The envy tax

If memory serves, this blog has foamed on in the past about the right to own property. You don’t have it. Nobody does. Because it’s not included in our Charter of Rights, governments at all levels can pretty much have their way with you. As is now the case.

(It was twenty-five years ago when, as a badass MP, I was able to persuade the federal government to include this right in a constitutional reform that also recognized Quebec as distinct. Canadians rejected the pact in a referendum. Harper later granted Quebec its special status, but refused to move on giving citizens property rights – which SJWs and greenies hate. Moisters, too now.)

The latest assault is a special tax aimed at people who don’t live in their houses enough. Vancouver brought in this silly levy earlier this year. Now Toronto is poised to do the same. The Ontario government, as part of its anti-bubble crusade announced in April, has granted municipalities the right to punish homeowners or investors for having any dwelling that is not lived in for six months.

In July the lefty councillors running the GTA adopted a report on taxing “empty” houses, and this week the city launched its consultation process – the precursor to passing this into law. The centrepiece is an online survey which automatically rejects responses from anyone not currently owning or renting in the region. So much for democracy. The basic questions are: should the tax be implemented?; what are the “potential public policy benefits of a property tax on vacant residential units” (there’s no mention of potential negatives.); and how should the tax be implemented.

If the Vancouver model is followed, everybody will have to file a form declaring their home is a principal residence, occupied by a family member or leased. If it’s empty for six months – and being unable to lease or sell it for the price you want doesn’t count – you’re taxed. Bigly. It’s 1% of the value of the property per year, which is about $700 a month on the average GTA digs.

The YVR experience so far is dismal. The city raised about $2.2 million in tax and spent $1.5 million collecting it. There is zero evidence rents anywhere have come down, that the rental stock has increased and meanwhile condo prices are 20% ahead of last year. The stated goal of forcing people with under-utilized properties to either sell them off or rent them out has not been realized. And, likely, it never will.

The empty house tax in both cities has its biggest support in Generation Squeeze, the moister-led, shared-economy, self-marginalizing outfit that would be happy to see Boomers hanging by their private bits from park lamp posts. The tax isn’t actually designed to raise a lot of revenue, says Head Squeezer Paul Kershaw, “but instead to change the incentives for how people use the real estate they own.” And Paul’s a smart boy. He knows you have no property rights.

Real estate is all class warfare now, with a healthy sprinkling of ageism, covered in the sauce of envy and entitlement. The empty houses tax is really a punishment of people with more than one place in which to live, since almost all amateur landlords are hot to lease their units and collect rent. Just as the Chinese were falsely blamed for a run-up in prices that cheap rates and house lust caused, so empty houses are held out as the reason for high rents. But tenants fork over a lot because they live in more valuable accommodation. When bubbles inflate, everyone pays.

Well, a few months ago I gave this summary of the Vancouver empty-house tax.

The argument in favour:
Houses are too expensive for average people to buy, which has placed big pressure on the rental market where vacancy rates are low, competition among tenants is stiff, and landlords are rentier bourgeoisie who should probably be gelded.

Says the Van mayor: “In a rental housing crisis, it’s unacceptable for so much housing to be treated as a commodity while people who live and work in Vancouver can’t find an affordable and secure place to live. Housing is for homes first, investments second. The Empty Homes Tax will help ensure the best use of all our housing, and boost long term rental supply by bringing thousands of homes back into the market.”

(By this logic, anyone with a house they live in full-time with an idle basement suite, or two empty bedrooms the kids used to occupy, is an equal target.)

The argument against:
Lots of people have secondary homes they live in part of the time – like downtown condos used for business purposes every single week of the year. That makes them unrentable, of course. Besides, the owners pay 100% of the property tax yet consume fewer services. And by avoiding a long daily commute, they curb the car and reduce pollution. Moreover, as owners they paid land transfer tax, fork out condo or strata fees, look after utility bills and contribute just as much to the local economy as some moister tenant.

Toronto is the financial capital of the country with thousands of Americans (and Europeans) working there at any one time for cross-border corporations. Many of them find it cheaper and more stable to buy than rent, so why should they be slapped with a tax on a property that’s occupied full-time? If we want urban centres which compete internationally, attracting global investment capital, why act like hicks and dorks?

So, I’ll say it again. This is no tax on empty houses. It’s a tax on the affluent who can afford downtown digs or need a place in another city. It will add no new stock to the tenancy market, or drop rents. It’s an assault on the right to own property which you don’t have. (Did I mention that?) And it’s a sop to those who would like us all to be equal.

Empty-houses taxes in Vancouver and Toronto may well breed similar in Victoria and Ottawa. One more nail in the property coffin, along with the AirBnB assault, universal rent controls, stress tests and rate hikes.

So, relax Squeezers. Rents will go down. Mr. Market has a way of looking after these things all on his own. Brutally.

229 comments ↓

#1 Happy Housing Crash Everyone! on 08.22.17 at 5:34 pm

Happy HAPPY Housing Crash you dirty Shysters. You are financially suffering as sales have crashed. You know it and we know it. :-)

#2 Firstman on 08.22.17 at 5:36 pm

Omg first!!!!

#3 dalio right? on 08.22.17 at 5:36 pm

Interest rates contributing factor to huge home price increases:

Ray Dalio says no major rate increases

https://www.youtube.com/watch?v=z9K6WhPUyUI&t=499s

#4 Happy Housing Crash Everyone! on 08.22.17 at 5:38 pm

Wishing all the Shysters a Happy Housing and personal financial CRASH! :-)

If realtors owe the government back taxes can they go bankrupt and not pay the government money? I hope they have to pay the government back . Imagine owing 60k plus in back taxes and working for minimum wage.

Happy Housing Crash Everyone Everyone! :-)

#5 Firstman on 08.22.17 at 5:40 pm

How is the average Canadian mortgage value $200k?

This was in the news today. I assume they mean the average Canadian mortgage balance?

Maybe people who have paid off their mortgages are included in it? I just don’t see the average person saving like > $100k for a house. I don’t buy that.

#6 waiting on the westcoast on 08.22.17 at 5:40 pm

If you could just convince the politicians and economists that the market would take care of itself, these artificial bubbles would be replaced by smaller, quicker cycles as the market fixes it’s aberrations…

Instead, we are getting numerous entitlement campaigns and politicians who pander to them. It can’t last…

#7 -=jwk=- on 08.22.17 at 5:50 pm

Ottawa house appreciation has been flat for 10 years. Don’t expect that to change much in the next 10.

In the 2 years we’ve been here home prices and rentals have never been a subject of conversation here. People are fascinated to know how much their house would be worth in Toronto, and they are horrifed that our house (A 4/4 2000sf backing onto greenspace, 55′ lot) would be a tear down because it is ‘too small’ and has linoleum in the kitchen. and actual wooden floors. They just shake their heads in disbelief “so a builder would play you 1M dollars for this beautiful home to thrown it in the garbage?” yup. ” and they build two homes on 27.5 lots?” yup” and those would cost 1.4M each? “yup. It’s our standard party trick when new friends find out we fled GTA.

Thats the end of conversation. The Bubble doesn’t exist outside the GTA.

#8 jimbob on 08.22.17 at 6:01 pm

My son and his 3 university roommates just rented a house (not fancy; it doesn’t have a dishwasher or a finished basement) near the University in Vancouver for $3800/month. The property was purchased two months previously for $4,000,000. Taxes are $12,000 a year.
Is this a situation where an investor is willing to get less than a 1% per annum return on his investment while hoping prices continue to rise or is it a case of offshore money being parked in Vancouver real estate?
I suspect the latter.
The empty house tax of $1000 a month creates a situation where the offshore owner needs to pay monthly and creates an unwanted paper trail; to avoid that they rent the property out via an agent. So there is a benefit to the empty house tax in creating more rentals.

#9 paulo on 08.22.17 at 6:01 pm

To borrow a phrase or handle used here before:

Wheres the money Guido. local governments and particularly the gang running the GTA have a serious problem. firstly many of the fools that bought at the top of the market are not getting there property taxes in on time. secondly the gravy train of goverment fee’s won on resales are drying up, add to that the prospect of significant decreases in property tax valuations that will eventually equate into reduced general property tax revenue,the x checker has a significant problem.
time to create new revenue streams to replace the lost revenue. as despite what mortgage holders think,the crown has omnipotent powers over property owners that actually have no rights other than to be taxed to death. unfortunately this vacant home tax will almost certainly be implemented. its a wounder full life!

#10 Bob on 08.22.17 at 6:03 pm

Someone once said that “rights are rights are rights are rights ” in relation to the human condition…

…except in Canada in 2017.

#11 Engineer on 08.22.17 at 6:16 pm

How would this work for estates? It can easily take over six months after someone passes away for their executors to empty a house and prepare it to be sold/rented.

#12 Cecil Henry on 08.22.17 at 6:17 pm

Where the productive man dreams of the things he might create if only left alone by his fellows, the Progressive dreams of the world he could create if only the lives and property of his fellows were at his disposal.
This evil stems from the desire for power to rule over other men.

Socialism is theft: The competent are taxed to subsidize the prolifeation of the incompetent. The law abiding and upstanding citizes are taxed to make it possible for others to be less law abiding, more selfish and more self indulgent. IT must STOP.

Canada is not a free country: everything is on loan.

Freedom of association, private property, free speech, freedom of religion, the right to self-defense, freedom from usury (state imposed or otherwise)

And on it goes….

#13 Tim on 08.22.17 at 6:20 pm

Are you completely clueless or just an apologist for real estate speculators? Vancouver has be ruined by speculators pushing prices too high causing many to leave the city and many who stay behind are living in crappy overpriced apartments. Why shouldn’t speculators be taxed?

#14 TortyPapa on 08.22.17 at 6:23 pm

Prices in Vancouver are still astronomical for residents. I am speechless at how normal people are able to afford to buy a single detach on the west side. Condo living is now the normal for a lot of families.

#15 BS on 08.22.17 at 6:26 pm

Lots of people have secondary homes they live in part of the time – like downtown condos used for business purposes every single week of the year. That makes them unrentable, of course. Besides, the owners pay 100% of the property tax yet consume fewer services.

In Vancouver the Residential property tax rate is 0.256%.

The Business property tax rate is 1.245%.

If you are using a residential condo for business then you are not paying the correct tax rate anyway. If you are paying the business rate you are exempt from the empty home tax.

With the empty home tax of 1% it makes the residential rate the same as the business rate at 1.256%.

#16 Fran Deck Jr. on 08.22.17 at 6:27 pm

Hey Garth, what about the snowbirds? Aren’t there more than 6 million Canadians who spend their winters in FLA and AZ? Isn’t there talk about extending the amount of time we can spend in the States from 6 to 8 months? Residents of Vancouver and Toronto will now have to pay a “fee” to the city to escape the dreadful weather in this miserable postmodern miasma of decrepitude that serves no purpose except to rip us off because that’s what marxists do … A “vacancy tax” is something right out of Stalin’s Russia because it serves no purpose except to punish those who have worked their whole lives to retire in dignity in the land of hope and glory where individual rights are respected and government is elected to serve the people … If ever there was an issue to vote John Tory out-of-office is is it.

#17 Dave on 08.22.17 at 6:28 pm

Both my wife and I in Toronto and our folks in Mississauga and Brampton respectively have houses in our neighborhood that are clearly vacant. Their lawns are terrible, they’re falling into disrepair and need a lot of work. Some are people who moved for work and didn’t sell, some were inherited and they didn’t have the resources to probate or the know-how or have put off selling due to the emotional distress of it all. It’s crazy to think these people will be forced to rent as the houses are all clearly unsuitable for occupancy or sell when they would also be worth a lot more by simply waiting or eventually renovating. My uncles mom passed and he did nothing with her house for 5 years due to guilt and emotional pain. It was a savvy move as the house appreciated about 250k in the meantime. That should have been his choice and nobody else should have got a say in my opinion.

#18 Michael Francis on 08.22.17 at 6:29 pm

If a house is vacant, how does the Government know.
The only way I can think off is by power and water consumption readings, but that can be rigged using an app.

#19 mouldyinYVR on 08.22.17 at 6:33 pm

Are we at peak house in YVR? Too soon to tell……
http://www.rebgv.org/monthly-reports/july-2017

“The Real Estate Board of Greater Vancouver (REBGV) reports that residential property sales in the region totalled 2,960 in July 2017, an 8.2 per cent decrease from the 3,226 sales recorded in July 2016, and a decrease of 24 per cent compared to June 2017 when 3,893 homes sold.
Sales of detached properties in July 2017 reached 949, a decrease of 11.9 per cent from the 1,077 detached sales recorded in July 2016. The benchmark price for detached properties is $1,612,400. This represents a 1.9 per cent increase from July 2016 and a 1.5 per cent increase compared to June 2017.

Sales of apartment properties reached 1,468 in July 2017, a decrease of 8.4 per cent compared to the 1,602 sales in July 2016. The benchmark price of an apartment property is $616,600. This represents an 18.5 per cent increase from July 2016 and a 2.7 per cent increase compared to June 2017.”

#20 rainclouds on 08.22.17 at 6:38 pm

Upon further inspection of the proclamation nailed to the elevator wall in my building this week regarding Short Term Rentals.

“All Short term rentals reported to the strata council as a violation of the Strata Act. (Less than 30 Days)”

The Strata is now obligated to report said violations to the City of Vancouver BY Law Dept. apparently they will take it from there ………….

It would seem AirBNB is in the gun sights. The offending landlord will be paying fines to 1: THE Strata 2: The City 3: Revenue Canada

I suspect this will have a far greater impact than the stupid vacant homes tax. However the financial sanctions must continue: Gregor needs the revenue, he and his band of Merry SJW’s are spending like drunken sailors.

#21 Guy in Calgary on 08.22.17 at 6:39 pm

#5 Firstman
I just don’t see the average person saving like > $100k for a house. I don’t buy that.”

Buy it. If it is not saved it is gifted.

Anywho, this assault on the affluent is the new normal. People in our generation are pissed and entitled. They are the ones that make the headlines while the rest of us go about our lives. This is what causes the negative sentiment towards us. No one cares about the millenials out there innovating, creating new technology and making everyone’s lives more comfortable. Nope, let’s focus on the entitled one’s that whine because it fits the narrative. End rant.

Does this apply to recreational property? If I have a cottage in Kelowna lets say, and I only spend a few months a year there because it’s a cottage, do I get nailed with a vacancy tax? I’m not sure if the laws apply to this area but the question remains the same…

#22 millmech on 08.22.17 at 6:39 pm

So what is stopping a landlord from renting his house out and paying a tenant who is never there. I could be on paper as renting out ten houses from these investors. Is the city going to tax me since I am not occupying the house six months of the year, nope since the dwelling is now occupied on paper by a rent paying tenant the city will be SOL on collecting the tax. It could be a lucrative business getting paid to “rent” empty houses from absentee landlords as they would save the tax

#23 Ponzius Pilatus on 08.22.17 at 6:42 pm

Yesterday cats, today squirrels.
Garth is finally following his own advise to diversify and rebalance.

#24 paracho on 08.22.17 at 6:42 pm

Most people do not understand this..especially those intoxicated and heavily indebted in and around the GTA.
Most ownership of property is ‘fee simple’ ownership..there are actually 3 different types of ownership in Canada but the absolute majority of properties in Canada are via fee simple ownership. The Crown owns all property in Canada and the ‘owner ‘ of such property or deed holder gets to keep the privilege of said property as long as they pay the fees associated with ‘ownership’..henceforth property taxes.
There is a real fight over in Croatia right now as they are just now planning to implement property taxes in 2018. But that is a whole other story .
Paris is now also debating an empty property tax as are other cities. I think this will become a global trend and Toronto will be part of it .
Just another variable in the downfall and cooling of the overheated real estate market of the GTA .

#25 buying houses or commercial RE below the cost on 08.22.17 at 6:43 pm

#156 Reality 1 on 08.22.17 at 3:39 pm

to # 131 hard cost

I take it you have never been through a TRUE real estate price CRASH.

That is when you can buy houses or commercial RE below the cost of the MATERIALS , never mind the labour to build it.

I know, I have done it and so have many others.

=====

Real estate was like that for a short period of time in the US, when the entire economy was supposedly collapsing if not for a colossal bailout and QE that followed.

I don’t recall anything close to that in Canada.
There is not even a “foreclosure industry” here.

Let me know when “you can buy houses or commercial RE below the cost of the MATERIALS , never mind the labour to build it”.

#26 joe on 08.22.17 at 6:51 pm

Happy for the empty house tax. lot of foreign criminals and local greedys have parked their laundered money and liar loans in houses. time to put those houses back on market for people who actually live and pay tax here.

#27 Ponzius Pilatus on 08.22.17 at 6:53 pm

Went by a branch of “easy financials” today.
Never heard of them.
The ad in the window perked my interest.
“Get easy money for only 29.99.
Come on in and we’ll tell you within 5 minutes if you qualify”
Gotta say, I was tempted.
But then I remembered, Capital Direct gives you instant approval.
Who can waste 5 minutes nowadays.

