So yesterday a moister in Van told us why he and his squeeze bought a condo. On cue the crustaceans and paleos in the steerage section trashed them. (And we wonder why they hate us…)
Because life moves on, there’ll always be people buying. To spawn. To nest. To scratch the societal itch for property. The job here is to ensure fewer of them blow up, that they understand the consequences of their actions.
BTW, here’s Derrick in Toronto, with a so-typical question:
What if buying a box in the sky in TO gets you lower monthly payments than renting one? The rental market is crazy too. Take your pick of getting gouged for a rental or a purchase. Scenario: rent:$2000/month. Condo, say $450,000. Downpayment: 300K, mortgage 150K. Monthly payments condo fee $450 + $750 amortized over 25 years +utils/insurance/hydro /taxes say $300?. Total $1500. Rent or buy?
The answer ain’t simple. What are D’s assets? His income? Corporate pension? Age and marital status? Job security? Can’t answer without knowing more – but sadly most people never do the calcs, figuring out where true financial security might lie for them. Real estate’s not a strategy, just part of one. Never forget that.
In this case, the kid neglects the value of a $300,000 downpayment. Invested for a 6% annualized return over five years, it would grow to about $400,000. In other words, the opportunity cost of the down is $1,500 a month – so the condo costs at least $3,000 to possess. Plus property taxes are understated, and destined to rise. In other words, there have to be reasons to buy, and saving money isn’t one of them. The only valid excuse for taking the plunge is enough capital appreciation over time to outweigh closing and sale costs plus the added burden of owning over renting. In this case, over five years, that would be about in excess of $100,000. And that’s a gamble.
Maybe it’s time more people accepted the fact owning in the 416 or downtown YVR is a really bad idea. If the economy slows, trade wars intensify, commodity prices fall or money costs rise (all distinctly possible in the next three years) then you poured money into an asset that could have been leased for far less, or drop further in value. Yesterday Pablo said he could live with that thought. Good thing.
This week a mortgage-rate site crunched numbers to determine who can actually afford homes. The results support the drivel published here: in Toronto and Vancouver, buyers are gamblers unless in the top income brackets. Smarter people are heading to other cities where they can have a nice urban existence, less traffic, cheaper real estate, more cash flow and enhanced financial security. How does that not make sense?
Here’s what RateSupermarket found: to buy in Toronto you should earn $160,00, putting you in the top 10% in terms of income. In poor Vancouver, it takes wages of $240,000 annually. That makes you a 1%er.
Income required to buy, city-by-city
Here’s the comparison:
- Vancouver: House price: $1,441,000. Household income needed: $240,000
- Toronto: House price: $873,100. Household income needed: $160,000
- Victoria: House price: $741,000. Household income needed: $140,000
- Hamilton: House price: $630,000. Household income needed: $120,000
- Kitchener-Waterloo: House price: $523,720. Household income needed: $110,000
- Calgary: House price: $467,600. Household income needed: $100,000.
- Ottawa-Gatineau: House price: $444,500. Household income needed: $90,000
- London: House price: $426,236. Household income needed: $90,000
- Montreal: House price: $375,000. Household income needed: $80,000
- Edmonton: House price: $372,100. Household income needed: $80,000
- Saskatoon: House price: $301,900. Household income needed: $70,000
- Regina: House price: $275,900. Household income needed: $70,000
But remember, as with Derrick, the buy-or-rent decision is not just based on income, nor the price of the real estate. Will buying a house soak up all your cash flow and prevent you from having a liquid portfolio for the future? What are you going to live on when you’re 73 and as employable as an NDP finance critic? In life it’s the long game that matters. Play it that way.
Now, kudos to some Vancouver media. It’s a rare thing, but maybe this is a reflection of shifting public sentiment. Let’s hope.
An editorial in the Courier makes the GreaterFool argument: it wasn’t dudes from China, or bad people from Alberta, or shady money launderers who were primarily responsible for the price of houses inflating beyond control. The locals did that. Just the way locals in every market set the prices for that city. Therefore politicians who try to ‘fix’ it always fail, and in the course of doing so distort the market, making outcomes worse. Plus, people who strive to buy using extreme debt and duct tape are putting themselves at risk. Ironically, if you stop, the market will correct. It always does. Really.
First we were told it was foreign buyers who had driven up the cost of housing in British Columbia. Then it was real estate speculators who were responsible. Now the B.C. government and much of the public and media have turned the guns on near-phantom money launderers as the mystery bogeyman to blame for the unprecedented surge in Metro Vancouver housing prices from 2015 to 2017.
Despite all the hyperbole and headlines, it turned out that foreign home buying in Metro Vancouver peaked at less than 5 per cent of sales and has since fallen below 1 per cent. The few remaining foreign homebuyers are still exposed to a 20 per cent tax on their purchase. The provincial government then further weaponized taxes and thundered after residential speculators who it said were forcing tenants into the streets and driving up residential prices across the province.
“The speculation tax focuses on people who are treating our housing market like a stock market,” said Finance MinisterCarole James. The government then required the majority of B.C. homeowners to fill out a lengthy form on any homes they owned. Failure to do so results in taxes of thousands of dollars, guilty or not. The forms revealed that just 1 per cent of owners could be defined as speculators and most of these are B.C. families who happen to own a vacation home, often for generations.
The money launderers are an even more elusive target, primarily because it is not against the law in B.C., at least not yet, to pay cash for something. The recent government-ordered report on money laundering in B.C. real estate was vague to the point of nonsense. It could be worth $800 million. It could be $5 billion. Whatever, who knows? The report also stated that Manitoba and Saskatchewan have more money laundering in real estate than B.C., which gives an idea of how much faith we should put in its findings. Now the provincial government has ordered an expensive Commission of Inquiry into Money Laundering in B.C., which won’t report back until May 2021.
What politicians miss is that there is no mystery bogeyman to blame for high home prices. B.C. residents buy and sell more than 96 per cent of residential real estate; all the biggest property developers are B.C. born and built; and government delays and taxes have helped drive housing supply down and prices up. But it is easier, and more vote-friendly, to blame someone, anyone else.
Bingo.
148 comments ↓
“downtown YVR is a really bad idea. If the economy slows, trade wars intensify, commodity prices fall or money costs rise (all distinctly possible in the next three years) ”
****
If my conversations with tradesmen( drywallers, painters, carpenters, etc) are any indication….
The housing builds are definitely slowing.
People tend to slack off work during the summer, lets see what Sept, Oct, Nov. brings……just as the summer vacation visa bills come home to roost
DELETED
And bingo was his name-o.
No way houses are cheap now. Low ball them!! That and investments rock!! And first!!!
And um, first!!!
Hmm. The Courier? This courier perchance.
https://www.westerninvestor.com/about
I suppose it depends what lens you want to view the facts through.
LOL. Horgan, James, Eby, and the whole NDP crew are such bumbling imbeciles.
Did you write the editorial Garth? It sounds like an echo. When the Courier was arriving unsolicited at my doorstep last summer it was really useful for potty training my 2 month old puppy.
Nice try but blame the global banking cartel. They know how easily they can manipulate human beings. They stoke the fire and let it burn. If real estate slows down they stoke it again.
In Vancouver everyone said you are nuts to pay over $1M for a house…how the heck we get to 2.5M ??
The left hand controls everything indirectly…they are too smart to use direct force. Divide and Conquer is the hallmarks of their religion.
Garth
I’ve been reading for a while and the point you make about BC residents causing the housing market boom themselves comes up quite a bit. I think its something that you want to be true, but unfortunately I don’t think it is that simple.
Real estate agents look at other houses in the area when deciding the list price. Even though foreign buyers only make up a small portion of the buyers, they can have an over-sized effect on the market. It only takes one buyer to offer 10% over asking make 20 other people in the neighborhood think their house is worth that much now. Unfortunately its not that easy for an entire city of locals to get together and collectively agree not to go crazy, which is why you need the government intervention. If the government had implemented the foreign tax earlier, it could have stemmed the flow of capital (or at least the perception of it among the locals) sooner and tampered the price inflation.
It would be interesting to know how much the 5% of foreign buyers would typically offer over asking on a house. If its higher than what the 95% of the BC residents would offer, then we know the locals were chasing the foreign offers. If it is lower than you might convince me its a totally local problem (ignoring the effect the mere notion of foreign capital flooding in has on peoples behavior)
Excluding maybe London/Kitchner, I would say 416 is a better buy than small cities and even more far out suburbs.
Yes all Canadian RE is over priced, but in most parts of the world downtown and core areas of major cities command very high prices. What is different about Canada is that places very far from the core still have high prices. Like maybe Milton where houses can go for well over $900K.
And that $240,000 per year income would get you maybe a crappy detached house in East Van with all the pot smoking hipster losers.
If you actually want to live somewhere nice in Vancouver you’re going to have to earn a hell of a lot more.
Now Garth, you KNOW that ‘they’ are the reason for all the ills of the world. Never ‘us’ or anything we may have done or failed to do. Your insistence that people should be responsible for their own actions is so not politically correct. For shame, blaming people for their own actions or lack thereof. What were you thinking?
