Out of the box

As mentioned yesterday, Jamil and Linda (he’s in IT, she teaches) bought a townhouse a decade ago for $290,000, paid half the debt off, then sold it early last month. Because it was close enough to the GTA to attract ‘investors’ from that hallucinogenic kingdom of 416, they got an offer for $935,000. The same day, twelve other units came to market – and all but one are still for sale.

In short, they scored. “It was the blog that did it,” Jamil said (even before I paid him). “We were going to wait for June to sell, but thank God we didn’t after what you wrote weeks ago.” Since then listings in the Golden Horsehoe area have been increasing by about 1,200 every 24 hours. The bidding wars are largely gone. Realtors trying to foment blind auctions have been stymied. Sellers conditioned by the media and agents to believe buyers are crazed, horny Vikings, are shocked. Pieces of crap that sold for $1.7 million after one packed open house in February would never fetch that price today. Showings are getting rare. Offers even rarer. The inevitable has begun.

But this isn’t about the market. Enough of that. It’s about them – and others like J&L smart enough to grab their windfall profits, then use them to build a better life. The 30-something couple established a middle-of-the-road investment portfolio of $800,000 and fully expect to harvest enough each month to pay the rent ($3,100) on the better place they now call home. “Or,” says Linda, “we might just grow the money for later. But it’s a good thing to know we could actually live for free.” Cool. No mortgage. No property tax. No big home insurance or maintenance bills. No mortgage rate worries. And no rent, if the portfolio pays it.

So how is this possible? Many people believe there are only two investments in Canada: houses, which always go up, cost a lot to own but make you rich, and stocks, which will probably crash and kill you. This is why so many surveys show people have net worth in real estate, but also epic debt and little actual cash. But as the housing bubble’s swelled, so has systemic risk – since millions have so much concentrated in a single, over-valued asset.

So if you’re wise like J&L, you’ll think out of the box. They built a portfolio that’s balanced, diversified, liquid and more predictable than the mercurial real estate market. The return after an advisor’s management fee is expected to be about 6%, and the growth tax-efficient – thanks to the use of TFSAs, RRSPs, a spousal plan, income-splitting through a joint account and distributions  structured as return of capital.

They shunned individual stocks (too volatile), mutual funds (too expensive) and GICs (illiquid, miserly and taxable). Instead the portfolio is 100% constructed of high-liquidity exchange-traded funds and adheres to the three Holy Principles of balance, diversification and liquidity. This pathetic blog has parsed such a portfolio a few times, but maybe this is the right moment for a reminder of the broad strokes.

Balance: key to investing and sleeping at the same time. The balance is between safer assets that will preserve your wealth, and growth assets to augment it over time. History tells us the division should be 60-40, in favour of growth. This mix keeps volatility in check, mitigates losses, blunts surprises, recovers quickly and still allows money to expand. For example, the Brexit vote sent stocks skidding, but a balanced portfolio barely moved – since the fixed income (safe) portion jumped higher. In 2008-9 the stock market dropped 55% and took seven years to stagger back. A balanced portfolio gave up 20%, recovered in one year, then advanced 17% the next. Investors could snooze through the crisis while others freaked.

Diversification: Having all your money in a house is the antithesis of being diversified. Spread risk around. Never put all you eggs in one basket, one asset class, one country or one company. Remember Home Capital – you have no idea what insiders are actually doing, so why on earth would you buy a piece of one outfit? Smart investors use exchange-traded funds to own an entire index, and eschew individual stocks. They spread money over a sane mix of various assets – a few government and corporate bonds, preferred shares, real estate investment trusts, equity-based ETFs and some cash. Diversify geographically, too. Today investors should have more exposure to the US and international companies than Canadian ones, and maintain a 20% US$ weighting.

Liquidity: In a world like this, why would you not want cashability in a few days? That sure rules out real estate – which can now take weeks or months to unload. An ETF? One click. Liquidity lets you avoid danger or seize opportunity. If crisis were to hit, you could easily move to take advantage of changing conditions. Unlike having a locked-in GIC at Oaken Trust, control is within grasp.

Of course, tax-efficient cash flow is important, as noted. So earning money in the form of dividends and capital gains, plus inside tax shelters is key. Moving assets around helps – bonds in an RRSP and emerging market or small caps inside a TFSA, for example. Overall, the best thing to realize is that investing is not gambling. The object of the game is not the biggest swaggering return in the shortest time, but a predictable, low-volatility string of gains while capital is preserved.

Can you sell your house, collect the windfall, punt debt, reduce risk and live for free? It may be easier than you think.

153 comments ↓

#1 TurnerNation on 05.10.17 at 5:26 pm

Yes but yes but renting (a brand new house for a fraction of its carry costs) is paying your landlord’s mortgage! There is no greater sin. To be Kanadian is to have a mortgage.

Yes during break in my classroom day today it’s all talk about housing. Not a peep on sports or vacations. Kanadians have kornered the market…it’s jerking in a circle at the moment.

#2 For those about to flop... on 05.10.17 at 5:29 pm

Pink Pollen falling in West Vancouver.

I showed a house in Richmond earlier today that I had in my Possible Pinkies folder where I put cases that are not dire enough to warrant front page news yet, but I keep them just in case this correction deepens or remains stagnant for a decent amount of time.

This is one of the houses in that folder….lets see how things have developed over time.

If you look at the numbers below on this house they originally started off trying to pocket a million dollars after paying 3m for this near 60 y.o house last Spring when they put it on the market in late October 2016.

Then they took the axe to it in late March trying still to make a couple of hundred thousand ,but with the latest reduction a few days ago they are down to break even territory after expenses and it’s still not done yet.

West Vancouver average sales price is down 12% yoy and so hopefully for these guys they get their 3.2m and relax for the summer…

M42BC

2050 Russet Way, West Vancouver.
$3,980,000
2016-10-31

2050 Russet Way, West Vancouver.
$3,499,000
2017-03-29

Now asking 3.19m as of May 3rd.

https://www.zolo.ca/index.php?sarea=2050%20Russet%20Way,%20West%20Vancouver&ptype_condo=1&ptype_house=1&ptype_townhouse=1&filter=1

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

#3 I'm stupid on 05.10.17 at 5:30 pm

I’ll explain why Alt lenders, like Home Capital have low default rates. It’s actually really simple, in a rising market homes are very liquid. If borrowers run into problems all they need to do is liquidate and pay back the loan. The cracks begin to show when housing stagnates, and homes become illiquid. That’s when the default rates go threw the roof.

#4 boonerator on 05.10.17 at 5:35 pm

“Cool. No mortgage. No property tax. No big home insurance or maintenance bills. No mortgage rate worries. And no rent, if the portfolio pays it.”

That’s what we did, the monthly payment covers the rent and a good bottle of single malt.

Reminds of the business analysis from the madam of a 19th century sporting house. She knew what an asset class was.
“What a business. You got it, you sell it, you still got it”.

#5 dakkie on 05.10.17 at 5:44 pm

Is Canada The Next Hot Money Victim?
http://investmentwatchblog.com/is-canada-the-next-hot-money-victim/

#6 Canada is a house of Debt falling apart on 05.10.17 at 5:55 pm

Nothing is selling in the GTA. Even showings are having NO VIEWERS and with it NO OFFERS. Many maxed out on debt realtors ,mortgage brokers and other speackers are trapped and want out of the housing bubble. The smart money has sold and the rest are in an all out panic.

#7 Debtslavecreator on 05.10.17 at 6:03 pm

Way to go
I don’t hear enough of these stories
All I keep hearing is how housing can never go down and the borrowers refinancing for renos and to buy more RE so that they can use their “equity” as if it is real money in the bank
Glad to see at least some of my fellow comrades have come to their senses
Good luck

#8 Penny Henny on 05.10.17 at 6:07 pm

Since then listings in the Golden Horsehoe area have been increasing by about 1,200 every 24 hours.-GT and Smokie
///////////////////////

so can we expect and additional 20-30000 active listings by month end?

If nothing sells and the pace continues. Otherwise, no. — Garth

#9 People are broke? on 05.10.17 at 6:07 pm

Canadians spent $22.1B on alcohol last year, StatsCan says

http://www.cbc.ca/news/business/statscan-alcohol-sales-1.4095446

#10 Sam the Sham on 05.10.17 at 6:25 pm

I always thought renters were losers, boy was I wrong. My friend, who is a renter is a member of the Church of the Flying Spaghetti Monster. For them the kitchen is the sacred place where the prepare their spaghetti. Everyone is required to go topless in the kitchen(don’t question it, it’s part of their religion). My friend is waiting for the first time his landlady enters the kitchen and refuses to remove her top. He’ll be taking her to the Human Right Commission. He figures it will be good for $12,000 easy. We’re entering a brave new world folks, get used to it.

#11 MF on 05.10.17 at 6:25 pm

I understand the point of the post, but the takeaway from what i read is:

-We should have bought RE years ago
-if you need to buy RE in the GTA, you will need to pay 900k and support some schmuck’s retirement
-real estate gains destroyed my portfolio by 100x

Frustrating

MF

#12 Smoking Man on 05.10.17 at 6:27 pm

#8 Penny Henny on 05.10.17 at 6:07 pm
Since then listings in the Golden Horsehoe area have been increasing by about 1,200 every 24 hours.-GT and Smokie
///////////////////////

so can we expect and additional 20-30000 active listings by month end?

If nothing sells and the pace continues. Otherwise, no. — Garth
….
You need to list at Jan prices welcome all offers.

Buyers are avoiding low ball listings like the plague.

In Shlong Branch any house that’s listed this way is selling.

My agent thought I was nuts when I rased my price. Second set of people that saw it. Bought it. Warn down bidding war losers.

Now she’s sold to listings using the Smokey Stratagy. Called me a genus which remains to be seen. Got a feeling in three months when all the sellers remove inventory the same crap will happen all over again.

#13 Canada is a house of Debt falling apart on 05.10.17 at 6:29 pm

With mortgage fraud frozen the ponzi housing bubble is now freefalling down. Lots of air pockets on the way down.

