Conundrum

boneless-modified

Jake & his squeeze bought a new 905 house from plans 18 months ago, and just learned it won’t be habitable until (maybe) mid-2017. Like most moisters, they have a burning question, and naturally come to this blog first, where we find young people highly amusing.

“We’re in our late 20s (recently married) with combined salaries of $170,000 (near equally split) and with modest bonuses should hit $200k,” he says. “Our assets include $70k in TFSAs (mostly liquid, $30K in bank stock and cash of $200k (yes shame on us).

“The reason we’ve been so liquid with our money was to put down a 20% down payment. From our perspective we can either continue renting until the house is ready (a lot can change in 9 months) or we cash out and do something with the gains. From what we’ve been told, the plans is now with between $600 and $650K. I’ve considered the tax implications of an assignment sale and would be curious as to your thoughts about the home and our general financial situation.”

This is easy. First, Jake has to read his APS carefully to see if he can even sell the place before he’s closed on it. In other words, does the sale agreement allow for an assignment? If it does, then the purchaser has the right to sell the paper to a new buyer for whatever price the two negotiate. They can establish a new closing date, Jake collects a deposit, and when the deal is done, he gets all the proceeds at (hopefully) the same time he must close with the builder.

But there’s risk. The second buyer can always choke and fail to close, for example, likely forfeiting the deposit. In that case Jake would have to honour the existing contract, or face the legal consequences. And, yup, there are also tax consequences. The young couple could try to claim the profit as a capital gain, and pay 50% of the profit at their marginal rate, but the CRA might think differently. An audit would reclassify that as income, meaning 100% would be subject to tax – added to existing income, bumping them close to the top tax bracket. Ouch.

So is it worth doing?

Nah. Probably not. Better to close on the house, occupy it for a brief period and then take it to market. While a capital gains tax exemption is unlikely in that instance (the general rule of thumb is a home must be occupied for two of the five years prior to a sale to be exempt), at least the profit won’t be taxed as income. And there’s nothing stopping Jake from marketing the house early, then arranging a long close.

Risk here too, however. The middle of next year is a long eight months away, and lots could happen. US interest rates are going up. So will bond yields and fixed-term mortgage rates. The American election’s an unknown, since Mr. Make-America-Great-Again may try to destroy it by not accepting the election results. Meanwhile the Canadian economy continues to sink, foreign buyers are being treated like barbarians at the gate, and Wild Bill’s mortgage mayhem has the potential to kick 20% of all buyers out.

In other words, do not assume the market next summer will be like the one last summer. I mean, just look at BC. What a mess. Sales are down 90% in some neighbourhoods and prices are crumbling from the top down. The locals think this was the result of the 15% Chinese Dudes tax, but in reality it’s what happens to a market when prices detach from the underlying economy. Things can function so long as people are willing to swallow massive debt, but when that ends, so does the boom.

By the way, housing analyst and rebel realtor Ross Kay points out the current stats showing a collapse in Chinese dudes buying in VYR since the tax was imposed in late July are meaningless. Why?

“Historically we know 80.3% of all sales reported from March through July will close between June 15th and September 30th, which coincidentally just happens to cover the CLOSING data released by the BC gov’t to date on foreign buyers,” he says. “The BC gov’t data shows that of the 59,616 Closings reported between June 10th and September 30th, 2016, only 3,015 or 5.06% were bought by foreigners.”

In other words, no more than 5% of all sales in BC in the months prior to the tax being imposed, he concludes, went to those evil offshore buys. “It appears that those that believed foreign buyers normally command 3% or less of the market were not far off when the maximum is finally revealed in BC.” So, yes, you can blame the politicians in Victoria for the crash now unfolding in Vancouver by imposing a discriminatory tax on a market they didn’t understand. It was always about optics.

So back to Jake.

You can concentrate almost all of your net worth into a single asset, and hope the market survives long enough to get out. You could also sell the paper now eliminating that risk, but be roundly taxed on your windfall profit. Or you could be like most people. Stop reading this pathetic blog, move into your new house, decorate it to impress your friends, let it Hoover up all your wealth (with no Plan B) and trust Justin will protect you.

That should work out well.

182 comments ↓

#1 Zlvery on 10.31.16 at 6:25 pm

What is your problem? The real estate industry is healthy, and the Canadian economy are up to expectations.

Toronto is the best city in the world for our leadership, innovation and thriving multi-cultural homogenity.

Vancouver is the Los Angeles of Canada. Get over it. House prices are not going down in Toronto or Vancouver.

Many of you doomers need some anti-depressants and therapy. You are bitter at our progress and development in Toronto.

Toronto is the greatest city in the world, and you know it.

#2 Hawk on 10.31.16 at 6:32 pm

#68 Cecil Henry on 10.30.16 at 9:04 pm

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

ROTFLMAO – If I could have had a buck ……………for every time, a white guy laid claim to North America, Australia, New Zealand and South America as “white nations” (when in fact the white race is indigenous to none of the above)………….I’d be seriously loaded by now.

<<<<>>>>

Sure Africa for Africans, Asia for Asians, but everything else for Europeans right?

Dude you might wanna read something besides Ann Coulter, from time to time, Just sayin’ :-)

#3 Mr Reality on 10.31.16 at 6:33 pm

That sounds like a nice place to buy at 50% off…….

Mr R

#4 Self Directed on 10.31.16 at 6:37 pm

Millennials at work…

http://www.cbc.ca/news/canada/british-columbia/unbc-student-society-in-major-debt-throwing-campus-life-into-disarray-1.3828504?cmp=rss

#5 Sebee on 10.31.16 at 6:37 pm

Bet you Smoking Man is dressed up in his Comey (commie?) FBI T-Shirt today for Halloween.  You know, Female Body Inspector.  Didn’t everyone have one in high school?

#6 Debtslavecreator on 10.31.16 at 6:51 pm

Arrange a sale now with a large deposit and long closing
Sell Jake sell
Get out while u can
Bond market -that’s all I got to say

#7 Brian on 10.31.16 at 6:56 pm

Cherry pickin stats to diminish ham influence again huh?

#8 crowdedelevatorfartz on 10.31.16 at 6:56 pm

“you can blame the politicians in Victoria for the crash now unfolding in Vancouver by imposing a discriminatory tax on a market they didn’t understand. It was always about optics.”
********************************************
While I agree with the statement “It was always about optics’ because our “Preem-ier” is nothing if not a photo op queen.

I somewhat disagree with the rest of the statement “a market they didnt understand..”

The govt implements a tax on the “foreign problem” ( in reality an almost nonexistant problem) …
.Its a win win scenario in the eyes of most politicians..

They are seen to be “doing something” to help the poor schlepps (insert voters here)still trying to get into the obscene housing market.

And Foreign investors( insert non voters) be they 5% or 25% of the market are punted to the curb.
Who cares? They dont(cant) vote.

The govt can rightfully say they did something …..just 8 months before an election……imagine that.

#9 The real Kip on 10.31.16 at 6:57 pm

Interest rates will not rise in Canada for all of 2017 and certainly not in the 8 months that Jake needs to close even in the unlikely event Yellen (girl that cried wolf) raises rates in the US. They will be able to lock in at 2.25% or less for five years.

Buy the house Jake, get a nice BBQ and enjoy the fact you live in Canada.

#10 bguy1 on 10.31.16 at 6:57 pm

If Jake assigns, he should be careful he is not consideref a builder under the Excise Tax Act. If he falls under the definition, there will be HST on the assignment as well.
http://www.cra-arc.gc.ca/E/pub/gi/gi-120/README.html

#11 Seriously? on 10.31.16 at 7:00 pm

Only in politically correct Canada do we call an anti-foreign speculation tax “discriminatory” and “racist”. It’s always ignored on this blog that the tax, only applied to a single city where due to speculation people can’t even afford to rent anything now let alone buy, is based on one from a certain region of the very country that this blog tries to claim discrimination against. In fact, Hong Kong is even more restrictive in that they limit the number of houses which can be purchased.
But I don’t even want to talk about it anymore. What I want to know is why over the past several months this blog has been slowly morphing into a leftist political blog complete with accusations of racism, bigotry, xenophobia, and all of the common slurs dished out against people who have opposing view points to the left. Heck, the host even discussed closing comments, inline with what all of the major Canadian left-leaning online publications have done over the past couple of years. Why? Because people don’t all have collective opinions?
Is it too late (or perhaps now too boring) for this blog to return to being a financial blog? That’s why I started reading this site.

#12 The Wet Coast on 10.31.16 at 7:04 pm

Let me say from the outset I believe many of the folks that have arrived in Vancouver from China and other places will have a long term positive impact on the lower mainland. Many are my neighbors from mainland China are good and hard working folks. When I take may son that grew up in the deep South to the local area for skating lessons I am pretty much a minority. It doesn’t bother me at all. It struck me that the folks are doing everything they can to fit in. Including learning to skate and playing hockey. I see it every day at hockey arena, schools and in my community.

Many Chinese fathers are forced to continue to work in China but want a better life for their children. They want to start businesses here but find it difficult to do so. I believe they will eventually succeed in moving their lives here. I also believe the left wing lunacy that has perverted much of BC needs to go. Longer term I am sure these folks will be instrumental in leading this change.

But Garth I live here. And I don’t care what the latest guestimate on the foreign buyers is. It is large and has been for some time. I live here and you don’t. Peter the Postman isn’t buying $3,000,000 tear downs in Burnaby. All the other factors you talk about including lower interest rates and FOMO are also true. But so are the NIMBY’s that block development at every turn and the war on cars being quietly waged by the left wing loons on city councils. My family are builders and investors. Try building anything in the lower mainland. Endless government stupidity and I have some excellent stories.

I believe we are seeing a real estate crash that will dwarf anything that has happened before and that it will be talked about for decades. I also believe the folks that are coming here will transform the Vancouver area in a way that is long over due.

#13 Context on 10.31.16 at 7:05 pm

Poor Jake who bought a house on plans from a builder in 905. Seems this builder is a bit slow and what if he has to declare bankruptcy before completion with a bank in first position from the interim loan advances?

#14 Freedom First on 10.31.16 at 7:11 pm

Yes. Jake and his squeeze have what I call a 1st world problem. They are doing well. So far.

That being said, J&S reminded me of a topic I see as being of extreme importance. Let us call it “The Art of Self Sabotage”. There are people from all walks of life world wide who have, or are, working on perfecting this Art. “They did/do not” realize the enemy is themselves.

Fortunately, there is hope. The moment of “awareness/the light coming on” for anyone, can happen at any moment.

For myself, I have experienced the warm fuzzy feelings of being a small part of this happening for a number of people. These experiences are nearly as satisfying as my own good fortune. But not quite, of course.

I also believe, the number of people Garth has been Blessed to experience this happening with, and just through this pathetic blog alone, would be mind blowing. Altruism at it’s finest.

#15 Freedom First on 10.31.16 at 7:21 pm

#1 Zlvery

Yes. I lived in TO for years. Also 3 other Provinces. Zlvery, maybe you are right. I know, through living elsewhere plus Alberta for a number of years now, that the rest of Canada refers to Toronto as the center of the Universe.

#16 Paul on 10.31.16 at 7:21 pm

I think as long as Jake moves in the length of time he needs to live there is irrelevant as long as he did not buy it to flip. He did the deal two years prior to closing.
If he moved in for even 6 months its still his principle residence. I know this will be challenged inmo.

#17 Marty mcfly on 10.31.16 at 7:26 pm

Trick 0r treat happy halloween

#18 SimplyPut7 on 10.31.16 at 7:41 pm

I’m not sure which 905 area they are planning to live in, but the 416 and 905 area around me has already seen a slowdown; prices have been slashed and still no interest in the home, homes for sale are empty and for sale signs stay up for longer than they have in a several years.

If it’s not a home they plan to live in for the next 10 -15 years, they should sell and run.

#19 GreaterFool D. on 10.31.16 at 7:43 pm

Who woke up Zlevry?

#20 Jungle on 10.31.16 at 7:47 pm

Why not just live in the house? Isn’t that the reason you bought? You have high income for your 20s and some savings I would just keep it and move on.

#21 Context on 10.31.16 at 7:51 pm

Tonight will be going to my old rant room which I left on January 1st, as am told many a name comes in and the mean old women say it is me and these psychos trash these innocent people. I will be there tonight with the name they know to freak them out for trick or treat as revenge is mine alone. Let the battle of words begin; it is a mean room and they miss me dearly.