#28 young & foolish on 08.22.17 at 6:54 pm

“So, relax Squeezers. Rents will go down. Mr. Market has a way of looking after these things all on his own. Brutally.”

RE values going down, and soon rents! Rejoice, it will soon get cheaper to live in our big cities!

#29 Ponzius Pilatus on 08.22.17 at 6:54 pm

#26
29.99% of course.

#30 young & foolish on 08.22.17 at 7:07 pm

Not everyone who rents out property is a “speculator”. Many provide rentals for people who need/want them while extracting a small amount for their efforts.

#31 Danny on 08.22.17 at 7:09 pm

Toronto – Bloor Street and Islington Ave. New Trends:
Not sure what is going on but ….over the last 2 weeks alot more large homes are for rent. Ranging from $2,300 for a 3 bedroom to $5,500 for four bedroom.
Is this resulting from the vacant tax discussion or are speculators deciding to rent instead of selling…they know the market is so low…renting is more profitable and maybe they are secretly listening to Garth?…
Also seeing some assembly type properties for sale…conditional on buying adjacent properties (3 together )…..priced for $1.00….obviously…..set up for bidding war….and abandoning their own original plan to redevelop..Or also resulting from vacant tax credit talk.
Either way…there are those who are changing their speculation plans. The market is unfolding….and the snake oil Toronto Real Estate Cartel….is not being listened to with their unethical false trend statements by polished speculators …..only those who don’t want to accept the high tide is coming in…..most fools are shackled to their 2 generation mortgages all ready…..there goes the future generation inheritance.

#32 akashic records on 08.22.17 at 7:13 pm

There is no limit how retarded the left can go.

Eventually they always end up where the difference between them and fascism is just semantics.

#33 nobody on 08.22.17 at 7:14 pm

Poor bankers. You really think finaciers working in Toronto and having a mon-fri pad in the city can’t find a way of avoiding the tax by having the place be owned by their cat and rented to them through a holding company owned by their dog with their goldfish as CEO?

Or possibly they can’t – which is why the Canadian market does so badly

#34 ANON on 08.22.17 at 7:16 pm

Squirrels, yum!

#35 AGuyInVancouver on 08.22.17 at 7:17 pm

#8 jimbob on 08.22.17 at 6:01 pm
My son and his 3 university roommates just rented a house (not fancy; it doesn’t have a dishwasher or a finished basement) near the University in Vancouver for $3800/month. The property was purchased two months previously for $4,000,000. Taxes are $12,000 a year.
Is this a situation where an investor is willing to get less than a 1% per annum return on his investment while hoping prices continue to rise or is it a case of offshore money being parked in Vancouver real estate?
I suspect the latter.
The empty house tax of $1000 a month creates a situation where the offshore owner needs to pay monthly and creates an unwanted paper trail; to avoid that they rent the property out via an agent. So there is a benefit to the empty house tax in creating more rentals.
_________
Of course it’s the latter. The value of that house to the Mainland Chinese owner isn’t in the return on investment through rental, rather it’s the $4 million asset largely out of control of Beijing’s grasping hands. No doubt $4 mil in gold bars sitting in an RBC vault would be subject to more scrutiny.

#36 Jonathan on 08.22.17 at 7:18 pm

#8 jimbob

say you’re rich and has the 4mil in cash but wanted to take advantage of cheap rates

assume 20% down payment
800k sunk-in investment
assume kickass 2% mortgage with 25yr amortization
monthly mortgage payment $13550.44
roughly $5200 of which is interest and wasted to the bank (not counting the principal here)
annual interest payment: 62.4k

annual rent income: 45.6k
minus property tax: 12.0k
net annual income: 33.6k

opportunity cost on the 800k downpayment
let’s go with Government of Canada bonds yielding 1%
opportunity cost: 8k

annual profit/loss: -36.8k
annual bleed: -4.6%

So I would have to count on the 4mil growing at least 1% annually for 25yrs just to break even (before inflation) on my 800k investment? Or should I stop doing these pointless calculations?

#37 Debtslavecreator on 08.22.17 at 7:21 pm

It’s called left wing brain disease
It will end up with 99.9 % of us losing most of our assets through 1) sharply rising taxes and fees 2) steady currency debasement set to grow significantly when the BofC starts QE by Q4 2018 and 3) radical extortionist actions as Broke governments and a growing population of broke citizens looks for any excuse to confiscate the assets of their neighbors
This vacant home tax is beyond stupid and will not help
It is wrong and why is it that many calling for more theft from those who pay most of the taxes themselves typically don’t pay taxes to cover service they use
Those screaming the most for these radical actions don’t add to the tax base
It is so frustrating and wrong
RIP socialism – hurry up and die fast

#38 UBC Alum on 08.22.17 at 7:24 pm

#8 jimbob on 08.22.17 at 6:01 pm

My son and his 3 university roommates just rented a house (not fancy; it doesn’t have a dishwasher or a finished basement) near the University in Vancouver for $3800/month.

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

I went to UBC years ago and my daughter was born in Vancouver. My daughter is starting university in a couple of weeks. When we discussed where she would go I told her “Anywhere but UBC. You don’t need the stress of finding a place to live at your age. And neither do I.”

It’s plainly obvious that high housing prices kill activity of many types. No winners but the real estate speckers. Anybody who wants to do something other than real estate is screwed.

#39 Pretentious Hipster Bicycles on 08.22.17 at 7:25 pm

In anticipation of all the abuse you are going to get from whiny plaid wearing, tight trousered, bearded hipsters, I fully agree with your sentiment Garth.

(Disclosure – I’m a millenial, but I also own property. Did it the hard way – rented for 10 years, saved 20% down and set up my life and business in a community that isn’t bat shit crazy about real estate. So it can be done fellow millennials).

#40 FOUR FINGERS WATSON on 08.22.17 at 7:28 pm

No sign of a correction from boots on the ground in B.C. Lots of number fudging from those with an axe to grind though. Dont hold yer breath for a correction here.

#41 UVIC ELEC on 08.22.17 at 7:29 pm

#39 Pretentious Hipster Bicycles
“a community that isn’t bat shit crazy about real estate”

So.. Nanaimo?

#42 Buster Baxter on 08.22.17 at 7:32 pm

Cottage owners will not like this.

#43 Pretentious Hipster Bicycles on 08.22.17 at 7:34 pm

#13 Tim
Are you completely clueless or just an apologist for real estate speculators? Vancouver has be ruined by speculators pushing prices too high causing many to leave the city and many who stay behind are living in crappy overpriced apartments. Why shouldn’t speculators be taxed?
———————–

Is your full name “Tim, Nice but Dim”?

Give your balls a tug you simpleton. The root cause of all of your problems is historically low interest rates. The Governments are just attempting to cash in on the gravy train before the bubble bursts, leaving us with noting but higher taxes when the crash comes.

Government created the problem, and government will benefit from the taxes. in 5 years time you’ll still be moaning about the cards you’ve been dealt.

The only solution to this madness is to raise the rates.

#44 Blacksheep on 08.22.17 at 7:34 pm

Flop,

Your lack of a response speaks volumes.

I get it, for what ever reason you missed the boat on RE and have been expending major energy to show as many people as you can, that RE is currently a bad investment.

You know what, I’m totally cool with that, because at least now I and every one else realizes you, just like me, have a vested financial interest in how this whole RE deal unfolds.

If my assumption is wrong, I will of course graciously apologize, because then you would actually be, one altruistic dude, working solely for the benefit of others.

Take care…

#45 Doghouse Dweller on 08.22.17 at 7:35 pm

#25
I don’t recall anything close to that in Canada.
There is not even a “foreclosure industry” here.
====================================

Yes there is, but the Gov, Banks and CMHC control the process insuring they get maximum ROC with no liability. No foreclosure deals here, you pay top dollar for a vandalized POC thats been unmaintained for god knows how long, with zero recourse. “Caveat Emptor”

#46 the Jaguar on 08.22.17 at 7:39 pm

Multiple purchases by various family members were made by new residents to Canada as well as non residents, often in single names which provided cover for the total number of properties held by all family members, who may all actually reside in only one of the purchases. Of course some of them might be vacant if not rented out. Everybody in the financial world wanted a piece of that action and waded in with full knowledge. That’s a reference to financing the properties. Specific areas of Vancouver see more of that activity and the subsequent “lights out in the building” that accompany such purchases. And the owners may not care to rent them out because they really don’t need the money. It’s a buy and hold strategy, and has facilitated the movement of capital out of ‘certain’ countries to safe, clean, politically stable countries like Canada. Much of it accomplished under the ten year visa program from the Conservative government.
Only when it reached a crisis point and people can no longer afford real estate or find rentals do the locals want to punish or blame someone. When prices were going up and real estate seemed to be within reach of the masses there simply were not enough roses in the rose garden. The locals bought into this house of cards all the time proclaiming ‘It’s different here….we’re a world class city now’. A classic ‘made your bed, now lie in it’ bedtime story. I for one can feel no compassion for their plight.

#47 Howard on 08.22.17 at 7:42 pm

Housing bubble creating real-life Golden Girl households!

I hope bakeries are prepared for a rush of cheesecake demand (fans of the show will get the ref….).

https://www.thestar.com/life/2017/08/22/home-sharing-is-a-solution-for-senior-housing.html

#48 crowdedelevatorfartz on 08.22.17 at 7:44 pm

@#164 Standing in Brook ( cousin of Dances with Wolves)
“Jobs will be gone folks. Along with traditional capitalism. Price of labour gone to zero.
In 10 years.’
+++++++
Oh so now its ALL jobs. Not just the private sector. I, for one actually believe that most govt jobs involving the pushing of paper to and fro may be in jepordy.
Since we now have automated operators and lets face it, the “service” in the public sector couldnt get much worse could it?

But AI replacing carpenters? Concrete installers? Drywallers? Plumbers? electricians? On and on and on. In the next 10 years?
Research developers can barely design a hand that can pick up an egg. But if you want a robotic chef….It’ll cost ya $30 grand and it doesnt do dishes.

https://www.google.ca/url?url=https://www.youtube.com/watch%3Fv%3DKa8b5EaUM88&rct=j&frm=1&q=&esrc=s&sa=U&ved=0ahUKEwj_8vnKgezVAhUD92MKHcbPCckQtwIIGjAB&usg=AFQjCNFvNKskd4-SP64J9IsG6BA3x0GWYg

Robots running everything in 10 years……?
Perhaps in your wildest Seven of Nine dreams of living in the Borg Collective………

https://www.google.ca/search?q=borg+seven+of+nine&hl=en-CA&gbv=2&prmd=ivns&tbm=isch&tbo=u&source=univ&sa=X&ved=0ahUKEwj5iaDMguzVAhUMzmMKHbcOA1IQsAQIKg

It aint happ-nin in the next 50 years.
Let alone 10.
Yeesh.

#49 InvestorsFriend on 08.22.17 at 7:46 pm

An empty house tax…

Is an abomination and will drive otherwise law-abiding people to break the law by ignoring the tax or falsely stating a family member lives in it.

I have been hearing about speculators ruining the housing market for at least 40 years. People have always been jealous of those with more.

If you buy investment property, you are an investor, an entrepreneur, a go getter. If someone else does it they are an evil speculator. Sad.

#50 After Communism on 08.22.17 at 7:52 pm

This scene from Doctor Zhivago shows communists inserting families into privately owned houses after the 1917 Bolshevik Revolution.

Doctor Zhivago (1965) movie:

http://www.criticalcommons.org/Members/BaileyNorwood/clips/doctor-zhivago-and-private-property/view

Canada and USA Democrats have had the communist mind share growing for the last 50 years, but now the youngest cohort in USA might be conservative, so there is hope that our Liberal rulers are out of touch, when they implement communist ideals with new names, like “fair use of property”, and “guaranteed income”.

The alt-left thugs have cracked down on free speech in public, and put us under their anti-speech laws, and now there is a crackdown in social media, by Goolag and others, because leftward drift might end, if people talk, instead of their TVs talk.

#51 Reality 1 on 08.22.17 at 7:52 pm

to # 15 buying houses ….

You must be younger or have a bad memory or are too lazy to do research.

Go check the registry offices in Toronto / GTA / in 1995 to about 1997 concerning property transactions of all sorts – commercial and residential.

Check the transaction prices recorded.
Divide by square footage – you will be blown away.

I know what they were – we were financing them !

We did a detailed calculation for every building and not one of them were above the cost of the building materials that we financed – that was the threshold criteria for our group.

At the nadir in 1995 / 1996 in Toronto after the last ‘property bust’ that started in 1989 , properties were selling for about $ 25 / foot INCLUDING THE LAND.

Go check ;

Allied Properties (the REIT that trades on TSX) bought all those lovely old buildings on King Street West and more for $ 25 to $ 35 per square foot. Go check their financials from back then.

I know, I financed a neighbouring property for exactly that price;

60,000 square feet for $ 1,500,000 – not a typo !
The building had 170 windows (8 X 10 to 12 feet) that cost 1,500 a piece alone.
6 stories, 12 to 14 foot ceilings , solid brick and concrete , no basement on a 1/2 acre lot.

Add the bricks, mortar and concrete, structural steel, plumbing, electrics and wiring, 2 elevators and draw works, sewer connections, electrical transformers , fully sprinklered. Do you have any idea what those items cost for a 60,000 square foot multi storey building ?

Do some research before commenting on something you know nothing about. It is pretty easy to substantiate what I am saying.

Toronto Star ran a two page spread in 1996 /7 comparing top prices paid in 1988 / 9 with the forced resales in 1996 / 7.

I believe #2 King Street West sold for $ 120,000,000 in 1998 /9 and sold for $ 14,000,000 untenanted in 1996/7. No typos – go look it up.

No credit availability and high carrying costs in a no bid market = name your price almost.

#52 Dan.t on 08.22.17 at 7:52 pm

This was all by design. Gov pumped housing on purpose to get the little beavers spending money…keeping interest rates artificially low for over 10 years and allowing banks to loan to anyone with a heart beat. Sponsored Real Estate “News” pumped 24/7 did it’s job. HGTV took care of the rest.

The gov gives and takes away. No boomers were complaining when they cashed out of their 1972 Burnaby Bung or Aldergrove run down shack for 1.8 million that they bought 28 years ago for 68k.

Party seems to be over. If you won the RE lotto just by being born at the right time, good for you, hope you cashed out.

I hope RE crashes and burns in BC. Maybe people will stop talking about it for half a day. Why is it a problem to have affordable housing policies and reasonable rents, oh right, you don’t like it, move out of YVR and live on a farm in Sask.

Stupid policies and brainwashed house horny Canadians obviously can’t control themselves so why shouldn’t the gov step in now. Don’t be a hypocrite. It is class warfare. All boomers had to do was buy a house, live and work in a major city, now they can cash out and retire like kings thanks to stupid policies, plus dumb millennials, who got bank of mom to foot the downpayment with their new found equity and mortgaged their soul to the bank for years of bank servitude acting like they own something. At least they can show their face around the water cooler now and talk RE as an owner…so much more sophisticated than those poor stupid renters. All that matter in Canada is real estate and maybe hockey.

I won’t even get started on policies allowing laundered and illegal money to flow into the RE market.

The stupidity in Canada can’t end soon enough. It’s like a plague. Even now, comments on here about vultching and a correction is like 3 months old. Van nothing really yet. Who care if a house is down 100k from 1.8 to 1.7, how many working Canadians can afford that…oh, I forgot, pool money with friends, beg bank of mom, borrow 5 ways to get the downpayment, and be rich. Just flip it in 18 months for 300k tax free money.

Affordable housing sucks. Insane rents and nose bleed housing obviously is how you build wonderful cities.

I don’t get the problem. Every policy for the last 15 years was to encourage housing, they interfered in the market to get housing to this point (or was Christy Clark’s free 37k downpayment not interference among with 20 other incentive given over the years) and now it is a problem when policies come into place to tame the beast? About time, just 10 years too late.

#53 rainclouds on 08.22.17 at 7:54 pm

#44 Blacksheap

Nobody cares about your “opinion” or the other idiot with 3 or 4 digits on his hand. Got any information to share ? Great!

Silly Potshots fired at the Flopster who spends considerable unpaid time debunking the utter bull defecated by the RE boards is not really adding to the discussion .I read every post of his with great interest.

#54 S.Bby on 08.22.17 at 7:55 pm

Here’s an example of a speculator trying to get out with their shirt intact:

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

https://www.realtor.ca/Residential/Single-Family/18107051/4735-SHEPHERD-STREET-Burnaby-British-Columbia-V5H1L6

This sold last year for $2.1 million in June at the height of the frenzy. The house has dropped in value and would probably sell for around $1.6 million now and that would be a $500,000 loss. It has been listed for months.

#55 dr. talc on 08.22.17 at 7:56 pm

I took the survey and told them that the ‘affordability’ problem they are addressing cannot be solved by Toronto city hall.

(By this logic, anyone with a house they live in full-time with an idle basement suite, or two empty bedrooms the kids used to occupy, is an equal target.)

The Bolsheviks did this all over eastern bloc Europe, they just moved unwelcome strangers into other peoples apartments. They’ll do it here too; if you resist, they’ll do it by stealth or by force. The same minds are running the show.

