Amoebas

Okay, so we both know you have ‘realtor.ca’ included in your bookmarks, along with GreaterFool and that underwear place. Go there, select ‘Toronto’ then pull back to include all the real estate from Belleville to Barrie, to K-W and down to Niagara – the so-called Greater Golden Horseshoe. Now choose “Listed Since” on the menu bar and pick seven days ago. Click and behold.

In that period of time, in that wide region, more than 10,000 listings have come to market since last Monday. Yes, some of them are duplicates and some are re-listings which expired or changed price. But, whoa mama, that’s a lot of fresh meat!

For the past two months this pathetic but oddly fetching blog has been telling you about the winds of change. Suddenly the bidding wars ended. Buyers started to back out of deals. Realtors held offer nights and went to bed lonely. Sellers saw their great, greedy expectations smashed. Now listings are sitting for weeks, not hours. Sales have started to sag and, as mentioned above, we have a listings orgy in play.

All of this was evident even before April 20th, when Ontario dropped the hammer on the housing market in a move with national implications. Since real estate provides a fifth of the entire economy and 40% of current growth, the abrupt shift will be felt far beyond the shimmering glass condo towers of the Big Smoke. Imposing universal rent controls alone is expected to halt about $6.5 billion in residential development and actually increase tenant costs. Ah, yes. Government.

Well, all that anecdotal evidence here – the stories of jilted and unrequited sellers – now has some statistical support. The numbers are early, but decisive. This baby’s going down.

Sales of pre-owned homes across the country dropped 2% last month from March – which is a lot for the primo selling period of the entire year – and in Toronto they tanked 7.5% from April of 2016. CREA also revealed overall housing activity took a hit in 70% of all the markets in the country. Ouch.

That’s one shoe dropping. The other is the surge in listings – as evidenced by that 10,731 bloat in the GGH area mentioned above. It’s turning into an historic tsunami of properties flooding the market. By the realtors’ count, listings in the GTA have jumped 36%, which means May 2017 will be a far different month than was seen last year. Buyers have dozens more houses to see in any given area or price range, more time to shop around without jumping into a frenzied blind auction, and (increasingly) more motivated and less moronic sellers to work with.

Prices, of course, have not started to decline – and won’t until summer brings the realization that what sold for $1.9 million in February may never again fetch those dollars. House prices are sticky. Vendors are rushing to market to try and cash in at peak values, so it will take 60-90 days, until their initial listings expire, for reality to set in.

Then, natch, there’s Home Capital. While that company accounts for just 1% of the national mortgage pool, it is a lot more significant in the GTA, where subprime lending is common for $1 million+ houses for which a minimum 20% downpayment is required. Add in double land transfer tax, and a so-so $1.5 million unrenovated house with issues requires a down payment of more than $350,000. Scores of people borrow much of that, then arrange a conventional first with a big bank.

Home Cap may not be the stuff contagion is made of, but it’s helped douse the libido of the serially house-horny. Combined with the widely-publicized downgrading of the Big Six banks last week, this stuff all sends a signal we may be facing systemic risks that were undetectable a year ago.

Well, no bank will fail. Home Capital will be salvaged and subsumed somewhere. The financial system will roll along undented, but there will be consequences. After real estate sales decline, prices will stop rising and then, selectively, begin to falter. Nobody knows where the bottom will be, so it’s pointless to guess. But given the way we’ve embraced debt and allowed the economy to be hijacked by housing, a recession seems the obvious next phase.

So if you can sell, do it. If you don’t need to buy, then don’t. Hug your employer and offer to work late. Pray for your brother-in-law drywaller with the three condos and a new Mercedes CLA. Invest prudently, maybe with the portfolio outlined here yesterday. The time to vultch shall come.

In the meantime, watch the blue dots multiply like crazed amoebas. Many lives will soon change.

208 comments ↓

#1 Victoria Real Estate Update on 05.15.17 at 6:22 pm

YEAR-OVER-YEAR DEMAND FOR DETACHED HOMES TANKS IN APRIL

Sales of detached homes across Greater Victoria fell 43% from year-ago levels in April.

Remember the Victoria R/E board’s prediction at the beginning of this year?

“Demand Likely To Continue In 2017”. – January 3, 2017

Self-serving realtor-generated FOMO. It’s always nice to see that. Looks like they totally nailed it with that prediction. Not.

Detached sales in 2017 compared to the same month in 2016 (year-over-year):

January: -18%
February: – 25%
March: – 25%
April: – 43%

It’s obviously not just an April thing. It would be unfair and misleading to spin it that way.

The dramatic year-over-year sales declines each month in 2017 shouldn’t be surprising to those who have been reading my posts over the past year. I noted that sales began to weaken after April (approximately) of last year at an abnormally fast rate. By late in the year we started to see monthly y/y sales drops. Victoria’s sales downtrend has worsened to the point that we saw April lose almost half of its sales from a year earlier.

This is precisely the kind of big picture stuff that indicates that the bubble is at or near its maximum size.

Detached sales in April came in 14% below an average year for sales in the region (which was in 2007). The drop in sales would be significantly worse if we adjusted for the amount of population growth in the region since 2007.

Sales in April dropped 6% from March. What’s noteworthy about this is that sales typically increase from March to April as the all-important spring buying season ramps up. Over the past 5 years, sales from March to April have increased anywhere from 11% to 34%. Last year’s increase was 24%. In the past 12 years, sales dropped from March to April only in years that prices fell.

SITUATION RED ALERT FOR VICTORIA’S HOUSING MARKET

Don’t expect Victoria’s R/E board to go anywhere near the subject of overvaluation of the local housing market.

CMHC recently assessed housing markets across Canada and gave Victoria a code red (see first chart).

CMHC’s board of directors and president are appointed by the government and are accountable to parliament. This means CMHC is likely to dramatically understate the severity of the situation, much the same way that Canadian policymakers, economists, bankers, etc. do.

Basically CMHC indirectly acknowledged that Victoria indeed has a housing bubble.

That Victoria has a housing bubble is, of course, old news. The Economist had already declared (6 years ago in 2011) that “Canada’s Housing Market More Overvalued Than U.S. At Its Peak”. In 2011, Victoria’s bubble was at least average in size compared to other Canadian markets and has definitely inflated substantially over the past 6 years, with gains in house prices leaving gains in incomes far behind. Victoria’s bubble price run-up began after Canadian policymakers dramatically lowered mortgage lending standards (after 2000).

THERE’S NO PLATEAU IN A HOUSING BUBBLE

Housing bubbles happen all over the world and have definitely been a thing over the past number of decades. There has never been an example anywhere at any time where a bubble’s price run-up plateaued and stabilized without a deep correction taking prices back to the level where the bubble began (approximately).

The bottom line here is that when prices are at extreme levels compared to incomes (and when other metrics turn extreme) indicating that a bubble exists, there is always a major, multi-year correction that brings prices back to the long-term mean (and often overshoots it). The market correction also lowers extreme household mortgage debt back down to normal levels which removes the threat to the economy that this situation creates.

A bubble ending in a plateau without a deep correction is the kind of thing policymakers, economists, bankers, realtors, etc. dream of that never happens.

#2 blobby on 05.15.17 at 6:23 pm

Meanwhile Van, we’re being told that listing are at a 25 year low?

(allegedly – I never know whether to believe these stories or not)

#3 Festy Lindholm on 05.15.17 at 6:23 pm

Garth, How long do you think Poloz has at the BoC? Might Carney be coming back after he is done at the BoE?

#4 Victoria Real Estate Update on 05.15.17 at 6:24 pm

THE FUTURE OF HOUSE PRICES IN VICTORIA

The start of Victoria’s inevitable deep housing price correction isn’t far away. As I’ve pointed out, the market correction process is well established in Victoria with demand for detached houses tanking 43% year-over-year.

Housing bubble market conditions are extremely atypical and prone to quick changes. Things can go from one extreme to another in an instant. A sellers market can suddenly become a buyers market within weeks. Consider how fast things have changed in Toronto in the last 2 to 3 weeks. Sellers there have been forced to accept that selling now will fetch them significantly less (one to two hundred thousand or more) than even a month ago. That’s what happens with bubbles.

We could see prices begin to fall in Victoria within a month or two. Those potential sellers who think they can wait for clues from the market to time the peak perfectly will be disappointed, just like they are in Toronto.

As a housing bubble inevitably deflates, abnormally strong price gains (with panic buying) are followed by abnormally strong price losses (with panic selling) as the market’s long-term fundamentals are restored. Emotions play a big role as prices rise, but they also play a big role as prices fall. Most will agree that fear is stronger than greed and fear is what takes prices down.

And markets with high levels of speculation always end up experiencing particularly harsh price declines. Consider the price declines (after 2006) of these three American cities that didn’t experience California-like price run-ups with California-like levels of speculation.

Dallas: – 11%
Boston: – 18%
Denver: – 12%

Compare with the price declines of these California cities that experienced Victoria-like price run-ups and Victoria-like levels of speculation:

San Francisco: – 45%
Los Angeles: – 41%
San Diego: – 42%

A brutally destructive outcome awaits every speculative, liar loan housing bubble.

#5 dakkie on 05.15.17 at 6:26 pm

INSIDER: Housing market is literally the exact same as before the 2007-2008 crash

http://investmentwatchblog.com/insider-housing-market-is-literally-the-exact-same-as-before-the-2007-2008-crash/

#6 Lulu on 05.15.17 at 6:26 pm

The peak is gone for sure, for the last 10 years this time around, listing is so few and far in between, NEVER like this time this year with exploding everywhere. This is going to be epic and pain killing.

I shall move to up north hide a bit and wait for the dust to settle and pick up some gem.

#7 I'm Not Poloz on 05.15.17 at 6:27 pm

Everything is about Toronto, so get ready for QE1 and NIRP rates to save the real estate bubble in Greater Toronto.

Poloz dreams of that US$0.30-0.40 Loonie and negative interest rates, while Morneau wants us, in the future,to tutor his 14-year-old feminist daughter for free… Beware of false accusations & NEVER be alone with your student in a room, even if you’re working for free under Poloz’s utopia of a devalued Loonie.

***Think the Loonie can’t reach the under-50 cent? The NZD was under 40 cents in 2000, and the AUD was at 48 cents in 2001.

#8 Flaherty 2.0 on 05.15.17 at 6:30 pm

And what would prevent the govt from rolling out some of those Flaherty measures taken in 2009 (rolled back since). If I recall, there were four in rapid succession, and they prevented a mega bubble burst; when the s$&t hits the fan again, do you really believe the govt will sit back and let it happen?? They did not in 2009. If they have to, they will allow 50 year amortization, I bet; with Justin at the helm, anything goes.

#9 FLHTK on 05.15.17 at 6:30 pm

Brother in law with the 3 condos should sell asap lol

#10 Mark Baum on 05.15.17 at 6:35 pm

How a real estate correction will affect the TSX & Banking sub-sector, by Hilliard MacBeth: https://dir.richardsongmp.com/documents/136777/590856/Real+estate+contagion.pdf/82472c25-ce81-4b91-ae73-6cbdfa16b379

#11 sam on 05.15.17 at 6:36 pm

Does anyone know why Vancouver still has yet to see an uptick in new listings?

News today says Vancouver listings are at a 20 year low…

#12 Frank on 05.15.17 at 6:38 pm

So this didn’t happen during last years run up in Vancouver.

What’s different? Foreign ownership?

#13 crdt on 05.15.17 at 6:40 pm

Having a hard time understanding how the banks will keep wearing their shades because the future will be so bright. I must be pretty stupid…

#14 The listener on 05.15.17 at 6:45 pm

“I was lucky enough to see with my own eyes the recent market crash, where they lost several million dollars, a rabble of dead money that went sliding off into the sea…”

#15 Cloudy on 05.15.17 at 6:46 pm

Garth or blog dogs I have a question about the principal residence exemption. I know someone that recently sold their rental and because they had previously lived in it they were able to apply for (through their accountant) and get the principal residence exemption even though they had been renting it out for several years. How many of these loopholes exist to avoid taxes on selling?

#16 Cheap Houses on 05.15.17 at 6:48 pm

Houses in Greater Van are as high as ever with multiple over bid pricing and zero money launderers are going to jail.

#17 I'm stupid on 05.15.17 at 6:51 pm

It was a good run for the cla driving drywaller. Now reality will smack him in the face. Every gambler is the same, spend like crazy when they’re on a roll and cry when their down. We saw the spending spree of the gamblers over the last 10-15 years, now we’ll see the tears. In the greatest run up in house prices this country has ever seen most have squandered the gains and their mortgages are larger than their original purchase price.

The only bright spot is that the blood sucking boomers are going to go into retirement begging for handouts. Good luck waiting for someone to wipe your ass as a poor person. But at least you had granite counter tops and stainless steel appliances. Smh people deserve their fate, no one to blame but your own stupidity.

#18 In Markham on 05.15.17 at 6:53 pm

I did sell on April 20th for 160 k over asking. I just hope that they buyer doesn’t back out as closing is not until August 15th. Fingers crossed……

#19 TrumpForTheAges on 05.15.17 at 6:53 pm

Not really sure why the endless postings regurgitating the same thing? Have we seen the peak in housing prices? Perhaps. But will we see a US like drop that reverberates throughout the economy as you seem to be suggesting? Very unlikely.

This blog is very selective in what data that it likes to focus on so that it can maintain its biased perspective. Let’s use Vancouver as an example. No castrophe there.

The reality is we are seeing signs of stagflation globally. Years of central banks injecting capital into the markets will create inflation but unfortunately the return on that investment has been subpar, resulting in growth not keeping up with inflation. And we know inflation isn’t the result of prices going up, it is the erosion of purchasing power. No wonder bitcoin is going through the roof. So as currency continues to erode, global appetite for hard assets, particularly in nation like Canada will continue.

Blog dogs should bookmark this post, for it is far more likely this time next year Canadian real estate will be in a trading range without the economic pitfalls being forecasted here and interest rates still meddling along in the lower than normal range.

#20 Raj on 05.15.17 at 6:54 pm

Orangeville , A whopping 45 % new listings in one month!!
This is a perfect storm !!

#21 Sebee on 05.15.17 at 6:54 pm

I don’t always read blogs. But when I do, I’m the most great fool in the world.

#22 Mauro on 05.15.17 at 6:56 pm

Garth, I give it a month before prices skyrocket again as people start to buy at a 2% discount thinking they’re getting a deal.

House prices won’t fall. I used to think they could. Perhaps a tiny bit but nothing significant.

I’ll never own a home. Ill never be able to move out of my parents house. Unless I rent.

But I’m Italian. We don’t rent and we don’t buy attached homes let alone a condo in leslieville. My dad would freak out.

But I’ll sit back and wait a bit longer. I’ve waited this long already.

You, Hilliard, Ross Kay and Marc cohodes better be right. I’ve bet on you guys for a decacde.

