The wall

Just over 4.5 million people live in New Zealand, a weird little place of beauty. That’s twice the population of Greater Vancouver which is, well, beautifully weird. In Auckland (1.6 million) the average house costs $800,000, and the average family’s median income is $91,600 (NZ$). That’s a ratio of 11.6 – seriously unaffordable by international standards.

By the way, the home ownership ratio in NZ is 63.2%, the lowest in 66 years. It’s not a happy place when it comes to real estate, especially with five-year mortgages at 5.7% and floating rates even higher. No wonder the new government got elected in part last autumn by promising to “do something meaningful” about the cost of houses.

Vancouver? Just over 2.6 million people there, with an almost identical rate of home ownership – 64%. The median household income in the region is almost exactly the same as Auckland ($72,000 C$), but the average property sold last month for $1,093,000. The ratio of price-to-income is 15. Off the charts.

One reason may be the dramatically lower cost of credit in Canada. Five-year mortgages are available here at little more than 3%, and floating-rate loans below that. However, the household debt-to-income ratio is almost identical for the two countries: 166% in NZ and 168% here. Of course when it comes to the GTA or YVR, we know the majority of people buying $1 million+ properties have a ratio topping 450%.

In short, both societies are addicted to real estate, speculate in it and seem willing to pickle themselves in loans to get it.

But there’s another similarity worth mentioning. The wheels are wobbly.

Sales have stalled in Auckland (830 last month) and average prices have fallen 2% year/year. Says the major bank, ASB: “Auckland continues to look more like a buyers’ market every month. We see a risk that annual house price growth in Auckland slips into negative territory as uncertainty and affordability constraints continue to crimp activity.” The decline has been attributed to tighter government regs, including lower alllowable loan-to-value ratios and curbs on speculation.

In Van, well, it’s a tough time to be a realtor with an Audi lease hanging over your head.

“Both average and median sale prices are now down 10% from a year ago, but it is the complete cratering of actual transactions – to the lowest level in DECADES – that is the real point here.  Remember, price leads volume…,” says local venture capitalist and blog dog Hans Knapp. “So… the back half of this year could be where reality finally overtakes the misplaced expectations of would-be sellers, and material price cuts ensue.”

The numbers tell the tale. Lately this blog reported the desolation, moaning and gnashing on the Westside. Elsewhere, the same. In Kits, sales have tanked 46%. In North Van they’re down 22% with average prices off $250,000 in the past year. In West Van last month there were 37% fewer deals struck, while listings are up 32% and prices down 11.6%.

Like NZ, tighter regulations (including the mortgage stress test) are taking a toll. But, mostly, houses are unaffordable to the average family, resulting in cascading sales and (inevitably) falling values – exacerbated by local and provincial housing taxes which are extreme by national standards.

Yes, there’s something else citizens of Auckland and Vancouver share. That’s a deep, ingrained, visceral belief they’re not actually to blame for the prices of houses they sell each other. Nope, it’s evil foreigners. In BC recent polls have found 80% of the locals think offshore buyers are ruining house prices, even though 95% of BC sales are among existing residents. In NZ the foreign buyer rate is 3.8%, but climbs to about 20% in certain Auckland neighborhoods (about the same as in select areas of YVR during 2017).

In both jurisdictions (BC and NZ) governments were elected in 2017 largely on a populist pledge to make homes affordable, and do so by wielding the blunt hammer of xenophobia. They catered to public sentiment – assuaged it, amplified it, milked it, and won. In BC the NDP-Green coalition goosed the tax on foreign buyers to 20%, extended its scope brought in a new speculation tax on non-resident owners. In NZ, as of this week, something more radical – a ban on outsiders.

All this is consistent with the times in which we live. The forces of nationalism, populism and protectionism are alive as never before in several generations. Many people crave walls, distrust those not of their tribe, and believe barriers will restore things that have been erased. Like one-career households or affordable homes on leafy streets. It’s at the very root of Making America Great Again, embodied by the us-and-them American president.

Will it work?

If foreigners were truly the main cause of too-expensive properties in Auckland or Vancouver, then probably. If they’re a sideshow, minor influence or shameless political scapegoat, probably not. The real estate market will go down if people expect it to, and vice versa. What will be indelible is the stain.

175 comments ↓

#1 Lost...but not leased on 08.16.18 at 4:49 pm

Pyrrzztt!

PS buy Nanavut RE

#2 NotLegalAdvice on 08.16.18 at 4:58 pm

With all the fake news circulating around these days, people believe the market has recovered and will continue to go up up up. Oh, how wrong they are.

#3 Dusty on 08.16.18 at 4:59 pm

Brilliant comparison between the Trump administration and the Horgan government. Rather than mocking our neighbors to the south we ought to be looking in the mirror.

#4 red_falcon on 08.16.18 at 5:04 pm

dogs! and um, first!

#5 YVR - 60% crash! on 08.16.18 at 5:06 pm

The foreigners buyer is not a problems in YVR or GTA.
The brand new 800k passport Canadian are the problems.
Of course, no politicians have the guts to bring it up.
The speculator tax is the closest solution they can come up with.

#6 dakkie on 08.16.18 at 5:12 pm

New loan programs target home buyers with just 3% down—or less

http://www.investmentwatchblog.com/new-loan-programs-target-home-buyers-with-just-3-down-or-less/

#7 -=jwk=- on 08.16.18 at 5:16 pm

It wont’ matter, the flow out of China is unstoppable. There will be home buying service in NZ that will happily buy whatever house you want through a local holding company. Done. Remember these are cash buyers, they don’t care about financing or things like that. 95% *cough* ‘local’. Sure. That PO box in in Van sure buys a lot of houses!

#8 FOUR FINGERS WATSON on 08.16.18 at 5:21 pm

Kelowna market conditions per one of the large brokerages:

Market conditions continue to soften and shift to a balanced market. Active inventory is up 22% creating a competitive environment for sellers. More notably, is the sales volume has been down 5 consecutive months averaging 25% lower than 2017.
Sales: Mar 2018/2017 -30% | April 2018/2017 -15% | May 2018/2017 -30% | June 2018/2017 -22% | July 2018/2017 -30%.

The Bank of Canada raised its interest rate July 11th for the second time this year dampening home buyer activity coupled with more restrictive mortgage requirements and proposed speculation tax.

Days on Market remain consistent with 2017. Below are the average days on market for each category: Residential: 51 | Condo: 47 | Townhouse: 52 | Lots: 119 | Mobile: 59

Prices remain resilient to the changing market so far. Expect to pay 7-8% more for your average residential home now $726,060, 8% more for your average condo $349,955, 9% more for your average townhouse $493,654.

Conditions still continue to favour sellers more than buyers. Negotiations remain tight and prices are holding steady, however time and selection is now on the buyers’ side.

#9 Cliff Dunlop on 08.16.18 at 5:25 pm

Don’t worry Garth. We’ll just wait a couple of decades and then send Justin out to apologize to the foreign buyers we froze out of our markets.

#10 ds on 08.16.18 at 5:27 pm

The forces of nationalism, populism and protectionism are alive as never before for a good reason. Take South Africa for example where naivety and good intention thought breaking down the walls would be for the greater good. Perhaps you can take your liberal view to Europe that is now dealing with “surprising” issues that can directly be tied to foreign imported culture and values out of control – nothing to see here, Brexit is a fad. But don’t stop there, please go and school the USA too before they mistakenly protect their identity and preserve and rebuild what made America great. And please do all of this from a protected seat with the elite unaffected by the reality of what is gripping the Western world on the cold hard ground. Go boy!

#11 Stealth on 08.16.18 at 5:30 pm

Garth ,
This was definitely not written by you.
It is too nice, too polished, too highschool-ish.

On vacation ?

I can do nice. Now buzz off. – Garth

#12 Kelsey on 08.16.18 at 5:33 pm

Last time I checked Canucks and Kiwis can’t buy real estate in China, so I’m not quite sure how we’re the xenophobic ones for expecting reciprocal trade arrangements.

#13 FOUR FINGERS WATSON on 08.16.18 at 5:33 pm

What will be indelible is the stain.
………………………………..

Go ahead. Stain me. I just want my grandkids to be able to buy a home in their own home town.

#14 After Communism on 08.16.18 at 5:51 pm

Anti-tribalism erases nations, opens borders, and facilitates the construction of the new model of world semi-communist government, slightly different than the old USSR model. The move left by Canada is not millenials, by itself.

#15 Musty Basement Dweller on 08.16.18 at 5:52 pm

“In BC recent polls have found 80% of the locals think offshore buyers are ruining house prices”
We think that way because it is true, just talk to anyone who looks at the transaction deals and details come across their desk. unless you believe that all of the unknown or numbered company buyers are hard-working average wage making Vancouver ites.
The official foreign buyer percentage numbers are a sham solely composed of some small percentage of honest but stupid foreign buyers.
but it does seem we’re coming about on this topic and the NDP government is scaring off Foreign money in Vancouver or at least has started to a little.

You are a walking stereotype. – Garth

#16 Vancourerite on 08.16.18 at 5:55 pm

My thoughts on the foreign buyer tax are if you dont work and pay taxed here; taxes that pay for the infrastructure of the region, then you should pay higher taxes. The house wouldn’t be worth anything without all the roads, hospitals and infrastructure around it that local taxpayers pay into.

No idea why Garth turns this into a racial issue when its a fairness issue.

#17 Smartalox on 08.16.18 at 6:08 pm

Coming in September!

The final, epic battle for the ages….

REALTY vs. REALITY

the facts will not be changed, to support the suppositions.

#18 Mattl on 08.16.18 at 6:13 pm

The market in YVR ground to a halt right after the foreign buyers tax came in. Markets hit the hardest were those that had the highest proportion of foreign buyers. Post foreign buyers tax condo presales, exempt from the tax, went off like a rocket.

Conclusion? Foreign buyers have had little impact on YVR house prices.

You don’t have to be a racist or xenophobe, or support these taxes, to acknowledge that HAM had a significant impact on the run up in prices in YVR.

Garth you are dead wrong on this one, foreign buyers along with cheap credit played a large role in yvr house prices.

Sales activity and prices fall when people perceive the market is changing. Behaviour 101. You will learn in time it was FOMO, not scary Chinese dudes, that wilted. – Garth

#19 Edward Bear on 08.16.18 at 6:14 pm

#10 “ds”
Yikes man, what do the initials “ds” stand for, Der Sturmer? Listen to yourself. Your idea of the good old days with women, children and “coloured folk” toeing your line, all thinking the same, swallowing the old authoritarian church dogma and poor people knowing their place isn’t what most of the world was are outnumbered. People aren’t going back there. Ever. Besides this is a column on finance and real estate so peddle your trollish papers elsewhere.

#20 Don't get your Kelowna RE News from a Brokerage on 08.16.18 at 6:14 pm

The Kelowna market has entered buyers territory with over a 6 month supply at present and holding.

Month-over-Month Average Change from July to August: -7.22%
Average Change Amount Per Home:-$98,322.33

August is looking like around a -10% average on current price cuts

Wait until the fall market kicks in with listings.

For sale signs have been hanging all Summer with no activity.

Lets have a look at the Matrix for August:

765 Barnaby Road, Kelowna – Price Change: – $180,000.00 -14%

368 Quilchena Drive, Kelowna – Change: – $100,000.00 -7%

#5 1150 Mission Ridge Road, Kelowna – Change: – $150,000.00 -9%

#203 2900 Abbott Street, Kelowna – Change: – $135,001.00 -10%

2755 Thacker Drive, West Kelowna – Change: – $151,000.00 -13%

#21 Oakville Stinks on 08.16.18 at 6:16 pm

Two of my friends haven’t been able to sell their homes in the last year and they were both on sale for over a year. Houses were Richmond Hill and Oakville. So they put them up for rent…they were snapped up quick.

If prices are going down and potential buyers opt to rent, that means they are saving thousands of dollars a month! Or living for free.

#22 Crroked Richmond BC Mayor Given the Peoples Elbow by Hulk Horgan on 08.16.18 at 6:18 pm

BC government to overrule Richmond’s decision, will end mega mansion on farm land.

Another thumbs up for the NDP. Keep it rolling.

#23 Lost...but not leased on 08.16.18 at 6:23 pm

Re: BC NDP…

These commie- whackos are now proposing ALR house size limits..overriding the previous discretion of local govts.

People just dont get that these default govts use their short term window of voter pre-epiphany opportunity to slam dunk their COMMUNIST-IQUE bucket list of legislation and policies.

