Market update

For market watchers in the deepest real estate cauldron in the nation, Monday’s a biggie. Unless they chicken out, GTA realtors will unveil stats for May – normally one of the frenetic periods of the year, but in 2017 the Month of Angst.

In the final days of April the Ontario government followed that of BC and slapped on a Chinese dudes tax of 15%. Moreover, it imposed universal rent controls, just to spank condo speculators. And it opened the door to close cooperation with the CRA cops so flippers and short-term owners will be taxed without mercy. The impact was immediate. Within two-and-a-half weeks listings were up 47% and sales down 26%. Since then agents describe “a light going out” as open houses fall silent, bidding wars largely disappear, listings pile up and deals die. Desperate and panicked now are those who bought homes in March of April without selling their existing properties. Meanwhile untold numbers of recent buyers face the painful choice of paying way too much, or walking and being punished.

By the way, here’s a contribution from blog dog Jeff. It perfectly describes GTA real estate, circa February, 2017:

So, we’ll see. Will the Toronto Real Estate Board reveal a decimation of the market then beseech the politicians to lighten up? Or will it trot out Frankenumbers to try to bolster buyer confidence and staunch the blood?

Meanwhile, what’s the deal with Vancouver? Media late last week were slathering over the latest realtor stats showing sales have rebounded and prices are sticky. The house-humpers say the market is “on fire.” GreaterFool says phooey.

First, here’s blog dog John from YVR, with a great listing he found on Craigslist:

New laneway home…clean and cute. Would suit a shorter type or a flexible person. Cirque de soleil types. No utilities. No sublet or Airbnb. $375.00 reference needed.

__________________________________________________________

Yes, it’s true overall sales last month in the Pacific City of Delusia jumped 22% from the number of deals done in April. In fact, it was the third-best May on record. But facts are fact. As big as the month/month increase was, sales are still running about 9% below 2016 levels while new listings have increased 23%. More importantly, there’s a fundamental change happening in the sales mix – experienced real estate owners are sitting frozen in the headlights of change, while the moisters and first-time buyers rush in. Yes, the greater fools.

Look at the ratio of sales to listings: 94.6% for condos, 76% for townhomes and just 31% for detached. That means only 5% of condos went unsold while 70% of traditional houses with dirt languished. It’s a huge change from last year, now being reflected in prices. Because of the moister demand, condos jumped 17% year/year while detacheds gained just 3% – negligible with inflation at two per cent.

Why are the kids doing this? Especially when the NDP-Green anti-wealth, market-busting machine is set to roll over the entire province?

Well, the free-down payment scheme launched by the Libs in the last budget certainly helped stoke the fires, which is exactly the opposite consequence than intended. And the rental squeeze adds more fuel, as the vacancy rate falls and mortgage-stressed landlords up lease rates. Finally, first-timers are still labouring under the misapprehension that it’s different in Vancouver, prices will always rise and if they don’t “get on the property ladder” now they’ll forever be frozen out. This is what makes children so adorable. And scary.

Tomorrow: OMG.

127 comments ↓

#1 Smoking Man on 06.04.17 at 2:02 pm

It’s going to be ugly.

#2 Andrewski on 06.04.17 at 2:13 pm

The smart money bets that real estate associations will continue to provide “Frankenumbers”!
The complete lack of financial acumen amongst our citizenry is astounding & sad to see.
Caveat emptor!

#3 ANON on 06.04.17 at 2:15 pm

Textbook “return to normal” in Delusia, which means we got the bull trap also. It’s all downhill from here, folks.

#4 Dave on 06.04.17 at 2:19 pm

How much time in BC before NDP tax hammer drops? Months or weeks?

#5 Oot of teh Hoos on 06.04.17 at 2:23 pm

In the Time Machine movie of 2002 the Eloy come and take only a few old people each night. That is not talked about by the young and it is the place our parents go.

#6 GUS on 06.04.17 at 2:25 pm

If the buyers are smart enough ,then they will hold their purchase for few weeks and they will get the best discount of their life time. The sellers are in panic and they are flooding the market .
It is your call buyers.

#7 NoName on 06.04.17 at 2:46 pm

off topic or not

cult of re in canada and cult of tesla car ww…

http://www.businessinsider.com/investors-ignoring-tesla-production-problem-2017-6

#8 Fred Morneley on 06.04.17 at 2:49 pm

Wait till Spring 2018 with a few rate hikes and Green Party/NDP Party enjoying their time in Office. It could really surprise those folks who think real-estate is a guaranteed ticket to the promised lands!

#9 rates vs capital on 06.04.17 at 2:57 pm

Why are the kids doing this? Especially when the NDP-Green anti-wealth, market-busting machine is set to roll over the entire province?

Well, the free-down payment scheme launched by the Libs in the last budget certainly helped stoke the fires, which is exactly the opposite consequence than intended.
——–

The BC Home Buyer’s Program targeted 42,000 people across all of BC, providing a maximum loan of 37.5K for place up to 750k.

But even the millennials mock this program as the second you use it, you essentially have a second mortgaged a negative equity (because the provincial loan is considered a second mortgage not real equity for a down payment).

To date, 1000 people have applied and only about 400 have actually gotten the loan…

Can 400 people on the margin really be market makers? I await the answer…

That would equal 10% of sales last month. You tell me… — Garth

#10 MF on 06.04.17 at 3:09 pm

The stats tomorrow will reveal the market is:

1) “experiencing a temporary increase of listings in line with the peak selling season of spring”.

2) prices in may were only up a modest 8% (on 1 million).

How reliable are these realtor stats? I guess we will find out tomorrow. I’m not holding my breath though.

MF

#11 SimplyPut7 on 06.04.17 at 3:20 pm

So there’s this new tactic I have been noticing in my area in the GTA. Most homes have not sold in weeks, the owners instead of lowering their listing price, relist the home at a higher price. Does anyone know why they would do that? That doesn’t make any sense.

Also, before the realtors and speculators says Vancouver is back, page 8 of REBGV stats package. Most areas show listings are up and sales are down year-over-year.

http://www.rebgv.org/sites/default/files/REBGV-Stats-Package-May-2017.pdf

#12 Fake News on 06.04.17 at 3:21 pm

Facts are facts. Homes are as high as they have ever been in greater Vancouver. More than a million dollars for a townhouse that looks like a car dealership with all the vehicles. Don’t see any reason for them to come down any time soon.

#13 Trumpocalypse2017 on 06.04.17 at 3:21 pm

Forget D-Day June, tomorrow is the start of D-week.

OMG is right Garth – tomorrow will be the true start of our real estate and economic crash – real estate is plunging!!

Thursday, Comey testifies (if he is allowed to live) and the UK goes into full crisis mode.

Total chaos by week end is now a 75% likelihood.

***News – 4:20 Preparedness meetup now confirmed for Wednesday at Belfountain. Bring your survival ideas to share and cash for ice cream. I’ll be in the black SUV in the lot. Password is “Bandit”

Do NOT be in any urban environments after Friday until the threat level drops.

#14 Nero on 06.04.17 at 3:23 pm

Whoopeee…. Million dollar houses in Greater Van area
sitting on market.
Mean while in the rest of BC it’s game on as prices climb and locals can look forward to their kids being renters for life.
$450 K is the new ‘Junk’ median across the board.
Sucks…

#15 Joseph R. on 06.04.17 at 3:24 pm

#4 Dave on 06.04.17 at 2:19 pm
How much time in BC before NDP tax hammer drops? Months or weeks?

—————————————————-

First, they will need to choose a Speaker amongst their ranks, as surely no BC Liberals will accept that position, bringing the BC legislature at a 43-43 seat configuration.

First, they will need to vote against Clark’s Liberals in a motion of non-confidence when she will recall the legislature. If it passes, the Lt. Gov. Guichon, can either ask NDP’s Horgan to form a government or force another general election.

With all these uncertainties that arose from the “leftist coup”, I think it’s all too early to make a prediction as to when and if, the tax hammer will drop.

P.S.: By tradition, the Speaker, if forced to cast a vote, does so in favour of the Status quo, the party with the biggest seats in the house. He has to be viewed as non-partisan.

