Friday Free-for-all! January 27th 2017

It’s that time of the week again…

Friday Free-for-all time!

This is our regular 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:

Freedom 85 for todays forty year olds?
CMHC: speculation driving up BC, Toronto & Hamilton
No foreign buyer tax for leasehold (cause you don’t own it)
White Rock: Waterfront ghost town
Interest free loans can hurt buyers

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

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patriotz
Member

“No foreign buyer tax for leasehold (cause you don’t own it)”

Simply not true, the exemption is for leaseholds on certain First Nation lands, because by treaty property taxation powers have been given to the First Nation.

Property transfer tax (including foreign buyers tax) applies to leasehold otherwise.

http://www2.gov.bc.ca/gov/content/taxes/property-taxes/property-transfer-tax

Kim
Guest
Kim

3188 west 20th

List 3.588m
Assessed 3.581m
Reduced 2.888m

bullwhip29
Guest
bullwhip29

irregular shaped lot sloping in wrong direction, terrible feng shui, busy and chaotic corner and block. buy a blueberry farm instead…

oncebittwiceshy
Guest
oncebittwiceshy

Hang on, you can’t support price increases by heralding foreign money, population growth and running out of land but negate that rationale when prices are dropping so quickly.

Hell, if this is your answer to prices dropping, how did East Vancouver ever reach it’s heights.

http://www.myrealtycheck.ca/ Follow the trend, my friend.

history
Guest
history

blueberry farms take a lot of labour, gonna hafta hire TFW. Maybe sponsor one or two, Sniveller and Soros can help you with that

Nnnnnn
Guest
Nnnnnn

Let’s stand together and halt eclipse of the West

Our values must endure despite China’s rise, May tells Trump

http://www.thetimes.co.uk/edition/news/lets-stand-together-and-halt-eclipse-of-the-west-0j6mwwjx9

patriotz
Member

Theresa May offered last night to help President Trump to prevent the West from being “eclipsed” by China as she urged him not to shirk his “obligation” to lead the world.

In other words: Don’t wreck the Western house, Donald.

Newcomer
Member
Newcomer

Or, in pictorial form. http://imgur.com/gallery/CTBsz

Hyper-mega-Bull
Member
Hyper-mega-Bull

he got his first ally against china and all he had to do was confirm the status quo. seems like a good deal for the US.

Hyper-mega-Bull
Member
Hyper-mega-Bull

confirm the status quo in europe.

Kim
Guest
Kim
Abdul Lahazi
Guest
Abdul Lahazi

My wife wanted to live on the Westside and I have always been against that for just this reason; there are too few amenities over there. Soon there will be no gas stations or grocery stores.

Hyper-mega-Bull
Member
Hyper-mega-Bull

but how’s the bubble tea?

fomostyle
Guest
fomostyle
Dave
Member
I think zerohedge is onto something here. I think the property bubbles in many Western cities is the outcome of excessive liquidity in the financial system. I don’t this is unlike other financial bubbles, other than the financial system is global rather than national. In theory what should happen is the central bank reigns in excessive liquidity before a bubble occurs. I think the global economy and free flow of capital has distorted our ability to understand and manage the flow of capital and I think it’s created economic distortions. And history shows that we’re not very good at seeing those distortions when we are in them. We always rationalize why it makes sense or why it’s different this time. And then in hindsight, it’s obvious. It’s nonsensical for money to chase a 2 or 3% return on real estate.… Read more »
Dave
Member

To add to my post above, I was discussing this with somebody who owns a large amount of commercial real estate in Vancouver built up over many decades. We talked about one building that in theory is getting a 4% cap rate based on the assessment. He thinks it would be absurd for anybody to buy at that price because there is no money left after your costs (e.g. building maintenance, taxes, etc…), never-mind the risk.

This is what the ‘smart money’ is saying.

On the other hand, I can tell you that pretty much every developer I have talked to in the last few months is bullish about our market, despite the drop in Chinese buyers.

Newcomer
Member
Newcomer

Does that bullishness not come for the willingness of Canadians to borrow money from the banks with DPs borrowed against real estate (often parent’s real estate) to buy up anything that gets built?

Dave
Member

It comes from what they see in the market, which is solid demand. The source of demand varies from project to project. The foreign money sometimes will flock to certain developments (the joke about I buy one and husband buy one has truth to it).

No question that the parents are funding a lot of condo buying for their kids by borrowing against their own real estate. I hear that anecdote all the time.

I would say that 90% of people in the business are bullish right now and 10% cautious. Another real estate adage to keep in mind is that developers are always bullish. It’s sort of a ‘by definition’ thing. So maybe this is meaningless. I bring it up because the view of insiders is not consistent with people here.

Newcomer
Member
Newcomer

I’m not sure if that is inconsistent with the majority view here. There majority view here seems to be that purchasers and developers are unreasonably bullish.

Dave
Member

Maybe that’s the majority opinion, I’m not sure. But I do see some people having the belief that insiders all know this is a bubble and act to prevent it from popping or the public from learning about it.

Newcomer
Member
Newcomer

Those two views are not in any way mutually exclusive.

Newcomer
Member
Newcomer
I agree. However, you are attributing all excess liquidity to China when, in fact, it is only one relatively small (certainly much, much less than 50%) source of liquidity in the Canadian market. The vast majority comes from Canadian banks. Typically, liquidly leaves a bubble because of drops in the prices of the inflated asset. So, while it is true that, if money from China leaves Vancouver, that could bring about a crash, or a rapid melt, could also happen simply as a result of dropping prices sucking out Canadian liquidity. The question of what is going on in Calgary is an interesting one. I think you will agree that Chinese money is not directly propping up the Calgary real estate market (if you think otherwise, I’d love to hear about it). I have heard that banks are being very… Read more »
Dave
Member
I am not completely attributing it to China. What I think is that we now have a global interest rate curve, rather than national. Both North America and China have been pumping liquidity into the overall system. The theory I presented is that excess liquidity from China is leaking into Western real estate. I think the cause is a lack of investment opportunity in China because they have overbuilt their economy. They have over invested in infrastructure, possibly real estate and their export markets are softening because they are hitting limits to that type of growth. To make up for the lack of opportunity, the government keeps pumping money into the system but a certain amount leaks out. I would be very interested to see if somebody has done the math and found real data around all this. How much… Read more »
Newcomer
Member
Newcomer

Why is it that you don’t believe that local money and local jobs can distort the market too significantly. Do you not feel that they did in here in the 80s, or in the 90s in Toronto, or in the US in the 2000s?

