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Toronto’s house price jump stirs fear offshore buyers will head east

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Kim

Canada sheds 31k jobs, US adds 255k. Canadian dollar plunges another 1%. US wages increase 8 cents an hour. Increasing odds of US raising rates sooner rather than later. Prepare for either BoC to raise rates, or the dollar to plunge even more. Either way, those indebted Canadians will not be able to afford their over bloated mortgages. This time though, I’m not sure there will be buyers to buy their overpriced real estate.

Member

Newcomer

Yup. Our unemployment rate is 6.9 and theirs is 4.9, which must be why our houses cost so much more than theirs. After all, who needs a job when you’ve got a house 🙂

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Combat roach

“who needs a job when you’ve got a house”

And you don’t… just look all those students, housewives, parents, accidental tourists, etc. The proper model of superior and progressive society.

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Bear Vancouverite

I think there’s still a lot of uncertainty when the Fed will raise rates and at what pace the rates will rise. US inflation is slowly rising but is still actually quite low right now and the BOE just announced QE as well as a rate cut to 0.25%. The US will be very hesitant to push their dollar too much higher as it makes them very uncompetitive in the world. My thinking is that if Fed raises rates it might be another 0.25% in December, and maybe another 0.25% each quarter next year. This assume Brexit and Euro uncertainty doesn’t spill over to the US, and assumes Emerging markets don’t cause other economic ruffles. Here’s a table of US inflation history. http://www.usinflationcalculator.com/inflation/current-inflation-rates/ You can see we’re by far not at a point where the Fed will be under much… Read more »

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wwww

http://shanghaiist.com/2016/08/05/straddling_bus_scam.php

Chinese state media says that the ‘straddling bus’ is nothing more than a big scam

wow, shocker!

Member

B.C. foreign buyers tax ‘will definitely have an impact on Ottawa’

Says who? You guessed it:

An Ottawa-area real estate agent says Ottawa’s housing market will feel the impact of Vancouver’s new foreign home buyers’ tax and could become the number two destination for foreign buyers in Canada.
Charlie Sezlik’s company markets luxury condos and homes in Ottawa to buyers in China.

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bullwhip29

LOL…and it begins.,,, ottawa the new vancouver. there are still plenty of “tax free” zones outside of gr vanc for foreigners to park their cash which are far more appealing than ottawa.

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Zero Down Forty

Now the “Lee Sisters” can get a new gig in Ottawa.

$I\'m With Stupid V$

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I\'m With Stupid V

Friend just bought a 1.4 mil house in Richmond.
I believe he said the dp was about 400k gifted from his parents mostly.
How in the hell did he get a 1 mil mortgage with his income of sub 100k/year.
Oh yah he also has a near paid off condo (which he must have drawn money from) worth about 380k which he plans to rent out.

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bullwhip29

If we wind up with a loonie trading back in the mid 60’s then entire effort to cool market via 15% tax ends up being all for not and were all sitting here in a yr or two from now wondering why prices are still climbing (at least in nominal terms)

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patriotz

“entire effort to cool market via 15% tax ends up being all for not”

It’s still the same 15% loss from the get go regardless of exchange rate. That’s the discouragement.

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Kim

Well the media and the typical Canadian won’t see it as they will think that there real estate actually went up when you would’ve been better off just holding US cash.

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bullwhip29

better yet, earning US cash

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Kim

That’s why I have over a million bucks in the US market. In Bellingham today spending my hard earned dividend cash.

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bullwhip29

true, but at the end of the day regular folks (that dont own RE) want to see lower benchmark prices. im not so sure that will happen… it is still entirely possible that the so called crack down on those that intend to exploit loopholes and other work arounds to dodge the tax wont really have any teeth. it is par for the course that a politician would say something, then not follow through on it. the way krusty and co run things, i betcha there is another card to be flipped. still. stay tuned…

Member

Newcomer

There are two sides to that. If prices fall, the fall will look bigger to foreign buyers.

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BubbleTea

From Ross Kay: Its 8:21 pm in BC and the 127 Billion Loss in Net Wealth has gone unreported. Its amazing what 30 day sales results and 12 months can hide.

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BubbleTea

Also according to Ross Kay: VANRE To be perfectly precise. Home prices in Vancouver dropped 10% before the tax was even being considered.
Nice try Krusty!

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OPENHOUSEMASSACRE

https://ca.linkedin.com/in/hamed-ahmadi-b1793522

YLTNboomerang -I looked Hamed Ahmadi on BC Hydro’s salary publication (all are listed) and no Ahmadi listed….unless he was just hired but 4 years seems long for a PhD unless he skipped the masters.
————————-
He was contractor with BC Hydro before he got hired as Engineer last October that why his salary was not in the 2015 list.

