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Q: How to Own Real Estate for Dummies? A: Borrow One of the effects of the last 7+ years of state imposed ZIRP & NIRP and mortgage default insurance subsidies is that the "value" of money has been destroyed. ​

• Average debt levels up nearly 3% in the first quarter of 2016.
• Non-mortgage debt rose to $21,348 in 1Q 2016, up 2.7% Y/Y.
• Subprime average credit card balance grew by 5.7% Y/Y to $6,601.
• High interest installment loans grew 4.8% Y/Y to an average $23,591.
• Serious delinquency rates (90+ days late) increased 3% in 1Q 2016.

Subprime borrowers’ debt loads will continue to grow as long as interest rates are low. Benjamin Tal

BMO​ Millennial Home Buyer Survey (March 2016)

According to the survey, millennials expect they will have to spend $350,000, on average, to buy their first home. These amounts range from about $235,000 in Quebec to more than $478,000 in British Columbia... To make such a purchase, respondents indicated that they expected to raise about 15 per cent of the purchase price for their down payment - or, roughly, an average of $53,000. Most (65%) indicated that they would rely, to some extent, on parents or other family members for financial assistance for as much as 10% of the purchase price, although most don't know.

A probability sample of this size would yield results accurate to ± 2.2 percent, 19 times out of 20.
​

Ipsos Reid - BDO Poll (May 2016)

​55% of Canadian would have trouble paying bills if interest rates rise.

46% say rising cost of living is limiting the money they put toward paying off debts.

37% say the rising cost of living hasn’t impacted their debt payments at all, suggesting its having some impact on most people.

​58% think the value of their home will increase.

The poll is accurate to within +/ - 3.5 percentage points, 19 times out of 20, had all Canadian adults been polled.

Condo Construction Subject To Red Alert From Royal Bank
HuffingtonPost.ca (May 30, 2016)

RBC isn't the only organization that has presented concerning statistics regarding the housing market recently.

Sales activity in Toronto and Vancouver may have "topped out," Canadian Real Estate Association (CREA) president Cliff Iverson said earlier this month.

Sales didn't grow in Toronto at all in April after dropping 1.8 per cent in March.

They were also down one per cent in Vancouver, after a drop of 0.3 per cent the previous month.
​

Gregor Robertson Mayor of Vancouver, May 30, 2016

Yes, housing prices are high in Vancouver, and global capital plays a part in that. If prices keep increasing, many of the things we love about Vancouver are at risk, and many will not be able to put down roots in a city bound together by a rich, multicultural history that has a lot to offer geographically and culturally.
​ 

Magic Bus - The Who 1968

I don't care how much I pay
I wanna drive my bus
​to my baby each day
I want it
I want it
I want it
I want it

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Simple as ABCD A reader (S.B.) sent me this chart of Vancouver Single Family detached house prices with his notations from a Elliot Wave perspective. "Watch for volume climaxes, especially after long moves." Richard Donchian 1934

The Vancouver housing prices are following a price channel, and look to be forming an ABCD pattern.

The thing about ABCD patterns is that prices return to the mid-point. This means that prices should return to 2008 levels.

Furthermore - if prices return to the midpoint consolidation, this would be a 62.8 Fibonacci retracement.

Timing looks to be an approximate cycle of 8 years which means there would soon be a peak, and then another bottom in 2025.

If you view housing as a commodity, in Elliott Wave Theory (psychology) then Wave 5 has large percentage gains as people get spurred by scarcity.

How Stupid is Vancouver’s Real Estate Market?
Interview with Thomas Davidoff, Sauder School of Business

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While we wait for the April real estate data to dribble in, let's look at the commodity sector that peaked in 2011 and is now threatening to break a major uptrend channel and possibly retest the 2006 lows; a time when the Yield Curve inverted and soon after the BoC and U.S. Fed etal went on a ZIRP to NIRP bender in an effort to spark inflation. Clearly low rates have not produced CPI inflation but a speculative frenzy for Yield.

...the energy high-yield default has soared to a record 13% rate, surpassing the 9.7% mark set in 1999, according to Fitch Ratings.

AND THIS from Bloomberg May 1, 2016 Saudi Arabia's determination to keep pumping more oil into global markets brings to mind its former oil minister Sheikh Yamani, who said back in 2000 that the Stone Age did not end for a lack of stones, and the oil age will not end for a lack of oil.Those working for him at the time, interpreted this as a warning to OPEC about the pursuit of high oil prices: namely, that it would just speed up the development of alternative technologies and drive away customers, leaving oil sitting beneath the ground without buyers.Sixteen years later, the kingdom's leaders seem to have heeded his warning. Both Deputy Crown Prince Mohammed bin Salman and oil minister Ali al-Naimi have said they will no longer subsidize high-cost oil production by limiting supply. If there's oil to be left under the ground, they're determined it won't be Saudi Arabia's.

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