Really?

ASSHOLE modified

One theme of yesterday’s insufferable post was that real estate’s not all it appears to be. That, as you know, is exactly as the industry wishes. Obfuscate. Mislead. Manipulate. Once again the poor, moist virgins are being led into a vortex of hormonal desire based on the false premise housing is going straight to the heavens.

Let’s look at steamy Toronto, since the cartel there just released its latest barrage of numbers, dutifully aped by the mainstream media.

This is what a breathless city of six million souls awoke to:

“The average price of a detached home in the City of Toronto hit close to $1 million in April as the GTA continues to be plagued by a shortage of new listings. That shortage of homes for sale helped pushed prices up an average of more than 10 per cent from April of 2013. The average sale price of a home across the GTA hit $577,898 last month, according to figures released Tuesday by the Toronto Real Estate Board. Sales were up just 1.8 per cent, year over year.”

Really?

First, the sales number. There is no reason whatsoever to believe it’s any more accurate than the one the Toronto Real Estate Board published last April. Then TREB counted 9,811 sales during the month, a number it now claims is really 9,535. Either than means 3% of all sales fell through, or the realtors screwed up. But the effect’s the same: ‘statistics’ are constantly and secretly revised, and always in a way that makes current sales appear to be more robust.

So, according to the board’s own unrevised data, sales in April of 2014 were 1% lower (not 1.8% higher) than last April. And sales this year are 3.1% lower than they were in 2012. Not so hot, actually.

Now, let’s yak about that ‘shortage of listings’ which is being blamed (along with a six-year-old land tax) for a ridiculous spike in prices. Last month there were 19,118 properties for sale in the GTA. Granted, that is 8.4% fewer than the 20,886 on the market a year ago. But this is not the real story, because listings have just exploded higher.

In January buyers had a choice of 14,231 houses. In February, just 14,019. In March that popped to 16,543, and last month it bloated by 15.6% to the current count of more than nineteen thousand. Obviously a jump of fifteen per cent in 30 days is more than significant, and entirely consistent with what is happening in other markets across the country.

The average price in Toronto, “close to $1 million”? Yup, the realtors say the average SFH in 416 was trading hands in April for $965,670, which is 13% more than twelve months earlier. But it’s also down from the $1,012,172 average price for the same house in the first two weeks of the month. So, was that an aberration in the numbers, or more creative reporting since the minions in Ottawa started freaking when two Canadian markets passed the million mark?

That prices have shot higher in Toronto and much of its dead-eyed suburban hinterland is not in question. They have. Like Vancouver, there’s no value any longer for new buyers since the cost of entry is so high and the prospect of future gains so nebulous.

Anybody contemplating a purchase who cares about risk has to look deeper than the vacuity offered by the daily media. Sales are lower than they were in years past, despite rock-bottom mortgage rates. The supply of homes just catapulted higher. And certain segments of the market (like the massive $1.5 million+ clutch of listings) are growing stone cold, and now offering deals. Besides, how can we actually trust any of these sales numbers when they are routinely, and privately, revised by the very people whose livelihood depends on more deals?

Like Pete & Joyce yesterday, if you own a SFH and have held it for years, you won the lottery. But to win, you must cash in the ticket.

If you’re Pete & Joyce’s kid, chill. It’s a trap.

214 comments ↓

#1 Matt Hughes on 05.06.14 at 5:59 pm

Welp, looks like my numbers from yesterday was lacking. According to the TREB report I am missing figures for 516 properties sold in the GTA in April with an average price of $362,000… time to find another data source!

#2 Happy Renting on 05.06.14 at 6:01 pm

I always love the exciting part that happens in movies after someone yells, “it’s a trap!” :)

#3 Bob Rice on 05.06.14 at 6:13 pm

Another huge increase in T.O. prices…. even with a 25% correction, the prices will still be unaffordable…

Avg price close to a mill

#4 Bob Rice on 05.06.14 at 6:16 pm

And Garth, even if numbers are revised and fudge… prices of homes in the GTA are bloody outrageous.. No one can dispute this!

#5 Johnny D on 05.06.14 at 6:17 pm

OECD can be added to the growing number of groups warning of real estate in Canada.

#6 calgary rip off on 05.06.14 at 6:24 pm

Garth your views are correct regarding desires rather than needs regarding housing. The sad state of humanity is that people really are animals, are not logical and real estate for many is a way to earn cash.

For some in Calgary a house may be part investment part place to live. For myself a place to live simply is a way to put money to the bank rather than a landlord because maybe someday I will be able to stop paying. With renting that will never happen, unless you move.

Here is a current listing from the Calgary Herald regarding mental status of those who have mortgages/own a place: http://www.calgaryherald.com/business/real-estate/Poll+finds+Calgary+homeowners+expect+make+money/9811482/story.html

Often many of these places have appreciated only due to market value and naturally many people living in them believe the market values. I dont. I paid $420K on a place that should be max $250k. However there isnt much I can do about the idiocy of market values. Mortgage prices are about the same as monthly rent payments and my job is a paid prison from which there is zero escape. So with that reality, and that is reality, what choice does a person have? It’s funny that many people believe that in order to make a decision a person must believe in that decision. How false that concept is. Most things I do only because I am forced. I can of course test the status quo and question it and do various experiments to test what is and is not allowable. The key is to know how to find loopholes in the structures of the corrupt powers that be.

Unfortunately with regards to housing it is a gamble in any partitioning of the variables with choices. Basically this blog could be summed up in one word with regards to living anywhere: That word is “screwed”.

The rewarding thing for some and reality for many is that many of the people that created this real estate mess will be dead and gone soon enough.

#7 Sad on 05.06.14 at 6:31 pm

So 5 years and an increase of $300k later I’m at a crossroads. Do I pay the most I’ve ever imagined to get in to the housing market, or do I let my dreams slip away forever?

#8 Andrewski on 05.06.14 at 6:38 pm

Take a drive north on Mississauga Rd. from Lakeshore to Dundas and you’ll see homes listed for millions of dollars. No way these homes will sell, even in this completely jacked up market!

#9 Son of Ponzi on 05.06.14 at 6:41 pm

#7 Sad on 05.06.14 at 6:31 pm
So 5 years and an increase of $300k later I’m at a crossroads. Do I pay the most I’ve ever imagined to get in to the housing market, or do I let my dreams slip away forever?
———————
Shelter is just a basic human need.
Like a piece of bread.
Hardly the stuff to dream of.

#10 Unknown Marketer on 05.06.14 at 6:42 pm

You have to think by now people hear and see what they want especially when it comes to Real Estate…I bailed in Vancouver last year and glad I did…not freaked out about renting. Just saw this on Bloomberg and would love to see the Canadian situation… it was titled

“Early Tap of 401(k) Replaces Homes as American Piggy Bank” http://rpdne.ws/1fRz8gV Eventually the Piggy Banks run out… interesting to watch this all unfold.

#11 Londoner on 05.06.14 at 6:48 pm

Here’s something to consider… go to http://www.rightmove.co.uk and see at what you can get between £600k and £800k (approx $1-$1.4 million CAD) in locations like Richmond, Clapham and Putney. These are desirable neighbourhoods in greater London but nothing like Knightsbridge, Chelsea, Kensington, etc. Now look at what you can get for equivalent prices in Lawrence Park, Willowdale and Bloor West Village. SFHs in Toronto remain an attractive purchase. They will not be affordable for average families with average incomes. Places like Milton and Brampton are another story however.

#12 sheane wallace on 05.06.14 at 6:54 pm

http://www.bloomberg.com/video/embed/wby1QOW4RZWXEHAUuY8yEg

Bernanke said said the reason is if you raise interest rates for savers, somebody has to pay that interest. So you don’t create any value in the economy…
********
Worked hard all your life? Played by the rules? Saved for your retirement, for a rainy day, for your kids, for your legacy?

AHAHAHAHAAHAHAHAHAAHAHAHAH YOU SUCKER, YOU! .gov says SOMEONE needs a good solid fu..ing to keep the Ponzi going, and hey, turns out it’s you!

Einhorn pushed back and said that if we raise rates then government has to pay more money to savers, creating bigger deficits, creating the fiscal stimulus that congress won’t approve, and we would get a flow through into the economy.

I think that statement deserves it’s own thread.

…………………………………………………..

#13 sheane wallace on 05.06.14 at 6:55 pm

#11 Londoner
……………………
comparing Toronto to London? You serious?

#14 The Cat on 05.06.14 at 6:57 pm

A little past IT reminiscing…

I made more an hour in 1998 that I do now in 2014

#15 Mark on 05.06.14 at 6:57 pm

The sales mix is vitally important in terms of looking at whether prices on an identical set of properties are rising or falling. Evidence is significant that the sales mix has changed dramatically towards the higher-end of the market over the past year. This is why most GTA people (not associated with the sell-side) acknowledge that prices have been dropping. This is why most have cut back their spending, the wealth effect in reverse. Only the TREB and their delusional lackies continue to push this “prices are going up” nonsense.

#16 OttawaMike on 05.06.14 at 7:01 pm

Me confused by you again Turner.

On one hand you advise never purchasing real estate FSBO without the guidance of a realtor throughout the entire process.

Then for another post you write about how the cartel is manipulative and non transparent, misrepresenting the condition of properties and other nefarious activities.

How does one reconcile these two alter ego view points?

Why should any consumer ever trust anybody in the entire industry?

With used car salesman, it is perfectly acceptable to work around them through private sales so why is it any different with RE? Doesn’t a good lawyer assist in protecting your interests?

#17 devore on 05.06.14 at 7:04 pm

#192 TheCatFoodLady

What I’m looking for is a rationale for becoming a landlord – not for me but in general. Because if more of us should rent to free up assets, somebody has to do the renting & no one is going to get into that unless it’s got a good chance of offering a decent return… or they shouldn’t be. Lord knows we’ve all seen otherwise.

This is the unfortunate problem of real estate bubbles no one talks about. The deterioration of rental stock. Decreased yields, even going into the negative, drive away serious income/cash flow investors to other opportunities. This reduces available inventory, and leaves behind either amateur investors (who can’t do basic math), speculators/flippers (who don’t care about the long term well being of their rental business), and accidental landlords (who desperately rent out part of their space to make ends meet).

Clearly, this is not a good situation. Particularly with the speculators, they may not even receive enough cash flow to cover expenses for the property, property which is depreciating and requires maintenance. Where is the money for this going to come from?

This is why you must be careful and do your due diligence when looking for a rental. Stick to reputable management companies, and away from amateurs who may save you some money, but might hit you with a ton of problems down the road.

#18 Maxamillion on 05.06.14 at 7:13 pm

“Women’s clothing retailer Jacob Inc. has filed for bankruptcy and will be liquidating inventory at all 92 of its stores across Canada in the coming weeks.” G&M

Who will buy your house when jobs keep disappearing. If you visit Canada Job Bank site they have begun listing jobs from Monster and Workopolis so it doesn’t look so sad.

#19 Ray Skunk on 05.06.14 at 7:23 pm

#13

#11 Londoner
……………………
comparing Toronto to London? You serious?
——————————————–

Yep, once again the pumpers love to think Toronto is a world city on par with London, Paris, NYC, Tokyo. Well – it ain’t.

An anecdote. I had reason to need to be at Union Station on Sunday afternoon to catch a train out of the city. Leaving from Islington, I caught the subway on the only east-west rapid transit route available in this apparently-comparable-to-London city. The subway, apparently knowing I have somewhere to be, grinds to a halt due to a problem, kicking me out at Keele.

Quickly I weighed up my options… nip up to Dundas West and take the 504? Nah, streetcars are not for those with a schedule to keep… even more so now that the restricted, crumbling Gardiner (the only highway route downtown in this “world class” city) is forcing drivers to seek alternatives and gridlock other routes.

Ended up taking a cab. Cab encounters traffic, of course, exacerbated by a road closure caused by a sports event/street festival/run-for-the-ride-for-the-hope-for-the-cure/full marathon/half marathon/whatever that happens every time the sun pops out for five minutes.

Despite leaving a good 1h20 to cover my journey, I get to Union late. This would be the Union that is the ONLY rail terminus for Toronto. London has how many?

It wasn’t even snowing or below freezing, like it is for 1/3 of the year.

There are dozens upon dozens of socioeconomic reasons why Toronto doesn’t begin to deserve price comparisons to London – just thought I’d give my recent 2c worth.

#20 Dean Mason on 05.06.14 at 7:25 pm

Beranke, Yellen, Greenspan and their central banks are all replaceable by a computer.

I heard this comment many years back so they don’t create value. Actually, they devalue everybody’s money.

What do you expect when they get 6.00% annual dividends guaranteed from the their Federal Reserve member banks in the U.S.

#21 Lurcher on 05.06.14 at 7:26 pm

The R/E boards must have the real numbers somewhere. They’d have to base the phony stats on something. They likely keep two sets of “books”.

#22 Vangrrl on 05.06.14 at 7:30 pm

#6 Calgary Rip Off:
You never stop paying for shelter, even when your house is ‘paid off’. My parents are mortgage free and yet still pay about $700/mth in condo fees and taxes for their modest townhome. They are in their 70s so on a fixed income. If it was a free standing house they’d still have taxes, upkeep, yard maintenance, etc. Renters never have that expense.

#23 SilverMeridian on 05.06.14 at 7:31 pm

SilverMeridian Greater Ottawa surReal Estate Update

http://www2.ottawarealestate.org/home/NewsInformation/LatestNewsRelease.aspx

“The April resale market slow to bloom

Ottawa, May 5, 2014 – Members of the Ottawa Real Estate Board sold 1,420 residential properties in April through the Board’s Multiple Listing Service® system, compared with 1,569 in April 2013, a decrease of 9.5 per cent.”

For the record, in April 2013 OREB claimed that 1,573 properties have been sold, which brings the decrease very close to full 10 per cent.

It sounds like OREB cannot hide it anymore – Ottawa’s RE market is running out of juice. Realtors had expected the market was going to rebound after slow start earlier this year, apparently the weather was to blame for that. It never picked up though, instead Active Inventory and Months of Inventory are both up and not by a small margin. Active inventory has reached 8000 properties already, up from 4500 in 2010.

http://creastats.crea.ca/otta/images/otta_chart03_lo-res.png

Months of Inventory is up by entire month in comparison with 2013

http://creastats.crea.ca/otta/images/otta_chart04_lo-res.png

Five and a half months of Inventory is particularly worrisome, since it is more then doubled in comparison with 2010. If anybody is thinking of slapping 2011-2012 prices on their listings is just kidding themselves – in this kind of market there is not going to be any appetite for overpriced RE.

