Could be worse

He drove his boat through the streets of Houston, rescuing as many dogs as possible from drowning.

_________________________________________

A big week. On Tuesday real estate boards grudgingly publish the dismal data on August agony. On Wednesday interest rates go up (maybe – there’s currently a 56% chance). And in Kelowna, T2 and his money guy Bill Morneau face a caucus of Lib MPs nervous over federal plans to crucify their small business constituents.

Meanwhile gas prices soar thanks to Harvey, North Korea edges closer to becoming a smoky hole and your kids start leaving home every morning.

This autumn shapes up to be a corker. Higher rates, fatter taxes and a gonzo of a mortgage stress test are all on the Canadian agenda. Kim Ding Dong is daring the Trumpster to invade, but may end up being spanked by China. Germany has a landmark election and the US Congress might pass a tax relief bill that ignites the stock market.

Volatility, uncertainty and change. Get used to it. If you have a financial portfolio which is diversified and balanced, you’ll be fine. If your only asset is your house, maybe not. Sales in the GTA continue to erode (although August was typically quiet), while Victoria and Hamilton see prices start to wither and Vancouver wonders where the move-up buyers went. Soon 80% of markets will be stagnant or falling across Canada, and this is likely the week we hear year/year price gains in Toronto have gone from 30% to zero, or even negative.

The big news for many families is the epidemic of non-closings now taking place. This is reflective of a market still rapidly decelerating. As of Friday (September 1st) the number of active listings in the GTA hit an all-time low of less than 5,000. In just two months inventory has shrunk by 2,000 properties as sellers give up and withdraw.

Fewer listings usually mean lower sales going forward. Add in higher mortgages rates and the growing buzz around the universal stress test (plus the new tax grab), and it’s hell on wheels for 44,000 local realtors as well as those with deals going south.

Astonishingly, lots of people think they can walk away from a real estate contract before it closes simply because the market sucks and they want out. If social media’s any guide, moisters believe the worst that can happen is losing their deposit (or their mom’s). If vendors squeal, it’s because they’re greedy. Lost on most people is the absolute gravity of an accepted offer to purchase, and the inescapable consequences of trying to weasel out.

Yes, the deposit is gone. But that’s just the start. Following on will be the cost of a litigation lawyer (ten grand to perhaps four times that amount over time), plus the financial penalty of a settlement with the sellers. This can be escaped through bankruptcy, but it’s a failure that can stalk your career for decades. In short, there’s no happy ending in walking away from a firm deal, for either side.

That’s led a lot of regretful purchasers to try and rewrite their deals, asking for longer closings, lower prices or vendor take-back financing at the 11th hour – sometimes on the day the deal’s to be done. Because bankers are appraising low after buyers bid high, some sellers are forced to grant a second mortgage or see the offer crumble into legal wrangling. But extending that kind of financing is dangerous. If the new owner defaults and walks after closing, it’s the lender holding the first mortgage who calls the shots and gets paid. There may be nothing left for anyone else.

Of course, it could be worse. You could live in Houston. Or Seoul. So lighten up.

106 comments ↓

#1 For those about to flop... on 09.03.17 at 8:09 pm

Can someone on here with access to the Mls tell me what this condo originally went for?

I have few on my books that were bought for around the 3 million mark and now a few years later they are trying to cash out and are having problems.
One guy took a 300k loss.

This one is in the River Green complex with 6 buildings and Ora is just around the corner on the next street and I already have 5 CONFIRMED PINK SNOW cases just in one of the three buildings that make up this particular complex alone.
Those cases were in the supposedly affordable range of 550/650k and so it not just the high end ones in trouble.

The other ones have a recorded sale in 2014 and this one might have elapsed due to the assessment site only going back roughly three years.

Speaking of the assessment,this is another one where when a lot of people’s assessment romped ahead by 20/30% last year ,these guy’s assessment actually went backwards same as some of the other cases in this area,albeit only slightly.

30k a year ,just in maintenance fees and taxes alone for a place like this and that is before being fined after Cici,Crowdie,MF ,Sydcixel and Looney Baloney come over for the annual pillow fight that we have to settle some old scores.
Suburban coyote and pup normally shows up afterwards and bakes some pies and then tells everyone to shut their pie-holes and we all go home happy.

Can I put this one on the list or cross it off?

Hopefully these guys got in cheaper and earlier than the guys in trouble ,but I would not be surprised if they are in a similar situation as paying above the going rate seemed like a part of doing business in recent years.

I don’t know a lot of people that would like to live in Richmond, but it seems that there is no shortage to the amount of people that will speculate in Richmond.
If I had to choose between living in Richmond and Surrey ,I guess I would choose Richmond mainly because of its proximity to Vancouver.

I looked to see if there were any 3 million dollar condos in Mississauga and apart from one dreamer that comes close ,it pretty soon drops off to below 800k ,and so apart from being on the other side of the country and all the rest ,these cities seem to have some similarities and so that is how out of control things are here.I don’t know how else to summarize it for you folk out East.

But I tried…

M43BC

A103 5151 Brighouse Way,Richmond.

Mar 8:$3,788,000
Sep 1: $2,980,000
Change: – 808000.00 -21 %

https://www.zolo.ca/richmond-real-estate/5151-brighouse-way/a103

#2 Howard on 09.03.17 at 8:17 pm

“The big news for many families is the epidemic of non-closings now taking place. This is reflective of a market still rapidly decelerating. As of Friday (September 1st) the number of active listings in the GTA hit an all-time low of less than 5,000. In just two months inventory has shrunk by 2,000 properties as sellers give up and withdraw.”

This actually sounds bullish from a contrarian POV. Feels like a dead cat bounce is on the way. Nothing goes down in a straight line.

#3 common sense on 09.03.17 at 8:21 pm

It’s only your honour, $ and having some class right?

Please raise rates Wednesday….

#4 Howard on 09.03.17 at 8:21 pm

Oh and to the gold-haters : as of this post, the yellow metal is sitting at $1340 and has broken a major downward trend line that extended from the 2011 top. I was tempted to sell my IMG shares last week but felt there was more upside given North Korea’s belligerence.

#5 Bytor the Snow Dog on 09.03.17 at 8:25 pm

I will never do the “first” thing.

Ever.

#6 This Week in Money on 09.03.17 at 8:25 pm

Wolf Richter on This Week in Money:
Housing Bubbles US, Vancouver, Toronto

http://www.howestreet.com/2017/09/02/this-week-in-money-120/

#7 Ian on 09.03.17 at 8:26 pm

That’s superb that guy saved those dogs! Great to see.

December gold futures are open, and up to 1341 on Ding Dang Dong’s hydrogen test. Freeroll on the US hitting them.

DEFINITE freeroll on a USD crisis. Sliding down a slope nonstop.

#8 is that right ? on 09.03.17 at 8:29 pm

Sales in the GTA continue to erode (although August was typically quiet), while Victoria and Hamilton see prices start to wither and Vancouver wonders where the move-up buyers went.

https://www.google.ca/url?sa=t&rct=j&q=&esrc=s&source=web&cd=3&cad=rja&uact=8&ved=0ahUKEwjik4zWoorWAhVW2GMKHTShDVkQFghFMAI&url=http%3A%2F%2Fwww.timescolonist.com%2Fbusiness%2Fforecast-home-prices-to-soar-inventory-to-decline-over-3-years-1.18235355&usg=AFQjCNGVU_7-Sb33hntuuYrn91CLinQzVA

#9 T.J.BONES on 09.03.17 at 8:31 pm

Sir Garth:

So good of him!

