It’s the end of another week and 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, here are a few recent links to kick off the chat:
–Only Toronto and Vancouver?
–Rates stay steady
–CRA crackdown on RE
–Pauls stats
–
So what are you seeing out there? Post your news links, thoughts and anecdotes here and have an excellent weekend!
Did Garth Turner just admitted to HAMs in the Vancouver market!!!!!
An interesting article that sheds some light on to the inherent cultural differences that I think might be fueling some of the tension on this board.
http://www.china-mike.com/chinese-culture/understanding-chinese-mind/cult-of-face/
“Four reasons home prices keep soaring in Vancouver and Toronto”, BNN video
http://www.bnn.ca/four-reasons-home-prices-keep-soaring-in-vancouver-and-toronto-1.528545
“There are four key reasons housing prices have soared in Vancouver and Toronto over the last two decades, according to a report released by RBC on Friday”
“1. Lower interest rates (account for 39% of the increase in Toronto, 34% in Vancouver)
2. Higher incomes (account for 29% of the increase in Toronto, 40% in Vancouver)
3. Higher percentage of income going to mortgage payments (account for 17% of the increase in Toronto, 4% in Vancouver)
4. Down payment gifts from family members (account for 5% of the increase in Toronto and Vancouver)”
Is this the government of China calling an end to the party?
Thats right, even the chinese media is calling the coming Canadian housing crash worst than the US. Only stupid people and Chinese money launderers are buy in Vancouver.
Taiwan web users join ‘Apologize to China’ contest.
Thousands of people from Hong Kong and Taiwan have signed up to a satirical Facebook event to offer “apologies” to China.
The “First Annual Apologize to China Contest” allows people to send in their regrets on how they might have wronged the People’s Republic, the Hong Kong Free Press news website reports.
http://www.bbc.com/news/blogs-news-from-elsewhere-36825781
Space, I’m sorry that your people are such lying, cheating, thieving, butthurt, knuckle-dragging locusts who have no respect for anyone or anything.
Really, I’m so sorry.
U.S. Warships Surround Disputed Chinese Waters, Prepared For War: “WWIII At Stake”
http://www.zerohedge.com/news/2016-07-17/us-warships-surround-disputed-chinese-waters-prepared-war-wwiii-stake
This is another super-reliable source.
“Be prepared: China’s bubble will soon burst”
“Here in Vancouver, we’re seeing it right before our eyes: an out-of-control property market the government has only recently decided to acknowledge is almost completely inflated by an outflow of Chinese money. Mainlanders have taken cash out of the country at unprecedented rates, as high as $46 billion a month in the past half-year alone.”
http://www.winnipegfreepress.com/opinion/analysis/be-prepared-chinas-bubble-will-soon-burst-387132191.html
Well, if there is anyone I trust for my international finance news, it’s the Winnipeg Free Press. Talk about having a finger on the pulse!
BC NDP add your name to their cause.
Red-hot housing prices are forcing people to move out of BC.
https://act.bcndp.ca/housing?source=topbutton
I went to the Burnaby Edmonds street fair today and the City of Burnaby had a booth there to support/explain/promote their new high density plan for the Metrotown area. I gave them supreme shit for their greed and displacement of 100’s of low income residents to accommodate greedy developers and real estate speculators.
We the people need to start fighting back against this mass corruption and greed at all levels of government. Government should be by the people and for the people, not for special interest business groups.
Good for you. The destruction of Vancouver and surrounding area doesn’t happen all at once, it happens bit by bit by bit. It is good to talk one-on-one with people, in specific contexts about specific projects or events with which they are somehow connected. People often don’t recognize the connections between local projects and big trends.
because keept those 40/50 years old apartment buildings on their way to slums is much better for the tenants in the long term? And off course, stopping densification and lowering housing supply will totally resolve the high housing prices?
Gotta love bear logic
These buildings are not “on their way to (being) slums” but are well maintained apartment buildings that provide accommodations at a reasonable cost to people to could not otherwise afford to live in the area. Why should they be torn down and the residents displaced for the sake of property developer profit and off-shore real estate speculators? These residents are Canadian citizens who deserve to be treated fairly by their respective governments and not booted to the curb for the sake of a few dollars of which they will see none.
