Friday Free-for-all! July 8th 2016

It’s the weekend.

One more read of the internet and then you should really get outside to play.

But being that today is Friday that means it’s time for our 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 links to kick off the chat:

What did people talk about before the bubble?
Supply up, sales down?
Raise interest rates
Precise data from a tiny sample
ok fine, give me $100k less
speculation tax = market collapse?

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

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Second rant by Marc Cohodes on Linda Steele Show on July 10th. A must listen.


The Canadian 10 year government bond is less than 1% right now. Germany and Japan are negative. The Spanish and Portuguese bonds are lower than US bonds. What sense does any of this make?

Economic growth in the West is stagnant with basically free money in many countries.

Money is chasing less and less of a cap rate further driving up asset values. Vancouver is the recipient of capital flows of global money looking for a return.

So what stops this train? I say recession and liquidity crunch. In hindsight, where we are now will seem crazy I think in a few short years. Bulls make money. Bears make money. Pigs get slaughtered. Sharpen your knives gentleman and vangrl.


driving around vancouver has more ‘for lease’ signs than you would have seen in the last 40 years, vancouvers economy is the worst its ever been


most of the premium retail space outside of malls si now owned by Mainlanders to park money. They are not to worried about return on their money. just happy to have got it out and into a hard asset. They are usually firm on rents and would rather it be empty than give much of a concession. Just IMVHO



We are a group of intergenerational majority Asian immigrants or children of immigrants and we have complex multi-generational histories of displacement and resistanceI don’t know what’s worse – watching my community disappear or knowing that it’s going to happen. I’m experiencing both at the same time, in Chinatown and in Renfrew-Collingwood


In what way is that ironic? Is it because a person’s ethnic heritage makes them responsible for the actions of all others who come from the same racial group? If that is your thinking, you might want to consider taking a high school civics class. I believe you can enroll at VCC.


the movement to preserve chinatown is basically a movement to keep chinatown chinese.

“[Residents] don’t feel this is Chinatown anymore; what I commonly hear is it’s ‘Western Town’.”


Whats the point of getting a Canadian citizenship if there are no benefits.


Oh, dude. If you think the only benefit Canadian citizenship could offer is the right to buy a house in Vancouver, you are a prime example of the crazy thinking that caused this mess.


Because the goal is to bring in more revenue from foreign buyers, not to stop them from buying, which would result in no revenue at all. Note the amount, 4%, is so small as to make no difference in sales volume.


And Huffington Post:
“Vancouver Real Estate May Already Be Crashing: Stats”


Global too:

“Is the end near? Data shows Vancouver real estate bubble may be starting to burst”, Global News

“While prices continued to soar in June, a key indicator of the health of the market showed a dramatic decrease: the sales to listings ratio.”

“UBC’s Tom Davidoff, an associate professor at the Sauder School of Business and a real estate analyst, says the first signs of a bubble bursting might be sales volume slowing down and inventory rising. “


Davidoff says that a rising rental vacancy rate is a sign of a slowing market. I would have thought that, when the market starts to cool, people would not want tenants because they are trying to sell, and there would be fewer new investors/flippers who want tenants while they wait for appreciation to work its magic. I would not expect to see a rise in vacancies until the market has been falling for a long time and people give up on selling. Am I missing something?


I think it works the other way around. When the market is rising, people still make money with empty properties, so they have less incentive to rent them out.


Has it started?

I sure hope so. The average price on the Westide over $3 Million! WTF. The westside was a middle class neighbourhood. Now only money launderers can hope to buy there.


I see that the first stats on foreign buyers are out. I really am looking forward to some of the great analysis being published in the media because based on the numbers, there are some very big issues (some of which are not obvious) and these key things need to be communicated. 1.) Firstly and most importantly, the percentage of purchases being made by foreign buyers (i.e. the ~5% run rate) is not really relevant. We are not talking about a market where every transaction represents the sale of a new product being sold (i.e. sales of televisions, cars, shoes, etc) – We are talking about resale and new trading in a limited fixed stock of housing- and the removal of some of this stock gradually by sale to a foreigner (this is essentially an export of the limited resource).… Read more »


The Vancouver Housing blog looked at exactly that issue. A couple posts ago, he also found 39% of additional condo supply being sucked up by foreign buyers!


