FFFA! oil, panic, debt, surge

Hey, you made it to the end of another work week!

That means it’s time for another Friday Free-for-all. This is our regular 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:

New alarm over household debt
Panic in Alberta Luxury RE
But Toronto and the ‘Couve are fine
January Realtor Hunger Index 71%
Oil prices surge to 1 month high

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

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VanRant
Member
VanRant

China executes mining tycoon Liu Han. Expect more HOT money to flee China.

Shut It Down Already
Guest
Shut It Down Already

95, I bet you’ve never lived in any of those cities. I doubt you’ve even visited all of them.

CBC
Guest
CBC

I love how these posters are pissing on vancouver because they are angry at real estate prices. Its the same as calling a girl ugly because she won’t date you

Randy Randerson
Guest
Randy Randerson

@91

Vancouver is the best city in the world? I guess true metropolitan cities such as NYC, Paris, Rome, London, Berlin, Madrid, Tokyo, Buenos Aires, San Fran, Boston, Munich, Budapest, Singapore, and etc. all must be shit compare to Vancouver.

Travel much?

Randy Randerson
Guest
Randy Randerson

@87

Annualized rate of return over 14 years is -5.07%, before any miscellaneous fees.

What happen to RE always goes up? Rrrright, it’s all BS used by realturds to fool buyers.

@ Lurker 91
Guest
@ Lurker 91

i agree. The new Express Entry visa is attracting minorities that live in places such as England, etc. They have the english and canada’s doors are wide open.

Unfortunately sad but prices for detached are permanently out of reach for the foreseeable future. The horses have left the barn. Nothing gov policies can even do now.

HongKong
Guest
HongKong

Mainlanders are overrunning our city of Hong Kong.

http://www.scmp.com/news/hong-kong/article/1707554/town-selling-its-soul-hong-kong-and-mainland-shopping-frenzy

If this gets bad, I may just have to emigrate. Glad I hold a dual citizen (Hong Kong & Canada) and can buy a detached home in Vancouver for $3 Million. I have an out if things get bad here. So do 300,000 other Hong Kong residents with Canadian Passports.

Lurker
Guest
Lurker
@89 Oh come on. I get that you’re resentful because you can’t afford to buy here. I am too, it’s upsetting. But why would anyone want to live here? You either know nothing about the city or are willfully ignorant. It’s constantly voted one of the most livable cities……..on the planet. It’s beautiful. The weather is temperate year round. The water and air quality are some of the best on the planet. Getting to nature is easy yet it’s a large enough city to have lots of business and industry. Impossible to get people to move here? I work in software and most teams I’ve been on have more people from other places than locals. Europeans (UK, Germany, France) love it here as the density is lower and outdoor living options are greater. The brits especially as the weather is… Read more »
crikey
Guest
crikey
@#73 On a related but tangential note… Its my understanding that up until now, CRA could not inform authorities about illegally obtained domestic income. So, if you had a grow-op, every year you could file your fat profits with CRA with the knowledge that they weren’t allowed to pass anything about you on to police. Crazy wasn’t it? I guess it helped CRA get their taxes from even (some) criminals (Don’t forget, tax avoidance is what has done in some criminals over the years more so than their actual non-tax crimes e.g. Al Capone) Until now! Apparently, all that has just changed. “The federal revenue agency can now hand the police possible evidence of serious crime…that it happens to come across while reviewing taxpayer files.” … “Previously, confidentiality provisions in the law prevented the agency from handing information about suspected… Read more »
tedeastside
Member
tedeastside

why would somebody move to vancouver??

its impossible to get people from developed countries to move there!!
that proves how dismal of a place vancouver is

Ulsterman
Member

As a “missed the real-estate boat” type, I find the never-ending ascending prices depressing. I rent my house for a stunning 1800 but it’s still gloom-inducing to know its assessment rose 200k last year. However, this listing in my neighbourhood makes ma a little happier.

http://www.realtor.ca/propertyDetails.aspx?PropertyId=15272733

It started off at least 6-9 months ago (maybe more) at 2.4m. Then it changed realtors and he sent around misleading postcards claiming it was “just on the market” for 2.2m. I guess ethics aren’t part of the real estate exam – he’s lying, but this is BC real estate, so who cares I guess. Well I checked it today and it’s now priced at 1.98m or a 17% drop.

Ulsterman
Member

Not breaking news of anything. but it’s an example of how you don’t always get rich with BC real estate. Good friend of mine bought a one bed at Legends in Whistler Creekside in 2001 for 145k (1/4 share). He’s looking to sell because he has other Whistler investments and doesn’t spend enough time there to justify ownership.

There are plenty of one beds in the development on offer for about 90k, but he offered it to me for less – mid 70s. How’s that for a ROI after 14 years?

@82
Guest
@82

“Almost certainly a multi-unit rental converted to condos (in 2009 as noted in the article).”

LOL…80% or more of the SFH houses in Vancouver could be considered multi unit rentals. Basement suites are pretty much standard even in Westside $ multi million houses. Bottom line it was considered a SFH like most other houses in Vancouver pre 2009 and now it is considered a strata for RE sales/stats purposes.

Shut It Down Already
Guest
Shut It Down Already

Crabman, the relative underperformance of the lower-end is down to the gradual tightening of lending policies. The higher end of the market is, naturally, less subject to things like max amortization, mortgage qualification rules, downpayment requirements, etc.