#10 100 CENT LOONIE, HERE WE COME!!! on 09.03.17 at 8:32 pm

Is Donald Trump in cahoots with the side-cut leader of North Korea?

Notice the similarities with their outrageous hairdo-s, one is an orange hair and the other uses a sidecut.

Mark needs to let us know if the Loonie will reach 90 cents by next week…..Checking the recent ForEx rates, the CAD is currently heading towards 81 cents per American USD$.

#11 Trump on 09.03.17 at 8:34 pm

Last……and still the best.

#12 Keith in Calgary on 09.03.17 at 8:37 pm

Going bankrupt does not “stalk your career for decades”…….all references to it along with past credit reports automatically are purged from your credit bureau in 7 years from the date of discharge. Been there………done that. Stuck it up your old employer’s backside (CRA) back in the 90’s.

Sellers willing to throw $20K plus to sue in Queens Bench when most if not all CMHC insured purchasers cannot scrape together a pot to piss in (which is why they are CMHC insured) or not is plain foolish. I’d have a PI investigate first, even though, chances are your possibility of recovery is slim to none.

#13 Spectacle on 09.03.17 at 8:47 pm

Good follow up blog Sir Turner.

I have a “Shallow State” ( compared to Deep State…) insider perspective into the YVR new condo completion market, 2 out of 5 cancellations in my vantage point. But, they can’t just do that, hmm. Going to get ugly, with some serious negotiation to attempt a close again in each case. Seems like. A new profession arises, because the circumstances are destinctly different, this collapse!

Purple Rain………( Red too)

#14 prairie person on 09.03.17 at 8:50 pm

It’s interesting how we all live in our own little bubbles. Vancouver has just put out a warning about water use. The Gulf Islands are facing the fact that while there may be land to build on, there is no bonanza of water to service them. The West is so dry that we now have a major fire crossing into Canada from the US. A bunch of people haven’t been protected by bodies of water that were supposed to act as barriers. They’ve been ordered out. The snow pack (what snow pack?) is providing less and less water each year. Houses or islands without water are desert isles. Nobody wants to be Robinson Crusoe. Houston may be drowning in water but there is no sign of any of it coming here. People are thrashing around in their own little worlds to the point that they are not looking at what is happening. Drive through Kamloops, drive along the river toward Catlegar. Drive through the Interior (where there aren’t any fires). It’s all irrigation. No irrigation, no crops, no hay, no fruit, no nothing. How long does it take for some place to become a desert? To dry up a lake? Maybe if you are thinking about buying, you should be renting. Let someone else deal with climate change.

#15 conan on 09.03.17 at 8:50 pm

Consequences galore for walking away from a bad RE deal. Yet, the numbers are growing who do so. Truth be told, a second deal can usually be worked out. The purchase is eventually made and the financing gets creative.

Sometimes the seller will move on price, or terms. The alternative is court, and delays, and going crazy. The courts are likely to be backlogged with these broken RE deals.

Stress and anxiety are worth a thousand dollars an hour if they both can be avoided.

#16 joblo on 09.03.17 at 8:52 pm

How is the traffic at #belfountain?

#yuuuge. — Garth

#17 Nick on 09.03.17 at 8:54 pm

Would be interesting to see stats for active listings movements broken down by sales and delistings

I wish inventory was still high, hopefully it picks up in September

#18 Big Bucks on 09.03.17 at 8:54 pm

Down 505 by end of 2019 but still up close to 3 times since 1996 so normal correction really.

#19 Big Bucks on 09.03.17 at 8:55 pm

50% not 505

#20 Todd on 09.03.17 at 9:01 pm

It’s astonishing how quickly talk of real estate in family circles have evaporated into thin air. Kind of like home equity.

#21 AB Boxster on 09.03.17 at 9:01 pm

Garth,

I think you are missing the real issue.

All of these people who bought at the height of the market did so because ‘everyone else was doing it’ and ‘everyone said real estate always goes up’. So it’s really not their fault, right?

And now, that these things may not be true, these people ‘feel really ,really sad’.

So, given the reality today, in the progressive world we live in, where ‘fairness’ and ‘feelings’ trump (Trump?) silly olden day concepts as contracts, and law, and that other legally stuff that the nasty boomers invented, fairness and social justice will overcome all, and silly things such as bankruptcy or lawsuits or lawyering up, will be unnecessary.

You just need to start thinking like the moist ones, and everything will be peachy.

#22 oncebittwiceshy on 09.03.17 at 9:21 pm

#8 is that right ? on 09.03.17 at 8:29 pm

<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<

Yes, it is.

http://www.timescolonist.com/business/after-years-of-rising-values-benchmark-house-prices-cooling-in-victoria-core-1.22369434

#23 Smoking Man on 09.03.17 at 9:21 pm

The art of the deal.

Steve Bannons hate on for China. Trump says usa will kill trade with anyone doing business with NK.

Some thing tells me Kim crazy haircut will bow and kiss the cement of a trump tower or be vaporized by China.

Communism and libralism are clearly mental disorders.

Take the red pill.

#24 Old Ron on 09.03.17 at 9:31 pm

Expect a bump in new listings. My office mostly experienced Pro’s almost matched August 2016 sales with their August 2017 tally, which is encouraging.

The word is that everyone has a listing in their back pocket. So expect a lot of new listings in the next 10 days. Then its up to the buyers. Do they step forward, or do they grab that flight to Cabo.

As I have shared with the “Garth the Wise” privately, we have plateaued on price for a few weeks now, and we might find some support here.

But we will be looking at tighter money going forward, and nothing extinguishes an over heated buyer like a cold bucket of Bank of Canada ice water.

Stay tuned.

#25 Joe2.0 on 09.03.17 at 9:31 pm

If anyone hits the stupid button we’ll be like Seoul, just a slower burn.

#26 Goldie on 09.03.17 at 9:35 pm

Great pic today. That man is a hero to me.

#27 joblo on 09.03.17 at 9:47 pm

How is the traffic at #belfountain?

#yuuuge. — Garth

AWESOME!

#28 2 Cents Canadian on 09.03.17 at 9:52 pm

Accountability and people’s “word” mean very little any more. If you win at RE or in the stock market you’re struttin large, bragging and flicking your cigarettes at people …… if you lose? …. now you’re a victim, how could the gov’t let this happen to me? …. and someone has to pay and make it all better. Ridiculous! You can’t have winners without losers. Everyone can’t win. Even though most have been “winning” for 20+ years in RE. There just shouldn’t be a 13th place ribbon in the grade 6 running race (a great line from Modern Family).
Contracts have to be solid …. people who sign them have to be accountable. Even if pain and costs are occurred. Other wise nothing means anything. And that’s scary. Ignorance can never be a defence. If you win … you get the success and the money …. if you lose you get hammered and you learn …… It has always been that way and it has to get back to being that way. I am still blown away by the guy who wrote here a few weeks ago and tried to get out of his own house sale last December …. because by the time his closing date came in the spring he felt he could re-list it and get another 75-100 grand at peak prices. Thank god his own lawyer slapped him silly and told him the deal is the deal …… kiss the ground you closed.

#29 OKD on 09.03.17 at 9:55 pm

#14 prairie person

“The snow pack (what snow pack?) is providing less and less water each year.”

“How long does it take for some place to become a desert? To dry up a lake?”

