Friday Free-for-all! May 12th 2017

It’s the end of another week in luxury land and that means it’s time for another Friday Free-for-all! This is our regularly scheduled 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:

Six Canadian banks cut by Moodys on debt
Strata must pay 554k to replace tree
Always a good time to buy
Home Capitol to sell $1.5b mortgages
Best option to move across the water?
We need this graph

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

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[…] Bullwhip29 pointed out this article in the financial post where Bank of Canada governor Stephen Poloz says that the troubles at Home Capital are ‘idiosyncratic‘ and contained: […]

Abdul Lahazi
Abdul Lahazi
3 years ago

More home owner’s problems:

https://app.tmxmoney.com/news/cpnews/article?locale=EN&newsid=a42854&mobile=false

“I felt like, what did I do wrong? I did everything right. Why is this happening to me and my daughters?” said Randy Belair, a Willington resident who discovered pyrrhotite in the foundation of an addition he had built on his house.

Shut It Down Already
Shut It Down Already
3 years ago
Reply to  Abdul Lahazi

Scraping the barrel?

bullwhip29
bullwhip29
3 years ago
bullwhip29
bullwhip29
3 years ago

Home Capital’s ‘idiosyncratic’ troubles are contained
http://business.financialpost.com/news/economy/home-capitals-idiosyncratic-troubles-are-contained-but-hot-housing-remains-primary-concern-stephen-poloz

>>> we should all be worried when high powered bankers and govt officials step up to the plate and tell us bold faced lies

bullwhip29
bullwhip29
3 years ago
Reply to  bullwhip29

and to those that insist this sounds and looks nothing like what the US went through should watch this again…
https://www.youtube.com/watch?v=INmqvibv4UU

bullwhip29
bullwhip29
3 years ago
Reply to  bullwhip29

and to those that insist this sounds and looks nothing like what the US went through should watch this again…

http://tinyurl.com/lg2bay2

southseacompany
southseacompany
3 years ago

“Canadian home sales cool in April; new listings spike”, Globe & Mail

http://www.theglobeandmail.com/real-estate/the-market/canadian-home-sales-cool-gta-leads-decline/article34986046/

“Resales of Canadian homes fell 1.7 per cent in April from record highs in March as new listings spiked”

“actual sales, not seasonally adjusted, were down 7.5 per cent from April 2016”

Vancouver Review
Vancouver Review
3 years ago

May 14th, 2017 Daily Review Vancouver Real Estate Housing Bubble News

https://youtu.be/r2X0Mhw7wOA

Ulsterman
3 years ago

“Often, when you have a truly unsustainable housing market, you will see very rapid price increases (and) very rapid credit growth,” Poloz said. “But we don’t see that in the credit side, so I do think a significant amount of this that is fundamental, but layered on top, is a speculative element.”

Fundamental? I guess incomes in Toronto must be rising at 30-50%+ per year to fundamentally support the incredible rise in home prices. Boy, the people must be ecstatic there to be living in such times…..

http://ca.reuters.com/article/businessNews/idCAKCN18B041-OCABS?pageNumber=1&virtualBrandChannel=0

Burnaby
Burnaby
3 years ago
Reply to  Ulsterman

I am almost embarrassed for Poloz (almost).

Confucius
Confucius
3 years ago
Reply to  Ulsterman

Often, when you have a truly unsustainable housing market, your central bank will tell you there’s nothing to worry about.

Burnaby Bear
Burnaby Bear
3 years ago
Reply to  Ulsterman

From the paragraph prior to your quote:

“…recent house price increases were not sustainable…some speculation appeared to be at play in the market…that did not mean a major price correction was in store.”

So he agrees that there is speculation in the market, the current prices are not sustainable but there won’t be major price correction! So only part of the 30% to 50% increase in GTA prices is speculative, the rest is based on solid fundamentals!

I’m not embarrassed for Poloz, I’m embarrassed for the BOC and for the country having a moron like this running our central bank!

Abdul Lahazi
Abdul Lahazi
3 years ago
Reply to  Ulsterman

With the people in charge just as deluded as the masses, it is no wonder this bubble has gotten so out of hand.

Abdul Lahazi
Abdul Lahazi
3 years ago

Christy’s free money handouts have goosed the condo market:

http://www.cbc.ca/news/canada/british-columbia/vancouver-condo-market-high-1.4111631

Tom Davidoff, an associate professor of urban economics at the University of British Columbia, said just as the housing market was starting to cool off, the introduction of the home-buyers program — which helps first-time home buyers with a loan of up to 5 per cent of the purchase price — propped up the market and helped drive up prices.
“It’s hard for me to believe that that program has not had any impact on prices,” Davidoff said.