W..A..K… E TF U….P…

#24 NDP Report Card on 08.16.18 at 6:24 pm

Foreign buying was as high as 18% in Richmond pre NDP. Locals tried to match it dollar for dollar.

How about now?

BC government data shows 1% of all transactions went to foreign buyers through the first half of 2018.

And now all of the sudden BC Real Estate is tumbling?

Not hard to spot the connection there.

A+ to the NDP on reclaiming BC.

When people perceive markets have stopped rising, they lose FOMO. Then the market falls. It could be rising mortgage rates, tighter mortgage regs, higher taxes, foreign buyer tax etc. Take your blinkers off. There is no one single reason you can’t afford a home. – Garth

#25 NoName on 08.16.18 at 6:25 pm

Interesting read
https://www.tbwns.com/2018/08/13/the-bears-lair-chinas-coming-austrian-collapse/

#26 Angie on 08.16.18 at 6:26 pm

In a recent discussion about choosing variable or fixed interest rates a friend told me she chose variable because her payment never changes even if rates go up; the interest juat gets added to the end of the mortgage. Not wanting to gwt in a debate I just kept quiet, but I am really curious: would they be paying interest on interest and at the same time extending the length of the mortgage? How does that work? It sounds like something that is a good idea in a decreasing rate environment so you pay more on the principal if rates go down but a terrible idea for mortgage holders when rates go up.

#27 jas on 08.16.18 at 6:28 pm

Garth
Prove me wrong by publishing my previous two comments that this blog is not just a vehicle for you to promote your business but it is also about informing/educating the readers.

Read it. Don’t read it. Your choice. Adios. – Garth

#28 Alberta Ed on 08.16.18 at 6:30 pm

What sensible foreigner would want to buy property in Comrade Horgan’s People’s Republic of British Columbia? (For that matter, what sensible Canadian?)

#29 renter in Surrey on 08.16.18 at 6:32 pm

Garth is right. It’s all local buyers responsible for runaway prices.

For example look and these nine students with no income who bought $57-million worth of single-family homes in Vancouver’s tony Point Grey neighbourhood. The properties include a $31-million mansion that belonged to Canaccord Genuity founder Peter Brown.

https://www.theglobeandmail.com/news/british-columbia/incomeless-students-spent-57-million-on-vancouver-homes-in-past-two-years/article31892652/

Exaggeration makes your point even weaker than it started out being. – Garth

#30 Suriya on 08.16.18 at 6:34 pm

I used to live in Auckland from 2008 to 2013. You forgot to mention that both NZ and Vancouver suffer from the leaky house syndrome. The majority of the houses in NZ do not have central heating. They are damp, cold, moldy and the quality of the homes for what you pay for is not worth it.

#31 AB on 08.16.18 at 6:37 pm

#19 Edward Bear
My gosh, you sure use a lot of different names on this website to try and push your Socialist agenda on others.
Back to you.

#32 ALFRED E. NEUMAN on 08.16.18 at 6:43 pm

With the standard “live with no regrets” realturds hype, even a 3 – 5% foreign influence aided lots to escalate the FOMO pricing frenzy. It wasn’t their fault.

You can be damned sure it was frequently (always) mentioned as an ‘act fast and make your best offer early’ or, uh (shrug), prompter.

And don’t forget a large deposit to show you’re serious.

But then, the R/E industry geniuses even added scheduled ‘Offer Presentation’ events to the circus, ..

.. where integrity and manners end at the money.

So I look forward to soon, scooping up a repossessed Audi or Mercedes. A silver or white one with low clicks.

Gonna name it “Karma”.

#33 It is the government-bank game stupid on 08.16.18 at 6:43 pm

Here is the recipe called house cake:

1 part loose lending.

1 part low rates.

Mix together.

Then add 1 part dirty money (and watch this thing cook)

Then wait 2 years as prices rocket and people all over get turned upside down, displaced, relocated, equity extractions, boomer excitement, etc.

The cake tasted good but left you with food poisoning. Let the unintended consequences from this experimental strategy orchestrated by banks and government begin.

#34 Polozi Scheme on 08.16.18 at 6:44 pm

Globalization is not working for the majority. It does work great though for those who earn big money and are never taxed on it and spend it in the another jurisdiction where they only have to compete with locals/nationals that are taxed to the hilt.

#35 Raincouver on 08.16.18 at 6:50 pm

You can’t underestimate how foreign buyers consisting of about 10% of the market can create a FOMO frenzy by paying more than asking, 100% cash, sight unseen, no inspection, no subjects etc affecting an entire real estate market at every level.

The Real Estate Machine and media is primed and ready to expertly leverage those facts into a FOMO frenzy among the Locals!! This is the key impact.

The foreign buyers may represent a relatively “small” percentage, but this kind of impact is very powerful and cannot be understated. Those of us who actually live here know full well.

#36 Danny on 08.16.18 at 6:57 pm

Very well explained.
Too many people these days believe only what they think by their “gut only ” and have an empty head and are not interested in truthful information….as you just explained.

But I can’t blame most ordinary people these days when politicians don’t want to stop campaigning instead of governing for all.

Look At Trump with his tribal rallies and Ford with his “skit interviews” by his own staff. They only represent the minority of voters yet feel “powerful “.

Garth you hit the nail on the head today again by saying:
“It’s at the very root of Making America Great Again, embodied by the us-and-them American president.”

Mussolini also fooled his people the same way….”make Italy Great Again “….reminding them of the ” Roman Empire “…which was not ever coming back….yet the people wore black vests then and sang of greatness……..today it is “red caps “…and simple people just scream stupidly……..as Trump the clown presents his
” Fox News skit”… ….nothing knew…..just hot air self inflation with divisive hatred spewing. The press is not the enemy.

Everybody who breaths in too much air will soon get a belly ache….and everyone knows how painful they are until the gas escapes from the rear.

Garth thanks for reminding us….about human nature to blame others for our own wrong doings.

#37 The Cynic on 08.16.18 at 7:02 pm

“#10 ds on 08.16.18 at 5:27 pm
The forces of nationalism, populism and protectionism are alive as never before for a good reason. Take South Africa for example where naivety and good intention thought breaking down the walls would be for the greater good. Perhaps you can take your liberal view to Europe that is now dealing with “surprising” issues that can directly be tied to foreign imported culture and values out of control – nothing to see here, Brexit is a fad. But don’t stop there, please go and school the USA too before they mistakenly protect their identity and preserve and rebuild what made America great. And please do all of this from a protected seat with the elite unaffected by the reality of what is gripping the Western world on the cold hard ground. Go boy!”

What’s your point exactly that you’re hiding behind this wall of text? That white people matter more than others?

Don’t forget, white people weren’t the first people on this continent.

#38 Dave in Kincardine on 08.16.18 at 7:02 pm

What is the matter with foreigners buying houses? They don’t live in the things and thus don’t use our facilities. We win by collecting the taxes for services they don’t use.
Yippee.

#39 yvr_lurker on 08.16.18 at 7:17 pm

Although my west side place in YVR is paid off, I am perhaps one of the few who are delighted that prices for places >1.0M are clearly coming down. Give it 5 years and we’ll see where we are at with prices. Keep the taxes on speculation high, restrict foreign purchases, and then perhaps our kids will be able to afford living in the lower mainland where more high-skilled labor jobs are available. The 5% foreign factor quoted is for sure a complete underestimate due to all the ways to hide true ownership. Hopefully Eby and Co. will close this loophole, as part of his effort to curb corruption (the money laundering issue which the LIBERALS did zilch about, is just one facet of this). Frankly, if the NDP followed Weaver and simply did an outright ban just like in New Zealand, I would be delighted. Let’s revisit this issue in a few years, and see if where we are after the market all slowly unwinds. If the Feds helped and killed the BS 800K passport program that would also be fantastic.

#40 Stone on 08.16.18 at 7:18 pm

#5 YVR – 60% crash! on 08.16.18 at 5:06 pm
The foreigners buyer is not a problems in YVR or GTA.
The brand new 800k passport Canadian are the problems.
Of course, no politicians have the guts to bring it up.
The speculator tax is the closest solution they can come up with.

———

You bring up a good point which I find very valid. You have someone who came from outside of Canada and invested $800,000 into the Canadian economy. That $800,000 then funnels throughout our economy creating jobs and making profits for companies. Workers and businesses pay taxes on those wages and profit which then is used to build infrastructure and provide social services to the general population.

That means that Canada benefited from a net inflow of $800,000 that was not there before. It’s the same as when foreigners invest in our stock market. Prices go up and everyone cheers.

Are most people blind to the benefits foreign investment in our country in its various forms brings?

#41 Camille on 08.16.18 at 7:22 pm

Hello. Pained to explain for many years now, the continued rise in housing prices, some blame outside forces. I might suggest nonlinear economics as a possible way to understand. Many factors although simply of themselves are not the cause for high prices, reaction by the remaining are. Reflectivity, so overall disproportionate results occur.

However, I attribute a lot of this to low interest rates. I also lust over the 3/4 million dollar condo in the sky, calculating how I can make monthly payments, but it took me 15 years to pay off a 100 thousand dollar mortgage? Everyone waiting to cash in, bank, realtor, notary, builder, city… me the sucker.

Then something like Garth’s writing yesterday bring me back to my senses, but those are powerful forces. If they weren’t they wouldn’t work, and they do because we all think we’re smarter.

#42 45north on 08.16.18 at 7:31 pm

Garth: Vancouver? Just over 2.6 million people there, with an almost identical rate of home ownership – 64%. The median household income in the region is almost exactly the same as Auckland ($72,000 C$), but the average property sold last month for $1,093,000. The ratio of price-to-income is 15. Off the charts.

Hans Knapp: Both average and median sale prices are now down 10% from a year ago, but it is the complete cratering of actual transactions – to the lowest level in DECADES – that is the real point here.  Remember, price leads volume…,” says local venture capitalist and blog dog Hans Knapp. “So the back half of this year could be where reality finally overtakes the misplaced expectations of would-be sellers, and material price cuts ensue.”

that’s what Allan Mark Angell said about Vancouver: real estate sales have collapsed.

Alex Prikhodko: talking about Toronto: Long story short, here’s my prediction. Detached homes prices will continue to decline at an accelerating pace, as more mortgage holders (especially multiple property mortgage holders) continue to get squeezed.

the sound bites tell the story:

“off the charts”
“complete cratering”
“collapsed”
“accelerating pace”

Camille: we all think we’re smarter.

we’re not

#43 akashic record on 08.16.18 at 7:44 pm

“…restore things that have been erased. Like one-career households or affordable homes on leafy streets.”

Let’s stick to this part – the economic conditions.

Failing to analyze, finding out the reasons, what and why caused that “things have been erased”, who are the winners and the losers of the new reality is what creates the conditions for “the stain” at the first place.

Safe to say that nobody voted for an economically declining life.

Mulroney didn’t run on that platform, when he won the free-trade mandate, neither Pierre Trudeau when he dreamed up multiculturalism as the social foundation for the sunny future days for Canada.

Everybody knows that something is off from those promises.

It’s understandable that people at least want to discuss what has happened, why and whether they want to continue with the same direction.

There is a thin line between what you call “public sentiment” and self-determination of the public.

Denying the discussion by pushing people into silent submission by calling them tribal, racist, etc. doesn’t cut it.

Never did in the long run.

Totalitarian regimes had their long list of taboo topics, they may have maintained silencium for decades, with bans, prisons, gulag, but the issues never went away.

Why would they here and this time?

“The Gulag Blog.” I like it. – Garth

#44 TS on 08.16.18 at 7:45 pm

#31,

It isn’t quite that simple. That 800k for fast track into Canada wasn’t really invested into the economy. It was a 5 year interest free loan to the province of your choice. Rates were zero so I’m not sure how that helps anybody.

In the case of the GVR, they have some of the lowest property taxes in the world. So you have a situation where you have wealthy individuals declaring poverty line levels of income for tax purposes while backing up the truck on some of the best “free” education, healthcare, and other public services in the world.

The irony of the whole thing is that Canada was too naive to see the big picture. Foreign investment must be good right? Rising housing prices must be good right? But the whole time the rest of the world is laughing in our face for being so naive to foot the bill at the expense of our own children.

That is so twisted it’s hard to know where to start replying. However, most people complain that foreign buyers on their Westside streets leave places vacant. That means they consume no services, yet pay property tax and forked over a pile of money to local sellers, who presumably shoveled it into the economy. Suck. Blow. Make up your mind. – Garth

#45 Tim on 08.16.18 at 7:46 pm

So obvious that foreigners are the problem in Vancouver. Everyone but you seems to understand this. How else can you explain people buying homes with cash if the median salary is 70K?