Referencing the Okanagan, it’s semi-arid desert – not new. And did you not notice the flooding we experienced in June and July – i.e. a problematic surplus of water? 68m3/s released at Penticton for ~months – do the math on that volume of water and maybe stick to prairie hydrology ;)

#30 Happy Housing Crash Everyone! on 09.03.17 at 9:56 pm

It’s starting. Maxed out on debt and unable to get more credit are now going bankrupt.
http://www.cbc.ca/news/canada/saskatoon/insolvency-oil-producing-provinces-alberta-saskatchewan-nl-1.4273408
Credit drying up will mean more people filing for bankruptcy as the house of cards come crumbling down.

Happy HAPPY Housing Crash Everyone! :-)

#31 Debtslavecreator on 09.03.17 at 9:57 pm

Poloz will probably raise this week but that’s it. The CAD can easily reach .83-.85 but it is likely to rollover in Oct-nov if not at the end of sept
The BofC will start talking dovish by early 18 and drop rates by March -April
Once he’s at 0 by Q3 he will start Beaver QE in Q4 18
By then your loonie will have dived to under .60
And unemployment will be surging
Their luck has run out
The data improvement we’ve seen in the last 6-9 month is exactly what’s to be expected during the late stages of an historic, parabolic debt bubble. Most who buy homes spend a lot in the 3-6 months after closing
This is false prosperity and if can last maybe 2-3 months longer but by early 18 the data will be in free fall the likes of which our nation has never seen
Sorry I’m not a doomed and am very aware of confirmation bias but underneath the hood it looks UGLY
I hope I’m wrong
The brazen small business tax action and the same property tax surge on businesses on Yonge street are but a modest and early sign of what’s coming over the next 4-5 years
No amount of tax will help these people -the system is insolvent just temporarily liquid
The rules will be changed suddenly and plans will be thrown into disarray
When the real fiscal emergency comes they will have emergency meetings and get real aggressive
They will simply take whatever they want. There is no rule of law when it comes to property in Canada in the midst of a fiscal crisis
Question your assumptions d
Best of luck to all

#32 NoName on 09.03.17 at 10:07 pm

#10 100 CENT LOONIE, HERE WE COME!!! on 09.03.17 at 8:32 pm
Is Donald Trump in cahoots with the side-cut leader of North Korea?

Notice the similarities with their outrageous hairdo-s, one is an orange hair and the other uses a sidecut.

Mark needs to let us know if the Loonie will reach 90 cents by next week…..Checking the recent ForEx rates, the CAD is currently heading towards 81 cents per American USD$.


funy thing that you mention that, there is meme on internet going that KJU is treading forex so he does kabooms on weekends. so to humor me, ( was secretly hoping that is true) i went back and cheked NOT, weekend part, couple of tests mon, tue and wed and last one on sun.

#33 Happy Housing Crash Everyone! on 09.03.17 at 10:07 pm

RE in GTA is and was always a house of cards based on Fraudulent mortgages , realtor lies and speculators gambling. Where did everyone go? where is all the demand? What happened you dirty lying shyster scum? How many speculating dirty shyster realtors walked away from signed deals? we already know about one who did. What did warren buffett say about cockroaches?https://www.cnbc.com/2017/08/30/warren-buffett-on-wells-fargo-theres-never-just-one-cockroach-in-the-kitchen.html.

In this case there never is just one cockroach trying to back out of a signed deal. You dirty shysters are liars who don’t even believe their own lies.

#34 Ian on 09.03.17 at 10:20 pm

#24 Old Ron

That is super interesting. I’ve been wondering whether listings would explode in September. Watching Zolo for GTA recently and inventory rolling over and down, but I put that down to summer / temporary pause / people pulling their listings and relisting in fall. Never for a second thought it was bullish.

Will be fascinating to hear your updates in the next three weeks Ron!

#35 Spiltbongwater on 09.03.17 at 10:34 pm

Garth, you spelled Jong Un wrong.

#36 Smoking Man on 09.03.17 at 10:37 pm

My kid before he married a Lisbo.
Dream killer is what I was thinking.

https://youtu.be/R3iX0SUQpPg

She’s gone and he’s making tunes again.
Nnothing else matters.

He’s such a kind idiot, he’s keeping her on his benifts package to treat her MS.

#37 FahtCoot on 09.03.17 at 10:39 pm

I imagine listings will go up in Sept and sales will pick up a little bit as well but it will probably just end up being a bull trap. We’ve been conditioned to buy the dip but unfortunately the people who have bought in the past year are in for a world of hurt…

#38 45north on 09.03.17 at 10:43 pm

Debt Slave Creator: This is false prosperity and it can last maybe 2-3 months longer but by early 2018 the data will be in free fall the likes of which our nation has never seen

it adds up – record debt, house prices decoupled from income. Up to now the consequences have been hidden.

On Tuesday real estate boards grudgingly publish the dismal data on August agony.

they’ll say “the summer was a little slow but with all the rain people just didn’t get out”.

I’m thinking in September the lid comes off.

#39 Smoking Man on 09.03.17 at 10:49 pm

What I dream about.
https://youtu.be/Za9YMxLKH-A

#40 Trudeau's tweet? on 09.03.17 at 10:50 pm

The DACA program is ending in the US, is said to be a done deal.

Will Trudeau tweet to open the door in Canada for the nearly 800,000 people, affected?

Will this reverse the RE crash?

#41 AM in MN on 09.03.17 at 10:57 pm

First time poster, great site.

A few thoughts of mine.

Grew up in Burnaby, have lived in Pittsbutgh, New Hampshire, DC (the VA side…I’m conservative) and now Minneapolis. Self employed designing, selling electrical power systems. Open markets here have led to the lowest power prices in the world…good for industrial users.

Just made a trip out to DC to get a trailer full of the rest of my stuff, after spending a fair bit of the winter in Vancouver.

On the way, I passed 1000 miles of green farm fields with tall plants. A help wanted sign at EVERY restaurant, hotel, gas station along the way. Wages will go up soon, but most industries have problems finding male employees who can pass the drug screen for OSHA & Insurance. In Vancouver, everyone I know who is doing well is employed in the condo construction or selling business, no drug screens or they’d be hurting too!

MN has the lowest cost of living for middle/lower middle people I’ve found…housing, vehicle costs, food costs, air travel (for business) etc. Considerations if you want to set up a business!

My guess is the US will pull ahead in the next 5-10 years, but it’s all about the Chinese real estate investor. Easier to get dirty money into Canada, and they like Van & TO. Killing the industrial base in W. Canada will take 10 years to recover from….it takes a long time to ramp up these businesses. People won’t notice until it’s too late.

I know people who say they have a 5yr backlog of condo work in Gr. Vancouver, we’ll see. If not, get ready for a 50% correction (in US$ terms). No quick fixes if the Chinese money dries up and the country needs to get back to producing something real and selling it abroad.

If the BoC let’s the C$ go near US$0.65…get ready for a brain and skills drain south, and the govt. will get fed one way or the other out of real estate…which is captive, and you still owe the mortgage!

I know a few people who’ve made out like bandits in BTC & other crypto’s…which will probably go higher as people seek protection and realize that real estate isn’t it.

Just my two cents worth…

#42 Smoking Man on 09.03.17 at 11:03 pm

DM carpet burns on my head. Cancer carved out of my nose. You got it wrong bro . Trying to help you.

https://youtu.be/9SKFwtgUJHs

#43 Chaddywack on 09.03.17 at 11:24 pm

True lower listings usually mean less sales, but in Vancouver in means increased prices as the few greater fools left chase the inventory remaining.

It also causes the selling prices to be higher consequently raising everyone’s expectations.

Seems like on the westside now houses are just sitting, being re-listed and sellers are basically refusing to budge on price. Obviously there’s no urgency to sell…..yet.

