Soft landing

soft landing1

If I wasn’t such a rube, I’d swear there was a conspiracy. Break out the tin foil. What a coincidence.

The realtors announce numbers only they can verify saying house sales in April slipped a meagre 3%. CREA’s chief economist, Gregory Klump, quickly pronounces the market, “remarkably steady.”

Almost immediately F makes an announcement, from France, no less, where TLP is giving away tax money. “I’m pleased in particular that the condo market in big cities has fallen back,” he says.  “I’m also pleased with some other moderation in new house construction and in demand for mortgages. I think these are healthy developments because I think we were beginning to see some indications of the beginning of a bubble.” (This would be the bubble he previously said did not exist.) And then, a few days after he secretly decided to ban 30-year mortgages, he adds: “I’m not going to intervene in the mortgage market, I don’t need to.”

If he could suck and blow any more effectively, he’d be a dirigible.

Meanwhile on Bay Street the monster bank economists are in spin mode. BMO egg Doug Porter cheers for a real estate soft landing, saying the market is “calm, cool and collected.” And: “While some are highlighting the fact that prices are now rising at their slowest pace since the 2009 recession, the plain facts are that they are still rising faster than inflation, and prices are at all-time highs, suggesting concerns of a meltdown were unfounded.”

Not to be outdone, CIBC’s Benny Tal grabs reporters to suggest certain bearded, hysterical bloggers have poop for brains when it comes to demographics. Nobody needs to worry about the wrinklies dumping houses, he says. “It turns out that those fears are highly exaggerated and very premature. In fact, demographic forces will be as supportive to real estate markets in the coming decade as they were in the past decade.”

Benny figures all those people in the 25-34 age group will be flocking to buy houses in the next few years, once they find their way out of their parents’ basements and get a career. “Demand for housing in the coming decade should be more than four times stronger than it was during the dreary market of the 1990s.”

Remember the Nineties? Of course, that’s when a house in Toronto cost $203,000. Now it’s $526,335. Sure, Benny. Have another toke.

And as all this happens, the economy slows, commodity prices erode and we can peer West to get a nice sampling of what a Canadian-style housing correction looks like. As our wet coast correspondent points out, in the last 60 days sales of SFHs in all of Vancouver and the Lower Mainland are running 35% below year-ago levels, 47% under 2011 and a third less than the meltdown annus of 2009. And yet the official real estate board Frankenumber shows sales off a non-threatening 6%.

Time for those tin foil hats?

Ross Kay says, yup, you bet. The career GTA realtor has chosen this pathetic blog to come out of the closet. As all of the aforementioned cheerleading and group-stroking was going on, he was sending me this:

Just a short note in support of your continued frustration on the use/misuse of MLS data  and the media’s willingness to drink the Kool-Aid.  I can assure you 1000’s if not 10,000’s of real estate professionals across Canada have shared your frustration for a very very long time. I think many have reached a point of action.

Currently all Organized Real Estate (ORE) from national groups like CREA to the local RE/MAX brokerage, are all governed by rules and regulations that make it virtually impossible for them to interpret MLS data in any manner that could negatively fuel declining real estate prices.

CREA, Regional MLS systems, Franchise Brands and any brokerage who lists homes for sale in any corner of Canada, all have a fiduciary duty to represent their Sellers.  Sellers and Sellers alone enter into marketing services contracts with ORE to promote their properties.  These contracts all state that the goal is to garner the highest price possible or at least that the listing price is the price set out to be obtained.  These contracts all are written and signed on contracts printed on and have Headings owned by the various MLS systems across Canada thus tying all ORE to sellers.

As read on the pages of Greater Fool, over and over again, ORE chooses to cherry pick data, that best endorses stable home prices or higher home prices because they have a legal obligation to do so.  While we all can respect this fiduciary duty, shouldn’t ORE, at least, make a disclaimer on who’s interest they are legally obligated to support, that being Sellers?

The time has come for an unbiased interpretation of all available house price trend data, including MLS.  Canadians deserve it!

Smart realtors know there’s no such thing as a soft landing. Booms always bust. Bubbles pop. It may not be US-style swift or cataclysmic. After all, Vancouver’s not Phoenix and Toronto ain’t Miami. But the result’s the same – a lot of people losing tons of money.

I’m sure Ross has a hard time telling greedy vendors to price realistically, or persuading house-horny kids to stay renting for the next two years. The real estate cartel has but one goal. Higher prices and more commission. And it obviously spins the media.

Yes, the system is built to serve the sellers. And that’s why a soft landing will never happen.

VIC PRICE

138 comments ↓

#1 dave on 05.15.13 at 8:33 pm

Hope that is not their first flight!

#2 Sebee on 05.15.13 at 8:43 pm

My conspiracy is that if polls show Cons won’t win next election, they will put the wheels in motion to blow up the economy before they hand it over to the Liberals.

#3 Stupid Tal on 05.15.13 at 8:44 pm

What is the credibility of TAL since Canadian media always shows his opinion.

I mean anything guy has analysed or predicted became reality

#4 Asse on 05.15.13 at 8:44 pm

Sorry smoky, memory’s not what it was. Name was Harold, not Howard. But what 35issh guy would use that?
I miss old smoky, much more entertaining.
More info available upon request.
Cheers

#5 steve1976 on 05.15.13 at 8:44 pm

Not only MLS manipulates data! Apparently Urbanation also misrepresents statistics such as condo rents increasings by 10% in two years and leased units increasing by 30%. It’s all a farce!

Its a conspiracy I suspect!

#6 damien on 05.15.13 at 8:46 pm

Vancouver is not Phoenix and Toronto is not Miami but Boston and San Francisco housing markets did pop too.

#7 Stomper on 05.15.13 at 8:48 pm

Great post Garth – shame shady tactics and Frankenumbers over here in Australia.

Same sheeple doing the same thing as in Canada – because things are different here.

#8 canadian on 05.15.13 at 8:48 pm

All of these so called experts on Canadian real estate probably drink at the same Kool Aid stand as the pollsters who predicted an N.D.P win in B.C . These people don’t understand that we’re out of money in the real world with high taxes ,tolls ,housing costs etc…

#9 RadioMan on 05.15.13 at 8:51 pm

If there are so many lonely Toronto condos right now and historically high ownership rates, what is with today’s news of rapidly rising condo rents and high condo rental demand?

#10 Squatter on 05.15.13 at 8:52 pm

We’re getting brainwashed as always.
It seems everything is corrupt in this world.
Can’t they tell the truth once in a while?

#11 Saskatoon-Living on 05.15.13 at 8:52 pm

http://watch.bnn.ca/#clip927397

Saskatoon and Calgary are different!! Andrew Moffs says so, whoever the f that is.

#12 Smoking Man on 05.15.13 at 8:52 pm

O GARTHO did I not tell you and the dogs the machine will blow sunshine toward the track 6ERS..

The financial post, Harpos personal blog came out with an incredible story that BOC will be raising rates…….

When the world is in a currency war, race to devalue…

BA HAHAHAHAHA… the problem track6ers are getting good at reading between the lines. And they tend to take there q’s from Zero hedge vs cfto or FP.

Sucks to be a renter…….

#13 Smoking Man on 05.15.13 at 8:56 pm

#4 Asse on 05.15.13 at 8:44 pmSorry smoky, memory’s not what it was. Name was Harold, not Howard. But what 35issh guy would use that?I miss old smoky, much more entertaining.More info available upon request.Cheers

Please explain

#14 Asse on 05.15.13 at 8:56 pm

My friend,
Dave, Dave B, Davey boy, David,
Always a pleasure to read your comments, and I’m proud of you. No use of ‘boyz’ or ‘dude’ is impressive, for some. Hey dude, what’s with the facial hair?
Glad your first, your teachers would never have expected that among other accomplishments.
Cheers

#15 Gladiator on 05.15.13 at 8:58 pm

Yogi Berra would have said “prices are balanced, until they aren’t”. We all know the truth about prices and can plan accordingly. The herd will see it too, but it will be too late.
Have read somewhere that one of the ways to short RE is to rent.

