A note from Ben Rabidoux

Ben Rabidoux runs a blog called The Economic Analyst that features focused analysis of economics and the Canadian housing market.  He is currently in Vancouver to do a presentation with David Lepoideviv titled Vancouver Real Estate: What’s Next?

This is happening tonight Wednesday the 28th – 7:00 pm at the Westin Bayshore in downtown Vancouver.

Update: the talk was last night, you can find some participant impressions in the comments below.

We don’t normally post about events, but many readers here may be interested in this one.  Here’s a comment Ben left here yesterday:

 

Hey to the VCI crowd.

I’m enjoying my time in this beautiful city, although I’ve been looking over my shoulder a lot with the CAAMP conference in town. I keep waiting to get jumped. So far, so good.

Had the pleasure of meeting a few of the forum characters. Most casual readers of this forum have no idea how many really smart professional analysts and portfolio managers read and contribute to this site. VCI is without a doubt the top online real estate forum in the country (should also give a shout-out to House Hunt Victoria which is also very solid).

One final plug for what brings me to the city: The seminar will be tomorrow at 7pm at the Westin Bayshore and as a teaser, the staff at the Lepoidevin Group have printed (in colour) and bound the entire presentation for every person in attendance to take home. Should be a fun conversation piece if you leave it on your coffee table.

http://www.realestate2013.ca for more info.

-Ben

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Anonymous
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Anonymous
3 years 5 months ago

Can’t blame him for trying

gokou3
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gokou3
3 years 5 months ago

I wonder if he would kindly post a PDF of the presentation after the event? Would be such a useful educational material especially for the Vancouver crowd.

Con-Rad
Guest
Con-Rad
3 years 5 months ago

From CAAMP, talk interest rates going to stay low for the next 7 years.

This is not industry shills talking.
This is a quote from David Dodge.

I know bears like the idea of a crash so they can buy at a lower price. I get that. But you have to prepare yourselves that it might take a while. For insightful guys like patriotz that is no problem because renting is equivalent to owning. His message is powerful if you understand it.

So. Bears. Why are you reading here, really? Serious question.

Bob Arctor
Member
Bob Arctor
3 years 5 months ago

@gokou3:
It’d be nice to see video of the event as well.

Guy Smiley
Member
Guy Smiley
3 years 5 months ago

Why are you posting here?

Interest rates are only one ingredient. Housing price crashes in the presence of multi-year stretches of cheap lending are nothing new.

And don’t assign that much confidence to caamp – they can see 7 years out as clearly as everyone else.

patriotz
Member
3 years 5 months ago

Canada AM (CTV) had a piece on the Trump condotel debacle at 7:35 local time which you might be able to see live or on their website.

Best appreciated for the unintentional humour, as when Bev talked about the “delusioned” buyers. “Expert” guest Brad Lamb (Toronto condo king) assured us that there has never been a RE downturn without a recession in North America. Which of course is untrue in Toronto and elsewhere, unless he really meant there was a recession after the downturn. 🙂

patriotz
Member
3 years 5 months ago

California Finds Economic Gloom Starting to Lift

After nearly five years of brutal economic decline, government retrenchment and a widespread loss of confidence in its future, California is showing the first signs of a rebound. There is evidence of job growth, economic stability, a resurgent housing market and rising spirits in a state that was among the worst hit by the recession.

How about that? RE prices that make sense are good for the economy.

Farmer
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Farmer
3 years 5 months ago

I would very much like to hear a recap of the event if anyone of you is going to be present and is willing to take the time to post about it. Ben is one of the countries brightest and hardest working analysts and as we know he has been featured many times in our national media and print publications. I just wish I could be there in person to hear him but alas it is not possible this year.

groundhog
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groundhog
3 years 5 months ago

@Con-rad

I doubt interest rates rise in the near future either, however that has little bearing on my opinion on Vancouver RE prices.

When interest rates do rise it’s likely they’ll rise by the force of the markets, rather then by the Bank of Canada’s choice. When interest rates rise across the western economies, most will be doomed (Japan!).

Piklishi
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Piklishi
3 years 5 months ago

I will go tonight, maybe we should have the VCI corner there, will be nice to meet the peeps who write here, I think the bulls should be welcomed too. Also will be better to have different opinions.

Anonymous
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Anonymous
3 years 5 months ago

Question: What does Ben Rabidoux do other than run a blog? Does he provide some type of service? I can’t tell from his blog.

