ ultra left loon delusion is out, and now we have Stan Brooks insulting all of us for not eating at Harbour 60 tonight.
All we need next is Mark to tell us that peak real estate prices in the GTA occurred in 2013.
I’ll let you BC folks handle this one.
For Etobicoke Blues, there is a breakfast with Christine Elliott at 9am Sunday at Canadiana. You know I’ll be there at 8.30.
M48ON – UltraBlues!!
=====================
I see,
So you are not insulted by T2 bringing his whole family to India for vacation on all of us/taxpayers expenses and his thousands of dollars fancy outfits or by the french villa billionaire guy screwing the doctors and plumbers or by 2 million shacks, but you are insulted by a mere 100 $ stake paid by myself?
Of course it was an intentional statement.
To show you the deep delusion we live in.
The worse thing I can do for you it to praise the rulers of this place.
Maybe I should do that?
BTW I have the Canadian flag above my bed.
SimplyPut7 on 02.22.18 at 8:43 pm
#101 Bob Dog on 02.22.18 at 7:14 pm
Last year 278,000 Canadians died. Immigration was 280,000. – Garth
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Interesting fact!
Don’t tell that to people in Ontario, realtors and speculators were banking on the large immigration myth to keep the housing market going.
Yes, but this picture is missing something – the birth rate. Last year’s birth rate was higher then the death rate (389, 912) and with immigration thrown in we have twice as many people adding to our population than those who died.
And why is a 1% annual population increase a bad thing? It certainly assists the economy. – Garth
Adding to a population is never a bad thing when proper planning is put in place such as making sure there is enough housing for everyone (and with the size of our country, affordable housing (not give aways) should not even be an issue, infrastructure is improved, health care is properly funded so the system can sustain the new numbers, etc. Without this being done, it puts unnecessary stain on people and resources.
The NDP is building expectations that will be its downfall. People seem to think they will be given houses. – Garth
No one thinks they will be given a house. Most people are not dumb enough to think downtown will be affordable to average people ( SF houses). I am in the fraser valley and commute long distance..the burbs should not have 1million SF houses or 800 townhouses (Surrey/Langley/Maple Ridge). You have said housing is overpriced. Perhaps increasing downpayment requirments would have been more your style but if this corrects the market..GOOD. Going to be painful but better in the long run.
Re: #201 AJ
Bingo!
Any person in law enforcement in the Lower Mainland can validate this.
“And if we treat our country like it’s for sale to the highest bidder – a parking lot for foreign money to buy up our cities – then what does that make us? “
I’ll answer that question — stinkin rich! Canadians can take money from selling a tiny little bit of real estate, a box in the sky, and invest it into the truly undervalued assets of the world. Sell high, buy low after all.
The only problem is, foreigners aren’t coming to Canada with money (the average economic migrant brings little more than enough for a rental downpayment and maybe a used Honda). And never really were in this RE cycle (the last big influx of legitimately foreign money was in the doldrums of the 1990s associated with the very low CAD$ and the fears of a disruption in Hong Kong). The present bubble is entirely and completely explainable in the context of domestic speculation and leverage, with debt ratios at extremes, and the non-RE assets that are at the bedrock of the Canadian economy extremely undervalued and un-loved. Exactly the opposite of what you would see if foreign money was driving Canadian RE.
In fact, the statistics out there point more closely to the likelihood of foreign capital leaving Canadian RE and going elsewhere for better investment opportunities. “foreign money” (occasionally Chinese, Persian, Russian, Arab, etc.) is just a disgusting meme concocted by dishonest sell-siders to justify the present out of control bubble in household leverage and speculation in one asset class. Measures against foreigners, while profoundly offensive in their race-baiting motivation, will have little to no impact on the market.
@10 & @40
You both are spot on. NDP in B.C. have finally done what no other government would risk doing and what needed to be done. They have been the leaders in what everyone else did not have the balls to do. It may hurt those that ignored all of the indicators over the last two years, and you Garth should be congratulating them on facilitating a consciousness in this out-of-control runaway train. I rent in an area of west Vancouver where there are driveways heaped in snow, curtains never opened, no garbage or recyclables ever put on the curb properties and gates shut. Time to bring these communities back to the people that are actually spending money in the local stores and facilitating business in the local communities. Now the problem is when these houses are sold to people that live in the community, will they be mould traps?
How naive. Will locals be lining up now for $5 million Westside houses that used to cost $8 million? What promised land do you expect? – Garth
The article is a year old and the finance minister yesterday confirmed all Canadians with rec or second homes in B.C. that are not rented out full-time will be taxed. – Garth
——–
You are taking liberties as usual for dramatic flare.
The new tax will target domestic and foreign speculators who do not pay tax in BC. It will capture satellite families and generally exempt primary residences and long-term rentals.
It does not apply across all of BC as you try to portray by referencing only a few cities in your examples. It will apply to Metro Vancouver, Fraser Valley, Captial and Nanaimo Regional Districts and Kelowna and Kelowna West.
Time to pay your taxes if you want to benefit from the best place on earth.
Albertans who for years have owned rec properties in B.C. are not ‘speculators.’ Taxing them this hard, without recourse, is purely a vindictive tax grab from those who are politically voiceless. – Garth
#134 Happy Housing Crash Everyone! on 02.22.18 at 8:05 pm
Garth the housing bubble has ruined lives.
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No, it is not the housing bubble.
It is Stan Brooks posting on this blog and irritating people.
Ok. I am changing my attitude from now on, apologies for being annoyed by me. I will not post any critiques of any type any more.
The Albertan that bought a lake house in Kelowna a year ago (just before it flooded) will now be paying $90,000 a year in property + speculation tax. He’s not alone.
That Albertan will try to sell that house and rent one like it for a couple of months a year. Good luck with either of those ideas.
Get ready for the haircut of the century.
#179 Mark
TSE/TSX earnings are actually very strong, but the precious metals sector, in particular, has so many absolutely fabulous companies. The sector is just so incredibly out of favour that its a near certainty of a significant rise at some point.
__________________________________________
Commodities rise and fall about every 30 years. They boomed in the 1940s, 1970s and the 2000s. There should be another commodity boom in the 2030s. They will be saying “We’re running out of oil” again. The TSX will outperform. Calgary house prices will skyrocket. Gold will be in favour again. The Canadian dollar will be at par with the US dollar. Then it will all go bust a few years later, as usual.
http://www.valuetrend.ca/wp-content/uploads/2014/09/commodity-cycle.jpg
Yea, bought a retirement home in B.C in 2009 to help look after my aging parents that lived on Vancouver Island. I also contribute more in taxes as a none resident of B.C than a native born Islander living in B.C owning a similar home. I was O.K with this as I considered it a penilty for being out of province. Fast forward 9 years later due to new monies hiking property values on the Island through the roof! I’m now sitting on unrealized gain that changes my homes value. I wasn’t speculating, I could never imagined these house prices would double in price. But I won’t be screwed by this unreasonable tax of 2% yearly just for occupying a house for 5 or 6months per year. So the lawn service I pay for will be given the boot shortly after I list and sell. The nice restaurants I frequent have seen the last of my Ontario earn dollars. The sub trades Iv hired to do repairs and home maintenence have got there last pound of flesh. The insurance on my retirement property will be cancelled, my car insurance will be cancelled, the on going flights between Ontario and Vancouver Island will be yesterday’s news, the Island chualfer I hire to ferry me back and forth from my residence to airport can say by, by. Oh….speaking of by, by, seriously dose any one think this is going to improve B.C’s bottom line. When regional taxes, plus 2% on even a $400,000 house total a grand a month not including home insurance, car insurance, and utilities. There’s just so many better places to live than Fools Island in B.C. I’m outa here.
#203 Pissed Off in Alberta on 02.22.18 at 10:12 pm
So BC. you want to tax non-BC income tax paying people like us here in Alberta who own property in your province?
Calling on all Albertans to stand strong and start dumping BC Real Estate.
———–
Please don’t just dump it the regions specified in the tax, but everywhere!
Looking forward to less red license fleeing their winter wastelands fueled by formerly hot oil dollars.
I think I will get the ball rolling and start the process by spreading the word on social media!
“what was NDP supposed to do?”
They could instruct the OSFI equivalent in BC that regulates provincially regulated banks to increase capital requirements. Capital requirements for writing mortgage loans against BC RE at BC provincially regulated institutions are absurdly low.
They could abolish programs like the one that writes subprime loans to elderly people who can’t afford to pay their property taxes.
They could regulate the shadow banking industry which comes under provincial jurisdiction.
They could rescind the Government of BC’s legislated guarantee of BC credit unions.
They could regulate Realtors (and related provincially regulated professionals) in such a way that provides for full transparency in fees for professional services, prescribes severe penalties for acting in conflict of interest, and enforces a meaningful regime of discipline on Realtors found guilty of misconduct.
Lots and lots of things that could be done at the provincial government level, that do not impact on individual property rights, do not target specific homeowners and do not purport to specifically confiscate value from RE buyers or sellers.
Unfortunately almost none of these things will be implemented because there’s too much conflict-of-interest between government and the RE industry itself.
Garth, a true Balkanization (according to wiki) is a “geopolitical term used to describe the process of fragmentation or division of a region or state into smaller regions or states that are often hostile or uncooperative with one another”
Maybe some new states or provinces need to be carved out over there. How about the PRGF, the People’s Republic of Greater Fools, led by none other than your good self as a mystical Jim Jones type leader, telling his loyal followers not to drink the real estate koolaid!
#153 SimplyPut7 on 02.22.18 at 8:31 pm
Well said and all very true !!!
My job is moving from Vancouver, I’ve been in the trade since ’83, working for current company since ’91.
I hope to move with the company as Industry has not been supported by Moonbeam and the Vision team.
M54BC
#9 Stan Brooks on 02.22.18 at 5:04 pm
Single malt?
I like GlenGrant, Glenfiddich.
Glenfiddich????????You just lost all street cred bro’….try Macallan sometime!
I get that this is a government-induced potential market meltdown. But, Garth, isn’t this ultimately a good thing for everyone here who gets the idea of a balanced portfolio? And won’t this hopefully get Canadians to stop thinking about real estate as the best investment option and putting all, or most, of their eggs in one basket?
Just when the populace is screaming for ‘more supply.’
Not exactly true. Developers are screaming for more supply obviously. Any local residents who have been shut out of the housing market in BC by offshore speculators (yes even 5% can affect the “comparison” price marketing scam) who are asking for more supply need look no further than the tens of thousands of empty condos owned by local and offshore “investors”. They simply don’t understand that speculators need to be banned, offshore investors in residential real estate need to be shut out and VIOLA problem solved as we reclaim BC.
Albertans who for years have owned rec properties in B.C. are not ‘speculators.’ Taxing them this hard, without recourse, is purely a vindictive tax grab from those who are politically voiceless. – Garth
They can aways sell and “move then shut up”.
Mattl: “My absolute fave posters on this blog are the ones chearing for a 50 drop – which would take us back to to 2012ish in Vancouver, with no awareness of what the fallout from that big a crash would entail. As of their savings and jobs would be fully intact and they would cruise in and buy homes at prices they previously passed on and come out winners.”
<<<<<<<<<<<<<<<<<<<<<<<<<
I would suggest that a lot of those posters were probably sick and tired of those people talking about their homes and "investments" going up in value 10% every year.
The fact of the matter is wishing won't do anything for anyone but the "bulls" always want to pat themselves on the back on the way up and threaten everyone on the way down. If I'm going bankrupt, you're going to lose your job.
Coincidentally, I live in Kelowna, as well. Beautiful area but you do understand that they call it the Albertan's playground, right?
Once the word of the B.C. budget hits Albertans I'm afraid our crash will make Burnaby's 50% correction look like a dip.
Good luck.
#215 Stan
My only point was that anyone talking about personal wealth publicly is close to the bottom of my books. That’s all.
I made the same point to Stone when he gave us a daily update as to how his passive ETF portfolio was making him 10k a day.
I’ll be looking for updates from him when both the stock AND bond markets decline this year.
If you agree than I am fine.
In response to your response on # 164
Come on…really Garth?
Average families cannot afford to even rent or for that matter, find a decent sized place in Vancouver, the lower mainland, Victoria, Nanaimo, Qualicum Beach, Kelowna, Penticton, Squamish, the lower Sunchshine Coast. Dig your head out of the sand. This has been the case for years. Where should the middle class be “allowed” to live in BC? We surely all can’t move to Lund.
Oh, and best of luck finding a stable full time job for a two income family that materializes coincidently – are people just going to click their magic fingers together and step right into two stable and full time jobs at the same time as they move out of town and pay the rent/mortgage (if you don’t have the benefit of making off with a windfall gain – ergo: not the middle class). Having moved twice in the last ten years, I can tell you that it took years to accomplish. Easier for a young couple, but in no way manageable for those of us who are somewhat older.
