Cracks

Another day, another chink. A few of them actually. I sure hope, like Denise, you reaped real estate’s unearned, windfall gains when this pathetic blog begged you to do so. Cuz, after all, it’s too late now.

She’s giving her notice at work in the next week or two, plans to retire in August and will be taking more gains out of her investment portfolio than her clerical job paid monthly for the last 21 years. “If I had not sold that house in March, I’d be working another seven or eight years,” she says. “I just can’t believe that this has happened to me. I am blessed.”

Nah, just smart. When a house triples in value, why on earth wouldn’t you cash in? Greed? Inertia? Fake news? Now Denise’s portfolio will be paying her rent – a better place than she sold – and replacing her salary at a lower tax rate. “I got out just in time,” she says, looking like she ate the entire pie.

As mentioned here when it happened Friday, the latest job creation stats in Canada will help end this era of rock-bottom interest rates. Our dollar spiked Monday on words coming from the second in command at the Bank of Canada suggesting the first rate hike in seven long years may be coming a lot sooner than it takes to grow one of those awful man buns. The word on Bay Street is the cost of money might even start creeping higher before the end of this year, given the latest GDP pop and now the labour numbers. That’ll sure surprise folks.

Meanwhile the US hikes its key rate for the third time in about six months on Thursday. Things won’t stop there. Trump or no Trump, the States is sliding into a wage-price dance that will bring more inflation and mortgage increases. You can dis me, or lock in. Only one of those two will be smart.

There’s more.

Toronto dropped a bomb on Airbnb this week – and the condo market. Local politicians will soon outlaw short-term rentals, except in properties people own as principal residences. Ouch. There are thousands of high-rise units in the downtown core which “investors” bought for the sole purpose of leasing them out by the night or the week. In fact, this has been one of the only ways to financially justify buying a condo since sticking a long-term tenant in there guarantees negative cash flow.

But no more. Toronto will almost certainly ban people from listing for rent properties they don’t occupy. Airbnb will be regulated locally with rentals recorded and monitored, including a registry of all people putting units online. This info, for sure, will be pipelined to the CRA. Says the mayor: “It is taking housing off the market that might otherwise be available for long-term permanent renters as it were — and that’s a problem for us.”

This is the second sucker-punch the condo market’s taken lately – after the imposition of universal rent controls by the Ontario government, as part of its anti-bubble crusade. The impact of that is already palpable. May housing numbers sucked with lower sales, falling prices and swelling inventory. June’s no better.

According to veteran realtor John Pasalis, boss at Realosophy, the lights continue to go out, with a holy-crap! decrease of 44% in house sales last week compared to the one which went before. Says John: “The sales numbers keep getting worse. It’s like they’ve fallen off a cliff. It’s this downward momentum week after week.”

Hmm. And all this news is giving a patina of respectability to David Madani, a long-time housing bear who thinks we’re just nuts. Vancouver and Toronto are now on the cusp of a “severe downturn” that will ripple out into the hinterland. The damage? “I see a correction of between 20 to 40 per cent in the Canadian housing market – over five years,” he told a dreadful little business television network that shall remain nameless on Monday. “The uptick in Vancouver home sales is nothing more than a head fake,” he also said on BNN, “while the worsening sales slump in Toronto’s much larger housing market points to a correction in prices.”

So, this could be a summer to remember. Higher mortgages creeping in. Condo speculators and investors jamming the exits. Bloating listings and listless buyers. Sales cratering now, prices fading later. As potential purchasers figure that out, they stay home in droves. Prices slip further.

Is a 30% haircut possible during this melt? Of course it is. That’s exactly the magnitude of the last major correction in the early 1990s. Yes, prices eventually recovered, but it took 14 years.

More time that Denise has.

242 comments ↓

#1 Davey & Goliath on 06.12.17 at 6:47 pm

But Davey…

…Davey Madani been talking about a 30% drop in Canadian real estate since, well… real estate went up about 150%.

https://m.youtube.com/watch?v=bfTwJQmvk0U

#2 TCContrarian on 06.12.17 at 6:49 pm

I sold – not at the peak – but on the way up!

Rather this than on the way down, down,…down.

Then I bought gold (only shares in gold companies, so never got the pleasure of actually licking it!)

Now I’m sitting pretty with liquidity – and ONE expense: RENT.
My gains in 2016 have paid for this year’s rent already (12 months worth), so what’s not to like?

TCC

#3 Raging Ranter on 06.12.17 at 6:49 pm

I noticed the rental market here in Orleans suddenly tighten over the past year. I wonder if AirBnB can explain part of that. It’s not like we’ve seen a jump in population or anything. In fact, government jobs are moving to the west, not the east end of the city.

#4 Mark on 06.12.17 at 6:51 pm

With a collapsing RE market that can no longer be covered up through sales mix changes? With employment quality being absolutely awful, particularly in the Scientific and Professional Services sector? With the Canadian dollar surging as a race unfolds to come up with CAD$ to repay CAD$-denominated mortgage and consumer debt? Rate hikes, not a chance given the horrible fundamentals.

If anything, indications strongly point to the necessity of rate cuts in the not-so-distant future. I’ll stick to my CAD/USD = 1.25 or less threshold for the Bank of Canada to finally act and cut the rate, and given that the next announcement is a mere 5 weeks away, it is plausible, perhaps distantly, but still plausible that the Bank is forced into policy action to fight Canadian deflation.

#5 i'm not poloz on 06.12.17 at 6:52 pm

Poloz still desires a US$0.50C loonie, so that was why after lunch with Wilkins, he sent her to do the speech, because he knows that he is tempted to talk down the loonie below 70 cents to boost exports while Morneau wants every Canadian to work for free.

#6 ME Here on 06.12.17 at 6:54 pm

The question is… will Vancouver adopt the Air BnB ban as well?

If the city is SERIOUS about putting residents first, it will. Of course, this will mean houses with basement suites will ALL be hoteled out.

#7 Keith on 06.12.17 at 6:55 pm

Prices have much further to go in Vancouver! Not just the best place on earth, supply/demand in big trouble! Buy now! Check out the unimpeachable source in this article.

http://www.vancourier.com/news/vancouver-housing-market-ain-t-seen-nothing-yet-1.20550940

#8 akashic record on 06.12.17 at 6:55 pm

Local politicians will soon outlaw short-term rentals, except in properties people own as principal residences.

===

Communists, trying to rig the market to fit ideology.
It has great historical track record.

#9 crdt on 06.12.17 at 7:01 pm

in my Langley neighborhood a lot of houses are suddenly for sale, I mean a lot. On one corner two houses sold, then a third popped up right after. Almost every street has either a for sale sign, or a recently sold property. There is a lot of supply that seems to be coming up drowning out the sold properties… Could it have finally arrived, could this be the summer of discontent?

#10 Andrewski on 06.12.17 at 7:10 pm

What the, even MSM is confirming the slow down:

https://www.thestar.com/business/real_estate/2017/06/12/toronto-home-sales-decline-continues-into-june.html

#11 crowdedelevatorfartz on 06.12.17 at 7:10 pm

@#112 P’s Daughter

“You are nobodies friend and if you had any real friends you wouldn’t be on this blog 24/7…..”
*******
Alas!
The black Pot doth protest too much to thy Kettle…….

#12 Daughter of Ponzi on 06.12.17 at 7:13 pm

She says. “I just can’t believe that this has happened to me. I am blessed.”
——————————–
You are “blessed” because you saddled some young fool with lifetime of debt and possibly bankruptcy? And smart? This is absolutely disgusting how you guys operate here!

#13 Ace Goodheart on 06.12.17 at 7:13 pm

Denise’s new song, courtesy of Mase:

“It’s like y’all be talkin’ funny. I don’t understand language of people with short money.”

#14 Nonplused on 06.12.17 at 7:16 pm

I think the attack on Airbnb is outrageous! How dare the government dictate what you can and cannot do with a property you own! If you pay your property taxes, who cares if you rent by the month, day, hour, or even leave it vacant? It’s yours and you should be able to do as you please with it.

I think the Airbnb assault is motivated by “contributions” from the hotel industry. They don’t like the competition. It’s the same thing as how the taxi companies went after Uber. I mean sure Airbnb people should have to report their income to CRA just like any business, but the idea that this business model is unacceptable can only mean the mob is involved in shutting it down. It’s easier to shake down one hotel than a hundred Airbnb operators, so the Airbnb has to go. Slide a politician some money and suddenly this is a thing.

Shutting down Airbnb only benefits the hotel industry. There will still be the same number of people trying to find a place to sleep every night.

I personally don’t use Uber, but I have noticed that taxi fares have dropped considerably since they came on the scene. It used to be $60 to get from the airport to my house on the meter and now it’s $52. Same route.

And why are hotels so darn expensive? $200 a night? $6,200 a month? Plus all the taxes? For a postage stamp sized single room that doesn’t even have a stove? It’s ridiculous. No wonder Airbnb is so popular, hotels are just too expensive.

#15 Lumpia on 06.12.17 at 7:16 pm

Well… It seems like I dodged the MOAB by not buying a condo or a house last summer. So much pressure from my pinoy mom and dad :)

#16 DebtFree on 06.12.17 at 7:17 pm

The amount of pain that these variable-rate mortgages are going to feel will be extensive. Living just within your means of paying the mortgage payment each month (at a record low interest rate for years) is asking for trouble.

Does that eventual rate increase spark a selloff due to
the marginal buyer being unable to afford their payments? It’s only a milly… right?

#17 TS on 06.12.17 at 7:17 pm

#3 Raging Ranter

I noticed the rental market here in Orleans suddenly tighten over the past year. I wonder if AirBnB can explain part of that. It’s not like we’ve seen a jump in population or anything. In fact, government jobs are moving to the west, not the east end of the city.

LOL, who would come on vacation to Ottawa and rent a house out in Orleans? I couldn’t think of a worse vacation and I’ve lived in Convent Glen since 1990.

I think the rental market is a little tight because there’s so many townhome condos for sale. I’m looking at Convent Glen – Orleans Wood on the MLS right now and there’s literally 50 possible rental units in townhome condos / apartments for sale ( St. Andre, Priory Lane, across from St. Matts , Timothy Court, Jeanne D’arc areas).

Nobody wants these things…..

#18 dakkie on 06.12.17 at 7:18 pm

Canada’s Debt Reaches CATASTROPHIC Levels! – Why You Should Be Concerned!
http://investmentwatchblog.com/canadas-debt-reaches-catastrophic-levels-why-you-should-be-concerned/

#19 Alero01 on 06.12.17 at 7:21 pm

Did you really have to start this post with a word that’s a racist term used for persons of Chinese ancestry? Could you not have used the work “flaw” or “weakness”?

Chink, n. “a narrow opening or crack, typically one that admits light.” Unlike your mind. — Garth

#20 Mirror, Mirror on 06.12.17 at 7:23 pm

“Trump revels in cabinet’s praise. Got a minute? President devotes first full cabinet meeting to litany of praise for himself … ‘thank you for blessing that you’ve given us’… and everything in US politics. By Tom McCarthy”

https://www.theguardian.com/us-news/live/2017/jun/12/donald-trump-news-cabinet-praise-guardian-minute

#21 Not Mark on 06.12.17 at 7:23 pm

#4 Mark and #109 Mark Yesterday.
If the housing market in Canada implodes I would not count on a strengthening Loonie, infact quite the opposite as nobody is going to want to touch our currency or bonds. Canadians needing to pay off more debt is not going to increase demand for the loonie. Rates could possibly go up in Canada but would probably come down very quickly afterwards. A divergence in interest rate policy like we are seeing between Poloz and Yellen is not good for CAD. If our RE market implodes it is more likely the Toonie is going to be our new 1 dollar coin.

#22 JoeG on 06.12.17 at 7:26 pm

I think David is being kind! If the last bust was almost a 30% drop, Considering this gas bag was far worse than 1990, I would say bust 2.0 will be closer to 60% once the smoke clears.

#23 CL on 06.12.17 at 7:26 pm

Good for Denise!!

I don’t see how the BoC could keep rates low with the US raising rates and the Trump admin calling out currency manipulators.

Think Trump doesn’t matter? Funny how Canada announces big spending in military after Trump calls out the freeloaders. Funny how Germany is also commenting on their trade deficit after Trump calls them out too. Watch not what politicians say but what they do.

Like it, don’t like it, doesn’t matter. The sun still rises and sets on the US.

#24 Victor V on 06.12.17 at 7:26 pm

http://www.financialpost.com/m/wp/news/blog.html?b=business.financialpost.com/news/economy/more-room-for-loonie-to-fall-rbc-warns&pubdate=2017-06-12

The Royal Bank of Canada expects the loonie to fall to US$0.714 from about US$0.74 by the end of the year as the Bank of Canada’s interest rate continues to lag behind that of the U.S. Federal Reserve.

The Fed will most likely raise its interest rate 0.25 per cent this month and again in the fourth quarter to reflect a strengthening U.S. economy after years of monetary stimulus, said RBC senior economist Nathan Janzen.

Meanwhile, RBC expects the Bank of Canada to keep its rate frozen at an abnormally-low 0.5 per cent for the rest of 2017, despite hawkish indications from the Bank’s senior deputy governor Carolyn Wilkins.

#25 Livin Large on 06.12.17 at 7:30 pm

30% blood letting in 5 years…sounds like ’90-’95 all over again.

Who said that “past performance is no indicator…”.

If you really must own land then “go away in May and come back in 2022.

#26 Rainclouds on 06.12.17 at 7:30 pm

Kudos to “Denise” You will be very happy.

Sold the BBY Bung end of 2012 invested per the Oracle of Turner (Now that’s severe lickspittle!)

Got Whacked at work 5 months later, freedom 55. Pension. private sector….

The best part when the tiny office was filled with the requisite Security/HR toadys/boss/transition weanie. Cast a longing eye at the envelope sitting on the desk and blurted “you just made me a millionaire!”
I seemed to be the only happy one, sardined in that teeny office reserved for tearful executions.

The million (with wife’s savings ) is now 1.8 and the bung would probably sell for a tad more than they paid.(If they could sell)

Our Rent in pretentious Yaletown is a deal and tied to Inflation. Costs 12k per year more than the bungalow upkeep. Given realized interest of 109k per year, I dont even pay attention.

I predict much deeper price declines in Van-stupid than 40%, closer to 60%

I also expect Mayor Moonbeam to slap Airbnb here on behalf of the Hotel Lobby ( copying Berlin/ San Fran/ New York/London/ Toronto and every other city in NA/Europe ) Add the “help” of the Green Monsters and Clueless Bolsheviks and it appears the Shit show is coming to an end and RE liars can’t obscure the truth much longer.

Gonna stay the course and pick up a nice Beemer when the House Sales Weasels need quick cash ………..to eat.

#27 mouldyinYVR on 06.12.17 at 7:31 pm

https://tools.td.com/mortgage-affordability-calculator/
What can you afford? – Not very much, by the look of TDs mortgage affordability calculator!
For once a dose of cold reality instead of that saccharine ‘you’re richer than you think’ (Oh wait, those are the other guys!).
The calculator asks:
What is your annual household income before taxes?
How much do you have for a down payment?
What other monthly expenses do you have? Estimate your (all parties) monthly expenses such as groceries, transportation, child care, insurance, shopping, media and regular contributions to savings. Please do not include rent or housing expenses.
The part I really appreciate is the recommendation regarding ‘household maintenance’. Yes, houses are a major liability. Where do you think all that HELOC money is going?
TD recommends saving the equivalent of 5% of your house price every year for emergencies and household maintenance. Quick question – What’s 5% of $750,000./$800,000. / a million!(have fun digesting that one – and remember that’s every year – not once in a life time!)

