Well it’s not Friday, but Sunday will do.
Let’s do another open topic thread – what are you seeing out there in the economy and real estate market?
319 Comments
oh!
[…] southseacompany points out this article about Finance minister Bill Morneaus plan to ‘help‘ homebuyers. […]
So many sales this weekend, they can’t even count them so Paul can’t post.
With 14,000 realtors doing the counting and maybe a couple of hundred sales I can totally understand how they’re having trouble arriving at a final tally.
Paul personally closed 14 sales himself this week.
He’s really enjoying his coffee.
“ANALYSIS: Finance Minister Bill Morneau’s odd plan to help homebuyers won’t help with housing affordability” , Global
“One of the things Finance Minister Bill Morneau did in the budget on Tuesday was to take steps to fix Canada’s home ownership problem. But who told him Canada has a homeownership problem?”
“Homeownership rates in Canada are among the highest in the developed world. Even among young people, homeownership rates are high compared to our peers with more than 40 per cent of households led by people under 35 owning homes. And yes, even in Toronto and Vancouver, homeownership rates are high relative to those cities’ global peers.”
It’s because nasty foreigners made them buy.
As a previous post noted foreigners only made up around 10% of buyers over last few years.
That means that 90% of buyers were local. If I owned a business and 10% of my customers were foreign and 90% were local, I’d know that locals were driving my sales.
Strange how people look at things.
If an optimist is someone who sees a glass 50% water and says it’s half full.
And a pessimist is someone who sees a glass 50% water and says it’s half empty
What do you call someone who sees a glass 10% water and says it’s overflowing?
It’s even sillier when they see one glass at 19% full and then try and suggest that every other vessel must also be 19% full.
LOL
Bad analysis. Lets say you ran a business that was maxed out at 100% and supported by locals. Then all of a sudden you got an extra 10% on top by foreign buyers with an open cheque book which put you at 110% capacity. What would you do with your prices? You would increase them significantly to balance out the demand you could not handle. You would still sell the same amount, at a higher price. Supply and demand 101.
Very bad analysis, that extra 10% demand for a finite resource is enormous.
It amazing to see the lack of understanding of basic economic principles here.
And then the bizarre glass analogies…..holy shit.
20% of recent marginal demand. The real number is higher when you add corporations and proxy buyers. Huge impact.
“20% of recent marginal demand”.
Utter nonsense.
Read the CMHC report.
I read it. It’s still nonsense.
I thought Karl Pilkington did good some good work on that.
So which part of the report were you referring to?
Nobody is forced to buy.
However, we’ve been building 20% more than household formation for 15 years.
2001-2016 Metro Vancouver Net Dwelling Unit Grow: 241,336
2001-2016 Metro Vancouver Net Household Growth: 202,184
(Source: The Housing Supply Myth, Dr. John Rose, Kwantlen Polytechnic University, Nov. 24, 2017)
No shortage of supply. Not of homes, anyway. Global housing prices have risen due to the asset inflation caused by the growth in the supply of money. Handing out easy mortgages is part of that expansion. It appears that the value of assets has risen, but what’s really happened is that the value of money has fallen. Now that the tightening has begun we see the reverse happening – globally.
Which proves there is a bunch of under utilized or empty homes. Who do you think is keeping their homes empty or underutilized?
Anywhere there is a bubble in the world similar to Vancouver, foreign buying is prevalent. Why does Nova Scotia house cost $400K where an equivalent house here cost $2 million?
Goalposts moves. Well done.
“The First Time Home Buyer Incentive is bad policy”, Globe & Mail
“The incentive lowers mortgage payments for all potential first-time home buyers, and the income cap means that in our most expensive cities, only the condo market is cheap enough to be affected. Demand for these properties will therefore increase, pushing prices back up.’
From the globe. No surprise here. Not so long ago, real estate industry and government officials were doing their best to shut down concerns that skyrocketing housing prices in Vancouver and Toronto were related to non-resident buying. As it turns out, they were very wrong. “Basically, if we put every residential property unit that was built in the city of Vancouver from 2006 to 2017 into a single building, every tenth unit [and a bit more] would have been owned by somebody who doesn’t live in the country,” says Andy Yan, urban planner and director of Simon Fraser University’s City Program. The CMHC condo survey of 2015, a busy year for the real estate market, maintained that foreign ownership of condos was low in metro Vancouver and metro Toronto, at 3.5 and 3.3 per cent respectively. In 2016, Canada Housing… Read more »
“Those who wanted to push back against possible restrictions were able to use the ‘authority’ of the CMHC in the debate to good effect, and this delayed possible policy action. More accurate data would have helped build the case for policy restrictions, and that might have mitigated the sharp escalation of prices.”
The whole bullshit worked well for many including all those assholes religiously peddling their crap how “foreign factor” (Chinese and their money) is irrelevant and pointing to locals without getting into detail who “locals” are. Fucking assholes at all levels and their interests in fucking up Canada’s societies and ways of living.
Thing is we can reverse it in an instant. But the same assholes are in power.
If only one of the far-right parties would field a candidate who would feud with a dead war hero…
What war hero?
And why are you such an imbecile?
Don’t you know if you get shot down in an airplane you are a hero for life and cannot be criticized no matter how despicable your behavior is.
The loser is the reason we got Obama. He can never be forgiven for that.
His “despicable” behavior was casting his vote against the repeal of Obamacare. Captain “Toddler” Bonespurs never forgave him and lacks the class to simply move on. Of course he’s aware that criticizing McCain stirs his base of hardcore fuckwits, and that’s precisely why he does it.
