Housegate: When did the Mayor buy and when did he know he would buy there?

To say that our breaking blog post about Vancouver Mayor Gregor Robertson listing his house for sale is a story with "legs" is a bit of an understatement.

Our story lead to media questions for the Mayor, prompting a press release (see also here).Turns out his worship has not only listed his home for sale, but he's already bought new digs, which is where our story really heats up.

Our post originally queried whether our fair Mayor was bailing on the bublicious Vancouver real estate scene... grabbing the equity that has grown since the Mayor paid $450,000 for his Cambie area home back in 2005 (it's on the market now for $1.9 mil).

But in the press release, Gregor not only addressed the reasons for selling (downsizing due to empty nest syndrome), but he also came out with a statement from the City Solicitor.

The City Solicitor?

"The mayor’s family is selling their home and downsizing now that their kids have graduated high school. They’ve bought a new home within a block of York Avenue in Kitsilano, but the location isn’t being disclosed for security reasons.

The City Solicitor [Francie Connell] has informed the Mayor that there is no legal conflict with voting on matters related to the Point Grey–Cornwall bike and pedestrian safety upgrades at this time. However, out of an abundance of caution, the Mayor informed the City Solicitor that he will be recusing himself from voting on the upcoming Point Grey–Cornwall project. The City Solicitor will review the final staff report on the project and provide any further advice to the Mayor on this matter as required."

Huh?

Speculation is that the Mayor has bought (exact address removed) on Stephens Street in Kitislano.   XXXX Stephens Street happens to sit at the western-most end of York Avenue.

Suddenly you understand the need for input from the City Solicitor because when the Mayor 'downsized' to a house just off Point Grey Road near York Ave, he opened up a huge can of worms.

This part of York Avenue just so happens to be the terminus of the latest, and highly contentious, bike lane proposal being pushed through by the City.

The new traffic-calmed bike route being proposed for York Ave is part of a Burrard Bridge to Jericho Beach 'corridor'.

The section between Stephens St and Chestnut St is a hodgepodge of no changes, one-way “counterflow” bike lanes, one-way roads, two-way roads, and two-way bike tracks. It's a critical stretch that will dramatically impact the neighbourhood... and it's garnered a lot of negative neighbourhood attention.

On May 23rd, CBC news talked about the City's public consultation for the contentious plan.

The City of Vancouver is considering a separated bike path along Cornwall Avenue and Point Grey Road in the city's Point Grey neighbourhood.

The first of three open houses to discuss the plan takes place tonight. Another open house takes place Saturday at 10 a.m. PT at Bayview Elementary School, followed by a final presentation Monday at 4 p.m. PT at the Kitsilano Public Library.

What no one told the public was that the dedicated bike path would lead to the front door of the Mayor's new house. A house which - at the time of the meetings - Robertson may have already bought (or was under negotiation to buy).

To borrow from a famous political phrase: when did the Mayor buy and when did he know he was going to buy it?

It's an important question because this story now has all the appearances of a massive conflict of interest.

• Did Robertson scope out this new house before or after the plans for the bike route were underway? 
• How much did the Mayor's house hunting factor into the designing of this contentious new bike route?
• How much influence has the Mayor exerted to get this route set up to terminate at his doorstep?

At first blush you can't blame people for wondering if Robertson influenced the process to ram the the proposal through channels. The very fact he hid his real estate purchase from the public during the Open Houses process certainly creates the aura of impropriety.

How significant do you think this fact is to those who attended the public meetings to voice their displeasure with the proposal?

The public has a right to know what role all this played in the political process at City Hall. When did the Mayor buy and when did he know he would buy there?

Sounds like it's time for another press release, Gregor.

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Vancouver Mayor responds to yesterday's post - Updated: media speculating on Mayor's new home.

See end of post for update on media speculation about Mayor's new digs.

Seems our post yesterday about Gregor Robertson, the Mayor of Vancouver, putting his home up for sale created a bit of a stir. Several newspapers have picked up on the story this afternoon including the Province and MetroNews. From the Georgia Straight newspaper:

Mayor Gregor Robertson's office has issued a statement after a local blogger revealed that his home was for sale.

