Balanced

Mr. Market giveth. He taketh away. Yup, this is the taketh part.

As forecast on this pathetic blog, three significant things have occurred. First, the nation’s largest (by far) housing market has officially slipped into bear territory with prices declining more than 20% across a region encompassing over six million souls. And, mirabile dictu, that’s happened with blistering speed, in about a hundred days.

Second (also as predicted) the average price of a detached digs has gone negative year/year. At $1.191 million, that house now costs 1.2% less in Toronto than it did at this time last year. Ditto in 905. What an astonishing reversal from those months last winter when realtors and the media crowed about 30% monthly price romps and everybody said it would last forever. So much for herd instinct.

And, third, we just got higher rates. The Bank of Canada benchmark has doubled in the last two months, from half a point to 1%. There’s more to come, and you should expect another doubling in the next year or so.

Finally, although these things have not yet occurred, they soon will. The bank regulator will introduce a stress test effectively raising mortgage rates (now on the rise) by a further 2%. And the Liberal government will seriously increase taxes on two million small business operators, 70% of whom have incomes of less than $200,000 and constitute the house-buying middle class.

Then there’s Kim Ding Dong and his nukes, the Trumpster and his Russia problem, the potential death of NAFTA plus the grief an angry planet is throwing at us. Those are unknown knowns. The five points above are known knowns. More than enough to punish the house horny, the debt-snoflers and all those Bank of Mom clients who decided to roll the dice on a one-asset financial strategy with endless leverage.

Bad move. Consider the average detached in TO which fetched $1,578,542 in April when the real estate-industrial complex was milking conditions for all they were worth.

This was in the Toronto Star a few days before Easter:

“If a buyer needs to sit back for a month and watch how regulators respond to the overheated market, that probably won’t make any difference in their ability to buy, says Desmond Brown, a Beaches-area Royal LePage agent. But delaying the purchase a year is another matter, he recently told clients relocating from Australia. They wanted to rent. Brown encouraged them to buy. “If you wait a year, you’ll never get into the market,” he told them.

Great advice, Des. If the Aussies bought the average home, with land transfer tax they spent $1,634,633. Today that home’s worth $1,191,052 – for a loss of more than $100,000 per month. Welcome to Canada! The decline in that property has been stunning – 28.1%, and things continue to deteriorate. We’re not near the bottom yet.

Toronto detached: from +30% to -1% in 100 days

Chart courtesy of torontorealestatecharts.com

Total sales last month in the GTA fell almost 35% while detached deals collapsed 46.1%. Even at the cheap condo end of the market transactions are off 28%. And this is not just an Ontario thing. Sales declines in the move-up market across the Lower Mainland show a similar slow-mo train wreck taking place.

What next? More.

Wednesday’s rate increase was preemptive, aggressive, hawkish and definitive. The central bank is using recent economic growth as a cover to normalize the cost of money and deal with the major problems of excessive debt growth and a population smitten with house lust. Today variable mortgage rates are higher, along with the prime, HELOCs and personal lines of credit, plus pressure is on five-year loans.

How consequential is this increasing cost of the debt burden we little beavers carry?

First, remember that guy in the Desert Storm Iraq war who kept telling CNN his side (the bad guys) was winning and the allies would soon be smoked, while Baghdad burned in the background? He’s been reincarnated as Jason Mercer, director of market analysis at the Toronto Real Estate Board.

“The relationship between sales and listings in the marketplace today suggests a balanced market,” he said Wednesday, trying to sound like he meant it. “If some buyers move from the sidelines back into the marketplace, as TREB consumer research suggests may happen an acceleration in price growth could result if listings remain at current levels.”

Riiiiight, Jason. Balanced. Maybe you and Desmond should get a room.

Here’s something more realistic to chew on. According to the Canadian Payroll Association, 47% of Canadians live paycheque-to-paycheque, thanks to overspending and over-borrowing. The latest poll is a shocker. A third say they’re “overwhelmed” by debt, even with rates at the lowest point ever. For the first time in the history of these surveys more people state they find their mortgages the most difficult debt to pay – significantly ahead of credit card balances.

So face it. Housing’s not bouncing back this autumn. This winter. Or next spring.

261 comments ↓

#1 Nick on 09.06.17 at 6:56 pm

We did it!

#2 Trawna on 09.06.17 at 6:58 pm

Furst? Is Garth back from walking bandit so soon?

#3 gary smith on 09.06.17 at 7:00 pm

fist!

Waiting on the sidelines in the 604 with down in hand.

Soon!

#4 Doug t on 09.06.17 at 7:03 pm

Winter is coming

RATM

#5 Happy Housing Crash Everyone! on 09.06.17 at 7:05 pm

Expect lower commissions and much fewer sales as the housing crash only gets worse you dirty Shysters.

Happy HAPPY Housing Crash Everyone! :-)

Financial hardships to all the SHYSTERS who conned people to financially murder themselves. You horrible shysters.

#6 KLNR on 09.06.17 at 7:07 pm

I have no sympathy for anyone who feels overwhelmed by debt. seriously what drives someone to want to live like that? can’t imagine the stress they live with.

#7 Bob Dog on 09.06.17 at 7:10 pm

Definition from Dictionary.com

fraud
frôd
noun

wrongful or criminal deception intended to result in financial or personal gain.

Im serious here. These realtor scum are 100% guilty of a crime. Who to I talk to within our shite government to get the legal ball rolling.

Has the regime in Ottawa become so corrupt that they will let this slide as the US did with criminal banksters.

#8 90 CENT LOONIE HERE WE COME!!!! on 09.06.17 at 7:10 pm

You forgot all of those Forex traders who are steaming mad at the Rate hike because they locked in the CAD-USD$ rate at the 76-79 cent range.

If Poloz isn’t devaluing the CAD$ to cause a storm of $8 cauliflowers, he wipes out the hedge fund managers by sudden rate hikes which cause tremendous forex losses because of the sudden rise of the CAD$ which is a hot topic on Reddit and 4chan right now!

#9 Johnathan on 09.06.17 at 7:10 pm

David Fleming Toronto Realty Blog says they go up guaranteed…..

#10 Happy Housing Crash Everyone! on 09.06.17 at 7:13 pm

“Great advice, Des. If the Aussies bought the average home, with land transfer tax they spent $1,634,633. Today that home’s worth $1,191,052 – for a loss of more than $100,000 per month. Welcome to Canada! The decline in that property has been stunning – 28.1%, and things continue to deteriorate. We’re not near the bottom yet.”

I would really want to know this shysters education level. I would bet they dont even have high school . It’s shysters like this who talk out of their @ss but have no understanding of anything. It’s shysters like this who would goto jail if they were giving financial advise. It’s sickening

#11 oncebitten on 09.06.17 at 7:15 pm

Reply to The Dood from yesterday

#171 BillyBob on 09.06.17 at 11:41 am
________________________________

#307 MF on 09.05.17 at 4:42 pm
IH,

Dubai? A better climate? Lol

Aside from being in the desert, Dubai is pretty much one of the last places on earth I would move to if I were wealthy.
________________________________

As someone who’s lived in that area of the world, allow me to also weigh in……

For those who’ve never worked overseas in a tax-free environment, let’s paint a little picture here, see if you can follow along.

– Imagine a USD paycheque with ZERO deductions
– Imagine working for an employer who pays for housing AND dependant children’s private schooling
– Imagine all Medical and Dental coverage for 100% (the medical/dental is just as good if not better)
– Imagine 5 or 6 weeks of paid vacation and being able to afford 5 star holidays for all of it no matter where you decide to go
– Imagine being able to afford business class for the whole family whenever you get on the plane for those 5 star holidays
– Imagine being able to save/invest 75% of your take home pay AND still live like a king while you frivolously spend the remaining 25%
– Imagine living in a place where you attend pool parties and backyard barbecues all year round

For those with an education, an open mind and some skill sets, its a big world out there! Get out and enjoy it. Dubai is a fantastic destination.

——–

I’m trying to imagine what it’s like being a woman in Dubai. Serious question.

#12 Joe Schmoe on 09.06.17 at 7:16 pm

Unfair!

I want Trudeau to tax someone to fix this!

#13 Rexx Rock on 09.06.17 at 7:16 pm

So a few thousand lost big money on speculating on housing.Big deal,hide your assets, declare bankruptcy and start all over.Thats what people do,it happened in GTA before when they cancelled the Avro Aero.The ones who couldn’t make it just went to the bank and gave them the keys of their house.End of story,deja vous.

#14 Raj on 09.06.17 at 7:18 pm

You forgot to mention another important event, immediately after BOC action, all the major banks bumped up their prime-rates.

Also, I just checked the new listings for GTA today and it’s significantly higher than last few days.
Not sure if this is just a coincidence or ….?

#15 WIN not lose on 09.06.17 at 7:22 pm

The Iraqi spokesman was known as Baghdad Bob (Muhammad Saeed al-Sahhaf).
One of the first vendors of Fake News.

#16 NoName on 09.06.17 at 7:23 pm

https://mobile.nytimes.com/2017/09/03/business/economy/trump-labor-policy.html

Interesting read.

#17 BlogDog123 on 09.06.17 at 7:24 pm

re: post #5:
Garth, is there some virus or ‘bot’ on your comments site. Every day saying the same thing over and over and over again. Blah blah blah!

post #5 above

Happy House Crash Everyone (HHCE!)
This guy thinks he gets bonus points for using the word shysters more than twice per post.

Give it a rest, HHCE. We read you the first time, sheesh!

#18 Reximus on 09.06.17 at 7:24 pm

I guess I live in RE paradise in the Beach, every house sells over ask

#19 paracho on 09.06.17 at 7:24 pm

It is a storm in the making . Laced mortgages with low rates for so long . The herd mentality kicked in and prices appreciated in the GTA. It was all so irrational .
Rates can only go up at this rate. Most mortgages are variable . A friend of mine who has a $340 k mortgage told me he is paying $138 more interest per month since the last increase . He is only 8 years into his 25 year amortizion . It will be difficult for many . Will an extended amortization period be a win for the mortgage holder ( not losing the house and lower biweekly payments) and a win for the banks ( higher interest returns over the long run with more time to accumulate interest at added higher rates ) be the key ???? It happened rksewhere !
We are living in interesting times to say the least !

#20 Darryl on 09.06.17 at 7:25 pm

“Riiiiight, Jason. Balanced. Maybe you and Desmond should get a room”
———————————————————
Love it Garth . An old saying revived at the perfect moment . Made me laugh .

#21 Bob Dog on 09.06.17 at 7:27 pm

Definition of fraud. a : deceit, trickery; specifically : intentional perversion of truth in order to induce another to part with something of value or to surrender a legal right

– Brought to you by REALTORS® across Canada

#22 Double Down on 09.06.17 at 7:27 pm

Spoke with my YVR Mortgage Broker yesterday about the impending stress test for uninsured/conventional mortgages, and here’s what he said:

Since the last stress test was added to insured mortgages, about 50% of his customers are now accessing BoM to boost their down payment, and bypass 20% DP requirement.

“most of the parent’s” aren’t wealthy, or sitting on $200k in cash, and he typically sets up a HELOC or Mortgage in order for the BoM transaction to take place.

His colleagues believe their business will dip by about 30% come the new regulations this fall, home prices will correct accordingly. Although he believes that the limited supply will keep prices balanced..

Also important to note that he just sold off his investment condo.. telling.

#23 Darryl on 09.06.17 at 7:29 pm

“47% of Canadians live paycheque-to-paycheque”
————————————————————-
And of the other 53 % , 30% still live with their parents .

Then again I guess a few of the 47% do too. :)

#24 Ian on 09.06.17 at 7:31 pm

This is the clearest signal I’ve seen from the BoC in a long time. It is ultra aggressive, and there’s no question about the path they’re on now. It’s up in October and up in December.

Garth, thank you so much for mentioning your line above about them being concerned about the debt bubble. I believe that is their main policy focus, but they will never say it. They actually said the opposite in their release today, when they alluded to the housing downturn as a dovish factor.

This is why you can’t read their releases at their word. You have to think.

I think at this point they are throwing the rising FX rate to the wind. They don’t care, at least for now. I mentioned in yesterday’s post the chart was ultrabullish and we may be heading to 85-90c comfortably. I see this as the only thing that may give them pause. If we race up to 90, exports and that nice 4.5% GDP growth won’t last long. But for now they don’t care about that.

They are ultra aggressively bursting this debt bubble dogs. They are not fiddling with the puppy any more. It’s guns out NK hydrogen test-inspired action.

#25 FOUR FINGERS WATSON on 09.06.17 at 7:31 pm

First, remember that guy in the Desert Storm Iraq war who kept telling CNN his side (the bad guys) was winning and the allies would soon be smoked, while Baghdad burned in the background?
………………….

That’s my uncle,”Baghdad Bob “. Stop pickin’ on him.

#26 Bob Dog on 09.06.17 at 7:34 pm

What is the possible penalty for Fraud Over $5000?

Under the Criminal Code of Canada, Section cc. 380.(1), every one who is found guilty of Fraud Over $5000 is guilty of an indictable offense that is punishable by a term of imprisonment up to fourteen years.

#27 Rudygq on 09.06.17 at 7:34 pm

Oh the panicked look and expressions of disbelief from many colleagues at the news of another rate hike today. Methinks there are many individuals who are stretched to the max. Utterances such as:
“But how will people afford their mortgage?”
“How could the government put Canadians at such risk?”
“Don’t they realize this is going to make properties worth less for many at renewal time? What will we do then?”
Unfortunately, the motivation of the BOC is not whether or not one can afford their mortgage, but their principle role as defined by the Bank of Canada Act is to “to promote the economic and financial welfare of Canada”, with particular focus on 1) Monetary Policy 2) The Financial System 3) Currency and 4) Funds management (that would be the public debt not private debt).

Low mortgage rates are a symptom—not the driver of monetary policy and financial system management. The very essence of risk is there is a downside and an upside. Economics has always been cyclic in nature because human nature is cyclic. None of us ‘deserve’ to have interest rates rise or fall on us expectantly. That’s just the way the machine works. It is up to the individual to exercise careful consideration when making a determination in taking on debt. It can be a life uplifting or demoralizing choice.
The good news is people become incredibility innovative when their backs are against the wall. For those in distress at today’s BOC news, know there are many solutions to counter these changes.
“Necessity is the mother of invention”—English proverb

#28 Mark on 09.06.17 at 7:35 pm

“If Poloz isn’t devaluing the CAD$ to cause a storm of $8 cauliflowers, he wipes out the hedge fund managers by sudden rate hikes which cause tremendous forex losses because of the sudden rise of the CAD$ which is a hot topic on Reddit and 4chan right now!”

Thanks, you gave me the first good reason to like Poloz all day. If people were trying to profit off of being short the CAD$, good riddance to them. I might personally not be doing well in equities this year (XIU is flat), but wow, is my USD$ short, CAD$ long ever making money like crazy.

Even though I’ve written many times that this whole thing, based on the data, is likely a giant head fake, and Poloz will have to deal with the deflationary and recessionary state of the Canadian economy sooner or later, there is historical precedent for the TSX to do well in a rising interest rate environment. And without a big run-up, when we do hit a crisis, equities aren’t likely to take much of the brunt of things. Its basically a dream come true for Canadian equity investors, the popping of the RE bubble and a cyclical rotation away from RE and bonds as an asset class. I think I said TSX = 16,5k this year, which is still a plausible if not modest gain, but next year could be quite explosive after such a lengthy consolidation phase.

#29 oncebitten on 09.06.17 at 7:37 pm

“rea lestate – industrial complex” lol

#30 Big Bucks on 09.06.17 at 7:38 pm

Be patient we’ll see new highs in the year 2040.

#31 nick on 09.06.17 at 7:40 pm

Fieldgate Blue Sky: 30′ detached 1 car garage sub 2ksqft homes in Stoufville starting at “Upper $900s”

Lmfao.

#32 Bezengy on 09.06.17 at 7:44 pm

My daughter has a brand new beautiful baby who is one month old, and today she calls me from work, (did I mention she is self employed?) She tells me she writing a letter to her MP about the new tax measures that are about to be implemented. She tells me she’d probably be better off now working for someone else, and I had to tell her I agree. I started thinking of how many generations of out family were self employed and for sure she’s the fourth generation consecutive entrepreneur. Oh well, I guess I won’t need to listen about the virtues of socialism the next time we get to have a drink together, and I bet she won’t be voting liberal next election.

#33 Skin of her teeth on 09.06.17 at 7:45 pm

One data point here. Sister, near Brampton ON, had accepted offers on a rural one acre property, classic small rancher for about 1.4. Had a $100,000 non-refundable deposit on property to close end of July. Buyers asked for more time. After first saying no, then ok for $5,000, then ok for a few small costs (bridge financing, home insurance, etc) the buyers finally closed 10 days later and the deal went through. Realtor said if we had to list again in August, it would have started for about $200,000 less. Skin of her teeth.

#34 BimmerGirl on 09.06.17 at 7:46 pm

Garth, I’m in Development Engineering at a municipality in the west end of the GTA. I’ve been getting an uneasy feeling by the developers over the last year, but nothing like the panic of the last 6 weeks. I’m fully expecting to go into the office tomorrow to a list of emergency security reductions, due to today’s increase. For those who read this blog, the ‘overextended’ is not just the indebted people who purchased homes but the contractors, builders and developers who employ the biggest segment of our economy. I’m getting the same chill I got in 2007 before the SHTF. Sadly, this time the pain is going to be so immense and will touch every single one of us in one way or another. Garth’s been spot on, this culmination of events is sheer distruction in the making!!

#35 The doubtor on 09.06.17 at 7:46 pm

Did not happen in Vancouver. People are still lining up to buy condos.