#28 Winterpeg on 06.12.17 at 7:34 pm

How far a “hinterland” are we talking about?
ie: When will the rest of Canada catch the cold?

#29 VanMan on 06.12.17 at 7:37 pm

I’ve posted many times on here about the impact of AirBnb on the Vancouver rental market and its negative consequences. I have many friends that have purchased multiple condos over the last few years specifically to list on AirBnb – and they make a fortune. I know of more then one person that has formed a numbered company which has purchased several units to list on AirBnb. There are so many people doing this that it has created bidding wars for condos for the sole purpose of AirBnb. It’s so obvious this is happening… I can’t believe there hasnt been Gov’t intervention.

#30 Tiggertoo on 06.12.17 at 7:45 pm

So – if I rent out a % of my primary residence, and the market drops 20% – is the rented portion tax deductible ?

#31 acdel on 06.12.17 at 7:47 pm

Is this “Daughter of Ponzi” the new Smoking Man??? Wow, get a grip Daughter; what do you say Smokie??

Good post Garth; my question, although I do think that interest rates should go up to bring some sanity to this market; is it feasible do to our debt being more then our GDP?

#32 PULSE on 06.12.17 at 7:51 pm

https://anthonybsanders.wordpress.com/2017/06/12/the-dreaded-r-word-bank-credit-and-federal-tax-receipts-continue-to-slow-as-fed-continues-raising-rates/

Perhaps the Fed raises, Central Bank bubbles burst and the Fed slashes so we can all learn to raise rodents and enjoy Brunswick Stew.

But then again, Who am Eye ?

#33 Dee on 06.12.17 at 7:53 pm

Toronto is 45%-60% over priced. Lets see how things go now that sub prime has taken a one-two to the chin.

#34 Freedom First on 06.12.17 at 7:56 pm

Congrats Denise!

Welcome to the freedom first lifestyle.

#35 the Jaguar on 06.12.17 at 8:01 pm

There are days when you walk outside, even without the benefit of seeing or hearing a weather forecast, that you can ‘smell’ rain. It smells like rain in the GTA. It’s just something in the atmosphere. Some with real vision, like Garth and Madani have seen the train wreck coming for some time. Even the big five bank economists had to finally cave and use the ‘bubble’ word. Applying a tax on foreign buyers, shortening amortizations, tightening up qualification standards. All have an impact. But more than any one thing it was the nagging realization that it just wasn’t sustainable. The price increases were crazy. Salaries had not remotely kept up with market appreciation. It was beyond the pale.
Those who have been living in the 20 year credit bubble with no experience or memory of high interest rates are going to need several underwear changes…

#36 young & foolish on 06.12.17 at 8:03 pm

The winds of change perhaps, but like Grandpa says, RE is a loooong term play. Don’t worry folks, there will always be renters and there will always be buyers …

I have detected an increasing concern over the growth and resulting equity valuation distortions with passive investments (ETFs). Anybody care to elaborate on this?

#37 Joseph R. on 06.12.17 at 8:06 pm

#8 akashic record on 06.12.17 at 6:55 pm
Local politicians will soon outlaw short-term rentals, except in properties people own as principal residences.

===

Communists, trying to rig the market to fit ideology.
It has a great historical track record.

————————————————————

How is protecting private enterprises (hotels and B&B) who:

1) play by the market rules;
2) take an equity risk;
3) create local employment and;
4) pay local, provincial and federal taxes;

equal communism?
and have a failed track record according to you?

#38 Jordie McGultan on 06.12.17 at 8:11 pm

Corrections are so beautful! It’s gonna be Yuuuge!!

#39 Joe2.0 on 06.12.17 at 8:12 pm

Que the helicopter.

#40 Lefty on 06.12.17 at 8:15 pm

Average dwelling price in U.S. by state.

http://overflow.solutions/demographic-data/national-data/state-level-analysis/what-is-the-average-home-worth-in-each-state/

#41 Steve on 06.12.17 at 8:17 pm

#12

“You are “blessed” because you saddled some young fool with lifetime of debt and possibly bankruptcy? ”

Young fool saddled him/her self. Are you saying that she should have not sold due to ethical reasons???

#42 HawteRet on 06.12.17 at 8:19 pm

#31 acdel on 06.12.17 at 7:47 pm

Is this “Daughter of Ponzi” the new Smoking Man??? Wow, get a grip Daughter; what do you say Smokie??
>>>>>>>>>>>>>>>>>>

Well no, Daughter of Ponzi is interesting.

#43 TurnerNation on 06.12.17 at 8:19 pm

Hmm I see this weblog keeping its writing
spick-and-span.

#44 Mark on 06.12.17 at 8:22 pm

“If the housing market in Canada implodes I would not count on a strengthening Loonie, infact quite the opposite as nobody is going to want to touch our currency or bonds.”

But actually there will be intense demand for Canadian currency and bonds, as you need CAD$ (and proxies for CAD$ such as GoC CAD$ bonds) to pay off CAD$-denominated mortgage debt.

Canadians needing to pay off more debt is not going to increase demand for the loonie.

Couldn’t be anything further from the truth. Paying off CAD$ debt is the very definition of investing in the loonie and the CAD$.


Rates could possibly go up in Canada but would probably come down very quickly afterwards. A divergence in interest rate policy like we are seeing between Poloz and Yellen is not good for CAD.

In the short term, rate differentials provide some fodder for daytraders, but in the long term, currency valuations are based on trade balances. Canada runs a chronic long-term trade surplus with the US, so the CAD$ should naturally be at a much higher level (and even overshoot) to eventually even out the imbalances.


If our RE market implodes it is more likely the Toonie is going to be our new 1 dollar coin.”

Extremely unlikely. And with exceedingly little CAD$ actually overseas, its not like foreigners can really dump CAD$ either. Quite unlike the trillions of USD$ sitting around the world which can be dumped and even replaced by currencies which represent a far superior store of value such as the CAD$. My long-term prediction of the CAD$ being worth $1.50 USD$ is based on many of these factors coming together simultaneously. Just as, in the early 2000s, a confluence of factors conspired against the CAD$, such as the US tech bubble, a resource-sector depression in Canada, and a global USD$ bubble.

#45 The American on 06.12.17 at 8:28 pm

Lil’ Don Don’s hands are considerably disproportionately too large in that picture. Just sayin’……

#46 Jacques Strappe on 06.12.17 at 8:28 pm

#14 Nonplused on 06.12.17 at 7:16 pm
I think the attack on Airbnb is outrageous! How dare the government dictate what you can and cannot do with a property you own!

—————————-

What an ignorant statement. Apart from the greater need of ensuring housing availability to people who actually live and work in the city, there is the need to ensure that neighbourhoods don’t become hollowed out by speculators renting out to assholes. Check out this situation:

http://www.cbc.ca/beta/news/canada/montreal/tour-des-canadiens-owners-complain-1.4131998

My next door neighbour is a city councillor, and he loves to tell me about the know-it-alls who complain and rant and scream without the slightest research, thought or understanding of urban planning or even a basic understanding of the role of our three levels of government.

I strongly suggest to anyone looking to move to a new neighbourhood to not only investigate the quality of your neighbours, but go sit in on a few public council sessions and see if the city is governed by decent, engaged human beings, or a bunch of jack asses with political motivations and ties to developers.

#47 Game Over on 06.12.17 at 8:30 pm

The BoC can be hawkish right now to buy some time. But they will have to raise rates .25% this year if our data continues to look good or the Fed raises again later this year just to keep pace. I think an 80 cent dollar would be a sweet spot for us right now.

#48 Asterix1 on 06.12.17 at 8:30 pm

#6 ME Here, you mention, “this will mean houses with basement suites will ALL be hoteled out.”

Oh yeah! When I visit a city I really want to be sleeping in someones basement!

– Hearing all their noise and every step they make.
– Looking out the basement window and seeing the owners car. Beautiful. No thanks!

I hope Toronto goes through with their new Airbnb rules.

#49 Barney Rubble on 06.12.17 at 8:32 pm

Did you really have to start this post with a word that’s a racist term used for persons of Chinese ancestry? Could you not have used the work “flaw” or “weakness”?

Chink, n. “a narrow opening or crack, typically one that admits light.” Unlike your mind. — Garth

Surely the person is being sarcastic, Garth. Nobody can be that dense, can they?

#50 Entrepreneur on 06.12.17 at 8:33 pm

Have to agree with #12 Daughter of Ponzi with “you saddled some young fool with lifetime debt and possibly bankruptcy'” So true, and why would anyone think to pass on the debt burden onto someone else a good thing, like NOT. Let’s ruin someone’s life, hehe. What a fool for buying at a high price when the prices are going to drop, lol. So sad that this type of leadership is happening in today’s governing.

We are still in the stage of greed, from the top to the bottom. We cannot move forward with this standard of thinking: me first and you can rot attitude.

As for any leader that is trying to correct this mess, my hat off to you (Trump comes to mind)! Work with him and so should we.

#51 Daughter of Ponzi on 06.12.17 at 8:34 pm

On the other hand, it’s kind of impressive. You screw your fellow man and feel some kind of religious experience. Must be British/Puritan gene in you guys. I just don’r feel “blessed” and “smart” like that.

#52 Daughter of Ponzi on 06.12.17 at 8:37 pm

#34 Freedom First on 06.12.17 at 7:56 pm
Congrats Denise!

Welcome to the freedom first lifestyle.
———————————————–
Thanks FF. It means a lot coming from such a great eunuch like yourself.

Blessed Denise

#53 Happy Housing Crash Everyone! on 06.12.17 at 8:40 pm

Looks like the housing crash is going from bad to worse as sales and prices just plunge. Brampton was a sea of open houses and/or forsale signs with one, two or more of these houses on every street. Very little is selling. My realtor friends tells me there are a few “suckers left” in Toronto(his words) as one house he was trying to sell had 2 offers bothb100k plus below list price. Then one agent managed to trick their clinets in throwing a bid of 20k over asking. Mind you prices were well below last months sale in the area. Happy Housing Crash Everyone! :-) I feel bad for those suckers trying to catch a falling knife.

#54 Painful in Mississauga on 06.12.17 at 8:40 pm

Well all those houses listed on and off Mississauga Road, just keep sitting and sitting, it’s like someone turned the light switch to off for buying properties in Mississauga. The last house that sold in my parents estate subdivision was 1.8 in March, the new houses that were listed in April are priced at 1.4 (they are better homes too because they are on a ravine) however, no sales. The guy next to my parents told my dad that the agent has come back and said, the house will no longer sell for 1.4, the seller needs to lower it again, if he really wants a sale (which he does, cause he already bought another property at the peak in March. So nothing’s
moving. . .but what’s so funny is some dummy a few doors down thinks he’s going to list for 2 million, same type of house that’s not moving at 1.4, so my parents are like, what gives? Did he not read the memo, that peak housing has already passed, it’s just downhill from here. Greedy sellers are so delusional.

#55 crowdedelevatorfartz on 06.12.17 at 8:40 pm

@#31 acdel
“Is this “Daughter of Ponzi” the new Smoking Man??? Wow, get a grip Daughter….”
*******
Nah,
Typical millenial.
Recieved “awards” all through school for “showing up”.
Told “Good Job!” by her parents for not sucking her thumb
Frustrated because she’s priced out of the market due to the dead end Starbucks barrista “career” that wont pay her Bachelor Psych Degree student loan off fast enough.
Too much coffee, too much time on the internet, lack of money, the real world is nasty,…….
I could go on but I think over caffeinated “P’s Daughter” is about to have a stroke…..and by that I mean collapse………my bad.

#56 Entrepreneur on 06.12.17 at 8:40 pm

Except for the earth-sucking fossil fuels, only coexistence and compatibility between earth and humans is accepted.

#57 Entrepreneur on 06.12.17 at 8:42 pm

And not the greed of selling houses to a young person. That young person is a consumer and that is what we want. Not bankruptcy!

#58 crowdedelevatorfartz on 06.12.17 at 8:46 pm

@#29 Vanman
“There are so many people doing this that it has created bidding wars for condos for the sole purpose of AirBnb. It’s so obvious this is happening… I can’t believe there hasnt been Gov’t intervention.”
*******

SERIOUSLY?
Christy Clark is in the back pocket of Real Estate developers and Sales ( #1 Sales Agent Bob Rennie was her campaign fund raiser)
and Gregor Robertson has his nose so far up the Real Estate developement cartel’s butt he can sniff the profits with his toes…..

No.
Time for the Feds to grow a pair and crack down on this tourism, ponzi, pseudo hotel bullshit.

But we are talking Justin Trudeau. Selfie promoter extrodinaire……

#59 Milton has hit the skids on 06.12.17 at 8:46 pm

Terribly delusional Milton has had a rude awakening over the last few weeks, homes that are selling are down by about 50 grand from Feb & March prices. There were 53 new listings within a tiny area near the railroad tracks within the last few days. What’s so hilarious is one guy listed his particle board and hot glue gun Mattamy home on a 40×80 lot, for 1.7 million – what a laugh! Good luck with that Indar.

#60 Entrepreneur on 06.12.17 at 8:54 pm

Oh, I forgot. Forget the consumer we can buy cheaper products from another country. Isn’t that call free trade? Oh, right, what am I yapping about. Forget the people in the nation that pay taxes so they can be productive.

And this is not even Friday and Friday is my day off but who cares now. Let us all play ignorant and pass the debt and we can all be rich, rich, and so rich!

#61 Doug t on 06.12.17 at 8:55 pm

#12

Are you :

A) naive
B) dim
C) a fool
D) a troll
E) a financial disaster
F) 6 years old
G) smoking the weed
H) having us on – nudge nudge wink wink

RATM

#62 Joe2.0 on 06.12.17 at 8:58 pm

Airbnb coming to a neighbourhood near you.
If you can’t beat it tax it.
That should temporarily fill some of those empty homes and fullfill the occupation criteria.

#63 Saint Herb on 06.12.17 at 8:59 pm

What about returning to the mean. Does a 30% drop bring the prices back in line with the mean. I remember it being said that once prices correct they usually over correct.
What price decline is needed to bring them back to the mean? I think it is way more then 30%. I remember seeing a graph on this blog.
A house was for sale near me in the 905 for 1.4 M for 3 wks. It sold and a local real estate agent told me it sold for 1.25M. Although that is still way way too much money for that house it is 10% below asking. That is the first time I’ve seen something sell below asking.

#64 Scoop and Doozey on 06.12.17 at 9:00 pm

Well the market in the GTA has hit the crapper. An old real estate agent I used called me up, out of the blue to let me know that the market has cooled significantly and now may be a great time to buy. There are no more multiple offer things happening, they are gone, no more going for over asking games, just crickets. She said there’s a lot of inventory, few buyers and anything that’s selling is going for well below asking. She wanted to know if we could get together and my response, like everyone elses, is “no thanks, this real estate market is going down and I’ll just wait it out.”