On the plus side, you are thinking & even (gasp) sharing financial knowledge. Having saved more than one hapless beaver from financial disaster, your ultimate reward will be entrance to doggie heaven, surrounded by prancing pups:)
As a local Contractor in and around YVR, its been the slowest Spring start in recent memory for us.. at the same time, nice having more options with trades :-)
Lengthly form? I helped my parents do theirs in two minutes.
The last part of your post is plagiarized from a Western Investor online article.
No plagiarizing. Reprinted there. – Garth
I don’t disagree that locals had an out sized impact on YVR prices but this:
“… it turned out that foreign home buying in Metro Vancouver peaked at less than 5 per cent of sales and has since fallen below 1 per cent…”
shows a lack of understanding on the issue. We do NOT track beneficial ownership in BC when it comes to RE, so that number is likely dramatically understated. Further, most of the sales to foreign buyers were in high end markets so sales by volume is MUCH higher then 5%. In some markets it was proven that up to 20% of KNOWN buyers were foreign. These same markets are getting cranked on and account for most of the drop in equity.
Other things to consider – the market peak lines up almost perfectly with the Chinese dudes tax – Aug 2016.
And if it takes a 1% to afford a home in Vancouver, how does that translate into locals driving up prices? Is the theory here that a moister making 65K is the prime reason homes went from 700K to 1.4MM in Richmond? How does that work exactly?
What really happened in Van was homes in the best markets were being bought at any price by Chinese buyers. This created a waterfall effect that made it’s way all the way to place like Langley, Mission, and even Agassiz. Long time homeowners sold in the city and moved east – all the way to place like Kelowna – and drop prices up all along the way. No doubt FOMO was a huge factor, and the prices being paid by middle class people to live in particle board homes in Maple Ridge and Aldergrove is shocking. White 30yo guys crawling over eachother to buy 800K basement entry homes on 4K square foot lots in Mission. Insane.
But IMO the catalyst for that was a huge influx of money into places like West/North Van, Burnaby, Richmond etc. A gold mine for long term owners, who moved East and drove up “cheaper” homes into the mess we have now.
Personally, we got our pay day twice as the FOMO gold mine moved east, moved to Kelowna and were part of the drive up of prices in my area. Home prices were stable here forever, so if it was just low interest rates and house hormones driving RE why didn’t we see places in Kelowna take off? Because it took a while for the waterfall and move down/out buyers to make it’s way this far East. But it all stated in Van and foreign money played a huge part (and thank god, retirement is a lot sooner because of it).
House price: $444,500 in Ottawa, lol. For a teardown or in an hour + of traffic. The problem with the Ottawa Real Estate numbers is that it includes houses as far away as 70km from the Core. I understand the logic of the article, but in truth if you want a SFD home or even a townhome within the greenbelt, near transit, and not a complete reno, your looking at High 500’s to low 600’s. Glebe and Westboro are 800’s, though this is expected.
The average is for properties, not just detached single-family homes. It is accurate. – Garth
Are there the same stats about rents in difference provinces and the income needed to support that. Recently th rents have gone up insanely and the supply is very limited What will become of renters?!
Foreign buyers? Please define. Someone who bought their citizenship through the immigrant investor program and generally resides outside of Canada I would consider a foreign buyer. Only Canadians for the convenience of it.
Yet, home ownership for this group sits at over 90%. 20% of Richmond condos sold to foreigners. And you think there isn’t an influence there? That doesn’t even include holding companies.
There was plenty of house flippers. Lots of stats to back that up on BC assessment and zolo. Now tonnes are getting burned. It is just like buying Bitcoin and Canada Goose. You can’t all be winners.
As for money laundering, there is a lot more of that in the restaurant businesses. They don’t need to deal in houses. I imagine it would speed things up a bit.
Inheritance and gifted money you can add to the list of things that pushed the market higher. I suspect Derricks $300K down-payment comes from this category. There is no investment loss on the 300K because he probably didn’t have to earn it or save it. No one in their right mind would put down 300K on a 450K condo when you can borrow money under 3%. Too easy to get safe returns in the 4-6% range.
As for the NDP.
Strange though how you start to correct these “problems” and then house prices start to come crashing down to earth.
Locals helped push up prices, but they were not the catalyst. 51% approval rating for Johnny.
Kilt.
What about local buyers with loads of cash who recently moved here or go to school here. I suppose they don’t count as foreign buyers. They just displace the families already living here.
https://www.youtube.com/watch?v=IZs2i3Bpxx4
The politicians behind the Immigrant Investor Program should be considered criminals and face trial for crimes against the people of Canada.
https://www.canada.ca/en/immigration-refugees-citizenship/services/immigrate-canada/investors.html
Immigrants ‘displace’ pure people like you? Did they bump you into the sea? – Garth
Your take on BC RE is getting worse with each post.
check your sources.
—
Western Investor is the trusted source for commercial real estate, franchising and business opportunities in Western Canada. Industry professionals and private investors from across BC, Alberta, Saskatchewan and Manitoba have been relying on Western Investor for all the latest news and the most comprehensive listings for over 30 years.
—
Who are you going to quote next? BCREA?
Give it up, Garth.
The article appeared in the Van Courier. It was reprinted in the publishing company’s other assets. “The Vancouver Courier is a Canadian semiweekly local newspaper published in Vancouver, British Columbia, by the Van-Net chain owned by Glacier Media Group. Currently, it is Canada’s largest distributed community newspaper, with a weekly distribution of 265,000.” Now, be a useful boy and talk about the content. – Garth
Edmontonian’s can afford two houses?
Edmonton: House price: $372,100. Household income needed: $80,000
**************************************
And two-income households averaging $80k each are in no way rare in Edmonton. They can buy two houses if they want to.
Though I don’t know how anyone can get by on what would be left over from an $80k pretax income after buying a $372,100 house. These calculations require scrimping for a couple decades after buying that house.
So, Edmonton households making $160 would be wise to stick to one house under $400k. That so-called and fabled rule of no more than three times income is not a bad idea.
Jeezus.
Imagine paying $300k for the privilege of living in Regina.
Try harder to be an a-hole and insult others. No, really. – Garth
Lol, the ‘opinion’ writer is with ‘Western Investor’ that specialize in real estate, and has a vested interest in killing any provincial measures that soften the market. You might as well listed an ‘opinion’ piece by the head of the Urban Development Institute on how prices went up because BC is desirable.
Geez, trotting out an opinion piece devoid of facts to justify a narrative of the big, bad provincial government is not exactly credible.
It has been factually proven by CMHC/Stats Can proven that foreign capital had a significant impact on, and stake in, the market – over 20% of new condos in Vancouver, Burnaby and Richmond went to foreign capital.
And lets always remember the US market – it took 8% of marginal buyers to cause a 30% decline in prices. All of a sudden, that mere 5% does not seem so negligible now as prices are always set on the margins.
Too many commenters are so biased & ill informed.
The report dissed Manitoba by not including Winnipeg. What do they have against the keystone province?
The 8 months of winter and 4 months of mosquitoes?
The Victoria and Grand Beach babes?
The Golden Boy?
Well Garth I kind of see things differently, seems like the average wage in Vancouver could never keep up with the prices in that City let alone buying them and let them sit empty. From what I understand people are heaven an extremely hard time finding a place to rent that is Affordable.
But I’d really like to know where those hundreds of billions of dollars that were laundered being put into, if not real estate.
#21 Shawn Allen on 05.30.19 at 5:28 pm
Edmontonian’s can afford two houses?
Edmonton: House price: $372,100. Household income needed: $80,000
Gotta say there Shawn Allen, your reading comprehension skills are completely out of this world.
That’s the only possible way that what you wrote actually makes any kind of sense even to you.
:-)
It’s pretty funny actually.
Tee hee!
the thing about calculating the “income to buy” narrative is that people making $240k+ arent looking to buy an ‘average’ house… they work hard to live among their equals
90 % of the RE bubble if not more is the DIRECT result of the intervention by government especially that criminal institution/crown Corp called the Bank of Canada
Junk monetary policy, tax grants, CMHC/genworth subsidies and the governments’ support for securitization along with massive development charges /fees and zoning are the MAIN causes
What we are seeing is corrupt big government acting the way they all do as the spectacle begins to unwind
This is nothing yet folks
Watch Illinois and NJ politics very closely for our future over the next 5-10 years
Lights out
For a major city in Canada, Best house-price-to-income ratio is in Edmonton.
Please don’t quote anything from Georgia Straight. The have been bought by developers. Thank you
Garth, thank you for your great blog!
Also, I would like to share with you and all your loyal readers, that as of 1 month ago, I have relocated again, making the Province of BC the 5th Province I have chosen to reside in. In the Okanogan to be exact. Very near Penticton.
As always, life is very good being me and free.
Freedom First
‘Maybe it’s time more people accepted the fact owning in the 416 or downtown YVR is a really bad idea. If…”
What really scares me is what some of these politicians propose sometimes. Extra property taxes on homes over X dollars, sure now it will just get the ‘rich’. I mean, given time, and inflation, all of our houses will be valued at more than what they propose. Then we all end up paying more in the end.