And besides, the cities and towns need a middle class – do they not?
This reset is the only way forward.
BOA says BOC to raise 4 times this year be 3…..another 1% wadda you think Garth?
Garth,
As you said this yourself – the problem is due to excess credit growth / wealth impact from decades of QE across the globe, and the hoarding of “attractive” assets by the 0.1% of the global well-off. Capital is fungible, stock market / real estate are no longer “local”, and international diversification is the norm, rather than the exception in this day and age.
As such, since Canada is a peanut in terms of global financial clout, they are not going to be able to do anything to stem the flow of QE/ZIRP/wealth effect spillover from the rest of the world, the only way they have left is through regulations / macro prudential policies.
In this upside down world where multi-trillions worth of global bonds are paying NEGATIVE rates, and G3 balance sheets are ~20 TRILLION and expanding, there will be winners and losers across the board. Savers and prudent spenders (as per what you recommended over the past decade, sensibly) have COMPLETELY lost out in this wealth accumulation game and the stupid/brave/reckless have been dutifully rewarded, particularly in housing. If the millenials / have nots have the voting power now then it’s in their power to dictate the wealth transfer to be shifted back to them.
In a democracy 49% of people are never going to be happy anyway. Look at Japan where so many young people are left out since demographics are the other way and only the elderly vote. Or look at India where nothing ever gets done. This is why there is a huge global sentiment shift to the China dictatorship model where at least things “get done” and wealth pie is getting bigger so at least the majority of people is making *some* progress
Being a banker myself, not saying this NDP policy is the “right” thing to do but honestly, it’s c’est la vie… Canada has no other option to defend against this global outflow of liquidity. It’s either taxes or a capital controls / tariffs. This is globalism/capitalism towards the end game and the issue of (forceful) wealth redistribution can no longer be ignored.
#214 Actual Factual on 02.22.18 at 10:24 pm
The article is a year old and the finance minister yesterday confirmed all Canadians with rec or second homes in B.C. that are not rented out full-time will be taxed. – Garth
——–
You are taking liberties as usual for dramatic flare.
The new tax will target domestic and foreign speculators who do not pay tax in BC. It will capture satellite families and generally exempt primary residences and long-term rentals.
It does not apply across all of BC as you try to portray by referencing only a few cities in your examples. It will apply to Metro Vancouver, Fraser Valley, Captial and Nanaimo Regional Districts and Kelowna and Kelowna West.
Time to pay your taxes if you want to benefit from the best place on earth.
Albertans who for years have owned rec properties in B.C. are not ‘speculators.’ Taxing them this hard, without recourse, is purely a vindictive tax grab from those who are politically voiceless. – Garth
——–
Again, the tax does not target all of BC. And the clear focus is not going after Albertans, as they are tiny fish.
The intent is to go after the whales – those who facilitate the flow of foreign capital into these hot markets, push prices up, and illegally secure their principle residence exemptions when they sell.
The requirement is paying income tax in BC. So if you want to drop your dependents off, buy a house for them, let them benefit from a superior social welfare system and infrastructue, but live and generate income overseas without paying income tax, then you have a tough choice.
Either you declare your income and pay tax in BC, and therefore avoid the speculators tax. Or you don’t declare your income, avoid income tax, but pay the speculators tax. Either way, its going to cost you for enjoying the benefits of the best place on earth.
The days of having and eating your cake are going the way of the dodo bird.
Good…crash it…if guv hadn’t inflated it with low rates and laughable regulation we wouldn’t be in this spot…do it everywhere and make houses living spaces not get rich quick schemes…we need a real economy not some sham realtor/mortgage/banker $&@ show. And hey – U wanna live here and join us , be a Canadian, then fine…otherwise your money can go elsewhere…New Zealand, u have the right idea..we need to take a page outta their playbook..
#218 Democracy Is Mob Rule
There should be another commodity boom in the 2030s. They will be saying “We’re running out of oil” again.
____________________________________________
For the bold real estate investor, you have about 12 years to pick up property in Fort McMurray. Prices dropped after the fire. They might drop more due to rising interest rates, so you should not act too quickly. However, there is a good chance of making substantial capital gains in the 2030s when oil prices go up. Then sell by 2038.
#133 Democracy Is Mob Rule on 02.22.18 at 8:01 pm
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#109 Gurpal Samjit
Meanwhile #justin is in India dressing up in costume and inviting people who have been convicted of attempted murder to dinner.
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At least he didn’t give them ten million dollars. Or did he?
————
No, he gave them $750 million instead!
Well, it will be pretty hard to prove your house is a long term rental since the BC NDP just changed the BC Residential Tenancy Act. After a one year lease (in month 13 +) the lease agreement becomes month to month. You can no longer sign fixed term agreements unless the landlord actually moving in themself. I suspect this will also cause issues when landlords renew their mortgages as banks often ask for lease agreements to show accurate rental income.
What will happen to all the people who rent out their summer homes over the winter (with a fixed term lease)? A tenant will no longer have to leave for the summer months.
Anyone who has a current fixed term lease can now stay past the end of their term. If you thought you had to move out of that nice summer home in the Okanagan by May 31 you can thank the NDP that you can legally stay as long as you want.
And I guess if you own that nice summer home and rented it out over the winter knowing that your fixed lease will end on May 31, you can thank the NDP that someone else will enjoy their summer more than you.
@10 & @40
You both are spot on. NDP in B.C. have finally done what no other government would risk doing and what needed to be done. They have been the leaders in what everyone else did not have the balls to do. It may hurt those that ignored all of the indicators over the last two years, and you Garth should be congratulating them on facilitating a consciousness in this out-of-control runaway train. I rent in an area of west Vancouver where there are driveways heaped in snow, curtains never opened, no garbage or recyclables ever put on the curb properties and gates shut. Time to bring these communities back to the people that are actually spending money in the local stores and facilitating business in the local communities. Now the problem is when these houses are sold to people that live in the community, will they be mould traps?
I live in Edm and have been looking at listings on Gabriola island for sbout 6 months, thinking of buying a vac property to possibly move to in sbout 10 yrs, however thsts out now, i was looking at $500k properties but thats 10k a yr in spec tax, wow, mo thanks
This blog is getting scary again. – Garth
——-
Not really. People are fed up with overpriced housing, dominated by speculators, greed and the thought of foreign investment.
People are ready for a correction, and a government that does something about it.. well Kudos to them!
@- #83 chopstix
Like Grarth said. If you don’t like it, just leave B.C
I though that the NDP were little softies. These taxes numbers should be double and apply provincewide.
Will vote NDP for life!
#52 Dog in The Fight on 02.22.18 at 6:03 pm
I voted NDP so they would do exactly what the NDP has done. If they didn’t I vote Green. This is our fight and our children’s future we are protecting. Folks without children, and those from outside BC do not have a dog in the fight and should shut up.
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An interesting post because my wife and I have said many times we wouldn’t have left BC if we didn’t have children. We would have sucked it up, lived with less and tried to find a way. With 3 kids, we just couldn’t keep it up any more. I’m not particularly political but doing nothing, like what the previous government was doing gets nothing.
Safer to own property in Mexico or Costa Rica than B.C. More stable government, taxation, and regulatory schemes.
The socialists wave is just beginning in Canada. It won’t stop until we’re trailing every other developed nation, broke, indebted, within productivity, crappy health care, and failing public education. Then people will ask why, and realize what a mistake they’ve made
Economics should be mandatory high school courses. Then maybe we wouldn’t see these types of governments.
Oh well- stay healthy, educate your kids after school hours, live life and stay outta debt. You’ll still come out on top.
First comment ever. I’m amazed by your reversal Garth. I’ve been reading rants on the laissez-faire attitude of the BC government for so long as the bubble inflated beyond repair, year after year. For the first time a government does something to fix it and you criticize government intervention. I’m pretty sure what BC just did will fix the problem. Of course it will crash, as all bubbles do.
I lived in Vancouver in the last decade, and as a young millennial got quite lucky, worked hard and earned enough money to travel indefinitely if I wanted to. However, wanting to contribute to society and to a community that had given me so much, I launched new ventures and learned hard lessons along the way. Nearly all my good friends moved out of the Lower Mainland, out of province and even out of country over the last 5 years. For the same reason, retaining senior talent in my business became increasingly difficult, HR nightmares, with a lot moving to the US or other provinces in their thirties/forties. The very fabric of society was broken, all people talked about while having drinks is housing. It was terrible. I’m not a leftist, but there comes a point when having enough for yourself you’d like to live in a healthy society too. What is 2% yearly tax if there’s no way you’ll ever run out of money anyway? Why can’t we encourage people to invest in the real economy instead of pouring every last drop into real estate that produces nothing at all? I was left with just a group of millionnaire friends that could afford to live there at the end and we all wondered what the hell we were doing, contributing to a city that clearly had no intention of fixing its issues.
So we all left and ended up travelling and launching businesses elsewhere. So long, Vancouver.
“It’s just another hit on the wealthy.””
As far as as cottages in lake country, to effing bad for the rich but the taxes don’t affect those areas anyway. People are FED up with rich people gaining huge growing paper wealth for doing NOTHING AT ALL. “Hard earned” gains my ass
Isn’t this exactly what you have been always talking about, not having your wealth all tied to one asset to avoid risk like this?
Invest all your money in real estate you are gonna get burned, just like you mentioned to people putting all their money in pot stocks and crytpos ;).
‘The incentive to dump assets in BC is huge – exactly what the NDP and its supporters seem to cheer for.”
Yeesssssss!!! The master plan is coming together Boahahaha!
#139 Democracy Is Mob Rule on 02.22.18 at 8:08 pm
#131 chopstix
i think people are just fed up with stupid, selfish, self serving politicians.
————————————————————-
This is why a federal NDP government is possible in the next election. As another poster mentioned, people don’t vote in governments, they vote out governments.
————————————————-
yes i agree on that…first there is the honeymoon, then into the 2nd term we see the rot and how (for the most part) they’re out to protect their own, making stupid policies…
i voted (with many others) for the NDP to kick out the rotten BC liberals (and i’m not some socialist…i’m more pragmatic…more a moderate).
but i have no doubt that in a few yrs they’ll also screw up and in will come the bc libs again…and around and around she goes.
Come gather ’round people
Wherever you roam
And admit that the waters
Around you have grown
And accept it that soon
You’ll be drenched to the bone.
If your time to you
Is worth savin’
Then you better start swimmin’
Or you’ll sink like a stone
For the times they are a-changin’.
Come writers and critics
Who prophesize with your pen
And keep your eyes wide
The chance won’t come again
And don’t speak too soon
For the wheel’s still in spin
And there’s no tellin’ who
That it’s namin’.
For the loser now
Will be later to win
For the times they are a-changin’.
Come senators, congressmen
Please heed the call
Don’t stand in the doorway
Don’t block up the hall
For he that gets hurt
Will be he who has stalled
There’s a battle outside
And it is ragin’.
It’ll soon shake your windows
And rattle your walls
For the times they are a-changin’.
Come mothers and fathers
Throughout the land
And don’t criticize
What you can’t understand
Your sons and your daughters
Are beyond your command
Your old road is
Rapidly agin’.
Please get out of the new one
If you can’t lend your hand
For the times they are a-changin’.
The line it is drawn
The curse it is cast
The slow one now
Will later be fast
As the present now
Will later be past
The order is
Rapidly fadin’.
And the first one now
Will later be last
For the times they are a-changin’.
Songwriters: Bob Dylan
The Times They Are A Changing lyrics © Bob Dylan Music Co.
What you NDP supporters aren’t getting is that tanking real estate will tank the economy. That means jobs ,all jobs related to housing will be severely impacted. Many of you will find yourselves out of work and homeless not in any position to buy BC cheap housing. You reap what you sow.
So, if housing crashed by 50%, 98% of the current BC population could not afford to buy a detached home. So all these taxes are basically not going to correct the housing situation, other than force non-BC residents to sell or be taxed into oblivion. As for the money laundering issue, if the government is taking that possible laundered money back via taxation, what was the issue? That they didn’t think they were getting enough of a cut of the action? I’ve a bit of a tough time imagining the BC government as Robin Hood in this situation, especially since they are using it to penalize many Canadian citizens for the apparent crime of being ‘not from around here’.
@ Pissed off Albertan
Please do that, sell all your properties. The lower this goes the better :)
Garth . . . Do your commenters actually read your postings?
The real estate mess today has been caused by government to begin with. Policies allowed for this.
It was never reined in fast enough and so now the corrective course (by government) will be just as tenacious.
Right now, this detoxification is needed (may be withdrawn later).
Its up to personal households to manage their balance sheets. If they were negligent by risk taking, now the chickens will come to roost.