#24 Vangrrl on 05.06.14 at 7:32 pm

#7:
Get a new (better) dream!

#25 AndrewAB on 05.06.14 at 7:32 pm

FirstPlace Skier Bob in Calgary is back and following Garth’s Realtor’s Marketing process to a tee:

“Obfuscate. Mislead. Manipulate…Marketing Real Estate based on the false premise housing is going straight to the heavens.”

Welcome back Bob and remember with yesterday’s blog post you poked the bear.

#26 Smudgekin on 05.06.14 at 7:43 pm

Monied with no imagination.

Who wants to live in Toronto if you’ve a mil or two Pete & Joyce hint, hint? I’d friggin scatter to Cali or Florida. Jees I’d consider the south of France or Oz & NZ. Who wants to go thru a Canadian winter wrapped in dismal concrete with the friggin Toronto traffic?

#27 Boat on 05.06.14 at 7:48 pm

Well, that’s it for me. Totally missed the real estate boat. It’s done. At least I get to read this blog every night… Should have listened to Brad Lamb; he’s a dork, but he’s got game. I’ve got some hard earned and invested money, but nothing compared to friends who signed for bloated mortgages and hit the money train doing nothing but sitting, watching and gloating, while spending their cash freely enjoying life instead of saving and sacrificing as I did. Probably better if I go and shoot myself now, or else I have to face real estate enthused ‘told ya so’ grins all around at work.

#28 Dual Citizen In Canada on 05.06.14 at 7:52 pm

My landlord just gave me notice that he wants to sell so I have 60 days to leave. He wants to know if I want to buy the place. hahaha, Am I going to be the greater fool? Hell No! This is going to be the spring, summer, fall of home prices. I will move to the next rental property and keep counting my investment returns. Thanks for everything, Garth!

#29 Saskatoon-Living on 05.06.14 at 7:53 pm

Saskatoon listings are 22% higher than last year and are at their highest in the past 5 years. It’s probably just due to the weather as it never snows here; just like how it was weather that caused Corelogic HPI to look that terrible for April.

#30 UTSBLUE on 05.06.14 at 7:55 pm

Wait till the China bomb goes off…

#31 Nemesis on 05.06.14 at 7:57 pm

#”It’s a trap!” #InvasionHogTown[1985]

…Patently upset with the disappointing quality of the finishes in his recently purchased HogTownCondo and still smarting from Barrett-Jackson’s failure to achieve reserve on his perpetually troublesome Lotus Exige, Mikhail Rostov was in no mood to compromise when he paid an unexpected visit to the developer’s presentation centre…

http://youtu.be/E5zvQmTrzVU

#32 UTSBLUE on 05.06.14 at 7:58 pm

http://www.fool.com/investing/general/2014/05/02/the-uncomfortable-reason-your-home-is-not-a-great.aspx

#33 WhiteKat on 05.06.14 at 7:59 pm

I just emailed this to our Finance Minister, and copied in my MP and Harper. What do you all think? Do I sound like a whiner?

Dear Finance Minister Joe Oliver:

I have been Canadian since the day I was born and have lived in Canada for 51 of my 52 years. My parents are Canadian born. My grandparents are Canadian born. My only connection to the USA is that I was born on US soil and spent the first year of my life there.

It has been very upset listening to you, and others, continue to refer to people like me as ‘American citizens’ or ‘duals’. It is as though US birthplace trumps Canadian citizenship despite having no economic, residence, or social ties to the USA!

Have you any idea how insulting it is for someone who has lived an entire life as a Canadian citizen in Canada, and who regards her connection to US as nothing more than a novelty of birth, to be treated as a second class citizen whose private financial information will soon be shared with the IRS?

Do you realize that there are 100’s of thousands of hopping mad CANADIANS who WILL NOT ACCEPT THIS SECOND CLASS TREATMENT by the current government?

Time is running out for the Conservatives. I suggest you back peddle soon, and start treating Canadians living in Canada as the Canadians that they are. Please refer to us as Canadians when you talk about us. Please take the FATCA IGA legislation out of Bill C 31 so the implications to Canadians, and alternative ways of dealing with this US threat can be thoroughly analyzed and considered.

Do you refer to Canadians born on China as Chinese living in Canada?
Do you refer to Canadians born in India as Indians living in Canada?
Do you refer to Canadians born in Iran as Iranians living in Canada?

Are you aware of Article 15 of the Canadian Charter of Rights and Freedoms that prohibits discrimination based on national origin?

We have programs in our schools to teach our children that bullying is wrong, and how to deal with bullies. We do not teach them that the best way to handle a bully is to appease him. We know this doesn’t work because it only emboldens the bully when we acquiesce to his demands. Why does the Conservative government not understand that this same principle applies when dealing with a foreign country which is acting like a bully?

There are many ways to react to this US threat other than to sacrifice 1 million Canadians and their families to the IRS. Here are ten possibilities:

1. Show some Canadian Pride and fortitude publicly! At least make a public statement of condemnation of U.S. negotiating practices and send it to the President along with a shredded copy of the IGA. Tell him CANADA is NOT a Tax Haven like America IS, and to stop the hypocrisy. Demand that Obama clean up his own back yard before coming North of the Border to extort his will.

2. You could form a coalition with the TPP partners and tell America to back off the extortion threats or all negotiations stop right now! That frankly will win you allies in the Democrat party that are needed to Repeal FATCA. Use that negotiation lever!

3. You could threaten America with taking it to the WTO for restraint of Trade for using Sanctions against Canada, a country whose FFIs have engaged in NO evasion or illegal Activity. How can you accept sanctions when you have done NOTHING to justify them? You are NOT Iran for god’s sake!

4. You could instruct Canadian financial institutions to retaliate and withhold 30% of any Canadian revenue that any US financial Institution holds in Canada. A tit for tat. You can extort TOO! That is the American ‘norm’ that they exporting for you to copy!

5. You could engage a U.S. Lobbying firm to team with with the Republicans (the Conservatives natural allies) to support their recent Repeal FATCA resolution. Americans know even less about how bad FATCA is than Canadians. If you can spend millions on an Keystone Pipeline advertising how about spending X millions to Stop FATCA with a media educational lobbying effort for ignorant Americans.

Why give in so easily to the Democrat Congressional FATCAnatics that created this Monster? You are philosophically opposed to them. Spend some money helping Americans defeat those in Congress that are most responsible for these extra territorial actions.

6. You could command your Ambassador in District of Criminals to call John Kerry and tell him if the FATCA extortion doesn’t immediately stop and the threat removed, you are pulling all troops and support for any U.S. Military mission.

7. You could have you UN ambassador bring up a resolution to the Security Council to condemn America’s practice of Citizenship Taxation in exactly the same manner as the one America signed in the resolution against Eritrea taxing its citizens living abroad. Come to think of it, you could treat America the same way you treat Eritrea. DIRECTLY CONDEMN their Citizenship based taxation.

8. You could command your Financial Institutions to begin their divestiture from U.S. assets and look elsewhere to place their money. You could set an example yourself with a public declaration that you will no longer own any U.S. assets.

9. You could threaten to stop your cooperation with the NSA spying apparatus in Canada and end your membership in the NSA 5 eyes of Spying. FATCA is just U.S spying now on Financial data, so end cooperation with the U.S. surveillance State.

10. You could call the U.S, Ambassador to Canada on the carpet and tell him his extortion method of conducting international affairs is unacceptable, It is NOT an “international norm”! If they don’t stop such abhorrent behavior and engage in multi-lateral mechanisms he can pack his bags and go home like you did with the Eritrean Ambassador

So there are 10 Options as a starter, and there are many others I am sure. Don’t give us this spin that you have ‘No choice’. There are plenty of choices for Ottawa, but they are JUST TOO TIMID and TOO AFRAID TO TAKE THEM.

Sincerely,

KXXXXXXX PXXXX (name not withheld in email)

#34 recharts on 05.06.14 at 8:03 pm

I tweeted this chart long before TREB posted their data
http://i.imgur.com/jqjNLb9.png

Arrond April 15 I also indicated that the Avg went above $1mil for SFH in TO

If you look at my chart posted above you will see that there is no more $1M spike in MidApril. That is because both, my avg and TREBs avg are rolling 30D averages.

However the values are very high and this describes the best the situation

http://www.fascinatingpics.com/7-interactive-3d-pieces-of-art-in-an-exhibition-in-china/

#35 recharts on 05.06.14 at 8:07 pm

#11 Londoner on 05.06.14 at 6:48 pm
Here’s something to consider… go to http://www.rightmove.co.uk and see at what you can get between £600k and £800k (approx $1-$1.4 million CAD) in locations like Richmond, Clapham and Putney. These are desirable neighbourhoods in greater London but nothing like Knightsbridge, Chelsea, Kensington, etc. Now look at what you can get for equivalent prices in Lawrence Park, Willowdale and Bloor West Village. SFHs in Toronto remain an attractive purchase. They will not be affordable for average families with average incomes. Places like Milton and Brampton are another story however.

So the bottom like for you is the brick and the mortar. There is no prime for the cultural value that Londos UK offers. Primitive thinking like above can only lead to what we are seeing in Toronto these days. Makes me puke!

#36 Tom Jones it's not unusual on 05.06.14 at 8:10 pm

On a different note, does anyone know if it’s true that a Survivor’s CPP benefits are at risk of downgrade if both partners had been receiving max CPP benefits? Someone posted to that effect about a week ago, that the Survivor in that situation would suffer greatly reduced benefits. If true, are there mitigating strategies such as taking early benefits in order to avoid this situation?

#37 Why on 05.06.14 at 8:12 pm

#24

Why should I get a new dream. This is what I was taught. Work hard study hard, and you’ll be able to start a family and buy a house. Where’s my house.

#38 I'm stupid on 05.06.14 at 8:13 pm

What a double edge sword the cartel has to juggle now. One one end higher prices will make virgins want houses more. On the other end higher reported prices will make Ottawa clamp down on mortgages. Talk about risk.

#39 takla on 05.06.14 at 8:24 pm

Opened up the Fraservalley realestate weekly on Saturday and was amused to see one page of listings by a well known realtor with at least every second listing with SOLD in bold across it.
Competitors Listing groups had the odd sold here and there,many with Nothing sold and many with “reduced’ affixed.
More dishonest selling tactics ?,just why is this sales industry frought with dishonesty beyond the obvious reasons??
Id hate to have to go to work daily knowing my success in part depended on my ability to lie!!

#40 Freedom First on 05.06.14 at 8:30 pm

It is a trap. Well said Garth.

Reminded me when I was on a winter holiday in the Caribbean with a girlfriend and another couple. Early in the trip we were on the beach basking in the sunshine really enjoying ourselves. I had been going from the sunshine to the shade regularly dragging my girlfriend with me as she wanted to stay in the sun. Well, I noticed the other couple was getting reddish and I said it is time to come out of the sun. They told me they were world travelers and didn’t need my help. Needless to say, when we met them for dinner that evening, they were lobsters. Had to get medical help, and be covered in zinc for 2 days and stay out of the sun totally for 3. They very humbly said to me : “and you warned us”, which I really tried hard to do, because I cared.

For the Canadian RE market……time to get out of the sun…..or it will burn you.

#41 OttawaMike on 05.06.14 at 8:32 pm

#23 SilverMeridian on 05.06.14 at 7:31 pm

Am I correct to estimate the Ottawa inventory is approaching the 10,000 unit mark if we were to count the builder’s inventory and FSBO’s along with that OREB inventory number?

#42 Bob Rice on 05.06.14 at 8:34 pm

comparing Toronto to London? You serious?

London Ontario!?!?!?

#43 Smoking Man on 05.06.14 at 8:37 pm

So I leave the tax farm early, Appointment with Doctor acupuncture. Seems my bacon and eggs, and two coffees a month ago when I should have been fasting showed up on the ultra sound or x-ray…

While he’s trying to figure out what kind of Cancer I got my host at Seneca sends me a text. I got the penthouse available tonight, and remember it’s Tuesday crab night.

I’ve taken about 75gs of these blood sucking pricks since January, obviously they want it back. Last year when I gave em 75k I couldn’t even get a center suite, corner only.

So I text the wife, she nearly pee’s her nickers….

We get here and I meet my buddy eddy. AWOL for about a year, last time we hooked up, in the morning I had multiple carpet burns on my head, hole in my hand and a lose tooth.

He’s says Mary Jane is in the parking loot lets go say High….

Got moody blues on the buds and I’m thinking Tuesday………. Afternoon…………

Nothing kicked in yet.

I need a shower so I get in the elevator, like a gun slinger, I slowly pull out my key, insert it into the slot and arrogantly click the Penthouse button.

Two chic’s and a short bald guy on my elevator take notice.

They got convention badges on, they’re cops…Getting trained in sexual abuse…

The ladies are giggling, the sent of Mary….

The sex word on the badge of the short brunet stuck out, O and did they stick out… I was in a trance staring at her chest, but for some reason I was thinking fishing sun fish. She and the blond get off on floor 7.

Just me and the short bald cop, he’s on 26 one floor before me…..

He’s staring me down, so I try and break the ice by crossing my eye’s. The bastard doesn’t flinch.

I light up a smoke, and he demands I put it out.

I look up to god and start blowing smoke rings….

As he gets off, he says, you best not come to Oklahoma.

I said where the F is that.

Going back down………Mississippi stud here…

#44 DM in C on 05.06.14 at 8:39 pm

#34 WhiteKat

Yes, you sound like a whiner, mainly because this is a real estate blog, not a taxation blog. Take it to the media — if it’s sensational and a story, they’ll run with it. You’re beating a dead horse in this comment section, with multiple diatribes just in the last two weeks alone.

Tedious. And frankly, I don’t care. Go tell someone who does.

#45 omg on 05.06.14 at 8:42 pm

#11 Londoner #13 sheane wallace, #19 Ray Skunk

Ha – Toronto as compared to London. Londoner, you slay me.

Your handle aside, have you ever been to London?

I’ll maybe give you TO and Chicago, but that’s still a stretch for Toronto.

