It’s the end of another work week and that means it’s time for another Friday Free-for-all!
This is our regular end of the week news round up and open topic discussion thread for the weekend. A few recent links to kick off the chat:
–help to buy drives up entry prices
So what are you seeing out there? Post your news links, thoughts and anecdotes in the comments below and have an excellent weekend!
“The Real Reason You Can’t Afford a Home: A seismic shift in the global financial system is driving Vancouver’s soaring housing costs.”, The Tyee
https://thetyee.ca/Opinion/2017/02/20/Real-Reason-Cannot-Afford-Home/
” We blame the new art gallery in a low-income area. The hip coffee shop that follows. The developer who buys up all the surrounding property. Or the foreign buyers who snap up the new condo units before they’re even built. In our confusion, we often blame ourselves.”‘
“But the ultimate cause of Vancouver’s unaffordability crisis may reside in our financial system — and a seismic shift at its centre that’s now remaking the global economy. This shift helps explain why cities across the world are undergoing the same transformation as Vancouver. “
“Who’s Bubble is it Anyways?”, Van City Condo Guide
http://vancitycondoguide.com/whos-bubble-is-it-anyways/
“Why All Levels of Government Are Reluctant to Prick the Bubble”
“When it comes to the housing crisis in Vancouver there seems to be much finger pointing. Trudeau says it’s a provincial problem, Christy Clark alleges it’s a city problem, and Mayor Gregor just wants more bike lanes.”
“So who’s bubble is it anyways?”
Nice wrticle. Spells out economic incentives. One of the players coming out worse is Stephen Poloz and his team. They are aiding and abetting continued appreciation.
A man’s home is his castle?
http://globalnews.ca/news/3259972/86-year-old-alberta-man-sells-house-to-pay-village-painting-bill/
“The real data on the house next door is that it reduced the value by 15 per cent,” said Jackson, whose neighbour’s house was re-listed and sold for less money after the city determined it has “character features” on the exterior.”
http://www.cbc.ca/news/canada/british-columbia/vancouver-housing-character-houses-1.3973012
I see one of those 3 new build on east 41st finally sold…anyone know how much? Just west of Victoria Ave
Price goes up?
4682 W 6th Avenue, Vancouver
Feb 9:$3,199,999
Feb 13: $3,499,999
Change: 300000.00 9%
Many prices going up in anticipation of lifting the foreign buyer tax.
Panic Over China Is So Last Year, With Market Swings Subsiding
A key backdrop for China this year: a critical gathering of the Communist leadership this fall where the next generation of top officials is scheduled to be picked.
My worry is that China will open capital outflow spigots again as soon as Xi Jinping gets confirmed next November. That would be the end if BCas we know it if Christy Clark is still in power.
No, there is always option for the popular uprising and civil resistance. It won’t be the first time for people to stand up and defend their land.
Premier challenges cities to “step up and do their job” over housing supply
http://www.cknw.com/2017/02/17/premier-challenges-cities-over-housing-supply/
“Ultimately, cities like Vancouver and surrounding municipalities are going to have to decide that they want to be a part of the solution. Because the province can not do this without them,…”
Do what? Maintain a trend of ever increasing prices? I thought that high house prices were official policy for the BC Libs.
Christy Clark is part of the problem, not part of the solution.
What she means is that she wants the cities to drop their fees for her paymasters, the RE industry.
Only someone like Christy could try to shift the blame to others while bringing in measures that anyone can see are a desperate attempt to keep prices from falling.
Ontario’s lack of foreign-buyer data sparks concern about a Toronto housing crisis
http://www.theglobeandmail.com/news/toronto/ontario-isnt-moving-fast-enough-to-track-foreign-buyers-observers/article34074430/
Sunday Feb 19th Daily video review of Vancouver housing bubble news: https://youtu.be/rhKaVl2OdpM
“Why a mortgage that leaves room for retirement saving is a must-have ”
Younger generations are (and might keep) paying a golden retirement for house-rich boomers through their mortgages. But who will bail out them in older age?
Chinese?
Why should people who make dumb decisions get bailed out at all? What happened to living with the consequences?
This kind of home would certainly fetch a higher price on a equivalent location in Vancouver.
I wonde when Christy and De Jong will let us all know how the plan to implement the changes to the FBT, and which foreigners will be allowed to buy tax free.
