Rule 7

Realtor and publicity hound Lesli Gaynor thinks she’s got a good thing. Judging by the media coverage her GoCo enterprise with its ‘real estate speed dating’ has received, no wonder. The idea’s simple: because fools have pushed house prices too high for average people to afford, why not buy using crowd funding? Or at least teaming up with other people are just as house-horny as you?

It’s not exactly new. In BC, Vancity has been pushing team mortgages and shared property ownership for a few years. Ontario’s biggest and scariest credit union, Meridian, has a ‘family and friends mortgage’ accepting up to four people on a title.

Of course, this is a really bad idea. It breaks GreaterFool cardinal rule #7: “Never buy real estate with anyone you have not slept with.” Seriously. But this movement to cocoon with somebody you met at a sleazy networking event, comingling your financial fluids, is consistent with what pollster Nik Nanos just discovered. “Consumer sentiment on real estate has gone from hot to hotter,” he says. In fact for the first time Nik has been polling for Bloomberg, a majority of people (50.1%) say they believe housing prices will continue to rise. Those who expect a decline? Just 10%. And apparently they’re all on this pathetic blog.

Nik also found optimism was the highest where prices are the most delusional – Vancouver and the GTA. And this house lust comes despite the fact most think the economy blows. The polling showed declining confidence when it comes to job security, personal finances and the overall economy. Four in five people believe things will be worse in six months.

Go figure.

Meanwhile, faith in the country’s biggest non-bank mortgage lender is plumbing new depths. Home Capital stock may have finished up a buck Monday, but the run on deposits continues. High-interest accounts have been emptied fast, going from over $2 billion to under $200 million. More than $300 million in GICs have been cashed in, and Home Cap has apparently chewed its way through about $1.5 billion of a $2 billion rescue loan at outrageous interest. It’s jacked the return given to investors to make them stay, eliminated its dividend to shareholders, appointed respectable-looking, grey-templed new dudes to its board and done everything but send Mike Holmes over to finish off the rec room of every borrower.

In fact, word from Home Capital execs is that loan demand is holding steady and, get this, even increasing. As prices escalate, the demand for Alt-A mortgages – for people who generally do not qualify for home loans at the bank – escalates right along with them. This is Canada’s subprime market – and over the past year has been the fastest-growing segment of the mortgage business, even as the largest lender in that field implodes over questionable business practices.

Seems we beavers will do anything necessary to grab property – which now includes this trend of buying with a friend, a relative, or some dude you met in a bar at an event sponsored by Lesi Gaynor. ReMax found a third of Canadians would consider buying with a stranger, while Capital One polling found almost one half of moisters (46%) agreed. But don’t do it. Lesli is selling an impossible dream.

If you and two friends buy and finance a home, for example, and one person loses their job, the other two are responsible for 100% of the payments. If the remaining guy decides to stop paying, it all falls on you. The lender has an equal and binding charge against every person on the mortgage document, as individuals. You may only own one-half or one-third of a property, but you could end up paying all the costs – and never increase your ownership position.

What happens if you fight? Or one person wants to move out? Or croaks? Unlike having a roomie, a co-mortgagor can’t just leave and walk away from the debt regardless of changed circumstances. That person needs to be bought out of their ownership stake, involving refinancing, which could be denied.

And it’s not just the monthly debt payment you must share. Property taxes, insurance and utilities are recurring costs. What happens if the furnace blows up and one of the people on title refuses to chip in their portion of the $8,000 cost? What options do you have to force payment? What if that person walks?

Then there’s selling. What if one person needs to sell and move to beautiful Winnipeg and the others wish to stay? Either they try to rope in another part-owner, come up with the money to buy the defector out, refinance or are forced to list it.

Never ever consider this kind of nonsense without a serious agreement between parties, prepared by a contract lawyer (not your real estate guy) which spells out duties, obligations, a dispute settlement mechanism, termination scenarios, penalties and trigger events.

Marrying a wrong person is a picnic compared to buying a house with one. There’s no family law to fall back on here. No sympathy. No relationship. No love. Nothing a bottle of wine and some new underwear will fix. But you can try.

 

182 comments ↓

#1 For those about to flop... on 05.08.17 at 7:42 pm

Since I have lost my conduit to post results in real time ,these sales are missing the final chapter but I will soldier on regardless.

Here are some houses that either recently sold or were removed due to the seller not getting their required number.

Address, how much they paid and how much the last asking price I recorded.

Some of them likely made a profitable exit.

A fair few would have broken even after expenses.

And a couple of them likely took a loss…

M42BC

653 Lakeshore Drive, Coquitlam paid 1.27 asking 1.29

4611 Pendlebury Road, Richmond paid 2.22 asking 2.38

15136 86a Avenue, Surrey paid 735 asking 699k

3855 Brandon st Burnaby. Paid 1.468 asking 1.498

677 e 59th Ave Vancouver paid 1.05 asking 1.28

10691 Seaward Court Richmond paid 860 asking 988

14510 78 ave Surrey paid 885k asking 949k

3471 Rosamond Avenue, Richmond paid 1.65 asking 1.68

8933 149 Street, Surrey. Paid 800k asking 869

9247 138 Street, Surrey. Paid 803k asking 799k

13523 79 Avenue, Surrey. Paid 900k asking 999k

10619 137a St. Surrey paid 672 asking 690

1401 – 6659 Southoaks Crescent Burnaby paid 650 asking 620

5626 Elizabeth St. Vancouver paid 2.72 asking 3.19

#2 rainclouds on 05.08.17 at 7:51 pm

#193 Smartfish
“If remote hydroelectric power was such a boondoggle, why was Quebec so successful (James Bay) at it, and why would Newfoundland and Labrador be so interested (Goose Bay and Muskrat falls)? Or should the provincial utility fund a bunch of risky start-up ventures like Ontario did (oops!)”

Well since you ask………….

Quebec out negotiated Joey Smallwood into signing a deal he couldn’t refuse. 70’s prices continue in 2017.

NFLD tried to get Quebec to renegotiate Churchhill Falls but nada. Took them to court, lost. Suck it up NFLD.

Then the folks on the Granite Planet got mad. Muskrat falls is the result. NFLD will sell power directly to New England (and a bit to NS) presumably undercutting PQ.

Once the existing “agreement” expires with Que in 30 yrs NFLD will take Que to the negotiation woodshed.

Meanwhile some of the margin Quebec enjoys (buy VS Sell) will be reduced by Muskrat falls competition.

Later, with James Bay renegotiation,huge margin is toast. Quebec will no longer be able to subsidize power/child care/ university tuition and god knows what else.

NFLD is playing a looong end game they will win.

Regarding Peace River the Con err Liberals bypassed the BC Utilities Commission because it would have been rejected for fiscal/ usage/ and environmental concerns.

Your Welcome

#3 Ogopogo on 05.08.17 at 7:52 pm

Canada–a laughable nationnette of financial illiterates:

‘Another hair-raising finding from the survey: Roughly 60 per cent said they don’t have a firm grasp of how interest rates affect debt repayments.

The statistic helps explain why many indebted Canadians end up taking on more debt and high-cost loans, said Bazian. “That’s how so many end up in an endless cycle of debt,” he noted.

[…]

Regret was another theme of the survey.”

http://globalnews.ca/news/3434447/over-half-of-canadians-are-200-or-less-away-from-not-being-able-to-pay-bills/

#4 I'm Not Poloz on 05.08.17 at 7:54 pm

Mr. Turner, regarding yesterday’s feedback, it is certain that poloz aims for a Low Loonie.

When the Loonie was at 0.75, Poloz talked down the Loonie. I wasn’t lying in my comment; I was only exaggerating and using hyperbole, though poloz does seem like the type of man to cut interest rates next month because of Home Capital.

Speaking of real estate speed dating in Toronto, good luck for any male who doesn’t earn over $180,000 a year in a Bay St. investment banker job. Toronto is very competitive, but the rewards are not that great.

#5 Ray Skunk on 05.08.17 at 7:56 pm

So when Home Capital eventually flows down the u-bend, I’m assuming the $2bn HOOPP generously gambled with them goes with it.

What happens then?

We’ll have a bunch of seething ex-Ontario pseudo-union provincial employees screaming blue bloody murder that their retirement incomes will have been chopped.

On the other side we have a union-cosy government, languishing in the polls and with a proven track record of borrowing from future generations to buy the votes of today’s. Oh, and did I mention there’s an election next year?

See where I’m heading with this?

#6 Getting away with theft on 05.08.17 at 7:56 pm

PBS Frontline – Wall Street Untouchables Executives Didn’t Go To Jail After Massive Fraud

https://www.youtube.com/watch?v=shyrRqA0GeQ

#7 For those about to flop... on 05.08.17 at 8:00 pm

Here is one of my old Pink Snow reports.

BC assessment has finally updated the information.
As you can see I had it marked down as a late January sale ,but by the time everything went through it was a recorded sale in late March

They paid 1.250 in March 2016
They sold for the exact same number a year later.

And so if I have been advised right and take 7% off this number for expenses this means a loss of around 90k.

I believe this is the first loss or break even that I have seen recorded into the database.

More to come…

M42BC

11240 Bird Road, Richmond sold late Jan.

Jan 29:$1,349,000
Feb 20: $1,298,800
Change: – 50200.00 -4%

https://evaluebc.bcassessment.ca/Property.aspx?_oa=QTAwMDA1WDRCSw==

#8 BlogDog123 on 05.08.17 at 8:02 pm

How about you, Mr. “I cannot afford a house, so I’ll co-own it with a few others.”
Face the facts:
You cannot afford to buy, you don’t have enough income or savings, so do not buy. There is no shame in renting when you cannot afford to buy a house. Do the math, calculate the gross-debt-service ratio. Look at the signs of insanity around you. Don’t be a lemming headed for that cliff.

#9 Dave on 05.08.17 at 8:02 pm

3 guys walk into a bar….Doctor, Professor and Real Estate Agent…..who buys the drinks?? The one with the most money and least amount of education. I think we can all use a drink….Cheers

#10 boonerator on 05.08.17 at 8:03 pm

Good Lord, most sane people think twice about renting a place with strangers, been there, the trauma still hurts 30 years later.

Buying with strangers? This has to be the end stage of property hysteria.

#11 Bank of Millenial on 05.08.17 at 8:06 pm

#5 Ray Skunk

If it takes a u-turn, HOOPP gets to benefit from the sale of the mortgage book or become an alternative mortgage lender.

#12 Sprawl on 05.08.17 at 8:07 pm

This blog has had more twist and turns than a basket of new born puppies lately. Last week buyers walking and sellers stressing. This week the rise continues and demand grows. Any insight Nick Nanos provides requires skepticism of its intent, When does the appraiser jump out the helicopter? Signalling this dog hunts no more with certainty?

We just report the news, dude. Don’t make it. — Garth

#13 Smartalox on 05.08.17 at 8:11 pm

@ Entrepreneur:

The last ‘Clark’ that bought ferries built in BC made a hash of the deal (from what I hear, it was before my time).

But really, the new Polish-built dual-fuel diesel and LNG ferries look to be a treat. I tell you though, I worked for BC’s darling LNG-power tech company at the time, and was actually relieved when I heard the BCFerries order went to a foreign builder. Buying locally would have been an even bigger boondoggle – we would have been doing technology development when we should have been doing production work, and that would have cost a lot of time, dollars, and red faced excuses. If they could build the rest of the boat more cheaply and easily, then so much the better, too.

The queen of Burnaby was 60+ years old and due to be replaced – her operating license is being renewed on a monthly basis, as I understand it.

I lost my job at that BC-LNG company, (laid off due to low oil prices, in October 2014) but have no regrets: the strong BC economy made it possible for me to find another job at a better (BC) employer; and so did most of my colleagues. The good ones, anyway.

It really is better to let the market make decisions than using public dollars to prop-up inefficient practices at (allegedly) for-profit enterprises, on the basis of some arcane concept like a provincial ‘birthright’?

#14 Unhinged Trader on 05.08.17 at 8:13 pm

So I just realized 1200% in Cryptocurrency speculation.

Why does anyone bother with boring Boomer-esque legacy assets like decrepit real estate and dingy stocks and index funds?

