The blip

Picture courtesy of  blog dog Colin, in Langley BC. Off to bid on a condo.

_________________________________________________

Caitlin’s confused. “I am a renter,” she admits, “but being an irrational as most humans, I do feel FOMO especially with my couch potato portfolio not delivering in the past 2 years. If possible, could you touch in one of your future posts on the phenomenon that despite the current RE situation, condos keep going up in price?”

You bet. And even though Caitilin forgot to suck up mercilessly in her note to me, I shall deign to answer. This situation’s worth a few words, being fairly weird and leading more than a few horny moisters to the edge of the looming abyss.

Yes, the condo market is at odds with the detached one. Seriously. Toronto houses with dirt attached have plunged 28% in the past hundred days, shedding about $100,000 a month. Ouch. In Vancouver, sales of detached homes are down 20% to 50%, depending on the region, and prices have flatlined. Hell, even on the tony Westside, it’s mounting misery for sellers.

Detached home sales in this luxury ghetto fell 18% in August, and of the 51 that found buyers, 37 of them went for below asking. Meanwhile inventory is stacking up, and the Westside now has a bloated 15 months’ supply – 60% more than last year. That spells a buyer’s market, of course, so the 3% price decline of last month is obviously just the start.

In fact, look at YVR as a whole. Average sold prices fell 1.1% in August and are off 17% for the quarter. And those softening numbers are despite a surge in condo sales and prices – showing just how schizo this market’s become. Last August a detached in YVR was surging 35.6% higher in price in just a year. This time around prices have barely moved – which means most of last spring’s gains have been erased.

Condos, in contrast, are smoking. Sales are 20% ahead of last year, and the kids have cranked values up 19.4%, to an average of $626,800. And here’s the most telling stat: last month the sales-to-active listings ratio for detached houses was just 16%. Pathetic. For condos, it was 76%. Extreme. That means multiple bids, over-asks and intense competition.

Ditto for the GTA. Sorta. Sales are crashing everywhere, and condos are no exception, with deals off 24% in 416 and 36% in 905. But while the price of a once-precious detached house in the city has now gone negative (down 1.2% year/year), condo prices have romped higher across the region by 21%.

So, why?

Don’t these kids (the vast majority of condo-snatchers are newbie buyers) know what’s going on? After all, market sentiment has turned negative as governments dropped the hammer on rent controls, foreign buyers and speculators. Interest rates have popped twice in two months, with more to come. The stress test is on the way, widely expected to chop available buyer credit. And it still costs way less to be a renter than to own exactly the same unit in the same glassy slab.

Has none of this made its way to Twitter yet? Snapchat? Instagram? WhatsApp? FB Messenger?

Apparently not. Besides, they just wouldn’t believe it. The Mill generation (slighter largely in size than the massive pile of wrinklie, Stones-loving boomers), at an average age of 26, has never experienced 6% mortgage rates or a world in which real estate actually declines. They believe any little dip in housing prices is a technical error the Help Desk will fix by lunch, and Justin would never let interest rates go up too much because, like, it would hurt. And everyone that everyone knows is totally maxed. So how could it happen?

So here’s Caitlin, young & single, renting for a fraction of the cost of owning, with freedom and flexibility, plus no debt, in the midst of a housing market that’s seriously stressed and in freefall – and the poor thing has FOMO. She’s not alone.  Enough others are fighting over the latest Brad Lamb box with cool damp concrete ceilings (seriously) to gross up prices by 20%.

This is the irrationality of real estate. It is the most emotional of assets. Cravings for it are often illogical, primordial, primitive and nestive. Given current economic, supply and monetary conditions, there’s no reason to expect capital appreciation on a condo in Toronto or Vancouver – and yet there’s no other logical justification for buying something you can have for half the cost as a renter.

But this is not about logic.

Were that the case, kids would be running screaming from mortgages, condo fees, property taxes, closing costs and realtor fees, given what lies ahead over the next couple of years. But the trouble is, once you hit 25 you know everything.

By the way, Caitlin, the potato guy sucks. Another revelation.

248 comments ↓

#1 fifth on 09.07.17 at 6:28 pm

MOFO FOMO.

#2 Ian on 09.07.17 at 6:31 pm

Don’t cave in Caitlin!!! Keep renting!!

You won’t have to wait long before condos start sinking too. And when they do they will likely fall more rapidly than detached.

Keep your resolve! The bears know best! :))

#3 Mike on 09.07.17 at 6:32 pm

Don’t bet on OSFI changes….they may not come.

——-

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.

#4 dakkie on 09.07.17 at 6:33 pm

Canada Just GUARANTEED a MASSIVE CRASH in Canadian Real Estate Market!

http://investmentwatchblog.com/canada-just-guaranteed-a-massive-crash-in-canadian-real-estate-market/

#5 MF on 09.07.17 at 6:35 pm

“young & single, renting for a fraction of the cost of owning, with freedom and flexibility, plus no debt, in the midst of a housing market that’s seriously stressed and in freefall – and the poor thing has FOMO. She’s not alone.”

No she’s not. And the reason is because rents are too high to easily justify renting over buying.

People would rather pay their own mortgage, instead of handing 70% of their income towards some idiot “landlord”.

MF

#6 Money Miser on 09.07.17 at 6:37 pm

And this is why you don’t let emotions influence your decision making. Sadly, I don’t think Caitlin will last long.

#7 unbalanced on 09.07.17 at 6:38 pm

And why does the potato guy suck? Balance and diversified. No!

#8 Potato on 09.07.17 at 6:38 pm

I think you mean the *Couch* Potato guy.

…Or maybe me. Or maybe both.

{sobbing}

#9 Rick on 09.07.17 at 6:41 pm

I love you Garth! Keep up the good work.

Thanks a bunch,
Rick

#10 dog police on 09.07.17 at 6:42 pm

Borderline animal abuse. 3 demerit points.

#11 Condo Drivers on 09.07.17 at 6:42 pm

There are three key drivers of the parabolic increases in the condo market in YVR and surrounding communities:

1. Condos are the last bastion of affordability for those who want or ‘need’ to own something. It is not just a millennial thing – it literally is the last form of housing that local people can purchase. When rents for condos are close to purchase prices at the lower end, then the average person will BUY instead of rent the condo.

2. The BC Foreign Buyer’s Tax has a loophole that excludes condo pre-sales. Condos have become even more of a commodity since they can be flipped without paying the tax and without any registration on title, creating tax free gains for the more dodgy ‘investors.’ Huge incentive to ‘invest’ in condos.

3. The BC Home Buyers Program gives 37.5k for eligible buyers for homes up to 750k. This is fuel on the fire. The program essentially allows those owners of condos stuck with dormant prices for years to get higher prices and then make the leap on the property ladder to single family homes.

#12 active on 09.07.17 at 6:42 pm

“They believe any little dip in housing prices is a technical error the Help Desk will fix by lunch…”

best line ever!

#13 Tito on 09.07.17 at 6:46 pm

Potato guy sucks? Garth how is what you recommend, a balanced diversified portfolio much different than the potato guy?

#14 No Done Deal on OSFI on 09.07.17 at 6:48 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.

——-

And that is why you do not count these things as a ‘done deal’ as repeatedly stated here.

Every other federal measure that was supposed to kill the market – announced as a ‘done deal’ – failed to have the desired impact. Think of last fall’s moister killing stress test, which simply saw prices go higher (yes, Bank of Mom and Dad and alternative lenders facilitated this).

If concerns around TO’s faltering market are really the driver for an OSFI decision, then YVR bears will be kept on the sidelines waiting for the TO style correction. The changes will not be implemented. The TO market is way more important nationally than Vancouver’s tiny market, whose crisis has been ignored for close to a decade by all.

#15 Screwed Canadian Millenial on 09.07.17 at 6:49 pm

@#104 domain

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.

——————————————

Perhaps you should have actually read my post. I did mention cutting spending. The problem is Conservatives tend to not understand what revenues are. They exist. They’re not a myth. Don’t even get me started on the hilarious Conservative Boomer myth that tax cuts for the rich pay for themselves with trickle down magic. Must be how Dubya pi**ed Bill Clinton’s surplus away.

I’m all for cutting spending. When do we scrap the Old Age Security entitlement? It’s killing us. Talk about a budget buster. I could balance the budget yesterday. Let’s do that and really see who the entitled ones are.

#16 Andrew on 09.07.17 at 6:52 pm

Dear Garth, please expand on why Dan Bortolotti (“the potato guy”) sucks. I’m a fan of you both, so you’ll break my heart if you go all anti-couch-potato.

#17 Takes one to know one. on 09.07.17 at 6:52 pm

#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.
—————————————————

Number of highest-earning Canadians paying no income tax is growing

http://www.cbc.ca/news/business/zero-income-tax-high-income-canada-1.4087033

#18 Jon on 09.07.17 at 6:54 pm

Thank you for addressing this. You draw a similar conclusion to me regarding millennials and the irrational desire for ownership but do we have the data to know that youngsters desperate to enter the market is what is driving the condo market up in Vancouver? I’m enjoying your blog as you seem to be seeing this market with objectivity and are making arguments that make a lot of sense and can be backed with logic rather than emotions, wishful thinking and selection bias.

One thing I haven’t seen addressed in full in your blog yet (I am a newish reader to be fair) is the influence of foreign money in Vancouver. When I get all bearish about housing in the lunchroom I still get laughed at (despite the 18% quarterly decline of detached housing) because, ‘There is an endless supply of Chinese money’ and ‘There are 100,000 new residents in the lower mainland every year’. There aren’t I checked stats Canada and it was 67,000ish. That said there is an overwhelming sentiment that influx of foreign money provides Vancouver’s bubble the air it needs to grow. It sounds like bubble speak to me. Do you have any observations or arguments about the influence of foreign money in Vancouver and how that may effect the market as interest rates rise and new stress tests are introduced?

I have a second question… are you ever bullish on housing or rather, would you ever recommend buying a home if the adjustment/crash you predict arrives?

BTW – I am a renter a little too old to be a moister (I think) patiently waiting for the adjustment as an entrance point.

#19 jwierzbo on 09.07.17 at 6:54 pm

“By the way, Caitlin, the potato guy sucks. Another revelation.”

Wow. Bombs away. Future article?

Let me guess. Garth believes in a more active approach than the Potato, such as altering asset distribution based on market conditions, buying preferreds, keeping part of your portfolio in US$. Could this be first blood drawn in ETF-touting personal financier warfare?

Staying tuned.

#20 Dave on 09.07.17 at 6:56 pm

$600k for a condo in Vancouver? I could see New York or Paris, but Vancouver? What work is there except to sell condos to overseas investors?

#21 Big Bucks on 09.07.17 at 6:58 pm

How come nobody has mentioned that property taxes are likely to really increase over the coming years.Broke governments will have to get money from somewhere as the underground/barter system is destined to take off with all the new tax measures on small business.There are so many deterrents from buying now and rising property taxes has to be thrown into the mix.Rising condo/maintenance fees won’t be a walk in the park either.Rent baby,especially with the new rent controls just put in place—it’a a no brainer.

#22 Guy in Calgary on 09.07.17 at 6:59 pm

“Caitlin”, other then your savings rate, asset allocation will play the largest part in your returns. Obviously that is your couch potato portfolios problem. It is for people like this that certain mutual funds would be appropriate in my opinion, as the size of her portfolio would likely not get her a good fee only advisor.

Best of luck

#23 S.Bby on 09.07.17 at 6:59 pm

That dog is having more fun than I am.

#24 Chaddywack on 09.07.17 at 6:59 pm

Word around Vancouver Real Estate circles is that the people cashing out on heavily appreciated condos are going to be soon bidding on those Westside homes.

The idea is that they’ve made enough on their condo to now have a hefty downpayment for a Westside house.

#25 Suport Mark & DEFLATION in Canada! on 09.07.17 at 7:02 pm

$100,000 monthly declines to date in Toronto (no pun intended)?

I still see millennial couples who are overbidding on houses in Toronto, because that recent wife who never talked to you in high school or college, suddenly fell in love and coerced some schmuck to sign a mortgage in the infamous city of Toronto…..

The infamous city of Toronto where thousands of intimately frustrated men try in a desperate vain attempt to find a wife at the Eaton Centre every Saturday, with guidance and tutoring from a Greek doctor (for $3,000 a session one-on-one).

#26 jess on 09.07.17 at 7:04 pm

September 7, 2017 — Equifax Inc. (NYSE: EFX) today announced a cybersecurity incident potentially impacting approximately 143 million U.S. consumers. Criminals exploited a U.S. website application vulnerability to gain access to certain files. Based on the company’s investigation, the unauthorized access occurred from mid-May through July 2017. The company has found no evidence of unauthorized activity on Equifax’s core consumer or commercial credit reporting databases.

The information accessed primarily includes names, Social Security numbers, birth dates, addresses and, in some instances, driver’s license numbers. In addition, credit card numbers for approximately 209,000 U.S. consumers, and certain dispute documents with personal identifying information for approximately 182,000 U.S. consumers, were accessed. As part of its investigation of this application vulnerability, Equifax also identified unauthorized access to limited personal information for certain UK and Canadian residents. Equifax will work with UK and Canadian regulators to determine appropriate next steps. The company has found no evidence that personal information of consumers in any other country has been impacted.

https://www.equifaxsecurity2017.com/

#27 akasic records on 09.07.17 at 7:06 pm

Trudeau tweet financial audit

At one point Trudeau’s tweet to invite people to illegally cross the Canadian border from the US to seek “refuge”, should have a financial audit to learn how much money Canadian tax payers had to pay for his careless virtue signalling political selfie.

