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November 7th, 2009 at 3:49 am
what will the HST do to housing prices?
will it give existing home owners a 12% pricing advantage over anything new that comes onto the market?….assuming they currently have a 5% (GST) pricing advantage.
wouldn’t it make sense new home prices will be rebated a bit to compete with existing home prices which are exempt from the tax?
would it also make sense that existing home prices will be increased a bit to a level such that the difference in price between a new home or existing home, after tax, represents the premium someone will pay for a new home?
Is the HST actually good for current home owners?
November 7th, 2009 at 12:51 am
“We have high prices, affordability limits and we inject higher interest rates,”
He expects the prime rate to rise from today’s 2.25 up to 4.75 moving into late 2010 and 2011.”
From the most UNLIKELY source: Cameron Muir. Former CHMC head and current B.C. Real Estate Association’s chief economist!
http://www.kamloopsnews.ca/art.....ate-market
Wah?!?!?!? I see pigs flying outside my window in the dark!
November 6th, 2009 at 11:12 pm
“Until Wednesday, Yi Feng Wu was one of about 100,000 foreign nationals fighting government efforts to deport them.”
–
I’m sorry, but WTF? I had no idea there were 100k people under deportation orders. Immigration court reform please. I will sign up to drive the bus myself.
November 6th, 2009 at 9:51 pm
heres your typical rich chinese buying up the ‘valuable’ real estate and autos
http://www.theprovince.com/new.....story.html
November 6th, 2009 at 9:43 pm
#45 Boy the Canadian taxpayer is at the top of everyones list of who to flog off these hyper expensive tax payer funded fiascos on eh?
What do you think goes on in the boardrooms of these scam orgs/
” hey, I need a new propellor on my yacht, call canada They’re desperate for recognition”.
It really is THE country with the biggest inferiority and insecurity complex on the freakin planet.
November 6th, 2009 at 6:45 pm
GOOD NOOZ!!! Cheronto got the pan-american games!!!! Yes it’s even more unknown than the winter owe-lympics which means it will surely attract only the saviest of investors!!! I intend on buying 5 condos in preparation for these games.
November 6th, 2009 at 6:33 pm
Those people aren’t unemployed, they are just unsuccessful business persons.
About 15 per cent of Canadian workers are now their own boss, as the ranks of the self-employed rise. About 28,000 more people became self employed in October, Statistics Canada’s monthly jobs report Friday showed. Over all, the morning’s jobs numbers were bleak, and not at all what Bay Street had expected, but they also may hint at changes in the labour market as Canada slogs its way back to health.
http://www.theglobeandmail.com.....le1353683/
Just like everything else in this country the spin is going fast enough to make you vomit if you open your eyes.
Yesterday a spokesman said that the H1N1 crisis was the MEDIA’S fault. Hah !!!!
November 6th, 2009 at 6:28 pm
““… there is growing suspicion in the country that the H1N1 virus has also succumbed to a bitter battle for political power ”
Are there no suprises left in the world of politics?
November 6th, 2009 at 6:08 pm
@realpaul
#7 Joycer, did you say that $335K wasn’t a high price to pay for living in a TH in Sewery? On 84th? Surely you jest?
I think everybody needs to take a step back and say
” No, thanks, thats just reeeeeeeeeeediculous”.
I didn’t say it wasn’t priced high, just that it was under market value and hadn’t sold out to speculators looking to flip them. Just checked mls and I see a 4/3 on 82nd ave for 390K (built in 1993), another 4/3 on 85th for 415K (built in 2005). Didn’t mean to imply fair value, which yes is still overpriced for a townhouse in Surrey.
November 6th, 2009 at 5:52 pm
“Huge Canadian content today on Mish’s blog for those who are interested.”
…and as expected, most of the comments tried to change the topic to more “American” ones…
November 6th, 2009 at 5:04 pm
chip – no, it topped 100% briefly in 1995:
see http://investing.curiouscatblo.....ge-of-gdp/
November 6th, 2009 at 4:51 pm
From Mish’s site:
” They remember nothing of the hardship that Canada went through in the 90’s when our debt-to-gdp topped 100%, ”
I don’t think this is true. I think it topped out around 70%.
November 6th, 2009 at 4:02 pm
“then somebody should be fired.”
Yes please. About 12 months ago at least.