Dave
Member
I can’t speak to the Toronto market with any level of intelligence. I won’t say that distortion can’t happen because it can. What I am saying is that I don’t believe it can take things too far because the financial controls imposed by banks is fairly robust. We can split hairs about whether it can or cannot happen, but I think looking at our current situation is more important…. Do I think local money has caused a major distortion in our market? No. Here’s my thinking: For the 80’s market here, we had significant speculation with a lot of people buying and flipping property. That data is available and we’re not seeing anywhere near that level of speculative activity. That said, we have no way of capturing pre-sale flipping, which is where I would expect to see a lot of… Read more »
Just me
Guest
Just me
“…you are attributing all excess liquidity to China when, in fact, it is only one relatively small (certainly much, much less than 50%) source of liquidity in the Canadian market. The vast majority comes from Canadian banks. ” Can you share any data in support of this strong statement. While I see many people repeating that credit is the culprit, I have never seen any evidence that (at least in Vancouver) credit to locals accounts for the bulk of the RE financing. In fact, I argued in the past that Chinese money in Vancouver might be comparable (if not superior) in size. One also has to distinguish what is meant by credit: does the leveraging of multimillion dollar homes by housewives and students count as credit to locals? Chinese seed money is regularly leveraged using local banks. But I would… Read more »
Newcomer
Member
Newcomer

That’s hardly a strong statement. You would have to be completely out of touch with reality to disagree. But, since you apparently have not yet learned how to use Google, let me show you the results for “percentage of foreign ownership in Canada”. I have to limit myself to two links because those are the rules, so I chose the two links with the highest figures, for the cities with the highest levels.

http://www.theglobeandmail.com/real-estate/vancouver/foreign-buyers-13-per-cent-of-vancouver-region-real-estate-sales-since-tax/article32572605/

http://www.cbc.ca/news/canada/toronto/local-investors-outnumber-foreign-buyers-10-1-in-toronto-s-condo-market-1.3825498

If you look at this and you still think the Chinese ownership is approaching 50% of Canadian sales, I would suggest that you either need to read more widely, or you just need to get out and get some fresh air.

Just me
Guest
Just me
Since you insist, I will not answer directly but I will copy what our good friend Dave wrote above. This is what he wrote just an hour ago about ownership stats. ” I previously bought into the idea that it was under 5% because I relied on the foreign ownership numbers on title, which we all know doesn’t capture it all. What eventually pulled me away from that number was overwhelming anecdotes and seeing it directly myself.” Dave, I guess you also need some fresh air. Anyone suggesting that Chinese money isn’t just a sideshow is obviously crazy, right? I would also point out that, not long ago, David Eby produced convincing evidence that on Vancouver’s west side the effect of proxy buyers (housewives, students, registered companies) was exceptionally large. Go check his website and associated press coverage. But we… Read more »
Newcomer
Member
Newcomer

Now that I have taken the time to answer your request, yet again, can I ask you for a small favor?

Could you stop asking for data as a way of disagreeing? Normal people take government and industry reports as data. You don’t. That’s OK. But if that is your stance, you should not ask for data as a way of trying to discredit something. You should limit yourself to saying things like, “Other than government and industry reports, which I recognize clearly support what your arguments, do you have any other kind of data of the type that I believe in, and specifically….”

Just me
Guest
Just me

I am not disagreeing with government data. I am simply pointing out they don’t measure the flow of money but name on the title.

it has been pointed out to you (multiple times) that name on the title is a very imperfect measure of underlying money flows.

You seem to be OK with it. I accept that. But don’t try to use that data to make a point you cannot make.

Newcomer
Member
Newcomer

That amounts to disagreeing with the data. The data you base your thoughts on is secret data which, by its nature cannot be known. Obviously I cannot provide you with secret data, so I am asking you to stop asking for data that you know cannot be given and to honestly say, instead, “I disagree because I believe that there are secret, unmeasured forces at work.”

Just me
Guest
Just me

What? I am not following you.
I repeat: the data you provide is measuring variables that are uninformative. That’s all.

Newcomer
Member
Newcomer

So, when you say, “Can you share any data in support of this strong statement.” (assuming you meant to use a question mark at the end, and not a period) what do you mean?

Just me
Guest
Just me

I mean relevant data.

Newcomer
Member
Newcomer

So you need to specify that. You need to say what would you count as relevant. Otherwise you appear to be rejecting all data that doesn’t support your argument without ever giving an example of data that does support your argument.

We’ve been through this a few times, and I really would recommend that you read just a few basic things on logic and critical thinking.

If you have more time, and want soemthing structured you could take this course by distance learning:
http://distancelearning.ubc.ca/courses-and-programs/distance-learning-courses/courses/phil/phil120/

Just me
Guest
Just me

Sure.
But the data you used to support your argument is still irrelevant.

Newcomer
Member
Newcomer

Say that may make you feel good, but it doesn’t help you, or anyone else to understand what is going on.

Just me
Guest
Just me

I disagree. What I say shows people to think critically about the data they are fed.

Dave
Member

There is no strong data on this, that’s why I think research is needed. We’re all just guessing based on various sources of imperfect information. About six months ago, I did an exercise in deductive logic and came up with about 10 to 20% foreign money.