His despicable behavior was personally bombing villages full of women and children, then wanting to do the same to every country in the middle east.
“Bomb, bomb Iran” was the song he gleefully sang as he dreamed of murdering more innocent people.
So, you still haven’t told me why this murderous warmonger was a “war hero”, as you put it.
Oh I know why you think that, the media told you and your not capable of thinking for yourself.
“the media told you”
The media only told us this since he was a rival of Trumps. Prior to that he was a baby killing racist according to the media. Somehow all that was dismissed once he was a foe of Trumps. More proof of fake news.
A link to where the media called McCain a “baby killing racist”, if you’d be so kind.
“the respect and honesty we’re seeing from the 2018 media is a far cry from the Arizona Republican’s treatment in 2008. McCain was labeled as a racist”
How does that quote satisfy my request? It doesn’t.
“I would take it a few clicks further, personally. I say it is the duty of everyone who opposes acts of mass military slaughter for power and profit to cheer loudly and unapologetically when John McCain dies.”
You do realize that medium.com isn’t news, right?
Oh, you don’t.
Says the hypocrite who has repeatedly stated his desire to see China wiped off the map and/or face total nuclear destruction.
Now you suddenly have a moral compass? Just fuck off, you utter buffoon.
“His “despicable” behavior was casting his vote against the repeal of Obamacare”
One of many things. McCain campaigned on repealing Obamacare and voted to repeal it several times when Obama had the veto, then just to spite Trump he voted against the repeal with the deciding vote, sticking his thumb in the eyes of all his voters. Truly despicable, petty politics. Unprecedented.
Yes, and hounding the guy – and his family – after his death is wholly appropriate and totally presidential.
Nobody said it was appropriate, you fucking liar.
Ummm, where did I say they did? Do you even understand what words like “liar” mean, I wonder?
For for the record – do you think it’s appropriate? Do you think it’s inappropriate?
BTW here is the guy you are defending.
“I hate the gooks,” McCain said yesterday in response to a question from reporters aboard his campaign bus. “I will hate them as long as I live.”
https://www.sfgate.com/politics/article/McCain-Criticized-for-Slur-He-says-he-ll-keep-3304741.php
And I absolutely do not defend those words. Sorry if you find this so confusing.
You mean someone with balls, who stands up for normal people and is not afraid of the far left media calling him a racist for telling the truth. Yes that would be nice. Instead we get a phony feminist with a sub 100 iq who has his politically correct cabinet turning on him.
That’s right, the orange billionaire is standing up for the normal people and that explains why he’s the most unpopular president in modern history.
You keep parroting the same drivel. No new material? If I recall he was the most unpopular presidential candidate in history right before then election. Then he won.
He lost the popular vote – because he’s not popular. He campaigned well in swing states. I’m surprised this is new information for you both.
He’s not popular with the communist retards on both coasts?
Pity.
“He lost the popular vote”
That is like saying: but we got more shots on goal after losing the hockey game. Meaningless. The game is decided on goals. Only a poor loser would keep whining about shots on goal, or the popular vote.
“Poor loser” is his middle name.
You can tell he’s a Democrat, he keeps bleating about the popular vote.
Probably thinks their lineup of 2020 clowns is a top notch field.
Dumbass, I framed my words with the correct context already so you don’t need to try and score points by defining what “popular vote” means or accusing me of “whining” when it is clear that I was not.
But as you literally have no other argument I’m more than willing to give you pass this time.
You could just as easily admit that he’s not popular (he’s not – all the polls say so, even yours and his favourite) but that you like him anyway. I mean, there’d be absolutely no harm in that, would there? It’s only your dumbass personality which makes you feel like you’ve got to hold on to this pathetic claim that he’s popular which prevents you from doing so. Sad!
Last time I checked Trump ran to be president and won. Now you can either believe the fake news and endlessly parrot it here, or believe reality. Owned again.
Running away again, I see.
Trump is not popular. This is a fact. He wasn’t popular on election day and the situation hasn’t improved since no matter which polls you cherrypick. This is also a fact. So he’s clearly not standing up for “normal people”, now is he? Because if he were then, by definition, he’d be popular. Again, factual.
Now scurry off while squealing “fake news”, as usual.
“He wasn’t popular on election day”
LOL, the guy who won the election was not popular on election day. It does not get anymore absurd than that. Has the doctor prescribed lying to yourself as a treatment for TDS?
He lost the popular vote and has faced approval ratings below 50% (while ranking below every other president in modern history) for his entire presidency up to this point. By every measure he’s unpopular. Why are you so unable to wrap your tiny little mind around this? Does your world spontaneously collapse if you realize you’re in the minority? I fail to see the big deal.
You said that he’s looking out for normal people – you were wrong and should probably just move on instead of putting your hands over your ears.
He’ll win again in 2020 and you’ll repeat the same tired, pointless sentence another 1000 times.
You really are more repetitive than a stupid parrot.
Do you type with your beak?
And in 2020 we’ll be able to say that you’ve been wrong about Vancouver RE for 18 years. I’m looking forward to it.
Like nobody knew. BS.
Vested interests forced media and everyone to believe it or else they would be called racist.
Look at GT. He was the worst kind of evil.
They can reverse it right now. Ban non citizens from buying and give existing foreigners 5 years to sell or get citizenship.
Furthermore, tax third homes within lower mainland at 10% of property value.
If they were serious. But they’re still playing a game with the sheep. Soon they will finally say high immigration means prices may never come down. That’s what they’re waiting for imo.
Oh no! Did Garth ban you as well as that other idiot?