#16 Keith in Calgary on 06.04.17 at 3:39 pm

All of a sudden in YYC it’s raining DOWNTOWN/BELTINE condos under $200K……….it’s just like a tsunami of listings and price reductions has started.

$100K – $150K has been shaved off the mid range market asking prices within 18 months……….there’s nothing really between $299 and $450K…………and everything new and around 450K – $550K is like 450 square feet…..LOL !!!

Severance packages have finally run out, bank credit is turned off, tenants have evaporated, and competition is fierce……….schadenfreude baby…………schadenfreude.

#17 Brian Ripley on 06.04.17 at 3:43 pm

My Vancouver charts are up now:
http://www.chpc.biz/vancouver-housing.html

​Sales are on the seasonal bender at their potential peak for the year and listings levels are barely off the bottom helping to keep the market bubbling.

#18 Howard on 06.04.17 at 4:22 pm

A Facebook “friend” (actually someone I knew in highschool and whom I dislike intensely) posted an open house for his townhouse in Maple, Ontario. I was curious so I looked up the history.

It was originally listed at $1,049,000 (yes, for a townhouse in effing Maple! oh but it has a “stunning open-concept layout!”). That was a month ago. They’ve since cut $100K off the asking price, now listed at $949,000.

The Facebook post had a hint of desperation in it : “Let’s get this house sold!”.

#19 Entrepreneur on 06.04.17 at 4:27 pm

“NDP-Greens anti-wealth, market-busted machine” really, put the blame on them before they officially get in.” And I don’t think they are anti-wealth but more for fairness to the people of the nation.

Maxx blogger, I know it is money bias but it is really sad when our greet leaders use carbon tax/Paris agreements to cover up earth-sucking fossil fuels, bias no-harm, biggest dam Site-C, etc. to move forward as if all is okay. Keep on disturbing the earth and wildlife to your wildest dreams.

Like Andrew Weaver said, “This is the 21st. century.” It just seems that we have moved backwards (and all for power/money) not forwards, generally.

#20 Lee on 06.04.17 at 4:29 pm

I don’t see much of a slow down in Toronto. Driving down a major street in Toronto today with homes in the $1.5 M to $2.0 M range I saw five “sold” signs which have been for sale for about a month. If that is a slow down, o.k. But it’s not much of a slow down. I don’t know what the houses sold for but they are sold. Most look like like they will be torn down and rebuilt as this is what is happening on the street in question.

#21 Howard on 06.04.17 at 4:37 pm

#3 ANON on 06.04.17 at 2:15 pm
Textbook “return to normal” in Delusia, which means we got the bull trap also. It’s all downhill from here, folks.

———————————–

Indeed, but will the same now happen in Toronto? A final summer blow-off top before the “real” decline begins in earnest?

#22 Game Over on 06.04.17 at 4:39 pm

What I think the strategy with the higher relist is; You can’t sell your house, so you relist it at a higher rate hoping someone puts in a lower offer close to your original asking price. You get what you wanted and the buyer thinks they are getting a discount so they are happy. Before, the lower price with the bidding wars seemed to work, but now they gotta switch it up.

Buyers just need to come together, boycott the market for a little bit and starve out the weak ones to get the dominoes falling.

#23 Howard on 06.04.17 at 4:40 pm

#6 GUS on 06.04.17 at 2:25 pm
If the buyers are smart enough ,then they will hold their purchase for few weeks and they will get the best discount of their life time. The sellers are in panic and they are flooding the market .
It is your call buyers.

———————————-

Even smarter would be the sit back, relax, grab some popcorn, and know that the previous popped bubble in Toronto (1989) took 7 years to bottom out.

#24 Damifino on 06.04.17 at 5:07 pm

#15 Joseph R.

P.S.: By tradition, the Speaker, if forced to cast a vote, does so in favour of the Status quo, […] He has to be viewed as non-partisan.
——————————–

The speaker will be chosen from the ranks of the coalition in waiting. The speaker will take the job with the proviso they will be under no obligation to favour the status quo. The Lieutenant Governor will find that acceptable. Game on.

#25 For those about to flop... on 06.04.17 at 5:21 pm

Pink Pollen falling in Delta.

These guys overpaid for this house by at least 100k when they paid 925k for this place in May 2016.

The assessment that came in later in the year topped out at 833k, and if you look at the link the people that flipped it to these guys made all the money while these guys are left holding an empty bag.

With a hole in it…

M42BC

8020 114 Street, Delta

May 14:$999,900
Jun 2: $899,000
Change: – 100900.00 -10%

https://www.zolo.ca/index.php?sarea=8020%20114%20Street,%20Delta&filter=1

https://evaluebc.bcassessment.ca/property.aspx?_oa=QTAwMDA1VkhINw==

#26 TurnerNation on 06.04.17 at 5:32 pm

Collateral damage in Calgary? Toys.
Fun fun fun until the T-bird is taken away.

16% price drop

Current Price$92,980
Discounted May 27, 2017$99,980
Originally listed for$109,980

http://www.autotrader.ca/a/Ferrari/355+Spider/Calgary/Alberta/5_30918890_20130628093641701/?

#27 For those about to flop... on 06.04.17 at 5:38 pm

Pink Pollen falling in Surrey.

Whilst still a Possible Pinkie by definition as they are holding out for a double digit gain, it could certainly be argued that these guys are in bigger trouble than the last guys due to the assessment and price point involved.

These guys thought that it was a good idea to fork out 2.8 million in March 2106 ,when you could still see part of Christy Clark’s forehead.

The assessment that came in later in the year despite coming up a boffo 33% ,still topped out well short of their number at 2.58 and these size houses in Surrey are down 13% yoy according to zolo.

If it was a new build ,someone might step in ,but it is 17 years old now and old enough to know better…

13390 22a Avenue, Surrey

Oct 13:$3,560,000
Jun 2: $3,150,000
Change: – 410000.00 -12%

https://www.zolo.ca/index.php?sarea=13390%2022a%20Avenue,%20Surrey&filter=1

https://evaluebc.bcassessment.ca/Property.aspx?_oa=QTAwMDA3NlRIOQ==

#28 james on 06.04.17 at 5:40 pm

#52 Smoking Man on 06.03.17 at 8:34 pm

Just got my first donation on my donation page. Quite generous actually. Just in time, was down to 50 bucks in the bank. No job for six months.
>>>>>>>>>>>
socialism for the win

#29 VICTORIA TEA PARTY on 06.04.17 at 5:45 pm

A TSUMANI OF PAIN ROLLS IN ON THE WEST COAST

As British Columbians await the outcome of whatever may or may not happen in our legislature soon, and if another election follows, anyone buying real estate in YVR, or in sunny Victoria right now needs a head exam.

Over the long haul prices will go up in both places because of supply/demand conflicts, but in the short-haul perhaps not?

BUT RIGHT NOW THIS IS HAPPENING HERE

In Victoria, as an example, I have lived in Victoria for the last 35-plus years and something big is happening. Condo construction is going on at a furious rate.

Downtown Victoria is abuzz as 15-storey buildings, and soon a 30-storey building all to cater to people needing places to live, continue at an amazing pace.

Thousands of condos, and some rentals, everywhere downtown and elsewhere in the region. Some units will be small, others larger. And condos will cost a fortune.

For instance a proposed 42-condo four-storey building in Oak Bay has prices ranging from nearly $700k for a 750 square footer to more than $2 million for a penthouse twice that size. Completion is set for autumn 2019.

Problem is so many buildings are going up that it’s changing the face of our city. For better or worse, but unstoppable. Congestion and traffic chaos will be the outcomes.

My city used to be a quirky sort of English tea and biscuits place.

Now there’s an uptight yuppie sidewalk cafe and shopping culture dominated by demanding consumers seeking whatever it is they need to make their lives perfect in every way.

That’s why most of these folks, both Boomers and Millennials, seem to want the NDP/Greens in power in this socialist Snowflake-haven by the sea.

Yeah, we’ll see about that as taxes and other imposts rocket ever upward with insane and ongoing increases in living costs.

It’s nuts.

