Poorer than you think

In 2015 you could buy the average detached house in Barrie (90 km north of the Big Smoke) for $394,000. Two storeys, double car garage, backyard, trees, nice. “We’re the region’s best-kept secret,” the mayor said at the time. “And affordable.”

Well, fudge that. Last month the average detached in the town atop the Commuter Death Highway known as “400” topped $600,000 for the first time – a 36% year/year jump, exceeding the bloated growth rate of Toronto itself. Things were more extreme in at least two of the townships surrounding the city, where prices increased 51% in a year, soaring towards the $750,000 mark.

The median family income in Barrie is not quite $81,000 – the same as last year. Actually the same as back in 2015, when houses cost half. How could this be?

Well, there’s no talk around town of wild-eyed Chinese dudes waving chequebooks. No streets where every third house is investor-owned, vacant with weeds and dead newspapers on the walkway. No rampant speculation, flipping frenzy or teams of brokers specializing in assignment clauses. Just a lot of middle-class people buying above their means, mortgaging their families and utterly convinced they’re on a raging rocket to riches.

In other words, normal Canadian folks. Doing what average folks do – putting everything on one roll of the dice.

What has real estate has done to us? Created a massive wealth divide. On one side are people like Jamil and Linda – who four weeks ago sold their townhouse south of Barrie for $925,000, after buying it in 2007 for $290,000. They just invested $800,000 in a portfolio now forming the basis of financial security in retirement. “That was a no-brainer,” he says. “But we just got out by our teeth. The day we sold 12 other identical units came on the market in our neighbourhood. All but one, still for sale.”

On the other side of the ledger are all those people with houses and mythical pots of equity now starting to diminish – and precious little of anything else. In fact, the latest numbers are more sad than shocking. But I’m still shocked.

While 70% of Canadians own real estate, half of us couldn’t write a cheque for $500 and have it honoured at the bank. A survey by Ipsos just discovered 50% come within $200 of not having enough money to pay debts and bills each month. Incredibly, for 40% of people, the skating room is a mere $100. Worse, one in three already can’t pay their obligations and would find it impossible for handle an emergency of any kind. Or, for that matter, any increase in rates.

Speaking of interest, 60% of people admit they have no real idea how the rising cost of money might affect them. But with a majority sitting two hundred bucks a month from the brink, it could be epic. And what an indictment this is of the deluded middle classes of Barrie, of Kelowna, of Mississauga and Richmond. To topple this house of cards would take but a puff of adversity. Higher rates. Job loss. Personal reversals – a health issue, a dead car, a shot roof.

Some of this is definitely coming. US interest rates, increased twice in the last five months, will rise again in June and at least once more in the fall – certainly leading to an uptick in our mortgage costs, thanks to the bond market. The Bank of Canada is widely expected to start tightening its policy in early 2018, meaning an increase in everyone’s line of credit, car loan and variable-rate mortgage. After nine years of emergency rates, undisciplined Canadians have borrowed as never before, gambled everything on one asset, and are now out of time and cash. Yes, we have granite. But we have no money.

Meanwhile, denial’s everywhere. “Rates will never go up. The government won’t allow it.” “No politicians will ever kill the real estate market – we’d have a depression.” “Mortgages are good debt. The bigger the better as long as you can make the payment.” “Everybody has debt, so nothing will change. Besides, the bank approved it.”

The families in Barrie (and Burnaby) need to remember that a far richer country – the US – was powerless to stop, abate or heal a real estate crash caused by excessive debt and inflated prices. Trillions were spent, yet the slide continued. Recent events have also shown we don’t need a rate spike or a recession to scare buyers and bloat listings. Bubbles eventually burst. Markets inevitably revert. And debt always enslaves.

Depending where you own, you may still get out. Wherever you live, do not get in. This ship has sailed.

178 comments ↓

#1 Jonathan on 05.09.17 at 6:36 pm

Election night in BC… will be watching TV while thinking about all those extra For Sale signs that have popped up in recent weeks when I’m driving around

#2 Marcus on 05.09.17 at 6:39 pm

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.”

#3 Trumpocalypse2017 on 05.09.17 at 6:40 pm

FBI DIRECTOR GONE!!!!!

Trump’s bizarre “alternative facts” used to justify firing just as Russian connections were about to be exposed.

America is leaning heavily into fascism.

Trump will be looking quickly for military distractions from the domestic chaos he is unleashing.

PREPARE NOW!!!!

-food
-fuel
-rural shelter
-alternative currency and payments

THIS IS NOT A TEST!!!!!!!

#4 Once a boss, always a boss on 05.09.17 at 6:41 pm

Warren Buffet was recently asked about interest rates and Money Master himself said “interest rates are impossible to predict”.

So if Warren himself, can’t predict, how can this deplorable blog know any better?

However, momentum is a real force and the momentum seems to be with a flat-lined interest rate, so it will take some really special and unexpected to raise interest rates. Both in Canada and the USA.

Signed,

Bossman

#5 Jungle on 05.09.17 at 6:42 pm

How in the hell did a townhouse sell for almost 1 million in Barrie? WTF is wrong with people??

#6 too big to fail on 05.09.17 at 6:42 pm

While 70% of Canadians own real estate, half of us couldn’t write a cheque for $500 and have it honoured at the bank. A survey by Ipsos just discovered 50% come within $200 of not having enough money to pay debts and bills each month. Incredibly, for 40% of people, the skating room is a mere $100. Worse, one in three already can’t pay their obligations and would find it impossible for handle an emergency of any kind. Or, for that matter, any increase in rates.

Substitute “us”, “Canadians” to banks, financial institutions and you know a bailout is coming.

Too big to fail crowd.

#7 pathcontrolmonk on 05.09.17 at 6:43 pm

Meanwhile, Trump creates new investor visa to be pimped in China by Jared. The diaspora spreads.

#8 HoweStreet.com on 05.09.17 at 6:45 pm

Ross Kay on HoweStreet.com Radio:
Spring Market Timing, Bank Runs and CDIC.
Water quality and the value of homes.

http://www.howestreet.com/2017/05/08/spring-market-timing-bank-runs-and-cdic/

#9 When Will They Raise Rates? on 05.09.17 at 6:46 pm

Bubbles eventually burst. Markets inevitably revert. And debt always enslaves.

^ This.

#10 Smoking Man on 05.09.17 at 6:48 pm

Speaking of smoke on the horizon. Ship has sailed.
Mabey this lyric will help
…..
Hello? Hello? Hello?
Is there anybody in there?
Just nod if you can hear me
Is there anyone at home?
Come on now
I hear you’re feeling down
Well I can ease your pain
Get you on your feet again
Relax
I’ll need some information first
Just the basic facts
Can you show me where it hurts?
There is no pain you are receding
A distant ship smoke on the horizon
You are only coming through in waves
Your lips move but I can’t hear what you’re saying
When I was a child I had a fever
My hands felt just like two balloons
Now I’ve got that feeling once again
I can’t explain you would not understand
This is not how I am
I have become comfortably numb

#11 Georgia on 05.09.17 at 6:50 pm

http://news.nationalpost.com/news/canada/the-liveaboards-of-false-creek-vancouver-land-prices-are-so-high-people-are-living-on-the-sea-full-time

#12 The Limited Sage on 05.09.17 at 6:50 pm

So say CANmageddon does come about, what happens to the TSX/ ETFs tracking Canadian stocks and bonds?

Should my portfolio have reduced exposure in both, while opening it up more to worldwide exposure instead?

#13 Lulu on 05.09.17 at 6:51 pm

WE ARE DIFFERENT!!!!! WE ARE TORONTO……LOL

Does it sound familiar? Those who buried their head in the sand maybe it’s time to stick their head out and see what is it look like right now. We are just a 1st tier end , 2nd top city, not even the mid 1 tier. How can we withstand the rate raise and such. Yes, real estate is good as investment when you hold it for long term as your shelter, but not as commodity. people just don’t get it. History will repeat itself again and again without fail.

#14 When Will They Raise Rates? on 05.09.17 at 6:53 pm

Today’s post is prophetic.

I’m not one for government intervention, but most Canadians and politicians most certainly are; Which is why in light of what Garth posted today, I find it astounding that the government has allowed this situation to continue unabated.

The fallout when the bubble bursts will be spectacular.

#15 Harold on 05.09.17 at 6:55 pm

Govt must Crackdown on Dark Money to Create Housing Affordability

http://vancouversun.com/opinion/columnists/douglas-todd-vancouver-is-a-money-laundering-haven

#16 Nonplused on 05.09.17 at 6:57 pm

One thing we could do to help fix things is reduce immigration until the job market and new housing industry can keep up with the population growth.

I am not trying to be racist here, my parents were immigrants and I understand that a growing economy needs immigrants in the case where the local population is not keeping up. But those are not the days we live in. Growth is near zero, and looks to get worse.

I’ve expounded upon my idea previously that immigration rates need to be tied to the unemployment rate. If unemployment is high, immigration should be low. Let the people who are already citizens find jobs first. They are already citizens. Even if they are immigrants themselves they are already citizens, and we owe more to them than foreigners. They’ve been paying taxes, etc.

When unemployment is low and wages are inflating too fast, then you open the boarders up.

The problem is the economics of immigration are not equal. Many people around the world would see a dramatic rise in lifestyle if the came to Canada and got on welfare. It’s all upside for them. But by allowing excessive economic migration, we suppress wages and inflate housing.

The other way to look at it is to ask “where do Canadians immigrate?” By and large it is the US for those looking to work and cheap to live countries like Mexico for retired folks looking to stretch their dollars. A few go to Hong Kong, a few to Europe, sure, but most go to New York, Houston, or California. Why? Mostly because that’s where the money is. That’s why people are coming here too. More money. It isn’t the weather.

No government should be willing to set policies based on impoverishing their population, but yet that’s what we’ve got.

Minimum wage laws? You don’t need them when the population and labor demand is in balance. Carbon taxes? You don’t need them when people are earning enough to pay income tax. HST? Same. The problem is that the powers that be want high tax revenue and low wages, a 1+1=3 proposition that cannot work.

#17 wallflower on 05.09.17 at 6:57 pm

Bought pre-build in Barrie 2015.
Closing July.
Bought $300K. Recent sales of similar unit been around $500K.
Now, I need to ask a hard question.
Should I sell and take the cap gains hit; or, stick around and sell after ~2 years?
Bought it to live in. But… free money is pretty hard to turn down.

#18 mortgagebrokeron on 05.09.17 at 6:59 pm

Yup, don’t buy at these prices, but if you own and have debt other than a mortgage, do a refinance if you are not going to sell your home.

#19 akashic record on 05.09.17 at 6:59 pm

When will Canada get one like this?

https://beta.usaspending.gov/#/

#20 RentYVR on 05.09.17 at 7:00 pm

Meh, the BC Libs will win here again tonight (cause honestly as bad as they are do we really want the commies??) and the gong show/global casino that is the BC real estate market will continue.

#21 RentYVR on 05.09.17 at 7:00 pm

But yeah, Barrie is screwed.