I keep reading that it was the locals that pushed prices up, not the $7B in money laundering just last year in BC. Locals were simply FORCED to compete to stay where they live, that is it. The locals basically got caught up in a crime spree, and will be holding the bag for decades thanks to the corruption which made BC a world class money laundering hot spot.
Hm. Lets compare the Income required to buy, city-by-city to the Largest Census Metropolitan Areas in Canada by population (2016 Census) numbers :
1) Toronto 5,928,040
2) Montreal 4,098,927
3) Vancouver 2,463,431
4) Calgary 1,392,609
5) Ottawa-Gatineau 1,323,783
6) Edmonton 1,321,426
7) Quebec 800,296
8) Winnipeg 778,489
9) Hamilton 747,545
10) Kitchener-Cambridge-Waterloo 523,894
11) London 494,069
12) St. Catharines–Niagara 406,074
Wow. Wild!
I’d like to agree fully with you Garth, but this analysis does not really capture the market-setting impact that a tiny number of foreign buyers or any other special group have on prices. This has been a big factor in Victoria as well as Vancouver. (Think of the ticket resale bots and specialists who are able to drive up prices for online purchases of sports or concert tickets as another case in point)
That factor has yet to be fully understood in any analyses I have read on this topic, including this one. It’s not as simple as you would like it to be.
What Comparison or conclusions?
#35 Bonhomme Carnaval on 05.30.19 at 6:43 pm
Hm. Lets compare the Income required to buy, city-by-city to the Largest Census Metropolitan Areas in Canada by population (2016 Census) numbers :
1) Toronto 5,928,040
2) Montreal 4,098,927
*****************************
Let us know when you are ready to actually show the comparison or to give the findings.
Nothing to see.
Nothing at all……
https://www.burnabynow.com/news/511-million-in-mortgages-set-up-by-unregistered-vancouver-broker-who-cooked-books-ficom-1.23840061
Its all in your imagination….. nothing to see, nothing at all….
#15 Mattl on 05.30.19 at 4:28 pm
I don’t disagree that locals had an out sized impact on YVR prices but this:
“… it turned out that foreign home buying in Metro Vancouver peaked at less than 5 per cent of sales and has since fallen below 1 per cent…”
_ _ _
Yes, and that 5% figure is rubbish, everyone in Vancouver knows it. CMHC statistics showed 20% of new-build condos were puchased by foreign buyers. That doesn’t include PRs who may have received money spirited out of other countries.
And of course the final, most damning fact, presented by Garth himself:
“Vancouver: House price: $1,441,000. Household income needed: $240,000”
How is that possible when the average family income in Vancouver is $65k….?
https://vancouversun.com/news/local-news/radical-disconnect-as-average-metro-vancouver-earner-reaps-72000-a-year-and-pays-1-4-million-for-a-home
Simple. People selling inflated houses buy even more inflated houses. Incomes finance the difference. Just like in every other urban centre. – Garth
@#32 Freedom First
” I have chosen to reside in. In the Okanogan to be exact. Very near Penticton.”
++++
Last Summer it was dubbed “Smokanagan”.
Buy a mask with a hepa filter if you like the great outdoors.
The important thing to keep in mind is that house prices go up and down but taxes always go up.
Government pensions also increase in good years or bad years.
As the great Kurt Richebacher pointed out the idea of borrowing more to get out of debt is a ridiculous inane policy decision which every Canadian politician invokes.
Richebacher correctly assessed the American housing euphoria before the financial crisis as a tragedy based on a sham.
Our politicians have decided to go down the same road. They know better and they certainly know it will end badly here as well, but not before they have extracted every dollar they could out of you to grease themselves and their flock.
You are nothing more than a sucker.
The winners are the ones with the gold plated pensions which are protected in a deflationary environment.
The losers are the ones supporting those pensions as asset prices inevitably decline.
The only chance we had for success in this country was to cut the costs of running the place by 15% from 2008 levels. Now we have low oil prices and a hollowed out manufacturing sector two elements which should have been easy for even the dullest economist to predict.
Rather than be prudent the governments of the provinces and municipalities went on spending sprees.
The people and the loonie are the losers.
Enjoy your retirement. It will be different than that of your gold plated neighbors.
what about thunder-bay?
What a crock, half the most expensive homes in Vancouver are owned by numbered companies–not residents. Money laundering is much more than 5%, it is so obvious everywhere, except on this biased blog
Why are y’all trying to piss off |Garth?
Here is a feel good story:
CRA adds $1 billion to government coffers going after real estate tax cheats
https://www.thestar.com/vancouver/2019/05/30/cra-adds-1-billion-to-government-coffers-going-after-real-estate-tax-cheats.html
QUOTE:
VANCOUVER—After going after tax evaders in the overheated real-estate markets of British Columbia and Ontario, Canada Revenue Agency audits have added more than $1 billion to government coffers.
The agency recovered $604.5 million from Ontario and $422.6 million from British Columbia in the last four years for a total of $1.027 billion.
At a time when a house is financially out of reach for most residents of Metro Vancouver and the Greater Toronto Area, the agency said in a news release Thursday it is imperative that tax rules are followed since tax evasion combined with money laundering can push up housing prices.
CRA auditors reviewed more than 41,000 returns from B.C. and Ontario filed between 2015 and 2019, which resulted in more than $100-million in assessed penalties for those who knowingly made false statements on tax returns.
The majority of audited files — 34,314—were from Ontario, with 64 per cent of the $604.5 million coming from audits on GST/HST rebates on the sale of new homes or residential rental properties.
In B.C., after auditing 7,400 files, 63 per cent of $422.6 million in recovered money came from those who under-reported income tax.
===========================
Interesting that 34,000 of the 41,000 audits were from Ontario…yet BC recovered more per investigation.
re: #22
Jeezus.
Imagine paying $300k for the privilege of living in Regina.
I think you can say that about Canada in general
most of the built environment is butt ugly in my opinion, the quality of both commercial, residential, governmental and yes even industrial development at least in the northeast is far better beyond anything, anywhere in Canada
Canadian property is overpriced crap
Spotted in Vancouver.
A Telsa.
Number plate.
OIL LOL
M44BC
While airplanes with auto pilot leave strait contrails pilots ca bring contrail to whole new level. Another reason why pilot beats autopilot.
https://twitter.com/StephenLosey/status/1134139680633556993?s=20
Vancouver: House price: $1,441,000. Household income needed: $240,000
we were in Vancouver last week. My son drove us around Kitsilano. Very average house is assessed at $2.5 million. Then we went to the White Spot.
Yeah I read about Pablo & his love yesterday. Pablo says they have a combined income of $300,000 and $400,000 stashed away. According to the story, they bought a condo in the 700’s range. So if you’re selling a house in Kitsilano, you’re still looking for a buyer.
Georgia Straight is bs.
The income needed for Victoria is lending only.
The 741k house in Victoria works out to $158,707 requirement with 5% down, stress tested. Kelowna, where the wild fire smoke is already rolling in again this year just after the 8 month open burning season that keeps the valley filled with smoke ended last month – 95 aqi today. Go long respirators with oxygen tanks for the BC Interior again this year.
Back to Victoria house – $3,585 per month for rental break-even at 12-month rent per year without any vacant months and without claiming the rental income. Pretty much same in Okanagan – although price cuts are accelerating. These numbers will drop.
That condo purchase price for 700k in lower mainland / burbs is suspect. There are plenty of nice condos in the burbs for 400k right now.
You think those numbers are wild.
Kelowna population is 132,084 and a house cost averages 740k for a house.
Person-per-person that is wow! Most expensive real estate anywhere. Must be the smoke tax or something.
Compare that to a University town like London Ontario where the population is 383,000. House price 420Kish?
Yeah, I am sure it is the healthy jobs market in BC pumping that. Hockey bag manufacturing and all bags alike to carry money is in high gear.
Interesting numbers Garth.
Decided to plot the RateSupermarket House Price vs. Household Income data and got this:
https://i.imgur.com/AuowPFz.jpg
A 99.7% correlation. Kudos to them.
If you’re young with a portable career or retired with a portable bank account, Canada’s your Oyster and you can save a lot on housing if you want to. Still, home is where the heart is and if you can afford it.
As for the House Price run-ups on the Left Coast or Trauma & Environs…look in the mirror as to whom is responsible and not the Barbarians at the Gate.
#22
Hey $300,000 is not bad for a house in sunny Siberia.Think of all the money you’ll save for retirement in Mexico ! Suffer for 25 years,done then fun.
#9 anonymous on 05.30.19 at 4:03 pm
It would be interesting to know how much the 5% of foreign buyers would typically offer over asking on a house. If its higher than what the 95% of the BC residents would offer, then we know the locals were chasing the foreign offers.
****************************
Yes…kinda…but also no…
If 5 rich/criminal guys walk into a busy bar and yell that they’ll pay $20 for a beer in order to get served first, whose fault is it if every single other person in the bar also agrees to pay $20, $25, $30 a beer?
