Category Archives: Canada

10 reasons the top is in for Vancouver real estate

Whistler or bust? posted this list of reasons they think the top is in for the Vancouver real estate market. What do you think? 

10 Reasons why am I calling a top now

1. Vancouver Real Estate has finally gone parabolic. It has gone from years of above average price increase to massive never before appreciation. No asset class that I am aware of has ever gone parabolic or hockey stick on a chart and not had a major crash. Not tulips, oil or tech stocks. This is textbook classic top – Greed has replaced Fear and it’s different this time for ______ and _______ has replaced rational thinking.

2. Panic buying and large price increase have spread to the distant suburbs such as Maple Ridge, Places where there is plenty of buildable land and lots of new inventory. Places are going multiple bids in average neighborhoods. People genuinely think if they do not buy now they will be priced out forever.

3. Real Estate prices in the vast majority of BC are flat to down. Its as if the Lower Mainland is an island onto itself. These are areas not affected by HAM or DAM so it better reflects the current economic fundamentals of the real estate.

4. The Canadian and BC economy is weak. There is risk that the spill over of falling oil prices will spread to Vancouver. This can be in the form of layoffs at West Jet or the CIBC because they have to cut costs due to losses on loans to oil companies. This is a bigger thing than many people think.  Continue reading 10 reasons the top is in for Vancouver real estate

Who wants a 50 cent dollar?

With rumors of another rate cut, Rob Carrick points out 8 reasons he thinks that’s a bad idea. The very first reason? The Looney will fall even further against the US dollar.

For eight years, the Bank of Canada has been trying to encourage economic growth by lowering interest rates. It’s so not working.

In fact, lower rates are hurting a lot of people more than they’re helping. We have to at least acknowledge this as speculation of yet another rate cut grows. It could come as soon as Wednesday, which is the date of the next rate announcement from the Bank of Canada.

The central bank considers the entire economy when it sets rates. Now, let’s look at things from the point of view of everyday people. Here are eight reasons why the Bank of Canada shouldn’t cut rates any lower.

1. The dollar will fall even more: The most disruptive force in personal finance right now is the falling dollar. That’s because it’s hitting us all in a vulnerable spot – our grocery bill. Helpful for exporters, a weak loonie is a tax on families and snowbirds who must change Canadian dollars into U.S. currency. Last week, the dollar fell below 70 cents (U.S.) for the first time since 2003. A lower dollar adds downward momentum.

Read the full list over at the Globe and Mail, although a number of them are directly connected to a dropping looney.

The one group that a dropping looney should help are exporters as their products get cheaper for foreign buyers, but Jayson Myers, the head of the countries largest exporters association says don’t bother.

“Interest rates are low already. A little bit of dollar stability would be better.”

As an interesting aside, in 2002 when the CAD was hitting record lows Treasury Board President Scott Brison said it was

“a pay cut to every Canadian, a drop in our standard of living and a reflection of the fact that Canadians are getting poorer as Americans are getting richer under the watch of the government,”

Scott Brison is now a key cabinet minister and top economic aide to Trudeau.

 A hat-tip to southseacompany for the links.

Hating the mortgage-free

This is a weird story.

Guy buys a house in Toronto and pays off the mortgage in 3 years by working all of the time, living in his basement and spending little to no money.

And people are angry?

But after CBC News reported Cooper’s story late last year, reader comments flooded the internet, either praising or reviling the 30-year-old’s financial achievement.

“What is he going to do next, buy a car and sell one of his kidneys to pay for it?” snarled one reader.

An era of cheap interest rates has helped ignite an escalating and troubling household debt binge. The topic has become such a touchy one it can spark polarized opinions, finger pointing and even contempt.

Read the full article here.

Canadian Stocks and Oil Slides Further

On the plus side, gas prices are cheaper.

On the negative the side the Canadian economy is getting whacked by the slide in oil prices.

It’s been nine straight days of losses in the S&P/TSX, which is down 7.4% in that time.

Analysts at Morgan Stanley projected Brent oil may slump to as low as $20 a barrel on strength in the dollar. Brent dropped 6.7 percent to $31.32 a barrel in London. Bank of America Corp. cut its average 2016 Brent forecast to $46 a barrel from $50.

“Risk appetite will not return until we start to see crude carve out a bottom,” said David Rosenberg, chief economist and strategist at Gluskin Sheff & Associates Inc., in a note to clients.

The S&P/TSX fell 1 percent to 12,319.25 at 4 p.m. in Toronto. The gauge capped a 20 percent plunge from its September 2014 record on Jan. 7, hitting a magnitude in declines commonly defined as a bear market. Canada was the second Group of 7 country to see its benchmark enter a bear market, after Germany’s DAX Index did in August.

Are you selling, buying or staying put?

Read the full article here.

What would be the ideal housing economy?

