The turn

Well, little doubt now that it’s happening. The correction. First we take Big Smoke. Then we take Vandelusia.

“I’m a Real Estate Lawyer in the GTA and have been an avid reader of your blog for some years now,” says Baqa, who thinks his job description deserves Capitalizing.

“We’ve heard all the headlines and posts like “SOLD 1000% OVER ASKING WITHIN 42 MINUTES” etc but we don’t hear the flip side. Today I had FOUR calls within a couple of hours with people trying to get out of their new deals. Each and every one of them said the same thing, they overbid and are now having buyer’s remorse.

“If these dominoes start falling we may have a crisis as early as this summer.”

Interesting that this lawyer works the mean streets of Mississauga, where the average house now costs $796,555, and a detached goes for $1.2 million. Yes, in Mississauga. Land of a million minivans, 12-lane expressways, giant malls, the Marilyn Munro skyscraper condos and a spidery web of soulless, tree-deprived cul-de-sacs. After a torrid early rutting season, sales last month slipped 7% year/year, but prices managed to bloat by more than 27%. But, as in the Kingdom of 416 down the road, listings are piling up. 25% more in April – and that was just the beginning.

In the last seven days another 10,500 properties came on the market in the Golden Horseshoe surrounding Toronto. All of a sudden the 48,000 real estate agents who had nothing to sell three months ago are overwhelmed. And, miraculously, the buyers seem to have stopped buying.

Bidding wars are now rare. Sellers have once again started to accept offers conditional upon a home inspection. Even on financing.

Agents have been holding offer nights but receiving none. Listings that would have been swarmed the day they appeared now languish for weeks. And, most of all, the choice is exploding with more than 1,000 or more fresh MLS offerings in the region every 24 hours.

This is human nature on parade. When assets rise and that’s all people talk about, everybody wants in. FOMO, or fear of missing out, was the primary market driver in February and March, when 416 prices rocketed ahead more than 30% year/year. Buyers fell over each other in a frenzy to “get in” at any cost – based on the belief that today’s price, even wildly inflated, would look cheap next year.

So, the more houses cost, the greater the demand.

As for owners, few listed because they believed the ascent would be endless. Why part with something that’s going up by a third every year? But many also felt trapped inside their wealth – since they couldn’t afford to buy their own house at market prices, let alone sell and move up.

In the past few weeks, that’s all turned. Now it’s a mad rush to capitalize on the greatest greater-fool real estate market in Canadian history, cashing in those windfall profits before they vaporize. Plus, the sudden prospect of a declining market has scared the crap out of an army of amateur landlords, flippers and speckers who leveraged themselves up the wazoo. New, universal rent controls make monthly losses on condos a virtual certainty while a flood of listings and Ontario’s anti-bubble program mean the potential for capital gains has gone pffft.

What’s next?

Busy lawyers, like Baqa. A slew of deals will be falling apart over the next few weeks, with thousands of people shocked at what the process is actually like. There’s no easy exit from a locked-in contract like an offer of purchase & sale, and the damages jilted sellers can claim will augment with each market decline.

Expect even more listings and fewer sales. The ratio will take a brutal turn, leading then to price reductions in the summer. The pace and depth are unknown. It could be as mild as 15%, as serious as the 33% drop when the last boom turned to bust or – if rates rise, Trump tears up NAFTA or more mortgage companies fail – worse. What the events of the last few weeks have suggested is that historic bubbles can have epic endings. And that is just what economists, ratings agencies, bankers, politicians – and a certain pathetic blog – have been warning. Anything that goes up 30% in a year with no economic justification can come down just as hard.

Finally, this is not a Toronto story. The GTA has six million people. The wider region adds another 3.4 million. That’s almost a third of the national population. The bubble’s bursting because average families can no longer afford average houses, just like in Van.

We flew too near the sun. Don’t count on a soft landing. No feathers left.

169 comments ↓

#1 Victoria Real Estate Update on 05.18.17 at 7:01 pm

SAANICH EAST DETACHED SALES TANK 42% YEAR-OVER-YEAR IN APRIL

Not as bad as Oak Bay’s 71% year-over-year sales plunge in April, but it still represents a big red flag, telling locals that the market is nearing its peak.

Local realtors claimed Saanich East was one of those “new normal” areas where sales would skyrocket higher every month, setting new sales records year after year. They claimed that 2016 sales levels had become a permanent thing.

That sales crashed 42% from year-ago levels in Saanich East in April proves them wrong.

Local real estate “professionals” also claim that house prices in Victoria will never fall. That prediction will also be proven wrong, as Mr. Market inevitably takes control of prices (as always, no exact date specified).

APRIL: SAANICH EAST DETACHED SALES FALL 16% BELOW 5-YEAR AVERAGE

Buyers have clearly backed away from Saanich East’s detached market. This always happens with housing bubbles. First sales fall, then prices.

Realtors are working hard to direct the public’s attention away from the above sales facts and toward the local market conditions (supply and demand). This way they can convince buyers that if they don’t buy now they will “miss out”. It’s a simple strategy that can work rather well for some time, until it doesn’t.

MARKET CONDITIONS WILL CHANGE

The fact of the matter is, housing market conditions change and are never permanent. With a housing bubble, market conditions can change quickly from a seller’s market to a buyer’s market within a matter of weeks.

Think about what has happened in Toronto within the last month. A lot of sellers there know they have missed out on a hundred grand or more by trying to time the market perfectly. This is a common occurrence with housing bubbles. Listings can suddenly surge, leaving the peak of the market in the rear view mirror.

Market conditions will change in Victoria as well. We will have a buyer’s market (as always, no exact date specified).

HOW BIG IS VICTORIA’S HOUSING BUBBLE?

Victoria’s bubble price run-up is beyond massive when compared to a lot of housing bubbles that have formed in other countries.

Over the same period, incomes have posted gains amounting to only a fraction of the massive gains in house prices.

Victoria:
2000 to 2017: prices increased + 199%… (tripling, increasing by a factor of 3)

Compare with the following American cities (not all US cities had bubbles):

Dallas:
2000 to 2007: prices increased + 26%… (adding only a quarter)
2007 to 2009: lost 54% of those gains as prices fell 11%.

Denver:
2000 to 2006: prices increased + 38%… (adding less than a half)
2006 to 2009: lost 42% of those gains as prices fell 12%.

Seattle:
2000 to 2007: prices increased + 92%… (less than doubling)
2007 to 2012: lost 69% of those gains as prices fell 33%.

San Francisco:
2000 to 2006: prices increased + 116%… (more than doubling)
2006 to 2009: lost 84% of those gains as prices fell 42%.

The correlation: the higher the price run-up, the higher the percentage of gains lost.

No housing bubble escapes without a massive price correction.

#2 Tony on 05.18.17 at 7:05 pm

toronto1 on 05.18.17 at 1:01 pm
#92 Lefty nice charts!

Thats contagion from the HGC fiasco.

All bubbles follow the same premise, when times are good, credit is easy and available, when they start to deflate, credit becomes much harder to source. Same story in all housing bubbles- Ireland, Greece, Spain, US and on and on.

With credit contraction there is always lead time- this is it- stories are starting to emerge right now about some deals falling through due to banks valuations- that will be news but not for 3-4 months time.

Ease and availability of credit is what drives all RE, not location, country, postal code etc.. without easy access to huge credit there is no housing market.

Banks were screaming before because their quaints and models could not quantify the credit availability that lenders like HGC and others were supplying to the market at low low rates. BUT in the name of market share, they bent their rules too. Now its a different dynamic, no longer is market share relevant right now its about flight to safety.

In the GTA (and most likely all of Canada) there is a massive over supply of housing- the current population and earning capacity is just not there to support this over supply.

think about this for a second: Canada is at approx 70% home ownership now
how much of population is under 18 and not in the market? call it 10%
How much of the population is over 65 and not in the market? Call it 10%
How much of the population makes 40K or less median family income (its more then you think) call it 10%, there not in the market
How much of the population is on some type of permenant disability, welfare etc.. that are not in the market? call it 10%

Thats 40% of the population (no idea if these numbers are correct- but i would guess its pretty close)

Just like in the US, the over supply has to be absorbed by the market- this is a timely process and takes years to happen- this stock must be absorbed in real earning capacity dollars as with the coming credit crunch there will be no more “fake paper” available.

Whats the cost? who knows, even in toronto, were average family income is in the 70-80K range, at 5 -6 times income that is 400-450K range for an average home. long ways to go still……….

#3 Tony on 05.18.17 at 7:05 pm

https://rambus1.com/2017/05/17/oh-canada-a-cold-wind-blows-from-the-great-white-north/

#4 crdt on 05.18.17 at 7:09 pm

Oh my… A realtor at the school where I drop off my son tells me it is a supply issue here in Vancouver, no supply, no supply.. Surprise! Supply coming.. He could refer his clients to lovely Tar-on-toe. Wonder why Torana is moving quicker then Fancouver? Perhaps we are a bit more world classier, or perhaps the realtors have stronger cool-aid out here with Christie’s special sauce…

#5 Tony on 05.18.17 at 7:11 pm

I’ve heard the stories of buyers wanting out after they realize they were conned by shyster realtors. Overpaying for an asset thats set to vrash and crash hard.

#6 The Technical Analyst, CSTA, CPD on 05.18.17 at 7:12 pm

Realestate; so easy to buy when it’s going up, so hard to sell when it is going down.

The “hot potato”. No one wants to own it if you are going to lose on it.

Best of luck selling in a down market, been there, done that, it… SUCKS.

#7 NoName on 05.18.17 at 7:14 pm

From few yrs back

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

#8 rates vs capital on 05.18.17 at 7:15 pm

The bubble’s bursting because average families can no longer afford average houses, just like in Van.

———

Yes, the average family income of 75k in Vancouver cannot afford a home in the self-professed paradise. Of course, this has been the case for well over a half decade.

And yet no deluge of listings; no collapsing sales (watch May’s rebound); condos and townhouses on fire; a resurgence of foreign purchases; and a slow moving transition to the medieval times with rich house owning nobles and landed peasant serf renters subject to a near 0 percent vacancy rate, renovictions, skyrocketing rent, and fixed term leases.

Same thing in Victoria. Prices surging despite one of the lowest family incomes in Canada and a stale market for years. That is until 1.5 years ago…

Hmmmmm…whatever could be the driver?

I guess Vancouver, and increasingly BC, really is unique – a 13 year bull run and counting despite recessionary growth, near anemic population growth, static wages, rising rates, federal cooling measures, and a supposed clamp down on foreign capital through the BC Foreign Buyer’s tax.

For those who headed caution, and avoided buying in the ridiculously priced market, you just lost out on the absolute opportunity of a lifetime. Funny isn’t it – fiscal prudence has been totally penalized for years and yet people still grasp to the hope of crash. For that is their only salvation after sitting on the sidelines.

Talk about not taking your own destiny into your hands…..waiting, waiting, waiting….

Oh well, in less than a year, with rising rates, we will see if the rate theory holds – or whether another key variable is the driver of unaffordability.