In a post entitled “Guess who’s trying to cash out of the real estate market in Vancouver?”, the Whispers from the Village on the Edge of the Rainforest website provided the listing information for the mayor’s six-bedroom and four-bathroom residence at 912 West 23rd Avenue.

It’s being advertised for $1.95 million.

“So it begs the question, if even the Mayor of Vancouver is bailing on the Vancouver real estate market, has the slide begun in earnest?” the blog cheekily declared.

Responding to media inquiries, the mayor’s office released a statement saying the family has moved farther west, to Kitsilano.

“The mayor’s family is selling their home and downsizing now that their kids have graduated high school,” reads the statement. They’ve bought a new home within a block of York Avenue in Kitsilano, but the location isn’t being disclosed for “security reasons.”

Apparently the revelation of the sale has triggered a whole series of political questions. According to the press statement:

“In recent weeks the Mayor apprised senior staff, including the City Solicitor, of this property transaction and they were requested to provide advice and a legal opinion on any possible conflict that the Mayor might be in with regard to future decisions of Council related to the Point Grey/Cornwall bike corridor. The City Solicitor has informed the Mayor that there is no legal conflict with voting on matters related to the Point Grey Cornwall bike and pedestrian safety upgrades at this time.”

The Georgia Straight wonders if the move is part of a broader set of political intrigue:

What's intriguing about the move is that Robertson now lives much farther away from his workplace at Vancouver City Hall.

Normally, cyclists like to live closer to the office.

Perhaps this suggests there could be federal political implications for Robertson, who is sometimes viewed as a future candidate for the Liberal Party of Canada.

His old residence is in the proposed new riding of Vancouver-Granville, which is being carved out of parts of other ridings in the city. There is no MP for this riding yet.

His new home is likely in Vancouver Quadra, which is represented by Liberal MP Joyce Murray. That's because most of York Avenue is west of Arbutus Street, which is the boundary for the riding. East of Arbutus is within Hedy Fry's riding of Vancouver Centre.

Murray ran against Justin Trudeau in this year’s federal Liberal leadership race.

Whoever becomes the Liberal candidate in Vancouver Quadra is likely a shoo-in to get elected to Parliament.

Could Robertson be planning a challenge against Murray for the Liberal nomination after he wins a third term as mayor in 2014? Stay tuned.

Oh my.  Did we start something?

So what do you think.  Is it simple downsizing? Capitalizing on bubble profits? Or a move borne of broader political considerations?

Update

The media seems to be all abuzz with the Mayor's new home.  And with the Mayor's press release declining to release the location of his new home for 'security reasons', the frenzy has only intensified.

Let's face it... the Mayor's address is public knowledge on nomination forms, why the secrecy now? Is it because of the bike lane proposal along York in Kitsilano... just steps away from the Mayor's new digs?

This just in on twitter:

BIV is reporting that the new digs are (XXXX - address removed) on Stephens Street:

From the realtor description:

Show-stopping ocean and mountain views abound from this outstanding, beautifully designed and renovated ½ duplex tucked away on a quiet street in Kitsilano within ½ block of the beach. The home of an award winning interior designer that has graced the pages of many prestigious design publications, this property has just hit the news stands in the special interest Canadian House and Home 2008 ‘Makeover Issue". The unique multi-level flooplan offers 2 bedrooms, 2½ baths, den, office and 3 large ocean view decks. Every detail was masterfully considered in the extensive renovation. Gorgeous quality finishes include kitchen with professional grade stainless steel appliances, hardwood floors, new bathrooms with limestone, porcelain and mosaic tiles, steam shower and heated floors, built-in speaker system, 42” TV with B/I surround sound, built-in storage, and gorgeous designer lighting and fixtures. Fabulous outdoor living spaces include 3 gorgeous view decks (one with gas BBQ hook-up and over-head mounted gas heater) and the privately set Italian style garden with a covered spa hot tub area. This home has ample heated storage with B/I wine storage and a single car attached garage. A stunning home and an absolute must see!