I could be wrong no doubt. I previously bought into the idea that it was under 5% because I relied on the foreign ownership numbers on title, which we all know doesn’t capture it all. What eventually pulled me away from that number was overwhelming anecdotes and seeing it directly myself.

My gut says it’s higher than the range I gave above and 25% wouldn’t surprise me, but numbers above 30% would.

Newcomer
Member
Newcomer

Those are the highest guestimates I have ever heard. (Are you sure you mean all of Canada here, including places like Wawa and Monkton?) But even if they were right, they would be so low that their effects would be swamped by changes in local money.

(Seriously, 25% nation wide? So what would we be looking at here? 95% foreign ownership in Vancouver, 55% of BC, same kind of numbers for Toronto and Ontario? And like 5 or 10% of houses in places like Moncton bought by Chinese investors?)

Dave
Member

No, my 25% would be Vancouver, Burnaby, Coquitlam, North Van and Richmond. I am not counting the Valley or other markets.

No chance, it’s that high Province or Canada wide of course.

I should have been more clear as to what I meant.

Newcomer
Member
Newcomer

Fair ball. I could see it being in that kind of ballpark, locally, including funneling through relatives and so on. But can I say that, on the Canada-wide level we are both sure, that the vast majority of the liquidity comes from local sources, which is to say, Canadian banks and Canadian bag holders?

Dave
Member

Yes, we see it the same way more or less. Most of the liquidity was created locally.

I think the Valley, Victoria and Kelowna could provide some good insights into what added marginal demand can do to markets. In the past couple years, we’ve seen people fleeing and panic buying there.

So while I agree foreign money is a small percent overall, I think the distortions are more significant and have spread far and wide.

Best place on meth
Guest
Best place on meth

“Chinese Capital Controls Threaten Property Bubbles All Over The Globe As Buyers Lose Access To Cash”

I really, really hope this is the end of HAM, that HAM has been taken out back, pistol whipped, beaten, kicked, tortured, shot twice in the back of the head, chopped into pieces, and fed through a wood chipper.

Please dear lord baby Jesus, Allah and Buddha, let the death and dismemberment of HAM be upon us.

Let it be real.

bullwhip29
Guest
bullwhip29

Leadon Investment, a private investor with ties to Hong Kong, buys hotels from B.C.’s public pension fund
http://vancouversun.com/news/local-news/leadon-investment-a-private-investor-with-ties-to-hong-kong-buys-hotels-from-b-c-s-public-pension-fund

bullwhip29
Guest
bullwhip29
Dave
Member

The best comment that somebody made was the real story is Vancouver is losing families and working professionals. How about somebody write a story about that? I know numbers and research are hard for most reporters but a little bit of effort would go a long way.

I think that’s truly the biggest story in this City. We’re closing schools at the same time we’re building high-rises. That makes no sense at all.

I wonder how many construction cranes can be seen from all the schools currently on the chopping block.

I almost feel like writing a series of articles myself and selling it to the Sun or Province. I can research and write better than the muppets they have on staff.

Newcomer
Member
Newcomer

I wish you would. I pretty sure that they would not pay for freelance content. Even as far back as the eighties, newspapers rarely gave more than a token payment (for example, $50) for non-commissioned freelance submissions. These days, with thousands of interns begging to work for free, it’s very unlikely you would get even that. But you’d be doing the community a service.

Dave
Member

Of course you’re right. The media is in a negative spiral. They don’t make enough money to rationalize spending the effort it would take to do proper research and write a good series of articles.

You’d have to pay me $20,000 to do it. Professional researchers would charge their clients far more than that. Anything less, and I would rather give it away for free and use it to create my own goodwill.

I think the closest a paper has come to doing research on our market was the Globe and Mail article that looked into the flow of some Chinese money and lack of action by Revenue Canada. I personally thought it was lacking in substance though and most of it was just innuendo. Reads well… but hollow.

Newcomer
Member
Newcomer

Innuendo is all you need.

No Money Down
Member
No Money Down

You can submit it as an “Opinion” to the Vancouver Sun

Dave
Member

I think forums like this are better for putting Opinion into the public realm, the same way I would rather post a classified ad in Craigslist rather than the newspaper.

patriotz
Member

“How about somebody write a story about that? ”

There have been plenty of such stories. Didn’t a guy at the Province even write a column saying he thought his kids would probably leave but he still didn’t want RE prices to go down? People know perfectly well what the problem is but they are too greedy to accept a solution.

google young people leaving vancouver

Dave
Member

Opinion isn’t research.

Just me
Guest
Just me

Sad but completely true. People can vote down this comment, as it is unpalatable. But the truth is often unpalatable.

Stephen Price
Guest
Stephen Price

I wrote the two articles for MacLean’s looking at it through the boomer/millennial lens. I sent the first one via their online ‘contact us’ form. I’m not an economist or writer. But I’ve been paying attention here and elsewhere since about 2006.

All this to say: write your analysis. Shop it around!

Brian Ripley
Guest

I’m late to this story “Facing staggering debt loads, hundreds of Alberta post-secondary students are logging on to seekingarrangement.com connecting them to “sugar daddies” who can provide them a monthly allowance and gifts in exchange for negotiated relationships. Calgary Sun January 14, 2017″

But I editorialize on my post today about it:
http://www.chpc.biz/history-readings/50-shades

Especially since it seems to dovetail with the recent publication of the latest Demographia numbers which I have also updated in my table of 40 Canadian cities.

Perhaps I am influenced by the tremendous turnout of pussy power globally last weekend.

Buynow or Getlaidnever
Guest
Buynow or Getlaidnever

IT NEVER ENDS – Vancouver could see real estate boost over Chinese New Year

http://globalnews.ca/news/3208750/vancouver-could-see-real-estate-boost-over-chinese-new-year/

Hyper-mega-Bull
Member
Hyper-mega-Bull

real new year is the reason we are seeing more listings.

