A Few Charts

– from mybudget360.com

Sometimes charts say it all.
– ed.

84 responses to “A Few Charts

  1. All of Canada is in a bubble, not just Vancouver. The coming collapse in RE prices will kill several industries, strain banks, and spur a negative wealth effect, leading to a severe recession.

    The debt however will remain…

    • You might want to save this for AFTER it happens. It is actually better to say I told you so than to leave a trail of remarks like these for a few years down the road. Cause if it doesn’t happen you won’t look so good.

      • I may be proven wrong. So what? Do you think I care? The future is unknowable, and no one can be held to account for what it brings. All you are accountable for is your reasoning.

        Take a position, man. Grow a pair.

      • Dude, my position is pretty clear. I made it on our bet. That detached housing in the four areas that I researched (vancouver, burnaby, richmond, west van) will be higher in your time frame than the date which we bet on. That’s as clear as it gets, what the criteria is, what the numbers need to be. None of this, might happen, might not happen type. In fact, there are even sampling sold data in these areas from that date to save the mark. We have 1.5 years left. We will see who the real smart person is won’t we, no back peddling now. Btw, I chose that because that would be the most relevant to someone who actually lives here. So far so good for my side. Values are actually higher today than it was on that date.

      • “Everyone is a genius in a bull market!” – Mark Cuban, 1999

        “Only when the tide goes out do you discover who’s been swimming naked.” – Warren Buffet

        “I am a real smart person.” – brian

      • @vreaa You can quote me when the time is up on that bet. But this is a bit premature.

      • @brian: one way or another I think it’s pretty clear you’ve already said it.

    • “I may be proven wrong. So what? Do you think I care? ”

      nah, no one gives a shite. it just tells the readers a lot about your personality.

      • Speaking of shite, isn’t it time to drain your trailer’s toilet again? Get to it.

    • My wife is a doctor and I work in finance. We make a combined $500k per year. We rent a beautiful 2Mil house in South Surrey for less than 1.7% annualized with regards to what the mortgage would be. Meanwhile we have been fully invested in the market for 5 years. Guess what? We made just as much in capital gains as someone who flipped their house. We; however, have put options and stop loss orders in place. I would never EVER keep my liquid capital hostage in a house, unless it’s dirty money and I don’t care about what happens. So go figure…

  2. wow, beautiful charts, good works. Do they say something like…hmmm…you have missed it !

  3. 919 27th Ave E: bought Sep 2016 for $1.55M – and bumped to $2.399M. Has the big word ‘permits’ in the ad. Who knew work with permits could be so expensive – $849,000.00 – in just over eight months! And you thought paint was expensive.

  4. 7729 Elliott St: a Surrey-Style Van Spec with an 18′ high entry. Perfect if you want to hang yourself.

  5. 3539 Eton St: so staged. Lots of buttwipe sheepskins and glass tables; cutesy crap and tons of towels; great view and horrendous howl from the TransCan.

  6. 3443 51st Ave E: bought June 2016 for $1.945M – listed at $1.99M. Buyer’s remorse? Flipper caught holding the bag?

  7. [CBC] – Vancouver real estate magnate donates $12 million in art to the National Gallery of Canada

    …”Rennie, in Italy for the international art exhibition Venice Biennale, says the works are a “gift to the nation to mark Canada’s 150th birthday,” adding he hopes to share them with the world…

    …The National Gallery will be recognizing the historic offering by naming one of its exhibition galleries the Rennie Gallery.

    …Rennie says he approached the decision to part with some of his collected treasures with mixed emotions…

    …Rennie recently stepped down from a controversial role he held as chief fundraiser for the B.C. Liberals.

    …”It’s great to sell condos, but it’s not what we want to be known for (referring to his family). We’d like to be known for changing the arts and culture landscape in Canada.”…

    http://www.cbc.ca/news/canada/british-columbia/vancouver-real-estate-magnate-donates-12-million-in-art-to-the-national-gallery-of-canada-1.4108974

    • I’d make a small bet that the tax break on this donation is greater than what he paid for the art in the first place. ‘Big-name’ art has also been in a crazy-silly bull, all part of the easy money madness.

    • Actually, if you read the article, Rennie isn’t actually donating the art… it’s more accurate to say he’s paying to have an exhibition room in the National Gallery named the ‘Rennie Gallery’, in the vain hope that he’ll be “known for changing the arts in Canada” rather than as a salesman of overpriced boxes in Vancouver who will quite possibly end up having led many young people to financial ruin.

      • vreaa, a shrewd observation. A “donation” is not always what it seems. And when it is not anonymous, the motivations are even more suspect.

