Maybe

Maybe it’s nothing. But maybe it’s something.

In the last 24 hours two people I work with have discovered there’s another side to the nation’s most oversexed real estate market. Dismay. Disappointment.

Jane lives in one of the hot burbs north of the Big Smoke, in an updated townhouse complete with a new kitchen. A few weeks ago a lesser version of the same place changed hands in a bidding war for $913,000, so she listed lower (on her realtor’s advice) and eagerly awaited Offer Night.

Fifteen showings in a couple of days, then this note yesterday:

“There were no offers forthcoming tonight. The agent is taking down the listing in order to relist it at $800,000, and not holding offers, so any will be looked at as they come in. This is a very different scenario than two weeks ago. The agent said the number of listings in the area has jumped from approx 80 to 300 in the last 10 days. So it’s a wait and see approach. No big bidding war here!”

Not far away is a big, splashy detached house with a fab workshop where Derek keeps his vintage cars. He wants to retire and get out of Dodge. So he listed at the outrageous price of $2 million (“I figured, what the hell…”), then won the lottery

“Sold it tonight for 2.25 !!”, he texted me.

Then yesterday – just four days after the bidding war – this:

“Crap !!!
Now buyer is getting cold feet. He hung up on my agent today.
Apparently husband wants but wife getting cold feet.
What are the implications of this? Also have a call into my lawyer.”

Coincidence? Maybe. But perhaps not. There comes a moment in the life of every asset bubble when valuations turn so absurd even terminally horny investors take a walk. This may be now, Or yesterday. Last Monday. Whenever. It will come. Meanwhile the shift in a market characterized by a tidal wave of buyers and drought of listings may already be evident. Residential listings in the sprawling GTA just bubbled 15% higher in March, compared to the same period a year ago,

There’s every reason imaginable why sane buyers would be putting it back in their holsters. The average home in the region cost $916,567 last month, a jump of almost $229,000 in a single year. And whose income has increased enough in twelve months to swallow that? The average detached in 416 sells for $1.6 million, while a single home in the burbs (for the love of God) is now $1.1 million. Overall, prices in March were up 33% from the winter of 2016. It was, as forecast here, an historic monthly report. Never before has there been this kind of an increase, because never has an urban area in North America this large seen its locals go so starkly insane over piles of bricks. This is tulip time. Bre-X. Nortel. Dot-com. Bullion. And soon it will end in similar fashion.

While probably croaking under its own flab, this market may be further murdered by politicians. After all, these monthly sales stats have everyone clucking about ‘doing something.’ The mayor is growing closer to an Empty Houses tax by the moment – something draconian in a city with an inventory of over 20,000 unoccupied condos. The province is mulling a speculation tax and a foreign buyer tax in its April budget. The latest poohbah to speak out is the head of Canadian banking at Scotiabank who says: “Double-digit price increases are not sustainable and they’re not healthy. This market has been going straight up for a very long time. So it’s going to come to an end at some point and it’s a question of how it ends. And we want to see it correct smoothly, we want to see a soft landing and what that would argue for is actions sooner rather than later.”

A soft landing would be astonishing. This giant Airbus of a market is fully-loaded, at the end of an epic flight, running on fumes, with flaps down and underwear clogging the landing gear. The pilots are on leave from Love it Or List It, Brad Lamb’s manning air traffic control and the runway’s covered in hormones. It’s all hurtling earthward at 858 km/hour, and people expect a soft landing?

Says an experienced GTA realtor: “I see routinely in the last week that on bidding day no offers come. The change is very drastic. Just in a week.”

Hope you sold.

183 comments ↓

#1 Kate on 04.05.17 at 5:35 pm

And the 1989 crash happened after y/y increases of 36%, didn’t it?

Pride goeth before a fall, I suppose.

#2 Sunshine on 04.05.17 at 5:42 pm

I bought my townhouse pre construction in 2007 (back when you could get a nice discount in price over resale) in the big smoke. Area was a little iffy at the time but is now regularly referred to as the hip and trendy hood of toronto’s west side. It’s tripled in price if you believe the valuations and recent sales- but here the thing, I’m good here for at least another 5 years. The mortgage is tiny, and my income has doubled in the last 10 years- maxed reg accounts and moving into non reg in the last couple of years. If I sell and rent I would absolutely be paying more in rent than current carrying costs. And moving is a pain in the a$$. Any advice take the cash and rent or stay and just ignore all the hype?

#3 HoweStreet.com on 04.05.17 at 5:47 pm

Ross Kay on HoweStreet.com Radio
Toronto Housing Bubble Exact Echo of Vancouver’s.
Toronto will prove, the bigger they are, the harder they fall.

http://www.howestreet.com/2017/04/03/toronto-housing-bubble-exact-echo-of-vancouvers/

#4 Debtslavecreator on 04.05.17 at 5:49 pm

No such thing as a soft landing after a historic credit bubble
Roughly 50% of GDP “growth” which is to say 50% of the “income” growth has been due to this out of control RE/debt bubble. It is temporary “income” but the debt taken on will be permanent until defaulted on
This embarrassing economy has been an illusion of prosperity thanks to the junk neo-liberal policies adopted years ago – the Canadian economy is a house of (credit) cards. Once the inflation adjusted credit growth rate dips below 2% and stays there it will be the start of a massive economic problem
I do think we’ll survive but what we face will be worse than 1990-1995
At Best we can hope for 20-25% drop with out aptly named Loonie diving deep enough to make our housing and exports to cheap to resist
The amount of leverage in the system is mind boggling

#5 Damifino on 04.05.17 at 5:57 pm

So it’s going to come to an end at some point and it’s a question of how it ends.
————————————–

If he’d been reading this blog for the last several years he would know the answer to that.

Man… has it not been said enough times?

#6 Timely on 04.05.17 at 5:58 pm

Timely pick me up. I was once asked by, a somewhat famous stock broker. “You know what my clients get most made at me about?. The additional money they could have made after I’d advised them to sell!”

I sold my place in 2015. Bought it in 2010 and sold it for 60% more than I paid. Crazy. Been renting ever since then. Found out today my realtor buddy, who lives 2 doors down, is listing his place for almost double what i sold for and it’s not as nice. It’s been bugging me for the past couple of hours.

I get it – A bear can make money. A bull can make money. A hog loses money. It’s encouraging to hear Toronto Mayor John Tory comment today, on the cost of real estate. That the practices of the real estate industry should be investigated.

#7 Vundo on 04.05.17 at 5:59 pm

Lately I am getting lots of ads for condos coming through my social media news feeds. Some of them are even starting to look closer to being within reach. And they are pretty. The temptation is real, and not so easily dismissed as the ads telling me that attractive Russian women are seeking men in my area.

So, thank you very much for today’s post. I needed this to remind me why I need to stay committed to building a portfolio and not buy a condo.

#8 Penny Henny on 04.05.17 at 6:00 pm

Penny Henny here reporting from Etobicoke. As you may or may not know my house is hitting the market in less than 3 weeks and I have been watching the recent sales with great interest. What I think has been happening is a softening in sale price, now this is not a precise science as these are 60 year old bungalows and every one is different.
I will see what one sale goes for tonight and report back tomorrow. Listed at $948 and I expect $1,195 to $1,250.
Tomorrow we’ll know.
Fingers crossed. 20 days till list and 27 days till sold.

#9 rainclouds on 04.05.17 at 6:02 pm

Yes all the banks are Getting ahead of the curve tripping over themselves to warn the plebes of significant overvaluation.

When the SHTF and the greater fools are fully enmeshed in multi generational debt they have no hope of paying off. The disbelief, then anger, will come to a boil.

Politicians, REBoards, developers will be looking for rocks to hide under.

http://wolfstreet.com/2017/04/05/toronto-house-price-bubble-goes-nuts/

Meanwhile is Miami a precursor to the carnage coming to Canada?

http://wolfstreet.com/2017/04/03/hidden-crashing-prices-of-miami-condo-bubble-glut/

#10 common sense on 04.05.17 at 6:03 pm

Nice article…what a coincidence!

Janet even uttered the word “Bubble” today.

Gee whiz really Janet, really ?????

Is this the top?

Another Interest rate hike in 2017?

HA HA HA

#11 George on 04.05.17 at 6:04 pm

Garth, funny that you mention this. A few houses in Vaughan have been sitting on the market for a few weeks now. Two of the ones I was following both were taken down and relisted for about ~20% less ($1.8 to $1.5). From a few RE agents in Vaughan I talked to, they’re saying bids are drying up. Let’s see where this goes.

#12 GFC v2.0 on 04.05.17 at 6:05 pm

Not if former Ontario-PC-leader-turned-OREA-CEO Tim Hudak has any say in it.

He must be livid to see his former Liberal rival all set to choke his current golden goose.

#13 Lulu on 04.05.17 at 6:07 pm

Nah!!!! it’s just bluff, listing soar means more flippers getting their baby ready for the greater fool to grab, big smoke wont extinguish, it’s burning baby, burning hard..

Mortgage specialist just announced on global news saying more and more owners called for re-finance and exnteded amor. So, the wave is coming for sure and Spring is full of tulip bulb for sell, who is buying the most ?

#14 Patiently Waiting on 04.05.17 at 6:10 pm

Toronto buyers should take a look at what is starting to happen in the lower mainland. In my former hood White Rock prices are starting to drop significantly now that the Foreign Buyer Tax is starting to have impact on sales. It is not uncommon now for properties to sell for $200,000 or $300,000 below original asking price. To back up my claim see the following examples:
1728 156A St. recently sold for $298,000 below original asking price;
2527 156 St. sold for $299,000 below original asking price;
15581 Marine Drive reduced asking price by $1,120,000 remains unsold;
13775 18th Ave. now $378,000 below original ask and unsold;
3036 159A St. now $400,000 below original ask and sits unsold;
2011 137A St. now $370,000 below original ask and unsold …
Toronto will soon bring in a similar tax as did Vancouver and the result will be the same …

#15 davikk on 04.05.17 at 6:16 pm

Toronto House Price Bubble Goes Nuts

http://investmentwatchblog.com/toronto-house-price-bubble-goes-nuts/

#16 Vit on 04.05.17 at 6:20 pm

buyers did not get cold feed . Whats happening this days because of betting wars some buyers going over qualified price and cant get approval from the bank for additional $$$.
We are much below Vancouver prices so still room to grow . Nothing changed from lust month.

#17 Vit on 04.05.17 at 6:28 pm

I was interested to buy this one as a project .
https://www.realtor.ca/Residential/Single-Family/17975068/6-ROCKINGHAM-Drive-Toronto-Ontario-M9A1P3-Princess-Rosethorn

came on a market 2 day ago and my agent told me that they have an offer 1.7 mil , days before open house . So tell me this market getting cold feet …

#18 fancy_pants on 04.05.17 at 6:28 pm

Hope you sold? When? surely not when you started your warnings back in ’08?

Every year your advice on RE appears sound but every year it defies gravity. No discredit to the financial advice you provide here, but let’s call a spade a spade, your predictions on interest rates and RE have overall been a bust.

Here comes the fun part, I suspect the federal reserve is going to artificially push rates up to stick it to Trump. We are so in for it. Pick your poison. $5 loaf of bread and $1.30 gas or a RE taking a dive. I’ll blow the trumpet for Garth now. What may enfold could be far worse than 2008.