Shut It Down Already
Guest
Shut It Down Already

Like every other year.

The Man
Guest
The Man

Those stories get planted every year by the RE industry at this time. Goes back to Cam Good and his yellow helicopters.

They are not giving up on the HAM meme, yet.

Best place on meth
Guest
Best place on meth
Doomcouver
Guest
Doomcouver

You’re right it’s obviously a one-way bet. I’m going to go to the bank tomorrow and ask for a $2 million dollar loan to buy Vancouver real estate. After all in 20 years from now it’s guaranteed to be worth 10 times as much.

Abdul Lahazi
Guest
Abdul Lahazi
bullwhip29
Guest
bullwhip29

Which people? and who specifically is giving and receiving the red envelopes? Things that make you go hmmm…..

Best place on meth
Guest
Best place on meth

Look at Turdeau dressed up in his Halloween costume just like Krusty, sucking up to the ethnic vote.

What a fucking fraud.

Just me
Guest
Just me

“China is desperate to reverse capital outflows, many of which went into property.”

https://www.thestreet.com/story/13969903/1/trump-s-position-on-china-could-impact-new-york-real-estate.html

Best place on meth
Guest
Best place on meth

“The South China Morning Post, a Chinese newspaper, reported that China is taking steps to reverse the flow of capital abroad by allowing the repatriation of offshore loans backed by domestic guarantees. The paper also said multinationals are now allowed to tap 100% of their foreign currency deposits abroad to invest domestically, up from a 50% cap previously.”

As if they haven’t copied the US enough, now they’re emulating Trump.

What’s next, Jinpig putting on a red cap proclaiming “make china great again”?

Oh well, whatever, this is good new for our real estate crash.

Carry on, chinamen.

Slava
Guest
Slava

China are experts at copying. That is really all they do today.

history
Guest
history

not to quibble but mimicry is better word, the 3rd part of 12 steps in evolution.

Once they got mimicry down pat, they moved to stage 4, which is homes, and by stage 5, which is where they are now, went planetary speculation berserk. Stage 6 is service to others. Nope, they aint there, but thats coming

goofus ottawais
Guest
goofus ottawais

probably manifest as military service. When trade doesnt cross borders, armies will.

No Money Down
Member
No Money Down

2981 McGill
Assessed $1.35M
Last Sale $973k (after reno) June 2015
Listed $999. Did not sell. Taken off market January 2017.

https://www.zolo.ca/vancouver-real-estate/2981-mcgill-street

bullwhip29
Guest
bullwhip29
oopswediditagain
Guest
oopswediditagain
I’ve lived in the lower mainland for over 50 yrs so I’ve got a little it of history with the housing market. lol. It sounds like people have forgotten the market corrections in the early 90’s and definitely in the early 80’s. The market on the mainland for this real estate run-up is absolutely no different than the previous markets and crashes. They were all characterized by stupid price increases. My first house went from $48,000. when I bought it in 1980 to $108,000. in 1981. I’ve bought and sold over 6 homes in my lifetime and guess what? The real estate agent’s patter has never changed. We have another offer on the house!!! If you truly want it then you had better increase your bid. The most interesting thing is …. who knows if there is another bid. In… Read more »
Newcomer
Member
Newcomer

Having seen things happen before makes quite a difference. I wasn’t here for the previous busts, but I was in Japan for the last years of their bubble, in Europe as theirs unwound in the 90s and in the Sates between 2000 and 2006. All over the world, time and time again, it all plays out according to the same pattern.

Shut It Down Already
Guest
Shut It Down Already

Scandinavia?

Newcomer
Member
Newcomer

You mean like Iceland or the crash and credit squeeze behind the Swedish banking rescue in the 90s? I don’t know the details of their crashes, but that’s kind of the beauty of it. You’d don’t have to. It’s all the same. Here’s chart for Finland:
http://tinyurl.com/zclhxh2

Just me
Guest
Just me
Except that, after a drop of arguably 15% since last Spring, we are still at valuations that make no sense. Asking prices today are roughly at the level they were in December 2015. Utterly insane. I wish prices went down another 20%, but I doubt it is going to happen. Even 20% down from where they are today would mean that a home in Renfrew (in bloody Renfrew!) would cost well above 1.5millions. I see townhomes advertised around commericals going for over a million dollars. Townhomes in Kits are in very scarce supply and go for 2 millions. In the 1980s and the 1990s the income multiples were around 5. Now we are around 10. Sorry but this is NOT the same as it was back then. Just read the Demographia reports or any other reports and you will see… Read more »
oopswediditagain
Guest
oopswediditagain

Actually “Just Me” , you are spelling out the reason that prices will drop significantly. This “correction” is just getting started. There are way too many people who have been suckered in by their agents to hold off listing until the Spring market.

Sentiment is a difficult beast to master and on the way down it gets ugly.

“Many key metrics are at or above levels seen in the U.S. prior to its most recent housing crisis and are growing worse,” Macquarie told clients.

http://business.financialpost.com/investing/trading-desk/fears-of-canadian-housing-market-correction-prompt-downgrade-of-cibc-genworth-and-home-capital?__lsa=b24e-66a7

Just me
Guest
Just me

If only I could believe you I would have a much happier weekend! I have lost any hope the situation will ever change. We are now suburb of Shenzen, with the same prices.

Combat roach
Guest
Combat roach

Why not, give it some time. It took a while to get here it will take time to get down to “some” fundamentals. It is all artificial as it was in previous bubbles.

Newcomer
Member
Newcomer

Yes, I do. It might come partially by way of wage inflation rather than absolute price drop, but I am sure it will go down by at least 50% and probably more like 70% peak to trough.

Boombust
Guest
Boombust

Well said! I have lived here for over 60 years and I too, know “what’s what”.