Besides, Toronto now has a real housewives franchise. That’s pretty much a done deal our city will stay expensive.

#23 Rook on 05.15.17 at 6:56 pm

Garth – ‘facing systemic risks that were undetectable a year ago.’

With no intended disrespect, there were risks detectable, just maybe not by you personally. People like Marc Cohodes, Hilliard Macbeth and others have been talking about systemic risks from fraud and sub-prime mortgages for more than a year. They even appeared in the media regarding this. It’s just that no one takes it seriously until proven right.
I also believe that anecdotal evidence does have some merit. Personally, I was told to go see a co-workers ‘morgage broker’ when my bank wouldn’t grant me enough money to buy a townhouse in Victoria. This broker apparently photoshops T4’s. Hows that for sub-prime? I politely declined and am currently priced out of my city. Double income professionals here.

Now when will people start taking seriously the voices calling for change around speculation from foreign money. Capital flight from China is not a secret but a global phenomenon. Not to mention Americans buying at a 30% discount and likely a much larger discount in the future. (I’m sure if it was capital flight from a country like Britain or the US, no one would call ‘rasism!’ when anyone wanted to address the issue)
The numbers don’t tell me foreign speculation is not rampant. The numbers collected are inaccurate and easily manipulated by each buyer and representative.
Ah well. I guess it’s too late now anyways. See ya’ll at the bottom.

Learn what ‘systemic risk’ is. — Garth

#24 PreBoomer on 05.15.17 at 6:57 pm

Man oh man…yes, everyone get ready to sell.
To me – I’ll buy it all.

#25 GTFO Canada ASAP on 05.15.17 at 6:58 pm

Hey guys fairly new reader here. Where are you guys getting new listings data from? Also, is there any sites that list recent sales data or is that the stuff that MLS keeps top secret?

#26 Chaddywack on 05.15.17 at 6:59 pm

Funny that compared with Toronto Vancouver housing is at a 20 year low.

http://www.cbc.ca/news/canada/british-columbia/housing-inventory-low-1.4115251

I wonder why people aren’t desperate to list in Vancouver yet….HAM?

#27 Tony on 05.15.17 at 7:00 pm

Garth specking of dry wallers . The dry waller who rents the garage beside me would come by almost daily (5-6 times a week) to take or leave supplies for past two years. About a month and a half ago he started to pass by less and less. Now its 1 or 2 time tops a week. He was even workong hard through winter and it all seemed to have stopped. Its an interesting observation from one dry waller.

#28 SquareNinja on 05.15.17 at 7:04 pm

Since my mortgage is at Home Trust, subsidiary of Home Capital… do I need to be worried? My original LTV was 65% in early 2015 and at today’s prices, more like 40% LTV. The thing is, combined household income is very low (+ consumer debt) gives us a TDSR that a conventional bank would not accept.

Should I be worried?! Might Home Trust mortgages be bought by one of the Big Six? Thoughts? Appreciated!!!

#29 Jerry on 05.15.17 at 7:04 pm

I haven’t noticed many commentaries on the Vancouver market. Have you given up trying to predict when it will tank?

#30 acdel on 05.15.17 at 7:05 pm

Meanwhile here in Calgary, a house across the street from me went up for sale two days ago, it already has a sold sign on it; go figure?? I just do not understand this market any longer, especially since this city has the highest unemployment rate in the country. Nothing makes sense any longer; be smart people!

#31 For those about to flop... on 05.15.17 at 7:09 pm

Once a boss , always a boss on 05.15.17 at 3:06 pm
@ 116 For those about to flop

You claim to have a head like a monkey’s bum, but your housing status updates are golden. All brilliant men are denied good looks by the gods on high, so that their thoughts and words are given more weight.

Socrates – another self-proclaimed monkey bum – is one of the great independent human thinkers of human history. But like all independent men of great courageous, he was eventually condemned to death for making the smaller minds around him feel too uncomfortable.

But don’t worry, we won’t make you drink hemlock….so long as you keep up with the housing updates!

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

Thanks for the encouragement ,but I have absolutely no chance of being condemned to death for making those around me around me feel uncomfortable about having a smaller mind.

For example, I just found out that a Hippocampus is part of the brain and not some University in Africa where they teach people to not get trampled by a Hippopotamus…

M42BC

#32 Livin Large on 05.15.17 at 7:10 pm

I could hear the Battle Hymn of The Republic playing softly in the background as I read todays missive.

#33 abraxas on 05.15.17 at 7:13 pm

It’s ridiculous what people in Canada (and to a lesser extent the US) will pay for what is essentially plywood shacks. $1M doesn’t even buy you a real house (which means real bricks, real mortar and real roof shingles). Everything used to build housing north of Mexico is garbage made to delaminate and fall apart in ten years.

#34 Tony on 05.15.17 at 7:13 pm

SimplyPut7 on 05.15.17 at 4:24 pm
There was an interesting remark made by Home Capital Group, board member Alan Bidden today on BNN at 7:25 min:

“The market is much deeper than people give it recognition for, it’s not just equitable and home capital, there are a lot of other sources of financing, most of them private and non-regulated…”

http://www.bnn.ca/video/first-on-bnn-how-home-capital-is-planning-to-regain-investor-confidence~1123769

Does he mean syndicated mortgages? Where retail investors took money from their home equity line of credit to give to high risk borrowers and haven’t seen a return and are suing the borrowers for millions?

http://www.cbc.ca/news/canada/toronto/syndicated-mortages-1.4078124

http://www.cbc.ca/news/canada/toronto/syndicated-mortgages-losses-1.4083261

This housing bubble will implode . People borrowed their fake equity to double down. Not everyone will be able to cash out before prices are cut by more then half

#35 Spence on 05.15.17 at 7:15 pm

If “a recession seems the obvious next phase”, why not cash out of the Canadian portfolio completely? Shouldn’t you be advising clients to invest their portfolios 100% outside of Canada?

Of course not. — Garth

#36 Tulips on 05.15.17 at 7:17 pm

Five years after moving into our current (rented) home, we’re given up on any hopes of a good time to vultch on housing. Don’t get me wrong, this is a very positive thing, as we’ve wasted far to much time lately watching the RE market get more and more Tulip-like and stressing about it.

We love where we live and often dream of what we would want to do with the place if we owned it. But that’s currently a waste of time as to buy it we would kill our cash flows and we wouldn’t be able to do anything to it anyway. Our annual rent costs less than 2% of the current market value. It’s hard to find the desire to squash our cash flow just to move our name onto the deed and maintenance bills of the home we already live in. Time to stop fretting about the housing inflation and just keep on enjoying life and the people around us where we are, all the while adding new money every year to our growing investment pool. If we keep seeing 6-7% growth while continuing to invest 20% of our take-home income, we’re heading toward a very comfy retirement. And if a time to vultch does really appear we’ll be ready. But we’re no longer waiting for it – that’s proven to be a waste of time.

#37 Stone on 05.15.17 at 7:19 pm

Okay, so we both know you have ‘realtor.ca’ included in your bookmarks, along with GreaterFool and that underwear place.

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

Ok. I get the first two and do have those in my bookmarks. Underwear place? I’m clueless. What’s that about?

#38 Tony on 05.15.17 at 7:20 pm

So many fake news by RE pumpers on this blog. The lies are so pathetic and transparent its not even funny. This housing bubble is going to have a head fall. Without fraud mortgages prices will be cut in half. No buyers at these bubble prices and speakers are looking to get out before they lose it all. Not enough real buyers for all the speakers

#39 bdwy sktrn on 05.15.17 at 7:20 pm

#8 Chaddywack on 05.15.17 at 6:59 pm
Funny that compared with Toronto Vancouver housing is at a 20 year low.

http://www.cbc.ca/news/canada/british-columbia/housing-inventory-low-1.4115251

—————-
The BCREA says the supply of homes for sale declined 17 per cent from April 2016. “On a seasonally adjusted basis, active residential listings have declined 50 per cent since 2012 and are now at their lowest level in over 20 years.

——-
could it be any clearer?

Not enough supply in good times and in bad.

Van is where you can’t lose in RE (flop proves this daily by showing that in the worst market we have seen in years, prices are not going down – sure if you sell in 1yr, there are expenses, but prices are rock solid)

#40 choptstix on 05.15.17 at 7:25 pm

interesting chat w director behind ‘no fixed address’ documentary on van’s housing crisis…we’re too apathetic, in short: http://www.inews880.com/syn/112/310923/the-jon-mccomb-show-examining-the-root-causes-of-metro-vancouvers-affordability-crisis

#41 Ronaldo on 05.15.17 at 7:27 pm

#15 Cloudy

This may answer your query.

http://business.financialpost.com/personal-finance/taxes/converting-your-principal-residence-into-a-rental-property-or-vice-versa-heres-what-ottawas-new-rules-mean-for-you

#42 Johnny Boy on 05.15.17 at 7:27 pm

Do you have any idea how many people in the last couple of years have left their daytime jobs to become associated with real estate industry in some way or another? In Toronto, almost every body is some how linked with this frenzy, one way or the other. Can’t wait for the shitshow to start. I for one will not be shedding any tears for these morons.

#43 Been Here, Ignore That on 05.15.17 at 7:32 pm

When doing one’s due diligence, I would encourage everyone to look at the all the head fakes that took place in the ‘Spring Market’ for the past numerous years.

Every Spring, bears get frisky and excited at the prospect of a rise in listings – because it is supposed to herald a change in market conditions, and the eventual decline. After all, how can prices go up with all that supply?

But wait, something unexpected happens – prices go up, and continue their multi-year ascent.

And every year, some black swan event or mind altering event is supposed to shake the house lust from he moisters, the boomers and the X’ers – maybe its H1N1, the a Chinese currency shakeup, the Arab Spring, or closer to home, some new federal measure designed to cool the market.

The surge is listings is seasonal. And while some will say that there are 20-30% more listings this year in the GTA than normal, this surge has happened over and over and over.

Once, people get used to the new foreign buyers tax or the rent controls rules – all of which will be designed with more holes than swiss cheese – the market will seek new highs in 6-8 months.

This movie is getting so repetitive.

#44 Been Here, Ignore That on 05.15.17 at 7:38 pm

#36 Tulips

e love where we live and often dream of what we would want to do with the place if we owned it. But that’s currently a waste of time as to buy it we would kill our cash flows and we wouldn’t be able to do anything to it anyway. Our annual rent costs less than 2% of the current market value. It’s hard to find the desire to squash our cash flow just to move our name onto the deed and maintenance bills of the home we already live in. Time to stop fretting about the housing inflation and just keep on enjoying life and the people around us where we are, all the while adding new money every year to our growing investment pool. If we keep seeing 6-7% growth while continuing to invest 20% of our take-home income, we’re heading toward a very comfy retirement. And if a time to vultch does really appear we’ll be ready. But we’re no longer waiting for it – that’s proven to be a waste of time.

——–

That must be nice living in the sticks where you have cheap rent with stability. Now, for the rest of us, rents have risen to consume a disproportionate amount of income and rent stability has been replaced with complete instability – through fixed term leases, renovations, 0.5% vacancy rates, and stratospheric house prices pushing the dream of home ownership farther afield.

So while renting has for years consumed less income with some sense of stability, most renters in the GTA and Metro Vancouver face a life of ‘no fixed address’ – as they have to move from one place to the next.

The smugness of renters who were waiting for a crash has been replaced with resigned renters who finally realize they missed the once in a lifetime lottery – and perhaps chance at home ownership.

The largest issue in the BC election was housing affordability – soon to be the biggest one in the upcoming Ontario election

#45 Pete from St. Cesaire on 05.15.17 at 7:38 pm

Everything used to build housing north of Mexico is garbage made to delaminate and fall apart in ten years.
————————————————-
That’s by design. And it’s not a profit-driven scheme, it’s Agenda 21 don’t you know. It will be easy to wipe away these garbage homes when the time comes to re-wild the earth.

#46 Trumpocalypse2017 on 05.15.17 at 7:40 pm

TRUMPOCALYPSE RED ALERT!!!!!!!!!

Breaking News

“This is the most serious charge ever against a sitting US President”

(Alan Dershowitz, conservative legal expert on CNN minutes ago)

Trump has revealed anti-terrorism secrets to the Russians.

Experts say this could result in changes to travel overnight, such as banning of all laptops.

Terrorist attacks in planning will now be thrust into action.

GOP insiders, friends of Trump, say the Whitehouse is in a “downward spiral”

http://www.cnn.com/

Trump will be looking for global military distractions within days, if not hours.

EXPECT WAR AND GLOBAL CHAOS!!!!!

PREPARE NOW!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

#47 Millennial-falcon on 05.15.17 at 7:40 pm

No comments on the van market Garth?
Or the lack of listings here after you said 604 was toast ?
No surge in listings or price drops. Condos going nuclear anything other than ultra luxury is moving hot

I thought van was cooked ?

#48 TurnerNation on 05.15.17 at 7:40 pm

I get many realtor flyers in the mail each week. More than anything else. This must mean business is booming…or not.

#49 Nero on 05.15.17 at 7:41 pm

This morning logged on to mls web site for Southern half of BC….28 new listings for the day. 28!
Any remotely decent house under 500K is selling
in hours.
Incredible amount of worn out, decrepit shacks for sale at 100K over assessment.
BC is a disaster….
Pass me my fiddle.

#50 bdwy sktrn on 05.15.17 at 7:43 pm

the supply of duplex units for sale in my hood dropped 50% over the past week.

there were two. now just one overpriced unit that seems to have a seller who is motivated to not sell.

#51 S.Bby on 05.15.17 at 7:45 pm

Meanwhile in BC the Christy Clark free money handout has goosed the condo market to new highs. Her backers are no doubt quite pleased.

#52 WUL on 05.15.17 at 7:47 pm

I tried to find the CREA item on slumping sales but could not. 70% of which markets? Link, friends? Thx.

#53 Been Here, Ignore That on 05.15.17 at 7:47 pm

Oh yes, VREU has re-emerged to tell us that the housing collapse in Victoria is just around the corner – as she did a year ago!

Those supposed ‘plunging’ sales in Victoria in Winter and the early Spring were going to translate in price decreases right VREU?

Instead, prices have surged 25% everywhere in Victoria and the south Island. Victoria is the ‘new’ luxury home capital. Someone pointed out earlier that foreign buyers have increase seven fold. The wealth – tons of sports cars and luxury cars now in a blue collar town – only materialized in the last two years. Pretty much since you started your predictions.

Apparently, though, those are all panic buyers before the big crash right?

You remind of Mark who keeps telling everyone for the past several years that prices have not actually gone up since 2013 – that is all about the sales mix.

Yes, VREU, you will be here in a few years still talking about the Victoria bubble and that sales are collapsing, all the while ignoring the new wealth pouring into Victoria.

