Let’s roll

Last week I told you about Jane’s house going on the market in one of the sizzling burbs of the Big Smoke. Two weeks earlier a similar house on the same street traded for more than $900,000. Jane’s realtor listed at that level, holding an Offer Night and trying to kindle a bidding war.

Crickets. Listings have just started to erupt, the agent then told her. So they tried again, at a seriously lower price.

She called me Saturday morning. “An offer came in,” she gushed. There were no multiple offers. No moisters lined up on the curb. No buzz. No event. “Eight hundred. Should I take it?”

Yesterday this pathetic blog told you about the changing dynamics of supply and demand in the last two manly markets in the nation. The number of available properties in the GTA and (especially) Vancouver is hardening fast, just as it seems demand is growing flaccid. The latest barrage of headlines – TORRID HOUSES SIZZLE 33% HIGHER – seems to have had an impact. This is a market on borrowed time.

And Jane may be among the last cohort of buyers to get out near the moment of peak house. On Monday the wildly unpopular premier of Ontario confirmed the hammer’s about to fall on the horniest of all housing markets in the land, “very soon.” That might be tomorrow, or it might wait for the budget expected in the next three weeks. But the preem says you should buckle up now.

The measures will have “a swift impact” on real estate, with the clear intent of cooling the market and (obviously) rolling back prices. The details? Unknown. But she has already indicated rent controls will be imposed on every leased property in the kingdom – kicking all amateur landlords in the financial nads – while her finance minister has mused about a tax on foreign dudes, a special levy on speculators or even some kind of capital gains tax on people who own properties for a short period. Bringing up the rear is the Toronto mayor, who’s spoken kind words lately about Vancouver’s idiotic Empty Houses Tax.

Put it all together, and you probably have a mess. Will it be a market killer? Beats me. But the potential’s clearly there.

People are already getting the message. Almost half of homeowners planning to list their homes soon say they’re worried political actions will torpedo house prices, according to a new CIBC poll. And all this talk about rent controls has persuaded about a third of them that, when they do bail out, becoming a tenant is the rational thing to so. (By the way over 40% of these people are smart little devils, saying they’re selling because they want a pile of tax-free windfall profits.}

Making all this even more interesting are the wrinklies.

The bank found almost 70% of Boomers now plan to sell their houses – and most of them are doing so because (a) they need the money, (b) want to downsize and (c) they feel terrific about giving some horny moister couple a chance to shoulder eternal, crippling debt and finance their retirement.

Of course, it gets worse. (Don’t you love this blog?)

Those same Millennials the Boomers are counting on to create the biggest inter-generational wealth transfer in history (from the young to the old) are starting to wise up to this scam. New data shows a staggering 81% of moisters who own a home plan on selling, with 63% of them saying they want out – real estate was a disaster, Hoovering them dry. Meanwhile six in ten of the kids worry that rising interest rates will make their mortgages unaffordable and 36% conclude renting is best.

Yeah, they’re still brain-washed, with 54% of the 18-to-34 set believing house prices “will never come down”. So cute. But the combination of despair at current prices and the realization that buying at these levels is a financial sinkhole is taking its toll.

So, figure it out. Supply of houses is mushrooming. Governments are aiming a firehose at the market. Homeowners are worried the thing’s rolling over. Eight in ten Boomers plan to exit. And the cohort they want to sell to is busy changing its shorts.

So should Jane accept the offer?

She did already. Boomers, 1. Mills, 0.

152 comments ↓

#1 common sense on 04.10.17 at 6:24 pm

What a difference a day makes….

#2 Love this Blog on 04.10.17 at 6:26 pm

You called it Garth. Coming to pass now, glad I was able to keep my kids out.

#3 Out of work Realtors on 04.10.17 at 6:30 pm

Some of you will never make another sale again . Others will never work in the industry again. You shysters will suffer. Happy Housing Crash Everyone! :-)

#4 Chaddywack on 04.10.17 at 6:38 pm

Wow someone made an offer lower than list price and it was accepted?

Didn’t know that happened anymore in either Vancouver or Toronto. The story I hear in YVR is “I’ll hold on until I get my price damn it.”

On a plus note, as a renter, I notice a LOT more rentals on the market in Vancouver now, and interestingly some landlords are even willing to not stand pat on demanding a fixed term lease with move out clause!

It’s funny how the media never does stories on offers below asking or rental pressures easing. I can’t believe I have to come to Garth Turner’s Blog for that:)

#5 Bahumbug on 04.10.17 at 6:40 pm

I’ll have to see it to believe that the government,s action will have some sort of impact!

THIS sounds like last October and nothing happened.

#6 rainclouds on 04.10.17 at 6:40 pm

“Vancouver’s idiotic Empty Houses Tax”

You are waay to kind to Gregor the Dim and the “Visionista’s” who are complete effing financial and political dolts AND hypocrites. (given their pandering to the developers and their less than rental focused product)

The latest from the Province fishwrapper doomed to oblivion as post media implodes……

http://theprovince.com/opinion/columnists/vancouver-city-hall-interference-taxes-homeowners-patience

#7 United Airlines Security Team on 04.10.17 at 6:45 pm

Garth, you need any deplorables dragged off this blog, just send us a text, ok.

Fly the Friendly Skies

#8 Entrepreneur on 04.10.17 at 6:47 pm

This better erupt soon or might as well be a drug addict. I say that because what is the point of trying to better oneself when the system in place ignores the people in it (our youth are turning to drugs as what is the point, too much and too hard on them).

Watched P&P today, someone talked about how great Kristy is and how B.C. is first in jobs, economy. Talk about being ignored.

Yeah right, what about the jobs for our steelworkers who jobs (ferries) went to Germany and Poland; what about our mills closing down sending raw logs out of country; what about our youth who have to leave the province for a job. Oh right, the LNG jobs, promises again, election time.

#9 John on 04.10.17 at 6:48 pm

Hey Garth, we’ve been hearing of things that will cause real estate to correct for some time now. Care to venture a prediction on when the market in Vancouver will correct in a significant way?

#10 Out of work Realtors on 04.10.17 at 6:53 pm

Email Kathleen and let her know they should introduce foreign tax , rent comtrol , get rid of CMHC etc. She will forward complains like CMHC to right person. I send her and others emails every few days

#11 Domingo on 04.10.17 at 6:57 pm

Well, as an active owner-occupier house hunter in Vancouver’s Middle-East, I wish I could say I see an increase in stock. I just got outbid on 2 places, and there’s nothing else meeting our criteria. I hope you’re right Garth, but I ain’t seeing it.

#12 millmech on 04.10.17 at 6:59 pm

I would be surprised to see people snapping houses up when they go down in price as people only seem to want something when there is a perceived scarcity of it.
Another thing is that when prices decline everyone will not want to be tainted socially with the perception of financial ineptness as to buy a house that keeps going down in price. You will be as popular as a leper in a hot tub when you brag that you have purchased property in a down market.
As for the empty house tax just get the house declared uninhabitable because of mould/electrical issues or bulldoze it down and take your time to build another one.

#13 Out of work Realtors on 04.10.17 at 7:00 pm

True story. Buddy of mine is in process flipping a house. Gutted it and all that good stuff. Place is still not ready some contractors are dragging their feet. Anyhoe he is worried the place wont be ready in time before the housing market crashes especially since Kathleen is saying she will introduce measure. Flippers are getting worried they may not be able to get out. I told him he can rent it but doesnt want to rent it cash flow negative

#14 GreaterFool on 04.10.17 at 7:01 pm

Is this it? I still think it can’t crash if interests rates remain low….. Anyone can “afford” a house.

#15 Lulu on 04.10.17 at 7:01 pm

Aww.. Jane, you are leaving too much money on the table, it another realtor’s game here.. lol

You’ll see within a two to three months, your house will be back on the market with 33% more than the last time you sold and agent probably have it all from your left over..

Feel bad now or seller remorse? Hmm.. you’ll find out soon…. giggles!!!

#16 joe on 04.10.17 at 7:03 pm

Something odd has been happening this month. Houses in vancouver that couldn’t sell a month ago are getting multiple offers and above listed price. Not sure what… something smells funny…

#17 the Jaguar on 04.10.17 at 7:06 pm

Bizarre photo, Garth. Is that a bird landing in the background or the top of a palm tree? The millennials bailing out of housing is no real surprise. Buy and hold would never cut it for the ‘instant gratification’ crowd. And if they lose money on the exit the moaning and groaning will be endless and painful. It will be the boomers fault, of course.

#18 When The Whip Comes Down on 04.10.17 at 7:09 pm

The message doesn’t seem to be coming to Victoria yet. The market there is simply stupid…..single detached benchmark price up $35,000 in ~6 months to $790,000 in March. Not Toronto or Van by any stretch, but its seriously problematic for most.

#19 Pre-retiree on 04.10.17 at 7:09 pm

I am willing to believe what you say but on what data are those assertions based on?

