The nanny state

Hammered! ON nails flips, non-locals: Link

Damn. And here I was all ready to write about the erosion of the historic Trump rally, the fizzlement of Trumpflation and what you should do about it. But, no. First we have to deal with this tediously delusional Toronto housing issue again.

Thursday morning at nine, Ontario’s wildly unpopular premier will jump out of a cake holding what her officials are touting as the momma of all market-dousing packages aimed at gelding speculators, neutering realtors, backing off foreigners and putting the brakes to runaway prices and house lust.

Yes, this is such a big deal it couldn’t even wait for the April 27th budget. The governing politicians have determined there’s nothing – not crumbling expressways, crippling electricity bills, closing factories or a Third World-style debt load – more critical than the fact moisters can’t afford $1.6 million houses in the urban core. Of course governments have been largely responsible for the Bubble That Ate Toronto. The feds threw interest rates in the ditch, sweetened the RSP homebuyer plan, created housing tax credits and allowed CMHC to back billions in loans to buyers without money. The province coughed up its own incentives – especially to encourage first-time buyers, like relieving them of land transfer tax. And now we reap the result. Houses homeowners can’t afford to sell nor buyers buy.

What happens this morning (if the speculation is right)? Here’s the buzz…

Universal rent controls covering all tenants, not just those living in older units. This will make renting a more palatable option, while kicking amateur condo-owning landlords in the nads. It’s expected rent hikes will be limited to inflation + 1.5%.

A speculation tax, maybe just on foreign dudes, maybe on everyone. What constitutes specking is the big question. Does a guy who moves into a place, renovates it then lists, get hit? People who own a house for less than a year? Someone who buys a condo for their daughter at UofT then sells it when she elopes? And how much?

The province takes over the direct regulation of the real estate business, as BC did last year so your tax dollars can flow to more bureaucrats. Plus the outlawing of assignment clauses, which allow a buyer to sell property again before closing. This will whiplash the condo trade. Maybe even a 48-hour cooling-off period for sales, which will keep lawyers busy.

A serious inter-government capital gains crackdown as the CRA teams up with the province to mount an audit orgy. Revenuers will have full access to land registry information. “We want to make sure anyone who is speculating is paying their fair share,” said the treasurer on Wednesday, “and that means those that are taking advantage of capital gains exemptions shouldn’t be.”

A 15% BC-style foreign buyer tax in the Golden Horseshoe. Yeah, sate the masses.

Establishment of a foreign buyer data registry so the citizenship of every person buying every piece of property is recorded. A great example of politicians following, instead of leading in a Trump-like fashion. It’s always easier to blame some offshore dudes instead of telling your constituents they’ve been acting like demented, debt-snorfling beavers.

Legislation to allow Toronto to establish an Empty Houses Tax, just to ensure the very worst idea that BC ever came up with is imported into Canada’s largest city. So much for property rights.

And just maybe there may be some actions announced to make building houses cheaper – reducing the Greenbelt, easing development controls, reducing lot levies…

________________________________________________________

Update: 9:30 am EDT:  The province just announced universal rent controls, a 15% non-resident buyer tax; permission for all cities to tax empty properties; big tax on assignment clauses; a knuckling-down on realtor practices; and tax breaks for developers. Further details. Government media release here.

________________________________________________________

The main target, however, is speculators. Says Treasurer Sousa: “The degree of speculation in the system is crowding out families who are trying to buy into the market and establish their own roots.” Like all politicians, he’s a merchant of false hope. There is no right to own real estate in Toronto, Ontario or anywhere else. In an urban area of six million people it’s simply unreasonable to believe everyone gets a house – and yet this flawed premise will lurk behind every word uttered in the morning.

The package contains 16 actions. They’re designed to immediately ‘cool’ the market without killing it. Lots of smart people think this is impossible, since mortgages still cost 2.5%, listings are scant and demand outstrips supply. But real estate is the most emotional of assets, intensely desired when it’s rising in value and shunned when falling.

If prices were truly being moved by planeloads of Chinese or thousands of flippers, then a foreign buyer tax or a speculation levy might work. But until we have a tax on stupid, not so much.

The market will croak on its own. Yes, that’s what they fear the most.

211 comments ↓

#1 frythedevil on 04.19.17 at 6:27 pm

i won first

#2 ShawnG in TO on 04.19.17 at 6:27 pm

oh gosh, that jumping out of cake image is forever ruined.

#3 Bobby on 04.19.17 at 6:29 pm

I’ve always thought the best tax a government could introduce is a tax on idiots. Given the people that keep the likes of Wynn in power and those that are supporting the NDP here in BC, the revenue would be significant.
When this crashes and it will, who is everyone going to blame?

#4 For those about to flop... on 04.19.17 at 6:31 pm

It just occurred to me that maybe “My life is a pile of shit” is now posting as ” Sitting on the toilet thinking .”

Maybe they started on a new medication and got constipated?

You know what they say about constipation…it can be a real pain in the…

Nope, that tag line won’t work…

M42BC

#5 Tim on 04.19.17 at 6:32 pm

“If prices were truly being moved by planeloads of Chinese or thousands of flippers, then a foreign buyer tax or a speculation levy might work.”

Since it’s consistently your contention that the market is not moved by foreign speculators, then there’s no downside to this legislation–why not cheer it on?

#6 common sense on 04.19.17 at 6:32 pm

That’s it Mr. T !

Tax Stupid. Think of the possibilities!

Give everyone a IQ test before and after buying, tax the difference.

All income solutions solved pronto. Well done.

#7 Suede on 04.19.17 at 6:38 pm

If people can’t see the ability to make money in RE with speculation (by buying condos) and yields (renting out a place)…

Then money will be looking elsewhere to make money.

Welcome to the long bull run in stocks, ladies and gentlemen.

#8 Smoking Man on 04.19.17 at 6:39 pm

I love it. It’s going to destroy millenial condo owners insuring not one libtard seat next provy election.

Won’t do sqaut to sfh, there is just not enough to go around.

#9 HoweStreet.com on 04.19.17 at 6:39 pm

Ross Kay on HoweStreet.com Radio:
Where are the Real Estate Buyer’s in Vancouver?
Toronto’s Real Estate Market turning down?

http://www.howestreet.com/2017/04/17/where-are-the-real-estate-buyers-in-vancouver/

#10 TLG on 04.19.17 at 6:42 pm

First u complain cuz prices are too high, now u complain when they try to get prices lower. You are just never happy. But u are right about interest rates, demand will always outstrip supply when mortgages are 2.5%. When money is almost free there is no bubble.

#11 Smartalox on 04.19.17 at 6:47 pm

@ShawnG in TO:

Just go watch the movie ‘Under Siege’. Your image associated with ‘jumping out of cake’ will be restored.

You’re welcome.

#12 Mike in Airdrie on 04.19.17 at 6:53 pm

I think the principal residence exemption also helped create a one asset retirement plan.

#13 AK on 04.19.17 at 6:54 pm

“Damn. And here I was all ready to write about the erosion of the historic Trump rally, the fizzlement of Trumpflation and what you should do about it.”
——————————————————————

Not going to happen anytime soon.

50 of 498 S&P 500 companies have reported year-over-year earnings growth of 16.5% & sales growth of 5.5%.

#14 I'm Not Poloz on 04.19.17 at 6:58 pm

It looks like Poloz is behind the scenes in devaluing the Loonie today; it’s at almost 73 cents.

This is even when the US dollar is weakening against the Euro, Yen and Pound.

How low will the Loonie go? Poloz told me that he wants the Loonie at 45-cents before the end of summer so that he can artificially increase the scarcity of real estate in Toronto, along with local singles on Tinder.

Soon you will be paying over $5,000,000 for a condo in Toronto while shelling out your life savings to date in Toronto.

#15 AK on 04.19.17 at 6:58 pm

“A serious inter-government capital gains crackdown as the CRA teams up with the province to mount an audit orgy. Revenuers will have full access to land registry information.”
——————————————————————
I’ve had to report all of my capital gains from stocks for years.

It’s about time these Bozo’s reported theirs from house flipping.

#16 Dick C on 04.19.17 at 6:59 pm

Of course governments have been largely responsible for the Bubble That Ate Toronto. The feds threw interest rates in the ditch,…..

—————————

Isn’t the Bank of Canada supposed to be independent of the govt? In any case, you have written several times that the BOC moves in lockstep with the Fed 93% of the time (or something like that), so the Canadian govt really can’t control the most important variable in this horrid equation. The best it can do is further complicate the real estate industry with stupid laws and ridiculous taxes, most of which will be unenforceable and look ridiculous 30 years from now.

Now, if I were Wild Bill, I wouldn’t just stress test new mortgages, I would darn well tax them an extra couple of percent. That would show the moister millennial hipsters who’s boss. Would also make them think about saving some before buying a house.

#17 common sense on 04.19.17 at 7:00 pm

#13 AK

50 of 498 is just over 10%, what about the other 90%?

Considering the Nasdaq is overweight heavily on a few companies…..Micro, Apple, etc, when only 1 falters, watch out.

#18 Lorne on 04.19.17 at 7:03 pm

#5 Tim
“If prices were truly being moved by planeloads of Chinese or thousands of flippers, then a foreign buyer tax or a speculation levy might work.”

Since it’s consistently your contention that the market is not moved by foreign speculators, then there’s no downside to this legislation–why not cheer it on?
…….
Good point. What have they got to lose? Unfortunately, with all the things talked about that are going to be implemented, it will be hard to tell exactly how much impact any of the changes are having.

#19 Timmy on 04.19.17 at 7:04 pm

Wow, those buffoons finally figured it out–5 years too late after housing is severely unaffordable for most tax paying Canadians. Why don’t we have data on foreign ownership? That would have solved the problem and it is so easy to collect.

#20 JR on 04.19.17 at 7:06 pm

Finished reading Smoking Man’s book. The last page had me laughing till it hurt!

The book made me wonder, what ever happened to “Holy Crap Where is the Tylenol”?

#21 I'm naked right now on 04.19.17 at 7:09 pm

Don’t be some dumb people. The changes that will be announced tomorrow will be completely watered-down and useless.

You bums have 2 choices: rent forever in Toronto or move to a remote community in Manitoba and create a new technology hub.

#22 TrumpForTheAges on 04.19.17 at 7:13 pm

More housing blah blah blah.

But what about that US GDP growth number now forecasted at 0.6% annualized.

Hard to type without laughing it is so unbelievably atrocious.

#23 Momo on 04.19.17 at 7:14 pm

I’d like to hear Garth’s take on where domestic speculator investment goes if withdrawn from real estate. TSX?

#24 Trojan House on 04.19.17 at 7:15 pm

The only thing about taxing the stupid is that the politicians are just as stupid – so somehow they’ll just screw it up.

#25 rainclouds on 04.19.17 at 7:16 pm

And in a few weeks the Ont school teacher will be given a detention by her caucus. She ain’t gonna be around to lose the next election.

