Analyst on Global – “Sheer insanity…You’re pricing local, hardworking people out of the market… It’s fueled by a money laundering bubble that politicians, in cahoots with the real estate industry, don’t want to end.”

Speaking on Global BC News Morning, Cohodes made it clear that he has no personal stake in the Vancouver real estate market.
Cohodes said he wants to speak out about the housing market in Vancouver because he feels strongly “people are being taken advantage of.”

The Greater Vancouver real estate board says the benchmark price of a detached home in Vancouver hit $1.56 million in June, which is up 38.7 per cent in one year.
“I think it’s a money laundering-induced market,” said Cohodes. “Where the local politicians, or the BC Liberals, are kept or in cahoots with the real estate brokers, developers, lawyers, that angle. And they have sought Chinese money to keep the market propped up and it won’t last.”
“China has capital controls on and Vancouver has become the money laundering mecca of either the world or North America and something is going to change and change drastically.”
Cohodes said if the provincial government doesn’t step in to change the market, they’re going to be voted out.
“This is sheer insanity,” he said. “What’s going on is you’re pricing local, hardworking people out of the market and as I’ve said before, the housing market in Vancouver resembles the Vancouver stock exchange and penny stocks many years ago and that didn’t end well at all.”
Finance Minister Mike de Jong has said he does not believe Vancouver is in a real estate bubble, to which Cohodes said “he’s full of more crap than a Christmas turkey.”
“The market is ridiculously high and Christy Clark goes and takes real estate people over to China.”
“They have the records,” said Cohodes,” they just don’t want people to really know or they don’t want people to know the truth.”
In a statement to Global News, de Jong said:
We continue to work with both local governments and the federal government to address issues in Vancouver’s real estate sector, particularly to help bring new supply of homes to the market at affordable prices, and acting on concerns about regulation and enforcement. The premier announced last week that the province will end self-regulation of the real estate industry, and further steps aimed at helping make homes more affordable for the middle class will follow in the near future.
Cohodes said he has solutions to fix what the “issues are” but B.C. politicians don’t want to “take the medicine because their livelihoods depend on this.”
According to Cohodes, people who buy in this market will only become “debt servants for the rest of their lives.” He said when Vancouver’s market does tank or collapse, people are going to lose a generation of savings and equity.
“It’s fueled by a money laundering bubble that politicians don’t want to end.”
“At some point, bubbles burst.”
– from ‘Vancouver’s real estate is ‘fuelled by a money laundering bubble’: Market analyst’, Amy Judd, Global News, 5 July 2016

Trudeau States The Paradox: “The inflated housing market must be stabilized, but any action must not completely devalue those people whose retirements and equity are tied to their homes.”

Prime Minister Justin Trudeau says his government is concerned about the ballooning cost of housing in Vancouver and Toronto but it wants to be certain any action it takes doesn’t make the problem worse.

Speaking Friday morning on CBC Radio in Vancouver, Trudeau said any solutions will require collaboration between all levels of government, as well as academics and stakeholders.

He said overseas money is playing a role in fuelling superheated markets such as Vancouver, where the average price of a single-family detached home is $1.5 million.

But Trudeau cautioned that any federal measures to cap soaring house prices could backfire elsewhere in the country.

He said officials are examining Australia’s decision to tax homes owned by foreigners, but warns federal levers to curb offshore ownership in Vancouver or Toronto have the potential to harm other regions of the country where overseas investment can be beneficial.

Trudeau was scheduled to attend several events in Vancouver on Friday, including a roundtable on housing affordability attended by industry experts and several Metro Vancouver Liberal members of Parliament.

“How do we make sure we are helping people (in Vancouver) in exactly the right and targeted way,” Trudeau said. “That is where the kind of collaboration we haven’t had for 10 years between the federal government and different orders of government is so important to work on together.”

Most Vancouver homeowners know the inflated housing market must be stabilized, because the current trajectory “doesn’t have any good outcomes,” he added.

But any action must not completely devalue those people whose retirements and equity are tied to their homes, he said.

“We just have to make sure we are keeping people protected in how we stabilize it.”

– from ‘Trudeau warns housing solution in Vancouver could hurt markets elsewhere’, Vancouver Sun, June 17, 2016

It’s going to be interesting watching Trudeau and his surrogates try to land a B52 on a sail-boat.
In a Bubble, it is beyond the powers of government to orchestrate either ‘stability’, or a ‘soft landing’. -ed.

Question: “Why should a condo in Vancouver cost more than a condo in Toronto (or any other big city in Canada)?”

slice o condo

Correct Answer: “No good reason.” (full marks plus bonus)

Alternative Answer: “It’s a Bubble, Stupid.” (full marks, but no bonus due to unnecessary impoliteness)

Incorrect Answers: “Supply and Demand”, “Everybody Wants One (or two or three)”, “The Views”, “Only Insiders Will Be Able To Live Here”, “Because Downsizers Are Richer Here”, “We Are Running Out Of… Fresh Air?”

Points Further Deducted For Any Answer Qualified With: “Last Year I Made More Money In RE Than In My Last 20 Years Working As A (xyz)” or “What Else Are You Going To Do With Your Money?”

Back of the Class: “(anything involving the words ‘Property Ladder’ or ‘Bullet-Proof’)”, “I’ll Get Rich, Rich I Tell You!! (manic laughter)”

Obliquely related story:

Major condo developers in Vancouver are shutting out average buyers by selling their most affordable new units privately – to clients of select realtors and “family and friends” – before their advertised sale dates, The Globe and Mail has learned.

Eager buyers camp out in lineups for hours or days before the sales events. Thousands also sign up online to get “VIP” access, only to find out on opening day they had no chance. Several have said they were then invited to buy something more expensive.

