Just nuts.

SPOUSE modified

In Surrey Paul listened in amazement at the tale his realtor friend was spinning.

“He told me a house for sale here recently got so much attention that over 120 people showed up to view the property. Traffic had to be controlled so people would trickle in slowly for the viewing. The Surrey RCMP was called in to maintain order and control traffic onto the street. In Surrey? Nuts. Just nuts.”

In Toronto a CBC reporter called me wondering why the market there’s on steroids. Read the blog, I offered. “I did,” he said. Then you know listings have plopped, I summarized. Combined with low rates it’s a classic supply-demand thing. Owners are afraid to list because they listen to the CBC, then think they’ll never be able to buy again. Everybody’s into house porn, laced with greed and fear.

“Know what you mean,” he said. Then he told me about the place he bought on a dodgy street a decade ago for under three bills, now worth seven. A bit more convo, and it was evident that he, like The Walking Dead, was as infected as the rest of the colony.

The latest sales and price stats from Toronto and Vancouver (for February, no less) clearly show we have a dangerous bubble on our hands, now making people weird. Millions of folks eat, sleep, dream and lust over houses. They have children to populate them. They find jobs to afford them. A house is now most people’s entire financial strategy, their savings mechanism, the essence of their net worth, their retirement plan and, worse, their identity.

Real estate’s become an investible commodity everyone expects to generate windfall wealth, and at the same time is an obsession. “You rent?” is the meanest, sneary question in the land. It used to be that a professional or cool occupation was the supreme status. Now it’s an addy in the right hood, on the best street, in the hottest area.

Yesterday I gave the real reason houses are hottest in YVR and the GTA. Nope, not Chinese dudes nor 2.5% five-year mortgages. Instead it’s supply and demand (laced with the sauce of desire), a fact which has just been reinforced.

A year ago listings in the GTA – an area of 6,000,000 people – were ridiculously sparse at 12,800. Now there are 15% fewer, under eleven thousand. That’s a 41-day supply of real estate. Comparatively the second-biggest market in Canada (Montreal) has 32,600 listings available – a 440-day supply.

In Vancouver there are 7,300 listings in an area of 2.5 million people, for a paltry 51-day supply.

This constraint results (as I spelled out) from owners not wanting to risk being sellers, then forced to become buyers. Besides, they think every day beings new equity. So, like the CBC dude who says he could never afford to purchase his own house again, they stay put. Renovate, maybe. Move, never.

Dwindling supply and mounting demand (The Walking Dead somehow multiply) mean houses sell in a snap for full price, through bully offers above list, or in bidding wars with high body counts and record valuations. Every time that happens (like the Kits house fetching $735,000 extra the other day), the media is all over it and the fiery story of every-spiraling prices has another log thrown on it. “The fact that the annual rate of sales growth outstripped the annual rate of new listings growth shows a tightening of market conditions compared to last year,” says the Toronto Real Estate Board. And it’s true. The average detached home, say the realtors, costs 16.3% more than a year ago – at a time when inflation is 2% and the economy is growing at 1%, with high-interest savings accounts paying 0.5%.

As this pathetic blog has stated often, things can change surprisingly fast. No commodity in history ever ascended without painful corrections. Canadian real estate will be no exception. So while it’s been a good ride if you happened to own in the right place, it’s incredibly unwise to have the bulk of your net worth sitting in a single asset. Supply and demand can change fast. Look at oil. Or Stephen Harper. Hoverboards. Man buns. Fifty Shades of Gray. Trump.

So it actually doesn’t matter to smart people why some markets are insane while others descend, or what caused this to happen (worrying about the Chinese is so 2015). More relevant is what you do in response to this reality.

For example, if you sell a shack you’ve owned for 15 years and net $2 million, investing the money in a 60/40 balanced portfolio, what can you expect? Who knows for sure? But over the past six years (including 2015 when it made nothing, thanks to commodities and China), this would have averaged 6.8%. That’s an annual cash flow of $135,000. Less taxes (low on dividends and capital gains) and a tax-deductible advisor fee of 1%, that would net about $8,000 per month.

So, you can lease and live in a house like this (in tony Point Grey), be surrounded by luxury and still have two mill tucked away….

PT GREY modified

…or, you can continue to live here, in a $2 million dump on the wrong side of town, with all your nuts in one wacky basket. Tough choice.

CRAP HOUSE modified

212 comments ↓

#1 Lester Bacon Jr. on 03.03.16 at 6:01 pm

First!

#2 crowdedelevatorfartz on 03.03.16 at 6:03 pm

Hey!
That crappy East Van house looks like Broadway Skytrains’ house!

#3 Victor V on 03.03.16 at 6:15 pm

And here’s a mansion you can lease in one of Toronto’s best neighbourhoods with that budget.

https://www.realtor.ca/Residential/Single-Family/16534686/22-COSMIC-DR-Toronto-Ontario-M3B3E9-Banbury-Don-Mills

#4 S.Bby on 03.03.16 at 6:16 pm

2209 East Broadway is assessed for 2015 at $985,600 and is offered for sale at $2,050,000 for a difference of $1,064,400. It’s no wonder people think real estate is a no-brainer.

#5 Mark on 03.03.16 at 6:20 pm

Not sure why ‘days of supply’ is really even viewed by anyone as a useful metric. After all, with prices so elevated (albeit down from their highs) in Vancouver/Toronto, almost nobody at the entry level can actually afford to make a purchase. Hence, RE is all about individuals swapping units amongst themselves in a given market to fit their personal needs and desires.

If anything, and far more plausibly, the ‘low supply’ situation may very well be indicative of falling prices as people are increasingly afraid to list and ‘recognize’ decreases/losses on their housing. Anecdotally we’ve had reports of financial institutions in places like Calgary not even bothering to initiate legal action against defaulters, preferring to stall widescale price discovery. Garth posted a copy of a notice the other day from a condominium manager indicating that NSF payments were a problem that necessitated a significantly higher handling fee. Most datapoints point to a continuation of the past-2/3 year trend of falling housing prices nationwide with deflation increasingly a risk factor to the Canadian economy.

#6 Mocha on 03.03.16 at 6:21 pm

Trump!

#7 Love my Kia on 03.03.16 at 6:25 pm

In happier news the TSX recovered its losses for the year today.

With the Trump fiasco, maple looks better at the moment.

#8 turn of the tide on 03.03.16 at 6:28 pm

Housing porn aside, the Loonie’s been gaining quite a bit in recent days.

Do we expect this trend up to continue? Trying to figure out when to sell some USD at a nice(r) rate…

anyone?

#9 james on 03.03.16 at 6:37 pm

“A house is now most people’s entire financial strategy, their savings mechanism, the essence of their net worth, their retirement plan and, worse, their identity.”

Very good way of putting it. I would say that it is approaching a religion, with the major tenet being that ‘housing always goes up’. It is the ONLY way to get ahead in Canada. I mean, how can one not look at someone sitting on 2 millions in gains and not envy it. Hence, the masses all want to do the same.

So your supply woes are not impressing me.

King County and Snohomish County are at about 1.4 Months of Inventory. Listings are scarce, house prices rose (so we are told) 13.6% year over year.

Yet no one here discusses houses as their main financial asset. People talk about careers, kids, starting businesses, taking vacations (and of course politics). Nor have I heard tell of manias, last minute bidding frenzies, etc etc. There’s far more interest in the money leaving the tech sector and in Boeing’s layoffs than housing, from what I can see.

Americans lived through a bubble. Many know housing is probably on a dead cat bounce, and that they can’t rely on it as their sole financial strategy. There’s some evidence that millennials are avoiding purchasing housing, no doubt scared off by the housing bubble.

#10 max on 03.03.16 at 6:38 pm

Back in the day, a broker on the VSE, well they basically had a license to steal. Only the very dumb went to jail. My former dentist in Toronto started a hedge fund, all his investments in companies he controlled. Well he inflated his returns, basically stole $90million. I think his fines for self dealing around $1.2million and no jail time. Real estate has even less punishment. An agent can and even the association can flat out lie.

I believe demand is actually very low at these price levels.

#11 Enoug of ADELEEEE already on 03.03.16 at 6:39 pm

Mark, 2 points for you today.

we should add new column to excel spreadsheet: New Buyers.

Fools selling houses to each other should no count.

On the other note,
i got diagnosed with new disease: AAR

Adele Acid Reflux…

Every time i would hear Adele crying i would vomit..

bizarre…

#12 Bytor the Snow Dog on 03.03.16 at 6:41 pm

It is beyond understanding why anyone sitting on 2 mill in Vancouver or TO doesn’t cash out and git outta Dodge.

Mind boggling.

#13 tundra pete on 03.03.16 at 6:42 pm

Surrey, that is funny. Just a few years back you only lived in Surrey if you were a biker or gangbanger. There were all the jokes about Surrey girls. The only thing you got in Newton was aids or drugs. The only time we went to Surrey was for biker parties. Things have changed.

The one I liked best was the one about the birds. Why do birds fly upside down over Surrey? Because there is nothin’ worth shittin’ on.

#14 Renter's Revenge! on 03.03.16 at 6:42 pm

Oddly enough, it’s probably easier to find a place to rent when house prices are up than when they’re down. Most amateur landlords focus on prices gains and think of rental income as icing on the cake; meanwhile, there isn’t as much demand for rentals when prices are going up, because everyone wants to buy instead. When house prices go down, those amateur landlords start throwing in the towel, and everyone’s afraid to buy and is looking for a place to rent instead. Just when rent to price ratios become ideal, demand for real estate is at minimum, making it easier for the pros to scoop up rental properties and find renters at the same time! It’s like shooting fish in a barrel, if your smart about it. Oops you’re (see what I did there?)

#15 Olive on 03.03.16 at 6:47 pm

Garth…what is happening to the Toronto housing market.

This defies logic, economics….the gut knows….she is gonna collapse in 2016.

#16 Still afraid to sell on 03.03.16 at 6:47 pm

So in 2000 we paid $410k for a 1956 bungalow in a great North Vancouver hood. We read and agree with Garth but we are afraid to sell for $2 Million…wtf…

#17 jimmy on 03.03.16 at 6:50 pm

Hello.
Where on earth do you find a signal like that in the picture? License plate size might be a clue.

Speaking of that, here is a fun site someone else recommended recently. It challenges you to guess where you are on earth using a random Google Streetview picture.

https://www.geoguessr.com/world/play

#18 jaybee on 03.03.16 at 6:50 pm

Look, I love real estate. I owe most of my net worth to buying and selling it. But my god, what in the hell is going on in Toronto and Vancouver!? Who are these people?

#19 Michael on 03.03.16 at 6:52 pm

So Garth, how about a column on how to pick an agent to sell your stately pile before the bubble bursts?

#20 jimmy on 03.03.16 at 6:52 pm

Of course the phone number!
I think it’s Belgium.

#21 pathcontrolmonk on 03.03.16 at 6:53 pm

“Sauce of Desire” happens to be the name of Gregor Robertson’s sailboat.

#22 Frank on 03.03.16 at 6:58 pm

So what opens up supply? Job loss? Rate hike?

#23 gumboot princess on 03.03.16 at 6:59 pm

My daughter (26) and her partner went to the bank to see what they would qualify for if they wanted to buy into the Vancouver market. The bank would happily lend them $550 K.

They asked me if I would help with the downpayment. (Uh uh. NO.) His parents (who live in a large old house 30 min. north of Vancouver) were ready to help.

So, I printed off a few of Garth’s examples about how this is a terrible idea and they accepted it as plausible. I pointed out how incredibly flexible they are at the moment and that prices could go down and they won’t be stuck now.

So, long story short, soon after that their rent went up in downtown Vancouver and they decided to move in with his parents. The parents need some help with the house maintenance these days and the kids pay them a fair rent, too. The four of them are doing well. Four incomes, meals together, gorgeous character home and best of all they are saving money like crazy. She also likes having a dog and cat around without the long term responsibility.

Not sure how this will play out, but for now it is an alternative to ponder.

#24 Fred on 03.03.16 at 7:00 pm

Hers how you do it right.
1. Buy a house in a good neighbourhood
2. Make it a crack house
3. Surrounding house values will drop due to drug activity
4. Buy surrounding homes as their values fall
5. Destroy crack house and build new
6. Sell surrounding home when values rise

Rinse and repeat

#25 Bottoms_Up on 03.03.16 at 7:00 pm

#5 Mark on 03.03.16 at 6:20 pm
———————————-
If you know anything about real estate you know that “days of supply” is an immensely useful statistic, as it gives an idea of how fast a house is likely to sell, basically whether it is a buyers or sellers market. Therefore it is clear Toronto and Vancouver are deeply sellers markets, and montreal deeply a buyers market.