#44 Smoking Man on 09.03.17 at 11:28 pm

Too he wife.

https://youtu.be/EYyarcp5LtU

#45 Tony on 09.03.17 at 11:30 pm

Re: #31 Debtslavecreator on 09.03.17 at 9:57 pm

That sounds right to me and commodity prices should fall sharply in 2018 (still in a long term bear market) putting more pressure on the Canadian economy and the Bank of Canada rate will probably be zero before the end of next year.

#46 Andrew Woburn on 09.03.17 at 11:31 pm

“Jared Kushner, Donald Trump’s son-in-law and top adviser, wakes up each morning to a growing problem that will not go away. His family’s real estate business, Kushner Cos., owes hundreds of millions of dollars on a 41-story office building on Fifth Avenue. It has failed to secure foreign investors, despite an extensive search, and its resources are more limited than generally understood. As a result, the company faces significant challenges.

Over the past two years, executives and family members have sought substantial overseas investment from previously undisclosed places: South Korea’s sovereign-wealth fund, France’s richest man, Israeli banks and insurance companies, and exploratory talks with a Saudi developer, according to former and current executives. These were in addition to previously reported attempts to raise money in China and Qatar.”

Only the lying liberal media would see any potential conflict of interest here. FAKE NEWS. SAD.

https://www.bloomberg.com/graphics/2017-kushners-china-deal-flop-was-part-of-much-bigger-hunt-for-cash/

#47 Andrew Woburn on 09.03.17 at 11:42 pm

I believe in the future of electric vehicles, especially in places with poor air quality, but this Financial Times article is an interesting reality check on how fast conversion to EV’s can happen.

https://ftalphaville.ft.com/2017/08/03/2192188/electric-vehicle-realities/

#48 Algonquin Settler on 09.03.17 at 11:48 pm

Garth, you can add another kaboom. It looks like Trump will be announcing the end of DACA (Obama’s Dreamers). 800,000 undocumented Dreamers. I wonder how many heated Trudeau trailers they will require while we fail to defend our border?

http://www.politico.com/story/2017/09/03/trump-dreamers-immigration-daca-immigrants-242301

#49 NoName on 09.03.17 at 11:53 pm

#40 AM in MN on 09.03.17 at 10:57 pm

“I know a few people who’ve made out like bandits in BTC & other crypto’s…which will probably go higher as people seek protection”

—-

i buy speculative investing part of block chain currency, but protection, not… Cash is a KING

https://motherboard.vice.com/en_us/article/paax7z/this-twitter-bot-tracks-neo-nazi-bitcoin-transactions?utm_source=mbtwitter

#50 40 something family man on 09.04.17 at 12:32 am

#4
#49

Probably a good idea to seek a little protection, in my case 25% gold and 15% cash, rest in smartly run hedge funds and a recent 22% strategic allocation to energy co’s – a little early on energy, down 20% on these positions on avg :( but it will come back big

Good luck to all you folks out there, Asset price deflation is something no one is really watching.. It will be sudden when you least expect it and it will be spectacular..

#51 jay#2 on 09.04.17 at 12:39 am

DELETED

#52 HDJ on 09.04.17 at 12:47 am

“….. and the US Congress might pass a tax relief bill that ignites the stock market.” Garth

Won’t that be wonderful! By reducing the taxes paid by wealthy Americans (paid for by reducing government programs that help the 99%), wealth will be transferred from the lower and middle classes to those already at the top. However, don’t worry. Some of this money may trickle down to those who really need it, but I gather that sort of thing has never happened in the past. And in addition, (hallelujah!) this will be good for the beloved stock market. The tax relief bill (what a misnomer!) will only provide relief for the wealthy, who greedily lust for it, but certainly don’t need it. Republicans philosophically believe those in the lower and middle classes of society should essentially look after themselves, without help from the government. That’s why this proposal will take funding from government institutions like medicare and use the money to line the pockets of wealthy Republican politicians and their conservative supporters. Heaven help all those average Americans who voted for Trump because they thought he was on their side – big mistake. Trump and the Republican Party are corrupt and immoral. I take no consolation from the fact that their unethical tax relief program may ignite the stock market and increase the value of my modest investments.

#53 HowDeepThePain? on 09.04.17 at 12:48 am

I’ve had the painful experience for shopping for new shelter in the northern GTA over the last few months. I prefer to rent, I’m perplexed how a 25 year old ugly common subdivision home in Vaughan (that needs a 150K in updates) goes for at least 1M.

The realtor pitch is strong…”values are going to keep going up, immigrants keep coming with bags of money, you’re basically living for free…if your income is that, why are you renting?” I now totally get how people get sucked in, god forbid if your wife is with you…

I think these realtors really believe their own fluff, makes me wonder how many have more than one property. What happens when 40,000 of them in the GTA make a fraction of previous years? Can they keep carrying their spec property through higher interest rates and shudder…a new means test?

#54 Smartalox on 09.04.17 at 12:49 am

I know of three sets of move-up buyers in the Vancouver area.

First: couple with two kids under 4. He’s on a stipend as a result of an insurance settlement resulting childhood brain injury, can’t work and doesn’t drive. His wife, doesn’t work either, but when she did, it was very minimum wage, and doesn’t drive either. They’ve bought a house in south surrey in July, with proceeds from the sale of his mom’s condo (her retirement funds). They have yet to sell their 2-bedroom, West side Vancouver co-op, on leased land; they aim to close in October.

Couple number 2, two kids under 4. He’s a BC Healthcare IT tech, thrilled to be earning 80k per year. She’s just gone back to work after extended ‘Mat Leave’ and treatment for post-partum depression. Have a townhouse in Burnaby, bought with an inheritance,but then a special assessment and a fat HELOC to support some pretty expensive hobbies came along. They bought a detached in August in Coquitlam, needed a ‘gift letter’ from his parents to appease the bank. Haven’t sold the townhouse yet.

Both couples take lavish annual vacations, (Hawaii, Mexico, Cruises) paid for by their respective parents.

My point is this: not only can the the move up buyers of Greater Vancouver barely afford to buy, they also haven’t tried (yet) to sell. One couple seemed conscious of the coming universal stress test, getting in ahead of it was a key motivation to buy. They did not recognize that it might also affect their ability to sell (i.e.: to find a buyer for their current place). They asked if we were interested, but I just don’t want to give them that much money.

Caught in the first wave, they’ll probably be okay: in each case, they’ve got more than 20% down, and buying ahead of the universal stress tests. Any deficits will be translated into a couple of extra percentage points, and tighter HELOC funding for the next 25 years.

But they’re just getting in under the wire. Those same moves a month or two later, after a couple of rate hikes, and a universal stress test? There’s no way they’d be able to make it happen.

#55 Pete from St. Cesaire on 09.04.17 at 1:00 am

Debtslave “When the real fiscal emergency comes they will have emergency meetings and get real aggressive
They will simply take whatever they want. There is no rule of law when it comes to property in Canada in the midst of a fiscal crisis”
———————————————————-
It wouldn’t matter if we had constitutionaly protected property rights; no British or commonwealth government (or any other most likely) would ever hesitate to simply grant themselves permission to do whatever they wish. That’s what makes them illegitimate; their belief that they can enact any legislation they desire (including stuff that would make the Nazi’s or Genghis Khan cringe) and it’s all LEGAL and enforced by a system which reaches all the way up to the Royal household while excluding the ‘peasants’ from having any say whatsoever.

#56 HowDeepThePain? on 09.04.17 at 1:05 am

And another thing…I would love to see a deep analysis of the GTA new build market…

How many people have speculated with multiple new builds? If you truly believe that Real Estate only goes up, how many signed up for a 2017 release and 2019 release? Sell 2017 in 2019 to pay for 2019 both have gone up 10-20% per year right? Is there any financial analysis when they first sign up and put their deposit down?