#14 ToolBox on 05.10.17 at 6:33 pm

Word is that the portfolio manager of the CIBC Monthly Income Fund bought a huge number of shares of Home Capital no more than 48 hours before the stock fell 55%.

So for all those out there who think that the 2% of fees you pay for your mutual fund is worth it, because “people on BayStreet have the inside information”, well, I hope this convince you to switch to ETFs.

I wish all the best to that portfolio manager.

Bad information. It was the bank’s asset division that did the trade. — Garth

#15 KLNR on 05.10.17 at 6:33 pm

I cashed out in April (thx garth), bought a smaller, not quite as nice a place in the same hood. Now mortgage free. For my family owning still works for us. hard to find any good family homes to rent in west end TO under $3500. and the ones that are under are short term rentals soon to be mcmansioned

#16 Guest two on 05.10.17 at 6:38 pm

How does this will impact Canadian Banks?

#17 greyhound on 05.10.17 at 6:43 pm

https://dollarcollapse.com/money-bubble/canada-next-hot-money-vicitim/ is a pretty good précis of what’s happening now. Not just housing.

#18 BC minority government on 05.10.17 at 6:47 pm

NDP breathing down Christie’s neck is good news for BC.

Now she has to make sensible policies and play ‘give & take’ with the opposition or nothing gets passed.

Good news for BC is that she won’t be allowed to take her foreign buyer’s tax off the table. All her deals will be double scrutinized and her pipe dreams will hopefully go up in smoke.

Quality of life in BC might actually increase again finally.

#19 Nick on 05.10.17 at 6:50 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. $100K annual interest.

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

#20 jess on 05.10.17 at 7:02 pm

http://www.cbc.ca/news/business/russian-money-canada-1.4102132

…”In January, Browder and his team flew from London, U.K., to Ottawa where he met with the force’s director-general of national intelligence and shared his trove of Canada-linked documents.

“The RCMP have the tools to go and dig deeply into this thing. It’s effectively like a thread. We have given them the thread and we want them to start pulling on that and see what comes up,” he says.

#21 Vancouver Troy on 05.10.17 at 7:08 pm

“Bonds in an RRSP”

Why? Wouldn’t a bond ETF be tax free in an RRSP or a TFSA?

#22 Big English on 05.10.17 at 7:12 pm

No comment on the BC election……?

#23 Sam the Sham on 05.10.17 at 7:16 pm

#10 Sam the Sham

For anyone confused about my friend and his decision to take his landlady to the Ontario Human Right Commission, he got his inspiration from this decision by the HRC:

http://news.nationalpost.com/news/landlord-violated-tenants-religious-rights-faces-12000-fine-rules-ontario-human-rights-tribunal

#24 $3100 for rent ? on 05.10.17 at 7:24 pm

Ouch

#25 BlogDog123 on 05.10.17 at 7:28 pm

#10: Pastafarian.

Hey, I think you’re onto something. That recent HR case about the landlord not taking his shoes off, forced to pay a human rights fine for religious accomodation violations.

A new source of income for those who don’t respect the pasta strainers…
http://www.ctvnews.ca/canada/b-c-pastafarian-loses-driver-s-licence-over-holy-colander-hat-1.2041844

#26 S.Bby on 05.10.17 at 7:28 pm

#2 Flop
And a freeway running through the backyard…

#27 Millennial-falcon on 05.10.17 at 7:30 pm

Six Canadian banks have been cut today by Moody’s including rbc

#28 Happy Housing Crash Everyone! on 05.10.17 at 7:43 pm

The house of cards is falling apart. Mortgage fraud is out of control and now Canada has been exposed as a lying sack of poop. Americans are going to pound Canada to the ground as a wave of mortgage defaults and debt defaults will hit soon. No houses are selling and speakers are bankrupt

https://twitter.com/crossdefault/status/862448814287925248

#29 FNAiks on 05.10.17 at 7:43 pm

https://www.bloomberg.com/news/articles/2017-05-10/six-canadian-banks-cut-by-moody-s-over-consumers-debt-burden

I’m sure it’s nothing to worry about.

4 new houses for sale on my street in Etobicoke in the last week. I’m sure that’s also nothing to worry about.

#30 Boots on the Ground in Ptown on 05.10.17 at 7:46 pm

Things that make you go hmmm…

https://www.bloomberg.com/news/articles/2017-05-08/sec-probes-rental-home-values-backing-private-equity-bond-deals

#31 TalkingPie on 05.10.17 at 8:03 pm

#9
“Canadians spent $22.1B on alcohol last year, StatsCan says”

That comes out to $630 per person, on average. Even generously assuming only half of the population is actually of drinking age, we’re still at about $110/month. I’m willing to bet that most people are committing much worse financial sins than that.

#32 Ali on 05.10.17 at 8:03 pm

Firstly, love the blog and agree with the fundamentals…

However inventory in a place like Uxbridge, Ontario, seems to be still pretty low compared to prior years; anything that has gone up around my house in the last month is usually sold within a week or two….

Prices are astronomically higher than even 12 months ago (apx. 30%!)….and they were already higher than the year before that….

Fear mongering around here is getting tired, many of you are out of touch with the average Canadian who (mistakenly) thinks housing is their best or only retirement vehicle…and will continue to purchase real estate as long as rates are low.

Attack me all you want, my workplace includes about 80 people, mostly in their 20’s, 30’s and 40’s…even the “seemingly intelligent” ones believe real estate will never go down in GTA over the long term and don’t trust or understand financial markets….they all can’t wait to buy their next home before it’s too late.

I have two co-workers that rent out condos but live at home with Mom and Dad…One of them is a part time realtor!

#33 mitzerboy aka queencitykidd on 05.10.17 at 8:04 pm

i hear lots of crickets out here ….

#34 Van Isle Renter on 05.10.17 at 8:18 pm

#18 BC minority government on 05.10.17 at 6:47 pm

NDP breathing down Christie’s neck is good news for BC.

Now she has to make sensible policies and play ‘give & take’ with the opposition or nothing gets passed.

Good news for BC is that she won’t be allowed to take her foreign buyer’s tax off the table. All her deals will be double scrutinized and her pipe dreams will hopefully go up in smoke.

Quality of life in BC might actually increase again finally.

+++++++++++++

And unicorns will fart skittles. Both the NDP and the Greens are determined to de-capitalize the provincial economy and that of Alberta’s. Their irrational and unfounded contempt for resources coupled to their hallucinatory belief that “taxpayers” form an inexhaustible source of funds will crash BC. Just like it did last time.

And then the grown-ups will have to step in, be total buzz-kills and get everything back in fiscal order. Once a few shekels are in the bank, the NDP will promise unicorns again and piss it all away once more.

Wash, rincse, repeat. Ever has it been so.

#35 I know I know on 05.10.17 at 8:27 pm

#5 dakkie on 05.10.17 at 5:44 pm

Is Canada The Next Hot Money Victim?

————————————————–

Nonsense. Statistically sound and rigorous studies have concluded that HOT foreign money is NOT a factor in the hot TO RE market.

#36 Chaddywack on 05.10.17 at 8:35 pm

Meanwhile apparently Toronto and Victoria luxury homes are among the highest sellers in the WORLD….

No foreign buyer tax in Victoria….hmmm….I wonder where the funds are coming from overseas.

http://www.cbc.ca/news/canada/british-columbia/toronto-victoria-luxury-homes-1.4109307

#37 Marcus on 05.10.17 at 8:46 pm

Moodys Slashes Ratings On 6 Canadian Banks, Fears Asset-Quality Deterioration, Soaring Household Debt

#38 InvestorsFriend on 05.10.17 at 8:51 pm

INVESTING IS NOT GAMBLING

“the best thing to realize is that investing is not gambling”

*********************************
Indeed so and here are some more reasons why that is so:

Realistic and intelligent investing aims for modest annual gains that add up to total amounts and total accumulated returns that range from acceptable to astounding over the decades. Basically no diversified and balanced investor will lose money over a period like 30 years. And some investors perhaps taking a bit more but not crazy risks can end up very wealthy. In gambling almost everyone will lose some or virtually all that they risk even if measured over decades. A tiny percentage, well under 1% – think 0.0001% or something – will win big.

On any given lottery well over 99% (well 100% rounded) will lose the entire amount risked, one person or a tiny group sharing a ticket will win the big one. Lotto 649 has odds of one in 14.0 million. Most people cannot picture odds this small. Think of yourself as one person sitting in an arena with 14,000 people. You can see your odds of winning the 50/50 are very tiny. Lotto 649 has you as that one person in 14,000 in the arena but there are exactly 1000 more arenas of the same size and only one person in one arena is going to win. Can you picture how tiny your chances are? But you only throw in $2.00 a ticket… I don’t blame people for trying but the odds of YOU winning are basically zero. And say you play 1000 times, (once a week for 20 years!) now you odds are still only one in 14,000. God luck with that, you will need a lot of luck.

Gambling also has a huge take from the croupier. Only half the money goes to the players.

Investors complain bitterly about management fees of say 2% to 3%. ETF investors can get a managed account for a 1% fee (obligatory suck-up to Garth) Gamblers don’t say a word about the Croupiers 50% take!

#39 Hans on 05.10.17 at 8:53 pm

@ #32 Ali,

Uxbridge is among the many “island” towns around the GTA that have exploded in value because of it’s proximity to Toronto. Look at North Oshawa (Poshawa) – Million dollar homes that comes with province leading property taxes and a fantastic new pay as you go highway that saves a little time for that burdensome commute to Toronto. Most of Durham has experienced outsized gains bc most places were cheaper to begin with. Heck, Kaitlin Group marketed Sunderland as a commutable distance to Toronto – try that one in the winter. Sunderland is now over $600K for anything nice. As long as money keeps spreading outward from Toronto, the “island” towns will continue to enjoy this resurgence in investment….but that all will surely end when the party ends in T.O.

#40 InvestorsFriend on 05.10.17 at 9:01 pm

Average booze spending

#31 TalkingPie on 05.10.17 at 8:03 pm
#9
“Canadians spent $22.1B on alcohol last year, StatsCan says”

That comes out to $630 per person, on average. Even generously assuming only half of the population is actually of drinking age, we’re still at about $110/month.