Anyone else here in Bitcoin, Ripple etc?

#15 I don't post very often on 05.08.17 at 8:15 pm

On Garth’s topic: You get MLS listing C4101825 – The listed price represents a 50% interest in the property. There are two people on title and one party’s interest is for sale. $186k in a neighbourhood of $700k homes…

#16 Alice In Blunderland on 05.08.17 at 8:23 pm

Canadians are now going subprime on auto loans, with an average finance term of *drumroll* 72 months! FML, we’re literally the worst with money.

https://betterdwelling.com/canadians-buying-record-number-new-cars/

#17 Leo Trollstoy on 05.08.17 at 8:26 pm

#14 Unhinged Trader on 05.08.17 at 8:13 pm

Congrats on your $356

Lol

#18 Smartalox on 05.08.17 at 8:26 pm

@ Rainclouds:
The James Bay power lines run entirely inside Quebec. It’s the Churchill falls power project where Quebec provided funding for the massive, risky, never-before-tried- venture (i.e.: the mortgage) as well as the route to access the US markets.

Given NFLD’s current budget crunch, they might be eager to make a deal on power when the rights come up for negotiation in 2041.

#19 Nonplused on 05.08.17 at 8:29 pm

$8,000 for a new furnace? Yikes! I think you need to shop that price around a bit.

GreaterFool cardinal rule #7: “Never buy real estate with anyone you have not slept with.” needs to be re-written a little bit, but the spirit remains the same:

“Never buy residential real estate with someone you are not currently happily sleeping with.”

If he or she isn’t putting out anymore and you are unhappy about it don’t buy that upscale McMansion, it’ll all just get tied up in divorce court as soon as the movers roll out of the driveway anyway. The new house is an asset ploy.

Commercial real-estate is ok as long as it is through some sort of LLC. Partnerships are more dangerous as they are also “joint and several”. A REIT is the best way to go unless you are pretty sure you have an angel on a unique deal like Garth’s store.

But anyway the point remains the same, joint ownership of anything that doesn’t have “shares” is dangerous. Only those foolish enough to get married should consider such an absurd idea.

My father was a complete ass about many things, but he did give me a couple of good pieces of advice over the years. Number 1 was “never do business with relatives”. What’s the risk? Well, when you do business with acquaintances and the deal goes south it doesn’t ruin Christmas.

You can do business with your wife or husband because if that deal is going south Christmas is ruined anyway and you are not technically relatives. I know, I’ve been there. Wife number 2 is not on title to my house and she makes no payments towards utilities or taxes. She paid nothing. The house is defined in our pre-nup as a “pre-marital asset”. I’m hoping by doing this that if she does up and leave we only have to argue about any appreciation of the house while she lived there, and only cut her a cheque for half of that. Pretty pessimistic way to approach a marriage I know but my first wife didn’t pay for anything either and when she wanted out what she meant was i was leaving and I had to live in a basement suite for a year until her father cosigned the mortgage. Not fun. Those kind of experiences stick with you. Worse, my basement suite was right under a bunch of football players so I had to listen to them banging their groupies for free all summer. Talk about salt in the wound.

As soon as I was off the mortgage on my ex-wife’s house I bought my own house all by myself and suited the basement. Best decision I ever made. Not only did I collected rent and had relative autonomy to upgrade the structure, and “a rising tide lifts all boats”, so I sold it for nearly twice what I paid, and I didn’t have to split it with anybody. It was a modest house, but it was like 3 years of after tax, after child support wage-income, BOOM! Just like that.

I shouldn’t have changed the furnace though. It didn’t cost me $8000 to do but I didn’t live there long enough to get the benefit of fuel savings. Buyers don’t pay dollar for dollar on that kind of stuff. The only improvements I think got dollar for dollar were the suite and the parking I put out back. The new kitchen, bathroom, deck, fences, furnace, and hardwood flooring in the living room (oak) was all very nice but I got zero back. The suite sold the house.

#20 joe calgary on 05.08.17 at 8:30 pm

The ppl in this country have gone full retard, the level of house horniness I see here is unmatched by any place for any commodity on earth. The next level is to trade healthy organs for real estate ownership, maybe theres a niche there lol.

#21 Game Over on 05.08.17 at 8:31 pm

If this isn’t an indication of maximum insanity, I don’t know what is. Mania at max power right now. These have to be the greatest fools..

But..I don’t think that these new measures, the listing glut and HCG issues marks the end yet. Like other people that have commented before, we have seen these false alarms a few times over the last few years. One of these times it will be the real event, probably sooner than later, but I think this is a pause. These are all nails in the coffin for sure, but what that catalyst is or will be,I don’t know. I guess we will know looking back.

Having said that, the numbers don’t even add up to get in to market! 500K town homes with strata fees will pretty much clean you out of cash flow. I see a lot of houses in disrepair in the east end GTA and some MLS listings where people don’t even try to clean the place up! I wonder how much people have left over for maintenance? Probably not much if they have to go in to HELOC or credit just to live. I can’t imagine buying and maintaining one of these s**t boxes with a bunch of strangers.

This bubble seizes to amaze me.. I wonder if Toronto is on Kim Jong Un’s hit list?

#22 house sharing on 05.08.17 at 8:33 pm

on a side note.. I won’t even rent to roommates..

typical scenario of 2 girls (one with a kid) looking to rent a place.

one with the kid gets jealous of the other girl’s freedom. they fight. they break lease after 3 months.

the chick without the kid gets a loser creepy boyfriend who is always over (and naked)
they fight. they break the lease. (could be 1 month or 4 months into the lease)

#23 original dave on 05.08.17 at 8:36 pm

#165 AK

Don’t get me wrong, there is absolutely no doubt that Canada has a housing bubble (most pronounced in GTA and Vancouver of course).

I’m just saying I don’t really think the bubble has burst yet.

No evidence for my belief, just experience which gives me some intuition.

I hope the bubble has burst, as the longer it goes on the more distortions it causes.

Seems to me like this is a pause, a correction perhaps, and the true crash will be a few years down the road.

——————————–

a few years? That’s insane. I’m not sure how long average people can hang in there at this level of debt and pricing. Higher prices for another couple of years is next to impossible.

#24 Game Over on 05.08.17 at 8:38 pm

@14 Unhinged Trader

Bitcoin is interesting, I wish I looked a little more into earlier. Value is super high right now and mining doesn’t make economical sense anymore, unless you are at a nuke plant with a room full ASICs!

Buy the dip?

#25 cd on 05.08.17 at 8:41 pm

Instead of this real-estate dating thing perhaps some sort of hybrid REIT/co-op/corporation could be developed. So instead of splitting a place with three people, split 100 places with 300 people. I don’t know.

#26 crowdedelevatorfartz on 05.08.17 at 8:45 pm

Christy Clark perpetuating the myth of the BC Liberals running a balanced budget when, in truth, they are running a tab that future generations will be stuck with………and the gullible, bobble their heads in rapt agreement….
Praise the lord and pass the communion plate….

#27 Ace Goodheart on 05.08.17 at 8:46 pm

If you ever have a few free minutes and want to really scare yourself, check out the difference between “joint tenants” and “tenants in common”, particularly the differences in rights of survivorship. When spouses buy they are almost always joint tenants (unless the prenup requires otherwise). But groups of people often tenants in common. Have a look. It is an eye opener.

#28 3s on 05.08.17 at 8:47 pm

Australia has already solved this dilemma. BrickX will let you buy bricks in a property and then they let that property out so you don’t ever even have to live in it.

If they were really smart they would already design mortgages that spans multiple generations. That way you can get the kids committed early too:)

#29 I'm stupid on 05.08.17 at 8:48 pm

This entire thing is going to blow… it’s just a matter of when. 99% of the population is living on credit above their means. Porsche, MB, and BMW have become average cars. I remember in the 80s seeing a Porsche was a big deal but now it’s common. I remember watching the CEO of Ferrari talking about their target market in the early 90s ; Men with a net worth of 10million or more. I can bet that most that are driving them now aren’t even close to that and it’s more than 20 years later.

The bank of Canada has held interest rates to low for too long and the entire economy is going to suffer because of it. What resources does The Bank of Canada has in the event we fall into recession? The only reason we’re not in one now is because of expanding credit by consumers to fund the construction industry. Eventually this will end then what? The majority of our financial tea sources are tied to one industry. I’m in the industry and I’ve spent the last 5 years trying to diversify, it’s not an easy task. It seems every other industry is starving while mine is being showered with money. We’re so screwed and when everyone realizes it it’ll be too late.

I hope the rest of the blog dogs have prepared for this because it’s going to happen sooner than you think. Good luck!

#30 Marius on 05.08.17 at 8:50 pm

http://business.financialpost.com/business/spectre-of-empty-houses-haunt-canadas-two-most-expensive-housing-markets

#31 Daveyboy on 05.08.17 at 8:52 pm

OMG . People r crazy.
Canada is massive. Move some where else . Owning a home does not mean a thing.

Glad I am out if Toronto. That is nuts.

#32 crowdedelevatorfartz on 05.08.17 at 8:57 pm

@#13 Smartapox

Ahhh yes the LNG financial fiasco.
What was it Christy promised last election?
Billions in revenue and thousands of jobs?
The world is awash in cheap LNG and she’s still flogging that dead horse…..anything to look good while cutting a ribbon. Thats our Preem!
As for the Site C dam. The only benefactors will be the LNG industry.
Green Power…pfffft. The carbon cost of refrigerating the gas into a liquid negates most of its supposedly “green” benefits
As for the new Salish class BC Ferries being both LNG and Diesel.
Great.
Everytime those ships tie up for more than 3 days. The gas will have to be pumped off before it heats up and expands. What’ll THAT cost? Whats the green benefit in THAT?
LNG ferries are a political posturing joke.
Why hasnt “Queen Photo Op” stood in front of one of those brand new ferries during the election?
Because she knows their lemons full of deficiencies?
Just wait til the Spirit of BC and the Spirit of Van Island get back from Poland with their shiny new LNG engines ……a self promoting financial disaster costing hundreds of millions….

Hmmmm on second thought. I’m glad Christy’s inheiriting the approaching financial S**tstorm.

Should be fun to watch.

#33 45north on 05.08.17 at 9:02 pm

flooding on the Ottawa:

The other part is the nature of the Ottawa. It is mammoth, at 1,300 kilometres long, and has a drainage area twice the size of New Brunswick.

So, when the rain came, so much and so late, there was nowhere to put it. water was being discharged at the Carillon Dam near Hawkesbury on Monday at the rate of 8,815 cubic metres a second, the highest ever recorded there and about five times the annual average.

http://ottawacitizen.com/news/local-news/egan-how-the-ottawa-river-ran-us-over

#34 Bcndp on 05.08.17 at 9:02 pm

HCG is a piece of work, at the current level of withdrawals they are done by next week! The great Canadian bailout can begin! This was bad since 2012, now at this level of speculation not even negative rates can save us

#35 $$$D$$$ on 05.08.17 at 9:02 pm

This seems like a great opportunity for a scam artist to take advantage of some poor souls.

#36 Ummmmm on 05.08.17 at 9:02 pm

Just because you buy a house with some couples you haven’t slept with…it does not mean you won’t do so as soon as you move in!

#37 hassles on 05.08.17 at 9:20 pm

My relative in Michigan knew this old black man, who gradually collected over fifty properties by the early 2000. They were all rented to people on welfare, the government transferred their rent to the old man directly, no collection hassles. By then he became fairly rich, but he was sticking with the niche market he knew best, from the past, when he used to be one of those renters.

People hassle under various conditions, with large variety of circumstances in ways that this, mostly old stock Canadian audience would not touch with a 10 feet pole.

#38 Pre-retiree on 05.08.17 at 9:26 pm

#5 Ray Skunk
HOOPP has structured the deal so that their guarantee is the mortgages. HOOPP will be first in line to be paid and will get $2 of mortgage for every dollar lent. Remains to see how valid those mortgages are. Still, it’s hard to see that HOOPP will walk away empty-handed.

