The big news

SLEEP modified

Only 48 more sleeps until the big event in Ottawa. The first T2 budget will arrive in the midst of a mess. Oil at half the value most analysts expected. Tens of thousands of lost jobs. Alberta receding faster than an Oprah love handle. Bay Street in a funk. Most real estate markets stalled while housing goes ballistic in two others. Record borrowing. And soon, rivers of federal red.

That we get a deficit is a known. How big, is the question? But will the economy heal sooner by funding bridges and roads that take years to engineer? And if infrastructure were the answer, wouldn’t Japan be a paradise – where every hick hamlet has a shiny new seawall and a commuter train? But, as you know, the Japanese are so whacked they’re dropping interest rates to less than zero.

Which brings us to Meridian Credit Union and an issue Bill Morneau’s predecessor, Joe Owe, just couldn’t face. Rapacious bankers. Carnivorous lenders. The merchants of debt. And the buck sixty-nine mortgage.

Meridian’s the fourth-biggest CU in the country (after Vancity, Servus and Coast Capital) and is trying to build its rep on cheapo, short-term loans. So last Spring it shocked and awed with a one-year 1.49% fixed-rate mortgage, and this year has come out with the latest version – at 1.69%. That’s more than a full percentage point less than the current offering at the big banks, and even thirty or more basis points less than what Alvin the Mortgage Broker who works out of his Pontiac Aztek has to offer.

MERIDIAN

The Meridian deal also comes with prepayment privileges, letting you retire a fifth of your loan early, or increase your monthly by 20%. That’s for people who don’t actually understand what it means to borrow money for less than the inflation rate and think they’re smart. (They’re not.)

This move comes just weeks after the major chartered banks raised most of their home loan charges, and a short time after the Bank of Canada decided – despite the oil debacle – not to lower its trendsetting rate. Of course, as you know, it’s been less than two months since the US Fed pulled the trigger and possibly six weeks before it happens again. In other words, the credit union move has ‘Promotion’ written all over it, being designed to increase market share and prompt crazed, old, bearded bloggers to mention it. (Will never work.)

But this is a problem for the feds. Cheap money breeds more borrowing, which has led to asset bubbles in Toronto, and especially Vancouver. For example, YVR realtors announced Tuesday a 27.9% increase in the benchmark price for a detached house in that troubled town, to $1,293,700. Listings have dropped a little, demand’s increased and the cost of money remains absurdly low. So as prices hockey-stick higher, so does debt. Just a few days ago, for example, a new report emerged showing payday loan usage by BCers has increased 58%. Yikes. So 91% of all the houses in Vancouver may now be ‘worth’ more than $1 million, but some of the people living inside them routinely run out of money before they run out of month. For that you can thank the biggest mortgage payments in Canadian history.

Well, remember F?

The little pecker may have done a bunch of things wrong (like introducing 0/40 mortgages and agreeing to those insane GST cuts), but the former finance minister was smart enough to reverse course, then try to halt a mortgage race to the bottom. And that was when a bank had the nerve to unveil a 2.99% offering! Lately this cheeky credit union has halved that, and the government twiddles.

Strange days. Morneau looked like he understood the nature of housing risk when he upped minimum down payment requirements (in effect in two weeks), but the real culprit here is a shameless lending industry – guys to whom debt is an asset and all the risk goes to the taxpayers.

Given our dank economy, rates will stay in the ditch for some time to come. But not forever. Not even for a few years. Someone who can afford a house at 1.69% may not be able to cut it at 4%. Rates can move in months, yet mortgages are in place for decades. When the cost of eventually does rise, houses will wilt in the other direction – if a recession hasn’t done it first. The fact so many moisters today believe interest is some weird anachronism should keep Bill up at night. They remind of baby skunks. Cute. Armed. Lousy aim.

198 comments ↓

#1 NTH on 02.02.16 at 5:29 pm

May we get a Bandit Update?

#2 Canadian on 02.02.16 at 5:30 pm

“dank economy”

Do you know something about the weed legalization we don’t Garth??

#3 hogans heroes! on 02.02.16 at 5:31 pm

first!

#4 Kilt on 02.02.16 at 5:45 pm

You okay Garth. Few more typos than usual. Or maybe I just can’t read.

I noticed most fixed rates coming back down, but variables are still about a quarter point higher than they were in October

Kilt

#5 family beagle on 02.02.16 at 5:47 pm

My kid, second year electrical, used to be hyped to buy buy buy. After three years doing highrise and condo, and three months touring Europe looking at architecture says , no no no.
His 20 something professional friends are all no no no.
I’m getting a sense that the fresh crop of newbs that the govt is depending on to spend spend spend aren’t drinking the koolade. They are increasing anti-consumption. (21 yrs and his tfsa/rrsp are maxed). Half of them don’t even have driver’s licenses. Priorities are changing. Price support to follow them: Direction down. Give it a few years to see the societal change.

#6 Hairhead on 02.02.16 at 5:53 pm

First?

But nice to see you on top of things, Garth!

#7 Retired Boomer WI on 02.02.16 at 5:55 pm

He’s YOUR Federal Finance guy, Bill Manure-on (sorry, just rearranged the letters in his name-could NOT resist!).

So, with more Manure-on the pile of debt to worry about, what can the dude due now to reverse course?

Oh, that’s right, millennia’s never reverse course as they are NEVER wrong. Sure, go ask one see if they will ever admit to making a faux pas and reversing a decision. Few I have ever met, will expect perhaps their spouse whom they married just two years ago.

We shall see where this ends, but as fish spoil from the head this is beginning to smell.

In the meantime some of those Canadian REITS are looking tasty, especially purchased with US $$…

#8 Hairhead on 02.02.16 at 5:55 pm

Now, for an opinion: central banks and governments will NEVER be able to control their economies to the benefit of the majority of their citizens which adequate capital controls. When “money” meant “gold”, capital controls were not too complicated; now that “money” has been financialized into dozens of digital products, likewise dozens of new capital controls have to be invented to cope .

#9 Hairhead on 02.02.16 at 5:56 pm

Aargh! for “which”, read “without” as in “without adequate capital controls”.

#10 mark on 02.02.16 at 5:59 pm

First!

#11 Slow Canada on 02.02.16 at 5:59 pm

I agree with you Garth, of course, but it doesn’t appear that any Canadian politician or central bank governor will confront the problem anytime soon.

It looks like we are left to put our faith in Janet Yellen of the U.S. Fed to change the channel away from the era of ridiculous interest rates and runaway debt.

My fingers are crossed.

#12 Craig on 02.02.16 at 6:00 pm

“YVR realtors announced on Tuesday a 27.9% increase in the benchmark price for a detached house in that troubled town, to $1,293,700”

I’m hearing the phrase “house prices will always go up” far too often. Last time I heard this repeatedly was the Y2K tech bubble and we all know how that turned out.

#13 pinstripe on 02.02.16 at 6:01 pm

The policy makers will never admit that the zirp, nirp, QE is a failed experiment. non savers are rewarded and savers are punished. The global debt will be a killer.
Tax is the biggest destroyer of wealth.

the wet coast would be a basket case without the laundered and offshore money.

the politicians are talking with both sides of their mouth with policies like the rrsp, resp, tfsa esp when debt is the biggest promotion.

#14 Gen X on 02.02.16 at 6:08 pm

I cannot understand why the housing market hasn’t crashed yet. I wonder, what will be the tipping point? It’s coming that’s for sure and when it arrives it will be very, very messy. People must be crazy to buy in this market.

#15 waiting on the westcoast on 02.02.16 at 6:09 pm

Exciting times…

Overheard a couple of women discussing the housing market. One said hey husband suggested they sell and live somewhere out of country for a year or two and then come back. She said to her friend that she asked him what they would do with their furniture, etc. He said sell. She told her friend… “well, that’s not going to work.” So the two friends agreed she should stay in her place even if it’s going to go down….

Well – I am glad that Mrs. Waiting is pushing us to sell our furniture and take a year or two offshore. 7 months to go…

#16 Big Leafs Fan on 02.02.16 at 6:09 pm

First.
Sell your house NOW. Ask questions later…..

#17 Johnny D on 02.02.16 at 6:10 pm

Garth. Do you still stand by your earlier statement where you said to just ignore the market mess, travel to Cuba, and come back in March? Or should I come back in April now?

#18 joe on 02.02.16 at 6:15 pm

I don’t understand that some canadians are in denial……

if your dollar went south…………so your property is already 30% down just by the dollar……

No one outside the canada wants canadian dollar only US dollars , so that’s the reason that foreigners right now buying your particle boards because your main export “the particle board , insulation and cellar/basement” are already discounted by your proud loonie!!!!!

So you are loosing even if your house is payed….do you understand…..????
take some maple syrup and tea …:))))
What do you export that your dollar went south??? :)))

Most likely dirty oil and maple syrup…. no takers…:)

#19 common sense on 02.02.16 at 6:16 pm

What is this astronomical interest rate of 4% that you speak of? That’s unspeakable! 5-7 years after a big reset?

Alvin would never go that high.

Who’s talking up the markets tomorrow? Who’s turn is it? I think Billy boy should take a shot or maybe Angela…

#20 Dyugle on 02.02.16 at 6:17 pm

Hi Garth
could you do a blog post on the business cycle where euphoria marks the top of the market. Here in Vancouver we are there baby, with a group of “take my seminar” guys offering free lunches to people to take seminars on real estate investing.

#21 Tuxedo on 02.02.16 at 6:17 pm

Upping the downpayment a bit doesn’t really change anything. How about no more CMHC mortgage insurance? Can’t come up with 20% down, too bad. Either pay a private insurance company or rent and save (although sadly many people my age no longer know what saving is).

This would also stimulate the economy by forcing banks to lend to businesses and innovate to generate profits, instead of comfortable earning billions from taxpayer backed mortgages to people who shouldn’t even own houses.

#22 Shlong Zinger on 02.02.16 at 6:17 pm

I drive an Aztek!

#23 westcoaster on 02.02.16 at 6:20 pm

So how many more bullets do the feds have left in their armamentarium? We know about cutting rates, extending mortgage terms (?back up to 40 again?) both of which would have a transient moderating effect but what else is conceivable d’ya think Garth?

#24 LL on 02.02.16 at 6:20 pm

Poor dog..

I guess his owner cannot pay the mortgage anymore…and they have to move…it’s seriously affecting him.

Prozac for both of them!

#25 Godth on 02.02.16 at 6:20 pm

Forget skunks, they’re too common. Bring on the wolverine.
https://www.youtube.com/watch?v=ZGUctzseJj0

It’s all broken all over, and over – everywhere. Capitalism is too big too fail and too big to bail out.

#26 Garth is my enabler on 02.02.16 at 6:21 pm

For god sake remove CMHC from financial equation.

Does T2 really think he leverage all
those losses on the rest of us?

I did not borrow
I owe nothing to noone
I am NOT paying for this mess through any form of taxes.

i will bug out of here.
let them eat their Aga stoves and granite counter tops.

#27 tundra pete on 02.02.16 at 6:23 pm

Thank god for CMHC. I can’t stand the thought of one of our trend setting banks losing money if the economy goes negative and the house horny go underwater and can’t service their debt, let alone each other.

I remember well the sleepless nights when I bought my first house for $74 000 @ 8%! Had trouble wrapping my head round it. But of course it paid off big time when I sold it 3 years later for $153 000. Thought I had won the lotto. It will be a sad tome for many who are holding these $400 000 plus mortgages and rates creep up. There is gonna be some hurtin units.

#28 IKnow on 02.02.16 at 6:25 pm

Million Dollar house owner needs pay day loan? Maybe very very few do, but a lot more likely by basement suite migrant dwellers from ALTA

#29 45north on 02.02.16 at 6:26 pm

For example, YVR realtors announced on Tuesday a 27.9% increase in the benchmark price for a detached house in that troubled town, to $1,293,700.

I heard 30% increase. I also heard 50% July 2015 to July 2016. So I’d say that Po’ Bill better do something now.

#30 Blacksheep on 02.02.16 at 6:28 pm

“Just a few days ago, for example, a new report emerged showing payday loan usage by BCers has increased 58%. Yikes. So 91% of all the houses in Vancouver may now be ‘worth’ more than $1 million, but some of the people living inside them routinely run out of money before they run out of month.”
—————————————————–
A hovel tenant until the owner decides to bulldoze and build sure, but some broke ass payday loan takin dude, is not buying/owning a million $ Van shack.