************************************
Sure but after accounting for Smoking Man the average for the rest of us is about 47 cents a month, right?

#41 WUL on 05.10.17 at 9:08 pm

There are no reliable stats on hot foreign (and Hells Angels) money in Canadian real estate. Small wonder. They do not respond to surveys.

Edmonton city council has a more pressing concern. Seems there is a spike in public urination downtown following the playoff games (Edmonton Journal).

Sticking with Edmonton, I spent the last two days helping my precious daughter with a move to YEG for an off the charts summer job between semesters in her liberal arts studies. And I mean a career builder. So much for STEM. I helicoptered and removed some bubble wrap. We found the cutest rental studio condo.

I noted an odd thing in the bathroom. A stub of copper pipe sticking out of the wall. Mystified, I studied it and noted vise grips affixes to the pipe.

Smokey?

#42 confusedd on 05.10.17 at 9:11 pm

Can Garth maybe step in and explain something to me?…namely..I get the idea of NOT buying RE at its peak bubble moment (now)…but what was wrong with doing it 5-10yrs ago when by now you have tripled your money?

I have a nice sized balanced portfolio…but I end up paying taxes…and unless my money maker dude is stupid and is putting me in products that make me pay more tax than I should…I still don’t get the issue with owning RE and maybe getting out like now.

Having a portfolio of $1m that brings in $60k after fees is great…pays the rent etc…but you still have to pay tax on that money and you are paying rent with after tax income. So how exactly are you getting so far ahead of someone who owns RE that cashes in tax free?? Maybe I am stupid…please explain where I am making the wrong calculations (if not Garth…then Smoking Man is good for an answer)

You’re right. Get a new money maker dude. — Garth

#43 A on 05.10.17 at 9:22 pm

I love this story, and am inspired, as we also sold our home a year ago, have been renting, are debt-free, and have begun learning how to invest our savings beyond large GICs and RRSPs. Diversifying isn’t easy for a beginner. We appreciate the post. Maybe we have to find an investment broker.

#44 SimplyPut7 on 05.10.17 at 9:22 pm

I must admit I was a bit naive, prices did move without interest rates going up. Who knew, Garth, you were right. I think the people who bought in 2016 and early 2017 are kicking themselves when they look at the homes they could have gotten if they had listened to you and stayed away from those bidding wars.

Also, when people were complaining about their hydro bills in Ontario, I thought it was because they didn’t like how much the bill increased by, not because they owned these huge homes that were costly to heat even before the increase in rates. In the GTA, Markham, Vaughan, Richmond Hill, Aurora, and Stouffville, have hundreds of homes with 3000 sq ft or more listed for sale online. I thought we were running out of space and supply of homes in the Toronto area? Some of the condos investors paid people to stay in line all night to get the best units are more expensive than these places, even before comparing the difference in cost per sq ft, and these houses have been on the market for weeks with no offers.

#45 For those about to flop... on 05.10.17 at 9:33 pm

Pink Pollen falling in Maple Ridge.

Here’s another one that started off in my Possible Pinkies folder, but with the latest reduction they’re down to the break even point.

They paid 2m flat for this place last May and they just took another 70k off the price and it is down to 2.198m

Been trying to sell it since late last November,so they have been grinding on this one.

Nice backyard and pool ,but the rock wall ,just like hanging out with Stojoking Man could be a liability…

M42BC

26290 126 Avenue, Maple Ridge, BC V2W 1C9
$2,299,000
2016-11-28

26290 126 Avenue, Maple Ridge, BC, V2W 1C9
$2,269,900
2017-03-25

Now asking 2.198 as of today.

https://www.zolo.ca/index.php?sarea=26290%20126%20Avenue,%20Maple%20Ridge&filter=1

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

#46 Doghouse Dweller on 05.10.17 at 9:37 pm

Oaken Trust
“We’re backed by Home Bank, and powered by Home Trust Company, Canada’s largest independent trust company that’s been proudly serving Canadians since 1987”
So who are these operators ? The sub-prime slime auto loan division ?
Amazing ! You need to hire a private investigator to buy a GIC these days. I just figured out, you get a better deal at your Big 5 branch than through their damn brokerages.
And here we are in the nano second digital millennium and these liquidity financiers can`t clear a cheque from a cash account in less than 14 days.
I think I`ll soon be banking with Russel Oliver Oh ! Ya !
https://www.oliverjewellery.ca/

#47 Hot Money Mama on 05.10.17 at 9:41 pm

“In one sense Canada is just the latest victim of global hot money flows. Rich people in unstable countries like China or Russia are always looking for safe places to stash what they’ve earned or stolen. And their wealth in the aggregate dwarfs the capacity of a Brazil or a Switzerland to absorb it. So when it really starts flowing it distorts the target market in ways that seem like fun for the recipients at first but eventually turn into a nightmare.”

– how nice

Canadians love blaming others for our own dumb decisions. — Garth

#48 WUL on 05.10.17 at 9:42 pm

A link to Edmonton’s rowdy playoff behaviour:

http://edmontonjournal.com/news/local-news/city-council-inquiry-to-address-public-urination-downtown-amid-playoff-success

And, on the secrecy of criminal gains( foreign and domestic) being placed in Canadian real estate, if you were laundering moolah, would you tell Ipsos Reid? Bad idea.

#49 Smoking Man on 05.10.17 at 9:50 pm

Re blog dogapalusa.

Dudes please don’t let your bitches hit me. I might snap into a few pieces.

I have a bad health issue. ankylosing spondylitis.
My cartilage in my spine has turned to bone. I’ve mentioned it many times. Can’t turn my head. Think tin man with no oil.

The only way I can sleep at night is to get as shit faced as I can. It’s the only pain killer that works for me.
I don’t drink till the clock hits 9pm. It’s a choice not an addiction. Boys at the tax farm always knew I was a walking stiff.

Weed dont work. Makes me feel weird with no pain relef.

The pain relief ended my career on the trade floor. No longer lucky enough for a shit pay check dilivering super human results, no more looking at the login screen that said. Diversity, Inclusion.

Bahaha Nice one DM.

I have too much pride to apply for a gig and hit the check box that asks are you disabled. GuaranteING you get the gig. screw that.

Oh CRA dudes at Blog Dogapaluza. My Dr is giving me a letter stating that I’ve been disabled for almost 20 years. Well it sucks. I can only go back ten years of some serious tax money I paid. You owe me money.

And I can’t wait to talk to you.

#50 Bond Jumkie on 05.10.17 at 10:00 pm

#37

Easy there Marcus one notch is hardly a ‘slash’ but rest assured the second haymaker has officially been thrown by the governing elite. You guys think this is all pure coincidence?? Our punishment for trying to ring fence HCG and equitable.

This is going to cost all the banks millions from the obvious increase in global funding rates to deteriorating counterparty risk assessments on literally thousands of swap contracts, am I right SM?? Going to be a busy day for the CVA desk tomorrow hahaha. Poor suckers.

Interesting note from Moody’s, this was not precipitated by anything the banks actually did. It’s because the rest of us Canadians are just too stupid to avoid getting up to our eyeballs in debt… Funny stuff, if it wasn’t so serious.

‘We do note that the Canadian banks maintain strong buffers in terms of capital and liquidity. However, the resilience of household balance sheets, and consequently bank portfolios, to a serious economic downturn has not been tested at these levels of private sector indebtedness.’

-Bj

#51 My Wife Loves Garth on 05.10.17 at 10:03 pm

Took Garth’s advice two years ago and sold to cash in on a once in a lifetime tax free windfall. Now I’m a happy renter. Debt free, stress free and living off the investment income.

Mom still thinks I’m crazy to sell. Says kids have no security…lol

#52 Redcurlygirl on 05.10.17 at 10:06 pm

Thanks for ankther great post Garth, great to hear more converts to the Wealthy Renters group, we read your book 10 years ago and moving here to Calgary kept renting…happy to say now at 700 plus in everything maxed RRSP TFSA and RESP, and a joint account for income splitting, only problem is that need more ETF’s!! Have sold some stock and a couple bonds have come due to have a good chunk to reinvest, [email protected] recommends specific stocks again but following your great blog today, I want to follow what you say.
SO fellow invested Blog Dogs, if you had a chunk of change and “Following Garths Rules” what do you buy and where do you put it? I read up on Moneysense mag and have shortlisted some of their favs as well.
Take it I need : A bond fund, an equity fund, (us can and international) small cap, large cap and any others specialty ones let me know.
Enjoy all your ice cream this weekend, wish I was there to trade rental success stories!

#53 Cl on 05.10.17 at 10:14 pm

#34 Van Isle Renter

Well said. I know a lot of people that think the taxpayers lay golden eggs and need to be better at sharing. Drives me crazy.

#54 crowdedelevatorfartz on 05.10.17 at 10:14 pm

@#9 people are broke?
“Canadians spent $22.1B on alcohol last year, StatsCan says…”
+++++

I’ll drink to that…

#55 crowdedelevatorfartz on 05.10.17 at 10:18 pm

@#34 Van Isle renter
“And unicorns will fart skittles. ….”
++++++

I did NOT know that!

Can you fit a unicorn on an elevator?

#56 West Van on 05.10.17 at 10:19 pm

Canadians love blaming others for our own dumb decisions. — Garth

Bullshit.

Thanks for the confirmation. — Garth

#57 Smoking Man on 05.10.17 at 10:20 pm

Bond Jumkie on 05.10.17 at 10:00 pm
#37

Easy there Marcus one notch is hardly a ‘slash’ but rest assured the second haymaker has officially been thrown by the governing elite. You guys think this is all pure coincidence?? Our punishment for trying to ring fence HCG and equitable.

This is going to cost all the banks millions from the obvious increase in global funding rates to deteriorating counterparty risk assessments on literally thousands of swap contracts, am I right SM?? Going to be a busy day for the CVA desk tomorrow hahaha. Poor suckers.

Interesting note from Moody’s, this was not precipitated by anything the banks actually did. It’s because the rest of us Canadians are just too stupid to avoid getting up to our eyeballs in debt… Funny stuff, if it wasn’t so serious.