#65 FreeBird on 06.12.17 at 9:03 pm

Congrats to Denise. She chose freely to sell at a good time, and someone chose freely to buy from her. Bad time for the buyer? If they hold onto the property for a long time and or by luck find a new buyer maybe not?
In any case good for Denise.

#66 Fee Fye Foe Fum on 06.12.17 at 9:03 pm

The market in many areas of the hinterland has already dropped by about 10%

All the greedy sellers can’t figure out why their overpriced dumps haven’t sold.

Happy Housing Crash Everyone ;-)

#67 I Love Overpriced Particle Board Homes on 06.12.17 at 9:05 pm

Milton will be the new wasteland of modern times when the market corrects.

#68 The real Kip on 06.12.17 at 9:11 pm

Paid the 2.49% mortgage out this March past and after three phone calls to Street Capital, I finally got the mortgage discharge papers in the mail today. They sure drag their feet sending out that paperwork!

#69 Pete from St. Cesaire on 06.12.17 at 9:13 pm

Says the mayor: “It is taking housing off the market that might otherwise be available for long-term permanent renters as it were — and that’s a problem for us.”
——————————————————–
Not quite. Many of these places were built solely because of the demand created by people who had intended to use them for AirBNB. Otherwise they would have not been built. This new move was planned all along, get that straight. Don’t think for a minute that the govt hadn’t seen the AirBNB ‘problem’ earlier on. Governments like you to believe that they are stupid and incompetent. No, they just let the fools buy condos and then make them lose their shirts by banning AirBNB (this predatory move violates many laws, but…..you know). The aim: further destroy the middle class and make them pay for (and take the blame but not the credit for) the construction of what will end up being subsidized public housing after these condos are repossessed.

#70 Re ., rain clouds on 06.12.17 at 9:14 pm

$12,000 yearly upkeep ? Stop . You’re embarrassing yourself

#71 Ken on 06.12.17 at 9:14 pm

#14 Nonpluse

You truly are an idiot.

#72 jess on 06.12.17 at 9:19 pm

From Victor’s post

“York Region is still showing some of the largest declines of about 60 per cent in some areas, said company president John Pasalis.

========
“Clayton found in 2015 that Waterloo Region is missing its growth projections by 4,000 people per year, on average. It’s the second-biggest miss among 16 communities, topped only by York Region which is falling short of its forecast by 7,000 people per year. ”

https://www.therecord.com/news-story/7326100-region-faces-budgeting-for-people-that-may-never-come/

#73 that's right..... on 06.12.17 at 9:26 pm

You are “blessed” because you saddled some young fool with lifetime of debt and possibly bankruptcy? And smart? This is absolutely disgusting how you guys operate here!
………..

that’s how Canadians roll. Most here are salivating, desperately waiting for the housing carnage whilst hoping the market isn’t collateral damage

it’s cartoonish, I know, but entertaining none the less

#74 paul on 06.12.17 at 9:26 pm

Well it’s official the would has gone mad.
All Women’s spa mostly nude does not want a transgender with male parts to be allowed in.
Another business will bite the dust.

http://www.cp24.com/news/body-blitz-spa-in-hot-water-after-denying-transgender-woman-service-due-to-male-genitalia-policy-1.3456127

#75 Smoking Man on 06.12.17 at 9:30 pm

We live in full blown communist country now.
If you have loot flee

Telling people who or how they can rent their place too.

Liberalism is a mental disorder. Taxation is theft.

Canada will be Venezuela soon.

#76 Leo Trollstoy on 06.12.17 at 9:32 pm

US economy getting stronger

Canadian economy getting stronger

BoC and Fed both hike

CAD/USD will stay range bound

Easy to make the right call

#77 Pete from St. Cesaire on 06.12.17 at 9:33 pm

And why are hotels so darn expensive? $200 a night? $6,200 a month? Plus all the taxes? For a postage stamp sized single room that doesn’t even have a stove?
——————————————————-
What I don’t like is that most downtown hotels now are all offering huge ultra-modern rooms, with everything imaginable, at top dollar. If you can’t afford hundreds per night you stay home. There are no more hotels with small, simple rooms for a low rate. (There are some independant motels that have networked together to offer low rates to those who can show that they are on welfare, especially on the off-season. They will put you in touch with the next motel offering the same deal along your route).
Anyone remember the old Laurentien Hotel in Montreal; now that was a proper hotel the way a hotel should be.

#78 toronto1 on 06.12.17 at 9:38 pm

@44 Mark

Your Par plus 50 points is not set in reality for the loonie.

The US is the largest economy in the world, why would our Loonie ever become close to par or plus?

at a min the dollar needs to be at .70 for there to be any hope of manufacturing in Canada. We have higher wages, more employee friendly laws, tighter environmental regulations, expensive energy and a lower productive workforce with a much higher taxation requirement.

We need closer to 60-65 cents to have manufacturing continue to run, never mind invest.

Regarding housing market slowdown:

were is all the pent up demand? all that sideline cash? no where as it never existed- from 2016 on the majority of price increases were driven by speculation and not organic demand.

Long way to go down yet folks- my educated guess from the charts is when this is all said and done we will be in the 2011-2012-2013(if lucky) median price point for homes in the GTA.

Meet up with a buddy of mine who works pretty high up in finance circles, he said that the consenus is that the drop this time around will be hard and fast with a much faster recovery- said that with social media and news, the cycles hit much faster then in the past- thinks we will see the bulk of the drop in the next 12-24 months with prices leveling off soon there after.

I disagreed think this will run at least 3-4 years- i cant see the heavy drops happening in that short a time frame.

although with a 6% drop from May- if we get another 3 months at 4% or another 6 at 2% prices will have dropped 18% in 6 months so who knows………..

#79 Daughter of Ponzi on 06.12.17 at 9:51 pm

#61 Doug t on 06.12.17 at 8:55 pm
#12

Are you :

A) naive
B) dim
C) a fool
D) a troll
E) a financial disaster
F) 6 years old
G) smoking the weed
H) having us on – nudge nudge wink wink
————————————————–
Perhaps a). I am just honestly amazed by the level of greed and bigotry in this society when it comes to financial machination and exploitation. You basically all have some kind of a con gene that hides behind that passive/aggressive grinning mask. Do you understand it now?

#80 Raging Ranter on 06.12.17 at 9:53 pm

@#69, houses being purpose built for short term rentals? No wonder they are cracking down on it. How would you like an AirBnB house for a neighbour? I have zero sympathy for the greedy fools who thought they could make money running a dedicated AirBnB rental. They had to have known regulation and enforcement and taxes were coming sooner or later. There is nothing special about the “sharing economy” that should make it exempt.

#81 Raging Ranter on 06.12.17 at 9:58 pm

@#17 TS, I found 40 empty homes in Orleans on AirBnB. I know they are unoccupied a cause you can rent the “”entire home” with no date restrictions mentioned. That’s not a huge number but Orleans isn’t a huge place. So it has taken a few townhomes like the one I live in off the market and some condos too. The rental market has tightened here considerably. That might be one contributor.

#82 Pete from St. Cesaire on 06.12.17 at 10:01 pm

#79 Daughter of Ponzi & #73 That’s Right
You are “blessed” because you saddled some young fool with lifetime of debt and possibly bankruptcy? And smart? This is absolutely disgusting how you guys operate here! that’s how Canadians roll. Most here are salivating, desperately waiting for the housing carnage whilst hoping the market isn’t collateral damage
——————————————————-
It’s not a popular point of view but I’d say that Canadians are the most crooked, egotistical, narcissistic and jealous people in the civilized world.

#83 acdel on 06.12.17 at 10:03 pm

#42 HawteRet

To you perhaps!

#84 Chiming in on 06.12.17 at 10:03 pm

Daughter of Ponzi–Get out the smelling salts; I think your incredulity is misplaced. Exploitation?? Take a pill.
No one is holding people hostage, demanding that they buy. If the buyers have not taken the time to educate themselves about the value of the market, if they have not evaluated the real cost of their purchase relative to their other expenses, if they have not asked enough questions, if they waive conditions to be first in line, then it doesn’t look to me that they’re victims–I’d suggest they’re the greedy ones. They didn’t have to sign on the dotted line. Now go sit down before you get the vapours.

#85 Mr Happy on 06.12.17 at 10:04 pm

#12 Daughter of Ponzi on 06.12.17 at 7:13 pm
You are “blessed” because you saddled some young fool with lifetime of debt and possibly bankruptcy? And smart? This is absolutely disgusting how you guys operate here!
====================================

HEY LENIN….Don’t let the door hit you on the way out!

Nobody put a gun to that buyers head. I mirror Denise’s story. Thanks to Garth I have a YUUGE portfolio that let me retire many years earlier than first planned.

You are just another sore loser that missed the boat…

#86 acdel on 06.12.17 at 10:08 pm

#55 crowdedelevatorfartz

Ok, at least there are two of us that feel the same way.

Constructive criticisms is always welcome with good ideals, but personal assignation to the one’s that have an opinion ( actually sounds like a few politicians out there) is just so…… you know!!!!

#87 WUL on 06.12.17 at 10:13 pm

NONPLUSSED:

You make valid points and I agree with much of what you state. I could not believe the reduction in cab fares from YYC to my home near Glenmore Resevoir on my jaunts home from YMM over the last year caused by the ride sharing upstarts.

A couple of counter points. I’ll try to be brief.

The hotelier/tourism levy of what, 4%?

Tax on income?

And, I ask are you in an R1 zoning or the like restricted to single family detached with an AirBnB beside you? It does cause issues. Parking, comings and goings, touristas returning to Kensington houses near the Louise Bridge from the Red Mile with an inability to hold their liquor?

There are some issues outside of the price of overnight accommodations.

#88 Walter Safety on 06.12.17 at 10:16 pm

A friend listed his house in the Hammer last Thursday for 20% more than the same house 5 doors down sold for 8 weeks ago. Open house on the weekend -zero traffic.
Nice fresh starter home on a street with the occasional hooker , petty crime and drug deal , mid 200’s.
Stay tuned.

#89 Rushing to the exit on 06.12.17 at 10:19 pm

It seems like everyone is rushing to the exit. Did someone scream fire!!!! in a crowded theater?

9 Gadani Dr, Markham $799,900
10 Gadani Dr, Markham $739,900
33 Gadani Dr, Markham $819,900

164 Gas Lamp Lane, Markham $978,300
80 Gas Lamp Lane, Markham $829,900
224 Gas Lamp Lane, Markham $749,000

560 Cornell Centre Blvd, Markham $899,900
566 Cornell Centre Blvd, Markham $975,000
586 Cornell Centre Blvd, Markham $909,900

2 Colty Dr, Markham $1,149,000
26 Colty Dr, Markham $1,298,000
56 Colty Dr, Markham $988,000

25 Greenspire Ave, Markham $1,288,888
37 Greenspire Ave, Markham $1,390,000
41 Greenspire Ave, Markham $1,298,000

15 Hamilton Hall Dr, Markham $1,250,000
39 Hamilton Hall Dr, Markham $998,000
45 Hamilton Hall Dr, Markham $998,000

26 Amos Lehman Way, Whitchurch-Stouffville $1,350,000
51 Amos Lehman Way, Whitchurch-Stouffville $799,000
59 Amos Lehman Way, Whitchurch-Stouffville $948,000

6 Dougherty Cres, Whitchurch-Stouffville $699,900
31 Dougherty Cres, Whitchurch-Stouffville $684,800
54 Dougherty Cres, Whitchurch-Stouffville $649,000
186 Dougherty Cres, Whitchurch-Stouffville $789,800

83 John Davis Gate, Whitchurch-Stouffville $1,388,000
104 John Davis Gate, Whitchurch-Stouffville $749,900
128 John Davis Gate, Whitchurch-Stouffville $1,299,888
168 John Davis Gate, Whitchurch-Stouffville $699,000
254 John Davis Gate, Whitchurch-Stouffville $729,800
262 John Davis Gate, Whitchurch-Stouffville $639,888
298 John Davis Gate, Whitchurch-Stouffville $649,900

5 Rockport Cres, Richmond Hill $1,688,880
21 Rockport Cres, Richmond Hill $1,688,000
54 Rockport Cres, Richmond Hill $1,680,880
62 Rockport Cres, Richmond Hill $1,699,900
69 Rockport Cres, Richmond Hill $1,798,000
94 Rockport Cres, Richmond Hill $1,380,000

66 Richmond St, Richmond Hill $1,600,000
98 Richmond St, Richmond Hill $1,527,000
118 Richmond St, Richmond Hill $1,459,000
138 Richmond St, Richmond Hill $3,138,000
154 Richmond St, Richmond Hill $1,788,000
174 Richmond St, Richmond Hill $775,000
207 Richmond St, Richmond Hill $1,108,888
222 Richmond St, Richmond Hill $1,478,800

#90 Doug in London on 06.12.17 at 10:22 pm

I also say congratulations to Denise for cashing in her winning lottery ticket when she did. She had the common sense and presence of mind to cash in when there was a shortage of listings, and is quite deserving of her winnings.

#91 Jfish on 06.12.17 at 10:24 pm

So she sold her house at a peak time. Whippy. Now what? If she wants to stay in Toronto good luck. Now if she is willing to relocate in say Kingston, Halifax, Peterborough then she has cashed in.

She says the house she rents is better than the one owned. Same hood. — Garth

#92 Smoking Man on 06.12.17 at 10:25 pm

This kid is reaching out to Canada scared shitless of George Soros.

https://youtu.be/8xysVNigCsU

Im not. No one silences me, got to get out of this communists guarantee to fail petrie dish first.

#93 rainclouds on 06.12.17 at 10:28 pm

#70 Costs 12k per year MORE than the bungalow upkeep.

Try and keep up

#94 For those about to flop... on 06.12.17 at 10:35 pm

Pink Pollen falling in Coquitlam.

This is another case that was in my Possible Pinkies folder that has now graduated with honours and is now full on Pollen.

Let’s have a look at the timeline and their changing expectations.

6th April asking…1.48

17th May asking…1.38

7th June asking…1.2

On the hook for 1.1 ,at first glance seems like a decent house.

Seem fairly motivated to get out if you study the timeline and price drops ,maybe got a job in Ottawa…

2433 OTTAWA ST PORT COQUITLAM .

https://www.zolo.ca/index.php?sarea=2433%20Ottawa%20Street,%20Port%20Coquitlam&ptype_house=1&max_price=1300000&min_price=800000&filter=1

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

#95 ShawnG in TO on 06.12.17 at 10:36 pm

#44 Mark on 06.12.17 at 8:22 pm

Canadians needing to pay off more debt is not going to increase demand for the loonie.

Couldn’t be anything further from the truth. Paying off CAD$ debt is the very definition of investing in the loonie and the CAD$.

Hi Mark, could you please elaborate? How would Canadians using their own salaries (or whatever) payoff their own mortgages be beneficial to the loonie? what would Cad appreciate against? Chinese Yuan / USD / EU / GBP?

my thoughts is that during housing bubble buildup, HAM caused appreciation of the Cad because the investor would have to buy Cad to put a down payment, and continue to buy Cad to pay for mortgage. once the RE bubble bursts, HAM leaves, thus lowers the Loonie. please point out the errors in this example.