Here in bicycle heaven, The NDP (if they don’t trip on their talking points) stand a good chance of beating the Conserv…..err Liberals, lead by Ma Barker and her gang of tired incompetents. We are doomed to be Governed by the incumbent dumbass Hillbilly’s or “progressives”

If the trend holds, Likely less than 50% bother to cast ballots. And you call this blog pathetic………….

#26 MoneyHoney on 04.19.17 at 7:16 pm

You have been talking about the market croaking by itself for the past nearly 10 years. It did not happen. So, the govt. needs to strangle it. If not a Brexit or Trump will show up on the horizon. If Gardnier crumbles, it is OK as there are other roads we can drive on.

#27 Ross Kay for Prime Minister on 04.19.17 at 7:20 pm

This blog has referred to the wisdom of Ross Kay many times in the past. Why is this blog ignoring Ross Kay now?

Ross Kay says the BC foreign buyer tax should have been 30% when buying AND another 20-30% when selling.

Ross Kay says this is needed to keep housing stock for Canadians.

Listen to his pod cast here: http://www.howestreet.com/2017/04/17/where-are-the-real-estate-buyers-in-vancouver/

#28 Joseph R on 04.19.17 at 7:20 pm

#3 Bobby on 04.19.17 at 6:29 pm
I’ve always thought the best tax a government could introduce is a tax on idiots.

———————————————————-

A tax on stupidity already exists; it’s called the lottery.

#29 Capital One on 04.19.17 at 7:23 pm

#3 Bobby

There already are taxes on idiots. They’re called “lotteries”.

CO

#30 Binder Dundat on 04.19.17 at 7:23 pm

“But until we have a tax on stupid, not so much”

Oh but there are such taxes:

1. Lottery tickets/gambling
2. Regular tobacco consumption
3. Credit card interest/overdraft fees

I’m sure Smoking Man would never dream of doing #3

#31 Moses and Bella on 04.19.17 at 7:24 pm

Million dollar termite infested beaches houses, Leafs winning play off games, real housewives of Toronto. Garth it doesn’t get any better please keep the real estate coming I can’t get enough. Save the charts and stats for the weekend.

#32 Doug t on 04.19.17 at 7:30 pm

governments should not get involved in markets period – the market will correct itself – the idiot premier is doing nothing more than trying to salvage a career- she is pathetic

#33 FI Guy on 04.19.17 at 7:31 pm

Garth, if you were Charles Sousa, what would you do to address the current housing market?

#34 ShawnG in TO on 04.19.17 at 7:32 pm

“… telling your constituents they’ve been acting like demented, debt-snorfling beavers.”

Jim Prentice told people of Alberta to look in the mirror just before the election, see how that ended.

#35 Ray Skunk on 04.19.17 at 7:35 pm

Genuinely interested in the rent control angle here. Never happened to me, but I’ve lots of stories from friends who have been evicted from their place under guise of “relatives moving back in”. Sometimes the landlord has been busted and the tribunal prevails, sometimes you can’t get the evidence to nail them. I expect to see a lot more of this kind of behaviour if demand remains high and legislated increases are nowhere near in line.

On the subject of renting, my advice: rent from a friend, a family member or suchlike. They have emotional skin in the game, and are less likely to want to turf you out due to the collateral damage in their social circle. I’ve been renting for three years from a family friend at what is probably now 60% of market rate. Couldn’t give two shits what people think, my declared income on the rental application was half of what I actually make. Loving the subsidy and prepared to perpetuate the image of poverty to continue saving like a fiend.

#36 dakkie on 04.19.17 at 7:41 pm

Toronto’s Increasingly Unaffordable Real Estate Market Is Going To Impact Other Canadian Cities As Well; Here Is How.
http://investmentwatchblog.com/torontos-increasingly-unaffordable-real-estate-market-is-going-to-impact-other-canadian-cities-as-well-here-is-how/

#37 Smoking Man on 04.19.17 at 7:46 pm

#20 JR on 04.19.17 at 7:06 pm
Finished reading Smoking Man’s book. The last page had me laughing till it hurt!

The book made me wonder, what ever happened to “Holy Crap Where is the Tylenol”?
………………………..

Thanks for reading it, going to re-release the same book with a different title, put it in Comedy genre rather than SI-FI what do you think.

“Holy Crap wheres me Tylenol” just vanished last year. Hope he didn’t by the farm. Aviator speak for, well you know.

#38 Paul on 04.19.17 at 7:47 pm

Yes that’s the ticket.
More laws, rules, forms to fill out.
The Government wants to know every detail of you life and tax everything that moves and most idiots cheer the on.

#39 Ex-Cowtown on 04.19.17 at 7:48 pm

#23 Momo on 04.19.17 at 7:14 pm

I’d like to hear Garth’s take on where domestic speculator investment goes if withdrawn from real estate. TSX?
++++++++++++++++++++++++++++++++++++

I’ll take a run at this one: The money goes nowhere as it doesn’t exist. It’s all conjured out of thin air by the banks because it’s a risk free investment backed by taxpayers (CMHC). It’s called fractional reserve banking.

No bank in their right mind would lend a cab driver and a esthetician $1million to invest in the TSX, but due to CMHC distortion of the market the banks are tripping over themselves to lend them $1 million to invest in real estate.

So don’t bother dreaming about all the “cash” being diverted from RE to the TSX and driving it up. There is no “cash” , just debt.

When the wheels fall RE off the TSX will suffer, same as in the U.S. Just be standing there with some dry powder to go on a buying spree, just like in 2009.

#40 Love Love Love It!!! on 04.19.17 at 7:55 pm

Yeah, what great news! Tax them all. Tax them into oblivion. Tax the foreign dudes, tax the speculators, tax the vacant properties. Love, love, love it! See you later housing bubble :-)

#41 Al on 04.19.17 at 7:58 pm

A spec tax on foreign buyers will never work. The foreign speculator will sell and instruct his/her lawyer to convert all monies received into bitcoin that can be downloaded overseas within seconds Trying to collect tax from that is a mug’s game. The only tax that will discourage non-citizens from parking their money in our residential homes is a 15% or more foreign buyers tax paid at time of purchase.

#42 Andrew Woburn on 04.19.17 at 8:01 pm

From The New York Times:

Steve Ballmer Serves Up a Fascinating Data Trove

A stealthy pet project by the former Microsoft chief lets you search and learn about how the government spends tax dollars.

https://www.nytimes.com/2017/04/17/business/dealbook/steve-ballmer-serves-up-a-fascinating-data-trove.html?mwrsm=Email

#43 crdt on 04.19.17 at 8:08 pm

WHAM the hammer has fallen. Hmm what would I do if I had a few condos downtown about now? Cut price hard and pass the potato, or shrug it off? Now it got complicated all of a sudden. So many more questions, so many uncomfortable situations that would have been avoided before. Is this the pin, the long awaited disintegration of the soap film? Bring it on, or let it ride?

#44 Love Love Love It!!! on 04.19.17 at 8:13 pm

Yaaahoooo! Tax ‘Um all. Rent control Yeah!!!

#45 MORTGAGE FRAUD on 04.19.17 at 8:14 pm

1 in 5 mortgages in Canada if FRAUD? I bet its higher then that Brampton is all fraud and everyone knows it. Where is the government to crack down on that? https://amp.businessinsider.com/1-in-5-canadian-homeowners-commits-mortgage-fraud-2017-2

#46 conan on 04.19.17 at 8:15 pm

RE #37 Smoking Man on 04.19.17 at 7:46 pm

You should call Coast to Coast and tell them that your an alien. Then sell your book while you spin your tale of “whatever” on the air waves. They have a listening audience in the millions. You could make bank there, or not.

#47 WUL on 04.19.17 at 8:28 pm

I’m glad that these government patches (akin to patching the exterior of a building with baling wire and discarded CocaCola signs) seem to be restricted to prov’l and municipal gov’ts and the Feds just engage in palaver. Outside of ON and BC things are just fine. Let the perpetrators stew in their own juices.

#48 Yah right on 04.19.17 at 8:28 pm

#3 Bobby on 04.19.17 at 6:29 pm

I’ve always thought the best tax a government could introduce is a tax on idiots. Given the people that keep the likes of Wynn in power and those that are supporting the NDP here in BC, the revenue would be significant.
When this crashes and it will, who is everyone going to blame?
******************

Nothing like a person who supports BC Liberal/Conservative corruption in the Banana Republic of British Columbia. Fiscal managers (BC Liberals) who have double ourt Provincial debt. Balanced budgets yah right. I dislike all political parties where members must tow the party line rather than represent their constituents.

#49 For those about to flop... on 04.19.17 at 8:30 pm

Ross ” Don’t look directly at his eyebrows ” Kay talked about a couple of things that I have noticed in my market study .

He talked about people in Greater Vancouver being over taxed last year which I have seen tonnes of examples of.

The listing below is an example of this.In 2015 it was assessed at 2.2m and then went up to 2.9m ,a gain of around 700k and then when the owner who is attempting to do the wise thing, goes to cash it in,they can’t get anywhere near that price and 6 months later are down the best part of a million below that price to engineer a sale.

These people not being recent buyers can obviously afford this reduction ,no matter how painful,or else they would just take it off the market.A lot of my Pink Pollen cases are in limbo and are most likely waiting until the summer to decide whether to take a loss or not.

It’s going to get real for a lot of people when they get their 2017 assessments later in the year,which leads me into another point that Mr Kay made that he says will happen in a few months ,but he must be too busy to read my posts.

He talked about homeowners being ” full negative ” ,basically owing more money on the house than it is worth.

As I have shown here ,there are lots of people already in that boat.

One of the unintended consequences of the spring market being so robust last year is that is not hard to find people that are over extended and I even have some cases where the starting list price is below what they bought it for in the first place and others that seem willing to take a small loss ,but their real estate agent has not been able to collude with another to convince them that it is a fair price…

M42BC

6030 Elgin Avenue, Burnaby

Oct 14:$2,780,000
Apr 19: $1,980,000
Change: – 800000.00 -29%

https://evaluebc.bcassessment.ca/Property.aspx?_oa=QTAwMDAzV1dTNA==

#50 LJ on 04.19.17 at 8:32 pm

The key to any trade is the exit. And, that all depends on the timing. Some clock the top, while others hold through the pain of a meltdown and finally sell when it’s too late.

#51 JR on 04.19.17 at 8:35 pm

#37 Smoking Man on 04.19.17 at 7:46 pm

#20 JR on 04.19.17 at 7:06 pm
Finished reading Smoking Man’s book. The last page had me laughing till it hurt!

The book made me wonder, what ever happened to “Holy Crap Where is the Tylenol”?
………………………..

Thanks for reading it, going to re-release the same book with a different title, put it in Comedy genre rather than SI-FI what do you think.

“Holy Crap wheres me Tylenol” just vanished last year. Hope he didn’t by the farm. Aviator speak for, well you know.
—————————————–

That might work pretty good. You should put a few easter eggs in it to keep your fans hooked. Kinda like how they re-release Star Wars every couple years.

You know, I had a theory that Garth was secretly “Holy Crap Where is the Tylenol.”

Garth: Are you Holy Crap?