Most buyers use a combination of equity and mortgage. And 36% of the population rents. – Garth

#46 tccontrarian on 08.16.18 at 7:50 pm

#17 Smartalox on 08.16.18 at 6:08 pm

Coming in September!

The final, epic battle for the ages….

REALTY vs. REALITY

the facts will not be changed, to support the suppositions.
——————————————

Where can I get a ticket? Front row, center please!

TCC

#47 WUL on 08.16.18 at 7:54 pm

Garth,

First the mandatory suck up. If I did not respect your opinion, I would not spend 2000 hours per year on your blog. More hours than I have ever billed in a single year.

A minor point. On the subject of the influence of foreign buyers affecting the RE market, you properly challenge commenters with “Show me your data”.

But, does the absence of data in the hands of one party to the argument improve the quality of the data in the other party’s repertoire?

Go ahead, ban me. (Charter suit?) JK.

Respectfully,

WUL

#48 jess on 08.16.18 at 7:58 pm

The Money Laundering Hub On the U.S. Border? It’s Canada
Strict privacy laws, a reluctance among banks to report suspicious activity and weak regulators contribute to low number of convictions
By Alistair MacDonald,
Paul Vieira and
Vipal Monga
Updated Aug. 8, 2018 7:49 p.m.
https://www.wsj.com/articles/canada-comes-under-fire-for-money-laundering-lapses-1533729600

..”After a Vancouver-based real-estate agent wired almost $240,000 from Canada’s Bank of Montreal to an account in Boston last year, U.S. authorities swooped in. ..

“..When British Columbia’s attorney general, David Eby, was briefed by law-enforcement officials last year on alleged money laundering in his province, the scale of activity described to him “blew my mind,” Mr. Eby said.

Mr. Eby said he was embarrassed to learn that Australian authorities had even dubbed a common tactic among Chinese gangs, in which illicit money is processed through casinos, as “the Vancouver method.”

Canada’s financial-intelligence agency, the Financial Transactions and Reports Analysis Centre of Canada, or Fintrac, said in a recent report to lawmakers that more than two-thirds of Canadian banks it examined had “significant levels” of noncompliance with anti-money-laundering rules, according to a copy reviewed by The Wall Street Journal. …
https://www.wsj.com/articles/canada-comes-under-fire-for-money-laundering-lapses-1533729600

#49 Are you out of your mind? on 08.16.18 at 7:59 pm

Next, you are going to tell me the BC Liberals are trustworthy.

#50 akashic record on 08.16.18 at 8:00 pm

#37 The Cynic on 08.16.18 at 7:02 pm

Don’t forget, white people weren’t the first people on this continent.

Indeed.

Isn’t it time to ask their opinion finally, whether “diversity is our strength”?

Who has more experience about that among us?

#51 akashic record on 08.16.18 at 8:23 pm

#43 akashic record on 08.16.18 at 7:44 pm

“The Gulag Blog.” I like it. – Garth

Big picture for discussing small innocent steps wondering into totalitarian territories.

It’s no secret what’s at the end of the road.

#52 TurnerNation on 08.16.18 at 8:24 pm

Evidence of the Kanadian scam.
Who’s making (tax) money in Ontariowe, right now?

– The lawyers and consultants fighting both side of the Province’s plan to cut Toronto city council’s numbers.
(win-win for them)

– The lawyers and consultants fighting Tesla’s new EV lawsuit against the Province.

– The lawyers and consultants fighting both sides of the sex ed changes.

– The lawyers and consultants fighting both sides of the Fed’s proposed cap n trade/carbon taxes.

– The lawyers and consultants fighting both sides on the Province’s plan of taking over Toronto’s transit system

Government = mind control. Endless charades from actors playing the shell game. We lose everytime.
DoFo was put into power for a reason. Watch it. Middle class death assured.

#53 foreign investors on 08.16.18 at 8:26 pm

@ #40 foreign investment entering economy..

The $800,000 doesn’t need to be spent anywhere or at least not in a meaningful way. It can be funding a new enterprise and pay 1 or 2 employees (share holders) the salary for a decade. There’s a method to the madness..

Personally, I like the idea that foreigners can invest into a BC Corp and the corporation buys real estate. Canada and BC in particular are very attractive places to live in a tumultuous world. At least we’re attracting would-be residents with financial acumen and business sense. Look around Europe these days and count your blessings that we are geographically more isolated.

#54 Long-Time Lurker on 08.16.18 at 8:31 pm

Garth, don’t get upset over them.

“Though the mills of God grind slowly, yet they grind exceeding small; Though with patience He stands waiting, with exactness grinds He all.”

― Henry Wadsworth Longfellow

#55 Ace Goodheart on 08.16.18 at 8:35 pm

Built a luxury bunkie at the cottage.

Threw down nine pilons onto solid bedrock. Two feet under the dirt. Everywhere. Planning the wrap around deck complete with out door shower and barbeque.

This is bunkie numero deux. Finished the first one last year which has a cathedral ceiling and A/C. Full deck and a ceiling fan.

Bored rich people do this kind of stuff. In between whatever else suits our fancy.

While everyone else is commuting and paying mortgages I build little sleeping sheds up North for fun.

Next year my plans are restore an as yet to be found late 40s International pick up.

In between travelling, making and drinking my own beer, cliff diving and just plain chill axing.

F.I. is good.

#56 Wiped Out Landlords on 08.16.18 at 8:38 pm

Buy and rent out 8 houses – what could go wrong ?

#57 crowdedelevatorfartz on 08.16.18 at 8:40 pm

@#35 Raincouver
“You can’t underestimate how foreign buyers consisting of about 10% of the market can create a FOMO frenzy by paying more than asking, 100% cash, sight unseen, no inspection, no subjects etc affecting an entire real estate market at every level.”
+++++

Total agreement.

I’ve lived here for almost 40 years and what has happened over the last 5 -10 years has been without precedent.
Xenophobia or not. The buying, flipping, and ridiculous price increases ……… cannot be 95% local greaterfools.

Local buyers working themselves into a FOMO frenzy for good reason?
Perhaps, but when you have the media pumping it… along with the Real Estate Cartels obtusely (fraudulently?) massaging the true sales stats, and a Liberal govts jumping on the gravy train………. facts?

No one believes ANYTHING they see or hear from govt, business or the lickspittle media.

So what does that leave us with?
Personal observations in the Lower Mainland over the past 40 years.
And blogs like this………

#58 Keith on 08.16.18 at 8:41 pm

The Green NDP wasn’t voted in, the Christy Clark Liberals were (barely) voted out. Recall these gems:

“There is no affordability crisis.”

“There are affordability issues in pockets of the Lower Mainland, but we will not intervene in the market.”

“We are introducing a foreign buyers tax.”

“We have no data on foreign buying.”

“We are ending self regulation of the real estate industry.”

“The recovery is too fragile to raise the minimum wage.” (For a DECADE).

“We have the strongest provincial economy in Canada.”

Vacuum of leadership. Complete disconnection from 70% of the electorate. A low wage, low salary province. Total disregard of a housing and affordability crisis now affecting over 80% of the population. The NDP’s blunt instrument of housing policies sitting at a cool 86% approval in the polls. A few hundred votes, and the B.C. Liberals would have been re elected with a majority. We live in scary times.

#59 Yorkville Renter on 08.16.18 at 8:52 pm

Nationalism
Populism
Terrorism

all have 1 thing in common – poor economic opportunities for those who support it most.

if people had a semblance of economic opportunity they wouldn’t care to participate.

people who feel secure in their ability to build a life don’t blow themselves up or look for scapegoats

#60 Lorne on 08.16.18 at 8:52 pm

#3 Dusty
Brilliant comparison between the Trump administration and the Horgan government. Rather than mocking our neighbors to the south we ought to be looking in the mirror.
……..
Say what????

#61 Lorne on 08.16.18 at 8:54 pm

#28 Alberta Ed
What sensible foreigner would want to buy property in Comrade Horgan’s People’s Republic of British Columbia? (For that matter, what sensible Canadian?)
………
Hopefully not you…but then again, it appears you don’t fit in the category of “sensible”.

#62 Suck and Blow on 08.16.18 at 9:01 pm

@ Garth’s comment #44

Your right Garth, 85% suck health care, education, social services, while 15% blow by leaving vacant homes unrented. Thanks for the reminder of how the influence allows for sucking and blowing at the the same time.

Link to support those percentages, or did you just make them up? – Garth

#63 The Real Mark on 08.16.18 at 9:05 pm

How are the basements in NZ?

#64 Shortymac on 08.16.18 at 9:06 pm

To anyone who had any doubts about house prices declining.

House right down the street from me in rexdale, listed in July for 820k, August 700k.

https://www.realtor.ca/Residential/Single-Family/19810218/29-HADRIAN-DR-Toronto-Ontario-M9W1V5-Elms-Old-Rexdale

https://mongohouse.com/newlistings/5b745a305c72301f035f059c

#65 Linda on 08.16.18 at 9:11 pm

‘Vancouverite’ – do you not know how neighborhoods are developed? Infrastructure is front ended by the developers, as most municipal governments simply have not got the cash to put in all the essentials (water, storm sewer, sanitary sewer, streetlights, roads etc.). The developer is usually responsible for the infrastructure being maintained, usually for a two year period although it could be longer depending on the development agreement. Developers also pay development levies which are meant to provide future infrastructure such as libraries, emergency services etc. Once the development has been turned over to the municipality the cost of maintaining the infrastructure is meant to be covered by property taxes. Thus home buyers prices reflect the cost of all that infrastructure & property taxes take care of future maintenance. To demand that ‘foreign’ buyers pay additional taxes when they have already paid as much in taxes as any local purchaser is therefore not fair, but a catering to the xenophobic tax grab. The moral high ground is simply not there, because they still pay property taxes even if the structure stands empty. So those who are locals get the use of infrastructure that the ’empty nester’ helps pay for & because they are absent most of the time one could argue that the locals are enjoying an ‘unfair’ advantage. I’d add that the ‘foreign’ phobia also extends to Canadian citizens from other provinces. Envy is one of the seven deadly sins for a reason.

#66 Remembrancer on 08.16.18 at 9:13 pm

#26 Angie on 08.16.18 at 6:26 pm

A fixed payment variable mortgage isn’t strictly speaking paying interest on interest b/c as the rate goes up, more interest and less principal gets paid – the mortgage holder still gets all their interest each month.
It is paying more interest $$ on the outstanding balance though b/c it is reduced by less each month so duration and resultant payable interest increase. Not sure how many 25 year amortised renewals your friend would get before the party was over… Sort of the opposite of making extra payments to pay off sooner :-)

Next to worst case scenario is the principal “stalls” and the monthly payment is 100% interest with no principal reduction, worst case is the payment line crosses and you aren’t even covering the interest anymore. Only theoretical though as an adult should be stepping in well before that to call the loan I expect…

BTW, I try to stay away from the tin foil hat side of things but this whole idea of looking at only monthly payments for budgeting without looking at total costs over time, which is also a favourite for car dealers, insurance slingers and our cell phone company selling cable TV vs. our cable TV company selling cell phone duopoly have down to a science…

All that said, if I had someone with a 7% loan on secured collateral, I’d hope they never paid it back…

#67 Freebird on 08.16.18 at 9:14 pm

Bankrate.com survey in 2017 of 1,000+ in US on best way to ‘invest’ money not needed for 10 plus yrs with real estate coming out on top.
https://www.bankrate.com/investing/financial-security-0717/

Study by London Business School/Credit Suisse found after adj for inflation stocks outperformed housing by ~4x btw 1900-2011.
https://www.london.edu/news-and-events/news/housing-delivers-lower-returns-than-shares-1411

Not sure if Garth and others have seen either and can comment. The first is US based and second only covers to 2011 but still interesting.

#68 Truthbrary.org on 08.16.18 at 9:17 pm

Garth, some people disagree with you and this does not make them racist. Making these accusations weakens your argument. While it’s true that psychology has a huge influence on the cyclical swings of markets, the influence of foreign money in Vancouver has never been in dispute, not by locals, not by market experts and not by foreign buyers themselves. Essentially, everyone in Vancouver is in agreement that foreign money has had a massive effect on the market and this opinion is supported by the data. As one commenter pointed out, the effects on the market by the foreign buyers tax are perfectly segmented such that those areas with the biggest foreign influence are clearly hit the hardest. For example, the West side of Vancouver is down in price significantly, as well as Richmond. The East side is still a very strong market. Condos are still very strong.

