The blame game

So just how ugly was June in Toronto? Ugh.

UPDATE: July 6, 8:30 am EDT: The latest real estate stats are as gruesome as anticipated, according to the Toronto Real Estate Board.

Sales plunged year/year by 37% last month. Worse, the level of deals collapsed 21.6% compared to the previous month. That means active listings continue to pile up – with a stunning 60% more properties currently for sale than just one year ago.

Prices are starting to respond. The average value was off 6% in May and down again in June – this time by 8%. If the GTA housing market were the stock market, we would not be in the grips of a significant correction. Which, of course, we are. More tonight.

_________________________________________________________

The CBC reporter who corralled me with a cameraguy in a downtown Toronto park was cute. “Foreigner buying plunged to less than 5% after the speculation tax,” he blurted. “what’s your comment?”

So here’s the back story. This week the Ontario government revealed the number of real estate deals involving non-beaver people in the month after it brought down a 15% tax upon them. The area surveyed was the urban corridor hugging Lake Ontario from Niagara (where prices have doubled in three years) to Oshawa (where they haven’t). The result? In that period of time 4.7% of buyers were foreign dudes. The other 95.3% were Canadian citizens or permanent residents.

Did this mean the tax was doing its job, quickly kicking these spec-loving interlopers from our pristine soil? After all, while the province had no hard evidence on which to base such a massive tax, the finance guy had mused that “maybe 8%” of all deals involved foreign money.

The answer, of course, is no way. The province counts only real estate closings (in which a deed changes hands and is registered), not contracts between buyers and sellers. Normal practice is to have 60 or 90 days pass between an accepted offer and closing day, which means the sales counted in April and May were probably arranged during February and March – the absolute zenith of the GTA housing bubblefest.

In other words, the level of foreign activity may have indeed peaked at 4.7% when the market was insane with no tax in place. This is almost exactly what local realtors (and a certain pathetic blog) hypothesized. So if you were to conclude the Chinese dudes tax was a kneejerk, jingoistic, xenophobic, opportunistic, deplorable-placating sop, you’d be correct. Ontario just told the world to shove off, for no discernible benefit and much potential harm.

But, what about the argument that the survey area was too large and foreign buying is concentrated in certain pockets, as it has always been in (say) Vancouver?

Good point. It is. But so what? If Ontario brought in a tax on pasty, bearded Millennial homeowners with fixies and Starbucks points cards, then whole hoods of slanty semis held together with bug spit would be at peril. People congregate and pay a premium to do so. Get over it.

There are two conclusions, I told the reporter. First, this tax had no basis in fact, is 100% political and won’t do diddly to bring down the price of a single house. If you want to know who’s responsible for stupid prices and insane borrowing, look in a mirror. Second, the market is toast, all of its own accord. Prices hit a ceiling. Lenders pull back. Debt limits are reached. The sacrifice required to buy a house becomes too great. And once sales and sentiment dip, the correction begins – which is exactly where we are now.

(Get ready for some highly interesting numbers coming out of the Big Smoke real estate board tomorrow. Bring pointy sticks and marshmallows.)

Meanwhile, lest you think only Toronto has a wobbly market where recent buyers may come to bitterly regret their actions, contemplate Calgary and Vancouver. Realtors in both places this week unveiled the latest statistics, which show gathering weakness.

In Cowtown the twin threats of sub-$50 oil and a legislature full of dreamy Dippers remain unabated. House sales last month improved 8% but the number of listings has surged 24% – so there’s now close to six months’ worth of inventory. Not good. The benchmark house price advanced a whopping 1.7% in the past twelve months, which is almost exactly the inflation rate. In other words, real estate stagnated and sellers paying the usual commission would be guaranteed a loss if they bought a year ago.

Condos? Crushed. Only 286 changed hands in an entire month while listings ballooned by a fifth. The benchmark price has now fallen 4% in a year, and demand continues to wilt. Good luck trying to sell one of those suckers.

Finally, poor YVR. The Van board reports that sales overall in June tanked 11.5% year/year and (more worrisome) were lower by more than 10% from just the month before. Detached home sales slumped a hefty 15%, and prices have started to flatline.

The big story is all about the misguided moisters. They’re propelling condo sales higher, masking a real deterioration in the broader market. Look at the sales-to-listings ratio – it was 93.2% for condos (hence, bidding wars) but just 24% for detached. Like Calgary, SFH prices are barely keeping up with inflation, while the kids have shoved condo values up 17.6%, and almost 3% from just last month.

Well, we’re on the path down now. Good luck to everyone who didn’t get the tweet.

Oh, and if you run into a Chinese dude, apologize.

 

 

235 comments ↓

#1 Johnny D on 07.05.17 at 6:56 pm

Oil futures and oil stocks are getting way oversold. Especially here in Canada.

You know reason is out the window when a good oil producer like Crescent Point Energy gets it’s share price halved in a few months but a soon to be bankrupt sub prime mortgage lender like Home Capital gets saved and more than triples from its lows.

#2 Jerry on 07.05.17 at 6:57 pm

It is sure different in Vancouver–ask anyone who lives there.

#3 I thinks I know something on 07.05.17 at 6:57 pm

Garth, you do like statistics when they support your position, but not when they don’t.

I only use the best ones. — Garth

#4 The True State of Victoria on 07.05.17 at 6:57 pm

Uh oh, VREU, it looks like you have some ‘splaining to do about Victoria’s ever rising prices:

The benchmark value for a single-family home in the Victoria core increased by 15.1 per cent to $829,600 in June, compared with $721,000 last year.

Still waiting for that plunge in sales, noted for the past two years, to materialize into price decreases…

Hmmm….maybe there are some ‘new’ drivers to the Victoria market….whatever could they be?

http://www.timescolonist.com/news/local/june-real-estate-sales-in-capital-better-than-average-less-than-2016-1.20907426

#5 I'M NOT POLOZ on 07.05.17 at 6:59 pm

“The CBC reporter who corralled me with a cameraguy in a downtown Toronto park was __cute___. “Foreigner buying plunged to less than 5% after the speculation tax,” ___he___ blurted”

??????????? “Cute” and “he”????????

That being said, Poloz will shock every one of us next week when he raises interest rates for the first time in over 2.5 years.

Higher interest rates = higher mortgages.

No one seems to answer what a housing crash will do to a strong Loonie? Will my wife sell her assets on Back Page to pay the mortgage?

Is Morneau going to ask Dan Dicks at the next Bildlerberg meeting where his 5-year-old daughter lives (if he has one)?

We are living in interesting economic times in Canada.

#6 Rental property math on 07.05.17 at 6:59 pm

What they won’t be able to gauge is how much foreign capital is penetrating the market. After all, that UBC student living in a multi million dollar mansion is Canadian right?

Get over it. Non-story. — Garth

#7 I thinks I know something on 07.05.17 at 7:03 pm

“Well, we’re on the path down now. Good luck to everyone who didn’t get the tweet.” – Garth

————————————————————–

I don’t think so. The simple fact is that if you didn’t buy 3, or more, years ago, you’ll never be able to buy at a “reasonable” price in the GTA. And if you have contemporaries that bought 8 or 9 years ago, you’ll always be behind them financially unless you make way more money than they do.

#8 nick on 07.05.17 at 7:05 pm

DELETED

#9 The Technical Analyst, CSTA, CPD on 07.05.17 at 7:06 pm

Garth, I have to say, today’s photo is the funniest photo you (may have) posted in my 13 years of being on your blog.

Funny stuff (and it is 100% dog free, and contains no BBQ hot dogs either).

#10 TortyPapa on 07.05.17 at 7:07 pm

I still got that downpayment lined up and ready to go. Bring on the discounts!!

#11 Okanagan Man on 07.05.17 at 7:09 pm

Hey VREU,

Looks like Victoria purchasers haven’t been reading your lengthy emails. The market has what, doubled since you have been screaming it is overvalued and due for a collapse.

Come on, please do tell how much the market has appreciated since you have called for a collapse.

I think a correction may happen, but nothing to the extreme that you have been foaming at the mouth about. Certainly even a “correction” is doubtful before rates go up significantly.

#12 Bdog on 07.05.17 at 7:12 pm

Do we all really think a half point increase is going to affect the market? Delusional basement dwellers, we’ve heard this story before. We need 5-6% mortgage rates to make a difference which could be a generation away. NOTHING is going to change, accept it

#13 AGuyInVancouver on 07.05.17 at 7:13 pm

I understand your point Garth, but then how are people qualifying mortgages to buy at these inflated prices? Have lending standards gone completely out the window, I thought Home Capital was a one off. In Vancouver you can’t find much of a house for under $1.3 million. Unless millionaires are now buying crack shacks in undesirable areas, who is able to get the cash for these prices?

#14 jess on 07.05.17 at 7:18 pm

lookback

TRUSTEE BANKS SUED FOR $250 BILLION
Posted on July 19, 2014 by L. Randall Wray

http://neweconomicperspectives.org/2014/07/trustee-banks-sued-250-billion.html

#15 Pete on 07.05.17 at 7:22 pm

Garth is WRONG. Chinese dudes do have something to do with the bubble. If I were to assign blame for this bubble, it is as follows:

ultra-low interest rate: 50%
liar loans/lack of oversight/CMHC/HCG/banks etc.: 25%
government encouragements/deceitful realtors: 15%
Foreign buying (Chinese dudes): 10%

10% is not much, but it is still a factor. 5% of foreign buying is not much, but the last 5% also counts. If oil demand rose 5%, price would double.

#16 Hotdogs from Heaven on 07.05.17 at 7:25 pm

#9 The Technical Analyst, CSTA, CPD on 07.05.17 at 7:06 pm
Garth, I have to say, today’s photo is the funniest photo you (may have) posted in my 13 years of being on your blog.

Funny stuff (and it is 100% dog free, and contains no BBQ hot dogs either).

#9 The Technical Analyst, CSTA, CPD on 07.05.17 at 7:06 pm Garth, I have to say, today’s photo is the funniest photo you (may have) posted in my 13 years of being on your blog. Funny stuff (and it is 100% dog free, and contains no BBQ hot dogs either).
——————————————-
Garth, you have the photo tagged as “Pears”, they’re supposed to be Avocados.

#17 Lulu on 07.05.17 at 7:27 pm

Global News tonight mentioned that Power of Sale listing in the GTA surge to 2000-2500 from a two to three months ago 200-300 area… Wow, this is just the beginning, it is a BIG fxxking deal, hold your cash and wait till next year, it’s gonna be more than 10k at least.

Oh and house fire will be more rampant as home owners think burning down the property will get them some kind of insurance to cover the lost of their investment…. The Shxt Show finally lift it’s curtain!! Lets begin the show,,, shall we!? LOL

#18 Le Nanaimo on 07.05.17 at 7:33 pm

To the swimmers that encountered the Orcas at Whytecliff: Please send them home to Nanaimo to help propel our home prices. It’s not fair that you pump your sewerage into Ambleside to attract our Island ocean life. Next time they will bite you!

#19 Suede on 07.05.17 at 7:35 pm

strong CAD is baked in.

A few upticks in BoC rates won’t do much to quell horniness in lower BC is seems…

“I’ll just lock in and not worry”

People live month to month, not year to year.

#20 Renter's Revenge! on 07.05.17 at 7:37 pm

Anyone else feel hungry for toast?

#21 Brett in Calgary on 07.05.17 at 7:37 pm

“If Ontario brought in a tax on pasty, bearded Millennial homeowners with fixies and Starbucks points cards, then whole hoods of slanty semis held together with bug spit would be at peril.”

That was funny!

#22 Doug t on 07.05.17 at 7:39 pm

Attention Kmart shoppers we have a blue light special in aisle 3 – all the things on sale.

RATM

#23 Sales and prices down in GTA on 07.05.17 at 7:45 pm

Lots of people in trouble. Lots are maxed out on HELOCs and LOC and can not get anymore credit. The house of cards is set to fall. The dreamers can hope for no crash but its already here. Three cheers to happy crash guy.

#24 Nero on 07.05.17 at 7:46 pm

Can someone dig up any stats on numbered companies,
and businesses that purchace and own property on behalf of foreign nationals ( all perfectly legal of course ) ;)
My anecdotal sources in real estate law here in BC say business is good…very good indeed…
Don’t hold your breath for a meaning full correction as there is an endless stream of money at play….perhaps someone will notice someday?
Good luck dogs.

#25 SimplyPut7 on 07.05.17 at 7:46 pm

Get ready for some highly interesting numbers coming out of the Big Smoke real estate board tomorrow. Bring pointy sticks and marshmallows.

—————————————–

Saving the celebration for next Wednesday.

#26 Prices up!! on 07.05.17 at 7:52 pm

Sales are down but prices are up!!!

If you want to be rich buy a house because prices keep going up solidly.

#27 Trumpocalypse2017 on 07.05.17 at 7:53 pm

USA ABOUT TO ATTACK NORTH KOREA !!!!!!!!!!!

Perfect distraction strategy for Trump.

https://www.nytimes.com/2017/07/05/world/asia/north-korea-south-us-nuclear-war.html

http://www.express.co.uk/news/world/824893/North-Korea-news-missile-USA-latest-war-Kim-Jong-Un-Trump

And he wants to take on China, too:

http://www.foxnews.com/politics/2017/07/05/after-north-korea-missile-test-trump-tweets-so-much-for-china-working-with-us.html

Otherwise, he knows the summer will be about his presidency unraveling.

WAR IS COMING !!!!!!!!!!!!!!!!!!!!!!!!!

Prepare to leave urban areas in under 45 minutes at any time. Keep all devices fully charged.

#28 Victor V on 07.05.17 at 7:55 pm

New housing data from the Ontario government shows the new tax on foreign speculators may not have scared off buyers. From April to May, foreign buyers accounted for 4.7 per cent of home sales in the Greater Golden Horseshoe. Ontario Minister of Finance Charles Sousa joins BNN to discuss the data:

http://www.bnn.ca/real-estate/video/first-on-bnn-charles-sousa-responds-to-data-on-foreign-buyer-activity~1161127

What media incompetence. The numbers published by the province were impacted in no way by the tax, which did not exist when the transactions were done. Amazing. — Garth

#29 Sitting on 07.05.17 at 8:12 pm

#7 I think I know something

I don’t think so. The simple fact is that if you didn’t buy 3, or more, years ago, you’ll never be able to buy at a “reasonable” price in the GTA. And if you have contemporaries that bought 8 or 9 years ago, you’ll always be behind them financially unless you make way more money than they do.
—————————————————————

I guess by that analysis my kids will never be able to afford real estate in their lives and by the time they reach their prime earning Years houses will be worth 10 million dollars. Every gta home owner just hit the lottery. We have a city full of millionaires. Why even work, just stay home and keep taking out a HELOC and refinancing.

#30 Balmuto on 07.05.17 at 8:14 pm

Vancouver home prices just hit a new record. Foreign buyers tax seems to have had only a muted and temporary effect there. Condos leading the way now:

https://beta.theglobeandmail.com/real-estate/vancouver/greater-vancouver-condo-prices-surge-market-for-detached-properties-bounces-back-after-foreign-buyers-tax/article35554917/?ref=https://www.theglobeandmail.com&service=mobile

#31 Prices up!! on 07.05.17 at 8:15 pm

#28

Media incompetence aka fake news

#32 Terrence on 07.05.17 at 8:16 pm

U say 4.7% the other guy says 8% safe to say the truth is somewhere in the middle 6.35% foreign investment. We all know its way more than that, denying it is like putting your head in the sand. Do Capital flows mean anything to this blog?Hmmmm i wonder why BITCOIN & other CRYPTOS goin up in value? Probably nothing to do with Chinese money trying to flee mainland China?