#19 TCContrarian on 04.05.17 at 6:34 pm

“Never before has there been this kind of an increase, because never has an urban area in North America this large seen its locals go so starkly insane over piles of bricks. This is tulip time. Bre-X. Nortel. Dot-com. Bullion. And soon it will end in similar fashion.”- GT

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

“Bullion”?? Why do you need to ruin a sound analysis with this, Garth? No-one is ‘loving’ precious metals now (which are trading just above the cost of production presently), and that, by definition, cannot be an asset in a bubble situation.

Why such fanatical hatred, Garth? Were you a buyer in 1980 at $800/oz.?? Now THAT was a bubble – but $1250 now is just at break-even for many producers.

I enjoyed and agree with the rest of you entry – so don’t think I’m here to bash…

Peace Brother!

TCC

My reference was obviously to the bubble buyers. Relax. — Garth

#20 Post on 04.05.17 at 6:40 pm

BOB RENNIE and the City of Vancouver are being investigated by the RCMP for a possible property fraud.

http://vancouversun.com/news/local-news/rcmp-federal-unit-investigating-controversial-vancouver-land-swap

#21 TurnerNation on 04.05.17 at 6:42 pm

Any dip will be bought with low rates.
Toronto is ground zero to a sophisticated network of Real Estate cultist training camps.
We saw Baloney Robins and BullshtDog and their recent graduates.
Do no discount the silent troopers – The REINers.

#22 The Fat Lady on 04.05.17 at 6:45 pm

Gonna be a “Trump in a China shop” before you know it.

We all know what the Rothchilds said about the best time to buy??!!

#23 AK on 04.05.17 at 6:47 pm

#10 common sense on 04.05.17 at 6:03 pm
“Nice article…what a coincidence!
Janet even uttered the word “Bubble” today.
Gee whiz really Janet, really ?????
Is this the top?
Another Interest rate hike in 2017?
HA HA HA”
—————————————————————-
Try not to laugh too loud.

A 63% chance of a : June Rate Hike

#24 not 1st on 04.05.17 at 6:49 pm

Garth there was just an article in the G&M the other day says prices are never going down because developers have learned how to restrict supply.

#25 Brian Ripley on 04.05.17 at 6:55 pm

My Vancouver vs Toronto Housing Chart is up

http://www.chpc.biz/compare-toronto–vancouver.html

The price gap is narrowing.

#26 Vit on 04.05.17 at 6:55 pm

Guys you have to realize that 30% price increase in less than a year will be spreading internationally . Folks that made a killer in lust stock run will move $$$ to more save Toronto real estate market . Read latest news investors from South Korea coming big to Toronto we are very cheep for them . People who sell now well regret this next year .

#27 Tim on 04.05.17 at 7:00 pm

Kind of like what happened in Van, although I can’t imagine that even Wynn would be as inept as Clark

https://thetyee.ca/Opinion/2017/04/04/BC-Liberal-Falsehoods-Scandals-Clark/

#28 The Limited Sage on 04.05.17 at 7:01 pm

An article like this is a breath of fresh air, seeing as all my 27-30 mortgage payer friends laugh at me every time I bring it up in discussion this market is not sustainable.

They tell me they’re loving it and that it won’t end (which we all know isn’t true). Then they state I just couldn’t possibly understand because I still live at home…

Normally I’d look forward to the moment where I get to tell them “hey, I told you so!” but where’s the fun in that when they’ll be homeless by the time I get to say it?

#29 crdt on 04.05.17 at 7:04 pm

The market here in Langley seems to be on fire still. Local stats are picking up for the selling season. Wonder what it will be like when people stop throwing huge numbers around like it was nothing.

#30 Capt. Serious on 04.05.17 at 7:13 pm

I’ve given up trying to predict when normality will come back, but I suspect not until money costs more and is more difficult to borrow. Eventually a lot of people are going to know what a bad investment feels like, but we’re just in the pre-game warm up of that timeline.

#31 Sierts on 04.05.17 at 7:30 pm

No 2 sunshine

it’s easy. Add mortgage(s), loans, creditcard depts, bank account overdrafts etc.
If you could pay off all these depts without selling your house – and have enough income after that, to pay your food, taxes and house repairs – then you really can afford to keep the house. so simple…

#32 TurnerNation on 04.05.17 at 7:32 pm

Re. Ontariowe’s budget contains a “Gender lens”… maybe I’m old fashioned but I call that “Beer Goggles”.

:-p

M41ON

#33 45north on 04.05.17 at 7:33 pm

While probably croaking under its own flab, this market may be further murdered by politicians.

I’m afraid that the time for action has come and gone. The Federal Government is responsible for the CMHC, bank regulations and interest rates. The provincial Liberals under Wynne should stay out. They can contribute to the Housing Statistics Framework which the federal Liberals put in their budget.

HoweStreet.com: Ross Kay says the GTA is a huge bubble and the consequences of it bursting are going to be huge. The consequences are going to hit the Ontario and federal Liberals. I mean you can bullshit all you want but if the GTA is underwater then people cannot sell, real estate sales dry up. Home renovations dry up. And it’s not like the Bank of Canada can lower interest rates: whether or not the US Fed raises rates further it has already raised them. The die is cast.

rainclouds: from your link: Even the big Canadian banks are fretting. “Let’s drop the pretense. The Toronto housing market and the many cities surrounding it are in a housing bubble,”

I don’t think the government can do anything. The US pretty much proved that mortgage modifications don’t work. I mean if you lose your house then you lose your house. 10 years of bullshit doesn’t help.

#34 down and out on 04.05.17 at 7:33 pm

http://windsorstar.com/news/local-news/crazy-windsor-real-estate-market-hottest-in-decades

#35 neo on 04.05.17 at 7:43 pm

Garth,

This is already starting to happen in Milton. At 299 Leiterman Drive a detached house listed for $675,000 held off offers expecting a bidding war into the $900,000’s. They got zero bids on offer day and had to relist at around market value at $850,000. They still ended up selling for $875,000 but the market here is changing. Like I said in a previous post. The market here peaked March 2nd and has been stalled and slowly drifting down ever since.

#36 Smartalox on 04.05.17 at 7:43 pm

Meanwhile, in Vancouver…

REBGV has yet to publish its Statistics Package for March 2017. It is April 5th.

By comparison, February’s package was published March 3rd.

I guess that they had to send out for more turd polish!

Or maybe they’ve got a deal in place to hold the results until after the election on May 9th.

#37 Airbus? on 04.05.17 at 7:47 pm

More like the Hindenburg. Now that was a gasbag.

“Oh, the humanity!”

#38 SimplyPut7 on 04.05.17 at 7:53 pm

I think it’s a fluke, though the house down the street from me listed for $850,000 also didn’t get any offers. No bidding wars like before.

We have been here and done that, the agents will remove the listing, list it later at a lower price and then put up a fancy smug sign stating they sold over asking.

Only when people are crying in their soup because they have realized what they have done to themselves, will I believe that the end is really here.

#39 Lol on 04.05.17 at 7:54 pm

Cmon. Gee . Ship sailed for affordable housing in the gta.

Do people really believe gta housing prices will decline 40%? Is it the same people that were calling for a correction in 2006? Run from them….

#40 Vit on 04.05.17 at 7:58 pm

DELETED

#41 Mr Happy on 04.05.17 at 7:59 pm

“Hope you sold”

I did.

#42 the Jaguar on 04.05.17 at 8:04 pm

Someone once wrote ( maybe it was on this blog? ) that while canadians wail on and complain endlessly about the profits of canadian banks, they are in fact secretly very proud of them and their stability. When things fell apart a few years ago during the financial crisis they stood apart from the whole debacle. Scotiabank is not alone in expressing concern. Other economists from other banks are also using the words “bubble and correction”. Believe it or not, canadians put some faith in their banks. When those that directly benefit from big mortgages express concern, ears perk up. Maybe some will take their foot off the gas and apply the brakes. Fools will always rush in, of course. What will be interesting to me when the crisis comes is how appraisal values will be justified. There will be big payouts for errors, omissions, and consorting and colluding with those who wish to profit from all the madness. The Banks will survive mostly unscathed. Like all great sting operations they will have all bets covered off. The Mafia can’t hold a candle to the Big Five.

#43 Cold Feet on 04.05.17 at 8:04 pm

Yes, I have started hearing terms like, ” the deal fell through because of cold feet.” Deals I have been following, fell through this week, “cold feet” was the excuse. It has begun, the bottom will fall out shortly. If you need to sell, your chance is soon about to pass. Sorry Vit, take it from an insider in the GTA, the ground beneath is falling away.

#44 Londoner on 04.05.17 at 8:07 pm

GTA house prices were pretty cheap until about 2010. Then we got low rates and people decided to get a little more adventurous with their borrowing. Between 2011 – 2015 people found out that their renewal rates were actually lower (not the “teaser rates” they were warned about). So it was time to move up and throw caution to the wind. By 2016 almost all mortgages from 2010/11 had renewed with lower rates and people started to accept this as the new normal. Now a professional couple earning $100k each with a $500k deposit (equity from selling their first home) can buy a $1.6 mil house and avoid all those pesky new lending controls implemented by Morneau.

#45 Millenial on 04.05.17 at 8:09 pm

I’m sick of thinking about all this. I need to get a hobby or something. Great blog, great comment section, I just need a rest. Appointment on Saturday afternoon to look at a rental unit, good friend lives in one of the buildings, a little over $2k a month; i can easily afford it. Wish me luck.

#46 For those about to flop... on 04.05.17 at 8:13 pm

Smartalox on 04.05.17 at 7:43 pm
Meanwhile, in Vancouver…

REBGV has yet to publish its Statistics Package for March 2017. It is April 5th.

By comparison, February’s package was published March 3rd.

I guess that they had to send out for more turd polish!

Or maybe they’ve got a deal in place to hold the results until after the election on May 9th.

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

Hey Smartie,I posted this one this morning.

Makes for some interesting reading.

Pretty dramatic drop off in March for sold dollar volume for detached houses in Vancouver…

M42BC

https://imgur.com/a/JRr7T

#47 Market watcher on 04.05.17 at 8:14 pm

Over the last 10 years the high end really isn’t nuts: it’s compounded at about 5% – not insignificant for any asset but not insane given where interest rates are. What is insane is that the previous mid range $800-1.5mm has gone crazy and compounded at about 10-15%, and more so in the last 4 years. In Midtown Toronto buyers are now paying $3m for absolute junk semis needing massive renovations. These would have sold for $1.35m 2 years ago. Why is this insane? Because its domestic buyers forced to pay up and as the high end isn’t moving at the same pace within 1-2 years this now $3mm mid range will in theory surpass the current highest end. And that won’t happen (noones paying more for a worse house and in worse condition than a much better one on a better street a block away maway) We are very close to the end game….

#48 X on 04.05.17 at 8:14 pm

Amazed at all of the people that don’t believe house prices can fall/depreciate. Anyone that doesn’t believe it could happen…has all of their eggs in one basket. It is like if they hope that rates can’t rise, or the government will save them enough, that it will actually be true.

A correction, is long overdue. The more I hear about 26% yoy increases, and now this month 30% yoy increases, reaffirms the ignorance of this market.