#20 When I buy... on 04.10.17 at 7:11 pm

I wonder if Garth has ever talked about contracts with listing agents. We were asked to sign a listing agent contract before our agent would put in an offer. This is DEFINITELY something you should check before beginning with an agent. When you know someone is working for you, you ask for a bit more. For example, why is the seller given lots of information about the house price being appropriate, but the buyer is left in the dark. We should all be asking for proof from the agent that this house is well priced. (I’m talking about Ottawa, which should have comparables.) I have NEVER seen any agent help with this, because it is not in THEIR interest to have a picky buyer. We just might decide that this house is a bit overpriced!But the information was given to the seller when they listed, and the buyer needs this info too.

#21 CL on 04.10.17 at 7:11 pm

1. even after everything “Jane” has read here and knows, she STILL wondered if selling was the right thing to do at that price “just in case” she would be missing out on “more profit”.

2. the fact 3 levels of incompetent governments are going to “do something” virtually guarantees it will all be a disaster.

this should never have been allowed to occur/continue for so long anyway…many many many should be called out and held accountable but where to start after so many years of illusion? govt’s come and go, realtors come and go, bank governors come and go etc………….

#22 AK on 04.10.17 at 7:18 pm

“So should Jane accept the offer?”
“She did already. Boomers, 1. Mills, 0.”
—————————————————————-
Curious. What are her next steps ? Renting? Moving 100 miles away ?

Investing the money, letting it pay the rent. — Garth

#23 Debtslavecreator on 04.10.17 at 7:23 pm

Peak Canuck Housing is HERE !
This is the inflation adjusted peak in Canadian housing for many a decade ….. I see a good chance at 20-30% drop in nominal terms over the next 24 months or do followed by a few years of choppy actio
Come 2030s your house will probably sell for 20-30% more than today but your groceries will be 1000/ week And property taxes triple what they are today

#24 bubu on 04.10.17 at 7:30 pm

She was panicking for nothing. It was the same in Edmonton and Calgary and the prices are still the same… .people will wait to sell longer but they will not accept lower prices unless they are forced…..

#25 LH on 04.10.17 at 7:32 pm

Still little supply of SFHs in C01, C02
I expect the C01/C02 spread to 416, and 416 spread to 905 to widen immensely in the coming decades as the baneulization of Toronto progresses

#26 Frankg on 04.10.17 at 7:37 pm

You mentioned the CIBC poll and all over the news today all they report is the 54% that beleive house prices will rise no mention of the 81% who want to sell because they beleive price will fall. So it is the media who are probably backed by the real estate mob who want to share fake and brainwashing news. The government if they want to fix this should report fact based news and diffuse the fake news that the media is spreading. But then again who is the government more apt to supporting. This is really bad for the young generation who were born and educated in this city, they will suffer for the rest of their lives…. not to mention the property tax increase for all the over inflated market values of homes. This is a vicious time.

#27 Newbie on 04.10.17 at 7:39 pm

C’est la vie…

#28 Realtor on 04.10.17 at 7:39 pm

Re: Out Of Work Realtor ! Did you know the word shyster is a racist term used on Jews??? Being a Realtor for 20 years has made me financially independent at the age of 51 !!!!! So denagrate me of you want but use terms that are not racist!

#29 Landlording on 04.10.17 at 7:41 pm

I cannot understand why someone would want to get into this business of landlording unless they had inherited a multiplex or were part of an investor’s group that had bought into multiplexes when prices were lower.

If real estate is your schtick, several Canadian or American REITs are paying healthy monthly dividends. No phone calls about a blown heater or leaky roof. No potential for a tenant defaulting on their rent and all the other hassle.

Leave landlording to the pros and invest without leverage into whatever dividend play tickles your fancy.

#30 Bezengy on 04.10.17 at 7:42 pm

I love the way governments always try to solve a problem by implementing new taxes. Pure creative genius.

#31 SimplyPut7 on 04.10.17 at 7:44 pm

I’m not sure who the Millennials think they will be selling to, I have seen the shoe box condos they bought with the maintenance fees as high as rent.

They are on their own.

#32 After one year I get it back for cheap on 04.10.17 at 7:46 pm

MLS® Number: N3756128
Nestled On A Cul-De-Sac Quiet Street Overlooking The Proposed
Park, Only 23 Houses On That Street, Built By Arista Homes. App Just Under 4,000 Sf. Unfinished Raise Up Basement, Potential Recreational Room Or Two Bedroom Apartment. Basement And Main Floor 10 Feet Ceiling. Kitchen With Granite Counter Top. All Stainless Steel Appliances **** EXTRAS **** Seller Is Willing To Lease Back The House For One Year At The Rental Rate Of $3,000 Per Month Plus Maintenance And Utilities.

#33 Tony on 04.10.17 at 7:46 pm

I hope Poloz doesn’t cut the Bank of Canada rate to zero if the housing market starts to crumble.

#34 The Gouch on 04.10.17 at 7:47 pm

“Yeah, they’re still brain-washed, with 54% of the 18-to-34 set believing house prices “will never come down”. So cute. But the combination of despair at current prices and the realization that buying at these levels is a financial sinkhole is taking its toll.
So, figure it out. Supply of houses is mushrooming. Governments are aiming a firehose at the market. Homeowners are worried the thing’s rolling over. Eight in ten Boomers plan to exit. And the cohort they want to sell to is busy changing its shorts.” – Garth

———————————————————

Same anti-housing message all these years, and yet prices have risen up, up, up and away. Crash, slow-melt, blah, blah. Whatever. Hasn’t happened. Isn’t going to happen. Not unless there’s an economic crash in Canada. Let’s hope that doesn’t happen.

The majority of Canadian markets are currently stagnant or in decline. Look beyond your nose. — Garth

#35 Sitting on the toilet thinking on 04.10.17 at 7:47 pm

I actually feel bad for Kathleen wynne. She will get the blame if the housing market crashes. But the real culprits are poloz and carney for keeping rates down for too long

#36 Last of the Boomers on 04.10.17 at 7:49 pm

If this actually comes to pass, just as you have written above Garth, we may actually have balance again in our lives, and our children may have hope. Man, I wish the b.c. Provincial government would follow suit, and I wish more than just the gvrd would hop on board. B.c. City and provincial governments need to work more collaboratively as they appear to be doing in Ontario.

#37 Steve on 04.10.17 at 7:49 pm

This blog has been a fascinating read lately. I look forward to it everyday.

I don’t agree with your sentiment on the impact of the foreign buyer. Two close people in my life have recently sold houses, in both of these cases the money on the other end came from overseas… Anecdotally, I think the impact of foreign investment is larger than 10%.

That being said, there are two types of foreign buyers. Those buying who don’t live here and then people living here (presumably Canadian) with rich family overseas looking to make an investment. I am not sure you can stop the latter.

That being said, can you put capital controls on people having family wire over money to buy housing? And ethically, should you? Or more importantly does it make economic sense?

Anyways, I love the blog. Seems like everyone just wants to talk about real estate everywhere I go; which must be a bubble indicator.

Keep up the great work!

#38 Tony on 04.10.17 at 7:51 pm

Re: #6 bubu on 04.10.17 at 7:30 pm

Edmonton resale real estate fell forty percent in about 18 months from the summer of 2007 to the start of 2009.

#39 dakkie on 04.10.17 at 7:54 pm

Toronto’s Real Estate Market: Is This The Worst Ever Real Estate Bubble In History
http://investmentwatchblog.com/torontos-real-estate-market-is-this-the-worst-ever-real-estate-bubble-in-history/

#40 Vancouver on 04.10.17 at 8:00 pm

#4 chaddywack
Because Realtors own media for a good part

#41 crazy house deals in Germany on 04.10.17 at 8:01 pm

The market in some areas is so thin that sellers are listing their houses NOW with a move-in date 10 years into the future. Yes, that’s right. Buy the house now at a lower rate and don’t collect rent for 10 years because the rent (at market rate) is forwarded 12 x 10 and discounted from the purchase price.

In 10 years you can actually move in to the place IF the house is still standing or the neighborhood hasn’t gone in the crapper.

These deals are far and few and in between but they are common in hot markets. Sellers can cash in and can keep their digs for another 10 years before they move into a condo or assisted living.

Coming to Toronto?

#42 Rifles on 04.10.17 at 8:04 pm

More evidence that foreign money is not playing a roll in Vancouver

http://vancitycondoguide.com/vancouver-pre-sale-condo-ponzi-scheme/

I just read a story with no facts, statistics or sources. You guys are hilarious. — Garth

#43 Cto on 04.10.17 at 8:09 pm

23 Tony
Poloz cutting rates to stimulate house market.? Of course he will…That is all he knows. He’s like ” bam-bam” with his bat! Bam! Bam!
Cut those rates! Don’t consider the consequences! Just cut! This is the central bankers thing. That is what they do….

#44 Mariv on 04.10.17 at 8:11 pm

Thank-you, Garth, for answering my question from yesterday (#55).

#45 choptstix on 04.10.17 at 8:11 pm

”I’m sick of living in a basement”
Globe and Mail: NEW MORTGAGES
Millennial B.C. buyer.
http://www.theglobeandmail.com/report-on-business/millennial-bc-buyer-im-sick-of-living-in-a-basement/article34637420/?reqid=fcddf46a-61b7-4e0c-bc96-42c5ceefa97b

#46 choptstix on 04.10.17 at 8:13 pm

forgot to add: article above (”i’m sick of living in a basement”)
talks of the BC Housing loan program created a few months ago.
”Curtis Van Marck says he thought he would always be a renter, until the British Columbia government’s new interest-free loan program for first-time home buyers came along.

