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Five summers ago, when dearly departed eflin deity F was trying to tame the housing market and Alberta real estate was on fire, poor Ken wrote to this pathetic blog.

“We had to move in 2010 due to a job loss and sell the house we left behind in our home city.  We made enough on the sale for a small down payment whenever we decided to buy again. I found a job back home in Lethbridge last month and decided to move back. My wife told me that she never wants to move again and if I want to stay married we better buy a house (isn’t love grand?) I am in my mid 40’s and just got my mortgage approval on Wednesday from the bank. – the day before F dropped the latest housing bomb.  I will put 5% down with a 30 year amortization.  So we are looking at me carrying a mortgage well into my 60’s.

“I have 100K in RRSP so I have a retirement nest egg started.  Tell me, did I just hang myself with debt on an asset that isn’t going anywhere but down.  Most of what you hear is about Toronto and Vancouver, what about us that live in areas of 100,000 people who worry that we’re screwed?”

Did Ken buy (under the pressure of love) in 2012? If so, has he scored big equity gains in the last five years, milking that 95% leverage? What’s been the fate of this middle-class family?

Well, we have an update. It’s may not be what you expected. But first, this:

While journalists, academics, politicians and real estate CEOs debate whether the market is experiencing a hiccup or a heart attack, conditions continue to deteriorate at a frenetic clip. Here’s some current data from TorontoRealEstateCharts.com. Ugly.

Oakville: Detached home sales down 46%, listings up 96%. Prices down 7-16% month/month. One more flat month and year/year prices go negative.

Markham: Detached sales down 66%, listings up 116%. A rapid decline in sales/increase in supply resulted in m/m price declines of approximately 10-11%.

Brampton: Home sales down 41%, while listings have exploded 184%. Month-over-month price declines of approximately 7-8%.

Mississauga: Detached home sales down 42%, listings up 102%. Annual price growth has fallen back to early 2016 levels (a price decline of 7-8%).

City of Toronto: Detached sales down 43%, listings up 91% year/year. Prices have declined 3-8%. Condo sales down 22%, listings off 27%.  Prices are down approximately 2% month/month in June.

Meanwhile, look what happened with 14 Milner Gate, in Vaughan, home of acres of particleboard McMansions. It was listed on March 31st for $1,288,000 – which seems like a ton of money for a nondescript suburban house miles from hip people – and was snapped up in a bidding war just days later – on April 9th. The price: $1,850,000. Here it is:

  Well, we know what happened next. After Easter the Ontario government brought in its anti-bubble package and, as this blog had been pointing out for a few weeks, the market was already rolling over from price fatigue. Not exactly the smartest time in history to be paying a $600,000 premium for a house that looks like a garage with a tumour.

“This was supposed to close in mid-June,” says realtor Uri Kogan. “It was the most expensive house under 3,000 square feet in the area that ever sold. Didn’t close. Yesterday the FOR SALE sign was up. Someone is going to lose big, because three doors down a similar home (a bit smaller) just sold for $1.215 million.”

The lesson here? The inevitable is occurring. The real estate market in Canada, despite whichever way it lurches, weaves, bobs, spurts or staggers over the next few months, is fraught with risk. It will bring a lot of people down. And the extreme leverage which has been at the heart of this market is a proxy for the country.

In the last decade household debt has grown by 85%, right along with house prices. Cheap money tricked millions into shouldering billions. Contrary to what the property bulls tell you in the deplorable comment section to follow, this does not always work out well.

Which brings us back to Ken.

Five years ago, as Lethbridge prices roared ahead 19%, this was my advice:

You have kids, which makes renting difficult. You have a nesting wife, which makes it impossible. You can buy a Harley and head south, or suck it up and buy your family a home. My point is this: you made a decision to get married, have four children and buy real estate. That explains why, in you mid-forties, you have only $100,000 saved and a measly 5% down payment. It’s all about choices, Ken. You made ‘em. You live with ‘em.

Will the house you just bought be worth less in a year? Probably. As long as your wife knows that, and can live with a complete erasing of your equity, then so be it.

And here is what happened, in Ken’s own words…

I thought you may be interested to know how things turned out. We bought a house large enough for 2 adults and 4 kids to live comfortably.  The plan was to buy one close to the university here in Lethbridge so the oldest had an easy commute in a year when she finished high school.  It was a larger “dated” home in a mature community.  So, somewhat affordable.

Life was good for a year then things started to go sideways.  The oldest daughter found it more appealing after finishing high school to rent a crappy little basement suite with her boyfriend than live rent free and follow the house rules.

To make a long story short.  The bond my wife and I had was not strong enough to endure everything that life can throw at you. She moved out in October 2014 and I stayed in the house until it sold.

It sold in April of 2015 for exactly what we paid for it.  After putting in about $10,000 in renovations (new carpets and new bathroom), and realtor fees, we got a cheque for 7,000. Since October of 2014 I have accumulated about 40,000 in debt. I remember you saying that divorces are expensive.”

Like this guy, many are about to discover real estate is a costly, messy, disappointing, illiquid and dodgy investment. All bubbles burst. Prices revert to the mean. Debts are inescapable. And nobody needs to own a house to have a home.

171 comments ↓

#1 JustMe on 07.14.17 at 6:00 pm

In British Columbia, real estate investors need to seek shelter

The new NDP minority government will likely take the recommendations of the BC Housing Affordability Fund. They will introduce a property levy on owners who don’t file an income tax return in British Columbia. The pre-sale foreign-buyer tax loophole will be closed. Using a bare trust to avoid property transfer tax will be closed. The sub-prime mortgage scheme will be halted. The foreign-buyer tax could be doubled to 30 per cent and implemented province-wide.

https://www.theglobeandmail.com/opinion/in-british-columbia-real-estate-investors-need-to-seek-shelter/article35688341/

#2 Big English on 07.14.17 at 6:05 pm

For the guy that appears to have lost alot, ouch and my condolances.

#3 Dave on 07.14.17 at 6:06 pm

Don’t see a lot af genuine happy people out there, mostly fakers. Full of debt but showcase wealth to anyone who will look their way. The reality show of life is about to take hold of the vast majority, no one will care about the misery and no cameras will be rolling. Get ready for some shock waves followed by quiet financial defaults. TGIF

#4 mouldyinYVR on 07.14.17 at 6:07 pm

Calling the top……
https://www.theglobeandmail.com/opinion/in-british-columbia-real-estate-investors-need-to-seek-shelter/article35688341/

…….and this is advice from a realtor (Barry Magee) ,so prick up your ears!

“A change in provincial government, incomes detached from prices, population numbers that don’t justify growth and higher interest rates are all imminent threats to the Vancouver real estate market. With a nearly 60-per-cent appreciation over the past three years completely and obviously unsustainable, the time is now to cash out. If you are over exposed, seek shelter now.”

Salient points….
“The new NDP minority government will probably (in the public interest – a novel concept!):
• introduce a property levy on owners who don’t file an income tax return in British Columbia.
• close the pre-sale foreign-buyer tax loophole
• close using a ‘bare trust’ to avoid ‘property transfer tax’
• halt the sub-prime mortgage scheme
• double the foreign-buyer tax to 30%

#5 Nick on 07.14.17 at 6:12 pm

thats rough

#6 Nick on 07.14.17 at 6:12 pm

Or should i say, ruff?

#7 Livin Large on 07.14.17 at 6:13 pm

Now Ken is someone I can feel sympathy for…not so much Derek though.

No wife, no home, no dough but a couple of very happy lawyers and some healthy debt that’s just going to compound him into an early grave.

Well, at least he saved a bundle from one child staying out of university.

#8 Oakville renter on 07.14.17 at 6:15 pm

Prices not down. Sales mix is skewing averages lower. Unbelievable that is blog would decide so much.

#9 BlorgDorg on 07.14.17 at 6:16 pm

Best. Post. Yet.

Enjoy it, Garth. You’ve earned it.

#10 Doug t on 07.14.17 at 6:22 pm

In the end we leave this world with nothing – live your life the best you can –

RATM

#11 Fish on 07.14.17 at 6:23 pm

Today, my DAY,, just 2 days after smoking man nothing is better than this,

Thankyou Garth

#12 Lulu on 07.14.17 at 6:26 pm

Aww,,,, Ken…. did you tell her about the vow that you two made during the ceremony? Who bailed first? You or her, probably her my guess… Well… what is done is done.. just move on and make sure your next one is rich…lol

#13 common sense on 07.14.17 at 6:28 pm

Isn’t love grand? (Freedom First comments to follow)

Great numbers out of the USA today????….looking forward to the next rate increase south and one and done here til 2018?

#14 MeanGene on 07.14.17 at 6:28 pm

Ken needs to read up on MGTOW and learn about Gynocentrism… crappy deal.

#15 Miller Time on 07.14.17 at 6:31 pm

Ouch

#16 ronh on 07.14.17 at 6:34 pm

When things revert to the mean, don’t they shoot past first?
Trick is to know what mean is. A world of hurt is coming.

#17 Guy in Calgary on 07.14.17 at 6:37 pm

What a horrible sounding wife. Goes to show how important it is to be on the same page financially. Ironic how marriage can be the biggest wealth booster there is while also being the biggest wealth destroyer. Be financially compatible or it won’t work.