#49 A Reply to #22 The Fat Lady on 04.05.17 at 8:17 pm

The best time to buy? Hmm. When the fat lady sings? When there’s blood in the streets? I give up.

#50 AGuyInVancouver on 04.05.17 at 8:19 pm

#26 Vit – Did you read that in a fortune cookie?

#51 Real Trump on 04.05.17 at 8:20 pm

**This is Fake News Folks**

Mr. Turner is a CNN agent and Hilary has given him money to propagate this fear mongering.

Houses never go down north of the 49th parallel.
:-)

#52 Crash is coming on 04.05.17 at 8:24 pm

Yes a crash is closer….so what…a 50% decline will bring prices down to 2014 or 2015 prices…this will only affect 1 to 2% of sales in the GTA since the vast majority bought before this.

You all missed out….admit it!

#53 Shortymac on 04.05.17 at 8:26 pm

Heard something similar happened in vancouver after the foreign buyers tax.

Friend’s mother smartened up and finally was willing to sell, it ended up being a nightmare. Lots of people were putting in offers on multiple places in a panic to get in before the tax dropped.

She ended up having 3 offers being rescinded until she got hers.

Mom then turned around and bought on inflated property in Barrie, despite a cancer diagnosis.

Some people just won’t learn…

#54 Tony on 04.05.17 at 8:27 pm

Re: #8 Penny Henny on 04.05.17 at 6:00 pm

Why not list and sell before the Ontario budget. It could net you at least an extra $50,000. If they bring in a foreigners’ tax and or make the banks responsible for at least 20 percent of the mortgage risk the entire real estate market will tank. Other measures will probably accomplish nothing. If one of both of these measures takes places you’ll wish you had of sold sooner.

#55 Fed-up on 04.05.17 at 8:29 pm

“The head of Canadian banking at Scotiabank who says: “Double-digit price increases are not sustainable and they’re not healthy. This market has been going straight up for a very long time.”

Chortles the banking imbecile while he’s cutting a $1.3 million cheque to some mentally deranged couple who just bought a $1.6 million pile of crap off of the Danforth.

Our illustrious banks could have stopped this a long time ago. Please don’t ask anyone who dragged Canada into this mess, to drag you back out of it.

#56 Land of Inequality on 04.05.17 at 8:33 pm

What if the terrorist running the government of Canada have no intention of letting home prices normalize. Maybe they foresee the coming coffin boom and know the only way to offset the hundreds of thousands of soon to be dead baby boomers is even more insane immigration. Maybe the home is the pension that nobody has anymore.

Let’s face it. The housing bubble could have been stopped at any time.? This could continue for another 20 years.

My advice is move to Europe or the USA. Canada is the new Kobayashi Maru.

#57 zee on 04.05.17 at 8:34 pm

houses are flying in markharm and richmondhill. no cold feet happening here.

#58 Crash is coming on 04.05.17 at 8:37 pm

Forgot to mention Guelph…. everything has been listed $100K more this year than last..about 20 to 25% higher. Nothing is selling!!! People are pulling their homes from the market! In 30 listing alone in one popular neighbourhood only 2 detached homes were sold….the rest…NADA!

#59 Tulip Prices on 04.05.17 at 8:37 pm

Is now a good time to be buying tulips?

#60 acdel on 04.05.17 at 8:41 pm

There is soooooooooooooo much uncertainty out there, why oh why do people not realize this? Perhaps now they have, unfortunately so many lives will be ruined by speculative and fear driven markets out there.

History really does repeat itself, it is sad and unfortunate!

Garth, give yourself a pat on the back for trying teach and hopefully reaching many with your blogs, not always right, but you do care!

#61 Fiendish Thingy on 04.05.17 at 8:42 pm

Interesting phenomenon out here in Maple Ridge, BC; houses in the “sweet spot” (i.e. the max most folks can qualify for) of $500-700k selling within 2 weeks, $700-900k, sitting for a month or more, and those above $1mil not moving at all.

My theory: the folks in Vancouver are cashing out and paying cash for narrow cornflake boxes in the slums of Albion. Once the market psychology changes, as described in today’s column, the Airbus, with a full tank of jet fuel, not fumes, comes crashing into the control tower, spreading Trumpianesque carnage in it’s path.

Just waiting for graveyard whistlers to post “a 30% correction will take prices back to last year- big deal”, ignoring that a 30% drop erases a 50% gain…

#62 Ret on 04.05.17 at 8:49 pm

#17 -6 Rockingham
I checked out the listing. “Chandelier Excluded,” so I was curious to see what I would not be getting for $1.1M.

Anyone offering $1.7M certainly deserves a rare piece like that to grace their dining room and impress their family and friends!

#63 cramar on 04.05.17 at 8:55 pm

#131 Don on 04.05.17 at 1:38 pm

I am thinking about cashing my mortgage free north york house, which worth about 4.5 million in today’s market and can sell it in blink with no condition, this is the single investment I have for 2 decades. Then buy a decent house for half million in London, ON, so with 4 million tax free money, I think I’m going to be very happy.

——–

Congratulation! You are one of the few who use their brain. If everyone would have your thinking skills, there would be massive selling in the GTA, and people retiring to where it is cheap! Here, someone can get a new house (which is really too big for retirement) for $370k.

https://www.realtor.ca/Residential/Single-Family/17585890/19-SUNNINGDALE-LEAMINGTON-Ontario-N8H5P8

P.S. London’s good, but too big for me, plus we have better weather.

#64 Tom on 04.05.17 at 8:56 pm

Has there ever been a soft landing for a bubble? Seriously, I don’t know that there has been…

I don’t think recent soft(er) sales is an indication of the bubble popping – debt is still cheap, employment is still high, no major policy announcements yet. I don’t see any crazy announcements coming either – Wynne’s heading into an election in about a year with record low popularity – any policy that actually works will work against her and hurt the Libs chances of balancing the budget as promised. The differences in housing markets within Canada is really the big challenge, how do you hit Toronto (and GTA) and not destroy other cities? This is likely an opportunity for all levels of gov’t to add new taxation (a.k.a. gov’t crack) and still have support from voters – foreign buyers tax, speculators tax, vacant home tax, heck throw in a higher land transfer tax as well – or add it to surrounding areas that currently “aren’t paying their fair share”. It likely won’t have a huge effect on the market other than to pad gov’t coffers and make all levels appear that they are attempting to help the cause of making housing more affordable. But no one will sell a house for less than they can get….unless they have to sell or the bank gets their hands on it. So until something big gets the ball rolling – this is likely just an early thaw as greedy sellers flood the market with over-priced housing. If a house was valued at $700K last year, sold recently for $1.1 mill, but now “only” sells for $900K – hardly a sign that the bubble has popped. Just a sign that the insane acceleration has tapped the brakes (all in my uninformed amateur opinion of course).

#65 Flint on 04.05.17 at 8:57 pm

#61 I get a little laugh from that all the time. People suck at math and that’s probably part of how we ended up here.

#66 Another house ...UNSOLD on 04.05.17 at 8:57 pm

Looks like people are pulling out of deals. My buddy is an agent in Richmondhill (gta) and the deal is having problems as the buyer is trying to pull out. Looks like we are now over the peak heading down the huge mountain.

#67 Northwind on 04.05.17 at 9:02 pm

I don’t see how the market can mysteriously change its direction without serious actions taken to stop the money laundering and dirty money flow from China. I came from there, so I know there are a lot of dirty money there, eager to move out that country at all cost. I also lived here long enough to know that a lot of Canadians do not realize how much the world has changed in the past 30 years, and how much damage foreign money can cause to this country. Canada’s real market is like a little monkey before an huge elephant, it can be turned up and down easily by the seemingly unlimited volume of dirty money trying to get out of China. There is no better places to do money laundering and parking money than Canada’s real estate market, because we have the most short-sighted politicians here in Canada, they are willing to sell this country out with their short term gain; and we also have the greedy, unchecked real estate special interest group, they want to create a market condition that they can benefit most from this shameless selling out, leaving the damage to this generation, and perhaps to many future generations as well. It is the Canadian short-nearsightedness and greediness combined with dirty foreign money working together.

Similar things also happened in Australia, New Zealand, and many other places. The good things is people at those places keep their eyes open, and they are courageous enough to take remedy actions. Here in Canada, unless we Canadians take actions to stop this madness, things will deteriorate instead of getting better.

Garth, you are a well known and well-respected figure in this country, and I think you can help the people here better by help us to push for laws that restricts, or even forbids foreign speculators like they did in Australia. Once the foreign money laundering flood is stopped, the market psychology will change, and rationality will kicked in, and reasonable adjustment will follow, and damage can be partly recovered.

Nope. Straw man argument. The disease is largely within us, not imported. — Garth

#68 Braj on 04.05.17 at 9:06 pm

#26 Vit on 04.05.17 at 6:55 pm
Guys you have to realize that 30% price increase in less than a year will be spreading internationally . Folks that made a killer in lust stock run will move $$$ to more save Toronto real estate market . Read latest news investors from South Korea coming big to Toronto we are very cheep for them . People who sell now well regret this next year

People who don’t sell will regret this next year. Once it all unravels it won’t be pretty. Your mentality is rampant, pure ignorance. A feedback loop until it becomes too much.

#69 traderJim on 04.05.17 at 9:11 pm

Since houses are now seen as investments by a lot of fools, prices will probably act like stocks.

The blow-off top MIGHT be here, and people will stop paying absurd prices (perhaps only because they can’t) so that the folks rushing to list right this minute to get $2m for their $800k house will be out of luck.

But all those folks who missed out buying the $1m place that jumped to $1.5m almost overnight will be sitting on the bid at $1.1m , maybe $1.2m, feeling great when someone dumps a crackshack on them.

Only after the ‘ones who missed out’ are cleaned out of the market will the real crash happen.

And with continued liquidity flooding the world, you might even see a bounce from this ‘correction’.

I would bet on the latter scenario actually.

Only thing that will really pop this bubble will be higher rates, and making banks responsible for their credit losses.

All this Chinese dudes tax and vacancy tax stuff is pandering to the masses who can’t think past their nose.

#70 When the whip comes down on 04.05.17 at 9:12 pm

In the market we are looking at my realtor sent me a list of sales and pending closings. What I have observed looking at this document is that there are transactions that are very comparable properties in the same area selling for significant price differences. Is it the case that some weeks buyers just choose to take a breather and not place offers so a low bid takes it? Then other weeks it’s just a frenzy? It doesn’t seem to make much sense when you analyze the quantitative features. Or do realtors not even know how to price things in this messed up situation where emotion is simply driving everything. It’s almost like an auction house where it depends who shows up with a bid. There should be some parity between similar properties but sometimes they are so far apart it’s non-sensical.

#71 DON on 04.05.17 at 9:15 pm

‘Gloomiest’ March in Vancouver since record-keeping began

http://www.cbc.ca/news/canada/british-columbia

Sounds about right! Every other year it comes close to breaking the record.

On a Victoria note: Seen very few listings. For the first time they may be more Provincial election signs than real estate one. May 9th Provincial election.

#72 DON on 04.05.17 at 9:18 pm

And this. Up until recently Bob Rennie was Christy Clark’s donation fundraiser. Yikes!

