Very sad indeed

Read this on Vancouver Condo Info blog. How a man denied entry to Canada for human rights reasons still owns 110 condos in Toronto!

How does this happen. It would seem to me the Government needs to worry a little less about the British Royal heritage and a bit more on not allowing our country to become a haven for the world's-worst people and their money. Even the Swiss have been tightening up.

Mr. Malkin, the National Post revealed in 2009, has been blocked from entering Canada by Canadian authorities who accused him of organized crime involvement. In his fight to overturn that decision, it was revealed he owns 111 condominium units in Toronto.

Canada should not be a safe haven for people who do this type of crime. Canada has a very attractive economic immigrant program and it is very popular for Russians so, absolutely, Canada has to be on the list of countries that are doing this

Bank of Canada shouts 'Fire' again

Panicked about Condos now. I agree, but I think the horse may have already bolted.

Fraser Valley numbers out. Big drop in sales YOY 20%. Drop in SFH average (big 7%) and Median but the benchmark comes through with a 2% YOY increase. Gotta love the benchmark..eh?

MOI 10.5 or so.

Warning Political Post

I don't often post political stuff. I don't care who is in control of the reigns as long as they are ethical and don't mortgage the future for short term gains.

I also expect them to not to lie too much- though that is tough for politicians. 

I lambasted the current Conservatives for being so reckless when they doubled the CMHC debt, and I lauded them when they finally reversed their recklessness. I did my own small part when they wanted to send tax-payer money to the big barons of broadcasting and applauded when (no doubt due to grass-roots disgust) they decided against it and the Aspers had to sell out.

However there have been two things recently that have got my gall. 

One happened a year ago but slipped under my radar until now. It was financial malfeasance. At stake were the big back-room honchoes of the Conservative party who could have been tried/fined or imprisoned for authorising $1.3 Million in excessive advertising spending and breaking Elelction Canada rules. Instead the party was fined $55K.

$55K for a party that has received over $145 Million in the last 7 years. That really sends home the message!

While we are on the topic of advertising...

We have been the recipients of Tory attack ads on the NDP's Mulcair, who apparently has a carbon tax up his sleeve which will bankrupt us if implemented, and what a terrible idea a carbon tax  is anyway.."which we cannot afford".

The irony of running that ad in BC does not seem to have struck their high priced ad executives.

You will remember that Gordon Campbell introduced a carbon tax in late 2008. Good for him! Gordon you will remember is one of Harper's favorites, having been appointed as Canadian High Commissioner to Great Britain and Ireland when he had to resign over the HST debacle.

I guess they think we are so stupid we wont remember.

All averages down

Once again kudos to Larry.

We are now down 14% from the Feb 2012 peak for SFH.

It is interesting that attached and apartments are holding up better. We are always being told that the 'land' ownership in the SFH makes it more valuable than a box in the sky or a sliver of a piece of land.

That may be true, but as you can see from Larry's graph, the lines have diverged from each other sooo much that this is more than (over) accounted for in the price differential. And what goes up the most has the furthest to fall.

In fact apartments/attached may suit the boomers and no kids buyers more than the hassles and extra expense of owning a SFH. We may see a bump up of SFH listings as boomers try and cash out.

Missed Ben Rabidoux's talk

tonight due to work commitments.

Those who attended, please give us a summary of his presentation and any comments on the questions/answers afterwards. 

Thanks

A small bone for the bears

OK so sales have been pretty strong and inventory is going into the pre-Christmas decline and bears everywhere are growling. 

Was that it? Where is the new strength coming from? 

I am not sure. Maybe there has been some loosening by the banks and the economic numbers out of China have reversed the year-long decline and have started to move up and there is more optimism out of the US too with firming of housing there..

Maybe these are all playing into it.

On top of all that, we have lost Carney and the next B of C Governor may turn out to be a complete Greenspan clone pumping gas for the speculators..

Here is a small bone. We have long been compared to San Diego. We are both on the Ocean, are scenic and have both attracted a large number of Eastern retirees.

San Diego was rock solid while RE in the rest of the US fell. So solid in fact that many said it was destined to hold it's ground and not drop. But when it did budge, it sure budged...

http://www.housingviews.com/wp-content/uploads/2011/07/SanDiegoChart-940x511.jpg

Carney goes...what now?

What should we expect from Carney's departure to London and is his reputation for 'saving Canada' from the worst of the Financial mess deserved?

He came to the B of C in October 2007 from Goldman Sachs, in the midst of the Bear Sterns collapse which ended with it's tax-payer subsidized sale to JPMorgan. A bad time to take the reigns that's for certain. Did he call for tighter scrutiny of the investment cartel? I don't recall such.

Of course Goldman Sachs has a very poor reputation for honesty which is well outlined by Matt Taibbi's excellent articles in Rolling Stones.

When Lehman collapsed and the US Federal Reserve cut rates aggressively, Carney followed along with every other Central Banker in cutting rates and setting off other speculative imbalances. One of these was our own housing bubble, which was starting to correct in 2008/2009.

House prices stopped dropping and instead took flight as a result of the lower interest rates and of the Federal Government doubling the CMHC lending capacity. Who knows which had a bigger effect, but they both added kindling to the fire. In Vancouver and Toronto, we also had the influx of Chinese money. China had embarked on it's own big program of spending to ward off a slow-down.

Much of this money found it's way into the hands of a few thousand well-connected individuals and from them into Vancouver and Toronto real estate.

Carney was pretty much silent on this build up as far as I recall. The solidity of the banks is a given once rates to depositors are near zero, and where all risky loans are pre-packaged and passed on to the tax-payer.

I do not recall Carney commenting on the huge future liability to tax-payers incurred by the ruinous actions of the CMHC.

Finally, approximately two years ago, Carney started to make comments about the growing consumer debt mountain. He kept reminding us that rates would not remain so low for much longer, but then did not really raise rates aggressively enough to put fear into borrowers. Of course he is in a bind since the rate set by the B of C is used both for businesses (which he wants to benefit from low rates) and consumers (whom he wants to exercise restraint!)

Those consumers that did follow his advice may have better balance sheets, but found themselves increasing priced out of RE by those who did not.

Finally Carney became more strident about debt and came out with out-right dire warnings, which I believe did start the process of bringing consumers to their senses, since banks certainly have shown no restraint in their lending.

I also believe his hectoring on debt also dragged Flaherty and Co. into bringing in the mortgage changes, rather belatedly, which the RE industry is still fighting aggressively.

So all-in-all I would rate him a B-. He followed the play-book of excessive easing, realised the debt-monster he helped build too late...but he did ring enough alarm bells for consumers to start thinking about their situation and he pushed the politicians into doing what they hate- pulling back speculators.

As to the 'strength' of the Canadian banks, we know that they have benefitted greatly from their near monopolistic situation, zero borrowing costs and the passing of risk onto the shoulders of tax-payers, not from prudent regulators.

And the fact we have weathered the last few years better than the US or Europe has much more to do with deficit spending and the rebound in China than the actions of a Central Banker. We are also in a situation that any slow-down in China or housing or double-dip in the US, will leave us with few bullets in the chamber.

However, his B- makes him seem like a hercules compared to the C and Ds the others like Greenspan and Bernanke and King would get.

Let us hope his successor strives for an A.