#132 Terry. on 02.22.18 at 8:00 pm
“So, put it all together. Scary. A forced market meltdown. A debt crisis in an untold number of households. Reduced economic activity. The expulsion of fellow Canadians. Tax, tax and more tax.”
It’s over in this country Garth. I’ve been retired for years and I’m only in my 50’s. My wife will be exiting the workforce in just 2 more years. It’s not worth working to make more in Canada because you really don’t. The workplaces here are over regulated, micro-managed, toxic and too fast paced. Who needs all that crap and stress. My best advice if you live in Canada, if you can, is to get out of debt fast and leave the workforce as soon as you can and just start collecting your pensions as quickly as possible. Canada is declining socially, culturally, and economically very quickly now. The next step on our radar is the possibility of leaving this country. Canada and Canadians today are too highly indebted, overworked, stressed out, unfriendly, selfish, entitled, unmotivated and anti-social. The grass is not greener here anymore.
———————————————-
You sound like someone who stopped living many years ago.
“Canada and Canadians today are too highly indebted, overworked, stressed out, unfriendly, selfish, entitled, unmotivated and anti-social.”
That’s one of those “my life sucks” rants that would make Stan Brooks proud. I hope you can find a reason or two to “stop and smell the roses” once and a while.
Try putting out some bird seed and watching the blue jays/stellar jays/whiskey jacks. You never know, you might get inspired. Seen any young children or puppies lately?
Oh Canada! Boy is this getting interesting. I wonder if any other country has ever committed financial suicide so quickly. Note to every investor – move your investments out of $CAD.
#175
“Listen up your 40yo failures, homes were reasonably affordable 10 years ago. You missed it pal.”
The fever pitch is rising already and there is not a drop of blood in the water yet… I wonder if real estate will become a bloodsport? The more certain one is, the more entertaining the realization, and generally the further from the truth. Mattl I would love to see your post, post RE Apocolypse..
I am cheering for a %75 percent drop, and I know what it will entail, just look across the border ten years ago.
#220 Hot Oil Dollars on 02.22.18 at 10:32 pm
#203 Pissed Off in Alberta on 02.22.18 at 10:12 pm
So BC. you want to tax non-BC income tax paying people like us here in Alberta who own property in your province?
Calling on all Albertans to stand strong and start dumping BC Real Estate.
———–
Please don’t just dump it the regions specified in the tax, but everywhere!
Looking forward to less red license fleeing their winter wastelands fueled by formerly hot oil dollars.
I think I will get the ball rolling and start the process by spreading the word on social media!
—————————————————————
It would not be the first time that Albertans walked away from properties in BC (especially the Okanagan) bought with ‘Hot Oil Dollars’. It happened in the 70s, 80’s and 90’s too. Nothing new here. I could name a few developments where this happened over the years. There are still developments in the Okanagan developed and sold off in the 70s which were mostly sold to people working in the Tar Sands sitting vacant and unsold. I see the same thing happening again. Prices will drop 50% or more as they did back then. Back in 92 some of these properties could be bought for $3000 which had previously sold in the 70’s for 20,000 or more. Think this can’t happen again? Think again.
Re: #155 Fake News Again on 02.21.18 at 10:30 pm
Absolutely nothing in change in YVR until the Govt does something about the money laundering. If you think its just casinos and fentanyl……I have a “Pottullo Bridge” to sell you……
+++++++++++++++++++
I wonder why everyone is excluding the >$3 billion/year that the Hell’s Angels make in marijuana in BC every year (estimate from ~5 years ago), plus the hard drugs that would probably double that take.
That money has to go somewhere. They’ve already bought up all the car dealerships, parking garage companies, Cash Money outlet and everything else the Jimmy Pattison billionaires don’t want.
Where do you park that dough?
Commercial real estate I guess after they buy up all those houses.
They can sit on them forever, paid cash, so no crash in BC I’m thinking.
That tells you everything you need to know about the magnitude of the bubble. A 50% decline will be just the first leg down. Then the slow melt. Mentioning real estate will want to make people puke in a couple of years. Can’t wait.
Watched Carole James on The Voice with Vaughn Palmer and I thought she said it like it is and well put together financially. And she said several times that the NDP want to cool the housing and will keep a watch. David Eby on next Thursday, that will be interesting.
The NDP has listened to the people of B.C. and we are the taxpayers and vote at elections. And I like how the NDP have respect for the First Nations.
Heard somewhere that B.C. will be watched all over and might take on some of the NDP plans.
Feels like a we have to fight for our youth in our borders.
Garth, the folks who will be going underwater from this are guilty of two chief errors and so, sadly, deserve their fate:
1) they knowingly over-leveraged, believing there would/could never be adverse consequences (housing only goes up…)
2) Despite knowing that they live in Canada, they failed to perceive that their property would eventually be vulnerable to our heavily redistribution-inclined voters (particularly in Vancouver/GTA)
Few years ago, my neighbour told me how her Swedish husband was travelling back to Sweden to sell the property he inherited from his family. Now being Canadian citizen, he was not allowed to keep the property, or rent it out to his fellow citizens. He had to sell as he no longer lived there. If this Government Budget is bringing us closed to Balkan, the next one sure could bring us close to Sweden. That wouldn’t be such a bad thing? Right?
#167 TheSecretCode on 02.22.18 at 8:53 pm
You think these rules launched by the NDP are going to have bite? This is all public.
Wait until you start seeing the non-public initiatives being spearheaded by Peter German and Eby. You ain’t seen nothing yet. The report is out next month…
====================================
I sincerely hope they do the right thing and stop the madness.
BC is Crime Central.
It is demoralizing to be earning an honest living here.
There is an easy way to increase housing in the Lower mainland. Very Easy.
Just open up the phony agricultural land reserve. At least in stages.
Seldom does anyone do any meaningful agriculture here and the ones who do are so high tech that the Greenhouses they make produce a steady stream of Truckloads of Vegetable daily.
We have way more than enough of this land to cover the Greenhouse needs for hundreds of years, maybe Thousands at current rates of growth. In a few years they will be building high rise Greenhouses in densely populated countries. We do not need to go there.
The only problem I see is the Green opposition to allowing people to have a home instead of a tree standing there.
I can see the militant environmentalists Grinding and gnashing their teeth if this was ever proposed.
If you drive out into the BC interior there is so much land for greenhouse and other agri use that those who visit us from small countries are astonished at our idiot ideas of running out of Agricultural land.
Another rant.
Just to add to my angst over my latest property tax assessment increase, I see a house on my crescent street listed for sale. It was assessed at $640,000 and asking is $570,000.
IMO, the 2018 assessments were a cheesy ploy to tax the “rich”. I believe most public servants have more taxable income than I do yet the chances of them taking a pay cut is zero and then there is the future problem of paying their pension liability shortfalls. It does point out that Calgary real estate prices are still deflating abet slowly and unevenly.
They have nicked me for another $400 “donation” among the other nicks. I suppose some public servants think I won’t notice and push back. Being sacrificed as one the few for the good of the many will come at a price.
Add in the effect of interest rate increases, I am going to need to be more nimble and call out public spending waste. I wrote a couple years ago that NDP Alberta needed a maximum 10% HST (if the GST portion ever hit 10%, Alberta would drop HST). It seems social programs are designed for somebody else. Like the carbon tax, I know I won’t get relief from an Alberta HST.
Winters can be cold here. More tidewater pipeline capacity would help. Since BC is being anal and will be collecting a special toll for deliveries, I would put a special toll on BC deliveries into Alberta pipelines. I am sure I could find an excuse. Everyone loses again but it would prove Alberta can be just as anal.
They are not dictating what property owners can and can’t do. They are increasing taxes and implementing new ones. With any tax there are winners and losers. In this case property owners are the losers, big time. Property owners have been the winners for the last 30 years. Expect more extraction of RE wealth going forward.
You sound bitter. Looks like the retirement plan to cash out on RE in the future is not going so well? I heard the Fraser Valley has already gone ‘no bid’.
I am a screaming Conservative but I totally applaud the democratically elected Govt of BC actually doing what they said they would in their election pledges. I wish more govts had the balls to fulfill their election promises. The job of a BC govt is to protect the tax payers of BC and not the tax payers of Canada or the world. Folk on the wrong side of this had plenty of warning from you and others Garth but their greed pushed them into playing the RE game too long. As long as the people of BC want and support these measures then they are correct. As a previous poster said if you don’t have a dog in the game then butt out.
Houses are not a commodity but a home for local families to enjoy their lives with local extended family and a good life/work balance. Why else are we alive?
Something had to be done and kicking the ball further down the road is no longer an option. Too many BC families are being hurt. Criminals were previously running that province and the Liberal govt turned a blind eye. Even read about it here in England.
I holiday in the Balkans. Smashing place.
You are not good at math are you?
#14 Stan Brooks on 02.22.18 at 5:15 pm
I will never forget visiting a top french cuisine millionaires restaurant in Toronto with plate north of 100 $, salad north of $ 25 and bottle of decent french wine north of 100 $ and the homeless begging guy in front of it, I was the only one from the company, giving him a (rather large) bill.
I will never ever forget the look on his face.
World class city? Sure.
****************************
I don’t really have an opinion on TO or it’s people, since I haven’t been there as an adult, but I don’t understand your post.
Are there “world class” cities somewhere that have nice expensive restaurants and zero homeless people?
Or is your objection based on your peers not handing that homeless guy any cash?
Are you certain that your particular fellow diners represent the average charitable giving of Torontonians, and that it doesn’t measure up to other cities in the world?
BTW, I’m curious as to which cities do make your list for “world class”
#185 Lisa on 02.22.18 at 9:21 pm
This blog is getting scary again. – Garth
——–
This is your fault Garth, you caused people to admit they like the budget the NDP came up with.
I live in Ontario and remember the NDP’s Bob Rae Days, and when the media ran the story of the woman who quit her job to go on welfare because she was tired of putting up with the daily grind, while people on welfare were making as much as her. I’m not supposed to believe that the NDP could ever be a serious contender in an election nor have a chance of winning a majority government.
If the NDP in Ontario promise to implement similar housing and child care policies for the June election, that probability doesn’t seem like a far fetch idea anymore.
First off nobody is going to be lining up to buy houses when this thing unravels. The opposite. People will be lining up trying to sell. Those $8 million houses (which are nothing special) will be going for $2 million when all is said and done.
I was just at a house a friend rented recently in Van West. Really nice heritage house. Monthly rent $4200 for full house. Landscaping included. The house was recently listed at $10 million. After property tax that is a 0.3% cap rate. The house should be worth $2 million. Even at $2 million this place would give a 2.5% cap rate before PT and maintenance.
Garth although all Brits can’t afford to live in London, which note is actually a world-class city in comparison to Canada which has no world-class cities, we can afford to live within commuting distance and this is a tiny country. Canada is huge.
Daughter looking for a nice 3 bed, semi-detached with garden, 2 car parking and walk to good schools in the £275,000 or $ Cdn 480,000 range. Lots around too. That is affordable for a young couple with kids. A good starter. Town she has marked is one hour commute from London Waterloo.
#111 Nonpulsed
You are completely out to lunch. The tax does not apply to all of BC and it certainly does not apply to Invemere of the Kootenays.
Also, your ‘there is a two tiered property tax system for locals vs weekendeers’ is utter garbage
The chicken little panic and fear mongering from these changes is not warranted at all….
Interest rates already rising reducing demand.
Political Move:
BC NDP fulfill an election promise with the knowledge that interest rates will trim demand. In the end all people will talk about is “how high interest rates killed the market”. Politicals get credit for trying to some extent tame the market for locals or at least the perception of doing so. (Doesn’t mean their hearts aren’t in the right place – just means they are taking advantage of a bad situation already blamed on the previous corrupt governing party).
The pipeline dispute, Notely Alberta Election Bound NDP fighting for Alberta and the BC NDP/Green fighting for BC. One poster mentioned the possibility of a federal NDP government. The Millenials may start to sway the vote much earlier…driven to the polls to rebel just like the boomers did.
One thing we do know…politics is a game.
We should demand legislative changes to ensure responsible and accountable government.
PeopleKind can send a ship to Mars but can’t come up with a responsible system? No will? No way?
Outlaw all political gangs.
BC needs a corruption inquiry more so than Quebec ever did. And that’s a fact Jack!
Outlaw majority governments until either representatives grow up and represent their communities as a whole or the public has Veto.
On second thought just give the public a Big WTF! Veto.
#220…lol When alberta crashed a few years ago, it wasn’t long before we saw the flocking and flooding of jacked up, smoke belching, cowboy cadillacs with the red licence plates here on the lower island. I’m sure that didn’t help with the housing crisis we are experiencing or having to compete with “Billy” and “Buck” for our local jobs. If I saw a few less red plates and bull balls hanging from the rear…I think id live.
