BC, Canada, CMHC, economy, equity, mortgage, opinion, prices, rates

Non-bank mortgage lenders don’t like new rules

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208 Comments

It’s looking like lending for real estate is going to get a bit more pricy as Ottawa tightens rules and seeks to offload some risk.  Many lenders in this Globe and Mail article feel blindsided by the change and complain that it’s unfair as they will not be able to compete with the banks:

Non-bank lenders left reeling by new federal mortgage rules

The new rules kick in November 30th after which lenders will not be able to insure mortgages with amortization beyond 25 years or on homes over $1million or rental properties. I guess we’re about to find out the price of risk in these no longer covered categories.

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[…] –RBC: sfh out of reach –Slower growth or reversal –Blissful ignorance stage –Big market swings –Interest rate optimism –Change and pain –Condo prices dropping – […]

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[…] This comment from YLTNboomerang: […]

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Oracle

Hing Kong imports into China up 203.5% YoY. Record high!!

Recent immigrants who are now residents continue to funnel money in.

That’s the only stat that should matter to Vancouverites.

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bullwhip29

Change and pain are headed for Canada’s housing market
http://www.macleans.ca/economy/economicanalysis/change-and-pain-are-headed-for-canadas-housing-market/

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bullwhip29

Nine names appointed to Real Estate Council of British Columbia
http://www.news1130.com/2016/10/12/2077555/

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YVR

John Daly former news reporter for Global was appointed. I guess that is thanks for breaking and filming the search of Glen Clark’s house.

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bullwhip29

Foreign real estate buyers tax won’t deter international investors in the long term: RBC
https://www.biv.com/article/2016/10/foreign-real-estate-buyers-tax-wont-deter-internat/

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YVR

They also said that about the short term then 95% of it evaporated.

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patriotz

“(data) showed the percentage of Vancouver home sales that involved foreign buyers fell from just over 13% between June 10 and August 1 to 0.9% between August 2 and August 31. ”

The article fails to note that the statistics are for closings, and the massive pulling forward of closings for foreign buyers to beat the deadline renders the comparison meaningless.

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No Money Down

I dunno. For a massive pulling forward I would expect a bump in July sales-after the announcement and before the implementation.

Based on REBGV detached stats, July 2016 detached sales were down 31% m/m and y/y.

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bullwhip29

China’s Orgasmic Real Estate Bubble
https://www.fxstreet.com/analysis/chinas-orgasmic-real-estate-bubble-201610122339

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bullwhip29

Chinese billionaire club to embark on business tour of Canada
http://www.theglobeandmail.com/news/world/chinese-billionaire-club-to-embark-on-business-tour-of-canada/article32344491/

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Combat roach

There is still little wisdom left around…

“Mr. van Lierop said Canada should “really embrace what China can offer” in money and market access. But he said, “Do you have to be careful in dealing with China? Yeah, you should.”

Fears of intellectual-property theft remain.

“We in the Official Opposition would urge prudence and caution in these upcoming talks with major Chinese investors,” Mr. Kent said.”

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Best place on meth

““We want to lubricate the business environment,” said Maggie Cheng, the club’s secretary-general.”

Translation: “Bend over when ever you’re ready, Justin”.

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YLTNboomerang

I’m almost ready to call this bubble done, my evidence?…my historically poor timing! Family is getting flown down to TX next month for interviews and to check out RE/Lifestyle that Houston offers. If we finally pull the trigger and move South, even for tremendously more dough, I will post it and that will be the point that YVR becomes cheap cause as a bear since 2007 I can’t get this F*&$er timed right. BTW, I already stipulated a “Trump clause”, if through regime change foreign workers are kicked out, I get 3 years pay and no non-compete plus relocation costs.

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burntout

Fed Liberals doing what the Cons didn’t do in 8 years. Trying to tame the debt monster.

http://www.macleans.ca/economy/economicanalysis/change-and-pain-are-headed-for-canadas-housing-market/

“All Canadians should support the Finance Minister in his attempt to make these bold changes. His adjustments to the rules could engender an orderly transition to a more balanced system and soft landing for house prices. But, while hoping for the best, Canadians would be wise to prepare for something worse than the oft-touted transition to stability. A painful unwinding of elevated leverage in the Canadian financial system is the most likely outcome, based on observation of similar adjustments in the U.S., Ireland and Spain.”

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JayTor

The conservative were so scared to do anything to slow the debt train, and now the unwinding will be so much worst.

Over the last couple of governments I have seen in Canada… it really seems that the federal liberals are much better for the economy of the country since they make very though decisions that are not going to help them get re-elected.