#28 prairie person on 09.07.17 at 7:07 pm

I/we happily rented for years. Added two kids. Still rented. But renting was inexpensive. And, there was lots of rental properties. Then moved to Victoria and the change had begun. Our landlord moved back to town. We were out. Bought a house. Didn’t want to be moving again and again with two kids in grade school. Usually a bad experience for them. House prices were just beginning the escalation. The house I bought had cost the owners 18,000.00 three years before. I paid them 47,000.00. Doesn’t seem like anything now but wages were lower. Interest rates were higher. My family thought I was nuts to pay that much. It was not an investment. We just needed a place to live, in an area with a decent school and reasonably close to work. Those are not unreasonable desires. A regular middle class job should pay for that. I sold that house and moved closer to work. Amazing how much further your salary goes when you can walk to work, don’t need to pay for parking or gasoline. No wear and tear on the vehicle. No wear and tear on one’s nerves bucking traffic. Houses should not be the equivalent of penny stocks on the VSE. Not for locals or foreigners. There is no such thing as a free economy. Everything is regulated. It is just a matter of what we want those regulations to be. We can put a stop to speculation in housing. Lots of ways to do it. If people want to gamble let them play the VSE or go to Vegas or the local casino.

#29 BK on 09.07.17 at 7:09 pm

Rising interest rates, stress test and tightened lending rules will either make or break the middle class in and around Vancouver. Can you imagine if prices dont budge…Your above average earner would have a hard time affording a one bed condo in chilliwack. Its almost at that point now. Rents are extreme and feeling secure in a rental almost impossible. Its scary out there. Torontos home prices before the crash looked like a miraculous bargain compared to Vancouver.

#30 Royal City Dweller on 09.07.17 at 7:14 pm

On the horizon in terms of tighter credit regulations is a new rule from the Office of the Superintendent of Financial Institutions that would target home buyers with down payments of more than 20 per cent with a tough new stress test, says Financial Times!

http://business.financialpost.com/personal-finance/mortgages-real-estate/after-rate-hike-canadian-housing-braces-for-biggest-rule-change-of-all-time

#31 Prairieboy43 on 09.07.17 at 7:14 pm

Take the road less travelled. It may take longer. However far more interesting.
PB43

#32 Victor V on 09.07.17 at 7:15 pm

#3 Mike on 09.07.17 at 6:32 pm

Don’t bet on OSFI changes….they may not come.

——-

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.

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

Would you place your bet on Benny, or RBC’s top dog?

http://www.bnn.ca/we-have-to-be-careful-rbc-s-ceo-warns-it-s-time-to-take-stock-of-housing-rules-1.850020

“We need some of this policy change, particularly the B-20 change, as we are in a highly stimulative monetary policy environment.”

– Dave McKay, RBC CEO

#33 cynical millenial on 09.07.17 at 7:17 pm

Garth: could you (or one of the weekend dudes) expand on why Couch Potato (basically 3 mega diversified ETFs) is weak compared to the GT method? My guess is no feasting on REITs and the tax advantages/dividends that come with it.

My guess is there is more to it than that, though.

#34 AGuyInVancouver on 09.07.17 at 7:24 pm

#11 Condo Drivers
The flip side of the condo fever is that single family houses in Vancouver, West Vancouver, Richmond and Burnaby are now priced solely for the offshore buyer (and the odd homegrown 1%er). Until the Feds crack down on dirty money flowing from offshore nothing will significantly lower those house prices.

#35 Ex-Cowtown on 09.07.17 at 7:24 pm

#12 Chaddywack on 09.07.17 at 6:59 pm
Word around Vancouver Real Estate circles is that the people cashing out on heavily appreciated condos are going to be soon bidding on those Westside homes.

The idea is that they’ve made enough on their condo to now have a hefty downpayment for a Westside house.

+++++++++++++++++++++++++++++++

Classic bet-heavy-sleep-in-the-gutter behavior.

Reminds me of a friend of mine who wanted to buy Bre-X on the way down. It was at $200+ and dropped to $30 when my friend had the brainwave to load up on it. “Something has to be there” he confidently said. I told him it was all crap and a scam and worth nothing.

He looked at me puzzlingly, and then I continued “John (not his name), What do you do for a living?” “An accountant” he replied. “And what do I?” I asked.

“A Geologist”, he replied.

“Think about that for a minute” I told him.

Luckily for him, he stopped in his tracks.

There’s no good way to catch a falling knife. Or in this case, a falling chainsaw.

#36 OttawaMike on 09.07.17 at 7:27 pm

I have a similar tale:

Selling Mom’s Peterborough retirement condo bungalow for her. 2 weeks ago– Agent shows a couple from Mississauga the house, they love it but need to unload their condo. Yeah good luck with that come back when you sell.

Agent called me back at noon today. OK Mississauga condo was listed and sold with multiple offers. We are ready to buy.

What!?

#37 Steve Bridge on 09.07.17 at 7:30 pm

From what I’ve seen, 99% of Canadians would be WAY ahead by implementing a Couch Potato strategy. Beats active mutual funds hands down and has low fees. Keep your hands off it, rebalance once (maybe twice) a year and go about your life.

#38 jim on 09.07.17 at 7:35 pm

“Sales are 20% ahead of last year, and the kids have cranked values up 19.4%, to an average of $626,800.”

Good lord, 630k for a condo? With Canadian construction quality and weather?

In Toronto experts at UofT estimate that a good number of the condos will fail within 20-30 years. Not only are you buying a box in the sky, but in a building that will likely require a ton of special assessments.

I think we all know that the quality of construction in Vancouver has not been very high over the last 30 years.

I can kind of understand overpaying a bit for a house, but for a unit run by a strata corporation that can hit you with massive special assessment fees? There are so many legal games and shenanigans that can happen in condos that I would never touch one.

$630k. I’m looking at investment homes in the USA right now, and the thought of paying 630k for a condo makes me laugh. Vancouver’s incomes are nearly high enough to support that.

#39 Mark on 09.07.17 at 7:36 pm

“One thing I haven’t seen addressed in full in your blog yet (I am a newish reader to be fair) is the influence of foreign money in Vancouver”

The problem with that ‘foreign money’ theory is that there just isn’t any evidence of it showing up. For starters, foreign central banks are accumulating more CAD$ than are actually being exported offshore, hence, foreigners cannot be, on the net, accumulating Canadian assets including RE. Chinese inflows are well accounted for in terms of investment in the Canadian mining and O&G sectors with known transactions. And “money”, foreign investment, cannot flow into an economy and literally only lift one asset class (ie: real estate) — the rest of the economy would need to see some spin-offs. Yet in the context of Vancouver, we’re only seeing the alleged “foreign” money lift RE, which brings into serious question if there is any “foreign money” at all.

Add in a few more anecdotal data points, such as CBSA at YVR seizing no more than trivial amounts of currency (and most of it as illegal *exports* of currency, not imports), combined with the fact that the extreme leverage in the Canadian financial system and the bubble in low cap rates fully explains the Canadian RE bubble, and its pretty obvious that Canadian RE is in a bubble quite reminiscent of that of Nortel in the late 1990s (or more recently, Amazon), where it was excessive optimism of future earnings growth, not actual fundamentals driving the equation. Of course, speculation based on dreams, not fundamentals, especially in a commodity like RE, usually ends up quite badly.

#40 jess on 09.07.17 at 7:36 pm

FOR IMMEDIATE RELEASE
2017-159

Washington D.C., Sept. 7, 2017—

The Securities and Exchange Commission today announced that State Street has agreed to pay more than $35 million to settle charges that it fraudulently charged secret markups for transition management services and separately omitted material information about the operation of its platform for trading U.S. Treasury securities.

An SEC order finds that State Street’s scheme to overcharge transition management customers generated approximately $20 million in improper revenue for the firm. State Street used false trading statements, pre-trade estimates, and post-trade reports to misrepresent its compensation on various transactions, especially purchases and sales of bonds and other securities that trade outside large transparent markets. When one customer detected some hidden markups and confronted State Street employees, they falsely called it a “fat finger error” and “inadvertent commissions” in order to conceal the scheme.

“Agreeing to a fee arrangement and then secretly tucking in hidden, unauthorized markups is fraudulent mistreatment of customers,” said Paul G. Levenson, Director of the SEC’s Boston Regional Office that investigated the overcharges.

In a separate SEC order, the agency finds that State Street failed to inform subscribers to its government securities trading platform called GovEx that despite marketing the system as “fair and transparent” it provided one subscriber with a “Last Look” trading functionality that allowed a short period of time for the subscriber to reject a match to a submitted quote. The subscriber used Last Look to reject 57 matches that each had a $1 million face value. State Street did not inform the counterparties that their orders had been rejected with Last Look. While developing Last Look, State Street even told one subscriber that the platform did not have Last Look functionality at all.

“Firms that run trading platforms cannot mislead subscribers about their order handling operations,” said Kathryn A. Pyszka, Associate Director of the SEC’s Chicago Regional Office that investigated the GovEx-related disclosure failures.
https://www.sec.gov/news/press-release/2017-159

======

overcharge customers – $64m to resolve fraud charges with the Department of Justice

#41 Anderson on 09.07.17 at 7:37 pm

That Caitlin gal seems smart. Can I have her phone number?

How about having Doug exposing the couch potato guy this weekend?

I keep making rookie mistakes because of him:
– Buying unhedged international stocks weeks before BoC raised the interest rate for the first time (because you are not supposed to time the market and hedged stocks reduce volatility in the long run).
– Avoiding REITs and preferreds (because they are too risky).
– Suggesting long term bonds just as interest rates go up (because on the long run it will pay off).
– Using GICs for short term investments.

#42 Condo Drivers on 09.07.17 at 7:38 pm

#24 Chaddywack on 09.07.17 at 6:59 pm
Word around Vancouver Real Estate circles is that the people cashing out on heavily appreciated condos are going to be soon bidding on those Westside homes.

The idea is that they’ve made enough on their condo to now have a hefty downpayment for a Westside house.

——

That was the exact purpose of the BC Home Buyers Program – allow a property ladder move up for those people stuck with dormant condo prices for years.

#43 Stone on 09.07.17 at 7:39 pm

#5 MF

“young & single, renting for a fraction of the cost of owning, with freedom and flexibility, plus no debt, in the midst of a housing market that’s seriously stressed and in freefall – and the poor thing has FOMO. She’s not alone.”

No she’s not. And the reason is because rents are too high to easily justify renting over buying.

People would rather pay their own mortgage, instead of handing 70% of their income towards some idiot “landlord”.

MF

—————————–

Patience young Jedi. This is only the beginning of the decline. I don’t disagree that rents could be lower. That will change in a couple years. I look at it this way: so far, take a 20% hit on the equity on a house you own = $100,000 on a $500,000 value and that’s on spot. Or wait a couple years and hope your rent gets halved in 2-3 years when the SHTF. One of these options is a guaranteed loss. The other is not. I’ll go with option 2 please. It may still be an equal loss but it’ll take years for that to happen when renting.

Before rates started going up and I was wondering whether to buy back into real estate (even I have my moments of madness – LOL), I figured that for every $100,000 borrowed, it would cost me $5,000 in mortgage payments of which most would be interest (you know, flushing your cash into the bank’s toilet). So, on a $400,000 mortgage, that would be about $20,000 annually. Then add municipal taxes and between 1-5% for repairs and maintenance. Let’s say total carrying costs are $30,000 annually keeping it low to be as realistic as possible.

I pay $2100/month plus utilities for a brand new never lived in detached house which was going for $800,000 before the current drop in real estate in the GTA. To me, that’s peanuts and no risk. I can pick up and leave after 1 year. By the way, gsimilar houses in the neighbourhood are now going for $650,000 to $700,000 and they’re not moving. The more realistic price is probably $550,000 to $600,000. My landlord is so screwed (and idiots) but I thank them for taking all the risk. Now tell us again renting is expensive.

Renting is the new black.

#44 jim on 09.07.17 at 7:39 pm

#5

“And the reason is because rents are too high to easily justify renting over buying.

People would rather pay their own mortgage, instead of handing 70% of their income towards some idiot “landlord”.”

Oh boy, I think you came to the wrong place to peddle this snake oil.

The costs of carrying a unit in Toronto or Vancouver don’t come close to the costs of renting one. Not even close. I shudder to think the costs of the average family buying one of those 630k condos. Monthly payments, home insurance, property taxes, maintenance fees, any repairs….

Rent is the true cost of shelter. Renting has many advantages, including mobility. I’m relocating cities after 4 years, and my house is now kind of an irritant as it is going to cost me 37k in taxes and fees to sell.

I think you are one of those typical Canadians who believes that the way to get rich is hunker down and make large payments on a big mortgage. Sad. Where I live, the way to get rich is through career development. That’s what people focus on. Changing jobs often involves changing cities.

#45 acdel on 09.07.17 at 7:40 pm

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

#46 Doghouse Dweller on 09.07.17 at 7:42 pm

World class Brad lamb septic tank with windows ! Thought you were kidding !

http://tinyurl.com/y726kq5d

And only .5 million , double land tax and no land to worry about what a deal.

#47 jas on 09.07.17 at 7:42 pm

Folks
where do you see the loonie going between now and 6 to 9 months down the road.

#48 considering the potato on 09.07.17 at 7:45 pm

“By the way, Caitlin, the potato guy sucks. Another revelation.”
___

For the moisters, and knowing you may not want to mention specific ETFs or allocations, is there another resource you recommend? Is it worth hiring an advisor when investing one’s first $20k, or is it relatively safe to DIY on Questrade until you have more money to deal with?

#49 couch potatoe follower on 09.07.17 at 7:46 pm

Garth: I agree with cynical millennial. I am a follower of both your great sites and wonder why you are bashing the “couch potatoe guy” ?

#50 rainclouds on 09.07.17 at 7:46 pm

#32 VICTOR

Bingo!

Bank CEO’s/BOC and OSFI VS Benny the shill. Somebody is mistaking his press releases as relevant.

No they aren’t backing down ……..this is a recognition that stupid people can cause much damage. That in its self isn’t a problem but the cascading effect affects the rest of us. BIG PROBLEM

Significant kerfuffle about “sprinkling” across political and economic lines. Barely a peep re “stress test” (unless you are reliant on goosing the pig…..) Ben is embarrassing himself.

#51 jas on 09.07.17 at 7:48 pm

#33 cynical millenial

Good point.
Will those who care to share, tell honestly, how their portfolio performed over the last 2 years?
I am asking especially from those who have relied on financial advisors (advisers…it doesn’t matter), because whether it is FA or the fund manager of a mutual fund, they always have something else to blame for poor performance ….and they always put an optimistic note at the end of their report …the usual BS we know.