#52 april on 04.19.17 at 8:36 pm

# 27 – Why aren’t people like Ross Kay and Garth Turner on MSN where the average person can hear the truth rather than listening to the crooked real estate industry and the crooked media reporting the industries spin.

#53 Toronto1 on 04.19.17 at 8:40 pm

Yay prediction time: i think the following will be in the 10 point action plan

1. Agree with Garth, rent controls coming, 1.5 + inflation sounds about right (will wipe the condo market as rents are tied to wages unlike real estate right now)

2. All bids on properties must be registered and disclosed to all bidders including price and conditions so everyone knows what they are up against- no more blind “bluff” bids

3. Mandatory 48 hour cooling off period for all RE deals with a minuscule penalty attached, ie. you pull out- you pay something like $2000-5000 penalty

4. 20% foreign buyers tax- for all of Ontario, to take effect 3-4 weeks out

5. All houses and condos for sale will have to undergo an energy audit , cost for those will be capped at $500-$750- most likely with a rebate attached so its its net -net until after the election

6. Speculators will have some minor penalty, most likely laddered- ie. other then primary residence when property is sold you pay 2-3-4% of sale price some type of tax

7. Flipping assignments will be made illegal or with taxes so high it will cease to exist

8. sales data will have to be made public and be publicly accessible from now on- so people can make an informed decision based on publicly available information

9. legislation allowing cities to implement taxes on vacant homes- choice will be up to each city if they choose to do this. Ontario will just allow them to do it

10. Some type of new enforcement measure against the shadow mortgage industry (not sure what it will be, more regulations, enforcement, cap on predatory mortgages, ie. most can be charged is prime plus 5-6-7%%? no idea but i think there will be something in this respect.

there you go, will see tomorrow how my predictions fare

#54 TurnerNation on 04.19.17 at 8:47 pm

Rent control. Now that’s a barbaric cultural practice.

Wonder if any REITS hold a majority of their rentals in Ontario. :-(

M41ON

#55 Barb on 04.19.17 at 8:53 pm

Property rights?

T1 made sure that wasn’t entrenched in the Constitution.

#56 Doug in London on 04.19.17 at 8:55 pm

While we’re long overdue for changes to deal with this run away bubble, the simplest and probably most effective solution would be to double interest rates. Why was no one in government addressing this problem 6 or 7 years ago? To deal with it now would be like locking the gate after all the cattle have gotten out.

#57 Smoking Man on 04.19.17 at 9:05 pm

#55 Barb on 04.19.17 at 8:53 pm
Property rights?

T1 made sure that wasn’t entrenched in the Constitution.
…..

Why would he. He was a hard commie. To bad he’s not around to see what happened to Venezuela. I don’t expect his brain dead son to figure it any time soon.

#58 Urban Sprawl on 04.19.17 at 9:10 pm

Sousa was pretty clear it all boils down to supply and demand. (which from reading your blog is wrong). The liberal cure coming up to an election, in a Province which allows corporate political donations, mainly developers? Open up the green belt to urban sprawl like 70,000 townhouses in Pickering’s Seaton. It’s really sad.

#59 Smoking Man on 04.19.17 at 9:11 pm

#56 Doug in London on 04.19.17 at 8:55 pm
While we’re long overdue for changes to deal with this run away bubble, the simplest and probably most effective solution would be to double interest rates. Why was no one in government addressing this problem 6 or 7 years ago? To deal with it now would be like locking the gate after all the cattle have gotten out.
…..

Our govt leaders all own SFH they ain’t going to shoot themselves in the head. But downtown condo owning, cycling phyco millenials are going to see what a bitch slap feels like.

And they will still vote liberal. Teachers I’m thinking.

If you own a condo. Your done, look at all the condo listings that came on line today. Wow.

SFH not so much.

#60 akashic records on 04.19.17 at 9:12 pm

Never seen so many so called conservatives getting into self-induced ecstasy by imagining new taxes on economic activities they missed to turn profit.

Conservative snowflakes.

#61 Shut down CMHC on 04.19.17 at 9:16 pm

Shut down CMHC and shut down mortgage fraud. Canada is a house of cards

#62 NV Landlord on 04.19.17 at 9:18 pm

“Why don’t the feds increase interest rates?”

This has been asked several times over many days / weeks/ years. Think about it. Will the feds be able to pay their own debts with higher interest rates? Now they can manage their own debt with low interest rates. Raising the rates on huge debts just increases the debts even more. Then they’ll have to raise taxes even more! Are we ready for that too?

#63 Green belt is a FRAUD on 04.19.17 at 9:25 pm

Urban Sprawl on 04.19.17 at 9:10 pm
Sousa was pretty clear it all boils down to supply and demand. (which from reading your blog is wrong). The liberal cure coming up to an election, in a Province which allows corporate political donations, mainly developers? Open up the green belt to urban sprawl like 70,000 townhouses in Pickering’s Seaton. It’s really sad

Developers created the green belt. This way they buy land at depressed prices and then behide closed doors change it from green belt to non green belt. The real esate industry hates free and open market which is why they need CMHC and green belt. Take away both and the houae of cards crumbles

http://globalnews.ca/news/3117212/how-developers-are-trying-to-build-on-ontarios-protected-greenbelt-land/amp/

#64 45north on 04.19.17 at 9:27 pm

The market will croak on its own. Yes, that’s what they fear the most.

but they don’t. The fact that house prices in the GTA are going up by 6% a month means house prices will crash. Like in the US. In the US as the housing market collapsed, the US Fed reduced interest rates from 5% to 0%. That’s not going to happen in Canada.

From what I hear, the plan is to make the housing market nice: prices will still go up but only in a nice way. Nice people will buy nice houses.

A housing market crash means that families are pushed to make mortgage payments they cannot make in the face of declining house values. there’s stress anxiety and depression. Families break up. So what’s a speculation tax going to do? A foreign buyers tax? An empty houses tax? From what I hear Souza is saying there will be no crash and the housing market will continue to go up. But in a nice way.

#65 wallflower on 04.19.17 at 9:28 pm

I should jump in here with a rent control story from way back when… house mate and I discovered landlord had doubled rent upon our arrival. Since we were none too pleased with his failure to install smoke alarms and an entrance door bell per his rental promise, we took him to the Landlord tribunal. Ha! The order was for him to repay half the rent for the foregoing two years. Nice……………….. turkey, all he had to do was install smoke alarms and an alarm bell. Instead, it cost him a whack of money.

#66 bob dog on 04.19.17 at 9:30 pm

Don’t raise interest rates though. That would solve the problem and level the playing field but it would hurt the profits of the 1%. You know those ‘successful’ people Garth is always talk about. Seventy percent of whom inherited their hard earned success.

I was in the hospital today and while there I read about a 6% monthly increase in Toronto housing costs. As I walked past the maternity ward I had to laugh as I came the realization that these babies would be better off if ISIS were in control of this country.

I want to see justice served streaming live in 4K ultra hi def. Im not a fan of gore but enough is enough.

#67 SoggyShorts on 04.19.17 at 9:32 pm

Garth, I saw sold data for RE/MAX Realtran Realty Inc. for year 2016. 770 agents did residential transaction volume of $7 billion. Assume the agent fee is 2.5%, so the average commission per agent is over 227k. Meanwhile, the median annual Physician – Family Practice salary in Ontario, CA is $198,079, as of March 31, 2017. I saw too many talented engineers gave up their profession and become real estate agents. This country is sick and rotten.

20% of agents do 80% of the business. Averages are a useless measure in a commission-driven profession. — Garth
——————————————
I know you just said averages are useless, but using the 80/20 you mentioned gives an interesting result:

The top 20% average 1,000,000
The bottom 80% average 50,000

I’ve never tried selling/buying a house… but still if I ran into a realtor I wouldn’t think “There’s a 1 in 5 chance this guy makes 7 figures” Then again I’ve never though that about anyone

No benefits. No pension. Have to rent your desk. Front all expenses. Starve in bad markets. See newbie competitors swarm in hot markets. Eat what you kill. And suffer constant criticism from the ignorant. Yeah, dream job. — Garth

#68 Smoking Man on 04.19.17 at 9:34 pm

#46 conan on 04.19.17 at 8:15 pm
RE #37 Smoking Man on 04.19.17 at 7:46 pm

You should call Coast to Coast and tell them that your an alien. Then sell your book while you spin your tale of “whatever” on the air waves. They have a listening audience in the millions. You could make bank there, or not.
….

Don’t have much of a work ethic, feel free to tell them about me.

This is how Nictonite is spelled.

We live in a weird world, BOC said robots are going to disrupt the workforce. Well, let te robots buy the food. They don’t need food.

So you are either a code smith, Python kids. or you’re going downtown with pitchforks. Either way, nature levels the playing field.

St Maarten bitches.

Smoking Man’s Bar. Near the runway.

#69 I'm stupid on 04.19.17 at 9:36 pm

Owning property shouldn’t be a right, but having affordable rental housing must be. If the baristas and cooks have no place they can live what will happen to the city?

#70 Sir James on 04.19.17 at 9:37 pm

Picked up my deed today, whoohoo!!!
I’m a Home Owner.

But was a little disappointed it was just a computer printout. Not really frame-able.

The transition from Hamilton to Welland was like a breath of fresh air; literally, emotionally and economically.

#71 Randy on 04.19.17 at 9:41 pm

Another opportunity for our Socialist Governments to manipulate the market system and then claim that the Free Market system is a failure…..a perfect track record….Keynes is still dead.

#72 };-) aka Devil's Advocate on 04.19.17 at 9:49 pm

We don’t need a tax on stupid. We need to stop bailing stupid out and let Darwinism do it’s thing.

#73 GTA Girl on 04.19.17 at 9:57 pm

So along with tomorrow’s announcement, this afternoon the OSC made their investigation official on Home Capital http://www.osc.gov.on.ca/documents/en/Proceedings-SOA/soa_20170419_home-capital.pdf http://www.financialpost.com/m/wp/news/fp-street/blog.html?b=business.financialpost.com/news/fp-street/osc-accuses-home-capital-of-misleading-disclosure-after-uncovering-fraud-in-mortgage-broker-channel The bodies will be unburied, and hopefully the full scale of fraudulent lending and laundering exposed. The winds are changing.

On a slightly different note, a TO developer who Garth mentioned in a blog post last year, is being pistol whipped by CRA for enormous tax evasion and using offshore shell companies to do so. Case is facing Supreme Court. So far the damages are enormous closer if not exceeding $10mil. Also implicates his business partners, financial advisor and his buddy at large accounting firm. Its too bad he ate threw most of his money over the many boom years. Many tax lawyers are blogging about the insanity of what he tried to do. Oh well, maybe a new start, jump into the movie producing business? I mean, they can’t be anymore sharklike then selling pre-build condos, can they?

#74 S.Bby on 04.19.17 at 10:00 pm

M42BC

6030 Elgin Avenue, Burnaby

Oct 14:$2,780,000
Apr 19: $1,980,000
Change: – 800000.00 -29%

https://evaluebc.bcassessment.ca/Property.aspx?_oa=QTAwMDAzV1dTNA==

Burnaby is in full reset mode, no question about that.

