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Friday Free-for-all! July 7th 2017

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It’s the end of another summer week in the city 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, here are a few recent links to kick off the chat:

–Condo flipping accelerating
–Rate hike looms with record debt
–Cracks in Green / NDP alliance?
–Everybody worried about house prices
–

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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Abdul Lahazi

3 reasons the interest rate hike is good for the Trudeau Liberals:
http://www.cbc.ca/news/politics/bank-of-canada-interest-rates-economy-liberals-1.4201888?cmp=rss

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Priced Out

Chinese authorities trying to do more to cool their markets than we are.
No wonder there Is spillover.

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Shut It Down Already

Lower prices make things better for buyers, not worse as you imply.

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bullwhip29

Vancouver’s Grouse Mountain Resorts expected to be sold to Chinese investor with state ties
Steven Chase, Andrew Willis and Gary Mason
The Globe and Mail
Published Wednesday, Jul. 12, 2017 10:00PM EDT
Last updated Wednesday, Jul. 12, 2017 10:02PM EDT

Vancouver’s landmark Grouse Mountain Resorts is expected to be sold as early as next week to a Shanghai-based investor, the latest in a series of Canadian commercial property acquisitions by Chinese entities.

China Minsheng Investment Group (CMIG), the country’s largest privately owned investment manager, is expected to pay approximately $200-million for Grouse Mountain, which is owned by the McLaughlin family, according to sources familiar with the transaction.

https://www.theglobeandmail.com/report-on-business/grouse-mountain-resorts-china-government-takeover/article35676501

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southseacompany

“Interest-rate hike a double-edged sword for Vancouver housing: economists”, Metro News

http://www.metronews.ca/news/vancouver/2017/07/12/interest-rate-hike-and-vancouver-housing-say-ubc-economists.html

“The 0.25 per cent bump could hurt people whose finances are stretched thin but it will also cool housing market, says UBC professors’

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southseacompany

“The people who will benefit are those who have a nest egg and have been waiting for the right time to buy a home, (UBC prof Tom Davidoff) said.”

““The real winner here is somebody sitting on a $800,000 down payment who says I’m going to wait for prices to fall.””

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Shut It Down Already

Haha, $800K is now just a downpayment?

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Abdul Lahazi

So where do we stand today after a rate hike?
Overnight rate up 1/4%
Bond yields up.
Fixed mtg rates up.
CDN dollar up a full cent.
15% HAM tax in effect.
HAM all but gone.
New BC Gov’t about to take over.
R/E sales down.
R/E prices declining.
More interest rate increases coming.
Tighter mortgage qualifying rules to take effect soon.
Political unrest with China and North Korea (NK / China will be a BIG problem very soon.)

The perfect storm.
All in all it is not looking rosy for YVR real estate.

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Dave

One thing is certain, we will know in due time. Nobody I know in the real estate industry is concerned and that’s a group with an informed opinion. I’ll go against the grain though and say that those with the most to lose see things with the least amount of clarity. That’s the common theme in all bubbles even when what is obvious in hindsight stares you right in the face.

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Diadora

Also don’t forget China’s credit, housing bubbles blowing up soon. A death blow for Vancouver RE.

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Owen

I’m not so sure how much of that is really true or relevant. The OSFI regulations combined with a wave of supply and a sprinkling of higher rates could certainly bring down prices. However, the metro’s population is still growing at roughly the same clip and I’m not sure that there will continue to be so many housing starts; in fact, you’d think that with 40,000 units already under construction, it will become hard to find anyone to do the constructing, if nothing else. I’m also quite skeptical the hikes will actually continue given that oil isn’t expected to rebound anytime soon. I think provincial politics are still the biggest wildcard; we could see another new government take over within the time it takes for the bubble to really pop. The perfect storm scenario is certainly a possibility but I… Read more »

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Dave

I agree with you on oil. It’s not going above 60 anytime soon.

I don’t think the Bank of Canada can be too detached from US interest rates though. If their economy grows at a fast clip, I don’t think we’ll be spared higher borrowing costs.

I also agree with you on supply and demand of real estate. We’re not about to get a flood of new condos relative to population growth. So unless we get a major economic downturn, I don’t see a scenario where listings go through the roof.

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Owen

I think oil is key because if it’s low and BoC is still hiking rates, it most likely means the BC economy is doing relatively well. OTOH, if oil is high, BoC will hike rates even if BC economy is not great. High oil would also raise CAD:USD, reducing foreign capital. As far as supply, starts ARE way up right now, I’m just skeptical that the city or developers will keep that going or will be able to turn them into completions. If you look at prior spikes in the 12-month moving averages, completions usually spike about 15 months after starts. We’re halfway there and it doesn’t look like it’s going to happen, and the rate of starts is down from 2016 despite higher prices. Then again, the more workers that get into home building, the more momentum there is… Read more »

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paulb

New
288
Price Change
81
Sold
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TI:9702

http://www.clivestevepaul.com

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Abdul Lahazi

Surrey woman now facing numerous charges in flagger hit and run:

http://globalnews.ca/news/3593315/surrey-woman-facing-numerous-charges-in-flagger-hit-and-run/

Brenda Ouma Argay has been charged with two counts of assault with a weapon, two counts of dangerous operation of a motor vehicle, two counts of fail to stop at scene of accident, and two counts of assault.