#9 Boom's Go Bust on 05.18.17 at 7:18 pm

I live in Etobicoke and the beautiful homes on tree lined streets with for sale signs are growing in numbers with nothing moving. It as if the light got switched off. Because I have lived her for awhile I have seen the domestic speculators purchase homes, do crappy renovations and are now panicking. Houses that use to move in a day with no conditions are seen languishing on the market. The other day the words “price reduction” appeared on a listing and I thought to myself, oh how the tide has shifted. As one blog dog likes to write, happy housing crash everyone :-)

#10 waiting on the westcoast on 05.18.17 at 7:20 pm

It’s funny how the tipping point appears to be moving faster through the transition in Toronto… Maybe they are smarter than the the locals in Van. It would be ironic if Toronto actually pushed the Canadian RE market into a decline despite Vancouver peaking a year earlier.

Vancouverites definitely live in Vandulusia…

#11 Timmy on 05.18.17 at 7:21 pm

Average families haven’t been able to afford homes in Vancouver for over 20 years. They still can’t but prices haven’t really dropped significantly

#12 rates vs capital on 05.18.17 at 7:21 pm

#1 VREU

“Local real estate “professionals” also claim that house prices in Victoria will never fall. That prediction will also be proven wrong, as Mr. Market inevitably takes control of prices (as always, no exact date specified).
——

Young lady, you have appropriately moved from the ‘crash is just around the corner’ with last years prediction to ‘eventually the crash will come.’ Nice caveat.

I guess you realized that prices did not fall the supposed collapsing sale – but rather went much much higher!

Meanwhile the percentage of foreign buyers went up from 0.6% in 2015 to 4.6% in 2016 in Victoria – a seven fold increase. And even bigger increase in the CRD.

“About 6.3 per cent of transactions in the Capital Regional District in October involved foreign purchasers, according to the latest figures released by the province yesterday.

That’s up from about 3.5 per cent since the last report in September.

The Victoria area is now only second to Richmond, where 6.7 per cent of transactions involved foreign buyers. It’s also seeing higher foreign investment than Vancouver, which came in at 2.5 per cent.”

http://www.cbc.ca/news/canada/british-columbia/victoria-foreign-purchasers-1.3873015

And off course, what happens, prices in Victoria went up 23.5%

http://globalnews.ca/news/3196388/victoria-council-postpones-decision-on-foreign-buyer-tax-in-capital-region/

VREU, still waiting for the explanation as to why prices have gone up.

Have average family incomes spiked dramatically? Nope, Victoria still one of the lowest in Canada with anemic wage growth of 1%

Have rates dropped to attract more attention? Nope, rates are actually rising, and they have been low for 9 years, so did people just find out about the low rates and decide to jump in?

VREU is shrilling and hoping for a crash so she can move outside of her parent’s basement.

Sorry VREU, you need to go outside and see the influx of foreign capital as well as look at data. If you did the former, the change would be obvious…

Always look at the source of capital….

Oh and as for Toronto:

“Think about what has happened in Toronto within the last month. A lot of sellers there know they have missed out on a hundred grand or more by trying to time the market perfectly. This is a common occurrence with housing bubbles. Listings can suddenly surge, leaving the peak of the market in the rear view mirror.”

Lots and lots of head fakes to this market. This surge of listing is always supposed to herald the end of the market and then prices go up. Been this seasonal head fake since 2012 – you are just new here…

#13 ole Doberman on 05.18.17 at 7:23 pm

So the bigger question is why isnt this happening in Calgary?

#14 Mississauga is crashing! on 05.18.17 at 7:26 pm

Went to see my parents today (boomers – the wealthy kind) and they told me that on their street the last house that sold in March went for 1.8 million, now 2 similar (but nicer homes on the ravine) have been listed and are just sitting at 1.6 with no offers and crickets on open house days. My parents have been living there forever and are friends with the sellers and the sellers are getting scared because they are realizing that someone has turned the faucets off on FOMO. There seems to be No buyers, little showings, no offers on “offer night” just stone cold silence.

#15 HansG on 05.18.17 at 7:28 pm

CPPIB and diversity

http://www.theglobeandmail.com/report-on-business/cppib-posts-strong-gains-as-push-to-increase-investment-diversity-continues/article35045947/

#16 Lulu on 05.18.17 at 7:30 pm

I think the universal rent control killed it for a lots of speckers and investors, also mortgage frauder try to unload those gold mines all at the same time, of course they need to, because HCG is their mother, when mother is in trouble, they panic and rush to the exit, then listing surge in the SFH market and condos will follow.

This winter is gonna be so cold and long, oh btw, this year is our Great Country 150th Birthday, with all these bubbles popping, the government no need to buy any helium now. Save T2 a bit to balance his budget…. haha!!

#17 I'm Not Poloz on 05.18.17 at 7:31 pm

Oh no! Poloz will want to cut interest rates on May 24, 2017 because of Toronto!

These $100 Sir Robert Borden bills that I have stashed in my safe deposit box will only be worth $40-$45 US dollars when Poloz cuts interest rates!

Remember folks, Poloz wants a 15-cent Loonie to boost exports. He was upset in early 2016 when oil was at $26, because he wanted the Loonie at $0.50 at that time.

#18 Debtslavecreator on 05.18.17 at 7:31 pm

The Great Canadian Bezzle starts contracting
Sit back and watch the spectacle unfold
By next fall we might be buying 25-30% cheaper
Since when is middle class housing an investmemt ?
It’s shelter first and foremost

#19 Mauro on 05.18.17 at 7:31 pm

Garth, I think it is too soon to call correction or crash. To be honest, I see values going even higher once we get over this hump. Just like in 2009.

A detached home in GTA will never cost $599,999 ever EVER AGAIN! Nor will it in Barrie or Cambridge.

A 1 bedroom condo anywhere in GTA will never cost $295,000.

Theres still lots of money in the world to continue to buy up our homes. And why not? We are the safest cleanest most stable country in the world. So what if we only see the sun 3x a year!

Keep buying folks, I learned a long time ago prices for homes never come down. Even when they do they technically don’t.

bye for now.

#20 Poor Overpriced Milton on 05.18.17 at 7:32 pm

My brother who lives in Milton said that in March he was told that house could be listed for 1 million. In April, he was told $950,000, in May he was told he could probably list and sell for around $900,000. If this isn’t the start of the crash, I am not sure what is. I guess even those greedy scammers they call real estate agents are starting to realize the game is over. The fat lady has begun to sing!

#21 Oakville sucks on 05.18.17 at 7:34 pm

Mississauga is also the land of cell phone towers!

The homes near these towers will be the first to crash as people don’t want to live near one. Why would anyone want to be microwaved 24/7 living next or below one????

#22 Alex on 05.18.17 at 7:34 pm

416+905 sales Jan-Apr 2017 are UP 5% to 2016

Trump tearing NAFTA…hi didn’t it when he could, now on edge of impeachment he hardly will do it

Rated raising…big 5 just DROPPED them under 2.0%

For sure summer this year started in May due creasy activity before, but no way of 33% drop, especially in YoY basis. Even if, unlikely, let say Sep prices will be -33% to March, YoY it will be 5-10% still

#23 dontcallmeshirley on 05.18.17 at 7:35 pm

How does a seller collect on a damage judgement against a remorseful buyer who breaks a purchase agreement?

Of course a judge would award a judgement to a jilted seller, but that is a long way from collecting cash.

#24 AGuyInVancouver on 05.18.17 at 7:36 pm

A few of us has asked this over various posts, but no explanation has ever been advanced: Why didn’t Vancouver see the same explosion of inventory as Toronto (in either the run-up or cool-down)? Inventory was tight and remains so.

#25 Al on 05.18.17 at 7:39 pm

Non-Resident Buyers can get out of their purchase deals by walking away from their deposits.

Not necessarily. — Garth

#26 High Park On Ice on 05.18.17 at 7:42 pm

I live in Bloor West / High Park Area and nothing is moving here either. Plenty of for sale signs, plenty of listings that are “sitting” no action on offer nights, no action on open houses either. The winds certainly seem to be blowing in a different direction than months earlier, where things were gobbled up in a day. The buyers surely seem to have dried up here too!

#27 The dog has finally gone to sleep on 05.18.17 at 7:46 pm

Yes, it’s true in my neck of the GTA, plenty of things for sale, but no buyers! Where did they all go? So many “coming to market soon signs” but no one seems to care. I remember going to an open house in March and I was tripping over everyone, now, no one, except a few nosy neighbours like me. This ship has sailed folks!

#28 Smoking Man on 05.18.17 at 7:46 pm

Never fly near the sun unless you’re in an orange plasma flier or the mother ship.

#29 People Who Sold on 05.18.17 at 7:51 pm

Man, if your house was listed and sold in March, you are a rock star! Now things are different, the market is getting very soft and limp in the GTA. Time to put on your diapers, cause this is going to be a sh!t show.

#30 Sprawl on 05.18.17 at 7:52 pm

Well now hope the Green Belt stays intact. Like this here blog barked out, Supply& Demand had little to do with the cost of housing.

I’m thinking Brampton, Mississauga and Celadon might take a heavy hit. CMHC should have never waived credit criteria for new Canadians. It took advantage of them. I’m sure it was good corporate campaign contributions for the provincial liberals.

Wonder what the outcome will be? I’m guessing with the Canada-India Social Security Agreement, where years paid into the India pension plan count as CPP contributions. Some from India, out of despair and debt dread, will just go back. Collect their CPP payments there. Others will be trapped and resentful. It was fascinating watching the madness of the crowd.

Supported along the way with the real insight from this blog. I wonder how many folks, who have lived in their homes for years, have tapped out Equity Lines of Credit they’ve using to make ends meet? All the chaos brewing could have been avoid. With traditional lending criteria and a BIG dose of Trump Economics bring the jobs back.

Guess the appraiser had jumped out the helicopter. Word of the appraiser death still come. Followed by questions why and disbelief there’s no gold in that there real estate.

On a happier note. I sold my place two years ago. As an income property with a tenant. That would be me. Got the idea from here. My agent thought I was nuts. Worked out well.

#31 fancy_pants on 05.18.17 at 7:53 pm

…so maybe will will get back to ‘normal’ but, oh man, is it going to hurt

#32 Fuzzy Camel on 05.18.17 at 7:54 pm

This market still has legs, people are still way overpaying. You’ll see this thing drag on for another year, then the BoC will raise rates and crash it.

Top is in for sure here, next step is finding the bottom.

#33 Shortymac on 05.18.17 at 7:56 pm

Drop baby drop, the insanity had to end sometime. I can’t wait to finally be able to purchase something at a reasonable price and rate.

#34 Ex-Cowtown on 05.18.17 at 7:57 pm

“But many also felt trapped inside their wealth – since they couldn’t afford to buy their own house at market prices, let alone sell and move up.”

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

And that is where the danger lies. Most people fail to realize that housing is really just shelter and as such is an expense. Like food, clothing and dental bills. Somewhere along the line people were sold a bill of goods that high house prices were good for you. If that were true, then high food, clothing and dental bills should be good too. But they’re not.

#35 Quiet in Cottage Town on 05.18.17 at 7:58 pm

All is quiet in the north part of the Golden Horseshoe. “Investors” and amateur landlords use to be snapping up ski and play homes, but no longer. Where did all the buyers go? Me thinks, people are either debt exhausted or have awoken from this drunken mess we call the real estate market.