Best place on meth
Guest
Best place on meth

You make a lot of good points, but I disagree strongly with this one:

“There is no trickle down effect. People selling those multi-million dollar mansions weren’t heading to the suburbs and overbidding houses.”

oopswediditagain
Guest
oopswediditagain

To put it into perspective bpom, if you sold out in West Van and decided to move to Burnaby. What would you do? Realistically, I think that you would still be looking for value in a nice property. I couldn’t imagine that you would just walk in and throw in a overbid because you’ve got the money.

People downsizing aren’t the ones that have been driving the markets in the suburbs.

Real estate agents and media spreading the gospel of downsizing Vancouverites driving up prices pushed fomo to perspective suburban buyers.

Strictly engineered sentiment.

Stephen Price
Guest
Stephen Price

http://www.macleans.ca/economy/economicanalysis/a-roadmap-for-bringing-sanity-back-to-housing-markets/

This is the new piece I wrote for MacLean’s. Interested to hear the thoughts of folks here.

Dave
Member
Thanks for the link. My thought is that the City has only just accepted that there is a housing crisis. We are not yet at the point of agreeing on the causes of that crisis and we’re a long ways away from agreeing on solutions, nevermind implementing them. The reality is that solutions are a long way off. I think your hope in politics is misplaced. Maybe this is a generational divide in that I am a critical Gen Xer while you are a hopeful Millenial that believes in the power of groups. Both views of the World are valid and both can be right circumstantially. I see our housing situation as a quagmire, not unlike the war in Afghanistan. It’s going to drag on. I believe that problems created over decades take decades to solve. You may or may… Read more »
ostritch
Member
ostritch

Seattle prices skyrocketing. Portland who knows. They never collapsed in the collapse.

patriotz
Member

Case-Shiller for Seattle fell from 192 in 2007 (it was the last metro in the US to start falling) to 129 in 2012, a drop of 33%. It’s now up to 205.

https://us.spindices.com/indices/real-estate/sp-corelogic-case-shiller-seattle-home-price-nsa-index

Just me
Guest
Just me

Real recovery started in 2009. In 7 years there was a 60% jump. Not quite a doubling like in Vancouver, but not to be sniffed at.

ostritch
Member
ostritch

Thanks for illuminating the past. It would tak a time machine for a person’s fleeing today’s high cost of housing in Vancouver to find low prices in Seattle.

patriotz
Member

“We are not yet at the point of agreeing on the causes of that crisis and we’re a long ways away from agreeing on solutions”

Everyone in a position to do something knows what the causes of the crisis are – government policies that inflate RE prices – and what the solutions are – policies that penalize those who buy at inflated prices. Those claiming otherwise – like you – simply don’t want a solution.

Just me
Guest
Just me

I agree. If the different levels of government coordinate on taxing RE “investment” there would be no credit nor chinese money that could support this market.

The government has made RE a cheap and efficient way to store money and shelter it from taxes.

Newcomer
Member
Newcomer

And has done so largely because its voter base loves it.

Just me
Guest
Just me

Correct. There is a Provincial election in 4 months. Do yourself a favor and vote Christy Clark out of office.

Newcomer
Member
Newcomer

Now, there, we are in perfect agreement.

Just me
Guest
Just me

Brilliant. Good fact-based article. I would higlight this paragraph among the many other good points:

“One example is the Immigrant Investor program, where those wishing to immigrate would make an interest-free loan to government of $400,000 in exchange for landed immigrant status. UBC geographer David Ley has shown that investor immigrants in the Vancouver region represent nearly 10 per cent of the Vancouver region’s population. That population paid, on average, $1,400 in income tax 10 years after immigrating. This is less than refugees.”

Thanks for providing these excellent commentary. Much needed, and fully appreciated.

patriotz
Member

Canada has admitted about 10,000 investor immigrants annually (principals and family). I don’t see how that adds up to 250,000 in metro Vancouver alone. That would be 1/4 of all foreign born population.

http://www.cic.gc.ca/english/resources/statistics/facts2012-preliminary/01.asp

Just me
Guest
Just me

Try and do the math. How many years did the program last? Did “investors” admitted elsewhere resettle in Van area? I think that a 200k estimate for Van is nit pie in the sky.

Newcomer
Member
Newcomer

It is a guess made without effort or research and, as such, is of no use to anyone.

Just me
Guest
Just me
You do the math. Introduction The IIP was originally created in 1986, and provided investment capital to private and provincially-administered investment funds and business ventures with the goal of job creation. The IIP is designed to meet three economic objectives: Attract experienced business persons to Canada; Raise investment capital for economic purposes; and Contribute to the IRPA objective of ensuring that the benefits of immigration are shared across all regions of Canada. In 1999, the program was significantly redesigned to address program issues related to fraud and mismanagement, losses suffered by investors, and burden related to regulatory oversight. The current program offers permanent residency to individuals who meet specific business experience criteria, possess a net worth of at least $1.6M, and are able to make an $800,000, five-year, zero-interest, guaranteed investment. Investment capital raised through the program is allocated to… Read more »
realist
Member
realist

David Ley, B.A. (Oxon), Ph.D. (Penn State)
Dept of Geography, UBC (Head, 2009-12)
Canada Research Chair in Geography
Fellow of the Royal Society of Canada
Trudeau Fellow
So we can agree he has the credentials and experience to pronounce on such matters. That of course does not preclude error, bias, racism, lying, corruption, etc.