It is shame that after all that happened and still happening (laundering, tax evasions, astronauts, students, realtors, drivers, Meng, and all other shenanigans and locustation) establishment is still scared of Chinese and their importance to Vancouver. Just ban them and clean up the leftovers through rigid legislation. Fuck the race card, it is irrelevant.
Yeah, all those lowlifes that played the race card set our country back at least 2 generations while the invasion took place.
I remember them all from politicians like Gregor to various media hacks to right dishonourable traitors who run worthless blogs with dog pictures.
Too bad they won’t go to prison for their crimes against our country.
“Invasion”. Stop being such a fucking dumbass drama queen. And if you think a crime been committed you should probably report it, no?
Ratespy’s take on the FTHBI https://www.ratespy.com/first-time-home-buyer-incentive-03208628?fbclid=IwAR3tbfxVVpXGPfAOgVJH-EF4GDWud-d9bQkDfQJGYzTAKsM9t1t7-n2wGq0
TLDR? Giant nothingburger (as has been stated on this board a few times already…)
I see you like using that phrase on twitter. 😉
“Trudeau’s budget targets home-buying millennials with ‘mind-blowing’ equity plan”, Bloomberg
“The move is “mind-blowing,” and will only fuel demand in the segment of the market that is already the most competitive, said John Pasalis, president of the Toronto-based firm Realosophy Realty Inc.
“Why is the federal government playing mom and dad and buying everyone homes?” he said. “This is not the solution to high house prices, this is trying to treat the symptom by just throwing money at it, throwing taxpayers dollars to buy homes for people.””
chinese investors continue to wreak havoc on the Sunshine Coast
2018 backgrounder
https://www.thelocalweekly.ca/sechelt-expresses-frustration-with-sandy-hook-logging/
‘A formal complaint was also filed with the Managed Forest Council (MFC) in early 2018, but the MFC’s 2018 inspection program report said there were “no compliance issues noted” for Managed Forest 503.’
“Homebuyers to get new mortgage incentive, Home Buyer’s Plan boost under 2019 budget”, Global News
https://globalnews.ca/news/5069183/budget-2019-canada-housing-affordability/
“New measures would encourage more borrowing, possibly drive up home prices”
“Economists said the new CMHC incentive and the enhanced HBP would encourage Canadians to take on more debt, stimulate housing demand, and possibly push up housing prices. “It’s a different kind of borrowing,” David Macdonald, senior economist at the Canadian Centre for Policy Alternatives, said of the CMHC incentive. And with a home-price limit of around $500,000, the program is unlikely to help middle-class millennials buy homes in Vancouver and Toronto, where average property values are far higher, said TD economist Brain De Pratto.”
this is a duplex located at 1322-24 Maple St. listing doesn’t imply this is more than one legal address in the eyes of the airbnb police
host was either sloppy by revealing 1322 portion of address OR is deliberately making it look like property is a single address. if host lives in 1324 but rents out 1322 on airbnb, he/she is not adhering to the bylaws
but if i were a betting man, i’d say this is not host’s principal residence judging by availability of entire house and has been vacant for considerable period of time. in a former dream fantasy world these owners were somehow trying to sell this rather nice flip job for $5.65M
https://residentexperts.ca/wp-content/uploads/2018/10/1322-Maple-St-8pg.pdf
Nice of the realtor to not even mention how many Sq ft the place is…. 5 bedrooms and 5 bathrooms crammed into 2100 sq ft….
old listing says 3119 sqft, 3 bdrm, 3 bath. even if this could be torn down (and why would you?) the rebuild would be closer to your number. owner basically tried to double money on this factoring in all costs (prorperty bought in 2015 + considerable improvements) but missed window to sell for handsome gain by approx 18-24 mos now challenge is way more daunting with FBT, EHT, spec tax, no fixed term leases, all sorts of restrictions on short term rentals, a deteriorating business environment and a govt that is looking to knock your legs out from under you. given this owner basically got “gregor’d” on the deal by putting in the legal suite (separate address) and now can’t live in either unit and airbnb the rest of house out, leave completely vacant to appease prospective buyers, rent out… Read more »
my bad… I was assuming 3K sg ft… that is a super nice reno and great location and 3K sq ft house in that area is nice…
So lets assume someone makes $300K annually. That will give them $1.5M mortgage. 8K a month payments plus tax plus maintenance so probably about 10K a month…
Not bad really… as long as they have the down payment required…
sure, ok, it’s all good as long as buyer has a few million kicking around for dp or makes way more than 300k
LOL… that was my point… Not a ton of 300K a year jobs in Vancouver…Also not so super easy to amass a few million for a DP!
This is something people conveniently forget when they think this market is anywhere near bottom….
and just to think that in a former life, buyers could swing this on a student’s or housewive’s income…
There are over 300 people just in the public sector making over $300K in a Vancouver.
Yes, if you include doctors…
I included everybody who would show up in the list of public salaries. What’s your point?
I was just interested to see where you’re data point is coming from that’s all… Not sure if you have noticed but lots of people like to post numbers pulled right out of their ass
Vancouver Sun database. Use the Advanced Search to find the position on the list of the lowest-paid individual earning more than $300K.
Servicing cost on his ~$4-5MM investment are $10,000-$20,000 per month depending on his rate. 10k/mo absolute bare minimum though.
Utilities, maintenance, and taxes add another $1,000/month. Payables are due monthly whether it sells or not.
And this guy is going to stem his losses through an illegal airBNB listing that nets him $400/night IF it rents.
Target market for that? Who pays $700+/night to stay in 2000 square feet in suburbia rather than downtown? Porn shoots, porn shoot after parties, porn actress accommodations, the list is endless.
