BC, data, debt, equity, hype, prices

Vancouver homes lost 49% of their down payment in one year.

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224 Comments

Southseacompany pointed out this article at global news: according to zolo, Vancouver home prices have lost almost half of their down payment value in one year.

“Once considered Canada’s hottest locale for real estate, home values in the West Coast city took a beating over the course of a year, with the average home price dropping from over $1.1 million in February 2016 to $995,583 a year later.”

“Zoocasa calculated the loss (or gain) of return by taking the year-over-year change in average home prices and then dividing it by the down payment buyers would have had to make in February 2016.”

“By this measure, Vancouverites lost 49 per cent of the return on their down payments.”

Read the full article here.

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eddy

NDP Plans 2% Yearly Tax for Non-Resident Home Owners

https://www.biv.com/article/2017/3/ndp-would-expand-bcs-foreign-buyer-tax/

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bestplaceonearth

The NDP will be stuck on the opposition chairs for a long time.

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Best place on meth

Thanks for the tip, the political predictions on this blog have been spot on so far.

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Burnaby

And trump will never be president.

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Newcomer

Much better description. It’s a good idea. But I can’t see it being popular with people who vote.

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Whistler or bust?

The American Dream That’s Not Backed Up by History https://bv.ms/2otxVm8

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paulb

New
168
Price change
36
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120

TI:8013

http://www.clivestevepaul.com

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Just me

For all you BC Libs voters, this sums it up:

“n a city in which 45 per cent of the population is foreign-born, Kurland said, it would be straightforward for CRA to run a data match on people who claim they are tax residents of Canada to see if they are really paying income taxes.

“But if B.C. doesn’t go after the data, CRA can’t do its job.””

Christy Clark is corrupt to the core. Rotten. And she is taking us all for a ride.

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Best place on meth

First paragraph should be enough to seal the election in a normal world. “Immigration lawyers and Opposition politicians are pressing the province to start an information-sharing system that would make it much harder for house sellers to evade capital gains taxes by claiming they are “residents of Canada for tax purposes,” when they are not. Some critics estimate the tax loss at hundreds of millions of dollars.” BC Libs have passed on a massive amount of money easily taken from offshore speculators and money launderers who have no rights in BC, can’t vote here and shoudn’t even be allowed to buy real estate here. In return, we local wage slaves get to pay taxes on their behalf and provide free services for them while systematically being evicted from our city as home prices and rents make it impossible to stay… Read more »

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Best place on meth

BC Lions are for sale.

This would be a great laundering opportunity for a student, housewife or duck farmer.

Option to rename the team to BC Dragons.

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Doomcouver

Buying 20 condos and leaving them all empty seems like a much more discrete way to launder money.

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Best place on meth

Chinamen are torn between discretion and prestige.

It’s hard to have a pantload of stolen cash and yet try not to flaunt it.

What to do……

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Vancouver Review

Mar 31, 2017 Daily Review Vancouver Real Estate Housing Bubble News

https://youtu.be/aPM8IMHdelI

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Sebastien

Burnaby again:

214 N Boundary Road, Burnaby
Oct 8:$2,188,000
Mar 30: $1,899,000
Change: – 289000.00 -13%

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Oracle

See if it’s listed on Juwai.com

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southseacompany

The governor washes his hands;

“BoC’s Poloz says rates not fueling housing speculation: report”, Reuters http://ca.reuters.com/article/businessNews/idCAKBN1722KM-OCABS

“Canada’s low interest rates are not fueling speculation in the housing market, Bank of Canada Governor Stephen Poloz said in an interview published on Friday”

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Doomcouver

So in a nutshell Poloz’ argument is that speculators would speculate regardless of the interest rate they have to pay. What incredibly flawed logic. The BoC keeps rates low to incentivize businesses to borrow, but when asked if housing speculators are being incentivized to borrow as well their answer is that no, that definitely isn’t happening. What a tool…

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Reasonfirst

W T F

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Mathew 27:24

When Pilate saw that he was accomplishing nothing, but that instead a riot was breaking out, he took water and washed his hands before the crowd. “I am innocent of this man’s blood, he said. “You shall bear the responsibility.”