      • 1) can you point out the Vancouver people in financial ruin?
        2) at least, the guy donated his bucks to the public interest. what have you done for the public? name it, so the people can honor you. it’s very easy to point the finger behind the screen.

      • #ThousandsFaceFinancialRuin…

      • [VancouverSun] – Leaky condo crisis rears its head again in B.C.

        http://www.vancouversun.com/technology/Leaky+condo+crisis+rears+head+again/9871711/story.html

        [Wikipedia] – Leaky condo crisis

        …”The leaky condo crisis, also known as the leaky condo syndrome and rotten condo crisis, is an ongoing construction, financial, and legal crisis in Canada. It primarily involves multi-unit condominium (or strata) buildings damaged by rainwater infiltration in the Lower Mainland and Vancouver Island regions of coastal British Columbia (B.C.). In B.C. alone an estimated $4 billion in damage has occurred to over 900 buildings and 31,000 individual housing units built between the late 1980s and early 2000s, establishing it as the most extensive and most costly reconstruction of housing stock in Canadian history.[1]

        Similar infiltration problems have been reported in highrise buildings and schools, as well as in other climatic zones in Ontario and Nova Scotia,[2] in the United States,[3] and New Zealand.[4] Since the start of the crisis it has been commonplace to see occupied buildings draped in scaffolding and protective tarps as the problems were assessed and repaired.[5][6] The crisis has caused, as a major public inquiry concluded: “a litany of horrific experiences, personal tragedies, and dashed dreams” endured by homeowners.[7][8][9]”…

        https://en.wikipedia.org/wiki/Leaky_condo_crisis

      • “We’d like to be known for changing the arts and culture landscape in Canada.” – The “Condo King”

        #MissionAccomplished…

        [GeorgiaStrait] – Vancouver artists struggle with studio space crisis

        …”Zoning hurdles, property-tax hikes, and endless development mean many Vancouver artists can’t find a space to create

        On a sweltering late-summer afternoon, Naomi Singer, artistic director of the Secret Lantern Society, sat nursing a cup of iced mint tea and fought off tears as she outlined her struggle to find new studio space. After she had spent three years on the third storey of 750 Terminal Avenue, the entire building was converted into storage bunkers. Construction workers were closing in and she desperately needed to move. But to where?”…

        http://www.straight.com/article-249265/struggling-studio-crisis

    • And, BTW, IMHO the idea that people or other entities should be able to buy the naming rights to publicly owned buildings is obnoxious.

      • white_angelo

        “winners” rewrite history … or, might makes right is how we got the queen … money circles tend to be frequented by the worst characters … this is not the prosperity you are looking for … enough, enough, enough … what a strange word? … lolz … are we there yet? … http://tinyurl.com/oj5c2b9

      • Absolutely. Parasite billionaires love marking public spaces by “donating” cash that would otherwise go to taxes.

    • “We’d like to be known for changing the arts and culture landscape in Canada”
      I think he means Ottawa. Hopefully a few pieces make their way back this way, from time to time.

  8. I love bear’s stance – sure I’m wrong in the past, but I’m still smarter than the bull because I MIGHT be right in the future! But don’t call me on it because no one can predict the future, only take a stance based on reasoning which is more than what the bull can do since they have only been right for the last decade. I’m so smart and right!

    Yeap, it’s great sitting out on 300%+ gain and wait for that maybe 50% drop after a decade! Yeap, the crash is coming any time now!

    • Don’t forget, they are all “SEMI”-retired like Ninja sitting on millions of dollars they made.

  9. So far no one has addressed the charts that vreaa posted. They are shocking.

    The first one is indefensible even on the argument that HAM has made Canadian incomes an irrelevant metric. This may be (partially) true on Vancouver’s west side, but it doesn’t hold at the national level. At least not significantly more so that it held in the U.S. — a country that also receives substantial foreign investment. This message in this chart is the reddest of red flags, yet it is shrugged off. It won’t be for much longer.

  10. 1907 River Dr, New West: last assessed at $724K – listed at $1.75M. – a 105-year-old real estate haemorrhage in a weird industrial area below Stewardson Way. Maybe that extra mil is a misprint. You can also get the adjoining vacant lot at a reduced price. Seller has a sense of humour.

  11. 2306 Edinburgh St, New West: a real estate porn experience – getting it in every orifice – Skytrain above, graveyard below, the motordom miasma of Queensborough Bridge in front. Ad is an exceptional pile of over the top capitalized crap. SuperBird Turkey.

  12. 7450 Humm St: a one-year-old staged freak show with the usual butt-wipe sheepskins. A truly awful soulless pretentious clueless nasty build – $3.498M for this garbage – cool street name though.