Victoria RE pumpers used to compare Victoria to San Diego. Funny, that comparison stopped being used about 7 years ago.

#46 takla on 05.06.14 at 8:43 pm

RE# 20…the stawk market has become so detached from what traditionally drove it with HFT that its little more than a rigged game for the wealthy and connected to fleece the small investor.Why is it that so many are pulling their investment funds.More losers than winners on the dow and s&p just about daily but here we are again at all time highs..
I agree with what # 20 had to say concerning letting computers control those positions……but just who would write the programing….

#47 Aggregator on 05.06.14 at 8:47 pm

TREB's active listings are what they are, and from a historical standpoint, at record lows. However, nobody is really asking why there are no listings, and the main reason is because developers are not completing units at the rate they once were.

This is a chart of units in stock, and this is a chart of completions as a percentage of under construction. See the problem? Developers' monthly turnover is less then 4% of units under construction. Part of this decline might be due to taller high rise projects taking longer to complete, however, RealNet stated last year that developers were running 50% behind schedule and the trend is expected to continue.

In short, developers are creating a shortage. This is not a good thing, fundamentally, as it distorts prices even more just speeds up the crash as more speculators get trapped with units they can't sell. Oh ya, and today Deutsche Bank and the OECD said Canada now has the most rooms per person compared to other developed countries. Chart

Next…  Downtown developers will blame delays on Subway and Gardiner Expressway construction, a very favorable situation that allows them to argue a little clause hidden in the purchaser's presale contract that states the developer will not be liable for any losses relating to weather or unexpected events caused by a third party.

#48 drydock on 05.06.14 at 8:49 pm

Smoking man gets under the skin of more than a few people here,(you know who you are.)
So, i have provided a link to a video that you must watch to the end and you will experience an epiphany.You shall be forever changed your consciousness enhanced.
Your welcome.

https://www.youtube.com/watch?v=wZZ7oFKsKzY

#49 Ottawaaaah on 05.06.14 at 8:55 pm

I’m pushing 40 – does anyone think the bubble will burst before I die?

#50 sheane wallace on 05.06.14 at 8:56 pm

#3 Bob Rice
………………………………….
forget about market crashes. whatever you do, just stay away from any f….ng currency that has ‘dollah’ in it. and from bonds denominated in such currency.

And you would be safe.,

#51 Nemesis on 05.06.14 at 8:57 pm

@WhiteKat/#34

Talk about TourDeForce… That was a marvelous polemic.

I have remained silent on your CauseCélèbre up to this point for no better reason than that ‘UncleSam’ has been rather good to me in the past… and that I am preoccupied attempting to rectify some of his more egregious policy ‘errors’. I am broadly sympathetic to your plight.

So much to do. So little time.

PS – I particularly enjoyed your prior reference to, “opaque”. For FortuneTellers, that is an extravagant compliment. Thank you.

#52 omg on 05.06.14 at 8:57 pm

#16 OttawaMike

He Who Turns Over the Most Rocks Wins

Hey Mike – I have bought and sold FSBO several times without problem. But you must become an expert in RE for the areas you are looking in. Its not hard to become more “expert” than any real estate agent on prices for specific areas.

Get a good lawyer – they can write an offer just as well or better than any RE agent.

Talk to a mortgage broker beforehand and line up a home inspector.

And yes – most FSBO are out-to-lunch and overpriced. But not all and only a handful of the people are looking at them.

#53 Sebee on 05.06.14 at 8:59 pm

Haven’t I read all this elsewhere? It is so familiar sounding…

http://www.telegraph.co.uk/finance/newsbysector/constructionandproperty/10812282/Bank-must-burst-housing-bubble.html

#54 TheCatFoodLady on 05.06.14 at 9:06 pm

#7 & #36 – dreams have to be taught to be valid? Hint – they don’t & it’s a lesson I wish I’d learned much younger. What do YOU value? If your dream genuinely revolves around a house, what is it about the house that matters? If it’s really important deep down, for you to own your own home, fair enough; just make sure that’s what you truly want & know the reasons why.

And if it’s a heartfelt, long held dream – don’t be so quick to wave the white flag. Things change & markets are cyclical – there will come a time when you can buy; just perhaps later than you’d hoped for.

#55 Nemesis on 05.06.14 at 9:06 pm

#BetterDreams. #Joni. #TheCircleGame

@Vangrrl#24

http://youtu.be/pTVjCWekS1Q

#56 Tom from Mississauga on 05.06.14 at 9:15 pm

Lower actual sales numbers and fictitious average prices might explain the Ontario government’s HST collection off budget by $1.5B. Are they using bogus real estate board numbers to forecast their budget plan? There is a ton of HST on a home sale.

#57 Piccaso on 05.06.14 at 9:22 pm

Watching that Canadian finance show on TV yesterday.

They were interviewing a fund manager who said they’re not in real estate ETF’s but in rent management ETF’s that hold companies like Boardwalk, etc.

Reason being in his words … ” Canadian real estate is in the late innings”

#58 Dean Mason on 05.06.14 at 9:23 pm

Now they are talking about not just the BRICS but the MINT’s which are these countries, Mexico, Indonesia, Nigeria, Turkey.

Their country bonds are much higher yielding rates than U.S., Canada, provincial bonds.

Mexico 10 year 6.09%, 18 year 6.64%, 20 year 6.97%, 30 year 7.18%

Indonesia 5 year 7.637%, 10 year 7.96%, 15 year 8.45%, 20 year 8.55%, 25 year 8.72%

Nigeria 10 year 13.03%

Turkey 5 year 9.05%, 10 year 8.93%

The average yield is about 9.20% to 9.40% depending on the maturities used.

#59 Frank Blood on 05.06.14 at 9:26 pm

RE: #19 “… a road closure caused by a sports event/street festival/run-for-the-ride-for-the-hope-for-the-cure/full marathon/half marathon/whatever that happens every time the sun pops out for five minutes.

HA HA HA HA HA HA HA.

#60 Condo Minion on 05.06.14 at 9:28 pm

#28 Dual Citizen in Canada

Do you live in Ontario?

If you do, just a heads up: the landlord cannot give you 60 days eviction notice until he has a written agreement of purchase and sale. He can’t just say he wants to sell your place. It has to be a done deal and only then does the clock start ticking.

If he doesn’t, you can ask the landlord and tenant board to stay the eviction if you need more time. Or maybe sue him there or in small claims later if he carries through with it.

Other provinces have similar legislation.

Good luck with your move!

#61 sheane wallace on 05.06.14 at 9:36 pm

Us in 2006, we are there now.

http://www.youtube.com/watch?v=sgRGBNekFIw

#62 joblo on 05.06.14 at 9:36 pm

So think about all the property tax on these inflated house assessments.
Manna… Smoking Man for Mayor!

#63 Renting and Loving it on 05.06.14 at 9:36 pm

#28

If you are in Ontario and have a lease, NO ONE can force you to leave if the house is being sold. You go with the house. The new owner has to honor your lease. Of course, if the Landlord wants to pay you to leave so he can sell it free and clear – thats great!

I’d be calling the Landlord Tenant Board and asking them what your rights are. I’ve found them to be very friendly, informative and who better to ask than the people that administer the Act?

If you’re not in Ontario, I’m sure other provinces have similar Agencies you could contact.

#64 TurnerNation on 05.06.14 at 9:37 pm

Local Kando krew claiming shortages. How about that weather eh.

http://www.remaxcondosplus.com/blog/aprilmay-market-report/

“March sales on the Toronto Real Estate Board were up 7% over March of 2013. But the interesting point was that at mid-month, sales in 2014 were just even to last year. But over the last two weeks of the month, sales were 13% ahead of the same period last year. Weather certainly played a role. At the same time, a lack of active listings, 10% lower than last year, has also slowed the market. A survey of our own agents showed that for every listing taken, they had four times as many buyers.

Similarly, condo sales were 6% higher this March over March of last year. The downtown condo market underperformed the overall market as sales were 5% lower than in March of 2013. However over the first three months, year-to-date condo sales downtown were still 6% ahead of last year. While there is some concern about an oversupply of active listings, they are up only 5% versus last year. And new listings coming on the market are up just 1% from a year ago. The Etobicoke Waterfront is improving. Sales are up by 20% and active listings are down by 19%. We appear to be hitting a balance in this market which has been weaker than most.”

#65 april on 05.06.14 at 9:42 pm

#53 TheCatFoodLady – The only reason I’d like to own a house is not to have to share my walls with my neighbors.I could rent one but much too expensive …. lowermainland bc.

#66 Butch on 05.06.14 at 9:49 pm

Average price another 13% higher?

That 10% correction we’ve been waiting for is going to do wonders for affordability.

#67 HogtownIndebted on 05.06.14 at 9:49 pm

I caught a radio program I’d never heard before tonight in Toronto, on CHIN 91.9

Chinese guests were speaking in English about the RE meltdown in China, major cities and especially second tier ones.

The host talked about listings being down 79%, and how property trusts had fallen by about 50% in value, with a number of defaults. The guests spoke of how condo developers were giving away cars and iPads and free money, but people were just sitting on the sidelines and waiting for further drops. (I had to listen carefully just to be sure they were not talking about Vancouver or Toronto!)

Given Canada’s linkage to China for exports, you have to wonder what will happen, esp. in the west, if China really slows down as this all suggests.

Here’s a link to a similar type of story, a few weeks old now.

http://globaleconomicanalysis.blogspot.ca/2014/04/top-tier-chinese-cities-discounting.html

#68 Spock on 05.06.14 at 9:53 pm

>>> does anyone know if it’s true that a Survivor’s CPP benefits are at risk of downgrade if both partners had been receiving max CPP benefits? <<<

The maximum received for CPP by an individual (self and survivor benefits) cannot be more than the max CPP benefit available for one person.

So if both people were getting max benefits and one person passes away – the spouse does not get a penny more (since spouse is already maxed out).

#69 Vangrrl on 05.06.14 at 9:54 pm

#53 Cat Food Lady: I think #36 was being sarcastic :).
#54 Nemesis: Nice! Thanks for the link.

#70 Godth on 05.06.14 at 9:56 pm

IMF Executive Board Approves 2-Year US$17.01 Billion Stand-By Arrangement for Ukraine, US$3.19 Billion for immediate Disbursement
http://www.imf.org/external/np/sec/pr/2014/pr14189.htm

The approval of the SBA enables the immediate disbursement of SDR 2.058 billion (about US$3.19 billion), with SDR 1.29 billion (about US$2 billion) being allocated to budget support. The second and third disbursements will be based on bi-monthly reviews and performance criteria, and the remainder of the program period will be subject to standard quarterly reviews and performance criteria.

Interesting…bring on the SDR.

#71 randman on 05.06.14 at 10:05 pm

Whitecat

Good for you to stand up to the scumbag,marxist/fascist
police state that is bent on new wars and destruction and wishes to drag Canada along with it…..

Wake up everyone ..even though Garth says don’t bet against the USSR …..do you want to enable the warmongers….don’t believe everything you read by the USSR presstitudes

Soon …real estate prices will be the least of your worries

#72 Nemesis on 05.06.14 at 10:10 pm

#JustForSmokingMan. #SomethingNaughty. #Rumble. #LinkWray.

http://youtu.be/dXLo1YAUQBE

#73 Killaboy on 05.06.14 at 10:12 pm

#34 WhiteKat:

Why are you insulted to be referred to as a dual citizen or a US citizen when both are factually true? I truly don’t get it. Anyway, why don’t you just renounce your US citizenship? I don’t think it’s all that difficult, as long as you’ve filed all your US tax returns. You have done that, right?

#74 Flawed on 05.06.14 at 10:18 pm

Seems there are many many people and their respective govt’s that want out of the banking system Shawn praises so much to pay dividends that will never fail and are too big to jail. BTW 6 banks control 85% of banking in the US. 6 banks controlled most of the banking in the panic of 1907. 6 banks controlled most of the banking in 1929. Now the world is 600 trillion in the hole to banks who now “create money” digitally out of nothing. Yikes !!

http://goldenageofgaia.com/2014/05/06/132-nations-want-out-of-the-cabal-banking-system/

#75 Rob Ford in Rehab on 05.06.14 at 10:22 pm

Hey Everybuddy!

I know, I know, big deal today with the maggot media about where I am, not in Chicago, all that bs. It’s just lies after lies after lies with those pathological liars.

Where am I? Here, on Garth’s blog, where I’ll be hanging out while in the program.

And yes, I am in a program. Several, in fact, probably more than any of you downtown elites are. The same way I’m in Air Miles, Shoppers Optimum and my favourite, Esso Extra. Esso is great cause I can always get some extra business done there while I am waiting to pay for gas and munchies.

I’m gonna try to stay away from the crack, 100% guaranteed. I’ve had another come to Jesus moment, just half an hour ago, in fact.

But this blog, well it’s hard to stay away. Some of these anti-Garth realtors posting, man that’s as close to a crack pipe experience as I’m gonna get, I can almost smell it through my monitor. Can’t stay away!!

Carry on realtor dudes, I don’t throw my friends under the bus!

RF

#76 Butterstitch on 05.06.14 at 10:36 pm

You could buy a crumbling Leaside home with osteoporotic bones, or you could buy a French castle:

http://www.ivillage.ca/living/home/reality-check-house-toronto-now-affordable-french-castle

Seriously. People are cray cray.

#77 Dual Citizen In Canada on 05.06.14 at 10:37 pm

#59 Condo Minion on 05.06.14 at 9:28 pm
My lease is up, July 14th. I have asked him for 60 days written notice if he will not renew the lease. If he doesn’t give me 60 days notice, I guess I can stay on, month to month, until he does. No worries, lots of places to rent as landlords under water will look to sell or rent, to keep the cash flowing.

#78 Aggregator on 05.06.14 at 10:39 pm

#65 Butch

That 10% correction we’ve been waiting for is going to do wonders for affordability.

There's another way home prices could decline by 20-40% without anybody really noticing too quickly, and that is by devaluing the Canadian dollar. I've put this in a high probable scenario now that housing is too large relative to GDP.

It's very difficult for Canadians to justify rising home prices and who's buying at these prices, when it really implies the value of the Canadian dollar is going down.

