FFFA! mortgage rates and buyer fatigue

It’s that time of the week again!

The end of the week is when we do our regular news round up and open topic discussion thread for the weekend. Here are a few recent links to kick off the chat:

Young Canadians pessimistic about owning
10th best large city in Canada
Inventory graph updated
Canada plans limits of mortgage insurance
Feds ok $50b for private mortgage guarantees
40 most expensive on the sunshine coast
Tough challenges for Richmond sellers
Debt man lectures on debt
The price of luxury defecation
Something rotten in the state of Denmark

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

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Guest
backwardsevolution
2 years 10 months ago

Re your Denmark story – ouch! “Denmark’s $590 billion mortgage industry — which is about twice the size of Denmark’s economy — in 2003 started giving borrowers the option of deferring amortization for as long as a decade. The interest-only mortgages were popular, and have since grown to account for 56 percent of all outstanding home loans, according to the Association of Danish Mortgage Banks. The central bank has criticized the loans, arguing they inflated a housing bubble that plunged Denmark into a recession. The mortgage industry wants the government to approve a plan that would allow homeowners to treat… Read more »

patriotz
Member
2 years 10 months ago

One glaring flaw in the Moneysense survey is that it ranks each incorporated municipality as though it were a stand alone urban area. So the District of North Van ranks 8 and the City of North Van across the street ranks 24 among “small cities”. CoV is ranked as a big city, Burnaby across the street is ranked as a medium size city, and New West across another street is ranked as a small city (3 places below Whitehorse). And Surrey across the bridge is ranked as a big city again. Clearly the comparisons have to be done on a… Read more »

Guest
Q
2 years 10 months ago

A judge is ordering a family to vacate and sell their condo within 30 days! The family violated strata rules and racked up $20,000 in strata fines for making too much noise, slamming doors, spitting on neighbours and throwing a bucket of water at a woman when she was sitting on her balcony with her cats. The case made it to the courts and now the BC Supreme Court is ordering the family to vacate and sell within 30 days. What happens if they can’t find a buyer within 30 days? The way the story is worded in the Vancouver… Read more »

patriotz
Member
2 years 10 months ago

“But do judges even know that condos have gone illiquid and may not be able to sell within 30 days.”

I’ve got a hundred grand that says they can sell it today.

patriotz
Member
2 years 10 months ago

Sorry, I didn’t notice it was Surrey. Fifty grand.

:-)

Guest
Many Franks
2 years 10 months ago

@backwardsevolution: The Little Dutch Boy is wondering what the hell you put him in Denmark for.

Guest
Q
2 years 10 months ago

A man in Alberta is selling his house for bitcoins!

http://business.financialpost.com/2013/03/21/canadian-bitcoin-house-for-sale/

Guest
Many Franks
2 years 10 months ago

For those who haven’t been following, Jim Flaherty has been taking an absolute drubbing in the popular press over the Manulife mortgage meddling mobilization:

Jim Flaherty adds $150B to national mortgage, then lectures on evils of too much debt
Under attack, Jim Flaherty defends mortgage meddling
…and many others.

Say what you want about the actual impact of this, but the papers smell Irish blood. (It’s peaty.)

Guest
Anonymous
2 years 10 months ago

Q Says: “The pair was ordered to vacate and sell their condo within 30 days. If they fail to give up the condo, the judge said, they will be arrested for contempt.”

Remember it is a news paper reporting this. Take accuracy with a grain of salt. Likely the judge ordered them to vacate and put the place up for sale within 30 days. A little different from ‘sell’. But who knows maybe they pissed the judge off and he/she wanted to stick it to them.

Guest
Democrass
2 years 10 months ago

” throwing a bucket of water at a woman when she was sitting on her balcony with her cats”

Doesn’t the judge have a sense of humour? That’s funny stuff! :)

Guest
Anonymous1
2 years 10 months ago

Almost April and no correction in the low end SFD. Building Lot prices remain at record levels. When and if those start going down in price will I know that a true correction has arrived.

I’m not interested in condos, townhomes, or >$1 Million homes.