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Bear Vancouverite

Argay is an Anglo Saxon last name of Norse origins, in other words, likely a Caucasian driver.

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Dave

I hope they send her back to Norway along with all those Viking dorks buying up our real estate.

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Abdul Lahazi

RBS agrees to £3.65bn settlement over risky mortgages in US:

http://www.bbc.com/news/business-40584399

They are still cleaning up after almost a decade.

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Combat roach

Mortgages won’t be only problem for many Canadians as rates rise

http://www.cbc.ca/news/business/interest-rates-helocs-canada-debt-1.4192847

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Bear Vancouverite

Indians are South Asians, so HAM covers them already. Orientals might be the group you were thinking of, but HOM doesn’t sound as sexy as HAM.

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Hyper-mega-Bull

no one in this country calls indians asians.

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Hyper-mega-Bull

China Dispatches Troops To Djibouti To Set Up Its First Overseas Base

http://www.npr.org/sections/thetwo-way/2017/07/12/536824843/china-dispatches-troops-to-djibouti-to-set-up-its-first-overseas-base

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history

lets hope they find it. The first time the Germans dispatched troops to Afghanistan, they didnt know how to get there.

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southseacompany

“RBC, TD, BMO increase prime rates after Bank of Canada’s interest rate hike”, CBC

http://www.cbc.ca/news/business/prime-interest-rate-increases-1.4201403

“Canada’s major financial institutions began increasing their prime interest rates on Wednesday, shortly after the Bank of Canada increased its key interest rate for the first time in seven years.”

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southseacompany

“Big drop in mortgage apps as interest rates rise”, CNBC video

http://www.cnbc.com/video/2017/07/12/big-drop-in-mortgage-apps-as-interest-rates-rise.html

“CNBC’s Diana Olick, sifts through the numbers to get a read on mortgage applications as demand tumbles amid higher rates.”

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southseacompany

“Federal Reserve’s Janet Yellen tells Congress to expect more rate hikes”, CBC

http://www.cbc.ca/news/business/federal-reserve-janet-yellen-congress-1.4200850

“Federal Reserve chair Janet Yellen told Congress on Wednesday that the central bank expects to keep raising a key interest rate at a gradual pace and also plans to start trimming its massive bond holdings this year.’

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southseacompany

“Why a Bank of Canada rate hike today would be felt around the world”, Financial Post

http://business.financialpost.com/news/economy/your-guide-to-the-bank-of-canadas-bellwether-rate-decision/wcm/ace08235-acab-4d52-8fcc-8bd02471d69b

“The first hike in 7 years would mean a lot more than just higher rates for Canadians; it could trigger a tightening cycle in central banks around the globe”

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bullwhip29

a couple cents higher and the lineups at the US border (in cda’s 3 largest metro areas) will begin to back up once again and Cdn shoppers riddled with cabin fever will be back spending their cash at US outlet malls and making weekly pickups at the post office to pickup their parcels from amazon. add to this that cost of trip TO canada (not to mention real estate) just suddenly jumped by 10% . also factoring the severity of the wildfire situation here and a drop off in tourism business next season, things wont be looking so rosy for whoever is running the show in victoria

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Yikes

Up she goes 1/4 point another one coming this fall despite what Poloz says or Yellen will yell at him louder

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Kim

This will be death by a thousand paper cuts.

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Dave

Could be.

I think the next five to ten years in Canada is a story of people getting squeezed more and more.

The cost of money is up, taxes have gone up (Federal and Provincial), our purchasing power (the dollar) has gone down and debt is up all over (consumer and government).

If the US economy takes off, that’s going to put further pressure on interest rates in Canada.

It’s not hard for me to imagine a decade of stagnant real estate. It’s happened before and the ingredients are in place for that to happen again.

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bullwhip29

over the next 5 to 10 yrs we will see wealth disparity between the have’s and have nots increase even more.

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Kim

As a “have” I contemplated upgrading to a 3m dollar home in the spring. Decided against it. Too risky. Stocks are my friend.

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Shut It Down Already

Agreed. Stock valuations are rich, but earnings are on the up and there’s an entire demographic which hasn’t really entered the market yet (millennials, and others who want to “occupy” things).