  13. @El Ninja – for someone who profess such intelligence, I’m surprised that you don’t know why the first chart is possible, given that other people have already done the research on that very topic and published it multiple times.

    Here is a hint – straight bond price moves inversely with interest rate.

    • Space is unable to explain the chart above. Uses “look it up online” copout instead.

      • Because spoon feeding you with such basic knowledge is so much more exciting and good use of my time. Learn to do some research, and actually read some academic journals would do wonders for your future. But then again, that might be asking too much.

      • #PointProven, #CognitiveDissonance, #FakeCFA

      • So you finally admit you are a failure?! Good to see getting past stage 1 here. Now there are still lots of hard work to do!

  14. Regarding the leaky condo crisis, this is a perfect mix of:
    1 – Pre-sales of condo which meant that the developers have absolutely no need for providing quality construction since people will have to buy whatever is built.
    2 – Use of numbered, limited liability shell companies with parent company liability. This means no matter how bad or crap the construction is, buyers have no recourse to sue the actual company that’s responsible, but is rather limited to the numbered shell company. Again, this means developers can do crappy shoddy construction with absolutely no fear of repercussion. If the use of shell companies is removed, and the parent company & directors have to stand behind their product, quality would increase a lot. Look at commercial office buildings, how often are they under the tarp? Very few, because proper maintenance and high construction requirements & standards.
    3 – The over zealous environmentalist that have taken over the city & provincial regulating bodies. We are using various standards suitable for a very dry arid climate in a rain forest in the name of energy efficiency and green. Well, guess what? If you seal up a building, don’t allow it to “breath” in a wet climate, and add in low construction quality, leaky condo is exactly what you will get. Actually, even with high quality construction, the lack of breathability means moisture build-up due to natural forces are accumulated and without a way to disperse, results in molds and water damage.

    Without fundamentally acknowledging we don’t have California weather, and valuing practicality over some pie in the sky “green” / “energy efficiency” religion, leaky condo crisis will simply continue.

  15. Drove family members to visit my uncle at his senior care home, and met his agent who sold his condo last year. According to the latter, similar units are now selling $150k – $200k more. Not offering any opinion here, just passing on what I heard.

    Some musing that our local media will neither confirm nor deny – that Vancouver’s singular Gadaffi after crossing the HongKong border, immediately telephoned his “wife” surnamed “Zhou” who lives in Vancouver with their “son” – at the Point Grey $40-million-mansion perhaps. They own many properties in Canada, most likely using shell companies or 3rd party arrangements.

    But HK media said he crossed the border voluntarily accompanied by a wife, and she later returned to HK en route to Japan. The plot thickens, when Charles Ho, Chairman of Sing Tao News Corp, reveals to the media that the missing 45-year-old Canadian-Chinese billionaire Xiao has between 54 to 56 kids. No kidding!

    Well, Mssrs. Mulroney and Trudeau have to wait a bit longer for the return of the prodigal son. Apparently, China turned down his offer of $1 Billion in mitigation of whatever “…(fill in)….”. His financial empire is said to be over ? trillion yuan.

  16. Notice how meteoric rise in U.S. household debt synced perfectly with that country’s housing bubble and ensuing meltdown:

    http://libertystreeteconomics.newyorkfed.org/2017/05/household-borrowing-in-historical-perspective.html

    But as all bien-pensants know, Canada is different. Canada is special. We are a paradigm shift!

    • Let’s change this blog to creaa… (canadian real estate anecdote archives). Cause the forced affecting canada is exactly the same as Vancouver. Which is why Alberta’s real estate is going bananas right now.

      • Let’s not be children and acknowledge the fact that Vancouver exists within a larger economic, cultural, and political environment known as Canada. The RE in every major Canadian city is overvalued, to varying degrees, because each is subject to broadly the same influences. Vancouver simply tops the list.

      • “because each is subject to broadly the same influences.”

        Right, guess I missed the millions of asians coming to canada to make canada 50% asian in 15 years. Where did they all go?

      • Got that, folks? Forget rents, employment, incomes, interest rates, government policy, housing starts, household debt, the economy, pop culture, media bias, and everything else. It doesn’t matter.

        “Asians” is all you need to know.

        We needn’t toil in complex thinking. Brian has enlightened us with the real estate equivalent of a Theory of Everything. I see a Nobel prize in his future.

      • Right, cause these other factors has sure as hell explained how in the hell did we achieve 300% price gains in detached markets when in the same period the canadian detached market hasn’t even doubled. It’s all interest rates right? Cause we all know that rates are higher in Halifax than in Vancouver.

