The trap

Real estate taxes are wealth taxes. Envy taxes. They’re all about governments fleecing cash, not making properties accessible to first-time buyers. In fact, they have the opposite effect. It’s time the politicians were called out.

This includes the so-called BC ‘speculation’ tax, foreign buyer taxes in Ontario and BC, uber property (luxury) taxes, plus Van’s crazy ‘empty house’ tax.

By whacking non-residents, as the example posted here yesterday proved, locals are effectively prevented from selling to willing buyers. Realtors, lawyers and movers make nothing. No land transfer tax is paid the city.  Folks who want to live and invest in Canada are repelled. It doesn’t mean sellers will drop prices. That’s not the way markets work. Instead, the non-resident will probably shop in a lower price range to reduce the tax load, increasing competition among those looking for more affordable housing. First-time buyers lose.

Like the B20 stress test, which reduces credit by creating a higher bar for borrowing, government actions like these distort the market, push buyers down the price scale and thereby inflate the cost of cheaper homes. First-timers lose again.

Simply put, governments should not set prices nor seek to tell you who can buy your property. Not their job.

Taxing secondary residences, recreational properties or business-use condos as BC is doing is a tax on assets bought with after-tax dollars, disguised as a measure to make real estate more affordable. There’s no evidence it is working, while penalizing those who have owned properties for years, paid their way and played by the rules. There is no evidence taxing lightly-used properties has increased the rental stock. But we’re sending out a message that Vancouver is a high-tax, high-cost, unfriendly, capricious place. Cost-conscious tech/AI startups ultimately drift off to cheaper locations. The young pay the price in lost opportunity.

Calling a tax on cottages, cabins, ranches and vacation homes a levy on ‘speculation’ is bogus. Speculating is flipping – short-term ownership – where gains are involved. All governments need do in order to curb true speculation is ensure the proceeds of flips are taxed as income or subject to a valued-added levy. But the tax is not about speculating. It’s merely a revenue-generator. And by taxing real estate more, housing becomes more costly.

Sadly, opportunistic politicians seeking public office have turned foreigners into scapegoats for our own house lust. Because 80% of people in Van, for example, think prices are high because of Chinese dudes, politicians like the current crop of Dippers mine that myth. Stats Can, however, shows just 3% of detached houses are owned by non-residents. CHMC nailed it with this conclusion:

“…the narrative around foreign investment in Vancouver with an endless flow of funds has created a compelling story encouraging residents to enter the market. The actual size of foreign investment in Vancouver would therefore not matter if the narrative were compelling enough to alter households’ beliefs and therefore encourage exuberant expectations of future prices.”

Exactly. You’ve been had by those with a vested interest in endless price escalation, feeding FOMO among the masses. I do not need to tell you who.

Moreover, you are being deluded by dishonest or dumb politicians into believing real estate ownership is a right, and government’s job is to protect that. In truth, in an open society, such a right does not exist. It never will.

The market was rolling over before these taxes were introduced. Rising interest rates combined with over-valuations were correcting the market. Government overkill risks creating a climate in which people don’t buy because they fear loss. It’s human nature. Just as ill-conceived pro-housing policies (RRSP homebuyer plan, first-time buyer grants, land transfer tax breaks, 0/40 mortgages) artificially inflated housing values, so this bevy of taxes will artificially depress them and distort forces.

Mr. Market eventually solves mispricing. And correctly. The stress test means buyers have less to spend. Rising rates make that debt more expensive to carry. Prices therefore adjust lower on their own until there are enough buyers to find and maintain balance in a community’s housing market. But also realize time does not stand still. The hood your parents could afford to buy into sits in a larger urban centre where competition for housing has increased. It’s a fantasy first-time buyers will now, or ever, be able to get a detached house within walking or biking distance of a downtown job. Give it up, or fail trying.

Finally, let’s not forget falling real estate values nail people who parked most of their net worth in their properties. So when politicians come along and arbitrarily change zoning, allowing a duplex next door, or jack property tax just because you live on a leafy street, or prevent you from selling your house to a dude from Washington State, or depress the entire market with a new, unjustified wealth tax, innocent people are victimized. Almost always they’re not rich, greedy or deserving of it. They have families, mortgages and tight budgets like the rest of us. There are consequences when so many millions are taken away from households and diverted to government.

The experiment thus far is a joke. Expensive houses remain too expensive for average families to afford. Cheaper homes now cost more. Money, employers, jobs and opportunities are actively seeking lower-taxed environments. And nothing has become more ‘affordable.’

So, go ahead and be angry. But be careful what you wish for. Be even more careful who you vote for. It’s a trap.

186 comments ↓

#1 crowdedelevatorfartz on 11.08.18 at 2:59 pm

“the tax is not about speculating. It’s merely a revenue-generator.

++++++

The govt “wins” again.
I saw a headline yesterday the “speculation tax” has hauled in 30 million so far ….

#2 Blackship on 11.08.18 at 3:04 pm

Can some please tell me if I should cash in my etf portfolio and go all stocks? 500k portfolio
Thx

#3 Brett Simms in Calgary on 11.08.18 at 3:08 pm

Great blog – because it’s true.

#4 Steven Rowlandson on 11.08.18 at 3:13 pm

Cheaper homes don’t exist with a free market and any punitive tax that doesn’t encourage low ball bids won’t work either. High home prices are the result of a learned mental disease. Genocidal Greed for tax free profits regardless of the consequences for the nation and its people.

#5 Property Accountant on 11.08.18 at 3:35 pm

Re#2 Blackship

ETF’s have 3 main advantages:
– extremely low transaction cost (most brokerages will not charge you commission or it will be in cents, example Questrade, Itrade)
– low MER costs – 0.05-0.9% on most ETF’s
– diversification (all own over 30 securities and some ETF’s).

With 500K portfolio you need to beat those points above. My advice is to set up account with Interactive Brokers Canada (discount broker, 1$ transaction cost on any purchase / sale , or other tiered structure). Transfer all ETF’s there, sell them slowly, but first find out what each ETF holds by studying their holdings in disclosure reports and buy what they have in replacement, at least most of it. Aim at 35-50 securities in your portfolio, having proportionate amount from all ETF’s you held before. Additional benefits of diversification if you have over 40+ securities are negligible.

Currently your MER on all your ETF’s would be on average 0.6%, which is $3000. You can save 2500$ of that by doing it yourself, (500$ will be spend on equity transfers and buying / selling commissions).

Question to you, is it worth your time ?

#6 Smartalox on 11.08.18 at 3:40 pm

The problem is that taxes are the opioids of governments. They’re addicted. And even changing one government for another, when they get a taste of that sweet, sweet revenue, they can’t shake the habit.

Like when junkies give up food for drugs, it’s especially bad when governments reduce revenue from consumption taxes (like the GST) and can’t face the fact that putting things back ‘the way they were’ is probably better after all, but that would entail admitting to having made mistakes, and addicts are notoriously reluctant to do so.

Unless a government makes a commitment to actually kicking the habit; and even then, rates of recidivism. are very high.

#7 Richard Gibbons on 11.08.18 at 3:43 pm

Interesting post. I’ve never seen someone who believes in the free market argue so earnestly that reducing demand for a good does not reduce prices.

Taxing an asset does not make it cheaper. How obvious is that? – Garth

#8 RWZM on 11.08.18 at 3:48 pm

Man, somebody’s mad today. Have you got a deal falling through or what…

“It doesn’t mean sellers will drop prices. That’s not the way markets work.”

Of course not, they keep the price high forever and never, ever sell out of pure principle.

“In truth, in an open society, such a right does not exist. It never will.”

Where’s the sacred text where this maxim comes from? In an open society a lot of things would be different. In any case, a foreign buyer tax is not based on the premise that “ownership is a right.”

“give it up, or fail trying.”

Haha, this blog should’ve originally been called “Give It Up, or Fail Trying” – would’ve been hilarious.

I don’t think most people are thinking of the 30-year increases that have affected detached housing right in the middle of downtown.

#9 Doug t on 11.08.18 at 3:52 pm

This BC crowd is out of control AND boring

RATM

#10 Chinese Dude on 11.08.18 at 3:52 pm

Real estate taxes are NOT always wealth taxes.

If the BC government slashes provincial income tax and increases property tax rate on EVERY real estate property in BC, the result would be far better.

We all know they would not do that. NDP always tax the “rich”.

#11 AGuyInVancouver on 11.08.18 at 4:01 pm

Folks who want to live and invest in Canada are repelled. It doesn’t mean sellers will drop prices.
_ _ _

That’s just hogwash. If sellers want to sell their product they’ll drop the price. Simple supply and demand. It’s ludicrous that anyone, least of all someone who represented Canadians in parliament, thinks foreigners should have some inherent right to buy property in Canada.

You’re apparently shocked at the pushback from the peanut gallery on your hypothesis yesterday. The Reagan-Thatcher era is dying, people have seen how laissez-faire capitalism screws over the average joe. Move on.

#12 YVR Reality on 11.08.18 at 4:03 pm

In YVR, they are no longer “foreigners” on paper because of the countless loopholes the “Chinese dudes” have all figured out. Resident students buying million dollar homes, shell companies, drug money laundering and the countless realtors and lawyers co-signing properties. I have 2 close aquaintences who solely conduct real estate business with overseas buyers from China (for over 10 years). We aren’t making this stuff up, Garth. It happened, and created this mess. ALL the locals can attest to it because we live it… but we also know there’s no convincing you of the effect it has had on our real estate values.

I gave stats. Your turn. – Garth

#13 Toronto guy on 11.08.18 at 4:12 pm

I think you’ve over simplified things. If cities become so expensive that people can’t live there, they will leave. All those bright minds and their future earning potential gone to other tax jurisdictions, and you’re left with a half filled city full of dormant housing assets. Maybe the government hasn’t done the right things, fair enough, but saying the government should do nothing while the market corrects itself over the “future” isn’t sufficient.

Some ideas I’ve thought of that might have helped: (1) Increase the capital gains taxes on second properties, (2) Have a cap on the principal residence exemption. I don’t agree with someone buying a house for $100,000 and selling it for $20,000,000 (obviously a fake scenario I’ve made up for effect), would pay NO tax on their sale. Perhaps there could be an capital gains exemption cap, say $2 mil or something (we could argue about the number), adjusted yearly for inflation, and the remainder taken into income as other capital gains are.

#14 Homo Petroleumus on 11.08.18 at 4:13 pm

#159 Asterix1 on 11.08.18 at 12:03 pm
Trudeau’s next apology….

“On behalf of all Homo sapiens, I wish to apologize for the pain and suffering that we inflicted to the Neanderthal 40,000 years ago”

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

Apology accepted. Now build the pipeline. Canada is losing a billion a week waiting on you. The pipeline would be paid off by Christmas.

#15 Paully on 11.08.18 at 4:18 pm

If the Government was seriously interested in promoting home affordability, they should shut down the CMHC. There is no reason that the Taxpayers should be backstopping almost-million-dollar mortgages. CMHC started as a great idea to help people to become homeowners, but now it is having an opposite effect by artificially supporting demand at very high price levels.

#16 Caleb Landry on 11.08.18 at 4:24 pm

The problem with goosing markets with cheap credit and flooding our country with wealth migrants is that it permanently hurts people who aren’t in the market yet too. Ie, if we have to cry a river for a guy that will be underwater on his mortgage for buying too much house why isn’t anyone prepared to cry for the guy who has to pay hundreds of thousands more for an inflated house in the first place. In either scenario there is a loser. So, people with assets have been winners for the last 10 years – at the expense of people who don’t own assets – what’s wrong with making non-asset owners winners for once. Ie, it pays to not be in the market. Frankly, the social contract has been completely broken. This monetary experiment and neo-liberal world order has divided the world in to winners and losers. There isn’t a middle ground anymore – all of it was done to rescue baby boomers from a giant recession. Well, guess what – it didn’t work. It gave the world Trump and Brexit and any number of political dynamics that you and every other wealthy person seems to loathe. You forget that they are the result of boomers getting their asses saved and everyone is angry about the inequality that has resulted from it. It’s not rocket science – you work over a part of the population hard enough and they are going to fight back. Not a single banker or executive went to jail after the recession – not one. We should have let the system do a massive reset. We didn’t. The depression hurt, badly. But the next 40-50 years in America were the best economy the world has ever seen. It wiped out all the poor decisions people made during the 20’s. Speculators were pushed out of the financial system and it re-built itself – for the better. Here we are, with mountains of debt, an unbelievable amount of wealth that has gone all the way to the top 1% and governments that have been voted in to try to do something about it. So, when everyone is crying about the poor homeowners who are going to fall behind – just remember that no one was crying for the guy who got left behind. The harder it falls, the better – it will teach everyone about moral hazard and that there isn’t a free lunch. The zero sum game of finance will show it’s ugly head and remind an entire generation that there is actually a COST to borrowing money.

#17 The Real Mark on 11.08.18 at 4:25 pm

The ‘its Chinese money’ meme is absolutely and utterly disgusting. But unfortunately it is allowed to persist and isn’t vigorously resisted because Chinese-Canadians do not have a cohesive lobbying organization. If the Realtors concocted a false “its Jewish money” narrative, the B’nai B’rith would have been all over them a long time ago, even hauling newspapers and media outlets who published articles and ‘studies’ fomenting the suggestion of such before human rights tribunals and the courts. Shame on the RE sell siders who have pitted Canadians against Chinese-Canadians based on a completely falsehood. Particularly with respect to areas for which they form cohesive ethnic communities and try to maintain some of their culture, such as in Richmond and Markham.