#36 Hmm on 05.18.17 at 8:00 pm

This is a blip people. The housing market won’t crash or decrease in value until rates go up. And they’re not going up anytime soon.

The amount of effort they’re doing to keep HCG propped up is enough to tell you that access to cheap credit will continue, and while there may be enough people reading this blog to get out while the money is good, this is just the tail end of the spring buying season.

My evidence? Prime rate is still 0.5%. Debt to Income could get up to 200% but as long as central banks are printing free money then housing will go up.

As soon as it cools down again (see: October), we’ll have another massive spree. I’m predicting a decrease in buyers over the summer while people go and live their lives, followed by a return to capitalist irrationality suggesting home equity growth is the only thing to live for, followed by crazy greed based borrowing.

#37 etobicoke bungalow on 05.18.17 at 8:01 pm

buddy of mine renoed an etobicoke bungalow off a shitty street. was hoping to get 1.3mil but ended up with 1.2 selling it during the week home trust took over much of the media. he probably could have gotten 1.3 the week before he said. lots of shitty unrenovated bungalows still going for a mill in etobicoke.. lots of listings but nothing crashing..

its funny to think that the goof who bought this stupid house spent almost 300K as a down payment and land transfer tax if he had 20% down. pretty much the purchase price of my Hamilton rentals lol.

#38 m212 on 05.18.17 at 8:04 pm

The plural of cul-de-sac is culs-de-sac.

Mine are more manly. — Garth

#39 conan on 05.18.17 at 8:05 pm

“New, universal rent controls make monthly losses on condos a virtual certainty” – Garth

Could you explain why? New tenants come in at market rates, the longer they stay the better IMHO.

#40 Nonplused on 05.18.17 at 8:07 pm

Well, things are very hard to predict, especially the future.

Calgary had a parabolic blow off in 2005-06 that the scale doesn’t do justice to given the magnitude of the Toronto and Vancouver lines more recently. There was a correction to follow, but as of today house prices are still holding in at almost $100,000 over the 2006 peak, despite the fact that nobody has a job.

http://www.chpc.biz/6-canadian-metros.html

Even Edmonton seems to have regained the previous highs or thereabout.

The guy who runs chpc.biz has been predicting a housing price correction for as long as Garth has, or nearly so. Unfortunately his charts do not back up the theory. Note that in this chart Calgary home prices went from about $280,000 average to a little over $500,000 in around 2 years, quite an increase. Then they fell a bit, (well, more than a bit it was about 20%) down to about $400,000, but they have been slowly rising ever since and are now higher.

Did actions taken by the BoC to alleviate banking exposure to Calgary and Edmonton mortgages eventually cause the craziness in Vancouver and Toronto? Hard to say. But normally a government solution to a problem is in and of itself the next larger problem so I would say “probably”.

Anyway, this chart shows that if you’d held through the 2008-09 correction until today you would be ahead a substantial amount even after realty fees. This is despite carbon taxes, increased income taxes, and a shut-down of our energy industry, the largest industry we have especially counting trickle down effects. Nobody is staying in a hotel in Fort Mac unless they are there to work, and nobody stays in a hotel in Medicine Hat unless their kid is playing in a hockey tournament, which they don’t pay for if they don’t have jobs.

#41 mitzerboy aka queencitykidd on 05.18.17 at 8:09 pm

happy may two four
all u dogs
have a great summer

#42 In T.O the Music has Stopped on 05.18.17 at 8:13 pm

I live near the Junction in Toronto (why I live here, I don’t know) any way. . .besides the terrible smog from cars and busses, the big thing I have noticed is all the new listings that have exploded. Yet, nothing is moving. It’s like this weird new world. Now I don’t really care, as I am mortgage free, but still it’s weird. At the beginning of the year, a for sale sign would go up and the next day a sold sign, but now it’s just for sale, for sale, for sale.

#43 Game Over on 05.18.17 at 8:22 pm

Could there be any legal recourse for buyers that are backing out because they were duped by some shady realtor?

That is why they need more transparency and tighter regulations on this whole process.

P.S. – “Sold 1000% over asking within 42 minutes.” That’s a good one..

#44 Paul on 05.18.17 at 8:22 pm

#20 Poor Overpriced Milton on 05.18.17 at 7:32 pm

My brother who lives in Milton said that in March he was told that house could be listed for 1 million. In April, he was told $950,000, in May he was told he could probably list and sell for around $900,000. If this isn’t the start of the crash, I am not sure what is. I guess even those greedy scammers they call real estate agents are starting to realize the game is over. The fat lady has begun to sing!
—————————————————————–
Maybe it’s your bother that’s greedy? Should have sold in stead of holding out for more.

#45 Brian Tuulos on 05.18.17 at 8:27 pm

DELETED

#46 Mark Baum on 05.18.17 at 8:28 pm

#19 Mauro on 05.18.17 at 7:31 pm
Garth, I think it is too soon to call correction or crash. To be honest, I see values going even higher once we get over this hump. Just like in 2009.

A detached home in GTA will never cost $599,999 ever EVER AGAIN! Nor will it in Barrie or Cambridge.

A 1 bedroom condo anywhere in GTA will never cost $295,000.

Theres still lots of money in the world to continue to buy up our homes. And why not? We are the safest cleanest most stable country in the world. So what if we only see the sun 3x a year!

Keep buying folks, I learned a long time ago prices for homes never come down. Even when they do they technically don’t.

bye for now.

******

I’ll find you a detached house in Cambridge for $599,999. Any extra between the sale price and $599.99k I get to keep, and if it costs more than that I will cover the difference. Let me know how to get in touch. I hear you are looking, thanks

#47 };-) aka Devil's Advocate on 05.18.17 at 8:29 pm

“So, the more houses cost, the greater the demand.” – Garth Turner

Veblen good. Defies logic… purely emotional.

#48 lala on 05.18.17 at 8:32 pm

Real Story. A bough a house for 1.5 mil. Same week A sold her house for 1.1 mil. The buyer got cold feet and claiming can’t get the mortgage. A listed the house for 1.1, 1.05, 990,000 with no luck so far. She is suing the buyer….but the problem is she doesn’t have the money for the new house she bough. House she bough for 1.5 is worth 1.4 mil.

#49 };-) aka Devil's Advocate on 05.18.17 at 8:32 pm

#24 AGuyInVancouver on 05.18.17 at 7:36 pm
A few of us has asked this over various posts, but no explanation has ever been advanced: Why didn’t Vancouver see the same explosion of inventory as Toronto (in either the run-up or cool-down)? Inventory was tight and remains so.

It’s an urbanization movement thing and it’s not just Vancouver or Toronto. It’s here in Kelowna and right across North America. Colleagues in the states are saying the same.

#50 Terrence on 05.18.17 at 8:45 pm

Diversification is another word for ” i dont know what the hell im doing”. ALL MARKETS DONT MOVE STRAIGHT UP PARABOLIC ALL THE TIME! They do all kinds of technical manouvers such as pull back, hit support levels, move sideways, and even make new highs, just to name a few tech moves.Eventually Garth will finally be right on a call, we will have a MAJOR CORRECTION , & then ,moving forward Rinse Wash & Repeat! Broken Clock Syndrom is alive & well on this blog

#51 DON on 05.18.17 at 8:48 pm

#24 AGuyInVancouver on 05.18.17 at 7:36 pm
A few of us has asked this over various posts, but no explanation has ever been advanced: Why didn’t Vancouver see the same explosion of inventory as Toronto (in either the run-up or cool-down)? Inventory was tight and remains so.
*****************8

Some blogs dogs have been noticing rental increases in Raincouver…maybe just maybe the locals are figuring on riding out the downturn or they just are too far gone and have their collective heads stuck in the sand.

Good reason now to ensure Critical Thinking is a yearly course from K – 12.

#52 Canada is a HOUSE OF FRAUD on 05.18.17 at 8:49 pm

What happened to HAM ? there is no HAM. It was a realtor lie. The truth it was Asian Canadians . It’s was gambling Asian Canadians that used to gamble at Niagara Falls fallsview casino. Now they gamble on RE. How did Canadians buy million dollar plus houses? MORTGAGE FRAUD. MORTGAGE FRAUD in CANADA is EPIC. It makes the US housing bubble look like a kitten vs the TIRGER housing bubble Ponzi scheme of Canada. If they would audit ALL mortgage loans over the past few years it would be a eye opener. Everyone in the industry knows this is 100% true. Now the Ponzi scheme is crashing down.

#53 Raging Ranter on 05.18.17 at 8:51 pm

@19 Mauro I learned a long time ago…

…says the 30-year-old man who still lives at home with his parents.

#54 I think I know something on 05.18.17 at 8:54 pm

It has all turned? Let me sum up all the stories as anecdotal observations. About three years ago, there were also some sentiment that TO RE was turning sour. I posted on this blog that one should buy when they need shelter regardless of the naysayers. Someone retorted, “why would anyone buy when they can smell blood on the street?”

I’m sure that poster thought that he could clearly see a downmarket in TO RE, but look what’s happened to prices in the last three years.

I still say, buy when you need shelter and forget all the negative nonsense.

No, buy when you can afford to buy. — Garth

#55 Fiendish Thingy on 05.18.17 at 8:54 pm

So, what about Vandalusia? When do you expect listings to swell here?

#56 Canada is a HOUSE OF FRAUD on 05.18.17 at 8:56 pm

Great pic garth. It’s realtors , mortgage brokers, and speculators trying to run out of the housing bubble before they get eaten alive. Many are beyond maxed out and face losing ALL their properties if they can not sell. Buyers would be smart to HALT all buying and watch the house of cards crumble to the ground. FRAUD is the ONLY reason why the bubble went so crazy. Without FRAUD……. C R A S H!!!!!!!!!!!!!!!!!!!!

#57 choptstix on 05.18.17 at 8:58 pm

good ole’ BC libs premiere Christy Clark getting a thumping from CHMC for the $37k first time owners’ loan program.
”BC Liberals’ Housing Plan Worsens Affordability Crisis: CMHC Head’
https://thetyee.ca/News/2017/05/18/BC-Liberals-Housing-Plan-Worsens-Crisis/

#58 OttawaMike on 05.18.17 at 9:02 pm

REIT still good Garth?

https://www.bloomberg.com/news/videos/2017-05-18/hit-bottom-on-home-capital-short-canadian-reits-video

You bet. Go ahead. Make the trade. — Garth

#59 april on 05.18.17 at 9:16 pm

#55 – No one is answering that specific question…not even Ross Kay who professes to be to the only one in Canada who knows how real estate really works. Also I hear condos are being bought up because people can no longer afford houses. True anyone, or realtor spin?

#60 Joseph R. on 05.18.17 at 9:21 pm

#37 };-) aka Devil’s Advocate on 05.18.17 at 8:29 pm
“So, the more houses cost, the greater the demand.” – Garth Turner

Veblen good. Defies logic… purely emotional.

———————————————–

Veblen goods are luxury goods that can be substituted for a lower good but the buyer refuses to do so: e.g. buying a Tom Ford dress shirt instead of a dress shirt from Mark’s.