I am preparing for changes that could make the tax virtually toothless. I know that is her true intention, and she is just thinking about the best way to go about it politically.
she is hoping that the public will forget all about the proposed changes and continue on believing the FBT is still in effect. if all else fails, plan B is to play cards close to the vest for as long as possible before making official announcement. by then horgan and ndp will have little to no time to tee off on the issue and make any inroads
Yup. I have seen TV adverts running on the message: “We introduce a tax on foreign buyers to make housing more affordable for locals”. They are paid by the government of BC, with public money.
So, Christy is: (i) misinforming the public, as we all know the tax will be heavily revised; (ii) doing so using public money.
Smart woman, right?
and remember folks, these changes will probably be retroactive to aug 2, 2016 anyway so it makes no difference to them (and those buyers who stand to benefit) if something is announced next week, next month or on the eve of the election
U.S. deploys carrier to contentious South China Sea
Do Americans who live in their houses have to pay cap gains tax when they sell? I can’t remember.
After you sell, there is a window of time to avoid cap gain, after that u paid cap gain.
Yes, the American system is totally crazy. You can use capital gains to buy new housing, otherwise they are taxable.
It forces you to buy a new place of at least equal value to completely avoid capital taxes. Effectively they create ever rising demand by households.
Housing in Nirth America is considered something that should be incentivized and treated preferentially.
Don’t forget tax deduction of mortgage in US also
http://www.marketwatch.com/story/chinas-economy-is-dangerously-close-to-unraveling-2017-02-18
China’s economy is dangerously close to unraveling
Nobody wants china to collapse more than I do, but damn…it’s taking forever.
I don’t think you actually want that, although I also believe it is inevitable at this point. A collapse in China’s credit market likely means global recession. Also I don’t think it’s surprising it’s taking so long considering it will likely be one of the largest credit bubbles popping in human history thusfar. They almost have 255% private debt to GDP in 2016, plus all the trillions in shadow lending that don’t show up in the numbers. We in the west should be very concerned about our quality of life when the credit situation in China starts eroding.
in the meantime, we can keep pressure on out domestic politicians and bureaucrats to tax the hell out of illegal foreign money and reduce the “temp” immigration streams.
I’m ok with that, in fact a global recession is needed at this point.
All of this fake wealth needs to be wiped out and the debts behind it called in.
That is basically the case. These distortions aren’t really good for anyone.
Xi Jinping must be propping things up until the congress that will confirm him next November. He can’t allow a crash to go occur between now snd then. He must be throwing everything he has to it. Capital controls might get even worse (or better, depending on your point of view).
This story sounds very appropriate for realtors over the next several months. Trying to save face, they sold their home to ostensibly travel the world, but they are selling their worldly possessions to pay for their wedding and get out of debt.
You would think that an astute real estate agent would know the market and would be making “millions”. lol.
Is that really your takeaway from that article?
hey guys, when is the crash gonna happen?
As soon as we block illegal Chinese money and reign in immigration (foreign students and 10 yr visa and TFW). Make no mistake, it will happen. Only a matter of time.
And for those that sell in the meantime , renters will do their due diligence that these people pay capital gains taxes. I know I will.
How you going to win?
So in other words, never?
It has already started.
Why don’t you tell us? You predicted the market to get even hotter last Spring and the market slowed down right at that point. Remember your cute space shuttle launch picture?
Zolo says that condo and townhouse prices are up compared to 3, 6, and 12 months ago.
So what? His prediction was that the market would get hotter, but the market slowed down and price growth receded, Townhouses and Condos included.
Daily R/E housing bubble review video for Feb 18th, 2017: https://youtu.be/S-8KbU-Ef-c
Market looks hot.
Been hot for a couple of weeks.
Not sure why you’re being voted down. Zolo confirms that the market is hot despite weak yoy comparisons.
118 is ‘hot’ for mid-Feb? last year’s average was 200 per day for Feb. That is hot.
It’s a hot sell/list, but volume and total dollar amounts are important too. We’ll see.
Inventory is liw by historical standards. Either people are delaying listings or there is a bunch of places frozen out of the market (held as long term safe deposit bixes).
People can’t afford to move up so they’re not selling their current home.
