Concerned about the housing market in Vancouver and think something should be done about affordability? You probably believe foreign buyers are partly to blame for running up prices.
You’re probably a racist.
Unfortunately it seems we live in a city full of racists as more and more people express concerns about things like assignment flipping, livable teardowns and empty homes. Or at least you can call them racists in an effort to shut down the discussion.
David Fine writes in the Huffington Post:
We are both assured that foreign investment is actually not a significant issue and at the same time, by the same people, told that any restrictions on foreign property investment would cause serious damage to our home equity, the construction industry and the residential sales industry.
Guess what, it can’t be both! There really is no doubt that foreign property investment is a significant part of home sales in Vancouver and real estate companies know it. They have offices in China and appeal directly to offshore buyers through advertising in Chinese media. It’s big business and it’s fuelling rampant speculation.
This is about foreign money, not foreign people. We have duties and tariffs on all kinds of foreign goods and industries to protect our economy. Why nothing on our homes?
Read the full article here.
What would you call a 20 year old 7300 Sq foot house with brand new hardwood floors and an indoor pool?
In Vancouver we call that a tear down.
Property records show that the 7,300-square-foot house was last sold in 2013 for just over $6 million — the assessment today is $7.44 million. According to the 2013 listing for the property, it boasted $350,000 in recent renovations including new hardwood floors, a water purification system and windows. The listing sheet shows the two-storey house on a corner lot has 19 rooms including seven bedrooms, a media room, office and 12-foot by Seven-foot walk-in closet off the master suite.
…Well, we certainly know how to keep bulldozer operators and city dump workers employed!
Read the full article here.
Patriotz pointed this out in the weekends open topic thread:
Tomorrow there will be provincial by-elections in Van Mount Pleasant and Coquitlam Burke Mtn. Both former MLA’s ran in the recent federal election – for the NDP (won) and Conservatives (lost) respectively.
What do the candidate websites have in common? None of them have anything to say about housing. For example in Coquitlam Burke Mtn which is the only real contest:
However I think this bizarre paragraph by Issacs on “Sharing Economy, Growing BC Tech” is notable:
I will advocate for a Sharing Economy to optimize new services for families – the Ubers, the AirBnBs, the Lyfts. A diverse economy means being open to new ideas and technologies. A Sharing Economy encourages the tech sector in BC, which helps create jobs and generates investment. It starts by giving British Columbians the freedom to participate as entrepreneurs or consumers or both!
So BC’s high tech future is operating your car as a taxi or your house as a hotel!
As the economy deteriorates further Canadians are sitting on a pile of cash. Stock portfolios are holding a record $75 billion in cash.
How do you get people spending and investing again?
Well, you could try negative interest rates.
That kinda worked in the EU. Denmark has driven down their currency which has helped exports. Of course the flip side of negative rates is the risk of housing and stock bubbles.
But how would negative rates most likely affect Canadian consumers? Higher fees.
“What you might see happening is a negative interest rate masquerading as higher fees,” Milevsky said. “No bank in their right mind would tell a consumer, give us your hundred dollars and we’ll give you 95. That will never happen.”
Read the full article here.
Frances Bula has some comments about a recent proposal to tax vacant properties, pointing out the bizarre lack of logic in most arguments against:
… Real-estate marketer Bob Rennie said it would kill foreign investment in everything, since it would inevitably lead to a tax on foreign investment in manufacturing or other sectors. (Never heard of that in other jurisdictions with housing taxes.)
The mystery documents from the finance ministry surfaced again, claiming it would kill off $1 billion and 4,000 jobs related to construction. (Puzzling claim, since this surtax wouldn’t affect, say, foreign investors who are putting capital into major construction projects.)
And Premier Christy Clark claimed again that somehow this could end up targeting seniors who spend part of the year in the hospital or vacationers. Yet the proposal clearly stated that people who do or have contributed to the local economy (in other words, people collecting pensions) would be exempt.
Read the full comment here and Bulas’ article in the Globe and Mail here.
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.
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’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?
It used to be there was a time when shops had sales on the day after Christmas to get people out shopping again and to get rid of their unsold Christmas sweaters.
In recognition of the fist fights that would break out over parking spaces this was called ‘boxing day’.
Then someone noticed that suckers would buy anything that had a big enough sale sign on it so they stretched it out for the full week.
It’s now that time of year, may all your shopping dreams come true, go fill those condos!
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.