Thursday 12 December 2013

BoC confirms "Rate-Hold" phenomenon today

Poloz Says Canada Weighs Risks of Housing Drop
Dec 12, 2013
Bank of Canada Governor Stephen Poloz said the central bank’s policy stance is weighing the risk of a sharp correction in the housing market against the threat that price movements will fall into deflationary territory.
Poloz said today home buying has picked up “mainly because people pulled forward their plans when mortgage rates started to move up during the summer. We expect these imbalances to stabilize and then gradually unwind in coming years"
While the central bank’s base case assumes a “soft landing” in the nation’s housing market, “there is a risk that household imbalances could keep building and set the stage for a sharp correction down the road,” he said.

As I had predicted this phenomenon back in early July (when rates were just starting to creep up), I'm not surprised.  Where I estimated inaccurately was the length of pre-approval (apparently usually 90-120 days), and the ferocity of people applying and exercising their rate-holds.

Here are what the other banks think about this Rate-hold phenomenon:

Scotiabank: “this would feed into our view that sales rose over the spring and summer at the expense of future months as people exercised options to purchase within 90-120 day mortgage rate commitments on fears of losing the juicy rate commitments back in the spring. I maintain the view that the spring and summer market was a temporary interruption along a correcting sales path”

CIBC: “there’s a huge amount of mortgage debt already in the pipeline that was created when people took advantage of rates they were pre-approved for in the summer. “I’ve seen what is in the pipeline in mortgage activity and you won’t believe the numbers when it is official.”

TD: ““The resurgence in sales activity over the course of this year was likely driven by a frontloading of demand by borrowers with mortgage preapprovals jumping into the market to get ahead of the deterioration in affordability,” Fong said.”

Wednesday 11 December 2013

Good reads: 1. World's over-valued housing 2. Canadian labor hit by wave of layoffs 3. Canada Post cuts jobs

“Based on their analysis, anyone in the market for property might want to avoid Toronto or Vancouver. On the other hand, if you can get around Japan’s restrictions on foreign investment, an apartment in Tokyo looks like a steal.”
“Although the Deutsche team doesn’t delve into them, it’s not hard to think of some key reasons for these differences. Canada, for example, is very open to foreign investors, which means that in an age of unprecedented global liquidity cash-rich wealthy individuals who are looking for places to park their excess funds can do so in its housing market far more easily than in Japan, with its closed system. ”
“These data also underscore the dilemmas central banks face in various countries. Canada’s, for example, is grappling with a slowdown in its economy and a worrying stagnation in consumer prices that’s raising the risk of deflation. But sky-high house valuations make it difficult for the Bank of Canada to cut rates to spur aggregate demand. A similar problem exists in Australia”

2. Globe & Mail: Canadian labour hit by wave of layoffs, plant closings 

Monday 25 November 2013

"One casualty of new restrictions could be 30-year mortgages"

"Since 2008, regulators have been trying to contain housing risk by piling on new mortgage rules, and bringing back some old ones. So far, the housing market has yet to crack under the weight of those policies.
In fact, home prices just keep reaching record highs. And each month they do, policy makers get more and more nervous about overextended borrowers.
In 2014, we’re virtually guaranteed to see new mortgage restrictions. One casualty of those new rules could be the 30-year amortization.
“We have noticed that there has been a shift in the marketplace to offer more 30-year amortizations,” chief banking regulator Julie Dickson said Monday at the mortgage industry's annual conference in Toronto. “About half” of new borrowers with down payments of 20 per cent or more are choosing 30-year amortizations, she added."

