Betting on a housing market collapse

Some people express a lack of faith in current house prices by delaying buying or moving to better economic climates.

Others might make a friendly wager with a co-worker that house prices will be lower in 2014 than they are in 2013.

But how confident are you that a market correction will occur not just in Vancouver, but all across Canada?

And even if the national market corrected sharply do you think that would have much impact on our banks or would CMHC insurance protect them from any dramatic losses?

Do you really think a housing market crash would have as much effect on our economy as it did in the USA?

Would you be willing to bet 95% of your assets on the likelyhood of such an occurrence?

Vijai Mohan has made an all-in bet against Canada.

The founder of a small San Francisco-based hedge fund called Hyphen Partners LP has staked 95 per cent of his investors’ assets on a wager that the country’s housing market and banking sector are about to come apart at the seams. Mr. Mohan has amassed large short positions on Canadian bank shares and the loonie, betting their values will fall sharply.

“Canada faces two risks,” said Mr. Mohan in an interview. “Very few people are looking at those risks simultaneously. That collectively presents a lot of opportunity” – for someone looking to profit from Canada’s misfortunes.

Read the full article over at the Globe and Mail.

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patriotz
7 years ago

“how do you know the rental market wouldn’t be even lower if it wasn’t for the foreign students?”

Of course the rental market would be lower if there were no foreign students.

The thread was started by someone claiming that high RE costs were due to “undocumented” population growth due to “underground” foreign students and temp workers. My point was that the rental market is not consistent with these claims of “undocumented” growth.

High RE costs are due to easy credit just like every other bubble.

VanRant
VanRant
7 years ago

Just watched the CBC documentary on “The Monarchs of Money”. Bravo for CBC for coming out and expose the gang (of Central Bankers) who has (or will) destroy the Western Economies through their war on savers thus creating bubbles everywhere. Be-afraid, very afraid.

YLTNboomerang
7 years ago

Anonymous,

I’m with a fee based advisor, 1% with minimum 250K. I manage half my assets and the advisor the other half; if he does significantly better than me I give him more, if he does worse I take funds back. The general trend has been me sending more over for management.

YLTNboomerang
7 years ago

@squeako

We rent in a small townhouse complex with central hot water heat and guess what, one of the boilers blew up today…good thing the weather forecast is warm and that this major cost for the. Complex will not impact us whatsoever. The strata has a contingency to cover this but it looks like strata fees are going to go up now.

Aggregator
Aggregator
7 years ago

I’m not sure what sellers are waiting for, cause by the looks of this chart, Van’s market will continue declining in double digits for the rest of the year. http://i.cubeupload.com/fKGQjc.png

Remember after denial comes fear and panic selling. No soft landing here.

Anonymous
Anonymous
7 years ago

McLovin: “He makes a % usually around 1-1.5% of the total acct value on an annual basis.”

Most will require minium $1 million plus invested to to get a fee of 1% to 1.5% plus you pay the ETF fees for guys like Garth who use ETFs.

Just buy your own ETFs and save the fees. You can read Garth’s blog for free to see what he invests in.

crashcow
7 years ago

“Bryce Wagoner’s documentary, “After Porn Ends,” interviews a variety of ex-porn stars to find out how they transitioned from adult video stardom to more mainstream lives. Real estate seems to be the preferred profession for a lot of them”

Nuff said.

Amanda Li
Amanda Li
7 years ago
crashcow
7 years ago

@ #27 Starving Artist

I hope a 50DMA is not all you’re using…especially when you’re in a leveraged ETF!

mclovin
mclovin
7 years ago

You are right in the advisor gets paid the same but the client pays a lot less with fee-based.

For clarification, the deductibility only applies to non-registered funds.

mclovin
mclovin
7 years ago

Groundhog: I am not sure that is true.

The tax deductibility of a fee based acct vs a commission based acct is a huge plus. Two identical fees and one is deductible means one is up to 40% lower.

Groundhog
Groundhog
7 years ago

Fee based and non-fee based typically work out in the end to clients paying the advisor identical amounts. Main difference is in the transparency.

mclovin
mclovin
7 years ago

“how that investing with Garth works? Do you pay fee to him? Do you pay another fee for funds that he recommend? Does the fee depends if you make money or not? What if you don’t make money? Does Garth pay you back or he just apologize if you loose money?” I think Garth is a fee based advisor. He charges a flat fee (that is tax deductible unlike mutual funds MER and trailer fee) and buys his clients a collection of ETF’s and maybe stocks. There is no fee to buy or sell in these accounts. He makes a % usually around 1-1.5% of the total acct value on an annual basis. These accts are becoming more popular as the all in fee after deduction is usually less than 1%. He only makes more money if he grows the… Read more »

Aggregator
Aggregator
7 years ago

Does anyone realize that April will be the 18th consecutive YoY sales volume decline for Van?

gokou3
gokou3
7 years ago

Just got an email from Rennie marketing promoting some CALGARY developments. I never mentioned I am interested in anything out of the Lower Mainland. Are they desperate or what?

Ok...
Ok...
7 years ago

“So I think it’s safe to say that those foreign students and temporary worker have either gone home or bought their own residences.”

how do you know the rental market wouldn’t be even lower if it wasn’t for the foreign students?

Waiting to exhale
Waiting to exhale
7 years ago

@#21 Yellow Helicopter says: ” So still lots of interest for anything that is reasonably priced under $800k.”

That statement is a perfect example of what is wrong with this market. A house like that for under $800k is not reasonably priced. Unfortunately, this thinking has been embedded in a typical Vancouverite’s psyche. In 99% of the housing markets in the world people would laugh in your face if you thought that house is “reasonably priced” for under $800K.

This market is not only due for a correction but is also NEEDS it.

jesse
7 years ago

” If you are in a caucasian section of the city”

Your ignorance is showing…

Bigdaddy
Bigdaddy
7 years ago

Turner is just a schill for the banks.

Nothing original comes out of his mouth. He knows the crash is a coming and is herding those that will listen into his stalls to collect for the bankers.

emmi
emmi
7 years ago

@Starving Artist RE: Garth’s call on bank profits.

Flip a coin. Will CMHC be used as a stealth bailout like they have been in the past? Or will they be used as a regulatory mechanism? No way to know until it happens.

If I could make this call, I’d buy a few shorts.

patriotz
7 years ago

What we do know is that the rental market has been weakening over the last few years. So I think it’s safe to say that those foreign students and temporary worker have either gone home or bought their own residences.

Ok...
Ok...
7 years ago

“It is documented, unless you think these people are slipping through the border without going through passport control. You can find the data through statscan and CIC, that track short stay, visitor, permanent, and TFWs/students.”

So the government knows who has left the the country? I didn’t go through Canadian customs last time I flew out of yvr… Did u?

Ok...
Ok...
7 years ago

“YoY HPI declines (you know, the ones that smooth out seasonality) are there for all to see”

Yeah, but they don’t show a bubble bursting……

Huh?
Huh?
7 years ago

Hmmm…

Anonymous
Anonymous
7 years ago

Wut?