There are currently only two data sets for foreign buyers in Toronto. The realtors say 5%. The province says 4.7%. How hard is that to understand? — Garth

#33 Fed-up on 07.05.17 at 8:24 pm

House price increases barely keeping up with the rate of inflation? Let’s not feel all warm and fuzzy about that after prices tripled in the past 10 years.

First the advance stops. Then the decline starts. What other pattern would you expect? — Garth

#34 dr. talc on 07.05.17 at 8:27 pm

#23 Sales and prices down in GTA on 07.05.17 at 7:45 pm
Lots of people in trouble. Lots are maxed out on HELOCs and LOC and can not get anymore credit. The house of cards is set to fall. The dreamers can hope for no crash but its already here. Three cheers to happy crash guy.

#23 Sales and prices down in GTA on 07.05.17 at 7:45 m Lots of people in trouble. Lots are maxed out on HELOCs and LOC and can not get anymore credit. The house of cards is set to fall. The dreamers can hope for no crash but its already here. Three cheers to happy crash guy.

It’s ‘realtors in a panic’ dude again.
Here’s a test for you, turn off your computer:
Pick a street, any street, and knock on every door, and say:
“I want to buy your house, I have all cash”
and 99.99% of people will tell you to get lost.
Nuff said.

#35 n1tro on 07.05.17 at 8:39 pm

@#189 Minimum Wage

Thank you for that article. It changed my perspective on the subject of the minimum wage issue.

#36 john on 07.05.17 at 8:42 pm

The host of this blog will not accept “alternate facts”. If it doesn’t suit him, will dismiss it as fake news, regardless of the facts provided by some very intelligent bloggers. But I guess that is what makes the site interesting.

What fake facts did you have in mind? — Garth

#37 Mike on 07.05.17 at 8:43 pm

My cousin is small time builder in north van., and he just sold his 2 builds <2500sf for ~1.6M each.

Buyers were represented as they were in China. Both all cash deals.

All pink snow falling is hoax. Reality is housing keep going up….flatline to best but those who didn't buy, lost.

#38 SimplyPut7 on 07.05.17 at 8:49 pm

#17 Lulu on 07.05.17 at 7:27 pm#17 Lulu on 07.05.17 at 7:27 pm

I thought the number of foreclosures was supposed to be at record lows, that was what the media was telling us.

Found the video, sharing.

http://globalnews.ca/video/3577965/greater-toronto-area-home-foreclosures-on-the-rise

#39 Koshy Alex on 07.05.17 at 8:51 pm

FEDERAL: DON’T GIVE OMAR KHADR $10 MILLION

https://www.taxpayer.com/resource-centre/petitions/petition?tpContentId=162

#40 DON on 07.05.17 at 8:51 pm

#4 The True State of Victoria on 07.05.17 at 6:57 pm

Uh oh, VREU, it looks like you have some ‘splaining to do about Victoria’s ever rising prices:

The benchmark value for a single-family home in the Victoria core increased by 15.1 per cent to $829,600 in June, compared with $721,000 last year.

Still waiting for that plunge in sales, noted for the past two years, to materialize into price decreases…

Hmmm….maybe there are some ‘new’ drivers to the Victoria market….whatever could they be?

http://www.timescolonist.com/news/local/june-real-estate-sales-in-capital-better-than-average-less-than-2016-1.20907426
#4 The True State of Victoria on 07.05.17 at 6:57 pm Uh oh, VREU, it looks like you have some ‘splaining to do about Victoria’s ever rising prices: The benchmark value for a single-family home in the Victoria core increased by 15.1 per cent to $829,600 in June, compared with $721,000 last year. Still waiting for that plunge in sales, noted for the past two years, to materialize into price decreases… Hmmm….maybe there are some ‘new’ drivers to the Victoria market….whatever could they be? http://www.timescolonist.com/news/local/june-real-estate-sales-in-capital-better-than-average-less-than-2016-1.20907426

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

ummmmm! Did you and Okanagan Man read the aritcle put out by the ever so honest VREB (geezus – someone give the realtors some crayons).

“The good news for buyers is that inventory is slowly starting to build, but buyers can still anticipate multiple offer scenarios in certain high-demand neighbourhoods where inventory is being bought at a more rapid pace,” said Balabanian.

Sooo Inventory is growing and 2017 would have been a record year – that is if 2016 wasn’t the PEAK year. Sales are down from last year. Prices higher as Garth has explained due to low inventory – “inventory is slowly starting to build”.

Ok – so Victoria is now on the way down from peak sales in 2016. This would explain why the two houses near me have been on the market for 2 months now. Realtors playing with the numbers….more crayons required.

Geezus…

#41 Fed-up on 07.05.17 at 8:53 pm

#33 Fed-up on 07.05.17 at 8:24 pm
House price increases barely keeping up with the rate of inflation? Let’s not feel all warm and fuzzy about that after prices tripled in the past 10 years.

First the advance stops. Then the decline starts. What other pattern would you expect? — Garth

————————————————————-

Errrr ummm… maybe significant/meaningful price declines in say, Calgary long ago?

#42 Tony on 07.05.17 at 8:58 pm

Good thing Calgary doesn’t have the empty home tax. A good percentage of owners who own more than one residential property go more than one year without a renter. The renters all left the province in droves.

#43 will on 07.05.17 at 8:59 pm

Coming home from work today talking to the bus driver about RE he told me this great story. A guy got this inheritance from his grandfather. Somehow the grandfather had acquired this “land” that was the result of a surveying error in LA in the 1930’s. The strip of land was about 3 blocks long and only 3 inches wide. The guy kept it for many years until a developer needed it and he sold it to the developer for $12 million. A tall tale? I dunno. If it is it’s a good one. Any other offbeat RE surveying tales out there blog dogs?

#44 john on 07.05.17 at 9:03 pm

I deplore the people that are were left behind waiting for the house price collapse. It is like the miners in West Virginia waiting for Trump to bring back their jobs. In either case it is not going to happen.

People who cannot afford to buy, should not. Simple. — Garth

#45 Ronaldo on 07.05.17 at 9:05 pm

#13 AGuyInVancouver on 07.05.17 at 7:13 pm

I understand your point Garth, but then how are people qualifying mortgages to buy at these inflated prices? Have lending standards gone completely out the window, I thought Home Capital was a one off. In Vancouver you can’t find much of a house for under $1.3 million. Unless millionaires are now buying crack shacks in undesirable areas, who is able to get the cash for these prices?
—————————————————————-
Bank of Ma and Pa who believe they are richer than they are with their illusory gains in their own home equity. They will soon realize that they are poorer than they thought.

http://business.financialpost.com/personal-finance/mortgages-real-estate/over-40-of-first-time-home-buyers-in-canada-cant-afford-a-house-without-their-parents-help-report-suggests/wcm/7581193f-2fad-48e8-be2d-d60152c7b40d

#46 Alex on 07.05.17 at 9:08 pm

@Bdog “Do we all really think a half point increase is going to affect the market? Delusional basement dwellers, we’ve heard this story before. We need 5-6% mortgage rates to make a difference which could be a generation away. NOTHING is going to change, accept it”

This is EXACTLY the type of person who’s gonna get owned (f**ked) the most.

“Great time to buy, there will be a recovery in September” <- every agent who works for me keeps saying that… and one mover too!

Good luck little buddy! Sweet dreams!

#47 jon on 07.05.17 at 9:09 pm

This information would be more useful if we also knew the percentage of sellers which were foreign. The decrepancy between the foreign buyers% – sellers% is a much more important mectric. A positive discrepancy would mean foreign ownership is increasing.

Let’s say that in the month in question the percentage of foreign sellers was 2.7%. That would mean that 2% or about 366 of the 18,282 of properties sold were net foreign buyer acquisitions. If this hypothetical discrepancy were to hold true for a year. Then each month 366 more properties in this are would become acquired by non residents (4,392 a year).

Now this increase would not explain why housing prices have risen dramatically, but it would explain why certain people BELIEVE foreign buyers are a “problem”, because foreign ownership may be on the increase and for a variety of reasons they don’t like that.

Without the foreign seller statistic we do not have the complete picture. I wasn’t able to find the actual government report. Anyone have a link?

#48 For those about to flop... on 07.05.17 at 9:13 pm

Some idiot at 8:43 pm
My cousin is small time builder in north van., and he just sold his 2 builds <2500sf for ~1.6M each.

Buyers were represented as they were in China. Both all cash deals.

All pink snow falling is hoax. Reality is housing keep going up….flatline to best but those who didn't buy, lost.

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

Try out this one for a hoax.

Buy 5 million

Sell 4.4 million

More on the way…

M43BC

Sold on May 22 2017
4765 Pilot Rd West Vancouver 5m.paid asking 5.295

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

#49 Fran Deck Jr. on 07.05.17 at 9:20 pm

Canada is the third-world of the financial markets … the bubbles will burst and there will be suffering …

http://globalnews.ca/news/3350193/canada-launder-money-real-estate-report/

#50 A Reply to #36 john on 07.05.17 at 9:25 pm

“The host of this blog will not accept ‘alternate facts.'”

What fake facts did you have in mind? — Garth

Two online dictionaries refuse to accept the phrase “alternative facts”—and rightly so!

http://www.dictionary.com/meaning/alternative-facts

https://www.merriam-webster.com/news-trend-watch/conway-alternative-facts-20170122

#51 FLHTK on 07.05.17 at 9:26 pm

whats the next big market besides houses oh fortune teller?

#52 Al on 07.05.17 at 9:26 pm

Re: #37 Mike
I too have seen non-resident buying through relatives resident in Canada. This way they benefit from the tax free capital gain for residential homes when they sell.

#53 For those about to flop... on 07.05.17 at 9:27 pm

I will put this up again to see if any realtor wants to help me do a market snapshot.

Some sales as recent as last week.

Let’s see what’s going on…

M43BC

1401-38 1st Ave W Vancouver..Paid 1.32 asking 126

447 232 st.Langley paid …4.15 asking..4.88

4302-4508 Hazel st.Burnaby paid 1.38 ask 1.5

275 Rabbit Lane West Vancouver paid 1.9

4368 Cambridge st. Burnaby paid 1.41 ask 1.49

6291 Bellflower Dr. Richmond paid 2.2

4405 Sophia st. Vancouver paid 2.33

5688 Sussex Ave Burnaby paid 1.96 ask 1.68

1607 Balmoral Ave. Coquitlam paid 1.3 ask 1.39

4468 Blair Dr Richmond paid 1.15 ask 998

26290 126 Ave. Maple Ridge paid 2 ask 2.26

4655 Mahood Dr Richmond paid 2.04 ask 1.88

1470 Camelot Rd. West Vancouver paid 4.6 ask 4.99

4250 Chelsea Cres. North Vancouver paid 3.15 ask3.23

#54 Happy Housing Crash Everyone! on 07.05.17 at 9:28 pm

People are maxed out to the point they are BANKRUPT. HELOC and LOC allowed bankrupt people to continue playing the RE ponzi in the GTA. Now prices are going down with no more extended credit. Now people are starting to go bankrupt. If buyers stop buying, prices will crash 50% + in a year. It’s a ponzi scheme and its starting to fall. The realtor shills and speculators are screaming in horrible financial pain. You don’t see them but they are fighting ,many will get divorced , and many will lose EVERYTHING. Happy Housing Crash Everyone! :-)
http://globalnews.ca/video/3577965/greater-toronto-area-home-foreclosures-on-the-rise

#55 Victor V on 07.05.17 at 9:29 pm

#28 Victor V on 07.05.17 at 7:55 pm
New housing data from the Ontario government shows the new tax on foreign speculators may not have scared off buyers. From April to May, foreign buyers accounted for 4.7 per cent of home sales in the Greater Golden Horseshoe. Ontario Minister of Finance Charles Sousa joins BNN to discuss the data:

http://www.bnn.ca/real-estate/video/first-on-bnn-charles-sousa-responds-to-data-on-foreign-buyer-activity~1161127

What media incompetence. The numbers published by the province were impacted in no way by the tax, which did not exist when the transactions were done. Amazing. — Garth

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

To his credit, Sousa clearly draws distinction in the interview about the consequences of his government’s fiscal policy changes: “At this point, 4.7% is a reflection of activity that really took place prior to April 21st…”

#56 guru on 07.05.17 at 9:37 pm

honestly i could care less what happens to the market (i own a house in west toronto with a very small mortgage left) but i know for a fact that the market is about to collapse big time (already started a month or so ago). Whoever is buying right now will basically have their entire equity/savings wiped out by XMAS (and more). Those telling people that they should buy now is trying to screw you over..

#57 Chaddywack on 07.05.17 at 9:38 pm

The reason condos are going crazy in Vancouver is that even in East Van you’re hard pressed to find anything decent listed below 1.6…..no wonder!

Don’t see a lot of foreign investors on the east side, but I do see a lot of Hipsters.

Time for a Hipster tax. I’m sure they’d find some way to make it “ironically cool” to pay (especially if they were taxed by other Hipsters!)

#58 dr. talc on 07.05.17 at 9:41 pm

100% of blame goes to all levels of government and the banks
disenfranchised mobs of millennials blame foreigners and demand government do something
government, headed by a snowboarder, is happy to see the blame go elsewhere and promise to throw untold millions (borrowed), at computerized systems of data collection, taxes on foreigners that they will never collect, followed by analysis of the useless data;
meanwhile, back at the bank, cash arrives from all over the world to be pooled by front men, non foreigners, Canadian residents, etc to invest in real estate

#59 the hood is changing on 07.05.17 at 9:42 pm

VAN RE is probably never going to have a meaningful correction but every hood is changing.

The foreign buyers tax only affects 5% of the deals because 45% of buyers are new citizens with passport and all.

Lower Mainland is one of the preferred locations for the two biggest ethnic groups on the planet. Neither of these groups show any signs of slowing down their expansion and relocation. Family reunification is a core Canadian principle.

Just get used to it and move on or move out.

#60 Dee on 07.05.17 at 9:46 pm

Ive called this market cooked for so long that I no longer trust my judgement. Shouldve happened in 2009. I will wait to see what sept/oct looks like plus two rate increases by q1 2018 to believe it

#61 VanReal on 07.05.17 at 9:49 pm

Garth the reason Vancouver sales have decreased is due to a shortage of listings. The prices in my hood are still increasing with sfh now going for over 2 mil in many cases. Townhouses are going for over 1.3. Toronto may be slowing but I don’t see it happening yet in Vancouver. BTW don’t expect you to publish this because I don’t agree with you.

#62 Rates vs Capital on 07.05.17 at 9:51 pm

“But, what about the argument that the survey area was too large and foreign buying is concentrated in certain pockets, as it has always been in (say) Vancouver?”

So, is a city considered a ‘pocket’ now?

The influence of foreign capital was denied as simply pockets of investment until the BC government collected data. That data showed that over 20% of purchases in the CITIES of Richmond and Burnaby were from foreign purchasers. Not neighbourhoods, not parts of cities, but actual entire cities….