This example of wealth disparity only supports the theory that $’s pushing up RE prices, are clearly coming from some source, other than, the 70K working class Cattle.

#31 Active on 02.02.16 at 6:33 pm

Anyone look at those CREB numbers for February? Cowtown is on the rebound! Lol

#32 joe on 02.02.16 at 6:34 pm

Yesterday…long …long…long time ago…when people were uneducated and without iphones we had good solid houses . The walls were thick , wood was solid, mortar was a mortar and brick. The cellar was used for food storage… The roof had thick ceramic plates

Today we have tiny tiny walls with 2×4 or 2×6 filled with unhealthy insulation….., you can hit the wall with your fist and is on the other side of the room….
They build unfinished cellars for people/canadians who can’t live without them….., thousands of stairs inside…

and canadians are buying that shit ….not questioning….

Now the whole country is in trouble…

Let them pay for their lack of education and not questioning status quo!!!!!!
We need idiots to pay for it…..keep buying

#33 I am the Babbler on 02.02.16 at 6:41 pm

“Someone who can afford a house at 1.69% may not be able to cut it at 4%.” – Garth

——————————————-

Yeah, yeah. Well, 4% will never happen again. Not until we have a financial collapse and start all over again.

#34 neo on 02.02.16 at 6:41 pm

Let’s see if the US bond market is finally siding with Garth. Nope.

1.86% 10 Year
2.86% 30 Year

That is flashing either a recession ahead and instability in the financial system that is manifesting. What it is not signalling is a healthy economy where they expect rates hikes any time soon.

#35 GenXer on 02.02.16 at 6:42 pm

He’s YOUR Federal Finance guy, Bill Manure-on (sorry, just rearranged the letters in his name-could NOT resist!).

So, with more Manure-on the pile of debt to worry about, what can the dude due now to reverse course?

Oh, that’s right, millennia’s never reverse course as they are NEVER wrong.

Bill Morneau is a baby boomer not a “millennia”. Why isn’t he smart enough to figure this out?

#36 Prairieboy43 on 02.02.16 at 6:45 pm

My kid, second year electrical, used to be hyped to buy buy buy. After three years doing highrise and condo, and three months touring Europe looking at architecture says , no no no.
His 20 something professional friends are all no no no.
I’m getting a sense that the fresh crop of newbs that the govt is depending on to spend spend spend aren’t drinking the koolade. They are increasing anti-consumption. (21 yrs and his tfsa/rrsp are maxed). Half of them don’t even have driver’s licenses. Priorities are changing. Price support to follow them: Direction down. Give it a few years to see the societal change.

Millenial Rights. http://youtu.be/DtonKfWw2JY

Good Luck.
PB43

#37 M on 02.02.16 at 6:54 pm

Are green bonds a good investment and why are so many international investors interested in green bonds?

#38 Godth on 02.02.16 at 7:02 pm

#35 Prairieboy43 on 02.02.16 at 6:45 pm

That took long enough. The future simply can’t reflect the past anymore, but we’ve known that for decades. Infinite growth, business as usual, is a death trap.
https://www.youtube.com/watch?v=SVW8ih-519k

#39 John on 02.02.16 at 7:03 pm

#5 family beagle

Yes you are absolutely right. Everybody I know in their early and mid twenties has no interest in owning a house. They all want to live in cheap apartments, bike to work, travel, save for early retirement. It’s a new culture. Living cheap is cool. I’m 32 and my friends all want to show off to each other with big houses and new vehicles but the younger generation has no interest in living this lifestyle. Will be interesting in a few years when everyone expects this new crop to buy their houses at inflated values. Not going to happen!

#40 sockeye sam on 02.02.16 at 7:07 pm

I see the national news in Canada has a lot of coverage on that 2.4. million dollar 33 x 120 on the 4400 block w. 14th ave. over here in west point grey. It’s probably already sold in a bidding war.The realtors are getting desperate for listings they don’t have any inventory. At least once a week I’ll have a hand written letter dropped in my mail box asking me to sell.One guy is even offering to pay for my moving.He’s claiming he’s looking for a lot for his friend that’s a builder. Here are some of his other offers.

Market value offer.
No open houses.
No signs.
No looky loos.
No subject to financing.
No building inspections.
Quiet sale.
Quick sale if you wish.
$100,000.00 deposit within a few hours.
No commission.

He claims he’s mailed 80,000 of these flyers out Canada Post.

Such a deal! If there are any doubters out there please instruct me on how to post the letter. I’m not to good at that stuff.

#41 Snowboid on 02.02.16 at 7:12 pm

Here in Phoenix, median sale prices are up 115% since 2010, but still are below 2005 levels.

All of our Canadian neighbours are back, turns out the exchange rate wasn’t the reason for their late arrivals, but other family or health issues.

Speaking of Canadians, this coming weekend is the annual South Mountain picnic – where a few thousand Canucks (of the near 130,000 that live here) gather to share bowls of poutine, get pics with Mounties in red serge and let their kids play in snow or try their hand at curling.

http://canadianpicnic.com/

Just to remind us of the great white north, the last couple of days have brought Arctic air south (only 13C today) but back up to 30C next week.

#42 Plasma nozzle on 02.02.16 at 7:14 pm

Hey Garth. Not sure you’ve noticed but since the start of the year the comment section has really gone bonkers!! You using negative rates to attract them all to your free blog?

#43 Chris 11 on 02.02.16 at 7:15 pm

Houses in Canada are for the most part dirt cheap. Anyone can buy and own one. There are a few notable exceptions to this, mainly Toronto, Vancouver, and parts of Alberta that were effected by temporary high salaries caused by the oil boom. In the rest of this country, you can still buy three bedroom homes on huge lots for under 200K, so long as you don’t mind where the home is located.

The States is the same. There are expensive pockets, like New York’s upper class neighbourhoods, nice areas of Los Angeles, and the like. And you can also find very cheap areas, like parts of Detroit, for example where you can buy a three bedroom house for $750.00 US.

The world as we know it is not about to fall apart. But people think it is. So what to do? In the words of Warren Buffett:

“We simply attempt to be fearful when others are greedy and to be greedy only when others are fearful.”

Right now you can buy a number of Canadian REITs for less than book value. And we’re not talking 98% of book value. People are selling these things for 70% of BV. And they pay dividends of up to 11%.

People are dumping good oil companies that are suffering the temporary effects of the price slump.

People are giving their houses away in Calgary.

One man’s crisis is another man’s opportunity.

#44 West Coast Tree Dweller on 02.02.16 at 7:17 pm

Its time to get serious about pulling out the chair that supports the entire rickety edifice of YVR and GTA housing valuations – the CMHC needs to be corralled, now.

Especially here in Vancouver, the banks and CUs allow people to make reckless mortgage bets on a daily basis, with the understanding that the CMHC will make these institutions whole when individuals are unable to pay off these mortgages.

But in the end, these institutions are simply fooling themselves – when the Ponzi scheme that is the Vancouver real estate market finally implodes, the number of people walking away will simply overwhelm the feeble protection provided by CMHC.

This will leave the Canadian government with the same bitter choice that the US Feds had to make in 2009 – save the banks that are “too big too fail”, and, I would assume, toss the smaller CUs to the wolves.

At this point in the market, the CMHC now serves the same purpose as free liquor at a casino – designed to keep the punters from thinking about the terrible risks they are incurring, and keep on feeding their money into the beast.

#45 Metaxa on 02.02.16 at 7:19 pm

Forgive me, I ramble.

Folks seem hung up on mortgage rates when it really is the terms and conditions that prevent you from beating the bank (so to speak).

My first mortgage wasn’t as the CU’s weren’t allowed to place mortgages so they had “loans on real property” which certainly did not have all the bank favourable terms and conditions on them.

Anyway, Mulroney fixed all that and when he allowed the banks to do insurance, buy trust companies, etc he tossed a bone to the CU and Insurance companies by allowing them into the amortization racket.

The above is not vetted for historical accuracy but rather general accuracy, like a politicians accuracy.

Folks should look into the Australian Credit Union model of paying down their mortgages. Components of which exist in Manulife’s ManuOne product. Investors Group (remember when they were Investor’s Syndicate…better name, no?) will do the thing for you too but like Manulife you have to buy a lot of their product first.

You actually do not have to sell your home to get rid of a mortgage if your conditions are right (most mortgaged Canadians, the vast majority, have the right conditions).

I do not work in the financial field, never have, have no product to peddle for me or anyone but:

I’ve seen 20 years of amortization left on a 25 year mortgage reduced to 8. I’ve seen multiple instances (relatives, friends, me) of amortizations reduced by half.

Source:
When I actually worked it was in the restaurant business. Independent, owner operated. Banks don’t loan in that segment, you mortgage and re-mortgage your house.

Friendly accountant tossed the Aussie CU method my way years ago…it works.

Any accountant can set things up…with any mortgage lender and it involves purchasing no other financial products.

Unless Garth tells me to go for it…that is it. Be happy with permission to get into details, on line or via email.

Now…back to regular gas bag trolling, crapping on Mark, alluding to how rich we all are and so on…

#46 bertvl on 02.02.16 at 7:21 pm

Meridian’s the fourth-biggest CU in the country (after Vancity, Servus and Coast Capital)

I hate to contradict you, but you appear to have forgotten Desjardins, who are bigger than all four of the above combined… unless you don’t count Quebec as part of Canada, which is not quite your style ;)

Good point, but actually Desjardins Group is a cooperative, not a CU. — Garth

#47 Conspiratard on 02.02.16 at 7:23 pm

Not to worry Garth, a plan is already in motion.

As the Zika virus becomes a worldwide pandemic, the incidence of microcephaly will grow exponentially.

All those cute people with little brains means the real estate market should keep going up for decades to come, and thousands more will even become realtors.

Unfortunately for you, Garth, microcephaly in Canada also means the Conservative party will gain even more supporters, who will then vote Stephen Harper back into power. He’ll probably try to finish you off for good!

#48 joe on 02.02.16 at 7:24 pm

To clean up the house we need canadian dollar @50cents and housing market crash…..

the other solutions are just make situation worse….

#49 old gringo on 02.02.16 at 7:25 pm

I still do not get it.
$1,200,000+ for a sh$t box in rainy Vanc.

Below is an example of what you get south of the border for less.
A waterfront 7000sq ft mansion.
http://www.chapalamls.net/properties/price-reductions/tuscan-villa-1580

#50 Joe on 02.02.16 at 7:33 pm

If you don’t think infrastructure spending will help the what do you suggest? More tax breaks and subsidies for big oil?

#51 Panhead on 02.02.16 at 7:34 pm

.#32 joe on 02.02.16 at 6:34 pm

Hey joe … try to follow along here …

Moose knuckle, beaver castor, maple syrup jar …
We aren’t as dumb as you think we are.

Wasn’t too hard now was it?

#52 Godth on 02.02.16 at 7:42 pm

#46 Conspiratard on 02.02.16 at 7:23 pm

Unintended consequences? Eat your margarine as it’s better than butter; feed your children baby formula because breast feeding is an evil animal act. Life is always better through science.
http://www.counterpunch.org/2016/02/02/pandoras-box-how-gm-mosquitos-could-have-caused-the-zika-virus-outbreak/

#53 Rob on 02.02.16 at 7:45 pm

Given our dank economy, rates will stay in the ditch for some time to come. I like to read between the lines….or just read the lines

#54 Godth on 02.02.16 at 7:45 pm

#49 old gringo on 02.02.16 at 7:25 pm
https://www.youtube.com/watch?v=QUYKSWQmkrg

#55 Aggregator on 02.02.16 at 7:47 pm

Any where is Meridian Credit Union getting all its funding from?

Meridian CU Ltd. NHA MBS Outstanding

Dec 2012 $888,533,517
Dec 2013 $922,078,572 (+3.78%)
Dec 2014 $1,105,097,785.22 (+19.85%)
Dec 2015 $1,459,812,608.18 (+32.10%)

CMHC…

#56 VanMan on 02.02.16 at 7:50 pm

The rate increase isn’t coming…not anytime soon. We’ve all been waiting for logic and economic policy to to take hold for what seems like an eternity. But, it is different now. The game has changed. Too many outliers and too much at stake to let people ruin themselves by rectifying the excess leverage and allowing the fallout to take hold. It’s not going to happen.