I’ve never understood NDP economics probably because I have always understood nothing is free, somebody actually has to go to work to pay for it.
For the NDP to suggest that the intent of the new taxes is to bring down the housing market clearly shows their complete lack of financial understanding. The end result will be to hurt those they are supposedly hoping to help. So many jobs are tied to the housing market. Imagine if you are a plumber who just purchased a half duplex in Abbotsford. The market crashes, demand slows and now you are out of work. More importantly, your duplex is worth less than what you owe. Of course, you’ll get cheap daycare while you are sitting at home smoking even more expensive cigarettes. So much for NDP policies.
The real problem is the financial naivety of Canadians much like the comments Lisa Power has posted above. I’ve lived and worked in Hong Kong and even owned a townhouse in Whistler. Her comments are complete bunk and it is due to the mind numbing naivety like hers why we get incompetent governments in Ottawa and here in BC. Many believe these bumbling politicians who promise everything to everyone and know they have no possibility of delivering. Many would love to live in Whistler but cannot afford to. Is it a right? Do we hear of Americans complaining they cannot afford to live in Aspen or the French having the same thoughts about St Moritz. What we have here in Canada is a population of the entitled who believe the government owes them a living and they shouldn’t have to work to get it. No, they don’t have to move where the jobs are but the high paying jobs should come to them. Sadly there are a lot of Lisas out there and even more sadly they each have a vote.
The NDP were turfed out last time because of sheer incompetence. It looks like we are the same path again. Just wait till Lisa complains she is out of a job. Whose fault will it be then?
I’ve never understood NDP economics probably because I have always understood nothing is free, somebody actually has to go to work to pay for it.
For the NDP to suggest that the intent of the new taxes is to bring down the housing market clearly shows their complete lack of financial understanding. The end result will be to hurt those they are supposedly hoping to help. So many jobs are tied to the housing market. Imagine if you are a plumber who just purchased a half duplex in Abbotsford. The market crashes, demand slows and now you are out of work. More importantly, your duplex is worth less than what you owe. Of course, you’ll get cheap daycare while you are sitting at home smoking even more expensive cigarettes. So much for NDP policies.
The real problem is the financial naivety of Canadians much like the comments Lisa Power has posted above. I’ve lived and worked in Hong Kong and even owned a townhouse in Whistler. Her comments are complete bunk and it is due to the mind numbing naivety like hers why we get incompetent governments in Ottawa and here in BC. Many believe these bumbling politicians who promise everything to everyone and know they have no possibility of delivering. Many would love to live in Whistler but cannot afford to. Is it a right? Do we hear of Americans complaining they cannot afford to live in Aspen or the French having the same thoughts about St Moritz. What we have here in Canada is a population of the entitled who believe the government owes them a living and they shouldn’t have to work to get it. No, they don’t have to move where the jobs are but the high paying jobs should come to them. Sadly there are a lot of Lisas out there and even more sadly they each have a vote.
The NDP were turfed out last time because of sheer incompetence. It looks like we are the same path again. Just wait till Lisa complains she is out of a job. Whose fault will it be then?
222 comments already before bedtime in Canada. I think that’s a record, at least in the 6-8 months I’ve been frequenting this blog.
#204 Pissed Off in Alberta on 02.22.18 at 10:12 pm
So BC. you want to tax non-BC income tax paying people like us here in Alberta who own property in your province?
Calling on all Albertans to stand strong and start dumping BC Real Estate.
————————————-
The southeastern corner of Alberta is just as sunny, and almost as hot in the summer, as the Okanagan. Not many lakes but surely there are some that can accommodate summer properties?
If not there’s always Montana, Idaho, or Washington State.
The whole BC economy is based on people buying and selling real estate to each other- the ultimate goal is who can horde as much RE as possible because they become the winners. Right, boo hoo-don’t like it move to Nunavut.
When rents are insane, average families can’t realistically afford anything half decent without binging on massive debt, I think there is a problem and it should have been addressed years ago.
But you are right, rising rates and restrictions to credit might have slowed the situation but as always government is always late to the party and slow to react and they usually react at the wrong times. If they had of acted 5-6 yeas ago it might not have gotten to this point but now…Wow, glad they ain’t messing around.
Anyhow, maybe in the distant future families might have a chance to buy reasonable accommodation near where they work and communities will develop and Real estate will stop being treated as a commodity.
And if you think market forces should be the deciding factor, give it up, just like market forces decided on 1.5m POS crack shacks in YVR and 800k 1 bedroom condos…
Right, market forces, along with
-0 down 40 year mortgages,
-tax free capital gains,
-lax money laundering policies
-selling building overseas before to locals
-and outright crimial behaviour allowed to go on for years (the vancouver model),
-Liberals in bed with developers and doing very well for themselves (there message- it’s all good).
-Gov Tax credits for years to buy Real Estate
-Shadow flipping
-Clarks free 37k gift or tax credit to buy condos
-Rates being dropped to virtually zero
-Mortgage and Realtor fraud unregulated (or self regulated) (you have heart beat, you qualify)
I m sure I could come up with other “free market” forces that allowed house prices to get to where they are , so what is the difference now? Let new market forces decide. Terrible and lax housing policies made it this way so where is the problem with policies that fix it?
Should be interesting.
ps. the housing mess has cause a huge misallocation of capital- imagine if people were investing in creating businesses and innovation and were encouraged to open a small business- how much of BC economy depends on real estate?
DELETED
#73 Penny Henny on 02.22.18 at 6:37 pm
#62 Stan Brooks on 02.22.18 at 6:15 pm
I highly recommend to the plebs Harbour 60. Great steaks..
////////////////
I don’t know why … All he does is drag shit in on the bottom of his shoe spreads it around and then leaves.
His time is coming. – Garth
†**************
I think you meant to write: Eats, shits, and leaves.
200 Protea on 02.22.18 at 10:05 pm
Garth you are coming across very condractiory!!
***********
I can’t help you.
This is awesome, especially the people cheering for the demise of the Albertans who own Okanagan real estate. There is no real huge industry up there and a lot of ex Vancouverites who moved up there work in tourism jobs and construction jobs which are about to go bye bye. My friends who own property up there from Alberta spend on average $20k a month on vacationing, that is restaurants, wine purchases, food, etc. Now multiply that by what a thousand or two minimum, how much cash is going to be gone from the local economies, therefore expect the locals to make up the shortfall through higher local taxes and fees.
The economic hit will be beautiful, expect lots of unemployment since the make or break for the small town local economies is June, July, August. These towns depend on tourism to be viable but I am sure the now wealthy everybody owns housing Vancouverites will pick up the slack lol.
Mental note, good friend of mine was in Port Moody bidding on a construction job for a proposed condo project. When he arrived he was told the project is on hold until the smoke clears, now he has to try to find another job to keep his crew of fourty people busy. They have eight more weeks of work at the site they are at and if there is not enough work after that project he starts the layoffs.
#221 Mark on 02.22.18 at 10:33 pm
“what was NDP supposed to do?”
They could abolish programs like the one that writes subprime loans to elderly people who can’t afford to pay their property taxes.
**************
Should the elderly be forced to pay for the sins of their children, forever ? Why is it legal to abandon your parent, but not your infant? I previously suggested that the Gov. could build retirement communities to free up urban dwellings. I realize now that they would only build displacement camps on a par with Gov. subsidized nursing homes.
The NDP is further proof that corruption can be delayed, but not denied. How’s about introducing lifestyle audits of all elected officials. Make it voluntary, put a box on the ballot beside their name:
Audited? Y/N
But who would run for office ?
#91 social sciencetest
I think you misunderstood my comment. A 100k household income made by one person is taxed at around 36%. A household income of 100k made by a married couple split 50k each is taxed at around 30%. I’m saying a married couple should be able to split their income so it’s taxed equally.
For example one spouse makes 150k and the other stays home to take care of kids and earns 0. They should be able to equally pay the tax rate as if they both earned 75k.
“Over-reacting about everything someone says or does, creating controversy over silly innocuous things such as what I choose to wear or not wear, is not moving us forward. It’s creating silly distractions from real issues.”
Warning! Explicit material (what little there is of it)
https://www.cnn.com/2018/02/21/entertainment/jennifer-lawrence-dress-facebook-post/index.html
Coordination with foreign law enforcement
Exceptional assistance from foreign law enforcement partners amplified the effectiveness of the Department’s initiative. The sweep announced today benefited greatly from the work of the International Mass-Marketing Fraud Working Group (IMMFWG), a network of civil and criminal law enforcement agencies from Australia, Belgium, Canada, Europol, the Netherlands, Nigeria, Norway, Spain, the United Kingdom and the United States. The IMMFWG is co-chaired by the U.S. Department of Justice and FTC, and law enforcement in the United Kingdom, and serves as a model for international cooperation against specific threats that endanger the financial well-being of each member country’s residents. Attorney General Sessions expressed gratitude for the outstanding efforts of the working group, including law enforcement action taken as part of the sweep by the Vancouver Police Department in Canada to halt mass mailing schemes that defrauded hundreds of thousands of elderly victims worldwide.
Thursday, February 22, 2018
Justice Department Coordinates Nationwide Elder Fraud Sweep of More Than 250 Defendants
https://www.justice.gov/opa/pr/justice-department-coordinates-nationwide-elder-fraud-sweep-more-250-defendants
Housing is not an investment (unless you are specifically in the business of housing development for resale, or in the business of owning a multiplicity of homes or units to rent out), it is shelter.
The past couple of generations, in certain markets, got lucky with a windfall by means of asset value appreciation, due to unique economic circumstances for the times. Hence, everyone fell victim to the belief that houses are investments that will “always increase in value”, and equated them with financial investments. The tide is now turning. Once houses decline further in value, they will eventually stabilize, and remain flat for decades. This will eventually change the thinking on houses as an “appreciating asset”, and things will calm down. Those looking for investment growth will have to turn to financial assets exclusively, once again. Housing will return to being perceived as shelter and family dwelling places for comfort and peace of mind. Not financial growth mechanisms or retirement plans. In the meantime, those caught in the crossfire until the correction is finalized will get burned financially. The old timers will emerge relatively unscathed. The more recent “house investors” will be scorched.
Housing is shelter. Real estate is the biggest investment most families ever make. Do not confuse the two. – Garth
#121
Just wait until the Indian Prime Minister comes for a state visit, dressed in Canadian flannel, toque, woolen work pants and carrying a double bladed axe to every photo op.
_____________________
9/10 Funny!
The NDP will have to walk back the all encompassing province wide 2% speculation tax. Carole James
“misspoke”.
“To its credit the BC realtors’ association had a stark response: “I can’t imagine a government telling homebuyers who bought a home in the last year that we are purposefully trying to put you under water.” ”
Agreed, but they certainly don’t give a rat’s a$$ about buyers. You know, people.
Realtards did everything they could to foster FOMO (helicopters and msm), bidding wars and were hell-bent, every step of the way, on reinforcing the floor as re prices ratcheted upwards, thanks to dumb gubbmint and even dumber central banks dropping rates too low and too long.
Sunny ways and party on for FIRE. I took the realtard course to get a closer look at the industry and some of my instructors, one in particular was a complete moron, with an ego the size of Texas. He truly believed that realtards are “IT”. And for a time he was correct. Until the real economy inevitably rotted and got most everybody in an almost irreversible funk. Even many of the rich.
People’s balance sheets look like hell today and to cap it all off, we have a PM who decimated a gem of a retirement vehicle, the TFSA. It was a bit slow to catch on ($hitty marketing), and whenever I talk to people about it, the average reaction is deer in headlights. After a bit, the inner lights go on, especially when I tell them that you can max out your RSP first, take the refund and max out your TFSA. Most are already 9 years behind and counting, on lost investment performance on contributions.
Decimating the TFSA was a short-sighted, ageist and moronic move. Tax-advantaged wealth-care for the über-rich and connected and a slap in the face for people who might have become a bit more concerned about and involved in their futures. Like I’ve said a number of times, money is increasingly hard to get, but even harder to keep, what with the greedy, wasteful maw of gubbmint (at all levels) nipping hard at taxpayers wallets. But I digress.
So no, realtards shouldn’t get a pass on this one. They didn’t purposely try to put people under water, but they certainly didn’t look anywhere beyond their excessively high commissions, nor income from other sources related to re sales. They didn’t and don’t care a whit about anything but people’s ability to borrow.
Fine line, IMHO.
The mess is clear for all to see as are the players.
So this is how liberty dies….to thunderous applause.
Babies don’t own houses. Most people dying do. – Garth
————
Bhabie gotta house
bot it wit my mouse
no realtor louse
ain’ no semi either
cuz I’m a heavy breather
I can’t loose (sp?)
with my caboose
made no $$ mistake
I’m eatin Stan steak
Viewed in the warm glow from the dying embers of the PC Party, Kathleen Wynne is looking pretty hot. The best the Cons can hope for now is a wardrobe malfunction.
