Friday Free-for-all! Luxury Credit.

You made it to the end of another work week, and that means it’s time to do our regular Friday Free-for-all post here at VCI.

This is our end of the week news round up and open topic discussion thread for the weekend.

Here are a few recent links to kick off the chat:

Price changes and credit (graph)
Why so many doomers?
High prices raise debt levels
Perspective on foreign buyer levels
3rd try for Versace in Vancouver

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

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tedeastside
Member
tedeastside

it will close in a year, Versace should just sell Real estate in vancouver,
the Real estate mad city

Aggregator
Guest
Aggregator

BREAKING NEWS: Vancouver Aquatic Centre will be moved to new condo unit.

OV
Guest
OV

a south surrey teenager laments the impact HAM has had on his neighborhood.

http://www.reddit.com/r/vancouver/comments/2cx0kj/the_continuing_corruption_from_beijings_dirty/cjk7ks6

southseacompany
Member
southseacompany
“Why the low-interest-rate trap is worrying: Mayers”, Toronto Star http://www.thestar.com/business/personal_finance/2014/08/04/why_the_lowinterestrate_trap_is_worrying_so_many_money_managers.html “Cheap-money policies encourage people to borrow and spend rather than save.. That eventually creates inflation and bubbles. When too much money chases the same thing, prices rise.” “You can see bubbles forming, but the point at which they burst is only obvious after the fact. After the Sept. 11, 2001, terrorist attacks, the U.S. Federal Reserve pushed rates down. That led to a borrowing binge and a boom in the U.S. housing market. The market crashed eight years later, as rates started to rise and many homeowners couldn’t afford to make payments at the higher levels. The Fed pushed rates down again where they sit today.” “Critics have been predicting a Canadian housing market crash since the U.S. housing bubble burst. Last week Fitch Ratings added its voice, saying Canada’s… Read more »
bob
Guest
bob

Gov’s inflating away their debt is a better outcome than default.

say whaaaa?
Guest
say whaaaa?

“Gov’s inflating away their debt is a better outcome than default.”

For the politicians/rich elites or for average citizens?

Son of Ponzi
Guest
Son of Ponzi

Pats mentioned thisad a few days ago.
“Buy your Victory Bonds here”
https://voterid.bclp.bcliberals.com/pub/donate/help2017/gendisplay

Dave
Member
I agree Bob. But I still wonder how the macroeconomic picture will play out of the next few decades. We have had a 25 year trend of lower and lower rates. What will the next 25 look like? Will inflation come back and will we get the 1970’s stagflation scenario? Will we experience the Japan scenario of low growth and low rates? Will rates normalize to a higher level? Who really knows? I don’t think our central bankers know and that’s all that matters really. In the short run, I think the Fed and our bankers are going to be ‘behind the curve’ once again. I think the Great Recession will play heavy on their minds when making decisions. I think the data is really going to have to be the driver for getting rates higher. So, while increased rates… Read more »
southseacompany
Member
southseacompany

“17% of condo owners in Toronto, Vancouver bought for investment”, CBC.

http://www.cbc.ca/news/business/17-of-condo-owners-in-toronto-vancouver-bought-for-investment-1.2731289

“The 2013 Condominium Owners Survey was released Friday indicating that 17.1 per cent of households surveyed are condominium investors – meaning they own a primary residence and reside in it while also owning at least one other condo unit. The rest of the survey participants, 82.9 per cent, have purchased a condominium to live in.”

Dave
Member

southsea,

“The survey doesn’t include Canadian and foreign investors who own units in Toronto and Vancouver but to do not live in either of those cities. Dugan says CMHC hopes to include these investors in the next survey.”

I bet that number is significant based on anecdotal information. Those numbers also seem to vary from development to development too. Some sell lots of units to investors and others little.

southseacompany
Member
southseacompany
“CMHC leaves out question of foreign condo investors, but economist says it’s only 5%”, Financial Post. http://business.financialpost.com/2014/08/08/cmhc-leaves-out-question-of-foreign-condo-investors-on-major-survey/ “The Canada Mortgage & Housing Corp. survey of 42,426 households, who owned their primary residence in the census metropolitan areas of Toronto and Vancouver in August and September of 2013, did find that 17.1% of the market was made up of investors while 82.9% of the condos were owner-occupied.” “But Benjamin Tal, deputy chief economist says with CIBC, said when he crunches the CMHC and other numbers he figures the impact of foreign investors is not great — only 5% of the market. “While there is no discussion regarding foreign investors, when you combine this info with other information, such as the secondary rental market survey and starts and completion surveys (along with soft data from developers), here again observers might be surprised… Read more »
Son of Ponzi
Guest
Son of Ponzi

#9
1 in 5 condo “owers” “owes” another condo as an “investment”.
they are going to be sooo screwed.