Look at how much intervention has taken place in the past decade to prevent this from happening. It can’t stop now and it wont.

#57 joe on 02.02.16 at 7:57 pm

#56 Either way has to happen VAn Man…….!!!

one by lowering your loonie to 50cents !

or increasing interest rate!!!

#58 Smoking Man on 02.02.16 at 8:00 pm

#42 Plasma nozzle on 02.02.16 at 7:14 pm
Hey Garth. Not sure you’ve noticed but since the start of the year the comment section has really gone bonkers!! You using negative rates to attract them all to your free blog?
…….

Don’t be such a woss, only so many times you can say, rates are going up, no negative, real estate booming, no wait crashing. Markets up Markets down.

On slow economic news days don’t you feel lucky this idiot as the lefties like to call me is around to entertain.

This clip is dedicated to Big Dipper.

https://www.youtube.com/watch?v=dcXoEd8IF0g

#59 Daisy Mae on 02.02.16 at 8:01 pm

“So 91% of all the houses in Vancouver may now be ‘worth’ more than $1 million, but some of the people living inside them routinely run out of money before they run out of month.”

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

If they can’t meet their monthly costs now, how are they going to handle property taxes coming due? July isn’t far off….

#60 wallflower on 02.02.16 at 8:02 pm

Did that sad, sorry canine have too much beer and pizza? My chien loves the stuff but I would never over indulge him like that.

#61 Godth on 02.02.16 at 8:03 pm

#56 VanMan on 02.02.16 at 7:50 pm

Eventually reality will bite back, it always does. Can you inhale forever? Of course not, there has to be a sigh of relief. The madness of the crowd will turn very sobering when the music stops and Icarus hits the ground. Damn though, did we fly high or what? Icarus, Icarus are you alive?! We need a medic! He died doing what he loved to do.

#62 Daisy Mae on 02.02.16 at 8:07 pm

#4: “You okay Garth. Few more typos than usual. Or maybe I just can’t read.”

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

He’s probably at his wits end….on a few fronts.

#63 old gringo on 02.02.16 at 8:12 pm

#54 Godth on 02.02.16 at 7:45 pm
#49 old gringo on 02.02.16 at 7:25 pm
https://www.youtube.com/watch?v=QUYKSWQmkrg

Godth,
You really need to get out more and travel a bit.
There are millions of Canuks and Mericans living south of the border.
Most are still alive and very well thank you.

#64 Drill Baby Drill on 02.02.16 at 8:14 pm

#47 Conspiratard
Go sexually intercourse yourself.

#65 Daisy Mae on 02.02.16 at 8:15 pm

#42: “Hey Garth. Not sure you’ve noticed but since the start of the year the comment section has really gone bonkers!!”

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

Desperation is starting to surface….

#66 Drill Baby Drill on 02.02.16 at 8:20 pm

Dear Pathetic Blog;
On BNN today they had a financial analyst explain the Meridian CU’s game plan and they will most likely end up with 60% of new mortgages under this latest marketing blitz be the 5 year 2.6% rate. Many will not qualify for the cheap rate.

#67 Drill Baby Drill on 02.02.16 at 8:24 pm

Today’s photo is of my dog Petro. It is a t the moment that he realised oil just fell again below $30/bbl USD.

#68 LL on 02.02.16 at 8:25 pm

What is certain is that times are uncertain!

#69 Investx on 02.02.16 at 8:28 pm

“Given our dank economy, rates will stay in the ditch for some time to come. ”

But, but… bond market forces!?

Hello Japan.

#70 joe on 02.02.16 at 8:29 pm

#65 Daisy Mae
Desperation is starting to surface…….but canadians are going under surface — to beloved 1milion (-30% on a dollar house) cellars/basements… :))))

#71 Godth on 02.02.16 at 8:32 pm

#63 old gringo on 02.02.16 at 8:12 pm

Oh Jaysus! Another literalist; “let the dead bury their own dead.” It’s not like I didn’t give you enough clues, fuggetaboutit.

You really are an old gringo!

#72 hope & ruin on 02.02.16 at 8:41 pm

#58 Smoking Man on 02.02.16 at 8:00 pm

https://www.youtube.com/watch?v=dcXoEd8IF0g
_________________________________

lol I can’t believe I just watched 8 mins of that.

#73 Bram on 02.02.16 at 8:44 pm

Centuries of history have taught us that house prices follow inflation.
(https://en.wikipedia.org/wiki/Herengracht_index)

If it is going to be different this time, and YVR prices keep going up, not coming down again, I am afraid we will be seeing these monstrosities in Canada:

http://archive.fortune.com/magazines/fortune/fortune_archive/1990/05/21/73567/index.htm

Our grandkids are screwed.

Bram

#74 The big news - Realties.ca on 02.02.16 at 8:45 pm

[…] Source: http://www.greaterfool.ca/2016/02/02/the-big-news-2/ […]

#75 Everton on 02.02.16 at 8:46 pm

#46
Meridian’s the fourth-biggest CU in the country (after Vancity, Servus and Coast Capital)

I hate to contradict you, but you appear to have forgotten Desjardins, who are bigger than all four of the above combined… unless you don’t count Quebec as part of Canada, which is not quite your style ;)

Good point, but actually Desjardins Group is a cooperative, not a CU. — Garth

Actually, all CU’s are cooperatives. Cooperative FI’s. See link;

http://www.cucentral.ca/SitePages/TheCreditUnionDifference/CooperativePrinciples.aspx

Understood, but the DG is also a bank, a trust, an insurance company and wealth manager, as well as a deposit-taking and lending coop. In a league of its own. — Garth

#76 CREIT on 02.02.16 at 8:50 pm

Garth, my wife quit her job after 9 years at U of T and now works for the province.
Should we transfer her pension to her new employer or transfer it into a self directed LIRA?

it’s not much about 120,000. she’s 35?

your thoughts

If you are given the chance to control your own money, take it. — Garth

#77 Freedom First on 02.02.16 at 8:51 pm

#39 John

Yes. Until the early and mid 20’s guys get married and give their balls to their wife. You’re seeing it in your 30’s friends. Nothing new here.

#78 Bottoms_Up on 02.02.16 at 8:52 pm

#14 Gen X on 02.02.16 at 6:08 pm
————————-
Depends which market you are talking about, and depends who’s buying.

Look at the big picture– there are many places across Canada that are affordable. Then, in your less affordable cities, you have boomers and early to mid gen Xers that have a lot of equity, so selling a $500,000 home and buying something more expensive may not change their mortgage much.

#79 Smoking Man on 02.02.16 at 8:55 pm

#72 hope & ruin on 02.02.16 at 8:41 pm
#58 Smoking Man on 02.02.16 at 8:00 pm

https://www.youtube.com/watch?v=dcXoEd8IF0g
_________________________________

lol I can’t believe I just watched 8 mins of that.
…..

If keep this up the Wynne brown shirts will pay me a visit in the middle of the night.

Lucky for me I own a libral slaying plasma nozzle. .

Uber Man in the clip stole my shtick.

Got a feeling who ever produced it is a blog dog..

#80 old gringo on 02.02.16 at 9:02 pm

#54 Godth on 02.02.16 at 7:45 pm
You are too funny.
Plenty of opinions once again I see.
Now be a good boy and take your yellow pill and call it a night.
You are probably the reason your neighbours are moving south to get away from you.

#81 Retired Boomer WI on 02.02.16 at 9:06 pm

Like the AD says…

HURRY!!
This extremely low rate is only available for a short time!

Yup,… Teaser Rate……. 12 months…. THEN WHAT??

An awful lot can happen in 12 months… or didn’t they teach them that? History can be SO Cruel.

#82 Sideshow Rob on 02.02.16 at 9:13 pm

Reckless lending in Canada won’t stop until some non metrosexual with actual balls in the federal government forces the banks to eat their own cooking. No more cmhc banker’s welfare.

#83 Shirley valentine on 02.02.16 at 9:18 pm

#77 Freedom First on 02.02.16 at 8:51 pm

#39 John

Yes. Until the early and mid 20’s guys get married and give their balls to their wife. You’re seeing it in your 30’s friends. Nothing new here.
**

Now if they were a real set… like those of the great studly beast know as smokey man.. well hello.. come to mama

#84 Retired Boomer WI on 02.02.16 at 9:24 pm

#35 genXer

Never remember actually seeing a picture of Bill Manure-on.

He’s a “Baby Boomer” ? Must be a rather late Boomer, post 1960? Sheesh… most “Boomers” I know ARE retired, or expired! Time flies when UR having fun, kids!

#85 too much debt on 02.02.16 at 9:44 pm

#27 tundra Pete. .

Pete, don’t worry about people with 400k mortgages…I live in Vancouver and know many people with 800k and higher mortgages. I know one with over a million dollar mortgage that they used to buy what basically amounts to a tear down. It is a two bedroom one bathroom house, yet he said he is relieved to finally be in the market. This shit is about to get interesting.

#86 Yuus bin Haad on 02.02.16 at 9:54 pm

Poor old Bill. We were at a seance tonight where he tried to call up F’s spirit and got Mackenzie’s Mom instead – HA!

#87 acdel on 02.02.16 at 10:02 pm

This way off topic; well not really, just watched a very interesting video on how Ron Paul was cheated out of Presidency. It’s reminiscent of what Garth went through by trying to serve the people. Interesting watch for all you Americans. It proves how corrupt the whole system is.

https://www.youtube.com/watch?v=o_WBo4sfmi4

#88 Big Dipper on 02.02.16 at 10:05 pm

#134 Smoking Man on 02.02.16 at 8:32 am

#130 Herb on 02.02.16 at 6:58 am
#117 Big Dipper,

your mistake was assuming SM has a brain as well as a keyboard.
……………..

Making pals with socialists I see.

What did Hitler and Stalin have in common. What did the Z stand for in Nazi.

——————————————-

Been over 90 years since Adolf added the words “National Socialists” before the existing “German Workers Party” and here some demented dingbat thinks that National Socialists are related to the NDP.

National Socialism was your kind of stuff dipstick. Full of manly men protecting their women from inferior beings. I picture your scrawny neck in a brown shirt goose stepping against the evils of socialism.

But once more I provide you with the attention you so desperately crave. I’m stopping that now. But in parting I’ll give you my return dedication of the things you love so much.

https://www.youtube.com/watch?v=xZuZShxJq8M

#89 Smoking Man on 02.02.16 at 10:14 pm

#83 Shirley valentine on 02.02.16 at 9:18 pm
#77 Freedom First on 02.02.16 at 8:51 pm

#39 John

Yes. Until the early and mid 20’s guys get married and give their balls to their wife. You’re seeing it in your 30’s friends. Nothing new here.
**

Now if they were a real set… like those of the great studly beast know as smokey man.. well hello.. come to mama.

This may disappoint you Sherly. But on my wedding day. The balls where chopped . Clean, precise. In my home my voice that of unick.

But I’m not always home.

This was hallarious we had some old friends that we don’t talk to anymore , chic fight between the wives.

The dude a beauty. But totally no guy code.

He’s blog dog fan. He and his vengeful trophy wife came to stir to witness our meet up. Just so she would have further amunition to hurt my wife even more.

No one out flanks the man The Smoking Man.

He will be scratching his head when he reads this.

Guy code Steve. .grow a set.

#90 Rich Young on 02.02.16 at 10:20 pm

Here is another JAW dropper. Are Calgarians retards?

FEB MTD Sales 2015=10 2016=38 +280.00%
Active Listings 2015=4,812 2016=5,064 5.24%
Median 2015=363,000 FEB 2016=419,250 15.50%
AVERAGE 2015=412,450 FEB 2016=434,045 +5.24%

My wife wants to buy back into the market after we sold and moved from BC 4 years ago. We have been patiently waiting and reading this blog. Fuel prices are at 2003 levels and home listing keep coming on at the same prices 2014 and 2015 … not even retreating to 2010 levels after a year of layoffs and low oil.

I’m going to go crazy.

#91 Smoking Man on 02.02.16 at 10:25 pm

#88 Big Dipper on 02.02.16 at 10:05 pm

What don’t you understand, I’m not a con, hell, no one chirped harpo more than me on here.