Bull! Bull! Bull!
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Bull! Bull! Bull!
3 years 5 months ago

“Most casual readers of this forum have no idea how many really smart professional analysts and portfolio managers read and contribute to this site.”

That’s depressing. Knowing that people who have been wrong for 6 1/2 years and have missed the biggest bull run are managing other people’s money and charging for it… Makes me sad.

And they say real estate agents are crooks!

Bull! Bull! Bull!
Guest
Bull! Bull! Bull!
3 years 5 months ago

1700 PARTY WAS YESTERDAY!!! HAPPY 1700 DAY!!!

Any predictions on when we’ll reach 1600??

New Listings 114
Price Changes 85
Sold Listings 114
TI:16993

http://www.paulboenisch.com

Anonymous
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Anonymous
3 years 5 months ago

@groundhog:

What do you mean by “(Japan!)” here?

Con-Rad
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Con-Rad
3 years 5 months ago

@groundhog: There you go groundhog. I agree rising rates will hit prices hard. If they do rise that means bears with lots of cash will get more vancouver westside house for their money. If they don’t rise it means bears with lots of cash will get more vancouver westside house for their money. It will just take longer.

Con-Rad
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Con-Rad
3 years 5 months ago

@Anonymous: groundhog thinks Japan is a fly searching for a windshield. I think he reads Kyle Bass.

Anonymous
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Anonymous
3 years 5 months ago

We need a secret VCI signal for those going tonight. Are there name tags? Just write a small vci at the end. Bull, you can just Wear your special gown made out of $100 bills.

VMD
Member
3 years 5 months ago

@Anonymous: it is on his blog. He is not Anonymous.
“About: Ben Rabidoux is an analyst and strategist with M Hanson Advisors, a market research firm catering to professional, institutional investors. His research focus is on mortgage finance and credit and housing as a disproportionate driver of the current Canadian economy. His work has been featured in the Globe and Mail, Canadian Business, Toronto Life, the Jerusalem Post, Macleans, and numerous websites including MSN, Yahoo, and Zero Hedge. “

VMD
Member
3 years 5 months ago
Interesting that OSFI’s Julie Dickson is also on the list of potential candidates to be the next BoC governor. Seems like someone with more “bite”. On the other hand, it might be a good idea for her to stay in OSFI to exercise her “bite” over CMHC (eg. enforcing the new rules governing mortgage insurers in early 2013). BoC governmor’s hands are often tied.. “Economic analyst Patti Croft said Julie Dickson, who heads the Office of the Superintendent of Financial Institutions Canada, would be her top pick. “Her experience, expertise on the regulatory side would be a wonderful addition,” Croft… Read more »
Anonymous
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Anonymous
3 years 5 months ago

Question: What do Bloggers do other than run a blog?
Answer: nothing else. they live with their parents rent free.

Simple
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Simple
3 years 5 months ago

@Bull! Bull! Bull!:

Bull! Bull! Bull! You seem to have a bit of trouble understanding the the thesis of this forum. Let me put it in more relatable terms. Remember in the late ’90s when you thought you were rich because of your Beanie Baby collection? This is kind of like that.

Bull! Bull! Bull!
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Bull! Bull! Bull!
3 years 5 months ago

@Simple: You don’t seem to understand that being wrong for 6 1/2 years is unacceptable for an investment professionals.

raincity
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raincity
3 years 5 months ago

@Bull! Bull! Bull!: I used to think Nortel was overvalued, then it doubled in price. Was I wrong or right?

Anonymous
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Anonymous
3 years 5 months ago

@VMD: “He is not Anonymous.”

Yes I figured that out by reading his name. Thanks for the info. I always like to know what someone is trying to sell me before showing up to a presentation.

Anonymous
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Anonymous
3 years 5 months ago

@Bull! Bull! Bull!: “You don’t seem to understand that being wrong for 6 1/2 years is unacceptable for an investment professionals.”

No, what you don’t understand is people here have not been wrong. There has been a bubble for 6.5 years which is exactly what people have been saying. No investment professional would invest in a real estate bubble intentionally other than finding a way to short it.

Anonymous
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Anonymous
3 years 5 months ago

@Piklishi: I for sure aint going. I would get jumped by all you bears and stamped with a “Foreclosed” stamp all over my face, … just like you are about to do with this comment, and most other comments I dare to make here.