#36 FOUR FINGERS WATSON on 09.06.17 at 7:48 pm

Garth, I bet yer smokin’ ceegars and drinkin’ whisky you hillbilly. Wake me up when the average family in Tronna or Hongcouver making the average 76k income can buy the average family home @ 5 times family income which would be 380k. Meanwhile,excuse me if I yawn.

#37 Much Maligned Canadian Millenial on 09.06.17 at 7:51 pm

Great post Garth. Screw the boomers and speculators. I say raise those rates. Keep em coming Poloz. The young have been screwed in this country. And I agree with Trudeau with cutting out that tax loophole. Tax revenues have to come from somewhere Garth. They’re sure as hell not coming from wage growth. And when i propose that maybe we could save some money by stop bringing in all the problems from the 3rd world, I get labelled a racist. Well we have a $620 BILLION and counting national debt that the boomers and the politicians who pandered to them racked up. Someone’s gotta pay.

#38 People watching people on 09.06.17 at 7:54 pm

Interesting numbers. I’ve been watching the people viewing my sky box that has been on sale since July 1st. I’m the tenant of course. Who would foolishly pay $1M for this place??? Well the fool count is up to 30 now. 30 appointments to view this Dog forsaken slice of Ontario air. 2 possible HAM sightings, in the past 2 weeks, but overwhelmingly the folks have been Euro and young. Have a few more in the next couple of days booked. Now to be fair, my RE buddies tell me that the majority of them are probably other sellers getting a feel for the price point, which could explain the average 1.8 minute viewing time for all the folks who have darkened my doorway.

#39 Making the Call on 09.06.17 at 7:56 pm

MSM has attached itself to the negative, but that’s just sensationalism and they’re trying to get eyeballs on their website to sell ads. Ignore that – we’ve hit bottom Garth – I’m calling it right here. Sales volumes in Toronto have *RISEN* from July to August, and prices have also actually *RISEN* from the first half of August to the second half. Realtors are seeing momentum, buyers are coming back, and all indicators are that the fall market will reverse the recent trend.

Yes it may take a while to get back to April levels, but the worst is now behind us.

#40 Baghdad Orangutan on 09.06.17 at 7:57 pm

First, remember that guy in the Desert Storm Iraq war who kept telling CNN his side (the bad guys) was winning and the allies would soon be smoked, while Baghdad burned in the background? He’s been reincarnated as Jason Mercer,
..

I thought he became Sean Spicer …

#41 suburban coyote and pup on 09.06.17 at 7:59 pm

here in 905 downtown burlington, stale listings have been pulled. a small local developer (former re agent ) is losing his shirt with several listings that haven’t moved. Don’t feel sorry for him,,,he tried to horse thieve an elderly neighbour for her property last year. I do feel for the young builder who I sold to…nice kid. He is Italian, I am Greek. I sold my property sans agent which gave me total control of the conversation. He tried to lowball me as well…you know what they say about Greeks bearing gifts ;0

Onf52

#42 Soviet Capitalist on 09.06.17 at 8:00 pm

What is the source for -1%?
Looking at TREB data http://www.trebhome.com/market_news/home_price_index/pdf/TREB_MLS_HPI_Public_Tables_0817.pdf , there appear to be strong growth in both Toronto and GTA.

Right here. — Garth

#43 debt bird on 09.06.17 at 8:00 pm

http://www.bnn.ca/investors-spli … -rate-move-1.848430

The stronger-than-expected economy has also encouraged some experts to call on the federal government to revisit the timing of its massive infrastructure-spending plan.

As the centrepiece of its plan to improve the economy’s long-term prospects, Ottawa committed to invest about $186 billion into infrastructure across Canada over the next 11 years.

National Bank senior economist Krishen Rangasamy said Ottawa should consider delaying some nearer-term infrastructure investments as the economy strengthens. Otherwise, the extra stimulus could force the Bank of Canada to raise rates more aggressively, he warned in a research note to clients.

“These days, there are fewer folks arguing for infrastructure stimulus,” wrote Rangasamy, who admitted he was among those calling for such a move as recently as last year.

“Not only is the Canadian economy booming … but more importantly, private business investment is now bouncing back.”

Holt said he supports longer-term spending to upgrade the country’s aging infrastructure, but in the short term doesn’t believe the government should be stimulating the economy while the central bank is trying to cool it down.

The most recent GDP data shows the government infrastructure money has already started to lift growth, Bartlett said. Combined with the stronger economy, he warned, there’s a risk the infrastructure injection could eventually boost inflation.

Either way, he said, Ottawa would have a difficult time turning off the tap — particularly on provinces and cities that are counting on the cash.

“A lot of that money’s already flowing and a lot of that money’s already been approved, so it’s pretty tough to scale all of that back now,” said Bartlett, who also noted how it was a key pledge for the Liberals.

“It’s tough because from a political perspective they’ve put so much weight on the infrastructure program.”

#44 Stone on 09.06.17 at 8:02 pm

And the masterplan continues to tighten its tangled web into place.

I’ve been thinking about this for some time now. How do the top 1% ensure that the other 99% continue to remain poor and shackled wage slaves living paycheque to paycheque while the 1% get richer and richer? Well, they introduce and maintain a cycle of credit easing and tightening. This allows a rope to be put around the consumers neck when credit policy is loosened and then progressively tightened as credit policy is tightened. A whole cycle of dependence is created to which the majority of the plebs get stuck to, like flypaper. No resistance.

What I don’t understand is that it’s so obvious and yet, the sheeple can’t seem to see the trees from the forest (or the forest from trees – whichever it is) and fall for it cycle after cycle. When you look at it from 10,000 feet up, it’s comical considering it’s so simple to avoid the trap.

Well, some of my dividends are coming in Friday so I shall rejoice. Love renting and not having any debt. Being free of it is so wonderful. Keep up the good work Poloz. This new you really suits you. My investment portfolio thanks you for your efforts. Becoming part of the 1% is such a worthwhile goal. Yeah, it’s arrogant but I deserve it.

#45 will on 09.06.17 at 8:03 pm

“mirabile dictu”

Wonderfully said Garth! Love the Latin!

#46 Emmett on 09.06.17 at 8:04 pm

Hey Jonathan,

A couple excerpts from David Fleming 05.08.2017 blog:
http://torontorealtyblog.com/archives/17686

—————
“My sense is that prices will continue to rise.”

“As we moved out of April and into May, there was this ‘feeling’ that something was different about the market.–making it abundantly clear, that as per my suggestion, ‘There’s been a shift in the market, but it’s a change, not a downturn.’ ”

——————

It is tough to call it either way. The short of it is housing isn’t affordable to most Canadians as monthly cash flows tighten and savings remain non existent.

#47 96Tears on 09.06.17 at 8:05 pm

Good chance Kathy Tomlinson, Tom Davidoff, Steve Saretzsky and David Eby were invited to read today’s blog maybe just maybe they will tell information starved Vancouverites and Victorians what is REALLY happening in the GTA so they can have some hope that the industry here will crash too

#48 Grey Dog on 09.06.17 at 8:10 pm

Yup, bears and crickets are everywhere in Unionville! Houses around me have not sold and have been listed since May 24 weekend!

If there is going to be a 15 tax on foreign purchasers, HAM market prefers Vancouver, since direct flight takes less time, heck with the mountains, it’s prettier out there.

Will someone buy my home in 20 years? We just were NOT ready to sell this time round! Luckily multiple income streams in retirement, so we don’t need to sell home today to live in retirement.

#49 King Dong on 09.06.17 at 8:11 pm

Kim Ding Dong? More like Kim King Dong! That guy has the gonads to hold his ground on the nukes. No war will ever happen between N.Korea as a result of it.

I promise you, just watch…once N.Korea nuke program is fully operational they will begin to open their country to more trading and even foreign capital with time.

The nukes are the security they need to deal safely with the capitalist hawks. N.Korea will be more open and it’s GDP will increase in the coming decades. Just watch and remember my simple yet accurate predictions.

#50 Chaddywack on 09.06.17 at 8:11 pm

Garth, I totally forgot about “Baghdad Bob!”

Good compilation here of his comments! Someone needs to do one on Real Estate Boards eventually.

https://www.youtube.com/watch?v=yfAeMtcURg0

#51 Bobby on 09.06.17 at 8:13 pm

Remember the clowns at the Victoria Real Estate Board stating a few years ago that people should buy now because rising interest rates meant higher house prices. They were roasted on this blog and quickly withdrew that message.

So higher interest rates are here. I’m wondering if they will now put out the same dumb message.

#52 Long-Time Lurker on 09.06.17 at 8:15 pm

Cut and run, Anna.

#53 millmech on 09.06.17 at 8:17 pm

Watching real estate in the town I want to retire in dropping every week , a 3bdrm/1bth house on a .16acre lot with new everything has now broken down through the $300,000 line. A house like this last year was selling in days for over $400,000. I am expecting a house like this to go for about $200,000 by late next year as the price support for that area with low wages and high unemployment is in this price point and I can rent it out at $1800mth.
I do not understand people buying $500,000+ condos with strata and property taxes and renting them out for $2000 and expecting to make money off it. I was always told the rule of thumb for real estate was you should charge 1% of the value of the dwelling monthly in order for it to be a profitable investment.

#54 King Dong Redux on 09.06.17 at 8:20 pm

Whatever happen to that “50 cent Poloz” blog-dog? Has he gone into hiding from a shamefully poor prediction?

I hope he doesn’t manage his own investments with the same forecasting skills….otherwise he’s definitely part of that 47% living paycheque to paycheque.

F38ON
37-28-35

#55 Glengarry Girl on 09.06.17 at 8:21 pm

News articles are starting to report what is happening

http://globalnews.ca/news/3720843/vancouver-mortgages-foreign-buyers-tax/

Others are trying to put lipstick on the pig

http://www.cbc.ca/news/canada/toronto/treb-august-numbers-1.4276710

Don’t worry Toronto, everything will pick up again this Fall

#56 knock knock, whose there? your honest realtor. on 09.06.17 at 8:22 pm

T0day was xmas. 1 gift after another

2 homes in my area that pulled out from the market a month ago, are back for sale again.

#57 Andrew Woburn on 09.06.17 at 8:22 pm

We all know electric vehicles won’t work in Canada because winter cold will kill the battery life.

Or not.

“Edmonton could quit buying diesel buses by 2020

Electric buses on the market today are good enough to run the whole day on just one charge, which means Edmonton could kick its diesel habit within three years, the city’s head of transit said Tuesday.

The competition to supply Edmonton’s first 40 electric buses closes Sept. 12 and they’ll be delivered in early 2019, as soon as the new northeast transit garage is built and ready to charge them, said Edmonton Transit chief Eddie Robar…

… A year ago, electric buses on the market could run at best 200 to 250 kilometres, or about half a day’s service, on one charge, said Robar. “But the industry, it’s evolving so fast,” he said.

Today that range is nearly 500 kilometres, which means 20 hours of operation before a charge.

… Partly because of the climate, the whole industry is watching closely, he said: “It’s a bit of a proving ground for electrification. They work in Edmonton, they can work everywhere.”

#58 Victor V on 09.06.17 at 8:23 pm

BMO Bank of Montreal Increases CDN$ Prime Lending Rate to 3.20 Per Cent

http://www.newswire.ca/news-releases/bmo-bank-of-montreal-increases-cdn-prime-lending-rate-to-320-per-cent-642921403.html

#59 ANON on 09.06.17 at 8:25 pm

So, this is IT, eh? Don’t look like much, yet, but it will. Soon.

#60 Entrepreneur on 09.06.17 at 8:26 pm

A little bit of a disconnect in a couple of places:

Rates up and economy growing but in the extraction sector, an evolved system in their own world. What about our communities? Are our MP’s and MLA’s speaking/fighting for the people/constituents? Or are they going with “follow/ask their leader” and ignore the people who voted them in once again?

And Site C dam: To close down cost in the billions but to finish cost billions. Seems to me that the decision breaker here is “money.” Many B.C. people do not want it for various reasons. Money should not be in discussions as a decision maker. Because,

Right now, this very moment, earth is changing/correcting and we should show respect by not disturbing what was given to us. And if not, you have what is happening now, and as time moves on, more of and stronger.

#61 Ian on 09.06.17 at 8:27 pm

#31 Bimmergirl

Contractors, builders, developers at risk.

EXACTLY.

This is the Black Swan event I’ve been worried about for a while.

It’s bad enough that Philip Cross tells us our beloved nation has 436% debt-to-GDP. And Transunion telling us there are X people sensitive to a 1/4% increase.

But those are only the puppies. You can go to Starbucks less and do Pilates less as someone said.

The big dog in the room, The Black Swan, is job loss. That is like how Taleb described the thanksgiving turkey in his book: everything is going well until you’re being served for dinner.

Anyone associated with this RE market is at severe risk. Lose your job, you’re added to the queue of house sellers.

#62 Jane Simpson on 09.06.17 at 8:32 pm

Our colleagues went and bought 3 properties back in 2015 and said that interest rates would stay low.

They said the rental income will keep rolling in and their houses will rise by minimum 12% a year so about double in 6 years or so.

They kept telling us to stop maxing out my RRSP’s, TFSA’s and non-registered accounts and we should stop paying down our mortgage and increase our debt to buy at least 1 or 2 rental properties.

They said why settle for 3% to 4% interest rates on bonds, strips, GIC’s.

The Bank of Canada just increased their interest costs by another $5,000 and plus back in July another $5,000 so $10,000 more interest so for this year.

They are likely looking at another $20,000 for 2017 to 2018 in higher interest costs too. This total $30,000 will wipe out 40% of their net yearly rental income.

We now have $185,000 in RRSP’s, TFSA’s, non-registered investments and only $60,000 left on our mortgage.

It is a house worth around $425,000 as of last month which is about 86% total equity.

We will stick to our annual $18,000 RRSP’s, $11,000 TFSA’s, $14,000 non-registered contributions and be on track to our goal of $1,000,000 in total RRSP’s, TFSA’s, non-registered investments in 15 years or so by the end of 2032.

#63 Am I doomed - continued.... on 09.06.17 at 8:35 pm

In response to:
#6 KLNR on 09.06.17 at 7:07 pm
I have no sympathy for anyone who feels overwhelmed by debt. seriously what drives someone to want to live like that? can’t imagine the stress they live with.

I bought my first house in 1990 and my mtg rate was 12%. Then the GTA RE market crashed. People were under water fast and banks were demanding more money to keep the mtg principle and house value within requirements. Of course many people lost their homes or just walked away losing all their money and hopes and dreams. Was a truly sad time for all of my coworkers and friends that were caught up in FOMO, but really were trying to establish a home base for their growing families. I really felt their pain! Sympathy, of course, just as any other human being would have as well.

I did not walk away from my mtg debt. Instead I had a 2 bdrm basement apt built. I moved out of the house into a cheap apartment, and then rented out both main and basement floors. I made enough in rent to cover all of my expenses. A landlord / RE investor was BORN! As the mtg rate dropped over the years, I constantly took advantage and ultimately I became more than cash flow positive. I learned from my accountant about real estate rental expenses and also became very handy fixing various problems with my rental property. Overall that 1990 RE crash turned out to be a positive for me. I was able to purchase more GTA RE and today I am mtg free and cash flow positive. I could have sold my properties but after careful consideration and talks with my family, we decided to keep them. Ultimately, these properties will be maintained by my sons.

I really hope people that may have gotten into the market at the top and are starting to feel the fear and cash crunch to consider what I did. Most probably bought with the intention of putting shelter over their families. I feel your anxiety and I see this with my new neighbours.

Best of luck to you all, Happy Housing Prosperity Everyone, and stay positive, ….even you ‘Happy Housing Crash Everyone’ guy/girl. Maybe one day you will move out of your parent’s basement or rental unit and purchase RE on your own. Your family will enjoy it and then your cynicism will eventually disappear….

#64 Headhunter on 09.06.17 at 8:41 pm

Seven years of feast.. seven years of famine.. read it in an old book. Same game 1000’s of years. Basically Inflation/deflation cycle. Rich will buy for pennies on dollar.. break the machine. Man who eats well lives a good life.. renter or owner

#65 Glengarry Girl on 09.06.17 at 8:43 pm

#35 Doubter

Why is this a good thing? Why do all the Doubters or Making the Call dudes on sites like this fist pump an absurd Housing Crisis. The recent activity in condo sales in Vancouver is just more intervention and market manipulation? What makes this good news, it isn’t sustainable. Who cares if condo sales surge in Vancouver and people that should not have bought get sucked in. Once it corrects 30%, its not them that will loose, they literally have no skin in the game. Why celebrate these numbers, I kind of shake my head in disbelief that this keeps going on.

http://www.rebgv.org/first-time-buyers-interest-free-down-payment-program

#66 Smoking Man on 09.06.17 at 8:45 pm

As canada accelerates toward full blown communism. This is what I see.

https://youtu.be/5BmEGm-mraE

Got a great shot of the moon over the Atlantic tonight. @SmokingMan

#67 Trumpocalypse2017 on 09.06.17 at 8:48 pm

I agree with Putin:

GLOBAL CATASTROPHE COMING!!!!!!!!!!!

The next 7 days will be brutal:

Irma, with Jose right behind.

Worst. Hurricane. Ever.

A “nuclear hurricane” according to a NOAA official tonight on CNN.

America utterly distracted, torn apart politically now as Trump tries to suck up to Democrats today.

Kim Jong Un seizes the moment this weekend, launches nukes.

Russia also sees opportunity to expand its military and political might.

Economies tip over, Canada’s among them.

You will never forget this week as the Summer of Hell reaches its climax.

September 13 will be the beginning of the end for all of us.