If he installs some cameras maybe he could get some additional revenue…
i presume they are looking to fill with beach loving tourists in the short term and see what happens. obviously they have to weigh possibility of damage being done, sporadic income stream vs having flexibility of having clean, empty house at a moments notice (should they reconsider and put back on mkt)
Even if it’s full 3 weekends out of 4 for 16 weeks of summer, that’s maybe $4800 in revenue for the summer.
Which pays between 7 and 14 DAYS’ carrying costs.
IF he rents it that much. Kits Beach != Hawaii, and people pay less than that in Hawaii.
And IF he doesn’t get caught and fined for the illegal listing.
Can we get this guy’s name? I want him to manage my portfolio.
In fact, in rough terms his DAILY carrying costs for that property are greater than the ~$400 per night that he might be able to get from the illegal AirBnB.
So every night it’s rented he loses a little bit, and every night it’s not rented he loses half a grand.
Seems to be a financial genius; I wonder if this is Mark Cohodes’ new venture.
More landlords subsidising renters be they AirBNB or otherwise… Funny how the math reveals the same thing through all these cases, examples and permutations. The data really does point in one direction – bubble.
specuvestors who are now bagholdeers will do whatever they can to hold on while waiting for the greater fool to come and take them off their “investment”
Problem is we are out of greater fools.
you also have overlooked that this was bought for approx $2M in 2015 + renovation costs (make up a number)
No, let’s assume that every seller paid their own asking price and put 5% down. It makes for more impressive numbers that way. Next, we’ll underestimate occupancy and overestimate fees and expenses. It’s not like it says right there in the fucking ad that they pass the cleaning fee on to the renter.
For your next move I recommend you claim an opportunity cost of 10% on their equity. Yeah, that oughta do it.
don’t intend to split hairs here, but your math off by quite a bit. so, if you’re presuming house is rented out for total of 24 days (3 x 2 x 4) @ $665/nt that equates to approx $16k if i am not mistaken.
next point…where did it say that this owner has a mortgage? they may simply have paid cash for it and are choosing this route for a number of reasons. ie. hoping to full a fast one on city hall over the short term and want to keep flexible in case they re-list. if they put a long term tenant in house, selling may be more complicated with the RTA having recently changed.
this all said, they aren’t selling this for $5.6M
You are mistaken. After AirBnB commissions he will clear maybe $400/day ex. tax. Meanwhile his cost to carry his specuvestment is $10,000-$20,000 per month depending on his financing terms. If he somehow has millions in his own liquid, after-tax cash tied up in this project (hardy har har), then his *opportunity* cost is $10,000-$20,000 per month. 6 of one, half a dozen of the other. If you want hard numbers, here they are: COSTS -sunk costs so far = maybe $3MM cash for ~48 months @ 3% opportunity cost = $360,000 -maintenance, upkeep, and taxes = $48,000 easy -ongoing monthly carrying costs right now = $4.5MM-5.5MM in value tied up in the property @ 3% opportunity cost = $10,000++ per month. -transaction cost to sell = Another $150,000 If he sells today for an unlikely 4MM, his absolute maximum rate… Read more »
…show me how to do any of those things for less cost and I will do them immediately.
unclear how this owner would theoretically net $400/day after fees which would amount to approx 40% according to you. airbnb doesn’t charge anywhere near this much. but for $hits and giggles, let’s say they do. even at $400/day x 24 owner is closing in on $10k not $4800 as you claimed. that was all i was trying to highlight. i get that this person maybe coulda woulda shoulda done something else with the money (if a cash deal) but that is not what i was debating in the first place. my original points were that window to sell closed 18-24 months ago, that an asking price of $5.65M is a drug induced fantasy of epic proportions and first and foremost, that the airbnb listing is likely illegal because listing includes whole house but property has self contained secondary suite, which… Read more »
AirBnB fee, cleaners, insurance, and property management together take > 1/3 of your revenue.
Yes 10k income per summer not 5k. My mistake. Still a drop in the bucket on a property that is costing him $120,000 – $180,000 per year.
Maximum possible AirBnB revenue is literally a rounding error.
LOL by the way his assessment is 3.4.
Trying to sell for 5.6 in 2019 = loonie toons.
More likely he will get 3 million for it, counting the renovations and whatnot, meaning he took somewhere around a one million dollar bath.
The sooner he comes to grips with that and takes his lumps, the sooner he will stop bleeding $10k per month plus depreciation.
Checking the Availability Calendar would be too tricky.
“Let’s assume they put 5% down, that’ll make the numbers look good!”
Doesn’t matter if he put 0% down or 100%. Cost is the same.
If he put 0% down, he has borrowing costs.
If he put 100% down, opportunity costs.
Either way it can be optimistically estimated at 3%-6%+.
Show me a way I can borrow or spend $3MM without it costing $10,000 per month, and I’ll do it!
“Canadian Government Vows to Take Equity Position in Homes Purchased by First Time Buyers”, Vancouver Condo Guide https://stevesaretsky.com/canadian-government-vows-to-take-equity-position-in-homes-purchased-by-first-time-buyers/ “The real winner here is property developers who are being gifted a liquidity injection as pre-sale absorption rates fall in Vancouver and more recently sank to an eighteen year low in the city of Toronto.” “While using taxpayer money to help first time buyers purchase a home at record high valuations sounds like a heartwarming idea, thankfully the policy has little bite in reality. The only real way to make housing more affordable is for prices to drop, not by handing out free money. I suspect this was the plan all along given the Federal Government did not go ahead with re-introducing the 30 year amortization and remained firm on the B-20 mortgage stress test. As usual, this appears to be mere… Read more »
“Federal budget 2019: The Liberals’ mortgage plan is bad news for the economy – and it might not even help home buyers”, Globe & Mail
https://www.theglobeandmail.com/business/article-the-liberals-budget-is-an-investment-in-election-votes-and-its-bad/
“…. economically, it’s much harder to square. It may ultimately do little to improve housing affordability. And it leans against attempts to rein in the biggest and most conspicuous threat to the country’s economic stability: record-high household debt that is tilted heavily toward mortgages. The plan will increase demand for homes – that’s precisely what it’s designed to do. ”
“The help the government is offering new buyers could very quickly be wiped out by rising prices; in markets where prices have been declining, this could undermine the improving affordability that buyers would have seen otherwise. And this isn’t just for first-time buyers – all buyers will feel the impact.”