#22 Tom jones on 10.31.16 at 8:00 pm

If rates are destined to be lower in Canada….why are preferred indexes moving upwards?

#23 Prime Lives Matter on 10.31.16 at 8:02 pm

I’ve had enough of all this political correctness that only the looney left gets to participate in. I’ve decided to start my own protest called Prime Lives Matter, which addresses treatments that only Prime Numbers have to endure.

It’s come to my attention that Prime Numbers (1, 3, 5, 7, 11, 13, 17 etc.) are being systematically discriminated against because they are factorless. This offensive and non-inclusive behavior cannot be allowed to continue.

I want to see boycotts of all Mathematics classes in all Universities and Colleges start and continue by all true Social Justice Warriors until this practice stops. Without factors, it is obvious to all that Prime Numbers are unable to participate in hetero-normal practices such as division, and this is creating resentment in the Primo community.

Shout it loud and proud everyone …”Prime Lives Matter!!!”

#24 Just buy the damn house on 10.31.16 at 8:03 pm

You’ll probably end up with $50K in cash after buying not counting what you will have saved until the house is ready plus you have $100K in investments. Still plenty liquidity left over.

With a net take home of what, $130-140k/yr in salaries and being in your late 20s, plenty of time to invest to achieve Garth’s Rule of 90.

Too many double snake eyes trying to dump home before moving in.

Are Moister’s really this dumb?

bsant

#25 Smoking Man on 10.31.16 at 8:09 pm

Hillary is losing it on Twitter or is she. She keeps going on about Russia…

She’s losing huge now. I would not be surprised by a Usa Russia confrontation event in Syria with in the next few days.

#26 Happy Halloween Folks on 10.31.16 at 8:13 pm

Happy Halloween blog dogs

Work hard, save hard, invest right. If there is a crash please don’t gloat; these people are our country folk. This won’t be easy for anyone.

#27 Mark M. on 10.31.16 at 8:13 pm

“US interest rates are going up.” – Garth

Of course not. Rates in the US will be coming down in 2017.

#28 TurnerNation on 10.31.16 at 8:19 pm

BPOE?

http://www.cbc.ca/news/canada/british-columbia/record-broken-for-most-rain-days-vancouver-1.3829506

“Record breaking number of rainy days in Vancouver
It rained 28 out of 31 days this month in Vancouver, surpassing the old record of 26 days”

#29 Pete on 10.31.16 at 8:20 pm

“Toronto is the greatest city in the world”. LMAO. Go anywhere outside of Canada and ask people to list the top cities worldwide. You’ll hear the usual, Paris, Hong Kong, Los Angeles, New York, Nice, London, Sydney, Boston, San Francisco, Rome, Madrid, Singapore, Vienna, Venice, etc. Never once does Toronto enter the discussion.

#30 TurnerNation on 10.31.16 at 8:29 pm

Living up to nickname of Shttyplace – massive ghettoized blocks. Many more are planned all hugging the Gardiner Distressway.

In Soviet Kanada condo blocks you.

http://www.cbc.ca/news/canada/toronto/cityplace-mould-1.3827475


CityPlace condo residents worried about health as black mould found in building

Management says it’s working on a fix after mould found in several common areas”

#31 Happening now on 10.31.16 at 8:30 pm

I also live in vancouver and have worked in the city fir the same period. To believe that HAM is only 5% is simply ridiculous !!!. You choose to believe the stats that support your belief. …reality is something obviously different.

#32 Braj on 10.31.16 at 8:41 pm

#1 Zlvery on 10.31.16 at 6:25 pm
What is your problem? The real estate industry is healthy, and the Canadian economy are up to expectations.

Toronto is the best city in the world for our leadership, innovation and thriving multi-cultural homogenity.

Vancouver is the Los Angeles of Canada. Get over it. House prices are not going down in Toronto or Vancouver.

Many of you doomers need some anti-depressants and therapy. You are bitter at our progress and development in Toronto.

Toronto is the greatest city in the world, and you know it.

I’ll have what you’re having.

#33 the other white meat (pork) on 10.31.16 at 9:00 pm

#11 Seriously

“Is it too late (or perhaps now too boring) for this blog to return to being a financial blog? That’s why I started reading this site”

That’s why I came here too, but I stayed for the alliteration(Wild Bill’s mortgage madness, like an old Cal Worthington car ad). There has been a lot of name calling that is usually associated with the political left. Hopefully that will end soon and we can go back to the original program.

#34 Kuato Lives on 10.31.16 at 9:24 pm

Free Mars.

#35 Mark on 10.31.16 at 9:25 pm

All this talk and worry about tax consequences (which aren’t even all that likely at this point given stagnant RE prices in the GTA for the past few years and now an accelerating downturn) really reminds me of the Nortel era. Lots of people didn’t sell at anywhere near the top. Not because they didn’t acknowledge that Nortel was overvalued and in a bubble, but rather, because they were afraid of having to pony up a few bucks in tax.

With the sort of loss that could very well be in the cards once this property is delivered and disposed of, these folks might be begging the government for ‘income’ treatment of the gain. Which of course, may very well be denied as they clearly are not involved in the business of RE supply, but merely purchased what would be more akin to a futures contract on a house. If the CRA really digs in, they might even consider it a principal residence and deny any tax credit/deduction for the loss.

#36 common sense on 10.31.16 at 9:34 pm

Any views on oil prices in the next month or 2?

#37 A belieber on 10.31.16 at 9:35 pm

and naturally come to this blog first, where we find young people highly amusing.

right back at ya

#38 Harbour on 10.31.16 at 9:43 pm

Hey home owners… what’s your reno bill per month? Just curious… I think it’s a couple hundred a month, maybe three hundred a month if it was more then a light fixture.

#39 toronto1 on 10.31.16 at 9:46 pm

So, im sot sure i get it? 2 people with 2 good steady incomes that should be able to float the mortgage no problem are looking at selling the assignment out of fear? fear that the market will be worse off in 9 months?

Fear of losing money? fear that you wont be able to sell for a profit later? was the intention of buying the house to make a profit and sell when it was finished?

so from greed to fear?

A house is a place to live- not a commodity or stock, if the area and home is nice and works with your future plans, keep it.

#40 dzh123 on 10.31.16 at 9:46 pm

I for one can’t wait until your wish of a Clinton landslide is realized. She will ensure generational control of SCOTUS and immigration reform which may soon offer Dems such decisive control that they can institute constitutional amendments with impunity. One of her much talked-about policy prescriptions (sensible or more likely not) is to buy drugs in bulk for medicare/medicaid +/- obamacare plans to keep those programs afloat. Another way to do it would be preferential bulk purchase by a new ‘government option’ on Obamacare exchanges. The rhetoric has ramped up and it’s now endorsed by both candidates (http://www.politico.com/story/2016/07/obamacare-prescription-drugs-pharma-225444). It was nixed originally only because dems needed the political capital and pharma support, which they won’t need with the coming supermajorities…

I wonder what that does to Canadian out of pocket and provincial drug benefit costs (…our tax rates)? I suspect it will not be pretty for bulk purchasing countries which compare disfavorably to the state of California (without immigrants being legalized yet…). Let’s see how her handling of TPP and a possible NAFTA renegotiation goes for Canuckistan too…

#41 conan on 10.31.16 at 9:49 pm

“In other words, no more than 5% of all sales in BC in the months prior to the tax being imposed, he concludes, went to those evil offshore buys.” Garth

His 5 % does not include under the table, nefarious, pseudo origin, stinky crime money.

Me, I think Vancouver was the money laundering big time capital of the world for the last couple of years. History will prove me right or wrong.

P.S. It’s Halloween and you can’t find a hottie in a cat suit pic? You put up eggs?

#42 Harbour on 10.31.16 at 9:54 pm

Hey home owners… how much did your house depreciate this month? Just curious… I think it’s a thousand, maybe two thousand if you don’t have a back alley.

#43 Pulsars are Cool on 10.31.16 at 9:59 pm

More housing stuff. jeez How do you do it day in day out!! Stunning.
Don’t buy too much house.. ridiculously simple… but people are nuts …oh well ….who cares.

Now Trumpeter

You gotta go 7 days straight on trump….. wall-to-wall… it is all just stunningly insane all round… reality TV will never match this…. and then it’s not gonna end just go on and on for the next 4 years who ever wins

#44 LOLOLOLOLOLOLOL on 10.31.16 at 10:00 pm

#29 Pete on 10.31.16 at 8:20 pm
“Toronto is the greatest city in the world”. LMAO. Go anywhere outside of Canada and ask people to list the top cities worldwide. You’ll hear the usual, Paris, Hong Kong, Los Angeles, New York, Nice, London, Sydney, Boston, San Francisco, Rome, Madrid, Singapore, Vienna, Venice, etc. Never once does Toronto enter the discussion.

HES A RE PUMPER YOU DUMBASS.
HOW MUCH MORE OBVIOUS COULD IT BE.
-40 ALL WINTER AND HUMID ALL SUMER AND THEREFORE BEST IN TE WORLD FOR WOMAN….BLAH…BLAH….BLAH….

#45 tony on 10.31.16 at 10:02 pm

You realtors on this blog are a joke. There are no large numbers of rich Asians coming to Canada to buy property from Canadians for stupid sums of money. Just because you repeat it over and over doesn’t make it true. Stop CMHC and see if your stupid theory holds true. Why anyone would listen to a word from a realtor boggles the mind. Debt and easy credit is ONLY reason and the stats and numbers proves this. Realtors have no proof but their word. The government should regulate the RE industry like they do with the financial industry.

#46 traderJim on 10.31.16 at 10:03 pm

Mark re: DLR.TO and DLR.U.TO

I didn’t really want to take up Garth’s valuable space here to explain how this works, but since Mark seems so intent on spreading disinformation, for some strange reason, I will explain it, step by step, so even he might understand.

And it really is something that can be used by anyone who ever changes more than a few hundred dollars of loonies to USD or vice versa.

Banks normally charge 2.5% on retail fx. So, on a $10,000 amount, you pay $250. On $100k, the fee would be $2,500. That’s a lot.

A good broker MIGHT give you a little better deal on large amounts, usually over $10k, in my 30 years experience. So maybe 1.5%, or $150 on $10k.

Now lets look at DLR (range today $13.32 to $13.35 CDN, and DLR.U (range today 9.94, that’s right, just 9.94, in USD).

Wow. Huge risk there Mark.

So if you have $10,000 USD that you want to exchange to CDN, you buy 1,005 units of DLR.U, at a cost of $9,989 usd plus $7 to $10 commission. Lets round it up to $11 and say your cost is $10,000 USD.

Now, your broker may or may not make you wait until the DLR.U trade settles. Mine does not. So I turn around and immediately sell 1,0005 units of DLR.TO, the Canadian version, and receive $13,386 in Canadian funds, less let’s say another $11 commission.

Net result: I exchanged $10,000 USD for $13,375 CDN, so I received a premium of 33.75%, which is the same as saying I exchanged at a 1.3375 CDN or if you like to think of it the other way around at 74.77 US.

The fee I paid is $22, or a commission of 0.22%.

Now, Mark, looking for you to tell me which broker is it that offers that % commission.

If you can’t, I’d say, makes you look like you don’t know what you are talking about.

Sorry, but I think a financial blog should not be giving people nonsensical financial advice by people who are so clueless and lazy that they don’t even take time to look into a matter before commenting upon it.

So, basically, if you have more than $640 to exchange, DLR and DLR.U will be cheaper that paying 2.5%. Having to wait a few days for settlement, up to 6 in total, means it’s probably only worth the trouble if you have larger amounts.

If you have tens of thousands to exchange, it will save you enough to pay for your Anguilla trip.

You’re welcome.

#47 mike on 10.31.16 at 10:05 pm

DELETED

#48 Context on 10.31.16 at 10:06 pm

Windows crashing; elevators that don’t work; wild parties from renters; the men in black coming and going; strange clowns in the neighbourhood; dogs barking; the pet python that is missing; the gal upstairs who is holding tap dancing classes at night; and now black mold. Life must be exciting living in a Toronto condo high in the sky with another one being built that will block out the view.