#26 waiting on the westcoast on 03.03.16 at 7:02 pm

Mark – RE is still going up in Van and TO… As amazing as that fact appears to you… It is a fact.

Another strong month from our US Ops in Feb. I will be sending out the stats next week.

Everywhere you go in Vancouver, all you hear is RE this and RE that. I chatted with my parents who my sister (who owns in Phoenix) and I have been pushing to sell for the past year. My Dad suggested that I buy since I can afford the payments and then I would have a “nest”. I told him I have a lot of nests that throw off cash. ;-)

#27 Victor V on 03.03.16 at 7:05 pm

More layoffs, more spending cuts in hard-hit oilpatch as job losses top 100,000

http://business.financialpost.com/news/energy/calfrac-well-services-ltd-cuts-another-500-jobs-from-north-american-workforce?__lsa=f35f-a6c3

#28 Don't Believe The Hype on 03.03.16 at 7:14 pm

RE: #91 Tony on 03.02.16 at 10:38 pm

Not sure why you think that I’m “just an average person who just doesn’t get it”. You don’t even know me. All I pointed out in my post last night was that the SPX and Dow Transports were outperforming this year, strangely enough, and had turned green for the year-to-date. Yet you seem to know for certain that after Draghi speaks next week the Dow Jones will fall “at least a thousand points”. It will be fun to see if the Dow does indeed do that. I’ll be watching.

#29 Tony on 03.03.16 at 7:20 pm

You confuse lack of listings with “zero” move up buyers. Without move up buyers the market is dead. The amount of listings just prove there’s zero move up buyers.

#30 Victor V on 03.03.16 at 7:20 pm

Watchdog warns of future deficits in Ontario

http://www.thestar.com/news/canada/2016/03/03/watchdog-warns-of-future-deficits-in-ontario.html

Progressive Conservative MPP Vic Fedeli (Nipissing) noted “last week’s budget confirmed the government is using one-time revenues and contingency funds to make the deficit appear smaller.”

“One example is using one-time money from the brisk housing market — $500 million in extra sales tax revenue and $300 million more in land transfer taxes — were booked as operating revenue,” said Fedeli, suggesting the Liberals are fluffing the books for the 2018 provincial campaign.

“Every expert sees through what this government is doing … just who do you think you’re fooling with this pre-election number fudging?”

#31 WalMark of Sadkatoon on 03.03.16 at 7:22 pm

Mark – RE is still going up in Van and TO… As amazing as that fact appears to you… It is a fact.

that’s why he was banned from RFD. along with making up other things and offering no evidence. he’s an unemployed loser

#32 Bram on 03.03.16 at 7:22 pm

The MLS description makes it sound as if the teardown was on a multi-family zoned lot?
But I checked, it is not: just a regular RS-1 zoning.

Also, didn’t you say in the past that prices are sticky on the way down?

If so, you really should keep the YVR house as long as it is going up. Just sell during the first month you see a -5%, and maybe your tear down yields 4M in 2019 instead of 2M in 2016.

Bram

#33 pwn3d on 03.03.16 at 7:24 pm

#5 Mark on 03.03.16 at 6:20 pm
Not sure why ‘days of supply’ is really even viewed by anyone as a useful metric. After all, with prices so elevated (albeit down from their highs) in Vancouver/Toronto, almost nobody at the entry level can actually afford to make a purchase. Hence, RE is all about individuals swapping units amongst themselves in a given market to fit their personal needs and desires.

If anything, and far more plausibly, the ‘low supply’ situation may very well be indicative of falling prices as people are increasingly afraid to list and ‘recognize’ decreases/losses on their housing.
—————–
lol. you are literally the dumbest person I’ve ever come across on the web. and it never ends. If prices have been dropping for 3+ years as you so moronically put it, why would new buyers have a problem getting into the market. <– rhetorical question.

#34 GenerationX on 03.03.16 at 7:26 pm

I took a look at the actual stats for Milton real estate sales . . .and the number of successful residential sales have been consistently falling since June of last year with the exception of 2 months in Nov & Dec (unseasonable warm weather probably brought out more buyers). This year Jan & Feb stats show less houses have been sold compared to the same months a year ago. The real estate “news” reports false data to keep people in a crazed “now or never” mindset. People need to wake up and realize that the bust is on its way!

#35 pwn3d on 03.03.16 at 7:28 pm

So, it looks like GTA housing goes parabolic this spring. YVR is already there. This is like a gold rush for the few sellers out there. Could this finally be the peak spring season? Laughably, it probably isn’t. Oh well, maybe next year.

#36 steerage steward on 03.03.16 at 7:28 pm

The spike in capital outflows from China that started in early 2014 matches the jump in real estate prices. As long as this HAM is flowing the market wont correct. All indications are this flow is continuing and accelerating.

Chinese outflows:
http://uk.businessinsider.com/china-the-most-important-chart-in-the-world-now-shows-capital-outflows-2016-1

Real Estate Board of Greater Vancouver, March 2016 report (graph on last page):
http://www.rebgv.org/sites/default/files/REBGV%20Stats%20Pkg%20February%202016.pdf

#37 Bram on 03.03.16 at 7:28 pm

#4 S.Bby on 03.03.16 at 6:16 pm
2209 East Broadway is assessed for 2015 at $985,600 and is offered for sale at $2,050,000 for a difference of $1,064,400.

The low assessment is probably due to the fact that no neighbouring properties have been sold in the last few yrs? Once this one sells at 2M, or more, then next year, all the neighbours in that neighbourhood will get 2M assessments in their mailbox, is my guess.

#38 ROCK BEATS PAPER on 03.03.16 at 7:33 pm

I doubt there is a “real reason”. Fantasy is what propels a bubble. Bubbles seem to require a narative of how it is different this time, plus a confluence of factors that probably included at various times low mortgage rates, foreign buying, Mom & Dad, greed and fear…

The real story today is that the Services ISM rolled into negative territory in the US. The maufacturing has been in recession for 13 months, and if the services follow, the dreaded R word will be coming out, and alas, two term incumbent political parties usually do not survive the vote if recession is in the offing.

The Trump card.

#39 westcdn on 03.03.16 at 7:35 pm

Is Hillary gay? To me it doesn’t matter but her behaviour does. http://www.snopes.com/politics/clintons/hildabeast.asp
The sad part is the Clintons get away with their lies. I know she ordered the assault on Waco and I have suspicions about the WhiteWater scandal. I would not want these people in my neighbourhood.
It is unfortunate that the previous websites of Hillary’s discretions have disappeared but my favorite story was her beaning a government official between the eyes with an ashtray when she was interrupted in a tight embrace with another women– true or not I don’t know. The website I lost was just full of her ambition and the destruction of those that impeded her. This woman is dangerous because she operates above her competence.
http://www.snopes.com/politics/clintons/hildabeast.asp
The Vincent Foster affair is interesting. It is alleged he committed suicide in the Whitehouse and Hillary had his body to be dragged out and dumped in a nearby park. Also, good old Bill may not be the father of Chelsea thanks to Hillary’s affairs. Apparently, Bill found her to be a cold fish to him.
Anyway, just stories but they amuse me because I think they are true. The Clintons may be no better than the “Clamplettes of Beverly Hills” except being more vicious and greedy.
Time will tell but I fear Trump much less than Hillary because she has been bought and paid for…

#40 Smoking Man's Old Man on 03.03.16 at 7:38 pm

People always look at what they don’t have as being the reason they feel empty inside:

If I only had a house
If I only had a spouse
If I only had that car
If I only had that pet
If I only had more money
If I only ___________.

It goes on and on forever, there is no way of fulfill all our desires outside of ourselves. As Smoking Man says we’ve all been schooled by society in such a way we are enslaved to it’s values.

Examine your lives. Have you ever had anything you couldn’t live without and finally attained bring lasting happiness?

Do you really think affording a house in Vancouver would make your life complete… dream on.

#41 Rexx Rock on 03.03.16 at 7:41 pm

Keep your house and retire rich,end of story.

#42 salonist on 03.03.16 at 7:41 pm

tn1 visas granted in 2012

a.7600
b.12,500
c.14,967

-1 in 2016 nectonites don’t count

a.7600

for anyone contemplating getting a tn1 visa.
getting the ducks in a row, it is a long arduous process
the secondary interview, the interrogation.
there is the burden of proof on you and your sponsor needing you temporarily and your approved skill set and why

having the sponsor craft the document of your temporary residency.
not many u.s.a sponsors prepared to generate such.
should they run afoul of u.s.a. law (s)

total number of applicants 2012……8800

don’t think mark’s skill set would be on the approved skill set list

“blabbermouth”

#43 triplenet on 03.03.16 at 7:46 pm

Days of supply aka the absorption rate is not important.
Single family homes can be valued by applying a capitalization rate to the net income (before depreciation and debt service) et al.
…..where do you guys get this stuff?

PS – Victoria re update
What’s going on with Vancouver Island real estate values?

#44 Happiness on 03.03.16 at 7:49 pm

According a theory the feeling of “if I only had…” is a vital vital tool for human evolution – motivation to chase the always moving target of happiness. Heard it on the outstanding CBC program, Ideas.

#45 VanMan on 03.03.16 at 7:50 pm

I’ll reiterate my point from a few days ago…

People are making bank renting their real estate as vacation rentals. Cities like Toronto and Vancouver attract millions of visitors every year and it’s possible to rent these places out on the short term and make a very profitable business out of it. I know people that have created a network of 5 or more people that are trying to acquire as many units as they can because they are making huge profits by renting their units on Airbnb, vrbo, etc. The risk is divided among many people, but the profits are huge. Some people are doing 10,000 a month on downtown condo units.

This is not going to go away. Travellers, business people, vacationers will only continue to increase and utilize Airbnb more and more. The fact that we can’t accept that the risks for real estate have changed astounds me. We label people as ignorant and as financial illiterates, but perhaps the opposite is true and these people that I mention have figured out a unique business proposition that they continue to scale because the majority only sees risk when in fact it’s opportunity.

#46 Musty Basement Dweller on 03.03.16 at 7:51 pm

Does anyone know if there is still a condo glut on the market in Toronto now or has it been absorbed?

#47 Mark on 03.03.16 at 7:51 pm

“we should add new column to excel spreadsheet: New Buyers.

Fools selling houses to each other should no count

Ross Kay makes this argument. But yeah, the real health of a market is in whether new entrants are coming to the table. And evidence is abundant that they’ve been locked out.

“If prices have been dropping for 3+ years as you so moronically put it, why would new buyers have a problem getting into the market.”

Simple — they haven’t dropped enough to compensate for the tightening credit conditions, job losses, etc. We’re only talking about minor declines to date. The real fireworks have yet to begin!

“If you know anything about real estate you know that “days of supply” is an immensely useful statistic, as it gives an idea of how fast a house is likely to sell, basically whether it is a buyers or sellers market.”

Liquidity tends to be poor in declines, just as it can be poor in increases. Evidence is significant that the market peaked a few years ago (2H, 2013) and we are now solidly in the decline phase descending towards a more pronounced panic.

#48 Mark on 03.03.16 at 7:54 pm

“a.7600

for anyone contemplating getting a tn1 visa.
getting the ducks in a row, it is a long arduous process

This is on account of weak US hiring demand, particularly in the technology sector which has traditionally been a significant demand source. Also, be careful to adjust for the fact that the TN is now valid for 3, instead of 1 years before a renewal is required. A change made over the past few years.

“don’t think mark’s skill set would be on the approved skill set list”

Actually it is, and I have held a TN-1 visa in the past.

#49 Mark on 03.03.16 at 7:59 pm

“it is a long arduous process”

BTW, nothing long and arduous about getting a TN-1 if one actually qualifies. Photocopies of one’s professional degrees/qualifications in a qualifying field (ie: engineering). A properly worded offer letter. A valid passport. There is no LCA required. There is no “lottery”. If one qualifies, it literally doesn’t take more than half an hour. The rejectees most likely either didn’t have their paperwork in order, or they were attempting to obtain the visa for some of the occupational categories which leave more discretion available to the examining officer.

#50 Useless philosophy on 03.03.16 at 8:00 pm

Judith Fitzgerald – 2001 – ‎Biography & Autobiography
McLuhan believes TV will prompt politicians to become entertainers as style and … Furthermore, given the direction of show-biz politics, an actor could very well become president within two decades.