Except those who have prepared.

PREPARE!!!!!!!!!!!!!!!

#68 Ian on 09.06.17 at 8:50 pm

Flop, I predict we break a number of comments record tonight. Happy BoC Day Somewhat Unexpected Edition will do that.

Although I didn’t have the pleasure of knowing Boom, if the dogs I respect loved him that is more than good enough for me.

So if it’s ok, here is my code and tribute:

M48ON

M64WI

#69 Gravy Train on 09.06.17 at 8:50 pm

Those are unknown knowns. — Garth

Are you sure those aren’t known unknowns? I don’t know—I couldn’t follow the argument when Donald Rumsfeld was explaining it! :)

#70 Danny on 09.06.17 at 8:53 pm

Garth……one of your best blog yet.
No BS…….here.
Yes…keeping interest so low for TOO long was an easy promotion Slogan….that too many with grade school mathematics levels were taken advantage of by the Real Estate Cartel and the money lenders…Those with no morals..no guilt…….taking advantage of the ill informed thrown into non transparent bidding war.
Something like went on in the USA during the election and continues today …keep them ignorant
Would be nice if moron Trump would just shut up and stop acting like the Ding Dong in North Korea….morons are not good peace makers.
Let the diplomats do their work for resolution without bombs and put your Trump Slogans away….they are not helping and the Presidential election is long over….you bully.

#71 Happy Housing Crash Everyone! on 09.06.17 at 8:57 pm

#34 BimmerGirl

Thanks for the on the ground observations. Been hearing similar stories from insiders. It’s funny watching the criminal liars (realtors and other vested interests) try to put lip stick on a fat sick pig

#72 Nonplused on 09.06.17 at 8:58 pm

1% interest rates! Oh no! What’ll we do?

1% is still an emergency rate. If you could borrow at that and invest in inflation you’d be printing free money.

#57 Andrew Woburn

Why don’t they just go back to those overhead wires they used to have everywhere for the buses to connect to? Problem solved! Or they could put trams in the street like they do in Europe. Problem solved! But battery powered buses? I can see it being feasible because you can put batteries under the whole bus but it’s going to cost a fortune!

#73 Deplorable irma on 09.06.17 at 8:59 pm

#66 Smoking Man on 09.06.17 at 8:45 pm

As canada accelerates toward full blown communism. This is what I see.

https://youtu.be/5BmEGm-mraE

Got a great shot of the moon over the Atlantic tonight. @SmokingMan
.

Hey smoker dude.. branson rode out irma in his own bunker .. did your new place in st marteen survive?

sell schlong branch and moves to the caribbean… man talk about luck!

#74 Smoking Man on 09.06.17 at 9:01 pm

#67 Trumpocalypse2017 on 09.06.17 at 8:48 pm
I agree with Putin:

GLOBAL CATASTROPHE COMING!!!!!!!!!!!

The next 7 days will be brutal:

Irma, with Jose right behind.

Worst. Hurricane. Ever.

A “nuclear hurricane” according to a NOAA official tonight on CNN.

America utterly distracted, torn apart politically now as Trump tries to suck up to Democrats today.

Kim Jong Un seizes the moment this weekend, launches nukes.

Russia also sees opportunity to expand its military and political might.

Economies tip over, Canada’s among them.

You will never forget this week as the Summer of Hell reaches its climax.

September 13 will be the beginning of the end for all of us.

Except those who have prepared.

PREPARE!!!!!!!!!!!!!!!
…..

Who is your shrum dealer. I want some. I see a best seller,

#75 Looney Baloney on 09.06.17 at 9:01 pm

Gold is the money of kings, silver is the money of gentlemen, barter is the money of peasants – and debt is the money of slaves.

#76 Glengarry Girl on 09.06.17 at 9:04 pm

#61 Ian

You are right on about the ripple effect and job loss. This is not going to end well, it can’t. The Canadian Housing Bubble, when it really bursts, will have effects that blogs like this one will write about for years. Unfortunately it won’t be just the irresponsible that will have negative effects. Lots of industry, businesses and budgets foolishly have been created based on this unsustainable growth. Everyone is so house horny in Canada, they really believe it was all going to continue. You can’t drive through a subdivision without a painted Real Estate logo, house inspector, decorator sign on personal vehicles. Storage Units and bins and toys in driveways. It’s all anyone talks about. I’ve read that Dentists gave up their practice and got into real estate. My kids are all studying and working in fields related to the housing market. I have taught them fiscal responsibility but no doubt they will be effected. Its ok though, they don’t drink the kool aid and they will survive. Here is something else to consider, rents will go UP not down for a period of time. Reluctant landlords will be a nightmare to deal with. Cities that expanded based on the tax revenue (price based) will have to scale back accordingly. This goes on and on. I know because I’ve been through it in the US. Literally watched it happen.

#77 For those about to flop... on 09.06.17 at 9:04 pm

Here is a house that sold last week a few blocks away from where I live.

This realtor put the results up within a few days of the ink drying.

If you look at his sales this year ,the general pattern is before June his clients were getting over ask and since at ask or below.

It is the same realtor that struggled with the elderly neighbors house that went below ask and well below assessment despite being one of the cheapest options in Vancouver.

In the end(3 months ) he prevailed and this one was on for around 2 or so weeks and was an easier go but still did not get ask.

Was in much better shape and way newer but the first one was a better block to build.

To each their own…

M43BC

5325 Elgin St Van.

Ask 1.47

Sell 1.4

http://normflockhart.com/listings/sales.aspx

#78 It's just a flesh wound on 09.06.17 at 9:06 pm

Some of those dependent on real estate keep selling their snake oil even after the market has turned… and the media happily regurgitate it.

This is the headline from CBC: “Toronto home sales soften in August, but fall could see market warm up”. The fall could also lead to a bigger fall. Mr. Mercer (who is also quoted in the CBC article) conveniently ignores what would happen if sellers come back into the market and the buyers stay away. Isn’t that the more likely outcome in a falling market?

#79 dr. talc on 09.06.17 at 9:06 pm

What’s Desmond Brown supposed to say:
“Don’t buy”
That would make him an idiot.

He is guilty of Salesmanship, I’d list with him.

#80 Sideshow Rob on 09.06.17 at 9:07 pm

It takes a pretty creative mind to sneak Baghdad Bob into a real estate blog. Bravo!

#81 X on 09.06.17 at 9:08 pm

I do like what the gov’t has done to take the hot air out of the housing market. Unfortunately many sheeple need to be protected from their own financial ignorance.

Higher rates, higher taxes, new rules. Who has money to buy a house, and for that matter, why would anyone want to be a residential landlord. Buy a commercial space, more favorable rules as a landlord. This market has further to fall.

“People who make $50,000 a year should not pay higher taxes than people who make $250,000 a year.” JT

I don’t think T2 has a full understanding of what they are about to do to small businesses. The money he mentions isn’t personal funds, it is property of the business.

Yes, the gov’t needs tax money, the gov’t has a spending problem. This is all the Liberals appear to know how to stimulate the economy.

By taxing small businesses more, businesses will pull the money out to the business (why not….if you are going to be taxed at the highest rates). But when a downturn comes, the business will have no money. No funds for lean years, no funds to buy equipment.

At a certain point the incentive to work more or earn more is lost. We may be about to breach that point.

#82 The real Kip on 09.06.17 at 9:10 pm

Irma might be a problem but Donald Trump already said he’s not going to let Jose in!

#83 rknusa on 09.06.17 at 9:11 pm

I have been getting daily listings for a specific geographic area for the last 6 months or so now, namely the GTA and those daily listings have more than doubled today over previous max number of listings for a day

looks like there is a panic to sell

#84 X on 09.06.17 at 9:13 pm

The estimated impact of the new housing rules are expected to take 18% of buyers out of the market as per the mortgage guys.

What % of the market does every quarter point increase the BoC makes have on the market?

#85 paul on 09.06.17 at 9:14 pm

Happy Housing Crash Everyone!

This is him talking to his AGENT, Rick

https://www.youtube.com/watch?v=jtbp5cTLLjo

#86 For those about to flop... on 09.06.17 at 9:24 pm

I would just like to put a bow on happenings on the blog the last couple of days.

Thanks for your support for “Boom Days” where a whole group of people took time to post memories of Roy Stacey and some of the newer members of the blog took time to see what all the fuss was about.

I joked a few times with Boom that he was my Blog Dad and he took the time to help me out as much as possible.
What would he have written about Trump in power,The Liberals continued reign or happenings in Toronto and Vancouver real estate,we will never know but I cherish our all too brief friendship until I too draw my last breath.

I am lucky I still have the boss of this blog to guide me through the choppy waters, he knows I am grateful for continued presence of this blog and I try to help him out as much as possible with photos and information he may not know about Vancouver real estate.

One of these days I am expecting an email from him telling me that he has decided to move me out of his “useful idiot ” column of his diary…

M43BC
M64WI

#87 viorelli on 09.06.17 at 9:28 pm

The socialist govt has a wet dream to get extra $$ from the business class, the backbone of our economy. What they don’t understand is that many of those self employed potential cheaters who also employ numerous locals are themselves overleveraged and going to cut down on hiring and spending at the same time. Let’s look at one of my son’s friend who is a newly minted dentist in Vancouver. UBC dentistry now averages 70K per year, thus if you aren’t wealthy good luck paying those loans. Associate positions are getting harder and harder to find and they are increasingly compensated on commission basis. Want to open your own clinic: 700 sq.ft rent will average $3-5.000 monthly. Want to purchase an office or retail space…prices are in the stratosphere. Then good luck acquiring new patients as they like to remain loyal to the established guys. You need a million or more now days to finish school and set up the shop with the latest gadgets and the return on investment is not guaranteed as it is getting very saturated and competitive: basement dentists, Mexico, Eastern Europe dental tourism, etc. Now the govt wants to take an extra slice of taxes, from where? There isn’t much left to take!

#88 Glengarry Girl on 09.06.17 at 9:31 pm

#34 Bimmer Girl

I share your concern, many will be hurt by this correction. It is just like 2007 in the US. My daughters have all moved back to Canada to study and work. My oldest is a Civil Engineering Student. She is on her co op working at an Engineering Firm. Loving it, working lots of hours, taking soil and cement samples for construction. Her boss is great, treats them well, buys lunches and fills the tank with gas for errands. My middle daughter is so excited after completing her co op at an Architecture Firm in TO, she goes back to finish her diploma and they are offering her a job in January. My youngest just started studying Electrical Engineering. All bright and energetic and smart with great prospects ahead. I am so proud but I also have always talked to them about the truth. I went through this cycle twice in my lifetime and I KNOW what comes next. Divorce, suicides, financial destruction, It’s not pretty. I rented a house in Seattle during the bust. My landlord paid $650 for it and it went up to $890 in a short period of time. He had another one in the neighborhood in a lower price range. Him and his wife owned a Dry Cleaners. When it started coming undone they were forced to rent the house out and rent a mother in law suite with a 2 year old. This is what I call the reluctant landlord. The house we rented was kept immaculate, they only used one of the 4 rooms. We moved in paid crazy rent, they hovered around their investment as it continued to decline in value. They obsessed with our maintenance and normal use of the home. Twelve months in we asked that the rent be reduced by $350 month. At that time things were coming unhinged. She literally wept on my front porch. They ended up broke and split up, very sad. Next door neighbor was a mortgage broker. Watched them come apart in 18 months. Foreclosures everywhere, it was a shit show. The beautiful new Library and school had to made big cutbacks because the money flow was cut. I could go on and on. 10 years later, even though you read in the paper that the US has recovered, I can assure you that it has not.

#89 Smoking Man on 09.06.17 at 9:35 pm

83 rknusa on 09.06.17 at 9:11 pm
I have been getting daily listings for a specific geographic area for the last 6 months or so now, namely the GTA and those daily listings have more than doubled today over previous max number of listings for a day

looks like there is a panic to sell
…..

Like I said a huge number of boomers want out. All their loot is in a house. Huge demographic. They know kids can’t afford to buy their zillion dollar bungalows.

For anyone that reads the comments section and follows the great smoking man with an incredible alien ability to see the future. I let you all know in feb I was selling after a bit of reno. Sold at April peek.

Why you didn’t sell? greed or procrastination. You’re screwed now.

Listings are about to explode. IT contractors TFW and the dr tax is going to bury you. Take the hit now. The one coming after this will blow your mind.

And now that CRA knows who I am and catalog every post. I would love to tell you the bet I made when Poloz did the 180 a few months back. But sadly I can’t.

#90 dakkie on 09.06.17 at 9:40 pm

Toronto Home Price Bubble Descends into Bear Market

http://investmentwatchblog.com/toronto-home-price-bubble-descends-into-bear-market/

#91 Asterix1 on 09.06.17 at 9:40 pm

Will the G&M, TStar, CBC, National Post and TStar ever gain their respect back after years of misleading the public on the real estate market?

I know they badly need the cash from the “real estate non-industrial complex” but its gotten to such a pathetic level that we may be pass the point of no return!

*Another award winning propaganda piece from G&M!

“The buyers are back in Toronto’s housing market”
https://beta.theglobeandmail.com/real-estate/toronto/the-buyers-are-back-in-torontos-housing-market/article36184927/

Speechless!!!

#92 Penny Henny on 09.06.17 at 9:44 pm

Great advice, Des. If the Aussies bought the average home, with land transfer tax they spent $1,634,633. Today that home’s worth $1,191,052 – for a loss of more than $100,000 per month.-Garth

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

Garth that is so full of bull and you know it,

Official realtor stats. Suck it up. — Garth

#93 Asterix1 on 09.06.17 at 9:49 pm

#42 Soviet Capitalist on 09.06.17 at 8:00 pm
What is the source for -1%?
Looking at TREB data http://www.trebhome.com/market_news/home_price_index/pdf/TREB_MLS_HPI_Public_Tables_0817.pdf , there appear to be strong growth in both Toronto and GTA.

Right here. — Garth
____________________________________________

Take this as your official politburo order to stop posting Soviet Capitalist!

” ..there appear to be strong growth in both Toronto and GTA”. Good one comrade!

#94 FLHTK on 09.06.17 at 9:49 pm

#11- that sounds amazing! I have a skill set that can be used around the world for for government…..where do I sign! Put in 10 years there tax free and come back and retire.

#95 BS on 09.06.17 at 9:52 pm

Great advice, Des. If the Aussies bought the average home, with land transfer tax they spent $1,634,633. Today that home’s worth $1,191,052 – for a loss of more than $100,000 per month. Welcome to Canada! The decline in that property has been stunning – 28.1%, and things continue to deteriorate.

Des’ advice was not intended to help his clients. It was intended to land a large commission for himself. Des gets to keep the commission even when the clients are bankrupt.

It is sad how people actually accept advice from commission sales people like realtors. They are advising you on how they can make the most money with the least effort. Your best interest is never a factor. Don’t even asks them what they think unless it is just for laughs.

#96 Grantmi on 09.06.17 at 9:57 pm

Vancouver next!!

#97 juno on 09.06.17 at 10:02 pm

solution is simple

You can’t afford it sell it!

And Stop your sniffling and whining, Cause I tire of hearing it

#98 BC_Doc on 09.06.17 at 10:02 pm

#150 Oft deleted much maligned stock picker on 09.06.17 at 10:30 am
#38 BC DOC…..none of those ” Nurse Practitioners” for me thanks. I once saw one when my doctor had stepped over to the hospital for an emergency….the results were both comical and pitiful. I had eaten a large pomegranate….rich in citric acid…..I was left with a burning sensation in my bladder….had stopped at the doctors office for some relief. I told the NP the whole story…but he wasn’t having any of it. I was immediately diagnosed simultaneously with both Renal Cancer and Bladder cancer and the goofball was wanting to send me off for a battery of tests…..which I declined…..knowing some mild prescription for my bladder irritation could likely be had at the pharmacy…which when taken relieved my symptoms. Imagine some poor sap who might have thought the NP was qualified to dispense medical advice….and went home to announce to his family he was dying from cancer…according to the Liberal Nurse Practitioner. …????? Trudeau better get his crap together……before the cancer clinics overflow with misdiagnosed patients .
—————————————————————–

Great [email protected] Deleted– very funny!

Locally, our NPs are funded and employed by our health authority– that means they work Monday to Friday banker’s hours. While politicians may claim to hate the fee for service system, incentives are what get the plumber and the interventional cardiologist out of bed at 3am to fix those blocked pipes that can’t wait until the morning to be fixed!

#99 ANON on 09.06.17 at 10:03 pm

In retrospect, 2008 was the bear trap . People in New Delusia paying attention should prey for a bull trap to unload. Chances are rather slim, though. The people of Delusia have had their chance.

#100 Old Ron the Realtor on 09.06.17 at 10:03 pm

In fairness to Dez, he is a good man with decades of service under his belt. He was not alone in the real estate cheerleading, everyone in every part of Toronto was caught up in the euphoria (Except dour Garth)

Professionals offering advice on huge financial transactions are not allowed to be ‘caught up in the euphoria’ of anything. — Garth

#101 Built to Spec on 09.06.17 at 10:06 pm

Great column as always Garth, just disagree on one point.

Trump doesn’t have a “Russia problem” – have you noticed we don’t hear about it anymore? It was all a trumped up lie from the beginning (pardon the pun).

It turns out that if anybody was colluding with Russia it was the democrats – Obama caught on microphone saying to a Russian official that he would be “more flexible after the election”, Bill Clinton receiving $500,000 for a speech in Moscow, and Hillary shortly thereafter signing away 20% of America’s uranium to Russia, etc.