Just me
Guest
Just me

Professor Ley has been documenting the disturbing facts about millionaire migrants for years.
Yet, it seems people on thus blog continue to think this us all nonsense. Like climate change deniers and antivaxers?

realist
Member
realist

Ley quoted in SCMP by Ian Young in 2014:
http://www.scmp.com/comment/blogs/article/1440792/immigration-property-prices-and-vancouver-experts-view

“There are interest groups who are in denial and the moment that you or I make a suggestion [about the impact of rich immigrants on property prices] we are immediately racist and this is how the discussion has been closed down,”

Newcomer
Member
Newcomer

I haven’t seen anyone make an accusation of racism over such claims here. Claims that Chinese money is the dominant factor in VRE are not racists, they are just wrong.

realist
Member
realist

Accusations of racism have been made about such claims on this blog, but less often recently. As to offshore Chinese money being the dominant factor, that is most certainly the case in certain sectors of the VRE market – indeed, in some, there is little else.

Newcomer
Member
Newcomer

Sure, in some sectors. No question.

patriotz
Member

320,200 foreign born residents of metro Vancouver of ethnic Chinese origin (all source countries, all dates of arrival). I find the idea that 80% of them came under IIP simply absurd. I know this is from NHS which has issues, but it’s consistent with other sources.

metro Vancouver ethnic origin foreign born

patriotz
Member

Sorry bad link. Use this link and then select first generation from generation status.

link

Newcomer
Member
Newcomer
Those are both well-considered and well-written articles. Thank you for taking the time and thought. The more people think about this, the better. The BC government’s interventions in the housing market have crippled more people with debt than they have set free with appreciation. Living in a million dollar home has no advantages over living in a 200K home until you borrow or sell. As most people are scared to sell and rent, almost everyone takes on debt instead, either through equity loans or by trading up and taking on a new mortgage. The number of actual winners in any age bracket is tiny. You are absolutely correct in pointing out that the problem must be addressed through market mechanisms. The easiest way to fix the problem is federally, through the CMHC and banking regulations, but it doesn’t hurt to… Read more »
Stephen Price
Guest
Stephen Price
Good points. The one thing I’d say about residents and worldwide income is that it doesn’t do a good job of addressing astronaut families, where the service-receiving portion of the family is in Canada and the income earning portion of the family is elsewhere. The current tax system in essence assumes a geographically co-located nuclear family not a global family. We have the stats to see that IIPs are using this strategy, but it isn’t nearly as easy to identify what proportion of Canadian-born people are using similar tax avoidance strategies. We do know that KPMG and others make a good business off of advising people on how to execute them, though. It is way harder (and more expensive) to chase down evaders one by one and too easy to be an aggressive, but still technically legal avoider. Even avoiders… Read more »
Best place on meth
Guest
Best place on meth

You sound like the guy I was listening to on CBC radio this morning.

Good article.

Combat roach
Guest
Combat roach
Best place on meth
Guest
Best place on meth

Turdeau was finally shamed out of his private dinners with communist chinese billionaires.

The Trump effect continues to pay dividends.

Meanwhile, the asshat known as BC Premiere says this:

“Clark has repeatedly accused the Opposition, saying the BC NDP would rather use taxpayer money to finance political parties”

Yes retard premiere, that is the whole point. Public funding means you answer to us, not to developers or communist chinese.

Here is 1 million dollars from us to run your campaign…use it wisely.

YVR
Guest
YVR

With social media and the internet you do not need to spend $100s of millions on a campaign. Advertising on TV and print advertising are the least efficient way of getting a message out. Trump just proved that. So did the leave vote in Brexit. Money doesn’t win votes like it used to.

Just me
Guest
Just me

One million is small change for Christy Clark. She hangs out with people who measure stuff in 100s of millions.
And she absolutely loves it!

paulb
Member
Active Member

New
129
Price Change
22
Sold
133

TI:7616

http://www.clivestevepaul.com

Just me
Guest
Just me

Worst numbers in at least two months? Loads of sales….when I see this I feel like a new horror movie is starting.

Shut It Down Already
Guest
Shut It Down Already

paulb
Member
paulb
New
151
Sold
140

TI:7441

11 months 29 days ago

ostritch
Member
ostritch

The solds for Van West townshouses, condos, duplexes…. going for ask or maybe 5% off. And asks are high. None of this back to Dec 2015 nonsense. If you’ve got balls, sell your condo and move to SFH Eastside when those two lines come closer together. Then wait.

Oracle
Guest
Oracle

They come for the superior education.

Righttttt!

http://vancouversun.com/news/local-news/new-trend-sees-adults-with-families-entering-b-c-as-foreign-students

For those that want the truth. The changes to express entry immigration means starting this summer, a whole host of foreign students will get PR.

The 15% tax created a vacuum and that’s why low sales etc. But come summer when many students ‘graduate’, they will get PR within 30 days and BOOM! Vancouver detached Raines upward trend.

Ignore the like of Newcomer etc. They are not here to help you.

YVR
Guest
YVR

Come summer prices will already be down 50%. You expect Filipino adult students to save things? They are in the same boat as broke immigrants from India like you. Except most Filipinos don’t end up driving cabs.

Oracle
Guest
Oracle

Why you responding to my posts you troll.

Wolf in sheeps clothing. Let others decide about the truth I post. Seems like only you and Newcomer downvote. Vested interests? Members of of CPOC?

Trump train coming!

Newcomer
Member
Newcomer

Ma’am, please. We spell that CPC. There’s no “O” in the abbreviation. The Committee is very disappointed in you, I must say. Show a little more care in your spelling.

Shut It Down Already
Guest
Shut It Down Already

I’d downvote you if I could.

Best place on meth
Guest
Best place on meth

Accounts are free.

Best place on meth
Guest
Best place on meth

““The point I was making in Asia is ‘don’t think it’s a slam dunk’” to become a permanent resident of Canada by starting off as a foreign student, said Kurland.

A frequent adviser to the federal Immigration Department, Kurland said odds remain stacked against foreign students (and temporary foreign workers) being approved as permanent residents.

Competition for citizenship is intense, even if a foreign student completes higher-education degrees in Canada and works for years, Kurland said.”

Whoreacle, please remove this bogeyman from your short list of “immigrants who will make house prices go to $10 million”.

Thank you.