‘We do note that the Canadian banks maintain strong buffers in terms of capital and liquidity. However, the resilience of household balance sheets, and consequently bank portfolios, to a serious economic downturn has not been tested at these levels of private sector indebtedness.’

-Bj
…..

I can give you a prediction or two. Privately. No longer giving heads up to RD and JB . Thought they had my back. I still think they do. DM tosses life long friend under the bus. Their scared because they are smart.

They Caved to the screen saver.

Inclusion. diversity.

Me not so much.

#58 Solomon Grundy on 05.10.17 at 10:21 pm

Six of Canada’s largest banks had credit ratings downgraded by Moody’s…

https://www.bloomberg.com/news/articles/2017-05-10/six-canadian-banks-cut-by-moody-s-over-consumers-debt-burden

#59 squidly77 on 05.10.17 at 10:29 pm

https://soundcloud.com/rachelle-berube/marc-cohodes-on-canadian-real-estate-home-capital-group-and-mortgage-syndication

#60 Ron on 05.10.17 at 10:37 pm

Number of GTA condo sales listings on condos.ca seems to be growing at an accelerating pace. I’ve been watching the number tick up since April but every day this week the number has increased by 100.

https://condos.ca/search/condos-for-sale

#61 Bill on 05.10.17 at 10:38 pm

#49 Smoking Man on 05.10.17 at 9:50 pm

Thats the shits Smokie sorry to hear about your skeleton.
Id love to get together to get shittered, before 9pm though…You and I think alike! Im 51 and health is great. Prolly had a few to pops along the way…but liver is 2 thumbs up. Oh never smoked anything though. Ok a little weed 4 times a yr.
I dont get here much cause im runing 2 companies so i can pay a shitload of tax to keep this ship of fools afloat…good news is corp tax is low and im writing off my booze as liquid coolant.
But im slowing down on the telecom biz so finally i can kick it and hang out more..keep writing man..

#62 steerage steward on 05.10.17 at 10:51 pm

Asked my home owner friends over the years why they don’t do what this couple did. Their answers boil down to; sure I could have a million dollars, but then I would have to rent. Even if I rented a better place/location then I own now, only *those* people rent.

Number one predictor of what you will do is what people in your peer group are doing.

#63 traderJim on 05.10.17 at 11:11 pm

Decided to check out E02 on realtor.ca to see what’s up with my old ‘hood, where I sold a property last spring, thinking I might catch the peak.

Only one similar listing and the asking price is still 20% higher than what I got, and my sale was almost 30% up from the year before.

Now, it does look like there are more listings in general, but nothing remarkable.

Would be interesting to see if actual sale prices are higher than last year. I’m betting they are.

#64 steerage steward on 05.10.17 at 11:15 pm

As noted our banks are some of the most sane, well capitalized, etc, in the world, oddly enough the banks’ fortunes are only as good as the customers they serve.

As individual Canadians we are indeed drifting into the arena of the unbalanced. Making enemies of our own futures.

#65 traderJim on 05.10.17 at 11:16 pm

I do see a townhouse/condo listed in my old hood listed for $899k. I looked at that place around 1999 and thought $129k was too much hahaha.

#66 traderJim on 05.10.17 at 11:23 pm

Loonie down half a cent on the Moody’s news.

#67 Alba on 05.10.17 at 11:39 pm

Interesting read about school enrolment in West Vancouver

http://www.nsnews.com/news/english-language-learners-on-the-rise-at-wv-schools-1.14986979

#68 Long-Time Lurker on 05.10.17 at 11:39 pm

#52 Redcurlygirl on 05.10.17 at 10:06 pm
…Just a Dude, this was the info you were supposed to find earlier.

#27 Martha on 03.23.17 at 7:13 pm
Newbie’s DIY sample Garthfolio. Lookin’ for feedback in all the wrong places. Pleeeeeeeze and thanks.

XIU – 16% Cdn equity
ZRE 5% Cdn REITs
21% Total Cdn Equity

VTI 13% US equity (USD)
VBR 6% US small-cap (USD)
19% Total US Equity

XEF 16% Itn’l Equity
VEE 3% Emerging markets
19% Total Itn’l Equity

ZFS 6% Gov’t bonds
CBO 8% Corp bonds
VSB 9% Short-return bonds
XPF 18% Preferreds
41% Total Fixed Income

#154 Jesse Wierz on 03.21.17 at 5:47 pm
Alternative with one extra etf because 2.0 doesn’t include emerging markets

Sample Garthfolio 3.0

ZAG 7% (federal bond etf)
ZPL 7% (provincial bond etf)
ZHY 6% (US corporate bond etf)
ZPR 20% (preferred share etf)

VV 21% (US Large Caps in US$)
VCN 16% (Canada equity etf)
VRE 5% (Canada REIT)
VIU 15% (Developed ex N.America etf)
VEE 3% (Emerging Markets etf)

MoneySense recommends “using ZAG in registered accounts and ZDB in taxable accounts, investors can get similar bond market exposure with maximum tax efficiency”

http://www.moneysense.ca/save/investing/best-fixed-income-etf-2017/

#154 Jesse Wierz on 03.21.17 at 5:47 pm
Alternative with one extra etf because 2.0 doesn’t include emerging markets

Sample Garthfolio 3.0

ZAG 7% (federal bond etf)
ZPL 7% (provincial bond etf)
ZHY 6% (US corporate bond etf)
ZPR 20% (preferred share etf)

VV 21% (US Large Caps in US$)
VCN 16% (Canada equity etf)
VRE 5% (Canada REIT)
VIU 15% (Developed ex N.America etf)
VEE 3% (Emerging Markets etf)

#138 Jesse Wierz on 03.21.17 at 2:19 pm
Sample Garthfolio?

ZAG 7% (federal bond etf)
ZPL 7% (provincial bond etf)
ZHY 16% (US corporate bond etf)
ZPR 20% (preferred share etf)

VTI 20% (Total market etf in US$)
VCN 15% (Canada equity etf)
VRE 5% (Canada REIT)
VXC 20% (World ex-canada equity etf)

The correct US weighting is about 20%, of which 13% will be the last 500 US corporations.

Yes, Disney is included. — Garth

Sample Garthfolio 2.0

ZAG 7% (federal bond etf)
ZPL 7% (provincial bond etf)
ZHY 6% (US corporate bond etf)
ZPR 20% (preferred share etf)

VV 21% (US Large Caps in US$)
VCN 16% (Canada equity etf)
VRE 5% (Canada REIT)
VIU 18% (Developed ex N.America etf)

#69 crossbordershopper on 05.10.17 at 11:48 pm

millionaires talking about their ‘portfolio’. you have to say it with a british accent. and the other thing, ‘exposure’, yes everyone needs exposure. europe, far east, where i have met people who havent left southern ontario in their life. they litterly havent travelled more than 300 km, in their 50 year life.

#70 Pete from St. Cesaire on 05.10.17 at 11:49 pm

you will need to pay 900k and support some schmuck’s retirement
———————————————–
Not me. I’ve said it before. I’m not going to be saddling a load of debt to finance anyone’s retirement. I’m not that stupid. Think of me when you’re opening that box of Meow-Mix for breakfast. I’m still debt-free.

#71 steerage steward on 05.10.17 at 11:58 pm

My rent hasn’t gone up in 15 years in metro Vancouver.

The loudest thing I do is post on greaterfool, also helps when you pitch in a hour or two a week around the place. Landlords are crying out for good tenants

#72 Mark on 05.11.17 at 12:00 am

“As noted our banks are some of the most sane, well capitalized, etc, in the world, oddly enough the banks’ fortunes are only as good as the customers they serve.”

Canada’s banks are only highly capitalized relative to their assets if you believe that the CMHC will make good on every subprime mortgage guarantee they’ve written. Something which will take considerable support from taxpayers, potentially $200-$300B worth, as the Canadian economy goes into significant deflation along with housing prices (which are starting to fall coming off of the 2013 plateau!).

If you remove the assumption that the CMHC will pay in full, then Canada’s banks are mostly trainwrecks.

#73 FR on 05.11.17 at 12:04 am

Liquidity: In a world like this, why would you not want cashability in a few days? That sure rules out real estate – which can now take weeks or months to unload. An ETF? One click. Liquidity lets you avoid danger or seize opportunity. If crisis were to hit, you could easily move to take advantage of changing conditions. Unlike having a locked-in GIC at Oaken Trust, control is within grasp.

What is an example of such a crisis? Noone ever advises selling during a market downturn caused by ‘crisis’. So in effect the portfolio is quite illiquid. However, if you have a personal crisis and need cash, then yes it’s very easy to sell.

#74 steerage steward on 05.11.17 at 12:13 am

Just working hard, saving 40% take home for a good life on the Island. Freedom 45. I’ll still rent

You guys help balance my peer group

#75 Hot Money Mama on 05.11.17 at 12:31 am

@47 Canadians love blaming others for our own dumb decisions. — Garth

Agreed….Canadians keep voting for the same 2 parties over and over and over and over again…so they deserve the real estate lies and false stories.

They don’t want to risk political change, yet they will risk over-borrowing money, risk family life with infidelity, risk injury through angry driving or alcohol, or risk going blind with too much online porn (…a little is okay once in awhile). But god forbid they risk political change….Canadians are such fools.

#76 jas on 05.11.17 at 1:37 am

#38 InvestorsFriend

“Basically no diversified and balanced investor will lose money over a period like 30 years.”

You are right. But the sad part is by the time an average investor realizes it, he/she does not have 30 years of time left to invest.

Why the heck financial education is part of high school studies? Why? Why are kids not taught value of money, habit of saving, magic of compounding for growth?

I think we, as voters don’t give a hoot about who runs our govt. from municipal to federal level.

We get what we deserve.

Wake up folks. Shake your heads and open your eyes. Your job is not done by just casting a ballot once every four years. You must hold the feet to the fire of those who decide for us. Don’t let those idiots get away with this. Better still, kick them out at every level of the govt.