RCMP investigating controversial Vancouver land swap

A complaint has been filed with the RCMP concerning a controversial City of Vancouver property exchange involving a luxury condo tower to be built in Yaletown, Postmedia has learned.

#73 Leo Trollstoy on 04.05.17 at 9:23 pm

Sunshine list question. A few of my friends are on the list. One makes $170k as a judge. Won’t say any more due to privacy. But he also teaches on the side. Does the sunshine list income shown include the teaching gig or not? My guess is that it shouldn’t because it’s not related to his government job.

#74 Rob on 04.05.17 at 9:31 pm

Found under the title: Between a Rock and a Hard Place –

Latest Toronto Headlines:
y/y house prices up 33% vs
y/y rental increase 100%

What’s a Greater Fool to do as the RE bubble bust slowly approaches?
Answer: buy a small house on wheels and get the hell out of Dodge!

The rent increase was for one location. Get a grip. — Garth

#75 Tudval on 04.05.17 at 9:41 pm

Anybody who actually follows the market and doesn’t just draw conclusions from reading the stats, knows these air-pockets are very common. They can last from a couple of weeks to a couple of months. The reasons revolve around price increases and lots of negative talk and perhaps fear of market intervention, elections, budgets, stock market corrections, etc.. etc… All normal stuff. No market marches on day after day.. but if you only check every 3-6 months you never notice these hiccups. But sure, at the ultimate top, if such a thing will ever occur, it will also seem to start with just a ‘normal soft patch. Given the lack of listings in the city core and drop in the detached sales, I would expect that the suburbs will be particularly vulnerable to significant (but probably temporary) drops in demand.

#76 Tudval on 04.05.17 at 9:51 pm

#1 Kate The crash of ’89 didn’t just happen after a 36% price jump, it was brought by government intervention: cap gains and rate hikes. The people got what they asked for: lower prices and also a 10 year-long recession, with all the good stuff – leftist governments, big deficits, tax hikes, constitutional crisis, unemployment etc… Sometimes people just get tired of having a job and food on the table.

#77 I'm stupid on 04.05.17 at 9:52 pm

Hi Garth

Can you or anyone else please enlighten me on something strange I recently discovered.

I was entertaining the idea of buying an apartment building 30 units. If the cap rate was right I thought why not. So I contacted the listing agent for details. The regular stuff, price, income, expenses etc etc. The realtor emailed me a package detailing, the price and comparables etc. All normal stuff until the mortgage details. Not worth my time but the following is peaking my curiosity.

So 1st mortgage cmhc insured 4million
And second mortgage cmhc 3million
Both with First Nationl

How is that possible that a commercial building is cmhc insured?

#78 Leo Trollstoy on 04.05.17 at 9:54 pm

Just waiting for graveyard whistlers to post “a 30% correction will take prices back to last year- big deal”, ignoring that a 30% drop erases a 50% gain…

And take us back to 2013. Big deal

#79 Strange on 04.05.17 at 10:04 pm

Canada is not a friendly country for young families with such expensive housing. They are the ones who need housing the most. Who’s side are the various levels of government in Canada on?

#80 Rob on 04.05.17 at 10:06 pm

#74 “The rent increase was for one location. Get a grip. — Garth”

Fine but we both know that Ontario rent controls are absent for buildings built after 1991 (100% increases not withstanding) so there’s no perfect solution out there at the moment for the “average joe/jane”. Just saying.

#81 Blacksheep on 04.05.17 at 10:06 pm

I must admit, RE markets in Van (+TO) are friggen insane.

BUT….we have honestly had the longest, coldest shittiest winter I can remember in my 53 years in Van.

Mr. Flop keeps providing, asking price reduction based, psychological loses, but rarely supplies samples of people actually losing, $’s.

So I’m going to go out on a limb and forecast Van demand will come back on mass, now that the sun is back, not to the crazy levels of the past, but more than enough to support current or very close (-5%) to current RE valuations.

I will revisit my call in August and gloat with pride for my prescient insight or be eating crow.

Time will tell…….

#82 Lee on 04.05.17 at 10:09 pm

If I heard Ross Kay’s latest podcast correctly he believes Toronto might have another $200,000 to go up after March before correcting. Is this what he said? Hard to tell what he means.

#83 Ronaldo on 04.05.17 at 10:10 pm

The housing market is like a pyramid scheme where people get sucked into the scheme only to realize what a drastic mistake they have made after sleeping on it and the next day frantically want to get out of it. There will be many more like those mentioned in the days ahead.

#84 Pierre on 04.05.17 at 10:11 pm

Hi Garth,

Here is an idea for a futur blog: Let’s vote how much Toronto buyers will be willing to pay for a townhouse, at the top of this bull market.

I think it’s 1.4M with a downpayment of 300k.

Thousands of couples in Toronto make an after-tax income of 90k. That is 7500/month. Assume they can put down 300k between their downpayment and the bank of mom. Now you have a mortgage of 1.1M. No problem! At 2.9% that’s 5100/month. Add 500$ of taxes, 150$ of hydro, 300$ for the car, 600$ for food, 250$ for stuff, 150$ for insurance, 200$ for repairs, 100$ for phones, 100$ for savings.

So I think this can go on for at least two more years. 15% price increase this year. Then 10% next year.

Then flat prices for years.

#85 millmech on 04.05.17 at 10:16 pm

millennial
Just sit back and relax, a house I am looking at in the fraser valley has already had a 15% price reduction in a day and it was dropped another 5% today. The seller is very motivated along with the realtor, but I will wait for at least another 15% price drop before I even think of purchasing(basically saved a good years salary by just being patient for about two weeks to a month).
Last year places like this were bidded up $50,000+,now crickets and longer days on market before offers,it is now a buyers market,stay strong!

#86 Capital Changes on 04.05.17 at 10:21 pm

Why all the consternation and fear over a GTA foreign buyer’s tax?

If they constitute a ‘negligible 5% of the market’ then the tax will have zero impact.

A foreign buyer’s tax targets a class of capital – not a race, religion, creed – so its not discriminatory.

Why would anyone listen to the self-interested unaccountable warnings of top developers and realtors stoking fear over the tax (e.g.the tax will lead to a recession – again, hard to do it foreign capital constitutes 5% of sales)?

If prices are set on the margin, as the US case showed – 8% of distressed buyers caused a 32% decline nationally – then why not try to protect your own citizens for the supposed 5% of marginal foreign buyers? Canada does not owe anyone who is not Canadian anything, least of all real estate.

Why not collect a tax from those seeking to commodify real estate like a penny stock and store their wealth, and then transfer those funds into supportive housing for the most vulnerable getting hurt in this RE disaster?

No one has yet to provide ONE solid reason as to why we should fear a foreign buyer’s tax.

Hong Kong, Singapore, Australia, Malaysia, China and so on certainly do not fear such taxes….because they restrict such foreign ownership themselves.

Besides, if we look at Vancouver, it was not the foreign buyers tax that apparently tipped the market down – it was the new Chinese capital controls which has severely restricted purchases around the world.

Check out the nice little graph showing sales really drying up in Vancouver when the new controls went in – not when the tax was implemented.

Besides, Hong Kong showed that a 15% foreign buyer tax just slowed the market down for 6 months while foreign capital got accustomed to it, and prices were re-ignited.

https://betterdwelling.com/city/vancouver/vancouvers-foreign-buyer-tax-didnt-stop-real-estate-sales-china-did/

Catalyst, not cause. — Garth

#87 Lee on 04.05.17 at 10:21 pm

#170 Leo,

The $170000 doesn’t include teaching but what is not on the list is the additional 25% each employee of government gets in health benefits and pension contributions. For that Judge, add $20000 for government contributions to his or her pension plus $10000 for benefits not including cash out of sick days. If you want to see what total full disclosure provincial government sunshine lists look like take a look at Albertas sunshine list. They include non-taxable pension and benefits in their disclosure. Ontario only includes taxable benefits which pension contributions and health benefits are not. Just a little slight of hand by the Ontario government, although Harris started it. You have to give Wynne some credit in that she has not indexed the list for inflation. The pension by the way is 70% of your best five years of income averaged. May be higher for judges. At $170000 he or she sounds like a Provincial Court Judge.

#88 Dylan J Althouse on 04.05.17 at 10:21 pm

#77 I’m stupid – CMHC is simply a default insurer. First National takes on the risk mitigated by the fact the borrower is paying a premium on top of the mortgage payments. Lenders love mortgage default insurance – loans like this happen all the time.
https://www.cmhc-schl.gc.ca/en/hoficlincl/moloin/mupr/mupr_002.cfm

#89 Post on 04.05.17 at 10:26 pm

Why mortgage rates could go up even faster than just with rate hikes.

http://www.cnbc.com/2017/04/05/mortgages-and-other-rates-could-go-up-even-faster-than-markets-thought.html

#90 Wait, What?! on 04.05.17 at 10:29 pm

I just got back from vacation from Ireland. After a few too many drinks at a local pub in Dublin I decided to get a cab home. Well my cab driver asked me where I was from, I told him Toronto. He was shocked. He then followed up by saying “Oh I heard your housing market is really good to invest in right now”, He listens to Iranian business news and it seems to be the in thing to do. He also mentioned anyone who has dirty money is laundering money here, apparently if you have over 2million in your account it doesn’t really take too much to get a citizenship here in Canada.
Now I was about 14 pints of black in but after a conversation like that you tend to not forget it.

#91 common sense on 04.05.17 at 10:41 pm

#23 AK

63% of a rate increase in June.

That is a long ways away and based on the FED’s record the past 8 years, I’ll take my chances.

As we both know a lot can happen before then….

#92 mike from mtl on 04.05.17 at 10:57 pm

#84 Pierre on 04.05.17 at 10:11 pm
Hi Garth,

Here is an idea for a futur blog: Let’s vote how much Toronto buyers will be willing to pay for a townhouse, at the top of this bull market.

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

Nah, probably slightly illegal to place bets using real money however I’d put good money against real mortgage rates. RE prices are total fiction and based on how good lunch was (official or otherwise) unless you’re the actual buyer.

-BoC not raise until minimum 2020 putting that out there.
-5yr not moving upwards in any significant way until 2020 (~0.5%).

As much as I’d this garbage to end an due proven wrong it’s got so much support and actual evidence that nothing will change in the near future.

#93 chrisgo on 04.05.17 at 11:03 pm

Noting is selling in Leslieville right now. A lot of listed homes are sitting. A lot more new listings as well. Not sure what the reason is. People have started lowering the ask prices and still aren’t getting offers. Scary.

#94 Ex-Cowtown on 04.05.17 at 11:13 pm

Totally off topic, but hey, like I care….

I just watched the Pepsi ad with Kendall Jenner that got blasted into oblivion. I liked it. I thought that it was, to paraphrase Pepsi, a message about unity, diversity, tolerance and the need to reach out to people.

I totally get why the looney left and the Social Justice Warriors went ballistic. Their agenda promotes hate, divisiveness, disunity, and intolerance. The last thing they want to do is “teach the world to sing in perfect harmony”.

If the views espoused in Pepsi’s ad ever got any traction, all the SJW’s would be out of a job.