Oracle
Guest
Oracle

Not all students. Only takes about 10% of the 400,000 plus here. So if 100,000 get PR per year via EE, that’s 10,000 rich households. As much or more than the IIP.

Don’t get so hoodwinked by others here and bend under pressure. Learn from trump.

A leader who puts his people first. Imagine that!?

UK and USA to forge alliance. Either you’re with us or against us.
Canada better smarten up or there are gonna be huge consequences here.

UK and USA to back it up too!!!

history
Guest
history

Student economy is a hoax
BC west coast is nothing more than a big baby sitting industry. Idiots bring their laundry and inheritances, then ‘volunteer’ to belong to an in crowd. The capatilists exploit this.
Snowflakes post on this forum ad nauseum, but if they had gainful employment compared to their housing expense, we’d get somewhere, but they dont, so their opinions and advice are sheit.

Just me
Guest
Just me

http://www.ctvnews.ca/business/b-c-s-foreign-buyer-tax-soothes-problematic-vancouver-housing-market-1.3257966

“We have enough history now to distinguish the clear divergence between Vancouver (down) and Toronto (still straight up),” said BMO Chief Economist Douglas Porter in a research note on Tuesday.

Meanwhile, Toronto and Victoria – two of the Canada’s hottest real estate markets where foreign investment is unchecked – have shown continued price increases.

“In case there was any doubt what force was at place, note that Victoria has tracked closer to Toronto’s behaviour than Vancouver’s,” Porter wrote.

Newcomer
Member
Newcomer

Yes, Tuesday. Which was when this was debunked. Keep up, man. It makes it more fun.

Just me
Guest
Just me

Go ahead and debunk again. I don’t remember anyone providing evidence to the contrary.
I know it does not fit your belief system. But reality does nit care about your belief system.

Newcomer
Member
Newcomer

Sorry. You keep doing this. You ask for data that has already been presented and for people to repeat arguments that have already been fleshed out and chewed over in full. I am not going to spoon feed you like that anymore. It was Tuesday, go back and read if you are interested.

Just me
Guest
Just me

Again. There was no comment in Tuesday’s thread that could reasonably question the data I have posted today.
Since this in an RE blog, I think reposting this comments is legitimate and correct.
You like to argue for the sake of it, especially if someone mentions China. Perhaps you are from there ( I don’t care one way or the other) and that’s why you feel so ticked off..

Newcomer
Member
Newcomer

Sorry, I didn’t mean to say that you shouldn’t repost links. I just thought that you might have wanted to know that other people had already pointed out the serious flaws in the reporting.

I’m not actually from China, grew up in a different “middle kingdom” known as Ontario. I tend to respond to lazy/emotional thinking in which people blame problems caused right here at home on some external boogeyman. China is just the boogeyman de jour. For your interest, I’ll mention that I am about as opposed to the government of China and their economic system as it is possible to be, but as that has nothing to do with real estate I don’t go on an on about it here.

Just me
Guest
Just me

As I said, I din’t care at all if you are from China, Ontario or Papua New Guinea.

However, I do care about truth being misrepresented.

Newcomer
Member
Newcomer

Yes, that is evident. You work very hard to that end.

Just me
Guest
Just me
YVR
Guest
YVR

What percent of Toronto and Victoria home buyers do you think are foreign? Is it 100% or less than that?

Just me
Guest
Just me

Of course they are less than the total.
My point is that the amount of money the introduce in the system (cash or credit) is far from negligible, as you guys make it sound.

YVR
Guest
YVR

What percent?

Just me
Guest
Just me

Of course, it must be 0%. You gave ample proof of that with your insightful contributions.

YVR
Guest
YVR

I say 10%. What is your estimate. So far all you have stated is less than 100% but more than 0%.

Just me
Guest
Just me

It depends on the area. Between 2015 and 2016, based on the numbers about the size of China outflows I have gathered last week (and for which I took much abuse) , in Vancouver west side, Richmond and Burnaby the share was at least 50% but likely higher in some months.
I am not talking about the number of foreign national (non-resident Chinese) but about the share of total money mobilized by such individuals (directly or through their proxies).

Newcomer
Member
Newcomer

That’s what going with your gut will get you.

YVR
Guest
YVR

Just Me, I thought you said the foreign buyers tax had no impact on prices going down and it was reduced outflows from China that have caused the correction in the Vancouver area so far. How come those reduced outflows are having no impact on Toronto and Victoria?

Just me
Guest
Just me

Yes. That is exactly what is happening. The discontinuity is a month before August. The tax exhacerbated it and made it more visible.
Outflows have started to slowdown in spring 2016.

My point here is exactly that the markets diverged when chinese cash fliws started to dry up.

YVR
Guest
YVR

“Outflows have started to slowdown in spring 2016.”

Why did this reduction not impact Victoria or Toronto? Why is only Vancouver going down?

Just me
Guest
Just me
Good point. The reason is simple. The slow down in Chinese outflows is visible in Vancouver because we had a very high baseline investment (due to cultural and historical links with China, if I was chinese Vancouver and S.F. would be my favorite destinations). For our market, a change in the money intake from China is significantly more important. The baseline chinese money inflow in Toronto and Victoria was much lower, and they also got some side effect from the foreigner tax (at least temporarily, as the chinese investors figure out how to evade it). Essentially, the money was less, but channelled more heavily towards those municiplaities (as well as Seattle, as I read!) However, you are correct in pointing this out: the curbs to outflows put in place by Xi Jinping are becoming tighter. If he keeps them in… Read more »
YVR
Guest
YVR

What you are saying si the foreign investment in Victoria and Toronto is so low the slow down in outflows has no impact? But you said earlier foreign money was the primary driver of those markets? You can’t have it both ways.

Just me
Guest
Just me

Yes I can. There is a difference between absolute values and proportions. If you get a bigger proportion of a smaller cake, you can still have statistically observable impacts.

