FFFA! Forecasts! Mortgage! Rules! Carney!

It’s that time of the week again, time for our Friday Free-for-all!  This is when we round up the weeks news and have our open topic discussion thread for the weekend, here are a few recent links to kick off the chat:

IMF: You need tighter mortgage rules
TD: forcasting for the provinces
Teranet HPI scatter plot
Conservative impact from RE market?
Carney gets $400k for housing
Luxury home decline
Sales below 10 year average
Stay out of New West Bob
Home prices fall in most Canadian markets

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

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george
Guest
george
3 years 11 months ago
The following link is to a credit market summary data table (as of Sept. 30, 2012) on Statistic Canada’s web site. http://www5.statcan.gc.ca/cansim/pick-choisir?lang=eng&p2=33&id=3780122 The total debt outstanding in Canada was 5.17 Trillion $ (bottom line of the data table). From Jan. 1, 2012 to Sept. 30, 2012 (a period of 274 days) the total debt outstanding increased by 194 Billion $. Over that 274 day period it increased at a rate of 708 Million $ per day. With a total credit market debt of 5.17 Trillion $ and a gdp of 1.75 Trillion $ Canada’s total credit market debt is approximately… Read more »
george
Guest
george
3 years 11 months ago

The following link is to a credit market summary data table (as of Sept. 30, 2012) on Statistic Canada’s web site.

http://www5.statcan.gc.ca/cansim/pick-choisir?lang=eng&p2=33&id=3780122

The total debt outstanding in Canada was 5.17 Trillion $ (bottom line of the data table). From Jan. 1, 2012 to Sept. 30, 2012 (a period of 274 days) the total debt outstanding increased by 194 Billion $. Over that 274 day period it increased at a rate of 708 Million $ per day.

yvr2zrh
Member
3 years 11 months ago
I’m a bit jetlagged so I’m up but wanted to post some interesting stats as we go into the weekend. I like to find those hidden trends, facts and issues that are showing market sentiment and activity. As we get to the end of 2012, here are some thoughts. 1.) MOI for December will be the second worst in 15 years. We will likely hit 11. This is a really bad sign as we are typically quite low at the end of the year. 2.) Comparing to 2008, we are deteriorating now. For December, there are even pockets of Vancouver… Read more »
patriotz
Member
3 years 11 months ago

“You will have a lower supply when prices are weak ”

Doesn’t necessarily apply to speculative markets where supply and demand are driven by expectation of future prices as well as current prices.

There is a very large cohort of investors who will lose their chance to get out with a profit, or just break even, if prices fall any further and I expect the smarter ones to get out. It may only be a minority, but that’s all it takes to drive down prices further.

patriotz
Member
3 years 11 months ago

” Remember that he will keep his house in Canada and only move there temporarily. ”

Doesn’t really need to keep his house of course. If he sold it that would give a message about his views on the housing market wouldn’t it?

One thing that came to mind is whether Carney would be better off going non-resident for tax purposes. It’s not clear that he would, as the marginal income tax rates in the UK are about the same as Canada/Ontario and he could claim a foreign tax credit if filing in Canada.

george
Guest
george
3 years 11 months ago
With a total credit market debt of 5.17 Trillion $ and a gdp of 1.75 Trillion $ Canada’s total credit market debt is approximately 2.95 times the size of our gdp. The United States total credit market debt is 3.5 times the size of its gdp, which is not too far off our 2.95 times. The following link from the St. Louis Fed shows the ratio of the United States total credit market debt to its gdp over the last several decades: http://research.stlouisfed.org/fred2/graph/?g=359 The following link from the St. Louis Fed plots the United States total credit market debt and… Read more »
Some Guy
Guest
Some Guy
3 years 11 months ago
@5 George: “there are very severe and very painful consquences to having a society which lives way beyond its means for a long period of time.” While I generally agree with you about the huge debt build-up, and the problems we face because of it, I wanted to clarify that while a household can live beyond it’s means (by borrowing from someone else), a society can’t (who would it borrow from – aliens?). The buildup of debt is a result of the financialization of the economy, growing income inequality, concentration of wealth on Wall St., and in London and Frankfurt,… Read more »
Anonymous
Guest
Anonymous
3 years 11 months ago

oh, it’s almost Christmas and silly bears are still here debating RE? Dont you have someone you can go and buy presents for? Dont you have parties that you plan to attend? Your prediction is just as good as the Mayan calendar. Have a very Merry one, silly bears. HOHOHO

The wired astrologer
Guest
The wired astrologer
3 years 11 months ago

Astrology newscast.

The much anticipated Year of the Water Dragon (2012) has been renamed the year of the Coughing Dragon, due to the economic slowdown in China induced by the Water element balancing the Dragon’s Fire.