Although drivers such as psychology, low interest rates, and foreign buyers all have varying degrees of impact in the Vancouver market, the biggest factor is clearly the influence of foreign money. Low interest rates and FOMO exist across the country, but only in Vancouver and Toronto have prices skyrocketed to unsustainable levels. This is no different than any other major international city in the world, and the main reason is well documented as the influence of foreign money.

Nowhere in my post was racism mentioned. BCers hate non-residents equally, it seems. – Garth

#69 NoName on 08.16.18 at 9:18 pm

Definitely Watch an hour long, Naill Ferguson, mentions us (anadians) to.

https://youtu.be/f3rhUZPNqX0

#70 Freebird on 08.16.18 at 9:20 pm

For fun…motorcycle loving kid in Halifax gets ticket…
https://youtu.be/x5tzPF-Q81s

#71 Nonplused on 08.16.18 at 9:24 pm

The only way buying a house 15 times your income ever made sense is if it just kept appreciating at a phenomenal rate. Such that in effect you never had to make any payments. You don’t buy anything else that way. Can you imagine buying a car and it only went up in value? Instead, when you buy a car you expect to pay it off or if you lease turn it back in and get no money back.

If you can’t pay for it it’s a leveraged speculation. At 15 times income, after tax and after living expenses that buyer is looking at 30 years or more, probably 45, to pay the house off not counting interest. How did our high schools produce these people? Oh ya, they have them calculating rocket ballistics not economics.

#72 Democracy Is Mob Rule on 08.16.18 at 9:36 pm

#7 -=jwk=- on 08.16.18 at 5:16 pm
It wont’ matter, the flow out of China is unstoppable.
_______________________________________________

When Japan’s economy was booming in the 1980s they were buying foreign real estate. Then their population got old and they sold it. The same will happen to China. Their one child policy guarantees it.

#73 Vanreal on 08.16.18 at 9:38 pm

The government should keep out of the real estate market period. Real estate is an investment and should be allowed to live and die on the free market just like any other investment. John Horgan and his green crony will ruin this province just like the NDP did the last time they were in power.

#74 Drill Baby Drill on 08.16.18 at 9:40 pm

Batten down the hatches Trump is very clearly signaling a freeze out on NAFTA talks with Canada. Sunshine and Lolypops boy is going to be crushed along with many Canadian jobs.

#75 MaxBerniersShorts on 08.16.18 at 9:41 pm

Yep Garth you nailed it, even though the entire Western world had ultra low interest rates for the last ten years, it was some magical alignment of planets and pixies that saw a handful of cities like Vancouver, Auckland, Sydney and Melbourne see astronomical price increases in housing.

You forgot Seattle, New York, London, HK, SF and a few dozen others. – Garth

#76 theoryAndPractice on 08.16.18 at 9:51 pm

https://www.globalpropertyguide.com/Europe/Germany/Taxes-and-Costs

In Germany , captial gains tax applied to any house sold before 10 years of ownership. This would be end of speculation in Canada , if gov’t really wanted to solve…

for the blog-title sound is missing :
https://www.youtube.com/watch?v=Zjh80iwj8rg

#77 Lorne on 08.16.18 at 9:57 pm

#35 Raincouver
You can’t underestimate how foreign buyers consisting of about 10% of the market can create a FOMO frenzy by paying more than asking, 100% cash, sight unseen, no inspection, no subjects etc affecting an entire real estate market at every level.

The Real Estate Machine and media is primed and ready to expertly leverage those facts into a FOMO frenzy among the Locals!! This is the key impact.

The foreign buyers may represent a relatively “small” percentage, but this kind of impact is very powerful and cannot be understated. Those of us who actually live here know full well.
……..
So true…..it is hard to understand why some cannot see this simple fact.

#78 Zed on 08.16.18 at 9:59 pm

When a grandparent worries about the grandkid’s ableality to buy a house, he/she should sell his/her own house at a 30% discount to the perceived value of the house. Then the said grandparent can see that he/she is the real problem, expected value for the mentioned property:”I lived there so it worth this price”

#79 RTMND on 08.16.18 at 10:03 pm

“even though 95% of BC sales are among existing residents” / “Most buyers use a combination of equity and mortgage.” / “hammer of xenophobia”

And how many of the existing residents buying these places recently started existing? What do you think would have happened if the population had remained static for the last 20 years? Your statements are only worthwhile once you show the actual data on where the money is coming from that buys the houses instead of just speculating–it’s on you to prove that the market got bid up to millions of dollars by equity bootstrapping from a population of people with $70K household incomes.

You keep trying to tar people with accusations of “xenophobia,” as if there’s a racial animus that clouds their judgement, when it’s precisely the other way around–it’s you who’ve got a prior commitment to a conclusion about the data because of sociopolitical beliefs, not everyone else. If people were shown that mass immigration had no effect on prices, they would want to believe it, because that would mean that there are no external factors keeping prices out of reach, which is an optimistic conclusion. But if you were shown that it’s had the impact it’s had, it seems clear that you would try to obfuscate it for political reasons.

There is no mass immigration. Xenophobia means fear of foreigners. I think you may have it bad. – Garth

#80 Willy H on 08.16.18 at 10:07 pm

Banning or taxing foreign buyers to prevent rich jet-setting 2%’s from buying up all the properties in the world’s most beautiful places has existed long before populism reared it’s ugly head in the west.

Truth be told we just don’t have the data to prove or disprove foreign buyer impact or the impact of money laundering on the Canadian real estate market.

#81 Bottoms_Up on 08.16.18 at 10:10 pm

If 5% of yearly transactions are to investors, that specifically buy real estate to hold for medium-to-long term gain, then that effectively takes 5% of the stock off the market and not available for purchase by others.

If the rate of new builds minus demolitions is less than 5% per year, then investors are impacting supply. And obviously are impacting demand.

#82 Jason on 08.16.18 at 10:11 pm

Based on the info provided wouldn’t the ratio in New Zealand be 8.7?

#83 DON on 08.16.18 at 10:17 pm

#35 Raincouver on 08.16.18 at 6:50 pm

You can’t underestimate how foreign buyers consisting of about 10% of the market can create a FOMO frenzy by paying more than asking, 100% cash, sight unseen, no inspection, no subjects etc affecting an entire real estate market at every level.

The Real Estate Machine and media is primed and ready to expertly leverage those facts into a FOMO frenzy among the Locals!! This is the key impact.

The foreign buyers may represent a relatively “small” percentage, but this kind of impact is very powerful and cannot be understated. Those of us who actually live here know full well.
***************

Nicely put! I’m glad I read the comments before repeating what you wrote. Remember the realtors flying in helicopters with foreign buyers and the media consistently ran with the stories. The smart money entered the Van market back in the early 2000’s. The media/realtors fueled the FOMO and foreign buyer themes and everyone benefited and a special shut out to BC Casinos. The drugs, gangs, criminal organizations/money laundering and politicians who did nothing, corrupt politicians, developers, low interest rates and speculators all had a hand inflating the market.

Then the higher interest rates and stress test came into play. But the one thing that was always a factor was houses have become too expensive for the entry level buyer and then condos followed the same fate. Nothing human can go up forever. Prices are still out of reach and we have yet to experience a prolonged recession. Wonder if the divorce rate due to financial stress will start to tick higher. Three young couples I know are now getting divorces. Realtorrrs will have to become marriage counselors to stop the potential stressed house sale(s) on their streets. The boomers went through the divorce phase and so will the Millens and Gen Xers that over leveraged themselves fueled by impatience and greed. Yes some have down well, but most…well the jury is still out.

For the poster that said we will never see the 80s again. LOL – in the 80’s interest rates were high….but houses cost (40 – 300K) and gas was cheaper so was food, insurance, etc. Yes wages have risen since the 80’s but so has tuition, food, gas, insurance, clothes, vehicles, vehicle repairs, air fares, vacations, taxes, permits.

I make more than my dad did, but he could afford a lot more than I can and he got better quality products, not the plastic and low quality breakable shit they make today.

On a related note…WALMART had a big increase. Not sure if that is good or bad. More people shopping there because they can no longer afford other places???

@Crowded _ good zingers lately! You have been on a roll…nice!

@Garth…can a slow melt still reach the depths of a crash over time?

Slow melt sounds like torture to me. Then again it is what it is and reality will bite regardless.

#84 SW on 08.16.18 at 10:23 pm

#46 tccontrarian on 08.16.18 at 7:50 pm
#17 Smartalox on 08.16.18 at 6:08 pm
“Coming in September! The final, epic battle for the ages….
REALTY vs. REALITY the facts will not be changed, to support the suppositions.”
——————————————

“Where can I get a ticket? Front row, center please!”

With that much gore flying about? You got to be kidding. Think of the dry cleaning bill!

#85 DON on 08.16.18 at 10:24 pm

#7 -=jwk=- on 08.16.18 at 5:16 pm

It wont’ matter, the flow out of China is unstoppable. There will be home buying service in NZ that will happily buy whatever house you want through a local holding company. Done. Remember these are cash buyers, they don’t care about financing or things like that. 95% *cough* ‘local’. Sure. That PO box in in Van sure buys a lot of houses!
************

China can do what it wants and can stop things over night. China has its own problems, housing bubbles, credit bubble etc. And things are already slowing down…so the flow out of China is not unstoppable.

The downturn has just started and trade wars aren’t exactly a positive.

#86 KLNR on 08.16.18 at 10:25 pm

@#10 ds on 08.16.18 at 5:27 pm

LOL, are you joking? back to yer cave neanderthal.

#87 Bruce on 08.16.18 at 10:29 pm

In NZ home owners could rent houses and it didn’t count towards their income. Very common for wealthy Kiwis to own multiple properties. The new Labor gov put a stop to it.

#88 Viorelli on 08.16.18 at 10:31 pm

This is unfortunately what eventually happens when the country loses its manufacturing, gets rid of unions, and starts inventing other business sectors, such as flipping real estate to each other, money marts, marijuana, and antidepressants sales to it’s own sheeple who are still hoping for a house with a backyard, Ford mustang with collector plates, and a single income earner household. In other words fighting over leftovers by shuffling crumbs around. Loans, reverse mortgages, car leases, and divorce lawyers. All the manufacturing is in Asia, tfw are coming here for Tim horton’s jobs, and our natural resources sales are rapidly stalling. Russians signed the biggest contracts with China and India to supply oil, gas, lumber and mining direct from Siberia at reduced cost while we are negotiating the reconciliation. Add to this the increase in border crossings, welfare payments, and increased taxation on small businesses, of which many are folding. This leads eventually to a third world socialism, Venezuela number 2 comes to mind. It will take time to get there and will not happen overnight. You still have the time to prepare yourself for the upcoming disaster.

#89 DON on 08.16.18 at 10:34 pm

#3 Dusty on 08.16.18 at 4:59 pm

Brilliant comparison between the Trump administration and the Horgan government. Rather than mocking our neighbors to the south we ought to be looking in the mirror.
**************************
WOW! Just WOW and I’ll throw in a YIKES! Did you really think honestly about what you said?

Then again Andrew Wilkinson is that you? FFS!

#90 greyhound on 08.16.18 at 10:51 pm

https://www.cbc.ca/news/canada/british-columbia/bc-foreign-homebuyers-1.4787079
Now the gubmint wants in on the act…

#91 nobody on 08.16.18 at 10:59 pm

A foreign buyer tax will have an impact.
Stop American managers at Microsoft, Amazon, Google, Boeing, Intel in Vancouver buying houses here and they will sensibly open their new R&D labs in Berlin or Singapore – anywhere except Canada or NZ.
Fewer highly paid workers, lower demand for houses, lower prices.

So all the locals who would have had jobs in those companies can see house prices fall.

#92 Oft deleted much maligned stock.picker on 08.16.18 at 11:03 pm

NAFTA Dead with Canada….
US….Mexico sign new pact throwing Canada under the bus.

https://pilotonline.com/business/consumer/article_599976db-fea0-540a-a95b-6e3e924fc1a0.html

Trudeau…
The anti Trump puppet listened to his haters and screwed Canada in the process.