November 6th, 2009 at 3:36 pm
Those Olympics tickets will always sell if they lower the price. You can’t tell me most people don’t want to go, they just don’t want to pay outrageous prices. Empty seats on TV look pretty bad, so I imagine the price will come down and every venue will be filled. If not, then somebody should be fired.
November 6th, 2009 at 3:00 pm
All the people I know who are signing up for the Olympic tickets intend to sell them for a profit.
What happens when every purchaser is actually a scalper with no intentions of attending the event?
Well, the same thing that happens in front of GM Place 10 minutes into the start of a Canucks game.
Slash and burn, baby! I won’t be undersold!
November 6th, 2009 at 2:42 pm
The costs include servicing the debt they have. They won’t have a significantly reduced revenue because their revenue stream doesn’t work like federal or provincial. With Fed. and Prov. when people shop less (less PST, GST) or when they earn less the taxes go down. The main revenue generator for municipalities is property tax and the only way for that to drop would be if some natural disaster wiped out a chunk of the real-estate.
So debt and such causes taxes to go up, sure but that isn’t the main driver and like I said they can’t take on new debt without a referendum (afaik, I am not an expert). If costs overrun their budget one year they have to adjust the next year’s budget to pay it back in that year as well as adjusting for increases in wages, infrastructure costs etc.
November 6th, 2009 at 2:32 pm
Watch the last round of owe-lympic sales closely and I think you’ll find a very muted press release about the results because they will not sell all the tickets. No one’s coming to the olympics.
November 6th, 2009 at 2:24 pm
Drachen
doesn’t the city of Vancouvers costs include debt? or they’ll say the forsee reduced revenue or something
in my book “revenue neutral” still translates to slapping on higher taxes when you’ve dug yourself into a hole..
November 6th, 2009 at 1:54 pm
@Drachen:
Logic, post 21 beat you to it
November 6th, 2009 at 1:50 pm
@Hovering:
“Vancouver (and every other municipality) are going to crank taxes right away. it’s just too damn easy to do when facing huge deficits.”
Actually it’s my understanding that Vancouver (and I believe all municipalities in Canada) are supposed to project their costs for the next year and tax accordingly, in theory they should be debt neutral except when additional spending is approved for special projects by the electorate. So they can’t “choose” to tax more or less, they must tax the mandated amount.
November 6th, 2009 at 1:45 pm
#28 agreed if realtor’s can’t be held acountable for the marketing ‘facts’ they use to convince clients then they shouldn’t be allowed to use these ‘facts’
November 6th, 2009 at 1:42 pm
@Purp:
“@DaMann “That news story about a flood of Olympic rentals with no takers warms the cackles of my heart.” … I’ve always wondered exactly where the heart cackles are?”
First off it’s cockles, cackle is a raspy laugh.
A cockle is a fold, pucker or wrinkle in this instance (it has other meanings but I don’t think ‘bivalve molluscs of my heart’ makes much sense).
November 6th, 2009 at 1:36 pm
@joycer:
‘the realtor quickly corrected them and said “Oh no, the market is not going to go down, these units will be worth more by the time they are finished”.’
If a realtor ever says anything like that to me I’ll demand they put it in the contract, in writing that they’ll cover any losses. See if they bite (ha!).
November 6th, 2009 at 1:28 pm
“Ukraine gov uses H1N1 scare to seize absolute power. Scary. …….”
Good thing that stupidity isn’t considered a health ‘epidemic’ otherwise Vancouver would have been under Marshal law for a few years now.
November 6th, 2009 at 1:01 pm
ok, imagine you are the g20 (bear with me)
the economies of the developed world just collectively went flush
the americans are essentially bankrupt (UK and japan too)
you saved the world from financial armagedon by giving away money for free and firing up the mint’s printing presses
now what?
now we slowly ratchet up interest rates.. we put on smiley faces and pump the “we avoided a great recession!” story in our respective medias. we slowly, ever so slowly, increase taxes while at the same time cutting gov’t spending and changing the rules governing the financial markets.
