Friday Free-for-all! May 26th 2016

It’s the end of another work week and you know what that means…

It’s Friday free-for-all time here at VCI. This is our regular end of the week news round up and open topic discussion thread for the weekend. Here are a few recent links to kick off the chat:

Housing market concerns at BOC
Broker Economist on concerns
Vancouver ‘freakshow’ market
Peterborough up 24% YOY
Save for 23 years
4 out of 10 caught short on money
lack of compliance on money laundering
high cost of ultra-low rates

So what are you seeing out there? Post your news links, thoughts and anecdotes here and have an excellent weekend!

18-34 year olds more likely to live with mom and dad

It used to be that most parents would provide their kids with food and shelter until they left high school. Some would stick around home while attending higher education, but most would move out on their own and start taking responsibility for themselves.

Then a funny thing happened in the economy.  Stuff changed. Incomes declined while the cost of living went up.

For the first time in modern history 18-34 year olds in the US are more likely living with their parents than on their own, with roommates or with a romantic partner.

A big reason is a decline in economic opportunities. As the cost of living has escalated and wages have stagnated, young people face mounting student debt and daunting barriers to renting or owning a home, creating obstacles to cohabitation and marriage.

The trend is led by young men, whose fortunes have been declining since the 1960s. While they have always lived with their parents in greater numbers than young women, this setup became the dominant living arrangement for them in 2009. In 2014 35 percent of young men lived with parents, while only 28 percent lived with a spouse or partner (for young women, the percentages are flipped: 29 and 35, respectively).

read the full article here.

Friday Free-for-all! May 20th 2016

Oh yeah! It’s the end of another week and that means it’s time for another Friday Free-for-all.

This is our regular end of the week news round up and open topic discussion thread for the weekend, here are a few recent links to kick off the chat:

Gov terrified of popping bubble
CREA: Market ‘topped out’
We don’t need no education
How to pop the bubble before its too late
BC Real estate watchdog leaving
continued acceleration
Anyone want to sell under market?

So what are you seeing out there? Post your news links, thoughts and anecdotes here and have an excellent weekend!

Vancouver market now a national problem

Most people in Canada don’t care about the Vancouver housing market, but that doesn’t mean they would be unaffected by a bursting housing bubble here.

Canadian Business argues that what we need is a national regulator to deal with risks in the financial system:

In 2013, the International Monetary Fund called on Canada to create a federal entity with a clear mandate to monitor threats to the financial system. The IMF earlier this month scolded Ottawa for so far ignoring its advice.

The Vancouver house-price surge is exactly the sort of thing the independent agency should handle. It is a national issue: everyone knows who will be called on to clean up the mess if it bursts. The banks would feel it and likely would curb lending. CMHC would feel it because it has insured most of the mortgages Vancouverites have used to buy their inflated assets.

Unfortunately as a politician anything you could do about the housing market would most likely be political suicide. Owners are voters and nobody wants to see the value of their home drop.  Read the full article here.

Burnaby Breakfast on Housing Affordability for 1st time buyers

A while back NDP MLA David Eby held an ‘emergency meeting‘ on the Vancouver housing crisis.  (Presumably called a ‘crisis’ because the 25-44 age group is leaving Vancouver faster than they are arriving.)

But you should not be under the impression that the BC Liberals are sitting back and doing nothing about the housing situation here.

Not only have they announced new real estate rules to address many of your concerns, the minister responsible for housing will be attending a Burnaby North Breakfast on Friday May 20th about housing affordability for young first time buyers.

Tickets are only $20 and all proceeds go to support the Burnaby North Riding Association. If you are unable to make it, there is a convenient link to make a direct donation on the bottom of that page and there’s nothing that says donations are limited to developers only.

Vancouver real estate a ‘currency exchange ponzi scheme’?

Polozi Scheme posted this link to a post at Ross McKay real estate consultants with the theory that the Vancouver real estate is a ‘currency exchange ponzi scheme’.