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Newcomer

That’s odd. He knows better, so it almost seems as if he is not being entirely honest.

I can only imagine that, as he feels he cannot cut, he is just trying to get as many dovish soundbites as possible out there.

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Oracle

If rates are not, then what is?

Yes. Foreign $$$ and immigration.

The bulls here are trying to brainwash the sheep here. In 2002, rates were 5% for fixed and market took off.

Same thing in 1985…Mulroney opened floodgates and market took off. Rates were 10% plus.

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Shut It Down Already

So you don’t remember an event in 2001 which cratered interest rates, crashed the stock market, and caused flight to investments perceived to be “safe”?

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Oracle

You are out of you right league son. You proved it the other day. Go take a Math 10 course or something.

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Shut It Down Already

You mean the discussion you ran away from after me showing once again that you’re full of it? Gotcha.

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YVR

“BoC’s Poloz says rates not fueling housing speculation: report”

Somewhat true. Lowering rates causes house prices to rise because people can afford more, which in turn fuels speculation, which in turn causes house prices to rise, which causes more speculation and so on and so forth. It is more the lowering of rates not so much the fact they are low. Raising rates throws cold water on the whole chain.

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Best place on meth

“When you’re borrowing money to buy a house and you think you’re going to make 20 percent over the next year, I don’t think it’s going to make a difference if the interest rate you’re paying is 2 percent, 4 percent or 6 percent,” Poloz said.”

A small, retarded child knows otherwise.

Thank you Polozer, for showing us how doomed we are under the leadership of idiots.

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Doomcouver

The cognitive dissonance of central bankers on display for all to see.

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Just me

Poloz is hopeless. When you look at his face, you know he should not be in that position. He has no clue. He must be very good at office politics to be up there.

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Combat roach

What happened to “Panda Bonds”, not much talk lately?

http://globalnews.ca/news/2798386/concerns-raised-over-panada-bonds-issued-by-b-c-government/

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Abdul Lahazi

“the Ministry of Finance wouldn’t disclose what interest rate the province of B.C. is getting from its deposit in Singapore.”

I have to wonder: why the secrecy on a public investment… and why structure the bond sales in the manner they have? “They believe that the panda bonds are less about making money, and more about building relationships in China.” Really? That’s quite weak… I smell a rat.

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Doomcouver

Yeah the optics of this is really bad. If they’re not releasing what interest rate they’re getting one can assume it may be lower than they’d like to admit. If they’re receiving an artificially low return this is effectively a bribe.

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Just me

More dirty BC Libs business. Is there anything at all these guys can be trusted with? Too long in power, corrupted beyond repair.

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bullwhip29

Province promises $2.2 billion toward Metro Vancouver transit plan
http://globalnews.ca/news/3347715/bc-promise-2-billion-funding-metro-vancouver-transit-plan/

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bullwhip29

prov funding share to increase to 40% from 33%

photo op at 9am in surrey. refreshments and hor d’oeuvres to follow…

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bullwhip29

Vancouver’s shockingly high ‘affordable’ rents
http://www.metronews.ca/news/vancouver/2017/03/31/vancouvers-shockingly-high-affordable-rents-.html

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southseacompany

“We’re on the cusp of a milestone that could mean no turning back on interest rate hikes”, CNBC

http://www.cnbc.com/2017/03/30/interest-rates-fed-milestone-could-mean-no-turning-back.html

“With little fanfare, the U.S. Federal Reserve could reach a very big milestone Friday on the road to normal.”

“That is because, in the eyes of some, the Fed will have reached its target inflation rate. On Friday, the headline personal consumption expenditures inflation data is expected to come in at 2 percent year-over-year.”

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Newcomer

Match that with Poloz’s statement today and looks like CAD will be going on sale.