“After all, while the province had no hard evidence on which to base such a massive tax, the finance guy had mused that “maybe 8%” of all deals involved foreign money.”

As repeatedly stated here, 8% of marginal buyers caused a national decline in US prices by 32%. So I guess 5%, a big difference from the 8%, has no discernible effect? Got it…

“People congregate and pay a premium to do so. Get over it.”

Sure, lets ignore the ripple effect of the concentration of foreign capital into a city. Its not like those who sold and cashed out to those paying a premium – which is completely disconnected from local incomes – don’t move to other communities and completely distort those markets. I mean $3 million for a tear down bungalow will not impact other parts of the province right?

Low rates, lax lending, speculation, FOMO, Air BnB, etc have all played a huge role in the market but you continuously discount the impact of foreign capital.

Heck, even the countries from which the foreign capital flows laugh at our naive attempts to downplay its impact…

#63 Cristian on 07.05.17 at 9:52 pm

“Ontario just told the world to shove off”

My, oh my. As if real estate was the only way to invest in Canada or Ontario…

#64 IHCTD9 on 07.05.17 at 9:53 pm

#43 will on 07.05.17 at 8:59 pm
Coming home from work today talking to the bus driver about RE he told me this great story. A guy got this inheritance from his grandfather. Somehow the grandfather had acquired this “land” that was the result of a surveying error in LA in the 1930’s. The strip of land was about 3 blocks long and only 3 inches wide. The guy kept it for many years until a developer needed it and he sold it to the developer for $12 million. A tall tale? I dunno. If it is it’s a good one. Any other offbeat RE surveying tales out there blog dogs?

#43 will on 07.05.17 at 8:59 pm Coming home from work today talking to the bus driver about RE he told me this great story. A guy got this inheritance from his grandfather. Somehow the grandfather had acquired this “land” that was the result of a surveying error in LA in the 1930’s. The strip of land was about 3 blocks long and only 3 inches wide. The guy kept it for many years until a developer needed it and he sold it to the developer for $12 million. A tall tale? I dunno. If it is it’s a good one. Any other offbeat RE surveying tales out there blog dogs?

—-

The house my high school buddy grew up in was bought by his parents in 1963, and sold in 2005. Upon getting ready to sell, it had to be surveyed, and they found out there was an error back in 1963. It turned out 50% of the land he originally paid for, maintained, and thought he owned for 42 years was actually a canal allowance and belonged to the City.

But it gets better, he paid property taxes on that land the entire 42 years! He went to sue the surveying company but the owner was long dead and the company no longer existed. He sued the city to at least get the taxes he paid back, nope lost – not their responsibility.

Talk about getting it up the wazoo…

#65 OffshoreObserver on 07.05.17 at 9:53 pm

Link to Lulu’s “head’s up” about Global TV stories on GTA RE: http://globalnews.ca/video/3577965/greater-toronto-area-home-foreclosures-on-the-rise/?utm_source=Other&utm_medium=MostPopularVideo&utm_campaign=2017

#66 Lefty on 07.05.17 at 9:54 pm

Canada has twice the percentage of vacant homes compared to U.S. before their crash.

http://www.businessinsider.com/canada-vacant-homes-2017-7

#67 I thinks I know something on 07.05.17 at 9:54 pm

#29 Sitting on 07.05.17 at 8:12 pm #7 I think I know something

I don’t think so. The simple fact is that if you didn’t buy 3, or more, years ago, you’ll never be able to buy at a “reasonable” price in the GTA. And if you have contemporaries that bought 8 or 9 years ago, you’ll always be behind them financially unless you make way more money than they do.

—————————————————————

I guess by that analysis my kids will never be able to afford real estate in their lives and by the time they reach their prime earning Years houses will be worth 10 million dollars. Every gta home owner just hit the lottery. We have a city full of millionaires. Why even work, just stay home and keep taking out a HELOC and refinancing.

—————————————————–

I don’t know what you’re rant is really about or how it relates to my comment.

#68 Larry on 07.05.17 at 9:56 pm

In the stock market, people who short just five percent of a given stock volume can control both the direction and momentum. Five percent is the difference between having a selection of homes to choose from and having none to buy. From being a renter to living on the street due to zero vacancy. Heck, you don’t even need a five percent difference to win an election…

That five percent matters Garth.

#69 Victoria - the original on 07.05.17 at 10:09 pm

Money Laundering in Canada,

I worked for the OECD 20 years ago…. Friends worked in the money laundering and corruption division. The OECD used to talk about how Canada was one of the worst countries for money laundering …. and that was over 20 years ago….

#70 Al on 07.05.17 at 10:12 pm

The 4.7% foreign buyers are the honest foreign buyers as they cannot claim the primary residence tax exemption when selling. The other 20% of foreign buyers hide behind children of relatives resident in Canada when buying so that they can avoid paying the capital gains tax on sale.

Did you just make that up, or do you have data? — Garth

#71 Reximus on 07.05.17 at 10:13 pm

Canada has twice the percentage of vacant homes compared to U.S. before their crash.

——

Canada had twice the US ‘vacancies’ before the 08 crash too…they calculate it differently

#72 Sad! on 07.05.17 at 10:13 pm

4.7% of the Golden Horseshoe could easily translate into much higher numbers in Toronto. At even 10% of transactions foreign buyers would be the marginal buyer pushing prices higher. Sounds like the tax was entirely justified.

Sounds like a lot of people here just hate being wrong. — Garth

#73 Smoking Man on 07.05.17 at 10:14 pm

The Blame Game

Tomorrow watch how MSM puts the vaseline on the disastrous real estate numbers from June.

I blame no one for my demise on Bay street but myself, I consciously destroyed my old safe life, an amazing code Smith on a trading floor for a leading Canadian bank who everyone loved, and still love. But I pissed off a mind fkd globalist who has the steering wheel and everyone is scared shitless of the diversity inclusion pusher, has put me on the shit list never to work again.

Trapped in Purgatory, my old life if I played by the rules, 250k a year doing a hobby, vs chasing a writers dream. I chose to dream, it doesn’t pay well.

It’s very sad when my weirdness is 10 times worse then a person that doesn’t know if it’s a girl or a boy. And the state makes it normal to emasculate males.

Now that’s progressive.

#74 Ron on 07.05.17 at 10:17 pm

The real problem is that no one congratulates you on buying 10,000 shares of ZPR. Only a house pays dividends in envy.

#75 millmech on 07.05.17 at 10:19 pm

#4
Mortgage of $4200/mth, property taxes $500/mth, upkeep $500 mth, not bad, just over 5 large a month for housing for the next 25 years.
Of course it will probably double to 1.6 million in five years,3.2 in ten, 6.4 in fifteen.12.8 in twenty,25.6 in twenty five years( I am using realtor investment return rates for these calculations).Just look at how a small investment of $83,000 grows its way into a million dollar return on average every year.
You can not lose, real estate only goes up in Canada

#76 The BioTech Guy on 07.05.17 at 10:22 pm

Re: Selective choice of stats:

In my GTA hood average DOM in June was 13 days. That is still fast. In suburbia I can barely make it to the beer store and back in 13 days.

Average Sold to Ask is 101%. Prices up 30% up Y/Y

You guys have a nerve to call it… what ? A bubble burst. Buyers market ? Really ?

https://www.zolo.ca/mississauga-real-estate/erin-mills/trends

I know all real estate is local but we probably can find more counter-examples for Garth..

#77 FC16 on 07.05.17 at 10:28 pm

At my branch today in Stampede City to open a discount broker account and overheard the following in office next door….

Customer: bought last year for $550k and put down 20% and the city now assesses at $650k so wants to take out $50k for renovations. Was told by mortgage broker and dad to come to bank for heloc.

Banker (probably salivating): well, since bank allows up to 80% borrowing, you can take out more than $50k to use for renovations and the rest for a nice vacation.

Customer: oh cool!

Beware the siren calls of the heloc!!

———————————————————

For those who think 4% benchmark drop in Cowtown is nothing, please note this example I stumbled on two weeks ago…

First listed at $198k, now dropped to $191k as new listing and new realtor:

http://www.myfriendfernando.ca/listing/c4119791-412-13104-elbow-dr-sw-calgary/

City tax assessed value:

$236k

Quite the motivated seller…

Heed the sage words of Mr. Turner and sleep well at night.

#78 People are Strange on 07.05.17 at 10:30 pm

#26 Prices up!!

If you want to get rich, do anything right now except buy a house.
Regardless of what our wise politicos did, the sticker shock hit us in March like a bag of PEI potatoes! Nobody in their right mind can expect things to rise like this; way past our affordability calculations. Simple economics!!!!!!!!! Time to pluck your heads out of the sand. There are some outliers clinging to possible profits… but we’re way past that. The rates don’t mean squat, even if they stay at .5%!
If you can’t make good return on an investment, jump ship! There’s no money left to be made! My god people!!!

#79 People are Strange on 07.05.17 at 10:31 pm

I won’t even mention HELOC’s to top it off!!

#80 People are Strange on 07.05.17 at 10:33 pm

Speaking of PEI potatoes, there still may be some deals out east!

#81 sleepless in Langley on 07.05.17 at 10:43 pm

decent house in Langley, BC is from $900K CAD
same as about a year ago
so much for housing crash, wishful thinking it is
looks like this ship is sailed once an forever… :(
unless interest goes up to 7% – 15%
if it happens (I doubt it will) it will be probably outside the scopes of my life expectancy
well, we are all renters in this world

wtf is wrong with Canada?
same job in US pays twice more than here
same house costs twice less
we are so screwed…

#82 For those about to flop... on 07.05.17 at 10:45 pm

Smoking Man at 73
The Blame Game

Tomorrow watch how MSM puts the vaseline on the disastrous real estate numbers from June.

I blame no one for my demise on Bay street but myself, I consciously destroyed my old safe life, an amazing code Smith on a trading floor for a leading Canadian bank who everyone loved, and still love. But I pissed off a mind fkd globalist who has the steering wheel and everyone is scared shitless of the diversity inclusion pusher, has put me on the shit list never to work again.

Trapped in Purgatory, my old life if I played by the rules, 250k a year doing a hobby, vs chasing a writers dream. I chose to dream, it doesn’t pay well.

It’s very sad when my weirdness is 10 times worse then a person that doesn’t know if it’s a girl or a boy. And the state makes it normal to emasculate males.

Now that’s progressive.

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

I can let you run off the rails or I can get you to help me get PinkSnow.com up and running and we can help Canadians have a fighting chance.

Your choice…

M43BC

#83 Yuus bin Haad on 07.05.17 at 10:49 pm

O. M. G. CBC.

#84 Who's wearing pants? on 07.05.17 at 10:50 pm

That’s what we get to see, isn’t it? All the noise will be resolved when we see how speculators choose to react. Because speculators panic sell and push prices lower, like a runaway train.

#85 Riders of the storm on 07.05.17 at 10:55 pm

#73 Smoking Man on 07.05.17 at 10:14 pm

The Blame Game

Tomorrow watch how MSM puts the vaseline on the disastrous real estate numbers from June.

I blame no one for my demise on Bay street but myself, I consciously destroyed my old safe life, an amazing code Smith on a trading floor for a leading Canadian bank who everyone loved, and still love. But I pissed off a mind fkd globalist who has the steering wheel and everyone is scared shitless of the diversity inclusion pusher, has put me on the shit list never to work again.

Trapped in Purgatory, my old life if I played by the rules, 250k a year doing a hobby, vs chasing a writers dream. I chose to dream, it doesn’t pay well.

It’s very sad when my weirdness is 10 times worse then a person that doesn’t know if it’s a girl or a boy. And the state makes it normal to emasculate males.

Now that’s progressive.
..
Why work? I thought you sold your house and moved to Ecuador to spend your billions of untaxed forex winnings? what gives dude?

#86 People are Strange on 07.05.17 at 10:56 pm

Back in 1992, I had a friend who made it big in RE with a few friends. They lived the high life at the time and blew a lot of their profits. Him and 3 RE buddies ended up as salesmen in anything but RE. Too many realtors! Deja vu!!!

#87 FOUR FINGERS WATSON on 07.05.17 at 11:04 pm

David Rosenberg has issued yet another piece of blistering common sense (which most mainstream and sellside economists seem to lack in wholesale amounts these days), in which he explains why the action at the margin is all that matters for asset prices and all that follows.
…………………………………………
4.7% of the Golden Horseshoe could easily translate into much higher numbers in Toronto. At even 10% of transactions foreign buyers would be the marginal buyer pushing prices higher. Sounds like the tax was entirely justified.
Sounds like a lot of people here just hate being wrong. — Garth

#88 AisA on 07.05.17 at 11:17 pm

“Debt limits are reached”

This, blame this. No one thought such a thing possible but it is the destroyer of all asset bubbles. I grasped at straws for years trying to figure out what would do the trick. It all came down to this, the point of no return (that’s a double entendre for those who missed it) . The point where no matter how much easy money a lender stands to make, they have to look in the mirror and accept that they will never see that money again if they lend it.

#89 John on 07.05.17 at 11:20 pm

Did you just make that up, or do you have data? — Garth

Data can be manipulated in any which way. Asking “do you have data” is always an excuse for defending your opinion.

I’ll take that as a no. — Garth

#90 People are Strange on 07.05.17 at 11:22 pm

Btw all those friends got divorced!!!

#91 Duh Happening on 07.05.17 at 11:24 pm

Well… here’s my take.

The comment section of this blog has really turned over the last couple of months from supporting Garth and his calls of a correction happening, to now mocking him and saying housing will never collapse.

Once the bears become bulls, I take this as a sign that the crash is actually finally happening now!

#92 paulo on 07.05.17 at 11:27 pm

Judging by the comments this evening there is a definite bias in the blame game: its Chinese dudes. its other non citizen entities. well the stats are in and are pre tax implementation in Ontario so maybe 5% add a percent for the ones that slipped between the cracks so 6%.
in my opinion the truth of the matter is that everybody and his brothers uncle,your barber,cab driver and any body else with some cash and a reasonable credit rating has jumped into the great Canadian real estate ponzi scheme. the root of the problem is artificially low interest rates ,obviously poor underwriting by financial institutions that have a significant amount of there loan/mortgage book insured by the tax payer, and the lottery win available by way of the tax exemption for proceeds of sale of principal residence. basically the ingredients to fuel a out of control real estate market
primarily powered by home grown players.
well it looks like the gig is up, and the coming correction will be epic, with plenty of casualties during the process. so whom to blame. the BOC for keeping rates artificially low , banks for facilitating mortgages to people whom could never pass the actual legal requirements to qualifie for a mortgage in the amount they where granted. or out of date tax law that is subject to widespread abuse. either way it will be a interesting ride moving forward

#93 Scully on 07.05.17 at 11:37 pm

Garth,
I don’t read the comments that much but thought I’d give a read lately. I’m sensing a real snarkiness in the comments. As rates rise and RE prices drop get ready for more. Lots of outrageous claims from Vandelusionals – just missing the “my brother in law the builder just sold two houses for cash in North Van to a helicopter full of HAM.” LOL. People are so predictable. Fear and greed. Keep up the good work. I think I’ll stop reading the comments again. Too bat sh!t crazy.