The other 95 customers could have simply waited for those 5 others to do their thing, and for the bartender to realize he’s run out of morons and then bought beers at a normal price.
Forgive me if I sound naive, but I’ve been waiting things out here in Calgary and can’t help wondering if summer in BC and Alberta being replaced by wildfire season is going to have much of an impact on real estate prices? Surely fewer people will want to live here if this is, indeed, the “new normal”?
#13 BC Renovator on 05.30.19 at 4:20 pm
As a local Contractor in and around YVR, its been the slowest Spring start in recent memory for us.. at the same time, nice having more options with trades :-)
————————————————————–
I would be curious to know that if you purchased an old 1920’s style house in Mount Pleasant (Vancr) for say $850,000 back in 2008 and you did a reno on it, what would you have resold it for and what would have been your profit margin?
Poloz held firm the 1.75% bank rate. Even odds for a rate cut this fall.
Which makes me very suspicious since tomorrow is the:
March 2018 GDP Report
Signals to me little or no growth or yet again, a contraction for rates to be frozen or perhaps cut further later in the year.
Retail Trade, 35% of GDP, for that month says growth (with job numbers in support).
We’ll find out tomorrow how it went.
Oh look, another “Millennial” sitting on $300,000 in cash..
Does this blog attract only those Millennials who got lucky with weed penny stocks? Because most of the Millennials I know who at near 30 years of age have between $2K-$20K in savings, at least in my circle.
#15 Mattl
But it all stated in Van and foreign money played a huge part (and thank god, retirement is a lot sooner because of it).
—————————————————————–
And some “Greater Fool” will be paying for that retirement.
I mean yeah, but what?
https://biv.com/article/2019/05/how-slow-retail-sales-would-hurt-economy-if-bc-reins-money-laundering
The new NAFTA (that we are hoping to ratify this summer) has just been practically destroyed by Trump who slapped a 5% (soon to be 25%) duty on all Mexican import…to make Mexicans stop the illegal migration…
#41 Reality is stark on 05.30.19 at 7:16 pm said:
The important thing to keep in mind is that house prices go up and down but taxes always go up.
************************************
Not true for corporate taxes certainly which have gone from about 48% combined Federal / Provincial to roughly 25%. I recall utilities in Alberta (I worked in the industry) were at about 48% in the early ’90s and now it’s 26%.
And it seems to me that personal marginal tax rates in Alberta for middle and high income earmners went down a lot when Klein introduced the flat tax.
Certainly some taxes do go down. GST went form 7% to 5%.
Trump reduced federal corporate taxes from 35% to 21%.
The belly aching is unending for the slightest tax increase, tax decreases seem to go unnoticed.
Property tax mill rates surely went way down as house prices soared.
Tax decreases when they occur do not fit the narrative so much not be real. And certainly must not be acknowledged.
Reality is not stark. It is what ever you want it to be. No matter what your view of reality is, you will easily find support for it on the internet.
meanwhile t’other Derek is mired in legals and will never see his dough…..mirite?
RE liquidity SUX
Let’s compare average home prices, price movement, rent in 35 cities around the world.
https://www.cbreresidential.com/uk/sites/uk-residential/files/property-info/FINAL%20REPORT.pdf
Waiting for Garth to tell us that Trump is slapping new tariffs on Mexico in preparation for the inevitable deal with China…
At this point, as of today, I just want to find a place to live where I can work and live with no smoke. Ash falling from the sky today. And tomorrow. And it’s only May.
#64 That’s all she wrote….”Waiting for Garth to tell us that Trump is slapping new tariffs on Mexico in preparation for the inevitable deal with China…”
—————————
Close…….
Tump just made Mexico pay for the wall…..lol….
It always was, and always will be, about interest rates. And chief clown Poloz decreed just yesterday that Canada’s rates, just barely above historical “emergency” lows, are fine and normal.
So people will continue to do what they have been doing: go to the bank and ask “how much house can I get?” And the banks will tell them the the max, and they go out and buy the biggest house they can find for that max price, because the monthly payment is “affordable.”
There needs to be a political movement in this country around raising interest rates.
https://www.cbc.ca/news/canada/british-columbia/smoke-season-wildfires-alberta-bc-1.5156233
Talk about burning your house down!
“The Vancouver area is only getting the tail end of the smoke right now.” (May 30, 2019)
#54 GenX Calgarian Moister
We went through the same thing in the 80’s and 90’s; it’s cyclical, the pine beetle (imported) caused much destruction and we are currently feeling the affects. It is a dry spring up North; few years back it was a dry spring down south. It is not pleasant but life!
Garth what is your opinion on pre-build condos right now in Toronto?
Why on Earth are they more expensive than resales???
Real estate agents say that’s what they will be worth in 3 to 4 years commanding 1.25 times the rent today. Could this be true?
You ain’t seen nothing’ yet :)
It is people who have made promises of more (@[email protected], @Teh Stock Market, @Derivatives, pick one, any one from Exter’s Pyramid), which they cannot logically and mathematically keep because they cannot issue the interest, and, if they could, it would be worthless wheelbarrows of promises printed on paper, that will blame just about everyone (IMHO not “just”, but actually everyone) but themselves.
This whole housing price thingy in Vancouver reminds me of when the Queen’s Cowboys went after Murray Pezim & a couple of his Toronto promoter friends for allegedly deceiving local schmucks out of their hard earned cash. They had this big building full of tape recorders & tape away they did. For a couple years. All the market guys kept on pumping & dumping like usual. Moms the word & Bobs your uncle. Big court case, 15,200 recorded telephone conversations. Outcome? Nada nothing,nobody, big fat zero. Case dismissed. The money’s gone. Nobody did a day.
Same with Van towns R/E gold rush. Its over, it’ll come back. Meanwhile our dear readers best course of action while waiting is try to spot where the fresh money is going to go. Here’s a secret. Nobody calls you up when the load up starts. Then figure out a way to get your mitts on as much of it as you can without going to jail.
#62 bellend on 05.30.19 at 8:26 pm
meanwhile t’other Derek is mired in legals and will never see his dough…..mirite?
RE liquidity SUX
****************************
I thought about him too, @GARTH what’s the news with the other Derek? did he ever get his dough?
The debtors declared bankruptcy. – Garth
#57 Keyboard Smasher on 05.30.19 at 8:14 pm
Oh look, another “Millennial” sitting on $300,000 in cash..
Does this blog attract only those Millennials who got lucky with weed penny stocks? Because most of the Millennials I know who at near 30 years of age have between $2K-$20K in savings, at least in my circle.
—————————————————————
You need to find a different circle unless you prefer to hang out with losers.
Retail Trade is What Percent of GDP?
#56 Dolce Vita on 05.30.19 at 8:12 pm
Poloz held firm the 1.75% bank rate. Even odds for a rate cut this fall.
Which makes me very suspicious since tomorrow is the:
March 2018 GDP Report
Signals to me little or no growth or yet again, a contraction for rates to be frozen or perhaps cut further later in the year.
Retail Trade, 35% of GDP, for that month says growth (with job numbers in support).
***********************************
Retail trade contributes a bit over 5% to Canada’s GDP.
Retail sales would be large in relation to GDP but the contribution of any industry to GDP is not sales. It is (at least approximately) Sales minus costs paid to external sources other than staff including notably cost of goods purchased for resale.
Or I suppose Dolce meant retail sales contributed 35% to growth in GDP for that month?
Most of his post at 56 seems to say expect little growth. The last sentence says there will be growth as retail sales and jobs were strong?
#70 Cto on 05.30.19 at 9:20 pm
Garth what is your opinion on pre-build condos right now in Toronto?
Why on Earth are they more expensive than resales???
****************
Interest-free leverage? With no need for bank approval?
How stupid do you have to be to not understand how climate taxation has nothing to do with climate? It was invented to fund a massive UN cash grab, everyone knows it, but truth deniers have been pickled in brainwashing propaganda that the fart clouds won’t dissipate. Now that the children have been classroom shamed , perhaps only the inevitable 100% taxation will cure the parents. The Truth Deniers are desperate to have co-opted the kiddies because they see the propaganda budgets starting to dry up.
https://business.financialpost.com/opinion/joe-oliver-canada-is-getting-worryingly-close-to-embracing-economically-destructive-sustainable-finance
#20 yvrguy on 05.30.19 at 5:22 pm
…..Western Investor is the trusted source for commercial real estate, franchising and business opportunities in Western Canada. Industry professionals and private investors from across BC, Alberta, Saskatchewan and Manitoba have been relying on Western Investor for all the latest news and the most comprehensive listings for over 30 years.
—
Who are you going to quote next? BCREA?
Give it up, Garth.
The article appeared in the Van Courier. It was reprinted in the publishing company’s other assets. “The Vancouver Courier is a Canadian semiweekly local newspaper published in Vancouver, British Columbia, by the Van-Net chain owned by Glacier Media Group. Currently, it is Canada’s largest distributed community newspaper, with a weekly distribution of 265,000.” Now, be a useful boy and talk about the content. – Garth
***************************
Recently, it came out (via Katie Telford – SNC fiasco) that a possible strategy to change public opinion would be to place editorials in ‘supportive’ newspapers. You have to check the source. This local paper chain is stacked with real estate ads. There was a time when more 2/3rds of the paper consisted of house listings/sold advertisements. They survive on real estate revenues. Great fire starter though and most likely not the type of papers that would exist under your leadership.