#54 Steve on 05.15.17 at 7:50 pm

#18

I did sell on April 20th for 160 k over asking. I just hope that they buyer doesn’t back out as closing is not until August 15th. Fingers crossed……

===========

I know a guy who sold a house in the winter that was suppose to close next week. The bank won’t give the buyer financing as they can’t get an appraisal close to what they offered… He asked 700k, they came in with a bully offer at 910k and the bank will only give financing for 830k…. They have been through 3 appraisals and no one will give them what they asked for….

I wonder if this will become a common tail…

#55 SimplyPut7 on 05.15.17 at 7:51 pm

In a few years, it will be interesting to find out what was the real catalyst for the beginning of the slow down.

A lot of homes were built to only cater to speculators, they were not thinking of the person who wanted the home as a primary residence:

(1) Many homes listed for sale are way too big – I don’t know many millennials or gen-X in the market for a 3000+ sq ft home, even if they could afford it – too much garden maintenance, cleaning, shoveling snow would take at least 3 hours even with a snow blower. Long hours at work and long commutes to work, don’t leave much time for caring for a home on top of spending time with family.

(2) I don’t know anyone who seriously wants to own or rent a 400 sq ft condo especially in a slowing housing market. That was just an idea developers sold speculators, to sell more units. But with the number of resale condos of better quality and space in better communities on the market, you’re not going to convince a millennial that living in the 905, near highway 7, in a 400 sq ft condo near absolutely nothing, is a great idea.

(3) There are too many homes built in the middle of nowhere and have no access to major highways or transit. I don’t even know if some of these homes get garbage pick-up and/or mail delivery or a nearby Canada post box. The homeowners would probably have to go in town to pick-up their mail from the post office.

(4) There are just too many condos. Some condos mortgage and maintenance is more than a townhouse or detached house. These speculators are not going to get the rent they need to cover the cost of the unit and make a profit. The box condos with no character, a small wall kitchen and sliding plastic doors for a makeshift bedroom are not going to get half a million dollars from a real homeowner – it might have worked in the housing frenzy, it’s not going to work now.

#56 Been Here, Ignore That on 05.15.17 at 7:51 pm

d what would prevent the govt from rolling out some of those Flaherty measures taken in 2009 (rolled back since). If I recall, there were four in rapid succession, and they prevented a mega bubble burst; when the s$&t hits the fan again, do you really believe the govt will sit back and let it happen?? They did not in 2009. If they have to, they will allow 50 year amortization, I bet; with Justin at the helm, anything goes.

——–

Finally – someone who gets government intervention.

He who giveth can taketh.

Back to zero down 40 years mortgages once the developers and realtors start lobbying – and all those foreign buyer taxes to be eliminated.

We like to privatize gains, but socialize the losses in this country. Expect the same here…

#57 Vit on 05.15.17 at 7:53 pm

You are missing one point here . In US 2008-2009 housing market crash was not because to many homes came for sale . The financial system had a credit crunch , bunks just stop lending money people with jobs could not refinance or take a mortgage …….
Do you see a scenario that canadian banks will stop lending in a near future and people massively loosing their jobs and cant pay mortgages .?? Maybe one day but not in a near future .

#58 VanMan on 05.15.17 at 7:53 pm

As Garth says, all RE is local… and Vancouver really is special. For those of us that live here, it’s reality. Accept it and move forward… stop waiting for a crash that will never surface. I can’t believe how many Vancouverites on this blog continue to cling to the hope that their day may come… wake up. It is different here.

#59 SmallTownSteve on 05.15.17 at 7:56 pm

Trumpocalypse2017
Better hide in your underground bunker before it’s too late! Should be come out for air in 8 years. See you then?!

#60 Smartalox on 05.15.17 at 8:13 pm

How does the old saying go?

“Sell in May and go away!”

Time is running out, the competition is getting harder and harder. Better to undercut your neighbours by 10% to get the heck out today, rather than be forced to cut 15% next month. Or more, later in the summer.

Helpful tip: when the humidex is high, it’s much more cost effective to run a de-humidifier to pull moisture out of the air than to run the Air Conditioning full blast if you’re trying to show your house. Oh, and if you don’t have central air, forget about showing your place on the truly sweltering days. And burnt, yellow grass is so unappealing – better to replace it with astro-turf, (or paint it green?) before the watering restrictions kick in come July.

People are asking why Vancouver hasn’t had the same flood of listings that have been seen in the Golden Horseshoe? Well, there’s the issue of mortgage portability: if you’re mortgaged to the hilt, and you sell your home, you have 90 days to find a new home to mortgage, or else you have to pay back the mortgage – and a penalty – to add insult to injury.

Nobody in Vancouver wants to sell, because they’re worried that if they do, they can’t afford to buy another place. Either they’ll pay more, and the extra payments will bury them, or the stock of available homes in a specific price range is so limited that they’ll be forced to buy in the hinterlands.

Vancouverites may remember the demented, desperate pleas of former home owners who had cashed out and then posted sad pictures of their families, holding signs that read “Have $1Million, Need a Home!”

These were people who had sold their homes and were desperate to move their million dollar mortgages to new properties – but either couldn’t afford to purchase again, (which would have added several hundred thousand dollars to their mortgages, and hundreds more onto their monthly payments), or more importantly couldn’t stomach the tens of thousands of dollars (~$50k) in break-fees that would have been required for them to pay off the mortgage ahead of the term.

The other factor is Loan-to-Value: in a falling market, if the bank thinks that the value of the house that you want to buy will fall, relative to the amount of money you still owe on your mortgage, the bank will either hit you up for a greater chunk of equity before you take possession (good-bye profits) or write a new mortgage with higher rates to offset the additional risk. Either way, you pay more, and get less.

The amateurs in the Golden Horseshoe haven’t learned about ANY of this, yet.

Yes, Ontarians: in addition to the closing costs and land transfer taxes (x2), that you’re deducting from your housing lottery winnings, be sure to include several thousands in fees to the banks, if you end up making a bunch of changes to your mortgage when you sell your house.

The only winners in this game are the ones with fully-paid off primary residences, or who are looking to cash out, and have a mortgage at the end of its 5-year term, where you can pay it off without penalty.

If you’ve got more mortgage than equity, you’re playing a rigged game. If you’re trying to move up, you’re going to get screwed. If you’re trying to downsize, you’re going to get screwed.

But if you stay where you are, in a place where you’re hanging on by a shoestring, bleeding equity as the competition blossoms around you, you’re going to have a nasty surprise when your mortgage comes up for renewal.

#61 acdel on 05.15.17 at 8:13 pm

#38 Tony

Some are pumpers but the majority of us are trying to understand what the hell is going on!! What is currently happening is not healthy or normal.

At this point I really could give a shit; if people want to walk down that thin line then all the best to them.

#62 AGuyInVancover on 05.15.17 at 8:23 pm

Like many others, I’m curious as to why Vancouver has gone in the opposite direction from TO. Even at our price peak, there wasn’t a flood of listings.

Only reasons I can think of: 1) Lots of Alberta plates on the streets these days, demand for housing is high 2) many offshore owners feel no pressure to sell and are convinced prices will go up on their investment long term, so are holding for now.

#63 Doug t on 05.15.17 at 8:31 pm

I would like too see a serious reset to the housing market – like 40% – these current prices are ridiculous to say the least. And I would like to see the big banks in this country have more competition because let’s face it they suck – and hey how bout a new political party cause the ones we have they suck – and of course lets toss the RCMP cause well they just suck.

RATM

#64 TurnerNation on 05.15.17 at 8:33 pm

As well…bad news for Smoking man and Long branch: House of lancaster to close.

https://www.reddit.com/r/toronto/comments/6bcqhq/rip_house_of_lancaster/

#65 Smoking Man on 05.15.17 at 8:38 pm

3 month lag and confusion. Then stable prices balanced nothing to get to excited about.

When the herd realize no lotto ticket right now they will remember they have a home.

#66 Built to Spec on 05.15.17 at 8:38 pm

Australian real estate bubble – bigger than ours …

“The Real Estate Crash Coming To A Market Near You”

https://seekingalpha.com/article/4073466-real-estate-crash-coming-market-near

#67 Lmfao on 05.15.17 at 8:50 pm

Garth , you sure you don’t want to freelance for zerohedge?

#68 joblo on 05.15.17 at 8:52 pm

https://www.bloomberg.com/news/videos/2017-05-12/after-home-capital-canada-s-economy-looks-frail-video

And then there is this. Yikes.

#69 Ronaldo on 05.15.17 at 8:54 pm

On a recent visit to Vancouver I did a walkabout in the Mt. Pleasant area between Ontario St and Cambie and 16th and 23rd. This is a 40 square block area. Here is what I discovered.

For Sale – 2
New Builds in progress – 11
Sold – 5
Tearing down – 2

I had expected to see many more For Sale signs than the two in such a vast area but no so. Prices have increased incredibly over the past couple years.

An old place that I am aware of that sold for around $850,000 in 2008 sold last December for $1,800,000 (100,000 below assessment). The lot value alone (2016) on this property was $1,800,000 and the house $100,000.

The previous assessment (2015) was $1,194,000 for the land and $93,000 for the house. That is $606,000 higher land value from previous year or 51% increase. Nothing had been done to it in the time it was owned.

One of the homes currently for sale was a house that had been purchased in Feb., 2015 for $1,575,000 (assessment 2015- $1,741,000 land $1000 house) and house was torn down and new one built.

The new home assessment for 2016 was $3,366,000 with the land at $2,400,000 and home at $966,000. It is now for sale asking $3,489,000. If we deduct the home value of $966,000 you end up with a land value of $2,493,000 for a 33′ lot.

My suspicion is that most of these rebuilds are owned by realtors and speckers and I suspect that many of the homes that appear to be vacant in this area are owned by the same people. Tearing down and rebuilding is a very lucrative business it seems and this is the main reason in my opinion for the increased values in this area. Overly priced boxes and exorbitant assessments.

#70 ww1 on 05.15.17 at 8:54 pm

#15 Cloudy on 05.15.17 at 6:46 pm
How many of these loopholes exist to avoid taxes on selling?

Sigh. How about – none?

Your “friend’s” accountant most likely used the principal residence exemption to reduce the capital gain on the sale of their house to just the appreciation that occurred after they moved out (i.e. during the period the home was rented). No magic here – nothing to see – move along.

#28 SquareNinja on 05.15.17 at 7:04 pm
Should I be worried?! Might Home Trust mortgages be bought by one of the Big Six?

Why are you worrying about something you can do nothing about? Get on with your life … seriously.

#71 The Wet Coast on 05.15.17 at 8:57 pm

I can’t help but notice that the twin brothers, Always and Never are frequent bloggers on this site. They are the proud spawn of their parents Hormones and Emotion. It is rumored they have a distant uncle Data that they don’t really understand, and they are not allowed to see.

#72 Raging Ranter on 05.15.17 at 9:10 pm

You guys claiming Flaherty brought in 0 and 40 mortgages in 2009 to rescue the housing market need a recent history lesson. 0 and 40 mortgages were brought in in 2006, when the market was still strong. They were eliminated in February 2009, right in the middle of the Great Financial Crash, right when the housing market in Canada was at its nadir. So there was no government rescue of the housing market in 2009, at least not in terms of mortgage rules loosening.

There was about 108 billion of mortgages purchased from the banks by the CMHC which gave the banks liquidity to keep lending. There is a chance we could see something similar again in a housing meltdown, but doubt it would be as effective this time. The Big 6 aren’t nearly so eager to increase their exposure to the housing market these days.

#73 Sir James on 05.15.17 at 9:15 pm

SFH Listings in North End Hamilton have gone from 2 old stale listings to about 12 total now in less than 2 weeks. A pair of Brick homes comparable to the vinyl sided home I sold in December for $300K are now listed under $300K. I still think as I predicted April 1 will turn out to have been the peak.

Certainly nice now to be in the fresh air of Welland, mortgage free and cash in the bank and still employed. Thanks for all the moral support Garth!

#74 Peter on 05.15.17 at 9:26 pm

Anyone who thinks Canada housing will crash like the US in the 2008 is very wrong. Canadian housing crash will be MUCH WORSE than the US.

1. Canadian housing bubble lasts longer than the US. US housing bubble is 4 years from 2002 to 2006. Canadian housing bubble is 8 years from 2009 to 2017.

2. Canadian housing bubble is much bigger than the US. US housing price rose 50% nationally from 2002 to 2006; Canadian housing price rose 100% from 2009 to 2017, in Toronto, it is over 150%.

3. Canadian debt load is much larger than US. Canadian debt to GDP ratio has now reached 168% while US only reached 125% before the crash.

4. Canadian mortgage debts are held ONLY BY CANADIAN INVESTORS while US mortgage debts are held all over the world. So the hit to Canadian financial institutions will be much larger.

5. Canadian mortgages are insured by the government; US mortgages are insured by private companies (private companies can get their shareholders’ equity wiped out first, forming a first line of defence).

anyone to add more?

#75 Brian Ripley on 05.15.17 at 9:29 pm

Does anyone know why Vancouver still has yet to see an uptick in new listings? Sam #11

My Listings chart, 2nd chart on this page http://www.chpc.biz/sales-listings.html

…does a show a bottom forming. The data are total listings per month (not new listings added) and have been rising since the beginning of the year:

Jan -17 = 7,238
Feb -17 = 7,594
Mar -17 = 7,586
Apr -17 = 7,813

#76 When Will They Raise Rates? on 05.15.17 at 9:31 pm

#44 Been Here, Ignore That on 05.15.17 at 7:38 pm

That must be nice living in the sticks where you have cheap rent with stability. Now, for the rest of us, rents have risen to consume a disproportionate amount of income and rent stability has been replaced with complete instability – through fixed term leases, renovations, 0.5% vacancy rates, and stratospheric house prices pushing the dream of home ownership farther afield.

So while renting has for years consumed less income with some sense of stability, most renters in the GTA and Metro Vancouver face a life of ‘no fixed address’ – as they have to move from one place to the next.

The smugness of renters who were waiting for a crash has been replaced with resigned renters who finally realize they missed the once in a lifetime lottery – and perhaps chance at home ownership.

The largest issue in the BC election was housing affordability – soon to be the biggest one in the upcoming Ontario election
—————————–

^ It’s people like this that bring a Cheshire cat grin to my face when I contemplate a housing market meltdown. I sincerely hope these smug A-holes get absolutely crushed and lose EVERYTHING.

#77 WUL on 05.15.17 at 9:35 pm

Uptick in Alberta foreclosures and in Calgary in particular. Can’t paste the link for some reason. CBC Calgary. Lots of mutterings of Order Nisi and “equity of redemption” in the halls of Queen’s Bench, I suppose.

#78 Chris Birchcliff Scarborough on 05.15.17 at 9:37 pm

Hi Garth,

Wondering if you think a “Like” button for the comments section will be an idea ??

Don’t like it. — Garth

#79 The Wet Coast on 05.15.17 at 9:39 pm

There are 2500 listings on Craigs list for rental homes in the GVRD. Many of the homes were for sale a few months back.