#52 Millennials are good obedient puppets on 09.07.17 at 7:50 pm

No generation is as foolish as the puppet millennials. These fools believe everything the high school drop out boomer realtor tells them. Then the realtor goes back to the office and LOL with the other realtors about millennials.

#53 YVR renter on 09.07.17 at 7:51 pm

0.5 % (50 basis points) of 1.5BN = 7.5 MM, Vancouver is their colony, they love it here, they make the rules, our city hall even raised Chinese flag in honor of Mao’s birthday (social justice genocidal killer of 45MM), they couldn’t care less about 15% foreign tax, we are screwed, we are money laundering capital of the world, we are the city built exclusively for Bentleys and bicycles (if you visit, you’ll know what I mean). Pray for us.

#54 It's simple on 09.07.17 at 7:51 pm

Hey Caitlin, condos are still going up because millenials are the dumbest generation ever. Hope that helps.

#55 nick on 09.07.17 at 7:58 pm

@MF

Rents are too high? Lmao. Price to rent ratio has never been this absurd in history.

Please stop posting your nonsense.

#56 Parksville Prankster on 09.07.17 at 7:59 pm

..down on the Potato guy? What’s next, suggesting that John Bogle (The great Grand Daddy of Index Investing and founder of Vanguard), is too limiting in his theories when he suggests to keep it simple, as broadly diversified as possible with the fewest number of funds, and to keep costs low, low, low…

Blasphemy!

#57 Tim on 09.07.17 at 7:59 pm

I’m going to speak up for Canadian Couch Potato too. It is an incredibly informative and educational site and Dan takes the time to personally answer almost every question posted. The archives on that site are well-worth reading through as well. GreaterFool publishes far more often and has a much more entertaining style, but, especially if you are new to investing, CCP is the place where one should spend some serious time to get grounded in fundamentals.

The portfolio Garth has described multiple times here needed 11 funds for me to model it using iShares ETFs last time I tried. The three ETF couch potato portfolio is much simpler to implement for a self-directed investor doing their own trades. We are talking about two really different things when comparing an advisor-based portfolio by professionals vs. a self-directed portfolio that emphasizes simplicity and ease-of-analysis in any case.

The couch potato will not necessarily do worse in terms of return compared to other approaches. Dan publishes the exact composition and performance of his recommended portfolio each year so people can decide for themselves.

No disparagement to Garth at all. I love GreaterFool. But CCP is a great service to Canadians who want to become better investors.

M46ON

#58 Ian on 09.07.17 at 7:59 pm

Oh boy. I see the OSFI B-20 doubters are returning.

You silly, silly people.

You’re trusting a bank chief economist? The very institutions that got the country to a 436% debt-to-GDP ratio through reckless, irresponsible lending?

Has it occurred to you that just maybe their higher-ups in management just might be worried about what’s coming and protecting their own lending book?

Don’t make me unleash this blog’s bear pack on you. You don’t want that.

OSFI changes ARE ON.

HAPPY STRESS TEST EVERYONE!!!

#59 Howard on 09.07.17 at 8:01 pm

#10 dog police on 09.07.17 at 6:42 pm
Borderline animal abuse. 3 demerit points.

———————————

Was thinking the same thing. Forcing a dog, with far more sensitive hearing than a human, to endure the roar of a motorcycle engine right next to his ear for who knows how long that ride lasted.

#60 ANON on 09.07.17 at 8:06 pm

Last “bargain”: Montreal.

#61 Chico on 09.07.17 at 8:06 pm

200th and 56th.

#62 For those about to flop... on 09.07.17 at 8:10 pm

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

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

Thanks brother, I tried to do right by his family and kept my promise.

As far as advice ,yes he was better at it than me but I would suspect in the last little while if he was still with us he would encourage you to be as committed to your TSFA as you appear to be to your girlfriend.

If you are serious about her they are both long term propositions and so commit to both.

I don’t think you should buy a condo until you can at least fill your TSFA each year and buy with a decent downpayment and some fun money to enjoy life with your girl.

A while back when I was mulling over whether to buy or not I thought long and hard why was I living in North America.

We used to go to Europe each spring but I went and bought a Campervan and have been all over the west coast of the continent. We generally take 3 holidays a year when I am fit enough and put the rest in our investment accounts.

Some people like to count money but my favourite hobby is counting the memories….

M43BC

#63 Bob Dog on 09.07.17 at 8:16 pm

How about 13 million for a place near english bay.

I walk past this place almost daily on my sea wall stroll. I pay $1700/month rent for a one bedroom a few blocks away and I think thats way to much to live in Vancouver. This city is truly a horrible place to live. Constantly under construction, noisy, dirty and the people are unbearable. Im not even going to mention the rain. Come winter, Im updating my resume and hopefully saying goodbye to this nonsense. New Zealand is my first choice.

https://www.rew.ca/properties/R2185093/2201-1328-marinaside-crescent-vancouver-bc

This condo is much nicer than my apartment but I think someone has a fat finger here. Two extra zeros entered on the keyboard.

#64 chapter 9 on 09.07.17 at 8:18 pm

#27 akasic records
Trudeau tweet financial audit

Trying to get an accurate cost is challenging, there are costs by the federal government, all provincial governments except PEI, Nova Scotia, Newfoundland/Labrador, NWT and Nunavut plus a further down loading of costs onto the local municipalities. The total number of illegals that have crossed into Canada from January 1 to July 31 of this year–21,695. Source RCMP,CBSA,IRCC

#65 Happy Housing Crash Everyone! on 09.07.17 at 8:22 pm

OSFI rules are done deal. Keep reading the paid media and hoping shysters. Hey I thought you dirty lying shysters said the new stress test won’t have an impact? Lol lying scumbags. The world bankers are raising interest rates. The fake stats will keep saying rates must go up just like they did on the way down. The new stress test is a must. They have to correct this housing bubble. You think they going to start a crash and then just let the problem get bigger ? Lol the crash is here and will continue to get worse. Keep watching you bank accounts drop. Happy HAPPY Housing Crash Everyone! :-)

#66 The doubtor on 09.07.17 at 8:23 pm

New condo pre-sales are over $1000/sq.ft. in Burnaby. No locker and smaller units have no parking stalls. Apparently, they are selling like hot cakes.

#67 Personal Corp Death Watch? on 09.07.17 at 8:30 pm

Maybe Garth can follow up the “Cowtown Death Watch” with the “Personal Corporation Death Watch”.

Each week we could hear from the former income sprinklers about how hard life is now that they pay their full taxes. (I agree that many already pay a boatload of taxes, but these are also the people who voted Trudeau into power). Maybe an interview with some of their 4 year old children discussing how they pay for Lego now that the monthly dividend cheque has dried up. Those kids put a lot of blood and sweat into that dental practice. Preventing them from collecting their due payment (at the lowest possible tax rates) is a travesty.

I’m sure the dogs would also love to hear the stories of all the business owners who closed up shop in protest, and the doctors who reduced their schedules to 2 days per week, giving up the Point Grey mansion for a double wide on a pad in Surrey and trading in the Cayanne for a Hyundai.

Another week it could be “Would Have Beens”, people who had great potential but decided to smoke dope and play nofriendo in their parents’ basements out of fear of the tax man.

As for fomo girl, she should buy now if she can hang onto the place. Wages are going nowhere but down and taxes are going nowhere but up. Try to think long term young lady! You would be done with mortgage payments by the time you’re 51, not bad at all. The TSE has done nothing for years, imagine how those guys feel about the wealthy house humpers.

#68 calgaryPhantom on 09.07.17 at 8:32 pm

“Justin would never let interest rates go up too much because, like, it would hurt.”- Garth

———
you my Sir, are funny. Excellent placement of “like”.

#69 Debtslavecreator on 09.07.17 at 8:33 pm

JT and his gang of radical globalist socialist crazies are well on their way to destroying whats left of the middle class they pretend to care for
Our economy is credit based. It is necessary to grow debt and eventually start printing or the math inevitably catches up as the systems natural state is to contract the stock of debt once the net increase in debt slows to below 2% real rate of growth
Barring a productivity or genuine investment / capital spending boom that sustainably increases GDP/incomes there is no other way to avoid the inevitable
The pressure of the failing system is released in the currency value
JT will leave as the most hated PM of all time and have destroyed the nation more than all other PMs combined
We can survive but it is going to be a long road ahead and it will take 5-10 years to get back on track
Government and central bank intervention does not work
And usually accomplishes exactly what they are trying to avoid although it may take time
When left wing brain disease takes hold in a nation its lights out within 10-15 years

#70 InvestorsFriend on 09.07.17 at 8:34 pm

About the Small Business Tax Changes

Thou shalt not convert thy personal labour income to dividends (much less capital gains) in order to avoid income tax.

Thou shalt not sprinkle said converted labour-to-dividend income to avoid personal income tax on thy labour.

Though shalt not pay far above market rates to family members to avoid personal income tax on thy labour.

Though shalt not be bitter when tax loop holes are closed to make the system more fair.

They are not loop holes, but legislated, decades-old statues of the tax code. — Garth

#71 Myra Andrews on 09.07.17 at 8:37 pm

Condo Drivers that was a great summary of why condo prices have increased in Vancouver.

#72 kbean on 09.07.17 at 8:37 pm

Re Couch Potato:

My wife and I have maxed out our TFSA using Dan’s TD e-Series “aggressive” model. The MERs are a touch higher than ETFs, but I bank with TD and it’s more convenient. Plus, I don’t pay any extra fees when I add money in.

Should I switch to ETFs?
What is it that you don’t like about Dan’s system?

#73 KAC on 09.07.17 at 8:39 pm

#24 Chaddywack on 09.07.17 at 6:59 pm
Word around Vancouver Real Estate circles is that the people cashing out on heavily appreciated condos are going to be soon bidding on those Westside homes.

The idea is that they’ve made enough on their condo to now have a hefty downpayment for a Westside house.

———————————————

Sorry, I don’t follow the logic. Vancouver detached houses have appreciated in price far more than condos over the last decade, hence for move-up buyers the current price difference is much larger than it used to be.

If they couldn’t afford to carry a big enough mortgage to carry the small spread 10 years ago, they will need a lot more than just their increase in equity to close the gap.

Sure, they will have a bigger down payment but the remaining gap will require a much bigger mortgage than they ever dreamed of carrying a decade ago.

With SFH prices declining and interest rates increasing one would have to be really dumb to make such a move, unless of course the price gap drops a lot more than it has since April, but I wouldn’t bet on that.

#74 Looney Baloney on 09.07.17 at 8:39 pm

Lol. BigGee said the ‘potato guy sucks’. He said nothing about his portfolio recommendations. Blog dogs sure are quick to jump to conclusions.

#75 Tony on 09.07.17 at 8:42 pm

Re: #4 dakkie on 09.07.17 at 6:33 pm

John Sneisen really knows what he’s talking about. I can expand upon most of his work.

#76 Victor on 09.07.17 at 8:43 pm

#2 Ian on 09.07.17 at 6:31 pm

Could not agree more!

The vast majority of condo buyers since April are “would be low end home buyers”, but they could not qualify due to the stress test. Their state of mind is the same as of those buying houses in March and April – prices never go down. What a revelation ahead…

#77 Sebee on 09.07.17 at 8:44 pm

This whole past year is a giant scam.

Few houses jacked prices 30% as supply was tight onto 2017. Now things have rewound back a year and many think correction happened. It’s all behind us.

Meanwhile, unsustainable 2016 prices, which had no fundimentals behind it are cemented as the new normal, post correction.

Nicely played.

And we’re still the second biggest country on the planet with one of the lowest population densities in the world. FOMO…funny.

#78 westcdn on 09.07.17 at 8:45 pm

My experience with Bitcoin is getting tedious. It didn’t dawn on me that electing to create a “wallet” meant downloading every validated Bitcoin transaction to create a ledger. No wonder people elect an exchange account. As far as I can determine now, exchanges are just great big wallets.

I have been downloading data for 5 days and have to stop in order not to exceed my internet allowance. The penalties are steep. I have a cheap plan because I don’t download much. I think I am going to need a bigger desktop computer. Okay, those millenniums in the know can snicker at me now.

I believe the current Bitcoin value is determined by buyers like what I see in Real Estate where the buyer sets the value with help from promotors. If the buyers disappear (no bid), guess what happens to the value of a Bitcoin? I have no metrics to determine a “fair” price. Until I learn more, cryptocurrencies are a leap in faith to me much like trying to trade a Bradford plate of Elvis Presley for one of Princess Di. Both are overvalued but fun for the players to negotiate fair value and the residual settlement amount.

I pick stocks – Canadian ones on the TSX and TSXV. I hunt companies with low debt to equity, high return on assets employed positive cash flow from operations and are export oriented. I haven’t got a single Canadian bank or telecom share. I have given up on ETF’s. There plenty of Canadian companies with foreign operations. My forestry companies are doing well because of their large operations in the US. Reits like ino.un and nwh.un are really foreign companies.

I like TSXV companies because there is little front running but keep alert for pump and dumps. Look at facts, not hype. It can take a decade to build a solid company. Most small companies fail within a decade and I can show you many 90%+ losses I have taken. I can only be as good as the information I can get while disregarding pure luck. A lot of people follow Warren Buffett but my hero was Murray Edwards. I found the companies he was investing in through Insider Trading Reports. I was late to the party but I learned from his path. There are a few companies on the TSXV I think are compelling but H2 2008 is still fresh in my memory. My confidence in going long is low right now.

I was looking at the BoC rate increase effects on my primary bank. Their prime rate is now 3.2% and their posted 5 year fixed mortgage is 4.64% – ouch. I can hardly wait to see what rate they charge for margin on my trading account (this where I want my capital gains). I must consider they won’t give me a discounted rate, currently 3.14% max in my league when I renew. I think though, the next possible rate increase is a long way down the road. Who knows but I think we will be in a recession within a year.

Zero Hedge is full of fear mongers yet I browse the articles for alternative views. I liked this article on debt – http://www.zerohedge.com/news/2017-09-07/consumer-credit-american-conundrum

We only fooling ourselves that we are different and special.