#75 Smoking Man on 04.19.17 at 10:01 pm

Mortgage rates falling. Globe and mail.

I’m selling too soon. But I’m out of loot. Lifestyle choices, more like Heather in the book, too my kids the day I met your mother.

#76 meslippery on 04.19.17 at 10:07 pm

No benefits. No pension. Have to rent your desk. Front all expenses. Starve in bad markets. See newbie competitors swarm in hot markets. Eat what you kill. And suffer constant criticism from the ignorant. Yeah, dream job. — Garth
————————

Are you describing a poorly paid cab driver?

#77 NS Guy on 04.19.17 at 10:08 pm

Government leaders are damned if they do, damned if they don’t.

Up until now, most politicians and Poloz have sat on their hands while the average Canadian gets screwed out of their dream of owning a home in their city of choice.

And when your company is shutdown, and manufacturing is shipped to China, then a billionaire from China buys multiple properties in your neighbourhood, it’s not racist to feel an injustice has been done.

Bring on the foreign buyers tax, bring on the empty housing tax, bring on the flipper tax, the speculation tax, the capital gain increases, the land transfer tax increases, bring it on!

#78 Paddler on 04.19.17 at 10:18 pm

As long as buyers are stupid enough to pay thousands of dollars over the asking price ( I know several) these markets will not correct. I don’t know which numbers to believe that are reported by several sources ( the least by any real estate body) . The prices in Vancouver did not seem to have corrected much. Yes sales are down quite a bit but prices are not from what I see.

#79 Lee on 04.19.17 at 10:18 pm

#67 Soggy Shorts,

The agents I know in the top 20 percent are usually there because they are extremely entrepreneurial and would likely do extremely well in any sales position. Some people just have the gift of gab and tons of drive – a deadly combination in a sales-oriented job. A comparable situation is young salespeople who sell computer networks to big businesses. Really yuge money. Not unusual to see these guys clear $300000 a year. And nothing more than a computer diploma from Seneca. Bringing in the bacon is a big part of being successful in the real world.

#76 Meslippery,

He was talking about lawyers.

#80 For those about to flop... on 04.19.17 at 10:20 pm

Pink Pollen falling in Burnaby.

Not sure what these guys are up to but this one is worth a look.

It is a new build that was bought for 2.06m last May and is only assessed at 1.5 which most likely would have come later in the year and included the updates.

It states that the building portion of the assessment went from 12k to 526k,which would lead you to believe that all is good with the assessment.

They just took the axe to it,most likely to announce that it’s feeding time at the zoo with a big bell ring.

There are some speculators on the Westside of Vancouver that could take some big losses ,but I find it hard to believe that these guys are o.k with a 350k loss.

Maybe someone with a certificate can check that I got this one right…

M42BC

8920 15th Ave Burnaby

Jan 25:$2,298,000
Apr 19: $1,688,000
Change: – 610000.00 -27%

https://www.zolo.ca/burnaby-real-estate/8920-15th-avenue

https://evaluebc.bcassessment.ca/Property.aspx?_oa=QTAwMDAzV0tHWg==

#81 Smoking Man on 04.19.17 at 10:20 pm

M57ShlongBranch with a malfunctioning lower smiley face alter ego.

I’m a writer now, don’t matter that book sales suck.

Let that one sink in.

Priorities.

https://www.youtube.com/watch?v=x7bIbVlIqEc

#82 WUL on 04.19.17 at 10:21 pm

Fire Babcock. All he has to do is open the gate with that talent laden club.

#83 Mike on 04.19.17 at 10:30 pm

To really be effective in tracking speculation behaviour in house flipping, they must require that SIN # of buyers and sellers be collected at the land registry stage of conveyance of any property. Why is it that if one buys an etf or stock that CRA knows the SIN # or identity of the buyer but no such requirement is forced upon a house buyer. This is totally unfair . Investors of etfs have to be transparent but not leveraged property flippers.

#84 S.Bby on 04.19.17 at 10:33 pm

Poloz should raise back up to 1% it would not cause any issues economically and it would throw some cold water on housing. He never should have made that knee-jerk move down in the first place.

#85 The Wet Coast on 04.19.17 at 10:34 pm

Owning real estate is not a right. Hmmm…when the folks that played by the rules, went to school worked hard and became lawyers, engineers, teachers cannot afford to live in many of Canada’s largest cities something is clearly wrong. The role of government is to provide a level playing field for everyone, such that they can pursue their dreams. When the government allows folks that have made their money under different rules to compete with folks here, it has not being doing its job. I know of folks that would like to move their manufacturing facilities to Canada from China, as they don’t like being away from their families. But they find the pesky work place regulations, unions, taxation, environmental impediments to doing so, somewhat overwhelming. So they commute. But its time to change how we do things. If offshore folks want to live here, that’s fine. Many of them are good people and make great neighbors and friends. However, they need to carry a full share of Canadian taxes. If there is some dumb ass treaty that prevents this, then its time to tear it up.

#86 not 1st on 04.19.17 at 10:36 pm

DELETED

#87 Freedom First on 04.19.17 at 10:45 pm

Garth, both the title and photo for today speak the truth.

Reminds me just how great it is being me.

#1
Freedom First
Master of Freedomonics.

#88 isuckless on 04.19.17 at 10:50 pm

Regarding taxing stupid:
I would make voting mandatory first
Second, I will make vote public, i.e. We will know for whom you vote
Third and the most important, i would tax everyone who voted for the election winner
That is your tax on stupid

#89 Deplorable communications on 04.19.17 at 10:50 pm

#81 Smoking Man on 04.19.17 at 10:20 pm

M57ShlongBranch with a malfunctioning lower smiley face alter ego.

I’m a writer now, don’t matter that book sales suck.

Let that one sink in.

Priorities.

https://www.youtube.com/watch?v=x7bIbVlIqEc

,,

Good job you’re moving to new york to work for swiss banks….

#90 BMC on 04.19.17 at 10:54 pm

The housing price boom is worldwide, especially so in Western nations, and according to these well educated researchers who in back 2011 warned the implementation of U.N. Agenda 21 and other “smart growth” policies would lead to price bubbles in real estate, and if you read their report, which I have linked you will see that much of what they said has occured.

When social engineers get their way, we all suffer the unintended (or intended) consequences, we need to advocate for smaller governments, how long are we going to standby allowing nanny states to continue trying to fix their own mistakes by stealing our wealth and freedoms

https://www.domain.com.au/news/sydney-median-house-price-hits-115-million-buying-becoming-out-of-the-question-20170419-gvmnp8/

http://origin.heritage.org/research/reports/2011/12/focus-on-agenda-21-should-not-divert-attention-from-homegrown-anti-growth-policies

#91 meslippery on 04.19.17 at 10:56 pm

#79 Lee
#76 Meslippery,

He was talking about lawyers.
———————-
Lawyers take on a house sale peanuts not 6%

#92 Nonplused on 04.19.17 at 11:13 pm

Well, given that photo I can’t see why some of us are still arguing about gay marriage.

#93 Economystical on 04.19.17 at 11:37 pm

None of these changes are designed to reduce house prices Garth, only taxes. Economystical theory says tax rates can be unlimited, but psychology teaches us they must be implemented in ways so that people think they “are for their own good”. I’ve used the Carbon tax as an example countless times, or the GSCT as I like to call it. The science behind limiting CO2 from the atmosphere isn’t relevant to the equation because the tax does no such thing, but how do you impose a $1000 flat tax on the average Canadian household without the fear? You can’t, there would be riots in the street.

Now, classical, outdated economics would tell us that people don’t leave their property empty unless there is an economic incentive to do so. Maybe they need the house or apartment part time for work or leisure? Maybe they are renovating it? You know, the classic excuses. But, by pointing to the partly vacant house, we can convince the majority of voters that an additional tax is “for their own good”. Never mind that they will be paying the same tax if they ever inherit a cabin. People don’t think that far out nor should they.

They say that in government you should never let a good crisis go to waste, and never was a more ecomomystical principle expressed so simply. As the original carbon taxes in BC paved the way for carbon taxes even in Alberta of all places, so the housing bubbles in Vancouver and Toronto must be used to push through up to 4 new kinds of taxes on houses all over the nation.

Where will the money come from for people to pay all these new taxes? Outdated thinking again. The tail does not steer the horse. Economystics teaches that wherever the taxes lead the money will follow.

So the strategy is simple. Impose new taxes in response to the imagined crisis and make them permanent. After all you can’t take the new taxes away or we could risk another bubble. It’s for your own good.

Look at the beauty of it. First, everyone pays income taxes on the money they use to buy the house. They also pay property taxes and the bank pays income taxes on the mortgage, plus GST on new home purchases. So we already had 4 levels of taxation on houses. But now, with land transfer taxes, capital gains taxes, empty residence taxes, and foreign buyers taxes, the government can literally print money as long as houses keep going up in price, which they will.

Why will they keep going up? People have no choice. That’s where they get the money to pay all the taxes. Of course low interest rates help, but now we are also introducing rent controls to help out. It’s simply amazing that people have such short memories, as rent controls have been proven time and time again to reduce supply in the rental market, but again “for your won good” works so well it’s silly. As the rental market withers and dies due to lack of supply and many people simply cannot get a rental unit, what do they have to do? Of course! They have to buy.

It’s so simple it’s brilliant.

#94 paulo on 04.19.17 at 11:52 pm

Curious about the timing of announcing major regulatory changes one week before the provincial budget is tabled
the normal venue for such announcements/changes
could it be a case of the first of 2 boots being dropped or
a case of the politicos judging the fallout from the first boot to drop in order to haste some changes,before dropping the second one.

#95 Vancouver Pre Sale Condo Ponzi Scheme on 04.19.17 at 11:59 pm

It will be interesting to see if the Ontario government addresses the loopholes for pre-sale condos. These pre-construction sales are exempt from the 15% foreign buyers tax in BC because nothing is registered at land titles until the building is completed and has received its occupancy permit.

Steve Saretsky is a local Vancouver realtor that calls it like it is, and actually speaks the truth. This blog post details not just the foreign buyer tax loophole but the fact that most of these foreign buyers never pay capital gains tax because they are just flipping the sales contract.

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

Crooked Christy was looking out for her large real estate donor friends, such as the Condo King of Vancouver Bob Rennie, and exempted pre-sales from the prohibition on flipping which makes all of this possible.

Now all these new builds are sold overseas and then flipped to locals at higher prices. With such a corrupt system filled with loopholes, more supply will never solve the housing affordability issue.

Echoing the sentiments of #15 AK, why is it that flipping pieces of paper called stocks and bonds is so highly regulated and tracked for taxation yet the government turns a blind eye when it comes to regulating the flipping of pre-construction supply. It seems to me that various levels of government are working for the benefit of foreign investors as opposed to the local population that actually votes and pays the bills through taxes.

#96 Jane24 on 04.20.17 at 12:20 am

The fat lady is singing. After 30 happy years my sister is racing to stage her Yonge and Yorkmills home in TO to cash in big. I told her not to bother with the staging but to list it today. This is her retirement pot so hope that she gets in under the wire.