#77 rates vs capital on 05.11.17 at 1:37 am

Oh my, it looks like its game on for RE with the Christy win – as I predicted.

After a few recounts in 4 ridings, she will be back in power with a majority, and all those pesky affordability issues swept under the rug for another 4 years. Global capital will take comfort in knowing that the same rules apply.

Gee, another one of many reports on the influence of foreign capital in the RE market in Vancouver and TO. It seems that the influence of foreign capital is there for all who want to actually see and acknowledge its impact.

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

You have to remember that the BC media, whose revenue base is dependent upon RE advertising dollars (as its pretty much the only source of advertising dollars), will only report on this issue after its already been confirmed as a fact within the public mindset – and usually 6 months after a trend has been initiated.

Such an article a few years ago would have been deemed ‘racist’ in an effort to shut down legitimate discussion on one of the key drivers of the affordability crisis in BC.

For those of you who want to see true investigative journalism in action on the ties between foreign capital and BC and Canada follow the report Ian Young

https://twitter.com/ianjamesyoung70?lang=en

He broke all the stories that BC media regurgitated once it was ‘safe.’

#78 rates vs capital on 05.11.17 at 1:44 am

#35 I know I know on 05.10.17 at 8:27 pm
#5 dakkie on 05.10.17 at 5:44 pm

Is Canada The Next Hot Money Victim?

————————————————–

Nonsense. Statistically sound and rigorous studies have concluded that HOT foreign money is NOT a factor in the hot TO RE market.

——–

I trust that is sarcasm or that a link to these non-realtor studies is forthcoming.

I look forward to you posting them!

And please don’t link to the CMHC survey that said that foreign capital amounted to 2% – that was based on a voluntary survey of property managers. It has been discredited a thousand times…

#79 Fortune500 on 05.11.17 at 2:24 am

They have made the right decision and I wish them no ill, but as a couple who saved diligently and invested in a way that Garth explains, but could not afford to get in when the market was more affordable, it does feel a little like a slap in the face. It has taken us a decade of hard work and sacrifice every month to be behind where they and most homeowners in our cities are because of this run up.

My entire adult life in Canada has been one big reinforced truth that I get to see and hear about every day now as people start cashing in their lottery winnings. If you use leverage and take debt beyond what you can traditionally afford, the market will reward you. At least in Canada.

Most of the people I know who are cashing in on these housing windfalls have never read a book about finance, or given it much of a thought. Those of us who took the time to learn and follow the principles in a balanced and reasonable way are still wayyyy behind.

And I would argue this is not a minor issue. It has become so ingrained over the past decade that I think it has fundamentally changed the Canadian Psyche. Debt and leverage are your friends. The government will do its best to keep you sheltered from any kind of responsibility by artificially depressing interest rates for your working life. Savers and index investors are the losers. If you didn’t buy real estate already, you are sitting this life out.

The trend really is your friend. It really has been different this time. Even if we see a pullback eventually.

#80 For those about to flop... on 05.11.17 at 2:27 am

Pink Pollen falling in Vancouver.

Here’s another one that has been marinating long enough to graduate from my Possible Pinkies Paddle Pool to jump in with the big kids at the main pool.

They spent 3.66m last May and relisted it just in time for someone to buy their spouse a house for Christmas.

Everyone passed ,and so they took the whipper snipper to it again in early March in time for the annual Spring Fling but that failed to launch as well.

Now they’re pretty much down to break even territory which obviously wouldn’t be the worst result for them , but miles away from where they thought they would be as at the time when they shelled out the 3.66 it was only assessed at 2.37 but then it gained massively but still fell short at 3.48,half a million short of their new target number.

A lot of these guys seemed happy to overpay in the a Spring because it was a natural given that it would catch up later in the year ,and so as I wrote in a post to someone the other day when they asked what was the big deal about the downturn in Vancouver ,guys like these were gambling on roughly 20% gains and with the market negative 10% ,they are roughly 30% from where they thought they would be.

I’ve already seen some high end condos in Richmond that had their assessments rolled back this year and if this thing continues ,lookout later in the year when people see their mistakes in black and white…

Maybe B.C assessment should stock up on Pink stationery…

M42BC

1384 W 57th Avenue, Vancouver, BC, V6P 1S8
$4,388,000
2016-12-18

1384 W 57th Avenue, Vancouver, V6P 1S8
$4,150,000
2017-03-01

Now asking 3.99 since April 7th

https://www.zolo.ca/index.php?sarea=1384%20W%2057th%20Avenue,%20Vancouver&filter=1

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

#81 Kiss principle on 05.11.17 at 7:39 am

Garth’s diversified, balanced portfolio seems like the kind of strategy that could easily be made into an ETF. Does anyone know of such a beast? Perhaps there’s already a Turner Investments ETF, and if not, Garth should make one. I’ll be his first customer! Why monitor and rebalance when you can get the king of dbp to do it for you?

Different asset types have differing income streams and diverse tax treatments. That is but one impediment of many. — Garth

#82 Jeff Kowalsky on 05.11.17 at 7:47 am

#10 Sam The Sham

Everyone is required to go topless in the kitchen(don’t question it, it’s part of their religion).

—————————————————————–

Even when they cook bacon?

#83 maxx on 05.11.17 at 7:52 am

#27 Millennial-falcon on 05.10.17 at 7:30 pm

“Six Canadian banks have been cut today by Moody’s including rbc”

Value and respect for money needs to be restored.

The “Fast and Loose” methodology has been a disaster.

Made too few rich and far too many indebted and/or poor.

#84 maxx on 05.11.17 at 8:02 am

#37 Marcus on 05.10.17 at 8:46 pm

“Moodys Slashes Ratings On 6 Canadian Banks, Fears Asset-Quality Deterioration, Soaring Household Debt”

Got that, Poloz?

#85 Dominoes Lining Up on 05.11.17 at 8:03 am

More behind our growing retail collapse and the workers involved in it – deep discount fitness club workers who get ill and have no sick days:

http://www.cbc.ca/news/canada/toronto/good-life-fitness-personal-trainers-sick-pay-work-ontario-1.4106196

I passed another semi-abandoned urban mall in Toronto this week. The only tenant is a Fit4Life outfit, advertising memberships for “$4.99 for two weeks”. This was in a big store space that used to be occupied by a higher end retailer.

The decline of retail is closely connected, imho, with bloated house prices and indebtedness. Because it is so visible to everyone, I think this will play a big role in changing perceptions about the economy.

Won’t end well…….

#86 Eurovision on 05.11.17 at 8:08 am

REmaps lighting up like an X-mas tree, most with haymaker price tags.
Many jokers taking about net worth at the local watering hole, but still holding.

#87 maxx on 05.11.17 at 8:11 am

#40 InvestorsFriend on 05.10.17 at 9:01 pm

“Average booze spending

#31 TalkingPie on 05.10.17 at 8:03 pm
#9
“Canadians spent $22.1B on alcohol last year, StatsCan says”

That comes out to $630 per person, on average. Even generously assuming only half of the population is actually of drinking age, we’re still at about $110/month.

************************************
Sure but after accounting for Smoking Man the average for the rest of us is about 47 cents a month, right?”

With all due respect to Smokie, that is very funny.
At any rate, $110 a month only comes to 4 or 5 half-decent bottles of wine.

#88 Renter's Revenge! on 05.11.17 at 8:11 am

75 Hot Money Mama on 05.11.17 at 12:31 am

“…or risk going blind with too much online porn (…a little is okay once in awhile)”

Hmm, interesting, so, exactly how much is okay and how much is too much?… I’m asking for a friend.

#89 Eurovision on 05.11.17 at 8:12 am

The “1 dollar” listings are priceless.

#90 Julia on 05.11.17 at 8:17 am

#72 Mark
How much insurance does CMHC have in force? $525B?

For them to pay out $200B-$300B,wouldn’t that mean that the entire portfolio of insured mortgages would have to see the underlying asset (real estate) sold for between 38% and 57% less than the amount of the mortgage outstanding?

#91 crowdedelevatorfartz on 05.11.17 at 8:20 am

@#70 Pete fron St Ceasare
“Think of me when you’re opening that box of Meow-Mix for breakfast”
*******

ALL cat food lovers know Meow Mix comes in a can and you never eat it before noon…..

Philistine

#92 Rational Optimist on 05.11.17 at 8:20 am

Can someone answer a question as to why a seller would increase his listing price after being unsuccessful for a while? I just saw one that, after being listed for a month, had a price increase of just over 10%. Same realtor.

That’s a bit of a head-scratcher to me.

#93 Dominoes Lining Up on 05.11.17 at 8:23 am

Toronto heading into budget troubles, it appears.

Zoo workers are on strike today. (Bizarre creatures remain on display in this comments section for free, however) The bloated zoo management fundraising team took in less money than the cost of their salaries last year.

Now, the city council is looking to “freeze” the budget for next year.

But…..

“…. it noted last year’s budget relied heavily on an overachieving municipal land transfer tax amid the hot housing market that all levels of government are now trying too cool — which could punch an even larger operating hole in Toronto’s budget.”

So, they are dreaming in technicolor, staring blindly past the impending bubble collapse, and still planning for 2% tax increases when they will most likely be facing much more in unpaid arrears.

We are entering a period where the rubber meets the road with strikes, new contract demands and big drops in government revenue. All on top of the real estate meltdown and retail implosion.

https://www.thestar.com/news/city_hall/2017/05/08/city-staff-recommend-budget-freeze-for-2018.html

Thank goodness our neighbour to the south is so politically stable right now, so that should help us stay calm…..

…oh, wait a minute……

#94 Julia on 05.11.17 at 8:25 am

Listings up again in my Toronto neighborhood.
House on my street listed 10 days ago, very quiet open house this past weekend and not sold yet.

List price same as sale price of an almost identical house up the street that sold last year in 4 days in a bidding war way over asking after a crazy open house. Except that the one from last year needed renovations and did not have a finished basement.

These guys were expecting a bidding war, I don’t even think they will get their asking price. Plus they already bought their next house.

#95 cramar on 05.11.17 at 8:28 am

#49 Smoking Man on 05.10.17 at 9:50 pm

———————

You wouldn’t be lying to us again. . . would you?