#94 Happy Housing Crash Everyone! on 07.05.17 at 11:40 pm

Here is something crazy yet interesting Garth. 2% of GDP based on RE transaction fees? Just crazy

http://www.bnn.ca/video/chart-attack-this-is-how-crazy-canada-is-for-housing~1160885

#95 Sammy on 07.05.17 at 11:41 pm

#4 & #11,

Victoria’s hottest and richest areas have flat lined in price for the last 6 months. Listings are stacking up and going stagnant with price reductions aplenty. The VREB numbers don’t tell the whole story so please stay up to date.

#96 Fish on 07.05.17 at 11:45 pm

Big dogs usually eat first

#97 chopstix2112 on 07.05.17 at 11:47 pm

Or this.” After much speculation about the impact Chinese money was having on the real estate market, recently collected data by the province’s Ministry of Finance showed between June 10 and Aug. 1 about 25 per cent of all properties in Richmond were being purchased by foreigners (initial data showed Chinese nationals accounted for 90 per cent of “foreign nationals”).

After the tax was implemented, the rate of such purchases plummeted to 1.9 per cent in Richmond in August. But that figure has since sprouted to 4.4 per cent in September.

http://www.richmond-news.com/news/foreign-buyers-bounce-back-in-richmond-after-tax-1.2466051

#98 Ponnaps on 07.06.17 at 12:03 am

We seem to be blinded by statistics.. its not the volume of transactions as much as it is the prices that’s being set by the influence of foreign buyers… the 95% have no idea of the sources of this money(often laundered) and believe a new benchmark price has been set.. and that’s how it rolls on..

another fallacy is looking at the status of the individual rather than the source of the money.. leave alone the downpayment for homes, I know of people (yes citizens) paying their monthly car loans with money sent from abroad..

#99 Rates vs Capital on 07.06.17 at 12:08 am

Did you just make that up, or do you have data? — Garth

Data can be manipulated in any which way. Asking “do you have data” is always an excuse for defending your opinion.

I’ll take that as a no. — Garth

———-

Well, for over 5 years everyone denied the influence of foreign capital in Vancouver – always citing the absence of debate to shut down the ‘average joe’ cited patterns in real estate.

Fast forward 5 years, when terrible damage has been done, and all of a sudden the BC provincial government data confirmed what the ‘average joe’ knew for years – that in many communities like Burnaby and Richmond foreign capital constituted over 20% of sales. Foreign capital was an undeniable driving force, unless of course, 20% is nothing…

And just after that data, it was finally ‘safe for the media to highlight all the measures that foreign capital used to get money out of the home countries and into Vancouver real estate – numbered companies; houses with ‘student’ and ‘domestic’ on the land title; CIBC assisting with bypassing Chinese capital controls with the transfer of 50k increments to relatives and employees; new money transfer apps; and the list seems to be endless.

So #70 Al, yes, the odds are good based on past precedent that relatives are purchasing properties to avoid the tax. I am sure that the data will materialize in another 5 years, after even more damage has been done to the affordability in Canada’s key RE cities.

If you want to know the tricks that foreign capital use to influence the market, follow Ian Young with the South China Morning Post. He broke all the stories on Vancouver RE before it was ‘safe’ to do so…

#100 Rates vs Capital on 07.06.17 at 12:13 am

#94 Sammy

#4 & #11,
Victoria’s hottest and richest areas have flat lined in price for the last 6 months. Listings are stacking up and going stagnant with price reductions aplenty. The VREB numbers don’t tell the whole story so please stay up to date.

——

That is complete and utter BS. It may be the case in your neighbourhood but the stats show the complete regional trend – and that trend is hot. Many posters have credibly given MLS examples of houses selling like hot cakes, without conditions, over asking.

You must be related to VREU…you need to get out more and look beyond just your neighbourhood.

Funny how when prices are appreciating, we call the realtor numbers frankenstein numbers; but when the stats show prices and sales faltering, like they supposedly are in Vancouver, they are now suddenly credible. You cannot suck and blow at the same time people.

#101 Unhinged Trader on 07.06.17 at 12:30 am

So foreign buyers don’t use Canadian resident proxies to conduct their real estate purchases?

Your numbers have a glaring omission Mr. Turner.

#102 Statsmyass on 07.06.17 at 1:08 am

Since when & why is cash not king?

#103 Rook on 07.06.17 at 1:08 am

DELETED

#104 Mark on 07.06.17 at 1:08 am

“the BOC for keeping rates artificially low”

Just how has the BoC kept rates artificially low? If anything, the BoC has run overly tight monetary policy as we are now sitting here with the yield curve dangerously close to inversion, and month-over-month deflation with awfully weak YoY CPI numbers which are trending downwards.

I know 0% might seem like a low interest, “free money” as some might call it, but if housing is deflating, even 0% may be too high. If the media hype (and hype on this blog) is correct, Poloz may very well be on the verge of making a giant mistake, which would be quite unfortunate. Canada has so much unused potential at this time, and keeping rates artificially high isn’t helping matters. The capacity gap is so wide you could fly a freakin 747 through it.

#105 Xenophobia? - fake news! on 07.06.17 at 2:25 am

Garth, people don’t take issue with foreign Chinese buying Canadian property. How can you blame someone for taking advantage of an opportunity?

We blame our stupid government for allowing such purchases to take place. Why? Because the opportunity for a Canadian citizen to own property as a foreigner to China is not reciprocated by the Chinese government. It is really that simple.

So please, stop with the xenophobic trend word. This idea of xenophobia that you and many others keep suggesting is, for lack of a better phrase, fake news. Chinese people are not the target. It is the terribly imbalanced policy rules that piss people off.

Canada has an imbalance of real estate rules with a number of countries, but the only reason China is in focus is because the wealth creation is so great that it has created many buying options for it’s good citizens.

My understanding is that Denmark has similarly limited real estate ownership rules (like China), but the reason Canadians aren’t pissed off about the Denmark situation is because the Danes ain’t exactly an economic power house. So if the Danes are quietly buying up Canadian property, it is definitely not enough for people to notice.

In closing, xenophobia is NOT the issue. I personally find Chinese people to be very social and decent people. That is as a very good starting point for making good neighbours.

PS. 4.7% of sales volume can indeed move markets in a way that terribly distorts things for the local population earning crappy local incomes. I’ll post a link tomorrow regarding the Las Vegas experience that was capture in a study.

PSS. Even you understand that stock prices can be moved significantly under low volume conditions. This low volume oscillation can be seen most days between the high volume flurry of the opening bell and that section of time before the closing bell. So why not with real estate??

#106 Dan.t on 07.06.17 at 4:22 am

Sorry, but in good old BC, nothing looks even remotely affordable and everything east of van is crazy all the way to friggen Hope! And okanagan homes that cost 250k years ago are now 3x the price if lucky…

guess average house prices of 750k is just the price of living in BC! Basically anywhere in BC. Maybe in Pouce Coupe
https://en.m.wikipedia.org/wiki/Pouce_Coupe
there might be a home for under 480 k… get it now!

Has nothing to do with foreign money…right.

Plus maybe 2.85% free money banks give out, loose credit and speculation.

#107 [email protected] on 07.06.17 at 4:40 am

Garth , can you comment on post #24 by Nero? I think he is onto something. .. foreign money has many different paths, sometimes not that obvious. Perhaps only in BC…?

#108 Dan.t on 07.06.17 at 4:41 am

How do you define foreign buyers? In Vancouver UBC students of non-Canadian decent are rolling around everywhere with BMWs and buying couple 800k condos for fun. Yes that is a bit of a joke but doesn’t seem far off the money. I don’t believe the stats at all.

Foreign money plays huge role in BC!

#109 nubbers on 07.06.17 at 4:53 am

I’M NOT POLOZ @5

??????????? “Cute” and “he”????????

You might want to look up cute in the dictionary, although I have to admit that as soon as I read the first sentence, I had visions of Garth being dragged away by the PC Police and being sentenced to a soul searching TV interview with Bill Maher or similar.

#110 Here's The Deal on 07.06.17 at 6:37 am

#44 John

“I deplore the people that are were left behind waiting for the house price collapse. It is like the miners in West Virginia waiting for Trump to bring back their jobs. In either case it is not going to happen.”
——————————————————————-

Here’s the deal:

John is right.
If you can’t buy, RENT. It’s no big deal.
Billions of people do it.

Get over it.

#111 Trumpocalypse2017 on 07.06.17 at 6:41 am

Global warming tipping into high gear – an ice shelf the size of PEI is just weeks, perhaps days, away from breaking off.

https://www.theguardian.com/environment/climate-consensus-97-per-cent/2017/jun/12/the-larsen-c-ice-shelf-collapse-hammers-home-the-reality-of-climate-change

This soon to be free floating shelf will allow what remains behind it to melt off, raising sea levels.

Florida under water very soon, lots of climate chaos coming up. Millions of refugees, war and global crisis.

Prepare.

#112 Ace Goodheart on 07.06.17 at 6:43 am

There’s an interesting thing about the way old Toronto houses are constructed, which is becoming apparent now with all the fires that are happening here….

I own a few of them (all now upgraded with proper fire walls).

When we tore into these houses (fully permitted of course) we discovered that the attics are connected. In one house, we could see clear down to the home at the end of the street, five houses away. You could crawl from our attic into the next door neighbour’s attic, and keep going all the way along, from attic to attic. No barriers existed at all.

The dividing walls were made of lathe and plaster. No insulation, no fire barrier. Nothing.

Of course the upgrading costs quite a lot, to install a proper fire wall to the roof, to code.

I am guessing most of these “multiple house fires” are just one house catching fire, and the flames spreading through the attics. Makes you wonder how many million dollar Toronto row houses still have this problem.

#113 YYZWatcher on 07.06.17 at 7:02 am

Anyone with MLS access help me track a condo? I’ve been looking at #2406 – 80 Western Battery Road, Toronto for weeks now, it was listed, then pulled and relisted lower, then pulled again and listed lower, and now it’s disappeared. Sold? Or just pulled and sitting empty? Any help?

None of the usual places are showing that a deal closed (yet, I guess).

#114 Further to #184 A Reply to #158 Penny Henny on 07.05.17 at 4:59 pm#184 A Reply to #158 Penny Henny on 07.06.17 at 7:05 am

Here are some more topics that might interest you:

https://en.m.wikipedia.org/wiki/Stock_valuation

https://en.m.wikipedia.org/wiki/Fed_model

https://en.m.wikipedia.org/wiki/Intermarket_analysis

https://en.m.wikipedia.org/wiki/Irrational_exuberance

https://en.m.wikipedia.org/wiki/Behavioral_economics

#115 maxx on 07.06.17 at 7:25 am

#10 TortyPapa on 07.05.17 at 7:07 pm

“I still got that downpayment lined up and ready to go. Bring on the discounts!!”

Don’t pull the trigger quite yet, lest you make out with far, far less and help put a floor under prices, which only sates greedy sellers and realtards. Patience……

Greedy sellers can choke on it. I abhor the notion of them making out like Cheshire cats, having scored extreme amounts of this precious and increasingly difficult to get resource.

Rates may be low, causing the clueless to view cash as though it’s worthless and spend it like running water, but that’s a move to a major, generally irreversible quality of life downgrade.

Good jobs with benefits continue to evaporate while consumer credit bloats and rarely do the panting clueless factor in life-changing events in a re spend.

Greedy sellers and realtards don’t care about whether or not you HAVE the money, they just care that you can BORROW it. The fallout is totally irrelevant.

#116 maxx on 07.06.17 at 7:32 am

#19 Suede on 07.05.17 at 7:35 pm

“strong CAD is baked in.

A few upticks in BoC rates won’t do much to quell horniness in lower BC is seems…

“I’ll just lock in and not worry”

People live month to month, not year to year.”

This cake’s not done yet…….and people who live month-to-month often end up living hand-to-mouth. This is a more distinct possibility now than ever.

#117 Tony on 07.06.17 at 7:34 am

DELETED

#118 maxx on 07.06.17 at 7:57 am

#26 Prices up!! on 07.05.17 at 7:52 pm

“Sales are down but prices are up!!!

If you want to be rich buy a house because prices keep going up solidly.”

They may keep going up, for now, only because inventory is low. Mainly crap is left for the suckers, aka gf’s.

However, bank balances keep going up for those who refuse to listen to endless bs blathering by realtards. Hmmmmm, what’s likely to win out? Fat investment accounts or good ‘ol bricks and mortar……stay tuned.

Whatever shall the cash-heavy and smart savers do? Invest in better opportunities? Buy re in other jurisdictions? Travel? All of the above? How can they possibly stand liquidity and mobility at the same time? Or the incomparable feel of real wealth as opposed to “paper” wealth.

There’s nothing a greedy, undeserving seller loves more than to leave a lawyers office knowing a very fat cheque is forthcoming to then skip off into the sunset, luxe dreams aplenty.

Meanwhile, back on the farm, some gf has signed up for a freak-show mortgage. Hope it doesn’t lose its job.

The sweet spot for buying re is long gone.

#119 Smoking Man on 07.06.17 at 8:08 am

Climate Scam unraveling.

Michael Mann is an unrepentant and belligerent Technocrat who deceived the whole world with his so-called ‘hockey stick’ temperature model. His humiliation in a Canadian court should be a fatal blow to the entire climate change scam. Defying a judges direct order, Mann has refused to provide his data for public scrutiny.

https://www.technocracy.news/index.php/2017/07/04/fatal-courtroom-act-ruins-michael-hockey-stick-mann/

#120 crowdedelevatorfartz on 07.06.17 at 8:26 am

Garth, can we lock Trumpocalypse2017 and Smoking Man in a room with Hockey sticks and the person who walks out gets their choice of a years supply of JD or Toilet paper.

#121 -=jwk=- on 07.06.17 at 8:33 am

The 4.7% foreign buyers are the honest foreign buyers as they cannot claim the primary residence tax exemption when selling. The other 20% of foreign buyers hide behind children of relatives resident in Canada when buying so that they can avoid paying the capital gains tax on sale.
Did you just make that up, or do you have data? — Garth

I have data, we’ve seen 5 families move to Canada from China, with a 6th on the way. Everyone was a ‘local buyer’ who paid cash.

The chinese aren’t stupid. They know how to rent a PO box, or an apartment and use that as their address. Let’ see do I rent a mailbox for $180/yr (not a PO, a rental box with a real address) or pay a $50,000 foreign buyers tax? The first to come over, my wife’s cousin used OUR address…

BTW only one man is here, the rest are all back in China working while Mom and kid live here. The 6th family is likely to both stay as they have the money to pay cash and also just retire, or work for fun.

My wife is the only one who did not buy in China and thus we are the only family not millionaires. Buy buy buy folks. There is never a better time!

#122 Lee on 07.06.17 at 8:46 am

TREB calls for 18% increase in TO sale prices this year. Maybe next year folks.

#123 Andrew t on 07.06.17 at 9:03 am

#74 Ron on 07.05.17 at 10:17 pm
The real problem is that no one congratulates you on buying 10,000 shares of ZPR. Only a house pays dividends in envy.

#74 Ron on 07.05.17 at 10:17 pm The real problem is that no one congratulates you on buying 10,000 shares of ZPR. Only a house pays dividends in envy.
—-
Well put. Around the office I’m noticing the house lust talk is being replaced by envious tales of those who sold and cashed out. Lots more people are mulling that plan now, but the usual anxieties (“where will I move to?”, “what’s the “right move” to do financially next? Etc) crop up. Many are telling themselves “I’ll do it next year”.