#51 For those about to flop... on 03.03.16 at 8:02 pm

As someone who works on houses for a living the prices are out of control,that is not up for debate.

What is also troubling ,is the size of the houses are getting out of control.

I regularly work on new builds that have 8/9 bedrooms ,same amount of bathrooms plus a powder room.
All for 2,3 or four people.

The worst case of excess I heard of this year which I wrote about on the blog ,was a famous Canadian singer buying 4 lots in Burnaby and was given permission to build a 36,000 ( not a typo) square foot house and the project had a stop work order put on it because they were over building.

I mean c,mon why don’t you just build yourself a hotel and live in the penthouse…

M41BC.

#52 ANON on 03.03.16 at 8:05 pm

We need a savior, statim! Meanwhile, better stack on those phased-out pennies. Like, yesterday…

#53 For those about to flop... on 03.03.16 at 8:08 pm

#5 Mark on 03.03.16 at 6:20 pm
Not sure why ‘days of supply’ is really even viewed by anyone as a useful metric. After all, with prices so elevated (albeit down from their highs) in Vancouver/Toronto, almost nobody at the entry level can actually afford to make a purchase. Hence, RE is all about individuals swapping units amongst themselves in a given market to fit their personal needs and desires.

If anything, and far more plausibly, the ‘low supply’ situation may very well be indicative of falling prices as people are increasingly afraid to list and ‘recognize’ decreases/losses on their housing. Anecdotally we’ve had reports of financial institutions in places like Calgary not even bothering to initiate legal action against defaulters, preferring to stall widescale price discovery. Garth posted a copy of a notice the other day from a condominium manager indicating that NSF payments were a problem that necessitated a significantly higher handling fee. Most datapoints point to a continuation of the past-2/3 year trend of falling housing prices nationwide with deflation increasingly a risk factor to the Canadian economy.

////////////////////////

You truly are a ding-a-ling.

M41BC

#54 Unbalanced on 03.03.16 at 8:09 pm

I’d rather listen to Adelle than SM

#55 vb on 03.03.16 at 8:10 pm

years ago if you wanted to move you listed it sold it and moved …rates were higher, demand was more reasonable. Now in Toronto you get whacked with double land transfer taxes …its prohibitive to move up. I went through this very exercise myself. I decided the cost and hassle wasn’t worth it….so for a few years I stayed put. Eventually the potential proceeds were too appealing and I started to think I’m going to rent and hopefully find a way to invest and grow the proceeds … I did that two years ago..yes renting isn’t the same in terms of lifestyle because I feel very disconnected from it…..but the investing has given me far more cash flow and far more security.

Thanks Garth, so far so good.

#56 Ronaldo on 03.03.16 at 8:12 pm

#8 turn of the tide on 03.03.16 at 6:28 pm

”Trying to figure out when to sell some USD at a nice(r) rate…

anyone?”

That would have been 6 weeks ago when you could have gotten an additional 8.5% for them.

#57 ANON on 03.03.16 at 8:15 pm

…because those pennies be dollars, is why :)

#58 Rainbow Nation on 03.03.16 at 8:17 pm

jimmy #17/#20

South African cellphone #. Vehicles have right sided steering over there.

#59 Herb on 03.03.16 at 8:18 pm

Don’t know about non-existent foreign demand, but domestic supply and demand would be quite different if mortgage rates and regulations were normal. The “invisible hand” regulating the RE market is pretty obvious.

What was the percentage of houses bought with mortgages again? And how would these lusts have been satisfied if the means had not been provided?

#60 WalMark of Sadkatoon on 03.03.16 at 8:30 pm

The real fireworks have yet to begin!

this is true. real estate prices in vancouver and toronto haven’t declined. they haven’t even begun to decline. thanks for acknowledging your 3yr error

#61 SWL1976 on 03.03.16 at 8:38 pm

#2 crowdedelevatorfartz

Hey!

That crappy East Van house looks like Broadway Skytrains’ house!

——————-

As much as we disagree on many subjects…

That one gave me a chuckle

#62 offwiththeirheads on 03.03.16 at 8:39 pm

#20 jimmy on 03.03.16 at 6:52 pm

Of course the phone number!
I think it’s Belgium.
……………………………………………………………………………

https://anrufer.info/telefonnummern/07227-791

#63 MSM-Free Zone on 03.03.16 at 8:42 pm

Funny, in the Greater Temptation of Acquisition (GTA), a lot of chicks would rather you (trust me on this)…
…a) own a condo, lease a Beemer, rather than
…b) rent a condo, own a Beemer.

(Luckily, this makes no difference to my current squeeze, she drives an F150 in the winter and rides a Hawg in the summer…)

#64 Timmy on 03.03.16 at 8:45 pm

Garth keeps warning about the real estate market–and it keeps going up…

I warn about having an unbalanced life. But soon I will stop. — Garth

#65 Smoking Man on 03.03.16 at 8:47 pm

I’m at a desk in the a suite at Seneca casino in Salamenca NY. Waiting for the GOP debate

Staring at the mirror, wondering why I’m such a rebellious ass.

Every time I was sent down to the principles office, and it was a lot, I turned to my class mates.

Help!!!!

They knew I was right, no one backed me. They all cowered under there desks.

That’s the difference between 1% and the 99%

#66 Smoking Man on 03.03.16 at 8:54 pm

#56 Ronaldo on 03.03.16 at 8:12 pm
#8 turn of the tide on 03.03.16 at 6:28 pm

”Trying to figure out when to sell some USD at a nice(r) rate…

anyone?”

That would have been 6 weeks ago when you could have gotten an additional 8.5% for them.

I got out of the bet with 7.2 m, week earlier it would have been 14 m

I have no idea what going on in the fx market at the moment. so I sit, spend 3 days a week doing philanthropy at native american casinos.

#67 Mark on 03.03.16 at 8:56 pm

“this is true. real estate prices in vancouver and toronto haven’t declined. they haven’t even begun to decline. thanks for acknowledging your 3yr error”

I didn’t acknowledge any error because I didn’t make one. But a modest few percent off of peak 2013 prices isn’t that much of a deal at the moment, and has been handily hidden hidden by the dramatic shift to the sales mix as seen in Toronto/Vancouver.

Where the drama comes in is when we start to see 20%+ declines. Already starting to show up in Calgary, but the Calgary market started its melt sooner than the rest of the country (ie: in 2011/2012). After all, a lot of the O&G sector ’employment’ in Calgary is in front-end design, engineering and finance, and those activities are largely front-loaded.

#68 For those about to flop... on 03.03.16 at 8:58 pm

I replied to a guy on here last night about what was happening on Westside during the 2008/2009 real estate blip.
I was not a member of this blog at this time, but I was working on one of the more well known Westside realtors own house.
He wanted me to fix some deficiencies with the house,so that when the market got hot again as it did that it was ready to get top dollar.

I remember him saying to me one day when we were doing the small talk thing ” things have just grinded to a halt” he said to me with a worried look upon his face.

You see Mark we both have connections.
I have real world connections.
You on the other hand have a Internet connection…

M41BC

#69 Smoking Man on 03.03.16 at 9:00 pm

http://www.openculture.com/2014/07/hunter-s-thompsons-conspiratorial-911-interview.html

If trump wins. Hunter will be laughing from the heavens

#70 Rexx Rock on 03.03.16 at 9:02 pm

DELETED

#71 common sense on 03.03.16 at 9:02 pm

#53 Flopper

Leave Mark alone…every night he’s on a roll…

#72 Smoking Man on 03.03.16 at 9:02 pm

Hunter on 911

Oh, absolutely. Absolutely. And I have spent enough time on the inside of, well, in the White House and you know, campaigns and I’ve known enough people who do these things, think this way, to know that the public version of the news or whatever event, is never really what happened. And these people I think are willing to take that even further, so I don’t assume that I know the truth of what went on that day, and yeah, just looking around and looking for who had the motive, who had the opportunity, who had the equipment, who had the will. Yeah, these people were looting the treasury and they knew the economy was going into a spiral downward.

#73 Retired Boomer WI on 03.03.16 at 9:08 pm

The story is seemingly unending…. Real Estate in certain hoods is priced beyond most human’s reach. Glad I don’t live there. nuff said.

Meanwhile, in the land of cow shit & beer farts the retired Boomer finds he has a loose 3 tooth bridge, the Ford needs new brakes, the kid needs a loan, the Caddy battery went dead while we were in ‘defrost mode’ down south. By the way, Memphis is a really fun town highly suggest a visit especially if you love good BBQ, and live Blues! Florida not so much. So got a 2nd opinion on the teeth. 2nd Dentist was much less costly for 2 extractions, a partial, and some periodontal treatments. Shop around it does pay!

So, after vacation the troubles mean I will spend about what we did while on vacation! (sigh)

So, what to do? Stock portfolio profits up, book some of those paper gains! Easy, tax free Roth plumps up the checkbook, and I have what I started the year with. Sometime timing works out SO WELL! A month ago we were all bitching about the depths of the pullback.

Oh well, we be good for awhile again. Trump That one!

#74 common sense on 03.03.16 at 9:13 pm

So US reports Jobs numbers tomm…

Good number plus stable stock market, rising oil prices =

Rate hike right?

Hahahahahahahahahahhahaha

#75 ANON on 03.03.16 at 9:15 pm

Everywhere you go in Vancouver, all you hear is RE this and RE that.

This is also known as the last call … for cash-out.
This is IT.

.

#76 For those about to flop... on 03.03.16 at 9:18 pm

#69 common sense on 03.03.16 at 9:02 pm
#53 Flopper

Leave Mark alone…every night he’s on a roll…

////////////////////////

He’s embarrassing himself ,I am low net worth but I have my self respect…

M41BC

#77 Mark on 03.03.16 at 9:21 pm

“You see Mark we both have connections.
I have real world connections.
You on the other hand have a Internet connection…”

What’s your point? I talk to Realtors from time to time. I also talk to other supply-siders. My cousin is even the head of the home builders’ association in a major Canadian city. But primarily I look at data, and lots of it.

In reality, there is very little I’ve said in the blog comments section that isn’t backed up by people like Ross Kay who are willing to put their real name publicly on it. Suggest you listen to him when he’s on “talkdigitalnetwork” (Garth also makes occasional appearances) — smart man who crunches a lot of data on a fairly regular basis and has experience as an actual Realtor.

#78 Mike C on 03.03.16 at 9:24 pm

“Millions of folks eat, sleep, dream and lust over houses.”

Dreams can and do come true with a lot of hard work.
The only problem is, dreams are fast turning into fantasies for the majority of non-owners in the 416 and 604.

Number of renters for life is only set to increase here.

#79 BS on 03.03.16 at 9:29 pm

VanMan on 03.03.16 at 7:50 pm
I’ll reiterate my point from a few days ago…

People are making bank renting their real estate as vacation rentals….

This is not going to go away.

Most stratas have or soon will be banning short term/ AirBnB type rentals. Those fines add up fast. Plus mandatory move in fees of $300 and up are common now no matter how short term the rental. Move in just means a new tenant. I could also see the City of Vancouver banning them like Whistler has. The BC Liberals have also announced regulations are coming soon for AirBnB. It could be ‘going away’ much faster than you think.

#80 Market Man on 03.03.16 at 9:34 pm

Low listings tells us that people can afford their homes

Rising prices tells us that there are plenty of buyers
Downpayment not an issue
People are not looking at price but cost per month
Unless there is a SPIKE in unemployment or interest rates NOTHING will change.

Forget everything else like 70% ownership rate
The fact that people are putting 5% down and can afford to keep there home home tells u more

#81 Nagraj on 03.03.16 at 9:47 pm

Our gracious host in “The Donald” (25/2) got into some idle speculation, musing that a Trump presidency would increase mkt volatility.

Americans are not going to vote a loudmouth vulgarian into the Oval Office, and the GOP establishment is not so – dysfunctional – as to permit Trump to become the nominee.

What are the real issues motivating the US electorate?

On another topic – there’s this from our gracious host:
” … proof that real estate has warped the collective mind [of Canadians]”
Well, those of us who are more intuitively rather than rationally inclined actually don’t need proof, we’re quite aware that the country has gone nuts with house prices. The term “collective mind” reminds the individual to separate himself, as wanted, from the public streaming down river . . . never an easy thing to do.

#82 broader mind on 03.03.16 at 9:51 pm

I warn about having an unbalanced life. But soon I will stop. — Garth —————————————————— I don’t like the sound of that.Please consider that most of us survive only to read your daily thoughts. Very much appreciated. Your turn to crow is close.