The Year of the Water Snake will start on February 10, 2013. A Snake in the House means your family will starve. It also means delusion and deception. Your top priorities should be saving and being thrifty.

If you live in Vancouver, these are clear messages that you should stay away from the housing bubble.

Reference: http://www.springsgreetingcards.com/catalogs/store.asp?pid=256628

bubbly
Member
bubbly
3 years 11 months ago

More fundamentally, the financialization results from a monetary policy in which governments refuse their duty to provide enough currency for the economy to function at full strength, so money must be borrowed into existence to make up the gap.

This is just so unbelievably wrong…

patriotz
Member
3 years 11 months ago

Anyone else getting an ad from wonga on this website? The loan sharks are circling. As with other ads, I think this site is targeted simply because it deals with RE.

gokou3
Guest
gokou3
3 years 11 months ago

“there are very severe and very painful consquences to having a society which lives way beyond its means for a long period of time.”

And that means war, unfortunately.

b5baxter
Member
3 years 11 months ago
UBC in Crisis Mode
Guest
UBC in Crisis Mode
3 years 11 months ago

yvr2zrh Says:
“That being said – if UBC were to hire a professor to come here on a permanent basis, in order to make them whole on housing, you would likely need to offer a 1.5 million signing bonus, which would be taxed, and from which they would have enough to get into the housing market at the level which they are accustomed to. If this city continues as it is for the next 20 years, we will have no more city.”

The plan to save the university (no good prof wants to come):
http://hap.ubc.ca/reference-documents/blog-2/

Bull! Bull! Bull!
Guest
Bull! Bull! Bull!
3 years 11 months ago

yvr2zrh and VMD are the only posters worth reading on this blog.

Some Guy
Guest
Some Guy
3 years 11 months ago

@10 bubbly, “This is just so unbelievably wrong…”

Wow, you really convinced me. Great counter-argument…

patriotz
Member
3 years 11 months ago

“The plan to save the university (no good prof wants to come):”

These home ownership “assistance” plans were all the rage in the US at the top of the bubble and it’s not hard to figure out how they turned out.

The solution to high prices is lower prices. In the meantime, the university can build housing on campus and rent it out at market rates, no taxable benefit would result.

Many Franks
Guest
Many Franks
3 years 11 months ago

Rob McLister reports that Genworth has had its insurance cap lifted from $250B to $300B, probably targeting a small revival of the kind of bulk insurance that has totally dried up this past year due to CMHC nearing its own cap. I doubt it’ll make much of a difference, particularly here in Vancouver, as Genworth has got to be watching things pretty closely.

Anonymous
Guest
Anonymous
3 years 11 months ago

Re. #10

“This is just so unbelievably wrong…”

YES!! And if you don’t believe it, here is a dramatization of bubbly’s powerful argument:

http://www.youtube.com/watch?v=NJjZ7Z05f5c

Yalie
Guest
Yalie
3 years 11 months ago
Most of the world’s elite universities are located in cities with high property prices – New York, Boston, San Francisco, etc. The problem is that UBC, though highly regarded, is still a second tier school compared to Harvard, Stanford, Columbia, etc. Those universities attract the top end of elite academics who are willing to pay a little more for housing in exchange for a seat at a top school. Although UBC would like to think it’s one of the world’s elite institutions, its real competition for talent is with second-tier, mostly-public schools like Michigan, UT Austin, Penn State, etc. And… Read more »
Anonymous
Guest
Anonymous
3 years 11 months ago

Here is a little something for you bears might enjoy. A real estate broker resorts to working as a Las Vegas call girl:

http://tracking.si.com/2012/12/20/suzy-favor-hamilton-las-vegas-escort-olympian/?hpt=hp_t3

gokou3
Guest
gokou3
3 years 11 months ago

Re #21: That is certainly a more respected profession 😉

bubbly
Member
bubbly
3 years 11 months ago

@Some Guy:
You are confused. I wasn’t presenting an argument. I just said that what you wrote is wrong.
If you said that your car is powered by unicorns, I would also just say that it was wrong. No arguments necessary…

RFM
Guest
RFM
3 years 11 months ago
It’s worse than it may appear. I monitor completed condo buildings to see how the final sales numbers worked out. In summer 2011 (yes, 2011) Rize Alliance Properties Ltd completed a 48-unit condo building at 2511 Quebec Street in the South Main/Mt. Pleasant neighborhood. Promotional materials at the time made it appear the development was sold out or close thereto. Throughout 2012, there were always 5-7 units listed for sale on the MLS by the developer, although there are none listed at this time. However, based on very reliable information, it appears the developer actually has 14 units unsold, all… Read more »
Devore
Member
Devore
3 years 11 months ago

“While I generally agree with you about the huge debt build-up, and the problems we face because of it, I wanted to clarify that while a household can live beyond it’s means (by borrowing from someone else), a society can’t (who would it borrow from – aliens?).”