#124 Smoking Man on 07.06.17 at 9:07 am

Wynee is toast, 70% ownership vs 30% renters.

She will bear the cross of the downturn. She was reaching for basement dweller votes when she brought in the fair housing law.

One more month of bad data and the law will be reversed. Will it be yo late is anyone’s guess.

But if you see listings dry up after the law is gone. Vaulch.

Just imagen if she brought in a law to cool the stock market, we are lucky she is so stupid, her politics will insure liberalism goes extinct.

#125 Foggy on 07.06.17 at 9:13 am

1. The % of foreign buyers is a complete unknown. There simply has not been enough data. Who’s to say that 5% foreign buyers has not existed for decades (maybe it was even higher in the past and lower now because prices are so high?). This is after all an immigrant country with an open, free market economy. It only becomes an issue when people desperate to buy homes, they can no longer afford, are looking for a scape goat.

2. Scape goat 1 – if you are looking for a scape goat then rightfully blame the government, incredibly low interest rates for too long (blowing another asset bubble), loose mortgage standards, allowing housing to become a speculative industry. You can have a gold bubble, tech stock bubble, tulip bubble, BREX, but housing should not be allowed to turn speculative/bubble. Housing should track inflation over the long term. Government can tighten mortgage rules and ensure homes sold that are not primary residences are taxed appropriately.

3. Scape goat 2 – US! Do you honestly think that people who bought during this run up in prices are geniuses? So far they are $hi# ass lucky. Jumping thru every allowable hoop (HELOC loans, bank of Mom and Dad, secondary lenders – sup prime, draining all the savings/RRSPs) to desperately buy a house is reckless. Our obsession with owning a house at all costs is pathetic.

4. Not different this time. – All asset bubbles correct. No one knows the timing. Unfortunately, people who were ‘locked out’ of the market on the way up, will buy in at the earliest possible moment on the way down, only to be burnt as they catch the falling knife. So obsessed we are with owning the 4 walls around us. The thing about bubbles is that most people do not believe we have one until it blows, then everyone is shocked that we didn’t see the obvious.

5. Houses are NOT worth more. That’s true. Credit has been made so easy to obtain that when it comes to home loans, the value of money has decreased, driving up the price of a house. Unfortunately the government does not include the run up in home prices in their inflation calculations. This easy home credit has driven the broader market as well, HELOC’s to purchase everything from boats to home renovations to a down payment for the kids. A decrease in home prices will affect a lot more than just your house.

#126 Asterix1 on 07.06.17 at 9:13 am

The latest: “TREB has issued a new 13- to 18-per-cent forecast for home sale prices this year”.

TREB is completely delusional, their statements must not be taken seriously! They represent the entire lot of snake oil salesman.

Absolutely no chance! Lets get those interest rate up! The Ontario government action plan has not even kicked in yet. Cant wait to see their next headline next month.

#127 fancy_pants on 07.06.17 at 9:23 am

reporting foreign $ in RE is like reporting the size of an iceberg based on what a landlubber can see from the poop deck. take it with the brine it floats on.

#128 Matt on 07.06.17 at 9:26 am

In the end, prices in GTA may dip a bit but if you didn’t buy a house 3-5 years ago, good luck. You will never be able to afford a house in Toronto unless you are a CEO. Even if you have a family income of 200k, how are you possibly ever going to afford 2m+ home (which btw, regardless of “stats”, the price of that house continues to climb.

By what logic should average families ever consider reaching for a $2 million home? It’s not a right. — Garth

#129 paulo on 07.06.17 at 9:26 am

well the numbers are in: The GTA Real Estate PONZI Game is Over. the ride has 2 wheels over the cliff tilting dangerously. Major Correction or Crash and Burn…….
stocked up on marshmallows looks like plenty of places to roast em!

#130 Ole Doberman on 07.06.17 at 9:31 am

Gartho is right again….

I was watching Highway to Heaven with Michael Landon on Netflix last night and the theme of the episode was racism against Asians.

Although it’s an old tv show it looks like this theme of blaming foreigners is nothing new…..Garth’s been around the block and has seen it all before.

I just wish I knew what the heck he was talking about here: “a legislature full of dreamy Dippers remain unabated.”

#131 Ole Doberman on 07.06.17 at 9:34 am

Also spreading like a pandemic is rising taxes, if it’s in the US it will spread to Canada eventually.

32% increase in Illinois – pretty crazy stuff.

https://www.armstrongeconomics.com/world-news/sovereign-debt-crisis/illinois-poster-child-for-the-coming-sovereign-debt-crisis/

“The policies of just tax’em til they die and they tax their heirs is coming to an end. Governments will collapse and the only solution is to limit government by a new constitution”

#132 Renter's Revenge! on 07.06.17 at 9:36 am

#74 Ron on 07.05.17 at 10:17 pm The real problem is that no one congratulates you on buying 10,000 shares of ZPR. Only a house pays dividends in envy.

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

Lots of bragging and envy about stock market gains during the tech bubble in the 90’s.

#133 Xbox Economist on 07.06.17 at 9:36 am

This is a nice headline story but I don’t think the analysis goes deep enough.

Firstly, I have no idea what the actual influence of foreign money is on residential real estate in Canada but I can tell you that looking at the number of registered buyers who are non-residents does not tell the full story. Having worked in the banking industry for many years, I know that many properties are purchased with money that originates from overseas. Purchases are made by family and friends who are resident in Canada. The Canadian banks have been very complacent in allowing the transfer of funds and often helped facilitate the transactions (by setting up multiple accounts, etc.). How do we measure the impact of this kind of foreign investment? I have no idea but I think Garth should acknowledge the same.

Secondly, there definitely has been a reduction in the amount of foreign capital flowing into the GTA real estate market recently. Banks have started to reduce the number of mortgages they create for international wealth management clients (i.e. foreign investors) – this is a fact that many WM employees already know. They may have done this because of greater capital controls imposed by foreign governments or perhaps because they sense the real estate market may have peaked and want to reduce their exposure. The banks are now focused on increasing the number of insured mortgages. However, even in this space, they are finding that CMHC is becoming stricter in their underwriting. An impact of the recent events surrounding HCG? Perhaps, but the banks are in no hurry to add loans to their books without insurance. It’s not necessarily the buyers that have vanished. It’s the sudden lack of financing. Let’s see how long this lasts.

#134 Lee on 07.06.17 at 9:46 am

I don’t get it. TREB says prices will be up 18% this year but they’re down 14% in two months. Are we looking at 32% up for the balance of the year? Or are they already smoking pot?

#135 Pete on 07.06.17 at 9:46 am

After a $5,000 massage of the housing numbers, GTA realtors say price in June 2017 is down to $790k, a drop of 14% from April 2017. Sales dropped 37%. Ouch!

#136 Pete on 07.06.17 at 9:51 am

Congratulations to the GTA realtors for the great massage so that the numbers do not look a loooot worse!

Next month prediction: sales down 50% to only 5000 units, price down to $720k, same as July 2017.

#137 Penny Henny on 07.06.17 at 9:55 am

#99 Rates vs Capital on 07.06.17 at 12:13 am
#94 Sammy

#4 & #11,
Victoria’s hottest and richest areas have flat lined in price for the last 6 months. Listings are stacking up and going stagnant with price reductions aplenty. The VREB numbers don’t tell the whole story so please stay up to date.

——

That is complete and utter BS. You must be related to VREU…
//////////////////

Ouch! Now that is an insult!

#138 Phil on 07.06.17 at 10:03 am

Garth here’s a question about this:

“Canada’s main financial regulator on Thursday proposed new rules for residential mortgages including banning co-lending arrangements, or bundled mortgages, that sidestep rules designed to clamp down on risky lending.”

Does it apply to DUCA mortgages you can share with friends?

#139 Steve on 07.06.17 at 10:23 am

What some buyers fail to realise is that if you buy at 750k and it goes up by a third your property is now worth a million dollars….congratulations!
If it were then to drop by a third it would be worth 667k…commiserations (when the penny drops)

#140 Bonhomme Carnaval on 07.06.17 at 10:27 am

Foreign buyers (and their satellite children) are welcome in QC.

#141 Rekt on 07.06.17 at 10:31 am

All types in 416 and 905 down 2-8%. See my MOM comparison.

http://imgur.com/a/yN7br

Source:

http://www.trebhome.com/market_news/market_watch/2017/mw1706.pdf

http://www.trebhome.com/market_news/market_watch/2017/mw1705.pdf

#142 Penny Henny on 07.06.17 at 10:31 am

#132 Xbox Economist on 07.06.17 at 9:36 am
This is a nice headline story but I don’t think the analysis goes deep enough.

Firstly, I have no idea what the actual influence of foreign money is on residential real estate in Canada but I can tell you that looking at the number of registered buyers who are non-residents does not tell the full story. Having worked in the banking industry for many years, I know that many properties are purchased with money that originates from overseas. Purchases are made by family and friends who are resident in Canada. The Canadian banks have been very complacent in allowing the transfer of funds and often helped facilitate the transactions (by setting up multiple accounts, etc.). How do we measure the impact of this kind of foreign investment? I have no idea but I think Garth should acknowledge the same.

Secondly, there definitely has been a reduction in the amount of foreign capital flowing into the GTA real estate market recently. Banks have started to reduce the number of mortgages they create for international wealth management clients (i.e. foreign investors) – this is a fact that many WM employees already know. They may have done this because of greater capital controls imposed by foreign governments or perhaps because they sense the real estate market may have peaked and want to reduce their exposure. The banks are now focused on increasing the number of insured mortgages. However, even in this space, they are finding that CMHC is becoming stricter in their underwriting. An impact of the recent events surrounding HCG? Perhaps, but the banks are in no hurry to add loans to their books without insurance. It’s not necessarily the buyers that have vanished. It’s the sudden lack of financing. Let’s see how long this lasts.

#132 Xbox Economist on 07.06.17 at 9:36 am This is a nice headline story but I don’t think the analysis goes deep enough. Firstly, I have no idea what the actual influence of foreign money is on residential real estate in Canada but I can tell you that looking at the number of registered buyers who are non-residents does not tell the full story. Having worked in the banking industry for many years, I know that many properties are purchased with money that originates from overseas. Purchases are made by family and friends who are resident in Canada. The Canadian banks have been very complacent in allowing the transfer of funds and often helped facilitate the transactions (by setting up multiple accounts, etc.). How do we measure the impact of this kind of foreign investment? I have no idea but I think Garth should acknowledge the same. Secondly, there definitely has been a reduction in the amount of foreign capital flowing into the GTA real estate market recently. Banks have started to reduce the number of mortgages they create for international wealth management clients (i.e. foreign investors) – this is a fact that many WM employees already know. They may have done this because of greater capital controls imposed by foreign governments or perhaps because they sense the real estate market may have peaked and want to reduce their exposure. The banks are now focused on increasing the number of insured mortgages. However, even in this space, they are finding that CMHC is becoming stricter in their underwriting. An impact of the recent events surrounding HCG? Perhaps, but the banks are in no hurry to add loans to their books without insurance. It’s not necessarily the buyers that have vanished. It’s the sudden lack of financing. Let’s see how long this lasts.

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

Best post of the day!

#143 Pete on 07.06.17 at 10:35 am

#133 Lee on 07.06.17 at 9:46 am I don’t get it. TREB says prices will be up 18% this year but they’re down 14% in two months. Are we looking at 32% up for the balance of the year? Or are they already smoking pot?

The average for the first 6 months of 2017 was $870,016. Because the first 4 months average are very high, at $768,972 for Jan, $876,731 for Feb, $916,709 for Mar, $920,791 for April, $863,910 for May, $793,915 for June.

The full year average for 2016 was $729,922. If price did rise 18% from that level, it will reach $861,307, or about the same as the current average 6 months. That means price has to stay above $870,000 for the rest of the 6 months left. Obviously, that is impossible because June is the peak month in price and sales and price has already come down to $793k.

The conclusion: yes, you are right. They are smoking pot and not very good quality ones too. Heard those low-class weeds will make people super-delusional.

#144 Pete on 07.06.17 at 10:41 am

It is pretty natural for GTA realtors to say price will go up 18% this year. This is a critical time for them. They can’t accept defeat, badmouth themselves and throw in the towels when prices are crashing. They have to man up and live up to be a true flipper.

#145 soost on 07.06.17 at 10:44 am

TREB: You see a m/m decrease …. all I see is a y/y increase. BTW this year we are back to double digit increases so get in soon! ALSO always use an agent!

When m/m numbers are cascading lower, y/y stats are irrelevant. — Garth

#146 Rational Optimist on 07.06.17 at 10:54 am

In KW, detached prices were down 9.5% from May to June after being flat April to May. Condo prices were down 5.7% May to June after an almost 10% increase April to May. Towns were down 5.4% from May to June after declining 4.3% from April to May.

These are averages, but the median price across all categories has actually fallen a bit more than the average price has.

It’s still too soon to tell. Locally, much was made of the fact that the average property changing hands in April was (just) more than a half a million, and that the averaged detached home was just about 600,000. This in a region where the median household income is somewhere just shy of 90,000.

We might not see those values here again for quite a long time.

#147 rainclouds on 07.06.17 at 11:12 am

the sleaze factory is hard at work creating alternative facts, based on ……..an internal poll!

https://www.thestar.com/business/real_estate/2017/07/06/forecast-for-toronto-area-home-sale-prices-this-year-in-the-13-18-range-treb-says.html

#148 Ronaldo on 07.06.17 at 11:14 am

#110 Trumpocalypse2017 on 07.06.17 at 6:41 am

Global warming tipping into high gear – an ice shelf the size of PEI is just weeks, perhaps days, away from breaking off.

https://www.theguardian.com/environment/climate-consensus-97-per-cent/2017/jun/12/the-larsen-c-ice-shelf-collapse-hammers-home-the-reality-of-climate-change

This soon to be free floating shelf will allow what remains behind it to melt off, raising sea levels.

Florida under water very soon, lots of climate chaos coming up. Millions of refugees, war and global crisis.

Prepare.
——————————————————-
Do you work for the ‘National Enquirer’?

#149 Smoking Man on 07.06.17 at 11:39 am

Danger Alert bill C-51

For all you moister dudes on the dating screen, woman will be able to have criminaly charged with sexual assault if say you dont like her anymore, and they have a spitfull little souls.

No defense allowed. Brought to you by the man hating lesbonic creatures society, and selfy boy wonder.

Makes a great argument for short term rentals.

http://nationalpost.com/opinion/barbara-kay-canadas-new-sexual-assault-law-is-a-catastrophic-attack-on-the-rights-of-the-accused/wcm/28260f73-4c37-4245-9750-559fe81e0d42

#150 Asterix1 on 07.06.17 at 11:41 am

OSFI calls for ban on bundled loans

http://www.bnn.ca/osfi-calls-for-ban-on-bundled-loans-1.797925

“Canada plans to ban some bundled residential mortgages to clamp down on risky lending, a regulator said on Thursday, six months after a Reuters investigation revealed that regulated mortgage providers were teaming up with unregulated rivals to circumvent rules limiting how much they can lend against a property”

Another nail in the coffin for this GTA bubble. Too many to count at this point! When municipal, provincial and federal level of government get implicated to pop a bubble, the party is definitely over.