(google streets image of house removed)

We're sure the neighbours are thrilled. You can read BIV's story here.

Follow up post: July 11, 2013 - Housegate: When did the Mayor buy and when did he know he would buy there?

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Guess who's trying to cash out of the real estate market in Vancouver? - Updated

This 6 bedroom, 4 bathroom 2,922 square foot home sits at 912 W. 23rd Avenue in Vancouver. It just came on the market with an asking price of $1,950,000.  

Here is how the listing describes the house:

Wonderful Douglas Park. Converted big character family house w/5 bedrms up + lovely 1 bdm suite down situated on 2 legal lots. Built circa 1912, this beautiful mechanically updated Craftsman home retains its original charm with refinished fir floors, stained glass, casement windows, parlor pocket doors, deep baseboards & spacious principle rms. Very bright open plan with windows abound & an amazing light filled top floor master bedrm + ensuite. New electrical and plumbing(2005), new roof (2002/7), kitchen & bathrms(2005). Enjoy the lush perennial country garden from the south deck protected by established hedges & trees. Walk to schools, shops, parks and transit/Canada Line. Open Sunday/July 14, 2-4pm or call to view by appointment.

One of the interesting features is the kitchen.  The current owner once described the look as "city farmhouse."

For those who follow such things, the kitchen is familiar. Didn't we see it a couple of years back in an article over on the blog, The City Caucus?

The article was titled "Why does a corporation own Mayor Gregor's Vancouver home?" We can't speak to that particular issue, but damn that kitchen does look awfully similar, doesn't it?

Now... lest you think we base our revelation solely on the similarity in that photo alone, there's always this:

Clearly Gregor has decided to fold his R/E hand and cash in on his bubble inflated asset.

So it begs the question, if even the Mayor of Vancouver is bailing on the Vancouver real estate market, has the slide begun in earnest?

Especially since this move comes a mere six months after  it was revealed Robertson had divested himself of the company he co-founded, Happy Planet.

First Robertson sells his Vancouver based business, now he's trying to dump his overvalued - and overpriced - home (one faithful reader advises it's assessed at $1.6 mil). Is Gregor reading the city's economic tea leaves and pulling stakes before it's too late?  Sure looks like it.

Maybe it's time for his opponents to update that infamous video they released for the last election?

(hat tip: Duplicity)

For follow up post see June 10, 2013: Vancouver Mayor responds to yesterday's post - Updated: media speculating on Mayor's new home.

And, July 11, 2013 - Housegate: When did the Mayor buy and when did he know he would buy there?


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Reflections of an economic recovery?

US economic recovery for dummies? (hat tip @Not_Jim_Cramer)

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This month's real R/E headline? Benchmark price of a Whistler condo has now fallen 41.2%

So it's a few days into a new month, and the yin and yang of real estate pumping is in full swing.

The yin and yang is an ancient concept referring to complementary opposites, such as light/dark or day/night.  But it also reflects the way the industry reports and spins the monthly real estate news.

In Vancouver the industry gushes that Vancouver area home sales are up nearly 12% from last year.

Nifty headline.

But what that headline doesn't tell you is that last month’s sales were also 22.2% below the 10-year sales average for the month and that those same June sales actually plunged 17% from the abysmal sales recorded in May.

Talk about spinning the news.  The reality is June 2013 was the worst June in our market since 2008. And, as Larry Yatkowsky notes, most median price categories were down last month.

But it gets worse.

Take a close look at the stat's package from the Real Estate Board of Greater Vancouver and you discover that the benchmark price of a single-detached house on Vancouver’s West Side is $2,070,200, a 6.1% decrease from a year ago.

Yikes!

But nothing compares to Whistler where we learn that the benchmark price of a Whistler condo has fallen 41.2% from five years ago and now sits at $222,800.

There's the real headline in all of this.