#22 Fanny Heirloom on 05.09.17 at 7:01 pm

Yea, we have no money or savings, but we have home equity and we still get by..that is Canada.

People don’t want to save money because if they die then they had extra money they “wasted” because they didn’t spend it all. Plus they have credit if they need it.

#23 Linda on 05.09.17 at 7:03 pm

Would the fixed rates be raised first since they are linked to the bond market. While variable rates are linked to BoC.

#24 The Wet Coast on 05.09.17 at 7:04 pm

Hey Garth,

Regarding Richmond, and I assume you mean Richmond, BC. Steve Saretsky had this to say.

http://vancitycondoguide.com/richmond-politicians-have-failed-housing-crisis/

I have often wondered why you completely discount the role of foreign money in driving house prices in some markets. I came to the conclusion that your position is driven more by philosophy than by reality. That is, if global money comes into Vancouver and forces locals to take out huge mortgages they should move elsewhere, or rent as they have no right to live in the city in which they were born. It is really just a variant of your position on capital and labor should move to the most cost effective place. But, there is the underlying issue of tax fairness. Many of these folks are not paying their fair share of taxes, and that issue will not go away.

#25 old gringo on 05.09.17 at 7:07 pm

OMG, Trump just fired the FBI director.
When the FBI were investigating Trump.
I guess its true”you get the idiot you elect”.
This will not end well.
Run for your lives as the armed “deplorables” are about to go nuts.
Well, it does have entertainment value.

#26 crowdedelevatorfartz on 05.09.17 at 7:09 pm

Yup.
Total agreement on coworkers and friends that live pay cheque to pay cheque.
One guy just got a $6k refund from the CRA. Pay bills? Invest?
Nah…..financed a new truck while his teeth are rotting out of his head and chewing food is agony …hasnt been to a dentist in years.
Another coworker buys shoes when she’s feeling blue. She’s finished her 3rd divorce, not a pot to piss in or a window to throw it out of, makes about $20/hr and said the other day….” I cant afford to get sick…” No savings. She’ll work til she dies.
Friends….in the same boat.
I dont bother anymore.
They’re either too angry , too stupid or both.

#27 Spiltbongwater on 05.09.17 at 7:11 pm

I thought the ship sailed when my parents sold their Coquitlam house for 3/4 million in 2013. Now it would sell for 1.4 million. The greaterfool has been myself and everybody who believes this blog.

#28 Debtslavecreator on 05.09.17 at 7:12 pm

The market has definitely put in a interim peak in most areas for now
The big question is will this be a dip for 6-12 months of 10-20% and then new highs by 2020
Or is this the TOP
It is the top in real terms so expect the inflation adjusted value of most RE to steadily drop into the early 2030s
But nominal values will eventually recover
In late 2020s the typical Canadian who’s lucky to have a decent job will brag about his 3m detached house yet the property taxes are double or possibly triple today’s levels, the average weekly grocery bill will be 5-700 and many will lose assets for the slightest infraction or violation of a regulation as government gets more and more desperate and violent
Stagflationary depression

#29 For those about to flop... on 05.09.17 at 7:20 pm

Pink Pollen falling in Burnaby.

These guys still have a little bit of wiggle room, but I will put this one up for two reasons.

The first reason is this one is another example of someone getting carried away expecting 20% gains every year and getting too far ahead of the market.

They paid a whopping 1.388m for this condo in Burnaby when at the time the current assessment only came in a distant but still lofty 1.02m

The bloated 2016 assessment came in at 1,21m to close the gap but they still overpaid by a sizeable amount no matter how you slice it.

The second reason for posting this one will become evidential after you click on the link.

I’ve done a lot of these reports but (butt?) I was not expecting to see that…

M42BC

4302 4508 Hazel Street, Burnaby

Mar 4:$1,588,000
May 8: $1,500,000
Change: – 88000.00 -6%

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

#30 rainclouds on 05.09.17 at 7:29 pm

COMPETITION BUREAU VS TREB

Of Course IF the general population had access to the “mls data” That exists in the US (Zillow) perhaps the frenzy in Barrie et al would be tempered by the truth….

Since 2011 The Feds and TREB have been battling.
Is it shelved? Appeal? Abandoned? What happened ? Anybody……

https://www.osler.com/en/about-us/press-room/2016/focus-does-privacy-law-trump-competition-law-l

#31 cecilhenry on 05.09.17 at 7:30 pm

DELETED

(Sorry I missed the link to a white supremacist web site posted by this deplorable. — Garth)

#32 AK on 05.09.17 at 7:31 pm

“No streets where every third house is investor-owned, vacant with weeds and dead newspapers on the walkway.”
——————————————————————-
Welcome to Markham. Plus: This

#33 acdel on 05.09.17 at 7:34 pm

Interesting.

http://investmentwatchblog.com/former-reagan-administration-official-is-warning-of-a-financial-collapse-some-time-between-august-and-november/

#34 Chaddywack on 05.09.17 at 7:36 pm

“mythical pots of equity” so true Garth….

My sister in law is still bragging about her “equity.” Bought a Metro Vancouver house for $450k assessed at $751k now and she thinks she’ll get the same % appreciation this year as last.

“We won’t sell for less than $1.2M”

Guess she’s not selling anytime soon :)

#35 Derek R on 05.09.17 at 7:36 pm

Scary thing for me is what happens when Canadians finally stop borrowing. Suddenly a whole lot of money that was entering the economy and circulating is going to disappear. But the debt won’t. And the repayments will still need to be made, even at today’s low, low interest rates. But with no new loans adding new money, where are people going to find existing money to pay for food, let alone their debts?

When houses stop selling it’s not just going to hurt those with debt. We’re all going to feel the pain.

#36 meslippery on 05.09.17 at 7:37 pm

5 Jungle on 05.09.17 at 6:42 pm

How in the hell did a townhouse sell for almost 1 million in Barrie? WTF is wrong with people??
—————
Like Uxbridge is only $299,000
https://www.realtor.ca/Residential/Single-Family/18123272/8—1-TESTA-Road-Uxbridge-Ontario-L9P1M1-Uxbridge

#37 Nick on 05.09.17 at 7:40 pm

My friend just sold his 100yr home in Richmond Hill for 1.8 million. He bought it in 2009 for $500,000.

He is laughing all the way to the bank since he’s only 45 and investing it all.

His family is moving in with his mother in law in Vancouver.

#38 Ryan on 05.09.17 at 7:42 pm

I dislike how often Mr.Turner quotes these surveys. A survey is great if you want to know how participants answered the questions. But how true were the answers? Can we even apply the results to Ontario, or Canada? And using one study smells of confirmation bias. There are probably a dozen surveys saying the opposite. So these statistics don’t hold much weight in my eyes.
“People can come up with statistics to prove anything. 40% of people know that” – Homer Simpson

Housing is also stratified. Those million dollar houses can slide 10% and it only hurts the 1%ers. I make 80k a year and if houses slip 10% in Hamilton I’m buying and all of my colleagues would be jumping in if there were a 5% drop so they could get that magical landlord money. Mr.Turner is right about a correction taking a long time to happen. This seems glacial to me. At least my rent includes hydro and only increases by about 20$ a year.

#39 mike from mtl on 05.09.17 at 7:43 pm

#12 The Limited Sage on 05.09.17 at 6:50 pm
So say CANmageddon does come about, what happens to the TSX/ ETFs tracking Canadian stocks and bonds?

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

Bounds probably be just fine, preferreds tank (short term), and of course a TSE index ETF will tank. TSE is pretty much the banks and ancellreory as is.

look at what just tiny HCG did..

#40 crowdedelevatorfartz on 05.09.17 at 7:45 pm

@#3 Trumpocalypse2017

It’s a busy world in there isnt it Trumpy…..

The President firing an FBI director in the midst of an investigation into the White House dealings with Russia…..just might be an impeachable offense.

geez Trump lasted a whole 100 days before shooting himself in the foot

#41 crowdedelevatorfartz on 05.09.17 at 7:53 pm

@#3 Trumpocalypse2017

You know Trumpy. This whole FBI firing thing is a ruse.
The real issue is the explosion at the Hanford nuclear waste dump that happened today in Washington State

Try and keep up to current events baby!

Plutonium in the smoked salmon…..mmmmm, glow in the dark salmon…..niiiiiiice.

http://www.google.ca/url?url=http://www.latimes.com/nation/nationnow/la-na-hanford-nuclear-emergency-20170509-story.html&rct=j&frm=1&q=&esrc=s&sa=U&ved=0ahUKEwiw-bLxgOTTAhUD2GMKHUZoDC0QFggjMAQ&usg=AFQjCNGPoYrKpAIt8xnZ9r0XPrXO1930Mw

#42 Alex S on 05.09.17 at 7:55 pm

>How in the hell did a townhouse sell for almost 1 million in Barrie? WTF is wrong with people??

Tell me why would you buy a 2dr condo apartment which requires COMPLETE renovation with $850/month maintenance fee in Etobicoke for 480k?

WTF is wrong with people? You can rent comparable apartment for $1500/month. No long term commitments.

#43 Game Over on 05.09.17 at 7:55 pm

@ #10 Smoking Man

Ahhh what a great song.. Greatest guitar solo of all time!

#44 Alex S on 05.09.17 at 7:55 pm

Listing ID: W3762462

#45 WENK on 05.09.17 at 7:56 pm

And what an indictment this is of the deluded middle classes of Barrie, of Kelowna, of Mississauga and Richmond.

I DO NOT UNDERSTAND.

#46 Tony on 05.09.17 at 7:59 pm

We are at past the peak of the housing bubble and on our way down.
In 5 years prices will be 50% less then today. Automation will slaughter the job and housing market. In 5 years truck drivers and taxis type services will be automated. If you included other services like lawyers , accountants and many other professionals. People will look back and say wow Canadians were delusional.

#47 Rates vs Capital on 05.09.17 at 8:28 pm

What is happening in Barrie is the indirect and direct result of foreign capital – one of the biggest factors for price appreciation.

Its called the domino effect of foreign capital – or, more appropriately, the Vancouverization of communities since Metro Vancouver was ground zero for this phenomenon.

Foreign capital comes in and purchases homes – regardless of the prices – and overbid hundreds of thousands for any number of ‘unexplainable reasons.’ Remember, its not like Canada is now the 4th largest real estate money laundering country in the world.

Those people who sold and ‘cashed out’ go out to surrounding communities and bid up local prices just like foreign capital did in their former communities. These individuals just got a windfall, so what is an extra 100k or 200k for a nice place when you just had a ‘lottery winning.’

Accompanying those cashing out are all the affordability refugees that flock to the surrounding communities. They were unable to buy a $1.5 million dollar shack in Vancouver to Toronto. When they encounter communities with 400-500k houses, they have a warped sense of affordability – they see these communities as cheap, so they will shell out 600k or more. After all, they saw – and lived through – the reality to date that RE always goes up. Their fear of missing out then gets transplanted onto a new set of local buyers, who are now competing with people coming from other communities.

This process will just spread throughout BC and Ontario until the driver is curbed. As it spreads, the disjuncture between prices and incomes materializes, and you have another community scratching their head, saying ‘this does not make sense – who can afford to live here.” And on it goes…

Always look at the origin of the capital. Remember, 8% of marginal buyers caused a 32% national decline in US prices.