#96 Smoking Man on 06.12.17 at 10:38 pm

With govt stealing tax dollars from productive folks and redistribution to mindless idiots.

Canada is doomed. If your not working on an exit strategy. I dedicated this tune to you.

https://youtu.be/agwMwbmMNbk

#97 lukas luo on 06.12.17 at 10:39 pm

haha…the Capital Economics folks…the same experts who called a Vancouver correction 5 years ago which never materialized. Those who listened back then would’ve missed the huge run up in prices. If there is a correction of 20% to 40% as they suggested, I would load up…

#98 joe on 06.12.17 at 10:41 pm

Chink, n. — Garth

u doubled down on ur racist slurs. Please dont use the letter N

#99 TurnerNation on 06.12.17 at 10:44 pm

Nasdaq top was in a few days ago when the Tee-vee flashed Amazon’s $1000 stock price.

#100 Newcomer on 06.12.17 at 10:45 pm

#14 Nonplused on 06.12.17 at 7:16 pm
I think the attack on Airbnb is outrageous! How dare the government dictate what you can and cannot do with a property you own!

————

Keep those thoughts in mind if your neighbors turn their property into a nightclub, or a shooting range. We pay the government to enforce rules about what you can and cannot do where and when. People who are not fond of this custom known as “civilization” might enjoy the wilderness more than a city.

#101 WUL on 06.12.17 at 10:46 pm

And NONPLUSSED:

Lightning bolt arising from our convo if you are still here. One hour AirBNB rentals.

Third Rate Romance Low Rent Rendevous

What a slice of life I could observe from my living room window taking place next door in my sedate suburban shack. Commerce. Common bawdy house. I’m in as a serious student of human nature.

https://m.youtube.com/watch?v=a1KtIJq5s4g

#102 Interstellar Old Yeller on 06.12.17 at 10:53 pm

What I want to know is how Denise convinced Garth not to auction off her e-mail address. ;)

Market timing is great when you get it right. Enjoy your financial independence, Denise!

#103 For those about to flop... on 06.12.17 at 10:55 pm

Pink Pollen falling in North Vancouver.

This one is in the same vain as the last one, but if they are serious about getting out at this price they will take a decent hit.

15th April asking…1.68

16th May asking…1.58

6th June asking…1.2

Must be going for the bidding war strategy as they are into it 1.37.

I prefer to do my donating at thrift stores….

M42BC

646 4TH ST E NORTH VANCOUVER

https://www.zolo.ca/index.php?sarea=646%20E%204th%20Street,%20Vancouver&ptype_house=1&max_price=1300000&min_price=800000&filter=1

https://evaluebc.bcassessment.ca/Property.aspx?_oa=QTAwMDAyN1NaSw==

#104 joe on 06.12.17 at 10:56 pm

if Canada didn’t drop interest rates to emergency levels back in 2008, house prices would have been 50% lower than where they are now. I’d predict 40-50 percent hair cut in areas like Milton,Guelph,Hamilton and 30-40% in Toronto and commutable areas. drop will be quick, people will cash out their credit cards and declare bankruptcy. rinse and repeat.

#105 Smoking Man on 06.12.17 at 10:59 pm

I love Canada, Canadians, hockey players. But these misarble gobalist scum that have peneyrayed our schools, banks, and government.

Can’t take it any more. Let them put skin in the game and see how that works out. They can only survive with state guns and theft.

Canada is doomed. Im out soon.

#106 InvestorsFriend on 06.12.17 at 11:01 pm

Mark and the logic of a rising Canadian dollar

Mark said:

If anything, the CAD$ will rocket much higher as huge demand emerges for CAD$ to repay CAD$-denominated debt.

and

But actually there will be intense demand for Canadian currency and bonds, as you need CAD$ (and proxies for CAD$ such as GoC CAD$ bonds) to pay off CAD$-denominated mortgage debt.

*****************************************
I don’t get this logic which Mark has stated many times. Sure if indebted Canadians held a lot of U.S. dollar assets we could see the price for the Canadian dollar bid up if they rushed to trade American dollars for Canadian to pay off debt. But that is not the case and not your scenario.

If those more indebted individual Canadians hold Canadian dollar bonds and stocks (doubtful given their indebtedness) and rush to sellthose to pay down debt it would presumably push down the price of the bonds and stocks but why any impact of the worth of the Canadian dollar in terms of U.S. dollars?

Seems to me if individual indebted Canadians get serious about paying down debt they will have to do it by reducing consumption (they likely have few assets besides their house). This could slow the Canadian economy. They might also do it by rushing to sell their houses (doubtful) pushing down the price of houses.

I have no strong view on whether the Canadian dollar will fall or rise in terms of U.S. dollars but I just don’t see why paying down debt would impact it.

#107 InvestorsFriend on 06.12.17 at 11:04 pm

P.S. to Mark

If individual indebted Canadians want to pay off debt perhaps they will rush to get second jobs. That’s how people get Canadian dollars to pay down debt, that or reducing spending. They mostly have no bonds to sell.

#108 OttawaGuyRenting on 06.12.17 at 11:06 pm

#17 TS on 06.12.17 at 7:17 pm
#3 Raging Ranter

I noticed the rental market here in Orleans suddenly tighten over the past year. I wonder if AirBnB can explain part of that. It’s not like we’ve seen a jump in population or anything. In fact, government jobs are moving to the west, not the east end of the city.

LOL, who would come on vacation to Ottawa and rent a house out in Orleans? I couldn’t think of a worse vacation and I’ve lived in Convent Glen since 1990.

I think the rental market is a little tight because there’s so many townhome condos for sale. I’m looking at Convent Glen – Orleans Wood on the MLS right now and there’s literally 50 possible rental units in townhome condos / apartments for sale ( St. Andre, Priory Lane, across from St. Matts , Timothy Court, Jeanne D’arc areas).

Nobody wants these things…..
———
Omg Ottawa is dead

Inventory must be high. My hood (Whitehaven) is jammed full of for sale signs and nothing is moving.

#109 Smoking Man on 06.12.17 at 11:09 pm

Love this kid took me 50 plus years before I figured it out.

https://youtu.be/jUvv5ofa2YI

#110 ShawnG in TO on 06.12.17 at 11:12 pm

#12 Daughter of Ponzi on 06.12.17 at 7:13 pm

perhaps the buyer is well financed, buying for long term primary residence, while following the rules of 90…
… nah, even i don’t believe that.

but on the other hand, suppose Denise didn’t sell, what would the buyer do? not buy? no, he/she/they would just buy from someone else, a house just as ridiculously valued, and carry a mortgage similar in size.

stupid is as stupid does.

Denise was smart + lucky at getting off at the top and thus getting a better future for herself. There’s no shame in it.

a note to Denise tho, a million bucks is not as much money as you think. suppose you invest and get a steady 6% gain every year, that’s $60k a year. minus the taxes, that’s $48k left. minus inflation, say 2% on the million, that’s $28k a year left. not enough to live on. it’s just a supplement to your other retirement money, unless you plan to draw down on the million. anyway, all this talk is just guesstimation, get Garth to make you a proper portfolio.

#111 Angela on 06.12.17 at 11:18 pm

You really changed the title of the post to “Cracks”, Garth? I completely forgot the word chink was a derogatory term until I read the comments section. I haven’t heard it used in that manner in 25 years. Let’s all grow up, shall we?

#9 CRDT – My Langley neighbourhood almostly completely turns over every year. I barely know who my neighbours are anymore.

No change. Idiots abound. — Garth

#112 crowdedelevatorfartz on 06.12.17 at 11:20 pm

@#70 Re rainclouds
“$12,000 yearly upkeep ? Stop . You’re embarrassing yourself”
******

Slow down and read what was stated.
The Yaletown rental “Bung” costs $12k MORE than the Bungalow upkeep.
Hence. If your House mortage is done and you owe nothing….all you pay is property taxes, water use, garbage fees, whatever the govt foists upon you ….
all THAT added up to 12 k LESS than they are paying now in rent…..and because they invest the cash and are earning over 100k per year…….they dont care……
The rent costs are nothing compared to what they are earning in their portfolio…
Just watch the house prices turtle and all those Greaterfools that bragged they were “millionaires” and happily borrowed on their Home “equity” loans to buy beemers and Whistler condos…….are going to be craping their pants in 12 months.

#113 Daughter of Ponzi on 06.12.17 at 11:20 pm

#61 Doug t on 06.12.17 at 8:55 pm

You have a government that regularly pumps these various financial bubbles through institutions like banks and media and when enough people are roped in, they just pop the bubble. Most of you take part of this con and try to outsmart each other by buying low and selling high and bailing out at the top. You call them “blessed and smart”. The others who are left holding the beg are “greater fools”. And you lie to yourself and the rest of the world, how just and caring your society is. Don’t you see how pathetic and crooked this all is? You can’t even look from the outside of your Ponzi to grasp the meaning and significance of it.

#114 Smoking Man on 06.12.17 at 11:21 pm

To my kids the day I met your mother.
She haven’t changed one bit. Stop chirping me on face book or you’re out of the will. Just because she helps you along with a few crumbs here and there.

I don’t. Look what I drive. But im the captain of this star ship. Bet accordingly.

https://youtu.be/1l0xpkk0yaQ

#115 Mark on 06.12.17 at 11:23 pm

“P.S. to Mark
If individual indebted Canadians want to pay off debt perhaps they will rush to get second jobs.”

That’s a possibility (which would deflate labour prices). Or they could stop spending, which seems far more plausible, particularly on stuff they don’t need. Which basically would be devastating for sectors of the economy that rely upon discretionary consumer consumption.


That’s how people get Canadian dollars to pay down debt, that or reducing spending. They mostly have no bonds to sell.”

Bonds to sell? Not sure what you’re getting at there, or how it fits into the narrative of what I wrote previously. Could you elaborate? Canadian savers own plenty of bonds. Canadian borrowers owe to the owners of those bonds. The eventual outcome of the deflation of the debt bubble will be partial destruction of both the value of the debtors, as well as the value of the creditors. But mainly the debtors will suffer, as is almost always the case.

#116 Surf the gravity waves on 06.12.17 at 11:24 pm

#104 Smoking Man on 06.12.17 at 10:59 pm

I love Canada, Canadians, hockey players. But these misarble gobalist scum that have peneyrayed our schools, banks, and government.

Can’t take it any more. Let them put skin in the game and see how that works out. They can only survive with state guns and theft.

Canada is doomed. Im out soon.
..
Well hurry up about it dude.. you’ve been spewing for ages about running for the fences.. blah blah blah what gives dude – get to it!

#117 Tony on 06.12.17 at 11:26 pm

#52 Daughter of Ponzi on 06.12.17 at 8:37 pm

#34 Freedom First on 06.12.17 at 7:56 pm
Congrats Denise!

Welcome to the freedom first lifestyle.
———————————————–
Thanks FF. It means a lot coming from such a great eunuch like yourself.

Blessed Denise

This Freedom First chick sound hot!

#118 crowdedelevatorfartz on 06.12.17 at 11:26 pm

@#19 & 90

Good to see the PC Nazis are alive and well fed.

Never heard the expression,” A chink in the armour”?
Which refers to a flaw, a weakness, a deformity.

PC accusations of racism is the new bullying tactic.
Grow up.

#119 Mark on 06.12.17 at 11:34 pm

“I don’t get this logic which Mark has stated many times. Sure if indebted Canadians held a lot of U.S. dollar assets we could see the price for the Canadian dollar bid up if they rushed to trade American dollars for Canadian to pay off debt. But that is not the case and not your scenario.”

Currently, and for much of the past decade or two, Canadians have been borrowing CAD$ heavily, and using the CAD$ to buy stuff that’s been imported from outside of Canada, particularly the United States, but also elsewhere (such as China). Visit any newly constructed condo, for instance, and virtually everything you can actually ‘touch’ will have been imported either from the United States or from Asia. Plus HELOCs are extensively used to take the families on vacations to countries in which the USD$ is purchased with CAD$. Although a vacation isn’t ‘imported’ per se, it is classified and behaves as an import as foreign currency must be purchased for such a vacation.

Take away the expansion of credit, and voila, these imports largely disappear. Additionally, a lot of domestic consumption disappears, leaving a greater economic surplus available with which to export.

Canadians are the single largest nationality that invests in US RE at the moment, ostensibly to capture investment opportunities in lower prices, and for recreational purposes. Lower RE prices in Canada will force a significant reduction in, if not significant unwind of that trade.

We know that in 2008/2009, when the US RE financing marketplace locked up, the USD$ shot sky-high. Why? Because there was no credit creation, and hence, Americans had little to no money to go buy foreign imports. US imports crashed. The same is likely to happen to Canada. The CAD$ will shoot to the moon, but the reason it will shoot to the moon is that nobody will have much of it to spare as CAD$ wealth is destroyed by asset deflation at a rate far faster than new CAD$ can be conjured into existence by borrowing. This is why rate cuts and additional extraordinary measures by the Bank of Canada (QE, NIRP) are almost a certainty, much like the Fed was required to engage in extraordinary measures (and arguably remains doing so even to this day) to keep the US economy liquid and functioning.

#120 ah, k rainclouds.. on 06.12.17 at 11:46 pm

#70 Costs 12k per year MORE than the bungalow upkeep.

Try and keep up

…….

that’s more like it…ugh, (vomits)

#121 Mark on 06.12.17 at 11:50 pm

“Hi Mark, could you please elaborate? How would Canadians using their own salaries (or whatever) payoff their own mortgages be beneficial to the loonie? what would Cad appreciate against? Chinese Yuan / USD / EU / GBP?”

Canada runs a long-term trade surplus with the United States, and runs a long-term trade deficit with China. So CAD$ appreciation against the USD$, CAD$ depreciation against the Yuan over the long term. Trade balances eventually are reflected in currency relative valuations. China, itself, has a huge RE bubble internally which will likely deflate, so the status of the Yuan/CAD$ currency pair would depend heavily on the relative speed and magnitude of that deflation. But both should appreciate relative to the USD$ as both Canada and China run trade surpluses with the United States.

CAD$ should also appreciate over time with the GBP$ as Canada runs a considerable trade surplus with the UK.

http://www.statcan.gc.ca/tables-tableaux/sum-som/l01/cst01/gblec02a-eng.htm


my thoughts is that during housing bubble buildup, HAM caused appreciation of the Cad because the investor would have to buy Cad to put a down payment, and continue to buy Cad to pay for mortgage. once the RE bubble bursts, HAM leaves, thus lowers the Loonie. please point out the errors in this example.”

One of the reasons that clearly invalidated the HAM thesis was the very low state of the CAD$. If HAM was actually as influential as claimed, the CAD$ should have been much stronger as inflows would have been needed to purchase CAD$, which in turn would have been used to buy Canadian RE. However, there’s ample evidence to suggest that the “HAM” theory is unadulterated nonsense, with Chinese investment flows into Canada only being around $5B/year, much of which is completely accounted for in terms of known investment into the resource sector or into publicly issued/traded securities from Canadian issuers. Garth et al have laid out mountains of evidence of the Canadian RE bubble having its origins in borrowing/leverage taken on by Canadian citizen participants, borrowing from Canadians. I tend to take the view that “foreign” participation in Canadian RE is largely a figment of the imaginations of certain RE speculators and hoarders who wish to deflect culpability for their role in the RE bubble and unload onto the public an asset class well past its peak in pricing (sales mix changes explain most “price increases” since 2013).