#56 S.Bby on 08.22.17 at 7:58 pm

#44 Blacksheep

or possibly he just doesn’t care what you think …?

#57 Jungle on 08.22.17 at 7:58 pm

NO way. Empty homes is being abused only for the purpose of hoarding houses, homes, and to used as piggy bank.

City of Toronto estimates uptown 30K homes are empty. This is completely not the interned use, priority of dwelling is to provide shelter NOT to grow your money and hoard.

And how many people need and can’t get shelter. YES it is a basic need at some point and when we are in affordability crises, it just doesn’t make sense to allow those with access to abuse leverage or foreign buyers to price out others.

Put the tax in and squeeze out the greed, give homes back what they were intended for. Let the market pay and use them properly.

That, of course, makes absolutely no sense. You are free to buy or lease accommodation like everyone else. There are currently 20,677 for sale in the GTA region. What ‘hoarding’? — Garth

#58 Reality 1 on 08.22.17 at 8:01 pm

sorry, made a small typo myself ;

…. # 2 King Street West sold for $ 120,000,000 in 1988 / 9 (not 1998 /9)and resold in 1996 /7 for $ 14,000,000 untenanted ….

#59 The Technical Analyst, CSTA, CPD on 08.22.17 at 8:06 pm

Vacant house tax: It is only 1% tax, move on. Use your anger towards general income tax rates.

#60 dr. talc on 08.22.17 at 8:09 pm

Problem with Toronto city hall is every overpaid employee thinks they’ve joined the ‘ruling elite’
If it involves a diminution of property rights, every Toronto city Councillor will be on board with this garbage. Look over the employee list of any dept, and count people with the same sir names.
This is anecdotal so take it hearsay, but I worked with a black guy recently from Africa, and he told me this:
” I saw a black guy handing out parking tickets, I said to him ‘ man, I’m black like you, tell me how did you get that job?”

“he said ‘I paid for it'”

#61 Doug t on 08.22.17 at 8:12 pm

Just listed our house Friday @ 5pm in victoria – sold Monday – very nicely over asking price – 70 couples at open house Saturday and just shy of that on Sunday – 9 offers – went to nice family with 2 kids

Congratulations, but it sounds fake. Listing link? — Garth

#62 dakkie on 08.22.17 at 8:13 pm

Ross Kay – Canadian Economy Taking Huge Hit from Declining Real Estate

http://investmentwatchblog.com/ross-kay-canadian-economy-taking-huge-hit-from-declining-real-estate/

#63 Chaddywack on 08.22.17 at 8:22 pm

Has anyone noticed any difference in the big banks online affordability calculators lately?

I’ve noticed that I’m now approved for far less even with the exact same numbers (even after accounting for the small raise in interest rates). I’ve also noticed banks are promoting saving and when I went to the branch today the teller warned me about the cost of interest when rates rise…..before she just tried to get me in as much debt as possible.

Something is up…………….

#64 Bdog on 08.22.17 at 8:24 pm

Nothing is going to change. Rates won’t increase enough to make a difference. We need 12 hikes at 0.25 each to correct this market. Will probably get 3. Government doesn’t have the teeth or tools to go after empty house cheats.

#65 Doghouse Dweller on 08.22.17 at 8:25 pm

#37 Debtslavecreator

Yes, there is something quite disturbing going on. Call any Gov agency and they give you the catch 22 runaround , talk nonsense or just don`t answer the phone at all.
Its global, the plebs no longer matter. Just sheep to be fleeced by TBTB. With ANTiFA pelting the asset forfeiture cops with bottles of urine is war, chaos and revolution underway? The leaders sure don`t inspire confidence ! More like madness.

https://www.armstrongeconomics.com/tag/hunt-for-money/

#66 I thinks I know something on 08.22.17 at 8:28 pm

“The stated goal of forcing people with under-utilized properties to either sell them off or rent them out has not been realized. And, likely, it never will.” – Garth

————————————————————–

Nonsense. The stats can’t show that. The reason they can’t is because there are so many factors involved that affect the numbers of units rented or sold. However, logic dictates that a vacancy tax (if properly implemented) would reduce vacant units. Logic also dictates that it is better for a society to have housing units housing people rather than sitting vacant. How can hoarding houses and condos possibly be good for society?

If that were the criteria, we would not allow the private ownership of real estate. But it isn’t. — Garth

#67 waiting on the westcoast on 08.22.17 at 8:31 pm

#13 Tim on 08.22.17 at 6:20 pm says… “Are you completely clueless or just an apologist for real estate speculators? Vancouver has be ruined by speculators pushing prices too high causing many to leave the city and many who stay behind are living in crappy overpriced apartments. Why shouldn’t speculators be taxed?”

See – perfect example of people looking for others to blame. The ‘speculators’ ruined it… And when the market perception is one of collapse, the perception will be that speculators caused that too.

Speculators also have a function… Their overzealousness drives construction demand which later helps increase supply and reduce prices.

Locals FOMO plus cheap money (in which the locals should have thought more about the large debt they were acquiring rather than whether they could make the monthly payments is the bulk of market activity.

At the end of the day, the decision is simple. Does it make sense to invest in RE for me right now? If borrowing 1-200k from Bank of Mom, getting a second from a loan shark for another 200k and then borrowing the rest (600k) at absurdly low rates knowing full well they may go up in price in 5 years sounds like a great investment, please go forward, young man… Or dare I say, young speculator!

I think most people are investing with the wrong parts doing the thinking. But don’t worry, you can blame all the real speculators… ;-)

#68 Doug t on 08.22.17 at 8:31 pm

No fake Garth – we actually jumped on a duplex (shared only by garage) property 4 blocks away on Aug 10 that had been on market for 2 weeks at @ 699k by a very senior women and the next day dropped it 100k cause she had already been moved and wanted out – we snatched it up – put our place on the market ( also a duplex and 4 blocks from purchased place) and it sold that quick and we fortunately pocketed a very nice profit and still have a very nice home now :)

#69 bigtowne on 08.22.17 at 8:33 pm

Canadians in the past and present buy a home for financial stability and security. Canada acts like a major player on the global map but we are not as sophisticated or as mature in the financial markets to satisfy all the growing needs of the economy. The only reasonable domestic option in a very small investing and financial universe is buy local property. Hence we have “the greater fool” as our open door to the universe outside real estate to global equity and bond markets.

#70 Tim on 08.22.17 at 8:35 pm

Re pretentious hipster bicycles

You are the dim simpleton. There are thousands of properties sitting vacant in Vancouver and foreign influence in the Vancouver market is well documented. It is obvious speculators have driven up prices. Anyone with a grade school education can figure out that despite low interest rates alone can’t explain the inflated prices in Vancouver relative to most other cities. Most people can understand this but Evidently you don’t

I have more than grade school under my belt and I agree with the bicycle dude. You just sound angry. Speculation has wrecked Van, for sure, but the locals did most of it. — Garth

#71 waiting on the westcoast on 08.22.17 at 8:36 pm

#21 Guy in Calgary says… “Does this apply to recreational property? If I have a cottage in Kelowna lets say, and I only spend a few months a year there because it’s a cottage, do I get nailed with a vacancy tax? I’m not sure if the laws apply to this area but the question remains the same…”

Or what if I want to live in Merritt but have a condo in the city as my cottage to get a little taste of city life every year?

#72 crowdedelevatorfartz on 08.22.17 at 8:37 pm

@#44 Sheepdog
“Your lack of a response speaks volumes”
+++++++
He cant be bothered because no matter what evidence is offered to you…..you just want to argue.

He’s too busy being “altruistic” grinding out verifiable stats and addresses to the 99% on this blog that appreciate his hard work to bother with nitpicking wankers that identify with sheep.

#73 buying houses or commercial RE below the cost on 08.22.17 at 8:37 pm

#51 Reality 1

Wow… thanks – your info is pretty impressive, I was not aware.

I hope hope you did the work for your own prosperity and made a killing.

#74 IM in C on 08.22.17 at 8:38 pm

My understanding is that Her Majesty (God Bless Her) owns every square inch of land in Canada. She graciously grants you a lease to your property, typically in perpetuity – called a deed. Typically you are free to sell , trade or pass that deed on to your heirs and successors. If however, anyone of her federal, provincial or municipal governments have need of the land, she can expropriate the land from you . And of course, she may levy any taxes or duties on the property, through her responsibly elected governments

#75 Linda on 08.22.17 at 8:38 pm

I have to say, it is interesting how some equate empty homes with ‘hoarding’ – methinks this sounds a bit like those ‘freeloaders’ of the land (they prefer the term free men, natch) who have in some instances occupied property & refused to pay rent or compensate the legal owner in any way – because, hey, it was their ‘right’ to do so. Nice try but, if it isn’t yours that is called theft.

‘But there are families in homeless shelters!’. Indeed there are. However, that does not equate to those people having a ‘right’ to occupy someone’s else’s property for free. I will note that the agencies that are working to end homelessness do not advocate the homeless getting ‘free’ shelter – what they advocate is decent shelter for an affordable price.

#76 Reality 1 on 08.22.17 at 8:48 pm

to # 60 dr. talc

“Problem with Toronto city hall is every overpaid employee thinks they’ve joined the ‘ruling elite’.

Completely agree.

But with their outrageous wages and benefits and their cretinous minds combined with the power they wield as “state actors”, what other conclusion could they draw?

Extend that theory to others in government employ – politicians, academics, teachers, police , etc. That is why they support the socialist agenda.

People should carefully read “1984” and “Brave New World”.

A version of those dystopian societies awaits Canada should this institutionalized fascism advance.

#77 KTownMaverick on 08.22.17 at 8:50 pm

It’s different in Kelowna. This report, sponsored by a realtor so it has to be true, says so.

https://www.castanet.net/edition/news-story-204757-1-.htm#204757

#78 [email protected] on 08.22.17 at 8:51 pm

In Spain, squatters can move into unoccupied residences owned by the banks. It is illegal, however no law currently exists to allow lawful removal. Perhaps intended or historical reasons.

#79 I believe everything on television on 08.22.17 at 8:54 pm

#66 I thinks I know something on 08.22.17 at 8:28 pm
“The stated goal of forcing people with under-utilized properties to either sell them off or rent them out has not been realized. And, likely, it never will.” – Garth

————————————————————–

Nonsense. The stats can’t show that. The reason they can’t is because there are so many factors involved that affect the numbers of units rented or sold. However, logic dictates that a vacancy tax (if properly implemented) would reduce vacant units. Logic also dictates that it is better for a society to have housing units housing people rather than sitting vacant. How can hoarding houses and condos possibly be good for society?

Thou shalt not commit logical fallacies:

https://web.cn.edu/kwheeler/fallacies_list.html

#80 Fish on 08.22.17 at 8:56 pm

I guess hydro will take extra care on reading the meters

Utility consumption cannot be monitored as it would be a privacy breach. — Garth

#81 akashic records on 08.22.17 at 8:58 pm

#50 After Communism on 08.22.17 at 7:52 pm

This scene from Doctor Zhivago shows communists inserting families into privately owned houses after the 1917 Bolshevik Revolution.

Doctor Zhivago (1965) movie:

http://www.criticalcommons.org/Members/BaileyNorwood/clips/doctor-zhivago-and-private-property/view

====

Shared experience in the entire “Soviet block” after WWII.

This ridiculous proposed tax is Communism Light.
No thank you.

#82 Adrian on 08.22.17 at 9:01 pm

“Socialism is Capitalism’s Shadow,” Professor Richard D. Wolff.

According to SFU Professor Geoff Mann, author of “In the Long Run We Are All Dead: Keynesianism, Political Economy, and Revolution,” saving civilization is the driving force behind the work of Keynesians, from Hegel to Piketty.

He ties this impulse back to the French Revolution and the fear held by the liberal elite emerging from that time that torch-wielding mobs will tear down civilization in their anger over the injustices that extreme inequality inevitably brings. Thus the impulse of the Liberal center to temper Capitalism with Socialism in order to save Civilization itself. Historically, the political center falls to extremism whenever they prove to be inadequate to the task.

Statistically, inequality correlates strongly with poorer health outcomes for every income level. This comes from, among others, Professor Richard Wilkinson, author of “The Spirit Level: Why More Equal Societies Almost Always Do Better.”

https://inequality.org/facts/inequality-and-health/

http://www.businessinsider.com/the-negative-effects-of-income-inequality-on-society-2011-11

Inequality also correlates with mental illnesses such as depression, anxiety, & PTSD:

https://www.ncbi.nlm.nih.gov/pmc/articles/PMC2652881/

“In a study of more than 600 young men and women conducted at Berkeley, researchers concluded that one’s perceived social status — or lack thereof — is at the heart of a wide range of mental illnesses.”

http://news.berkeley.edu/2014/12/09/dominancebehavior/

And finally, inequality correlates with various measures of violence & crime in society:

http://www.jstor.org/stable/10.1086/338347?seq=1#page_scan_tab_contents

http://news.stanford.edu/2017/01/24/stanford-historian-uncovers-grim-correlation-violence-inequality-millennia/

Therefore, the Keynesian fear of the torch-wielding mob is not unfounded. Property rights must take second priority to maintaining the peace. I’m not generally in favour of unnecessary government intrusion into my life, but taxes pay for services that all of us benefit from, one way or another. And so much the better if they are also used to redistribute prosperity in such a way that everyone in society feels they have a stake in the outcome. After all, the alternative is far too dangerous to contemplate…

#83 Grantmi on 08.22.17 at 9:04 pm

#2 Firstman on 08.22.17 at 5:36 pm
Omg first!!!!

Omg Idiot!!!!

#84 Yum! on 08.22.17 at 9:07 pm

Omg, this is too good to be true. The whining, the entitlement, the self righteous indignation of the greedy. Omg Garth you master troll you. There’s no way you really believe this, you’re just baiting. You’re a master baiter!

What can I say, these kinds of posts get the salty tears out like nobody’s business, and these tears are DELISH!!

#85 Grantmi on 08.22.17 at 9:09 pm

#4 Happy Housing Crash Everyone! on 08.22.17 at 5:38 pm
Wishing all the Shysters a Happy Housing and personal financial CRASH! :-)

If realtors owe the government back taxes can they go bankrupt and not pay the government money? I hope they have to pay the government back . Imagine owing 60k plus in back taxes and working for minimum wage.

Happy Housing Crash Everyone Everyone! :-)

depends… depends how much you owe them and if its more than once. Buddy owed hundreds of thousands of dollars in back taxes to the FEDS (stock promoter).. and the courts would not let me off scottfree without paying a large chunk of it back over time. He basically told him he couldn’t do it, and also live….. and they said we don’t care. Either do it, or you’ll never get released from bankruptcy rating.

He left the country to go make money else where.. and he has a lawyer fighting it now while he’s out of the country.

#86 Grantmi on 08.22.17 at 9:10 pm

Meant to say –

….. and the courts would not let HIM off scottfree …..

#87 After Communism on 08.22.17 at 9:13 pm

Equality is unjust.
Justice demands inequality.

#88 Grantmi on 08.22.17 at 9:13 pm

#80 Fish on 08.22.17 at 8:56 pm
I guess hydro will take extra care on reading the meters

Utility consumption cannot be monitored as it would be a privacy breach. — Garth

Garth-O… they do it all the time for the PoPo and catching grow ops!

Not without a warrant. Governments cannot, by law, routinely monitor private utility use. — Garth

#89 Willy H on 08.22.17 at 9:14 pm

Not losing too much sleep over the 1% ponying up a bit more tax on “empty houses” in Vancouver. I suspect this impacts very few of Audi crowd dripping in property and diamonds.

It’s pocket change to these folks anyway.

There are also a slew of exemptions that cover some the scenarios mentioned in today’s comments.

http://vancouver.ca/home-property-development/will-your-home-be-taxed.aspx

It’s interesting that blog posts over the past several months assert repeatedly that government has gone too far with “empty house” tax, foreign-buyers tax and proposed OSFI stress testing.

Wasn’t it our federal government and central banks hooked on low interest-rates that got us here? Greenspan peddled this fiscal opium and many others followed.

Low interest rates were credited with saving us from financial ruin, the WTF of 2008 and softening Canada’s recession of 2008?

How much economic activity has been pulled into the present from the future when so much cheap money dangled in front of the average Joe?

Where there has been Yin there will be a equal and opposing Yang, one way or another.

The market never set these historically low interest rates. Flawed central banker Gods set these rates.

That’s why market forces have also failed to control this bubble.

#90 Kurt on 08.22.17 at 9:20 pm

#74 Adrian – yes, and it’s a tricky balancing act. People work hard and do unpleasant or demanding work in order to improve their social status, so we have to maintain *some* sort of status gradient, some sort of inequality, to ensure that people’s efforts are channelled into activities that benefit society. At the same time, if we let that gradient get too steep, the whole thing falls apart. It’s a matter of balance, and very few people want to see it that way – they want easy answers that benefit themselves.

