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vanpro
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Re: H.K. Imposes Property Tax on Non-Locals

Tue Oct 30, 2012 11:45 am

I have made my point ad infinitum. You and others keep saying prices are high so there must be rich guys coming here w/ no other corroborating evidence besides high prices of homes (i.e. the dependent variable is being used as a fundamental reason to explain the very same dependent variable - that is circular - you need to show other independent variables that corroborate that: i.e. incomes and wealth stats that shoot up at the same time and at the same rate as home price increases in those specific areas, local economic boom at the same time as mega-rich immigrants come here, immigration and population stats showing boom in population, hotel, retail etc.. stats that show boom in business - all of these variables have shown the exact opposite of what you are trying to say. Also, areas where there has been little or no alleged offshore money have also shown insane prices debunking the "bifurcated" housing market theory (i.e. 2 different markets, one for locals and one for foreign rich).

The exact same thing happened in all of the rest of the worlds' housing bubbles (and they all tried explaining the crazy prices exactly the way bulls here are trying), so why are you so surprised?
you didn't answer the question vanpro.
Who has been buying these multimillion $ properties?
You mean that make up a small (1%-3% according to Rennie et al , 9% by your own guess which works out to 4 sales per day) portion of the overall Greater Vancouver market? I repeat: I have conceded that a larger % of buyers in Van West SFH are Mainland Chinese or other offshore, but that is still a small % of the overall Greater Vancouver market and does not explain the rest of the 91% (using your guess) to 99% (based on Rennie etal's estimate) of SFH detached in the rest of Greater Vancouver whose avg. price is in the $1M+ range that would be dependent on "local" non-rich incomes......I repeat: the conclusion is that these buyers have been fueled by and aided by cheap mortgage financing and lenders/banks willing to do massive sub-prime lending in Greater Vancouver at variable rates, high amortizations (curtailed recently) etc... The decrease in sub-prime lending due to new rules will have negative effect on this 91%+ part of the overall market.
 
unicas
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Re: H.K. Imposes Property Tax on Non-Locals

Tue Oct 30, 2012 4:22 pm


I repeat: the conclusion is that these buyers have been fueled by and aided by cheap mortgage financing and lenders/banks willing to do massive sub-prime lending in Greater Vancouver at variable rates, high amortizations (curtailed recently) etc... The decrease in sub-prime lending due to new rules will have negative effect on this 91%+ part of the overall market.
Massive sub-prime lending? where are the massive foreclosures? You have data to backup? or you just assume as you always do? The fact less than 5% of CMHC insured mortgages are over 500K, less than 0.1% of mortgaged are over 1mill, the data says the present level of housing price has little to do with CMHC, and if not CMHC, which bank you know about would give out million dollar mortgages based on $67k of family income? Check out ratios of foreclosures among BC regions, the highest ratios are in places like Prince George, Kelowna. West Vancouver, Richmond, epic center of bubble mania would have much less forclosures than say Abbotsford. What it means is in area where there is no external influence like Vancouver, housing prices and foreclosures rate do reflect true state of economy. In Vancouver, they dont. This is not local income that drives housing price here. That is why you keep avoiding to do it math to back up your logic or elusion. you know you have very weak arguement there.

But, give Vanpro credit, no usage of MYTH, no gigantic bold fontss a few posts in a row and you actually conceded on something, though you still got long way to go.
 
vanpro
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Re: H.K. Imposes Property Tax on Non-Locals

Tue Oct 30, 2012 8:01 pm

Unicas:

From the Canadian Bankers Association (prov. data only):

Current Mortgage arrears in BC is:

1. 3.5 TIMES the rate in 1994 when mortgage rates were double digits right before the last crash in prices.

2. TWICE Ontario's rate.

3. 50% higher than the national average.

http://www.cba.ca/contents/files/statis ... 050_en.pdf

And those that are not in arrears are spending so much of their incomes on mortgage payments, they have little or nothing left over for anything else. This has resulted in a literal perversion of Vancouver's economy: sky-high, insane house prices, but restaurants going under, retail stores doing badly or going under, high unemployment (due to declining economic activity) etc....