Why won’t it work? B/c:
-Norway and Australian and the like aren’t on board..their rates are going up sooner than ours and are attracting all the buyers of debt, making our debt look crappy and unattractive
-Canada is going to tank cause we didn’t expect it’s citizens would take on stupid ammounts of debt at variable rates even while the canadian gov kept yelling that rates would start going up in sthe summer of 2010.. Now every incrimental raise in the interest rate will wash hundreds of people away.. god help them when the americans crank their rates to 8% (americans have 30 year locked mortgages – but cnaadians don’t)
-Vancouver (and every other municipality) are going to crank taxes right away. it’s just too damn easy to do when facing huge deficits. all g20 countries will inevitably raise taxes too high too soon leading to elections and changes in gov’ts and more boring g20 meetings
-companies are firing everyone left right and centre b/c of the recession and yet they are making money at the same time therefore they won’t hire back anyone – ever-
-the US gov’t simply isn’t set up to do anything other than spend spend spend. No politician who cuts stays around very long. It is headed for a car crash. Unless it starts a war.. and I mean a war.. not afghanistan with it’s 5000 different tribes. North Korea, Iran, Venezuela maybe. All three at once perhaps.. China ? shudder..
Only in the face of war do Americans change.
let’s hope the g20 actually has a better plan than the above
sigh
November 6th, 2009 at 12:42 pm
With regard to all those call center closures, it’s not true that the rising dollar wiped out the Canadian advantage.
The advantage just shifts from the West Coast to the East Coast.
It’s a LOT cheaper to hire a skilled worker on the East Coast because the cost of living is a lot lower. Additionally, the East Coast call centers run on Atlantic Standard time which gives them an additional advantage. Call costs are based on the destination and because it’s 4 hours later there, they can receive calls during business hours for less money then West Coast call centers. The East Coast is a lot closer to Montreal, Toronto, New York and the rest of the Eastern Seaboard, which is where the financial center of the continent is.
Nova Scotia and New Brunswick seem to be doing relatively well. Their unemployment is a point or so higher then BC, but BC’s rate appears to be accelerating.
I can also tell you the food and bevvy industry is really suffering here in BC. Income is way, way, WAY down. There are also loads of IT workers out of work and somewhat in denial about the situation; I know a number of these personally. It’s going to be a while before they figure out how few jobs are left, and how many applicants there are.
Once the Olympics finish up there are going to be a LOT of highly skilled technicans looking for work as well. Currently there are tons of people building out communication networks and implementing the last phases of the Olympic build-out. Come March, those people are ALSO going to be looking for work.
Drachen, do you begin to see why I’m jumping ship? Sure I’ll miss the I told you so dance but you really don’t want to watch a plan crash from ground zero, now do you? No, thank you….I”ll watch it from the safety of the other side of the country. BC can implement the HST and drive up property values all it likes then, I’ll be WELL out of the danger zone.
November 6th, 2009 at 12:41 pm
Huge Canadian content today on Mish’s blog for those who are interested.
http://globaleconomicanalysis......anada.html
November 6th, 2009 at 12:30 pm
@logic:
I had a feeling someone was going to call me on it. Cockles it is. NOT cackles. So now I know, my cockles are warmed
Either way, cackles, cockles, and muscles it’s all the same, the hype machine is gearing up for it’s last spin, the Olympics are almost here and soon to be gone. Just what will they use to pump the market now, that’s all that has been talked about over the last 5 years. I suspect it will be “All the people who watched the games are now in the process of moving here” You know, all those rich persians watching the ski jumping back home in Tehran.
November 6th, 2009 at 12:13 pm
Ukraine gov uses H1N1 scare to seize absolute power. Scary.
http://www.prisonplanet.com/ma.....demic.html
Anyone wonder why Canada’s new security measures should be questioned?
November 6th, 2009 at 12:07 pm
And it’s “cockles of the heart”
http://www.worldwidewords.org/qa/qa-coc2.htm
Origin obscure, but on possibility is: “In medieval Latin, the ventricles of the heart were at times called cochleae cordis, where the second word is an inflected form of cor, heart. Those unversed in Latin could have misinterpreted cochleae as cockles, or it might have started out as a university in-joke.”
November 6th, 2009 at 12:05 pm
“So now that Olympic construction is winding up maybe we are just returning to a more typical BC labour market? ”
—
Which might suggest returning toa “more typical” housing market?
November 6th, 2009 at 12:01 pm
@kansai_92:
No sector is safe, layoffs everywhere yet everyone is buying. I really don’t get this sillyness. Like my wife says “I don’t care what anyone says, there is no recession in Vancouver” All she comments about is the wealthy cars, and stupid prices of RE. I keep trying to tell her that Vancouver is a city living on credit and home equity loans, the music will stop soon. She doesn’t buy it anymore. She IS strating to believe it’s different here. Shit, so am I!!!??!?!?