#91 Pete from St. Cesaire on 08.22.17 at 9:21 pm

Firstly: Our rights come from God, not government.
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
Secondly: “If the Vancouver model is followed, everybody will have to file a form declaring their home is a principal residence, occupied by a family member or leased.”
—————————————————————–
Family member = whatever the govt allows to fall into that category. What of you come from a large family of single adults. How long until the govt says that your cousin (age 21) staying in your 2nd property while he attends university and your niece who’s a single mom whom you let live in your country home for free so the kid doesn’t grow up in the DTES of VAN doesn’t qualify? (It’s not his real home, he spends most of his time at uni or the pub, he could live on campus, and the home evaluator is jealous of the quality of life of the niece, etc etc etc…)
Just like with CRA deciding how much effort a person is required to put into their work to be able to considered a legitimate employee (like in the cases of Doctors hiring their wives). It won’t be too long before they start evaluating everyone’s job to see if they are really deserving of their salary or if it’s too large for the effort expended and needs to be taxed at a higher rate.
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
Thirdly: “(By this logic, anyone with a house they live in full-time with an idle basement suite, or two empty bedrooms the kids used to occupy, is an equal target.)”
———————————————————-
Absolutely. This has happened many times before in history and it is coming here soon. Oops, sorry, you have too much room (more than your fair share) and now you have to allow these other ‘nice people’ (of the social workers choosing) to move in with you. The govt will set the rent and make you pay taxes on it (if you get any rent at all) and then they’ll declare your home to be a rental for profit endeavour and no longer exempt from capital gains taxes on primary residences.

#92 young & foolish on 08.22.17 at 9:22 pm

“Wow… thanks – your info is pretty impressive, I was not aware.”

You noticed that he mentioned NO credit was available (No credit availability and high carrying costs in a no bid market ) … and very high interest rates.

#93 Reality 1 on 08.22.17 at 9:29 pm

to # 73 buying houses ….

We did much more than ok.

Buildings like # 2 King West were out of our range because you simply could not get even 50 % financing (i.e. if you paid half cash).
They had no tenants yet you had to pay city taxes, biz taxes, keep the heat on, insurance, security guard service, sprinkler and elevator inspections, et., etc. on a 400,000 square foot building ( about $ 8 / 9 dollars per square foot per year or $3.2 to 3.6 million a year !)

This with NO offsetting income over the period in which you expected the market rents would return.

You didn’t turn around and lease it right away at some cheap rent as you would spend millions more doing leasehold improvements (completely new interiors, new elevators, etc. to suit that high level of tenant) nor did you want to lock in a long term lease at low rent. It would defeat the purpose.

So, they were cheap to buy, but very expensive to hold on to if the market ‘turn’ was long in coming.

I cashed out a bit early because the other partners wanted to develop them out and sell. I wanted to board them up for 5 years at least and just pay the expenses until credit became available again then use the equity gained as the market came to its senses and refinance them to redevelop, or perhaps never sell until rents / values became irresistible to prudent sale.

They didn’t have deep enough pockets and I couldn’t do it alone. So, I sold and moved out of the country.

The real pisser is that with Allied Properties, I met the family who sold them their huge King West portfolio a few years prior – 1997 I think.
They sold it for $ 25 to $28 per square foot (but in unrentable shape).

Allied was getting $25 per foot rent PER YEAR a few years later after dumping in about $60 to $ 80 per foot on redevelopment.

Funny thing is, that family had started acquiring the portfolio during the 1930’s Depression and opportunistically thereafter ( at as low as $2.50 per foot ! ) and held on to it through thick and thin until the sale in 1997 I believe.

Total sale price of all that property was approx $ 70 million in 1997.
A few years later, it was valued at $ 200 million or roughly 3 times (that included significant redevelopment and now was fully tenanted).

Imagine, holding that long and then missing the real pay off! Well, they collected rents on paid off buildings for 5 decades, so no tears.

#94 Willy H on 08.22.17 at 9:30 pm

#82 Adrian on 08.22.17 at 9:01 pm

Wonderful post!

Fascinated with the French Revolution and Napoleon. My York U prof asserted that The French Revolution was the 2nd most important event in western civilization after the birth of JC!

May I add this:

“Robert Shiller, a Nobel laureate in economics, … The Yale University professor says societies could rue allowing people to be priced out of their communities. “With people of various income levels increasingly divided by geography, income inequality can worsen and the risk of social polarization—and even serious conflict—can grow,” Shiller said recently in an op-ed for Project Syndicate. Inequality of income begets inequality of opportunity, which begets societal tension and political volatility. ”

http://www.canadianbusiness.com/economy/how-canadas-housing-boom-is-aggravating-income-inequality/

#95 InvestorsFriend on 08.22.17 at 9:34 pm

Oh No, the Queen owns my land:

If however, anyone of her federal, provincial or municipal governments have need of the land, she can expropriate the land from you . And of course, she may levy any taxes or duties on the property, through her responsibly elected governments.

*********************************
Yes, that is the deal in our governed civil society. I believe there is always compensation for expropriation.

Would you instead allow land owners to block the development of needed roads?

In a governed civil society we will only ever have reasonable freedoms. Certainly not total freedom. It’s all working pretty well, actually.

I think freedom to own a vacant house is reasonable. The cost of money tied up in a vacant house does already act as a disincentive to do that if the house is truly unused.

#96 Leo Trollstoy on 08.22.17 at 9:36 pm

#7 -=jwk=- on 08.22.17 at 5:50 pm

Only friends or family would call your description a “beautiful home”

#97 Perpective on 08.22.17 at 9:41 pm

There is a house on my Port Moody street which is owned by some nice folks that don’t live there. If there was a empty house tax I wouldn’t report it as god only knows what kind of renters they’d get. That said, someone would as the grass is always 2 feet high and the porch is always covered in flyers.

On another matter. Garth did you also support the constitutional veto for Quebec?

#98 paracho on 08.22.17 at 9:46 pm

Listening to the proposals from Toronto City Hall.
The city government plans to find these empty units in the following ways:
Q
1. Voluntary disclosure
2. Snitching ( CRA and cable companies already utilize this method )
3. A combination of the above methods .

Incorrect. The preferred method is the YVR model – a mandatory (not voluntary) disclosure. — Garth

#99 Max on 08.22.17 at 9:50 pm

A sensible man with a following. Garth missed the mark today. Weighing his blog readers a bit too carefully. Speckers are certain foriegners. Horny for Van area for the sake of proximity to the mainland. Not being racist, just the facts. Truth be told, let the heavens fall.

Most speculators are locals. Statistical fact. — Garth

#100 For those about to flop... on 08.22.17 at 9:54 pm

Thanks Rainy,Sobby and Crowdie for trying to stick up for me as I just got home from doing a bit of overtime.

Crowdie nailed it as I wrote that particular poster a few months ago and said this is the last time I am going to write you as he crosses the line with his arguments and tries to make it personal.

From my understanding that poster bought a place out in the valley for 450 or something and now it has doubled in value,which is great for him but how does that help out anyone on here?

Do the paid reporters in the media have to declare if they own real estate or not?

No ,of course not.

So why would a volunteer reporter need to declare his?

For what it is worth I have already talked about my living situation before many times and have nothing to hide or apologize for.

My wife and I talked about moving further east and perhaps buying but we rent a place that makes financial sense for us and perhaps just as important helps with our quality of live.

My wife doesn’t drive and so we live 4 blocks away from where she works,leave the house at 8.25 …at work at 8.30 ,no stress.

I spend most of my time working on the Westside which it takes me 15/20 minutes to get to work in the morning,no highways or anything and my van is parked out front of the apartment so I can keep an eye on it and easy to put tools in and out.

We don’t consider ourselves victims of the situation here ,we just live wherever makes the most sense.
If all I wanted to do in life was own a house I would probably move back to Tasmania and pick up a very nice house for around 200k but it’s not my goal in life

I wrote a post a couple of weeks ago where I had a paid of house by the age of 22 and sold it and traveled the world. The house was a place to live and not as important to me a living the life I wanted.

I have since lived in another 4 countries, visited my fair share and have never been back in 18 years…that’s how important owning a house is to me.

You guys want to judge me?

I married my wife after 6 months of meeting her and have been together ever since and I drive a near 30 y.o Van,I don’t care what anyone thinks of me ,I just do want feels right for me at that point in time and feel no pressure to impress anyone.

Some people on here just can’t handle the concept of people helping other people out or putting a smile on people’s faces for no monetary return,I’m not a big fan of cats but that didn’t stop me from supplying yesterday’s much celebrated cat pick.I just like helping people out.

There is a part of my heart that the sometimes cold and shallow city of Vancouver can’t have.That part of my heart is reserved for Tasmania where I grew up and perhaps in my young naivety when people just helped people out for the sake of helping each other out ,nothing expected in return…

M43BC

#101 Leo Trollstoy on 08.22.17 at 9:56 pm

An increasing proportion of US millenials are buying nice “starter” homes

https://www.bloomberg.com/news/articles/2017-08-22/forget-starter-houses-u-s-millennials-are-buying-luxury-homes

A nice Willowdale condo corner unit sold in the spring for $750k. Comparable one languished at the same price over the summer. I took it for $600k. A nice pad for visiting family and friends imo

#102 ohplease on 08.22.17 at 10:12 pm

“The stated goal of forcing people with under-utilized properties to either sell them off or rent them out has not been realized. And, likely, it never will.”

Oh please, you know things arent instantaneous when govt is involved.

No one should have more than one home. Thats the problem with this country. If you are using your downtown condo for business once a week (who the f does this come on garth), then its a business and you can afford to pay more for your revenue generating “office space”, or be taxed properly for it.

if people want to own more than one home, they are rich, and therefor can afford to pay more for it, (till they arent rich no more). Dont like it? weigh the options richy and sell your income generating property then.

One family, one home. All other uses are commercial and should be penalized. A home is a place to live, not an office, not an investment and not a hotel!

#103 Post on 08.22.17 at 10:30 pm

I’ve never thought of myself as a socialist? Guess I’m going to have to rethink that.

But I live in a building in Downtown Vancouver. My wife is part of one of the social clubs associated with the building. She gets all the building gossip and many of the owners have openly stated (I bet they’re regretting it now) that they just bought their unit as purely an investment. They don’t use it for work, they don’t use it for holidays or for relatives. It’s just a hold for pure gain. Some are foreigners, some are not.

But we live in a city where there is a rental crisis. So governments are trying implementing regulations to control it. The owners can sell now if they feel like it, nothing is stopping them.

Hey, what investments aren’t regulated, taxed, prodded or rejigged? Remember:
Rent controls.
Quantitative easing.
REITS.
Crisis level nterest rates.
TFSA’s.
Agriculture land reserves.
Expropriations.
Foriegn State corporate buy outs.
Etc, etc, etc..

Life isn’t fair and investing sure ain’t. Deal with it.

#104 SW on 08.22.17 at 10:31 pm

#1 Happy Housing Crash Everyone! on 08.22.17 at 5:34 pm

I love your work. Top of the market to ye, sor!

#105 Willy H on 08.22.17 at 10:32 pm

#52 Dan.t on 08.22.17 at 7:52 pm

“… I don’t get the problem. Every policy for the last 15 years was to encourage housing, they interfered in the market to get housing to this point … and now it is a problem when policies come into place to tame the beast? About time, just 10 years too late”
___ ___ ___ ___

Fantastic post!

Always thought that Canada was a nation run by naive fools. Especially after 1984! We consistently sell our resources and successful companies for song. We have allowed foreign firms to come in and buy up entire sectors of our economy and proceed to run them into the ground*. We use our resource base as a crutch and sell off unprocessed raw materials at insanely low prices. We have no resource extraction or industrial strategic plan.

We just don’t do value-ad in Canada! Pity.

Guess that’s why 20% of our GDP (directly or indirectly) related to the housing sector. A sector that does not create sustainable long-term quality GDP growth!

It’s probably why Stephen Jarislowsky stated that it’s almost impossible to put together a quality Canadian stock portfolio these days.

With regards to the residential housing bubble in Canada:

Our central bankers, emasculated politicians, greedy developers and parasitic realtors have, for all intents and purposes, destroyed an entire generation!

What a legacy!

#106 MF on 08.22.17 at 10:41 pm

#101 Leo Trollstoy on 08.22.17 at 9:56 pm

Which one? Which intersection in Willowdale?

I am interested in it (seriously).

MF

#107 SW on 08.22.17 at 10:43 pm

#25 buying houses or commercial RE below the cost on 08.22.17 at 6:43 pm
…Let me know when “you can buy houses or commercial RE below the cost of the MATERIALS , never mind the labour to build it”.

Well there are always the people who either have unusual ideas or perhaps win a lottery. Three or four very large houses that I know about were built in this area (unfashionable Eastern Ontario) and have subsequently been sold or offered for sale at a price much less than the apparent costs of building…bad location, tiny lot, poor design, whatever.

One elderly, retired medical professional made the mistake of letting his wife overrule his architect, for example. Finally sold after 5 years on the market and for a price that was perhaps less than half the original cost. Sad, because he’s a nice guy, but time is not on their side.

#108 n1tro on 08.22.17 at 10:43 pm

Vacancy Tax? Only suckers pay for that.

I’m rolling out my new fee based service for those in this predicament. For a fraction of the cost of giving mayor Tory your hard earned money so he can erect a bunch of safe injection sites in your neighborhood, I am offering the following services:

Basic package: $100/day
Come to your vacant residence, sit on your couch and watch a movie or show. Preference will be given to owners with +65″ 4K televisions or video games systems (current gen Ps4 or Xbox One only).

Additional addon services:

Cook some food using ingredients found in your fridge/freezer. $20

Make a #1 in your bathroom $5

Make a #2 in your bathroom $10* (This is dependent on selecting the 1st addon option)

Take a shower in your bathroom $10. (Wet towels will be thrown on the floor so you don’t mistakenly use it while you are in the residence)

Sleep in your bed for the night. $50 (Don’t worry I won’t make the sheets in the morning to give it that slept in look in case mayor Tory and his tax goons show up for surprise inspection).

If any 2 addons are selected, as a bonus, I will ensure that your neighbors know there is someone living at your place so you won’t get snitched on. I’m thinking turning up the volume during a steamy scene of Game of Thrones should do the trick.

Seems like a bargain right? Well, I admit it, I do benefit somewhat. The fees you pay me will be collected through my SP company so I can expense my P100D Tesla.

Think it over. (I’m serious)

#109 I thinks I know something on 08.22.17 at 10:43 pm

#79 I believe everything on television on 08.22.17 at 8:54 pm

Thou shalt not commit logical fallacies:

https://web.cn.edu/kwheeler/fallacies_list.html

—————————————————————-

Perhaps you could go a little further and be specific as to which logical fallacy you think has been committed rather than just include a link.

#110 Long Branch Apprentice on 08.22.17 at 10:43 pm

The seeds of social discontent have been sown.

Hate anyone who has more than you. Artificial scarcity magnified by low interest rates. These things have been done on purpose.

Don’t worry children, diversity is our strength.

#111 Jeff on 08.22.17 at 10:45 pm

Check out this news from MortgageBrokers. Ontario Real-Estate things realtors and brokerages need more expensive fines, proposing to double the max:

http://snip.ly/ljvyc?utm_content=buffere2388&utm_medium=social&utm_source=twitter.com&utm_campaign=buffer#http://www.mortgagebrokernews.ca/news/real-estate-association-lobbies-for-tougher-regulation-229794.aspx

#112 Doghouse Dweller on 08.22.17 at 10:53 pm

Adrian, Kurt, Willy H
“““““““““““““““
Furious student protesters attacked a car carrying Prince Charles and his wife, Camilla, vandalized buildings and battled riot police –
Off with their heads ! These folks were no where near starving from the taxation and deprivation of 1789. Just a little Keynesian austerity and the madness of crowds.
Camilla sure looks terrified.
We are heading into something that will have the professors postulating around the campfire for decades to come if any of us survive..

https://www.cbsnews.com/news/prince-charles-camilla-attacked-by-protesters/

#113 Adrian on 08.22.17 at 11:06 pm

#90 Kurt on 08.22.17 at 9:20 pm

Agreed! It is a balancing act.

#94 Willy H on 08.22.17 at 9:30 pm

Thank you! And thanks for the link. I agree that inequality of outcome feeds back into inequality of opportunity over the generational timescale. (Picketty makes this clear with r>g.) Most people don’t mind inequality of outcome so long as everyone gets a fair shot, but it’s difficult for many to recognize that inter-generational transfers of wealth undermine this principle.

#114 Smoking Man on 08.22.17 at 11:19 pm

After the machine killed him he’s still here.
https://youtu.be/D3O1Qno4spw

#115 Partha Gamshi on 08.22.17 at 11:22 pm

I think a great idea would be to offer the owners of empty houses a sort of free pass to avoid tax if they agree to offer their places to house the thousands of asylum seekers making the journey across the border into Canada every day.

It’d be a win-win. The tent cities at the border could be taken down and owners/investors could avoid a costly tax.

#116 Big Lebowski on 08.22.17 at 11:27 pm

@Max

Don’t you ever suggest that foreign buyers have anything to do with Canada’s housing bubble. If you do I will call you a racist and state “facts” much like “unnamed sources”.