#47 Bank of Millenial on 04.10.17 at 8:14 pm

Garth – you also forgot that GTA has the highest housing starts in nearly a decade… Record supply being built too?

This market about to get it on all ends man. GLTA

#48 Mean Gene on 04.10.17 at 8:19 pm

Please tell me Jane’s husbands name is Richard.

#49 Vancouver on 04.10.17 at 8:24 pm

# 38 Steve
Really like your post. Good explanation of the types of foreign ownership in van. Swiss have perfect solution and are not wimps to implement it. Garth is great, except wrong in denying the impact of foreign ownership and its various forms

#50 Vancouver on 04.10.17 at 8:32 pm

#43 riffles
There are no facts, statistics because no one cares to collect them. If government really wanted to come up with the new tax, it should have been flipping tax. Also, there is no 15 percent tax on presale condos. How handy for speculators, foreign or not

#51 bubu on 04.10.17 at 8:41 pm

If the government will impose a tax on foreign ownership, they will move the bubble to Montreal or West to AB…. This is how they moved it from Vancouver to Toronto….

#52 LMAO!!! on 04.10.17 at 8:47 pm

Wynne Liberals are going to ‘fix’ the T.O. housing market? She probably bring in 75 year mortgages… just as she will fix the hydro issue …run for cover!

#53 Your Leader on 04.10.17 at 8:55 pm

No price decline. Might flat line for a year or two, until buyers and sellers re-calibrate.

Sorry, but we operate in a global economy. There are projected to be almost 8,000,000 Millionaires in China & India by 2027-2030. There are real Millionaires, not fake Canadian housing millioniares (small m).

There are only 7,500,000 Single Detached Dwellings in all of Canada. So basically, every single Detached dwelling will be purchased by a foreign Millionaire over the next 10 to 15 years.

Capital flows across boarders, remember this people. You might need a passport, but capital flows do not.

Canada is stable, it has fresh & clean water the world desperately wants. It was space to grow. These 3 factors alone make Canada number one for Millionaires.

If you have a home to sell to them, you are somewhat lucky. If you don’t have a home by now, you are simply front-line fodder for the US gov’t next military intervention.

Future Political Leader, Me

#54 Ryan on 04.10.17 at 9:00 pm

mortgages are a service…if a mortgage is $1,000 a month, that’s $50 a month more, only $600 a year, in terms of income tax…that’s not horrible. double that and it’s not horrific.

I sense 2018 budget will have GST on mortgages to pay for promises the government cannot even come close to affording. and THIS is a way to ask the “rich” to pay “a little more” – poor people don’t own : they rent.

#55 Funky on 04.10.17 at 9:04 pm

Yes…Do love this blog.

#56 JohnnyBoy on 04.10.17 at 9:04 pm

#29 Realtor
Re: Out Of Work Realtor ! Did you know the word shyster is a racist term used on Jews??? Being a Realtor for 20 years has made me financially independent at the age of 51 !!!!! So denagrate me of you want but use terms that are not racist!
#####################################

Look, a Realtor who is “offended”. A Realtor who, after 30 years, is financially independent and wants everyone to know abou it.

You realtors have lied, cheated and mislead buyers and sellers for generations. How do you realtors justify your “commission”? What value do any of you add to the process of a real estate transaction? The honest answer is, that not one of you realtors add any value to the process!

Real Estate Lawyers are never talked about, and yet, they add true and substantial value to the process and closure of the real estate transaction. A real estate transaction where the lawyer’s monetary gain is a fraction to that of a realtor’s commission.

Again, how do you justify your commission for a service that adds NO VALUE!!

#57 Leo Trollstoy on 04.10.17 at 9:06 pm

#5 Bahumbug on 04.10.17 at 6:40 pm
I’ll have to see it to believe that the government,s action will have some sort of impact!

THIS sounds like last October and nothing happened.

Completely agree. Toronto house list isn’t going away any time soon. Government intervention will have almost no impact on prices.

#58 Leo Trollstoy on 04.10.17 at 9:08 pm

Wynne’s housing intervention will be all bark and no bite. Just like everything else. You heard it here first. Carry on.

#59 Vit on 04.10.17 at 9:22 pm

One month ago I sign up for a new town-home development call Richmond Green in Richmondhill . $850 000 start price . So on Apr 6 I opened my email and sow 2 mails from Mattamy homes one tells me that they starting registration today and second email tells that registration is closed . The time difference between 2 emails was less than 1 hour . So what it tells you about today market ???

What’s it tell you about marketing? — Garth

#60 John in Mtl on 04.10.17 at 9:23 pm

#52 bubu on 04.10.17 at 8:41 pm said:
“If the government will impose a tax on foreign ownership, they will move the bubble to Montreal or West to AB….”

I’m pretty sure the bubble won’t move anywhere near the Quebec province! For one thing, hardly anyone wants to bother to learn french. I work in Montreal & I live on the south shore ; beleive me, the number of immigrants that have been here a while and don’t speak a word of french is staggering. Somehow a lot of them get away with it and manage with their native tongue or broken english… until they have to deal with a hospital or a government agency. Then they get insulted (rightly so) because they don’t speak the working language. There is also a large percentage of new immigrants that come here, stay for a few years then move to any other english speaking province.

As long as Quebec maintains its stiff language laws and bothers to enforce them, no bubble will come here.

#61 John in Mtl on 04.10.17 at 9:26 pm

And it is my sincere hope no bubble ever develops here. This place is still quite affordable and sane!

#62 new town-homes on 04.10.17 at 9:26 pm

One month ago I sign up for a new town-home development call Richmond Green in Richmondhill . $850 000 start price . So on Apr 6 I opened my email and sow 2 mails from Mattamy homes one tells me that they starting registration today and second email tells that registration is closed . The time difference between 2 emails was less than 1 hour . So what it tells you about today market ???

#63 Catalyst on 04.10.17 at 9:28 pm

I spoke with a broker representing hundreds of agents in the GTA – they said its still multi offers on almost every property.

I’ll wait for the Wynne news before I get too riled up.

#64 Bat Flipper on 04.10.17 at 9:42 pm

Plebs:
Energy Prices are too damn high!
Wynne:
Woops, let’s decrease it by 20%, and tie it to inflation, but we still need to pay for it, so taxes/deficit.

Plebs:
House Prices are too damn high!
Wynne:
What’s a bandaid solution to win a few votes? First time buyer perks. government subsidies for new first time buyers while taxing the evil vacant homes/speccers.
Also, a multimillion dollar agency for analyzing house prices.

Why the market won’t crash till rates increase or big recession?
– Gov needs the taxes
– Gov needs the jobs
– Gov needs the banks happy

It will just be lip service.

#65 bill on 04.10.17 at 9:50 pm

#29 Realtor on 04.10.17 at 7:39 pm

Re: Out Of Work Realtor ! Did you know the word shyster is a racist term used on Jews??? Being a Realtor for 20 years has made me financially independent at the age of 51 !!!!! So denagrate me of you want but use terms that are not racist!

ah nope looks like it means a fraudulent lawyer…
and I think it also has passed in to common language use as someone who is a rip-off artist…

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

#66 Paul on 04.10.17 at 9:54 pm

#57 Jonnyboy
Lawyers don’t work nights, weekends , holidays, on call 7 /24. Without agents sending Lawyers deals most would not make it. Don’t bite the hand!

#67 Linda on 04.10.17 at 9:59 pm

The Boomers who want (or need) to sell to finance their ‘golden years’ had best move fast. Those who have already sold & pocketed the proceeds are going to be ever so happy they got out while the going was good. My thought is that regardless of what measures are taken by politicians to ‘cool’ the market, the one that will have the most impact is hordes of Boomers trying to cash out while people are still willing to offer any ridiculous sum to own a piece of real estate. If that doesn’t drop pricing due to over supply, nothing will.

#68 Nonplused on 04.10.17 at 10:11 pm

Note that even if the real estate markets in Toronto and Vancouver cool off, the rent controls, foreign buyers tax, empty house tax, land transfer tax, and capital gains taxes all being imposed on the market will stay. Once implemented they will be permanent.

#69 JohnnyBoy on 04.10.17 at 10:24 pm

#67 Paul

My point was that lawyers are essential, where realtor’s are NOT. Read between the lines and understand the message.

They are many lawyers that work nights, weekends and are on call 24/7 (not 7/24), if needed.

Realtors add no value to society.

#70 Simmer Down you on 04.10.17 at 10:26 pm

Re: Out Of Work Realtor ! Did you know the word shyster is a racist term used on Jews??? Being a Realtor for 20 years has made me financially independent at the age of 51 !!!!! So denagrate me of you want but use terms that are not racist!

