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Friday Free-for-all! August 19th 2016

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364 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 to deal with 200+ comments
–Canada a real estate nation waiting to crash
–Industrial market nothing like residential market
–Housing Action for Local Taxpayers
–Auditor warnings on real estate ignored for 20 years
–Subprime lending is booming
–Working for free in Vancouver
–Is real estate market in free fall?
–Agent: best time to buy in 2 years
–Absorption rate at 25%
–Sold as percent of inventory by day
–Vancouver moves ahead with affordable housing
–

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

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[…] wrote a good summary of what the market looks like currently, how media headlines can get it wrong and where we might go from […]

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bullwhip29

Controversial citizen William Yan will pay the police $43 million as the final settlement in a money-laundering inquiry
http://m.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=11699236

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bullwhip29

Enough with bogus surveys on ‘livable cities’
http://vancouver.24hrs.ca/2016/08/21/enough-with-bogus-surveys-on-livable-cities

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Openhousemassacare

Craigslist ad for scamming 15% tax

Hello everyone, as you all know the government of British Columbia has changed the rules on foreign buyers! who now have to pay 15% tax to buy the property in Vancouver. If you are interested in buying the property here, please contact me with your phone number and I will arrange a transaction without you paying 15% tax. A monthly management fee will apply to manage the property. buy in Vancouver B.C still make sense.

http://beijing.craigslist.com.cn/reb/5713405571.html

https://pbs.twimg.com/media/CpYtaG_UkAA_qT6.jpg:large

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openhousemassacare

Richmond highest concentration of foreign buyers. Detached sales Aug.1-15 dropped from 89 year previous to just 12 so far

https://pbs.twimg.com/media/CqguuTmUsAAs9sw.jpg

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Combat roach

And yet idiots ague, it isn’t about organized action of creating Chinese strongholds in the western world with the silent ethnic cleansing backed up with shitload of freshly printed money. And it just slowed, not stopped.

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bullwhip29

this is effectively the same as watching retail sales drop after boxing day. in no way am i a permabull but many sales pulled forward prior to tax deadline. best measure will be to compare next spring/summer with same period in 2016. no doubt it will be lower, but not by 89%

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Slava

Is it time for a class action lawsuit against the CRA for willfully ignoring their duties and not auditing investor immigrants since 1996 to present? http://www.scmp.com/news/world/united-states-canada/article/2005794/canada-tax-chiefs-knew-foreign-moneys-big-role#comments
Is it time to demand that investor immigrants report their global income which is actually mandatory for every resident, and do this before being able to purchase real estate?
Or
does Canadian Law apply only to Canadians and Landed Immigrants who work and pay taxes in Canada? Isn’t that racist? Our laws do not apply or are not enforced when dealing with foreign investors? They are special or a privileged class?
Remember Tax fraud has no statute of limitations!
Or is the CRA just there to harass individuals and small businesses for questionable expenses or an excess of moving expenses………

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Oracle

High house prices in Canada are caused by foreign money inflows. The more people come in as immigrants, the more money keeps coming in. Serves the present homeowners well and serves the corporate interests well. Its like saying on a sinking ship without enough life rafts that only the people whose last names begin with the letters A,B,C, or D will get left behind, the vote will pass as the majority will want to live. Make no mistake, Harper, Trudeau, and even the NDP are serving the same interests. Their parties have been infiltrated as have been all the relevant ministries.–> Thats why it seems like the gov is making stupid decisions when in fact they know exactly what they are doing. The new Free Trade Deal with China is going to be a disaster for renters who are of… Read more »

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Slava

My post is about encouraging a class action lawsuit with proof that CRA has neglected and purposely ignored audited global income from foreign investor immigrant settlers since 1996.
If the lawsuit is won and compels the CRA to audit all these individuals since 1996 to present, you watch how fast the foreign investors dry up and real estate prices will be then set by local demand.
Are you a Sikh Canadian Chinese Kitchen Mansion House builder by any chance?

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Oracle

Be careful with CRA.

Big money can pay off and evade. Little guy becomes sacrificial lamb.