#117 Adrian on 08.22.17 at 11:29 pm

#112 Doghouse Dweller on 08.22.17 at 10:53 pm

I absolutely do not condone violence. I find it reprehensible. I did note from the link you provided that it mentioned a “minority of protesters came determined to provoke violence.” It is comforting to recognize that most people came to protest peacefully.

Also, I encourage you to research human primate cognition. We are social creatures, so absolute deprivation often matters less than relative outcome. This is not to condone violent behaviour, but it does suggest alternate responses… both to offending individuals & to many social ills.

#118 Vellasamy on 08.22.17 at 11:38 pm

“The YVR experience so far is dismal. The city raised about $2.2 million in tax and spent $1.5 million collecting it. ”

Source?

#119 Annek on 08.22.17 at 11:43 pm

Toronto is the financial capital of the country with thousands of Americans (and Europeans) working there at any one time for cross-border corporations. Many of them find it cheaper and more stable to buy than rent, so why should they be slapped with a tax on a property that’s occupied full-time?

I have been reading your blog for years. Many times you do a calculation why it is cheaper to rent than to buy and one should invest their money in the market etc.
You advocate renting for this reason.
Yet, today you state that many find it cheaper to buy than rent.
What gives?

#120 Smoking Man on 08.22.17 at 11:45 pm

A good dog on bay street till I wasn’t

https://youtu.be/Ckom3gf57Yw

#121 Mark on 08.22.17 at 11:51 pm

Falling RE prices can be thought of as a ‘tax’ on anyone who owns RE. Even stagnating RE prices, as has been the case in the GTA/GVR and the much of the rest of Canada since 2013 (2011 in Calgary) have significant opportunity costs. Prices have now fallen beneath 2013 levels in the GTA/GVR, so losses for those who have held RE are considerable, and are accelerating.

Its bad enough that these people are losing money, dramatically more than the cost of rent every month. But to tax them because they dare have an empty condo? Smells of complete ridicule.

On that note, there’s a new Ross Kay episode on TalkDigitalNetwork. As usual, Ross Kay is worth the listen.

#122 mouldyinYVR on 08.22.17 at 11:59 pm

“Canada is quietly emerging as a popular tax haven for the global elite, who create shell companies with figurehead directors to evade or avoid taxes, a Toronto Star/CBC-Radio Canada investigation has found.” “
http://projects.thestar.com/panama-papers/canada-is-the-worlds-newest-tax-haven/

We often look to Britain to inform Canadian policy decisions and certainly our businesses and bankers have a cozy relationship.

Richard Brooks’ book , “The Great Tax Robbery: How Britain became a tax haven for fat cats and big business,” is an enlightening and disturbing read for Britons and for Canadians.
http://policy-practice.oxfam.org.uk/blog/2013/03/the-great-tax-robbery

“The story is certainly one to inspire anger. Large parts of the UK’s tax system have been crafted by powerful corporations as the Government has increasingly drawn expert advice on tax from the ranks of the lawyers and accountants who advise the same big companies, despite the extraordinary conflict of interest this represents with quite predictable results.
The level of pandering to special interest groups has reached quite extraordinary levels, even to the point of stunning the lobbyists themselves. The recent introduction of tax exemptions for companies’ branches in tax havens is believed by some experts, quoted in the Great Tax Robbery, to “lead to most large multinationals paying reduced or no UK corporate tax”.”

“Canada is a good place to create tax planning structures to minimize taxes like interest, dividends, capital gains, retirement income and rental income,” (2010 internal memo from Mossack Fonseca)
It’s called “snow washing” — using Canada’s prudent reputation and solid economy to make suspect transactions seem legitimate. A sprawling international tax avoidance industry is increasingly touting Canada as a jurisdiction for hiding wealth.
And the Canadian government has made it easier than ever for criminals and tax cheats to move money in and out by signing tax agreements with 115 countries — the greatest number in the world.”

Yes, we need to keep asking questions about the offshore money that floods into Canada and about the tax avoidance schemes that our governments at all levels continue to willfully ignore.

#123 n1tro on 08.23.17 at 12:00 am

#88 Grantmi on 08.22.17 at 9:13 pm
#80 Fish on 08.22.17 at 8:56 pm
I guess hydro will take extra care on reading the meters

Utility consumption cannot be monitored as it would be a privacy breach. — Garth

Garth-O… they do it all the time for the PoPo and catching grow ops!

Not without a warrant. Governments cannot, by law, routinely monitor private utility use. — Garth
——————————-
As a young lad, I worked a couple of summers at Measurement Canada. Was bored a lot because I’d finish the week’s worth of work by Tuesday. Anyways, the government gets involved with meter reading and potential grow ops when the landlord calls in after having received a hydro bill that has doubled or quadrupled from the previous tenant. The landlord would blame Hydro’s faulty meter so I’d have to book an inspector to go pull the meter and test it at the office. 99% of the meters tested, ran perfectly. It eventually clues into the landlord that the tenant is running a UV light 24/7 to grow his few pots of weeds…for his glaucoma of course. The real grow ops aren’t detected through the meters as they dig and tap into the main line before it gets to the house. Neighbors usually tip off the police because the house is usually empty with blinds always drawn down and sometimes has a funny smell coming from it. Cops then fly over with a heat sensor to confirm the house is radiating more heat than any other house and can get a warrant from that. Also, grow op houses are usually only operated for a year before switching. They are usually patched up quickly and sold for cheaper than surrounding places. The listing agent is usually in on it.

#124 Smoking Man on 08.23.17 at 12:03 am

DELETED

#125 What if Trump terminates NAFTA? on 08.23.17 at 12:08 am

What if Trump terminates NAFTA?
what will be the impact on $CAD? in next 6-12 months?
What will be the impact on Jobs/Real estate?
Asking for a friend

#126 Smoking Man on 08.23.17 at 12:19 am

DELETED

#127 John on 08.23.17 at 12:23 am

Jeff on 08.22.17 at 10:45 pm
Check out this news from MortgageBrokers. Ontario Real-Estate things realtors and brokerages need more expensive fines, proposing to double the max:

http://snip.ly/ljvyc?utm_content=buffere2388&utm_medium=social&utm_source=twitter.com&utm_campaign=buffer#http://www.mortgagebrokernews.ca/news/real-estate-association-lobbies-for-tougher-regulation-229794.aspx

Realtors dont want a real regulatory agency to over see and or implement real changes and fines to this shady industry. The government needs to crack open this shady group of criminals as RECO or whatever they are called are nothing but a joke. No wonder so many hate realtors.

#128 Big Bucks No Whammies on 08.23.17 at 12:30 am

Wow… okay, the empty house owners already pay property taxes whether it’s rented or not, so not skipping out on social responsibility there. However, now if empty, will be forced to pay 1%. Hmmm, but if they get someone to rent, now they have to include those proceeds as income and get taxed at marginal rate at end of year. Abandon all hope, ye who enter a city to live in. Give a hoot, commute!

#129 Mauri on 08.23.17 at 12:33 am

Garth, can you please tell us how you learned so much about personal finance, taxation and economics?

By reading the comments section. — Garth

#130 Beezlebub on 08.23.17 at 1:04 am

How easy is it to enforce these new policies? I’m guessing not very – both for empty housing taxes (yes, people have to declare primary residences, but there are workarounds) and for the upcoming stress test.

I have an acquaintance who was able to purchase 10 homes to rent out by finding the “right” lender to just look the other way on the need for even a 5% down payment (I’m in Winnipeg, so 4-5 houses here = 1 house in some cities, but still…these were basically homes rented to welfare recipients in one of the more crime-ridden area of Winnipeg; social assistance payments are not going up anytime soon – but interest rates are…).

What’s to stop the banks from fudging numbers on the stress test?

How many teeth do all these new regulations and policies have?

#131 Newcomer on 08.23.17 at 1:07 am

Ownership has never given people the right to use what they own in any way they see fit. You can own a gun and a bunch of kitchen knives, but there are lots of things you can’t do with them. Cities have always decided what constitutes acceptable property use within their borders. It’s one of the things that make cities civilized. The wailing about socialism is totally misplaced here (it’s not like there aren’t enough genuine opportunities to bemoan it).

#132 M-cube on 08.23.17 at 1:30 am

Garth,

1) the vacant housing tax was not designed as a revenue generating tool. It was designed to bring underutilized housing stock back online. Even if it’s only 1000 homes in Van or TO, that is 1000 happy pot-smoking families who are now housed in the city.

2) property rights? that is a myth. No one owns anything.
Pre-history humans had to forfeit their land to the Native Americans,
who in turn had to forfeit their land to the Europeans,
who in turn had to forfeit their land to Global Citizens,
who in turn are all in the process of forfeiting everything and the kitchen sink to the Chinese! lol This is how the Earth works! Might is right.

In fact the whole universe is subject to this principle! Just ask that distant Star if it has property rights as it is being viciously gobbled up by a local Black Hole! No rights.

Property rights do not exist in this universe. So deal with it you aromatic bipedal hominid!

#133 waiting on the westcoast on 08.23.17 at 1:32 am

#112 Doghouse Dweller on 08.22.17 at 10:53 pm refers to this link… “We are heading into something that will have the professors postulating around the campfire for decades to come if any of us survive..

https://www.cbsnews.com/news/prince-charles-camilla-attacked-by-protesters/

Umm… That article is from 2010…

#134 Blacksheep on 08.23.17 at 1:42 am

Flop # 100,

“From my understanding that poster bought a place out in the valley for 450 or something and now it has doubled in value,which is great for him but how does that help out anyone on here?”
————————————
Cool, I’ve attained ‘He, who must not be named’ status.

But sure, sounds like an easy 1/2 mill, for doing sweet f-all, right?

That’s only part of the story.

I sold my primary res in 08 (1st big risk) before the GFC and put all my equity into Gold, (2nd big risk) cause I saw it coming. Rented for 5+ years, before re entering the RE market 3 years ago (3rd big risk) even as Garth and 90% of this blog was still calling for a harsh correction.

Now my realtor says my place will sell for about $ 950K
(view lot, sub dividable). So TO is cracking and Van may be wobbling and still, my wife and I decided to not sell, let er ride for a year and see what happens (4th big risk)

Whats that, you don’t give shit about me or my tale?

Didn’t think you did, but I was making a point and that point is: The only reason I’m up 1/2 a mill in 3 years (on paper, for now) is I ignored the group think here, thought for myself and rolled the dice.

Am I smarter than Flop or anyone else that stayed out of the RE market? Of course not, I just took significant risks (large balls, its genetic) and got lucky (so far) but only time will tell.
——————————
To all the whiners that chirped about my heinous attach’s on Flop:

Prove it, or shut the F-up.

Every word I ever typed on this blog, for the past 8 years has been documented by G.G. (Garth and Google).

Post ANY truly disrespectful comment I have ever made to Flop or any one else (excluding, Shawn of the banks) and you will never see my name polluting the comment section again.

You guys know how to Google..right? If that’s beyond your skill set, I’m sure Garth can hook you up, as I’m usually just a thorn in his paw anyways.

Good luck itches : )

#135 NoName on 08.23.17 at 1:59 am

#100 For those about to flop… on 08.22.17 at 9:54 pm

I don’t care what rest of the blog dogs and blackshep think and say of of you, in my books you’re are a good guy.

#136 jane24 on 08.23.17 at 2:19 am

Right, back from a month of holidays in Montreal and Toronto. I live in England and Italy most of the time as mostly retired. Old ex-agent and university professor in marketing too so I know my stuff. As promised I went out of my way to discuss RE with family, friends and total strangers to compare with last year’s trip.

Montreal response is that the city is taking off with Chinese money. Please note that I have known and loved Montreal all my life and it has never taken off. Locals though are hoping that Chinese money will FINALLY give them a run at Toronto prices. This gossip is everywhere.

Toronto doesn’t seem to know that it is pooched. Met loads of folk that believe market will return to normal in the Fall or next Spring and are planning on selling then for top dollar. Visited Toronto open houses in support of this blog and found them empty or with nosey neighbours in. Every agent on duty there asked for an offer, any offer to take to the owners. Some of these homes are owned by folk who have purchased first and now can’t sell. Trouble ahead. If you haven’t got out already, it is definitely too late.

#137 ulsterman on 08.23.17 at 2:22 am

UBC Alum on 08.22.17 at 7:24 pm
#8 jimbob on 08.22.17 at 6:01 pm

My son and his 3 university roommates just rented a house (not fancy; it doesn’t have a dishwasher or a finished basement) near the University in Vancouver for $3800/month.

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

I went to UBC years ago and my daughter was born in Vancouver. My daughter is starting university in a couple of weeks. When we discussed where she would go I told her “Anywhere but UBC. .

This raises the question, are you a bad parent if you decide to raise your kids in Vancouver and are NOT independently wealthy? Will your kids hate you for not choosing one of the more livable parts of Canada? What hope does a kid have who graduates university with a small five figure amount of debt and will start off at maybe 50k in income and will spend years earning less than 100k?

#138 Dave on 08.23.17 at 2:35 am

If someone can afford a second home for whatever purpose then they just have to pay the current costs that are thrown at them to maintain that luxury. Garth, you mentioned many times it’s not Chinese dudes but rather just supply and demand screwing up the affordability of living anywhere near a job, so this is an attempt to adjust these factors. I’m happy the government is meddling in this mess, though late in the game. I wish referendums could be done on things like this, democratically this would probably pass on a vote.

#139 Dave on 08.23.17 at 3:08 am

I should also add, I pay for a parking permit where I reside. First car is around $100, and second is around $250 additional. This is a strategy to control the limited parking spaces but given some people can afford the luxury, are willing to pay the premium to park a second car. The housing tax on empty homes should work to a degree in a similar fashion.

#140 Dave on 08.23.17 at 3:18 am

#103 great post!

#141 jim on 08.23.17 at 3:24 am

#66

” logic dictates that a vacancy tax (if properly implemented) would reduce vacant units.”

No, that has nothing to do with logic. As I have said on here before, logic is the study of deductive inference. What you are talking about is a cause-effect relationship in a system with multiple variables, agents, feedback loops, etc. Your argument is not deductive, hence it is not logic.

” Logic also dictates that it is better for a society to have housing units housing people rather than sitting vacant.”

Again, you don’t know what logic is. The word ‘better’ indicates that you are invoking either some notion of utility or some normative value. In either case, you are outside the realm of deductive inference and into something like economic modeling or morality.

#142 Reality 1 on 08.23.17 at 4:14 am

Apologies to Garth and all readers :

Last nite I posted several rather long, but REAL examples of the last (1989 – 97) real estate bubble bust in Toronto. Maybe too long winded ?

I posted to inform / remind us what can happen when a big bubble bursts – especially due to credit restriction, increased interest rates and negative sentiment shifts.

The intention was not to gloat, but rather to show what can (and did) happen to a Canadian market suffering similar delusions as those of today.

The extreme indebtedness, lax lending standards and low interest rates of today’s RE market will be facing different headwinds when sentiment inevitably shifts – demographics, economic growth and job quality concerns.

To me , the possibility now exists that this could metastasize into something very ugly for Canadians.

#143 Reality 1 on 08.23.17 at 4:27 am

to # 100 Flop

“…. and I did it MY WAY ”
You were the man that Frank Sinatra had in mind when he crooned that iconic song.

Major kudos for going your own way on your own terms and living by and for your priorities, not others.

Screw the naysayers !

You provide a real service here and I am sure most here see the altruism in your efforts.

Congrats on a life WELL LIVED !

#144 Reality 1 on 08.23.17 at 4:38 am

to # 101 Leo Trollstoy

For a guy who has professed his investment prowess here more than once, I am surprised you would act this soon.

Much too early, in my humble opinion, especially as it is a condo – catching a falling knife comes to mind.

Perhaps you could expand on your reasoning – I am sure people here would find it enlightening.

#145 Reality 1 on 08.23.17 at 4:55 am

WOW !!!

Some really quality postings on this thread.

This makes for a great blog and will hopefully encourage other readers to add their insights, anecdotes and experiences.

It helps us all to understand the reality of what is and what is coming.

And, I am all about Reality !

#146 Reality 1 on 08.23.17 at 6:21 am

to # 68 doug t

Let me get this straight …

You sold above listing price with 9 offers presented after being listed for a 3 days after 140 couples (no singles?) went through your house .

Yet the house you bought 4 blocks away (same neighbourhood ?) had to reduce $ 100,000 after 2 weeks on market presumably due to lack of interest.

Proof ?

Post listings links on BOTH properties or you have no credibility for your claims.

#147 Ian on 08.23.17 at 6:45 am

Hey guess what the price / earnings on the small cap Russell 2000 is?!! I won’t spoil it for you…

http://on.mktw.net/2uObmQ4

Not a recommended holding, nor has it been for quite some time. — Garth

#148 M on 08.23.17 at 6:51 am

#100 – great post. The world would be a better place with more people like you.

#149 Wrk.dover on 08.23.17 at 7:15 am

So I had a conversation with one of Lindsay Lohan’s mean girl cast on here the other day about the merits of a liveable minimum wage.

