Almost there

Forget all that punitive taxation trash talk, the gender-based fiscal policy and the social justice feminists running the federal government. You can even set aside for a minute chaos in the White House, the fact Kim Jung Un can now lob a missile into Toronto (north of Bloor, one hopes) and all the socialists stretching from Saskatoon to the sea. More importantly, it’s time for an update on the one thing currently gripping the nation:

GTA Housing Death Watch.

 By Tuesday night local realtors had yet to cough up the July stats, leaving millions wondering if they were solvent, or closer to slipping under water. Remember that a majority of million-dollar-house buyers in that delusional metropolis last year had debt-to-income ratios of 450% or more. About on par with Romania. But better than Ontario.

Anyway, GreaterFool has the goods for you – at least the relevant parts (thanks to listing.ca). Turns out last month was basically an unmitigated disaster. The median detached selling price in the GTA plunged 10.6%, for a one-month loss of $115,000. Ouch.

The median (not average) sale price in July was $960,000, compared with $1.275 million in April. That makes the 90-day decline a stunning 24.7%. By way of comparison it took a couple of years for real estate to lose 31% of its value during the last real estate crash in the early 1990s (and then 14 years to recover). Another month of this ugliness, and we will have a record on our hands – the quickest unwinding of a housing market in Canadian history. Maybe human history.

 “The bubble is unfolding faster than expected,” says TO broker Alex Prikhodko. “Keep in mind that these numbers are calculated a median averages, which means I’m certain that the mean numbers are going to be even uglier.

Speaking of ugly, the gutters are flowing red in the northern exburbs where only months ago the locals were chortling about their fecund equity. Now, it’s a rout. In Richmond Hill median selling prices declined by a hundred grand in July, and are off 23.2% from the spring peak. In poor Vaughan houses that fetched $915,000 in March are now going for $750,000. In Newmarket sellers are now getting 20.7% less with the median price dropping from $1.125 million to $850,000. And even in tony Oakville, 16-Mile Creek is tinged crimson with a 21% drop as days-on-market have tripled, with a $300,000 reduction in median detached values.

 Kulvinder was thinking of ditching his two-bedder Toronto condo to go and grab an offshore job. Before he decided otherwise he contacted a local realtor to get a realistic idea of market value. After all, a unit almost identical to his in the same building had recently sold. “So me, the missus and pooch were interested in what it would fetch,” he says.

Said the agent he contacted: “Just wanted to let you know that suite 426, your neighbour, ended up selling for $465,000. That’s a significant drop from where it was originally listed at ($559,000). They dropped the price drastically twice, until they finally had it listed for $479,000, and then sold for $465,000.”

“Hopefully,” says Kulvinder – who is staying put, “the numbers are useful in illustrating how much the market is collapsing in the downtown condo market.” Now we know. Pray for the kids still lining up to buy in the shiny new glass towers.

 Given the sales-and-price collapse now unfolding in the nation’s (by far) largest real estate market, when will TPTB recognize a correction is maybe turning into a crash? Even without the two, three or five more Bank of Canada increases that markets are expecting over the next two years?

Well, we may be getting there. RBC is openly moaning about the affordability crisis in both Toronto and Vancouver, where average families are struggling with real estate as never before. National Bank just reported Canada has the least affordable housing market in nine years – even with mortgage rates very close to their all-time low-water mark. Nationally it takes 40 months to save for a down payment, if you can put away 10% of your salary (fat chance). In YVR, it takes 128 months. In Victoria, 114. In the GTA, 106.

An here’s the Bank Credit Analyst, which is a serious publication most deplorables have never heard of. But it’s watching you. Higher interest rates, it says, will be the catalyst for a downturn in consumer spending, along with “considerable damage” to the economy as housing unravels. If rates increase by a measly 1.5%, the over-borrowed, debt-pickled masses will face a “day of reckoning.”

Wonder who they will blame?

227 comments ↓

#1 ben on 08.01.17 at 5:57 pm

first

#2 FOUR FINGERS WATSON on 08.01.17 at 6:00 pm

This man will save us. Our own social justice warrior. He won’t let bad things happen.Turdo is the new Barrack Obama. He is all OURS and he’s gonna be around for a loooong time. No term limits here thank goodness. Are you moist yet? The Libs are the Canuck version of the US Dems with an almost identical playbook. Identity politics, play the gender card, the immigrant card, the environmental card, the youth card, the pot card, and give away free stuff. The objective is to maintain a permanent dependent underclass by constantly making them feel like victims and providing them free [email protected] And people with debt levels up to their eyeballs will re elect them forever! And he even has hair for cryin’ out loud ! Time to wake up and smell the beaver folks, he’s gonna be around for a loooong time. What is the record for year served as PM? Anyone?

#3 Jessica Lauren Annis, BURPl, MCIP, RPP on 08.01.17 at 6:01 pm

The blame should be laid at the doorstop of land use planners. As predicted 10 years ago by Wendell Cox: (Land use) Planners denying reality. https://www.thestar.com/news/2007/09/01/planners_denying_reality.html

#4 Joe2.0 on 08.01.17 at 6:05 pm

Moaning about affordability.
What a crock.
RBC is running out of customers and needs to pitch a new “gotta buy now or else angle”
The banks could care less about houses costing to much.
They set the rates and then up the rates.
It’s called a monopoly.
What a farce.

#5 Victoria Real Estate Update on 08.01.17 at 6:05 pm

IT’S ALWAYS DIFFERENT… UNTIL IT ISN’T

EARLY 2006, SAN FRANCISCO:

Realtors were telling potential buyers that house prices would continue to rise and never fall.

Their reason: for years bubble worrywarts had predicted that house prices would fall but had been wrong. On the other hand, realtors had predicted that prices would continue to rise and had been right. To realtors this proved that they would always be right and that the “doomers” would always be wrong.

Besides, housing busts were for other countries. Not the USA. Americans were rich. And everybody wanted to live in San Francisco…

Then house prices in San Francisco fell 45% in 3 years.

EARLY 2017, TORONTO:

Realtors were telling potential buyers that house prices would continue to rise and never fall.

Their reason: bubble worrywarts, who had predicted that prices would fall, had been wrong and realtors, who had predicted that prices would continue to rise, had been right. Therefore, they claimed, realtors knew what they were talking about. The “doomers” were just being negative like always because they didn’t “own their own homes” (love that phrase).

Besides, housing busts were for other countries, like the US, Ireland, Italy, Spain, etc. Not Canada. Canadians were rich. And everybody wanted to live in Toronto…

Then detached house prices in the GTA fell more than 20% in 3 months.

RIGHT NOW, VICTORIA:

Realtors are telling potential buyers that house prices will continue to rise and never fall.

Their reason: bubble worrywarts had been wrong while realtors had been right. This, they claim, means that realtors will always be right. Their prediction: higher prices this year, next year and every year.

Besides, housing busts are for other countries, like the US, Ireland, Italy, Spain, etc. Not Canada. Canadians are rich. And everybody wants to live in Victoria…

THOSE WHO WAIT FOR LOWER PRICES WILL BE WRONG UNTIL THEY ARE PROVEN RIGHT BY MR. MARKET

Those who wait for lower house prices when a bubble exists always get the opportunity to buy at price levels that make sense based on fundamentals and the long-term mean of their city.

Unfortunately until that becomes reality, they have to listen to how they’ve been wrong and how those who bought had been right for what might seem like a hundred years.

With housing bubbles, Mr. Market always proves (every time) that it’s well worth waiting for lower prices.

Those who are waiting for lower prices will not become victims of the brutal financial destruction that the inevitable housing bust brings to those with mortgages.

Instead, those who don’t “own their own homes” with a mortgage during the bust will naturally be rewarded with the opportunity to buy when it makes sense and enjoy the potential for appreciating home values once Mr. Market is finished with the bust.

The bust always changes the smug glow of self-congratulation on the faces of bubble buyers into a pale, helpless look as financial dreams are wiped away and financial nightmares are made into reality.

#6 I thinks I know something on 08.01.17 at 6:06 pm

It will be a short lived correction for sure. Ten years from now GTA houses will cost a lot more.

#7 Ex-Cowtown on 08.01.17 at 6:07 pm

GTA Housing Death Watch …. hmmmm…. kind of like watching the Leafs go for the Stanley Cup.

#8 Horny on 08.01.17 at 6:07 pm

Hi Garth! Rock on!

#9 Suede on 08.01.17 at 6:11 pm

Rising rates mean the economy is rocking…

Unless the dollar is being forced higher because the USA is telling us to raise rates.

#10 Kootenay Hippie on 08.01.17 at 6:11 pm

Wow that is ugly. I wonder if the contagion will spread to the entire country.

#11 Angry Migtow on 08.01.17 at 6:14 pm

TrudeauJr.’s Canada is one big joke that I can’t believe that so-called gender equality crusaders Trudeau and Morneau believe that taxing one gender (men) will offset the losses in tax collections from inflated real estate assessments.

Factor into that exporters will bear the brunt of declining sales because of the current state of the Canadian dollar, and Trudeau and his pinko comrades will struggle to find alternative sources of stealing tax revenue from Canadians.

#12 Bill Grable on 08.01.17 at 6:14 pm

“When people have nothing left to lose, they lose it….”

The day of reckoning that you have been warning us about is going to be robust and dreadful.

Having lunch with an MP, on Wednesday, and I am looking forward to hearing what P2 has to say, or feels about, housing in this country…(as if).

Our kids are having a heck of a time trying to find a rental, in YVR.

It is INSANE here.

I wonder how retail is doing?

#13 Mike on 08.01.17 at 6:14 pm

.
CHMC says it is all temporary in GTA, just like GVA.

Oh, rich Canadians. Pay what the realtor says, even more.

Still record prices in recession hit Edmonton. Care to comment? Up and above.

#14 common sense on 08.01.17 at 6:16 pm

If rates increase by a measly .50% there will be a day of reckoning…

Stating 1.5% will be a country wide slaughter for 80% of the population.

#15 young & foolish on 08.01.17 at 6:22 pm

In the age of social media information travels fast and far. Everybody is worried they will pay too much all together, at once. Sort of like the stock markets. Prices drop quickly. But will this trend last? Or will people rush back into property when the next global equity market turns toxic?

#16 Millenials on 08.01.17 at 6:23 pm

Now that we have the housing Armageddon when will we see the economic implosion that you predicted?

I didn’t. — Garth

#17 nick on 08.01.17 at 6:24 pm

Just ran an active listing report for MLS for Vaughan. Still crazy to see townhouses going for ~750K. Earlier in the year they were going for 800K+, so i guess its trending in the right direction.

Hopefully the trend continues.

#18 Goldie on 08.01.17 at 6:25 pm

“Wonder who they will blame?”

Anybody but themselves.

#19 nick on 08.01.17 at 6:25 pm

I should clarify that recent solds in last 2 weeks had towns going for 750k.

#20 Bud on 08.01.17 at 6:27 pm

Almost as bad as watching the Flames commit millions to the slowest defense in the NHL.

#21 Tony the Gino on 08.01.17 at 6:31 pm

Ok can someone find me a house at this discount? I put in multiple offers and everything sold over asking or got relisted higher or taken off market. Who’s selling their house for 20% less than April? I WILL BUY IT NOW!

#22 piet on 08.01.17 at 6:34 pm

#4 Joe2.0 on 08.01.17 at 6:05 pm

“could care less”

?

#23 Ben on 08.01.17 at 6:35 pm

Does anyone know what the YoY numbers are for July?

#24 Ned Flanders on 08.01.17 at 6:36 pm

Thank Christ! No more having to sit through boring stories about people’s renos at dinner parties.

#25 Linda on 08.01.17 at 6:37 pm

Still love the skull & crossbones:) About the price drop – this will affect some, but mainly it only matters if 1) you bought at peak; 2) you financed most of it, so now your equity sucks; 3) you ‘have’ to sell & the gains you hoped to achieve have vanished like so many snowflakes under the hot summer sun; 4) your level of indebtedness is such that the rising interest rates will crush you like a bug. IF however you did not purchase at peak, don’t ‘have’ to sell, are not carrying severe levels of debt etc. & intend to stay put for many years to come, this unwinding may not affect you that much. The main issue for the rest of us will be how the economy is affected by this. For those of us who are debt free & who may no longer need to be a member of the rat race, this could turn out to be quite the opportunity.

#26 Victor V on 08.01.17 at 6:37 pm

#6 I thinks I know something on 08.01.17 at 6:06 pm

It will be a short lived correction for sure. Ten years from now GTA houses will cost a lot more.

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

Ten years also offers ample time to rebuild one’s credit, after bankruptcy.

https://trends.google.com/trends/explore?date=today%205-y&geo=CA&q=Bankruptcy

#27 TheDood on 08.01.17 at 6:41 pm

#6 I thinks I know something on 08.01.17 at 6:06 pm

It will be a short lived correction for sure. Ten years from now GTA houses will cost a lot more.
___________________________________________

Given the “Lemming” like nature of Cdn citizens, wouldn’t be surprised.

I have to admit, I’m kind of cheering for it to happen. Would love to see tens of thousands of minimum wage dumbos lining up to pay 5 mil for a tear down in YVR or GTA. Can you imagine the twisted metal like destruction to the Cdn economy as a whole?

#28 long time lurker, first time poster... on 08.01.17 at 6:49 pm

I have an ‘alternate’ interpretation of the data from your chart:

According to the monthly change % numbers in the table a $1,000,000 house purchased on Jan 1, 2017 and after the brutal last 3 months is now worth… $1,010,651.

I don’t measure the performance of my portfolio based on the peak value because volatility (however hard I try to minimize it) is part of the deal.

Why do we hold real estate to a different standard?

#29 Millenials on 08.01.17 at 6:50 pm

Now that we have the housing Armageddon when will we see the economic implosion that you predicted?

I didn’t. — Garth

Really? What about all of those posts talking about how much of Canadian GDP is from housing and as real estate tanks so too will the economy?

I have never said the economy is in peril. It isn’t. — Garth

#30 Mark on 08.01.17 at 6:51 pm

“Even without the two, three or five more Bank of Canada increases that markets are expecting over the next two years?”

Does anyone still believe that despite the crashing RE market, deflation which appears to be accelerating, and the Canadian dollar that made a multi-sigma move over the past month or two, that there’s any chance of the BoC increasing policy rates?

If anything, my earlier comments, that the BoC made a giant mistake and that cuts were desperately needed, have been shown to be even more relevant post-hike than ever before.

Still record prices in recession hit Edmonton. Care to comment?

Edmonton prices peaked in 2007. Calgary in 2011. GTA/GVR in 2013, along with many of the smaller centers.

The blame should be laid at the doorstop of land use planners.

Why? Rents are quite affordable in the big Canadian cities, so there’s no reason to blame the land use planners. This is purely a speculative financial bubble. Kind of like valuing proven-to-be-worthless Nortel equity at several hundred billion dollars, for example.