#79 Aerobat on 09.07.17 at 8:45 pm

I suspect that the condo up, detached down values relates to our pre-sale market in Vancouver. People with their religious conviction that real estate can never go down see no risk in putting down the deposit for a condo that will not be finished for 2 or 3 years. They don’t see risk in owning 2 properties and believe they’ll end up selling their home at an even higher value when it comes time to complete. Yes, the moisters are buying condo’s with downpayments from the Bank of Mom, but in Vancouver there are many boomers who will need to sell the home when completion time comes on the condo they bought 2 or 3 years ago in the pre-sale phase. There is a massive inventory of detached homes that will have to be sold in this manner to complete as the average Vancouverite has nothing in savings outside of their home equity. Vancouver real estate will mirror the Vancouver Stock Exchange. On the day everyone realizes the music has stopped, it will go no bid. Good luck selling once that happens.

#80 Blacksheep on 09.07.17 at 8:45 pm

OK blog dogs, I’m looking for some input, please.

My 26 year old daughter and her boy friend, are seriously thinking about moving to Saskatoon.

Can any one with first hand experience in the town, give me some feed back. I think she is nuts, based on the weather alone, but am I really missing something???

Thanks in advance…

#81 InvestorsFriend on 09.07.17 at 8:46 pm

50% plus marginal tax rates are harsh

How about we target getting that down to 40% but in return for actually taxing ALL the income of big earners / investors? Get rid of favorable tax on dividends and capital gains? or at least reduce the advantage and limit it to some reasonable amount?

Someone’s gotta cover the costs of government. The issue is to make it more fair. Is the current system the most fair?

#82 Leo Kolivakis on 09.07.17 at 8:48 pm

Some background. After rate hike, Canadian housing braces for ‘biggest rule change of all-time’:

http://business.financialpost.com/personal-finance/mortgages-real-estate/after-rate-hike-canadian-housing-braces-for-biggest-rule-change-of-all-time

Will these new rules pass? I highly doubt it, the big banks are lobbying against them and it’s too little too late, the damage is done. These rules will kill the housing market and realtors and home builders will also oppose them, not to mention alternative lenders, aka subprime mortgage lenders.

But the biggest risk of all is global deflation hitting the US and crippling the Canadian economy for a decade. This is why I openly stated the Bank of Canada is flirting with disaster

As a Greek Canadian who saw the debt frenzy in Greece in the years prior to that country’s economic collapse, I’m afraid to tell you things aren’t much better in Canada.

We’re a bunch of debt sucking hosers and we will suffer a similar, if not worse fate than the Greeks.

Oh Canada, you’re so delusional! Your time is almost up!

#83 Jungle on 09.07.17 at 8:50 pm

Couch potato with 25% bonds

2016 +7.42%
2017 +2.09% YTD

Considering alternatives, this is not awful. Tell me where else you are going to get almost 10% return over last 1.5 years, properly invested and not maxed out on condos.

#84 akashic record on 09.07.17 at 8:50 pm

#64 chapter 9 on 09.07.17 at 8:18 pm

#27 akasic records
Trudeau tweet financial audit

Trying to get an accurate cost is challenging, there are costs by the federal government, all provincial governments except PEI, Nova Scotia, Newfoundland/Labrador, NWT and Nunavut plus a further down loading of costs onto the local municipalities. The total number of illegals that have crossed into Canada from January 1 to July 31 of this year–21,695. Source RCMP,CBSA,IRCC

—–

21,695 illegal “refugee” in 7 months is a shocking number!

No wonder Trudeau sends MPs of his government with various immigrant background to the US, as a damage control.

Trudeau should man up and come forward with an other tweet to acknowledge his costly mistake for working Canadian tax payers, plus announce the steps he makes to prevent crossing Canadian borders illegally.

It would be extremely disappointing if the various level of governments, municipalities could not provide a report down to the cent in these days, when every penny moving in and out of the governments bank accounts are running through computers.

#85 Andrewski on 09.07.17 at 8:51 pm

Re: #26 Jess; “3 executives sold company stock before the breach was announced”!!!

https://www.thestar.com/business/2017/09/07/equifax-says-data-breach-may-affect-143-million-people-in-us.html

#86 Oopswediditagain on 09.07.17 at 9:01 pm

Leo: “Will these new rules pass? I highly doubt it, the big banks are lobbying against them and it’s too little too late, the damage is done.”

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

Once more, with enthusiasm, yes they will pass.

Leo, the alternative is that thousands of Canadians will continue to end run OSFI's previous legislation. That turns into financial system risk that OSFI's new legislation is designed to mitigate.

As long as CMHC was cushioning that risk, OSFI was somewhat complacent. Their mandate is to protect the financial system (banks) not home buyers.

#87 AB Boxster on 09.07.17 at 9:13 pm

So Garth, with a 5 year fixed mortage at almost 5% is it time to use self directed mortgages once again?

#88 akashic record on 09.07.17 at 9:15 pm

#76 westcdn on 09.07.17 at 8:45 pm

My experience with Bitcoin is getting tedious. It didn’t dawn on me that electing to create a “wallet” meant downloading every validated Bitcoin transaction to create a ledger. No wonder people elect an exchange account. As far as I can determine now, exchanges are just great big wallets.

I have been downloading data for 5 days and have to stop in order not to exceed my internet allowance. The penalties are steep. I have a cheap plan because I don’t download much. I think I am going to need a bigger desktop computer. Okay, those millenniums in the know can snicker at me now.

—-

You may not have the most suitable wallet for you.
It sounds like you picked one that acts as a “full node”, instead something like Electrum, which is a “thin” wallet.

But look at the bright side, if you have all the remaining data downloaded and all the other nodes get somehow destroyed, your wallet can save Bitcoin. This is one amazing feature that none of the banks at the entire world have for the money they deal with.

If you can secure your wallet, it is safer than using the one at the exchange. If you don’t plan to use your bitcoins, you may even consider an offline paper wallet, you may even keep the info in a safety deposit box at a bank.

#89 TnT on 09.07.17 at 9:18 pm

#80 Blacksheep on 09.07.17 at 8:45 pm

Hey BS – I’ve never lived there myself but I have a close friend whose kid started a career there and then moved on to BC.

My take on that city is it is great place as a stepping stone for getting started in life. Big fish in a little bowl sorta way.

It is great for anyone who is not afraid of putting in extra effort on any career and can easily work their way up to management level and then transfer to another city.

I get the feeling that the locals are “slow paced” and any “new comer” can work circles around them :)

Cheers!

#90 Long Branch Apprentice on 09.07.17 at 9:20 pm

Millennial are dumb? Yeah, many don’t know what an interest rate is or what an amortization table is. Discovery Math has so throughly sodomized our minds only the bravest amount us dare to us a calculator to figure out how much the ROI is on a granite countertop.

Giant ripping fart sound.

Boomers are dumb in their own special way, ever watch two Boomers try to print a documemt on a desktop computer? Glacial doesn’t begin to describe how slow they are.

IQ is not equally distributed across populations, regardless of what your Women Studies lecturer told you over a nice cup of Yerba mate.

If people were smart, rational actors we wouldn’t be in this mss to begin with.

There will be much weeping and gnashing of teeth to come. I shall point and laugh were appropriate.

#91 Ian on 09.07.17 at 9:27 pm

#47 jas

To 90c.

Two more rate rises this year, and FXC chart ultrabullish on both daily and weekly.

After that it becomes murky. Like Smoking Man’s mind on the second bottle of JD lol.

M48ON

#92 For those about to flop... on 09.07.17 at 9:28 pm

Click on the link and see what you think…

M43BC

“The Real Estate Market, Explained in One Graph

The U.S. housing market has now surpassed its pre-recession peak by 4.3%. This is great news for the economy, although there’s still an ongoing debate about the possibility of another housing crash. Whatever you believe about real estate, there’s no doubt that prices depend on where you live. We create a new visualization to demonstrate what this looks like.”

https://howmuch.net/articles/how-much-home-for-200400-dollars

#93 Ian on 09.07.17 at 9:31 pm

#82 Leo – ‘biggest risk of all is global deflation’

OMG you too?!! Just when I thought Mark had cooled down LMAO

Was Mark reincarnated as a Greek?

#94 Fake News Again on 09.07.17 at 9:33 pm

#70 InvestorsFriend on 09.07.17 at 8:34 pm
About the Small Business Tax Changes

Thou shalt not convert thy personal labour income to dividends (much less capital gains) in order to avoid income tax.

Thou shalt not sprinkle said converted labour-to-dividend income to avoid personal income tax on thy labour.

Though shalt not pay far above market rates to family members to avoid personal income tax on thy labour.

Though shalt not be bitter when tax loop holes are closed to make the system more fair.

They are not loop holes, but legislated, decades-old statues of the tax code. — Garth

_______________________________________

But yet the ACTUAL ruling elite….the Govt… has its own bible of rules:

Thou shalt pay taxes so our salaries are higher than the taxpaying public.

Thou shalt raise taxes to pay for our gold plated pensions

Thou shalt allow our pension to be the best 5 years we work so we can retire in Mexico while the 85 year old private sector worker is forced to be a greeter at Walmart.

Thou shalt raise taxes to pay for our gold plated benefits

Thou shalt allow Govt workers to have 4 weeks of PAID holidays courtesy of the taxpayer

The list of “Thou shalts” goes on……

Canada is dooomed.

#95 Reality 1 on 09.07.17 at 9:33 pm

to # 44 Jim

” Rent is the true cost of shelter. ”

Excellent post – good analysis.

Worth a re-read !

Is it just me or has the level of discussion and the insights offered on this blog been raised substantially – in the past 100 days or so ( since Garth reported the sea change in the GTA market ) ?

Some really good stuff appearing here lately and a very good level of comment.

This is getting good !

#96 Fran Deck Jr. on 09.07.17 at 9:35 pm

http://www.breitbart.com/big-government/2017/09/06/trump-says-tax-plan-will-cut-taxes-for-middle-class-families/

In a speech Wednesday, President Trump told middle-class Americans that “it’s your money, not the governments” as he outlined one of the most aggressive proposed tax cuts in US history … while on the west coast Canada’s postmodern PM is promising to punish over achievers and middle income business owners with much higher taxes at a time when most Canadians have less than $200 in their pocket every month after paying their bills and their outrageously high taxes.

Canada desperately needs a leader like Trump.

#97 Tax Payer on 09.07.17 at 9:36 pm

2 classes of Canadians without tax change: Morneau

Way to go Canada, excellent move by Liberals, well done Hon. Morneau, we are with you.

http://www.msn.com/en-ca/money/topstories/2-classes-of-canadians-without-tax-change-morneau/ar-AArm2lr?ocid=sl

#98 Reality 1 on 09.07.17 at 9:48 pm

to # 80 Blacksheep

young love ?

Remember how that felt when you were 26 and would follow your beloved to the ends of the earth – even Saskatoon ?

Nah – me neither !

Why don’t you ask her ?

She’ll probably have an answer that makes sense to her. Make sense to you – maybe not so much.

Best of luck , visit her as often as you can.

#99 Piano_Man87 on 09.07.17 at 9:50 pm

Weird, my potato guy portfolio was up 10.78% YOY last time I checked. He keeps changing his portfolio advice though. I checked a while back and he was recommending some ‘buy-it-all’ ETF with a low MER. Now he refers to someone else’s website.

It’s easy for no one to track his success if he keeps changing his advice…

#100 MF on 09.07.17 at 9:50 pm

#62 For those about to flop… on 09.07.17 at 8:10 pm

Amen brother.

“Thanks brother, I tried to do right by his family and kept my promise.

As far as advice ,yes he was better at it than me but I would suspect in the last little while if he was still with us he would encourage you to be as committed to your TSFA as you appear to be to your girlfriend.”

-That is exactly what Boom! would have said. He was often the voice of reason around here.

I remember on one occasion when another poster disagreed with Boom! and called him some dumb name.

His reply was quick and polite, but also very stern. He was a class act with a wealth of knowledge.

M34ON

As for the TFSA, it’s full to the brim. My savings rate is really good (probably because I am still working 7 days a week). The problem is a fear I have of actually investing the money inside it. I have not bought any securities in over a year. Paralyzed by fear in all honesty.

The condo thing is still kind of my goal. I am torn since I know being debt free is safer but I just cannot stand renting. Very moist lol. My rent keeps going higher and higher as well.

Maybe I should see Garth since my net worth is at 6 figures now (all due to saving) lol.

MF

#101 house of cards on 09.07.17 at 9:53 pm

we’re just like australia

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

#102 MF on 09.07.17 at 9:56 pm

#55 nick on 09.07.17 at 7:58 pm

Meh i’m in a good mood today so I’ll entertain your post.

Salaries have not increased that much in decades. This we know. House prices have gone crazy in the last 15 years. This we also know. A lot of that increase in cost has been passed on to renters.

Whereas the rent/own ratio still may favour renting, it does not negate the fact that rents are high when compared to average salaries.

As I have wrote here before. Renting, saving and investing the difference is a good place to be. So is owning and having your property increase in value.

What is not a good place to be is renting and having nothing left over to invest.

MF

#103 Ian on 09.07.17 at 9:59 pm

#92 flop

Yesss!!! Exactly. More evidence that the US is now in the ‘bubble of everything’, which will make their 2000 stock market and 2007 housing issues look like a small puppy in comparison.

Hardly surprising as they have plenty of cheap money in their dog food bowl too.

M48ON

#104 Slippery cricket on 09.07.17 at 10:05 pm

Ya I’m jumping on the band wagon too…..I like the couch potato website. It’s a good place to get a start then become more confident to go after the other ETF’s that you learn about here. Garth your still not touching this one, what’s up?

#105 deflation on 09.07.17 at 10:07 pm

#93 Ian on 09.07.17 at 9:31 pm

#82 Leo – ‘biggest risk of all is global deflation’

OMG you too?!! Just when I thought Mark had cooled down LMAO

Was Mark reincarnated as a Greek?
**********************************

Don’t laugh, there are bright minds who believe that deflation is inevitable.

http://mikaelsyding.com/

is a retired hedge fund manager who made a lot of people a lot of money. What have you done lately?

https://surplusenergyeconomics.wordpress.com/

https://www.gresham.ac.uk/professors-and-speakers/dr-tim-morgan/

Dr Tim Morgan is another one of those uneducated underachievers who believes that deflation is coming.