As to the topic of this blog post today, I personally have no problem with increasing taxes against RE as a way to curb speculation. The actual income of stocks is heavily taxed at the corporate level, and even on the employees’ compensation which is mostly fully funded by corporations. RE owners have been able to earn imputed income and have basically gotten a free ride, with property taxation not even sufficiently high in most cases to keep up with municipal pension obligations and infrastructure decay. Municipal debt continues to explode across Canada.

And as for those 3% of homes owned by non-residents? The data I’ve seen would seem to indicate that the largest group of foreign national owners is US residents. Which is completely natural since we share a border. Inter-national marriages and families due to the common border and mostly common culture makes US ownership of Canadian RE a natural fit.

#18 the ryguy on 11.08.18 at 4:36 pm

Lol, its funny that people think they get to vote on taxes. Canada has given ELEVEN BILLION DOLLARS in foreign aid the last two years alone. Did any of us get a chance to vote on that? Where does this money go?

Look it up, lazy. – Garth

#19 JSS on 11.08.18 at 4:39 pm

Recent dividend increases from the following:
– Telus
– Canadian Tire
– CT Reit
– Sun Life
– Magellan Aerospace

Rub tummy x5 above

#20 Worst post to date on 11.08.18 at 4:43 pm

Seriously garth? Your whole argument is based on lack of price drops? Inventory has been building steadily in Van, AND detached prices HAVE dropped. Give it 2 more years and see.

#21 Kozman on 11.08.18 at 4:45 pm

I find it incredible, how many people cannot Critically think on their own, but instead stick to an ideological mandate or personal belief prior to even understanding the problem.

If you have lived in Vancouver over the past 8 years, you can do nothing except be assaulted by the MSM, politicians and friends expressing the “facts” that Chinese money is spiking the housing prices and demand.
Garth is providing an alternative angle and approached.

Read it critically.

I wonder how many just glaze over his words, to find the one paraphrase “Chinese money was not impacting YVR housing” and just attack. Did you not read the words leading up to the paraphrase or after??

Think for yourself people, your world will get so much larger.

Google “broken window fallacy” by Frederic Bastiat.
https://en.wikipedia.org/wiki/Parable_of_the_broken_window
Arguably, what garth is talking about, is by taking out foreign investment and capital inflow (by punitive gov’t taxation), there will LESS overall economic activity in that community. So YVR and BC government are essentially breaking the window in its own community to protect housing. However, overall the entire economy will experience less growth.

By trying to fix the obvious housing problem in the near term, the unintended consequence is that this could be economically stifling for jobs, wage gains, expansion in the YVR area.

#22 They should never have called it on 11.08.18 at 4:50 pm

Calling it what they did was plain stupid. There’s no getting away though, that it is a very effective way to get homes freed up for buyers and renters. We need a sustainable economy where workers and families can live and contribute. The only thing I still wonder is how – with all the housing issues in Whistler, they got away with no tax there. Somebody was sleeping with someone.

The days of two old folk living in a 3,500 sq ft home while families with two kids are in condos in Vancouver will also come to an end soon enough.

Those days will not end. You drank the NDP Kool-Aid. – Garth

#23 Damifino on 11.08.18 at 4:53 pm

we’re sending out a message that Vancouver is a high-tax, high-cost, unfriendly, capricious place
————————-

My observations as a Vancouverite, precisely.

#24 SimplyPut7 on 11.08.18 at 4:59 pm

Garth in a perfect world, the government would not restrict building or create taxes that reduce incentives to build more houses or purpose-built apartments. We wouldn’t have overpriced small homes or too many speculators as they would not be interested in going into debt for homes with price growth of only 3%-5% a year.

Places like that exist in the USA. For now, future home buyers in Canada will have to just hope one day their incomes will be in-line with the homes they can afford purchase.

Or give up, invest their mortgage payments in financial assets and go join the FIRE movement. Travel and live in affordable places around the world.

#25 the ryguy on 11.08.18 at 5:02 pm

Look it up, lazy. – Garth
—————————-

Haha very funny. I know I was never given the opportunity to vote on this, was my point. Id love to hear the verbal gymnastics required to justify why Peru needs $35M of our tax dollars..or Yemen $38M…btw thats just in 2017.

#26 Cristian on 11.08.18 at 5:02 pm

“Folks who want to live and invest in Canada are repelled. ”

So buying a house is now called investing?…
Buying a jug of milk means investing in the dairy industry? And buying underware – investing in the textile industry? Getting high on weed – investing in the cannabis industry?
Where are the good old days when people were buying a house to live in, without thinking or caring much how much it was going to be worth in a year or 10 or 50?

#27 T on 11.08.18 at 5:02 pm

Taxing may not make it cheaper directly, but your own example from yesterday seems to indicate that it checked the irrational exuberance that contributed to never ending price increases.

After such failed transactions sellers will have to reduce prices right? Prices are just sticky downward as you often point out.

If markets work, won’t increased demand at the affordable end of the market incentivize construction of more affordable housing?

There was no irrational exuberance in the example yesterday of a person bidding on a property whose price had been reduced. – Garth

#28 SunShowers on 11.08.18 at 5:16 pm

Counterpoint:
Wealth taxes are awesome and we need more of them.

The redistributive power of income taxes are severely hampered by the ability of the very wealthy people who would be hosed by them the most to employ esoteric tax shelters.

Use the wealth tax to subsidize new starter home builds or something.

#29 Kanye West for POTUS 2020 on 11.08.18 at 5:17 pm

So….Donald Trump is “workplace violence”? LOL HAHAHAHA!

These feminists are making fools of themselves. The video was even mocking Donald Trump, but even that constitutes workplace violence according to Canuck women.

Donald Trump should build a wall around the Greater Toronto region, and ask the UN to quarantine the city for feminist infestation. Pests are Rats and termites, bro.

https://www.thestar.com/news/gta/2018/11/08/former-employee-sues-mpac-alleging-workplace-violence-following-trump-themed-training-video.html

#30 Dongareff on 11.08.18 at 5:18 pm

“Simply put, governments should not set prices nor seek to tell you who can buy your property. Not their job.”

But it is govs job to create private monopolies that fix prices. Such as the milk one. Or the telecom cartel. Or the banking cartel.

#31 Raincouver on 11.08.18 at 5:18 pm

#12 YVR Reality

You are a 100% right on the money here!

#32 Guy in Calgary on 11.08.18 at 5:19 pm

I feel like you have been wanting to post a piece this for a while Garth…

#33 DonkeyKong on 11.08.18 at 5:22 pm

I normally agree with your blogs, but you are out to lunch if you think taxing an asset, thus reducing demand, does not impact prices. Normally, homes are inelastic because people need shelter, but in Vancouver where they lay empty and people buy them on pure speculation like penny stocks, you can not argue that point, therefore less demand, less hype = lower prices.

Like penny stocks? Exaggerate much? – Garth

#34 renter in Surrey on 11.08.18 at 5:29 pm

so bottom line – no matter what, RE prices are not going down, we are doomed

“buy now or be priced out forever” preachers were right

#35 Hamsterwheelie on 11.08.18 at 5:34 pm

When we moved here in 2011 – all the downtown houses were under $200 000. Apparently we were crazy for wanting to live close to things like transit, farmers markets, galleries, cafes and oh yes, low income or homeless people.
Flash forward to 2018 and the constant whining about how ‘Toronto people’ have driven up prices so that locals can’t buy anymore. Ahem, why didn’t you buy in the last 30 years when houses were almost free?
Yes I’m simplifying but here’s the thing – we fixed our houses up, we created clean and desirable rental units, we invested in our community with money and with volunteer time. (We still clear leaves, snow and pick up garbage off neighbours property)
Now, we will end up paying way more taxes on houses we’ve turned into efficient, safe and well maintained places to live. Final nail looks to be coming for our one, small, short term rental, registration fees or a tax – we already pay income tax on the earnings of course.
Nevermind – we’ll keep playing by the rules and trying to hold on to what we’ve worked for – pirate in me wants to say:
Garrr – system is rigged mateys!

#36 Guy in Calgary on 11.08.18 at 5:38 pm

#20 Worst post to date on 11.08.18 at 4:43 pm
Seriously garth? Your whole argument is based on lack of price drops? Inventory has been building steadily in Van, AND detached prices HAVE dropped. Give it 2 more years and see.
————————————————————-

I think his point is that this would have happened without adding extra taxes. Try reading the post again :)

#37 Kevin on 11.08.18 at 5:40 pm

Amazing how many sentences you can throw together and actually make them sound like facts. Regardless if market was slowing before, all these rules will absolutely have a compounded effect. Whoever has all their dough tied up in realestate has made a killing, unless of course they were a greater fool in the last few years. So don’t worry about a hair cut off a huge mullet #Justsaying

#38 broader mind on 11.08.18 at 5:41 pm

Looks like OFSI are the kings of market manipulation. First they took Home Cap down then they turn around and send them to the moon with B20 (Home Cap, Genworth…) Big six left sitting on there thumbs. Crazy game.

#39 Michael King on 11.08.18 at 5:47 pm

I’ve lived in Vancouver since 1981 and have seen a number of RE booms and busts. Blaming the Chinese for causing price spikes is nothing new. As Garth has pointed out many times, Canadian residents created these situations and not foreign citizens. By the way, this is my real name and I voted for the NDP. However, I do not agree with their introduced RE taxes and for all the reasons Mr. Turner mentions.
This article is on-topic and recommended.
https://www.straight.com/news/1161381/federal-agencies-suggest-foreign-home-buying-isnt-extensive-try-telling-vancouver

#40 Where's The Money Greedeau? on 11.08.18 at 5:51 pm

Re: #158 Musty Basement Dweller on 11.08.18 at 11:59 am
To #116 Where’s The Money Greedeau? on 11.07.18 at 10:40 pm:—————
Thanks for the good information on mold –noted!
++++++++++++++++++++++++
Personally, if I was renting, I would never rent a musty smelling basement, especially in an older east van neighborhood, because water ingress is usually 100% of the mould situation and it’s caused by holes in the building envelope, if there is one, especially with the amount of rain here in Van. I even had mould in the back of my truck!
I know because I was a tradesman for over 30 years here in the Van area and saw it many times, especially in leaky condos.
I have taken walls out and saw standing water that was teeming with mould. Had to call in hazmat after that, before fixing the ingress. Probably the cause of my debilitating illnesses/cancer I now have/had decades after working in those conditions, without a full respirator-hazmat suit.
Be wary, your health depends on it!

#41 dr talc on 11.08.18 at 5:52 pm

Bravo Maestro! I agree 100%. Ignore the cultural Marxist darts. I remind folks: HST is a buyers tax, yet no buyers pay it on new houses and condos, on land yes. Point being that the builders pay it and add it onto the purchase price for one basic reason – the buyers dont have that kind of cash over and above the down payment, in other words it gets blended into the mortgage and amortized, you are paying the tax over 25 years! In countries where they have vat, the rate varies on the different products, not here. Putting 13% on homes is shameless and obviously uncollectible , what buyers experience is a builders ‘work around’

#42 Where's The Money Greedeau? on 11.08.18 at 6:02 pm

If we flush out WHO is buying these properties that are hiding behind their numbered/proxy companies, then we can get a better understanding where we stand.
Anyone who wants to hide behind these proxies has to be for some nare-do-well intention, n’est-ce pas? I can see no other purpose.
I can’t understand why this hasn’t happened already….unless it is already known and the same game plan is afoot, fleecing the sheeple by the elite/insiders.
How do we get a bill passed to implore gov’t to proceed in this fashion?

#43 yvr_lurker on 11.08.18 at 6:05 pm

Are we still on this topic? Couldn’t disagree more with this post. Businesses will set up and expand in YVR BECAUSE their high-skilled workers are able to afford housing on the salary offered (thereby growing the economy) with decreased incentives for the workers to leave YVR. We are not talking about a business tax here (which should be reduced). Garth seems to have a contrary viewpoint in

“But we’re sending out a message that Vancouver is a high-tax, high-cost, unfriendly, capricious place. Cost-conscious tech/AI startups ultimately drift off to cheaper locations.”

Let’s give a free-market no control scenario for higher education and see if people think this is reasonable. UBC, SFU, UVic all are actively recruiting full-fee paying students from overseas for the basic 4-year undergrad degree. They pay about 4 times that of a local student, (23.5K per year). The relative percentage of international versus local students at BC universities has increased substantially over the past decade, as a way of greatly increasing revenue. The standards for admission to a basic four year degree for locals has become much more stringent, >90% for first year engineering etc.. and are higher in many cases than the full-fee paying group (if your kid does not make it… don’t worry, just go to Capilano College (renamed University by Christy Clark and gang).. and study hotel management etc…no engineering, but at least you are at a local Uni that your parents can afford or that won’t bankrupt you from having to go out East.

Now why don’t we just carry this to the extreme: make 80-90% full fee-paying international students, put a strict cap on locals, and keep raising the international fee as high as it ca go… how about from 23.5K/year to 50K per year… bring in more and more revenue for the universities…. who gives a *(&*^&*%^&^ that a local person (whose parents, extended family, grandparent) have all been paying taxes to BC for the past 30 years buildin schools, roads, paying public servants etc….. it is a global competition for the highest bidder to education, and your kid may need 97% high school average to get in to our top local schools for a basic four year degree…. this is the direction we are going…..

Replace education housing and we have the same type of game being played….

#44 Slim on 11.08.18 at 6:08 pm

#2 Blackship
“Can some please tell me if I should cash in my etf portfolio and go all stocks? 500k portfolio”
————————————————————————————————–
If you have to ask…you shouldn’t.