I’m individualistic, something omitted from your training manual. You can’t fight me and win. It’s a galactic thing.

Don’t go man, sorry for slaying you. I love debate . And I don’t hate you either. Passionate debate is where we learn from each other.

It’s the only thing that can save humanity from it self.

#92 Bottoms_Up on 02.02.16 at 10:38 pm

#39 John on 02.02.16 at 7:03 pm
————————-
You’re 32…..give the “younger” generation 10 years and come back here and tell us what they’re doing.

#93 Bottoms_Up on 02.02.16 at 10:42 pm

#76 CREIT on 02.02.16 at 8:50 pm
————————–
Or, give it to a panel of experts with the province and not have to worry about it for the next 25 years.

#94 Mark on 02.02.16 at 10:54 pm

“Median 2015=363,000 FEB 2016=419,250 15.50%
AVERAGE 2015=412,450 FEB 2016=434,045 +5.24%”

Median grew dramatically faster than the average. This is about as clear cut of a sign of a shifted sales mix as any.

Fuel prices are at 2003 levels and home listing keep coming on at the same prices 2014 and 2015 …

As reported in a post of mine the other day, a friend was advised by a local Realtor that anything less than 20% off 2013 pricing probably wouldn’t get much interest in Calgary. And even at 20% off, they’re still not seeing much interest. So while housing is still dramatically overvalued, prices definitely are not the same as 2014/2015.

#95 Leo Trollstoy on 02.02.16 at 10:54 pm

who’s gunna lend us money when we go negative?

#96 Housing will not go down on 02.02.16 at 11:01 pm

Admit it Garth, in spite of all the economic doom and gloom, housing has not come down much if at all. Even if we get more doom and gloom, the central bank will simply cut rates further which will drive mortgage rates down further. And when interest rates cannot go lower, they will simply revert back to lower downpayments and longer amortization periods. As a result, housing prices will not come back to earth for many many years to come. Everyone you believed your messages and because of that refrained from buying a house since five years can now only wonder how they could have been so dumb.

#97 Greyhelm on 02.02.16 at 11:06 pm

Bull Mastiff. Yeah. We have one of those. Jake. Even bigger (judging by the paws). Scares the hell out of strangers, for about 5 seconds until they figure out that he is just a giant suck.

#98 Smoking Man on 02.02.16 at 11:07 pm

#92 Bottoms_Up on 02.02.16 at 10:38 pm
#39 John on 02.02.16 at 7:03 pm
————————-
You’re 32…..give the “younger” generation 10 years and come back here and tell us what they’re doing

Video games.

#99 Bottoms_Up on 02.02.16 at 11:08 pm

Surface and ocean Temperature charts that every good blog dog should see:

http://gu.com/p/4gab7

There is also a chart that shows the accuracy of model predictions for temperature (spoiler alert, modelling can and does work)

#100 Smoking Man on 02.02.16 at 11:20 pm

#96 Bottoms_Up on 02.02.16 at 11:08 pm
Surface and ocean Temperature charts that every good blog dog should see:

http://gu.com/p/4gab7

There is also a chart that shows the accuracy of model predictions for temperature (spoiler alert, modelling can and does work)
..

It’s time you paid a visit to a rub and tuge. Serously this is what coonsumes your consiounes.

I’m saying you go for a 1/2 Asian and 1/2 German..

Been there done that.. you listening Steve.

#101 Mark on 02.02.16 at 11:21 pm

“who’s gunna lend us money when we go negative?”

Nobody. Which is why deflation looks an awfully lot like strong inflation from the POV of the bond market in non-sovereign obligations. Go read my post yesterday for a discussion of what ends up happening.

#102 mike on 02.02.16 at 11:26 pm

Payday loan increased 58% y-o-y? Doubtful.

#103 Shirley valentine on 02.02.16 at 11:31 pm

#89 Smoking Man on 02.02.16 at 10:14 pm

#83 Shirley valentine on 02.02.16 at 9:18 pm
#77 Freedom First on 02.02.16 at 8:51 pm

#39 John

Yes. Until the early and mid 20’s guys get married and give their balls to their wife. You’re seeing it in your 30’s friends. Nothing new here.
**

Now if they were a real set… like those of the great studly beast know as smokey man.. well hello.. come to mama.

This may disappoint you Sherly. But on my wedding day. The balls where chopped . Clean, precise. In my home my voice that of unick.

But I’m not always home.

This was hallarious we had some old friends that we don’t talk to anymore , chic fight between the wives.

The dude a beauty. But totally no guy code.

He’s blog dog fan. He and his vengeful trophy wife came to stir to witness our meet up. Just so she would have further amunition to hurt my wife even more.

No one out flanks the man The Smoking Man.

He will be scratching his head when he reads this.

Guy code Steve. .grow a set.
**

“not always home”.. praise the god of nectonites!

I need to find this senica place!!… wow we could have a real time blog cat fight! The mrs smokey man seems a formidable challenge i’m betting though.. hmm.. to de-ball a smokey man must be no easy task

This place could do with some hot spice – an awful lot of crabby dogs some days I tell ya ….flinging turds from the far left

#104 Philburt on 02.02.16 at 11:33 pm

89 Smoking man..
HILARIOUS!

#105 SWL1976 on 02.02.16 at 11:33 pm

#91 Smoking Man – One of your finest. I particularly like…

I’m individualistic, something omitted from your training manual.

And

Passionate debate is where we learn from each other.

It’s the only thing that can save humanity from it self.

#99 Bottoms_Up – Thanks for the link. I look forward to having a closer look tomorrow. At first glance I see Exxon and the Koch brothers names involved

#106 Big Dipper on 02.02.16 at 11:54 pm

#90 Rich Young on 02.02.16 at 10:20 pm

Here is another JAW dropper. Are Calgarians retards?

FEB MTD Sales 2015=10 2016=38 +280.00%
Active Listings 2015=4,812 2016=5,064 5.24%
Median 2015=363,000 FEB 2016=419,250 15.50%
AVERAGE 2015=412,450 FEB 2016=434,045 +5.24%

My wife wants to buy back into the market after we sold and moved from BC 4 years ago. We have been patiently waiting and reading this blog. Fuel prices are at 2003 levels and home listing keep coming on at the same prices 2014 and 2015 … not even retreating to 2010 levels after a year of layoffs and low oil.

I’m going to go crazy.
———————————————–

You’re not going crazy. The numbers that you’re looking at are for one day only – February 1st. Seems there must have been an unusual number of deals that closed yesterday. Three times as many as last year (feb1, 2015).

This does not indicate a trend. As the month progresses it will put the month to date numbers back to normal.

#107 Vanreal on 02.03.16 at 12:15 am

Rates are going nowhere for a long long long time. Savers will be punished and debtors will be rewarded. Sfh prices will continue to rise in 416 and YVR. Sorry to those of you who’ve waited patiently for prices to drop. Not gonna happen anytime soon.

#108 prairie person on 02.03.16 at 12:30 am

Here’s what was on the news. Yes, i know it is realtor hype but houses in my neighbourhood are getting sold within days of going on the market. Somebody is buying them. “Last night we told you about the sudden spike in house sales on Vancouver Island to start 2016.

Total real estate sales are up a whopping 53 per cent over this time last year.”
Sure would be nice to know what to believe. Are Vancouver sellers really moving to Victoria? They’re certainly no moving to the smaller islands. Prices on those are down as much as fifty percent. You can pick up a gorgeous place with acerage for 275-400. Half price off asking. Lot of would be sellers hoping that Van sales will ripple to Victoria and ripple out to the small islands.

#109 pwn3d on 02.03.16 at 12:38 am

Was watching an English documentary on the rich, came across this comment from Peter Rees, former head of planning at the City of London:

‘We have a housing bubble in London that is fuelled by an almost limitless swathe of international capital. There’s no end to that supply. It’s constantly being generated from Russia, and China and the Middle East….Investors in the residential real estate market in London is perceived even better than gold bricks, which you have to hide in a gold vault and you can actually keep an eye on them. But inside these things are just containers for this capital that you would otherwise put in a bank vault, which is why I refer to these as safety deposit boxes.’

So… is he racist too, or this only exists in London and NY and Canada is seen as too risky to park money?

#110 waiting on the westcoast on 02.03.16 at 12:48 am

#94 Mark on 02.02.16 at 10:54 pm says “Median grew dramatically faster than the average. This is about as clear cut of a sign of a shifted sales mix as any.”

Or it could mean that more really expensive homes were put up for sale much cheaper but still above the median thereby maintaining the average but moved the median up…

It could mean almost anything unless you have the raw data to see which data points caused the change in the avg/median #s. Also, it is comparing AOL of 2015 to one month which is not a great way to compare data points.

#111 Rich Young on 02.03.16 at 1:07 am

Calgary has a ballooning inventory as everyone listing keeps following the previous listing instead of listing at a price that will attract buyers. I know many qualified to buy that refuse to pay these prices. So, why won’t sellers offer out the home at a price that allows renters to buy and not pay much more than rent? This is so strange. Yet, we continue to hear about growing inventory. It is not that more listings are flooding but that everyone keeps listing at pie in the sky prices. What a retarded market. Supply and demand is out the window it seems.

#112 macroman on 02.03.16 at 1:13 am

Hey joe, easier for Canucks two spot stupid then a Yank to loose there EBT payed too kasino.

#113 macroman on 02.03.16 at 1:20 am

Last

#114 Delusional on 02.03.16 at 1:31 am

IMO, the delusional ones are people who think people are buying $1.3 million dollar Vancouver homes with 5% down. Local incomes wouldn’t be able to afford the monthly payment!

…foreign money inflows…. the taboo topic.

#115 Delusional on 02.03.16 at 1:40 am

Canadian Border Services knows the truth about whats causing YVR runaway prices…foreign money!

http://www.canadianrealestatemagazine.ca/news/cbsa-blames-money-laundering-for-vancouver-market-193917.aspx

#116 WUL on 02.03.16 at 1:57 am

Hah. 11:45 MST in Ft. Mac in the new rental. Just finished bozzing it up with the new roomies and am retiring for the night. Three young bucks who operate heavy steel at an oil sands mine. Too young To remember Jarri Kurri. All of that is beside the point.

Tomorrow Suncor’s Q4 earnings results come out.

Joe, without basements in Canadian houses, where would kids learn to shoot hockey pucks???

#117 Normal Distribution Statistics...Mark on 02.03.16 at 3:13 am

#94 Mark

When the Median is that different to the Average, then you do not have a Normal Distribution of data or a Bell Shaped curve. You then have a skewed distribution.

Thus, you enter the realm of distributions to capture that data such as the Beta Distribution – which makes for some messy calculations and why mathematical methods such as the Monte Carlo Simulation were invented to explore the breadth of those messy calculations.

In effect, if the distributions of data are skewed enough, you then result in some gross errors at estimating the Median, Average/Mean and Standard Deviation.

You could alternatively use methods such as the Z test, Chi Square, Kolmogorov-Smirnov to compare those different distributions and you provide no evidence that you have performed this math to arrive at your pronouncement.

Please stop quoting statistics when it is clear that you have not done the math to support your assertions nor it seems, appreciate what you are saying.

#118 Defend Canada on 02.03.16 at 4:24 am

Some Canadians still stupid and naive to think that ‘Green’ means something to do with saving the planet, it doesn’t.

Green advocacy against Canada’s energy industry is all about Americans running a successful propaganda campaign against Canadian competition so that Tides, Green Peace, the Rockefellers, Soros, Buffet and American Hedge Fund managers make a lot of ‘green’ keeping Canada out of the market…while they drill drill drill their way to huge profits. None of which will go to funding schools or food banks in Canada. Support Green Peace…you’re a dupe of corporate America…vote Liberal…you’re too stupid to realize that T@ has the intelligence of a gnat…so says the British press..

http://business.financialpost.com/fp-comment/its-the-same-old-tar-sands-campaigner

#119 CREIT on 02.03.16 at 6:49 am

#76

Thx Garth.

#120 pudgiepop on 02.03.16 at 7:14 am

“Alberta receding faster than an Oprah love handle.” Garth

Garth this is extremely rude and insulting……to Alberta!