So MUCH cash on the side… What is gonna happen with this tsunami of cash?
Three recent sales in WV around 1M UNDER assessment.
2588 Garden Court, West Vancouver
Sold 2011 $5,400,000
Sold 2014 $5,200,000
Just sold for $5,400,000
2018 Assessed: $6,359,000
2017 Assessed: $7,323,000
4797 THE GLEN, West Vancouver
Just sold for $3,172,000
2018 Assessed: $4,324,000
2017 Assessed: $4,709,000
3954 BAYRIDGE COURT, West Vancouver
Just sold for $3,904,762
2018 Assessed: $4,800,000
So much reverse money laundering going on!
So many outliers! Everything is an outlier!
Wow the criminals have really kicked it into high gear and are inflating our market to the…basement?
No 30 year ams.
No shelving the stress test.
Eby finally gets through to that slug Morneau who will now target Norweigan money launderers and tax cheats….by the way, where is Eby?
Oracle’s losing streak continues with no end in sight.
Don’t count your chickens yet. Still time before the election.
Hurry up and buy that insurance policy deeeeeep in the valley… Hurry before its too late…
Admin: can you ban this kid?
oh dad don’t get angry at me…. Im just pointing out that if you dont hurry you will be FOMO’d right out the valley.
Didn’t you yourself say that you were going to hurry and buy in the deep valley as insurance against the FOMO tsunami that is about to be unleashed?
Giving Eby credit for something not in the federal budget. Now that is getting desperate. If Eby supported the stress test why did the NDP exempt BC credit unions from the same stress test rules?
BC credit unions have adopted the stress test at least mine where I work
Pay attention YVR.
Eby has been screaming at the feds for over a year to target money launderers and tax evaders.
If Eby is so interested in targeting money launderers and tax evaders any reason why he doesn’t start by doing it here in BC? That Perter German report was so devastating for casino money laundering the NDP have increased casino revenue forecasts in their budget. Must be all those locals feeling better about going to River Rock to pull the slots with all that dirty money gone.
Casinos are still being planned and built. Tells you all you need to know. It’s going to take a long time to fix all the dirty money n BC. These guys are smarter and more motivated than the regulators. Revenue Canada will never be the IRS. If we want to fix this, that Federal task force would need serious teeth. Won’t happen. Our judicial system moves too slowly and is completely incompetent. The Bacon trial is still ongoing a decade after the crime. This is a system created, run and managed by lawyers. Anybody really think they’re going to solve complex financial crimes when they can’t deal with a basic murder investigation? Cut down a tree at SFU and they’ll find court time for you tomorrow. Kangaroo courts can only solve kangaroo crimes. What a joke we are. Dirty money… Read more »
They don’t have to catch every transaction.
They just have to make is riskier and less palatable than other available options.
Bring a hockeybag full of money to a casino or a real estate deal, get interviewed.
That’s all it takes and that’s what they are implementing right now.
Where did you get the money?
I sold a house.
Enjoy your night and good luck sir.
Sold the house for cash and took the money to the casino?
Ok. Sure.
“I sold a house and insisted on cash”.
LOL.
You mean simpler crimes require shorter court proceedings? Say it ain’t so!
No I mean a murder trial that takes a decade and gives immediate attention to frivolous matters is symptomatic of a broken system.
If it were the system that weee broken then every murder trial would take as long. Newsflash – they don’t.
“The Fed has exacerbated America’s new housing bubble”, Financial Times
https://www.ft.com/content/219aaa52-4675-11e9-b168-96a37d002cd3
“Loose monetary policy has buoyed assets but did not create meaningful supply”
“The dysfunctional divide between incomes and asset prices is not just an American problem. It is observable in many international markets as well: including Hong Kong, London, Paris and Singapore. In the US, unsustainable real estate prices have recently begun to falter in bubble cities such as New York, something which historically foreshadows a national downturn.”
The global recession is going to completely eviscerate housing markets around the globe. 2008 is going to seem completely inconsequential compared to the next downturn.
LOL
“Federal budget offers first-time home buyers a break with $1.25 billion in mortgage relief”, Financial Post
https://nationalpost.com/news/canada/federal-budget-2019-offers-first-time-home-buyers-a-break-with-1-25-billion-in-mortgage-relief
“Potential home buyers in cities with white-hot real estate markets got some relief in Tuesday’s federal budget with an incentive program that could lower mortgage payments for households making less than $120,000 per year.”
“Prospective buyers who have the minimum down payment for a home can apply to finance between five and 10 per cent of their mortgage via a shared equity program administered by Canada Mortgage and Housing Corporation (CMHC).”
“The government is also increasing the amount that first-time buyers can withdraw from their RRSPs, from $25,000 per individual to $35,000 — or $70,000 per couple.”
As Simple Solution points out, this is not legislation yet. It is therefore just an idea and a trial balloon.