#45 robert james on 11.08.18 at 6:10 pm

12 YVR Reality on 11.08.18 at 4:03 pm……………… I agree 100 % …I think those stats must be coming from the money launders… The people taking the stats ask them,, ” are you laundering money in BC real estate ? ” and they say , “NO,of course not !! ” .. The stats guy says ,,”OK,, good enough” , for the simple reason that everyone is making money,, or at least they were.. When the money stops then the truth will come out..

#46 Linda on 11.08.18 at 6:10 pm

As illustrated by yesterday’s post example just because you own a property does not mean you can easily convert that asset into cash. Plus you may not actually ‘own’ anything other than a big heap of debt to the bank or mortgage broker who loaned you the $ to buy it. Now add in the fact that in some locales any sale will result in your handing over part of the sale price to the government. You buy, acquire debt, pay off that debt in after tax dollars & then hand over some of the money if & when you sell to the government for what reason? What exactly are all these additional taxes meant to do? Are they meant to ensure infrastructure is maintained? Isn’t that what property taxes (which you also pay) are for? What benefit other than increased tax revenues is there to the property owner? Do you receive any ‘extra’ service in return for handing over a portion of any property sale you make? If the intent is to ensure that any ‘gains’ are taxed then what if you sell at a loss? Do you then get a refund back from the government to offset that loss? No? Then I’d say Garth is 100% correct in why these taxes exist & it sure isn’t to make housing ‘affordable’. In fact, would not sellers add in the estimated amount of tax they will have to pay to any listed price? Would that not therefore increase the cost of purchase? After all, if retailers hike their prices to ensure they do not run at a loss, why would not property owners do the same?

#47 Where's The Money Greedeau? on 11.08.18 at 6:12 pm

My 3rd and last post…related to my last post about finding out who is behind the proxy companies buying up RE.
Drug dealers are using their profits to purchase and “flip” real estate:
“Police believe Khan, who has multiple bank accounts and also flips houses, was earning $640,000 to $720,000 per month. The house flipping may have allowed money laundering, Misir says in his affidavit.”
Khan lives in the Lower Mainland but owns house all through Western Canada.
https://www.cbc.ca/news/canada/manitoba/manitoba-drug-trafficking-police-project-riverbank-1.4896698

#48 Debtslavecreator on 11.08.18 at 6:13 pm

Brilliant post Garth- one of the best ever
Spot on
The many comrades here supporting this radical theft will come to realize within 5 years they were wrong
Eventually this beast Big Government eats up most of these intellectually challenged supporters

Be careful what u wish for you Statists

#49 Lame Recap on 11.08.18 at 6:18 pm

Vancouver was already a high COL/high tax city. This is nothing new. The spec tax is far from the nail in the coffin (though it does serve your narrative).

You keep looking at things through a national lens and have lost sight at what’s happening in actual communities. Camps of homeless people are popping up while [X] number of homes sit empty. People don’t like the spec tax? No duh, that was the idea. Our governments need to stop trying to accommodate wealthy people who don’t live here (yet), while ignoring the people who do.

I’d love for you to write about how this should happen instead of how it shouldn’t. I think sitting back, twiddling our thumbs, and letting Mr. Market course correct is wishful thinking. What’s an actual policy plan that will sincerely help people?

#50 bellend on 11.08.18 at 6:19 pm

a revenue generator that will fail.
Freezing the market with punitive imposts pooches transactional volumes.

#51 Alternative facts on 11.08.18 at 6:19 pm

Stats Can can say whatever they want… I’m in a PHD program at UBC. I’m renting a place in a nice building. At least 3/4 of the suites are owned by students or families of students from China. Sure, you can say they are residents because it’s easy as pie to become one. When you are a foreigner, you get a residency visa in which you can buy real estate tax free. Or your family can and register it in your name. After completing your studies, you can simply turn it into a permsanent visa and then sponsor your whole family. About one third of sll students at UBC are foreigners. Say what you want…

#52 Agreeable Sort on 11.08.18 at 6:28 pm

I think you are right on with this Garth. I always look for an outcry from the populace when Government does these sorts of things – at least a counter point viewpoint in the media or an op-ed piece. But it seems rare these days. Are you the only contrary voice?

#53 Sold Out on 11.08.18 at 6:32 pm

I’m not sure that someone who hasn’t lived through the GVA RE dumpster fire of the last 30 -40 years can appreciate the resolve of the inhabitants to end the insanity. RE madness has rendered the GVA unrecognizable to long-term residents, and inhospitable to those without the kind of money associated with the global elite. The fact that the NDP taxes are blunt tools at best just doesn’t matter to residents trying to house their families and keep their jobs. If the RE market won’t crack under its own weight, no gov’t measure seems too extreme.

#54 Leftover on 11.08.18 at 6:33 pm

It’s still too early to declare that the new taxes aren’t leading to lower prices. Most sellers are vainly clinging to 2017 values; they’re not yet reacting to interest rates, taxes or silence from buyers. Nobody has actually had to pay any new tax, but they soon will.

Real estate is sticky. Wait for spring.

#55 Troy McClure on 11.08.18 at 6:35 pm

#2 Blackship on 11.08.18 at 3:04 pm

Can some please tell me if I should cash in my etf portfolio and go all stocks? 500k portfolio

You shouldn’t.

#56 Bob Dog on 11.08.18 at 6:39 pm

‘we’re sending out a message that Vancouver is a high-tax, high-cost, unfriendly, capricious place’
————————-

You forgot arrogant.

#57 The HT on 11.08.18 at 6:40 pm

Thank you for laying out your arguments, Garth. It sounds to me like you don’t believe that Vancouver has a housing shortage. Otherwise, you wouldn’t be against taxing those hoarding it – yes, owing a second or third home in the city and not residing in or renting it out means hoarding, or taxing foreigners – who, by the way, are very welcome to immigrate here and then avoid such taxes.

Cottages are not generally captured in the spec tax by the way. I agree it’s a bad name, but it’s an effective tax. It prevents loopholes, particularly for satellite families. Or do you support those as well?

It’s too early to judge whether the BC housing measures are improving affordability. We are still in the correction phase. Prices are sticky, speculation appears to have ended, and the sell-off beginning. Don’t worry, your diligent clients will be fine, as they are B&D, and didn’t overindulge in the RE bubble. Right?

As an aside, I enjoy reading your blog every day with my afternoon coffee. Keep it up!

HT

#58 Fish on 11.08.18 at 6:40 pm

Payments in Lieu of Additional Municipal and School Taxes

https://www.fin.gov.on.ca/en/tax/pil/index.html

#59 Yankee Canuck on 11.08.18 at 6:46 pm

#11 AGuyInVancouver on 11.08.18 at 4:01 pm

People who want to live in Canada are repelled by this. I would like to move back home after more than 10 years near Boston, but I won’t. Because: 1. Trudeau has raised taxes on high incomes 2. Home prices do not make sense (YVR and YYZ are ridiculously overpriced when compared to US cities, where there is way more selection) 3. Let’s not talk about the weather.

Canada is competing for talent. Why would I come back and hurt myself financially? And probably have someone call me “greedy” for balking at higher taxes.

M49NH

#60 Shawn Allen on 11.08.18 at 6:46 pm

#37 yvr_lurker makes a very good argument.

#61 Erasing 40 Years of Real Estate Commissions Tacked Onto House Prices on 11.08.18 at 6:51 pm

As prices continue to slide lower across Canada in line with the true effects of increased interest rates on prices, demand and abilities to make the mortgage payment every month – we are finally getting closer to what homes are really worth. Predict 10% interest rates are just around the corner the same way they suddenly appeared out of nowhere in the early 1980’s. History always repeats – especially with Republicans calling the shots – look at history going back to the early 1970’s when the US dropped the gold standard and the Nixon, Ford, Reagan and Bush era’s took hold before Trump arrived on the scene.

#62 Charles Vincett on 11.08.18 at 6:53 pm

This one article that I agree with you 100 %! Makes total sense!

#63 Entrepreneur on 11.08.18 at 7:03 pm

Maybe put most of the blame on the BC Liberals. Did they try to calm real estate or did they encourage it? Encouraged it to make a “strong economy” and that is debatable.

And other questions come to mind like why are our youth not having children, why is debt allowed, why start a small business when no money in it, where are the incentives to dream? We have lost our communities and “what” neighbours.

Heard on the news today that the Lottery Gaming? is giving money to certain groups. When we use gambling as a mean of income that it is the end of mankind. And I can see that. Does anyone really shop at a small business anymore (very few)? Most people go to the big stores, cheaper products.

Time to think of the working person in the community. And not take the easy way out like gambling.

#64 Keith on 11.08.18 at 7:04 pm

“Mr. Market eventually solves mispricing. And correctly.”

Eventually – John Kenneth Galbraith “The market can stay irrational longer than you can stay solvent.” So for those who have been on the sidelines for a decade plus waiting for the real estate market to crash, hope they have enjoyed the journey.

And correctly – No! Graham and Dodd, and Warren Buffet will tell you that Mr. Market is a manic depressive. One week, he will pay you $50 for a dollar of earnings, next week $8.

The NDP has tapped into an unhealthy emotional response, the old eat the rich strategy. Don’t blame them. It’s a crisis response to a crisis that was ignored in B.C. by three, count them three levels of government. A bad situation was actively and passively made worse.

How bad, you ask? The NDP housing policy is so popular, it has substantial support from B.C. Liberal voters. Once six figure a year professionals can’t afford a house, you’ll tap into the politics of envy and the torches and pitchforks get picked up by most of the population.

Blame the NDP, for responding to a crisis in this way? Only way to win the election. Government policy goosed the market. People got tired of waiting for Mr. Market you cannot blame them. Creating affordability may be politically impossible, but inaction was not an option. As for the eat the rich policy, some people need to learn the hard way that it won’t work. Just like learning that ignoring the poor, the middle class, the upper middle class, professionals and small business owners means you’ll be in opposition like the B.C. Liberals.

#65 Catalyst on 11.08.18 at 7:06 pm

I’m going to take a pass on Graths obvious blindness on the foreign buyer tax (hint: it only makes r/e more expensive for foreigners) but I will point out that increased taxes have also increased prices if it applies to all buyers. Look at red tape on land development and zoning which has artificially increased building costs.

The big picture story here is government has relied on income taxes to fund an ever increasing government budget. Instead of restraining costs, we have millionaire teachers and billion dollar police forces and forced to tax everything in sight. I’m out sure what the end game is as even the conservatives have learned you cant win an election on govt job cuts, there are simply too many employed by govt yo vote against you.

#66 crowdedelevatorfartz on 11.08.18 at 7:06 pm

@#25 ryguy
” Id love to hear the verbal gymnastics required to justify why Peru needs $35M of our tax dollars..or Yemen $38M…
++++

i must admit sending money to Peru is a head scratcher.
But Yemen?
Its a humanitarian disaster thanks to the Saudi “war” that drags on and on and on.
We could send $380 million and with the famine thats occurring people will still be dying.

https://www.npr.org/2018/11/08/665616789/plagued-by-war-and-famine-yemen-is-no-longer-a-functioning-state-journalist-warn

#67 Adam on 11.08.18 at 7:09 pm

“Like the B20 stress test, which reduces credit by creating a higher bar for borrowing, government actions like these distort the market, push buyers down the price scale and thereby inflate the cost of cheaper homes.”

While this is an easy leap to make, I’d sure like to see the evidence that it’s what’s really happening. I feel like the reality is likely far more nuanced.

Simple. Look at the price changes and sales-to-listings ratios for condos vs detacheds in YVR over the last 12 months. – Garth

#68 AisA on 11.08.18 at 7:16 pm

https://www.greaterfool.ca/2018/11/08/the-trap-6/#comment-622004

Welcome to the ice age version of Greece :-)

#69 Kilt on 11.08.18 at 7:16 pm

Garth, I think the example yesterday showed that a foreign tax does in fact lower prices. Either that or it prevents a sale. US or China, a foreigner coming here and purchasing a home results in a home being taken out of the market. Its an increase in demand.
And if you think that foreigners account for very little of the home purchases, then taxes like these basically have no effect.
And for that specific example, I’m sure the doctor who plans on becoming a permanent resident/citizen can rent a place to live for six months to a year while he waits for his paperwork to go through. This might make him think twice about moving here permanently and would certainly give him a better idea of where he wants to live or doesn’t want to live.

Kilt.

I see our society benefiting in welcoming a talented, needed young doctor that taxpayers in an advanced country paid to train. You see it as a foreigner ‘taking a home out of the market’ in a city with 30,000 condos under construction. One of us has flipped. – Garth

#70 For those about to flop... on 11.08.18 at 7:32 pm

It’s so peaceful on here without me.

Apologies for the intercorruption…

M44BC

“Visualizing the Relationship Between Corruption and Economic Growth Around the World .

How should we think about corruption as it relates to economic growth? Some people argue that corruption helps to “grease the wheels” of an economy, overcoming bureaucratic obstacles to getting things done. Others see corruption as an inherent problem for economic growth because it increases the cost of doing business. We’ll let you decide for yourself, but we combined a unique corruption index with GDP figures to provide an interesting viewpoint.

We combined two datasets for our visualization. First, we took the corruption perceptions index (2017) from Transparency International to rank 180 countries from around the world. The index scores countries from 0 to 100 based on survey responses from experts and businesspeople on their perceptions of corruption. Then we used GDP figures from the World Bank to represent the size of each country’s economy. This approach lets you easily and quickly see the relationship between large economies and corruption levels.