Grrr, my US transfer didn’t happen as the damn FTC ruled against our transaction. The backup plan was to close our Calgary HQ and relocate to Vancouver to save lease costs (we own the building in YVR) but…housing is too costly for relocated employees, WTF???

I’m asking for fat cost of living raise in light of this news!


Where did the login link go???


Here in Stanley park right now.

Busload after bus load of Asian tourists.

I don’t think anything can be done now. The 10 year visitor visas have done us in. The lifting of Mexican visas are going to put enormous pressure on rents some next spring.

Grab what you can. That’s what everyone is doing as they don’t want their family on the streets. It’s happening. Now.


Nice try Oracle.
The only thing that’s happening now is more indications that we’re at the peak. The only government action that will have any effect now will be China invoking unprecedented methods to stop capital outflows as the popping of their credit bubble cannot be averted. As soon as local boomers who have been scared of selling too soon begin to understand this, this whole thing could turn into a rout.
Your advice to (grab what you can) pissed me off enough to up-vote your post by mistake.


Right on franko, China is stopping the capital flight into foreign housing.


Dude, i just saw a sea of Asians tourists… freaked me out.

Best place on meth

What do you mean by “Asian”?

Burmese? Uzbek? Thai?

Please clarify.


“Free real estate flipping seminar streams people into $50,000 course”, Vancouver Sun

““Be my next real estate millionaire,” touted ads for the free seminar. “People in the Vancouver area are making millions flipping houses.” Nick will teach students three surefire steps to making up to $50,000 a month flipping homes, his ads say. Vertucci’s tag line slogan: “Get in, get out, get paid!””


Now that’s showing us how out of hand things have gotten. Tom Vu’s most expensive seminar, a week in Florida, cost only $16K.


Here are my thoughts everyone. Firstly – the 5% number of foreign purchasers is probably correct (based on their definition). However- please note that this is actually a massive number – given the structure of this market. See below my thoughts – but the main number people should be focusing on is the amount of the foreign investment in total compared to our new housing starts. — The foreign numbers released yesterday were huge – – – it’s not super evident from people but here are my thoughts. I hope this info ultimately gets to the media as basically, 100% of our real estate is represented by foreign buyers – and below are my reasons why I believe it. 1.) Firstly and most importantly, the percentage of purchases being made by foreign buyers (i.e. the ~5% run rate) is not… Read more »


“The foreign sales act almost like an export.”
I wonder whether there is data that would show what percentage of housing stock currently with foreign ownership when resold ends up again in foreign ownership.


sounds ponzi-ish, when does it all stop? are we just building to satisfy offshore money inflows then?


CHINA is on a collision course with the US over a bitter territorial dispute that has sparked fears of a new global war breaking out NEXT WEEK.



Rocker Guy

I have scraped all of Paul’s inventory stats (at least, all that my scraper could scrape). Here’s the juice:

Inventory Chart:
New minus Sold Chart:
Raw Data:

The inventory graph is astonishing, and completely explains the explosion in prices. However, check out the new-minus-sold chart and you’ll see that July 2016 is bringing forth a dramatic change in the market…


Thanks ttul – awesome. *thumbsup


Bringing up the racism issue to how they silence you Caucasians.

Am I racist for being anti immigrant? Then they just up. I’ll go on record saying uncontrolled immigration is a negative. We need to cut numbers by at least 50%. And cut temporary immigration by at least 75%.

I say this at work. And if anyone doesn’t like it, they can’t play the race card on me 🙂


They can! The race card can be played on anyone. They’ll just say you’re a self-hater or one of those immigrants who wants to close the door behind him. Not to worry, post-modern Marxism has thought of everything and every way to bring down the West. It’s unstoppable. Equal shares of poverty for all is what it’s after.

Combat roach

Timing or else but those cartel shill-coocksuckers are still restless. Yet another shameless journalism piece of shit..

Is racism part of the housing issue? Of course it is


The writer, of course, ignores the efforts of the RE industry itself to racialize the issue:

The culprit still retains a who’s who client list:


The writer calls it an “unprecedented creation of wealth for British Columbians”. Really? How did that work out in the US or Japan? We are seeing unprecedented housing costs and unprecedented debt for many. For a normal home owner it makes no difference because they still have the same house. It will just cost them more to move up in the future. Only those selling and not buying again before the bubble bursts benefit. That is few compared to those who have that added debt burden.

Combat roach

Canada should learn from Indonesia how to deal with locusts and still maintain bilateral relations instead of giving up on their shit.