Member

/dev/null

YLTNboomerang – As someone who took 7+ years for a PhD, 4 seems short to me. 🙂 (I was working at the same time so that’s the excuse I use to make myself feel better.) I have a great job and income now but I should have just skipped the education, taken the 6-week RE license course and bought a few condos. I’d be way ahead. But liking my job and actually helping people help me sleep at night in my little old rental. One aspect of the bubble that nobody seems to discuss is that it’s almost impossible to get experienced healthcare specialists to move here (or even to stay). Candidates for positions with $300k salaries are flat-out stating that housing prices are the only reason they won’t come. Having $5M in home equity is great for the boomers… Read more »

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Combat roach

Why he has to buy for fuck sake, can’t he rent as the most regular new immigrants do when they come to Canada?

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patriotz

He isn’t even an immigrant yet but a TFW, which is why he has a problem with the new tax.

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Best place on meth

There is no problem, he can rent.

Member

Wow, his Linkedin photo sure is dated…I guess he wants to look youthful to employers having just finished University at what looks like mid to late 40’s.

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OPENHOUSEMASSACRE

His works for UBC
https://scholar.google.ca/citations?user=8WU-q30AAAAJ&hl=en
http://www.ece.ubc.ca/~hameda/
http://www.ece.ubc.ca/~hameda/CV.pdf

Member

VanRant

“Chinese Media Warns Canada’s Housing Crash Will Put U.S. To Shame”
“This crisis threatens the stability of [the Canadian] financial system.”
Shots fired! While our media has been pointing out how Chinese buyers are driving up real estate prices, the Chinese media has been dissecting our economy and government, and warning Chinese buyers of the dangers of owning Canadian real estate.
http://www.huffingtonpost.ca/stephen-punwasi/canadian-housing-crash_b_11349292.html

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Combat roach

Any normal society would be in rioting chaos until this crime and scam are not sorted out and those responsible brought to justice. How this system still keeps functioning, do we fool ourselves that we live in a democracy and organized society, stunning… “While you should approach all media with a grain of salt, they bring interesting points to the table that should be part of the discussion. In Vancouver’s market where mayor Gregor Robertson made almost four times his annual salary selling a home he lived in for only two years, and B.C. Finance Minister Mike de Jong has a stake in seven homes (only five mortgages, though), are Chinese speculators the problem or are all speculators contributing to the problem? Also, as Canadians we tend to not discuss things like declining income, which is unfortunate because it’s a… Read more »

Member

“do we fool ourselves that we live in a democracy”

It is a democracy. The people who are fooling themselves are those who think that everyone else wants what they do.

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bullwhip29

ID checks aim to catch real estate exam cheats
http://vancouver.24hrs.ca/2016/08/04/id-checks-aim-to-catch-real-estate-exam-cheats

“The Real Estate Council of B.C. is requiring government photo ID checks during licence applications for the first time…”

>>> seriously?

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MikeS

I cannot fucking believe this wasn’t already required.

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bullwhip29

Renters in Kamloops being priced out of market thanks to high price of Vancouver real estate
http://infotel.ca/newsitem/renters-in-kamloops-being-priced-out-of-market-thanks-to-high-price-of-vancouver-real-estate/it33333

Member

Newcomer

Brough to you by your friendly realtors association.

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Oracle

BC is booming due to uncontrolled immigration. It is benefiting homeowners (relatively more wealthy than renters) and businesses. It is harming renters and working newcomers.

This has created division in society and there is no turning back. Renters and the working class have to fight back. Its now or never.

1) End all Temporary immigration streams. Especially the scam that is “Foreign students”.

2) Reduce immigration levels to average of G7 nations.

3) Skills shortage? Educate those 20 somethings already here.

4) Declining population? its not declining. Even then, double the baby benefit so people have more kids.

This will save whats left of our transportation, health, and education infrastructure for our kids.

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Combat roach

“BC is booming…”

What the fuck is booming??? Fancy car dealerships?

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@Naive Newcomer

It IS booming for half the people. You’re just on the have not side.

Thats the truth. Otherwise you wouldn’t be on this blog.

Member

CanNeverThinkOfAGoodName

Not true. Or at least not necessarily. I know for a fact that there are people on this blog who are quite wealthy (because or not because of the crazy housing market) and yet who have genuine concern for social well being, for the well-being of their community and country and who speak out for that reason. Also, witness MC, the guy who shorts. So, not true, not fair to Combat Roach, and also not enlightened about how people around you might think and approach life.