The attraction of a Veblen good comes from the social status that only a luxury good can provide: the expensive it is, the more scares it becomes and therefore, the more valuable it is. People “in-the-know” (Lawyers, bankers, salesman, high-class women) will notice if you wear Tom Ford and will act accordingly. This is also known as the “snob effect”.

http://www.economicshelp.org/blog/1164/economics/veblen-goods/

That said, housing bubbles aren’t based on a “snob effect” but rather a bandwagon effect: Buy now or buy never! Price will only raise from here!

Consider how a man buying a Tom Ford Dress shirt behaves and compare that to a buyer of a downtown condo in Toronto.

Which one will sleep better at night?

#61 Fcufma on 05.18.17 at 9:24 pm

How to get out of a real estate deal.

All contracts allow the buyer to walk through the property just before closing and also state that the seller has to of maintained the property to the same standard. Just inspect the property and find something that you feel has not been maintained to the same standard.

Or better yet, go to the seller and tell them you will be doing this. They have a choice, let you out of the deal today without condition or let it fall apart just before closing.

That was funny. Never done it, have you? — Garth

#62 Robert White on 05.18.17 at 9:25 pm

Marc Cohodes has asserted that when CANADA’s housing bubble blows it will most assuredly crash more than 50% in terms of falsified evaluations.
Furthermore, when oil per barrel crashes more it will assist in the cratering of housing prices of Single Family Homes in Toronto & Vancouver. The Hegelian Death Spiral will continue motoring on down the road longer than the market can stay irrational, or you can stay solvent.

#63 Sash Toronto on 05.18.17 at 9:29 pm

Just give it up. I come and read this blog periodically over the years. I used to be brain washed that correction was coming in 2010 then 2012… since then prices have doubled and same speach and fear mongering. I bought a condo in 2015 and it’s gone up 50% in 2 years. Lots of buffer room even for a correction. Compare that to all other international cities, Toronto is a bargain on world scale. Yes markets have gone up crazy in last few years but demand is there. Waiting and hiding in your basement wasting money on rent is not a strategy. You will never save as much as the market is going up, most people on this blog are priced out and just whining about prices. Should of pulled the trigger, the scared get left out.

#64 Livin Large on 05.18.17 at 9:40 pm

“It’s the end of the world as we know it, it’s the end of the world as we know it, it’s the end of the world as we know it, and I feel fine”.

I bought my house in 1997. It was power of sale so a little off the appraised value. It was a house that served my needs well then as it does today. I paid it off in 14 years, 6 years ago. Never once in those 4 years of mortgage payments did payment (PI) ever increase.

So, my point? While I feel some compassion for the crazy couples afflicted with FOMO and addicted to house porn on HGTV, I’m not losing one minute of sleep over their collective plights. My house wasn’t an investment decision, it was a nice place to live when my daughter was growing up and I was tired of landlords with daughters who needed places to stay and their mommies giving them mine.

Maybe, the newly wed of every generation are destined to choosing to ignore history and therefor repeating it. When there are 175 hours of house porn every week I figure the glazed eyed moisters will be back in some form soon enough. For farmtoo many of them the “house” is surgically attachd to their egos and feelings of self worth and those are just too powerful emotions to resist for long.

There will be blood on the lawns and not a few marriages destroyed by all of this but alas, sooner rather than later the additiction will flare up again. After all, humans are humans and sadly predictable.

#65 neo on 05.18.17 at 9:42 pm

#20 Poor Overpriced Milton

So far in May less than one home is sold over a million per day. There are over 40 houses in Milton right now priced over a million in a town that only sells a couple hundred homes a month in total. Long story short. There is 30-40 days of inventory over a million. Listings are over 500 and last year this time it was 300.

#66 Joseph R. on 05.18.17 at 9:47 pm

#37 };-) aka Devil’s Advocate on 05.18.17 at 8:29 pm
“So, the more houses cost, the greater the demand.” – Garth Turner

Veblen good. Defies logic… purely emotional.

—————————————————-

I pressed submit too fast!

Remember, even in a housing boom, if you increase the price of your house above its market price, you would have more difficulty selling it than if you kept it a market price: Veblen goods do not behave that way.

However, If the demand curves shifts to the right, the market price can raise rapidly, which is what happened in Toronto.

Ergo, the law of demand still applies, even to a booming housing market and thus, housing are not a Veblen good.

#67 Cto on 05.18.17 at 9:47 pm

Hey sash!
You’re a big guy now you bought your condo.!
You say everyone on here is a bunch of whiners living in their parents basement.
Well let me tell you something I have a nice house in the Rouge probably valued in a million dollars! Most of my mortgage is paid down.
And I have a sneaky feeling that 99% of the others in this blog as well have nice houses with most of the mortgage paid down or at least a million bucks in the bank.
I have been smelling Something Fishy in the air around this city for quite some time, and will be the first to tell you that I think Toronto and Vancouver are most certainly headed for a crash due to speculation and poorly written mortgages.
You can justify your purchase all you want though….

#68 White Crock BC on 05.18.17 at 9:52 pm

I’m Not Poloz on 05.18.17 at 7:31 pm

Oh no! Poloz will want to cut interest rates on May 24, 2017 because of Toronto!

Remember folks, Poloz wants a 15-cent Loonie

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

I heard he wanted a ten cent Loonie and $20 cauliflower.

#69 Pete from St. Cesaire on 05.18.17 at 10:07 pm

Oakville sellers are getting scared because they are realizing that someone has turned the faucets off on FOMO
————————————————————-
Probably held on too long due to greed. Karma says “Meow-Mix is best served cold”.
I’m still a debt-free renter. I won’t be stepping up to the plate to save their retirements.

#70 Do you feel plucky, punk? on 05.18.17 at 10:36 pm

DELETED

#71 LifeXpert on 05.18.17 at 10:44 pm

My central Mississauga area is completely dead, listings exploding and sales are few in between, most if not all under asking.

#72 Brian on 05.18.17 at 10:50 pm

Thanks for taking the time to delete my YouTube link to a reputable video and putting my first and last name up. Keep your head in the sand on 604 RE. Interested in more of your anecdotes on what’s happening in Toronto.

The vid is the work of a person who will always be deleted here. You typed in your own name. — Garth

#73 Mississauga on 05.18.17 at 10:53 pm

3 houses on our street had the ‘for sale’ signs up. Two were gobbled up right away . The third is still up

The poor major banks have been collateral damage – those charts look terrible . Waiting for a bottom to form- just watching the free fall

#74 Pete on 05.18.17 at 10:54 pm

I think Marc Cohodes was right in saying Canadian housing price will fall 50% after the bubble burst. But not Toronto or Vancouver though. In the US housing crash, price dropped 35% nationally, but in Florida, Nevada and some part of California, price dropped 70%.

My estimate is that housing price will drop 70% in Toronto and Vancouver after the bubble burst.

#75 Dude on 05.18.17 at 11:07 pm

#63 sash

Dude,
Until you sell your box in the sky, it’s worth what you paid for and not much else. Secondly, no one’s whining about the prices. Many people are comfortable with what they have. Lastly, stop comparing Toronto to the rest of the world. Toronto doesn’t compare.

You said it yourself, “brainwashed”. Obviously, you are confused. Sit down, relax and don’t jump off your balcony.

#76 Smoking Man on 05.18.17 at 11:14 pm

A 3 month term of weirdness in the real estate market. When all the new listings don’t get their price. Off the market they will go.

Then back to bidding wars. The Herd is stupid.

I would have never sold if I didn’t destroy my carrier prospects by outing myself here in jack induced senceless rants.

I’m a logical bastard. We won’t realy know till Sept.

#77 guru on 05.18.17 at 11:27 pm

The hardest hit will be the suburbs…. i would not be surprised of 60% drops in the following regions within the next 2 years – Waterlooo, Guelph, Hamilton, Ancaster, Grimsby, Newmarket, Barrie, Whitby, Oshawa, Milton, Brampton. Anything outside of 30 mins drive from downtown Toronto will be the hardest hit. Just look at what happened in the USA during 2007/2008, Queens Creek AZ is a very good example where no real local economy will flatline the property values faster and harder than anywhere else.

#78 Smoking Man on 05.18.17 at 11:30 pm

Follow me on twitter dogs @SmokingMan

I’ll be live on perescope tomorrow from Seneca. My first live broad cast. There is Canada Party that they are hosting. I’ll be interviewing real canadians about real estate. Let’s see what the gamblers have to say.

Bounce, pulse night club. I’ll be showing off my dance moves. Ok that a lie.

Perhaps I’ll show you how to take down a cigarette to the filter in one drag.

Nictonites rule. Did you get your book yet. Apperantly not. But I’ve crack 100 sales. Only took 6 months.

#79 Bond Junkie on 05.18.17 at 11:36 pm

A tale of eight houses. 8 houses went on ‘sale’ on my street in TO west the day after Winnie poop decided to drop the hammer on SM. I admit, I was a little spooked given the homecap (now homtrt but I digress) 18s I owned on balance sheet went from $99 to $82 in just a little over 24hrs. Yeah I might have been in the CEOs office more than a couple of times that day. Anyhoo….

Two weeks later, everything is sold. No conditions, over ask, in most cases low 2s print. The only thing still sitting are the greedy sleezes trying to extract 3+ in a 2ish hood. Shame on you. No crash in the GTA, same old song until rates actually go up (which is never btw). Anyone look at bond yields this past week? Riiiiiiight.

-Bj

#80 Complicit on 05.18.17 at 11:37 pm

The real estate agents and bankers are complicit in the money laundering in Vandelusia. But these white collar crimes will do no jail time. Talk to the some poor shoplifter stealing to pay for school or misguided teen.

https://www.ted.com/talks/adam_foss_a_prosecutor_s_vision_for_a_better_justice_system

#81 Stockpicker on 05.18.17 at 11:40 pm

Here’s an idea. If everyone bought now, who votes Liberal , and hasnt yet , it would encourage Poloz to keep rates at emergency lows for years to come…..at least until the next election. This way the real estate prices could continue to explode forever. Get out there and buy buy buy.

#82 Victor on 05.18.17 at 11:40 pm

#19 Mauro on 05.18.17 at 7:31 pm
just checked not far from where I live – 1b – $299.900, pretty they will accept a $295K offer…
https://www.realtor.ca/Residential/Single-Family/18153209/309—15-MICHAEL-POWER-Place-South-Toronto-Ontario-M9A5G4-Islington-City-Centre-West

First time ever had a call today from Remax as a follow up after we were at an open house on Sat. Wed was an offer day. I told them call me if not sold and no offer. Yes, it is not sold and there was 0 offers. Asked them to send me a history when and for how much it was sold before. I may buy :)

#83 nnso on 05.18.17 at 11:40 pm

There will be No buyers only voltures..
The good buyers who obediently obey their wife and parents bought the homes already. Now rude, obnoxious voltures are the only buyers. If the seller wants to keep their pride they should rent their property.

