One bubble down, one to go

The Vancouver real estate slow down is making news all over and people are now wringing their hands over Toronto.

This Financial Post article talks about our bloating inventory and collapsing sales while pointing out that Toronto sales are up 11% year over year.

..and yes, there’s yet another warning from the Bank of Canada:

“Although economic growth in Canada was slightly slower than expected in the first quarter, underlying economic momentum appears largely consistent with expectations. However, the composition of growth is less balanced. In particular, housing activity has been stronger than expected, and households continue to add to their debt burden in an environment of modest income growth.”

The warning is apt. Rosenberg said if the Bank of Canada felt the need to re-establish parity between short-term rates and its inflation target it would have to raise the rate 100 basis points.

“That wouldn’t cause a recession, but it sure would be painful for many households,” leading to more loan defaults and less spending growth.

If you can’t afford a 100 basis point increase in rates you probably shouldn’t be taking on too much debt.

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VMD
Member

Threads like this are starting to appear on Chinese RE forums:
“I got tricked into buy a pre-sale condo, tried to sell but no one’s buying!!! Headache-ing..”

He’s considering taking a loss (the size of realtor’s commissions, ~5%?) to get out.

Market psychology’s turning..

http://translate.google.com/translate?sl=zh-CN&tl=en&js=n&prev=_t&hl=en&ie=UTF-8&layout=2&eotf=1&u=http%3A%2F%2Fforum.iask.ca%2Fshowthread.php%3Ft%3D572376&act=url

VCI Admin
Admin

Here are five more invite registration invite codes for the http://vancouverpeak.com forum in case there’s a 19k party tomorrow.

mlg4-dtp1-de2h
uo9z-5ved-cilu
fmrj-fd4d-ylh2
792z-a4o2-dkxk
f8rp-g7mw-7r2z
VMD
Member

@Patiently Waiting:
A couple immigration lawyers based in Vancouver had been writing “editorials” on Chinese newspapers heavily criticizing Kenney’s immigration rule changes.

As predictable as Mortgage Brokers bashing OSFI’s HELOC rule changes.

McLovin
Guest
McLovin

“Argh, slowest climb to 19000 ever!”

I agree! The caterers are pissed. I promised them tomorrow night.

VMD
Member

@Patiently Waiting:

It is interesting that many Chinese Canadians are cheering on Kenney’s recent rounds of immigration changes. The protests mainly took place in China, by people who have yet to get a foot in the door.

Patiently Waiting
Member
Patiently Waiting

@VMD: VMD, very interesting.

Have you heard any more about CRA crackdowns on overseas income in that forum? Also, is there as much outrage over Kenney’s changes as there (apparently) is in the South Asian community?

I tried reading a few threads but much appears lost in the translation.

rp1
Guest
rp1
Patiently Waiting
Member
Patiently Waiting

@LazyCanadian: I’m just following inventory which is slowly climbing right now. People stress too much about daily stats. Though I’m thankful we’re getting them, as its interesting.

LazyCanadian
Guest
LazyCanadian

Is it possible to get updated numbers if they change after we get them? I enjoy biased discussion as much as the next guy, but if we have biased numbers then the discussion becomes pointless.

Chabar
Guest
Chabar

It is f-king back-home-mentality. If it is available it means it is for granted and it is free. Let’s just take it.

Spade
Guest
Spade

[Government starting to crack down on Canada Child Tax Benefit abusers]
– According to a popular thread started on a Chinese forum, as of last month people are getting audited on their use of Canada Child Tax Benefit (AKA “Milk Money” among Chinese immigrants).

___________

About bloody time they go after these parasites! The fact that this story is big news on an ethnic community thread tells you something doesn’t it….

Anonymous
Guest
Anonymous

@VMD:

Leeches… what else would you expect?

VCI Admin
Admin

@YLTNboomerang: do you see comments expanding when the market starts to show signs of contraction?

We’re certainly seeing a lot of discussion today! Lately comments are up, but I’m not sure if there’s a consistent theme. A few days ago wreckonomics graphed the percentage of downvoted comment since Oct 08, maybe they could graph the monthly comment totals as well?

Whaddyasay Wreckonomics?