Son of Ponzi
Guest
Son of Ponzi

#11
another false conclusion.
Foreign investors use cash, therefore are not captured by CNHC data.

southseacompany
Member
southseacompany

@#13. Cash buyers are included. They amounted to 17.5% of purchasers;

“CMHC’s survey found that, at the time of purchase, 47.1 per cent of COS investors had a down payment of more than 20 per cent on their last purchase, while 17.5 per cent who purchased their last condominium unit did not require a mortgage.The survey also found that 20.5 per cent of COS investors had a down payment of less than 20 per cent, at the time of purchase (Table 11).”

http://www.cmhc-schl.gc.ca/odpub/pdf/68161.pdf?fr=1407511695840

Bo Xilai
Member
Bo Xilai

Hong Kong’s elite clueless about the pain of coping with tourist flood

http://www.scmp.com/comment/article/1569100/hong-kongs-elite-clueless-about-pain-coping-tourist-flood

Substitute “Hong Kong” with “Vancouver” and “Visitor” with “Rich Immigrants”

Joe Mainlander
Guest
Joe Mainlander

@#13 You maybe missed that this was a survey of condo owners, not a survey of CMHC mortgage data.

Roughly half of Metro Van’s sales are condos, so the 17% investors are about 8% or 9% of total sales. Even if they were all off-shore (which they aren’t), it’s the 83% of condo buyers who buy to live in their units (i.e. locals) who drove the condo market.

crabman
Guest
crabman

This survey does not say that 17% of Vancouver condos are owned by investors.

The survey only looks at people who live in the CMA and own their primary residence. Of those people, 17% own one or more condos as investments.

Considering the fact that about one quarter of those 17% own two or more investment condos, and the fact out-of-town investors weren’t included, the percentage of condos owned by investors is probably over 25%.

kabloona
Member
kabloona
Harpernomics at its finest… 🙂 “Canada’s unemployment rate drops in July, with a mere 200 new jobs” https://ca.finance.yahoo.com/news/canadian-press-newsalert-unemployment-rate-falls-7-july-123225118.html Should be great news for the Housing market and ever-rising house prices!! “…Canada’s unemployment rate dropped one-tenth of a point to 7.0 per cent for the month, but that’s only because 35,400 people stopped looking for work. The participation rate, which tracks how many people are actively searching for jobs, declined to 65.9 per cent from 66.1 per cent in June. That’s the lowest it’s been since late 2001, BMO senior economist Benjamin Reitzes noted in a report. Over the past 12 months, the economy has added 115,300 new jobs — or 0.7 per cent of the labour force — with all the growth in part-time work… “Canada is rapidly becoming a nation of part-timers,” said Paul Ashworth, chief North American economist… Read more »
VMD@work
Guest
VMD@work

I personally know a few people (single Asian-Canadians) in their 20s who were gifted downpayments by their parents to purchase downtown condos. They were told by their parents to live in downtown for at least 1 year, then return to their suburbian family home with plan to either sell or rent out the downtown condo after.

Their parents intend to use the well-known “own residence” loop hole to avoid taxes.

Since this CMHC report was based on a “Survey of Condo Owners”, one wonders what response a shrewed condo-investor keen on avoiding taxation and scrutiny by CRA will put, when faced with the question from a government agency whether they’re buying to “invest” or “live in”.

As a crown corporation, CMHC should really produce better statistics and reports than “a Survey of Condo Owners”.

Son of Ponzi
Guest
Son of Ponzi

#19
Totally agree.
Some posters here should learn how the real world works.
The rich do not get rich by following the rules.

Yunak
Guest
Yunak

#19

Their parents intend to use the well-known “own residence” loop hole to avoid taxes.

It is a part of culture and tradition therefore better statistics could be considered racists here.

Joe Mainlander
Guest
Joe Mainlander

@#17

If 83% of condo owners are live-in, then the remaining condo owners (investors) are limited to 17%.

The two numbers cannot add up to more than 100%.

Lynn
Guest
Lynn

As long I know, a chinese business man bought a 9 mil house in Shangnessy Area and also bought other 2 or 3 apartments at downtown and left all of them empty. The guy probably got her PR card. I dont know if the survey show this kind of data.

Son of Ponzi
Guest
Son of Ponzi

#22
as # 19 pointed out, these surveys are not reliable.

VMD@work
Guest
VMD@work

Just some more lawsuits to line the lawyer’s pockets
Wealthy foreigners to sue Canada over end of visa plan
Aug 7, 2014
Wealthy foreigners hoping to fast-track immigration to Canada are preparing to sue Ottawa over the government’s cancellatin of its immigrant investor program, which has been assailed for allowing rich Chinese to buy their way into Canada.

Canada’s Federal Court ruled against Leahy’s group of would-be immigrant-investors on the wait times case in June, though Leahy has filed an appeal that he expects to e heard sometime next year. The new lawsuit would be a separate case challenging the cancellation of the program.

“Many of my clients bought properties in Canada after they got the visa, but some of them bought before getting the visa,” said Art yang, chairman of Gasheng overseas Investment Group.

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