#49 Doug t on 10.31.16 at 10:16 pm

The hangover for many is going to be a killer. My sister was in a balanced portfolio for 15 years and lost her shirt in 2008 – markets now are so unbalanced it’s like roulette – sure the banks “high interest” GIC’s give hardly anything but at least you aren’t constantly worried by these unsettled economic times and the swings that happen. You only live once – why bother risking your financial future to gurus.

Obviously your sister panicked and sold into the storm, since a balanced portfolio fully recovered in one year – zero losses. DIY investor? — Garth

#50 traderJim on 10.31.16 at 10:20 pm

Just checked Royal Bank’s currency exchange online, the rate for today for $10,000 USD is 1.3030, so they will give you $13,030 CDN.

Using DLR.U therefore would give you an extra $345 after all fees.

Just FYI, apples to apples comparison, all rates from today.

No need to trust me, look it up yourself or ask your broker. A good one (TD Waterhouse in my experience) can walk you through it.

#51 Rock Beats Paper on 10.31.16 at 10:20 pm

“US interest rates are going up.”. Garth

That is not a foregone conclusion. One year ago this blog was reporting the likelihood of 4 rate increases during 2016.

http://www.bloomberg.com/news/articles/2016-10-31/three-of-fed-s-own-primary-dealers-warn-hikes-on-hold-until-2017

#52 WUL on 10.31.16 at 10:20 pm

Re: Rain in Vancouver 28 Days of 31 in October

A miserable place. When I lived there, I experienced a December with 24 hours of sunshine. I was miserable. Depressoville. Returned to the Stampede City. Sunniest joint in the Dominion. Unemployment central, broke, treeless and semi-arid. But sunny.

#53 Dodgedbullet on 10.31.16 at 10:27 pm

Garth, some comments tonight complain about your style and content.

I feel mostly complete in my education from you, so you have my blessing to shut this thing down if you want a break.

Thank you for the years of service, you have helped many people including myself.

I will be in touch when I Crack 500k

Ben.

#54 WalMark of sadkatoon on 10.31.16 at 10:28 pm

Toronto is the greatest city in Canada

Bar none

To the moon!!

#55 45north on 10.31.16 at 10:54 pm

Mark: Lots of people didn’t sell at anywhere near the top. Not because they didn’t acknowledge that Nortel was overvalued and in a bubble, but rather, because they were afraid of having to pony up a few bucks in tax.

that was my thought too

#56 Jimmy Doo on 10.31.16 at 10:58 pm

“Toronto is the greatest city in the world”

not by a long shot

#57 mouldyinYVR on 10.31.16 at 11:07 pm

Strata meeting in Coquitlam goes terribly wrong…. as always – buyer beware!
http://bc.ctvnews.ca/video-of-mountie-dragging-elderly-man-down-stairs-prompts-police-probe-1.3137671
” As a young girl cries and screams, one Mountie can be seen grabbing the elderly man, who is lying on the ground, and pulling him toward the stairs. “Stop resisting,” the officer yells before apparently yanking the man down a staircase.

Coquitlam RCMP Supt. Sean Maloney said Mounties received a report that the strata meeting had “gotten out of hand and that some parties in attendance were potentially fighting” around 10:30 p.m.”

#58 Shannon on 10.31.16 at 11:08 pm

Larry Berman, a knowlegeable expert recognized for his clarity and skill comments in the NP that “governments can’t afford to raise rates”. All those of us who’ve been saying the same thing for years have been getting pied by Garth. Is it Larrys turn?

Junior T has launched another 40 billion into the toilet this year and the years of zany lib-tard spending are far from over. Canadian city and sub governments like TO are the biggest non governmental debtors on the planet.

What’s the argument that any Liberal will allow any rate increase?

#59 greyswan on 10.31.16 at 11:17 pm

All foreign purchases in Canada should have 15% tax to start.
My definition of foreigner is someone does NOT have
Canadian passport…landed immigrate included useless for professional work !!
Should not be able to buy waterfront property and purchase new homes only as in Australia…and if are not occupying residence then must sell property!!

Want the U.S. to treat us similarly? — Garth

#60 NEVER GIVE UP on 10.31.16 at 11:20 pm

#8 crowdedelevatorfartz on 10.31.16 at 6:56 pm
The govt can rightfully say they did something …..just 8 months before an election……imagine that.
__________________________________________
While I dont care for the bathroom humor of your handle, your comment is right on!.

Nothing will save my vote for Christie now. It is too late. They were too greedy and waited too long.

It is time to punish her.

#61 Bram on 10.31.16 at 11:23 pm

#1 Zlvery on 10.31.16 at 6:25 pm
Vancouver is the Los Angeles of Canada.

Oh, what that desert state wouldn’t do for 28 rainy october days!

http://bc.ctvnews.ca/sog-tober-vancouver-breaks-record-with-28-rainy-days-in-a-month-1.3139787

Then again, Vancouver would sure love a little more of that L.A. sun shine in october.

#62 Smoking Man on 10.31.16 at 11:26 pm

Herdomoter reporting.

Hillary getting tossed under the bus by the machine now.

Wow…..

I’m going to rock star… Scary.

I’m such an idiot. I blame it on booze.

#63 Smoking Man on 10.31.16 at 11:29 pm

#50 traderJim on 10.31.16 at 10:20 pm
Just checked Royal Bank’s currency exchange online, the rate for today for $10,000 USD is 1.3030, so they will give you $13,030 CDN.

Using DLR.U therefore would give you an extra $345 after all fees.

Just FYI, apples to apples comparison, all rates from today.

No need to trust me, look it up yourself or ask your broker. A good one (TD Waterhouse in my experience) can walk you through it.
…….

Dude get with the times, 1/4 of a point.

http://www.knightsbridgefx.com

#64 Mark on 10.31.16 at 11:49 pm

“Junior T has launched another 40 billion into the toilet this year and the years of zany lib-tard spending are far from over.”

Actually only $22B over the first year of Justin T’s administration, which was better than Harper’s average of $26B per year, not even inflation adjusted.

The Trudeau administration has, to date, proven itself to actually run a lower YoY deficit than the Harper administration (which left a >$20B deficit in its final year but had the audacity to claim it was only a tiny deficit!).

Source: http://www.bankofcanada.ca/markets/government-securities-auctions/goc-t-bills-and-bonds-outstanding/

Care to revisit your comments now that you know the facts?

Now, Mark, looking for you to tell me which broker is it that offers that % commission.

Interactive Brokers. 20bp (0.20%) for the entire transaction. While your deal with DLR will cost you 2 full commissions, in addition to that spread. And no white knuckling over whether the market maker on the other side of your transaction wouldn’t withdraw its bid or ask suddenly, as you only have to do one trade.

This is one of the areas that Canadian retail brokerage customers should really be pushing back against their brokers. Because if everyone stands up and does nothing about it, the abuse will continue.

(then again, I’m a big bank shareholder, so I guess the phrase “methinks thou doth protest too much” might be applicable!)

“Hey home owners… what’s your reno bill per month? Just curious…

The rule of thumb I tell people to use is to set aside approximately 1% of the present price of the house for maintenance/depreciation reserves. This doesn’t mean that you’ll be spending 4 grand in a certain particular year on SFH maintenance, but there will be some years down the line that have some really big budget busting items. 1% may even be conservative, but its a good starting point.

#65 WUL on 11.01.16 at 12:02 am

Turner:

I strolled by the Raymond James office on Hardin Street near Franklin* Avenue here in Ft. Mac today. In the window was a placard sized display cheque from the Raymond James Canada Foundation with the payee being the Red Cross for the wildfire relief effort up here. $100,000.

My thanks to you and your colleagues. Appreciated.

WUL

*Sir John Franklin is featured on a historical plaque on the streets of downtown in the Mac. Appears that he travelled overland through this region 2 or 3 times to map the Arctic Coast. Some of the plaques contain errors (e.g. David Thompson’s for chrissakes!) and that is why I say 2 or 3 times. Thank goodness that Harper rescued the Franklin Expedition single handedly.

#66 greyswan on 11.01.16 at 12:06 am

Garth….try Hawaii….ask West Vancouver mayor!!

#67 Alvina Knows on 11.01.16 at 12:16 am

#46 traderJim on 10.31.16 at 10:03 pm

I have used NG (with DLR trades) for several years on regular monies coming out of the US.

The “smarter” investors relish in the steadily increasing US$ during those times and ignore the minimal trading fees to execute the NG.

Interactive Brokers has good FX rates, but they would appeal to a greater number of people if they figured out how to offer RESP accounts. Without that priority in services, they will be ignored by the “smarter” investors.

#68 Spectacle on 11.01.16 at 12:20 am

Regarding :
#25 Smoking Man on 10.31.16 at 8:09 pm
Hillary is losing it on Twitter or is she. She keeps going on about Russia…

She’s losing huge now. I would not be surprised by a Usa Russia confrontation event in Syria with in the next few days.
*********************** response *****
Hey Smokey : agreed, but….
Russia involvement is 3/4 of the way into it already…..while Clinton thinks she/it hasn’t even begun yet. She’ll try something, but Russia hasn’t even clicked the trigger lock off yet. One shots, one ……..well let’s call it cleaning out the swamp!

As Garth said, conundrum.
Ps: why do people complicate their lives so much. 18 months to build a stick house? Gosh, idiot .

#69 bdwy sktrn on 11.01.16 at 12:21 am

#35 Mark on 10.31.16 at 9:25 pm
—————-
you are one messed up dude.

your ideas are foolish.

#70 Ponzius Pilatus on 11.01.16 at 12:30 am

#57 mouldyinYVR on 10.31.16 at 11:07 pm
Strata meeting in Coquitlam goes terribly wrong…. as always – buyer beware!
http://bc.ctvnews.ca/video-of-mountie-dragging-elderly-man-down-stairs-prompts-police-probe-1.3137671
” As a young girl cries and screams, one Mountie can be seen grabbing the elderly man, who is lying on the ground, and pulling him toward the stairs. “Stop resisting,” the officer yells before apparently yanking the man down a staircase.
Coquitlam RCMP Supt. Sean Maloney said Mounties received a report that the strata meeting had “gotten out of hand and that some parties in attendance were potentially fighting” around 10:30 p.m.”
—————-
Strata Fight in Canada.
Don Cherry approved.

#71 prairie person on 11.01.16 at 12:36 am

Bloomberg says that oil could go back to 40.00. Not so cheery news in the face of Xmas. When there are so many players, why do people think that there is going to be an easy agreement? Any one of them can sabotage an agreement. The real question is if/when oil goes back to forty dollars what should one do? At sixty a lot of Canadian companies can survive. At forty, not so many.

#72 taxable on 11.01.16 at 12:38 am

How come Garth is not encouraging Jake to unload that ‘home purchase?’
Capital gains or not, isn’t it wiser to go for the sure thing, which is a possible profit…..than to wait until Jake has a loss?
Why are folks so scared of paying taxes on their gains? Only half the gain goes on your tax return, line 27

Canada’s highest tax bracket is about 50%
Therefore, a $100k gain would cost roughly $25k in taxes.

Put it this way: It’s like paying CRA a loonie, & getting back 75 cents in change. HOW does that hurt anyone?

#73 Jonathan on 11.01.16 at 12:45 am

This blog can spew all the propaganda it wants. I’m still not selling my detached home in Vancouver and buying paper stocks that can go worthless. I’m sure wikileaks is archiving emails of this propaganda mini machine.

#74 traderJim on 11.01.16 at 12:48 am

As someone who spent almost 40 years in Toronto, I’d rate it a so so, rather boring city, and definitely on the ugly side if you are a fan of decent architecture. Traffic is now so bad it makes it unbearable.

Great cities: Tokyo (the best, imo), London, Buenos Aires (best for the money), Paris, Barcelona, NYC.

Interesting cities to spend a few months: Bogota, Lima, Mexico City, Florence, Edinburgh, Chaing Mai, Montreal in summer, Vancouver.

Places I just did not enjoy: Bangkok, Quito, Winterpeg, Edmonton, Florida.

Good places to retire and live inexpensively: Lima, Buenos Aires. Both have great food, lots of culture, inexpensive. Lima has amazing weather, BA has more things to do.

Hope to check out Portugal soon, it sounds promising.

#75 nonplused on 11.01.16 at 12:57 am

I think I’ve finally gotten my computer simulations working as good as that guy in India, although I’ve reached different conclusions. Hillary will win the Electoral College and thus the presidency, as Garth has predicted many times. But then all hell breaks loose because Trump will clearly win the popular vote and they won’t be able to hide it in the age of Wikileaks and exit polls.