They may or may not be correct, but they certainly aren’t deserving of scorn, neither are Mark or Leo.

http://pensionpulse.blogspot.ca/ Leo’s blog

#106 John in Mtl on 09.07.17 at 10:08 pm

Who is the Real Bill Morneau and Does He Understand Middle Class Canada?

“…From this posting, you can see that Mr. Morneau clearly does not practice what he preaches. While he publicly states that he is concerned about the welfare of Canada’s middle class, this background information would suggest that he has spent his entire life living among the fraction of one percent of Canadians who can call themselves multi-millionaires. ”

http://viableopposition.blogspot.ca/2017/09/who-is-real-bill-morneau-and-does-he.html

#107 Arctic Gringo: Qalunaaq on 09.07.17 at 10:09 pm

The Ontario Securities Commission’s “Big Picture”

http://investmentsillustrated.com/clients/osc/bigpicture/

An illustration of the inferred growth of $1000.00 invested anytime between 1935 and 1999, with the Disclaimer outlining assumptions and indices utilized.

#108 MF on 09.07.17 at 10:14 pm

#43 Stone on 09.07.17 at 7:39 pm

“Patience young Jedi”

Love it.

I have to admit I am a little surprised the BoC is raising rates as quick as they are. I got used to so much incompetence I expected more of it.

I still have yet to feel the effects of this supposed downturn here in the GTA though. There does seem to be is less RE talk than there was before.

Hope you are right on rents. Can’t stand paying so much.

Renting is the new black.

Let’s hope so.

MF

#109 BS on 09.07.17 at 10:21 pm

97 Tax Payer on 09.07.17 at 9:36 pm
2 classes of Canadians without tax change: Morneau

Way to go Canada, excellent move by Liberals, well done Hon. Morneau, we are with you.

Yes, excellent move. Move everyone to the lowest level, don’t try to move people up. I guess it fools the wage slaves. They think they win if others are brought down. Only a Liberal can understand this logic.

The problem is they are still a wage slave paying the same taxes, except with no hope of bettering themselves. And who knows they may not even have a job should the tax change have its likely impact of contracting the economy, reducing jobs which leads to less government tax revenue. Then the wage slaves that still have a job must pay more in taxes or get less government programs. A race to the bottom.

I like Trumps plan. Lower taxes for everyone. Increase GDP growth and everyone wins. Even the wage slaves.

#110 Lee on 09.07.17 at 10:25 pm

After reading all the proposed tax changes closely, all I can say is you better look for a doctor in Buffalo. This can’t be the Justin Trudeau I know. Still poised to win another majority in 2019 though.

#111 bdwy sktrn on 09.07.17 at 10:29 pm

**2.04** 10yr note.

down again.
guess the fed is done for now. boc halts here too.

#112 Smoking Man on 09.07.17 at 10:31 pm

Finally made it to bolixi, new book inspection. Wyatts take and views on the savage road trip.

Atistic beauty 8 lbs poddle hitting puberty on the road.

I95 was a parking lot. 8 hour trip took 12.
Be safe Florida and cousin John and family.

#113 Richard Large on 09.07.17 at 10:38 pm

#51 jas on 09.07.17 at 7:48 pm
#33 cynical millenial

Good point.
Will those who care to share, tell honestly, how their portfolio performed over the last 2 years?


Just loaded up my questrade report and I have averaged 13.8% per year for the past 5 years. It is all in canadian stocks including banks, railroad, water heater rental, electricity distribution, natural gas distribution, and my big movers have been dollarama and shopify (wish I bought those two sooner than I did).

#114 Joe2.0 on 09.07.17 at 10:39 pm

Prices on the Sunshine Coast continue to climb.
Lots of Boombers bailing from the mainland.

#115 InvestorsFriend on 09.07.17 at 10:44 pm

Which Comes First?

The jobs or the people?

Probably need some primary job creator but after that more people create a lot of jobs sort of spontaneously?

For earth as a whole people lead to jobs not the other way around.

How many nice populated areas see depopulation when industry dries up? Not many. It may be in today’s economy it is people that bring jobs rather than other way around.

Years ago it was jobs that attracted people…

#116 Leo Trollstoy on 09.07.17 at 10:48 pm

In Toronto experts at UofT estimate that a good number of the condos will fail within 20-30 years.

I’ll be dead by then

#117 InvestorsFriend on 09.07.17 at 10:51 pm

Dollarama rocks

up 11% today

On April 8th 2015 and other occasions I posted here that it was one of the very best managed companies in Canada. Stock however always seems expensive

#54 Shawn Allen on 04.08.15 at 8:45 pm

Not at all. It’s success is because it is quite simply one of the very best managed companies in Canada.

#118 Smoking Man on 09.07.17 at 10:51 pm

One thing I’m cretin of re james post from yesterday, he has zero ability to read between the lines. But it’s ok. Makes my case before the judge when my posts are submitted as exhibit A.

He’s right about one thing. After every last cent is pissed away. I’ll be back in Canada. Sucking on the communist teet.

#119 DON on 09.07.17 at 10:51 pm

#63 Bob Dog on 09.07.17 at 8:16 pm

How about 13 million for a place near english bay.

I walk past this place almost daily on my sea wall stroll. I pay $1700/month rent for a one bedroom a few blocks away and I think thats way to much to live in Vancouver. This city is truly a horrible place to live. Constantly under construction, noisy, dirty and the people are unbearable. Im not even going to mention the rain. Come winter, Im updating my resume and hopefully saying goodbye to this nonsense. New Zealand is my first choice.

**************
I agree with your realistic assessment of Van. I left to experience life – best move ever. NZ looks good.

#120 DON on 09.07.17 at 10:57 pm

http://www.cbc.ca/news/canada/british-columbia/weak-oversight-plagued-b-c-megaproject-which-insiders-believe-cost-taxpayers-millions-1.4144535

Our former BC Liberal/Conservative ultra right wing government made BC a banana republic. The tip of the iceberg, well surpassing the corruptions levels in Quebec? KPMG in the news again. The cycle of corruption – are we finished yet!

#121 YC on 09.07.17 at 10:59 pm

@blacksheep I live in Saskatoon, I think it’s a great place if you have a good job. Can get almost anywhere in 20 minutes so not wasting 2 hours a day commuting, almost all the big stores. I travel to Vancouver for work quite regularly. You couldn’t pay me to move there.

Sure it gets cold in winter but you can also see the sun damn near every day of the year.

#122 Ian on 09.07.17 at 11:02 pm

#105

Of course deflation is coming. And it will bring a very strange decoupling from classical economic models. I’m just having a laugh. But much as Garth said about risk on / stock market up over the past 8 years being correct, there’s no point talking about it until it’s a reality.

And two things:

1) I think it’s important to separate ‘classical’ inflation from ‘costs the average person experiences’ inflation. Classical models raise interest rates when the labour market tightens, etc. I think that will never appear again due to creeping automation. But costs of food and healthcare and education keep rising.

2) Measures of inflation are so flawed I’ve lost count of the numerous inaccuracies. It can’t measure productivity for one.

Classical model says inflation / gold up, deflation gold down. I think that relationship will snap too as the USD goes into crisis.

#123 Millmech on 09.07.17 at 11:08 pm

#67
Really wages going down?
Had a meeting with management and our department,in order to keep/retain our personnel we got another weeks paid vacation(up to three now in the first year),a $1/hr retention bonus to be paid out quarterly,$2/hr to get our level one first aid ticket and there is already 4 level 2 per shift and $2/hr for each addition trade certification.I received a $7/hr raise on my next cheque for just going to work every day.
Best part is if I don’t wish to stay there I am sitting on 6 open job offers.
#5 MF
I will be taking my new one week of vacation and working a shutdown for 9days and will make enough on that job to cover my rent for 12 months,rent costs me less than 10% of net monthly income from the regular job.Who in their right mind pays 70% of their income on shelter?
Move to a lower cost area and get ahead!

#124 DON on 09.07.17 at 11:09 pm

Dolce Vita

Thank you for the info, my dad and grandfather are from Zoppola. Been backpacking in Italy twice, but my sister has different ideas and the kids are late teens.

Ponzi Pilatus, Waiting on the West Coast, Tazi – I took notes and will pass along – Thank you. And rest assured I told her if you want to see the leaning tower of Pisa buy a post cared in Florence. Neat to see in person…but!

Cheers,

#125 Leo Kolivakis on 09.07.17 at 11:15 pm

#105, deflation, thanks for those links, will look into them. I’m not here to sway people but there seven structural factors that lead me to believe we are headed for a prolonged period of debt deflation:

1) The global jobs crisis: High structural unemployment, especially youth unemployment, and less and less good paying jobs with benefits.

2) Demographic time bomb: A rapidly aging population means a lot more older people with little savings spending less.

3) The global pension crisis: As more and more people retire in poverty, they will spend less to stimulate economic activity. Moreover, the shift out of defined-benefit plans to defined-contribution plans is exacerbating pension poverty and is deflationary. Read more about this in my comments on the $400 trillion pension time bomb and the pension storm cometh. Any way you slice it, the global pension crisis is deflationary and bond friendly.

4)!Excessive private and public debt: Rising government and consumer debt levels are constraining public finances and consumer spending.

5)!Rising inequality: Hedge fund gurus cannot appreciate this because they live in an alternate universe, but widespread and rising inequality is deflationary as it constrains aggregate demand. The pension crisis will exacerbate inequality and keep a lid on inflationary pressures for a very long time.

6) Globalization: Capital is free to move around the world in search of better opportunties but labor isn’t. Offshoring manufacturing and service sector jobs to countries with lower wages increases corporate profits but exacerbates inequality.

7) Technological shifts: Think about Amazon, Uber, Priceline, AI, robotics, and other technological shifts that lower prices and destroy more jobs than they create.

These are the seven structural factors I keep referring to when I warn investors to temper their growth forecasts and to prepare for global deflation.

This is why I don’t buy the nonsense that there’s a bubble in bonds and rates are about to head back up.

It’s not rising rates but debt deflation and soaring unemployment which will kill the Canadian housing market for a very long time.

People can ridicule me all they want, I hope I’m wrong.

#126 Smoking Man on 09.07.17 at 11:29 pm

When a true writer goes out at night.
https://youtu.be/4YlTUDnsWMo

#127 Prairieboy43 on 09.07.17 at 11:30 pm

Saskatoon! One beautiful prairie city. Along the South Saskatchewan River. On the East side the University of Saskatchewan. Has great agricultural program, along with there Engineering are second to none. Good research type jobs in innovation park. Downtown is redeveloping, with open market, and theatre. On the North side there is waneskewin museum. Saskatoon centrally located. Great gateway to the Boreal forest, with Waskesui National Park approx 2hr drive north. Where the Canadian shield starts in Saskatchewan. lived there for a few years. Enjoyed immensely.
PB43

#128 Ian on 09.07.17 at 11:36 pm

#125 Leo

Completely agree with you on the debt and unemployment drivers.

#129 NoName on 09.07.17 at 11:38 pm

#112 Smoking Man on 09.07.17 at 10:31 pm

why Bolixi? casinos?
Guess that answers my question.

Down In Mississippi (Up To No Good)
https://www.youtube.com/watch?time_continue=37&v=H4A3lrqSOY4

#130 Smoking Man on 09.07.17 at 11:43 pm

The heart of the south. Inbred drunks. It’s home.
https://youtu.be/qvqqzMRoEqI

#131 rental property math on 09.07.17 at 11:53 pm

#83 Jungle on 09.07.17 at 8:50 pm
Couch potato with 25% bonds

2016 +7.42%
2017 +2.09% YTD

Considering alternatives, this is not awful. Tell me where else you are going to get almost 10% return over last 1.5 years, properly invested and not maxed out on condos.

———————-
Hmm i’m up more than that this year with my mawer funds and I do nothing..

While my tenants are paying my mortgages buying me houses I’m going to use the extra I save to buy some Enbridge stocks.

I get the keys back tomorrow for unit 1 in my legal duplex in the hammer.
I’ll be charging a hell of a lot more in rent.
Renoviction is a bitch..

Keep renting guys! Thank you!!!

#132 KELOWNA TESSERACT on 09.08.17 at 12:02 am

#80 Blacksheep. Saskatoon can be a great place when you’re 26 and starting out. Sure it’s cold in the winter but the river valley is gorgeous in the summer.

#133 Long-Time Lurker on 09.08.17 at 12:18 am

#78 westcdn on 09.07.17 at 8:45 pm
My experience with Bitcoin is getting tedious.

Since I liked your posting, I’ve decided to respond. Any cryptocurrency that isn’t created by a sovereign nation is a trade and not a hold. Reality1 wrote a good analysis of Bitcoin a few days ago in the comments section if you look for it. It sums it up nicely. If you look up Jim Rickards on Twitter he has a very well informed opinion on Bitcoin as a strategic analyst and a former Wall Street insider.

Bitcoin, Blue Apron IPO (zero profits –from memory), Snapchat IPO (zero profits), ICOs they’re the old shell game. Not to mention Tesla without subsidies is toast.

#81 InvestorsFriend on 09.07.17 at 8:46 pm

Someone’s gotta cover the costs of government. The issue is to make it more fair. Is the current system the most fair?

I stayed out of The Greater Fool fair tax debate but a couple of years ago I was reading The Fair Tax USA website and their thoughts on the matter were that a flat sales tax of about 35% would be the fairest tax. Since everyone makes purchases a flat sales tax is the fairest. Everyone pays the same rate no matter their income level. Since wealthier people spend more in dollar amounts they also pay a fair amount. What was interesting was that their conclusion of the flat sales tax was the same idea that the USA Founding Fathers implemented.

To go further on tax fairness people can look up The Alpha Strategy by John Pugsley. I’d say more but people would lose their sh*t. Pugsley reasons out that government exists to take money from one person and give it to another that’s why minimal government and free markets are the fairest.