Then I was called Old Man! A compliment really considering the over a dozen very close friends that passed on prematurely over the years, and will never be old anything beyond old memories. Just think of me as the character in Gran Torino. 64 next week!

I have concluded that the people that disagree that it should be illegal for Bob Lowblaw to pay the seemingly distracted lady with the falling arches, carpal tunnel, poor dental work and sore back more than fifty cents for the four minutes total she just invested, scanning your food items, packing your bags and putting $200 in the till. Because …she should go back to school and become a one percenter, if she doesn’t enjoy her lot in life.

These minimum wage haters are going on opinion, not point. The American civil war was waged on human ownership, not colour of skin. Bob Lowblaw owns that captive behind the cash register. When the pointless opinionated saw their first homeless person when an infant, did their mother say, ” If Daddy loses his job, that could be us.”, or did she say “Don’t look at that, we are better than that loser.”

Then I was outed as sarcastic. Like our host you mean?

Get off my lawn!

#150 SimplyPut7 on 08.23.17 at 7:28 am

Thanks to a commenter in a post a few days ago (#121 GTA Vacant Homes Tax on 08.16.17 at 8:23 pm ),

I did go to the public consultation yesterday.

I almost didn’t go because I assumed the room would be packed and I would not get a seat. I’m glad I did, there was less than 40 people from the public, 6-7 staff from city hall, 5 people from the media (mainly City TV) and 1 huffing and puffing city councillor who sat and shook his head every 10 minutes (I think he’s for the tax and wants more housing in the city).

A few take aways:
* The questions they would like feedback on are the same ones in the survey online. Complete the survey to have your say:
https://www1.toronto.ca/wps/portal/contentonly?vgnextoid=e40bee998c7cd510VgnVCM10000071d60f89RCRD

* Garth, people using homes for work purposes is listed as an exemption

* If you are a speculator (domestic or foreign – only 1 person blamed foreigners in the entire meeting, you would be proud), and want to sell your investment property because you had no intentions of ever renting it; you have to pay the speculation tax while you are trying to sell your property, if the home is vacant.

* Someone asked if condo managers could be forced to tell the city if there are any vacant condos in the building, the city staff said they would look to see if they have the authority to do that.

* They are looking to implement a model similar to Vancouver e.g. 1% of the assessed property value; for the past several years up until April, Toronto home prices have grown over 10% a year, this tax is not a real deterrent to not keep a home empty. Some people did ask if they were looking at models from around the world such as Paris, and they said yes they were aware of the recent changes Paris made and were researching that model as well.

Some of the challenges brought up at the meeting.
* Getting the authority to check for vacant homes. Right now the number of vacant homes is an approximate and they do not have the authority to look at peoples hydro bills (due to privacy rights) to see if anyone is living in a particular home; they also mentioned the province knew they could not check hydro bills, when they gave the city of Toronto the authority to implement the tax

* What is the right level of home vacancy for the city, if the supply of homes to rent increases and the rents are reasonable, do you punish landlords (traditional apartments are not being considered for the tax) for not being able to find a tenant?

* Vancouver’s model is not very profitable. It was mentioned that Vancouver is making less than $700,000 net a year and the program cost $4.7 million in initial start-up costs. The huffing and puffing city councilor asked if staffing would be increased to check for vacant homes (one of the options in the survey) and the city officials holding the meeting said yes.

Overall everyone acted like adults in the meeting, there was no yelling or screaming or racists comments.

#151 maxx on 08.23.17 at 7:50 am

#6 waiting on the westcoast on 08.22.17 at 5:40 pm

“If you could just convince the politicians and economists that the market would take care of itself, these artificial bubbles would be replaced by smaller, quicker cycles as the market fixes it’s aberrations…

Instead, we are getting numerous entitlement campaigns and politicians who pander to them. It can’t last…”

Bingo. Now that government, the BOC, CMHC and FIRE have screwed the real economy into the ground, tptb have almost no choice but to repeatedly run to the medicine chest for impromptu (and expensive) bandaid solutions to social problems that have either magnified or never existed before their cartoon-character level tinkering.

Plus, nearly everyone’s unhappy about the state of finances. All finances. Everywhere. Even those with money, because there’s a pervasive feeling of what fresh hell of creative taxation may be coming down the pipes…..next week, month or year…..

#152 rents will go down? on 08.23.17 at 8:14 am

you sure?

own a house in downtown Toronto, bloor/christie area . rent all 3 floors. Cashcow. Once a floor becomes vacant, the interest is astounishing. I get some folks giving me a resume!! They just pay. Guess its the location, close to U of Toronto and subway system …..and housing is no longer affordable

#153 crowdedelevatorfartz on 08.23.17 at 8:18 am

@#131 Blacksheep

You put it all in gold or all in Real Estate and you’ve been reading this blog for 8 years?

I guess “balanced and diversified’ escapes you.
You should second mortgage and buy another house and rent it.( “because your REALTOR told you it was worth 950″……..riiiiiiiiiight)

We wont have to “prove” anything.
The falling RE market will take care of that 3 year, 5ook paper profit unless, of course, you list right now, sell for 950 or more in a bidding war, lock in that 500k tax free profit ( unlike the gold play) and go back to renting.
What the hell. You want to keep rolling the dice for another year in a falling market?

#154 crowdedelevatorfartz on 08.23.17 at 8:22 am

@#100 Flop
“There is a part of my heart that the sometimes cold and shallow city of Vancouver can’t have….”
******

Nailed it.

#155 terrible disconnect on 08.23.17 at 8:41 am

with real estate prices and the median Canadian family income in selected Cdn markets. If the correction has started understand we’re not even close to affordability . I don’t think we will get there. Canada will the reflect the European model- it’s normal to rent, abnormal to own. Sorry. Time changes things. Govt is desperately trying to correct issues she inherently caused. Too much damage.

Canadians need to embrace that renting is cool. You’re not a loser if you rent

#156 Hicksville Alberta on 08.23.17 at 8:41 am

It’s more than likely there are 60,000 to 100,000 empty detached, semi-detached, or condos in the Greater Vancouver Area and there is no way this is not a severe pressure on housing costs and/ or rental opportunities and from any common sense point of view, i can’t see how ordinary citizens ought to be held up to ransom or excluded from perhaps a more reasonable opportunity to have better access at ownership or rental.

The only thing that ought to matter is that significant housing stock is being held off the market in a completely antisocial manner that goes completely against the Public Good.

It doesn’t matter who is doing this nor their reason, but they have been benefiting greatly so far at an ever increasing cost to the Public Good.

Since the whole area is bloated, it would seem reasonable that the empty home tax ought to extend from say the Sunshine Coast all the way through to say Chilliwack and perhaps at least to Victoria and Nanaimo Areas on the Island, and imho ought to be at least 1.5 % to 2.0 % of the assessed or fair market value of the vacant property or unit.

Trying to pawn this off for Vancouver as the City has only raised 2.2 million to date and spent 1.5 million collecting it is specious at best.

The 2.2 million is something like a years tax on fifty empty West Side Vancouver houses only at around 4 million each or so and you could probably count that many in literally any four to six block stretch on the West Side, especially in the better areas like Point Grey.

So with so many empty residential units in the whole lower mainland area, the surface hasn’t even been scratched.

As to the 1.5 million in costs to date, i’m sure a great deal of that has gone to set up costs for the new bureaucratic empire that needs to be created to administer this pit that the same bureaucracy has so wholeheartedly enabled to be created.

Also Hats off to # 103 – Post ……… I think you have painted a fair picture of some of the goings on the over time have contributed to creating this mess.

So long as real estate is privately owned, it cannot be made into a public commodity. — Garth

#157 Penny Henny on 08.23.17 at 9:08 am

#137 Doug t on 08.22.17 at 12:22 pm
I just spent a week in Welland – driving from the airport in Toronto was an eye opener – I use to live in St. Catharines and now reside out west – the “golden horseshoe” has turned into a bloody mess. Truly sad the way it is being transformed into a soulless wasteland
/////////////////////////

Please go into more detail

#158 Eks dee Sipal on 08.23.17 at 9:12 am

Not without a warrant. Governments cannot, by law, routinely monitor private utility use. — Garth

A true but naive statement. Governments do it anyway. Governments of all political and economic stripes are responsible for 99.9% of the unnecessary deaths that have occurred in the last 100 years alone. Government is not the answer to the world’s problems. FACT.

Equally so, for those who believe in a mythical ‘invisible hand’ of the market, I have a slapping hand right here that is not so invisible that will surely wake you up from your particular Austrian economics fantasy.

#159 Eks dee Sipal on 08.23.17 at 9:32 am

The Queen’s biological daughter is Debbie Wasserman. Have I mentioned that? They are simply actors playing their roles. Lucky you have me to point it out.

Your worldview colours your perception. Anatomically modern humans in California close to 10 million years ago, suppressed by the Smithsonian:

http://www.mcremo.com/california.html

#160 Eks dee Sipal on 08.23.17 at 9:43 am

The case of Blacksheep is interesting to me:

For those new-er-ish to the blog, Blacksheep has explained in the past that he got sick of waiting for a housing correction a few years ago and bought a house. It has probably doubled in price since, so I guess he felt vindicated for a while, but now maybe is starting to realize that he should have waited. I think we all have struggled a bit with a similar circumstance during this unprecedented bull run in housing.

I assume he doesn’t want to sell at the moment but is afraid of losing the perceived equity gains should the collapse really get started this fall on the west coast. He’s only human and his several last posts are not typical of his usual reasoned logic, so definitely something’s going on with him. Cut him a break. It doesn’t make sense that he would attack the Flopster without merit like that. Maybe an imposter?

#161 crowdedelevatorfartz on 08.23.17 at 9:49 am

@#112 Doghouse Dweller.

You do realize the “news” story about Charles and Camilla being attacked by protesters happened 7 years ago right?

#162 Batt519 on 08.23.17 at 9:58 am

The Moisty anthem…

https://www.youtube.com/watch?v=RLcQG6utIIA

RE is dead, [email protected] is a crook. Buy $ilver.

#163 n1tro on 08.23.17 at 10:11 am

#139 Dave on 08.23.17 at 3:08 am
I should also add, I pay for a parking permit where I reside. First car is around $100, and second is around $250 additional. This is a strategy to control the limited parking spaces but given some people can afford the luxury, are willing to pay the premium to park a second car. The housing tax on empty homes should work to a degree in a similar fashion.
———————————–
That is a flawed argument. You pay a premium for a second parking spot because 1. The space belongs to the city or condo so they can charge what they like 2. The parking spaces on streets and condos are limited thus justifying a premium for the second spot.

Using the same logic and circumstances as the 2nd parking spot and applying it to vacant properties 1. The empty house or condo belongs to the owner. They should be able to do whatever they want (that is legal) including leaving it empty until the city makes it illegal to have an empty property. 2. There is no shortage of rental availability, it is just some folks like to bitch they can’t afford the current rent prices. The government then uses this SJW cause as an excuse to collect money and meddle in people’s business. If mayor Tory actually gave a shit about the people of Toronto that can’t afford rents, then he would pledge that 100% of the tax collected will go to affordable housing but he hasn’t and will not because he has already spent all of Toronto’s money and got his hand out for more.

I don’t have a second property so have no skin in the game but I can see the overreach that is happening by these idiot politicians and what is coming. Days like this, I miss that big fat crackhead of a mayor the city use to have.

#164 SW on 08.23.17 at 10:30 am

As social policy an “empty homes” tax is fraught with difficult issues around implementation and fairness.

It will only take the first public exposure of “But my Mom’s dying in hospital!” for this to be seen by everyone as stupid.

It’s tough, though. Politicians at all levels have to be seen to be doing something. Even if the result is going to counter-productive in terms of legal bills and the fuss when geezerette snow-birds chain themselves to City Halls around the nation.

It would be interesting for this to go to the Supreme Court of Canada, though. The result might not be as expected.

#165 concerned1 on 08.23.17 at 11:09 am

So, relax Squeezers. Rents will go down. Mr. Market has a way of looking after these things all on his own. Brutally.
__________________________________________

Rents going down in YVR. . .hahahaha. For realz? If rents go down everyone will commence to moving into YVR and rents will go higher than they were–because everyone wants to live there (even though it’s not nearly what it used to be).

Come on Garth. Your blog is starting to sound like it has a single minded hate-on for real estate. Almost like you want to spread false information or something. That, and the fact that a reader has to weed through 20 posts by smoking man and his aliases means this blog is getting worse.

You need threaded discussions so we can avoid having to read all of smoking mans drivel to get to the decent comments.

#166 Doug t on 08.23.17 at 11:09 am

#146

its ok believe what you want – booked mover yesterday for Sept 1

#167 n1tro on 08.23.17 at 11:23 am

#158 Eks dee Sipal on 08.23.17 at 9:12 am

I think you are leaning too much on the conspiracy side of things given the fallout of the whole NSA spying. In Canada, the Measurement Canada offices only have a handful of inspectors assigned to them. They spend the majority of their time going to companies that sell scales or meters and test sampling them before they are allowed to be put in use. The odd time the inspectors deal with the public is because someone has called in and complained they were overcharged for their deli meat because the scale is “fixed” or didn’t get enough gasoline from a pump. There was no “secret” back office that monitors people’s utility usage.

Doing something illegal at your primary residence? Be friendly to the neighbors as they are the ones most likely to call you in.

#168 jess on 08.23.17 at 11:23 am

mumbai blue dogs ?

ach du lieber……Thousands of Trump-shaped ecstasy tablets seized in Germany
========================
nearly 1 in 5 houses in Detroit are vacant. nationally, that rate is 1 in 63
http://www.pbs.org/newshour/bb/detroits-tiny-houses-give-residents-home-rebuild-lives/

luxury glut /overbuilt ? weed effect?
Denver paying down rents through vouchers
to those who qualify Denver Mayor Michael Hancock announced Tuesday that the city is close to scoring a major corporate partner to help launch a pilot program to buy down rents for as many as 400 apartments in Denver.

#50 After Communism on 08.22.17 at 7:52 pm

push and pull
what if the bomb that killed the Tsar didn’t take place
https://www.britannica.com/place/Russia/From-Alexander-II-to-Nicholas-II#ref421993

…”By the mid 19th century Russia was the serf capital of the world. It had twenty three million slaves owned privately and the same number again working on state lands. By comparison the U.S. had four million slaves, the British Empire 770,000 and Brazil 750,000.
http://russiapedia.rt.com/of-russian-origin/serfs/

#169 Ponzius Pilatus on 08.23.17 at 11:51 am

#129 Mauri on 08.23.17 at 12:33 am
Garth, can you please tell us how you learned so much about personal finance, taxation and economics?

By reading the comments section. — Garth
——————–
Soo funny.
This retort alone is worth the price of subscription.

#170 IHCTD9 on 08.23.17 at 11:53 am

#171 Willy H on 08.22.17 at 5:46 pm

Amazing how short and selective our memory has become.

The Harris government in Ontario did nothing with hydro for both terms…
________________________________________

Harris government?

Who’s that?

Never heard of them.

Give me a sec to Google them up:

Mike Harris
22nd Premier of Ontario
In office
June 26, 1995 – April 14, 2002

You mean this guy who was elected just as I was graduating College, and that my high school attending kids were not alive to see as Premiere?

You’re saying our extremely short memories forgot about this guy who was recently elected as Premiere 22 years ago, and that he played a significant role of some sort in 2017 hydro prices?

One last question – do you think we’re all totally brain dead?

#171 Reality 1 on 08.23.17 at 12:01 pm

to # 166 Doug t

No proof then ?

Of course we now know what to believe.

#172 Bytor the Snow Dog on 08.23.17 at 12:05 pm

@159 Eks Dee Sipal:

re: The link: The rantings of a Creationist.

Forgive me if I .

#173 Reality 1 on 08.23.17 at 12:06 pm

to # 166 Doug t

Wow, sold in two days, bought in a another day and moving Sept 1 ? During summer holiday season ?

Takes 30 days minimum to close either deal – no lawyer would do it faster and most want at least 45 to 60 days to close – takes time to search title, etc.

But please, by all means, enjoy your big move now.

#174 Bytor the Snow Dog on 08.23.17 at 12:06 pm

Forgive me if I […yawn…]

#175 Victor V on 08.23.17 at 12:07 pm

A third of Canadians say the Bank of Canada’s plan to raise interest rates will hurt their finances

http://business.financialpost.com/personal-finance/debt/a-third-of-canadians-say-the-bank-of-canadas-plan-to-raise-interest-rates-will-hurt-their-finances

Roughly one third of Canadians think the Bank of Canada’s most recent interest rate hike will hurt their finances, just as nearly three-quarters say their living costs have increased over the past three years, according to a new poll.

The survey, by Forum Research, found that 34 per cent of 1,150 respondents said that the central bank’s most recent 0.25 per cent rate increase “will have a negative impact on their finances,” with 12 per cent saying the effect will be “extremely negative.”

“A considerable number of Canadians are concerned about what the rate hike will do to their finances and they’re overwhelmingly in the middle categories,” Forum Research analyst Gary Milakovic said.