EVRYTHING is defying all logic and reason. Sure, I know people are buying places based on variable rates of 2% but even at that, I still can’t fathom how ( or why) people are buying and getting $700k mortgages on $100k household incomes.
Man I can’t wait for rates to go up!
November 6th, 2009 at 11:57 am
“BC Unemployment rate 1% in a month”
Well, that shouldn’t be a “problem” for Vancouver real estate…
After all, Ozzie said so on Global TV News.
November 6th, 2009 at 11:56 am
@Purp:
Cackles are located between the left atrium and left ventricle, not to be confused with the hackles located between the right atrium and right ventricle
November 6th, 2009 at 11:44 am
Don’t forget the Regional Health board cuts.
Vancouver Coastal already went through one round. Another one is coming.
Now is Fraser Health’s turn.
No sector is safe!
November 6th, 2009 at 11:43 am
@DaMann “That news story about a flood of Olympic rentals with no takers warms the cackles of my heart.” … I’ve always wondered exactly where the heart cackles are?
Re: the unemployment rate jump. Just to keep perspective the current rate of about 8% was where we were as recently as 2001 to 2004 and in between then and now we had very low unemployment (Olympic related?). So now that Olympic construction is winding up maybe we are just returning to a more typical BC labour market?
November 6th, 2009 at 11:41 am
#7 Joycer, did you say that $335K wasn’t a high price to pay for living in a TH in Sewery? On 84th? Surely you jest?
I think everybody needs to take a step back and say
” No, thanks, thats just reeeeeeeeeeediculous”.
November 6th, 2009 at 11:13 am
@Dave:
I’ll give you points 1 and 2 and it appears we agree on 3. Point 4 however, I disagree with the already baked in comment.
The security budget was $150M. The actual costs won’t be known until post-Olympics. The latest estimate was over $1B with some analysts saying was conservative. That’s an additional $850M of costs that aren’t even in the mixing bowl just yet, let alone baked in.
Don’t kid yourself with the Olympic costs. The budgets were arbitrary and used to keep folks like you, who don’t question our politicians, waving the Olympic flag.
Time will tell.
November 6th, 2009 at 10:55 am
The real unemployment numbers in Canada:
http://www.google.com/hostedne.....XTgqk7h4IQ
In the month when Canadians were told 27,000 new jobs had been added, the first reversal of job losses in almost a year, the industry survey was showing that employment had fallen by a staggering 110,200 jobs
November 6th, 2009 at 10:52 am
That news story about a flood of Olympic rentals with no takers warms the cackles of my heart. I can’t wait for the story of the flood of listings that no one wants at half the price, that would warm my heart even more.
Only a few more months until the Olympics will be done and gone, thank god!
November 6th, 2009 at 10:50 am
Just out of interest, how many people are 0.9% of the BC workforce? What’s the number of people who have “we can no longer eat out, no longer buy new stuff” section of the community?
November 6th, 2009 at 10:34 am
Yeah AB is above normal historical unemployment rates and so is B.C..
A 0.9% jump is not not an anomaly. That is over a 12.1% increase in unemployment in B.C.
November 6th, 2009 at 9:41 am
@Vansanity:
With regards to your points:
1. It’s only one month of data. Let’s wait a couple more before calling it a trend. The current level is the same as where we were in August. So, let’s call it flat for now.
2. And the Fed just said that rates are going to stay low for a while. The BOC has said it will keep rates low at least till mid next year.
3. House taxes are relative. Your taxes do not go up because of absolute value. The amount you pay is based on the relative value of your property in that city. In any case, you are correct that municipal taxes are going to go up.
4. Already baked into the cake. It’s not like a bill is issued to us once the Olympics are over.
November 6th, 2009 at 9:00 am
Went by Maple on 84 in Surrey last weekend. They’ve got 4Bed/3Bath 1550 sqft Townhouses going for $335,000 with upgrade package included. Completion is April, before HST kicks in on Phase 2 and 3 of the project. As far as I can tell from MLS these townhouses are about 50K below market value, and they will be brand new. The sales lady said it was because they haven’t finished any units yet so there is no showhome to bring people through. 8 of the 20 units in phase 1 have sold (don’t know how many weeks they’ve been on the market though).