#31 Wait There on 08.01.17 at 6:51 pm

Just across from where I sit now. House sold in May. Last three weeks, neighbors have been cleaning up and appeared to be leaving. No one has been living there for the last week.
Today, owner shows up. Most bets would have say, it should be closing today.
We shall see if buyer has reneged.
In Richmond Hill.

#32 Howard on 08.01.17 at 6:51 pm

Wonder why York Region is crashing more than the other burbs.

I’d rather live in Thornhill or Richmond Hill than Mississauga (shudder).

#33 young & foolish on 08.01.17 at 6:52 pm

“The main issue for the rest of us will be how the economy is affected by this. For those of us who are debt free & who may no longer need to be a member of the rat race, this could turn out to be quite the opportunity.”

Well indebted people who take a “wealth effect” hit will be in no mood to splurge (consumption going negative).

Opportunity to sell at a lower price? Or are you going to jump in and put your cash into a stagnating asset?

#34 earthboundmisfit on 08.01.17 at 6:55 pm

@2 four finger watson
W. L. Mackenzie King – 21 and a half years give or take a few days.

#35 Reximus on 08.01.17 at 6:56 pm

Alex Prikhodko,,,superstar predictor…lol

#36 Howard on 08.01.17 at 6:57 pm

#13 Mike on 08.01.17 at 6:14 pm
.
CHMC says it is all temporary in GTA, just like GVA.

Oh, rich Canadians. Pay what the realtor says, even more.

Still record prices in recession hit Edmonton. Care to comment? Up and above.

——————————–

I think you’ve asked this question numerous times.

Edmonton was never in a housing bubble and its ratio of average income to house price isn’t generally unaffordable (though not cheap), therefore it won’t experience much of a correction. Being the provincial capital with lots of public sector work, it is somewhat insulated from the oil rout impacting the rest of the province.

#37 Timmy on 08.01.17 at 7:02 pm

The question that should be asked is no how much prices have dropped but: would you pay $479,000 for a tiny cookie cutter box in the sky on a noisy street with $400/ month maintenance fees? If not then doesn’t this market have much further to fall? Seriously, I’ve seen bungalows priced at over 600K in Calgary? The land locked city which is a one horse town hitched to a resource that is undergoing a massive structural change and continually declining. Prices seem to be way out of whack in many parts of Canada.

#38 BlogDog123 on 08.01.17 at 7:03 pm

Love those skull and bones icons.
Garth has written for so many years “the crash is coming, the crash is coming.” His followers were getting weary waiting for his prognostications to come true.

#39 Howard on 08.01.17 at 7:09 pm

This one’s for Happy Housing Crash Everyone!

“A nation of realtors in Canada is bracing for the end of the boom”

http://business.financialpost.com/real-estate/rpt-analysis-in-canada-a-nation-of-realtors-braces-for-the-end-of-the-boom/wcm/17da189e-d81f-4618-bfe1-41351ba2fbed

Realtors’ ranks in Canada’s largest city and hottest housing market have surged 77 per cent since 2008 to more than 48,000. By comparison, Chicago has 13,500.

#40 crowdedelevatorfartz on 08.01.17 at 7:11 pm

@#6 I yam what I yam
“It will be a short lived correction for sure. Ten years from now GTA houses will cost a lot more.”
******
Yo Popeye.
Switch back to smoking spinach the cheeba in your pipe has affected your long term deductive powers of reasoning.

#41 FOUR FINGERS WATSON on 08.01.17 at 7:14 pm

…….and stop worrying about lost equity fer Cryin’ out Loud. Turdo and Morno and Libo’s gonna take care of that. Garth forgo to read the page that mentioned the ” Home Owners Rescue Program “. HORP for short. Under the auspices of HORP the government will replace any lost equity that occurs during any little downturn. Cuz an equity loss would be totally unfair. Funding for HORP will provided through the new Blog Tax. And since u always wanted a ” Flat Tax ” it will be a flat 20% of your net income. And all u cheapskates that come here and read for free will be fined…I mean taxed…at a the rate of a buck a visit. Don’t worry, we will find a way…….

#42 Scott Slavicz on 08.01.17 at 7:20 pm

What is with bond yields today. They fell like a stone. Around 10 basis points from the 2 year to the 30 year.

The Canada 30 year is now 2.38% down from 2.48% in just one day. The 10 year and 5 years are down to 1.95%, 1.56%.

I thought interest rates were supposed to go higher and stay higher. It looks like just during what happened when Trump go elected in November-2016, the Canada 30 year Canada hit a high of 2.46%.

It seems that anything near 2.5% on the 30 year Canada bond and down it goes again.

#43 Happy Housing Crash Everyone! on 08.01.17 at 7:21 pm

You realtors just lost buyers $100000.00 in 31 days.You idiots aren’t qualified to give any Advise. You may not be educated enough to ask ” would you like fries with that?” . Oh it will get better in September …some how? but you cant say what that will be. There is a handful of honest qualified realtors who I hope survive the housing crash. The rest of you i hope suffer. Good job Garth finding the true . Happy Housing Crash Everyone!

#44 EB on 08.01.17 at 7:21 pm

#26 Victor V – it’s an interesting trend and searches are higher all over Canada now than they were at the peak of the financial crisis. All the same, it seems like the NWT is by far the trend leader. Why is everyone going bankrupt in Yellowknife?

#45 Fish on 08.01.17 at 7:24 pm

Don’t worry about the condo s sitting, or anything else, once the self driving cars are more main stream they will take the robots to work, then back to the condo for r and r

#46 Damifino on 08.01.17 at 7:27 pm

#246 InvestorsFriend on 08.01.17 at 5:15 pm

That must be sarcasm since the sacrifice of running for MP let alone PM is obvious.
—————————————

OK, I’ll modify my statement just for you.

Justin Trudeau became the leader of the Liberal Party of Canada for exactly one reason: Pierre Trudeau.

Not one other candidate was given a second of serious consideration once he agreed to his own anointment as leader of the natural governing party of Canada.

I suppose the millennial vote took it from there. It gave them a reason to go to the polls.

And like I said, the mess he’s making can’t possibly be fixed until 2019. Possibly, but not likely.

Yep, I’ll probably just have to live with it a long time. My Dad couldn’t stand T2’s father but he had to tolerate him for many years. It didn’t warm his heart to know Pierre was bombing around Montreal on his motorcycle while he was slogging through the mud under enemy fire in Holland.

Of course, we can’t visit the sins of the father on the son can we? Still, thing about what the comandante did for education in Cuba kind of bugged me. Kind of like saying der fuhrer was underrated as a painter.

#47 TortyPapa on 08.01.17 at 7:29 pm

On Zolo Vancouver overall market corrected about 12% this month and about 15% this quarter. I am wondering why people are still adamant about things not correcting? Where are they getting their facts? Am I missing something?

#48 Happy Housing Crash Everyone! on 08.01.17 at 7:33 pm

Tony the REALTOR. I don’t know if you are being an idiot on purpose or you are just a shyster realtor who lies like a dirty shysters? Prices arw CRASHING. I’m spreading the word.

#49 Shawn on 08.01.17 at 7:35 pm

If home prices are already down 25% & this may only be the beginning & real estate accounts for 20% of Canada’s GDP in total, how can this not cause a recession?

#50 Shawn on 08.01.17 at 7:39 pm

The early 80s and 90s real estate corrections were accompanied by recessions. Then, the recession caused the real estate correction. Will the real estate correction cause a recession this time around (while the US stays out of one)?

#51 Raging Ranter BA MBA MA M.Sc. Ph.D CGA CFA MDNA LSD PCP on 08.01.17 at 7:39 pm

Hey Jessica Lauren Annis, those professional designations are really impressive, but the same land use regulations have been in place for a decade now. It isn’t land use regulations that are suddenly causing the market to keel over. And by the way, a severe housing correction is exactly what the doctor ordered. It is not something that needs to be fixed through changes in regulations. House prices MUST fall. They WILL fall. A lot.

#52 Oakville Rocks! on 08.01.17 at 7:41 pm

I am sure if Kim Jung Un ever did launch a missile at Toronto, South of Bloor, you would be the first to report that he was unfairly targeting doctors, lawyers and financial advisers. (teasing of course) Keep up the great work Garth.

#53 Shortymac on 08.01.17 at 7:42 pm

Crash baby crash, then my husband and I can afford a house in the next year-ish.

At this point, is it reasonable to expect a 50% price drop, I haven’t seen anything like this.

#54 oncebittwiceshy on 08.01.17 at 7:44 pm

>>>>>>#21 Tony the Gino on 08.01.17 at 6:31 pm
Ok can someone find me a house at this discount? I put in multiple offers and everything sold over asking or got relisted higher or taken off market. Who’s selling their house for 20% less than April? I WILL BUY IT NOW!<<<<<<<<<<<<<

Gee, I hope you have a lot of money Tony. Go to Realtor.ca. There are currently 288 homes for sale in the Toronto area under $950,000. If you don't mind some of the suburbs, get an investment group together as there are over 3000 homes available that you will buy right away.

In a somewhat stark contrast there are only about 1100 single family homes for sale under $950,000 between Vancouver and Abbotsford. Mind you there are almost 100 SFD homes for sale under $600,000 in the same area.

#55 oncebittwiceshy on 08.01.17 at 7:55 pm

Timmy: “Seriously, I’ve seen bungalows priced at over 600K in Calgary?”

…. and they will be sitting there for a long time Timmy when there are just about 800 single family homes in the Calgary area for under $500,000

Seriously, why don’t our story tellers bother looking at realtor.ca before they comment here.

#56 Franc on 08.01.17 at 7:56 pm

It’s about time that real estate commissions are lowered. It is completely crazy to pay 4 or 5 percent commission on the sale of a house. Real estate agents many of them are duds and because of house crazy people Agents benefit and take advantage and even slime their way into money. It is time to stop paying these agents that much money.

#57 MF on 08.01.17 at 7:59 pm

Is it really a such a big correction when the average house is still slightly over a million?

Nope.

As I have said before, no one I know from my GTA house horny friends/co workers is talking about a reduction in prices. Everyone still talks about how unaffordable the market is and wants to buy.

Demand is still strong and the economy is (if you believe it) doing well.

It’s a good time to buy. Wish I could.

MF

#58 VanMan on 08.01.17 at 7:59 pm

Never mind the outrageous real estate prices.

I’ve been living downtown YVR for over 15 years… I cant believe how packed the pubs, bars, restaurants, shops, etc. are on a consistent and daily basis these days. And the clothes too…everyone is dressing and looking so good. Salons are packed, nail bars are full, health clubs, yoga studios, class pass, etc… all jammed and packed.

The downtown core is growing busier by the day and everyone is spending. Try to go to any event and it is packed – concerts, festivals, sporting events (at least ones that matter – sorry BC Lions), galleries, etc. are lined up out the door. Ferrari’s and Lambo’s race by and I barely notice anymore… not to mention the Benz’s, Maserati’s, etc. And these are not the old grey hairs… I’m talking kids. Where is the cash coming from?

Downtown units are renting and prices continue to escalate. At some point the credit has to max…yet this party continues. Where are the youth getting their cash? Is it kids of wealthy immigrants? Is it maxed out credit card after maxed out credit card? Is it high paying tech jobs? Is it budding young entrepreneurs? Is it million dollar Instagram Lifestyle bloggers? Where is the cash coming from?

This is a legitimate question!

#59 oncebittwiceshy on 08.01.17 at 8:00 pm

Mike: “Still record prices in recession hit Edmonton. Care to comment? Up and above.”

No, seriously, look at Realtor.ca. There are currently 466 single family homes for sale in the Edmonton area for under $300,000.

Perhaps you should get together with Tony and buy up the city. Sheesh.

#60 Happy Housing Crash Everyone! on 08.01.17 at 8:01 pm

#39 Howard

Many of them will NEVER work in the industry again. Many may never work again . Easy money for doing nothing and then having to go out and work for nothing again? They are ruined. Happy Housing Crash Everyone !

#61 Alan on 08.01.17 at 8:03 pm

This millennial (?) will point the finger at HGTV and all those people who believe that real estate is an asset that will go up forever. It’s a freaking house. People live there. It is not a gold mine nor a diamond mine. Why this is such a foreign concept to people, boggles my mind. I’ve been wary of the RE market because of how emotional people get. It seems to me that RE is an illusion of stability and overly unrealistic optimism.

#62 Lulu on 08.01.17 at 8:03 pm

ouch… oucH….ouCH….oUCH…..OUCH!!!!!!!!!

Just looking at the number make me feel very painful and not sure how long i can withstand the pain…. ((((((((OUCH))))))))!

#63 Happy Housing Crash Everyone! on 08.01.17 at 8:05 pm

All those idiot realtors who said prices will be sticky on the way down?What sticky? when housing is in a housing bubble backed by mortgage fraud. than Prices will and are crashing so hard and this is just the beginning

#64 AB Boxster on 08.01.17 at 8:10 pm


I have never said the economy is in peril. It isn’t. — Garth

—————————-
But isn’t the fact that Canada’s housing sector has been the only thing keeping Canada’s economy going, really the point?
http://www.huffingtonpost.ca/2017/04/28/housing-canada-economy-gdp-february-2017_n_16310158.html

Energy prices go down and Canada’s economy tanks for the last 2 years.

Housing starts to stumble badly and this will have no impact on the Canadian economy?

Don’t make sense.

#65 acdel on 08.01.17 at 8:21 pm

Well, it is what it is! A re-balance is what is needed.

It has happened countless times before but humanity is too stupid to look and learn from the past; so, suffer as others have in the past sheep! Bahhhh!!

#66 toronto1 on 08.01.17 at 8:22 pm

This is only the start- my guess is that a lot of people are waiting to see what goes down in sept and then another flood of listings hits the market.

what is going to make this downturn huge is going to be the amount of listings that will hit the market- a lot of speculators are going to rush the exits in the next few months.

After Sept comes and goes and we are down another 10% from here- the specualtors will rush as by then it will be another 6 months until the spring market in 2018. Real panic will start to set in and there will still be no buyers

#67 Millenial-falcon on 08.01.17 at 8:22 pm

Toronto just doesn’t have the offshore laundered money flowing into its market like van does. Vancouver still powering higher. Too bad t-dot but no one really wants to live in your backwater eddy it was all smoke and mirrors.

#68 Dolce Vita on 08.01.17 at 8:23 pm

#47 TortyPapa

You’re not missing anything. It is a slow correction is all. List prices have been dropping since at least October 2016, on average.

I would not put too much stock in Zolo statistics for Vancouver. Last year I tracked their numbers for 3 months daily (at peak and after sales crumbled) and they would readjust sold price numbers from even a year before by up to a few $100K. E-mailed them about this and they replied 1 time that they would look into it. They kept on changing numbers.

Recall, it is a Realtor site after all.

If you believe Ross Kay, prices have gone up on average because 1st buyers have re-entered the market buying more luxurious condos whilst the detached homes market is comprised of people selling to each other and trying to trade up.

The Vancouver Average Sold Price chart predicts prices are going down, again. It looks like a Dead Cat Bounce to me. Inventories up, Sales down, List Prices down = a correction, slow thus far.