Lots of properties for sale in King City and Nobleton new build areas. Who sells so quickly but speculators? 1.5M to 3M will get you one of these on resale…hopefully they were purchased for 50% less.

New builds going up in Kleinburg, get in now! Starting in the mid-2M! It can only go up right?

#57 Leo Trollstoy on 09.04.17 at 2:01 am

Donald Trump getting exactly what he planned!

https://seekingalpha.com/article/4062186-trump-says-dollar-getting-strong-wants-interest-rates-stay-low

#58 FLHTK on 09.04.17 at 4:48 am

If the loonies goes to par with the American green back in not making the same mistake as last time I’m going to the states to get me one of them new 2018 Harley Fat boys!!!
And the rates are definitely going up on Wednesday no doubt about it.

#59 Dolce Vita on 09.04.17 at 5:08 am

#24 Old Ron

It’s good to read that your firm is doing well (and valued Blog Dog).

But from Listing.ca for Toronto, you look at Detached Aug. 2017 unit sales and they are half of what they have since 2011 to 2016.

That cannot be good.

Detached average selling prices continue to drop, Aug. 2017 down by another -6%, -$57.5 K.

Not even the selling price erosion in 2008 to 2010 comes close to matching what has happened in Toronto since its April 2017 peak.

Just from the actual numbers, it may well be a long Winter in Toronto for Realtors and RE until the peak April-May selling season begins in 2018.

Who knows, maybe something excellent will turn things around for Sept. of this year but from the numbers, it does not look that way; regardless, hope you do well.

#60 Steve French on 09.04.17 at 5:13 am

Hate to say it on this anti-bullion licker blog… but since my last rebalancing in May, my gold miner ETF is the star performer in my portfolio.

Just a 5% weighting. But I’m up 10% on that holding.

Imagine what a small nuclear war could do for my bullion miner hoard?

Gooooo long K-Jong!

#61 Dolce Vita on 09.04.17 at 5:38 am

#31 Debtslavecreator

It will depend on the rate sensitivity of debtors in Canada.

33% of households have no debt.

12% of families have debts greater than 250% of disposable income which, according to Gaultieri of BMO:

“With little cushion in the event of job losses or higher borrowing costs, this group of heavily indebted households is at elevated risk of default and reduced spending” and that, from March 2015…it has gotten worse since then.

I’m also reading on Twitter from an Insolvency Trustee in the Vancouver area the phrase “extend and pretend” with almost all agreeing with him, including a local Realtor.

You may well have called what will happen long before the fact. Thank you for your Comment, chilling, but truthful.

To be honest and even though recent GDP and Job numbers are against us, my gut tells me you are not far off the mark from what is to come. I think it will be catastrophic as well and in short order as you describe.

Hope we are both wrong. A lot of people will be hurt, otherwise.

I recall the devastation to families in early 80s Calgary, a decade of financial distress followed. You would not want to wish that on anybody.

#62 Foggy on 09.04.17 at 7:58 am

1. If social media’s any guide, moisters believe the worst that can happen is losing their deposit (or their mom’s).

–> That’s not hard for them to do. They didn’t work for it, it’s not earned, it’s not saved. There’s no skin in the game, no pain when they walk away.

2. Lost on most people is the absolute gravity of an accepted offer to purchase, and the inescapable consequences of trying to weasel out.

–> WHAT? I thought all these guys were financial geniuses? Property investment guru’s!?! How can they not know this stuff!?! Didn’t their relator educate them! ;-)

3. This can be escaped through bankruptcy, but it’s a failure that can stalk your career for decades.

–> They walk away from a deal losing money they didn’t have/earn, then it won’t matter. By the time they actually SAVE enough money to put down, enough years will have passed that the bank will be more than happy to lend them the money.

Bottom line, clueless/reckless/greedy/uneducated people made poor decisions and because of this, there will be high stress/anger/depression. It could have all been avoided.

#63 westcdn on 09.04.17 at 8:43 am

Sometime I think this quote I found in an article explains how the oligarchs and their minions want financial world to operate.
“Gump! What’s your sole purpose in this army?” screamed Drill Sergeant. “To do whatever you tell me, drill sergeant!” shouted Forrest.
“Goddamn it Gump! You’re a goddamn genius!” declared Drill Sergeant. “When I cut interest rates, print money, and tell you to buy assets, what do you do Gump?” asked Sergeant.
“I buy assets!” answered Forrest.
“This is the most outstanding answer I have ever heard. You must have a goddamn I.Q. of 160. You are goddamn gifted, Private Gump.” Forrest saluted.

Blockchain technology and its main app, cryptocurrencies has me fascinated. I probably will buy some just to see how cryptocurrencies work. I just opened a Wallet on my desktop because I am not confident about having one on my tablet. I will try to stay away from cryptocurrency exchanges.

The concept
https://www.youtube.com/watch?v=l9jOJk30eQs

I have been listening to advocates to better understand the issues around blockchain. This Ted Talk is interesting. https://www.youtube.com/watch?v=WnEYakUxsHU

My main concerns are that you be blocked from the internet and the technology is disruptive. There are very powerful vested interests in maintaining the status quo.

#64 Stone on 09.04.17 at 8:55 am

#62 Foggy

Bottom line, clueless/reckless/greedy/uneducated people made poor decisions and because of this, there will be high stress/anger/depression. It could have all been avoided.

—————————

Agreed. I’ll just stand on the sidelines and watch, thank you very much.

#65 Oft deleted much maligned stock.picker on 09.04.17 at 9:26 am

Watching my Bloomberg and WOW….Norwegian Soveriegn Fund saya it’s dumping bonds and Emerging Markets to invest primarily in …….get ready balancers…..STOCKS!

It looks like the smart money has been reading about huge gains from Stock Pickers. I haven’t received an invitation …..yet…..but I expect the next big thing is likely Maple……because were cheap and removed from the high risk and totally bogus EU markets or overvalued Us markets. They have a trillion to spend…..it sure ain’t going to FANG, BRICS or Red Communism……visionary buy signal for Canada’s next step up.

We’ve seen periods in the past where real estate and bonds crashed while equities soared….this may be another.

#66 gfd on 09.04.17 at 9:29 am

GE – Peterborough and related aches and cries.
http://socialistproject.ca/bullet/1477.php

#67 that guy saved those dogs! on 09.04.17 at 10:05 am

#7 Ian on 09.03.17 at 8:26 pm

That’s superb that guy saved those dogs! Great to see.

Guy looks like the stereotypical “deplorable”, though.

#68 oncebitten on 09.04.17 at 10:14 am

reply to #14 Prairie Person

regarding climate change and irrigation…

Did a road trip through BC and the Rockies this summer and made a stop at the Columbia Icefields. There are markers along the trail up to the icefields that show where they were since the late 1800’s, and walking along that trail you really get a sense of how far they’ve receded.

From Wikipedia “The Athabasca River and the North Saskatchewan River originate in the Columbia Icefield, as do tributary headwaters of the Columbia River.[10] As the icefield is atop a triple Continental Divide these waters flow ultimately north to the Arctic Ocean, east to Hudson Bay (and thence to the North Atlantic Ocean), and south and west to the Pacific Ocean.[11]”

That’s a lot of water!

#69 MF on 09.04.17 at 10:26 am

#62 Foggy on 09.04.17 at 7:58 am

Man I hate being the devils advocate here now but I disagree with some of your points:

-Every moister friend I know that used their parents money to buy in the market did it because they couldn’t afford the down payment without it, and they have no plan to move even if the value goes down because they bought for shelter/raise a family.