Paul Martin did major cuts to programs that lead to a balanced budget… and after years of pumping of another bubble by the conservatives the liberal have to step in and clean up their mess

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ostritch

Ya. The cons are the villains and the libs are the heroes. I wonder why I didn’t figure that out before. It’s even in their names: cons are con artists and liberal liberate you. It’s got nothing to do with anything else.

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Boombust

The “unwinding” will be brutal…there is no other way out of it, though

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Oracle

No unwinding. Will become an Asian majority city.

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ostritch

Prices in Cali and Dublin back to where they were before. How does one explain that?

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Shut It Down Already

All the chinese left and then then they all came back again?

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CanNeverThinkOfAGoodName

Goo goo ga choo, ga ga google, and the like, if you’re talking about Nocal

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Sellnoworbepricedin4evah

Cheap credit worldwide.

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YVR

No they are not. Dublin is still way way down from highs. Most areas of Cali outside of Silicon Valley are still way down and a bargain compared to YVR.

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Oracle

No. Anaheim prices have doubled.

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Best place on meth

Wow, doubled!

They must be almost up to 1/2 of what Vancouver prices are at.

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paulb

New
234
Price Change
82
Sold
113
TI:9990

http://www.paulboenisch.com

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Oh oh

Safe to say there’s 10 more listings in que. …happy 10k day

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Lurker

Again!

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Oh oh

At this time of year after all these changes which has caught the herd off guard resulting in a severe downturn. ..the average joe is thinking I don’t wanna sell now and be homeless by xmas. .this is just a mild correction and come next spring the market will be on fire again. By then we’ll be down another 15-20% and it’ll be 25k party time

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JayTor

What is the average historical number of new listing per day in October? How far off are these numbers, I know the inventory is still frustratingly low but I would love to know how the sales and listing measure up

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Newcomer-can\'t-post

It’s all available here. https://docs.google.com/spreadsheets/d/1dYtxpv5aEMF-Ccyyb8sKmtHI4nQL8rqP4vEVxMx4VUc/edit#gid=0
Basically, there is nothing particularly unusual about this fall other than the overall inventory being low and prices being high. If you were just looking at Paul’s numbers, you would conclude the market is in great shape.

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JayTor

Thanks, I really wish the numbers were showing more

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Confucius

Take a look at yatter matters.

http://www.yattermatters.com/2016/10/vancouver-home-buyers-mexican-stand-off/

You can see that single family homes are not selling well and inventory is up from last year. Condos and Townhouses are doing well. Paul’s numbers include all types, so it’s hiding how bad SFHs are doing as Condos and TH are still doing well.

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supersogs

Like our own Paul B, I’ve been following realtor Steve Saretsky as I’ve found he gives good, unbiased analysis and information backed by actual facts – good or bad. I’ve shared many posts of his before but thought I’d expand on that as I’ve enjoyed the work he’s put in: He gives almost weekly updates and summaries on current market trends, you can sign up to receive them as well: http://vancitycondoguide.com His latest report: http://vancitycondoguide.com/multiple-offers-plummet-downtown-condos/ His twitter feed also has good information: https://twitter.com/stevesaretsky Some notables as of late (the last one is a hoot): Oct 4 – “Tsawwassen detached sales to actives ratio drops 90% in months…. #VanRE” https://twitter.com/SteveSaretsky/status/783506482948034560 Oct 5 – “Wow a house in Richmond just sold for $800,000. Never thought I’d see the day. ” https://twitter.com/SteveSaretsky/status/783835980012789760 Oct 11 – “More Realtor complaints regarding my tweets and blogs.… Read more »

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Just me

Is this a way to bring more millionaire migrants to our shores?

http://www.cbc.ca/news/politics/bains-immigration-economic-boost-1.3801708

For the record, I have absolutely no problem with refugees and working people. I do have a BIG problem with millionaires passport shopping for their families.
Somehow I suspect that a new business immigrant program is in the workings, and it is not going to help us here in BC.

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Combat roach

“Bringing the ‘right people’ will create more jobs, opportunities for Canadians, innovation minister says”

What year is it, 1962? What kind of thinking is this? No wonder if the main objective was to form a visually diversified cabinet but not necessarily one that would include experts. At least nice selfies and photos could be taken off the such interesting group.

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franko

Love that “visually diverse cabinet” line, that was so stunningly obvious from the start. The only thing missing was a transvestite albino dwarf.
Even McCallum has the qualifications for a freak show.

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Best place on meth

Never mind the transvestite albino dwarf, the really noticable ommission was a cabinet minister of chinese origin.

I wonder why?

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Madashell

Thats what they said 20 years ago. Millions came, countless jobs have left for China and house prices has gone through the roof.