Member

“It IS booming for half the people. ”

That’s only if you count the money you could get from selling your house as money in your pocket today, which unfortunately is what most people do.

Member

BC is the only province in Canada booming due to consumption driven by inflated real-estate. I’m just happy that the other provinces are faltering as the business I am in sells 2/3 of our production to the US and every penny decline in the loonie is $1.8M more annual OCF. I want housing to correct so the generation after me isn’t screwed . We likely will never buy in Vancouver as we are now happy in our rental place with a 10yr fixed cost lease with reduced rent as we are going to renovate the place. 10 years from now we will be looking at retirement and will probably move to a farm somewhere in the mountains.

Meanwhile, I made over 10K today in my personal un-leveraged portfolio on FX alone!

Member

Newcomer

Immigration always has been the Canadain way. If you don’t like it, you could always move to a country with traditions that are more to your liking.

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@Naive Newcomer

Sure if you want it that way. lets make sure your citizenship is worth zero. Naive people like you are destroying Canada….or maybe purposely.

The TTP will sign away the rights of Canada to control foreign workers. FYI.

make sure you have a foothold in another country.

Member

Newcomer

Ask your doctor if anti-paranoia medication is right for you.

Member

CanNeverThinkOfAGoodName

In defense of Naive, that’s not a very fair response to his/her comment. The pace of globalisation is too fast, and the worry he brings up about the TPP is relevant.

Guest

Hahaha

Hahaha. That’s it?! That’s your response. Hahaha

Now make sure each of your kids has a paid off detached home given to them at age 21. If not, good luck to them.

In Asia, wealth stays in the family transferred from generation to generation. And grows. And the people work at common wages.

Shouldn’t have told you this…shoulda let you experience the misery in 20 years.

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GarthT

http://www.greaterfool.ca/2013/05/29/a-downward-spiral/

There is no such thing as foreign money!

Read my post of a few years back. It ended May, 2013!

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Best place on earth

Only fools read your posts

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Best place on meth

Throwing out some numbers with regards to the monthly price increases in the overall market since the beginning of the year.

Jan +1.8%
Feb +2.6%
Mar +2.4%
Apr +3.7%
May +5.2%
Jun +3.2%
Jul +1.4%

Aug ???

Guest

Best place on meth

And for detached only:

Jan +1.8%
Feb +2.6%
Mar +2.8%
Apr +4.5%
May +7.9%
Jun +3.2%
Jul +1.1%

Aug ???

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BubbleTea

In 2008, housing was crashing hard and B of C came to the rescue with the emergency rate and saved the market however they kept the emergency rate low for the last eight year thous forcing the prices to almost double in Low mainland. Now the housing is crashing again, B of C have no more bullet left so this crash will be extremely hard. Time to pass the popcorn.

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True

They have 0% rates left. Imagine a 5 year fixed at 1.49%.

Member

Why would a Canadian bank lend at that rate when they can lend at a higher rate in the US, where they all have operations?

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Shut It Down Already

Perhaps the US doesn’t have infinite customers? Perhaps if somebody takes a mortgage with a Canadian bank they’re more likely to buy other products from them (credit cards, mutual funds) where margins are greater?

Ratehub shows a 2.19% 5yr today.

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Shut It Down Already

“They” can bring back the 0/40, or lift the CMHC cap. Lots of options aside from rates.

Member

Feds will do nothing unless and until GTA is in trouble. Christy broke it, Christy owns it.

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Its_the_ALR_stupid

http://business.financialpost.com/personal-finance/mortgages-real-estate/heres-why-vancouvers-property-tax-on-foreigners-wont-work

Why Vancouver’s property tax on foreigners won’t work

Quote: “The single-family housing stock has been relatively unchanged since 1991, although multifamily stock has more than doubled over the same period,” he said, adding that, to make housing affordable, the average price of a single family detached home would need to be cut in half to $700,000”

As I’ve said, there are 2 very distinct markets in the region: detached and condos. And due to severe supply constraints, detached will never, ever again be remotely affordable to the average family, even after a correction. Unless we either open up the ALR or end population growth. Neither of which is likely to happen.

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True

Very true. For my situation, I need a shock to the system that causes to drop by 30%. Then I will buy a detached.

If it doesn’t happen by election next year, then probably going to move south for the long haul. Will come back if need medical care or for pensions.

Member

Come back for what pensions?

Member

Blackened06

Just listed our place in South Surrey this morning. Townhouse, 1520 Sq. Ft, $660,000,
2 showings within 2 hours of being online. Fingers crossed we get what we want. I’m in the boat of being freaked and wanting my equity out.