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Doomcouver

I should really get a FOREX account. It seems like going short CAD will be an overbought play though….

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Newcomer

Just buy US equities, it’s easier and has a hedge build in.

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bullwhip29

other than the fact that it could very well be 1999 or 2007 all over again, your advice sounds rock solid…

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Newcomer

2007 rocked for me. If you think naked forex is safer, load up.

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Doomcouver

Yeah the real danger is where you think the bottom of the CAD/USD is. Historically the lowest it’s ever been is just shy of 62 cents in 2002. So if you think it will go that low then there’s a play to be made on the difference. I’d be really interested to see a chart of Vancouver home prices in USD. Has anyone seen a chart like that before?

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Shut It Down Already

I recall seeing a chart like that. It has homes priced in both USD and Gold/oz.

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Shut It Down Already

Why not just buy an unhedged ETF?

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Doomcouver

I already own some and they’ve done quite well. That was when our dollar was better though so I could buy more shares than I can now. There will come a point where CAD will bottom out so I’m leaving a larger portion of my portfolio in CAD hoping for an upswing in the future. If we hit late-90s levels though I will have wished I converted more now I guess…

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Bear Vancouverite

I would seriously stay away from speculating on forex. Its far too volatile.

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southseacompany

“LEILA FARHA: If housing was a human right, the bubbles would burst”, Globe & Mail

http://www.theglobeandmail.com/opinion/if-housing-was-a-human-right-the-bubbles-would-burst/article34492283/

“Housing is now predominantly valued as a commodity, traded and sold on markets, promoted and invested in as a secure place to park unprecedented amounts of excess capital. The view of housing as a human dwelling, a place to raise families and thrive within a community, has largely been eroded.”

“Leilani Farha is the UN Special Rapporteur on the right to adequate housing.”

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Doomcouver

If politicians really cared about their constituents housing would be for living in first and as an investment second. All governments have been treating it the other way around with no anti-speculation, anti-flipping, or anti-empty homes measures in place for decades as the bubbles grew. We’ve seen these measures starting to be implemented now simply due to voter anger, however it far too late. There will be no preventing the bubble now, it’s just a matter of how big it gets before it pops.

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patriotz

“If politicians really cared about their constituents”

Oh they care all right. At least about 70% of them, which is more than enough to get elected.

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Polozi Scheme

Low interest rates needed to help Canada grow: Bank of Canada’s Poloz
http://ca.reuters.com/article/businessNews/idCAKBN16Z1SX-OCABS

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Doomcouver

This is a BS statement from the BoC. Interest rates have been at rock bottom for the better part of a decade, and the only effects have been Canadian businesses hoarding cash, and massive real estate speculation. Low interest rates have failed to produce the desired effect. These Keynesian central bankers need to get their heads out of their backsides and realize that Keynesian theory is deeply flawed, and by leaving interest rates this low for this long they are causing MASSIVE distortions in other parts of the economy. This is a case of the medicine being way worse than the cure.

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patriotz

I will point out, one more time, that trying to use low interest rates to stimulate the economy is a MONETARIST policy, not a Keynesian policy. The Keynesian approach is to stimulate through fiscal policy. This is not a technicality, the two schools are opposed to each other.

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Doomcouver

You’re actually incorrect. Monetary policy is part of Keynesian economics. Keynesian’s believe in counter-cyclical monetary and fiscal policies. For example, Keynes argued that during the great depression two approaches were needed to stimulate the economy 1. low interest rates, and 2. government spending on infrastructure. Which is exactly what the BoC and the Trudeau liberals are doing right now.

https://en.wikipedia.org/wiki/Keynesian_economics

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southseacompany

There is a difference between ‘monetary policy’ and being a ‘Monetarist’. Keynes advocated ‘discretionary monetary policy’ along with fiscal stimulus. Monetarists don’t favour discretion in monetary policy nor using fiscal stimulus.