Saturday 16 November 2013

Scotia, RBC echo view of pulled-forward demand due to expiring rate-holds

- seems like the big banks' views are in line with my predictions back in June

Scotiabank Nov 15 Market Flash report
“On a very preliminary basis, this would feed into our view that sales rose over the spring and summer at the expense of future months as people exercised options to purchase within 90-120 day mortgage rate commitments on fears of losing the juicy rate commitments back in the spring. I maintain the view that the spring and summer market was a temporary interruption along a correcting sales path”

RBC Monthly Housing Market Update
Nov 15
“The resale decline in October was not entirely a surprise because we suspected that much of the strength in recent months reflected the unwinding of earlier restraint associated with the tightening of mortgage insurance rules last year and a rush by some homebuyers to lock-in lower mortgage rates this summer. Developments in October were consistent with that view”

Tuesday 12 November 2013

November Preliminary Stats Update

Over a third of November has passed, so far:
7 of 20 business days:

Sales: ~ flat vs 10Y Avg (Oct was -1.4% vs 10Y Avg)
New Lists: +11% vs 10Y Avg (Oct was -1.6% vs 10Y Avg)

Let’s look at the new listings closer:
New Lists:
Aug: +3.5% YoY, -1.0% vs 10Y Avg
Sep: -5.5% YoY, -1.6% vs 10Y Avg
Oct: -0.2% YoY, -1.6% vs 10Y Avg
Nov: +27% YoY, +11.0% vs 10Y Avg (!)

Total Inventory % Change: Nov 12 (1 day after Remembrance Day long weekend) vs Nov 1st:
2013: 0%
2012: -1.2%
2011: -1.2%

Total Inventory % Change: Nov 12 vs Oct 30th (to include effect of month-end expiry)
2013: -4.4%
2012: -6.4%
2011: -5.4%

- Both New Lists & Total Inventory holding up unseasonably…
- The next leg to drop is sales

Sunday 10 November 2013

Canadian Experience Class & Family Reunification getting tougher

Yesterday CIC changed the rules for the popular Canadian Experience Class program, eliminating 6 occupations from applying for immigration, most notably Cooks & Food Service Supervisors, but also administrative officers; administrative assistants; accounting technicians and bookkeepers; and retail sales supervisors.

In an article written in Chinese, it was revealed that a lot of international students have been flocking into cooking schools, hoping to gain immigration via the CEC program . At the VCC culinary arts program, “currently almost all students are international students from Mainland China”.

In addition to applicant job restrictions, “CIC will maintain the same language criteria for applicants but will verify them upfront as of November 9, 2013″

(anecdote here, on more than 2 occasions when I had dinner in Richmond, I saw the young 20-something waitress/waiter driving off in their respective M3 & 911 GT3. Makes one wonder who should be tipping whom doesn’t it ;))

- People already asking on Chinese forums whether these changes will affect Vancouver RE.
- re: “almost all students at VCC culinary arts program are Chinese”, apparently many people abandoned previous studies/employment in order to take the easy route to immigration.
- it’s a significant change removing cooks, “food services supervisor”, and “admin assistants” from the list of approved occupations, as these require minimal formal training and represent an easier path to immigrate, thus they are experiencing an “oversupply” now.

- it has also been brought up in that the removal of “accounting technicians and bookkeepers” will be a major blow to the Commerce/Economics grads since bookkeeping is the main entry-level job a new grad can do. I can say with confidence that the majority of SFU Economics program are international students from Mainland China (apparently lower English requirement than UBC). It is common practice for businessmen in China/HK/TW to send their kids to Canada to obtain a business degree, for eventual return to Asia to take over their family businesses.

- the removal of “retail sales supervisors” (eg. cashiers in Aberdeen Mall cube stores and clothing stores) also eliminates another popular easy route to immigration
- Looks like CIC is finally catching up to the widely known trends/loopholes to its immigration system

Also, CIC just increased income requirement for family reunification program by 30%, also requiring 3 consecutive years of qualifying income on notice of assessment. Also requires income to meet requirement every year until application’s final approval (couple more years).