That is probably one of the few true things you ever contributed to this blog. I do agree it is a realistic hypothesis.
It’s unfortunate you confuse the truth with what appeals to you.
Could say the same for you. I guess you have your motives to defend foreign buyers and convince others that we should embrace Chinese millionaires.
Thanks for the strawman, but you’d do yourself a favour by posting some reliable info from time to time rather than simply prejudices.
I post stats that support my view. You hand wave and post anecdotes or unsubstantiated theories. Big difference.
Stats? Facts? ? From you? Ok, sure.
Since we are open forum right now I will share two real estate investments that have done exceptionally well for me over the past several years that allow participation in the US multifamily sector.
http://www.puremultifamily.com
The first recently agreed to a take over offer so it will likely be taken private. The second however is still able to be purchased and offers a very nice monthly yield.
I don’t hate RE. I just hate Vancouver RE.
Just found out that Foreign students or Temporary residents with kids can get the Child benefit. $600/kid. If they file a tax return where they worked a few days while in canada.
Wow
////////////////////////////////////////////////////
“Tax Benefits and Children
Married couples and common law-partners with children may receive additional benefits. “Kids qualify for child tax benefits, (many) based on income levels,” Juneja says.
The Canada Child Benefit is a tax-free, monthly payment for families to help them with the cost of raising children under the age of 18.
You must file a tax return to receive these benefits,” Juneja explains. You also must live with and be the child’s primary caregiver. Additionally, one spouse must be a Canadian citizen, permanent resident, protected person or temporary resident.”
https://turbotax.intuit.ca/tips/does-being-married-affect-your-tax-rate-in-canada-444
Lets bring the world here!!
This is a means tested benefit which was paid to everyone with kids until Sunny Boy took over. I pay taxes at 47% and we had ours taken away. I am not asking anyone to cry for me but its sick that I pay a crap load of taxes to support our system and someone from China with 1000x’s my wealth can come here and collect it because they don’t report their income.
“Its sick that I pay a crap load of taxes”
Well, somebody’s gotta pay to support the thousands of illegals that are trudging across the border to escape Trumpland, never mind that they can afford the thousand dollar taxi fare to get them there…and Bambi’s newly appointed Somali immigration minister doesn’t see any problem with it.
Looks like Oracle wasn’t too far off with his predictions.
Expect more of this type of thing if the BC NDP are elected. Everything is about increasing taxes for those that earn income and redistributing free benefits to those that report low income regardless of wealth. So far they have promised free childcare, free MSP and free carbon tax cheques all sent to wealthy home owners paid for by anyone who reports income. Who know what other taxes they will increase to pay out to low income earners.
Pants on fire! Just taking after Christy, right?
You cannot convince YVR. He will refuse to believe even the plainest of evidence. He just hates the NDP and will never accept they may do somthing better.
Oh he believes it. It’s not hard to tell the difference between simple ignorance and malicious lying.
Sorry can you point out the lie? Everything I stated is in the NDP policy and they have held recent press conferences stating such. The link you provided to a sham bill last year is not in their policy or even stated this would take place if elected. Plus the bill has so many holes in it virtually nobody would pay anything. People who own for 5 years are except for example. That will just prevent people from selling in order to keep that exemption.
“People who own for 5 years are except for example.”
Wrong. The exemption is for principal residences owned for the previous 5 years. Others such as offshore owners would pay indefinitely.
Oh by the way, the NDP is not proposing free child care, but would charge $10/day, as widely reported. Try to make your lies less obvious..
$10 a day child care?
You’d almost think the NDP were putting families first.
That would be a first in Vancouver for sure. I am also giddy!
“You’d almost think the NDP were putting families first.”
It takes from one family and gives to another with a massive government bureaucracy taking 50% in between. Ever notice which families have all the kids in Vancouver who may take advantage?
How was that a lie?
“People who own for 5 years are except for example.”
Wrong. The exemption is for principal residences owned for the previous 5 years.
Beyond splitting hairs. That is splitting atoms.
I think we agree here.
For once.
You are naive and easily sucked in. The NDP was in power before. Google Bingogate, Fudge it Budget, Fast Ferries, NDP BC tax increase, etc. Note BC income taxes were cut by 25% the day the NDP were thrown out last time. That 25% tax cut will be put back in if the NDP are elected.