#16 Chris L. on 05.15.13 at 8:59 pm

F didn’t mess with the 25 year because he wanted to make Garth look foolish ;)

#17 Devore on 05.15.13 at 9:00 pm

The “ORE” (I like that label) has actually two stakeholders they are promoting: themselves (ie, REALTORs(tm)(r)) and sellers. These goals lead the organizations to spin positive news, stable or rising market, and lots of transactions. To that end, they came up with the “property ladder” myth, designed to get people buying early and upgrading often. Just don’t ask about all those transaction costs sapping your hard earned equity at every turn.

#18 Notta Sheeple on 05.15.13 at 9:00 pm

#2Sebee on 05.15.13 at 8:43 pm
=====================

You might be on to something, there.

Bush’s Republicans already wrote the handbook.

#19 AK on 05.15.13 at 9:01 pm

Peter Munk’s contrarian bet on Toronto’s condo market

Toronto condos

#20 someone on 05.15.13 at 9:06 pm

Following up on last night’s blog topic, I just want to point out that under CIBC’s Newcomers to Canada Plan, recent immigrants who received Permanent Resident status within the past 3 years qualify for a chequing account with no monthly fees and no transaction fees for a year.

https://www.cibc.com/ca/chequing-savings/newcomers.html

#21 Smoking Man on 05.15.13 at 9:07 pm

What’s it like to be a renter couple, your friends all toting garnet and hardwood, they have an ora of superiority about them. You and spouse think your smarter and tactfully.

Yet you feel like second class citizens, back of your head, renters are losses…

But you hold course, income to prices out of wack. But with every year they are ahead.

That’s a powerful emotion, that’s what your fighting basement dwellers,

And guys, you will capitulate if she starves you out for a bit of honey….

THE SMOKING MAN, sees the obvious…..

#22 Devore on 05.15.13 at 9:08 pm

#5 steve1976

Urbanation gets their stats from developer surveys, which is another way to say they get someone to make up their numbers (plausible deniability). It is also another way to say if they do not play ball with developers, they can turn off the servers, shut down the web site, and go find real jobs.

If you want credible rental numbers, check out the indexes published by Sauder School of Business (their web site seems to be undergoing some work atm), just Google that when it’s back up, or check out the graph from a recent Pacifica report.

http://pacificapartners.ca/blog/wp-content/uploads/2013/05/K-Canadian-real-rent-index.png
http://www.sauder.ubc.ca/Faculty/Research_Centres/Centre_for_Urban_Economics_and_Real_Estate

#23 retired WI Boomer on 05.15.13 at 9:08 pm

Soft Landing? Where has there EVER been a soft landing?

High Debt, declining jobs, export prices falling….Who is the Master Bull Feces Thrower in your province?

Yeah, and like the Stock Market will evermore grow…..

Get ready for some FUN. No bad debt goes unpunished.

#24 Vultures Begin to Circle on Canadian Housing Downside on 05.15.13 at 9:12 pm

Seems like hardly a week goes by now, without at least one international think tank or commentator talking about lofty-looking Canadian realty prices and the over-exposure of Canadian banks and taxpayers via the CMHC underwriting of high leverage loans. Stats on Canadian mortgage mania the past few years, are leading some to acknowledge that “maybe Canadian banks are not quite so conservative as conventional wisdom has it”. See: Is the Canadian housing market falling apart?

Not surprising really. Price increases over the past decade have been truly epic in Canada. Experience in other countries reminds of the negative effects now likely on the great white north’s economy and other asset markets:

While a falling housing market and subsequent wave of defaults would surely hit the income statements of Canadian banks, they may not have the same level of mortgage exposure as U.S. banks did because the government backstops so many of the mortgages. What’s more, Canada’s banking sector is so concentrated that the country would almost surely rescue any bank that did run into trouble because of mortgages.

No doubt there are hedge fund managers quietly scheming to short the housing bubble. There are Canadian REITs, for example, that would suffer in a hard landing for housing. Home builders, too. The broader Canadian stock market might suffer if home owners lose much of their wealth and find they need to sell equities to make up for the losses. The Royal Bank of Canada has a lot of uninsured mortgage exposure in the provinces that contain Vancouver and Toronto…

The bubble seems fairly obvious, even if it’s existence is still disputed within Canada. Canadian home prices are up nearly 100 percent since 2000. The price-to-rent ratios in major urban population centers are through the roof. In British Columbia, home prices rose 163 percent in the decade from 2001 to 2011, according to a study by the International Monetary Fund…

…what we’re learning is that Canada didn’t avoid a housing bubble and financial crisis—it’s just that the Canadian crash is “on tape delay.”

#25 Notta Sheeple on 05.15.13 at 9:14 pm

“……Since 1913, when the first Code of Ethics was approved by the National Association of Real Estate Boards, it has served as the ten commandments of the real estate community, binding REALTORS® together in a common continuing quest for professionalism through ethical obligations based on honesty, integrity, fairness, accountability and professionally competent service…”

– “The Realtor Code” (2011)
========================

Honesty? Integrity? Accountability?

Both CREA and the current government must be quoting from the same ‘Action Plan’.

Always fun to watch them both self-implode under the weight of their own Harpocrisy.

#26 Mike T on 05.15.13 at 9:14 pm

Welp

no turning back now – may as well get the news out and get on with the pain

this should give truth at least 1 point amirite?

#27 Smoking Man on 05.15.13 at 9:20 pm

#169 Steven on 05.15.13 at 6:14 pm
think immigrants (like native Canadians) come in all colours. — Garth

Do you mean varying shades of brown Garth?

You are done here. Bye-bye. — Garth

………..

Nice. Two things I hate, bible trumpets and racists..

#28 EIT on 05.15.13 at 9:21 pm

“are all governed by rules and regulations”

Wonderbar, a partial government supporting sellers. Another example of how gov provides leadership, instead of a place for all of us to hate each other… together.

#29 Shawn on 05.15.13 at 9:22 pm

SUCKS TO BE A DOOMER?

It’s gotta suck to be a doomer this past while.

Meanwhile my 85% equity, 15% cash, 0% fixed income portfolio of just a handful of well selected individual stocks has made truly eye-popping returns in 2013 on top of equally eye-popping results in 2012.

Just saying. (But then I am a quasi professional investor who has taken the courses, and read my Buffett very carefully for hundreds of hours. Do not try this at home. It’s not for the unarmed and uninitiated)

#30 *Naked Ape* on 05.15.13 at 9:26 pm

@ Sebee

Somebody said somewhere in a quote I read, and along these lines, ” he who knows he is going down in politics poses the greatest danger of all’…..

#31 AK on 05.15.13 at 9:29 pm

The turnaround continues in Greece.

“Greece’s Government Bond Yield for 10 Year Notes declined 203 basis points during the last 30 days”

Greek Bonds

And a new 52 week high for the “GREK” ETF.

Greek ETF

#32 TurnerNation on 05.15.13 at 9:30 pm

I think they are wearing their flotation devices. Should be ok.

#33 Chickenlittle on 05.15.13 at 9:31 pm

#19 AK:

I wonder why he won’t invest with the honourable (cough) Mr. Brad Lamb? Is it because Senior Lamb is small potatoes?

#34 Smoking Man on 05.15.13 at 9:31 pm

Damn this no drinking thing sucks, no deletes, no creativity, boaring posts…….. Even doing charity… Wtf

Atlantic City this week end dogs, got some catching up to do.

Gartho, delete button close, I have a build up…

#35 Shawn's Regret Coming Soon! on 05.15.13 at 9:34 pm

#29 Shawn on 05.15.13 at 9:22 pm

doesn’t know shit – definition of doesn’t know shit #29 Shawn on 05.15.13 at 9:22 pm

shit – insulting terms of address for people who are stupid or irritating or ridiculous

LMAO ; )

#36 AK on 05.15.13 at 9:41 pm

#34 Smoking Man on 05.15.13 at 9:31 pm
“Atlantic City this week end dogs, got some catching up to do. ”

——————————————————————–

Hey Smokey,

I appreciate you supporting the Atlantic City properties.