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YVR

I think the next five to ten years in Canada is a story of people getting squeezed more and more.

Yup, people will look back at the last 10 years as the good times.

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Dave

We’re still 1/4 below from where we should have been two years ago. I think this is a positive development though because the bank is now moving beyond targeting inflation. They are also concerned about broader issues like housing bubbles. They didn’t quite come out and say that but the fact that we have low inflation right now plus lower projected growth rates says all you need to know. I’m of the belief that Vancouver gets a once a decade housing correction. Did we get it last Summer with the foreign buyer tax, or was that a prelude? I think the market right now is underestimating the headwinds coming our way. A change in our Provincial government and a central bank concerned about housing bubbles, doesn’t bode well for the market. That said, we still have a supply problem with… Read more »

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bullwhip29

the cdn housing market is too big to fail. without a token increase or two in rates, they won’t have any room whatsoever to manoeuvre when the SHTF nor will they have any success getting the public on board with yet another stimulus package. i suspect much of what is going on will be short term only in duration unless of course their gameplan is to wipeout the cdn economy from coast to coast. the funny thing is that should homeowners feel a bit of a pinch in the short run, i suspect the provinces will adopt measures to counter act what the boys and girls in ottawa are doing making the whole exercise pointless

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Dave

We saw the BC Liberals do that immediately after CMHC started to tighten lending requirements. But there is only so much they can do to pump prices in a rising interest rate environment. More foreign money is probably the only tool that can have such an impact. Interest rates and asset prices are not an easy thing to manage. The bank obviously wants to have a soft landing, but that often doesn’t play out in the real world. If this is a bubble, which I think it partly is, then when you take away the koolaid, you’ll get a correction. For the sake of speculation, I think a return to where interest rates should be should take away 1/4 to 1/2 the gains we made in the last two years. Let’s say we had 40% gains. I’ll go with a… Read more »

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bullwhip29

with the various loopholes still at their disposal, HAM will keep a bid under this market. those that cant afford a couple hundred dollar bump in costs shouldn’t have gotten involved in the first place.

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Shut It Down Already

“Shouldn’t have gotten involved in the first place”.

That’s exactly how these things are caused and, unsuprisingly, exactly why they unwind.

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Owen

A 20% correction after a 40% gain is 70% of the gain.

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Dave

I’m just guessing of course, but I could see the market giving back half the gains after we get the next increase.

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YVR

“the cdn housing market is too big to fail. ”

Can you point to a bubble in history that was ‘too big to fail’ which a government was able to keep propped up avoiding a bust? Nope, because it has never happened. A bubble will always pop no matter what governments do.

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Owen

I think your logic begs the question. We only call it a bubble afterward because it popped; if government kept it inflated it would today just be considered a really good investment that eventually plateaued.

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Shut It Down Already

The US market was bigger, but that wasn’t too big to fail. Despite government intervention it still cratered.

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YVR

“considered a really good investment that eventually plateaued”

Once it plateaus that really good investment turns into a really bad investment which in turn makes people avoid/sell it causing the crash.

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history

English landowning class was able to keep the price of grain high after the 1800-1815 European wars.

Prices can stay high or low, whatever the intent, if you monopolize production.

Venezuela is another good example of price distortion with fuel. Look at that country now.

So once it swings too far one way, the pendulem takes it back hard the other way.

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patriotz

“the cdn housing market is too big to fail.”

For starters, there is no CDN market just local markets. The expensive ones are Vancouver, Toronto, and Calgary and the latter is already falling. All have seen crashes before and will see crashes again if similar factors occur.

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bullwhip29

vancouver punts new proposed airbnb regulations down the road; will revisit subject later in year

>>> link to follow

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Hyper-mega-Bull

China’s Intelligence Networks in United States Include 25,000 Spies

http://freebeacon.com/national-security/chinas-spy-network-united-states-includes-25000-intelligence-officers/

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Abdul Lahazi

One neighborhood in California of 14 houses owned by Wang or his relatives has been fitted with special underground silos that are used to store jewelry and documents, Guo said.

This is why all mainlanders should be banned. Period.

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Shut It Down Already

You don’t think people should be allowed to use a safe on their own property?

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Abdul Lahazi

You must have missed the part about the spying and national security.

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Shut It Down Already

No, I didn’t. If there was a risk then I’m sure counter-intelligence is aware and will search if they feel there’s need.

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Just me

14 houses? This guy bought and equipped a compound.
But SIDA says: A-OK.

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Shut It Down Already

Equipped with what?

It’s private property. If the authorities think they have reason to search their safe they can (and would) get a warrant.

The legal system says it’s A-OK, not just me.