Think of this scenario: Home prices in Mexico have been steadily rising, but that's in peso terms, and to you, a Canadian who earns money in Canadian dollars, that villa is another price at the exchange rate, but to a Mexican, prices are steadily rising. Charts

By eye balling it, that home price index increased from 85 to 112, about 31.7%, and the peso declined 26% against the Canadian dollar, meaning, a Canadian who purchased a villa in Mexico returned 5.8% over five years in Canadian dollar terms, while the Mexican, in peso terms, seen a 31.7% appreciation and rising prices for everything else he or she buys.

The same thing is happening here, only China is looking at Canadian home prices getting cheaper as the yuan appreciates against the Canadian dollar (the new peso?). Chart

How do you know this is really happening? By seeing headlines like this: Bacon prices rise, package shrinks

Value, value, value… not prices.

#79 TO Renter on 05.06.14 at 10:45 pm

Love the sideshow biting or witty repartee between regulars in the comments section (you know who you are, and who is the important yin to your yang).

I learn and smirk, and laugh and cringe, as I scroll. Thank you all. Variety is the spice of life, and there is always value (non-monetary) in being thoroughly entertained at the bottom of every informative post.

Part of what keeps me coming back for more, to see what the characters and personalities are up to.

All this to say your efforts are appreciated and I hope you are just as confident, interesting and opinionated outside social media. I used to fall asleep in macro and microeconomics, and admail real estate updates from the agents hit the recycling, and money talk would make my eyes glaze over. But now I am a fan. Because of the fun. Wining formula.

#80 Shawn on 05.06.14 at 10:49 pm

Flawed Thinking

Flawed at 72 mentioned me and then claimed:

BTW 6 banks control 85% of banking in the US.
*****************************

And I only own two of them… four more to go.

#81 Pope Chilidog Snugglebums the something or other on 05.06.14 at 10:55 pm

#42 Smoking Man on 05.06.14 at 8:37 pm — “As he gets off, he says, you best not come to Oklahoma.” Good advice — Frake my Quack BTW, ‘authorities’ now say MH370 landed.

Well, those dipshits are right to some extent (unless it has an unlimited supply of nuclear fuel). Reports also say there was a two and a half ton cargo of lithium on board, but no confirmation.

#69 Godth on 05.06.14 at 9:56 pm — “Interesting…bring on the SDR.” By all means — SDRs of all sorts.

#82 Fred on 05.06.14 at 11:01 pm

The next government needs to open up the Green Belt to allow for more build. This is one of the big issues no body touches on. The intensification of the central area without good planning is killing commute times. Peterborough is looking good.

#83 angela on 05.06.14 at 11:12 pm

QE is to wall street (stock markets incase the dumb azzes dont understand )
In baseball terms, does anyone believe Barry Bonds would possibly have hit 755 home runs without steroids?

#84 randman on 05.06.14 at 11:18 pm

DELETED

#85 GenXer on 05.06.14 at 11:18 pm

Does anyone have data on how the sales mix was impacted during the 1990’s downturn or in the US meltdown? Do lower prices on the high end mark the beginning of a retrace meant in prices overall?

It would be interesting to analyze compatibles and see if we might be staring at a high water mark right now.

#86 stillatit on 05.06.14 at 11:26 pm

Real estate is not what it seems? Wow that is such a ridiculous statement…have you tried to buy a house in Toronto? It is not an illusion its a fact. Prices are high and no potential buyer really cares if you “think” its overpriced. Demand and supply my friends! Economics 101.

#87 TheCatFoodLady on 05.06.14 at 11:29 pm

#6 – Calgary Ripoff:

Some interesting points in that article. I was taken aback at how many people expected to MAKE a chunk of change on resale. I had to wonder if they’d calculated all the costs – clearly not because the numbers given refer strictly to average house prices; not taxes or other carrying costs. Throw that in & net gains drop significantly.

The other interesting stat from that article is how long people on average, have been in their homes. People may not be in ‘forever’ homes but clearly most are not moving very often. Some may be buying & selling as they move for jobs. Others may be moving up to ‘better’ homes but it seems that’s well balanced by those staying put.

#17 – Devore: It’s becoming interesting to watch some of the local rentals. This is strictly anecdotal of course & the market is low end. Many of these rental houses are small singles or equally small homes divided into two units. I know the neighbourhood & I know the players. Too many of the tenants are ‘frequent flyers’ – jumping from place to place at ridiculous rates because everybody knows topping up your phone time is way more important than paying rent.

Don’t know how the landlords have been managing so far but the cracks are showing now. A number of these rentals are up for sale & to put it mildly, they’re not showing well. The money for routine repairs & maintenance seems to have long dried up. With many, there’s no longer any pretence about keeping up appearances. A tenant is booted or skips, the insides get shovelled out – sometimes literally, the grass is cut – sort of & it’s up for rent again & increasingly, also for sale. Fewer & fewer takers.

We rent & have been in the same building for 6 years. We’re staying as long as possible because in all the important ways, it works for us. We can see the squeeze on the REIT that owns it though. More & more, things are being cut back & it’s at the point where they’ll have to fish or cut bait – a number of aspects around the complex need serious work. Luckily, we’re not directly affected by any of them… for now.

#23 – Silver Meridian: Not sure I’m buying the weather excuse in Ottawa – it’s not their ‘first time at the snowstorm. People still plan moves around certain milestones – school years, job changes & postings & it still takes a similar amount of time to close a sale. What will be the excuses this summer – too hot, too humid, thunderstorms?

#88 Puzzled on 05.06.14 at 11:29 pm

Sold my Toronto home back in December with no regrets.

But this deluded market has surprised and even shocked me. I never thought that we would push it this far. Not in a million years.

I still strongly believe that it will collapse, but truly have no clue as to when and by how much. It’s anyone’s guess now and even those who currently own a mortgage (the banks still own your home until that last penny is paid off) have been priced out of most major markets.

What the frig are we doing???

#89 Ryan Perich on 05.06.14 at 11:31 pm

just found out from my parents that NOBODY is setting up NEW mortgages in High River until AFTER the month of June ends and into July 2014.

#90 RA in Toronto on 05.06.14 at 11:34 pm

Tom Jones

People are under false impression that the CPP survivor,s benefit will be 60% added to their own CPP.This is not the case.The maximum one can get depending on their own CPP, is only what is the maximum allowed for one person .In my casewhen my spouse passed away in 2011 my ownCPP was $631.11(taken at 60), my spouse CPP was $896.85(taken at 65) and note quite the maximum that year at $960 monthly.The monthly total I got(after explanations of calculation so difficult to understand)was $850.81, a difference of only 219.70.Consequently if I am not mistaken,if one is getting already the maximum. most likely will not get any survivor.s benefit

#91 SilverMeridian on 05.06.14 at 11:37 pm

“#40 OttawaMike on 05.06.14 at 8:32 pm
#23 SilverMeridian on 05.06.14 at 7:31 pm

Am I correct to estimate the Ottawa inventory is approaching the 10,000 unit mark if we were to count the builder’s inventory and FSBO’s along with that OREB inventory number?”

I don’t know, and I prefer not make any claims that I cannot support with numbers. Builders choose not to disclose how much inventory they have on their hands, and FSBO stats are scattered all over the place. Even if FSBO companies had provided such stats, I wouldn’t trust them too much anyways, those guys have been know to suck numbers out of finger just to convince prospective clients that they make sales.

We don’t even need to worry about builder’s inventory or FSBO, by July 2014 Ottawa is going to have 10 000 active listings on MLS along.

#92 WhiteKat on 05.06.14 at 11:39 pm

@randman, #70 I appreciate your comment.

@Nemesis, #54 glad you liked my tirade. What is “opaque?”

@Dm in C #43
Although, I have focused a lot on the human collateral damage of FATCA, specifically Canadians deemed ‘US persons’, FATCA is VERY relevant to this blog which is more than just a real estate blog. It is also an investment blog. FATCA is not really about taxes, it is about US taking control over the global financial system, and has been referred to as “the Neutron Bomb of the Global Financial System”. We all should be very worried, and supportive of those Canadians who are fighting against it. Canada is ground zero in USA’s “Foreign Attack to Control All”. If we beat it here, it will go down world-wide. I’m sorry you don’t care. If FATCA is successful, someday you will care.

#93 devore on 05.06.14 at 11:53 pm

#46 Aggregator

a very favorable situation that allows them to argue a little clause hidden in the purchaser’s presale contract that states the developer will not be liable for any losses relating to weather or unexpected events caused by a third party.

“A little hidden clause”? You mean that one that’s in EVERY contract, EVER, that stipulates no fault or penalty related to events caused by a 3rd party that’s out of control of the contract participants?

People sign these contracts willingly. Even if they were written in 50 point font in plain English it wouldn’t matter, people don’t read them.

#94 randman on 05.06.14 at 11:58 pm

huh!

really Garth …you deleted Paul Craig Roberts?

Is the NSA getting to you?

#95 devore on 05.06.14 at 11:58 pm

#59 Condo Minion

Other provinces have similar legislation.

In BC only the new owner can end tenancy, and only if he intends to live there. If the current owner wants to make his property more sellable and have it vacant, he can ask nicely, and you might agree if the terms are sweet enough and to your liking. Sale of property alone is not sufficient reason for eviction.

#96 Ayn Rand Army on 05.07.14 at 12:03 am

Well WhiteKat, those are good points that our Canadian gov. could indeed use to stand up to the USA if they wanted but i would suggest that they don’t really want to since they certainly would know how to get their way if they wanted to. Stephen Harper is an excellent strategist and from the looks of the PC governments handling of this to date they intend to throw all US persons under the bus. Likely in exchange for some other unbeknown kickbacks to nail down those bastard rogue Canucks with assets outside of Canada. The IRS and OECD have a great new information sharing scheme coming into force as we speak.

So, imo I think appealing to the Canadian mafia for protection from the American mafia may be as futile as a sheep appealing to a pack of wolves for protection from a second pack of wolves.

The only way to protect yourself is to leave Canada and start moving assets. Maybe check out China.

http://www.internationalman.com/articles/consider-an-offshore-bank-account-in-mainland-china

#97 Opinated on 05.07.14 at 12:06 am

WhiteKat
It seems very much that you are determined to piggyback on greaterfool audience to advance your fatca personal agenda. As such, I expect you wont stop it.

I could recommend you a few Facta blogs where your repetitive comments would be right at the heart of their main subject. Yet, I could guess you know these blogs better than I am.

Dont get me wrong. I am an old reader of Garth blog. I am thankful I have greatly increased my financial acumen while enjoying the diversity of sporadic off-topic comnents. Free speech is paramount.

I will nit conmenrt on the vality of your personal agenda and piggybacking strategy. I guess is working to some extent. However the increasing number and extend of your postings is becoming a real noise for those not interested. I get you will not stop hostility againts those. Be aware, it does not play well with your whining of fairness.

Please do not target me because I am not a Canadian-Amercan citizen. I am just a Canadian citizen who respect and comply with laws whether I like them or not. I am a beliver that that is how a civilized society work. I understand you chose not to comply and rather hide. Just be aware, international law as a part of ever growing globalization is here to stay. And make no mistake, USA world dominance is here to stay too. How many well-developed countries have challenge the Fatca thing successfully. My humble opinion, you may have better chances not betting againts USA.

#98 No Debt on 05.07.14 at 12:10 am

Scary News for buyers!! , or so goes the headline.

Seems all is well here in lusty Hamilton (for those REA’s able to eat) –

http://www.cbc.ca/news/canada/hamilton/news/april-real-estate-numbers-scary-news-for-buyers-1.2633912

Such bounty awaits those smart enough to sell and run away. Far, far, away.

#99 Ayn Rand Army on 05.07.14 at 12:19 am

Anyone remember Canada’s G20 police state show of force from a few years ago…. kinda resembling a mirror image of the US police state progression….

http://www.internationalman.com/articles/why-a-police-state

When one starts connecting all the dots the idea of leaving NA for good may not be such a drastic idea after all.

#100 Son of Ponzi on 05.07.14 at 12:45 am

#36 Why on 05.06.14 at 8:12 pm
#24
Why should I get a new dream. This is what I was taught. Work hard study hard, and you’ll be able to start a family and buy a house. Where’s my house.
————-
The offshore investor has your house.

#101 Ayn Rand Army on 05.07.14 at 12:56 am

#208 Shawn on 05.06.14 at 5:54 pm

From yesterday’s post, Shawn, if you understand fractional reserve banking so well then please explain how it worked when we were still on the gold standard where the reserves were in gold.

Then explain what a run on the bank meant back then.

Then reconcile how today’s system has no limits to theft and corruption of the money supply and banking and government spending that gold and taxes used to limit.

It’s true a fractional reserve banking system can work with prudent banking and the constant threat of a run on the bank when the reserves are gold. So i will admit that we can still have a fractional reserve system so long as the reserves are gold. But we don’t have that today and what we have now is immoral.

#102 Dman on 05.07.14 at 12:57 am

Wanting a house is not a lot different than wanting tulips or South Sea Company shares. We attach all of this meaning upon things without question. It’s just a structure, usually a poorly built one. Remember, at the end of the boom, whether stocks or real estate, all the quality stuff is gone and only the crap is left at a price you’ll be willing to pay. I work in construction so I know this – everything is slapped up, because everyone’s racing to make a buck the next day. Don’t reach for yield, you’re just taking on risk for free. And if you’ve held out this far, and are thinking of throwing in the towel, don’t, because all of these painful years means you are probably going to be the last person that hasn’t capitulated, and as soon as you do, you’ll be burned the worst.

Housing for adults is like Power Rangers or Pikachu for kids like 20 years ago. First they’re the most awesome thing ever, then they’re just ok, and then one day you say the words “yellow power ranger” and everyone looks at you like you escaped from a leper colony. And that’s when you have to buy as many yellow power rangers as you can, because they’ll be cheap for the same reason they were once exorbitantly expensive: people are ignorant, greedy, and prejudiced…and one day a balding man will “need” one to relive his youth.

#103 SCIBADUBADEBUMBADO on 05.07.14 at 12:59 am

#12 sheane wallace on 05.06.14 at 6:54 pm

http://www.bloomberg.com/video/embed/wby1QOW4RZWXEHAUuY8yEg

Worked hard all your life? Played by the rules? Saved for your retirement, for a rainy day, for your kids, for your legacy?

AHAHAHAHAAHAHAHAHAAHAHAHAH YOU SUCKER, YOU! .gov says SOMEONE needs a good solid fu..ing to keep the Ponzi going, and hey, turns out it’s you!