You are about to hear a lot on the subject. — Garth

#102 BS on 09.06.17 at 10:07 pm

The central bank is using recent economic growth as a cover to normalize the cost of money and deal with the major problems of excessive debt growth and a population smitten with house lust.

I find it odd all of a sudden this is a concern. This was a concern when they did the last two rate cuts with dovish talk to follow. The next move was supposed to be a cut. Then the switch flipped with Toronto RE already tanking and most of the countries RE markets weak they are raising twice with plans for more? I have to think this is about getting the CAD up quickly for NAFTA negotiations. It does exporters and importers no good to drop then increase the CAD like a roller coaster. How can you run a business with cost fluctuations like that? Many companies will have gone bust on the way down and many more will now go bust on the way up. Get the hedge wrong and you are toast.

At least I hope this is about NAFTA otherwise this regime is more clueless than anyone could have imagined. If they just figured out there is a massive debt problem, a housing bubble and rates must normalize then we have a lot to worry about.

#103 Mark on 09.06.17 at 10:07 pm

“1% is still an emergency rate. If you could borrow at that and invest in inflation you’d be printing free money.”

Only problem is, inflation was 0% month over month in the most recent report, and only 1.2% year over year. Trending downwards at an accelerating rate due to the strengthening CAD$ and falling consumer demand due to the RE bubble implosion.

So a 1% “policy” interest rate may seem high, but historically, risk-free T-Bills have not sustainably offered a yield above that of inflation, and inflation is rapidly turning to deflation.

This is meaningless, misleading drivel. There is no deflation in Canada. — Garth

#104 domain on 09.06.17 at 10:08 pm

#37 Much Maligned Canadian Millenial

Nowhere in your post do you mention or consider that the Government should perhaps spend less as opposed to seeking an ever increasing tax revenue to support an ever-increasing consumption of taxpayer capital.

Just remember, the cornerstone of western civilization and all of the success it has brought to its practitioners is balanced upon property rights and the value of the individual.

#105 mark on 09.06.17 at 10:09 pm

All we talk about for most part is the east and west coast housing market.
That does NOT make a bear market in Canada’s.

#106 Streetsville, Mississauga on 09.06.17 at 10:18 pm

Thank you!! For all that you do!

#107 Mark on 09.06.17 at 10:18 pm

“So a 1% “policy” interest rate may seem high”

Bleh, I meant “low”. Just got in from a 25km bike ride (that I do twice daily) after I wrote that, so the mind is a little fried. lol.

#108 Doug in London on 09.06.17 at 10:20 pm

So, what ever happened to all those genius commenters here who said the Bank of Canada would NEVER increase interest rates?

#109 genbizx on 09.06.17 at 10:21 pm

#93 mark
that’s a big chunk of canada population wise

verging on 2/3’s of the housing market…manitoba and sask and the east coast are just big cities and don’t have much of a market..

ya it’s a bear market

#110 Bob Loblaw on 09.06.17 at 10:21 pm

A Realtor’ s favorite term – the balanced market. Prices and sales are dropping like a stone, but don’t panic..its just becoming more balanced.

Think about it. If you bought a home for $1.2M this past spring with say an $800K variable rate mortgage, your payments just went up a few hundred a month. None of that extra payment goes to the principal. It all goes to the bank. By late 2018, expect another few hundred dollar increase, meaning your $4,200/month mortgage is now over $5,000/month for a home that’s losing equity daily.

How great must it feel to have to shell out an extra grand a month on an asset that’s shedding its value simultaneously, while you owe the same amount.

Good thing your realtor provided you with some sound investment advice and talked you into buying now before you were priced out forever.

#111 BS on 09.06.17 at 10:23 pm

#28 Mark on 09.06.17 at 7:35 pm

Thanks, you gave me the first good reason to like Poloz all day. If people were trying to profit off of being short the CAD$, good riddance to them. I might personally not be doing well in equities this year (XIU is flat), but wow, is my USD$ short, CAD$ long ever making money like crazy.

Mark you have been bullish the CAD when it was at par. That means you are still at a loss. The making money part comes when you are above the point where you started the position (plus inflation) which is a long way off.

#112 BS on 09.06.17 at 10:33 pm

The drama teacher speaks on the new tax policy today:

“Speaking of tax changes, I want to be clear: people who make $50,000 a year should not pay higher taxes than people who make $250,000 a year. We are always open to better ways to fix that problem, but we are going to fix that problem,” Trudeau said.

Can anyone come up with an example where a person who makes $250k per year pays a lower tax rate than a person who makes $50k per year? Someone please tell junior he is over his head and just let the adults run things from this point forward.

http://www.cbc.ca/news/politics/trudeau-small-biz-tax-changes-tweaks-1.4277510

No peep from the media on the bogus analogy. Can you imagine if Trump said something that inaccurate about tax policy?

#113 genbizx on 09.06.17 at 10:33 pm

meanwhile our monthly rent is raised effective oct. 1

all because cheap rates have allowed this guy to hold mortgages and now he expects to keep getting paid when the whole thing starts to unravel

anyone see this playing out over the next few years?

all these jokers can make others feel the effects of their greedy little plans

next he’ll be trying to sell this place…can’t wait for prices to reflect reality and not central bank tinkering and real estate industry lies

#114 Trojan House on 09.06.17 at 10:34 pm

Of course Canadians are addicted to debt. We learn by example from the biggest debtor there is – the federal government.

If it’s not going to end well for the average Canadian, then how does it end for the government?

This is the real elephant in the room.

#115 Ian on 09.06.17 at 10:36 pm

Question for you dogs.

Late in the comments yesterday, Reality 1 raised the issue of the FX rate. I mentioned our family business and our view that the best exporting spot for Canada was high 70c. The rate is rocketing so quickly I think there’s a good chance it gives the BoC a headache it didn’t want as it detonates our debt bubble.

For those of you exporting to the US, or employees of those firms: straw poll, what is Canada’s optimum FX rate? It will vary from business to business depending on importing but let’s give it a go. I’ll open with 77c.

#116 KLNR on 09.06.17 at 10:39 pm

@#63 Am I doomed – continued….

Nope, not buying it.
If you bought more house than you can afford then used a heloc to get a couple prestige vehicles and a rental property YOU DESERVE NO SYMPATHY.
good for you though for pulling through back in the day.

Also, for all the doom and gloom on here there sure are a lot of smug buggers posting their financials. Does it make you feel good boasting like that?

#117 Fraud with RE on 09.06.17 at 10:44 pm

There is a lot of fraud with RE.

http://vancouversun.com/news/local-news/dan-fumano-vancouver-real-estate-developer-faces-mounting-lawsuits-extradition-to-u-s-on-fraud-charges

#118 common sense on 09.06.17 at 10:46 pm

Glad the P man pulled the trigger but such BS that it was about 2 years too late to put a stop to the insanity….

Now if Yellen has the word to raise rates 2 more times in 2017, we will really see a show.

Fun and games never cease to amaze..the rich get richer and the poor get poorer…same as it ever was.

#119 crdt on 09.06.17 at 10:46 pm

Was it not such a long time ago when the prevailing smarty pants were educating us all on why interest rates will not rise because it will make people sad… Looks like the sh*t sandwiches are being prepared for a whole bunch of new paradigm folks. There will be so many servings, in so many different ways. The buffet is prepped and the folks are starting to pour in, a trickle then a stampede.

#120 When the Whip Comes Down on 09.06.17 at 10:48 pm

108 Doug – so true. Just as I have been hearing folks being shocked with the move today. Odds were 50/50 of the move so it could have gone either way, so why so shocking? I guess if you just closed on a deal in one of the overvalued markets that is shocking.

#121 Happy Housing Crash Everyone! on 09.06.17 at 10:49 pm

108 Doug in London on 09.06.17 at 10:20 pm
So, what ever happened to all those genius commenters here who said the Bank of Canada would NEVER increase interest rates?

Who? The idiot high school drop out shysters? They are still here. They are stupid morons who make up stories without any fear of prosecution. The government should be arresting realtors for financial crimes. Oh the market will warm up in fall? Why? Based on what? Oh interest rates won’t go up! Yeah but you are wrong. Oh prices will go back up! Really? Why ? Based on what? Realtors make up stories they pull out of their ass and pass it off as fact. They should be jailed for these lies/made up stories/ wishful thinking. Truly scum of the earth.

#122 Leo Kolivakis on 09.06.17 at 10:51 pm

Gsrth,

The Bank of Canada is flirting with disaster:

http://pensionpulse.blogspot.ca/2017/09/bank-of-canada-flirting-with-disaster.html

More to come? Yes, more deflation and pain ahead for our beloved country. We are so screwed, it’s scary.

#123 Smoking Man on 09.06.17 at 10:52 pm

I’ll bet all the hurricane models don’t take into effect the moon.

From where I sit on a belong of a 1 star hotel on Daytona Beach I’m looking at the the moon. It’s pulling hard on Irma’s ass . Had a cold front push through today making a bee line toward Irma.

That phyco bitch will drift east after Miami. My relatives will be spared.

Dr Smoking Man
PhD in everything.

#124 D Apostrophe on 09.06.17 at 11:08 pm

With the Trump/Russia Thanksgiving Weekend coming up where does it take us financially? I, myself am pretty sure it’s gonna be worse than I believe it to be and that itself is pretty bad. Mueller’s hammer is gonna make it a Maison de Merde pretty soon. However, wondering how that will affect the domestic (CDN) and global markets from your pov, Monsieur Turner?

#125 45north on 09.06.17 at 11:14 pm

If the Aussies bought the average home, with land transfer tax they spent $1,634,633. Today that home’s worth $1,191,052 – for a loss of more than $100,000 per month. Welcome to Canada! The decline in that property has been stunning – 28.1%, and things continue to deteriorate. We’re not near the bottom yet.

welcome to the new normal! We feel it before we see it.

oncebitten: I’m trying to imagine what it’s like being a woman in Dubai.

It very much depends on what woman you imagine being. A neighbour’s daughter moved to Dubai, maybe 12 years ago. She teaches at the university, she just got married and is expecting her first child.

Double Down: “most of the parent’s” aren’t wealthy, or sitting on $200k in cash, and he typically sets up a HELOC or Mortgage in order for the BoM transaction to take place.

double down is right!

Ian: talking about the Bank of Canada raising interest rates: I think at this point they are throwing the rising FX rate to the wind. They don’t care, at least for now.

they don’t care but my question is “why now?”

Skin of her teeth: she sure did get out by the skin of her teeth

BimmerGirl: I’m in Development Engineering at a municipality in the west end of the GTA. I’ve been getting an uneasy feeling by the developers over the last year, but nothing like the panic of the last 6 weeks.

keep us posted

Making the Call: Realtors are seeing momentum, buyers are coming back, and all indicators are that the fall market will reverse the recent trend.

he said after coming back from siphoning gas at the mall

Jane Simpson: Our colleagues went and bought 3 properties back in 2015 and said that interest rates would stay low.

They are likely looking at another $20,000 for 2017 to 2018 in higher interest costs too. This total $30,000 will wipe out 40% of their net yearly rental income.

that’s gona leave a mark

Glengarry Girl: You are right on about the ripple effect and job loss. This is not going to end well, it can’t. The Canadian Housing Bubble, when it really bursts, will have effects that blogs like this one will write about for years.

It seems that the Bank of Canada and the banks have decided to burst the bubble. I’m guessing Bill Morneau (the Minister of Finance) sees that too but his response “income tax fairness for the middle class” is lame.

#126 For those about to flop... on 09.06.17 at 11:15 pm

Ian 50 pm
Flop, I predict we break a number of comments record tonight. Happy BoC Day Somewhat Unexpected Edition will do that.

Although I didn’t have the pleasure of knowing Boom, if the dogs I respect loved him that is more than good enough for me.

So if it’s ok, here is my code and tribute:

M48ON

M64WI

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

I’m sure someone will help me out if they are bored enough but I remember a lot of late 3 hundreds and some 4 hundreds,but off the top of my head I think one time Garth did a poll and it ended up late 7s early 8s?

Somewhere around there.Could be wrong.

Anyway you were one of the guys I was thinking of when I wrote that some of the newer posters got involved.

Every now and then the boss of this blog tells us that we are getting a bit rowdy and certain negative trends emerge in the comments section,I think it’s good every now and then that we naturally reset ourselves,try to get along a little better and remember that the person that you think is an idiot is at least on this blog trying to share their views on certain issues.

I intend to do “Boom Days” every September 4/5 and the new people on the blog can perhaps take the opportunity to get to know everyone a little better and maybe if anyone has been feuding it’s as good as time as any to bury the hatchet.

I can’t bury my hatchet yet as it looks like I might need it soon to do my “Pink Pumpkins being carved in Vancouver” posts…

M43BC

#127 the ryguy on 09.06.17 at 11:24 pm

At baseball tonight I mentioned the house Im renting in had a showing, “Ry why dont you buy a place?”

“Rates just went up again, will again soon, no thanks” I replied.

“Well duh, so get in now”

I don’t even know how to respond anymore.

Little update from Edmonton. The house Im renting has had 3 showings in 3 weeks. Price has gone from 419K to 399K. I texted the realtor afterwards asking how it went.

“Place shows well, its tidy, thanks for that, but they both want to look at other properties”.

Cant blame them, tons of properties available here, plus the neighbourhood is so far past diverse you wouldn’t believe its in Canada. But its our strength..or something like that.

#128 For those about to flop... on 09.06.17 at 11:34 pm

Ian ,I typed ” Who are you?” into the boxy thingy as that’s the one I was thinking of and over 900 posts came up for that one…

M43BC

http://www.greaterfool.ca/?s=Who+are+you%3F

#129 Paddler on 09.06.17 at 11:44 pm

The Vancouver Market has been hardly mentioned in the past week on this blog. I don’t see a big correction in Vancouver. A few of my former older neighbours started selling their homes finally. A few over asking one of them 200’000 over asking. Where is the correction in BC?.
I believe it when I see it. So far it is still juggling along.

#130 Oddball on 09.06.17 at 11:48 pm

What’s with all the negative waves everybody? The US News & World Report released a study in the spring that Canada is the second best country in the world to live in only behind Switzerland . Have a little faith baby, have a little faith !

https://www.youtube.com/watch?v=KuStsFW4EmQ

#131 DON on 09.06.17 at 11:52 pm

#99 akashic

Thanks for the link…all makes sense. Information is power.

#132 ww1 on 09.06.17 at 11:53 pm

In honor of “Boom Days” I’ll just leave this link here :

http://www.greaterfool.ca/2016/12/26/boomer/

#133 Costco Nation on 09.07.17 at 12:09 am

The dogs are especially bright tonight. Must be the solar flares. Because I refuse to blame it on a mysteriously originated relief or satisfaction. Anyhow. Seriously, you rock. Even the everless Realtors popping in seem unconvinced, like fulfilling an expected chore which everyone knows is pointless and everyone learned to patiently tolerate. It’s like a big colorful family… tonight.

So I have nothing to add. I feel ashamed of my negativism (which, too, vanished in this magical night), and I hope it won’t come back.

So here is a present to further detent the few remaining wisps of sorrow http://www.shortlist.com/entertainment/music/bonnie-tyler-total-eclipse-of-the-heart-power-ballad

A scientific explanation of the feeling good. Or, for feeling good.

(Careful closing the door)
Good night

#134 DON on 09.07.17 at 12:13 am

@Dolce Vita

The lack of a news conference was a duck and cover operation, caught us all off guard. (I remember one poster said the hike was a done deal). I take it now we have to expect the unexpected. I had a thought that they would make use of the recent uptick in GDP as the reason – even though it was consumer spending making the charge. What exactly do they see coming down the track? Worldwide rates are rising (europe is broaching the subject).

On a side note: my sister and her kids are going to Italy next spring. Other than the traditional rome, venice, would you suggest any other places, countryside, travel by car etc?

Thank you for bringing some balanced reason to this comment section.

#135 joblo on 09.07.17 at 12:20 am

Kanadian Real Estate, BofC, T2, BM.
Weapons of mass financial destruction!

#136 Fish on 09.07.17 at 12:22 am

Summer is over, welcome to fall fair time!!

#137 Sleazy Work on 09.07.17 at 12:30 am

@#100 Old Ron the Realtor

“In fairness to Dez, he is a good man with decades of service under his belt. ” – Old Ron the Realtor

Are you kidding me?? What a joke.

So was Dez doing his “decades of service” as an unpaid volunteer?? Please don’t try to hijack the concept of genuine public service with your sleazy concept of sales work.

#138 Ponzi Canada on 09.07.17 at 12:34 am

Is this Canada?

http://www.news.com.au/finance/economy/australian-economy/issuing-new-loans-against-unrealised-capital-gains-has-created-an-australian-house-of-cards/news-story/853e540ce0a8ed95d5881a730b6ed2c9

#139 Oft deleted much maligned stock picker on 09.07.17 at 12:38 am

#11 once bitten…… Life in Dubai is tenuous…..due to the extreme restrictions of religious law. It’s hard on locals…worse on foreigners ( Kurffer or Infidel…anyone non Muslim)who are officially as written in Sharia Law….’sub-human’ with no legal or human rights at all. Entering employment in Dubai you lose your passport, you may not leave without written permission from your employer. You must dress and act subservient at all times. You may not defend yourself against attack as this is considered an insult to Islam. A woman raped will be imprisoned for having sex outside marriage…..plenty foreign women are already in jail awaiting proceedings which their home countries have no say in….zero. A non married couple will go to jail for co-minglingling. You can be whipped or caned for cigarette, alcohol or gambling offences. You can go to jail for debt if your company goes bankrupt .Theses are just some of the considerations to keep in mind if you should think of moving to any orthodox Muslim country like Dubai. Don’t forget you are entering an extremely different culture…..you can go to jail for arguing over an inflated restaurant that bill….many have. I wouldnt take my wife there if they paid be triple untaxed USD…..life is too short.