With Toronto crashing, who knows, the contagion may hit YVR as well.

#69 For those about to flop... on 08.01.17 at 8:35 pm

TortyPapa 47.
On Zolo Vancouver overall market corrected about 12% this month and about 15% this quarter. I am wondering why people are still adamant about things not correcting? Where are they getting their facts? Am I missing something?

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

Hey Torty ,I will try to answer your question in my own b-grade way.

Myself and a few of the guys on here have discussed how the correction seems to be a no-go zone in the local media.

I showed a case recently that after expenses they would have lost the best part of a million dollars and I do what I do knowing full well that even if a journalist on here seen it it would never be printed in the media.

I have stated on here before that part of the tug of war that is going on is that there is still the belief that you can buy just about any property and make 20% gains on it each year.

That’s where Spring 2016 took things over the top and got a little too frisky for a lot of people’s liking.

If things had only gone up 10/15% we still might be on the up for detached properties as well but that explosion seemingly made some people uncomfortable and take the foot off the gas.

Back then it was a green light disco, now for a lot of the city it is flashing amber lights….proceed with caution.

I work on luxury housing on Vancouver’s Westside and I am interested to see what the developers decided to do after they finish the house on the blocks of land they accumulated when the disco was still green.

I suspect one of the smaller outfits I work for will now only build the houses after the client has purchased the land etcetera.

A lot of mistakes by developers have had next to know ramifications the past decade or so and now people will have pay attention a bit more.

I told the story once before how I was working on a house in Shaughnessy for one of the biggest developers on the Westside, they had also bought the house next door for 4.5million to tear down and build new.Well we had been using it as a glorified tool shed and one day I went to work and was told to get my tools out as it was going back on the market as it could not be knocked down or developed to the size they were planning.

Another developer swooped right in either unaware of the by-law or whatever was at play or planning to do something different to it.

My main point is that sort of mistake nowadays could be the end of a smaller developer and these guys should forget about the past 15 years and take nothing for granted.

We are in a new period, that period has ended.It might look the same to a lot of people but as I have demonstrated time after time in about 5 minutes I can find someone in trouble,before if life took a turn you pretty much could just sell and collect your gains.

One more point I would like to repeat and it goes back to the 20% annual gains thing.A lot speculators would have been expecting this number to keep happening,this is the number I hear bandied about all the time at work and living in the city and so like I have theorized before if you say for the hell of it the market is down 10% for even numbers,that means a lot of my cases are 30% behind where they would like to be and that’s part of the reason we see people cutting their losses and selling.

People were squealing on here when Prefereds were down 30% and I bet not too many people on here had 3 million dollars tied up in Prefereds and they can be sold on short notice.

Now one knows how they will act until the are put in this situation, I intend on not playing the game and avoiding the situation all together…

M43BC

#70 n1tro on 08.01.17 at 8:38 pm

@Robert White

#251 Robert White on 08.01.17 at 6:25 pm
#211 n1tro ‘see how this works, Robert’

Correlation does not lead to causality, n1tro, and I happen to be one with an Honours B.A. in Experimental Psychology so I, for one, can spew without backing it up with references, BuckO.

Note: The IMF happens to agree with the general thesis. Please read the whole paper, n1tro.

_How Tax Systems Treat Men and Women Differently – IMF_

https://www.imf.org/external/pubs/ft/fandd/1997/03/pdf/stotsky.pdf

See how that’s done, n1tro?

:)’
——————————–
I read the article in the link. Sorry to say but the article does not support your position at all. Remember that your position is that women (in Canada?) have been discriminated in the tax system all your life.

The article’s premise is there is bias in the tax systems (implicit and explicit)….mostly in developing countries. It references some examples in the UK and S. Africa. The couple of times it references the US tax system, it acknowledges the bias is against men. Canada is never mentioned. Personal experience reading the tax code and having briefly worked with Revenue Canada back in the day, I know Canada’s tax system is very neutral in its wording. As a man or woman, the tax man just wants your money all the same.

HBSc. My honors thesis was in altruism between the sexes. Guess what the finding was? Women typically get more assistance than men when asking for help. More so if you are a “hot” woman. Shocking, I know.

#71 Smoking Man on 08.01.17 at 8:38 pm

Wow, so I sold at the top in April talk about luck.
I never saw this crash coming. :)

#72 ANON, PAMLC (Payer of Attention to Math and Logic in Class) on 08.01.17 at 8:39 pm

There is no blame, or if some must be placed, for moral needs, the blame is collective.
Anything above principal is a promise of more into the future, promise which cannot possibly be kept. A fiction. An extraordinary popular delusion, which makes the world go round, until it doesn’t.
BTW, the numbers are really ugly.

#73 For those about to flop... on 08.01.17 at 8:47 pm

Joking Man 17 at 8:38 pm
Wow, so I sold at the top in April talk about luck.
I never saw this crash comin…

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

Hey Joking Man ,what would you have done with the extra 200k you could have got if your house was on the market 6 weeks earlier…

M43BC

#74 Dolce Vita on 08.01.17 at 8:49 pm

#58 VanMan

From Bank Loans, HELOCs, the Bank of Ma and Pa, i.e., borrowed or gifted – and some yes, some offshore.

Compare the average salary for Vancouver vs. other cities and its cost of living – the money has to be borrowed or gifted.

You still have Vancouver RE comments here lately about it is all going up when even Zolo (a Realtor site) reports it is going down and has been since October of last year, if you believe My Realty Check, Ross Kay and others – save Condo sales as of late but that has petered out as well.

Denial stage from the YVR RE Cult. You cannot reason with a cult, they are fanatics. They will only change their minds upon death, financial in this case.

La La Land: spending other peoples money with reckless abandon thinking all is fine, when it is not.

A couple more rate increases will put a dent in all that enthusiasm you write about soon enough, have some faith.

Worse yet, if the Toronto RE Crash Contagion takes hold in YVR, well it will make for some very whiny reading in the next quarter about the hard done by, yet stupidly reckless.

#75 young & foolish on 08.01.17 at 8:50 pm

” It seems to me that RE is an illusion of stability and overly unrealistic optimism.”

Well, somewhat it is …. you are hoping that somebody will want to take over your place and live in it at some future date … not unlike a company equity trading at 20 times earnings, where you are hoping said company will continue to make sales and profits and somebody will want to buy your share at a higher price in the future.

#76 Terrence on 08.01.17 at 8:52 pm

Sorry i dont see this so called”CRASH” YET! BUILDERS in the 905’s still developing at a rapid pace, new lands being stripped to build on & new signs going up from the MID 2.5 MILLIONS & UP! Weekends bring LONG lines of people looking to buy these MCMANSIONS, so how do we explain this so called correction, when all i see is the opposite? G.T will be right 1 day, MABEY?

#77 yorkville renter on 08.01.17 at 9:05 pm

Has anyone done the math to know what the median price in Toronto should be if prices rose at their historic average of 4%-ish?

I bought a detached house in Toronto’s West end in 2005 for $370k… that would put the 2017 price around $600k.

LOTS of room to drop still!

#78 Investx on 08.01.17 at 9:05 pm

“Another month of this ugliness, and we will have a record on our hands – the quickest unwinding of a housing market in Canadian history. Maybe human history.”

What happened to the “slow melt” predicted here?

As stated, that comes after the correction. — Garth

#79 fishman on 08.01.17 at 9:08 pm

I’ll confirm VanMan that Vancouver is smokin. The kids are a smorgasbord of ethnicities, vast majority have no accents. Like you know what I mean, like soooo chill. English is Canadian high schools. Must have come from the burbs, or back east? Looks like all coming to Hollywood north to get famous or make their fortune or both. I have no idea where their all stuffed into at night. Rents are a solid $3.25/sq,ft/month & climbing. Wages for hi tech & service stuff are dead last. Still they keep coming driving costs higher & wages lower. Steppin into this town is like stepping into London. You’ll immediately feel the money just evaporate off of you.

#80 Long Branch Apprentice on 08.01.17 at 9:11 pm

Bitcoin back above $3000 US.

The new Silk Road is Remnimbi to BitCoin, to dollars, to Van RE.

Any of you dogs Bitcoin savvy? Thinking trading Bitcoin on Fx, it’s the future.

#81 Tony on 08.01.17 at 9:12 pm

Re: #13 Mike on 08.01.17 at 6:14 pm

Here’s one of Edmonton’s record prices as this listing rots on mls just like everything else.

http://www.edmontonhomesweb.com/listing/e4063579-na-edmonton-ab/

#82 Mike on 08.01.17 at 9:13 pm

Unbelievable discussion on Montreal breakfast television re RE in Montreal:

https://www.facebook.com/BTMontreal/videos/1464017420346729/

#83 Dolce Vita on 08.01.17 at 9:17 pm

#76 Terrence

Garth has provided you with his Resale Selling Price and # Sold Stats for the past few months.

Provide the same for New Construction that you describe with such enthusiasm; thus, converting conjecture into fact.

#84 oncebittwiceshy on 08.01.17 at 9:19 pm

Dolce Vita, You are absolutely correct. I think that it is difficult to gauge the various markets by the reports from the associated Real Estate Boards. I’m not sure who or what sources that you can actually depend on but a review of several unbiased sources might be more relevant.

https://en.wikipedia.org/wiki/United_States_housing_bubble

“A May 2006 Fortune magazine report on the US housing bubble states: “The great housing bubble has finally started to deflate … In many once-sizzling markets around the country, accounts of dropping list prices have replaced tales of waiting lists for unbuilt condos and bidding wars over humdrum three-bedroom colonials.”[28]

The chief economist of Freddie Mac and the director of Joint Center for Housing Studies (JCHS) denied the existence of a national housing bubble and expressed doubt that any significant decline in home prices was possible, citing consistently rising prices since the Great Depression, an anticipated increased demand from the Baby Boom generation, and healthy levels of employment.[55][56][57] However, some have suggested that the funding received by JCHS from the real estate industry may have affected their judgment.[58] David Lereah, former chief economist of the National Association of Realtors (NAR), distributed “Anti-Bubble Reports” in August 2005 to “respond to the irresponsible bubble accusations made by your local media and local academics”.[59]

Among other statements, the reports stated that people “should [not] be concerned that home prices are rising faster than family income”, that “there is virtually no risk of a national housing price bubble based on the fundamental demand for housing and predictable economic factors”, and that “a general slowing in the rate of price growth can be expected, but in many areas inventory shortages will persist and home prices are likely to continue to rise above historic norms”.”

#85 Smoking Man on 08.01.17 at 9:19 pm

#73 For those about to flop… on 08.01.17 at 8:47 pm
Joking Man 17 at 8:38 pm
Wow, so I sold at the top in April talk about luck.
I never saw this crash comin…

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

Hey Joking Man ,what would you have done with the extra 200k you could have got if your house was on the market 6 weeks earlier…

M43BC
….

It wouldn’t have closed just like all 3 of my agents deals in March. I sold 125k below the market perception at that moment in time. Buyers thought they stole it. That’s why it closed. Can buy a simular property in the hood 250k below what I got.

Huge risk waiting 3 months to close but gamblin is a big part of my life.

The market turned on a dime not on 20th of June when Wynee had her speach but a week before when she said she’s going to crush real estate..

Buyers came in firm with a huge deposit I accepted as is.

Now I’m free.

#86 Curious on 08.01.17 at 9:22 pm

Just curious if housing is going to drastically drop in Edmonton and also rural towns in Alberta and BC??

Cheers!

#87 nick on 08.01.17 at 9:22 pm

#66 toronto1 on 08.01.17 at 8:22 pm
This is only the start- my guess is that a lot of people are waiting to see what goes down in sept and then another flood of listings hits the market.

what is going to make this downturn huge is going to be the amount of listings that will hit the market- a lot of speculators are going to rush the exits in the next few months.

After Sept comes and goes and we are down another 10% from here- the specualtors will rush as by then it will be another 6 months until the spring market in 2018. Real panic will start to set in and there will still be no buyers

____________________________________________

What is so special about September? Just curious?

#88 crossbordershopper on 08.01.17 at 9:22 pm

DELETED & BANNED

Racist, anti-aboriginal, anti-immigrant, anti-French. You are so gone. — Garth

#89 Dee on 08.01.17 at 9:23 pm

The panic with terrence #76 is quite funny. Sounds like he needs more re sales.

Opinions on ross kay anyone? I would be inclined to possibly pay for his research but he gives absolutely no info. All he can say is “wrong!”. Or he gives subtle hints. Like, give a little bit about your thought process. Its like he’s so keen on keeping his info secret, that he just doesnt give people enough to get intrigued. I’d gladly pay for great info, but how the heck can one know if what he has is good..

#90 Mark on 08.01.17 at 9:24 pm

“Will the real estate correction cause a recession this time around (while the US stays out of one)?”

Of course. The difference between Canada and the USA is that there’s disproportionately more USD$ offshore that can eventually come back onshore and create demand (and inflation) in the US economy. While similar doesn’t exist for Canada as there are minimal CAD$ offshore.

So if Canada suffers a deflationary recession/depression, there’s a decent chance that the US will suffer an inflationary recession/depression. Thus driving the CAD$ dramatically higher.

#91 Leo Trollstoy on 08.01.17 at 9:35 pm

The Canadian economy is strong and taking the CAD up with it. Tech continues to boom. Deflation has gone into hiding. The BoC will hike again in Oct.

https://www.bloomberg.com/news/articles/2017-07-28/canada-s-may-gdp-grows-0-6-to-triple-forecast-on-oil-rebound?cmpid%3D=socialflow-twitter-canada

#92 2 cents Canadian on 08.01.17 at 9:37 pm

Blame shame! We all get what we deserve. If you have a good or a bad life it’s all based on decisions you did or didn’t make …. and on actions you did it didn’t take. Why are so many people ok with having a shitty life as long as they can blame it on someone else. Being a “victim” is so much easier than taking your own responsibility. Any way …. stop trusting sales people….. they are paid to sell ….. not to tell the truth. They don’t know the truth. Wether it’s shoes, cars, houses or mortgages …… YOU have to do your homework … no one else. Why do so many spend three times as much effort trying to pull “go getters” back down to their level as they do trying to improve their own lives. Eff off! …… change the rules all you want …. the top couple of percent will always figure out a way to succeed and live a good life. Learn from it …. don’t try to crush it. And if you aren’t smart enough, determined enough, driven enough or disciplined enough then you won’t and shouldn’t have all the “stuff” they have ….. but you can still live an enjoyable life. Just not a life created from the marketing departments of all the companies flashing in our faces every day (or Kardashian tweets : ) Pleas stop the blame game …. if you do stupid or risky stuff you run the risk of getting hammered ….. as we all should. That’s the law of nature.
Good night!

#93 Stories told still sounds good for RE on 08.01.17 at 9:41 pm

Still a lot anecdotes of young people fueled by past success to flip again. Condos are hot. Poeple are still selling over ask in Vancouver and then relocating. Maybe this is till the happy spot before the fall

#94 Mike on 08.01.17 at 9:42 pm

How come the price graphs on listing.ca don’t show the same trends as the data below them (IE data shows a drop in prices while the graph doesn’t).