      • “Forget rents, employment, incomes, interest rates, government policy, housing starts, household debt, the economy, pop culture, media bias, and everything else”

        As a matter of fact, can you use any of these factors to explain to me why Vancouver is so out of whack against the rest of the country? If we are similar like you suggest then winnipeg and us should be somewhere in the same neighbourhood in terms of percentage of rise.

      • The trees in this forest are all tall, but one is taller than the others. Precipitation and soil conditions are therefore irrelevant.

        #BrianLogic

      • The trees in the forrest are all tall but one is three timers taller than that rest, we shouldn’t figure out what is different about that one and assume the same soil conditions produced that one even though it is the same soil as the rest of trees. #NinjaLogic

      • The common denominator to real estate bubbles everywhere has been cheap debt, speculation, and herd mentality. It has not been rich foreigners. They have exacerbated the problem in Vancouver, but are not its root cause. Without these preconditions, it would scarcely matter that Chinese money were coming into the market.

      • Sorry, beg to differ. It’s like saying water lift all boats but then a tidal wave came at one beach and the boats there are higher. Even if the water didn’t lift all boats this tidal wave would have still come. What I am trying to figure out is if there are more waves coming or is the waves going to recede which is clearly your opinion.

      • You should look at national-level statistics and see if RE prices are high in relation to economic fundamentals. If they aren’t, and if the “tidal wave” was restricted to Vancouver, ask yourself how that could be?

      • are*

      • Ok, i am going to try to interpret what you just said.. national prices are high compared to fundamentals, correct. Vancouver prices are ridiculous compared to fundamentals, also correct (we are number 2 in the world). Tidal wave is restricted here, correct as far as canada is concerned but also happening in London, LA, Sydney etc. But in those locations the effect has been less because they are much much bigger real estate markets. As to why we got hit with this tidal wave whereas say winnipeg didn’t, well… maybe because of this demographic shift that we are seeing? Put it this way, name me a high percentage (above 30%) chinese city in the world that doesn’t have ridiculous price to fundamental ratio. San Fran probably has the best ratios of any cities with that description and it is apparently in a bubble according to you. Come on, I know interest rates have an effect but does it have such an effect that we are number 2 in the world in terms of unaffordability?

      • #GoingInCircles

      • #Ithinksotoo
        #goodnightninja
        #dontspendalldayhere

      • Low interest rates + A good story

  17. Is El Ninja Patriotz in disguise? Seriously, you too sound exactly the same. Maybe you should go educate those bears on VCI that also insist it’s only the dirty corrupt locust scum from China that’s ruining Vancouver and causing the prices to be so high.

    • I waste enough time destroying your arguments here on vreaa to have another handle on some other site.

      • Given the track record of your predictions, you might want to leave the part where you “destroyed” his arguments to others to comment. It’s kind of useless to say that your arguments are better when you are the one saying it.

      • And you might want to actually contribute something to the discussion instead of trolling me constantly.

      • We all know that telling someone that they have “destroyed” their argument is a real contribution to the discussion. Btw, why don’t you respond to the thread below about S&P 500 instead of replying to my “trolling”.

      • yeah, el nino destroyed everyone here with his abundant of saliva. unfortunate for his family, he did not put his abundance of resources to good use. that is why he is still landless…

  18. Btw, you know what else went up with debt level in US? S&P 500!

    • And your point is…?

      • His point is quite simple. If the premise of your argument is that housing market is high since money is cheap then you can argue the same thing that the stock market is high since the money is cheap. And so if that is the case, and you are so sure housing market will come down once money becomes expensive then stock market should also come down. So why are you so sure of one and not the other is his question. You can’t simply say one set of buyers are smarter than the other set because frankly both are fueled by money supply according to you.

      • One investment is typically levered, the other typically isn’t. So price declines in one are generally more damaging than in the other. Moreover, neither investment must necessarily be held by anyone; there are other uses of capital. So it’s a false choice.

        Would it help if I drew you a picture?

      • The leverage argument is weak but partially true. Though there is a lot of margin trading that goes on in the stock markets not to mention that the derivatives markets are highly leveraged instruments and a downturn in these instruments would have an impact on the underlying investment. Not to mention that the total value of US stock markets and the total value of US housing markets are not that different.

        Now, no one asked that you invest in them however, would it not imply from your arguments that as stock market has also been powered by cheap availability of money it would also contract with an eventual contraction of money supply? Because remember you said that the primary cause of the housing market rise is cheap credit, it can also be argued that the stock market has been fueled by the same thing.

        I love your attempts at implying that you are more intelligent, good try. Too bad I am not a visual person. But with all that SEMI-retirement time maybe you can draw it out in stick figures and post it here.