#140 paulo on 09.07.17 at 12:49 am

Time to get with the program folks:
central banks around the globe are moving in unison to normalize interest rates, just as they moved to lower them to emergency lows a decade ago.
interest rates will be on a semi predictable trajectory upwards until normalization is achieved. this change will be implemented regardless of regional or specific market impact. the only question is what will be the floor support or planned target normalized overnite rate.
36 month out ill put my chip on high single to low double digit prime rates likely between 9% to 11%
depending on market driving circumstances/events.
in short the era of free money is over and the return to normal rates will come to pass much faster than most expect or have planned for. get your ducks in line.

#141 Another Albertan on 09.07.17 at 12:50 am

#122 Leo Kolivakis –

Nicely written.

As I commented last week, they do not ring a bell at the top. With the GTA real estate market, the tax changes, and now the rate increase, these are the closest sonic equivalents.

Everyone else’s mileage may vary.

#142 Ponzius Pilatus on 09.07.17 at 12:56 am

Bring on the 90 cents loonie.
Gotta go and gas up cheaply at the Costco in Bellingham.
Take along 4 extra canisters.
And then load up on cheese and milk.
Don’t ask any questions, Mr. Custom Man.

#143 fishman on 09.07.17 at 1:01 am

Jeez, this blog is starting to run hard. 1/4% BOC rate & its end times. I’m still back peering at the Kelowna show. We got clobbered the last time the Eastern Liberals descended down there. Kelowna Accord. Later the Reformer’s merged with the Progressive Conservatives Mckay gifted us a poison pill. He supported Harper under the condition unanimous support in the House for the Accord. Harper promised 100%vote. Cummins was in the airport in TO coming home, turned back to Ottawa & voiced nay in the House. Him & Harper never spoke after that. Later our Fearless Leader suffered a somewhat similar fate. Big problems now “like we said”. Too late. Two laws, two countries.Now their 2nd generation is hatching up some more pain & misery. Here’s my take after running my company for 31years.

Sprinkling : Ok: I pay family mainly through an arms length 3rd party (nature of the biz);

Dividend payouts: I”ve squeezed every last drop of blood & left the equity fully depreciated for the next generation to run on, but when I die kids have to sell to pay taxes. Or grind for years to keep afloat. If they increase capital gains they’ll be buried, just like me.

Retained Earnings: This is the one that’s going to cause weeping & wailing & gnashing of teeth for you young upstarts. We used to be able to average over 3 years. They stopped that which is why I went from sole proprietorship to company. In the trenches there’s big years & slow years. If Ottawa creams you on the good ones you’ll get too far behind on the bad ones.

#144 mousey on 09.07.17 at 1:11 am

Okay, so I was wrong about the BOC rate increase. But the bird was a budgie. Definitely right about that.

#145 Ponzius Pilatus on 09.07.17 at 1:19 am

Sir Branson waits out Irma in his wine cellar on his private island.
Somehow, to me that just does not seem right.
Maybe, class warfare is not a bad thing.
Let them eat cake all over again.
But then again, I’m just a stupid idealist, maybe.

#146 Fortune500 on 09.07.17 at 1:45 am

#11 once bitten, pretty normal. Like living in an international city. It’s not Saudi people. Canadians need to travel more. We are a food country but the world has a lot to offer.

#147 Fortune500 on 09.07.17 at 1:50 am

Good

#148 jane24 on 09.07.17 at 2:08 am

To pick up on yesterday, I am a woman who worked in the moderate UAE in Abu Dhabi for a few years and they are the best years of my life. As a female ex-pat you are top of the pile, treated like a queen wherever I went. Always served first in any queue, aways get the top service as a woman. In my one dealing with the police on a minor matter I was told that woman are created to by God to never lie so my testimony was worth more than the guy’s version. Five star living, a shame that I am now too old to go back.

My other point is constant disbelief that folk always believe that a commission salesperson is ever an expert on a sale!!! Obviously she needs you to buy to pay her own mortgage. Yes I also think that fraud has been committed and that once folk realise quite how much they have lost by treating a sale person as an independent expert, this will be tested in the courts.

For the RE agents reading this blog be very very careful about any investment claims you make in writing such as your emails and blogs. Your words may come back to bite you. We didn’t have so much written evidence in the 1980’s crash. You could hang yourselves by encouraging financial risks with your clients or putting lipstick on this pig. Market is going back now to the normal cycle. Accept it.

#149 Dan.t on 09.07.17 at 2:16 am

#22 Double Down
——

Your mortgage broker is exactly why BC only talk real estate. It’s all there is.

A guys working in the industry, peddling principal residence to customers, plus investment condos, presales, finding work arounds so dumb millennials can milk bank of mom, and buy a place they really can’t afford at worse possible time,

plus he and I bed all his real estate buddies have 2,3,4 or more properties and they all cite ” lack of supply ” as a why things will always, only ever, and ever go up and the shyster realtors all own multiple properties tell same story and can’t connect the dots

from 15 years of free gov money given to anyone who wanted a house, historic record low interest rates, plus incentives, plus real estate sponsored news, plus 0 down – 40 years, just buy and spend money on houses please , christy Clark’s yes BC is affordable with 2 mortgages to buy condos with no money policies….

Rates can’t rise fast enough. Hope the debt piggies sold a few “investment ” properties on the way up….

My last visit to BC, it was and still is gospel that real estate never goes down and the more investment properties you had the cooler you are…

the whole province repeats the same real estate “truths”… I guess when u live there a are subject to North Korea style real estate “news”propaganda, those “truths” are self fulfilling…

I guess we will see if it is different in BC. Any news on NDP Affordable housing policies? Is the policy to hide in bunker and hope interest rates and osfi blow it up? Or have they done anything?

#150 Karma on 09.07.17 at 2:33 am

#84 X on 09.06.17 at 9:13 pm
“The estimated impact of the new housing rules are expected to take 18% of buyers out of the market as per the mortgage guys.

What % of the market does every quarter point increase the BoC makes have on the market?”

Not sure how McLister of Ratespy.com came up with that 18% number, but for every 25 bps increase in mortgage rates, it reduces people’s borrowing power by ~2%. So in the past two months, on a given income, people can borrow only ~96% of what they would have got in early July.

#151 BillyBob on 09.07.17 at 2:59 am

#11 oncebitten on 09.06.17 at 7:15 pm

I’m trying to imagine what it’s like being a woman in Dubai. Serious question.

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

Well, the population is about 90% expats, so women from all over the world live there somehow. My former employer had about 24,000 flight attendants, most of them young women, and they certainly didn’t seem to suffer.

It isn’t Saudi Arabia. Different story.

Instead of trying to imagine, you could just go and see for yourself, you know.

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

#94 FLHTK on 09.06.17 at 9:49 pm
#11- that sounds amazing! I have a skill set that can be used around the world for for government…..where do I sign! Put in 10 years there tax free and come back and retire.

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

It’s not quite as easy as you make it sound, but it’s certainly possible. The key is being disciplined and not raising your living standards to match your new income. – a problem most Canadians have. Even when my income rose by many multiples I maintained a modest lifestyle, and shovelled the money offshore. Too many expats put their windfall into the local Ferrari dealership and then go home broke.

At any rate I will leave the topic digression alone and merely encourage folks to realize there is far more than one way to do things. Unless you believe that life’s purpose is to toil endlessly to repay a bank loan, then carry on.

#152 Eurovision on 09.07.17 at 3:57 am

Ha, genius! Load everyone up with a shit load of cheap dept, increase payments and voila, instant printing machine for banksters+GOV. Oh, and if you default, also win, win. No losers here..

#153 maxx on 09.07.17 at 6:41 am

#3 gary smith on 09.06.17 at 7:00 pm

“fist!

Waiting on the sidelines in the 604 with down in hand.

Soon!”

Wrong, Einstein. You’ll simply be a later casualty.

#154 the ryguy on 09.07.17 at 6:44 am

#150 Karma on 09.07.17 at 2:33 am
—————————————————–

The 18% figure is referencing the OSFI B-20 regulations, not the .25 bps increases.

#155 Stone on 09.07.17 at 6:56 am

I’m calling out the recency bias I’m reading on some comments. Alot of “oh no, the BoC rate cannot go higher as it’s just not possible or sustainable.” Reality check. Yes. Yes it can. And it will. It may not come as quickly as I would like but it’s coming. Also, central bank bond buying worldwide will drop off and stop. What then? Demand for bonds will dry up and rates will rise until they find the equilibrium that bond buyers are looking for. Cost of money goes up. You know, same as with residential real estate. Prices plummeting – who’s going to be a moron and buy into a plunging real estate market? Only the thick. The current recency bias is clouding many a sheeple’s mind. Time to wake up to the new reality. For those who prepared – no problem. For the rest of you – well, you’re screwed.

#156 Stone on 09.07.17 at 7:02 am

116 KLNR

Boasting? Yes. Extremely. If you only knew how much. LOL

#157 MF on 09.07.17 at 7:04 am

#139 Oft deleted much maligned stock picker on 09.07.17 at 12:38 am

Yup.

You said it.

Bubbling below the surface are these massive issues which are common for all these oil rich mid east states (what have they done with all that wealth btw?)

Canadians are naive. We often believe the rest of the world is like us, and will take what we see on the surface as face value.

#11 oncebitten on 09.06.17 at 7:15 pm

“I’m trying to imagine what it’s like being a woman in Dubai. Serious question.”

-GF has friends who work in this fake “paradise” as migrant workers. The female ones have to resort to having fun inside only when they can’t be seen. When out in public, you have to wear the full local female outfit.

All cannot wait to leave.

#146 Fortune500 on 09.07.17 at 1:45 am

It’s not Saudi Arabia, no…..but it’s close.

If I had money. This place would still be among the last places on earth I would choose to live. Sorry.

MF

#158 Ian on 09.07.17 at 7:17 am

#125 45north

I believe it’s because the BoC has assessed that bursting the debt bubble is more important than any other factor and now they are desperate. If by ‘why now’ you mean why did they wait so long, I couldn’t agree more. GTA was on a 21 year bull market in housing from 1996 to April. Why the Ontario rules and OSFI Happy Stress Test are in 2017 is beyond me. This should have been in place YEARS ago. And I agree fully that the Plozzer made a big error in 2015 by dropping twice, and leaving cheap money in the dog food bowl for so long.

#159 maxx on 09.07.17 at 7:17 am

#13 Rexx Rock on 09.06.17 at 7:16 pm

“So a few thousand lost big money on speculating on housing.Big deal,hide your assets, declare bankruptcy and start all over.Thats what people do,it happened in GTA before when they cancelled the Avro Aero.The ones who couldn’t make it just went to the bank and gave them the keys of their house.End of story,deja vous.”

The CF-105 is not a chocolate bar Rexxy.
Your financial recommendations absolutely reek of realtard and it’s “déja vu”, but won’t actually manifest.

#160 Ian on 09.07.17 at 7:48 am

Flop – 923 posts!!! That is epic! I love it.

Great tribute to Boom too Garth.

M48ON
M64WI

#161 Dolce Vita on 09.07.17 at 8:00 am

#134 DON

If Spring, a must is Carnevale in Venice. Before Lent 2 weeks of costumed debauchery. Key events: 1st Night (think Cirque de Soleil on gondolas in the evening), Feste delle Marie, Volo del Angelo (dove like costumed celeb. flies from atop St. Marks Campanile to the main stage at far West side of Piazza) and finally Fat Thursday where they kill a fake bull and historical rebels (also have a mini-Regata on the Grand Canal). Go their web site for events and days.

Don, it’s Italy, there is something here for everyone depending on your tastes. For example ricotta made in the Spring and best time to eat it, so go E. of Catania to the town of Ricotta or the market in Catania, Sicily. While there, go N. a bit to spectacular Taormina or S. a bit to beautiful Siracusa. All those have Mt. Etna as a backdrop. Go up the coast to Messina, cross over to Villa San Giovanni, take the train, second stop is Scilla – you just did Homer’s Odyssey of Charybidis and Scylla. Scilla is stunning and they have a swordfish fishery there, superb eating there.

Or go to Naples visit their Chiaia area, San Severo, hop a train to Pompeii and Heraculum. Go see the Bourbon Palace in Caserta just N. of Naples where 2 Star Wars were filmed (the palace), hop a ferry go to the islands of Capri, Ischia and Procida in the Gulf of Naples…again visually stunning. Or take the ferry to Salerno and work your way E. on eye candy Amalfi Coast visiting for certain: Positano, Amalfi and Ravello (Google Terazzo del’Infinito, Villa Cimbrone in Ravello)…and on, and on. Whoever said “See Naples then die” was not kidding

Spring still cooler in the N (by Italian stds. tropical for Canada). I would go Rome S. There are 100s of places besides the usual Rome (where I am typing this from), Verona, Florence and Venice.

#162 Dolce Vita on 09.07.17 at 8:04 am

#134 DON

Sorento, not Salerno. If Salerno, work your way W along the Amalfi Coast…hop to towns using the ferry there…highway congested at the best of times.

#163 Marlene from Victoria on 09.07.17 at 8:08 am

143 fishman said

“We got clobbered the last time the Eastern Liberals descended down there. Kelowna Accord.”

Wow. So you have a real problem with legislation offering a semblance of respect and equality to Indigenous peoples of Canada.

I guess you are pro-slavery and misogyny as well…?

And those ‘new’ round wheels, very baaad idea, right?

What a racist anti-deluvian pig you are.

Thanks for revealing yourself.

#164 Asterix1 on 09.07.17 at 8:12 am

“Toronto house prices likely already near bottom, RBC economist says”
https://www.thestar.com/business/2017/09/06/toronto-house-prices-likely-already-near-bottom-rbc-economist-says.html

Quotes from:
1. RBC economist Robert Hogue
2. Jason Mercer, TREB’s director of market analysis.

I barfed a little in my coffee this morning after reading this propaganda piece!!

#165 jess on 09.07.17 at 8:15 am

glengarry girl
“I could go on and on. 10 years later, even though you read in the paper that the US has recovered, I can assure you that it has not.”

=
main street vs wall street
TROUBLED ASSET RELIEF PROGRAM
Status of Housing Programs
Report to Congressional Committees
jan 2017 update

…“had disbursed $22.6 billion (60 percent) of the $37.51 billion Troubled Asset Relief Program (TARP) funds” that were directed at helping distressed homeowners who were impacted by the 2008 Wall Street financial crash and resulting housing bust.
…”the public learned the following year from the Government Accountability Office (GAO) that the Federal Reserve had secretly sluiced more than $16 trillion in almost zero interest rate loans to Wall Street banks and their foreign peers, many of whom were counterparties to their insanely leveraged derivative trades.

hardship fund – ongoing see chart 2b. left?
http://www.gao.gov/assets/690/681966.pdf

July 2011 gao report on the federal reserve
https://www.sanders.senate.gov/imo/media/doc/GAO%20Fed%20Investigation.pdf

#166 Darryl on 09.07.17 at 8:19 am

132 ww1 on 09.06.17 at 11:53 pm
In honor of “Boom Days” I’ll just leave this link here :
http://www.greaterfool.ca/2016/12/26/boomer/-
———————————————————-
That was Class stuff you did that day Garth.

#167 nick on 09.07.17 at 8:33 am

I noticed a lot of new listings since labour day were the same homes as previously taken down summer listings.

I think the active listings shown in August stats are a LOT lower than reality if you factor in people pulling listings only to relist a week or two later.

So while some RE agents are saying this is a good sign for the market, that just means September is going to be a massacre.

#168 Ponzius Pilatus on 09.07.17 at 8:44 am

#134 Don
My recommendation for Canadians traveling to Italy is always start in the North and then work your way down south.
Otherwise the culture shock will kill you.
Personally, I prefer the south, but the laid back lifestyle of the locals may not be for the average Canadian.
Warning:
Don’t visit Pisa. Big disappointment.
And don’t drive.
Take the trains and enjoy the vista.

#169 CJBob on 09.07.17 at 8:45 am

#155 Stone on 09.07.17 at 6:56 am
Alot of “oh no, the BoC rate cannot go higher as it’s just not possible or sustainable.” Reality check. Yes. Yes it can.
________________
Here’s the official statement from yesterday and then a quote from it:
http://www.bankofcanada.ca/2017/09/fad-press-release-2017-09-06/

“Future monetary policy decisions are not predetermined and will be guided by incoming economic data and financial market developments as they inform the outlook for inflation. Particular focus will be given to the evolution of the economy’s potential, and to labour market conditions. Furthermore, given elevated household indebtedness, close attention will be paid to the sensitivity of the economy to higher interest rates.”
——
The last sentence to me means that the Bank of Canada realizes that increasing rates takes a bite out of the economy and as a result once they have raised, for example, an additional 50 basis points they’ll need to keep a close out on the negative impact this is causing on the economy. This isn’t the same argument as Trudeau or the gov’t won’t let rates go up because we can’t afford it. It’s an acknowledgment that higher rates are a drag on the economy and therefore rate increases are taken as the economy can/if the economy absorb them. At 4.5 GDP growth it certainly can right now, but at some point the drag of housing and interest rates means rates aren’t likely to go much higher without risking the economy heading to recession. It’s a balancing act.

Note to the deflation guy: The Bank of Canada doesn’t just look at just inflation to reach a decision, they are balancing a number of indicators including GDP and unemployment numbers. Also one month doesn’t make a trend or in this case anything meaningful.

#170 nick on 09.07.17 at 8:51 am

Vaughan end-unit town likely needing some basic renos was listed for 799K in July. Price dropped 4 times since then. Current ask is 719K as of yesterday (10% drop).