#80 Peter on 05.15.17 at 9:42 pm

The reason that Vancouver new listing is not growing is because house flippers in Van are seeing their big brother Toronto is doing fine in the Spring. The bubble was raging on in Toronto. That emboldens the house flippers in Van.

Once Toronto new listing rises through the roof and prices crash, the Vancouver new listing will zoom to sky.

#81 When Will They Raise Rates? on 05.15.17 at 9:48 pm

Ignore previous post. I misread BHIT’s post.

#82 Smoking Man on 05.15.17 at 9:51 pm

I’m about to unleash smoking man on the real world of linkedin.

My real name is Jim Stojsin.

Dogs . Connect for some great self destruction and a re birth doing what I love. Pumping out truth with one thumb.. Garth stop protecting me. They don’t want me anymore.

The machine don’t like old fks with a brain.

It’s time for revenge.

#83 cramar on 05.15.17 at 9:53 pm

56 akashic record on 05.14.17 at 10:06 pm

#43 Smoking Man on 05.14.17 at 9:07 pm

Dogs Garth loved having us. Don’t be afraid to visit. He’s a good shit.

====

If only the machine hadn’t turn him so liberal… What’s next, free ice cream and dog treats?

As if switching from Harley to Honda wasn’t enough of a horror… If it goes like this, he might even lose his cowboy boots.

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

Oh dear! Garth is getting so sacrilegious in his maturing years. If he went from Harley to Honda, what’s next? Will we find out in future that he is driving a Kia?

#84 WUL on 05.15.17 at 10:01 pm

Mastered it. The link to the item of black hatted bankers on the porch to turf widows and orphans onto the Mean Streets of Cowtown.

http://www.cbc.ca/news/canada/calgary/foreclosures-alberta-calgary-rising-2017-1.4108646

Go Sens.

#85 Sir James on 05.15.17 at 10:02 pm

Welcome to the Future.

zerohedge.com/news/2017-05-15/vancouver-house-sale-only-2099-bitcoin

#86 mike from mtl on 05.15.17 at 10:05 pm

#35 Spence on 05.15.17 at 7:15 pm
If “a recession seems the obvious next phase”, why not cash out of the Canadian portfolio completely? Shouldn’t you be advising clients to invest their portfolios 100% outside of Canada?

Of course not. — Garth

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

Very true. However like Garth I’ve taken steps to minimise exposure to Can of late. DON’T ever hedge on poloz peso. It may regain sometime in 2020-25 but in the near future, the trend is clear.

Selling wood and rocks to the Americans and flipping houses to each other is not what I’d first think of in a diversified ‘real’ economy. Somehow Australia gets away with this but we don’t get that free pass.

Even at my 17% I still am slightly uncomfortable, wishing a ‘housing crash’ would being all sorts of (short term) here to any Ca$ Equity, REIT or Pref. Banks and RE take the lion’s share of Canadian GDP so use common sense.

#87 Original dave on 05.15.17 at 10:08 pm

My only concern with all this is the currency and what the bottom is when all this plays out (maybe already in progress but most definitely by spring 2018. I dont trust this government as far as I can spit

#88 Ronaldo on 05.15.17 at 10:11 pm

Now here is an interesting one just sold (over ask) with asking price of $2,798,000. This house was purchased Oct. 3/16 for $2,520,000. The July 1, 2016 assessment was $3,211,000. Previous year assessment $2,336,900.

What gives? My bet is a realtor bought and flipped it.

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

http://robbritch.com/mylistings.html/details-60120903

#89 Capt. Serious on 05.15.17 at 10:14 pm

Thank god I work for a multinational that has an insignificant portion of its global sales in Canada.

#90 dr. talc on 05.15.17 at 10:15 pm

This broker apparently photoshops T4’s. Hows that for sub-prime? I politely declined and am currently priced out of my city. Double income professionals here.


While you take the high road, the low road was very crowded a decade ago, with cab drivers and waiters right off the boat, with letters of employment from pizzerias claiming 100k income. That was a long time ago, they paid down their loans diligently and are today financially covered in roses. It must annoy the high minded losers to no end

#91 Myra Andrews on 05.15.17 at 10:21 pm

PaulB, a Vancouver realtor, posted these numbers for Vancouver today

New 331
Price Change 59
Sold 130
TI: 8759 (total inventory)

clivestevepaul.com

#92 InvestorsFriend on 05.15.17 at 10:21 pm

Are Mortgage Delinquency Figures Trustworthy?

CBC reports that 5,746 properties in Alberta were foreclosed on last year. Up more than 50% in two years. This makes perfect sense.

http://www.cbc.ca/news/canada/calgary/foreclosures-alberta-calgary-rising-2017-1.4108646

But they note that As of February, there were 2,736 mortgages in arrears in Alberta, representing 0.47 per cent of total mortgages in the province.

The arrears they quote are 90 days in arrears and I have watched these closely since back in 2008 or so. They barely budged with the Alberta recession.

Are we to believe that only 2,736 are at least 90 days late when there were 5,746 actually foreclosed on last year?

Well, maybe since the 2,736 is the number 90 days late at a point in time while the 5,746 is for the full year. And maybe a lot of the foreclosures are no reported by the Canadian Bankers Association (which presumably excludes credit unions and some other lenders).

Still, I think the banks are under-reporting the delinquencies since they allow people to skip payments and take payments holidays. If I owe monthly payments to you and I beg poverty and you grant me 4 months of no payments (to be added to principal) am I not still delinquent in substance?

I would not be at all surprised to see it come out at some point that the banks are under-reporting delinquencies. Banks attract the attention of regulators if their delinquencies go up. They have every incentive to try to find ways to avoid classifying loans as delinquent.

#93 Happy Housing Crash Everyone! on 05.15.17 at 10:24 pm

#90 dr. talc on

This is why prices will not be sticky. People with no money or little oncome barely hanging on are now looking for the exit. Only problem is fraudulent mortgages are now hard to get and no one is stupid to catch this sharp falling knife. Going to be a blood bath on the way down. Btw you sound angry. You must be close to going bust. Happy Housing Crash Everyone! :-)

#94 Star Dust on 05.15.17 at 10:28 pm

#82 Smoking Man on 05.15.17 at 9:51 pm

I’m about to unleash smoking man on the real world of linkedin.

My real name is Jim Stojsin.

Dogs . Connect for some great self destruction and a re birth doing what I love. Pumping out truth with one thumb.. Garth stop protecting me. They don’t want me anymore.

The machine don’t like old fks with a brain.

It’s time for revenge.
..
The machine couldn’t give a crap

#95 akashic record on 05.15.17 at 10:30 pm

#80 Smoking Man on 05.15.17 at 9:51 pm

I’m about to unleash smoking man on the real world of linkedin.

My real name is Jim Stojsin.

====

Of course… It was on the record, Jim.

#120 Jim Stojsin on 09.21.16 at 11:31 am

But we turned our head away.

Wanted to make it easier for you to stay in character.

We love fiction, Smoking Man.

#96 TRT on 05.15.17 at 10:33 pm

Buy in this slowdown in toronto.

It is a lull. Temp immigrations inflows are at record levels.

Vancouver prices going thru the stratosphere!!! Listings at all time low.

416 average detached price over $2.5 million within 3 years. Watch and see.

#97 Neo on 05.15.17 at 10:36 pm

#54 Steve on 05.15.17 at 7:50 pm
#18

I did sell on April 20th for 160 k over asking. I just hope that they buyer doesn’t back out as closing is not until August 15th. Fingers crossed……

===========

I know a guy who sold a house in the winter that was suppose to close next week. The bank won’t give the buyer financing as they can’t get an appraisal close to what they offered… He asked 700k, they came in with a bully offer at 910k and the bank will only give financing for 830k…. They have been through 3 appraisals and no one will give them what they asked for….

I wonder if this will become a common tail…

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

Actually, what I was told is that alt lenders like HCG were providing that extra $100,000 to $200,000 to fill this gap and keep the market goosed. Credit is harder to come by now for obvious reasons.

#98 Foreign Capital in the Crosshairs on 05.15.17 at 10:42 pm

#23 – Rook

“Now when will people start taking seriously the voices calling for change around speculation from foreign money. Capital flight from China is not a secret but a global phenomenon.”

———-

In BC, both the NDP and the Green Party target speculation by foreigners. The Greens are the only ones who have the full understanding of their impact of foreign capital – they will double the foreign buyers tax, close the loopholes, and extend it to the whole province so you don’t get the domino effect of capital fleeing to non-tax areas in BC.

The NDP will apply a speculators tax and apply it retroactively until the owner verifies that they are actually paying income tax. Oh, and they will kill the pre-sale condo loophole in the foreign buyers tax that has fuelled the massive rise in condos and townhouses in Vancouver (you know, the market that was supposed to collapses lol).

The masses spoke quite loudly and two of the three parties were willing to listen and take meaningful action.

For those hoping for a housing crash, you better hope the Greens and NDP form a majority after the recounts and absent ballots are all counted next week!

#99 acdel on 05.15.17 at 10:44 pm

#82 Smoking Man

What is your occupation/location under LinkedIn?

As you know; this is on how one connects under this system.

#100 AGuyInVancouver on 05.15.17 at 10:44 pm

#88 Ronaldo That’s an area I know well. That house now has a billboard promoting the opportunity to enjoy a spec builder’s McMansion rather than the solid existing character home. Ten years ago someone middle class could have bought that and have enlarged the gables and got a great Cape Cod-ish heritage home, now its developer fodder.

The real question is who can afford to buy those $3 million dollar homes on 33′ or 45′ lots? Not Vancouverites.

#101 Star Dust on 05.15.17 at 10:52 pm

#97 acdel on 05.15.17 at 10:44 pm

#82 Smoking Man

What is your occupation/location under LinkedIn?

As you know; this is on how one connects under this system.
..
He’s in charge of engineering development at dehavilland… LMAO

#102 ww1 on 05.15.17 at 10:59 pm

#99 acdel on 05.15.17 at 10:44 pm
#82 Smoking Man
What is your occupation/location under LinkedIn?
As you know; this is on how one connects under this system.

Take your pick :
jim.stojsin on linkedin
or
jim.stojsin on facebook

#103 hammer time on 05.15.17 at 11:09 pm

73 Sir James on 05.15.17 at 9:15 pm
SFH Listings in North End Hamilton have gone from 2 old stale listings to about 12 total now in less than 2 weeks. A pair of Brick homes comparable to the vinyl sided home I sold in December for $300K are now listed under $300K. I still think as I predicted April 1 will turn out to have been the peak.

Certainly nice now to be in the fresh air of Welland, mortgage free and cash in the bank and still employed. Thanks for all the moral support Garth!

—————-
I receive a copy of all the solds in Hamilton. everything is selling over list. from 50-200k. as of last week I haven’t seen the new listings holding back offers though. Hamilton is still on fire

#104 45north on 05.15.17 at 11:09 pm

Well, all that anecdotal evidence here – the stories of jilted and unrequited sellers – now has some statistical support. The numbers are early, but decisive. This baby’s going down.

If you say that March numbers were where they should have been then April was 25% down. May numbers will be worse – there’ll be panic in the streets.

#105 DON on 05.15.17 at 11:11 pm

#100 AGuyInVancouver on 05.15.17 at 10:44 pm

#88 Ronaldo That’s an area I know well. That house now has a billboard promoting the opportunity to enjoy a spec builder’s McMansion rather than the solid existing character home. Ten years ago someone middle class could have bought that and have enlarged the gables and got a great Cape Cod-ish heritage home, now its developer fodder.

The real question is who can afford to buy those $3 million dollar homes on 33′ or 45′ lots? Not Vancouverites.
************************

The question no realtor or house pumper can answer. Who will buy if prices continue to rise year over year. At a certain point things change and sentiment changes. Already the mere thought of mortgage fraud, in appropriate lending and affordability will weigh on the possible. Alberta home delinquencies rising, loss of jobs already a problem in many areas through out Canada. BC is making part time jobs – nothing really to live on. As Garth has stated the anecdotal observations are now becoming stats. Not everyone can see the warning signs, most are purposefully putting their heads in the sand. China is having their own problems. And once again…if the US the largest economy in the world with the biggest military was unable to stop it’s housing bubble from bursting, but the Canadian government will??? Maybe if you say “Pretty Please” the government will bail you out. Change happens slowly and if you are not looking you will never see it…until it is too too too late. Heed Garth’s advice. Sell!

#106 Cloudy on 05.15.17 at 11:11 pm

#41 Ronaldo on 05.15.17 at 7:27 pm

I have seen the info on that. This was a unit the owner lived in for a number of years, moved to another location and rented the unit out for a number of years then sold it as a principal residence.

#70 ww1 on 05.15.17 at 8:54 pm

Sigh. I guess you didn’t read my post. There was never any capital gain claimed or taxes paid on sale (or was any previous official change of status claimed to my knowledge). Was sold entirely as a principle resident. Used a knowledgeable accountant that doesn’t cheat. I remember something having to apply for an extension of principal residency and also I vaguely remember if it had been rented out for over 5 years it would not have qualified.

#107 Puzni on 05.15.17 at 11:13 pm

” Figures lie and lairs figure it out ” Not realestae board is going to report ” true ” picture hence so many conflicting stories , about the sales and listings. No board wants to attract any more attention, sort of speak you ” you don’t bite the hand that feeds you”. Dealerships are getting bigger and fancier in Vancouver. No line up of realtors returning their Audis. It might have taken a year to return to normal after the foreign tax introduction but things are were they were. Also Garth no longer comments on “Frankerbugers ” numbers!

#108 acdel on 05.15.17 at 11:14 pm

For those of you interested in Alberta politics; actually this affects us all; including the haters, (why not it’s a democracy, well sort of) what are your thoughts on this?

http://business.financialpost.com/fp-comment/kevin-libin-tension-keeps-rising-over-albertas-heritage-fund-after-another-ambush-of-political-tampering-from-notleys-ndp

#109 Mark Baum on 05.15.17 at 11:14 pm

Looks like Equitable Bank is offering 2.3% on savings accounts: https://www.eqbank.ca/personal-banking/features-rates

Did you not learn your lesson with Home Trust? — Garth

#110 acdel on 05.15.17 at 11:15 pm

#102 ww1

Thanks.

#111 Cici on 05.15.17 at 11:21 pm

#37 Stone

Most likely a reference to Victoria’s Secret…or maybe La Senza.

#112 Ham I am (not) on 05.15.17 at 11:32 pm

Van has no HAM!
Has no HAM, has Van!
T.O has Brad Lamb and no need for the HAM!
Oh what a sham!

#113 acdel on 05.15.17 at 11:33 pm

Last post for this evening; actually I am one of those that needs a break from all this. Nothing nowadays is normal, stay alert dogs.

http://investmentwatchblog.com/insider-housing-market-is-literally-the-exact-same-as-before-the-2007-2008-crash/

#114 Tony on 05.15.17 at 11:33 pm

Re: #14 The listener on 05.15.17 at 6:45 pm

I’ll never forget what the last real estate crash did to the city of Georgetown. All that was left of that city was gas stations and a few pool halls. I remember the population mix went from half and half to homogeneous. I never lived there but saw the city before and after the real estate crash.