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Slava

You cannot pay off the CRA. They were knowingly refusing to audit. This has been proven.
You please be careful with the House Building, real estate selling, or condo investing with high leverage or low equity! 🙂

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Mortgageslave

Another day, another mindless post from Oracle. This guys obviously has nothing better to do than spread the word from Realtor101 handbook. Immigrants are lining up to pay the 15% tax!! Seems to be slow these days in Realtor world I guess.. Oracle please posts something that requires a brain cell or just get a life. Can’t wait for the next enlightening post with zero facts from Oracle. Wealthy immigrants coming to invest in the biggest bubble in the world and get taxed on it!! LMAO, MORON!

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Oracle

You are a troll trying to deceive.

Name calling ? Lol. How intellectual.

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Oracle

And you really think I can influence the market with my posts here? LMAO

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Slava

It has more to do with, that you are deathly afraid of what might come to pass, and your commenting here is to make yourself feel better…

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Combat roach

Have you contacted Christine Duhaime with Duhaime Law about the proposal? I believe there are few lawyers that would gladly help in submitting such class action lawsuit . People succeed against faulty products, car seats, etc. so why not against faulty laws which parasites generously exploits at the expense of local people.

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Slava

Let’s do it. Although many thinking about doing this can themselves be potentially afraid of retaliatory CRA audits…
This was noted by two lawyers in a news piece last year, who declined to be identified.

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bullwhip29

Vancouver’s housing bubble might not be one after all
http://www.businessinsider.com/vancouver-housing-bubble-chart-august-2016-2016-8

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bullwhip29

Why Vancouver rents spiked in 2016
http://www.metronews.ca/news/vancouver/2016/08/22/why-vancouver-rents-spiked.html

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bullwhip29

Canadians now spend more on taxes than on food, clothing and shelter combined, study finds
http://business.financialpost.com/news/economy/canadians-now-pay-more-tax-than-they-spend-on-food-clothing-and-shelter-combined-study-finds

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patriotz

Usual BS from the FI. They take all revenues collected by government, and then allocate them per capita to taxpayers. This ignores the progressivity of the tax system and transfers back to taxpayers. As well, they include taxes or revenues paid by foreigners. For example, BC’s new foreign RE tax would be included, as well as something like BC Hydro’s revenues from California.

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Madashell

Realtor Steve Saretsky ‏just Tweeted:
Sales remain very slow for detached in #VanRE.. Like scary slow

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UBC in Crisis Mode

It is Monday now, please start a new topic (e.g. “rent is based on income, NOT in Vancouver!”.

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Newcomer

It cannot not be based on income. What else can it be paid with?

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space889

You start accepting less for the same price. Instead of a 500 sq ft new condo for $1500 / month, you are now renting a $400 sq ft condo for the same price.

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Newcomer

How is that not based on income? You are saying that developers have to build smaller units because that’s all the market will bear because the market price for rents is capped by income. At the end of the day, essentially no household pays more than 50% of their income in rent for an extending period of time. They move to a smaller place, of further away, or share with more people.

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Best place on meth

300+ comments on a thread now.

Next month it’ll be 400+ to match new listings.

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CanNeverThinkOfAGoodName

We’ve all retreated inland a bit and are peering out over the cliffs waiting for the big tsunami to come in, hoping it doesn’t kill all our livestock and ruin our crops.

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space889

When the anticipated wait is over and the excitement is gone, it’s back to the old crickets and blaming the Chinese, but it’s not racist comments.

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Rand Assembry

See how “average” appears in quotes. After years of breathless reporting at face value the increasing average price, be prepared for articles that discuss the nuances of sample size, skewness, kurtosis, and 95% confidence limit to explain why the “average” isn’t really declining.

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paulb

New
244
Sold
149

TI:9509

http://www.paulboenisch.com

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Oracle

Wow.

Sold going strong

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best place on earth

i though nobody buys and sells anymore.

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Shut It Down Already

Just wait for the foreign tax effects to kick in. Any day now, right….?