#122 Smoking Man on 06.12.17 at 11:56 pm

In Canada there are givers and takers.

If your a giver. Get out now.

https://youtu.be/Q3mgapAcVdU

#123 DON on 06.13.17 at 12:08 am

#78 toronto1 on 06.12.17 at 9:38 pm
************
My belief:

On the downside, the price of a house will be determined by the ‘Patient Vulture’, and what that person is willing to pay at the height of a buyer’s market. Context will reverse – the melt will adversely affect others – causing anxiety…seller’s who are desperate to sell will take the first offer, as it might be the only. Everyone’s mileage may vary but the full cycle of human nature will repeat and evolution will have to miss a turn.

Reality bites and so can Destiny!

Sarcastic prediction: At this rate, in the not so distant future, common sense will become a traded commodity and tribes will war to acquire it.

#124 akashic record on 06.13.17 at 12:10 am

#37 Joseph R. on 06.12.17 at 8:06 pm

#8 akashic record on 06.12.17 at 6:55 pm
Local politicians will soon outlaw short-term rentals, except in properties people own as principal residences.

===

Communists, trying to rig the market to fit ideology.
It has a great historical track record.

————————————————————

How is protecting private enterprises (hotels and B&B) who:

1) play by the market rules;
2) take an equity risk;
3) create local employment and;
4) pay local, provincial and federal taxes;

equal communism?
and have a failed track record according to you?

You are comparing apples to oranges.

Incomparable investment, incomparable business model, incomparable scale.

Mind you, if any hotel investor wants to by condos and rent it through Airbnb, nothing prevents them.

Governments deciding how you can monetize your private property reminds me of the Communist times, when growing and selling fruits, vegetables in your backyard was a crime, punishable with jail time.

Sticking with apartments, reminds me when Communist bureaucrats decided if your home was too big for you or your family, and forced you to accept tenants, assigned by the government, who paid rent not for you, but for the government and you could never end the “lease” or kick out the tenants.

#125 Happy Housing Crash Everyone! on 06.13.17 at 12:12 am

You can see the panic and anger from speculators to realtors to your mortgage broker who gave out fraudulent mortgages. This market is nothing but a house of cards . Anyone buying now is clueless to reality. The reality is the house of cards if falling apart. The government who did blow up this Ponzi scheme understands that by not crashing this bubble back to the mean average Canada would be history. Now many will suffer and go bankrupt including the above shysters. Happy Housing Crash Everyone ! :-)

#126 waiting on the westcoast on 06.13.17 at 12:17 am

“P.S. to Mark
If individual indebted Canadians want to pay off debt perhaps they will rush to get second jobs.”

And then Mark said… “That’s a possibility (which would deflate labour prices). Or they could stop spending, which seems far more plausible, particularly on stuff they don’t need. Which basically would be devastating for sectors of the economy that rely upon discretionary consumer consumption”

Mark – an economy is not an island to itself. If the economy starts entering into a fall, assets become progressively worthless. Both Canadians and foreigners will move their monies to richer markets.

The only reason for Canada’s rise post the GFC was the massive commodity buys from China. Strong currencies are almost invariably correlated to strong economies.

The US is an exception as it is the world currency. ***But it is still a very strong economy compared to many of its peers. ;-)

#127 guru on 06.13.17 at 12:36 am

Next few weeks may be the last grasp for ‘greater fools’….. the very few that are buying now are the ones that have blinders on. Prices have already gone down 6% in May with insane downward pressure in the immediate future. The decrease will be accelerated and it’s likely to hit 30-40% by Xmas at 5-6% decreases per month. Commuter communities like Barrie, Milton, Brampton, Hamilton, Oshawa will be devastated by the 50-60%+ drops in values.

#128 Russ on 06.13.17 at 12:46 am

I see you gave in to the snowflake @ #19.

Sad.

Chink should not be dummy-downed by the morally left, it’s just not right.

#129 Joe you are stupid on 06.13.17 at 1:00 am

#98 joe on 06.12.17 at 10:41 pm
Chink, n. — Garth

u doubled down on ur racist slurs. Please dont use the letter N

N goes for noun

#130 Tower on 06.13.17 at 1:12 am

You’re not the only victim Garth.

https://www.youtube.com/watch?v=JnG4aplkw4s

#131 Dan.t on 06.13.17 at 1:20 am

#29VanMan

Christy Clark didn’t want the party to end for her real estate buddy cronies. Now she will leave it to others and act like it wasn’t her fault…. problem in BC is simply any supply gets bought up by speculators. There will never be enough supply when foreign money and illegal money is allowed to park itself in BC and speculation is so profitable. It is killing the standard of life and pushing out locals. Not good for a sustainable economy. Policy sucks big time in BC…. but those who own don’t care, as long as that equity keeps going up forever.

#132 Envy runs the world on 06.13.17 at 1:36 am

@12 & @51 – Daughter of Ponzi

Daughter of Ponzi, I suspect you have a strong envy streak in you. You seem to reveal it quite openly in your criticism of someone else’s profit from a home sale? yes?

Maybe the seller is indeed blessed, and maybe the buyer is indeed cursed. Either way, what business is it of yours?

What if house prices end up fooling everyone and end up being even higher in 5 years? Who are the blessed, the who are the cursed from today’s transactions then? You don’t see the future, so don’t pass unnecessary judgements on another.

As for the blessed/cursed equation, ponder this:

‘For to everyone who has, more will be given, and he will have abundance; but from him who does not have, even what he has will be taken away.’ – Matthew 25:29 New King James Version

Bonus material:
Lucifer has a real name, his name is Envy. When you feel Envy, it is like wearing his name tag – the mark of the beast, so to speak. When you feel Envy, he rejoices because you are casting yourself in his image. Beware of envy because it grants privileges to Lucifer that you may not want granted in this lifetime.

#133 Ponzius Pilatus on 06.13.17 at 2:15 am

Trump is the new hope for the left.
Talking about unintended consequences.
Hail Comrade Trump.

#134 Whazzzup on 06.13.17 at 2:15 am

Hate to say it.

But the power to be which has driven the market up (big banks)

Will be at full force driving it down. They have nothing to lose, government will protect their hedges. But they can buy everything back at pennies on the dollar.

As this thing unfolds you will see change which adds extra weight on the down hill market. At the end of the day they will get bailout money and will not distribute it into the market, but instead they will watch it fall

When all hope is gone. They will buy in “pennies on the dollar”

Kind of like the final scene in “Trading Places”

#135 nubbers on 06.13.17 at 2:16 am

Daughter of Ponzi on 06.12.17 at 7:13 pm
She says. “I just can’t believe that this has happened to me. I am blessed.”
——————————–
You are “blessed” because you saddled some young fool with lifetime of debt and possibly bankruptcy? And smart? This is absolutely disgusting how you guys operate here!

Upvoted! (well, if there was an upvote button).

I always thought it was the responsibility of the older generation to look after the next generation. That does not seem to be the view with a large element here.

#136 Kat on 06.13.17 at 2:18 am

Funny how some here complain about government saying what they can use their property for. Pretty much every town and city etc has bylaws that stipulate how the poperty may be used. Airbnb goes against those laws so banning it only enforces the law already in place. It is nice to see for a change something actually being done.

#137 Ponzius Pilatus on 06.13.17 at 2:32 am

Smokie,
Are you in rehab or something?
Your posts are shit.
You know, writers like Hemmingway wrote their best stuff when drunk.
Get on with the program.
What have you got to lose?
Your sanity or your life.
A small price to pay for immortality.

#138 jane24 on 06.13.17 at 2:48 am

On the plus side it looks like my Toronto based nieces and nephews in their 20s and 30s may after all soon be able to buy a starter home in the city of their birth. They are all on professional salaries but are currently unable to afford anything. They can have babies too!! Stay close to their parents!! All happy news.

#139 Tony on 06.13.17 at 3:25 am

Re: #63 Saint Herb on 06.12.17 at 8:59 pm

It’s more than 30 percent and there’s another or second mean. The price of the average house in Canada should cost about the same as the average house in America.

#140 Freedom First on 06.13.17 at 3:40 am

female offspring of ponzi

In my past forty years of my buying, investing and selling everything, including 2 houses, well, if you don’t like/think Denise is a wise, smart and successful woman, you’d
really really hate my guts.

And I am being one hell of a humble hunk today.

Freedom First
Master of Freedomonics
Its my life

#141 I'm stupid on 06.13.17 at 6:03 am

In my humble opinion, the housing correction in Toronto will be far worst than people think. Everyone has an opinion based on technical data, past performance etc etc. But realestate is a very emotional asset, it has become the investment of choice for the risk averse. Those risk averse investors are going to panic and create one mama of a correction.

#142 Wrk.dover on 06.13.17 at 6:53 am

I understand Daughter of Ponzi’s point of view of Denises gloat.

But the real idiot in the story are all of the home owner’s whom did not pull a Denise, and cash out.

I still shake all over thinking about the VanKong person that left $200k on the table because a ten day closing date was too soon, sometime last winter.

People do the damnest things to get money, then turn around and do the stupidest things with it.

#143 pBrasseur on 06.13.17 at 7:00 am

#106 InvestorsFriend – I have no strong view on whether the Canadian dollar will fall or rise in terms of U.S. dollars but I just don’t see why paying down debt would impact it.

I do, at least for the long run, the CAD already fell because one (overvalued) pillar of the economy (oil) faltered. We all know RE is the next shoe to drop and it will severely impact the economy, more so than oil. Many investors, local and foreign, will simply dump Canada. Governments are deep in debt and have little margin to offset troubles (the feds have a bit more but not for long). The only variable that can really move is the CAD, sooner or later it’s heading for the basement and will stay there for a long time.

#144 GFD on 06.13.17 at 7:01 am

“The significant problems we have cannot be solved at the same level of thinking with which we created them.”
A. Einstein

#145 fancy_pants on 06.13.17 at 7:36 am

typical politicians. zero foresight. always late knee jerk reactions. reprimand those late to the party. or you can believe in a bait and switch but this has deer in headlights written all over it.

#146 pBrasseur on 06.13.17 at 8:02 am

Not everyone buys the Loonie rebound!

http://business.financialpost.com/news/economy/more-room-for-loonie-to-fall-rbc-warns

#147 ⌂ home free ⌂ on 06.13.17 at 8:04 am

Did you hear that the Post Office just recalled their latest stamps?

In recognition of the RE industry they had pictures of real estate brokers on them … but people couldn’t figure out which side to spit on.

#148 Another Deckchair on 06.13.17 at 8:10 am

Dear Daughter of Ponzi;

I used to think the same way, until:

1) Learnt how much profit the “fundraisers” of a favourite charity of mine made;

2) Learnt how much money those above me on the corporate ladder made, and how much they cared about those in the depth below;

3) Learnt that, material things don’t really matter much to me.

As you know, western society runs on money.

So, what should one do? Read the posts and on-internet interviews of mrmoneymustache.com, and many others. Figure out how money works.

Think about what’s important – and to me, that is people, not a new car.

Money is an enabler – it allows one to do what one thinks is important.

For some, it will be gambling at Seneca (hi SM ;-) for others it will enable them to give their time to helping others.

What would you do if you had enough money to not have to “work” again?

#149 Grey Dog on 06.13.17 at 8:13 am

Denise, YOU ARE BRILLIANT!
What is on your bucket list?

#150 Bottoms_Up on 06.13.17 at 8:14 am

#3 Raging Ranter on 06.12.17 at 6:49 pm
—————————-
Market in Ottawa is strong, sellers are actually selling and not having to list their properties as rentals.

#151 Kool Aid on 06.13.17 at 8:16 am

A negative RE price spiral will sour the stacks of paper that underpin elevated RE value, resulting in higher interest rates in the near term.

Simply, a significant RE bust will be a lose – lose for most Canadians, this bloated asset class can not implode in isolation, other asset classes will also be impacted, expect serious collateral damage.

Guess cash will be super fashionable this autumn.

#152 Grey Dog on 06.13.17 at 8:22 am

Airbnb, I like the idea of them being home hosted. Owners responsible for them on site.

Many vacant homes or condos Airbnb guests have no responsibility to honour, whereas, even a long term renter will abide by condo rules etc. If they want to live in peace.

#153 crowdedelevatorfartz on 06.13.17 at 8:22 am

@#135 nubbers
“I always thought it was the responsibility of the older generation to look after the next generation….”
*******
Downvote.

Aaannnd , when exactly is it the “next generations” turn to cut the umbilical cord, spread their wings and fly away from the nest?
25? 30? 35?……….. 45?
The “Boomerang Generation” to include all those that cant handle the big, bad, nasty, “no prizes for just showing up” real world ?
Or when your aging parents have no money left?

#154 Ned Flanders on 06.13.17 at 8:29 am

Here’s something I don’t get.
3 houses for sale on our street in leafy south Mississauga (2 recent renos that are owned by flippers).

The highest priced one ($1.7) was on the market since the start of May with no bites so now they have relisted at $1.9.

Is real estate economics different than regular economics?

#155 bigrider on 06.13.17 at 8:30 am

I asked my nonno what happened to all the mortar molesters in the GTA. Did they all go back to Italy and China? I snarked

He said ” you listen to me youa jackassa, nowisa da tima u cana picka upa someting good a littala cheaper because maybe somebody he maybe a swimma naked ifa you know what i meana”

He continued ” ifa you do and waita a bit, da price you guess , she’sa gonna go back uppa Uppa UPPA ! ”

No arguing with nonno

#156 RANDY Belwood on 06.13.17 at 8:34 am

More Tax Scams and Ponzi Schemes coming as your governments are broke and getting more broke

#157 maxx on 06.13.17 at 8:36 am

“……..the first rate hike in seven long years may be coming a lot sooner than it takes to grow one of those awful man buns”

Now that would be cause for celebration.

As for the man bun….. creepy, just about anywhere in the west, but not as dumb and irritating as the current proliferation of cue balls who answer a question or begin a sentence with “so”, accompanied by a slight musical lilt………..”

“So”, the state of the economy…..” Really? Want a lollipop with that?

Politicians, journalists and experts of all stripes sound like 6 year-olds with learning disabilities. If its meant to be endearing, it “so” ain’t working. It’s juvenile.

#158 bigrider on 06.13.17 at 8:38 am

Garth ,careful not to use a certain golf club as imagery nor analogous to any message you are trying to convey in the future as that may be misconstrued as racist as well.

#159 re., envy of the world on 06.13.17 at 8:45 am

Maybe the seller is indeed blessed, and maybe the buyer is indeed cursed. Either way, what business is it of yours?
…….

he/she was given an opinion. JUST as you are. And btw, quoting the Bible doesn’t add credibility to your post. Perhaps you thought it does?

#160 maxx on 06.13.17 at 8:47 am

The move to force owners to rent short-term only if they occupy the premises is phenomenally wonderful.

I would also legislate that ANY dwelling for sale that is next to a short-term rental unit of any stripe absolutely must have this declared in the listing. No exceptions.

People come home to rest, regenerate and live their lives, not to have some transient next door party-on ’til the wee hours.