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bullwhip29

Alleged looters arrested in B.C. wildfire evacuation areas
http://bc.ctvnews.ca/alleged-looters-arrested-in-b-c-wildfire-evacuation-areas-1.3498290

>>> hmm, this didnt happen in Fort Mac, but things are different here apparently…

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Abdul Lahazi

A total of 10 suspects have been arrested between the two communities, according to Mounties. Most of them are locals who are known to law enforcement in the area.

One teen in Ft. Mac vs. 10 local yokels in BC. It is different here.

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YVR

Fort Mac people make decent money working in the oil industry. Williams Lake not so much.

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Abdul Lahazi

Also WL has a big problem with unemployed natives roaming around. They create a lot of havoc.

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bullwhip29

Foreign buyers bought 9.1 per cent of homes in suburbs north of Toronto
https://www.theglobeandmail.com/real-estate/toronto/foreigners-bought-91-per-cent-of-homes-in-suburbs-north-of-toronto/article35662716/

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Oracle

And recent Permanent Residents bought 40% of homes with foreign laundered money.

Anyone with a half a brain knows this boom is a result of foreign money.

Those with less than half a brain are still debating causes.

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Shut It Down Already

How ironic.

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patriotz

Here’s a readable version. Note that York Region’s 9.1% is higher than City of Toronto’s 7.2%.

https://www.pressreader.com/canada/the-globe-and-mail-bc-edition/20170712/281487866389673

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bullwhip29

Giant West Vancouver bank vault listed for free on Craigslist
http://vancouversun.com/news/local-news/safe-space-giant-west-vancouver-bank-vault-listed-for-free-on-craigslist

>>> let me guess, “hiding” your illgotten fortunes in your residence is not the smartest idea…

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Combat roach

Julia Lau?

“In her Granville Street home she kept signifcant amounts of cash in a closet safe-vault standing between racks of designer jackets. She exuded prominence and wealth.”

http://www.theprovince.com/business/inside+world+realtor+deep+pool+mainland+chinese+buyers+dead+fraudster+forfeited+licence/11365879/story.html

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bullwhip29

it is amazing that buses and other ad space still plastered with suncom banners yet she somehow disappeared into thin air. not a peep about her and the co’s business activities on tv, online..nowhere… period. even more amazing (but not at all surprising) is that not a single character involved in the sketchy wheeling and dealing in Vanc, Rmd and local RE over the last several years has been called out on the carpet. not a single one…

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bullwhip29

Richmond woman collects $9.5-million Lotto 6/49 jackpot
http://vancouversun.com/news/local-news/richmond-woman-collects-9-5-million-lotto-649-jackpot

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Abdul Lahazi

“The first thing I did after I realized I won was call my parents in China to tell them the news,” Huang said .

Could not happen to a less deserving person. I hate it when they win the lottery.

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Shut It Down Already

I find it hilarious that you even give a shit. What a bitter, pathetic person you are.

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Abdul Lahazi

A Chineeze with more free unearned income. The plus side is maybe she will leave Canada now. If it takes 9.5 million that is a small price to pay. But more likely she will import her family here then buy a Ferrari and install a safe in her new house.

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bullwhip29

she cant leave or take her winnings with her. remember what the whole point of the exercise was. this said, now the family can be a little less secretive about things in Cda now that they are legitimate multimillionaires. now if this person is simply a “visitor” here who pays no tax, contributes zero to society and maybe even milks the system for everything she can get, she should not be eligible to participate in the lottery in the first place. just my opinion…

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Owen

Anyone who participates in a lottery is paying a voluntary tax.

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Shut It Down Already

Write to BCLC once you’ve wiped the tears away?

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Shut It Down Already

Did you even graduate high school?

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bullwhip29

space, exactly the prompt and bile laden response i expected from you (and the reason i posted this in the first place)

lol…gotcha again…

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BubbleTea

NY TIMES: “Are (Canadian) seniors about to find out that their landlord is actually the People’s Republic of China?”

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Combat roach

It is mindboggling how all that nasty plague managed to infiltrate in all possible segments of Canadian society, economy, and life in general. Out of all third world shit around, Canada ended up with the worst, tragic and embarrassing.

https://www.nytimes.com/2017/07/11/business/dealbook/canada-china-anbang-deals-retirement-concepts.html

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Oracle

Unbelievable how you Canadians are giving their country away. Us minorities (soon majority) see it but you guys don’t. Too schooled and obedient.

Still unbelievable.

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Combat roach

Anyway, scumbags stole it from the Aboriginal people and sold it for the big buck to other scumbags. The wild west, easy come, easy go.

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Abdul Lahazi

Excerpt:
“When the Anbang house of cards finally collapses, who will gain control of these senior care facilities in B.C.?” Mark R. Strahl, a lawmaker with Canada’s opposition Conservative Party, asked at a parliamentary session last month, referring to the province of British Columbia. “Are seniors about to find out that their landlord is actually the People’s Republic of China?”

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