Shut It Down Already
Shut It Down Already
3 years ago
Reply to  Abdul Lahazi

You didn’t even quote the meat:

“According to the Ministry Responsible for Housing, 1,288 applications for the first-time home buyers program have been approved as of May 11, with 20.5 per cent of them approved for Metro Vancouver properties. “

Abdul Lahazi
Abdul Lahazi
3 years ago

Back when Vancouver was a working man’s city and not a playground for the rich:
http://www.cbc.ca/news/canada/british-columbia/greg-girard-vancouver-photographs-1.4114262

BubbleTea
BubbleTea
3 years ago

Quote of the Day “My advice for people looking to buy Van real estate … you have a better chance of getting a pre sale if you fly to HK and book your home there”

BubbleTea
BubbleTea
3 years ago

‘Corrupt Elite’ Laundering Money In Canadian Housing: Report
One glaring problem is a lack of rules requiring that the actual owner (or “beneficial owner”) of a property be identified. In Canada “there are no requirements for any person involved in real estate closings to identify the beneficial owner,” the TI report stated.
http://www.huffingtonpost.ca/2017/03/31/money-laundering-real-estate-transparency-international_n_15725728.html?ncid=engmodushpmg00000004

kabloona
kabloona
3 years ago

You can read the bulk of the Globe and Mail article here at Z-H: http://www.zerohedge.com/news/2017-05-13/canada-hasnt-seen-bank-run-such-decades-finance-minister-wont-rule-out-home-capital- “….Canada hasn’t seen a run on a bank such as this in decades, and many in the current crop of regulators have no personal experience dealing with the sort of crisis that unfolded in late April at Canada’s largest alternative mortgage lender. A source said regulators began co-ordinating discussions “early on” in the crisis, before Home Capital was front page news, but no one anticipated the company was so vulnerable. Last summer, OSFI had no concerns with the company’s capital levels, liquidity or stress test results, according to another person familiar with the matter. But as the week of April 24 progressed, regulators grew worried they may not be able to halt the company’s slide. At one meeting involving officials from OSFI, CDIC and the… Read more »

history
history
3 years ago
Reply to  kabloona

hey, all i said was Boileroomand someone else said Bucketshop. But the real zinger is HCG pandered to the naive immigrant flush with speculation excitement. Now they are debt slaves and will find it difficult to grow their broods, which is the real purpose behind Bringing Monetary Reserves forward.

ostritch
ostritch
3 years ago
Reply to  history

What? Can you make a point that’s less cryptic?

history
history
3 years ago
Reply to  ostritch

Same basic tactic as the credit card for people who dont need it. Students, for instance. Debt is most effective reducing human reproduction rates. New immigrants in Canada are high breeders. The housing bubble has done wonders for putting new Canadians in chains. Costs $150,000 to 200,000 to raise a kid in Canada. And you cant get out of your pickle with bankruptcy either. Insolvency rates set to explode in Toronto. What happens then? Immigrants cant flee, banking tracks you globally.

Just me
Just me
3 years ago

By the way, they are back in full swing. West side market on fire again.
Unless local governments start to actively reject foreign money in RE markets, Vancouver will never again be a livable city.

bestplaceonearth
bestplaceonearth
3 years ago
Reply to  Just me

it’s always a livable city for most; and not for the entitlement elites.

Just me
Just me
3 years ago

Livable for homeowners with small mortgages you mean?
Everyone else I know is struggling, including professionals.

Shut It Down Already
Shut It Down Already
3 years ago
Reply to  Just me

If they’re struggling with big mortgages then maybe they shouldn’t have bought in the first place and just maybe they were instrumental in driving prices higher.

Just me
Just me
3 years ago

Agreed.
But the valuations I am talking about are 1.5 mil or so. 3 millions and above is mostly chinese money.

patriotz
3 years ago
Reply to  Just me

“Unless local governments start to actively reject foreign money in RE markets”

Local governments have no power to do this, indeed they do not process property transfers in the first place.

You know who does.

Just me
Just me
3 years ago

http://moneyweek.com/the-crackdown-on-chinas-billionaires/

The crackdown on China’s billionaires

Confucius
Confucius
3 years ago

A cautionary tale.

https://www.forbes.com/sites/johnfvail/2017/05/12/what-was-japans-bubble-like-in-1989/#53da449ff70e

“global investors should always be wary of excessive market confidence when huge deviations from norms are considered acceptable just because they have lasted for a few years.”