As to Kendall Jenner, hey, how can you diss a woman who talks cars with Jay Leno and drives a ’57 ‘Vette? She’s cool in my book.

#95 dr. talc on 04.05.17 at 11:20 pm

#79 Strange on 04.05.17 at 10:04 pm
Canada is not a friendly country for young families with such expensive housing. They are the ones who need housing the most. Who’s side are the various levels of government in Canada on?

corporations, banks, ruling elites; not citizens
decades ago the Marxists decided to stop using the word ‘revolution’
they agreed to replace it with the word ‘democracy’

#96 pieces of crap on 04.05.17 at 11:26 pm

#93 chrisgo on 04.05.17 at 11:03 pm
i don’t see lots of listings? and what is listed are overpriced pieces of crap that don’t deserve to sell.

#97 Rexx Rock on 04.05.17 at 11:31 pm

Rent and real estate hyperinflation in Canada.My friend saw on the news where a single father working a low income job had to put his son in foster care until he found proper affordable housing.Places like Victoria and Vancouver is not a place to be if your a working poor stiff.Candians have high standards and will sacrifice to live good.Coffin condos will be the future and famillies will have to get used to it.

#98 Pete from St. cesaire on 04.05.17 at 11:31 pm

while canadians wail on and complain endlessly about the profits of canadian banks, they are in fact secretly very proud of them and their stability. When things fell apart a few years ago during the financial crisis they stood apart from the whole debacle.
———————————————-
Incorrect. Our banks were bailed out too (in the form of a weaselly-worded irrevocable promise of recapitalisation by the govt, you know; recapitalisation if necessary but not necessarily recapitalisation) , but it was a ‘matter of national security’ and could not be reported in the media.

#99 Rentin on 04.05.17 at 11:33 pm

I see a demand side story, but missed the supply side. To be clear my definition of supply is people who need to sell.

If supply vanishes, much like it did in Vancouver, prices stick.

This will need a good catalyst like empty condo tax or 250 DoM listing times to get the ball rolling.

But in the meantime I will enjoy the excellent show with colourful commentary from GT.

Garth – You should do a piece on equities market vs realestate 2003 – 2016. You would have to be humble on missing the timing of your call by 8 years; remember the crashing in Kelowna article?? You will also be wrong on the correction duration.

Nothing wrong with being wrong on such low probability guesses. Just have to point it out.

However, you are right on your investment strategy and not buying a house when it is so cheap to rent it.

As far as selling your house today; if you took a 30% cut on your ask today, your house would likely sell immediately, and assuming the person bought pre 2012, they would still make out like bandits, especially if the return is calculated on the down payment.

Most people will not do this, and chase the market down losing out.

#100 paulo on 04.05.17 at 11:35 pm

Seems the party is coming to a end.the sheeple are looking at the exit sign.
funny how history repeats,market sentiment swings quickly, hopefully you don’t get hit by the door as you run.

#101 heartsutra on 04.06.17 at 12:04 am

Because we have a junior leader of this country:

https://www.youtube.com/watch?v=_TpZ2WF_eUA
https://www.youtube.com/watch?v=jW9GiWeQEgg
https://www.youtube.com/watch?v=LgvX99TJ14o

#102 Sir James on 04.06.17 at 12:30 am

#59 Tulip Prices
No, they are called weed ETFs now.

#103 Bottoms_Up on 04.06.17 at 12:32 am

How does a bank approve a million dollar mortgage on a house they appraised at $500,000 only a few years ago? No wonder the banks are crying wolf, they are as confused as we are!!

#104 Bottoms_Up on 04.06.17 at 12:35 am

#93 chrisgo on 04.05.17 at 11:03 pm
———————–
Is the lack of offers scary, or the Leslieville prices scary?

#105 Bottoms_Up on 04.06.17 at 12:46 am

#87 Lee on 04.05.17 at 10:21 pm
—————————
Sunshine list was started when $100,000 was a huge salary. Today, its a good salary but not a huge salary. Try raising three kids on $100,000 in a major city, good luck to you.

#106 NoName on 04.06.17 at 12:53 am

Can remember what year was, 2009 or 2010, we just finished tour of Cape Canaveral, buss dropped us off, and one and only thing left to do was to exit thru gift shop without braking the bank. As usual will power feiled us and we ended up rummaging thru gift shop, wife was kind of undecided what else to buy, holding few t-shirts for kids in her hands, older child was holding 1/2 dozen space icecreams and telling to younger one to grab some more, younger child was wanddering around with some over priced toy in his hand, and i was secretly hoping what by the time we reach counter i can buy an american and russian version of space pen, so an astronaut can use each to sigh what ever he was signing in a corner. So i pointed that to my wife and told her you that guy over there, honey he walked on a moon, first thing she asked me where do you see an astronaut? Right then and there i knew, internet has ruined her. what brings me to the piont,

Hey BS can you out on a limp one more time and tell us was there a moon landing or not?
Also we can revisit astronaut/moon landing topic in august if you want to.

#107 For those about to flop... on 04.06.17 at 1:14 am

There are still a lot of Crealievers in Vancouver.

This thing is going to take a while to play out.

Tonnes of people are not in a rush to crystallize multi million dollar gains.

Why would some of the latecomers be in a rush to crystallize a loss…

M42BC

#108 };-) aka Devil's Advocate on 04.06.17 at 1:24 am

Feels a lot like 2007.

Didn’t like it then and not enjoying this market at all.

Lot’s of fresh agents enjoying it, stoking it not knowing it’s short lived and that “all boats float at high tide”.

Saving grace is it will end soon,,, not soon enough.

Not looking for anyone to be terribly hurt by the impending change, just a simple return to sanity.

As Ben Bernanki said of 2007 “irrational exuberance”.

#109 The Gouch on 04.06.17 at 1:28 am

People have been prognosticating the end of the TO RE market for years. And they always have anecdotal stories to tell highlighting possible cracks in the foundation. What absolute nonsense. The sales just keep piling up as the average price climbs. People never learn.

#110 Happy Housing Crash Everyone! on 04.06.17 at 1:56 am

Lot’s of worried out of work realtors on here. Your day of reckoning has arived. Many of you will never work in the industry again. Many if you face hardships. Happy housing crash everyone! :-)

#111 Two-thirds on 04.06.17 at 2:00 am

In response to #90 Wait, What?!

We had a similar experience last week while vacationing in Texas. Once the cabbie learned we are Canadian, he mentioned something like “real estate there is a great investment, especially for American investors due to the exchange rate differential”.

Is this a canary in the coal mine moment? It was surreal to hear someone so far removed from our RE market make statements supporting the (other) HAM theory.

Anecdotally, for sure, but true story and a first personal exposure to the reach of our bubble and its international allure.

This cannot end well.

—————–

I just got back from vacation from Ireland. After a few too many drinks at a local pub in Dublin I decided to get a cab home. Well my cab driver asked me where I was from, I told him Toronto. He was shocked. He then followed up by saying “Oh I heard your housing market is really good to invest in right now”, He listens to Iranian business news and it seems to be the in thing to do.

#112 Travis Bickle on 04.06.17 at 2:19 am

I watched The Big Short this weekend for the second time. I really like that movie, especially its aspect on real estate speculations. And it is based on real, true events!
Greed drives humans to do crazy things. Herd-mentallity and peer pressure do not help either…
Because of these factors, Van/Tor real estate has reached levels of collective delusions. Note that delusions are inherently resilient and, consequently, die hard but they do die nevertheless.

I’ll finish by quoting a 19th century book by Charles MacKay (Extraordinary Popular Delusions and the Madness of Crowds):
“We find that whole communities suddenly fix their minds upon one object, and go mad in its pursuit; that millions of people become simultaneously impressed with one delusion, and run after it, till their attention is caught by some new folly more captivating than the first.”

#113 diharv on 04.06.17 at 2:21 am

Oh no , the greedy sellers are getting dismayed and disappointed . The govt needs to step in and help them ! Man it looks like we are heading for painful period of regret. Hormonal buyers may come to regret they bought at the peak and the greedy sellers will regret they did not sell !

#114 Storm Clouds on 04.06.17 at 2:33 am

From reading today’s Blog and Comments, it looks like 416 RE prices are going to cool. There goes the last and large rapid growth sector of our GDP.

Morneau in NYC this past week pleading the case that a BAT on Canada would hurt America as well. Obviously, that did not do the trick. Today, Trudeau enlists Brian Mulroney to plead the NAFTA case to Trump.

You may have nailed it Garth, when 416 RE came back to Earth. Add in a BAT, and none of this weeks news can lead to good.

#115 Stock Picker on 04.06.17 at 2:48 am

If yer buddy with the 2.25 mill contract had an experienced agent writing a no subject , all cash offer he should hold an unasssailable contract and could easily sue for specific performance for the full amount. As a pup in legal studies practising as a real estate agent jobette I would have also declared the enormous deposit as liquidated damages to ensure my full commission regardless of the outcome of litigation…..oh….and protect the best interests of my client….of course.

#116 DoomandGloomer on 04.06.17 at 6:44 am

#36 Timely

“I was once asked by, a somewhat famous stock broker. “You know what my clients get most made at me about?. The additional money they could have made after I’d advised them to sell!”
——————————————————————-

Old man Moishey was walking down the street, all slumped over and depressed looking. His good friend Bernie, who happened to be walking along the same street, saw him and asked: “Moishey – so, why the long face?”.
Moishey replied: “Well, I was wearing my ratty old overcoat, when a bum came up to me and asked ‘how much for the coat?”. I say ‘5 bucks’. So the schmuck buys it off me.”
Bernie says: “That’s great! You got five bucks for that old shmatah? So what are you so miserable about?”

Says Moishey: “I coulda got ten!”.

#117 A Reply to #87 Lee on 04.06.17 at 6:46 am

… sleight (not slight) of hand…. D’oh!

#118 75 Charts for 2017 on 04.06.17 at 6:50 am

“For the third year in a row Maclean’s asked economists, investors, analysts and financial commentators to submit what they think will be an important chart Canadians should watch in the year ahead—and they delivered, in spades. From the state of Canada’s housing market and the energy sector to government finances and how Canada will fare under Donald Trump, these 75 charts, accompanied by explanations from each contributor, will help prepare Canadians for understanding the economy in the year ahead. Here they are, in no particular order. Enjoy!”

http://www.macleans.ca/economy/economicanalysis/75-charts-every-canadian-should-watch-in-2017/

#119 Victor V on 04.06.17 at 7:38 am

https://www.thestar.com/news/canada/2017/04/06/ottawa-seeks-high-level-meeting-to-discuss-torontos-soaring-house-prices.html

OTTAWA—Concerned about ballooning house prices in Toronto, federal Finance Minister Bill Morneau wants a high-level meeting with Ontario Finance Minister Charles Sousa and Toronto Mayor John Tory in the coming weeks to look at possible remedies to ease the costs of home ownership, the Star has learned.

Morneau wrote Sousa and Tory separately Wednesday asking to meet soon to “consider how we can collectively make progress to ensure that housing in the GTA is both affordable and accessible for the long term.

“I am concerned that dramatic house price increases will have long-term implications for housing affordability and housing market stability,” Morneau wrote in his letters, which were obtained by the Star.

“I believe we must take a closer look at these evolving market conditions and take stock of (the) implications for our largest urban area,” the finance minister said.