That is 100% true. As much as I hate Kristy the NDP will raise taxes the second they get in and they will raise them a lot!
I guess you both hate paying taxes so much that you’re happy with third world services including shitty health care and education.
You’re also completely missing the typical BC Lib trick of lowering your income taxes on one hand while raising your fees elsewhere with the other hand.
Higher taxes does not equal better services under the NDP. They equal payouts to unions who have supported them for the past 12 years and need payback. Medical and education sucked the same when the NDP were in power but we had higher taxes.
User fees at least make EVERYONE pay. Income taxes only make those who declare income pay. You have been whining about HAM not paying enough for years. No user fees with higher income taxes makes it worse.
But lower taxes certainly guarantees abysmal services.
“Third world services”
Spoiled brat.
The relative decline in quality of services is tangible, in schools, hospitals and physicians’s care.
He is just being honest.
Christ Clark would rather give an additional tax cut to homeowners than spend some serious money in socially important services.
I share your view on this. The means-testing allows millionaire real estate owners in Vancouver to receive yet another transfer from the government.
Hiwever if you actually have a good productive jib and income you get nothing. The usual story: reward wealth, tax labor.
Another example is TFSA allowance: they were reduced because Trudeau said they favored the rich. Then, why not reduce the tax-free allowance on residential real estate? Just cap it, like you do for TFSAs.
Why should my wealth be taxed so much more heavily if I don’t hold it in RE? And does it make sense to have no tax on multimillion dollars residences?
This is the leitmotif in BC and Canada for the past 10 years. Why no politician or academic asks these hard questions?
Plenty of academics have been asking these questions. As for politicians, they like to get elected. However the BC NDP does have a sound proposal for taxing those hiding wealth in RE. But they had to limit it (de facto) to rich immigrants. There are simply too many boomers counting on cashing in for anything wider to be politically possible.
“I pay taxes at 47% ”
That means you (individually) have a taxable income of over $200K. Note that the 47% is the marginal rate, not the average rate.
Now if the NDP’s bill (link posted) had not been voted down by Christy and gang, a rich immigrant with a $3 mil house would be assessed the same ($60K annually) as the provincial income tax paid by someone earning $500K.
Can you show me something where the NDP have stated they will implement this if elected?
YVR you are beyond any hope of redention. He just showed you a bill, and even if they implemented half of that bill it would be massive progress from the status quo.
YVR, which riding do you reside in?
You got me. Its actually closer to 42% average but in any event it is a shit load of tax. I think I am paying my “share” but the NDP and the Federal Liberals considers me “rich” so this next budget they will find more creative ways to get more tax out of me. Look for the capital gains inclusion tax to go up to 66-75%.
That would make teh wedge between taxation of hosuing andmother wealth unacceptable.
Now if the NDP’s bill (link posted) had not been voted down by Christy and gang, a rich immigrant with a $3 mil house would be assessed the same ($60K annually)
Under the NDP plan, which the NPD has yet to confirm as policy, they pay $60K after 1 year if they don’t have a renter or a number of other loopholes. Under the current 15% tax which the NDP opposed they pay $450K up front and $450K again for each and every house they flip. Which is a bigger deterrent? $60K is the same as property purchase tax which was no deterrent.
“Under the current 15% tax which the NDP opposed they pay $450K up front and $450K again for each and every house they flip.”
Did you actually read what I said and you quoted? I said a rich immigrant, who pays nothing at all under Christy’s foreign buyers tax.
And the NDP did not oppose the tax on offshore buyers. They wanted to exempt those who work and pay taxes in BC, a policy which Christy herself now supports.
Foreign buyers’ tax does nothing for affordability, needs to be fixed: Horgan
Not if they have owned the house as a principal residence for 5 years. Not if they claim to rent the house or part of the house and claim a nominal amount of rental income on their income tax filing. After deducting expenses they would pay no income tax on that rental income but avoid the new tax. Too many loopholes to be effective.
“Just found out that Foreign students or Temporary residents with kids can get the Child benefit. $600/kid. ”
Nowhere does it say in your link that foreign students with kids qualify for the CCTB.
Yes, children of temporary residents (foreign students, TFW, and IMP) are eligible for the maximum child benefit, free MSP, and free grade school education (no tuition).