No wonder sales are so low. Sellers are still holding out thinking they can get absurd prices for their shitty homes. Instead of just taking an offer back in July, they are just following the market downward because of stubbornness .

#171 Ret on 09.07.17 at 9:02 am

Unbelievable. Condo application obviously approved by Hamilton city Council. Only in Hamilton will you and your loved ones be a parking spot in the afterlife or a condo building site.

“Christ Church Cathedral must dig up hundreds of long-dead parishioners from the “asphalt hell” of a church parking lot before building a multimillion-dollar condo tower for the living.

The local Anglican diocese hopes to build a 12-storey, $50-million-plus condo and commercial development at 252 James St. N. to help the shrinking congregation remain solvent and pay climbing maintenance bills for the iconic, heritage-protected stone cathedral and associated school house.

But to do so, the church must first “reverentially” dig up, try to identify and relocate the remains of up to 400 people buried under the back parking lot.

“It’s time that we stopped parking on top of those people,” said the Very Rev. Peter Wall, rector of Christ’s Church Cathedral, in a presentation to councillors Wednesday. “They need to be released from asphalt hell.”

https://www.thespec.com/news-story/7539603-james-street-church-condo-on-cemetery-requires-remains-to-be-moved/

#172 KLNR on 09.07.17 at 9:12 am

#156 Stone on 09.07.17 at 7:02 am

Whatever makes you feel better LOL

#173 IHCTD9 on 09.07.17 at 9:13 am

#112 BS on 09.06.17 at 10:33 pm
The drama teacher speaks on the new tax policy today:

“Speaking of tax changes, I want to be clear: people who make $50,000 a year should not pay higher taxes than people who make $250,000 a year. We are always open to better ways to fix that problem, but we are going to fix that problem,” Trudeau said.

Can anyone come up with an example where a person who makes $250k per year pays a lower tax rate than a person who makes $50k per year? Someone please tell junior he is over his head and just let the adults run things from this point forward.

http://www.cbc.ca/news/politics/trudeau-small-biz-tax-changes-tweaks-1.4277510

No peep from the media on the bogus analogy. Can you imagine if Trump said something that inaccurate about tax policy?
______________________

T2 knows his fan base is not too smart. Anyone with enough brains to identify a steaming pile of BS never voted for him in the first place.

Honestly – let him pile it on a mile high, and let the repercussions sting like bee. Maybe things have been too good for too long in Canada.

We’ll surely find out, Trudeau is working hard to make us all equally poor, plus half the population has already done themselves in financially by their own hand.

It’ll be fun watching T2 and Co in his next majority mandate still trying to raise revenues while watching it stagnate, or even drop. Add another digit to the National debt clock.

#174 Dolce Vita on 09.07.17 at 9:20 am

#149 Dan.t

I like your supply theory, a lot.

Higher var. rate mortg. holders and BoM HELOC will start to see experince cash flow problems w/a few more hikes

#175 Leo Trollstoy on 09.07.17 at 9:29 am

This is meaningless, misleading drivel. There is no deflation in Canada. — Garth

Mark reaches in his nose and smears this blog with whatever he digs up

#176 Leo Trollstoy on 09.07.17 at 9:32 am

Donald Trump is getting what he wants. A low USD. America is Grate again!

https://www.theatlantic.com/business/archive/2017/01/donald-trump-dollar-dollar-ills-yall/513572/

#177 Yanniel on 09.07.17 at 9:33 am

Did CREA admit a negative house price growth y/y? I cannot find a reference to that. This is the CREA report for this month of August:

http://www.trebhome.com/market_news/market_watch/2017/mw1708.pdf

#178 IHCTD9 on 09.07.17 at 9:39 am

#151 BillyBob on 09.07.17 at 2:59 am

Well, the population is about 90% expats, so women from all over the world live there somehow.

___________________________________________

That’s probably all anyone should need to know. From what I understand, women don’t have to wear a burka, headscarf, veil etc… I also understand many Women have made some GREAT money working over there.

Surely it couldn’t be worse than suffering under the omnipotent patriarchy here in the West, no?

My lot in life has already been cast, but if I were 20 years younger Dubai would be a standout contender for a decade or more of my time. The locals actually share several of my personal views when it comes to social behavior, the laws don’t treat me like a bug just because I am a Male, and making a giant pile of tax free US dollars is just a straight up no brainer.

An unbiased, intellectually honest appraisal can come to only one conclusion…

#179 IHCTD9 on 09.07.17 at 9:49 am

#171 Ret on 09.07.17 at 9:02 am
Unbelievable. Condo application obviously approved by Hamilton city Council. Only in Hamilton will you and your loved ones be a parking spot in the afterlife or a condo building site.
___________________________

This stuff is pretty common likely. Back in the 80’s I helped dig up dead bodies from a once rural Cemetery that found itself under a newly planned city parking lot. 1800’s folks, the bodies were under the front lawn of a high school. Pretty shallow graves – scary shallow actually.

#180 Yanniel on 09.07.17 at 9:53 am

Duh, found it. It is on the detached section…in the 416 column.

#181 Glengarry Girl on 09.07.17 at 9:54 am

#113 Genbizx

This is only the beginning stage of a correction. Certainly everyone will be effected. If you know what is coming and are prepared, it may be a good thing. I rented 9 places over the past 10 years in the US at all stages of economic boom and busts. I am currently looking at 1 bed Condos waterfront in TO and there are many available from 2000 – 2300 per month. My husband may be accepting a job there shortly. I can tell you what happened in the US, but I think it will be much worse in Canada. We don’t have the ability to manipulate things as much as the US. First off, I downsized and have no debt. I bought a modest place in Canada, all three daughters live there and go to college and work. It can be used as a homestead if the shit hits the fan with no jobs etc. We are 100 % mobile and can go anywhere to work. We are living in a travel trailer currently. My husband quit working Jan 1st and we are traveling full time. We’ve been thinking this debt correction is coming for a long time now. Renters will also have their cycles during this correction. Rents will go up at first as speculators try to cover their losses. This is short lived and soon they will be forced to sell. More rental properties will be available as reluctant landlords are forced to rent. This will be manipulated in Canada with the vacancy tax. Rents will go down but not by much and Tenants will be treated terribly, stay strong. I joked that we were the Dirty Renters. People get angry when they are loosing money. It is ironic, but they will even blame the tenants. You ruined my property, you are taking advantage of me. I rented executive houses, lived there for less than 1 year, normal wear and tear. Every time the landlord tried to keep my Deposit, every time I got it back. Moving companies will become so shady and corrupt. If you know this you can protect yourself. We are only at the very beginning, there is still hope that it is temporary and things will improve by FALL. I think by Spring 2018 this will really get under way. It will be topic number one.

#182 IHCTD9 on 09.07.17 at 10:00 am

#163 Marlene from Victoria on 09.07.17 at 8:08 am

…I guess you are pro-slavery and misogyny as well…?

…What a racist anti-deluvian pig you are.

Thanks for revealing yourself.

_____________

Good grief, why don’t you just move the hell out of this country?

We don’t need your ilk, take a bloody hike.

The sooner you’re gone the better.

Thanks

#183 n1tro on 09.07.17 at 10:05 am

#10 Happy Housing Crash Everyone! on 09.06.17 at 7:13 pm

I would really want to know this shysters education level. I would bet they dont even have high school . It’s shysters like this who talk out of their @ss but have no understanding of anything. It’s shysters like this who would goto jail if they were giving financial advise. It’s sickening
————————————-
Des has an educated fellow. Graduated for Ryerson or “Rye High” as it was called when I was applying for universities. Degree in journalism and 6 weeks of real estate training is all one needs to give life altering financial advice. He was also a journalist too and we all know how they are viewed here. LoL

https://www.linkedin.com/in/desmondbrown1/?ppe=1

#184 IHCTD9 on 09.07.17 at 10:20 am

#110 Bob Loblaw on 09.06.17 at 10:21 pm

Think about it. If you bought a home for $1.2M this past spring with say an $800K variable rate mortgage, your payments just went up a few hundred a month. None of that extra payment goes to the principal. It all goes to the bank. By late 2018, expect another few hundred dollar increase, meaning your $4,200/month mortgage is now over $5,000/month for a home that’s losing equity daily.
____

^ This is the kind of math they need to start teaching in school starting in Gr.1. Forget talking about basis points and start talking cold hard cash:

@2.5 your 1.5 Million dollar GTA shack costs you 6700.00/month, you need to make 8700.00 to pay that much, your salary needs to be 105K/yr just to cover the mortgage

@3.5 your 1.5 Million dollar GTA shack costs you 7500.00/month, you need to make 9700.00 to pay that much, your salary needs to be 117K/yr just to cover the mortgage. You’ll need to ask your boss for a 6.00/hr raise to cover the 1% jump

@4.5 your 1.5 Million dollar GTA shack costs you 8300.00/month, you need to make 10,790.00 to pay that much, your salary needs to be 129K/yr just to cover the mortgage. You’ll need to ask your boss for a 11.50/hr raise to cover the 2% jump

The bank just called because your house is only worth 1.2 now, and they need you to pony up 300K to keep the load shiny side up etc…

#185 John of Grant on 09.07.17 at 10:20 am

#49 King Dong

Kim Ding Dong? More like Kim King Dong! That guy has the gonads to hold his ground on the nukes. No war will ever happen between N.Korea as a result of it.

I promise you, just watch…once N.Korea nuke program is fully operational they will begin to open their country to more trading and even foreign capital with time.

The nukes are the security they need to deal safely with the capitalist hawks. N.Korea will be more open and it’s GDP will increase in the coming decades. Just watch and remember my simple yet accurate predictions.
————————————————————-
The nukes are not security to deal safely with the capitalist hawks. They are security to keep the capitalist hawks at bay for Un’s million man march into Seoul. Just watch and remember my simple yet accurate predictions.

#186 Glengarry Girl on 09.07.17 at 10:22 am

Let’s assume that the Housing Bubble is deflating, data and feet on the ground comments show this to be true. By Spring of 2018 there will be no doubt as the effects are in full swing. What is the next BUBBLE? In the US it was Post Secondary Ed and Health Care. What will it be in Canada, a socialist country?

#187 Gravy Train on 09.07.17 at 10:27 am

#54 King Dong Redux on 09.06.17 at 8:20 pm

“F38ON
37-28-35”

Va va voom! Yahtzee! Are you single? :)

Or were those your geographic or geodetic coordinates? :(

M60NS

#188 dudestolemysandwitch on 09.07.17 at 10:34 am

Love BC prices love it, regulators are against the wall, more regulations, higher interest rates, Toronto kaboom.

#189 NoName on 09.07.17 at 10:35 am

Google trends – real estate bubble

2004-present
https://trends.google.com/trends/explore?date=all&geo=CA&q=real%20estate%20bubble

last 7 days
https://imgur.com/a/Rsuyl

#190 Keith in Calgary on 09.07.17 at 10:41 am

While the housing decline is not over out here, not by a long shot, housing is not bouncing back in Calgary…….ever.

Oil is done, like dinner. There is no waiting for ti to bounce back, like we always did before.

Something like 80% of world oil production goes into transportation needs, and a portion of that gets distilled into kerosene for Jet-A. The rest is used by vehicles and ships.

With vehicle manufacturer’s openly stating that in XX years they will be all hybrid or electric, and some countries now banning oil exploration, IMHO it’s just a short matter of time. While we may have peaks and valleys over the next couple of decades, in my life I will witness the slow demise of fossil fuels. And with that, the economy of Alberta.

#191 Renter's Revenge! on 09.07.17 at 10:44 am

#187 Gravy Train on 09.07.17 at 10:27 am
#54 King Dong Redux on 09.06.17 at 8:20 pm

“F38ON
37-28-35”

Va va voom! Yahtzee! Are you single? :)

Or were those your geographic or geodetic coordinates? :(

M60NS

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

It’s a trap!

#192 Joe2.0 on 09.07.17 at 10:44 am

The banks know exactly what they’ve been doing by waving the cheap money carrot combined with creative pier pressure driven ad campaigns.
Plus the whole borrow money against your home kicker.
Now that everyone’s bought into the lie and put their necks in the financial noose its time for the banks to tighten the rope.
They have nothing to loose with protective policies put in place.
Rinse and repeat.

#193 conan on 09.07.17 at 10:49 am

“Can anyone come up with an example where a person who makes $250k per year pays a lower tax rate than a person who makes $50k per year?”

I will try, but be warned, this is going to be very Micky Mouse. Worse then the Donald, even.

If I owned a business and make 250 k a year. I am going to use a corporate structure to get my tax rate to almost zero.

1) The 250 K stays within the corporation, until I have to move it.

2) Anyone closely related to me, like my spouse or my children, is getting an income. This will be equal to the maximum allowable income before taxes have to be paid. I will use RSPs etc wherever possible to maximize this limit.

3) I am going to structure my corporation so that most of my daily needs like; food, shelter, entertainment, vehicle, are all covered by the corporation and expensed to it. Heck, I can do a per diem, if I want to.

4) Anything left over is going to be distributed in the way of dividends, to above mentioned close family relatives, My accountant thinks I can pay my cat a dividend, but that’s too cheat mode for me.

5) So any thing left over goes to me. I max every government program available to defer taxes etc.

The end result is that I am living like a king, paying almost no taxes.

Over the long term I can retain earnings within the corporate structure, and then perform the ultimate coup de grâce. Specifically, an Individual Pension Plan, and literary move millions of dollars into an executive pension plan.

The Liberals have done a less then stellar job detailing the problem that they want to fix. The Conservatives are all over this error, but in the end, the Liberals will come out fine. They will tweak things for Dr’s.

#194 SNCF 2-D-2 Motrice on 09.07.17 at 10:52 am

Hey Garth –

I looked up that survey you mentioned about Canadians having an increasingly hard time managing their bills. An interesting article as well as some other stories linked to it.

My takeaway is that recent strong economic growth here in Canada was largely due, as was reported at the time, to strong consumer spending which may already be fading. Certainly these articles paint a picture of tapped-out consumers struggling to manage their monthly bills. How much more they can spend is questionable, and how the economy can maintain its recent blistering growth without the consumer is certainly open to question. On this basis further rate hikes by the BOC may or may not materialise, and the recent run-up in CAD may reverse itself before too long.

Call me a bear on CAD and the domestic economy. When non-government workers are seeing annual wage hikes in the 1% range, if even that, it’s hard to argue in favour of a consumer-led recovery. Coupled with absurd debt levels – because that’s what they are – and overnight rates may continue very low far longer than many think.

#195 jeff on 09.07.17 at 10:53 am

John Pasalis: “Sales typically fall from July to August. They are up this year and moving closer to sales levels we saw in 2014 and 2015”

The bears have an edge, but let’s not call victory. Like the RateSpy CEO said, only if Poloz increase rates by another 1.00% will it definitely start hurting.

He must mean that prices would then fall below 2016 levels, hurting many buyers, not just those would bought in May-April.

#196 NoName on 09.07.17 at 10:53 am

One more bubble, i was wonderin why amazon is looking for second store to buy.

e-commerce bubble
Chart page on 3

http://www.talkmarkets.com/content/stocks–equities/is-the-e-commerce-bubble-in-a-mania-stage?post=146208

#197 Ian on 09.07.17 at 11:02 am

#186 Glengarry (Glenross) – bubbles

I think the US is on three bubbles, the 2000 stock market, 2007 housing, and now the 20 trillion ‘bubble of everything’ that includes auto and student debt and I believe will lead to a USD crisis.

I think on the Canadian side we ‘doing it all at once’, in the sense that mortgage, credit card, HELOC, auto, student, and likely the stock market all might get cleaned out in one go. Since none of it has corrected in phases like the US, it’s likely it all gets blown up at the same time. So call it ‘the bubble of everything.’ It’s well underway now. From now until the end of the year will be epic.

I feel Canadian bank stocks are going to get murdered in the next six months / year.

#198 waiting on the westcoast on 09.07.17 at 11:04 am

#134 Don re: Italy

My family is from Northern Italy and I try to go back every couple of years. If this is their first trip, they won’t have much time beyond seeing the major sites. I would recommend Venice, Florence, Rome, and Naples. I would try to squeeze a week of the trip into seeing small towns around one of the cities (ie, rent a car and visit San Gimignano, Arezzo, Cortona, etc, near Florence).

Personally, when I visit, I would only focus on one city and the town’s around it but I have seen the main sites a few times already. I prefer the small towns and countryside. Every place in Italy has a massive history.

#199 n1tro on 09.07.17 at 11:14 am

#187 Gravy Train on 09.07.17 at 10:27 am
#54 King Dong Redux on 09.06.17 at 8:20 pm

“F38ON
37-28-35”

Va va voom! Yahtzee! Are you single? :)
—————————————————-
Don’t jump the gun…

37-28-35 on >5’8″ – Good!
37-28-35 on <5'2" – Pass.

#200 n1tro on 09.07.17 at 11:16 am

37-28-35 on >5’2″ but <5'8" – Unknown Knows?

#201 torontorocks on 09.07.17 at 11:32 am

That dog is cute.

And Mark’s mind is more than a little fried, hes also full of shit.

#202 James on 09.07.17 at 11:37 am

#89 Smoking Man on 09.06.17 at 9:35 pm

83 rknusa on 09.06.17 at 9:11 pm
I have been getting daily listings for a specific geographic area for the last 6 months or so now, namely the GTA and those daily listings have more than doubled today over previous max number of listings for a day

looks like there is a panic to sell
………………………..