To move forward, our embattled Prime Minister would have to:
-explain how it would actually work
-convince Canadians that the federal government should become residential real estate speculators using tax dollars
-confirm that the measure would be popular with most Canadians — as opposed to wildly unpopular
-get the legislation passed
It is quite probable that he will accomplish all of this before the election, but it was also quite probable that two of his senior ministers, his best friend, and his Clerk of the Privy Council wouldn’t quit his bullshit excuse for an impostor government in the span of a few weeks.
Don’t count your chickens.
This would not be the first promise that JustinE doesn’t deliver.
not saying he wont drop the ball, but the promise of free money will sway quite a few people imho.
Yup, sure will… right up until they figure out how free it is.
Brilliant move though. Throw out this nothingburber to developers and FTHB to make them both think something is being done.
Want to make homes more affordable for FTHB? Leave the market alone so it can cleanse itself of all the excesses
and don’t forget all the current owners who were looking for “something” to be done to prop market up. the Libs are attempting to appease everyone (owners + non owners) with one brush stroke
and poor John Horgan, who canned Krusty’s FTHB loan program only to possible see it come right back…
Headline should read ‘”Federal budget offers real estate industry a break with a $1.25 billion stimulus package”
LOL
Hopefully the government is at the front of the line when the house is sold, otherwise the taxpayer gets screwed twice when the mortgage is underwater.
“Hopefully the government is at the front of the line when the house is sold”
If they were at the front of the line it would be a 2nd mortgage. If its actually an equity position they share equally with the owner on both the up and down side.
It will be interesting to see what the final legislation looks like.
Indeed.
““Potential home buyers in cities with white-hot real estate markets got some relief in Tuesday’s federal budget with an incentive program that could lower mortgage payments for households making less than $120,000 per year.”
So FTHB will be able to get a maximum $480K combined mortgage and incentive… should really help in cities with “white hot real estate markets”
The reporters cant even be bothered to think how ridiculous that statement is…
I have not been able to find any mention in the budget of the stress test being removed or of 30 year amortizations…
Finally some sanity
that doesn’t mean these measures won’t be implemented at another time. they might simply be keeping some powder dry
Of course… hope springs eternal!
Or in the case of the Vancouver realestate specuvester HOPE DIES LAST
Here is more BULLISH news…
“We will also take action to crack down on the people who break the rules – who evade taxes or use real estate for money laundering – making housing less affordable for the people who need it,” said Finance Minister Bill Morneau in his budget speech.
Maybe just empty words in the end. But lets keep in mind the government needs tax revenue….
“We will also take action to crack down on the people who break the rules – who evade taxes or use real estate for money laundering – making housing less affordable for the people who need it,”
Wonder what particular group of people they had in mind, probably overleveraged locals, right?
Easy target will be “developers” who used the Principle Residence Exemption to avoid paying capital gains. They will target these guys first.
Everyone needs to remember – the CRA doesn’t have a “burden of proof” requirement. They can accuse anyone of anything and the taxpayer needs to prove his innocence…
” They can accuse anyone of anything and the taxpayer needs to prove his innocence…”
An assessment from CRA is not a criminal charge. They are just claiming you owe them money. You can challenge them in court, just like any time anyone claims you owe them money, and it’s decided as a civil case.
There is also an an offence of income tax evasion under criminal law. Like any other criminal offence, there is the presumption of innocence and guilt has to be proven beyond a reasonable doubt. That’s why very few tax cases result in criminal charges – it’s hard to get a conviction.
Don’t point out facts here. Simpletons will get angry.
I never meant to imply that an assessment from CRA is a criminal charge. What I was pointing out was that CRA can assess whatever they want. The onus is on the taxpayer to prove their assessment is incorrect in court or out of court.
Oh Dad, you have some knowledge to impart on us? Aren’t you busy FOMOing deep in the valley? You have time to impart you vast wisdom on us?
We are sooooooooo grateful
Don’t point out facts here. Liars with vested interests and a menagerie of sockpuppets will get angry.
I believe we’ll see more tax evasion cases referred to the justice department from the CRA. Ignorance of the law isn’t a defense so if there’s strong evidence a property wasn’t the primary residence, and they claimed it was such on their taxes, it should be a pretty easy criminal case for crown to win.
Patriotz will nitpick things like this but give blatant racism a pass.
Pathetic.
24 million dollars for an “ace” team of auditors who are paid to hunt money launderers in Vancouver.
If Twitter users can find unbelievably shady transactions just by looking at Zolo, what do you think a professional auditor with a $24MM budget and access to tax returns will find?
I think the milk just got soured by around 24 percent, give or take.
Also, $1MM for the express purpose of improving data sharing around Real Estate transactions. The “Vancouver Model” just became obsolete.
Those banking on their specuvestment equity recovering after the recent bloodbath, how does this make you feel?
the full $24M is not being allocated to Vanc mkt alone but across Canada, with a focus on BC and Ont
Across Canada? LOL. Looks like it will be focused on Vancouver and Toronto. All specuvesting tax cheats in Spuzzum should not be too worried…
Ottawa will spend $24 million to outfit the teams at the Canada Revenue Agency, which will focus on “high risk areas, notably in British Columbia and Ontario,” the budget says.
Yeah where do you think they will start the search? Where do you think they will expect to fill their quotas?
Bumblefart County Nova Scotia? Lumsden, Saskatechewan?
Or will they start off with a list of $10MM+ mansions whose owners paid zero income tax in 2018, and nail assessments and penalties to their front doors using the hammer of fucking Thor?
CRA will literally inventory the type of mustard in your fridge (happened to someone I know) to estimate your income.