Einhorn pushed back and said that if we raise rates then government has to pay more money to savers, creating bigger deficits, creating the fiscal stimulus that congress won’t approve, and we would get a flow through into the economy.

Low interest rates are simply theft of personal property by government and the wall street bankster boyz.
They make the laws and they have the guns so whatever they say goes. People who saved all their lives now get cat food for interest payments in their old age. Suck it up again comrades.
I have a good friend who escaped the Soviet Union from what was Czechoslovakia. He remembers clearly the dictates from government. He also often re-iterates that it is the same here. It was very free when he arrived but now the populace is in chains, watched by their very I-phones they carry everywhere. Telephones and e-mails are snooped and recorded for future use if the Gov ever wants to use it against you.
Who can stop them from stealing from you through low interest rates? If they don’t steal using low interest rates then they use inflation to devalue your money while it sits in the bank and becomes worthless over time.

#104 MEANWHILE IN FRANCE on 05.07.14 at 1:01 am

Well, as you said many times, buy and hold. Even with RE in good locations.
My first house in Calgary ( owned it 1994 – 1999), just came on the market. That’s one hell of a run from the time I bought it.
Of course it needs to sell. Which in the current climate it will, I am sure. Developer will raze it, build three units on the 50′ lot and cash in as well.

http://comfree.com/2-storey-for-sale-erlton-alberta-498800#.U2lKWltmax8.facebook

#105 KommyKim on 05.07.14 at 1:06 am

RE: #61 joblo on 05.06.14 at 9:36 pm
So think about all the property tax on these inflated house assessments.

Unless your assessment is out of wack with the average for your area, house assessment increases have nothing to do with the property tax increase you’ll pay. Taxes are set by the MIL rate which the municipality sets to a value that nets then the tax revenue they need.
But, the property transfer tax collected by the province is based on the sale price!

#106 wallflower on 05.07.14 at 1:16 am

#19 Ray Skunk on 05.06.14 at 7:23 pm
Toronto is a mess. Cookie cutter neighbourhoods everywhere. Big box retail blocks. Decaying infrastructure. Zero charm and lots of trouble. Iconic for Ontario: bigger trouble.

#28 Dual Citizen In Canada on 05.06.14 at 7:52 pm
I just gave MY landlord 60 days notice. Devastated. Hard to find reliable payers like me. Moving on, thank you! (Renting again. Have all the money; 100%; set aside to buy but not seeing the value equation.)
also, if you like Markham, renting here will be easy street… loads of new, never inhabited condo units hitting the market for rent… I predict a continual decrease in monthly rents. The numbers of vacant, new units are escalating dramatically.

#43 DM in C on 05.06.14 at 8:39 pm
Totally.

#107 Bobby on 05.07.14 at 2:04 am

Looking at condos to rent in Kelowna. Lots and lots available. Prices are falling and it is getting close where it is better to buy than rent.
Condos were wayyyyyyy overbuilt in 2006-2008 and prices are falling. Many sellers are underwater and want to get out.
Called about one unit that has been on the market for months as a second listing. Still a ways to fall before it is priced right.
Difficult to be sympathetic as sellers snubbed their noses when the market was hot.

#108 Andrew Woburn on 05.07.14 at 2:50 am

#102 Pastbeyond60 on 05.05.14 at 11:59 pm
@Andrew Woburn
I do hope it is as inconsequential as you describe and goes away quickly. But it will be difficult to arrange your financial affairs if the banks close/will not open accounts for you. It will be impossible to visit family or holiday in the US. This is truly sad.
=====================

I did mean to imply that FATCA is inconsequential or will go away soon. What I meant to say is that the impact on US tax evaders will be temporary and minimal. The damage done to the innocents is considerable and will continue indefinitely.

I grew up believing Americans were our best friends. My children are now Americans. Yet when I look at the
shameless way they spy on the world, the worrisome way they are militarizing their police forces, the outrageous treatment of their citizens by Homeland Security, the contempt with which the US administration treats its governing institutions and now FATCA, the slap in the world’s face, you have to ask yourself if anyone can trust the US government anymore. America’s strength has always been not its mighty fists, but the respect it rightfully earned. Now what?

#109 Buy? Curious? on 05.07.14 at 4:28 am

Garth, has it started then? Is this the beginning of the Greater Fool Real Estate Crash? People are bailing, selling their houses and moving into rental accomidations? *yawn* Where are they going to go? Downsizing boomers are only going to rent for a few years before they’re put in a home. Heck, do they even buy ripe bananas anymore? Families are going to pay big rents so their presious little children can go to the right schools. And who cares what rentals cost outside of the city are. Subburbs are the new slums. Cities are intellectual hubs. It’s where all the jobs are. What kind of idiot buys a house in Barrie, Milton or Brooklyn, Ontario to commute into the city? Those commutes are soul-sucking acts of worker bees.

Me? I like to party. Not as hard as Rob Ford parties, but hey, I’m not a politician. Get well Robbie. We need you for the tourism.

https://www.youtube.com/watch?v=q76RdgGLL58

#110 Londoner on 05.07.14 at 5:42 am

#44 omg

Ha – Toronto as compared to London. Londoner, you slay me.

Your handle aside, have you ever been to London?
———————————————————-

Actually, yes – I live and work in London (UK not Ontario) and I’ve been here for most of the past decade.

I don’t see why you can’t make the comparison I did between London and Toronto. What do you think those locations I mentioned in London offer people that Toronto doesn’t? People buying in those locations are couples and young families. Sure household incomes are marginally higher then Toronto but then again so is the cost of living.

I’m not a house pumper. Like I said, I think there are areas in Canada that are way overpriced. I have lived in both Toronto and London and I can see similarities. But then again, maybe you guys have more experience then me.

#111 TO Renter on 05.07.14 at 7:08 am

RE: #107 Buy? Curious?
Q: Where are they going to go?
__________________________

A: Where the “Amenities Nearby” in the MLS ad lists “Hospital” and “Public Transit”
CREA should add that to their search filter for early boomers moving out of suburban sprawl back to the city, to be a block away from where their cardiologist works, and on a transit line so they can quit driving with slowing reflexes and failing eyesight.

As for their worker bee children, we can live anywhere (yes, good schools is a criteria) because we work online, in the cloud. Work-at-home arrangements have come into the own since $$$$$B corporate Canada began downsizing expensive commercial real estate in the downtown core. I haven’t had a cubicle since 2009. Don’t care if the QEW is closed, just make sure the train is running to the game at the ACC.

Noticing how the boom and echo generations on either side of me are ditching the car. Rob Ford is a little out of touch there.

#112 Ray Skunk on 05.07.14 at 7:28 am

#108 Londoner

You live and work in London – have you ever lived and worked in Toronto?

Trust me, there’s no comparison.

Toronto is more on the same level as Birmingham. I’m not even joking. Multicultural? Check. Currently failing miserable at popular sports? Check. “Entertainment district” of bars congregated mostly in one area? Check. Similar populations? Check. Horrible traffic with one toll circumvention available? Check. Mostly buses to get around? Check.

Still, Birmingham has a better rail network and at least you have a chance of a drink post 2am (while the 2am shutdown remains, there is NO way we can call this place world-class).

* I’ve lived/worked in London for 5 years, lived/worked in Toronto for 6 years.

#113 Ayn Rand Army on 05.07.14 at 7:46 am

#95 Opinated on 05.07.14 at 12:06 am

#114 maxx on 05.07.14 at 7:48 am

#18 Maxamillion on 05.06.14 at 7:13 pm

” “Women’s clothing retailer Jacob Inc. has filed for bankruptcy….

Who will buy your house when jobs keep disappearing…..”

This trend continues, because many with savings are not spending. Allowing savers better returns would produce more liquid in the real economy. I don’t see a break in this stupid, white-hot, hate-on for savers any time soon.

Pay off debt and preserve your cash. It will stand you in good stead over the years. Buy second hand as the treasures are amazing and plentiful. Bought a black computer monitor yesterday, in perfect condition- not a single scratch for $5.00 and NO TAX at a charity shop. Current retail pre-tax: $149.99. U.S. This is but a single line item on the conveyor belt of goods we buy.

The amount of money we save is nothing short of ridiculous.

#115 Ayn Rand Army on 05.07.14 at 7:52 am

#95 Opinated on 05.07.14 at 12:06 am

That’s nice, so you just take your pills and watch tv, we don’t need any support or naysaying form a sheepish coward who has no self worth or independent thought. You only do as you’re told because the law says so. You’re pathetic and ignorant, just like most people so Canada’s the place for you!

Well for those of us who have self respect and self worth, we will be busy fighting to try and preserve our property rights and privacy rights and freedoms.

IF you want to try to better yourself, first read the US declaration of independence followed by the US constitution.

#116 maxx on 05.07.14 at 7:53 am

#111 maxx on 05.07.14 at 7:48 am

Oh, and no “eco fee” either.

#117 Ayn Rand Army on 05.07.14 at 8:02 am

IN CONGRESS, July 4, 1776.

The unanimous Declaration of the thirteen united States of America,

When in the Course of human events, it becomes necessary for one people to dissolve the political bands which have connected them with another, and to assume among the powers of the earth, the separate and equal station to which the Laws of Nature and of Nature’s God entitle them, a decent respect to the opinions of mankind requires that they should declare the causes which impel them to the separation.

I am not publishing the entire Declaration. Seriously. Look it up. — Garth

#118 Buy? Curious? on 05.07.14 at 8:02 am

#109 TO Renter on 05.07.14 at 7:08 am

What colour is the sky in your world? I don’t think that future is here yet. Why do you think places like Google, Facebook, Apple etc construct massive campuses? To play ping-pong? Do you think Pfizer has their global workforce working from home so they can enjoy a work-life balance? Not including hipster interns, how many people do you know work in “the cloud”? Out of 100 people you know…wait, you’re a renter. Let me rephrase that, out of the ten people you know, how many work from their home?

https://www.youtube.com/watch?v=wAz-sB3IS2U

#119 Ayn Rand Army on 05.07.14 at 8:14 am

For abolishing the free System of English Laws in a neighbouring Province, establishing therein an Arbitrary government, and enlarging its Boundaries so as to render it at once an example and fit instrument for introducing the same absolute rule into these Colonies:

—–

I think its talking about Canada here. That explains it.

#120 Gypsy Kid on 05.07.14 at 8:18 am

why do people say renting is throwing money away??
Can someone tell me? We own outright, but when my DH and I got married 21 years ago, we rented for years. We never thought it was throwing money away. We were just so happy to be together at our “home”.
I love my house now; this is where our two sons grew up and we’ve made friends in the neighborhood but keeping the house in good shape is a real PITA. We decided not to buy a cottage (as we are underexposed to RE according to the rule of 90)but decided against it as it will be just another home we would resent having to upkeep. Instead, we rent up in gorgeous Tobermory, go camping, and do regular winter vacations up in Huntsville in one of the resorts. It’s so carefree and a true vacation that way…

#121 aaron on 05.07.14 at 8:18 am

Based on the bond spreads and the Feds forward guidance, rates won’t be raised until 2018. Even then it would be very gradual. So why wouldn’t anyone invest in RE. Low rates for decades like Japan. Hyperinflation has been ruled out 100% by Bernanke.

The Fed is widely expected to move in Q2, 2015. The bond market will advance that. — Garth

#122 TO Renter on 05.07.14 at 8:22 am

Re #115
Since you asked so nicely, out of 30,000+ Canadian employees, 17,000 are mobile or home workers now. There are aggressive targets to grow that number. Millennials appreciate it. But those of us in our 40s have embraced it to. I only know 10 people because I sold in ’12 and rent? My LinkedIn finds that funny since it doesn’t display a number over 500. And yes, it is full of people in San Jose, in IT, working in the cloud and around the world. Any sense on your end for what % of the global workforce is in IT/software/high tech industries? But then again, they say we’re in our own ‘bubble’, can’t escape it.

Most popular item last month on the msg boards at work was the T2200 form for tax deductions for the home office.

Welcome to the future. Look around a bit and you’ll find it. (waving)

#123 Londoner on 05.07.14 at 8:23 am

#110 Ray Skunk

You live and work in London – have you ever lived and worked in Toronto?
_____________________________________________

Yep – I lived and worked in Toronto for longer then I have in London.

Toronto on the same level as Birmingham? Ha – now I know you’re joking. Bars and buses? Maybe try looking at the things that attract people to live and work in London. Salaries, availabilty of work and industry. Birmingham is the location of onshore, low cost centres for many of the companies in the City. No comparison. Toronto is Canada’s financial centre, just like London is for the UK.

#124 Londoner on 05.07.14 at 8:32 am

#110 Ray Skunk

Btw – if you lived in London (a “world class city”) why did you move back to Toronto if you think it’s comparable to Birmingham? Seems like going backwards, no?

#125 Bloor West Vilage destruction coninues... on 05.07.14 at 8:35 am

#19 Ray Skank

….. London to Toronto compare ?!!!

LOL Ray you took my story … HA HA HA !!!!!!!!!!
Awesome man !

I live i BW Village for last 20 plus years and watch absolute destruction year after year , first with insane tree cutting every year to resent Mega Condo concrete slabs being build in neighborhood where SIDEWALKS did not WIDENED in last 60 years !

On the corner of near by street condo complex by Daniels cut 27 100year old Oak trees to concrete thing for 350 cars 400 micro condos and for god sake zoo of school-buses to take kids to schools that are far away because local one are small and overpopulated .

Next time subway kicks you out at keele you will have to walk on heads of people waiting for subway.

LOL

What kind of idiot compare Toronto to London England?
London is being build for last 300 years with insanely build public transportation that at one point had separate MAIL SUBWAY LINE!
I lived in London in early 80′ and with umbrella in your hand you can hop on Tube and end up in Manchester by just hoping from tube to tube to rail station that under same roof.

What is also puzzling how come Toronto have so hi scores in “Quality of Life” category when its residents does not have freedom of movement withing the city ?
>
>

#126 TO Renter on 05.07.14 at 8:48 am

P.S. To Buy? Curious?

And yes, you can play ping-pong on their massive campuses, but billiards is more popular and the gyms are always packed. The cubes are shared by many workers, each coming into ‘the office’ for a few hours a month.

Our sky is technicolour. Marissa Mayer brought in some momentary clouds, but she’s an exception.