#39 CHECK OUT DAYTONA BEACH FLORIDA REAL ESTATE on 05.08.17 at 9:26 pm

https://www.zillow.com/homes/for_sale/0_fr/1_fs/17718_rid/2-_beds/61000-197000_price/X1-SS2q82jb2wbh8r_4vl2o_sse/?utm_source=email&utm_medium=email&utm_campaign=emo-inferredsearch-allmatching&rtoken=921f797a-c82a-42e8-a756-688dd37f56dd~X1-ZU11iimdau5krgp_

#40 When Will They Raise Rates? on 05.08.17 at 9:32 pm

Ahh look, the special snowflakes are all grown up now.

This is the first generation that grew up with the “time out” and “participation” trophies. Completely naive and out to lunch, easily offended and in need of safe spaces, these idiots are now speed dating to buy real estate, commie style. With complete strangers.

Well done libtards, well done. You have raised an entire generation of complete retards.

#41 Tony on 05.08.17 at 9:35 pm

You get a feeling a lender is in trouble when they have a promotion for $100 put in your account for a limited time then when that time is up the promotion runs another week. Same thing with Oaken Financial (Home Trust and Home Bank) sending people boxes of chocolates with their branded name on them (through a third party shipper) like dated December 01, 2016 right when they drop their savings account interest rate from 1.75 to 1.50.

#42 Will it ever end on 05.08.17 at 9:36 pm

Insanity continues- millenials are now buying $2M+ homes with massive long amortization mortgages.
What will it take to slow down this run away RE train?

#43 Paul on 05.08.17 at 9:43 pm

Lesli Gaynor she can’t even get along with her sister.

She wanted to change the locks !!

https://www.youtube.com/watch?v=7SxqJsYFL-Q

#44 TurnerNation on 05.08.17 at 9:44 pm

Here’s a suggested price list/donation list for SmokeFest -BlogDogFest2016 this Saturday.
(All proceeds given to a worthy charity or the bar tab at S.S. Johnny’s?)

$1 – picture with Bandit
$2 – picture with Gartho
$3 – picture with Smoking man’s Ford Ranger
$5- picture with Smoking man

In other news. VIX single-digit shocker to-day.

#45 Smoking Man on 05.08.17 at 9:50 pm

Two bed room homes in Buffalo by the University. 80k x 5 = 400k rent per room = 700 × 10 x 12 = 84k usd annual.

26% less repairs and insidentals and a bit of bull shit.

Why is anyone holding onto toronto real estate.

Cash in that ticket. My math may be a bit off but it’s 50 minutes past 9pm.

#46 Pete from St. Cesaire on 05.08.17 at 9:54 pm

Later, with James Bay renegotiation,huge margin is toast. Quebec will no longer be able to subsidize power/child care/ university tuition and god knows what else.
NFLD is playing a looong end game they will win.
—————————————————————
NFLD will lose. Assuming that the rest remains constant (Quebec still part of Canada, Canada still existing, no WW3, etc) the feds will grant Quebec whatever it wants in terms of forcing a settlement onto NFLD.

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

So when Home Capital eventually flows down the u-bend, I’m assuming the $2bn HOOPP generously gambled with them goes with it. What happens then?
————————-
You get to bail out the pension fund and perhaps Home Cap.

#47 Smoking Man on 05.08.17 at 9:55 pm

#42 TurnerNation on 05.08.17 at 9:44 pm
Here’s a suggested price list/donation list for SmokeFest -BlogDogFest2016 this Saturday.
(All proceeds given to a worthy charity or the bar tab at S.S. Johnny’s?)

$1 – picture with Bandit
$2 – picture with Gartho
$3 – picture with Smoking man’s Ford Ranger
$5- picture with Smoking man

Look forward to meeting all you misfits with no lives.
I’m one of you.

Got a crazy hat I made for the Kentucky durby. I’ll be wearing it. Perhaps blog dogs that contribute should also wear a crazy hat.

It will separate the brave from the peeping Toms that never post.

Bring your crazy hat.

#48 Andrew Woburn on 05.08.17 at 9:56 pm

If you think the French election settled everything, read this.

– Macron’s victory is the beginning of an uphill struggle

http://www.theglobeandmail.com/opinion/macrons-victory-is-the-beginning-of-an-uphill-struggle/article34916161/

#49 The Limited Sage on 05.08.17 at 9:58 pm

First there was the Global News article stating 50%+ of Canadians are within $200 of being screwed. And now this:

https://betterdwelling.com/canadians-buying-record-number-new-cars/

What the hell is wrong with people?!

#50 Andrew Woburn on 05.08.17 at 10:00 pm

If Victoria is nothing but retirees, there must be a lot of Walmart greeters there

– Capital region boasts best employment rate in Canada

http://www.timescolonist.com/business/capital-region-boasts-best-employment-rate-in-canada-1.18540494

#51 bigtowne on 05.08.17 at 10:04 pm

CIBC Ben Tal aired his critique with Bank Of Canada Governor Mr. Poloz describing the Governor more than a little weak as our face out there in the Global Free Trade Currency framework. Economist Tal is miffed at the dissing of our especial but seriously swooning Canadian legal tender (for you lay people I mean “dollar”) and is offended at the casual indifference to our loonie by our Most Reverred Governor.

Of course in Canada everything comes in threes: we are sitting as the main theme of Marc Farber editor of the Gloom Boom Doom Report where today on BNN he was styling big-time in his glory alerting us to our world famous housing bubble; then there is our currency enough said; and lastly our tried and true but ended season Raptors who are rapted out. Kyle Rowry is a free agent soon to embrace that double your salary from a lowly $12 mil and escape the high cost of housing in Toronto. Lord have mercy but basketball has a reason to be under the weather.

Anyway we are all under the spell of the Black Magic of low interest rates as our tonic and inspiration for now and well forever. It means what previously would have given you $50,000 income per annum is now down to $11,000 per annum and is looking very much like a 19th century Dickens novel. However the narrative of Dickens novels usually ends with someone marrying the ugly but kind soul who just by chance inherited the biggest fortune the East India Company ever paid out.

#52 BC_Doc on 05.08.17 at 10:04 pm

Posted as an FYI for those folks who have GICs locked in at Home Trust. The reply I received is what I expected– the CDIC has small depositors backs.

Regards,

BC_Doc

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

I sent an e-mail last week to the CDIC with the following question:

“In the rare event that a CDIC member institution were to fail, could you tell me how long it would typically take for a covered depositor (i.e. insured deposit with a value below $100k) to be paid out (deposit plus accrued interest) once the institution is closed by the OSFI?”

Here’s the reply I received:

“In the event of failure, depositors do not have to file a claim. CDIC contacts insured depositors advising them of the amount of insured deposits and of the method of payment. • The time required to pay out depositors depends on the size and complexity of the failed institution. For smaller institutions, deposits in savings and chequing accounts would be paid out as quickly as possible and may be within a few days. Trust accounts and registered accounts would take a few more days.

CDIC may make payment by making the amount of insured deposits available at another member institution, or by issuing cheques to insured depositors. Accrued interest (monthly or annually), will be calculated on eligible deposits up to the date of the deposit insurance payment or the date on which a court application is filed to wind up the failed, whichever comes first, and will be included in the deposit insurance payment, subject to coverage limits.”

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

#53 jay on 05.08.17 at 10:19 pm

https://www.thestar.com/business/2017/05/08/toronto-is-over-housed-despite-overall-population-growth-report.html How long till this bubble bursts?

#54 Pete from St. Cesaire on 05.08.17 at 10:27 pm

CDIC may make payment by making the amount of insured deposits available at another member institution
——————————————–
Holy Moly…..they’re insolvent too, they’ll just pass the buck to the next bank to print up some more money to satisfy the depositors.

#55 common sense on 05.08.17 at 10:29 pm

Are people really that stupid or is everyone thinking quietly, “Things are so screwed up, might as well go for broke?’

Mortgages, car payments, credit card debt….

Is this the final blow out before a depression?

The roaring 20’s seemed sane compared to this..

#56 Capt. Serious on 05.08.17 at 10:33 pm


#14 Unhinged Trader on 05.08.17 at 8:13 pm
So I just realized 1200% in Cryptocurrency speculation.

Why does anyone bother with boring Boomer-esque legacy assets like decrepit real estate and dingy stocks and index funds?

Anyone else here in Bitcoin, Ripple etc?

Naw, I’m in Blue Star Airlines. It’s going to the moon.

#57 Rates vs Capital on 05.08.17 at 10:35 pm

Oh my, it looks like its game on for real estate in BC as the Liberals have taken the lead in the polls.

Expect a surge of buyers following tomorrow’s election as the smart ones were waiting to see if the NDP got in – now they know they will be forced to buy in order to compete with the open doors under the Liberals.

Many pundits are predicting that the BC Foreign Buyers tax will be rescinded because it was purely optics anyways. They could not even keep it in place for 6 months before ‘tweaking it’ in a way that would allow the 130,000 foreign students in BC to buy the houses for their overseas parents.

Another 4 years where BC is open for global capital to park itself into RE, and further create housing as a speculative commodity.

Expect the continued Vancouverization to take place in the Fraser Valley, Victoria, Kelowna as locals and those cashing out flee to cheaper spots. Vancouver will be a part-time resort town for the global elite.

All those data centric and investigative stories on the ponzi scheme in metro vancouver’s real estate did little to sway the voter – everyone wants a piece of the pie. Heck, real estate is 25% of the provincial GDP – no desire by anyone to stop the gravy train.

Oh my bears, looks like I get to watch my 13 year bull run in Vancouver for another 4 years – with lots of bear tears after being priced out for years. Popcorn anyone?

#58 Toronto highly restrictive zoning on 05.08.17 at 10:41 pm

#51 jay on 05.08.17 at 10:19 pm

https://www.thestar.com/business/2017/05/08/toronto-is-over-housed-despite-overall-population-growth-report.html

=====

“Most of the city has the highly restrictive zoning around residential detached housing, so you can’t build other kinds of homes in those areas.

Case’s study supports the need for policies that would unlock the restrictions on building other housing such as townhomes, apartments and triplexes in suburban neighbourhoods.

If you wanted to do the gentlest form of density there is — taking one unit and making it into two — you basically can’t. Zoning and the Official Plan restricts you from being able to do that.”

#59 House of fraud falling apart on 05.08.17 at 10:43 pm

http://m.thespec.com/news-story/7293930-kevin-smith-says-jobs-very-manageable-until-recently-resigns-as-chair-of-home-capital-board

#60 rates vs capital on 05.08.17 at 10:48 pm

Hey, where is VREU and the ‘coming collapse in prices following the collapse in sales’ in Victoria?

Seems Victoria is another market defying the willy coyote moment – market just keeps going up with bidding wars in even the surrounding communities.

I guess that whole jump in the number of foreign buyers from 0.6% to 4.7% – a seven fold increase – has no impact on the market. Its not like prices have gone up 25% in Victoria and the surrounding markets.

Anyone who followed her advice is eating crow.

#61 Toronto highly restrictive zoning on 05.08.17 at 10:53 pm

Cannabis Wheaton the world’s first marijuana streaming company

http://www.marketwired.com/press-release/cannabis-wheaton-worlds-first-marijuana-streaming-company-announces-appointment-industry-2214512.htm

#62 DON on 05.08.17 at 10:55 pm

http://www.theprovince.com/news/local+news/accounting+firm+study+shows+signs+debt+stress+among+consumers/13355259/story.html

Accounting firm’s study shows signs of debt stress among B.C. consumers

Rates vs. Capital…What you say?????????

“And while Sweet-Speiss is climbing out from under her debt, there is new evidence that more British Columbians are becoming more uncomfortable with their own debt in a survey released Monday by the accounting firm MNP.

Faced with skyrocketing property prices and rising rents that contribute to a high cost of living, “many (consumers) feel they can’t get ahead and have no choice but to be in debt,” said Lana Gilbertson, a licensed insolvency trustee with MNP.

About quarter of B.C. respondents expressed regret over the amount of debt they’ve taken just this year alone and up to one-third said they regretted the debt they’ve built up over their lives.

“We are seeing more and more people accumulate more debt than they used to,” said Judy Scott, an insolvency trustee and senior vice-president at MNP. “Part of it is low interest rates, part of it just credit being very available to them.”