A investor seeking to remove Chinese Yuan from China and have it converted into a foreign currency purchases a home in Vancouver. The investor once having the currency exchange authorized and completed for the purchase to take place then offers the same opportunity to another investor who is willing to offset any costs the original investor incurred through paying a high enough price for the same home that then allows the previous investor to “break-even”. This pattern is continued over and over again causing the selling price to raise higher and higher at no risk to the investor, while at the same time offering higher and higher amounts of currency to be exchanged on the rising home price being paid.

At no time is the price paid reflective of fundamental value of the real estate being traded but is being established for ulterior purposes that are not related to normal house price growth.
At some point in time the scheme ends as the last investor is converting so much currency that the benefits exceed even the need to “break even” and the home can be sold at a net loss. When that moment is reached the appearance of sustained house price growth ends and the scheme ends moving the scheme somewhere else.

Read the full posting here.

Friday Free-for-all! May 13th, 2016

Lucky you!

It’s Friday the 13th and that means it’s time for another Friday free-for-all, or regular end of the week news round up and open topic discussion thread.

Here are a few recent links to kick off the chat

Normal interest rates are history
Canadian rates to rise?
Why does this government hate free money?
Negative discretionary income
Vancouver, stay or go?
Freak show housing market
One heck of a student loan
Loonie sinks

So what are you seeing out there? Post your news links, thoughts and anecdotes here and have an excellent weekend!

BC announces new real estate rules

The BC government has announced new rules that require purchasers to reveal citizenship details:

The new requirements, aimed at answering whether foreign ownership is driving up housing prices, go beyond the data that are supposed to be collected for Canada’s anti-money-laundering agency whenever someone is involved in a real estate transaction. Records show there is significant non-compliance among Vancouver-area real estate firms, which are required to collect the information for the Financial Transactions and Reports Analysis Centre (FinTRAC).

B.C. Finance Minister Mike de Jong said he is confident provincial auditors will be more successful. “The objective here is to get beyond the theory, get beyond the conjecture and the speculation and actually have hard data,” he told reporters on Tuesday.

They also announced new requirements to deal with bare trusts:

The new disclosure rules will also create new data on the use of bare trusts, after an investigative report in The Globe showed how such trusts may be used to transfer property ownership without paying the property transfer tax. Mr. de Jong said the data, which must be provided on the new property transfer tax return form, will be shared with Revenue Canada.

Such data are supposed to be collected under Canadian law, but a federal audit of paperwork in Vancouver realty offices found many instances where required filings were significantly lacking.

And of course the dreaded ‘shadow flipping‘:

The new regulation – which applies only to licensed realtors – will not ban contract assignment but seeks to ensure that the seller consents to such an arrangement and is the one who profits if the property is resold before the deal is closed.

So presumably the best way to continue shadow flipping is to avoid being a licensed realtor. Read the full article over at the Globe and Mail.

Government complicit in fueling housing crisis

A recent report out of SFUs school of public policy is generating headlines that are rather extreme:

Foreign buyers crushing Vancouver home dreams as governments do little.

“People recognize what’s going on, and they’re willing to call a spade a spade,” he said, stressing that such views are based on reality, not racism.

His report compiles a number of other studies, including data on home-buying trends, population density, the cancelled immigrant investor program, and American research on the same issue.

Gordon said his report blames Vancouver’s housing crisis on foreign buyers, particularly from China, because “this is where the evidence points, not because of some anti-Chinese animus.”

Chinese investors have also spiked home prices in the Toronto region, but Vancouver has seen the highest rise in real estate due to the influx of foreign money reaching an unprecedented level in the last year, he said.

Gordon noted that other countries, including Australia and Singapore, have created policies for foreign homebuyers to protect their own citizens but that hasn’t happened in Canada.

Read the full article over at the CBC.

Friday free-for-all!

This is the day!

Time for our traditional Friday free-for-all post where we round up recent news and have our open topic discussion thread for the weekend.

Here are a few recent links to kick off the chat:

If I can do it, you can do it
Casino crackdown
Another Hollywood hater
Vancouver stressful for millennials
Why own and be in debt?
All in for RE
Cariboo deals with Vancouver invaders
Affordability crisis

So what are you seeing out there?  Post your news links, thoughts and anecdotes below and have an excellent weekend!