#95 Headhunter on 08.01.17 at 9:43 pm

Wow.. is all I can say!

1. all you Monday morning quarterbacks back off Garth. You guys aint doin shit. At least he’s tryin

2 life has funny twists and turns.. lots of bravado and chest pumping goin on.. Im the richest.. the smartest etc.. Watch out for KARMA yes its a bitch

3. Housing. its just shelter go live your life and have fun before its too late.

#96 45north on 08.01.17 at 9:43 pm

The median detached selling price in the GTA plunged 10.6%, for a one-month loss of $115,000.

10% in one month. When the US real estate market went down in 2006-2008, it didn’t go down as hard. This is a disaster.

Kootenay Hippie: I wonder if the contagion will spread to the entire country.

how could it not? I mean the banks have billions in assets in the GTA. It has their attention and it will keep it.

Linda: IF however you did not purchase at peak, don’t ‘have’ to sell, are not carrying severe levels of debt etc. & intend to stay put for many years to come, this unwinding may not affect you that much.

In my mind, I imagine working at the bank’s head office. I’m a mid level official, I sit at my desk and do my job. One day the big bosses have a meeting and they don’t look happy. On my way to the printer, I happen to walk by the meeting room. On this day, the door is firmly closed and guarded. I don’t make eye contact and keep walking.

lurker: I don’t measure the performance of my portfolio based on the peak value because volatility is part of the deal.

Why do we hold real estate to a different standard?

because you own your portfolio

Alex Prikhodko: his cousin:
https://en.wikipedia.org/wiki/Anastasia_Prikhodko

#97 YYZ on 08.01.17 at 9:44 pm

#21 Tony the Gino on 08.01.17 at 6:31 pm
Ok can someone find me a house at this discount? I put in multiple offers and everything sold over asking or got relisted higher or taken off market. Who’s selling their house for 20% less than April? I WILL BUY IT NOW!

—–
They are not. The top end isn’t selling so it brought the average and median down. But that would defeat the purpose of an impactful essay.

#98 YYZ on 08.01.17 at 9:51 pm

#47 TortyPapa on 08.01.17 at 7:29 pm
On Zolo Vancouver overall market corrected about 12% this month and about 15% this quarter. I am wondering why people are still adamant about things not correcting? Where are they getting their facts? Am I missing something?

——

Sales mix.

Go buy something 20% off. Good luck.

#99 Bob Loblaw on 08.01.17 at 9:54 pm

 Howard on 08.01.17 at 7:09 pm

This one’s for Happy Housing Crash Everyone!

“A nation of realtors in Canada is bracing for the end of the boom”

http://business.financialpost.com/real-estate/rpt-analysis-in-canada-a-nation-of-realtors-braces-for-the-end-of-the-boom/wcm/17da189e-d81f-4618-bfe1-41351ba2fbed

Realtors’ ranks in Canada’s largest city and hottest housing market have surged 77 per cent since 2008 to more than 48,000. By comparison, Chicago has 13,500
______________________________________________________________

Article says half of the 48,000 realtors closed less than 2 deals last year and most are barely making minimum wage after fees are considered. That sound you hear? Its 24,000 realtors screaming in horrible financial pain!

#100 Tls on 08.01.17 at 9:57 pm

Canada=Romania?

#101 Quotable Quote on 08.01.17 at 9:59 pm

“Just think of any negativity that comes at you as a raindrop falling into the ocean of your bliss.”
— Maharishi Mahesh Yogi

#102 zee on 08.01.17 at 10:00 pm

Hey Garth
How do you explain the robust sales of new condo in the last two months in the GTA. Who and why are they buying with all that is happening.

#103 Linda on 08.01.17 at 10:02 pm

#33 ‘young & foolish’ – I don’t think you quite caught my point. People with money – no debt – will possibly be able to take advantage of an opportunity. As in, purchasing a property at a discounted price from someone who ‘has’ to sell. Also, if an indebted nation is not purchasing, vendors will presumably be trying to entice purchasers & again, those who have cash (no debt) may be able to take advantage of that.

Add in that one must live somewhere & if you already own a property that you do not have to sell, the price drop doesn’t really matter. It only matters if you have to sell & if that is years down the road, the stagnant asset may not be stagnant by then.

#104 Toronto1 on 08.01.17 at 10:04 pm

#87 Nick

Right now RE in the GTA is kind of in a funk, some homes sell for over, Some sell for less.

A lot of deals have fallen through snd some of the weakest hands have started to capitulate, tgere is a meme out there sold by RE bulls that it will all turn around in sept

It wont, by that point, the beleivers will have already brought and any sideline buyers will be gone.

The fear will start to set in that this slow down is indeed turning into a crash and prices will at best be the sane next year at worst, down 20%

Those with massive helocs will list enmass to get out while they can, buyers will be cautious. And it will accerlate.

if OFSI bans bundling mortgages watch out below, liquidy will dry up.

#105 IHCTD9 on 08.01.17 at 10:07 pm

I think right about now is a good time to start up a down payment fund for newer, nicer digs. It will be a few years, but the higher end houses around here will see their prices degrade with the GTA market getting rag-dolled. Meanwhile, interest rates will keep climbing further putting the boots to pricing.

I always prefer a low principal with a higher rate. The price I have no control over and must pay it 100%. The higher borrowing costs I can mitigate in many ways: pound on a huge down payment, pay weekly, add a monthly lump sum payment that comes right off the principal.

But, then there’s the 6-7K big house in rural Ontario taxes…

#106 Happy Housing Crash Everyone! on 08.01.17 at 10:09 pm

#66 toronto1

The Amount of speculators who borrowed from their fake equity is unprecedented. Over 121,000 “own” two or more properties. Majority with borrowed money. How many parents borrowed to help children not included in stat? The Amount of gambling in housing market in the GTA is off the charts and speculators are sinking and in a panic. Many of these speculators are realtors. The panic is off the charts and the loser buyers wait the harder prices fall. HappyHousing Crash Everyone! :-)

#107 Ret on 08.01.17 at 10:11 pm

Avg list price. A totally useless number meant to daze and confuse. List price has zero correlation to sold price.

Avg sold price in Toronto has dropped $295,000 since February.

If you are a buyer, you are richer than you thought! The trend is your friend. It can only get better from now until next January and then, who knows?

#108 neo on 08.01.17 at 10:13 pm

#71 Smoking Man on 08.01.17 at 8:38 pm
Wow, so I sold at the top in April talk about luck.
I never saw this crash coming. :)

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

Actually you didn’t. You kept insisting that next Spring 2018 we would be seeing what we currently are now. You said “You were leaving money on the table” but needed to sell due to your personal circumstances. I disagreed with your 2018 prediction but you insisted you were clairvoyant.

By Spring 2018 the comps to this March and April will make the YOY numbers gruesome.

Dumb luck indeed.

#109 When Will They Raise Rates? on 08.01.17 at 10:30 pm

#80 Long Branch Apprentice on 08.01.17 at 9:11 pm

Bitcoin back above $3000 US.

The new Silk Road is Remnimbi to BitCoin, to dollars, to Van RE.

Any of you dogs Bitcoin savvy? Thinking trading Bitcoin on Fx, it’s the future.
———————–

Yes, I trade crypto on the exchanges. I would advise staying away from Poloniex (largest crypto exchange) at the moment, as thousands – maybe 10’s of thousands – of withdrawals (including mine) are stuck “Awaiting Approval”… No response from support…

I withdrew all of my funds from there well before the Bitcoin fork, and still no dice… There are rumors circulating that they are insolvent and getting ready to pull a Mt Gox and flee with everyone’s cryptos. We shall see…

The best advice that I can give you is to only keep what you plan on trading in the next 24 hours on the exchange. Otherwise keep everything in a private offline wallet.

There is big $ being made and this is still early in the game, but beware of pump and dumps on some of the lower volume cryptos…

I usually make ~5% on every trade, sometimes more, sometimes a lot more, and I rarely have a losing trade. The secret is buying on a panic sell when a crypto with good volume breaks support – they ALWAYS re-test the new resistance unless there is news affecting the crypto… Otherwise, it’s BTFD and sell the bounce.

I have dozens of alerts set up on Coinigy that alert me when a crypto breaks support. Some days trades are plentiful, some days I get 2 or 3 goods trades, but opportunities are generally abundant and you can’t lose in the long run if you follow this system. When I say “you can’t lose”, I’m referring to losing BTC, as I trade BTC/altcoins. I can of course lose USD or CAD if bitcoin itself goes to zero, since I’m earning/accumulating in BTC.

#110 Protea on 08.01.17 at 10:37 pm

#58 VanMan

The simple answer is that the current generation that frequent the restaurants and fancy watering holes live from one pay cheque to the next !! they live for the day as don’t see much hope for the future so enjoy it today !!
Maybe I am totally wrong but don’t have any debt ! I know a real boring existence. Drive a plain Honda no Audi or BMW for me and feel very content and happy still also renting !!

#111 Old Ron the Realtor on 08.01.17 at 10:37 pm

The Realtors on this site who keep trying to sell the Kool-Aid should accept some facts. A 20% decline in prices in 90 days is totally unprecedented.

How much is a house worth ? The exact amount a Buyer is willing to pay for it, and not a penny more. And that folks is the definition of “Market Value”

#112 Shortymac on 08.01.17 at 10:40 pm

# 27 tony the Gino

Chill man, if you really want to buy you have to hook up with a realtor. A lot of the discounts are being negotiated behind closed doors and aren’t being reflected on realtor.ca.

Remember, winter is coming and that is when true seller desperation will set in.

The realtor I have is complaining all her sellers still think it’s 2016 and won’t reduce their listing price, she has to wait for them to get desparate.

If there was a way to private msg I’d share you her details I could.

#113 The Dude on 08.01.17 at 10:40 pm

Whatever happened to the Calgary death watch?

#114 Mark on 08.01.17 at 10:47 pm

“You still have Vancouver RE comments here lately about it is all going up “

Lots of bored RE sell-side types coming here to post perhaps?

The ferocity in which highly reputable posters like VREU and myself have been attacked would be highly indicative of such.

#115 Save Glen Abbey on 08.01.17 at 10:53 pm

Prices are slip sliding away in Oakville seeing quite a few listings rotting on the vine for weeks even after several price reductions. Looking forward to what September brings.

#116 Small Business on 08.01.17 at 10:54 pm

This is directed towards anyone wondering about how Edmonton/Calgary looks in the trenches.

I work in a service based business that has more then a toe in the new construction business.

Here’s an update on how new construction looks in Edmonton in my experience:

– High volume builder of mine is building less then half the amount of homes they did in boom years.
– High volume builders offering incentives such as developed basements to move inventory.
– Established big electrical/plumbing companies have axed many staff.
– Except for the ‘cream of the crop’ estate home builders are quite slow as well.

I’d hang on to your money right now and see how this plays out.

#117 Hughz50 on 08.01.17 at 10:54 pm

Hi Garth,

Do you have any sense of what’s happening in Ontario’s cottage country these days? With selling prices dropping so rapidly in the GTA, cottages are bound to go on sale soon.

#118 mouldyinYVR on 08.01.17 at 10:57 pm

https://www.theguardian.com/society/2017/aug/01/names-of-wealthy-empty-home-owners-in-grenfell-borough-revealed

YVR is a member of an elite club. Don’t hold your breath while waiting for a correction.

#119 Tracy on 08.01.17 at 10:59 pm

If those numbers hold into Fall, why would Poloz raise rates more than once? 2015 showed us that he is the most dovish of doves.

Also, that anecdote about the condo listed at 559 but sold at 465, I don’t think it’s representative (even if makes no sense that a small two bedroom would sell for this much in a rising rates environment). I see numerous condos selling in mid-town for 500 and above.

I guess we’ll find out soon enough. By the end of the year we should know. If prices are really coming down that hard and staying down, plenty of brokers will be begging Poloz to stop raising rates. RateSpy will be doing the same, and same with our non conflict-free newspapers.

#120 acdel on 08.01.17 at 11:01 pm

#102 zee

Bahhh!!

Seriously, have you not read, especially in the past six months what Garth has said sheep!! Read up on your history you lazy ,,,,,,,,,,,,,,,,,,,,,

#121 GFD on 08.01.17 at 11:08 pm

#95 Headhunter on 08.01.17 at 9:43 pm
3. Housing. its just shelter go live your life and have fun before its too late.

They do. Stouffviller’s choice of “fun” is to sit and enjoy BBQ in their garage.
PS: Happy birthday Jerome

#122 IHCTD9 on 08.01.17 at 11:09 pm

#57 MF on 08.01.17 at 7:59 pm

It’s a good time to buy. Wish I could.

MF
——–

You should ask yourself if you can afford an sfd at 600K, or a condo at 300K with a 7% interest rate.

That’s 4200.00/month for the house, and 2600.00/month for the condo including fee.

If the answer is no, then you’re going to rent for life because that’s as good as it will ever get in the GTA. It might even take higher than 7% to get prices that low, and it would take ten years to get there.

You should make long term plans around reality. If you’re going to be a rent payer till death, you had better be saving like Vladislav Tretiak…

#123 Kool Aid on 08.01.17 at 11:10 pm

Average Bungalows prices in Oakville.

Can an average bungalow in Oakville be worth 3.5M in 25 years, maybe.

70’s 30-90K
80’s 90-220K
90’s 160-270K
00’s 270-450K
10’s 400-1200K
20’s 900-2300K
30’s 1700-3400K

Not sure who to blame.

#124 Ben Dover on 08.01.17 at 11:10 pm

Another winner to the list. This show preaches to the herd.

http://globalnews.ca/toronto/program/real-estate-sos

#125 For those about to flop... on 08.01.17 at 11:17 pm

#106 Mark on 08.01.17 at 10:47 pm
“You still have Vancouver RE comments here lately about it is all going up “

Lots of bored RE sell-side types coming here to post perhaps?

The ferocity in which highly reputable posters like VREU and myself have been attacked would be highly indicative of such.

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

Are you arguing for the defense or the prosecution…

M43BC

#126 M on 08.01.17 at 11:23 pm

@#29 Millenials
Indeed, Garth didn’t.
I did.
Garth is too shy and loves sweet words.

..but you can figure out by yourself:
70% of the white north economy is housing. Via its derivatives (rona, home depo, HELOC buyed new cars, etc). Not all goes in lockstep. Another bright chance to preposition and make like thieves

..and stop antagonizing your elders :)

#127 paracho on 08.01.17 at 11:27 pm

I think these average declines would be uglier and more honest if the algebraic mean was quoted , as opposed to the median .
Thanks for removing being me Garth! Picked up a Canadian Preferred ETF , US Preferred etf and some preferred shares in two Canadian banks .and a British Bank listed on the NYSE .
@Tony The Gino … please stay calm … you will find the right place at the right price . Just give it a few more rate increases !

#128 MF on 08.01.17 at 11:30 pm

zee,

Condos are all anybody can afford these days. The demand for real estate is still there. Nobody really cares or is affected by a house that goes down in value from 1.3 million to 1 .2 million.