Friday 1 November 2013

October 2013 Stats Summary (Estimated) & Historical Comparison

(Updated with more accurate Stats Nov 1)
Estimated October 2013 Stats:
2013 vs 2012
Sales 2635 vs 1931(+36%)
Lists 4277 vs 4323 (-1%)
Ratio 62% vs 46%
Est Month end Inventory: 15340 vs 17370(-11.7%)
MOI:5.8 vs 9.0 (Oct/12) vs 6.5 (Sept/13)

Historical Oct Sales: (2003-2012 10Y Avg=2700)
2002: 2866
2003: 3765
2004: 2734
2005: 3099
2006: 2722
2007: 3028
2008: 1364
2009: 3704
2010: 2337
2011: 2317
2012: 1931
2013~2635 (-2.4% vs 10 year average)

Oct vs Sept (same year) Sales: (2003-2012 10Y Avg = +4.4%)
2003: +12%
2004: -3.9%
2005: -7.3%
2006: +8.1%
2007: +9.1%
2008: -14%
2009: +4.1%
2010: +5.3%
2011: +3.2%
2012: +27%
2013: +6%

2013 vs 2012 YoY Monthly Sales:
May: +1%
Jun: +12% (Fixed rates started rising, last chance to get 5Y 2.79% preapproval)
Jul: +40% (Note: CMHC new rules implemented Jul 9, 2012)
Aug: +52%
Sep: +64%
Oct: +36% (declining YoY gain)(Running out of low-rate-holds?)

2013 Monthly Sales vs 10Y Same-Month Avg Sales
Jan: -18.7%
Feb: -30.9%
Mar: -30.2%
Apr: -20.9%
May: -19.4%
Jun: -22%
Jul: +0.1%
Aug: -4.6%
Sep: -1%
Oct: -2.4% (120 day preapproval is starting to expire now?)

Thursday 31 October 2013

A few points re: when will the expiring rate-holds show up on RE Board's Sales stats

- The sales strength since summer was predicted back in June by some, so the recent sales strength supports the prediction.
- Fixed rates moved up from early/mid June until August. With rate-hold being 60-120 days, potential buyers were allowed up to 4 months since July/August to take the leap.
- The source of my daily stats come from REBGV server. However, it's known that it takes at least 2 weeks (and possibly over one month) for a “sale” to be entered into the REBGV system.
- Therefore, REBGV sales stats may have a lag of 2 to 4+ weeks vs actual “real-time” events. I still think a significant slow-down in sales will occur once most of the pre-approved mortgages expire. When this weakness shows up on REBGV sales stats is up for speculation (but should be soon)
- Even BoC and several major banks’ economists have in the last 1-3 months warned about the summer/fall RE rebound being “temporary”.
- But of course certain banks like BMO were quick to cheer “crash averted”
- As an aside, it’s worth noting that some smaller/cheap mortgage lenders have been refusing to lend toward condo purchases (wonder why ;) )

Thursday 24 October 2013

Daily Read: Falling rates, BoC’s stand put housing spotlight on Flaherty

Falling rates, BoC’s stand put housing spotlight on Flaherty
The Globe and Mail - Published 

Kelowna mansion auctioned off, comes with free Lambo

From one of my contacts:

This luxurious Kelowna mansion was auctioned off today (see Auction Site Here)

Built: 2008
Listing Price (2008): $5,900,000
Listing Price (2013): $4,350,000 (May/13)
Assessed Value (2013):$3,780,000
Auction Date: Oct 24, 2013
Winning Bid: $3,500,000
Winning bidder got “house, a free Lamborghini, $250k of furniture, and $200k of beautiful art as part of the deal!”

 I don’t know what the purchase price was back in 08 (if it was sold then), but this was the listing back in 2008, the year it was built.
It was called “San Marc Tuscany Villa” and was “previously owned as a second residence“.
If the original owner paid anything close to the original asking price of $5.9M back in 2008 for this vacation home, he’s short $2.4M, a lambo, and “$450k worth of furniture & art.”