My investments in “MGM” and “BYD” have been rocking lately. :-)

#37 Waiting and waiting on 05.15.13 at 9:43 pm

I would be very pissed if someone getting paid a large amount by me did not do everything possible to get me the best results.

Real estate, financial planner, lawyer,… whatever.

#38 Evaporation of paper wealth on 05.15.13 at 9:43 pm

Evaporation of paper wealth

A confusing aspect of paper wealth is that it can increase or decrease across an entire economy, without any changes to the real economy; this is known as “asset price inflation or deflation” (a change in the aggregate (nominal) level of prices without corresponding real change).

Thus, paper wealth does not “come from” or “go to” anywhere – the prices just go up or down. “It’s a common misunderstanding to ask, ‘where did the money go’?” which is particularly asked in the case of a stock market crash or in the bursting of a price or housing bubble. This has more colorfully been described as:

“A lot of paper money/paper wealth goes to money-heaven.”

#39 45north on 05.15.13 at 9:59 pm

Vultures: Seems like hardly a week goes by now, without at least one international think tank or commentator talking about lofty-looking Canadian realty prices and the over-exposure of Canadian banks and taxpayers via the CMHC underwriting of high leverage loans.

They – the Canadian banks, CMHC and the Canadian Government – are taking actions to protect themselves from a real estate crash. Quite apart from falling sales, price to income ratios the actions at the top signal what is to come.

#40 timmy on 05.15.13 at 10:03 pm

If someone as inept and corrupt as Christy Clark can win an election then anything is possible…big oil $, vote rigging aside

#41 Silver on 05.15.13 at 10:04 pm

Why do people always forget property tax revenue, and increased wages for the powers that be are based on these overly positive Real Estate Frankennumbers and their constant forced perception of unreal growth.

Property Taxes will take of like a rocket to cover the lost revenue streams if this market ponzi fails in Vansewer and bc…
Check what happened in the states…

Nice positive information from the people who tell you 300 mil in olympic village ponzi dept in vancouver will be paid off by the sale of 181 units… thats how much a unit ???

Silver

#42 meslippery on 05.15.13 at 10:04 pm

#24

home prices rose 163 percent in the decade from 2001 to 2011, according to a study by the International Monetary Fund…

Yet my wages adjusted for inflation remain at 2001 levels. (OR LESS)

So something has to give…

#43 Grim Reaper/Crypt Speculator Ⓤ on 05.15.13 at 10:05 pm

#184 Herb on 05.15.13 at 8:32 pm

#152 Grim Reaper etc.

you can come and get me anytime. I’d enjoy the trip with you.

===================================

No problem

If you book early, you can get 10X’s air miles ……Canadian Retread $$$$…..and autographs from 1960’s icon..and drum roll….my own credit card with – 1% Interest Rate.

PS : I’m the person at Superstore with the dark robe..pale complexion… and sickle

#44 Freedom First on 05.15.13 at 10:20 pm

Same denial by the usual suspects about the RE market going down in Canada as there was in the U.S. before their RE market tanked.

I don’t care. I see the liars for what they are. Always have. I stay liquid, balanced, diversified, and debt free. This recipe is fool proof. Ignoring peer pressure is the key. Marry someone who feels the same way, or live forever as a slave to the system. You will leave everyone eating your dust, and you will never be financially destroyed, like so many Americans, Japanese, and Europeans. The brainwashed herd.

Thanks for pulling down the panties of all the liars Garth. And good to know there is the honest folk affiliated with the RE market who appreciate your blog too Garth.

#45 Smoking Man on 05.15.13 at 10:22 pm

#36 AK on 05.15.13 at 9:41 pm

Should have invested in ceasers

Big donator here……..

#46 Peter on 05.15.13 at 10:23 pm

Hi Garth, I agree with you that real estate give a bias view of the numbers, we should be able to access the numbers and calculate for ourselves the market place. I also read alot of numbers on here that do the same thing, using vancouver (up 169% over 10 yrs) numbers to desribe national trends in just as troubling . IT IS different EVErywhere , even a ten % decline is an adjustment not a crash . For those who rent, if things do come down , your rents will go up, the value increases have kept rent DOWN. Everyone should learn to assess their own situation , renting a space to live or renting money to own a home are not much different , finding value is key , in stocks , in homes , in life , good luck to all

#47 Canadian Watchdog on 05.15.13 at 10:35 pm

TO Homes Sold cvs data for mid-May can be downloaded here. GTA and select area statistics can be viewed here.

Always remember MLS stats are based on the last MLS # list price and also include presales and developer sales.

Because more developers are using MLS to sell units away from their conventional methods (sales office), which was an offline market now amalgamating into MLS resale statistics; the only method to monitor GTA entire market condition is to consolidate resale with new homes sales. Chart

Note: Some presale or developer sales on MLS would also be double-booked on RealNet stats, so consolidated sales on that chart is slightly overstated.

#48 Genxer on 05.15.13 at 10:45 pm

“For those who rent, if things do come down , your rents will go up, the value increases have kept rent DOWN.”

Can you please explain this logic to me? How does a smaller supply of rental housing and a higher asset cost for landlords translate into less price pressure on rent?

How the heck would lower housing prices increase rent?

Rent is a fairly stable number because it is based on income. If people can’t afford to rent a place, the rent is lowered until someone can.

#49 Soft landing — Greater Fool – Authored by Garth Turner – The Troubled Future of Real Estate – The Affluent Boomer on 05.15.13 at 10:49 pm

[...] via Soft landing — Greater Fool – Authored by Garth Turner – The Troubled Future of Real Estate. [...]

#50 words on 05.15.13 at 10:51 pm

There are the obvious reasons to love this blog but to learn a new word like today’s “dirigible” is pure joy. Keep educating this illiterate scientist, Garth!

#51 Genxer on 05.15.13 at 10:53 pm

What’s it like to be a renter couple, your friends all toting garnet and hardwood, they have an ora of superiority about them. You and spouse think your smarter and tactfully.

Yet you feel like second class citizens, back of your head, renters are losses…

But you hold course, income to prices out of wack. But with every year they are ahead.

That’s a powerful emotion, that’s what your fighting basement dwellers,

And guys, you will capitulate if she starves you out for a bit of honey….

– Ridiculous. A balanced portfolio outpaced housing by 2-3x over the past two years. Others can have the house – I’ll take multiple family vacations, university for the kids and a solid retirement. Having more time to work out and stay ripped doesn’t exactly suck either.

#52 Bong Toking Man on 05.15.13 at 11:19 pm

As Know…pee-pull are Lie-ning up yerz 4 one way trip to Marz.

Marz is gnu phrontier…

Knot Bildink any more land on Marz.

QQQQ the marztians….sir -vival of the phitest.

Buy now or be teresstialy excluded 4 ever.

free O2 tanks if line up early

#53 Shankar on 05.15.13 at 11:26 pm

That’s a powerful emotion, that’s what your fighting basement dwellers,

I rent a high rise apartment from a REIT that I also own shares in.

#54 Smoking man on 05.15.13 at 11:29 pm

#51 Genxer on 05.15.13 at 10:53 pm
Ridiculous. A balanced portfolio outpaced housing by 2-3x over the past two years. Others can have the house – I’ll take multiple family vacations, university for the kids and a solid retirement. Having more time to work out and stay ripped doesn’t exactly suck either.

First off so disrespectful not to quote the author of a brilliant truthfull post… Obviously your a teacher who grew some wine induced balls…

University sucks it’s a scam. The fact that you mentioned it means one of two things….. You’re stupid, or you got skin in the game…. Hope it’s scenario 2, I can respect that..