Why, then, would you assume that the supposed 5% purchases by foreign capital would have no impact on prices all all levels of the housing system?

You cannot suck and blow at the same time…

Nothing to support your theory but prejudice. You could have saved 400 words. — Garth

#48 Doug t on 05.09.17 at 8:29 pm

It’s all downhill from here folks – I hope your ready for at least ten years of lean times

RATM

#49 WhatsHisFace on 05.09.17 at 8:36 pm

I got a notice from a bank today that they were charging me a ten dollar fee for having no activity on my account. It’s my emergency fund – I bought some banker a couple lattes because nothing went seriously wrong.

I’ve got a couple years of living expenses saved and I’m debt free. I’m also a renter, so in my city, having no visible signs of wealth, I’m considered an undesirable.

Oh well, gotta go vote.

#50 S.Bby on 05.09.17 at 8:37 pm

A lot of houses coming onto the market in my area suddenly. It is quite noticeable when I see 5 houses for sale on one street.

#51 CV04 on 05.09.17 at 8:37 pm

Perhaps this has well known, but it wasn’t to me: According to a post on FWF (see below), a couple of the Home Capital underwirters fired got jobs at Equitable Bank leading to a huge bump in business there. How much more fraud is yet to be discovered?
http://www.financialwisdomforum.org/forum/viewtopic.php?f=33&t=119814&p=595547&hilit=Rizwan+Qureshi#p595547

Also, this Macleans article says it took CMHC around 9 months (!) to formally ask Home Capital for the names of the suspended brokers to see who else they worked with it and investigate other potentially fraudulent deals.
CMHC: so (not) on top of things. http://www.macleans.ca/economy/what-the-home-capital-crisis-reveals-about-the-housing-market/

#52 Pete on 05.09.17 at 8:42 pm

Garth is right. The lucky ones are the 1% who sold before the crash. Most people won’t and will sink with the ship to the bottom.

That is what happened with every housing crash in the past 100 years, in 1990s Japan, 2008 in USA, etc. etc.

#53 the new game in town on 05.09.17 at 8:56 pm

looks like the new game is to list at a high amount. then when it doesn’t sell list at an outrageously high amount. the sellers are forming an alliance. stay tough buyers. you worked hard for your money. these houses are garbage. take a look on trulia and see what you can get for your money in the usa. tell the sellers to go……

#54 FLHTK on 05.09.17 at 8:57 pm

I live in Barrie…..our house has more than doubled with the bubble….only problem is where do you go…sell high pay high….i’d love to take the 500k invest it for retirement and be done with it but not doable unless we move more north, which means longer commute times since I work south of Barrie and more hassle something I’m not prepared to do. The commute is already a killer.

So don’t buy. — Garth

#55 Random Punter on 05.09.17 at 8:57 pm

Garth, those breathing room stats are scarily similar to those in Australia. Noone has a dollarydoo to spare, yet all are convinced that their massive debt pile is the One True Path to riches. When this thing finally blows (and I’ve been waiting for 12 years now) it’s gonna be epic!

#56 Pete on 05.09.17 at 8:59 pm

And I am not so sure about the guy who sold his house for millions and is “laughing all the way to the bank” either. I got a friend who sold his house in 2007 before the US housing crash and got millions. bought some balanced portfolio composed of stocks like Citigroup, countrywide, Lehman brothers, Microsoft, etc. then the stock market crashed. gave his millions back to the same crooks who he screwed a year before.

Simple solution. Don’t buy stocks, or have all your net worth in a single property. Be balanced and diversified. — Garth

#57 @31 CecilHenry on 05.09.17 at 9:01 pm

DELETED

#58 Pete on 05.09.17 at 9:07 pm

Garth is right. The reason for this housing bubble is not foreign buyer or immigrants. we got 250k immigrants in the 1990s and most of 2000s too.

it is the ultralow interest rates, government encouragement of bubbles to boost economy and their re-election chances, lack of market discipline, fraud, the indifference of regulators, all in first degrees

#59 mathman on 05.09.17 at 9:08 pm

Inventory is starting to build quickly in the GTA, and once the first forced seller takes the low bid, the tide will start turning.

It anecdotal, but what I see is a disproportionate amount of former rental properties hitting the market trying to rope in a greater fool. Nothing over $1.5 is moving.

I fear those who were thinking about selling are now left to compete with others trying to rope in a finite number of remaining greater fools.

On the topic of Barrie – no sane person would pay that kind of money for the most soul sucking commute in north america. If you work in the area fine, if you work in Toronto you just signed away years of your life.

#60 fred on 05.09.17 at 9:11 pm

‘ This ship has sailed.’

………….

cmon, that’s my line

#61 Pete on 05.09.17 at 9:17 pm

Garth, I asked you a question today, you probably did not notice.

Home Capital makes loans to people turned down by banks, people with no credit history or bad credit history, no stable income or no income at all. How come HCG’s loan default ratio is a lot lower than bank’s? if that is true, then I say we get rid of credit bureau altogether.

Anything fishy here? I do notice HCG makes Home Renovation loans. so if you can’t pay your mortgage, here is a renovation loan. definitely something wrong here.

#62 When Will They Raise Rates? on 05.09.17 at 9:21 pm

#38 Ryan on 05.09.17 at 7:42 pm

I make 80k a year and if houses slip 10% in Hamilton I’m buying and all of my colleagues would be jumping in if there were a 5% drop so they could get that magical landlord money.

———————————

BS.

Hamilton is up 16.9% in the LAST QUARTER ALONE. Why weren’t you and your colleagues buying properties hand over fist to get that “magic landlord money” then???

Riiiiiiiiiiiight.

You aint buying sh*t if Hamilton goes down 5%.

#63 What an idiot I am on 05.09.17 at 9:23 pm

In 2015 you could buy the average detached house in Barrie (90 km north of the Big Smoke) for $394,000.

——————————————————————-

Renters on this blog should have bought back then rather than anticipating lower prices. Are they still anticipating lower prices?

People should buy when they need property, and can afford it. How hard is that to fathom? — Garth

#64 Pete on 05.09.17 at 9:24 pm

If I were the head of OSFI, there would never have been this bubble. my policy is simple:

if your mortgage interest rate is below 4%, then amortization must be within 20 years;
if below 3%, then maximum amortization is 15 year.

no bubble.

#65 jas on 05.09.17 at 9:27 pm

just over 2 more hours to know the outcome of BC election.
No excitement in either outcome because both will be equally useless for us and voters don’t seem to bother. Oh! we will get what we deserve.

Sickening to see the indifference of people towards their own future !!

#66 I know I know on 05.09.17 at 9:27 pm

Don’t even dare suggest foreign buyers or massive immigration helping to plump prices on this blog. It’s racist!

Mention it all you want so long as there are facts to support the argument. Otherwise go to HuffPost and relieve yourself. — Garth

#67 Welcome to Slurrey on 05.09.17 at 9:34 pm

#27 yeah your right , but its hindsight bias. I used to laugh at people in 2013 and boast how people wont pay a million for a home in slurrey and how homes would never reach that price ……i was wrong. Either way turner is right, you cant put everything in one asset , its risky but in the case of yvr real eatate risk = reward.

Only if you sell. — Garth

#68 Comey Gone Homey on 05.09.17 at 9:52 pm

CNN is hilarious. They are having a meltdown with Russians under every rock.

Sometimes a cigar is just a cigar and a goof is just a goof. Comey shot himself in the foot when he became part of the story. Trumps right; Hillary got a free pass.

Democrats are funny, Trump fires the guy they all hated and they still want to scream about it.

#69 Sitting on the toilet thinking on 05.09.17 at 9:53 pm

Quick question Garth, HCG sold 1.5 billion dollars worth of mortgages today to a “mystery” buyer. If HCG is a publicly traded company don’t they have a legal responsibility to disclose how much of a discount they sold their mortgages at and also if the “mystery buyer is a pension fund or a publicly traded company don’t they they also have a legal responsibility to disclose the purchase?

In time, yes, but not as the events occur. — Garth

#70 Smoking Man on 05.09.17 at 9:53 pm

Dogapaluza on Staurday

My call.
22 blog dogs.
2 CSIS Agents
10 CRA millenial goofs with glasses and hidden tape recorders.
10 never posters wearing disguises, just curious.
1 Sherly Valintine

Last one scares me the most.
…….

Dogs, predictions?

#71 just the facts Mam on 05.09.17 at 9:58 pm

Fact:
in Ontario lumber costs 7% more today than
8 months ago
so ya’ll hold your breath for the ‘correction’

#72 bdwy sktrn on 05.09.17 at 9:59 pm

all hail queen christy.

libs win thanks to the greens splitting the commie vote.

#73 viorelli on 05.09.17 at 10:04 pm

This is why I had diversified from Canada in 2009, I saw the train wreck and what happened down in USA. Sold most assets in Canada except the principal residence in Vancouver and bought a mixed use building in Portland Oregon (was held by the bank), 3 commercial units and 16 residential upstairs. All rented and fairly new, built in 2007. Now the returns are in USD, $40% and the building had appreciated dramatically since then. Canada will be like another Greece without the weather within 5-10 years, the writing is on the wall. Get out while you still can

#74 45north on 05.09.17 at 10:08 pm

They just invested $800,000 in a portfolio now forming the basis of financial security in retirement

this blog is written to tell whoever that housing is not a retirement strategy. It takes at least an hour a day to write and moderate, my estimate is it takes $1000 a year in out-of-pocket expenses. For no return.

#75 conan on 05.09.17 at 10:12 pm

First and last time a tv personality, without political experience, gets the big job. I am thinking Trump had to do this to buy time. Time from what though?

Sens……..nice
Phaneuf….more then a pylon.

#76 IHCTD9 on 05.09.17 at 10:13 pm

#58 Pete on 05.09.17 at 9:07 pm
Garth is right. The reason for this housing bubble is not foreign buyer or immigrants. we got 250k immigrants in the 1990s and most of 2000s too.

it is the ultralow interest rates, government encouragement of bubbles to boost economy and their re-election chances, lack of market discipline, fraud, the indifference of regulators, all in first degrees
——-

Yep, not to mention most immigrants come here with jack squat 30-40k, even HCG wouldn’t give these folks a loan.

I hate to say it, but the folks pushing these stupid prices along will require the ultimate financial ass kicking of the century to snap them out of the fog they live in. Fear and greed won’t be turned around by mere metrics and statistics.

They’re going to need to see their neighbours and co workers getting gutted. It won’t be until blood initially starts trickling along the gutters in their own hoods before a first glance is finally cast towards the potential downside of owning three speculative properties, or being mortgaged out the wazoo. Eventually, all those specuvestors will have their “oh shit!” moment, and a sure thing then turns into the biggest financial mistake of their lives – just like that.