#83 lee on 03.03.16 at 10:04 pm

I think market man is correct. This run will go a long, long time. Like ten years. For those of you who wait you’re letting life pass you by – if a house is what you aspire to. Or you can rent and lie and tell people you’re like them and say you put 50000 down on a million dollar house. Who wouldn’t believe that. It’s like a Chrysler minivan – everyone’s got one.

#84 Smoking Man on 03.03.16 at 10:08 pm

The bastard msm, my class mates .

For a second loaf of bread they will sell their soul to the devel

Why is is so hard for the 99% to do what’s right.

Teachers. . I fking hate them.

#85 AfterTheHouseSold on 03.03.16 at 10:11 pm

The Book of Awakening
Mark Nepo
‘Let Go of the Rice’

“So much more can happen with our hands open. In fact, closing and stubbornly maintaining our grip is often what keeps us stuck, though we want to blame everything and everyone else, especially what we’re holding on to.

So much more can happen with our hands open. There is an ancient story from China that makes all of this very clear. It stems from the way traps were set for monkeys. A coconut was hollowed out through an opening that was cut to the size of a monkey’s open hand. Rice was then placed in the carved-out fruit which was left in the path of the monkeys. Sooner or later, a hungry monkey would smell the rice and reach its hand in. But once fisting the rice, its hand could no longer fit back out through the opening. The monkeys that were caught were those who would not let go of the rice.

As long as the monkey maintained its grip on the rice, it was a prisoner of its own making. The lesson for us is profound. We need to always ask ourselves, what is our rice and what is keeping us from opening our grip and letting it go?”

I was reminded of this passage after reading tonights post and the past two, fear and greed. So many have an opportunity of a life time yet hold onto the rice. What is your rice? Greed. Fear of the unknown, of loss, of missing out? Let go of the rice.

#86 Hey China, come look in Kelowna! on 03.03.16 at 10:15 pm

When do you think the Okanagan will be invaded by Chinese money? Is it happening now, maybe, maybe not.

#87 just say no on 03.03.16 at 10:19 pm

low ball offers with this time bomb ticking should fix Victoria’s smugness http://focusonline.ca/?q=node/1062

#88 Smoking Man on 03.03.16 at 10:24 pm

The heading of garthos post.

Just nuts.

Men where are yours. I finally figured out a way to get mike the bartender at senica to not cut me off

Capitalism , tip a 5 when your on the road to carpit burns on your head for the next drink.

Hoping that next one will open your eyes to the universe.

Some losers collect stamps.

#89 Mark on 03.03.16 at 10:24 pm

“The only problem is, dreams are fast turning into fantasies for the majority of non-owners in the 416 and 604.”

Guess you didn’t read Garth’s post the other day where he compared the statistics on the listings available today, versus those of a previous period. There was no meaningful change in offered prices. Which is certainly dramatically inconsistent with the Realtor claims, not adjusted for the shifted sales mix, of rapid appreciation.

Although its true that declines to date have been minor, the “Garth” balanced portfolio has returned more than RE over the past few years in the wake of the 2013 apex. That means that those who rent and invest in lieu of leveraged ownership are slowly gaining the upper hand. A trend likely to accelerate significantly in months and years to come. A trend which saw a mere 25% downpayment in 1990, invested in mere index funds, grow into enough to buy outright by the end of the decade.

#90 Tiger1960 on 03.03.16 at 10:26 pm

45 van man .
In 8 years after all expenses with my tree service, I just hit 1.2 mil in savings , no debt , and paid the ex 900..000as well! Still have 70 acres of lake front property for wtf log it cabin it , sell it 1 mill extra I guess !
F,,m
Sold my personal property 1 year ago and collected some serious cash , no tax , made money while sleeping!
I say the crew you hang with are a bunch of idiots !
I run my owne style!
See it takes 6 brains to make 10%. of what I make !
Hope it works well for your friends!
Where I come from money grows on trees!
Even my accountant can’t believe I make more than his business.
Crazy as he put it !
Me replied look I know how to make money!
Kids thease days , buy re and B and B it , I never follow the heard mentality , just never!

#91 Bottoms_Up on 03.03.16 at 10:30 pm

Imagine, spending 4 years getting an undergraduate degree, then 5, 6, 7 or even 8 years specializing in a research field (let’s call it cancer research) to get a Ph.D. You are then very productive, publishing multiple academic papers a year, contributing to the broader knowledge base of humanity. Yet, your boss (who likely earns $150,000+) doesn’t want to pay you more than $25,000 per year, and doesn’t want to give you benefits.

Thank goodness these poor suckers organised, even though they still are living below the poverty line with their recent “win”:

http://ottawacitizen.com/news/local-news/carleton-post-docs-ratify-first-collective-agreement

#92 Tiger1960 on 03.03.16 at 10:33 pm

54 unbalanced!
I’d rather listen to the ex , than read the smoking goof !

#93 common sense on 03.03.16 at 10:36 pm

#85 After the House Sold

Good story…Thanks for posting.

#94 For those about to flop... on 03.03.16 at 10:36 pm

Someone just came around and purchased an item I had on Craigslist.
The Metrosexual Messiah wanted me to get resourceful,so I am bagging tax free sales.
Also had this thought.
Calling Mark out on his lies is pointless.
Making money tax free to get back my TFSA difference,priceless…

M41BC

#95 Ben Bishort Sr. on 03.03.16 at 10:39 pm

Is there talk anymore of our dollar going to 59 cents or 35 cents or whatever some economist was saying from some big five bank on this blog? Just wondering if its over or still on now? It’s 74.54 right now so maybe its going to 80?

#96 common sense on 03.03.16 at 10:43 pm

#76 Flopper

Of course you respect yourself ;).

Does Mark respect himself in the morning? I hope so.

To Thine own self be true..

#97 Smoking Man on 03.03.16 at 10:47 pm

To the familys of 911 feel your pain

MSM flag suckers to my hero . Only found him from blog dogs. Hunter S Thompson.

Fk thea machine

https://youtu.be/u9Dg-g7t2l4

#98 Joe2.0 on 03.03.16 at 10:48 pm

It’s worth what people will pay.
Basic principle.

#99 For those about to flop... on 03.03.16 at 10:49 pm

Someone just came around and purchased an item I had on Craigslist.
The Metrosexual Messiah wanted me to get resourceful,so I am bagging tax free sales.
Also had this thought.
Calling Mark out on his lies is pointless.
Making money tax free to get back my TFSA difference,priceless…

M41BC

#100 Bottoms_Up on 03.03.16 at 10:49 pm

I warn about having an unbalanced life. But soon I will stop. — Garth
—————————-
Seriously Garth, if you stop, suicides in Canada will spike for at least a week.

#101 RayofLight on 03.03.16 at 11:00 pm

#8 turn of the tide on 03.03.16 at 6:28 pm
Housing porn aside, the Loonie’s been gaining quite a bit in recent days.
Do we expect this trend up to continue? Trying to figure out when to sell some USD at a nice(r) rate…
anyone?
—————————————————

If you look at the $US/$CDN chart from the beginning of 2014 to the present, the Mean Regression Line extrapolated to July 1 2016 suggests a $.70 US to $CDN. IF the current oil over supply continues and the Cushing OK storage tanks become full, the spot price for oil could plummet, taking the $CDN with it. I am waiting to sell my $US for a few months more.

#102 Ace Goodheart on 03.03.16 at 11:19 pm

Again, kind of agree with this, but kind of don’t. To figure out why Toronto real estate is in such high demand and short supply, one has to get past the “supply and demand” idea and look at what draws people to Toronto.

Every morning there is this huge migration of people into the city. All the roads are blocked solid with traffic. In the evening, these people all leave, blocking the roads in the opposite direction. There are condo towers all through the city, full of people who also all leave in the morning, head down town, and then head back to their condos in the evening, completely blocking the subway system so that a person wanting to get on a train has to wait in a long line on a stairway and slowly move up, towards full trains with no room.

Why is everyone going down town? What in the world is down there? You have this clockwork migration pattern, that happens at the same times every weekday. It is so predictable you can set your watch. Where is everyone going?

I have a theory: Toronto is home to three notable entities. 1. The head offices of most of Canada’s banks. 2. The head offices of the Law firms that service Canada’s banks. 3. The stock market.

These things, put together in the same place, create employment. They do this by the many, many, many service and support industries they create, and also by making it necessary for Canadian companies to also have head offices in Toronto (near the market where their securities are traded, near the law firms that they use to engage the under writing services of the banks, and near the banks that act as their underwriters and creditors).

That, I think, is where all those people are headed every morning (and where they all flee from, every evening). That would explain the predictability of the migration (and the fact that it doesn’t happen on weekends).

Could it be that the more successful of the herd decide they don’t want to migrate, and instead attempt to live as close to their employment as possible?

Could it also be that large concentrations of money and employment, bring with them the inevitable entertainment and Arts industries that always seem to flourish in successful, money producing cities?

Perhaps we in Toronto have just become Decadent? We are a commodity, a fully mature City that can be sold for a mil or two per crap shack? Maybe we are just popular?

Now I don’t know much about Vancouver, so I have no idea what’s going on there (or even what their economy consists of). But I do know about Toronto. Perhaps that is what is going on here?

#103 CD on 03.03.16 at 11:30 pm

how big are toronto and vancouver? 0.05% of the area of the country? Maybe less. There is a lot of land out there in the rest canada. One can live pretty good for a fraction of the cost outside of toronto and vancouver. Sure one might be missing certain things from the big city, but there are other things one gains as well.

#104 Welcome to Slurrey on 03.03.16 at 11:32 pm

The blog post hit a note with me today, was looking to sell house for last few years and build new , have decided to stay put and renovate ( within budget :)) since house is mortgage free.

#105 TRT on 03.04.16 at 12:17 am

Until this blog recognizes foreign money and its impact, Vancouver will SEEM delusional.

Standard lot in Surrey now at $700K+

New home minimum at $1.1 million

#106 WalMark of Sadkatoon on 03.04.16 at 12:22 am

…S mart man who crunches a lot of data on a fairly regular basis and has experience as an actual Realtor

yes we all agree Ross Kay has real world experience and is intelligent and credible. we just also agree that you’re the opposite

get off the computer and go find a job. seriously

#107 WalMark of Sadkatoon on 03.04.16 at 12:24 am

#67 Mark on 03.03.16 at 8:56 pm

thanks for proving my point and again acknowledging your 3yr error

#108 HeartSutra on 03.04.16 at 12:32 am

We own nothing from this world, life is so short and temporary. We should realize that all we can get from this short life is to enjoy peacefulness and joyfulness that arising from inside of us. Looking outside and chasing the material world that are indeed illusions which drive us nuts and always diving in the river of greed and unhappiness.

#109 Vundo on 03.04.16 at 12:36 am

#64 Garth: I most certainly hope not. Many people appreciate your warnings. I am lucky I found this blog when I was in no financial condition to qualify for a mortgage, otherwise I would have used my soul as a down payment if that is what it would have taken to own RE. Now that things are looking better, I also know better than to sacrifice my freedom and happiness. And what did I have to pay to discover all this? Zilch. This blog is truly a gift. Thank you.

#110 SWL1976 on 03.04.16 at 12:38 am

#85 AfterTheHouseSold

The Book of Awakening
Mark Nepo
‘Let Go of the Rice’

————–

I enjoyed that passage. Thanks

To the people who obsess about Mark like the former tiolet spray… Your childless jabs say much more about you than they do about him

Like everyone here, he may not always get the story straight the first time, but he does bring more to the table than most

#111 observer on 03.04.16 at 1:13 am

2209 East Broadway is assessed for 2015 at $985,600 and is offered for sale at $2,050,000 for a difference of $1,064,400. It’s no wonder people think real estate is a no-brainer.
=============

Wait til next years assessment comes in. # almost all houses will be over the 1.2 million dollar range meaning good bye to home owners grant. Add additional cost for a 25% higher assessment.

#112 Love my Kia on 03.04.16 at 1:27 am

#8 – turn of the tide

Housing porn aside, the Loonie’s been gaining quite a bit in recent days.

Do we expect this trend up to continue? Trying to figure out when to sell some USD at a nice(r) rate…

anyone?
————————————–
I was paying attention when the loon hit 69 cents on the dollar and watched it steadily go up from there. I converted my USD around end of January when I saw it move to 70-71 ish. Hasn’t dropped to those lows since so I think I did good getting out when I did. I think rock bottom was January. I’ve heard reports that seem to confirm my thoughts that the loon isn’t dropping anymore. My take on it anyway.

#113 Maxwell C. on 03.04.16 at 1:28 am

Sneery*.