#96 Porsche on 05.11.17 at 9:21 am

Moody’s downgrades Canada’s 6 big banks and they’re all green this morning.

Go figure.

#97 NoName on 05.11.17 at 9:34 am

#82 Jeff Kowalsky on 05.11.17 at 7:47 am

heard of toster owen, yet?

#98 Stan Broock on 05.11.17 at 9:34 am

#79 Fortune500 on 05.11.17 at 2:24 am

correct, leverage and ‘win’ by doing nothing until the economy and wealth is all gone and the currency is destroyed.

There is no wealth created in a credit bubble, only wealth is redistributed.

At some point houses will go down 50-80 %, the loonie will go down to the fifties (0.5x), groceries will cost twice as much as today, no salaries will be increased, kids will have no jobs and baby boomers will not ever retire.

Economy can be broken totally, seemingly out of nowhere, I urge you to watch for the next 2-5 years how the situation develops in Canada.
We are walking on high rope with no life support under very strong wind and will eventually fall.

The fall will be epic.

After that a house in the frozen tundra with no economy will not be worth more than a house in a third world country, even African’s Sahara, at least they can produce cheap solar energy.

We will be driving on the selfies guy farts.

#99 westcdn on 05.11.17 at 9:35 am

Le Pen was beaten badly and she has resigned. It is not a surprise as people tend to vote to keep the status quo. Even if she had won, she would have been powerless to effect any change at this time. The complacent should enjoy their respite.

Oh, I think BC’s Clarke will pick up one more seat when the advance ballots are counted – not that it helps Alberta. I would be testing the waters for succession to the States.

I read that Hartford, Connecticut is considering bankruptcy to get out its financial bind. It seems there are not enough rich to tax and they walk when taxes get too onerous. I see public servants cashing in their DB pensions for exorbitant amounts and Ontario people selling their homes at stupidly high prices due to low interest rates. How long can this game of money for nothing continue? I have no idea as stupidity is infinite and nobody is exempt from blunders. But there is always someone who wins the lottery – luck is capricious and being at the right place at the right time is really hard to plan, worse than math.

http://www.investopedia.com/news/proposed-conn-19-hedge-fund-tax-could-drive-out-ultrawealthy/

http://www.zerohedge.com/news/2017-05-10/connecticut-state-capital-prepares-bankruptcy-amid-collapse-hedge-fund-revenue

I read somewhere that European governments are planning to issue 30 year bonds at low rates. Does this sound like someone who is afraid of inflation? Despite jawboning from the US Fed, I believe deflation is still on the table. So I think the Fed will raise interest rates until it happens. In Canada, a RE price decline will be the spark. A reasonable person does not want debt in a deflationary environment regardless of interest rates. Good news – I am wrong a lot. Bad news – I am right more often than wrong. I bet accordingly.

#100 Leo Kolivakis on 05.11.17 at 9:39 am

Last night, a friend of mine showed me a book he is reading by Graeme Falco, Building Wealth and Being Happy:

https://www.amazon.com/Building-Wealth-Being-Happy-Independence-ebook/dp/B01MXRXM1A

It’s a short, no nonsense book that most clueless Canadains should read, preferably at a young age.

I told him the classic books on ETFs are written by Jack Bogle and William Bernstein. Here is one of my favorites, the Intelligent Asset Allocator:

https://www.amazon.com/Intelligent-Asset-Allocator-Portfolio-Maximize-ebook/dp/B005XM6NRY/ref=sr_1_1?s=digital-text&ie=UTF8&qid=1494509314&sr=1-1&keywords=the+intelligent+asset+allocators

Of course, there is no one size fits all. Another friend of mine, a veteran pro trader, plows all his savings into Bell Canada shares and “collects a nice dividend.” He says he waits for the stock to sell off and plows his savings in there.

I know others who the same thing with Canadian banks, utilities and pipeline companies and just keep collecting dividends. It’s a concentrated strategy but they’re comfortable with it.

ETFs have worked because the masses are adopting passive investment strategies. There is a bubble going on in ETFs, one that even Jack Bogle is aware of:

But it’s fair to say that passive indexing will grow and this will create opportunties for good active managers.

People that are worried or don’t have a clue on how to approach passive index strategies should seriously contemplate the services of robo advisors offered by independent firms and big banks. Do your own due diligence, understand the fees and differences between them.

#101 rates vs captial on 05.11.17 at 9:44 am

Oh my, look at HCG take off in share price!

Not a canary in the coal mine and a complete non-event. One of a dozen head fakes since 2012 that bears like to grasp on to, in the hopes it heralds the decline of the market they missed out on.

#102 When Will They Raise Rates? on 05.11.17 at 9:48 am

Uh oh…

GTA real estate agents notice turn in housing market

https://www.youtube.com/watch?v=-bOuJisVRhM

#103 Smoking Man on 05.11.17 at 9:50 am

I Open up realtor.ca today. I set the filter to listings as of today. Wow.

Some one call a doctor. The website has a bad case of blue dot measles.

#104 Stan Broock on 05.11.17 at 9:55 am

The fall will begin with the total loss of confidence.

Not that smart people ever had it, it is just sufficient to look at the BOC leadership, how they can inspire confidence in anyone is a mystery to me.

When all the market participants realize that the king is naked, dumb and has a small dick and no balls then all the hell will break lose.

Sitting on the sidelines with a glass of scotch in my hand.

Cheers.

#105 Travis on 05.11.17 at 9:57 am

#76 jas on 05.11.17 at 1:37 am

Why the heck financial education is part of high school studies? Why? Why are kids not taught value of money, habit of saving, magic of compounding for growth?

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

It already is taught in our schools. It is working about as well as everything else taught at school:
http://financialuproar.com/2016/10/25/financial-literacy-education-doesnt-work/

#106 When Will They Raise Rates? on 05.11.17 at 10:02 am

Uh oh…

Canadian Banks Downgraded.

https://m.moodys.com/research/Moodys-downgrades-Canadian-Banks–PR_366355

#107 When Will They Raise Rates? on 05.11.17 at 10:03 am

https://media.giphy.com/media/rl0FOxdz7CcxO/giphy.gif

#108 westcdn on 05.11.17 at 10:10 am

I had some Aimia Inc preferreds – it looks like I was good to sell a few months ago. The American preferreds I bought as a replacement are doing well – numbers matter despite how hard math is.

#109 mike from mtl on 05.11.17 at 10:11 am

#21 Vancouver Troy on 05.10.17 at 7:08 pm

Why? Wouldn’t a bond ETF be tax free in an RRSP or a TFSA?

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

Yes it still is. The rationale would be that from a taxation point holding bonds in a non reg, the income distributions are taxed at your full bracket. And to not ‘waste’ tax free TFSA space on bonds, rather equities.

Personally I don’t do the split this way, TFSA is way too small for me, RRSP I don’t want to over contribute because I might not live here in 10 years.

Rebalancing three accounts plus a strategy would get too complex for me.

#110 soost on 05.11.17 at 10:18 am

Ooooh baby gimme those unsold inventory numbers!

#111 Renter's Revenge! on 05.11.17 at 10:27 am

#79 Fortune500 on 05.11.17 at 2:24 am

Your frustration is understandable and is felt by many. It’s hard to make sense of it all. Everything you were taught by your elders at home, school, etc., seems to be wrong, or at the very least, punishable through some perverse risk/reward system.

My best guess is that things are the way they are because of a combination of increasing automation and inflationary monetary policy. Labour loses its value over time because of automation, so it’s hard to get ahead by just working hard. Meanwhile, because of inflation, the prices of things go up every year, whether they have really increased in value or not. So the internet meme, “X all the Y”, applied to finance, becoming “Buy all the things”, is not a joke. You really do need to buy all the things to get ahead in today’s society. The only difference between home buyers and other buyers is the use of leverage (mortgages). Where else can you get 20:1 leverage when buying all the things? Even if houses rise in price by only 3%/year (historical average), with 20:1 leverage, your equity is rising by 60%/year.

Even Garth is not advising against buying real estate. I think his advice can by summed up as follows:
-Buy all the things (stocks, bonds, real estate, dogs, Harleys)
-Buy a house when you need one and can afford it
-Use your time wisely

#112 Mortgage Fraud on 05.11.17 at 10:38 am

#101 rates vs captial

HCG is worthless. Many stocks have even tripled before hitting zero. You play the foreign money card a lot, but fail to acknowledge the real issue: mortgage syndicate fraud. I believe you are either an idiot or a paid shill for the mortgage fraudsters. It’s over. Stop your whining.

#113 Mortgage Fraud on 05.11.17 at 10:55 am

CIBC and Turtle Creek were suckered into buying HCG before the great fall a couple of weeks ago. HOOP’s inside traitor double agent commits an egregious lack of proper DD and then resigns? A ‘mystery’ buyer for the loans revealed to be just another mortgage (fraud) syndicate. Dividend suspended. HISA value almost zero. 10% of mortgage loan originations are fraudulent (so it’s probably closer to 50%). Fortress and other RE developers scrambling to contain the contagion. Big 6 downgraded for no apparent reason or change from the situation in household finances.??? Canadian regulators asleep at the switch. OSC finally has some teeth. FSCO, OSFI and the rest of the gang still sleeping, while the rest of the world is shorting CAD.

Like I said: It’s over.

#114 bigrider on 05.11.17 at 11:09 am

I spoke with nonno Nunzarano this morning and asked him about current state of housing market.

He said , quote ” Looks-a-lika maybe dersa secondo chanca for da renting asuckers to maybea buya a place senza bidding awarsa for a little awhile. But you better a mova fast because a da prica…, yup you guess it ,she’sa gonna start again go uppa Uppa UPPA again ina da longa run ” !!

I cant argue with Nonno anymore.

#115 Centre Wing on 05.11.17 at 11:21 am

How do I know if my employer’s DB pension is investing in a smart way like this?

#116 fancy_pants on 05.11.17 at 11:29 am

the difference is one could get into RE with a warm pulse and a few bucks on the table. pretty darn hard to get a stock portfolio on credit.