Still cant believe TREB has the audacity to come up with a 13 to 18% rise in price this year. Not sure which broken magic ball they are using to come up with that.

#151 Smoking Man on 07.06.17 at 11:44 am

#146 Ronaldo on 07.06.17 at 11:14 am
#110 Trumpocalypse2017 on 07.06.17 at 6:41 am

Global warming tipping into high gear – an ice shelf the size of PEI is just weeks, perhaps days, away from breaking off.

https://www.theguardian.com/environment/climate-consensus-97-per-cent/2017/jun/12/the-larsen-c-ice-shelf-collapse-hammers-home-the-reality-of-climate-change

This soon to be free floating shelf will allow what remains behind it to melt off, raising sea levels.

Florida under water very soon, lots of climate chaos coming up. Millions of refugees, war and global crisis.

Prepare.
——————————————————-
Do you work for the ‘National Enquirer’?

#146 Ronaldo on 07.06.17 at 11:14 am #110 Trumpocalypse2017 on 07.06.17 at 6:41 am Global warming tipping into high gear – an ice shelf the size of PEI is just weeks, perhaps days, away from breaking off. https://www.theguardian.com/environment/climate-consensus-97-per-cent/2017/jun/12/the-larsen-c-ice-shelf-collapse-hammers-home-the-reality-of-climate-change This soon to be free floating shelf will allow what remains behind it to melt off, raising sea levels. Florida under water very soon, lots of climate chaos coming up. Millions of refugees, war and global crisis. Prepare. ——————————————————- Do you work for the ‘National Enquirer’?
++++++++++

People should stick to booze, see what pot does to someone’s brain, thats why T2 making it leagul.

#152 Cheekmonster on 07.06.17 at 11:44 am

Some TrEb propaganda

https://globenewswire.com/news-release/2017/07/06/1039702/0/en/TREB-Member-REALTORS-Release-Monthly-Market-Report-Forecast-Update-and-New-Ipsos-Consumer-Survey.html

#153 IHCTD9 on 07.06.17 at 12:01 pm

#130 Ole Doberman on 07.06.17 at 9:34 am Also spreading like a pandemic is rising taxes, if it’s in the US it will spread to Canada eventually.
__________________________________________

Already here, just look at NL and Labrador – their politicians make Illinois look mild. Ontario’s debt interest bill is essentially the same as the entire budget for education. Debt is piled high in government at all levels, and the same compensation issues that Illinois has with public pensions also exists here in SPADES. Except the hole we’re digging is even deeper. Industrial base is toast, resource extraction is dead as a door nail, now it looks like RE might be heaved on the pile.

No one anywhere cares either.

So – IMHO, everyone should look at their vulnerability to current and future taxation. Where can you cut, reduce, avoid, offset etc…

I buy used and save the tax over new retail. Last year I repaired damaged equipment myself and saved taxes on labour or replacement. I filled my RRSP’s, I saved every last receipt for my wife’s contract position, and exploited every deduction off my taxable income (we ended up with a 5 figure tax return). I commandeered my kids to help with a couple upgrades on the house (no wages = no tax :) ), and the construction materials came off Kijiji and the local Rez – total taxes paid on this significant work was $0.00. I took my 3rd vehicle off the road after Wynne went too far with sticker fees. I cancelled the insurance, didn’t renew the plates, and sold it for a 2000 profit (tax free profit). I bought a rare pc of equipment that if bought new would cost $3500.00 for a current Chinese rip off. I paid 50.00. It sat for 30 years and was rotted. I used my resources and abilities to rebuild it to like new – total cost was 50.00, total taxes paid: $0.00. This unit is part of a larger plan to reduce my usage of conventional energy to save even more in the near future.

#154 TheDood on 07.06.17 at 12:08 pm

#93 Happy Housing Crash Everyone! on 07.05.17 at 11:40 pm
Here is something crazy yet interesting Garth. 2% of GDP based on RE transaction fees? Just crazy

http://www.bnn.ca/video/chart-attack-this-is-how-crazy-canada-is-for-housing~1160885

#93 Happy Housing Crash Everyone! on 07.05.17 at 11:40 pm

Here is something crazy yet interesting Garth. 2% of GDP based on RE transaction fees? Just crazy http://www.bnn.ca/video/chart-attack-this-is-how-crazy-canada-is-for-housing~1160885
__________________________

That is unbelievable! 2% of Canada’s GDP are transactions costs related to sale of property? Wow….just Wow!

Doesn’t say a whole lot for the rest of the Canadian economy does it?

#155 Victor V on 07.06.17 at 12:14 pm

#138 Steve on 07.06.17 at 10:23 am

What some buyers fail to realise is that if you buy at 750k and it goes up by a third your property is now worth a million dollars…congratulations! If it were then to drop by a third it would be worth 667k…commiserations (when the penny drops)

===========

+ transaction costs.

#156 Victor V on 07.06.17 at 12:30 pm

John Pasalis, President at Realosophy Realty, reacts to OFSI proposals:

https://twitter.com/JohnPasalis/status/882960922930798592

#157 AB Boxster on 07.06.17 at 12:31 pm


By what logic should average families ever consider reaching for a $2 million home? It’s not a right. — Garth

———————————————-
C’mon Garth.
The ‘it’s not a right to own a home in Canada’ is becoming a little tiresome.

That middle class families (family income of between 60 -90K) cannot afford to purchase a home in their own country, this is not a good thing.

Most Canadians cannot afford to purchase in Hong Kong, or London or New York city. Even wonder why they don’t complain about this?
Because they want to work and live and grow families in Canada.
Silly nationalist fools.

The combination of stupidly low interest rates, unchecked foreign money from the world’s nouveau riche, fraudulent real estate cartels, and useless governments who watch it all happen, has monumentally screwed up the real estate market in this country.

A 2 million dollar home?
They can’t even afford a 500k home, which is pretty much an unlivable POS in hot markets.

And those that do buy into this ridiculous market will be house rich and cash poor for the rest of their lives.
No pensions, no savings, no discretionary income.

Any real crash will not happen in the next few years with higher rates. It will happen in the next 30 years when these people are too old to work, their house is worth less, and they have no savings and still have huge debt loads.

Canada – a nice place to retire, or to park your vast sums of money when you don’t like the shitty government in your own country.

Born and raised here in the last 30 years?
Pity.

#158 Victor V on 07.06.17 at 12:35 pm

A chart is worth a thousands words. This is getting ugly dogs.

https://twitter.com/JohnPasalis/status/882943236733636610

#159 InvestorsFriend on 07.06.17 at 12:36 pm

Best Line in A Long Time

#74 Ron on 07.05.17 at 10:17 pm said
The real problem is that no one congratulates you on buying 10,000 shares of ZPR. Only a house pays dividends in envy.

********************************************
“Only a house pays dividends in envy.” Excellent point and explains a lot in seven words.

Absolutely, there is such a thing as “psyhic income”. Driving up to your own physical house and having other people able to drive up to and see your house simply gives way more psychic income than the same equity in investments.

Imagine, $200k equity in an $800k house versus the $200k equity in investments. The house produces more pshyic income and envy hands down. Based on, what is it Maslow’s? hierarchy of needs this psychic income may be far more valued than some extra cash once we have sufficient cash and income to live a reasonable lifestyle.

For example, my (extended) family built and owns a fairly large Motel (Motor Inn) with a large restaurant attached. Started it in 1965 with 20 rooms. Now about 44 rooms plus some cottages and nearby houses. The physic income and I suppose envy that comes from owning that highly visible property and the associated ability to hire people including family should not be under estimated.

Another example, Garth’s General Store. Lot of psychic income there.

#160 The Limited Sage on 07.06.17 at 12:38 pm

It’s already been posted above, but today’s article from Tess Kalinowski at the Star is the biggest piece of RE crock I’ve read in a while.

She’s anything but a Real Estate reporter after writing that RE Propaganda BS. Just goes to show that journalistic integrity really is a thing of the past.

#161 InvestorsFriend on 07.06.17 at 12:40 pm

Psyhic Income and the dividends of envy

Of course buying a house to gain psychic income and envy when you can’t afford it and when it theatens your ability to cover basic living expenses is foolhardy indeed.

#162 n1tro on 07.06.17 at 1:02 pm

Buying anything to gain “psychic income and envy” is the definition of being a pretentious douchebag. Pretty sure Maslow’s hierarchy of needs isn’t referring to material things but rather an interpersonal set of milestones which we strive to reach.

#163 Victor V on 07.06.17 at 1:20 pm

Huge news from OSFI today:

– “Stress-testing” of uninsured mortgages

– Banning bundled mtgs above 80% LTV

http://www.osfi-bsif.gc.ca/Eng/osfi-bsif/med/Pages/B20_dft_nr.aspx

#164 oopswediditagain on 07.06.17 at 1:26 pm

#13 AGuyInVancouver on 07.05.17 at 7:13 pm “I understand your point Garth, but then how are people qualifying mortgages to buy at these inflated prices? Have lending standards gone completely out the window, I thought Home Capital was a one off.”

Maybe this helps to explain some of the policies that allow certain people into the market.

As the months pass by we actually learn how this house of cards is actually built. So much for the “conservative” Canadian lending system.

http://www.cbc.ca/news/business/osfi-bundled-mortgage-loan-ban-1.4192727

“Bundled” or co-lending agreements with an unregulated entity can enable lenders to offer combined mortgages worth up to 90 per cent of a property’s value.

Under federal rules, regulated lenders in Canada are not allowed to lend more than 65 percent of the value of a home to borrowers with bad or nonexistent credit records.

They also cannot lend more than 80 percent of a property’s value – even to borrowers with solid credit – without obtaining government-backed insurance. Under rules rolled out last October, that insurance requires the banks to run income stress tests on borrowers.

#165 IHCTD9 on 07.06.17 at 1:27 pm

#147 Smoking Man on 07.06.17 at 11:39 am Danger Alert bill C-51
_________________________

Wow.

Woman texts Man and says “Come over and have sex with me!” Next day she says it was rape. Now Judge says Man can’t use said text as evidence to the contrary.

Maybe Trudeau could do young Canadian Males just one, single tiny little favour. Just one:

Make prostitution and all forms of the sex trade legal. Make it like going out to buy a slice of Pizza, and make it safe and disease free. And feminism free too. If this Bill flies as-is, it’s not really worth the risk of entertaining a random Canadian female anymore.

I’m almost at the point where I’d rather see my male offspring banging a government regulated whore as opposed to some chick they met at a bar. Much safer on every single front you can name.

#166 Victor V on 07.06.17 at 1:32 pm

http://www.bnn.ca/toronto-s-housing-market-turned-on-a-dime-real-estate-analyst-says-1.798086?hootPostID=4781f7cca5aa6413f20161dae4847c13

Following the Toronto Real Estate Board’s latest data dump Thursday, one real estate analyst says we are probably witnessing the housing bubble burst.

“This is just the market unwinding and correcting itself,” said John Pasalis, president at Realosophy Realty, in an interview with BNN.

#167 Stan Broock on 07.06.17 at 1:38 pm

This sucker is going down.

https://ca.finance.yahoo.com/news/canadian-dollar-pull-back-over-120917500.html

#168 TSX...will on 07.06.17 at 1:43 pm

not be harmed by real estate……LOL.

keep shorting. And you’re welcome

#169 Fake News on 07.06.17 at 1:47 pm

Sorry Garth. You have been mostly right about “the rest of Canada”. But on Greater Vancouver – you could not be more wrong. Prices are as high as they have ever been and will stay that way as long as the Govt does nothing. The 15% Chinese dudes tax had more holes than Swiss Cheese.

#170 James on 07.06.17 at 1:52 pm

#84 Riders of the storm on 07.05.17 at 10:55 pm

#73 Smoking Man on 07.05.17 at 10:14 pm
The Blame Game
Tomorrow watch how MSM puts the vaseline on the disastrous real estate numbers from June.
I blame no one for my demise on Bay street but myself, I consciously destroyed my old safe life, an amazing code Smith on a trading floor for a leading Canadian bank who everyone loved, and still love. But I pissed off a mind fkd globalist who has the steering wheel and everyone is scared shitless of the diversity inclusion pusher, has put me on the shit list never to work again.
Trapped in Purgatory, my old life if I played by the rules, 250k a year doing a hobby, vs chasing a writers dream. I chose to dream, it doesn’t pay well.
It’s very sad when my weirdness is 10 times worse then a person that doesn’t know if it’s a girl or a boy. And the state makes it normal to emasculate males.
Now that’s progressive.
…………………………………………
Why work? I thought you sold your house and moved to Ecuador to spend your billions of untaxed forex winnings? what gives dude?
……………………………………………………….
He has never been to Ecuador, and the last time I heard about this guy he had an awesome job in Boston, then a trip to Seneca Casino, then a trip to Cuba, trip to Seneca Casino, then talked about loosing his shirt without a job, trip to Seneca Casino, selling the boat, trip to Seneca Casino, selling the home, trip to Seneca Casino, selling the cottage in Muskoka, trip to Seneca Casino, Going to a Antigua Island to sell ice cream, trip to Seneca Casino, talking about his hidden money from the Canada Revenue Agency and his scams to cheat them from taxing his butt, trip to Seneca Casino, offshore Island account with millions, trip to Seneca Casino.
I’m not quite sure what is going on with this guy? Does anyone see a pattern forming ???????

#171 jess on 07.06.17 at 1:52 pm

People who cannot afford to buy, should not.

========
clayton test

bundled

http://blogs.reuters.com/felix-salmon/2010/10/13/the-enormous-mortgage-bond-scandal/

…”were the bond investors able to do their own due diligence on the loan pool? The answer is no, they weren’t — the prospectus did not include the kind of loan-level information which would enable them to do that.”

#172 jess on 07.06.17 at 1:53 pm

a little late ?

http://www.cbc.ca/news/business/osfi-bundled-mortgage-loan-ban-1.4192727

======

….” as the boom matured, mortgage underwriting standards deteriorated. By 2007 an estimated $3.2 trillion in loans were made to homebuyers and owners with bad credit and undocumented incomes, bundled into MBSs and CDOs, and given top ratings[204] to appeal to global investors.”

#173 Happy Housing Crash Everyone! on 07.06.17 at 2:00 pm

Wow prices and sales in the GTA are CRASHING so hard its not even funny. Realtors and speculators are screaming in horrible financial pain. Happy Housing Crash Everyone! :-)

#174 Happy Housing Crash Everyone! on 07.06.17 at 2:02 pm

Without mortgage fraud prices will crash back to the mean average. This whole market is up on fraudulent mortgages.

#175 Another Toothless Measure on 07.06.17 at 2:02 pm

#161 Victor

Huge news from OSFI today:
– “Stress-testing” of uninsured mortgages
– Banning bundled mtgs above 80% LTV
http://www.osfi-bsif.gc.ca/Eng/osfi-bsif/med/Pages/B20_dft_nr.aspx
Huge news from OSFI today: – “Stress-testing” of uninsured mortgages – Banning bundled mtgs above 80% LTV http://www.osfi-bsif.gc.ca/Eng/osfi-bsif/med/Pages/B20_dft_nr.aspx

———
OSFI is inviting feedback through written submissions from interested stakeholders and the wider public before finalizing Guideline B-20. Comments should be submitted to OSFI by email at [email protected] by August 17, 2017. Following a review of the submissions, OSFI will finalize the guideline and set an effective date for later in 2017.