The idea of the US Electoral Collage is so out dated. It made sense when they didn’t even have telegrams so you do it all by hand and on paper and send a representative by train to Washington to say how your State had voted, but in 2016 it’s absolutely a Model T Ford. Nobody drives them anymore except at parades.

Even the British system where the elected representatives decide on the PM has some of these problems but not quite as bad. So in the British system (which Canada uses) the representatives are all elected locally, and then they elect the PM. Not perfect but better than the Electoral Collage. To fix the US system, step one is getting rid of the Electoral Collage and going to a direct vote. It can be done now, not like when the system was set up. If they don’t want a direct vote they can have congress vote in the President but the idea of having a separate body, the Electoral Collage, doing the job, is retarded.

#76 Fortune500 on 11.01.16 at 1:24 am

“or we cash out and do something with the gains. From what we’ve been told, the plans is now with between $600 and $650K.”

So they made $600,000 profit (capital gains) in 18 months? Am I reading that right?

Good on them

#77 Ogopogo on 11.01.16 at 2:14 am

It’s a great day to be a renter in Calgary. Check this out!

“‘Will you lower our rent?’: Calgary tenants ask, and landlords oblige as residential vacancy rates surge”

How the mighty have fallen. I can still remember boastful, arrogant Calgarians bragging about how “it’s different here.” Where are you now, my little snowflakes?

http://business.financialpost.com/news/property-post/will-you-lower-our-rent-calgary-tenants-ask-and-landlords-oblige-as-residential-vacancy-rates-surge?__lsa=4ec7-12b9

#78 Ogopogo on 11.01.16 at 2:42 am

I’m literally giggling like a schoolgirl over the Calgary renters’ victory over greedy landlords.

Renters smell blood. The downward pressure on rent prices will force more landlords to capitulate. And with each lowering renters will become more emboldened, more aggressive. How perfect that tonight is Halloween, for we are now witnessing…

Renters’ revenge.

#79 Damifino on 11.01.16 at 3:13 am

#1 Zlvery

“Vancouver is the Los Angeles of Canada.”
———————————-

Not quite. We’re averaging only one or two drive by shooting per day. We’ve got a ways to go yet.

#80 jane24 on 11.01.16 at 4:23 am

Greatest city in the world – easy, it is Barcelona, Spain. Has everything, great food, cheap wine, culture, great architecture, on a beach, compact and easy walking, good designer shopping with outlets, cheap hotels, safe, £39 each way on Ryanair from London. Fab, fab, fab. Go, go, go guys.

Back to these kids, in the late 80’s RE crash the ones that were hurt the most were the ones holding paper for future deals. You couldn’t sell the paper as there was no market for falling knives. Each morning the paper was worth less and the buying pool was smaller. Kids get out now and get whatever you can but do not close this house unless you are up for a decade of living there and commuting. If the papers are assignable then assign them for whatever you paid last year. Get rid before all your future neighbours come to the same conclusion. Get a huge deposit because if the new buyer walks away you are still on the hook.

Good luck with this as a hard lesson in life.

#81 416, YVR Pumpers...I Hate to Tell You This on 11.01.16 at 4:50 am

I recall a very funny post awhile ago where the Commentator mentioned the:

Dunning-Kruger Effect

I live in the EU [retired], have traveled at least a dozen EU countries in past year and when you say Canada, they all seem to know it exists, but that’s about it.

Mention America, and the all go ga-ga expecially about New York.

Mention Vancouver or Toronto, and a puzzled look overcomes their faces.

I have GIVEN UP saying that I lived in YVR and 416 – instead I mention I am a dual citizen, Canada and Italy and in that order.

They immediately begin talking about how nice Italy is to travel and its major tourist attractions and where I live there.

Out of politeness, they cite Canada and its hinterlands, wide open spaces…and that is about it.

So now, I avoid mentioning either city.

I tell them I live near Venice [which I do], they all get it immediately, go on to tell me how lucky I am and share past trip experiences there.

No one has ever said that about Vancouver or Toronto.

So all you YVR and 416 “pumpers” take a trip to the EU and mention your city.

You will find out very quickly that you do not matter in the International concious.

In conclusion, YVR and 416 “pumpers”, Google “Dunning-Kruger Effect” and that would describe yourselves perfectly.

bsant

#82 nubbers on 11.01.16 at 6:36 am

greyswan @59
All foreign purchases in Canada should have 15% tax to start.
My definition of foreigner is someone does NOT have
Canadian passport…landed immigrate included useless for professional work !!
Should not be able to buy waterfront property and purchase new homes only as in Australia…and if are not occupying residence then must sell property!!

By any chance, are you a recently naturalised Canadian citizen yourself? The clues are your less than fluent grammar and your strong distinction of landed immigrant status.

But hey, don’t worry about it. There is no need for the drawbridge mentality. When it comes down to it, most of us Canadians are of foreign origin within a very few generations anyway, just ask an aboriginal Canadian.

I guess I am stirring up a hornets’ nest here, but my personal opinion is that Canada is stronger for its selective immigration policy. Its a great opportunity to pick up young talented people with a fresh outlook and a bit of ‘get up and go’.

#83 Ret on 11.01.16 at 6:45 am

#70 Coquitlam Condo

Yeah, I see what the Mounties did. I have yet to read in the MSM what the couple did. What’s with them or going on in their condo?

There is a whole lot more to this story that the MSM doesn’t want us to know for some reason.

#84 BillyBob on 11.01.16 at 6:56 am

hahah the “Toronto troll”! I can only assume taking the p$ss or if not, mental illness. Having been trotting around the glove for more years than I can remember, NO ONE considers Toronto world-class in any way, shape, or form. Heck, I don’t think even most Torontonians think that. (Yes, I know, this is when someone trots out some link to some survey ranking Canadian and Oz cities as totally awesome so we can feel better about ourselves. Spare me, and actually travel somewhere.)

Barcelona is nice to visit, but overrated. I’ll take Portugal every time – think Spain, without the attitude. Cheaper, friendlier, less snobbish. Great food and wine. have had many, many wonderful trips to Lisbon and beyond.

But my overall fav is Prague. Most culturally similar to Canada: great beer, hockey players, liberal, easy-going culture. Still inexpensive to live, NOT trying to take in the entire planet’s population, and more culture and history in a city block than all of Canada combined.

‘Course I may be biased, with a Czech partner…;-)

(Uh, the inexpensive RE comment was the tie-in to the blog. Sorry for the travelogue. But the Toronto trolling made me laugh!)

#85 Cottingham a bargain on 11.01.16 at 7:06 am

Question for anyone.

Oil has been in the dumps now for over a year and so has alberta’s economy yet housing prices have barely budged in Calgary .

How is this possible? Any ideas ?? How ” sticky” can housing prices actually be and if so , isn’t this proof that RE in Canada really is the KING of all asset classes???

#86 Victor V on 11.01.16 at 7:15 am

What’s really driving Toronto’s red-hot real estate market; As Ontario’s premier rules out taxing foreign buyers, focus turns to domestic speculators

http://www.cbc.ca/beta/news/canada/toronto/foreign-buyers-tax-toronto-real-estate-investors-1.3824467

#87 Mishuko on 11.01.16 at 7:32 am

The sad part is friends of mine still insist foreign money is jacking up prices. Okay I nod.

Then think I should get into the market so I don’t pay someone else’s mortgage. Sure… but I like being liquid and have disposable income.

The scary part is they do not view a mortgage as debt. Mmm…. financial illiteracy is going to drown a lot of people.

#88 AfterTheHouseSold on 11.01.16 at 7:32 am

Last minute deal reached with Ford, includes a $700 million investment in Windsor.

“Earlier investments from GM and FCA totalled close to $1 billion … ”

http://business.financialpost.com/news/transportation/ford-canada-and-union-reach-tentative-deal-at-strike-deadline

In September, Ottawa quietly went about making changes to the Automotive Innovation Fund, to issue grants instead of loans.

#89 Fed-up on 11.01.16 at 7:41 am

#59 greyswan on 10.31.16 at 11:17 pm
All foreign purchases in Canada should have 15% tax to start.
My definition of foreigner is someone does NOT have
Canadian passport…landed immigrate included useless for professional work !!
Should not be able to buy waterfront property and purchase new homes only as in Australia…and if are not occupying residence then must sell property!!

Want the U.S. to treat us similarly? — Garth

_______________________________________________________________

I seriously doubt the US will pass legislation on “evil” Canadian real estate investors Garth. And if they did, it’s a price we’d have to pay like all other non-Americans

#90 cto on 11.01.16 at 7:56 am

Garth

I find it interesting that you seem to have extremely successful career oriented millennials coming and posting on your blog.
My wife and I are professional people in our mid-forties in the GTA.
Our combined household income is slightly less than the twenty something’s that have posted here.
I work for municipal government, wife works for government area as well. We are 20 years into our careers. These government jobs are apparently the envy of a lot of your readers, for what I don’t know. At my workplace, there are only a few under twenty and their gross salaries are maybe $60,000 per year,…which is pretty good for new graduates.
This Garth, is the reality for young people. Not sure if you are there or understand in life’s experience, but every time you post a story like this, it doesn’t help highlight the fact the housing is too expensive here in the GTA.
Many people read this and say, ”well, looks like they can afford a $700,000 house because its close to 3x income, ok then, what’s the problem?”. Or they say, this blog is BS. I don’t think you post BS, I think you have been right on the mark, but this hurts you credibility.
IN REALITY, THERE ARE VERY, VERY FEW MAKING THAT MUCH MONEY IN ALL AGE GROUPS.

#91 cto on 11.01.16 at 8:07 am

correction to my previous post.
I meant to say few under thirty years old. there is no one working in my workplace under twenty as tthey all require post secondary education.

#92 Victor V on 11.01.16 at 8:09 am

BREAKING: Fatal explosion in Alabama shuts the biggest fuel pipeline in America

http://business.financialpost.com/news/energy/gasoline-soars-after-blast-shuts-u-s-s-largest-fuel-pipeline-killing-one-injuring-five

#93 John of Grant on 11.01.16 at 8:32 am

Mark… stagnant RE prices in the GTA…

whaaat? have been going up double digits for the last few years.

#94 The Nature Boy on 11.01.16 at 8:38 am

#74 traderJim on 11.01.16 at 12:48 am

You should experience Montevideo dude. Unbeatable lifestyle for $2500 CAD monthly, nice apartment downtown while it is the most stable politically in SA.

Dubai is sheer fun however the cost of living is often prohibitive to most.

Zagreb and Split rock big time and is both still affordable.

Kingston in the summer not bad, same for Quebec city IMHO.

#95 maxx on 11.01.16 at 8:38 am

And hope that your jobs last forever and ever.
House=1; Life Options and Flexibility=0.
Gawd Canadians are dumb.

#96 InvestorsFriend on 11.01.16 at 8:56 am

Dollar daze on exchange fees

My experience with TD Direct is I pay fat fees around 1.4% each way. In trap account you cannot escape and use third party.

I tried DLR.un approach but you have to call for a manual journal from u.s. to Canada part of the trap and the fee is heavy like $70. On top of that they falsely told me I had to wait 3 days with currency risk that turned out not true

All in all it was a big pain and hardly worth it for less than 20k transferred in my experience.

I have complained about the high fees. Pure profit just because they can.

Another reason to own bank shares.

#97 InvestorsFriend on 11.01.16 at 8:57 am

Should say in RRSP account you cannot escape you are captive to your bank

#98 Johnny Boy on 11.01.16 at 9:01 am

Trump is a classic communist mole.He has been compromised by the fact that he can not keep his pecker in his pants. The Russians probably though their most beautiful woman spies at him. He would have rated them all 11’s. The Ru-skies have him made now. So good luck America. Спасибо

http://www.thehill.com/blogs/ballot-box/presidential-races/303702-spy-tells-fbi-russia-wants-to-cultivate-trump-report

#99 Ole Doberman on 11.01.16 at 9:01 am

#78 Ogopogo on 11.01.16 at 2:42 am

I’m literally giggling like a schoolgirl over the Calgary renters’ victory over greedy landlords.