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Bag it and tag it

244 is very big listings number for this time of August.
As for sales, low sales is an indicator that the market is overpriced. High sales, which 149 is not, means the price is right, but that could mean sellers are panicking and accepting any offer they get…

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space889

Like those bears who capitulated in the last 3 years, and can no longer post on this forum, and now are crapping in their pants & their over-leverage condo / TH going oh shit!? With an angry spouse?

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Best place on meth

Strong?

Is 149 now considered bullish?

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Confucius

Mostly condos and townhouses. You can see on Zolo that the sales mixture has changed a lot and sfh sales are plunging. Better clench your butthole real tight if you overlevered on SFH, cause you just dropped the soap in a prison shower and bubba’s ready.

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CanNeverThinkOfAGoodName

Are you someone who reads Garth Turner’s blog alot?

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southseacompany

“Ontario and British Columbia Home Sales Decline Driving Canada’s Housing Market into the RED in July”, Digital journal
http://www.digitaljournal.com/pr/3047254#ixzz4I6odGtK7

“According to data released today to The Wealthy Homeowner™, Canada’s housing market has entered a period of contraction in real estate sales a precursor to the release of pending data on the house price correction already underway.”

“Since February of 2016, the two provinces in Canada that have been supporting gains in the national housing market have watched as their markets slowed. “

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Combat roach

Run McCallum, run… We need more Chinese to get Housing Market back into the GREEN!

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would-be buyerl

Yes, let’s do more business with China:
https://www.bloomberg.com/news/features/2016-08-22/china-s-best-bank-called-mirage-of-shadow-lending

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space889

Duh…prime RE land that will be rezoned into mix commercial + residential high density builds. The only question is how big and how high can they built. Why wouldn’t people rush and buy up any un-developed land? Especially if the subway is going in as well. Unless you believe Vancouver population will start shrinking back to 300K like 30 years ago?

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southseacompany

“Dollar Rises on Greater Hopes for Higher Interest Rates”, Wall Street Journal
http://www.wsj.com/articles/dollar-rises-on-greater-hopes-for-higher-interest-rates-1471876634

“The dollar rose Monday as investors grew more optimistic about the prospect of U.S. interest rates increasing this year.”

“Investors have been reluctant to bet on higher U.S. interest rates in recent weeks after disappointing economic growth and productivity reports. But upbeat comments from Federal Reserve officials over the past week have brightened the outlook for rate increases this year.”

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Kim

People are also overlooking the fact that the dollar dropped almost 10% against the yuan back in December-February this year compared to 6 months ago. It’s recovered somewhat and may be a factor as to why activity has slowed (in addition to the tax and seasonal slowdown). In general, the dollar has dropped quite a bit against the yuan (was around 6.5-6.8 in 2010 to a low of 4.8 earlier this year). Why people never discuss the weakness of the dollar especially against the yuan is puzzling.

The USD will be heading higher relative to cad. I would move my money to USD. Holding US cash may be preferable to trying to catch a falling knife (a double whammy-falling CAD and falling house prices)

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Bag it and tag it

Dude…are you on crack? 4.8 earlier this year? Nobody’s discussing it because it didn’t happen. The trend of the yuan has been negative and the slide will continue…
http://www.xe.com/currencycharts/?from=USD&to=CNY&view=1Y

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Bag it and tag it

OK, I guess you were referring to CAD and not USD. For the record, when people refer to ‘the dollar’ it means USD…

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space889

Yes, you totally should!! Go Kim Go! Your investment genius and acumen awe us all. Have you ever consider dropping the doctor gig and make more $$ as an financial adviser or hedge fund manager? A good one managing a few hundred million private client assets or a few billion in funds can easily clear $5M to $10M+ a year. Hard for a doctor to beat that. And you will also be helping people just like a doctor! Hundreds or thousands of people and curing their financial health issues!

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southseacompany

“What will Vancouver’s housing market implosion do to Seattle?”, Curbed Seattle

http://seattle.curbed.com/2016/8/22/12570018/vancouver-housing-market-implosion-seattle

“As crazy as Seattle’s real estate market has been, Vancouver’s is arguably more extreme – and may be imploding in an extreme fashion. What else would you call a 20 percent drop in one month?”

