Friday Free-for-all!

Its Friday already!

Time for another open topic discussion thread for the weekend.

This is our regular end of the week thread to talk about whats happening in Vancouver housing news, the global economy and other related topics.

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

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patriotz
Member

Canada’s household debt ratio hits record high

Once again, Canada is the only major economy to see household debt grow during a recession.

bullwhip29
Guest
bullwhip29
bullwhip29
Guest
bullwhip29

Calgary investment dealer Peters & Co. says price weakness, construction costs cast B.C. LNG projects into doubt

http://www.theglobeandmail.com/report-on-business/industry-news/energy-and-resources/price-weakness-construction-costs-cast-bc-lng-projects-into-doubt/article26318603/

southseacompany
Member
southseacompany

“Foreigners are flocking into Canadian housing bonds, bubble fears and all”, Financial Post

http://business.financialpost.com/investing/global-investor/foreigners-are-flocking-into-canadian-housing-bonds-bubble-fears-and-all

“Investors, mainly in Europe and the U.S., have already bought a record amount of Canadian mortgage-backed covered bonds this year, according to Fitch Ratings. The demand comes amid record household debt and lofty home valuations”

bullwhip29
Guest
bullwhip29

@ #1

“Interest payments made up 6.3 per cent of disposable income, keeping it at “historic lows,” Statistics Canada said.”

-pretty irresponsible thing for them to be saying. not only is the average person effectively floating further out to sea in a boat without a paddle, they are taking on additional passengers while being forced to bail water to keep everything from sinking. the powers that be are doing no more than making sure the leak doesnt get worse while turning a blind eye to the root of the problem

Westside Realtor
Guest
Westside Realtor

Great post bullwhip.

Interesting how all the politicians are pandering to housing in this election.

That’s a bearish contrarian sign, imho.

I think cracks are showing again, after being plastered over by two rate cuts earlier this year. Without ever lower interest rates and easier lending standards, this gasbag is feeling it’s weight.

I stand by my view of lower prices in a year.

Oracle, let us know what you definitely buy this fall…I guess that gives us about 75 days to be informed of what you bought. I think it’s a dumb move, but that’s just my pov.

WSR

bestplaceonearth
Guest
bestplaceonearth

Happy Friday everyone!

No worry, the end of the world is not around the corner. Be happy! Don’t live in fear! Get out of mama’s basement once a while!

bullwhip29
Guest
bullwhip29

@ #4

article smells like a paid ad. given their role in the 2008 crisis, i wouldnt trust anything these rating agencies have to say, esp fitch which is owned by hearst corp (publisher of cosmo, oprah, good housekeeping, food network etc…)

Bo Xilai
Member
Bo Xilai
bullwhip29
Guest
bullwhip29

@ #6

i wouldnt say an all out crash happens by next yr, but cracks are certainly showing. it remains to be seen if cdns blow their brains out this xmas or not. prices for many products have gone up noticeably. if apple thinks millions of cdns will drop $1300 for the new iphone they are dreaming. the crash in the loonie is effectively a big pay cut for cdns. i figure in the not too distant future people will figure this out and begin to curb spending on “stuff” out of necessity just to make ends meet. i doubt this mean defaults on mortgage/loan payments overnight, but it definitely wont make what is already a dicey situation any easier.

Brian Ripley
Guest
Brian Ripley
I re-updated my Household Debt Chart this morning with the addition of the latest 2Q record debt and mortgage data points: http://www.chpc.biz/household-debt.html One of the effects of the Federal Government policy of balancing the budget by slashing spending instead of increasing revenue results in the private sector having to borrow to maintain lifestyle and low rates have certainly helped that dynamic. But look at the chart; as we know, there are limits in the private sector to the amount of debt that can be transformed into equity (either by repayment or default). Repayment is a long haul and if incomes are flat or at risk as debt obligations increase, the ability for additional productive investment will be denied. That’s what we see with the other metrics on the chart (GDP, Net Trade, FDI)… they are not productive in Canada. Good… Read more »
MikeS
Member
MikeS

Well… with a kid on the way it looks like the wife is getting anxious. No more $1300/month basement suite for long. Her mom has cancer and a house in Terrace fully paid off — which would act as a $300k down payment on something here with a basement suite for her.

I make good money but we all know why we’re on this site.

Anyone got any words of comfort? Advice?

Nom Nom Nom
Guest
Nom Nom Nom

@Mike S

…Life has moved on, take solace that this is just how it goes. I am right there with ya.

NNN

Yunak
Guest
Yunak

@9

And the government wonders why Mainland Chinese don’t pay taxes in Canada…

The government might wonder but they encourage it as a part of Canadian multiculturalism given Mainland Chinese background, culture and mindset.

space889
Guest
space889

@BPOM – How do you say “Go back where you are from” in First Nation language? Cuz I’m sure a lot of them would like their land back…even without any financial compensation.

oh wait?? that happened before you were born and it was ok practice back then?? so basically, sit on something stole long enough and it’s all kosher right?

At least the Chinese are paying top dollar for houses here, along with ungodly amount of sales taxes and property taxes, and keeps tons of restaurants and high end retail & car dealers afloat. Probably paying more in taxes than your average family making $69K/yr in income + sales + property tax.