Hopefully, there can somehow still be a soft landing, but I’m getting less confident about that possibility the longer this thing carries on…

#77 45north on 05.09.17 at 10:14 pm

Don: from yesterday: A couple of weeks ago in Victoria, houses were selling but ever since Home Capital, the houses seem to be sitting.

that got my attention

#78 Steve French on 05.09.17 at 10:19 pm

For the Smoking Man:

“Like most others, I was a seeker, a mover, a malcontent, and at times a stupid hell-raiser. I was never idle long enough to do much thinking, but I felt somehow that some of us were making real progress, that we had taken an honest road, and that the best of us would inevitably make it over the top. At the same time, I shared a dark suspicion that the life we were leading was a lost cause, that we were all actors, kidding ourselves along on a senseless odyssey. It was the tension between these two poles – a restless idealism on one hand and a sense of impending doom on the other – that kept me going.”

― Hunter S. Thompson, The Rum Diary

#79 45north on 05.09.17 at 10:23 pm

Rates vs Capital: Its called the domino effect of foreign capital

or just the domino effect of capital

#80 chrisgo on 05.09.17 at 10:24 pm

I wonder what the end mean of your blog is. I suppose it’s to gather more money for yourself. But why do you need more than what you have?

#81 Smoking Man on 05.09.17 at 10:33 pm

Jesus.

One of my best buds, an old greying wizard of music would tell me to jump of a bridge with this on the buds.

https://youtu.be/dQsjAbZDx-4

Abba is not that bad Roger.

#82 Smoking Man on 05.09.17 at 10:42 pm

I may have a hag.of a wife. Met her when she was 17
I was 19. I’m such a bad ass.

We are in our 50s now. Yeah she is stIll a bitch. All woman are bitches. That’s why real men love em.
I would not change a thing. Love dogs. Figure it out.

Abba again. I’m wasted

https://www.youtube.com/watch?v=92cwKCU8Z5c&sns=em

#83 Cdn Mom on 05.09.17 at 10:49 pm

People really need to get out more.

We just sold our house, in “northern” Ontario, 1.5 days on the market…for well under $200,000. We bought for well under $100,000 in 2003. We were thrilled to see a return on our sweat equity, for a house we never intended to leave.

Central city location, great (mixed age) neighbourhood, max 20 minute commute to anywhere in the city, two blocks to nearest school. New custom built cabinets/kitchen, solid structure, 3 bedrooms, 2 full(y renovated) baths, family room, original hardwood, dry, finished basement, built end of the 40s. No slants, but a beautifully landscaped large lot with a pond, detached, heated garage, and a 10 x 20 screened gazebo. Newer furnace and roof. In a city where it’s still possible to raise a family on a single, blue collar income.

We’re only leaving to live on the largest lake in the world. And THAT place cost even less than we sold this one for.

You guys out west and down south are doin’ it wrong. Use your house to live (well), don’t live to use your house. And sell your soul to the bank.

#84 Hans on 05.09.17 at 10:49 pm

70% of people own in Canada, yet 45% of properties are tenanted in Toronto. 50% are within $200 of not being able to pay bills – yet how much of the population surveyed were on a form of assistance – Ontario Works, Disability Support etc. Everyone seems to be playing hard and fast with stats, shaping the numbers and rationale to suit their thesis. The bubble is undeniable, however for every buyer there is someone else cashing out. What an opportunity for those in the position to profit from an unbalanced market! For the rest of us who need a roof over our heads – we’re stuck in it like the frog in water that’s heating up. Realistically and reasonably – most are stuck due to employment, education, children, family, etc. So sit back and be smart – these are unusual times that will eventually come to an end. How many years have people been calling for this to end – so no one knows. Are we near the end? Maybe, probably, but if you have a coin handy we would probably beat most pundits calls on BNN.

#85 East Ender on 05.09.17 at 10:51 pm

What is happening in Barrie is the indirect and direct result of foreign capital – one of the biggest factors for price appreciation.

Nothing to support your theory but prejudice. You could have saved 400 words. — Garth

Sure. When someone starts making sense – and – if you don’t like it – call him names.

#86 rates vs capital on 05.09.17 at 10:53 pm

Don: from yesterday: A couple of weeks ago in Victoria, houses were selling but ever since Home Capital, the houses seem to be sitting.

that got my attention
———

Riiiiggghhht – like every seller and buyer is an astute market watcher and keen student of economics and finance.

They are all waiting with bated breath to see what happens with HCG. If that is the case, that means all the buyers in recent years were financially literate, and not the uneducated, emotion driven plebs lusting for houses.

By the way, HCG looks like another non-event in the 7 years of seasonal head fakes in the market. Anyone tired of this yet…

#87 Cdn Mom on 05.09.17 at 10:53 pm

I should add that for $189, I can get a return flight to downtown Toronto. It takes 15 minutes to get to the airport, and the flight is 45 minutes. That’s faster than driving from Guelph to downtown Toronto. And I can just do it for the day if I want, no hotel needed.

#88 Quebec is Great on 05.09.17 at 10:54 pm

Re #70

46 Blog Dogs
2 CSIS Agents
102 Never Posters
Brad Lamb
40 Angry “Real Estate Always Goes Up” recent buying speculators
CBC, Mark Cohodes and VICE Magazine
Maybe Rick Mercer and Mark Emory will even show up to complete the circle and turn it into something resembling a Canadian Burning Man Event before Garth kicks you all out for getting too rowdy. One can always hope.

#89 45north on 05.09.17 at 10:54 pm

President Trump fires FBI Director James Comey:

what the hell is going on?

http://www.cnn.com

#90 What's next on 05.09.17 at 10:57 pm

So Mr.Turner what’s next.
I am not a doomer, nor a gold licker, just a normal canandian worried about the future,
Been following this blog for a long time, and now I finally believe your prediction is coming true and soon. Been reading about this could a major correction 30 to 50 percent. And even this crisis could start hurting the big banks. Sub prime is a dirty secret here, maybe worst than America.
I understand balanced diversified portfolio. My portfolio is up 7 percent in four months, my TFA is almost $100,000. But to be honest I am worried, very worried.
What’s next???
Bubble bursts, stock major correction canandian dollar 50 to 60 cents. Then housing crisis affects construction and employment and it’s getting ugly.
So besides balanced diversified portfolio
What happens next?

#91 Smoking Man on 05.09.17 at 10:57 pm

When you’re pissed out of your mind.
Noone around.

This dance works for me
https://youtu.be/dzlcxN0lxSo

#92 Where's The Money Guido? on 05.09.17 at 11:02 pm

Re: #64 Pete on 05.09.17 at 9:24 pm
If I were the head of OSFI, there would never have been this bubble. my policy is simple:

if your mortgage interest rate is below 4%, then amortization must be within 20 years;
if below 3%, then maximum amortization is 15 year.

no bubble.

But OSFI is corrupt also, so you get them overlooking liar loans, and when TSHTF they won’t do a thing for you. Coast Capital just hired one of them along with a lawyer from BC Hydro to play with the rules of liar loans.
I can tell you from experience from the 2008-2209 crash, IIRC,OSFI, MFDA, all in cahoots to steal your money.
You’re on your own, sell, sell,sell, NOW!!!!

#93 For those about to flop... on 05.09.17 at 11:06 pm

#82 Smoking Man on 05.09.17 at 10:42 pm
I may have a hag.of a wife. Met her when she was 17
I was 19. I’m such a bad ass.

We are in our 50s now. Yeah she is stIll a bitch. All woman are bitches.

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

Joking Man, you better state that Mrs Flop is not a bitch in your next post or I will pop that zit on your nose on the 13th while NoName holds my ice cream…

M42BC

#94 rates vs capital on 05.09.17 at 11:06 pm

It truly is amazing that the influence of foreign capital is so heavily denied when simple google searches yield provincial data and academic research on the issue.

First, it was apparently ‘racist’ to discuss foreign buyers – I did not know ‘foreign’ is now a race – you better tell the Americans, Chinese, and British buyers they are all a race now; then foreign capital purchases were restricted to the higher end of the market which apparently has no impact – its not like once a house sells for a high price that the next neighour selling says, ‘that was too much, I will lower my price for local buyers’; then foreign capital purchases were apparently restricted to certain neighbourhoods which then morphed into certain cities – provincial data, not the real estate franken numbers, showed 20% or more of purchases in cities like Richmond and Burnaby were from foreign capital.

Always keep in mind this simple fact – provincial data, not realtor franken data, showed foreign capital constituted over 20% of purchases in communities like Richmond and Burnaby.

http://www.theglobeandmail.com/news/toronto/ontario-isnt-moving-fast-enough-to-track-foreign-buyers-observers/article34074430/?utm_content=buffer64ac7&utm_medium=social&utm_source=twitter.com&utm_campaign=buffer

“The best and latest data – provided by Toronto’s private real estate board last month – peg international citizens as representing almost 5 per cent of all home buyers last year. For years, B.C. relied on similar industry-provided data that showed foreign investment in the single digits, before it modified its land-transfer documents last spring to force buyers to disclose whether they are a citizen or a permanent resident of Canada and, if not, where they hail from.

Cameron Muir, the economist in charge of tracking B.C. housing prices for the province’s real estate industry, says until the government heeded his trade association’s call to begin collecting this information, realtors provided some of the best data. Still, surveys of real estate agents are not complete enough to inform official policy or assuage public anger over the murky role foreign money plays in a hot market, he said.

“The issue is welling up in Toronto the same way it did in Vancouver … The government collecting accurate data on the extent of foreign ownership would be a really good way of at least having the focus on actual data rather than supposition, which was rampant in Vancouver before the government monitored it.”

In B.C., the first 2 1/2 weeks of foreign-buyer statistics surprised the government by showing pockets of investment – such as double-digit percentages in the suburbs of Burnaby and Richmond – that were much higher than previous estimates. After this first tranche of data, B.C. secretly went to work on the tax that would help flatten a market that was already cooling.”

#95 traderJim on 05.09.17 at 11:10 pm

New drinking game: Drink a shot every time a blog dogger claims Trump will be impeached and/or the world is ending.

That will be tough enough on anyone’s liver, so I won’t suggest drinking every time the housing market crash is said to be imminent.

#96 millmech on 05.09.17 at 11:18 pm

#49
Hey wait a minute,that ten dollar no activity fee counts as an activity! Get your ten dollars back every time they take it out.

#97 Space Dust on 05.09.17 at 11:22 pm

#70 Smoking Man on 05.09.17 at 9:53 pm

Dogapaluza on Staurday

My call.
22 blog dogs.
2 CSIS Agents
10 CRA millenial goofs with glasses and hidden tape recorders.
10 never posters wearing disguises, just curious.
1 Sherly Valintine

Last one scares me the most.
…….

Dogs, predictions?
..
You flying in from Antigua for the big bash?

#98 Linda on 05.09.17 at 11:36 pm

Regarding the close line so many families tread – could not write a cheque for $500 & have it honored at a bank; are within $200 or even $100 of not having the funds to cover expenses etc. I recall that for the first 5 years of our mortgage I had a princely $10 (ten dollars) left over to spend as I chose after paying the bills every payday. I was paid biweekly so my monthly free cash was less than $22 per month. For 5 years. Now, part of that was due to an iron clad determination to pay down that mortgage asap. The goal was within 15 years as the interest saved would be considerable. We succeeded in achieving that goal, but for sure any job loss or emergency requiring cash would have been a big issue. My point is, with so many people buying & taking on huge mortgages, I’m not surprised so many are living so close to the edge. We were lucky; here is hoping those folks will be too.