$I\'m With Stupid V$

Guest

I\'m With Stupid V

What are you going to do, rent?

Member

southseacompany

https://www.biv.com/article/2016/8/canada-flirting-negative-interest-rates/

“Central bank flirting with negative interest rates, analysts say”‘, Business In Vancouver

“Last December, Poloz gave a speech at the Empire Club of Canada in Toronto and broached the subject of negative interest rates as part of the “evolution of unconventional monetary policies”.

“the idea is to float the term to help soften the blow if the BoC is forced to further cut the overnight benchmark rate, which sits at 0.5%.”

Member

realist

To paraphrase W.B. Yeats: “And the rough beast of NIRP, its hour come round at last, slouches towards Ottawa to be born.”

Member

southseacompany

Things fall apart; the central bankers cannot hold;
Mere anarchy is loosed upon the world,
The blood-dimmed tide is loosed, and everywhere
The ceremony of innocence is drowned in debt;
The best lack all conviction, while the worst
Are full of passionate intensity.

: )

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Newcomer

Works pretty well, actually!

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Best place on earth

Oh no,it is the end of mankind. Go hide, stupid bears.

Member

realist

No, no, not the end of mankind. Just the glimmer of the end of positive interest rates in Canada. You know, the kind we’ve had since the days of New France, and in the rest of the world for, oh, say, 5000 years. Nothing to worry about, tho!

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realist

LOL! Thank you!

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Best place on meth

Polozer, along with all central bankers around the world should have a get together where they all take cyanide and make the world a decent place again.

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Kim

Prepare for rampant inflation, not just house prices but all goods.

Member

Newcomer

Every central banker’s wet dream, but nobody has any success in making that happen. Japan has been trying for 25 years and prices are still going down!

Here’s an article from a while that explains what it’s like on the ground.
http://www.nytimes.com/2010/01/30/business/global/30deflation.html?_r=0

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Oracle

Population declining.

Japan an unique case.

Member

“nobody has any success in making that happen”

Zimbabwe, Venezuela, recently Russia. Problem is making it happen in a 1st world economy with stagnant wages. Solution IMHO is put more money in workers’ pockets.

Member

Newcomer

They weren’t trying. Apples and oranges.

But I think you are right about the solution. Raising the minimum wage would be a good place to start. Pulling on the string, instead of pushing it.

Member

Royce McCutcheon

I fear the solution is armed conflict. I don’t want to be right.

Member

VanRant

We already have rampant inflation. Take a look at the stock-market or your local super market. The feds are lying to us.
“The grim reality is that real inflation is 7+% per year”
http://dailyreckoning.com/whats-coming-going-mess/?utm_campaign=Contact+SNS+For+More+Referrer&utm_medium=twitter&utm_source=snsanalytics

Member

“The last two months alone have seen Britain leaving the European Union”

Except they haven’t. Great way to start an article.

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Kim

You’re absolutely right. like a said before, my favorite 1.50 chicken dish at Dai Tung is now 2 bucks (for those of you who don’t know, Dai Tung is a restaurant in east Van famous for their cheap chicken dishes during the weekday to lure you in), a 33% rise in just a couple years. (50 cents is not a lot in absolute terms but it is in relative terms).

And don’t get me started about inflation at the night markets.

Guest

Best place on meth

At $1.50 a plate, I would wager that was not chicken you were eating.

Guest

Shut It Down Already

Cheap lunch specials are generally the evening before’s leftovers.

Member

CanNeverThinkOfAGoodName

These people would catch that wouldn’t they?
http://www.healthinspections.ca/britishcolumbia.html

Or would it fall through the cracks of official safeguards as long as the rabbit or dog or whatever it is did not have any bacteria in it?

Member

CanNeverThinkOfAGoodName

Speaking of which, is there any way a citizen can find out the actual owner(s) of a business operating in Vancouver?

Member

Vancouver couple with bulk of their assets in real estate urged to diversify

And in our continuing series, yet another couple betting it all on RE. Usual boomers this time.

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Kim

I don’t j derstand how they could’ve bought a 700k mortgage with 360k in upgrades? What cottage in a rural area costs 1m?

Member

What about that $500K HELOC, sounds like somebody has been using their house as an ATM and living larger than their income justifies – aka 90% of homeowners in YVR.

Guest

Shut It Down Already

Blame China, tho.

Guest

Best place on meth

You spelled “Nuke” wrong.

Guest

Shut It Down Already

Sorry, I don’t advocate genocide like you do.