Today in BC we have partisan investigative journalists trying to divert attention from several investigations with respect to the BC Legislative and the former governing party. The former clerk recently ‘retired’ as misconduct was found. Today’s desperate attempt is being orchestrated to get in the way of the current investigations. The logic is mind boggling, a cornered political animal scenario in play. Resorting to TRUMPO tactics.
Balance and diversified research is also required.
You can’t make this sh$t up.
Hey what’s up with one of Jason Kenny’s UCP MLAs? anyone see that bit of news!
Fake news = what you disagree with. – Garth
No Winterpeg in that list. As this blog has pointed out the average family income is in that 70+K range. Looks like most folk can’t buy unless they live in the frozen prairie west, maritime or a small town. More blogs on how lower income groups can navigate and not eat pasta in retirement would be great. Thank you
https://www.economist.com/britain/2019/05/29/new-anti-corruption-powers-aim-at-foreign-buyers-of-londons-posh-homes
“Therefore politicians who try to ‘fix’ it always fail” …..really, seems to be working pretty well in BC!
https://www.cbc.ca/news/politics/ashamed-cooper-suri-committee-chaos-1.5156624
Ok…time to separate church from state.
#66 Deplorable Dude on 05.30.19 at 9:07 pm
#64 That’s all she wrote….
Close…….
Tump just made Mexico pay for the wall…..lol….
***********************
You know that Mexico doesn’t pay those tariffs, right?
The BUYER pays the tariffs, so he actually just made Americans pay for it.
https://www.politico.com/newsletters/morning-money/2018/09/18/trump-makes-no-sense-on-tariffs-344232
Canada’s team, the Toronto Raptors have won the first game of the NBA finals!!! The Raptors rock!!!!
Go Raptors!!!!!!!!!!!!!!!!!!!!!1
Probably the best Polititian of the 21st century yet.
https://m.spiegel.de/politik/ausland/angela-merkel-in-harvard-ihre-rede-war-eine-abrechnung-mit-donald-trump-a-1270111.html
#68 islander on 05.30.19 at 9:13 pm
https://www.cbc.ca/news/canada/british-columbia/smoke-season-wildfires-alberta-bc-1.5156233
Talk about burning your house down!
“The Vancouver area is only getting the tail end of the smoke right now.” (May 30, 2019)
================================
Driving from Tsawassen to Vancouver this afternoon..could barely see the North Shore mountains…extremely hazy..never “saw” this before.
Historically….one would see this haze up the Fraser Valley in summer aka East of Vancouver.
How about this idea making plant to work OT so they can recycle more co2…
https://www.solbere.com/
To all the good wives out there, I got a good one. She knows how to cook. She was most epic best bet ever.
She now trades forex. I’ll post her p&l on my blog soon as I remember the password.
https://youtu.be/NGorjBVag0I
On News today…
Oregon legalized pot 5 years ago..
The Oregon Gov’t reported there currently is a 5-6 year supply….and is looking to finding ways to reduce the volume aka reducing the number of suppliers..
Pot prices are collapsing…the illegal pot market may grow…
Oh so predictable !!!
“Immigrants ‘displace’ pure people like you? Did they bump you into the sea? – Garth”
Money displaces everyone. Purity has nothing to do with it. I’m perfectly fine with a globalize world. Just stop wasting my tax dollars on an expensive useless military.
#65 Blutterfy on 05.30.19 at 8:51 pm
At this point, as of today, I just want to find a place to live where I can work and live with no smoke. Ash falling from the sky today. And tomorrow. And it’s only May.
——–
Agree.
Time to start a class action suite against the Alberta government.
The mood at the FBI right now.
https://youtu.be/0qanF-91aJo
Let’s break it down to a simple equation
5% foreign buyers paying high prices
plus
95% locals swapping houses at ever increasing amounts
plus
moisters getting on the bandwagon
equals
highest debt load in Canadian history.
Hmmm. Mr. T is right. we did this to ourselves.
Welcome to the other “Stress Test”: https://www.canada.ca/en/revenue-agency/news/2019/05/the-government-of-canada-identifies-more-than-a-billion-dollars-in-additional-taxes-in-british-columbia-and-ontario-real-estate-markets-over-the-la.html
Meanwhile many Government Bond Yields are declining:
Australia 10 Year Government Bond Yield decreased to an all-time low of 1.49%
New Zealand 10 Year Government Bond Yield decreased to an all-time low of 1.75%
Spain 10 Year Government Bond Yield decreased to an all-time low of 0.743%
Greece 10 Year Government Bond Yield decreased to an all-time low of 3.049%
Portugal 10 Year Government Bond Yield decreased to an all-time low of 0.868%
Canada 10 Year Government Bond Yield decreased to a 9-week low of 1.552%
Germany 10 Year Government Bond Yield decreased to a 34-month low of -0.176%
Australian new home sales plunged 11.8 percent month-over-month in April 2019, after a 0.1 percent fall in the previous month. It was the largest fall in new home sales since 2005.
https://www.vancourier.com/real-estate/one-in-five-proposed-vancouver-housing-units-has-been-shelved-report-1.23830252
An excellent analysis of the US-China resolution five or six weeks away.
https://www.scmp.com/comment/insight-opinion/article/3012166/cracking-trade-war-code-why-china-and-us-may-quietly-reach
“Think of how stupid the average person is, and then realize that half of them are stupider than that”. – George Carlin RIP.
Garth, I really appreciate all the effort you have put in to trying to educate the populace. But I now realize it can’t be done. There are very smart people at banks louring the dumb into mortgages and HELOCS they can’t afford, also aware that the government will do what they can to bail the dumb out. It is a sad, sad thing I must say, but you’ve only helped the 10%. The 90% doesn’t read your blog, and if they did they wouldn’t understand what it is that you are getting at. I think this is why you went into wealth management. Most clients are at least in the 10%.
You can’t fix stupid. Weight loss, sure. Fitness sure. But stupid? No. There is no fix for stupid. And strangely studies show that the stupid are not surprisingly the least aware that they are stupid. It turns out that if you don’t have any self doubt, you are probably stupid. The smart know something about what they do not know, the stupid think they know everything. They can go into the Tyrell museum and totally rewrite the fossil record. They are stupid. But yet they can vote.
The smart will as they always have try as much as possible to stay out of stupid’s way.
#75 Shawn Allen
Canada GDP = $1.820 trillion (nominal)
Retail Trade Sales (2018) = $606 Billion
Engage brain before mouth.
#76 Shawn Allen
Read epitaph from my prior post.
Serious question – What was so different about Vancouver if it was just regular citizens pumping up the house prices?
I know it happened everywhere across Canada – but why so much more in Vancouver? Anyone know? What is different there? Any hypotheses?
Local insanity. Toronto = Raptors. Vancouver = house lust. – Garth
#28 yorkville renter on 05.30.19 at 5:49 pm
the thing about calculating the “income to buy” narrative is that people making $240k+ arent looking to buy an ‘average’ house… they work hard to live among their equals
—————————————————————-
This. When only 1%ers can afford the average house, the market is broken.
#98 Gordonski
Do you think the final deal with China will somehow include NoKo? Imo, the denuking and reconstruction of NoKo would be incredibly enriching for all the partners, and the world in general.
#18 Kilt on 05.30.19 at 5:12 pm
As for the NDP.
Strange though how you start to correct these “problems” and then house prices start to come crashing down to earth.
– Stranger still that they’re crashing down everywhere, including places that are not B.C.; those NDP are GOOD!
#91 Bob Dog on 05.31.19 at 12:27 am
Just stop wasting my tax dollars on an expensive useless military.
“Police and Soldiers all alike adore;
E’en in times of danger – not before…”
Useless military? Canada’s military was almost non-existent before both world wars; we ended WW2 with the world’s 3rd largest navy, but I suppose it helps that a lot of nations’ bigger navies had been sunk. We helped with that. And in both world wars, the location of the Canadian Corps was kept confidential; Canadians make superior cannon-fodder, and proved very good at spearheading attacks – as an example, we took Monte Cassino after everybody else had tried and failed.
After Hitler declared war on the U.S. following Pearl Harbor, Doenitz turned his subs loose on the U.S. east coast where they had a field day; they even called it “the second happy time”. I guess Doenitz wanted to be fair, he also sent U-boats against the Canadian east coast; they accomplished almost nothing and were so relentlessly harassed by the RCN and RCAF that they were all diverted south into U.S. waters where the pickings were much better.
So, “expensive useless military” – disease, or symptom? Canada spends half our NATO commitment, 1% vice the 2% we signed-up for, on our military – sadly, like most of the rest of NATO – while we happily shelter under the U.S. nuclear umbrella. Trump has been banging that drum the whole time he’s been president. You want to see him also hammer Canada with tariffs, and REALLY smack-down our trade with the U.S.? Sure – let’s abolish the military. It’s an election year after all, and the government really could use the money to buy votes.
