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  #6821  
Old Posted Apr 21, 2017, 12:37 AM
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Originally Posted by MonkeyRonin View Post
Hence, streetcar suburbs being the best of both worlds - most homes & small buildings have a laneway garage in the back, and larger buildings have underground parking. So owning & operating a vehicle is not a hassle, but not essential either.

And most North American inner cities more closely resemble this than they do the congested, parking-free cores of Manhattan or innermost Montreal.
Good points!
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  #6822  
Old Posted Apr 21, 2017, 4:45 AM
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Originally Posted by travis3000 View Post
Yes those scenarios you speak of do happen, nobody is denying that. More so in Toronto than north of the city but it can all trickle down. From reading the legislation, there are enough loopholes and exceptions that these type of situations will continue to play out.

I do believe in the short term (the next 1 to 9 months) real estate prices will stagnate across Southern Ontario. I believe we were already at our peak in terms of prices and this new legislation will be the catalyst which will tone things down. Prices will certainly relax and in some cases claw back 5-10% in the most over heated of markets, but I do believe by next year they could start rising again similar to what is happening now in Vancouver as people realize these measures are all bark and no bite.
Year over year sales in Vancouver fell further last month again. Prices are not up, they are down over the past 6 months. Looks like a typical bear trap before the steam runs out. Lots of things will be happening in 2018 with interest rates and tightening up along with oversupply saturating the market.
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  #6823  
Old Posted Apr 21, 2017, 1:32 PM
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Originally Posted by csbvan View Post
There is no corporate loophole in Vancouver. The 15% tax applies to corporations if they are a "foreign entity". You cannot incorporate around it.
I create a new company called "HouseCo". It has a dual share structure. Class A shares are voting shares. Class B are equity shares. HouseCo initially values of Class A shares at $10 each and equity shares at $10M.

Jim from Burnaby is issued 2 Class A shares (he puts $20 into HouseCo), Bob from Seattle contributes $10M in corporate capitical (say as a bond) and receives 1 equity share. HouseCo now buys 4 houses in Vancouver. Since the ownership structure has 2 out of 3 shares owned by a Canadian, the company is considered 66% CDN ownership and therefore not subject to the 15% tax. And since HouseCo is a private company, it can change the share valuation at any time, and pay dividends as they see fit (99.9% to Class B shares and 0.1% to Class A shares). ***

Can it be done? Yes. Has it been done?


*** Note this is a simplistic example, however while a more complex corporate structure is required, it is fully compliant with CRA and provincial legislation.
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  #6824  
Old Posted Apr 21, 2017, 2:33 PM
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Originally Posted by cornholio View Post
Year over year sales in Vancouver fell further last month again. Prices are not up, they are down over the past 6 months. Looks like a typical bear trap before the steam runs out. Lots of things will be happening in 2018 with interest rates and tightening up along with oversupply saturating the market.
I thought prices in Vancouver were starting to trend back up, after the (surprisingly) modest drops over the past six months.
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  #6825  
Old Posted Apr 21, 2017, 3:06 PM
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Xelebes Xelebes is offline
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Originally Posted by shreddog View Post
I create a new company called "HouseCo". It has a dual share structure. Class A shares are voting shares. Class B are equity shares. HouseCo initially values of Class A shares at $10 each and equity shares at $10M.

Jim from Burnaby is issued 2 Class A shares (he puts $20 into HouseCo), Bob from Seattle contributes $10M in corporate capitical (say as a bond) and receives 1 equity share. HouseCo now buys 4 houses in Vancouver. Since the ownership structure has 2 out of 3 shares owned by a Canadian, the company is considered 66% CDN ownership and therefore not subject to the 15% tax. And since HouseCo is a private company, it can change the share valuation at any time, and pay dividends as they see fit (99.9% to Class B shares and 0.1% to Class A shares). ***

Can it be done? Yes. Has it been done?


*** Note this is a simplistic example, however while a more complex corporate structure is required, it is fully compliant with CRA and provincial legislation.
Would run afoul of Mind & Management tests if Bob is determined to have had decision power in part over which properties were bought.
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  #6826  
Old Posted Apr 21, 2017, 4:54 PM
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Originally Posted by shreddog View Post
I create a new company called "HouseCo". It has a dual share structure. Class A shares are voting shares. Class B are equity shares. HouseCo initially values of Class A shares at $10 each and equity shares at $10M.