#161 isuckless on 06.13.17 at 8:47 am

It started:
instead of outsourcing we now devalue our workers at home
http://www.cbc.ca/news/business/global-skills-strategy-1.4156364

This is another example of corrupt government and stupid voters

#162 Victor V on 06.13.17 at 8:51 am

Ontario offers public servants 7.5% raises, union links ‘unprecedented’ move to 2018 election

http://www.nationalpost.com/m/wp/news/blog.html?b=news.nationalpost.com/news/canada/canadian-politics/ontario-offers-public-servants-contract-extensions-7-5-per-cent-raises&pubdate=2017-06-13

#163 Shaggy on 06.13.17 at 9:01 am

OK, so a 30% haircut from the top is possible. Agreed, sounds horrible. But that takes us back to what? I looked it up for the GTA, it would take us back to December 2015/January 2016 pricing.

A much needed blow off, but hardly an end of the world scenario or justification for those advocating selling for the last 5 or 10 years.

It’s all relative. For those who did not sell in the last year, it means an equity reduction of more than $400,000 on the average detached 416 house. That’s tax-free money, so it represents almost the entire life savings of a successful person. Lost. For newbie buyers, all equity is gone and they owe more than their assets are worth. It could take a decade or so to make this up. Yeah, sure. No biggie. — Garth

#164 Victor V on 06.13.17 at 9:01 am

http://www.bnn.ca/fed-set-to-raise-interest-rates-give-more-detail-on-balance-sheet-winddown-1.777532

WASHINGTON – The U.S. Federal Reserve is widely expected to raise its benchmark interest rate this week due to a tightening labor market and may also provide more detail on its plans to shrink the mammoth bond portfolio it amassed to nurse the economic recovery.

The central bank is scheduled to release its decision at 2 p.m EDT (1800 GMT) on Wednesday at the conclusion of its two-day policy meeting. Fed Chair Janet Yellen is due to hold a press conference at 2:30 pm EDT (1830 GMT).

“The expectation of a rate hike…is widely held, and has been reinforced by the most recent round of Fed communications,” said Michael Feroli, an economist with J.P. Morgan.

#165 Penny Henny on 06.13.17 at 9:11 am

#134 Whazzzup on 06.13.17 at 2:15 am

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

Whazzzup is posting here now?
And it’s not positive new about house prices in Toronto.
Hmmmm…..

Definately without a doubt this means the market has topped out.

Closing date is Thursday. Fingers crossed.

#166 maxx on 06.13.17 at 9:24 am

#14 Nonplused on 06.12.17 at 7:16 pm

“I think the attack on Airbnb is outrageous! How dare the government dictate what you can and cannot do with a property you own! If you pay your property taxes, who cares if you rent by the month, day, hour, or even leave it vacant? It’s yours and you should be able to do as you please with it.”

I care, and so do many others. I think that the potential attack on my peace and quiet is outrageous. Hotel guests do not have the same attitude towards community as long-term residents do.

Those who wish to rent out short term had better have damned good, air-tight house rules about QUIET, ie, they should occupy the dwelling too, so as to enforce those rules.

……and pay every single dime of taxes owed from such rentals, and not simply “property taxes”.

CRA have my absolute blessing to track and collect all revenue owed from this business.

#167 The Technical Analyst, CSTA, CPD on 06.13.17 at 9:43 am

Not sure if anyone will read post #170+, but I wanted to point out just one simple thing:

– 40% DECREASE in price is not the same at 40% INCREASE in price. (any asset).

$1 million – 40% = $600,000. $600,000 x 40% = $840,000.

A loss of $160,000!

You would need an INCREASE of 67% to offset a 40% DECREASE.

Food for thought on those NOT SELLING and holding into a downturn.

Yup. Math is hard. — Garth

#168 InvestorsFriend on 06.13.17 at 9:49 am

Mark on the dollar

Okay so NOW Mark says Canadian dollar will rise because we will import less stuff as we pay down debt. That does sound reasonable. But it’s a completely different reason than his long-stated reason of more demand for Canadian dollars to pay down debt. Blowhard defined. I give up.

#169 fancy_pants on 06.13.17 at 9:53 am

#162 Victor V on 06.13.17 at 8:51 am

the extra $ selling off profitable assets (like hydro1) is burning a hole in her pocket. in her mind, what better way to spend it than to secure more votes.

#170 RyYYZ on 06.13.17 at 9:54 am

See a few people have popped up decrying an anti-AirBnB (or VRBO) rule as being somehow “communist”, anti-freedom, whatever. Can’t say I agree. Leaving aside the issue of units being held off the market so they can be used for this, it goes against all zoning rules, which arguably exist for a reason.

If you lived in one, would you really want your condo building to have a large number of transient (a week or less) residents? People who have no interest in keeping the place livable for actual residents? And actually the owners have little interest in that either, if they’re doing this. Bad enough (from experience with my girlfriend’s building) that these places are already full of (longer term) renters who in many cases don’t behave like owners would – no skin in the game.

I don’t have any skin in this game myself, but I don’t see widespread use of condo units as effective hotel rooms as being good for the people who actually live in these buildings. The return of (at least some) of these units to the actual rental or sales marketplace is just a nice bonus.

#171 RyYYZ on 06.13.17 at 9:59 am

#49 Barney Rubble on 06.12.17 at 8:32 pm

Surely the person is being sarcastic, Garth. Nobody can be that dense, can they?
——————————————————

Yes, yes they can. Or at least over-sensitive. It was at worst a somewhat unfortunate choice of words (without the rest of the phrase I assume is implied, something like “…in the armour”). It’s also possible that over-sensitivity to this word says more about the person who takes it that way than the person who used it.

#172 Airy Fairy B&B on 06.13.17 at 10:00 am

AirBnB plain and simple sucks.

We travel allot and rent short term accommodations always through other channels but AirBnB guys.

Dealing with amateur landlords is a pain in the arse. At least the other “booking” sites operate somewhat professional with private digs because the private operators are required to be licensed with their municipalities. The revenue is taxable and there’s some semblance of professionalism.

Just my experience over the last couple years.

AirBnB will nose dive and go by the wayside in 2 years max. Same as the “Uber’ guys. All sounded good and seemed to make sense at the time but .gov wants its share and there’s a reason they have regulations.

#173 LS in Arbutus on 06.13.17 at 10:05 am

Heard just last week that someone I know quit their job because they were very making more by running air bnb out of the several condos they own in Toronto.

I used VRBO last time I was in Tokyo. It was soooo great. A little studio apartment with kitchen and large bath for USD $150 in central (very good part) of Tokyo. Hard to go back to a hotel room after that.

#174 Doug in London on 06.13.17 at 10:05 am

@Daughter of Ponzi, post #113:
You sound like a typical Canadian, blaming the government for everything that people do to themselves. Did it EVER occur to you that these people who bought more house that they can really afford, at or near the top of a bubble did so by their own choice? Yes, I agree that bad monetary policy led to this problem of runaway house prices in the first place, but ultimately the decision is YOURS whether or not to buy in such an overpriced market.

#175 Tater on 06.13.17 at 10:11 am

#105 Smoking Man on 06.12.17 at 10:59 pm
I love Canada, Canadians, hockey players. But these misarble gobalist scum that have peneyrayed our schools, banks, and government.

Can’t take it any more. Let them put skin in the game and see how that works out. They can only survive with state guns and theft.

Canada is doomed. Im out soon.
——————————————————————-
Don’t let the door hit you on the way out.

#176 Lee on 06.13.17 at 10:30 am

#164 Victor V,

Why don’t you go work for the government then? And by the way, the way it has been structured with increases coming every six months in some cases it is closer to 9% compounded over four years. Also, keep in mind that the supplementary contributions on this 9% must also be included. All tolled, its like 10% over four years. But as I say, if you are upset, just go work for the government. Just don’t become a provincial prosecutor because I think like 70% of them are female so you probably wouldn’t be considered.

#177 n1tro on 06.13.17 at 10:49 am

@Alero01

“Did you really have to start this post with a word that’s a racist term used for persons of Chinese ancestry? Could you not have used the work “flaw” or “weakness”?”

ALERT!: Triggered snowflake about to melt.

The above is what is wrong with today’s left leaning, make sure not to offend anyone even when no offence is taken, social justice warrior, generation.

#178 pBrasseur on 06.13.17 at 11:12 am

A rare voice of reasons in an ocean of stupidity

http://business.financialpost.com/investing/global-investor/i-was-right-really-right-u-s-stocks-still-best-for-vanguard-founder-after-400-gains

Bogle’s been promoting the value of investing in U.S. assets since 1993, and returns back him up. The S&P 500 Index has climbed more than 421 percent since then, more than four times the performance of MSCI’s index of world equities excluding the U.S. European shares have gained about 180 percent, while Asia has added about 40 percent.
“So I was right, really right,” Bogle said.

I’d say…

Somebody should tell “the case for Europe” Ryan Lewenza this, it’s not about buying bargains and recovering losers, it’s about buying innovators and winners. Buy where free market capitalism thrives the most, you won’t do better.

Ryan never suggested exiting a US equity position in exchange for a European one. That’s silly. A smart investor maintains global exposure, while keeping an open mind free of dogma. — Garth

#179 IHCTD9 on 06.13.17 at 11:26 am

#162 Victor V on 06.13.17 at 8:51 am
Ontario offers public servants 7.5% raises, union links ‘unprecedented’ move to 2018 election

http://www.nationalpost.com/m/wp/news/blog.html?b=news.nationalpost.com/news/canada/canadian-politics/ontario-offers-public-servants-contract-extensions-7-5-per-cent-raises&pubdate=2017-06-13
______________________________________

This is why I take all measures to limit my exposure to taxation. Voting doesn’t work anymore, the Ontario Citizenry is primarily in it for themselves, and they now officially outnumber those that actually consider long term repercussions of decisions being made in the present.

Let’s refinance the Hydro rates and make the bills cheaper now and more expensive later, let’s hand out easy raises to public servants without a fight. Vote buying. And why not? In Ontario, it works every time. Watch, and you’ll see Wynne buy her way back to power using our unborn children’s money.

That is exactly how stupid Ontario dwellers have become.

#180 Ole Doberman P. on 06.13.17 at 11:39 am

Is anyone else noticing Calgary becoming more congested again – yet the rental market keeps bloating on rentfaster.ca?

#181 IHCTD9 on 06.13.17 at 11:41 am

#19 Alero01 on 06.12.17 at 7:21 pm

Did you really have to start this post with a word that’s a racist term used for persons of Chinese ancestry? Could you not have used the work “flaw” or “weakness”?
___________________________________________

Can I offer you a tissue?

#182 Mark on 06.13.17 at 11:52 am

“Okay so NOW Mark says Canadian dollar will rise because we will import less stuff as we pay down debt. That does sound reasonable. But it’s a completely different reason than his long-stated reason of more demand for Canadian dollars to pay down debt. Blowhard defined. I give up.”

I beg your pardon? I gave a number of reasons, all of which are valid, why there will be less demand on foreign imports, and more demand to acquire Canadian dollars to repay CAD$-denominated debt in a housing deflation.

More demand for Canadian dollars to pay down debt is just a fancy way, BTW, of saying that the savings rate will increase amongst Canadians. Which was a feature of the US real estate crash as well.

No need to call anyone a ‘blowhard’. There are multiple reasons why the CAD$ should appreciate sharply as the housing market in Canada deflates. Even in light of probable Bank of Canada policy rate cuts.

#183 IHCTD9 on 06.13.17 at 11:52 am

#156 RANDY Belwood on 06.13.17 at 8:34 am

More Tax Scams and Ponzi Schemes coming as your governments are broke and getting more broke
________________________

Aye, govern yourselves accordingly…

#184 NEVER GIVE UP on 06.13.17 at 11:53 am

#77 Pete from St. Cesaire on 06.12.17 at 9:33 pm
And why are hotels so darn expensive? $200 a night? $6,200 a month? Plus all the taxes? For a postage stamp sized single room that doesn’t even have a stove?
——————————————————-
What I don’t like is that most downtown hotels now are all offering huge ultra-modern rooms, with everything imaginable, at top dollar. If you can’t afford hundreds per night you stay home. There are no more hotels with small, simple rooms for a low rate. (There are some independant motels that have networked together to offer low rates to those who can show that they are on welfare, especially on the off-season. They will put you in touch with the next motel offering the same deal along your route).
Anyone remember the old Laurentien Hotel in Montreal; now that was a proper hotel the way a hotel should be.
==================================

I travel to Asia a lot and have really fallen in love with business hotels.
They seem to have a romance of their own that makes me feel at home. They are often bare bones, basic, but every one of them has a unique flavor especially in the lobby.
Canada is far too good for basic accommodations, so much so that our governments will not allow such hotels to be built. It has to be grandiose in order to get approvals. God forbid we put a hotel in a residential area! That is like mixing oil and water!

#185 TheDood on 06.13.17 at 12:01 pm

“You are “blessed” because you saddled some young fool with lifetime of debt and possibly bankruptcy? And smart? This is absolutely disgusting how you guys operate here!”

No, what’s disgusting is how easily the RE marketing and FOMO machine has manipulated the canadian masses into jumping over the fiscal cliff! There are too many dummies in this country and maybe some real-life education and learnings are in order. Perhaps a huge, years long melt/crash is exactly what is needed to prevent this idiocy from taking place again!

There is little doubt a correction is going to hurt alot of people. On the flip side, a significant correction will help a lot of families who’ve been able to ignore the marketing and FOMO.

#186 45north on 06.13.17 at 12:02 pm

She’s giving her notice at work in the next week or two, plans to retire in August and will be taking more gains out of her investment portfolio than her clerical job paid monthly for the last 21 years. “If I had not sold that house in March, I’d be working another seven or eight years,” she says. “I just can’t believe that this has happened to me. I am blessed.”

blessed and lucky – lucky to have a house to sell. She is one of the few people that sold – the rest just sat around and watched while the number of listings rose and the number of sales fell.

#187 Mortgage Burning on 06.13.17 at 12:09 pm

#68 The real Kip

I finally got the mortgage discharge papers in the mail today. They sure drag their feet sending out that paperwork!

First off: congratulations!

Next: I heard about these delay tactics before. If you don’t pester them you may never get it. I wonder what the bank’s incentive is for delaying this procedure. What’s in it for them?

#188 cto on 06.13.17 at 12:11 pm

#134 Whazzzup

Whazzzup!….is that you???
You’re not the Whazzzup I read before…or did you get knocked on the head and start seeing things a little differently now???
maybe you sold all your real estate assets and are now hoping on the crash instead of expecting the relentless climb…
Wow! the world is changing!!!

#189 milleniallmoose on 06.13.17 at 12:14 pm

I agree with the Airbnb regs. When it first started the whole point was people with spare rooms would rent them out, not an entire empty apartment/house! Besides, staying with locals is what made it cool. We stayed in Italy for 40$cad a night and our host gave us wine on arrival and fresh pastries in the morning. He also give us advice on what to eat and where to go. Way more interesting than renting out an empty condo.

#190 Mortgage Burning on 06.13.17 at 12:14 pm

#70

$12,000 yearly upkeep ? Stop . You’re embarrassing yourself

Not if you count property tax as upkeep. That’s half that sum right there.
New roof, new boiler, new lawn, new paint every so often: you’ll get there.