Guest

Best place on meth

You don’t know what genocide actually means, just like you don’t know what racism means.

You’re a stupid, lazy, ignorant twat who likes to throw incendiary words around because it’s the easy thing to do, no explanation or knowledge required.

A perfect mindless follower for Garth the scumbag.

HEAD TAX!!

Member

CanNeverThinkOfAGoodName

Perhaps Shut believes that the 8 weeks of studying he did for a real estate license entitles him/her to comment authoritatively on matters that sociologists, anthropologists and historians spend years studying in order to correctly understand.

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Shut It Down Already

Incendiary? Traitor!

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Best place on meth

http://www.vancouversun.com/news/cms/binary/8895580.jpg?size=sw620x65

Yes, you called?

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Kim

Parents’ neighbour’s house after sitting for four week not willing in Killarney area, price reduced from 2.688m to 2.488m. Six year old house on 41 lot. There are 65 detached homes for sale in that area.

Guest

mls watch

They should know that the 8888888 do not work anymore.

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Kim

The story is the son moved out and can’t help with the mortgage and even renting two units can’t cover the mortgage. The husband works at a lower middle class job. They need to down size and are still hoping to cash in while the market is “hot”.

Member

Newcomer

People whose mortgage payment plan is based on helper suites are in for a world of hurt when the market turns.

Guest

Best place on earth

Meanwhile, rental is hard to find.

Member

Newcomer

Yup. For now. Thing is, we’ve been adding 40 K/year to the population and 30 K units/year to the housing stock. If you assume an average household size of 2 people, that leaves 10 K units a year in unused stock. So where is it?

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Kim

They are empty. In my complex 10% of the units are empty.

Member

Newcomer

That has been my guess. So if prices tank and people who own those units decide to rent them for a few years until the market recovers, all those helper suites will be without tenants, which will make paying those mortgages on Vancouver salaries very hard.

On the other hand, who’s to say prices won’t double over the next two years?

Member

At my old place on Beach Crescent I would say the place was way more than 10% empty just by the unused parking spots! I had one spot for my unit and had 2 cars and a motorcycle and had no issue parking them all I just monitored what spots were not used and used them, only once did I pick poorly and got a note. I told my buddy and he parked his boat in one of the spots on the lower level every winter – he didn’t even live there!

Guest

Shut It Down Already

Lots of people who live downtown choose not to own cars, and rent/coop for the times they need them.

Member

Yes, that is what Gregor would like to think. I am down to one car and use the coo-ops but the major demographic that doesn’t own cars didn’t even have their drivers licenses and the co-ops didn’t exist when I lived on beach crescent 10 years ago. This bubble has been growing for a long time.

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Kim

If you assume housing should be used for people to live in and not flip as stocks, we do not have an under supply as rents have not increased as much as prices. The Bay Area has a true housing shortage as rents there are through the roof (5K for a 2BR). I still see “Units for rent” in the new complexes on Cambie.

Member

space889

And it will be Chinese’s fault if they can’t get the high price? Just like it’s Chinese fault that the price is so high in the first place?

Guest

Whistler or Bust?

http://vancouvercondo.info/2016/02/10-reasons-the-top-is-in-for-vancouver-real-estate.html

Member

Never cal the top until the news stories are about people losing their fortunes and everyone says they knew it was a bubble all along.

Member

That’s the bottom, or close to it.

Guest

Adult huggies

Good call

Guest

Madashell

Ross Kay, Canadian RE analysis is calling Vancouver RE top on Feb and correction on July.
https://www.youtube.com/watch?v=OdfFACK47Xo&sns=tw
Interview start on 22 minutes in the show.

Member

Newcomer

So Ross Kay says Whistle or Bust was right on the money.

Guest

Lurker

Same Ross Kay that called for a correction 3 years ago?

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HAMster

He was right. There was a correction 3 years ago in 2013.

Member

A correction means prices have returned to levels appropriate to rents and incomes, i.e. correct levels. There was no correction in 2013.

Guest

HAMster

Your arbitrary definition. But not mine.

Member

All definitions are arbitrary. However mine is objective. What’s yours?

Guest

HAMster

Look up the definition of a market correction vs. a reset and then get back to me. Hint 10%.

Member

space889

So why are people complaining about high house prices here now then? Doesn’t seem like much of a correction if people here are still bitching about high prices, instead of rushing out and buy.

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Leo S

Where can I get the historical house price data for Vancouver in CSV format? I can’t find any source of it, other than the usual chart of house prices since 1977 that yattermatters publishes. Is there no source for the data out there?

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nic

try teranet, their numbers can be downloaded into excel

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Leo S