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Friday Free-for-all!

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125 Comments

It’s that time of the week again…

Friday Free-for-all time!

This is our standard 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:

–How about more taxes?
–Not all owners oppose lower prices
–Equity Protection
–What a realtor says
–The premier wedge issue?
–Lessons learned in the 80s?
–Harper warns of high debt
–

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

 

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Butler Wuhan…..

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ChinaOne

@Garth3 post #121

Good post. Now make sure yur kid goes to Butler school. My son very picky and will need good butler in future. If your wife hot, she can work for me. you earn good living..

Lots my cousins coming and they will need butlers too.

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would-be buyer

Since there is no firm stats on foreign ownership of VA real estate, I cannot say with conviction that they are to blame for our high housing costs. My gut tells me it’s a global phenomena of easy money and low rates that has lead to our current predicament. There is so much money sloshing around out there that it is desperately trying to find a place to invest for yield. The problem is that it has overwhelmingly benefitted those who were already owners of hard assets and stocks to begin with – the rich. Those already in the game before QE have become exceedingly rich off the backs of lower and middle class who have leveraged themselves to the eyeballs to get in the game, less they be priced out forever. We all know locals who have mortgaged to… Read more »

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Charlie

And some on here still can’t bring themselves to face the possibility that the Van market may not all be about cheap credit. So Zero Down Forty, Poloz dropped rates by a fraction and it went BOOM did it?! I can’t believe you wrote that with a straight face. Fixed rates hardly reacted. Yet it went boom apparently, so there you go – proof if you ever needed it – all about cheap credit. Except, shock, horror, it only went boom in Toronto and Van (as usual)! Why didn’t it go boom in Kelowna, or St Johns, or Lethbridge, or Winnipeg, or PEI? Or didn’t Poloz drop rates for them? Why can’t people face the fact that cheap credit and external investment, or possible IIP factors aren’t mutually exclusive? Look, everyone knows that cheap credit has played a massive part… Read more »

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Garth3

@117

HAM has been proven over and over to be a non factor.

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southseacompany

” Why Interest Rates Are Climbing”, Forbes magazine

http://www.forbes.com/sites/markgreene/2015/05/18/why-interest-rates-are-climbing/

“It appears that a trend reversal has taken place and mortgage interest rates are on the rise. It had to happen at some point. The financial markets have been dancing with when the Fed will raise short-term rates for some time, and it appears that the credit markets at least, are tired of waiting.”

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southseacompany

In Europe, yields up, mortgages rates rising;

“Mortgage rates edge up thanks to higher wholesale costs”,
“Banks are being forced to pay more for five-year funding, pushing rates up”, The Telegraph, UK.

http://www.telegraph.co.uk/finance/personalfinance/borrowing/mortgages/11609111/Mortgage-rates-edge-up-thanks-to-higher-wholesale-costs.html

“Five-year fixed mortgage rates are starting to creep up after weeks of price rises on the markets where lenders access money for loans. Experts are warning rates may be about to rise further.”

“The pricing of mortgages depends mostly on whether banks can access cheap funds. Lenders borrow on money markets, buying at the “swap” rate for a certain time period. These swap rates are loosely linked to the yield on gilts or UK government bonds, which after years of falls have been rising.”

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vanlurker

@105

Agree.

That’s why we need free and good information, but now sentiment is monopolized and carefully manipulated. There is not really a clear picture on how the market is really doing. And all opinions are always the same, by the same t*urds.

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vanlurker

@99

Wouldn’t it also be wonderful to have real information ? That alone would work wonders for bringing the prices down and could identify some interesting … ahem … patterns.

Prices history, comparable houses, prices in the neighborhood, etc.

http://www.zillow.com/homedetails/3831-25th-Ave-W-Seattle-WA-98199/2108084014_zpid/

Instead of the useless Rastafarians info.

No one wants to ‘interfere’ with the ‘free market’. Nice market indeed, where the same organization that most benefits from misinformation, is the same one controlling the information. Fudge the numbers, spread rumors (who have been the ones telling about HAM at every turn to push up the prices ? Hint: starts with R ).

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Garth2

@97

Those guys have no credibility. RE industry cannot be trusted, except for the RE firm that shows HAM is <1% of the market.

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Garth

You guys disgust me. There is no HAM in Vancouver. Low interest rates caused this. If you have a house, sell asap. Like I’ve been telling you for 7 years. Now sell what you have and invest with me because this is not going to end well.