#55 Alberta Ed on 05.16.13 at 1:07 am

The MSM not only drinks the RE Kool Aid, it’s too dumb to know what the flavour is.

#56 NotAGreaterFool on 05.16.13 at 1:14 am

Competition Commissioner appeals Toronto Real Estate Board victory

http://www.thestar.com/business/real_estate/2013/05/14/competition_commisioner_appeals_toronto_real_estate_board_victory.html

#57 Screwed on 05.16.13 at 1:18 am

FWIW .. The Lib majority is making me kinda house horny – again.

Looking at a condo in Coal Harbor for friends and family getaway and SFH in Northern BC, preferably near BC Hydro and LNG sphere of influence. Maybe the next boom up there? Where else to put money when leverage is easy?

Prices are whacky but supply is good. Right place will come in due time.

Premier says “Best times for BC ahead”. That a rich statement and she better be right and backing it up with actions.

Go ahead Christy, leverage up in BC and build, repair

#58 n1tro on 05.16.13 at 2:09 am

Conspiracies? How about conservative senator Mike Duffy’s $90,000 tax bill being paid for by the Office of the Prime Minister “without” Harper’s knowledge! The PMO classified the payment as a “gift” for the senator that coincidentally was appointed by Harper back in the day?!

Did Canadian tax dollars just bail out a fat (literally) cat senator? How does a regular Canadian like me get these kinds of “gifts”??

#59 betamax on 05.16.13 at 2:18 am

“I’ve never seen a soft-landing in 53 years” – Angelo Mozilo, former CEO of Countrywide Financial.

#60 Dean Mason on 05.16.13 at 2:18 am

To AK #31 The runaround in Greece continues.Socialists will never change and the people that are brainwashed will still believe in a world of utopia that never exists.

I can go bankrupt and not pay my bills and steal from new people and do it all over again and make it look like a turnaround.Give me a break.

#61 Buy? Curious? on 05.16.13 at 3:13 am

Garth, 8.5 out of 10! Gawddamnit! You made me spit out my coffee on my laptop. Good thing it’s wrapped in plastic. It’s not first time fluid landed on my keyboard.

Why didn’t you get a 9 or a 10? Well, 2 things: France is not a country of puffs. How it got that reputation is beyond me. Second, toking, is a reference to marijuana and marijuana does not induce hallucinations.

Overall, your post was great but I felt a tinge of sadness though. How can these real estate boards continue to screw us without anyone demanding some sort of accountability? The news takes their word as truth (I’d say gospel but religion are for dildos, residents of a small town in Newfoundland, google it). I’m glad you’re on top of these bastards.

Smokey, @27 “Nice. Two things I hate, bible trumpets and racists…” Very cool.

http://www.youtube.com/watch?v=82GUjPConiE&feature=player_embedded

#62 Humpty Dumpty on 05.16.13 at 3:20 am

Louis Lerner couldn’t suck or blow her way out of this one being the dirigible of the IRS….

You gotta see this…. Jon Stewart is freckin halarious…

http://www.youtube.com/watch?v=izc_IaBTr50&feature=youtu.be

#63 VIVE LA FRANCE on 05.16.13 at 3:30 am

#51 Genxer.

Hope you all read that comment. Stop talking, start walking.
While the story line on this blog repeats itself so frequently that even monkeys know the drill, I doubt too many of us commenters have changed their ways and started alternative, smart investments.

Cautiously so, I started. Steady it goes.

#64 Tony on 05.16.13 at 3:39 am

Re: #9 RadioMan on 05.15.13 at 8:51 pm

Condo rents will fall sharply over the next couple of years as the price of Toronto area condominiums implodes.

#65 Humpty Dumpty on 05.16.13 at 4:00 am

This guy blows bubbles….

‘We do not believe there is a bubble’: CEO of Canada’s largest non-bank mortgage lender speaks up after 15% share drop

http://business.financialpost.com/2013/05/15/we-do-not-believe-there-is-a-bubble-ceo-of-canadas-largest-non-bank-mortgage-lender-speaks-up-after-15-share-drop/

Looks like Paul Masson is coming out of the closet…

Bank of Canada should hike rates to pop bubble: former BoC aide

Masson said financial imbalances and risky investment decisions are spreading. In addition to the overheated housing market, he cited record-high levels of household debt.

“The longer the boom lasts, the more likely it will end in tears,”

http://ca.reuters.com/article/businessNews/idCABRE94E0XP20130515?pageNumber=1&virtualBrandChannel=0

#66 willworkforpickles on 05.16.13 at 4:04 am

Wait until August…. for then the downturn this way cometh……but in the meantime….the lies – the lies – and oh yeah oh yeah…………. the lies !

#67 Humpty Dumpty on 05.16.13 at 4:27 am

Stroking isn’t enough for this group…

Their about to secrete a revolution….

EU sets master plan to: expropriation of savers is

The EU follows with the planned participation of depositors in case of bank failures a master plan from 2012. The much-vaunted banking supervision is not under the control of the banks. You should secure access to the taxpayers’ money in the ESM, so that the national debt does not further increase the cost of the bank bailout.

http://translate.google.com/translate?sl=de&tl=en&js=n&prev=_t&hl=en&ie=UTF-8&eotf=1&u=http%3A%2F%2Fdeutsche-wirtschafts-nachrichten.de%2F2013%2F05%2F16%2Feu-setzt-masterplan-um-enteignung-der-sparer-kommt%2F

#68 Asse on 05.16.13 at 4:29 am

My friend,
If you are what you eat, and you have an affinity for twinkies, what are you? No, no that:
A ‘big sexy’ broken down ‘gladiator’ who pronounces ‘meow’ with a lispy flair. Haven’t heard it in a while…did they have a chat?

And no, I’m not going down. Heck, even my Facebook is still up. And I really don’t have much time for these shenanigans…first post in 3 months was a couple of days ago…just feeling frisky, alive and freeIng. Things are good my friends, and hopefully soon, better.

Who said anything about racists? Oh, yah that was me. Something about someone being charged back in March when someone I knew ‘dissappeared’ for a couple of days. Of course, it was probably just coincidence but given the same age and surname I found it ‘interesting’. Heck, I should know better, we couldn’t have incognito racists in our midst could we? I only discriminate against any who try to intimidate.

Smokie, I like the bible(s), new testament more than old. I’ve read both, been to bible study and intervarsity christian fellowship groups. No, I’m not a bible thumper. Stuff you didn’t know, huh? It provides strength, virtue and patience my friends, no membership dues required.
Cheers

#69 Deliverator on 05.16.13 at 5:23 am

#38 Evaporation of paper wealth on 05.15.13 at 9:43 pm
Evaporation of paper wealth

A confusing aspect of paper wealth is that it can increase or decrease across an entire economy, without any changes to the real economy; this is known as “asset price inflation or deflation” (a change in the aggregate (nominal) level of prices without corresponding real change).

Thus, paper wealth does not “come from” or “go to” anywhere – the prices just go up or down. “It’s a common misunderstanding to ask, ‘where did the money go’?” which is particularly asked in the case of a stock market crash or in the bursting of a price or housing bubble. This has more colorfully been described as:

“A lot of paper money/paper wealth goes to money-heaven.”

While it’s true that the sale of a relatively few number of properties affects the value of all of them in a given area, those sales are done with real money. If they were financed through a mortgage or other collateral loan, the money was created by the lending bank out of thin air. That new money enters the economy through the seller’s bank account(s) and circulates like any other. However, the converse is not true; once the property value drops, the debt does not vanish back into thin air. It must be repaid, or defaulted on.

#70 The real Kip on 05.16.13 at 5:58 am

I thought Ben was your frien?

My girlfriend sold her house last week as part of a divorce settlement. SFH, nice place, quiet street, DOM: 1. They removed the finance and inspection conditions yesterday.

Where is this hot market? Leaside? Nope. Forest Hill? Nope. It’s in Keswick, that’s right, 70 km north of the downtown core in commuterville where, according to this blog, some cataclysmic real estate event is happening.