#115 Stan Broock on 05.15.17 at 11:39 pm

#128 Stan Broock on 05.15.17 at 3:15 pm
CMHC CEO Evan Siddall actually said:

1. Resilience in the system is due to the bail in legislation that we introduced to ensure no run on the banks occur.

2. We don’t know what the next crises is going to be

Wow!

If he said that, we’re all in worse shape than thought. Link? — Garth

————————-

Here it is (video with Amanda L.)

http://www.cbc.ca/player/play/2652218672

#116 Stan Broock on 05.15.17 at 11:42 pm

http://www.cbc.ca/player/play/2652218672

It starts at 04.45

#117 Tony on 05.15.17 at 11:44 pm

Re: #98 Foreign Capital in the Crosshairs on 05.15.17 at 10:42 pm

The real problem is one foreigner buying the entire new condo or townhouse offering. That’s what recently happened in Stouffville with a townhouse (new complex to be built) offering near the 9th line and the Main Street. That was about 9 months ago.

Prove it. — Garth

#118 Tony on 05.15.17 at 11:54 pm

Re: #92 InvestorsFriend on 05.15.17 at 10:21 pm

Their unemployment insurance has run out in Calgary. The condo and townhouse market is in a complete free-fall the past 6 months. Many are trying to rent out the basement of their homes but there are no renters. Alberta home prices are anything but sticky on the down-side.

#119 will on 05.15.17 at 11:55 pm

And all this happening in “rutting season”. Ha! Maybe we are finally seeing it all coming down. Been waiting a long time. BTW, received a ton of dividends today. I like that. Hahahahahahahaha! Sorry GTA, I really can’t give a s**t about your anxiety now.

#120 Long-Time Lurker on 05.15.17 at 11:55 pm

#28 SquareNinja on 05.15.17 at 7:04 pm
Since my mortgage is at Home Trust, subsidiary of Home Capital… do I need to be worried? My original LTV was 65% in early 2015 and at today’s prices, more like 40% LTV. The thing is, combined household income is very low (+ consumer debt) gives us a TDSR that a conventional bank would not accept.

Should I be worried?! Might Home Trust mortgages be bought by one of the Big Six?

Thoughts? Appreciated!!!

Subprime SquareNinja

You should be worried about being able to continue paying off your mortgage. Any increase in interest rates means you’re going to be in trouble. Any difficulty in your personal circumstances may mean that you can’t pay off your mortgage. If you don’t think you can handle a more difficult future, you should sell and rent.

Whatever happens to Home Trust, your mortgage is going to be owned by someone and you have to pay it or lose the property.

Have you been reading any of Garth’s posts?

#121 will on 05.16.17 at 12:08 am

#104 cici

“or maybe La Senza.”

That’s been a while. La Senza was a good investment about 10 years ago. Think it got bought out. Thanks for the reminder.

#122 Thank you Garth on 05.16.17 at 12:18 am

Saw this coming quite a long time ago, warning friends last fall about the inevitability of what is to come right about now until September.

I read you concur that the “R” word cannot be far behind.

What worries me as the market naturally unfolds and with it about 40% of Canadian GDP, what will happen if we get even more “not made in Canada” economic news that further shocks our economy.

I believe it will get a lot worse than any of us can fathom, a lot worse.

Economic uncertainty from South of the border will spill over (e.g., trade tariffs, BAT, sacrificial lamb Canada so Trump can bring N. US states to heel with his agenda, etc.).

There will be no soft RE price landing if we receive an economic shock from S. of the border and that has already started (e.g., Lighthizer confirmed and urged by US Senate to “get tough on Canada”). Nice.

#123 Cloudy on 05.16.17 at 12:21 am

#70 ww1 on 05.15.17 at 8:54 pm

Found it: http://realestatetaxtips.ca/the-little-known-4-year-extension-on-principal-residence-exemption-after-you-move-out/

So it was four years and I guess there is some technicalities. He or she moved in with a significant other, so since he/she did not purchase a home, but must have been paying rent to their significant other (or maybe roommate), was able to claim it as a principal residence.

Loophole? Maybe, maybe not. Pays to have a good accountant. Not to far off of magic either. WW1, you seemed so confident in your answer too.

#124 april on 05.16.17 at 12:26 am

According to Ross Kay, Vancouver housing has lost $100.000 in the first 3 months of 2017. Go to their website where it is posted but not mentioned on MSN. Wouldn’t you know it. Also a “myth” that Van condos are selling like hot cakes. We don’t hear about the many listing that didn’t sell or have expired.

#125 For those about to flop... on 05.16.17 at 12:30 am

Attention IHTCD9…

Hey Trackie,do you remember this listing we had a laugh about a few months back?

We laughed at the realtors hapless attempt to market it ,and I think we nicknamed it the garden shed.

Well,the final chapter is that someone swooped in during the quite season and got a relatively good deal all things considered.

Roughly 250k less than assessment ,not far from Hipsterville with the option to build new and command over 2m.

Either that or just keep it “as is” for all the locals to store their gardening tools in…

M42BC

465 18TH AVE E VANCOUVER
https://evaluebc.bcassessment.ca/Property.aspx?_oa=QTAwMDAwMjNRVg==

#126 yorkville renter on 05.16.17 at 12:40 am

#44 – WTF are you talking about? You can guess where I rent, and my monthly nut is about 30% of affer-tax income, and that’s with a 40% drop in my salary (I started a business in Jan and pay myself a pittance).

This meme that rents are outrageous is not based in reality… people simply fall for it and accept it because theyre too lazy to look around other neighbourhoods.

sad.

#127 ww1 on 05.16.17 at 12:41 am

#106 Cloudy

Read ronaldo’s linked article. It describes your exact situation exactly as you described. And the limitations if your buddy’s accountant did in fact not cheat.

Less than five years.
No CCA claims.
No other principal residence declared.

Like I said, nothing to see here – no magic tax holiday.

#128 yorkville renter on 05.16.17 at 1:04 am

by the way, who else thinks today’s (yesterday’s) headline in the G&M is a little disingenuous when they say HCG deposits have “stabilized”??!?!!!

they dropped almost 95%, barely anything remains, and that’s considered stabilizing? Not many percentage points left to 0… I’m sure what’s left is for gamblers and people asleep at the switch

#129 Looney Baloney on 05.16.17 at 1:11 am

@SquareNinja
Nothing to worry about mate. Your LTV will probably be down to 30% by this time next year, and this blog will rinse and repeat a similar story of ‘systemic risk’.

Speaking of systemic risk, let’s look at some facts:
– The only thing currently propping up the Canadian economy is the ultra low loonie.
– If poloz raises rates, the loonie will strengthen and the economy will tank. No one likes blood on their hands, ergo, the loonie will continue sinking into the foreseeable future.
– low rates means high house prices, as this blog has stated several times. You can either live your life now and forget this nonsense of prices tanking, or sell and rent, live like a hobo and squirrel up some savings so your grandkids can finally afford a house some time in the next century.
– there are thousands waiting on the sidelines, with good credit and a hefty downpayment who will snap up these new listings at the first hint of a discount. And then there’s hundreds of thousands more who will be coming to this country, primarily to Toronto, next year, and every following year.
– eventually, we’ll have enough skilled immigrants who will uplift the economy enough for wages to catch up with prices.

You are privileged to own your own home. Think of the losers on this blog, and millions in this country who would kill to have bought when you did. Forget this nonsense of crashing house prices, it is about as likely as a stock market correction or a big six bank failure. Our gracious host can tell you all about that. Basically, it is a mathematical impossibility as long as borrowing money is cheaper than the yeild on these assets, and that includes houses.

Sure, there may be a correction some day, but you and I will have lived a full life by then, and probably long gone. Then it ain’t our problem anyways, and someone probably would have come up with a smart solution to our current financial predicaments by then, so party on! As our host would say, go hug your dog and your wife, though not necessarily in that order.

#130 Mark Baum on 05.16.17 at 1:19 am

Looks like Equitable Bank is offering 2.3% on savings accounts: https://www.eqbank.ca/personal-banking/features-rates

Did you not learn your lesson with Home Trust? — Garth

******

Looks like they are trying to prevent a bank run (/attract new capital) was my implication. It was not advice to deposit – at least not more than $100k, that’s for sure ;).

#131 For those about to flop... on 05.16.17 at 1:24 am

Hey Broadway,I see this lemon is still for sale after 123 days down in your hood.

I see on the sign they secured the services of the delightfully name realtor Paula Blamey.

Her punchline is… Your house isn’t selling because it’s a heap of overpriced poop, don’t Blamey…

M42BC

https://www.zolo.ca/vancouver-real-estate/0-stainsbury-avenue/2031

#132 Accepting Bitcoin on 05.16.17 at 1:49 am

http://www.zerohedge.com/news/2017-05-15/vancouver-house-sale-only-2099-bitcoin

#133 Dream On on 05.16.17 at 1:55 am

#53 Been Here, Ignore that

It is incredibly obvious that you are a realtor so why don’t you sign in as that. Your “facts” are obviously total lies and typical realtor hype. The best part of the upcoming massive correction in Victoria is that we will no longer have to listen to endless “realtor lies”!!

#134 bdwy sktrn on 05.16.17 at 2:05 am

wow, just took a look and i’m blown away.
it’s on fire around here like the good old days.
sales in the past couple weeks;

1741 E 2ND AVENUE ask $2,150 sell2,350
200k over ask -BOOM

2156 E 2ND AVENUE a$2,099 sell$2,435
335k (one third of a million!) over ask – BOOM

1977 E 2ND AVENUE a$1,98 sell$1,88
it’s a junker for nearly 2m – BOOM (this was sub 1m in 2013)

3x junkers on 1st ave all sold fast near 1.4m – on 1st ave freeway.

ALL DOM under 7.

those 2.4 m houses i know well. my friend sold his in 2012 for 1.1m.
in 2012 so many here were calling for 50% drop in 604, few listened when i said van was golden. still is.

toronto hits foreign buyers and van explodes a month late, coincidence????

another from may (although the dom was high , 14)
2122 PARKER STREET1,99 sell2,18

another just sold dom8
1820 E 4TH 2,09 sell$2,17

just outside the hottest zone gets lower prices, only 100% of ask with dom11
228x ADANAC ST $1,648$1,648

i never though things would take off again so quickly.

#135 bdwy sktrn on 05.16.17 at 2:19 am

since may01, everything is going over ask, even this duplex way to close to 1st ave noise.

2108 E 2ND AVENUE $1,2 sell 1,36

160,000 over ask for a DUPLEX. dom 7.

just like old times.

#136 bdwy sktrn on 05.16.17 at 2:20 am

2013 price on that duplex was 750.

identical unit up 90% since 2013.

mark is on crack.

#137 bdwy sktrn on 05.16.17 at 2:33 am

just for entropy mark

early 2015 lot value was 1m in this hood, quite a few sold at this level.

lowest so far this year 1.45m

today there are 2 for sale at 1.99 and one at 1.5

#138 Dan.t on 05.16.17 at 2:36 am

It’s funny and like I said yesterday. Canada is religion and Canadians are the most house horny on the planet- especially when you can buy it with free money!

Comments here, oh, can’t wait for prices to come down, then I’m gonna vultch and buy like 9 places….bla bla..

That is why prices are sticky. No Canadian anywhere would ever dream of selling for a bit of a loss unless all credit cards are maxed out, line of credit exhausted, the new BMW is repossessed and all family and friend loans are over.

That can go on still for a long time because banks have no skin in the game and it’s rigged to keep this ponzi scheme going for as long as possible.

It is pure sacrilege not to make money on real estate.

Here is a secret, outside of Canada no one talks about real estate. Only when I phone friends and family in Canada does the topic come up…usually within the first 10 minutes but often, sooner (almost always sooner).

And always a smugness, oh, well the place just down the road are up 100+k, and Ted and Sally (or whoever) just sold and only got 200k more (the horror), and are now buying bla bla….

Ultimate fail in Canada is first not having real estate, being a renter, and then actually losing money on real estate because that just doesn’t happen.

Nothing will change. Fundamentals don’t apply when you are dealing with religious fanatics who worship housing above all else.

Every policy and government action to date has been to keep it a float and even though it is not sustainable, it can go on a long time and when it really turns sour….

there will be a bail out when it comes crashing down. Average Canadian won’t see the bail out because apparently 60% don’t know how interest rates affect anything. It’ll be a sneaky bailout just like banks now giving savers zip or devaluing the dollar to 40 cents, and hyper inflating the way out of debt.

But it’ll be all good as long as every Canadian has at least 2 houses, oh, and an “investment” condo, that is important.

#139 bdwy sktrn on 05.16.17 at 2:54 am

here’s one for vreu;
http://www.cbc.ca/news/canada/british-columbia/housing-inventory-low-1.4115251

generally, a sales to active listings ratio of greater than 20 per cent is considered to be a “seller’s market.”

that number is above 20 per cent in every region of the province except the Northern and Kootenay regions.

In Greater Vancouver, that number is 42.9 per cent. In the Fraser Valley, it’s 57.6 per cent.

The most seller-friendly region in the province is Victoria, where the ratio of sales to active listings is 70.9 per cent.

#140 Ontario's Left Coast on 05.16.17 at 5:56 am

Today on Huffpo Canada:

http://www.huffingtonpost.ca/2017/05/15/toronto-housing-bubble-4-signs_n_16623368.html?utm_hp_ref=canada

#141 Even More of Trump's Idiocy on 05.16.17 at 6:04 am

There are no limits to Trump’s idiocy.

http://www.economist.com/Trumptranscript

https://www.washingtonpost.com/world/national-security/trump-revealed-highly-classified-information-to-russian-foreign-minister-and-ambassador/2017/05/15/530c172a-3960-11e7-9e48-c4f199710b69_story.html?utm_term=.eac91a418100

#142 Smoking Man on 05.16.17 at 6:26 am

Jesus, I can’t belive I just published my real name. Don’t drink kids is all I’m saying.

Talk about being naked for all to see. I’m trying to find a logical reason why I would do something so stupid insuring I can never go back to that old world.

3 good book reviews and book sales taking off must have had something to do with it.

Im frightened and excited at the ssme time.
Adventure dogs.

Read the book reviews. Thank you

https://www.amazon.ca/gp/aw/cr/B01MXKNY5N/ref=mw_dp_cr

#143 Victor V on 05.16.17 at 6:54 am

‘The worst scenario’: What if Canada’s real estate bubble bursts? A repeat of Toronto’s 1989 crash could have devastating effects on the entire economy

http://www.cbc.ca/beta/news/business/peter-armstrong-housing-bubble-crash-1.4115628

#144 maxx on 05.16.17 at 7:51 am

“Hug your employer and offer to work late.”