Guest
Just looking...
2 years 10 months ago

Re: pessimistic young Canadians: The story seems to imply that the main driver of Un-affordability is the “new” (aka old) rules around credit availability. It was odd to me that lower prices was not mentioned as a possible solution. This is like complaining about high gas prices and saying the solution is to get credit card companies to increase credit limits and give gas buyers a slight break in their interest rates. In both cases the long term effect is that the consumer pays more and the banks win. Some media outlets have begun to question this, but most don’t… Read more »

Guest
Just looking...
2 years 10 months ago

I just thought of a possible solution: the VCI ThinkTank. Once a week, pump out a new analysis as a press released dry week. CP mostly just re-publishes press releases anyways. There is easily enough intellectual horsepower to do this. Just need some folks willing to out themselves in a public forum. A couple hundred buck could incorporate a not-for-profit…I’d chip in for costs, but I’m not an analyst. The news people are hungry for stories about RE – that’s why they reprint all the RE industry bs: it’s a volume game. Throw enough $h!t at the wall and some… Read more »

Guest
Yalie
2 years 10 months ago

It was odd to me that lower prices was not mentioned as a possible solution.

But of course we all know why. Home ownership rates are 70% in Canada, and probably higher for media editors (who decide what gets published) and politicians (who make the rules).

Few people are immune to the “get rich without actually working” meme.

Guest
Apocarypse Mao
2 years 10 months ago

@12 Just Looking.

Reminds me of some comment I read in the MSM about Mayor Robertson’s affordability task force. Something to the effect of ‘everyone wants prices to come down without prices actually coming down.’

Guest
Barb Rennie
2 years 10 months ago

Did anyone notice the announcement from Flaherty that Canada will be vigilantly going after international tax cheats? Is that not huge? The last few years the government has been turning a blind eye to immigrants living in multi-million dollar homes driving luxury cars declaring income at poverty levels collecting every social services available to their kids and grandparents. In fact, I hear that tipsters will be rewarded. If this indeed becomes practice, you will see these immigrants giving up their permanent residency or citizenships rather than paying annual taxes. That is what is happening in the United States right now.

Guest
Burrrp Rennie
2 years 10 months ago

Drive-In cinemas don’t exist anymore.
Horny young people need to buy shoe box size
condos to get laid.

Guest
JustSaying
2 years 10 months ago

Are there any “ethical hackers” among bears?
Did anybody consider to expose real estate database to the public?
IMHO it is unethical to withhold an information about RE prices from buyers.
Bring Zillow to Canada!

Guest
Anonymoose
2 years 10 months ago

If you have a real estate agent, they can give you access code to MLS site that gives you more detail; how long homes were listed for, price drops, and final sales prices.

VMD
Member
2 years 10 months ago

As expected, Top Headline at major Chinese newspaper MingPao today:
“CRA To Crack Down on Tax-Evading Astronaut Families”
– major rewards given for successful tipsters
– astronaut families getting anxious, worried that Canada is following US footsteps to crack down on international tax evasion.
via google translate

Member
space889
2 years 10 months ago

@JustSaying – Those data are collected by RE Board members and compiled by them, why should they be required to disclose those information for free? If you want to know those info, you can either buy it from them if they are willing to sell, or collect it yourself. Go to the title office, talk to the seller/buyer and ask them for it. I don’t see why it’s ethical to force private company to disclose their priorietary info that they spend money collecting and analyzing. To make an analogy, is it unethical for your employer to withhold all employee’s salary… Read more »

Guest
Many Franks
2 years 10 months ago

Unfortunately the CBC seems to have done an exceptionally poor job communicating Andy Yan’s recent stats.

Downtown Vancouver condos left empty by foreign owners

Nearly a quarter of all condos in some parts of downtown Vancouver area are empty or occupied only part of the year by non-residents, according to data from the 2011 census data.

That’s a hell of a strong headline and first paragraph, from which a casual reader might easily misunderstand that “nearly a quarter of downtown Vancouver’s condos are owned by foreign investors.”

Guest
2 years 10 months ago

CANADIAN BUDGET: Employment Opportunity Edition

Need extra income to pay that mortgage?

Please report to your nearest retraining camp to have your mismatched skills realigned.

Flaherty, Harper & friends “… plan to leverage billions in spending on military equipment into making Canada an arms exporter.”

As I point out, Canada is currently ranked 15th in arms sales, so there is lots of room to the upside.