  19. 1304 35th Ave E: Why we hate real estate rodents – first word in the list is Custom. That’s a lie. It’s another repellent Van Spec Dreck. Twice the rodent says says it’s a stunning new house. That’s a lie. It’s over 5 years old. Rodent says there are two suites in the basement. Yes, but one is illegal.
    This piece of garbage, without a laneway house, in a marginal location, is listed at $814,000.00 over last assessed. Garbage on a small lot – a vomit-inducing pile with ceilings pockmarked with potlights, dismal dark particle board cabinetry, and vile pink and blue pastel bedrooms. A thoroughly repulsive piece of shit. That goes for the house too.

  20. 919 27th Ave E: his one and only listing – a traditionally reviled 70’s Van Spec – hot rodded to the tune of $783K over last assessed. $2.399M for this crud without a laneway – not even a garage – in a marginal location.

  21. #El Ninja – So basically, your arguments boil down to: I invest in stock market so stock market is a-ok, and rational and all great. I want a cheap house in Vancouver but I can’t afford one, so Vancouver housing market is totally overvalued and in a bubble due for a big correction.

    Wow..such insight and knowledge.

    btw, if you own bank shares, you are basically buying a 10x to 30x levered investment. So much for stocks aren’t leveraged argument. 90%+ of stocks are basically leveraged investments, even if you bought it for cash. Now add in things like margin, 130/30 type strategies, futures, options, & derivatives and it’s worse than the housing market. You are just given the illusion there is no leverage.

    Again, go and read some basic academic papers, and textbooks or even those cheap CFA study material after June exam before opening your mouth again, and lecturing others on how stupid their arguments are.

    • The truth hurts, but grown-ups deal with it. Space wants others to shut their mouths so he doesn’t have to hear it. Next he’ll cry for mommy Brian.

      • Hmm.. notice how you didn’t even address what space said.. that’s real contribution to the discussion here. Care to refute his leverage arguments in stocks? Who is desperate to shut others up?

        Anyone who has thought about attempting a CFA would know based on space’s posts that he has gone through the curriculum. You, on the other hand, sounds like my aunt and uncles who have no idea about investments so they try to sound smart by saying, just go with the market. I do just that btw when I invest in index funds but I wouldn’t attempt to say I am somehow smarter than a real CFA.

        @vreaa, what did we say about stopping the name calling? Some people never listen on this board cause when their reasoning is up they resort to calling other people mommy. That’s ok, if I am half as strong as my mother I would be pretty awesome, so thank you for calling me that.

      • #LikeClockwork

      • #CatsgotNinjastongue

      • Brian can dish it, but can’t take it. Runs to Principal vreaa to tell on me.

  22. 2756 43rd Ave E: a reno-rodded 54-year-old p.o.s. July 2014 – $820K; July 2015 – $1.035; last assessed – $1.397M; listed at $1.699M. A dismal location at the head of a nasty T intersection. Unpleasant. Massive illegal deck cover. If your neighbour complains – it’s gone. No garage. A squat old lipsticked box that will make you feel small. Until vehicles come up Rhodes Street and you will be unnerved. The line of $20.00 Home Depot cedars won’t help.

  23. 2505 Georgia St E: Turbo Reno – bought Nov. 2016 for an even mil – listed at $1.699M. Doesn’t have the magic words like replumbed, rewired, or permits. But nice to see that this 108-year-old house escaped the clutches of a builder.

  24. 2306 28th Ave E: at $1.199M and facing Brock Park, this seems like a good deal. Nowhere does the agent indicate that this is half a house – the dreaded duplex. That is thoroughly slimy – the quintessence of slime scumbaggery. There is also a huge stream that passes under the park and possibly directly under this turkey of a deal posted by a soulless vulture. A turkey vulture worthy of disdain.

  25. Three-quarters of Canadian mortgage holders would be unable to manage a modest increase in interest rates.

    Three. Quarters.

    http://www.vancouversun.com/business/mortgage+worries+flagged+manulife+bank+poll/13391163/story.html

    Where will they turn to for cash? You guessed it.

  26. I’ll just leave this here:

    An economic analysis released on May 4 by the Desjardins Group predicted that the central bank may increase its benchmark rate by 0.5 percent per year starting in 2019, bringing it to about 2.5 percent by 2021. According to the Desjardins paper, that could mean a two-percent increase in variable and five-year fixed mortgages.

    “It will make it even more unaffordable to buy a property,” Kadi said about the prospect of higher interest rates.”

    http://www.straight.com/news/913576/home-search-twentysomethings-know-interest-rates-wont-stay-low-forever

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