If prices in Van drop just 25%, which suddenly seems like a no-brainer possibility, a stunning one quarter of all households with mortgages go into negative equity. That means their mortgages are greater in size than their property is actually worth. Yikes. And not only would they have a monster debt and have shed their savings/downpayment, but mortgage rates are guaranteed to increase this year and next, completely diddling the family balance sheet.
“If prices in Van drop just 25%, which suddenly seems like a no-brainer possibility”
which suddenly seems like the Canadian version of The Big Short
the Dippers are going to walk-back their own budget
If the government cared they would not have let things get to this mess. Taxes, taxes, taxes and more taxes! It’s all about the money. Ya do whatever you have to do to look after your family. There is a lot of things wrong within the system. It will never be corrected. That’s why everyday I stay ahead of the game. I won’t reveal my method.
Well done NDP.
Lot of happy and xenophobic dippers on this blog…. I have never understand why BC’ers don’t like Albertans, specially when these folks come to BC to invest, spend and help us, specially in the Interior to make our businesses work….. Hopefully the summer season will not be hit… If life becomes to hard here (It is already complicated to make a good living in the BC Interior, unless you work for either the government or a resource company), moving south will be an option.
Local school administrators have returned from their pilgrimage to the math guru in California. The “New Math” shuns the term “borrowing” when used during the subtraction process to, for example, move a unit of ten to the 1’s column. The preferred new term is “regrouping”, and the Bankers are lovin’ it.
“Regrouping” is a better choice than “increasing the granularity”, which specifically refers to the sand between their ears. Quit whining about sex-ed, and Trudeau’s “dictatorship”. Our children are our future, don’t make them any stupider.
Definitely big measures for a forced market housing correction. This has become inevitable as buying a home in BC has become either hereditary, affluent people residing outside country, and/or wealthy people in general. A middle income simply could not afford and people continually would need to rent to make an existence or be restrained to high mortgage payments or simply leave Vancouver to live somewhere else in Canada that is more affordable. Just a side note, outsiders to some countries such as Thailand, Philippines need residents of those countries to have majority ownership i.e. 51% plus to be able to buy a home. This has kept affordability within the country. In essence, protecting that country from being owned by the wealthy from other countries. PERHAPS similar scenario setup may be needed in Canada……
#293 Bonfire of the Insanities on 02.23.18 at 8:51 am
Viewed in the warm glow from the dying embers of the PC Party, Kathleen Wynne is looking pretty hot. The best the Cons can hope for now is a wardrobe malfunction.
………
Same aliens that put Trump in the white house will eradicate Libralism in Canada.
When I was in Vegas last weekend.
https://youtu.be/2FcPqy04AVk
Hi Garth,
First and foremost thank you for what you do…even when I strongly disagree with you I enjoy reading your take on financial and political issues. I think you’ve missed the mark on millennial anger in Toronto. I’m absolutely in agreement with you that ownership is not a right…but basic housing is…and therein lies the problem. The average family can no longer afford to rent in Toronto, even the aging purpose-built stock outside of the core has become too expensive. Rents are cheap when compared to the costs of ownership but they are prohibitively high in consideration of local incomes. I would love to hear your take on this specific housing issue. I have a hard time considering a family making 70-80k a year entitled for expecting to be able to afford rent on an old building in the fringes of the city.
#242 T-Rev on 02.22.18 at 11:38 pm
Safer to own property in Mexico or Costa Rica than B.C. More stable government, taxation, and regulatory schemes.
The socialists wave is just beginning in Canada. It won’t stop until we’re trailing every other developed nation, broke, indebted, within productivity, crappy health care, and failing public education. Then people will ask why, and realize what a mistake they’ve made
++++++++++++++++++++++++++++++++++++
If the majority of comments on this blog are representative of the wider population, then you are correct. 3 of the 4 largest provinces & federal gov’t are currently run by very left gov’ts, and while Quebec’s Liberals have (somewhat) put their fiscal house in order, they are still an extremely gov’t controlled province. Alberta might go right again, but that is it. Ontario will remain left no matter who wins, and it could very well be the NDP.
Perhaps Jagmeet will get the mills out to vote, and either win himself, or as consolation pull T2 even further left. You have read it on this blog – the mills are angry and want to vote for the “wealth transfer they deserve”.
Unfortunately, this generation will have to learn the hard way that aggressive attempts to “transfer the wealth” end up reducing the wealth…period. And it doesn’t come back as quickly as it leaves, *IF* people even decide to change the rules again.
The vast majority of Venezuelans were very happy with Chavez…at the beginning.
#229 Ian on 02.22.18 at 10:47 pm
#215 Stan
My only point was that anyone talking about personal wealth publicly is close to the bottom of my books. That’s all.
I made the same point to Stone when he gave us a daily update as to how his passive ETF portfolio was making him 10k a day.
I’ll be looking for updates from him when both the stock AND bond markets decline this year.
If you agree than I am fine.
=========================
Sure. My point was never not to imply personal wealth.
A dinner at a fancy restaurant is nothing.
Shack in Vaughan for 2 mil is something.
This is the point of indebted shack owners who need reassurance that they made the right choice.
I understand them.
I will Never forget what the Liberals (Socreds in Sheeps clothing) have done to the lives of our young people.
I will from now on educate everyone I know on the criminal behavior that took place and the tacit approval criminals received from the Liberals while their young population was suffering.
I figure that about 20 people including my immediate family, maybe more from those 20 who respect my opinion, will vote in the direction I vote.
I get calls from several uninformed friends who ask who they should vote for every election.
I give them my honest opinion and why.
#54 Penny Henny on 02.22.18 at 6:08 pm
#14 Stan Brooks on 02.22.18 at 5:15 pm
I will never forget visiting a top french cuisine millionaires restaurant in Toronto with plate north of 100 $, salad north of $ 25 and bottle of decent french wine north of 100 $ and the homeless begging guy in front of it, I was the only one from the company, giving him a (rather large) bill.
/////////////////
Maybe you work with a bunch of dicks?
What is your point?
————————————————————–
Birds of a feather…
Soxxy Lafarce has just apologized for the mangle-fest in India “on behalf of all Canadians”………………..
How can we negotiate anything economic and be taken remotely seriously by other world powers going forward?
Interesting.
Garth how severe do you think the impact will be?
What implications do you think this holds for Ontario (Toronto) moving forward?
It appears we are pointed towards a recession of historic proportions when all roads converge?
The RE measures in BC were the start. If these don’t work there will be more. Most folks do not want Vancouver to be world class. They just want there kids to have a nice place to live. People a Nova Scotia look happy.
#308 Dog in The Fight on 02.23.18 at 10:50 am
…. Most folks do not want Vancouver to be world class. …
********************
world class = ??
#114 NEVER GIVE UP on 02.22.18 at 7:37 pm
…
I sincerely hope for a major decline in real estate prices so I can keep my family together in the same city.
…
*****************
what great expectations!
#257 Ronaldo
Your right, I remember those days growing up in that area,I’m hoping to pick up three or four houses once this hits bottom,bring it on!
#285 I’m stupid on 02.23.18 at 7:44 am
#91 social sciencetest
I think you misunderstood my comment. A 100k household income made by one person is taxed at around 36%. A household income of 100k made by a married couple split 50k each is taxed at around 30%. I’m saying a married couple should be able to split their income so it’s taxed equally.
For example one spouse makes 150k and the other stays home to take care of kids and earns 0. They should be able to equally pay the tax rate as if they both earned 75k.
=====================
This proves that you are really stupid. $100k paying 36% tax? Here is the tax calculator in Canada. For $100k single person income, the total tax rate including CPP and EI is about 28%. The tax rate goes much lower if you have family. I used to pay about 22% with single income of $120k and family of 4.
https://simpletax.ca/calculator
http://www.gazette.gc.ca/rp-pr/p1/2017/2017-06-17/html/reg4-eng.html
I suppose we are still in denial about the Govt Bail In provisions…..even though it says Bail In right on the Govt website:
Vol. 151, No. 24 — June 17, 2017
Bank Recapitalization (Bail-in) Conversion Regulations
Statutory authorities
Canada Deposit Insurance Corporation Act
Bank Act
Sponsoring department
Department of Finance
There is no bail-in provision which would ever jeopardize a single bank deposit. – Garth
Someone asked yesterday, “Who in Toronto can afford a million dollar home?”
Realtor.com shows about 5,500 million plus homes for sale in the GTA Golden Horseshoe over 1M.
2,800 over 1.5M
1,600 over 2M
650 over 3M
200 over 5M
My question is, who would set in and buy in Ontario in light what BC has just done?
Garth, you opened up my eyes Thank you
#300 Smoking Man on 02.23.18 at 10:03 am
#293 Bonfire of the Insanities on 02.23.18 at 8:51 am
Viewed in the warm glow from the dying embers of the PC Party, Kathleen Wynne is looking pretty hot. The best the Cons can hope for now is a wardrobe malfunction.
………
Same aliens that put Trump in the white house will eradicate Libralism in Canada.
When I was in Vegas last weekend.
https://youtu.be/2FcPqy04AVk
*************
Unfortunately, for Smokey, they don’t teach reflection and refraction until Grade 8.
No need for 4 rate hikes in 2018
and the markets roar!!!!!!!!!!!!!!!!!!!!
and no siree will the Bank of Canada raise rates with any vegence. In fact they may be done :)
The market anticipates 2-3 Fed hikes this year and, yes, the B0C would also be increasing. – Garth
I couldn’t buy a favourite “contraband” cheese today because the boys in Customs are shielding the CDN cheese industry. I don’t blame the dairy farmers entirely. My neighbour was able to pay $1.4 M for his acreage (sold for $80k in 1987, seriously), but most of his wealth came from his dairy farm that became a Toronto suburb.
I blame Saputo and all the other fake cheesemakers in this country lobbying for protection. Make your cheese edible and they will come. If you lose sleep over house prices, don’t even look at farmland. When California dries up, you’ll be lucky to eat a piece of Harper’s stewed leather chaps to excise your rotten wisdom tooth. Luxury!
The BC budget has just improved the chances of other NDP governments being elected, provincially and federally.
When the gap between rich and poor gets too extreme, revolutions happen. When governments become too corrupt, revolutions happen.
Vive la révolution
Hey, how are mortgage brokers doing these days?
http://silvermanmortgage.com/first-time-homebuyers-pre-qualify-now/
Sounds like the BC housing market is going to be pooched. And might I add, What a complete Cluster$%&*
Just imagine those first time home owners reactions when they figure out they were Duped.
#311 Millmech on 02.23.18 at 11:14 am
#257 Ronaldo
Your right, I remember those days growing up in that area,I’m hoping to pick up three or four houses once this hits bottom,bring it on!
————————————————————-
Don’t rush to get back in. This is going to be epic. Westside road properties will take a beating. Going to be a lot of 4 sale signs going up. I did very well buying properties back in the late eighty’s early 90’s. It may take a couple years to bottom out. Happy to have sold my last one a year and a half ago. Time to sit back and watch the unwinding once again. This has been a nice 10 year run.
For all those people whining about a tax on a second home or taxing those using our housing market as store of health, the writing is on the wall.
You benefited from a housing policy and tax regime that benefitted you for decades – subsidized ownership through CMHC, tax free capital gains on principle residences, lax CRA enforcement on undeclared rental income, homeowner grants, property tax deferral at 55, and the list goes on.
The tax regime and housing policy is swinging back the other way.
As is frequently noted here and other real estate bull blogs, ‘move or shut up.’ If you cannot afford the tax, move – or stay but ‘shut up.’
If that advice is good enough for those seeking to have access to shelter (not ownership) in the very cities and provinces where they live, work and contribute as taxpaying citizens, then it is equally valid for those whinning about a few taxes on their second home or for those that seeking to store their foreign wealth in houses.
Market intervention cuts both ways – you are just unhappy that the pendulum on market intervention is swinging the other way now…
#249 Vanreal on 02.22.18 at 11:56 pm
What you NDP supporters aren’t getting is that tanking real estate will tank the economy. That means jobs ,all jobs related to housing will be severely impacted. Many of you will find yourselves out of work and homeless not in any position to buy BC cheap housing. You reap what you sow.
*****************
Ummm….if higher interest rates were gonna crack the market…jobs were set to be lost in any event. Jobs have been lost in the last 10 years as building has decreased. At one point there were 5 houses being built on a single quiet island street…now not so much.
Blaming the inevitable on a party trying to take action for the local population is stupidity. No one did anything before this. Where is your blame for the former corrupt government. Pay attention to what is going on in BC>
#22 I’m stupid on 02.22.18 at 5:28 pm
I’m a firm believer that the entire tax system needs to be over hauled. Things such as OAS, child benefits, daycare subsidies and all other gov’t funded welfare programs should be given based on an income and net worth bases.