#121 gut check on 02.03.16 at 7:28 am

Meridian, eh?

Had never heard of them but they sounded shady… so I looked at the Board of Directors.

Lots of interesting characters:

http://www.meridiancu.ca/meridian/about/board-of-directors/bios/Pages/default.aspx

#122 Stoopid Idiot on 02.03.16 at 7:45 am

“The Fed Suspended The Laws Of The Market In Order To Save It” – What Happens Next

That the Fed has been boxed in by unleashing destructive monetary policies to “fix” decades of prior policy mistakes, is something we have been warning about since our first day. And, with every passing day that the Fed and its central bank peers pile up error upon error to offset prior mistakes, the day approaches when this latest bubble, which some have dubbed it the “central banks all-in” bubble, will burst as well: Friday’s shocking announcement of NIRP by the BOJ just brought us one step closer to the monetary doomsday.

http://www.zerohedge.com/news/2016-01-31/fed-suspended-laws-market-order-save-it-what-happens-next

More uninformed alarmist crap from the zero guy. — Garth

#123 Miranda Hobbs on 02.03.16 at 7:50 am

We may not see 4% mortgage rates for a long time if maybe never but if you think that owing that house and condo with lots of debt is going to be a cakewalk then your screwed.

The real problem is not paying higher mortgage rates in the next decade or so but the way your debt binged house horny Canadians will feel the pain.

Keep adding up your property taxes, water bills, electricity bills, gas and home heating bills, home insurance bills, CMHC premiums, repairs and maintenance, H.S.T., garbage fees and other municipal, provincial, federal tax increases coming.

Look at water, electricity, property taxes alone, up 75% to 100% in 10 years. By the time you look at this you will have no income and cash flow left and many are feeling it already with big increases in payday loans and high interest mortgage second and third mortgage loans in Ontario, B.C. to start.

In 25 years, you made no real money because you have spent minimum 1.25 million in just these property taxes, utilities, insurance, other costs expenses for a $800,000 house. By the way, you still have to pay for food, clothing, car insurance, internet, phone, car payments, car repairs and maintenance, probably credit card and line of credit payments and other expenses, costs of living too.

This does not even include your illusion of a cheap mortgage of $3,800 a month for the next 300 months based on an $850,000 house. This with the belief that it will be paid off but multiple times refinancing is a disease these days.

Math and planning for life’s finances is a foreign concept these days and it is so old fashion, right!

#124 Stoopid Idiot on 02.03.16 at 7:51 am

:Christmas is a time when kids tell Santa what they want and adults pay for it. Deficits are when adults tell the government what they want and their kids pay for it.[Richard Lamm]

#125 Miranda Hobbs on 02.03.16 at 7:53 am

Oh by the way, don’t forget about those great monthly condo fees that average $475 a month here in Toronto.

Vancouver and other overvalued real estate markets are much worse. They will add up to $300,000+ in 25 years.

Good luck with that great math!

#126 Chris 11 on 02.03.16 at 7:54 am

RE: I still do not get it.
$1,200,000+ for a sh$t box in rainy Vanc.

Below is an example of what you get south of the border for less.
A waterfront 7000sq ft mansion.
http://www.chapalamls.net/properties/price-reductions/tuscan-villa-1580

This is exactly what I’m talking about. Location. Look at the map. This is not located in an ideal place. It is in a smaller city in Mexico.

You can also have a similar mansion, for a similar price, on a similar (but slightly colder lake) in Ontario.

Real estate gets its value from three things: Location, Location and lastly, Location. That is it.

If you want to speculate in real estate, you are speculating that the chosen property’s current location, which should be crappy and low value, is going to experience a remarkable change, making it worth more. If you are right, you make money.

#127 Herb on 02.03.16 at 7:56 am

#99 Bottoms_Up,

a money quote from your Guardian link:

… there’s an industry that has grown up around climate science denial and its epicentre is the network of US-based “free market” conservative thinktanks

What else is there to know about climate change denial? Who pays for, and who profits from denial?

“Defend Canada” @118 take note.

#128 Retired Boomer WI on 02.03.16 at 8:08 am

#91 Smoking Man

Actually, one of the most lucid posts I have read in quite a while. Actually, you are an interesting “teacher” though I know how you despise that monicker.

None the less ‘teach us” you do in a rather unconventional way, which for me, is always the better.

#129 SWL1976 on 02.03.16 at 8:23 am

#100 Smoking Man

#96 Bottoms_Up

Surface and ocean Temperature charts that every good blog dog should see:

http://gu.com/p/4gab7

There is also a chart that shows the accuracy of model predictions for temperature (spoiler alert, modelling can and does work)
..

It’s time you paid a visit to a rub and tuge. Serously this is what coonsumes your consiounes.

I’m saying you go for a 1/2 Asian and 1/2 German..

Been there done that.. you listening Steve.

—————————

Smoking Man,

You speak of good debate, but when it comes to climate change your call is about as good as your call on Bombardier. Simply yelling out schooled isn’t going to work on me. You’ll have to do much better. Maybe even debate with some credible facts.

Now, my theory on climate change deniers is that they took the conspiracy theory one step too far. You see they think they are being whitty by thinking they can’t be fooled by the machine. Big oil and big business, they are so in on the denial racket that it’s becoming stunningly obvious. They want you to think man made climate change is a conspiracy and therefore perpetuate the notion that it does not exist. Therefore they get to keep the oil business alive and well funded, all while funding the other side of the coin to further tax us into oblivion with ‘sustainable development’ and Agenda 21, or Future Earth, or whatever they want to call it.

It’s obvoius they are playing both sides to keep us bickering and fighting amonst ourselves, all while the profits never stop flowing up, up, up

#130 Soothsayer on 02.03.16 at 8:35 am

It won’t be interest rates that brings down housing. It will be a recession, job losses, job insecurity and lower wages. Interest rates will never go up again for decades in my honest opinion. It’s impossible given the level of debt everyone is in.

Moving into a cashless society will also contribute.

#131 neo on 02.03.16 at 8:36 am

Globe and Mail:

Toronto’s housing market is kicking off 2016 in fine form, but the areas surrounding the city are chalking up even more impressive gains.

Sales in the Greater Toronto Area rose 8.2 per cent in January from a year earlier, to 4,672, according to statistics released today.

Average prices climbed 14.1 per cent, while the MLS home price index, which is deemed a better measure, showed an increase of 11.2 per cent.

But the suburbs far outstripped the city in terms of price gains, the Toronto Real Estate Board numbers showed.

“The difference in the annual growth rates for the MLS HPI and average price was largely due to a greater share of high-end detached homes sold in the regions surrounding the city of Toronto this year compared to last,” the group said.

The average price for a detached home in the city, or 416 area code, rose 11.6 per cent, but surged 20.9 per cent in the 905 area.

Of course, such a house still went for more in the city, at an average $1.06-million, compared with the 905’s $783,565.

The price gains for semi-detached houses and townhomes were also greater in the 905, though those for condos trailed.

Among other interesting tidbits in today’s report:

There were 181 sales in the GTA of detached homes valued at between $1-million and $1.25-million, more than 100 in the $1.25-million to $1.5-million range, 68 from there to $1.75-million, and 36 from there to just shy of $2-million.

Sales above $2-million numbered 84.

“It is clear that the handoff from 2015 to 2016 was a strong one,” said TREB president Mark McLean.

“Buying intentions are strong for this year as households continue to see home ownership as an affordable long-term investment,” he added.

Toronto and Vancouver are the two Canadian cities most often cited for frothy behaviour.

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

Now what Garth, even homes over $1 million are surging. The 905 is actually outpacing the 416 now. I don’t think this has much to do with the down payment rules kicking in.

One day you and I will be right. Except I think we are headed for a crash at this point, not a slow melt. So much financial illiteracy out there and people “afraid” of the stock market. The only thing that will stop this is massive job losses because interest rates are going nowhere.

#132 Dups on 02.03.16 at 8:37 am

@#18 joe

You should do your homework before you write like an ignorant…
We are not perfect, but we are a good country, and we will come back again.
Canada produces and exports a lot more goods than your little ignorant hateful brain can process.

#133 -=jwk=- on 02.03.16 at 8:55 am

We’re on a 5year 2.05vr, which is pretty close to inflation…and we are pre-paying $275/mo. Why?

In five years we expect to renew at 5%, and want to keep the same payment.

If rates do go to 5%, we can reduce our payment by $275 a month. If they go any higher we’re still OK as we are used to the higher payments. And if they are less than 5%…well, that’s a happy outcome to and we’ll just keep going.

#134 Soothsayer on 02.03.16 at 8:59 am

Looking for Layoff Stories.
Please share yours!

Many many layoffs right across the board the past 6 months. Discussions with friends and family has led me to this conclusion but so far I haven’t read a whole lot about it in the mainstream media…just the big ones.

I highly doubt the unemployment rate is what it is considering all the stories in Southern Ontario.

#135 wtf on 02.03.16 at 9:07 am

How can you blame the banks or lending institutions? Debt is not crack, it’s not mandatory and perfectly legal. The fact people to use leverage at such low rates is actually pretty smart, no? Leverage and Debt is only a toxic combination when combined with margin call + liquidity. Here is a wake up call, that doesn’t exist in Canada and no bank would use even if they could

As long as you drink your piss for food and can make those monthly payments with helps of students and whoever living in your basement, nobody cares. The bank will be happy.

So realistically for years you have been writing daily, however the catalysts you are pointing to simply will never cause a housing decline nationwide.

1. Government Employees are the highest paid in Canada vs other G7 and vs private counterparts.

2. The monthly payments and debt service ratio’s continue to be the lowest in Canada ( yes debt is high) but it doesn’t cost much to manage. Canada doesn’t have variable reset teaser mortgages.

3. T2 is building momentum on TV daily by bringing sad stories to Canadians ( yes this is planned) Why? He is about to Helicopter 10B plus into the economy. He will make it rain in Canada with Cash. This money will find it’s way into the economy keep people employed.

4. EI extensions are coming for Alberta and other projects to nowhere to get Oil patch workers going again.

5. The Canadian dollar has had amazing reversal while continues to be at lows. This shows faith in the loonie outside of commodity meltdown

Prices of homes will come down not because of Oil (which is at lowest and prices are highest). REIT’s, Prefs and other div teaser stocks have got crushed, how much are people going to have in those going forward? IF REIT’s are a predicator of whats about to happen in real estate (not a single one has cut a div) then it will be still 3 to 4 years.

The best thing you can do is give real advice.

If you own a home, get a loan against it and invest in Prefs and reit’s to pay yourself AFTER paying your debt

If you are young and complaining – get in line, this “I can’t afford anything” is happening around the world. The earth created a bunch of MBA, Art Grads, etc between 23-33 who paid for expensive education and the world become the internet of things eliminating many of the jobs you could fill. Focus on creating the next Uber.

People are working longer to feed the house lust, this means job mobility will continue to suffer. If you have a job, don’t be shy to use those knee pads to keep your job.

Yes, a dump is 2.4M in vancouver, however the area is surrounded by homes 5M +. In bridle path or manhattan this would make sense, Point Grey is the same for Vancouver. This has been left out of the story.

How many people that come to your website actually have a debt problem? Most people have money and are pissed they missed a housing boom. Don’t worry, it will sort it self out, but blaming financial institutions is like blame the drug dealer – you can arrest him, but someone will replace him in under 5 minutes to feed the demand.

#136 Noel on 02.03.16 at 9:31 am

http://www.slideshare.net/ayan604/ownership-patterns-of-single-family-homes-sales-on-the-west-side-neighborhoods-of-the-city-of-vancouver-a-case-study

HAM proven pretty definitively.

#137 Bat Flipper on 02.03.16 at 9:43 am

I don’t get it, If you won the housing lottery and have a house that is worth more than a million from gains, then why wouldn’t you sell and move somewhere cheap and live off the cash?

For example, living in Van? Got a house you bought for cheap and gains have brought it up to 1.5M. Why not sell and move to Aldergrove and buy a place for 500K or less and live off a million.

#138 Mark on 02.03.16 at 9:44 am

“Please stop quoting statistics when it is clear that you have not done the math to support your assertions nor it seems, appreciate what you are saying.”