If you are jealous, nothing prevents from going to HK/Taiwan/China and making a fortune there.

space889
Guest
space889
@crikey – So someone post a story about tax cheats from South Africa, and responses all comes out are how bad and crooked Chinese are. Yeah, that’s not racism and prejudices. Whatever…. I’ve stated many times on this board that CRA should crack down on tax evasions and that Canada is basically letting in too many rich crooks rather than bona fide investors. However, spending one’s savings is not tax evasion. Nor does CRA have power to tax income on non-Canadian residents who has never applied for PR / immigration. Off course, Canada can always adopt US style tax laws but good luck trying to collect. As for rich Chinese who declare no income, well as I said, it’s not a crime to spend your savings, or receive cash from your husband in China. And frankly Canadian’s social welfare system… Read more »
w
Guest
w

>Probably paying more in taxes than your average family making $69K/yr in income + sales + property tax.

Extremely dubious claim. But it doesn’t matter if it’s true or not. People who make more are supposed to pay more, that’s how our society is organized.

Saying that it is ok for a wealthy person to contribute to society the same dollar amount or slightly more than a lower income family is insane.

If the people doing it weren’t Chinese you wouldn’t be on here blindly defending them. That’s the definition of racism.

space889
Guest
space889
@Yunak – They have no income, so why should they pay tax? Same with retirees who have very low income but lives in million $$ houses. Should they pay their fair share of taxes since they got a $3M house? And for the last freaking time, most of these Chinese people have accounts with private client wealth mgmt units of various banks and asset mgmt firms in town. The dividends they receieve are all sent to CRA for tax purposes and their accountants prep the tax returns. The only thing is though, when you have no earned income, you can get up to over $80K to $100K in dividends before you even have to pay a single cent in income tax. And if you talk about tax cheats, likely the amount of tax leakage from personal and small biz far… Read more »
Oracle
Guest
Oracle

MikeS:

The decisions all boils down to what you think is causing the Run up in prices.

I think it is the declining proportion of detached homes as a fraction of total housing units. Couple that with an out of control immigration system, foreign money inflows, and low rates, and CMHC who don’t verify income with CRA and you have THIS.

space889
Guest
space889
@w – I don’t defend any tax avoidance scheme. I just have issues with people on this blog seemingly think it is all and only Chinese fault, along with all the racism displayed here unchecked by BPOM and team. If you don’t think what they spew is not racism then we just have to agree to disagree. As for rich should be paying more, well good luck with that concept. Our entire tax system is skewed towards favoring the rich. How many average working family have large amounts of dividends and capital gains? The average family have to sell their labour and time in exchange of income, and usually invest in safest investments which also gets taxed at the highest rate. While wealthy individuals generally invest in businesses, stocks, and various specialized investment products that are only open to wealthy… Read more »
patriotz
Member

@18: “And for the last freaking time, most of these Chinese people have accounts with private client wealth mgmt units of various banks and asset mgmt firms in town. The dividends they receieve are all sent to CRA for tax purposes and their accountants prep the tax returns.”

Funny, that doesn’t jibe with what you were saying a month ago:

space: Someone came here with $10M and decides to live off that would have very little income

me: And they are going to put it all in a chequing account that pays no interest? Come on. Even at 1% interest that’s $100K/year interest income.

space: @patriotz – Surprisingly, a lot of them are actually doing exactly that….

http://vancouvercondo.info/2015/08/friday-free-for-all-summertime.html

vangrl
Member
vangrl
“The only thing is though, when you have no earned income, you can get up to over $80K to $100K in dividends before you even have to pay a single cent in income tax. try around $57,000. Also, at some point a “minimum tax” kicks in, and you pay regardless of DTC. It’ll also show up as a Huge income as they “up” it by 1.38, so no chance in hell they’d get any social benefits like GST refund cheques, which my postie friend has said he delivers to many, many West Side homes, some of those homes have 0 occupants. He said that mail in certain areas is comprised of government cheques and flyers from Realtors begging to “Sell and list with them”. Truth. Does anyone think that recent House owners from Mainland China are investing in Canadian dividend… Read more »
vangrl
Member
vangrl

speaking of dividends, I’m loading up on bank stocks today, bunch are back to paying close to 5% divy….sweet

UBC in crisis mode
Guest
UBC in crisis mode

“If mortgage rates go to 6%” Not for Vancouver, it is Different Here!

http://www.cnbc.com/2015/09/11/if-mortgage-rates-go-to-6-heres-what-happens-to-housing.html

space889
Guest
space889
@patriotz – For those that move here permanently with no ties back to China do just that….came here with $10M, they would quite often put at least half of that into basic chequing / saving account which gives almost no interest and the rest to a private client wealth mgmt company. So they have large of amount of cash sitting there earning next to nothing and a good chunk in investments. For those that still have the husband or the wive that still runs the biz in China and don’t have Canadian PR/citizenship, then most of the money is likely to just sit in the savings account for day to day use, rather than being invested in risky markets. Just because they have 50%+ in saving accounts doesn’t mean they also don’t have money being mgmt in private accounts. When… Read more »
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