Category Archives: hype

Politicians want to solve Vancouver housing problems

Good news!

If you’ve got an idea of how to make housing more affordable in Vancouver, city officials say they’re all ears.

“I think we’re almost at the desperation stage,” said Randy Pecarski, the City of Vancouver’s deputy director of planning. “People are on the verge of leaving the city because they can’t find a place to stay.”

First step: another survey to improve housing affordability over the next ten years.

Read the full article over at the CBC.

Bank of Canada concerned about debt and housing market

The Bank of Canada is still worried about housing debt levels in Canada and joins the OECD in expressing that concern:

The two biggest concerns on the bank’s radar are also intertwined. It said the growth in mortgage lending in Toronto and Vancouver has largely fuelled an increase in Canada’s overall household indebtedness since the bank’s last review six months ago.

“Highly indebted households have less flexibility to deal with sudden changes in their income,” said the bank.

“As the number of these households grows, it is more likely that adverse economic shocks to households would significantly affect the economy and the financial system.”

The document was released as concerns about the Canadian real estate market — domestically and from abroad — continue to pile up.

Read the full article over at the Financial Post.

NDP to review BC first time buyer loans program

The recent BC first time buyer loans program announced by the liberal government has successfully driven condo prices higher by handing out interest free loans from tax payers to first time buyers, but it sounds like David Eby and the NDP want to ruin that party:

“We were told by economists at SFU, UBC, CMHC that the impact of the program would be to increase the cost of the housing stock,” says Eby.

“Essentially a transfer of money directly to developers and people selling their existing homes, and put people further into debt. So if that is truly the impact of the program in Metro Vancouver, then that’s something we want to review and make sure there’s not a better way we could allocate the $700-million that’s been allocated to that program.”

Read the full article over at News 1130.

Why are investors fleeing Canada?

Canada’s economy is booming, expanding at a 3.7% annual rate in the first quarter. And yet…

Meanwhile, in a year when stocks are rising everywhere, Canada’s benchmark index is the second-worst-performer in the developed world after Israel, according to Bloomberg data. It’s a similar story in currency and bond markets.

The performance underscores how, even with the improving economic performance, caution prevails. Investors remain concerned about geopolitical risks such as U.S. trade protectionism, the outlook for oil prices and a housing market that some analysts say may be on the verge of a correction.

“It is a tad curious to say the least that the Canadian economy arguably has been one of the bigger pleasant surprises in 2017 and meanwhile the equity market has done a belly flop,” said Doug Porter, chief economist at Bank of Montreal, who highlighted the disconnect between Canadian growth and market performance in a May 26 note.

Energy shares are down 10 percent year-to-date, while fears about contagion from a run on deposits at troubled mortgage lender Home Capital Group Inc. have weighed on financial shares, which are down 1.2 percent.

Read the full article over at Bloomberg.

What does a Green / NDP government mean for house prices in Vancouver BC?

The Green Party and NDP have announced an intention to form the government of BC and they have some different approaches to the real estate economy than the BC Liberals.

So what does the future look like to you? Will the new government implement some of their more dramatic policy changes and what does this mean for the Vancouver Housing Bubble and the wider BC real estate economy?

Oracle had the following wish list:

1) 30% FBT Province wide. Absolutely No Loopholes.

2) Tax 2nd homes of Citizens an annual property surcharge of 2% with rental offset. 3rd and more homes tax surcharge of 5%.

3) Tax homes of non taxpaying non residents 2%. Tax 2nd homes at 5%.

4) Limit foreign student at any institution to 15% maximum to ease rental crisis.

5) Inteoduce rental tax credit to out tax Evading Landords.

6) Pressure Federal government to limit 10 year tourist visas stays to a max of 3 months per year.

7) introduce extended mortgage amortization periods for those owners who will go underwater with the above changes.

Markoz points out this shift might not be painless for anyone:

Horgan and Weaver Have a Tough Job Ahead.

If they do all the things Eby talked about, real estate prices will definitely come down. The problem is, Krispy has painted our economy into a corner where it is very RE dependent. Lower prices mean lost jobs in construction and related industries. Also, as others have pointed out, lower tax revenues. There are many benefits to lower prices but they may not be self-evident to the 70% who own. Especially people who bought in the last 3 years.

The Krispy alternative, letting prices run amok until a 1 bedroom condo is $4 m, is not an alternative. Still, doing the right thing is going to be very painful and politically unpopular with many.

Dave wonders what’s next for Christy:

I think Clark should make a throne speech and outline what she wants to do for the next year of government and see what happens. Let the Greens and NDP shoot her vision down but at least people know what got voted down. I also think she should also try to split the NDP and Greens, not because it’s politically smart, but because voters should know what their MLAs stand for and support. Small chance she can pull something off, but not likely. I don’t see any ridings or obvious MLAs that the Liberals could split or steal.

Let us know your thoughts on the future of the BC economy and real estate prices in the comments below!