——-

Hope hum, its a consultative matter with some changes maybe in 2017 – if it gets approved. Trust the banks will push back hard on this so don’t get your hopes up..

#176 nick on 07.06.17 at 2:03 pm

#157 InvestorsFriend

Its true. People like what sounds “sexy”.

Prime example, rental properties.

Why do you think people are so eager to purchase and rent at negative cash flows instead of pumping that money into a REIT (a company that is a better landlord than you, has economies of scale thus lower costs than you, own more diversified properties than you, and have more negotiating power with lenders than you)?

REIT provides better return, better cash flows, tax advantaged versus rental income, its all passive, and low costs to sell.

So, when one is clearly better, why do people want to be landlords at these prices? Because it SOUNDS sexy to say “YUP, i have a (or a few) rental properties…”.

#177 Stan Broock on 07.06.17 at 2:07 pm

#163 IHCTD9 on 07.06.17 at 1:27 pm
#147 Smoking Man on 07.06.17 at 11:39 am Danger Alert bill C-51

Typical to the last, terminal phase of degradation of a society – assume guilt of the accused/general public with no means to defend.

It is by intend.

No society has ever survived, that broke the basic law of presumed innocence and the onus to prove the guilt on the accuser/prosecutor, inherited from the ancient Roman Law.

It is the basic, fundamental part of law and there can be no law without it.

One is not obligated to follow the ‘laws’ of an unlawful society.

#178 SimplyPut7 on 07.06.17 at 2:08 pm

#161 Victor V on 07.06.17 at 1:20 pm#161 Victor V on 07.06.17 at 1:20 pm

Huge news from OSFI today:

– “Stress-testing” of uninsured mortgages

– Banning bundled mtgs above 80% LTV

http://www.osfi-bsif.gc.ca/Eng/osfi-bsif/med/Pages/B20_dft_nr.aspx

———————————————-

And OSFI wants to set an effective date for later in 2017.

Hell hath no fury like a regulator scorned.

#179 Trumped Again on 07.06.17 at 2:08 pm

‘But but but its only 5% of the market and has no meaningful impact’ …

If anyone ever needs some hard ‘data’ on the impact of foreign capital, just keep this nugget bookmarked and bring it out whenever someone like Mark dismisses the existence, and impact, of foreign capital.

Keep bringing it up ad naseum since its irrefutable data.

==========

#96 Chopstix

” After much speculation about the impact Chinese money was having on the real estate market, recently collected data by the province’s Ministry of Finance showed between June 10 and Aug. 1 about 25 per cent of all properties in Richmond were being purchased by foreigners (initial data showed Chinese nationals accounted for 90 per cent of “foreign nationals”).

After the tax was implemented, the rate of such purchases plummeted to 1.9 per cent in Richmond in August. But that figure has since sprouted to 4.4 per cent in September.

#180 nick on 07.06.17 at 2:11 pm

If we have one more ugly month, the TREB cant hang their hats on YOY increases any more! I cant wait.

#181 Guy in Calgary on 07.06.17 at 2:12 pm

A lot of people posting that everyone is maxed out on HELOC’s and LOC’s but not providing any data. Perhaps these are the one’s that are actually indebted and they assume everyone is as they are.

#182 Boots on the Ground in Ptown on 07.06.17 at 2:24 pm

Off topic but interesting. Yanking the carpet out from under student loans?

https://www.bloomberg.com/news/articles/2017-07-06/devos-move-to-delay-student-loan-borrower-protections-under-fire

https://fred.stlouisfed.org/graph/?g=eiSn

#183 Stan Broock on 07.06.17 at 2:34 pm

#161 Victor V on 07.06.17 at 1:20 pm
Huge news from OSFI today:

– “Stress-testing” of uninsured mortgages

– Banning bundled mtgs above 80% LTV

http://www.osfi-bsif.gc.ca/Eng/osfi-bsif/med/Pages/B20_dft_nr.aspx

#161 Victor V on 07.06.17 at 1:20 pm Huge news from OSFI today: – “Stress-testing” of uninsured mortgages – Banning bundled mtgs above 80% LTV http://www.osfi-bsif.gc.ca/Eng/osfi-bsif/med/Pages/B20_dft_nr.aspx
———————————-

Providing government insurance on mortgages is in violation with WTO agreements as it offload risks from the lender and represents direct subsidy to the financial/lending industry which is against the WTO rules.

Illegal.

#184 Stan Broock on 07.06.17 at 2:35 pm

Providing government insurance on mortgages AT LOWER THAN MARKET COSTS is in violation with WTO agreements as it offload risks from the lender and represents direct subsidy to the financial/lending industry which is against the WTO rules.

Illegal.

#185 Asterix1 on 07.06.17 at 2:36 pm

#171 Happy Housing Crash Everyone! on 07.06.17 at 2:00 pm
Wow prices and sales in the GTA are CRASHING so hard its not even funny. Realtors and speculators are screaming in horrible financial pain. Happy Housing Crash Everyone! :-)
—————————————————————-

Yes, we get it! I’m with you on this one. But could you please try to add something to the discussion. Ideas, charts, articles, debate or anything.

#186 IHCTD9 on 07.06.17 at 2:40 pm

#155 AB Boxster on 07.06.17 at 12:31 pm

By what logic should average families ever consider reaching for a $2 million home? It’s not a right. — Garth ———————————————-

C’mon Garth. The ‘it’s not a right to own a home in Canada’ is becoming a little tiresome.
___

I agree with most of what you’ve said – but only if we’re talking about the last two stupid markets that remain in Canada – the GTA and GVA.

Outside of these two zones, houses are still pretty tied to incomes, and other places it’s downright affordable.

I think a lot of folks want cheap prices in the most desirable areas, which obviously can’t happen until most think said areas are undesirable.

I don’t think actual real houses in a decent part of the GTA will ever go less than 750-800K – about 2.5X what a similar place out my way goes for right now. That 2.5 price difference existed 20 years ago, so I think it represents the approximate real house value in Toronto.

It will take a huge rate hike to drive a 1.3-1.5 Mill house down to .75 mil. A 750K house at 6.4% is 5K per month however. That’s still unaffordable even after the 6.4% rate cut the 1.5 Mil price in half.

I think most average folks should be sizing up the long term realization that if you’re not pulling in 250K family income, you will never own a real house in the GTA/GVA.

Things will never get that cheap – the local GTA labour market can’t command the wages required – not even close. They’ll probably go DOWN not up for most. That is the writing on the wall IMHO.

They’ll have to decide what the GTA means to them. The immigrants living in the big enclaves will pay ANY amount and do nearly anything to avoid leaving their “home away from home” and having to step outside the familiar and into the Hinterland. They’ll rent a walk in closet for 1K/month and like it. They will be really tough competition for the natives for any GTA RE whatsoever eventually.

So, the young Western cultured, Canadian born will probably be the first out. Or they’ll have to decide if burning their money on a condo, or renting forever is worth what ever it is that Toronto has to offer…

#187 Mark on 07.06.17 at 2:43 pm

“In Vancouver UBC students of non-Canadian decent (sic) “,/b>

Let me guess, you went up to these UBC students and asked them for their passports? Their place of birth? Just how is it that you’re determine where they were born?

Certainly you must be aware that Canadians of Chinese ethnicity have been in Canada probably longer than Canadians of most other ethnicities. I know my family didn’t arrive here from the United States (yes) until the early 1900s.

Do you honestly think that people who bought during this run up in prices are geniuses?

No, and the fact that real estate has provided such high outperformance relative to the rest of the economy is basically a slap in the face to smart people and to those who create and own businesses outside of the RE sector. Why bother becoming, for instance, an engineer, when some dude (or landlord family) with 20-30 houses is pulling a quarter million or more a year in ‘appreciation’ and barely has to lift a finger to accomplish such?

#188 Mark on 07.06.17 at 2:45 pm

“If anyone ever needs some hard ‘data’ on the impact of foreign capital, just keep this nugget bookmarked and bring it out whenever someone like Mark dismisses the existence, and impact, of foreign capital.

I presented numbers from the IMF and StatsCan a week or two ago which showed significant *outflows* from Canada. ie: Canadian assets, on the net, being sold and sent overseas.

This directly contradicts the idea that foreigners are bringing any meaningful amounts, on the balance, to Canada.

Additionally, when those ‘studies’ of foreign buyers are done, the largest identifiable group of buyers are US citizens.

#189 Monetary Hawks and Doves on 07.06.17 at 2:47 pm

#5 I’M NOT POLOZ on 07.05.17 at 6:59 pm
#12 Bdog on 07.05.17 at 7:12 pm
#15 Pete on 07.05.17 at 7:22 pm
#91 paulo on 07.05.17 at 11:27 pm
#103 Mark on 07.06.17 at 1:08 am
#114 maxx on 07.06.17 at 7:25 am
#124 Foggy on 07.06.17 at 9:13 am
#125 Asterix1 on 07.06.17 at 9:13 am
#155 AB Boxster on 07.06.17 at 12:31 pm

So much of the discussion each day deals with monetary hawks and doves arguing their respective positions.

https://en.m.wikipedia.org/wiki/Monetary_hawk_and_dove

https://www.marketplace.org/2013/11/13/economy/economic-shorthand-hawks-and-doves

https://www.theatlantic.com/business/archive/2013/09/fed-favorite-janet-yellen-is-no-dove-and-thats-a-good-thing/279775/

http://economictimes.indiatimes.com/news/economy/policy/rbi-a-vigilant-owl-neither-a-dove-nor-a-hawk-raghuram-rajan-on-monetary-policy/articleshow/29515014.cms?intenttarget=no

#190 CJBob on 07.06.17 at 2:50 pm

#175 Stan Broock on 07.06.17 at 2:07 pm
Danger Alert bill C-51

Typical to the last, terminal phase of degradation of a society – assume guilt of the accused/general public with no means to defend.
____________
Does this apply to those who were actually held and tortured for years in Guantanamo Bay with no rights, or only to your theoretical example based on a bill that hasn’t become a law and hasn’t been upheld by a court?

#191 Lahdeedah on 07.06.17 at 2:52 pm

Sooooo….. what are they gonna do about the interest rates? If the housing market is beginning a downward spiral already, then why would they add injury to insult by slashing rates?

#192 Lahdeedah on 07.06.17 at 2:55 pm

whoops, I meant to type why would they add injury to insult by “raising rates”

#193 jess on 07.06.17 at 3:04 pm

Employee Benefit Trusts

The Supreme Court has ruled in favour of HM Revenue and Customs (HMRC) in its fight with Rangers over the club’s use of Employee Benefit Trusts (EBTs).

More than £47m was paid to players, managers and directors between 2001 and 2010 in tax-free loans.

However, HMRC argued the payments were earnings and should be taxable…

Rangers’ use of EBTs and the subsequent appeals by HMRC became known as the “big tax case”.

…”The result is a major victory for HMRC in its attempts to recoup tax from thousands of other companies which ran EBTs and similar schemes, which were the subject of a crackdown in legislation enacted in December 2010.

http://www.bbc.com/news/uk-scotland-40501361

HMRC could now issue “follower notices”, which would demand payment from companies who ran similar schemes.

=========
Employee benefit trust (EBT) … Very often, EBTs are set up to acquire and hold shares in the relevant company, to provide benefits to employees and former employees in the form of shares or options over, or interests in, shares.

#194 Smoking Man on 07.06.17 at 3:10 pm

#168 James on 07.06.17 at 1:52 pm#168 James on 07.06.17 at 1:52 pm

Interesting? Whenever I bring up the topic of man hating lesbonic creatures society. Thats what triggers you the most I’ve noticed. Come out of the closest, it in fashion I hear.

Let me be clear in case you missed it. I brag about being a serial lier on here. Everybody here knows it. Its call fiction, its what I do now because I can’t get a job. I like to entertain people, while challanging thier belief systems. I keep the stories close to home mix em up with my personal life so I dont end up sounding like our resident robot Mark. Sometimes late in the eavining after a few I may go overboard sometimes. Its art as far as im concernd

You are one of a hand full of people on here that dont get it. And if you continue to be vial toward me, I dont need to say squat, the dogs on here will eat you alive. Is that your goal?

#195 Anonymous on 07.06.17 at 3:33 pm

Chinese dude money is pouring into Australia real estate to the tune of tens of billions per year.

https://www.businessinsider.com.au/chinese-investors-purchase-24-billion-worth-of-australian-real-estate-each-year-2017-7

Canada also made the top 5 list…

#196 Ole Doberman on 07.06.17 at 3:33 pm

It’s all over in Toronto, O-V-E-R….over!

http://www.bnn.ca/toronto-s-housing-market-turned-on-a-dime-real-estate-analyst-says-1.798086

market turns on a dime!

#197 SimplyPut7 on 07.06.17 at 3:40 pm

#189 Lahdeedah on 07.06.17 at 2:52 pm

Vancouver and Toronto will have to learn they are not the centre of the universe in Canada and be more responsible for the debt they are obligated to pay. Just like no one came to rescue cities dependent on oil and gold during their fall.

#198 re., nick on 07.06.17 at 3:41 pm

reit’s? nah. I’m hands on. Not trusting some reit management that i know nothing about.

don’t use the cookie cutter approach; being a landlord isnt for you, that doesnt mean another can’t be really successful being one

#199 Class Comedian on 07.06.17 at 3:41 pm

“If anyone ever needs some hard ‘data’ on the impact of foreign capital, just keep this nugget bookmarked and bring it out whenever someone like Mark dismisses the existence, and impact, of foreign capital.

I presented numbers from the IMF and StatsCan a week or two ago which showed significant *outflows* from Canada. ie: Canadian assets, on the net, being sold and sent overseas.

This directly contradicts the idea that foreigners are bringing any meaningful amounts, on the balance, to Canada.

Additionally, when those ‘studies’ of foreign buyers are done, the largest identifiable group of buyers are US citizens.

———-
And, it was cited here that 20% of sales were to foreign buyers in cities like Burnaby and Richmond – which to you, apparently, is not significant…

Lol, so the BC provincial data shows that the largest identifiable group of buyers are US citizens?

My goodness, you are extremely entertaining!

First, accordingly to you, ‘prices have not gone up since 2013 because of the sales mix’ and now the foreign buyers in BC are primarily Americans!

I have come across denial about the impact of foreign money, but you sir, are the king of it with your statements…

#200 Stan Broock on 07.06.17 at 3:52 pm

#197 Class Comedian on 07.06.17 at 3:41 pm#197 Class Comedian on 07.06.17 at 3:41 pm

You mean the shacks (worth 1-1.5 mil a piece) in unlivable Markham, Scarborough, Brampton and Mississauga are snapped by foreign millionaires ?

Sure. Pass what are you smoking.

#201 Stan Broock on 07.06.17 at 3:54 pm

#188 CJBob on 07.06.17 at 2:50 pm
#175 Stan Broock on 07.06.17 at 2:07 pm
Danger Alert bill C-51

Typical to the last, terminal phase of degradation of a society – assume guilt of the accused/general public with no means to defend.
____________
Does this apply to those who were actually held and tortured for years in Guantanamo Bay with no rights, or only to your theoretical example based on a bill that hasn’t become a law and hasn’t been upheld by a court?