#30 bankish on 06.04.17 at 5:47 pm

Until the Bank of Canada raises the interest rates to a more realistic number of a least 5% this house price craziness will continue.
I paid a 15% rate in 1981 and that was only because I would not have bought the house if the owner hadn’t held the mortgage at a lower than the going rate. I sold my Canada savings bonds(18.5%) for the down payment and the house cost a year and a half salary.(lots of overtime)
Your personal stress test should be can I afford this house at 5% and you should seriously think about paying down your debt before interest rates rise.
That day will come.

#31 Welsh & co on 06.04.17 at 5:59 pm

For the 905ers in York-Durham area, I’ve been posting monthly stats since 2014. The market has indeed made a paradigm shift.

https://karinwelsh.ca/durham-region
https://karinwelsh.ca/york-region

#32 TRT on 06.04.17 at 6:09 pm

Prices won’t fall in YVR and T.

We’ve been saying it for almost 10 years now on this blog and we’ve also been wrong about election outcomes the last 4 years.

I thing we are classic example of ‘groupthink’ here. What are we missing to be so wrong so often for so long?.

#33 OttawaMike on 06.04.17 at 6:10 pm

Turnernation

That Prancing Horse is still overpriced. Nothing to do with market conditions.

Remember : No such thing as a cheap Ferrari.. In fact the cheap Ferrari is usually the most expensive.

#34 new game in town on 06.04.17 at 6:13 pm

#11 SimplyPut7 on 06.04.17 at 3:20 pm

tactic to
1) make buyer think they got a deal
2) hide fear

2014 prices though high were right for the interest rates. now you are buying junk in the gta. rather move than buy that crap.

#35 data on 06.04.17 at 6:30 pm

Vancouver
The reason for this is rents, they have shot up so people are buying on the low end whatever is low priced. The high priced stuff is not moving, where the tax and FPT really makes a difference.

#36 Keith on 06.04.17 at 6:41 pm

For fun I googled sales to listing ratio, sellers market. The definition of a sellers market according to various Canadian real estate associations which are hardly unbiased sources ranges from 20% to 60%. I give up.

#37 I'm stupid on 06.04.17 at 6:41 pm

I toured 7 open houses today with a family member that is thinking of downsizing. Crickets, but the most telling sign that the lights went out is that each agent I spoke with said the same thing, “we’re accepting offers at anytime”.

#38 S.Bby on 06.04.17 at 6:42 pm

#25 Flop

http://www.businessinsider.com/vancouvers-mortgages-are-rapidly-deteriorating-in-quality-2017-5

These subprime loans are actually getting worse in Vancouver. 36% of postal codes saw the average loan-to-income ratio increase from the year prior. V5X, known to humans as South Vancouver, saw the largest increase. The ratio jumped from insignificant numbers, to an average high-ratio loan-to-income of over 450% – the highest measure the BoC gives. Only three other area codes scored this high, V4C (Delta Northeast), V5J (South Slope), and V6V (mostly farmland in Richmond). In the event of a correction these areas will likely be impacted the most.

North Delta V4C has among the highest speculation rate of any area of the lower mainland.

#39 Gregor Samsa on 06.04.17 at 6:44 pm

#16 Keith in Calgary

Some big hair cuts happening in Calgary condos. I live near a new building called “Vogue.” You can get a brand new, never lived in condo there for around $300,000. Same condo was $400,000 when it was being sold by the building pre-construction.

More inventory is coming online every month and they are still digging holes on new condos. You’d have to be a fool to buy one at ANY price right now.

It may not seem intuitive, but I believe that the only thing propping up the Calgary market is the Toronto and Vancouver markets. While those markets are at peak froth, there is a certain amount of “spill-over effect” in Calgary and other cities.

#40 waiting on the westcoast on 06.04.17 at 6:48 pm

#29 VICTORIA TEA PARTY on 06.04.17 at 5:45 pm
“A TSUMANI OF PAIN ROLLS IN ON THE WEST COAST”

A little more density will do Victoria some good. That said, I know 30 minutes commutes are considered obscene… ;-)

Still checking out the market here for rentals. Very expensive for quality

#41 SWL1976 on 06.04.17 at 6:52 pm

#103 crowdedelevatorfartz – Yesterday’s post

You’re right. Plead ignorance. For like your moniker… It suits you well

#42 I'm not Poloz on 06.04.17 at 6:53 pm

50c Loonie here we come! Poloz will justify this by cutting interest rates to 0.25% so that jogger will be able to afford an $850,000 condo in the heart of downtown Lakeshore, Toronto.

Poloz will also cause Capital Flight out of Canada that the Loonie will fall below 35 cents to boost exports from Ontario!

#43 waiting on the westcoast on 06.04.17 at 6:53 pm

Oops… Accidental submit….

Very expensive for quality listings. Looking at 3-4k monthly but many homes not that great (although some great neighborhoods).

Spoke with a mortgage broker who owns multiple properties in Victoria but does all of his business in North and West Van. He thinks the market is ready to tank… Knows lots of people carrying 3-4M in mortgage debt on multiple properties with 150k in household income… One or two missed rental payments and it all falls apart…

#44 Boombust on 06.04.17 at 6:58 pm

You’re right, Garth. “Phooey” it is on YVR being “on fire”…

For the TENTH month n a row, there have been monthly declines in sales and the “flight to quality” continues insofar as your $$$ buys a bigger, nicer and more well-located home over this same time last year.

Also, the Metro Vancouver has already seen a 49% drop off in dollar volumes (YoY) in April.

Funny how these FACTS never seem to make the 6 o’clock News on Global, isn’t it?

It is all so easy to look up, too. All anyone has to do is read page 8 of the recent REBGV May report.

#45 Chaddywack on 06.04.17 at 7:00 pm

Two of my cousins reflect those condo stats. Paid over $600k for small one bedrooms/studio downtown Vancouver.

Big downpayments given by mom and dad with the agreement that they will “make their payments.”

Mom and dad have lots of money and their children are now on the property ladder. Who cares if it drops? Not the kids! :)

#46 peter on 06.04.17 at 7:08 pm

Well, the free-down payment scheme launched by the Libs in the last budget certainly helped stoke the fires, which is exactly the opposite consequence than intended

You must be joking Garth. Bob Rennie, the Liberal Party Fundraiser AKA the Condo King, at the time probably hatched this plan knowing full well what the repercussions would be. Please try harder…

#47 Dan.t on 06.04.17 at 7:12 pm

Please just admit that it is different in YVR and BC. Prices will only ever ever ever rise and that 450K 1 bedroom condo will be worth 980k in 4 years so it really doesn’t matter if you have money or not!

Stop talking down YVR and BC real estate. Prices never go down!

If you can come up with like $3,279, yes, you should be able to leverage that 99.99% and buy a 450k condo, with bank of mom giving you the difference and then max out the credit card at 19%, it really doesn’t matter how you leverage the money. As long as you can shuffle around your debt, you will be rich!

It really is different in BC.

Since 60% don’t understand how interest rates and debt are correlated, what does it matter what kind of financial decisions you make.

Either Canadians are super smart and they all got together in a little room somewhere and teamed up and said, you know what, if all of us don’t have any money, and we binge like frat college kids on debt, then what will they do to all of us. Let them try to get all of us in trouble.

If it wasn’t so sad it would be funny.

Final comment, what the frig, is wrong you Canadians. Seriously, massive, massive group think, that just buying a condo, or townhouse at any price will provide you with windfall gains and secure your next 40 years so you can sit back and bask in wonderful equity glory is insane.

Ya, 2004, 2005, 2006 was the time to buy and make a ton, now, you are asking for a world of hurt. You are relying on either a super rich Chinese “investor” who made millions being stupid to buy your suburb condo OR most likely one of the last greater Canadian fools who spoke to other fools to drop 900k on your 1 bedroom apartment.

Who cares if you get a place in downtown London, or down town Berlin, or down town New York for cheaper…it’s Burnaby, or Bramton, or butt f**k nowhere, but it’s in Canada, that is all you need to know.

Please go outside the country for longer than 2 weeks then maybe the delusion will subside, hopefully a bit anyhow.

#48 crdt on 06.04.17 at 7:19 pm

“Will the Toronto Real Estate Board reveal a decimation of the market then beseech the politicians to lighten up? Or will it trot out Frankenumbers to try to bolster buyer confidence and staunch the blood?”