MF

#129 Bcc7 on 08.01.17 at 11:33 pm

This is no crash.

There’s no significant change for supply side (builder) sentimental. There’s no unfinished projects. There’s no builder going bankruptcy or vanished with buyer’s deposit).

And there’s no arson of recently changed hands house/semi finished development projects.

#130 Nick on 08.01.17 at 11:37 pm

What’s wrong with Romania? I’m there right now. Looks pretty good to me. Shopping Centres full of people carrying brand shopping bags, huge restaurants doing bby the looks of it great business, new cars everywhere, beautiful women galore! Nothing wrong here!

#131 Alberta Ed on 08.01.17 at 11:46 pm

Now explain this to the CBC. Speak slowly — they have a new bunch of announcers on board.

#132 MF on 08.01.17 at 11:48 pm

#122 IHCTD9 on 08.01.17 at 11:09 pm

I’m saving as much as I can, and have been for years. I’m actually good at saving, but as a lot of us have found out, this has been a hindrance in our debt fueled economy.

I think I am starting to represent everything Garth is against, sadly:

A house horny millennial, who wants to buy a condo, believes they will only go up in value (seriously), and whose parents are willing to gift him a down payment to “help”. I can’t bring myself to buy stocks/bonds again.

I even like Trump

How do we get to this?

MF

#133 M on 08.01.17 at 11:56 pm

:)

#134 Smoking Man on 08.02.17 at 12:01 am

#108 neo on 08.01.17 at 10:13 pm
#71 Smoking Man on 08.01.17 at 8:38 pm
Wow, so I sold at the top in April talk about luck.
I never saw this crash coming. :)

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

Actually you didn’t. You kept insisting that next Spring 2018 we would be seeing what we currently are now. You said “You were leaving money on the table” but needed to sell due to your personal circumstances. I disagreed with your 2018 prediction but you insisted you were clairvoyant.

By Spring 2018 the comps to this March and April will make the YOY numbers gruesome.

Dumb luck indeed.
..
what if my buyers read this blog.

#135 yorkville renter on 08.02.17 at 12:02 am

#123 Kool Aid …25 years is a LONG time. At just 3% you would double your money in that time. Using the historical average of 4% a year, 1.2 million becomes 3.2 million in 25 years.

blame inflation?

#136 Paulo on 08.02.17 at 12:02 am

my bet is we are at the 40% point of the gta correction
it has come on much quicker than i thought. the other 60% will come to pass over the next 18 months.
the outlying areas will be hit harder.
it will be a long and cold winter for realtors and sellers with many a speculator frozen to death before next spring
we still have not seen the full effect of the domino deal failures they should be booked in the next 60 days or so
the return to real estate reality will be painful.
expect no relief in September rather a confirmation of a epic and ongoing correction.

#137 yorkville renter on 08.02.17 at 12:03 am

oh, and thats based on the currently way-too-high price of today!

#138 Missus.hippi on 08.02.17 at 12:35 am

Hi Garth,
Just wondering if you have any insight into the Hamilton market. CMHC called out Hamilton recently (as you reported already) as being one of the 4 areas where house prices are detached from reality.
I’m seeing a lot of price reductions, but prices are still in the nosebleed section. A 70’s non-updated 800 sq. foot bungalow on a nothing special lot selling for over 1/2 a mill? Something’s gotta give…

#139 NoName on 08.02.17 at 1:07 am

of topic but interesting read

http://www.politico.com/story/2017/08/01/devos-student-loans-241221

i was reading earlier today about same ting (discharging of student loans), and funy thing is that more and more prople are taking it to court and they are getting their loans dismissed as invalid in court. it involves 2 co. National Collegiate Student Loan Trusts
and cant remember 2nd name. basicly most of the people (debtors) that loose in court is because they are no show, but if they are show and ask for chain of ownership they get their loan dismissed…

http://www.businessinsider.com/national-collegiate-billions-student-loan-debt-2017-7

#140 Aggregator on 08.02.17 at 1:10 am

You guys are still waiting? Canada’s subprime boom is just getting started. The final phase before the crash.

#141 waiting on the westcoast on 08.02.17 at 1:23 am

#98 YYZ on 08.01.17 at 9:51 pm says…
“#47 TortyPapa on 08.01.17 at 7:29 pm
On Zolo Vancouver overall market corrected about 12% this month and about 15% this quarter. I am wondering why people are still adamant about things not correcting? Where are they getting their facts? Am I missing something?
——
Sales mix. Go buy something 20% off. Good luck.”

I think you are correct and incorrect.

Correct on the fact that the condo market is stable (and maybe even still rising).

Incorrect because it’s the last of the fools grabbing/driving up lowest cost housing even while the speculators are recognizing the end and bailing out of the higher end homes (even if they lose a small/large amount of money).

It’s the greaterfools that buy high and sell low… that is what is showing in the last gasps of this market.

#142 waiting on the westcoast on 08.02.17 at 1:30 am

#125 Flop…

“Are you arguing for the defense or the prosecution…”

+1

#143 DON on 08.02.17 at 1:55 am

@ #122 IHCTD9

Did you read the post from Old Ron. When was the last time wages rose? And when things turn south, credit dries up, people don’t spend and the main concern is job security is a market shedding real estate related jobs etc.

#111 Old Ron the Realtor on 08.01.17 at 10:37 pm

The Realtors on this site who keep trying to sell the Kool-Aid should accept some facts. A 20% decline in prices in 90 days is totally unprecedented.

How much is a house worth ? The exact amount a Buyer is willing to pay for it, and not a penny more. And that folks is the definition of “Market Value”

#144 oncebittwiceshy on 08.02.17 at 1:56 am

>>>>>>>>Tracy: “If prices are really coming down that hard and staying down, plenty of brokers will be begging Poloz to stop raising rates. RateSpy will be doing the same, and same with our non conflict-free newspapers.”<<<<<<<<

Yes, dear Tracy and don't you think that everyone wasn't doing the same kind of beggaring in 1981.

Oh right, you're too young to remember that. They answered by raising interest rates up to over 21%.

Will that happen again? Not too damn likely but if a 1/4% rise in rates can create the media storm and angst that we've seen, it's not going to take too much more.

Live by the sword, die by the sword. I just hope that you aren't one of the innocents conned into this market. Good luck.

#145 allovertheplace on 08.02.17 at 2:01 am

For those still wondering why VAN prices aren’t yet softening to their expectations:

Would you pay $9 USD for a standard vodka on the rocks? Kinda steep, no? That’s the type of markup you’ll pay in a captive audience situation like a cruise ship. Vancouver is 100% the same.

Major cities generally do have an ebb and flow of residents, but Vancouver’s born and raised simply don’t leave, creating a endless demand for single family homes with lawns and room for four SUVs or Pickup Trucks.

Need proof? Ask anyone complaining about affordability why they just don’t move. Not even a consideration. And in a place that doesn’t even touch average household income nationally.

So, VAN will crash, and it will likely be worse than anywhere else in the country, but this is still a very long way off for the lower mainland.

#146 EB on 08.02.17 at 2:04 am

#118 mouldyinYVR – Indeed, a condo at Nanaimo and Grandview is what all the corporate financiers in Europe truly dream of.

#147 Dan.t on 08.02.17 at 3:55 am

Just reading the comments you get a great idea of how the Real Estate Mafia works.

Pay for “news” articles in the Sun, Province (BC) or GTA “news” papers, publish confusing YOY, month over month, mean, average, sales and price data, back it up with doctored up stats and keep everyone confused.

We have people thinking houses cost 500k in Edmonton, prices still going crazy in GTA and YVR on fire… no one knows for sure.

There is simply no transparency to any of this and what most people read are article headlines and get their “news” from the other herd at water cooler etc.

“Vancouver Prices on Fire”, people see that and the party continues, only think most can qualify for based on record low interest rates is a 500k POS condo in the sky so they keep buying. Plus Christy Clarks free 37k just pushed anything under 400k up about 25% in a year (awesome housing affordability plan!)…

…that is why houses are severely unaffordable in the first place, give the whole population access to free money and let them chase 1 asset class…weird what happens, plus add in a mix that Canadians are the most house horny people on the planet, there you go, bidding wars and fights, lying, cheating, fraud, all to get a condo, house, or apartment that only ever goes up!

Maybe I am way off or have been outside the bubble too long, but who cares if a 1.8 million crack shack now costs 1.64 m. Who is realistically buying these places anyhow. Everyone in BC and GTA must be super rich or they are pooling money, speculating, flipping to the next group who will try to do the same… or it really is someone buying who doesn’t care if 1.8 m turns into 1.2 m or whatever.

If you can pay that outright, it really is a place to park your money, if not, you are speculating.

What matters is that average wage earners need to go deeper and deeper in debt to even think about buying anything low end (condo, townhouse) since prices in those areas keep going up 20% a year and are unaffordable….

and affordable doesn’t mean, because the bank says you can afford a 480k condo (plus strata, fees, taxes) with a bank of mom downpayment, that it is affordable.

A serious correction and mentality shift needs to happen fast but… The herd in BC is still raaraa and eager as ever to keep speculating so gonna be a while. Credit is still cheap, money is still flowing, people are still flipping or buying to rent out any supply that comes online, that is half affordable (that they qualify for).

I hope the NDP don’t wimp out and rates keep rising. Once the herd gets spooked, they scatter in all directions. I hope that happens soon too!

#148 Jessica Lauren Annis, BURPl, MCIP, RPP on 08.02.17 at 5:39 am

#51 Raging
Provincial land use plans caused the housing shortage, hence the housing bubble. Housing bubbles inevitably crash. Randal O’Toole: War on Home Ownership (explains how smart growth caused USA housing bubble/crash) https://www.youtube.com/watch?v=o8aUo4Q1Lrk

#149 Bonhomme Carnaval on 08.02.17 at 7:03 am

@ #82 Mike on 08.01.17 at 9:13 pm

Like I said, Westmount & Town of Mount Royal (TMR), for Luxury SFH.

Griffintown and Île des soeurs (Nun’s Island) for upper-middle range and luxury condos and townhouses.

In related News :

‘It’s raining money’: Quebec’s economy crawled out of the doghouse. Now, it’s a powerhouse

http://nationalpost.com/news/canada/from-the-doghouse-to-a-powerhouse-quebecs-economy-has-rebounded/wcm/2309f155-c7d5-4617-b95a-d359f227bafe

National Post View: Is Quebec the new Alberta?

http://nationalpost.com/opinion/national-post-view-is-quebec-the-new-alberta/wcm/87b04a15-356b-40a7-9d0f-f12d1a5a8d25

Quebec 2016 budget: Cuts in health taxes while balancing books for second year

http://nationalpost.com/news/politics/quebec-2016-budget-highlights-more-education-spending-daycare-discounts/wcm/5cc48931-1433-4146-860f-ed258815734f

Humm, decrease income tax and increase sales taxes. Now there’s an idea! From Qc no less… (?)

#150 Kool Aid on 08.02.17 at 7:44 am

#135 Yorkville Renter
#137 Yorkville Renter

Yes, prices will be simaliar in a far away tomorrow, and yes, RE prices are plump today, as is debt, the same can be argued for equities & bonds.

Yorkville is wonderful place to invest on a significant RE slowdown.

Best,

#151 Canadian econkmy on 08.02.17 at 7:47 am

I’d be interested to hear your thoughts on what impact the downturn of the real estate industry will have on the economy Canada wide and the potential for the TSX performance relative to the US and globally? Everything that has been said on this blog is been about expexted TSX strength in the coming months but if the real estate industry collapses, how’s that impacting the Outlook?

#152 CJBob on 08.02.17 at 7:52 am

#114 Mark on 08.01.17 at 10:47 pm
…highly reputable posters like VREU and myself…
______________
This is the funniest thing I’ve ever read. My sides hurt.

#153 Raging Ranter on 08.02.17 at 8:06 am

@#148 Jessica, ultra-low lending rates and low down payment loans backed by CMHC, plus an emerging sub-prime mortgage market, caused the housing bubble. There is no shortage of housing. If prices go up due to a shortage, then that’s not a bubble, that’s a fundamental reason for prices to go up. We aren’t looking at a market driven by fundamentals here. We left fundamentals behind circa 2005.

#154 neo on 08.02.17 at 8:17 am

#134 Smoking Man on 08.02.17 at 12:01 am
#108 neo on 08.01.17 at 10:13 pm
#71 Smoking Man on 08.01.17 at 8:38 pm
Wow, so I sold at the top in April talk about luck.
I never saw this crash coming. :)

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

Actually you didn’t. You kept insisting that next Spring 2018 we would be seeing what we currently are now. You said “You were leaving money on the table” but needed to sell due to your personal circumstances. I disagreed with your 2018 prediction but you insisted you were clairvoyant.

By Spring 2018 the comps to this March and April will make the YOY numbers gruesome.

Dumb luck indeed.
..
what if my buyers read this blog.

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

Don’t you have that Masters degree in Herdonomics? Looks like the herd ran you over looking for the exits.

#155 Andrewt on 08.02.17 at 8:20 am

Meanwhile, back at the funny farm, Trump’s economic plan for the vanishing middle class comes into focus:

“I’m going to start explaining to people when you have an area that just isn’t working – like upper New York state, where people are getting very badly hurt – and then you’ll have another area 500 miles away where you can’t – you can’t get people, I’m going to explain you can leave, it’s OK, don’t worry about your house,” he said. “You know, a lot of them don’t leave because of their house. Because they say, gee, my house, I thought it was worth $70,000 and now it’s worth nothing. It’s OK. Go, cut your losses, right?”
http://www.politico.com/story/2017/08/01/trump-wall-street-journal-interview-full-transcript-241214

#156 jack on 08.02.17 at 8:22 am

#32 Howard on 08.01.17 at 6:51 pm
“Wonder why York Region is crashing more than the other burbs.

I’d rather live in Thornhill or Richmond Hill than Mississauga (shudder).”

Because that’s where the Chinese dudes have been buying up investment properties. They’ve moved on to Montreal.

#157 Saint Herb on 08.02.17 at 8:23 am

Just received this from ToSold.com. The realtors have stopped him again. The timing is interesting. Looks like they don’t want the information about lower prices to get out.

“Temporary Suspension of
the Just Sold report
Once again the Toronto Real Estate Board is frustrating my ability to provide you with information on residential real estate sales.

Based on TREB’s recent assertions, I am temporarily suspending the email distribution of the Just Sold report pending release of the Federal Court of Appeal’s decision on TREB’s restrictive practices. The Court’s decision is expected to be released soon.

In the meantime please bear with me and support my continuing efforts to bring openness and transparency to the Toronto real estate marketplace.”

#158 40 something family man on 08.02.17 at 8:30 am

#122

Don’t assume all renters rent b/c of necessity as oppossed to choice and frugality. I have been a renter for 6 years @ $1500/month, and between my wife and I we have a combined net worth of $1.75M? Give or take $50k?