I think CRA should look into cash back and travel points credit cards in the business sector. I know a few who get $20k a year in travel points. This is untaxed income in my opinion. There is a big difference between personal credit card points (all purchases are after tax dollars). Business purchases or employer reimbursements for goods and services for the business are done in pre tax dollars therefore a 1 or 2% cash back on credit cards is untaxed revenue.
__________________________________________
I believe this becomes a taxable benefit.
If anyone needs gardening work done this summer, I would not recommend hiring Bruce McArthur.
Two more bodies IDd in potted planters this am!
How is Garth going to top this tonight? It might be epic …
#250 Linda on 02.23.18 at 12:00 am
So, if housing crashed by 50%, 98% of the current BC population could not afford to buy a detached home. So all these taxes are basically not going to correct the housing situation, other than force non-BC residents to sell or be taxed into oblivion. As for the money laundering issue, if the government is taking that possible laundered money back via taxation, what was the issue? That they didn’t think they were getting enough of a cut of the action? I’ve a bit of a tough time imagining the BC government as Robin Hood in this situation, especially since they are using it to penalize many Canadian citizens for the apparent crime of being ‘not from around here’.
**************
They are curbing speculation and they should. BC is one of the biggest money laundering capitals in the world.
I, for one, am licking my chops at the prospect of a housing crash in BC, come what may. Thanks to Garth’s sage counsel over the years, my wife and I sit on an investable nest egg large enough for us to be able to buy a property in cash and still have leftovers to rebuild our portfolio.
Giggling like a schoolgirl at the thought that after 16 years of corrupt BC Liberal rule the first major act of the NDP will be to kneecap Christy’s legacy of kowtowing to developers and specuvestors. As the movie goes, there will be blood.
The vultch is on.
#285 I’m stupid on 02.23.18 at 7:44 am
#91 social sciencetest
I think you misunderstood my comment. A 100k household income made by one person is taxed at around 36%. A household income of 100k made by a married couple split 50k each is taxed at around 30%. I’m saying a married couple should be able to split their income so it’s taxed equally.
For example one spouse makes 150k and the other stays home to take care of kids and earns 0. They should be able to equally pay the tax rate as if they both earned 75k.
=====================
This proves that you are really stupid. $100k paying 36% tax? Here is the tax calculator in Canada. For $100k single person income, the total tax rate including CPP and EI is about 28%. The tax rate goes much lower if you have family. I used to pay about 22% with single income of $120k and family of 4.
https://simpletax.ca/calculator
====================================
Taxes have gone up since then or you have other deductions perhaps? Your past situation does not invalidate the point being made. Using the link you provided, the average tax rate for $150K was 33% (48% marginal) meaning that family pays $50K tax. Same family with both partners making $75K each pays $38K tax (25% average tax rate). A more complex calculator may change the numbers slightly, but the concept is the same.
A family where one spouse makes more, enabled by a stay at home spouse, pays way more tax than two spouses working. That is not equal. It is a judgement by government that double middle income families are taxed less than one with a higher income spouse and a stay at home spouse. If you believe that you tax unwanted behaviours, then it is a message that a stay-at-home-spouse family is less desirable than double working parents. The federal government has clearly been moving that direction – scrapping the family tax credit and attacking CCPC income splitting as unfair (instead of letting everyone do it which would also be fair). That is a value judgement on the optimal family relationship and structure. Someone once said that the nation had no business in the bedroom of Canadians. Who was that again? I think this path is more likely a carefully calculated maneuver to sacrifice people perceived as “rich” to appease a larger voter block. Maybe I am just cynical.
You should probably be more careful about hurling insults at people and calling them stupid. It just makes you look bad – especially if you turn out to be wrong. A little humility is generally a good idea.
As a general note. The amount of glee over seeing central planning by government and disregard for the various people caught as collateral damage in the comments section here is disturbing. Scary if this reflects the general population. Hopefully it is just a steerage section phenomenon.
This Is What Life Without Retirement Savings Looks Like:
https://www.theatlantic.com/business/archive/2018/02/pensions-safety-net-california/553970/
Ronaldo.
Thank you for the that you tube millenial song. While I don’t like to generalize (much) I enjoyed the laugh.
Cheers,
#317 Fed outlook
Complete nonsense. Inflation is roaring. Both BoC and Fed raise this year. How many is not known but it’s on.
Yields on the US 10 year have been rising the last two months as the balance sheet is finally starting to be unloaded. Still waiting for it to crack 3% but guess we will have to wait a week or two.
On the brighter side: Riding season coming soon, time to think about polishing up your ride.
This video illustrates the moods of Vancouver voters. The monkey on the left represents voters who don’t own a house and the monkey on the right represents voters who do own a house.
https://www.youtube.com/watch?v=-dMoK48QGL8
Bobby on 02.23.18 at 3:30 am
I’ve never understood NDP economics probably because I have always understood nothing is free, somebody actually has to go to work to pay for it.
For the NDP to suggest that the intent of the new taxes is to bring down the housing market clearly shows their complete lack of financial understanding. The end result will be to hurt those they are supposedly hoping to help. So many jobs are tied to the housing market. Imagine if you are a plumber who just purchased a half duplex in Abbotsford. The market crashes, demand slows and now you are out of work. More importantly, your duplex is worth less than what you owe. Of course, you’ll get cheap daycare while you are sitting at home smoking even more expensive cigarettes. So much for NDP policies.
The real problem is the financial naivety of Canadians much like the comments Lisa Power has posted above. I’ve lived and worked in Hong Kong and even owned a townhouse in Whistler. Her comments are complete bunk and it is due to the mind numbing naivety like hers why we get incompetent governments in Ottawa and here in BC. Many believe these bumbling politicians who promise everything to everyone and know they have no possibility of delivering. Many would love to live in Whistler but cannot afford to. Is it a right? Do we hear of Americans complaining they cannot afford to live in Aspen or the French having the same thoughts about St Moritz. What we have here in Canada is a population of the entitled who believe the government owes them a living and they shouldn’t have to work to get it. No, they don’t have to move where the jobs are but the high paying jobs should come to them. Sadly there are a lot of Lisas out there and even more sadly they each have a vote.
The NDP were turfed out last time because of sheer incompetence. It looks like we are the same path again. Just wait till Lisa complains she is out of a job. Whose fault will it be then?
Bobby, for $900k I could get a condo in aspen or an apartment on the upper west side of NYC (my preferred location there) but not in Whistler. My salary is in the top 1% of Canada and if I can’t afford to buy there is a massive problem in our housing. I’m saying lets level the playing field since I pay taxes to the government of Canada I shouldn’t have to compete with non-taxable $ from outside the country. My salary is also not dependent on the Whistler, BC or even the Canadian community, as I work internationally so a housing bust will not affect me except make housing more affordable. And “how am I expecting the government to owe me a living” when I pay for my children’s private schooling, have private health insurance (aka US style – my choice since our public care is sometimes not the most efficient), pay a rather large tax bill, and save for my future???? because I want to buy a house/townhouse/condo in the ~$900k range in a small community 2 hours outside of a major center? Another major issue we have is that as the second largest land mass in the world with a small population – 10,000 houses could be put up overnight in the Fraiser valley and still have land left over, same with Whistler, Victoria, Kelowna, etc. – so with demand and lots of land, why aren’t the houses being built?
“BC is one of the biggest money laundering capitals in the world.”
Any proof of this? Why is it that when you look at BC RE, all you see is a sea of leverage and extreme debt? This definitely isn’t consistent with the concept that money is being laundered or imported from a’broad.
Some of the stories that get passed off here as money laundering are laughable, such as those involving casinos with low payout ratios.
#23 Constantin on 02.22.18 at 5:32 pm
Also, I don’t completely understand, why are you saying that it’s not fair that the government is subsidizing the owners (with different tax incentives), but now that the government is actually pulling away from such policies, and wants to punish speculation, you’re saying again that it’s not fair. I don’t understand how these things are consistent. You need to pick one, it’s either good to give incentives to property owners, or bad. You can’t complain in both cases that the government is wrong. All of this, is of course, my humble opinion.
——————————————–
Here’s the consistency: Garth has consistently said that government should stay out of the housing market.
So no incentives and no disincentives.
#330 Loonie Doctor on 02.23.18 at 12:21 pm
#285 I’m stupid on 02.23.18 at 7:44 am
#91 social sciencetest
I think you misunderstood my comment….. I’m saying a married couple should be able to split their income so it’s taxed equally….
=====================
This proves that you are really stupid. ….
https://simpletax.ca/calculator
====================================
Someone once said that the nation had no business in the bedroom of Canadians. Who was that again?
≠≠≠≠≠≠≠≠≠≠≠≠≠≠≠≠≠≠≠≠≠≠≠≠≠≠≠≠≠≠≠≠≠≠≠≠≠
I believe it was Trudeau the Elder. Although, if memory serves, he was not referring to sucking off funds from the Treasury.
#301 Mandria on 02.23.18 at 10:05 am
I’m absolutely in agreement with you that ownership is not a right…but basic housing is…and therein lies the problem. The average family can no longer afford to rent in Toronto, even the aging purpose-built stock outside of the core has become too expensive. Rents are cheap when compared to the costs of ownership but they are prohibitively high in consideration of local incomes. I would love to hear your take on this specific housing issue. I have a hard time considering a family making 70-80k a year entitled for expecting to be able to afford rent on an old building in the fringes of the city.
___________________________________
You do not have a right to basic shelter for cheap within the confines of the GTA.
You have two choices: Stay and pay, or leave for greener pastures.
Are your parents immigrants? They left, so did mine, 75%+ folks on this blog left or their parents left their birth countries. That’s what folks do if they want to make a change – they bail. Anything else is just wasting precious time.
That’s all there is to it. You will not live to see “affordable” housing in Toronto, and if you do – you’ll have much bigger things to worry about than the price of housing.
#52 Dog in The Fight on 02.22.18 at 6:03 pm
I voted NDP so they would do exactly what the NDP has done. If they didn’t I vote Green. This is our fight and our children’s future we are protecting. Folks without children, and those from outside BC do not have a dog in the fight and should shut up.
—————————————————————
What about Canadians with vacation properties in the Okanagan? Do they get a say?
DELETED
#337 Mark on 02.23.18 at 12:40 pm
———————–
Unfortunately laundering is likely to be true, and has been going on for decades. There’s mafia activity, and of course all the grow-op houses. Anyone on the ground there knows this.
I rarely read the comment section, but in reading the blogs this week, I wondered what was up. I have never seen a group of people feeling so entitled to home ownership. Homes are shelter. They are also expensive and require a crazy amount of time to maintain. Meanwhile bank account surpluses will keep one sheltered and fed. As Garth said, there are reasons that people can’t afford homes and blaming those who do is the wrong idea. I’d like to drive Ryan’s Porsche too, but my ‘06 CR-V works just fine.
#330 Loonie Doctor on 02.23.18 at 12:21 pm
—————————-
But the other way to look at it is that family with 2 working parents shells out more to live that lifestyle which can include an extra car/transit, parking, work wardrobe, lunches at work, and extra childcare costs. Would it then be fair to tax them the same as a family able to keep 1 parent at home and not have those extra costs?
350th?
I’ll take a Stan Steak with side of Freedom Fries please. Medium rare.
Tremble mere mortals over the marbling of my magnificent meat.
Let them eat cake!!
#283 millmech on 02.23.18 at 7:12 am
This is awesome, especially the people cheering for the demise of the Albertans who own Okanagan real estate. There is no real huge industry up there and a lot of ex Vancouverites who moved up there work in tourism jobs and construction jobs which are about to go bye bye. My friends who own property up there from Alberta spend on average $20k a month on vacationing, that is restaurants, wine purchases, food, etc. Now multiply that by what a thousand or two minimum, how much cash is going to be gone from the local economies, therefore expect the locals to make up the shortfall through higher local taxes and fees.
******************
The market was/is already in downward momentum. This was inevitable and has happened before. There are virtually no high paying jobs that can afford houses in Kelowna. Fake it till you make it – more like it.
Vancouver’s council passed a motion calling on the province to create a “flipping tax”
the new tax would apply to capital gains on properties that are bought and re-sold within a short period of time, without reasonable cause, particularly presale condos, prior to their completion.
Critics say unscrupulous speculators are buying condos, then using “assignment clauses” to sell their contract for the property before the units are completed — but not paying tax on the profit.