Wednesday 23 October 2013

G&M: Bank of Canada warns of risk of housing ‘correction’

The Bank of Canada is warning about the risk of a housing “correction” given the latest strength of the market.
While it believes Canadians are cutting back on their thirst for borrowing, and that all will be fine in the end, it nonetheless cites the risk of a bubble and the fallout on the broader economy.
“The elevated level of household debt and stretched valuations in some segments of the housing market remain an important downside risk to the Canadian economy,” the central bank said today.
“The continued slowing in household credit growth and the rise in mortgage interest rates point to a gradual unwinding of household imbalances,” it added in its monetary policy report.
“However, recent data suggest some risk of renewed momentum in the housing market. This would provide a temporary boost to economic activity, but could exacerbate existing imbalances and therefore increase the probability of a correction later on.”

 - The "demand brought forward" caused by low rate-holds from June/July (expiring between late September and late November) was very likely the cause of the "renewed momentum".

- Despite the dropping Canada 5Y bond yield since the (temporary resolution of) US debt limit/government shut-down fiasco and today's cut-back of Canadian economic forecast, the current 5Y CDN Bond Yield is still 1.73%, while back in April the yield was at 1.18%.

- We will likely see further lowering of fixed mortgage rates (currently at 3.79%-3.89%), but we likely won't see the 5Y Fixed rate go back to April's historically low 2.69%-2.79%

- I will not be surprised to see Flaherty/OSFI dish out more mortgage tightening rules if RE's momentum persists prior to the Spring market.

- Though I still expect noticeable (worse than seasonal) softening of Vancouver RE (vs summer/13) for the remainder of this year.

Bank of Canada cuts economic outlook, drops rate hike signal

G&M: Bank of Canada cuts economic outlook, drops rate hike signal

"The bank is cutting its forecast for both the Canadian and U.S. economies – not just for this year, but for 2014 and 2015 as well.
The bank pointed to an economic environment that is now “less favourable for Canada” – most notably, the painfully slow recovery from recession in the United States, Canada’s main trading partner."
"...however, the Bank must also take into consideration the risk of exacerbating already-elevated household imbalances. "

"BoC says they don't concern themselves with specific housing markets, but there could be structural reasons for some "unusually strong" markets" - @BenRabidoux

My take:
- As expected, Canadian economy continues to show slack

- BoC dropping rate hike signal, whilst mentioning "risk of exacerbating already-elevated household imbalances", may "nudge" Flaherty/OSFI toward further mortgage rule tightening, now that prime rate's not going up any time soon.

- As I've mentioned before (either in this blog or in other forums), more than half of my investments are in US currency, exchanged when CAD/USD was above par.  I agree with @BenRabidoux that "BoC will LAG the Fed in next rate cycle" (ie US will hike their rates earlier than Canada), which is negative for CAD.  I intend to purchase more USD down the road whenever exchange rate gets favorable.

- CAD/USD just took a tumble after BoC cuts econ outlook, from 97.3 yesterday down to now 96.3. If CAD/USD continues its decline (which I think it gradually will), the big loser will be holders of illiquid, over-valued CAD assets.

- RE bubbles will still “deflate” despite being in a persistent low-rate environment. For those who plan to buy in the next couple years, a good scenario would be having had a RE price correction & CAD/USD correction (provided you have liquid USD investments), while interest rate remains low (yes you can have the cake and eat it too).

Friday 11 October 2013

Are we seeing demand for Vancouver RE beginning to run out of steam?

It had been discussed that the daily MLS stats (see my twitter feed @greaterfoolvan) represent sales that actually occurred >2 weeks ago, just that they're officially entered into MLS system now.

As was discussed last month,
"Back in June, RBC raised its 5Y Special Fixed Rate from 3.09% to 3.19% on June 10, then 3.39% on June 24.
With Fixed Rate on the upswing since early/mid June, the 90-day low-rate holds are starting to expire about [mid-September].  The 120-day low-rate holds will expire by [mid October]".

This week's weakened sales potentially reflect the early phase of "demand tapering" starting in late September.  The rate of month-over-month sales decline (vs previous years' trends) for the next couple months will be interesting to watch. (I'm predicting a sales drop-off worse than avg seasonal trends)

Tuesday 8 October 2013

Daily Reads

1. Toronto real estate: Condo buyers ‘scrambling' to close deals

Mortgage brokers have seen a surge in people who bought pre-construction condos a few years ago and are now “scrambling” to get financing to close deals.