Like I said a huge number of boomers want out. All their loot is in a house. Huge demographic. They know kids can’t afford to buy their zillion dollar bungalows.
For anyone that reads the comments section and follows the great smoking man with an incredible alien ability to see the future. I let you all know in feb I was selling after a bit of reno. Sold at April peek.
Why you didn’t sell? greed or procrastination. You’re screwed now.
Listings are about to explode. IT contractors TFW and the dr tax is going to bury you. Take the hit now. The one coming after this will blow your mind.
And now that CRA knows who I am and catalog every post. I would love to tell you the bet I made when Poloz did the 180 a few months back. But sadly I can’t.
………………………………………………………….

You can not tell the future if you could you would not have lost your IT position by being an ass. Dejectedly you had to sell. After telling all of us you were unemployed and for that matter unemployable and running out of options for loot. Rejected by the bank for supplementary money you had to discharge the abode. It was fortuitous for you that you seized the moment. So please don’t express us how unfortunate we all are. Quite a great deal of we “dogs” quite frankly don’t give a shit. I own my home outright and have other investment revenue working for me. So I and many others can enjoy our humble abodes and are not apprehensive about the landlords kicking us out or selling their property and having to move from place to place. Constant moving is not healthy for your moral fibre. So enjoy your hotel to hotel to hotel Casino excursion until the money runs out. You will crash somewhere and my presumption is right back in the GTA. :)

#203 oncebitten on 09.07.17 at 11:45 am

Thank you

#139 Much Maligned stock picker
#125 45North
#146 Fortune 500
#151 BillyBob
#157 MF

for your insights re: life in Dubai for women. If I were a young fella with the right skill set and a taste for adventure I might consider it, but ’tis not so.

Thank you also Jane24 for sharing your first hand experience re: living in UAE.

I know someone that lived in Qatar, but each country is probably a little different. Apples/Oranges.

#204 D on 09.07.17 at 11:46 am

These rate increases are being made based on data which is months old and outdated. The “growth” referred to by the BOC was in the real estate sector. Something tells me as the real estate sector continues to crater furture gdp reports will be absent of any “growth”. Then the bank will be faced with a tough decision, whether to cut rates and crater the dollar (which would further stimulate the manufacturing sector and may lead to growth) or ride out the storm and let the debt system cleanse itself.

#205 MF on 09.07.17 at 11:57 am

Thanks for the tribute to Boom! Flop.

He was a great poster and contributor the blog. As I have mentioned a few times, when I was watching my portfolio tank in 2015 his calming posts were incredibly reassuring. You could feel he was passing on years of experience/knowledge.

He is missed.

M34ON

#206 Marcus on 09.07.17 at 12:02 pm

Branson’s Neker Island totally destroyed by Irma. Branson and staff survive in wine cellar. Total destruction with 20 foot storm surge. Not a building left standing. Miami is in for it.

#207 TheDood on 09.07.17 at 12:02 pm

#11 oncebitten on 09.06.17 at 7:15 pm

I’m trying to imagine what it’s like being a woman in Dubai. Serious question.
_______________________________________________

Although a patriarchical society, there are alot of western professional women (single and married) working across nearly every industry – medical, engineering, teaching, technology, media, etc.

Rules and laws are different there, if you know and respect them and are open to learning new culture, traditions, etc, you will have no issues. If you’re good at what you do, you can expect to do well financially and live a lifestyle unavailable to you in Canada.

#208 Shawn on 09.07.17 at 12:06 pm

Why have Canadian financials sold off since the BOC began to hike rates? Is the market disagreeing? I thought higher rates were good for bank earnings. I guess not if they tank the economy. If banks continue to sell off the market may be suggesting this is a policy error.

#209 Dissident on 09.07.17 at 12:26 pm

Just sent in our mortgage conversion papers to lock in that variable rate.

Auto-reply is “Please be advised that we are receiving a high volume of requests at this time and there may be a longer than expected turnaround time for response”. Of course you are.

#210 Russia problem on 09.07.17 at 12:36 pm

You are about to hear a lot on the subject. — Garth

—-

Source, links please.

#211 Stan Broock on 09.07.17 at 12:41 pm

I read this: ‘wealthy small business owners’ and then stopped reading.

Wealthy small Business owners? What kind of idiot frankly can come up with that?

KELOWNA, B.C. — Justin Trudeau insisted Wednesday that his government won’t back down on a controversial plan to end tax provisions that it says give some wealthy small business owners an unfair advantage.

https://ca.finance.yahoo.com/news/pm-willing-improve-small-biz-182228085.html

How about capital tax gains on residential real estate, J2?
How about increasing tax rates for stock options for your friends on Bay Street?

#212 Stan Broock on 09.07.17 at 12:46 pm

The incompetent drama teacher wants to be clear folks:
——————————-
“I want to be clear,” Trudeau told the assembled MPs.

“People who make $50,000 a year should not pay higher taxes than people who make $250,000 a year.”-

That’s it people, idiocy and incompetence combined.

Show me ONE business person with $250,000 income that pays lower taxes than a full timer with 50 k.

True idiocy.

#213 Ian on 09.07.17 at 12:51 pm

#186 Glengarry

I think the US is in a ‘bubble of everything’, which would be phase three in recent years. First was the stock market in 2000, then housing in 2007, and now a 20 trillion dollar problem that includes auto and student debt, and crazy trade deficits.

Since we didn’t go through these phases, I think Canada is in a ‘bubble of everything’ which includes mortgages, HELOCs, credit card debt, LOCs, and probably auto and student as well, and the stock market. So it’s not good.

I think Canadian bank stocks are going to get murdered in the next six months / year.

#214 Victor V on 09.07.17 at 12:52 pm

Interest rate hike could give RBC $300M boost over 5 years, CEO says

https://www.thestar.com/business/economy/2017/09/06/interest-rate-hike-could-give-rbc-300m-boost-over-5-years-ceo-says.html

#215 Stan Broock on 09.07.17 at 12:55 pm

Trudope has to go back to school, I bet his math grades are not good.

king.darrellking.darrell2 hours ago

Trudope clearly didn’t read his own government’s proposal – perhaps 57 pages were just too much to digest. His comments make the heroes of our economy into villains. Spreading misinformation by claiming that people making $50K per year pay more taxes than evil business owners who make $ 250k? Let’s analyze: $250K “sprinkled” among 4 family members that would create 4 tax payers making $62.5K. Their total tax remittance at the reduced dividend tax rate would still be approx $ 75K!! How are they paying LESS tax than someone earning $ 50K? This is becoming a witch hunt for people who risk everything to open a business, pay corporate taxes, payroll taxes, personal income taxes, and employ Canadians.

#216 Nr of sales up hard on 09.07.17 at 1:27 pm

#129 Paddler
I don’t see a big correction in Vancouver.

Vancouver has a serious supply problem at the moment.
Number of new listings is falling, yet number of sales is up hard from last year.

So sellers disappeared, buyers stayed.
The result is predictable.

The nr of sales in aug’17 compared to aug’16:
+26% / +20% / +23% for detached/apt/attached.

The nr of new listings in aug’17 compared to aug’16:
-1.1% (And a -19.2% compared to previous month.)

So there you have it, cold numbers saying: more sales, with fewer new listings.
What else can you expect?
But yeah, it doesn’t match the narrative of the blog I guess, so not mentioned much.

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

#217 under the pressure of cycles on 09.07.17 at 1:36 pm

#99 akashic records on 09.05.17 at 10:45 pm

How about this explanation for “global warming”?
USCG ice cores

https://www.youtube.com/watch?v=GxERTlbAo7g&list=PL3ducBA0aeVEraiotz7u6uGsEgM1JmrAV

#131 DON on 09.06.17 at 11:52 pm

#99 akashic

Thanks for the link…all makes sense. Information is power.

—-

Extremely interesting that ice cores collected around the world (over 420 thousands years) show that high CO2 levels follow warming cycles, instead of leading to warming, throughout the history of all periods of global warming.

Revealing the climate change cycles, economic cycles and cycles of human conflicts trough historical data with ideological neutrality is an eye opening concept.

Gregg Braden describes that we are now living in the convergence of 3 massive cycles, observed in history. Being aware of these cycles helps us to understand all the major trends and events we are witnessing right now, in an unusually broad context.

As you say, suddenly it all makes sense, which is hardly a common experience these days.

#218 IHCTD9 on 09.07.17 at 1:36 pm

#190 Keith in Calgary on 09.07.17 at 10:41 am

With vehicle manufacturer’s openly stating that in XX years they will be all hybrid or electric, and some countries now banning oil exploration, IMHO it’s just a short matter of time. While we may have peaks and valleys over the next couple of decades, in my life I will witness the slow demise of fossil fuels. And with that, the economy of Alberta.

________

The vehicle manufactures better get ready for huge massive drops in sales then. There will be no big influx of pure electrics on the road anytime soon – that much is sure. Ontario hydro prices by the mid 2020’s will be $.30+/KW once the Wynne debt for discount swap is over and the bill comes due. PE’s just don’t work in the cold, snow and dark, or for long distances. Sure in the GTA they’ll be tolerable, outside the city – forget it.

I agree the price of crude will be low for long time yet, but I believe the issue is the massive 10 year old proven US tight Oil reserves. They probably have more proven recoverable bbls than Saudi does. Global Oil consumption will need to skyrocket, or supply crippled before the price gets good again. Maybe if everyone in China and India buys a car, but I can’t see any other plausible way the situation will change. WCS is heavily discounted dirt cheap bottom end product to start with.

As far as Alberta’s economy goes goes, look towards Venezuela to see what happens when Oil revenues dry up and you’ve got a bonehead in charge.

#219 aa6 on 09.07.17 at 1:40 pm

For Canada, it is probably smart to deal with our bubbles, while the US economy is roaring forward.

#220 What changed at BoC? on 09.07.17 at 1:41 pm

Let me start by saying I am glad the BoC has raised its interest rate in the last couple of months, as it was way overdue to start to normalize rates after the 2008/9 recession. The debt levels were reaching outrageous levels.

What I haven’t seen discussed really though is the “why”? Poloz has been a strong dove since he came in. He cut the interest rates when the oil price fell like it was nothing. He has constantly talked down the economy and really seemed to want a low dollar. This was consistent for over the last 2.5 years.

Then starting in June it was a 180′ about face, and no one saw it coming. So why? Yes, there was increasing data about strong 1st half, but with inflation still low, he could easily have indicated more time was needed to see if rates really needed to rise. Raising rates even this little bit is likely to completely derail the “growth story”, with most of that being driven by consumers racking up debt, and surely that is a concern for Poloz.

The PM doesn’t want rates to rise and risk any element of the people being happy with sunny ways and all. Items that are mentioned, like the effect of Gov’t stimulus, and the potential inflation with Ontario $15 min wage, have been known for some time. Nothing there is new.

So, what changed at BoC? Why the switcharoo? What aren’t they telling us?

#221 Alistair McLaughlin on 09.07.17 at 1:44 pm

#208 Shawn, higher rates are not good for bank earnings. Low rates are good for bank earnings. It’s why we’ve seen record low rates and record high bank earnings repeatedly over the last ten years. The two go together.

Banks make money on the spread between the rate they pay for funds (in the bond market, on savings accounts) and the rate at which they lend out. While that spread does tend to increase when rates rise, it can’t make up for the reduced loan volume that is sure accompany higher rates. Low rates mean higher loan volumes, fewer bad loans, thus higher bank profits. Higher rates mean the opposite – lower loan volumes and more bad loans.

The spread increases along with the risk, but usually not enough to completely offset the lower loan volumes that go with higher rates. Thus, higher rates are bad for bank earnings.

#222 Farquad on 09.07.17 at 1:52 pm

locked in a 5 yr rate a couple years back at 2.62
looks like it will pay off after all.

#223 Happy Housing Crash Everyone! on 09.07.17 at 1:57 pm

#148 jane24

Excellent point. Dirty shyster realtors making claims of prices going up will have egg all over their stupid faces….just like the realtor in Garth post. Realtors just making guesses with nothing to back up claims. They are horrible evil monsters

#224 Tazi Bnu on 09.07.17 at 1:59 pm

#134 DON on 09.07.17 at 12:13 am
@Dolce Vita

On a side note: my sister and her kids are going to Italy next spring. Other than the traditional rome, venice, would you suggest any other places, countryside, travel by car etc?
____________________________________________
San Gimignano is a beautiful spot to see the Tuscan countryside. However, it’s a pedestrian town, so plan for a lot of walking. Florence is a nice base to explore Tuscany.

The Bay of Naples area is good too. You can climb Vesuvius, go see Pompeii, and have wonderful pizza at a beach.

Venice is a lovely place, but expensive and not really kid friendly. I went with a travel group, so I don’t know if a car would be handy. In Rome the subway system is inexpensive and very handy for all the main tourist places, except the Vatican. That’s all I know from personal experience. I hear the Leaning Tower of Pisa is highly overrated, though I’ve never been.

#225 X on 09.07.17 at 2:02 pm

“Now we have a situation where a single woman who has two children, aged 12 and 14, and has the same amount of income as a married woman who has children who are 19 and 20 can find herself in a higher tax rate. So we see no reason why that should be so.” Morneau

Ummm….isn’t one getting way more in the form of the baby bonus (or whatever it is called). Why not be able to have 2 able bodied children work in the family business.

Will the baby bonus payments be equalized for fairness….wait a minute isn’t that the way it was before. Oh, so the Liberal term of fairness is to create unfairness.

“We’ve had a 300-per-cent increase in the incorporation of professionals in the last 15 years,” Morneau

Umm yeah, alot of professionals weren’t allowed to incorprate before that, so those numbers over that period of time pretty much make sense. What is the increase over the past 3-5 years…not so much is my guess.

How about the same personal tax rate for all in the name of fairness from the LIberals. Oh….fairness was your marketing pitch to cover up for your revenue shortfall after your spending spree.

Just like the budget will balance itself and the 1%ers will make up the tax shortfall.

I look forward to how the Liberal plan to cut down on other industries where procedures and insurance payments are not tracked, such as the restuarant industry (cash only restaurants) to ensure tax fairness for all self employed. Fairness does apply to all right….

#226 played like a violin on 09.07.17 at 2:02 pm

#211 Stan Broock

How about capital tax gains on residential real estate, J2?
How about increasing tax rates for stock options for your friends on Bay Street?

—–

Why do you let yourself played like a violin?

That’s exactly what politicians want, turning people against each other and exploit it.

#227 Dups on 09.07.17 at 2:18 pm

BOC is smoke and mirrors with their rate hikes. Our economy is not as strong as they say it is. Fake it until you make it, that is the BOC approach.

http://business.financialpost.com/opinion/economic-storm-clouds-loom-behind-canadas-upbeat-growth-reports-and-rate-hikes

Cheers

#228 Leo Trollstoy on 09.07.17 at 2:18 pm

DELETED

#229 Ian on 09.07.17 at 2:21 pm

#220 BoC reversal

Good question.

1) With three rises in the US since Trump won, and likely continuing, BoC had to get in line at some point. June was starting to feel really uncomfortable with the BoC sitting out two US rises.

2) They might be coordinating with the US Fed to blow up both countries’ debt bubbles.

3) Now that GDP growth is much stronger, this gives them more cushion to raise.

4) The growing non-monetary clamour over the housing debt crisis. With the Ontario rules in, empty condo AirBnB rules, and OSFI Happy Stress Test coming, they either a) want to be in sync with that trend, or b) are being coerced to be in sync with that trend behind the scenes.

#230 Shawn on 09.07.17 at 2:24 pm

The taketh is the BOC taking away investment gains in the international portion of one’s portfolio. A strong $CAD and negative TSX is the worst case scenario for a Canadian investor.

I do think this could be short lived, however. US GDP growth and consequently the FED could surprise much the same way the BOC did. USD could rip higher with the S&P500.

I would be buying the S&P500 and USD here. Short gold, bonds and oil.

#231 Ian on 09.07.17 at 2:33 pm

#220 Boc Reversal part 2

“The PM doesn’t want rates to rise and risk any element of the people being happy with sunny ways and all”

I have been thinking about this a lot. I’m thinking for the Liberals it’s ‘pick your poison’ time, meaning they blow things up now in the hopes that things are OK for 2019’s election, or wait and allow things to get worse. So if they are influencing the BoC, it might be the former. Or, they are leaning on the BoC hard to NOT raise, and Plozzer is ignoring them.

That interaction between the Feds and BoC is fascinating, I’d love to know what’s going on behind the scenes.

#232 CJBob on 09.07.17 at 2:47 pm

#230 Shawn on 09.07.17 at 2:24 pm
The taketh is the BOC taking away investment gains in the international portion of one’s portfolio. A strong $CAD and negative TSX is the worst case scenario for a Canadian investor.
___________________
I hedge a portion of my foreign investments which is very easy to do with ETF’s.

I’m not saying I saw the increase of the CAD$ coming, I simply do it to reduce the volatility of my returns which allows me to invest a higher percentage of my total in the market and still sleep at night. It’s worked out well this quarter but obviously could have gone the other way.

I’m surprised this topic doesn’t come up more often, I haven’t seen Garth comment on it much in the past few years.

#233 World Traveller on 09.07.17 at 2:55 pm

The Liberals are becoming successful in turning Canada into Spain. Where being self employed is frowned upon and the red tape and taxes are enough to make one cry. So congratulations Libs on future high unemployment, a youth that will leave the country after being educated here and most likely a bloated civil service, shall I say, Buenos Noches Canada?

#234 oncebitten on 09.07.17 at 2:58 pm

#207 The Dood

Thank you for the reply.

I’m past the age of making a big life change, but I still enjoy hearing about other’s experiences. Glad it worked out for you.