There should be no ultimatums given from spouse to spouse with regards to finances. Be on the same page from day 1, save 1 income, live off another and enjoy life. For some that includes owning a house for some it does not. For some it includes kids (4 is excessive, just replace yourself) for some it includes dogs (my preference) and for some it includes both. Once again, balance.

Oh and rest in peace GTA. Went there to visit recently and still as pretentious as ever. That’ll change soon enough. Cowtown forever.

#18 Randy on 07.14.17 at 6:39 pm

Hey Ken, Look at the bright side. You still have your white male privilege.

#19 Kurt on 07.14.17 at 6:41 pm

” My wife told me that she never wants to move again and if I want to stay married we better buy a house.” The marriage was already dead.

“And nobody needs to own a house to have a home.” Absolutely. What they need is the exact opposite of the above: “We are committed to supporting each other come what may.” If you have that, even a cardboard box can be home.

#20 Toronto Dweller on 07.14.17 at 6:42 pm

Well, you can’t be comparing Lethbridge to Toronto can you? It’s in your stats that City of Toronto has only lost 2%. The periphery and the burb always loses big, but the core not so much.

#21 Ray Skunk on 07.14.17 at 6:43 pm

Wife who threatens to leave if she doesn’t get her way turns out to be a bitch and leaves anyway. Whoda thunk?

Freedom First is going to have a field day with this one.

#22 Ian on 07.14.17 at 6:43 pm

What an incredibly important lesson for the next peak You have to sell not only before the top, but in enough time to make sure IT CLOSES. What a nightmare trying to sue the reneging buyer. So ugly.

And my full congrats to whomever posted the ‘Mark needs a wordpress account so he can regurgitate by number’ – that was damn classic! Think I laughed for ten minutes. The Milton Realtor / Glue thing was epic too. Well done dogs!

Happy post-BoC fallout!!!! Countdown to October for round two!!!

#23 Toronto Dweller on 07.14.17 at 6:48 pm

Marrying a North American female seems like a losing proposition to me. Damned if you do and damned if you don’t. They all want Bad Boys with tattoes these days.

#24 SimplyPut7 on 07.14.17 at 6:49 pm

#7 Oakville renter on 07.14.17 at 6:15 pm

You may want to go look at some of the sold listings in your area, and see what homes sold for (not asking price, actual final sale price); compare February and March 2017 versus now.

It’s a big difference.

#25 Mark on 07.14.17 at 6:49 pm

“The question was why we don’t have 25 year fixed rate (and open) mortgages like the U.S. and your final point here is well, in theory we DO with swaps. Just amazing.”

Amazing? Just pointing out the truth. I cannot and will not apologize for pointing out the truth to you. A Canadian borrower who is determined to fix their cost of money for the next 30 years can enter into a floating rate mortgage with a bank, and simultaneously enter into a separate swap arrangement with the bank. In effect, making a mockery out of the Interest Act’s provisions. If demand existed for such a product, an enterprising financial institution could offer a neat bundle of both the swap and the mortgage all arranged as one package.

As for your other line of commentary, completely and utterly uncalled for and inappropriate.

#26 Leverage... on 07.14.17 at 6:50 pm

Feb 2016 to Feb 2017 for major Cdn. cities if you put 20% down what was the rate of return on that for the year:

https://www.zoocasa.com/blog/was-your-down-payment-a-good-investment/

Of course, we do not know if they factored in selling costs etc. With those costs calculated as well, looks to me like no one would have made money, save 416 (then).

Still an eye opener for YVR RE and interesting to recalculate 416 for June 2017. Speculators and flippers taking a dung kicking in YVR and soon in 416.

BTW, feel bad for Ken. Poor guy, does everything he is told to do and then gets stepped all over by the whims of his family.

#27 Frank Templeton on 07.14.17 at 6:51 pm

Good post and a sad story. My thoughts to that guy.

I also read the post in the G&M about YVR and risk. I agree with the article on a base level, but this city is just to wild to believe. Here’s an anecdote from this week.

Went to an open house yesterday – deep East Side, small 2 bedroom condo but with a great deck. Line up out the door to view it – had to wait over fifteen minutes to get in the door. Multiple agents in line talking to each other about how they can’t get their clients anything without going a couple hundred grand over ask. Agent in front of me said they sold four homes this week alone. One was a crappy townhouse two decades old that went $100K over what she thought the highest possible price could be. Said things are crazy. I agree – I’ve been to dozens of open houses lately and can verify. Any two bedroom condo on the East Side will sell over ask in two days. A one bedroom in our building sold last week for $110K over ask for $750K. Nice place and top floor, but wood frame and old building. $7M homes on the West Side are slowing down for sure – but the places us regular folks try to buy show no signs of stopping. Something else altogether is fueling this place.

#28 dakkie on 07.14.17 at 6:51 pm

Canada Just Took the FIRST STEP to CRASH Real Estate! Here’s Why.

http://investmentwatchblog.com/canada-just-took-the-first-step-to-crash-real-estate-heres-why/

#29 Raging Ranter on 07.14.17 at 6:52 pm

Moral of Ken’s story is this:

If your wife threatens to divorce you unless you buy a house, don’t do it. Because any women who gives you that kind of ultimatum has already made up her mind, and not in your favour.

#30 Danny on 07.14.17 at 6:52 pm

Sorry but true…with around 50% divorce rates…how many more families down this unprecedented path of extreme debt….will suffer emotionally.
As mentioned often here many parents are encouraging their children to buy and not rent…yes old thinking but that generation of “only buying a house is the way to go” is very insistent.
Garth could you recommend a good “rent or buy calculator ” to give the rent generation a tool to explain to the “buy only generation “that financial invest comes in more ways than just owning brick and mortar….or these days ” off level houses”…
Renting maybe better these days.

#31 Mark on 07.14.17 at 6:55 pm

“When things revert to the mean, don’t they shoot past first?
Trick is to know what mean is. A world of hurt is coming.”

Yes, mean reversion implies overshoot. After all, to restore a variable to its long-term mean requires that for time spent above the mean, time must be spent below the mean, to restore the variable to the long-term mean. Unless there has been some reason for the long term mean itself to be permanently shifted. Yes, Canadians do consume more RE than they did in the past, but the efficiency at which supply has been delivered to market has likely increased as well due to advances in technology and construction methods.

Since the long-term ‘normal’ median housing unit price to median household income is in the range of 2.5X to 3.5X, and we’re sitting at what, 6-8X nationally (depending on what numbers one uses), the severity of overshoot could be particularly extreme. Remember also that income itself will probably deflate as well. 90%+ reductions in RE prices relative to the stock market wouldn’t surprise me.

#32 Shawn on 07.14.17 at 6:59 pm

You could write a novel with these stories.

#33 TRUMP on 07.14.17 at 7:01 pm

I’d just walk away from it all and disappear on an Island in the Caribbean.

Life’s to short …..

#34 Sales mix skewing... on 07.14.17 at 7:04 pm

The data is shown separately for condos and SFH.

Considering that is almost the entire residential resale market and all are negative, #8 Oakville renter, how does sales mix even factor into the argument?

Show calculations.

They will all be negative no matter how you weight the price drops.

If you are saying still expensive, give it a few months.

#35 Raging Ranter on 07.14.17 at 7:08 pm

@#32 Shawn, Mark writes the equivalent of a novel here every day. Not that I’ve ever made it through a single one of his posts.

#36 TCContrarian on 07.14.17 at 7:13 pm

“My wife told me that she never wants to move again…”

I would have tied her to the fence, just to be helpful!

Seriously, ultimatums like this are usually a sign that the relationship is in trouble.

I’d rather be a happy renter with liquid assets (freedom), than a stressed out RE owner with debt (slavery) – especially now that the asset is entering a bear.

TCC

#37 What's going on YVR condos... on 07.14.17 at 7:14 pm

Simple, they cannot afford a SFH or Townhome and buy the cheapest option, a condo.

If anything, it shows people cannot afford a home in YVR #27 Frank Templeton.

Give it a month after the GreenDP bring in the legislation and revisit those condos…crickets.

#38 Goldie on 07.14.17 at 7:19 pm

I actually feel kind of bad for him. So glad I’m not married.

#39 Nick on 07.14.17 at 7:27 pm

Renting month to month. Just gave cheques to take me to the end of 2017. Lets hope the timing is right!

#40 Leo Trollstoy on 07.14.17 at 7:27 pm

Since October of 2014 I have accumulated about 40,000 in debt. I remember you saying that divorces are expensive

[ ] not rekt
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[x] the shawshank rektemption
[x] forrekt gump
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[x] shrekt
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[x] erektile dysfunction

#41 Leo Trollstoy on 07.14.17 at 7:29 pm

#35 Raging Ranter on 07.14.17 at 7:08 pm
@#32 Shawn, Mark writes the equivalent of a novel here every day. Not that I’ve ever made it through a single one of his posts.

One of the best writers of financial fiction we have ever known

#42 Cristian on 07.14.17 at 7:30 pm

“You have kids, which makes renting difficult.”

And why is that?… My parents rented all their lives (I have two siblings and I remember always being perfectly happy without a backyard)
I have three kids myself now and we rent and will keep renting. Everything is within walking distance, we have the freedom to move whenever our current living arrangement doesn’t suit us (which we have done twice in the last 6 years as the family kept growing), I have never had any debts and I am financially secure at 55 for the rest of my life.
So, why is renting difficult with kids?…

As for Ken… a pussy-whipped fool like many others.