BC retail sales are now BELOW 2008 LEVELS:

http://www.central1.com/publications/ec ... urrent.pdf

"August was not a kind month for B.C.’s retail sector
as estimated provincial sales slumped to the lowest
level in a year. Total current-dollar retail sales volume
declined 0.9% from July to a seasonally-adjusted
$5.04 billion. Relative to same-period 2011, sales
volume was up an anemic 1%. Price growth in August
suggests retailers experienced an even sharper
decline in real activity or quantity of product sold
during the month.


The monthly sales decline was sharper than expected,
but consistent with the general erosion in activity
observed since the second quarter. The weak retail
environment continued to refl ect themes outlined
over the past couple of quarters – namely slow
population growth, tempered consumer confi dence,
high debt loads and weak housing markets. In addition,
changes to the duty-free allowance have made
cross-border shopping an even more compelling alternative
to local purchases, particularly for residents in
the southwest region of the province.
This has likely
siphoned off some activity from local retailers."

And, Use of Food Banks in BC Growing at TWICE National rate due to "high cost of living in Greater Vancouver":

http://www.theprovince.com/news/Grim+fo ... story.html

We have seen a 59-per-cent increase in the last four years,” he said.

One obvious problem he hears from clients is the cost of living in Greater Vancouver. “It is an expensive part of the world to live in,” he said.

And similar to the report, he sees families with employed parents who still struggle to put food on the table.

“I know in our food bank there are people employed who can’t make ends meet,” he said.
 
unicas
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Re: H.K. Imposes Property Tax on Non-Locals

Thu Nov 01, 2012 10:24 pm

Vanpro, BC's mortgage arrears rate is about the same as 10 years ago according to link you provided and far from the worst if you look at a span of 30 years. You just do your usual cherry picking again, bring out the lowest time and compare the current ratio. Why don’t you compare historical average?

If 0.4 percent arrear in BC is result of what you call massive sub prime lending and you make a such fuss about it, what do you call the America’s 30% arrears rate at the peak of their meltdown?

And Alberta leads the nation in arrears rate, not BC. A province with half of our housing price and much higher disposable income, Shouldnt they have the lowest rate according to your theory? you dont have an answer. I give you a tip. Alberta housing market totally depends on local income. BC, at least half of it, local income is not as relevant. How ironic is that, you keep throwing a theory with what you called backup data , but keep contradicting yourself. Look at your responses on this thread, you have been going in circle. You really need to take a rest on this topic.

You still havent provided how a Vancouver resident with $67k family income can afford Vancouver's bench mark price? Your silence means you really cant connect the dots. Time to concede more Vanpro
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vanpro
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Re: H.K. Imposes Property Tax on Non-Locals

Fri Nov 02, 2012 6:56 am

Vanpro, BC's mortgage arrears rate is about the same as 10 years ago according to link you provided and far from the worst if you look at a span of 30 years. You just do your usual cherry picking again, bring out the lowest time and compare the current ratio. Why don’t you compare historical average?

If 0.4 percent arrear in BC is result of what you call massive sub prime lending and you make a such fuss about it, what do you call the America’s 30% arrears rate at the peak of their meltdown?

And Alberta leads the nation in arrears rate, not BC. A province with half of our housing price and much higher disposable income, Shouldnt they have the lowest rate according to your theory? you dont have an answer. I give you a tip. Alberta housing market totally depends on local income. BC, at least half of it, local income is not as relevant. How ironic is that, you keep throwing a theory with what you called backup data , but keep contradicting yourself. Look at your responses on this thread, you have been going in circle. You really need to take a rest on this topic.

You still havent provided how a Vancouver resident with $67k family income can afford Vancouver's bench mark price? Your silence means you really cant connect the dots. Time to concede more Vanpro
10 years ago, Vancouver's housing market was stagnant, prices now are 2-3 TIMES as high, and arrears have climbed by 2-3 times from the LOWS after falling during that 10 yr period. the 1994 comparison is valid becasue mortgage rates were in the 12% range - 900 bps higher than today, yet arrears are 3.5 TIMES 1994 levels just before the last price crash.