*sigh*. When the median changes much faster than the mean, it is very obvious that the sales mix has changed. With the limited data quoted, I offered no further analysis of the situation, other than to point out that there was a strong likelihood that the Realtors’ average (mean) transactional price was heavily influenced by a shift in the market segments they were operating in (high end vs. lower-end), rather than actual appreciation on individual samples.

Not sure what point you were trying to make with the rest of your message, other than some lame attempt to ‘impress’ me with statistical terms, nearly all of which I am quite familiar with, but almost none of which have any relevancy here whatsoever.

#139 Alberta Ed on 02.03.16 at 9:50 am

Fear not! Sunny Boy T2 is coming to Edmonton today and he’s Here to Help.

#140 Mark on 02.03.16 at 9:53 am

“Canadian Border Services knows the truth about whats causing YVR runaway prices…foreign money!”

Sure, but not in the way that people might think. The CBSA appears to be quite concerned about currency *outflows* from Canada, and has thus increased its inspections at the airports accordingly. Monitoring for the undeclared currency of foreigners who have sold Canadian RE and are using such to prop up their failing ventures back home (including in China).

As research I quoted yesterday indicates, even when foreigners are involved in purchasing Canadian RE, they usually do so with large amounts of leverage. With foreign economies in so much distress, its no surprise that some may be selling and/or re-mortgaging Canadian property in an effort to keep their businesses afloat (much like many wise Canadians in the oilpatch are selling their houses at top dollar to load up on distressed oilpatch assets!). I think people have this rather mistaken view that every foreign business, particularly in China, is the epitome of a success story, cranking out infinite amounts of wealth for their owners. Nothing really could be further from the truth.

#141 Rational Optimist on 02.03.16 at 9:54 am

I know that the credit unions have some unique rules being provincially regulated as they are (for instance, if I recall correctly their loans do not need to open after five years, and at least in Ontario they are restricted to seven-year terms). But do their borrowers not have to qualify for the posted rate? At Meridian, that’s 4.79%.

At least at real banks, my understanding is that a significant number of people who show up wanting the cheap adjustable rate mortgage they saw advertised on the tee vee are told they unfortunately do not qualify at the posted five year rate of 5%+ so cannot be sold the sub-2% one-year. But, paradoxically, they can borrow at the real five year rate of 3% (or whatever it is).

I believe that few people who go to Meridian actually wind up with this 1.69%. It’ss a bait-and-switch. But, if you can get it, good deal I guess as inflation’s running higher than that. It’s a shame they won’t lend to you at that rate to start a business.

#142 maxx on 02.03.16 at 9:57 am

Politics of oil……expensive, messy and the investment landscape nightmares are made of.
Call it what you will, but self-cannibalization to prop up dividends is well underway –
How long will this go on for? How low will oil go?

http://www.bloomberg.com/news/articles/2016-02-02/bp-ceo-says-debt-can-rise-to-sustain-dividend-during-oil-slump

#143 Smoking Man on 02.03.16 at 10:02 am

129 SWL1976 on 02.03.16 at 8:23 am

I don’t want to pull you away from your religious beliefs when it comes to climate change. You can water ski on lake bull shit to your hearts content.

You get them young enough you can shape a young human brain to believe black is white, and white is red.

We have an entire young generation that has been schooled to believe without question what science says is always correct. You just got to be authoritative, speak with conviction, I call it teacher talk and you own their minds.

Exhibit A:
Years ago an epic battle took place, the two smartest men in the world were duking it out their theories.

Tesla vs Einstein.

The long and the short of it, If Ether exists Tesla is right, if it doesn’t then Einstein is right.
Way back in 1887 they did an experiment, Michelson–Morley experiment, technology primitive at best at that time.

The results were in. No Ether; Einstein gets the trophy. Einstein clearly said, that if Ether existed my entire theory of relativity would be wrong.

Fast forward, years later the US Airforce replicated the test with modern technology, BOOM Ether exists. What do you do now?

http://wakeup-world.com/2014/12/13/the-virtual-aether-empty-space-gets-an-upgrade/

How do you pull back from this one? It would de-legitimize the entire educational science complex.

Better to shut up, and get more funding for Cern.

The universe is shrinking, not expanding, expansion is an optical illusion.

Dr. Smoking Man
Ph.D. Hedonomics.

#144 Why Not on 02.03.16 at 10:03 am

If fixed rates aren’t going to go up for the next year, what is wrong with renewing at a 1 yr clip at 1.69?

#145 Knight Rider on 02.03.16 at 10:09 am

WTF

Correct you are!!

#146 jess on 02.03.16 at 10:22 am

Wells Fargo & Co said on Wednesday it would pay $1.2 billion to resolve some civil claims related to its Federal Housing Administration (FHA) lending program, primarily between 2001 and 2010.

The U.S. Department of Justice sued Wells Fargo in October 2012, saying it failed to report more than 6,000 loans that did not meet requirements for insurance under the FHA, and failed to properly review early payment defaults

#147 fancy_pants on 02.03.16 at 10:23 am

Knee jerks register 3.3 on Richter scale. Any tremors felt in Canada may be F rolling over. RIP. RE prices won’t.

#148 jess on 02.03.16 at 10:36 am

European and U.S. negotiators finally agreed a data pact on Tuesday to replace the Safe Harbour framework used by over 4,000 firms to transfer Europeans’ data to the United States, that was outlawed by a top EU court last year.

safe harbour “rebranded” as the EU-US Privacy Shield.

http://europe-v-facebook.org/PS_update.pdf
http://qz.com/608158/against-all-odds-a-new-eu-us-data-privacy-deal-has-been-announced/

#149 crowdedelevatorfartz on 02.03.16 at 10:49 am

@#39 John
“Yes you are absolutely right. Everybody I know in their early and mid twenties has no interest in owning a house. They all want to live in cheap apartments, bike to work, travel, save for early retirement. It’s a new culture. Living cheap is cool…..”
+++++++++++++++++++++++++++++++++++

I really dont think this is a “shocker”.
The majority of “20 somethings” have either just finished university and have massive debt already or are highschool grads working at “McJobs” that pay squat.
We wont even talk about the spiraling Canadian economy and the shrinking job market.

“Living cheap is cool”.
Total BS. Living cheap is a requirement is more like it.

Wait until they’re in their 30’s with a “house horny” wife and kids…….
They’ll be mortgaged to the hilt and wondering where their “freedom” went.

#150 crowdedelevatorfartz on 02.03.16 at 11:02 am

@#136 Noel.
Fascinating presentation.
And from politically correct David Eby no less.
I didnt think he had it in him.
It’s a shame the govt hasnt bothered to generate or publicize studies such as this.

#151 Smoking Man on 02.03.16 at 11:18 am

Follow up on Ether from my earlier post if you don’t want to read the long text in my link

https://www.youtube.com/watch?v=g_loyzL9Wi4

#152 Mark on 02.03.16 at 11:24 am

“http://www.slideshare.net/ayan604/ownership-patterns-of-single-family-homes-sales-on-the-west-side-neighborhoods-of-the-city-of-vancouver-a-case-study

HAM proven pretty definitively.

Not really.

https://www.biv.com/article/2015/11/controversial-foreign-ownership-study-about-money-/

“There is a public perception that mainland Chinese homebuyers are buying Vancouver houses with cash, but in the properties Yan studied this was not the case: 82% of the properties in the November 2 study had a mortgage, while 69% of mortgaged properties held mortgages from three banks: HSBC, CIBC and RBC.

So people of “Asian” ethnicity being significant participants in high-end Vancouver RE isn’t really all that debateable (after all, they make up a significant portion of Vancouver’s demographics). But a significant chunk of, if not most of the actual ‘money’ is Canadian. Hence, “HAM” is not proven definitively, and the theory about significant numbers of foreign cash buyers has been pretty much completely disproven.

#153 JimH on 02.03.16 at 11:27 am

#136 Noel on 02.03.16 at 9:31 am
http://www.slideshare.net/ayan604/ownership-patterns-of-single-family-homes-sales-on-the-west-side-neighborhoods-of-the-city-of-vancouver-a-case-study

“HAM proven pretty definitively.”
==================================
You have to be kidding me!
Definitive? Based on names? Not citizenship? What a lazy-assed ‘study’.

At my US citizenship ceremony there were over 70 participants of Asian origin; the largest contingent. (we were all introduced by name and country of origin)

Those with “Anglicized” names were very much in the minority; perhaps 10%! Yet we were all now naturalized ‘Americans’, having been residents of the USA for a minimum of 4 years and 9 months. Those with “Anglicized” names were indistinguishable from those with traditional names.

The study you referenced was based on a huge assumption. It is not at all ‘definitive’, and could in fact be ‘deceptive’!

#154 Chris on 02.03.16 at 11:27 am

Still think the US of A will be raising rates more this year? I think odds are 50/50 at best. Rates will change, but the pace of change will be very slow, so all this doomer talk about people in 2 years being unable to afford their mortgages is silly. Every month that goes by, those mortgages get a little smaller, people earn a little more each year – end result is the vast majority of people will be just fine, a small percentage will have to really buckle down and not get the next icrap device or scale back the vacation, and a few people who should not have owned real estate will lose their homes, as it always has been.

#155 cramar on 02.03.16 at 11:50 am

#40 sockeye sam on 02.02.16 at 7:07 pm
I see the national news in Canada has a lot of coverage on that 2.4. million dollar 33 x 120 on the 4400 block w. 14th ave. over here in west point grey.

———–

Saw that on the CBC National last night. Gone viral on social media they said. Wondered if this Pathetic Blog was the key to starting the contagion?

Anyway they showed an Asian couple touring the house, and I think they said she was from or had money from China. She spoke excellent English and stated that they have been getting flak for HAM. She said we are just trying to buy a house in the area.

To the RE agent there who said that “people are just jealous because they cannot afford the house,” I hope when the bubble collapses, she is funds gainful employment knitting sweaters. Jealous my arse! Normal people don’t get jealous over some poor misfit that thinks they just HAVE to live there and buy a $2.4 million dump!

#156 Shlong Zinger Extraordinaire on 02.03.16 at 12:00 pm

#143 Smoking Man on 02.03.16 at 10:02 am

129 SWL1976 on 02.03.16 at 8:23 am

I don’t want to pull you away from your religious beliefs when it comes to climate change. You can water ski on lake bull shit to your hearts content.

You get them young enough you can shape a young human brain to believe black is white, and white is red.

We have an entire young generation that has been schooled to believe without question what science says is always correct. You just got to be authoritative, speak with conviction, I call it teacher talk and you own their minds.

Exhibit A:
Years ago an epic battle took place, the two smartest men in the world were duking it out their theories.

Tesla vs Einstein.

The long and the short of it, If Ether exists Tesla is right, if it doesn’t then Einstein is right.
Way back in 1887 they did an experiment, Michelson–Morley experiment, technology primitive at best at that time.

The results were in. No Ether; Einstein gets the trophy. Einstein clearly said, that if Ether existed my entire theory of relativity would be wrong.

Fast forward, years later the US Airforce replicated the test with modern technology, BOOM Ether exists. What do you do now?

http://wakeup-world.com/2014/12/13/the-virtual-aether-empty-space-gets-an-upgrade/

How do you pull back from this one? It would de-legitimize the entire educational science complex.

Better to shut up, and get more funding for Cern.

The universe is shrinking, not expanding, expansion is an optical illusion.

Dr. Smoking Man
Ph.D. Hedonomics.
**
Heart surgeon by morning, quantum physicist by afternoon, Dr. of hedonism by night (he sure lights up Shirley’s world it seems), part time alien fiction writer, all day full time billionaire forex trader.. and in his spare time he endlessly pisses of teachers and commies just for the fun of it.

#157 Not A Realtor on 02.03.16 at 12:01 pm


#49 old gringo on 02.02.16 at 7:25 pm

I still do not get it.
$1,200,000+ for a sh$t box in rainy Vanc.

Don’t want to sound like a realtor, but location, location, location.

You’re comparing real estate from a city in Mexico with a city in Canada. See where the problem is?

#158 Mike in Edm on 02.03.16 at 12:01 pm

Knowing what we’ve heard about all the layoffs in the past year in Alberta (esp Calgary), and the EI and severance running out soon, I really do think that house prices will finally crack in a month or 2. I’m sure most people trying to sell right now are being told to ‘tough it out till the spring’ as that’s traditionally the busy home buying time. But spring will come, and when there’s still no buyers (for a number of reasons), that’s when we’ll start to see the really aggressive price drops b/c many people will HAVE to sell by then.