#93 Prairieboy43 on 08.16.18 at 11:19 pm

New Zealand the South Island is less populated and beautiful. South Island has Sheep (if you are into sheep?), mountains, oceon, vineyards, Great White sharks, Albatross. Christchurch is last stop prior to going to South Pole. Excellent University in Dunedin. Steep, narrow left driving roads. Drivers are courteous and alert. Not many aggressive drivers (Toronto). Heavy on British theme everywhere. Impressed with Rugby and the Power game (still don’t know all the rules, excellent game). Finally in Queenstown (NZL Banff), they have excellent Burger (Fergburger).
https://youtu.be/N5unOyg8rOs

#94 DON on 08.16.18 at 11:35 pm

@raincouver

Possible alias – Smokedcouver. I get the rain though.

#95 DON on 08.17.18 at 12:01 am

#73 Vanreal on 08.16.18 at 9:38 pm

The government should keep out of the real estate market period. Real estate is an investment and should be allowed to live and die on the free market just like any other investment. John Horgan and his green crony will ruin this province just like the NDP did the last time they were in power.
***************

The Province of BC has already been ruined. Open your eyes to your beloved former government. The evidence is everywhere and well documented.

#96 NoName on 08.17.18 at 12:12 am

Hey dolce vita

Thank you for your reply other, day, i have one small question for you. During time when we where give huge amounts of hispeed, hipressure hiexpanson, lod noise producing gifts by some bad dudes, one family form northern Italy tok my sister who was very young at the time in for the part of of 92 and 93.
So my plan is to at some point to visit that family and thank them for doing that. By the look of it when trupm is done wih canada kicking out of naphta ill have plenty of time.
So my question is what is best and budget friendly way around that area with an emphasis on accomodation. Area in question is 50-ish kilometers south of the Turin.

#97 Ca$h money on 08.17.18 at 1:38 am

Haha comment #63 on marks basement was classic!

I love this blog but when the real stats actually come out thanks to the NDP putting controls in place to collect real data we will all see the truth. Go NZ!

#98 Smoking Man on 08.17.18 at 1:41 am

Who is John Galt.
Who is Q

https://youtu.be/m8IckAsGh1I

#99 DON on 08.17.18 at 2:01 am

https://www.scmp.com/business/article/2160103/homebuyers-getting-cold-feet-hong-kongs-property-market-amid-growing

#100 jane24 on 08.17.18 at 2:51 am

Laws preventing or inhibiting foreigners from owning RE do work. They work by letting the voters THINK that was the problem for leaping prices and it is now fixed. RE values are 90% emotional after all. If you THINK that laws restricting foreign ownership will work, then prices will go down.

Other posters are right in that most countries in the world including China do not allow outsiders to buy RE so why does Canada sell off the family silver in this way? Why don’t Canadians come first for the Canadian govt? My son is Vietnam would love to buy condo there but as a foreigner you never get clear title, only a 50 year lease.

More and more I realise that globalisation is for the rich. They get richer and the average person gets poorer from it. Massive wealth transfer from the bottom and middle to the top. Sad.

#101 Can You Dig It? on 08.17.18 at 3:57 am

Here’s a realtor with a $1768 lease takeover offer https://www.kijiji.ca/v-cars-trucks/markham-york-region/2017-mercedes-benz-s400-amg-4matic-only-6-500km/1377105323?enableSearchNavigationFlag=true

Jesus! $1800 a month for a car. That’s like renting a detached.

#102 The Killjoy on 08.17.18 at 5:25 am

Aucklander living in Auckland here.

From an anecdotal POV the conspicuous, massive influx of foreigners into the CBD, is indicative of more than 3.8%….i think we have woefully flawed data. We barely had a foriegn buyers register until a year or so ago. The number of China only real estate agents that have popped up in 5 years is mind blowing. ‘My country’ is for sale, plain and simple.

Interestingly, the government that was voted in are pretty left of centre, openly globalist and have not really stemmed the flow of immigration as it is literally the only thing that has kept the economy afloat post GFC. This wasn’t a populist revolution, this was desperate people asking for change. Auckland is a spatially constrained (think Seattle geographically) major city in an expensive nation at the bottom of the world that has grown rapidly, which has had huge impacts of infrastructure and housing availability/affordability. This is especially so since we don’t have reciprocal agreements with the likes of China nor can we compete with them on volume of potential buyers and the 0% interest rates they had that allowed our market to be flooded with cash from the orient.

There are certainly local speculators, a flip it and cash in RE culture, bugger all disincentives, and a frenzy on capital gains. Christ even mortgage interest was tax deductible until recently on investment property.

Witness the young gen being locked out and locked in to generation rent, fractured communities, homelessness booming, antidepressants becoming popular, lower sense of community cohesion when you don’t know or trust or speak the same language as your new neighbours etc.

How on Earth anyone affords to manage a mortgage these days is a mystery without the bank of mum and dad, but the vast majority are not happy about it….save of course for the usual fat cats and sociopaths who think gambling on the foundation of a society is a wise idea, just to make some massive selfish capital gains. The market has failed, no matter which way you try and spin it.

#103 Karl on 08.17.18 at 6:57 am

Just making a general observation:

I find it very odd that not too long ago “globalization” was the big fear. We (majority of society) were protesting vehemently against it. It was an evil word.

Now it seems people will fight (literally) en masse to protect globalization (see every rally every weekend, MSM, etc…).

The time between those two were not very long, think 90s/Early 2000s to now.

At the current juncture, it looks like we are splitting directly in two, one side for and one against globalization. Though populism, I would say, has the momentum right now.

I’m not promoting one or the other, I see issues with both, but just making an observation. The foreign investment in housing debate is wrapped up in all of this.

#104 Howard on 08.17.18 at 7:02 am

All this is consistent with the times in which we live. The forces of nationalism, populism and protectionism are alive as never before in several generations. Many people crave walls, distrust those not of their tribe, and believe barriers will restore things that have been erased. Like one-career households or affordable homes on leafy streets.

——————————————

30 years of non-stop globalist onslaught of the West, particularly rapid and ruthless for the past 10 years, and you never thought it might overreach? This is simply the people trying to swing the pendulum back a bit. How come nobody demands that China or Japan embrace globalism within their borders?

There’s a price to pay for Wal-Mart being full of cheap crap. You are now paying it. – Garth

#105 Howard on 08.17.18 at 7:05 am

#102 The Killjoy on 08.17.18 at 5:25 am

Aucklander living in Auckland here.

From an anecdotal POV the conspicuous, massive influx of foreigners into the CBD, is indicative of more than 3.8%….i think we have woefully flawed data. We barely had a foriegn buyers register until a year or so ago. The number of China only real estate agents that have popped up in 5 years is mind blowing. ‘My country’ is for sale, plain and simple.

Interestingly, the government that was voted in are pretty left of centre, openly globalist and have not really stemmed the flow of immigration as it is literally the only thing that has kept the economy afloat post GFC.

—————————————-

Didn’t I read recently that the NZ government has slashed the annual immigration quota from around 65,000 down to 40,000?

#106 IHCTD9 on 08.17.18 at 7:15 am

#101 Can You Dig It? on 08.17.18 at 3:57 am
Here’s a realtor with a $1768 lease takeover offer https://www.kijiji.ca/v-cars-trucks/markham-york-region/2017-mercedes-benz-s400-amg-4matic-only-6-500km/1377105323?enableSearchNavigationFlag=true

Jesus! $1800 a month for a car. That’s like renting a detached.
_________

I think Mr. Thornhill has just come to realize that. Probably another fake it till you make it douche. A measly 3 year lease and he can’t take it anymore after making only 17 payments. Now he’s on Kijiji begging for a bail-out.

Well, at least he got to drive an AMG for a year and a half – and for only $33,963.28 – so worth it!

What a goof.

#107 Y. Knott on 08.17.18 at 7:49 am

#85 Don – “China can do what it wants and can stop things overnight”… – You know how hard they’ve been trying to stop things?

China’s main weapon against the rest of the world is deflation – everytime another country tries to redress the massive influx of cheap Chinese goods, say with a tariff, the Chinese just devalue their currency, making their stuff still cheaper. This works a treat because no Chinese can afford imported stuff, especially when the Chinese can make every consumer good themselves at pennies on the foreigners’ dollar, by stealing foreign tech and paying their workers almost-slave wages.

The rub is that almost all the money in the country is held by cousins of politburo members, and they ain’t planning to retire in China. And everytime the yuan devalues, their stockpiles of yuan shrink; so they’ve been endlessly creative about capital flight – moving yuan out of the country and stashing it elsewhere, like in foreign real estate, where it won’t devalue and they won’t have to pay taxes or bribes with it. It’s a multi-billion-dollar problem – and China ain’t the only place this happens – and the home country wants that money to stay in-country, to be put to work at home.

So China (in particular) has been increasingly draconian in its efforts to stop capital flight, complicated by all the money being held by cousins of politburo members who can end-run the new measures. The end result is that China can’t stop anything, especially not in the midst of a trade war with their biggest customer.

#108 neo on 08.17.18 at 7:52 am

#106 IHCTD9 on 08.17.18 at 7:15 am
#101 Can You Dig It? on 08.17.18 at 3:57 am
Here’s a realtor with a $1768 lease takeover offer https://www.kijiji.ca/v-cars-trucks/markham-york-region/2017-mercedes-benz-s400-amg-4matic-only-6-500km/1377105323?enableSearchNavigationFlag=true

Jesus! $1800 a month for a car. That’s like renting a detached.
_________

I think Mr. Thornhill has just come to realize that. Probably another fake it till you make it douche. A measly 3 year lease and he can’t take it anymore after making only 17 payments. Now he’s on Kijiji begging for a bail-out.

Well, at least he got to drive an AMG for a year and a half – and for only $33,963.28 – so worth it!

What a goof.

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

Anybody on commission who has a leased vehicle with only 6,500 km on it in a year and a half of driving isn’t doing their job very well. They need to get out there and hustle.

#109 Gravy Train on 08.17.18 at 8:03 am

#12 Kelsey on 08.16.18 at 5:33 pm
#18 Mattl on 08.16.18 at 6:13 pm
#57 crowdedelevatorfartz on 08.16.18 at 8:40 pm
#65 Linda on 08.16.18 at 9:11 pm
#79 RTMND on 08.16.18 at 10:03 pm
#80 Willy H on 08.16.18 at 10:07 pm

Help me out here, folks. If every single human being on earth were of the same tribe (say, Christian Caucasian), would immigration still be an issue for you?And would you still want to build walls? Or would you find some other reason to be xenophobic? :)

#110 IHCTD9 on 08.17.18 at 8:04 am

#88 Viorelli on 08.16.18 at 10:31 pm

It will take time to get there and will not happen overnight. You still have the time to prepare yourself for the upcoming disaster.
______________

It will take some time yet – but so will getting yourself properly insulated. I’ve already started preparing for the fallout of broke governments with terminal revenue streams. Don’t doubt for a second that they will feel for us tax slaves when the trough starts running dry.

By the time Trudeau is done, there will be a good 1/2 million Canadian jobs dropping into an irrecoverable nosedive. Just failing to sign a NAFTA deal and provoking Trump into slapping a tariff on the auto sector will do that – half a million jobs is probably a lowball.

There is precious little Canada has left going for it on the economic front. So much investment has been protested, legislated, outlawed and red taped out of the country. Aye, even the effects of what has already happened have yet to be felt. Yet we are adding even more trouble to our futures even now. When it hits, it’s going hit hard – and keep on coming.

#111 maxx on 08.17.18 at 8:11 am

#2 NotLegalAdvice on 08.16.18 at 4:58 pm

“With all the fake news circulating around these days, people believe the market has recovered and will continue to go up up up. Oh, how wrong they are.”

They certainly are. Was walking out of a red bank yesterday. I stopped at the coffee station and overheard the following from a young twenty-something, accompanied by what could be his dad a they walked past me on the way out:

“I don’t care if I have to pay more, no conditions, no inspection, I want this thing closed.” The look on his face was patent looney tunes.

What a total putz. The insanity continues until finances hit the wall. Then idiots like this wake up from the dream. Doh!

Fascinating how fools propel each other. What happened to (the joy of) critical thinking?

Realtard-induced mania of “buy now or buy never” is, for now, still alive.

#112 IHCTD9 on 08.17.18 at 8:28 am

#72 Democracy Is Mob Rule on 08.16.18 at 9:36 pm
#7 -=jwk=- on 08.16.18 at 5:16 pm
It wont’ matter, the flow out of China is unstoppable.
_______________________________________________

When Japan’s economy was booming in the 1980s they were buying foreign real estate. Then their population got old and they sold it. The same will happen to China. Their one child policy guarantees it.
__________________________

Yep – big issues coming up in China on the demographics front. Hundreds of millions of old Chinese wondering how they’re going to live with no kids, no social net, no new workers etc… They might soon be in the immigration business as well. Could be a tough sell….