To begin, compare the extremes at the top and bottom of our visualization. Highly corrupt countries scoring 20 and below, like Iraq ($198B), Angola ($124B) and Sudan ($117B) also have tiny economies, whereas Germany ($3.68T), the U.K. ($2.62T) and Canada ($1.65T) are counted as some of the biggest in the world. To make a general statement, developed countries also tend to have lower levels of corruption, but not always. The obvious exception to the rule is China, where an enormous economy worth $12.24T exists next to endemic corruption. Perhaps part of the reason has to do with the sheer size of China’s population, combined with its focus on manufacturing in “special economic zones.” We might just as well call that smart corruption.

Our visual also contains some uncomfortable surprises for Western democracies. Corruption in Italy for instance is comparable to Saudi Arabia, South Africa and Malaysia. A key strategic partner for the US and a member of NATO, Turkey, ranks as one of the most corrupt countries with an economy over $800B. Mention should also be made of Mexico, one of the most corrupt countries in the world with an economy valued at $1.15T. Perhaps President Trump’s new trade agreement, the U.S.M.C.A. or more commonly called a revised NAFTA, will help address some of these problems.

The broader issue at stake behind these numbers is the distinction between true corruption and legitimate activities. Some people might look at the ever-increasing amount of money spent on lobbying in the U.S. as a form of corruption. Is it?”

https://howmuch.net/articles/the-state-of-worlds-corruption-2017

#71 Victoria Real Estate Update on 11.08.18 at 7:40 pm

#15 Paully

The decision to remove CMHC’s $250K cap (the maximum size of a mortgage it would insure) entirely in the early 2000s was a huge part of the reason house prices in several Canadian cities more than doubled from 2000 to 2006/08. (A cap of $1 M was later reimposed.)

That interest rates were slashed to zero late in 2008 isn’t the only reason house prices in Canada are extremely overvalued.

Few accurately assess the severity of Canada’s national housing bubble because they choose to ignore the implementation of lax lending standards (starting after 2000) and what that did to house prices from 2000 to 2006/08 – before rates were slashed to zero.

#72 mark griffin on 11.08.18 at 7:51 pm

HI Garth. How much of a “pump” is hot property on CP24 haha. All they do is defend the real estate market promoting buying.

#73 TurnerNation on 11.08.18 at 7:54 pm

How did the blog know. I was going to post today is a Dow Bull Trap. Round ’em up.

#74 Sebee on 11.08.18 at 7:56 pm

Garth,

Obviously you have a point. But also there is the other side of this coin. I assure you that example where buyer bailed you used recently was one where a lower asking price would have enticed more offers, likely local. Simply that was the offer at that price point. All sellers like to get their asking price. But as you often note, buyers may not wish to pay it.

I think there is a valid argument that these taxes remove competiton, illusion of foreign money goosing prices and thus will reduce the prices. Simply the sellers have to realize that these measures do reduce the asset worth.

It is somewhat interesting that you’re generally stating RE is heading down but object this additional pressure point to drive it lower. If RE is melting as you say, sellers are going to be the ones eating it.

Bottom line, it’s a slow cook process. It’s not done yet. It will be in a few more quarters with this pressure. Let it cook. It is doing what it intended and it’s interesting you see it as you do. I mean…I’ve seen you note how many have multiple properties, etc.

#75 meslippery on 11.08.18 at 8:01 pm

#30 Dongareff on 11.08.18 at 5:18 pm

“Simply put, governments should not set prices nor seek to tell you who can buy your property. Not their job.”

But it is govs job to create private monopolies that fix prices. Such as the milk one. Or the telecom cartel. Or the banking cartel.

___________
Yeah and until recently in Ontario there was a minimum
price you could charge for beer.
Only one place to buy Weed. Seems government likes to
insert its self all over.

#76 For those about to flop... on 11.08.18 at 8:08 pm

Pink Pumpkins being carved in Vancouver.

These guys got a problem,a big one.

I just showed you another house on Parker street go for 830k after originally chasing 1.09.

As I have been showing you the old time purchases are slitting the throats of the recent speculators and all this talk of sticky prices is just nonsense.

If anything there are pockets of resistance but they are getting fewer each month.

The problem these guys face as opposed to the last guys is they have to get a certain number to avoid taking a decent percentage loss.

Remember this is happening at the bottom of the market.

They paid 1.38 in May 2017 with an assessment of 1.30.

It is now on for 1.28 after trying 1.49.

The house that just sold for 830k was assessed at 1.17 and was closer to the Trans Canada Highway.

The guys took a wrong turn and ended up on the toll road.

Gonna cost them…

M44BC

2797 Parker st ,Vancouver.paid 1.38 May 2017 ass 1.3

https://www.zolo.ca/vancouver-real-estate/2797-parker-street

#77 Rosa Alvarez on 11.08.18 at 8:11 pm

Look at the morons that believe that socialism will work if you now call it democratic socialism, Bernie Sanders, Alexandria Cortez real impaired minds.

Look at Venezuela and Zimbabwe. You want to eat zoo animals and starve to death. The main stream media does not cover this stuff. They don’t like looking at reality. I know, I moved from Venezuela 20 years ago. Trust me you don’t want to their socialism.

People better wake up and get educated. Socialism, communism, marxism, fascism etc. ant far left ideology is all economic and social disasters.

Anyone that believes this stuff is going to learn the hard way. If they bring down our economies then they are the faults of those that voted for them. Thieves come in many forms. People want any easy way out and a free lunch, they don’t exist. Dream on people!

#78 Dolce Vita on 11.08.18 at 8:22 pm

#23 Damifino

we’re sending out a message that Vancouver is a high-tax, high-cost, unfriendly, capricious place
————————-

My observations as a Vancouverite, precisely.

——————————

DITTO and as a former Vancouverite having lived there for 20 years.

If you hate cold weather it’s really the only sensible place to live in Canada.

True, you have to love the life of a fern being constantly misted in the Winter but at least the precipitation is self-shoveling and you do not have to plug your car in at night like a toaster (let alone dressing up during the day to keep warm looking like the Michelin Man). Yes, yes, it was very cold the last 2 Winters…for all of a few weeks (ask anyone else in Canada if they would like trade places with you).

And the ocean and mountain scenery’s not bad either.

SAD what’s happened to the city in terms of housing affordability and the draconian measures BC Gov’s have taken to appease disgruntled citizens which only, so far, benefit Government coffers.

At the end of the day, everyone pays for this one way or the other. There are NO WINNERS here.

#79 Fish on 11.08.18 at 8:22 pm

The Ontario Quarterly Finances report contains information about Ontario’s 2018–19 fiscal outlook, including information about the major components of revenue and expense as set out in the 2018 Budget.

Contents
A. 2018–19 Fiscal Outlook

B. Ontario’s Economic Outlook

C. Economic Performance

D. Details of Ontario’s Finances

E. Ontario’s 2018–19 Borrowing Program

https://www.fin.gov.on.ca/en/budget/finances/2018/ofin18_1.html#secB

#80 westsider on 11.08.18 at 8:26 pm

I offered this before, but it’s not a stat, it’s an actual experience. Our rented house on the westside of Vancouver sold in April 2016 for $3.2 million. 2 assignment flips later by May 1, 2016, it sold for $4.25 million. All to off shore, no one ever looked at the house. I know, because we were still in it. This happened to the house to the right of us and to the house on the left and to another 4 houses on our block. If we did stats on our block alone, it would be 100% off shore buyers for all the houses and bids $500k or more over asking. I don’t need stats. I are one!!!!!!!!!

Were you in the market to buy it? – Garth

#81 Trojan House on 11.08.18 at 8:33 pm

#22 They should never have called it on 11.08.18 at 4:50 pm

“The days of two old folk living in a 3,500 sq ft home while families with two kids are in condos in Vancouver will also come to an end soon enough.”

Spoken like a true dumb dumb. Where do you expect them to live genius? It’s their home, therefore, they can live there as long as they want.

#82 You know on 11.08.18 at 8:37 pm

Cp24 hot property rules ….suckers

#83 Remembrancer on 11.08.18 at 8:38 pm

#47 Where’s The Money Greedeau? on 11.08.18 at 6:12 pm
Drug dealers are using their profits to purchase and “flip” real estate:
“Police believe Khan, who has multiple bank accounts and also flips houses, was earning $640,000 to $720,000 per month. The house flipping may have allowed money laundering, Misir says in his affidavit.”
Khan lives in the Lower Mainland but owns house all through Western Canada.
————————————————————
Great, sounds like why the RCMP has drug and commercial crimes sections already paid for by all our tax dollars. Pushing for more / better enforcement, not more creative property taxes should make sense if criminal acts was the actual problem that needed to be solved…

#84 Fiendish Thingy on 11.08.18 at 8:40 pm

#77 Rosa Alvaraez-

Tell it to the Danes, Swedes, and Norwegians…

#85 C Dunlop on 11.08.18 at 8:46 pm

We were forced out of our primary residence due to mold contamination from our neighbour. We had to sue him to get repairs done that would remediate the walls and contamination. It took a year for him to do this. We are still waiting for CTR to issue a decision on our claim (2 years and counting).
Know what the city of Vancouver did? Charged us $4000 for not living in our apartment for over 6 months !! It took 8 months to get them to agree that black mold and a lawsuit qualify as an exception !
We have sold our property and now rent. It’s just not worth owning property with the idiots we have running our city and our province. Maybe I’ll get a rent cut or something as I am not considered “homeless”. What a farce!

#86 Remembrancer on 11.08.18 at 8:51 pm

#72 mark griffin on 11.08.18 at 7:51 pm
HI Garth. How much of a “pump” is hot property on CP24 haha. All they do is defend the real estate market promoting buying.
—————————————————————-
Its paid advertising Mark, commercial infotainment is the price of a fragmented media universe otherwise you’d be watching endless cereal commercials to pay for their spot on the virtual dial…

#87 For those about to flop... on 11.08.18 at 8:51 pm

Pink Pumpkins being carved in Port Coquitlam.

Let’s have a look at what’s happening with this cheapo in a part of the city where when you ask them what their favourite drink is they always reply,Port.

Purchased for 868k in July 2017they just put it back on the market for the exact same number.

KD and expenses for dinner if that is the case…

M44BC

1102 Ellis Drive,Port Coquitlam paid 868k

Now asking 868k

https://www.zolo.ca/port-coquitlam-real-estate/1102-ellis-drive

According to zolo there are only two jurisdictions still in positive territory and one of them of is West Vancouver where actually some of the biggest carnage is happening.

City Price Growth
#1
West Vancouver
9.1%
#2
Pitt Meadows
1.3%
#3
Port Coquitlam
-6.7%
#4
Surrey
-10.0%
#5
North Vancouver
-11.5%
#6
Port Moody
-12.2%
#7
New Westminster
-13.7%
#8
Burnaby
-14.4%
#9
Vancouver
-15.2%
#10
Maple Ridge
-15.5%
#11
Langley
-15.5%
#12
Coquitlam
-17.5%
#13
Tsawwassen
-18.8%
#14
Richmond
-19.5%
#15
Delta
-21.0%
#16
Bowen Island
-22.1%
#17
Lions Bay
-22.4%
#18
White Rock
-23.3%
#19
Anmore
-66.8%

https://www.zolo.ca/port-coquitlam-real-estate/1102-ellis-drive

#88 Dolce Vita on 11.08.18 at 8:52 pm

#21 Kozman

Give it a rest with Bastiat’s Zero Sum economy broken window example.

The economy is not zero sum where available money is fixed (credit creates money – zero sum is limited to the put/call options World and even with them, they can be sold at a profit).

And welcome Mr. Bastiat to the 20th Century where Lexan, Pyrex and metal reinforced glass were invented – for people that seriously desired shatter proof or benign shattering “glass”.

“destruction is not profit.” says Mr. Bastian.

Tell that to General Electric and Owens Corning which have profited handsomely from preventing or rendering benign glass window destruction.

Zero sum in economics and Mr. Bastian are GAME THEORY.

In today’s housing theme and if Bastiat was correct then (quote from The Zero Sum Fallacy):

“If your house increases in value, it does not follow that somebody else’s house has decreased in value.”

Rather:

“It is possible for all houses to increase in value.”

No dung Sherlock.

And welcome to Cdn. RE prices up until recently.

#89 april on 11.08.18 at 8:53 pm

#34 – Home prices have come down and will continue to decrease. If your not convinced by what Garth has been writing try also listening to Ross Kay, Howestreet.com

#90 TopicA on 11.08.18 at 8:57 pm

Garth there is something that doesn’t make sense in your posts. For years you were advising us to not buy and this young lady against your “brilliant” advice bought what seems a very expensive condo and all of a sudden you (and the rest of us) have to worry about her situation. How so?

#91 Remembrancer on 11.08.18 at 9:00 pm

#75 meslippery on 11.08.18 at 8:01 pm
Yeah and until recently in Ontario there was a minimum
price you could charge for beer.
————————————————————
There still is – $1 vs $1.25 – crap at either price, but apparently enough of a ON kitchen table issue according to Doug to focus on that rather than say, math curriculum, northern development, infrastructure investment beyond road signs, getting your weed roll out right, etc…

#92 joblo on 11.08.18 at 9:03 pm

When Calgary gets the 2026 Oilympics, the World will see the greatness of the country and all will want to Kanada move. Look already a T shirt, Yeah!

https://www.redbubble.com/people/mmalifestyle/works/34943908-calgary-winter-olympics-2026?asc=u&p=t-shirt&rbs=8cf95fa6-ed2f-485e-b381-40b6dec7938e&rel=carousel&style=mens

#93 DON on 11.08.18 at 9:03 pm

#1 crowdedelevatorfartz on 11.08.18 at 2:59 pm

“the tax is not about speculating. It’s merely a revenue-generator.