Press outlets are starting to amplify the story; I have charts and a few choice quotes here:

http://www.chpc.biz/2/post/2013/03/canadian-budget.html

Guest
Burbs Boy
2 years 10 months ago

Just Saying: hack MLS As much as I hate to say it… they collect, collate, and store the data. It is their data to do what they wish with. There is access to the data but you have to play their game and use their sales channel. Companies have used Marketing crap like this for years.. and one by one they are crashing as the new information age destroys existing models. MLS will be no different and it won’t need hackers to make it happen… there is gold in them thar digital hills that some entrepreneur will capitalize on sooner… Read more »

VMD
Member
2 years 10 months ago

@24
We do have quite a few “Anonymous” members here don’t we? ; )

Ok, now Top Headline from another major Chinese newspaper SingTao:
“Anti-Tax-Evasion Program Offers Significant Rewards; Immigrant Families will be In Trouble”
– a Chartered Accountant said, this new anti tax evasion rewards program will have Major impact to immigrant families, especially ones from China, Hong Kong, and Taiwan.

(I wonder if some accountants will rat out their clients (anonymously of course) to rake in some nice bounty)

Member
Sold2Soon
2 years 10 months ago

It was a pleasant surprise to see the Vancouver Sun actually comparing two $4 Million dollar properties; one in Vancouver and one in Roswell, Georgia. And what a stark comparison it is!

http://www.vancouversun.com/business/real-estate/Real+estate+Vancouver+Roswell/8135113/story.html?cid=hot_photo

Guest
JR
2 years 10 months ago

I’ve been following some condo prices in the FV since it’s a low price market for first time and young suckers er I mean buyers. In a nice building with units in the 1200sqft range prices have dropped since Nov 1, this is less then 5 months ago, 5-11%. In a few other buildings I follow I have incomplete data but the floor has basically fallen out, there is nothing stoppimg price drops. Some might not care about the FV, but as things deteriorate there it will work it’s way towards Van proper.

Guest
coast capital customer
2 years 10 months ago

I went to coast capital savings to see how much of a mortgage I can get. I’ve been banking with them since I’ve had my paper route in my early teens, and have the direct deposits from my full time job for the past 7 years going into my account there. Before they can give me a firm number on what I qualify for they asked to see my Tax Assessment form. Pay stubs are not good enough. This echoes things I’ve heard since the Finance Minister tightened rules. They don’t want to see how much you make, they want… Read more »

Guest
JustSaying
2 years 10 months ago

#21 @space889
That’s funny that you took a salary info as an example.
Because my salary IS publically available information.
You can look it up at Vancouver Sun web site.
I wonder why US home owners are not filing complains about Zillow which makes this “private info” available to everybody.

Guest
JustSaying
2 years 10 months ago

#24 @Burbs Boy

I’m not sure why you think I was referring to MLS database. I’m interested in BC Assessment data or whatever other government authority has a histical data about actual sales in the region. That’s kind of data we need to track actual price changes.

jesse
Member
2 years 10 months ago

Coast Capital is not overseen by OSFI, they are complying under BC regulations. They had claimed they would pretty much align with B20, but they don’t have to.

Guest
gokou3
2 years 10 months ago

“I wonder if some accountants will rat out their clients (anonymously of course) to rake in some nice bounty”

I can’t see why any personal tax accoutnants will NOT rat out their clients (double negatives). How much can they make per T1 return? How much can they potentially get if the client gets busted?

patriotz
Member
2 years 10 months ago

What makes you think that people with undeclared foreign income would be disclosing it to local accountants in the first place? “Mt. Accountant, just between you and me I make $200K/year in China. Don’t tell the taxman.”

VMD
Member
2 years 10 months ago

@33 patriotz
I wouldn’t be surprised if some accountants and mortgage advisors are complicit in their clients’ tax evasion. Many even brag openly about duping the government to receive low income benefits while living in mansions and driving 100k+ cars. We can expect certain public displays of wealth will be toned down following the tipster rewards program. Not gonna be positive for local luxury car dealerships.

Guest
Bull! Bull! Bull!
2 years 10 months ago

VMD is right as usual.

Member
Best place on meth
2 years 10 months ago

“As expected, Top Headline at major Chinese newspaper MingPao today:
“CRA To Crack Down on Tax-Evading Astronaut Families”
– major rewards given for successful tipsters
– astronaut families getting anxious, worried that Canada is following US footsteps to crack down on international tax evasion.”

Well, if anyone would know who these offshore tax cheats are it’s our local, law abiding Chinese community.

Let the phone calls to CRA begin!

Rewards for everybody!

chilled
Member
chilled
2 years 10 months ago

patriotz patriotz Says:
March 22nd, 2013 at 3:21 pm

What makes you think that people with undeclared foreign income would be disclosing it to local accountants in the first place? “Mt. Accountant, just between you and me I make $200K/year in China. Don’t tell the taxman.”