————-

Source? It’s derived from a German word for someone who defecates. 51 and financially stable? Read a book

#71 crowdedelevatorfartz on 04.10.17 at 10:50 pm

@#67 Paul.
“Lawyers don’t work nights, weekends , holidays, on call 7 /24.”
*********************************************
Oh you poor poor overworked realtors have it so brutally tough!
Its SO unfair that your commissions are only (on average) 5% of the sale price.
$50,000 per million….not bad for all that “suffering”

As for all that dreadful “extra” on call “work”…….
Hmmmm. apparently you havent met any criminal lawyers just starting out.
Or Doctors, or policemen, firemen, hotel managers, cat doctors, dog doctors(Garths fave), journalists, self employed tow truck drivers, self employed plumbers, self employed electricians, elevator repair men(my fave)…..

Cry me a river.
Google searches could replace you.

#72 45north on 04.10.17 at 10:53 pm

government intervention: it is putting the cart before the horse:

– foreign investor tax ( we’re not really sure who a foreign investor is )

– vacant house tax ( we’re not sure how we will determine a house is vacant )

– speculation tax ( we don’t really know that a house is bought and sold for speculation )

– we don’t know what the selling price is

– we don’t know the days on market

– we don’t really know the asking price

but we do know that we are going to do something!

Well here’s some advice to Kathleen Wynne: by-and-large provincial laws and regulations have not contributed to the housing bubble therefore the answer is not in provincial laws and regulations. However the Ontario Municipal Board in overruling the Toronto and Ottawa City Councils has contributed to the reckless building of condos and has brought about the chaotic situation as documented in the CBC documentary “The Condo Game”.

Further the Federal Government has announced the creation of the Housing Statistics Framework. The Provincial Government can contribute to this.

Proposed changes make a mockery out of the call for “data driven policy”. You don’t have the data! You’re thinking about changing the Residential Tenancies Act – so how many single family dwellings are rented? What is the age of the dwellings? What is the age of the furnace, of the roof? What are the mortgages on the property?

You don’t know!

#73 WUL on 04.10.17 at 11:08 pm

Oh the prairie lights are burnin’ bright
The Chinook wind is a-movin’ in
Tomorrow night I’ll be Alberta bound
Though I’ve done the best I could
My old luck ain’t been so good and
Tomorrow night I’ll be Alberta bound
No one-eyed man could e’er forget
The Rocky Mountain sunset
It’s a pleasure just to be Alberta bound
I long to see my next of kin
To know what kind of shape they’re in
Tomorrow night I’ll be Alberta bound
Alberta bound, Alberta bound
It’s good to be Alberta bound
Alberta bound, Alberta bound
It’s good to be Alberta bound
Oh the skyline of Toronto
Is somethin’ you’ll get onto
But they say you’ve got to live there for a while
And if you got the money
You can get yourself a honey
A written guarantee ta make you smile
But it’s… Full lyrics on Google Play Music

#74 WUL on 04.10.17 at 11:13 pm

On my iPad I had no iDea what my cut and paste comment looked like. iCannot edit. inAnyevent, readers might get the point. Move here if prosperity is something you dig.

Thanks Hon. Valiant, M.P., P.C., Wrangler.

#75 JohnnyBoy on 04.10.17 at 11:18 pm

#73 45north

It’s called MPAC!

#76 Joe2.0 on 04.10.17 at 11:28 pm

Money finding it’s way into Canada’s RE.
Its not going to stop.
People are bailing from Europe, China, U.S. Latin America, Japan, India, Africa, Iran….
It’s been a fact for years.

#77 matthew arrigo on 04.10.17 at 11:29 pm

Unfortunately as long as interest rates are low and people can lock into low fixed rate mortgages, there will be no price correction, only the total number of sales will decline (and listings will rise) which will give a smaller number of sales to correctly determine the “average” sales dollar amount. Vancouver pricing is almost back at its July 2016 levels, and Calgary didnt drop below 5% its price peak. Only thing that will cause prices to fall are:

Short term interest rates go up quickly
Global financial chaos
War or political instability

#78 wynne's news on 04.10.17 at 11:30 pm

stop whining about housing costs. just go buy a house at Sherman and barton in Hamilton for $299,000 and learn some jeet kune do to disarm a rusty shiv wielding crack head

#79 'Investing the money letting it pay the rent' on 04.10.17 at 11:39 pm

How so? She likely had a mortgage on it? Let’s say she clears $500,000

$500,000 safely can yield 4% (an advisor will gobble 1% , he’s likely to take on greater risk to increase yield . In a taxable account ? She needs to pay taxes

4% pretax is $20,000 .

Safe to say she’ll be ‘downsizing ‘? :)

No mortgage, and 6% after fees is a reasonable expectation, with an income stream largely in ROC. That’s four grand a month for rent – and living in a better place. — Garth

#80 YVR update on 04.10.17 at 11:41 pm

After the BC Green party hands Christy Clark’s BC Liberals the election victory, expect houses anywhere within 400km to be priced at $1 million.

MSM is hoping for the Greens to take votes away from the NDP (vote split). The Green followers have got to be the dumbest people around.

#81 YVR update on 04.10.17 at 11:44 pm

#54 Your Leader on 04.10.17 at 8:55 pm
No price decline. Might flat line for a year or two, until buyers and sellers re-calibrate.

Sorry, but we operate in a global economy. There are projected to be almost 8,000,000 Millionaires in China & India by 2027-2030. There are real Millionaires, not fake Canadian housing millioniares (small m).

There are only 7,500,000 Single Detached Dwellings in all of Canada. So basically, every single Detached dwelling will be purchased by a foreign Millionaire over the next 10 to 15 years.

Capital flows across boarders, remember this people. You might need a passport, but capital flows do not.

Canada is stable, it has fresh & clean water the world desperately wants. It was space to grow. These 3 factors alone make Canada number one for Millionaires.

If you have a home to sell to them, you are somewhat lucky. If you don’t have a home by now, you are simply front-line fodder for the US gov’t next military intervention.

Future Political Leader, Me

——-

Absolutely; in BC if the Liberals win one must buy ASAP or miss approx $400,000 in appreciation for detached over next 4 years.

If Ontario ever gets a foreign $$ loving gov like BC, London Ontario houses will cost close to a million.

#82 jane24 on 04.10.17 at 11:46 pm

Govts don’t actually have to do anything. They just need to make noises that they might do something to bring prices back down, to stop the ‘houses always go up’ dogma. Once there is fear in the market then the market stops. No one wants to be the fool at work that overpaid in a down market. It always comes down to what people believe. The fear of loss rather than gain is starting. This bubble is done.

Making the banks rather than the taxpayer cough up for CHMC losses would also be helpful. This change would cost the govt nothing and could be applied as of next week.

#83 Tulips on 04.11.17 at 12:04 am

I’m watching closely to see any sign of pull back in the Fraser Valley hobby farms and small acreages. Been watching for a few years and the typical price on a 5 acre property with a simple livable house in Langley has gone from about $1M in 2014 to pushing $2M now. Despite the apparent Vancouver correction there’s no sign of it slowing down in this sector. Could acreages survive a correction unscathed due to low supply?

#84 JohnnyBoy on 04.11.17 at 12:09 am

#54 & 77

Go smoke your crack pipe and keep on dreaming.

#85 DON on 04.11.17 at 12:20 am

http://www.bbc.com/news/business-39552369
4 hours ago

“But Ms Yellen said the US economy was now “healthy” and required less help from the central bank….

Other Fed officials have indicated the central bank will raise rates twice more this year.

We think a gradual path of increases in short-term interest rates can get us to where we need to be, but we don’t want to wait too long to have that happen,” Ms Yellen said…”

hmm! A whole generation is starting to see the biggest economy in the world raise rates, once thought impossible. The mere words should send shivers through who are heavily indebted to a bank over particle board houses.

The ship set sail on a sunny day, the skipper and his crew…

#86 For those about to flop... on 04.11.17 at 12:31 am

Pink Pollen falling in Vancouver.

The guys paid 1.4m last Spring for this house and are now fighting to get their money back.

Turner Street…..what did they think was gonna happen…

M42BC

3509 Turner Street, Vancouver

Mar 10:$1,599,000
Apr 10: $1,449,000
Change: – 150000.00 -9%

https://www.rew.ca/properties/R2145582/3509-turner-street-vancouver-bc

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

#87 mouldyinYVR on 04.11.17 at 12:38 am

#12 Domingo….just heard the same on my elevator ….this evening …….moans and groans about being outbid ‘yet again’ on West Side……(couple looking for a place – anywhere between Main and Alma – pretty big territory.)
Anyway, Garth, enjoy the craziness – hope you guys in GTA don’t have to endure what we’ve been through in YVR!

#88 WUL on 04.11.17 at 12:50 am

#82 jane24

Gubm’ts ride waves. Lesser lights, our host excepted. When things go well, they take credit. When things go poorly, they blame others. They know not what they do.

#89 For those about to flop... on 04.11.17 at 1:45 am

Pink Pollen falling in Vancouver.

These guys paid 1.45m last September and so they are fixing for a good loss at this stage unless they are just putting it down that much to make sure it goes this Spring.

As I stated in a post this morning ,around a third of the houses in Vancouver proper under 1.2 million…the bottom end of the market have had to lower their prices.

Then you’ve got 3 Pink Pollen cases tonight in the price range that the media says is still red hot ,all possible chances of losing money.