And renting in TO doesn’t mean one doesn’t own elsewhere. Just to further broaden your perspective. I escape on weekends and summers.

So rainbows and unicorns in the technicolour sky.

#127 World Traveller on 05.07.14 at 9:05 am

#19 Ray Skunk on 05.06.14 at 7:23 pm

Another example of why Toronto isn’t a great business centre either, people in business are usually short of time and getting around Toronto is not for those with a tight schedule. I’d like to see the km/h average for your trip.

#128 WhiteKat on 05.07.14 at 9:10 am

@95 opinated, you said: “I am just a Canadian citizen who respect and comply with laws whether I like them or not. I am a beliver that that is how a civilized society work. ”

Martin Luther King Jr said: “I submit that an individual who breaks the law that conscience tells him is unjust and willingly accepts the penalty by staying in jail to arouse the conscience of the community over its injustice, is in reality expressing the very highest respect for law.

#129 World Traveller on 05.07.14 at 9:10 am

#19

Here you go, Ray, 15.9 km from Islington to Union at 1 hour 20 minutes. I quick runner could make it in the same time.

7.4098 mph
11.9250 kmh
3.3125 meters/sec
652.0669 feet/minute

#130 Londoner on 05.07.14 at 9:11 am

#123 Bloor West Vilage destruction coninues…

Same story as Ray – you used to live in London and life was so great but now you live in Toronto and everything sucks. *Yawn*

If you’re unwilling to look at the underlying reasons that drive the demand in Toronto SFHs then you’re kidding yourself. They are fundamentally the same reasons that drive the demand in London.

#131 Shawn on 05.07.14 at 9:12 am

Fractional Thinking

Ayn Rand Army at 99 responded to me and says:

It’s true a fractional reserve banking system can work with prudent banking and the constant threat of a run on the bank when the reserves are gold.

*************************************

So you want to go back to a system with fractuional reserve lending based on Gold which had constant threats of a run on the bank?

Not me. Our fractional reserve banking system is absolutely vital to the amazing standard of living enjoyed by most (but no all) of the earth’s 7 billion or so.

The poor countries tend to lack the rule of law which is needed for proper banking.

You worry about the decline in value of paper dollars. I invest mine and make big returns nominally which are still pretty big after deducting inflation.

My portfolio is invested in real companies (not dollars) but is measured in dollars. Do you know the difference?

#132 Ray Skunk on 05.07.14 at 9:17 am

#122

Btw – if you lived in London (a “world class city”) why did you move back to Toronto if you think it’s comparable to Birmingham? Seems like going backwards, no?
————————–

I didn’t move back to Toronto – I’m not a Toronto native. Work and life has taken me to many places… I don’t stay in one place based only upon its standing on the world stage.

Of course salaries are higher here – then again so is the ridiculous cost of living. Salaries and living costs are also insane in Oslo. Does that make it comparable?

Just because Toronto is the financial centre of Canada does not compare it to the global financial centres of London, NYC and Tokyo, sorry. Watch any global business TV channel… FTSE, Dow, NASDAQ, even DAX all scrolling along. TSX? Not a peep.

Infrastructure is far more important to those living here than the presence of a few banks (unless of course you work for those banks). You can’t deny that Toronto’s infrastructure is weak to begin with, and what we have is falling apart.

#133 Buy? Curious? on 05.07.14 at 9:23 am

#120 TO Renter on 05.07.14 at 8:22 am

Wait! What?

“out of 30,000+ Canadian employees, 17,000 are mobile or home workers now.”

Where did you pull that stat from?

Here’s a stat.

“According to the 2011 National Household Survey (NHS), roughly 15.4 million Canadians commuted to work, while 1.1 million worked at home most of the time.”

That’s less than 10% instead of your 50% of Nothing Inc. And I don’t think those people are exactly IT, San Hoser types that you’re trying prove your point with either. Stop listening to Arcade Fire.

*gives the finger*

Source: http://www12.statcan.gc.ca/nhs-enm/2011/as-sa/99-012-x/99-012-x2011003_1-eng.cfm

#134 maxx on 05.07.14 at 9:29 am

#23 SilverMeridian on 05.06.14 at 7:31 pm

“…..Realtors had expected the market was going to rebound after slow start earlier this year, apparently the weather was to blame for that. It never picked up though…….”

Give us a break!! Next, realtors will be saying that the weather is too good and that people are out enjoying it……

RE is sliding and much of it a fail-safe recipe for permanent loss of wealth and flipping is now a huge risk in most markets.

#135 aaron on 05.07.14 at 9:33 am

The Fed is widely expected to move in Q2, 2015. The bond market will advance that. — Garth

Let’s say you guessed right, a speculation btw, nobody is going great fret over .25% / year increase. So worst case scenario is 1% over for years. Most likely scenario is .25% over 4 years.

Once the Fed moves it will be with the same determination that it applying to tapering – which so many on this blog said would never happen. Best prepare now. — Garth

#136 Ayn Rand Army on 05.07.14 at 9:41 am

I don’t always like Armstorng but i have often asked myself the same question. How did we ever come to have such a broken system of government where we bicker and vote for what we want rather than just have a free market where everyone can have what THEY want.

Why is our most important institutions, education and healthcare run by the worst people and monopolies possible, governments.

How dumb are we that we can’t recognize how bad the system is and why?

When you remove competition and profit motive from an economy, you get bad products, bad service and high prices.

Don’t belive me, look at the VA hospital system int he USA. It’s a disaster and full of corruption while ex soldiers are dying on waiting lists for basic tests. And the VA annual budget is $150 billion per year.

#137 Ayn Rand Army on 05.07.14 at 9:42 am

Forgot the link,
http://armstrongeconomics.com/2014/05/06/eu-politicians-see-the-2-greatest-problems-tax-evasion-unemployment/

#138 Holy Crap Wheres The Tylenol on 05.07.14 at 9:44 am

#47 drydock on 05.06.14 at 8:49 pm
Smoking man gets under the skin of more than a few people here,(you know who you are.)
So, i have provided a link to a video that you must watch to the end and you will experience an epiphany.You shall be forever changed your consciousness enhanced.
Your welcome.

______________________________________________
Epiphany my ass, this video is addicting and cruel. I can’t believe I actually watched it for about two minutes before my head exploded. Poor Smoking Man if he watched this he’s a goner. This was worse than back in the late sixties we were on leave and one of my air force buddies talked me into doing peyote.

https://www.youtube.com/watch?v=wZZ7oFKsKzY

#139 Huuk on 05.07.14 at 9:52 am

Garth,

In the GTA where there is more flashy real estate show-offs than hard working souls, is it really unrealistic to assume that 3% of deals fell through?!?

That number seems not overly unreasonable, as you position it to be – “Then TREB counted 9,811 sales during the month, a number it now claims is really 9,535. Either than means 3% of all sales fell through, or the realtors screwed up”

I am not protecting the terribly corrupt RE industry insiders in TO, but 3% seems ligit as correction month over month.

Then data needs to be adjusted for it. To compare net and gross numbers is a form of statistical fraud. — Garth

#140 Daisy Mae on 05.07.14 at 9:52 am

#22 Vangrrl: “You never stop paying for shelter, even when your house is ‘paid off’….still have taxes, upkeep, yard maintenance…Renters never have that expense.”

*****************

It’s called ‘the cost of living’. Not free for anyone unless you chose to live off the land in a remote mountainous area.

#141 Munch Runch on 05.07.14 at 9:55 am

@Ayn Rand Army
You are a beating. Go back to Zerohedge.

#142 Herb on 05.07.14 at 10:01 am

#75 Dual Citizen in Canada,

read Part V of the Residential Tenancies Act: http://www.e-laws.gov.on.ca/html/statutes/english/elaws_statutes_06r17_e.htm#BK40

The selling landlord cannot terminate your tenancy except for for the reasons specified in Part V of the Act. A desire to sell is not one of those. Even if you and your existing landlord do not come to an agreement on a new lease at the end of the existing one, he can’t just toss you without proving one of these reasons.

The new owner cannot terminate you at all before the sale is completed, and even after only if he can can prove one of these reasons, such as needing the place for himself.

As already suggested by someone, you can ask the Landlord and Tenant Board for clarification and assistance. Link http://www.ltb.gov.on.ca/en/index.htm

#143 Londoner on 05.07.14 at 10:01 am

#130 Ray Skunk

You’re right – Toronto’s infrastructure is falling apart.

However you’re incorrect in assuming that just because the TSX is not mentioned by international news channels that Toronto is globally insignificant. Companies operating in Toronto are not just those listed on the TSX.

#144 frank le skank on 05.07.14 at 10:08 am

I don’t think that a 15.6% jump from March to April of 2014 is significant. There was an increase of 2575 listings from March to April 2014 compared to 2480 listings from the same period in 2013. The only way this number would be relevant is if its the beginning of an upward trend.

If you look at the listings for the months of Jan-April from 2004 to 2014, it is apparent that listing are significantly less for this time of year starting in 2011. It appears as though TREB is correct in some ways; prices are increasing, listings are lower, however their assumptions and conclusion are based on their strategic objective to sell houses. Duuuuuuuuuuuuuuuuuuuhhhh!!!

I do think that there will be a tipping point where listing continue to escalate and eventually prices will begin to decrease but the fat lady hasn’t sung yet. All my comments are based on the fact that TREB numbers are SOMEWHAT realistic.

#145 aaron on 05.07.14 at 10:18 am

Once the Fed moves it will be with the same determination that it applying to tapering – which so many on this blog said would never happen. Best prepare now. — Garth

Nobody said that it won’t happen. I certainly expect some rate hike.

But I quote Yellen (April 2014): “This extraordinary commitment is still needed and will be for some time, and I believe that view is widely shared by my fellow policy makers. The scars from the Great Recession remain, and reaching our goals will take time.”

Which part of that don’t you understand? Labour market is still tight. So the expectations of low rates for decades to come is not unreasonable. Perhaps ignorance is a bliss. I can only see RE prices going higher and higher.

Low rates for months to come, not decades. You shall see. Best prepare now. — Garth

#146 up in arms on 05.07.14 at 10:26 am

DELETED

#147 Daisy Mae on 05.07.14 at 10:31 am

#58 Frank Blood: #19 “… a road closure caused by a sports event/street festival/run-for-the-ride-for-the-hope-for-the-cure/full marathon/half marathon/whatever that happens every time the sun pops out for five minutes.

HA HA HA HA HA HA HA.”

******************

Aren’t they a pain in the ass — disrupting all traffic for their special little cause? LOL

#148 Mixed Bag on 05.07.14 at 10:32 am

#71 Nemesis on 05.06.14 at 10:10 pm

The Delicate Delinquent? Is that what you are calling L’HommeDuTabagisme? I must needs view this film.

#149 Londoner on 05.07.14 at 10:32 am

#130 Ray Skunk

I don’t stay in one place based only upon its standing on the world stage.
_____________________________________________

Exactly my point. Most people living in London think the same way. They couldn’t care less if London was a world class city or not. Their concerns are the same as any Canadian – where are the jobs? what are they paying? where can I afford to live? where can my kids go to school? etc. A London family devoting a large chunk of their income to housing is no different then the same equivalent family in Toronto. They all want the same thing. The difference is that, comparatively, spending the same amount of money gets you more in Toronto.

#150 aaron on 05.07.14 at 10:34 am

Low rates for months to come, not decades. You shall see. Best prepare now. — Garth

I wish I can bet a case of beer. But I don’t see the herds mentality change over .25% increase in rates because that’s as much you are going to get until the next rate hike in 4 years. Inflation is still way below 2% target.

You are wholly mistaken. — Garth

#151 aaron on 05.07.14 at 10:46 am

Yellen: No timeline for rate hikes.

#152 Ralph Cramdown on 05.07.14 at 10:49 am

aaron and Garth:

Consensus predictions of rates going up a year or two from now have been with us for about five years now. Everybody starts off every year thinking this will be the year US GDP growth hits 3.5-4%, then expectations slowly wilt as the year goes on.

Yes, Bernanke/Yellen have repeatedly promised to leave rates lower for longer than a Taylor rule policy would. Will she? Time will tell, but I’ve two observations: Previous Fed rate hike regimes have often looked like 1/4% every quarter for two years or as long as it took. 1/4% a year would be an unprecedentedly low rate of tightening, and you don’t get to sit in the Fed head chair by being a radical. As much as various central banks say that they have an inflation policy within a target band or symmetrical around a target number, they have acted as if they were much happier seeing inflation below the target than above, with the ECB playing chicken with 0 as I type. And they want me to believe they’d be lackadaisical about inflation with a three handle as long as unemployment is elevated?

The supposedly smartest people in the bond world haven’t been very good predictors; witness Bill Gross’s underperformance as money continues to flee his fund. I wouldn’t be surprised by anything, and I’m certainly not making any big levered bets either way.

#153 Just the facts Ma'am on 05.07.14 at 10:59 am

So, according to the board’s own unrevised data, sales in April of 2014 were 1% lower (not 1.8% higher) than last April. And sales this year are 3.1% lower than they were in 2012. Not so hot, actually.-Garth
———————————————————
up 1% or down 1%, basically it’s even.
Face it, sales are even and that’s with 8.4% less listings=hot market and buyers chasing fewer house.
Everyone wants to live in Toronto, except me (too many a-holes here)

#154 Just the facts Ma'am on 05.07.14 at 11:12 am

#19 Ray Skunk on 05.06.14 at 7:23 pm
There are dozens upon dozens of socioeconomic reasons why Toronto doesn’t begin to deserve price comparisons to London – just thought I’d give my recent 2c worth.

Loved the anecdote Ray, but how does this justify the price of homes in London?

#155 Doug in London, Ontario on 05.07.14 at 11:22 am

@Londoner, post #11:
Greetings, Londoner, from the London on the west side of the pond. First, as many other commenters have said, comparing Toronto and London, UK isn’t really a fair comparison. it’s like comparing Toronto with a city like London or Kitchener, Ontario. Also, from what I’ve heard prices in London have shot way up in the last 5 years, completely avoiding the correction which occurred in The United States and many European countries like Spain and Ireland. Similarly prices have gone way up in many cities in Australia and new Zealand. Do you see a pattern? London prices may also be in bubble territory.