#43 AGuyInVancouver on 07.14.17 at 7:30 pm

“..a house that looks like a garage with a tumour.”

Love it Garth. Welcome to suburbia!

#44 Al on 07.14.17 at 7:31 pm

Man. That is tough. Marriage is hard.

#45 TurnerNation on 07.14.17 at 7:34 pm

A good scheme to run now: set up a brokerage named Foreign Buyer Realty.
“We specialize in finding foreign buyers for your property”.

Hire vaguely-looking ‘foreign’ people.

People will throw listings at you on basis of hype alone. Capitalize on their desperation. Can’t sell? Call us……..

#46 Cici on 07.14.17 at 7:34 pm

Heartbreaking story, yet Ken sounds like a smart and reasonable guy, and bought a modest house within his means. Imagine what’s going to happen to the families that have waged huge bets on overpriced houses and condos.

I suppose the divorce lawyers and marriage counsellors will be picking up all the underwater mortgages on the way down.

As for Ken, he got skinned a bit, but he’ll make it out alive. He’ll have to budget like a fiend for the next five years though, and try not to make too much money (the ex will just go after him for it). And the kid not going to university is probably going to be a financial blessing for him.

Ken, wipe away the tears, find a nice, decent divorcée who’s already got a nice nest egg and won’t be looking for anything but companionship from you, get rid of the debt and then buy yourself a nice Harley (or boat), or both :-)

#47 crdt on 07.14.17 at 7:35 pm

Kind of shows you how fast things unravel. A lifetime of saving gone as quick as the temporary gains in Toronto. The lesson here is do what you want.

“My wife told me that she never wants to move again and if I want to stay married we better buy a house (isn’t love grand?)”

#48 Pay Attention to Sources... on 07.14.17 at 7:36 pm

Investment Watch Blog?

Why not just use a more direct link to Zero Hedge since that’s where most of their “research” comes from for the video.

Only other Zero Hedge like source they forgot to use was Breitbart and Fox.

#49 acdel on 07.14.17 at 7:37 pm

Regarding the story about Ken and his family.

Anytime a partner gives one an ultimatum either do what I say or else, just leave!

If one deep down does not feel good about the choice then it is not worth it for the fact that at that point it is not about love but so called security. The relationship will never work out due to the unhappiness in the relationship, selfishness, and the so called security which sooner then later the lawyers, real estate scum artists, banks, etc, will get the most of it. There are special cases out there that have basically written an agreement between them but in general “NOT”!

It is tough when children are involved and it is soooooooo used against one. Be brave and listen to that inner voice it will all work out in the end!

#50 just a dude on 07.14.17 at 7:40 pm

“And nobody needs to own a house to have a home.”

Here here. Well said, Garth.

Too bad things went south for Ken. Feel especially sad for the kids.

#51 Editrix on 07.14.17 at 7:40 pm

Seems like Ken forgot the Golden Rule: “Cheaper to keep her.”

#52 Alicia on 07.14.17 at 7:44 pm

In his 40’s with 4 kids and one is old enough to go to university? Sounds like he had kids very young, and if so, no wonder his wife was pushing for a home. Who has that many children and rents for 13 years? (5 years ago when his daughter, I presume would have been 13). Wife sounds like she was tired of living with Peter Pan.

#53 I'M NOT POLOZ on 07.14.17 at 7:45 pm

If Poloz gets divorced, is he going to lower the loonie so that $1US=$100,000,000,000,000,000 Loonies to erase his alimony debt?

Why do Canadians divorce so much?You’re better off marrying an American female or Donald Trump’s wife…You will never find such a loyal wife like Melania, even when Donald Trump flirts with anything that just reached puberty.

#54 paracho on 07.14.17 at 7:47 pm

Most people are over indebted in real estate. Especially the GTA! Most of Thomson my age bracket( early 40s) had a heard mentality and followed the crowd. They are overindebted and living stressful lives. Any future financial disdain wil increase those stress . Most of their equity is tied into one overvalued property . They are looking big beyond their means on all fronts . Expect divorces to increase as the downward spiral continues .

#55 Love this Blog on 07.14.17 at 7:49 pm

Proving yet once again, that women are dream killers.

You can be married or you can be wealthy

Hard to do both

#56 Smoking Man on 07.14.17 at 7:51 pm

Looked at the charts and 416 looks pretty good
down 3 to 8 % insipte of all the bad press about real estate.

I remember when I visited the General Store and chatted with Garth, I said when this thing goes soft probably around April, the burbs will get slaughtered, 416 not so much. Looks like I was right yet again.

Tons of Good Paying jobs downtown and growing, hence the rate hike.

416 will be spared and when the folks stuck with two properties are down to one. It will happen at about the same time Wynee back tracks that frustrated sellers have had enough and de-list in Sept. Boom

The buyers on the side lines who sold, will see the inventory dry up, and get out of this hell hole of renting, they will pounce.

Watch and learn wee grasshoppers.

I dont have a PHD in Herdonomics for nothing.

#57 miketheengineer on 07.14.17 at 7:52 pm

Garth et al:

Just opened my Master Card statement. Guess what…rate BALLOONED from 13.9% to 22.99%. Set to take affect in Sept. I have had this Card for forever….at around 13%. Never seen a jump like this one.

What do they know that we don’t?

#58 Makes sense on 07.14.17 at 7:55 pm

introduce a property levy on owners who don’t file an income tax return in British Columbia.

Normally I wouldn’t agree with an NDP policy but this should have been implemented years ago!

#59 Revert to the Mean... on 07.14.17 at 7:55 pm

Here is an attempt for YVR RE to show what “reverting to the mean” looks like, using linear regression:

http://www.chpc.biz/history-readings/category/bubbles

It depends how far back in time as to what data you want to take into account. For example, if you had started in the year 2000, the red linear regression line would be a lot steeper and predict that price drops would be lower vs. starting in the year 1977.

Calculating the linear regression line is easy in Excel after a scatter plot has been created from the data, just use the Trendline feature. The R squared value will tell you how good your regression line is at explaining the data (usually, an R squared value > 0.90 is very good result, i.e., the linear regression line explains 90% of the data).

#31 Mark, I taught Stats at University for years.

Please stop talking about them, you are making me cry.

#60 miketheengineer on 07.14.17 at 7:56 pm

Garth et al:

Thanks for the all the info.

Anyone know what is happening in Hamilton?

I need to relocate back to Hamilton soon, to look after a sick relative, and compared to Mississauga or Brampton…you can get a bit more. I may rent, what does a 3 bedroom go for there? Plan to scope out a waterfall or 2 the next time a get there.

Thanks in advance

Mike

#61 RE: Revert to the Mean... on 07.14.17 at 7:57 pm

So you do not have to hunt for the chart on a page with far too many charts:

https://www.google.it/search?q=yvr+re+crash+price+projection&source=lnms&tbm=isch&sa=X&ved=0ahUKEwi-7IXY-YnVAhUoKsAKHWl4DrYQ_AUIDCgD&biw=1536&bih=736#imgrc=kT1MIsd-Ay0YTM:

#62 Wrk.dover on 07.14.17 at 8:02 pm

DELETED

#63 Freedom First on 07.14.17 at 8:10 pm

Ouch! I wish you the best Ken!

Sincerely,

Freedom First
Master of Freedomonics
Its my life

#64 Pillboy on 07.14.17 at 8:11 pm

It’s hard to find good partners in business, and even harder in one’s personal life. I’m always a big promoter of travelling with your future partner, because it’s during times of stress while on the road that you really get a feel for how he/she will be in the future. Moreover, you get to broaden your views on the world.

It took me a couple of years to get my lady to come around and see my point of view on how to live balanced, since I’d rather spend my money taking her out than paying a huge mortgage. Helping with her couch potato portfolio didn’t hurt either.

#65 Ace Goodheart on 07.14.17 at 8:18 pm

To the dude whose wife left in 2014 and accumulated 40k in debt thereafter: I suggest the Phillipines. Hot, cheap and their banks don’t co-operate with Canadian requests for garnishment.

Watched as a friend built a McMansion in ‘sauga. Lorne Park. This name means something to people who value money above all else. To the rest of us It’s just a weird neighbourhood where people look really snooty and you get a bad feeling walking through.

Stick framed a monster. Four times they were stopped by the neighbours taking them to court. This is too big, that blocks out my sunshine. Money spent on lawyers to keep building would have bought a four bedroom semi in the sticks.

They prevailed finally and put a way too big house on way too small a lot. Their pool had to be truncated to fit in the tiny space left of the back yard. First year they were there their 250k backyard gazebo with designer barbeque, imported Italian stone and a clay roof, partially collapsed in a wind storm.

Since then it has been one thing after another. Why stick frame a 3 million dollar McMansion and then cover it with stone and put a clay roof on it? This was seriously a pig with lipstick. The whole thing is held up by 2x4s. Cracks, sagging. Their “theatre room” (largest in the ‘hood – by 3ft height and 2ft depth – they checked of course – bragging rights) has mould and water leaks (it is directly under the pool!!!!).

Greatest thing about it is they bought and built it with a mortgage. Equity is below 20% and sinking.

We are a peculiarly nutty lot here.

For those who learn to ridge run and ride the wire of desire we are incredibly profitable.

For everyone else we are a work camp full of useless stuff that no one needs. Improperly built junk, over priced and mostly useless.

Why is it that the ‘burbs houses need such huge garages? You can hardly see the door in the one Gartho posted. Just this massive garage. They’re all like that. It’s so odd.

