Monday, November 20, 2017

West Vancouver Real Estate Report - October 2017

In West Vancouver sales were up 18.9% from October 2016 yet were down 21.4% from September and 48.7% below the 10 year Oct average.

New listings were up 36.9% from last year and are 13.5% above the 10 year Oct average.

Total listings have steadily risen throughout the year and are now nearly back in line with historical levels, down only 3.6% from the 10 year Oct average.

The result, West Vancouver real estate remains firmly a buyer’s market, with a sales-to-active listing ratio of 6.9% (below 12% is a buyer’s market). The average sale price of a house in West Vancouver in October was $2,518,000.

Why the jump in sales in October? A lot of the activity can likely be explained to buyer’s purchasing with expiring mortgage rate preapprovals. (lenders will typically hold an interest rate for 60-90days)

On top of this, many buyers are trying to get into the market before the new mortgage lending rules come into effect in January 2018.


The Behavioural Effect and What It Means to Pam Goldsmith-Jones

The Fraser Institute, Professor Kevin Milligan, across the bay at UBC and others have researched and described the correlation between tax rates and tax revenues. Their findings are fairly common sense when you stop to think. Raising taxes on high income individuals, including those living in West Vancouver, introduces an incentive for those tax payers to seek relief by lowering their taxable income in other ways. The popular moniker for this action is called “tax planning.” High income tax payers are the best equipped to alter the profile of their income by taking non-taxable benefits, deferring tax, moving income to lower taxed jurisdictions, or employing alternative mechanisms for sheltering income. All these actions are legal and beyond the greedy hands of our very good friends at the CRA.

Tax revenue is comprised of two components: 1) the tax base; and 2) the tax rate. Tax revenue is the product of the two. Studies show that raising the tax rate reduces the tax base. Therefore marginal raise of tax rate does not produce a proportional increase in tax revenue due to taxpayers’ response of lowering their tax base. This phenomenon is called the Behavioural Effect.

The Behavioural Effect was certainly not considered by the federal Liberals in their introduction of 33% marginal tax rate on income over $200K per year. This is not unexpected as in 2014 their leader, Justin Trudeau, justified an election platform of spending to grow the economy with the profound explanation “… and the budget will balance itself.”

What does this have to do with Ms. Goldsmith-Jones?

Ms. Goldsmith-Jones, first time Ottawa representative of our bedroom village on the sea, certainly understood the implications of the punitive actions of Morneau/Trudeau’s tax changes for Canadian small business owners. At an October 2017 Chamber of Commerce meeting up in Squamish, Ms Gold-Smith-Jones stated that “the Liberal Government claims will make business tax structure fairer had led to more than 1,200 email messages from concerned small business constituents.” She clearly understood the constructive and even sometimes angry feedback the Liberals were receiving from their ill advises attack on West Vancouver’s small business community.

The response of Ms. Goldsmith-Jones, while expressing empathy and clear understanding the implications of the proposed plan, she did nothing. There is no public record of her advising Morneau/Trudeau of their miscalculated step. No a single snip of evidence that while she understood 1,200 constituents she chose to not take any public action to champion their cause even within her own party.

October 19, 2019 is only 23 months distant, and another impact of behaviour might be displayed. West Vancouver’s entrepreneurs, attacked for their contribution to the Canadian economy, will remember the inaction of their representative, if only resident on the backbench, and will surely seek a more effective voice in Ottawa.


Monday, October 09, 2017

Five Wines for your Turkey Dinner

Pinot Gris from Oregon: Before reaching for yet another Pinot Grigio from Italy, try serving the same grape — Pinot Gris — but from Oregon. It will offer more intrigue for your feast, with slightly more weight and a spritzy jolt of acidity, often joined by an aftertaste of honey and spice.

Cru Beaujolais: A somewhat more serious version of Burgundy (French Pinot Noir vines), it is light on the palate, while consistently charming with floral aromas and irresistibly lithe red fruit. You are drinking the latest Beaujolais vintage and each year is or isn't a standout.

Pinot Noir: This silky, aromatic red’s versatility with food made it popular with foodies long before it was the star of the movie Sideways. Burrowing Owl and Blue Mountain wineries have excellent VQA offerings. Its restrained frame and snappy acidity gives lift not only to poultry of all types but also to most foods associated with white wine and the majority you would relate with red.

Chinon: Light- to medium-bodied, this French red is a multitook of a wine, poised to invigorate your wine snob uncle with a uniquely tangy and herbal earthiness. Be prepared for tales of his winery bicycle tour of the Loire Valley.

Dolcetto: This Italian red has moderate weight and cherry or raspberry aromas, with ample acidity and occasionally a bit of tannic bite that will counter the feelings of fatigue that set in after your third helping of mashed potatoes and gravy. Ciao,