#97 Lee on 04.20.17 at 12:25 am

#91 meslippery,

You don’t have a sense of humour do you? I’m going to bed now.

#98 jas on 04.20.17 at 12:41 am

Garth,
those who have the power to take action so as to bring RE prices down to sensible levels, which world do they live in? Why the heck can’t they TAKE ACTION NOW. NOW, NOW.
The only one thing required to stop this nonsense is to RAISE THE INTEREST RATE, NOW.
I own a home but I am so frustrated by the inaction of those stupids in power. Oh, I’m just sick of these idiots. Folks, kick them out at the next opportunity, at whichever level of govt. they are sitting; kick them out.

#99 Tudval on 04.20.17 at 12:43 am

I have no idea why so many on this blog would welcome a tax on stupid. Sounds masochistic.

#100 Fortune500 on 04.20.17 at 12:55 am

None of this will result in much. Assuming they actually go ahead with things and institute them effectively (very unlikely for the Libs in Ontario), we will only see minor effects.

The hard truth is the only two things that would fundamentally change the market would be a capital gains tax on all homes, or a significant interest rate increase across the board. Since no level of government has the nads (can I say nads?) to do this, then we are just nibbling around the edges for the sake of votes.

#101 Victor V on 04.20.17 at 1:14 am

JUST IN: Sources say a 15 per cent tax on non-residents is at the top of Ontario’s list of sweeping measures to deal with its overheated Toronto housing market.

http://www.financialpost.com/m/wp/personal-finance/mortgages-real-estate/blog.html?b=business.financialpost.com/personal-finance/mortgages-real-estate/tax-on-non-canadian-residents-buying-ontario-housing-set-to-be-unveiled-as-early-as-thursday

#102 Rent Control in Ontario on 04.20.17 at 1:19 am

For buildings over 25 years old , rent can only be raised a max of 2.5% and the increase rate is set in June for the following year. However landlords can file for an above guidline rent increase for an additional 3% every single year ( in addition to the regular increase) if they have done repairs or upgrades to the building not deemed as ordinary maintenance. We’ve had 4 above guidline rent increases in the last 8 years at our building ( owned by a major reit). If you have ever been to one of the hearings, the tenants have no chance. And believe me most of the repairs are regular maintenance. I wish the Ontario government would look into these Kangaroo Courts .

#103 The Smaller Fool on 04.20.17 at 1:48 am

This could backfire spectacularly. Look for sfd listings in Toronto to dry up even more as potential sellers understand that condos and surrounding areas will be hit much more. That’s where the speculation and foreign investors are. In Toronto there’s very little of that due to already higher transaction costs. You ’cash in’ your Toronto sfd, you have to move out of the province if you don;t want to risk a big hit on your new investment.

#104 flop...thank you & 416 land on 04.20.17 at 4:01 am

I just wanted to thank you for those pink pollen posts of yours, very informative about YVR SFH price drops.

Keep them coming please. May be returning in future from EU to YVR and want to know how painful buying will end up being. Again, thanks.
_______________________________

Again, Garth called it on the 416 land RE market.

Having owned a long time ago in 416 land, I remember that when the Gov’t brings the hammer down on RE (then it was interest rates), it all comes to a painful and excruciating halt for speculators, flippers et. al. (mid/late 80s, Keele & Bloor, townhome, a few steps from High Park).

I don’t expect this time will be any different as in:

history repeats.

The methods by which a RE market cools may change, but the large price drops that happen afterwards never change (a.k.a., same dung, different pile).

#105 Yuus bin Haad on 04.20.17 at 5:24 am

Like I said: Teletubbies.

#106 earthboundmisfit on 04.20.17 at 6:44 am

We have abundant taxes on the stupid. They’re call lotteries.

#107 I'm stupid on 04.20.17 at 6:54 am

The problem with markets is that govts meddle in them. This has an effect on investors that encourages reckless behaviour. If you believe you’ll be saved by govt’s changing the rules to support prices it changes the perceived risk.

When the US housing market collapsed, it never fully corrected because of unpresidented stimulus. Corrections are healthy, they promote prudent behaviour. If govt’s prevent corrections from occurring reckless behaviour will be the norm.

There is absolutely no reason interest rates should be below the rate of inflation. Canada supported its market by collapsing interest rates, this let people take on unprecedented levels of debt. We were sheltered from the pain felt by the rest of the world because of debt. Now we have a heavily indebted population. If Canada goes into a recession the correction will be far worst then allowing it to correct in 2008-9.

#108 Ace Goodheart on 04.20.17 at 6:57 am

“The market will croak on its own. Yes, that’s what they fear the most.”

Well those involved in the condo construction trade better hope that the new “rent controls” will have an exclusion for single unit, amateur landlord condo rentals. Otherwise the Provincial Government has just knee capped the Toronto condo market by making it into basically a large social housing project.

#109 Retired Buddah on 04.20.17 at 7:07 am

#64 45north on 04.19.17 at 9:27 pm

“From what I hear Souza is saying there will be no crash and the housing market will continue to go up. But in a nice way.”
——————————————————————–

Ohhhhh….dat’s a niiiiiiice!

https://www.google.ca/url?sa=i&rct=j&q=&esrc=s&source=images&cd=&ved=0ahUKEwjx4cyF8rLTAhVLxYMKHc-hBjsQjRwIBw&url=https%3A%2F%2Fwww.spreadshirt.com%2Fnice%2Blover%2Bt-shirts&psig=AFQjCNEcQAQFdi9yRu1x8cITyHhR-FkJQQ&ust=1492772677111267

#110 Retired Buddah on 04.20.17 at 7:10 am

See it, and WEEP!

https://www.google.ca/url?sa=i&rct=j&q=&esrc=s&source=images&cd=&ved=0ahUKEwj2047w8rLTAhXm24MKHc-6AlYQjRwIBw&url=http%3A%2F%2Fwww.huffingtonpost.ca%2F2014%2F10%2F27%2Fkathleen-wynne-john-tory-hallelujah_n_6058598.html&psig=AFQjCNFpTUv9LbRU7Cl6IESr5xNvi9zvww&ust=1492772944316641

#111 maxx on 04.20.17 at 7:19 am

#23 Momo on 04.19.17 at 7:14 pm

“I’d like to hear Garth’s take on where domestic speculator investment goes if withdrawn from real estate. TSX?”

Paying down consumer debt would be an intelligent first step.
A large whack of speckers only exist because interest rates are idiotically low.
Low rates have been Greenspan groupies’ attempts to progressively squeeze the sponge and get every last dime in existence into either re or the markets.
If rates, regulation and transparency hadn’t been allowed to corrode as they have, we’d be living in a vastly better economic environment. Money would still be worth something, our currency would still stack up respectably and re wouldn’t have gone steroidal.
In the face of this intransigent economic mess, it could be decades before our economy is no longer based largely upon FIRE.
Much, if not all of this new prescriptive fanfare is doomed to fail because it is essentially a band-aid solution to a severed artery. Fundamentals are not being addressed.
Incredibly, tptb persist in the fantasy of preserving what’s left of the economic cake and eating it too.
Trouble is, the cake has had the icing licked off of it (hollowed-out economy) and a few corners are missing (structural weakness increasing). Not much left to preserve.
Most actors in the real economy have been hog-tied by debt and the music has been slowing for over a decade.
I wouldn’t bet on these band-aid solutions working. They smack of the desperation of a big loser at a casino table.

#112 A Reply to #39 Ex-Cowtown on 04.20.17 at 7:28 am

“When the wheels fall off RE the TSX will suffer, same as in the U.S. Just be standing there with some dry powder to go on a buying spree, just like in 2009.”

My cannons will be blazing. Waiting patiently for the correction in both markets with braindead cash (35%).

#113 maxx on 04.20.17 at 7:39 am

#35 Ray Skunk on 04.19.17 at 7:35 pm

“…….prepared to perpetuate the image of poverty to continue saving like a fiend.”

Like your style R.S.
Given that most businesses are hell-bent on squeezing the life out of consumers, wherever you go, whatever you buy, let ’em think you NEED that discount.

#114 pBrasseur on 04.20.17 at 7:51 am

The degree of speculation in the system is crowding out families who are trying to buy into the market and establish their own roots

That may be true, but fixing that implies a substantial price reduction that would inevitably trigger an avalanches of listings, a rush for the exit.

The market is doomed, no matter what. And it’s not just Toronto.

#115 Sean on 04.20.17 at 8:03 am

Government is always the answer! As in, government is always the problem…

Shut down CMHC for starters, but equally important make sure banks clearly understand there will be no bailouts…. Never going happen, I know! It is this one two punch of government backed moral hazard that is entirely to blame.

#116 Gramps on 04.20.17 at 8:03 am

Saddest picture I’ve seen here.
My heart goes out to that little girl.
She has a lot of adults to try to please.

#117 M on 04.20.17 at 8:24 am

In the hearts and minds of tza masses HOPIUM was legalized long time ago

#118 jess on 04.20.17 at 8:24 am

“round tripping”
SEC Charges Marijuana-Related Company and Executives With Touting Bogus Revenues

FOR IMMEDIATE RELEASE
2017-62

Washington D.C., March 9, 2017—

The Securities and Exchange Commission today charged a California-based company and its founder with falsely touting “record” revenue numbers to investors and claiming to be a leader in the marijuana industry while some of its earnings came from sham transactions with a secret affiliate

“As alleged in our complaint, investors were misled into believing that Medbox was a leader in the burgeoning marijuana industry when the company was just round-tripping money from illegal stock sales to boost revenue,” said Michele Wein Layne, Director of the SEC’s Los Angeles Regional Office.

#119 A Reply to #107 stupid on 04.20.17 at 8:24 am

“unprecedented (not unpresidented) stimulus….”

#120 Cici on 04.20.17 at 8:31 am

#5 Tim

Uhh, because it doesn’t adequately or sustainably address the real RE/economic issues, dangers and risks at hand?

#121 Cici on 04.20.17 at 8:35 am

#6 commonsense

Look at the larger picture…they already are taxing stupid, and way beyond. The smart money’s already left town or is seeking out new horizons.

#122 Jim Bentein on 04.20.17 at 8:41 am

I like Garth’s idea of a “tax on stupid”. You could wipe out the Ontario government’s debt if you did that.
Here’s my advise for the Boomers, who are sitting on $2 million fixer-uppers. Sell and move to Mexico. The weather is a lot better and it’s a lot cheaper. My wife and I did that (unfortunately, 17 years ago, before the Great Canadian Housing Bubble). But, although we didn’t sell our place in Calgary for $2 million, we’re still fine. Rents in most of the popular expat areas here are one-tenth of what they are in most of Canada, as are housing prices. Oh, and you can even have a Shaw TV satellite, so you can watch the Stanley Cup playoffs from here.

#123 Keep email MP'S on 04.20.17 at 9:06 am

Looks like we have HAM tax and rent contols to start. Keep e-mailing these MP as I have. These shysters (mortgage brokera and realtors ) are thr scum of the earth and destoried vanada.