#120 FLHTK on 04.06.17 at 7:53 am

I think these high prices will stay for awhile I think that these 2 couples had cold feet thats all! I also agree with another comment once the crash happens a lot of agents will be out of a job forever

#121 crowdedelevatorfartz on 04.06.17 at 8:14 am

Would the last gas station in downtown Vancouver please stay open?

Chevron station sells to a condo developer for $72,000,000.00. Only one gas station left in the downtown core. For how much longer……?

https://www.google.ca/url?url=https://www.biv.com/article/2017/4/anthem-properties-buys-chevron-gas-station-west-ge/&rct=j&frm=1&q=&esrc=s&sa=U&ved=0ahUKEwjTzaSK54_TAhVX8GMKHas2BJMQqQIIFzAA&usg=AFQjCNElHrez19jGz0TjcqvhQJ0wQmm3Jw

#122 me again on 04.06.17 at 8:17 am

#119 Victor V on 04.06.17 at 7:38 am
https://www.thestar.com/news/canada/2017/04/06/ottawa-seeks-high-level-meeting-to-discuss-torontos-soaring-house-prices.html

OTTAWA—Concerned about ballooning house prices in Toronto, federal Finance Minister Bill Morneau wants a high-level meeting with Ontario Finance Minister Charles Sousa and Toronto Mayor John Tory in the coming weeks to look at possible remedies to ease the costs of home ownership, the Star has learned.

Morneau wrote Sousa and Tory separately Wednesday asking to meet soon to “consider how we can collectively make progress to ensure that housing in the GTA is both affordable and accessible for the long term.

“I am concerned that dramatic house price increases will have long-term implications for housing affordability and housing market stability,” Morneau wrote in his letters, which were obtained by the Star.

“I believe we must take a closer look at these evolving market conditions and take stock of (the) implications for our largest urban area,” the finance minister said.
—-

Because of the Ontario Land Transfer Tax, and the Miller Tax and HST on new homes the upgrade market has been killed in the GTA (less supply)
average detached is 1.5 million, that’s $26,475 to the province and $26,475 to the city of Toronto. Add HST if it’s new or total rebuild, that’s $195,000.more.

Grand total = $247,950, in government taxes,and that’s the average price of a detached home. A quarter million to governments who say they want to make houses affordable.
Do you know anyone who’s paid the HST on a new home? Of course not, no one does,
because the buyers do not have the money so the builders pay it: that’s called ‘work around’ That’s right, millionaire politicians pass laws but cant conceive that people do not have the money to pay. So the HST is amortized into the mortgage and buyers pay the tax (double the amount of $195,000. read an amortization schedule, it will be close to 400k over the 25 years) That’s the same as they just did with Hydro. Insanity.
Add to that the green belt. The UN has decided that millennials belong in condos the size of shoe boxes and ducks and frogs can roam happily in a Province the size of Europe.
Because of the UN and green hysteria, they have overbuilt condos (there was no demand) and under built subdivisions- many families want a detached home with a yard for the kids, dog and BBQ.

#123 Julia on 04.06.17 at 8:20 am

2 questions:
1. Is the slowdown happening more in the suburbs/outskirts? My observation in the city are houses around me selling in days and often with bully offers.
2. Real estate is a cash cow for the Government from land transfer taxes. Doesn’t that temper their need to do something?

#124 Unfortunate Downtowner on 04.06.17 at 8:31 am

Where’s the 20,000 number for unoccupied condos coming from?

The media seems fixated on the 65,000 unoccupied units (all types) for Toronto, or if Betterdwelling.com is to be believed… 99,000 irregularly occupied units.

#125 Kool Aid on 04.06.17 at 8:48 am

Real estate supply side fundamentals are turning in the Greater Toronto Area, with more supply comes greater choice and to a degree an increase in price flexibility.

A month of data does not make a trend, seasonally supply increases are to be expected in the spring.

The real turning point will be when the sales to listing ratio’s dip, supply balance fully favours sellers at this point.

As we await “New” Provincial housing rules set to promote “affordability” a can not express enough that the ultra low rate environment, loose lending practices, and government (greenbelt/places to grow) policies that are squarely responsible for the Manhattanization of the GTA.

Will the GTA real estate market CRASH, estimates for a correction of 10% to 40% are common.

Can the real estate market land softly or continue a growth trajectory upwards? It seems remote, though when comparing our world class city to others globally, the argument for Toronto being undervalued is a common one.

Provincial & Federal Governments have become dependant on the RE wealth creation apparatus, regulation to reverse course will be interesting.

Sellers market, good time to sell.

Thanks for all the good you do Garth.

#126 KLNR on 04.06.17 at 9:06 am

folks are getting greedy in my etobicoke/sunnylea hood.
dated old bungalow listed at 998k couple weeks ago just raised there price to 1,398000 today.

#127 Tater on 04.06.17 at 9:06 am

#52 Crash is coming on 04.05.17 at 8:24 pm
Yes a crash is closer….so what…a 50% decline will bring prices down to 2014 or 2015 prices…this will only affect 1 to 2% of sales in the GTA since the vast majority bought before this.

You all missed out….admit it!
——————————————————————–
Not sure you understand the math. The house price index for March in Toronto will be around 240, 50% of that is 120 which is where the index was in Dec 2009.

#128 crowdedelevatorfartz on 04.06.17 at 9:07 am

Vancouver buyers haave been suffering through the housing price insanity for over 5-10 years.
Then it becomes huge news when it finally hits Toronto after what?
18 months of house price stupidity?
…and the politicians are still……”having meetings later this month to discuss their options”……..

More spin to stroke the masses.
People.
They dont give a $h!t about the little guy until about 3 months before the next election….
Dont know when that hits Ontario but we get ours out here in BC in just over 30 days…….

Canadian politics.
What a joke.

#129 Samantha on 04.06.17 at 9:22 am

Very well put Jim, I agree with you. The 30% up in GTA can be quickly reversed with 23% downward movement, and all the bears that has been wrong for 5-10 years will pat themselves on the back and declare victory, but…the prices will be where they were last year – still very much in a bubble territory and out of reach for the average Canadian. Talking about Pyrrhic Victory…

http://www.dictionary.com/browse/pyrrhic-victory

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

#69 traderJim on 04.05.17 at 9:11 pm

Since houses are now seen as investments by a lot of fools, prices will probably act like stocks.

The blow-off top MIGHT be here, and people will stop paying absurd prices (perhaps only because they can’t) so that the folks rushing to list right this minute to get $2m for their $800k house will be out of luck.

But all those folks who missed out buying the $1m place that jumped to $1.5m almost overnight will be sitting on the bid at $1.1m , maybe $1.2m, feeling great when someone dumps a crackshack on them.

Only after the ‘ones who missed out’ are cleaned out of the market will the real crash happen.

And with continued liquidity flooding the world, you might even see a bounce from this ‘correction’.

I would bet on the latter scenario actually.

Only thing that will really pop this bubble will be higher rates, and making banks responsible for their credit losses.

All this Chinese dudes tax and vacancy tax stuff is pandering to the masses who can’t think past their nose.

#130 traderJim on 04.06.17 at 9:23 am

#122 me again

Exactly.

And the usual big government approach to ‘make something affordable’ is to subsidize the buyers with other people’s money, lol.

Idiots in the USA still can’t understand that costs of University rose dramatically and perfectly in line with increased loans and grants to students. Ummm duh!

I’ll wait for someone to try and argue costs went up first and subsidies later, and then you’ll know why governments keep up these idiotic policies: there are still some people who think they make sense.

We’re all doomed I tell ya. Might as well enjoy the ride off the cliff!

#131 Samantha on 04.06.17 at 9:25 am

*Correction in my post above – …all the bears that have been wrong…

#132 pBrasseur on 04.06.17 at 9:26 am

The only thing that can provide affordable housing in Canada (or anywhere) is a truly free market.

By free I mean free of government intervention (such as CMHC) and well-regulated to prevent abuses and foreign (and local) money laundering.

Isn’t it what Capitalism is supposed to be: freedom within the rule of law? It’s supposed to be simple.

By this measure Canada is certainly the one of most heavily tempered with RE market in the world, as a consequence you should expect nothing short of an economic and social disaster that will unfold for years to come.

Got that Ryan?

#133 soost on 04.06.17 at 9:44 am

Its astonishing the way politicians think they can design a perfect solution or a “soft landing”. They don’t want to lose a single vote in the process. Everyone should be entitled to their speculative windfall and poor retirement planning.

It is preventing them from doing what normatively they know to be the right thing.

#134 pBrasseur on 04.06.17 at 9:54 am

No wonder politicians and the central banks are worried.

Economically nothing is bigger and more wide spread than the RE market in Canada, not even remotely close.

When this baby bursts it’s going to wipe out hundreds of billions from households balance sheets. The middle class is going to get partially wiped out just like it was in the US and the consequences are going to reach everybody everywhere in the public or private sector.

There is no way out of this except to grow enough viable sectors of the economy to offset the RE debacle. What are the chances of that that? Slim to none I believe, since the RE bubble is also synonym with mal-investment.

The only somewhat realistic hope we can cling to is that it all unfolds slowly. Getting pooper slowly, that is Canada’s best hope for the future for a good long while.

#135 Vit on 04.06.17 at 9:56 am

I think lots of BS here . Some people using different names to put bs about lowering prices in Toronto. Its simply not true because to attract multiple bidders and sell over asking price has to be below market value to begin with. We are in a strongest seasonal period period and ones investors learn that April changes all about nothing we going to have a nice price spike in may .

#136 Vit on 04.06.17 at 10:43 am

Lust year Ontario government made 2.2 billion $ just in lend transfer tax. Why would the government kill goose with golden eggs and we still have a 2 years before election .
Inflow of foreign money is good for economy builders build more, employment goes up ,people downsizing or moving and making huge $$$ . But some missed the boat and they cry and are very negative about the world …

Lowering house prices will ultimately increase listings and sales. There will be no diminution in land transfer tax collected. Figure it out. — Garth

#137 Welcome to Slurrey on 04.06.17 at 11:21 am

I’ve been watching listings for a while. I notice that when a house has been taken off the market (de listed but not sold) ,once it is relisted, it will show as a new listing (ie: listed for 2 days, ignoring the fact that it was previously listed for greater than 90) . Any way to figure out how many times a property has been de listed and how many actual days its been on the market (other than following the listing manually) ?

#138 RW_Z on 04.06.17 at 11:40 am

At this point we can guarantee that “the correction” will happen, so who wants to start a betting pool with me? The winner will get the prize money from the pool and a framed Garth blog post from the day that newspapers first mention a certain combination of confirmatory words in the headline. Also you can use the money to offset a small part of the enormously inflated house price you’ll still be paying after the correction.

#139 Doug, back in London on 04.06.17 at 11:49 am

@TCContrarian, post #19:
Here we go again, talking about gold. As I said many, many, many, many , many times before here, the time to buy gold was in 1999, when it was under $300/ounce. Fast forward to the present, don’t even think about gold unless it gets down to $700/ounce.

@Wait, What?!, post #90:
GTA housing market is really good to invest in right now? After experiencing a bubble (that couldn’t happen here, we’re different) the Dublin market corrected and is back to more normal levels and is thus a better investment than in the GTA. That’s why CAP REIT scooped up a property there 3 to 4 years ago.