I’ve seen one too many renovictions not to be disturbed by this story. I have seen a guy adjusting to a divorce and a serious accident and subsequent job loss getting his life back on track and living simply in his apartment. It was a good base of operations for him, clean and well ordered. He could do most of his work online. He had a bicycle to get around and cooked good meals for himself and attended workshops, including government sponsored ones, to update his credentials and ‘improve’ himself. Some group of investors who wanted to get better profits from the building decided to upgrade it and eject all the tenants living there. It was a huge problem for him, he had to quickly find a place to live that he could afford, he had to sell many of… Read more »
*”double pane” not “pain”. Sorry.
OH please…when you are charging low rents and working with 40yr+ assets, there is limited good maintenance you can do. That’s real life.
And Metrotown is Burnaby’s downtown. Are you saying that low income people have more rights to low income housing there than middle class and upper middle class families? Metrotwn isn’t exactly plagued by empty condos. If thecity is really concerned, nothing prevents the city from demanding low income housing from developers or build its own from development charges. Foreign investments would mean that the city wouldn’t have to spend tax payer money on it.
It makes no economic sense to spend billions of tax dollars to build rapid transit lines that only service low 3-storey walk up apartment densities. Which is why areas around rapid transit stations have been designated for densification for decades.
Densification in certain areas is fine when it is weighed against other factors, but random densification is not fine, nor is densification at the beck and call of a politically-connected developer or offshore realtor. It has to be thought out — otherwise there is no defence for it.
Metrotown is being densified, and there are master plan for it. What’s so random about it? If you don’t like and think you can do a better job, you are welcome to show up at those public meetings and voice your opinions or better yet, run for mayor.
Cities have to have Official Community Plans, and they are to be updated every 5 years, with public input. OCPs outline the land uses in a city including areas slated for densification, guiding where development is to occur. Metrotown has been slated for densification since the first Metrotown Development Plan of 1977.
I’m a bear, I have nothing against you and I actually find some of your posts make good sense, but you really need to become more educated on the topic of densification, city planning, development, and finance in order to participate and even properly act as an activist on Vancouver real estate. The strongest arguments are the ones from informed individuals with a good grasp of the various aspects affecting the entire market. This post is REALLY disturbingly uninformed and posts like this or activism with uninformed posts like this can only strengthen the position of those who want to nitpick more valid arguments in order to keep real estate grossly inflated. Densification of Vancouver and surrounding municipalities are not done randomly. There’s a lot of planing that goes into it and such planning is periodically made public and open… Read more »
Speaking of slums or better say nasty shitholes… The first thing that had to be bulldozed or exterminated should have been Crystal Mall in Burnaby. It is shame that such monstrosity even exist in any part of the western world.
Well you are at it, you can get rid of this imitator too:
http://www.greenroofs.com/projects/librarysq/librarysq01.jpg
Hah! Apparently Space has got an Imitator Complex. Should go in the new Diagnostic and Statistical Manual of Mental Disorders.
If we remove this, where else would the homeless sleep/urinate??
From Sam Cooper Tweet: The U.S. Gov views corruption and money laundering from Russia and China as a national security issue. Does Canada and BC? Apparently not.
Does tolerating graft undermine national security?
http://www.newyorker.com/magazine/2015/01/19/corruption-revolt
“Welcome to the upside-down global economy where savers are penalized and borrowers get paid” Financial Post
“Welcome to the upside-down world of modern monetary policy. In this new reality, borrowers get paid and savers penalized. Almost 500 million people in a quarter of the global economy now live in countries where interest rates measure less than zero.’
Only governments are borrowing at negative rates, not private parties. Indeed as the article points out the -ve rates reduce banks’ revenues which mean they are more likely to increase rates charged to private parties.
Uhm…European corporate going to have negative borrowing rate courtesy of ECB. There are already borrowers in Denmark and Nordic countries with negative rate mortgages. So what the f are you talking about that only gov’t are borrowing at negative rates?
The mortgage rates are not negative. What they have is something called “interest”, which is negative, and something called “fees”, which add up to a positive rate. The principal repayment is in addition to this. Interest by definition is what a borrower pays in addition to the principal. If it talks like a duck, etc.
Fewer jobs but higher prices. Can it get any weirder?