If their estimate disagrees with your return, the onus is on you to prove otherwise.
How many money launderers are going to stick it out once that starts happening?
All we have to be is less appealing than any alternative regime. Wouldn’t you say that this will change Vancouver’s appeal to the negative?
Ah, the court of Twitter.
OK, good news for first time home buyers? If I were 30, I might not have any savings not alone $35,000?
The budget is worst than I thought.
They are giving first time homebuyers 10% of the purchase price free. Correct me if I’m wrong.
$500,0000 condo will now shoot up to $550,000.
Trudeau needs to go.
They’ve essentially lit the low end of the market on fire for first time buyers.
A $400,000 condo in the valley now with 10% down and CMHC incentive becomes a $320,000 condo.
Rent will cover the mortgage.
This is much worse than I thought. I’m left with no choice but to buy a condo or townhome well into the valley as insurance because they’ve just started FOMO 2.0.
More Oracle BS. You think this is going to be for investment properties? What a clown.
The feds have just launched NOTHINGBURGER 1.0 Go buy deeeeep in the valley as insurance.
“Correct me if I’m wrong”
You are making shit up again.
They allowed you to “borrow” $10,000 more of your own money from your RSPs. Total amount is $35k, up from $25k originally set in 2009.
Totally irrelevant change to the Vancouver market.
refresh your browser. news is out
Read the actual budget… not the news snippet:
The Incentive would be available to first-time home buyers with household incomes under $120,000 per year. At the same time, participants’ insured mortgage and the Incentive amount cannot be greater than four times the participants’ annual household incomes.
That applies to home values of 480k or less and households with $120k or less combined income who have never owned a home before and are not trying to buy at greater than 4x price-to-income.
People who meet that test are already priced out of Vancouver by a wide margin.
Might as well further restrict it to lefthanders who are capricorns and only turn their car left at noon on a Tuesday.
that is what is sounds like to me. there are questions about repayment…
-if value of home changes, is principal amount of repayment affected? if house doubles in value, do you have to pay back twice the loan amount? or does owner get a free ride? and what happens if prices theoretically fall by half? does CMHC get repaid full amount or have to take a 50% haircut? for all we know, the answer to both might be the latter, which is why they failed to clarify these points.
-what happens if owner never sells the property?
An equity stake is an equity stake. The government is literally a co-owner.
If the value goes up, their value goes up.
And when it crashes, their value crashes.
This blows my mind on levels that I have not yet been able to comprehend.
For example, if the government literally owns a stake in hundreds of thousands of Canadian homes, how can they be expected to make impartial policy decisions?
“If the value goes up, their value goes up. And when it crashes, their value crashes.”
>>> these 2 points were not clarified. you never know, it could be a heads i win, tails you lose situation
Could be but then it would not be an equity stake. It would be a loan.
If that were true, I believe they would have called it a loan.
I’m not even sure that it would be legal to call it by one term if it was in fact the other.
well, they never answered the questions. given the current and past shenanigans of this adminstration, I wouldn’t rule anything out at this point. if I was a betting man, I’d guess that eventually they will leak out details that support the idea this is “like” an equity stake but is in fact an interest free loan (which effectively never has to be paid back if the property is never sold). also, i am expecting the detailed terms to include having to take a haircut on principal owed if prices drop and a loophole allowing owner to buy out the govt’s portion at the discounted valuation.
This requires new legislation. Lets see if the government can even get it through before the election…
The Government will propose legislation that would enable CMHC to offer the First-Time Home Buyer Incentive and administer a fund for third-party shared equity mortgage providers. More details about CMHC’s First-Time Home Buyer Incentive and funds to assist other providers of shared equity mortgages will be released later this year, with the programs expected to be operational by September 2019.
i agree, but this will buy a lot of millennial-renter votes. singh and sheer are basically forced to bring something to the table now…
I totally disagree. But we will find out in time. Lets wait for the details to be released…
This will be exposed as the joke it is.
Anyone remember JustinE’s promise of Election Reform?
If you are referring to the “shared equity” thing, it only applies to households that make under $120k.
Those households do not qualify for Vancouver housing in the first place.
huh? so a couple comprised of one teller and one waiter making say $100k combined can’t use this to buy an apartment? am i missing something?
Yes, a couple that makes under 120K annually can use this to buy an apartment. Your example would allow them a TOTAL mortgage (which INCLUDES the incentive amount) of 400K.
You are talking about a pretty narrow tranche of society:
-<120k combined income, but
-neither has ever owned a home, but
-they have $25,000 plus in savings, and
-they are willing to sink it all into a shitty apartment, but
-they haven't done so yet because they have lacked the ability to sell 10% of their home to the federal government in exchange for an extra $48k cash.
The 48k cash realistically reduces their payments by around $133.00/month.
So this theoretical buyer checks every available box, but was on the sidelines only because of a little over a hundred dollars per month.
Do you think that there are 100 families sidelined due to the lack of a hundred and thirty three bucks a month? How about 200?
PS the government’s own rosy estimate is that this will stimulate 3300 sales per year across Canada.
Most of the sub$500k properties are not in the lower mainland. Does that mean that we will even get 10% of them?
PPS bank teller + waiter declared income does not allow them to buy anything here. At all.