People are getting used to carrying higher levels of debt, Scott said, although they are also losing track of how much keeping up with payments on rising levels of debt can stretch expenses and put them at risk of going broke if interest rates rise.”

#63 Fish on 05.08.17 at 10:55 pm

Well, once the government decides to tighten the belt with more job cuts, maybe people will decide to go in with the new and up coming robots.

#64 Smoking Man on 05.08.17 at 10:59 pm

Memorys of pat pong street. ABBA again. Someone shoot me.

https://youtu.be/d73tiBBzvFM

#65 Entrepreneur on 05.08.17 at 11:06 pm

#13 Smartalox…Oh yes, the B.C. ferry history goes back to when the NDP was in power in the 90’s, made ships right here in B.C. but the price of aluminium went up and a running problem that shuddered the ship (which never had a chance to be fixed ).

But election time and Liberal, Gordon Campbell made a big deal about it, won, sold the three ships under value (no reporting on how they are doing, wonder why?). Gordon Campbell had B.C. Ferries built in Germany and told us that we did not know how to build a ferry/ship (correct me if I am wrong ).

Before all this rode the original ferries that were built here in B.C. and they had class, rode the waves beautifully. The ferries built in other countries need fixing all the time but yet when the NDP needed fixing it was a big deal with the Liberals. Rode those Germany/Polish ferries and they are loud and uncomfortable, definitely lack the comforts of class. And always in dock getting repairs as by the paid news.

And my taxpaying dollar goes to those jobs overseas while I see that my Canadian workers are trying to find work.

And oh, Smartalox, I am not union and I do not like controlled groups but I love my country, Canada, and I will fight for the people that live here.

Unfortunately, it is not about the candidate as it is beyond that, Christy Clark “has got to go” and the NDP can do that. Also, NDP is for electoral reform (then Greens will have more say) and for mental health. And again correct me if wrong.

#66 A on 05.08.17 at 11:07 pm

Holy s@#*! That’s a gargantuan loss at H.C. What happened to securing loans and investments in this country? I am a little confused why so many GICs were withdrawn – aren’t they insured through a “real” bank? If someone buys a GIC at Oaken for instance, and it is insured through a bank, can they still lose their initial investment if Oaken sinks with HC? Very scary times ahead people. You don’t even know who you are sleeping with either.

#67 DON on 05.08.17 at 11:07 pm

#58 rates vs capital on 05.08.17 at 10:48 pm

Hey, where is VREU and the ‘coming collapse in prices following the collapse in sales’ in Victoria?

Seems Victoria is another market defying the willy coyote moment – market just keeps going up with bidding wars in even the surrounding communities.

I guess that whole jump in the number of foreign buyers from 0.6% to 4.7% – a seven fold increase – has no impact on the market. Its not like prices have gone up 25% in Victoria and the surrounding markets.

Anyone who followed her advice is eating crow.
*********************
A couple of weeks ago in Victoria, houses were selling but ever since Home Capital, the houses seem to be sitting. In Nanaimo houses are siting on the market, some have been there since last year.

When the party is over it is over – no one can stop the momentum not even a realtor or corrupt government. Even the US couldn’t stop it’s own decline, but you expect me to believe a Provincial government can? How old are you seriously? How many properties do you own? Time to seek an independent financial advisor to get you over the real estate mania. Or go down with the ship…thinking any government can stop what is about to happen.

Then there is China and the credit problems.

But you keep on spewing it out, if that makes the coming reality easier for you to deal with. All things end!

#68 M on 05.08.17 at 11:08 pm

I have made an obscene amount of $ shorting HCG, taking staggered shorts since November 2016.
My shorts on banks followed suit since I found out that the net worth of BC housing went down 300 BILLION $ (soon to hit the news) in Dec 2016.
The downside of this, be ready to decimate the portfolio on a SURE event that will bring you 100X UP. The upside is that the short positions – when the crowd is on menthol are equally obscenely cheap.
These are very good time to make multiple killings with relatively low risk.
A long-short strap on HCG will take care of eventual 10 bucks a share. In a year time HCG will not exist anymore. Artis is the next to go and with our brave banks selling MBS the entire collapse is assured. Of course it will be a bail out for T2 will be no different than anyone else in the south, but banks will see their share price down 80 to 90% in the process.
These are marvelous times to be an investor.

#69 Capt. Serious on 05.08.17 at 11:09 pm

William J. Bernstein, who you should read if you’ve not, earlier this year rather sagely pointed out:

“Stocks are probably going to produce real returns of about 3.5% a year. Bonds are probably going to produce zero in real terms. So, a typical balanced portfolio of stocks and bonds is likely to generate about 2% a year in real terms.”

I believe that is a little pessimistic, but I wouldn’t bank on more than 3% real (I’m using 2.7% for my weighted portfolio) over the long haul from here. This isn’t 1981, heck it’s not remotely 2009 anymore. In 2009 I was throwing every spare dollar I could find into my index funds, now I’m glum.

Irrelevant to the balanced portfolio presented here. Nobody should have 40% bonds. — Garth

#70 Entrepreneur on 05.08.17 at 11:10 pm

On the news today Christy Clark got hackled from some protestors (news said teachers) in Sidney by Victoria. It will be on the late news, a must watch.

#71 Smartalox on 05.08.17 at 11:16 pm

So I arrived home this evening to find my mailbox stuffed with political advertisements.

One from the BC Liberal party, branded as such, with fine print stating that the flyer was paid for by the BC Liberal Party.

Then there are three other flyers; b ased on the rhetoric, they’re pro NDP, but the branding is all off: where’s the Orange.

So I look at the fine print:
– 1 paid for by the financial agent for CUPE 3787 (UNIFOR)
– paid for by the BCTF, adorned with fearful looking children, and threats of further hardship
– paid for by the BCGEU

Unbelievable: if a private corporation were to send flyers promoting a particular political party, the maelstrom would be epic.

But Unions are ‘social’ organizations, and therefore are free to promote their dogma to voters, on behalf of their favourite party. Don’t have to account for the costs of the flyers in their election spending, either.

#72 Smoking Man on 05.08.17 at 11:16 pm

When you realize you got a few grand left in the bank and your closure date is end of July.

You go into hyper mode. Entrupenurs shit. What beauty place to be.

This song resinates. BUT your still insane. No one on the world has enough loot to buy my insanity. It’s the only valuable thing in my life.

https://youtu.be/wh-07BzfgYY

#73 NoName on 05.08.17 at 11:31 pm

@ I am not clever

Check out Ferrari stock price last year.

https://www.google.com/finance?q=BIT%3ARACE&sq=Ferrari&sp=1&ei=mTcRWcHzGI-njAG585LICw

#74 Pete on 05.08.17 at 11:34 pm

To BC_Doc on 05.08.17 at 10:04 pm:

so CDIC’s reply is clear, for small institutions with not much deposits, they will pay within a few days. CDIC has $3 billion in capital, so any bank with deposits less than $300 million could be well within their definition of small. But Home Trust, with $15 billion in deposits (most of them probably covered by CDIC), I think the wait is not “a few days”.

#75 Fidel C on 05.08.17 at 11:39 pm

shared property ownership and basement living are worse than Cuban standard of living.
Canadians are at war in their own country therefore one segment of people living in the bunker. People need sun and sunny days.

#76 Pete on 05.08.17 at 11:42 pm

CDIC is a joke. I trust CIBC more than CDIC. CIBC has more than $300 billion in deposits, there is NO WAY whatsoever CDIC with a capital of $3 billion can bail out CIBC. I trust CIBC because it is too large to fail and government of Canada can’t let it fail. so your deposits with CIBC under 100k is safe, and your deposits with CIBC over 100k is also safe.

In contrast, investors are covered for $1 million. — Garth

#77 Smoking Man on 05.08.17 at 11:48 pm

Wife says your drunk come to bed.

And this is on the ear buds. Do see how my life has compplexity

https://youtu.be/egMWlD3fLJ8

#78 Smoking Man on 05.08.17 at 11:54 pm

The day I meet your mother.
https://youtu.be/1l0xpkk0yaQ

#79 yorkville renter on 05.09.17 at 12:14 am

#3 – Ogopogo – The comments in that Global News article are some of the saddest comments I’ve read of late…

#80 Lorne on 05.09.17 at 12:15 am

#69 Smartalox
So I arrived home this evening to find my mailbox stuffed with political advertisements.

One from the BC Liberal party, branded as such, with fine print stating that the flyer was paid for by the BC Liberal Party.

Then there are three other flyers; b ased on the rhetoric, they’re pro NDP, but the branding is all off: where’s the Orange.

So I look at the fine print:
– 1 paid for by the financial agent for CUPE 3787 (UNIFOR)
– paid for by the BCTF, adorned with fearful looking children, and threats of further hardship
– paid for by the BCGEU

Unbelievable: if a private corporation were to send flyers promoting a particular political party, the maelstrom would be epic.

But Unions are ‘social’ organizations, and therefore are free to promote their dogma to voters, on behalf of their favourite party. Don’t have to account for the costs of the flyers in their election spending, either.

…………………..
Who do you think pays for all those ads from the BC Liberal Party? Why, it’s the private corporations, though their siginificant donations to the party! Strangely enough, they do not want to be identified and hide behind the donation route…unlike the BCTF who have been battling for years against the government for illegally altering their negotiated contract. They, unlike the corporations, are not afraid to “show their true colours”.

#81 macroman on 05.09.17 at 12:18 am

Lezy, he he, pretty weak Freudian slip there Gartho

#82 Smartalox on 05.09.17 at 12:30 am

Farts,

You may be an expert on gaseous methane, but you’re wrong about the liquified kind.

BC promised a lot from the LNG industry, but the civil service dickered so much that by the time export facilities came on stream, global competitors had already established themselves. BC had to renegotiate royalties with Petronas, who have access to big Aussie plays, closer to (their) home.

As for pumping out the LNG from the tanks on the ferries after three days idle? That’s not what we were doing when I worked in the BC LNG company. LNG maintains its liquidity with minimal insulation, a simple vacuum insulation is sufficient, and the larger the tank the longer the fuel will keep cool enough to stay liquid.

Kind of like how liquid in the propane BBQ tank stays liquid, even without insulation. But LNG is colder, and will require insulated tanks.

No odourant in LNG though, so probably not as much fun for you.

#83 M on 05.09.17 at 12:40 am

It is a universal mistake of our times for “tza people” to see banks as being more than any other business, say…Nortel for example.

Banks are businesses that when managed badly they fall. Whether they are resued or not, is beyond the point, investment in them would be lost never to return for a very very long time…. if ever.

Morgan Stanley (one of the most “successful” banks) dropped from 75$ in June 2007 to 9$ November 2008 and even when bailed out it NEVER recovered. Same story with any other bank or financial institution.

..even their “blue chip” Goldman Sachs (they recovered only later under Yellen liquidity pumping) went from 220 down to 55.

…so yes.. even if T2 signs the order for Poloz to start printing, our lovely, shiny, solind, impecable and beautiful banks will lose half to 3/4 value once this house porn will end. Lots and lots of free $ to be made.
..like a 300$ short giving a 6000$ to the hunter with a steady hand.

How can one that calls himself INVESTOR (= one that recognize “value” from “garbage”) NOT LOVE THAT ?

…then is the canadian pesso. ..is not the oil sending it to 50cents…it’s the housing sector that is more than 45% of the economy (yes… BANKS=HOUSING)…

What I never understood is why “longers” are making fun of people like Cohodes that does well, times ok and UNDERSTANDS value and the chaos brought by the system of money=credit.

Never quite understood that…

#84 Dan.t on 05.09.17 at 1:05 am

Real estate is religion in Canada.

In Canada you are forced into talking Real Estate at least once a day but often multiple time with co-workers , family or friends. It’s Canada’s version of praying to Allah.

Owning real estate with others who also can’t afford it is like praying together and a wonderful bond is created and you feel great because now you own 1/4th of a house and you can talk like a savy real estate guru investor.

What a great place Canada has become due to government policies to turn housing into a religious right and to make housing sooo unaffordable that it takes 4-10 average Canadian workers to be able to actually afford one.