In the last few years some economists & governments have started to advocate a Keynesian blend of monetary and fiscal stimulus, after purely Monetarist policies have been criticized as failing.

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Oracle

Finally a post!!

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Doomcouver

This is true, and to elaborate monetarists believe that the economy’s performance is almost completely determined by changes in the money supply. So whether or not central bankers are Keynesians or Monetarists depends on how self-important they think they are. Aka. whether or not they’re a piece of the solution to economic problems, or the whole solution.

I don’t know about other armchair economists on this forum like myself, but personally I think that fiscal and monetary policies tend to have extremely diminishing returns. The first few interest rate drops or stimulus packages have a big impact, but after that it starts to be like trying to push a piece of string and the economy will do what it’s going to do outside of any policy at the government level.

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Newcomer

All he said was that a rate hike would provoke a recession, which is probably true. The thing is that we need a recession. Most of the world needs a recession.

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Doomcouver

Actually that’s not all he said: “It is why the interest rate is quite low now, is to give the economy extra room to grow” . However just because the BoC would like low interest rates to make the economy strong, it’s doing the opposite and making it extremely fragile. The argument that higher rates would cause a recession is a correct one, except not for the reasons the BoC would tell you. The recession will be caused by speculative asset bubbles popping and their associated employment evaporating. These jobs were not sustainable however so staving off the inevitable is a pointless exercize by Mr. Poloz, and it’s making things worse over the long-run.

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Whistler or Bust?

An intelligent poster. A rare find on this blog.

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Confucius

https://www.lewrockwell.com/2017/03/mark-nestmann/stock-real-estate-prices-collapse/

“We all know what happened in the 2007–2008 real estate downturn. Once again, I got caught up in it. I bought an investment condo in Phoenix in 2007. Two years later, it had lost 90% of its value. (No, that’s not a typo.) Fortunately, I didn’t sell then – and as of today, I could sell it for about 80% of what I have in it.

Could stock and real estate prices collapse again? Absolutely. That’s why I think it’s wise to take profits at or near the top of the market”

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Newcomer

“That’s why I think it’s wise to take profits at or near the top of the market.”

Wow, that’s thinking outside the box.

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Doomcouver

Timing the market is almost impossible. However limiting your exposure to assets that are extremely overbought is prudent investing. For some reason Canadians feel totally comfortable with a heavily leveraged, illiquid and fundamentally overpriced asset aka. their home being their only investment. If my stock portfolio crashes through the floor my maximum loss is 100%. For someone who puts 5% down on a condo their maximum loss is 2,000% of their principal (slightly more if you factor in realtor fees/legal fees/condo fees/taxes/etc.) . It’s like house horniness overwhelms the part of the brain that can do math…

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StrataHacker

Thanks Garth,

Now can you please go back to your own blog you fetid old shrivel womber. Your dog awaits its inheritance.

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Shut It Down Already

You think Garth would be toying with the idea of getting a forex account to gamble on the exchange rate? Interesting….

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StrataHacker

Not at all. I was responding to Doomcouver’s post that starts: “Timing the market is almost impossible. However limiting your exposure… blah blah blah”” and ends””It’s like house horniness overwhelms the part of the brain that can do math.”

There are several Turner themes and memes in that post. I personally despise that old cretin and feel sorry for all the lives he has ruined by convincing people not to buy houses lest the market crash any moment now.

Every once in a while he lets their posts through…

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Bear Vancouverite

You despise the concept of not trying to time the market? Its well recognized that timing the market is a fool’s game.

Look for value and stay away from things you worry are overpriced. Applies equally to stocks, housing, and buying just about anything.

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Doomcouver

Hey StrataHacker I’ve got some 2007 swampland in Florida I’d like to sell you. Buy now or be priced out forever.

