Archive for the ‘predictions’ Category

Bob Rennie urges Vancouverites to give up

Wednesday, May 20th, 2015

The owner of a condo marketing company in Vancouver is urging young families to give up on the dream of a single family home and embrace density.

According to Rennie, whose company was involved in high-profile projects like Vancouver’s Olympic Village and the redevelopment of the historic Woodward’s building, planners need to create a lot of density at once in order to drive down prices.

“I know nobody wants to hear that, but unless we’re going to take a big broad brush stroke and add a lot of density, we’re in trouble,” he said.

Read the original article over at the CBC.

Let the grandkids solve the TFSA problem.

Wednesday, April 22nd, 2015

If you’re someone who has your money somewhere other than Vancouver real estate you’re probably familiar with the TFSA.  And you probably know the limit has just been doubled to $10k a year.

Critics say this move only helps the wealthy and creates a future tax problem.

Joe Oliver says we should leave that problem for the PMs grand-daughter to solve.

On Tuesday’s The Exchange with Amanda Lang on CBC News Network, the finance minister told Lang that criticism of his recently unveiled budget is unfounded, arguing that the benefits for Canadians today more than offset any future revenue problems associated with it that may or may not ever come to pass.

The doubling of the TFSA limit to $10,000 per taxpayer every year was a core plank of Oliver’s balanced budget. But critics including the opposition parties and private sector economists have said the populist move will create a revenue problem for governments down the line, as more and more investments get protected from taxation.

So what do you think about the TFSA limit increase? A tool only for the wealthy or a bit of extra help for savers?

No More Hospital in Downtown Vancouver?

Monday, April 13th, 2015

A couple of weeks ago VCI commenter Corrupt in Canada linked to a story over at VanCityBuzz reporting that BC NDP MLA Spencer Chandra-Herbert was upset the provincial government was on the verge of reneging its promise to revitalize and expand St. Paul’s Hospital.

Three years ago Premiere Christy Clark pledged half a billion dollars to improve the hospital, but nothing has been done to this date.

In the original article VanCity Buzz reached out to the BC Ministry of Health who had this response:

Government remains firmly committed to revitalizing St. Paul’s Hospital. St. Paul’s Hospital is an important part of the network of hospitals in the Lower Mainland, serving a large and growing population from downtown Vancouver, and from across the region. We are continuing to work with Providence Healthcare on the best way to revitalize the hospital for the communities it serves. We must make sure that this fits within the future long term vision of health care in the region and across the province, focusing on more comprehensive community services and a partnership between Lower Mainland hospitals.

We must also ensure that St. Paul’s Hospital can continue to serve the community while the revitalization project is underway.

So we know that most of you will be utterly surprised that Providence Health Care just announced that St. Paul’s will be closed and a new facility will be built in East Van.

Shocked even!

The west end MLA took his disappointment over this announcement to twitter:

St. Paul’s Hospital proved it’s worth during the Stanley Cup riots. Viaduct, bridges, + Skytrain all closed. No way out of downtown. downtown Vancouver needs an emergency room, especially in an emergency. In an earthquake all exits out of downtown may be closed.

Of course there may be a much better use of the land the current hospital sits upon: CONDOS!

Plus new hospital in East Van just has to drive up property values there right?

Win-win.

 

Where’d yo job go? Build or perish.

Tuesday, March 31st, 2015

Good news!

There was a big jump in full time jobs in February!

The bad news?

Some people think this is ‘unsustainable‘ because most of the jobs were in construction or ‘public sector’ and the recent drop in oil prices may have an effect on these parts of the economy.

Screenshot 2015-03-29 18.03.24

 

But in the meanwhile if you’re looking for work and want to know who’s hiring find your nearest construction pit or government office.

Read the original article over at wolfstreet.

About that BOC / IMF conspiracy…

Monday, March 23rd, 2015

Now normally when you hear about a conspiracy lawsuit against the Bank of Canada, the International Monetary Fund and the Queen of England you would assume Lizard People are involved right?

But in this case the government has already exhausted all but one chance to have the case thrown out and their last chance expires in the next week.