Definitely.

“Pray for your brother-in-law drywaller with the three condos and a new Mercedes CLA.”

No chance. Won’t feel “sad” for dopes who dove into the deep end of debt with alacrity.

What idiotic central bank/government policy will materialize next?
More indirect taxation of savings and investments to pay for these insane, self-inflicted financial wounds?

Central banks, government, FIRE as well as stunned pecker, misguided borrowers created this mess and are now in the process of working on impoverishing some of the few segments of national wealth generation left in society: Savers and investors.

Oh, and retail. Retail is a great and accurate litmus test of consumer sentiment and it’s currently in pain. Lots of it. Especially department stores. Second-hand shops, on the other hand, are boiling with activity. Acura, new Jeeps, BMW all lined up in front. I can only imagine the torrent of tax avoided via the use of these “off the grid” purchase points. I see three major reasons: people with dough wanting to preserve and/or increase their savings rates, people with less who want to make it to the next pay-cheque and people who need to scratch and claw their way out of debt.

TPTB created this mess and now believe that holding and/or cutting rates, along with other wealth-suppressing measures will save the day.

They won’t. They’ll simply waste a lot more time and drive the national economy further into the ground.

Perhaps helicoptered elites peppering the landscape, shaking hands and voicing sympathy for those drowning in debt will be the ultimate result.

#145 jess on 05.16.17 at 7:56 am

Why didn’t the Fed act?

vit
The financial system had a credit crunch
———-
http://fcic-static.law.stanford.edu/cdn_media/fcic-reports/fcic_final_report_conclusions.pdf

#146 DW on 05.16.17 at 8:21 am

As per Ross Kay – average BC properties down 9.2% 2017 Jan – April compared to 2016 Jan – April. This is coming from BCREA official news release. Look at Page 3.

Look at GVA, down almost $100k average so far.

Link: http://www.bcrea.bc.ca/docs/news-2017/2017-04.pdf

#147 DW on 05.16.17 at 8:22 am

Saw this on reddit:

“My parents were telling me about today’s front page article in the Chinese “Sing Tao” newspaper.
Headline of the article is that buyers are backing out of deals as they are not able to sell their old residence due to no offers.

In the content, article says the recent policies introduced by the Liberals are having a cooling effect, some areas down as much as 10% in terms of price.

Just wanted to share multiple perspectives. My parents have always been pro real estate, and they flagged this article asking me if it’s time to sell and cash in.

Link: http://toronto.singtao.ca/1743415/2017-05-14/post-%E4%BD%8E%E5%83%B9%E6%94%BE%E7%9B%A4%E8%88%8A%E5%B1%85%E7%9B%BC%E5%BC%95%E7%AB%B6%E5%83%B9%E6%88%B0-%E7%84%A1%E4%BA%BA%E5%95%8F%E6%B4%A5-%E6%9C%AC%E5%9C%B0%E6%A5%AD%E4%B8%BB%E3%80%8C%E4%B8%AD/?variant=zh-hk

#148 the Jaguar on 05.16.17 at 8:29 am

‘Stojsin’. Origin-Serbia. I knew I wasn’t that far off when I called him a character out of ‘Eastern Promises’.
When war breaks out again in Kosovo there will be JD infused reflections on it all….
Garth, what do you think about leasehold land purchases? If real estate is over valued, then why not cut out an expensive component, i.e. the land?

#149 jess on 05.16.17 at 8:30 am

Eukaryotes?

dutch documentary: sat(t)er connection?
simile : Whitey Bulger ?

An attorney, Fred Oberlander, who has brought a lawsuit in New York that resulted in unsealing many of the government’s secret documents pertaining to Sater’s criminal past…

“Anybody running a business through a pattern of crime is guilty of racketeering. Anybody knowing what they’re doing and helping him is guilty of racketeering conspiracy. They go to jail. And anybody injured by what they did can sue for triple damages.”

https://zembla.vara.nl/dossier/uitzending/the-dubious-friends-of-donald-trump-the-russians

#150 Who luvs ya on 05.16.17 at 8:35 am

#142 Smoking Man on 05.16.17 at 6:26 am

Jesus, I can’t belive I just published my real name. Don’t drink kids is all I’m saying.

Talk about being naked for all to see. I’m trying to find a logical reason why I would do something so stupid insuring I can never go back to that old world.

3 good book reviews and book sales taking off must have had something to do with it.

Im frightened and excited at the ssme time.
Adventure dogs.

Read the book reviews. Thank you

https://www.amazon.ca/gp/aw/cr/B01MXKNY5N/ref=mw_dp_cr


You must be up thousands of sales by now….

How’s the new pilot for HBO. going? Is Telly Savalas going to play smokey

#151 CharlieDontSurf on 05.16.17 at 9:02 am

It has been an interesting couple of months on my street. Of the 15 houses 7 have sold or are for sale. This is in the 1.2-1.4 price range in a nice neighborhood in Victoria. However, places listed over 1.5 in nearby hoods are languishing on the market for months. I have read other bloggers from other Victoria areas commenting on the same. That price range seems to be a sweet spot at the moment.

I have been reading this blog daily for a little over 1 year now. Been following Ross Kay during that time as well. Both Garth and Ross have been correct all along. I think Vancouver is sinking at the moment and the MSM as well as most people are totally oblivious to what is going to occur over the summer months.

On a more serious note….Hey Smoking Man, do you mind if I put your photo on a coffee mug? Personal usage only of course.

#152 Nuke on 05.16.17 at 9:06 am

BCREA just released their current stats and prices are down over $96,000 in Greater Vancouver. Why hasn’t there been a front page article about this massive (is it a record?) house collapse.

http://www.bcrea.bc.ca/docs/news-2017/2017-04.pdf

#153 Tater on 05.16.17 at 9:25 am

#28 SquareNinja on 05.15.17 at 7:04 pm
Since my mortgage is at Home Trust, subsidiary of Home Capital… do I need to be worried? My original LTV was 65% in early 2015 and at today’s prices, more like 40% LTV. The thing is, combined household income is very low (+ consumer debt) gives us a TDSR that a conventional bank would not accept.

Should I be worried?! Might Home Trust mortgages be bought by one of the Big Six? Thoughts? Appreciated!!!
++++++++++++++++++++++++++++++++++++

You should be worried, because you bought a house you can’t afford. Who holds the mortgage is immaterial.

#154 Rebs on 05.16.17 at 9:50 am

How come no one ever talks about Montreal?
I don’t wanna jinx it, but this is the first time in along time that I’m feeling optimistic living here.
The total reconstruction of one the major exchanges is going really well and will directly impact at least a few neighborhoods (more green space, better access to highways, etc). The prices here are still very affordable.
Sure, you still have the english-haters but it’s calming down as they grudgingly see that it’s the way of the future (english=$)
Good long-term investment potential ?

#155 GFD on 05.16.17 at 9:57 am

#37 Stone
Okay, so we both know you have ‘realtor.ca’ included in your bookmarks, along with GreaterFool and that underwear place.
======================
Ok. I get the first two and do have those in my bookmarks. Underwear place? I’m clueless. What’s that about?

…..how about your favorite porn site?

#156 maxx on 05.16.17 at 10:07 am

#3 Festy Lindholm on 05.15.17 at 6:23 pm

“Garth, How long do you think Poloz has at the BoC? Might Carney be coming back after he is done at the BoE?”

They’re keepin’ rates way low there as well…..I do agree however, that a change of pace would be most welcome. And then some.

#157 Mike in Edm on 05.16.17 at 10:09 am

#92 InvestorsFriend on 05.15.17 at 10:21 pm
Are Mortgage Delinquency Figures Trustworthy?

CBC reports that 5,746 properties in Alberta were foreclosed on last year. Up more than 50% in two years. This makes perfect sense.

http://www.cbc.ca/news/canada/calgary/foreclosures-alberta-calgary-rising-2017-1.4108646

But they note that As of February, there were 2,736 mortgages in arrears in Alberta, representing 0.47 per cent of total mortgages in the province.

The arrears they quote are 90 days in arrears and I have watched these closely since back in 2008 or so. They barely budged with the Alberta recession.

Are we to believe that only 2,736 are at least 90 days late when there were 5,746 actually foreclosed on last year?

Well, maybe since the 2,736 is the number 90 days late at a point in time while the 5,746 is for the full year. And maybe a lot of the foreclosures are no reported by the Canadian Bankers Association (which presumably excludes credit unions and some other lenders).

Still, I think the banks are under-reporting the delinquencies since they allow people to skip payments and take payments holidays. If I owe monthly payments to you and I beg poverty and you grant me 4 months of no payments (to be added to principal) am I not still delinquent in substance?

I would not be at all surprised to see it come out at some point that the banks are under-reporting delinquencies. Banks attract the attention of regulators if their delinquencies go up. They have every incentive to try to find ways to avoid classifying loans as delinquent.
**********************************

I commented on this last year. I have many good friends in Calgary that were telling me around ’15 Christmas that people figured out they could miss 3 (or maybe it was 4?) mortgage payments to the bank before the bank would even contact them, so that’s what everyone in financially difficulty was doing.

#158 traderJim on 05.16.17 at 10:18 am

I wonder if we’ll see some vendor take-back financing soon?

If I were the seller and some idjit was paying several hundred g’s more than the property was worth but couldn’t get financing for the last 10%, I’d consider providing it.

You get a nice fat interest rate and maybe save the deal and avoid a lot of legal hassles.

Just thinking out loud, certainly not an ideal situation, but desperate times call for desperate measures.

#159 Mortgage Fraud on 05.16.17 at 10:22 am

And down she goes: Take a look at this chart.

https://twitter.com/dbcurren/status/864214224834359296/photo/1

And the listings surge in the GTA: Wow.

https://twitter.com/DonutShorts/status/864183717169856513/photo/1

Barry Schwartz On Friday April 21st went on live national television and advised everyone to hold onto their HCG stock. Then the following Monday April 24th sold all his shares. No uproar. Nobody to hold him and his gang accountable. This is the shark-infested, media-manipulated, regulatory-lacking environment of a banana republic that Canada is.

Morneau has financial interest in HOOPP through his pension consultancy business. NO ACCOUNTABILITY in this country. It’s a free market for criminals in media, government and finance.

#160 Sir James on 05.16.17 at 10:22 am

#103 hammer time

realtor.ca/Residential/Single-Family/18168065/19-SIMCOE-Street-East-HAMILTON-Ontario-L8L3M8

#161 Simplyput7 on 05.16.17 at 10:27 am

BCREA News Released May 15, 2017
Page 1, last paragraph:

Year-to-date:
* BC residential sales dollar volume was down 31.8% to $21.3 billion, when compared with the same period in 2016
* Residential unit sales declined 25.0% to 30,757 units
* average MLS® residential price was down 9.2% to $692,220.

http://www.bcrea.bc.ca/docs/news-2017/2017-04.pdf

Ross Kay podcast was good this week:
http://www.howestreet.com/2017/05/15/average-bc-home-down-100000-year-over-year/

#162 Mortgage Fraud on 05.16.17 at 10:48 am

HCG was 2 hours away from total collapse. So they reluctantly allowed a board member to pillage the till… CEO Gerry Soloway then ran away. As did Rizwan the great fraudulent mortgage originator who is now employed by the twisted sister, EQB…. See here:

https://twitter.com/Mr_Silbergleit/status/863432867963174913/photo/1

#163 Blacksheep on 05.16.17 at 10:58 am

Simply # 161,

Thanks for the link, but you missed the most relevant part, let me help.

“BCREA News Released May 15, 2017
Page 1, SECOND, to last paragraph:”

“The supply of homes for sale declined 17 per cent from April 2016. On a seasonally adjusted basis, active residential listings have declined 50 per cent since 2012 and are now at their lowest level in over 20 years.”

http://www.bcrea.bc.ca/docs/news-2017/2017-04.pdf

#164 westcdn on 05.16.17 at 11:24 am

Time for reflection – the door that looks like a mirror. I believe in karma, it rules my life. I don’t know what I did in a previous life but I am paying the price.

Humility seems to be the lesson. Good luck avoids me yet nothing real bad happens to me and really good people show up in my life when I need it. It seems when I apply myself to others, sudden good things happen for them. Why it doesn’t happen for me, I am at a loss. Yet I grind it out to build something and it works slowly. I do get envious when I see people get an easy ride but that is part of being human.

Okay I got that off my chest. When I want some humor to cheer me up, I like the Mellissa commercial. http://www.nydailynews.com/autos/news/kia-releases-full-super-bowl-commercial-melissa-mccarthy-article-1.2961319 Shades of Yosemite Sam.

I worked as a faller with my father for a few summers. I was okay with that as we were mainly cutting right of way. Clear cutting was a different story. I would look at our handiwork and wondered how long to recover. Government rules matter there although the bureaucrat inspectors can be annoying as they justify their existence – we followed the rules to a tee. My father would say here come the inspectors. I would look over at the truck coming our way and ask how he knew. Reply – they always drive new shiny trucks that don’t do work. He and I disagreed but I am still proud of my parents – spirit matters.

Sayward, just outside of Kelsey Bay is a good example of second growth but it takes decades. I got a kick out of my father when he was showing the new government policy of seed trees. We toured newly clear cut areas and he would point out a solitary tree in the middle of devastation. It helped but it was hardly a cure.

Climate change is a problem but I am unsure of the cause. It is a game changer. I will do my part and keep my carbon footprint low although Alberta’s carbon tax still bites me. I groan when I see my energy utility bill knowing that it will only get worse. It annoys me that despite my former guy in the basement (roommate) winning a lottery, he and family get the rebates and other handouts for being low income. Yet, I would rather be paying than lining up for a handout.

#165 JAB on 05.16.17 at 11:32 am

I just realized that “greater fool” is an anagram for “f realtor ego”

#166 For those about to flop... on 05.16.17 at 11:37 am

A couple of months ago I pointed out that a lot of the more affordable houses in Vancouver proper are languishing on the market and this is a sign that things are not back to where they were in the past.

If you go to Zolo and put the price limit of 1.3m on detached properties,42 options will come up.

Of these options a fair whack of them have been for sale over a month and this is kind of irrelevant as some of fresher ones are actually going around for the second or third time.

As for price reductions, same thing.Only 6 have the official reduced sticker but a lot of them have had price reductions upon being re-listed to not draw any attention, which is the opposite of what you think they would want.

Amazingly a couple of these houses are in my Pink Snow/ Pollen folder as well and so even with a motivated seller there is still not a deal to be done.

I don’t expect it to be front page news or the leading story on the 6 o,clock news every time someone loses 100k on a real estate sale but the reporting could be more balanced of course but we all know the motivation for that.