I’m with Ben and friends.

You call a market on one hose sale? LOL. — Garth

#71 jorytest on 05.16.13 at 7:11 am

Well put Garth.

When the general public awakens to what is going on with the cartel and real estate in Canada and that will probably happen eventually, it will be messy.

However the general public just elected Christy Clark in BC, so clueing in on anything might not happen anytime soon in BC.

#72 torontorocks on 05.16.13 at 7:27 am

Rents our of whack. 2 bedroom, 2 bath, taking rental ‘offers’ at around 2700 on Bay near ACC. Now, they are same time trying to sell. So I think what happens is people are trying to monetize/sell their condo, but can’t, so they try and cover costs w rent. At same time, they realized they couldn’t sell at a reasonable price OR are holding off sans tenants (bc you can’t sell during the lease) so the supply of rentals os down. Soon it will equalize. There is no effing way TO is worth this scratch. Or it is and I’m pooched.

#73 maxx on 05.16.13 at 7:56 am

The FIRE cartel is simply continuing its highly predictable (and crashingly boring) efforts to manage the herd mentality. The harder they spin, the more smart money will sit on the sidelines.
Fundamentals suck, and good jobs, for the most part, are not coming back.
People continue to inhale debt as though their futures were iron-clad. Big mistake.
Shame that government always seems to capitulate to FIRE. As FIRE constantly get economic analyses wrong, manipulating spin is more of a sure thing.
Tin foiler? Don’t give a rat’s behind…..not a hope in hell that I will buy RE in this mirage of a market.
I smell serious fear.

#74 AK on 05.16.13 at 8:06 am

S&P Won’t Hit 2,500 Until 2017: Strategist

I love reading the Doomer comments at the bottom of the article. :-)

Rosenblatt Securities’ Brian Reynolds

#75 amazon girl on 05.16.13 at 8:46 am

Hi GARTH,so will not be a 25 years morgages?
F is playing chess..or poker with a fool face..
What will be, hes next move?
Maybe you and I can play a game of chess some day

thanks

#76 not 1st on 05.16.13 at 8:50 am

I am so disappointed in the business leaders of canada and in part, our politicians as well.

Successive gov’ts have outright told them to either create value added products or at least find new markets to take our raw commodities to. They have also advised business to create some innovative industries as well, tech or biomedical or renewable energy or something similar.

So now its more than 10 years later and what do we have, most of exports still going into the U.S.A who doesn’t always want them. We have one pathetic tech company called RIM. We have oil companies doing the exact same thing they have ever done. We have stalled pipelines all over the place. We couldn’t even keep our manufacturing industry on life support, it went over to china.

Whats worse is we have created an entire industry based on selling over priced homes to each other.

Canada is going to take a real stumble if we don’t correct our ways. Maybe we are a one trick pony on commodities and thats ok, but we need to remove every obstacle there is and have these products flying off to every country in the world at lightening speed.

#77 TS on 05.16.13 at 8:56 am

Is it easy to get hard landing? Yes, such as higher rate to 9%. (not so hight, isn’t it?)

Who wants hard landing? …that can be a question.

#78 a prairie dawg on 05.16.13 at 9:03 am

#50 words

There are the obvious reasons to love this blog but to learn a new word like today’s “dirigible” is pure joy. Keep educating this illiterate scientist, Garth!

– — –

“Oh the humanity!”

#79 Chickenlittle on 05.16.13 at 9:13 am

#51 GENEXER
“I’ll take multiple family vacations, university for the kids and a solid retirement. Having more time to work out and stay ripped doesn’t exactly suck either.”

I agree. I almost spit my coffee out when my husband said he didn’t care if we rented for the next ten years. His reasons were exactly the same reasons you gave. Doing things is better than owning things in my opinion.

Besides, I have the holy grail of “granite and stainless” as a renter, and really it surprises me that anyone would go into debt for this crap! Tomorrow it will be something else that everyone is chasing.

It is not worth it!

#80 Canadian Watchdog on 05.16.13 at 9:22 am

GTA REALTORS® Release Mid-Month Resale Housing Figures

GTA revised sales down 9.6% y/y, new listings up 3.4% y/y. There seems to be a new trend with TREB data because every month, listings posted from last year's data seems to disappear from the page. I'll post June mid-month stats here and we'll see what happens next month.

June Mid-Month

2012 New Listings:

City of Toronto ("416") – 3,391
Rest of GTA ("905") – 4,991
GTA – 8,382

#81 Dr. Wayne on 05.16.13 at 9:27 am

#10 Squatter on 05.15.13 at 8:52 pm

We’re getting brainwashed as always.

==========================

The public is only ‘brainwashed’ if they swallow the bull sh++ dished out to them. Unfortunately, stupidity runs rampant in the human race and, therefore, yes, many ‘are’ brainwashed and suffering the consequences.

#82 robert on 05.16.13 at 9:37 am

Well seems we do not need to wast more time thinking what;s going to happen. GTA is truly different, less sales but strong prices. Taking longer to sell but homes still selling at good pace. I am a vulture waiting for the last 3 years. Time wasted, still living in a undersized home waiting for nothing.

#83 2CentsCdn on 05.16.13 at 9:38 am

You have to hand it to the Canadian RE industry (and playing the media like a puppet). They have done an amazing job keeping this thing going. No other country in the world has been able to do this for near this long. The layers and layers of information manipulating and lies has been unbelievable. Unfortunately the public’s own greed, lust and ignorance feeds the system. So the crack dealers keep dishing out the crack.

#84 Realtor guy on 05.16.13 at 9:39 am

Is it me or are financial guys just pissed that there hands are tied and feel that realtors hands aren’t?
Ever see what financial predictions show is always 10 or 15% percent returns on past numbers…but always have disclaimers not promising the same numbers…kinda sounds the same to me…

Brad Lamb promises a 242 per cent ROI with a one-bedroom condo. This is the Wild West of investing. No financial advisor could ever suggest such a return. — Garth

#85 Canadian Watchdog on 05.16.13 at 9:44 am

Actually I just noticed mid-May 2012 GTA listings was posted in the text and was 8,749. TREB revised it up to 8,856 in today's report. So somehow TREB discovered there was 107 extra listings a year later.

I find TREB listing growth very odd when comparing it to Red Pin Weekly MLS listings. They started reporting data last June so next month we'll have alternative year-on-year listing figures.

#86 Chris on 05.16.13 at 9:50 am

Hey Garth, have you ever tried to call out the CREA (and others alike) across Canada and call bluff to their BS of housing numbers? You mentioned sales around Vancouver are 30%+ or lower than last year, yet they are tooting their own horn to only 6% lower. Please (if you haven’t already) publically call them out (somewhere more public than on here) and see how they respond. Then keep doing it! We need someone with a loud voice to start calling these RE associations out on their on BS! Please!!!

#87 Rational Optimist on 05.16.13 at 9:56 am

48 Genxer on 05.15.13 at 10:45 pm

That’s true- credit can distort the price/income relationship when it comes to purchasing, but not with renting, or at least not in the same way.

What may put an upward pressure on rents is when home prices start to lose, and people stop viewing ownership as the clear best choice and turn to renting again. Right now, over 70% of all households own, a huge pressure downwards on rent. This number will decrease as newly-formed households increasingly view renting as the best choice (or heaven forbid actually do their own analyses in their own markets), and rents will experience upward pressure. Do you know what rents have been doing in most parts of the U.S.?

Rents and prices are completely out of whack with one another. That needs to be corrected. There are two ways to make that happen, and we’ll probably see a bit of both (though, yes, probably more one than the other).

#88 sciencemonkey on 05.16.13 at 10:12 am

Smoking Man you are often right, including in #21. I experience the renter’s cognitive dissonance you describe. (At least the gf is happy to rent forever.) On the other hand, the worry of huge debt over my head would cause me an equally high level of psychological distress. Nothing to do but suck it up, or move to ‘merica…

#89 Grantmi on 05.16.13 at 10:16 am

Now that the BC election is over.. all I’m hearing now on CKNW is real estate seminars to flip homes in your spare time, and make all kinds of great money!!