Jim from Burnaby is issued 2 Class A shares (he puts $20 into HouseCo), Bob from Seattle contributes $10M in corporate capitical (say as a bond) and receives 1 equity share. HouseCo now buys 4 houses in Vancouver. Since the ownership structure has 2 out of 3 shares owned by a Canadian, the company is considered 66% CDN ownership and therefore not subject to the 15% tax. And since HouseCo is a private company, it can change the share valuation at any time, and pay dividends as they see fit (99.9% to Class B shares and 0.1% to Class A shares). ***

Can it be done? Yes. Has it been done?


*** Note this is a simplistic example, however while a more complex corporate structure is required, it is fully compliant with CRA and provincial legislation.
In this kind of setup, though, Jim could likely viciously screw Bob anytime. So, either Bob has to really trust Jim (like my dad and myself in our current corporations' setups... it's possible), or else Bob has to be a ruthless Chinese Triad style gangster and Jim has to be very aware that while betrayal will gain him some ten million dollars, he won't be able to enjoy them for long.
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  #6827  
Old Posted Apr 21, 2017, 7:56 PM
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Originally Posted by travis3000 View Post
Forget about Phil Soper and TREB, every single economist I've heard from agrees that the situation in the GTA involves less foreign investors compared to BC. So the percentage is quite likely lower then those figures you quoted. The truth is, nobody knows the exact number. But from my personal experience its not as high as many in here would like to believe.
It may be lower than Vancouver's but it is definitely higher than what the TREB claims. One just needs to look at how Toronto's market exploded in sync with Vancouver introducing the foreign buyer's tax.

As I mentioned previously there are many ways for foreign buyers to sway a market, without it being strictly Foreign Buyer A slapping down cash for Canadian Seller B's house.
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  #6828  
Old Posted Apr 21, 2017, 8:54 PM
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Originally Posted by cornholio View Post
Year over year sales in Vancouver fell further last month again. Prices are not up, they are down over the past 6 months. Looks like a typical bear trap before the steam runs out. Lots of things will be happening in 2018 with interest rates and tightening up along with oversupply saturating the market.
Interest rates are actually declining right now, RBC just lowered their 5 year rate by 0.2 points.

As for the Vancouver pricing, they are showing signs of increasing yet again.

http://www.theglobeandmail.com/real-...ticle34726396/

http://www.cbc.ca/news/canada/britis...limb-1.4073731
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  #6829  
Old Posted Apr 22, 2017, 12:21 AM
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It's funny, the media is exploding about the foreign buyer tax being implemented in Ontario but the other measures are actually a lot more significant.

Among the slate of measures:
1) Allowing municipalities to impose a vacancy tax
2) A new law against "property speculation"--from my understanding, this will make it illegal to buy a pre-construction unit, and then sell it for a profit before closing (must either wait until closing, or sell at break-even)
3) Giving municipalities the authority to increase property tax rates on vacant properties that have redevelopment plans approved--this is intended to push builders to quickly move their plans to market instead of sitting on approvals

And most significantly of all, a bunch of changes to rental laws have been thrown in too.

Most significantly: Expansion of rent control. In Ontario, rent control was abolished in the 1990s but existing buildings were 'grandfathered'--so any unit built in 1991 or later is not subject to rent control. The changes apply rent controls to all rentals in the province regardless of age

To offset the impact on landlords, three new measures were thrown in.
1) Reduction of property tax for multi-unit residential; for all new builds, this will now be taxed at the same percentage rate as residential. Previously dedicated rental towers were charged at almost twice the property tax rate
2) A program to reduce development charges for dedicated rental construction
3) Increasing processing resources for the Landlord And Tenant Board (the agency that oversees rentals) to allow for faster processing of eviction requests and such

Another change is that there will now be a standardized lease for all rentals in the province, like what Quebec has. (Currently, landlords draw up their own leases). This ties into 3) above, in that by having a standardized lease, it avoids having to get lawyers to pour over specific leases.
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  #6830  
Old Posted Apr 22, 2017, 12:58 AM
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Originally Posted by travis3000 View Post
Interest rates are actually declining right now, RBC just lowered their 5 year rate by 0.2 points.