#84 Life has consequences on 05.18.17 at 11:44 pm

Smokey,

here’s some Cornell to appreciate with your drunken earphones.

https://www.youtube.com/watch?v=IuUDRU9-HRk

RIP Chris

#85 Dude on 05.18.17 at 11:50 pm

#79 Bond Junkie

Dude, you are delusional. Have you taken your meds?
I live on your street and nothing sold. BTW, (BTW stands for “by the way”, just incase you hadn’t taken your meds). As I was sayin, BTW, dont jump off the curb, u might hurt yourself.

#86 Ken in Vancouver on 05.18.17 at 11:54 pm

Interesting: I see that Garth says 10,500 new listings in the Golden Triangle in the last 7 days. When I looked on Realtor.ca, I see that there have only been 543 new listings in the last 7 days. A curious number as when I checked this morning it was about 2,300 in the last 24 hours. How stupid do these people think we are? Must be a computer glitch. Unbelievable!

#87 Ronaldo on 05.19.17 at 12:05 am

#36 Hmm on 05.18.17 at 8:00 pm

This is a blip people. The housing market won’t crash or decrease in value until rates go up. And they’re not going up anytime soon.
—————————————————————–

We’re at the point where an increase in rates matters not. When prices rise to the point that houses are not affordable at zero interest, the gig is up. We’re going down. Prepare to bail.

#88 Ronaldo on 05.19.17 at 12:16 am

I still say, buy when you need shelter and forget all the negative nonsense.

No, buy when you can afford to buy. — Garth
——————————————————————
If a place is outrageously over priced like houses in To and Van, I wouldn’t even consider buying right now even if I could afford to. That would make me a greater fool.

#89 Vit on 05.19.17 at 12:22 am

Beijing population at 22 million in 2017. Cost of 1 sqft is $2600 CAD. Cost of 1 sqft in Toronto downtown $600-700 CAD. Are we overvalued ? and who of does 22 million doesnt want to come to Van or GTA ???

#90 conan on 05.19.17 at 12:31 am

RE #78 Smoking Man on 05.18.17 at 11:30 pm

I doubt that the Casino will will allow you to film inside. I would ask first, but that is not your style.

I may tune in just to see the take down by security. Oh wait, the Sens are on.

So question, are you a video slot machine player? I would find that humorous.

#91 Myra Andrews on 05.19.17 at 12:39 am

From the Vancouver realtor Paul Boenisch

New 179
Price Change 41
Sold 161
TI: 8586

#92 Karma on 05.19.17 at 1:34 am

#22 Alex on 05.18.17 at 7:34 pm
“416+905 sales Jan-Apr 2017 are UP 5% to 2016

Trump tearing NAFTA…hi didn’t it when he could, now on edge of impeachment he hardly will do it

Rated raising…big 5 just DROPPED them under 2.0%

For sure summer this year started in May due creasy activity before, but no way of 33% drop, especially in YoY basis. Even if, unlikely, let say Sep prices will be -33% to March, YoY it will be 5-10% still”

????????????????????????????????

1) Where did you see that the Big 5 banks dropped rates? Ratehub has the best 5-year fixed at 2.39% at HSBC. Best 5-year variable is 2.19% at HSBC.

2) If March was peak, and Sept was 33% below the peak of March, then it’s mathematically impossible for y/y (Sep17/Sept16) to be positive. Furthermore, 33% from peak would mean prices would have to rise 50% just to get back to the previous peak.

#93 Tony on 05.19.17 at 3:57 am

Just like in the card game Euchre with the left and right bower the two twin cities Mississauga and Brampton (left and right bower) are ground zero for the shadow mortgage lenders. With no more liar loans how are the residents going to get a mortgage in the future?

#94 Freedom First on 05.19.17 at 4:18 am

Signed a new lease a year ago for a luxury all amenities included high rise apartment on the edge of downtown, in a brand new tower in Alberta. 1year lease with 1 month free rent, and telus paying my cable, internet, and phone also free for 1year.

Today signed a 2 year lease with the 1st and 13th month’s rent also being free. No rent increase. Great management. No free Telus bill, through my lease, but Telus offered me a 50% off package of cable, internet, phone for 6 months, followed by the regular pricing for 18 months.
Never asked for anything, this is what Alberta is like now.

Also I only buy houses when the sellers are bent over, and I only sell houses when the buyers are bent over.

Usually works out that the Realtors end up pleading for a fee big enough to cover their fee when I am selling.

Has always ended up with everyone being happy with the transactions. Especially, of course, me.

I would be negligent in not looking after myself in the best way possible,as I am a single man with no wife or dependents and am solely responsible for my own well being, as no one cares if a single man ends up in dire straits, or even homeless.

This is all good though, as I would not want it any other way. Real men happily accept all responsibility for themselves in every way, especially for ensuring he never ends up being divorce raped by a wife with your kids, a marriage license, giving her a gun put to your head to do whatever she wants to you at any time, fully backed with all the power of the state.

I say this with no anger, I am simply stating the truth about our society. You don’t like or agree with what I wrote, you are either stupid, ignorant, or a man hater.

Freedom First
Master of Freedomonics

#95 Claire on 05.19.17 at 4:24 am

Vancouver may have been unaffordable for 20 years, but minimum $450K for a 3bed townhouse in Langley? Rent on a 3 bedroom house/townhouse is 2500 a month. Serious affordability issues in the burbs. And don’t give me any “families are loving the condo life” BS.

#96 Tony on 05.19.17 at 5:08 am

Re: #14 Mississauga is crashing! on 05.18.17 at 7:26 pm

No more mortgages available with the demise of the shadow lenders. Loan sharks charge 10 percent a week. Looks like the end of Mississauga. Even worse for Brampton. Like I said before the left and right bower Mississauga and Brampton.

#97 Tony on 05.19.17 at 5:28 am

Re: #40 Nonplused on 05.18.17 at 8:07 pm

Calgary peaked early in 2008, Edmonton in the summer of 2007. Resale condos, apartments and townhouses that would have fetched around $280,000 in 2007 in Edmonton now fetch half that or $140,000 ten years later. The exact same units.

#98 Wrk.dover on 05.19.17 at 6:13 am

#77 guru on 05.18.17 at 11:27 pm
The hardest hit will be the suburbs…. i would not be surprised of 60% drops in the following regions within the next 2 years – Waterlooo, Guelph, Hamilton, Ancaster, Grimsby, Newmarket, Barrie, Whitby, Oshawa, Milton, Brampton. Anything outside of 30 mins drive from downtown Toronto will be the hardest hit. Just look at what happened in the USA during 2007/2008, Queens Creek AZ is a very good example where no real local economy will flatline the property values faster and harder than anywhere else.

——————————————-

That Queens Creek you know so much about is Queen Creek with out the S. This is the second time I saw the mistake printed here.

#99 Danny Sadiqika on 05.19.17 at 6:15 am

Canada 10 and 30 year bond yield is 1.44%, 2.07%. Everyone says rates will rise but they keep falling more and more.

What gives!

#100 I agree Garth... on 05.19.17 at 6:58 am

End of summer, the dung hits the fan.

416 et. al. RE IS the Cdn. GDP now. That gone plus external shocks for sure to come such as NAFTA = recession. In Canada they come with job losses. Not even the YVR RE cult can weather that as in no money coming in…sell at any price or eat cat food.

It will be ugly by September.

#101 Smoking Man on 05.19.17 at 7:34 am

#90 conan on 05.19.17 at 12:31 am
RE #78 Smoking Man on 05.18.17 at 11:30 pm

I doubt that the Casino will will allow you to film inside. I would ask first, but that is not your style.

I may tune in just to see the take down by security. Oh wait, the Sens are on.

So question, are you a video slot machine player? I would find that humorous.
…..

Camara on in shirt pocket. May just be audio. Let’s see how tanked, or brave I get.

#102 Smoking Man on 05.19.17 at 7:44 am

#79 Bond Junkie on 05.18.17 at 11:36 pm
A tale of eight houses. 8 houses went on ‘sale’ on my street in TO west the day after Winnie poop decided to drop the hammer on SM. I admit, I was a little spooked given the homecap (now homtrt but I digress) 18s I owned on balance sheet went from $99 to $82 in just a little over 24hrs. Yeah I might have been in the CEOs office more than a couple of times that day. Anyhoo….

Two weeks later, everything is sold. No conditions, over ask, in most cases low 2s print. The only thing still sitting are the greedy sleezes trying to extract 3+ in a 2ish hood. Shame on you. No crash in the GTA, same old song until rates actually go up (which is never btw). Anyone look at bond yields this past week? Riiiiiiight.

-Bj
……
Wow on your 18s nerves of steel. Let me give you some advice for working downtown.

Get up to speed on pronouns, understand Cultural Appropriation. Participate in all LGBQT events and whatever new letter gets attached to that Acronym.
Never use the word that denotes how British people refer to a cigarette. Look at our downed blue jay.

Toss in a little self-loathing, check your privilege and It won’t matter what your P&L is.

Results don’t matter anymore, everyone gets a trophy if they can conceal their WTF face, smile and on LinkedIn tell the world how wonderful things are.

I’ve chosen a different path. Cut and Run.

#103 Wrk.dover on 05.19.17 at 7:53 am

#193 Mark Baum on 05.18.17 at 2:46 pm
$120,000 Family Income ($60k earner x 2)
————————————————————
$7568 Take Home Pay/Mo (Not taking into account insurance plans)

Monthly Expenses
-$3083.71: Mortgage ($1.2 Million Home – $500k Down, $700k Mortgage @ 2.35%, 25 yr amortization)
-$1030: Other housing costs
-$400 Property Tax
-$100 Insurance
-$200 Hydro
-$80 Gas
-$150 Internet + Cable
-$100 Maintenance
-$1400: 2 Vehicles ($450 Finance/maintenance + $150 Gas + $100 Insurance x 2)
-$1400: Childcare (2 Kids: $1000 Full + $400 after school)
-$150: Cell phone x 2
-$1000: Food
-$100: Essentials/Toiletries
-$200: Clothing
-$0: No fitness/sports/extracurriculars
-$0: No savings
-$0: No emergency/miscellaneous
-$0: No vacations

$8363.71 Expenses/Mo

—————————————-

Here are my numbers,

$3900 Take Home Pay/Mo (Not taking into account insurance plans) 600 OAS 1000 CPP 2300 DBP

Monthly Expenses
-$0: Mortgage

-$100 Property Tax
-$130 Insurance house guest house garages contents
-$80 Hydro, solar hot water supplements this
-$0 Gas wood heat salvage and trimmings from back 40
-$160 Internet + Cable
-$400 Maintenance mostly upgrades no labour
-$160: 4 Vehicles registered and insured and heavily maintained, only one winter driven and sporadically
-$110 gasoline
-$100 landline, no cells no devices
-$300: Food equal amount grown
-$100 eating out
-$0 : Essentials/Toiletries included at grocery store
-$40: Clothing thrift but lots of new foot wear
-$0: No fitness/sports/extracurriculars
-$1000: TSFA savings
-$0: No emergency/miscellaneous
-$1000: vacations
-$50 beer making supplies and hard liquor

$3855 total

Not exactly apple to apple comparison, because no kids, no debt, and not GTA, but this budget has a 10 year track record, the upper one can’t be sustained.