#114 Tony on 03.04.16 at 1:49 am

Taking a shot at the jobs report. 131,000, big stock market rally after an initial kneejerk dip. Gold up 56 dollars U.S.

#115 JWD on 03.04.16 at 2:07 am

Watched “the big short” movie during a long flight – and then watched it again. What a great movie. Couldn’t help but relate it to the current YVR and YYZ housing markets. Bidding wars, mania, greed and lies. It’ll always go up. Too big to fail, too popular, everyone wants to live here, buy now or never. And every year a new reason for it to rise. HAM, foreign exchange, land locked, no supply, cheap mortgage rates etc etc.

There must a Michael Burry who can see the obvious correction in the future. Or is that Garth Turner? I can see the movie credits now….

#116 Ferninand Metlerback on 03.04.16 at 2:16 am

Garth, given that Equity ETF’s, Bond ETFs or GIC’s and few balanced portfolio instruments you suggest pay cash monthly, how do you get to this conclusion ? Over time you may get a decent return alongside the average beta of the market equal to 6.8% , over a forty year holding, but that includes reinvestment of all dividends, ergo no cash monthly payout, care to explain how a guy gets 6.8% cash monthly in his bank acct?

“That’s an annual cash flow of $135,000. Less taxes (low on dividends and capital gains) and a tax-deductible advisor fee of 1%, that would net about $8,000 per month.

#117 Chuggy on 03.04.16 at 2:35 am

lol when i came out of the elevator this morning hitting the third floor for work two guys were cowered over the secretaries desk talking about how a house near them in north van just went for 600k over asking the secratary was giving thes young guys advice and i heard clearly get in before its too late. Made me chuckle.

#118 Ferninand Metlerback on 03.04.16 at 2:40 am

Figures don’t lie and liars can’t figure, may I introduce Mr Blowhard Himself, the lefts new Little Lord Fauntleroy, The Incompetent, The Man with little intellectual Heft…..The new voice of The CBC Next Governor Generals selection Committee, Trudy Fruit bar( with nutz) Trudeau.

http://business.financialpost.com/fp-comment/kevin-libin-to-justin-trudeau-the-economic-data-always-say-spend

#119 Gordon on 03.04.16 at 3:07 am

Is everything on this website about money? I live in my SF detached home and whether prices go up or down I am in for the long ball. Vancouver is my home. There are more important things than selling and taking a profit now. I grew up here. I have friends and family here. And, until such time as the city rezones my block I plan on staying here. If I were retired then I would consider selling but even then Vancouver is my home. If you can’t afford to live here then buy elsewhere. If you wait the market might drop but then again how long have you waited and how long can you wait? If you can’t afford to purchase then rent and save money. Buy a property when the time is right for you but don’t be foolish and overextend yourself! When I am old I will downsize but for now this is my home. People who flip houses should be taxed heavily if it is their game. A person who owns and lives in their home should not have to suffer because others use homes as commodities and wish to turn Vancouver RE into a speculative affair. It really shouldn’t be so hard to figure out how to resolve this matter, it is just a matter of lack of political will. Tax properties at different rates depending upon length of ownership and whether or not it was used as your principal residence. If more people want to move here and live here then that is just a matter of supply and demand. Stop complaining and start living and making plans for your own future and set realistic goals based on what is, and not on what may never be. Lots of people might never be able to own a detached SF home in Vancouver, so consider living where you can afford to be happy and prosperous.

#120 Buy? Curious? on 03.04.16 at 4:53 am

Why do have to shame the person that lives there or going to live there? The poor realtor is going to have to the show the house at night.

I come to this site because it is to Doomers what HGTV is to newlyweds. This is no longer your a doomer-porn site, it’s become something weird, real weird.

Trump 2016! Because he has BIG fingers!

#121 Old Man Too on 03.04.16 at 6:01 am

So I decided to take a break from all the drivel on this blog and guess what I found:
House prices in New Zealand are high. 5 year Fixed mortgages can be had for 5.35%. One lender has a special 3.95% rate for 18 months. Minimum down payments are 20%, but the banks can help you if you don’t have that much. And they blame the Chinese for buying all the properties and increasing the prices.
Minimum wage: nz$15.00 /hour. No tipping. Gas NZ$1.65/litre.

Australia house prices vary with a slow down in some centres and a “bubble” in others. Mortgage rates 3.99 to 4.96%. 20 % down, but they can help if you don’t have it.. Some concern showing in the newspapers but mostly they blame the Chinese for driving up the prices. Minimum wage: AD$17.29 per 38 hr wk. tipping optional but less than 10%. Gas AD$1.29/litre.

Neither country seems in favour of the TPPA.

And Adelle is everywhere!

#122 Mark on 03.04.16 at 6:40 am

“Garth, given that Equity ETF’s, Bond ETFs or GIC’s and few balanced portfolio instruments you suggest pay cash monthly, how do you get to this conclusion “

Most of them pay quarterly. Its not a big deal to smooth that into ‘monthly’. Either a small margin loan (paid off quarterly), or simply keeping a slight positive cash balance will do the trick. No need to get too caught up on whether a dividend or bond payment is ‘monthly’ versus ‘quarterly’.

Heck, with a $2M portfolio, one may very well be at the sort of ‘proper’ scale that they can buy a basket of the individual stocks and bonds and have the payments coming in almost daily. Lots and lots of ways of approaching the ‘problem’.

“yes we all agree Ross Kay has real world experience and is intelligent and credible. we just also agree that you’re the opposite

get off the computer and go find a job. seriously

Why don’t you go see a doctor or psychologist for whatever illness you’re suffering. How you’ve been behaving is completely and utterly abnormal. Oh and go buy yourself a keyboard with a shift key so you can actually punctuate and capitalize things properly. Maybe people will take you more seriously instead of the laughing stock that you are.

“Does Mark respect himself in the morning?”

Why wouldn’t I?

Yet, your boss (who likely earns $150,000+) doesn’t want to pay you more than $25,000 per year, and doesn’t want to give you benefits.

Sounds like a microcosm of the broader economy. People cry over the government tossing Bombardier a few billion (a few billion that was actually an equity investment that required Bombardier to turn over 2/3rds of the future profits of the C-Series). Yet Kevin O’Leary et al and the other Bombardier bashers are basically silent on the tens of billions in implied subsidy sent, without equity in consideration, to Canada’s banks through the CMHC.

#123 Pichrocolus on 03.04.16 at 7:05 am

Housing affordability crisis in Australia

Any similarity?

http://www.domain.com.au/news/housing-affordability-crisis-takes-hold-as-borrowers-start-to-feel-the-pinch-20160304-gnb2c7/

#124 Renter's Revenge! on 03.04.16 at 7:24 am

#102 Ace Goodheart

All good points, but add to them government jobs. Also, I remember reading somewhere recently that there is a surprising amount of discretionary travel during rush hour periods (which sounds ridiculous – why would anyone get themselves stuck in traffic on purpose?), but I don’t remember the source.

#125 Freeman on 03.04.16 at 7:53 am

Never underestimate the power of STUPID PEOPLE in LARGE NUMBERS.

The pretty well summarizes what we are seeing in the Toronto/Vancouver real estate markets these days.

#126 ender on 03.04.16 at 7:59 am

#64 Timmy on 03.03.16 at 8:45 pm
Garth keeps warning about the real estate market–and it keeps going up…

I warn about having an unbalanced life. But soon I will stop. — Garth

__________

Funny, I understood Garth’s comment to mean he will no longer need to warn because it’ll be too late.

#127 Bytor the Snow Dog on 03.04.16 at 8:03 am

I still can’t believe the stupidity. If someone offered me $2million tax free with the caveat that I had to move to a different area of Canada (or even the world) I’d do it in a heartbeat.

What’s the difference between a hippo and a zippo?

A hippo’s really heavy but a zippo’s a little lighter….

#128 jaybee on 03.04.16 at 8:14 am

Mark, you’ve outdone yourself. Your comments here are have taken your charlatanism to a whole new level.

#129 crowdedelevatorfartz on 03.04.16 at 8:15 am

@#39 westcdn
“The Clintons may be no better than the “Clamplettes of Beverly Hills”….
+++++++++++++++++++++++++++++++++++

I see your diatribe is living proof the Zika virus was in western canadian mosquitos decades before arriving in Brazil.

Are “Clamplettes” those tiny forceps that they grabbed your head with during birth?
At least that explains the rambing paranoia that you spent hours typing……

#130 Charming Bob McGurtz on 03.04.16 at 8:17 am

As a young real tard I knocked every one of those doors at one time…many flakes , losers, perverts , scary, some nice people too, and all very poor. Number of bsmts occupied by little Freddie and his junkie girlfriend 100%, waiting for the folks to kick off. Not a one can afford an uptick in prop tax and will freak ( those under 65 who can’t waive the tax) when they get those superhigh assessments. This will clean out the locals and force sell to HAM will begin in earnest.

#131 crowdedelevatorfartz on 03.04.16 at 8:18 am

@#121 Old man “two”
“And Adelle is everywhere!”
++++++++++++++++++++++++++++++++++++
Fortunately .
This “too” shall pass.
And ignore how she spells her name… she pronounces it ” Ah Delwww”

#132 Ray Skunk on 03.04.16 at 8:26 am

#119

Is everything on this website about money?

Yes. It’s a finance blog.

Do you need us to point you in the direction of other blogs more relevant to your interests?

#133 Soothsayer on 03.04.16 at 8:34 am

Arrest all the crooked realtors and throw them and their governing bodies into jail for life!

Make schooling mandatory for the gullible individuals who listen and trust them!

#134 danoc86 on 03.04.16 at 8:35 am

USA job numbers just hit a grandslam home run 242k jobs unemployment rate unchangeable 4.9%.

#135 Noel on 03.04.16 at 8:44 am

I don’t see how ‘sell now this is the only chance to realize your gains’ is any different from ‘buy now or you’ll never be able to get into the market’.

Well, there is one difference, the people saying buy now or get priced out have been right for the last 10 years.

#136 learningfromyou on 03.04.16 at 9:01 am

Thank Garth for your daily education.

Please could somebody provide a reliable source for comparison of living cost among all the Canadian cities?

After people are allowed to publish on Internet no matter what without moral hazard it’s difficult to trust on the information found.

For some unknown reason :) the realtors, their institutions and their ethic helped me to have a suspicious mind.

Thank in advance.

#137 Rational Optimist on 03.04.16 at 9:14 am

134 danoc86 on 03.04.16 at 8:35 am

The recovery continues. Everyone should be ready for the Fed to raise rates again.

#138 hope & ruin on 03.04.16 at 10:12 am

Comments I heard from 3 different millennials this week:

“You should buy a condo in our building. Prices are going up so fast you basically make money living there.”

“We decided to buy a fully detached not a semi. My boyfriend is an accountant and says house prices will go up by 10 percent next year.”

“My investment property is such a pain. The pipes burst last Saturday night and I’m over an hour away while the basement floods”

#139 common sense on 03.04.16 at 10:38 am

Raise those rates Janet!!!!!!!!!!!

82% of the jobs created were minimum wage!

The economy is boooooooooooooooooooooming!

#140 Bottoms_Up on 03.04.16 at 10:43 am

#136 learningfromyou on 03.04.16 at 9:01 am
——————————————————–
Just click on the provinces on the left hand side.

http://www.statcan.gc.ca/tables-tableaux/sum-som/l01/cst01/cpis01a-eng.htm

#141 Mike in Edm on 03.04.16 at 10:44 am

I’m not sure if I’ve been crossing the paths of complete scumbags in Edmonton lately, or what? Last week when I was returning my Shaw cable box (Thanks for the 6 months of $10 cable Shaw, but I’ll now stick to my Netflix, digi antenna, and Kodi box), the guy behind me was in there b/c he was $250 past due on his account, and making the minimum payment ($200 I think) so that they’d turn his cable back on.

Then this morning (remember, i’m an unemployed loser myself right now), some guy from Kijiji bails on me because apparently he didn’t get paid and couldn’t come and pickup an old ratty mattress I listed for $20 for the sake of getting it out of my house… $20!

Scary.

#142 Bottoms_Up on 03.04.16 at 10:48 am

And here’s CPI by city (note this doesn’t take into account the cost to actually buy a house):

http://www.statcan.gc.ca/tables-tableaux/sum-som/l01/cst01/econ45a-eng.htm

#143 IHCTD9 on 03.04.16 at 10:59 am

#23 gumboot princess on 03.03.16 at 6:59 pm
My daughter (26) and her partner went to the bank to see what they would qualify for if they wanted to buy into the Vancouver market. The bank would happily lend them $550 K.