I love the community feel of it all!

Now if only we could convert those poor stupid, non- believing RENTERS! they are so disgusting, just throwing money away, especially when they can join the church of real estate and pool money with other real believers and thus drive prices even higher and make prices even more unaffordable…

Canadians buying and selling houses to Canadians using massive debt and so it seems by your post Garth, any means necessary to keep buying! Until rates rise nothing will change.

On a side note: after reading the articles about many Canadians not being able to afford extra 200$ and Canadians increasingly buying expensive cars on credit I firmly believe many if not most under 40 massively in debt Canadians are actually just planning on going bankrupt.

This must be like a massive group think, herd mentality secret. Live like s king on borrowed money, buy the newest and nicest stuff, just make minimum monthly payment and do that as long as possible and as long as banks keep spoon feeding you money… when it stops go to subprime lenders…when even they think you have no money, use last remaining credit card …then go bankrupt- the ultimate FU.

I think readers of this blog are probably more financially responsible than most but can someone tell me if they have heard others speak of this?

Is this the average Canadian’s plan to simply go bankrupt..heard it before that many believe they will never pay off debt or be debt free, why else would Canadians be so Debt adverse and not fear massive amounts of debt? 2 trillion personal debt is a lot.

Anyone?

#85 For those about to flop... on 05.09.17 at 1:48 am

Pink Pollen falling in Vancouver.

I have featured these guys before.

As you can see below, this house has been a flipfest the last couple of years and these guys went one time too many it would appear.

They paid 2.65m and just took a sandblaster to the price and will take a sizeable hit if they are forced to cut ties anywhere near this number.

There are people worse off then these guys though.

I have guys on the hook caught speculating with 6/7 million dollar houses and so if we are generous and say they put 20% down they are paying roughly 25k a month mortgage payments at the moment while they wait for the Aaron Rodgers pass…

M42BC

Sales history in the LAST 3 YEARS.

04/May/2016$2,650,000

08/Dec/2015$2,168,000

10/Jun/2015$1,580,000

6267 Dunbar Street, Vancouver

Feb 13:$2,838,000
May 8: $2,499,000
Change: – 339000.00 -12%

https://evaluebc.bcassessment.ca/Property.aspx?_oa=QTAwMDAwMFQ4Ng==

#86 Ch on 05.09.17 at 1:56 am

Garth. Can you do an article on what changes you think should happen in the RE industry (more open markets, access to data) and the banking industry?

#87 fishman on 05.09.17 at 2:09 am

Rainclouds: How about the big one out here. Pearson & Johnson signed the Columbia River Treaty in 64 for 60 years. It was so easy in those days to sell us out for Auto Pac. Even 35 years ago with the softwood treaty tariffing us & letting the East go scot free.

I love the internet. Ottawa will try to sell us down the river per usual but the masses can get hip. Its complicated but just think of this man made lake below the border filled by the Columbia called Lake Roosevelt, dead presidents, get it.
The Yanks got a plan that was drawn up in 1922 by the U.S. Corps of Army Engineers. This negotiation has the potential to unlock all the fresh water falling between the height land of the Coast Range & the Rockies & north to the great rift where the water runs into the Arctic. Maybe even that in a hundred years. (Site C).
You watch & mark my words: Ottawa & Washington will start off with low,low level bureaucrat negotiators, no problem, business as usual, no big deal, happy happy, lets move on to something important. Trust me, just sign here. The big boys don’t want this to escalate. Their nervous.
Canuckleheads have sold every natural resource off to whomever is the first to wave cash in front of their greedy beady little eyes. Their touchy about the one last thing in this country that they actually own.

#88 Nonplused on 05.09.17 at 2:37 am

#70 Smoking Man “Its a beautiful life”.

Except that we have reached overshoot now, as many smart people predicted. It’s Easter Island from here on in, possibly with nukes as we fight over what’s left.

The reason the economy is staggering and the war machine is at foot is because there are now currently too many people for the planet to support. This is not a new idea, it was forecast 40 years ago and probably 150 years ago. Well, some forecasts come true. Especially the most mathematical ones.

Finite resources and unlimited population growth leads to war. And now we have nukes. This site is all about planning for the future. Well here it is: We are all dead after the first missile goes off. And by “we” I mean every creature. A bomb shelter cannot save you what a waste of money. Instead move right under the target zone so it will be quick.

#89 Eurovision on 05.09.17 at 2:46 am

Short HCG big @ .50 for 30 days, you can buy whatever overpriced shack in T, You like, CASH!

#90 Dan.t on 05.09.17 at 3:49 am

Either the average Canadian is very rich or simply way smarter than anyone living outside its borders.

Are most just gaming the system. Take on massive debt, live like a champ and then all those debt pigs will just all get together refuse to pay it off? Just like buying houses together… is the mentality, well we are all in the same boat, what are they gonna do to us? Power in numbers?

Just trying to understand why people love debt so much and actually view it as a good thing (as long as you use it to buy real estate) …

Why is being a debt slave and bitch to the banks so exciting there?

I really would like to know what people there think because from outside Canada it seems nuts.

#91 Dan.t on 05.09.17 at 4:24 am

http://globalnews.ca/news/3434447/over-half-of-canadians-are-200-or-less-away-from-not-being-able-to-pay-bills/

Oh, ok, so 60% don’t understand how interest rates are related to debt… that explains it all.

#92 Looney Baloney on 05.09.17 at 4:36 am

What a sorry bunch of losers in that vid.. All going to get seriously hurt, possibly for life. Sad.
And what do I have to do to get the media to fawn all over my ridiculous ideas?

#93 investors are covered for $1 million on 05.09.17 at 5:59 am

#74 Pete on 05.08.17 at 11:42 pm

CDIC is a joke. I trust CIBC more than CDIC. CIBC has more than $300 billion in deposits, there is NO WAY whatsoever CDIC with a capital of $3 billion can bail out CIBC. I trust CIBC because it is too large to fail and government of Canada can’t let it fail. so your deposits with CIBC under 100k is safe, and your deposits with CIBC over 100k is also safe.

In contrast, investors are covered for $1 million. — Garth

Check your white privilege.

#94 J.Beaver on 05.09.17 at 6:06 am

DELETED

#95 phily on 05.09.17 at 6:09 am

#3 geez they can all solve their debt problems by following the prior examples of doubling or tripling up as they did in North Bramptom and overload services, schools etc., set in place for low density housing which was multi family.
Welcome to Canada

#96 Wrk.dover on 05.09.17 at 7:24 am

Plan B: eat the cat, eat the cat food, plant a garden in the litter box. After harvest the CDIC $ will arrive.

#97 Dominoes Lining Up on 05.09.17 at 7:30 am

An ugly view of personal finances for most Canucks:

http://globalnews.ca/news/3434447/over-half-of-canadians-are-200-or-less-away-from-not-being-able-to-pay-bills/

#98 Penny Henny on 05.09.17 at 8:19 am

It breaks GreaterFool cardinal rule #7: “Never buy real estate with anyone you have not slept with
//////////////

Just to be clear, if you must team up with someone to buy real estate sleep with them first and always use protection.

I think ‘house horny’ has a new meaning now.

#99 traderJim on 05.09.17 at 8:32 am

#21 Original Dave

I say a ‘few years’ for the crash. Doesn’t mean 33% increases for next 2 to 3 years. I believe we will see one more kick at the can (perhaps reaching March 2017 peak prices, maybe a bit more), then not much action ’til it all comes falling down.

Japan has shown that almost unbelievable debt levels are sustainable when interest rates are so close to 0.

We need higher rates for this to end, and as soon as cracks start to show rates will be lowered again.

Assuming Paul Volcker does not replace Yellen of course. Canada is just a sideshow.

#100 crowdedelevatorfartz on 05.09.17 at 8:33 am

@ Smartalox

Anti union Check
Work in the Gas industry. Check
Moved to BC about 15 years ago. Check
Stubborn as a bull : Check

Where exactly from Alberta are you from?

Just curious,
Have you googled BC Rail Scandal?
Its quite a read. Her brother and her ex husband were both working for the lobbyist company involved in the sale of BC Rail to CP Rail. The president of CP Rail also became a major campaign fundraiser for the liberals after the sale. The other competing company involved in te sale was US based Omni Trax. When they got wind of the back scene dealings they decided to pull outand THAT would have looked too suspicious. So a few paniced phone calls later and they were offered access to a rail terminal in the lower mainland to haul US coal for off loading onto ships The same coal trains that environmentalists and everyone else in the US banned from their ports….nice.
One would almost hope that the US Dept of Justice would take a hard look at all the ramifications of the BC Rail sale and its spin off deals. Because its obvious the BC RCMP would touch the investigation with a 10ft barge pole.
As an aside.
The RCMP signed the largest municipal multi year policing contract in its history to maintain police services in the Lower Mainland ( Surrey, Burnaby, North Van, etc etc etc.)at the same time the BC Rail trial was cranking up…….
The whole thing stinks……Rotten to the core. and Christy Clark is front and center.

So you see my simplistic one dimentional friend.
Christy Clark doesnt care who, how, when or where the cash is raised from.
Just so long as the Party (and ultimately her) benefit…….

#101 traderJim on 05.09.17 at 8:38 am

CIBC would of course be bailed out if necessary, but there’s a slight possibility that depositors would be made to take some part of the hit. Not really likely, but I wouldn’t rule it out completely.

Who cares about CDIC? Why would anyone have more than a few g’s in a deposit account? It’s really easy to buy short term, liquid government paper if you have that much cash to worry about. US or Canadian.

And if you worry about governments not being able to print enough to pay those off, guess you should be building a vault in the alps and filling it with gold.

#102 traderJim on 05.09.17 at 8:48 am

#86 Nonplused

“Finite resources and unlimited population growth leads to war.”

Finite resources? Are you serious? Are you unaware of the giant nuclear reactor that rises every morning and helps green things grow?

Technology will keep making higher yields possible, unless the regressives succeed in killing Monsanto of course.

You should also read Edward Teller on effects of nuclear blasts. Not that it’s going to happen, but you might sleep better when you really understand it.

Which reminds me, is it Trumpocalypse yet? Has little Kim obliterated the White House only to learn that the Donald was in New Jersey (where he prefers to stay, understandably)?

#103 Victor V on 05.09.17 at 8:54 am

Home Capital finds buyer for $1.5 million in insured and uninsured mortgages

http://www.financialpost.com/m/wp/news/blog.html?b=business.financialpost.com/news/fp-street/home-capital-announces-that-it-will-sell-1-5-million-in-insured-and-uninsured-mortgages&pubdate=2017-05-09

#104 traderJim on 05.09.17 at 8:58 am

Commodities (“finite resources”) are being hammered.

Oil, which was supposed to run out decades ago, is dirt cheap, especially if you adjust for inflation. And that’s with a cartel doing everything possible to raise the price, and the worlds largest reserves (Venezuela) being mismanaged, and a couple other huge producers being affected by war/revolution.

Technological advances will decrease dependence on oil to the point where we will never run out. 50 years from now oil will be cheaper than it has ever been before as it will be nearly obsolete.

Check out Julian Simon (The Ultimate Resource) regarding the myth of finite resources. There’s a guy who went against the consensus and was proven dead right in his predictions.

#105 Johnny Boy on 05.09.17 at 9:08 am

#42 TurnerNation on 05.08.17 at 9:44 pm

Here’s a suggested price list/donation list for SmokeFest -BlogDogFest2016 this Saturday.
(All proceeds given to a worthy charity or the bar tab at S.S. Johnny’s?)

$1 – picture with Bandit
$2 – picture with Gartho
$3 – picture with Smoking man’s Ford Ranger
$5- picture with Smoking man

In other news. VIX single-digit shocker to-day.
…………………………………………………………………
$100 – picture with Smoking Mans Crazy ass Hag of a wife.
My wife is coming on the back of my Hog!

#106 Zoe on 05.09.17 at 9:11 am

Garth, I have been following the HCG story quite closely and have a few questions I’m hoping you can help me understand:

1) The guy who bailed them out was a director of HOOP AND had financial interest in HCG – is that not a huge conflict of interest? I am surprised there is not more media coverage on that. Or am I misunderstanding that relationship?