#99 CIBC made big mistake on 05.09.17 at 11:46 pm

CIBC bought alot of HCG shares before the drop.

https://twitter.com/Keubiko/status/862102078642061313

#100 Future Expatriate on 05.09.17 at 11:46 pm

Whether he blows it all up or not, today was the first day in the end of the Trump “Presidency”. Good news or not depending on how many sane people can get between him and the nuclear codes.

The only adminstration collectively stupid enough since Nixon to CHANNEL Nixon.

#101 Bill on 05.10.17 at 12:22 am

http://globalnews.ca/video/3435695/over-half-of-canadians-are-200-or-less-away-from-not-being-able-to-pay-bills

That’s crazy….what the hell are people thinking!? Their not…peoples desires outweigh their brains.
I thought I was doing way better then average because I do the opposite of most people financially….I was wrong…I’m waaaaay better off then the avg clown…guess I’m in the top 4%. I worked for the phone company then built businesses. Its not how much you make its what you do with it.
If we have another financial glitch the bus is going into the river….wake UP people you cant afford all that crap the tubes telling you you deserve and need to buy!!!!!! Just like house horny TV…Your way over your head.
I can get $200k tomorrow morning.

#102 Tony on 05.10.17 at 12:24 am

Re: #36 meslippery on 05.09.17 at 7:37 pm

Those townhouses were selling at $180,000 or less eighteen months ago.

#103 bdwy sktrn on 05.10.17 at 12:36 am

oh nooooooooooooo!

#104 b riding dirty on 05.10.17 at 1:02 am

2018 op of the bull market in houses for t dot. smokingman said this almost two years ago. g man you said it was peaked and over back then.

i respect you but a man know whens to say he was wrong and advisor should know when to stay out of advising on things he may believe but may not truly know all the facts on.

your reason on not spending more then you make works for the poor and dumb, i always look for your advise for the rich and want to feel powerful to the dumb.

we who held out in van who read this and followed this greaterfool blog drank the koolaid and missed out on the sunny d,

thank god for me i gave in to wife preasure and bought in 2015 or i would have been in rental housing bidding wars and priced out of the market.

would apppreciate a post on who will lead this country forward.

or just a delete of comment post will be fine,

thanks

#105 paulo on 05.10.17 at 2:27 am

#85 east ender:

what is happening in barrie has nothing to do with Chinese dudes, Russians,or any other foe boogie men/women.
it’s all about greed stupidity artificially low interest rates and questionable mortgage underwriting .
as a long term resident of Barrie with fairly good network of friends connected the picture i see is:
30% of the action is players from Toronto some having cashed in,some speculating.
60% is locals yep gold old boys and galls buying up everything in the belief they will be winners as speculators or rookie landlords. i know a handful of locals that have bought 2,3,4 properties a couple of them more than suspect as in i have no idea how they got the paper bought,they are mortgaged to there eye brows. the market here in Barrie has stalled 400 plus listings and quickly climbing,no or few buyers apparent,i guess a couple of trips up and down demolition alley aka hwy 400 scared them off, also realizing that they can not practically play the novice landlord/speculator game and achieve positive cash flow also contributed. a interesting side note is the fact that city hall is having cash flow concerns as about 20% of property owners are in arrears on property tax installments. taxes are high as there is very little industrial tax base,we are essentially a residential area- the local job market blows mostly service/seasonal and residential water rates are enough to give you a heart attack. our down town core is a wasteland but we do have 5 yes count them 5 methadone clinics.

#106 Jane24 on 05.10.17 at 3:17 am

Well my sister got out. Three bed semi in C04 Toronto, staged to the ninth degree. Listed at $1.2 million, went for $1.4 million. They were disappointed that only three offers showed up on offer night as a super hot downtown neighbourhood. Agent told them that even C04 is coming off the boil. I told them well done. No conditions.

They are now renting and traveling the world for a couple of years. You never know what is in the future so you may as well enjoy it.

#107 Ripe for an External Shock on 05.10.17 at 3:23 am

Trump could be that external shock.

He may start from a BAT on all things Cdn. in re-negotiating NAFTA. He is unpredictable. Today he fired Comey. Tariffs on softwood lumber. Ross is a shark vs. Mary had a Little Lamb named Trudeau.

Besides, the US is that 300 lb Canary going down the back alley at night saying “here kitty, kitty, kitty” from a GDP perspective. The tail (Canada, Mexico) does not wag the dog (US under Trump & Ross).

Yes, yes, supply chains etc. Business will adapt as it always has. Trump will just say rebuild them using US companies instead as they were rebuilt in the mid-80s to late 90s as NAFTA unfolded.

External shocks like that happen, hopefully not now as Canada with its high debt load population is vulnerable, very vulnerable.

And I think Trump & Ross know that and they may stick it to Canada and Trudeau knowing Canada has much more to lose than the US.

#108 Eurovision on 05.10.17 at 4:43 am

My guess, investment will shift to
recreational property, technically it can be considered a primary residence on top of owning a crip in town.

#109 Dan.t on 05.10.17 at 4:45 am

There is no way to reason with Canadians about real estate. Real estate is religion. Fundamentals don’t have to make sense anymore.

Part of this religious real estate belief is no mortgage no future at any price. Basically if you are not in debt out your arse, then you are a fool.

So it seems even though 60% of Canadians don’t know how interest rates and debt payments are correlated, they are still super smart…

because since everyone is doing it, 50% can’t scrape up 200$ extra a month, 33% are already living above their means and there is 2 trillion in debt, we will most likely get some BS government bail out one way or another…

just to really slap those prudent and conservative people in the face (especially savers, but that has been going on for 10 years so nothing new there- shouldn’t be saving anyhow- be investing somewhere)

as those who live like kings in the newest BMW, 1.2 million semi POS detached and debt out their eye balls get some sort of bail out.

Watch it happen.

#110 Game Over on 05.10.17 at 5:26 am

I know cars are considered evil now, but just looking at parts for my whip and they have all gone up about 20$ in the last week. Only makes up 2% of the CPI index but still.. Inflation is real and present, especially with a 73 cent dollar and Poloz determined to do nothing.

#111 neo on 05.10.17 at 6:11 am

Yup. This market has definitely turned. Oakville is down 8.8% from this time last month and the listings are exploding. Milton is down 4.1% since last month and the same thing. What we have is a perfect storm. Bad headlines ie. HCG, IPSOS report, mix with Ontario Housing affordability plans, mixed with a spike in listings and buyers strike. If this doesn’t to turn around before the beginning of June. It’s going to be a long summer for sellers. The 416 is still holding up so far though.

#112 Wrk.dover on 05.10.17 at 6:38 am

Garth creates this blog to portray all suits aren’t evil?

Or is he a sheep in wolfs clothing?

Whatever the reason, I am most thankful for the education it offers.

Suits rock. — Garth

#113 Mike in Toronto on 05.10.17 at 7:03 am

Started a new job on Monday. My coworkers surprise me.

“Where are you coming from?” they ask

“Just up the street”

“?”

“Bay and Bloor, where are you coming from?”

“Whitby”

“Mississauga”

Turns out the guy from Whitby was lying, he really just bought in Oshawa and doesn’t want to admit it.

Everyone assumes I own. I wonder how it would go down if I told them there are rentals in my building, not as expensive as it seems when you take the cost of the monthly transit and the 3 hours a day commuting out of it.

Maybe I’ll bike home for lunch today. The problems of a renter…

There are a few elderly in my building, they moved in when the building was constructed in the 1950s. Apparently they could see the lake when they moved in.

#114 CIBC bought 15% of HCG??? on 05.10.17 at 7:06 am

WTF !!

https://twitter.com/Keubiko/status/862102078642061313

https://pbs.twimg.com/media/C_bNREWVYAIJCp3.jpg

#115 Average Joe on 05.10.17 at 7:17 am

#99 CIBC bought alot of HCG shares before the drop.

Explains the “nothing to see here” report from none other than:

“CIBC bank analysts are sick and tired of Home Capital Group’s (HCG.TO) struggles being projected onto the broader financial sector.
In a research note, analysts Robert Sedran, Marco Giurleo and Christopher Bailey wrote that the embattled mortgage lender’s struggles are its own, and do not reflect the broader landscape for the Canadian banking sector.”

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

#116 BoC Wisdom on 05.10.17 at 7:18 am

*POLOZ: WOULD BE ODD TO USE INTEREST RATES TO INFLUENCE ONE CITY

#117 Victor V on 05.10.17 at 7:19 am

Breaking News: Home Capital high interest savings balance falls to $134M

#118 Bang on on 05.10.17 at 7:28 am

#47
You nailed it and I as well as dozens of people I known have participated in the trickle up effect in the GTA.
I sold in Richmond Hill (take a guess to who?) bought in a town next door and those people bought in Barrie. Happening ALL the time in ALL GTA & southern Ontario towns/cities.

Nothing to support your theory but prejudice. You could have saved 400 words. — Garth

Garth, try to enlighten yourself with what’s really happening instead of always making the same points based on weak surveys/data and calling people racist.

Prejudice is not an argument. Show me facts. — Garth

#119 Eurovision on 05.10.17 at 7:29 am

no doubt its peaked out, sfh haymakers fishing for 3 mill in avrg areas, wtf?? Seriously , we are talkin T. right? , Smoke weeeeed everyday..

#120 When Will They Raise Rates? on 05.10.17 at 7:32 am

#109 Dan.t on 05.10.17 at 4:45 am

… as those who live like kings in the newest BMW, 1.2 million semi POS detached and debt out their eye balls get some sort of bail out.

Watch it happen.
————————–

The bailout will come via inflation, taxation and redistribution of wealth. Hedge accordingly.

#121 When Will They Raise Rates? on 05.10.17 at 7:39 am

ie non-confiscatable, inflation-proof assets outside of the banking system.

#122 Trumpocalypse2017 on 05.10.17 at 7:59 am

BREAKING NEWS

World War III is on the way.

“Unlike past world wars, although there will be ground troops, the battle is likely to be fierce, brutal and quick”

“It will also be globally devastating, both on environmental and economical levels.”

http://www.mirror.co.uk/tech/anonymous-publishes-chilling-video-warning-10387196

US marines are amassing.

US has tested Minuteman ICBM to attack North Korea.

China and Japan advise citizens to get home and prepare for 10 minutes of warning.

Furious secret talks going on with Asia-pacific nations.

Chaos now in America, Trump desperate for a distraction.

PREPARE!!!!!

THIS IS NOT A TEST!!!!!!!!!!!

*****If you are going to Belfountain on Saturday, fill up the tank and keep driving north. Get away from the 416 and 905 ASAP!!!!!