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ostritch

How are the Bears this morning? I, personally, am coming to the conclusion that all the recent changes serve only to f*ck the locals. Who else could they f*ck, they still don’t know anything about foreigners or their money or the properties they hold. They don’t call us dumb Canucks for nuthin’.

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Combat roach

Locals would rather get permanently f*cked than being called racist. It is a Canucks lifestyle choice and foreigners like it.

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patriotz

Dick and Jane Greedbag don’t give a damn if anyone calls them racist. Bubbles are about money and this one is no different.

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chilled

Do you have any statistics or links to back up that statement?

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Reasonfirst

I just googled “Dick and Jane Greedbag”…nothing

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ostritch

LOL

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patriotz

B.C. Premier Christy Clark’s approval rating spikes after introducing foreign buyer tax: Poll

Public loves “racist” (according to PC types) foreign buyer tax. Will that do?

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Just me

I know you are convinced that locals on credit are the reason why Vancouver is so expensive. Sooner or later even you will realize that is not the reason. The reason is a wall of Chinese money flooding the city.
It’s Okay, we will give you time. Sometimes we just don’t want to admit we are wrong. It happens to the best of us.

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Shut It Down Already

90% of buyers are local. We have the stats, remember?

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Best place on meth

The other 10% are crooks from mainland china.

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Just me

It’s not the source of the buyer, it’s the source of the money.
How many times shall we go over this? It’s like being in kindergarten with you guys. How much more evidence do you need? Killarney crackshacks are going for two mil a piece.
You really think those prices are because of local money and credit? With this kind of price acceleration, over the past year, just as Chinese outflows went through the roof?
Any counter argument is, sadly, just noise. Just drive around Vancouver, you will see who is buying.

I only hope Christy C,ark pays for oveseeing this disaster. And all the BC libs, the corrupt and stupid bunch of them.

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dyugle

35% drop post tax. How stupid do you think we are. Believe the 10% if you want. At least 35% of the money is foriegn in origin and a lot of it is hidden. You are dealing with people who are breaking the law in their country to get the money out. Only 10% openly admit the origin, the majority remains hidden for good reason.

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Shut It Down Already

Well, if that number isn’t good enough for you then I would encourage you to check out a) home ownership rate b) CMHC obligations c) total mortgage debt country-wide and d) non-mortgage consumer debt. Perhaps this will persuade you that Canadians are tapped out and that the wealth of evidence to that effect massively outweighs your “but I saw a chinese person on the doorstep!” anecdotes. Feel free to cross-reference with e) national savings rates as well as f) RRSP contributions coupled with g) the multitude of surveys that state Canadians think real estate “is a good investment that always goes up”.

You’re also welcome to try and work out how many Chinese millionaire are would have to enter Canada to drive prices up this much on aggregate. Hint: it’s a ‘uuuuge number.

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Just me

China has enough millionaire to treble current prices in Vancouver. And many would come if we let them.
The worst type of deaf is the one who does not want to listen….
Your quasi-data arejust screen and mirrors. Not sure why you do it, and what is your agena. But I am done wasting my time with your nonsense. It does nit stand up to rational scrutiny.

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Oracle

Bingo !! The minions here are clueless about the bulls here. Hahaha

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Newcomer-can\'t-post

The man is right. People have been knocking themselves out trying to prove that it’s all chinamen, and every time the data comes in, it clearly shows that it isn’t that much of the market. Sure there’s some money from China, but almost all of it is from Canada.

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Just me

Yes, credit that goes to students and homemakers. After all, canadian banks were lending to UBC studens so they could buy 20 mil mansions.
As I said, it’s not the share of buyers, it is the share of money (including ill gotten credit from Canadian banks).
No amount of crazy credit makes Killarney average home cost 2 mil.
But feel free to live in your little fantasy world, like for the oast ten years…

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patriotz

So make up your mind, is it “money from China” or credit from Canadian banks?

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patriotz

It has been pointed out recently in this forum that even “rich Asian” buyers are borrowing most of the purchase price from Canadian banks. So no it’s not mostly “money from China” even in their case.

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patriotz

Not the whole reason. The whole reason is that most voters are homeowners and don’t want the government to take any actions that would reduce their “hard earned equity”. I’ve said this before. So why not pay attention to what people actually say before you call them “wrong”.

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Just me

Credit is given upon downpayment. Much of the downpayments are not local.
White boomers are certainly benefitting from Chinese buyers.
Remove Chinese buyers from the market and it will collapse.
They are the ones gambling. They bring in money and leverage it to the hilt.
If you have a problem with whute baby boomers, so be it. But don’t twist what I say.

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Oracle

We homeowners love you Patriotz. Keep confusing these minions!