They will go with option 2… Greed over self preservation…

#49 Smoking Man on 06.04.17 at 7:24 pm

Wow Bill Morneau wanting to know where a reporter lives when the reporter asks him about Bilderberg.
Passive agreeseve threat my call on it.

What’s he even doing there?

https://youtu.be/PgmeR6tBjMI

#50 Shawn on 06.04.17 at 7:35 pm

Vancouver price action could be a bull trap.

#51 Contrarian Coyote on 06.04.17 at 7:49 pm

#5 Oot of teh Hoos on 06.04.17 at 2:23 pm
In the Time Machine movie of 2002 the Eloy come and take only a few old people each night. That is not talked about by the young and it is the place our parents go.

===

The Morlocks take the old and weak. The Eloi are the one who get to live in relative peace in exchange for sacrificing some of there own.

TO get back on track, I sincerely hope there is a report in a slowdown of sales in the GTA. Prices up here in the outer end of the horseshoe are stabilizing and dropping in some cases. Let the slow melt of the Kawarthas begin!

#52 WUL on 06.04.17 at 8:05 pm

In case you weirdos hadn’t noticed, the Geelong Cats are in 3rd place in the Australian Football League. The Toronto Argos can only dream.

FLOP, get well soon and get back to swinging that 9 pound hammer.

M61(Spry)OilyAB

#53 waiting on the westcoast on 06.04.17 at 8:05 pm

My parents had another agent approach them about selling their acreage in Langley… Now $1.6M. I am trying to convince them to get out and my Dad points out that he has gained $500k in net worth over the past 5 years sitting still… kills me that he is right despite economic fundamentals saying I am right… groupthink may be true, but it is the need that sees no end to this…

Tell pops he has gained nothing until he sells. — Garth

#54 I thinks I know something on 06.04.17 at 8:06 pm

#32 TRT on 06.04.17 at 6:09 pm

Prices won’t fall in YVR and T.

——————————————————————

Bloody right you are. Not until interest rates go way up (not going to happen, they’re actually going to go down) and immigration is curtailed (not going to happen either). And keep in mind, the politicos don’t actually want RE prices to go down. They just pretend that they do.

#55 TnT on 06.04.17 at 8:07 pm

Interesting

53 Harcourt ave toronto sold March 6 2017 $1.385 million (listed $799 K)

http://watch.ohmyhome.ca/#/mls/E3718243

Now 60 days later (guess they had a 60 day closing)

Re-listed for sale $799 K

http://www.kijiji.ca/v-house-for-sale/city-of-toronto/homes-for-sale-in-danforth-toronto-ontario-799-000/1244407613

I’m thinking buyers need to get out before the air bags deploy…

#56 waiting on the westcoast on 06.04.17 at 8:08 pm

herd not need in prior post

Even Bloomberg cannot fathom Vancouver…

https://www.bloomberg.com/news/articles/2017-06-02/vancouver-home-prices-resume-stubborn-climb-to-fresh-record

#57 InvestorsFriend on 06.04.17 at 8:10 pm

The Mystery of Low Interest Rates

And ultra low interest rates are the dominant force in house and stock market valuations

Ponder why institutional investors are willing to buy 5 year Canada bonds and lock up their money for five years at a current rate of 0.92%.

For a million invested they get back a return of $9,200 per year and they have tied up the money and can’t use it for other investments that might come along.

This return is enough to double their money in 76 years! and that includes compounding.

Possible explanations:

Blindly following asset allocation percentages that were set years ago when government bonds paid a return above inflation?

Blindly following their peers? Buffett calls this behavior the institutional imperative. He was surprised to discover how often companies will copy the irrational behavior of the other companies.

There is just no place else to put the money? The western world is “built out” and requires little new investment and so there is too much cash chasing too few investment opportunities?

Depending on the reasons for institutions (pension funds, insurance companies, banks, and mutual funds) being willing to lend money to governments at such extremely low rates, when will they stop being willing?

#58 For those about to flop... on 06.04.17 at 8:11 pm

#38 S.Bby on 06.04.17 at 6:42 pm
#25 Flop

http://www.businessinsider.com/vancouvers-mortgages-are-rapidly-deteriorating-in-quality-2017-5

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

Hey Sobby ,hope you’re well.

Just to personalize your link a bit more, I just asked Mrs Flop where exactly V5X was and she said that was the postcode that she grew up in.

We are still “V5ers” til this day ,living about 30 blocks away.

Her friends and family are here that’s why we stay,the place where I grew up is probably 10,000 miles away so it’s definitely a home game for her.

On another note I went for a walk around the block and despite being one of the cheaper detached houses in Vancouver ,that old lady’s house that I showed you guys a photo of the ghost town open house remains the case,didn’t see anyone there,realtor out on the balcony playing with his phone.

Candy Crush,I fancy…

M42BC

#59 conan on 06.04.17 at 8:22 pm

#49 Smoking Man on 06.04.17 at 7:24 pm

Tell you reporter friend to just say Scotia Plaza, Suite 5300 next time he is asked what building. LOL @ the Matrix, he is lucky this did not go to kook n da toque defcom 1.

https://www.youtube.com/watch?v=9RRGvAB4HF8

He is there because he plays a mean guitar. Oh wait that was Hatfield. I do not know why he is there.

#60 For those about to flop... on 06.04.17 at 8:39 pm

#52 WUL on 06.04.17 at 8:05 pm
In case you weirdos hadn’t noticed, the Geelong Cats are in 3rd place in the Australian Football League. The Toronto Argos can only dream.

FLOP, get well soon and get back to swinging that 9 pound hammer.

M61(Spry)OilyAB

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

Hey WULLY,well I never thought I would see you write about the Geelong Cats again on this blog after they hit you in the hip pocket for $20, but this is why I tune in every day because you never know what’s gonna happen.

The Dogs won last year ,but as I told you a while back I think that it’s the year of the Cat.

Actually I’m not sure if you know but a guy from your neck of the woods won the title a couple of years ago.

As far as getting back to work ,I had a setback but am grateful for all the support and well wishes I have received on this blog…

M42BC feeling like M62BC

#61 conan on 06.04.17 at 8:53 pm

#57 InvestorsFriend on 06.04.17 at 8:10 pm

They can sell the bond at any time
Interest rates may continue to fall
It allows them to enter the market if a serious correction happens
In case of insurance and pension peeps, they are mandated by Federal law, to hold bonds.

The Holy Bond, much more useful then you think.

https://youtu.be/G5i_eCROFiQ?t=9

#62 chrisgo on 06.04.17 at 9:04 pm

I don’t understand any of these posts. The stats have been posted for 2 days

#63 When the Whip Comes Down on 06.04.17 at 9:05 pm

Question for BC – would the new ndp/green party government squish the BC home equity loan program? How quickly?

#64 Doug t on 06.04.17 at 9:08 pm

LMFAO WTF FUBAR YOLO SHTF

#65 Shortymac on 06.04.17 at 9:41 pm

Meanwhile, I’m visiting my best friend in Atlanta where 5 bedroom newish build will be 250k.

However, it comes with fire ants, no sensible healthcare, boiling summers, and trump… I will wait out the market here.

#66 Vit on 06.04.17 at 9:46 pm

https://www.thestar.com/life/health_wellness/2009/01/03/whats_in_store_for_housing_market_in_2009.html

Often you can read how today RE decline is similar to 2009 and following decline in prices for the next 6 years .
If you read above article you can see its a fur away from true .
– in 2009 we had a global credit crunch
– in 2005-2009 price were declining in US and Europe
– in 2009 were price decline in British Columbia and other western provinces ( for a lust 2-3) years .
So for 2017 non of this is true . Stock market at all time high , home prices in US all time high , BC sales and prices going up , so all pointing to another strong year for a Toronto RE.

#67 ANON on 06.04.17 at 9:49 pm

#21 Howard on 06.04.17 at 4:37 pm

Indeed, but will the same now happen in Toronto? A final summer blow-off top before the “real” decline begins in earnest?

Who knows? Something else might blow-up first (fuses are running short in too many areas, and globally)…or not, it might last a bit more, would not be surprised.
Is it worth waiting to find out, after Garth cheerfully ended two posts with The Bubble Chart lately?