2) What happens if HCG can’t pay the loan and claims bankruptcy? I am trying to research this but have no idea what to look for. All I keep reading is how people say that the Canadian Banking System is stable – would there be a government bail out? Would those HOOP pensioners lose their pension? What would happen to all the people who have mortgages with HCG?

I’d love to read a post from you about this. You have such insight to these things.

z

#107 Johnny Boy on 05.09.17 at 9:12 am

#99 traderJim on 05.09.17 at 8:38 am

CIBC would of course be bailed out if necessary, but there’s a slight possibility that depositors would be made to take some part of the hit. Not really likely, but I wouldn’t rule it out completely.

Who cares about CDIC? Why would anyone have more than a few g’s in a deposit account? It’s really easy to buy short term, liquid government paper if you have that much cash to worry about. US or Canadian.

And if you worry about governments not being able to print enough to pay those off, guess you should be building a vault in the alps and filling it with gold
…………………………………………………………………..
Gold is a waste of time, shiny metals that occupy mass and have inherently a weight to mass ratio that makes it impossible to provide mobile liquidity in times of trouble.

#108 Johnny Boy on 05.09.17 at 9:20 am

#94 Wrk.dover on 05.09.17 at 7:24 am

Plan B: eat the cat, eat the cat food, plant a garden in the litter box. After harvest the CDIC $ will arrive.
…………………………………………………………………….
Could pull a Walter White and Captain Cook!
“You see, technically, chemistry is the study of matter, but I prefer to see it as the study of change: Electrons change their energy levels. Molecules change their bonds. Elements combine and change into compounds. But that’s all of life, right? It’s the constant, it’s the cycle. It’s solution, dissolution. Just over and over and over. It is growth, then decay, then transformation.”

#109 Pete on 05.09.17 at 9:23 am

to traderJim on 05.09.17 at 8:38 am

CIBC depositors will always be made whole without losing a cent. the government will make ALL people pay. they will lower interest rate to 0% while inflation is at 2% and forcing everybody to take a haircut of 2% on their deposits EVERY Year. happened in the US already.

#110 Pete on 05.09.17 at 9:28 am

If the Canadian housing bubble burst, the government will lower interest rate to 0% while inflation is at 2%. and then you should buy US dollar. When USD hit 2.0000 per CAD or better, sell USD and buy Canadian stocks.

If Canadian rates hit 0%, we’d be in a depression. Will not happen. — Garth

#111 Pete on 05.09.17 at 9:44 am

to Garth:

Canadian rate is already at 0.5%. why can’t it be at 0%? US rates stayed at 0% from 2008 to 2015 for 7 years, were they in “depression” during those years?

The problem is when rates are at 0%, inflation is not. That is why they are basically making depositors taking a haircut. Like Cyprus did. only covertly.

#112 Hollywood Jack on 05.09.17 at 9:47 am

wow HCG now back to $8 bucks – housing crash postponed until further notice?

Or is it a dead cat bounce looking to take suckers in? Is this how Country Wide traded before it’s inevitable demise?

It sold $1.5 billion worth of mortgages. — Garth

#113 Ace Goodheart on 05.09.17 at 9:56 am

RE: HCG: They better hope they can sell those mortgages, or they’re heading for creditor protection. 13 billion in GICs maturing in the near future. Likely few will be re-investing. You can’t pay out 13 billion using a 2 billion 22% LOC, when your mortgage rates of return are less than that.

Hope OMERS folks have another source of income.

If this stuff is really subprime and garbage, then we have a pretty significant problem. 13 billion is a lot of money. Are taxpayers on the hook for this through CDIC and CMHC I wonder?

#114 Stan Broock on 05.09.17 at 9:58 am

Feeling good articles about HC from ‘investors’.

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

So sad there is no inverse ETF to short Canadian financials.

#115 Stan Broock on 05.09.17 at 10:02 am

It sold $1.5 billion worth of mortgages. — Garth

Just interested in who bought their mortgages? CMHC or a pension fund?

#116 Pete on 05.09.17 at 10:03 am

To Garth:

HCG sold $1.5 billion mortgage. but at what price? 60 cents on the dollar or what? they intentionally left out the most important part to sucker people in.

Home Capital actually IS a big deal in GTA. True, they have only $18 billion in loans, 1% of total Canadian loans. but 84% of that in Ontario, and among that 84%, most in GTA. I estimate they hold 3% of total mortgages in GTA and originate 3% of total GTA new mortgage.

Now that 3% of sucker mortgage buying power is taken off the table in GTA. go figure.

#117 fancy_pants on 05.09.17 at 10:04 am

sigh. queue your wallet. the fiscally responsible will be footing the bill for all this nonsense. losses are socialized in the name of equality. kumbaya.

and now back to my daily scheduled programming… lua, .net, java, js …

#118 Stan Broock on 05.09.17 at 10:04 am

Got it

http://www.cbc.ca/news/business/home-capital-tuesday-1.4106037

Home Capital to sell $1.5B worth of mortgages to mystery buyer
Savings account deposits down to $146M as of Monday, lender reveals

#119 Eurovision on 05.09.17 at 10:06 am

All in, super short HCG, WOOOOOHOOOO. This pig will buckle soon.

#120 Hollywood Jack on 05.09.17 at 10:07 am

#110 Hollywood Jack on 05.09.17 at 9:47 am

wow HCG now back to $8 bucks – housing crash postponed until further notice?

Or is it a dead cat bounce looking to take suckers in? Is this how Country Wide traded before it’s inevitable demise?

It sold $1.5 billion worth of mortgages. — Garth
———————————————————-
Wait a minute Garth are you saying the market is excited over issuing more what is likely bad sub prime loans into an already bubblicious housing market?!

Home Cap sold off a portion of its existing mortgage portfolio to a third party, thus raising cash. — Garth

#121 fancy_pants on 05.09.17 at 10:11 am

#110 Hollywood Jack on 05.09.17 at 9:47 am

yep. what are the odds the nasty ones were shuffled and wrapped up into AAA investments? hide the dirty $ in sweet smelling beavers

#122 IHCTD9 on 05.09.17 at 10:11 am

#27 I’m stupid on 05.08.17 at 8:48 pm

I hope the rest of the blog dogs have prepared for this because it’s going to happen sooner than you think. Good luck!
____________________________________________

Done. No mortgage, no debt; but that’s just step one.

These days, all big problems requiring brass ones that clank level decision making, are instead solved by throwing public money (read debt) at them combined with soothing CBC headlines, and a couple happy selfies. That of course puts us all on a path of higher taxes. They can kick the can down the road, but only by borrowing more, which only makes the eventual tax requirement even worse.

Step two is offsetting these new current and future taxes. Many things can be done to offset what you pay in taxes. Modification of the way you earn money yes, but especially how you spend it. Your consumption of conventional energy is another huge one. Dumping into RRSP’s is another biggie, claim all you can at tax time. Check out Kijiji the next time you need to buy something expensive – it’ll be there tax free, and at a huge discount over retail.

I’m not down for bailing out dumbass GTA homebuyers, or blockhead GTA lenders. When I see a mushroom cloud to the West, I can be sure our current crop of birdbrain politicians will be shedding tears for all the poor brokeass deadbeat Toronto homeowners living in their 600K houses with million dollar mortgages.

Natural consequences – when the SHTF in the GTA – LET ‘EM BURN. I’ll be out on the back deck with a cold one, watching the mushroom cloud reach a mile high. As it slowly disperses throughout the upper atmosphere, the long shadow of a nation-wide economic winter will descend. I’ll be heading back to the fridge laughing and shaking my head.

#123 Pete on 05.09.17 at 10:14 am

May I complain to the OSC about HCG’s selective disclosure? sold mortgages, but at what price? it is like telling your mother:” mom, I am getting married!”….

“yeah, with whom? a man or a woman?”

could we have some full disclosure please?

#124 Renter's Revenge! on 05.09.17 at 10:20 am

#105 Johnny Boy on 05.09.17 at 9:12 am

Gold is a waste of time, shiny metals that occupy mass and have inherently a weight to mass ratio that makes it impossible to provide mobile liquidity in times of trouble.

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

The weight to mass ratio of an object is not inherent. It depends which planet it’s on.

#125 Marcus on 05.09.17 at 10:23 am

Canadians are in a heap of trouble (debt) http://www.zerohedge.com/news/2017-05-09/half-canadians-have-200-or-less-savings “More than half of Canadians are living within $200 per month of not being able to pay all their bills or meet their debt obligations.”

#126 Hollywood Jack on 05.09.17 at 10:23 am

#118 Hollywood Jack on 05.09.17 at 10:07 am

#110 Hollywood Jack on 05.09.17 at 9:47 am

wow HCG now back to $8 bucks – housing crash postponed until further notice?

Or is it a dead cat bounce looking to take suckers in? Is this how Country Wide traded before it’s inevitable demise?

It sold $1.5 billion worth of mortgages. — Garth
———————————————————-
Wait a minute Garth are you saying the market is excited over issuing more what is likely bad sub prime loans into an already bubblicious housing market?!

Home Cap sold off a portion of its existing mortgage portfolio to a third party, thus raising cash. — Garth
——————————————————
wow this is US housing bubble part deux

only more of a debt loaded bomb – when will we learn.

the contagion will spread right to the Prime Ministers office!

#127 Another Deckchair on 05.09.17 at 10:31 am

@102 traderJim:

“Oil, which was supposed to run out decades ago, is dirt cheap, especially if you adjust for inflation. ”

True enough, but, one has to (somehow) figure in the cost of production in terms of energy, and the lifespan of a well.

All wells drop in production as they age, from (IIRC) 5% for conventional oil, to something like 40% for a fracked hole in the ground.

So, there has to be money spent up-front to keep drilling, to keep up with the inevitable production declines.

Is money being spent up front? if not, and declines take the excess off the market, and demand is greater than supply, what’ll happen?

Like it or not, renewables will not replace oil as fast as many would like.

#128 Julia on 05.09.17 at 10:38 am

HCG most likely sold the better quality assets and surely at a discount. Curious to know who purchased and at what price.
Question is whether the cash raised will be enough to prop it up long enough to start booking quality deals and turn around or will they just burn the cash and be left with lesser quality assets to sell at further discounts?

#129 Dreamer on 05.09.17 at 10:53 am

58 rates vs capital on 05.08.17 at 10:48 pm

Hey, where is VREU and the ‘coming collapse in prices following the collapse in sales’ in Victoria?

Seems Victoria is another market defying the willy coyote moment – market just keeps going up with bidding wars in even the surrounding communities.

I guess that whole jump in the number of foreign buyers from 0.6% to 4.7% – a seven fold increase – has no impact on the market. Its not like prices have gone up 25% in Victoria and the surrounding markets.

Anyone who followed her advice is eating crow.
*********************
A couple of weeks ago in Victoria, houses were selling but ever since Home Capital, the houses seem to be sitting. In Nanaimo houses are siting on the market, some have been there since last year.

When the party is over it is over – no one can stop the momentum not even a realtor or corrupt government. Even the US couldn’t stop it’s own decline, but you expect me to believe a Provincial government can? How old are you seriously? How many properties do you own? Time to seek an independent financial advisor to get you over the real estate mania. Or go down with the ship…thinking any government can stop what is about to happen.

Then there is China and the credit problems.

But you keep on spewing it out, if that makes the coming reality easier for you to deal with. All things end!
——–

That is some creative story telling – the proverbial tap has turned off! Just like that! What a market watcher you are. And backed up with so many stats!

Lol – the market is still cooking in Victoria.

#130 Dreamer on 05.09.17 at 10:58 am

Election time in BC today!

A Liberal win means 4 more years of even more ‘listening’ to the real estate industry. They are their largest donors.

And if they win, that means they will have the will of the people, and will ignore those pesky ‘whiners’ about affordability.

You will not hear about any more provincial measures to cool the market. The foreign buyers tax was just an election ploy to make it look like they were doing something. They will go back to business as usual. Tax will be gone guaranteed.

This market will be unstoppable after tonight. BC means bring cash. It always has and always will.