UBC in Crisis Mode
UBC in Crisis Mode
3 years ago

Did someone say Xi Jinping stopped the outflow of Chinese money? Wrong:

Van West sales (all $3 million +)
Jan. 2017: 59
Feb. 2017: 90
Ma. 2017: 97
Apr. 2017: 123

Oracle
Oracle
3 years ago

criminal by our gov to allow this to continue.

Oracle
Oracle
3 years ago
Reply to  Oracle

It’s local PR HAM that are buying multiple homes too.

Oh NO
Oh NO
3 years ago

Cant help but notice, the majority of new Vancouver detached are 3-10m range, ie smart money rushing to exit?

history
history
3 years ago
Reply to  Oh NO

ive mentioned in previous posts that this price range of housing represents the margin in the total market. He who controls the margin, controls the market. Up or down.

Shut It Down Already
Shut It Down Already
3 years ago
Reply to  history

The margin is the low end.

history
history
3 years ago

the margin is houses above 3 million. I said it a few months ago. A concerted effort was made to control this relatively small (thus the word Margin) inventory. And now we are seeing that i am right, yet again. Prices will come down aross the middle. A controlled deflation, is my guess

Vancouver Review
Vancouver Review
3 years ago

May 13th 2017 Daily Review Vancouver Real Estate Housing Bubble News

https://youtu.be/bkG3w7mCQOM

Bestplaceonearth
Bestplaceonearth
3 years ago

Too much rubbish.

southseacompany
southseacompany
3 years ago

“Mayday at Home Capital”, Globe & Mail

http://www.theglobeandmail.com/report-on-business/home-capital-saga-real-estate/article34972594/

“In the early hours of Monday, May 1, exhausted representatives for Home Capital and a group of lenders hung up the phone in frustration. A deal to give the company an emergency $2-billion loan appeared to be falling apart. Directors at the mortgage firm felt that without the money, they wouldn’t be able to open for business a few hours later.”

“The dramatic story of a financial institution’s near-collapse.”

history
history
3 years ago

boilerooms thrive on drama….. and telephones

kabloona
kabloona
3 years ago

On the website, it states HCG was mere hours from collapse…. eek!

Cohodes sure called it…..whereas the stock touts on BNN regularly defended and promoted HCG as a great Canadian success story…(ha-ha!)

Very successful at getting people without any money to purchase overpriced houses, I suppose….

😉

southseacompany
southseacompany
3 years ago

“Supply scarce for condos as prices climb in Metro Vancouver”, CBC

http://www.cbc.ca/news/canada/british-columbia/vancouver-condo-market-high-1.4111631

“Experts blame the higher condo prices on a lack of new housing projects and government incentives such as the B.C. Home Owner Mortgage and Equity Partnership Program, which is aimed at helping first-time home buyers and has added new buyers to an already overheated market.”

“Tom Davidoff, an associate professor of urban economics at the University of British Columbia, said just as the housing market was starting to cool off, the introduction of the home-buyers program — which helps first-time home buyers with a loan of up to 5 per cent of the purchase price — propped up the market and helped drive up prices.”

history
history
3 years ago

Stopped reading at Experts.

southseacompany
southseacompany
3 years ago

“Mark Carney warns Bank of England interest rates set to RISE sooner than expected”, Express

http://www.express.co.uk/finance/city/803213/mark-carney-interest-rates-latest-update-news-economy-negative-savings-inflation

“MARK Carney warned Britons could see interest rates rise sooner than expected, as one of the Bank of England’s key policymakers again called for an immediate hike.”

Londonernow
Londonernow
3 years ago

Mark Carney is the dog that only barks. He will never raise rates as he’s first and foremost a politician. He will only raise rates if he’s forced to by the market, and that’s close to or possibly after he’s lost control, or once they replace him with a central banker who has such a mandate.
Carney’s plan was to be back in Canada by now as leader of the Liberals but the Trudeau win put paid to that.

history
history
3 years ago
Reply to  Londonernow

Was it Dave that said banks must consider raising rates, because they arent making the money on loan volume? or something like that? I know personally, as a non debt person, with a burgeoning savings account, banks will need to entice me with higher interest rates, or I take my Wage money elsewhere. It’s just business.

Londonernow
Londonernow
3 years ago
Reply to  history

Banks don’t actually need your deposits to lend money. The money they lend is created out of thin air. All they need is the minimum amount of risk capital to hold against your loan. For mortgage loans its next to nothing really.
Normally the banks pay for deposits as a cheap source of funding and to match their loan book assets but they know the Central Banks have got their backs more than ever so they actually don’t give a sh&%.

patriotz
3 years ago
Reply to  Londonernow

“Banks don’t actually need your deposits to lend money.”