2. Rumor: CRA cracking down on non-reporting of rental income? (Source: commenter on
" recently been instructing mortgage lenders to report to them all individuals who have rental properties on their mortgage application and who have not reported them on their tax returns. In other words if you are holding a mortgage for a rental property but have never declared or paid tax on your rental property income, you can possibly expect an audit and allot of explaining to do."

Tuesday 1 October 2013

Back in action

Been out of country on vacation.
Google even suspended my account and also this blog due to "suspicious sign-in's" by my mobile devices in other countries, good on google I suppose!

Expect September official REBGV data to be released tomorrow.

Sales remained strong relative to last year, however still below 10 year average.

As I've said before, the 120-day rate-holds start expiring by late Sept/first half of October.
Watch those sales drop (worse than seasonal trend)!

Thursday 5 September 2013

Expect 2013's "Demand-Depletion-post-Tightening Phenomenon" to be more pronounced than after previous CMHC rule changes

As I had expected back in June/July in my 2013 Mid-year summary:
3 JULY 2013
Greater Vancouver Sales are higher than last year, however the sales pick-up varied greatly with region. The record-low Fixed mtg rates this Spring was likely the main contributing factor – for the people who can still qualify for mortgages.

If Fixed rates continue to creep higher, we can expect to see people with mortgage pre-approvals jumping into the market before it expires (usually 60 day rate-hold). So we might continue to see a busier July than last year. However, if rates stay high, I expect to see a worse 2nd half than 2012-H2.

Demand was indeed pulled forward with the relentlessly rising bond yields over the last couple months.
However, it seems like the usual rate-holds are 90 days (CIBC, BMO) and 120 days (RBC,TD), with Scotia being 60 days.  It is also worth noting that some of the "special rate sales" offered by banks have a shorter rate-hold (60 days).

Back in June, RBC raised its 5Y Special Fixed Rate from 3.09% to 3.19% on June 10, then 3.39% on June 24.

With Fixed Rate on the upswing since early/mid June, the 90-day low-rate holds are starting to expire right about now.  The 120-day low-rate holds may still have a month left before they expire.

In any case, this seems like The Last Binge.

Globe & Mail had just published this story today:

Mortgage fears drive up Canadian home salesSep. 05 2013Fears of higher mortgage rates are driving strong sales in a housing market that was on the ropes just a year ago.
August sales numbers hint at a Canadian market that has “shades of taking flight again,” said Bank of Montreal economist Sal Guatieri. But observers suspect the upward trajectory will ultimately be flattened by rising rates, which have prompted many buyers to jump in sooner than they otherwise would have.

The rising rates have been forcing potential home-buyers who were sitting on the fence to make a major financial decision within 90-120 days. 3-4 months is enough time for any fence-sitter with a buying-bias to capitulate. This has occurred, resulting in an unseasonably "hot" July, August, and early September.

Contrast this year's 3-4 month "grace period" with previous RE-tightening events:
- 2012 July's CMHC mortgage rule change had 19 days of advance-warning.
- Previous 2 CMHC mortgage rule changes in 2010-11 had 2 months of advance-warning.
*Note that CMHC rule changes, upon implementation, overrides existing mortgage-preapprovals.

In 2013, where the 1% rate hike over 3 months was obviously also a "RE-tightening event", the fence-sitters have 3-4 months to capitulate, after they get pre-approved with lower rates in May/June.

Due to the longer duration of "grace period," I expect the "Drawn-Forward-Demand" phenomenon to be more pronounced than previous RE-tightening events.   I also expect the "Demand-Depletion-Following-Tightening" phenomenon to be more pronounced as well, taking place as early as mid/late September, exacerbating in Fall/Winter.