#188 CJBob on 07.06.17 at 2:50 pm #175 Stan Broock on 07.06.17 at 2:07 pm Danger Alert bill C-51 Typical to the last, terminal phase of degradation of a society – assume guilt of the accused/general public with no means to defend. ____________ Does this apply to those who were actually held and tortured for years in Guantanamo Bay with no rights, or only to your theoretical example based on a bill that hasn’t become a law and hasn’t been upheld by a court?
———————————-
This was acknowledged as unacceptable/illegal practice.

There was never a law to justify it.

#202 Dee on 07.06.17 at 3:57 pm

other crappy lenders are trying to fill the void left by home crapital. Same games. Rates are higher though and the market is obviously softer

#203 Stan Broock on 07.06.17 at 4:01 pm

Enough of this ‘owning a house is not a right’ nonsense.

Access to affordable housing should be a policy of government.

A reasonable expectation is that in the least populated developed country in the world with unlimited natural resources housing should be affordable and accessible, e.g. a QUALITY SFH worth 3-3.5 yearly incomes.

Everything else in unacceptable.

Instead we have a bunch of corrupted individuals at the top sponsored by the blood sucking parasitic financial sector to the detriment of the public.

Do you have the right to affordable food or an affordable car? — Garth

#204 45north on 07.06.17 at 4:02 pm

Smoking Man: Danger Alert bill C-51

from your link:

C-51 is so misguided that it is tantamount to a repeal of the presumption of innocence

#205 Stan Broock on 07.06.17 at 4:14 pm

This degree of stupidity is mind-blowing.

Exploitation by a system to a degree where people can not reproduce as due to their mortgages they can not afford kids …. Absolutely amazing.

#206 Chinese Dude on 07.06.17 at 4:14 pm

I wonder that 5% foreign buyer really have that much power to drive the market. It’s not a coincident when Vancouver applied the 15% foreign buyer taxes, sale plunged. And suddenly Toronto house price shot up paradoxically. And when they put 15% in Toronto, sales plunged.. and all of sudden, Montreal become the next hot market. You can see the pattern here…

#207 choptstix on 07.06.17 at 4:23 pm

also why many of us doubt your stats, Garth: Fintrac’s results of shady real estate dealings in Canada:
van sun, nov/2016 (below):
”Money-laundering watchdog cites ‘significant’ deficiencies at 100-plus B.C. real estate firms”

so who’s to say 5% are the real stats with all this nefarious stuff also going on?

http://vancouversun.com/g00/news/local-news/money-laundering-watchdog-cites-significant-deficiencies-at-100-plus-b-c-real-estate-firms?i10c.referrer=https%3A%2F%2Fwww.google.ca%2F

You clearly have no idea what FINTRAC is, what it does, or what a deficiency means. Stick to whatever your day job involves. — Garth

#208 Smoking Man on 07.06.17 at 4:25 pm

#202 45north on 07.06.17 at 4:02 pm
Smoking Man: Danger Alert bill C-51

from your link:

C-51 is so misguided that it is tantamount to a repeal of the presumption of innocence

#202 45north on 07.06.17 at 4:02 pm Smoking Man: Danger Alert bill C-51 from your link: C-51 is so misguided that it is tantamount to a repeal of the presumption of innocence
….

No shit. Welcome to Communism. You need to remember people with mental disorders are in charge for now.

Won’t last.

#209 farsyd on 07.06.17 at 4:26 pm

I’ll believe a housing correction when I see one. Appreciate how everyone is getting worked up but so far its not even a speed bump. Prices only increased 6% year over year. Lol. Half the people reading this blog are waiting so that they can buy into the market. Jobs are still plentiful. 25 bps increase is not heroic. That is not a recipe for correction. Ask the folks who have been waiting for Japanese rates to rise how that has worked out.

#210 Stan Broock on 07.06.17 at 4:41 pm

Do you have the right to affordable food or an affordable car? — Garth

Don’t we we have the right to breathe and drink water?

Can someone actually not be in disadvantage by not having a car in GTA. Can you actually live there and not have a car?

As for housing I stated it clearly – it is a reasonable expectation.

As is quality food and low/reasonable level of crime.
Is that a right?

Once one gets cancer or diabetes due to the GMO crap and glucose fructose syrup we are fed he/she/zeh, (32 genders go here) will realize it is.

And just move on/out.

It is expected that soon close to half of the kids in Canada would have some sort of ADHD disorder, people are already throwing parties if they kids appear somehow normal.

Just go to Germany/France/Switzerland and see the difference. Big difference.

#211 Chinese Dude on 07.06.17 at 4:44 pm

That 5% foreign buyers must be concentrated in Markham.

https://www.yorkregion.com/news-story/7252965-chinese-markham-real-estate-flyers-promote-overseas-buyers/

“Jennifer Jones, another agent who has been locally selling for 12 years, said she believes foreign buyers make up as much as 90 per cent of the Markham market. A local developer has also suggested that as much as 90 per cent of the money for home purchases is coming from Asia.”

#212 Roberto Umana on 07.06.17 at 4:49 pm

Let’s not blow things out of proportion. Some areas will correct aggressively. The areas with low turnover will be more than okay. The sky is not falling.

#213 oncebittwiceshy on 07.06.17 at 4:53 pm

Guy in Calgary on 07.06.17 at 2:12 pm
A lot of people posting that everyone is maxed out on HELOC’s and LOC’s but not providing any data. Perhaps these are the one’s that are actually indebted and they assume everyone is as they are.

Here you go buds. You’re welcome.

http://www.msn.com/en-ca/money/topstories/bank-governor-may-be-about-to-break-our-credit-addiction-wells/ar-BBDLGYZ

“Among the more disturbing statistics was this one: 40 per cent of HELOC borrowers do not make regular payments toward their principal. The number of households that have a HELOC and a mortgage secured against their home has risen by nearly 40 per cent in six years.”

#214 Stan Broock on 07.06.17 at 4:59 pm

#206 Smoking Man on 07.06.17 at 4:25 pm

…. No shit. Welcome to Communism. You need to remember people with mental disorders are in charge for now.

—————————

Your understanding of communism is very rudimentary
1. It/The communism was never implemented but it promotes government ownership of productive assets.
Totally different from past/current/future western society.

2. The closest to communism was developed socialism with 100 % employment, people where actually required to work, except the ill and retirees, guaranteed housing (as a right), free health care and education.
Utopic system that collapsed.

What you see in the western societies these days has nothing to do with communism or socialism.

It is just control of the herd by the private owners through their appointed governors.

The private owners wealth is never becoming public. Period.

#215 GTA IS CRASHING!!!!!! on 07.06.17 at 5:19 pm

GTA CRASHING….GTA CRASHING…..GTA CRASHING….GTA CRASHING…..GTA CRASHING….GTA CRASHING…..GTA CRASHING….GTA CRASHING…..GTA CRASHING….GTA CRASHING…..GTA CRASHING….GTA CRASHING…..GTA CRASHING….GTA CRASHING

Anyone who bought in January-May will go BUST he house of cards is falling HARD!!!!! BTW I understand they (elite) are crashing this market. They pumped and now going to dump the market to make EVERYONE who bought POOR!!!!!!!!

#216 GTA IS CRASHING!!!!!! on 07.06.17 at 5:22 pm

farsyd on 07.06.17 at 4:26 pm I’ll believe a housing correction when I see one. Appreciate how everyone is getting worked up but so far its not even a speed bump. Prices only increased 6% year over year. Lol. Half the people reading this blog are waiting so that they can buy into the market. Jobs are still plentiful. 25 bps increase is not heroic. That is not a recipe for correction. Ask the folks who have been waiting for Japanese rates to rise how that has worked out.
————————————————————
Prices are down well over $140K from February alone. Everyone who bought lost BIG $$$$$$$$$$$$$$$$$$$ and the market is still CRASHING HARD!!!!!!!!!!!!!!!! Japan rates stayed down and prices STILL CRASHED 50% while Canada rates are going UP and UP and UP!!!!! BAAHHHAHAHA realtors scum BAHAHAHAHAHAHA

#217 Smoking Man on 07.06.17 at 5:26 pm

#212 Stan Broock on 07.06.17 at 4:59 pm#212 Stan Broock on 07.06.17 at 4:59 pm

On 1 let’s see most profitable business casinos and LCBO

On 2 yes that worked out well for Cuba, Venezuela, USSR
No incentive nothing good comes out of it.

I sence you resent hard working owners. Why are you not one.

Cause you dont know how, or are to chicken shit to take a risk.

Communism never works 100% of the time its tried.

#218 Smoking Man on 07.06.17 at 5:30 pm

#214 GTA IS CRASHING!!!!!! on 07.06.17 at 5:22 pm#214 GTA IS CRASHING!!!!!! on 07.06.17 at 5:22 pm
……
You crack me up LaughingCon

Big rebound in Sept. Listings not selling, come of market. Saw two this week here. Once all the people that bought before they sold are done with. Up Up Up again. Real estate is religion in Toronto.

#219 Braj on 07.06.17 at 5:34 pm

Firstly, I have no idea what the actual influence of foreign money is on residential real estate in Canada but I can tell you that looking at the number of registered buyers who are non-residents does not tell the full story. Having worked in the banking industry for many years, I know that many properties are purchased with money that originates from overseas. Purchases are made by family and friends who are resident in Canada. The Canadian banks have been very complacent in allowing the transfer of funds and often helped facilitate the transactions (by setting up multiple accounts, etc.). How do we measure the impact of this kind of foreign investment? I have no idea but I think Garth should acknowledge the same.

Agreed. Know a few Realtors, and they repeatedly state something similar. Numbered companies, foreign buyers lending money etc.

Consider that Cityplace (the downtown condos) are all Asian developers. This is multi-billion $ investment

#220 Shawn on 07.06.17 at 5:50 pm

Lots of juicy news releases re the GTA housing market today. Can’t wait for Garth’s take! :)

Markham, Vaghan, Richmond Hill down >20% from the top.

Toronto, Oakville, Burlington, Mississauga, Brampton down >10%.

Since when did Canadian home prices fluctuate like tech stocks?

#221 crowdedelevatorfartz on 07.06.17 at 5:52 pm

@#163 IHCTD9

” I’m almost at the point where I’d rather see my male offspring ……”

**********
Well its not very often I’m at a loss for words……

#222 Freedom First on 07.06.17 at 5:56 pm

#147 Smoking Man

You used to wonder about me. Glad to see that your blinders have been removed regarding mens reality.

Fan #33

Freedom First
Master of Freedomonics

#223 SimplyPut7 on 07.06.17 at 5:58 pm

#209 Chinese Dude on 07.06.17 at 4:44 pm

That’s a load of crap.

If what the article was saying was true, the foreigner tax would not scare investors, because as long as prices continued to increase (as shown in TREB’s report on page 25 – http://www.trebhome.com/market_news/market_watch/2017/mw1706.pdf ), the investor would recoup the cost of the tax by the second year of the investment.

However, Zolo’s data shows prices and sales have been decreasing, as well as days on the market is increasing.

https://www.zolo.ca/markham-real-estate/trends

Prices have not been this cheap in a couple of years, especially when you take into account the size and quality of the home you get now. Where are the foreign buyers to save York region now?

What Cairns and Jones may not realize is 1/3 of Markham citizens are of Chinese descent, tax-paying Canadian citizens. Not everyone who immigrates to Canada will lose their accent. And just because someone prints their marketing material in another language, or speak to their clients in another language, it does not mean that they don’t speak or write fluently in English or French.

#224 neo on 07.06.17 at 6:01 pm

It looks like RBC is already getting the party started by hiking fixed rates on 2, 4, 5 year mortgages by 20 basis points. They seem to always get out ahead of things.

#225 TRT on 07.06.17 at 6:07 pm

DELETED

#226 Fake News on 07.06.17 at 6:14 pm

#36 john on 07.05.17 at 8:42 pm
The host of this blog will not accept “alternate facts”. If it doesn’t suit him, will dismiss it as fake news, regardless of the facts provided by some very intelligent bloggers. But I guess that is what makes the site interesting.

What fake facts did you have in mind? — Garth

#36 john on 07.05.17 at 8:42 pm The host of this blog will not accept “alternate facts”. If it doesn’t suit him, will dismiss it as fake news, regardless of the facts provided by some very intelligent bloggers. But I guess that is what makes the site interesting. What fake facts did you have in mind? — Garth

________________________________

Been reading this blog a long time. And yes you were correct in the past. But I have noticed Garth has been going to some considerable effort to allow quite a few “alternative non fake facts” for a while now.

#227 avg on 07.06.17 at 6:18 pm

#127
By what logic should average families ever consider reaching for a $2 million home? It’s not a right. — Garth

SFHs in Urban centres are not for average families.
Those are for the one-percenters.
Average families live 40km out, and commute.

Just as average New Yorkers don’t live in Manhattan, average Londoners not in South Kensington, the average Amsterdammer not in a Canal house.

#228 AGuyInVancouver on 07.06.17 at 6:32 pm

#221 SimplyPut7
And what percentage of that 1/3 of Markham buyers that are of Chinese descent got their downpayment from family members in China? We’ll never know because governments don’t adequately track such things.

Give it up. You’re a dino. — Garth

#229 GFD on 07.06.17 at 6:41 pm

Holy shit, dragon with matches on the loose. Where is my 44?

#230 Penny Henny on 07.06.17 at 6:43 pm

#216 Smoking Man on 07.06.17 at 5:30 pm
. Once all the people that bought before they sold are done with. Up Up Up again. Real estate is religion in Toronto.

/////
Smokie most of the time I agree with you but I’m not seeing the rebound as early as Sept. Maybe next Sept.

#231 Tony on 07.06.17 at 6:44 pm

Re: #213 GTA IS CRASHING!!!!!! on 07.06.17 at 5:19 pm

The foreign tax takes the top tier out of the market and rising mortgage rates takes the bottom tier out of the market. The entire housing pyramid is based on the base of the pyramid which is the Millennials (first time buyers). Higher mortgage rates can and do crumble pyramids.

#232 soost on 07.06.17 at 10:57 pm

TREB: You see a m/m decrease …. all I see is a y/y increase. BTW this year we are back to double digit increases so get in soon! ALSO always use an agent!

When m/m numbers are cascading lower, y/y stats are irrelevant. — Garth
———-
Garth I was being 100% sarcastic. Speaking from the perspective of dubious TREB

#233 Fish on 07.07.17 at 1:01 pm

When I see ads like this *****READY TO MOVE IN —-OPEN TO OFFERS.

Quality Year Round, 3 Bedroom Home With Super View Of The Lake.

**********************
I am waiting

#234 Out of da house on 07.07.17 at 5:32 pm

“People congregate and pay a premium to do so. Get over it.”, said Garth.

Desegregation busing of their children, instead of a tax, was used for the USA congregated foreigners.

#235 AGuyInVancouver on 07.07.17 at 7:20 pm

#30 Balmuto on 07.05.17 at 8:14 pm
Vancouver home prices just hit a new record. Foreign buyers tax seems to have had only a muted and temporary effect there. Condos leading the way now:
__________________________________________
What do you expect? Basically all of teh single family housing stock in Vancouver, Richmond, Burnaby and West Vancouver is out of reach unless you’re a 1 Percenter or backed by Chinese money (sorry Garth). Condos are the last scrap of affordability and once that goes, who knows…?