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southseacompany

“Central banks should raise rates in tandem to mitigate shock”, Globe & Mail

http://www.theglobeandmail.com/report-on-business/rob-commentary/if-central-banks-are-truly-independent-they-should-raise-rates-in-tandem/article32323824/

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southseacompany

“Canada’s Mortgage Clampdown Means Economic Pain Now, Gain Later”, Bloomberg

http://www.bloomberg.com/news/articles/2016-10-12/canada-s-mortgage-clampdown-means-economic-pain-now-gain-later

“Real estate measures introduced by Finance Minister Bill Morneau last week will probably cool the housing market, reducing its contribution to already tepid gross domestic product growth, analysts say. That may be a small price to pay to lessen the odds of a real-estate crash in Toronto or Vancouver.”

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southseacompany

“Detached Vancouver home out of reach ‘by Canadian standards’: RBC”, Globe & Mail

http://www.theglobeandmail.com/real-estate/vancouver/detached-vancouver-home-out-of-reach-by-canadian-standards-rbc/article32329443/?cmpid=rss1

“The dream of owning a single-family detached house in the Vancouver region won’t be within reach based on local incomes, even if typical prices in Canada’s most expensive real estate market were to tumble 30 per cent, according to a new report by Royal Bank of Canada.”

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Reasonfirst

sorry “McLister”

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Reasonfirst

Rob Lister and his merry band of brokers are in full out cry-baby mode:

http://www.canadianmortgagetrends.com/canadian_mortgage_trends/2016/10/we-get-what-we-quietly-accept.html

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Best place on meth

Poor, poor McListard.

I love seeing parasites curled up and sobbing like babies in wet diapers.

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Slava

And get this, he calls his “job” an “industry”. Delusional.

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Many Franks

Wow, Rob’s suddenly discovered activism. I watch that blog for the insider perspective, and can’t recall ever seeing him accept any proposed reform — it’s always maybe unintended consequences/not enough data/we should wait and see. If industry had shown an ounce of self-restraint sometime in the past decade, the Fed might not have clobbered non-bank lenders, real estate agents might still be self-regulating, and CRA might not have so much egg on its face. But here we are.

He squandered his opportunity to participate in defining how change was to happen, plain and simple, and now change has happened anyway.

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Best place on meth

Lowlifes such as McLister are gleeful when government intervenes to juice the market skyward, then they scream like bitches when they intervene the other way.

He is a fucking parasite, nothing more.

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Newcomer-can\'t-post

“The 35-year fixed mortgage rate has climbed for two straight months after touching a record low of 0.9 percent in August, and sales of new condominiums in Tokyo this year have fallen to the lowest since the nation’s property bubble collapse in the early 1990s.”

http://www.bloomberg.com/news/articles/2016-10-11/tokyo-condo-prices-seen-down-20-by-deutsche-bank-as-boj-shifts

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Just me

How much of this stash found its way to our fair city, with Christy’s smiling blessing?

http://www.dailymail.co.uk/wires/reuters/article-3833782/Chinas-Guangdong-province-busts-underground-banks-handled-35-bln-Xinhua.html

We need to protect the equity built by homeowners after all. They worked hard for it…

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Just me

Just minor changes expected.

http://www.bloomberg.com/news/articles/2016-10-12/canada-s-mortgage-clampdown-means-economic-pain-now-gain-later

How depressing….even 30% down would be too little to make it right.

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No Money Down

“Consumer spending, which has accounted for almost all of Canada’s growth over the last five years, is reaching an inflection point, with household debt now exceeding the size of the economy for the first time.”

Spend our way to prosperity…

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HAMster

That is the idea behind ZIRP. But all that does is kick the can down the road for awhile. Things can also be kept going by importing wealthy Asians and goosing real estate but with no jobs and no manufacturing here eventually the people hit the debt wall and then what?

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burntout

Kudos to the fed liberals having done more in their first year than harpo did in 8.
And dont get me started on Christy

The feds don’t want upset China too much though i=until they see if sec the madman sex predator gets in the WH and starts pulling NAFTA apart like it was his toupe

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david

The little prince has spent his time and our money becoming a world celebrity.
Hooray!

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HAMster

He is set for life and all because of his name. But Canada needs their celebrities (sarc).

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YVR

Actual property values rose more in the Liberals first year than at any time the Conservatives were in power. They should have acted 10 months ago.

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southseacompany

“Dollar Climbs to Seven-Month High on Interest-Rate Optimism”, Wall Street Journal

http://www.wsj.com/articles/dollar-climbs-on-higher-interest-rate-expectations-1476196352

“The dollar closed at a seven-month high Tuesday as bets that the Federal Reserve will raise interest rates this year continue to climb.”

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