They asked me if I would help with the downpayment. (Uh uh. NO.) His parents (who live in a large old house 30 min. north of Vancouver) were ready to help.

So, I printed off a few of Garth’s examples about how this is a terrible idea and they accepted it as plausible. I pointed out how incredibly flexible they are at the moment and that prices could go down and they won’t be stuck now.

So, long story short, soon after that their rent went up in downtown Vancouver and they decided to move in with his parents. The parents need some help with the house maintenance these days and the kids pay them a fair rent, too. The four of them are doing well. Four incomes, meals together, gorgeous character home and best of all they are saving money like crazy. She also likes having a dog and cat around without the long term responsibility.

Not sure how this will play out, but for now it is an alternative to ponder.
_____________________________________

Smart.

If they all can get along long term living together, this is the way to get a leg up these days in a housing market on crack.

#144 CHERRY BLOSSOM on 03.04.16 at 11:04 am

Unintended consequences of having very high mortgages will be lack of funds to purchase ANYTHING. These people will have to shop for clothes at Value Village or the Salvation Army and buy the UGLY fruit and veggies from Loblaws. These people will not be able to buy anything frivolous. Down down down we go.

#145 BS on 03.04.16 at 11:22 am

Ferninand Metlerback on 03.04.16 at 2:16 am

Garth, given that Equity ETF’s, Bond ETFs or GIC’s and few balanced portfolio instruments you suggest pay cash monthly, how do you get to this conclusion ? Over time you may get a decent return alongside the average beta of the market equal to 6.8% , over a forty year holding, but that includes reinvestment of all dividends, ergo no cash monthly payout, care to explain how a guy gets 6.8% cash monthly in his bank acct?

You sell part of the capital gains. Best done when re-balancing every 6 months or so.

#146 SWL1976 on 03.04.16 at 11:22 am

#97 Smoking Man

To the familys of 911 feel your pain

MSM flag suckers to my hero . Only found him from blog dogs. Hunter S Thompson.

——————-

Smokey – This quote is for you, and if you haven’t already heard it…

I’m sure you can relate…

The Edge… there is no honest way to explain it because the only people who really know where it is are the ones who have gone over – Hunter S. Thompson

#147 Penny Henny on 03.04.16 at 12:07 pm

Re Toronto housing prices and Mark’s claim that they are down in the last 3 years.
Mark’s argument may be valid on a technicality.
Apples for apples it is possible that Toronto house values, or even Vancouver house prices for that matter, depreciate a bit every year as they get older and more run down.
Where Mark’s argument becomes delusional is that he fails to concede that the price of the land (in Toronto and Vancouver) on which the house sits is rising at a rate that easily surpasses the depreciation of the dwelling itself.
I’m sure he will have a counterpoint. Perhaps it has something to do with the ‘dirt mix’ of the land itself?

#148 BobC on 03.04.16 at 12:11 pm

My investments go up everyday yet everything I read is doom and gloom. Besides here, what can be read that’s honest and positive.
Thank you Garth. Because of you I’m prospering.

#149 Up up up on 03.04.16 at 12:22 pm

Do you people finally get it: Toronto real estate is never coming down. With real estate agents pulling in $250,000 a year and banks getting drunk on mortgage interest, everyone will find some way to keep this going forever. Keep sitting on the sidelines. It’s exactly what the buyers want.

#150 unbalanced on 03.04.16 at 12:23 pm

To 1960 Tiger. Thanks for replying! I like your style. Shoot -right from the hip-classic. Good for you. I mean it.

#151 paul on 03.04.16 at 12:32 pm

#114 Tony on 03.04.16 at 1:49 am

Taking a shot at the jobs report. 131,000, big stock market rally after an initial kneejerk dip. Gold up 56 dollars U.S.
“““““““““““““““““““““““`
GOLD is worthless?
Justin sold all of Canada’s gold so it must be True doh

#152 bdy sktrn on 03.04.16 at 12:34 pm

I also got a good chuckle from the gassy one’s comment! Just read now as i was out yesterday in my favorite place in the world, on the waters edge of stunningly beautiful howe sound working on a boat at the marina. My idea of fun.

Nope not my house but not too far in distance. Mine was also a (much bigger sqft) crapshack when we bought, before I did a total in/out reno back in the late 90’s .

Thin one is on a six lane, 24hr, truck route that never rests. I’m closer to the better part of comm dr on a traffic calmed street which my dog used to sunbathe in the dead center of the street, when cars came by she would lift her head to see but stay put until the car swerved around her.

Anyhow, the story on that place is this: The *proposed* Grandview Woodlands community plan allows for higher density along bdw/nanaimo/comm/1st (the busy routes) , which is where the higher ratios and height mentioned come in. It’s not a done deal yet but will be.

The price is a bit stupid. Seen 1.7-1.8 asks on bdy (don’t know if sold) but this is too much.

1.6m is the highest sale i’ve seen so far, for a lot in a MUCH better location. (kitchener just off comm)

Assessment does reflect many recent sales in the area, its a truly crappy street to live on. The rezoing/land assembly angle is something new for this area and not yet reflected in sales.

….
If somehow airbnb’s are truly banned from stratas then sfh airbnb rates double overnight. My tennant may just get the boot then.

#153 pwn3d on 03.04.16 at 12:38 pm

#110 SWL1976 on 03.04.16 at 12:38 am

To the people who obsess about Mark like the former tiolet spray… Your childless jabs say much more about you than they do about him

Like everyone here, he may not always get the story straight the first time, but he does bring more to the table than most
————————-
He sure does bring a lot of misinformation, that is true. And my jabs have lots of children, thanks.

#154 bdy sktrn on 03.04.16 at 12:39 pm

Perhaps it has something to do with the ‘dirt mix’ of the land itself?
——————-
here’s the ‘dirt mix’ for van (city) since 2012….

nice house , nice area -100% up

nice house , crap area -100% up

crap house , nice area -100% up

crap house , crap area -100% up

he has nothing, no data, squat, but the smell of ross kays backside on his nose.

#155 Bottoms_Up on 03.04.16 at 12:41 pm

#149 Up up up on 03.04.16 at 12:22 pm
————————————————–
to gross $250k that means they need to do $20,000,000 in sales…or the equivalent of about a nice house every two weeks.

$20,000,000 x 5% commission x 0.25

(an agent gets 1/2 the commission, and 1/2 their commission is given to the brokerage).

#156 bdy sktrn on 03.04.16 at 12:42 pm

If you can’t tell +100% from a -xx% you are not allowed, under any circumstance, in any place, to work as an engineer, let alone retail sales. – mark im talking about you.

#157 Mark on 03.04.16 at 12:42 pm

“Where Mark’s argument becomes delusional is that he fails to concede that the price of the land (in Toronto and Vancouver) on which the house sits is rising at a rate that easily surpasses the depreciation of the dwelling itself.
I’m sure he will have a counterpoint. Perhaps it has something to do with the ‘dirt mix’ of the land itself?”

Nope. When I speak of housing prices being stagnant and the sales mix shift being responsible for the entirety of the claimed ‘gains’, I am not using any fanciness concerning the distinction between land and structure prices.

Nothing delusional about that whatsoever. Where delusion comes into play is when the Realtors start generalizing their numbers, which are mostly reflective of the shift in the statistical percentile of the overall market they’re transacting in, to 100% of the market. Its fundamentally dishonest. Garth did an excellent piece a week or two ago where he exposed such in fairly easy to understand terms comparing present versus past listings.

#158 Bottoms_Up on 03.04.16 at 12:44 pm

#141 Mike in Edm on 03.04.16 at 10:44 am
——————————————————
I think what’s scarier is that you would try to sell an old dirty ratty mattress….let it go man!

#159 bdy sktrn on 03.04.16 at 12:52 pm

and to our host here – don’t you dare stop this party or some very bad things could happen to you….

just imagine a highly trained and armed ‘assault team’ of lusty amazons hunting you down and capturing your ass, then while bound to a lazy-boy with velvet ropes, using the best techniques of kimjongnutbar to elicit ‘forced’ daily blog entries. It could happen!

#160 Bram on 03.04.16 at 12:52 pm

#115 JWD on 03.04.16 at 2:07 am

The big short (and financial sector melt down) was not caused by just bad loans.

It was caused by an enormous volume of side-bets on side-bets on mortgages.

I do not know if Canadian mortgages have the same derivatives on them as the US ones had.
Are they packaged up in tranches, and then insurance is sold on them?

I like to think that Canadian derivatives market is both smaller and better regulated. If not, I guess we can hav our own collapse.

Bram

#161 family beagle on 03.04.16 at 12:57 pm

My RE invested friends in 604 are bailing, or would like to bail. They note if you have two sfh, you can sell one and do okay. If you own only one sfh and are living in it, you are screwed. In the time you close on sale of primary residence to the time you search, bid, and close on the next place your profit on the sale has been lost in the bid up, a three month time span. One sold in Coquitlam (a primary residence) and is forced to search 40 km east in order to find comparable residence and keep any profit from sale. He is considering moving out of BC altogether. Currently, Pitt Meadows and Maple Ridge are being bid up to Burnaby price levels. He is frustrated, claiming competion from 20 other bidders on properties he has viewed east of Coquitlam.

They advise to sell and take profit if you are looking at a life change, such as retirement, and move to a smaller, pastoral community where you can retain profits. However, if you are mired in the Lower Mainland and on the property ladder, you maybe riding the wave up, over, and back down again, with only higher property taxes as proof of your investment prowess.

One, with a sfh in Maple Ridge did well (buying at 325k, adding 100k in renos, now valued at 700k) because he paid it off in ten years with help of unclaimed rental income. This “evasion” aspect is considerable with cash renters getting discounts.

I lease land in the Lower Mainland and sublet to agri business. I actually own industrial/farm/small bz revenue property in area code 250. My land holdings have tripled from $.22 per sq ft to about $.70 per sq ft. My sublets have gone from $700/acre to $1500/acre. I don’t pay property tax on leases and the average for props in the interior works out to about $300/yr each. My rent in 604 is $900/mo.

All anecdotal fodder.

#162 IHCTD9 on 03.04.16 at 1:01 pm

#103 CD on 03.03.16 at 11:30 pm
how big are toronto and vancouver? 0.05% of the area of the country? Maybe less. There is a lot of land out there in the rest canada. One can live pretty good for a fraction of the cost outside of toronto and vancouver. Sure one might be missing certain things from the big city, but there are other things one gains as well.
__________________________________________

I never know what it is that draws folks to big Canadian cities these days other than jobs and ethnic enclaves. Everything else about them is crap IMHO.

What am I missing that the GTA has to offer? Arts? Theatre? Entertainment? Nope, when we are in the mood for that kind of stuff, we make a trip in and fill our boots. In exchange, I get to miss out all the substantial drawbacks of actually living there every day – a very long list from my point of view.

Now flip it around – how many folks in big cities own cottages or other recreational “escape” properties outside the city? How many plan to retire outside the city? How’s the traffic going north on the 400 Friday before a long weekend? How many pursue recreational activities that can’t be done in the city – or at minimum, aren’t worth attempting in the city (ATV’ing, Hunting, Fishing, Camping, hiking, horseback riding etc…).

What the heck do folks do for fun in the city? Go to Wonderland or the Ripley’s aquarium every night?

I love ATVing, own a machine (another on the way – maybe even a 3rd) insured, plated and legal to drive on public roads out my way. I drive down old pioneer roads, long unassumed and checkout the remains of old farms and homesteads, lot’s of cool relics just as they were left, old cars/trucks from the 20’s-30’s left abandoned. I’d rather do this than go to a Leafs game any day. An afternoon on the bike costs 3.00 in gas, and .63/day in insurance.

I realize it’s personal opinion, but life is essentially better on all fronts in a decent sized city outside the metro areas.

#163 A Canadian Abroad on 03.04.16 at 1:07 pm

#7 Love my Kia on 03.03.16 at 6:25 pm
In happier news the TSX recovered its losses for the year today. With the Trump fiasco, maple looks better at the moment.”

I agree. I purchased another large lot of ATB203 balanced fund today as I sold off another large holding of USD for CAD.

I think what will happen is real estate will drop in value as the markets go up. Those holding onto that single asset class will lose out on another asset opportunity.

Ever sell real-estate in a down market? Talk about non-liquidable asset! I have and it wasn’t fun.