#124 Sonny on 04.20.17 at 9:16 am

Foreign buyers tax, expanded rent control coming to Ontario

CBC News has learned new measures will include 15% ‘non-resident speculation tax’

http://www.cbc.ca/news/canada/toronto/kathleen-wynne-housing-market-home-prices-rent-control-1.4076283

#125 Ret on 04.20.17 at 9:18 am

Throw another billion on the fire. Don’t worry, there’s a lot more from where that came from.

Whenever the Ontario Liberals touch a file, another billion gets added to the debt. Expect complex, expensive and ineffective new initiatives from Ontario Liberals for what is a federal problem.

Raising interest rates and lowering CHMC percentage of mortgage coverage by the feds would be a much more meaningful start. Simple and effective but the feds won’t touch either. Sousa has been played by Morneau, Poloz and T2 to be the front man on this issue for Ontario.

The main issue is being distorted with rent controls, foreign buyers, vacant houses, affordable housing etc. which are all separate issues. These are John Tory’s Toronto problems. Purposely confound and confuse the electorate with side bar issues. John Tory has played Sousa too!

#126 New rules governing realtors? on 04.20.17 at 9:20 am

I hope thats true. They are scum
http://www.cbc.ca/beta/news/canada/toronto/wynne-housing-market-1.4077094

#127 traderJim on 04.20.17 at 9:38 am

#11 Smartalox and ShawnG

Oh yes I still recall the cake scene in Under Siege. Erika Eleniak. Yup, that’ll do it.

#128 Bye bye RE :-) on 04.20.17 at 9:40 am

15% speculation tax , rent control (bye bye condo bubble 50% losses coming) :-) , tax on vacant home? , no more paper flipping (ouch). New rules for realtors? (Long over due for the shysters) . More still needs to be done like scraping CMHC.

#129 Pepito on 04.20.17 at 9:43 am

#108 Ace Goodheart on 04.20.17 at 6:57 am

“Otherwise the Provincial Government has just knee capped the Toronto condo market by making it into basically a large social housing project.”

You make social housing sound like a bad thing. It’s not.

In Spain, where we now live, ALL rentals are subject to rent controls, period. And nobody calls it social housing. Social housing rents are tied to income, rent controls are not. You folks need to get out of your wild west, capitalist mentality and consider the effects on Canadian society as whole.

#130 Shysters in the RE industry crying on 04.20.17 at 9:50 am

Measures a good
http://www.cbc.ca/beta/news/canada/toronto/kathleen-wynne-housing-market-home-prices-rent-control-1.4076283#commentwrapper

#131 SquareNinja on 04.20.17 at 9:51 am

The worst idea of all would be reducing the Greenbelt. Bad, bad, bad idea. It’s short-sighted and it’s taking away from our childrens’ future so that their parents today can more easily own a non-condo property?!?!

#132 traderJim on 04.20.17 at 9:53 am

rent controls….sigh. So many studies (not to mention basic economics) show them to be disastrous, for renters, as the clear and immediate result is fewer rental units built, and existing rental units are sold or converted to owner occupied.

Just as minimum wages hurt those they are supposed to help, by making it unprofitable to hire an unskilled worker for too high a wage. Not to mention robots don’t spend all day on their cellphones.

But the public must be fed their pablum I suppose.

#133 ummm on 04.20.17 at 9:55 am

Hammered! ON nails flips, non-locals:

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

Hardly! 15% loss can be made up in 6 months max.

#134 Livin Large on 04.20.17 at 10:00 am

This may be an assine question but here goes…

Why are all the governmental moves to control the RE bubble directed towards just the buy and seller when the agents are fueling and driving the feeding frenzy? Why no legislated changes to the agent’s fiduciary duties?

Sure, the seller has a legitimate right to get as much as the market will bear when they sell their property but lets face it, agents have manipulated buyers AND sellers for ages.

Civil litigation lawyers are compellered to present a litigant with a settlement offer as soon as is reasonably possible or face financial sanctions, so why do we permit agents to decide when to accept and present offers of purchase? That, IMO, is simple market manipulation to create a feeding frenzy and collectively disadvantage buyers.

And while we’re at it, why not ammend the rules to cover buyer’s markets as well? Far too often I have watched as agents grossly over represent an offering price in order to get a listing knowing full well they can go back a few weeks later and push a seller to drop their asking price tens of 1000s of $$ when there aren’t any offers. The agents know full well that their commisions are only a small % of those tens of 1,000s in reductions and it is little sweat for them.

If we have market manipulation (and we do) then let’s at least rein in the active manipulators along with the buyers and sellers.

#135 Ole Doberman on 04.20.17 at 10:03 am

Gartho was does this all mean for Calgary on spill over affects?

Start drilling. — Garth

#136 zee on 04.20.17 at 10:07 am

Ok, Garth, waiting for your analysis on these new measures.
I looked at it and I don’t see how this will do anything significant to bring price down. Few months of going no where and then back up.

#137 Livin Large on 04.20.17 at 10:08 am

If I had my druthers, I’d like to see rule changes to allow sellers the option to dump any agent if they come back within 60 days and advise a decrease in asking price. Just the option to dump without penalty, not any requirement to.

For some odd reason, sellers seem to have unshakable faith that agents know more about the market dynamics than they do regardless of their experience in the industry.

Stopping a feeding frenzy isn’t always easy once it has begun but removing the food source does help.

#138 ummm on 04.20.17 at 10:16 am

Ok, Garth, waiting for your analysis on these new measures.
I looked at it and I don’t see how this will do anything significant to bring price down. Few months of going no where and then back up.

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

It will do absolutely nothing! just finished watching the Live news conference and they even said…

“The measures were not designed to cool price but instead reduce the frenzy as everyones retirement plan and financial well being depend on high housing prices”

So there you have it…ONLY A RECESSION WILL COOL IT DOWN!

#139 Tudval on 04.20.17 at 10:41 am

The foreign buyers tax is so watered down as it will have no impact. I imagine those 2 or 3 buyers who do not qualify for an exemption will just buy something smaller and pay the tax. To the extent that they were investing in condos to rent out, they’ll be gone, for sure, so in due time you’ll have rent control on nothing. Expect fewer housing starts (condos). If this does cause a recession in the end, perhaps then the sfd market might feel some impact.

#140 Tony on 04.20.17 at 10:42 am

Starting tomorrow your million dollar home in Ontario will be worth exactly 10 percent less or $900,000. Ouch! The power of the foreigners’ tax.

#141 Tony on 04.20.17 at 10:44 am

Re: #135 Ole Doberman on 04.20.17 at 10:03 am

Business as usual in Calgary home prices will keep dropping and foreclosures will keep rising. The Albertans seem to all have gone to Saskatchewan.

#142 Ronaldo on 04.20.17 at 10:45 am

#132 traderJim on 04.20.17 at 9:53 am

rent controls….sigh. So many studies (not to mention basic economics) show them to be disastrous, for renters, as the clear and immediate result is fewer rental units built, and existing rental units are sold or converted to owner occupied.
————————————————————-
Absolutely correct Jim. Same as happened back in the early 70’s under the NDP and rent controls. Developers stopped building rental units and converted existing units to condos. Result shortage of rental units so the government had to go into the business of building which is why we have BCHMC. That actually turned out well because it provides housing for a lot of people on limited incomes. Maybe this is what needs to happen again.

#143 X on 04.20.17 at 10:48 am

Meh….will see what effects the housing measures brought in have on the market. Doubtful much will change as long as we have low rates…still very inexpensive to carry a mortgage.

#144 Smoking Man on 04.20.17 at 10:49 am

No effect on SFH. Condos different story. The rent control JUST KILLED THAT MARKET.

The anticipation on what Wynne would do was much worce than what she did.

Just politics.

#145 Ontario's Fair Housing Plan on 04.20.17 at 10:53 am

“Ontario is taking action to make housing more affordable for homebuyers and renters by introducing the Fair Housing Plan. This set of 16 comprehensive measures would help more people find an affordable place to call home, while bringing stability to the real estate market and protecting the investment of homeowners.”

https://news.ontario.ca/mof/en/2017/04/ontarios-fair-housing-plan.html

#146 TurnerNation on 04.20.17 at 10:59 am

I’ll predict it again: That Home Crapital corp. will go bust.

Where there’s smoke there’s ire.

And what fate of Genworthless? MIC.TO

#147 BoC on 04.20.17 at 11:03 am

from a buddy:

Q: Is it not obvious, if all of these measures and band aids are required in various places across the country, that this is not a localized problem requiring a localized, provincial/municipal solution? How logically obvious is it that this is evidently a national issue? Just that modicum of logic, were it applied, would have media surrounding the BoC building instead of dancing to the daily officially-provided demonstration. Not what they’re paid for I guess.

#148 TurnerNation on 04.20.17 at 11:14 am

In Kanada we have choices alright…Timmys or SBUX.
AirCanada or Worstjet. Rogers or Bell. Loblaws or Sobeys. Feeling the freedom?

Had to check was it Apr 1st? No “420” day today…close enough.

“WestJet to launch ‘ultra low-cost’ no-frills carrier
Service to take off late this year with 10 Boeing 737-800 aircraft.

“The new service should take off late this year with a startup fleet of 10 high-density Boeing 737-800s, ”

– Sardines.

#149 westcdn on 04.20.17 at 11:14 am

Spring is arriving in Calgary. The soccer fields behind my house are full. I now have a flicker pounding away my furnace vent trying to secure a mate. I like the critters so let him pound away and hope for his success. My jackrabbits are back eating my plants – bless their little souls.

I have been buying glasses online from Clearly Canadian like some women buy shoes. I order different prescriptions for different events such as reading or driving. I have to say I am pleased with the results and cost. Progressive glasses simply did not work for me and their cost was huge – so long. I took 1.5 power off the last pair I ordered and I like the results. These are good general purpose.

It is good to see Smoking Man acting sanely if that’s him posting recently. I have always appreciated an opinion different from mine but I will fight for my ideals. Strangely enough, I would share a foxhole with him.

Oh, I the contrarian is back on the plus side.

#150 BoC on 04.20.17 at 11:17 am

Prediction: If rates stay at or near zero- fascination stories buzzing around in the next couple years referencing $1mm+ houses in Prince Edward Island, Medicine Hat and Kelowna.

#151 traderJim on 04.20.17 at 11:19 am

Up here in Muskoka I see literally hundreds of vacant properties, only time anyone is there is for the months of July and August. Should I start reporting them?

#152 traderJim on 04.20.17 at 11:23 am

Pause in the market as buyers wait to see the effects, then onward and upward once again.

#153 Sir James on 04.20.17 at 11:28 am

No doubt Wynne will use this ‘crisis’ as an opportunity to jam Agenda 21 down the Public throat. Selling an older home will become just as difficult or impossible as selling an old car, for “Carbon Footprint’ reasons.

#154 traderJim on 04.20.17 at 11:28 am

The other obvious result of rent controls is that landlords stop doing maintenance.

Why would you improve a property that has a cap on income but no cap on expenses?