#113 dharma bum on 08.17.18 at 8:40 am

Yah, yah, yah….all of this stuff is interesting, but let’s talk about what’s REALLY important:

Ontario is on the verge of BUCK-a-BEER!

Yes folks, Doug Ford is tuned right in to what it’s gonna take to Make Ontario Great Again!

MOGA-MOGA-MOGA.

#114 Evangeline on 08.17.18 at 8:45 am

Everyone is talking about President Trump’s impending tarriffs on Canadian made cars but that is really not his issue. The tarriffs he’s threatening to impose are only a goad to Canada into acting on his main issue, which countries using NAFTA to get their steel into the USA under the table, and it appears the Trudeau admin is actually doing something to stop that.

https://www.cbc.ca/news/politics/morneau-hamilton-steel-safeguards-1.4784425

“Canada wants to avoid the dumping of inexpensive imports, something that damages its domestic industry and threatens jobs.

It also wants to avoid being accused of being a “back door” for cheap steel entering the U.S. as inexpensive foreign product is imported into Canada — perhaps modified in some fashion — and then exported onwards.

To accomplish this, Morneau is reaching for a legislative tool the federal government hasn’t used before — one that allows him to apply tariffs first and investigate the rationale later: Section 55 of the Customs Tariff Act.”

#115 Inflation on 08.17.18 at 8:45 am

3% inflation in July – .5% month over month alone. And look at the yield curve. BOC is crapping its pants.

#116 crowdedelevatorfartz on 08.17.18 at 8:46 am

@#109 Gravy Train
“If every single human being on earth were of the same tribe (say, Christian Caucasian), would immigration still be an issue for you?”
+++++
No
Because we’d all be able to sing this song while drinking a Coke

https://www.youtube.com/watch?v=92h9cbAjAzg

#117 Karl on 08.17.18 at 8:47 am

There’s a price to pay for Wal-Mart being full of cheap crap. You are now paying it. – Garth

That’s the problem; consumerism. Too much crap and overall mass consumption. The basis of making money (i.e. your ETFs gaining 7% a year) is at the cost of something. Garbage polluting our oceans, lakes and rivers. Cars spewing exhaust into our air. Mass food production for our the 90 million McDonald’s stores. Garbage EVERYWHERE. Why? Consume, consume, consume. We need that stock market to keep getting higher. None of our hands are clean.

#118 IHCTD9 on 08.17.18 at 8:59 am

#108 neo on 08.17.18 at 7:52 am
#106 IHCTD9 on 08.17.18 at 7:15 am
#101 Can You Dig It? on 08.17.18 at 3:57 am
Here’s a realtor with a $1768 lease takeover offer https://www.kijiji.ca/v-cars-trucks/markham-york-region/2017-mercedes-benz-s400-amg-4matic-only-6-500km/1377105323?enableSearchNavigationFlag=true

Jesus! $1800 a month for a car. That’s like renting a detached.
_________

I think Mr. Thornhill has just come to realize that. Probably another fake it till you make it douche. A measly 3 year lease and he can’t take it anymore after making only 17 payments. Now he’s on Kijiji begging for a bail-out.

Well, at least he got to drive an AMG for a year and a half – and for only $33,963.28 – so worth it!

What a goof.

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

Anybody on commission who has a leased vehicle with only 6,500 km on it in a year and a half of driving isn’t doing their job very well. They need to get out there and hustle.
_______

I was thinking more like he just didn’t have any cash left to put gas in it.

#119 Good All on 08.17.18 at 9:25 am

foreigners are the “root” cause! the average % of foreign buyers doesn’t mean anything, it is the highest % in a specific area (e.g. the 20% in your post) that drives the price much higher in that area first, then higher price radiates to all surroundings. Foreigners set the higher “market” price and then local sellers followed/expected and then local buyers accepted….

You demean the locals. Are they that dumb? How does the price of a Westside estate impact a condo in Poco? You have no point. – Garth

#120 Smoking Man on 08.17.18 at 9:36 am

Whoa! Get ready for much higher interest rates.

https://www.zerohedge.com/news/2018-08-17/loonie-spikes-canadian-consumer-prices-soar-most-2011

#121 akashic record on 08.17.18 at 9:42 am

#109 Gravy Train on 08.17.18 at 8:03 am

#12 Kelsey on 08.16.18 at 5:33 pm
#18 Mattl on 08.16.18 at 6:13 pm
#57 crowdedelevatorfartz on 08.16.18 at 8:40 pm
#65 Linda on 08.16.18 at 9:11 pm
#79 RTMND on 08.16.18 at 10:03 pm
#80 Willy H on 08.16.18 at 10:07 pm

Help me out here, folks. If every single human being on earth were of the same tribe (say, Christian Caucasian), would immigration still be an issue for you?And would you still want to build walls? Or would you find some other reason to be xenophobic? :)

What do you mean by walls?

You do realize that walls are just the physical or legal representation of laws, rules, etc. that communities created from the beginning of the history, everywhere on the planet, to serve their own best interest?

But let’s assume for a moment that those rules by communities govern themselves are gone, to satisfy some supposed higher moral standard.

How do you imagine the logistics?

Would you eliminate all walls, without cherry-picking for your own virtue-signalling purpose of the day or for your own financial interest?

Like the door on your home, the wall that’s in front of your private properties, money, culture, customs?

But let’s assume, you are serious about eliminating walls.

Do you think that world would be better?
Do you have any proof? Do you have any example in the entire universe about societies without walls?

Nobody seriously argues for the elimination of boundaries, rules or restrictions. That is a false argument proffered by those who need a crutch to support faulty logic. No walls are as bad as arbitrary ones. Reality is gray. – Garth

#122 Tony on 08.17.18 at 9:43 am

Re: #95 DON on 08.17.18 at 12:01 am

Real estate was an investment ’til the Chinese stopped buying. Now it’s an albatross or money pit.

Correction: It was an investment until Canadians stopped buying. – Garth

#123 MF on 08.17.18 at 10:08 am

#110 IHCTD9 on 08.17.18 at 8:04 am

Meh we’ve been hearing the “economic hurt” is just around the corner for years on this blog and here we are.

The problems you cite are not unique to Canada, but the whole western world.

I’m a Trump fan, but his tax cut and attack on Canada were both dumb moves. The US deficit will create a problem in the future if not reigned in, and at that point it will 100% create a crisis. The NAFTA attack is totally unnecessary and more of a domestic vote buying tactic than anything else.

We’ve got first world problems.

MF

#124 ShawnG in TO on 08.17.18 at 10:10 am

July inflation 3%
interest rate is going uppa Uppa UPPA!
coming mortgage renewals are gonna be pita Pita PITA

As predicted. 90% of Canadians have seriously underestimated the rising cost of money. – Garth

#125 MF on 08.17.18 at 10:18 am

#109 Gravy Train on 08.17.18 at 8:03 am

They would find some other reason to be xenophobic. Over a century ago when a lot of Irish were immigrating to the west there was still tension between them and the native population (often with British roots). The cycle was repeated with successive waves of European immigrants that came later.

MF

#126 MF on 08.17.18 at 10:36 am

#124 ShawnG in TO on 08.17.18 at 10:10 am

Of course it is.

We were told for years inflation is “low” even though we all witnessed house prices go parabolic and average rents increase consistently.

The contrast was comedic. On top of that, our BoC governors continuously “warned us” that debt levels were too high and then continued their stupid failed policy of zero bound rates for way longer than was needed. Like 7 years longer than needed.

The institution began to appear untrustworthy, partisan (remember those idiotic rates drops in 2015?), and incompetent.

We can all see that everything we spend on has been increasing the whole time (except gasoline for a short period). All that recent statistic is good for is that it inches the BoC towards finally raising rates where they should be. There has been way too much unnecessary inertia with interest rates normalizing anyways.

Now they have the “excuse” they needed.

MF

#127 Ottawan on 08.17.18 at 10:48 am

As predicted. 90% of Canadians have seriously underestimated the rising cost of money. – Garth

Link to support those percentages, or did you just make them up? – Garth

I confess. Its closer to 95%. – Garth

#128 Max the Tax on 08.17.18 at 10:59 am

Yes, NZ theory is worth a try here at home too: ban foreign home ownership in CA – send the money launderers elsewhere. And let’s continue the landslide of regulation and taxing till the place regains a middle class:

https://www.cbc.ca/news/politics/cra-tax-avoidance-evasion-1.4787781

Prosperity through taxation! You guys are delusional. – Garth

#129 Evangeline on 08.17.18 at 11:03 am

#123

“I’m a Trump fan, but his tax cut and attack on Canada were both dumb moves. The US deficit will create a problem in the future if not reigned in, and at that point it will 100% create a crisis. ”

See 8:50 … for a different perspective

https://www.youtube.com/watch?time_continue=597&v=6Dr-v3jCo-w

Kudlow is a nutbar. – Garth

#130 Mattl on 08.17.18 at 11:06 am

Sales activity and prices fall when people perceive the market is changing. Behaviour 101. You will learn in time it was FOMO, not scary Chinese dudes, that wilted. – Garth

No chance FOMO was driving moisters with 50k incomes to buy 1.5mm homes. Numbers don’t work. Yes money was cheap and banks were lending at crazy ratios but no one was borrowing at 10:1 ratios. I took a mortage in 2008 and the again in 2017 and 4:1 was the most I was offered. Both times we borrowed at 2.5:1 but I am in the top 1% incomes and had good equity in my existing properties and have never had a shot at buying a sfh in a major YVR market in the past 6 years. The influence of foreign or new money allowed long time homeowners to sell and there was a snowball effect. I have friends that made small fortunes in outlier YVR towns selling big new homes to buyers that sold YVR homes to any price buyers. These weren’t moisters or median income families buying yvr tear downs…

I think if we ever get to beneficial ownership and AML checks in RE you will see that foreign and laundered money had a significant impact on YVR RE. There is no other way to explain blocks of million dollar homes and condo’s sitting empty, this is not FOMO, these aren’t amateur investors holding 30mm in property.

FOMO however was very impactful in the Fraser Valley, i watched people mortage their future to get into 800k walkout basement homes in Mission. Those outlying markets are where people lost their mind and they are going to get crushed.

#131 Stan Brooks on 08.17.18 at 11:06 am

official inflation 3 %, soon to be 8 %.

Unofficial 9 %, soon to be 15 %.

https://ca.finance.yahoo.com/news/trump-suggests-canada-sidelined-latest-212211039.html

BoC with brown spots on their pants.

#132 Gravy Train on 08.17.18 at 11:09 am

#121 akashic record on 08.17.18 at 9:42 am
“Do you have any example in the entire universe about societies without walls?”

The Canada-U.S. border doesn’t have walls. :)

#133 Howard on 08.17.18 at 11:10 am

#113 dharma bum on 08.17.18 at 8:40 am

Yah, yah, yah….all of this stuff is interesting, but let’s talk about what’s REALLY important:

Ontario is on the verge of BUCK-a-BEER!

Yes folks, Doug Ford is tuned right in to what it’s gonna take to Make Ontario Great Again!

MOGA-MOGA-MOGA.

————————————-

Really? Still with the elitist mocking?

Buck-a-beer took one (1) whole day to pass out of a 4-year mandate. It was just a small gesture to working-class Ontarians who have had their pockets picked by thieving Liberals for 15 years.

#134 Stan Brooks on 08.17.18 at 11:10 am

Sorry wrong link, that one was about being kicked out of NAFTA negotiations by US and Mexico.

It is normal, socks boy and his gang says, (definition of normal could be quite strange for them), they are monitoring the situation as BoC is monitoring the inflation numbers with trembling hand and shaky behind.

https://ca.finance.yahoo.com/news/newsalert-consumer-price-index-3-123352832.html

Note: real rates are officially -1.5 % in this place, unofficially at – 7.5 %

#135 VanDog on 08.17.18 at 11:26 am

The foreign buyers helped drive up the pricing of high-end properties in the market, which helped prop up the rest of the market. That elastic band is starting to snap now finally. Homes should be more affordable in Vancouver. Million dollar mortgages are not the path to financial success.

#136 Steve French on 08.17.18 at 11:38 am

Smoking Man calls me a “communist” since i don’t agree with his extremist pro-gun Trumpism.

Yet, my Garth Turner (TM) approved diversified balanced and fully liquid investment portfolio has put $26,000 of fat returns into my pocketbook since i started investing 2 years ago.