However, I agree that if the cake keeps shrinking (cross fingers) then those markets will hit the skids as well.

Newcomer
Member
Newcomer

Thre are far more people of Chinese heritage in Toronto than there are in Vancouver.

Just me
Guest
Just me

Not proportionally. As a share of the population, metro Van is way ahead.

Newcomer
Member
Newcomer

About 6% ahead, yes. But if you are looking for amenities, potential friends and so on, absolute numbers are more important than proportion. If you move to a village with population of 100, even if 50% of the population is Chinese, there is not going to be much chance of finding a place that sells fresh hot tofu like they make back home.

Bottom line, the reason rich Chinese people, who can choose, prefer Vancouver to Toronto is not the cultural links with China, it’s the same reason everyone else has: Vancouver is just a better place to live than Toronto.

Just me
Guest
Just me

If you count ethnic Chinese who are second generation (or more) Canadian the proportions are very different.
Vancouver is a more asian city, and concentrated in a way that makes critical mass. Just like Montreal has a bigger african and middle eastern community.
The point: Asians will have a bias to be here.

Shut It Down Already
Guest
Shut It Down Already

I imagine being 5 hours closer to home plays a small part, but obviously there are lots of Europeans who chose Vancouver over Toronto despite it being further away.

Combat roach
Guest
Combat roach

Yet another sucking up tuhao’s shitshow of tastelesess, only shark fins and some puppy liver pâté are missing…

“For the lucky price of $888 per person, Four Seasons Hotel Vancouver is serving a ten-course feast of lucky dishes.”

http://www.theprovince.com/life/food/lunar+years+luxe+style+24888+dinner+vancouver+hotel+offers+lucky/12792628/story.html

Shut It Down Already
Guest
Shut It Down Already

What’s your problem? Just don’t buy a ticket and live your life.

Kim
Guest
Kim

I would like to have a vanity plate with four 4s

Shut It Down Already
Guest
Shut It Down Already

Then buy one. You’re the only poster here who feels compelled to tell everybody constantly how wealthy you are, after all.

Combat roach
Guest
Combat roach

Certainly I’m not going to buy a ticket but can’t ignore continuous public annihilation of Canadian social and cultural values by those primitive but rich show-offs and those local opportunists who would gladly sell out their children to make a buck if there is a chance.

Newcomer
Member
Newcomer

Perhaps not, but surely you can show enough self-control not to post about it in the comments section of a real estate blog.

I’m guessing you have lots of thoughts throughout the day, but I’m pretty sure that you don’t talk about your sexual fantasies to people in the line at Starbucks, you don’t tell you boss about your bowel movements, and you don’t talk about religion with people on your sports teams.

Why not bring that same level of respect for boundaries to this blog.

Stratahacker
Guest
Stratahacker

Stop telling people what to post. No one cares what you think.

Shut It Down Already
Guest
Shut It Down Already

You think a private event is eroding Canadian values? Sounds like jealousy to me.

Best place on meth
Guest
Best place on meth

“Steamed Live Sturgeon with Egg White Sauce”

That’s incredible. How does the fish survive the steaming?

These chefs are truly masters at their craft.

YVR
Guest
YVR

I just witnessed one of the great Chinese New Year feasts and celebrations. I was at Costco trying to get past the lineups for free samples of sausage rolls and cheese crackers.

No Money Down
Member
No Money Down
YVR
Guest
YVR

Interesting graph posted on Greater Fool yesterday. Of course Canada will be different.

http://www.greaterfool.ca/wp-content/uploads/2017/01/CHART-3.png?x64811

Abdul Lahazi
Guest
Abdul Lahazi

The Jon McComb Show: Christy Clark conflict of interest allegations land in court.
http://www.cknw.com/2017/01/13/262573/
BC Conflict of Interest Commissioner Paul Fraser’s son works for Christy Clark. Now don’t you think there is a conflict of interest right there? More rot with the BC Liberals.

Best place on meth
Guest
Best place on meth

Still 2 days left in the month but it’s going to end up with sales AND listings well below the 10 year average.

MOI will end up around 5 (balanced).

There’s not a lot of activity going on in this market for the last 6 months.

Just me
Guest
Just me

myrealtycheck.ca has been showing a consistent (albeit marginal) surge in higher asking prices. Perhaps they are trying to milk the CNY, but given the sales pick up of the last week one has to wonder whether money is coming back into the market.

Listings are sparse and low quality. It is incredible how many millions homeowners are asking for land value.

Thanks Christy Clark: you have achieved your objective. High house prices, low quality of life.

oopswediditagain
Guest
oopswediditagain

You’re right “just me” however the minimal price increases haven’t slowed down the amounts of the dropping prices.

In December: Average Change: -3.58% Up:129 Down:803
Overall $ Change: -54350759.00 Average Change Amount:-58316.27

In January: Average Change: -3.94% Up:265 Down:1183
Overall $ Change: -130358696.00 Average Change Amount:-90026.72

….. and those dropping prices are consistant. Keep in mind this is for all of the areas of Vancouver right out to Langley and Maple Ridge.

For just Vancouver:
in December: average Change: -4.16% Up:15 Down:114
Overall $ Change: -7910082.00 Average Change Amount:-61318.47

in January: Average Change: -4.16% Up:41 Down:171
Overall $ Change: -22836283.00 Average Change Amount:-107718.32

Perhaps April Fools might be a more appropriate celebration.

Just ne
Guest
Just ne

Thanks. This was a very informative post.

southseacompany
Member
southseacompany

“Mortgage rates resume upward march after brief pause”, Washington Post

https://www.washingtonpost.com/news/where-we-live/wp/2017/01/26/mortgage-rates-resume-upward-march-after-brief-pause/?utm_term=.87835993747c

“Mortgage rates escalated this week, gaining much of what they had given back the first three weeks of the year.”

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