Earlier this week I helped the little beavers at Maclean’s magazine by asking you for your list of craziest stupid things that have happened in frothy Canadian real estate. They will crib the best ones, glue them together then put a byline on. This is called ‘journalism.’ Those are the words that keep the ads from banging into each other.
Of the thousand or so suggestions offered here, one near the top of the OMG!-list was the claim that buying a condo in Calgary or Toronto could net you a 282% return on investment. Remember this?
The developer based this fiction on unrealistic rental income, didn’t factor in tax or vacancies, called debt repayment profit, ignored rate hikes over ten years and stated the condo would go up in value for a decade. But what the hell? Greed is good.
The developer is Brad Lamb. And now Toronto’s lofty, Rolls-driving, HGTV star, legendary billionaire developer, get-rich seminar presenter, condo king is slaughtering me. Mopping the floor with my sorry butt in a new poll on who’s “the most trustworthy expert” on real estate.
The creds slugfest between Turner, Lamb and five other notables is taking place on a site called BuzzBuzzHome, where writers regularly drool over new condos with exploding glass balconies, uber cool spaces with poured concrete bathrooms, and anywhere Italian formers in plaid shirts and orange hard hats mingle with metrosexuals with bicycle clips.
Now this is probably a watershed moment. For the last five years this site – the penultimate gathering post for the country’s grandest real estate BSDs – has completely ignored me, as most of the planet so wisely does. But suddenly here’s a poll aimed at its condomaniac fan base, asking who they trust about the future direction of the housing market. This is like asking the chickens if they want to vote for Colonel Saunders. Clearly the outcome the BuzzBuzz crowd hopes for is a Lamb ChopChop.
By the way, also in the running is David Madani (being similarly slaughtered as I write this), the chief economist at Capital Economics – a straight-up guy who has unwaveringly forecast a 25% decline in house prices. Then there’s Ben Rabidoux, an analyst and blogger who has enjoyed moments of clarity and some turgid lucidity. When he’s not shilling for the National Bank.
Voters can also choose two industry insiders and perpetual housing boosters. Ben Myers of Urbanation told Toronto Star readers a few months ago “there is no condo bubble” shortly before sales collapsed, and George Carras, of RealNet. And then there’s Globe and Mail columnist Rob Carrick, who is intelligent enough to use GreaterFool as a frequent source, but works for a paper that expects you to pay 99 cents a month to read him. Get real.
Well, as I report this to you, I see that BuzzBuzzHome just put out a tweet to its millions of house horny young followers, exhorting them to come and vote. Interestingly enough, this comes just days after we’ve learned resales are down by 15% in Toronto, and will likely be falling much further in March. Condo resales have tanked by 20%, those prices are lower by 5%, and new condo sales collapsed in January year/year by 35%.
Or is Mr. @garthturner the only opinion worth trusting on #Toronto’s real estate market? Vote it >> ow.ly/iWfLK
Well, like it or not, there’s only one direction for this market. There are no economic fundamentals supporting an argument for year-after-year price increases in a nation where the economy’s limping, condos erupt from every vacant lot, incomes are stagnant and debt has bloated. We’re created a housing gasbag that can continue to deflate as it is now, or puff up, explode and spray all over us.
Seems to me the responsible thing is to warn the kids.
But what do I know? Brad’s lambasting me.
By the way, you can vote here.