gary17

so nobody likes tax free gain? better to pay rent and not into equity ? I know tax free principal residence doesn't exist in US... it's the gift from government Canada

I think it is still early to tell whether the 15% tax will have much impact It is interesting 10% of Metro Vancouver are foreign buyers -- 18% specifically in Richmond and 15% in Burnaby... It would be interesting to learn how many of these foreign buyers were already in the queue to get their Canadian Permanent Residence status and are simply buying to lock in RE price and not wanting to wait until they get PR. So if there is a significant percentage of this group that's already planning to be PR; then all this would do is delay the purchase for a few months .... I think the so called 'developers' with not enough deep pocket would get hurt the most... Time will tell. Gary

I wonder if residential REITS in Canada will now be attractive alternative LOL

It's somewhat encouraging that they're at least trying to do something. But... 1. It'll be interesting to see what the definition of a foreign buyer is. 2. I have a feeling that a lot of trusts are about to be opened in BC. Definitions in relation to additional tax imposed 2.01 In this section and sections 2.02 and 2.03: "controlled", in relation to the control of a corporation, means controlled, directly or indirectly in any manner whatever, within the meaning of section 256 of the Income Tax Act (Canada); "foreign corporation" means a corporation that is one of the following: (a) a corporation that is not incorporated in Canada; (b) unless the shares of the corporation are listed on a Canadian stock exchange, a corporation that is incorporated in Canada and is controlled by one or more of the following: (i) a foreign national; (ii) a corporation that is not incorporated in Canada; (iii) a corporation that would, if each share of the corporation's capital stock that is owned by a foreign national or by a corporation described in paragraph (a) of this definition were owned by a particular person, be controlled by the particular person; "foreign entity" means a foreign national or a foreign corporation; "foreign national" means an individual who is a foreign national as defined in section 2 (1) of the Immigration and Refugee Protection Act (Canada);

Unless 30 year interest rates are 2.3% for the next decade or two... Your alternative to stocks right now (other than cash) is to guarantee destruction of about 1/3 of your principal in real terms over 30 years if you're in the top tax bracket. If that doesn't change then even if margins fell this probably wouldn't be a bubble and if margins stay here stocks are way undervalued. Who knows if that changes, although it seems crazy to think it wouldn't. Can you please elaborate / clarify what you mean? 30 year bond interest rate? What alternatives are you referring to? I can't really understand what you are trying to say. Thanks!

YES it is true LOL market price up 30% ; 20% downpayment (equity) means what.... ....30/20 = 1.5x! LOL unfortunately it is looking very likely i will be joining the market soon.... hopefully BAC dividends will come rescue me when YVR RE collapses

http://www.bnn.ca/News/2016/6/28/Chinas-CITIC-Bank-tries-to-seize-real-estate-assets-in-Canada.aspx

I believe the rule is 12 month but anyway - most 1st generation immigrants don't know I know in Asia there is actually a household office that keeps track of where people live and transactions of real estate - do we have that agency here? Isn't it up to CRA to "find" cheats? Why isn't it the other way around - that you have to proof it is principal residence so you won't get taxed on transaction ? LOL

1 All sellers negotiate commission with the agent 2 In Canada it's a you pay tax if you get caught - so many people are willing to take the chances they won't get questioned. I don't think the property transfer tax office for the province flags transactions to CRA if it is principal residence or investment or income.

I find the media missing the point on the RE situation in Vancouver and Toronto. foreign investment and tight supply are part of it. but the biggest driver is the fact flipping RE is tax free if one lives in in for one year. combine with low interest rates and down payment requirements -- you effectively have a very lucrative return based on financial leverage and is all tax free. Say one buys a $1.5m house in Vancouver with 20% down = cost of $300k. 1 year of 2% interest on $1.2m mortgage is only a few thousand dollars. next year sell RE for $1.9m and make $400k tax free. that's more than 100% return again tax free if $400k were to be made from earned wages, that's about $800k for a high income person making over 200k$. 4 years vs 1 year. I hope the media would report more on this

RB - as someone who has made 10 offers in houses in North Vancouver - I can tell you those numbers are REAL! The last one I made for $1.1M went for $1.3M - basically you can search "City of North Van map" and "District of North Van Map" and find the assessment price - and compare that with listing price - typically one lists 2x assessment value; and get 10 offers and finish 300K$ over asking. and the seller likely gained 37% last year , leverged... 5x? so 100% ..... oh, did I say TAX FREE? LOL

We should ask the MPs and Mr. Prime Minister if as the highest paid public post in Canada he can afford to live in Vancouver LOL!!!!

lol http://www.news1130.com/2016/06/02/prospective-buyers-shut-out-of-townhome-sales-in-richmond/

I think two 1 US inflation data 2 Japan GDP was actually annualized at 1.7% - much higher than anticipated Market might be thinking the global slow growth may have bottomed and only up from this point , with US leading the way... I could be a CNBC writer in another life LOL

the bank is not taking on much risk $10m first mortgage on a property worth $30m bank only needs to recover the $10m or 33% of purchase price. can Vancouver real estate fall 66%?

the crazy prices continue - we saw this over the weekend

i believe for foreigners there is a limit - i think the article suggests a very high down payment (21M down , $9.9M mortgage) whereas a typical canadian / resident with Canadian income can get away with 10% down I believe. SO the bank is willing to take that risk.

How do they get mortgages for these properties? Where's the income coming from? If there's a default, is there recourse? a) they recognize foreign income - probably the parents company in China is ok. and Parents are co-signers. b) they could also be getting a mortgage from HSBC - I know they lend money to Asians in Canada if they have deposit with HSBC in HK / China or Taiwan.

I agree - essentially with weak oil & recovering manufacturing , the construction / real estate industry is "holding the government hostage". It's back to the do you bail out wall street or main street. Do you like a few next generations can't afford housing or risk the entire country go into a deep recession by raising rates...

http://vancouversun.com/storyline/student-owns-31-1-million-point-grey-mansion LOL - this is the typical phenomenon... question is how much more money will flood into Vancouver RE

I wonder if we could start a poll on the extent of the market correction people are seeing in Vancouver and Toronto. If it is 20% - things just go back to where they were 2 months ago lol

why would we run out of money low rates = cheap money !

can't predict macro but most likely low rates to stay forever so Vancouver RE should go towards the sky

2 days ago i was competing for a 33 foot lot as well - there were 19 offers and sold for 1.31M didn't get it

Wisdom I think FI know- they do a credit check as part of mortgage app and would see the existing line of credit. they also Usually ask how the deposit is funded. e