Analysts at Scotiabank are taking a close look at these stats from Vancouver and similar ones from Toronto and they aren't buying into all the headline hype either:

“Like Vancouver, last June was when the bottom fell out of the market via a 13.2% m/m seasonally unadjusted drop compared to May 2012 that made it among the weakest months of June over recent years. Thus, the sharp shift lower in year-ago base effects is now containing the year-over-year changes but still leaving behind trend weakness in the resale volumes and a much cooler market than prior to the Spring of 2012. Now with Q2 data, we are transitioning toward comparing against the much weaker volumes that began to emerge last Spring. I therefore don’t buy the hype that the correction is bottoming or reversing just because the year-ago pace of decline is ebbing.”

The pumpers shriek the market is turning around and we're in the early days of a recovery. Hopefully they won't let the Yang kick them in the ass.

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The Fourth of July

*Images courtesy of WilliamBanzai7 (see his blog here). As noted in the comments section, the morse code at the bottom of both images says "the fascists are coming".

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Change: Mike McCardell says goodbye, joining a parade of others

The basic lesson of our relativistic universe is that things change. And change, it seems, is all around these days.

A few weeks back we learned that editorial cartoonist Bob Krieger was leaving The Vancouver Province newspaper - a victim of the deep staff cuts going on at Pacific Press. Krieger was one of the best in his field and his absence will be felt (you can still follow Bob on twitter @kriegercartoons).

This was a statement posted by Kreiger on his site (click on image to enlarge):

Next we learned the excellent reporter David Baines, of the Vancouver Sun, was going too (@dmbaines).

And tonight Mike McCardell, in a statement that caught everyone off guard, announced at the end of this evening's Global TV newscast that it was his last appearance after 32 years.

After returning from a glorious, sunny long weekend, tonight's post was going to focus on July's r/e statistics. Instead we acknowledge change and bid adieu to three of Vancouver's best story tellers... the top in each of their fields.

Thank you gentlemen.  You all will be missed.  We sincerely hope we will continue to see you in blogs and on twitter.

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Happy Dominion Day... Happy Canada Day

Dominion Day was the name of the holiday commemorating the formation of Canada as a Dominion on 1 July 1867. The holiday was renamed late at night by act of parliament without a quorum on  October 27, 1982.  Thus Dominion Day became Canada Day.

So while we call it Canada Day now... we fondly wish everyone who drops by today a Happy Dominion Day, an ode to tradition. 

Happy Birthday Canada!

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Are these the underwater home-owers mortgage broker Calla was targeting with her radio ads?

The other day we pondered if Underwater Mortgages were a Sign of the Times?

It was prompted by the fact that Angela Calla, mortgage broker and host of CKNW radio's 'The Mortgage Show', was running radio ads targeting home-owers who may currently find themselves in an underwater mortgage position at mortgage renewal.

Could it be that the market has entered this volatile condition already?

We've often talked about how some area's, Richmond in particular, have been hard hit the last couple of years. 

So are some owner's in underwater trouble?

We note a recent listing by one of our favourite Richmond realtors, Alphabet Arnie. It's for 222-7551 Minoru Blvd, a 2 bedroom condo in Richmond (click on image to enlarge).

Promoted as having just had it's asking price reduced, it's currently available for $309,800.

A deal?

The property is currently assessed at $291,700...

Even more interesting is that a quick google search turns up that this property was listed for sale back on Sept 14, 2009 for $340,000 and it subsequently sold.

Presumably whomever bought it then are the ones now selling.  Now we're not sure what this sold for in 2009.  $340,000 probably seemed like a steal at the time.

But as values in Richmond have plunged, and the current owner tries to hawk a $291,700 assessed condo for $309,800... you can't help but wonder if this is exactly the type of home-ower that Angela Calla was targeting with her ads.

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Car Cam Realtor Ian Watt bids farewell to the video blog

Ian Watt had hair?

That and other tidbits in Ian Watt's final video blog as Watt's parks the video cam along with his car.

For nostalgia purposes, here is one of Ian's first cam car vids from May 1, 2008 talking about car cam video blogs. Ian asks, "who watches this stuff?"