WE all pay for it. WE become poorer, so WE can keep borrowing. Lower wages, higher taxes, lower standard of living.

Harry Wang
Guest
Harry Wang
3 years 11 months ago

Vancouver is a unique and special place where the impossible is possible…

“Only in Vancouver could this happen in the same day”
http://www.reddit.com/r/vancouver/comments/157am4/only_in_vancouver_could_this_happen_in_the_same/

patriotz
Member
3 years 11 months ago

“second-tier, mostly-public schools.. And most of them are located in smaller cities with much lower house prices.”

And some of them are located in bigger cities with much lower house prices. Like Seattle.

Left already living in San Diego
Guest
Left already living in San Diego
3 years 11 months ago

Long time I haven’t checked in here.
How is life in the best place on earth?
Are you still skiing in the morning and golfing in the afternoon on the best place on earth?
Today I had to put the heat on here in my San Diego house, temperatures came down to 18 degree C, burrrrrrrrrrr so cold and I had to wear my pants instead of my shorts, I guess winter is finally here. Happy holidays!

Some Guy
Guest
Some Guy
3 years 11 months ago
@28 Devore “WE all pay for it. WE become poorer, so WE can keep borrowing. Lower wages, higher taxes, lower standard of living.” This is just so unbelievably wrong! 🙂 But seriously, who are WE borrowing FROM? Not everyone is becoming poorer (hint: look up) Not everyone is paying higher taxes Not everyone has a lower standard of living Some people (look way up) are on the receiving end of (most of) the interest on the mountain of debt. There is no WE when it comes to debt, there is a lender and a borrower. ‘Down here it’s just winners… Read more »
HAM Solo
Guest
HAM Solo
3 years 11 months ago
Thinking a bit more about Genworth regulator changes. One gets the feeling that the files are being handled differently between the CMHC and MIC regulators. My main inclination is that it is too late to goose the market in any material way. The price declines underway will cause capital to shrink from lending into Canadian residential real estate…in fact all the changes being announced by banks will act with a lag. In this event, the last thing you want to do as a lender is to grow market share in a collapsing market where the collateral is overvalued and falling… Read more »
Anonymous
Guest
Anonymous
3 years 11 months ago

Re. Left already living in San Diego

To each his own. I’m looking forward to a winter of skiing practically in my backyard. I hate temperature over 25 degrees almost as much as I hate golfing, and lounging on the beach is about as appealing to me as chewing on aluminum. Wouldn’t mind paying San Diego RE prices though.

Anonymous
Guest
Anonymous
3 years 11 months ago

“…..I hate temperature over 25 degrees almost as much as I hate golfing, and lounging on the beach is about as appealing to me as chewing on aluminum…..”

There you go! Proof that a wet climate promotes mold induced brain degeneration. No wonder prices have gone so insane if handicapped folks like this are the buyers.

oneangryslav2
Guest
oneangryslav2
3 years 11 months ago
@ #3–yvr2zrh: “If this city continues as it is for the next 20 years, we will have no more city.” I completely agree. As I stated in a post a few weeks ago, the negative externalities of high real estate prices is what worries me. Nobody is saying that a working-class couple should be able to afford to purchase a home in Shaughnessy, but real estate prices are so high relative to incomes that a host of attendant social ills is being visited upon this city. It may not be immediately apparent to many why the inability for UBC (and… Read more »
paulb
Member
3 years 11 months ago
New Listings 64 Price Changes 28 Sold Listings 53 TI:14619 Merry Christmas and happy holidays to you all!! I’ve had the pleasure of working with (or been referred by) a number of VCI members this year. I really enjoy meeting people from VCI, some which have been following the housing blogs for as long, or longer than I have. I plan to reintroduce some housing stats to my website this year… Perhaps weekly and monthly tables with the daily numbers posted here? Any ideas would be appreciated. I want to add value to our community but not overburden myself (have… Read more »
Groundhog
Guest
Groundhog
3 years 11 months ago

Thanks Paul,

I don’t know if you get hassled at all for giving these daily #’s, but transparency is where the industry is going to be moving to after this whole thing plays out. I really despise the MLS and industry for being secretive with the data. Realtors like yourself will do just fine, whatever happens.

Boris
Guest
Boris
3 years 11 months ago

@paulb

congrats on new baby. that is great news. marry christmas.

Best place on meth
Guest
Best place on meth
3 years 11 months ago

Happy holidays and New Year to you Paul, and thanks for everything you’ve done here.

Congrats on the little one too, although I would caution against naming it #3 as nice as is sounds.

Take care man,

BPOM

vangrl
Member
vangrl
3 years 11 months ago

Congrats Paul on your new addition! Thank you so much for your daily stats, very much appreciated.