VMD
Member
3 years 5 months ago

RBC further tightens investment property mortgage:
– Main changes effective Nov 30, 2012
1. Applicant must satisfy minimum credit score 680-700 (previously no firm rule)
2. Applicant must have no more than 5 mortgaged properties, including own residence. (previously no firm rule)

Source: RBC mortgage advisor Jessica Yi

Anonymous
Guest
Anonymous
3 years 5 months ago

@Simple:
“Remember in the late ’90s when you thought you were rich because of your Beanie Baby collection? This is kind of like that.”

if people try to compare Beanie Baby collection to RE, they need to check in a clinic asap.

Ralph Cramdown
Guest
Ralph Cramdown
3 years 5 months ago

Vancouver real estate’s value prospect recently has only made sense assuming capital appreciation, not on a current yield basis. And that’s how it worked during the Beanie Baby craze. I think Simply has you, Anonymous.

VMD
Member
3 years 5 months ago
RealityCheck
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RealityCheck
3 years 5 months ago

VMD:

I think this tightening is fluff. The vast majority of employed people already have a credit score over 700. And also IMO, anyone with a score below that probably doesn’t own 5 properties let alone 1.

What really needs to be done is mortgage income verification through Canada Revenue Agency. If they are serious about reigning in prices, this is all they have to do.

N
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N
3 years 5 months ago

@Anonymous:

“if people try to compare Beanie Baby collection to RE, they need to check in a clinic asap.”

You are right. With a Beanie Baby collection, there is no leverage, so you only stand to loose what you have already spent. With RE you can be bled for decades.

Extend and Pretend
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Extend and Pretend
3 years 5 months ago

@VMD: “Applicant must have no more than fifty five mortgaged properties”

Aha! That’s what was happening all these years… RBC finally got around to correcting the typo on their loan application. People out there who had only 10, 20, 30 mortgages thought they were slacking off each time they read the application!

Bull! Bull! Bull!
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Bull! Bull! Bull!
3 years 5 months ago

@raincity: You’re using Nortel as an analogy to real estate? Chief executives at Nortel were charged with fraud. That analogy doesn’t apply to real estate.

Well, maybe it does if you’re using bear logic.

Bear logic… where being wrong for 6 1/2 years is being correct.

VMD
Member
3 years 5 months ago

@RealityCheck:
After some clarification with that RBC mortgage adviser,
Recent immigrants who have yet to build good credit scores will find getting mortgages for investment properties “very difficult”.

The “new immigrant mortgage plan” that allow recent immigrants to access mortgage only applies to own residence, not investment properties.

If new immigrants wish to apply for mortgages for investment properties they will have too qualify under the regular rules (credit score requirement, income varfication, etc.)

Agreed these are not Major changes, but there will be impact.

RealityCheck
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RealityCheck
3 years 5 months ago

VMD,

I hear you. However, I know of many immigrants who simply state that the new property they are buying is for living purposes, having just rented out their original residential property. This way you bypass the rules.

It’s crazy. Too many loopholes — I think purposely built in.

Turkey
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Turkey
3 years 5 months ago

@Bull! Bull! Bull!:

Bear logic… where being wrong for 6 1/2 years is being correct.

This is your trump card?

Six years ago, it was possible to get a 40-year mortgage. Do you know how it feels to have well over 30 years of payments left on a rapidly depreciating property, with no reprieve in sight? Spare me that kind of “correct”…

jesse
Member
3 years 5 months ago

For people going to Ben’s talk, he is a good speaker and will present a whackload of relevant data. I won’t be there, unfortunately due to other obligations, though if I were I would be wearing my hat.

Ben is right, there are some smart people reading here and on other local RE blogs. Often they cannot reveal who they are due to their lines of work, but suffice it to say a few posts and comments made in the Vancouver RE blogosphere are showing up in analyst reports.

Extend and Pretend
Guest
Extend and Pretend
3 years 5 months ago
@Bull! Bull! Bull!: re: “executives at Nortel were charged with fraud. That analogy doesn’t apply to real estate. Well, maybe it does…” Bull’s having a hilarious belief crisis. I quoted his exact words! BTW, buyers in Canada are being investigated for exaggerated price fraud: http://www.thestar.com/news/gta/article/1111810–flipped-junction-homes-taken-on-a-wild-real-estate-ride-ending-in-fraud-allegations That one is only the latest case. One day soon Bull and will realize the price of their Beanie Baby buildings are all a massive ponzi fraud. Hey Bull, make sure you put lots of nice upgrades in your 50 mortgaged buildings. I don’t want to put out hard cash for better appliances after I… Read more »
vangrl
Member
vangrl
3 years 5 months ago

on Rob Carrick’s facebook page:

We’re #1!!
Our housing market gets the #1 bubble rating from a U.S. website called Business Insider. Are they right, or out to lunch?
http://www.businessinsider.com/canada-housing-market-2012-11#

the comments coming in are classic…

vangrl
Member
vangrl
3 years 5 months ago
Neill “If one only looks at “Canadian averages” which are so skewed by Toronto and Vancouver maybe one could interpret a bubble. As Alberta-based real estate investors where the economic fundamentals and real-world rents do support the market value, we love this type of fear-mongering. It keeps the uninformed out of the market.” John “I don’t think so; we’ve accomplished what we have with an artificially high dollar, and it’s been high against our #1 trade partner, a country that’s been in economic trials for 5 years now. Any bubble we have will be cushioned by a cooling in the… Read more »
G Master
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G Master
3 years 5 months ago

“The inability of younger households to afford ‘family type’ accommodation in the City has been one of the spin-offs of rising house prices… ”

“Given the negative impacts that expensive housing has on our city — whether it is forcing people into longer commutes, living in substandard housing, or limiting economic opportunity –”

Sounds like today news? They are from 1937 and 1974 in Vancouver .

Apparently people in Vancouver have been complain about RE for 128 years
http://m.thetyee.ca/Life/2012/11/24/Affordability-Crisis/

C.Junta
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C.Junta
3 years 5 months ago
@VMD: “Many Surrey sellers Motivated and Will consider all offers” I doubt many of them are truly motivated. Just the usual RE newspeak. Last year I have been to an open house that was on the market for about half a year, and guess what? Not even a single price reduction. The realtor was running around yours truly chanting “The seller is motivated, I am motivated…” That was quite a show. His spell didn’t work and he was replaced by another agent. The property is still for sale these days (1.5 years on the market) with nominal price reduction and… Read more »
khoek
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khoek
3 years 5 months ago

I got my ticket… looking forward to the seminar tonight Ben!

Anonymoose
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Anonymoose
3 years 5 months ago
Someone I know just sold their condo in the FV for a considerable loss, about 30k or over 10%, from when they bought. They had it on the market for probably 8 months. Personally I think they are lucky to get what they got considering they had no previous offers and virtually nobody looking at it. In the discussion I discovered how many people are completely underwater on their mortgage. It’s a lot. Many people in condos appear to be trapped. An interesting observation from this is one of the comments they made to me was they couldn’t go any… Read more »
Anonymous
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Anonymous
3 years 5 months ago
“Do people sell and loose their downpayment and ability to repurchase, or do they not budge in hopes of getting an offer? How does this affect the market dynamic? If sellers and buyers don’t budge at the macro level and there is a stymie what happens?” If people are selling to ‘move up’ to a larger place they will either keep the place and suffer or rent the place out and rent a new place. Neither impacts the market because it is the people who must sell who will cut their price. Those are people who get job transfers, divorces,… Read more »
gokou3
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gokou3
3 years 5 months ago
@Anonymoose: If a 10% loss is considerable, I think a lot of people will be at a loss for adjectives when the loss becomes much higher. “If sellers and buyers don’t budge at the macro level and there is a stymie what happens?” What you describe here is nothing related to reality, as various anecdotes would illustrate. But even if this is true for a short term (say 6 months to 1 year), can you imagine what happens to RE-related work like mortgage brokers / RE agents / bankers? Yep, they would be starving and that’s a “considerable” impact on… Read more »
Extend and Pretend
Guest
Extend and Pretend
3 years 5 months ago
@Anonymous: re: “Who must sell … are people who get job transfers, divorces, deaths or…” those that get job transferred to the permanent unemployment line when the value of their job counting trees, rubber stamping papers, or other bullshit employment activity can no longer beat 1% per year easy credit Carney bubble money. The first question on the CMHC loan insurance application should read: “Under penalty of perjury, you solemnly swear that your present employment sustainably produces downstream economic output exceeding 101% per anum of gross wages.” Unfortunately most people clueless about what their job is actually worth and by… Read more »
Bailing in BC
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Bailing in BC
3 years 5 months ago

I will be there…. And believe me when I say that this photo does not do me justice.

Bull! Bull! Bull!
Guest
Bull! Bull! Bull!
3 years 5 months ago

@G Master: But this time is different! This time the affordability crisis will be solved when prices collapse!

It’s a new paradigm! It’s bear logic!

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