What’s ‘fair’ when it comes to housing?

Should you be able to purchase a home in the town where you were born using only income from an average local job? Or would efforts to bring a level of equality to the buying side unfairly take gains from those wise or lucky enough to have bought at the right time in the right place?

A recent report from San Francisco says that the average millennial can only afford 135 square feet of housing, the lowest buying power in the country.

We’re assuming numbers for Vancouver wouldn’t be a whole lot more hopeful for millennials wanting to buy a home.

But these are numbers for San Francisco and Vancouver – there are a huge number of cities in the world that have better options for most any subjective criteria you could name: culture, food, climate, etc.

If you’re priced out, what’s so horrible about moving and exploring new options?

In the first world, we’ve had the right conditions for a rising housing market for more than a decade now – prices have gone up all over, in some place more than others.

Is this ‘fair’ to those left out, who didn’t have the ability at the right time to buy?

On the flip side is it fair to those who stretched and saved every dime to purchase a home to have people wishing for it’s value to drop?

If you were king of the universe and could control the market what would be the best case scenario not just for you, but for society and the economy as a whole?

 

Vancouver the 17th best city in BC

When it comes to job market opportunity the city of North Vancouver does well at a respectable 3rd in the province. Here in Vancouver we come in as the 17th best city in BC.

For the second year, BC Business has ranked 36 communities in B.C. based on their job markets.

The publication looked at core economic indicators – average household income, income growth, population growth, unemployment rate, people with degrees – and added a new indicator of average household income for the under-35 demographic.

Peter Miron, senior research associate with Environics Analytics, who compiled the data for BC Business, says measuring income for the under-35 age group “is a good way of measuring the overall economic health of a community.”

Read the full list and original article here.

Resolve to make 2016 the year of the Emergency Fund.

What’s in your emergency fund? Do you have cash on hand to get your through unexpected lean times?

Rob Carrick over at the Globe and Mail think’s it’s time to focus on building your emergency fund in 2016.

Now seems an opportune time to return to the emergency fund theme. The Bank of Canada indicated last week that it would consider using negative interest rates, an extraordinary measure already in use in some European countries, if the economy worsens significantly. Governor Stephen Poloz believes the makings of a recovery are in place, and he doesn’t expect to have to resort to negative rates. And yet, oil prices last week hit their lowest point in six years.

I took a look at our household emergency fund recently and decided we needed to up our game. How about you?

Definition of an emergency fund: Money sitting in a high-interest savings account at a bank or credit union. These accounts are insulated from the ups and downs of the stock and bond markets, and easily accessible online. Interest rates are pitiful on these accounts, but the emphasis is on safety over returns.

Read the full article here.

Property tax warnings sent out.

Space889 added a link to this story: BC assessment is sending out warning letters to a few thousand property owners whose property tax is going up.

“Increases of 15 to 25 per cent will be typical for single-family homes in Vancouver, the North Shore, Burnaby, Tri-Cities, New Westminster, Richmond and Surrey,” says B.C. Assessor Jason Grant.

It should come as no surprise that as property values rise their taxes may too, but it’s worth noting that doesn’t necessarily mean more money in government coffers.

That’s because property taxes here are based on a properties value in comparison to its neighbors, not the properties absolute value.

Why are mortgage rates rising?

Southseacompany linked to this article: Why are Canadian mortgage rates rising?

Mortgage rates have inched up slightly lately for apparently no real reason, what’s with that?

Canadian mortgage rates moved higher again last week but it wasn’t because of new economic data or rising bond yields. Instead, one large lender raised rates and everyone followed, repeating a cycle that we have seen several times lately.

Read the full article here for the full analysis.

Rising home prices keep Canadians from starting families.

Bull! Bull! Bull! pointed out this article in the Vancouver Sun.

The ratesupermarket.ca survey of 1,700 Canadians found 52.8 per cent of Canadians overall cannot afford to start or expand their families, with 46.4 per cent of millennials sayings their existing debt was making it impossible, even before considering a mortgage.

Benjamin Tal, deputy chief economist with Canadian Imperial Bank of Commerce, thinks there’s no question household formation is being impacted by prices. “Common sense tells you it makes sense. We have an affordability crisis in large parts of the country. In these types of cases, people either stay in the basement (of their parents) but they definitely don’t buy a house. We know in the United States for sure this happened.”

Infrastructure in cities has not kept pace with density, as evidenced by some Toronto condominium developments posting signs warnings parents that their children might not be able to get into local schools because of overcrowding.

As Bull! Bull! Bull! points out, that’s not really a big deal because Vancouver isn’t a family town anyways:

that’s ok. young ppl can live in condos, ride bikes, instagram their breakfast, experiment with facial hair, smoke lots of pot and generally act like they never moved out of residence. (showers are optional). they’ll be happier anyways.

Read the full article here.