“On the rise in Hamilton: housing prices & unemployment” CBC
“Unemployment is up in Hamilton since a year ago. Meanwhile, the rise of housing prices outstrips Toronto”
I’m guessing that job insecurity is driving people to buy houses. It’s a hedge (albeit a stupid one). People say, all my friends are losing their jobs and I might too, so I’ll buy a house now, while I can and, if I lose my job, I’ll be able to live off the equity gains.
The explanation is a lot simpler than that, Hamilton has been absorbed into the GTA market (many people now call it GTHA) and those buying today tend to be working in Toronto or Mississauga (and outpriced there) rather than working (or not working) in Hamilton.
http://m.huffpost.com/ca/entry/11015752
As house prices rise at what the Bank of Canada calls a “fire-breathing” pace, Canadians are growing increasingly worried about home affordability, particularly in the Toronto and Vancouver areas.
But here’s a sobering thought, courtesy a new report from National Bank Financial: Affordability could be worse. Way, way worse.
In Beijing and Hong Kong, a 970-square-foot condo will run you 34.7 times the city’s average income. Compare that to Canada’s least affordable city, Vancouver, where that same condo will cost you 11.3 times average income.
Canadian affordability levels are similar to levels seen in Australia, which has a similar resource-based economy to Canada’s.
Price/income comparisons are invalid because this kind of property is high end over there. In Beijing most people live in Communist era housing or smaller condos. In HK most people live in government-owned rentals or smaller condos.
However if you look at price versus rent, which is the valid metric, there’s no question these properties are overpriced.
It’s foolish to compare these cities on any measure. The author probably hasn’t been to any of them and is just copy and pasting from a press release from the realestate board.
when’s the last time you are in BJ or China, or talked to someone who recently live there? Most people live in Communist Era housing?? China is not a Communist hellhole anyore? BPOM would be interested to know.
And yes, condos are smaller and more expensive, so kind of prove author’s point that it is still cheaper here.
Shut the fuck up, locust.
We’re inching closer to war at which point we start rounding you and your kind up.
Have you been to any camps before?
And you will be volunteering for the US Army first thing on Monday???
You are even more pathetic than a bully. At least the bully can pretend to be tough. You are a loser who keep telling people just you wait, my big bro is going to beat you up!!!
I agree.
Space, do you even live in Vancouver?. You never say a thing that makes it sound like you know what it’s like to live here as opposed to some other arbitrary city.
Space, where did you last see an eagle in Vancouver? What’s the condition of the tree that many people in Vancouver from generations back has memories of? Space, at precisely which spot do you rest when you climb the stairs at either Wreck Beach or Grouse Mountain? Space, name an orca who swims in the Salish sea. Space, how many kinds of salmon are there in these Pacific waters? Space, what’s the best place to swim in the ocean on the lower mainland?
Gosh I wish we had an edit button.
“have” not “has”
Turkey is falling to hard-line Islam. Europe is done for. Turkey was supposed to be the barrier. What a joke.
“As Rates Sink, Housing Bubbles Rise”, Wall Street Journal
http://www.wsj.com/articles/as-rates-sink-housing-bubbles-rise-1468661400
“Low interest rates around the world are fueling a familiar threat of housing bubbles, and central bankers in a number of key economies feel powerless to stop them.”
“The problem is being acutely felt in Canada, where home prices are soaring even as the country’s energy- and mining-dependent economy slows. In Canada’s hottest market, Vancouver, British Columbia, the benchmark home price rose by a stunning 32% over the 12 months ended in June,”
“Mr. Poloz, whose bank has cut interest rates twice since January 2015, also acknowledged that Canada’s current ultralow rate environment is “absolutely” helping to fuel rising house prices and household debt.”
Poloz should be fired immediately. GT is saying it looks like another rate cut is on the table for later this year. My thinking is we will see zero percent within the next 12 months here in Canada. After that, the financial universe bends in on itself with full negative rates. And after that, the world’s bond markets crash and then we are finished. I give it two more years, tops. What happens after that is over the event horizon so who knows… maybe a world financial restructuring and a one world currency.
“Poloz should be fired immediately.”
You spelled executed wrong. Why do you people keep doing that?
Trudeau should replace him and put his own person in there.
Better late then never
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Thank you, Paul. Your postings are much appreciated!
very welcome.