Renters smell blood. The downward pressure on rent prices will force more landlords to capitulate. And with each lowering renters will become more emboldened, more aggressive. How perfect that tonight is Halloween, for we are now witnessing…

Renters’ revenge.
——————————————————-
I think this is just the beginning
I’m holding out till landlords pay us to grace our presence!

#100 maxx on 11.01.16 at 9:03 am

#4 Self Directed on 10.31.16 at 6:37 pm

“Millennials at work…

http://www.cbc.ca/news/canada/british-columbia/unbc-student-society-in-major-debt-throwing-campus-life-into-disarray-1.3828504?cmp=rss

Hahahahahahaha….a perfect test case. It would appear that these “leaders” swallowed government methodology wholesale.
“General Revenue” ought to be genetically and permanently modified into nothing more than a portal for incoming payments and not some big, opaque mixing bowl, the funds of which can be used largely without public scrutiny.

How is it possible that a student pub might have to close? These idiots ought to be failed outright and booted out on the spot. Someday they’ll be let loose on society. Yikes, we have more serious problems than I previously thought.

How many other unis like this one?

#101 Johnny Boy on 11.01.16 at 9:05 am

What is large turd this guy is. Mentally ill perhaps just a rich spoiled jerk.

https://www.youtube.com/watch?v=LS4Lw2yMmuA

#102 TorontoBull on 11.01.16 at 9:09 am

is it possible to lower your marginal tax rate, associated with the capital gain from the sale of the property, by increasing rrsp contributions (if you have room)?
thanks

#103 Johnny Boy on 11.01.16 at 9:12 am

Is it not interesting how the Orange Man flip flops depending on how he feels that day?

http://www.cnn.com/videos/politics/2016/10/31/donald-trump-nice-to-hillary-clinton-and-democrats-orig-cm.cnn

#104 Johnny Boy on 11.01.16 at 9:13 am

Flop flop Trump.
http://www.cnn.com/2016/10/31/politics/trump-voting-for-bush-on-imus/index.html

#105 soost on 11.01.16 at 9:18 am

Garth you are minimizing the effect of the chinese dude tax here. Do foreigners make up a small % of the market? Sure. But they are the outlier that Canadian wallets have to match to compete with. What’s more participation in bidding wars is far higher than completed sales.

Orville Redenbacher (Wynne) made a huge mistake by announcing that there would be no Chinese Dude Tax in Ontario. She would have been better served saying and doing nothing. The mere threat of such a law would help ensure those buying in Toronto would be playing for keeps. Instead Wynne wants to introduce more affordability measures for first time buyers – way to throw inflationary kerosene on the fire.

#106 IHCTD9 on 11.01.16 at 9:26 am

#64 Mark on 10.31.16 at 11:49 pm
“Junior T has launched another 40 billion into the toilet this year and the years of zany lib-tard spending are far from over.”

Actually only $22B over the first year of Justin T’s administration, which was better than Harper’s average of $26B per year, not even inflation adjusted.

The Trudeau administration has, to date, proven itself to actually run a lower YoY deficit than the Harper administration (which left a >$20B deficit in its final year but had the audacity to claim it was only a tiny deficit!).

____________________________________________

Harper had chopped the budget deficit down to 941 Million by 2015. That’s a fact, you can look it up.

Trudeau blew it back up to 30 BILLION at his first budget. That’s a fact, you can look it up.

Current estimates peg deficit spending even higher than that. That’s a fact, you can look it up.

You might as well just be honest with yourself. You didn’t like Harper? That’s cool, but can’t argue from a position of weakness, we’re communicating on the largest sea of information that has ever existed – anyone can look up your assertions and see that they are pure unadulterated bunk.

Wouldn’t it just be easier for you to just come to grips with the facts rather than being a proprietor of flimflam funky math that everyone sees right through?

#107 MF on 11.01.16 at 9:41 am

#81 416, YVR Pumpers…I Hate to Tell You This on 11.01.16 at 4:50 am

That’s okay. Tell them that we think the EU is a failed economic and social experiment, as well as a complete joke and on the verge of collapse.

Pretty soon we are due for the annual Greece crisis and let’s not ignore one of your main countries just voted to leave the union (so they can watch the collapse from afar).

Personally, I work with lots of Italians who came here to the GTA to find work. Ask them how great the EU is.

MF

#108 CJBob on 11.01.16 at 9:44 am

#63 Smoking Man on 10.31.16 at 11:29 pm
#50 traderJim on 10.31.16 at 10:20 pm
Just checked Royal Bank’s currency exchange online, the rate for today…
_______
Dude get with the times, 1/4 of a point. http://www.knightsbridgefx.com
_____________
So just to clarify that’s not the rate for the day from RBC, that’s the rate from that moment. The rate varies minute by minute.

I investigated different foreign exchange sites and that’s a good one for large amounts, if you’re only doing small amounts it might not be worth the hassle. $4,000 USD is $10 so I just use a RBC USD savings account. 1 free withdrawal per month and I can transfer money in whenever I have the cash / the exchange rate looks favourable (like last week).

#109 Mark on 11.01.16 at 9:44 am

“Harper had chopped the budget deficit down to 941 Million by 2015. That’s a fact, you can look it up.
Trudeau blew it back up to 30 BILLION at his first budget. That’s a fact, you can look it up.”

I did look it up.

http://www.bankofcanada.ca/markets/government-securities-auctions/goc-t-bills-and-bonds-outstanding/

Harper ran a deficit in excess of $20B in his final year in office. Trudeau is running deficits of similar levels.

The debt of Canada (ie: the sum of all accumulated deficits and surpluses over the years) is far more reliable than the “political” figures that you seem to be relying upon. $940M doesn’t even pass a basic sniff test. Not sure why you peddle such nonsense.

#110 Mark on 11.01.16 at 9:54 am

“Mark… stagnant RE prices in the GTA…
whaaat? have been going up double digits for the last few years.”

Not on individual identical properties, or when you adjust the sales mix changes out of broader datasets.

Garth you are minimizing the effect of the chinese dude tax here. Do foreigners make up a small % of the market?

Most ‘foreigners’ buying in Canada, Ontario and BC for that matter, are US citizens. So not sure why it would even be referred to as “Chinese dude tax”. Chinese were a negligible portion of the market before, and there’s significant evidence that Chinese have been net sellers over the past few years of Canadian RE.

is it possible to lower your marginal tax rate, associated with the capital gain from the sale of the property, by increasing rrsp contributions (if you have room)?

If you have the ‘room’, sure. Another thing you can do, subject to proper structuring of the transaction is use the “Capital Gains Reserve” mechanism as provided for in Canadian tax law. Professional advice is a must there as there are very specific requirements in order for a transaction to be structured for eligibility and for financial soundness.

#111 Czech Partner Bias on 11.01.16 at 10:02 am

#84 BillyBob do not apologize about partner bias perhaps influencing your decision about Toronto being so self-important, I agree. Yes, Prague beautiful, cultural and cool (e.g., Fred and Ginger).

But, as a fervent EU traveler you have a habit of visiting low travel cost EU countries, and I agree about Barcelona and Lisboa/Oporto.

Spend a little, come visit Italia [and, learn to eat…I near starved in Prague but they have cheap beer…yes, persnickety Italian food snob, guilty but with good reason].

Besides, we could use the GDP boost.

;-)

bsant

#112 maxx on 11.01.16 at 10:15 am

#19 GreaterFool D. on 10.31.16 at 7:43 pm

Who woke up Zlevry?

Seems not to get out much. Toronto is the last place I’d ever choose to invest in. OK to visit, but……..ever so nice to leave.

#113 Context on 11.01.16 at 10:21 am

#106 IHCTD9:- Anyone can manipulate the figures to make black look white. Bill Clinton borrowed funds from the Social Security Trust moving all to the General Account to show a surplus and left an IOU. Harper was always cooking the books creating reality which is called deception.

#114 IHCTD9 on 11.01.16 at 10:32 am

Well looks like T2 is down for increasing immigration in 2017 to 300,000 per year, with a nod of acknowledgement to the actual proposed number of 500,000 per year. According to the Libs, this will increase prosperity, jobs, and revenues.

In recent years, the bulk of Canada’s immigrant’s have come from Asia and the Middle East, I suspect this trend to continue.

Recent trends have 70+% of all immigrants settling in the GTA, YVR, and Montreal – this info on StatsCan is a bit dated, I doubt many are trying to get set up in Montreal as it is essentially a dying city.

The latest info on StatsCan says Immigrants gravitate to Ontario – over 53% of ALL immigrants to Canada lived in Ontario in 2011. Toronto had the largest share of immigrants 37.4% of all foreign-born in Canada. The 2006 census showed that 49.9% of the GTA population were not born in Canada showing how regular and fast immigrants are piling into the GTA.

So, if recent (2011) trends have continued up till now, we are sure to find 40+% of all immigrants to the entire country have moved to Toronto either immediately or eventually.

Now, its up to you to decide if immigration stimulates the economy or not but we can look at the facts objectively:

1. We are likely to see the main immigrant contributions continue to come from the 3rd world where language, culture, and religion is radically different than our own.

2. If the above is true, then there really is no reason to expect essentially ALL of them to want to move into a large Canadian enclave of their countrymen – which means the GTA or YVR. And in this economic climate – the GTA wins by a mile over YVR for all immigrants other than East Asian immigrants.

So – what will it be? Are we going to have a bottom end numbers influx into Toronto of 650,000+ immigrants by 2020? That’s not so far away.

I don’t think the T2 gang put much thought into this plan, but I guess that does not surprise me either. What I can virtually guarantee, is that a massive possibly even the clear MAJORITY of those 300K new Canadians will move to the GTA…

…and that my friends will be entertainment of the highest order to watch unfold. Just think, what if they do ramp up to 500K/yr, and all else stays the same. If we did 500K for 5 years straight – that would probably result in near 1.9 million new faces in the GTA – in 5 years. Good grief, in Toronto they need a minimum of 20 years just to consult and bicker over one train line making one stop LOL!

I think T2 just sliced a big chunk of my entertainment budget – who needs Netflix with a government like this LOL!

#115 IHCTD9 on 11.01.16 at 10:44 am

#109 Mark on 11.01.16 at 9:44 am

I did look it up.

http://www.bankofcanada.ca/markets/government-securities-auctions/goc-t-bills-and-bonds-outstanding/

Harper ran a deficit in excess of $20B in his final year in office. Trudeau is running deficits of similar levels.

The debt of Canada (ie: the sum of all accumulated deficits and surpluses over the years) is far more reliable than the “political” figures that you seem to be relying upon. $940M doesn’t even pass a basic sniff test. Not sure why you peddle such nonsense.
___________________________________________

You didn’t look up jack.

Most of Harpers final year, he actually ran a surplus – I didn’t mention that earlier just to save you a few blood vessels.

And as anyone with access to Google can confirm, Harper left Trudeau a 941 Million hole to fill. Morneau himself said the Libs would probably finish up the year at 3 Billion.

You refuse to look at the budget deficit numbers because they make Harper look great, and Trudeau like a turd. That’s why every time I mention them, you come sailing in with average debt numbers and a collection of other irrelevant tripe trying to side-step the facts.

Sorry, but your made up funky-town numbers don’t trump the official numbers on record.

Keep trying though – it’s slow here at work today :)

#116 Aug. GDP we are hewers and drawer... on 11.01.16 at 10:44 am

+0.2%.

Hey, better than negative.

“main contribution coming from mining, quarrying and oil and gas extraction and utilities. Manufacturing and construction were also up, while the agriculture and forestry sector was down”

Hewers and drawers, all we are capable of.

Mfg. up by a paltry 0.3%. With our dollarette you would think there should be an international fire sale on Cdn. made goods.

A 2.5% decrease in financial investment services (such as investment banking and securities dealing and pension funds).

Garth, they still have house lust. Cannot wait to see Nov. GDP, post MST.

For now, + better than -. But fundamental issues of productivity still unaddressed and T2 want to spend on shovels in soil.

Fools.

Let rates rise Poloz, or get out. Your shameful low interest rate policy of the past 3 years has yielded nothing, other than a sputtering economy.

bsant

#117 InvestorsFriend on 11.01.16 at 10:48 am

Deficit spending is NOT necessarily money down the toilet

Mark quoted someone saying Trudeau was putting $40 billion down the toilet

Not true

If money is wasted then it is down the toilet no matter if deficit or not. If labour and resources are spent to create value less than the cost (think bombardier) then that is a waste. A government can spend today on a highway using a deficit and that is not money down the toilet as we get a highway out of it.