To date it's only attracted 65 views. :

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Bank of England warns banks of risk of sharp global interest rate rise

Reuters is out with an intriguing bit of news.

Mervyn King, the governor of the Bank of England, has issued a stunning warning:

The Bank of England warned banks and borrowers on Wednesday about risks from a potential abrupt rise in global interest rates, and said banks might need to further bolster their capital cushions to protect against this.

The past week has seen a sharp rise in global bond yields since U.S. Federal Reserve Chairman Ben Bernanke said that the U.S. central bank may scale back bond purchases later this year.

BoE Governor Mervyn King said on Tuesday that markets had "jumped the gun" in their sharp reaction to Bernanke's comments, but the BoE's half-yearly Financial Stability Report said more bond yield rises could hurt UK banks, insurers and borrowers.

The BoE said that it had ordered an investigation into the vulnerability of Britain's financial institutions and borrowers to higher interest rates, to report back by September to its new risk watchdog, the Financial Policy Committee.

"Financial institutions and markets are also vulnerable to an abrupt rise in global interest rates. And some UK borrowers remain highly indebted, which could result in losses for UK banks," the FPC said.

It's an intriguing statement because King, as we all know, steps down at the end of this month as the head of the Bank of England.

His replacement? Former Canadian central bank chief Mark Carney, who many economists expect to advocate a long-term commitment to low interest rates as a way to keep down bond yields.

King's call for higher capital requirements has bankers privately complaining that higher capital requirements and limits on leverage are hampering their ability to lend. But this is strongly disputed by the BoE, which says healthier long-term capital levels make it cheaper for banks to borrow.

Wednesday also saw the BoE allow banks to scale back some of the short-term cash they hold against shocks to encourage more lending to the economy.

Many believe the BoE is a long way from tightening monetary policy, and a minority of BoE rate-setters have been voting for more stimulus for the past few months due to the weak state of Britain's economic recovery.

So what gives with Mervyn King and his warnings of a sharp global interest rate rise on the eve of his departure of BoE governor?

Is his looming retirement giving him the freedom to say what he really fears?

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Underwater mortgages a sign of the times? Mortgage Broker radio advertisement targets underwater mortgage holders.

In the comments section of today's Vancouver Condo Info discussion thread, contributor De La Riva Guard shares what he aptly terms a 'watershed moment' in our real estate bubble.

At the 10:51:53 mark of today's CKNW 980 AM broadcast (access the radio station's audio vault here), you can hear a new commercial from mortgage broker Angela Calla. For those who don't know her, Calla also hosts "The Mortgage Show" on CKNW. From her website bio:

Angela Calla, Host of "The Mortgage Show" on CKNW AM980 Saturdays at 7pm, was named the "AMP of the Year" in 2009 by CAAMP. Angela has also ranked in the Top 50 Mortgage Brokers in Canada 5 years in a row!

And what did she say in her new commercial that warrants a post?

You opened the envelope a few months ago to find out that your mortgage is actually higher than the assessed value of your property. So now what? Call the Angela Calla mortgage team...

So leading mortgage brokers are now starting to advertise to attract customers who are suddenly finding themselves underwater on their Greater Vancouver home mortgages?

With this now happening, you know the situation must be far worse than the media has led us to believe.

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Don't worry. Be Happy. There will be no housing crash... at least according to Dan Cayo

Meet Dan Cayo.

He's a columnist with the Vancouver Sun.

According to his bio, Cayo has worked in journalism all his adult life. At one time or another he has served as a newspaper writer and editor, a radio and television reporter and commentator, a wire service reporter, and a journalism teacher. From mid-1997 until mid-1999 he took a leave of absence to run the Atlantic Institute for Market Studies, a business-funded think-tank based in Halifax, but he continued to write regular columns for eight newspapers across Canada. He came to the Vancouver Sun as editorial page editor in 2000. In the fall of 2003, he made the switch to column writing.

Like many who follow real estate, Cayo made note of US economist Paul Krugman's comments about our real estate bubble.