VMD
Member
[Government starting to crack down on Canada Child Tax Benefit abusers] – According to a popular thread started on a Chinese forum, as of last month people are getting audited on their use of Canada Child Tax Benefit (AKA “Milk Money” among Chinese immigrants). Government is requesting records of: 1. Proof of residence: either property tax receipts or proof of tenancy (letter from landlord) 2. Proof of enrollment in school (issued by current school) Apparently some people were claiming Milk Money while the child was not living in Canada. It is not known whether this crack-down is geared only towards recent immigrants. One anecdote was particularly interesting/unfortunate. user “shw019” was trying to ask her ex-landlord for a letter proving her tenancy. The ex-landlord initially agreed over phone, however the next day he flat out refused to write the simple letter.… Read more »
mac
Member
mac
YLTNboomerang
Member

Hey Pope, do you see comments expanding when the market starts to show signs of contraction? If I recall this happened in 2008 then once it looked like the crash was a sure thing blog activity dropped off as we all felt vindicated and no longer felt the need to comment on the obvious to all (including Tsur before he capitulated)? Of course we all came back once the printing press was warmed up and the market took off again, doh!

VHB
Member
VHB

Here are the projections. I swapped out the numbers from the 5th and 6th with those from Yatowski reflecting the late-posted sales and listings. So, numbers may differ from what you’ve seen.

In any case, thanks PaulB!!!

Total days	21
Days elapsed so far	5
Weekends / holidays	2
Days missing	0
Days remaining	16
7 Calendar Day Moving Average: Sales	126
7 Calendar Day Moving Average: Listings	293
SALES	
Sales so far	632
Projection for rest of month (using 7day MA)	2022
Projected month end total	2654
NEW LISTINGS	
Listings so far	1466
Projection for rest of month (using 7day MA)	4691
Projected month end total	6157
Sell-list so far	43.1%
Projected month-end sell-list	43.1%
MONTHS OF INVENTORY	
Inventory as of June 7, 2012	18924
Current MoI at this sales pace	7.13
YLTNboomerang
Member

@paulb: Argh, slowest climb to 19000 ever! Three steps forward, a hop and a skip back…

YLTNboomerang
Member
@N: I’ve experienced the same. I suggested my folks buy in as I did and was told that I must be cold and emotionless to do such. This was followed by a comment that maybe there is something wrong with me for taking the same unemotional approach to housing…this has now been followed up with maybe I am sick for taking pleasure if people lose everything in housing “and start jumping off ledges” (mothers words not mine). I think the last statement stems from my sibling being massively leveraged with 3 real estate investments! The only unfortunate thing that I will feel bad about is that I loaned my sibling a sizable sum when the bank wouldn’t provide bridge financing…three months interest free; 3 years in I’ve only got half back. They say never loan family members money but I… Read more »
YLTNboomerang
Member
@DaMann: I’m right there with ya! I did the same thing and felt vindicated until…then my equities got wiped out. Thankfully I took the same unemotional approach with my investing that I did with my home sale and bought the whole way down with leverage. Up until the last market dip in April I was up 80% excluding dividends but leverage is a bitch and now I’m only up about 60%. I’ve bought some more on this latest dip but more of an asset reallocation out of anything Canadian tied to resource and into US production; hopefully I’ll get a forex bump as the Canuck buck returns to historical levels when China hits the fan and our resource/Petro/construction economy tanks. FIFO, US recessed first and is recovering first. Next is Europe, than China which will be quickly followed by China… Read more »
AG Sage
Member

@mac: Do you have a link to the article that said lending was up in China? Thanks.

YLTNboomerang
Member
@patriotz: I just wish I could short these folks: http://www.alpinecredits.ca/ http://www.getacceptance.com/ http://capitaldirect.rtrk.ca/?scid=69150&kw=55853:3&pub_cr_id=20703912221 Is it me or does the proliferation of these guys and their advertising jingles lik “when you can’t nak on the banks” and “if you own your home you can get that loan” says something about Vancouver in general? They advertise using home equity to take vacations, buy cars, pay off credit cards and do renos; isn’t that what got the US into problems? These are high interest second mortgages that have “2nd” rights to assets kinda like common shares after preferreds; when the crash occurs these guys (and the high net worth individuals investing with them) are going to get burned. The other strange thing is that they predominantly advertise on talk radio, is this what the typical cash starved person listens to??? I figure a station… Read more »
Absinthe
Member
Absinthe

@bum: They seem to be still entering sales after Paul’s been putting out his numbers – Paul is really timely so we data junkies are happy, but it looks like for the past two days the sales have been entered after he provided us numbers.

Boombust
Guest
Boombust

“@bum: If you look at Chipman’s site…”

Who? Oh. Yeah. Him.

mac
Member
mac

@bum: If you look at Chipman’s site. The last two days, not including today, have 50% sales/list ratios. We are either not privy to numbers or his numbers must include some other part of the city that no one knows about.