“Why join the navy if you can be a pirate?” -Steve Jobs

“If I had asked people what they wanted, they would have said faster horses.” -Henry Ford

THIS WEEK’S FACTS BY EMAIL

  • INTERNATIONAL – EUROPE OVERVIEW
  • VANCOUVER NUMBERS … HIGHER …
  • FRASER VALLEY – MUCH HIGHER
  • QUESTIONS, QUESTIONS
  • THE NORTH UPDATE AND AN INVITATION TO GO SEE FT. ST. JOHN FIRST HAND
  • HOT PROPERTIES IN BC
  • HOT PROPERTY WEBSITES – EUROPE

I N T E R N A T I O N A L: Don’t Worry About Greece … Worry About The EU

When you read this, the vote will likely have been held in Greece.

I have been in Europe for 5 weeks and while Greece dominated the news, locals discuss the whole viability of the EU. Few like the leadership in Brussels,
Northerners dislike the ‘ever needy’ Southern countries. Germany is painted as the villain (after all they should have known that Greece and most other
deadbeat borrowers) could not and would never pay back the money.

When in Portugal we noticed a lot of new freeways and infrastructure all built with EU money. In fact since living standards have to be made equal, some
countries received untold billions, vast help to rebuild and bring up its economies to EU standards. Now that is forgotten.

I am not worried about Greece. It represents 1.8% of the EU budget … a (annoying) pimple on the behind of the
EU. I rather worry about China, where the Shanghai stock market lost 1.9 trillion in 3 weeks or 10 times the Greek GDP.

Worry about France
never having a balanced budget since 1974. Worry about it all unraveling. Not because of Greece, but because Margaret Thatcher is being
proven right: you cannot have a monetary union without a political union.

Long term subscribers know that my view has been for years that the EU cannot survive in its present form … different languages, different school
system, different government structures, etc.

The worry by the thinkers here is that the left wing parties would gain strength if Greece is perceived to be winning – or gets further debt forgiveness.
In fact Spain and Portugal “Anti austerity parties’ have growing dramatic support (let’s stop paying the debts) and there is great sympathy for them. Make
no mistake -Spain, Portugal and Ireland are particularly watching what happens in Greece closely with special interest.

What concerns me is the polarization and the disenchantment with all things coming from Brussels. Who got what money? Who got which jobs? There is too much
power, etc.

We all know how Britain feels but THE SHOCKER? This week the Austrian Parliament faced an EXIT EU petition of 256,000
(collected in a week) that want to force a new stance for Austria with Brussels, This is not an economic debt question, but one of political control.Austria is a great beneficiary of the EU. 4.3% unemployment, 11th richest nation in world. Germany’s biggest customer … etc. Yet, they say we want
more say.

Yes, there is more than Greece at stake here. Personally, I am happy to come back to Canada next week … and never complain about anything ever again.
Never, ever!

FINAL THOUGHTS – WORRYING ABOUT THE WRONG THINGS?

Africa, the Middle East and parts of Asia are oozing refugees. Isis is marching at breathtaking speed grabbing territory and souls. Refugees are becoming
militant (forcing truckers in Calais to smuggle them into England).

Europe’s problems are just beginning. Next week more.

C A N A D A: Questions, Questions


Q: Last year you had a 23,000 sq. foot mansion on the Sunshine Coast on 56 acres for some $10 million. Is that still there? I can’t find it.

A: Sotheby’s had it listed. I believe it sold at around $7 million. You could check with Sotheby’s, yes, it is a fabulous mansion – 23 bedroom suites!


Q: In your 16 page newsletter you always featured a Major, Major point. This was one of my favorite features. I remember your many detailed
forecasts on inflation/deflation/ etc. It would be great if you could do a larger discussion on the above again?

A:
We will do a separate update report in the next 2 weeks. It might also help to revisit our OUTLOOK issue (No.1 in 2015). Our basic outlook has not changed.
We are making a change however in that we are adding another possible outcome.

Northern BC Buzz

We heard from readers following our ‘caution comments’ for rental investors in northern B.C.

Georgia award winner David Steele of Western Canadian Properties Group, who has successfully developed strata rental projects in the northeast, notes:

“We currently have 45 properties available for rent in Fort St. John and there is not a single vacancy. Our $270,000 townhomes are currently generating
over $1600 per month in rental income. In fact, we are typically able to pre-lease almost all of our brand-new properties and over 95% of our investors
have closed with a tenant already in place.”

Steele, and others bullish on northern BC,

present strong evidence that the north is becoming one of the great investment plays in the country.
Given our overall view that LNG plants will be built and the site ‘C’ dam be completed t

hat remains likely to be true.

Looking at all markets in our OUTLOOK issue this year we believed that a lot of smaller investors may also find comfort in southern BC markets with a
larger tenant base and similar residential prices and rent levels.

For those who still have doubts about the North, Steele is inviting all our readers to join in a ground tour on July 23 and 24th “Where,” Steele says, “you will see first-hand
exactly what is happening in Fort St. John. The future of Northeast BC is very bright. Join us on a tour and see it for yourself first hand.” (Your
flight cost.) Visit this link for details, or
phone 778-328-2317.