What happened to $1,050,000 listings after the CMHC cap came in? They turned into $999,999 listings. Would that have been the case if all buyers were rich foreigners paying cash?

chinoria
Guest
chinoria

“Canada cannot do a forensic investigation of the source of the money every time a transfer is made from China or any other country. ”

Partriotz you are wrong – Fintrac was set up to track the transfers of large sums to make sure it was not drug, terrorist or stolen money being brought in. However it seems to be very lax IMVHO.

@#70-@#73_@#77
Guest
@#70-@#73_@#77
There are global tax & legal experts at the becks and calls of the superrich (with a minimum net asset of over $100M). All their clients have to do is to jet to London, Frankfurt, New York or the British Virgin Islands. Even a lesser known address has impressie clientele list. http://offshoreleaks.icij.org/nodes/294706 Sometimes, money from country A stays in country A,, while money in country B stays in country B. Customer X in country A want $1M in country B, so he hands over his money in A currency to an underground bank in his home city. Then he flew to country B, or his family in country B is given the $1M less 0.3%-0.5% commission. There are hundreds and thousands of these underground banks, but somehow they never made it through the North 49 news radar. Bloomberg has some… Read more »
patriotz
Member

@77:

Canada cannot do a forensic investigation of the source of the money every time a transfer is made from China or any other country. All Canada can do is make sure the transfer conforms to our own regulations. It’s up to China to report to us if they find that someone is obtaining funds illegitimately and transferring them here.

patriotz
Member

@66: “Perfect example. A Westside SFH converted to 4 strata units = one less SFH and 4 additional stratas.”

Not really. Anyone familiar with the neighbourhood (12th and Burrard) knows that those old houses have been multi-unit for decades and that the zoning allows for it. Almost certainly a multi-unit rental converted to condos (in 2009 as noted in the article).

That said, there are certainly districts (e.g. Cambie corridor) where SFH really are giving way to condos today.

Marco
Guest
Marco

@southseacompany

The full McKinsey report that was used in the Kelowna Now paper:

http://www.mckinsey.com/~/media/mckinsey/dotcom/insights/economic%20studies/debt%20and%20not%20much%20deleveraging/mgi%20debt%20and%20not%20much%20deleveragingin%20brieffebruary%202015.ashx

Check out what they say about the Chinese economy.

Cheers.

southseacompany
Member
southseacompany

“Huge Household Debt Driving Sky High Market Prices” Kelowna Now

http://www.kelownanow.com/watercooler/money/news/Business_and_Finance/15/02/06/Huge_Household_Debt_Driving_Sky_High_Market_Prices

“Mortgages are the main form of household debt in all advanced economies, and rising housing prices contribute to more borrowing. And, when buyers can obtain larger mortgages, they bid up house prices even more,” read the McKinsey study. “The question now is whether high household debt in some countries will spark a crisis.”

southseacompany
Member
southseacompany
“Canada 2nd Only To Greece In Household Debt Growth, Risks Crisis: Study” Huffington Post http://www.huffingtonpost.ca/2015/02/05/household-debt-crisis-canada_n_6623322.html “A new study from the McKinsey Global Institute finds Canada has seen the second-highest increase in household debt, relative to income, among developed countries since the Great Recession.” “That places Canada behind only crisis-plagued Greece on this measurement, which looks at the growth in household debt between 2007 and 2014.” “The report also suggested that the condo boom in Toronto and Vancouver — the two cities in Canada still exhibiting strong price growth — may be linked to Canada’s high household debt levels. “Countries in which a large share of the population crowds into a small number of cities have higher real estate prices — and household debt — than countries with more dispersed urban development,” the report says. “Policy makers will therefore need to… Read more »
@73
Guest
@73

It is illegal to bring in stolen or fraudulently obtained money into Canada
That doesn’t seem to bother anyone

@73
Guest
@73

“Don’t the realtors or lawyers have a duty to report this instead if facilitating it?”

No, because it is Chinese law that is being broken not Canadian law. It would be like reporting a Saudi immigrant for committing adultery in Canada. Adultery is not illegal in Canada just like bringing cash from over seas is not illegal in Canada. It is Canadian law that applies in Canada not Chinese or Islamic law.

@72
Guest
@72

“First phase driven by locals. The next phase by recent immigrants both temp and permanent bringing money from overseas.”

Immigration has not changed in the last 15 years. The vast majority of immigrants show up here with little or no money and work at below average pay once they are here. Many will buy houses just like the locals using CMHC and taking on massive mortgage debt.

If what you are claiming is correct mortgage debt would be declining as locals sold off their properties and paid off their mortgages. But as we know mortgage debt is increasing which means RE is being bought with credit not cash.

@71
Guest
@71
Prior to 2002 the market was dead and developers where not building condos. After the market took off in 2003 developers went full on starting developing again. The average condo development takes at least 4 to 5 years from the idea to completion. They need to acquire the land, design, market, get financing and sell a good portion of presales before building even starts. Actual building can take 2 to 3 years. The reason prices went up more in 2002 to 2008 is because it took 4 to 5 years for new inventory to hit the market. Projects that started in 2003 were finished in 2008. Since 2008 new supply is meeting new demand which means flat prices. We are now at the point where supply will exceed demand in condos and that is when prices fall. Just like supply… Read more »