Capped rentals become so in demand over time that landlords do not have to do anything to keep tenants, they in fact look for ways to get tenants out, and zero maintenance is one of the only ways to do it.

Enjoy the ‘win’ renters!

#155 Stan Broock on 04.20.17 at 11:29 am

It does not matter what they are going to do from now on.

The economy is dead, that is crystal clear.

The barn is burned and the horses have left. Too late to slam the door.

Chao.

#156 SilverSon on 04.20.17 at 11:30 am

#54 TurnerNation,

Sadly yes, I know of a few REITs each with anywhere from 15-50 MUR buildings in southern Ontario so this rent control stuff could have an impact. I also see that these REITs have been putting more and more moisters into significant roles within asset management, some with ability to sign contracts in the millions of dollars, allowing them to spend money on things they know nothing about. Unfortunately many of the businesses that sell products and services to these REITs are recognizing the lack of wisdom and experience at the helm so their sales vultures are trying to sell them multi-million dollar upgrades claiming that they will improve asset value but actually won’t. Of course rent control will be more of their issue right at the moment, but my concern is that another 5 years down the road they will be faced with the realization that the hundreds of millions they sank into their assets actually have no ROI. I wouldn’t eject REITs from my portfolio just yet, but it does look like they have some pain on the horizon.

#157 Whinepegger on 04.20.17 at 11:30 am

All these measures Kathleen Wynne is enacting and still no Zillow-like info. Kathleen Lose.

#158 SilverSon on 04.20.17 at 11:37 am

#151 TraderJim,

I see them too. But maybe they think if someone can afford a Muskoka property and only use it 2 months a year (in addition to a principle residence) maybe they think you can afford a vacancy tax on said Muskoka property. But I also recall reading somewhere that the vacant house tax would only apply within a certain km radius from the downtown core – something considered commutable. Muskoka being some 200km+ from the downtown core is probably not considered commutable.

#159 marketpundit on 04.20.17 at 11:43 am

All recent and soon to be (assignment holders) condo “investors” have just became, or rather forced into, “Landlords” with guaranteed negative cash flows. And if they dare to sell, the gov. will be knocking on their doors demanding their “fair” share of that pie. Very interesting in deed.

#160 Out Rageous on 04.20.17 at 11:54 am

So now the bubble will just move on to the next province, say Quebec. Why aren’t these measures enacted federally?

#161 Victor V on 04.20.17 at 11:59 am

HCG share price falling off a cliff. Sometimes subprime is a crime?

http://business.financialpost.com/investing/trading-desk/home-capital-group-inc-shares-plunge-as-reputation-and-funding-risks-rise

#162 Ogopogo on 04.20.17 at 12:05 pm

Great news! Home Capital Group, Canada’s largest subprime (a.k.a. “alternative”) mortgage lender is in deep trouble for misleading the Canadian public.

The stock (HCG.TO) is down -19.85% at the time of writing. I am actually laughing uncontrollably at this collapse. These vermin deserve to go down for contributing to our toxic, grotesque housing bubble.

#163 Lee on 04.20.17 at 12:09 pm

Folks,

If your goal in life is to own a sfh either as an investment or otherwise in Toronto, waiting is for fools. Most houses still have 7 to 10 couples leaving a bidding war crying. That demand is going to take a long time to satisfy. It is also pretty clear that JT will increase immigration to about 350,000 per year, mostly refugees or from countries that produce a lot of refugees. That is about 100,000 more than typical. That is at least 30,000 family units, probably half of which will end up being required in Toronto or the GTA each year. I don’t believe Toronto builds even 10,000 rental units a year. So who cares how many wealthy foreigners come here. Landlord’s don’t care who rents their properties. This demand has to be met. As foreigners will likely reside predominantly in condos and multi-unit rentals (hence all the changes to the rental rules and tax breaks for builders to build rental buildings), this is going to make demand for sfhs insatiable. We will be looking at 3M for an average sfh in Toronto by 2019. Then a 20% crash will take us back to $2.4M for a while. Great time to jump in.

#164 Stock picker on 04.20.17 at 12:13 pm

But………not a peep about the “emergency rates” that keep the whole pyramid scam afloat? Verily…..”tis a head scratcher.

And…..what about the foreign student exemption……lol…..as we see in Vancouver, proxy owners/students have a one percent ownership in name only….while a money launderer owns the 99% stake.

#165 Doug in London on 04.20.17 at 12:23 pm

Yes, it looks like we have rent controls and new taxes on vacant properties. Whether you agree with it or not, you shouldn’t be surprised to see it happening. The BC government brought in extra real estate taxes last year, the Ontario Government is running big deficits and on a frantic scavenger hunt for new sources of tax revenue, and governments at all levels are under pressure to do something about runaway prices of property to buy or rent. You should have seen it coming.

#166 GTAHouseHunter on 04.20.17 at 12:32 pm

Garth, could be please elaborate on the clamp down on the Assignment Clause.

Many realtors on radio shows have been mentioning the use of this strategy to advertise and help people make a quick 30k to 40k before the property is completed or closed.

I went to the Sales Office of a prominent builder in GTA: Mississauga and the Salesperson says we are interested to sell to investors only as they are buying in bulk…. 3 to 4 units and in some cases 6 units.
Seems she was talking as if they are buying a box of assorted Timbits rather than buying Condo Units.

Also a slew of RE Agents have seemed to crop up who introduce them as VIP Agents of these Condo builders and touting the fact that they have special prices or other leverages (Free Upgrades, Lockers etc).
Which incidentally is true. The Builder charges for such upgrades but when routed through a realtor it is waived off.

And they seem to be happy to do only these bulk deals.
There is hardly any end-user at these places just a lot of these new crop of VIP RE Agents who are perpetrating this speculation.

Will the clamp down on Assignment Clause flush out this practice.

#167 Tony on 04.20.17 at 12:45 pm

The housing crash if there is one will obviously start with Toronto condos and move outwards into the satellite cities. Toronto condos just instantly fell twenty five percent as of tomorrow.

#168 Tudval on 04.20.17 at 12:52 pm

#151 traderJim Please do, somebody may be looking to grow a family and set up roots there. Keep up the good work, the state depends on good citizens like you.

#169 Tony on 04.20.17 at 12:56 pm

Re: #143 X on 04.20.17 at 10:48 am

My guess is we’ll see about 10,000 Toronto condos list in the next week and they’ll fall about 33 percent in price by the end of this year.

#170 Tudval on 04.20.17 at 12:57 pm

#147 BoC Our Prime Minister expressed hope that foreign investors will go to other places not just Vancouver and Toronto, so I guess the plan is to drive the heard to those unspecified places – we can only guess which ones… Now we have to wait and see if the sheep comply or look for greener pastures south of the border. Over there, they are met with flowers and red carpets, they like money so much… capitalist pigs!

#171 Ole Doberman on 04.20.17 at 1:04 pm

subprime lender Home Capital taking another beating today. Armageddon is here for RE.

#172 NoName on 04.20.17 at 1:12 pm

#148 TurnerNation on 04.20.17 at 11:14 am

In Kanada we have choices alright…Timmys or SBUX.
AirCanada or Worstjet. Rogers or Bell. Loblaws or Sobeys. Feeling the freedom?

Had to check was it Apr 1st? No “420” day today…close enough.

“WestJet to launch ‘ultra low-cost’ no-frills carrier
Service to take off late this year with 10 Boeing 737-800 aircraft.

“The new service should take off late this year with a startup fleet of 10 high-density Boeing 737-800s, ”

– Sardines.

—-

I heard this on am radio while driving home from work, some dude was spinning it like its a good thing, aka will be cheaper “a la carte” service… lol

Watch !!!

http://bit.ly/2oUyAxH

#173 Realtors in an ALL OUT PANIC on 04.20.17 at 1:14 pm

If these measures will do nothing you wouldnt be talking or trying to convince others. HOME CAPITAL will go bankrupt as they approved subprime mortages CMHC is probably 10X worse. Write to government to shut down CMHC.

#174 Tudval on 04.20.17 at 1:15 pm

#167 Tony There are plenty of condos outside Toronto.. they will fall first. Since sfd in the GTA will fare the best, expect fewer people to downsize from there, unless they really don’t care about taking a haircut on their new purchase. If we slip into a recession, of course, everything will suffer, but the newly burgeoning areas on the outskirts will suffer the brunt of it. Will be a good lesson for those ‘Toronto refugees’ on what constitutes a sound investment.

#175 Marketpundit on 04.20.17 at 1:25 pm

Check Home Capital (HCG.TO) share price action: -20% today alone. Big Short at play?

p.s. I know many of you already have, but still worth mentioning one more time.

#176 Bat Flipper on 04.20.17 at 1:33 pm

Condo Collapse Incoming! Single detached, you will be ok this time. Condos can’t survive this blow though. Realtors can expect their pay to decrease quite a bit with the rule changes. No more phantom bids and making people guess what to offer. Watch how many deals collapse now.

#177 Vit on 04.20.17 at 1:35 pm

So its looks like most of the changes going to be for a condo market . Detached homes will keep moving up up up up ….

#178 Victor V on 04.20.17 at 1:35 pm

‘People are going to get hurt’: Fairfax’s Prem Watsa says Toronto real estate bubble will burst

http://www.financialpost.com/m/wp/news/blog.html?b=business.financialpost.com/personal-finance/mortgages-real-estate/people-are-going-to-get-hurt-fairfaxs-prem-watsa-says-toronto-real-estate-bubble-will-burst&pubdate=2017-04-20

#179 jess on 04.20.17 at 1:39 pm

Andrews link:nyt

“I would like citizens to be able to use this to form intelligent opinions,” Mr. Ballmer said.
==============================
To improve upon something, it is useful to be able to measure it,”

…”The best way to provide the media, lawmakers and the public the information they need to make informed decisions about our nation’s tax code would be to require companies to publicly disclose key financial data on a country-by-country basis. Ideally, this would include the disclosure of total revenues, profit, income tax paid, tax cash expense, stated capital, accumulated earnings, number of employees on a full-time basis, and book value of tangible assets on a country-by-country basis. For many companies that will already have to file country-by-country reports to the Internal Revenue Service (IRS) in the coming years, providing this information in financial statements would represent little to no additional cost.

At a minimum, we need a straightforward statement of what they paid in federal taxes on their U.S. profits, and the reasons why those taxes differed from the statutory 35 percent corporate tax rate. This information would be a major help, not only to analysts but also to policymakers.

http://itep.org/itep_reports/2017/03/the-35-percent-corporate-tax-myth.php#.WNp7GhiZPow
https://www.bettermarkets.com/

#180 Vit on 04.20.17 at 1:51 pm

#54 Non of this will change the ability to borrow $$$$$$ from the banks and buy sky high RE.

#181 Blacksheep on 04.20.17 at 1:52 pm

Wow….The big smoke suddenly sounds very hostile towards parties interested in RE investment…..

Well come on out to the wild West Coast, where the rules are lax and the premier is easy. She takes cash donations and is willing to do almost anything to ‘service’ the RE industry.