As for the Vancouver pricing, they are showing signs of increasing yet again.

http://www.theglobeandmail.com/real-...ticle34726396/

http://www.cbc.ca/news/canada/britis...limb-1.4073731
Prices continue to fall, sales are down year over year. Even your article, (and often these articles are written for the real estate industry) says the following:

Quote:
The Royal LePage quarterly house price survey, released Tuesday, shows home prices in the Greater Vancouver region dropped 1.9 per cent in the quarter ended March 31 compared with the last quarter of 2016, driven by a decline in prices of detached homes. Two-storey houses were down 3.1 per cent in the quarter while bungalow prices fell 1 per cent.
Interest rates will be going up 2018, the question now is how rapidly. There will be further tightening.
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  #6831  
Old Posted Apr 22, 2017, 3:22 AM
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Originally Posted by 1overcosc View Post
Another change is that there will now be a standardized lease for all rentals in the province, like what Quebec has. (Currently, landlords draw up their own leases).
That's likely a step in the wrong direction... I have seen several cases in Quebec where the parties can't agree to something nonstandard/unusual even if they're both in favor, because the standard lease (and its bunch of clauses) is mandatory.

I've crafted three custom leases so far in Florida (first time took a while; other times using my own basic lease) and this works great. Reminds me of my commercial leases in Quebec -- the wording is specific to me, tailored over the years to match my own experiences and my own buildings.

It would be great if residential leases in Quebec were as open as commercial leases (being a commercial landlord in Quebec is a lot more pleasant than being a residential landlord; I've been doing both for 12 years now). Sounds like Ontario just got a downgrade; hopefully for you the standard lease format isn't too restrictive.
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  #6832  
Old Posted Apr 22, 2017, 5:21 AM
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^Given the illegal shit I've seen bad landlords try and put in Ontario leases I would disagree. You would still have freedom to make an agreement between tenants beyond standard lease clauses. In my understanding that is the way it is likely to go, at least.
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  #6833  
Old Posted Apr 22, 2017, 5:22 AM
sunsetmountainland sunsetmountainland is offline
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Originally Posted by Xelebes View Post
A "no-one's market" is where it's neither a good time for buyers or sellers. It can happen. It happens when drops in prices can't match the drops in expected return. It is a temporary event sure, but it can produce real stress on humans which can have permanent effects.
Well I think the "no-one's market" is not really relative for the Vancouver market right now. I agree with the statement of stress on humans however. It is when is the right time right place and right purchase. I was pointing out that we are not in this situation as I still believe we are currently in a sellers market.
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  #6834  
Old Posted Apr 22, 2017, 5:24 AM
sunsetmountainland sunsetmountainland is offline
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Originally Posted by lio45 View Post
We're in the Eastern time zone, when you posted this it was already midnight for us... patience, we'll be back sooner or later that's how a discussion forum like this works, no need to all be online at the same time. You leave your post there and will get a reply eventually.
Yes but at this time you were online all three of the individuals I was mentioning. I was hoping for a reply as I knew I was going to be away on a fishing trip. That said I agree about the time zones. Sorry about the impatience!
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  #6835  
Old Posted Apr 22, 2017, 5:28 AM
sunsetmountainland sunsetmountainland is offline
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This idea of living near where you work or being able to walk to your local grocery store is very touchy-feely but has little resemblance to our current situation particularly in regards to housing.

Very few can afford to live in Vancouver and god forbid if they have a kid which is the equivalent to an eviction notice. It's so nice for our politicians and urban policy wonks to espouse such ideas but they rarely live in the real world. Somehow I just don't see the City of Vancouver tripling their employees salaries overnight so they can fulfill the dream of living near where they work.

Living near where you work which may mean for a more urbane enviornment also reflects a demographic that is quickly disappearing. 40 years ago it was quite common to have only one bread winner and so the place of residence was partly determined by HIS ability to get to work fast. Today most families have 2 breadwinners but they may work very far apart so what maybe a 5 km commute for one is a 50km commute for the other so they try to compromise and still stay within their budget and often that means the burbs.

Work is also a far more fluid endevour than it use to be, people change careers and hence locations of employment far more frequently than they use to when people had a decent job and could expect to keep it for the rest of their lives. Instead of once having one person being able to live within a reasonable commute of their job which may last them their entire adult lives, you now have 2 people who may have 2 different jobs in one decade requiring being within a reasonable commute of 4 different work places. These people don't want to be shifting thier kids to different schools every 3 years so they live in the burbs and commute with their cars and the suburbs are built for cars.

The above are exemplified by a phenomenon that is a fairly new reality..........reverse commuting. Highways today often are as backed-up going from the city to the burbs as they are the burbs to the city in AM rushour as places of employment change and yet they can't change their location. It may seem common now but was unheard of up until the 90s.