@sheane wallace, post #12:
You’re quite right, these low interest rates have been a transfer of wealth from anyone who saves in low interest rate investments like GIC’s or in the orange guy’s shorts as Garth says, to borrowers. Take up your weapons and shields in defence, they come in the form of a diversified portfolio, preferably when the investments therein are bought on sale. Did you scoop up REITs, preferred share ETF’s, or utility stocks when they were on sale last year?

#156 CALL TO Stop the DEBT MADNESS on 05.07.14 at 11:27 am

CALL TO Stop the DEBT MADNESS – and implicitly, high food and house prices. Repeat it on every posting, no copyright needed.

The only way to stop the fractional-reserve orgy is to drastically and on-purpose limit financial products. SELL all stocks, bonds, cash RESP, RRSP, etc – in the same amount you have a mortgage and pay the DAMN mortgage. This will reduce the DEBT BUBBLE to manageable levels and economy will not suffer.

Or sell and find a business, commercial activity to run yourself. hands on exposure for the children = invaluable

Here’s for simplicity to a nicer life. Don’t be greedy. Be honest. Stop the DEBT madness. Cheers.

#157 monty on 05.07.14 at 11:28 am

Hey Garth. Heard this a.m. on the radio that Kelowna sales were up 26% – yeah 26% and prices up about$13,000-00…real or surreal ?

#158 Blaise on 05.07.14 at 11:31 am

One of my colleagues just bought a place. After months of being out bid for months by people paying 25% over asking with no conditions his real estate agent finally convinced him to do the same.

So he purchased a house with aluminum wiring and asbestos plaster, he’s new to Canada so had no idea that houses of a certain age were at risk for such things. He knew a new furnace was needed and budgeted for that and thanks to his agents assurances everything else was cosmetic.

He hired a home inspector after the deal closed and is overwhelmed by the amount of work that will be required to bring everything up to code and is safe. It’s like a bad episode of Holmes on homes every day his contractors find something new and horrible.

So much for secure shelter he’s living in a motel because his house isn’t safe for habitation has no power or running water or heat. What little savings he had left are evaporated and he’s adding debt fast. He thought buying in the 200k price range would leave him with plenty of money to fix it up and still save. He’d have been better off burning that money.

I understand the appeal of buying in Calgary the rental market is crazy half of the landlords are asking for application fees and playing games with the rental amount. I looked at several places recently that were listed at one price but suddenly at the viewing were $200 more.

#159 BillyBob on 05.07.14 at 11:35 am

I’m a bit puzzled as to why a “Londoner” seems to want to pretend that Toronto should be considered even in the same sentence as London.

Toronto may be the centre of finance for Canada, a nation of a mere 35 million people. London is arguably the centre of finance for the world.

I live in Dubai and travel to both London and Toronto constantly. In the summer, many wealthy Arabs have their supercars shrink-wrapped and shipped by air to London to drive while they escape the heat. I’d be surprised if they could find Toronto on a map. Seen many Russian oligarchs cruising down Yonge Street lately? They’re buying up London. Professional athletes? I can’t even guess how many Premier League stars own in London versus what – Raptors players in Hogtown? I could go on. Size, population, business, banking, history, culture, geography – London absolutely dwarfs Toronto in every category.

Toronto is a wealthy city. But London is serious money, a whole different planet. To suggest that the cities are similar enough, that the same factors can be applied to real estate in both equally, is ludicrous.

#160 TO Renter on 05.07.14 at 11:51 am

RE #131 Buy? Curious?

Darn have to spell it out…

#s from the annual report of the company I work for. They put together cute infographs showing where their employees are across 120 countries, and break down ofiice vs mobile vs homeworkers under a section called Corporate Culture. When there is a high tech skills shortage, apparently it matters to attracting and retaining workers (MScE etc) among the companies you so helpfully mentionedn except Pfizer, I know diddly about them.

I tend to try and reference things in my own direct experience.

1.1 miilion back in 2011? Wow. No wonder I know more than 10. Sorry your predictions were off, just here to offer some illustrations of a trend that has been on an upswing in an industry sector whose growth is perceived as significant.

Take a tour of Googleplex on youtube, or even better find the ping pong players at their table. Yes it’s ALL about more cubicle space for the office RE bound drones…

Somehow the concept of mobility (unless in a car stuck on the 401?) rubs you the wrong way?

#161 Son of Ponzi on 05.07.14 at 11:51 am

Yellen can’t predict Asteroids.

#162 Son of Ponzi on 05.07.14 at 11:55 am

Vancouver’s inferiority complex has now reached Toronto.
World class house prices do not equate to World class status.

#163 Doug in London, ontario on 05.07.14 at 11:57 am

@Londoner, post #11:
Greetings from the London on the west side of the pond. First, as many other commenters have said, comparing London, UK and Toronto isn’t a fair comparison. It’s like comparing Toronto with London or Kitchener, Ontario. Second, I don’t know much about the British housing markets but have heard prices in London have really shot up in the last 5 years. London has avoided the housing correction which hit the United States and some European countries like Ireland and Spain. Similarly in many Australian and New Zealand cities prices have shot up also just like in London and Toronto. Do you see a pattern? London prices may also be in bubble territory.
@sheane wallace, post #12:
You’re quite right, these low interest rates have been a transfer of wealth from savers who save in low interest rate investments like GICs (or in the orange guy’s shorts as Garth says) to borrowers. What to do if you’re a saver? Take up your arms and shield in defense in the form of a good diversified portfolio, preferably scooping up the investments therein when they are on sale. Speaking of which, did any of you savers scoop up REITs, preferred share ETFs, or utility stocks when they were on sale last year?

#164 truth sucks don't it on 05.07.14 at 12:04 pm

Yellen just finished saying that she will not raise rates any time soon because any rate rise would cause the government debt repayment to eclipse total military spending by 2025. We’re in the same situation in Canada….which is why we see 50 year ZIRP rates as being effectively carved in stone. Look for tax hikes towards 100% ( as the Ont Libs) are suggesting) before rates come down. What we have is a class war between the civic servant class and everyone else…..low rates means more money for the elite…..they’re not just going to let that go without a fight.

Of course she did not say that. — Garth

#165 truth sucks don't it on 05.07.14 at 12:05 pm

correction

” Look for tax hikes towards 100% ( as the Ont Libs) are suggesting) before rates ‘go up’.

#166 frank le skank on 05.07.14 at 12:19 pm

#27 Boat on 05.06.14 at 7:48 pm
“Totally missed the real estate boat. It’s done. At least I get to read this blog every night… Should have listened to Brad Lamb; he’s a dork, but he’s got game. I’ve got some hard earned and invested money, but nothing compared to friends who signed for bloated mortgages and hit the money train doing nothing but sitting, watching and gloating, while spending their cash freely enjoying life instead of saving and sacrificing as I did.”

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

Read the Grasshopper and the Ant story and consider this (RE bubble) a learning opportunity.

#167 sciencemonkey on 05.07.14 at 12:23 pm

Hey I ran as a relay team this past Sunday! I agree it’s an assholish thing to do, always closing down roads for these events.

#168 victoria - the original on 05.07.14 at 12:30 pm

I lived in London and Paris and my husband lived in London, New York and Paris.

We have also lived in Toronto.

Toronto not even close to London, New York, Paris, etc.

Sorry.

#169 truth sucks don't it on 05.07.14 at 12:32 pm

While on the topic of class warfare between the elite halves and the rest of us have nots. Canadians looking down the barrel of hundreds of billions to support the civil service pensioners.

http://fullcomment.nationalpost.com/2014/05/06/matt-gurney-two-kinds-of-people-those-with-government-pensions-and-the-rest/

And Garth…yes she did say that….we were listening.

#170 SCIBADUBADEBUMBADO on 05.07.14 at 12:35 pm

#34 WhiteKat on 05.06.14 at 7:59 pm

Our Government has no respect for Canadian Sovereignty.
Several years ago I withdrew all support for the conservative party when they voluntarily surrendered a Canadian citizen to the Americans. This citizen broke no Canadian law and also broke no US law physically. His name is Mark Emery. I am no Stoner so I have no particular interest in Mr. Emery’s business. I do know when our sovereignty has been compromised.
This man only sold Marijuana seeds to willing adult US citizens by mail.
When our Government will cow-tow to American pressure it is clearly time to change our Government.
Sometimes I wonder if the long term agenda is to merge with the USA. Then we will all be doing US taxes even if we move overseas. World wide taxation for Life!

#171 Flamed out in Kitchener on 05.07.14 at 12:47 pm

Here’s something worth the read … U.S. based, but very informative about housing reality …

http://loganmohtashami.com/2014/05/05/why-the-financial-media-and-housing-pundits-got-it-wrong/

Hope your recovery is going well Garth.

#172 Bottoms_Up on 05.07.14 at 12:53 pm

#88 RA in Toronto on 05.06.14 at 11:34 pm
——————————————-
And ultimately the sick thing about these pension schemes is that one contributes their entire lives, matched by their employer, grows to be worth hundreds of thousands of dollars, and if you die early in retirement the ultimate payout (to survivor[s]) is paltry.

#173 Buy? Curious? on 05.07.14 at 12:56 pm

#158 TO Renter on 05.07.14 at 11:51 am

Excellent points. Well articulated and presented. I offer my apologies if any offence was made.

https://www.youtube.com/watch?v=_yOTD82_v0s

#174 Londoner on 05.07.14 at 1:03 pm

#157 BillyBob

Wealthy Arabs and Russian oligarchs are not buying 2 bed row houses in Richmond and 3 bed flats in Clapham, Londoners are. Yes, there is a lot of foreign money in London driving up the top end of the market but not in the price range I indicated.

The point of my post was to not compare the merits of Toronto as a city to those of London. But it seems that’s all anyone here is interested in focusing on.

#175 Call_me_Crazy on 05.07.14 at 1:08 pm

Garth, why doesn’t the gov’t not appoint an auditor when the RE boards manipulate, erh… calculate their monthly stats?

Sheesh, this looks alot like the good’ole days of Enron,Worldcom,Adelphia,etc,etc,etc…

#176 Smoking on 05.07.14 at 1:15 pm

#47 drydock on 05.06.14 at 8:49 pmSo, i have provided a link to a video that you must watch to the end and you will experience an epiphany.You shall be forever changed your consciousness enhanced.
Your welcome.

https://www.youtube.com/watch?v=wZZ7oFKsKzY
…….

Wow…. AMAZING

I think I saw God in a clip at about the 9th hour….

Well done…

#177 Vlad the Inhaler on 05.07.14 at 1:18 pm

#34 WhiteKat on 05.06.14 at 7:59 pm

I just emailed this to our Finance Minister, and copied in my MP and Harper. What do you all think? Do I sound like a whiner?

—–
I feel your pain and generally agree with your complaint, however I think you are wasting your time.
Those folks in Ottawa are puppets of the banks.

Do you really think the USA is trying to take over the global financial system? I believe it’s run from elsewhere by others. There are no ‘sovereign’ countries left, are there?

#178 Godth on 05.07.14 at 1:46 pm

Get Ready for Regulators to Peer Into Your Portfolio
http://blogs.wsj.com/moneybeat/2014/05/02/get-ready-for-regulators-to-peer-into-your-portfolio/?mod=WSJ_hppMIDDLENexttoWhatsNewsSecond

real time surveillance…oh the possibilities.

#179 Aggregator on 05.07.14 at 1:48 pm

Maybe the overnight won't rise, but everything else will.

Student Loan Interest Rates Rise for 2014-2015 School Year

Students will pay more to borrow from the U.S. government for college costs this coming school year, with the interest rate on undergraduate Stafford loans climbing to 4.66 percent.

Interest rates for most federal student loans are pegged to the yield on the U.S. 10-year note sold at the Treasury’s auction prior to June 1. This year’s sale was held today, with the yield on the note set at 2.61 percent.

When Congress first tied student loans to the Treasury note last year, undergraduate Stafford loans, the most-widely borrowed, carried a rate of 3.86 percent, almost 3 percentage points less than in the two previous years, because the 10-year note yield was a low 1.81 percent. The yield had been driven down by Federal Reserve purchases of the note to keep borrowing costs down and stimulate the economy.

Change in amount of seriously delinquent loans: chart

#180 happity on 05.07.14 at 2:01 pm

A diversified portfolio, with a bank, is really just one investment – the banker system.

Sure you can have them diversity it, but within their system. Stocks are in street name no your name and used as collateral for betting, savings account is swept daily and loaned out to make money, money market accounts are a loan of your cash to others, etc.

The difference is if you own your house there is no one between you and it, but with the banksters you are last in a long line to get your digitized vapor assets returned to you.

Just wow. — Garth

#181 devore on 05.07.14 at 2:02 pm

#85 TheCatFoodLady

A tenant is booted or skips, the insides get shovelled out – sometimes literally, the grass is cut – sort of & it’s up for rent again & increasingly, also for sale. Fewer & fewer takers.

It is no secret tenant quality is declining as more marginal buyers are able to purchase. Even though mortgage lending has been tightened up recently, overall affordability hasn’t changed a whole lot.

Landlords are probably having more trouble finding and retaining good tenants, than tenants have finding suitable housing. Dire stories of renters with a veritable Noah’s ark in tow aside, at the end of the day the landlord cannot move his property to a better market, and making it more attractive costs a pile of up-front money.

#182 Nonno Nicola on 05.07.14 at 2:06 pm

#86 Puzzled

“I still strongly believe that it will collapse, but truly have no clue as to when and by how much.”

There will be no collpase Puzzled. Old readers of this blog have been waiting for the collapse since 08 and have witnessed a continual upward movement of prices. In the SFH department in Toronto, there is little inventory and massive demand. You don’t have to be an economist on the level of Keynes to know that when that situation exists in economics it only means one thing… Another bit of wisdom that applies to all markets is this: when a market is thought to have to go down, when everyone thinks it should and it doesn’t, then my friend, that is a strong market.

#183 devore on 05.07.14 at 2:18 pm

#99 Ayn Rand Army

From yesterday’s post, Shawn, if you understand fractional reserve banking so well then please explain how it worked when we were still on the gold standard where the reserves were in gold.

From the very first moment paper money came into being (even before it was actually backed by the state) enterprising individuals have been loaning out notes against fractional reserves.