Our military always turns-up when needed, and we do pretty well in international efforts – and military exercises and competitions; and if the used food hits the rotary cooling device (you know, China, Korea, Russia, the Middle East, Sudan, etc etc), we’ll have a solid, competent body of expertise that will be very useful to train the next generation of Canadian cannon fodder.
In sum, how dare you whine about ‘useless military’ while we’re still funding CMHC, the Human Rights Tribunal and the CBC? What else would you rather the government spend the money on? – because they sure-as-fr1g won’t give that money back to us!
/rant
#66 Deplorable Dude on 05.30.19 at 9:07 pm
#64 That’s all she wrote….”Waiting for Garth to tell us that Trump is slapping new tariffs on Mexico in preparation for the inevitable deal with China…”
—————————
Close…….
Tump just made Mexico pay for the wall…..lol….
—————————————————————-
Perhaps take a minute to stop worshiping Trump and have a little think about how that works. US consumers and businesses pay the tariff. Due to the lead time to source new suppliers, it’s unlikely Mexico sees any real impact from this for a while.
I remember a time when ignorance was something to be eliminated. Today, people like you are proud of yours. You truly are deplorable.
More big sales on stocks, ETFs today
Thinking 2500 or lower sp
Before it’s done.
Bottom hunting is fun.
#84 SoggyShorts on 05.30.19 at 11:12 pm
#66 Deplorable Dude on 05.30.19 at 9:07 pm
#64 That’s all she wrote….
Close…….
Tump just made Mexico pay for the wall…..lol….
***********************
You know that Mexico doesn’t pay those tariffs, right?
The BUYER pays the tariffs, so he actually just made Americans pay for it.
https://www.politico.com/newsletters/morning-money/2018/09/18/trump-makes-no-sense-on-tariffs-344232
—————————————-
Soggy, it won’t work, the epically stoopud on here who view raw balance of trade figures only as +/- score sheets and import tariffs as screwing the other guy have their red hats on too tight and are so far down this economic BS rabbit hole they ain’t coming back….
@#96 Sabonis
“Meanwhile many Government Bond Yields are declining:
******
Yep.
Govt’s world wide are stuck with interest rates at their lowest points ever …..with nowhere to go ….economies slowing….can lower the rate below zero but will that desperate tactic goose the economy?
If Japan’s experiments with zero rates and then their economic “decades of doldrums”… dont foster a lot of confidence in economists and their theoretical dabbling.
Worldwide deflation?
Or a world war to get people’s attention elsewhere.
South China Sea sabre rattling getting louder…..
https://www.reuters.com/article/us-asia-security-usa-china/chinese-militarization-of-south-china-sea-excessive-acting-pentagon-chief-idUSKCN1T118C
Which begs the question.
If we go to war with China will they bomb their vacant investments in Vancouver?
https://www.reuters.com/article/us-china-canada/china-hopes-canada-understands-consequences-of-siding-with-u-s-idUSKCN1T1122
So yesterday a moister in Van told us why he and his squeeze bought a condo. On cue the crustaceans and paleos in the steerage section trashed them. – Garth
——————————————————————–
Hey, what can I say, it’s what we do.
You’re welcome!
@#107 Bdwy Sktn
“Bottom hunting is fun….”
*****
Is that what we’re calling bottom feeding these days?
#104 Evangeline on 05.31.19 at 7:49 am
#98 Gordonski
Do you think the final deal with China will somehow include NoKo? Imo, the denuking and reconstruction of NoKo would be incredibly enriching for all the partners, and the world in general.
——————————————-
An actual deal with the Norks as partners with the current crowd? Before reconstruction, there would need to be serious restructuring and tying a stable NK to a China trade deal seems like an excellent way not to have a China trade deal anytime soon…
https://globalnews.ca/news/5337769/north-korea-executes-envoy-to-u-s-mike-pompeo/
I think people here and in Canada, have this weird tinted rose glasses when it comes owning a house. Most people here think the renting is throwing money away. It’s a weird mentality, especially since most canadians are immigrants too, it doesn’t help that culturally owning land and owning a house is status of wealth.
Garth I could not find the RateSupermarket report online.
Curious if it mentioned Halifax in it…Probably falls at the bottom of the list but would still like to know the household income required to own a house in that market.
#107 Bdwy sktn on 05.31.19 at 8:10 am
More big sales on stocks, ETFs today
Thinking 2500 or lower sp
Before it’s done.
Bottom hunting is fun.
++++++++++++++++++++++
You think this will be a bottom????
Re: #107 Bdwy sktn on 05.31.19 at 8:10 am
It’s whatever they set the criminal machines to for any given day that dictates what the major indexes will be or close at. Nothing else matters. When selling abates naturally the markets adjust to what they set the machines at.
GDP and retail sales
#100 Dolce Vita on 05.31.19 at 6:29 am said:
at 56 that retail trade is 35% of GDP and said
#75 Shawn Allen
Canada GDP = $1.820 trillion (nominal)
Retail Trade Sales (2018) = $606 Billion
Engage brain before mouth.
**********************
I tied to point out that this is an apples to oranges comparison.
Retail sales are not anything close to 100% additive to GDP. It is only the value add from retail sales that goes into GDP. Retail trade as an industry contributes is a bit over 5% of GDP.
Latest figures 2018 GDP in “2012 chained dollars” 1,939 billion. Retail trade contributed $100.3 billion. = 5.2%.
https://www150.statcan.gc.ca/t1/tbl1/en/tv.action?pid=3610043403
I was simply trying to correct what appeared to be huge error as regards to the importance of retail trade to GDP.
#98 The Great Gordonski on 05.31.19 at 4:09 am
An excellent analysis of the US-China resolution five or six weeks away.
https://www.scmp.com/comment/insight-opinion/article/3012166/cracking-trade-war-code-why-china-and-us-may-quietly-reach
………………………………………………………………..
Ya sure we trust the Chinese, pfffft
They are already telling us lies.
https://www.msn.com/en-ca/news/world/china-tells-canada-of-consequences-of-helping-us/ar-AACc4d5?li=AAggNb9
#15 Mattl on 05.30.19 at 4:28 pm
___
^Overall a pretty fair synopsis. I tend to also think the locals got fired up initially when they saw what the Chinese would pay for a mcmansion. From there on in though, it was all locals, FOMO, crazy stories, and mass stupidity.
IMHO, prices were fueled by local move up buyers who got a free ride up the equity ladder. There were probably a couple million homes already owned in the gvrd before the prices got stupid, and every one of those owners got a ~million+ head start buying another place. That’s plenty enough to fuel a boom and to leave just about every first time buyer in the dust.
Ms. IH and I are fixing up our place, local sales this spring indicate we’d get about 500K when the work is done. So even we could move into a million dollar house too, mortgage would be 2,300.00/mo. An awful lot of folks selling just about any home that is half decent, and is willing to stretch a little could.
THAT’s were all the money came from to kick things off in Vancouver. Take a million or two paper millionaires, give them sub 3% interest rates, cash access to 65% of their home equity via HELOC, and then inject them with euphoria, greed, fear, and lust.
Could have easily been worse than it was.
Tater
It was better when products and jobs were staying in US and Canada with higher labour costs, prices.
This way the local, regional economies were thriving more than now. Also, this meant higher interest rates for savers, investors that were responsible with their money.
Now, it is ridiculous, interest rates are so manipulated with 1.39%, 1.5%, 1.76% Canada 5,10, 30 years bonds and GIC rates at most 3%. This global system rots from the head.
#43 Dave
Your source/link?
#90 Lost… but not Leased
Yet Canadian Cannabis companies are valued at astronomical amounts compared to the US companies, look at the Sunniva plant in Okanagan Falls, ground tore up and that is it. Now the owners want to sell the dug up pile of dirt that was purchased for seven million for 20 million. You would have to be using their product to think that it is a good deal.
#53 SoggyShorts
Perfect analogy, now the bartender is selling the beer for $15 a glass, soon to be $10 a glass and no takers, yet at $30 a glass the bar was being rushed with everyone throwing their cash down. Now there is just remorseful, hungover and broke patrons complaining about how the rich guys screwed them out of their beer money. Watch as the bartender lowers the price to $2-$3 a glass and they will say that you would have to be an idiot to buy beer that cheap. I have seen this show three times now and will definetly see it again and it gets better every time.
#89 Smoking Man on 05.31.19 at 12:13 am
To all the good wives out there, I got a good one. She knows how to cook. She was most epic best bet ever.
She now trades forex. I’ll post her p&l on my blog soon as I remember the password.
https://youtu.be/NGorjBVag0I
_________________________________________
Is this the same wife you referred to as the “Hag”?
Does she cook mashed potatoes for you old toothless wonder?
#105 Evang re: Crazy Rocket Finger, wishful thinking though unlikely. China keeps NoKo alive as it’s proxy to shake a fist at us without having the balls to do it themselves.