And look, Johnny down the road made $250k in RE and only had to fork out $50k, a 500% gain, hey wow. Where do I sign up? And then bam, everyone climbs aboard. Can you blame them? When a gov’t rewards foolish behavior long enough, it self perpetuates.

The only question left is when the train (national and global) will derail. I have said before, we will all be at the bottom of the barrel soon enough. The line between stability and complete chaos grows thinner every year.

#117 Deploable dude on 05.11.17 at 11:31 am

Cute photo…..Minecraft Dog.

#118 Livin Large on 05.11.17 at 11:38 am

Wll Rational Optimist, raising retail pricing is a very time honoured marketing strategy especially in (but not limited to) the luxury goods retail market.

In the luxury goods market, price is perceived as the arbiter of the luxury. For example, a Mont Blanc pen is absolutely nothing more than a plastic case with a thin 10 carat gold band around it yet it sells for hundreds of dollars. There are 1,000s of equally well made pens selling for $20 yet Mont Blanc can keep selling a few pens at exhorbitant prices and still be very profitable.

The same with houses it seems.

If you can artificially support an aura of exclusivity or luxury by raising prices then you can sustain that aura by doing the same thing. When everyone else is slashing prices for similar items then an increase in price stands out as an increase in value.

BTW, this isn’t limited to the luxury market marketing. We see it every day in the grocery world. The same exact item consistently priced higher at one grocery chain than another. The only difference is the perception of the quality of the retailer etc by the consumer. That “cache” can be an enormous motivator for many consumers.

#119 smallcapsteve on 05.11.17 at 12:07 pm

On the discussion about “Why isn’t financial literacy taught in the education system?”

They try to do this, but what do you want people to learn? How to do FV/PV calculations? (covered in exponential functions see MCR3U, MCF3M). How to do simple interest calculations? (covered in linear functions see MPM1D/2D). Also financial calculations are a huge component of all the Basic/College level high school math courses…..

I have worked in high school education and I have written all three levels of the CFA examinations… Plus taken a wide variety of university accounting courses.. And I think saying things like “We need to teach financial literacy in schools” is a real knee jerk reaction…

You want people to learn budgeting? Guess what, that is just basic math. You can incorporate it into lessons, it doesn’t matter. People who want to overspend are going to overspend. You think that some jack ass that wants a BMW and is told they are approved for a loan is going to look back to his Grade 10 Math days and say, “Maybe I should draw up a budget?”

The sad thing about what has gone on in Toronto/Vancouver over the last 10 years is that many of these people who aren’t “financially literate” are making out like bandits, well those of us who are “financially literate” have missed out on a massive windfall…

It is the job of the financial regulators to prevent people from biting off more than they can chew…. It is the job of the education system to give students the tools to think critically and have the basic skills to make smart decisions when they get older on financial matters. A simple budgeting course will not do this….

If there is wide scale fraud, which there might be, many of these people will learn a valuable lesson. In the end they are responsible for the decisions they make. Not the school system, so don’t give me that crap….

The shitty part about this hypothetical lesson, is if it does end badly, which it probably will, it is a lesson we will ALL have to pay for… But I am sure we will look for excuses such as blaming the school system, blaming the politicians and blaming the regulators. In the end it will be the doing of house horny people, many of whom have taken a great deal of financial education, but made their decision based on the core belief that housing only goes up….

#120 Hollywood Jack on 05.11.17 at 12:23 pm

#113 Mortgage Fraud on 05.11.17 at 10:55 am

CIBC and Turtle Creek were suckered into buying HCG before the great fall a couple of weeks ago. HOOP’s inside traitor double agent commits an egregious lack of proper DD and then resigns? A ‘mystery’ buyer for the loans revealed to be just another mortgage (fraud) syndicate. Dividend suspended. HISA value almost zero. 10% of mortgage loan originations are fraudulent (so it’s probably closer to 50%). Fortress and other RE developers scrambling to contain the contagion. Big 6 downgraded for no apparent reason or change from the situation in household finances.??? Canadian regulators asleep at the switch. OSC finally has some teeth. FSCO, OSFI and the rest of the gang still sleeping, while the rest of the world is shorting CAD.

Like I said: It’s over.
———————————————————
What about the TSX, how does it fair in all this?

Money flows out of RE into stocks except the subprime guys?

#121 Ole Doberman on 05.11.17 at 12:25 pm

#103 Smoking Man on 05.11.17 at 9:50 am

I Open up realtor.ca today. I set the filter to listings as of today. Wow.

Some one call a doctor. The website has a bad case of blue dot measles.
———————————————————
Smokey it can’t be worse than Calgary rentfaster, can it?!

Can elaborate on your report…..

#122 IHCTD9 on 05.11.17 at 12:26 pm

#115 Centre Wing on 05.11.17 at 11:21 am
How do I know if my employer’s DB pension is investing in a smart way like this?
_______________________________

Doesn’t matter.

If you have a private sector DB pension, it is already underfunded and will eventually be a DC pension. Payouts will be adjusted down the road because there will be no other option other than insolvency of the fund. Retire asap.

If you have a public sector DB pension, it is also underfunded but will be increasingly supplemented via tax revenues. Whatever the investment strategy is means little if a bad one just means the taxpayers pick up the shortfalls. Vote Liberal and retire asap.

#123 People are Strange on 05.11.17 at 12:33 pm

Some interesting facts:

MLS Search – Toronto

Tues May 9th: 15,350 listings
Thurs May 11th: 16,257 listings

Increase of 6% in 2 days – exact same snapshot
Checked a few weeks back and it has jumped A LOT since then. I should’ve done a screenshot that day.

Mississauga:
Tues May 9th: 3,269 listings
Thurs May 11th: 3,465 listings
Same percentage

#124 Ronaldo on 05.11.17 at 12:41 pm

Good advice on tax efficient strategies when approaching retirement age.

http://www.chroniclejournal.com/business/national_business/tax-efficient-strategies-for-stretching-your-nest-egg-in-retirement/article_926f9673-dfbc-545f-aa1f-2898ca50b3d8.html

#125 rates vs capital on 05.11.17 at 12:48 pm

Mortgage Fraud on 05.11.17 at 10:38 am
#101 rates vs captial

HCG is worthless. Many stocks have even tripled before hitting zero. You play the foreign money card a lot, but fail to acknowledge the real issue: mortgage syndicate fraud. I believe you are either an idiot or a paid shill for the mortgage fraudsters. It’s over. Stop your whining.

—————

Oh yes, we have heard of the mortgage fraud angle since 2006. Everyone knows that the banks were lending to anyone with a pulse – and that mortgage brokers have been ‘creative’ with the loan applications. This has been the case with the self-employed and sales positions.

This is no secret – as every single person can think of someone with loan that conceivably should not have secured one given their debt situation and lack of job security. People have bypassed the 20% down for rental properties for years, claiming principle residences, and then securing a loan with 5% down.

Of course, there is mortgage fraud.

But it will continue as long as the party continues, because rising equity, attributable in part to foreign equity, mitigates the risk for all those people that should have not bought. As long as foreign capital is a key driver of the market, local debt and mortgage fraud means nothing.

#126 rates vs capital on 05.11.17 at 12:58 pm

Oh, another good one on GTA and foreign capital!

The affordability crisis that started in Vancouver has now enveloped Toronto

“What started in Vancouver, Canada’s scenic outpost in the west, has now enveloped Toronto. Housing affordability crises of historic proportions now plague both cities.

The warning signs were all there, even for casual observers. To their credit, certain mainstream media outlets saw this unfolding, and posted sentries to report back to central Canada – Kathy Tomlinson of the Globe and Mail comes to mind. But political leaders in the heart of Canada remained either unaware or craven and timid in their reaction. Worse, some political authorities from the “centre” tried to silence the obvious alarm bells ringing in Vancouver – insinuating in various ways that West Coasters were just a bunch of xenophobes or racists.1

But the concerns of Vancouverites were not a figment of their imagination. They were all too real. A wave of capital from abroad, primarily from China, was entering the Vancouver real estate market and driving prices skywards. And so now Toronto has joined the housing bubble club, as Vancouver put up a flimsy shield only to see some of that foreign capital bounce off it and ricochet east – and towards Seattle and Victoria.

Naturally, this dramatic development has sparked a massive debate in Toronto. Thirty per cent price gains year over year are hard to ignore, and tend to concentrate the mind of policymakers. For Vancouverites, what is striking in the Toronto debate is how eerie the parallels are to what transpired out west. The same bad arguments are being tossed around, and the same predictable obfuscation has emerged from real estate industry representatives and their apologists in academia and partisan politics.2

To call what is happening in Toronto a “debate” is to mislead somewhat. Differing perspectives are offered up, but the idea that many in the debate are interested in a search for “the truth” is questionable. As in Vancouver, the industry line in Toronto is that only “supply, supply, supply” can solve the problem. This has been debunked countless times, but it shuffles along unperturbed.3 It is a classic “zombie idea,” as Paul Krugman would say. That’s because there is simply too much money at stake for powerful people to ever allow the idea to die.”

#127 rates vs capital on 05.11.17 at 12:58 pm

And the link to the goodie!

http://inroadsjournal.ca/housing-price-lunacy-moves-east/

#128 IHCTD9 on 05.11.17 at 1:13 pm

#79 Fortune500 on 05.11.17 at 2:24 am
____________________________________

Yep, I kick myself all the time for not buying a crap load of Nortel IPO for peanuts and selling at 128.00, or Bre-X when it was a penny stock and then sold later at 280.00.

But then again, I’m also damn glad I didn’t buy Nortel at 127.50 and sold it for 2.00 a few months later, or Bre-X at 279.00 and sold it for 1.00 less than a year later.

Catch my drift?

While it may be better to have loved and lost, than to never have loved at all – this is most definitely not the case with home ownership.

#129 Hana on 05.11.17 at 1:31 pm

#123 People are Strange on 05.11.17 at 12:33 pm
Some interesting facts:

MLS Search – Toronto

Tues May 9th: 15,350 listings
Thurs May 11th: 16,257 listings

How do you get this number of listings?
I just checked Realtor and for Toronto, ON it is showing 13489.

