Category Archives: opinion

HALT Rally Recap

HALT_YVR wrote in with a recap of this weekends rally and a link to video of the first 4 speakers:

Hi all,

We just wanted to say thanks to everyone that managed to make it out to our rally this Saturday. Despite the lousy weather, we managed to get 200 people out to make noise about this housing crisis slowly grinding local Vancouverites into dust. We had some great speakers that ran the gamut from average citizens to lawyers, economists, and activists. For those that didn’t get a chance to make it out, here’s a video of the first 4 of our 6 speakers. It’s long at 45 min but well worth the listen: https://youtu.be/h6wRS-fMHi4

We’ll keep you posted on future events that are just now in the planning stages. Expect another event to draw attention to our housing crisis and pressure government in the next two months.

In the meantime like our FB Page to keep up with all the latest updates: https://www.facebook.com/HALTVancouver/

Thanks again for your support,
The HALT Team

Housing Action Rally Saturday Sept 17th 2pm

 

Housing Action for Local Taxpayers (HALT) is a group of Vancouverites whose goal is to pressure government to take action on local housing affordability.

HALT wrote in to let everyone at VCI know they are holding a rally at the Vancouver Art Gallery this Saturday Sept 17th at 2pm.

They have a  great line up of speakers including Christine Duhaime the Vancouver lawyer focused money laundering.

More information can be found on their Facebook page.

Here’s some info from their comment yesterday:

Specifically we are calling on Government to:
– HALT money laundering and tax fraud by individuals hiding their money in our housing market
– HALT Immigrant Investor Programs that bring in owners who do not contribute to our income tax base
– HALT corporate donations to political parties. For too long, our governments have served moneyed interests and not the interests of the citizens of our city and our province
– HALT AirBnB of our rental stock. We need regulations in place to protect our renters
– HALT demolitions of affordable rentals that are being replaced by unaffordable luxury condos marketed to offshore buyers

We’ve got a great panel of speakers lined up including:
– Christine Duhaime, a lawyer heavily involved in catching foreign money launderers in Vancouver
– Josh Gordon, Assistant Professor, School of Public Policy, Simon Fraser University, who has done extensive research on the impact of foreign capital on our housing market
– Dr. Darren Joneson, whose housing story we featured on our Facebook page
– Caroline Adderson, author of the book “Vancouver Vanishes” owner of FB community of the same name, will talk about demolitions of heritage homes, zoning and how we create density in a liveable, sustainable city
– Paul Kershaw, founder of Generation Squeeze, who will talk about the the challenges millenials face in getting into the housing market and Gen Squeeze’s “Homes First” policy.

Please come out, stand up, be counted, and let our government officials know that enough is enough!

Thanks for your support,
The HALT Team

You can find more info on their Facebook page and at haltvancouver.org.

The ‘cry wolf’ club

There are a few organizations that have raised a public alarm over the state of the Canadian housing market, with particular focus on Toronto and Vancouver:

The IMF, The Bank of Canada, The Canadian Mortgage and Housing Corporation, The Office of the Superintendent of Financial Institutions, Most of the big banks, The OECD, and more.

It seems that everyone is freaking out about the Canadian housing market.

Despite industry assurances that the hottest housing markets in Canada, particularly Vancouver, will always remain hot, and that it is physically impossible for prices to decline in this miracle economy, Canadians are now becoming aware that those assurances have just been another load of industry hype. And a larger share of them are starting to grapple with a new reality – a reality in an over-leveraged, inflated housing market where prices have come to rest on the edge of a cliff.

In Vancouver’s once white-hot commercial real estate market, the hunt is now on for Chinese buyers as big institutional investors are trying to unload.

And yet, despite years of warnings here we are near record high house prices. If you bought a few years back and sold a month ago, you’ve done quite well.

So it seems we’re now entering another down phase, with reports of softening sales and prices, especially at the high end. The warnings are getting louder, but of course there are always people who propose that this market is different and will never truly crash.

Sometimes the number of warnings and lack of crash almost seems to prove it – Just like the boy who cried wolf, we start to get desensitized to all the warnings.  Unfortunately for some of the villagers we all know how that story ends.

Canadian economy is doomed

Do low oil prices and a real estate bubble spell trouble for the future of the Canadian economy? Jared Dillian, former Lehman Brothers trader and financial writer is predicting a continuously dropping dollar with a long drawn out housing market crisis:

Unlike the US market, the mortgage market in Canada is not securitized. This means the housing crisis in Canada won’t be quick the way it was in the US (6/2007 to 3/2009).

Dillian says a long, drawn-out “death by a thousand cuts” scenario is in the cards for the Canadian housing market. And, this economic pain will probably last years.

He also notes that nearly all mortgages in Canada are “recourse mortgages” (except in Alberta). This means in-the-hole homeowners are not as likely to walk away as they were in the US housing crisis.

Is this the time that the wolf actually shows up, or just another failed prediction of doom? Read the full article and view the video interview over at Business Insider.

Vancouver Market Summary so far for August 2016

yvr2zrh wrote a good summary of what the market looks like currently, how media headlines can get it wrong and where we might go from here:

With about 9 market days remaining in the month, we can start to look forward to how the month will end up. During the past two weeks, we have seen so many numbers in the media which highlights not only is the market falling but also that the intricacies of the underlying data are not well-understood by so many people.

The message (although correct in that the market is bad) is so poorly explained and supported and thus the true state of the market is not clear to people. So – here is the summary of what is really happening.

1.) Sales volumes will be down around 25% for unit sales but 33% for dollar volume. My model predicts a 10% decrease in condo sales (which is not much).
2.) The decrease in average price across the entire market is driven primarily by mix at this stage. It is not known how much is driven by actual price movement. Likely little so far.
3. ) Detached home sales are down significantly. This is likely more than a 50% decrease from July volumes and could be more than 65% down from August 2015.
4.) It is not clear what the benchmark price will do but we would expect that the condo price is probably almost unchanged. This market is mainly suffering from supply issues which will take time to resolve. Detached benchmarks are likely to fall in the higher-priced markets. The reason is that there will be buyers but only low-ball buyers testing sellers.
5.) The stats will be partially supported by the month-end date cutoff issues at REBGV. They report sales based on the date they get paperwork. Many of the sales recorded to beat the tax will actually show as an August sale, while they are actually July sales. Since these are from a period with a “different regulatory and tax framework” they are not really comparable and should perhaps be shown separately for accuracy purposes.
6.) Inventory will be up a bit but we still have a supply shortage in condos. Detached house MOI will increase to 10 or more.

Ultimately, this tax is taking money out at the top. It will take a couple months to see how it all plays out but the top of the market will now need to rely on move-up buyers and bona fide immigrants who are permanent residents.

We can already see the headlines coming but some of the intricacies of the stats will not really be understood.

I also have some stories from the front lines which I will get more info on next month and then write a more detailed update.

And – let’s try to keep the discussion on topic as much as possible – we have started to waiver a bit in the past few weeks.

Posted by yvr2zrh on Friday August 19th 2016 in the comments section.