#131 dups on 05.09.17 at 11:07 am

Home Capital to sell $1.5B worth of mortgages to mystery buyer…

http://www.cbc.ca/news/business/home-capital-tuesday-1.4106037

Hemmm… are these subprime toxic mortgages? I am sure there are a lot of these floating in GTA and VanCity.

#132 traderjim on 05.09.17 at 11:12 am

#125 Deckchairs

If oil price goes up more wells will be drilled, more exploration funded, more alternatives found.

I agree oil will not be replaced anytime soon, because it won’t need to be.

#133 mike from mtl on 05.09.17 at 11:17 am

#112 Stan Broock on 05.09.17 at 9:58 am

So sad there is no inverse ETF to short Canadian financials.
//////////////////////////////////////////////////////

I believe there is:

TSE:HFD

#134 paulo on 05.09.17 at 11:23 am

#104 zoe

on your first one: on the face of it it looks like a serious conflict of interest particularly when one looks at the “vig” the had to pony up to get the cheese. that being said few people really know how bad it was or was not,once it all comes out it could quite possibly paint the guy as a white knite that saved the company.

on your second one: the street says the 2B loan is secured by 4B worth of Mortgages pledged as security, given hoops track record-very good i would bet they got the pick of the apples in the basket- i wouldn’t worry about them loosing a cent here, unless of course the
real estate market implodes, than all bets or off.

the wire says they,hcg are selling off 1.5B more today,looks like the start of a orderly wind down,my scribe says the BMO is figuring large here well see

#135 maxx on 05.09.17 at 11:30 am

#2 rainclouds on 05.08.17 at 7:51 pm

“Well since you ask………….

………Your Welcome”

Little is predictable over the course of 5 years, let alone 30.

Prognostication on a multi-decade time scale is, at best, rooted in probability theory. Boatloads of cloud shoveling. The DNA of energy agreements 3 decades forward could well resemble nothing we know today.

I’d place my chips and the “woodshed” on status quo.

You’re welcome.

#136 Simplyput7 on 05.09.17 at 11:30 am

#118 Hollywood Jack on 05.09.17 at 10:07 am

Home Cap sold off a portion of its existing mortgage portfolio to a third party, thus raising cash. — Garth

So, the ratio of poorer quality mortgages on its books increased because it gave the better quality mortgages away to a mysterious third party buyer. While still burning through millions of dollars each day as the number of HISAs and GICs also continue to decrease.

How exactly did this transaction make it a better company?

#137 Smoking Man on 05.09.17 at 11:47 am

Wow listings are flooding the market and accelerating in greater GTA.

Henny Penny whats going on?

#138 Livin Large on 05.09.17 at 11:58 am

Not according to what’s being reported Dups. $1B in uninsured mortgages and $500m in insured ones.

Just a case of selling off the meat with a littlemof the grissle to raise cash for the impending deluge of GIC redemptions.

#139 Penny Henny on 05.09.17 at 12:09 pm

#135 Smoking Man on 05.09.17 at 11:47 am
Wow listings are flooding the market and accelerating in greater GTA.

Henny Penny whats going on?

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

Not a whole lot.
Seems that the buyers aren’t out there looking anymore. So no use dropping the price. Can’t chase buyers who aren’t there.
The staged furniture is still in the house for a couple more weeks and if nothing happens by then I will pull it and wait until inventory drops a bit.
In hindsight maybe I should have taken the million dollar offer. We’ll see.

#140 Smoking Man on 05.09.17 at 12:24 pm

Perhaps this is why listings are going through the roof.

http://www.zerohedge.com/news/2017-05-09/half-canadians-have-200-or-less-savings

#141 Xbox Economist on 05.09.17 at 12:33 pm

Lol to all the posters who are trying to draw parallels between HCG and the US sub-prime meltdown. It’s not the same thing. There’s been no spike in mortgage defaults or delinquencies. Also, HCG has sold a portion of their mortgage book to raise capital. Must be amateur hour at GF today.

#142 Cto on 05.09.17 at 12:52 pm

120 IHCTD9
Let em burn’

I totally agree let those knuckleheads burn and sleep in the bed they made. They were just purely greedy and smug and when the s*** hits the fan they should pay for their consequences.
However the sickening nauseating truth is it our dumbass government will find ways a bailing them out which really sickens me. It’s enough to make me want to leave the country with everything I can, but alas I can’t.

#143 Capt. Serious on 05.09.17 at 12:57 pm

Irrelevant to the balanced portfolio presented here. Nobody should have 40% bonds. — Garth

Sure, but 20% is reasonable, and if you get 0% real on bonds, you’re talking (best case) 2.8% real return on a portfolio, and this needs to inform your savings rate when planning for something long off like retirement. That’s why I brought it up.
I know you believe it’s possible to exceed this real rate of return, which is a view.

Not a view, a proven fact. Nobody should hold 20% in 0% real-return bonds. — Garth

#144 TurnerNation on 05.09.17 at 1:00 pm

#131 mike from mtl – thanks for that mention.

(I come here seeking alpha wih zero hedge. A long term balanced port. + my short term trading.)

#145 Hollywood Jack on 05.09.17 at 1:01 pm

Looks like HCG was just a false flag and isn’t the proverbial cannery in the coal mine:

http://www.bnn.ca/home-capital-isn-t-the-canary-in-the-housing-coal-mine-cibc-1.746687

#146 Ron Maiden on 05.09.17 at 1:02 pm

#139 Xbox Economist on 05.09.17 at 12:33 pm

Lol to all the posters who are trying to draw parallels between HCG and the US sub-prime meltdown. It’s not the same thing. There’s been no spike in mortgage defaults or delinquencies. Also, HCG has sold a portion of their mortgage book to raise capital. Must be amateur hour at GF today.
——————————————————
Yep that’s what they were saying in the US too before the SHTF

#147 Trumpism on 05.09.17 at 1:09 pm

“Donald Trump’s ignorance is becoming more evident with each passing day. It’s laughable when pundits try to distill a Trump doctrine from his word salad. His own words illuminate the undeveloped space between his ears.” — David Cay Johnston

https://www.theguardian.com/commentisfree/2017/may/08/donald-trumps-ignorance-evident-by-the-day

#148 disclosure on 05.09.17 at 1:17 pm

#121 Pete on 05.09.17 at 10:14 am

May I complain to the OSC about HCG’s selective disclosure? sold mortgages, but at what price? it is like telling your mother:” mom, I am getting married!”….

“yeah, with whom? a man or a woman?”

could we have some full disclosure please?

It’s publicly traded company, why do you want disclosure? You need some privilege to know house sales prices, too.

#149 Julia on 05.09.17 at 1:19 pm

#139 Xbox Economist
Sure, they raised funds from the sale. But without knowing the quality of the assets sold, quality of the assets remaining or the discount on the sale there is no way to know if this transaction will actually prop up the business for long term survival or only keep the lights on long enough to allow for self liquidation or an insolvency filing.

#150 Victor V on 05.09.17 at 1:23 pm

#135 Smoking Man on 05.09.17 at 11:47 am

Wow listings are flooding the market and accelerating in greater GTA.

Henny Penny whats going on?

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

https://www.youtube.com/watch?v=Go3qHTSwUfc

#151 NoName on 05.09.17 at 1:23 pm

Sears catalog more revolutionary than Amazon, they say. I am not that old but i remember ordering from catalog in early 2000s…

http://bit.ly/2qYJGSX

#152 IHCTD9 on 05.09.17 at 1:32 pm

I’m in the industry and I’ve spent the last 5 years trying to diversify, it’s not an easy task. It seems every other industry is starving while mine is being showered with money. We’re so screwed and when everyone realizes it it’ll be too late.
____________________________________

The Ontario liberals have essentially gang-raped my industry and tossed it out into the back alley for the rats to have for breakfast.

350,000 manufacturing jobs vapourized on their watch and counting. GM will be gone the minute Trudeau stops handing out public funds to keep those 2700 jobs hanging around. Stelco and Algoma will eventually die off for good when the corporate flippers finally decide there is nothing left to pick off the carcasses. I expect more closures and consolidations in the lumber/paper industries as well. In many small towns, it’s a big paper or steel Mill that allows the town to survive at all. Without them, everyone goes on EI, and city hall goes broke.

Anything that consumes massive amounts of natural resources and energy (especially hydro) are doomed under Wynnie’s cement headed “activist” goofball policy. Wynne is living in outer space, let’s talk gender identity while a good 7000+ very high paying Union jobs are about to disappear.

Wynne is a horror show unmatched by any Premiere in the history of Ontario, if not all Provinces combined – ever. Rae was more popular than Wynne. When my job evaporates, hopefully the mincome program will be up and running Province wide. The Ontario Liberals would love my plan – they don’t mind paying me to stay at home and work under the table. Plus, if I don’t look for work, it keeps me off the unemployment statistics…

#153 IHCTD9 on 05.09.17 at 1:35 pm

#137 Penny Henny on 05.09.17 at 12:09 pm
_______________

Thanks for the honest update.

#154 Robert White on 05.09.17 at 1:41 pm

Rule #7 is a business negotiation that is off to a high risk start that will inevitably end with one partner expressing dissatisfaction & disinterest to the other partner within a few months of cohabitation. In brief, greater fools do not make for productive partnerships in sexual relationships, or business relationships. Clearly, none of the members of this blog would willingly partner with a greater fool that was dumb enough to fall for the ruse of greater fools cohabiting given that markets can remain irrational longer than greater fools can remain solvent. The risk is just way too high to be entertained as a logical investment. Taken together, we may all assume that ‘speed dating’ for mortgage partners is almost as stupid as buying subprime in the first place.

NOTE: I’m calling the top on ‘peak housing’ in Toronto & Vancouver just like Cohodes has been calling it for the last few years. Unfortunately, I can’t back that up with earnings like Cohodes can, and neither can anyone on this blog. Clearly, Cohodes is the reigning investment guru bar none.

R.

#155 Pete on 05.09.17 at 1:49 pm

A question for Garth:

Home Capital makes loans to customers turned down by banks because they have poor credit history or no credit history, or no income or no stable income, yet, its loan default ratio is much lower than banks. How is that possible? Is there something fishy here? If that is possible, then I suggest we get rid of the whole credit bureau system. Maybe the government should look into that.

#156 Travis on 05.09.17 at 2:02 pm

#89 Dan.t on 05.09.17 at 4:24 am
http://globalnews.ca/news/3434447/over-half-of-canadians-are-200-or-less-away-from-not-being-able-to-pay-bills/

Oh, ok, so 60% don’t understand how interest rates are related to debt… that explains it all.

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

Why we have issues with debt? Here is stuff I’ve heard/been told around the office:

-The government would never allow rates to go up, it would cause a 2008 style recession up here.
-The government would never allow rates to go up, their debt is through the roof too.
-Real estate is the key to wealth, just look at the lucky people who bought 50 years ago: they’re millionaires now, just for living in a house.
-I’m no penny-pincher. I don’t keep track of what I spend, I just swipe my debit card until the money is low, then I wait until payday, and if I really need something (like a night out) there’s credit cards.
-As long as you pay the minimum balance and a bit extra you’re okay. I mean, everyone has some credit card debt.
-“My new car saves me money, because the monthly I pay is lower than that of my old car. I negotiated the debt from the old one into the new loan.” “But doesn’t that extend the lifespan of your loan?” “Car debt is like a mortgage. You always have it. You may as well own a new car while you’re paying it, and if you get a lower monthly payment you’re golden.”
-My kitchen reno makes me money. Sure I have to pay extra on the line of credit now, but it’ll make double its money back once I sell, and I get granite countertops now too.
-(variant of above) The bank will only extend our line of credit if we substantially increase the assessed value of our home, so we had to get the granite countertops.

Basically Canadians have no discipline and no incentive to improve. When you ask “Do they plan on declaring bankruptcy eventually?” the answer is no, there is no plan. It will just happen on its own.

#157 Fuzzy Camel on 05.09.17 at 2:09 pm

NEVER take advice from a woman with short hair!! Buying a property with a stranger is the peak of stupidity.