++++++

The govt “wins” again.
I saw a headline yesterday the “speculation tax” has hauled in 30 million so far ….
***********
Not that it matters…
The City of Vancouver empty home tax bought in the 30 million. The Provincial Spec Tax happens around June?? They just passed the legislation.

#94 Diolch yn fawr on 11.08.18 at 9:11 pm

Best argument goes to Kilt Consider if you will the distortion that Air BnB has created in the housing market In a dog eat dog world the big dog wins Only chance a little dog has is to form a pack

#95 islander on 11.08.18 at 9:13 pm

https://www2.gov.bc.ca/gov/content/taxes/property-taxes/annual-property-tax/defer-taxes

Property tax deferral available in BC
Regular program for:
55 or older during the current year or
a surviving spouse of any age or
a person with disabilities
OR
Families with Children Program
You may qualify for the Families with Children Program if you’re a parent, stepparent or financially supporting a child.

#96 Chumpland on 11.08.18 at 9:23 pm

I get that taxing an asset doesn’t make it cheaper, but a tax is a deterrent for certain people to buy. I believe anyone is naive to believe that just 3% of homes were sold to foreigners. Just look out the backyard of my parents house in Stouffville and within eyesight, there are 5 empty homes just sitting there from the Chinese that we’re going crazy driving up the prices of homes in early 2017. It was rediculous, people were knocking on doors begging the home owners to sell their home. Anyone that sold, hit the lottery, but now in neighbourhoods like in Stouffville there are many empty homes.
Tax have helped deter this mania and that’s only a good thing. Now all we can hope for is a major correction to put things back to a mean average.

#97 Dolce Vita on 11.08.18 at 9:26 pm

Back to your Human Nature argument Garth.

The citizenry were upset in BC and YVR at the lack of housing affordability. Gov’s were elected on platform’s that clearly delineated, they got elected, wonder of wonders AND are kept their promises. How is that a bad thing?

Yes, yes, you say that it is the artificial gerrymandering of a market that adds cost to housing prices via taxation.

TRUE.

But there is all kinds of gerrymandering going on in RE markets:

-B20 disqualifying buyers in the name of protecting greedy, cavalier Banks and their mortgage asset values (pushed up Condo prices, all they could afford).

-Bank of Ma & Pa HELOC circumvent CMHC debt money for Junior so that Junior can create more debt with a huge mortgage – the Genesis of debt begats (artificial demand).

-Other HELOC money to speculate by buying “investment properties” where debt creates even larger debt (more demand).

Instead look for a ROOT CAUSE of all this Garth. I believe your Economic Stress Theory and came to that same conclusion a long time ago.

Canadians do not generate the same amount of wage gains and wealth as they did decades ago. Canadians are FRUSTRATED that they cannot get wealthy in a moderate period of time by saving and investing. THUS they resort to GET RICH QUICK schemes like amateur RE investing.

I also blame the IMMEDIATE GRATIFICATION culture that has taken root in Canada over the last couple of decades (take powder, add water, refrigerate and 5 min. later you have your desert). No one wants to take the time to save and invest. They all want it NOW. Patience and perseverance have been thrown out the door.

Human nature has changed in Canada. You rail against it. Be Stoic instead, then again, don’t…otherwise your Blog’s would be faits accomplis boring.

That’s 3 for me, let others have their say, buonanotte Garth.

#98 Here is your Kelowna Proof on 11.08.18 at 10:02 pm

The detach house price in Kelowna is down -$114,908 from July, 2018 until now. That is just within 3 months.

And we just getting started.

My buddy at the local bank said he sees another $120,000 drop from here as most deals are falling apart. Nobody can get the financing. It will adjust more.

Let’s just call a spade a spade.

$400,000 median prices on detached isn’t out of the question in the Interior.

As for Vancouver. All we can do is pray as a bitcoin like bust is playing out.

#99 DON on 11.08.18 at 10:02 pm

“Simply put, governments should not set prices nor seek to tell you who can buy your property. Not their job…

All governments need do in order to curb true speculation is ensure the proceeds of flips are taxed as income or subject to a valued-added levy…”

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

I agree, the solution is simple as Garth has mentioned many many many times.

But then again that being introduced while house equity is already inflated might be a vote killer, more so than a spec tax. As others have mentioned all three levels of government were involved in creating our present state.

A large part of our local economies in BC are real estate driven. Building is slowing down on Van Isle. Meaning less work. Lots of trades people around servicing the building boom. A friend’s son is seeing the slow down in the dry wall business and is planing on selling his condo before the condo development across the street is completed.

Low rates, lack of income checking, loops holes etc got us here. Gravity is bringing us back down to earth. Things are stupidly un-affordable for most. It’s not even funny anymore and people I know are sitting on the slide-lines rather than jumping in and catching a falling knife.

Everything has a tipping point especially housing, since wages gains haven’t kept up with prices. And people are worried about 6% interests rates.

There are many factors that can topple the Canadian housing market and one sooner or later will. Sooner seems to be the present. A cascading effect.

#100 For those about to flop on 11.08.18 at 10:11 pm

Recent sale report.

Showed these guys as a pumpkin and they just took some harsh medicine.

The details…

Paid 2.38 March 2017

Just sold for 2.05

Originally asking 2.88

Close to 20% loss after expenses.

It’s not your mama’s market anymore Mackay…

M44BC

https://www.zolo.ca/north-vancouver-real-estate/1900-mackay-avenue

$$$$$$$$$$$$$$$$$$$$$$$$$$$$

Feel free to make a donation.

Flop For Fox Fund…

http://www.terryfox.org/get-involved/ways-to-give/

#101 YVR Reality on 11.08.18 at 10:13 pm

My house was worth 560,000 in Tsawwassen in 2010. In 2013 New Coast reality left a leaflet in my mailbox.

It said we have 2,855 offshore buyers interested in buying your place.

Property tax assessed value is now 1.2 million dollars.

I believe offshore money pouring into the country was the source that started the ball rolling. And the banks engineered stuff right along side to keep the party going.

Now we are going to see it collapse as the banks change the game.

#102 Number Two in Richmond on 11.08.18 at 10:22 pm

Garth I will pay for your plane ticket out to Vancouver.

You have no idea about the local issues facing working class struggling and millennial folk trying to make their way into the professional working world.

I can show you those beautiful mega mansions being built on newly converted farm land along number two road in Richmond.

Everyone should have a 30+ bedroom house.

We can drive along billionaires row in Point Grey where some of the most expensive real estate on the planet are rotting abandoned housed with boarded up windows sitting vacant for years. House after house with boarded up windows.

It is very corrupt out West.

#103 saskatoon on 11.08.18 at 10:24 pm

line’s been drawn, garth?

i was beginning to think you were a communist.

#104 Wilt Chamberlain on 11.08.18 at 10:32 pm

I just want to say that I am richer than everyone on this blog. scotiabank.

#105 MDQ on 11.08.18 at 10:41 pm

So the 3 levels of government spent 20+ years pumping real estate in BC, no one says anything about it.
Now that the municipal and provincial governments are taking measurements you claim that is making real estate more expensive…

“And by taxing real estate more, housing becomes more costly.”

This is only for people that either own too much real estate, investors or foreigners. All which can sell their properties (still at a profit) and not be affected. Supply is what will make this market correct, which is what the government is trying to do.

Its a catch-22, in order for this market to correct, you have to make it really unaffordable; so that reduces demand.

And thats the stage we are at… lots of sellers, very few buyers (ignorant for the most part); who is going to blink first?

#106 crowdedelevatorfartz on 11.08.18 at 10:56 pm

@#90 Don
“The City of Vancouver….”
+++++

Is considered “govt” is it not?

“Empty home tax” is another govt cash grab is it not?

“Speculation/ Empty House”

“Po-TAY-to/ Po-TAH-to = tax tax tax.

Govt cash grab….nothing more.

The govt does give two s##ts about the schleps that pay the tax because they dont vote.
Its a win win

#107 BG on 11.08.18 at 11:05 pm

Garth, you make valid points but as a society we all decide what is fair and what is not.

I think it’s fair to protect Canadians from foreign speculation in the real estate.
Many Canadians seem to agree.

Does this speculation really exist or have any impact?
Does the current measure (taxes) make any difference?
Are we hurting the economy more than helping it by trying to fix the (alleged) issue?

These are the really important questions.

But I get the vibe you think we should just accept the status quo because that’s how free markets work.
And I disagree with that.
We need to find whatever works better, and if it means bending free markets a bit, then why not?

#108 Live through it and know what's really happening on 11.08.18 at 11:05 pm

Those of you that live here in west van see glimpses of what is happening by living it every day. So many empty homes, so many neighbors that raise their garage doors to have their hired help take out the garbage where neighbors get a glimpse of the never moved Bentley stored but never moved from the garage, curtains drawn most of the time, no one speaks English and no one cares to know their neighbors, hiding what is happening behind closed doors. 90 percent of three neighbourhoods I’ve lived in here are like that here. Time to let the light in and clear out those cobwebs!

#109 Al on 11.08.18 at 11:12 pm

“It doesn’t mean sellers will drop prices. That’s not the way markets work. ”

If they want to sell, there is no alternative.

#110 Bottoms_Up on 11.08.18 at 11:14 pm

102 Number Two in Richmond on 11.08.18 at 10:22 pm
————————
There is a negative immigration rate in BC. I live in a suburb of ottawa and know of 1 family that moved here from Vancouver. They were struggling in a 2 bedroom condo with 4 kids…moved here and bought a 4-bedroom house in the 400-450k range..in a great school district…right beside a great park…and 15 minutes to downtown (off hours).

#111 Rargary on 11.08.18 at 11:17 pm

#98…why can’t people get financing in Kelowna but they can in Vancouver?? Maddening