We are positive cash flow EVERY month, took a 3 week trip to Japan in March, and planning a 2 week to Hawaii this November.

These CAD energy stocks are going to rally hard in 18, hope you have some exposure.

#159 Kurt on 08.02.17 at 8:40 am

I’m going to question the math on how significant the price decline is compared to 1989. The only figures we can find from then are annual, which doesn’t provide the monthly peak you are using.

Let’s look at the Toronto market now through the same lens we use when looking at the early 90’s. Only a 10% annual decline from the average price in 2016 would be an average of $657k. That’s nearly 30% off the peak of April 2017. A 20% annual decline is a $583k average. That’s $340k less than the peak. Scary stuff. Thrilling for someone who is currently renting though.

#160 Invictus on 08.02.17 at 8:52 am

#92 2 cents Canadian on 08.01.17 at 9:37 pm

Amen brother.

If I manage to teach my kids to never blame anyone else for their own failure and shortcomings but them self.
And if I can teach them to learn from it and move on.
If I can teach them to think trough their decisions very thoroughly and once they make their choices to never give up in what ever endeavors they engage, I will consider my self a successful parent.

Invictus

#161 Q1 Duplex Drive 4-6-4-4 Type on 08.02.17 at 9:28 am

‘Wonder who they will blame?’

1) Boomers

2) Anybody smart enough NOT to buy a house in the GTA during the last few years.

(I’m guilty on both counts)

#162 rainclouds on 08.02.17 at 9:29 am

Horgan interview on CBC Radio yesterday (the Coast)

The Socialists have changed their tune somewhat on overpriced RE here in the BPOE. Apparently the new meme is “in order to lower prices we need more housing, including freeing up provincial land” “Dont want to impact equity already realized”

Sounds suspiciously like: we dont want to be responsible for blowing this baby up

While it is likely that it wont matter one whit what any govt does , the departure from the David Eby script while in opposition is concerning.

I guess watching the spectacular sales reversal in Ont created by the soon to be ousted Wynne Govt is cause for concern for the commies.

Kick Can further, cross fingers, hope

General Population Screwed………..

#163 Jessica Lauren Annis, BURPl, MCIP, RPP on 08.02.17 at 10:04 am

#153 Raging

Um no. First came the shortage, then low interest rates, etc., etc. Last came the amateur speculators/flippers.

http://www.operationpushback.ca/blog/archives/09-2016

#164 Philio on 08.02.17 at 10:22 am

Wow, great job getting those median stats! Now THOSE’re some numbers!

#165 FLHTK on 08.02.17 at 10:28 am

Consumer spending will stop for sure….we will see how vehicles sell this year…

#166 IHCTD9 on 08.02.17 at 10:32 am

#143 DON on 08.02.17 at 1:55 am
@ #122 IHCTD9

Did you read the post from Old Ron. When was the last time wages rose? And when things turn south, credit dries up, people don’t spend and the main concern is job security is a market shedding real estate related jobs etc.
___________

Tell me about it – my previous employer folded in the midst of the GFC back in 2011. My income has only recently increased over what I made back in 2009.

I hope a life long renter manages to save and invest as that is all he/she will have going on in the absence of a house. Waiting too long to invest (or buy a house) cuts yourself off at the knees as time starts working against you instead of for you.

This all goes back to the same old question about living in a low income high cost city (ie. GVRD + GTA). Many kids these days aren’t getting off the blocks until it’s too late, and life turns into a collection of hopes and dreams that are never going to happen.

Doing is what makes stuff happen, camping out in an apartment located in a metropolis and hoping for the best is a one way street to financial ruin

#167 Ian Prittie on 08.02.17 at 10:48 am

We need serious banking reform in this country. Someone has to figure out how to get lenders to stop lending indiscriminately at the top of a credit cycle and to support small business at the bottom. The banking industry does the opposite. The big 5 bank’s execs walk away with millions while destroying the country, and now the taxpayer will have to clean it up. Just like the US ten years ago.

#168 IHCTD9 on 08.02.17 at 10:51 am

#158 40 something family man on 08.02.17 at 8:30 am
#122

Don’t assume all renters rent b/c of necessity as oppossed to choice and frugality. I have been a renter for 6 years @ $1500/month, and between my wife and I we have a combined net worth of $1.75M? Give or take $50k?

We are positive cash flow EVERY month, took a 3 week trip to Japan in March, and planning a 2 week to Hawaii this November.

These CAD energy stocks are going to rally hard in 18, hope you have some exposure.
_______________________________________

I sure don’t assume all renters rent b/c of necessity.

For us, our house buying arrangement was about the same cost as renting, plus we planned on kids – so buying was a no brainer. Given a different set of circumstances, I may well have been a renter myself.

In fact, renting in the future is a real possibility as I am already starting to downsize and simplify my life. The nest egg grows as we speak, and a realistic scenario is living simply, and cheaply – while the portfolio covers all the living costs and then some.

Did you invest your way to 1.75M NW, or was there a house sale/value worked into that number somewhere?

#169 IHCTD9 on 08.02.17 at 10:53 am

#132 MF on 08.01.17 at 11:48 pm
#122 IHCTD9 on 08.01.17 at 11:09 pm

I’m saving as much as I can, and have been for years. I’m actually good at saving, but as a lot of us have found out, this has been a hindrance in our debt fueled economy.

I think I am starting to represent everything Garth is against, sadly:

A house horny millennial, who wants to buy a condo, believes they will only go up in value (seriously), and whose parents are willing to gift him a down payment to “help”. I can’t bring myself to buy stocks/bonds again.

I even like Trump

How do we get to this?

MF
_____________________

Do you think your prospects might be better overall somewhere other than the GTA?

#170 Saint Herb on 08.02.17 at 10:54 am

#117 Hughz50 on 08.01.17 at 10:54 pm
Hi Garth,

Do you have any sense of what’s happening in Ontario’s cottage country these days? With selling prices dropping so rapidly in the GTA, cottages are bound to go on sale soon.

——-\\\\

I wonder the same thing. Something will have to happen in the cottage market too. The cottage prices are sky high for something you use a few months a year (unless your renting it out).

Friend just bought a cottage for 3/4M. He said he used a HELOC to pay for most of it. I asked why he didn’t get a mortgage for it. Said the bank would not give a mortgage on cottage unless you have a 50% down payment. And they wouldn’t anyway because he is self employed. This was several months ago and he said the bank gave him a 1.3M value on his house. He said the agent said everyone is buying there cottage with a HELOC.

What happens when rates rise on his huge HELOC and his house value drops?

If everyone is doing it will the banks do anything as long as they keep paying?

#171 Raj on 08.02.17 at 11:06 am

#153 Raging Ranter,
Absolutely, you nailed it !!
There is no shortage of housing.When the speculation of this magnitude occurs, you build a million houses a year and it will still be not enough.

#172 Dan from Richmond Hill on 08.02.17 at 11:24 am

#130 Nick on 08.01.17 at 11:37 pm

Same here, Nick !
I just enjoyed a very good beer, URSUS black, about 1 CAD while I read Garth’s post on my mobile device. 6 Euro per month for 15 BG data, unlimited talk, 600 minutes Europe and USA. Is this possible in Canada ?

#173 SimplyPut7 on 08.02.17 at 11:37 am

#157 Saint Herb on 08.02.17 at 8:23 am

I got the email too!

TREB may have won the battle, but they are still losing the war.

Sold prices are down from the peak in March/April, homes in the GTA have been on the market for months and have not sold. They can hide behind their secret data all they want, and tell people the GTA is just like Vancouver last year, and prices will come back in September; that’s 30 days away, I doubt that.

We can all see them for the liars they are, no one believes their propaganda anymore, their credibility is gone.

#174 Mattl on 08.02.17 at 11:37 am

#158 Frugal? Or you sold a house in YVR 6 years ago and that is where the bulk of your net worth comes from. Love the renters around here that sold, have big net worths due to past RE ownership and now attribute renting to their current large net worth.

I’m also a renter, and have done very well, but not because of renting.

#175 oncebittwiceshy on 08.02.17 at 11:55 am

>>>>>>>>>Dan T. “A serious correction and mentality shift needs to happen fast but… The herd in BC is still raaraa and eager as ever to keep speculating so gonna be a while. Credit is still cheap, money is still flowing, people are still flipping or buying to rent out any supply that comes online, that is half affordable (that they qualify for).”<<<<<<<<<<

Danny, Danny, Danny, at least we get a somewhat imaginative bull here. You have pulled out all of the stops on this one, managing to hit all of the perceived "bear" hit lists.

It is difficult to manage a story line though when you are trying to ensure this audience hears about the typical bull memes, as well.

Credit is cheap, money is flowing, flippers are flipping…. la la la

Where else have we heard this?

https://en.wikipedia.org/wiki/United_States_housing_bubble

“A May 2006 Fortune magazine report on the US housing bubble states: “The great housing bubble has finally started to deflate … In many once-sizzling markets around the country, accounts of dropping list prices have replaced tales of waiting lists for unbuilt condos and bidding wars over humdrum three-bedroom colonials.”[28]

The chief economist of Freddie Mac and the director of Joint Center for Housing Studies (JCHS) denied the existence of a national housing bubble and expressed doubt that any significant decline in home prices was possible, citing consistently rising prices since the Great Depression, an anticipated increased demand from the Baby Boom generation, and healthy levels of employment.[55][56][57] However, some have suggested that the funding received by JCHS from the real estate industry may have affected their judgment.[58] David Lereah, former chief economist of the National Association of Realtors (NAR), distributed “Anti-Bubble Reports” in August 2005 to “respond to the irresponsible bubble accusations made by your local media and local academics”.[59]

Among other statements, the reports stated that people “should [not] be concerned that home prices are rising faster than family income”, that “there is virtually no risk of a national housing price bubble based on the fundamental demand for housing and predictable economic factors”, and that “a general slowing in the rate of price growth can be expected, but in many areas inventory shortages will persist and home prices are likely to continue to rise above historic norms”.”

#176 WUL on 08.02.17 at 12:08 pm

With my return to Calgary from Fort Mac on July 1 and my commencement of my new life as a small business owning, job creating entrepreneur, I have to keep my pencil sharp on the cost side of the ledger.

Every day I adopt the wisdom of IHCTD9 and have used garage sales ($5.00 paper shredder and $.10 rolls of paper for my printing calculator) and Kijiji.

Some people are odd but it is to my benefit. I need binders. Big ones. Lots of them. A gal downtown has 3 for sale for $3.00. So, she takes the time to post an ad with pictures. Answers two emails from me. Arranges a meeting. Accepts a stranger to her residence. Makes $3.00. I’m in her hood tomorrow anyway. I save about $30.

Catskinner, thanks for the perfect prairie pragmatism.

#177 SimplyPut7 on 08.02.17 at 12:09 pm

Statistics Canada released more data from the 2016 Census.

While the Canadian media focused on the number of single households in Canada, Bloomberg noticed it’s odd to have nearly 1 in 2 young adults living at home with their parents in Toronto:

The share of young adults living at home was highest in Ontario, at 42.1 percent. In Toronto, almost one in every two young adults lives with mom or dad (47.4 percent).

https://www.bloomberg.com/news/articles/2017-08-02/canadian-kids-live-longer-with-mom-and-dad-as-home-costs-soar

#178 Johnny Boy on 08.02.17 at 12:10 pm

President Trump unveiled a new immigration plan to move to a merit-based system, favoring green card applicants who speak English and can financially support their families, according to the President.

“Immigration demonstrates our compassion for struggling American families,” Trump said, adding that it “puts America first.”

The over-arching goal for this bill is to install a system where immigrants are allowed into the US based on their skills and contributions, rather than familial connections or a lottery.
Hurray I can immigrate to the USA and Smokie can not. I speak English who the hell knows what he speaks.
Actually I hate this and what it stands for, if this was the case my Italian parents would have never been able to come to Canada or the USA in the late 1940’s.

#179 Quotable Quotes on 08.02.17 at 12:13 pm

“I have the simplest tastes. I am always satisfied with the best.”
— Oscar Wilde

“The best way to cheer yourself up is to try to cheer someone else up.”
— Mark Twain

“The other night I ate at a real nice family restaurant. Every table had an argument going.”
— George Carlin

#180 NoName on 08.02.17 at 12:25 pm

#169 IHCTD9 on 08.02.17 at 10:53 am

Do you think your prospects might be better overall somewhere other than the GTA?

He have some cushi gov. job, or job that only customer is gov., so he is not going anywhere, or buying anything, re to expensive, dont trust bonds and stocks. But he likes trupm, the guy who sued deutsche bank for pain and sufering because he went on hard time in 2009 and he was unable to pay loan for his building…

If he realy wants re he would bough it by now. he was same last year with cpd, anything that doesnt go hes way he gets bit too upset. He should MAN up, sooner the better.

#181 n1tro on 08.02.17 at 12:26 pm

#178 Johnny Boy
Pretty sure the US will allow merit based in addition to existing traditional immigration claims eg. the total # of immigrants may not change, just the mix of who are coming in. This is similar to how Canada has it structured. This doesn’t bode well for skilled professionals getting screwed in Canada because they could just get citizenship in the US(?).

#182 Dan.t on 08.02.17 at 12:31 pm

#153
Yes banks will loan out to anyone with a heart beat and basically gave millions of locals the ability to speculate on real estate with virtually zero down so I agree… any supply gets bought up by speculators and amateur landlords.

Until money isn’t free, all supply will keep getting bought up. It is now law in Canada. Buy real estate, it never goes down.

And I knew the NDP would wimp out of their tough talk about affordable housing….nothing will change in BC. Big surprise, talk tough, tell the voters what they want to hear, get elected, go back on promises…liberals did it right,

Mess things up so bad that you get ousted right about the time it just can’t get worse, let another party clean up mess and if and probably once things blow up, all on the current gov… brilliant.

#183 WUL on 08.02.17 at 12:39 pm

0% of Ivanka Trump’s merchandise is made in America. MAGA.

#184 Bobby on 08.02.17 at 12:43 pm

Garth, not sure what you meant by debt-to-income ratio in Romania, but as Romanian living in Canada for 5 years I can tell you getting into debt in Romania is not easy, banks are very strict in that direction, there is no equivalent of CMHC, and now banks are favouring introducing a minimum 35% downpayment for mortgages. Also, amount of money in savings accounts vs amount of money borrowed is much higher than in Canada.
I agree the average salary is lower in Romania compared with Canada, and more poor people in Romania, but I guess Canadians have more DEBT compared with Romanians.

#185 45north on 08.02.17 at 12:44 pm

Paulo: my bet is we are at the 40% point of the gta correction. it has come on much quicker than i thought. the other 60% will come to pass over the next 18 months.

in the middle of the summer, GTA real estate has come down so hard I not making any bets.

Old Ron: A 20% decline in prices in 90 days is totally unprecedented.

totally

#186 40 something family man on 08.02.17 at 12:53 pm

#168
#174

Bulk of those assets were made through careful spending habits, hard work & career advancement. Owned a condo for a short time, but made only 75k on it, so not from RE.