If they are unemployed they have 4 options on how to pay their mortgage…
1) EI – eventually runs out
2) Severance – eventually runs out
3) Skip mortgage payments (this only works for a few months)
4) Tap into retirement savings, and we all know how little people actually have any savings

Calgary (and Alberta) home owners are running out of options on how to keep their homes. I bet the majority of them would gladly dump their house if they could break even, but anyone in the last 5 years won’t be able to.

#159 Mike on 02.03.16 at 12:04 pm

Garth, Can you direct me to one of you articles regarding the CMHC. I recall you have pointed to the dangers to them if the bubble pops but there are people who believe it is rock solid and nothing bad could happen to the CMHC (or us tax payers).
Thank for you tireless work and sense of humour.
Mike

#160 Shawn on 02.03.16 at 12:19 pm

Wells Fargo Settlement – What of It?

#146 jess on 02.03.16 at 10:22 am
Wells Fargo & Co said on Wednesday it would pay $1.2 billion to resolve some civil claims related to its Federal Housing Administration (FHA) lending program, primarily between 2001 and 2010.

The U.S. Department of Justice sued Wells Fargo in October 2012, saying it failed to report more than 6,000 loans that did not meet requirements for insurance under the FHA, and failed to properly review early payment defaults

***************************************
And what is your point? Is it that an enormous bank with mortgages that number in the millions got documentation wrong on 6000?

Are you highlighting the penalty of $200,000 per loan as an example of heavy handed government behavior here? Is this government extortion?

Are you suggesting that the penalty is some attempt to save face by the government?

It’s hard to know what your point is because you did not give one.

In any case, Wells Fargo is only booking a charge of $134 million for this because it had already long ago booked litigation provisions. It’s 3 cents a share.

What investment action might you recommend?

#161 TurnerNation on 02.03.16 at 12:20 pm

Slanty semi alert. And “unicked” guys. Hope they like home reno and repair, coming home after a long day on a single income; no social life, paunch setting in. Why?

These old stock houses are from another era.

http://www.thestar.com/business/real_estate/2016/02/03/torontos-east-end-has-the-hottest-real-estate-in-the-city.html

A recent listing, a three-bedroom semi at 106 Woodmount Ave., sold in six days for $681,700, more than $80,000 over asking. Ing-Gilbert, who grew up around the Danforth, said the area is often the last refuge for affordable family homes for many in the city.

Most of the bidders for the home west of Woodbine Ave. were first-time home buyers, she said, or young couples looking to upgrade from a condo.

“I think every single woman was pregnant,” Ing-Gilbert said.”

#162 TurnerNation on 02.03.16 at 12:29 pm

Credit unions making a push in Toronto.
Meridian opened branch Wellington St W/Simcoe.

One outfit opened branch on trendy King St w at base of new condo.

#163 pwn3d on 02.03.16 at 12:36 pm

I was wrong about the spring market in YYZ going to be hot again, the winter market is hot, the spring will be insane.

#164 SWL1976 on 02.03.16 at 12:45 pm

#143 Smoking Man

129 SWL1976

I don’t want to pull you away from your religious beliefs when it comes to climate change. You can water ski on lake bull shit to your hearts content.

———————————

I have no religious beliefs when it comes to climate change. With all things I study I try to keep an unbiased opinion about the subject and go with what I understand and my observations of the world around me. I trust stories of people who live off and have a close connection with the land and little to no connection to big oil or big business. I grew up on a farm in Southern Ontario and have always paid close attention to the weather and growing seasons. I have worked in the Arctic, and have spent that last 4 years working in Northern Alberta while living on the west coast. I have lived on the wet coast for almost 20 years and much prefer the outdoors to being in a smoky casino. I think I have a pretty good understanding of the climate and weather patterns here in Canada.

On top of that I have been observing and studying geoengineering for almost a decade and have personally witnessed the effect this practice has on the local environment.

I care not for religion.

So water ski on lake bull shit all you want the tide is rising anyways

#165 Investorz on 02.03.16 at 1:08 pm

U.S 10 year treasury yield is back to 1.85%.

Here’s what we didn’t and couldn’t know: the world is scared running away from risk and buying U.S treasuries. This pushes interest rates down, even in the United States where the economy is O.K.

As the median TSX stock is down 20% and looking weaker every week, people will stay away from investing in it, and recommend their kids to buy a bigger house instead.

We’ll see but it’s looking like low rates for much longer. If in doubt look at U.S bank sector trend.

#166 Bottoms_Up on 02.03.16 at 1:15 pm

#143 Smoking Man on 02.03.16 at 10:02 am
—————————————————–
Sorry my friend, you are making the biggest scientific mistake possible: jumping to conclusions without a single supporting fact.

#167 S.Bby on 02.03.16 at 1:33 pm

Jobs growth continues to be strong in the USA:

WASHINGTON – U.S. businesses added a solid 205,000 jobs last month, lifted by robust gains in services and construction and extending a streak of steady hiring, according to a private survey. The data suggests that layoffs and weak hiring are confined to the oil and gas drilling and manufacturing sectors. “Outside of that, job growth is very strong,” Zandi said.

#168 Steerage Bilge on 02.03.16 at 1:54 pm

#163 SWL1976 on 02.03.16 at 12:45 pm

#143 Smoking Man

129 SWL1976

I don’t want to pull you away from your religious beliefs when it comes to climate change. You can water ski on lake bull shit to your hearts content.

———————————

I have no religious beliefs when it comes to climate change. With all things I study I try to keep an unbiased opinion about the subject and go with what I understand and my observations of the world around me. I trust stories of people who live off and have a close connection with the land and little to no connection to big oil or big business. I grew up on a farm in Southern Ontario and have always paid close attention to the weather and growing seasons. I have worked in the Arctic, and have spent that last 4 years working in Northern Alberta while living on the west coast. I have lived on the wet coast for almost 20 years and much prefer the outdoors to being in a smoky casino. I think I have a pretty good understanding of the climate and weather patterns here in Canada.

On top of that I have been observing and studying geoengineering for almost a decade and have personally witnessed the effect this practice has on the local environment.

I care not for religion.

So water ski on lake bull shit all you want the tide is rising anyways

CHEMTRAILS!!!!!

#169 Noel on 02.03.16 at 2:14 pm

#152 Mark

#153 JimH

How do you explain that the most common occupation, by far, on the titles is ‘home maker’ ie, unemployed?

Where is that money coming from?

#170 family beagle on 02.03.16 at 2:15 pm

I know a few people house shopping in 604. Their realtors are advising to make all offers 8 to 10% over ask on everything. Gotta keep that momentum. (This seems to be the etiquette when making offers using a realtor buffer, sell or buy side, ie collusion.) Like a ten percent gratuity. The trend of offering over ask started 18 years ago when grow-ops were competing for floor space.

I picked up my recent tract (2years ago) 10% under ask because my realtor worked for me.

Aside, Lowes just bought Rona, offering double common share price. Board accepts.

1.33 Cad by Q4.

#171 Trey on 02.03.16 at 2:17 pm

Garth if 95% of Vancouver RE is purchased by locals then why aren’t houses to that extreme all over Canada?

The HAM affect is definitely concentrated there.

#172 Jack Smith on 02.03.16 at 2:18 pm

The U.S. 10 year and 30 year bond yield is currently 1.85%, 2.67%. I remember during the whole Greece debt mess and to 2009 global financial, economic mess U.S. 10 and 30 year reached as low as 1.10%, 2.23%.

So there is still room to move lower and it could stay in a range of 50 basis points over the next 6 months or so either way, 1.35% to 2.35%, 2.17% to 3.17%.

#173 Ole Doberman on 02.03.16 at 2:21 pm

Looks like Fed is re-thinking raising rates and back peddling to negative instead:

“The Fed knows there is a problem and raising rates may attract too much capital inflow. They are entertaining negative interest rates to ward-off the inflow of capital.”

http://www.armstrongeconomics.com/archives/42960

Also doesn’t sound good:

“Social Security will be broke in 2017. Negative interest rates will really destroy it.”

#174 Leo Trollstoy on 02.03.16 at 2:21 pm

#117 Normal Distribution Statistics…Mark on 02.03.16 at 3:13 am

good post. top quality. unfortunately you’re going over his head with this. remember, this is a person who says getting noticed by corporate hr is hard. hr. not sr mgmt. not even middle mgmt. hr. the basic first level screen. getting hr to respond is hard for this poster. this is a low bar skill set person. this statistic stuff is way beyond WalMark. srsly. thx for the post tho

#175 cramar on 02.03.16 at 2:29 pm

#41 Snowboid on 02.02.16 at 7:12 pm
Here in Phoenix…

Just to remind us of the great white north, the last couple of days have brought Arctic air south (only 13C today) but back up to 30C next week.

——————-

Interesting. Just checked. It is currently warmer here in Leamington (2 PM) than in Tucson (noon)! And both sunny!

But that will change tonight. Darn.

#176 45north on 02.03.16 at 2:32 pm

Before there was Shared Services, each government department managed its own IT, with widely varying success. This creaky IT infrastructure also risked breakdown. So, in the time-honoured tradition of governments everywhere, a new, centralizing mega-agency was born.

http://ottawacitizen.com/opinion/columnists/editorial-shared-services-canada-it-octopus-needs-fixing-fast

Agriculture Canada had its own email system that did the job. It wasn’t perfect but it was good enough.

Public Services Minister Judy Foote: She promised stronger “leadership.”

well thank God for Judy Foote. Seriously somebody needs to pull the plug. That is responsibility for email systems would simply be delegated back to the departments.

#177 S.Bby on 02.03.16 at 2:37 pm

Didn’t some realtor recently say that US buyers were snapping up Whistler properties because of the low dollar?
He was wrong (or lying).

http://www.theprovince.com/business/american+buyers+slow+move+whistler+real+estate+despite+lower/11693108/story.html

#178 Leo Trollstoy on 02.03.16 at 2:45 pm

#110 waiting on the westcoast on 02.03.16 at 12:48 am

good insight. but don’t think he’ll understand. remember he said 2 years ago that cad higher, toronto re lower, and gold higher. all wrong. and also says getting company hr to notice him was hard. low bar life skills. all this median average mumbo jumbo won’t fly with his knowledge level. need to go lower. like addition/subtraction. try that. thx.

#179 Kreditanstalt on 02.03.16 at 3:05 pm

The reason rates will stay low for the forseeable future is simply that the supply of money & credit has been so bloated for so long and that newly-counterfeited money has to go somewhere.

In the absence of real-terms economic growth – gone until the money supply contracts considerably – bona fide business opportunities and investments will remain few and far between. Ask insurers, pension funds or governments how long their business models, predicated on 6-8%p.a., will survive under the currency debasement of ZIRP…

THAT, not risk aversion, capital impairment or sheer bloody-mindedness, is why banks are loathe to lend.

Central bankers will keep trying to force banks to lend when it is simply not warranted by economic conditions.

Keynesian central planners will never, never, never allow the money supply to shrink and zombie entities and jobs to disappear.

ZIRP will go one for years. They dare not do otherwise.

#180 Mark on 02.03.16 at 3:15 pm

“How do you explain that the most common occupation, by far, on the titles is ‘home maker’ ie, unemployed?”

Divorced ex-wives of rich people in Vancouver’s mining sector? Even stock promoters who basically set themselves up to be ‘judgement proof’ for obvious reasons.

Anyways, we’re just talking about such a small handful of houses here, primarily in West Vancouver. “HAM” may very (probably does) exist at the extreme high end, but transactions in such a small number of houses don’t justify literally tens of thousands of more ordinary houses being priced at absolutely insane multiples of rent. The only logical explanation for that is an excess of speculative enthusiasm amongst the locals, and easy credit conditions which have facilitated such.

If you look further at the other slides, the occupations represented amongst the high end house owners pretty much run the whole gamut of titles that we’d see in the domestic Vancouver economy. Pharmacist. Engineer. IT analyst. Lawyers. Deputy Minister., etc.