Mr. Rennie said developers advertise to the public as a sort of fallback policy. If the insiders who get first dibs do not buy enough units, they can sell what is left to the next tier of interested buyers.

Toronto realtor Andrew la Fleur said condos are selling out to insiders in that hot market, too. He said he is one of the few agents whose clients get first crack at properties before the public. He estimates 95 per cent to 100 per cent of new condos are sold to insiders that way. “I think the public is just unfortunately misinformed or uneducated,” Mr. la Fleur said. “Those of us in the industry can see this coming a mile away and we know how to get our clients in at an opportune time.”
However, he said he does not think most units in Toronto will be flipped, because condo prices are not increasing in that city like they are in Vancouver.

– from ‘Vancouver developers shutting out regular buyers with insider condo sales’, Kathy Tomlinson, G&M, 17 Jun 2016 [hat-tip 3rdRock]

The average price of a single-family detached home in the Greater Vancouver area has increased as much in the past five months as it did from 1981 to 2005.

So profound, it deserves to be said again:
“The average price of a single-family detached home in the Greater Vancouver area has increased as much in the past five months as it did from 1981 to 2005.”
– from ‘World Out Of Whack! Which of these crazy real estate markets will be the first to bust?’, Zerohedge, 16 Jun 2016

For Those Who Have Lost All Perspective, Think On This



After surviving a serious illness and divorce, Denise Franklin was more than ready to start over. With a $25,000 budget, she approached architect Henry Yorke Mann to help her build a home fit for a fresh start in rural British Columbia. Mann saved money by severely restricting the size and material cost. Designing the 280-square-foot space in a mandala shape, Mann gave this home all the essentials and more. Franklin loves nature, and it was important that the home feel connected to the outdoors. A front porch reaches out into her front yard and vegetable garden. Mann used all natural and local materials — no synthetic or plastic materials were used in any part of the home. Durable, insulated metal roofing keeps the home well protected from the elements.
– from ‘Tiny B.C. cabin — at 280 sq. ft. — provides more than enough space to start a new life, and garden’, National Post, 14 Jun 2016




“Watch The Money Go Round, Watch The Money Go Round, Got It Wrapped Up Tight, Got It Safe And Sound….”

money go round
Watch The Money Go Round

“Given the rogue nature of the industry in this province, I’m not surprised someone calling for more transparency and professionalism would be considered a threat. In a sector that often seems unregulated, it has never been easier to make gobs of cash – legally or illegally. Few want to jeopardize the dynamics that are allowing many to get filthy rich very quickly.”
– from ‘Oversight of British Columbia’s housing market is a sham’, Gary Mason, G&M, 31 May 2016

“Representatives of two real estate companies are traveling with the B.C. Premier on a trade mission to Asia, raising questions about the optics of the perceived partnership at a time when many are calling for an end to foreign real estate investment.
The B.C. government lists more than 60 companies taking part in the trade mission to Korea, Japan and the Philippines as part of the province’s strategy to create more international trading partners.
Listed among those companies are two real estate brokerages Nu Stream Realty and Sutton West Coast Realty.”
“It’s bad optics,” said University of British Columbia business professor Tsur Somerville.
“At a time when people in the Lower Mainland are very concerned about the extent to which foreign capital is driving up prices here and contributing to affordability options, it seems a little bit politically dicey to take [brokerage] firms … along on a trip to Asia.”

– from ‘B.C. real estate companies join Christy Clark on trade mission to Asia’, CBC, 28 May 2016 [hat-tip 3rdRock]

Vested Interests Rule, Okay? – Any Change In The Vancouver Housing Market Will Not Be Coming From Government Policy


The interests of BC Liberal Party donors who fund Premier Christy Clark’s salary top-up appear to be determining the government’s response to the housing affordability crisis in the province, says NDP critic David Eby.
A lot of BC Liberal donations come from wealthy people in the real estate industry, and the party’s person in charge of keeping them flowing is himself a top marketer of condo developments, Bob Rennie.
A recent City of Vancouver study found that roughly 12.5 per cent of condos in the city are empty, Eby said. And yet the government has declined to take steps to discourage owners from allowing condos or other homes to sit empty.
Asked Eby, “Why would [Clark] rush to put an additional tax on international investors holding these condos empty if she’s getting major donations from luxury condo builders who want this to continue?”
Clark confirmed this week that she has personally received in total more than $300,000 from the BC Liberal Party in annual stipends since she became leader in 2011.

Elections BC’s database of political contributions shows many people and companies involved in the real estate industry gave the BC Liberals donations in the tens of thousands of dollars in 2015, the most recent year for which figures are available.
Names appearing near the top of the list, each having given at least $50,000 during the year, include the Aquilini family, Bosa Properties Inc., Concord Pacific, Developments Corp. Inc., Shape Properties, and developers Rick Ilich and Peter Redekop.
The fundraising chair for the Liberals is condo marketer Rennie, whom The Tyee recently reported gave the party $73,500 in 2015.
“Bob Rennie’s a great example,” Eby said. “Here’s a guy who is one of the most famous condominium sales agents in North America who is running the fundraising for the Premier who refuses to put a tax on speculative investors driving up the prices of condos in Metro Vancouver.”
People can’t help but ask questions about Rennie’s involvement in the party and how it might affect Clark’s policy choices, said Eby. “Why is she refusing to act? Is it because the chair of her fundraising committee is a condo salesman? That is a legitimate question in my mind and one we should all be asking.”

– from ‘Clark’s Pay from Donors Too Tied to Real Estate Moguls’, Andrew MacLeod,, 2 May 2016