How is it that there was no line up to buy these townhouse presales the minute they went up for sale and flip them in April? I took it as proof that speculators aren’t driving this market, but instead first time buyers (thinking they are missing the boat with interest rates so low) are. If the speculators are done with flipping presales, then once this pent up demand is gone who’s left to buy?
Someone mentioned that they were considering the D plan, which was the most expensive, the realtor said that would hold the most value and appreciate the fastest with the market. When the parent of that person (first time buyer… duh) said it would also fall the fastest if the market came down again, the realtor quickly corrected them and said “Oh no, the market is not going to go down, these units will be worth more by the time they are finished”. If they are so confident, why the low prices? I think they see the interest rate increases coming and need to sell out before the HST slows down business for new homes.
Purely anecdotal, but the fact that these presales did not sell out instantly to speculators tells me that we are getting close to another top.
November 6th, 2009 at 8:10 am
Canada’s unemployment rate rises to 8.6 per cent, as economy sheds 43,200 jobs
http://www.google.com/hostedne.....xjZgQVEllA
How’d BC do, you ask?
“Regionally, Alberta, British Columbia and Newfoundland suffered the greatest number of job losses proportionally.
The national unemployment rate was 8.6 per cent in October. Here’s what happened provincially (previous month in brackets):
-Newfoundland 17.0 (15.3)
-Prince Edward Island 12.0 (11.8)
-Nova Scotia 9.3 (9.5)
-New Brunswick 8.5 (8.1)
-Quebec 8.5 (8.8)
-Ontario 9.3 (9.2)
-Manitoba 5.8 (5.3)
-Saskatchewan 5.3 (4.6)
-Alberta 7.5 (7.1)
-British Columbia 8.3 (7.4)”
Our unemployment rate rose nearly 1% in a month.
Also, lest we forget an excerpt from yesterday’s Province:
“…that’s not stopping the City of Vancouver, which next year is looking at raising property taxes 4.8 per cent, and another five per cent in 2011, just to cover its pay increases.”
Let’s recap, shall we:
1) unemployment is rising… BOC will have to hold rates, as inflation has remained low, we won’t get into it;
2) At the first consistent signs of recovery south of us and domestically, BOC will crank up the rates in lock-step with the Fed;
3) Taxes in Vancouver are set to increase 9.8% over the next 2 years. I believe this amount is on the frozen home prices, thank Gordo, of 2007, peak, pre-correction;
4) The hyper-lympics will be over and done with, leaving us with its debt in about 4 months.
And then… in the face of all the above, the CMHC has the audacity to step out of their original mandate to make a bold prediction that property prices will trend higher, and VANCOUVER, of all places, will lead the charge over the next year.
I’ll stop now.
November 6th, 2009 at 8:04 am
BC Unemployment rate 1% in a month! Ouch!
November 6th, 2009 at 1:11 am
More devastating news for the BC contact centre industry. 700 jobs lost at Chase Card Services in Surrey.
http://www.vancouversun.com/bu.....story.html
These were OK paying jobs by BC standards, at $15-$20/hr. Most certainly there are people holding big mortgages in this crowd.
Moore, whose organization represents employees, vendors and consultants in B.C.’s call-centre industry and promotes call-centre growth, said the announced closure of the non-unionized facility is the latest example of large call centres closing in B.C., largely because of an appreciating Canadian dollar.
“The dollar is impacting [the industry],” said Moore, who added that he couldn’t speak to the specific reasons for the Chase Card closure. “A few years ago, many call centres set up here because it was cheaper. That advantage has shrunk, although there are still other advantages.
“EBay closed their local centre in Burnaby last month and that was 700 jobs. They’re consolidating [operations] in Salt Lake City. And Convergys had a large centre in Kamloops. It closed last month. That was 1,000 employees. Hopefully, [the Chase Card closure] will be the last.
November 5th, 2009 at 11:02 pm
Huh?
We already have a rent from your bank program in Canada.
It’s called a 35yr AMT.
November 5th, 2009 at 9:59 pm
there’s a post on garth’s blog fannie mae has asked for an additional 1.5 billion.
November 5th, 2009 at 9:12 pm
Just went to the website from a call to action for a tv spot about why a Realtor is needed.
http://www.howrealtorshelp.ca/
WTF?