Confirmed it via relatives.
10 Year visa holders are not eligible at this time.
Foreign students are not temporary residents.
Your disinformation and sock puppetry is disgraceful, WOW.
If they are not, then they cannot be accounted for by the census.
The instructions for the census say “Students who return to live with their parents during the year should be included at their parents’ address, even if they live elsewhere while attending school or working at a summer job.” Students who don’t, whether local or foreign, are supposed to be included at their residence on Census Day.
So, assuming that foeign studentsndo respond to the Census, we should be able to approximate their numbers and check whether Oracle’s numbers stand up.
Let us know when you’re done.
170,000 foreign students and IMP/TFW workers in metro As per Just me above.
Probably another 150,000 ten year visa holders.
That’s like 320,000. And about 70,000 become PR each year and another 70,000+ take their place.
Out of control!!
15% of metro Vancouver population!!! And people wonder why rents are exploding and housing is goin thru the roof.
People keep making fun if you, but I think sone of your numbers sound less and less crazy as one cinsiders the sheer magnitude of the students’ flows. The government of Canada has gone, to put it mildly, totally batshit.
Short term electoral convenience wins over long term planning. The evidence mounts, but many people choose to ignore it.
Leaving aside the child benefits (which I agree is nuts) think about this simple fact: allowing students with work permits to buy homes like locals will make the FBT toothless, will generate some money short term for a subset of the population but will eventually ruin the long term prospects of a vast majority of residents. A large chunk of the housing stock will be effectively removed from the market. However, pointing this out is considered extremist, crazy or worse.
He’s implying a 15% growth rate, whereas we know the real number is nothing of the sort. He simply enjoys exaggeration. The census says metro Vancouver grew 6.5% over 5 years (not per year) and I think other posters have provided stats the development out-paced population growth.
Not all groups grew at the same speed. What is the figure for “foreign students”? And would they even appear in the census?
Relative growth speed between groups, or change in the mix, makes little to no impact on housing availability.
Again, we’re building houses at a rate equal to or in excess of population growth.
I’ve no idea what motivates all these developers, quite honestly. Maybe it’s because the locals pounce on everything they build because they think it’s a better bet than trusting the money they don’t have to “Wall St banksters” in RRSPs they’re not contributing to?
Again, the queston is: does the reported growth rate include foreigh students? I cannot see any mention of them, perhaps someone wo know the census can chip in. We are talking about large numbers of people who do buy RE.
Census methodology is posted on their website.
Then show me where they say they include foreign students. If you are so confident, provide some proof. Thanks in advance.
http://www23.statcan.gc.ca/imdb/p2SV.pl?Function=getSurvey&SDDS=3901
“Non-permanent residents are persons who hold a work or student permit, or who claim refugee status.”
It’s under the bit where it says “methodology”. Sorry if that’s confusing.
Great. Now count them over the past ten years.
Lies.
Close to 300,000 immigrants per year and your saying Vancouver on receives about 27,000/year to account for a 6.5% growth rate over 5 years???
Either stop the malicious lies or go do grade 8 math again.
They are not counting the temp residents who are more or less permanent.
And PNP immigration counts you an immigrant of the province that sponsors you. Official stats say NO QIIP immigrants went to BC. All went to Quebec.
Keep believing this bullshit.
Dude, you pulled those numbers out of your ass again. You also forget that people leave. It’s net migration which counts.
15%/year population growth? That’s a doubling every 4-5 years you utter clown.
Just me, you use the future tense when you outline your scenario. However, the process you describe has been going on less obviously for decades, and has accelerated in the past 10 years. As far as Vancouver RE is concerned, the changes are well advanced and will likely continue, barring a major economic reversal or political black swan.
For the record, I have never dismissed Oracle’s observations, many of which have more foundation than most on this board would like.
“Working from those figures, the Business Council of B.C. calculated that the real estate sector – including construction, renovations and other spinoffs – accounted for 35 to 40 per cent of the province’s economic activity.” “Since 2012, growth in the province’s real estate sector outpaced the rest of the economy. Each year, it expanded at a rate of between four and six per cent, while the rest of the economy was averaging two-per-cent growth. It means the overall economic growth that B.C. has enjoyed has been pulled up by real estate.” “However, Central 1’s senior economist, Bryan Yu, said it’s not all bad news. The 15-per-cent foreign buyers tax did help temper the market in the Lower Mainland, but in other communities where the tax was not applied, sales are still strong.” “They have built their economic plan on a… Read more »
“This Premier has the approach that you starve the system for years, and then at election time, you put the money back in. It’s a terrible approach. When you take it apart and then put it back together, it costs more than if you had supported the system all along,” she said.”