Wehhhhhhheeeeeee!

$$$$$$$$$$$$ for everyone!!

#90 GregW, Oakville on 05.16.13 at 10:17 am

Hi Garth, re: Stocks, 2008, GMO march May 25th

‘TNL@TB’ CTV Chief Financial Commentator Pattie Lovett-Reid this morning said (basically) everyone should buy some stocks, and don’t worry if it goes down. http://canadaam.ctvnews.ca/ (see, Financial Tips: Advice for first-time investors)
I assume she hadn’t seen this news story? The Second line, “The same dynamic was seen in 2008, when everybody denied the lurking crisis.” http://rt.com/business/russia-technical-recession-hse-306/

What is this GMO or just GM food anyway? Why should you even care? And if it’s so good for you, why don’t they want you to know, by having a label on your food package???
FYI, more than a few country have now band GMO’s!!! But not Canada or USA.
This link has some info, and there is a worldwide march on May 25, 2013 http://responsibletechnology.org/
Find a march near you, May 25th
http://occupy-monsanto.com/tag/march/

#91 X on 05.16.13 at 10:25 am

In Vancouver you can buy a Hobbit house for 2.86 million. What a steal. Built in 1942, they don’t make them like that any more….

http://www.thestar.com/news/canada/2013/05/15/vancouvers_hobbit_house_on_market_for_286_million.html

Oh, wait, they don’t make them like that anymore for a reason.

#92 al on 05.16.13 at 10:30 am

some new condo buildings downtown, if you look say on Friday evening, very few windows have light – it’s like a ghost building.

in the meantime the buildings which are older or rental buildings are full of lights.

$1900 for a glorious 750 ft condo?

got a 900 ft basement with windows, back yard, parking, utilities, personal use washer dryer and wi-fi for $850 inclusive and 10 min drive to CN Tower.

well, let me think again..

#93 Kris on 05.16.13 at 11:05 am

In the ideal world, the govt would like to blow hot & blow cold to engineer a soft landing. No doubt, he could throttle the market if it’s getting too bubbly. But what about egging on a tanking market – There the govt has less options.

Rates are already rock bottom, but sure, they could keep them that way longer, I guess. Or hell, they could bring back 40yr AMs – but that seems unlikely, given how indebted Cdns are already.

So, the million dollar question – If F won’t risk deflating the balloon too fast, as we saw this week, then will the market tank on its own?

To put it another way, what factors (unrelated to govt intervention) could send the market into a downturn? Boomers unloading homes is one, of course. What else.. Fixed rates, variable rates.. A tutorial from Garth would be useful!

#94 Dr. Hoof - Hearted on 05.16.13 at 11:37 am

Still contend something very fishy about BC Election.

Now we have this massive psy-opp that all is well with a Liberal victory…lure more house horny virgins?

#95 Dr. Hoof - Hearted on 05.16.13 at 11:39 am

#91 X on 05.16.13 at 10:25 am

In Vancouver you can buy a Hobbit house for 2.86 million. What a steal. Built in 1942, they don’t make them like that any more….

====================
Yeah, they don’t.

When the Big Bad Wolf comes and sneezes, all the recently built stuff will blow up.

#96 aprilnewwest on 05.16.13 at 11:45 am

#86 Chris – Why don’t we all contact the station or paper and call them on it. Yesterday on the O’Leary and Lang program they had a guest speaker saying sales across Canada were down 3%. I think it was across Canada and not any particular city in Canada as I had just turned on the program. I would except this time I didn’t get enough info to know exactly what I’m talking about.

#97 Shawn on 05.16.13 at 12:10 pm

DOW keeps hitting record highs… why?

Could it be because the component companies like American Express, Coke, Walt Disney, Walmart , McDonalds, Exxon and the others mostly make money?

(As consumers I trust few of us are surprised that thes mega companies make strong profits)

And could it be that when they retain a portion of their profits the book values grow and their profits grow over the years?

And could it be that owning shares in these companies does benefit the owners through higher share prices over time, reflecting higher profitd per share?

Could it be that the DOW has hit new records repeatedly since its inception over a 100 years ago and is up a couple hundred times since then and that there is no reason not to expect that to keep happening over the long term?

Nah, that can’t be it. It must be due to manipulation and the FEd and the fact that investors are blind to all the debt and the pending end of the financial world as we know it. Yeah, that makes more sense. Right?

#98 brainsail on 05.16.13 at 12:21 pm

“This entrepreneur ditched the United States for Canada”

“I jokingly refer to the Canadian government as my venture capital partner,” he said.

“For five years straight, Shuster has received a check from the Canadian government ranging between $300,000 to $500,000. It’s part of the Scientific Research and Experimental Development program, which refunds private companies involved in high-tech ventures up to 68% of a qualified worker’s salary. A $100,000 employee costs only $32,000.”

A government handout for writing social game software?

#99 brainsail on 05.16.13 at 12:23 pm

OOPS! Link…

http://money.cnn.com/2013/05/16/smallbusiness/canada/index.html?iid=HP_LN

#100 Raginnn on 05.16.13 at 12:31 pm

Toronto home sales sink 9.7% in early May, condos tumble 13% Add to …

The $hit hitting the fan!

http://www.theglobeandmail.com/report-on-business/top-business-stories/toronto-home-sales-sink-97-in-early-may-condos-tumble-13/article11960360/

#101 Canadian Watchdog on 05.16.13 at 12:42 pm

#97 Shawn

Guys like you are the best sell indicators. Here's the latest from your mentor.

BERKSHIRE HATHAWAY CUT TO AA FROM AA+ BY S&P

#102 Humpty Dumpty on 05.16.13 at 1:13 pm

Magic Carpet Ride…

“A pronounced shift in both Canadian and US economies has taken place,” write Pacifica’s analysts. “The Canadian economy, once the envy of Americans, Europeans, and others, is now widely viewed as a commodity dependent, “one trick pony”.

In a series of charts we’ve reproduced here, Pacifica shows how a “mean reversion” is taking place in North America, with the U.S. economy recovering while Canada’s is for a world of hurt.

http://pacificapartners.ca/blog/2013/05/14/canada-us-real-estate-chartbook/#City_Summaries

#103 TEMPLE on 05.16.13 at 1:16 pm

#87 Rational Optimist on 05.16.13 at 9:56 am

What may put an upward pressure on rents is when home prices start to lose, and people stop viewing ownership as the clear best choice and turn to renting again.

and

Rents and prices are completely out of whack with one another. That needs to be corrected. There are two ways to make that happen, and we’ll probably see a bit of both (though, yes, probably more one than the other).

Probably not- rents are unlikely to increase without some supply constraints or income gains. Properties that are sold don’t disappear. Many are added to the rental supply. Factor in accidental landlords who can’t sell their properties, and rental supply goes up further.

Rental rates are entirely a function of supply and demand. Even though you mention that demand might go up, that will be countered with increased supply. Rental rates in the US stayed stable (i.e., paced inflation) or declined through their boom and bust. Local US markets have seen some recent rental rate jumps, but that isn’t attributable to migrations from ownership to renting.

Nobody stretches for very long to make rent- they just move. Rental bubbles are extremely short-lived for that reason. Notwithstanding the usual inflation adjustments to rent, it’s real estate prices that will correct to bring balance back to the price-to-rent ratio.

TEMPLE

#104 Dr. Hoof - Hearted on 05.16.13 at 1:16 pm

Canary in the mine:

Here in HAM -ville…I find my best indicator is the activity of the South Asian builders.

What often happens in the SFH market is they will buy a lot, and from start to finish have an almost 100% South Asian crew.