To suggest all deficits are bad is just wrong.

To suggest that kids today inherit debt is true but they get a good deal with all the improvements to the earth paid for by ancestors. We all collectively stand on the shoulders of all who came before us. Each generation has always improved the earth and greatly so. (Buildings, roads, added knowledge of all kind fAR outweighs the depletion of resources and any and all other ill effects

Few thinking people would trade their birthdate for an earlier one.

#118 WalMark of sadkatoon on 11.01.16 at 10:55 am

Wouldn’t it just be easier for you to just come to grips with the facts rather than being a proprietor of flimflam funky math that everyone sees right through?

It would be easier but keep in mind that he enjoys trolling new and naive readers. Hence why he was banned from RFD

#119 InvestorsFriend on 11.01.16 at 10:56 am

Ironic?

When I type RRSP in lower case it changes to trap in auto correct. Hence my post above got garbled.

RRSP has worked for me by trapping my money so I could not spend until retirement. Some do not like rrsp trap. different strokes for different folks

#120 Smoking Man on 11.01.16 at 10:57 am

Bye bye MXN paso.

Wasn’t like I diden’t warn you dogs..

#121 WalMark of sadkatoon on 11.01.16 at 10:57 am

whaaat? have been going up double digits for the last few years.

Don’t worry about it. He’s just trolling you. Simply ask him to link his source and he’ll disappear

#122 traderJim on 11.01.16 at 11:00 am

Mexican peso (which dives when Trump is doing badly and rises when he is doing well) leaping today as polls show a 13 point swing from last week, putting Trump in the lead.

In other news, Smoking Man was spotted shopping for gold plated flip flops.

Trump’s advisors quoted as saying ‘please don’t insult anyone for the next 8 days’, but seems impossible task.

#123 Compton Jimmy on 11.01.16 at 11:27 am

“Greatest cities of the world”

How many of these other great cities of the world that people list have such great suburb-areas as Scarberia, Miserysauga, not to mention world class traffic jams, 6 months of winter, and one of the highest (unreported) crime rates in the world.

Go Hogtown Go! You are top of the class!

#124 Victor V on 11.01.16 at 11:44 am

Chief Economist Gregory Klump explains CREA’s concerns with the methodology behind CMHC’s Housing Market Assessment:

http://www.crea.ca/cafe/code-red-on-cmhcs-hma/

#125 traderJim on 11.01.16 at 11:48 am

#94 Nature boy

Having lived in BA for 5 years I know Montevideo pretty well. It’s like a smaller version of BA, but not nearly as interesting as BA, imo. However it is a tax haven of sorts, so that might appeal, and it certainly is stable.

Montevideo has a beach and accessible waterfront, that’s a plus. I don’t miss having a gun pointed at me as happened a couple of times in BA.

Best part of Uruguay is the coast heading east of La Barra, especially Juan Ignacio, one of the nicest beach towns I have seen. It’s a summer place of course, but shoulder season the best, imo.

Someone mentioned Prague, ah of course, it’s spectacular (the old city anyway, the rest, not so much). I liked it so much I almost married a communist from there.

She talked me out of buying an old city apartment (which would have to have been in her name) for $30k back in 1993. Now probably worth a million. She was worried Russian gangsters would somehow get the title. (Imagine a girl turning down someone willing to buy an apartment in her name, not all commies are evil)
: )

Back then Prague was ridiculously cheap. I recall going to the opera and my gf was charged 65 cents for a front row seat, I, being a foreignor, had to pay $4. GF was furious at the ‘foreignor tax’ lol.

Glad to hear Portugal sounds as good as I have been told. I have friends who have retired there and they love it.

Loved Northern Italy too. Best food by far.

Have yet to visit Croatia, Slovenia etc. It’s all on the list, looking forward to it!

#126 WalMark of sadkatoon on 11.01.16 at 12:00 pm

Posters bashing Toronto (best city in Canada!) and then citing bargain basement 3rd world European cities.

Too funny lol

#127 traderJim on 11.01.16 at 12:02 pm

Re FX

Since I have spent almost all of the last 10 years living outside of Canada, I don’t know all the new bucket shops setting up, but given my macro view that we will eventually see a market collapse that is bigger than that of 2008, I prefer to keep my funds in an institution that is TBTF. That means the big 5, I would not have a penny anywhere else.

I would never risk my capital to get an exchange rate commission that is still higher than using DLR, even if it is more efficient. I can wait for settlement. Thanks though, it is nice to know that there’s some competition finally.

I pay a flat fee of $14 ($7 each way) to exchange currencies. The spreads are always 1 penny. There is no real ‘market risk’ as you cannot know which way the currency will move. Some times it moves for you, sometimes against, if you are forced to wait. No one knows the best day to make the trade.

But as I said, it is most definitely not worth the hassle for small amounts.

I have saved many thousands of dollars this way, since I had a business and properties outside of Canada, and the income stream was USD.

If you have a portfolio of US stocks, as you should have, it’s a very useful thing to know about.

If you are just taking a trip to Florida (ugghh) easier to use your debit card. Just get one that waives the ATM fees for international withdrawals. No need to carry wads of cash.

#128 Victor V on 11.01.16 at 12:07 pm

http://www.cbc.ca/news/canada/toronto/smart-track-plan-executive-committee-meeting-1.3830882

Toronto Mayor John Tory says numerous possible revenue streams to build Smart Track and other transit projects will be discussed this month, after a joint report from the city and province identified a property-tax hike of at least 2.1 per cent to cover the city’s share.

#129 Mr. Frugal on 11.01.16 at 12:07 pm

The media hacks are so busy convincing us that Hillary will win in a landslide. But, what if she wins and her presidency ends with impeachment (like her husband)? I wonder what Mr. Market will say about that. The recent selloff and the VIX spike make me think a few investors are starting to doubt the official narrative.

http://www.breitbart.com/2016-presidential-race/2016/10/31/top-7-charges-hillary-clinton-could-face-while-president/

#130 Victor V on 11.01.16 at 12:08 pm

https://www.thestar.com/news/queenspark/2016/11/01/wynne-adviser-to-step-down-after-opp-charges-related-to-sudbury-byelection.html

Premier Kathleen Wynne’s top political adviser will step aside as the head of the Ontario Liberal Party’s re-election campaign after being charged for alleged bribery during a 2015 byelection.

As exclusively reported by the Star, Patricia Sorbara, CEO and director of the 2018 Liberal campaign, and Grit activist Gerry Lougheed face Elections Act charges related to the Sudbury contest.

“In 2015, I said that if any charges were laid as a result of the investigation then Patricia Sorbara would of course step aside and this will happen if charges are laid,” a stone-faced Wynne told reporters Tuesday.

Her comments came after the Star disclosed both Sorbara and Lougheed will be ‎charged later Tuesday by the Ontario Provincial Police.

#131 Karma on 11.01.16 at 12:15 pm

TD raises prime rate to 2.85%!

Lets see who follows next.

#132 AfterTheHouseSold on 11.01.16 at 12:21 pm

#131 IHCTD9

Re: Unifor/Ford auto negotiations.
Just caught up on my reading. Yes, Trudeau to the rescue buying union jobs/votes with taxpayer dollars via the Automotive Innovation Fund.

Thanks for your reply regarding your Saab. It resonated/stuck with me because of said race car driver. Now, if only I could remember what I did last week!

#133 Brokerizer on 11.01.16 at 12:31 pm

TD just raised it’s variable rates to 2.85%.

It’s just 20$ more per month for most people, but it might finally change peoples’ minds… that rates *can* move higher.

#134 Barb on 11.01.16 at 12:36 pm

#90 cto on 11.01.16 at 7:56 am

“These government jobs are apparently the envy of a lot of your readers, for what I don’t know.”

—————————

DB pensions.

#135 feldspar on 11.01.16 at 12:39 pm

To Seriously- I am largely in agreement with your criticism of our host’s tenor toward those non-leftists. But I do respect the fact that he stood up against the “asian peril” myth from the get go. I think he misses also some of the conservative rational for Brexit, including a little item called “freedom”. There’s also some rational for the crass Mr.Trump. But Garth is a capitalist and no kook-just not always right. Like you, I preferred a financial post, where Garth is tops.

#136 juno on 11.01.16 at 12:46 pm

Notice people are getting cheaper this year.

Halloween – candies in areas of vancouver that use to be pretty good. Were cheap cheap cheap this year.

Also lots of houses not giving them out in other areas.

I think its a good indication of financially stressed out people.

Its actually sad to see. We were giving out complete candy bars this year, for those who wants to climb the hill to get to our place. Why not!

#137 Smoking Man on 11.01.16 at 12:53 pm

TD raises prime. Now that all mortgage brokers are impotent..

#138 Bram on 11.01.16 at 12:55 pm

Mark
Not on individual identical properties, or when you adjust the sales mix changes out of broader datasets.

Ah, that’s why vancouver home owners get a lower assessment value every year, lately?

not.

Up until this summer, price on identical house has been skyrocketing. Give it up already.

#139 n1tro on 11.01.16 at 1:00 pm

Johnny Boy, stop your Trump bashing and let the adults be spared your bias. I think most here understand that it really doesnt matter who wins in the long term. Trump may get a few things through eg. term limits, no lobbying ban, etc, etc but does anyone think the system will change enough to benefit the people of the US?

What we should be debating about here is what the best strategy is to play in a Trump or Clinton win and not which one is a bigger .

#140 Bram on 11.01.16 at 1:01 pm

#87 Mishuko on 11.01.16 at 7:32 am
The scary part is they do not view a mortgage as debt. Mmm…. financial illiteracy is going to drown a lot of people.

This ain’t your father’s mortgage, buddy.
Sure, it is debt, but it is debt so cheap, that for some it is literally FREE MONEY!
http://www.huffingtonpost.ca/2016/04/18/negative-mortgage-rates_n_9722138.html

Yes, you read that right: THE BANK PAID THEM FOR HAVING A MORTGAGE.

So is it debt?
Technically.
Practically? Not really. And don’t tell me those rates will go to 10% within the next five years: they will not. See Japan: we are in for a long long time of near zero rates.
As long as they can afford the principle repayment, those borrowers are golden.

#141 BillyBob on 11.01.16 at 1:01 pm

bsant,

yes, I am remiss in not mentioning Italy – another place that is an embarrassment of art, music, food, wine, women, cars, and scenery riches! While the south usually gets all the attention and I consider Rome one of my two favourite cities in the world, I have also explored the north several times, renting a car from Milano and heading up to Lago D’Orta. So beautiful it makes one dizzy. Then there’s Venice, that someone else mentioned…yes, I do love Italy as well. :-)

The point is there are so many beautiful places to explore that I feel embarrassed by comments exulting about Toronto or Vancouver. Both nice cities in their own right, but really nothing to boast so much about. People need to get out more. It’s never been cheaper or easier in history to travel.

For fun today was looking with the g/f for another apartment in Praha. She is always dumfounded (too polite to laugh out loud) by the RE prices in Canada. So she stumbled across some property a little out of our price range, this modest little 10,000 square foot villa in the burbs. 125,000,000 CZK, or 6.8 million Canadian.

http://reality.ihned.cz/detail/praha/luxusne-zcela-vyjimecna-historicka-vila-na-praze-6-spa-vnitrni-bazen-bazen/6655376/

So I thought, what can one purchase in the BPOE for the same money? Filtered for price on realturd.ca and found this gem at random:

https://www.realtor.ca/Residential/Single-Family/17023453/6561-CAMBIE-STREET-Vancouver-British-Columbia-V6P3G9

But, I’m not sure the Cambie Street property has a indoor pool or 16,000 square foot garden or was built in the 17th century lol.

Like I said, embarrassing to even show Canadian real estate prices to anyone outside the country.

#142 Critical Reflection on 11.01.16 at 1:15 pm

If the percentage of foreign buyers is some ‘small’ to be negligible, whether 3% or 5% depending on the flavour of the day,’ why would the Chinese consulate intervene and slam the BC Foreign Buyer’s Tax? Why would Chinese billionaires weigh in and equally complain about it?

http://www.bloomberg.com/news/articles/2016-08-12/chinese-envoy-challenges-vancouver-home-tax-as-fallout-spreads

http://www.huffingtonpost.ca/2016/10/17/bc-foreign-buyer-tax_n_12530960.html

Clearly, if it was such a small percentage, there is no point in even making a comment at either the political or investor level. Unless of course, they know that there a lot more buyers than the 3% or 5%….

