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ALWAYS CONSULT YOUR INVESTMENT PROFESSIONAL BEFORE MAKING ANY INVESTMENT DECISION

July 13, 2016 | Enough

A best-selling Canadian author of 14 books on economic trends, real estate, the financial crisis, personal finance strategies, taxation and politics. Nationally-known speaker and lecturer on macroeconomics, the housing market and investment techniques. He is a licensed Investment Advisor with a fee-based, no-commission Toronto-based practice serving clients across Canada.

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Hot on the heels of being flamed on the CBC and Tweeted to within an inch of my virile life, Global TV in BC got in touch to ask for a Skyping, “on your latest blog entry about real estate in Vancouver.†You might recall this was a day or so ago when I said, simply, “get out.â€

Now the Huffington Post wants to run the same posting, word-for-word. Maybe I’ll be blessed with one of those little fuzzy pictures that makes an author look like they work for HuffPost, which nobody really does. They’re all robots. With condos.

Things are actually getting scarier by the day. Media interest in the story of a potential housing flame-out (especially in Vancouver) is one of the distinct signposts on the path to perdition. Of course, by the time most people learn something from the MSM, it ain’t news any more. It’s already happened. Which is why I said earlier this week that – if you need the money, do not wish to lose an unearned windfall gain or are swimming in housing debt – you should get out. It’s time.

Look at the situation since then. On Tuesday, as my cisgendered, misogynist butt was being flamed and I was handing out patronizing warnings to horny moisters, some shocking data was released. In July of 2005 a total of 11% of the detached houses in Vancouver were assessed at over a million bucks. This July that proportion has bloated to 91%. Yikes. In the past 12 months prices have increased 38% on the west side and 26% on the east (where the poor people live). Now Royal LePage has thrown more gas on the fire, saying the average price for a two-storey deteched house in YVR has (according to its realtors) swollen to $2.36 million, up 30.7% in a year.

Two point three million, by the way, is 34 times more than the average income in Vancouver. Let’s compare that to the GTA, where 300% more people live, incomes are higher, there’s an actual economy, The average detached two-story house here costs $975,937 – a 42% reduction from Delusia, yet still the second-hottest property market in the country with the same low mortgage rates and restricted supply of available listings.

Speaking of LePage, the company just can’t help itself. Despite a weakened economy, job losses, oil prices, big bank alarm at house prices, YVR market cracks and galloping debt levels, the house-pumpers say real estate will values will surge 12% this year, nationally. Yep, more gas on the fire. Brexit plus “economic and social disruptions… rocking the world… introducing new risks†will keep interest rates low, the company forecasts, which means “not even a mild correction†in the GTA or the Lower Mainland in 2016.

The message, of course, is designed for Royal LePage agents who need a constant supply of dewy-eyed virginal buyers to keep this party going. It’s also aimed at the moisters themselves, intended to add some further FOMO to the stress they’re already feeling from peers and misguided relatives urging them to “stop throwing their money away on rent†and instead pickle themselves in debt while crawling under far larger home ownership costs.

Now to his credit, LePage boss Phil Soper is saying some of the things that a responsible CEO should utter: “You have severe affordability issues in Vancouver. It has become a serious public-policy issue, so it’s not healthy. We’ve got a market in Vancouver that is appreciating too quickly. Prices are moving upward at an irrational rate.â€

Irrational and unsustainable, which diddling from the province and the city of Van will do nothing to alleviate. Cracking down on realtors and taxing people extra who don’t use their properties is beyond lame. And ineffective. All it takes to wipe away the small benefit is one media release from LePage or Re/Max, telling the kids they can make 12%, no worries, in a year, and the heat’s back on. More fear. More Bank of Mom. More tears ahead.

There’s nothing to add to the points made here this week. No, I’m not Skyping with the anchorettes at Global. The CBC can get along with me. No more fights with kidults who so mysteriously wish to coat their youth with debt and obligation. We’re in cult mode now. Debate is impossible. After all, 91% of people with houses in Van think they’re millionaires. Given what’s coming, I hope they kept their Costco cards.

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July 13th, 2016

Posted In: The Greater Fool

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