Now…I see a lot of empty lots house demolished sitting…for months. Some are up for sale. It appears they feel there only hope is to sit and wait…because more than likely they bought at peak price and have already lost approx 15%.

As the saying goes, you make your profit the day you bought the lot. The South Asians would often build a house and live in it for the capital gains. The Clientele is almost 100% Asian, but that SFH sector is drying up.

In this SFH sector, I see a holding pattern, and then the wake – up call will flood the market.

In the Multi – Family sector , it is still going full bore. Via the ghost cities hi rises being built, it appears a lot of speculation. The buyers may hold onto these, and less inclined to sell , at least for now.

#105 Holy Crap Wheres The Tylenol on 05.16.13 at 1:21 pm

#21 Smoking Man on 05.15.13 at 9:07 pm
What’s it like to be a renter couple, your friends all toting garnet and hardwood, they have an ora of superiority about them. You and spouse think your smarter and tactfully.
Yet you feel like second class citizens, back of your head, renters are losses…
But you hold course, income to prices out of wack. But with every year they are ahead.
That’s a powerful emotion, that’s what your fighting basement dwellers,
And guys, you will capitulate if she starves you out for a bit of honey….
THE SMOKING MAN, sees the obvious…..
Obviously Smoking Man didn’t see that a Garnet countertop would probably cost more than the home. Garnets are a group of silicate minerals that have been used since the Bronze Age as gemstones and abrasives. Garnets possess similar physical properties and crystal forms but different chemical compositions. The different species are pyrope, almandine, spessartine, grossular (varieties of which are hessonite or cinnamon-stone and tsavorite), uvarovite and andradite. Pick a color kids they’re pretty! Have fun gambling in Caesars’ or wherever Smoking Man!

#106 Smoking Man on 05.16.13 at 1:29 pm

#100 Raginnn on 05.16.13 at 12:31 pm

Toronto home sales sink 9.7% in early May, condos tumble 13% Add to …The $hit hitting the fan!http://www.theglobeandmail.com/report-on-business/top-business-stories/toronto-home-sales-sink-97-in-early-may-condos-tumble-13/article11960360/

………….

Did you see the weather, ha….. Jun will pick up may slack

Plus let’s not forget Rob at gm has been calling for a real estate correction since 2009

#107 pbrasseur on 05.16.13 at 1:35 pm

#97 Shawn

Well said!

#108 Dead Poet on 05.16.13 at 1:37 pm

Soft landing – it can happen, as the public realizes that the housing market is set for downward spiral, the government pumps millions (billions) to stem the flow of sales, they probably buy homes and sit on it, but keeping the masses unaware – insane thinking – well the Fed is doing that right now in pumping Billions into the stock market so the average Joe doesn’t get spooked.

The Dow is a poor indicator of the true health of the economy – but most Americans freak if they hear if the Dow drops a few hundred points…

I read in some obscure site that when the US is involved in any military action – putting the brakes on the economy forces thousands of unemployed to seek a job in the Military – thats how they fill the ranks – military drafts create resentment. The sheep will always follow..bahhhhhhhh

#109 raider on 05.16.13 at 1:38 pm

Is anyone reading Bloomberg… here we go again ;)
http://www.bloomberg.com/news/2013-05-16/brooklyn-to-california-bubble-threat-grows-in-housing.html

#110 Bearish on 05.16.13 at 1:38 pm

“The Canadian economy, once the envy of Americans, Europeans, and others, is now widely viewed as a commodity dependent, “one trick pony”.

http://pacificapartners.ca/blog/2013/05/14/canada-us-real-estate-chartbook/#City_Summaries

http://www.businessinsider.com/bearish-charts-on-the-canadian-economy-2013-5?op=1

#111 Blacksheep on 05.16.13 at 1:43 pm

Shawn # 97,

I’m not challenging the content of this comment or much of what you post, as you clearly display economic knowledge. I’m just surprised you don’t grow tired of your own, ‘systemic’ cheerleading.
Your relentless, It’s like your on payroll. Don’t get me wrong, I’m not suggesting you stop, as censorship in any form is bad.

I of course also realize, we ALL have agendas.

Just wondering what yours is?

#112 Smoking Man on 05.16.13 at 1:50 pm

I get a kick out of reading financial post, Canada version of operation mocking bird….

Reading the last few days it’s all but calling rates will go through the roof tomorrow…..

Ba hahaha ROTFLMA…

#113 Adam Smith on 05.16.13 at 1:55 pm

I find it slightly weird that you’re willing to challenge the house-mongers on obviously unreal numbers that makes things seem better for them than it is but you unquestioningly accept the US ‘recovery’ being claimed by the US gov that makes things look better for them despite their almost 1/4 people being on food stamps.

The other day you happily mentioned the US unemployment level being around 7% but that totally fails to account for workers who have simply stopped looking for jobs who are no longer being counted as unemployed. shadowstats.com includes those discouraged unemployed workers and the number is closer to 24%. Turns out shady real estate hustlers aren’t the only ones who like to play with numbers.

#114 Old Man on 05.16.13 at 3:01 pm

#112 Smoking Man – if you are going to Atlantic City this holiday weekend play roulette, and place the bets on numbers 16/19, as this is an old code word for a VIP that needs a payout; just give the guy that spins the ball into the wheel a wink and a nod before you bet, and see what happens.

#115 Dr. Hoof - Hearted on 05.16.13 at 3:17 pm

Richmond apartment building care home for sale

http://www.james-wong.net/blogs/realestate/archive/2012/01/17/apartment-building-care-home-for-sale-in-richmond.aspx

Richmond has very few apartment buildings for sale as there are very few such apartment buildings in Richmond. The demand for apartment buildings used for care homes is growing steadily in BC, and in the metropolitan area of Greater Vancouver. Such apartment buildings zoned and used as care homes are seldom available for sale in Greater Vancouver.

Available for sale in Richmond is an established 38 rooms “Independent Living” care home facility. The cap rate is around 6% for this Richmond apartment building. This Richmond care home is just 10 years old. The apartment building may be sold together with the business or the building can be sold separately. This Richmond apartment building is located on a large 32,000 sq ft lot. There is a possibility to expand this Richmond care home facility by building additional rooms to the north of the current building.

===================================
Perhaps Garth could comment on this.

As opposed to speculation, this is dedicated to steady cash flow

#116 Rational Optimist on 05.16.13 at 3:40 pm

103 Temple

I wonder how statistically significant accidental landlords might be- I guess you’re right that they will happen if too many folks are left holding bags they don’t want.

In a lot of parts of the country, legislation serves to help constrain rental supply. Until very recently in Ontario, there was almost zero construction of purpose-built rental stock- in many areas, not only in the GTA, condos served as the new rental supply, but as you know they were not purchased primarily as rentals (rather as speculations on continued capital appreciated). Anyway, most demand for homes was by households wanting to purchase, not rent.

If the housing market does suffer, demand for rentals will go up- I don’t mean by individuals who own now and move to renting, but by the formation of new households headed by individuals who sense risk in property ownership. The market will not supply these individuals adequately for a while, and rents will outpace inflation for a while to help bridge the gap between rents and prices.
Unless you believe that housing will correct by 60%- it’s overvalued by something like that based on rents.

#117 TnT on 05.16.13 at 3:45 pm

Living in the Upper Beaches renting a 3 bedroom – finished basement semi for $2000 per month.

Same house 2 doors down, same layout but with new granite and SS appliances listed for $589,000.00 and sells for $651,000.00 !!!!

Another house on same street MLS® E2631835 was just listed @ $579,000.00 and already sold over asking $595,000.00

This is UPPER BEACHES!!! rent these houses for $2000 per month but cost $600,000.00 PLUS to own.

When will the madness end?

#118 observer on 05.16.13 at 4:07 pm

When real estate doesn’t move. CREA makes nothing!

So I’m sure they will let it collapse “FAST” and then reposition. When the prices go back 20/30/40/..70% then they will once again be able to sell sell sell!