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Oracle

Nothing. Parents and grandparents can’t immigrate there. No Supervisa.

So nothing

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tim

Seattle is the “control group”, Vancouver is the “experiment group”.

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southseacompany

“Canadian bank investors brace for sharp rise in sour loans when Big Six report”, Financial Post

http://business.financialpost.com/investing/market-moves/canadian-bank-investors-brace-for-sharp-rise-in-sour-loans-when-big-six-report?__lsa=7859-ff46

“anada’s biggest banks are set to report another increase in losses from loans to oil and gas firms in the latest quarter, while concerns about inflated house prices threaten to cloud their future prospects.”

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southseacompany

Van Der Zalm against the tax:

“Metro Vancouver residents may grow to regret foreign ownership sales tax”, The Province

http://theprovince.com/business/real-estate/bill-vander-zalm-metro-vancouver-residents-may-grow-to-regret-foreign-ownership-sales-tax

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Dave

If we regret it later, we can always get rid of it. In hindsight, they should have called it a temporary tax to be revisited in 5 years. But, the reality is that we needed to do something and at least one level of government has taken action. I won’t hold my breath on the others.

The next step in the housing crisis is to enable more supply in my opinion. Demand may or may not have been impacted by the new tax, but it hasn’t done anything to create more supply of housing. The City of Vancouver and Burnaby should increase allowed density on every property by 10% overnight. Is that a bonus to land owners? Sure, but at least it will enable stuff to get built.

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Zero Down Forty

2001-2011
Population increased by 123k households
Housing stock increased by 163k dwelling units

http://www.metrovancouver.org/services/regional-planning/PlanningPublications/2011_CensusBulletin1-Pop_and_Dwell.pdf

Supply is hardly the issue, especially for condos, as supply has outpaced population growth yet prices still rose dramatically. Typical of a bubble.

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Its_the_ALR_stupid

The puzzling thing is that that doesn’t explain why rents are skyrocketing right now. By those numbers, they shouldn’t be, since rents are traditionally much more closely aligned with supply/demand fundamentals than prices are. So it would seem that either population growth is being under-reported or much of the available housing stock is not actually making it into the rental market (Airbnb, empty condos?).

Whatever the reason, it doesn’t seem like more supply would be such a bad thing.

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Oracle

Rent increases aren’t puzzling to me. I told you guys why yet you still don’t seem to get it

And dwelling formation: demolish 10 homes and build 10 in place counts as 10 housing units started. In reality net is zero.

The 1% stay in power to to the naive 50%

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Zero Down Forty

The numbers in the Metro Van report show net increases in total dwelling units, not housing starts.

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Bag it and tag it

2 reasons for rent increases. First is because foreigners are gobbling up supply and leaving them empty. 2nd is because of big spike in tourism. All you have to do is look at hotel prices these days compared to a few years ago. This means AirBnb has become very profitable, and landlords are going this route over long term rentals. You can say all you want that rents are linked to incomes, which is true-ish, but just means renters either get pushed East, or they improvise and stuff more people into the unit.

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Zero Down Forty

Perhaps those surplus units are sitting empty.

Supply’s a good thing… in the end, when the panic sets in and investors try to dump these excess units.

In the meantime, don’t bother trying to find a rational explanation for an irrational market.

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space889

Apparently bears don’t believe there is any housing shortage, especially the SFH kind, in desirable neighbourhoods. If only it weren’t for the bad scummy Chinese, SFH in areas like Dunbar, Shaughnessy, Kits, etc would all still be $600K to at most $1.2M.

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space889

So that household number includes any of the following?
Foreign students?
ESL students?
TFW?
Tourists with temp working permits?
All those cousins, grandparents, relatives that Oracle is bringing in every year?
Former live-in nannies / domestic helper / *cough* mistress *cough* who are now free and stay in Canada without worry?