#66 Leo Trollstoy on 07.14.17 at 8:20 pm

#59 Revert to the Mean… on 07.14.17 at 7:55 pm
#31 Mark, I taught Stats at University for years
Please stop talking about them, you are making me cry.

[ ] not rekt
[x] rekt
[x] really rekt
[x] tyrannosaurus rekt
[x] parks and rekt
[x] star trekt
[x] school of rekt
[x] catcher in the rekt
[x] great rektspectations
[x] rekt it ralph
[x] the shawshank rektemption
[x] forrekt gump
[x] finding rekt
[x] rektal exam
[x] shrekt
[x] rektium for a dream
[x] erektile dysfunction

If Mark’s tech skills are similar is it a wonder he can’t find work?

#67 Bob Dog on 07.14.17 at 8:25 pm

City of Toronto: Detached sales down 43%, listings up 91% year/year. Prices have declined 3-8%

Prices down 3%? Are Canadians mentally retarded. Thats a rhetorical question.

Multiply your ridiculous annual salary by 3.5 and offer that amount. Simple!

#68 Smoking Man on 07.14.17 at 8:35 pm

#57 miketheengineer on 07.14.17 at 7:52 pm
Garth et al:

Just opened my Master Card statement. Guess what…rate BALLOONED from 13.9% to 22.99%. Set to take affect in Sept. I have had this Card for forever….at around 13%. Never seen a jump like this one.

What do they know that we don’t?
…..

That you were late with a few payments. Thats when they do that.

#69 Long-Time Lurker on 07.14.17 at 8:37 pm

Hi, Garth. Thank you for continuing your blog.

I thought I’d clarify about the trader and his take on the Fed.

He thinks the US stock market is going to go into another bull run because the Fed isn’t set on popping the bubble any more.

From a quick look at the Fed notes, Yellen said she isn’t going to raise interest rates much higher. (Neutral policy fund? Fed-BS speak for not too much and not too little: i.e., the Goldilocks point).

The trader said that it’ll take decades for the Fed to take the money out of the system. (Balance sheet normalization -more Fed BS speak?) I didn’t look at the Fed comment for that.

So basically, the trader thinks that the US Fed isn’t going to crash the US stock market, so there will be another bull run. That is unless the Fed changes it’s mind again. Plus there’s still plenty of risk in US markets. I think the trader has a chance but should go on the defensive by
the end of the summer. Anything could derail US markets. (Black swan –unexpected– event.)

From my measly understanding of the US Fed: The 2007-2008 housing market crash caused a credit and banking financial crisis so the Fed created money and put it into the system to stabilize the US financial system and economy.

As I understand it, they created bonds, sold them to banks, then bought the bonds back but kept the bonds on the bank balance sheets thus creating money and pumping it into the system. Along with this, the Fed dropped interest rates to historical lows.

Now the Fed is raising interest rates and is taking the juiced-up money out of the system by letting these bonds that the banks are holding expire. This will take money out of the US financial system. I do not know at what rate it’s going to occur.

So, if I understand it correctly, pumping all that money into the US system to keep it afloat created asset bubbles such as in the stock market. Taking all that money and credit out of the system is going to cause the asset prices to drop. So, there is the big risk of deflation.

That’s about as well as I can understand the matter.

#70 acdel on 07.14.17 at 8:37 pm

#52 Alicia

You just do not get it!

Good-luck with your future! Actually I hope that you have a very happy future; especially after 50.

#71 FOUR FINGERS WATSON on 07.14.17 at 8:41 pm

Such a big fuss about the GTA. What about the Vancouver Lower Mainland and Okanagan?

#72 Entrepreneur on 07.14.17 at 8:42 pm

TGF…time for a drink or two and forget our problems for awhile.

A good old friend died a year ago from cancer so we had his wife over about 7:00 about every second night when times were too hard for her. At first we exchanged the problems in our lives then would say what her husband would say “when can’t solve a problem have a drink.” Put on some country music, guess the singer, sometimes laughed, sometimes cried.

We kept on saying we did not want the dog (we needed a rest after having ours) but the wife died of cancer a year later. BTW, we have the cutie, part of our family.

Ken’s only mistake he made was to hold all the responsibilities financially wise and now holds the burden of that.

TGF and time to enjoy what you enjoy.

#73 Freedumb on 07.14.17 at 8:46 pm

This is why I never risked anything in love. Like attracts like, and I just knew I would marry a ho who would ditch me. I’ve always preferred my mom anyways. She would never leave me!

#74 Entrepreneur on 07.14.17 at 8:47 pm

Lol, #5&6 Nick…L0L, I like spelling mistakes. I hate perfections. Anyways, that made me laugh. TGF.

#75 Nemesis on 07.14.17 at 8:49 pm

#KenChosePoorly,Or… #ABachelors’GuideToAssortativeMating… #”Because,ChoicesHaveConsequences”…

https://youtu.be/VA7J0KkanzM?t=20s

#76 Ret on 07.14.17 at 8:58 pm

Milton ON.- A monument to shoddy workmanship, lax Ontario building codes, drive by municipal building code inspections, developer planning, gutless local governments, Liberal intensification policies and above all, unbridled RE greed.

There are 506 listings and 77 of those have open houses this weekend.

In addition, there are hundreds of new pre-sold homes being built that are now at the foundation or framing stage for delivery late fall, early winter.

The flippers of these yet to be delivered new homes will be toast. The non flippers will have paid too much for too little.

North Burlington and Oakville along Dundas (Hwy #5) are pretty much the same situation but with tonier postal codes.

#77 Contrarian Coyote on 07.14.17 at 9:04 pm

#42 Cristian on 07.14.17 at 7:30 pm
“You have kids, which makes renting difficult.”

And why is that?… My parents rented all their lives (I have two siblings and I remember always being perfectly happy without a backyard)
I have three kids myself now and we rent and will keep renting. Everything is within walking distance, we have the freedom to move whenever our current living arrangement doesn’t suit us (which we have done twice in the last 6 years as the family kept growing), I have never had any debts and I am financially secure at 55 for the rest of my life.
So, why is renting difficult with kids?…

As for Ken… a pussy-whipped fool like many others.

===

It’s a shame your name doesn’t imprint on you more of the ‘Cristian’ ideals. No need to project your own deep-seeded insecurities on Ken. Let his example be a lesson for the rest of us.

Wife and I are renting as well – and quite happily. For us, it’s more about labour mobility and not wanting to be tied down. Timing now seems to be fortuitous as well.

#78 Ray Skunk on 07.14.17 at 9:07 pm

A somewhat understated, muted, response from FF.

Probably so overstimulated and consumed with emotion and rage that he finds it hard to commit fingers to keys right now.

Hugs, FF, I’m sure we’ll get a drip feed of your feelings over the next week or so.

#79 First on 07.14.17 at 9:07 pm

It’s all Phil, because, I don’t remember

#80 SW on 07.14.17 at 9:17 pm

My advice to young men out there (and young women) is to consider the character of your intended.

Just because they’re gorgeous and pouting doesn’t make them a suitable life partner. What you should be looking for is wit, flexibility and even stoicism. As the man said above, go travelling together.

And, as was recently said on the internet, if you go home with someone and find there are no books in the house, do not sleep with them!

#81 Raging Ranter on 07.14.17 at 9:24 pm

@#52 Alicia, who said they rented for 13 years? He starts off saying they had a house, but he lost his job so they had to sell it and move. Job loss happens to good people sometimes. It doesn’t mean he was irresponsible or immature.

#82 In real estate ... on 07.14.17 at 9:28 pm

They r winners and losers . Life .

Kudos to those that made a fortune didn’t fantastic run

Sorry to those that lacked courage to buy as ‘it wasn’t a good time , it’s the top ‘

Sorry to those that DID but at the top

Ain’t real estate fun? :)

#83 Moses71 on 07.14.17 at 9:32 pm

Hey Ken, going against your grain to please someone else? If you were a business, you’d get eaten up & swallowed. Integrity is walking it like you talk it. MIssed that memo, eh? Guess people get married for different reasons! Just remember not to do a disservice to others by NEVER offering advice to people about LOVE nor BUSINESS.

#84 Smoking Man on 07.14.17 at 9:32 pm

T2 and Wynee getting crushed on soical media.
Im calling on the extinction of liberals for the next few decades.

#85 Bob on 07.14.17 at 9:35 pm

Moral of the story about Ken….

Do not marry any woman born on this continent in the past 50 years.

Want company…get a dog.

#86 viorelli on 07.14.17 at 9:42 pm

My oldest son has a friend who is a partner in a law firm, two locations in GVRD (dad’s law firm). Trying to get into the dating game but is waaay too smart (dealing with mostly divorce and ICBC claims). Made up a business card for himself, says power washing, gutters, and handyman services, rides a bike to meet his date around downtown Vancouver. Most of the ladies walk away shortly with a fake: nice to meet you, yeees, will chat again sometimes. Finally he is with this nice Polish girl, 7 years in BC with family from Warshaw, registered nurse, did not mind the handyman title, he lives with her now in her rental condo in New West. Perhaps soon he will disclose that he does something entirely different for work, and may invite her to his sub penthouse in Olympic Village, hopefully she will not slap him!

#87 Mike on 07.14.17 at 9:48 pm

2014 prices are history in Vancouver.