#119 observer on 05.16.13 at 4:09 pm

I’m seeing lots of building still 4Sale over 1.5 years. Lots are now rental units but eventually they the over saturate market will correct

#120 Kilby on 05.16.13 at 4:34 pm

========================

The public is only ‘brainwashed’ if they swallow the bull sh++ dished out to them. Unfortunately, stupidity runs rampant in the human race and, therefore, yes, many ‘are’ brainwashed and suffering the consequences.

********************************************
Well said, I can’t believe the number of mature, educated individuals who just leave their brains at the door when it comes to personal finance or real estate. Nobody wants to look at the fundamentals of the market and who is going to continue to support these outrageous prices. We have children in their 20’s with fairly good, steady jobs and with a few exceptions neither they or their friends would even consider buying a home….They don’t have enough money…..And they are the largest demographic after us “Boomers”

#121 Josh in Calgary on 05.16.13 at 4:54 pm

#29Shawn,
Sounds like you’ve done well. Now it’s time to read some Nicholas Taleb (Black Swan, Fooled by Randomness and Fragile Proof). Your 85% equity strategy will work great … until it doesn’t. Basically any chump can make a pile if they take on enough risk. As a matter of fact if you have 1000 chumps taking a lot of risk you’re almost gauranteed that 1 chump will become exceedingly rich. Of course this chump will just think he was simply smarter than all the other chumps.

Also what worked in 2012 and 2013 may not work in 2014. A lot of chumps thought they were awfully smart in 2006 and 2007 … until 2008 happened. Taleb tells the story of the Turkey that figured the farmer was his friend. After all, the farmer had fed him for 300 days in a row … but the next day was thanks giving!

#122 Bargains everywhere on 05.16.13 at 5:05 pm

Where, oh where, have all the gold bugs gone?

#123 Dr. Hoof - Hearted on 05.16.13 at 5:22 pm

Re Foreclosures:

Just curious.
Given Garth post yesterday about immigrants, I wonder if the banks foreclose on the local citizens(with no place to run) but not on the immigrants or offshore investors.

Reason I say that is such a strategy helps keep down the shadow inventory down and not scare off the foreigners which they seem to be catering to.

Just sayin….

#124 Tony on 05.16.13 at 5:33 pm

Re: #117 TnT on 05.16.13 at 3:45 pm

Plenty of stupid people in Toronto who’ll end up begging for change on Young Street still pondering all the houses they lost to the bank in instant foreclosure as the boom turned to bust. It is unbelievable but it actually exists.

#125 qwerdd on 05.16.13 at 5:39 pm

This gov. seems to flip flop on policies whenever it’s convenient. First loosen rules, then tighten, say there is no bubble then that the market is over heated and Canadians are taking on too much debt, now we’re fine again?

They wouldn’t know a bubble if it was even blowing out of their noses.

#126 qwerdd on 05.16.13 at 5:42 pm

As for Duffy, he seems to think housing is too expensive if on a senators sallery he can’t afford to put a roof over his head and needs the MPs CoS to foot the bill.

#127 Tom Vu on 05.16.13 at 5:46 pm

Low volume of posts today….unless Garths DELETE button is stuck.

I tink people are tearing up/renouncing their Canadian citizenship, then re-applying as immigrants so get better deal from banks.

Helps if you go to costume store and dress up like favourite ethnic group ! I once tried that ALIENS outfit and got mortgage for penthouse.

This will lead to major RE rebound !.
Happy Days are here again and I am the Fonz!

#128 Bottoms_Up on 05.16.13 at 6:39 pm

#126 qwerdd on 05.16.13 at 5:42 pm
———————————————–
He swindled taxpayer dollars at a rate of about $3800/mo (after tax). That’s pretty significant….but, for Ottawa, would only get you a decent SFH in the burbs.

#129 AK on 05.16.13 at 6:44 pm

#124 Tony on 05.16.13 at 5:33 pm
Re: #117 TnT on 05.16.13 at 3:45 pm

“Plenty of stupid people in Toronto who’ll end up begging for change on Young Street still pondering all the houses they lost to the bank in instant foreclosure as the boom turned to bust. It is unbelievable but it actually exists.”
——————————————————————–
Hey Tony,

How do you come up with this analogy Bud.?

Should I move back to me native country?

#130 Q on 05.16.13 at 6:55 pm

I watch the rental market in Vancouver and anecdotally I can say that rents in Vancouver have come down over the past year or so. Just a few years back, it was virtually impossible to find rentals in Vancouver. But now there are vacancies everywhere you look in Vancouver. In some neighbourhoods, like the West End, Kitsilano, Marpole, New Westminster, there are vacancy signs in front of just about every apartment building. This was unheard of a few years ago. Just a few years ago, landlords were evicting tenants en masse–so called “renovictions”–so they can renovate and raise the rent for new tenants. That’s not happening anymore. Now, it looks like the landlords are practically begging for tenants. I should add that these neighbourhoods have purpose-built rental buildings that are quite old and often have serious deficincies and bed bug problems. A lot of renters I know are turning their noses at these buildings and opting to rent brand new condos instead. Also, the condos have sprouted up in the suburbs, which is often closer to people’s jobs. You can rent a one-bedroom apartment in a 40-year-old bed bug infested building in the West End for about $1200 or you can rent a brand new condo with modern appliances at a suburban skytrain station for the same price. For a lot of people, it makes more sense to rent the condos. I think rents are going to keep down in this real estate crash. Especially, if more people start leaving Vancouver because of the high housing costs and low paying jobs.

#131 Carruthers on 05.16.13 at 7:24 pm

So, what was the p-value on that regression line Garth? Looks significant to me.

#132 Ralph Cramdown on 05.16.13 at 7:26 pm

#121 Josh in Calgary — “Basically any chump can make a pile if they take on enough risk. As a matter of fact if you have 1000 chumps taking a lot of risk you’re almost gauranteed that 1 chump will become exceedingly rich. Of course this chump will just think he was simply smarter than all the other chumps.”

This argument has been well covered by the chump-in-chief:
http://www.tilsonfunds.com/superinvestors.html

I feel for the old codger. He’s amassed such a pile that he’s going to have a very hard time beating the market going forward — he IS the market. And he’s the only great investor willing to manage it for the pittance he charges — anyone else of talent would expect two and twenty.

#133 Steven on 05.16.13 at 8:37 pm

BANNED

#134 Smoking Man on 05.16.13 at 8:41 pm

Can’t wait for the next provincial election…

The libs will get eviscerated,

Fail, they fire Paul godfree
Kill the casino
And now, Ontario dry for a bit…

Look out…

Torys got to lose who dat…

Other wise, NDP yikes

#135 GenXer on 05.16.13 at 9:08 pm

- #54 Smoking man

“University sucks it’s a scam. The fact that you mentioned it means one of two things….. You’re stupid, or you got skin in the game…. Hope it’s scenario 2, I can respect that..”

Thank you for validating my financial arguments by failing to address them in any way.

I’m happy for you that you were born into a generation that required zero education to start a career or a company. If you tried the same today, you would get crushed. This is not my opinion – it is sheer mathematical probability. Your views, my friend, are the product of a failed age.

#136 Tony on 05.16.13 at 10:36 pm

Re: #129 AK on 05.16.13 at 6:44 pm

My real name isn’t Tony and my roots on both sides of my family go back about six generations in Canada until they go back to Ireland and England. I’m what you’d call a true Canadian.

Actually we’d call you something else. — Garth

#137 sqwerrd on 05.16.13 at 10:45 pm

# 128, bottoms up

Ya, that’s a lot of cash each month. Lots of families live off of far less and that includes food, transportation, medical, etc.

If the guys can’t afford to pay for his own hows how can this government expect Canadians to on far less?

#138 Toddster on 05.18.13 at 5:55 pm

A soft landing would still mean 10’s or 100’s of thousands of dollars off of home prices in Vancouver and Toronto and other cities. Home prices here in the Upper Fraser are starting to fall.