Sunday 1 September 2013

大温房市中短期展望: Short-to-Medium Term Greater Van RE Predictions - Update

(will translate to English when time permits)

Update 8/31/2013:
1. 国税局开始针对楼花买卖者 全面严格征税罚款
2. 固定利率于6月开始明显上扬,5年固定已从2.69%(4月) 升至3.79%(8月底)
3. 央行8/28提升房贷 核准利率 (Qualifying Rate) 至5.34%, 受影响的包括 1/2/3/4 固定利率 及 浮动利率 申请人,及 HELOC 房屋净资产抵押贷款
4. CMHC MBS Rationing 于2013/9/1实施,造成大银行的 borrowing cost 提高,连接将导致5年房贷利率在短期内上升 0.15%-0.65%
5. 加人非按揭负债率创8年新高, 而 BC省居民非按揭负债量则比加国其他省份高42.5%

- 因为2013上半年维持的极低固定利率,加上6-8月间固定利率的明显攀升,造成7-8月成交量近乎反常的热络。 
- 指标价看来在7月已停止了回升。 2013年7月比2012年7月房价下跌 2.3%。
2013年全年房价的跌幅应不至于原先预测的 同比下跌 -8%, 但GF认为目前我们见到的,只不过是稍微延后了最后的"着陆". 而不管我们最后是"软着陆" 还是 "硬着陆",最后的着陆点还是一样的。
- GF为了不更改年初预测帖的预测值, 同时基于时间所限,没有更新 跌幅预测。 
- GF认为,今年12月底大温全房型指标价,会继续低过2012年年底。 年底同比跌幅约为 3%-5% (年初原预测为-8%)

1. 大温房价其实在2011年6月已达顶点 (但部分区域在2012年5月才到顶)。
2. 大温房价将维持下跌趋势至少到2015年,但有可能从2015年后继续缓跌/持平几年。
3. 大温总跌幅 (从2012年5月算起,全房型指标价), 保守预计为 20%-25%。 GF预测大温房价从最高点到谷底为期 3年(2015) 到 >5年(2017+)
4. 加国经济面临极大风险。 房市泡沫的"着陆"将明显波及加国(尤其大温)的整体经济,家庭收入,就业率,及政府税收。加币也将因此面临继续(兑美元)下跌的风险。
5. 世界经济距离步出阴霾还有很长一段路。 通缩的风险远大于通膨。

GF 建议:
1. 大温投资房 (尤其公寓): 未来一年绝对避免
2. 大温自住房: 若你收入或积蓄能承担房价下跌25%, 及renew 房贷时利率上涨>1%的风险,那量力而为,但能等则等。 若你的收入及积蓄只能让你在最近的(低)利率下勉强贷到款买房,那GF建议你继续租房,或是买较不吃力供款的小房。

关于GF 自己:
- GF于2011年初已存足买二房公寓的20%首付
- GF于2013年初已存足买独立屋>20%的首付
- GF目前以约$2000 的租金租栋较新的小独立屋 (2012市价为$800,000)
- GF 基于生活形式的可能变化,会考虑在2014年底-2016年出手买自住房 (即使房市还在继续下跌)。

Saturday 31 August 2013

August Vancouver Sales Stats (preview)

End of August
2013 vs 2012 vs 2011
Sales: 2530 vs 1649(+53%**) vs 2378 (+6%)
Lists: 4100 vs 4044 (+1.4%)
Ratio: 62% vs 41%

Est. Month-end Inventory: 16250 vs 17567(-7.5%)
Est. MOI: 6.4 vs 10.7 (Aug/12) vs 5.6 (July/13)

As expected, Sales increased vs 2012, but still fell just below 10 year August Sales Average.

- looks like 2013′s trough MOI was probably reached on July: 5.6

Historical Trough MOI:
2013-07?: 5.6 (balanced market)
2012-03: 5.3 (balanced/seller’s market)
2011-03: 3.2 (seller’s market)
2010-03: 4.3 (seller’s market)
2009-07: 3.0 (seller’s market)
2008-02: 4.3 (seller’s market)
2007-05: 2.9 (seller’s market)
2006-05: 2.3 (seller’s market)
2005-06: 2.4 (seller’s market)

So this year, the best month for sellers was likely July. At MOI of 5.6, it still fell somewhat in “seller-side of balanced market” territory – which quickly edged back to “buyer-side of balanced market” by Aug/13.

