Lower Mainland Real Estate-and Politics


Blog by Arnold Shuchat | May 2nd, 2013


I want to take a moment to reflect on some economic and political history which can put some of our real estate concerns into perspective.  In Quebec, where I grew up, we had the Parti Quebecois come into power in 1976.  There was so much uncertainty, that investment for the most part just stopped.  I recall that in 1971, as the PQ was starting to become a political force, druing the election, there were images of fleets of Brinks armoured trucks heading towards the US border. These images pretty much freaked everyone out who saw them and the worry that ensued drove hundreds of thousands of anglophones over the Ontario border over the next decade, all of which did not bode well for keeping the PQ out years later. The real estate market there suffered as a consequence, for years, and in a big way.

We have had major assaults, whether rightly or wrongly so, on our local real estate market.  First, the change in lending rules; then the tightening of immigration cooperation between Canada and China; the change of government in China which caused uncertainty there and over here; Europe's economic crisis and the recession south of the border.  All this, while for the most part, economic damage was kept to a minimum locally.  And now we have a provincial election.

Political reporting here is all over the map and ridiculous: Did the premier run a red light? Is that "truth" going to change my vote? Are we idiots?  At dinner last night with a professional group it came up that a large developer mentioned that in all of the years that the NDP was in power, his firm did not hire a single additional person to work.

Dear readers, that widely held view and reality in a nutshell is a bird's eye view of the impending third jihad on real estate prices and activity should the NDP be elected to power here.  Without investment, and without risk taking, the issue will not be the amortization period required by lenders, but rather the income levels of buyers both in their own eyes and in the eyes of lenders.   Henry Ford's statement "Pay them more and they will buy more cars"..... just doesn't work. Perhaps a few might be paid more; but people new to the job market will have a tougher time getting hired and those would be the first time buyers who don't have to sell homes which are "under water".

Those who know me know that I am a fiscal conservative.  Sure, the provincial Liberals completely missed the boat on the public sentiment and in utilizing the proper process concerning the adoption of HST. However, the structure of that tax system far outweighs the crippling effects of an NDP Capital Tax.

We've felt the negative pressure of money leaving Lower Mainland real estate over the last 2 years. If a socialist NDP gets into power, from my experience, the energy with which that negative pressure will be felt will be significantly ramped up.  For we can debate all we want about whether the Chinese buyers will return to the market, but where there is little room for debate is that once the government gets its hands on the new tax dollars that it will suck out of this water treading economy, that money will never return.  It's time to send for the Brinks trucks. And my friends in cyberspace can do a piece on the fact that they might have all been empty and staged... after the election. In fact, a story about a Brinks truck running a red light southbound on Hwy 15 towards the border might be far more interesting and useful!

And finally, this just in, hot off my inbox and most timely:

While suturing a cut on the hand of a 75 year old farmer, whose hand was caught in the squeeze gate while working cattle, the doctor struck up a conversation... Eventually the topic got around to politicians and their role as our leaders.

The farmer said, "Well, as I see it, most politicians are 'Post Turtles'.''

Not being familiar with the term, the doctor asked him what a 'post turtle' was.

The farmer said, "When you're driving down a country road and you come across a fence post with a turtle balanced on top, that's a post turtle."

The farmer saw the puzzled look on the doctor's face so he continued to explain.

"You know he didn't get up there by himself, he doesn't belong up there, he doesn't know what to do while he's up there, he's elevated beyond his ability to function, and you just wonder what kind of dumb arse put him up there to begin with." 
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PS.  I have from time to time read some online chatter that surmises that a Realtor who speaks his mind in a way that is contrary to what they might read from a professional association, or board, may "receive a call" from some higher up somewhere.....  I can only say, that that has never happened, won't likely happen and if it does ever happen..... "Go ahead, make my day"...