#88 Moses71 on 07.14.17 at 9:54 pm

Should’ve read “Just remember not to do a disservice to others by offering advice…”

#89 And I Quote on 07.14.17 at 10:01 pm

“My husband and I have never considered divorce… murder sometimes, but never divorce.”
― Dr Joyce Brothers

#90 U of Toronto Pension on 07.14.17 at 10:02 pm

Garth, read this one carefully…

Thousands in Toronto are about to experience tightening is a way no one expected: My sister received an email from her University of Toronto pension. They have problems. They are under-funded and say that union members will be asked to pay an extra 0.9% into the pension. On a 70k salary, that is a 55 dollars per month.

You think it’s not much? This is equal to the impact of the Bank of Canada rate hike this week.

#91 Smoking Man on 07.14.17 at 10:21 pm

What MSM doesn’t realize is the industry is being huggly disrupted by vloggers and bloggers.

CNN is stund and confused. Guys like Mike Cerovitch, and Jack Poesitc. Alex Jones have a bigger reach than all MSM outlets combined.

Even Keith Obermen knows this hence his histaria of late.

The future and credibility of journalism is an hounst drunk under a gazibo coughing out snot laste truths that the world so craves for.

Once I lose a few more teeth to solidify the persona.

Up goes my YouTube channel.

Bring it on you mental case lefties.

Smoking Man
PhD Herdonomics

#92 Sydneysider on 07.14.17 at 10:23 pm

Poor old Ken. I hope he kept the job at least. But Albertans are tough critters, and he will weather it, like many Albertans before him.

#93 Smoking Man on 07.14.17 at 10:29 pm

U of Toronto Pension on 07.14.17 at 10:02 pm
Garth, read this one carefully…

Thousands in Toronto are about to experience tightening is a way no one expected: My sister received an email from her University of Toronto pension. They have problems. They are under-funded and say that union members will be asked to pay an extra 0.9% into the pension. On a 70k salary, that is a 55 dollars per month.

You think it’s not much? This is equal to the impact of the Bank of Canada rate hike this week.
…..

Ask yourself this question, who owns the university. That charge outrageous tuition, for information that is free with a skilled Google search word. University is not a learning center any more.

Its an indoctrination camp selling a one world govt that id guaranteed to fail.

Thank your god that Trump is the POTUS to right this madness.

#94 crdt on 07.14.17 at 10:33 pm

#60 miketheengineer on 07.14.17 at 7:56 pm

“Anyone know what is happening in Hamilton?”

I basically grew up in the “Hammer” when the steel plants were spewing 24/7/365. I was there two years ago and I was stunned by the level of decay around Jackson Square. It is a semi-gentrified freaking war zone, and I have my money on the indigenous population. I would take a bit of time to reflect on other places on this huge stretch of dirt to set up shop.. Anyhow, Hamilton has a come a long way, but also sank quite far at the same time.

#95 SailorSam on 07.14.17 at 10:37 pm

The best advice I could give anyone is if they( gov) tell you to turn left , do the opposite go right it will always turn out better . I’m turning 60 this year and so far it’s working out just fine.

#96 bigtowne on 07.14.17 at 10:40 pm

The rate hike of 25 basis this week by Bank of Canada Governor Poloz cannot be seen as outside of the present regime’s economic policy. The Canadian economy held up by the low interest rates for close to a decade is not outside or separate from the policies of the finance department. The “carbon tax and the end carbon infrastructure” regime is not outside of this “low interest rate policy”. The “end carbon industry” is only able to succeed with the artificially low interest rates as the economy cannot support the “end carbon regime” without major support. To analyze an economy without any hope of a return would look like Venezuela on a lighter note Vegas is running out of weed so hopefully all the new IPO operators on the TSX can find some freed up stash or overlooked inventory and hurry it up to the strip. You never know who will be in your limo at the airport…I met Barry Diller. Vegas..that kind of town.

#97 Smoking Man on 07.14.17 at 10:50 pm

#95 SailorSam on 07.14.17 at 10:37 pm
The best advice I could give anyone is if they( gov) tell you to turn left , do the opposite go right it will always turn out better . I’m turning 60 this year and so far it’s working out just fine.
….
Im a few years behind you. It sucks that we got to lose our hair or wait for it to go grey before our brain goes.

WTF this aint right. My stupid left eye always missed the good song.

#98 conan on 07.14.17 at 10:51 pm

All of these people chasing the easy green of RE appreciation, and then boom! A big sell off ,and no broccoli for you.

http://imgur.com/yRAfj4L

#99 Smoking Man on 07.14.17 at 11:01 pm

One the topic of Home.

In less than two weeks We will be homeless.

Who’s coming to my sell everything garage sale tomorrow. James st. BYOB and one for me.

8am till noon. Wedding in the afternoon. All moneys collected to the etobicoke animal place.

Everything not sold. Donated to the people who took the wrong fork in the road.

Bye, Bye Canada.

#100 Linda on 07.14.17 at 11:04 pm

Interesting that condos show (for now) the lowest price decline. Wonder if that will continue as the market churns. Meanwhile, how much for all those doggies in the gateway? Someone has quite the pack to greet them when they get home.

#101 For those about to flop... on 07.14.17 at 11:14 pm

# 91 Joking Man
What MSM doesn’t realize is the industry is being huggly disrupted by vloggers and bloggers.

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

I would put you in the category of a chogger…

M43BC

#102 Smoking Man on 07.14.17 at 11:15 pm

DELETED

#103 Desi on 07.14.17 at 11:17 pm

“To make a long story short. The bond my wife and I had was not strong enough to endure everything that life can throw at you. She moved out in October 2014 and I stayed in the house until it sold”

White people are so fake. They diss us brownies having backward customs like “arranged” marriage

Would be interesting to have some stats on the endurance rate of nuptials in the face of coming RE catastrophe.

After all we are all in the same debt-shit boat!!

I bet we will survive it Waaay Better.

3 Cheers for Chicken Tikka Masala !!

#104 45north on 07.14.17 at 11:30 pm

sales down 46%, 66%, 41%, 42%, 43%

that’s huge. Huge!

mouldyinYVR: The new NDP minority government will probably
• introduce a property levy on owners who don’t file an income tax return in British Columbia.

that’s a new level of integration of government databases. It shows that in Canada you don’t have the right to own property.

Doug t: In the end we leave this world with nothing – live your life the best you can

Dust in the Wind:
https://www.youtube.com/watch?v=tH2w6Oxx0kQ

Guy in Calgary: Oh and rest in peace GTA. Went there to visit recently and still as pretentious as ever.

I grew up in Toronto. Went to school there, had summer jobs. Worked at U of T. Got married. Is it pretentious? You could say that but still there is a strength there that you didn’t see.

Ian: You have to sell not only before the top, but in enough time to make sure it closes.

pretty funny. Looking back the last best time to sell was December 2016.

Ace Goodheart: They prevailed finally and put a house that was way too big on a lot that was way too small. Their pool had to be truncated to fit in the back yard. First year they were there, their 250k backyard gazebo with designer barbeque, imported Italian stone and a clay roof, partially collapsed in a wind storm.

that’s pretentious. $250,000 for a gazebo!

Smoking Man: in reply to the question: What do they know that we don’t?

That you were late with a few payments.

pretty funny

#105 Asterix1 on 07.14.17 at 11:56 pm

#103 Desi

White people are so fake. They diss us brownies having backward customs like “arranged” marriage
____________________________________________

Did you just get out of prison? Keep race out of this board.

#106 Dee on 07.15.17 at 12:42 am

Nothing nothing is moving in the 416. The same for sale signs sitting for months. I dont know if theres a listing spike, I do see more listings but that doesnt matter. Its complete crickets for everything on the market. Plus lots of deals falling through. Credit has tightened

#107 Tony on 07.15.17 at 1:14 am

Re: #28 dakkie on 07.14.17 at 6:51 pm

The guy from Money GPS seems to quote a lot verbatim from ZeroHedge. The guy writes books and lucky for him I help him out in the comments section.

#108 Tony on 07.15.17 at 1:25 am

Re: #100 Linda on 07.14.17 at 11:04 pm

I’m thinking the smog and air pollution in Toronto has affected the brain cells of the Millennials there. I haven’t come up with a saying yet for the native Toronto Millennials like can’t see the forest for the trees. I’ll come up with something.

#109 Freedom First on 07.15.17 at 2:28 am

#78 Ray Skunk

Not much more to be said AFTER a man has placed a high risk 50/50 bet, which, when he loses, she gets everything, court backed. Fact.

I make sure the odds are always stacked. For me, of course.

Freedomonics 101-vasectomy, live alone, and be debt free. My odds are 100% in my favor. This is a must as I am a man.

My life, my body, my rules.

Its my life.

#1
Freedom First
Master of Freedomonics

#110 Jane24 on 07.15.17 at 3:14 am

Truest comment on this blog today is the reminder that we arrive with nothing and leave with nothing. Don’t waste your life accumulating way more than you need. You need to balance more that your stock account. It all stays in this word when you go. Enjoy every day.

The old joke still runs true.

Neighbour – “I see that Mr Smith died, what did he leave?”

Lawyer – “Everything!”

Think about it on this lovely summer day.

#111 allovertheplace on 07.15.17 at 3:18 am

One thing that needs to be factored into the BC situation, and the lower mainland especially, is the captive audience effect. It’s astonishing to see how many people in this province have never lived elsewhere and have no intention of ever doing so.