#123 H&R Blockhead on 05.10.17 at 8:20 am

#108 Eurovision on 05.10.17 at 4:43 am

My guess, investment will shift to recreational property, technically it can be considered a primary residence on top of owning a crip in town.
————————————————————-
Wrong!
While it is true that you can designate a rec. property as PR, then your other home cannot be PR during those years.

#124 Smoking Man on 05.10.17 at 8:23 am

93 For those about to flop… on 05.09.17 at 11:06 pm
#82 Smoking Man on 05.09.17 at 10:42 pm
I may have a hag.of a wife. Met her when she was 17
I was 19. I’m such a bad ass.

We are in our 50s now. Yeah she is stIll a bitch. All woman are bitches.

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

Joking Man, you better state that Mrs Flop is not a bitch in your next post or I will pop that zit on your nose on the 13th while NoName holds my ice cream…

M42BC
….

You didn’t get my drunken encrypted message.
This is place is about dogs. The correct pronun for a female dog?

Jezzzzus

#125 Sprawl on 05.10.17 at 8:25 am

Nothing better than a strong dose of market fundamentals insight. To temper the emotional twist and turns of fashionable real estate state of mind. Helps trying to make sense how the market beast behaves. BTW – Everweb (some good Canadian guys) have a great iWeb replacement. Blogs transfer right over they say. http://www.everwebapp.com/features.html

#126 Trumpocalypse2017 on 05.10.17 at 8:26 am

World War III is coming.

Trump/Korea chaos will envelop us all.

Be PREPARED!!

Do NOT think you will have a chance to grab life-sustaining supplies once the conflict explodes.

That will be TOO LATE.

Within less than two hours, the stores will be jammed and the shelves emptied!

Get your supplies NOW.

TODAY.

Take time off work and get to the stores. It’s too late for mail order delivery.

Make your urban exit strategy clear.

Practice it.

TODAY.

Save yourselves and those you love.

Hug your kids as they head to school.

(*If their school has only the typical emergency plans, today should be their last day there unless things change this evening)

:-) — Garth

#127 crowdedelevatorfartz on 05.10.17 at 8:28 am

Well, well well.
BC gets its first minority govt in 65 years….
Should make the Legislature interesting. Now that the Liberals actually will be forced to show up to the Leg and work, unlike the past two years.
A blind rabid dog could have soundly beaten the NDP……. methinks Christy is toast in the next few months….. the knives are out.

#128 Julia on 05.10.17 at 8:30 am

#61 Pete
Keep your loans current using a home equity line or personal line of credit. Ask for a principal payment holiday and pay only the interest for a period of time (many banks offer that which keeps loan defaults down).
Also, no qualifying for loans does not necessarily mean the borrowers can’t pay. Sometimes it only means they can’t prove their income but find ways to pay the mortgage from undeclared sources.

#129 Smoking Man on 05.10.17 at 8:36 am

#78 Steve French on 05.09.17 at 10:19 pm
For the Smoking Man:

“Like most others, I was a seeker, a mover, a malcontent, and at times a stupid hell-raiser. I was never idle long enough to do much thinking, but I felt somehow that some of us were making real progress, that we had taken an honest road, and that the best of us would inevitably make it over the top. At the same time, I shared a dark suspicion that the life we were leading was a lost cause, that we were all actors, kidding ourselves along on a senseless odyssey. It was the tension between these two poles – a restless idealism on one hand and a sense of impending doom on the other – that kept me going.”

― Hunter S. Thompson, The Rum Diary
….

Wow. That’s exactly how I think. We’re all actors.we put on a face at the tax farm. We have another at the dinner table. And the real face is only visible when the last drop of your favorite burbin is swallowed and bottle is empty.

The good thing is, if done correctly, while looking in the mirror, your eyes will be to out of focus to see how trully ugly humanity is.

Smoking Man’s Ghost.

#130 crowdedelevatorfartz on 05.10.17 at 8:49 am

@#126 Trumpetting the Apocalypse in 2017

Its a Full Moon tonight right?

#131 Pete on 05.10.17 at 8:51 am

To Julia #128:

I understand. Still, as a pool, people with poor credit or no credit, no income or no stable income, should have a much higher default ratio than the prime borrowers. Home Capital’s default ratio is 0.23%, way lower than bank’s average, I think it is something close to 1%. I can’t believe that could be possible.

Home Capital has about $18 billion in loans, but they only have about $41 million in reserve to cover for losses on those loans. That is also way lower than banks’. That does not make sense either. If they lend to crappy borrowers, they should set aside a much higher reserve.

#132 Pete on 05.10.17 at 8:54 am

OSFI should conduct an asset quality check of Home Capital.

OSFI should make sure HCG loans are properly categorized; whether they are normal, special mentioned, sub-standard, loss, etc. And reserves should be properly set.

#133 Pete on 05.10.17 at 8:56 am

I want to petition the OSFI to audit the asset quality of Home Capital. Anyone wants to sign up their names?

#134 traderJim on 05.10.17 at 9:15 am

Forget that drinking game I suggested. I’d have to have 5 shots already today, and it’s not even 9 am.

Besides, I have to go load up on cans of spam and build a bomb shelter before 11 am.

#135 neo on 05.10.17 at 9:30 am

#114 CIBC bought 15% of HCG??? on 05.10.17 at 7:06 am

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

I’ve said this before. CIBC has the most exposure to the Canadian housing market that all the big five and they are at the biggest risk to any downslide. They seem to be doubling down now. Something is up….

#136 Simplyput7 on 05.10.17 at 10:00 am

Maybe there wouldn’t be such a panic to sell if the media, mortgage and real estate industries stopped lying about how great everything is:

“You don’t get much for $3.25 million in the way of luxury.”

http://business.financialpost.com/financial-post-magazine/the-state-of-luxury-housing-if-1-million-buys-you-a-diyers-special-then-what-is-the-new-threshold-for-luxe-living

Really? Tell that to the people listing their homes in the GTA who haven’t had a single offer.

#137 Grantmi on 05.10.17 at 10:04 am

#109 Grantmi on 05.08.17 at 5:36 am

the spendy federal budget and the looming Dipper win in BC.

Not happening….. Garth-O

Told you Garth-O! (but it was close! I think the military vote in comox will evaporate the 9 seat lead of the NDP in that riding for the last seat for MAJORITY!)

If the Dippers hold a balance of power, whether they form government or not, for them it’s a win. Let’s wait and see. — Garth

#138 jess on 05.10.17 at 10:13 am

“It was a construction kickback scheme,” Cox recalls. “The scam was to submit grossly inflated construction numbers to the state in order to get more money than the project required and then have an agreement with the contractor to get it back during construction.” “I convinced myself that this was OK and that I was doing such good works and I was building amazing projects in the community,” he adds.

Monday, September 12, 2016
Former Carlisle CEO and Consultant Pleads Guilty in Fraud Scheme Involving Low-Income Housing Developments
fraudulently inflated construction contracts on at least eight different low-income housing developments
Seventh and Final Defendant Pled Guilty to Participating in a $36 Million Fraud Scheme Involving Fourteen Low-Income Housing Developments

https://www.justice.gov/usao-sdfl/pr/former-carlisle-ceo-and-consultant-pleads-guilty-fraud-scheme-involving-low-income

Pinnacle Housing Group’s Affiliate Charged in $4 Million Government …
https://www.justice.gov/…/pinnacle-housing-group-s-affiliate-charged-4-million-gove…
Mar 20, 2017
Florida Housing Finance Corporation, which administers the tax-credit program for low-income projects, said it “will pursue a ban” on Pinnacle from applying for or participating in any funding programs. The length of the ban is yet to be determined, the agency said. Developers use the credits, which are sold to investors for breaks on their income tax returns, to cover construction costs on projects.
Read more here: http://www.miamiherald.com/news/business/article137592683.html#storylink=cpy

#139 jess on 05.10.17 at 10:13 am

http://www.pbs.org/wgbh/frontline/film/poverty-politics-and-profit/
FRONTLINE and NPR investigate the billions spent on affordable housing, and why so few get the help they need.

What could go wrong? WIN WIN
1986 public/ private partnerships tax credits banks and investors get to take tax deductions while the developers now have cash to build the apartments $8 billion industry has evolved to help the government house the poor.

This program has been described as a subterranean ATM, and only the developers know the PIN.
Assistant U.S. Attorney Michael Sherwin
http://www.npr.org/2017/05/09/527046451/affordable-housing-program-costs-more-shelters-less.”

Grassley, the Iowa senator, is one of the few lawmakers looking into the program. He recently asked the GAO to find out how much money syndicators are making and whether that is influencing developments.

“The lack of data shows that maybe the IRS isn’t doing a proper job of oversight,” Grassley says.
What GAO Found
http://www.gao.gov/products/GAO-16-360

#140 BillyBob on 05.10.17 at 10:14 am

Wow. That’s exactly how I think. We’re all actors.we put on a face at the tax farm. We have another at the dinner table. And the real face is only visible when the last drop of your favorite burbin is swallowed and bottle is empty.

The good thing is, if done correctly, while looking in the mirror, your eyes will be to out of focus to see how trully ugly humanity is.

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

SM!

Spelling aside that’s some quality writing, man. Hope you’re still banging the keys on the old typewriter…

#141 Nick's nickel's worth on 05.10.17 at 10:21 am

#129
Smoking Man thinks his highest moments are when he gets shit-faced and stares at himself in the mirror. Pathetic. Closer to the truth, a famous philosopher said getting sloshed is “temporary suicide.” Another one said, “si tu te regardes trop longtemps dans la glace, tu y verras un singe” ( if you look at yourself too long in the mirror you’ll see a monkey).

#142 Eurovision on 05.10.17 at 10:24 am

#108 Eurovision on 05.10.17 at 4:43 am

My guess, investment will shift to recreational property, technically it can be considered a primary residence on top of owning a crip in town.
————————————————————-
Wrong!
While it is true that you can designate a rec. property as PR, then your other home cannot be PR during those years.

I hear there is a loop to avoid cg tax on rec investment :) but maybe bad info.

Under the Tax Act, in order for a property to qualify as your principal residence for a particular tax year, four criteria must be satisfied: the property must be a housing unit, you must own the property (either alone or jointly with someone else), you or your spouse or kids must “ordinarily inhabit” the property, and you must “designate” the property as a principal residence.

#143 jess on 05.10.17 at 10:24 am

Home Equity Loans Come Back to Haunt Borrowers, Banks – WSJ
http://www.wsj.com/…/home-equity-loans-come-back-to-haunt-borrowers-banks-1470933020
Aug 11, 2016

=======

Older Americans are shouldering far more of the nation’s debt than in years past.

The Federal Reserve Bank of New York released numbers recently showing that the share of all household debt held by people aged 60 and older has almost doubled: from 12.6 percent in 2003, to 22.5 percent in 2016.
http://libertystreeteconomics.newyorkfed.org/2016/02/the-graying-of-american-debt.html

co- signers?
seniors are holding 67 billion dollars in student loans, and the number of seniors holding such loans has quadrupled since 2005
http://files.consumerfinance.gov/f/documents/201701_cfpb_OA-Student-Loan-Snapshot.pdf
https://www.newyorkfed.org/medialibrary/interactives/householdcredit/data/pdf/HHDC_2016Q4.pdf

#144 Eurovision on 05.10.17 at 10:29 am

A seasonal residence can be considered to be “ordinarily inhabited in the year” So if the cottage is put in your kids name??