#181 Nemesis on 02.03.16 at 3:24 pm

#SkunksNeedNotApply,Or… #GregorLeavesItToBeavers… #It’sBetterInBC… #No,Really!…

[G&M] – Vancouver’s urban-beaver plan focuses on enhancing habitats

“Relocation is very expensive, $10,000 each beaver. You can protect a lot of trees and clean out a lot of culverts for that price.” – Nick Page, Vancouver Parks Board in response to Vancouver mayor Gregor Robertson’s offer to donate $250M of city land for social housing…

http://www.theglobeandmail.com/news/british-columbia/vancouvers-urban-beaver-plan-focuses-on-enhancing-habitats/article28530523/

[NoteToGT: I may have taken some editorial liberties with Nick’s interview…]

#182 Ole Doberman on 02.03.16 at 3:29 pm

Looks like the most expensive city in the world falling off the RE cliff:

http://www.scmp.com/business/companies/article/1908715/hong-kong-property-sales-plummet-lowest-25-years-and-worst-way

#183 Electric cars finished on 02.03.16 at 3:38 pm

Tesla just broke thru multi year support. Oil industry kickbacks too big to allow electric to go mainstream.

Look at the problem ridesharing services like Uber are having with the puny taxi Mafia

#184 Dr Talc on 02.03.16 at 3:45 pm

Low mortgage rates are good.
Show me one person who actually qualifies for a mortgage who wants to pay higher interest rates, they dont exist. Anyone advocating higher mortgage rates is playing devil’s advocate or suffering from cognitive dissonance.

Low rates bring higher debt. Are you twelve? — Garth

#185 johnny on 02.03.16 at 4:03 pm

Here’s Peter Boockvar, chief market analyst at The Lindsey Group:

“We continue to take out the likelihood of another rate hike with rate hike odds by December now below 50% for the first time, the US dollar is getting hit hard with the euro in particular back above $1.10, the euro heavy dollar index at the lowest since mid December and gold is about to break out above its 200 day moving average after previously rising above its 50 and 100 day.”

So, it’s hard to be bullish on the dollar when growth is slowing. Barron’s Ben Levisohn noted in December, astutely, that the dollar was looking vulnerable because central banks have been premature in hiking rates. He wrote:

“Making a rate hike stick has been tricky. Five central banks have raised interest rates since the financial crisis, and all have been forced to reverse in short order.

That the European Central Bank blundered by raising rates beginning in 2010 has become a cautionary tale for policy makers everywhere. But even central banks that didn’t make mistakes have had trouble raising rates and keeping them there. The Reserve Bank of New Zealand, for instance, cut interest rates for the fourth time this year last week, reversing the rate hikes it had put into effect just last year. It’s not out of the question that the U.S. could be forced to do the same.”

Garth you have been banging the table for over a year on how the Fed would increase rates substantially last year..now you are saying this year. My prediction..the rate hike in December will be the one and only for years to come.
Why..simple dear sherlock..the US and global economy can only function with easy credit. I have asked you this countless times Garth..if the economy in the USA has been so rosy then why have interest rates been left at zero for 8 years..and then one miniscule 0.25 rate hike causes a panic. The US economy is like a heroin addict..they need more and more of a fix to keep the game going..ie more and more easy money..but rates are already basically zero and the markets are freaking.
This is not going to end well..

Your prediction is wrong. The Fed will move again this year. When, how often and how much will depend on the data. — Garth

#186 Stoopid Idiot on 02.03.16 at 4:28 pm

#128 Retired Boomer WI

#100 Smoking Man

#96 Bottoms_Up

There is also a chart that shows the accuracy of model predictions for temperature (spoiler alert, modelling can and does work)

Sorry, I know a little about modeling… actually I know a lot. Tweak the algorithm and I can make your model predict anything you want it to. For the right price and a little time I can give you an historical data base that could take years in court to prove wrong and make a Theoretical Physics cry like little girl whom has lost her kitten.

The Cando… lol, high frequency boy’s must be working late

#187 Bottoms_Up on 02.03.16 at 4:46 pm

#186 Stoopid Idiot on 02.03.16 at 4:28 pm
————————–
Sure, and I can destroy your spaghetti dinner by spitting in it.

My original point being that models are used successfully in lots of different areas of life (day trading, long-term trends, daily weather etc.).

There is reliable data that comes from modelling, and predicting the future trends of global warming and climate change is no different.

#188 Ace Goodheart on 02.03.16 at 5:04 pm

RE: “We’re on a 5year 2.05vr, which is pretty close to inflation…and we are pre-paying $275/mo. Why?

In five years we expect to renew at 5%, and want to keep the same payment.

If rates do go to 5%, we can reduce our payment by $275 a month. If they go any higher we’re still OK as we are used to the higher payments. And if they are less than 5%…well, that’s a happy outcome to and we’ll just keep going.”

So I type all this stuff about how housing prices are stable, Toronto is fine, Vancouver prices are normal and usual considering how close to down town the houses are located, and then I read something like this.

$275.00 in pre-payments per month, to build a cushion against higher rates, and if all else fails, they can handle more payments anyway. Sitting here in my paid for house in Toronto, feeling pretty confident about how much it is likely worth, I suddenly begin to worry.

In the words of Kris Kross: “Cause inside out, it’s wiggida wiggida wiggida wack”

Um, if you’re going to own a house, with a loan on title, you don’t view the loan as the equity. These people are pre-paying not the outstanding amount, but against the future payments. That is as far as their thoughts go. “How much will I owe in the future as actual payments?”

Folks, you can’t think like that. You need to know how much you actually owe, and what the interest on that amount is likely to be, until the time when you can pay it off. So if you are paying on a 25 year “notional mortgage” (I say “notional” because it has a 25 year amortization period, but it is actually coming due in five years) you have to do the calculation as to how much interest you are likely to owe in the 25 year period. If people are just worrying about keeping up with the payments, then this is not going to end well.

I am just hoping that most people who are buying houses actually have a plan to pay for them, rather than a plan to keep up with the monthlies.

#189 Smoking Man on 02.03.16 at 5:08 pm

#164 SWL1976 on 02.03.16 at 12:45 pm
#143 Smoking Man

129 SWL1976

I don’t want to pull you away from your religious beliefs when it comes to climate change. You can water ski on lake bull shit to your hearts content.

———————————

I have no religious beliefs when it comes to climate change. With all things I study I try to keep an unbiased opinion about the subject and go with what I understand and my observations of the world around me. I trust stories of people who live off and have a close connection with the land and little to no connection to big oil or big business. I grew up on a farm in Southern Ontario and have always paid close attention to the weather and growing seasons. I have worked in the Arctic, and have spent that last 4 years working in Northern Alberta while living on the west coast. I have lived on the wet coast for almost 20 years and much prefer the outdoors to being in a smoky casino. I think I have a pretty good understanding of the climate and weather patterns here in Canada.

On top of that I have been observing and studying geoengineering for almost a decade and have personally witnessed the effect this practice has on the local environment.

I care not for religion.

So water ski on lake bull shit all you want the tide is rising anyways
……………

Well I’ve seen the tide rising on lake bull shit for quite some time, in fact I would call it a tsunami of epic proportions.

However, we have family re unions down in the keys. Going in May. We stay at Islamorada, been going there for the last 30 years.

Guess what, High tide is same as 30 years ago, low tide the same.

Dude owns a hamburger and hot dog boat that serves beer and food to all boats that chill on the sandbar, told me last time we were there, Rising sea levels, he hasn’t seen it. This is very shallow water when tide goes out.

If he gets his spot wrong and tide goes down he’s spending the next 12 hours on the sand bar.

He’s an expert on sea level.

See how entrepreneurs roll, smokey casinos, with other people who do the heavy lifting for us.

#190 Dr. Talc on 02.03.16 at 5:10 pm

Low rates bring higher debt. Are you twelve? — Garth

But the debt is the burden of one party to the transaction (buyer), a burden made lighter by their knowledge that inflation is built into the system.
The other party (seller) gets the cash, which gets spent back into the economy creating vibrancy

#191 Stoopid Idiot on 02.03.16 at 5:19 pm

#179 Kreditanstalt

gone until the money supply contracts considerably

How much more contraction would your opinion require?

https://research.stlouisfed.org/fred2/series/M2V

http://goldprice.org/gold-price-canada.html

#192 Nemesis on 02.03.16 at 5:37 pm

#WednesdayMischief…

#NotToBeOutdoneBy… #Vancouver’sUrbanBeaverGentrification… #Wolong,SichuanPandaMen… #ConductArduousFieldTraining…

[XinhuaNet] – Pandas take part in field training in Sichuan

http://news.xinhuanet.com/english/photo/2016-02/03/c_135071564_2.htm

#LithuanianHousekeeperCleansUp…

[Telegraph] – Businessman forced to give £650k house to Lithuanian girlfriend he met while she was working as cleaner

…”Plumbing mogul John Hoggins, 62, claimed Greta Cerniauskaite, 47, nagged him to buy her a house and “the contents of most of the shops in Bond Street”.

He bought her a £160,000 Bentley, funded a £100,000 fashion and jewellery shopping spree and paid for £8,000 of monogrammed sheets and towels from Milan.

They enjoyed properties in Hertfordshire, Spain and Florida while also holidaying in Alaska, Cuba, Thailand and Mauritius. Out of his plumbing empire, Mr Hoggins paid himself nearly £150,000-a-year, but also gave her a salary of up to £93,000 for a job with no work…

…But when they finally split after a nine-year relationship, Miss Cerniauskaite – who is now a businesswoman and model – claimed she had a right to their £650,000 second home in the village of Sawbridgeworth, in Hertfordshire.”…

http://www.telegraph.co.uk/news/uknews/crime/12139080/Businessman-forced-to-give-650k-house-to-Lithuanian-girlfriend-he-met-while-she-was-working-as-cleaner.html

#193 Stoopid Idiot on 02.03.16 at 5:42 pm

#187 Bottoms_Up

There is reliable data that comes from modelling, and predicting the future trends of global warming and climate change is no different.

Riiight, It’s a religion. If you can tell me how the last ice age ended I’ll perk up out of politeness, but…. Do not start with … million and millions of years ago fairy tales. Objective thinking is lost on most academia reliant on government grant for employment…. Nope not even willing to listen politely. Spit on spaghetti I’ll still eat it… Oh Oh, just tripped a Sulphur Train… does it feel warmer out?

#194 Bottoms_Up on 02.03.16 at 7:16 pm

#189 Smoking Man on 02.03.16 at 5:08 pm
—————————-
That, SM, is the 2nd largest mistake to make (deriving a position based on a single piece of anecdotal evidence).

#195 Bram on 02.03.16 at 11:56 pm

Let it sit and rot:
http://www.theprovince.com/news/abandoned+point+grey+homes+worth+combined+million+share+same+owner/11695936/story.html

I’ve got one of those in my street as well: falling to pieces, but sitting on a $1.3M lot. And it is in far worse condition that the one shown in the article.

#196 Kreditanstalt on 02.03.16 at 11:58 pm

#191 Stoopid Idiot

“How much more contraction would your opinion require?”

Who knows exactly? Ask the markets. But logically the money supply – and asset prices – would have to correct all the way back to that prevailing when REAL economic growth last took place.

Perhaps to @1971 levels? Who can say?

But here’s the thing: A LOT of people’s “jobs” have for years and years been cheap credit-dependent misallocations of capital.

#197 PR on 02.04.16 at 7:55 am

…who can afford a house at 1.69% may not be able to cut it at 4%….
A very good actuary said, many years ago (5 or 6) : If interest rate goes up 1% in canada, 10 % loss their homes !

I believe that.

#198 johnny on 02.04.16 at 9:51 am

Your prediction is wrong. The Fed will move again this year. When, how often and how much will depend on the data. — Garth

Well…ummm..Garth..its you that has been wrong since early last year..first pedicting a rate rise in spring 2015 then for sure summer 2015 then definitely october..and then finally to save all credibility Janet made a token increase in December. And now the markets are ready to collapse because rates went from ZERO to ZERO.25.
Come on Garth..this is not the strong growth US economy of decades past..this is a sick easy credit addicted economy that cant even function in a normal fashion with essentially free money. One more crash in the stock market should pretty well seal the deal..and probably launch one more round of QE (aka money printing). And you will keep sputtering..that interest rates will increase for the next 6 months..

Market ‘collapse’? Funny. — Garth