For what it is worth, on my yield curve chart the 10 less 2 year Canadian bond spread continues to narrow heading towards inversion:
http://www.chpc.biz/yield-curve.html
The inversion in the summer of 2007 presaged the 2008 correction and banking turmoil. Now we have even deeper and more embedded global markets as well as war and the threats of war especially at currency levels while asset bubbles continue to grow in the risk on jurisdictions.
Overheard in a financial planner’s office here in Vancouver recently: “My husband and I changed our mind about buying another investment property”. (quote from a licensed financial planner)
At some point not even historic low rates will move the market.
Just check Rob Chapman for yesterdays sale: 100 units. Definitely slowing down. Think this this the beginning of a crash!
Rib Chopman always comes through with the stats.
Which fuking stats?
Which fuking stats?
Breaking News: Krusty is on the take:
Christy Clark & Stockwell Day tied to company profiting from out of control Vancouver housing market
http://vancouversun.com/news/local-news/b-c-company-benefits-from-quebec-cash-for-visa-program
Krusty aiding and abetting the destruction of Vancouver to line her own pockets. She is a true psychopath.
More Chinese Bullying….
“Hong Kong demands that candidates take pro-China pledge, threatens prison if they won’t”
“Chinese Premier Li Keqiang told Japanese Prime Minister Shinzo Abe on Friday that his country should stop interfering and hyping up the South China Sea issue”
“China threatens reprisals on NZ dairy, wool and kiwifruit if government doesn’t back off cheap steel inquiry”
and Krusty likes to kiss the ass of cruel and oppressive government
Hilarious:
The year is 2040 and Vancouver’s houses are worth $80-million
The good news is the city has never been more multicultural, with money launderers from all parts of the globe living here for at least one week of the calendar year in order to avoid paying the city’s empty-home tax. The rotating cast of sheiks and warlords gives the city a special flair.
Vancouver, Toronto Home Prices Being Hiked By Foreign Money, BMO Says
http://www.huffingtonpost.ca/2016/07/15/vancouver-toronto-home-prices-foreign-money_n_11004592.html
Take that liar Krusty and DeJoung
CRA plans ‘lifestyle audits’ in Vancouver as part of real estate probe
An investigation by Canada Revenue Agency into Metro Vancouver’s soaring real estate market is expected to bring under scrutiny people whose lavish lifestyles and expensive homes don’t appear to be in line with their incomes.
The CRA’s plan, described in a briefing document leaked to The Globe and Mail, indicates that one key area of investigation will be “lifestyle audits.”
“The CRA does come after individuals when it sees they live in very expensive housing and their incomes don’t support their lifestyle,” he said. “But a lot of the time when an individual has money that they’ve legitimately earned elsewhere, they can provide a simple explanation.”
Which is why this investigation will make very little difference. Making money isn’t illegal. Getting a gift from your Dad isn’t illegal. Buying your citizenship under an IIP is’t illegal.
I’m sure this will catch one or two criminals but the combination of low interest rates and the psychological and actual impact of foreign money will continue to drive the market unabated.
Eventually there will be some sort of correction but, as Ulsterman points out, it just doesn’t matter anymore.
It makes a difference if they enforce it properly. Assume some Mainland Chinese millionaire, comes here and gets Landed Status, drops off the wife and kids and returns to make big money. All the while declaring no income and getting Child Benefits and carbon tax back etc. while buying an X million dollar house and Merc etc. As a resident of Canada he HAS to pay tax on worldwide income. So the CRA should ask how did you pay for this? Likely many will lie and say daddy paid for it or an inheritance in China. The CRA could ask for proof and if none is forthcoming assess a fine. But I am sure documents are easy to forge and considering they did nothing with the Panama company owners both locals and Chinese , I assume the same lax standards… Read more »
Is he a resident? Or just his wife and kid?
“But a lot of the time when an individual has money that they’ve legitimately earned elsewhere, they can provide a simple explanation.”
Not sure what this is getting at. CRA isn’t concerned about whether you’ve earned money “legitimately”, they’re concerned about whether you’ve earned money, period. All income earned worldwide by Canadian residents (that means tax resident, not just someone who happens to be in Canada at the time), is taxable in Canada.