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Doomcouver

If I was Garth I wouldn’t be able to acknowledge that Chinese money is a major part of the affordability crisis. I’d have to kick myself off my own blog. haha

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Doomcouver

Don’t think this has been posted yet:
http://www.cbc.ca/beta/news/business/cibc-outsourcing-jobs-india-1.4045759

Unbelievable how the government lets in 300k+ immigrants per year, allows massive speculation in our housing market to price out everyone but the rich, while our jobs are getting hollowed out by globalization. Canada needs a populist uprising really badly. Just watch what happens when we get saddled with the largest credit crash in Canada’s history. Massive riots probably.

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Newcomer

Of course, it hasn’t been posted. It’s got diddly squat to do with real estate.

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Oracle

If it weren’t for immigration, real estate would crash by 75%. Chinese-Canadians continue to flock to Vancouver via immigration and that is contributing to high prices.

But you already know that.

You haven’t answered my question; Do your parents have PR or not?

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Shut It Down Already

The overwhelming majority of buyers are local. How many times must this be pointed out to you?

#giveusthedata #sowecanignoreit

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Doomcouver

The fact is the % of foreign buyers is a moot point. How much of the cash used is local is a much more important figure. Nobody seems to care about measuring that though.

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Shut It Down Already

Perhaps because it’s virtually impossible to measure? But if you want to pretend that locals are the ones injecting fresh foreign money to the market (if it were the foreigners themselves it’d show up in the FBT stats) then be my guest. Or, I suppose, you can buy into one of Oracle’s weird theories (like the one that requires a seller to trust a total stranger in a distant country whilst risking a criminal record so that they might gain $0) Everybody in this town is hot for real estate, because it’s a great way to get rich and retire early. After all, it does nothing but go up! Buy as many as you can, and then sell to a dumb rich foreigner because there’s an unlimited supply of those. Don’t worry about your RRSP, you can just cash in… Read more »

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Newcomer

We have a pretty good measure of how much of it is local, by looking at total mortgages issued. I can’t remember the stat, but it lines up pretty well (can someone remember where that came from?). So if the buyers are local and the mortgages they are buying with are local we have a pretty good idea of what is going on.

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Doomcouver

Diddly squat? So if all our jobs get outsourced how are we going to make mortgage payments? Hollowing out of the working class seems painfully tied to the real estate conversation to me.

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Newcomer

It’s pretty tenuous. People who work in call centers do not buy real estate in Vancouver. And if you take that attitude, everything is tied to real estate. What would a new dog leash by-law do to prices? Will Justin Bieber’s loss of popularity damp the enthusiasm of Amerian condo investors?

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Doomcouver

Nice straw-man arguments you built for yourself there. Pretty sure lots of people who work in call centers buy real estate. The recent obvious example was the 1% discount Telus employees were getting to buy into Telus tower: http://globalnews.ca/news/2823397/vancouver-pre-sale-condo-market-impossible-says-vancouver-realtor/ .

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Newcomer

Do you know what “straw man” means, or are you just trying out a term you heard somewhere?

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best place on earth

thought of an arm-chaired economist.

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Shut It Down Already

Because Trump is working out so well? What a joke.

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fomostyle

Doubt it. It’s Canada. We will just lie down and take it.

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bullwhip29

Three transit-oriented communities in Metro rival Coal Harbour for empty or underused housing
http://vancouversun.com/business/local-business/three-transit-oriented-communities-in-metro-rival-coal-harbour-for-empty-or-underused-housing

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Vancouver Review

Mar 30, 2017 Daily Review Vancouver Real Estate Housing Bubble News

https://youtu.be/6ITgyOvrcok

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Bestplaceonearth

What is going on with the sales! No crash, eh bear.

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Newcomer

What’s gong on with your English? Did you know that the government offers free classes?

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best place on earth

did you know that freeloaders also get rental assistance from the bc government? get in line!

by the way, if you english is so good, i think you meant “going” not “gong”.

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Sebastien

Not a crash, but we might be in the beginning of a perma-melt.

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Doomcouver

Interest rates are still at rock bottom prices. Don’t expect a meaningful correction until they normalize.