At #174, you have anger issues and some serious insecurities about either not being a homeowner or being financially ‘inadequate’. I am on the east coast, nowhere near you house horny vancouverites!

#187 Hopeless Tenant on 08.02.17 at 1:02 pm

I wish I’d be in Romania, the country with the world’s highest home ownership – 96.4%. For a country of 20 million inhabitants, that says something. Their overall unemployment rate is also lower than ours.

Yes, it says ‘this is an underdeveloped country with cheap houses.’ Buy a McMansion (sort of ) for $90K. — Garth

#188 Johnny Boy on 08.02.17 at 1:02 pm

Prices are up downtown and in general still holding out in some areas as people are now forced to purchase high rise condos to live in. Lots of people still pouring into the city. Supply & demand. It may spread as the high SFH price is still way out there. A friend of our just came back from a stint in Atlanta to relocate back here with their family. My friend is stuck now as homes are out of reach and he hates high rise noise and the smell of your neighbours cooking, smoking etc.

http://www.torontoneighbourhoods.net/real-estate-updates

#189 oncebittwiceshy on 08.02.17 at 1:04 pm

#122 IHCTD9 on 08.01.17 at 11:09 pm
#57 MF on 08.01.17 at 7:59 pm

>>>>>>>>>>It’s a good time to buy. Wish I could.

MF
——–

You should ask yourself if you can afford an sfd at 600K, or a condo at 300K with a 7% interest rate.<<<<<<<<<<

Why should they wait for those kind of rate increases? Seriously, does anyone here bother to look at Realtor.ca before they post this nonsense.

Perhaps, you are speaking to the tonier areas of Toronto because there are 20 listings for Single Family Dwellings in the Toronto area under $600,000.

Mind you, by the end of next month there will be a heck of a lot more available.

Take your time and watch the show.

#190 jess on 08.02.17 at 1:10 pm

“the umpires of credit” what has changed to win business in the issuer pay model ?

SEC Announces Charges Against Standard & Poor’s for Fraudulent Ratings Misconduct
FOR IMMEDIATE RELEASE
2015-10
Washington D.C., Jan. 21, 2015
https://www.sec.gov/news/pressrelease/2015-10.html

https://www.bloomberg.com/news/articles/2017-08-02/the-great-escape-how-the-big-three-credit-raters-ducked-reform

#191 Ace Goodheart on 08.02.17 at 1:17 pm

187 Hopeless tenant comment re Romania.

What the high home ownership stats and low prices there likely mean is that people cannot get mortgages.

No mortgage availability means that everyone pays cash. A $1 million dollar house becomes a $100,000 house because that is all that people can afford with cash.

Basically the down payment becomes the sale price.

The more people can borrow the higher the price.

#192 Wrk.dover on 08.02.17 at 1:19 pm

#75 young & foolish on 08.01.17 at 8:50 pm

” It seems to me that RE is an illusion of stability and overly unrealistic optimism.”

Well, somewhat it is …. you are hoping that somebody will want to take over your place and live in it at some future date … not unlike a company equity trading at 20 times earnings, where you are hoping said company will continue to make sales and profits and somebody will want to buy your share at a higher price in the future.

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

With you thinking like that, I might be your Daddy, what is your mother’s name?

#193 Mike in Edm on 08.02.17 at 1:19 pm

#13 Mike on 08.01.17 at 6:14 pm

Still record prices in recession hit Edmonton. Care to comment? Up and above.
*********************************

Quit trying to continually pump Edmonton’s RE market. Do you really think any blog dog on here is going to believe you, or the fabricated stats of the EREB? I posted stats about a week ago about how listings are way up and prices are down something like 6% or 10% from last year…. And last year the outlook was pretty dismal in the province. I’d say it’s generally improving (in most cases, except RE).

I’m currently looking to buy in Edmonton or surrounding area, and you’re getting a LOT more house for your money compared to even 4-6 months ago right now. I’d say $50k more. Previously you couldn’t get what I would deem as a livable house for under $425k. Now you’re easily looking at $375k.

#194 jess on 08.02.17 at 1:20 pm

lookback

https://www.bloombergquint.com/markets/2016/10/25/in-m-a-ratings-soft-pedal-risks-in-biggest-ever-borrowing-binge

#195 Lee on 08.02.17 at 1:22 pm

None of yous is going to live anywhere but Canada except maybe for 6 months a year in Florida or California as a vacationer. So shuz up about it.

#196 InvestorsFriend on 08.02.17 at 1:38 pm

Be Happy Canada is not Cuba

Globe and Mail reports that Cuba puts break on private enterprise.

“The average state monthly wage (government worker) is $30 U.S. per month, the same sum a bed-and-breakfast owner can charge for one night”.

wow, what a great illustration of the failure of communism.

Raul Castro is concerned that some people now own three, four, even five restaurants which is a problem in a country that pledges to prevent accumulation of wealth by individuals.

Castro apparently prefers equality even when it means all are equally dirt poor.

Countries need to find some reasonable balance of reasonable median wealth (created with incentives to get rich) balanced with a level of wealth disparity that is not too offensive or socially disruptive. Perhaps it is the level where median income is highest that is optimal despite the disparity?

One area to attack: Excessive inter generational wealth passed on. Being extremely wealthy by mere inheritance does not create incentives or added wealth.

Have you ever read a story where the family cottage had to be sold to pay the taxes? I have.

Have you ever read a story about a really mega rich Canadian family having to sell a lot of shares when a huge corporation passes to the next generation? I have not and I have been reading the financial pages for forty years. Where is the capital gains tax? How is it paid if the wealth is mostly tied up in shares of a large company? Cleverly avoided in most cases I would guess.

Perhaps a past Revenue Minister can shed light.

#197 nothing will get.. on 08.02.17 at 1:44 pm

‘affordable’ as long as credit is disturbingly cheap. It is . And there will be no quick movement in rates.

this housing shit show is self-inflicted. Govt has screwed our youth. Buying an average house in say, Newmarket, for $600,000 is insane. Sad what’s happened in Canada

#198 Dups on 08.02.17 at 1:50 pm

Dow Jones plugs away breaking 22000….
TSX limps up and down at 15000….
but we have a strong dollar, for now that is…

Meanwhile in US of A article below mentions Canada housing as well….

https://www.inman.com/2017/08/02/strengthening-u-s-dollar-constricting-foreign-homebuyer-affordability-zillow/

#199 Smartalox on 08.02.17 at 2:00 pm

For those asking how the GTA can support so many real estate agents, where many may only average one or two sales a year – making minimum wage after costs are factored in, most of those agents, despite demanding recognition as ‘professionals’ are typically employed at other careers, and dealing real estate on the side.

When the work dries up, these agents will go back to their day jobs, (Nursing, Fire protection, law enforcement, teaching, etc.) their back-up plans, etc.

A lucky few might have made enough to retire, or may have saved their earnings, or paid off their homes, but it is possible that some ‘got high on their own supply’ and have accumulated multiple properties and debt.

Or, they took the RE course right out of High School or College. These 20-somethings, following in Mom and Dad’s footsteps, no doubt, have few marketable skills, beyond the ability to fill in pre-printed forms, these will be the ones hardest hit by the slowdown.

#200 chopstix on 08.02.17 at 2:16 pm

#182 Dan.t on 08.02.17 at 12:31 pm
#153
Yes banks will loan out to anyone with a heart beat and basically gave millions of locals the ability to speculate on real estate with virtually zero down so I agree… any supply gets bought up by speculators and amateur landlords.

Until money isn’t free, all supply will keep getting bought up. It is now law in Canada. Buy real estate, it never goes down.

And I knew the NDP would wimp out of their tough talk about affordable housing….nothing will change in BC. Big surprise, talk tough, tell the voters what they want to hear, get elected, go back on promises…liberals did it right,

Mess things up so bad that you get ousted right about the time it just can’t get worse, let another party clean up mess and if and probably once things blow up, all on the current gov… brilliant.
——————————————————
bc ndp: what are you talking about: they annoucned that they’re reviewing policies/issues around RE/housing…seems that they might tweak up or down policies, eliminate certain ones, or come out with new ones altogether?
so the bc libs had it right eh? those greasy mofos f*ked over the middle class in BC…useless Rich fatass Coleman and his unbridled allowance of fixed term leases to go ahead ”because the issue is complicated” lmao…having one’s rent possibly go up 10-50% is thievery..or to allow for demo/reno victions to displace so many people in the lower mainland.

hell according to christy clark to afford a house in Vancouver just meant riding along BC’s economic powerhouse where ”better paying jobs” would be just the $$$ solution? Really?
that is too funny as i haven’t seen my pay increase 30-75% over the last few yrs in allignment with the prices of RE in Scamcouver…have yours?

and again, had it not been fort he superb and shaming reporting from Globe writers Kathy Tomlinson or Kerry Gold (etc) on the tone deaf BC libs ignoring shady RE sales practices (shadow flipping etc) then nothing would have been done…no wonder the BC libs lost seats in the lower mainland….huge anger out there.

#201 chopstix on 08.02.17 at 2:17 pm

#182 Dan.t on 08.02.17 at 12:31 pm
#153
Yes banks will loan out to anyone with a heart beat and basically gave millions of locals the ability to speculate on real estate with virtually zero down so I agree… any supply gets bought up by speculators and amateur landlords.

Until money isn’t free, all supply will keep getting bought up. It is now law in Canada. Buy real estate, it never goes down.

And I knew the NDP would wimp out of their tough talk about affordable housing….nothing will change in BC. Big surprise, talk tough, tell the voters what they want to hear, get elected, go back on promises…liberals did it right,

Mess things up so bad that you get ousted right about the time it just can’t get worse, let another party clean up mess and if and probably once things blow up, all on the current gov… brilliant.
——————————————————
bc ndp: what are you talking about: they annoucned that they’re reviewing policies/issues around RE/housing…seems that they might tweak up or down policies, eliminate certain ones, or come out with new ones altogether?
so the bc libs had it right eh? those grease balls screwed over alot of the middle class in BC…useless Rich fatass Coleman and his unbridled allowance of fixed term leases to go ahead ”because the issue is complicated” lmao…having one’s rent possibly go up 10-50% is thievery..or to allow for demo/reno victions to displace so many people in the lower mainland.

hell according to christy clark to afford a house in Vancouver just meant riding along BC’s economic powerhouse where ”better paying jobs” would be just the $$$ solution? Really?
that is too funny as i haven’t seen my pay increase 30-75% over the last few yrs in allignment with the prices of RE in Scamcouver…have yours?

and again, had it not been fort he superb and shaming reporting from Globe writers Kathy Tomlinson or Kerry Gold (etc) on the tone deaf BC libs ignoring shady RE sales practices (shadow flipping etc) then nothing would have been done…no wonder the BC libs lost seats in the lower mainland….huge anger out there.

#202 Stan Broock on 08.02.17 at 2:19 pm

Yes, it says ‘this is an underdeveloped country with cheap houses.’ Buy a McMansion (sort of ) for $90K. — Garth

———————–
Sure,

1. You should visit Bucharest. It was called ‘The little Paris’ 100 years ago.

2. Canadian magazine lists Romanian castles among world’s most beautiful
https://www.romania-insider.com/canadian-magazine-romanian-castles/

3. Underdeveloped country?
Last time I was there, they were opening high tech companies, regional offices for Oracle, IBM, etc.
Romania consistently ranks among the top countries in international math competitions.

4. Transylvania is gorgeous. The Danube delta is one of the most beautiful places on earth with abundance of wild life.

5. Nobody lives in McMansions, people live in real-brick-solid houses and low rise apartment (owned, no condo fees) buildings.

6. If you are Romanian you can travel and work anywhere in EU without visa, work permit or any sort of diploma evaluation. Try that as Canadian.

7. Romania’s debt to GDP is one of the lowest in the world.

So, move. A nice house costs less than 90K. — Garth

#203 Stan Broock on 08.02.17 at 2:25 pm

#184 Bobby on 08.02.17 at 12:43 pm

(Romanian in Canada for 5 years).
You are wasting you life and that of your kids. Don’t.

#204 bdwy sktrn on 08.02.17 at 2:29 pm

#189 oncebittwiceshy on 08.02.17 at 1:04 pm
#122 IHCTD9 on 08.01.17 at 11:09 pm
#57 MF on 08.01.17 at 7:59 pm

>>>>>>>>>>It’s a good time to buy. Wish I could.

MF
——–

You should ask yourself if you can afford an sfd at 600K, or a condo at 300K with a 7% interest rate.<<<<<<<<<<

Why should they wait for those kind of rate increases? Seriously, does anyone here bother to look at Realtor.ca before they post this nonsense.

Perhaps, you are speaking to the tonier areas of Toronto because there are 20 listings for Single Family Dwellings in the Toronto area under $600,000.
——————————-
meanwhile in yvr there is exactly 1 (one) listing for a sfh for under 1m (988k). it's on boundary rd, in the shadow of the freeway.

van powers on, july looked slower for volume in my hood, prices sky high as ever (about 60% higher than 2013)

see 3rd ave land assy. – 3.2m ask for lots that were sub 1m in 2012.

who is waiting for a 604 crash? is that you vreu????

#205 Stan Broock on 08.02.17 at 2:44 pm

So, move. A nice house costs less than 90K. — Garth
—————————–
1. I already moved to comparable/better weather place.

2. It is time to address our ignorance, we can’t just mock people we know nothing about specially if they live better life than us.

3. This is the best advice I can give to any Canadian retiree specially from Romanian descent: Move.

BTW nice house in Bucharest is more than 90 k USD.
Nobody lives in basements or wooden particle houses.

Disclaimer: I am not a Romanian.
Just found Romania, Slovenia, Croatia, Spain, to be much, much better places to live in both in terms of cost of living and people. That’s all.

#206 Bob Dog on 08.02.17 at 2:58 pm

‘chortling about their fecund equity’

I plan to make use of that gem here in delusional Vancouver.

“the best place on earth “, if you have never lived anyplace else.

#207 jess on 08.02.17 at 3:03 pm

5 Victoria Real Estate Update
…”Then house prices in San Francisco fell 45% in 3 years.”
========================
Is there a shortage of “skilled workers” or a shortage of paychecks that can support those housing costs?

what happens when techie’s are lured to other hubs with cheaper housing /services?