Woeful T.V has started to run its real estate fluff pieces again without doing any fact checking and so at the moment it pretty much goes…

Bash Trump for 5 minutes

Real Estate fluff piece 3 minutes

Some cute, cuddly animals rolling around in the hay 2 minutes

Sport 5 minutes

Weather 5 minutes

5 ,2 minute add breaks mainly containing real estate stuff now that the election propaganda adds are done with for a while…gotta get the revenues back up…

M42BC

#167 Xbox Economist on 05.16.17 at 12:09 pm

#140 SimplyPut7 on 05.15.17 at 5:15 pm
#137 Xbox Economist on 05.15.17 at 4:49 pm

Gawd, you mean there are mortgages to borrowers even Home Capital would not touch?!

When does this all blow up then?
___________________________________________

You’d be surprised at what HCG doesn’t touch. They don’t just hand out mortgages to anyone with a 5% deposit and a job. They have very strict lending guidelines and independently appraise the current and future values of the real estate pledged as collateral. In many cases they won’t go more than 65% – 70% LTV. It’s the private lenders that pick up the riskier loans with higher LTVs.

#168 Vit on 05.16.17 at 12:16 pm

–Peak house
—There are reasons to believe we may have hit the peak.
—The latest stats for the economy are dismal, with negative growth in both February and March
—Actually, the rate war is raging because real estate deals are starting to slide in Toronto and Van . Sales in Toronto, seasonally-adjusted, fell in March from February and flatlined in April.
—– multiple offers are diminishing, more listings are languishing and the bully bids are disappearing. No wonder. Prices are at extreme multiples

Sounds familiar , truly describes today market but problem is it was written in this blog on April 2016 and we have another 30% price increase since then .

#169 Oncebittwiceshy on 05.16.17 at 12:32 pm

163) …….”you missed the most relevant part”

Let me help you clarify this announcement Blacksheep. So, despite the lowest inventory in 20 years, MLS residential prices were down 9.2%.

Sometimes it takes a few minds to highlight the negative news that real estate humpers tend to overlook.

There are a number of bulls here that get their real estate viagara from Global News.

I understand that you are a reformed bear but if you plan on being in your home for 15 plus years and you’re not over leveraged, don’t worry.

Confirmation bias can be your undoing whether you’re trying to get into the market or out of the market.

#170 For those about to flop... on 05.16.17 at 12:32 pm

I know one of Vancouver’s nicknames is Vandelusia and a lot of people aren’t paying attention, but this cat took it to the next level.

They paid 190k for this near 30 y.o condo last May and was trying to skin someone for the best part of a million.

Actually the realtor would have have to have been lacking oxygen to agree to list it for that as well, but it was pretty quite for around 4 months for them ,so I guess you gotta do what you gotta do.

The latest price reduction put them back on the same planet, but they are still on a different continent…

M42BC

201-918 Roderick Avenue, Coquitlam

Apr 20:$990,888
May 15: $300,000
Change: – 690888.00 -70%

https://evaluebc.bcassessment.ca/Property.aspx?_oa=QTAwMDAzWDg3Nw==

#171 Johnny Boy on 05.16.17 at 12:33 pm

#82 Smoking Man on 05.15.17 at 9:51 pm

I’m about to unleash smoking man on the real world of linkedin.

My real name is Jim Stojsin.

Dogs . Connect for some great self destruction and a re birth doing what I love. Pumping out truth with one thumb.. Garth stop protecting me. They don’t want me anymore.

The machine don’t like old fks with a brain.

It’s time for revenge.
_____________________________________
I liked the Smoking Man fake name better, how the hell do you pronounce Stojsin? What is that Russian? Couldn’t you have come up with a better real fake name? That name isnt going to sell books, you need a name like Smoky Robinson…………….

#172 Simplyput7 on 05.16.17 at 12:38 pm

#163 Blacksheep on 05.16.17 at 10:58 am

It sounds like realtors are trying to say going forward things can only get better, but the media made it seem like BC had already recovered from the 15% foreign tax.

It’s also interesting they didn’t talk about the year-to-date active residential listings. Did the listings suddenly drop in April 2017 to become the lowest listings on record, after prices fell 9.2% and sales dollar volume fell 31.8% in the first 3 months of 2017, scaring off sellers?

Or were the already low listings not helping to push up prices and sales dollar volume due to lack of demand, because primary residential buyers were priced out a long time ago and speculators (local and foreign) have started to move on, as they anticipate that prices will continue to go down.

#173 Shortymac on 05.16.17 at 12:44 pm

Added smoking man to my linkedin, hope he accepts my invitation.

First time in a while since I felt hopeful, my contract is ending at the end of the month but there are opportunities coming in, husband and I’s debt is almost paid off, and housing market is cooling off. There’s a light at the end of the tunnel.

Going to go visit my best friend in Atlanta after my contract is over and then hit the job market super-aggressively.

#174 Foreign Capital? on 05.16.17 at 1:00 pm

wow, just took a look and i’m blown away.
it’s on fire around here like the good old days.
sales in the past couple weeks;

1741 E 2ND AVENUE ask $2,150 sell2,350
200k over ask -BOOM

2156 E 2ND AVENUE a$2,099 sell$2,435
335k (one third of a million!) over ask – BOOM

1977 E 2ND AVENUE a$1,98 sell$1,88
it’s a junker for nearly 2m – BOOM (this was sub 1m in 2013)

3x junkers on 1st ave all sold fast near 1.4m – on 1st ave freeway.

ALL DOM under 7.

those 2.4 m houses i know well. my friend sold his in 2012 for 1.1m.
in 2012 so many here were calling for 50

——–

Yes, the market is back on fire.

If you look at a chart of GTA prices, they took off when BC implemented their foreign buyers tax. Foreign capital was diverted to GTA. Then you had a 30% increase in prices – at a time when rates are rising, the new fed stress tests are in place, when jobs have transitioned to part time from full time, and there is little growth. An unheard of price increase…

Now, a month after Ontario implemented their foreign buyer’s tax, the foreign capital has been diverted back to Vancouver and now everything is on fire – again – for the umpteenth year. Not only condos and townhouses, but also SFH are back on fire.

This is exactly what happened when Hong Kong implemented their 15% foreign buyers tax a few years ago – the market stalled for a few months as foreign capital was shocked and then repositioned. But six months later, the market was back on fire and continues to be.

So we now have rising interest rates, and new highs are being tested everywhere. Perhaps its time to start looking at the key driver of price increases and seriously questioning the ‘low rates’ theory.

By the way, how come no one is commenting on the collapsing sales in Vancouver? Where are all the bears giddily rubbing their hands together to ‘vultch’?

I will say that when anything is predicted on this site the opposite usually happens – Brexit, Trump, minority government in BC, the Vancouver plunge, etc.

BC residential sales volume down 31.8% to $21.3 billion. Residential sales declined 25%. Average price was down 9.2%. Is the ‘fire’ you’re talking about the one in your shorts? — Garth

#175 For those about to flop... on 05.16.17 at 1:17 pm

Pink Pollen falling in Coquitlam.

Here’s another person looking for someone to collude with.

As in, you pay for the expenses and we both run around like we got a good deal,no losers ,only winners.

These guys paid 1.388 for this place last May and just like one of my cases out in Delta yesterday, it states newly renovated and so the question is was the Reno done by them or the previous owner because that means whether or not they take a sizeable hit.

I know of a couple of flips around me that look good on paper ,roughly 250k difference between buy and sell ,but if you take into account a 3 month renovation and closing costs they pretty much broke even.

Did they do the right thing by cutting the cord or should they have held on a little longer only time will tell ,but another one of them has been for sale for 9 months,opposite a school and still no action and so I guess safety first.

If you are a small time Reno-flipper in East Van you have to watch what your doing right now ,as you’re now playing in the big leagues…

M42BC

1540 Pinetree Way, Coquitlam

May 8:$1,588,888
May 15: $1,498,888
Change: – 90000.00 -6%

https://www.zolo.ca/coquitlam-real-estate/1540-pinetree-way

https://evaluebc.bcassessment.ca/Property.aspx?_oa=QTAwMDAzWTA1OQ==

#176 Smoking Man on 05.16.17 at 1:33 pm

#173 Shortymac on 05.16.17 at 12:44 pm
Added smoking man to my linkedin, hope he accepts my invitation.

First time in a while since I felt hopeful, my contract is ending at the end of the month but there are opportunities coming in, husband and I’s debt is almost paid off, and housing market is cooling off. There’s a light at the end of the tunnel.

Going to go visit my best friend in Atlanta after my contract is over and then hit the job market super-aggressively.
….

I accepted pleasure to meet you

#177 Aliens united on 05.16.17 at 1:40 pm

#171 Johnny Boy on 05.16.17 at 12:33 pm
#82 Smoking Man on 05.15.17 at 9:51 pm

I’m about to unleash smoking man on the real world of linkedin.

My real name is Jim Stojsin.

Dogs . Connect for some great self destruction and a re birth doing what I love. Pumping out truth with one thumb.. Garth stop protecting me. They don’t want me anymore.

The machine don’t like old fks with a brain.

It’s time for revenge.
_____________________________________
I liked the Smoking Man fake name better, how the hell do you pronounce Stojsin? What is that Russian? Couldn’t you have come up with a better real fake name? That name isnt going to sell books, you need a name like Smoky Robinson…………….


Jimbo smoking stooge reporting live from whackville. Just stooge for short.

#178 mike from mtl on 05.16.17 at 2:06 pm

#154 Rebs on 05.16.17 at 9:50 am
Good long-term investment potential ?

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

As been stated, there’s reasons for that. There’s no real history of housing busts however decades of mal-investment, political issues and so on.. Plus our high taxes, onerous laws, and low wages unless it’s for your personal primary residence, don’t invest here unless you want to lose money.

Wait until PQ gets back in as usual, then the whole cycle of wait-and-see continues.

#179 Mark on 05.16.17 at 2:08 pm

“Why hasn’t there been a front page article about this massive (is it a record?) house collapse. “

Because Canada’s newspaper sector is, for all intents and purposes, ‘owned’ by Canada’s RE sector?

The past few years, most RE-related news has been little other than Realtor press releases re-printed almost verbatim. That’s why we have so many delusionals out there, believing that prices have actually risen since the 2013 apex. Swearing up and down that it must be true because they read it in a newspaper.

Occasionally some dumb kid or newcomer actually falls for the ruse, and they have a transaction or two to point to.

Independent journalism died in Canada a long time ago. What you read in the newspapers really isn’t news in the traditional sense, with multiple sources, conflicting points of view, etc., but is rather propaganda unilaterally emitted from those with a vested interest in keeping the perception of price growth and vibrancy alive.

#180 Blacksheep on 05.16.17 at 2:13 pm

Once #169,

“Let me help you clarify this announcement Blacksheep. So, despite the lowest inventory in 20 years, MLS residential prices were down 9.2%.”

“Sometimes it takes a few minds to highlight the negative news that real estate humpers tend to overlook.”
——————————————————-
Yes, according to the report supplied, that is correct.

Did you not read @ Simply # 161? My intent unlike yours, was to provide info, that had not yet been posted.

Quoting only part of the report, leaves out relevant info for those making decisions to buy, or not buy…but I’m sure it was just an ‘oversight’ on Simplyput 7’s part.

I suggest party’s interested see link for full info:

http://www.bcrea.bc.ca/docs/news-2017/2017-04.pdf

#181 For those about to flop... on 05.16.17 at 2:16 pm

Pink Pollen falling in Burnaby.

I have featured these guys before ,they just fiddled with the price again ,but they’re still in the same amount of trouble.

It is a relatively new build they paid 2.06 million for ,but the assessment that it received only came in at 1.5 ,which I’m sure would have shocked them more than going swimming with electric eels with no pants on…

M42BC

8920 15th Avenue, Burnaby

Jan 25:$2,298,000
May 15: $2,160,000
Change: – 138000.00 -6%

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

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

#182 The American on 05.16.17 at 2:20 pm

blast from the past….

As for Vancouver, well the correction has begun and you know it! You wouldn’t have the time to sit on this blog all day, every day and type away if you were so busy. You try too hard, which is very telling. The Chinese are stopping the madness as their economy begins to implode (just as I said it would) and the funds are coming in at a glacial pace compared with only a year ago in Vancouver. Areas in greater Vancouver are now showing signs of significant strain and property values are dropping, including significant price drops on new construction and resales. Also, permitting for new construction is on a MAJOR downward swing in Vancouver and throughout Canada in general. Yep, looks like the party is over”

-The American, on this date in 2011

#183 bdwy sktrn on 05.16.17 at 2:28 pm

BC residential sales volume down 31.8% to $21.3 billion. Residential sales declined 25%. Average price was down 9.2%. Is the ‘fire’ you’re talking about the one in your shorts? — Garth

———————–
those sales mentioned are all in may, and not captured in the latest stats. look for a large pop in may numbers if this is happening in other areas too.

the fire was just smouldering until may, it’s back aflame now.

#184 Foreign Capital? on 05.16.17 at 2:36 pm

#105 Don
“The question no realtor or house pumper can answer. Who will buy if prices continue to rise year over year. At a certain point things change and sentiment changes.”

——–

Oh Don, you seem quite new to this whole real estate game because many of us have been asking ourselves this for more than a decade.

Prices are detached from economic fundamentals – that has been the case in places like Vancouver for a decade. When the average family income in Vancouver is 70k and the average house is $1.5 million, there is no correlation to local incomes. The old paradigm that houses should be 3x income (or even 5x with a premium place like Vancouver) is long long long dead.

Bears look at the housing collapse in the US and say, ‘see, eventually prices maxed out and things changed.’ Well, the one variable that was absent from their market was the huge influence of foreign capital.

In some Metro Vancouver communities over 20% of the buyers were from overseas. That is according to provincial data.

So if you think that there is an exhaustible supply of local buyers in places like Vancouver, you are right – they just move to other communities when they are priced out. And then those places get prices increases too.

But if you think that there is an exhaustible supply of foreign capital looking for the safest investment in the most tax friendly jurisdiction, then you are mistaken. In Vancouver, that has been recognized since Expo 86 There is way more foreign capital capable of chasing houses than local capital.

“Yet even the crudest measurements suggest a breathtaking upsurge in interest that would rate Canada’s big cities on par with London and New York in the eyes of Chinese buyers. National Bank of Canada economist Peter Routledge has “hypothesized” that Chinese buyers last year shelled out nearly $12 billion on real estate in Vancouver, accounting for 33 per cent of the city’s sales. For Toronto, he pegged the number at $8.4 billion, representing 14 per cent of sales.”

http://www.macleans.ca/economy/economicanalysis/chinese-real-estate-investors-are-reshaping-the-market/

#185 For those about to flop... on 05.16.17 at 2:42 pm

Pink Pollen falling in Richmond.

Here’s another flipper that doesn’t seem to know whether to stick or twist.

They paid 2.04 for an early 80s build with the latest assessment coming in at a distant 1.73.

As you can see they dropped the price as if to say ” Come and get me” ,but that didn’t seem to work, so they put it back up only to lower it again,just not as dramatic this time.