As bad as that is my immediate concern is Chinese smuggling oftens of thousands of starving North Korean women and children into sex and porn abuse for it’s citizens as if they’re disposable. The death toll is horrendous.
Is Blackstone cashing in or cashing out, the reporter isn’t sure whether to duck or blow on this one.
https://www.fool.com/investing/2019/05/30/blackstone-looks-to-cash-in-this-massive-recession.aspx
Remember the blowout jobs numbers from last month. Roaring economy right, everyone working and spending. Not so much.
https://www.cbc.ca/news/business/canada-economy-gdp-1.5157146
#106 Tater on 05.31.19 at 8:10 am
“[…] I remember a time when ignorance was something to be eliminated[…].” Sorry, no, those days are long gone. An excellent book explaining what’s happening these days is Michiko Kakutani’s The Death of Truth: Notes on Falsehood in the Age of Trump (New York: Penguin Random House LLC, 2018). Get used to it! :(
Well, at least we know why Stan’s been so quiet lately,he was busy giving an interview: http://www.thecut.com/2019/05/incel-plastic-surgery.html#_ga=2.196075438.365249928.1559315479-1159062867.1559315479
And maybe a topic for future discussion is the countrys own HELOC and its abuse. Your 4th yr of a liberal govt will be the highest spending one yet and we are now $100B further in debt because of it and nothing to show for it. Debt carved off the slowing economy and spent into thin air.
“Finance Minister Bill Morneau’s March budget said the deficit for 2019-20 fiscal year will be $19.8-billion and it did not include a target for eliminating the deficit. The Liberal Party had campaigned in 2015 on a pledge to run short term deficits and to balance the books by 2019-20.”
#65 Blutterfy on 05.30.19 at 8:51 pm
At this point, as of today, I just want to find a place to live where I can work and live with no smoke. Ash falling from the sky today. And tomorrow. And it’s only May.
—————————————————————–
You might want to consider Iqaluit.
DELETED
Must be an election year.
Stats Canada last month reported the creation of 100k jobs.
Yet first quarter GDP growth was nothing. One of these stats are wrong.
https://tradingeconomics.com/canada/gdp-growth
Invest accordingly.
#50 Re: Bonhomme on 05.30.19 at 7:49 pm
You think those numbers are wild.
Kelowna population is 132,084 and a house cost averages 740k for a house.
Person-per-person that is wow! Most expensive real estate anywhere. Must be the smoke tax or something.
Compare that to a University town like London Ontario where the population is 383,000. House price 420Kish?
Yeah, I am sure it is the healthy jobs market in BC pumping that. Hockey bag manufacturing and all bags alike to carry money is in high gear.
—————————————————————
You Kelowna doomers lol…
Median SFH is 635K
All homes, 530K
What is with you Kelowna guys? I get it, you guys want cheaper homes. And I feel bad that you were asleep from 2008-2015 when home SFH’s were in the mid 5’s, and flat forever. But enough with the BS – is the idea that if you post enough in the comments it will move the markets?
Here’s the thing, no one retires in London. No one goes to London for Wakeboard festivals, or to ski the local hills. Hockey players aren’t building 10MM properties on the lake – oh wait there isn’t a lake.
There is nothing wrong with London, or Regina, or any other city with cheap RE but let’s be real – these places aren’t all equal.
And the good news is, you can move to Brandon MB, and since vacancy’s are less then 1% in Kelowna, there will be 30 people ready to take your rental. Never understood complaining about how terrible your hometown is, get your ass moving to Yorkton, Sask and grab some cheap RE. You are going to LOVE it there, I just know it.
#120 Tamara Jones on 05.31.19 at 10:55 am
Tater
It was better when products and jobs were staying in US and Canada with higher labour costs, prices.
This way the local, regional economies were thriving more than now. Also, this meant higher interest rates for savers, investors that were responsible with their money.
Now, it is ridiculous, interest rates are so manipulated with 1.39%, 1.5%, 1.76% Canada 5,10, 30 years bonds and GIC rates at most 3%. This global system rots from the head.
————————————————————-
Well, it seems we all voted (with our consumption habits) and prefer this version of the world. I will point out that you have the option of buying Canadian made products if you choose. I’m wearing a pair of jeans now that are made in Canada from Japanese denim. They cost about 4x what the Levi’s I wear for yard work cost.
Most aren’t interested in spending the extra money. Most prefer to have more “stuff”. Ever notice how small closets are in 100 year old houses vs today? That’s because people owned far less clothing, because it was much more expensive.
#38 Nonplused on 05.29.19 at 9:07 pm
The salvation for Pablo, seeing as he has already made the catastrophic mistake of buying a condo, is that as his condo falls in price so will the properties with “dirt” that he should have bought. Probably by more.
It’s more fun with statistics but if we can assume that the market is ergodic (a new fun word I learned that means the same in a small sample as on the whole or sort of like that) then a 10% fall in YVR would mean that say this $700,000 condo will shed $70,000, but a $1,400,000 house with dirt will shed $140,000. So Pablo will still be ahead, but only half as much as he could have been.
Anyway I am opposed to buying apartments unless you own the whole building and you are the landlord. If it looks like a hotel, you should rent it or own the whole thing (perhaps with partners) and rent it out. There are far too many problems that can come from joint ownership of something with a bunch of people you don’t know anything about. And remember that half those people are below average IQ, in a condo probably more because I doubt the IQ distribution is ergodic when it comes to condo owners. They won’t make good decisions. If the roof needs repair, they may vote against it because they don’t have the money. They may grow pot in their suite and inadvertently flood your unit. They may be running a brothel. Who knows what they are up to. Whatever it is, it probably isn’t something you’d let your teenager do in their room.
Never buy a property that isn’t surrounded on all 4 sides by a fence or at least a well defined property line, unless you own the whole thing and plan to rent it out.
But there is more good news for Pablo, the real estate market is not ergodic. Expensive properties rise in price more than cheap ones in a boom, and they fall further in a bust too. So a 10% overall reduction in house prices in YVR might mean the sought after houses with “dirt” might decline 20% while condos might hardly go down much at all. Premium properties only carry a premium when somebody has the money to pay that premium. High end restaurants go out of business all the time, but McDonald’s never will.
…………………………………………………………………
I totally agree that unless you are the owner of an entire condo building never buy anything unless you have a fence on four sides or conversely where you are surrounded on four sides immediately with other cohabitants. Been there and done that, floods, pot, smelly food, noise, sketchy renters beside you, strata fees that never, never, never go down. Garths comments “Condo owners have zero control over escalating strata fees or special assessments. Property taxes are destined to rise with the carbon levy.” Is one of the best soundbites of what is to come. Every condo corp will have to deal with all of these legislative tax grabs and pass them on to the unwitting owner. It will be the older generations such as the Boomers that will take the hit as they are all downsizing to what they believe will be the easy life. They will be on fixed incomes and have to decide between cat food and paying for special assessments down the road. Good luck to all of you who believe a condo is an easy way of living. Unless you’ve been there before you have no idea how bad of a move it is. Just saying condos are the worst place to live!
I have been one of the lucky boomers riding the housing boom.
But I was reading today and never once in my life did I consider all the points raised today.
What’s your income, long term what’s your pension?
Lost opportunity cost of money invested. What’s that?
To be honest my first house was $89,000 with 8,000 down. What was the lost opportunity cost?
Today $300,000 down is a big opportunity cost.
I am sure my house has dropped since I bought.
It’s hard but I look at it this way
Bought a condo in Vancouver three years ago for $420,000
Sold last November for 683,000, bought a house in Nanaimo for $620,000, my agent says it’s now worth $650,000 I figure maybe $580,000
But so long as it does not drop to $420,000 I am still good, plus I have a lovely home now.
But here’s the kicker I never once thought of the lost opportunity cost of investing the 683,000 and renting.
I did raise the issue of moving to the cheapest part of Canada, but Newfoundland was not in the cards. Besides it’s cold and snow.
So interesting post, makes me think, but it’s to late for me, but maybe not for others. Read and invest, remember the rule of compounding.
I understand Tamara Jones post as we are all now paying high cost for gas, home heating, insurance, property taxes, food, utilities, necessities for cost of living like housing, rent, mortgage payments etc. and of the big one too, high taxes.
However, we are all getting peanuts with interest savings rates and even dividend savings rates because they are tied or follow each other. Bond rates fall so do every interest, dividend rate falls too.
The savings from some jeans or washing machines, computers, clothes, T.V.’s etc. is nothing compared to the lost of income from from long decades lower wages, benefits, lower GIC, bond, savings account interest rates, dividend paying investments common stocks, preferred stocks etc. dividend rates. Don’t forget we got fooled by the lower interest rates savings game they all promised, economists, analysts, politicians etc. is more then wiped up because now 25 years later with each houses, condos etc. costing $400,000 to $800,000 more.
The interest savings from lower mortgage rates is way gone and is now uploaded, meaning upfront with high house, condo inflated prices, interest, condo fees, other fees, CHMC insurance, development costs etc.