When a contract for a property is sold using an assignment clause, it also does not have a property transfer tax applied to it, a loophole Carr also wants to see closed.
https://globalnews.ca/news/4040242/vancouver-city-council-passes-motion-calling-for-real-estate-flipping-tax/
As assignment sale is the sale of a contract, not a deed. Of course property transfer tax should not apply. – Garth
#320 Mortgage brokers:
had a few with the gang a few days back, couple of mtg
brokers in the circle, word is that they have a non stop number of potential clients. funding is the issue or lack thereof the credit unions are picking the best of the formally bankable ones out of the basket. b lenders are charging 3-5 points above posted big five rates. private money is getting high single to low double digit rates all above on first mtgs. people looking for 2nds are getting nasty surprises 3rds are at credit card rates.
essentially a mortgage liquidity crunch developing in the words of one. the cheap and easy money boat has set sail it would seem that is what i hear in the Barrie On area anyway.
337 Mark on 02.23.18 at 12:40 pm
“BC is one of the biggest money laundering capitals in the world.”
Any proof of this? Why is it that when you look at BC RE, all you see is a sea of leverage and extreme debt? This definitely isn’t consistent with the concept that money is being laundered or imported from a’broad.
Some of the stories that get passed off here as money laundering are laughable, such as those involving casinos with low payout ratios.
———————————————-
hey mark, maybe you should caught up in your reading with much of the indepth, ground breaking reporting done by the likes of ian young, sam cooper, kathy tomlinson, andy yan, terry glavin, kerry gold, etc.
TCC.#190 HELOC Lending Crackdown? on 02.22.18 at 9:32 pm
Another product – CHIP reverse mortgages. Why are these dominating the airways at present?
____________________________________
Because the population is aging and there are a lot of retirees or soon to be retirees that are house rich and cash poor. Pretty simply really.
Capitulation II is an awesome sequel. Capitulation I “only” got 316 comments. Could there be a Capitulation III in the works?
I am all capitulated out. Can’t take any more socialist hordes. – Garth
edited:
337 Mark on 02.23.18 at 12:40 pm
“BC is one of the biggest money laundering capitals in the world.”
Any proof of this? Why is it that when you look at BC RE, all you see is a sea of leverage and extreme debt? This definitely isn’t consistent with the concept that money is being laundered or imported from a’broad.
Some of the stories that get passed off here as money laundering are laughable, such as those involving casinos with low payout ratios.
———————————————-
edited:
RE: ‘bc is the biggest money laundering capital in the world’…
sure I agree with your reply: that is debateable esp considering our population etc…but significant, esp in affecting local RE prices… that just might be, however.
please have a look at much of the indepth, ground breaking reporting done by the likes of ian young, sam cooper, kathy tomlinson, andy yan, terry glavin, kerry gold, etc.
Your comment is awaiting moderation
#220 Hot Oil Dollars on 02.22.18 at 10:32 pm
#203 Pissed Off in Alberta on 02.22.18 at 10:12 pm
So BC. you want to tax non-BC income tax paying people like us here in Alberta who own property in your province?
Calling on all Albertans to stand strong and start dumping BC Real Estate.
———–
Please don’t just dump it the regions specified in the tax, but everywhere!
Looking forward to less red license fleeing their winter wastelands fueled by formerly hot oil dollars.
I think I will get the ball rolling and start the process by spreading the word on social media!
—————————————————————-
Pretty sad state of affairs and way of thinking to be honest. I live in Calgary and love visiting BC. When there, I spend money and pay tax. My license plate has gotten me glares from people, and they don’t even know me. Most people are friendly but some hate me because of my license plate, not knowing I am originally from lefty Ontario and am more or less a lefty myself.
No oil dollars here and not fleeing my wasteland. Just enjoy spending time in different places in my home country that I love. You have let politicians brainwash you.
Higher mortgage rates, new borrowing regs and moronic household debt levels were bringing a market correction anyway. Political incompetence might make it Biblical.
“Praying for a real estate crash”
“The have-nots of housing are watching, mad as hell, as homeowners glory in their paper fortunes. And they’re starting to lash out.”
http://www.macleans.ca/economy/realestateeconomy/praying-for-a-real-estate-crash/
This is an old article, but I think it sums up the mood of BC voters who support the NDP budget. It probably won’t end well, since most revolutions spill some blood. However, it is the logical outcome from what came before.
go NDP! Go David Eby! finally.
okay enough housing talk. with rates rising I’m using XSQ for bonds – all high quality short term. I’ve been looking at ZST – Ultra Short Bonds.
Any thoughts guys? A mix of both?
Sort of funny desperate people in BC are trying refinance out more home equity.
They will have like a standard $1.2 million Vancouver mortgage.
The lenders run the numbers and say, oh sorry, you qualify for $350,000 in credit.
But because you are a good customer who has made all their payments the bank is willing to refinance your modest 1.2m Vancouver mortgage.
I see your old rate was 2.15% on a variable. The best rate we can offer you today is 5.4%. You will owe the bank, $64,800 in interest next year.
Did you know if you skip going to Starbucks you can save $3 a day?
Anbang is in hot water!
https://www.nytimes.com/2018/02/22/business/china-anbang-waldorf-astoria.html
I wonder what the reaction would be if BC does nothing about taxing Albertans with property there, BC goes into recession, then we say ok you can have a job here in Alberta Mr. Tradesman, but you have to pay a special tax for the privilege?
What a joke.
#40 Caleb Landry
Very well put Caleb Landry. When I first came to this blog a year ago I couldn’t wait to read Garth’s comments every day. I totally agreed with his views. It seems to me that these past six months Garth has been jumping from one side of the fence to the other back and forth on real estate and occasionally contradicting himself. I read this blog for comments such as yours and for this reason I really appreciate the fact that Garth has gone to a lot of work to provide this forum.
I have been consistent in saying government should not be promoting real estate bubbles nor instrumental in pricking them. Neither ends well. – Garth
“Critics say unscrupulous speculators are buying condos, then using “assignment clauses” to sell their contract for the property before the units are completed — but not paying tax on the profit.”
That’s really not ‘buying’ a condo. That’s contracting for its construction. If a contract of that nature is sold, its basically just like any other sale of a security interest. Yes, sometimes (but not always) there is profit, but the risk involved in a pre-construction condo is considerable and there needs to be compensation for taking that risk.
If a tax were to be applied to the sale of such contracts, other than the ordinary sort of income taxes that are applicable, such would be a profound disincentive for investors to invest in the supply of new units.
Thus, in a roundabout way, such a tax would actually drive up prices by driving down supply. Something the government is certainly keen to avoid, given that the belief is pervasive (although perhaps somewhat misguided) that there is insufficient numbers of housing units available to the marketplace.
If they want to attack the excess speculation and hoarding that is characteristic of the GVR RE marketplace, see my previous post on what they can do in terms of regulating the provincially regulated banking sector, and the Realtors themselves.
Can’t wait for T2’s next visit out west…. dress for success
I’m a lumberjack and I’m OK
I sleep all night and I work all day
I cut down trees, I skip and jump
I like to press wild flowers
I put on women’s clothing and hang around in bars
He cuts down trees, he skips and jumps
He likes to press wild flowers
He puts on women’s clothing and hangs around in bars
I’m a lumberjack and I’m OK
I sleep all night and I work all day
I cut down trees, I wear high heels
Suspendies and a bra
I wish I’d been a girlie, just like my dear Papa
#352 Democracy Is Mob Rule on 02.23.18 at 1:53 pm
Capitulation II is an awesome sequel. Capitulation I “only” got 316 comments. Could there be a Capitulation III in the works?
I am all capitulated out. Can’t take any more socialist hordes. – Garth
*******************
Last Chance Sale on Now! 40 % off **
Royal Contikki Tours invites you to join your host, acclaimed author, politician, and money wizard, Garth Turner on his farewell backtracking tour of Little India. Tour the under-serviced areas, and see how the vagrancy laws can boost your ROI. First 100 followers will a enjoy a complimentary virgin cocktail at Don Cherry’s.
**(up to)
“And yet, if Vancouver real estate prices dropped by 50% – plunging the province into recession – 98% of the population still could not afford a detached house.”
So even if the government crashes the housing market in Vancouver, it will STILL be significantly overvalued?
Not what I stated. – Garth
#16 Lisa Power on 02.22.18 at 5:17 pm
After having lived in whistler for two years and tried to buy into the market – it is impossible for Canadians to compete with people coming in from Hong Kong (where there is zero income tax) and laying out 3 Million plus for a house. They park their wife and kids here and commute back and forth during school holidays thus paying no Canadian income tax since the breadwinner does not “live” in BC. Locals cannot compete in this market. Prices have risen crazily over the last 4 years. A house listed for $900k 4 years ago just sold for 2.8M last month. I can afford $900k but not 3Million. I’m not looking for a mansion, just a 3 bedroom, 2 bath house. So i’m All for a crash since I cannot compete with people who have not paid income tax for the past 15 years.
Did you even read the post? Guess not. – Garth
——–
Sadly, I think it’s called selective exposure. Only sees what they want to see. Everything else is non existent
“346 TurnerNation on 02.23.18 at 1:05 pm
350th?
I’ll take a Stan Steak with side of Freedom Fries please. Medium rare.
Tremble mere mortals over the marbling of my magnificent meat.”
Looks like you fell short.
More sloppy joes for you instead.
…I made them extrrra sloppy for you!
MF
Let them eat cake!!
#322 Ronaldo,
No rush,patience is a virtue,looking to get a house for about 120k-150k each,I know my numbers, market and local incomes well.Looking forward to owning houses that pay 1% of purchase price in monthly rent.
#289 Paul on 02.23.18 at 8:09 am
#121
Just wait until the Indian Prime Minister comes for a state visit, dressed in Canadian flannel, toque, woolen work pants and carrying a double bladed axe to every photo op.
_____________________
9/10 Funny!
The NDP will have to walk back the all encompassing province wide 2% speculation tax. Carole James
“misspoke”.
***************
I wonder how the corrupted BC Liberals are gonna walk back all that they have done to BC, allowing unprecedented money laundering to balance their budgets. I am not a fan of any political gang call them all out. Put responsibility at the feet of those who created this mess.
And poor realtors worry about Albertans leaving BC. BC is and was on a downturn prior to this announcement. The inevitable was already happening. I morn the loss of critical thinking among adults. FFS!
Pink Snow falling in Vancouver.
I wrote a post last night and one of my points was the speculators have had plenty of time to make an exit.
These guys are a good example.
They have been trying to sell since October 2016.
They purchased this place for 3m and were originally trying to get the best part of 4m
16 months later and 3 price reductions,they just re-listed for 2.89 and will most likely be delighted to escape with a Pink Draw.
My posts seem to get cheered on by people hoping to one day vulch.
The flip side that most people seem to have not considered is that homeowners thinking about exiting the market and speculators can also see what’s going on.
Or you can listen to your realtor…
M43BC
2017-03-29 : $3,499,000
2017-05-11 : $3,199,000
2016-10-31 : $3,980,000
2018-02-19 : $2,899,000
Paid 3 million
https://www.zolo.ca/west-vancouver-real-estate/2050-russet-way
https://evaluebc.bcassessment.ca/Property.aspx?_oa=QTAwMDAyOTVBQg==
$$$$$$$$$$$$$$$$$$$$$$$$$$$$
Feel free to make a donation.
Flop For Fox Fund…
http://www.terryfox.org/get-involved/ways-to-give/
#337 Mark on 02.23.18 at 12:40 pm
“BC is one of the biggest money laundering capitals in the world.”
Any proof of this? Why is it that when you look at BC RE, all you see is a sea of leverage and extreme debt? This definitely isn’t consistent with the concept that money is being laundered or imported from a’broad.
Some of the stories that get passed off here as money laundering are laughable, such as those involving casinos with low payout ratios.
*******************
The tip of the iceberg Mark…patience and all the stories will come out. Check into the company Advantage Canada and the fact the NY Times was calling them out over a year ago. Who ran this company…a former BC Liberal Minister who tried to bring in the HST on a lie.
Research is your friend?
I am all capitulated out. Can’t take any more socialist hordes. – Garth
++++++++++++++++++++++++++++++++
I honestly don’t know you can stomach the bilge. You are going to have to move to another country to avoid them Garth. Canada is moving ever farther to the left, as we can see in the microcosm of the blog comments.
Maybe the mills were always going to turn from mama to government for solutions, or maybe it was the housing prices that pushed some of them over the edge. Either way, the answer to every question about how to do/get something is “…the government needs to…”
All the lefties like to point out how great Norway (due to oil…) or Sweden are – socialist paradises! But they never think of how those countries would fair if they shared a border with the much-lower-tax & go-go business USA.
We are about to find out…
#52 Dog in The Fight on 02.22.18 at 6:03 pm
I voted NDP so they would do exactly what the NDP has done. If they didn’t I vote Green. This is our fight and our children’s future we are protecting. Folks without children, and those from outside BC do not have a dog in the fight and should shut up.