Why are wages so low compared to the national average? Simple, you have an overflowing and ever growing pool of employees unwilling to migrate elsewhere. Why are house prices so high compared to the national average? See above.

Add to this the fact that Canada is a nation of employees/consumers, not innovators/producers and no one should reasonably expect any behavioral change, especially on the West Coast.

Record levels of complacency and entitlement are being passed down generationally. This will only accelerate as things unwind and they all end up living in the same house. Won’t be for a long time, though.

#112 nubbers on 07.15.17 at 3:35 am

I notice a definite pattern emerging – if someone threatens to leave you over home ownership (or lack thereof), then they are going to leave anyway.

Better to ditch your future ex early and avoid two costly property transactions.

I wish I could go back 27 years and tell myself this.

#113 Myra Andrews on 07.15.17 at 4:04 am

Active listings are increasing in July which is contrary to the seasonal trend. July listings are up from June.

This is for the Vancouver area but not the Fraser Valley

July 14 New 164 Sold 109 TI:9698
July 12 New 288 Sold 184 TI: 9702
July 11 New 282 Sold 148 TI: 9635
July 10 New 399 Sold 147 TI: 9576
July 6 and 7 New 387 Sold 273 TI: 9404

#114 Myra Andrews on 07.15.17 at 4:08 am

Data for Vancouver for July (GVRD and Fraser Valley)

=====New Sold Sell List %
July 14 319 145 45.4%
July 13 301 251 83.4%
July 12 448 243 54.2%
July 11 444 251 56.5%
July 10 588 224 38.1%
July 7 368 201 54.6%
July 6 374 225 60.2%
July 5 502 231 46.0%
July 4 696 195 28.0%

#115 Howard on 07.15.17 at 4:35 am

Ken’s story illustrates why in Japan, many younger men prefer to “marry” virtual reality women rather than the real version.

#116 Howard on 07.15.17 at 4:36 am

Btw, yes those puppies are cute, but irresponsible given pet overpopulation.

Spay and neuter.

#117 Howard on 07.15.17 at 4:51 am

#23 Toronto Dweller on 07.14.17 at 6:48 pm
Marrying a North American female seems like a losing proposition to me. Damned if you do and damned if you don’t. They all want Bad Boys with tattoes these days.

———————————–

It does seem that younger women in Canada want it both ways. On the one hand, they want to have the same opportunities as men but also be pampered and taken care of as it’s still the 1950s*. Well which is it?

Add to that the fact that employment equity provisions prioritize the hiring of women – guaranteed that all else being equal, a woman will be selected over a man nearly 100% of the time.

#118 neo on 07.15.17 at 6:01 am

#76 Ret on 07.14.17 at 8:58 pm
Milton ON.- A monument to shoddy workmanship, lax Ontario building codes, drive by municipal building code inspections, developer planning, gutless local governments, Liberal intensification policies and above all, unbridled RE greed.

There are 506 listings and 77 of those have open houses this weekend.

In addition, there are hundreds of new pre-sold homes being built that are now at the foundation or framing stage for delivery late fall, early winter.

The flippers of these yet to be delivered new homes will be toast. The non flippers will have paid too much for too little.

North Burlington and Oakville along Dundas (Hwy #5) are pretty much the same situation but with tonier postal codes.

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

True story. I know someone this January who bought two 36′ foots Mattamy phase close to that dump that is closing in 2018/2019 for a total of $2,103,000 or a little over a million each. They were flippers who knew they would lose money renting it but by next year they would be worth $1,400,000 each “easy” in capital appreciation. I just shook my head.

They have already lost $400,000 on those homes since January because 32 foot resales are going for around $800,000 a piece at the moment and are still dropping.

Way too many amateur landlord/flippers entered the market in 2016/2017 and are going to get a harsh lesson. Their 20% down payments is already wiped out and they used the equity in their bloated principal houses for that downpayment. Double Whammy as that house is down around 15%…..so far. Deleveraging isn’t fun.

#119 Stan Broock on 07.15.17 at 6:23 am

The ‘fattening of the sheeple’ cycle was completed.

Not it is time for the slaughter. The lamb shank (bank preferreds and dividends) will be delicious.

Nothing personal, just another credit cycle. Part of life for each generation of the herd. The next fattening cycle will commence in 5-6 years, the next slaughter in 20.

#120 maxx on 07.15.17 at 6:56 am

“The real estate market in Canada, despite whichever way it lurches, weaves, bobs, spurts or staggers over the next few months, is fraught with risk. It will bring a lot of people down. And the extreme leverage which has been at the heart of this market is a proxy for the country.”

Totally agree….the lurching, weaving, bobbing, spurting, and staggering are all indications of beat-out realtards trying desperately to grasp the ropes.

The proletariat is increasingly waking up to the life-restricting horror of long-term debt.

#121 maxx on 07.15.17 at 7:14 am

“Debts are inescapable.”

But, “You’re richer than you think.”

Nothing, nothing is more luxurious than living below your means and never worrying about debt, nor answering to creditors…..

….and accumulating/having accumulated wealth despite all of the marketing crap coming at you, every waking minute of every day, such as the vomitous, never-ending tsunami of realtard bs.

Save now or save never.

#122 maxx on 07.15.17 at 7:22 am

#3 Dave on 07.14.17 at 6:06 pm

“Don’t see a lot af genuine happy people out there, mostly fakers. Full of debt but showcase wealth to anyone who will look their way. The reality show of life is about to take hold of the vast majority, no one will care about the misery and no cameras will be rolling. Get ready for some shock waves followed by quiet financial defaults. TGIF”

Great post. The last (huge) wave of quiet financial defaults was ~a decade ago – people don’t advertise losses, unless they think they have a shot at a law suit.

The happy factor is an important one. I use that as a litmus test indicating fiscal comfort. You can almost always tell the ones who are in debt…..anyways, how many indebted souls realize that the rich live waaay below their means?

#123 maxx on 07.15.17 at 7:40 am

#4 mouldyinYVR on 07.14.17 at 6:07 pm

“Salient points….
“The new NDP minority government will probably (in the public interest – a novel concept!):
• introduce a property levy on owners who don’t file an income tax return in British Columbia.
• close the pre-sale foreign-buyer tax loophole
• close using a ‘bare trust’ to avoid ‘property transfer tax’
• halt the sub-prime mortgage scheme
• double the foreign-buyer tax to 30%”

Let’s add one more….mucking with buyers for close to two decades just turned into mucking with sellers. Realtards now need to work on their spiels to justify lower offers.

Much lower.

#124 maxx on 07.15.17 at 7:48 am

#10 Doug t on 07.14.17 at 6:22 pm

“In the end we leave this world with nothing – live your life the best you can –”

Best advice ever….

I also like “Here’s to those who wish us well, and all the rest can go to…….”

Live lots, love big and get as many adventures in as you can.

What’s left goes to charity.

To my mind, that’s leaving with something.

#125 Raging Ranter on 07.15.17 at 7:54 am

Freedom First, the vasectomy was a good call. When you finally lose your virginity, you won’t need to use a condom. Lucky!

#126 Raging Ranter on 07.15.17 at 7:57 am

@#86 viorelli, we will see how that “nice Polish girl” reacts when she finds out he’s been lying to her for months about what he does for a living. Well, actually we won’t, because that’s a fake story. How the hell does one hide what they do for a living even after sharing an apartment with them? One doesn’t. I call BS on that story.

#127 maxx on 07.15.17 at 8:03 am

I hope that Ken comes out of it stronger. All good wishes to you.

#128 maxx on 07.15.17 at 8:33 am

#30 Danny on 07.14.17 at 6:52 pm

“Garth could you recommend a good “rent or buy calculator ” to give the rent generation a tool to explain to the “buy only generation “that financial invest comes in more ways than just owning brick and mortar….or these days ” off level houses”…

Hope you don’t mind if I jump in…..

Calculator #1: Look ’em in the eye and tell ’em “I love you dearly but pi$$ off”;

Calculator #2: Repeat as necessary – this could take a while;

Calculator #3: Search “rent vs buy calculator” and choose.

#129 re., Jane24 on 07.15.17 at 9:24 am

Truest comment on this blog today is the reminder that we arrive with nothing and leave with nothing. Don’t waste your life accumulating way more than you need. You need to balance more that your stock account. It all stays in this word when you go. Enjoy every day.

……….

Post of The Year

#130 crossbordershopper on 07.15.17 at 9:32 am

DELETED

#131 Foggy on 07.15.17 at 9:39 am

When 50% of marriages end up in divorce, why do 100% of couples want to own a house?

#132 Daisy Mae on 07.15.17 at 9:42 am

“Five summers ago, when dearly departed eflin deity F was trying to tame the housing market….”

after he fired it up.

#133 FLHTK on 07.15.17 at 9:52 am

I agree you have to be on the same page financially if my wife says let’s spend less, that’s what we do….after all she’s the saver and good with her money and I own the harley…. im glad we bought a house within our means.

#134 Ace Goodheart on 07.15.17 at 10:21 am

#121 maxx: could not agree with you more. Why people with good incomes put themselves on the verge of bankruptcy with excessive borrowing particularly to purchase houses they cannot afford is beyond my understanding

#135 Dominoes Lining Up on 07.15.17 at 10:24 am

Big dominoes falling the last few weeks, the biggest in years. The ground is now trembling.

Underlying it all, some more truth about just how weak is the financial situation of so much of the masses.