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Bear Vancouverite

If that’s the case it might be 5-10 more years before the start of normalization since the Fed projects it might bring rates to only 2.25% by 2020. I assume by normalize you mean 4% or greater.

https://www.thebalance.com/fed-funds-rate-history-highs-lows-3306135

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Ulsterman

Boy there are some furious comments on the Global TV website about the article.

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Sebastien

That’s the definition of a bubble. Everybody involved is very emotional. The opposite would have surprised me.

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paulb

New
148
Price Change
39
Sold
134

TI:8205

http://www.clivestevepaul.com

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Shut It Down Already

Friday April 1st 2016:

New
242
Sold
155

TI:8065

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Burnaby

Link doesn’t work. Garth wants the traffic.

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Newcomer

Here’s another one of the same thing:
http://vancouver.ca/files/cov/empty-home-tax-timeline-english.pdf

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Best place on meth

Do you have a link in mandarin?

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Doomcouver

I think they’re going to have to financially nail a few cheaters to the wall before the honors system will work. Home owners have to be petrified about getting caught or everyone will claim their home is occupied even though it’s not. Still, if it’s at all enforced this is a great tax for locals looking to live in Vancouver.

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Newcomer

It’s not an honor system. A declaration has to be filed for every property — no declaration, you pay the tax. Lie on the declaration, you pay a penalty of ten thousand dollars a day.

http://vancouver.ca/home-property-development/empty-homes-enforcement-penalties.aspx

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Doomcouver

I see what you’re saying, but if the city isn’t fact-checking all of the declarations then it is essentially on the honors system. Even if they audited 5% of the homes (I’m sure it will be less than that) it would still be on the honors system for the other 95%. Plenty of people already lie on their taxes and claim principal residence on more than one property, what’s stopping them from saying the property is occupied when it’s not? If I was a homeowner and wanted to leave a place empty I would be tempted to lie. The number of bylaw officers in Vancouver is painfully low from what I have heard. The chance of getting caught is likely fairly low. We really needed cooperation from the utilities to be able to better determine which properties are empty. Sure… Read more »

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Newcomer

That’s a bit like saying that drug trafficking laws, or parking meters are enforced by an honor system. If fact, I cannot think of any law that would not be covered by that definition of an honor system. Can you give an example?

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Combat roach

This is a joke compared to BC gang and the boss.

Former Montreal mayor Michael Applebaum sentenced to one year in prison for corruption

http://news.nationalpost.com/news/world/former-montreal-mayor-michael-applebaum-sentenced-to-one-year-in-prison-for-corruption

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Best place on meth

“Applebaum was found guilty of pocketing about $37,000 in kickbacks from developers and engineering firms through his former aide.”

Krusty took 50K a year from the same types but called it a salary top up.

Applebaum is an amateur, he should have smirked instead of promising to be a better person once released – dude wouldn’t last 10 minutes in the BC Liberal party.

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Just me

One has to feel sorry for Applebaum: such a ridiculous amount of money that any self-respecting BC Lib would probably pity him for getting by on such “salary”.

Christy Clark made the bribes legal, and she even gets aggressive when someone mentions how inappropriate that is. I guess living in Vancouver has become so costly that our poor politicians have to make ens meet in some way.

If BC voters don’t see through her scam this round, there is no hope for this province.

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UBC in Crisis Mode

What gives? If you cannot sell it , increase the price?

4682 W 6th Avenue, Vancouver

Feb 9:$3,199,999
Mar 20: $3,394,999
Change: 195000.00 6%

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Combat roach

Sure, at least there are no fu.king 8s.

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Sebastien

This is a classic move by realtors to trigger a bidding war. I’ll follow that listing to see what happens.

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patriotz

Toronto Mayor Tory open to vacant house tax on speculators

As in Vancouver, this would need the approval of the provincial government. Both Toronto and Ontario have elections in 2018.

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Doomcouver

They need buy in to get data from Toronto Hydro or any tax will likely be mostly ineffective. The incentive to lie is huge.

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