The bottom line is most of us are all worse off, deeper in debt most in history, much higher cost of living, high taxes more coming it is relentless and little to no savings for most Canadians. Those that have savings, investments are getting short changed everyday. Yeah, you can save a few hundred dollars on a Iphone today but now tariffs are the real problem here. Come on this is nothing close to being laughable.
The parties each have received their UN marching orders. Deindustrialize Kanada and give us “Income Equality” to 2nd world nations.
Anyone buying a house will sink.
https://www.google.com/amp/s/www.thestar.com/amp/politics/federal/2019/05/31/ndp-set-to-unveil-15-billion-climate-plan-that-would-slash-greenhouse-gas-emissions.html
The number one reason for buying is you then have more control over your home. You won’t get kicked out if the owners decide to sell, you can renovate to make it suit your needs, you can own whatever pet you want, etc. That, and you are more likely to get exactly what you want when buying, less likely for renting. But this ownership does come at a cost compared to renting. If you’re lucky then the appreciation of the house will offset this, but as Garth has gone into at great length, this is not what you should be relying upon in the current market.
Renting on the other hand allows you a lot of flexibility and mobility. You can move on relatively short notice if you change jobs, want to upgrade or downgrade, or just want to travel the globe.
In general I’d say the cross over point is if you’re fairly certain you’ll be staying put for 5 plus years then ownership becomes viable. Or in other general terms, young people should be renting to maintain maximum flexibility in their lifestyle and older people who are in the “settling down” phase it starts to make sense to buy.
@ #99 Nonplused
You can’t fix stupid. Weight loss, sure. Fitness sure. But stupid? No. There is no fix for stupid.
Actually, that’s not entirely accurate. At the risk of reducing complex arguments to simple phrasing, I’ll go out on a limb and say: The fix for stupid is READING. See here .
On the other hand, the rest of your comment is a pretty concise description of the Dunning-Kruger effect (which some folks here might want to look up).
studies show that the stupid are not surprisingly the least aware that they are stupid. It turns out that if you don’t have any self doubt, you are probably stupid. The smart know something about what they do not know, the stupid think they know everything.
Nice to see signs of intelligent life, and intellectual humility, mixed in with the rest of the steerage (and Bilgewater) here on the SS Turner. Cheers.
#79 DON on 05.30.19 at 9:57 pm
#20 yvrguy on 05.30.19 at 5:22 pm
…..Western Investor is the trusted source for commercial real estate, franchising and business opportunities in Western Canada. Industry professionals and private investors from across BC, Alberta, Saskatchewan and Manitoba have been relying on Western Investor for all the latest news and the most comprehensive listings for over 30 years.
—
Who are you going to quote next? BCREA?
Give it up, Garth.
The article appeared in the Van Courier. It was reprinted in the publishing company’s other assets. “The Vancouver Courier is a Canadian semiweekly local newspaper published in Vancouver, British Columbia, by the Van-Net chain owned by Glacier Media Group. Currently, it is Canada’s largest distributed community newspaper, with a weekly distribution of 265,000.” Now, be a useful boy and talk about the content. – Garth
***************************
Recently, it came out (via Katie Telford – SNC fiasco) that a possible strategy to change public opinion would be to place editorials in ‘supportive’ newspapers. You have to check the source. This local paper chain is stacked with real estate ads. There was a time when more 2/3rds of the paper consisted of house listings/sold advertisements. They survive on real estate revenues. Great fire starter though and most likely not the type of papers that would exist under your leadership.
Today in BC we have partisan investigative journalists trying to divert attention from several investigations with respect to the BC Legislative and the former governing party. The former clerk recently ‘retired’ as misconduct was found. Today’s desperate attempt is being orchestrated to get in the way of the current investigations. The logic is mind boggling, a cornered political animal scenario in play. Resorting to TRUMPO tactics.
Balance and diversified research is also required.
You can’t make this sh$t up.
Hey what’s up with one of Jason Kenny’s UCP MLAs? anyone see that bit of news!
************************************
Fake news = what you disagree with. – Garth
***********************
I get what you are saying and expected a response.
For an un-objective style of thinking yes fake news = disagree. But for an open style (scientific method) thinking, variables are scrutinized and additional information is sought to get an idea of what is really going on.
Every variable is playing into this housing/political/economic fiasco and will end up shaping the outcome. We have instances of fraud, FOMO, etc. All played a part in this current state.
One thing I have noticed through reading about the gang executions – gang members has nice stuff and live in nice neighbourhoods. Some live is really really nice places.
All of a sudden in BC we are being bombarded with ‘use a realtor’ commercials or ‘realtors against money laundering’ editorials. Time to re-brand and get with the meme?
It is time for critical thinking guided by the knowledge of how the everything really operates. Time to look under the hood to ensure everything is working as expected. Some things are broken and we are witnessing the the results. Time to re calibrate our current state.
#134 Good advice on 05.31.19 at 1:06 pm
It’s never too late… but if you are happy, Nanaimo is central and you can take day trips to smaller communities in any direction and still be close to Vancouver.
Check out the local house prices to local incomes. Retirement is the main industry on the island at the moment.
Mississauga is Canada’s 6th largest city.. yet it never figures in any of such surveys.. wonder why…
Tater
What about all the taxes, fees, picking our pocket from municipal, provincial, federal governments and their agencies?
This is the real concern that hits us everyday. Tariffs are such a non issue over the life of a person and his family.
money laundering
“International corruption and the tools governments need to fight it were hot topics at the annual Open Government Partnership Summit this week. Representatives and stakeholders from more than 79 countries gathered in Ottawa to explore how governments can improve transparency and democracy. In many countries, especially Canada, criminals can easily hide behind anonymous companies. But a public registry that lists the real owners of those companies would go a long way in deterring illicit activity, according to experts at a panel hosted by Canadians for Tax Fairness, Transparency International Canada, and Publish What You Pay Canada.
Countries around the world are dealing with an infectious and escalating problem. Law enforcement officials in the US last week urged the Senate to shine a light on corruption with a public registry.
The summit comes at an especially critical time for Canada, which is facing a money laundering problem that is “far bigger than we think”, says Kevin Comeau in this week’s Financial Post op-ed.
BC has taken a big step with plans to create the first public registry in Canada. Pressure is building on other provinces and the federal government to do the same.
============
…”When the panel asked FINTRAC for its collected suspicious-transaction reports on a country-by country and province-by-province basis, FINTRAC admitted it was unable to do either. Since the model’s first use in 2005, Canada is the only country whose intelligence agency for money laundering lacked such capability.”
https://www.cdhowe.org/expert-op-eds/why-canadas-money-laundering-problem-far-bigger-we-think-financial-post-op-ed
#130 Smoking Man on 05.31.19 at 12:06 pm
Must be an election year.
Stats Canada last month reported the creation of 100k jobs.
Yet first quarter GDP growth was nothing. One of these stats are wrong.
https://tradingeconomics.com/canada/gdp-growth
Invest accordingly.
___________________________________________
First of all it is an election year here Old Man try to keep up with us. So thanks for the good investment advice coming from a lunatic fringe expat living in Socal. “Invest accordingly” is getting old like you! Why do you care about Canadian investors? You have no skin in the game here. Smart people follow rules such as Garths rule of 90 and in having a diversified portfolio. Have a 60/40 balance between growth and fixed income some in exchange traded funds or ETFs. Broaden your spectrum Old Man its not all in investing in the Orange Mans Emerald City. Besides you never know whats behind that curtain.
Re: #134 Good advice on 05.31.19 at 1:06 pm
The first thing when you consider a move is income tax rates. Newfoundland is one of the most expensive in Canada if you have a large income.
speaking of blaming others :
“After the entire world watched as he tried to lay the groundwork for installing a Hungary-esque media landscape in his country with Russian help, he complained in his Saturday press conference of a campaign “from abroad.”
In an attempt to completely distort the situation, he expressed outrage about the hidden cameras that filmed him — without addressing the obvious: That the video would have been of no interest at all if he hadn’t spoken so clearly about his plans for reshaping Austria. The only source for the ignominy is he, himself. He built the boat, and he sank in it.
And yet, his entire statement of resignation was an attempt to share responsibility and assign blame to others.”
https://www.spiegel.de/international/europe/austria-strache-defense-lays-bare-the-right-wing-ideology-opinion-a-1268329.html
Dollar Tree adding alcohol to 1,000 struggling Family Dollar stores
Nathan Bomey, USA TODAY Published 8:43 a.m. ET May 30, 2019 | Updated 9:53 a.m. ET May 30, 2019
#146 jess on 05.31.19 at 3:39 pm
speaking of blaming others :
—
This is an interesting story. The Austrian politician was set up to meet at the party in Ibiza, by the introduction of a lawyer, with a sexy “daughter of a Russian oligarch” in Ibiza, who “wanted to invest in Austria”.
There are hours of recordings, the guy is drunk. This was taking place 2-3 years ago, when I believe he was not even elected to his current office, the video strategically surfaced a few days before the EU elections. An organization supposedly bought the video for 600K euro. The fake daughter was paid with golden coins from South Africa.
The entire story is very similar how the Trump campaign was targeted, using a variety of international actors to fall for a Russian collusion trap, except Trump didn’t take the bait.