#104 Smoking Man on 05.19.17 at 8:05 am

My Twitter Followers Income. Greater Fool has great reach.

Household income categories
Income category % of audience
$250,000+ 18%
$200,000 – $249,999 18%
$175,000 – $199,999 18%
$150,000 – $174,999 18%
$75,000 – $99,999 16%

#105 traderJim on 05.19.17 at 8:12 am

Local Muskoka paper has an article today on how people who won the housing lottery in TO are now driving up prices here:

https://www.muskokaregion.com/news-story/7312155-southern-ontario-push-making-it-hard-for-locals-to-own-muskoka-home/

I have heard this sentiment first hand from a couple of locals.

Since I am one of the TO refugees I now know how Chinese dudes feel.

Local council considering a 15% tax on Torontonians.

#106 New to all this on 05.19.17 at 8:19 am

What about in Ottawa? And other cities not close to toronto commute…?

#107 maxx on 05.19.17 at 8:20 am

…………”Trump tears up NAFTA”………….

Enjoy the festivities of Canada’s 150th this summer, because this fall will be rife with “ecotainment” given fallout from the trade agreement hitting msm and airwaves filled with incredulous rants.

#108 crowdedelevatorfartz on 05.19.17 at 8:28 am

@#53 Raging Ranter

“@19 Mauro I learned a long time ago…
…says the 30-year-old man who still lives at home with his parents…..”

*******

Actually , I believe he said he was 37 and livin large with Momma and Poppa and ready to jump into the real estate market with 400k ….to build up a dowry for the future Mrs Mauro….but….. point taken.

#109 crowdedelevatorfartz on 05.19.17 at 8:30 am

@# 100 I Agree Garth

Ladies and Gentlemen…. the bandwagon is now officially….full.

#110 Really?! on 05.19.17 at 8:32 am

#38 m212 on 05.18.17 at 8:04 pm
The plural of cul-de-sac is culs-de-sac.

Mine are more manly. — Garth

Talk about being a cul.

#111 Xbox Economist on 05.19.17 at 8:52 am

“China is worried about the recent stock market and bond market troubles, as well as capital outflow – money leaving the country as the economy slows down. That’s people deciding they would rather take the risk and buy a property in Vancouver than keep their money in China.”

What’s funny is that this story isn’t even about housing.

http://www.bbc.com/news/business-39971725

#112 Vit on 05.19.17 at 8:56 am

Over the past thirty years, increases in Canadian mortgage rates have not tended to trigger a decrease in houses prices. In fact, more often than not the reverse is true.
From 1980-2010 there were 156 instances where the five-year residential mortgage rate increased over the prior month, and in 97 of these cases, house prices increased two months later. That means that 62% of the time, increasing mortgage rates corresponded with higher pricing. I also wondered what happened to average prices when rates rose precipitously, so I looked at cases where month-over-month rate increases were greater than 5% (this happened in only 22 of the 365 months observed). To my surprise, in 13 of those 22 months there was still an increase in average house prices two months hence. So, even in cases where rates rose dramatically, the odds were still better than 50% that they coincided with rising house .

This is plagiarized from a web site authored by “Dave the Mortgage Broker”, printed here without attribution. Here is the reference. You are now banned from this site. – Garth

#113 Vit on 05.19.17 at 8:56 am

HISTORY
Re. housing prises and Federal fund rates .
In US in 2004 rate was 1% and climbed to 5.2% in 2007 . That’s when subprime mortgage holders could not refinance because monthly payments just doubled and the rest is a history .
In Canada 1987 rate was 10% and was climbing to 15% in 1990 , the same time home prices in Toronto
were growing 30% annually . For the next 5 years prices declined -30-40% despite declining interest rates only 5% buy 1997.
If interest rate goes up its stimulate people to buy homes because cost of borrowing will be higher next year and we just at beginning of this process.

#114 maxx on 05.19.17 at 9:05 am

#12 rates vs capital on 05.18.17 at 7:21 pm

Oh yes, the old foreign buyers are going to save, support and, increase prices refrain.

“Head fakes” have run their course on this mess. Some of the sharpest analysts are shorting the Canadian market.

With good reason – fundamentals (hello!!!!!!) don’t support these asinine re prices.

Prices are sticky for the moment only because we have a huge backlog of fools who spent too much buying at insane prices, then pouring additional wads of cash for “improvements” for their “investments”.

They want their money back. Queue Woody Woodpecker’s laughter.

Wait out the greater fools I say.

The re casino just took a huge dump on Canadian re.

#115 Rob Fortyyy on 05.19.17 at 9:10 am

#103 Wrk.dover on 05.19.17 at 7:53 am

Your budget keeps you alive but I’d hardly say that you’re living.

#116 Eks dee Sipal on 05.19.17 at 9:10 am

Well, I think it’s time I chimed in again…

So when will you all realize I am right about Trump aka Ron Masak (yes he’s just an actor) which would explain all the stupidity and drama that occupies your time these days. Why do you think none of what is going on in Washington makes sense? Because all news is fake news. Get it yet? They make it up as they go.

Now, on to housing. Again, when the 50-80% price “correction” happens, I won’t say I told you so. Nah, I probably will. Still some disbelievers around here. Even the intelligent ones think only a 30% correction will occur. I guess you’re just going to have to learn the hard way, that a single detached SFH anywhere in Canada should not cost more than 300K. And also that the CRA can’t wait to get their hands on you if you’ve profited in the last 7 years on housing. Did you really think it was going to be that easy? (Evil laugh)

#117 Pete on 05.19.17 at 9:40 am

Someone was talking about Beijing has 22 million people and apartments are much more expensive than Toronto. Someone so fantasized what if these people want to buy cheaper apartments in Toronto.

However, 90% of those 22 million make less than minimum wage in Canada and 90% of those apartments are owned by communist officials. Chinese newspaper often report that some “corrupt” official owns 100+ properties.

#118 Still going on 05.19.17 at 9:42 am

Client of mine yesterday tells me she called a realtor to sell her house in Mississauga, wants to downsize, realtor tells her not to sell now as there are too many houses on the market and to buy 1’st, as it’s a good time to buy. Client is not listing, don’t know if she will buy or not. Talk about control.

#119 Dave from Kincardine on 05.19.17 at 9:51 am

Housing bust, it saddens me that this is happening. When 2008 melted, the US the head lines were that real estate made up only 5% of the US economy, so only a small portion. Collapsing real estate ended up taking down the banks, car industry, housing industry, brokerages, and almost the federal reserve. Danger Danger Canada. Read your history, think about the double edged sword of leverage.

#120 bam on 05.19.17 at 9:54 am

Lets see what happens when trump is refused a debt ceiling increase. buckle up. Barry doubled the debt load but he was a puppet for the global elite. the resistance against Trump is simply he refuses to tow that line and the media controlled by the same global leftist elite are pissed!

One another note, is Barry still with Michael? the leftist media will never tell, too busy bullying a POTUS who is not attached to strings

#121 Another Deckchair on 05.19.17 at 9:58 am

Here are my numbers for the last year. (2 people, own home)

Autos $280.41 4.07%
Consumables $1234.52 17.90%
Finance Costs $101.58 1.47%
Gifts $810.34 11.75%
House $1093.57 15.86%
Insurance $227.40 3.30%
Lifestyle $1009.68 14.64%
Medical $278.71 4.04%
Personal $525.42 7.62%
Pets $432.02 6.26%
Utilities $445.05 4.65%
Vacation $449.22 6.51%
“other” 0.11% (business related, but not expensed yet)

Monthly average $6,895.83

We track a bunch of categories that get distilled into the above numbers.

House taxes – high mill rate here – wish I had the mill rate of Toronto! (lucky sods)

Income? Never mind, but we seem to live on less than half of what we make.

We don’t particularly watch what we spend, so there is some fluff-stuff in there.

#122 Calgary Rip Off on 05.19.17 at 10:08 am

#40 Nonplused There was a correction to follow, but as of today house prices are still holding in at almost $100,000 over the 2006 peak, despite the fact that nobody has a job.

Very accurate. Yes Calgary housing is still the biggest rip off. The entire city is an overpriced joke. As soon as I have reasonable money it will be time to escape the claustrophobia that is northern Calgary.

Why housing is Double its true value is because people still pay it, and rent is just as much if not more expensive. $2000/month for a house that really is $180K but in the market $500K? Total rip off.

#123 Mortgage Fraud on 05.19.17 at 10:09 am

“Toronto market turned on its head as flood of listings overwhelms buyers”

Figures from the Toronto Real Estate Board show that new listings surged by 33.6 per cent in April compared with April, 2016. That compares with sales in the earlier part of the spring when listings had plummeted 50 per cent from the same time last year.

https://www.theglobeandmail.com/real-estate/toronto/toronto-market-turned-on-its-head-as-flood-of-listings-overwhelms-buyers/article35015919/

#124 rainclouds on 05.19.17 at 10:15 am

Harbinger?

http://vancouversun.com/news/local-news/vancouver-developer-banned-for-fraud

#125 Spartan on 05.19.17 at 10:27 am

Here’s mine.

Take home $3800 approx.
Rent 1-bed lakeview $900
Cell $28
No internet (free wifi, library)
No real estate
No cable (24+ free channels by antenna)
Car insurance $140
Gas $100
Car maintenance $100
Food $800
Girlfriend $100
Fitness pass (city) $25
Other $100

Savings up to $1500

#126 TortyPapa on 05.19.17 at 10:31 am

I think the coming credit bubble in China will play a major impact in the markets of Vancouver and Tortonto. Even though foreign money accounts for a small percentage of sales, it might be the tipping point if China goes to the extra effort to stem cash from exiting the country.

#127 Lee on 05.19.17 at 10:36 am

#115,

On your CRA point, for smart people, trust me, it is that easy. As for a 30% drop even, you’re a dreamer. It won’t be long before JT has 500,000 newcomers coming to Canada every year. They have to live somewhere. And even if they don’t buy, some landlord has to own the house they live in.

#128 Sir James on 05.19.17 at 10:50 am

My old man once told me that real estate didn’t really crash in the 1980’s, it was just that one day everything stopped. And then when things started moving again it was a different world.

#129 Lost in Oakville on 05.19.17 at 10:51 am

“spidery web of soulless, tree-deprived cul-de-sacs”

Excellent description of Mississauga–and a fitting description for Brampton, Milton and Burlington as well.

#130 IHCTD9 on 05.19.17 at 11:05 am

#193 Mark Baum on 05.18.17 at 2:46 pm

So do I have this right? For a family with $120k combined income to live a very basic lifestyle, in an average detached home – with a 40%+ down payment, in GTA suburbs, they would be at best (I am sure I’m also missing some expenses) net -$795.71/Mo at record low interest levels……..
____________________________________

This looks pretty accurate to me, probably no savings at all either. You can see where all the money goes – ie. line#1. Here are my numbers to compare , with almost the exact same income but in small town Ontario instead of the GTA:

$7200.00 Take Home Pay/Mo

Monthly Expenses

$0.00: Mortgage Paid off. Payments ranged from 1200.00/month in the beginning to 500.00/month at the end. We put about 12K down on 123K purchase price. Now assessed at approx. 280K, I might get a little more if sold maybe.