#112 leebow on 11.08.18 at 11:22 pm

#90 TopicA on 11.08.18 at 8:57 pm
Garth there is something that doesn’t make sense in your posts. For years you were advising us to not buy and this young lady against your “brilliant” advice bought what seems a very expensive condo and all of a sudden you (and the rest of us) have to worry about her situation. How so?

~~~~~~~~~

Then Garth told him: “Suppose one of you has a hundred sheep and loses one of them. Doesn’t he leave the ninety-nine in the open country and go after the lost sheep until he finds it? 5 And when he finds it, he joyfully puts it on his shoulders 6 and goes home. Then he calls his friends and neighbors together and says, ‘Rejoice with me; I have found my lost sheep.’ 7 I tell you that in the same way there will be more rejoicing in heaven over one sinner who repents than over ninety-nine righteous persons who do not need to repent.

#113 God nick on 11.08.18 at 11:23 pm

Obviously Both lowering price value – taxes and rates. The only difference : reach people hate taxes ,poor hate bankers(rates). Who winin this battle? Watch comments here…

#114 domain on 11.08.18 at 11:28 pm

I agree Garth, that the government should not attempt to set prices and meddle in the market with punitive taxes.

However, the corollary is that they should not be involved at all, and that means no CMHC and no CANADA Mortgage Bonds.

Government out of real estate, and out of other free market hindering activities.

#115 Bottoms_Up on 11.08.18 at 11:31 pm

90 TopicA on 11.08.18 at 8:57 pm
——————
Garth is worried about market distortion in this case, and not necessarily the financial prowess of this individual.

#116 Smoking Man on 11.08.18 at 11:32 pm

What I love about California. Every feekshow gets some respect.

Taxes are high, not as much as Canada. Blue skyes everyday.
It’s like an after life adventure .

#117 Kaganovich on 11.08.18 at 11:41 pm

“Mr. Market eventually solves mispricing.” In some cases, perhaps….but with regards to the most important market failure, climate change, the market solution will likely be too late lol

https://www.businessgreen.com/bg/interview/2468567/lord-stern-on-market-failures-world-wars-and-the-only-growth-story-on-offer

#118 viorelli on 11.08.18 at 11:41 pm

Unfortunately, Vancouver’s escalating real estate prices (distant past) can be attributed to numerous natural and unnatural factors:
1. A major city with the warmest climate in Canada
2. Geographical limits for construction expansion, mountains, US, ocean, and the valley (please observe the dotted north shore mountains which have been overbuilt to the max, same with Squamish and Sunshine Coast).
3. English law, relatively clean, safe, liberal rule, great sailing, skiing, and compact location (unlike Phoenix, AZ, which keeps on expanding in every direction)
4. Multicultural and tolerant
5. Surrounded by natural beauty
6. Close flights to Hawaii, Las Vegas, AZ, and Cal (although our after tax wages in USD exchange make us into a second class citizens down south)
7. Loose lending standards for over a decade
8. Rampant speculation further increased by idiotic rhetoric of “buy now or be priced out forever”, this lies squarely with the government policies as if there is a way for a wolf to get into the farm it will do it (just like international criminals and speculators)
9. Relatively low wages in the region, thus forcing many into one trick pony for retirement (sell the house in Van and retire in Gibsons), that ship sailed a long time ago as Gibsons is just as expensive plus the ferries.
10. Federal immigration quotas will bring in more people, workers and wealthy alike (grandson plays house hockey for T-birds hockey assn, numerous new immigrants from China, Russia, Brazil who own mansions and drive very expensive cars, kids are in hockey too), got to show off your success to the comrades mentality, very prevalent from the new money from such places. Nevertheless, eventually prices are sliding and will slide further as nothing lasts forever, meaning faltering demand and new NDP rules, combined with global unpredictability and rising interest rates.

#119 praletylk on 11.08.18 at 11:50 pm

#84 Fiendish Thingy on 11.08.18 at 8:40 pm

#77 Rosa Alvaraez-

Tell it to the Danes, Swedes, and Norwegians…”

Perfect example of how socialism turns people into emasculated PC vanilla personality types!

#120 Rentin on 11.09.18 at 12:07 am

I think reduced demand is good for the market. Builders will inevetibly overbuild as people walk from their pre-sales, supply will swoon. Its happened before, and will happen again. Its all part of the cycle. Prices will come down.

Cheap credit was never part of the historic cycle and is 100% responsible for this mess.

As a reader of this blog for 10 years, I am surprised that, as somewhat of an monetary policy expert, you never hinted at the gass bag this cheap money would create ahead of time.

A house purchased in 2010 is now worth double in YVR. Maybe a balanced portfolio is too, but it certainly is subject to more tax on the gains. To be fair, you would need to assume the buyer pays cash for both investments.

The one thing you correctly identified, is that houses can become an illiquid wealth trap. I think people are about to learn this lesson.

But I think that if one could really afford a said house, and I am not saying marginally afford…., then all this tax BS is just part of the pain of owning.

The government is doing it to the TFSA too. Returns too high?? Excuse me sir, you must be a professional and now we tax you. Talk about complete BS….

#121 paul on 11.09.18 at 12:28 am

Garth,

New here thanks to Mr. Tako’s but fabulous blog and dog!

The following article piqued my interest….but left me wanting more unfortunately comments are closed
https://www.greaterfool.ca/2018/10/15/gravity-4/#comments

Where is the first posted email link this couple provided that you posted online?
Moreover what is the best link on this blog to “cruise into retirement”?

$25 000 house down payment on house
$90 000 down on condo principal of loan
$16 500 TFSA
$7 000 Savings account
_______________________
$138 500 portfolio declared

$10 800 his pension contribution
$8 400 school boards contribution to pension
$8 400 her pension contribution
$5 900 AHS pension contribution
_____________________________________
$33 500 portfolio per year not declared

$41 600 Nurse take home
$53 400 Teacher take home
_______________________________
$95 000 Total take home

“As the Toronto broker points out, a couple earning $125,000 three years ago could afford an $800,000 house. Today they can spend $625,000. In a year that could be $580,000.”
vs $460 000 Calgary questions

What would be so wrong for them to legally suite their basement and apply for the Calgary secondary suite $25 000 grant which they could initially pay for via their TFSA/savings/condo investment loss CRA refund
Nursing background – open home to a supportive assisted living contract
Teaching background – open home for tutoring (U of C nursing faculty entrance requires an 85% high school average)

#122 Bob on 11.09.18 at 12:38 am

We should simply ban foreign ownership entirely, as many other countries do. The right to own land should be exclusively reserved for citizens.

#123 Kaboom! on 11.09.18 at 1:23 am

If you are tempted to put a renter in your basement so you can afford the mortgage….

Dont.

Drug lab blows up entire house.

https://beta.ctvnews.ca/national/canada/2018/11/8/1_4168574.amp.html

#124 Overheardyou on 11.09.18 at 1:35 am

#11 AGuyInVancouver on 11.08.18 at 4:01 pm

————–

Clearly you’ve never had ambition or drive to succeed. It’s not who has the money, it’s who’s willing to work for it. Wealth isn’t built overnight. Be creative, you have the internet.

#125 Steve French on 11.09.18 at 1:53 am

Garth, Blog Dogs:

Please have a read of Karl Polanyi’s “The Great Transformation”, written towards the end of the Second World War in 1944.

Polanyi argued that the distribution of land rights in a capitalist economy is necessarily subject to a “double movement”, or a social counter-movement to the functions of the free market economy.

This is because land (like human labour, and money) is not a real commodity but rather a ‘fictitious commodity’, that is not produced for the purpose of exchange. If fictitious commodities are subject to the logics of the so-called “self-regulating market”, human society would be destroyed.

Land and property cannot be wholly detached from the social and environmental relationships in which it is already embedded. Each move to promote a totally free market in land rights, whether urban or rural, is invariably met with some form of social resistance or a society ‘counter-movement’ that Polanyi described as a manifestation of the principle of ‘social protection’.

When you treat urban land as a full commodity, people will organise and protest because of how it disrupts people’s access to basic human right (physical shelter) as well as their sense of community (which makes life meaningful).

This has all played out before in history, and will continue to play out again.

It’s amazing how so many Conservatives fail to recognise that if key elements of human life are treated as a full commodity, there will be a social blowback.

Even our friendly blog host and guide Garth Turner fails to recognise these historical lessons. As a result, Garth will continue to be surprised, when everyday people continue act in ways he finds completely unintelligible, but are actually necessary to their survival.

#126 Myra Andrews on 11.09.18 at 2:03 am

Foreigners tend to own condos not single detached houses.

From the Stats Canada article:

“Estimates of non-resident ownership varied across housing types. In both CMAs, non-resident ownership was more prevalent for condominium apartments.Note 4 Non-residents owned 7.2% of condominium apartments in Toronto and 7.9% of these units in Vancouver. By comparison, 2.1% of single-detached houses in Toronto, and 3.2% of single-detached houses in Vancouver, were owned by non-residents (Chart 1).

“Substantial differences in property value were apparent for specific types of housing. At the extreme are differences in the value of single-detached houses. For the Vancouver CMA as a whole, the average value of single-detached houses owned by non-residents was $707,800 higher than the average for residents. The average market value of single-detached houses owned by non-residents in Vancouver was $2,275,900, compared to $1,568,100 for those owned by residents. The difference in average property value between the two groups was similar in magnitude to the average value of a single-detached house in Toronto ($842,800). This largely reflects the impact of high-value properties in the census subdivisions (CSDs) of Greater Vancouver A, the City of Vancouver, and West Vancouver.

Link
https://www150.statcan.gc.ca/n1/pub/11-626-x/11-626-x2017078-eng.htm

#127 AGuyInVancouver on 11.09.18 at 3:38 am

#80 westsider on 11.08.18 at 8:26 pm
I offered this before, but it’s not a stat, it’s an actual experience. Our rented house on the westside of Vancouver sold in April 2016 for $3.2 million. 2 assignment flips later by May 1, 2016, it sold for $4.25 million. All to off shore, no one ever looked at the house. I know, because we were still in it. This happened to the house to the right of us and to the house on the left and to another 4 houses on our block. If we did stats on our block alone, it would be 100% off shore buyers for all the houses and bids $500k or more over asking. I don’t need stats. I are one!!!!!!!!!

Were you in the market to buy it? – Garth
_ _ _
A rather lame attempt at deflection Garth. But of course the 84% of British Columbians who approve of the policies know nothing, while you do. How Trumpian.

#128 Asif Merali on 11.09.18 at 6:59 am

If people want to live and invest in Canada then they should apply to immigrate here and become a citizen instead of just buying a house. Very idiotic arguments in these postings lately.

#129 MoneyfromA$ia on 11.09.18 at 7:25 am

Define foreign investment…

Do you realize Garth that these misled Canadians also consider wealthy new immigrant Canadians as a part of foreign investment problem manipulating the housing market.

Rype for its own article…

#130 the Jaguar on 11.09.18 at 7:46 am

Re Flop’s post above:
‘The house that just sold for 830k was assessed at 1.17 and was closer to the Trans Canada Highway.’

This issue isn’t getting enough attention. The sale price versus assessed value in lower mainland is interesting. When you routinely have gaps of 500,000 between sale price and assessment value in many areas ( especially West Van) it should be a bell ringer. Or allow me to spell it out in crayon: HALF A MILLION DOLLARS.
Not exactly chump change.

#131 Remembrancer on 11.09.18 at 7:59 am

#127 AGuyInVancouver on 11.09.18 at 3:38 am

A fair question, are 84% of British Columbians, including you, in the market for those $3.2M – $4.25M properties? Where you personally evicted as a result under false pretenses and its not now owner occupied? Is is there another problem I’m missing? If so, please enlighten…

#132 Wrk.dover on 11.09.18 at 8:03 am

Once again Haiti needs to reciprocate by overseeing US elections, and once again, they are no show…

#133 Penny Henny on 11.09.18 at 8:07 am

Niagara region real estate stats for October 2018.
Steady as she goes.

https://www.niagararealtor.ca/sites/default/files/October%202018%20Stats%20Press%20Release.pdf

Sales YTD down 13%. Listing up 24%. Not so steady. – Garth

#134 Ian on 11.09.18 at 8:08 am

Should there then be a government body who has the responsibility to review and critique marketing campaigns that affect how people invest? I would imagine this exists for food products, services, financial assets, etc, so why doesn’t something similar exist for the real estate industry? The largest purchase most people make in their lives and they don’t have enough information or are misled on the transaction. How can kind of promotion be stopped?

#135 Tater on 11.09.18 at 8:22 am

#12 YVR Reality on 11.08.18 at 4:03 pm
In YVR, they are no longer “foreigners” on paper because of the countless loopholes the “Chinese dudes” have all figured out. Resident students buying million dollar homes, shell companies, drug money laundering and the countless realtors and lawyers co-signing properties. I have 2 close aquaintences who solely conduct real estate business with overseas buyers from China (for over 10 years). We aren’t making this stuff up, Garth. It happened, and created this mess. ALL the locals can attest to it because we live it… but we also know there’s no convincing you of the effect it has had on our real estate values.

I gave stats. Your turn. – Garth
—————————————————————
The absence of evidence is not the evidence of absence.

Without the UBI being recorded for property sales, there is no way to know what proportion of homes are paid for with foreign money.

That’s right. So you make it up. And when enough people believe something, it must be true! – Garth

#136 crowdedelevatorfartz on 11.09.18 at 8:23 am

Robotic news readers……
Will anyone notice?

https://www.reuters.com/article/us-china-tech-ai-anchor/and-now-for-something-completely-different-chinese-robot-news-readers-idUSKCN1NE19O

#137 Dominoes Lining Up on 11.09.18 at 8:26 am

I was browsing the net newspapers this week and came across several clickbait links like this one:

https://www.yieldstreet.com/3-ideas-to-build-wealth-outside-the-stock-market?utm_source=YahooGemini&utm_medium=cpc&utm_campaign=5ways_domainrt_desktop_3ways&utm_content=3

All I can say is, OMG, wow. People are still being sucked into ‘investment’ properties as a solution to financial stress. And this ad says not just to buy real estate for renting, but also to become an online secondary alternative lender for those who want to buy real estate, as well as investing in secondary lenders, for an “8-20%” return. Because these things are ‘safer’ than investing in markets, and you don’t have to worry about corrections, blah, blah….

Holy cow, this is sad and delusional. This late in the game, too many are still refusing to wake up to the softening of the property market.

#138 TurnerNation on 11.09.18 at 8:32 am

Toronto realtor who can move houses said it’s slowed to a trickle now.

#139 Remembrancer on 11.09.18 at 8:33 am

#130 the Jaguar on 11.09.18 at 7:46 am
The sale price versus assessed value in lower mainland is interesting.
—————————————————————-
Ya good luck with that if they’re anything like MPAC here in ON. What’s the re-assessment cycle in BC?

#140 Stan Brooks on 11.09.18 at 8:44 am

Not good, not good at all.