By the way, did our Canadian consulate complain recently about China’s new restrictive rules on foreign ownership of RE in several major cities?

If we had only a couple of Canadians impacted by a nation’s foreign ownership restrictions, would be complain? Did we complain to Australia, Hong Kong, or Singapore when they introduced their restrictive measures?

#143 n1tro on 11.01.16 at 1:19 pm

Trump win = stocks down, USD up, Fed rate up as Yellen would be fired, cost of doing business up, less war. Trump introduces stuff that starts to “drain the swamp”, lone gunman comes out or prosecutors find Trump DNA on some woman’s privates and he gets impeached. Chaos follows.

Clinton win = stocks up, USD stable, Fed rate up 0.25 in Dec, stock market goes down hard shortly after, Fed forced to do another round of stimulus, Clinton finds a way to blame China or Russia for something and starts proxy war (N vs. S Korea?). Chaos follows.

#144 TurnerNation on 11.01.16 at 1:42 pm

Calling a top on TCK.US today.

#145 Trrrrrump on 11.01.16 at 1:49 pm

Todays blog should be interesting! So much is happening nationally and globally and nobody in our government has a grip!!!

#146 Victor V on 11.01.16 at 1:54 pm

Toronto-Dominion Bank raising prime rates, variable rate customers to face increased costs

http://business.financialpost.com/personal-finance/mortgages-real-estate/toronto-dominion-bank-raising-prime-rates-variable-rate-customers-to-face-increased-costs

One of the country’s largest banks has moved its key prime rate up 15 basis points, a change that will affect Canadians with floating rate products that have no fixed rate.

Toronto-Dominion Bank has been quietly telling the lending industry that its prime lending rate will jump from 2.7 per cent to 2.85 per cent — a move that coincides with new federal mortgages rules that many have said will cost the banks money and ultimately be passed on to consumers. No other banks have raised rates.

Ottawa moved last month to tighten mortgage rules with one of the key changes being that consumers with fixed rate of five years or longer backed by the government must qualify based on the posted rate, now 4.64 per cent. Many have suggested that rule will slow sales and ultimately impact the revenue of the major banks. Only TD has changed its rates.

The change by the bank will immediately impact customers with lines of credited or variable rate products. Most of those products are discounted off of prime but the discount remains constant and is calculated off of the prime rate, meaning those customers will start paying more for their loans.

“They are doing this in anticipation of the mortgage rules causing more expensive mortgage financing in Canada,” said James Laird, a founder of ratehub.ca

#147 Yuus bin Haad on 11.01.16 at 1:54 pm

I’d love to know what Ryan has to say about this, but here at the institution they won’t let us watch BNN. Word is someone got to Nurse Ratched.

#148 Victor V on 11.01.16 at 1:59 pm

http://www.bnn.ca/housing-and-debt-risks-best-addressed-by-government-bank-of-canada-s-poloz-says-1.597466

Bank of Canada governor Stephen Poloz says risks from household debt and the housing market will be better addressed by the government’s recent policy moves than by adjusting interest rates.

In a speech in Vancouver, the head of Canada’s central bank says adjusting interest rates is a “very blunt tool” that has widespread effects.

“Our view is that these so-called macroprudential policies are best placed to deal with threats to financial stability because they can be designed to target specific financial vulnerabilities,” Poloz said, according to a text of his speech released in Ottawa.

“Given all the work done to strengthen the global financial system over the past few years, it makes even more sense to separate monetary policy from efforts to stabilize the financial system.”

Household debt levels have hit record levels in recent years and housing markets have boomed, helped by low interest rates that have allowed consumers to borrow cheaply.

#149 John of Grant on 11.01.16 at 2:00 pm

Mark #109….“Mark… stagnant RE prices in the GTA…
whaaat? have been going up double digits for the last few years.”

Not on individual identical properties, or when you adjust the sales mix changes out of broader datasets………….

Mark, you said stagnant, here is the Teranet/National Bank index for Toronto for the last 8 years annually from the latest available month, September. Average is 8.8% increase per year, hardly stagnant.

09/30/2016 209.28 16.4%
09/30/2015 179.79 8.6%
09/30/2014 165.48 7.4%
09/30/2013 154.07 3.7%
09/30/2012 148.55 7.8%
09/30/2011 137.74 8.5%
09/30/2010 126.92 9.1%
09/30/2009 116.35

Average: 8.8%

#150 Mark on 11.01.16 at 2:14 pm

“You didn’t look up jack.
Most of Harpers final year, he actually ran a surplus – I didn’t mention that earlier just to save you a few blood vessels.”

From that link I gave you earlier:

Debt at September 2015 = $641.8B
Debt at September 2016 = $664.7B

Difference (deficit) = $22.9B

Now let’s consider the previous YoY comparison, when Harper was in power:

Debt September 2014 = $634.7B

Deficit = $7.1B

So sure, its gotten a little worse under Trudeau on a sequential YoY basis.

However, Harper came to power with debt of Canada = $377.1B (February 2006). When he left in October, 2015, some 9 years and 8 months later (116 months), debt of Canada was $645.4B. So Harper ran a cumulative deficit of $268.3B, or $2.3B/month, or $27.8B/year.

So is Trudeau’s first year of a $23B deficit really all that bad? No. Trudeau is actually proving to be more fiscally responsible than Harper. Also, the Trudeau government isn’t piling on off-balance sheet liabilities at the CMHC like the Harper government did (they’re actively working to manage the mess!).

BTW, I didn’t even bother to adjust any of the numbers for inflation, as its been minimal over the past decade. But if you do, Harper’s record deficit-wise is even worse. Harper had the benefit of robust oil prices. Trudeau is grappling with a significant recession in Canada’s resource sector, a stagnant housing sector, and a manufacturing sector which was increasingly leveraged to both those sectors rather than exports.

You might not like Trudeau (or his father), but seriously, cut him some slack and actually bother to look at the numbers before blindly believing the propaganda.

#151 Garth was right! on 11.01.16 at 2:34 pm

TD BANK RAISES PRIME TO 2.85%

http://www.mortgagebrokernews.ca/news/big-bank-hikes-prime-rate-216383.aspx

#152 Ryan M. on 11.01.16 at 2:34 pm

So TD is the first to raise rates without any prompting from Bank of Canada.
http://www.cbc.ca/news/business/td-bank-mortgage-prime-rate-1.3830878

Interesting this happens the same week I get a letter from BMO raising my (comparably low) credit card rate from 12% to 14% as of Dec. – for no reason (just a “modification to [their] existing products”).

The squeeze has begun.

#153 TurnerNation on 11.01.16 at 2:35 pm

We live in a large open air Re-Education Kamp here in Kanada. Everything old is new again Komrade
…..

The toolkit advises teachers to use gender-neutral language.

For instance, rather than relying on the traditional terms “boys” and “girls,” the guide suggests using alternative terms like friends, folks or “comrades.”

http://www.cbc.ca/news/canada/edmonton/should-drag-shows-be-used-as-a-teaching-tool-in-alberta-schools-1.3830417

The toolkit advises teachers to use gender-neutral language.

For instance, rather than relying on the traditional terms “boys” and “girls,” the guide suggests using alternative terms like friends, folks or “comrades.”

http://www.cbc.ca/news/canada/edmonton/should-drag-shows-be-used-as-a-teaching-tool-in-alberta-schools-1.3830417

#154 Mr. Slate on 11.01.16 at 2:46 pm

The Donald Trump character is based on a cartoon puppet dinosaur, it’s true.

http://hoaxbusterscall.blogspot.ca/2016/10/donald-trump-is-dinosaur.html

#155 Victoria - the original on 11.01.16 at 2:47 pm

People are convinced that nothing will happen in Victoria and prices will just keep going up and up. Just talking to retired neighbors living in big houses…. They are certain Victoria is untouchable because of the tech sector and “everyone wants to live here” stuff.

I mentioned fundamentals ie wages compared to salaries – Canadians crazy debt etc. They said no I was wrong …. hmmm. Would love to see a blog post just one Victoria …. Cheers :-)

#156 Capt. Serious on 11.01.16 at 2:52 pm

TD just raised their prime by 15 basis points.
I thought interest rates couldn’t go up?

#157 Mark on 11.01.16 at 2:58 pm

“One of the country’s largest banks has moved its key prime rate up 15 basis points, a change that will affect Canadians with floating rate products that have no fixed rate.”

Ain’t it awesome to be a bank shareholder! One shake of the magic wand, and TD can increase its profits.

here is the Teranet/National Bank index for Toronto

One big problem with Teranet’s methodology is that their ‘numbers’ tend to lag reality literally for years. The other problem is that there are very limited observations available to Teranet on the large subset of houses which transact extremely infrequently. Newer, more expensive, and more recently improved housing tends to show up disproportionately in Teranet’s sampling as that’s what transacts. The weighting they give to a house that “grandma” lived in for 40 years is minimal. But those houses are part of the overall housing stock, even if not represented much, if barely at all in the contemporary sales mix.

Consumer behavior tends to track what individual houses are actually doing (stagnating/declining), not what the Realtor stats imply. Hence the weak, almost deflating consumer at this point (and significantly deflating if we reference everything back to USD$).

#158 jess on 11.01.16 at 2:59 pm

bribery

CONSULATE TRAGEDY

Mitchell has also provided new insight into the Libyan businessman involved in the security contract at the US consulate in the city of Benghazi.

Unaoil scandal: A bribe payer comes forward to admit his crime

Nick McKenzie Richard Baker Michael Bachelard

Lindsey Mitchell has told Fairfax Media, The Huffington Post and the BBC’s Panorama program that he bribed senior officials in the Gaddafi regime on behalf of, and while working for, Unaoil in mid 2009.

He has also confessed to the FBI and British authorities, saying he will testify against Unaoil.

Mitchell further says he worked alongside a Libyan businessman who was involved in the security contract to guard the US consulate in Benghazi. In September 2012, the embassy was attacked by members of extremist group Ansar al-Sharia, resulting in the death of US ambassador Christopher Stevens and one other diplomat.

#159 jess on 11.01.16 at 3:01 pm

UBER: Why didn’t HMRC try to beat exploitation in the gig economy? (31 Oct 2016)
http://www.taxresearch.org.uk/Blog/2016/10/28/why-didnt-hmrc-try-to-beat-exploitation-in-the-gig-economy-was-there-a-deliberate-blind-eye-turned/
=================
“John Naughton.says:
‘Uber isn’t a tech company any more than John Lewis is an electricity company.
Theranos is/was not a tech company but a corporation supposedly providing medical services. Airbnb isn’t a tech company, but an organisation that’s in the hotel business. And so on. All these outfits should be regulated in ways appropriate to the businesses they are actually in, rather than being allowed to sail under a flag of convenience called “tech”. Which is why the fall of Theranos is actually a hopeful sign.’
https://www.theguardian.com/commentisfree/2016/sep/11/tech-label-obscures-old-fashioned-sharp-business-practice
=========================
There is no “technology industry”
The label’s become too big to be useful, and tech could suffer for it.
https://medium.com/humane-tech/there-is-no-technology-industry-44774dfb3ed7#.d5jexv5x6

uber subprime auto leasing business
https://www.bloomberg.com/news/articles/2016-05-31/inside-uber-s-auto-lease-machine-where-almost-anyone-can-get-a-car

#160 traderJim on 11.01.16 at 3:03 pm

Man I really need to proof read before posting.

Jose (not Juan) Ignacio is the cool beach resort in Uruguay. Shakira has a place there, kind of like the Hamptons of SA.

Meant to say the dollar is leaping vs MXP obviously, as Trump has momentum. Now 13 full points swing in a few days. Interesting.

Was going to say SM shopping for new Maserati, but understand he’s not that kind of guy. Unless Maserati makes pick ups, which they might.

#161 jess on 11.01.16 at 3:04 pm

Popular buy-to-let tax loophole ‘won’t work’, accountants warn
“beneficial interest company trust” are capitalising on a trend among landlords to move existing properties into company structures.
http://www.telegraph.co.uk/investing/buy-to-let/popular-buy-to-let-tax-loophole-wont-work-accountants-warn/

#162 traderJim on 11.01.16 at 3:10 pm

15 bps rise in rates? Seriously?