“Rather, far-ranging Chinese fishermen, subsidized by the Chinese government and protected by Chinese Coast Guard ships, are increasingly poaching in Indonesian waters. That’s bad news for a country that depends heavily on its fish and seafood exports, and a big reason why Indonesia has taken to blowing up vessels it catches fishing illegally, whether Chinese or not. The foreign fishing crews are usually repatriated, while Jakarta makes a point of publicizing the destruction of the boats to signal to China and others that it will not tolerate any encroachment on its fishing grounds.”


“June Jobs Report Raises Chances of Fed Rate Increase in September”, Wall Street Journal

“Relieved Federal Reserve officials aren’t likely to see Friday’s strong jobs report as a reason to raise short-term interest rates when they meet later this month, but the numbers do increase the odds of a rate move as early as September.”


“Experts, investors see warning signs of real estate slowdown in Vancouver”, Vancouver Sun

“While the benchmark price for typical single-family homes rose to $1.56 million, according to the Real Estate Board of Greater Vancouver, the number of sales of those houses dropped by about 19 per cent. In east Vancouver, detached home sales declined by 26 per cent, and on the west side, by 36 per cent.”

“Those declines come even as the number of listings rose.”




In the last thread, I advocated that we raise interest rates to combat housing prices. The problem is that the bank only controls the overnight rate and not the long rate (short of QE intervention). The problem that I see with increasing interest rates is that long rates are way down right now. The ten year yield fell to 1.48% today! If we flatten the curve or even invert it, then it raises the prospect of recession. I think we need to do it regardless.


Any drop in Canadian housing prices would trigger a massive recession anyway. The yield curve would be the last thing to worry about when discretionary spending goes to zero overnight.


If the rate is raised tomorrow I will immediately go out and buy a couple Le Creuset pots and pans to help the economy. That’s my promise. If everyone promised to go out and spend a couple 100 or 3 on consumer luxury items the day they raised the rates, maybe they would raise them!

… But I won’t buy the pink ones. The store carries those, I am told, to sell to who they refer to as the Chinese customers since pink is a very popular colour in China yet the ladies (hey what about men who like to cook?) are unable to get the pink ones over there.


Doesn’t anyone think this would work?

In financial circles are there predictions in numbers about how much would be take out of the economy say 1 week or 1 month or 6 months after the rates go up 1/2 a point? Or are the financial people’s predictions always in terms of measuring rates of change — ie slowing down of rates of growth? But if so, I don’t understand how the latter thing can be figured out without the former. Can any one point me to the relevant wikipedia article, even? Also, if there are any well justified and explained predictions (with numbers) about how the economy would change if the rates went up to X degree, where can they be found on the internet?

Thanks for any pointers.


Dave you sound like a real bear. Wishful thinking and all. Interest rate policy is with the Feds. They have other things to think about than priced out or over-indebted Vancouverites. Plus, should the FED tighten 2016/2017, Poloz probably won’t budge. I don’t have to tell you what that will bring.

What the heck happened to you? You used to be so right but you placed your bets all wrong?

Combat roach

Some people just smarten up over time…


I’m still invested in real estate, just not Vancouver. I’m building a house right now. So my views aren’t really caused by sour grapes. That said, I probably benefit more from a crash because maybe I buy more. Either way, I wouldn’t say my opinion is wishful thinking. I work on my biases BTW, which is why I think I’m good at calling markets. Don’t get me wrong, I have no expectation that he will raise rates. I’m simply pointing out it’s a quick fix to stopping the housing bubble. I think the BOC should concern themselves more with asset bubbles. The problem we have is that the western world is stuck in a low growth high debt cycle. Interest rates look to remain low for a generation. Vancouver has been the recipient of capital flows that have nothing to… Read more »


What does not in Vancouver mean?


I ain’t gonna stalk you? Going back to Ontario? Nova Scotia?

Only solution is to cut these numbers.

Only solution is to cut these numbers. Don’t be fooled by other measures. They will only increase rents.

Immigration update for first 6 months of year:

Immigrants: 132,000
Refugees: 15,000
Foreign students: 178,000
“TFW”: 95,000
Supervisa: 20,000
10 year visitor visa: 280,000
plus lifting of visa for Mexicans in a few months.

Time to defend Canada is now.

Rents are skyrocketing.

I\'m With Stupid V

Oracles got a point?