1. Keystone pipeline halted. the BC one in the capable hands of daddy’s boy, french villa guy.

https://ca.finance.yahoo.com/news/u-judge-halts-construction-keystone-082728113.html

WCS to collapse again in price, for sure.

2. And here I laughed pretty hard:

Canada Pension Plan’s returns hit by strong domestic currency

https://ca.finance.yahoo.com/news/canada-pension-plan-achieves-0-6-percent-net-130742288–sector.html

3. Shortages of MJ.

where is this place going? sad.

#141 not so liquid in calgary on 11.09.18 at 8:49 am

@ — #5 Property Accountant on 11.08.18 at 3:35 pm

—————————————————————————

You advise the poster to sell all etf’s then use the proceeds to re-buy what the etf’s held?

Pure Folly

#142 georgist on 11.09.18 at 9:35 am

> Real estate taxes are wealth taxes. Envy taxes. They’re all about governments fleecing cash, not making properties accessible to first-time buyers. In fact, they have the opposite effect. It’s time the politicians were called out.

Totally disagree with this. Tax land, the common resource, not labour.

Want people to stop doing something? Tax them.

Want people to stop exploiting other people by owning too much land and demanding a fee (a tax). Tax the landlords.

Want people to work more, creating real actual value instead of moving money from one pocket to another (like landlords). Don’t tax income!

Totally back to front. The kind of thinking that produced RRSP withdrawls to “help” buyers. Access to credit (RRSP withdrawl is basically this) boosts prices for the exact same building.

Vote to tax land, not labour. And get us off the boom and bust cylcle that is the land cycle.

Land is not the source of wealth. Fatal flaw. – Garth

#143 Penny Henny on 11.09.18 at 9:37 am

#133 Penny Henny on 11.09.18 at 8:07 am
Niagara region real estate stats for October 2018.
Steady as she goes.

https://www.niagararealtor.ca/sites/default/files/October%202018%20Stats%20Press%20Release.pdf

Sales YTD down 13%. Listing up 24%. Not so steady. – Garth

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

Your comparison to 2017 just goes to show how crazy 2017 was. 2016 too.

But price is very steady. It is what you would call a balanced market.
Actually average price is above the spring peak.
Balanced market.

Keep telling yourself that. – Garth

#144 georgist on 11.09.18 at 9:42 am

> It’s amazing how so many Conservatives fail to recognise that if key elements of human life are treated as a full commodity, there will be a social blowback.

What amazes me is that none of them ever played the game Monopoly. We’ve seen how this ends. Someone owns all the squares and the rest of us trudge around, in and out of jail, with nowhere to land that won’t end in paying “tribute” to the lord of the land.

And that was supposed to be the lesson of the game:

https://www.theguardian.com/lifeandstyle/2015/apr/11/secret-history-monopoly-capitalist-game-leftwing-origins

Land is the common wealth. Nobody made it. Tax the *unimproved* value of land. This encourages efficient use and captures the value uplift due to public investment for public use.

Have a read Garth, you might learn something, if you are still willing.

#145 georgist on 11.09.18 at 9:58 am

> Land is not the source of wealth. Fatal flaw. – Garth

Name me one profession that doesn’t need land.

Even if you own an airline your planes have to land. When they do you have to pay. Adam Smith wrote on this extensively. As did Ricardo.

Land is the source of all materials. Labour takes these materials and adds value. If all land is privatised all workers must sell their labour for the right to exist.

Adam Smith (Wealth of Nations):

“RENT, considered as the price paid for the use of land, is naturally the highest which the tenant can afford to pay in the actual circumstances of the land. In adjusting the terms of the lease, the landlord endeavours to leave him no greater share of the produce than what is sufficient to keep up the stock from which he furnishes the seed, pays the labour, and purchases and maintains the cattle and other instruments of husbandry, together with the ordinary profits of farming stock in the neighbourhood. This is evidently the smallest share with which the tenant can content himself without being a loser, and the landlord seldom means to leave him any more”

“The rent of the land, therefore, considered as the price paid for the use of the land, is naturally a monopoly price. It is not at all proportioned to what the landlord may have laid out upon the improvement of the land, or to what he can afford to take; but to what the farmer can afford to give.”

One of the classics of humanity. A “blog dog” of his day.

http://geolib.com/smith.adam/won1-11.html

#146 down and out on 11.09.18 at 9:59 am

#95 islander is BC the only province with this plan and how does the government function without revenue ,imagine such a plan in Ontario WOW

#147 SimplyPut7 on 11.09.18 at 10:01 am

So now what?

https://www.cbc.ca/news/canada/calgary/keystone-xl-pipeline-halt-construction-judge-1.4898539

#148 Fish on 11.09.18 at 10:20 am

Ottawa’s plan to set up a national securities regulator would be constitutional, Supreme Court rules
Ruling re-opens door to creating one, should the federal government try to do it again
The Canadian Press · Posted: Nov 09, 2018 10:04 AM ET | Last Updated: 9 minutes ago

https://www.cbc.ca/news/business/supreme-court-securities-regulator-1.4898803

#149 For those about to flop... on 11.09.18 at 10:33 am

Recent sale report.

This detached on the Westside just sold and it is significant because of how low it went for, and the gap between sold price and assessed value.

The details…

2833 w 18th ave Vancouver.

Originally asking 1.78

Just sold for 1.54

Assessment 2.07

So half a million dollars below assessment right on the bottom of the detached market in one of the more desirable parts of town, or 26% less.

So we’ve got this one in Arbutus going for 1.54

A house in Kitsilano just went for 1.61

And recently in Marpole a house went for 1.4

You don’t have many options, but you too can live on the Westside for the same price as living on the Eastside if that’s what you want.

The only premium worth paying for is with ice cream…

M44BC

https://www.zolo.ca/vancouver-real-estate/2833-west-18th-avenue

#150 Makarand Pradhan on 11.09.18 at 10:36 am

#25 the ryguy

I agree with your opinion that we do not get to vote on this philanthropy.
My view is that we can indulge in philanthropy only if we are running a surplus. Do not see why we should give money out when we are running a deficit.
My 2 cents.
Eagerly awaiting to give the current govt’s rear a taste of my boot next year.

#151 dharma bum on 11.09.18 at 10:53 am

RE: #174 KLNR on Nov. 7th

Love to visit. not sure i’d want to live there though. Prices generally reflect where people want/need to reside.
——————————————————————–

Say what?!

The Greater Phoenix Area has a population of over 4.5 MILLION people, and growing.

http://worldpopulationreview.com/us-cities/phoenix-population/

Does that sound like a place where people don’t want to reside?

I stand by my statement that Torontonians and Vancouverites are TOTALLY RIPPED OFF when it comes to the cost of houses.

What costs approximately $200K US in Scottsdale, would cost $1.5M CAN in Toronto. If you buy a beautiful home in an area, say, 20 minutes outside of the metropolis, it will cost you less than $200K US. And I mean a NICE house!

https://www.zillow.com/homes/for_sale/Maricopa-AZ/pmf,pf_pt/82240161_zpid/32697_rid/globalrelevanceex_sort/33.334544,-111.728211,32.657297,-112.666169_rect/9_zm/

We think we have it so great. We pay a BIG price to be Canadian. Harder to get ahead financially when the cost of your house sucks the life out of you.

#152 Greg Soprovich on 11.09.18 at 11:18 am

Hi Garth

So true but with one exception. The B20 is reasonable policy to address structural economic risk. Canadians were fools snarfling way too much debt so what to do? Best way is to force folks to qualify for reasonable rates.

Too bad the feds helped goose things in the first place and ignored the structural rates of ahistorical low rates.

Cheers

Greg

#153 Donna Quintapine on 11.09.18 at 11:18 am

Reading many these comments today simply shows that many believe government is the answer. They will learn the hard way. It never ends up well.

Everyone will be poorer and more dependent on government and the more push towards world government is going to be no picnic. If you think you are more restrictive now just wait for your so called friendly, you think is on your side governments.

As for those that bring up Norway, Sweden, Finland etc. as the best examples of socialism which are very small population around 26 million in total population all 3 contries, U.S. is around 325 million, Venezuela is 33 million etc. Wait until their population gets to a point where social benefits etc. get out of hand.

In these Scandinavian countries most of the economic means and ownership is private ownership mostly and not by government, community planning. Bernie Sanders, Alexandria Ocasio-Cortez and others have created a myth that social democracy is the same as democratic socialism.

Once again democrats twist the facts, see how they really work, http://www.fee.org, click on articles and find article, The Myth of Scandinavian Socialism of Google that. Many of these governments say they are not a socialist governments.

I would not dismiss Garth either. Many younger people today do not have real life experience and believe everything they have read or heard without researching it or experiencing it.

As for those that say that high taxes are a deterrent to housing prices gaining too much or too high, so are higher interest rates and stricter borrowing qualifications.

This is what it used be about not this almost free, cheap money that is mostly responsible for debt ridden consumers, society and people making really ugly decisions that are now trying to blame everyone else.

The whole idea of having very low interest rates and lax lending criteria are a move toward more socialistic policies and most are naive or don’t understand this simplistic economic outcome. Get informed, in the U.S., the getting rid of much stricter lending criteria under Bill Clinton in 1990’s to make housing credit available to many that would never qualify for decades were given false borrowing power due to this.

Like Garth’s title says, it is a trap. Government being the on;y solution in any form.

#154 Stan Brooks on 11.09.18 at 11:36 am

#142 georgist on 11.09.18 at 9:35 am

Adam Smith meant arable productive farmland or land to provide primary resources – commodities, water, ore, wood that you can live of.

Nobody will need our suburb ‘developed’ land covered with cornflakes homes in 10-15 years time frame once the jobs in the big cities disappear.

#155 Fish on 11.09.18 at 11:39 am

Summary of privacy laws in Canada

https://www.priv.gc.ca/en/privacy-topics/privacy-laws-in-canada/02_05_d_15/

#156 jess on 11.09.18 at 11:53 am

Battling over bad student housing reviews in Waterloo
Students say they were threatened by landlord after leaving negative comments about property management.

https://www.therecord.com/news-story/9023835-battling-over-bad-student-housing-reviews-in-waterloo/

waterloo hotel closing …

The 14-room boutique hotel is located at the corner of King and Erb streets. The historic building dates back to 1890 and it’s south Erb Street and West King Street façades are listed by the City of Waterloo as designated under the Ontario Heritage Act.

#157 KLNR on 11.09.18 at 11:56 am

@#138 TurnerNation on 11.09.18 at 8:32 am
Toronto realtor who can move houses said it’s slowed to a trickle now.
_______________________
doesn’t it always for a couple ish months before and after xmas?

#158 Remembrancer on 11.09.18 at 12:03 pm

#153 Donna Quintapine on 11.09.18 at 11:18 am
———————————————————
Leaving aside your dire warnings about a junior senator from Vermont or a rookie congress member-elect from NYC in a Canadian finance / real estate blog comments section with that one world government tripe, lets not forget your country’s finance industry contribution to a global financial crisis was largely through packing of those easily borrowed sub-prime mortgages with AAA salt into new (at the time) investment vehicles… That wasn’t Bill Clinton hucking those so would your less government regulation have made that better do you think?

Also, what is the interest rate level / lending criteria that doesn’t promote globalist socialism anyway? 5%, 10%, 25%? Please enlighten me…

#159 IHCTD9 on 11.09.18 at 12:24 pm

#150 Makarand Pradhan on 11.09.18 at 10:36 am

My view is that we can indulge in philanthropy only if we are running a surplus. Do not see why we should give money out when we are running a deficit.
____

Exactly. But it never was about helping foreign folks now was it? It’s about optics, and future votes.

Have to wonder how many of those dollars actually made it to the folks who were said to be the designated beneficiaries – probably very little.

#160 Penny Henny on 11.09.18 at 12:28 pm

#151 dharma bum on 11.09.18 at 10:53 am

What costs approximately $200K US in Scottsdale, would cost $1.5M CAN in Toronto. If you buy a beautiful home in an area, say, 20 minutes outside of the metropolis, it will cost you less than $200K US. And I mean a NICE house!

https://www.zillow.com/homes/for_sale/Maricopa-AZ/pmf,pf_pt/82240161_zpid/32697_rid/globalrelevanceex_sort/33.334544,-111.728211,32.657297,-112.666169_rect/9_zm/

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

Hey dharma,
did you notice in the listing it last sold for $60,000 in 2012. WOW!

Well even at $200,000 it is still great value but man is that one boring house. It got no soul.

#161 Wrk.dover on 11.09.18 at 12:50 pm

Back in 88 the east valley where Phoenix is centred, was mostly farm land. At night hamlet communities such as Gilbert, Chandler, Higley and others appeared as distant islands of light at night time when driving south from East Mesa. The whole thing is infilled now.

I wouldn’t wish that on anywhere.

#162 AFD on 11.09.18 at 12:50 pm

#145

“…Name me one profession that doesn’t need land….”

Oh I don’t know….underwater welder?

#163 IHCTD9 on 11.09.18 at 1:04 pm

#142 georgist on 11.09.18 at 9:35 am

Want people to stop doing something? Tax them.

________

Surely you jest? This is totally divorced from the real world. If governments tax too much, all of written history dictates folks stop paying them.

Many times when high taxes go even higher – revenues go down.

The minute the governments make avoiding/off-setting/evading taxes worth the effort – people do it.

There is next to nothing the government can do to control the situation once it starts either, huge damage can be done to tax revenues without breaking a single law. Many will go ahead and break the law anyway as effective enforcement is near impossible.

People do what they want 99+% of the time.

Cliffs: The only thing you’ll stop by abusively taxing a people, is their continued remittance of said taxes.

#164 Lisa Renchevek on 11.09.18 at 1:14 pm

It amazes me how it looks like in school and people’s knowledge these days that they don’t understand the real life economic relationship of affordability and interest rates, monthly mortgage payments.

If people think that a 10% mortgage rate would cause the same high prices and high home ownership over the the last 2 decades at all time high then they are lost. The drop in interest rates from 10% back in 1995 to present 2018 3% to 3.5% is very close. A $300,000 cost house then in 1995 is at least $900,000 cost up 300% today correlated to the same 3 times drop in mortgage rates versus present day.

The global financial crisis and housing debt needed a willing participant which is the consumer. If the consumer thought that being in debt to their eyeballs buying everything they wanted was a good idea then they bought in the trap. You can’t suck and blow at the same time. Nobody forced you to buy a house and be in debt for the rest of your life.

Nobody forced people to make poor decisions and now you are shocked of the mess left over. No wonder you believed Obama, you didn’t do that someone else did it. By the way progressives is a the new disguised name for socialists. I guess when you signed or agreed to all those financial contracts it was not you it was someone else. What a joke.

As for socialism, communism and other government, so called people run economies are the utopia they think it is then they will be more in a financial mess than today. Good luck to your lost world.

#165 JimmyJames on 11.09.18 at 1:19 pm