#176 nick on 08.23.17 at 12:08 pm

#17 Dave on 08.22.17 at 6:28 pm

Both my wife and I in Toronto and our folks in Mississauga and Brampton respectively have houses in our neighborhood that are clearly vacant. Their lawns are terrible, they’re falling into disrepair and need a lot of work.

____________________________________________

Actually, you would be surprised how many of those are actually occupied, but the people inside really dont care at all about maintaining it. I see it all the time. People have to call the city to get them to do something about it after it gets out of control, which takes forever.

#177 Dolce Vita on 08.23.17 at 12:16 pm

First off, I love you too Flop and ditto on the Vancouver sentiment.
_____________________________

G&M relaying TransUnion Vancouver and BC data shows fewer and smaller mortgages there (1st Qtr 2017 vs. 1st Qtr 2016):

Vancouver new mortgages dropped from 9,162 to 6,226 (-32%). Makes sense as unit sales have dropped by at least that much since Spring 2017.

Vancouver new mortgage amount dropped from $553,719 to $517,415 (-6.6%). Makes sense as only condos are selling in any quantity and are “cheaper” to buy.

For all of BC, new mortgages down by 20% and mortgage amount by -2.4%.

Still condo, town home and detached prices are ridiculously over priced but it looks like the unwinding of prices is happening in 2017.

“It is slowing, for sure,” said Matt Fabian, research director for TransUnion.

https://www.theglobeandmail.com/real-estate/the-market/fewer-smaller-mortgages-seen-in-vancouver-after-cooling-measures-enacted/article36049598/

#178 Mike in Edm on 08.23.17 at 12:22 pm

These new empty house tax rules are going to be great job creators!

I immediately thought “why doesn’t the owner of an empty dwelling just hire someone (ideally someone they know) to come around a couple times an evening and flush some toilets,run some showers? (turning off and on lights is not needed because of automatic timers). You hire some neighborhood kid and if he get hired by enough empty house owners, he’s got a pretty good gig!

A couple hundred a month to come in a couple times an evening for 10min (5hrs a month) to save thousands on an empty house tax is a pretty good deal for both parties.

If you’re smart about it (varying times, usage, etc) I’m sure you could get away with it at least enough to present your ‘evidence’ of living there to the government. If I had an empty dwelling in Van or TO I’d be looking into how I could cheat the system. And I’m not that slimy, so I’m sure many other people are looking to do the same right now.

#179 SimplyPut7 on 08.23.17 at 12:28 pm

#152 rents will go down? on 08.23.17 at 8:14 am

You sound like the people who told me home prices in the GTA will never go down, because supply is limited and demand is high. I’m sure those people feel a lot different about that scenario now, and the people trying to sell in the GTA would tell you that is not the case anymore.

The same will happen for rentals, many domestic speculators cannot afford to hold the properties when interest rates go up, and other speculators may not want to hold the property when prices start to fall. They will try to sell, find out there’s not many people willing to spend millions of dollars on housing anymore, and choose to rent to offset the negative cash flow and avoid selling at a loss.

As for your rental location, it’s good but not great. There are many condos, houses and townhouse along or near: Yonge St., Bay St., Front St. near union station, the desirable parts of King West and Queen West, and the Lakeshore near beaches and parks that are empty. This housing stock does not even include the homes that are being built and owned by people who have buyer’s remorse but are too afraid list their assignments out of fear of being caught by CRA.

After April 2017, the quality of the homes listed for sale in the GTA greatly improved. People used the same amount of money they were willing to spend on a run down shack or 400 sq ft concrete box, to buy better quality homes. The same will happen for rentals, I’m sure you have great tenants paying a lot of money for rent, as soon as the quality of the rental inventory improves and prices soften – they will leave you. You will have to lower the rent to encourage them to stay or face having to interview new tenants who may not be as easy to work with as your current tenants.

#180 I thinks I know something on 08.23.17 at 12:29 pm

#141 Jim on 08.23.17 at 3:24 am

” logic dictates that a vacancy tax (if properly implemented) would reduce vacant units.”

No, that has nothing to do with logic. As I have said on here before, logic is the study of deductive inference. What you are talking about is a cause-effect relationship in a system with multiple variables, agents, feedback loops, etc. Your argument is not deductive, hence it is not logic.

———————————————————–

My argument is definitely one of causal reasoning. While there are many factors affecting vacancy rates, I believe it is logical (or at least reasonable) to deduce that the implementation of a vacancy tax (that is NOT full of loopholes) would make it less attractive for “investors” to maintain a vacant property. A vacancy tax would incentivise them to rent said property, or sell it. Hence, it is logical to conclude that a vacancy tax would be a contributory cause to the effect of lower vacancy rates. I don’t believe that is a false inference.

#181 Mauri on 08.23.17 at 12:33 pm

Garth, can you please tell us how you learned so much about personal finance, taxation and economics?

“By reading the comments section. — Garth”

That is not believable, you have lots of technical knowledge.

Sigh. — Garth

#182 tetsicels on 08.23.17 at 12:37 pm

Toronto is not center of universe?

#183 conan on 08.23.17 at 12:52 pm

#158 Eks dee Sipal on 08.23.17 at 9:12 am

You did a nice job here explaining something that is very complicated.

The solution will be people.

My guess is that it will be a partnership with Government. I can not see a partnership with private industry working, as Uber, and the like, are not the sharing economy .

#184 Phoenix bound on 08.23.17 at 12:54 pm

Ha, ha, ha this whole speech in Phoenix was so funny that I couldn’t believe it was true. Unfortunately it is not fake. This guy is the most sick delusional individual I have ever seen other than the smoking guy and he compares himself to Garth as one and the same? Still trying to figure that one out.
Jesus Christ Trump has the Nuke codes WTF?

http://time.com/4912055/donald-trump-phoenix-arizona-transcript/

#185 Victor V on 08.23.17 at 12:57 pm

Rule-breaking realtors should face stiffer penalties, says OREA

https://www.thestar.com/business/2017/08/22/rule-breaking-realtors-should-face-stiffer-penalties-says-orea.html

#186 Phoenix bound on 08.23.17 at 1:00 pm

Ladies & Gentlemen may I please introduce the worlds greatest Prevaricator.

http://www.cnn.com/2017/08/23/politics/donald-trump-arizona/index.html

#187 Doghouse Dweller on 08.23.17 at 1:13 pm

#161 crowdedelevatorfartz
You do realize the story about Charles and Camilla being attacked by protesters happened 7 years ago right?
———————————————————-
Yes and the French Revolution happened 228 years ago.

Recent disturbances in the Force
2017 – Washington DC, Berkeley, Anaheim, Berkeley (again), Berkeley (again), Olympia, Portland, New York City, Boston, Hot Springs, Ark., Portland, Houston, Memphis, New Orleans, Hamburg, London , Barcelona, Quebec city, Montreal, Paris, Caracas, Hong Kong, ctc……….

https://www.youtube.com/watch?v=EKu7TYWNxqA

#188 Tazi Bnu on 08.23.17 at 1:16 pm

I’m wondering if the work around for SFHs is to tear it down and wait till the law changes, or for when you want to sell. Then build a brand new home that would sell easier. Maybe the cost to tear down is too high? Maybe not having a house on your property isn’t a valid reason to not have someone live there, or is somehow illegal? Maybe the laws become more communistic from here on and it’s better to get out?

Say this like Yakov Smirnoff “In free country you own house, but in Soviet Russia House owns you”

#189 Victor V on 08.23.17 at 1:18 pm

http://www.cbc.ca/news/business/transunion-mortgages-debt-1.4256026

Canadians owe more than ever before on their mortgages, but fewer and fewer borrowers are falling behind on their payments.

That’s one of the major takeaways from a report published Tuesday from credit monitoring firm TransUnion, which looked at every active credit file across the country to gauge the financial health of borrowers and consumers.

TransUnion found that as of the end of June, the average Canadian mortgage had $198,781 left on it, a figure that has increased by almost five per cent in the previous 12 months. That’s in part a factor of high housing prices, which have prompted people to borrow more than ever to finance a home.

But it’s not just that people are borrowing more — more people are borrowing, too.

“The total number of active mortgage accounts grew annually to 6.0 million, an increase of 1.2 per cent from last year,” TransUnion said.

#190 InvestorsFriend on 08.23.17 at 1:20 pm

Finally, Some Recognition…

#129 Mauri on 08.23.17 at 12:33 am

Garth, can you please tell us how you learned so much about personal finance, taxation and economics?

By reading the comments section. — Garth

*********************************
You’re welcome!

#191 Mike in Edm on 08.23.17 at 1:32 pm

#52 Dan.t on 08.22.17 at 7:52 pm
All boomers had to do was buy a house, live and work in a major city, now they can cash out and retire like kings thanks to stupid policies, plus dumb millennials, who got bank of mom to foot the downpayment with their new found equity and mortgaged their soul to the bank for years of bank servitude acting like they own something…….
I don’t get the problem. Every policy for the last 15 years was to encourage housing…
***************************
You know how the large majority of boomers about to retire have no retirement savings? Why do you think the Gov’t did this? It gets them off the hook for all the idiots that didn’t save a time.. And the ones that don’t cash out from winning the house lottery , well, the Gov’t can say “You should have sold months/years ago”. It’s genius of the gov’t really.

#192 Cliff Dunlop on 08.23.17 at 1:35 pm

I had to move into rental accomodation because my neighbour contaminated my suite with mold and I’ve been suing him for a year now to fix his water problem and remediate the two suites. I can’t occupy it, I can’t rent it and I can’t sell. Raymond Louie our Vancouver councillor said he would “attempt” to get my suite excused for this year (no promises). Vancouver Health won’t touch us because I’m an owner not a tenant. Our strata won’t represent us because no common property was affected. My neighbor is sociopathic strata lawyer who knows how to play the game. My last hope is the CRT and they are just a joke. I wish I’d just filled in the wall with bleach and foam and covered it over instead of trying to behave responsibly and follow proper procedure. There is no justice. We are there to be screwed.

#193 Penny Henny on 08.23.17 at 1:42 pm

#173 Reality 1 on 08.23.17 at 12:06 pm
to # 166 Doug t

Wow, sold in two days, bought in a another day and moving Sept 1 ? During summer holiday season ?

Takes 30 days minimum to close either deal – no lawyer would do it faster and most want at least 45 to 60 days to close – takes time to search title, etc.

But please, by all means, enjoy your big move now.

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

my deal closed in 3 weeks

#194 MPM on 08.23.17 at 1:45 pm

Is it just me or is he rental debate like watching a dog chase its tale? Every year the same conversation with nothing being accomplished.

If you look at any Canadian city, the basis of the rental stock is from the 60’s and 70’s. This occurred because at the time there were large incentives for the development of pure rental buildings. So why can’t we do this again? We keep building condo towers that people purchase and hope they will put the suites up for rent, then when they do we punish them and say they are evil oligarchs.

This conversation is ridiculous. It’s like trying to remove a wart with tweezers, it keeps coming back.

#195 IHCTD9 on 08.23.17 at 1:58 pm

#160 Bytor the Snow Dog on 08.22.17 at 4:51 pm
IHTCD9 sez:

“1. The government is not broke because everyone is cheating on their taxes, they’re broke because they are blowing piles of tax revenue on ideological crap that provides no financial return back to them. ie. they are spending more than they take in.”

**
You and I are on different planes of the political spectrum and we can see this. Why is there no great political will to fix it?

_______________________________________

Because Ontario voters don’t care to see it actually get fixed.

They’re perfectly happy the minute the bill goes down $25.00. The way it was done and the future ramifications thereof mean nothing.

The MSM fully documented the methods employed by Wynne, and even published the expected Y/Y cost spikes in the early 2020’s needed to cover the debt clearly showing a price disaster even worse than what we have now.

Wynne’s popularity went up.

Any politician trying to actually fix the problem would be drummed out of office the very next election. Major widespread long term irrevocable financial pain will be required before any fundamental problem solving will be tolerable to the electorate.

I’m sure every seasoned career MPP in Ontario knows what the problems are, and what could be done to fix them, but they also want to be voted into power again next election. So, we got a band aid that eliminated having to make tough, and politically damaging decisions.

This is one reason why I’m doing what I’m doing. I can’t trust that the Ontario voters will vote for long term success. It’s all about the here and now, we’ll worry about tomorrow later. Nothing proactive, all reactive. I have no choice but to take matters into my own hands, or go down with the ship (ie, pay for the hurricane of stupidity without end somewhere along the line)

#196 Mike in Edm on 08.23.17 at 2:01 pm

#31 Danny on 08.22.17 at 7:09 pm
Toronto – Bloor Street and Islington Ave. New Trends:
Not sure what is going on but ….over the last 2 weeks alot more large homes are for rent. Ranging from $2,300 for a 3 bedroom to $5,500 for four bedroom.
Is this resulting from the vacant tax discussion or are speculators deciding to rent instead of selling…they know the market is so low…renting is more profitable and maybe they are secretly listening to Garth?…
***********************
Exact same thing as what’s been happening in Calgary for a few years now… Owners would sell if they could, but refuse to because they’ll end up with a loss, so instead they rent out their property (often times for negative cash flow) and hope prices rise back up, or if stagnant, they’re stuck for sometimes several years till eventually their tenants pay off enough principle or the market rises again.

#197 IHCTD9 on 08.23.17 at 2:07 pm

#192 Cliff Dunlop on 08.23.17 at 1:35 pm

I wish I’d just filled in the wall with bleach and foam and covered it over instead of trying to behave responsibly and follow proper procedure.
_______

Gaining wisdom is often hard won.

Almost no one sidesteps the process by taking good advice.

#198 maxthetax on 08.23.17 at 2:22 pm

I applaud the efforts of big government to tax the crap out of the rich who treat land community and living space like some place to park their laundered cash. Let’s make property purchase legal conditions like in Switzerland and Israel. No citizenship? no land for you!

Imagine if the US had such a parochial law. Canadians would scream. — Garth

#199 Local Speculators Please on 08.23.17 at 2:25 pm

A sensible man with a following. Garth missed the mark today. Weighing his blog readers a bit too carefully. Speckers are certain foriegners. Horny for Van area for the sake of proximity to the mainland. Not being racist, just the facts. Truth be told, let the heavens fall.

Most speculators are locals. Statistical fact. — Garth

——–

Link to that FACT please in BC and the Lower Mainland?

If you have that data then you can surely shape the development of policy initiatives and change the narrative on speculation in BC and target ‘domestic’ speculation.

I will wait with bated breath.

Meanwhile, the influence of foreign capital – both legal and illegal – on house prices has been documented ad naseum by credible news sources and even provincial data – not the franken number realtor data that is routinely discounted when it shows price increases.

Sorry Garth, foreign and domestic speculation is a driver of the affordability crisis but the substantive and empirically sound existing data all points to foreign influence.

#200 gobstopper on 08.23.17 at 2:25 pm

Easy solution. Rent under the table for half the price. win-win. The only loser is the gov’t who set the rule.

#201 TJM on 08.23.17 at 2:46 pm

I can see both sides of this argument but it’s more complicated than that, and the nuance is really lost here.

People need places to live. It’s a basic necessity. And in a perfect world, market forces would balance supply and demand so that everyone can get what they need at a price they can afford.

But when a basic necessity also becomes a speculative instrument, you run into problems. Housing gets priced according to the most optimistic assumptions about its future value. The cursed winners of these bidding wars drive up the price of the whole supply, and the large mass of people who don’t have enough money to compete for inflated assets (whether buying or renting, doesn’t matter–rents have risen along with sale prices.)

Meanwhile there are confounding factors, such as NIMBY homeowners who have bought property in desirable locations and can flex their political muscle to prevent new supply from being produced.

So we don’t live in an undistorted market. And in those circumstances, whatever you do is going to be a second-best compromise.

So, given that the poor (and not even poor, just the non-rich) will always be with us; given that both rental and owner-occupied housing in many places has become unaffordable to a non-trivial part of the population; given that the high prices are pretty strongly corrrelated with where the actual jobs are (so we can’t just say “get out of Toronto and go live in Cochrane or whatever”; and given that the pricing of this basic necessity has been driven up by the actions of those with both access to money and unrealistic expectations of future windfalls–what ARE we supposed to do?

One of the logical flaws on both ends of the political spectrum is an overly idealized picture of how things actually work in real life, while deluding themselves that they’ve got the more realistic view of how they work and therefore are best positioned to make things work how they SHOULD. I can whale on lefties too, but on the right wing, there’s much gnashing of teeth about how this- or that- policy punishes the relatively affluent, but there is little offered in the way of proposals to help the non-affluent.

And this stuff is way too complex to say definitively, a year after something was introduced, that it didn’t work. (And even if rents do come down, we won’t be able to say for sure that it DID work. There are just too many confounding factors.)

I’m a government policy wonk, and if there’s two things I can say about that work, it’s that (1) most problems are wicked, complicated messes with known and unknown knowns and unknowns, unintended consequences and ramifying fractal complexities; and (2) there’s no shortage of people offering simple solutions (including “do nothing.”) At best you get an imperfect solution that may or may not have made things somewhat better; at worst you get something that backfires terribly.