Is it possible the tin foil hats might have something here? Certainly it helps that their lawyer has a history of winning unlikely cases.

So what’s it all about?  Here’s what the Epoch Times says:

Toronto-based COMER and its fellow plaintiffs Ann Emmett and William Krehm are suing over fundamental changes to the Bank of Canada’s role that were made in 1974 when the bank stopped making loans to the government.

The Bank of Canada (BoC) was founded in the Great Depression and played a major role loaning money to the government. It helped finance Canada’s war effort during World War II and could loan money to the government, without interest, if it chose to do so. Any profits the BoC made were returned to the government minus the Bank’s operating expenses. That last point remains the case today, with $1.7 billion sent to the Receiver General annually.

COMER alleges that by no longer providing these loans, the Bank and others named in the suit have forced the government to finance budget deficits by borrowing from private markets and paying hundreds of billions of dollars in interest. Last year, $28 billion—over 10 percent of the federal government’s $277 billion in expenditures—went to servicing the debt.

That’s more than what was spent on National Defence ($21.5 billion) and nearly as much as the Canada health transfer ($30.5 billion).

The Bank of Canada Act allows, or as COMER alleges—requires—the BoC to give the federal government loans up to a total value of one-third of the government’s predicted annual revenues. For provincial governments it is a quarter of those revenues. The loans have to be repaid within the first quarter of the next fiscal year. At that point, the government just needs to pay back the loan with incoming revenues, and take out another loan to make up any deficit.

So in essence, unless our translator has the lizard people language interpretation incorrect, this case is about the national debt and the Bank of Canada’s failure to loan money to the Government of Canada for free.

What do you think? Lizard People are coming to eat your children of something is going to change?

Read the full article here.

Are you ready for higher interest rates?

Tuesday, January 27th, 2015

That seems like a really weird question as rates continue to drop.

But over at the Vancouver Sun, Barbara Yaffe says ‘Prepare now for interest rate shock‘.

On top of the Bank of Canada recent surprise .25% rate cut there are a number of people predicting another cut coming this year, so why worry about interest rates at all?

The size of the average mortgage on a dwelling in Greater Vancouver is $400,000, reports Jeff Johnson, mortgage broker at Cloverdale-based Dominion Lending Centres Canadian Mortgage Experts, with offices in B.C. and Alberta.

That jumbo figure is based on the average 2014 value of a Vancouver property, $801,000, and a Canadian Association of Mortgage Professionals survey last year showing the average equity position assumed by borrowers is 50 per cent.

Johnson notes that if interest rates rise in 2015 by even just half a percentage point, monthly payments on a typical variable rate $400,000 mortgage could increase by $100 to $1,872.

“And this is the best case scenario, as rates could continue to slowly increase (thereafter).”

Elyea points out such increases would be coming on top of 2015 hikes imposed on B.C. residents for MSP premiums, car insurance and BC Hydro.

And it is worth remembering British Columbians have more modest employment earnings than elsewhere in Canada. The B.C. average weekly wage last year was about $890, compared to $940 across Canada.

Ok, sure. But we know all that already. How long have we been hearing the warnings about ‘being ready’ for rate increases while they just stay down at record lows or continue to drop?

It’s like that old story ‘The Boy who cried Wolf’.  Eventually the villagers get sick of hearing all the false warnings, learn to ignore them and live happily ever after.

RBC first to cut mortgage rate

Monday, January 26th, 2015

Last week when the Bank of Canada announced their surprise rate cut none of the big banks seemed to be in a rush to announce lower lending rates on mortgages.

We asked which will be the first lender to lower mortgage rates and now we have the answer:

RBC is the first to cut mortgage rates as bond yields plunge.

Royal Bank, the country’s second-biggest lender by assets, offered a five-year fixed rate of 2.84 per cent on Jan. 24, down from 2.94 per cent last week, according to rate-tracking website Ratespy.com. That’s below RBC’s posted rate of 4.84 per cent. The bank also trimmed its three-, seven-, and 10-year rates, according to CanadianMortgageTrends.com, an industry news website.

Race to the bottom or just a good time to renew?