His response?  'Phhffft'

Of course we're paraphrasing here.  Cayo outlined his thoughts in a column titled, "Don't worry, city's house prices won't tank."

Don't worry about alarmist economists - those at the Organization for Economic Cooperation and Development, for example, or Nobel Prize-winner Paul Krugman - who are predicting a real estate crash.

Because house prices in Canada are poised to edge up, not plunge down, according to a new analysis from the Conference Board of Canada. And Vancouver - despite having the highest real estate prices in the country, and despite being the target of incessant warnings from worrywarts who see a bubble poised to pop - will turn out to be one of the most resilient markets of all.

You gotta love those bold enough to go on the record and make such confident predictions.

Cayo constructs the article around the comments of Mario Lefebvre, the Director of the Centre for Municipal Studies at the Conference Board of Canada. According to Lefebvre:

Vancouver's steady population growth, in particular its unusually high percentage of foreign-born residents, is the basis of this confidence.

"The foreign-born population can significantly alter the landscape of a country's housing market," Lefebvre wrote. "In many instances, immigrants arrive in a new country with some pre-established wealth. If a specific market welcomes a relatively large share of wealthy immigrants, their arrival creates a new source of demand that not only stimulates demand for housing, but can also raise house prices significantly without any changes to personal disposable income per capita."

In other words... that's why it's different here (or at least why it's different in those housing bubbles that still exist).

This is true not only in our market, but also in another seven of the 27 countries that the OECD identified, using two different measures, as having housing stock that is over-valued by 20 per cent or more. (The others with demographics similar to ours are Belgium, Norway, New Zealand, France, Austria, Sweden and the United Kingdom.)

You will recall that Krugman's gloomy view echoes former Bank of Canada governor Mark Carney and others who worry that Canadians are too deeply indebted and over-leveraged to a dangerous degree.

These factors lead the OECD to concluded earlier this month that, nationally, Canada's housing market is over-valued as much as 30%, based on the ratio of house prices to disposable income, and up to 60% if the comparison is to the historical value of rent. Cayo observes thatit is a safe bet, I think, that Vancouver's numbers would look even worse.

So why isn't this a concern to Lefebvre?

"You've seen some declines (in house prices). But that seems to be slowly, slowly ending. You're actually bottoming out."

An upward trend will continue says Lefebvre because it's not just the steady influx of foreign money, but our endless population growth.

"As long as you have population growth," he said, "people will need housing."

For as far as Lefebvre can see into the future, he is confident Vancouver will continue to have population growth. And this region will continue to lead the way in attracting a steadily expanding proportion of foreign-born residents, many of them arriving with quite a lot of money.

The bottom line: Most parts of Canada will see, very soon, a modest upward trend in housing prices, and those that don't are unlikely to see anything worse than a small decline. Meanwhile, Vancouver is high on his list of the least likely places to see any problem at all.

See?  Rich people will keep moving here and bring buckets of money with them to support our housing market.

Sounds like a sound economic argument to us.

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Flipper fails to have pre-sale contract ruled invalid. Ordered to pay $750,000.

 

Last night CBC-TV ran a story which shows the danger of condo pre-sales when they profiled the story of a man who signed a pre-sale contract for a luxury condo in Vancouver and has now lost almost three quarters of a million dollars after he failed to complete the final sale on the unit.

Lawrence Austin signed a deal to buy the condo at 1499 West Pender in the spring of 2008, just months before the global financial crash.

Austin agreed to pay Reliance Properties $2.71 million for the 25th floor Coal Harbour condo, and put down a 10% deposit of $271,000.

But within a few months the global real estate market had crashed and Austin began looking at his options to get out of the deal.

Initially, he argued that at the time of the sale he had made an oral agreement to be able to assign the pre-sale agreement to another buyer, regardless of price.

But the developer told him his pre-sale agreement restricted him from assigning it to another buyer for less than the purchase price.

Austin then tried to get out of the contract by arguing that the developer failed to give him a copy of the original disclosure statement before he signed the contract, as required by law.