The sad things is, from my group of friends, those that used parents money to buy in the market are already on their third home and have more equity/bigger down payments/smaller mortgages.

-No. It wasn’t just reckless/greedy people like speculators that caused this. They are a huge group yes (and they include realtors, brokers, etc.) but a lot of people who just wanted a home to raise a family are caught in this mess.

The majority of blame is on the BofC and CMHC. The market just reacted to their 100% failed policies. The value of money was distorted beyond recognition. Funny watching them try to “normalize” when the whole world knows they waited too long and now there is a debt/asset bubble.

MF

#70 Dissident on 09.04.17 at 10:52 am

#69 MF on 09.04.17 at 10:26 am

I agree. Its a mix of speculators AND people who just want a roof over their heads that will fit a family of four, a cat, a basement for all the junk, and not make them have to commute for 90 minutes to get to work every damn day, whilst juggling family responsibilities.

If I were to buy in the fall, it would be my third home purchase. I’m def in the moister category. And I’ve made a profit on every small step upwards, and would expect to do that again. That’s the only way to play this game.

The first purchase was a pre-construction condo purchased way back in 2007 before I was even living on my own or thinking of being a homeowner (thanks mom and dad), and yes, I did get help from the bank of mom and dad for the initial down payment.

If I bought now, it would be a house to own for at least 5 to 10 or more years. The question is, should I buy now, or wait a few more months for all the prices to slide. Who knows if we’ll even qualify by then.

#71 Stone on 09.04.17 at 11:08 am

#69 MF

So, I imagine you subscribe to the herd mentality? The BoC and CMHC made me buy real estate at a time where it made no sense. Come, come now. There’s something called accountability and consequences. The sheeple now need to reap what they sowed.

Having shelter/place to raise a family does not mean having to buy overpriced real estate. Renting fits the bill as well. I’ll call it what it is – GREED! I’m sure shelter played a small part in it but lets not be naive.

It’s easy to blame a faceless entity for individuals making poor decisions. Isn’t it strange I didn’t fall for it? How many others didn’t fall for it? Hmmm….

Accountabilty. Consequences. Powerful words yet many can’t seem to apply them to their decision making.

#72 Gravy Train on 09.04.17 at 11:15 am

There are only eighteen days left to use the word serotinal.

#73 NoName on 09.04.17 at 11:20 am

#65 Oft deleted much maligned stock.picker on 09.04.17 at 9:26 am

norvegan sov. fund

That was news two and a half weeks ago. Give us good stuff.

#74 DON on 09.04.17 at 11:23 am

#67 that guy saved those dogs! on 09.04.17 at 10:05 am

#7 Ian on 09.03.17 at 8:26 pm

That’s superb that guy saved those dogs! Great to see.

Guy looks like the stereotypical “deplorable”, though.
******************
WTF – The guy has substance and you think he looks like a deplorable. Poor Form!

#75 maxx on 09.04.17 at 11:26 am

“…..sellers give up and withdraw.”

Let’s see how far those sellers withdraw as the value of cash goes up………….and the lifetime left to use it melts away in lockstep with the “value” of their re “holdings”.

#76 DON on 09.04.17 at 11:27 am

@Smartalox

“But they’re just getting in under the wire. Those same moves a month or two later, after a couple of rate hikes, and a universal stress test? There’s no way they’d be able to make it happen.”

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

They must be lucky…that is buying one of the last remaining tickets on the housing Titantic. Yikes!

#77 crossbordershopper on 09.04.17 at 11:36 am

what ever happened to labour day ? I find that the whole computer industry has created 21century slaves. It was bad enough 100 years ago working in the sweat shops for 12 hour days, now its contract work. Our union people have let us down.
i am independent so i never have been in a union, but i respect their position, stories when i was a kid from my dad and grandad about the boss, working in the 40’s and 50’s was no picnic.
there were parades and parties and the day to understand and reflect about our value of labour, and our position in society.
as a kid there was a great parade, i dont know what happened to them all.
i am sad for the kids of today, the unions, and everyone else. yes its a holiday, might as well change it to end of summer and start of school day. or something. means nothing.
i miss my youth, and how society was then, very sad.

#78 DON on 09.04.17 at 11:54 am

I spoke to a close family member the other day. (Younger sibling). Chatted for a while and then the conversation turned real estate (not by me – I stay away from that subject now). My sibling is not over extended so that is good – he was going for a secured LOE and got it this year (he needed 10K – they said he could have up to 80K). His comment: ” are they nuts – two years ago they wouldn’t give me 5K”)

The comment was made that real estate is a no brainer “as real estate truly rises forever” (his wife’s mother is a realtor). “Look at the last 10-15 years” he said. 15 Years ago sibling was 20. That is all he knows. I got the feeling he was ‘fishing’ and wanted to know my opinion. I said be careful things can change fast. He went back to the equity his in-laws have…clearly a no brainer. I slowly changed the conversation and brought it back to rising rates (which he is aware of) and the heloc…suggested he not to over do it. He agreed! What else could I do – tell the cold hard truth. The kid is smart …the fact that he was testing the waters with me, tells me word is getting around, people are taking notice and feeling a little insecure these days. Thankfully he bought a foreclosure at a good price…so I didn’t feel the need to worry him further. Some will be ok, some will be alright and others will drag the whole house of cards down – affecting the rest of us to varying degrees.

He is the 3rd person to contact me – news is starting to travel. All believe that present conditions will persist AND if shit does go down they will simply sell. Somehow they think they will be tons of buyers when the shit hits the fan.

#79 Dolce Vita on 09.04.17 at 11:57 am

#69 MF
#70 Dissident

I wish you all well. But I will tell you this:

What you write reads exactly like pre-RE crash early 80s Calgary, word for word.

We ignored the signs, smug that our incremental gains after each property purchase and subsequent move-up purchase would continue without end.

They did not.

The gains became large losses.

Hopefully, you have little or no debt, if not, heaven help you for it will take you a decade to recover financially.

#80 SoggyShorts on 09.04.17 at 11:59 am

#54 Smartalox on 09.04.17 at 12:49 am
I know of three sets of move-up buyers in the Vancouver area.

First: couple with two kids under 4. He’s on a stipend as a result of an insurance settlement resulting childhood brain injury, can’t work and doesn’t drive. His wife, doesn’t work either, but when she did, it was very minimum wage, and doesn’t drive either. They’ve bought a house in south surrey in July, with proceeds from the sale of his mom’s condo (her retirement funds). They have yet to sell their 2-bedroom, West side Vancouver co-op, on leased land; they aim to close in October.
*****************************************
Why don’t people move anymore?
Assuming the condo that mom sold was in vancouver, and neither of them plan to work again, why not take that cash-out, and sell their other place to buy a home in a place where they cost 80% less and live like kings?

#81 DON on 09.04.17 at 12:16 pm

#71 Stone on 09.04.17 at 11:08 am

#69 MF

So, I imagine you subscribe to the herd mentality? The BoC and CMHC made me buy real estate at a time where it made no sense. Come, come now. There’s something called accountability and consequences. The sheeple now need to reap what they sowed.

Having shelter/place to raise a family does not mean having to buy overpriced real estate. Renting fits the bill as well. I’ll call it what it is – GREED! I’m sure shelter played a small part in it but lets not be naive.

It’s easy to blame a faceless entity for individuals making poor decisions. Isn’t it strange I didn’t fall for it? How many others didn’t fall for it? Hmmm….