BOC chops rate in race for bottom

Wednesday, January 21st, 2015

If you’ll recall you’ve been warned many times by a number of government talking heads that rates could go up at any time.

Today the Bank of Canada finally took action and cut rates by a quarter from 1% to 0.75%.

Speaking to reporters, Mr. Poloz said the oil price drop is “unambiguously bad” for the Canadian economy, prompting the bank to take out what he called an “insurance policy” against future risks, such as weak inflation and a household debt squeeze. But he denied the move was calculated to send the Canadian dollar lower.

“Market consequences will be what they are,” he said.

The rate cut sent the loonie plummeting below 81 cents (U.S.).

Mr. Poloz, who acknowledged that oil dominated the bank’s discussions leading up to Wednesday’s rate decision, said he’s ready to cut rates again if prices fall further.

“The world changes fast and if it changes again, we have room to take out more insurance,” he said.

The rate move, which few analysts anticipated, is an attempt by Mr. Poloz to shield highly indebted Canadian households from an oil-induced hit to their jobs and incomes – signs of which are already evident in Alberta.

In the comments section here, Dave asked the question: How much of the BC economy is tied to Oil and Alberta?

I would like to know how much of a hit the damage to Alberta will be to BC. It seems to me that everybody underestimates the economic impact. I think our statistics don’t capture the role of Alberta in our economy. I think I read that Westjet estimated 5,000 people in the Okanagan work in the oil patch. And that’s just them trying to estimate things for their benefit (i.e. people who buy plane tickets). How many work from home on their computers? Or only make a few trips per year and don’t get picked up the radar? How many work in the Okanagan but for companies that service the oil patch? Add it all up and there is a LOT of employment related to Alberta.

 

Deutsche Bank: Canada is 63% overvalued

Tuesday, January 13th, 2015

If there was a competition for ‘most bearish outlook’ on Canadian real estate Deutsche Bank would take home the prize.

When local banks say real estate is overvalued in Canada they usually go with a safe 10-20% figure.  The Bank of Canada recently said 10-30% overvalued which is pretty damn bearish, but not quite as extreme as this.

Research by Deutsche Bank chief international economist Torsten Slok even manages to out-bear the Economist Magazines estimations:

Broken down, Slok sees the market as being 35-per-cent overvalued when compared to incomes, and 91-per-cent overvalued when compared to rents. That’s a more bearish assessment than most. The Bank of Canada estimates the market is overvalued by between 10 per cent and 30 per cent.

But those are similar numbers to those at the Economist magazine, which for years has been calling Canada’s housing market overvalued. It pegs the overvaluation at 32 per cent, when compared to incomes, and 75 per cent, when compared to rents.

“Canada is in serious trouble,” reads the title of a chart from Slok’s report, showing Canada’s household debt, as a percentage of income, climb to 50 per cent above current levels in the U.S.

See the charts and read the full article here.

 

How to prepare for interest rate hikes.

Tuesday, January 6th, 2015

We should be well and deep into the ‘boy who cried wolf’ territory by now.

How long have you heard warnings that interest rates may be going up?

We’ve all become so used to hearing that it’s going to be a big surprise if they do.

The CBC has an article that says interest rates will go up this year and here are 4 ways Canadians should prepare.

#3 is ‘don’t rush to buy a home':

Higher interest rates could also lead to a correction in the housing market.

“The big issue as far as I can see is that people panic and think they have to get into the housing market before interest rates climb. But they have to recognize the overall long-term impact of interest rates actually climbing,” says Laurie Campbell, CEO of Credit Canada Debt Solutions.

Homebuyers who rush out to purchase homes to beat a spike in rates could end up with homes dropping in value.

“I think people have to be vigilant about any big purchases they may be making in the next little while. Housing in particular,” Heath says. “If someone is considering purchasing a house, they have to really look at more normal interest rates during their budgeting.”

Read the full article here.

VCI Network

  • Take a Peak.

    The Vancouver Peak Discussion Forums are now open for collecting stats, sharing data, etc. Please register at the new site and let us know what you think.
Leap to comment form