The media has been lying so long that it’s nose is turning into a broom handle…

M42BC

1237 E 64th Avenue, Vancouver

Mar 1:$1,549,000
Apr 10: $1,349,000
Change: – 200000.00 -13%

http://blurealty.com/r2154393-1237-e-64th-avenue

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

#90 For those about to flop... on 04.11.17 at 1:46 am

Pink Pollen falling in Burnaby.

Just like the last guys their latest reduction has put them back in the same territory they bought it for last January at 1.468m.

As you can see below they have been trying to sell it since last October.

That’s a long slog..

I said slog…

M42BC

3855 Brandon Street, Burnaby

Oct 11:$1,698,000
Apr 10: $1,498,000
Change:200,000 -12%

https://www.rew.ca/properties/R2154532/3855-brandon-street-burnaby-bc

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

#91 wallflower on 04.11.17 at 1:53 am

I think all you realtor/agent bashers need to give these personnel a break. Have you ever had to deal with one of those realtor locks on those doors?
This is a unique skill set. Google won’t help.

#92 Dan.t on 04.11.17 at 2:06 am

Funny how the market was set to rollover anyhow 2017-2018- it’s just want happens after 17-18 year cycles, and now government who encouraged and stroked the fire to create the biggest housing gasbag Canada has ever seen is Now going to do the responsible thing and try and reign in speculation and and enact measure so maybe, just maybe rent, and housing might be affordable again..,

And money (not debt) can go to helping restaurants , malls, and other aspects of the economy, and not just realtors and mortgage brokers and banks.

In the end and soon we will see the amount of debt involved and the amount of greedy speculation that has been going on as it comes out that it was simply Canadians buying multiple properties on a large scale and Canadians selling to Canadians until the last greater fool gets stuck with an overinflated condo and debt payments start coming due…. same time rates start to rise.

The public buys at tops and sell at the bottom- learn that lesson!. Those in between get lucky.

#93 A Reply to #92 Dan.t on 04.11.17 at 7:18 am

“But a pin lies in wait for every bubble. And when the two eventually meet, a new wave of investors learns some very old lessons: First, many in Wall Street — a community in which quality control is not prized — will sell investors anything they will buy. Second, speculation is most dangerous when it looks easiest.”
― Warren Buffett

#94 Victor V on 04.11.17 at 7:20 am

http://www.cbc.ca/beta/news/canada/toronto/more-than-200-condo-buyers-may-lose-homes-after-development-fails-1.4056699

About 200 people who bought condo units in an Etobicoke high-rise project may lose their homes after the development was placed into court-ordered receivership due to massive financial problems.

The project, still only about 15 per cent complete six years after it was first marketed to potential buyers, will now be sold off by the receiver in a bidding process.

#95 Buffett on Booms, Bubbles, and Busts on 04.11.17 at 7:26 am

“The basic cause, you know, embedded in psychology, was a pervasive belief that house prices couldn’t go down and everyone, virtually everybody, succumbed to that. But that’s the only way you get a bubble is when basically a very high percentage of the population buys into some originally sound premise. It’s quite interesting how that develops.

“The originally sound premise becomes distorted as time passes and people forget the original sound premise and start focusing solely on the price action. So the media, investors, the mortgage bankers, the American public, me, my neighbor, rating agencies, Congress, you name it — people overwhelmingly came to believe that house prices could not fall significantly. And since it was the biggest asset class in the country and it was the easiest class to borrow against, it created probably the biggest bubble in our history.”

https://www.fool.com/investing/general/2016/03/18/warren-buffett-on-booms-bubbles-and-busts.aspx

#96 pBrasseur on 04.11.17 at 7:39 am

…the realization that buying at these levels is a financial sinkhole is taking its toll. – Garth

I sure hope so, paying 1+M for a suburban home is bad enough when prices are rising but if prices start to decline even just a bit many will realize that this decision could turn out to be catastrophic for the rest of their financial life, running for the exits will become a no brainer for many and very appealing for many more.

That’s when things become real interesting, you then learn the true meaning of the word Bubble!

And of course this is a vicious circle, the demise of the RE market is the demise of the Canadian economy which is the demise of the RE market…

Why do you think the BoC is staying put in the face of good job numbers? Simple, they know Canadian growth is fake news…

#97 jess on 04.11.17 at 7:42 am

“According to the SEC, public companies would hire PR groups to drum up buzz around their stock performance. These firms would then hire writers who would write bullish pieces — all while pretending to be impartial.”

SEC: Payments for Bullish Articles on Stocks Must Be Disclosed to Investors
27 Firms and Individuals Charged With Fraudulent Promotion of Stocks

FOR IMMEDIATE RELEASE
2017-79

Washington D.C., April 10, 2017

https://www.sec.gov/news/press-release/2017-79

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

FINRA and Exchanges Charge Lek Securities and CEO Samuel F. Lek with Aiding and Abetting Securities Fraud
Charges Also Include Market Access Rule, Supervisory and Other Violations
https://www.sec.gov/litigation/litreleases/2017/lr23776.htm
WASHINGTON — The Financial Industry Regulatory Authority, along with the New York Stock Exchange; NYSE Arca; NYSE MKT; the four Bats Exchanges, Bats BZX, Bats BYX, Bats EDGA, and Bats EDGX; Nasdaq; Nasdaq BX; and the International Securities Exchange, today announced that they have commenced disciplinary proceedings against Lek Securities Corporation and its Chief Executive Officer, Samuel F. Lek, for aiding and abetting manipulative trading by one of its customers. Together, the complaints allege that Lek Securities and Lek aided and abetted extensive manipulative trading in a customer account known as “Avalon” from October 2010 through June 2015, which impacted both equities and options markets. Lek Securities is also charged with aiding and abetting Avalon’s operation of an unregistered broker-dealer.

Avalon’s manipulative trading activities involved practices known as “layering,” “spoofing” and “cross-product manipulation.

#98 ddd on 04.11.17 at 7:51 am

Was standing behind HAM yesterday when I overheard this gold “What did being so Politically correct get Canadians – house poor !

#99 pBrasseur on 04.11.17 at 8:15 am

#59 Leo Trollstoy – Wynne’s housing intervention will be all bark and no bite. Just like everything else. You heard it here first. Carry on.

I agree, the same is true for everything the feds have done so far. Truth is they are probably terrified of poking a hole in what they surely know by now is a monster bubble.

But the vultures are circling, patiently, they know their time will come…

#100 Paul on 04.11.17 at 8:17 am

Jonnyboy better think like a man if you are able not everyone you debate with smokes crack.
There is a reason why people say “what do you call 1000 Lawyers at the bottom of Lake Ontario a good start”
Lawyers don’t make agreements they make disagreements.Just ask a divorced couple after their Lawyers get through with them $50,000 is peanuts!

#101 crowdedelevatorfartz on 04.11.17 at 8:19 am

@#74 WUL
“Full lyrics on Google Play Music”
********************************************

A cowboy song about Alberta………?
I’ll pass thanks.

#102 crowdedelevatorfartz on 04.11.17 at 8:29 am

@#87 mouldy in Vancouver
“hope you guys in GTA don’t have to endure what we’ve been through in YVR!….”
*******************************************

Actually I’m rather enjoying the Toronto real estate insanity.
They get to experience what YVR has been suffering through for about 5+years and……..the feds are finally starting to wake up to this untaxed , unregulated flipping(hello CRA? Where are you?) and real estate ponzi shell game.

Let prices go so high even Harperites squeel for market regulation of Realtors and their propaganda OR the whole thing crashes and bankrupt buyers start hoisting Realtor heads on petards.

#103 james on 04.11.17 at 9:21 am

I think you have nailed this moment in history, Garth.

Especially about 81% of millennials (like my group) now thinking about selling.

So many friends are stressed to the limits right now paying mortgage debt and house costs they did not expect. The bloom is off the rose for them, and a few are admitting they want to sell and get out. More feel stuck and are dreading what may happen next.

I think we will look back at this moment as the tipping point for this current bubble.

#104 Déjà Vu on 04.11.17 at 9:22 am

“Canada’s housing bubble looks disturbingly familiar. On several key metrics, Canada’s housing market has far surpassed the U.S. at its peak.” Joe Castaldo, April 7, 2017

http://www.macleans.ca/economy/economicanalysis/canadas-housing-bubble-looks-disturbingly-familiar/

#105 Penny Henny on 04.11.17 at 9:26 am

New data shows a staggering 81% of moisters who own a home plan on selling, with 63% of them saying they want out – real estate was a disaster, Hoovering them dry. Meanwhile six in ten of the kids worry that rising interest rates will make their mortgages unaffordable and 36% conclude renting is best.-GT

Garth what am I missing here?
63% want out but only 36% will rent.
What are the other 27% going to do?
Move back into Mom’s basement?
If they do that then Mom can’t sell the house.