The Numbers, The Numbers – Vancouver – Burning Hot

Residential property sales reached 4,375 in June 2015. This represents a 28 per cent increase compared to the 3,406 sales recorded in June 2014, and an
increase of 8 per cent compared to the 4,056 sales in May 2015.

Last month’s sales were 29.1 per cent above the 10-year sales average for the month.

It’s the fourth straight month with over 4,000 sales, which is a first in the REBGV’s history.

The previous highest number of residential home sales was 4,434, recorded in May 2005.

The MLS Home Price Index composite benchmark price for all residential properties in Metro Vancouver is currently $694,000. This represents a 10.3
per cent increase compared to June 2014.

New listings for detached, attached and apartment properties in Metro Vancouver totaled 5,803 in June. This represents an 8.7 per cent increase compared to
the 5,339 new listings reported in June 2014.

The total number of properties currently listed for sale on the region’s MLS is 12,181, a 23.9 per cent decline compared to June 2014 and a 1.3 per
cent decline compared to May 2015. This is the lowest active listing total for June since 2006.

The sales-to-active-listings ratio in June was 35.9 per cent. T his is the highest that this ratio has been in Metro Vancouver since June 2006. A seller’s market typically occurs when this ratio exceeds
20 per cent for a sustained period of time.

Sales of detached properties
reached 1,920, an increase of 31.3 per cent from the 1,462 detached sales recorded in June 2014, and a 74.2 per cent increase from the 1,102 units sold in
June 2013. The benchmark price for a detached property in Metro Vancouver increased 14.8 per cent from June 2014 to $1,123,900.

Sales of apartment properties
reached 1,774 in June 2015, an increase of 35.6 per cent compared to the 1,308 sales in June 2014, and an increase of 66.1 per cent compared to the 1,068
sales in June 2013. The benchmark price of an apartment property increased 5.3 per cent from June 2014 to $400,200.

Major Point:
Unfortunately, the board did not give access to the breakdown between new and used sales. Since new prices are considerably higher on a lot fewer sales (used homes outsell new homes on an 8-1 basis or more) this distorts the average higher.

Nevertheless, the reported combined average price is dramatically higher this June over last June ($925,800 versus $798,000) – BUT only marginally higher
over May 2015 ($925,800 versus $908,200). Records are continuing to be broken. New listings are also higher by about 9% over last June,
but since active listings are down by 23% this will not make much of a dent. All member realtors are reporting strong markets from West Van to Richmond,
Coquitlam to Burnaby. We have a bear by the tail, one that is not necessarily Canadian (Chinese, Russian, Iranian?). Hard to say whether these overseas
bears will stay.

WESTSIDE BENEFITS THE MOST

Single Family prices 3,397,400 2,704,900 +25%

Condo prices 705,600 612,700 +15%

COQUITLAM NO SLOUCH

Single family prices 952,300 765,400 +24%

Condo prices 339,300 307,900 +10%


Major Point: Prices are running sharply higher. Vancouver now is higher in price than Rome and ranks in the world’s top 9 cities. Yet, we are decidedly
not London, Paris, New York or Hong Kong. We remain concerned about the reason. More next week.

The Numbers, The Numbers – Fraser Valley Sales Soar 45%!

2,413 sales were the highest for June since 2005 and rank as the fourth busiest month ever for MLS sales in the
Fraser Valley. An increase of 45 per cent compared to the 1,668 sales processed in June of last year.

In addition to a surge in sales, the number of new listings also picked up in June increasing by 11 per cent going
from 2,989 last year to 3,316 last month; taking the number of active listings to 8,105.

The benchmark price of a detached home
was $609,900, an increase of 7.3 per cent compared to June 2014 when it was $568,600.

The benchmark price of townhouses
in June was $302,600, an increase of 1.6 per cent compared to $297,800 in June 2014.

The benchmark price of apartments
decreased
year-over-year by 2.6 per cent, going from $197,000 in June 2014, to $191,900 last month.

Major Point:
Sales up a whopping 45%, the average and the single detached prices 11 and 12 percent higher … condos about even. Listings down 18% … all bodes well
for a strong summer continued.

Thoughts: The general media does not agree, seeing only Canadians all of a sudden rushing out to buy single family homes. Our anecdotal evidence shows that there
are also foreigners driving the markets. European real estate markets are driven (in the major cities) to a large degree by outside money … both
commercially and residentially. Money that is fleeing from wherever it is in trouble. Real Estate is one of the places it flees to everywhere. More next
week.

HOT PROPERTY:

1. Gibsons
dynamite low-bank waterfront home, gourmet kitchen, stunning ocean, island and marina views, walking distance to Lower Gibsons. Price: $1,485,000;

2. Kitimat cash flow, $305,000 fully furnished, 1 year lease at $2400/month, fully renovated with $105,000 in renovations.

HOT PROPERTY EUROPE

Most countries in Europe can be researched here:

US realtor.com/international – a lot of Italian/German/ French real estate companies place their listings here.

SPAIN: We like Solvio’s website – examples

New units as low as 35,000 on a golf course (hundreds)

Barcelona – old apartments – 700 sq. feet $47,000 euros – $200,000 and up

Barcelona new built – 220,000 and up

Spain expects to benefit from the turmoil in Greece … as bookings are soaring … cancelling Greece and coming to Spain.


If you have an interest in European real estate – send me a separate email direct and I will try and get you in touch with the right contacts.