#82 Leo Kolivakis on 09.07.17 at 8:48 pm

But the biggest risk of all is global deflation hitting the US and crippling the Canadian economy for a decade. This is why I openly stated the Bank of Canada is flirting with disaster….

Continuing with what I read in The Alpha Strategy. Pugsley claims that the only cause of inflation is the printing of more money. For example, if I have an apple that costs 50 cents and the government creates double the amount of money currently in existence then the apple now costs 100 cents. This according to Pugsley is the sole cause of inflation.

Now since the US Fed has had three rounds of Quantitative Easing (money creation/printing) vast inflation should have occurred; and it did but it went into the stock market. Now if the US Fed carries out Quantitative Tightening (money removal) then deflation should occur in the amount that Quantitative Easing (should have) created inflation. Hence, a huge deflation risk for the US.

Flop, I’ve been lurking here for years but I never read the comments until I started writing so I never read any of Boom’s posts. From what everyone is writing about him, I think I missed out. You’re a man of your word, Flop.

#134 Rates Vs Capital on 09.08.17 at 12:19 am

#39 Mark on 09.07.17 at 7:36 pm
“One thing I haven’t seen addressed in full in your blog yet (I am a newish reader to be fair) is the influence of foreign money in Vancouver”

The problem with that ‘foreign money’ theory is that there just isn’t any evidence of it showing up

——–

Oh my, these are exciting times that will soon prove whether low interest rates or foreign capital are the primary drivers of the affordability crisis in Metro Vancouver and the surrounding communities.

It truly is amazing that the influence of foreign capital is so heavily denied when simple google searches yield provincial data and academic research on the issue.

First, it was apparently ‘racist’ to discuss foreign buyers – I did not know ‘foreign’ is now a race – you better tell the Americans, Chinese, and British buyers they are all a race now; then foreign capital purchases were restricted to the higher end of the market which apparently has no impact – its not like once a house sells for a high price that the next neighour selling says, ‘that was too much, I will lower my price for local buyers’; then foreign capital purchases were apparently restricted to certain neighbourhoods which then morphed into certain cities – provincial data, not the real estate franken numbers, showed 20% or more of purchases in cities like Richmond and Burnaby were from foreign capital.

Always keep in mind this simple fact – provincial data, not realtor franken data, showed foreign capital constituted over 20% of purchases in communities like Richmond and Burnaby – two of the largest cities in Metro Vancouver.

http://www.theglobeandmail.com/news/toronto/ontario-isnt-moving-fast-enough-to-track-foreign-buyers-observers/article34074430/?utm_content=buffer64ac7&utm_medium=social&utm_source=twitter.com&utm_campaign=buffer

Now also keep in mind that only 8% of marginal buyers were enough to cause a 32% national decline in prices in the US.

Hmmm….

With interest rates rising, and the OSFI changes being implemented in Fall, we will know in a few short months whether indeed its simply low rates and easy credit that drives the YVR market.

I can guarantee you that all the YVR sidelines and bears will be disappointed and single family home prices remain in the stratosphere.

Of course, you can listen to Mark who has been and continues to be the YVR equivalent of Baghdad Bob….

#135 Millennial Dude on 09.08.17 at 12:36 am

26 year old millennial here. I watched the world economy crash as I graduated high school because of subprime and didn’t forget it. I’ve known something was up with the housing market seeing what’s happened in Toronto and Vancouver and seeing people a little older than me overextend to buy houses they couldn’t afford in inflated markets. As well as the obvious international element here in BC.

#136 Ponzius Pilatus on 09.08.17 at 12:36 am

#23 S.Bby on 09.07.17 at 6:59 pm
That dog is having more fun than I am.
———–
That’s why you should get the hell out of the Lower Mainland, or even out of Canada.

#137 raisemyrent on 09.08.17 at 12:37 am

I looked at the couch potato stuff ages ago because someone mentioned it to me or something. As far as I recall, it was too dumbed down and plagued by more marketing than content. This is when I was starting up, so to speak, but the defectors went off anyway. I might have not known much back then, but I’m not dumb.
Not sure how saying that you need to pay attention to his changing advice match the couch potato image.
From what people have said so far, it sound even more lacking than I could tell back then, but people love a nice website (it saves them from thinking and doing work).
P.s. For once I read the full comments and no Smoking Man? I feel like a millennial renewing their mortgage.

#138 Rider Nation on 09.08.17 at 12:42 am

Saskatoon is a nice little city, probably my first choice if I give up small-town life.

#139 Ian on 09.08.17 at 12:44 am

Just got the latest Stockcharts email, and the USD chart is literally the worst chart I’ve ever seen (symbol UUP). It is stunning. USD falling all year, and now literally breaks all support and is caving south.

Gold not surprisingly rocking again overnight.

#140 Pete from St. Cesaire on 09.08.17 at 12:48 am

Think of last fall’s moister killing stress test, which simply saw prices go higher (yes, Bank of Mom and Dad and alternative lenders facilitated this).
———————————————————-
Yep, that’s all part of the plan to destroy the middle class. The government knew perfectly well that this would be the outcome, that the parents would step up to the plate to ensure that their kids wouldn’t “fall behind” in their keeping up with the neighbours kids. Nor would the parents be wise enough to not throw good money after bad when the kids couldn’t afford that which they had contracted for.

#141 yukyukyik on 09.08.17 at 12:52 am

Garth

You really made that potato into a small fry

#142 Ponzius Pilatus on 09.08.17 at 12:54 am

Branson’s and Trump’s estates in the Caribeans wiped out.
God’s message to these capitalist assholes.
Nature always wins.

#143 BS on 09.08.17 at 12:58 am

121 YC on 09.07.17 at 10:59 pm

@blacksheep I live in Saskatoon, I think it’s a great place if you have a good job. Can get almost anywhere in 20 minutes so not wasting 2 hours a day commuting, almost all the big stores.

You know when a 20 minute commute and almost all the big stores is the only selling points you can come up with in the city you live there ain’t much there.

#144 Andrew t on 09.08.17 at 1:15 am

#96 Fran Deck Jr. on 09.07.17 at 9:35 pm
http://www.breitbart.com/big-government/2017/09/06/trump-says-tax-plan-will-cut-taxes-for-middle-class-families/

In a speech Wednesday, President Trump told middle-class Americans that “it’s your money, not the governments” as he outlined one of the most aggressive proposed tax cuts in US history … while on the west coast Canada’s postmodern PM is promising to punish over achievers and middle income business owners with much higher taxes at a time when most Canadians have less than $200 in their pocket every month after paying their bills and their outrageously high taxes.

Canada desperately needs a leader like Trump.

Hilarious! King Clueless the First?
Sure thing pal.
From the article “Details of the plan remain guarded”.
Classic. If by guarded they mean non-existent.
At least it only took me a minute to read those three paragraphs of in depth reporting. As far as wastes of time go, that was painless.

#145 Karma on 09.08.17 at 1:22 am

#125 Leo Kolivakis on 09.07.17 at 11:15 pm
“1) The global jobs crisis: High structural unemployment, especially youth unemployment, and less and less good paying jobs with benefits.”

There is no global jobs crisis. Perhaps a western one, but not global. Despite your “high structural unemployment” claim, US wage growth was 2.95% y/y in May 2017, which is obviously higher than US inflation.
——————————————–
“2) Demographic time bomb: A rapidly aging population means a lot more older people with little savings spending less.”

This is a non-issue. It will just change the composition of their spending from private consumption to public consumption via healthcare costs.
——————————————–
“3) The global pension crisis: As more and more people retire in poverty, they will spend less to stimulate economic activity. Moreover, the shift out of defined-benefit plans to defined-contribution plans is exacerbating pension poverty and is deflationary. Read more about this in my comments on the $400 trillion pension time bomb and the pension storm cometh. Any way you slice it, the global pension crisis is deflationary and bond friendly.”

Your comment is contradictory. Low interest rates exacerbating the pension liabilities as they rise faster than the asset accumulation to offset the future payouts. Higher rates will reduce the liability side, while help the assets side of the pensions. Holding rates artificially low, as the CBs have done for nearly a decade, will worsen the situation you are concerned about.
———————————————–
“4)!Excessive private and public debt: Rising government and consumer debt levels are constraining public finances and consumer spending.”

Yes, this is deflationary. But who’s fault is that? Lower rates won’t help this problem.
——————————————-
“7) Technological shifts: Think about Amazon, Uber, Priceline, AI, robotics, and other technological shifts that lower prices and destroy more jobs than they create.”

They certainly keep a lid on prices, but not sure that they destroy more jobs than they create. Creating efficiencies allows people to spend more throughout the economy which just changes the composition of jobs rather than a net loss of jobs. Also, lowering prices by improving services shouldn’t be considered a bad thing. A mindset change needs to take place to acknowledge benign deflation that technology creates. This type of deflation shouldn’t be fought with low rates.
—————————————————-
“It’s not rising rates but debt deflation and soaring unemployment which will kill the Canadian housing market for a very long time.”

Debt deflation is caused by two things: 1) rising rates make less loanable funds to households and businesses, 2) defaults and bankruptcies.

#146 Ian on 09.08.17 at 1:29 am

#105 deflation

Just so you have the correct delineation…Mark and Leo are not in any WAY talking about the same things. You lumped them in the same category, which means you must be very new here.

Mark has repeated over and over that ‘inflation in Canada is below the BoC target, so why wouldn’t the BoC cut rates’, and I and many others have been trying to tell him that the BoC DOES NOT GIVE A TOSS and is solving another rather more pressing issue, namely that our debt levels are crisis-inducing and need to be imploded.

What Leo is talking about is debt collapse deflation, which I am betting heavily on (tons of gold exposure) and completely agree with.

And PS keep your imbecilic ‘what have you done lately?’ ad hominem shit to yourself. You don’t know a singular thing about me. We discuss real economic issues here.

#147 Russ on 09.08.17 at 1:31 am

YC on 09.07.17 at 10:59 pm

I live in Saskatoon, I think it’s a great place if you have a good job. … a day commuting, almost all the big stores. I travel to Vancouver for work quite regularly. You couldn’t pay me to move there.

Sure it gets cold in winter but you can also see the sun here damn near every day of the year.
==============================

A true West Coaster doesn’t need to see the sun every day.

We know it is the cause of Global Warming.

Learn much. Our prairie grasshopper.

#148 JLFMM on 09.08.17 at 1:37 am

Looking forward to Mr. Turner’s explanation on why potato guy sucks. The only fault I find in their approach to financial education for us plebes is in asset location. Their white paper on the topic focuses on tax % reduced, not total tax $ saved. What other problems does CCP have?

#149 Remember this on 09.08.17 at 1:50 am

#90
Shake your head at Boomers trying to print something.
Just remember Boomers taught Moisters how to use a spoon to feed themselves

#150 Steve French on 09.08.17 at 2:01 am

It’s official. No storm on record, anywhere on the globe, has maintained winds 185mph or above for as long as Hurricane Irma.

But hey, thank goodness climate change is all a hoax, or at best caused by liberal sunspots, right Smokey?

#151 Arne on 09.08.17 at 2:38 am

Since when do we give a crap about protecting doctor’s incomes? Or lawyer’s for that matter. They’re just another noisy minority.
I just read this: https://beta.theglobeandmail.com/news/politics/trudeau-says-tax-changes-will-not-hit-those-making-less-than-150000/article36195335/
And you know what? I believe him. I make WAAAY less than 150k a year, I’m not incorporated – how exactly are these changes going to hurt me? If you don’t like it doctors, then go. We’ve got too many of you anyway.

#152 @ #97 Tax Payer on 09.08.17 at 2:49 am

#97 Tax Payer on 09.07.17 at 9:36 pm

2 classes of Canadians without tax change: Morneau

Way to go Canada, excellent move by Liberals, well done Hon. Morneau, we are with you.

http://www.msn.com/en-ca/money/topstories/2-classes-of-canadians-without-tax-change-morneau/ar-AArm2lr?ocid=sl
———————————-

Define “we”.

#153 Where's The Money Guido? on 09.08.17 at 2:50 am

Re: #26 jess on 09.07.17 at 7:04 pm

September 7, 2017 — Equifax Inc. (NYSE: EFX) today announced a cybersecurity incident potentially impacting approximately 143 million U.S. consumers. Criminals exploited a U.S. website application vulnerability to gain access to certain files. Based on the company’s investigation, the unauthorized access occurred from mid-May through July 2017. The company has found no evidence of unauthorized activity on Equifax’s core consumer or commercial credit reporting databases.

Just a note: 4 execs sold off ~10% of their shares yesterday, just before the announcement, even though the breach was at the end of July but was kept from the public…. http://www.marketwatch.com/story/equifax-executives-sold-stock-after-data-breach-before-informing-public-2017-09-07

Also more on the BC Port Mann bridge fiasco….
http://www.cbc.ca/news/canada/british-columbia/b-c-greens-call-for-public-inquiry-into-port-mann-project-1.4184391

Just like Garth said, more turbulence in the markets….for the LOSERS…it seems the top-siders are covered, eh Garth?
Same as it ever was…….

#154 nubbers on 09.08.17 at 2:53 am

After a conversation with a house-owning relative in Toronto, I can well believe that the crash is only patchy so far.

I would regard him as well informed, yet he seemed to be completely unaware of what has happened to the property market since Easter. He seems to be of the opinion that property prices might stay level for a bit before strengthening again. Mmmm… I heard that one from my otherwise well informed friends in 1989.

I guess the onset of the crash will be held up by vested interest spin and by our own ability to filter out news that we don’t want to hear.

#155 Big City Livin' on 09.08.17 at 2:54 am

Hi Garth,

I’ve been reading your blog for a few months now – ever since I moved my family from Ottawa to Vancouver and realized how nutty the Vancouver market is. “Smoke and mirrors” seems like the best way to describe it. Sadly, my husband and I are in our 30s and we left our cute, little bungalow in Ottawa behind to live with my parents until the big earthquake hits and the housing market has no choice but to correct itself.