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Zero Down Forty

A household is all the people living in a dwelling unit. One household could include all the people you mention – but it is still one household if they are all living in the same unit.

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patriotz

Remember this is the guy who got the foreign ownership ball rolling with the fire sale of the Expo lands, and his own Fantasy Gardens (the later resulting in criminal charges that ended in acquittal, but forced him from office).

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Its_the_ALR_stupid

So to summarize Bill Van Der Zalm’s solution to Vancouver’s housing affordability crisis:

“We need more money from Asia!”

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Kim

http://www.theglobeandmail.com/report-on-business/video/video-why-vancouver-home-prices-are-dropping/article31487549/

Why Vancouver home prices are dropping… a video, but not on the front page of the Globe. Sick and tired of the MSM burying price drops. This is why when the market collapse comes, people still think RE is going up… because the MSM NEVER REPORTS DROPS or buries the news.

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space889

I remember lots of leaking condo horror stories being reported, so much so that condo was dead for like almost a decade?

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southseacompany

“Vancouver real estate vulnerable after tax on foreign buyers: Fitch”, Globe & Mail

http://www.theglobeandmail.com/real-estate/vancouver/vancouver-real-estate-vulnerable-after-tax-on-foreign-buyers-fitch/article31494768/

“With a new tax on foreign homebuyers in Vancouver expected to slow purchase activity, there is a greater risk that the city’s lofty real estate prices would be vulnerable to a potential jump in local unemployment, Fitch Ratings said on Monday.”

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bullwhip29

Eviction complaints soar in B.C.’s hot rental market as landlords break rules to secure higher rent
http://business.financialpost.com/personal-finance/mortgages-real-estate/eviction-complaints-soar-in-b-c-s-hot-rental-market-as-landlords-break-rules-to-secure-higher-rent

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space889

Any increase in punishments and you can forget about getting month to month rentals. But then I guess the NDPs can always disallow residential rental leases and only allow month to month. And then sit back dumbfounded about why rents go up even more or even less rentals come on market.

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Funkey monkey

Here is something to chew on. This house is for rent for 4700 a month minimum a 2.5m dollar house. With 20% down at 2.19% your mortgage still 8500 per month. https://vancouver.craigslist.ca/van/apa/5744890755.html

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HAMster

When I see “utilities included” in the rent I pretty much know they are scamming the system. Next they will want the rent in cash…

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Kim

I made about 500k last year and banks would not lend me more than 1.5 million. Who are these people who put down 500k and who can still buy a 2.5 million dollar home? You still need to borrow 2 million. People must put down more than 20%. Still if you had cash the yield is barely 2% after subtracting 500 a month for property taxes. Less if you add in transaction costs, maintenance etc.

Buy some Telus stock instead and get 4% dividend yield with twice a year dividend increases through to at least 2019 and no headaches.

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best place on earth

let me guess, you have ton of cash and gold stuff in your pillow, and you make ton of money in the stock market!

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space889

Nah…Kim’s not on here to boast about all the $$$ s/he is making in the market? Kim is simply here to help make the bear case that renters do get ahead than homeowners, and investing is easy. You don’t need to pay mutual fund fees, or even 1% to people like Garth to manager it for you.

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space889

Kim, do you think you can start a blog or join forces with those Millennial Revolution couple to bring your investment acumen and success to the masses? So they too would have a chance to achieve financial health and leave the housing cult? Especially for those of us who ain’t got a $1M+ to give to Garth to manage?

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Newcomer

And this is one of the better deals for a landlord because the house does not require renovation and so might get that 4.7 K. Many 2 and 3 M houses are going for a lot less than that. This is before we talk about taxes, maintenance, vacant months, etc.

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Billybonger

Isn’t the drop off in sales an indication that something has changed?

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UBC in Crisis Mode

It may take 6 months to a year for sellers to realized that the market has changed, so either withdraw the listing, or lower the price.
However, I don’t think a local doctor can afford a $3 million house, after the price dropped from $6 million.

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Kim

As a doctor, I can afford a 3 million dollar shack but I’m not stupid enough to buy one.

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