#140 quals on 04.06.17 at 11:50 am

housing in toronto is probably undervalued by 20% at current levels. demand is overwhelming.

There are six million people in the GTA and 12,077 property sales last month, with 17,051 new listings. Not exactly overwhelming. — Garth

#141 IHCTD9 on 04.06.17 at 11:58 am

Of course this bubble will blow, the Y/Y increases are stupid and indicate heavy participation by same. The most recent, and the most foolish of them all have already unwittingly sold their souls to the bank – but they’ll need that blanket of fog to lift before they can see across the street and down the road.

The real trouble that will affect every working Canadian is the continuing lack of incoming government revenue – and the contraction of the GTA over exuberance – even a soft one – will be little more than just one more event to punish government revenues even further down. Taxation will come to the rescue.

Plans for this summer include the construction of a high quality pellet mill. A machine like this is a door opener. I purchased and restored a very old hammer mill this past February. I already own several pcs of heavy equipment to move heavy stuff around. Confirmation has been established that a single optional fuel has demonstrated ability to cover all my energy needs, including transportation fuel. 2018 may be a very different year at IHCTD9 head offices.

Voting and hoping for the best is a long time to wait for next to nothing in the results dept. Better to just discontinue any further cash injections into the stupidity. You can get on it starting immediately, and results are guaranteed. Best of all, you get paid very well for all your efforts with every hook you successfully pry out of your back, and every dependency you eliminate :)

#142 quals on 04.06.17 at 12:02 pm

There are six million people in the GTA and 12,077 property sales last month, with 17,051 new listings. Not exactly overwhelming. — Garth

Hundreds of viewings for single properties and a 33% price increase in 1 year just scream balanced market.

Where did I say ‘balanced’? — Garth

#143 Vit on 04.06.17 at 12:02 pm

#135 If realestate price goes lover people just list less remember 2008-2010 in Toronto and now in Vancouver http://news.nationalpost.com/news/canada/huge-tax-windfall-highlights-b-c-economys-dangerous-dependence-on-real-estate
People just going to wait for better time and not list , spatially new buyers . In Canada you can give your home keys to the bank but mortgage stays with you compare to US were you can walk away from your mortgage and live to the bank to figure out what to do with it.
So government understand all this and not going to make any drastic changes .

#144 bill on 04.06.17 at 12:19 pm

#140 IHCTD9 on 04.06.17 at 11:58 am

”a very old hammer mill ”
how big and how old I wonder??
runs on steam?
I would love to see a picture if thats the case…
a couple of my favourite ‘steam videos’
https://www.youtube.com/watch?v=KhlJp1VZMB8
https://www.youtube.com/watch?v=1Z8MIXXDPls

#145 Eks dee Sipal on 04.06.17 at 12:19 pm

Vit: “So government understand all this and not going to make any drastic changes .”

OMG, Vit. OMG. Delusional. Gov’t has lost control. To employ a little of Garth’s restraint: this will be a Mammoth of a Correction. Every day that goes by, I am more and more right: 50% price correction overnight (relatively speaking), followed by violent reversion to the mean, some parts of GTA will experience up to 80% price correction; that is, back to a normal 3-4 times annual household income. How do all of you RE shills not understand this? Do you think I’m wrong? Why?

#146 Leo Trollstoy on 04.06.17 at 12:20 pm

I also agree with another comment once the crash happens a lot of agents will be out of a job forever

Toronto has almost 45,000 licensed real estate agents. There were 12,077 sales last month, and commissions are typically split between two agents and two brokers. There are easier ways to get rich. — Garth

#147 cto on 04.06.17 at 12:21 pm

To “Vit”

You may be right that in the short term, next 6 months prices may spike due to investor greed, (getting in while the gettings good!). Money could be made there.

But,…

Are you actually trying to say that the economic fundamentals in Toronto real estate are good???

Just askin…

#148 bill on 04.06.17 at 12:23 pm

this one is pretty neat too…
https://www.youtube.com/watch?v=y8qryuiom6g

#149 Eks dee Sipal on 04.06.17 at 12:31 pm

Rampant mortgage fraud to be found under every stone turned. Already, monthly expenses cannot be paid (167% debt loads? Are you kidding me?) The excess is put on Lines of Credit, another bubble that rivals the housing bubble itself! Most people think they can just declare bankruptcy. How many times a day do you see/hear those Loan Consolidation ads in the media? I place the blame squarely on the shoulders of the banking cartel. The victims are innocent families trying to make it through another month.

#150 Noel on 04.06.17 at 12:32 pm

When I said detached homes in Toronto would be worth closer to $2mn than $1mn a couple years ago you called me a realtor shill. Well, I was right and you were wrong. Nah nah nah nah nahhhhh.

#151 quals on 04.06.17 at 12:44 pm

to #144

Eks dee Sipal: “How do all of you RE shills not understand this? Do you think I’m wrong? Why?”

Because there is no correction. Every month the prices go up and every month you are wrong again.

It will take a major negative market/political event for a “50% price correction overnight”

that is some tinfoil hat kinda stuff

#152 Ole Doberman on 04.06.17 at 12:46 pm

it will be interesting to see if TO becomes like Calgary after this – the rental capital of Canada.

Speculators caught flipping, when it turns down they’ll try to rent it out – only problem is it’s what everyone else was doing, then a flood of rentals hits the market.

#153 Vit on 04.06.17 at 12:51 pm

#136 ask a realtor friend to give you log in info to MLS listings than you will see all history .

#154 Ole Doberman on 04.06.17 at 1:17 pm

http://www.bnn.ca/rbc-ceo-sounds-the-alarm-on-housing-urges-governments-to-act-reasonably-quickly-1.716943

Just find it hilarious that banks are sounding the alarm on housing, when it’s them that have been lending the money. Then offering the reverse mortgage to take the house back – crazy sheet!

#155 Julia on 04.06.17 at 1:23 pm

#148 Eks dee Sipal

Really? See that’s part of the problem: not taking ownership for their own decisions and blaming others. Victims of banks lending too much, victims of banks declining their mortgage application.
Families are not victims, they made their own choices.

#156 triplenet on 04.06.17 at 1:24 pm

#77
How is that possible that a commercial building is cmhc insured?
If the cap rate was right I thought why not.

Commercial building? – You said apartment.
You don’t select a cap rate. It selects you.

#157 For those about to flop... on 04.06.17 at 1:27 pm

Hey Broadway,wanna help me out by telling me what happened to the guys at 5830 Alma St?

Are they ordering the Surf and Turf ,or just a glass of water to help ease down the Metamucil…

M42BC

#158 Cap Gain Exemption on 04.06.17 at 1:31 pm

Govt should introduce a one-time capital gains exemption that would allow investors to sell an investment property and shelter all gains and principal in a TFSA or RRSP. This should bring more housing to market and also help lessen the OAS/CPP deficiency for up coming retirees. Rules could be placed where none of the principal or gain amount can be withdrawn until age 65, or a large with-holding tax of 45% is taken.

I can see this used for stock investors as well. Wonder if this occurred, if the markets would see a gentle easing or large correction based on the selling of investments.

#159 Penny Henny on 04.06.17 at 1:41 pm

#8 Penny Henny on 04.05.17 at 6:00 pm
Penny Henny here reporting from Etobicoke. As you may or may not know my house is hitting the market in less than 3 weeks and I have been watching the recent sales with great interest. What I think has been happening is a softening in sale price, now this is not a precise science as these are 60 year old bungalows and every one is different.
I will see what one sale goes for tonight and report back tomorrow. Listed at $948 and I expect $1,195 to $1,250.
Tomorrow we’ll know.\
\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\
Update. Sold for $1.1M

Prices seem to be softening a bit.

Although if you asked me last December I wouldn’t have pegged it at more than $950.

#160 Craig on 04.06.17 at 1:46 pm

Were do you get those images.

#161 For those about to flop... on 04.06.17 at 1:57 pm

Pink Pollen falling in North Vancouver.

Since November these guys have lowered their price at least three times.

The latest effort to induce a sale was to remove it ,take another 100k off and relist it all shiny and new.

The surprising thing about this one and a few others on the books is that they are in one of only a few of the city’s that make up Greater Vancouver still in positive territory year over year.

North Vancouver and West Vancouver might as well be on different planets at the moment such is the contrast as to what is going on in the neighbouring cities.

When coming home from work this time last year the television stations ran nightly stories about how hot the market was ,and yet West Vancouver is down 40% yoy and now all of a sudden they are interested in how soft drink companies reach their target audience…

M42BC

955 Forest Hills Drive, North Vancouver

Now asking 1.79m after asking 1.89 for a while.

Nov 7:$2,199,000
Feb 9: $1,999,000
Change: – 200000.00 -9%

https://www.zolo.ca/index.php?sarea=955%20Forest%20Hills%20Drive,%20North%20Vancouver&filter=1

https://evaluebc.bcassessment.ca/Property.aspx?_oa=QTAwMDAyODRCUQ==

#162 Vit on 04.06.17 at 2:13 pm

We are doing not to bead but make your own conclusions
http://www.imf.org/external/research/housing/

#163 Tudval on 04.06.17 at 2:16 pm

I see the media, bank ‘analysts’ and everybody else is going along with the LIE that prices in Toronto went up 33% in the last year. Perhaps the lie is serving their agenda to ask for intervention. There are MANY areas in Toronto where you can find houses/apartments for maybe 10% more than last year. Now maybe you think 10% rise is too high, fine, but by their own account they now think a 15% would be warranted by fundamental growth in the economy.. whereas 4 years ago they thought housing is overpriced by… you guessed it, 15%.. seems to be a favorite number (Fibonacci or shoe size?). WHO ARE these so called analysts getting paid to be wrong year after year and asking for government intervention in the markets?

#164 Blacksheep on 04.06.17 at 2:21 pm

NoName # 106,

“Can remember what year was, 2009 or 2010, we just finished tour of Cape Canaveral, buss dropped us off, and one and only thing left to do was to exit thru gift shop without braking the bank. As usual will power feiled us and we ended up rummaging thru gift shop, wife was kind of undecided what else to buy, holding few t-shirts for kids in her hands, older child was holding 1/2 dozen space icecreams and telling to younger one to grab some more, younger child was wanddering around with some over priced toy in his hand, and i was secretly hoping what by the time we reach counter i can buy an american and russian version of space pen, so an astronaut can use each to sigh what ever he was signing in a corner. So i pointed that to my wife and told her you that guy over there, honey he walked on a moon, first thing she asked me where do you see an astronaut?

Right then and there i knew, internet has ruined her. what brings me to the piont,

Hey BS can you out on a limp one more time and tell us was there a moon landing or not?

Also we can revisit astronaut/moon landing topic in august if you want to.”
————————————————-
Wow, I’m flattered….that’s a lot of typing, all for the sole purpose of baiting me.

Trouble is, public shaming only works when the party being shamed, places a high value on the opinion of his/her peers or those attempting said shaming.

I don’t, so it doesn’t.

This reminds of the George Carlin quote:

“Think of how stupid the average person is, and realize half of them are stupider than that.”