“This is the place where a 25-year-old made national news in March for paying $400 a month to live in a wooden box in a friend’s living room. Where a 99-year-old widow went to court in April to fight eviction from the flat she’d lived in since the 1940s. Where the cheapest home for sale in late July was fire-gutted, uninhabitable and still cost $228,000. ”
https://www.theguardian.com/business/2016/aug/05/high-house-prices-san-francisco-tech-boom-inequality

“During the last school year, the average pay for teachers working in the San Francisco Unified School District was $65,240, placing it at No. 528 among the 821 school districts that reported data to the state Department of Education. (Unlike San Francisco, a small number of districts included the cost of benefits in their pay data, which could slightly skew the numbers. The salary figures also do not include the value of benefits, which vary from district to district.)…To afford a one-bedroom unit in the city at the median monthly rate of $3,500, the average teacher would have to spend 64 percent of his or her salary on housing — by far the highest proportion of any large school district in California.
http://projects.sfchronicle.com/2016/teacher-pay/
Doing the math: Rent costs and teacher pay
Federal guidelines recommend spending no more than 30 percent of annual income on housing, but that’s difficult for San Fancisco teachers. Out of the 115 largest school districts in the state, San Francisco teachers had by far the worst pay-to-rent proportion, with Oakland and Berkeley a distant second and third.
http://brokeassstuart.com/blog/2016/10/11/102066/
http://www.sfchronicle.com/bayarea/article/Higher-paying-jobs-than-SF-teacher-City-baker-7890594.php

#208 Kim on 08.02.17 at 3:12 pm

Fact is while people point to the sales mix as to why average prices in YVR are dropping this means something. It means that high end properties (detached) are not selling. So while people list detached homes for 2 million plus, that house really isn’t worth that much. With christys free money set to expire in under five years those folks who borrowed for their down payment better repay quickly or prepare to pay higher rates when eventually that free money ends.

#209 Nick - i started this on 08.02.17 at 3:24 pm

I started this more as a joke! A Canadian Citizen since 1986 and extremely proud of it! I also lived in Germany for 21 years and for 21 long years I dreamt about returning to Canada. One can.not compare Romania to Canada (well the communists weren’t in power here for almost 50 years), but by the same token we shouldn’t use Romania as as system of reference. There are other countries that weren’t “blessed” by the communism and not doing much better. Since you know so much about Romania I won’t exemplify this. Garth, I’ve been reading you blog since my return to Canada in 2010. I respect it and enjoy it almost every day. Because of it I didn’t buy a house in 2010 although I could have done it, at the time, in cash. I’ve been happily renting for all this years and evidently losing money. Do I regret it. Not one bit. I never wanted to be a part of this madness. A house should be a home first and foremost! I could be naive, some would call me an idiot, but I am a free Canadian and it is my choice to react like this. My dream in life was to be a free person. My dream came true in November 1982 as I crossed the Canadian border. Everything else not important!

#210 Happy Housing Crash Everyone! on 08.02.17 at 3:25 pm

The amount of financial pain and screams from realtors on this blog is to funny. you can read between the lines to see they scream in horrible financial pain. No sales….no money. It’s funny they lie trying to make it seem nothing has changed when its those lies which will cause sales to stall longer. seller who believe lies will hold propety and not drop prices which will result in NO SALE and thus No money for shyster realtors. keep lying and screaming in financial pain. Happy HAPPY Housing Crash Everyone! :-)

#211 Lillooet, BC on 08.02.17 at 3:31 pm

#202 Stan Broock on 08.02.17 at 2:19 pm
Yes, it says ‘this is an underdeveloped country with cheap houses.’ Buy a McMansion (sort of ) for $90K. — Garth

———————–

So, move. A nice house costs less than 90K. — Garth

**********

Garth: where is your politician’s politically correct wisdom?

Stan chose to immigrate to Canada for a reason.

#212 IHCTD9 on 08.02.17 at 3:44 pm

#189 oncebittwiceshy on 08.02.17 at 1:04 pm
#122 IHCTD9 on 08.01.17 at 11:09 pm
#57 MF on 08.01.17 at 7:59 pm

>>>>>>>>>>It’s a good time to buy. Wish I could.

MF
——–

You should ask yourself if you can afford an sfd at 600K, or a condo at 300K with a 7% interest rate.<<<<<<<<<<

Why should they wait for those kind of rate increases?

———-

Who said anything about waiting? My post was more about finally hanging your hat on the likelihood of ever being able to afford a house. I know full well how stupid the prices are in the GTA, hence I encouraged MF to call it and move ahead with life as it will likely unfold for him.

If he can't do 600K, he will rent forever in the GTA, it won't ever cost less unless -Kim Jung Un lobs that nuke. No point in waiting, better to start doing (move to a more affordable part of the country, increase income if possible, save like Tretiak, start searching for buried treasure, etc…)

#213 NoName on 08.02.17 at 3:44 pm

Romanians

As I type work with couple of Romanians and I worked with one years back, other than having determination not to change attitude or in some cases antiquated views on something, they are good guys. And when they bring me home made pálinka usually 80-90 proof I forgive them stoubernes.
They have nice monastery in mono somewhere, couple of times during summer they hold what i call food festival (might be something more serious than that), I invited myself and my son few months back for “michi”, nice very nice. I am going definitely in September.

Only thing dudes start to ackt bit funny when I bring some garlic… But no one wants to go back, they say to much corruption. Greece is countri of choice for retirement.

#214 George on 08.02.17 at 3:55 pm

Since Canada is a socialist/marxist country ruled by Liberals there won’t be any crash neither in Toronto nor in Van. Media will manipulate the same way they did in 2008 and it will sugar-coat real numbers. We will be told that price drop is over and it’s a good time to buy and similar drivel. And guess what? Everyone (well almost) believe and run to buy houses again. People are so naive they believe that Canadian press is unbiased))) No one is interested in crash (some price drop maybe) so the Government will be orchestrating further debt slavery…

#215 SFH on 08.02.17 at 4:02 pm

#204 broadway skytrain
meanwhile in yvr there is exactly 1 (one) listing for a sfh for under 1m (988k).

Also, there is this quaint SFH for sale, on Granville Island no less! Not even 930k. I wonder what the story behind that is. You can only purchase it as shares in a corp?

https://www.realtor.ca/Residential/Single-Family/18246987/10—10-1301-JOHNSTON-STREET-Vancouver-British-Columbia-V6H3R9

#216 IHCTD9 on 08.02.17 at 4:12 pm

#176 WUL on 08.02.17 at 12:08 pm
With my return to Calgary from Fort Mac on July 1 and my commencement of my new life as a small business owning, job creating entrepreneur, I have to keep my pencil sharp on the cost side of the ledger.

Every day I adopt the wisdom of IHCTD9 and have used garage sales ($5.00 paper shredder and $.10 rolls of paper for my printing calculator) and Kijiji.

Some people are odd but it is to my benefit. I need binders. Big ones. Lots of them. A gal downtown has 3 for sale for $3.00. So, she takes the time to post an ad with pictures. Answers two emails from me. Arranges a meeting. Accepts a stranger to her residence. Makes $3.00. I’m in her hood tomorrow anyway. I save about $30.

Catskinner, thanks for the perfect prairie pragmatism.
———

Good luck with your new venture WUL, hopefully PETA does not come for me after that Catskinner comment. If they do, I may require your legal expertise :).

#217 IHCTD9 on 08.02.17 at 4:22 pm

#178 Johnny Boy on 08.02.17 at 12:10 pm
President Trump unveiled a new immigration plan to move to a merit-based system, favoring green card applicants who speak English and can financially support their families, according to the President.

“Immigration demonstrates our compassion for struggling American families,” Trump said, adding that it “puts America first.”

The over-arching goal for this bill is to install a system where immigrants are allowed into the US based on their skills and contributions, rather than familial connections or a lottery.
Hurray I can immigrate to the USA and Smokie can not. I speak English who the hell knows what he speaks.
Actually I hate this and what it stands for, if this was the case my Italian parents would have never been able to come to Canada or the USA in the late 1940’s.
——–

Is this merit based system not what Canada has had for decades already? Maybe a resident immigrant dog can confirm.

I think the US system is currently, “first come, first serve”.

#218 oncebittwiceshy on 08.02.17 at 4:29 pm

>>>>>>>>>>>#204 bdwy sktrn: meanwhile in yvr there is exactly 1 (one) listing for a sfh for under 1m (988k). it’s on boundary rd, in the shadow of the freeway.

van powers on, july looked slower for volume in my hood, prices sky high as ever (about 60% higher than 2013)

see 3rd ave land assy. – 3.2m ask for lots that were sub 1m in 2012.

who is waiting for a 604 crash? is that you vreu????<<<<<<<<<<<<<<

Except nobody is buying. C'mon Bdwy, use your equity while you've got it …. hopefully, you're an old man with a lot of equity.

It's only day 2 of August and Realtycheck.ca shows us where the Vancouver market is headed again.

Average Change: -5.50% Up:1 Down:11
Overall $ Change: -4569100.00 Average Change Amount:-380758.33

Oh, I'm sorry, you wanted to know what was happening last month.

Average Change: -2.50% Up:106 Down:304
Overall $ Change: -48646995.00 Average Change Amount:-118651.21

It's too much fun when the "bulls" start comparing prices to 4 and 5 years ago as proof of rising prices. It would be even more impressive if you said 1980. Lol

Sorry, buds, Flop is outgunning you again. Why don't you list your house at $5,000,000 and tell everyone how much equity you have … when it sells. Lol.

#219 IHCTD9 on 08.02.17 at 4:39 pm

#181 n1tro on 08.02.17 at 12:26 pm
This doesn’t bode well for skilled professionals getting screwed in Canada because they could just get citizenship in the US(?).

——-

Could happen. I worked with a couple Chinese dudes who both applied to the USA. The line was massive so they ended up here in Canada because both were engineers and got bumped up the line due to how our system works.

If they got bumped up the US wait line, they’d both probably be Americans right now.

#220 IHCTD9 on 08.02.17 at 4:50 pm

#186 40 something family man on 08.02.17 at 12:53 pm
#168
#174

Bulk of those assets were made through careful spending habits, hard work & career advancement. Owned a condo for a short time, but made only 75k on it, so not from RE.

———

That is sweet, and living on the EC makes it sweeter still. If I were you, I’d probably be looking at an early retirement. I could really use the spare time to keep the antique Dozers running!

#221 Dan.t on 08.02.17 at 5:18 pm

#201 chopstix
“bc libs had it right eh? those grease balls screwed over alot of the middle class in BC…useless Rich fatass Coleman and his unbridled allowance of fixed term leases to go ahead ”because the issue is complicated” lmao…having one’s rent possibly go up 10-50% is thievery..or to allow for demo/reno victions to displace so many people in the lower mainland.

hell according to christy clark to afford a house in Vancouver just meant riding along BC’s economic powerhouse where ”better paying jobs” would be just the $$$ solution? Really?
that is too funny as i haven’t seen my pay increase 30-75% over the last few yrs in allignment with the prices of RE in Scamcouver…have yours?

and again, had it not been fort he superb and shaming reporting from Globe writers Kathy Tomlinson or Kerry Gold (etc) on the tone deaf BC libs ignoring shady RE sales practices (shadow flipping etc) then nothing would have been done…no wonder the BC libs lost seats in the lower mainland….huge anger out there.”

YES, I visit every year and I am pissed at what has been going on there and how things have gone for the worst. I’ve been away a long time but even the people have changed, and not for the better.

Everyone who bought 25 years ago, cashing out, pushing up prices all over surrounding areas, acting like they are “real estate geniuses” but really just got luck buying a run down 1972 build house they could afford in Burnaby 22 years ago, and now have 1.5 mil cash in the bank (if they cashed out) but of course on first meeting, they will tell you all about their brilliant “investing” foresight.

24/7 real estate talk, it is seriously annoying. Nothing else seems to matter there. And year after year it gets worse. I understand why that is all people talk about, because they are stuck between buying massive inflated crap or getting screwed by rent increases and or no rental units (that are actually affordable)…. so ya, liberals really screwed up YVR

The person that thinks I m a bull, disguised as a bear, I’m just impatient and annoyed. It should have turned in 2015, rates dropped again, reassuring everyone, it really is different, load up on debt, the even last year,

is Christy Clark for real, sure 2 mortgages is the answer to affordability? Believe me I am outside BC, and pissed.. glad liberals are gone.

I need about another month to shake the bubble disease… then I won’t care so much. But I still hope BC real estate and all the speculators get their arse handed to them. Why? Because housing should NOT be used to speculate and treat as a commodity, with tax breaks, incentives and a crap load of free money used as leverage.

#222 oncebittwiceshy on 08.02.17 at 5:21 pm

>>>>#212 IHCTD9 on 08.02.17 at 3:44 pm “If he can’t do 600K, he will rent forever in the GTA, it won’t ever cost less unless -Kim Jung Un lobs that nuke. No point in waiting, better to start doing (move to a more affordable part of the country, increase income if possible, save like Tretiak, start searching for buried treasure, etc…)”

… and next month you’ll be saying if you can’t afford $500,000 …. la la la

… and the month after that you’ll be saying if you can’t afford $400,000 … la la la

Similar to the run up where the poor schmucks were afraid they were going to miss out, the next buyers are afraid they are going to miss out on a fire sale and they will keep waiting. It’s call market sentiment. It’s a bitch on the way down.

#223 Chaddywack on 08.02.17 at 5:23 pm

Vancouver benchmark prices for all real estate exceeds $1M.

http://globalnews.ca/news/3643458/vancouvers-benchmark-house-price-cracks-1m/

There’s going to be a lot of people who need over 20% down now!

#224 Contrarian Coyote on 08.02.17 at 6:21 pm

I wonder how close the relationship is between a slowing/falling market and the amount of RE shilling by agents/investors/developers? A lot of low-value trolling & shilling worthy of 4chan from some of them. My personal anecdotes are 2 of my former classmates from our MBA program, now RE agents in the GTA. They’re LinkedIn and socmedia posting has suddenly become a lot more frequent. Either they’re doing so well they don’t need to sell or they have a whole lot more time on their hands.

#225 Smartalox on 08.02.17 at 6:37 pm

REBGV Stats out today. At least the headline on the press release ‘smells’ honest: Metro Vancouver sees fewer sales, more listings

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

If you push past the HPI pages to page 6 the sales facts, you see figures to compare ‘Year to Date’ sales (i.e.: deals that closed, Jan to July). You have to do some math, but if you take the time, you’ll see that detached sales are down 20% overall across the region:

down 10% in Van Eastside
down 12% in North Van
down 16% in Burnaby
down 19% in West Van / Howe Sound
down 20% in Richmond
down 23% in Van Westside
down 25% in Maple Ridge / Pitt Meadows
down 27% in Coquitlam
down 30% in PoCo
down 37% in New West

These are significant drops in sales volumes, over the course of several months, that take seasonal variation into account.

It’s one thing to have a ‘down month’ because of weather, or temperatures., but this is evidence of a sustained and accelerating trend.

#226 ImGonnaBeSick on 08.03.17 at 10:31 am

@ #196 InvestorsFriend

What a pet-peeve it is of mine when people on this blog start recommending more taxes. Just stop it! Recommend government cutting, not trying to come up with new ways to remove wealth… You’re no friend to this investor.

#227 DON on 08.03.17 at 12:16 pm

Special Delivery for Garth

http://www.cbc.ca/news/canada/british-columbia/buyer-who-walked-away-from-real-estate-deal-ordered-to-pay-360k-1.4232844

Buyer who walked away from real estate deal ordered to pay $360K

by Lisa Johnson

Would-be buyer ordered to pay the difference between the price he walked out on and what the house eventually sold for, with realtor blaming cooler market following foreign buyers’ tax.

Posted: Aug 03, 2017 5:00 AM PT