Not a chance. — Garth

#145 Space dust on 05.10.17 at 10:33 am

#129 Smoking Man on 05.10.17 at 8:36 am
#78 Steve French on 05.09.17 at 10:19 pm
For the Smoking Man:

“Like most others, I was a seeker, a mover, a malcontent, and at times a stupid hell-raiser. I was never idle long enough to do much thinking, but I felt somehow that some of us were making real progress, that we had taken an honest road, and that the best of us would inevitably make it over the top. At the same time, I shared a dark suspicion that the life we were leading was a lost cause, that we were all actors, kidding ourselves along on a senseless odyssey. It was the tension between these two poles – a restless idealism on one hand and a sense of impending doom on the other – that kept me going.”

― Hunter S. Thompson, The Rum Diary
….

Wow. That’s exactly how I think. We’re all actors.we put on a face at the tax farm. We have another at the dinner table. And the real face is only visible when the last drop of your favorite burbin is swallowed and bottle is empty.

The good thing is, if done correctly, while looking in the mirror, your eyes will be to out of focus to see how trully ugly humanity is.

Smoking Man’s Ghost.

Weren’t you just posting pictures of you punching out a mirror in a drunken stupor.

#146 valleyrentet on 05.10.17 at 10:35 am

Is it just me, or does it seem like there is a lot of listings in White Rock?

On a side note: any one else catch the story about the condo building in the west end of Vancouver? Apparently owners are being hit with a $35,000 special assessment to replace the tree on the buildings roof. Ouch!

#147 A renter on 05.10.17 at 10:42 am

Hi Garth ,

Many thanks for your consistent effort to share your wisdom with all of us. Much appreciated.
Since you mention that a person should buy a house as per the needs and what that person can afford.
Since needs varies from family to family and thus cannot be commented upon.
Can you please atleast dedicate a post with examples showing – how to judge the affordability as per the income of a family ?

Many thanks,
A renter

#148 Balmuto on 05.10.17 at 10:42 am

This start-up looks interesting, could be a disruptor to the RE industry:

“All information pertinent to a purchase decision, including home inspections, comparable property statistics, and consistent terms of sale, will be disclosed to allow for a level playing field between bidders. This access to information will help establish genuine value for buyers, while sellers enjoy a high-end and cutting edge real estate process at a lower cost than virtually anyone else in the market.”

http://www.newswire.ca/news-releases/toronto-real-estate-is-about-to-go-on-the-block-621847723.html

#149 For those about to flop... on 05.10.17 at 10:47 am

10.17 at 8:23 am
93 For those about to flop… on 05.09.17 at 11:06 pm
#82 Smoking Man on 05.09.17 at 10:42 pm
I may have a hag.of a wife. Met her when she was 17
I was 19. I’m such a bad ass.

We are in our 50s now. Yeah she is stIll a bitch. All woman are bitches.

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

Joking Man, you better state that Mrs Flop is not a bitch in your next post or I will pop that zit on your nose on the 13th while NoName holds my ice cream…

M42BC
….

You didn’t get my drunken encrypted message.
This is place is about dogs. The correct pronun for a female dog?

Jezzzzus

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

Relax…I was joking!

I would never let another man hold my ice cream…

M42BC

#150 For those about to flop... on 05.10.17 at 11:09 am

The Green Party has a held a prominent role in the make up of Tasmanian government the last 30 years or so.

I recall in the 90s before I left a few minority governments and they even switched allegiances over to the other main party to form government.

It was a long time ago ,but I don’t remember anyone feeling all warm and fuzzy about it.

I hope this one in B.C goes better if that’s what happens…

M42BC

https://en.m.wikipedia.org/wiki/Tasmanian_Greens

#151 WelcometoSlurrey on 05.10.17 at 11:16 am

#27 yeah your right , but its hindsight bias. I used to laugh at people in 2013 and boast how people wont pay a million for a home in slurrey and how homes would never reach that price ……i was wrong. Either way turner is right, you cant put everything in one asset , its risky but in the case of yvr real eatate risk = reward.

Only if you sell. — Garth
_____________________________________________

People that didn’t sell have just made enormous gains- yes on paper – but do you think prices will even retreat to 2013 levels ie: the properties I viewed at 700,000 are now at 1.4 and selling …. So even if real estate goes flat for the next 5 years those paper gains can still turn into liquid ones , anybody who bought pre 2016 can still sell and make a huge amount of money. Mortgage payments get a lot of coverage from tenants, and the yvr mantra of real estate always goes up has continued. I still agree with you Garth, but I think most people on this blog are like me…………we haven’t seen your logic come to a reality………

Only amateur investors – the pigs who usually end up slaughtered – fail to take gains off the table. — Garth

#152 Robert White on 05.10.17 at 12:27 pm

The Greenspan Bernanke Yellen Put in conjunction with
flawed fundamentals have conspired to increase leverage over time which results in increased risk that is distributed to all those that can least afford to take risks. In brief, what we are all witnessing across markets, and across the board of investments, is the tendency for markets, and investments, to implode via a protracted Hegelian Death Spiral of debt & deficit that the Federal Government of CANADA failed to address along with each and every provincial government, and all municipal governments, as well as all citizens in the entire population. This means that we are all about to experience an apocalyptic mean reversion that will wipe everyone except the ruling one per cent investor class off the face of the planet faster than you can extricate yourself from the systematic destruction that was planned back in 1913 when the Federal Reserve cartel decided to enslave the entire world population into indentured servitude to Rothschild Bank & the Rothschild oligopoly.

Pitchforks are the manifest destiny of everyone in the Western Empire which has always been evident to anyone with half a brain aside from Alan Greenspan, Ben Bernanke, or Mr. Yellen!

#153 Cheap Seats on 05.10.17 at 12:33 pm

The only good thing about a townhouse in Barrie going for almost a million $ is that your meth client in Keswick is pretty close by.

#154 Doug in London on 05.10.17 at 12:45 pm

All I can say is congratulations Jamil and Linda for cashing in your winning lottery ticket before it expired. Enjoy your early retirement!

#155 For those about to flop... on 05.10.17 at 12:56 pm

Pink Pollen falling in Richmond.

If these guys haven’t worked out that they are in trouble yet ,they soon will.

I remember this house from my ” Possible Pinkies ” folder ,where I put cases I see trouble for the sellers down the line ,but are not yet under the 10% gap in between buying and selling price.

These guys are still holding out for a 20% payday but there is nothing to support this number as the market stands at this moment.

They got carried away and paid 1.85m for this 45 y.o house when at the time it was only assessed at 1.2m and even though the 2016 assessment came up the best part of a massive 50% it still failed to cover their number and so I see a long slog ahead for these guys unless they get a lot more realistic.

Maybe they will still be there next Christmas to celebrate their one year anniversary of the house on the market…

M42BC

3140 Springfield Drive, Richmond

Dec 21:$2,280,000
May 9: $2,238,000
Change: – 42000.00 -2%

https://evaluebc.bcassessment.ca/Property.aspx?_oa=QTAwMDA1WFIxSA==

#156 Steve on 05.10.17 at 1:01 pm

@ #148 – Balmuto

“This start-up looks interesting, could be a disruptor to the RE industry”….

===========

It won’t be, RE industry will never allow for something like that to break through… Once technology starts to enter the equation they are done and they know it…

Agents like to sell us on the idea that they are adding value… Would be awfully hard to do that if technology is doing 1/3 of the work…

This site will be bashed and boycotted by RE Agents and will go away within 12 months….

I hope I am wrong, but if I am correct, I hope people keep taking swings, because eventually something will catch on… Each of these attempts is basically a lottery ticket….

#157 Socialist Van on 05.10.17 at 1:21 pm

“Besides, the bank approved it”

I don’t think there is any question about it. Bankers are terrorists and should be treated as such.

#158 Mattl on 05.10.17 at 1:29 pm

Garth the links showing that foreign impact in yvr was as 20 percent is some markets has been posted here. Links from realtors and immigration lawyers stating that impact is likely higher due to structuring have also been posted. The 5% number that realtors were claiming in yvr have been proven to bunk and lots of folks have pointed that out in these blogs and you never respond. Fact – you accepted the yvr number, called a bunch of us xenophobes and it turns out you were wrong.

If you want to believe that the gta number is also 5% – what a coincidence- thats your call but its incredibly naive. I get that you are pushing a narrative here but I believe you are dead wrong on foreign influence.

And for what its worth I couldn’t care less about foreign money buying homes here. We bought a home
In the valley we could afford 8 years ago. May the most cash win and no one is owed a house in Vancouver or Toronto. Foreign cash has created IMO billions in wealth for Canadians and I say lets keep the party going. If I had won the housing lottery in Van – we could have 8 years ago but thought prices were stupid then – I would have already sold and would be on a 30′ Whaler in the Gulf of Mexico thanking all those that financed early retirement.

#159 Blacksheep on 05.10.17 at 1:51 pm

Crowded # 127,

“A blind rabid dog could have soundly beaten the NDP……. methinks Christy is toast in the next few months….. the knives are out.”
———————————————–
Disagree….Christy baby is going nowhere. Look at all the venom aimed her way and still the NDP can’t pull off a win. That and Christy only needs one seat, for a majority.

The Libs may be forced to move left a bit to work with Weaver, but that shift would effectively knock the wind out of any future NDP plans for a majority.

I’m just sooooo bloody glad NDP didn’t sweep.

Did you feel that?

I think my house just increased in value : ]

#160 dumpster fire on 05.10.17 at 2:05 pm

#131 Pete on 05.10.17 at 8:51 am
To Julia #128:

I understand. Still, as a pool, people with poor credit or no credit, no income or no stable income, should have a much higher default ratio than the prime borrowers. Home Capital’s default ratio is 0.23%, way lower than bank’s average, I think it is something close to 1%. I can’t believe that could be possible.

* * *

There were some rumblings a while ago about how HCG has offloaded mortgages to a not-so-at-arms-length corp named Re-Charge, whose board member also sits on the board of HCG. This article outlines the case and speculates that HCG could be offloading fraudulent or non-performing loans to make its books look good:

https://seekingalpha.com/amp/article/4001541-home-capital-group-time-re-charge-loan-loss-provisions

Incidentally, a book about the collapse of Penn Square Bank (Belly Up) mentions that Four Seasons Nursing Home Centers was taken to court for a similar maneuver where they would sell unprofitable nursing homes to a subsidiary corp in order to inflate their profits. Shady stuff.

~ breathe deep

#161 Blacksheep on 05.10.17 at 2:09 pm

Flop # 155,

$2,238,000 ask price,

minus:

$1,850,000 buy price,

equals:

$388,000 potential profit (minus costs)

Your right Flop, this one sounds tragic….

What Am I missing?

#162 Livin Large on 05.10.17 at 2:13 pm

Renter @#147.
In the event that the exalted one doesn’t address your question… It’s actually rather simple and the same for a group or individual.