Monthly Expenses

-$125 Heat
-$200 Property Tax
-$110 Insurance
-$200 Hydro
-$50 Internet
-$50 Maintenance
-$700: 2 Vehicles (gas/insurance/maintenance/stickers)
-$2100: private school tuition
-$50: land line phone
-$600: Food (2 adults, 2 teenaged boys)
-$100: Essentials/Toiletries
-$100: Clothing
-$100: extracurricular stuff for kids
-$300 emergency/miscellaneous
-$100 vacations ( a couple road trips per year)
-$65 2 ATV + 1 Motor cycle insurance

$6165.00 Expenses/Mo. “Surplus” 1035.00/mo.

Looking at the numbers, regular expenses are pretty comparable. But even though I’m shelling out for private school tuition, we’re still in much better shape despite making less money per month.

Why? Looks like it’s because we have no dumb car payments, and no bloated mortgage payment. Also I no longer need child care which is a big help (was ~8-900.00/month in early 2000’s).

What is unseen and unmentioned in the above comparison is the ability for past present and future funding of investment, of an E-fund, and funding a little fun too. Our lightweight mortgage payments have always allowed the filling of investment accounts since day 1. We have built our financial security while paying for the house doing both at the same time. Today we maintain a 25-30K E-fund, and have built a portfolio that will just slip into the 7 figures if all goes well.

The GTA is a rat race and an eventual sink hole for most recent new residents. I’ve said it many times – if you want to own a sfd, you’re better off flipping burgers for minimum wage in Tweed, than you are trying to own RE in the GTA on a 100K salary.

#131 Damifino on 05.19.17 at 11:18 am

Here’s what I’m thinking:

The Americans have installed an irrational actor in the executive branch with full control of the military and a whimsical penchant for cooking up self-contradictory foreign policies on a daily basis. Even his own staff haven’t the slightest idea what he might do next. To suggest he’s monumentally inept is far too charitable.

What to do? Keep our noses to the grindstone, balance and diversify those portfolios, then hunker down in the hopes the whole circus will clear out of Washington before something really serious happens?

Indeed, what else can we do? But I’m not holding my breath, nor do I sleep too well these days.

#132 nubbers on 05.19.17 at 11:24 am

Mostly, I have confined myself to reading about Toronto house prices here. However now that I actually look for myself on Realtor.com, at areas that I am familiar with, I find myself thinking ‘Really? Can I have what (some of) you have been smoking?’.

It’s a long, long way down from here. Those of you with high LTV have my sympathy, especially those of you too young to remember the last crash. Been there, done that.

#133 For those about to flop... on 05.19.17 at 11:58 am

Here’s one for the bored people on the blog counting down the clock to the weekend.

Have a good one…

M42BC

The Best & Worst Paying Jobs of America by State

https://howmuch.net

“When choosing a career path, Americans often gravitate towards professions and locations that offer the highest pay. However, not all jobs or places offer the same benefits,as far as wages go. The two maps found below detail the highest and lowest paying professions in each state.”

Click on the link to view the maps.

#134 Ole Doberman on 05.19.17 at 12:07 pm

#115 Eks dee Sipal on 05.19.17 at 9:10 am

Well, I think it’s time I chimed in again…

So when will you all realize I am right about Trump aka Ron Masak (yes he’s just an actor) which would explain all the stupidity and drama that occupies your time these days. Why do you think none of what is going on in Washington makes sense? Because all news is fake news. Get it yet? They make it up as they go.

Now, on to housing. Again, when the 50-80% price “correction” happens, I won’t say I told you so. Nah, I probably will. Still some disbelievers around here. Even the intelligent ones think only a 30% correction will occur. I guess you’re just going to have to learn the hard way, that a single detached SFH anywhere in Canada should not cost more than 300K. And also that the CRA can’t wait to get their hands on you if you’ve profited in the last 7 years on housing. Did you really think it was going to be that easy? (Evil laugh)
——————————————————-
Bingo.

Plus banks can’t wait for rates to rise so they can start collecting foreclosures – knowing that CMHC will pay the difference

it’s an evil world.

#135 Wrk.dover on 05.19.17 at 12:16 pm

#114 Rob Fortyyy on 05.19.17 at 9:10 am
#103 Wrk.dover on 05.19.17 at 7:53 am

Your budget keeps you alive but I’d hardly say that you’re living.

————————————

I am not here to brag, but I am here to point out that there is more to life than waiting in line at GTA intersections to generate income.

I suppose that you have never spent any time on a large seaside acreage with a compound that includes a green house, cabinet shop, mechanic shop, band saw mill, a mile of private road, guest house and so on plus a fleet of vehicles at your beck and call. Let me just tell you that it really is nice being heated to 80 degrees in the house all winter by a supply of fuel that is stockpiled in doors for two years ahead, while there are three large chest freezers in the garage full of fruits and vegetables and having a country wife that enthusiastically cranks out pies and the like on a regular basis. The well we have tested as commercially bottleable, the air is not directly out of a tailpipe and it is deathly quiet, all night.

You just suppose that I am not living because there is no money in the budget to clamp a cell phone to my package, like a radio controlled dog collar.

The only time I am not living is while at Pearson connecting to Jamaica for a four star all inclusive a few times every winter.

But go ahead, assume I live as if under house arrest, you wouldn’t like this life anyhow spending weeks at a time on property, because you would have to do all of your own lifting. Enjoy the treadmill though, at your strip mall health club

Yeah Buddy, I have had a long hard life!

#136 Bond Junkie on 05.19.17 at 12:35 pm

SM

Can’t say its been a great month. Plenty of contagion into EQB/MCAP/FNCN/MICCN luckily I was flat all that dog$ht. The bigger problem is the 10bps on bank senior.

LOL to pronouns and the priviledge part was easy since I’ve never had any. Gotta play along, it’s just too good to give up.

To the Duuuuuude. Dude, I wish I was delusional. Shrooms have just never been the same since the early uni days. Talk to me next spring. In the meantime, I’ll be plenty well medicated on that sweet, sweet nectar in the green and brown bottles. Feel free to drop by anytime for a nightcap, we don’t bite.

-Bj

#137 Ponzius Pilatus on 05.19.17 at 12:42 pm

#130 Damifino on 05.19.17 at 11:18 am
Here’s what I’m thinking:

The Americans have installed an irrational actor in the executive branch with full control of the military and a whimsical penchant for cooking up self-contradictory foreign policies on a daily basis. Even his own staff haven’t the slightest idea what he might do next. To suggest he’s monumentally inept is far too charitable.

What to do? Keep our noses to the grindstone, balance and diversify those portfolios, then hunker down in the hopes the whole circus will clear out of Washington before something really serious happens?

Indeed, what else can we do? But I’m not holding my breath, nor do I sleep too well these days.
—————-
Too much money and not sleeping well.
This is the side that no one talkes about.
At least on worry the homeless don’t have.

#138 Ponzius Pilatus on 05.19.17 at 12:45 pm

#130
by the way, the “irrational actor” was Ronald Regan.
That guy scared me much more than Trump.

#139 jess on 05.19.17 at 12:58 pm

#80 Complicit on 05.18.17 at 11:37 pm

“raiding russian style”
http://www.reiderstvo.org/

https://www.documentcloud.org/documents/3522745-PPF-Management-LLC-v-OJSC-Sberbank-of-Russia.html

Sometimes, the lawsuit says, the defendants “identified” companies that would win an auction “days before they had even conducted the auction.”
Marc E. Kasowitz is representing OJSC Sberbank of Russia, which is accused in US federal court of conspiring with granite company executives — including Russia’s former minister of economy and trade — in what the plaintiffs say amounts to a “textbook case of Russian corporate raiding.”

=======
Dillon worked with the Trump Organization to develop plans for the organization’s future and addressed reporters in January at a New York news conference before Trump’s inauguration. Her law firm was honoured by Chambers & Partners’ 2016 Chambers Europe guide as Russia Law Firm of the Year.
===================

FBI director ?
2013 – In June, former U.S. Senator, Joe Lieberman, joined the firm as Senior Counsel[14] and his former Senate Chief of Staff, Clarine Nardi Riddle launched a Government Affairs branch of the company in Washington D.C.[15]
http://www.kasowitz.com/senator-joseph-lieberman-joins-kasowitz-06-06-20131/

#140 Dave on 05.19.17 at 1:04 pm

A realtor in the Young and Eglinton area just called me. I had put my contact info when I walked into a sale 2 years ago. Asked if I was looking to buy or sell. He told me that the market has slowed down. I’m surprised… this is the hottest time of the year. Imagine that… the guy is going two years back in his list of leads.

#141 Yeah on 05.19.17 at 1:08 pm

Nice Article. Explains every aspect from buyers and sellers point of view in the confused market.

Advise should be wait, read selective articles/blogs and enjoy.

https://www.theglobeandmail.com/real-estate/toronto/toronto-market-turned-on-its-head-as-flood-of-listings-overwhelms-buyers/article35015919/

#142 cramar on 05.19.17 at 1:24 pm

#129 IHCTD9 on 05.19.17 at 11:05 am

The GTA is a rat race and an eventual sink hole for most recent new residents. I’ve said it many times – if you want to own a sfd, you’re better off flipping burgers for minimum wage in Tweed, than you are trying to own RE in the GTA on a 100K salary.

————–

That makes two of us! As I have said many times, if one wants to own a SFD that bad, then MOVE out of the GTA to small-town Ont. where a house is 1/4 the price.

#143 Tony on 05.19.17 at 1:38 pm

Re: #129 IHCTD9 on 05.19.17 at 11:05 am

He forgot tips, donations and tax installment payments.

#144 AK on 05.19.17 at 1:54 pm

New home buyers want answers after builder cancels sales in Georgina

#145 jess on 05.19.17 at 1:54 pm

One of the highest ranking officials in the Australian Tax Office will appear in court for allegedly abusing his position by accessing information for his son
=========
Gareth Hutchens

Friday 19 May 2017 01.36 BST
Last modified on Friday 19 May 2017 01.43 BST

==========================
Plutus ATO fraud probe: wages at up to nine government agencies affected

Plutus Payroll is at the centre of an alleged $165m tax fraud, one of the biggest white-collar investigations in Australian history. Ten people were arrested on Thursday following dramatic raids across Sydney.

Two of those arrested were 30-year-old Adam Cranston and his 24-year-old sister, Lauren, the son and daughter of Australian Taxation Office deputy commissioner Michael Cranston.

https://www.theguardian.com/australia-news/2017/may/19/plutus-ato-probe-wages-at-up-to-nine-government-agencies-affected

#146 AK on 05.19.17 at 2:08 pm

New home buyers want answers after builder cancels sales in Georgina

#147 Jib Halyard on 05.19.17 at 2:15 pm

Glad to be missing out on all this.
My one saving grace has not been my brains, but simply being afflicted by the opposite of FOMO: FOBSHIT (Fear Of Being Stuck Here In Toronto). Thank god for that…

#148 Stan Broock on 05.19.17 at 2:32 pm

Move of all my liquid assets to Euro proved to be a very good idea.

http://www.zerohedge.com/news/2017-05-19/ex-goldman-banker-taking-over-fed-boes-carney-spotted-white-house

#149 A Reply to #109 Really?! on 05.19.17 at 2:33 pm

#38 m212 on 05.18.17 at 8:04 pm

The plural of cul-de-sac is culs-de-sac.