Savers would deposit their gold/silver with goldsmiths to be stored in a safe location, and in exchange they would receive paper certificates. These certificates became tradeable, as if they were actual money, because a person could take them back to the vault and exchange them for metal. These “bankers” quickly noticed depositors rarely took out all their money, so they came up with a way to multiply their profits by loaning out a portion of the reserves at interest. These early banks basically changed their role from money safe-keeping banks to money-making banks.

Then explain what a run on the bank meant back then.

Body harm, probably? Eventually, the bankers organized and formed collectives, setting rules amongst themselves to reduce the risk of a bank run.

#184 nubbers on 05.07.14 at 2:30 pm

Sad @7, you have a choice:
1. Suffer renting for another 5 years or so then buy an affordable (maybe even dream) home that you can afford.
2. Buy now and suffer from now until the end of your life, as you realise that your overpriced dream is a trap from which you can’t escape.

#185 TnT on 05.07.14 at 2:58 pm

CMHC’s Annual Report Documents its Contraction

http://www.canadianmortgagetrends.com/canadian_mortgage_trends/2014/05/cmhcs-annual-report-documents-its-contraction.html

#186 Ralph Cramdown on 05.07.14 at 3:00 pm

#167 truth sucks don’t it — “While on the topic of class warfare between the elite halves and the rest of us have nots. Canadians looking down the barrel of hundreds of billions to support the civil service pensioners.”

First rodeo, kid?

If you’re so far down in the have-not pile that you think that a “have” is someone with a decent pension, you need to work smarter, harder, and self-improve. The real class warfare is between the real haves (say a couple that will leave a mid seven figure+ estate at death) and the middle class. It is waged by convincing working voters that unionization is evil, then that wages can’t go up but we’ll export countless skilled jobs through outsourcing, then import countless TFWs for low-skill jobs that employers don’t want to pay a market clearing wage for, and then finally — since everybody else’s wages and bennies eroded in comparison — to convince voters that the public sector, almost the last members of the middle class able to afford a decent lifestyle on two salaries, is grossly overpaid in comparison. Freeze the salaries, cut the benefits, for we’re all taxed to death!

Have you ever looked at top marginal rates on dividends and capital gains to see what the real haves are paying on their income, even without the use of any fancy tax sheltering tricks? Hint: much lower than the public sector pensioner’s income is taxed at.

#187 :):(Ying Yang on 05.07.14 at 3:13 pm

#42 Smoking Man on 05.06.14 at 8:37 pm

You will never get that book done if you keep mixing it up with girls,booze and gambling. Somethings gotta give!
You pick, creative writer or Smoking Man. Can’t do both, but I guess you can try to do both and die trying!
Perhaps this will help…………………
http://www.allbookez.com/creative-writing-for-dummies/

#188 Londoner on 05.07.14 at 3:17 pm

#166 victoria – the original

I didn’t say Toronto is the same as London. I’m saying that the fundamental drivers behind the demand for SFHs in Toronto are the same as London and comparatively Toronto prices still represent good value.

Instead of trying to contrast the actual point I was making everyone jumps on the “Toronto is not in the same league as London” bandwagon. Classic groupthink behavior.

#189 shawn on 05.07.14 at 3:29 pm

How Pensions Work

Bottoms Up at 170 complains:

And ultimately the sick thing about these pension schemes is that one contributes their entire lives, matched by their employer, grows to be worth hundreds of thousands of dollars, and if you die early in retirement the ultimate payout (to survivor[s]) is paltry.

******************************************
So, seek revenge by living to at least 100.

Actually spouse survivor benefits are good depending on oprions chosen but end upon death of surviving spouse.

This ending upon death is exactly what makes pensions somewhat affordable and what makes it possible to keep paying the 100 year olds. They fund to average lifespan. It’s more efficient than individaul retirment savings where one must fund to age 100 just in case you get unluclky and live that long.

#190 Rob Ford In Rehab on 05.07.14 at 3:37 pm

#185 Ying Yang

Your helpful suggestion is like totally generous of you, man!

You are so busy, but you take the time to help another taxpayer. (That’s what I am about too, bro, even answering constituent calls today in rehab. Our pavement is in bad shape in the big city, and I have had two dozen potholes filled already today as well as dealing with a few crack things)

You Oriental people work like dogs. You work your hearts out. You are workers non-stop. You sleep beside your machines. That’s why you’re successful in life.

I went to Seoul, South Korea, I went to Taipei, Taiwan. I went to Tokyo, Japan. That’s why these people are so hard workers. I’m telling you, the Oriental people, they’re slowly taking over

Good for you for helping out :)

RF

#191 Godth on 05.07.14 at 3:38 pm

Repeat after me:
Frctional Reserve banking is a myth
Frctional Reserve banking is a myth
Frctional Reserve banking is a myth

Endogenous money creation is what’s happening
Endogenous money creation is what’s happening
Endogenous money creation is what’s happening

#192 Bargains everywhere on 05.07.14 at 3:56 pm

#178 happity on 05.07.14 at 2:01 pm

Happity does have a point. Banks and mutual fund companies actually do lend your stock regularly and also sweep the cash nightly to make some extra points of margin. Not really much of a risk to the client, though, and at least it helps the bottom line so they can keep paying their dividends.

#193 Mark on 05.07.14 at 3:58 pm

“Does anyone have data on how the sales mix was impacted during the 1990′s downturn or in the US meltdown? “

Pretty similar setup in the US meltdown as we see. In California, for instance, San Francisco and the higher end areas of Los Angeles, pretty much continued unabatedly flat or up. While volume and prices of everything else collapsed. Low-end was the domain of FTB’s and explicitly subprime — which saw the worst of the devastation.

This is what’s happening in the GTA/GVR right now. A few enclaves of the GTA continue to do reasonably well. But the rest has deteriorated quite a bit. Of course, since the transactional activity is mostly confined to the areas doing well, the Realtors can (dis)honestly claim that prices are still going up. Which is true, but the sales mix is vitally important.

There was a poster on the Redflagdeals forum, “PF4RedFlag” who brought a lot of real data to the table based on GTA transactions. But the trolling there by a few RE-industry insiders was completely over the top, and they got him, along with another individual more recently, banned. By simply overwhelming the hapless moderators with unfounded complaints.

#194 bill on 05.07.14 at 4:05 pm

#179 devore on 05.07.14 at 2:02 pm
”It is no secret tenant quality is declining as more marginal buyers are able to purchase. ”
I agree.
we have found it much more difficult to get a tenant that has a good credit history.
we have had apts that have not rented for a month or more.
[the apartment block I work for is situated in Kits in Vancouver between 4th ave and Broadway west of Arbutus.]

#195 Bottoms_Up on 05.07.14 at 4:09 pm

Another good example of where real estate agents cannot be held accountable, but where a good lawyer and/or survey would have been very useful.

Woman bought home with 2 driveways, and the useful (illegal) driveway has been torn up by the city (Ottawa).

http://www.ottawacitizen.com/news/Adami+Driveway+runs+afoul+year+bylaw/9812251/story.html

#196 sm_yyce on 05.07.14 at 4:26 pm

hipster update from calgary:

http://www.calgarysun.com/2014/05/06/inappropriate-behaviour-forces-closure-of-public-self-cleaning-toilets-in-east-village

turns out the hipster hangout of east village is in the news again.

#197 Johnny on 05.07.14 at 4:31 pm

#16 OttawaMike on 05.06.14 at 7:01 pm
Me confused by you again Turner.

On one hand you advise never purchasing real estate FSBO without the guidance of a realtor throughout the entire process.

Then for another post you write about how the cartel is manipulative and non transparent, misrepresenting the condition of properties and other nefarious activities.

How does one reconcile these two alter ego view points?

Why should any consumer ever trust anybody in the entire industry?

With used car salesman, it is perfectly acceptable to work around them through private sales so why is it any different with RE? Doesn’t a good lawyer assist in protecting your interests?

Me o good point… !

#198 TnT on 05.07.14 at 4:41 pm

#186 Londoner

Sometimes people can’t see the forest from the trees…

Toronto is to Canada as London is to UK as New York is to USA

There’s a reason why Toronto is the most sought after city in Canada.

#199 Halifax on 05.07.14 at 4:42 pm

This is a good one. Just ran into someone who has done fairly well with some rentals who just bought a pre-build condo in the north end of Halifax. It is 4 stories, which I believe makes a wooden construction code compliant; anything above that has to be cement and steel frame. I asked him what it was made of. He did not know. Put down $300K on something not put up yet and had no idea what construction method they were using.

#200 Londoner on 05.07.14 at 4:53 pm

#153 Doug in London, Ontario

London prices may also be in bubble territory.
_____________________________________________

It’s possible that London may be blowing it’s own property bubble, exacerbated by the gov’t help to buy scheme. But it’s not that easy to determine. Average prices are massively skewed by the top end. And, as always, there needs to be a trigger event to realise the risk.

#201 TO Renter on 05.07.14 at 5:00 pm

SFH – $150K
http://bit.ly/1mDBApH

2-bed condo for $30K
http://bit.ly/1fQc3uS

Just in case those #s looked odd, it’s monthly rental.

Mixing it up for variety.

#202 shawn on 05.07.14 at 5:04 pm

Endogenous?

GODth says:

Endogenous money creation is what’s happening

Speak english on this Board not latin.

Actually:

Spontaneous wealth creation is what’s happening
Spontaneous wealth creation is what’s happening
Spontaneous wealth creation is what’s happening

Question for all who care to think about it:

Are you getting your fair share?

Are you contributing your fair share?

#203 Vamanos Pest on 05.07.14 at 5:11 pm

#184 Ralph

Did you seriously just complain about public sector wages and benefits being frozen and high taxes in the same sentence?

#204 Bill Gable on 05.07.14 at 5:28 pm

This has been a very interesting few days.

I have lived in Vancouver, off and on, since 1974.

Anecdotal, but telling?

6 Families, I have known for years, have decided they have had enough and they have all moved. All in one week.

I am hearing this kind of thing about more and more people.

This place is becoming a Potemkin Village.

It’s O V E R for the RE mania in this burg.

If you don’t think Vancouver is precarious, catch this graph.

LINK http://tinyurl.com/oxztj8w

#205 TO Renter on 05.07.14 at 5:32 pm

#171 Buy? Curious?
Had to reread your post to spot the rollicking sense of good humor.

Since I’m not tied to a desk, and on a global clock, packing a few things for the noon escape tomorrow, so politeness demands that I return the favour of a traffic video
http://www.youtube.com/watch?v=MbIXSC63raY

Went to look up Arcade Fire. Not quite my taste, but at least Indie Rock is now added to the vocab.

#206 Old Man on 05.07.14 at 5:36 pm

You need not worry about R.F., as in rehab safely hiding in Tapalpa living in style. Once his lessons are over takes his dinner at El Centauro listening to the mariachi band and no beer for him, as is downing margaritas with his tacos. He has become the cantina’s star in training as stands on the bar to sing for the crowd under the protection of the Amazonas.

#207 aaron on 05.07.14 at 5:40 pm

#199 TO Renter on 05.07.14 at 5:00 pm

Obviously it’s a typo.

#208 saskatoon on 05.07.14 at 5:42 pm

#189 Godth

Bank of England endorses endogenous money, and control of money supply by private banks:

http://www.bankofengland.co.uk/publications/Documents/quarterlybulletin/2014/qb14q1prereleasemoneycreation.pdf

#209 Ralph Cramdown on 05.07.14 at 6:20 pm

#201 Vamanos Pest — “Did you seriously just complain about public sector wages and benefits being frozen and high taxes in the same sentence?”

Nope, I was trying to paraphrase the arguments of the useful idiots that are doing the work of the seriously monied class. My taxes are pretty low, and people richer than me are getting people poorer than me to fight amongst each other to ensure that my taxes (and those who earn even more, tax efficiently, than I do) stay low.

#210 shawn on 05.07.14 at 6:33 pm

Such Big Words you Have…

Bank of England endorses endogenous money…

**************************

maybe it should also define the term which that paper does not do.

Those who really understand a topic can explain in plain words.

The notion that money is created outside (exogenous to?) of the central bank is well known. those not in the know view it as evil.

It’s like thinking that humans breathing out CO2 is evil. It just is. Banks creat money becuase they give credit and Credit is transferable to buy things which means it is money. Nothing nefarious about it.

The money suppply never was and never will be constant as it expands as needed to serve the economy. Money’s purchasingg power tends to erode over time with infaltion (gasp!) and central banks keep that in check. It all just IS. Nothing nefarious whatsoever.

One does not NEED to undersand money creation in the economy. One NEEDS to undersand how to generate wealth for oneself. Get on with it.

#211 Johnny on 05.07.14 at 6:34 pm

If everybody had to pay 100% for houses, how much would they cost today?
Leverage eh, how canadian.
CMHC does not have to blow up for taxpayers to bo on the hook
Taxpayers already are financing this real estate fortune making gig for the wealthy with QE ( ie money printing ) with long term artificially low interest rates that are taxpayer financed.

#212 just ......wow !!! on 05.07.14 at 10:37 pm

“the last members of the middle class able to afford a decent lifestyle on two salaries, is grossly overpaid ”

That much I agree with Ralph…but entitled much? The civil service sucks the coins out of taxpayers pockets and you call them deserving? The civil service produce nothing…they just take…and take…and take while adding nothing to the economy or the well being of Canadians..

#213 Andrew Woburn on 05.07.14 at 11:57 pm

Sometimes it’s just better to rent your retirement home.

“British expats in Portugal face losing homes”

http://www.telegraph.co.uk/finance/personalfinance/expat-money/10810941/British-expats-in-Portugal-face-losing-homes.html

#214 Vamanos Pest on 05.08.14 at 12:22 pm

#207 Ralph

Thanks for the clarification.

My understanding of the issue you raise is that:

-while pension money is being contributed, it is tax deductible, and I thought even used RRSP contribution room. In this sense it’s very much (possibly exactly) like an RRSP

-since the contribution is tax deductible on contribution, it is in fact fair to tax as income when it is drawn (in the form of pension payments)

-the investments you’re referring to for the “haves”, if they are receiving the tax advantage of capital gains and dividends, are not in registered accounts and therefore got no tax deduction prior to original investment.

-so, in essence, are you not comparing the taxation on RRSP investment income to non-registered investment income. It’s not really an apples-to-apples comparison

(I could be wrong, I don’t have a pension, my information is from a close friend who works for the provincial government and tells me this is how her pension works)