What happens when you decide you’ve had enough of the stranger having loud sex at 2 am on a Tuesday night? Good luck selling your ‘share’ of the house. Might as well go sink your life savings in a time share built on a swamp.

#158 jess on 05.09.17 at 2:16 pm

“A Vancouver man whose company helps foreign buyers avoid the 15 per cent property tax is firing back at claims that what he is doing is illegal.

http://www.cknw.com/2017/05/05/metro-vancouver-man-offers-partnership-to-legal-skirt-foreign-buyer-tax/

#159 Looking on the Inside on 05.09.17 at 2:26 pm

It looks like the BC Liberals will win tonight.

For all of those who were sitting on the sidelines, its now time to jump into the market.

Everyone saw what happened to Vancouver, Metro Vancouver, Victoria and Kelowna prices in the last 4 years.

What do you think will happen in the next four? No material change in policy or economic conditions, so the price trajectory is onwards and upwards.

In this case, past precedent is an excellent predictor of the future.

#160 Waiverless on 05.09.17 at 3:05 pm

#157 Looking on the Inside

Mortgage rates will rise… people will suffer. Never bite off more mortgage than you can chew…

#161 Xbox Economist on 05.09.17 at 3:05 pm

#144 Ron Maiden

Yep that’s what they were saying in the US too before the SHTF
______________________________________

This isn’t to say that subprime lending isn’t an issue in Canada or that the housing market won’t rollover. But HCG’s collapse had nothing do with it making bad loans. On the contrary, they have a very low loss rate on their loan books. Their current problems stem from allegations of improper disclosure and a loss of confidence in management. Not the same as what happened in the US, despite your personal bias.

#147 Julia

Agreed. Time will tell.

#162 My wifes loathing on 05.09.17 at 3:11 pm

#155 Fuzzy Camel on 05.09.17 at 2:09 pm

NEVER take advice from a woman with short hair!! Buying a property with a stranger is the peak of stupidity.

What happens when you decide you’ve had enough of the stranger having loud sex at 2 am on a Tuesday night? Good luck selling your ‘share’ of the house. Might as well go sink your life savings in a time share built on a swamp.
……………………………………………………………….
This is close to what my older brother went through when he retired. My brother and his wife decided to downsize and purchase a beautiful condo off Yonge on Bloor street east. They both liked quite time to read and relax, attend theater, fancy dining and such. All of the owners and a few renters are essentially retired. Quite time? Not quite the neighbours fought constantly and don’t let the sellers tell you that you can’t hear your neighbours. You sure as hell can. We were over there one night when these lovely mid sixty neighbours lit into a massive brawl. This went on for 1-1/2 years and my brother and his wife have sold their place and moved up to Bradford and moved into their cottage. They have quiet time and hop on the GO Train for theatre. It suits them.

#163 AGuyInVancouver on 05.09.17 at 3:25 pm

How can the majority of people think the economy is in the crapper, yet still believe home prices will go up? That’s not logical.

#164 Lee on 05.09.17 at 3:36 pm

Tory/Wynne all but assured everyone today that the Yonge Street subway extension to Carvelle Road is close to being approved. 10 years of construction horror to follow up Yonge Street north of Steeles. I think prices have already factored in the subway so don’t expect any further price spike as a result. All everyone in that area talks about is how much their houses will be worth once the subway is approved. Prices can’t go any higher in that area. Houses are already going for 2-3 Million from highway 7 to Major Mackenzie. Nothing in that area under 1.2M, and that’s for a tear down.

#165 NoName on 05.09.17 at 3:46 pm

ship carrying sheep, sunk russian ship…

https://www.neweurope.eu/article/sheep-carrying-cargo-romania-sinks-russian-military-vessel/

#VladStrikesBack

#166 IHCTD9 on 05.09.17 at 3:47 pm

#140 Cto on 05.09.17 at 12:52 pm
120 IHCTD9
Let em burn’

I totally agree let those knuckleheads burn and sleep in the bed they made. They were just purely greedy and smug and when the s*** hits the fan they should pay for their consequences.
However the sickening nauseating truth is it our dumbass government will find ways a bailing them out which really sickens me. It’s enough to make me want to leave the country with everything I can, but alas I can’t.
___________________________

Yep – They get stupid, we pay the bill.

The sleeping dogs are waking up though. I’ve mentioned many times my efforts to cut my taxes paid at all levels.

The tradesmen I know make me look like an amateur. They really don’t give a **** who thinks what. They make big bucks, and a lot of OT, weekends, and holidays go into those big T4’s. They would get absolutely destroyed on income tax.

These guys will never work any OT after a certain point, because it’s just not worth spending Christmas Holidays working 14 hr shifts in the bowels of a Paper Mill just to give 52+% of it to the government. No one is interested in busting their ass for less than 1/2 pay, so the “system” has evolved to make it “worth the effort”.

Another area of [illegal] side cash picking up steam is curb-siding. The libs changed the Certification requirements for vehicles a year or so ago, and now it’s like a 96 page monster inspection.

You can fail if your sun visor won’t stay up on it’s own, or if your washer fluid is low causing an indicator light to go on. PVC valve dripping a little oil? Fail. Oil pan gasket weeping a bit? Fail. I know mechanics who (surprise!) are curb siders.

Regular folks are still learning that certifications are ridiculously stringent now, but after another year or two I expect perfectly good vehicles will be on Kijiji for scrap value because they need a $12.00 rear main seal.

Right now, recent buyers who bought as-is are getting hosed as they find out the hard way about the new changes. These are the guys with new parts still in boxes selling on Kijiji trying to cut their losses. Eventually sellers will need to either sell certified or it’s a scrap/parts value car.

There will be a premium asked for a used car sold cert, and a corresponding drop for the same car sold as-is. Curb siders are just going to RAKE IT IN LIKE NO TOMORROW, and I expect many new folks will try their hand at it.

I expect that with every move T2 and Wynne make, more will hit the point where they are pissed (like myself, the tradesmen, and the mechanics) and utilize their individual options to pay less tax, while keeping more of what they earned for their own households.

#167 BC_Doc on 05.09.17 at 3:48 pm

#141 Capt. Serious on 05.09.17 at 12:57 pm
Irrelevant to the balanced portfolio presented here. Nobody should have 40% bonds. — Garth

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

Holding 40% VAB is perfectly reasonable for fixed income exposure in a balanced (60-40) three fund portfolio.

Only if you enjoy lousy returns and higher taxes. — Garth

#168 oncebittwiceshy on 05.09.17 at 3:49 pm

Xbox Economist: “But HCG’s collapse had nothing do with it making bad loans. On the contrary, they have a very low loss rate on their loan books. Their current problems stem from allegations of improper disclosure and a loss of confidence in management. Not the same as what happened in the US, despite your personal bias.”

You are absolutely correct regarding the subject of their current investigation, but let’s be clear regarding the source of their obfuscation.

http://www.theglobeandmail.com/report-on-business/home-capital-brokers-alleged-fraud-bigger-than-estimated/article27110594/

“A group of 45 brokers suspended by Home Capital Group Inc. for alleged mortgage fraud generated nearly $2-billion worth of outstanding mortgages for the lender, twice as much as executives originally estimated, the company revealed Wednesday.”

The fact that they have had low loss rates is clearly a function of the rising home prices. Helocs can cover a lot of payments. The fact that the Big 5 banks weren’t interested in stepping in should give you some pause for concern about the quality of their loans.

Clearly confirmation bias works two ways.

#169 jess on 05.09.17 at 3:57 pm

mortgage-interest deduction —

How Homeownership Became the Engine of American Inequality

An enormous entitlement in the tax code props up home
prices — and overwhelmingly benefits the wealthy and
the upper middle class.(nyt)

By MATTHEW DESMONDMAY 9, 2017

#170 For those about to flop... on 05.09.17 at 4:15 pm

Pink Pollen falling in Surrey.

Despite a lot of people insisting that Surrey is booming I keep finding cases like this one of people who bought last Spring and now that they want their payday are being made to wait.

Forget about a payday,just get your money back and get on with life.

These guys paid a million flat and average houses prices in Surrey are down 5.5% yoy with a lot of people in the same boat they face a struggle to break even…

1653 156a Street South, Surrey

Apr 20:$1,149,000
May 8: $1,049,000
Change: – 100000.00 -9%

https://www.zolo.ca/surrey-real-estate/1653-156a-street

https://evaluebc.bcassessment.ca/Property.aspx?_oa=QTAwMDA3NkxTSg==

#171 TurnerNation on 05.09.17 at 4:54 pm

#82 Dan.t yup I’m in a class this week. At lunch maybe 15 people all discussing on their precious houses. How much they’ve made buying and selling, how much they could get! No word on Forever Homes.

Clearly Kanadians have kornered the housing market. They are so wise. Those riches deserve to flow.

#172 Eugene Khenkin on 05.09.17 at 5:00 pm

https://www.thestar.com/business/2017/05/08/toronto-is-over-housed-despite-overall-population-growth-report.html

Overhoused – not overpopulated!

#173 Eurovision on 05.09.17 at 5:13 pm

HCG most likely to hit another 20%, short squeeze, straight to .50 – reverse split.

#174 HCG on 05.09.17 at 5:36 pm

even a blind squirrel finds a nut every now and then

bought on the bullish engulfing pattern yesterday

now i know how it feels to be a house flipper …ha!!

#175 good grief on 05.09.17 at 5:39 pm

I believe that is a little pessimistic, but I wouldn’t bank on more than 3% real (I’m using 2.7% for my weighted portfolio) over the long haul from here. This isn’t 1981, heck it’s not remotely 2009 anymore. In 2009 I was throwing every spare dollar I could find into my index funds, now I’m glum.
……..

2.7%? WHAT?

cmon, selling calls on your portfolio will yield more than that

#176 Trumpocalypse2017 on 05.09.17 at 5:52 pm

TRUMP HAS FIRED FBI DIRECTOR COMEY!!!!!

Comey getting to close to the truth.

Total chaos ahead!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

#177 VanMan on 05.09.17 at 5:56 pm

I understand what all the fuss is about? It’s simple really…

The only ways that real-estate fever will be curbed in Van and TO is by a combo of the following:

– interest rates must rise by at least 1% annually
– over-leveraged borrowing must be derailed by the gov’t (who in turn force the banks to cap lending)
– AirBnb rules and regs must change to force long term rentals (massive issue in Vancouver and TO)
– Foreign investment loopholes must be closed
– Multi unit owners and speculators must pay a much higher tax on the purchase and sale of secondary units.

Population will continue to increase which means supply will continue to be an issue. Where the issue begins to lessen is when speculators and multi-unit owners have less of an incentive to do so.

#178 VanMan on 05.09.17 at 5:57 pm

I meant, I don’t understand what all the fuss is about…

#179 BC_Doc on 05.09.17 at 6:04 pm

#164 BC_Doc on 05.09.17 at 3:48 pm
#141 Capt. Serious on 05.09.17 at 12:57 pm
Irrelevant to the balanced portfolio presented here. Nobody should have 40% bonds. — Garth

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

Holding 40% VAB is perfectly reasonable for fixed income exposure in a balanced (60-40) three fund portfolio.

Only if you enjoy lousy returns and higher taxes. — Garth

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

Equities are for the return on capital in my portfolio.

Bonds are what I keep for return of capital.

Bonds are the zag that goes with the zig in my portfolio.

I also keep some GICs and high interest savings deposits in the fixed income portion of my portfolio.

For tax purposes, VAB is kept in my RRSPs– I’ll pay those taxes down the road.

I don’t hold preferred shares– too risky/volatile/complicated for a simpleton, I mean simple guy like me!

#180 april on 05.09.17 at 6:10 pm

#157 – Sounds just like a realtor.

#181 Wrk.dover on 05.09.17 at 6:21 pm

IHCTD9, that was some car story. That is a bigger story than people that always buy dealer stuff can understand!

#182 Joblo on 05.10.17 at 2:02 pm

“Poorer than you think” YUP!

After 150 years Kanada is more divisive, indebted, leaderless, interprovincial trade restrictive, socialist, less creative, less entrepreneurial and on and on. Solutions? BS social justice?
Confederation works for who?

Celebrate a failed country. I think not