That would be hilarious is the massive CRA crackdown crashes the real estate market. Of all the possible causes, this was not one I had considered. I’m sure once the wealthy elite start getting liens on their properties for unpaid taxes they may not want to stick around anymore.
Al Capone was taken down by the IRS for unpaid taxes.
CRA should threaten to share their audit findings with China’s government.
That should get the attention of the crooks.
It might even start a panic.
https://fsmedia.imgix.net/52/b2/ca/90/b354/4fd8/9663/0318bb3256df/locustgif.gif
I think the new CRA attention may be a game changer. It could bring a rush to the exits to get the money out of Canada. Even if you do everything legitimate nobody wants the CRA auditing them when you have an asset stuck in Canada. I know if I was looking to buy an investment property in the US I would avoid it if it meant the IRS would audit me.
Lets be realistic now.
No major city in the world has had a 50% fall in housing prices.
Prices in Vancouver will never get below $1 Million.
The locals allowed their own politicians to get away with this. dumb as can be.
Tokyo greater than 70%
https://www.google.ca/search?q=tokyo+housing+crash&gws_rd=cr,ssl&ei=tTSKV-SRMMHcjAPp3KOQAw
Closer to home Las Vegas was greater than 50% Pheonix about 50% and Maimi a bit below but pretty close.
http://ca.spindices.com/indices/real-estate/sp-case-shiller-az-phoenix-home-price-index
No major city has ever had price corrections of 50%. Okay, define “major city”. Vancouver is absolutely beautiful and a major tourist attraction, but it isn’t a “major city”. Second, cities larger than ours absolutely did lose 50% of their home values. Take a look at Miami – and speculatory nature as here, down 50% with loads of condos losing more than that.
Having said that, I too am extremely sceptical that will happen here.
Also Hong Kong fell over 60% in the late 1990’s.
http://www.businessinsider.com/hong-kong-property-did-you-see-the-crash-coming-in-1997-2011-6
Sorry, you are wrong. Some Vancouver home prices plunged by around 90% back in the early part of the 1900s. Our local home prices took another big hit in 1982 when some homes dropped in value by between 40% and 50%.
And let’s not forget Tokyo, where home prices dropped by 90% in the 1980s and still haven’t recovered.
Dublin?
So to reiterate, no major city in the world has had a 50% fall in housing prices except for the shitload of major cities that did.
Based on the bust a few years back, I’m pretty sure you can add Detroit, Las Vegas, and Tampa (and if we’re calling Vancouver a “major city”, those qualify).
On top of that, in the same correction event, actual major cities like LA, San Francisco, and San Diego all saw something like 40% declines.
I’ll throw in my home city of Belfast – declines of 40-70% were common.
How about Barcelona or other cities in Catalonia, Spain around 2008? Their prices would have gone down pretty far (but I’m having trouble finding exact information).
50% Great, so that shitty teardown in E.Van will be 800k again.
Huzzah!
Lifes of locusts…
An unusually high number of Vancouver homeowners living in multi-million dollar neighbourhoods but reporting poverty-level incomes is a red flag that needs immediate government action, says NDP MLA David Eby.
I heard this “news” 20 years ago, from somebody that said that a social worker on the north shore had stated that a lot of people living in British Properties in West Vancouver reported to be poor and received assistance from the Government for themselves and their children.
I really don’t know what to say..
Ooh (dear) Canada …
Nothing will be done.
only the corrupt get ahead.
learn something.
Earn $$ in another country. Take use of social programs here. get ahead. make local politicians rich while at it.
suckers are local workers.
Western migrants? Not permitted.
Paul,
Either post your daily updates on time.
Or we look for a temporary Asian worker to replace you.
How difficult is it to put a few numbers together.
BTW did you ever get a client from this blog?
Would be surprised with all the loser renters posting here.
Paul,
Further more.
Can you provide us with a weekly update on the state of the Lower
Mainland RE?
Your own opinion, not resurgitating the hype of the RE cartel.
Thanks
Go and do one, you fartpanda.
“Homebuilders struggle to keep up with Canadian boom” Globe & Mail
“The housing boom in Canada’s hottest cities has spilled over into the suburbs, where builders say they are working as fast as they can to meet soaring demand and get homes to market before a much-feared housing bust.”