#106 Lee on 04.11.17 at 9:37 am

#29 Realtor,

Over the last fifteen years the Law Society of Upper Canada has instituted numerous initiatives to try to ensure lawyers charge a fair price for their services, reduce their fees for disadvantaged groups, regulate contingency fees (and most recently referral fees), ensure the competence of its members through continuing legal education (which most lawyers pay a few thousand bucks a year for), ensure pay equity in the profession and equality in hiring as best it can, make submissions to governing bodies in relation to the law, track money laundering at the threat of disbarment and of course publicly discipline hundreds of lawyers a year with real and substantial penalties where the public is at risk. As a self-governing profession, lawyers have some fear for its governing body in that it can exact real and punishing discipline. There is also broad choice when it comes to hiring lawyers. Prices range dramatically. Lawyers typically reduce their fees to reflect the results obtained, unless clients insist on proceeding with litigation against their lawyer’s advice. The 30% contingency fees are only applied to monies collected.

All agents have tried to do the last fifteen years is pull the wool over everyone’s eyes and lobby government for easier lending laws that in the end will screw over a generation of young people. I defy you to point to one submission made by the real estate industry that was genuinely meant to benefit the general public at the expense of real estate agents. The legal profession is full of law society and government initiates that make lawyers moan.

The reality of the matter is everything an agent does on
a residential deal except negotiate appropriate conditions can be done for nothing. Prepping the listings and signs is minimum wage work, measuring the house out is minimum wage work, open houses are minimum wage work, an appraisal is $200 bucks, filling in the APS is minimum wage work except for the conditions, setting a price can be done by an algorithm subject to some human adjustments which are quite obvious. Total value of the service is arguably $1,500 bucks per deal.

Still, agents are permitted to lobby openly and so they have been able to protect their turf largely through price fixing, subject to what happens with the competition tribunal hearings presently underway, which I hear will stroke a fatal blow to the real estate industry.

But of course, what do you care. You’re retired at 51. Hope you have a few million bucks to last you should you last to 100.

#107 Reads like the Stampede will soon begin... on 04.11.17 at 9:39 am

You’ve called it Garth. Cashed out awhile ago and moved to the EU.

Interesting to read the Comments of the past week and the Blog today and yesterday.

Basically: banks will step all over themselves to sell non-performing properties esp. in Calgary; listings increasing for fear of taxation in 416 land; Boomers selling in droves along with Millennials that do not want to be debt slaves forever and “Flop” and his actual data about how YVR prices continue to decrease by substantial amounts.

Let the stampede to the exits begin and watch prices drop like a rock.

Once 416 land tax measures are actually known, it will be a stampede.

This will end up being the largest asset devaluation and loss of wealth in Canadian history.

Finally, the mystique of RE as an investment will come to pass for at least 2 generations.

#108 @for those about to flop on 04.11.17 at 10:02 am

“For those about to flop” is a Realtor.

Pumping house asking price drops and failing to mention that part of the money changes hands overseas – the reason for the price drop.

#109 Tony on 04.11.17 at 10:07 am

Re: #52 bubu on 04.10.17 at 8:41 pm

The Chinese only buy highest (and eventually lose everything when the ponzi implodes just like back home in China) in price so that rules out both Calgary and Montreal.

#110 J on 04.11.17 at 10:17 am

I wonder if an age variable on capital gains tax might work to create the supply needed and give seniors the incentive to cash in. Selling above 65yrs and have been there a while and you get taxed on none of your capital gains, or 25% gets taxed. Something allow for the turnaround so the seniors don’t have to live in poverty only to prevent people who need to have a family home from getting one. Might ease the burden on welfare, CPP, and OAS.

#111 Rainclouds on 04.11.17 at 10:21 am

#29 Realtor “: Out Of Work Realtor ! Did you know the word shyster is a racist term used on Jews???

Do you know the word “Realtor” is a construct ethically challenged RE Association.

You are, and always will be, “Sales”. as in House Sales

On a credibility and social level slightly below the people who empty out Port A Potties (not to disparage their honest endeavours)

#112 Penny Henny on 04.11.17 at 10:26 am

#99 pBrasseur on 04.11.17 at 8:15 am
#59 Leo Trollstoy – Wynne’s housing intervention will be all bark and no bite. Just like everything else. You heard it here first. Carry on.

I agree, the same is true for everything the feds have done so far. Truth is they are probably terrified of poking a hole in what they surely know by now is a monster bubble.
………………………………

If Wynne pops the bubble she loses.
If Wynne just gives lip service then spring market is going to get even hotter.
.Rock and hard place.

#113 Vit on 04.11.17 at 10:44 am

Ontario water front farm for FREE.

https://www.theweathernetwork.com/ca/videos/gallery/ontario-farm-on-kijiji-for-free/sharevideo/5392047706001

#114 soost on 04.11.17 at 10:47 am

I haven’t heard much about fiercely regulating the consumption of new construction.

From what I have observed, recently, builders tend to have a “friends-and-family” day which precedes sales to the general public. This eats up the majority of new stock. The rest is quickly consumed by serial flippers.

I think we ought to limit the number of new-stock people can buy within a time period. We also need predatory penalties for circumventing this by using family members as a work around.

I think what new construction we are seeing is being gobbled up by those who don’t intend to live there. Its also allowed for the types of floorplans and living arrangement that actual resident-consumers wouldn’t otherwise consider.

#115 Musty Basement Dweller on 04.11.17 at 11:06 am

In hindsight it has become very clear that for the last 8 years or so, the relation between household income and real estate prices (touted here as an important fundamental) is pretty much meaningless. Doubtful that will change.

Of course it’s meaningless because people have filled in the gap with debt. Worry about that. — Garth

#116 For those about to flop... on 04.11.17 at 11:10 am

#108 @for those about to flop on 04.11.17 at 10:02 am
“For those about to flop” is a Realtor.

Pumping house asking price drops and failing to mention that part of the money changes hands overseas – the reason for the price drop.

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

You’re on some good stuff today!

Anyone who thinks that Chinese investment extends to buying East Vancouver starter homes is out to lunch…

M42BC

#117 Paul on 04.11.17 at 11:16 am

#106 Lee on 04.11.17 at 9:37 am
A piece from from you remark says it all !

“track money laundering at the threat of disbarment and of course publicly discipline HUNDREDS of lawyers a year with real and substantial penalties where the public is at risk.”

So what is the real profession that need to be scrutinized????? LAWYERS !!!!!

#118 Eks dee Sipal on 04.11.17 at 11:18 am

#103 james… absolutely. Like I’ve been reporting here over the last few weeks, households are stretched beyond the outer limits of the limits, Lines of Credit are out of control, the government has lost control of the situation. There are people going into the banks seeking approval for extending million dollar lines of credit, just ordinary people. Like it was nothing. I’ve seen it with my own eyes.

The banks are even afraid of the Frankenstein monster they themselves created.

jane24 said it right: we could have this bubble pricked as early as tomorrow simply by shifting the CMHC risk back on to banks. But since we know that the banking cartel are actually in control of the economy, and politicians are bankers’ puppets (reference my first ever post on this blog for more info) that will never happen. Instead, they’ll be bailed out like they were before.

In fact, I would venture to suggest that this is what we are waiting for: the banks to agree among themselves and with the assurances from their puppets in gov’t, how they will get paid if the bubble is allowed to deflate. That secret agreement will never make it to the light of day. Except if it were posted on this blog… anyone?

#119 Buffett's Formula for Valuing All Assets on 04.11.17 at 11:33 am

“Now, speculation — in which the focus is not on what an asset will produce but rather on what the next fellow [greater fool?] will pay for it — is neither illegal, immoral nor un-American. But it is not a game in which Charlie and I wish to play. We bring nothing to the party, so why should we expect to take anything home?

“The line separating investment and speculation, which is never bright and clear, becomes blurred still further when most market participants have recently enjoyed triumphs. Nothing sedates rationality like large doses of effortless money. After a heady experience of that kind, normally sensible people drift into behavior akin to that of Cinderella at the ball. They know that overstaying the festivities … will eventually bring on pumpkins and mice. But they nevertheless hate to miss a single minute of what is one helluva party. Therefore, the giddy participants all plan to leave just seconds before midnight. There’s a problem, though: They are dancing in a room in which the clocks have no hands.”

For Buffett’s formula for valuing all assets that are purchased for financial gain, see pp. 13-14 of Buffett’s 2000 annual report (at link below).

http://www.berkshirehathaway.com/2000ar/2000ar.pdf

#120 The Gouch on 04.11.17 at 11:38 am

Beyond my nose? Garth, the majority of RE markets in Canada ARE TO and Vancouver. And maybe Montreal. All of them are WAY UP beyond what they were when you started cautioning against RE eight years ago. Your advice was bad, and certainly not timely.

Eight million people live in those two centres. 28 million people do not. Stop being so provincial. — Garth

#121 Ole Doberman on 04.11.17 at 11:42 am

These little head fakes of real estate weakness are nice, but for the most part the flipping, speculation, FOMO, foreign buyers will keep markets at nose bleed levels.

We need a repeat of the 1978-1980 era where rates rose from 10% to 20%

Or in our day from 2.5% to 5% – still double right.

That’s the only thing that smouldered the crazy price rises.

#122 pBrasseur on 04.11.17 at 11:59 am

Interesting article on the role of central bankers in causing these bubbles.

http://business.financialpost.com/news/economy/canadas-housing-bubble-can-be-traced-to-mark-carney-and-his-bias-for-easy-policy-jared-dillian

I tend to agree with him, sure there’s CMHC put it has been here for a long time so that cannot be the only explanation.