And, yes, because locals can't afford the prices today, prices are unsustainable - exactly what happened in early 1980's and early 1990's before prices crashes in Vancouver after unaffordability (based on local incomes) hit extreme highs.

Where are the immigration & population growth stats to backup your myth that foreigners are coming in here in huge numbers? Vancouver population growth and immigration is at near record lows and Vancouver trails ALL OTHER MAJOR Canadian cities in population growth, immigration and every other economic indicator:

http://www.rbc.com/economics/market/pdf/citytrend.pdf

And our economy is getting WORSE not better - BC now leads the nation in 2 things: house prices and job losses - not a sustainable situation!

http://www.vancouversun.com/business/ec ... story.html

"Regionally, there were as many provinces reporting increases in employment as decreases. The biggest gain was in Quebec, which saw 20,100 jobs added, while the biggest loss came in British Columbia, which reported 10,900 fewer jobs."
 
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jesse1
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Re: H.K. Imposes Property Tax on Non-Locals

Fri Nov 02, 2012 10:23 am

Comparing US and Canadian "subprime" is not apples-apples. It should be obvious to anyone with a pulse that subprime and prime defaults hit the fan AFTER prices started falling. That is no coinkidinky. Canada may not see 30% NPL or whatever but anything that looks like a fast breakdown on a graph will mean things aren't rosy.

The phrase "we're all subprime now" should be understood, it's not a clever catch phrase, there's an important lesson in it!
There is no shame in overpaying
 
unicas
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Re: H.K. Imposes Property Tax on Non-Locals

Fri Nov 02, 2012 10:50 am

jesse1 » Fri Nov 02, 2012 10:23 am

Comparing US and Canadian "subprime" is not apples-apples. It should be obvious to anyone with a pulse that subprime and prime defaults hit the fan AFTER prices started falling. That is no coinkidinky. Canada may not see 30% NPL or whatever but anything that looks like a fast breakdown on a graph will mean things aren't rosy.

The phrase "we're all subprime now" should be understood, it's not a clever catch phrase, there's an important lesson in it!
When did the U.S. subprime hit the fan? 2007 and 2008? look at 2003, 2004, that was still 10 times higher than Canada on the above chart. Fact is Canada's financial institutions did not and were not allowed to go the path of the U.S. during the same period and our economic structure is different from the U.S. being a resource based economy. That is why Canada never has and will not have U.S. style meltdown. To call 0.4% arrears rate, which was about historical average, as proof of Vanpro fantasized Canadian version of subprime crisis is all right stupid.

Its is understandable you want to give your pal a hand. But when he is sick as he is, to cover him with a bed sheet wont help him much.
Last edited by unicas on Fri Nov 02, 2012 11:21 am, edited 1 time in total.
 
vanpro
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Re: H.K. Imposes Property Tax on Non-Locals

Fri Nov 02, 2012 11:20 am

Unicas:

Comparing Vancouver current arrears vs. BC past arrears during previous BC price corrections and also BC vs. other provinces is the most relevant analysis which is what I did above.

Please address my points & data rather than hypocritical personal attacks.

Lastly, where is your independent evidence, data of all this foreign riches coming here (besides using high house prices to justify high house prices therefore "there must be significant numbers of offshore rich coming here", which is a circular argument)? Why is our economy the worst of all major cities in Canada where house prices are b/w 1/4 to 1/2 of our house prices, if we have so many rich immigrants? Where is the income and/or wealth data that shows the effects of these wealthy immigrants (whose income would necessarily show up in our income stats after they immigrate here - you should know as much since you are an accountant). Why does the independent immigration stats show plunging and record low immigration to Vancouver and record high out-migration and pathetic population growth at near 10 yr lows, that is lower than ALL other major Canadian cities?
 
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jesse1
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Re: H.K. Imposes Property Tax on Non-Locals

Fri Nov 02, 2012 2:12 pm

that was still 10 times higher than Canada on the above chart.
Again, you cannot apples-apples the US and Canadian lending markets, just like you can't directly compare debt-income. I can, however look at cap rate differentials and figure out Vancouver is looking overbought.
There is no shame in overpaying

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