Mine are more manly. — Garth

“Talk about being a cul.”

Okay, now you’re just being rude.

According to Merriam-Webster, cul-de-sacs is an acceptable alternative spelling.

https://www.merriam-webster.com/dictionary/cul-de-sac

#150 WelcometoSlurrey on 05.19.17 at 2:38 pm

#129 The GTA is a rat race and an eventual sink hole for most recent new residents. I’ve said it many times – if you want to own a sfd, you’re better off flipping burgers for minimum wage in Tweed, than you are trying to own RE in the GTA on a 100K salary.

————–

#141 That makes two of us! As I have said many times, if one wants to own a SFD that bad, then MOVE out of the GTA to small-town Ont. where a house is 1/4 the price.
———–
Make that 3, but instead of GTA insert YVR. It is truly the rat race down here. Bigger homes, fancier cars, “material items ” purses, clothing, jewellery etc. …….
No one seems to like time or freedom in YVR. I know many who own posh homes, only to want nicer ones ? The chase never ends. If i was a lone wolf I’d pack up and leave. But family decisions are just that…. family ones. So in the maze i stay …..

#151 Old Dog on 05.19.17 at 2:58 pm

Some ramblings after reading this blog for awhile.
Trying to predict housing market crashes is just as big a waste of time as trying to predict financial market crashes, and can certainly be just as damaging to your finances.

On B.C.’s election.
You fools in B.C. who voted for Green and NDP better hope they don’t get the majority. They’ve got some new taxes waiting for you that are just going to make your eyes water.

“Socialism is a philosophy of failure, the creed of ignorance, and the gospel of envy, its inherent virtue is the equal sharing of misery.”
Winston Churchill.

#152 Dups on 05.19.17 at 3:08 pm

As i thought. Here is another way to cool down the GTA market bubble.

http://www.cbc.ca/news/canada/kitchener-waterloo/wynne-ontario-high-speed-rail-report-1.4123183

They are going to build it. All the sudden GTA is not that special anymore. We can travel from Windsor in 1.5 hr and from London in 45 minutes.

#153 Smallfry on 05.19.17 at 3:11 pm

@118 Dave, I get that! The movie The Big Short comes to mind. The cost of houses, the insane debt levels across Canada, the unstable neighbor down south, the Brexit impact on the global market… everything is coming together just to implode. I’m a single mid-30’s woman, no kids, no cats, no mortgage and money in the bank and many people look at me like I’m the dumb-dumb. I’m just gonna eat my popcorn and carry on. Cheers blog dogs!! :)

#154 natrx on 05.19.17 at 3:12 pm

I had a 350 K mortgage on a 3000 sf house. $3900 taxes in a year. Houses in the area going for over a mil. Get $800 month in rent from 1 tenant who has 1200 sf walk out basement.

Annual income is over 200K. 2 kids in daycare for about $1800/month. Up until recently, had 2 old 90s cars paid off. But finally time to get new.. used cars (2 of them). 23K for both although dang taxes skyrocketing that. Glad we got the house way back when it was still ‘cheap’.

All our family members have houses. But also glad to see the speculation cooling off. It’s not good for the long-run and the next generation.

#155 40% of Toronto Islands under water on 05.19.17 at 4:09 pm

http://www.cbc.ca/news/canada/toronto/40-of-toronto-islands-underwater-more-than-half-the-buildings-at-risk-city-warns-1.4123904

#156 The Technical Analyst, CSTA, CPD on 05.19.17 at 4:34 pm

#126 Lee on 05.19.17 at 10:36 am
#115,
“It won’t be long before JT has 500,000 newcomers coming to Canada every year. They have to live somewhere.”

Speculation you can’t bank on really. They can live anywhere, rent, move to a small rural town or even use Canada as a launch pad and jump to the USA.

If I had to bet, I’d say, rent over buy in a smaller city (not Toronto or Vancouver).

#157 Tony on 05.19.17 at 4:40 pm

Re: #143 AK on 05.19.17 at 1:54 pm

Georgina, Brock, Sutton and Jackson’s Point were the first cities in the GTA to “rollover”. The reason must be falling home prices.

#158 Tony on 05.19.17 at 4:59 pm

At the 4:00pm close it looks like America wants to kill their dollar before slapping tariffs on Mexico and China. After the tariffs look for the U.S. dollar index to spike above the 120 level. That’s the reason.

#159 westcdn on 05.19.17 at 5:09 pm

I got killed on Wednesday. I am not too worried as there are good companies. Today I made half it back. I have seen the story before.

#160 Alex on 05.19.17 at 5:16 pm

Question to all:
Can foreign students still buy a property in GTA without incurring the “foreign” tax?

#161 Jean Pier on 05.19.17 at 5:24 pm

another enlightening post from Mr. Turner. I have been following you for years. Most of the time I agree with you and at times I don’t..but such is life!
This is one of those topics where i find myself agreeing with you more often than not. It has been a very irrational real estate market in the GTA for many years now . I actually am surprised the correction has not happened yet , but it is virtually impossible to time these things. ( i hold a Masters degree in Finance and worked in the Mortgage industry as an insider). Most new mortgages are variable, most of those are overindebted in a labour market that is competitive and not growing wage wise in accordance with inflation . Credit is loose and was looser and governmental policies ( especially in Ontario) were wacky and built up this monster.
Rates will increase sooner rather than later..when is question . Alongside new regulations implemented by Wynn there is a beginning of a correction .
As a 44 year old , whose own father was active in real estate speculation in 19080s..i saw it first hand. He got stuck wioth two mortgaged properties back then in the sudden downturn. His pride did not let him sell at a lose and he still owns those properties today ..with gret tenant and paid off over a decade ago . even in a downturn he will do well.
I sold my Woodbridge home two years ago for double my money ( I owned just over 6 years ) . I still get the criticisms of selling early and not getting more ..but I am happy . I mad emoney and saved on mortgage interest expenses..a large expense many neglect in this overpriced and and high loan to value atmosphere. I am just waiting on the sidelines to pick something up when this crazy market corrects and garnering dividend income ( better than rental income and bad tenants) .
Whether the correction will be 25% or 75% is a good question no one can really answer..but I think it will be quite painful for many caught up in this irrationality known as the GTA housing market.

#162 WelcometoSlurrey on 05.19.17 at 5:50 pm

#160 – Well spoken. What hits home is the surprise the correction has not happened yet, and the criticism faced from others for not leaping into the mania (YVR) ……… everyone drumming the same beat here, the market will NEVER go down……….

#163 Ronaldo on 05.19.17 at 7:10 pm

#137 Ponzius Pilatus on 05.19.17 at 12:45 pm

#130
by the way, the “irrational actor” was Ronald Regan.
That guy scared me much more than Trump.
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But he got the wall torn down didn’t he? Sometimes we need people like that to get things back on track.

#164 thereason on 05.19.17 at 10:10 pm

I live in T.O. and i’ll tell you why it appears as nothing is moving its because sellers have ridiculous expectations. i’ve seen a bungalow flipped 3 times in 3 years from $350K to now $800k and no again on sell for $900K and just sitting there. Of course its just sitting there because it wasn’t worth $800 and its certainly not worth $900k in less than a year. The only thing wrong with this market is sellers think they can sell at any price. Demand is still strong just buyers a little more cautious. Sorry renters no crash coming.

#165 ozy - no crash, just readjustment to real value on 05.20.17 at 12:33 am

no crash, just readjustment to real value

let’s be serious, hundred of comments ignoring reality is this an anecdote or bragging blog…?

average areas pigged-back on top-areas for too long – blame the banksters and the puppet masters. now it’s time to see what areas were swimming naked ;)

certain locales will rise 20%, many will fall 20% – some will flatten and consolidate past years gains for eternity… it makes you wonder who is the greater fool….? look in the mirror, when was the last time you accepted your limits and listened to the people that know life & business…

#166 economictsunami on 05.20.17 at 7:14 am

It isn’t a top, until the head of the BoC sings, about a “soft landing.” Then you’ll truly know the market is in “bigly” trouble. The problem being that his economic war chest is pretty well depleted. That’s when the federal deficit will exponentially explode.

I’m not sure I’ll be as joyful as many posters appear to be, that the last straw in the Canadian economy (the F.I.R.E. sectors) will be in “right sizing” mode. Under immense financial pressure the pink slips will be flying and most of the bartender and waiter/ waitress jobs have already been taken.

Oh well, there’s always enough room for the unemployed in those sectors to bullshit themselves into believing that they are all self employed entre-manures.

As far as NAFTA goes, what matters most after the deal is inked, is what the Loonie is valued at in the medium term. Too low and you siphon off disposable income (but Steve will get his inflation) or too high and our exports will struggle. Either way, I bet we will be told that the Loonie is priced to perfection!

We surely live in interesting times.

(If you liked that last line, I just made it up…)

Commodities Bust Hits Farm Lenders, Delinquencies Surge 225%

http://wolfstreet.com/2017/05/19/commodities-bust-hits-farm-lenders-delinquencies-surge-225/

Oil Is Now At The Mercy Of Money Markets

http://oilprice.com/Energy/Oil-Prices/Oil-Is-Now-At-The-Mercy-Of-Money-Markets.html

#167 Fed-up on 05.20.17 at 7:35 am

#159 Alex on 05.19.17 at 5:16 pm
Question to all:
Can foreign students still buy a property in GTA without incurring the “foreign” tax?

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Oh goodness yes of course. We wouldn’t want to implement any policy in this joke of a country without massive loopholes.

The party will continue because the criminals who control and govern us, want it to.

#168 Tamsen on 05.20.17 at 3:55 pm

http://www.straight.com/movies/911326/vancouver-gets-its-close-charles-wilkinsons-no-fixed-address

#169 Ace Goodheart on 05.21.17 at 3:21 pm

“Expect even more listings and fewer sales. The ratio will take a brutal turn, leading then to price reductions in the summer. The pace and depth are unknown. It could be as mild as 15%, as serious as the 33% drop when the last boom turned to bust or – if rates rise, Trump tears up NAFTA or more mortgage companies fail – worse.”

This is unlikely. I guess we’re in the unique position of posting items on the internet, which is for the most part a permanent record of our thoughts, if we write them here, sort of like a bathroom wall that never gets painted.

My prediction for the summer: Toronto proper housing continues to rise, however not as much as last year. I am thinking about 10%, max 15% for semis and detached.

Toronto condos experience a bit of a price correction. This will be mostly seen in resale condos. New builds will not be affected.

“Feeder” or “Commuter” markets (ie, places where a person cannot both reside and work, if they have a big mortgage): These places are not going to do as well. Spots like Barrie and Hamilton and Oshawa are going to see a bit of a decline overall. Likely not much, I am guessing maybe 5% or 10%.

That is my prediction.

The Ontario govt dealt a body blow to the RE markets here. But the properties that are really going to feel this are resale condos in the GTA. They are going to get crunched.