#123 Mr Scotch on 04.11.17 at 12:07 pm

freedom 85

https://ca.finance.yahoo.com/news/freedom-85-baby-boomers-working-090000241.html
—————————–

The wolf of Wall street mansion for sale on Long Island, NY. Priced 2-3 cheaper than an equivalent in Toronto/Vancouver. Poor Yankees.

http://www.businessinsider.com/photos-of-jordan-belfort-wolf-of-wall-street-home-2017-4

https://reginarogers.elliman.com/long-island/5-pin-oak-court-old-brookville-vbtwmyx

#124 OnlyTheBankersLaugh on 04.11.17 at 12:36 pm

http://www.theglobeandmail.com/report-on-business/economy/feds-john-williams-sees-three-to-four-rate-hikes-this-year-report/article34664381/

Looks like there could be more than 3 hikes this year.

#125 Lee on 04.11.17 at 12:38 pm

#116 Paul,

There are no doubt many crooked lawyers. The legal profession is however the only profession in this country that conducts its disciplinary process in the open. Do real estate agents have the balls to do that? I also agree agents make much more on a real estate deal than lawyers do. A lawyer will charge tops $2,500 on a real estate deal with no complications, and much of this is expenses. I am still a little confused as to why lawyers don’t just get together and refuse to complete real estate deals for less than 5% like agents do? If everyone did it people would have to pay it.

#126 A Reply to #121 pBrasseur on 04.11.17 at 12:41 pm

See also Chapter 7, “Why Do Central Bankers Have Power over the Economy (Insofar as They Do)?” of Akerlof’s and Shiller’s book Animal Spirits.

The five animal spirits refer to (over)confidence, (un)fairness, corruption and bad faith, money illusion, and stories (and their interrelationships).

#127 Renter on 04.11.17 at 1:00 pm

Multimillionair here, have been renting for 5 years now, waiting for the market meltdown. Since our focus is on homes in the 2-3 million dollar range (will pay in cash), we have no problem waiting for the inevitable melt. I suspect next year will be a good year to start looking around, with 2019 being the right time to buy. By then the cadnadian dollar should be 60 cents to the us dollar, so this will be another great win. In all, the two year wait should save us about half of the price, compared to what we would be paying now. Unless our reckless politicians reinflate the housing bubble, of course. In that case, we will just leave Canada, it would signal that Canada’s economic problems are unsolvable.

#128 Paulo on 04.11.17 at 1:25 pm

Limit the goverment intervention to a few simple tweaks to start a orderly unwinding of the looming real estate fiasco:
1) make it mandatory that a individual residential owner is
required to inhabit the property for 5 years before being able to claim a exemption of capitol gains tax on sale, excepting special circumstances such as financial hardship,divorce or death of a spouse.
2) implement a 30% deductible on CHMC insurance coverage,based on face mortgage amount not appraised value.
3) the central bank should implement a .50% rate surcharge on residential mortgages in southern Ontario and Coastal BC ,with increases following US fed Increases lock step
4) In Ontario remove the Built Before 1991 rent control exemption.
5) In BC outlaw the loop hole in your rent controls permitting speculating landlords to make tenements victims and pawns in your gas bag market, you know the 1 year move out clause what a scam!
6) Non citizen purchasers of property should be required to register there status with revenue Canada,and the property subject to a 50% withholding of net profits of sale pending filing of tax returns, withholding a mandatory requirement of completing a sale or transfer of title.
these actions would put a serious brake check on our
real estate ponzi game, with a minimum of new goverment involvement

#129 jess on 04.11.17 at 1:27 pm

this case made me wonder what is foreign? when so many ” know your customer” rules broken along with spoofing /layering

FINRA and Exchanges Charge Lek Securities and CEO Samuel F. Lek with Aiding and Abetting Securities Fraud
Charges Also Include Market Access Rule, Supervisory and Other Violations
https://www.sec.gov/litigation/litreleases/2017/lr23776.htm
WASHINGTON — The Financial Industry Regulatory Authority, along with the New York Stock Exchange; NYSE Arca; NYSE MKT; the four Bats Exchanges, Bats BZX, Bats BYX, Bats EDGA, and Bats EDGX; Nasdaq; Nasdaq BX; and the International Securities Exchange, today announced that they have commenced disciplinary proceedings against Lek Securities Corporation and its Chief Executive Officer, Samuel F. Lek, for aiding and abetting manipulative trading by one of its customers. Together, the complaints allege that Lek Securities and Lek aided and abetted extensive manipulative trading in a customer account known as “Avalon” from October 2010 through June 2015, which impacted both equities and options markets. Lek Securities is also charged with aiding and abetting Avalon’s operation of an unregistered broker-dealer.

Avalon’s manipulative trading activities involved practices known as “layering,” “spoofing” and “cross-product manipulation.” Layering can involve a pattern in which multiple, non-bona fide limit orders are entered on one side of the market at various price levels to create the appearance of a change in the supply and demand of the security so that the manipulator can obtain better-priced executions on orders entered on the opposite side of the market; the non-bona fide orders are then cancelled. Spoofing is a form of manipulation that can involve entering non-bona fide orders with the intention of cancelling those orders once they trigger some type of market movement or response from other market participants from which the manipulator can profit. The complaints allege that Avalon also engaged in cross-product manipulation by engaging in the manipulation of option prices through trading in the underlying equity securities.

Lek Securities is also charged with failing to comply with the SEC’s “Market Access” rule – SEC Rule 15c3-5 – by failing to have adequate risk-management controls and supervision over Avalon (its direct market access client), and Samuel Lek is charged with causing the violations. In addition, the firm is charged with violating “know-your-customer” rules, and rules regarding the preservation and supervision of electronic communications, the maintenance of CRD information, supervision of employee outside business activities, payments to individuals not associated with a broker-dealer, and failing to fully and timely comply with information requests from FINRA in connection with the investigation.

http://disciplinaryactions.finra.org/Search/ViewDocument/68456

#130 jess on 04.11.17 at 1:28 pm

fake stuff

According to the SEC, public companies would hire PR groups to drum up buzz around their stock performance. These firms would then hire writers who would write bullish pieces — all while pretending to be impartial.

SEC Enforcement Actions. The SEC has taken enforcement action against companies and individuals for generating deceptive articles on investment research websites. The SEC recently charged 27 parties – including public companies, firms, and writers – with fraud for generating articles that promoted certain stocks when some or all of the writers allegedly:

Failed to disclose that they received payment, even though they had been paid directly or indirectly by the companies;
Used different pseudonyms to publish multiple articles that promoted the same stock; and/or
Used fake credentials (for example, misrepresenting that the writer was an accountant, fund manager, or research analyst who had certain academic degrees).

Additionally, the SEC alleged that some writers engaged in scalping (recommending a stock to drive up the stock price and then selling shares of the stock at inflated prices to generate profits).

https://investor.gov/additional-resources/news-alerts/alerts-bulletins/investor-alert-beware-stock-recommendations

#131 Headfaking since 2008 on 04.11.17 at 1:32 pm

For years, we have seen these head fakes in the market where a change in sales or listings or the introduction of a new government policy was supposed to herald the decline of the market.

But head fakes is all they were – prices just kept going up. Very very little reason to believe any surge in listings – just like every Spring – will change anything.

Highlighting those head fakes gives a semblance of hope that the market might correct for all those fiscally prudent Canadians committed to living in and contributing to this wonderful country.

Its almost like clockwork – every 3-6 months there is some new potential market sign or change in government policy that might just prick the bubble – but alas, it does not, and everyone waits for the next dose of hope to be delivered to keep renters and sideliners hoping against hope that things will change….

But prices keep going up…the horse is out of the gate and has run so far that there is no turning back.

#132 Mattl on 04.11.17 at 1:51 pm

#126 Renter – would love to see the math on how renting the past 5 years in Van will put you ahead in 2019. The market should deflate, maybe back to 2012 levels but the ramp up has been so ridiculous that I suspect those on the sidelines for 5-7 years are not going to get their wish of homes back to 2009 prices.

If you can indeed buy a 3MM home cash then I’m not sure any of that matters and even after a correction value IMO will not be good. Thats why we are looking at getting out of the LML, for 700k in Texas we can buy a home that would compare to a 2mm Van property.

#133 fair enough on 04.11.17 at 1:52 pm

No mortgage, and 6% after fees is a reasonable expectation, with an income stream largely in ROC. That’s four grand a month for rent – and living in a better place. — Garth

………

the ONLY way she is going to get 6% after fees is indeed by dipping into capital. Just wanted everyone to be clear of this.

in addition , its getting taxed first before its paying the rent

wanted to highlight as it sounds really neat, but unless the amount is substantial, the person will indeed dip into capital. Selling covered calls is a neat strategy (via an etf) to increase yield

Wrong on all counts. — Garth

#134 GTAHouseHunter on 04.11.17 at 1:58 pm

Garth would you care to comment on interest rate hike being held to keep the GTA and Vancouver Area from a housing crash. It seems as if the Government is fearful of raising interest rates as they feel a spillover effect could bring the whole country down.