#202 NoName on 08.23.17 at 2:49 pm

BlackSheep did you sold all of you gold in mid 2012 or you kept some???

what say you?

#203 http://globalnews.ca/news/3691046/bc-green-leader-calls-for-foreign-buyer-limits-on-agricultural-land/ on 08.23.17 at 3:08 pm

http://globalnews.ca/news/3691046/bc-green-leader-calls-for-foreign-buyer-limits-on-agricultural-land/

#204 paul on 08.23.17 at 3:34 pm

#186 Phoenix bound on 08.23.17 at 1:00 pm

Ladies & Gentlemen may I please introduce the worlds greatest Prevaricator.
—————————————————————–
Hey it came from C.N.N. nuff said.

#205 Dan.t on 08.23.17 at 3:39 pm

#129 Mauri on 08.23.17 at 12:33 am
Garth, can you please tell us how you learned so much about personal finance, taxation and economics?

By reading the comments section. — Garth
—————————

Haha, that was good!

————–
#155 terrible disconnect on 08.23.17 at 8:41 am
with real estate prices and the median Canadian family income in selected Cdn markets. If the correction has started understand we’re not even close to affordability . I don’t think we will get there. Canada will the reflect the European model- it’s normal to rent, abnormal to own. Sorry. Time changes things. Govt is desperately trying to correct issues she inherently caused. Too much damage.

Canadians need to embrace that renting is cool. You’re not a loser if you rent

———-

Right on, but it’s canada, you are a loser if you rent…”just throwing your money away” and tons of other stupid comments. Until sentiment changes, Canadians will follow the herd and try to look cool in front of colleges and people they don’t know. Fake and insecure. But as long as you are doing what everyone else is doing, you are golden.

Ive been a way long time but when I visit and that is almost every year for 8-10 years, BC just keeps getting worse and worse and more materialistic and all that matters is housing. Sad state of a city when everyone wants to leave…it’s like a love hate relationship. Those that cut the cord seem happy, those that stay love it but hate it…unless you bought 16 years ago of course.

#206 John on 08.23.17 at 3:56 pm

IHCTD9 on 08.23.17 at 11:53 am
#171 Willy H on 08.22.17 at 5:46 pm

Amazing how short and selective our memory has become.

The Harris government in Ontario did nothing with hydro for both terms…
________________________________________

Harris government?

Who’s that?

Never heard of them.

Give me a sec to Google them up:

Mike Harris
22nd Premier of Ontario
In office
June 26, 1995 – April 14, 2002

You mean this guy who was elected just as I was graduating College, and that my high school attending kids were not alive to see as Premiere?

You’re saying our extremely short memories forgot about this guy who was recently elected as Premiere 22 years ago, and that he played a significant role of some sort in 2017 hydro prices?

One last question – do you think we’re all totally brain dead?
————————————————————

You are IHCTD9 . You are an idiot. Mike the CONservative Harras DEREGULATED Hydro. If you don’t understand History then you are an IDIOT!

#207 Gravy Train on 08.23.17 at 4:06 pm

#192 Cliff Dunlop on 08.23.17 at 1:35 pm

I don’t claim to be a lawyer or legal expert, but when I owned a strata property—over a decade ago now—I needed legal advice, and found several very helpful publications:

(a) Mike Mangan’s The Condominium Manual: A Comprehensive Guide to Strata Law in British Columbia.
http://www.condomanual.ca

(b) Strata Guides
http://www2.gov.bc.ca/gov/content/housing-tenancy/strata-housing/more-help-and-support/strata-guides-archived

(c) Strata Property Act
http://www.bclaws.ca/civix/document/id/complete/statreg/98043_00

(d) Strata Legislation
http://www2.gov.bc.ca/gov/content/housing-tenancy/strata-housing/legislation-and-changes/strata-legislation

Well, Flop, am I in your good books yet? No? I bet Saint Peter is more forgiving than you! :)

#208 John on 08.23.17 at 4:08 pm

IHCTD9 You know what else Mike the CON Harris played a significant role in 22 years ago will result in screwing people over for the next 80 years? It’s called the 407. That means kids born today who use the 407 will have to pay because of something mike harras did 20+ years ago. It’s so easy to make CON look brain dead. LMFAO at YOU!

#209 S.Bby on 08.23.17 at 4:09 pm

#134 Blacksheep

You are a legend in your own mind…

#210 So glad I sold on 08.23.17 at 4:15 pm

Overheard a couple talking about purchasing a condo in Coquitlam because they could afford there. He told his girlfriend they should buy 2 because it’s only 5 percent down and they both have good incomes. She said what about the cmhc insurance as that adds a lot to the mortgage.
He suggested they borrow from the bank of mom although he said when he did approach his mom with the idea she got quite upset.
Looks like the Fomo is still going on but at least his mom and I think hers as well were not going to hand over money as that would mean the moms would need to get funds from a Heloc on their homes. These are senior parents. What is wrong with kids who think they are
entitled to buy.
I was around in the 70’s and 80’s when inflation went nuts. Lucky for us we sold our first house (which we bought in 1974 for 37,500 and sold in 1979 for 80,000.
Bought our next house for 105,000. When the rates went up we weren’t as impacted as we took out a 5 year mortgage at just the right time. I know a person who took a loan out on their house to put money down on 10 homes and when interest rates skyrocketed, they lost everything.
Will be interesting to see if OSFI implement changes as proposed, as I think that should have been done a long time ago.

#211 Blacksheep on 08.23.17 at 4:23 pm

Flop # 53, 08.21.17

“all I want to do is to give something back to this blog and so all my findings are posted on this blog and then belong to you guys.”

Being the capitalist I am, I asked my self, ‘why would someone expend SO much effort, for months on end, for absolutely no personal gain’? Altruism…….really?

Flop 08.22.17

“My wife and I talked about moving further east and perhaps buying”

Ahh….finally, Flop and I have some common ground, we both want RE values to change.

I want RE values to increase, because I already own, Flop wants RE values to decrease because he is considering buying.

There you have it, straight forward, honest statements on where the two of us stand on RE’s future.

#212 Leo Trollstoy on 08.23.17 at 4:29 pm

Takes 30 days minimum to close either deal – no lawyer would do it faster and most want at least 45 to 60 days to close – takes time to search title, etc.

Completely false

#213 Blacksheep on 08.23.17 at 4:31 pm

S.Bby, #134 Blacksheep

You are a legend in your own mind…
———————
I know, right?

Sometimes I’m so F-in awesome, I even surprise my self.

#214 Victor V on 08.23.17 at 4:39 pm

Toronto Housing Bubble ‘Has Expired And Gone To Meet Its Maker’

http://www.huffingtonpost.ca/2017/08/23/toronto-housing-bubble-has-expired-and-gone-to-meet-its-maker_a_23158813/

Six months ago, Bank of Montreal chief economist Doug Porter said what many were thinking and declared that Toronto has a housing bubble.

Now, Porter has given that bubble its death certificate.

“This is a late bubble. Bereft of life, it rests in peace,” he wrote in a client note last week.

#215 Stan Broock on 08.23.17 at 4:43 pm

Now they want our CPP to pay for infrastructure projects.

https://ca.finance.yahoo.com/news/cpp-reform-help-lift-plan-080004872.html

The village idiot’s (with trophy wife) ideas:

The government’s $35-billion infrastructure bank will seek to use public funds as leverage to attract billions more in private investment for major projects, such as new bridges, transit systems and rail lines. Ottawa has said it hopes the Canada Infrastructure Bank will entice institutional investors, such as pension plans, to participate.

#216 Tazi Bnu on 08.23.17 at 4:51 pm

#208 John on 08.23.17 at 4:08 pm
IHCTD9 You know what else Mike the CON Harris played a significant role in 22 years ago will result in screwing people over for the next 80 years? It’s called the 407. That means kids born today who use the 407 will have to pay because of something mike harras did 20+ years ago. It’s so easy to make CON look brain dead. LMFAO at YOU!
___________________________________________
Wow you need to let go of that hate, it’s consuming you. What Harris may or may not have done has no bearing on the current Ontario government and it’s failings. If they wanted to fix whatever Harris did they’ve had the power to do so for how long now? This government wasn’t forced to do anything, it freely chose it’s actions and should be judged accordingly. If the 407 decision from 20+ years ago makes you lose your mind then politics might not be for you. Lower your stress, let go of the hate.

#217 Reality 1 on 08.23.17 at 4:52 pm

to # 193 Henny Penny

What is it with you guys ?
closed in 3 weeks
Proof ?

did you simultaneously close on another property ?
i.e. do 2 deals back to back in 3 weeks ?
and arrange to pay off one mortgage and obtain another also in that time ?

3 weeks is very fast, especially in a hot market where all real estate related transactional services slow right down.

and, what were the circumstances of your sale ?

cash buyer?
private sale?
did you try to close during peak holiday season?
was your lawyer a close relation?
did you have to discharge a mortgage?
did you use a real estate specialist lawyer or someone in general practice ?
did you pay a premium rate to expedite the sale ?
was it actually 21 days (3 weeks) from sale to close – check the dates.

and oh yeah, would you have a problem in posting your MLS listing, etc. to verify – cause Doug t. couldn’t even do that

Heck, even Smoking Man, as f’d up as he is half the time, managed to at least post his listing and details.

conversation over – unless either of you respond with some credible proof

#218 Deplorable consequences on 08.23.17 at 4:52 pm

Price of the back page ladies will go up.

#219 Blacksheep on 08.23.17 at 4:53 pm

NoName # 202,

“BlackSheep did you sold all of you gold in mid 2012 or you kept some???
what say you?”
————————————–
Sold all the Gold post peak, when ever that was, years ago.

The whole “The Feds going to inflate the hell out of dollar” is crap.

Read up and understand MMT (Stefani Kelton is great) and you will never want bullion (or to pay your taxes) again. I must admit, I kept some Silver precious that when the mood is right, I pull out and fondle while enjoying a glass of Cab.

#220 Reality 1 on 08.23.17 at 5:02 pm

to # 21 Leo Tollstoy

Ah, Leo
The master of the meaningless one liner.
Substantiate your difference of opinion or don’t bother commenting.

Did you close on your new $600 K condo that you so wisely “vultched” 3 months into the biggest correction in real estate history (told you – too early) in 3 days too ?

What were the circumstances of your ‘fast closing’ experiences.

Do tell.

#221 Blacksheep on 08.23.17 at 5:07 pm

Disclaimer:

Never by gold, its a terrible investment.

I lost a fortune my self.

#222 Reality 1 on 08.23.17 at 5:15 pm

to # 215 Stan Brook

Never mind the CPP investment – at least they will get a return – they are good that way.

The bigger outrage should be that we can’t afford to build from our tax revenues and have to stoop to 3Ps (Public Private Partnerships) to fund PUBLIC INFRASTRUCTURE NECESSITIES – that money having been wasted elsewhere in the government bloat.

And…. the biggest outrage is allowing basic infrastructure to become ‘toll roads’ for private money interests in perpetuity !

#223 Dissident on 08.23.17 at 7:25 pm

@Garth – I have to disagree with this statement – (By this logic, anyone with a house they live in full-time with an idle basement suite, or two empty bedrooms the kids used to occupy, is an equal target.)

No, that’s not logical, because they’re specifically going after people who own more properties in addition to their primary residence. They are interested in the extra house or condo, not the extra rooms in the primary residence. Realistically, those extra rooms are not taking away a home from anyone. Its already theirs. A stranger cannot dually own or occupy it.

Housing is not a right, no. But neither is it a right to own more than one! ;)

When people can’t afford to live in the city they grew up in…even though they work hard, contribute taxes, and have life goals, etc, and property values go up by $300,000 in the span of 3 years in a freak accident of the market, because of greedy individuals and a lackadaisical government who is eyeballs deep in this pyramid scheme…….then that’s really sad and shouldn’t be a reality for everyone under a certain age or financial bracket. Something has to be done.

You’re speaking from a place of privilege. Don’t forget that.

If the supermarkets were suddenly raising their prices on produce based on artificial demand based on greed and it left people unable to feed themselves…wouldn’t you say that those tax paying people and those families had a right to food?

Food and basic shelter are human rights. Owning real estate or having an affordable apartment in New West are not. — Garth

#224 Mauri on 08.23.17 at 8:08 pm

phony like all politicians…..

#225 commonsense on 08.24.17 at 10:36 am

#139 Dave on 08.23.17 at 3:08 am
I should also add, I pay for a parking permit where I reside. First car is around $100, and second is around $250 additional. This is a strategy to control the limited parking spaces but given some people can afford the luxury, are willing to pay the premium to park a second car. The housing tax on empty homes should work to a degree in a similar fashion.

—————————

on top of what #163 n1tro already said … I would add this

Imagine this scenario:
– you have two cars (because you can afford it and you want to, you don’t need to give explanations, you have the right to do so)
– you can only use one at a time
– but then cars become expensive (not everyone can afford one)
– then people with no cars start believing that having a car is a right, an entitlement. and start to put pressure on politicians (they dont want to lease a smaller car, then don’t want to move elsewhere, they don’t want alternatives… they believe owning or better renting options are a right, go figure, 1st world problems)
– politicians will react (of course, it’s the smart political move, you know… elections…).
– then government say that will charge you a fee for the car you are not using everyday (your 2nd car). some types of political parties and governments are never going to miss the opportunity of getting another source of income. they see $$$ and they go for it.
– how would you react?

My point is: do you imagine the same approach with any other type of asset or propertly? impossible!

you are supposed to be entitled to have 10 cars if you want. why would the government charge you a fee in order for you to sell your car to somebody that doesn’t have one. the same goes for houses or TVs or stocks or whatever…

I don’t even know if this new rules from government are even breaking the law or violating some rights at some point. it seems like too much to arbitrarily charge a fee on people because they don’t use their property. that’s insane.

what’s next? are they gonna charge me a fee because my house has 6 bedrooms, but there are only 2 people living on it?

BTW: I don’t have any 2nd property, have never had one and so far will never plan to. I believe there are better ways to make money or have fun in life. so this is not a biased opinion.

this is starting to look like a communist country. it’s unbelievable.
or something stupi… like #198 maxthetax

what is wrong with people these days?

#226 chopstix on 08.24.17 at 3:03 pm

#52 Dan.t on 08.22.17 at 7:52 pm
This was all by design. Gov pumped housing on purpose to get the little beavers spending money…keeping interest rates artificially low for over 10 years and allowing banks to loan to anyone with a heart beat. Sponsored Real Estate “News” pumped 24/7 did it’s job. HGTV took care of the rest.

The gov gives and takes away. No boomers were complaining when they cashed out of their 1972 Burnaby Bung or Aldergrove run down shack for 1.8 million that they bought 28 years ago for 68k.

Party seems to be over. If you won the RE lotto just by being born at the right time, good for you, hope you cashed out.

I hope RE crashes and burns in BC. Maybe people will stop talking about it for half a day. Why is it a problem to have affordable housing policies and reasonable rents, oh right, you don’t like it, move out of YVR and live on a farm in Sask.

Stupid policies and brainwashed house horny Canadians obviously can’t control themselves so why shouldn’t the gov step in now. Don’t be a hypocrite. It is class warfare. All boomers had to do was buy a house, live and work in a major city, now they can cash out and retire like kings thanks to stupid policies, plus dumb millennials, who got bank of mom to foot the downpayment with their new found equity and mortgaged their soul to the bank for years of bank servitude acting like they own something. At least they can show their face around the water cooler now and talk RE as an owner…so much more sophisticated than those poor stupid renters. All that matter in Canada is real estate and maybe hockey.

I won’t even get started on policies allowing laundered and illegal money to flow into the RE market.

The stupidity in Canada can’t end soon enough. It’s like a plague. Even now, comments on here about vultching and a correction is like 3 months old. Van nothing really yet. Who care if a house is down 100k from 1.8 to 1.7, how many working Canadians can afford that…oh, I forgot, pool money with friends, beg bank of mom, borrow 5 ways to get the downpayment, and be rich. Just flip it in 18 months for 300k tax free money.

Affordable housing sucks. Insane rents and nose bleed housing obviously is how you build wonderful cities.

I don’t get the problem. Every policy for the last 15 years was to encourage housing, they interfered in the market to get housing to this point (or was Christy Clark’s free 37k downpayment not interference among with 20 other incentive given over the years) and now it is a problem when policies come into place to tame the beast? About time, just 10 years too late.
—————————————————
Bingo, Dan the Man:
and also tax the shit out of Air BnB, another cancer that is taking away affordable long term rentals.

#227 Dan on 08.26.17 at 3:18 pm

Someone here says that condos could be used for conducting a business. Which kind? Is that how your mothers put you thru college?

#228 Dan on 08.26.17 at 3:20 pm

And also may I suggest that a job be a human right too?
Or it is not so important in a tribal society?

#229 Dan on 08.26.17 at 3:51 pm

And by the way that photo on the top remind me of one real cool thing in Toronto. Toronto Public Library. It is a generous class act which lives a lot of the world library systems in the dust. But than again, people who read books are dangerous . Better for society to have more stupid people.