Accountabilty. Consequences. Powerful words yet many can’t seem to apply them to their decision making.
********************

@MF

Your friends can think all they want…but not having experienced true downturn is clouding their vision of the future. How long have your friends been financially aware? They are regurgitating headline news (and what their real estate horny parent’s/friends are saying. In real estate you only win if you cash in. A 20-30 year mortgage is a long time and most young people have yet to live that long as aware adults with life experience. Garth speaks about recency bias for a reason. Life can change faster than you think!

#82 T on 09.04.17 at 12:41 pm

#71 Stone on 09.04.17 at 11:08 am

Exactly.

I’m tired of the whining coming out of our generation.

Social media (aka social advertising) has a huge part to play in the millennial mentality. Some of us rise above it, most don’t.

#83 DON on 09.04.17 at 12:45 pm

An uptick in listings for the last 4 days (September) on Zolo Victoria.

Zolo Nanaimo – Houses sitting since last year have been relisted to lower the amount of days on the market.

#84 Old Bird on 09.04.17 at 12:48 pm

@Flop #1

$2,980,000

#85 Wrk.dover on 09.04.17 at 12:56 pm

SMOKING MAN:

They played House Of The Rising Sun on the radio yesterday. Why is that not your theme song?

#86 Dale Frye on 09.04.17 at 1:08 pm

We have no idea about investing, stocks, bonds, mutual funds, ETF’s, REIT’s, real estate etc. and other things about money I have seen and heard about in the media, websites, radio etc.

We are not the typical Canadian in debt and putting most of their money in real estate, homes, condo etc.

The only thing we do and and have been steady doing this for decades is saving a high percentage of our income and maximizing RRSP’s, RESP’s and TFSA’s since day one, 2009.

We are saving about $7,000 a month and is all going to GIC’s, not making alot, 2.6% to 3% on our GIC’s and have big protection on long term care, life, auto, disability, health, medical insurance polices.

We rent a modest home and never owned a home or condo etc.

The good thing is we have $2.4 million now and eventually have about $5 million in a couple more decades.

#87 Andrewt on 09.04.17 at 1:51 pm

#48 Algonquin Settler on 09.03.17 at 11:48 pm
Garth, you can add another kaboom. It looks like Trump will be announcing the end of DACA (Obama’s Dreamers). 800,000 undocumented Dreamers. I wonder how many heated Trudeau trailers they will require while we fail to defend our border?

http://www.politico.com/story/2017/09/03/trump-dreamers-immigration-daca-immigrants-242301

Your friendly neighbourhood realtor would see that as 800,000 mortgage originations. The promised land awaits at Burnhamthorpe & Mavis Rd.

#88 For those about to flop... on 09.04.17 at 1:53 pm

Old Bird 17 at 12:48 pm
@Flop #1

$2,980,000

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

Thanks Old Bird,and so my suspicions were correct.

Just like the other cases I have in that area they bought for around the 3 million mark and all tried to get close to 4 and are now left holding the bag.

One guy bailed and took the hit and now is the most recent comp for all the rest.

Unless something dramatic happens these guys will be lucky to get out with less than a 150k due to expenses.

I was going to do more research into this area in the winter, but there are 12 other listings for sale in the same complex that I am going to stop playing axe darts with Ross Kay and look into them right now.

Put down the axe Ross,it is interfering with the wifi.

I could be asking you for help later on ,but I want to thank you again for helping me in trying to assist in the freedom of information that should be readily available to the general public.

I don’t think you are old by the way ,just well seasoned…

M43BC

#89 Victor V on 09.04.17 at 2:03 pm

http://www.bnn.ca/how-canadian-consumers-could-go-from-growth-leaders-to-recession-drivers-1.845000

But the Canadian appetite for borrowing will be tested by three events that will “cause the credit cycle to either shift in reverse or take a pause,” said David Rosenberg, chief economist and strategist at Gluskin Sheff + Associates.

“One is the fact that the Bank of Canada is raising rates,” Rosenberg told BNN in an email.
Indeed, the bank’s next opportunity is on Wednesday, and the strong GDP report is putting a hike on the table despite the lack of a monetary policy report or news conference attached to the rate announcement.

Second, falling home prices in the Greater Toronto Area will “cause the banks to become more cautious on mortgage originations,” further testing borrowers, according to Rosenberg.
And, third, looming accounting rules forcing lenders to bolster reserves will lead to a “more stringent credit environment.”

While Canadians have been hectored about their debt by policymakers for years, the actual policy environment has been very friendly to borrowers.

“If policymakers want to force things, it would obviously take higher interest rates and/or stricter regulatory lending standards to slow the growth rate of household debt,” David Madani, senior Canada economist at Capital Economics, told BNN by email.

Policymakers, however, need to tread carefully.

“With household debt at extremely dangerous highs, any tightening in household credit conditions runs the risk of causing a recession,” said Madani.

#90 NEVER GIVE UP on 09.04.17 at 2:07 pm

For a good laugh, its time to watch this again!

https://www.youtube.com/watch?v=wcAMtvNfp78

#91 oopswediditagain on 09.04.17 at 2:09 pm

Dissident: “The question is, should I buy now, or wait a few more months for all the prices to slide. Who knows if we’ll even qualify by then.”

Let’s put the price slide into context. The biggest crash in housing, in B.C. came in the early 80’s. Mortgage rates went from 13 – 15% up to 18 – 21%. It was a market killer.

The average sized mortgage in the lower mainland, back in the 80’s might have been $60,000. Yes, a jump from 15% to 21% was a market killer but when you take a jumbo mortgage at 2.5% and move it to 4.84% you have effectively met a similar bar.

https://www.cibc.com/ca/mortgages/calculator/mortgage-payment.html

Mortgages payments go up by 27% on a simple 2.4% move. Hmmmm that’s exactly the Bank of Canada qualifying rate. Hopefully, nobody took those 1.9% teaser rates. A lot of people had better be praying that OSFI regs don’t include renewals.

I really don’t think you will be looking for another property when this unwinds.

#92 AGuyInVancouver on 09.04.17 at 2:19 pm

#1 For those about to flop…
$3.788 mil for a condo in…Richmond?! That’s insanity, if you wanted a cautionary tale on Richmond’s future look to what just happened to Houston. It’s amzing that a cohort will go for anything in a flat, below sea level, prone to earthquake liquefaction suburb simply because it sounds like “rich man”.

#93 For those about to flop... on 09.04.17 at 2:37 pm

And so I poked around that development,not much to report as with a lot of the dealings in Vancouver at the moment, it is all about the waiting game.

Seen some of the usual stuff,condos bought on the same day for the same dollar amount and also some of them listed to sell on the same day.

Tracked some of these cases before and so like some of you guys have talked about,they might only take 20/30 hit but some of these people will take the hit multiple times.

There were a few bought in the mid 800s that are trying to get a 30% payday but there is a lot of fresher stuff on the market and so they will struggle.

But as I reported yesterday even the ones in the 800s had their assessments rolled back which for last year was an anomaly from what I have seen.

Old Bird ,I would appreciate it if you would do two more.

1202 5111 Brighouse Way,Richmond.

701 5151 Brighouse Way,Richmond

These two are the next size down and so possibly not quite as bad.

The fascination still seems to be with the virgin wool.

People want to by the pre-sale for their chance to fleece someone and don’t consider themselves to be the sheep…

M43BC

#94 that guy saved those dogs! on 09.04.17 at 2:43 pm

#74 DON on 09.04.17 at 11:23 am

#67 that guy saved those dogs! on 09.04.17 at 10:05 am

#7 Ian on 09.03.17 at 8:26 pm

That’s superb that guy saved those dogs! Great to see.