The politicians and policy wonks often refuse to acknowledge these realities as they don't sit well with their unending rants about how if people simply lived near where they work all our commuting problems and urban sprawl would disappear.
I have only two questions for you. 1 Whom is looking after you since you cannot afford Vancouver?2 Why are you still here?

Last edited by sunsetmountainland; Apr 22, 2017 at 6:00 AM.
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  #6836  
Old Posted Apr 22, 2017, 5:43 AM
sunsetmountainland sunsetmountainland is offline
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Originally Posted by cornholio View Post
Year over year sales in Vancouver fell further last month again. Prices are not up, they are down over the past 6 months. Looks like a typical bear trap before the steam runs out. Lots of things will be happening in 2018 with interest rates and tightening up along with oversupply saturating the market.
I am sorry to say you did not post some plausible definition to explain your reasoning? Why would this be?

https://www.biv.com/article/2017/4/m...es-back-march/

Now if you were talking about your information it would be this:

https://www.biv.com/article/2017/4/t...-38-year-over/

So there you have our bubble which shows to have burst!

Since then:

https://www.biv.com/article/2017/4/h...e-short-lived/

Now some info from the month our bubble burst.

http://www.moneysense.ca/spend/real-...tate/image/28/

Now some insight:

Quote:
The long view
With land in short supply but financing still cheap, builders and brokers of local real estate gathered for the Vancouver Real Estate Forum on April 11 to discuss how to thrive in a market with low yields.Consensus focused on long-term holds of hard-to-replace income-producing properties.

Cycles rise and fall, and the end is often rough, opined Helmut Pastrick, chief economist with Central 1 Credit Union in Vancouver.

But like the band on RMS Titanic as it sank 105 years ago this past weekend, the economy plays on.

“In the long term, prices will continue to rise,” Pastrick said, noting that average house prices in B.C. have risen to nearly $700,000 today from $12,000 in 1961. B.C.’s population rose to 4.7 million from 1.6 million over the same period, with a forecast of six million by 2041.

https://www.biv.com/article/2017/4/r...bility-suburb/
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  #6837  
Old Posted Apr 22, 2017, 5:47 AM
sunsetmountainland sunsetmountainland is offline
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I really think the word "opined" is what I would suggest about a housing bubble.
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  #6838  
Old Posted Apr 22, 2017, 5:39 PM
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Originally Posted by niwell View Post
^Given the illegal shit I've seen bad landlords try and put in Ontario leases I would disagree. You would still have freedom to make an agreement between tenants beyond standard lease clauses. In my understanding that is the way it is likely to go, at least.
The problem is all the standard wording on the back side of the mandatory Quebec lease form explicitly prohibits things you might want to do, and it trumps any other agreement (that lease form is legally mandatory, anyway).

I suppose it's just a typical case of grass being greener in someone else's yard.
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  #6839  
Old Posted Apr 22, 2017, 5:55 PM
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The Gazette spreading fear about Mtl's real estate heating up.

Buy now or risk saying bye-bye to affordable Montreal home ownership

Bert Archer, Special to the Montreal Gazette
Published on: April 22, 2017

Montreal’s real estate market is about to become a game of musical chairs, and anybody who doesn’t get a seat soon could be left standing, permanently.

It might be easy to remain complacent about your ability to buy a house in Montreal. After all, Montreal’s median prices for single family homes – detached, semi-detached and row houses, among the first to become unaffordable to the average person – are $300,000 lower than they are in Toronto, and $500,000 less than in Vancouver.

An average person with average income can still entertain thoughts of buying a house downtown. The slow but steady increases in prices – two, three, four per cent – can act like the proverbial slowly heating water the frog doesn’t know is about to boil. But if you’re renting now, and figure you’ll buy a house someday when that next promotion comes through or the baby’s born, it might be too late.

All the signs of a market on the brink of unaffordability are there. Worries about a saturated condo market sagging in 2015 turned around sharply in 2016. Montreal registered the lowest unemployment rate in 30 years last December, and immigration levels are skyrocketing, with the first six months of 2016 – the latest figures available – outstripping all of 2015.

And foreign investors are almost certainly already on their way to the next undervalued, untapped real estate market now that Ontario has imposed a 15 per cent tax on foreign buyers in Toronto as B.C. did for Metro Vancouver. More money drives prices up. So does more people. Put them both together in a city with the obvious and perennial attractions of Montreal, and it might spell the end of the affordable house on the island.

Whole article
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  #6840  
Old Posted Apr 22, 2017, 6:16 PM
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