The developer disagreed on both points, and in the winter of 2011 when the building was completed, Austin didn't pay the balance of the purchase price.

Six months later, the developer sold the unit for just over $2.05 million and sued Austin for the difference in price, minus his deposit.

In her ruling issued last week, Justice Catherine Bruce dismissed Austin's claims that he had not received the disclosure statement, noting he had signed a statement saying he had received it at the time he inked the deal.

She also found nothing substantial to support Austin's claims that he had an oral agreement with the developer permitting him to assign the pre-sale agreement without the developer's agreement.

The Court ordered Austin to pay the developer nearly $500,000 to cover the difference between the pre-sale and final sale price, minus his deposit.

Austin was also ordered to pay the maintenance fees and property taxes for the six months it took the developer to sell the condo.

Meanwhile it seems the industry is fighting hard to prevent future buyers from trying to escape their contract based on changes to the disclosure statement.

CBC reports developers, through the Urban Development Institute (UDI), are lobbying the Province to change the act because buyers are using it as a loophole.  The UDI says buyers simply want out of contracts signed before the market had fallen.  "To allow them to do so leads to uncertainty and... slows down the industry and the economy as well as impacting housing supply and prices."

(hat tip Kabloona on VCI)

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BC-CTV poll: Do you think a condo is a good investment in Metro Vancouver?

BC-CTV has a poll running tonight and the question is: Do you think a condo is a good investment in Metro Vancouver?  You can find it on their website here.

The poll is also running on their Facebook page. They say that your answer could be used during CTV News at 5:00pm tomorrow.

Naturally, since this is one of the networks employees from MAC Marketing Solutions used as a vehicle through which to lie to to the public about Asian demand for condos during Chinese New Year, the tie in is irresistible:

"If it were... marketing companies wouldn't go on your TV station and deceive vieweres about the demand for those condos from offshore Asians."

Feel free to share your thoughts with them too.

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Making the news in China - Canada vulnerable to 'big deleveraging shock'

The Chinese headline reads: 诺奖得主：加拿大经济极端脆弱 楼市泡沫要破灭

If your Mandarin is a little rusty, it reads: "Nobel Laureate: Canadian economy is extremely fragile. Housing bubble about to burst” (hat tip VMD on Vancouver Condo Info)

It's Paul Krugman's article, which on this side of the ocean has been headlined: Paul Krugman warns Canada vulnerable to a ‘big deleveraging shock’

The Nobel prize winner suggested Canada is an important test case for what lies behind the 2008-09 recession and the sluggish recovery. In other words, if the U.S. experience is anything to go by, Canada might be undergoing a housing and debt bubble, and if so, he advised people to watch what happens next.

With interest rates at ultra-low levels and Canadian household debt and housing market stabilizing, market strategists and economists like Krugman here are scrutinizing every bit of economic data for clues on what the economic outlook will bring....

Krugman sees potential red flags in the large spread between U.S. and Canadian house prices, and the fact that Canadian household debt levels are climbing even as U.S. ones are declining.

"So if the new non-centered bank view is right, Canada ought to be quite vulnerable to a big deleveraging shock despite its boring banks," he wrote. “Of course, people have been saying this for several years, and it hasn’t happened yet — but remember, the U.S. housing bubble took a long time to pop, too."

So Krugman now joins the chorus waiting for the Canadian bubble to burst, it's lofty real estate values not appearing to have realistic means of support.

And more importantly that viewpoint is gaining coverage in China.

Meanwhile Scotiabank is out with a report that notes:

"housing corrections often last years...and this one is unlikely to be any different"

So if HAM (Hot Asian Money) is going to come flooding back to support our housing values, it's going to have to buck the conventional wisdom that Vancouver is overvalued and a sure investment loser.

Meanwhile locals continue to insist Vancouver isn't overvalued.  The latest tidbit comes from our bud Helmut Pastick who insists:

"Prices in Vancouver are... fairly valued... It's a wonder that prices aren't even higher"

Are you ready for another round of R/E hype about how 'now's the time to buy?'

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