#68 Paddler on 06.04.17 at 9:57 pm

Report on Business in Saturday’s Globe&Mail Headline: Sizzling Vancouver market sets record. Average price of detached home hits new high.
Go figure hype and more hype. I don’t believe any numbers that are reported be the GVREB.

#69 Vit on 06.04.17 at 10:04 pm

BANNED

#70 Linda on 06.04.17 at 10:04 pm

Love the picture of the day:) The dog has is right, just chill.

As for the housing market, a long lasting chill will occur. Demographics pretty much ensure this (vide Japan). Seriously, at the crazy prices in the delusional markets who can afford to buy? Only the delusional or the truly very rich. One can bet the truly rich are not shelling out mega-bucks for the properties the deluded are buying.

#71 Ronaldo on 06.04.17 at 10:05 pm

#32 TRT

I thing we are classic example of ‘groupthink’ here. What are we missing to be so wrong so often for so long?.
——————————————————————-
Need to exchange our crystal ball to a newer model. This one ain’t working.

#72 prash42 on 06.04.17 at 10:13 pm

To date, 1000 people have applied and only about 400 have actually gotten the loan…

Can 400 people on the margin really be market makers? I await the answer…

—-

That would equal 10% of sales last month. You tell me… — Garth

Did the 400 all get the loans in May? If it’s since January, that’s ~80 loans a month on average.

#73 moses71 on 06.04.17 at 10:45 pm

Well, Garth has said that usually real estate “crashes” don’t normally crash & burn. They decline over time, which I have plenty of…. lol in Calgary

#74 Smartalox on 06.04.17 at 10:54 pm

Notes from V5S:

The V5x postal codes are home to the River District, one of Vancouver’s largest, mass-produced, multi-project, mostly condo developments. I can see why the region is a hot bed of speculation.

One other anecdote, from V5x: a family sold off their freehold home in Richmond a few years ago, to buy a townhouse in a leasehold complex in south van. A few months ago,we had our ‘neighbours’ over for drinks (our wives are work colleagues). A couple of glasses of Chardonnay into the evening, and the topic turns to real estate and finance. And the missus from this V5x family gets into a snit that the bank won’t increase their HELOC because their property is on leased land.

Doesn’t seem to be stopping them from sending thier kid to private school, or flaunting a new car, or travelling internationally, and posting about it to Facebook.

#75 InvestorsFriend on 06.04.17 at 10:57 pm

Why Institutions Buy Bonds

#61 conan on 06.04.17 at 8:53 pm responded to me:

#57 InvestorsFriend on 06.04.17 at 8:10 pm

They can sell the bond at any time
Interest rates may continue to fall
It allows them to enter the market if a serious correction happens
In case of insurance and pension peeps, they are mandated by Federal law, to hold bonds.

***************************************
All of that is true.

There will be almost no capital gain on a five year bond even if rates fall, there is almost nothing left. Even 0% interest rate would get capital gain around 5%.

They risk at least a small capital loss on sale if rates rise which is what the same institutions no doubt expect.

The mandated by law is an excellent point, one I missed this time but have noted before.

Laws sometimes mandate holding long bonds as if they are safe when in fact they could be extremely risky. The five years are not too risky but still 0.92% return? It’s a laughable investment.

They can have these bonds. Buffett says he can’t figure out why anyone would want any kind of long term bond at these rates. At some point they may wake up. They are investing by the rear view mirror. Same as home buyers in big cities.

#76 Ole Doberman P. on 06.04.17 at 11:30 pm

#39 Gregor Samsa on 06.04.17 at 6:44 pm

#16 Keith in Calgary

Some big hair cuts happening in Calgary condos. I live near a new building called “Vogue.” You can get a brand new, never lived in condo there for around $300,000. Same condo was $400,000 when it was being sold by the building pre-construction.

More inventory is coming online every month and they are still digging holes on new condos. You’d have to be a fool to buy one at ANY price right now.

It may not seem intuitive, but I believe that the only thing propping up the Calgary market is the Toronto and Vancouver markets. While those markets are at peak froth, there is a certain amount of “spill-over effect” in Calgary and other cities.
———————————————————
I work a few blocks away from the Vogue condos, looking like more and more listings appearing on rentfaster.ca as they can’t sell them – burn baby burn! Disco inferno

#77 april on 06.04.17 at 11:57 pm

#72 – March 31 was the expiry date to apply for the interest free loan. How many months do they have to close on their property? Does anyone know?

#78 boots on the ground in ptown on 06.05.17 at 12:01 am

Feds complicit, reeks of desperation.

mhanson.com/6-2-hanson-wow-big-housing-mortgage-easing-news-changes-things/

Since its the weekend, I’ll boorishly input off topic anecdotes from stateside: suburbs of portland have been HOT for real estate. Friends just sold and got out of dodge, were told by agent they’d better sell in 6 monthes if they’re going to, rather than rent it out like they first thought to. They made bank.

Kooteneys were beautimus over the long weekend. No cell service, no wi fi just those hole in the wall hot springs…and unbelievably breathtaking views, no cars etc. Slap back to reality to be back to deafening traffic, machine gun bumper stickers, big screens running reality cop shows that, to me anyway, glorify brutality-in a small town WA auto parts shop!?

How to short the US auto market? its maybe not The Big Short but The Medium Short as Jamie Oliver called it.

#79 Paul on 06.05.17 at 12:12 am

The bubble will be officially popped.
When you see the first ad with the heading.

Vendor has bought must sell. !!

#80 rates vs capital on 06.05.17 at 12:13 am

Oh my, it looks like my domino theory with the spread of foreign capital has finally made it into the news – a 26% increase in the value of Fraser Valley homes coupled with warnings of illegal activity by foreign purchasers.

Of course, when the media reports it, its already an established trend by 6 months or a year. I warned everyone almost a year ago.

But hey, remember, foreign capital only constitutes ‘5%’ of the market – according to those same people that credibly generate the ‘franken numbers’ right?

http://vancouversun.com/news/local-news/fraser-valley-board-warns-offshore-clients-seeking-to-misuse-realtor-bank-accounts

#81 Bungalow Jack on 06.05.17 at 12:21 am

#52 WUL on 06.04.17 at 8:05 pm
In case you weirdos hadn’t noticed, the Geelong Cats are in 3rd place in the Australian Football League. The Toronto Argos can only dream.

FLOP, get well soon and get back to swinging that 9 pound hammer.

M61(Spry)OilyAB

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

Hey WULLY,well I never thought I would see you write about the Geelong Cats again on this blog after they hit you in the hip pocket for $20, but this is why I tune in every day because you never know what’s gonna happen.

The Dogs won last year ,but as I told you a while back I think that it’s the year of the Cat.

Actually I’m not sure if you know but a guy from your neck of the woods won the title a couple of years ago.

As far as getting back to work ,I had a setback but am grateful for all the support and well wishes I have received on this blog…

M42BC feeling like M62BC
————————————————————————————————————————————–

Yeah…! Mike Pyke. Quite the career Down Under. Took up Aussie Rules cold turkey, and made it to the top. Did you know he took an intercept in-goal to in-goal solo to dot a length of the pitch try down for Canada vs the All Blacks at the World Cup.
Only human on the planet to have done both….

#82 Fake News on 06.05.17 at 12:36 am

#49 Smoking Man on 06.04.17 at 7:24 pm
Wow Bill Morneau wanting to know where a reporter lives when the reporter asks him about Bilderberg.
Passive agreeseve threat my call on it.

What’s he even doing there?

https://youtu.be/PgmeR6tBjMI

________________________________________

He is probably planning a nationwide carbon tax just like Gordon Campbell did which guaranteed him a cushy job in London with his own driver and chef. Disgusting.

#83 Ponzius Pilatus on 06.05.17 at 12:43 am

#109 allan on 06.04.17 at 11:04 pm
No need to worry about Terrorism as more people die of heart attacks. Nothing to see here folks, keep those borders open.
—————
I think what you meant to say is:
keep the arteries open.