To say I’m happy that I re entered the RE market three years ago, when this blog was advising to sell, is an understatement of epic proportions.

Oh, just read, Globe and Mail says rates are falling….

This is all, just way to funny.

#182 Ole Doberman on 04.20.17 at 1:57 pm

looks like the Trumpinator is pissed at Canada – maybe wall coming here too?

http://www.bnn.ca/a-disgrace-trump-takes-fresh-aim-at-canada-s-dairy-lumber-energy-1.729557

#183 Ole Doberman on 04.20.17 at 1:58 pm

#171 Ole Doberman on 04.20.17 at 1:04 pm

subprime lender Home Capital taking another beating today. Armageddon is here for RE.
———————————————————–
Sliced through long term support at $20, next stop $7?

Fraud doesn’t pay in housing once the curtain is lifted.

#184 PaperBoy on 04.20.17 at 2:05 pm

EXTRA! EXTRA! READ ALL ABOUT IT!

FAT LADY SEEN SINGING IN MARKHAM, UNIONVILLE, THORNHILL and RICHMOND HILL.

#185 Tony on 04.20.17 at 2:23 pm

Re: #170 Tudval on 04.20.17 at 12:57 pm

After hitting all the coastal areas I’m guessing the Chinese will buy in Atlantic City, New Jersey next.

#186 TurnerNation on 04.20.17 at 2:25 pm

#131 SquareNinja how many children play outside?
At age 2 they are handed an Ipad.
Later on, TV & Netflix. Then social media. Smartphones in grade 6? Likely.

Outside. Phfft. Boomer idealism.

In my downtown commute 3/4s of people either are wearing earbuds (blocking our senses, human interaction) or glued to their phones.

Tear down that Greenbelt!

M41ON

#187 Tony on 04.20.17 at 2:29 pm

Re: #163 Lee on 04.20.17 at 12:09 pm

We’ve heard the same story for decades in other cities around the world. End result was house prices crashes in all those cities. Toronto is no different. Wait a week and see how many condos and townhouses are up for sale on mls. Then we’ll see if it spills over to the detached housing market.

#188 Rexx Rock on 04.20.17 at 2:30 pm

Its a cobination of unlimited immigration,low interest rates,goverment incentives,40 year mortgages and everything else.The goverments are flat broke.On par with Mexico and Venuzula.Give me a break do you really think Ontario will be able to manage over 360 billion dollar debt.Wait until SHF.It’ll make a great documentary in a few years!

#189 Braj on 04.20.17 at 2:35 pm

#162 Ogopogo on 04.20.17 at 12:05 pm
Great news! Home Capital Group, Canada’s largest subprime (a.k.a. “alternative”) mortgage lender is in deep trouble for misleading the Canadian public.

The stock (HCG.TO) is down -19.85% at the time of writing. I am actually laughing uncontrollably at this collapse. These vermin deserve to go down for contributing to our toxic, grotesque housing bubble

Was considering shorting these guys a month or two ago….shit. I don’t like to gamble much but damn.

#190 soost on 04.20.17 at 2:49 pm

Get ready for slums instead of low income housing interspersed with higher-income development.

The silly “I get to build it because he got to build it” mentality, that should have been remedied long ago has led to this.

#191 Leveraged SFH owners on 04.20.17 at 3:28 pm

Many so called home owners got fraudulent mortgages and or home loans HELOC From home capital. HELOC loans are going to be called in. HAPPY HOUSING CRASH EVERYONE

#192 HOME CAPITAL to call im HELOC loans on 04.20.17 at 3:32 pm

Can you sau housing CRASH! Happy Housing Crash Everyone! :-)

#193 Ole Doberman on 04.20.17 at 3:37 pm

“Long-time Home Capital critic and short-seller Marc Cohodes joins us as 10:10 a.m. ET. He tells Amber Kanwar and producer Ian Vandaelle that the company “is worth less than a ham sandwich”

http://www.bnn.ca/bnn-s-daily-chase-osc-singles-out-home-capital-as-canadian-housing-concerns-grow-1.729241

#194 Smoking Man on 04.20.17 at 3:43 pm

#173 Realtors in an ALL OUT PANIC on 04.20.17 at 1:14 pm
If these measures will do nothing you wouldnt be talking or trying to convince others. HOME CAPITAL will go bankrupt as they approved subprime mortages CMHC is probably 10X worse. Write to government to shut down CMHC.
……..

Welcome back laughingcon

guess your sister out in Milton made a killing on her house. She bought like 8 years ago. You should have listend to me then. And now. 416 SFH will still get higher prices this year.

New laws burned condo owners and spec flippers

#195 George on 04.20.17 at 3:46 pm

Where can I info what’s happening with Vancouver RE? After 15% tax was implemented it has disappeared from all media…

#196 Tony on 04.20.17 at 4:14 pm

Re: #189 Braj on 04.20.17 at 2:35 pm

You basically had almost nothing to lose if you had of shorted the stock a few days before the speech on housing then sold it before the housing speech. Many people I’m sure did just this, the same with the Canadian dollar being heavily shorted into the housing speech.

#197 Original dave on 04.20.17 at 4:26 pm

People saying only condos will crash have to be nuts. If condos drop 40% and sfh stay the same, people will just buy condos. Simple.

If broccoli goes down 40% and cauliflower increases in price we buy broccoli.

Condos will drop first (as in most corrections) and single family homes will feel it after. It’s simple economics

#198 Ronaldo on 04.20.17 at 4:39 pm

Maybe the hedge funds and the shorters were right after all. They must be smiling all the way to the bank right now. When this article was published the stock of Home Capital Group was at $31.55 Dec. 29/16 and now at around $17.70 down 44%. Good for them.

http://www.theglobeandmail.com/globe-investor/investment-ideas/us-hedge-funds-make-bets-against-canadas-home-capital-group/article33438764/

#199 Stan Broock on 04.20.17 at 4:53 pm

#187 Tony on 04.20.17 at 2:29 pm
Re: #163 Lee on 04.20.17 at 12:09 pm

We’ve heard the same story for decades in other cities around the world. End result was house prices crashes in all those cities. Toronto is no different. Wait a week and see how many condos and townhouses are up for sale on mls. Then we’ll see if it spills over to the detached housing market.

————————-
Oh, Yeah,

Toronto is much more different,

This is the biggest housing credit bubble in history with houses overpriced 4-5 times.

Just enjoy as it hits the fan,

#200 jess on 04.20.17 at 4:59 pm

“Faulty Towers: Understanding the impact of overseas corruption on the London property market” assessed 14 new landmark London developments, worth at least £1.6 billion. It found 4 in 10 of the homes in these developments have been sold to investors from high corruption risk countries or those hiding behind anonymous companies. Less than a quarter had been bought by buyers based in the UK.

http://www.transparency.org.uk/publications/faulty-towers-understanding-the-impact-of-overseas-corruption-on-the-london-property-market/
=================================
what is round tripping?
How widespread ?
http://news.mit.edu/2014/how-widespread-is-tax-evasion
=============================
Paris replacing Mauritius as tax haven, Citi alerts Finance Ministry
18 Apr, 2017, 08.20AM IST
In a meeting with officials of the finance ministry, Citi pointed out how some global banks and funds are taking advantage of India’s treaty with France to escape tax
http://economictimes.indiatimes.com/news/economy/finance/paris-replacing-mauritius-as-tax-haven-citi-alerts-finance-ministry/articleshow/58230973.cms

#201 45north on 04.20.17 at 5:09 pm

Ret: Whenever the Ontario Liberals touch a file, another billion gets added to the debt. Expect complex, expensive and ineffective new initiatives from Ontario Liberals for what is a federal problem.

“complex and expensive” that’s for sure.

Raising interest rates and lowering CHMC percentage of mortgage coverage by the feds would be a much more meaningful start. Simple and effective but the feds won’t touch either. Sousa has been played by Morneau, Poloz and T2 to be the front man on this issue for Ontario.

“simple and effective” that’s for sure Problem is that Morneau had gone as far as he could without jeopardizing the Liberal caucus.

Let’s restate the problem: what financial measures should the government put in place to improve the housing stock in the GTA? I’d say “lowering the percentage of CMHC mortgage coverage” would put the banks in a better position to judge the soundness of housing investments. After all that’s what they do. Also raising interest rates would reduce house prices in the GTA which are too high.

#202 Ronaldo on 04.20.17 at 5:12 pm

#195 George

Check this out.

http://vancitycondoguide.com/the-saretsky-show/

#203 Lee on 04.20.17 at 5:14 pm

#199 Stan,

So you believe a $1.5M house in Toronto is going to sell for $300,000?

#204 Tudval on 04.20.17 at 5:16 pm

#197 Original dave Yeah, except condos will not fall 40% – it’s crazy to think that. Rent control will lessen demand, will not cause mass liquidation. If they fall 10% AND they simply fall out of favor as investment, the result on sfd may in fact be positive.

#205 Al on 04.20.17 at 5:27 pm

The lemings are still lining up to buy houses in the GTA.

#206 original dave on 04.20.17 at 5:48 pm

#197 Original dave Yeah, except condos will not fall 40% – it’s crazy to think that. Rent control will lessen demand, will not cause mass liquidation. If they fall 10% AND they simply fall out of favor as investment, the result on sfd may in fact be positive.

—————-

actually it’s not crazy to think that. Parabolic up has no sensible price point. Parabolic down has no sensible price point either. Expecting sanity on the way down when there was insanity all the way up, is simply….insane.

My 40% was just used as an example by the way

#207 Victor V on 04.20.17 at 5:56 pm

RBC and HCG? Grab the popcorn.

http://business.financialpost.com/news/fp-street/rbc-exploring-sale-of-bonds-backed-by-uninsured-residential-mortgages

The RBC deal would be sponsored by Steel Curtain Capital Group LLC and Ashley Park Financial Services. It may also include mortgage loans from Home Capital Group Inc., according to people familiar with the matter, who asked not to be identified because the deal is private.

Spokesmen for Toronto-based Royal Bank of Canada and Home Capital declined to comment.

#208 Long-Time Lurker on 04.20.17 at 6:11 pm

Garth, maybe you should do some interviews? It’s your time to shine: The Greater Fool Moment.

#200, jess

You always put up interesting material, Jess. Thanks.

#209 Tudval on 04.20.17 at 7:58 pm

#206 original dave There was no parabolic rise in condo prices. example: nice 2 bdrm 2 bthrm condo in central location. Price today 550k. Price in 1989: $340k. Liquidation price 1993: $170k (BELOW building costs – do NOT take this one as baseline).

BTW: A steady 3% price increase over several decades will show as parabolic rise on a long term chart.

#210 choptstix on 04.21.17 at 4:02 pm

Globe and Mail:
”Vancouver Presale Condo market reaches fever pitch”
http://www.theglobeandmail.com/real-estate/vancouver/vancouvers-presale-condo-market-reaches-fever-pitch/article34771425/

#211 Fred on 04.21.17 at 6:03 pm

So you believe a $1.5M house in Toronto is going to sell for $300,000?

……..

lol. Pipe dream…folks on the sidelines wishing….hoping….