Principal, interest and taxes (PIT) should never exceed 25% of your gross income (before tax) this is GDSR. My personal opinion is that PIT really shouldn’t exceed 25% of your after tax income (NDSR) but in these days of house porn and extreme house poverty, that 25% NDSR for housing is quite likely a thing of the past.

#163 Julia on 05.10.17 at 2:19 pm

#131 Pete
#160 dumpster fire

It would be very interesting to have OSFI in there but we would never have details of the findings. An insolvency filing might bring on a forensic audit and would be public record.

#164 James on 05.10.17 at 2:34 pm

Oh dear, it’s from Huffington Post. But still, interesting in a bad way. A speed dating get together that teams up people to buy a house together. What could go wrong?

http://www.huffingtonpost.ca/2017/05/08/real-estate-speed-dating-toronto_n_16493724.html

Covered here days ago. HuffPost excels again. — Garth

#165 Stan Broock on 05.10.17 at 2:36 pm

…townhouse south of Barrie for $925,000, after buying it in 2007 for $290,000….
————
750 k for a house in Barrie?

And I thought retardation has limits. Apparently I was wrong.

That place sucks, no economy whatsoever except minimum wage jobs and is not even remotely considered commute-able to Toronto.

Sad, really sad story.

At this point I pretty much align with Marc Cohodes.
70-80 % decline as a minimum and possible total destruction of the financial sector.

#166 Long-Time Lurker on 05.10.17 at 2:46 pm

Hmm. I posted something last night but it didn’t show up. Maybe I forgot to press “Submit”?

Short Version:

Limited Sage, regarding Canadian stocks and bonds look up Ace Goodheart’s and Garth’s comments for the past two weeks.

#167 Johnny Boy on 05.10.17 at 2:51 pm

#124 Smoking Man on 05.10.17 at 8:23 am

93 For those about to flop… on 05.09.17 at 11:06 pm
#82 Smoking Man on 05.09.17 at 10:42 pm
I may have a hag.of a wife. Met her when she was 17
I was 19. I’m such a bad ass.
We are in our 50s now. Yeah she is stIll a bitch. All woman are bitches.
///////////////////////
Joking Man, you better state that Mrs Flop is not a bitch in your next post or I will pop that zit on your nose on the 13th while NoName holds my ice cream…
M42BC
…………………………………………………….
You didn’t get my drunken encrypted message.
This is place is about dogs. The correct pronun for a female dog?
Jezzzzus
____________________________________________
Move Over Mr & Mrs Flop, Mrs Johnny Boy has a word for that “pretentious little dick”. At least that’s what I think i heard her yelling when she read Smoking Mans critique of “All woman are bitches”
Dear Smoking Man it was nice to know you Sat May 13th may you rest in peace. Mrs Johnny Boy has an axe to grind with you she is going to enlighten Mrs Smoking Man on manhood removal tools.

#168 Hollywood Jack on 05.10.17 at 3:00 pm

#126 Trumpocalypse2017 on 05.10.17 at 8:26 am

World War III is coming.

Trump/Korea chaos will envelop us all.

Be PREPARED!!

Do NOT think you will have a chance to grab life-sustaining supplies once the conflict explodes.

That will be TOO LATE.

Within less than two hours, the stores will be jammed and the shelves emptied!

Get your supplies NOW.

TODAY.

Take time off work and get to the stores. It’s too late for mail order delivery.

Make your urban exit strategy clear.

Practice it.

TODAY.

Save yourselves and those you love.

Hug your kids as they head to school.

(*If their school has only the typical emergency plans, today should be their last day there unless things change this evening)

:-) — Garth
———————————————————
Source please?

#169 NoName on 05.10.17 at 3:24 pm

#149 For those about to flop… on 05.10.17 at 10:47 am

10.17 at 8:23 am
93 For those about to flop… on 05.09.17 at 11:06 pm
#82 Smoking Man on 05.09.17 at 10:42 pm
I may have a hag.of a wife. Met her when she was 17
I was 19. I’m such a bad ass.

We are in our 50s now. Yeah she is stIll a bitch. All woman are bitches.

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

Joking Man, you better state that Mrs Flop is not a bitch in your next post or I will pop that zit on your nose on the 13th while NoName holds my ice cream…

M42BC
….

You didn’t get my drunken encrypted message.
This is place is about dogs. The correct pronun for a female dog?

Jezzzzus

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

Relax…I was joking!

I would never let another man hold my ice cream…

M42BC

—-

You’ll probably make more money driving ice cream truck on february, than as stand-up comedian.

#170 Dan on 05.10.17 at 3:41 pm

Barrie rules because police and criminals like or must live there. It is like New Jersey without Bruce….
Everything is ok because London, England is still standing after all this years of money laundering. And all people of a must services (police, nurses, firefighters…), moved out long time ago….

#171 Morally Hedged on 05.10.17 at 3:59 pm

an introductory special rate of 1.5% ?! ain’t this a great opportunity or what !?

https://www.cibc.com/en/special-offers/mortgage-rate.html?utrc=D73:67

In the US, prior to the crash, that was called a ‘teaser’ rate. — Garth

#172 Smartalox on 05.10.17 at 4:18 pm

Christy Clark out? Don’t bet on it.

Weaver is eager to play ball, and he loathes Horgan and the NDP. In case you weren’t watching last night, Horgan pulled a di*k move on weaver on live TV, strolling on stage to give his ‘victory’ speech the moment that he saw Weaver do the same.

Weaver hates Horgon, because Horgon and the NDP campaigned on ‘Victim Politics’ – that ordinary voters were getting fleeced by ‘elites’ and ‘insiders’, that were preventing them from getting ahead. It’s the standard union tactic: why should workers take the risk of changing jobs or careers to advance themselves?

Better to take the low-risk approach and abdicate your rights to a ‘leader’ who will negotiate a ‘better deal’ for you – the same deal that everyone gets – except for the ‘leaders’ who get to sit just a little bit higher than the other workers, and usually at the other workers’ expense.

Of course, to get those benefits, you have to devote (confine?) yourself to that one organization for your entire career. Or, until the business is no longer sustainable, if it’s a for-profit entity. And don’t try to develop ‘skills’ either, or rise above your station – you wouldn’t want to violate the principle of ‘equality’ on which this union is founded, now would you? Think you’re better than your co-workers do you?

‘Victim politics’ work (from the right or from the left) when electorates are stressed: I’d bet that in every riding that flipped from Liberal to NDP last night, the number of votes that swung from the BC liberals to the NDP would stand as a pretty good indicator of the number of adults feeling the weight of crushing debts.

Weaver rejects ‘victim politics’. He’s not a conservative in the ‘more for me, less for you’ mould of Christy Clark and the Liberals, but the Greens believe that they have a responsibility to help things that they feel are vulnerable. The NDP’s portrayal of voters as ‘victims’ disgusts the Greens, who see themselves as more self-actualized, in charge of their own fates and decisions.

It’ll be interesting to see how it all plays out, especially since the Greens’ three seats are enough to tip the balance of power in either direction.

#173 Smoking Man on 05.10.17 at 4:22 pm

This is scary.

Open realtor.ca zoom out to capture the golden GTA area.

Set listed since date, as of today. do it in the morning, then refresh it in the evening.

The page is exploding with blue dots.

The Dam has broken wide open. My guess. 1200 new listing per day and growing exponentially. Now over 20k since Wynne set out to crush real estate on April 20th.

Yet some people are getting their price, others just sit with no showings.

This is now a buyers market. In just 3 little weeks.

#174 Waiverless on 05.10.17 at 4:25 pm

#171 Morally Hedged

CIBC Teaser rates… big HCG stock purchase before the drop… their asset managers have non-prime on their mind…

“CIBC bank analysts are sick and tired of Home Capital Group’s (HCG.TO 1.13%) struggles being projected onto the broader financial sector.”

I wonder how tight their lending practices are as one of the big 5…

#175 neo on 05.10.17 at 4:26 pm

#168 Hollywood Jack on 05.10.17 at 3:00 pm
#126 Trumpocalypse2017 on 05.10.17 at 8:26 am

World War III is coming.

Trump/Korea chaos will envelop us all.

Be PREPARED!!

Do NOT think you will have a chance to grab life-sustaining supplies once the conflict explodes.

That will be TOO LATE.

Within less than two hours, the stores will be jammed and the shelves emptied!

Get your supplies NOW.

TODAY.

Take time off work and get to the stores. It’s too late for mail order delivery.

Make your urban exit strategy clear.

Practice it.

TODAY.

Save yourselves and those you love.

Hug your kids as they head to school.

(*If their school has only the typical emergency plans, today should be their last day there unless things change this evening)

:-) — Garth
———————————————————
Source please?

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

The source is the tinfoil hat on top of his head.

#176 Balmuto on 05.10.17 at 4:27 pm

“#171 Morally Hedged on 05.10.17 at 3:59 pm
an introductory special rate of 1.5% ?! ain’t this a great opportunity or what !?

https://www.cibc.com/en/special-offers/mortgage-rate.html?utrc=D73:67

In the US, prior to the crash, that was called a ‘teaser’ rate. — Garth”

It’s CIBC, no surprise there. They want to keep up their fine tradition of getting burned more than their peers every time a market blows up.

#177 Contrarian Coyote on 05.10.17 at 4:41 pm

#105 paulo on 05.10.17 at 2:27 am
#85 east ender:

what is happening in barrie has nothing to do with Chinese dudes, Russians,or any other foe boogie men/women.
it’s all about greed stupidity artificially low interest rates and questionable mortgage underwriting .
as a long term resident of Barrie with fairly good network of friends connected the picture i see is:
30% of the action is players from Toronto some having cashed in,some speculating.
60% is locals yep gold old boys and galls buying up everything in the belief they will be winners as speculators or rookie landlords. i know a handful of locals that have bought 2,3,4 properties a couple of them more than suspect as in i have no idea how they got the paper bought,they are mortgaged to there eye brows. the market here in Barrie has stalled 400 plus listings and quickly climbing,no or few buyers apparent,i guess a couple of trips up and down demolition alley aka hwy 400 scared them off, also realizing that they can not practically play the novice landlord/speculator game and achieve positive cash flow also contributed. a interesting side note is the fact that city hall is having cash flow concerns as about 20% of property owners are in arrears on property tax installments. taxes are high as there is very little industrial tax base,we are essentially a residential area- the local job market blows mostly service/seasonal and residential water rates are enough to give you a heart attack. our down town core is a wasteland but we do have 5 yes count them 5 methadone clinics.

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You could replace “Barrie” for “Peterborough” and it would describe perfectly what is happening here. We’ve peaked and started a slow melt here though in Peterpatch. I see more and more listings appearing on MLS & Zolo with Zolo showing some that have been discounted. 6 months ago there were no discounts and people were regularly over-bidding. Source: a family member who works in admin for the red, white, and blue RE people.

#178 crowdedelevatorfartz on 05.10.17 at 7:27 pm

@#172 Smartaloks

I give Weaver 12 months before he succumbs to all the Liberal feteing and goes over to the darkside.
Another election in 18 months without Christy at the helm…..