We all know rates are trending ever so slightly higher, but 15 bps is hardly worth mentioning.

When rates go up 2 or 3 full points let me know.

Just do the math. Even a very rough calculation on conservative estimates of what national debt is (both here and in USA) shows rates of 5% or so mean disaster.

So higher rates will be fought tooth and nail for the next decade or two.

Japan. All you have to do is look at Japan, and you will see very close parallels. Enormous national debt, low rates for decades, stagnant economy.

Get used to it. Only way out is massive crash and reset. Could happen, but better bet is turning Japanese.

#163 IHCTD9 on 11.01.16 at 3:28 pm

#123 Compton Jimmy on 11.01.16 at 11:27 am
“Greatest cities of the world”

How many of these other great cities of the world that people list have such great suburb-areas as Scarberia, Miserysauga, not to mention world class traffic jams, 6 months of winter, and one of the highest (unreported) crime rates in the world.

Go Hogtown Go! You are top of the class!
__________________________________________

The traffic problems are not just world class – they are legendary throughout the Galaxy!

I’ll stick to my small Village, I have too many rural habits and hobbies now to ever move back into the city again.

Speaking of which, I can’t wait until there is some snow on the ground, I want to see how the Raptor 700R handles it :)

#164 };-) aka Devil's Advocate on 11.01.16 at 3:31 pm

Is this the beginning of what we’ve known was coming?

TD Bank raises mortgage prime rate to 2.85%

#165 IHCTD9 on 11.01.16 at 3:40 pm

#150 Mark on 11.01.16 at 2:14 pm
“You didn’t look up jack.
Most of Harpers final year, he actually ran a surplus – I didn’t mention that earlier just to save you a few blood vessels.”

From that link I gave you earlier:

Debt at September 2015 = $641.8B
Debt at September 2016 = $664.7B

Difference (deficit) = $22.9B

Now let’s consider the previous YoY comparison, when Harper was in power:

Debt September 2014 = $634.7B

Deficit = $7.1B

So sure, its gotten a little worse under Trudeau on a sequential YoY basis.

However, Harper came to power with debt of Canada = $377.1B (February 2006). When he left in October, 2015, some 9 years and 8 months later (116 months), debt of Canada was $645.4B. So Harper ran a cumulative deficit of $268.3B, or $2.3B/month, or $27.8B/year.

So is Trudeau’s first year of a $23B deficit really all that bad? No. Trudeau is actually proving to be more fiscally responsible than Harper. Also, the Trudeau government isn’t piling on off-balance sheet liabilities at the CMHC like the Harper government did (they’re actively working to manage the mess!).

BTW, I didn’t even bother to adjust any of the numbers for inflation, as its been minimal over the past decade. But if you do, Harper’s record deficit-wise is even worse. Harper had the benefit of robust oil prices. Trudeau is grappling with a significant recession in Canada’s resource sector, a stagnant housing sector, and a manufacturing sector which was increasingly leveraged to both those sectors rather than exports.

You might not like Trudeau (or his father), but seriously, cut him some slack and actually bother to look at the numbers before blindly believing the propaganda.

____________________________________________

For anyone interested.

Delightfully free of funky math and flimflamism, not to mention mined directly from the Halls of the high exalted Trudeau bootlicker collective, which we all know is beyond reproach.

http://www.cbc.ca/news/politics/ottawa-posts-941m-deficit-for-october-1.3376881

#166 earlybird on 11.01.16 at 3:44 pm

Mortgage rates creeping up….rent went down two years in a row (Cowtown)…what to do…what to do…

#167 Aggregator on 11.01.16 at 4:02 pm

Canada to open door to more skilled workers, immigrant families in 2017

The Liberal government is boosting the base number of immigrants allowed into Canada next year to 300,000, to help drive economic growth as the country grapples with an aging demographic.

Told you. Whenver Ottawa tightens a bolt, it loosens a few more somwhere else.

#168 Freedom First on 11.01.16 at 4:06 pm

#78 Ogopogo

Yes. I live in Alberta and wrote here about my lowered rent, 1 month free rent with phone cable internet paid for 1 year. Upper class building with all amenities.

I always enjoy renters revenge and also buyers remorse when I buy houses for 35-55% off after a crash. I like when people are eager to have me rent, and when people are eager to have me buy. It’s not only financially beneficial, it’s when people treat me like Royalty. As they should. I know I always live the Golden Rule.

#169 Context on 11.01.16 at 4:19 pm

I would address my classroom and show them the meaning of neutrality with my toolkit. ” Good morning boys and girls and the others. ” In this way I have left nobody out, but the next morning would say, ” Good morning girls and boys and the others. ” One cannot offend the female gender as don’t discriminate and my class would be all happy smiles.

#170 Context on 11.01.16 at 4:38 pm

I will disclose a secret for shopping at the market in Mexico with an old woman selling food products to get a 25% discount because that is the gringo premium. I will get the Mexican price by saying senora te ves tan bonita hoy.

#171 it all adds up on 11.01.16 at 4:39 pm

#162 traderJim on 11.01.16 at 3:10 pm
“15 bps rise in rates? Seriously?”

Sure that ain’t much but add the increases in credit card rates that someone here mentioned, increase in bank account deposit amounts required to avoid monthly bank fees, etc. – it all adds up. Didn’t we just read that Canadians are $200 away from not making it?

By the way remember what happened when they dropped the rates by a mere 25bps? Every idiot and their dog rushed to get more mortgage to buy more RE.

#172 Shhhh #141 BillyBob don't tell Toronto... on 11.01.16 at 4:48 pm

Shhh BillyBob, how dare you tell the truth.

We would not want to offend the hicks from Toronto.

Ditto to everything you say, and ditto over again.

I say shhhhh, because Venice alone gets 25-30 MM tourists a year, more than all of Canada put together, let alone that Internationally famous, top of everyones list in the World to visit: Toronto, just kidding…about Toronto that is.

Shhhh because I do not want anymore half naked, flip flopping tourists plying my neighborhood that litter Venice and then bitch about canal cleanliness [there are only 70,000 Venetians living in Venice, so, we didn’t make the mess that is cleaned every morning promptly].

Thank God they have all gone home now [but you are welcome anytime BillyBob to La Serenissima].

Forgot, we have horse races older than Toronto.

bsant

#173 bdwy sktrn on 11.01.16 at 5:18 pm

#160 traderJim on 11.01.16 at 3:03 pm
Meant to say the dollar is leaping vs MXP obviously, as Trump has momentum. Now 13 full points swing in a few days. Interesting.

Was going to say SM shopping for new Maserati, but understand he’s not that kind of guy. Unless Maserati makes pick ups, which they might.
——————————————–
i happen to know for a fact that they can be custom ordered with a busted off temperature knob, replaced with an older set of slightly rusted vice grips. so, perfect.

yesterday i booked 18 days in cozumel for xmas, never been to the carrib side, the snorkelling looks beauty. loving cad/mxn action today. go trump. he’s effing crazy but hilldabeast is worse.

gwb made a fencepost look brilliant so the job must be easy!

#174 rainclouds on 11.01.16 at 5:26 pm

More Piling On

http://www.macleans.ca/economy/economicanalysis/canadas-housing-market-looks-a-lot-like-the-u-s-did-in-2006/

#175 maxx on 11.01.16 at 5:32 pm

#84 BillyBob on 11.01.16 at 6:56 am

It’s French Polynesia for me. Forever.
Geographical beauty matched only by its wonderful people.
Aita pe’ a’ pe’ a.

#176 maxx on 11.01.16 at 5:38 pm

#85 Cottingham a bargain on 11.01.16 at 7:06 am

“Question for anyone.

Oil has been in the dumps now for over a year and so has alberta’s economy yet housing prices have barely budged in Calgary .

How is this possible? Any ideas ?? How ” sticky” can housing prices actually be and if so , isn’t this proof that RE in Canada really is the KING of all asset classes???”

RE p$ycho$i$. When people realize there are far better things to do with money, the KING of all asset classes will be done like dinner.

#177 Mark on 11.01.16 at 5:46 pm

“Delightfully free of funky math and flimflamism, not to mention mined directly from the Halls of the high exalted Trudeau bootlicker collective, which we all know is beyond reproach. “

There’s no funky math or flimflamism of simply looking at changes in the debt of Canada and determining the deficit or surplus that is thus derived.

Its simply addition and subtraction. If you spend more than you earn in a year, that’s a deficit and your debt increases. If you spend less than you earn in a year, your debt decreases.

Very simple. No flim flam. I think you really should be asking how the Harper-ites can claim such a small deficit, yet the debt of Canada increased by tens of billions in 2015. That’s a much more “difficult” question to answer without resorting to flimflam.

Sure that ain’t much but add the increases in credit card rates that someone here mentioned, increase in bank account deposit amounts required to avoid monthly bank fees, etc. – it all adds up. Didn’t we just read that Canadians are $200 away from not making it?

Very true. Its basically $$$ out of the pockets of Canadian borrowers into the pockets of the shareholders. As there is no evidence that TD is facing increased funding costs (quite the opposite over the past year, with yields down across the entire CAD$ curve). The banks claim that CMHC changes are driving the changes, but nobody has seriously suggested that any of the changes would even apply to already written CMHC subprime mortgage insurance. Only new policy issuance.

#178 bdwy sktrn on 11.01.16 at 5:48 pm

bush the slower was truly of weak mind, but next to mark’s to/vcr idiocy i bet he’d look quite clever commenting on RE.

there are many hundreds maybe thousands of cases in vangroovy of the same unimproved property selling more than once since 2013, they show a near 100+ gain in every single hood in the city over 3+ yrs to this spring/summer . not one single property went down (or sideways since 01/13). not one would be less than 50% gain. there are doubles, triples and better.

the biggest/strongest/fastest sustained (so far, almost!) move in RE prices likely ever seen in north america , perhaps ever on the planet (maybe ex-silicon valley) and he is blinder than blind yet won’t shut the heck up about it.

he is truly the ‘gratest fool’ every few days when as pulls out that stinker again and again.

from now on he shall be known as blindmark.

blind to the future (CAD rockets!), blind to the past (RE)

come to think of it a 3x leverage product on the inverse mark fund seems like the way to go.

#179 mouldyinYVR on 11.02.16 at 12:16 am

http://bc.ctvnews.ca/mountie-filmed-dragging-elderly-man-down-stairs-in-coquitlam-1.3136734

What were they fighting over?

I don’t know – I wasn’t there, but you can be sure it had to do with repair costs and special levies (assessments).

Anyone in BC who thinks the leaky condo crisis has gone away is fooling themselves. Low rises – high rises – the problem is rampant, expensive and seemingly incurable. Once property prices start to drop in YVR, blood will run in the streets…………

https://en.wikipedia.org/wiki/Leaky_condo_crisis

“Typical repair costs are in the tens or even hundreds of thousands of dollars, resulting in significant hardship, bankruptcies, and lawsuits against the developers, contractors, architects, and others involved in the original construction and maintenance of the buildings.
In total, approximately 45% of the 159,979 condominium strata units and 57% of the 700 school buildings constructed in B.C. between 1985 and 2000 were found to have envelope leak problems.It was reported in 2002 that 90% of 3-4 storey units built have serious problems and that some have undergone envelope repairs two and three times. In 2008 it was estimated the cost to repair the damage to schools alone would be nearly $400 million.”

#180 Tony on 11.02.16 at 1:10 am

Re: #46 traderJim on 10.31.16 at 10:03 pm

Both trade in thin volume but an individual could purchase both over a couple of months. For an institutional trader there is no trade in either because of the volume.

#181 John of Grant on 11.02.16 at 8:43 am

Mark #157 I invite you to read Teranet/NB index methodology. It looks at changes in prices over time. The fact that newer houses are more expensive is irrelevant.

http://www.housepriceindex.ca/documents/MethodologyEN.pdf

#182 The Technical Analyst on 11.02.16 at 12:19 pm

Just across the ticker:

Dan Merica ‏@danmericaCNN · 15m15 minutes ago

New CNN/ORC polls:
FL
Clinton: 49%
Trump: 47%
NV
Clinton: 43%
Trump: 49%
AZ
Clinton: 44%
Trump: 49%
PA
Clinton: 48%
Trump: 44%

Closer than you might think. Reminds me of the BREXIT call.