I would imagine that a psychopath like Christy Clark isn’t too concerned with the long term effects that she has on our province.
People fall for it, just like they dud fir her first time buyers loans. I think there is a large group of individuals who simply refuse to see the truth, even when it is served to them on a silver platter.
Christy Clark would sink the whole province for her own political career. So far her plan is working.
You mean those local people buying with a herd-like mentality using the government incentive are right to blame those greedy foreigners? Is that the truth they’re not seeing (presumably because they’re too busy browsing MLS)?
35 to 40 per cent of the province’s economic activity
That is 40% of peoples jobs depend on this sector. Does anyone believe the NDP will kill 40% of the BC economy? No way, they will try to keep the bubble going just like every other politician. Of course all bubbles pop so it makes no difference who is in power.
The NDP is not known for being election-smart. That is why they are so seldom in office. They don’t necessarily do things that are likely to get them elected. Sometimes, that’s a plus.
Also keep in mind that the NDP does not have strong central leadership. They do everything by committee and in-fighting, so they don’t really have a mechanism for either implementing plans or being responsive the way the BC Liberals do. Once they are in power, things will just sort of naturally fall apart and roll down hill with gravity.
I agree the NDP policies would be bearish for the general economy which will impact real estate. When that happens they will be forced to try to boost the RE sector as jobs are lost and other businesses shutdown. The only part of the RE sector not tied to the local economy is foreign investment so I suspect we would see more HAM friendly investment policy under the NDP. That is all they will have. That is on top of all that new free stuff like no MSP, free child care and carbon tax rebate cheques that is attractive to HAM.
You give them too much credit.
Not even Pindarus had such fantasy! You have predicted multiple stages of the future under an NDP givernment, with no evidence or supporting facts. It is good to have opinions, but it is even better if they can be explained.
Christy proves no one wants that to happen on their watch. How can the NDP be any different?
“real estate sector – including construction, renovations and other spinoffs – accounted for 35 to 40 per cent of the province’s economic activity.”
A sad statistic. Why would anyone ever work, invest, invent, and dream when all that stood between them and great riches was the construction of a few glorified shacks? We have found the cure for world poverty!
It’s hard to see how anything could go wrong.
Things are going wrong for some people. But thise people are not the rich foreigners waiting in the wings for the tax to go away. It us regular Canadians who are totally and completely priced out from the place where they live and work.
But we need students to live in SFHs on the west side. Our economy would suffer otherwise, right?
see all the chinese language adds to try and get them to work?
good luck. Lazy bunch
But if you look at the counties where global wealth is coming from this is nothing new. The working class are priced out of where they work too. And in some countries, there are classes of people who are not permitted to own land or homes. It’s nothing personal. They probably would think you are exaggerating or nostalgic for something that never existed if you explained how things were here for regular people after WWII.
“Vancouver’s real estate market will keep falling: BCREA” Global with video
http://globalnews.ca/news/3258122/vancouvers-real-estate-market-will-keep-falling-bcrea/
“Residential home sales in B.C. are forecast to slide 14.1 per cent in 2017 and the average home price should fall nearly five per cent, according to a report from the B.C. Real Estate Association (BCREA).”
Is this a weird joke? Vancouver has stopped falling.
301-1616 W 13th. 1200 sq ft 2-bed in primo South Granville EXCEPT this concrete mid rise is the last building anyone wants to buy in the area. It’s an old building and it certainly smells that way when you walk in its small, gloomy lobby. That’s why it’s ALWAYS been way less per sq ft than any other building in the hood.
Each floor had a balcony but most are framed in with spalling concrete your companion for moist sunny afternoons. The upper floors have nice views but this unit won’t. Ask 739K. Sold 740K. One penny over ask Is a penny too much but someone must have bee. feeling pressure. This can’t be a declining market.
Below 750k the market is active. Above, it is dead.
Massive price gap between the two housing levels.