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southseacompany

“Canada’s household debt: Four potential solutions”, Globe & Mail http://www.theglobeandmail.com/report-on-business/economy/canadas-household-debt-future-challenges-and-potential-solutions/article24470920/ “The obvious way to discourage Canadians from piling on more debt is for the Bank of Canada to start ratcheting up interest rates, and soon.” “The key, said former Bank of Canada governor David Dodge, is a slow and steady return to more normal rates.” ““It’s true that in running up rates quickly, some households would get caught off-side and they are going to have problems,” said Mr. Dodge.” “But Benjamin Tal, deputy chief economist at CIBC World Markets, cautioned that even small rate increases could have a bigger-than-usual impact this time around. Even if you raised the rate on a loan from a very low 2 per cent to a still relatively low 3 per cent, that represents a 50-per-cent rise in the borrowing cost. “It’s such a huge… Read more »

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Polozi Scheme

China’s new home prices fell for the eighth consecutive month in April from a year earlier but were flat from March, adding to hopes that a property downturn which is weighing heavily on the economy is beginning to bottom out.

However, analysts warned that any recovery in the market will take some time, given a huge inventory of unsold homes and a slump in real estate investment growth to the lowest levels since the global financial crisis.

Average new home prices in China’s 70 major cities dropped 6.1 percent last month from a year ago, the same rate of decline as in March, Reuters calculated from official data published on Monday. But prices were flat from March, further narrowing from a 0.1 percent fall in the previous month.

http://www.reuters.com/article/2015/05/18/us-china-economy-houseprices-idUSKBN0O302I20150518

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franko

@75 BPOM

Rocusts.

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see-a-pattern-here

Banks in China who defraud their clients
May 17, 2015
http://www.wantchinatimes.com/news-subclass-cnt.aspx?id=20150517000016&cid=1303

Charged with graft in China, some fugitives are finding luxury in the US
May 16, 2015
nytimes.com

Australian property seen as hot destination for money laundering
April 22, 2015
smh.com.au

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vangrl

#105

I agree

The lack of inventory in detached houses makes me think that people are choosing not to sell because they think they’ll get more if they wait.
If they see even a few months with no gains or even a slight decrease, they may think we’ve reached the peak and decide to sell.

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Spec

I’d add that, as much as interest rates rising would certainly help, the real change will be when the psychology/fever breaks – with or without the rise in rates. A rise in rates would most definitely help with that though.

Change in attitude = cake, interest rate rise = icing

(IMVHO)

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Zero Down Forty

I wish I could predict the future. but we can study the past.

US Fed dropped it’s rate to 1% back in ’02-’03 due to early 00’s recession. Home prices climbed during that time. Fed rate raised the rate to 6% in ’06-07′. Their bubble burst after that.

Even Flaherty’s tightening of CMHC standards had an effect. There was a period around 2012-13 when he tightened that even Sf prices dropped in Vancouver. Someone here posted the stats, but I can’t remember, 3% or 4% YOY drop during that time I think.

It’s interesting what small movements can do. Like Poloz dropping the rate a few months ago and boom.. Van and TO start rising.

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vangrl

How big of a rate change do you think is needed to have an impact on detached housing in Vancouver? East, West and North Vancouver.

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Zero Down Forty

The US economy has started improving. RE is rising in many places. That’s why Yellen wants to raise the Fed rate. That is why bond markets have reacted in the last few weeks and bond yields as are rising. Mortgage rates are already starting to creep up in the US.

Note at the end of Seattle Home Guy’s report;

“This spring and summer is turning out to be one of the best times to sell in years. Once interest rates start rising, however, those trends may change.”

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vangrl

Zero – flash forward from your 2013 article to now, and look at the price gains in their nicest areas, they range from 20-26% higher in just one year. I wonder if incomes went up that much?

It appears they are following a similar trend as us, with condos not doing nearly as well as detached.

http://www.seattlehomeguy.com/blog/

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Zero Down Forty

Isn’t interesting there is little effect on Seattle’s home prices. No problem. No pain.

“Seattle-Area Price to Income Ratio Near Historic Average”
http://seattlebubble.com/blog/2013/06/21/seattle-area-home-price-to-income-ratio-near-historic-average/

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Best place on meth

@97 Isn’t it interesting that in the US they know exactly the amount of foreign money buying real estate and where it’s coming from, while our useless leaders just play dumb and refuse to look into it. “Based on a survey of National Association of Realtors’ members, from April 2013 through March 2014, the total sales volume to international clients was estimated at $92.2 billion, or 35 percent higher than the previous period. In Washington state in 2013, people from China bought nearly $2 billion in residential real estate.” And then there’s this: “She’s seeing two types of home buyers from China. The first is looking to buy houses near good schools, and often the mom and kids live here while the dad commutes to and from China. The other group are investors, and Foster said they generally take a… Read more »

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Zero Down Forty

@#96 And Oregon press;

“Asian investors eye Oregon properties, green cards”
http://www.oregonbusiness.com/articles/98-april-2011/5019-asian-investors-eye-oregon-properties-green-cards

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