#130 Mortgage Fraud on 05.11.17 at 1:35 pm

#125 rates vs capital

A-ha. Finally, you concede… a little. There is a world of difference between 2006 and today. A few weeks ago, the provincial gov’t has declared war on you mortgage fraudsters . That was when the ship started turning. This HCG fiasco is just the next step in the 180 degree rotation, and many others will be drawn out in its wake.

I agree that money launderers have taken full advantage of the situation, but majority are not foreign, and you know it. Bad, very bad, Canadian people have laundered tens maybe hundreds of millions through the ‘look-the-other-way’ alt lenders and their fake ‘trucking’ companies, etc… Causing house prices to exceed double and beyond what normally the market would bear, and are only sustained by these low rates. For you to promote the absolutely unsubstantiated claim that these people are foreigners from China, is mind-boggingly stupid at best, and outright xenophobic at worst.

Your link above references the Fraser Institute and mainstream media. Both have very little credibility at the moment. Wait a minute, are you affiliated with Terence Corcoran of the Financial Post? He’s getting his a** handed to him by social media.

#131 Etfs on 05.11.17 at 1:53 pm

Why so much love for these vehicles ? They don’t re-invest dividends . Tedious . Sector/regions do not necessarily beat its mutual fund brethren . Have a look at TSX small cap etf: horrible performance on a relative basis

Even core index related etfs can underperform
;

Compare xic vs a cdn equity top 10% mutual fund . There is no comparison .

What’s with this ‘smart beta ‘ etfs ? That’s active management with NO proven history

#132 IHCTD9 on 05.11.17 at 1:57 pm

#103 Smoking Man on 05.11.17 at 9:50 am

I Open up realtor.ca today. I set the filter to listings as of today. Wow.

Some one call a doctor. The website has a bad case of blue dot measles.
________________________________________

Are they all just looking to cash in?

Or are they looking to “get out of jail free”?

#133 James on 05.11.17 at 2:23 pm

Can you sell your house, collect the windfall, punt debt, reduce risk and live for free? It may be easier than you think.

“Aut inveniam viam aut faciam”

#134 James on 05.11.17 at 2:33 pm

Ha, ha, ha too funny. Dumbo Trump was hoodwinked!
The White House did not anticipate that the Russian government would allow its state news agency to post photographs of an Oval Office meeting between President Donald Trump, Russian Foreign Minister Sergei Lavrov and Russia’s ambassador to the US, a White House official said. What did they expect?
Photos of Wednesday’s meeting, taken by a Russian state news media photographer one day after Trump fired FBI Director James Comey amid questions about possible Trump campaign collusion with Moscow, were ultimately posted by Russia’s news agency, TASS.
Actually I have never seen Trump smile so genuinly. Hmmmmm, Trump was heard saying “Sergei I canned Comey the other day, did I do good Sergei”?

https://www.rawstory.com/2017/05/they-tricked-us-white-house-furious-russia-posted-trump-photos-on-official-government-accounts/

#135 Stan Broock on 05.11.17 at 2:37 pm

Another inter-generational theft

https://ca.finance.yahoo.com/news/ontario-introduces-hydro-legislation-lower-174101540.html

Baby boomers want cheap hydro subsidized by the next generations at the cost of more debt.

So glad I left.

#136 Ron Maiden on 05.11.17 at 2:54 pm

Looks like HCG is making a come back – housing Armageddon postponed or sucker buyers?

#137 AGuyInVancouver on 05.11.17 at 3:11 pm

#2 For those about to flop… Indeed. I drive through Richmond (BC) every week and the same For Sale signs have been on the same houses for months. That’s what happens when HAM gets cooked.

#138 Figarochi on 05.11.17 at 3:26 pm

@126

“This is no secret – as every single person can think of someone with loan that conceivably should not have secured one given their debt situation and lack of job security. People have bypassed the 20% down for rental properties for years, claiming principle residences, and then securing a loan with 5% down.

Of course, there is mortgage fraud.”

======

This reminds me of the quote from the Big Shot….

“Tell me the difference between stupid and illegal and I’ll have my wife’s brother arrested”

#139 Doghouse Dweller on 05.11.17 at 3:41 pm

Good news dogs,
The Deposit Insurance Corporation of Ontario, effective January 1st, 2018. An increase in deposit insurance coverage up to $250,000 on eligible insured non-registered deposits.
https://www.dico.com/design/0_0_Eng.html

And the Stephen S. Poloz feds can`t do better than a paltry 100k . What gives ?

#140 MORTGAGE BROKERS IN AN ALL OUT PANIC on 05.11.17 at 3:47 pm

Look at the mortgage broker shills posting in a panic. The best is how mortgage fraud is normal and everyone does it so its ok. Look at the real economy falling apart. The house of cards is falling apart. Canada =lies ehich they repeat over and over. Moody’s and the rest of the world now see the lies. Its game over for mortgage fraud which means itd game over for the housing bubble.

#141 Capt. Serious on 05.11.17 at 3:49 pm

#119 smallcapsteve on 05.11.17 at 12:07 pm
On the discussion about “Why isn’t financial literacy taught in the education system?”

They try to do this, but what do you want people to learn? How to do FV/PV calculations? (covered in exponential functions see MCR3U, MCF3M). How to do simple interest calculations? (covered in linear functions see MPM1D/2D). Also financial calculations are a huge component of all the Basic/College level high school math courses…..

^^ This.
All the right basics are being taught, but it’s up to people to put the math to use. Some people are not interested in learning or are deterred from learning.

#142 lol on 05.11.17 at 3:54 pm

Uh oh…

GTA real estate agents notice turn in housing market

https://www.youtube.com/watch?v=-bOuJisVRhM

………….

one will never catch the top in anything. That’s not the plan. Mini-fortunes have been made in a short period of time.

#143 Game Over on 05.11.17 at 4:20 pm

FWIW to the prudent savers and investors out there that followed the advice of sound investing, we may be behind right now but I think a lot of people will piss away their house lottery winnings.

Most people got lucky on the house (good timing, right age, right circumstances, etc) and have no idea what an RRSP or TFSA even is. Most do not know how to manage this money and will blow it like most people that win the lottery blow it. Hell, most that haven’t even crystallized gains are living like rocks stars on equity. Case in point, co-worker bought a brand new Benz and Infinity on the equity he built up in the house. Great guy but I think he f**ked up.

The older folks that sold because they have to for retirement, hopefully they learn their lesson and manage this pile of money well, so we don’t have to bail them out later. They got the greatest generational wealth transfer ever. Don’t blow it! And take care of your kids ;)

As for the younger people, screw the house and live your life. Build wealth, not debt.

#144 Pas Ici?! on 05.11.17 at 5:10 pm

I am based in Montreal, and have recently been hearing glowing home-owning employees during lunch hour talk about how the housing bubble is now finally coming to Montreal for real, because of the anti-bubble measures in GTA and Vancouver. Is that just speculation or is this for real? Where would one get reliable information?

#145 On another note on 05.11.17 at 5:15 pm

US rate hike chances have just shot yup further! From today:

“The Fed Gets another Reason to Raise Rates”
http://wolfstreet.com/2017/05/11/fed-gets-another-reason-raise-rates-unravel-qe/

#146 People are Strange on 05.11.17 at 5:17 pm

Hana;

In Realtor.ca home page, I just type in Toronto and it brings up a list of sections of TO. Just click Toronto ON ( 2nd last choice I believe). Same for Mississauga.

#147 Tony on 05.11.17 at 5:19 pm

Re: #136 Ron Maiden on 05.11.17 at 2:54 pm

The least amount of risk if you’re going to buy HCG long is to wait just before the trading halt in Home Capital stock early in June and hold until the OSC decision comes out. The American short sellers will scream blue or bloody murder when the OSC reads the decision.

#148 People are Strange on 05.11.17 at 5:23 pm

I just checked again – now it’s 16,472 listings in TO

#149 Alice on 05.11.17 at 5:28 pm

@#138

Equifax said 13% of people polled think it’s okay to lie on a mortgage application. That’s the number of people that would *admit* to it.

http://investor.equifax.com/releasedetail.cfm?ReleaseID=1007536

#150 jess on 05.11.17 at 5:30 pm

IMF recent report…”historically, “deterioration of the interest coverage ratio corresponds with eventual widening in credit spreads for risky corporate debt.”
Although, the vix says opposite – 23 year low

refresh —BROKERS WHO CHEAT CLIENTS
By David A. Vise September 24, 1995 wpost
=========
the Vanguard effect
Vanguard Is Growing Faster Than Everybody Else Combined

By LANDON THOMAS Jr.APRIL 14, 2017
investors sank $823 billion into Vanguard funds…(nyt)

==========
…”The IMF report notes further that, historically, “deterioration of the interest coverage ratio corresponds with eventual widening in credit spreads for risky corporate debt.”Although, the vix says opposite – 23 year low …”
Yet budding evidence suggests that VIX ETPs — a more than $3 billion industry that includes the popular $1 billion iPath S&P 500 VIX Short-Term Futures ETN, symbol VXX — have altered the futures market, and at times indirectly influenced the index itself.”
http://wallstreetonparade.com/2017/05/imf-report-u-s-corporate-debt-could-be-trumps-waterloo/

#151 Long-Time Lurker on 05.11.17 at 6:02 pm

#150 jess on 05.11.17 at 5:30 pm
IMF recent report…

Good article.

#152 Bears don't know bull... on 05.11.17 at 6:14 pm

#13 #28 #112 #113 #130 #140… and Flop… and garth… and bears…

You see it because you believe it (15 years counting)… the rest won’t believe it until they see it.

#153 Leo Kolivakis on 05.11.17 at 10:37 pm

WSJ reports that Canada’s Home Capital Group Posts Slight Decline in Profits :

https://www.wsj.com/articles/canadas-home-capital-group-posts-slight-decline-in-profits-1494550978?mod=yahoo_hs&yptr=yahoo

A “slight” decline? Is that what you call creative accounting? Whatever…still wouldn’t touch the stock!