#191 cto on 06.13.17 at 12:23 pm

LalaPoluza is now trying to justify his rate cut a couple years ago by the latest employment news, (two years later). Wow Stephen! Glad to see you had a lot to do with this.
Well, if Stephen had a lot to do with the latest employment numbers, then he must have had a lot to do with this little bubble that been brewin here in Canada.
What’s worse Stephen? an uptick in the employment?…or the potential scenario that is about to befall us over the next few years due to your moral hazard policies???

#192 LL on 06.13.17 at 12:23 pm

…”In fact, this has been one of the only ways to financially justify buying a condo since sticking a long-term tenant in there guarantees negative cash flow”…

Short term renting is the only way to make a bit of money and pay the mortgage.

Mortgages are so high, renting long term is, of course not an alternative.

#193 Shyster Realtor Scum on 06.13.17 at 12:24 pm

Realtors need lots of regulations. They are useless liars. Btw RE prices are crashing.
http://www.cbc.ca/beta/news/canada/toronto/toronto-area-couple-loses-30k-deposit-after-bad-advice-from-double-ending-real-estate-agent-lawyer-says-1.4156491

#194 Braj on 06.13.17 at 12:26 pm

#137 Ponzius Pilatus on 06.13.17 at 2:32 am
Smokie,
Are you in rehab or something?
Your posts are shit.
You know, writers like Hemmingway wrote their best stuff when drunk.
Get on with the program.
What have you got to lose?
Your sanity or your life.
A small price to pay for immortality.

Shoemaker Ponzius at it again.

#195 Ogopogo on 06.13.17 at 12:38 pm

Laughing so hard I think my neighbours might think I’m on ‘medicinals’. This confirms everything I’ve been seeing in Kelowna lately as I relentlessly track every single property on MLS in the downtown and Kelowna South area. Some properties in my portfolio have been reduced 3 or more times, while others sit unsold for over a year, all this despite the drooling mob of realtors claiming it’s a ‘hot’ market.

Vultching in a couple of years will be a hoot. Chomping at the bit to bring to heel a formerly greedy S.O.B. seller and their smarmy, barely literate realtor.

#196 HaHaHa on 06.13.17 at 12:41 pm

Do not be so hard on daughter of Ponzi. In her defence if she is a millennial its is not entirely her fault to have the views she does. We were all young once and were brainwashed by liberal thought as early as the sixties. Remember the hippies? Personally I look around and see people my age (54) who are not able to retire. Some still with 200,000+ worth of debt. So hang in there daughter due to demographics these fools need another fool to come along and take this debt (house) off their hands. All Ponzi schemes come to an end. Would have happened a lot sooner without government intervention. Just make sure you SAVE money to pounce on opportunity.

#197 april on 06.13.17 at 12:42 pm

#131 Dan.t – As far as I understand the same thing is going in Toronto and that market is in serious decline so why not Vancouver? Houses some say are in decline but condos another story.

#198 Fred on 06.13.17 at 12:51 pm

#105 Smoking Man on 06.12.17 at 10:59 pm
I love Canada, Canadians, hockey players. But these misarble gobalist scum that have peneyrayed our schools, banks, and government.

Can’t take it any more. Let them put skin in the game and see how that works out. They can only survive with state guns and theft.

Canada is doomed. Im out soon.

……….

you wont be missed. Bye.

#199 People are Strange on 06.13.17 at 12:53 pm

Guess this is a really strange coincidence……Lol

Condo Activity Boosts Residential Market In Montreal
BY CALEB MACCAULEY JUNE 13, 2017 REAL ESTATE NEWS
According to the Greater Montreal Real Estate Board, the performance of Montreal’s immense condo market has resulted to a record number of homes being sold during the previous month in that area. In the month of May, 5,057 residential properties were sold, which was up year-over-year by 15 per cent and a new record for that month.
The increase came about in the middle of concerns of a spill over effect in Toronto’s foreign buyer’ tax on the second-largest city in Canada as reported by the Canadian Press. Observers in Real Estate market have given their opinion on whether a 15 per cent levy on foreign buyers in the Golden Horseshoe region which includes the Greater Toronto Area, would push sales in Montreal.
Paul Cardinal of the Quebec Federation of Real Estate Board noted it’s too early to determine whether the tax which was endorsed by the government in Ontario last month in retrospect to April 21, would have an effect on dealings.
Cardinal noted Montreal is prepared to have one of its best years concerning sales of home, attaching that to increase in employment, addition of temporal tenants and causing consumer confidence to improve.
Paul explained; “Demand is strong and listings are going down. We’re back in a seller’s market for single-family homes.” Finance Minister for Quebec, Carlos Leitao guaranteed he had no intentions for the immediate term to have a foreign buyers’ tax on Montreal homes introduced, but is however open to the idea if there is need for one.

#200 Fred on 06.13.17 at 12:55 pm

Not if you count property tax as upkeep. That’s half that sum right there.
New roof, new boiler, new lawn, new paint every so often: you’ll get there.

……………

thnks, that’s not my experience. I own the house we live in and ENJOY ownership. Also own two other properties. I guess ownership isnt for everyone. And that’s cool.

#201 Contrarian Coyote on 06.13.17 at 12:59 pm

#195 Ogopogo on 06.13.17 at 12:38 pm
Vultching in a couple of years will be a hoot. Chomping at the bit to bring to heel a formerly greedy S.O.B. seller and their smarmy, barely literate realtor.

===

This x 100. Up here in the far end of the horseshoe made of gold, RE in Peterborough & the Kawarthas is getting interesting. Rumours & gossip abound in the RE offices that are red, white, and blue. Much bitterness and jealousy about the ‘lifer’ agents getting all of the ‘good’ listings while the young up-and-comers get zilch.

Most of those that joined in the past few years haven’t put in the time to network in the community and a few are just smarmy people to be honest. The lifers meanwhile can sit back and let their referrals call in because they have those deep community connections and are not just carpetbaggers with a stylish hairdo and a leased SUV. M’thinks there’s going to a mass culling in the RE job market up at this end of the horseshoe.

Keeping an eye out for a starter home in 3~4 years or some vacant land to build on. Love the stats from all the posters that show drops, drops, and more drops. Keep posting!

#202 Ponzius Pilatus on 06.13.17 at 1:00 pm

#194 Braj on 06.13.17 at 12:26 pm
#137 Ponzius Pilatus on 06.13.17 at 2:32 am
Smokie,
Are you in rehab or something?
Your posts are shit.
You know, writers like Hemmingway wrote their best stuff when drunk.
Get on with the program.
What have you got to lose?
Your sanity or your life.
A small price to pay for immortality.


Shoemaker Ponzius at it again.
———-
What?

#203 IHCTD9 on 06.13.17 at 1:02 pm

Boneheaded think tank predicts car dealerships will no longer exist in 7 years:

http://www.cbc.ca/news/business/ev-auto-dealerships-rethinkx-desrosiers-1.4151526

This has got to be one of the most bird-brained predictions ever penned into existence. Oil is dirt cheap, electricity is sky high, but tin can sub-compact electric cars that cost 40K are taking over by 2024!

Maybe in a metropolis that never sees sub zero temps, does not have families that produce children, and sells electricity for .03 KWHR, anywhere else forget it.

LOL, be careful of anything you read that originates from the RethinkX group, they’ve obviously never set foot outside of San Francisco…

#204 HPI on 06.13.17 at 1:09 pm

A heads up:
tomorrow new numbers will be out for Teranet House Price Index.

Also: a fun thought exercise:

The 1990 index for YVR is 55.36 and according to Bank of Canada inflation data, this should have been an index value of 93 in 2017, if house prices followed consumer price inflation.

Obviously, the prices did not. Instead, HPI is now 249.

A price drop of -63% would bring it back in line to monetary inflation rate.

That said, 1990 vs 2017 is kinda Apples vs Oranges.
In 1990, Vancouver was a provincial town.
In 2017, Vancouver is an international city with more allure.

Then you need to assess the delta:
Did Vancouver’s status in the world really grow by a factor 249/93 (2.7) ?
Do you get almost 3 times as much value from a yvr home now compared to yvr home then?

Personally, I will wait for my SFH lot to get up-zoned, and then sell.

#205 Dan.t on 06.13.17 at 1:27 pm

#197 April

BC is massive speculation and greater fools can only afford condos. If government policies take incentives out of speculation the same thing will happen.

Easy to get credit for 400k still and speculate and fools still haven’t got the memo… but it’s different in BC.

#206 Ole Doberman P. on 06.13.17 at 1:42 pm

Looks like Gartho was right again – Bank talking seriously about raising rates:

http://www.bnn.ca/bank-of-canada-to-assess-need-for-low-rates-as-growth-continues-1.776867

This should seriously spook people especially flippers. I mean we knew it was coming, but this makes it pretty official.

Brad Lamb likely just soiled his pants…

#207 Mark on 06.13.17 at 1:44 pm

“Okay so NOW Mark says Canadian dollar will rise because we will import less stuff as we pay down debt. That does sound reasonable. But it’s a completely different reason than his long-stated reason of more demand for Canadian dollars to pay down debt. Blowhard defined. I give up.”

No need to call anyone a blowhard. Really uncalled for and quite rude. I was just trying to step you through some of the logic of decreased demand for USD$ (and other foreign currencies, but particularly the USD$ since they are our largest source of discretionary imports), and the increased demand for CAD$ (to repay CAD$-denominated debt). Both of which would be expected to take place as the RE market falls.

#208 pBrasseur on 06.13.17 at 1:52 pm

Ryan never suggested exiting a US equity position in exchange for a European one. That’s silly. A smart investor maintains global exposure, while keeping an open mind free of dogma. — Garth

I’m sure there are a number of excellent European companies worth investing into.

But since you don’t invest in individual shares (except apparently for preferred) you’re stuck «playing» a market that’s been performing quite poorly and still has many challenges in front of itself, as do emerging markets.

Sure seems like a lot of trouble to make 7%!!! You’d have a real easy time putting together a bouquet of rock solid North American blue chips to get at least that…

Just apologize. Fewer words. Better message. — Garth

#209 jess on 06.13.17 at 1:53 pm

the known and the unknowns Obama and the red phone
warning maybe as trump says election rigged was true but not for his logic

DHS Secretary Jeh Johnson said last August that the department wanted to declare the systems as national critical infrastructure — a designation that gives the federal government broader powers to intervene — Republicans balked.

https://www.bloomberg.com/politics/articles/2017-06-13/russian-breach-of-39-states-threatens-future-u-s-elections
=======
leveraged buyouts, when private equity firms used a combination of equity and debt to acquire them.

more jobs have been lost in retail than coal mining in the usa.
E-commerce sales in the first quarter of 2017 accounted for 8.4 percent of total sales.
https://www.census.gov/retail/mrts/www/data/pdf/ec_current.pdf

#210 IgnoranceIsBliss on 06.13.17 at 1:55 pm

Sorry this is not related to today’s post:
A Realtor backed his new commercially-plated pickup truck into my car the other day… causing thousands of dollars damage to my car and countless days of me dealing with repairs, insurance claim, police report, etc.

While exchanging insurance details, the Realtor’s excuse was? “My backup sensors didn’t warn me.” And what did your reverse facing camera show when backing up, I asked? Sheepish silence.

Let’s hope he doesn’t back into one of his or the neighbours’ kids this summer. His insurance expenses will go up, but I suspect he has not learned his lesson.

#211 Johnny Boy on 06.13.17 at 2:08 pm

#105 Smoking Man on 06.12.17 at 10:59 pm
I love Canada, Canadians, hockey players. But these misarble gobalist scum that have peneyrayed our schools, banks, and government.
Can’t take it any more. Let them put skin in the game and see how that works out. They can only survive with state guns and theft.
Canada is doomed. Im out soon.
…………………………………………………………………….
When the going gets tough, the tough get going and “When the going gets weird, the weird turn pro.” or in your case “Ah F$5k it I’m outa here”
Good luck Smoking dude send us pics from the Antigua casino rooms, I hear they are nice.
BTW We will still be here in the True North Strong and Free waiting for your ultimate return back to Longbranch.

#212 jess on 06.13.17 at 2:18 pm

…” in Georgia where, late last week, a state judge denied and dismissed [PDF] a complaint [PDF] and motion for a Temporary Restraining Order [PDF] seeking to demand paper ballots at the polling place for next week’s much-watched (and most expensive ever) U.S. House special election. That, as voters will still be forced instead to use 100% unverifiable Diebold touch-screen voting systems at the polling place instead.

Then, speaking of elections and Diebold’s unverifiable touch-screen systems, we’re joined by “Diebold Document Whistleblower” [PDF] STEPHEN HELLER who, while working at a law firm in 2004, discovered the company and its attorneys were lying to the state of California about having illicitly installed uncertified hardware and software into its unverifiable voting systems that were, back then, allowed for use in the state. The touch-screen voting systems were decertified by the state following Heller’s disclosures, but he paid a stiff price for sharing attorney-client privileged documents with the media. The same system he blew the whistle on in 2004 will be use in Georgia for next week’s Special Election, and Heller offers thoughts on that issue.”

http://bradblog.com/?p=12183

=========
ten years of warnings! 100x’s worse than Diebolt

and Virginia only got rid of these in 2015!
WINVote touchscreen voting machines after learning about security problems with the systems, including a poorly secured Wi-Fi feature for tallying votes.

The problems with the machines are so severe that Jeremy Epstein, a computer scientist with SRI International who tried for years to get them banned, called them the worst voting machines in the country.

https://freedom-to-tinker.com/2015/04/15/decertifying-the-worst-voting-machine-in-the-us/

#213 Brett in Calgary on 06.13.17 at 2:21 pm

Congested? I have noticed that rentfaster.ca is quite plump and that condos continue their dove tail. The only things moving these days at an increase are single detached. Will it continue?

I returned bottles on the weekend and what a sorry site the folks in the depot were… I am not buying any idea of an economic recovery after seeing that.

#180 Ole Doberman P. on 06.13.17 at 11:39 am

Is anyone else noticing Calgary becoming more congested again – yet the rental market keeps bloating on rentfaster.ca?

#214 bdwy sktrn on 06.13.17 at 2:22 pm

The delinquency rate in Toronto was just 0.12 per cent, and 0.15 per cent in Vancouver, compared to a national average of 0.34 per cent.

http://www.cbc.ca/news/business/cmhc-homeowners-debt-1.4158195

Delinquencies have always amounted to irrelevant data in Canada, unlike the US. – Garth

#215 CJBob on 06.13.17 at 2:34 pm

#105 Smoking Man on 06.12.17 at 10:59 pm
Im out soon.
____________________
On a related note the average IQ of Canadians is about to increase.

#216 Rational Optimist on 06.13.17 at 2:41 pm

Another place in my neighbourhood, after open houses on the weekend, just relisted for about 10% higher than the original list, which is typically the increase the others have got. I guess this is the price they really want (I hope not “need”), compared with the original incite-a-bidding-war list. In this case, the description now features the phrase “**We are not holding offers**”.