Merry Christmas and Happy New Year to you and your family!

vangrl
Member
vangrl
3 years 11 months ago

BPOM you kill me:)

Burbs Boy
Guest
Burbs Boy
3 years 11 months ago
From an often lurker, seldom poster… Thank you Paul for your consistency and valuable contribution. I too believe that there will be many realtors who will weather the upcoming storm quite fine. I have been on the house hunt for a while now (sadly quite far away from Paul’s area otherwise I would most likely be contacting him) and I am struggling to find a good real estate agent who is really able to contribute to any meaningful analysis of any of the places I have looked at. At the price range I am looking at (~$800,000) all I seem… Read more »
vangrl
Member
vangrl
3 years 11 months ago

Burbs Boy : “I have been on the house hunt for a while now (sadly quite far away from Paul’s area otherwise I would most likely be contacting him)”

don’t want to speak for Paul, but maybe he’d be willing to house hunt in the burbs for you. Specializing in one area doesn’t necessarily mean they are restricted to only that area.

ReadyToPop
Guest
ReadyToPop
3 years 11 months ago

Feds OK another $50-billion of mortgage guarantees for private-sector players

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I’ll just leave some lines for Patriotz to fill in…. 🙂

VMD
Member
3 years 11 months ago

Thanks paulB!!

Est Dec Sales: -33% YoY, -34% MoM

Total Inventory (vs last year)
Dec 20, 2011: 12937
Dec 20, 2012: 14749 (+14% )

Est Month-end MOI: ~12 (was 9.3 last month)

Looking ahead to Jan 2013, if TI maintains +14% YoY:
if sales -15% YoY, Est. MOI=10.7 (vs 8.0 Jan/12, 5.7 Jan/11)
if sales -20% YoY, Est. MOI=11.3
if sales -25% YoY, Est. MOI=12.1

MM
Guest
MM
3 years 11 months ago

@32: There you go! Proof that a wet climate promotes mold induced brain degeneration. No wonder prices have gone so insane if handicapped folks like this are the buyers.

Many people around here like winter sports and cooler climate, just personal preferences.

VHB
Member
VHB
3 years 11 months ago
Dec-2012	
Total days	19
Days elapsed so far	15
Weekends / holidays	6
Days missing	0
Days remaining	4
7 Calendar Day Moving Average: Sales	62
7 Calendar Day Moving Average: Listings	66
SALES	
Sales so far	953
Projection for rest of month (using 7day MA)	246
Projected month end total	1199
NEW LISTINGS	
Listings so far	1215
Projection for rest of month (using 7day MA)	265
Projected month end total	1480
Sell-list so far	78.4%
Projected month-end sell-list	81.1%
MONTHS OF INVENTORY	
Inventory as of December 21, 2012	14619
Current MoI at this sales pace	12.19

We’re likely to hit like 1150 for sales. That’s remarkably bad. Listing activity low too, though.

year	sell	list	sell/list
2001	2394	1856	129.0%
2002	2205	1895	116.4%
2003	2434	2301	105.8%
2004	2065	1764	117.1%
2005	2332	1735	134.4%
2006	1686	1524	110.6%
2007	1897	1695	111.9%
2008	924	1550	59.6%
2009	2515	2153	116.8%
2010	1899	1699	111.8%
2011	1658	1629	101.8%
Mean	2001	1800	111.2%
median	2065	1735	114.1%

Thanks to paulb for all that he does. Congrats on #3.

VHB
Member
VHB
3 years 11 months ago

..and if I’m handing out the kudos, then I suggest, ladies and gentlemen, that you give it up for the proprietor here at VCI: THE POPE.

Wow, your work is appreciated. Sorry for all the troubles the spammers and trolls are giving you.

trackback
[…] “I was at a party last night. Some interesting local celebs were there as well as some normal people (like me). One was a young professor from UBC. They are from out of town and are quite open to both renting and leaving town in the mid-term as it does not make sense to own here. They also commented that the University has had little success in attracting talent from outside Vancouver to fill top-level positions. Let’s say you want to hire a new dean of Science. You have found a 48-year-old who is at the top of the… Read more »
patriotz
Member
3 years 11 months ago

“I’ll just leave some lines for Patriotz to fill in….”

Can’t improve on this guy:
http://www.prefblog.com/?p=20667

Yes, here in Canada, lenders can freely compete to see who can suck arse in Ottawa enough to get mortgage guarantees.

No Noise
Guest
No Noise
3 years 11 months ago
VMD
Member
3 years 11 months ago

@#49 I posted that link on the new Saturday thread that’s appearing and disappearing.

As a follow up: another article today on G&M:
Confidential government documents reveal concerns about mortgage lending in Canada

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