Meanwhile Smoking Man’s hero Trump has a weird man crush on Putin– who is pure communist KGB.

It’s as if Smoking Man and his fellow “deplorables” live in a complete DC Comics bizarro world, in which up is down, and left is right.

#137 isuckless on 08.17.18 at 11:40 am

Tariffs are hidden taxes. Money collected through tariffs go to the government coffers. Assets are more expensive so consumption tax is higher.
Win for the government!

#138 Victor V on 08.17.18 at 12:13 pm

Canadian inflation rises 3% in July, highest reading since 2011

https://www.bnnbloomberg.ca/canadian-inflation-rises-3-in-july-highest-reading-since-2011-1.1125187

The Canadian dollar jumped on the report, gaining 0.7 per cent to C$1.3070 per U.S. dollar at 8:52 a.m. in Toronto trading. Yields on Canadian government two-year bonds rose to 2.12 per cent, from 2.08 per cent Thursday.

Swaps trading suggests investors are anticipating as many as three more hikes over the next year, after which the central bank is expected to go into a long pause. Odds of a rate hike by October are fully priced in, with the odds of a move as early as the next meeting on Sept. 5 at about 30 per cent.

#139 Y. Knott on 08.17.18 at 12:17 pm

#119 Good All (and Garth) – there’s some truth to this. The Japanese pulled the same sort of scams in Hawaii during the heady days of “Japan, Inc”. { – and Garth, if you come-up and tell me I’m crazy, I’m gonna’ screen-cap this and get it cast in bronze, I’ll be so flattered! – }

Here’s how the game worked; the Japanese would wander-into a hotel that was up for sale, and ask “How much?”

” – $Four million.”

“Not enough – we pay you $SEVEN million; take or leave.” { – and I apologize to anybody my pidgin Japanese-English may have offended – }

Needless to say, the owner would take – and no other hotel owner would sell to anybody but the Japanese – and everybody else who wanted to buy a hotel in Hawaii could put-up or shut-up. So it was very much a problem of sellers, not buyers (greed being a pillar of the human(?) condition, and a powerful incentive). And needless to say, when Japan found itself staring into the abyss, it ended badly.

– And come on, real estate in GTA and YVR hasn’t been “cheap” in a very long time, but I’m satisfied the ‘offshore-wealth effect’ did contribute to the (recent) craziness.

#140 Checkmate Poloz on 08.17.18 at 12:18 pm

Poloz is stuck now. His cuts a couple years ago and his insistence on kicking the can down the road have led to a dead end. Now he is seriously behind the curve. I don’t you can count on piddly .25% increases here and there anymore. I think they have the potential to be quite fast and substantial if we are going 3% and above official inflation now.

#141 Ace Goodheart on 08.17.18 at 12:28 pm

Re #136 Steve French:

Trump is pulling the classic American strongman tactic: support dictators, strongmen and totalitarian governments so long as they don’t exist in your own country.

Trump is just a little less cagey about it. Most of the American leaders who have done this have tried to hide it by saying they are supporting freedom or something like that, while secretly supporting dictators for their own hidden financial gain.

Trump is just wide open about it. “Chairman Kim, I want to build hotels on your beaches. If you let me do that, I’ll call off the dogs and lift sanctions”. Trump is just not at all bashful about openly supporting foreign dictators for his own private financial gain.

He actually advertises that he does this. And uses US tax dollars to pay for it.

#142 232 on 08.17.18 at 12:42 pm

#38 Dave in Kincardine
———–
*face palm*

#143 TheDood on 08.17.18 at 12:45 pm

#108 neo on 08.17.18 at 7:52 am
#106 IHCTD9 on 08.17.18 at 7:15 am
#101 Can You Dig It? on 08.17.18 at 3:57 am
Here’s a realtor with a $1768 lease takeover offer https://www.kijiji.ca/v-cars-trucks/markham-york-region/2017-mercedes-benz-s400-amg-4matic-only-6-500km/1377105323?enableSearchNavigationFlag=true

Jesus! $1800 a month for a car. That’s like renting a detached.
_________

I think Mr. Thornhill has just come to realize that. Probably another fake it till you make it douche. A measly 3 year lease and he can’t take it anymore after making only 17 payments. Now he’s on Kijiji begging for a bail-out.

Well, at least he got to drive an AMG for a year and a half – and for only $33,963.28 – so worth it!

What a goof.

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

Anybody on commission who has a leased vehicle with only 6,500 km on it in a year and a half of driving isn’t doing their job very well. They need to get out there and hustle.

_______________________________

Fake it til you make it – yup! Financial illiteracy on full display!

#144 Kelsey on 08.17.18 at 12:47 pm

#12 Kelsey on 08.16.18 at 5:33 pm
#18 Mattl on 08.16.18 at 6:13 pm
#57 crowdedelevatorfartz on 08.16.18 at 8:40 pm
#65 Linda on 08.16.18 at 9:11 pm
#79 RTMND on 08.16.18 at 10:03 pm
#80 Willy H on 08.16.18 at 10:07 pm

Help me out here, folks. If every single human being on earth were of the same tribe (say, Christian Caucasian), would immigration still be an issue for you?And would you still want to build walls? Or would you find some other reason to be xenophobic? :)

——-

Calling people xenophobic or insidiously suggesting that your opponents’ are racist without at all addressing the content of their posts is not an argument. Why don’t you try addressing the content of the posts with evidence and reason instead of looking to shut down debate or impose some form of self-censorship? In fact, this was the entire purpose of my post. Whether right or wrong, it’s unfair to call Canucks or Kiwis xenophobic as a knee-jerk reaction when some of our trading partners have outright banned foreign real estate investment for decades. How much foreign money and population growth we want in our major urban areas is an entirely reasonable debate.

#145 FOUR FINGERS WATSON on 08.17.18 at 12:53 pm

#131 Stan Brooks on 08.17.18 at 11:06 am

BoC with brown spots on their pants.
…………………………..

Not a problem Stan. We just turn the pants inside out and wear them for another week.

#146 Mattl on 08.17.18 at 12:53 pm

@ #109 Pinhead Train

#12 Kelsey on 08.16.18 at 5:33 pm
#18 Mattl on 08.16.18 at 6:13 pm
#57 crowdedelevatorfartz on 08.16.18 at 8:40 pm
#65 Linda on 08.16.18 at 9:11 pm
#79 RTMND on 08.16.18 at 10:03 pm
#80 Willy H on 08.16.18 at 10:07 pm

Help me out here, folks. If every single human being on earth were of the same tribe (say, Christian Caucasian), would immigration still be an issue for you?And would you still want to build walls? Or would you find some other reason to be xenophobic? :)”

———————————

First how do you even know the background of the people you’ve listed above? Are you assuming that anyone that has an opinion on YVR RE and Foreign buyers is White and Christian?

And how does acknowledging that Foreign investment has had a large impact on YVR real estate make you a xenophobe? You don’t even know my stance on tax and foreign investment – I’m against the tax and for foreign investment. I couldn’t care less who is buying YVR homes – I’ve been a net benefactor of the YVR run up. I hope if continues forever. But I am on the ground here, am networked in banking and construction, and you’d have to be ignorant to think that 15-25% reported foreign investment in the most expensive areas of YVR is a nothing burger. To think that FOMO was driving homes in Richmond from 1MM to 3MM in a few years, and those capital gains were having to little to know impact on the great Vancouver market requires an astonishing level of confirmation bias. So keep doubling down on this position, calling everyone a xenophobe, and when we get true beneficial ownership reporting lets see where we land.

#147 Art Vandelay on 08.17.18 at 12:53 pm

Yo dogs the condo will be listed today, bring your game face and best offer!

As emotionally attached as I am to the place, I still know leaving to pay $400/month (my share of the rent) at my friends place is a solid move. The only thing on my mind is which funds to put my cash into once the place sells. AI and Robotics is always something I come back to, mainly because it’s the next transformative event we can look forward to. Hold onto your hats folks

#148 jess on 08.17.18 at 1:03 pm

..”HM Revenue and Customs is doing a roadshow in Monaco to raise awareness of two major changes to UK tax legislation.

The legislative changes refer to Corporate Criminal Offences (CCO) and the HMRC ‘Requirement to Correct’ (RTC) that legally obliges taxpayers who have undeclared UK tax liabilities in respect of offshore interests to tell HMRC about outstanding tax due by September 30, 2018.

This gives tax payers the opportunity to put their affairs in order before tougher penalties come into force in October 2018, says HMRC.

Under the rules, actions like renting out a property abroad, transferring income and assets from one country to another, or even renting out a UK property when living abroad could mean taxpayers face a tax bill in the UK.

Other examples of offshore assets include art, bank and other savings accounts, boats, life assurance policies and pensions.”

#149 IHCTD9 on 08.17.18 at 1:08 pm

#123 MF on 08.17.18 at 10:08 am
#110 IHCTD9 on 08.17.18 at 8:04 am

Meh we’ve been hearing the “economic hurt” is just around the corner for years on this blog and here we are.

The problems you cite are not unique to Canada, but the whole western world.

I’m a Trump fan, but his tax cut and attack on Canada were both dumb moves. The US deficit will create a problem in the future if not reigned in, and at that point it will 100% create a crisis. The NAFTA attack is totally unnecessary and more of a domestic vote buying tactic than anything else.

We’ve got first world problems.

MF
—————-

Give it time.

If I looked at my investments after 10 years I would have said “Meh”. After 20 years it started getting interesting. Give them 20 more years and I will be looking a a giant pile of cash, one that just kind of snuck up on me as I carried on living life doing the same thing I’ve always done, without putting a whole lot of thought into it.

Think of our Provincial debt in terms of the above. Consider Ontario pays less than half the interest that I typically get on my investments. It is going to take DECADES for the SHTF on the revenue end of things. Interest on debt is the 3rd highest cost on the budget already, so it’s now “starting to get interesting”.

Leading up to the crisis though, taxes and fees will be “Liberally” (heh) applied to maintain the system, business owners and “rich” folks will be the beasts of burden. Throughout all of it, more crap decisions will be made, and more debt accumulated.

I know I’m not going to wake up tomorrow amidst burning cities (well maybe if I lived in BC…), but I will without a doubt be subject to some pretty extreme measures at revenue generation before I’m done. Not only from the Province, but also the municipality and the feds.

I’m not just going to sit there and make it easy… (neither should anyone else).

#150 poor parakeet poloz on 08.17.18 at 1:09 pm

the bank of canada is utterly clueless. not only should they never have cut interest rates to 1/2%, they should have already be at 3% NOW!!

oh well. hiring a bunch of government yes men..

interestingly, 5 year GoC is unchanged today. nobody has any faith in the parakeet

#151 Ace Goodheart on 08.17.18 at 1:11 pm

So the inevitable SEC investigation is ramping up after TSLA CEO and Chairman Musk decided to tweet he had funding lined up and was considering taking the company private at 420 per share.

Where did the number 420 come from? Apparently he was considering 419 but decided 420 was a nicer looking number.

So the company that builds cars in a tent, doesn’t understand basic industry benchmarks for assembly line mass production and just spent billions on a fully automated factory that didn’t work, is now being investigated by the SEC.

Now perhaps it is possible to short It?

#152 TurnerNation on 08.17.18 at 1:14 pm

Larry Kudlow..what are the chances this clownish TV face was hand picked to serve elites at the top in USA.
Was he the only economist in the country available?

Like his immediate boss he’s a TV show personality (You’re hired!) and had a role in a movie.

https://www.imdb.com/name/nm2086569/

Again..what are the chances all these top guys have been on the screen. I mentioned Musk already. Check his bio. above.

The whole world is a stage. We’re being had. Even former drama teachers here, tears roll on command.

#153 Wrk.dover on 08.17.18 at 1:23 pm

Ixnay on the ucka eerbay, I want some of Granny Clampetts crawdad and shine, so I can be as jovial as Jethro Bodine!