-not that it matters, but govt estimated 100,000 over 3 yrs
-there are plenty of properties < $500k
-in your defence, they certainly won't be located in yaletown, coal harbour or probably anywhere in DT core but there are 100s, maybe 1000s in the burnaby's, new west's, surrey's tri-cities etc of the world. most importantly, the developers have this base price point to work around and will raise prices (in some cases) and/or lower sqft to accommodate this category of buyer
Well actually it does matter. It matters quite a bit. Where did you get the 100K figure over 3 years?
https://www.budget.gc.ca/2019/docs/themes/housing-logement-en.pdf
pg 1, bullet point 2
Thanks for the link… now lets apply some math…
Up To $1.25B for the program. 100,000 qualified FTHB get $12,500 each… Makes total sense when you look at it that way…
What a joke
For the rare family who will meet all of these tests simultaneously, it would reduce their borrowing costs by less than a single rate hike. (250 basis points on a typical rate of 3% is similar to the 10% free equity the government is talking about giving them.) So for that small group, the government has just given them the same purchasing power they used to have in October 2018. Ooh what a MASSIVE change. Except that, as you correctly point out, the developers will just adjust prices accordingly and sell these buyers the same property at a higher price. Creating a wealth transfer from Justin Trudeau directly to Canada’s real estate industry — developers and financiers. Which at the same time causes poorer families to be deeper in debt, and buys him votes that he desperately needs. Sound about… Read more »
Nailed It!
FTHB can also just wait for prices to come down and not extend themselves to a get into a lifetime of mortgage serfdom.
this isn’t solely about raw numbers and whether a dollar here or there will make or break a deal. the fact that the govt is stepping in to do this will change the mindsets of other people looking in this price range too
HA HA HA HA HA
Here comes MOAR FOMO!
“Thank god the government is here”
Yes that is a familiar rallying cry amongst those who are by definition priced out and renting due to 15 years of obscenely bad government policy which allowed the largest real estate bubble in the history of the world to form.
Oracle ran the numbers… there are billions…. all foreign students… all arriving and then bringing their extended families to also take advantage of the great offer.
Don’t underestimate the psychology of free money. People will buy 12 crappy sandwiches to get a free one.
Trudeau must go. I agree.
But once again you didn’t concern yourself with any data points some people refer to as “FACTS” when spewing your nonsense.
The Incentive would be available to first-time home buyers with household incomes under $120,000 per year. At the same time, participants’ insured mortgage and the Incentive amount cannot be greater than four times the participants’ annual household incomes.
Just a giant NOTHINGBUGER
i disagree with you to a certain extent. there are plenty of individuals/couples that would easily qualify under the income threshold. certainly anything up to $500k in value would be doable based on your calculations. fine, these buyers wouldn’t find a detached home for this amount here, but the bar has been raised at the low end imho. i’m pretty sure the baristas, waiters and cashiers are giving this a big thumbs up.
Oh yeah, the cashier making $17/hour and the Barista making 30K a year are doing cartwheels…..
and so are the property developers
Oh yeah. The $2Kper sq ft coffins in the sky will be in super high demand.
OH WOULD YOU LOOK AT THAT
New budget contains FA on the housing file, except:
“The creation of dedicated real estate audit teams at the Canada Revenue Agency to tackle tax non-compliance and money laundering in the housing market.”
…plus a boost of RSP self-loan from 25k to 35k.
Zero stimulus, zero juicing.
Cdn Govt introduces First Time Home Buyer Incentive and increases maximum HBP withdrawal by $10000
https://www.cbc.ca/news/business/budget-cmhc-home-buyers-1.5063204
HA HA HA… 1st time homebuyers can withdraw an additional 10K from RRSP…. Making the rather large assumption they actually HAVE an RRSP.
The shared equity mortgage is a joke.
Everyone who was waiting for added fuel to the fire is f&$%ed
But the CMHC’s latest Housing Market Insight report, released last week, shows the previously released data were off by as much as two to three times the actual rate of non-resident participation in home ownership. Based upon the new study, the numbers are actually 11.2 for metro Vancouver and 7.6 for metro Toronto.
As expected, local buyers drove the market, accounting for almost 90% of sales.
Fools.
The influx of foreign capital and the debt driven FOMO of the locals feasting on the credit orgy….
What a combination
Unfortunately for the specuvestor, this dynamic is exactly as effective on the downslope.
Assessments dropping year after year, combined with anecdotes about friends and neighbors selling at a loss, is the new zeitgeist.
You can’t make your assessment go away no matter how much you want to. Like shit on a blanket.
More of Oracle’s Reverse Money Laundering. (RML?)
Stolen from twitter.com/mortimer_1
Even east Vancouver condos taking losses… loss of $25,000 (+ expenses)
602 138 E HASTINGS STREET, Vancouver
Bought 2018 $420,000
Just sold for $395,000
2018 Assessed: $414,000
2017 Assessed: $371,000
Thats actually a case of mistaking the washing machine for the paper shredder….
LOL
You mean it’s not a vast, needlessly complex, international conspiracy between tens of thousands of people to make the market *seem* to be doing the exact opposite of what all evidence demonstrates?
as much as you all might think his theory is absurd, i believe it does happen in some instances. just from a tax perspective alone, people would be easily tempted to trigger a lowball sale or even a loss just as they do with their investment portfolios. to potentially save hundreds of 1000’s or even millions, i personally think the added aggravation is well worth it. besides there are teams of agents, lawyers and accountants working feverishly on the case looking to structure these types of deals specifically…for a fee, of course. i also think by now, most of you all should be well aware that even the most absurd strategies and business practices once thought to have never occurred in this part of the world are in fact being uncovered with regularity as people who are supposed to be… Read more »
No doubt it happens from time to time on the margins.
DaveOracle is claiming that that is what happens every time a property sells for significantly less than assessed.
They treat “assessment” like it is something other that a tool the government uses to determine property tax rates…
If someone could force BC Assessment to buy their property for “assessed value” then the narrative would make more sense.