++++++++++++++

Exactly! I think one would be hard pressed to find an accountant willing to participate in any sort of tax fraud. Accountants aren’t realturds, they are educated and follow professional codes of conduct.

VMD
Member
2 years 10 months ago

Just checked, WorldJournal Chinese newspaper also put the tax evasion tipster program on its front page headline.
The fact that ALL major Chinese newspapers simultaneously chose the topic of international tax evasion to be their headline article speaks volumes about the importance/prevalence of this issue.

Guest
eagle eyes
2 years 10 months ago

Once a few stories float around within the immigrant community that a friend of a friend they know got in trouble due to tax evasion, the Chinese will be fleeing the Country. Richmond will be a ghost town with unwanted homes and dim sum restaurants shuttered, and Vancouver will have sea of real estate signs and (god forbid) no more lamborghinis on the road. Are there any blog dog Chartered Accountants here who can answer whether the fear is actually founded? Do permanent residents, immigrants, or citizens actually have to pay CRA tax based on worldwide income or is it… Read more »

Guest
Democrass
2 years 10 months ago

Canadian residents are taxed on their world wide income. Non-residents are not taxed in Canada.

Guest
Democrass
2 years 10 months ago

Here is a lesson on the residency requirement in Canadian tax law in a nutshell from the most recent Supreme Court of Canada decision on the issue: As Sharlow J.A. in the Federal Court of Appeal explained, the principal basis for imposing income tax in Canada is residency (para. 52). Professor V. Krishna in The Fundamentals of Income Tax Law (2009), noted, at p. 85, that the policy reason for this is to ensure that a person who enjoys the legal, political and economic benefits of associating with Canada will pay their appropriate share for the costs of this association.… Read more »

Guest
Anonymous
2 years 10 months ago

Re: tax evasion tipster program:

I report three, husba report three.

Guest
Anonymous
2 years 10 months ago

MLS®: V984752
For Sale: $2,888,888

Someone should inform this owner that HAM started packing up yesterday evening…

Guest
eagle eyes
2 years 10 months ago

Democrass Says:
March 22nd, 2013 at 5:34 pm
“Canadian residents are taxed on their world wide income. Non-residents are not taxed in Canada.”

How about non-residents with real estate property in Canada? receiving OAS/GIS? returning once a year for health care? children under 17 going to school in Canada? how is this line drawn?

Guest
Just looking...
2 years 10 months ago

But I thought that all wealthy immigrants were humble contributors to Canadian prosperity! They are investors who drive the opportunity in our economy and deserve the esteem of all Canadians. Surely there is no need for rash and divisive or even racist actions like the enforcement of tax laws. Is there? Back in reality: its interesting that an accountant would be so blunt in saying this will have a bog impact. The response of the Chinese language media makes it seem to me like tax evasion is just an accepted part of the culture for some imigrant communities. When I… Read more »

paulb
Member
2 years 10 months ago

New Listings 169
Price Changes 106
Sold Listings 121
TI:16398

http://www.paulboenisch.com

Guest
Democrass
2 years 10 months ago

“How about non-residents with real estate property in Canada? receiving OAS/GIS? returning once a year for health care? children under 17 going to school in Canada? how is this line drawn?” The person you describe is not a non-resident of canada for tax purposes. People like this, who have a “habitual abode” in two different countries will be treated by tax law to be residents of Canada for tax purposes. The tax treaties between Canada and its treaty parters have tie breaker rules to determine where a person is resident for tax purposes if he is a resident in both… Read more »

Guest
Xyz
2 years 10 months ago

Is it just me….or are listings really low?

What happened to the 300 a day listings from days gone by?

Has seller speculation left the building?

Looks like a breaking point of some sort.

Guest
Barb Rennie
2 years 10 months ago

So, if an immigrant stays in Canada for a certain amt of years, the kids get a Canadian education, family becomes Canadian Citizens, then elects to return to say Hong Kong, China, or Taiwan and declares non-residency, they will then not be subject to pay income tax in Canada? Doesn’t seem fair. Basically they would have sucked Canada of education costs, medical care costs, enjoyed all the benefits of a family’s developing years, then leave? Talk about wham, bam, thank you ma’am.

jesse
Member
2 years 10 months ago

My quick analysis shows sales growth inline with past years; at least so far sales are not growing as they did in 2009. More evidence that things are going to be soft for the next while.

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