People like these unfortunates at the whim of temp agencies trapped in precarious work have also gambled big time on “investment” condos in the GTA. Now getting desperate to sell as they see the changes ahead.

https://www.thestar.com/news/gta/2017/07/15/temp-agencies-on-rise-as-province-seeks-to-protect-vulnerable-workers.html

#136 Aaron Sidon on 07.15.17 at 10:37 am

117 Howard on 07.15.17 at 4:5

Most men of value don’t even look at those women.

By value I mean successful, fit, charismatic, come from a good familly, no tattoos, no drugs etc.

Women from other parts of the world want that type of value man and are smarter, fitter, more feminine and overall higher quality themselves.

It fits perfectly.

Thing is, lots of western men don’t know how to be men anymore. So not any western guy can go get a nice South American girl. You have to be of quality yourself, and that means more than having money (which is what we western men often believe).

MF

#137 Gasbag Boomer on 07.15.17 at 10:53 am

I picked a great deal on a Plasma powered flying machine at a garage sale in Shlong Branch this morning.

Thanks for the great deal Smokie! Maybe you could get employment as a used car salesman in Lakeview….

#138 Ole Doberman on 07.15.17 at 10:54 am

Its a sad situation that plays over and over again in today’s world.

The only solution I see to a life that was standard 30-40 years ago is for the man to have a million dollars saved in his bank account before you get married. (gotta learn to swing trade in the stock market)

Then buy the house and have plenty left over in the kitty for emergency money. And of course this will all be in your name – then the wifey will think twice before trying anything or disrespecting you.

Money matters, a lot, more than what people will ever tell you.

Just look at Trump and Melania – he says they haven’t had an argument in 5 years!

#139 crowdedelevatorfartz on 07.15.17 at 11:02 am

@#85 Bitter Bob
“Do not marry any woman born on this continent in the past 50 years.

Want company…get a dog.’

*******
Apparently beastality is legal in your neck of the woods?

#140 Quantum Finance on 07.15.17 at 11:08 am

I was just thinking a few moments ago if quantum theory could apply to the random walk of stock prices. Here, I thought I’d just invented a new branch of finance, but after doing some preliminary research I now see that there’s already a rich body of theory developed years ago. My emotions have gone from elation to dismay.

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

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

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

https://en.m.wikipedia.org/wiki/Black–Scholes_model

“Nihil novi sub sole.” — Eccles. 1:9

#141 crowdedelevatorfartz on 07.15.17 at 11:12 am

#131 Foggy
“When 50% of marriages end up in divorce, why do 100% of couples want to own a house?”
******

Uh, cause after the divorce the “lady of the house” ends up owning it 90% of the time?

Lets just call it what it is ….an “exit dowry” .

#142 45north on 07.15.17 at 11:15 am

Dominoes: how are people keeping up with their property taxes ( in Toronto )?

Viorelli: My oldest son has a friend who is a partner in a law firm, two locations in GVRD (dad’s law firm).

Raging Ranter: in reply to Viorelli: that’s a fake story.

well I bought it.

#143 Ole Doberman on 07.15.17 at 11:17 am

#43 AGuyInVancouver on 07.14.17 at 7:30 pm

“..a house that looks like a garage with a tumour.”

Love it Garth. Welcome to suburbia!
——————————————————-
Totally agree here, people think it’s a great accomplishment to score just another cookie cut house, even the larger ones.

Whatever happened to million dollar homes looking like something different, special, with custom features.

Just look at this beautiful house in Lethbridge, central location, across from a lake. Now this is what I call a house worthy of a million:

http://www.bezooyencontracting.ca/north-parkside/

please take a look, it will take you away to an enchanted land like a fairy tale book

#144 crowdedelevatorfartz on 07.15.17 at 11:18 am

@#132 Daisy Mae
“after he fired it up….”
******

Yep.

Ridiculously lax policies allowing thousands of greaterfools to drink the financial equivalent of purple KoolAid.
I’m sure Harper is sitting back and watching this slow motion disaster unfold with glee.

And Trudeau will have to deal with the results.
I cant wait for the selfies of him outside the Sears pensioner breadlines

#145 MF on 07.15.17 at 11:23 am

I still think this is just a pause in the GTA market, before prices march upward again.

Yes the BoC finally did the right thing and increased the interest rate a puny .25%, but money is still way cheaper than it should be.

Even if we get multiple rate increases, they will probably stop at 1.5% or so…also way lower than where the rate should be.

Still lots of pent up demand, and lots of incentive to
borrow.

MF

#146 TurnerNation on 07.15.17 at 11:28 am

IBD weekend edition says Uptrend has resumed. Index investing is dead in USA – computers shuffling the Dow 30 100 points each day no more. It’s a Schlock Pickers market – for the 7-figure folks and wannabes. VIX depressed.
But India ETFs have broken out big time.

#147 rainclouds on 07.15.17 at 11:35 am

Apparently the BPOE isn’t attracting the “come from aways” as it used to.

Next week the communists take control.
OSFI Stress test in the fall

https://betterdwelling.com/city/vancouver/

The ducks are lining up in Vandelusional

#148 InvestorsFriend on 07.15.17 at 11:45 am

Greed?

Greed is often disparaged on this blog. Are we not all greedy to some extent?

The capitalist system and the free market works in good part because we all strive to get a little more for ourselves. Greed?, I guess that is when someone else strives a little too hard for our liking or gets ahead of us?

Let he without greed cast the first stone.

#149 I thinks I know something on 07.15.17 at 11:50 am

The Toronto market is slowing down a bit. Okay. So what? Prices will not be going down. Not when rates will remain at historic lows (and they will). Not when a massive 100,000 immigrants continue to join the ranks yearly. Not when CMHC continues to subsidize the banks. Ten years from now, houses will be much more expensive than today.

#150 Unnecessary Mark Bashing on 07.15.17 at 11:58 am

Long time reader… seen a lot of Mark bashing over this time, why dogs? … finally compelled to write.

There is no need for cheap shots when you don’t agree with his point of view, his advise, or the premise of his argument. They are articulate, thoughtful, formatted, often quantified, and well explained. It is clear Mark’s posts come from a great depth of experience in the financial markets and he offers other technically inclined blog dogs an interesting perspective or counter view. If Mark’s writing is not at your comprehension level or simply does not interest you, skip it, you are allowed to do that. And surely you don’t need to comment to rest of us that you have done so, sheeesh.

Mark also takes the time and effort to answer questions posed by other dogs in the comments with much care and attention. Do you?

I appreciate how some of the dogs do intelligently debate Mark (Technical Analyst, InvestorsFriend, etc. and perhaps a rare coherent rant from Smoking Man -btw Smokie, its been awhile since we had a FX commentary from you). We are all smarter given the opportunity to read the balanced views and debates from these differing perspectives. Then use your own critical thinking to formulate your own opinion, and share it with the dogs if you wish or keep it to yourself…. needless Mark bashing (or anyone for that matter) may eventually need to a loss of that voice (it did for a time but I’m glad Mark is back). If you think that is a good thing, why are here in this blog? -if not to learn and share your experiences and wisdom. Cheap shot comments come across as if you are compensating for [the lack of] something…

Cheers. Mark, keep it coming dude.

Garth Rules.

#151 For those about to flop... on 07.15.17 at 12:04 pm

Unnecessary Mark Bashing on 07.15.17 at 11:58 am
Long time reader… seen a lot of Mark bashing over this time, why dogs? … finally compelled to write.

There is no need for cheap shots when you don’t agree with his point of view, his advise, or the premise of his argument. They are articulate, thoughtful, formatted, often quantified, and well explained. It is clear Mark’s posts come from a great depth of experience in the financial markets and he offers other technically inclined blog dogs an interesting perspective or counter view. If Mark’s writing is not at your comprehension level or simply does not interest you, skip it, you are allowed to do that. And surely you don’t need to comment to rest of us that you have done so, sheeesh.

Mark also takes the time and effort to answer questions posed by other dogs in the comments with much care and attention. Do you?

I appreciate how some of the dogs do intelligently debate Mark (Technical Analyst, InvestorsFriend, etc. and perhaps a rare coherent rant from Smoking Man -btw Smokie, its been awhile since we had a FX commentary from you). We are all smarter given the opportunity to read the balanced views and debates from these differing perspectives. Then use your own critical thinking to formulate your own opinion, and share it with the dogs if you wish or keep it to yourself…. needless Mark bashing (or anyone for that matter) may eventually need to a loss of that voice (it did for a time but I’m glad Mark is back). If you think that is a good thing, why are here in this blog? -if not to learn and share your experiences and wisdom. Cheap shot comments come across as if you are compensating for [the lack of] something…

Cheers. Mark, keep it coming dude.

Garth Rules.

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

Hey Mark,that’s cool!

I like your new handle…

M43BC

#152 nick on 07.15.17 at 12:19 pm

Cant wait for July mid month numbers from TREB. Hopefully Monday.

#153 Dominoes Lining Up on 07.15.17 at 12:54 pm

45north said:

Dominoes: how are people keeping up with their property taxes ( in Toronto )?

—————————————————-

I’ll be having a summer dinner with some of my friends involved with property taxes in the GTA in early August. I’ll let you know what I hear. (Last I heard in June there was still a growing problem of accounts going to collections and property owners in arrears)

#154 cephalopods on 07.15.17 at 1:06 pm

To #103 Desi

Tikka Masala is fake Indian food. Created by Bangladeshi chefs in Glasgow in the 60s in order to have a more saleable dish suited for the British palate for their restaurant.