#165 Mike in Edm on 04.06.17 at 2:48 pm

What I don’t understand is how are people in Toronto (and even Vancouver) borrowing all this money to buy multi million dollar homes? I thought if anything, the recent changes by the government to force everyone to meet the BOC’s standard 4.64% (or whatever it is) rate would be making it tougher, or has that requirement not kicked in yet? But still, how does a couple making a combined $150k/yr get approved for like an $800k mortgage?

#166 Ronaldo on 04.06.17 at 2:49 pm

#153 Ole Doberman on 04.06.17 at 1:17 pm

http://www.bnn.ca/rbc-ceo-sounds-the-alarm-on-housing-urges-governments-to-act-reasonably-quickly-1.716943

Just find it hilarious that banks are sounding the alarm on housing, when it’s them that have been lending the money. Then offering the reverse mortgage to take the house back – crazy sheet!
—————————————————————
They were doing the same thing back in 2010 at the same time offering rates of 2.99% remember. Gotta keep that market share you know. So when the crap hits the fan they can say to the gov ‘we warned you’. Hilarious indeed. They are very aware now that the risk to themselves is major particularly with the helocs and other loans that are not insured. Expect bank shares to take quite a hit in the months to come. No rush to get into these markets.

#167 Victor V on 04.06.17 at 2:57 pm

David Rosenberg: Make no mistake, the Toronto real estate market is in a bubble of historic proportions

http://www.financialpost.com/m/wp/news/blog.html?b=business.financialpost.com/investing/david-rosenberg-make-no-mistake-the-toronto-real-estate-is-in-a-bubble-of-historic-proportions&pubdate=2017-04-06

#168 jess on 04.06.17 at 3:09 pm

Property News | Wed Apr 5, 2017 | 1:56pm BST
UK aims for more transparency with foreign owners’ property register
Foreign firms with UK property could be forced to reveal real owners
Government plans public register of ‘beneficial owners’ of firms in move to combat money laundering and corruption
=====================
Rep. Lloyd Doggett Introduces Bills To Curb Offshore Tax Avoidance, End Tax Gimmicks

WASHINGTON – Today, Representative Lloyd Doggett (D-TX) introduced the Corporate EXIT Fairness Act and the Stop Tax Haven Abuse Act along with co-sponsor Sheldon Whitehouse (D-RI). These bills would close a number of loopholes that let corporations and wealthy individuals book income to offshore tax havens to avoid taxes. The Joint Committee on Taxation calculates that this legislation would save taxpayers over $250 billion.

“Taxpayers and small businesses shouldn’t have to pick up the tab for companies that hide their income in offshore destinations. When companies rely on our workforce, our infrastructure, and our robust markets to earn their profits, they shouldn’t then play games and use gimmicks to avoid their taxes,” said Allie Robins, U.S. PIRG Tax and Budget Associate.
http://www.commondreams.org/newswire/2017/04/05/rep-lloyd-doggett-introduces-bills-curb-offshore-tax-avoidance-end-tax-gimmicks

===========
so much for swiss transparency !
British and Dutch authorities have seized more than €6m (£5.1m) worth of assets – including luxury cars, a speedboat and properties – from an Anglo-Dutch couple accused of running a multinational tax avoidance scheme.
(Bentley, a Jaguar and a BMW, as well as a speedboat, cash, computers and two villas in the Netherlands.)

…”The Dutch authorities last week revealed they had been given details of more than 55,000 suspect Credit Suisse accounts by a whistleblower. Dozens of Dutch taxpayers are under investigation, and coordinated raids have been carried out across Europe and Australia.

High-ranking bank employees in Britain, Germany and Australia are under investigation. Dutch prosecutors said they acted after receiving a tip-off on assets hidden within “offshore accounts and policies”. Credit Suisse offices in London, Paris and Amsterdam have been searched by local authorities…”

https://www.theguardian.com/politics/2017/apr/05/speedboat-among-assets-seized-from-anglo-dutch-couple-in-tax-investigation

#169 me again on 04.06.17 at 3:26 pm

millionaire politicians pass laws but cant conceive that people do not have the money to pay. So the HST is amortized into the mortgage and buyers pay the tax (double the amount of $195,000. read an amortization schedule, it will be close to 400k over the 25 years)

another aspect of the above is that the hst, in becoming part of purchase price, is taxed again with the land transfer taxes, and into perpetuity by municipal assessments. So it’s tax on a tax that has been amortized.
HST on a candy bar is one thing, but on 1.5 million dollar average homes?

#170 Uri Kogan on 04.06.17 at 3:29 pm

Garth, thanks for posting my comment re lack of bids on offer presentation date.

#171 jess on 04.06.17 at 3:32 pm

Regarding high increases to rent in t.o. condos …Do you think the owners had to double the rent to cover their financing? If so, good luck with that. I would be opposed to any subsidy going into those greater fools. Let the market (vultures) step in.

#172 AGuyInVancouver on 04.06.17 at 3:41 pm

Nope. Straw man argument. The disease is largely within us, not imported. — Garth

If that’s the case Garth, how do you explain the collapse in house sales in Vancouver after the intro of the foreign buyers tax?

Sigh. Asked & answered. Sales were already rolling over (as reported here in nauseating detail). Any perceived negative development was enough to chase buyers away (over 90% of whom were local). — Garth

#173 Smartalox on 04.06.17 at 3:57 pm

Flopsy:

I found it, it was buried on the press release page:
http://www.rebgv.org/sites/default/files/2017-01-March-Stats–Package.pdf

Year over year stats:
Overall Detached Listings up 34%, Sales Down 54%
Van West: Detached Sales down 63%(!)

The goose is cooked, but the goose don’t know it yet!

#174 NoName on 04.06.17 at 3:59 pm

#162 Blacksheep on 04.06.17 at 2:21 pm

So was I shamin g my wife for not knowing who buzz is, or u are uncomfortable with that moon thingy.
As for an average person I can not agree more with Georgy.

Press play.
https://youtu.be/mQR0bXO_yI8

#175 I'm stupid on 04.06.17 at 4:02 pm

#154 triplenet

Over 6 units is a commercial building unless I’m mistaken. You always choose the cap rate because you’re not obligated to buy anything. I know with any investment I have 4 factors that I look at

1. How much time and work do I anticipate having to do

2. What’s the rate of return

3. What can go wrong and how much can I lose

4. Does it fit into my portfolio to help achieve my retirement goals?

I’m not afraid to walk, thankfully I’ve never lost money in any investment I’ve ever made. The only reason is because I never take on more risk than I can afford, I think long term and I have very specific goals. I don’t live outside my means, spending less than 30% of my annual income on living expenses.

Most investors fail because they gamble when they don’t need to. If you’re in your 20s you should take considerable more risk than someone in their 60s. But always have a goal. Remember you can’t have all the money in existence so you need to decide what will make you happy and let that goal determine the risks you need to take. My goal was 300k a year inflation adjusted at 55 passively. It’s achievable for everyone but you need to make sacrifices and start young. If you’re goal is a million a year you’re going to have to take more chances. With more risk you have a higher probability of failure, so choose wisely!

#176 Nuke on 04.06.17 at 5:11 pm

Got out of real estate last May 2016. Been in a non-profit townhouse complex almost 30 years. Rent has averaged less than 1.6% annually to inflation 2.01% and my pay @ 3%, so my rental costs are in real dollars compared to my income and inflation about 1/2 what they started with. Private townhouses on the street are now 2.2 million! and up. Go figure

#177 nubbers on 04.06.17 at 5:23 pm

Vit @26
Guys you have to realize that 30% price increase in less than a year will be spreading internationally . Folks that made a killer in lust stock run will move $$$ to more save Toronto real estate market . Read latest news investors from South Korea coming big to Toronto we are very cheep for them . People who sell now well regret this next year .

This does kind of make sense to me. Soon, every Toronto greater fool and their parents will be mortgaged to the hilt and the market would collapse, like it did in the 90’s.

This time round, however, the search for greater fools has extended globally and we can expect a massive boost from anyone who lives far enough away that they only see the dodgy statistics and the marketing hype.

Not only that, but I think it is reasonable to extrapolate that with all the earth-like exoplanets being discovered, it is only a matter of time before extra-terrestrials get wind of the Toronto RE market and descend in their quivering hoards to grab a rental bargain. And probe their new tenants, so obviously another good reason not to be a renter.

#178 For those about to flop.. on 04.06.17 at 5:31 pm

Yep Smartie ,I agree.

I put a stat up the other day ,not sure if you caught it.

Westside of Vancouver only sold 95 detached units in March smashing the previous low of 135 which was set back in the uncertainty of 2008.

Numbers like that can’t happen in an area that pulls the market upwards without ramifications…

M42BC

#179 Patiently Waiting on 04.06.17 at 5:47 pm

Hot off the press, here is a few more examples from my hood in White Rock of things to come in the Big Smoke now that the politicians are perched to take action on the local housing market:

14833 HARDIE AVE
Originally listed at $5,200,000 – just sold for $4,285,714 almost a cool mil below original list price

1616 142B ST
Original list price $1,588,000 – just sold for $1,399,000 $187,000 below list

13869 24 AVE
Original List Price $2,700,000 – reduced by $400,000 to $2,300,000 … still unsold

First comes denial, then comes fear … these examples are the weak ones who are starting to crack under the pressure of a market beginning its decent … they will be lucky ones when people look back in a few years … take notice Toronto … time to cash in your wining lotto …

#180 jess on 04.06.17 at 6:14 pm

interesting

economist Yama Temouri of Aston Business School used ORBIS, the biggest global database of corporate balance sheets

http://www.taxjustice.net/2017/04/03/panama-papers-big-players/

#181 Tudval on 04.06.17 at 7:43 pm

#165 David Rosenberg is a dimwit. No intelligent analyst can advocate a ‘Robin Hood’ approach to the markets – that’s what a tax is, right? It’s simply incredible to me that grown man are even talking about this.

Raising rates is another matter, he does acknowledge it’s the natural ‘solution’, but it has to be discarded because BOC won’t take that approach. How is this anybody’s problem, but BOC’s? I mean, they don’t do what needs to be done, so others have to do the dirty work for them, even if it’s the wrong thing to do?? That’s really screwed up logic.

They say they cannot apply the medicine to the whole of Canada because the problem only exists in 2 cities. Well, the markets beg to differ and they price Toronto and Vancouver much higher than frigid Calgary and Montreal. If you think the market is so wrong, YOU go live where it’s affordable.. everybody else hates it.

#182 JS on 04.07.17 at 10:13 am

First ever comment in 7 years of being loyal follower. All I want to do is quote John Maynard Keynes “The market can remain irrational longer than you can remain solvent”. It answers pretty well to those who have been questioning Garth’s warning. I have myself been there and done that but this one line has changed my thinking and now I am patient.

#183 rainclouds on 04.07.17 at 4:31 pm

This dovetails nicely with Floppers hard work.

And the lamestream media is jumping on the bandwagon.

Per Yale Professor and Nobel Laureate for his US RE Econ efforts. “watch the media, when they start reporting negative RE news, the slide in prices is imminent”

https://vreaa.wordpress.com/2017/03/28/leverage-turns-bad-vancouver-homebuyers-lost-almost-50-per-cent-on-their-down-payments-in-1-year-global-news/