You only have to read a little bit of Milton Friedman (love him or hate him) to understand that government interventions in a free market ALWAYS have the opposite of the intended effect. And its not some weird coincidence, markets react and individuals change course in response to the external forces in such a way as to negate the effects and the results always swing the other way.

#166 BillyBob on 11.09.18 at 1:46 pm

#151 dharma bum on 11.09.18 at 10:53 am
RE: #174 KLNR on Nov. 7th

Love to visit. not sure i’d want to live there though. Prices generally reflect where people want/need to reside.
——————————————————————–

Say what?!

The Greater Phoenix Area has a population of over 4.5 MILLION people, and growing.

http://worldpopulationreview.com/us-cities/phoenix-population/

Does that sound like a place where people don’t want to reside?

I stand by my statement that Torontonians and Vancouverites are TOTALLY RIPPED OFF when it comes to the cost of houses.

What costs approximately $200K US in Scottsdale, would cost $1.5M CAN in Toronto. If you buy a beautiful home in an area, say, 20 minutes outside of the metropolis, it will cost you less than $200K US. And I mean a NICE house!

https://www.zillow.com/homes/for_sale/Maricopa-AZ/pmf,pf_pt/82240161_zpid/32697_rid/globalrelevanceex_sort/33.334544,-111.728211,32.657297,-112.666169_rect/9_zm/

We think we have it so great. We pay a BIG price to be Canadian. Harder to get ahead financially when the cost of your house sucks the life out of you.

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

I do agree with you that Canada is incredibly overrated for the price it costs to live in the major centres. Amusingly so, actually, for anyone who’s actually, y’know, been anywhere else of note.

But Phoenix? Not sure it can be judged on its livability by sheer dint of how many people live there. I have good friends there. They hate it. One friend lives there and hangs on simply since her hubby is there and gainfully employed. But she despises it. And she’s from…Johannesburg. Considers it the most soulless, cretinous place she’s ever resided. (We met in Dubai whilst both working there. Consider THAT, as well as JNB!!)

There’s more to quality of life than simply cheap housing or populations stats…

#167 SoggyShorts on 11.09.18 at 1:51 pm

#164 Lisa Renchevek on 11.09.18 at 1:14 pm
No wonder you believed Obama, you didn’t do that someone else did it.
*****************************
For the record, Obama was 100% stating a fact, there is nothing to believe- it is simply true.
Your Faux news fooled you (and millions of others)

What you heard:
“If you have a business, you didn’t build that.”
What he actually said:
” Somebody helped to create this unbelievable American system that we have that allowed you to thrive. Somebody invested in roads and bridges. If you’ve got a business – you didn’t build that. Somebody else made that happen.”

It is perfectly clear what he was saying, and reducing it to a 4 second sound bite to make it seem like he said something else is simply dishonest.
The whole bit is about 3 minutes long and he explains very clearly that any business you create had help in the form of infrastructure and public servants(fire/police) etc.

Next time you hear a soundbite that aligns with your own personal bias, google the phrase “The soundbite I like, FULL VERSION”

https://en.wikipedia.org/wiki/You_didn%27t_build_that
https://www.youtube.com/watch?v=9GjqdP6KSOE

#168 SoggyShorts on 11.09.18 at 1:54 pm

#164 Lisa Renchevek on 11.09.18 at 1:14 pm

BTW I pretty much agree with the rest of your post, but that Obama meme has just always bothered me.

#169 mike from mtl on 11.09.18 at 2:04 pm

Land is not the source of wealth. Fatal flaw. – Garth
////////////////////////////////////////////////////////////////////

Right, tell that to the various municipalities and city administration who receive the vast majority of their revenue off prop, land, transfer taxes.

They receive far more from transfers from senior levels of government – which are derived fromm taxing income. Give it up. We will never have a land-based tax system. – Garth

#170 Spectacle on 11.09.18 at 2:32 pm

And here is…..Real Estate, Financial Concepts, all rolled into One Big Spectacle to behold.

Block Chain LLC constructing City outside of Reno Nevada.

Blockchain city to be built in Nevada
SmartCitiesWorld – 1 day ago

#171 mike from mtl on 11.09.18 at 2:36 pm

They receive far more from transfers from senior levels of government – which are derived fromm taxing income. Give it up. We will never have a land-based tax system. – Garth
/////////////////////////////////////////////////////////////////////

Actually I am in great favour of a easy and strict flat tax. No RRSP, no TFSA, no dividend credit, no primary residence, no cap gains, no silly income brackets, or any other exceptions. No just 10% on EVERYTHING, simple.

And, example Ville de Montreal revenues from taxes are well over twice than ‘transfers’ be it provincial or federal.

See page 8.

http://ville.montreal.qc.ca/pls/portal/docs/page/service_fin_en/media/documents/rapport_financier_annuel_2017_en.pdf

Now add in the federal/provincial infrastructure – all paid for with taxes on income. – Garth

#172 Tom Addison on 11.09.18 at 2:39 pm

What does Obama know about running a business or meeting payroll. He is an academic all his life and was a Illinois senator before becoming U.S. president. He never worked or created anything in the real world.

This is why the false lie about government and more of it is the answer. It is not. It is easy to make big promises and pay for it with other people’s money.

Actually, it is not paid for, Obama and their democrats added $9.5 U.S. trillion to the national U.S. debt at a time of record low interest rates. If rates were back when Clinton or Bush senior were President in the 1990’s, it would be at least $14 to $15 trillion U.S. added to the national debt. A massive financial mess of a legacy.

This is the problem with socialism and like minded ideas, policies. It does not work and actually drags everyone down more and more. Historical facts are all over the place about this.

Nobody wants to admit that there will never be an great economic dreamland for everyone that will never exist. Delusion is highly pervasive in our society today.

False flag. Obama inherited the worst financial sinkhole since the 1930s and liquidity was required to prevent another depression. You should be able to make a valid argument for conservative principals without fibbing. Try it. – Garth

#173 Remembrancer on 11.09.18 at 2:44 pm

#169 mike from mtl on 11.09.18 at 2:04 pm
Right, tell that to the various municipalities and city administration who receive the vast majority of their revenue off prop, land, transfer taxes.
———————————————————-
Mike from MTL: The system of seigneurs and tenants was ended in 1850s – is this simply nostalgia over lost family land grants or an active movement to return to pastoral feudalism?

#174 Ubul on 11.09.18 at 2:59 pm

#164 Lisa Renchevek on 11.09.18 at 1:14 pm

The global financial crisis and housing debt needed a willing participant which is the consumer.

Nobody forced anyone to lend, either.

Lenders are also supposed to be the financially educated party, by law.

The real depth of the financial crises was actually the securitization of the mortgage debt. Consumers did not do that.

Politicians had their fair share, too.

They were pushing the populist political idea that “everyone deserves to be a home owner”, home ownership is part of the American Dream. Politicians relaxed regulations that allowed and encouraged both lenders and borrowers to act foolishly.

#175 Maricopa Arizona on 11.09.18 at 3:06 pm

Nice home at a good price, and one could cook meals on the sidewalks 6 months out of the year. The high temperatures needed for air conditioning alone would make for a nice hydro bill most of the year. Temps over 100F don’t rock my boat. I lost count on the number of gangs in the area, but fear not because the cops have gang patrols trying to keep you safe day and night.

#176 Nemesis on 11.09.18 at 3:11 pm

“In truth, in an open society, such a right does not exist.” – LassezFaireGT

#SwimmingAgainstTheTidesOfHistory,Or… #RidingTheWayBackMachineToTheProtoOpenSociety… #TheFourFreedoms…

https://youtu.be/qrNDwyj4u1w

[NoteToGT: You write this stuff knowing that I can’t resist correcting the historical record, right?]

Nobody has a right to own real estate. – Garth

#177 PeterL on 11.09.18 at 3:24 pm

“when politicians come along and arbitrarily change zoning, allowing a duplex next door”

Single-family zoning rules restrict the supply of housing, which keeps things expensive. It might come as a shock, but there are places in the world that don’t have single-family zoning, and yet people are not upset about the “duplex next door” (or even a small apartment next door). Higher density can lead to more liveable neighbourhoods.

http://urbankchoze.blogspot.com/2014/04/euclidian-zoning.html
http://urbankchoze.blogspot.com/2014/04/japanese-zoning.html

Sure, because folks in those locations bought with those elements already in place. As I wrote, arbitrarily changing zoning in Vancouver after people have paid a premium to pay in a single-family hood is unfair, capricious, arrogant, punitive and wrong. – Garth

#178 Richard Gibbons on 11.09.18 at 3:27 pm

Taxing an asset does not make it cheaper. How obvious is that? -Garth

If you tax an asset for a subset of buyers, the price will increase for those buyers. If the price increases for those buyers, the demand from those buyers will go down.

If demand for an asset goes down, the price will go down (for buyers who aren’t in the taxed subset). So, yeah, it’s all pretty obvious that the tax will cause price to go up for the taxed foreign buyers, and down for the untaxed Canadians.

Nope, not obvious at all when the foreign buyers are an insignificant market force. Your premise is flawed. Besides most of these new taxes (higher property tax, vacant house tax, spec tax) hit citizens more than non-residents. – Garth

#179 SoggyShorts on 11.09.18 at 3:38 pm

#171 mike from mtl on 11.09.18 at 2:36 pm

A flat tax sounds like a good idea, but it has some serious problems if you really think about it.

♦No dividend tax credit? Less reason to invest in Canadian companies when American ones are 10x bigger, better and therefore safer investments.

♦No small business tax rate? Much higher rate of failure for Canadian entrepreneurs.

♦How would business expenses work? Some industries legitimately need materials, tools, or to schmooze clients.

♦What about the truly poor who currently pay zero tax? A 10% hit to their income could be devastating.

#180 Remembrancer on 11.09.18 at 3:42 pm

#170 Spectacle on 11.09.18 at 2:32 pm
And here is…..Real Estate, Financial Concepts, all rolled into One Big Spectacle to behold.

Block Chain LLC constructing City outside of Reno Nevada.

Blockchain city to be built in Nevada
SmartCitiesWorld – 1 day ago
————————————————————–
Sigh. Should call it DumbCitiesWorld instead – no matter how much blockchain pixie dust they sprinkle, a city in the desert needs mucho water though its not like America has too many of those already – is the plan to start a war with the Paiutes for Pyramid Lake or maybe there’s a hidden aquifer they are tapping?

#181 Mattl on 11.09.18 at 3:57 pm

#98 Here is your Kelowna Proof on 11.08.18 at 10:02 pm
The detach house price in Kelowna is down -$114,908 from July, 2018 until now. That is just within 3 months.

And we just getting started.

My buddy at the local bank said he sees another $120,000 drop from here as most deals are falling apart. Nobody can get the financing. It will adjust more.

Let’s just call a spade a spade.

$400,000 median prices on detached isn’t out of the question in the Interior.

———————————————————

Where are you getting your numbers from? July avg SFH for Central Okanagan was 726k. October, 716K for a less then 1% decline and a YOY increase of 5.5% (Oct 2017 was 679K).

And fall seasonality in the OK is strong, fall winter usually sees a 5-10% setback. Inventory is up, days on market slightly up. I suspect the market is soft, and home prices should be down 5-10% but I’m not seeing it in the posted numbers. Where are you getting your data from?

400K median homes in Kelowna – maybe, the real question is why didn’t you buy one in 2015 when this was possible and money was dirt cheap. You waiting utill you lose your retail job and money is 3x as expensive before jumping in? What do you think will happen to your rent in a market where there is no incentive to develop and vacancies are running 0.01%?

PS. I don’t expect an answer, you Kelowna doomers never respond because it’s not about the truth for you guys, you are trying to spin a narrative.

#182 KLNR on 11.09.18 at 4:05 pm

@#172 Tom Addison on 11.09.18 at 2:39 pm
What does Obama know about running a business or meeting payroll. He is an academic all his life and was a Illinois senator before becoming U.S. president. He never worked or created anything in the real world.

This is why the false lie about government and more of it is the answer. It is not. It is easy to make big promises and pay for it with other people’s money.

Actually, it is not paid for, Obama and their democrats added $9.5 U.S. trillion to the national U.S. debt at a time of record low interest rates. If rates were back when Clinton or Bush senior were President in the 1990’s, it would be at least $14 to $15 trillion U.S. added to the national debt. A massive financial mess of a legacy.

This is the problem with socialism and like minded ideas, policies. It does not work and actually drags everyone down more and more. Historical facts are all over the place about this.

Nobody wants to admit that there will never be an great economic dreamland for everyone that will never exist. Delusion is highly pervasive in our society today.

False flag. Obama inherited the worst financial sinkhole since the 1930s and liquidity was required to prevent another depression. You should be able to make a valid argument for conservative principals without fibbing. Try it. – Garth
____________________________

Guys like Tom here, only see what they want to see.

#183 KLNR on 11.09.18 at 4:11 pm

@#166 BillyBob on 11.09.18 at 1:46 pm
#151 dharma bum on 11.09.18 at 10:53 am
RE: #174 KLNR on Nov. 7th

Love to visit. not sure i’d want to live there though. Prices generally reflect where people want/need to reside.
——————————————————————–

Say what?!

The Greater Phoenix Area has a population of over 4.5 MILLION people, and growing.

http://worldpopulationreview.com/us-cities/phoenix-population/

Does that sound like a place where people don’t want to reside?

We think we have it so great. We pay a BIG price to be Canadian. Harder to get ahead financially when the cost of your house sucks the life out of you.

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

I do agree with you that Canada is incredibly overrated for the price it costs to live in the major centres. Amusingly so, actually, for anyone who’s actually, y’know, been anywhere else of note.

But Phoenix? Not sure it can be judged on its livability by sheer dint of how many people live there. I have good friends there. They hate it. One friend lives there and hangs on simply since her hubby is there and gainfully employed. But she despises it. And she’s from…Johannesburg. Considers it the most soulless, cretinous place she’s ever resided. (We met in Dubai whilst both working there. Consider THAT, as well as JNB!!)

There’s more to quality of life than simply cheap housing or populations stats…
_______________________________

^this^

#184 Shawn Allen on 11.09.18 at 4:16 pm

What Would Adam Smith think?

Georgist at 145 quoted Adam Smith…

And what would Adam Smith think of today’s income tax system that would tax the owner of a farm (say a small business) at a far lower rate than the salaried income of the farm worker and that would tax the capital gain of the owner of the farm land when it is sold at only half the rate applicable to income? Fair?

#185 PeterL on 11.09.18 at 9:57 pm

Garth wrote: “arbitrarily changing zoning in Vancouver after people have paid a premium to pay in a single-family hood is unfair, capricious, arrogant, punitive and wrong”.

In other words, “upzoning” should never be done? That means never solve the housing affordability problem.

#186 holly on 11.10.18 at 9:06 am

Specious argument…
Who go you think created the mess?
The same ‘government’ you’re arguing should but out… normally not an unsound position, but maybe we give them a shot at helping a bit on this one?