#164 TRT on 03.04.16 at 1:17 pm

I warn about having an unbalanced life. But soon I will stop. — Garth

Maybe say you were wrong about HAM!? I bet your readership would grow by leaps and bounds. And I would consider investing my money with you.

#165 WalMark of Sadkatoon on 03.04.16 at 1:17 pm

boom!

http://money.cnn.com/2016/03/04/news/economy/us-economy-february-jobs/

haters gonna hate

rekt lol

#166 WalMark of Sadkatoon on 03.04.16 at 1:19 pm

“More good news: job gains in December and January were revised up by a combined 30,000 jobs. And more Americans are getting on the band wagon: the participation rate — an indicator of how many people are working or looking for work — increased in February.”

boom!

#167 WalMark of Sadkatoon on 03.04.16 at 1:21 pm

am not using any fanciness concerning the distinction between land and structure prices.

not only has WalMark of Sadkatoon admitted being wrong for 3yrs he has now admitted that he based his comments on no data. despite the fact that a simple google search shows that Vancouver and Toronto real estate prices have increased despite the sales mix. lol

#168 WalMark of Sadkatoon on 03.04.16 at 1:22 pm

WalMark, you’ve outdone yourself. Your comments here are have taken your charlatanism to a whole new level.

rekt

unemployed in Sadkatoon

#169 Mike in Edm on 03.04.16 at 1:31 pm

#158 Bottoms_Up on 03.04.16 at 12:44 pm
#141 Mike in Edm on 03.04.16 at 10:44 am
——————————————————
I think what’s scarier is that you would try to sell an old dirty ratty mattress….let it go man!
******************************
Why waste my time and money taking it to the dump (esp when I don’t have a truck), when someone will pay me to take it away?

#170 family beagle on 03.04.16 at 1:42 pm

#162 IHCTD9 on 03.04.16 at 1:01 pm
#103 CD on 03.03.16 at 11:30 pm
how big are toronto and vancouver? 0.05% of the area of the country? Maybe less. There is a lot of land out there in the rest canada. One can live pretty good for a fraction of the cost outside of toronto and vancouver. Sure one might be missing certain things from the big city, but there are other things one gains as well.
__________________________________________

I never know what it is that draws folks to big Canadian cities these days other than jobs and ethnic enclaves. Everything else about them is crap IMHO.

Neon. With a neon sign you can spread salt and sugar on a piece of cardboard and sell it to an intellectual.

Maturation ceremonies and rituals in Canada are now skewed to honor hive participants conglomerating in areas of the greatest infestation.

For those who overcome the compulsion to “see and be seen”, the rest of the map is ours. Enjoy.

#171 Ponzius Pilatus on 03.04.16 at 1:55 pm

Called the number.
The spouse answered.
Looks like the ad back fired.

#172 Mark on 03.04.16 at 1:55 pm

“If somehow airbnb’s are truly banned from stratas then sfh airbnb rates double overnight. “

Why? Have people really increased their travel without the hotel industry keeping up with demand? Seems to me that there’s been a lot of hotel rooms added across the country over the past number of years. Maybe some of the hotel owners are a bit whacked in terms of pricing at market clearing rates, and would rather leave their facilities vacant. But eventually the market will take care of that as well.

I do not know if Canadian mortgages have the same derivatives on them as the US ones had.
Are they packaged up in tranches, and then insurance is sold on them?

Not generally. The Canadian MBS market is almost completely and utterly dominated by NHA/CMHC MBS. The performance of which ultimately is derived from the solvency and the performance of the CMHC, not of the underlying housing market.

Of course, one has to question, in the context of the CMHC, whether the Government of Canada will, without hesitation, write the $150-$200+ billion cheques likely to be required to bail it out. Especially in the face of extreme political unpopularity of such.

For example, today we have a Prime Minister who merely said, “because its 2015” in response to selecting a Cabinet. Perhaps he says, “because its 2017” in response to the demands of the bankers and CMHC-insured MBS owners that the CMHC receive billions in taxpayer support at a time when the banks are earning record profits and the public is suffering significant negative equity amongst a substantial portion of the population.

” WalMark of Sadkatoon “

I’m probably not the only one saying this, but GET HELP!

#173 Penny Henny on 03.04.16 at 2:02 pm

Hey Jimmy#17.

Thanks for that link to the geo game.

Awesome

#174 Ponzius Pilatus on 03.04.16 at 2:03 pm

#169 Mike in Edm on 03.04.16 at 1:31 pm
#158 Bottoms_Up on 03.04.16 at 12:44 pm
#141 Mike in Edm on 03.04.16 at 10:44 am
——————————————————
I think what’s scarier is that you would try to sell an old dirty ratty mattress….let it go man!
******************************
Why waste my time and money taking it to the dump (esp when I don’t have a truck), when someone will pay me to take it away?
—————-
Give Christy McGee of SleepCountry a call.
They say they’ll pick up old mattresses and distribute them to the needy. And also give you a 10% discount on a new one.
There you go.
2 flies with one swat.

#175 bdy sktrn on 03.04.16 at 2:03 pm

Further to the 2m dump on broadway.

That is now old news – next door lot value is now asking 2.36 – same size lot.

up third of a million in just a few hours – We all know these will be 3.5mil next week!

https://www.realtor.ca/Residential/map.aspx#CultureId=1&ApplicationId=1&RecordsPerPage=9&MaximumResults=9&PropertySearchTypeId=1&TransactionTypeId=2&StoreyRange=0-0&BedRange=0-0&BathRange=0-0&LongitudeMin=-123.08052592358085&LongitudeMax=-123.04196648678275&LatitudeMin=49.25600146184729&LatitudeMax=49.26884237794229&SortOrder=D&SortBy=1&viewState=m&Longitude=-123.0630004&Latitude=49.2734393&ZoomLevel=14&CurrentPage=1

#176 Noel on 03.04.16 at 2:07 pm

#162 IHCTD9

“What the heck do folks do for fun in the city? Go to Wonderland or the Ripley’s aquarium every night?”

____________________

Bars, restaurants, sporting events, theaters, festivals, going for walks in different neighbourhoods, sports, boating, running, clubs, organizations, food markets with every imaginable type of ethnic food there is, different cultures and people to meet and learn from — all within walking distance or a short transit.

I hate driving, love walking and living close to friends and family. Everything I could ever need to live is a 15 minute walk away – couldn’t get any of that in the exurbs or a rural area. Maybe you get half of it in a smaller city.

I see the appeal of living in the country, I like to go ‘up north’ one or two weekends a year, but I’d sooner cut off my thumbs than live in a rural area.

Also if you ever look at an electoral map, its clear that someone with left leaning progressive views like myself isn’t going to find many like minded individuals outside of the big cities in Canada. It would be draining.

#177 Penny Henny on 03.04.16 at 2:12 pm

#157 Mark on 03.04.16 at 12:42 pm
“Where Mark’s argument becomes delusional is that he fails to concede that the price of the land (in Toronto and Vancouver) on which the house sits is rising at a rate that easily surpasses the depreciation of the dwelling itself.
I’m sure he will have a counterpoint. Perhaps it has something to do with the ‘dirt mix’ of the land itself?”

Nope. When I speak of housing prices being stagnant and the sales mix shift being responsible for the entirety of the claimed ‘gains’, I am not using any fanciness concerning the distinction between land and structure prices.

//////////////////////////////////

If you don’t know up from down it is no surprise you are unemployed. And seeing you get the two mixed up it does explain many of your other theories.

#178 Daisy Mae on 03.04.16 at 2:12 pm

#125: I warn about having an unbalanced life. But soon I will stop. — Garth
__________

Funny, I understood Garth’s comment to mean he will no longer need to warn because it’ll be too late.

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

Maybe he thinks WE’RE unbalanced….

#179 Andrew on 03.04.16 at 2:27 pm

#102

What on earth are you blabbering on about? You describe the standard daily commute in every city on earth, and are somehow trying to state this has something specifically to do with Toronto real estate?

News flash for you. Every city has the same daily commute and yes, every city has higher real estate valuations the closer you get to downtown as people don’t want to commute for an hour or more to work and back. You make out this is some amazing revelation you just discovered.

I didn’t see any suggestion you made either, just stating the absolute obvious.

#180 Bram on 03.04.16 at 2:27 pm

The whole Sales-mix hiding real price changes myth is incorrect.

One only has to look at the differences between mean and median to know that the distribution is not skewed.

Here is the data:
http://maggie-chandler.myrealpagewebsite.com/_media/Documents/2016%20graphs/ve022016.pdf?inline=false

Note the Detached House price graph: the mean and median are tightly coupled. They have almost the same value, and if one goes up, the other goes up as well, and vice versa.

Also note that the Condo price graph has a similarly coupled mean/median, although slightly less so (Apartment price avg is slightly higher than mean, but only slightly, and also not shifting, but constant delta.)

In conclusion: no skew in distribution for the last two years. And prices were rising in the last two years in E. Van. Gosh, who would have thought? Well, anyone with their eyes open and paying attention to what happens in their neighbourhood.

FYI: Vancouver W graphs SFH are very similar (albeit at higher price levels of course.) Vancouver W graphs on Apartment price does show a sizeable difference between mean and median. Yet this delta is constant, and both avg and median are rising.

Bram

#181 Mark on 03.04.16 at 2:40 pm

“The whole Sales-mix hiding real price changes myth is incorrect.”

Pretty hard to take some very unprofessional looking Realtor leaflet seriously. Especially when it contains this disclaimer:

“ABOVE INFORMATION IS FROM SOURCES BELIEVED RELIABLE BUT SHOULD NOT BE RELIED UPON WITHOUT VERIFICATION. REAL ESTATE BOARD OF GREATER VANCOUVER ASSUMES NO RESPONSIBILITY FOR ITS ACCURACY.”

Why would they write that if the data is simply a verbatim dump from MLS? Because when people go to “verify” it (as suggested), quite a different story emerges.

#182 economictsunami on 03.04.16 at 2:44 pm

Two quotes attributed to John Maynard Keynes; who you would think was talking about Vancouver/ Toronto housing markets.

“The market can stay irrational longer than you can stay solvent.”

“The old saying holds. Owe your banker £1000 and you are at his mercy; owe him £1 million and the position is reversed.”

On a lighter note, Mish dissects US Jobs

242,000 Jobs Added in February: 304,000 of Them Were Part-Time; Average Weekly Earnings Sank:

“Jobs came in well above expectations at 242,000 despite tax data collections that support a Job Growth estimate of 55,000 to 85,000.

A quick dive into the details shows the report is a lot weaker than the headline number indicates. Of the 242,000 jobs added, 304,000 of them were part time. That means the economy actually shed 62,000 full-time jobs.

Average hours worked declined as did average weekly earnings despite minimum wage hikes in numerous states at the beginning of the year.”

http://mishtalk.com/2016/03/04/242000-jobs-304000-of-them-were-part-time-average-weekly-earnings-sank/

MSM needs to feed headlines full of Happy Talk, if HFTs are to continue to drive the equities train…

#183 CJBob on 03.04.16 at 3:01 pm

For those who disagree with Mark.

“Never argue with stupid people, they will drag you down to their level and then beat you with experience.” – Mark Twain

#184 jess on 03.04.16 at 3:05 pm

By Peter Teffer
Brussels, 2. Jul 2015, 17:59

EU carbon credit system still ‘at risk of VAT fraud’

A loophole allowing carbon-credit tax fraud resulting in losses of several billion euros has not been fully closed, the European Court of Auditors said in a report published Thursday (2 July).

The EU’s Emissions Trading Scheme market, put in place to reduce carbon emissions, “remains at risk to VAT fraud”, the auditors said in a special report titled The integrity and implementation of the EU ETS.

A carousel fraud involving the trade of emission credits in 2008 and 2009 amounted to a loss of €5 billion for national tax revenues…”

https://euobserver.com/economic/129433

====
Belvedere Management firm wound-up over ‘£36 m boiler room scam’
February 19, 2016 by David Marchant
HIGHLIGHTS

19 companies swindled investors out of £36 m in carbon credit scam, says UK Gov’t department Fraudster firms are domiciled in England, BVI & Spain

A British affiliate of Belvedere Management Group that is ultimately-owned by Cayman Islands-domiciled Brighton SPC has been wound up “in the public interest” in London for involvement in a boiler room fraud that swindled investors out of £36 million. Another Belvedere affiliate is fighting a similar winding-up petition.
http://www.offshorealert.com/british-regulator-winds-up-carbon-credits-fraud-boiler-room-companies-belvedere-management.aspx

#185 Brazil ex-pat on 03.04.16 at 3:08 pm

And the part time mcjob report is in in the USA.