Our sorry situation is why I got hooked on your blog, but I’m actually more interested in another topic you frequently reference – ETFs…. One of your more recent blogs mentioned my lot of millennial cohorts who have multiple university degrees (myself included) but are financially illiterate when it comes to taking ownership of one’s own investments. I’ve accepted your challenge and have been researching ETFs for dummies for the last few weeks and have come up with a well thought out investment plan that is balanced and diversified. The problem is, there are so many ETFs to choose from and geopolitical events, interest rates, etc. are ever-changing. I have no idea which ones to choose and it feels like I’m trying to pin down a moving target. You give your readers dribs and drabs on a fairly frequent basis, but you never deliver on the elusive pot of gold at the end of the rainbow. I have $130K saved and add more to that each month that I live with my parents. What I’m asking for is your handful of ETFs to invest in at this very moment. I can take it from there and put the plan into action. Please help me to move my family out from under my parent’s roof so that we can be financially independent in this concrete jungle of Vancouver. No pressure of course.

#156 Where's The Money Guido? on 09.08.17 at 2:57 am

Addendum: September 7, 2017 — Equifax Inc

My conspiracy leanings urge me to look at who breached Equifax….. and what is coming.
Who has money where is what that breach info will tell you and the ppl with that info will plan the next year’s, or next month’s, events.
It is October then, isn’t it…….
My take is the breach is a lot closer to home than the Russian-Triad Mafioso….
But then again it could be our hero, Snowden…..
Or is he our hero, since he isn’t dead yet…

#157 Where's The Money Guido? on 09.08.17 at 3:08 am

I just read the best quote ever!!!!!

Aww, the super-rich– terrified of getting a little less rich…

#158 ulsterman on 09.08.17 at 4:12 am

Jon: “When I get all bearish about housing in the lunchroom I still get laughed at (despite the 18% quarterly decline of detached housing) because, ‘There is an endless supply of Chinese money’ and ‘There are 100,000 new residents in the lower mainland every year’.”

Jon, your work mates are right to laugh at you. Many here have been making all the same arguments for 15 years and the end result has been an unrecoverable, lost opportunity combined with the insecurity of tenancy that come with renting in Vancouver. While we (and you) were busy analyzing why real estate wasn’t a good deal, your simple coworkers bought places and watched them triple or quadruple in price. Every year there was a new regulation or macro-economic storm that was to cause a price crash. Never happened of course. 15 years later your co-workers are 2/3rds of the way through paying their 2003-sized mortgage and you are sitting imagining how big your portfolio COULD have been had you invested the difference between rent and mortgage. But you didn’t.

#159 BillyBob on 09.08.17 at 4:19 am

#123 Millmech on 09.07.17 at 11:08 pm
#67
Really wages going down?
Had a meeting with management and our department,in order to keep/retain our personnel we got another weeks paid vacation(up to three now in the first year),a $1/hr retention bonus to be paid out quarterly,$2/hr to get our level one first aid ticket and there is already 4 level 2 per shift and $2/hr for each addition trade certification.I received a $7/hr raise on my next cheque for just going to work every day.
Best part is if I don’t wish to stay there I am sitting on 6 open job offers.
#5 MF
I will be taking my new one week of vacation and working a shutdown for 9days and will make enough on that job to cover my rent for 12 months,rent costs me less than 10% of net monthly income from the regular job.Who in their right mind pays 70% of their income on shelter?
Move to a lower cost area and get ahead!

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

Exactly. Suggestions have been made in that regard, but it seems that it’s easier to remain in place and complain, complain, complain.

I was highly amused at some of comments yesterday about Dubai from the likes of Stock Picker and MF. Completely, utterly false stuff about the place. I can’t even be bothered to try and correct them, so many false statements. I’ve realized that people just make up things in their mind to self-justify their choices and inaction. Why else would one denigrate a place they’ve never been, never personally experienced, and for those who can participate, offers the possibility of the things they complain about not having? Makes me wonder if they even realize just how self-destructive their willful ignorance is. It’s not like they’re fooling anyone who’s actually lived there, done that.

So stay where you are, MF, shut out of the housing market, with no wage increases, little vacation time, paralyzed by fear of change and investing. But if that’s to be your choice, how about just living with it instead of fretting about it all the time?

Forgive the reference on this godless heathen site, but “Can all your worries add a single moment to your life?”

#160 Dan.t on 09.08.17 at 4:57 am

To sum up YVR and it is true story.

About 5 months ago I was in YVR and a friend (gov worker) who’s father has been building houses for 30 years, so that answers why he can live in YVR with a small rental unit, but brother speculating huge on renovating second house and expecting a tax free windfall (guess who lives there for 1 year so they can game the tax free loophole?),

anyhow, friend just bought a pre-sale, plus now wants to invest in REIT’s . That is called diversification in BC and the whole province thinks the same way. Anything Real Estate related is a good investment- everything else sucks.

Believe it or not, I was happy to leave due to Real Estate talks alone, it was like walking into a bubble while I was there

and it is insane how that effects you, and I don’t even live there and yet

I had an urge to liquidate my investments, get saddled up on debt for a 2019 presale because, you only need like 60k and why not load up on a few pre-sales…(you feel like you have leprosy if you are not “in the BC market”).

everyone, and I mean everyone I talked to ONLY talked Real Estate so I hope it blows up huge… it is so annoying. The last year or two I made valid (5-6 points based on fundamentals, cycles, rising interest rates, bla bla) and gave up since prices just got stupider and stupiderer. I guess it is true that fundamentals don’t apply in bubbles.

I couldn’t handle the 3 real estate truths:

true quotes:

“real estate never goes down”

“it’s only 0.25% rate hike, people will still pay their mortage, they will never raise rates” (this was before the first rate hike)

“its different this time!”

I have a few more “true” quotes but I ll leave it at that. Actually, ok, “no supply” since every resident owns on average 2-3 properties and “everyone wants to live here”, right, like everyone wants to drop 70-85% of their take home pay for the privilege of renting in YVR or buying a 680k POS 1 bedroom box.

It seems pretty obvious that only serious intervention will change that mindset.

Give everyone access to free money, give massive incentives to chase ONLY one asset, brainwash them for 15 years with Real estate sponsored propaganda and then try to change it in a few months….no chance.

This will play out slow and painfully. Or maybe it really is different in BC.

On a side note is the NDP doing anything? Thought they won based on their affordable housing platform?

#161 The Limited Sage on 09.08.17 at 5:13 am

My wisdom only takes me so far, hence the name.

Gartho, echoing other (limited) bloggers here, could you please elaborate more on your Couch Potato comment?

Outside of Fool and MMMstache, CCP has been my other go-to resource. Am I wrong for assuming this?

#162 FLHTK on 09.08.17 at 5:43 am

I can’t believe that houses in Barrie are still being listed for ridiculous amounts….my realestate buddy says when people are putting in bids….they are asking what’s the lowest the seller will go….thats like kijiji type buying haha. It is a buyers market for sure.
Whats wrong with couch potatoe portfolio? How has yours lost for the last two years? Time to rebalance i’d say.

#163 Happy Interest Rate Hike? on 09.08.17 at 6:40 am

Before getting too happy about interest rates growing up, how much more will it cost to service government, municipal and other “public debts”?

This amount will have to be collected by increased taxes.

Will your personal gain due to interest rate hike offset your increasing taxes that will follow?

Or you just hope that the government will just kick the can down the road and leave this bill to future generations?

#164 Ian on 09.08.17 at 7:38 am

#46 Doghouse

‘Septic tank with windows!!’

That was damn funny. Well done :))

Some of these condos I’ve seen in the GTA, they seem like they were built many decades in the future when robots will build everything and someone programmed them with ‘please build the ugliest unit possible with the most crap workmanship imaginable, and get it done asap as we need to list this shit and get it to market quickly before the bubble bursts’

#165 Where's The Money Guido? on 09.08.17 at 7:41 am

Get your black suit on
And be a son of a bitch
I need a scratch from the hand of the ass that sold me the itch
It’s a big sell out
And it’s a big party
High noon Amsterdam time and the action is free
Sweet sixteen
High noon Amsterdam time and the action is free
From an old boomer
It’s a big sell out
It’s a big party
High noon Amsterdam time and the action is free
Gett your black suit on
And be a son of a bitch
I need a scratch from the hand of the ass that sold me the itch

Yeah it’s all for free
Yeah it’s all for free
Yeah it’s all for free
Yeah it’s all for free

Thank god and it’s all for free

#166 Wrk.dover on 09.08.17 at 7:47 am

Deflation is happening. The deflation that I refer to is the deflating value of tangible assets such as what you would trade in or sell on Kijiji, Craigslist and E-Bay to liquidate. This is happening because potential purchasers are increasingly financially squeezed, plus, most millenials only buy new, decreasing potential resale market size.

At the same time as this deflation builds, there is an inflation on the tangible assets that you purchase new, because those sellers are trying to increase a diminishing bottom line.

Conclusion: our stuff deflates while corporate stuff inflates.

M64NS

#167 Tony on 09.08.17 at 8:00 am

Canada’s Being TAXED Out Of Existence! – Trudeau Raises Taxes AGAIN!

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

#168 Smoking Man on 09.08.17 at 8:29 am

#142 Ponzius Pilatus on 09.08.17 at 12:54 am
Branson’s and Trump’s estates in the Caribeans wiped out.
God’s message to these capitalist assholes.
Nature always wins.
….

Free renovations. It’s called Insurance.

#169 Smoking Man on 09.08.17 at 8:31 am

#150 Steve French on 09.08.17 at 2:01 am
It’s official. No storm on record, anywhere on the globe, has maintained winds 185mph or above for as long as Hurricane Irma.

But hey, thank goodness climate change is all a hoax, or at best caused by liberal sunspots, right Smokey?
…….

Yeah sunspots. If you think other wise write a check to the Un if it makes you feel better.

#170 Smokingiscool on 09.08.17 at 8:56 am

Long time observer first time writer!

I want your sales pitch on why Mr. potato head is so bad. You have to have known that you’d provoke everyone here and trigger them with that comment haha

#171 Balmuto on 09.08.17 at 9:00 am

I can’t speak for the GTA in general but I can asssure you the rent/own ratio in downtown is not favourable to the renter. I’ve rented and bought and sold condos in Toronto and I’m well versed in the economics of rent vs. buy in T.O. The condo I’m living in right now I bought just a year ago and I see identical units in my building being rented out for close to my carrying costs despite the fact that I only went in with 5% down. There’s no real savings in renting in T.O. so all this notion about coming out ahead by reinvesting the “difference” is just a fantasy. Plus you need permission from your landlord to do anything to the place and you can get kicked out when the landlord wants to sell the place as happened to me last summer. No thanks. Maybe if interest rates spike dramatically renting will look better but right now it’s a mug’s game.

#172 Danna Smith on 09.08.17 at 9:07 am

To everyone, it seems to me that socialism and socialistic policies, higher taxes, more regulation, higher energy costs, etc. etc. will take over what little capitalism we have left and everyone will be much poorer year after year.

#173 Victor V on 09.08.17 at 9:08 am

Canada’s jobless rate dips to 6.2% as economy gains 22,200 jobs

http://business.financialpost.com/news/economy/newsalert-canada-adds-22200-jobs-in-august-unemployment-rate-dips-to-6-2-2

#174 marketpundit on 09.08.17 at 9:22 am

Hmm… So, this is how recovery looks like. Loosing 88K full-time high/decent paying jobs and gaining 110K part-time jobs, somehow makes it a 22K jobs gain for the month of August. Participation rate is @ 65% and we have 6.2 unemployment rate.
From Canada Stats:
“In August, more people were working in finance, insurance, real estate, rental and leasing as well as in transportation and warehousing. At the same time, employment fell in manufacturing, in the “other services” industry and in natural resources.
There were more self-employed workers in August, while the number of employees was little changed in both the private and public sectors.”
Important to note: employment fell in manufacturing and in natural resources.
Aren’t those the sectors that are of the most importance to Canada.

#175 JohnK on 09.08.17 at 9:29 am

It’s could only get so high in Toronto, the bottom line is that people in Toronto come here to work first, this is not YVR and real estate has been super expensive for years, and things can be expensive and people will still buy, but it has simply reached a point where no one can buy anymore.

RE has been unaffordable for the average Torontonian for years, but guess what, they still got the credit and bought it as the mentality is “If I can get my hands on it, it means I can afford it.”

I’m a moister and none of my moister friends have anywhere near the money to buy now, I know two couples that have moved out of TO because they want to have kids and cant afford to buy here. One off to Kingston another off to Ottawa.

It’s one thing to spend 50% of your take home on a roof over your head, it’s very different when you are pushing 70%+ and this is were this market is at.

Please be mindful that Toronto still has a very high immigrant population, I am one of them and so are many of my moister friends who are sons and daughters of immigrants who themselves are still paying mortgages so the Bank of Mom simply doesn’t exist for a good chunk of the population. So maybe I will bring in a new perspective on the housing market here.

Immigrant parents of someone close to me got their mortgage in 94, 3 years ago they took HELOC to do a full renovation (nothing but brick walls left). They got an 800k estimate on the value of their home (semi detached) at the time. Now I believe they owe the bank something like 300k that they borrowed against equity that is eroding daily….what a position to be in after paying a mortgage for over 20 years eh?

Someone else close to me, his parents had to sell off their house so that the kids can keep the house that they purchased because the wife lost her job, they were so stretched that her EI payments were not enough for them to pay the bills…Now they have five incomes earning adults paying a single mortgage.

And there must be tens of thousands of cases like this around the city.

You’ve got moisters who simply can’t get in anymore no mater what, and you’ve got cases like the ones mentioned above all over. I’ve held the opinion that The Bank of Mom group of Canadians was limited and could only last so long, I believe that part of the market has tapped out, there isn’t a conveyor belt of hipsters moving into Toronto with their parents money anymore.

Add to that stress tests and raising interests rates and it all spells disaster.

#176 n1tro on 09.08.17 at 9:41 am

#150 Steve French on 09.08.17 at 2:01 am
It’s official. No storm on record, anywhere on the globe, has maintained winds 185mph or above for as long as Hurricane Irma.

But hey, thank goodness climate change is all a hoax, or at best caused by liberal sunspots, right Smokey?
——————————————-
Please explain the connection between Irma and climate change if it isn’t a hoax.