#84 yorkville renter on 06.05.17 at 12:45 am

#55 – i doubt its the buyers who listed… my guess is the deal fell through – no financing

#85 Gotta Get Out of Calgary on 06.05.17 at 1:03 am

From my post in the May 30th Dippernomics blog:

“Condo #2: 1-bedroom originally listed at $219,888 (really, someone is still trying to use that obvious tactic?). Price reduced to $212,000, now listing at $210,000. Existing tenants moved out this month. Unit is now showing up in online rental listings while remaining up for sale. (Because of course, new tenants will move in on the understanding they may have to move out in a month or two when it sells – yes, this is sarcasm.)”

All three condos still up for sale (with two also up for rent simultaneously). Listing on Condo #2 now dropped to $208,000.

#39 Gregor Samsa: certain truth to what you posted.

Condo sales are floundering in Calgary. Plenty on the market (and more joining the list each day) but older builds, conversions from rental buildings, and any new builds outside the downtown are not selling. The craziness is that developers are still building. (In spite of the flurry of new developments that went into receivership a few years back which left Calgary with a bunch of holes in the ground.)

A new development in the Chinook area was slated to be an “office condo” building. Marketing tag line: Why lease when you can OWN your own office?

Signage indicated bottom floor was to be all retail with tenants already lined up. Top 3 floors were to be “office condos”. Weeks ago, the work stopped, the equipment disappeared and the signage was removed. Nothing happening. Recent article in the local paper about this build quotes the developer as stating that the 25% downtown office vacancy made the developers uneasy. So instead of office condos, the plan has changed to keep the bottom floor retail and now make the top three floors residential condos. (Because of course, we don’t have enough residential condos on the market.)

Fools.

#86 crowdedelevatorfartz on 06.05.17 at 1:26 am

@#41 SWL1976
“You’re right. Plead ignorance. For like your moniker… It suits you well….
*******

On another note.

I’ll take a medium pepperoni with extra cheese …….just hold the whine.

#87 Joe2.0 on 06.05.17 at 1:55 am

Only thing that’s going to effect the West Coast prices will be a disaster.
It’s easy to be a foreigner and enter the market.
No probelmo

#88 The Dude on 06.05.17 at 2:41 am

“Finally, first-timers are still labouring under the misapprehension that it’s different in Vancouver, prices will always rise and if they don’t “get on the property ladder” now they’ll forever be frozen out. “-Garth
——

Wtf? First timers who have purchased have been far better off since this blog begun. Have you factored that into your math? Apartments are catching up to detached now. Most who didn’t buy have now been priced out and will never be able to save because of high rents. Those who can get into the market are, because every single year prices go up, along with rents because people shockingly want to live there. But guess what? There is not nearly enough housing in Vancouver’s market to meet the demand. You at least recognize that vacancy rates are low now. And everyone will either suck it up and pay a ridiculous price to rent in Vancouver and save nothing, like other major international cities, whether you work for Amazon.com or not, or they will do what they can to purchase and build equity. What don’t you see that everyone else does? Inflation at 3% on something worth $500,000 is a lot more than 7% on a $50,000 portfolio, and that doesn’t even factor in the principle payments. This smoke show will go on for at least another 5 years now.

#89 GreaterFool says phooey on YVR RE...correct on 06.05.17 at 3:08 am

$ volume sales HALF for Detached from a year ago ($600 Million less) and Condo’s a bit less than a year ago.

Read the REBGV report, page 6, and sales volumes still WAY down from a year ago. For example:

-Detached -34.5%, Attached -10.6%, Condo -14.1%
-For the 15 YVR RE regions, only 6/45 show sales increases in either Detached, Attached or Condo’s.

Agree, there will be YVR Realtors soon to hand in their A9 key fobs with fewer sales and $ volumes down from last year.

#90 RE: GreaterFool says phooey on YVR RE...correct on 06.05.17 at 3:10 am

Reference for $ volumes down in YVR RE:

http://vancitycondoguide.com/vancouver-buyers-600-million-less-on-real-estate/

#91 Sara on 06.05.17 at 6:09 am

Hi Garth,
I enjoy reading your blog and would love your perspectives on the following:
1. A hedge: For those of us millennials who aren’t yet in the Toronto real estate market, if we find a home that we like and can see ourselves there for the next 10+ years, isn’t that a hedge? I was dead set on buying myself a cool 1br loft 3 years ago but then talked myself out of it because “I didn’t want to buy at the peak”. But ironically, I would have been able to own it 100% by now!! I’ve had to up my budget significantly (more than 2X) as I look for a humble home in Toronto. I’m being very picky though as I’m looking for LT value. I know you own at least 2 properties (home + ice cream shop). Do you buy the “hedge” logic?

2. Surge of listings: as someone who is actively looking, I agree that there is literally a FLOOD of listings. But for my $1.1m budget, I am seeing mostly triplexes (i.e., income properties) and old/crappy homes that the owners aren’t wasting a cent to upgrade. The truly beautiful, rennovated, open concept options are few — and they often arent sold on offer night and end up re-listing for $1.25m to $1.5m. That tells me that the flood consists of amateur landlords and “old ppl” who are opportunistically cashing out, ie, “sure why not. Let’s put the house up as is and see how high of an offer we could get.”

#92 Hogtown Indebted on 06.05.17 at 7:03 am

The first news and comments on the real estate data are out this morning.

First out of the gate, just heard on CBC radio Michael Hlinka. He says again it’s not really a bubble, and the listings to sales changes are just a kind of normal standoff. He says the US 2008 problem was caused by massive changes in interest rates, that will not happen here. He sees maybe a correct of a couple percent per year for a few years, that’s about it, and the argues that foreign buyers will prop up the GTA no matter what else happens.

(All this happened, somewhat ironically, in the same hour as another report about how young people face so much precarious work and cannot get started in life.)

#93 Howard on 06.05.17 at 7:03 am

#88 The Dude on 06.05.17 at 2:41 am
“Finally, first-timers are still labouring under the misapprehension that it’s different in Vancouver, prices will always rise and if they don’t “get on the property ladder” now they’ll forever be frozen out. “-Garth
——

Wtf? First timers who have purchased have been far better off since this blog begun. Have you factored that into your math? Apartments are catching up to detached now. Most who didn’t buy have now been priced out and will never be able to save because of high rents. Those who can get into the market are, because every single year prices go up, along with rents because people shockingly want to live there. But guess what? There is not nearly enough housing in Vancouver’s market to meet the demand. You at least recognize that vacancy rates are low now. And everyone will either suck it up and pay a ridiculous price to rent in Vancouver and save nothing, like other major international cities, whether you work for Amazon.com or not, or they will do what they can to purchase and build equity. What don’t you see that everyone else does? Inflation at 3% on something worth $500,000 is a lot more than 7% on a $50,000 portfolio, and that doesn’t even factor in the principle payments. This smoke show will go on for at least another 5 years now.

—————————

1) Garth was clearly talking about first-timers buying NOW. There is no way middle-class Vancouverites will be ahead by buying versus renting at this point in time.

2) Vancouver is not, has never been, and likely will never be, a “major international city”. What does Vancouver have, economy-wise? Let’s see. There’s Telus. Lululemon. Some regional offices and a few start-ups. That’s about it. Salaries are about half what they are in San Francisco while house prices are similar in the two cities. Real Estate makes up 40% of BC’s economic growth and one can assume it’s closer to 50% in Vancouver. It’s a shell economy of deluded over-leveraged people selling overprice homes to other deluded over-leveraged people.

#94 Cottingham a bargain on 06.05.17 at 7:26 am

#18 Howard on 06.04.17 at 4:22 pm
A Facebook “friend” (actually someone I knew in highschool and whom I dislike intensely) posted an open house for his townhouse in Maple, Ontario. I was curious so I looked up the history.

It was originally listed at $1,049,000 (yes, for a townhouse in effing Maple! oh but it has a “stunning open-concept layout!”). That was a month ago. They’ve since cut $100K off the asking price, now listed at $949,000.

The Facebook post had a hint of desperation in it : “Let’s get this house sold.

——-//-

This guy is Italian for sure right Howard? Probably bought another home already because after all property only goes up and he figured he would be able to make more money in both ends .