#186 bdy sktrn on 03.04.16 at 3:10 pm

Jonathan Baker is the first to admit he shouldn’t be complaining about foreign investors driving up prices in Vancouver’s red-hot housing market. They helped the retired lawyer pocket millions.

Baker and his wife sold their five-bedroom home for $3 million in December, a 100-fold gain from their purchase price in 1970. The house went for $300,000 over asking after an offshore investor bid up the price and was later flipped several times to other buyers. Now the home sits empty in Dunbar, the telltale sign of a buyer who lives abroad, he says.

“You can’t be too critical when you’ve benefited from it,” Baker, 78, said by phone from his 4,200-square-foot, $1.5 million seaside home in Sechelt, bought using proceeds from his Vancouver sale. “But the city has become a commodity. One group like myself has bought early, we were lucky. But we no longer knew our neighbours. It’s empty.”

Baker’s generation is cashing out as an influx of foreign demand pushes up the average detached home price in Vancouver to a heady $1.8 million. They’re taking the profit and injecting it elsewhere, exporting higher prices to retirement enclaves across the Canadian province. That’s pushing up sales and price growth in these small towns beyond even Vancouver’s torrid pace.

“All these prices are nuts — it really is nuts”
————-
van sun

the extent of the trickle down of the madness in van is expanding. i wanted that house in sechelt for 750k.

global cash – not just china, wants a slice of bc’s kickassedness.

#187 bdy sktrn on 03.04.16 at 3:24 pm

crude up again.

did i miss the bottom?

congrats to anyone in around 30.

seems those cushing tanks never fill up.

with new projects worldwide on hold is a return to 50’s inevitable?

#188 Canada's economy in dire straits on 03.04.16 at 3:34 pm

Stick a fork in it…

February 2016 Canadian Ivey PMI 53.4 vs 58.0 exp

Prior 66.0
Employment 50.3 vs 55.1 prior
Prices 57.8 vs 71.6 prior
Inventories 49.9 vs 61.4 prior
Supplier deliveries 49.4 vs 51.1 prior

But we got expensive RE in 604 and 416!!

Too bad there are no jobs, there is no investment outside the plywood cages and beaver barf boxes and there is generally very very little upside.. oh and let’s not forget the DEFICIT spending.

What a shit show this is going to be when the FED raises rates again, possibly in March when nobody expects it.

#189 US retirement savings data on 03.04.16 at 3:46 pm

Here is a detailed US retirement savings data.

http://www.businessinsider.com/how-much-average-family-saved-for-retirement-2016-3

Just some peek-preview:

The average retirement savings of all American families is $95,776, but there is more to that number than meets the eye. Since so many families have no savings, the median — 50th percentile — family has just $5,000 saved.

The median for families with savings accounts is $60,000

It will be curious to compare it with Canadian retirement savings data and the house lust context.

Is it Canadian or North American “sin”.

Or is it just sharply declining incomes, which forces people to pick either retirement savings or buying their home?

#190 Locals ?? on 03.04.16 at 3:47 pm

Locals buying Vancouver?

Hahahahahaha. Good one!

http://blogs.vancouversun.com/2016/03/04/point-grey-home-sells-for-1-million-over-its-asking-price/?

#191 Locals ?? on 03.04.16 at 3:48 pm

And it’s destined to be torn down. Hahahaha.

Who still believes the Asians aren’t coming??

#192 Ronaldo on 03.04.16 at 3:49 pm

#170 family beagle

”For those who overcome the compulsion to “see and be seen”, the rest of the map is ours. Enjoy.”

When I lived and worked here in the late 60’s early 70’s we used to refer to those people as “the dignified and broke”. Liked to put on a show with all the fancy clothes, etc. but hardly had a pot to pee in. I don’t think things have changed a lot from those times. Talking about the younger generation of course. My age group at the time. It was always very amusing to watch.

#193 Mark on 03.04.16 at 4:02 pm

“Now the home sits empty in Dunbar, the telltale sign of a buyer who lives abroad, he says.”

Or the telltale sign of a Realtor who has decided to hoard houses. To wit:

http://www.theglobeandmail.com/news/investigations/the-real-estate-technique-fuelling-vancouvers-housing-market/article28634868/

“It worries me a lot that this could all come crashing down. I worry about it all the time,” said one Re/Max agent, Khalid Hasan, who said he owns or co-owns 15 to 20 properties, all destined for resale.

#194 Robert james on 03.04.16 at 4:09 pm

Oil up to 36.22 CAD up to .75080 To all of those that shorted Canada ,stand up and take a bow .. Have a nice weekend,,F***tards !!

#195 bdy sktrn on 03.04.16 at 4:28 pm

#193 Mark on 03.04.16 at 4:02 pm
“Now the home sits empty in Dunbar, the telltale sign of a buyer who lives abroad, he says.”

Or the telltale sign of a Realtor who has decided to hoard houses. To wit:…Re/Max agent, Khalid Hasan, who said he owns or co-owns 15 to 20 properties, all destined for resale.

———————–
he prob bragging, but if true and he has held them for 6 months his gains are multi millions

never gets old in van…

1 million over . 10 mil for a teardown. not local cash. jimmy p and chip already have houses.

#196 bdy sktrn on 03.04.16 at 4:33 pm

February 2016 Canadian Ivey PMI 53.4 vs 58.0 exp

Prior 66.0
Employment 50.3 vs 55.1 prior
Prices 57.8 vs 71.6 prior
Inventories 49.9 vs 61.4 prior
Supplier deliveries 49.4 vs 51.1 prior
———————
those are seriously bad results.

gruesome. i wonder what say Garth?

#197 Smartalox on 03.04.16 at 4:48 pm

The Chinese politburo are meeting this week to talk about shuttering zombie industries – mines and factories responsible for over-supply worries, and as a hedge against pollution. The move is expected to lay off six to eight MILLION workers.

China is attempting to pivot it’s economy from one of low-cost manufacturing to one based on middle-class (read credit-fuelled) economic consumption.

I wonder how much of China’s fleeing capital is derived from continuing sales from these zombie industries, and from dumping product in international markets. What proportion of the ‘easy’ profits will dry up?

Also, how will a command economy feed 8 million people who suddenly have no income?

China may soon be eager to have its capital returned.

#198 Victoria on 03.04.16 at 5:05 pm

Victor V

That property is in Markham not even Toronto I was expecting Lawrence park for that price. crazy.

#199 WalMark of Sadkatoon on 03.04.16 at 5:06 pm

#188 Canada’s economy in dire straits on 03.04.16 at 3:34 pm

libs to preside over the collapsing Canadian economy

#200 Ronaldo on 03.04.16 at 5:08 pm

#151 paul on 03.04.16 at 12:32 pm

”GOLD is worthless?
Justin sold all of Canada’s gold so it must be True doh”

$184 million worthless for those 3.4 tonnes they had remaining from the 1023 tonnes they had in 1965 which would be worth over 55 billion today. Most of that 1020 tonnes sold off in prior years would have been sold at prices of 1/4 or less what they are today at $1678 /oz./ cad. Hope they invested the proceeds well. Hope they invested in Vancouver real estate. Can you imagine what that would be worth today? At least 100 times more for sure.

#201 espressobob on 03.04.16 at 5:12 pm

The recent upside in commodity prices are reflected in the TSX composite. Index investors don.t much care anyways.

Be carefull if you choose indiviual stocks like baytex, or tech. Getting whipsawed aint fun. Take profit and know one,s limitations.

Over confidence can prove to be a horrible death to a portfolio.

#202 WalMark of Sadkatoon on 03.04.16 at 5:16 pm

#181 Mark on 03.04.16 at 2:40 pm

thx again for proving my point of having no data and sales mix having no impact on prices in vancouver and toronto

… and bring wrong for 3yrs. you’re on the road to redemption. now let’s try and find someone who will look at your resume

#203 economictsunami on 03.04.16 at 5:25 pm

Trudy on PR mode:

On 60 Minutes this weekend.

Trudeau to U.S.: Pay more attention to the world:

http://www.cbsnews.com/news/60-minutes-preview-prime-minister-trudeau/

And the Economist:

Canadian foreign policy: Trudeaumania 2

http://www.economist.com/news/americas/21693988-can-new-prime-minister-parlay-his-celebrity-influence-trudeaumania-2

And now for something completely different.

John Oliver Destroys Donald Trump (Full Segment) February 28th 2016:

https://www.youtube.com/watch?v=TGc2nN9OguQ

Donald Drumpf eh? Sweeet…

#204 Mark on 03.04.16 at 5:25 pm

“thx again for proving my point of having no data and sales mix having no impact on prices in vancouver and Toronto”

You’ve proven nothing. Now go get that help you seriously need, troll.

#205 Mark on 03.04.16 at 5:28 pm

“he prob bragging, but if true and he has held them for 6 months his gains are multi millions “

Doubtful. He’s likely sitting on losses at this point, after all the transactional and finance costs have been accounted for, not to mention any declines in value which quite likely have occurred. Hence, the ‘worry’ that he expressed to the Globe and Mail reporter.

#206 Bram on 03.04.16 at 5:54 pm

#181 Mark on 03.04.16 at 2:40 pm
Pretty hard to take some very unprofessional looking Realtor leaflet seriously. Especially when it contains this disclaimer:

You’ve never seen someone covering their asses in legalese, just in case they make a typo or misprint?

Look at the last page of the leaflet again: it contains a highly detailed histogram of all the sales (!)

Do you really think that if someone is in the business of fudging data will go to the troubles of publishing a fake histogram each and every month, for each and every district, for SFH, apts and townhouses? Theoretically they could, but… come on.

If you think that they would, it’s not far from saying NASA faked the landings.

Bram

#207 crappy armchair economist on 03.04.16 at 6:01 pm

CAD and oil boost on a strong US jobs report?

Doesn’t that mean more rate hikes for the US? I read somewhere 50 basis points.

Oil up on the prospect of higher US consumption? is that why CAD is up?

Gg

#208 Bill Gable on 03.04.16 at 6:28 pm

A Vancouver real estate agent says even she was shocked when a Point Grey home sold for more than $1 million over its asking price.

The house was listed mid-February for $7,888,000, and sold for $9,000,060 a week later, Bo Park of Sutton West Coast Realty told CBC News Friday.

“I’ve been doing this for close to 25 years and I’ve never seen anything like it,” Park said.

Vancouver teardown in Point Grey sells for almost $2.5M
Housing sales set record February pace in Vancouver, Toronto
“Just before we listed [the house] two agents approached the sellers offering $7.6 million with deposit cheques in hand, so we thought we’d try for $7.8.”

Eleven offers were submitted on the property, which had been with the same owner for over 30 years.

“[It was] more like a teardown,” Park said.

“We had 10 offers from Chinese families,” Park said. “I believe they all had Vancouver home addresses. A good half didn’t speak English at all well.

>> What say you, Mr. Turner?

#209 Alvina Knows on 03.04.16 at 7:15 pm

T2 on 60 Minutes this weekend.

Here is a little teaser…

Lara Logan: “How do you respond to critics that say you do not have what it takes to do the job?”

T2: “You cannot let yourself be defined by the hopes that you will fulfill the darkest wishes of your opponent.”

I will have to tune into the show to find out how Lara follows up on that one!

#210 family beagle on 03.04.16 at 9:35 pm

#192 Ronaldo on 03.04.16 at 3:49 pm
#170 family beagle

”For those who overcome the compulsion to “see and be seen”, the rest of the map is ours. Enjoy.”

When I lived and worked here in the late 60’s early 70’s we used to refer to those people as “the dignified and broke”.

Yep, so much spent on the peel, and little invested in the pulp. Just smile and wave.

#211 Sabrina on 03.05.16 at 8:20 pm

Interest rates-up she goes says Garth. Of course, 242 000 new jobs, 88% are part-time, 82% pay minimum wage. THIS RECOVERY IS INCREDIBLE!

Garth called it. What do think now Garth, 25 basis point hike this month? 50 basis points in June, 1% in September and December? We’re on pace for “north of 3% in 2017″ correct Garth?

The data is in, the recovery is real, Americans have never had it so good! Why do they want Trump and Sanders? Don’t ask questions, just listen to Garth.

#212 ww1 on 03.05.16 at 11:05 pm

There is a very Canadian precedent for dealing the whole absentee owner real estate thing that would likely also deal with the crazy behavior that creates bubbles.

http://business.financialpost.com/personal-finance/mortgages-real-estate/prince-edward-island-the-one-place-in-canada-where-foreign-property-buyers-must-check-in

No racist bias, simple rules.