#235 IHCTD9 on 09.07.17 at 3:04 pm

#225 X on 09.07.17 at 2:02 pm

I look forward to how the Liberal plan to cut down on other industries where procedures and insurance payments are not tracked, such as the restuarant industry (cash only restaurants) to ensure tax fairness for all self employed. Fairness does apply to all right….

___________________________

All this talk about “fairness” takes me back to attending kindergarten. It’s a Pandora’s box of endless pouting and bellyaching. Anyone who’s raised kids knows what I’m talking about.

Now we’re going to have to listen to the Trudeau bootlickers at the CBC opining about what fair really is until the end of time.

I’m glad we have a leadership so utterly concerned about “fairness”, although I think you’ll find every attempt in creating it results in additional funds being directed into the Federal coffers.

#236 SimplyPut7 on 09.07.17 at 3:16 pm

After the largest Atlantic hurricane on record hits Florida on Sunday, and if Canadians don’t have enough insurance to cover the damage to their investment properties that are probably sitting on their HELOCs; will these people technically be bankrupt after their banks demands the HELOC paid back but the home on the investment property is now worthless?

Does Florida have an insurance program similar to Tarion to cover losses?

http://www.cbc.ca/news/business/canadians-real-estate-1.4216906

http://www.ctvnews.ca/canada/why-canadians-who-own-florida-homes-need-both-hurricane-and-flood-insurance-1.3578898

#237 Dolce Vita on 09.07.17 at 3:28 pm

#216 Nr of sales up hard

Those numbers are benchmarks probably a quarter behind in reality. Go read how they are calculated & report the math back to the rest of us.

Go to Zolo.ca for up to date MLS numbers and My Realty Check to view how list prices are doing and have been since Oct of last year. Updated daily.

Quarterly $ sales for Vancouver are down 50%. Unit sales of Town and Detach down 60%. Condo unit sales about as bad. 2700+ units listed for that city.

Go to Zolo.ca & compare May 17 data to current day data. Do the same for the other cities, equally dismal. That will wipe the smile off of any YVR RE cultist…and shhh, they still think all is well.

#238 Keith in Calgary on 09.07.17 at 3:30 pm

#212 Stan Broock

I’m guilty as charged. Ran a small business for 6 years and did exactly that. Measured in % of course.

#239 Tazi Bnu on 09.07.17 at 3:30 pm

#103 Mark on 09.06.17 at 10:07 pm
“1% is still an emergency rate. If you could borrow at that and invest in inflation you’d be printing free money.”

Only problem is, inflation was 0% month over month in the most recent report, and only 1.2% year over year. Trending downwards at an accelerating rate due to the strengthening CAD$ and falling consumer demand due to the RE bubble implosion.

So a 1% “policy” interest rate may seem high, but historically, risk-free T-Bills have not sustainably offered a yield above that of inflation, and inflation is rapidly turning to deflation.

This is meaningless, misleading drivel. There is no deflation in Canada. — Garth
____________________________________________
Lol, Mark just accept that your understanding of economics is lacking. You so badly want to be vindicated with a rate cut that you are completely misunderstanding and misrepresenting the data.

Also, There’s no sane economist making the call for deflation. If you want more evidence just go ask a senior if there’s deflation.

M29ON(I think I did that right)

#240 Another Deckchair on 09.07.17 at 3:33 pm

Personal business incorporations.

20+ years ago, I contracted to the Federal Government, as a sole proprietor. I had to do the olde appoint a security officer (me) and do the finger printing and signing.

Now, once again, I’m contracting to the Federal Government, doing the olde fingerprints, etc, etc. Same group I was contracted into 20+ years ago, incidentally.

Difference? I now HAVE to be Incorporated – they ask for the incorporation papers.

So, OF COURSE the number of personal corps are climbing, when YOU CHANGE THE RULES. Bimbos.

#241 Gravy Train on 09.07.17 at 3:45 pm

#193 conan on 09.07.17 at 10:49 am

“1) The 250 K stays within the corporation, until I have to move it.”

The Canadian-controlled private corporation (CCPC) pays tax on the 250 grand, but may be eligible to claim the small business deduction (SBD). The SBD reduces Part I tax that the corporation would otherwise have to pay.
https://www.canada.ca/en/revenue-agency/services/forms-publications/publications/it458r2-archived-canadian-controlled-private-corporation.html

“2) Anyone closely related to me, like my spouse or my children, is getting an income.”

Just be aware of the (section 74) income attribution rules!
http://laws-lois.justice.gc.ca/eng/acts/I-3.3/section-74.1.html

“3) I am going to structure my corporation so that most of my daily needs (like food, shelter, entertainment, vehicle) are all covered by the corporation and expensed to it.”

Uh, no! You may not deduct personal or living expenses. Nice try, though. Section 18 of the Income Tax Act specifies the general limitations on the deductibility of business expenses. See para. 18(1)(a) and (h) in particular (in the link below).
http://laws-lois.justice.gc.ca/eng/acts/I-3.3/section-18.html

“Over the long term I can retain earnings within the corporate structure, and then perform the ultimate coup de grâce. Specifically, an Individual Pension Plan, and literary move millions of dollars into an executive pension plan.”

It’s easier and cheaper simply to dispose of the qualified small business corporation shares and claim the capital gains exemption on the disposition.

Caveat emptor: I am not a tax accountant, and don’t claim to be a tax expert, so you really should seek professional advice in these matters.

#242 USD on 09.07.17 at 3:52 pm

sure glad i dont own any…boy, what a bloodbath

will be a buyer at .90c for damn sure…..

#243 fishman on 09.07.17 at 4:01 pm

Marlene from Victoria : Ad Hominem attacks are so passé. The issue is one country two laws. Too bad you swallowed the Kool Aid.

#244 Happy Housing Crash Everyone! on 09.07.17 at 4:46 pm

SimplyPut7 on 09.07.17 at 3:16 pm
After the largest Atlantic hurricane on record hits Florida on Sunday, and if Canadians don’t have enough insurance to cover the damage to their investment properties that are probably sitting on their HELOCs; will these people technically be bankrupt after their banks demands the HELOC paid back but the home on the investment property is now worthless?

Does Florida have an insurance program similar to Tarion to cover losses?

http://www.cbc.ca/news/business/canadians-real-estate-1.4216906

http://www.ctvnews.ca/canada/why-canadians-who-own-florida-homes-need-both-hurricane-and-flood-insurance-1.3578898
—————————————————————

Hurricane and Flood insurance is way to expensive and most if not all don’t have any insurance at all. When I looked into buying property in Miami and asked about insurance I realized it was way to much money. If this hits Florida you can bet the BANKS WILL BE CALLING in HELOC loans. That might cause another quick 20% housing crash in GTA. Speculators may soon learn a painful lesson.

#245 90 CENT LOONIE HERE WE COME!!!! on 09.07.17 at 4:55 pm

90 cent Loonie here we come!!!! Yeehaw!!!
f18ON

#246 Blacksheep on 09.07.17 at 4:56 pm

Marlene # 163,

“Wow. So you have a real problem with legislation offering a semblance of respect and equality to Indigenous peoples of Canada.”

“I guess you are pro-slavery”
——————————————-
No, I do not / am not….

I am the first to admit that the First Nations Peoples of Canada / US got completely screwed when the Europeans colonized North America, but lets not confuse emotional statements, with facts.

“Many of the indigenous peoples of the Pacific Northwest Coast, such as the Haida and Tlingit, were traditionally known as fierce warriors and slave-traders, raiding as far as California.”

“Slavery was hereditary, the slaves being prisoners of war. Among some Pacific Northwest tribes about a quarter of the population were slaves.”

https://en.wikipedia.org/wiki/History_of_slavery#Among_indigenous_peoples

This culture has some pretty significant skeletons in their closet that I’m sure most, would rather not discuss. Contrary to many peoples beliefs, things were not all piece and serenity, as the modern image of the First Nations Peoples portrays.

“To make the torture last longer, the Native Americans would revive captives with rest periods during which time they were given food and water.”

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

#247 Cheap Money on 09.07.17 at 4:58 pm

#220
So, what changed at BoC? Why the switcharoo? What aren’t they telling us?

Maybe it is acceptance?

The intention:
Low interest rates makes businesses invest in growth.

The reality:
Most of the cheap money is used by private citizens to inflate bubbles like RE, TSE(†), CryptoCoin(‡), whathaveyou…

The Bank of Canada sees the economy is growing now, so pumping more air in bubbles is senseless.
Hence, a higher rate.

(†)TSE bubble is minuscule compared to RE bubble though. TSE is just a little overvalued compared to historic values.
(‡)Crypto coins probably go to zero, except for the “winner” which may very well be hugely undervalued at the moment. One of them is bound to reach a CAD$1M:1 conversion rate at least, before 2020 is my guess.

#248 re., glengarry girl on 09.07.17 at 5:03 pm

#34 Bimmer Girl

I share your concern, many will be hurt by this correction. It is just like 2007 in the US. My daughters have all moved back to Canada to study and work. My oldest is a Civil Engineering Student. She is on her co op working at an Engineering Firm. Loving it, working lots of hours, taking soil and cement samples for construction. Her boss is great, treats them well, buys lunches and fills the tank with gas for errands. My middle daughter is so excited after completing her co op at an Architecture Firm in TO, she goes back to finish her diploma and they are offering her a job in January. My youngest just started studying Electrical Engineering. All bright and energetic and smart with great prospects ahead. I am so proud but I also have always talked to them about the truth. I went through this cycle twice in my lifetime and I KNOW what comes next. Divorce, suicides, financial destruction, It’s not pretty. I rented a house in Seattle during the bust. My landlord paid $650 for it and it went up to $890 in a short period of time. He had another one in the neighborhood in a lower price range. Him and his wife owned a Dry Cleaners. When it started coming undone they were forced to rent the house out and rent a mother in law suite with a 2 year old. This is what I call the reluctant landlord. The house we rented was kept immaculate, they only used one of the 4 rooms. We moved in paid crazy rent, they hovered around their investment as it continued to decline in value. They obsessed with our maintenance and normal use of the home. Twelve months in we asked that the rent be reduced by $350 month. At that time things were coming unhinged. She literally wept on my front porch. They ended up broke and split up, very sad. Next door neighbor was a mortgage broker. Watched them come apart in 18 months. Foreclosures everywhere, it was a shit show. The beautiful new Library and school had to made big cutbacks because the money flow was cut. I could go on and on. 10 years later, even though you read in the paper that the US has recovered, I can assure you that it has not.
……..

thanks for sharing your experience. But please TRY not to extrapolate. You do not ‘KNOW’ what will happen next.

don’t get all crazy now….:)

#249 Cheap Money on 09.07.17 at 5:04 pm

#237 Dolce Vita

What are you talking about?
It’s the new listings on MLS for Aug’17, up to date.
And it is the number of sales for Aug’17, up to date.

There is nothing benchmark about it.
I wasn’t quoting benchmark prices, I was quoting the actual sales data, and listings date.

#250 TheDood on 09.07.17 at 5:24 pm

#218 IHCTD9 on 09.07.17 at 1:36 pm
#190 Keith in Calgary on 09.07.17 at 10:41 am

While the housing decline is not over out here, not by a long shot, housing is not bouncing back in Calgary…….ever.

Oil is done, like dinner. There is no waiting for ti to bounce back, like we always did before…….
_______________________________________

I agree with Keith in Calgary on this one……..Oil and Gas expansion and investment in AB is gone for good. All the big players have left the building and will not be coming back. Once the public votes in an anti-business government, that’s all it takes to put uncertainty into the minds of possible investors. If the voting public cab do it once, they capable of doing it again. AB RE will tumble just like the rest of Canada. Just a matter of time.

As for gas-powered vs electric vehicles. This is an interesting debate. You are certainly correct in that 80% of the world’s oil and gas produced go towards powering vehicles, ships, aircraft. If Tesla, Volvo, Toyota keep plowing ahead with hybrid and electric successfully, then it’s only a matter of time before the curtains close on gas powered. Once it starts happening it will be fast – technology is now advancing other technology so advancements no longer happen slowly, they happen overnight. How long before we have fully electric (and beyond that – unmanned!) 18 wheelers, trains, cruise ships, aircraft, etc etc.

#251 Fake News Again on 09.07.17 at 5:38 pm

#101 Built to Spec on 09.06.17 at 10:06 pm
Great column as always Garth, just disagree on one point.

Trump doesn’t have a “Russia problem” – have you noticed we don’t hear about it anymore? It was all a trumped up lie from the beginning (pardon the pun).

It turns out that if anybody was colluding with Russia it was the democrats – Obama caught on microphone saying to a Russian official that he would be “more flexible after the election”, Bill Clinton receiving $500,000 for a speech in Moscow, and Hillary shortly thereafter signing away 20% of America’s uranium to Russia, etc.

You are about to hear a lot on the subject. — Garth
____________________________________

The most advanced nation in the world with the most advance surveillance systems….in the world. And we will hear a lot more about it almost a year later.

Yeah…..okay.

#252 Blacksheep on 09.07.17 at 6:04 pm

Peace, not piece.

#253 akashic records on 09.07.17 at 6:18 pm

#217 under the pressure of cycles on 09.07.17 at 1:36 pm

#99 akashic records on 09.05.17 at 10:45 pm

How about this explanation for “global warming”?
USCG ice cores

https://www.youtube.com/watch?v=GxERTlbAo7g&list=PL3ducBA0aeVEraiotz7u6uGsEgM1JmrAV

#131 DON on 09.06.17 at 11:52 pm
#99 akashic

Thanks for the link…all makes sense. Information is power.

I am glad you guys liked it.
So did I.

#254 Glengarry Girl on 09.07.17 at 6:31 pm

#248

I feel strongly that these sequence of events will occur. So much so that I have made adjustments to my investments to protect myself. I felt the same way PRIOR to it happening in Seattle and with other Boom Busts. I understand that this kind of talk or sharing can make people uncomfortable. I try not to discuss too much with my Family and Friends out of respect. But come on, CRAZY, do you really think that what I described is unjustified as a consequence to this Debt madness? This blog is meant to SHARE information and stories and as a result most people “extrapolate” all the time. I don’t call people IDIOTS or insult them for having a different opinion than mine…go pick on someone else….Crazy like a FOX

#255 jess on 09.07.17 at 6:50 pm

206 Marcus on 09.07.17 at 12:02 pm

Kotoko Wamura was the mayor of Fudai when the town began planning its seawall in the 1960s. Wamura had been a young man when the 1933 tsunami wiped out Fudai, and the memories made him determined not to let it happen again. Wamura also remembered family stories about the tsunami of 1896, which had been even bigger: 50 feet.

When it came time to draw up plans for the Fudai seawall and a later floodgate, Wamura insisted they both be 50 feet high. Many of the villagers were furious, unconvinced they needed a wall that was so expensive and so ugly, blocking their ocean view. But Wamura wouldn’t back down. Fudai got the tallest seawall on the whole northeast coast.

Mayor Wamura was not alive to see his wall protect the people who live in its shadow. He died in 1987, but today he is a hero to all the villagers whose lives he saved.

https://www.cbsnews.com/news/the-man-who-stopped-the-tsunami/

#256 Tony on 09.07.17 at 8:24 pm

Re: #220 What changed at BoC? on 09.07.17 at 1:41 pm

Everything changed right after the G20 meeting in London, England.

#257 Dhiren on 09.07.17 at 8:36 pm

Like your closing line….so true..
So face it. Housing’s not bouncing back this autumn. This winter. Or next spring.

#258 milon on 09.07.17 at 9:25 pm

“Benjamin Tal, deputy chief economist, has lobbied against the latest OSFI changes to the uninsured market because he thinks it’s just too much for the real estate sector to absorb. “They are getting a lot of feedback from the industry. I wouldn’t be surprised given the increase in rates and the slowing in Toronto, that we might see them not change but postponing the change,” said the economist.”

Any comment Garth? When this OSFI Guideline B20 is coming for good?

#259 Bruce on 09.08.17 at 9:22 am

#247 – Cheap Money

I certainly agree with the view as to what the ultra low interest rates have really been doing. My question really though is why so sudden a change? Did Poloz wake up one day and go “holy sh*t – what have I been doing…”

#260 MSP on 09.08.17 at 10:08 am

Hey Garth,

So that data breach at Equifax…

Isn’t it going to give us the EXACT/TRUE/UNFILTERED data on borrowers?

Sure, our helpful banks/OSFI/government has been releasing data, but it’s already turned into statistics, right? We don’t have the “raw” data. So assuming that motivated people can get a hold of the leak, put it into a database, will let them produce an YUGE number of statistics. No filtering. No statistical cosmetics.

For example, we could know:

1- Sources on loans for a borrower (except mom)
2- Types of credit taken by all borrowers
3- Interest for each type of credit
4- Top locations of borrowers with an LTV > 80

Imagine how many more statistics we can get with that. For example we could now know:

– Profiles of borrowers with a second mortgage in GTA
– Profiles of borrowers with a third mortgage in VAN
– Income to loan ratio for people who live in Hamilton
– Areas with the most borrowers using PayDay loans
– Verify lender books (Would know LTV stats of lenders)

What do you think? Would love to hear a word on that on your blog today.

#261 Greater Fool on 09.08.17 at 1:36 pm

So Garth, last year I was looking for a condo right in front of my work, the price was 320K for a 2 BR here in Victoria.
I said: “Hey, if I wait a year it can go down or I can save money for a year and have less debt!”
So a year passed and the exact same condo was sold for 420K, guess what? I could not save 100K in a year! And I make twice the average family income of Victoria, live a minimalist life and I’m the master cheapskate.
Saving money does not work anymore, work every day makes me sad because next year I will probably be living in a tent!
Banks are making billions and we are the new slaves.
Take that, savers! You suck!

And that’s why you should invest money, instead of saving it. — Garth