#154 jess on 08.17.18 at 1:33 pm

U.S. Sues Operators Of Pirate Radio Station That Aired Alex Jones’ Show

August 16, 20181:58 PM ET

https://www.npr.org/2018/08/16/639239647/u-s-sues-operators-of-radio-station-that-airs-alex-jones-show-saying-it-s-not-li

if any of the commissioners wanted to comment on the president’s continuing attacks on the press. “Do you believe the president’s rhetoric is harmful to the values enshrined in the First Amendment?” she asked. All three Republican members of the commission declined to respond, but the single Democratic commissioner, Jessica Rosenworcel, said, “This is simple, this is easy. Yes it’s harmful.”
The other commissioners acknowledged the agency was responsible for protecting the First Amendment. “The First Amendment acts as a restraint on the government,” said Commissioner Brendan Carr. “The whole purpose of the First Amendment is to protect strong, robust, sometimes rough rhetoric.”

https://www.motherjones.com/politics/2018/08/trumps-favorite-fcc-chairman-had-a-really-bad-day-on-capitol-hill/

#155 yvrmc on 08.17.18 at 1:34 pm

Somebody touched on this earlier , re stopping the practice of flipping properties . My question is what is wrong with taxing home sales at 25 % if sold in the first 5 years and decreasing that percentage the longer a property is held. Would this not seriously slow down flipping properties and encourage people to use homes to live in not create businesses out of. Or is this too simplistic ….

#156 Zapstrap on 08.17.18 at 1:50 pm

Realtor spin:
http://victoriaseminar.com/

and over the cliff in Van:
https://www.straight.com/news/1117541/point-grey-single-family-home-prices-fall-128-percent-year-dunbar-detached-homes-down

#157 Linda on 08.17.18 at 2:03 pm

‘Akashic Record’ – my post does not endorse xenophobia. It specifically points out that the foreign buyers policy is xenophobic – the term I used was ‘xenophobic tax grab’. My point is that anyone who purchases a property is paying the same amount of taxes & to argue that ‘foreigners’ should be taxed more because they are somehow getting an advantage over locals (because they can afford to buy what the locals can not) are trying to justify an unjust policy. I also noted that Canadian citizens from other parts of Canada are being lumped in with ‘foreigners’ & have yet to read a credible defense of such an attitude, other than envy that ‘rich’ people can afford to buy. Hate to break it to the envious, but rich people have always been able to outbid those with lesser means. Obviously those who are selling will take the higher bid. Are we now going to penalize those who sell to the highest bidder? Because the arguments that ‘foreigners’ are driving up prices overlooks that the local sellers are pocketing that money & are not being ‘fair’ to locals who can’t pay as much. Even worse, the local sellers might end up being richer than the other locals – unfair, so unfair, whine, whine, whine. They don’t deserve it, why should ‘they’ have money when I don’t, whine, whine, whine.

Don’t waste time envying others. It won’t make your life any better & for sure it won’t make you a happier person.

#158 NoName on 08.17.18 at 2:23 pm

#113 dharma bum on 08.17.18 at 8:40 am

Yah, yah, yah….all of this stuff is interesting, but let’s talk about what’s REALLY important:

Ontario is on the verge of BUCK-a-BEER!

Yes folks, Doug Ford is tuned right in to what it’s gonna take to Make Ontario Great Again!

MOGA-MOGA-MOGA.

—-

you are so wrong. maybe some beer will be selling for 1cad but we will pay more for everything else. take a look at tabel.

https://ontariobev.net/base-prices-for-ontario-cider-and-spirits-going-up-this-month/

Toronto – The C. D. Howe Institute, an independent not-for-profit research institute, today reported that while the baseline/floor pricing for beer is being reduced to $1.00 through buck-a-beer, it is being raised for spirits and cider.

The price floor for Class A spirits, including whisky and vodka, will go up 16% from $30.25/litre to $35.10/litre while cider will raise more than 15%, according to C. D. Howe data outlined below:

#159 NoName on 08.17.18 at 2:27 pm

#121 akashic record on 08.17.18 at 9:42 am
“Do you have any example in the entire universe about societies without walls?”

INTERNET

#160 jess on 08.17.18 at 2:31 pm

Deutsche Bank’s 2017 Annual Report …It shows that 28 percent of Deutsche Bank’s €48 trillion derivatives book is not being centrally cleared but is simply bilateral contracts between it and another party. (That represents approximately 15.28 trillion U.S. dollars for a bank with $23.1 billion in equity capital.http://wallstreetonparade.com/2018/08/deutsche-bank-and-citigroup-bleed-more-equity-yesterday-the-reason-should-concern-us-all/

#161 EB on 08.17.18 at 2:31 pm

So long as any desire to look after your own community is disparaged as “evil tribalism”, I forecast nothing but continued growth for the populists.

#162 Stan Brooks on 08.17.18 at 2:36 pm

#138 Victor V on 08.17.18 at 12:13 pm
Canadian inflation rises 3% in July, highest reading since 2011

https://www.bnnbloomberg.ca/canadian-inflation-rises-3-in-july-highest-reading-since-2011-1.1125187

The Canadian dollar jumped on the report, gaining 0.7 per cent to C$1.3070 per U.S. dollar at 8:52 a.m. in Toronto trading. Yields on Canadian government two-year bonds rose to 2.12 per cent, from 2.08 per cent Thursday.

Swaps trading suggests investors are anticipating as many as three more hikes over the next year, after which the central bank is expected to go into a long pause. Odds of a rate hike by October are fully priced in, with the odds of a move as early as the next meeting on Sept. 5 at about 30 per cent.

#140 Checkmate Poloz on 08.17.18 at 12:18 pm
Poloz is stuck now. His cuts a couple years ago and his insistence on kicking the can down the road have led to a dead end. Now he is seriously behind the curve. I don’t you can count on piddly .25% increases here and there anymore. I think they have the potential to be quite fast and substantial if we are going 3% and above official inflation now.

If there are expected 3 more rate hikes that brings the rate to 2.25 %.

Inflation will only accelerate with loonie going sub .70, it could simply explode, that 3 % quoting energy price increases is just a joke.

We are entering 10 % + yearly inflation period for at least a decade, decade and a half and the BoC and stats Canada joke rates and statistics will absolutely kill retirees and savers.

A retiree can’t live anywhere near big cities, in small towns they won’t have doctors and hospitals, soon their entire income won’t be sufficient for food and bills.

BoC will lie that inflation is transitory, they will hope that it magically disappears somehow.

Bad times ahead.

#163 Stan Brooks on 08.17.18 at 2:48 pm

#149 IHCTD9 on 08.17.18 at 1:08 pm

I won’t lend Ontario at 12 %, with official inflation 8-10 % and mountain of debt/high risk, who in their right mind would lend a bankrupt province?

Oh, I forgot, your pension fund.

#164 Evangeline on 08.17.18 at 2:59 pm

All this talk about nutbar Larry reminds me of how all the “smart” people predicted that Donald Trump would never win the election. :-)

#165 Stan Brooks on 08.17.18 at 3:06 pm

Loblaw anticipates higher food prices soon due to trade war pressures

https://www.cbc.ca/news/business/loblaw-earnings-1.4760922

See “a very strong possibility of an accelerating retail price inflation in the market,” says Galen G. Weston

Note, they just need an excuse and that prices always go up, never down.

15 % yearly grocery price increases?

#166 James on 08.17.18 at 3:10 pm

#136 Steve French on 08.17.18 at 11:38 am

Smoking Man calls me a “communist” since i don’t agree with his extremist pro-gun Trumpism.
Yet, my Garth Turner (TM) approved diversified balanced and fully liquid investment portfolio has put $26,000 of fat returns into my pocketbook since i started investing 2 years ago.
Meanwhile Smoking Man’s hero Trump has a weird man crush on Putin– who is pure communist KGB.
It’s as if Smoking Man and his fellow “deplorables” live in a complete DC Comics bizarro world, in which up is down, and left is right.
…………………………………………………………………
Don’t fear, Smoking Man is a deranged senescent timeworn old man. He subsists in his own diminutive world surrounded by no one and nobody cares. He calls everyone who has an intelligent position that is contrary to his position either a lefty, pussy, left wing anarchist, socialist, communist, antifa, democrat or whatever comes out of his senseless old man mind. Too many years of substantial smoking and drinking have damaged what little grey matter he may have maintained. His intellect has plummeted to a level that only a Trump devotee would equate with. If you don’t believe me go look at some of his posts on Periscope. Lots of hate in those videos.

#167 Home Slice on 08.17.18 at 3:19 pm

Trump blames Canadian wood imports for forest fires in California

https://mobile.tmxmoney.com/news/read/?id=7874273791068904

Seroiusly???

Straight up lunacy

#168 BillyBob on 08.17.18 at 3:32 pm

#125 MF on 08.17.18 at 10:18 am
#109 Gravy Train on 08.17.18 at 8:03 am

They would find some other reason to be xenophobic. Over a century ago when a lot of Irish were immigrating to the west there was still tension between them and the native population (often with British roots). The cycle was repeated with successive waves of European immigrants that came later.

MF

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

Not just Europeans by any means. In Vancouver there are some pretty clear waves of Chinese immigration: the original one several generations now ago, the big Hong Kong influx in 1996, the current Mainland tidal wave.

Each has looked down their noses at the subsequent arrivals. Interestingly, some of the most vocal proponents of anti-foreigner laws in Vancouver are of Asian descent.

It’s a human trait to be tribal, not a European thing.

Although the self-loathing DOES seem to be a white European thing lol.

#169 Gravy Train on 08.17.18 at 5:01 pm

#136 Steve French on 08.17.18 at 11:38 am
“It’s as if Smoking Man and his fellow ‘deplorables’ live in a complete DC Comics bizarro world, in which up is down, and left is right.” You left out top is bottom, and strange is charmed. Their world is ‘quarky’ if not quirky. :)

#170 akashic record on 08.17.18 at 6:11 pm

#158 NoName on 08.17.18 at 2:27 pm

#121 akashic record on 08.17.18 at 9:42 am
“Do you have any example in the entire universe about societies without walls?”

INTERNET

That’s where you live? Is that the same place where several people were just placed behind the walls of bans, so they can be nowhere to be found?

#171 akashic record on 08.17.18 at 6:21 pm

#132 Gravy Train on 08.17.18 at 11:09 am

#121 akashic record on 08.17.18 at 9:42 am
“Do you have any example in the entire universe about societies without walls?”

The Canada-U.S. border doesn’t have walls. :)

Why don’t you try to cross it without taking anything from Canada?

If you somehow make it, live on the other side for a year, then tell us if you really didn’t hit any walls.

#172 Gravy Train on 08.17.18 at 6:22 pm

#146 Mattl on 08.17.18 at 12:53 pm
“@#109 Pinhead Train” Nice!

“First how do you even know the background of the people you’ve listed above?” I don’t know, and don’t need to.

“Are you assuming that anyone that has an opinion on YVR RE and Foreign buyers is White and Christian?” No, I was presenting you with a thought experiment, and asking you to use your creative imagination to suppose a hypothetical world in which everyone is of one race and religion. I could just as easily have said Rastafarian blacks as Christian whites; it didn’t matter. I asked you to consider three thought-provoking—and possibly life-changing—questions, but I suspect you didn’t or couldn’t answer them. Sorry for asking you to think; after all, thinking is hard. As Bertrand Russell once said, “Most people would rather die than think, and many of them do.”

“And how does acknowledging that Foreign investment has had a large impact on YVR real estate make you a xenophobe?” By definition, a xenophobe is one unduly fearful of what is foreign and especially of people of foreign origin.

“You don’t even know my stance on tax and foreign investment – I’m against the tax and for foreign investment.” You wrote in a previous comment, “You don’t have to be a racist or xenophobe, or support these taxes, to acknowledge that HAM had a significant impact on the run up in prices in YVR. Garth, you are dead wrong on this one, foreign buyers […] played a large role in yvr house prices.” I haven’t responded to the rest of your comments, because you entirely missed the point of my earlier comment, and I couldn’t be bothered trying to explain it to you; any explanation would be lost on you, anyway. Unlike you, I’ll refrain from the name-calling. :)

#173 Linda on 08.17.18 at 7:32 pm

‘Matti’ – 15 to 25 percent foreign ownership being reported – who exactly is reporting this? When the whole foreign ownership thing erupted, the BC government came up with MUCH lower numbers – I recall them being under 5 percent – & they used those numbers to justify the current new FO taxes. So who is claiming these higher rates of foreign ownership? Can you provide details/links to these stats? Or did you mean to say that some BC neighborhoods have 15-25% FO? That I could believe, since ethnic clustering is common, hence ‘Little Italy’ ‘Chinatown’ etc.

#174 Terry Zabolega on 08.18.18 at 11:30 am

3.50% on GICs. HCG is feeling the sting as rising interest rates make it more expensive to raise term deposits.

https://twitter.com/Mr_Silbergleit/status/1030598581219028993

#175 Terry Zabolega on 08.18.18 at 11:33 am

This is close to New Zealand …

https://twitter.com/Mr_Silbergleit/status/1030837586506338304