#95 maxx on 06.05.17 at 7:51 am

#19 Entrepreneur on 06.04.17 at 4:27 pm

Bullseye….as if a market for carbon credits and tankers of lip-service can prevent/reverse current damage and damage to come.
Strikes me as a yet another highly profitable consumer product for “absolution”.
Later, in the schoolyard of life, fools can wave their credits around and “prove” they’ve done their part for triple bottom line. Quel scam…..ProfitProfitProfit is more like it.
“Oh yes, we must be the custodians of the planet for our children!”

#96 Smoking Man on 06.05.17 at 7:52 am

Waiting the TREB spin?

#97 TurnerNation on 06.05.17 at 8:43 am

Appears it was an exciting weekend at Seneca on SM’s feed.
The headlining band ‘Gartho and the Grammarians’ – a paternal alt-folk music group – was met with resounding jeers and flying Bud bottles.

However a hastely re-formed grouping: ‘Great Galloping Garthos’, pronounced themselves
‘b-bad to the bone’ after one bourbon, one shot, one beer and saved the day. Cougars swayed and SM slayed.

#98 Hollywood Jack on 06.05.17 at 9:31 am

#16 Keith in Calgary on 06.04.17 at 3:39 pm

All of a sudden in YYC it’s raining DOWNTOWN/BELTINE condos under $200K……….it’s just like a tsunami of listings and price reductions has started.

$100K – $150K has been shaved off the mid range market asking prices within 18 months……….there’s nothing really between $299 and $450K…………and everything new and around 450K – $550K is like 450 square feet…..LOL !!!

Severance packages have finally run out, bank credit is turned off, tenants have evaporated, and competition is fierce……….schadenfreude baby…………schadenfreude.
———————————————————-
I’ve been tracking condos in the Cooperwood area of Calgary and just noticed a further explosion in listings, 9 new listings, in addition to the 15 already for sale.

This could be the Armageddon we’ve been waiting for as Toronto is now burning.

#99 Hollywood Jack on 06.05.17 at 9:32 am

Here is the link btw:

http://bestcalgaryhomes.com/condo-building-search/copperwood/l/SearchResults.form?_pg=1

#100 Ole Doberman P. on 06.05.17 at 9:39 am

Toronto sales down big, listings up bigly:

http://www.bnn.ca/bnn-s-daily-chase-toronto-home-sales-down-in-may-listings-surge-1.770238

#101 Calgary Rip Off on 06.05.17 at 9:40 am

Update:

CONDOS may be reduced. Single detached are not.

Still around $500K for a $200K place. Nothing to see here, move along.

Calgary is still a rip off.

#102 Lee on 06.05.17 at 10:02 am

Don’t get exited by the TREB numbers for TO folks. Just a minor set back. People are just sitting back and re-assessing the situation. Expect the numbers to bounce back by August 2017. Too much pent up demand out there and Milleniels haven’t even begun to start buying yet. Most buyers have a wait and see attitude, but they’ll be back.

#103 Ole Doberman P. on 06.05.17 at 10:10 am

#39 Gregor Samsa on 06.04.17 at 6:44 pm

#16 Keith in Calgary

Some big hair cuts happening in Calgary condos. I live near a new building called “Vogue.” You can get a brand new, never lived in condo there for around $300,000. Same condo was $400,000 when it was being sold by the building pre-construction.

More inventory is coming online every month and they are still digging holes on new condos. You’d have to be a fool to buy one at ANY price right now.

It may not seem intuitive, but I believe that the only thing propping up the Calgary market is the Toronto and Vancouver markets. While those markets are at peak froth, there is a certain amount of “spill-over effect” in Calgary and other cities.
——————————————————
I’m seeing 7 Vogue condos on rentfaster, lets see this jump over the summer. Speculators are coughing up blood seeing how the price of oil is headed to $25.

Now rates set to rise too, can you say bag holder!

#104 Rational Optimist on 06.05.17 at 10:12 am

Real estate boards and media are focusing on the year-over-year increase, which certainly is pretty impressive, and glossing over or ignoring the price drops from April to May. Normally I might agree with this- what can you tell from one month’s results? But it’s May, so even a tiny (3%) drop is meaningful.

In KW, prices in May slipped 3.1% from April- but the headline was that they were up 31% from last May. Listings were up by a third from April.

You could easily read this as saying that your house is worth less now than six weeks ago. If a buyer, you could read that houses are cheaper than six weeks ago, and you might as well wait for them to be cheaper still. I wonder if people will read it that way, though.

#105 TREB not much spin on 06.05.17 at 10:47 am

May 2017 – down by 20.3 per cent compared to 12,790 sales reported in May 2016. Sales of detached homes were down by 26.3 per cent. Sales of condominium apartments were down by 6.4 per cent.

Active listings – the number of properties available for sale – at the end of May were up by 42.9 per cent compared to the record low a year earlier.

The average selling price for all home types combined for the TREB Market Area as a whole was up by 14.9 per cent to $863,910.

________________

Of course very bad for a peak sales month.

Below Apocalyptic Financial Post and BNN, Garth’s favorite:

http://business.financialpost.com/personal-finance/mortgages-real-estate/toronto-home-sales-drop-most-since-recession-as-new-rules-put-brakes-on-market

http://www.bnn.ca/toronto-home-sales-plunge-20-3-in-wake-of-wynne-government-intervention-1.770080

#106 Tony on 06.05.17 at 10:51 am

Home prices drop 6.2 percent month over month April to May in the GTA. The figures also show the first time buyer is all but non-existent and all the buyers are speculators.

#107 marketpundit on 06.05.17 at 10:56 am

I like how TREB and media are trying to spin RE story for TO.

Headlines say:” Listing are surging, but prices are still up year-over-year.”

Only CBC, I believe, made some effort to state that the prices have retreated on the monthly bases.

“Prices down from April 2017 to May 2017

Comparing home prices from the last two months, however, tells a slightly different story: the average price of homes in the GTA dropped by more than $55,000 — from $919,614 to $863,910 — in May compared to the previous month.”

#108 Ron Maiden on 06.05.17 at 10:57 am

#101 Calgary Rip Off on 06.05.17 at 9:40 am

Update:

CONDOS may be reduced. Single detached are not.

Still around $500K for a $200K place. Nothing to see here, move along.

Calgary is still a rip off.
——————————————————-
Patience, condos normally dive first in an unhealthy market, detached to follow.

#109 Cheekmonster on 06.05.17 at 10:59 am

Today TREB pointed to a 14.9 per cent increase in the average price of a home from a year ago, but the $863,910 May figure for the GTA compares with an average of $920,791 in April, a 6.2 per cent DROP.

#110 Tony on 06.05.17 at 11:02 am

https://realestatetourism.ca/torontos-housing-market-feels-chill-from-provincial-measures/28578

https://www.theglobeandmail.com/real-estate/toronto/torontos-housing-market-feels-chill-from-provincial-measures/article35200680/

#111 YOW renter on 06.05.17 at 11:03 am

OTTAWA, June 2, 2017 – Members of the Ottawa Real Estate Board sold 2,300 residential properties in May through the Board’s Multiple Listing Service® System, compared with 1,919 in May 2016, an increase of 19.9 per cent. The five-year average for May sales is 1,946….
The average sale price of a residential-class property sold in May in the Ottawa area was $436,625, an increase of 7.4 per cent over May 2016. The average sale price for a condominium-class property was $270,993, an increase of 2.3 per cent over May 2016.

http://www1.ottawarealestate.org/home/NewsInformation/LatestNewsRelease.aspx

#112 Tony on 06.05.17 at 11:05 am

First time buyer is kaput.

CMHC said it insured 48,746 housing units in the first quarter, down 41 per cent from 82,834 units in the same period last year. Homeowners insured 18,624 units with CMHC in the quarter, a 23-per-cent drop from 24,162 units last year, while institutions bought portfolio insurance for just 4,662 units, down 87 per cent from 36,690 units last year, after CMHC hiked premiums on that insurance category.

#113 marketpundit on 06.05.17 at 11:12 am

TREB’s data
2017 Monthly Stats: Homes Sold and Ave. Price

January: 5,156 ; $ 768,373
February: 7,967 ; $ 876,773
March: 12,027 ; $ 916,908
April: 11,594 ; $ 919,614
May: 10,196 ; $ 863,910

#114 TrumpForTheAges on 06.05.17 at 11:18 am

This blog for over six years has touted that the Canadian real estate market is a bubble waiting to pop. And…that thesis was (partly) based upon the belief that the low interest rate environment that spawned the bubble would start to normalize and thereby precipitate a correction.