They can shave a little more off, but not much ,if they don’t get realistic then I will be doing a report on them in the summer with a Pink Lemonade flavoured shaved ice cone…

M42BC

4655 Mahood Drive, Richmond paid 2.04

Mar 23:$2,288,000
Apr 25: $1,880,000
Change: – 408000.00 -18%

4655 Mahood Drive, Richmond

Mar 23:$2,288,000
May 15: $2,280,000
Change: – 8000.00 -0%

https://www.zolo.ca/richmond-real-estate/4655-mahood-drive

https://evaluebc.bcassessment.ca/Property.aspx?_oa=QTAwMDA1WFBDRw==

#186 CMHC a house of cards on 05.16.17 at 2:42 pm

Mortgage Fraud on 05.16.17 at 10:22 am
And down she goes: Take a look at this chart.

https://twitter.com/dbcurren/status/864214224834359296/photo/1

And the listings surge in the GTA: Wow.

https://twitter.com/DonutShorts/status/864183717169856513/photo/1

Barry Schwartz On Friday April 21st went on live national television and advised everyone to hold onto their HCG stock. Then the following Monday April 24th sold all his shares. No uproar. Nobody to hold him and his gang accountable. This is the shark-infested, media-manipulated, regulatory-lacking environment of a banana republic that Canada is.

Morneau has financial interest in HOOPP through his pension consultancy business. NO ACCOUNTABILITY in this country. It’s a free market for criminals in media, government and finance.
______________________________________ Canada is such a fraud. Its all based on lies.

#187 Lee on 05.16.17 at 2:47 pm

John Tory appears to be throwing his support behind the Yonge subway line into Richmond Hill. Anyone expecting prices of SFHs from Steeles to Carvelle Road and Bayview Avenue to Bathurst Street stalling or falling this Millenium should get ready for a long wait. I am sure we will all be gone before these properties revert backwards. Whoever on this blog said this would be the Rosedale of the North got it right on the nose. As I have always said, waiting for a recession is a bad strategy when buying real estate.

#188 oncebittwiceshy on 05.16.17 at 3:38 pm

Blacksheep: “My intent unlike yours, was to provide info, that had not yet been posted.”

My sincere apologies, Blacksheep. Your response appeared to be a rebuttal to the “bad news” that Simply # 161 had posted. Indeed you were simply confirming the depth of the problems with your post.

You have, in the past, made some very strong, well based arguments to try and help keep our kids out of excessive debt and leverage. It’s not about convincing our kids not to buy; it’s all about ensuring that they don’t get caught up in the current market.

Keep up the good work. Like me, you are one of the “bears” on this blog that doesn’t have an axe to grind. Lol. At our age, it’s about trying to help our friends and loved ones avoid one big ugly mess down the road.

Good luck.

#189 ole Doberman on 05.16.17 at 4:13 pm

Is this pure insanity or first signs of desperation

Hong kong going to pay foreign buyers tax on Toronoto condos?!

http://www.bnn.ca/hong-kong-ad-offers-to-cover-foreign-buyers-tax-for-toronto-condo-investors-1.753423

‘Hong Kong’ will not pay the Toronto foreign buyer tax. A marketing company is offering this as an incentive, just as buyers sometimes get free upgrades, no condo fees or a trip when they purchase. Surely you are not this thick, or gullible? — Garth

#190 Simplyput7 on 05.16.17 at 4:28 pm

#169 Oncebittwiceshy on 05.16.17 at 12:32 pm

‘… but if you plan on being in your home for 15 plus years and you’re not over leveraged, don’t worry.

—————————————————————–
Not quite.

Best case scenario: home prices and mortgage rates, don’t move up or down for the next 15 years. Many people used their home equity to buy cars, do repairs on their home or pay bills when they don’t make ends meet. If banks start to say ‘No’ to giving more money on the line of credit because home values have not increased, and the maxed out homeowner needs money for emergency repairs to the house or vehicle, the person has to either use a credit card or dare I say, save cash, for the repairs. Spending on entertainment, vacations, clothing, luxury vehicles reduces, which also affects the businesses of these non-essential items, their employees become nervous noticing sales decline and start to worry about being fired and reduce their spending at home too, leading to the self-fulfilling prophecy.

Worst case scenario: Homeowner made only a 5 – 15% down payment and home prices correct 20% – 60%. The bank may not take away the line of credit but they may reduce what they gave the home owner. They may also give the owner a higher interest rate on the line of credit and higher mortgage rate when they renew (every 5 years or less) because the person is more risky with a LTV higher than 100%. Even if Bank of Canada rates don’t move, the mortgage lender would add at least add 0.25% to the mortgage at renewal. A homeowner carrying 2 or 3 mortgages on a property in Toronto, may be in for a shock when the mortgage rates increase.

In both cases, the homeowner may not also be able to leave their mortgage lender for another bank or company offering lower rates. The fall 2016 mortgage rules from Finance Minister Bill Morneau state, the home buyer has to qualify under the new rules at a mortgage of 4.64% to go to another mortgage lender.

In a city like Toronto or the surrounding areas, that means you’re stuck with your mortgage lender who can raise the rates on you because they know you can’t go anywhere.

#191 I'm stupid on 05.16.17 at 4:33 pm

#187 Lee

Only one problem with your argument… there aren’t enough rich people here to buy Rosedale priced properties. The entire 905 is a wasteland. What’s the difference between Bathurst and Major Mac and Weston and major Mac? All the strip malls have a longos, Tim Hortons and a walmart. You need to drive across the street and even with a subway it will take you 45min to get to Union station.

It’s funny how comparisons are made from no actual facts. Toronto is like New York, Toronto is Hollywood North, Wonderland is Canada’s Disneyland, Richmond hill is the next rosedale, we’re running out of land etc etc.

#192 PawPatrol on 05.16.17 at 4:37 pm

Wow, some of you who scoff at patient renters who say we missed out on owning and now never will. I’m a millennial and I’m PROUD I’ve not jumped into this horny mess in Vancouver. My feet are firmly on the ground and you will NOT see me buying at peak price. I’m not dragging my family and kids into this mess. I will be watching as my fellow millennials bought at PEAK price and their horror soon as their equity washes away, remember they have not extracted any equity because they haven’t sold. They still owe the same debt. The same debt! Our living costs are LOW right now as renters and our lifestyle quality is HIGH. Excuse me while I take our kids to Disneyland.

#193 Howard on 05.16.17 at 4:42 pm

Lee – any funding for a Yonge line extension to Richmond Hill won’t even be approved for years, and we’d be be looking at 2035 or even 2040 before it would actually open to riders. This is GTA transit planning we’re talking about –
incompetence and glacially-slow timelines. You’re going to bet on this bubble lasting nearly 20 more years in North York with no let up?

#194 Smoking Man on 05.16.17 at 4:56 pm

Was just out apartment shopping. The guy showing me the units, his phone ringing off the hook. People selling theie homes to move into units. I’m on a waiting list.

He said if he had another building. He would rent it out in a week.

We’ll looks I’ll end up in a trailer park somewhere. Should find some interesting characters to write about.

#195 Lee on 05.16.17 at 4:59 pm

191/193,

Once the announcement is made, it can be for 2050, sellers will price an increase in. Also, whats 45 minutes to get to work? That’s nothing. People do 2 hours from Barrie each way, each day. Richmond Hillers already think they live on the Bridle Path – it won’t take much for them to demand another 40% over market value for a house. I tell you, nothing two storeys goes for under 2M in that area. Anyway, lets see what Garth’s post is today. I’m getting bored at work.

#196 Simplyput7 on 05.16.17 at 5:10 pm

#187 Lee on 05.16.17 at 2:47 pm

I have seen the prices sellers want for their vacant brand new mansions in Richmond Hill, when nearby cities such as Vaughan and Markham are offering the same house for a third less.

I don’t know what medicinal plants you have been smoking up there in Richmond Hill, but even, central Toronto does not have SFHs priced this high. If a person has $3 million for a home, they can get one near a station on the Yonge line that is already built. Or the extended University line which opens this December 2017.

#197 Al on 05.16.17 at 5:13 pm

Re: #189 – NRST on Condos near Ryerson.
My understanding of the NRS Tax is that it is refunded if the buyers children move in to attend College or University in Ontario.

#198 Pete on 05.16.17 at 5:16 pm

HOME CAPITAL GIC FELL RECORD $56 MILLION ON MAY 15

Home Capital just reported their May 15 liquidity position. Liquidity fell $30 million to $880 million. GIC fell a record $56 million. Demand deposits fell $9 million.

Poloz said Home crisis is over, I think it is just beginning.

Total deposits fell $65 million; however, liquidity only fell $30 million. There is only one explanation: they have completely stopped issuing mortgages. They made new mortgage loans of $9 billion last year, that is about $30 million a day.

So in fact, they are already out of the new mortgage business.

#199 Smallfry on 05.16.17 at 5:18 pm

Can we see a blog post yet about the price of avocados Garth? First it was the cauliflower, now its the avocados..
Also, what about the news report here in Alberta about the recent rise in credit card delinquencies and rise in foreclosures? I’m just gonna make like Russia and sit back while eating my popcorn!

#200 Pete on 05.16.17 at 5:31 pm

From May 8 (Monday) to May 15 (Monday), in one week, Home Capital lost $260 million in deposits. Now they have $880 million on May 15. They have a deposit note of $320 million due on May 24. At this rate, by the middle of next week, they have to draw down the remaining $600 million credit line. Then what to do after that?

#201 rainclouds on 05.16.17 at 5:34 pm

#194 SM “Was just out apartment shopping. The guy showing me the units, his phone ringing off the hook. People selling theie homes to move into units. I’m on a waiting list.”

Yea, but if you dont show up in a star trek outfit babbling in Nictonite you should be able to move to the top of the heap.

When I went hunting in Vanstupid every landlord wanted us as tenants. One landlady phoned us and offered to drop the rent after we declined her apt. Of course we dont smoke or gargle JD which could be a mitigating factor…..

Mature, long term homeowner, in a stable relationship, with cash, is a desirable set of attributes.

#202 paul on 05.16.17 at 5:43 pm

#196 Simplyput7 on 05.16.17 at 5:10 pm
#187 Lee on 05.16.17 at 2:47 pm

I have seen the prices sellers want for their vacant brand new mansions in Richmond Hill, when nearby cities such as Vaughan and Markham are offering the same house for a third less.

I don’t know what medicinal plants you have been smoking up there in Richmond Hill, but even, central Toronto does not have SFHs priced this high. If a person has $3 million for a home, they can get one near a station on the Yonge line that is already built. Or the extended University line which opens this December 2017.
—————————————————————–
If a person has 3 million he’s not riding the subway !!

#203 Mark on 05.16.17 at 5:44 pm

“So in fact, they are already out of the new mortgage business.”

Of course. Any new business they write has to be at rates at least high enough to repay the HOOPP financing + a spread for profit. And realistically, how much business is there really in the Canadian mortgage marketplace at double digit rates of interest that actually would be profitable?

If I was a HCG mortgagee, I’d be quite concerned that HCG’s people are hard at work looking for any reason possible to declare my mortgage in default. There’s some pretty extraordinary clauses in most mortgages surrounding maintenance, for example, and it would be in HCG’s interests to ensure that the properties that form the basis of the collateral for its loan book are fully and properly maintained.

#204 Dan.t on 05.16.17 at 5:52 pm

#179 Mark on 05.16.17 at 2:08 pm
“Why hasn’t there been a front page article about this massive (is it a record?) house collapse. “

Because Canada’s newspaper sector is, for all intents and purposes, ‘owned’ by Canada’s RE sector?

The past few years, most RE-related news has been little other than Realtor press releases re-printed almost verbatim. That’s why we have so many delusionals out there”…..

Exactly! If you had enough money, you could advertise anything in the main newspapers and call it news. No one complains because there is 2 trilllion of person debt and over 70% home ownership…with the majority owning multiple properties.

No one wants this party to end. Everyone knows it’s crazy and wonders who is buying but just don’t mess with “our equity”.

There will be zero responsible and unbiased news ever in Canada… the news is whatever those who pay the bills want it to be.

#205 SquareNinja on 05.17.17 at 11:05 am

#70 ww1 on 05.15.17 at 8:54 pm – thanks for the sage advice :P

#120 Long-Time Lurker on 05.15.17 at 11:55 pm – indeed, I do read most of Garth’s posts… our mortgage is very small, actually, so what I pay now in mortgage + land taxes (plus opportunity cost of the downpayment) is cheaper than rent in the same area! I also do all my own maintenance, so that helps.

I was more concerned about re-qualifying for this mortgage if it goes to a conventional bank. You see, I am not conventionally employed… thanks for the response!

#129 Looney Baloney on 05.16.17 at 1:11 am – thanks for your positive response! Like you, I have been reading Garth’s blog for a while… and I dunno, I guess the Canadian economy is “different” :D

Like in London, UK, when their market crashed around the 2008 financial crisis… real estate recovered just like it did in Canada and has been even more inflated since then (and truly, because of foreign money).

Although, I do still believe that there is some type of correction at hand for the Toronto market. I was but a child during the early 1990s real estate downturn, but I remember that my dad had bought a townhouse at the peak and sold at the trough…

#153 Tater on 05.16.17 at 9:25 am – thanks for the response! As I was telling Lurker, my mortgage and all associated costs is cheaper than renting in the same area; I can afford it comfortably and my rate is at 4.79% 3-year closed term with 30-year amortization. Yup, that’s what I got from Home Trust.

So, I reckon if my Home Trust mortgage is subsumed into a larger financial institution, that my rate might be lower? In any case, I was more worried about re-qualifying than about affording my mortgage.

That said, you are right, I need to get my finances in order.

#206 AGuyInVancouver on 05.17.17 at 2:36 pm

#179 Mark, to be fair it was the Globe & Mail that kept running a series of article on Vancouver’s housing market that finally forced Christy and the BC Liberals to take some kind of action, after they had been denying there was a problem for years.

#207 Alice on 05.17.17 at 6:33 pm

@ #205 SquareNinja on 05.17.17 at 11:05 am

That was always the racket at alternative lenders. Teaser rates for people that barely qualify, and then your mortgage gets “re-worked” at a company with a predatory rate because you failed renewal.

Do yourself a favor and sell for a profit, and rent before you get screwed.

#208 SquareNinja on 05.17.17 at 9:06 pm

#207 Alice on 05.17.17 at 6:33 pm – thanks for your reply! However, the 4.79% was my first rate – I wasn’t really told what rate I’d be getting (through a broker) and I just ended up with this rate. I don’t mind, though, because the mortgage is really small and manageable (even for me!).

Hmmm… I see what you’re saying about their practices, though. I certainly hope I can qualify as a non-subprime borrower, though… if I can afford to pay such a “high” rate at the moment, I certainly can pay what the big six are offering.

That said, a bank manager from a red bank once told me that I could easily qualify for a mortgage since I had such a large downpayment.