Guy looks like the stereotypical “deplorable”, though.
******************
WTF – The guy has substance and you think he looks like a deplorable. Poor Form!

—-

You should never let your sarcasm detector run out of power.

#95 Deplorable Dude on 09.04.17 at 3:13 pm

#67 That Guy saved the dogs…..”Guy looks like the stereotypical “deplorable”, though.”

Yep…that’s some ‘toxic masculinity’ right there on display for all to see…..probably owns an AR15 rifle, plus jacked truck.

Just your average working class hero…..trying to make a living and support a family…..who’s been abandoned and vilified by the left/feminists/democrats…..

#96 Mark on 09.04.17 at 3:30 pm

““With household debt at extremely dangerous highs, any tightening in household credit conditions runs the risk of causing a recession,” said Madani.”

I really like the analysis put forth by this guy, James Thorne, in a brief 15 minute audio:

http://caldwellinvestment.ca/james-thorne-audio/bank-canada-policy-mistake-july-19-2017/

Dr. Thorne argues that the Bank of Canada is not properly recognizing the deflationary impact of a housing crash. With Poloz being questioned on it at a conference, and not providing a credible response. He further states that Canada, unlike most other world central banks, does not have a large amount of QE to unwind, and that monetary policy has been, relative to the rest of the world, quite unduly tight in Canada in the post-2009 era. Ripe for forced structural loosening relative to other major economies.

He further goes on to explain that the Australian central bank has recognized that there is significant deflation in the Australian economy’s future due to collapsing housing prices, and has hence decided not to raise interest rates. Essentially allowing the falling housing market to provide for the tightening to moderate inflation.

Interesting interview, and its not really in promotion of any type of investment strategy or investment services. A certainly quite welcome, highly professional opinion in dissent to the big bank economists who are calling for rate hikes in the absence of much data to support such.

#97 40 something family man on 09.04.17 at 3:35 pm

#69 MF
#70

Bang on about Fed Govs being the inflators of asset bubbles with record low nominal and negative real interest rates – coordinated higher rates in developed markets are now sucking the speculative juices out of these frothy markets.

Feel sorry for all the Moisters who think they need to own a house. It really is a sickness. Some say it is to raise a family (humble and worthy, doing the right thing? As what a good family man should), but oh so many cases, kids really buy homes for status, entitlement, societal expectations / pressures. You hear it at the bbq’s, reno’d basements with home theatre, new $20k patios, blah blah blah.. only later does my wife tell me, these dudes wives spill the beans on how over-extended they are!!! My yonger brother for example has spent $1.3 Million on 2 properties (1st one would not sell after listing for 4 months), he just had a baby girl, cute little thing.. why the move? Thought it was the right thing to do.. and now, the wife wants to quit her job! *** face palm ***

#98 AGuyInVancouver on 09.04.17 at 4:25 pm

#96 Mar
In a word: Balderdash!
Without knowing your age, you seem to be under the misapprehension that current low rates are “normal” and that the Banks of Canada’s and Federal government’s biggest job is preserving house prices. With home prices climbing so many multiples over incomes that it is ridiculous, it is clear the current situation is unsustainable and unhealthy. The best thing the BoC and gov’ts can do is deflate the bubble now, before more people get ensnared.

If we look at Japan’s long experiment with low rates and the subsequent limping along of their economy, it is clear it is not the answer and in fact low rates are the problem.

#99 Robert White on 09.04.17 at 4:42 pm

Bears eat, and bulls eat, but pigs get slaughtered! – Wall Street credo

RW

#100 M on 09.04.17 at 7:34 pm

Big RE agony lol
Poloz unlikely to reise rates.
However rates WILL go up because markets will force them up.
By now ..what Canada is.. became an open secret.

https://www.youtube.com/watch?v=Y8f5rGAr3fA

Man doesn’t lie.
It’s sad to see two brilliant men (Buffy and Cohy) fighting their styles on such a piece of crap as HCG.

My take is Buffy will lose bad.

Let the games begin.

PS Most accounting is either wrong or covered up so company numbers can not and should not be trusted. Books are cooked, SEC is in cahoots and Poloz pumps dough to companies to buy their own shares or pay dividend to the 6pack moron. It’s sad. ..but entertaining.

#101 Drake Hemming on 09.04.17 at 9:53 pm

Dale Frye, I know what you mean, we sold our business last year taking many risks over our 37 years in business and government just kept taxing, regulating and feeing us to death.

About 3 people used to work for us until we sold off our business last year and retired.

We have now 3.5 million dollars through various financial institutions in all 5 year GIC’s, 2.75% on average and longer term 3.5% to 3.60% government bonds.We use GIC brokers and discount brokers and are fully CDIC, CIPF covered.

Our monthly C.P.P, OAS, I.P.P, RRIF’s interest income is about $14,000 a month and we have a modest 2 bedroom paid off house, no debts etc.

We easily can sit pretty and do nothing and still add $1 million including interest every 10-11 years.

#102 Arne on 09.05.17 at 2:34 am

According to this, the slow-down in listings means that housing prices will continue to enjoy double-digit increases over the next year … and it also means that I guess I missed the bubble bursting :(
http://newshubnation.com/Bkdt4S0vl/Lack-of-homes-on-the-market-to-drive-Toronto-real-estate-prices-realtors-say

#103 Stan Broock on 09.05.17 at 7:29 am

“I don’t mind asking the wealthy to pay more,” T2 said on the weekend, when asked about the uproar his proposed small-biz and dr-crushing tax measures have caused.

——————————–
Sure, ask the wealthy then, i.e. the homeowners (tax gains on principle residences), the CEOs (increase taxes on sticok options), not the middle class entrepreneurs.

Let;s be clear – this thingy with the clearly intellectually challenged J2 will escalate to an open war.

As for Bill M who serves the big money, nothing new there. I hope doctors refuse him treatment if he needs it. I would.

#104 Stan Broock on 09.05.17 at 7:38 am

#100 M on 09.04.17 at 7:34 pm

Buffy will offload the crap at some point (maybe he already is doing it), at the end some poor schmuck’s pension fund will be left holding the bag.

Home Capital is toast.
——————-
Time to call bull shit on the stupid drama teacher. His dad enslaved Canada with the reform in the banking system that indebted us, this puppet’s role is to cover another theft through taxation and explosive debt accumulation.
Selfie after selfie with no substance.
——————————

Rates will go up as most of the foreign financing for our epic debt is variable rate MBSs guaranteed by government.

Our future labour have been sold by the corrupted politicians.

#105 Canadian Expat on 09.05.17 at 7:45 am

City of Toronto Jobs on Twitter (@CityTOjobs) is advertising a new “Toronto Realty Board” and looking for 6 senior executives. Do you know anything about what this new board will be Garth? Thanks!

#106 Scott Cordier on 09.06.17 at 9:53 pm

Back in late 2009, December or so, I retired at 60 and got 2, 30 year fixed term certain annuities which each pay $2,700 a month so $5,400 a month from my $1,000,000 RRSP converted to these annuities.

This was good for income tax smoothing and great for monthly guaranteed fixed income.

In 2015, I did start to get my C.P.P, OAS, another $2,000 a month there.

Since then I have managed to max out my TFSA’s and non-registered investments. I do have now around $300,000 in there.

I will easily have double this, $600,000 over the next 5.5 to 6 years or so and reach my original $1,000,000 in 11 to 12 years or so but will have about $120,000 a year in fixed guaranteed income and earnings from my total investments.