Nonsense. If they didn’t need deposits, Home Capital wouldn’t be in trouble, right?

“Normally the banks pay for deposits as a cheap source of funding and to match their loan book assets”

Because they have to.

Londonernow
Londonernow
3 years ago
Reply to  patriotz

You’re actually showing your stupidity if you think banks need your deposits to create credit.
And as for Home Capital, it ain’t a bank.

YVR
YVR
3 years ago
Reply to  Londonernow

“And as for Home Capital, it ain’t a bank.”

Home Capital Group is “Home Bank” and is CDIC insured.

Londonernow
Londonernow
3 years ago
Reply to  YVR

Home Bank was formerly CFF Bank and bought by Home Capital (again not a bank) only last year. Home Bank is a minuscule subsidiary of Home Capital (again to reiterate which is not a bank).

YVR
YVR
3 years ago
Reply to  Londonernow

“Home Bank is a minuscule subsidiary of Home Capital”

So why don’t they just magically create the deposits through Home Bank?

Londonernow
Londonernow
3 years ago
Reply to  YVR

“magically create”? Seriously? Did you read the articles posted? Remaining ignorant isn’t winning an argument.

Bestplaceonearth
Bestplaceonearth
3 years ago
Reply to  Londonernow

Wow, brilliant post. Go back to take econ 101 before posting.

Londonernow
Londonernow
3 years ago

Hey BPOE, please educate yourself before you post. If you had dumb or biased professors it’s still your fault for not finding out how things really work.

Dave
3 years ago
Reply to  history

No, I wouldn’t have said that. Rates are just a reflection of supply and demand of capital.

history
history
3 years ago
Reply to  Dave

Demand for money must be pretty anaemic, given the low rate in family formation….. and supply is high, given money Reserves brought forward.

Could the asset clustrrfck be caused by the great bubble of boomers and their speculation habits? Should I refinance and punt the stockmarket?

Dave
3 years ago
Reply to  history

Demand for debt in Canada has never been higher. Have a look at consumer debt to GDP. Low interest rates have encouraged greater borrowing because it’s easier to service that debt. I personally think stocks are a better place to be for the next 10 years compared to real estate in Canada.

Dave
3 years ago
Reply to  Dave

And by stocks, I don’t mean the TSX, I mean the US.

Look at the big picture from a macro point of view… Canada is still a commodity based economy. There is a surplus of commodity production in the World. That environment favours consumer and manufacturing economies like the US and China. The only thing keeping us going here in BC is the recycling of profits from China into our real estate. I’m not sure how that ultimately unwinds.

Oracle
Oracle
3 years ago

You believe what you post Southsea?

That’s BS. He will never raise rates. He is all hot air. Look at his record. Let’s stop posting this propaganda.

ostritch
ostritch
3 years ago

OMG. This guy is a one trick pony. He ALWAYS says that.

paulb
paulb
3 years ago

New
173
Price Change
40
Sold
145

TI:8597

Just listed! 1225 Elmwood Drive, North Vancouver http://www.clivestevepaul.com/Properties.php/Details/348#viewdetail
We list and sell a lot of real estate on the North Shore & Vancouver. I’ve always appreciated the support of the VCI community. If you know of anyone thinking of buying or selling don’t forget us! TY Paul http://www.clivestevepaul.com

history
history
3 years ago
Reply to  patriotz

RE for Baby Bust generation is a Modern day chastity belt

notice i dont say Milennials? one reason is that idont know how to spell it, the other more important reason is that there are two peaks and three troughs in this generation. Not very good for analysis, but real good for the Deep State 5th coloumists to confuse the sheep. You know this because the same group calls those born after 911 as the Homeland generation… harhar… which homeland?

Oracle
Oracle
3 years ago

BC Elections now saying it found 3000 misplaced absentee ballots.

Heads got to roll and massive protests must take place. This is voter fraud on a massive scale.

Today they have 179,000 ballots. before they had 176,000

Dave
3 years ago
Reply to  Oracle

I wonder how secure those ballots are. What would happen if somebody tried to steal them or burned down whatever building they are in? That would make for a hell of a story.

Reasonfirst
Reasonfirst
3 years ago
Reply to  Dave

They are all at their separate electoral district offices. If anything happened (like a fire) before they were counted, it would be to one ED only and could result in a re-run of the electoral district vote only.

bullwhip29
bullwhip29
3 years ago
Reply to  Oracle

link?