With the low rate-holds gradually expire in September, we can expect sales to decline, with the MOI returning to firm “buyer’s market” territory (>>7) in the next couple months.

**With regards to “Sales 53% higher than last year”, don’t forget that in 2012, mortgage tightening rules were announced on June 20 and implemented on July 9, causing buyers to rush their purchases (pulled forward demand) in June/July. However, “demand” dried up by August, causing a -31% YoY sales decline in Aug/12 vs Aug/11, and a -33% YoY sales decline Sep/12 vs Sep/11.

This year, the trigger that draws demand forward was rising fixed rates, and that gradually took place starting Jun/13. Unlike the mortgage tightening last year, which took place with 19 days of advance warning, this year the buyers have 2-3 months of rate-hold to complete their purchase before facing a higher rate.

It can be expected that similar “Demand drying up” situation will occur this year, with the timing being mid-September to October.

Friday 30 August 2013

Late entry: BoC Qualifying Rate is now 5.34% (Up from 5.14%)

After RBC bumped Posted 5Y Rate last week, BoC just raised mortgage Qualifying Rate on Aug 28 from 5.14% to 5.34%!

This is the first increase in Qualifying Rate in more than 500 days (since April 2012). 
Will affect 1/2/3/4yr Fixed + Variable + HELOC applications


Just some Stats & News

Greater Vancouver HPI benchmark price has already had 12 consecutive months of YoY price decline (Since July 2012).


July vs Jan Greater Vancouver HPI Benchmark Price % Change

Tax auditors target condo sellers in hunt for ‘flippers’

Aug 29 2013
They’re looking primarily for people who bought condos before they were built, intending to flip them for a profit as soon as the project is complete.

A Toronto tax lawyer is warning realtors — and people who’ve bought and sold new condos over the past seven years — that they could become unwitting victims of what he calls “abusive audit practices” by the Canada Revenue Agency.

Tax auditors have been targeting the once red-hot Toronto and Vancouver real estate markets, looking primarily for people who bought condos before they were built, intending to flip them for a profit as soon as the project is complete.

Some folks have received tax bills on the full gains. About 250 buyers in Toronto and Vancouver have been asked to refund GST and HST rebates on homes that auditors have deemed aren’t being used as primary residences.

Even some with no history of buying and selling multiple properties are being treated as if they are flippers and slapped with tax bills on 100 per cent of the gains, plus 50 per penalties, said Kitchener tax lawyer James Rhodes.

Thursday 29 August 2013

12 Signs You Are a Home-Owner in Vancouver

1. It’s the first of the month and you have just enough Pre-tax cash in your account to cover mortgage payment…
2.  Your meagre home equity is your savings plan.
savings plan
3. …which is completely decimated when you take it out as HELOC to pay for your roof repair
living room
4. You always do a double-take when you see rich-looking Asians walking past your still-unsold house.
double take
5. …but usually they're just on their way to a yard sale or food bank.
6. Passive aggressive notes from ghosts of grow-ops past litter your "mortgage helper" suite
spit in it
7. You needed to convince your friends to chip in into your down-payment. “Jane? The bank won't lend me enough money even after I borrowed thousands from Bank of Mom&Dad, can you PLEEEEEASE help???”
phone call
8. One look at your account and the banker just humors you for a couple minutes before shuffling you out.
will mcavoy
9. That career as a star (House) Flipper is still in the cards. “Hey, it could totally still happen! I'll just stay in my million-dollar crack shack for a couple more years...”
rob ford10. RRSP? TFSA?? 
11. Oh? Another one of my friends just left Vancouver. That’s. Just. Fantastic.
12. Your Tenant: "My landlord lives in the basement"
the simpsons race car bed
Photos and Gifs:,,,,

This is a parody in response to buzzbuzzhome's "12 signs you’re definitely still a renter"