—–
So much for teaching your kids to work hard earn their worth. This is a great way to tell them, if you don’t like something or want something others have, whine about it. Good parenting.
In BC we are all about equality. We are willing to screw you, no mater where you come from. Social justice at it’s finest.
“Taxing them this hard, without recourse, is purely a vindictive tax grab from those who are politically voiceless. – Garth”
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I love how you make this sound like a bad thing.
Average, politically voiceless Joes mercilessly taxing rich people without recourse sounds awesome.
A guy in Alberta with a mortgaged cabin in BC who pays Canadian income taxes ain’t necessarily rich. This is not class warfare. – Garth
#345 Bottoms Up
Assuming that you need two cars for two jobs is like assuming a stay at home parent needs a car to shuttle the kids while the other works. Still two cars. Some people live close to work. Some bike – I just biked 32km to work and back. Should I pay more tax because my lifestyle choice saved me money on gas and parking? People don’t need to buy their lunch at work – that is a choice. Thing is, there is lots of variability in people’s circumstances and also in their choices. Taxing people more because they make a choice that saves them money compared to another alternative or works better for them without harming anyone else is silly and intrusive to how people run their households.
On the childcare issue. Affordable childcare would help all parents and may tips the scales in favour of two parents working instead of one for some families by improving their options. The difference in approach is that that is trying to lift someone up and improve their ootions where the current tax approach is to try to drag people down. Just my opinion, but I can fully appreciate that others may view it differently.
I’ll bet anyone 100 bucks that the BC Liberals are toast for the next 2 elections. Any takers? Garth?
I quite often get up in the morning and say to myself…
No matter what happens today as long as you don’t get post 369 everything’s gonna be o.k…
M43BC
#372 Overheardyou
So much for teaching your kids to work hard earn their worth. This is a great way to tell them, if you don’t like something or want something others have, whine about it. Good parenting.
No don’t whine about it, do something. Voting NDP was doing something. But also give money to them, helping organize and drive people to the polls. They saw me do this for the Reform party, and they saw me do it for the NDP. When something is corrupt, evil and self serving it’s time for it to be replaced.
#45 Dumboh
last time i checked New Zealand is a free society and they have banned foreign ownership
So they are less free. – Garth
Read the article today and no wonder why NDP won in BC. Housing is not a stock market and government should address the concern of the local first. The excuse of “free society” just doesn’t cut it for me.
we are less free because there are restrictions on foreigners to buy RE?!
I think the opposite is true: we have more freedom as these restrictions will increase consumer choice for Canadians, arguably lead to lower prices, which means less debt slaves=more freedom
I give up. Build your wall. Enjoy. – Garth
#375 morrey on 02.23.18 at 3:24 pm
I’ll bet anyone 100 bucks that the BC Liberals are toast for the next 2 elections. Any takers? Garth?
The Liberals will have to change their name to something new to get elected … maybe … Social Credit or something.
A guy in Alberta with a mortgaged cabin in BC who pays Canadian income taxes ain’t necessarily rich. This is not class warfare. – Garth
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It’s always been class warfare, Garth.
Except when the rich eat the poor it’s simply called business as usual. You only start hearing cries of “class warfare” when the poor dare protest their lot.
Taxing a fellow Canadian who has owned a cabin for years and pays 100% of his taxes is pure confiscation. He’s not eating you. Surely you cannot be proud of that. – Garth
#345 Bottoms Up
You make a valid point, but the extra tax burden on some single income households far exceeds the costs you mentioned. My original point still stands, the current tax rules punish households where one spouse earns more than the other.
If you look at it from a Macro level, allowing married couples to split income will actually put upward pressure on wages. A large percentage of individuals making over 150k will elect to have a spouse at home. Removing enough from the labour market will increase competition for employees, reduce unemployment rates and open up more spots in daycare facilities.
Any Canadian with two functioning brain cells and the means should be planning to leave the collectivist nightmare that is becoming Canada – it’s only going to get worse. If Trudeau or the NDP wins the next election it will permanently seal our exit from Canukistan.
I bet SCM 100 surf clams that we break 400 today without him. Help me out.
Germany beat Canada today in the hockey semi-final. Hockey!
We are doomed.
As one of the other bloggers said earlier…
If we had a central Banker with the proper balls, he would have stopped dithering and raise interest rates appropriately 2 years ago. That would have clearly thwarted the hell that Canadians are in now. It was him and only him that had the tools to make the difference… But of course he dithered.
#386 John Dough on 02.23.18 at 4:09 pm
I bet SCM 100 surf clams that we break 400 today without him. Help me out.
OK … I’ll raise you a geoduck.
Germany beat Canada today in the hockey semi-final. Hockey!
We are doomed.
=========================
Canada did not play its NHL stars.
Still a reality check. That we are not exceptional.
The way the game went though was disturbing.
Emotional undisciplined headless chicken (like Canadian real estate) against a relative well organized machine, the Germans.
It always amuses me when somebody looks at the Germans, French, English from above/from a position of superiority.
#388 Cto on 02.23.18 at 4:41 pm
As one of the other bloggers said earlier…
If we had a central Banker with the proper balls, he would have stopped dithering and raise interest rates appropriately 2 years ago. That would have clearly thwarted the hell that Canadians are in now. It was him and only him that had the tools to make the difference… But of course he dithered.
————————–
Poloz? Balls?
Sigh.
#383 SunShowers on 02.23.18 at 3:55 pm
Taxing a fellow Canadian who has owned a cabin for years and pays 100% of his taxes is pure confiscation. He’s not eating you. Surely you cannot be proud of that. – Garth
———-
If they fix the tax so that it won’t penalize grandpa for keeping the vacation home in the family for the last 40 years, while living on a fixed pension in another province, will you be in favour of the new speculation tax?
———-
#386 John Dough on 02.23.18 at 4:09 pm
I see your bet of a 100 surf clams and double it. It’s been a while since the entire blog has been on the same page. These nonsensical home prices that do not reflect the income of the people who own the homes need to end in this country.
I say we keep raising interest rates until the tide goes out and we find out which investors/speculators are swimming naked.
#371 PastThePeak on 02.23.18 at 3:10 pm
I am all capitulated out. Can’t take any more socialist hordes. – Garth
++++++++++++++++++++++++++++++++
I honestly don’t know you can stomach the bilge. You are going to have to move to another country to avoid them Garth. Canada is moving ever farther to the left, as we can see in the microcosm of the blog comments.
Maybe the mills were always going to turn from mama to government for solutions, or maybe it was the housing prices that pushed some of them over the edge. Either way, the answer to every question about how to do/get something is “…the government needs to…”
All the lefties like to point out how great Norway (due to oil…) or Sweden are – socialist paradises! But they never think of how those countries would fair if they shared a border with the much-lower-tax & go-go business USA.
We are about to find out…
—————————–
If the vikings inhibited Canada there would have been no US.
Only 9 more to go!
Even Stan can play with us today!
Taxing a fellow Canadian who has owned a cabin for years and pays 100% of his taxes is pure confiscation. He’s not eating you. Surely you cannot be proud of that. – Garth
——————————————
Just because a wealthy person can afford to pay the full, vastly inflated price (including taxes) of something in order to hoard it during a shortage does not make them some kind of moral paragon.
You have a problem. – Garth
#385 Mac on 02.23.18 at 4:04 pm
Any Canadian with two functioning brain cells and the means should be planning to leave the collectivist nightmare that is becoming Canada – it’s only going to get worse. If Trudeau or the NDP wins the next election it will permanently seal our exit from Canukistan.
——————————-
That (Canadian with two functioning AND CONNECTED brain cells) is quickly melting tiny minority of the peoplekind living here.
the rest like T2.
#386 John Dough on 02.23.18 at 4:09 pm
JT having a talk with the MP who invited the worst guest imaginable.
Probably not a good meeting.
#393 Stan Brooks on 02.23.18 at 4:51 pm
#371 PastThePeak on 02.23.18 at 3:10 pm
I am all capitulated out. Can’t take any more socialist hordes. – Garth
++++++++++++++++++++++++++++++++
I honestly don’t know you can stomach the bilge. You are going to have to move to another country to avoid them Garth. Canada is moving ever farther to the left, as we can see in the microcosm of the blog comments..
We are about to find out…
—————————–
If the vikings inhibited Canada there would have been no US.
_——–+++-
The vikings were not inhibited at all, ask the women.
We’re so close. Let’s not loose this one!
Luxury!
Sing your hearts out. You deserve it.
Garth, I think foreign owners mostly park their money in RE but not with intention to help our economy or enrich Canadians. They are investing for their own selfish reasons and potentially inflating prices and making Canadians going FOMO even more. Yes, real estate industry loves it and all the trades, staging people, agents etc, but most other citizens don’t appreciate it as it just inflates RE prices. It’s not right for us to compete with world income for RE in Canada. I would say ban foreign ownership of residential real estate and let them play with commercial. This way, basic human need like shelter, will be less prone to price increases of these proportions. Or, ban foreign ownership or residential ownership temporarily. It can ALWAYS be removed when things settle down. Also, tax RE flipping progressively, foreign and domestic, so people go invest into stock market like they should. I agree, Government should not be intervening in times likes this, but only if Government (Liberals) was more proactive and preventing this situation. And we all know it wasn’t. So, no choice. I agree that they should not be taxing owners from other provinces when holding RE in BC. Also, empty tax home is too much for people who only have one more property for leisure, family, work. I would take it away and replace it with flipping tax. That would calm the prices down. Thanks for your hard work and wonderful blog.
Funny how everyone is screaming now that the government is intervening to cool things off but NO ONE made a sound when the corrupt liberals came in power back in 01, and like the rest of the corrupt governments at the time, rolled back any kind of regulation regarding lending and investing!! Oh 40 yr mortgages, zero down? No problem!
This problem has been going on too long and while it may seem heavy handed its time for the gov’t to step in and try to return some sense into Real Estate. It’s obvious self regulation and people cannot be trusted and we get the issues we see in the GTA and Vancouver, Victoria because of it. Regulations and policy should have never been rolled back in the first place and this is putting things back where they should be. So the market goes down, too bad. It’s out of control. Good job NDP.
@ IHCTD9
Ok no problem…but realize that if you tell us to leave that you have no right to…nurses, technical services, garbage collection, wastewater services, chefs and fine dining…the middle and working classes keep a city running. We are not asking for McMansions, affordable basic rentals in non-central areas are not too much to ask. It’s worth pointing out that rentals in the far flung GTA come with similar price tags. Wish us away if you want but realize exactly what you are doing. I worked my way up from nothing to the top 5% of earners and I’m no whiner but Toronto is eating itself. I give it a year and I leave…be careful what you wish for.
@ IHCTD9
Funny that real world class cities with housing constraints (Singapore, Hong Kong) have costly but doable rentals set aside for the middle class and working people that a city requires to function but can’t make the blindingly high incomes that “market” housing requires.
Good luck with true self sufficiency though…let me know how it goes after your first self-done hydro transformer repair.
Wow 406 posts. Garth must be touching some nerves…..
Garth and I disagree on HAM. But for sure the coming years will show if HAM ever was or is still a factor. With rising interest rates, and crazy debt levels, only those without equity will be forced to sell. No person who buys a house outright with cash is going to sell it in downturn. The only way the market really tanks is if supply and demand move in opposite directions at the same time. If HAM is there, the market won’t tank. If HAM is not, look out below, as there won’t be enough HAM to save our indebted mess we have created ourselves.
Apparently I am a 1%’er. It doesn’t feel like it to me, but then everyone must be in the same boat in YVR; house prices are unaffordable.
I also fail to believe that people in 20 years will ask: Hey, why is that guy a millionaire? Answer: Oh yes, he bought a SFH home in 2012 and was able to retire so much quicker than the rest of us……
Hahaha, where will that greater fool come from in 20 years to buy his house????
“You do not have the right to own real estate, no matter what the Dippers make you believe. – Garth”
Due to some terms in the treaties with the natives Canadians probably don’t have any real property rights at all even if we were to pay for real estate in full. Canadian territory is essentially leased to the Crown by the natives and the Crown sold or leased some of that land to private interests who think they really do own what they paid for. If all of this is the case then it is highly irrational for people to pay so much for so little when they can not actually own it for real at all. Canada didn’t conquer the territory it leased it instead and that is the problem. Otherwise there would be no need for Indian affairs, reservations or money and goods transfers to the natives and they would have to follow the same laws as the rest of us especially when it comes to hunting and fishing. Then again in the long term this is academic because when the next major glaciation sets in the game is over and Canadians and their land lords are either staying or they are living. Canada and it’s real estate will be worth nothing.
Viva NDP!
The start doing something to stop speculation and money laundering.
On the other hand, I am afraid it is not enough.
The greed and stupidity are not measurable, no way to ‘model’ them. Prices will likely to not be affected.