It seems there are 2 house markets in the country.
GTA ( includes extended GTA: Hamilton and Oshawa) and Vancouver.

Rest of Canada

The other soft measures seem to have no effect till now tighter qualifications, no CMHC for more than million etc.

The only thing left to explore by the Feds is CMHC (no insurance more than 700K) and Interest Rate hike. Do you think T2 would do that?

Also what powers would a Provincial Government have other than some soft measures like vacant house tax, foreigners tax, rent control etc.

A lot of factors in house buying come under the Federal Government namely Interest Rates/CMHC/Capital gains exemption on principal residence and it seems they seem to be barely discussed.

#135 Damifino on 04.11.17 at 2:17 pm

#23 AK

What are her next steps ? Renting? Moving 100 miles away ?

Investing the money, letting it pay the rent. — Garth
—————————————————–

It’s been working like a hot damn for me these last seven years. Didn’t have to leave town, either.

#136 Chinese Doctor on 04.11.17 at 2:21 pm

What did I do to deserve this?

#137 Long-Time Lurker on 04.11.17 at 2:23 pm

Limited Sage,

Check out these charts that Deja Vu #104 posted.

The housing prices in Canada are actually higher in comparison than the U.S.’s were in their 2008 housing market crash.

There is also a 1987 Ontario housing bubble chart to look at.

#104 Déjà Vu on 04.11.17 at 9:22 am
“Canada’s housing bubble looks disturbingly familiar. On several key metrics, Canada’s housing market has far surpassed the U.S. at its peak.” Joe Castaldo, April 7, 2017

http://www.macleans.ca/economy/economicanalysis/canadas-housing-bubble-looks-disturbingly-familiar/

#138 TurnerNation on 04.11.17 at 2:31 pm

Yup always getting ripped off here in Kanada.
Also home to the $30 burger+beer (note I didn’t say Pint..we don’t get real pints) once taxes and tip is in.
….

http://www.sbnation.com/nhl/2017/4/10/15244552/toronto-maple-leafs-washington-capitals-playoff-ticket-prices-dc-cheaper

“Maple Leafs fans could travel to D.C. for less money than seeing a home playoff game in Toronto”

#139 CHERRY BLOSSOM on 04.11.17 at 2:33 pm

DELETED

#140 For those about to flop... on 04.11.17 at 2:50 pm

#135 Chinese Doctor on 04.11.17 at 2:21 pm
What did I do to deserve this?

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

My wife and I are flying United tomorrow.

At least I don’t have to worry about if my ankle locks up and them finding someone to drag me off the plane…

M42BC

#141 jess on 04.11.17 at 3:30 pm

Barbados is to protest to the American state of Illinois, which has blacklisted this country as a tax haven, following the introduction of a new bill by the state’s house of representatives.

Bill HB3419, which also names Anguilla, Bermuda, the British Virgin Islands, the Cayman Island and Turks and Caicos Islands, forbids business groups or those operating in jurisdictions considered “foreign tax havens” from submitting a bid or entering into a contract with the state of Illinois.

The new measure also restricts “expatriate corporations” in the countries named from doing business with the State.

https://legiscan.com/IL/text/HB3419/2017
Summary
Amends the Illinois Procurement Code. Provides that an expatriate corporation shall be considered a non-resident bidder for purposes of the Code. Provides that no business or member of a unitary business group shall submit a bid for or enter into a contract with a State agency under the Code if the business is an expatriate corporation. Defines “expatriate corporation”. Amends the Illinois Income Tax Act. Provides that notwithstanding provisions of the Act, any person formed or incorporated in a foreign tax haven may be a member of a unitary business group without regard to where its business activities are conducted. Defines “foreign tax haven”. Amends the General Provisions Article of the Illinois Pension Code. Requires the Illinois Investment Policy Board to make its best efforts to identify all expatriate companies and include those companies in the list of restricted companies distributed to each retirement system and the Illinois State Board of Investment

http://www.ilga.gov/legislation/BillStatus.asp?DocNum=3419&GAID=14&DocTypeID=HB&SessionID=91&GA=100

do not buy list
wave of divestment activism in Portland, Oregon, and across the country, the Portland City Council voted last week to pull all of the city’s investments in corporate bonds and securities….” Portland’s City Council is already considering a proposal to create a municipal bank that would allow the city to reinvest locally and with increased input from residents, instead of seeking returns from corporations that may actually be causing harm to Portland’s communities in the long run.
http://www.truth-out.org/news/item/40179-under-activist-pressure-portland-agrees-to-end-all-corporate-investments

#142 fixie guy on 04.11.17 at 3:39 pm

“Governments are aiming a firehose at the market.”

More precisely at the federally backed lender guarantees that poured gasoline on this conflagration of demand. It was one of Trudeau V.2’s first measures, cannily kept low in the press since – rightfully so and to the country’s huge benefit – halting this historically unprecedented and federally engineered transfer of wealth to financial institutions will normalize housing values and destroy the net worth of so many.

#143 united 're-accommodation team' on 04.11.17 at 3:41 pm

#135 Chinese Doctor on 04.11.17 at 2:21 pm
What did I do to deserve this?
————————————–
sir, you have been randomly selected to leave this blog. if you don’t leave peacefully you will be subject to smoke blown in your face, jd spilled on your shirt, and motorcycle tire tracks up your back.

#144 united 're-accommodation team' on 04.11.17 at 3:44 pm

#NewUnitedAirlinesMottos

“not enough seating, prepare for a beating.”

#145 maxx on 04.11.17 at 3:45 pm

The colossal mistake of not crystalizing gains now entitles the owner to a free pass to join the Sean and Oscar club.

The losses are staggering.

#146 Canadians are bankrupt on 04.11.17 at 3:45 pm

Eks dee Sipal on 04.11.17 at 11:18 am
#103 james… absolutely. Like I’ve been reporting here over the last few weeks, households are stretched beyond the outer limits of the limits, Lines of Credit are out of control, the government has lost control of the situation. There are people going into the banks seeking approval for extending million dollar lines of credit, just ordinary people. Like it was nothing. I’ve seen it with my own eyes.

The banks are even afraid of the Frankenstein monster they themselves created.

jane24 said it right: we could have this bubble pricked as early as tomorrow simply by shifting the CMHC risk back on to banks. But since we know that the banking cartel are actually in control of the economy, and politicians are bankers’ puppets (reference my first ever post on this blog for more info) that will never happen. Instead, they’ll be bailed out like they were before.

In fact, I would venture to suggest that this is what we are waiting for: the banks to agree among themselves and with the assurances from their puppets in gov’t, how they will get paid if the bubble is allowed to deflate. That secret agreement will never make it to the light of day. Except if it were posted on this blog… anyone?
_____________________________________
We have a government which hates the free and open markets have allowed bankers and realtors to create a ponzi scheme so large that yes they are all afraid. Banks have lent people money to the point they are truly bankrupt. Lines of credit, credit cards , mortgage vacations amd other schemes which is hiding the trurh. Home owners in thr GTA amd Vancouver are bankrupt. They dont have amy money. Its all borrowed.

#147 FLHTK on 04.11.17 at 4:05 pm

#143 united ‘re-accommodation team’ on 04.11.17 at 3:44 pm
#NewUnitedAirlinesMottos

“not enough seating, prepare for a beating.”

HAHA- thats a good one

#148 Paul on 04.11.17 at 4:26 pm

#124 Lee on 04.11.17 at 12:38 pm

#116 Paul,

There are no doubt many crooked lawyers. The legal profession is however the only profession in this country that conducts its disciplinary process in the open. Do real estate agents have the balls to do that? I also agree agents make much more on a real estate deal than lawyers do. A lawyer will charge tops $2,500 on a real estate deal with no complications, and much of this is expenses. I am still a little confused as to why lawyers don’t just get together and refuse to complete real estate deals for less than 5% like agents do? If everyone did it people would have to pay it.
—————————————————————
Motto don’t be a lawyer.

#149 espressobob on 04.11.17 at 4:41 pm

United Airlines training video,

https://www.youtube.com/watch?v=rVQcXR2HVhw

#150 Alice on 04.11.17 at 6:31 pm

@ #111 Penny Henny on 04.11.17 at 10:26 am

Wynne deserves a rock and a hard place. She’s totally bled the province since she took power.

#151 Alice on 04.11.17 at 6:33 pm

To clarify, I meant she needs to be in a position where she can’t win the next election. I know someone’s going to misinterpret that rock comment.

#152 Saba on 04.11.17 at 10:36 pm

Garth, do you own a home?
I’m a Millennial in my 30s and I feel pressured to buy in this heated Toronto market or forever risk to be left out!
Housing is currently the best investment possible especially considering no capital gains tax on primary residence. What if Toronto ends up like NY or San Fran or Lonsdon or HK — and homes before less and less affordable each year? I’ve been waiting for prices to fall for the last 4 years — at this rate, I can’t afford to wait any longer.

The goal of life is not a house. Toronto is not London. Real estate is currently the riskiest investment possible. Do not embrace debt. Fill up your TFSA and go clubbing. — Garth