Category Archives: opinion

Why does the foreign buyer tax only apply to Metro Vancouver?

Some people love the foreign buyer tax, some people hate it, but at least one person thinks it was a conflict of interest for the finance minister to enact it only in Metro Vancouver when he owns investment properties just outside that boundary:

 

The one home and six investment properties that belong to Mike de Jong in Abbotsford are worth almost $1 million – a significant investment that rose in value relative to similar properties inside Metro Vancouver, records suggest.

That puts de Jong in a conflict of interest when handling the province’s controversial real estate file, says Duff Conacher of Democracy Watch.

“Given that the finance minister has significant real estate investments, I don’t think he should have been taking part in this,” Conacher said.

“He would have to recuse himself or sell his properties. It has to be one or the other. He can’t have a private interest and take part in decisions about his properties.”

But de Jong tells CTV News he had nothing on his mind except doing his job when he moved and voted for the tax in the B.C. Legislature.

“The decision was based exclusively on the analysis of the data,” he said outside a Liberal caucus meeting.

Read the full article over at CTV news.

Poloz: HCG problems ‘idiosyncratic’ and contained

Bullwhip29 pointed out this article in the financial post where Bank of Canada governor Stephen Poloz says that the troubles at Home Capital are ‘idiosyncratic‘ and contained:

Poloz said the central bank saw no signs that Home Capital’s deterioration had triggered contagion, according to an interview with the newspaper on the sidelines of the Group of Seven meeting of finance ministers and central bankers in Italy.

“We’d be looking for signs that there are problems with the (financial) system as opposed to preoccupying ourselves with individual institutions,” Poloz said.

He also has some stuff to say about the housing market in general:

Poloz also reiterated in the interview the central bank’s view that recent house price increases were not sustainable, and echoed previous statements that some speculation appeared to be at play in the market. He added that did not mean a major price correction was in store.

“Often, when you have a truly unsustainable housing market, you will see very rapid price increases (and) very rapid credit growth,” Poloz said. “But we don’t see that in the credit side, so I do think a significant amount of this that is fundamental, but layered on top, is a speculative element.”

Read the full article here.

We’re all super-high on housing

From southseacompany, confidence in the Canadian housing market has reached a record high:

“The experts are getting louder in their warnings that a housing bubble has formed in some parts of Canada, but Canadians don’t seem worried.”

“In fact, confidence in the housing market hit a record high in the latest weekly Bloomberg-Nanos index — even as respondents turned negative on their own personal finances.”

“The survey found 48.5 per cent of Canadians expect house prices to rise in the next six months, the highest level recorded in the survey since 2008. Fewer than 11 per cent expect to see house prices decrease.”

Read the full article over at Huffington Post.

The correlation between interest rates and speculation

Bank of Canada Governor Stephen Poloz has said he doesn’t think there’s a strong correlation between interest rates and speculation, claiming even a 5% increase in rates wouldn’t have an impact on real estate speculation in Canada.

Over at BetterDwelling.com they disagree with this thought:

It was almost stupid to not buy property at these rates, since it was almost free money. This didn’t just give speculators more capital, it created speculators out of people that would normally not be able to play the game. These aren’t Bay Street suits with wads of cash. Everyone from your barber to grocery store clerks are turning into real estate speculators. Cheap rates, a larger qualified buyer pool, and the expectation that you can always make money, turned shelter into lottery tickets.

Read the full article here.