What we are seeing is there is volatility and May certainly reflects a market re-calibrating. However…it is a stretch to suggest that there is no doubt that the bubble has started to implode. Here’s why: we are seeing softening in the US economy….and political risks increasing. Rates may not normalize at the pace that the market has already priced in. Two…we continue to see market interventions with a bias towards stimulus and currency devaluation. The Canadian currency has devalued thereby making the real estate market not as expensive as Canadians perceive. If you look at the price of gold in Canadian dollars and compare that to housing prices you will see that the perception that the market has peaked and is starting to implode in a more tempered way. That is to say that the foreign ownership issue and other global macro factors may end up giving this Canadian real estate market more legs than this blog wants to believe.

#115 Lee on 06.05.17 at 11:41 am

#106, Tony

How many times over the last 10 years has TREB reported on a 6% drop month-to-month in sale prices for Toronto?

I’d guess at least 5 or 6 times. Each time, what followed? To the moon Alice.

Also, where did you get your stat that first time home buyers are non-existent? What are you, the Washington Post?

How many times have prices dropped 6% in a month? Never. — Garth

#116 Asterix1 on 06.05.17 at 11:53 am

1. Toronto Star: “Housing prices dip slightly but tight supply keeps costs up”. Wow! What a joke of a headline.

– “Dip slightly”: 6.2% in a month is huge!
– “Keep costs up”: sure, if you consider the crazy price surge from last few months. The classic bubble correction surge.

2. CBC: “TREB May numbers show a soft month for Toronto real estate market…..but experts say the trend is likely temporary”

– “soft month”: Massive sales declines and killer price drop in 30 days of 6.2%!
– “expert say”: The so-called expert is from TREB.

3. National Post: “Toronto home sales drop most since recession as new rules put brakes on market”

– Finally a headline that is not sugar coating this massive drop in sales and prices.

Seems advertisement revenue from the real estate industry keeps the print media happy!

These type of articles form Toronto Star and CBC keeps the real estate industry happy.

#117 IHCTD9 on 06.05.17 at 11:55 am

#88 The Dude on 06.05.17 at 2:41 am

…What don’t you see that everyone else does? Inflation at 3% on something worth $500,000 is a lot more than 7% on a $50,000 portfolio, and that doesn’t even factor in the principle payments. This smoke show will go on for at least another 5 years now.

__________________________________________

Uh, yeah. And 3% on something worth 100 Million is worth way way more than 7% on a $27.35 portfolio…

How about comparing apples to apples? Honest homeowners who borrow money to own, use a realtor, pay property taxes, commissions, lawyers, land transfer taxes, interest, maintenance, upgrades, repairs, and insurance will virtually never outperform an investor who deposits an equivalent sum of all of the above costs combined into his/her portfolio instead of a house.

Maybe it’s possible to win for a few years in a few markets – maybe once in a lifetime – and even then, all is lost if the lucky winners didn’t sell. It’s a small window of opportunity too, as we’re seeing in the GTA. All those Italians that saw their home values go upa upa and decided to cash out showed up at ReMax too late. Better luck the next time a bubble inflates, like in 30 years or so.

Maybe you sell at a profit, maybe you don’t. 90+ % long term owners will not make a dime if they are completely honest about how much was dumped into their digs. My place has more than doubled since purchased, but there’s no real profit there if I sold tomorrow. Interest payments, taxes, maintenance, repairs, insurance, – 4 of 5 of these never come to an end, and always go up.

It costs me about 700.00/month to live in my own paid for house, and I do my own maintenance and repairs. I’d be ecstatic to sell, crunch the numbers and found I have put a roof over my head for $100.00/mo all in/out after 25+ years. I sure as hell would not be expecting half a mil+ in gains like I do for my portfolio.

Making money on houses for the average dude is just accidently buying at the right time and place, and then selling at the right time. Even the pro’s find it tough to do on purpose.

#118 Mattl on 06.05.17 at 12:10 pm

Real estate bear here that doesn’t see any significant corrction coming to the lower mainland as long as rental inventory and interest rates remain low. We are listing this week and would love to rent but there are literally no homes available for a family with two dogs. Unless we are ok with living in a dive in downtown chilliwack or abbottsford, and are willing to put the dogs down, I don’t see any way we can rent for a few years to wait it out. And if we did ditch the dogs – not an option – comparable houses are in the 3k range per month, to live in the Valley near a good school.

So it’s not just about moisters being idiots in this market, there is a huge shortage of quality rentals. And if we did leave the market its just as likely that we would burn 70k on rent, and buy back into a market that is up another 10-20%. I believe that the party has to end out here at some point but man it’s been going in forever and the fundamentals – cheap money and lack of housing – encourage the purchase of RE.

And yes, we could leave BC but I rather like boating 80 days a year. Lifestyle matters.

#119 Tony on 06.05.17 at 12:15 pm

#115 Lee on 06.05.17 at 11:41 am

https://www.theglobeandmail.com/real-estate/the-market/efforts-to-cool-housing-market-sparked-drop-in-cmhc-insurance/article35152648/

Shows the first time buyer is all but out of the market and with rates rising at the shadow lenders the first time buyers will become first time renters.

#120 jess on 06.05.17 at 12:27 pm

105 Contrarian Coyote on 06.04.17 at 4:36 pm
said:”If you’re using Snopes as your internet factchecker, you’ve got problems.”

“Their rebuttals cite sources, and are not simply manufactured mythology.”

Number of Snopes rebuttals debunked by the Daily Mail? – ZERO

http://www.skeptical-science.com/critical-thinking/attack-fact-checking-site-snopes-valid/

#121 Lee on 06.05.17 at 12:49 pm

#119 Tony,

Doesn’t actually refer to first time home buyers but I guess if one reads between the lines it probably says first timers are keeping away.

#122 Bengals on 06.05.17 at 12:53 pm

Put our house up on the market May 3rd., here in Burlington. Sold over the weekend finally. Fair amount of traffic but only one offer. We know we missed peak house but we’re happy with the sell price so we can get out.
There were 4 houses for sale in our subdivision 6 weeks ago, now there are 29.
Garth’s Rule of 90 is now firmly in place.

#123 Eks dee Sipal on 06.05.17 at 1:20 pm

It’s too late. https://youtu.be/q8b8Nz31jZw
Government won’t help you now. Banking parasites won’t help you now. Even Garth can’t help you anymore. You’ve been warned for years… Single Family Detached going back to actually match wages. Interest rates going up. CAD to fall hard. Fraud in every corner. Remember, if it’s on the news, it’s fake, either a hoax, or a drill. Look for the brand placements. Every single second of airtime is paid for. Why would they give you the news for free? Think, people.

#124 InvestorsFriend on 06.05.17 at 3:55 pm

Real versus paper assets

I have never bought into the distinction between real and paper assets.

For example a home ownership is represented by a paper deed.

If I owned shares in a company that owned only real estate why would that be a paper asset?

The real distinction might be in assets that you own outright and control like a house versus owning a miniscule percentage of a REIT where you have no control.

#125 AGuyInVancouver on 06.05.17 at 4:14 pm

#102 Lee on 06.05.17 at 10:02 am
Don’t get exited by the TREB numbers for TO folks. Just a minor set back. People are just sitting back and re-assessing the situation. Expect the numbers to bounce back by August 2017. Too much pent up demand out there and Milleniels haven’t even begun to start buying yet. Most buyers have a wait and see attitude, but they’ll be back.
____________

I hope you earned your gold jacket for that one Lee, and for #115.

#126 Dave on 06.06.17 at 12:38 pm

Is Montreal the next HOT market

#127 David on 06.07.17 at 12:59 am

#9 “Can 400 people on the margin really be market makers? I await the answer…

That would equal 10% of sales last month. You tell me… — Garth”

Ok so Garth comments suggesting 10% of sales can be a market maker, yet foreign buyers aren’t at 5% as suggested in past blogs? Plus we all know the foreign buyers have more than 5% influence when counting numbered companies or other methods of getting in under the radar. I like reading this blog, but the contradictions are mind boggling.