#155 InvestorsFriend on 07.15.17 at 1:20 pm

Index Investing Will Never Die

#146 TurnerNation on 07.15.17 at 11:28 am
IBD weekend edition says Uptrend has resumed. Index investing is dead in USA – computers shuffling the Dow 30 100 points each day no more. It’s a Schlock Pickers market – for the 7-figure folks and wannabes. VIX depressed.
But India ETFs have broken out big time.

****************************************
Imagine one huge stock index that covers all stocks market cap weighted. Then divide all investors into two groups: 1: passive index investors 2: All others

ALL of the passive index investors earn precisely the index lass costs, definition. Mathematically the average of all others is also the index less (their higher) costs.

In the All other (the Active group) many are below the index and many are above.

The above math works at all times over all time periods in every market. Any claim of active investors as a population beating the index is based on comparing to an index that does not reflect all stocks – capitalization weighted.

I believe it was William Sharpe (he of the CAPM invention) that first articulated this. Buffett has articulated it in his annual letters and annual meeting in the past few years.

Anyone without some kind of edge or superior approach is better off to index. AND to go for lowest costs such as ETFs but they may also logically use a low cost adviser who helps with asset allocation and other matters. Those of us who think they have an edge can go Active (stock picking) and try to beat the market.

#156 Leo Trollstoy on 07.15.17 at 1:20 pm

#150 Unnecessary Mark Bashing on 07.15.17 at 11:58 am
There is no need for cheap shots when you don’t agree with his point of view, his advise, or the premise of his argument. They are articulate, thoughtful, formatted, often quantified, and well explained.

And wrong. Don’t forget wrong.

Mark also takes the time and effort to answer questions posed by other dogs in the comments with much care and attention. Do you?

His posts only fool the financially illiterate and novices. Unlike Garth, the commentary he provides is dangerous and wrong. Misleading newbs isn’t something to be praised unless you can’t tell the difference yourself.

#157 Leo Trollstoy on 07.15.17 at 1:22 pm

#151 For those about to flop… on 07.15.17 at 12:04 pm

Hey Mark,that’s cool!

I like your new handle…

Lol

#158 InvestorsFriend on 07.15.17 at 1:23 pm

On Greed

I also believe that almost all of us are generous at times. Some people amass wealth in what is perhaps a greedy fashion but then give it away ultimately.

We are all also capable of being generous in our views and comments about others but most seem capable of being very mean-spirited and venomous at times (especially when anonymous).

#159 InvestorsFriend on 07.15.17 at 1:46 pm

Index Investing Math

If you want see if active investors can beat passive on the S&P 500 (they cannot on average). Then you need to compare all active portfolios that pick ONLY from the S&P 500. In that case the average of all such active portfolios will precisely match the S&P 500 index before costs and trail after. About half the active will beat and half trail (before costs – greater than half trail after costs). This math is precise and is true over any and all time periods and in any and all market conditions. Meanwhile all passive S&P 500 indexers of course tie the index before costs. (In the case of the DOW it would not work as well because that index is not market cap weighted)

To really compare active stock pickers against passive requires the broadest of indexes to insure that none of the active are investing outside the sort of global population of stocks that the index is looking at.

Keep in mind that an index is almost always (the DOW is an exception) calculated as the average of all stocks market cap weighted. Therefore the population of investors makes the index on average (before costs) by definition. Certainly the passive group does, all of them. Mathematically the remainder (the active) must also on average (but not each individual make the average.

#160 Dee on 07.15.17 at 1:54 pm

the ‘rekt’ posts are my absolute faves right now

#161 Dee on 07.15.17 at 2:00 pm

The Toronto market is slowing down a bit. Okay. So what? Prices will not be going down. Not when rates will remain at historic lows (and they will). Not when a massive 100,000 immigrants continue to join the ranks yearly. Not when CMHC continues to subsidize the banks. Ten years from now, houses will be much more expensive than today.

——————————-

slow down a bit? I’m not seeing new sold signs anywhere. I’ve been driving around the city the past few weeks. All the places that were for sale a month and a half ago are still for sale. Immigrants need an income. Just because the number of people increases doesn’t mean the price increases. There’s ten times more people in the U.S than in Canada, so I guess prices should be ten times higher? Hello average U.S house price of $5,000,000. You’re just an insider who’s dependant on an up market

#162 For those about to flop... on 07.15.17 at 2:12 pm

Pink Lemonade stand in Coquitlam.

Here’s yet another example of someone trying to get out of the market with a bit of dignity by trying to pass the closing costs on to the next well educated buyer.

Picked up for 1.33 in April 2016, it has a lower assessment that clocked in at 1.28 and now that it is July all the properties in Vancouver will be currently in the process of being re-assessed for 2017.

Most likely if the present trend continues there will be a lot of sour faces around the Christmas tree.

Maybe the discussion around the family table during the holidays might not include real estate this year…

M43BC

1315 SOBALL Street, Coquitlam

Mar 1:$1,458,000
Jul 14: $1,428,800
Change: – 29200.00 -2%

https://www.zolo.ca/index.php?sarea=1315%20Soball%20Street,%20Coquitlam&filter=1

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

#163 saskatoon on 07.15.17 at 2:13 pm

#84 Smoking Man

next few decades?

more like forever.

#164 jess on 07.15.17 at 2:13 pm

Prepared Remarks of Richard Cordray
Director, Consumer Financial Protection Bureau
Arbitration Rule Announcement
Washington, D.C.
July 10, 2017

Thank you for joining us on this call. Today, we are announcing a final rule that prevents financial companies from using mandatory arbitration clauses to deny groups of consumers their day in court. A cherished tenet of our justice system is that no one, no matter how big or how powerful, should escape accountability if they break the law. But right now, many contracts for consumer financial products like bank accounts and credit cards come with a mandatory arbitration clause that makes it virtually impossible for people to sue the company as a group if things go wrong. On paper, these clauses simply say that either party can opt to have disputes resolved by private individuals known as arbitrators rather than by the court system. In practice, companies use these clauses to bar groups of consumers from joining together to seek justice by vindicating their legal rights…..”
read more @

https://www.cuinsight.com/press-release/prepared-remarks-richard-cordray-director-consumer-financial-protection-bureau-23

#165 For those about to flop... on 07.15.17 at 2:28 pm

Pink Lemonade stand in Vancouver.

This place was featured once before on Canada Day ,when I pointed the amount of owners that were trying to cash out at the same time and having difficulty on the same street.Mathers Ave in West Vancouver was featured as well, which I saw another house with a reduction on this street this morning but was not a recent buy and so they should make out like bandits.

Anyway, these guys decided to disrespect the boss of this blog by Brazilian waxing the price on his namesake street and has now moved from Possible Pinkie to a Pink Lemonade stand.

Assessed at 2.53 and signing on for the same number the one thing they have in their favour is that it is a bigger block but for developers there are probably easier pickings in better neighbourhoods…

M43BC

2995 Turner Street, Vancouver

Feb 1:$2,788,000
Jul 12: $2,700,000
Change: – 88000.00 -3%

https://www.zolo.ca/index.php?sarea=2995%20Turner%20Street,%20Vancouver&filter=1

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

#166 re., Unnecessary Mark Bashing on 07.15.17 at 2:35 pm

agreed.

It speaks to the folk that bash. Juvenile .Mark spends too much time in their heads, ‘rent free’.

Grow up boyz

#167 Ken on 07.15.17 at 3:00 pm

DELETED

#168 Ace Goodheart on 07.15.17 at 3:58 pm

#104 45north:

You have no idea. This gazebo would put Oprah to shame. It was built of imported stone from Italy. It had copper gutters and down spouts. Clay tile roof imported once again. Floors were a very expensive tile. Had a full wet bar, commercial kitchen, commercial barbeque tv stereo you name it they had it.

Unfortunately it partially collapsed when the wind lifted up the roof a bit. But what a gazebo. Never seen anything like it.

#169 Scott Free on 07.16.17 at 8:31 am

Short time lurker, first time poster. Reading this blog as we listed the week the market crashed kept me up at night – house sold with one low offer. Fortunately we had 3 other houses to rely on. We paid off our Helocs as suggested – now considering another house sale – condensing down to 2 side by side houses with 5 rental incomes and 1 unit for ourselves feels like we can weather upcoming financial earthslides…we hope. Need to get some real sleep one day – trouble is, houses seem to be a bit of a Canadian addiction. Any noob like myself can jump in – actual understanding of investments and portfolios requires some perseverence & research, not just signing on a dotted line. P.S. we are in Hammertown where prices were ridiculously low – we bought everything we could – its working out.

#170 AGuyInVancouver on 07.16.17 at 2:52 pm

In light of Ken’s sad tale maybe a puppy pic isn’t appropriate. How about one of a kitty with a whip?

#171 Felix on 07.16.17 at 2:58 pm

Great pic, Garth.

All dogs should be imprisoned, I agree.

It would also make things easier on their tepid intelligence if they don’t have too much stimulation, so a dark cell should be fine. As long as they have other butts to nuzzle, they will be fine. And then lick their owners’ faces of course. Classy.

Meanwhile, more evidence of the superiority of cats and their human acolytes:

http://time.com/2798972/studies-show-cat-people-are-smarter-than-dog-people/