#217 AJM on 06.13.17 at 2:48 pm

#212 bdwy sktrn

Everyone’s favourite business network had a guy on today chatting about this topic:

http://www.bnn.ca/video/canadians-add-to-mortgage-to-avoid-bankruptcy~1145300

#218 IHCTD9 on 06.13.17 at 2:49 pm

Talking with a supplier of mine this am regarding the direction of Ontario and Canada in general. Wow, total agreement in both ideology and action. I’m used to being a lone wolf when it comes to the action part of the equation.

He is different in one way, he’s leaving upon retirement in 2-3 years. I can’t see myself leaving, but if I have it my way (and I will), then I should be near bulletproof when the government finally starts firing off tax salvos of desperation – one after another.

Supplier guy will head to a low cost, Male and Western friendly, sunny location to loiter a decade or three before backing into the dirt parking lot. Making an utterly complete escape.

I love changing seasons too much for that plan, and no other country with 4 seasons is any better than here. So I drafted up my plan to exit the current (and future)revenue generators set in place by our collective brokeass governments. I have the land, privacy, security, equipment, skills and resources to make it happen, and much is on the go already.

The current plan remains in place, and in ten years will be updated to include current financial status, figuring in the basic income program if was implemented, along with possible early retirement – and a start to removing funds from tax shelters at the best possible tax advantage.

Wynne and Trudeau have themselves to blame, the Millennials get to cover my tab from here on in. Might as well, they probably voted for those two cash torching dingbats in the first place…

#219 Shaggy on 06.13.17 at 3:03 pm

It’s all relative. For those who did not sell in the last year, it means an equity reduction of more than $400,000 on the average detached 416 house. That’s tax-free money, so it represents almost the entire life savings of a successful person. Lost. For newbie buyers, all equity is gone and they owe more than their assets are worth. It could take a decade or so to make this up. Yeah, sure. No biggie. — Garth

Thanks for the response, Garth. Couldn’t agree more, it’s all relative. For all those who have bought in the last year and a half it could be catastrophic. However, a little perspective is in order. Going back to 2010 and before people, including myself, have been saying that this market is over-valued by traditional valuation measures. A 30% blowoff from the top would not only be healthy IMHO, it only takes us back 18 months and most of this generation of buyers are still reaping a substantial windfall from this run up.

Now, the question that needs to be asked is “do we have a new way of valuing the GTA (i.e. world class city premium, foreign investors, immigration), or are we in for a 30-40% drop and a decade of flatlining to get back to 6x household income in the GTA?”. I’m betting the latter, but I’ve been wrong for the better part of a decade…and I seem to be in good company:

http://business.financialpost.com/investing/global-investor/if-you-invested-by-warren-buffetts-philosophy-over-the-past-decade-you-would-have-lost-15

#220 IHCTD9 on 06.13.17 at 3:09 pm

#105 Smoking Man on 06.12.17 at 10:59 pm
I love Canada, Canadians, hockey players. But these misarble gobalist scum that have peneyrayed our schools, banks, and government.

Can’t take it any more. Let them put skin in the game and see how that works out. They can only survive with state guns and theft.

Canada is doomed. Im out soon.
________________________________

Good luck SM, I’d be leaving too if there was a way. It’s really just evolution at work, the smart and fleet of foot survive, the plodding fools come to lie in their own blood.

I figure 50 years from now, Canada will be an entirely different – and opposite place compared to what it was 50 years ago. I’m not made for a future like that, and thankfully I likely won’t be there to wade around in it.

#221 Stan Broock on 06.13.17 at 3:11 pm

AirBNB move is stupid.

Corrupted politicians backed by greedy hotel chains. Follow the money to see who benefits.

This is why Europe is different. Hostels and AirBNB everywhere. This is what affordable travel is about.

Low budget flights for 20 euros.
Picture that.

—————————–

As for raising CAD interest rates, it is not gonna happen.
That is mathematical and logical certainty. It is amazing to see the attempts to confuse the public and the dead cat bounces of a failing currency.

#222 Stan Broock on 06.13.17 at 3:13 pm

#213 CJBob on 06.13.17 at 2:34 pm
#105 Smoking Man on 06.12.17 at 10:59 pm
Im out soon.
____________________
On a related note the average IQ of Canadians is about to increase.
————————————
Canadians and IQ? That was funny.

#223 Rob Fortyyy on 06.13.17 at 3:21 pm

It will be really fun to see the City of Toronto try to enforce the Airbnb ban. Will they have undercover officers pose as renters in sting operations like they did for Uber? Just another failed tactic to appease the NIMBY crowd.

#224 choptstix on 06.13.17 at 3:23 pm

#29VanMan

Christy Clark didn’t want the party to end for her real estate buddy cronies. Now she will leave it to others and act like it wasn’t her fault…. problem in BC is simply any supply gets bought up by speculators. There will never be enough supply when foreign money and illegal money is allowed to park itself in BC and speculation is so profitable. It is killing the standard of life and pushing out locals. Not good for a sustainable economy. Policy sucks big time in BC…. but those who own don’t care, as long as that equity keeps going up forever.
————————————————

totally agree…no wonder the BC libs lost seats in the lower mainland as they’re tone deaf to the outrage over unaffordability (whether you want to buy or have to rent)…can’t wait for the NDP/Greens to kick them to the curb.

and for those who think the NDP/Greens will destroy the equity in BC realty, think again….Dave Eby ran and won for Pt Grey (think Forest Hill, Toronto) repeatedly.
see min 21 in the youtube interview with steve saretsky
https://www.youtube.com/watch?v=7yRczBxZBhs

#225 brad on 06.13.17 at 3:23 pm

If your property is zoned as residential then guess what…..you can’t operate your property as a business….Residential zoning is the backbone of any society which is being destroyed by people operating nightly rentals for profit. In my condo we have a 1 month minimum limit on rentals….still not acceptable and up for review in the HOA meetings.

#226 Stan Broock on 06.13.17 at 3:31 pm

#220 brad on 06.13.17 at 3:23 pm
If your property is zoned as residential then guess what…..you can’t operate your property as a business….Residential zoning is the backbone of any society which is being destroyed by people operating nightly rentals for profit. In my condo we have a 1 month minimum limit on rentals….still not acceptable and up for review in the HOA meetings.

————————————–
It is not your condo then. You just have a claim on it but it is not yours.

It is community/joined ownership.

In your property it would be up to you to decide.

All these regulations are very annoying, everything is with it seems good intend but with bad outcome.

Affordable housing at 1.5 mil SFH
zoning, regulations but unbearable commute and no infrastructure.
High taxes but no retirement.

….

#227 IHCTD9 on 06.13.17 at 3:31 pm

Trudeau is going to break the all time record for spending per capita:

http://www.cbc.ca/news/opinion/trudeau-government-spending-1.4157160

Yes, he is going to blow Harpers spending record while dealing with the Global Financial Crisis.

And he’s going to do it WITHOUT a war or recession on his plate.

Just blowing money on… whatever. You know its bad when hopeless liberal Neil MacDonald starts ripping Trudeau a new one for incinerating money. That’s rock bottom folks.

Get out your calculators and start planning your kids financial futures, or buy them a plane ticket…

#228 Stan Broock on 06.13.17 at 3:46 pm

#105 Smoking Man on 06.12.17 at 10:59 pm

# 1 lesson they teach in the obedience courses at school is to avoid and be against any from of critical thinking.

Extreme Conformism in the hands of incapable and incompetent rulers is a recipe for disaster.

#229 jess on 06.13.17 at 3:51 pm

algo’s or manpower?

“According to an estimate by the Committee for a Responsible Federal Budget, the IRS fails to collect $600 billion a year in taxes, mainly because it doesn’t have the bodies to do its job.”

…the IRS workforce had been cut 30% since 2011.
https://www.dcreport.org/2017/06/13/want-to-fix-the-budget-collect-taxes/

=======

#230 -=jwk=- on 06.13.17 at 3:56 pm

@ #17

#3 Raging Ranter

I noticed the rental market here in Orleans suddenly tighten over the past year. I wonder if AirBnB can explain part of that. It’s not like we’ve seen a jump in population or anything. In fact, government jobs are moving to the west, not the east end of the city.

LOL, who would come on vacation to Ottawa and rent a house out in Orleans? I couldn’t think of a worse vacation and I’ve lived in Convent Glen since 1990.

You know you can just go to airbnb.com and type in “orleans” and check, right?

Facts
1) there are no hotels east of vanier in Ottawa.
2) there are dozens of 5 star rated rooms on airbnb in Orleans
3) the six I just looked at are pretty much fully booked for June….

#231 Livin Large on 06.13.17 at 4:20 pm

in a word Rob…Yes. That’s pretty much exactly what they will do.

Think about it. The AirB&B listing database is like a catalog of offenders with a log the rentals.

#232 Chink in the armour on 06.13.17 at 4:20 pm

If interest rates start to rise, this would end up being a nasty chink in the armour of the real estate bull market

Gonna go get me a bucket of KFC to celebrate when that happens!

#233 InvestorsFriend on 06.13.17 at 4:20 pm

Why are mortgage delinquency figures irrelevant?

Delinquencies have always amounted to irrelevant data in Canada, unlike the US. – Garth (from 212 above)

*************************************
That seems to be true. I have watched these figures closely for years and they never really budged when Ontario was in a recession a few years ago. They barely moved and remained ultra low in the current Alberta recession.

But how can this be?

Is it because in a rising home price market anyone who can’t pay the mortgage just sells the house for a gain? (I suspect that is part of it)

Is it because mortgage providers in Canada are ultra careful and seldom give a mortgage to anyone who might lose their job? (probably explains some of the reason for lower delinquencies but not all)

Is it because it is so easy to borrow new money to make payments on old loans that there is simply no need to be delinquent? (I think so)

Is it because the banks have so many ways to avoid a customer going on the 90 days late list? They can offer skip a payment (or four). They can extend the term of the loan. They can lend new money to make the mortgage payments. (I think so)

Let’s look at mortgage delinquencies in the U.S. when they spike? (The figures here are 30 day delinquencies)

https://www.federalreserve.gov/releases/chargeoff/delallsa.htm

Well, it was in 2007 and they continued to rise steeply until peaking in 2010. The start of the spike in delinquencies came BEFORE most of the home price declines and is widely thought to have been due to mortgages given to people who had no ability to pay. I am not sure if credit tightened up causing the inability to borrow to make the payments.

In the U.S. it appears delinquencies led to credit getting cut off and led to the lower home prices.

Back to Canada. Why do we not get 30 day delinquency reports? Those would be a better early warning? Those would be harder for banks to hide?

It seems delinquencies will be a lagging indicator, but if home prices drop a lot and/or credit tightens up I suspect we will finally get that spike in delinquencies.

#234 waiting on the westcoast on 06.13.17 at 4:29 pm

Mark said… “We know that in 2008/2009, when the US RE financing marketplace locked up, the USD$ shot sky-high. Why? Because there was no credit creation, and hence, Americans had little to no money to go buy foreign imports. US imports crashed. The same is likely to happen to Canada. The CAD$ will shoot to the moon, but the reason it will shoot to the moon is that nobody will have much of it to spare as CAD$ wealth is destroyed by asset deflation at a rate far faster than new CAD$ can be conjured into existence by borrowing. This is why rate cuts and additional extraordinary measures by the Bank of Canada (QE, NIRP) are almost a certainty, much like the Fed was required to engage in extraordinary measures (and arguably remains doing so even to this day) to keep the US economy liquid and functioning.”

Mark – the US$ largely went up due to fear in the marketplace by investors globally as the recession kicked in. While it is ironic that the US$ would go up as its economy spiraled downward, that is one of the benefits of being a global currency. You need to add variables for things like this to prevent erroneous conclusions…

Mind you, I missed that Canada would choose maintaining low rates despite a reasonably ok economy and thereby create the massive bubbles that we now have. ;-)

#235 Howard on 06.13.17 at 4:56 pm

#225 IHCTD9 on 06.13.17 at 3:31 pm
Trudeau is going to break the all time record for spending per capita:

http://www.cbc.ca/news/opinion/trudeau-government-spending-1.4157160

Yes, he is going to blow Harpers spending record while dealing with the Global Financial Crisis.

And he’s going to do it WITHOUT a war or recession on his plate.

Just blowing money on… whatever. You know its bad when hopeless liberal Neil MacDonald starts ripping Trudeau a new one for incinerating money. That’s rock bottom folks.

———————————

Wait til you see the bill that’s coming to bail out underwater home owners

#236 waiting on the westcoast on 06.13.17 at 4:57 pm

Mark – read this… even though it’s predicting a higher CAD, it is because they are assuming a better economy in Canada. If the housing market implodes the BoC will lower rates to try to stave off a recession but the dollar would fall in any case as investors would exit Canada and thereby reduce demand of Canadian currency….

http://www.financialpost.com/m/wp/news/blog.html?b=business.financialpost.com/news/economy/painful-day-to-be-a-short-seller-as-bank-of-canada-drops-glaring-hint-rates-are-soon-to-rise&pubdate=2017-06-13

#237 Stan Broock on 06.13.17 at 5:00 pm

#231 InvestorsFriend on 06.13.17 at 4:20 pm

Disseminating the politically correct data and hiding the real state of the affairs is the reason we are in the deep doo doo. even sinking deeper in it.

GT is correct, any delinquencies data that points to real problems will be hidden and obscured.

Herdonomics 101.
The only was to deal with the problems when TSHTF is to reject their very existence and hope they go away next day.

One can ignore reality but can’t avoid/ignore the consequences of ignoring reality.

#238 jess on 06.13.17 at 5:22 pm

Ford Motor Credit Co., for example, said last month that it was partnering with financial technologies company AutoFi to enable customers to buy a vehicle straight from a dealership’s website

#239 newtothis on 06.13.17 at 6:36 pm

Hey “OttawaGuyRenting”, looking for news about our town and how it will be affected. I’m an OttawaGalRenting close to you waiting to buy….

#240 InCohodesShorts on 06.13.17 at 8:04 pm

Hmm after the first couple lines I was convinced this was going to be a post about foreign buyers.

#241 Where's The Money Guido? on 06.14.17 at 1:21 am

Re:
#223 brad on 06.13.17 at 3:23 pm
If your property is zoned as residential then guess what…..you can’t operate your property as a business….Residential zoning is the backbone of any society which is being destroyed by people operating nightly rentals for profit. In my condo we have a 1 month minimum limit on rentals….still not acceptable and up for review in the HOA meetings.

Also, in your mortgage for your residential property, it says (in most mygs) that you cannot run a business in your res. prop.
So if they find out you’re AirBNBing it, they can call your mtg.
My last 2 mtgs. had that item in it. Beware the mtg holder looking through the listings and finding yours, you could be in big doo doo with them.

#242 nubbers on 06.14.17 at 3:58 am

crowdedelevatorfartz on 06.13.17 at 8:22 am
@#135 nubbers
“I always thought it was the responsibility of the older generation to look after the next generation….”
*******
Downvote.

Aaannnd , when exactly is it the “next generations” turn to cut the umbilical cord, spread their wings and fly away from the nest?
25? 30? 35?……….. 45?
The “Boomerang Generation” to include all those that cant handle the big, bad, nasty, “no prizes for just showing up” real world ?
Or when your aging parents have no money left?

For the record, looking after the next generation does not have to involve shelling out large sums of money.

Just not duping them into a lifetime of debt slavery would do.