Largest earthquake in 100 years just happened off Mexico last night. Was that due to climate change too? If so, please explain to the rest of us how man made activities caused the earth’s tectonic plates to shift like it did.

#177 CJBob on 09.08.17 at 9:56 am

#99 Piano_Man87 on 09.07.17 at 9:50 pm
It’s easy for no one to track his success if he keeps changing his advice…
______________
There are 3 clearly outlined choices and the results of each are published on his site every January. The whole point is he couldn’t make it EASIER to check the results.

#178 Dollarama nation on 09.08.17 at 10:06 am

Yeah baby… it’s a dollarama world.. there’s gold in cheap shit

http://www.calgaryherald.com/dollarama+profit+soars+sales+rise/14579285/story.html

#179 Tbone on 09.08.17 at 10:07 am

# 142 Ponzious

Those ass holes probably had insurance I would think ?
Probably not out of pocket for anything .
They aren’t exactly dumb , far as I can tell.
You may not like them, but they are probably doing OK.
Cheers.

#180 PotatoPerson on 09.08.17 at 10:17 am

Garth, what is wrong with the potato guy? Is it that he switched to 3 funds? I’ve been renting and potato-ing for almost ten years now, and I’m very happy with it. My allocation is: 5% Real Return Bonds, 12% Regular Bonds, 18% Preferred, 6% International REIT, 26% International Stock, 20% US stock, 11% Canadian stock, 1% cash. My annual returns since 2012 are: 6.09%, 9.26%, 9.06%, 1.78%, and 4.15%. And I’m currently up 4.2% this year. Average return over 6%. All in ETFs. Bonds and REITs in registered. US in RSP to avoid withholding tax.

#181 Gonkman on 09.08.17 at 10:17 am

I use TD E-Series as it is easier for me.

I am looking for an Average 5.5% return a year and have based my plan around that number. The Potato plan has made me a lot more money since 2014 when I dumped my Financial Advisor (Salesman) and his Ridiculous MER Funds.

This year has been sucky not because of the Markets (Well TSX hasn’t done much) but the Canuck Buck has risen $0.13 since Jan 1st and is making YTD look worse than it is using a Unhedged US Index Fund.

I have faith Turdos Policies will cause havoc and the Loonie will drop again and all will be fine by the time I need to cash out. Because NAFTA needs more Gender Equality and Climate Change measures…lol.

Couch potato with 30% Bonds/20% CDN/50% US (Unhedged)
2015 +6.11%
2016 +7.62%
2017 +2.67% YTD

#182 TurnerNation on 09.08.17 at 10:31 am

We have a lifetime short sell opportunity on Teck.B and Bitcoin/USD. Tell your future grandkids.
Be a BSD.

#183 Tater on 09.08.17 at 10:34 am

#102 MF on 09.07.17 at 9:56 pm
#55 nick on 09.07.17 at 7:58 pm

Meh i’m in a good mood today so I’ll entertain your post.

Salaries have not increased that much in decades. This we know. House prices have gone crazy in the last 15 years. This we also know. A lot of that increase in cost has been passed on to renters.

Whereas the rent/own ratio still may favour renting, it does not negate the fact that rents are high when compared to average salaries.

As I have wrote here before. Renting, saving and investing the difference is a good place to be. So is owning and having your property increase in value.

What is not a good place to be is renting and having nothing left over to invest.

MF

—————————————————————-

GTA home prices didn’t really get out of line until 2013. Up until then they were basically growing at CPI +2.5% which is pretty typical, going back to the 60s.

#184 Sometimes a little perspective is required... on 09.08.17 at 10:57 am

#67 Personal Corp Death Watch? on 09.07.17 at 8:30 pm
Maybe Garth can follow up the “Cowtown Death Watch” with the “Personal Corporation Death Watch”.

Each week we could hear from the former income sprinklers about how hard life is now that they pay their full taxes. (I agree that many already pay a boatload of taxes, but these are also the people who voted Trudeau into power). Maybe an interview with some of their 4 year old children discussing how they pay for Lego now that the monthly dividend cheque has dried up. Those kids put a lot of blood and sweat into that dental practice. Preventing them from collecting their due payment (at the lowest possible tax rates) is a travesty.

I’m sure the dogs would also love to hear the stories of all the business owners who closed up shop in protest, and the doctors who reduced their schedules to 2 days per week, giving up the Point Grey mansion for a double wide on a pad in Surrey and trading in the Cayenne for a Hyundai.

Another week it could be “Would Have Beens”, people who had great potential but decided to smoke dope and play nofriendo in their parents’ basements out of fear of the tax man.

As for fomo girl, she should buy now if she can hang onto the place. Wages are going nowhere but down and taxes are going nowhere but up. Try to think long term young lady! You would be done with mortgage payments by the time you’re 51, not bad at all. The TSE has done nothing for years, imagine how those guys feel about the wealthy house humpers.

–Best post of the day. Hands down. The lego line had me snorting my coffee…

Just wanted to let you know that I appreciate your sense of humour. Keep posting.

#185 jess on 09.08.17 at 11:14 am

new scams vs old scams

“Around the U.S., deed theft has emerged as one of the most sophisticated and devastating frauds ever to menace homeowners. Foreclosure “rescue” scams that have stolen thousands of dollars from individual homeowners in the years since the housing collapse have been pushed by savvy perpetrators to their limit. They use lies to convince the desperate to sign over their title, then force them into homelessness or a years-long legal battle.

“The scammers are no longer content with stealing $5,000. Now they want the whole house,” said Dina Levy, who heads the Homeowner Protection Program in the New York attorney general’s office, which has spread word about deed theft and prosecuted culprits.

=
Foreclosure Fraud Is Supposed to Be a Thing of the Past, But It Happens Every Day
David Dayen
https://theintercept.com/2016/05/18/foreclosure-fraud-is-supposed-to-be-a-thing-of-the-past-but-it-happens-every-day/
May 18 2016, 2:30 p.m.
It’s virtually impossible for a foreclosure case on a securitized subprime loan from the housing bubble era to NOT involve false documents.
https://www.scribd.com/doc/281414769/Updated-McDonnell-Analytics-Final-Report-City-of-Seattle-Review-of-Mortgage-Documents-Hosted-by-KingCast-Mortgage-Movies

.==========
the collapse of the rule of law in the home mortgage industry
Chain of Title
How Three Ordinary Americans Uncovered Wall Street’s Great Foreclosure Fraud
David Dayen
https://theintercept.com/2016/05/18/foreclosure-fraud-is-supposed-to-be-a-thing-of-the-past-but-it-happens-every-day/

the “profiteers” fraudulent foreclosures and fake/forged documents
https://www.thenation.com/article/wilbur-ross-and-steve-mnuchin-profiteers-of-the-great-foreclosure-machine-go-to-washington/
We are joined by David Dayen, whose recent article for The Nation is “Wilbur Ross and Steve Mnuchin—Profiteers of the Great Foreclosure Machine—Go to Washington.”
https://www.democracynow.org/2016/12/2/bankers_behind_great_foreclosure_machine_join
=================

Whistleblower claims Wells Fargo misled borrowers, government
Updated on May 13, 2016 at 1:31 PM Posted on May 13, 2016 at 6:00 AM
“The company told me to lie about that,” he said in an interview. “I don’t think that’s right, for the customers, for the company or the entire country.”

http://www.oregonlive.com/business/index.ssf/2016/05/whistleblower_claims_wells_far.html#incart_big-photo

#186 Doug in London on 09.08.17 at 11:36 am

Why would anyone want to buy a grossly overpriced condo when there are far better places to put your money? For example Enbridge, ENB, is now trading below 50 bucks! Similarly Inter Pipeline, IPL, is quite cheap these days also. Although off their lows, preferred share ETFs like CPD and XPF are still a good buy and XRE is below 16 bucks. At these prices, the above stocks and ETFs pay some decent yields.

#187 IHCTD9 on 09.08.17 at 11:44 am

#5 MF on 09.07.17 at 6:35 pm

People would rather pay their own mortgage, instead of handing 70% of their income towards some idiot “landlord”.

MF
_______________________________________

Just a couple observations:

Anyone who liquidates 70% of their paycheque towards rent has made some really bad choices in life.

Anyone who liquidates 70% of their paycheque towards rent will not be buying any type of SFD, and could only hope and dream to qualify for a box where the Condo meetings turn into gunfights a couple times a month.

#188 HaHaHa on 09.08.17 at 11:44 am

#17 quoting the cbc math. You liberal tax idiots have convinced me to retire. Why should I continue to strive to work spending over 100 hours a week away from home. on call 24/7. weekends holidays. To make 150000 grand a year? I am gonna join you in 2018 take a pension and vote liberal from here on in to shove it up your asses. No talking sense to you mental midgets you need to feel the pain of paying off liberal graft for your next 30 years. Will be voting NDP in Alberta too just to make sure we stay a have not province. Burn baby burn

#189 Occasional Poster on 09.08.17 at 11:53 am

According to David Fleming, a respectable and successful realtor, the prices have bottomed and will be going up from here onwards. David Fleming makes a number of valid arguments. David Fleming is backed by logical arguments in comments area of the post. Prices will be going up soon!

http://torontorealtyblog.com/archives/18969

Thanks, David Fleming. — Garth

#190 Fake News Again on 09.08.17 at 11:54 am

#175 n1tro on 09.08.17 at 9:41 am
#150 Steve French on 09.08.17 at 2:01 am
It’s official. No storm on record, anywhere on the globe, has maintained winds 185mph or above for as long as Hurricane Irma.

But hey, thank goodness climate change is all a hoax, or at best caused by liberal sunspots, right Smokey?
——————————————-
Please explain the connection between Irma and climate change if it isn’t a hoax.

Largest earthquake in 100 years just happened off Mexico last night. Was that due to climate change too? If so, please explain to the rest of us how man made activities caused the earth’s tectonic plates to shift like it did.

__________________________________

Exactly. You have to be a total brainwashed tool not to understand that Global Warming was invented for the sole purpose of making money and raising taxes.

#191 Capt. Serious on 09.08.17 at 11:58 am

@ #155 Big City Livin’ on 09.08.17 at 2:54 am

VCN – Canada All cap
VXC – Global All cap excluding Canada
(there, all your equities in two ETFs)
VRE – Canadian REIT
CPD – preferreds

bonds:
VAB if you want one ETF for all.
I use VSB and VSC for short duration and to more heavily weight corporate bonds (VSC).

With the exception of CPD, these are all Vanguard products. Bluntly put, I trust them to execute their mandate well. They have a long history with indexing products. The equivalent products from BlackRock may have better liquidity and narrower spreads from higher daily volume due to being around longer, and are fine choices as well.

#192 Pre-retiree on 09.08.17 at 12:37 pm

#17 Takes one to know one.

Thank you so much for picking in this senseless statement by our PM Trudeau. I cannot even believe it has been quoted left and right without any comments by journalists, as if it was accurate.

#193 Gravy Train on 09.08.17 at 12:38 pm

#134 Rates Vs Capital on 09.08.17 at 12:19 am

“… [I]t was apparently ‘racist’ to discuss foreign buyers….”

No, it’s not racist; it’s xenophobic! And you are deplorable! :)

#194 Faker, Fake News on 09.08.17 at 12:45 pm

#189 Fake News Again on 09.08.17 at 11:54 am

#175 n1tro on 09.08.17 at 9:41 am
#150 Steve French on 09.08.17 at 2:01 am
It’s official. No storm on record, anywhere on the globe, has maintained winds 185mph or above for as long as Hurricane Irma.

But hey, thank goodness climate change is all a hoax, or at best caused by liberal sunspots, right Smokey?
——————————————-
Please explain the connection between Irma and climate change if it isn’t a hoax.

Largest earthquake in 100 years just happened off Mexico last night. Was that due to climate change too? If so, please explain to the rest of us how man made activities caused the earth’s tectonic plates to shift like it did.

__________________________________

Exactly. You have to be a total brainwashed tool not to understand that Global Warming was invented for the sole purpose of making money and raising taxes.
……………………………………………………………………
Oh hell yes, whats 180 billion for Harvey and estimated 200 billion for Irma, oh shit I wonder what little Jose is going to cost? Hmmmmm Oh isn’t that interesting Hurricane Jose is now a CAT 4. Hmmmmmmmm
Yes sir that global warming crap cost more than a half a trillion dollars per year. Or does it, makes you think doesn’t it. So how much does the global warming industry make or cost? Hmmmmmmm

http://fortune.com/2017/09/03/hurricane-harvey-damages-cost/

http://www.miamiherald.com/news/weather/hurricane/article171894447.html

http://metro.co.uk/2017/09/08/hurricane-jose-upgraded-to-category-4-as-it-heads-towards-irma-battered-islands-6913528/

#195 IHCTD9 on 09.08.17 at 12:47 pm

#174 JohnK on 09.08.17 at 9:29 am

I’m a moister and none of my moister friends have anywhere near the money to buy now, I know two couples that have moved out of TO because they want to have kids and cant afford to buy here. One off to Kingston another off to Ottawa.

_________________________________________

Those two couples are probably the smartest folks you know. Keep an eye on them in the future and compare their lifestyle 15-20 years from now to those of your buddies who stayed in the GTA instead of being smart.

If I was faced with 70% of my income going to shelter no matter where I lived – I’d be outta there like my ass was on fire. It’s a no brainer.

Young 23/24 year old guy down the road bought a house last year, mortgage payment at 2.5% is like 650.00 per month. Cheaper than renting. He just bought himself a nice KX450F, him and his biking buddy go by every weekend. Two little kids playing in the sandbox. I’d guess their income at 80-90K.

It is such an easy decision to make.

#196 climate change hoax or not on 09.08.17 at 12:49 pm

#150 Steve French on 09.08.17 at 2:01 am
It’s official. No storm on record, anywhere on the globe, has maintained winds 185mph or above for as long as Hurricane Irma.

But hey, thank goodness climate change is all a hoax, or at best caused by liberal sunspots, right Smokey?

===

Check out this for your answer:

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

#197 Stan Broock on 09.08.17 at 12:49 pm

The disappearance of full time jobs.

https://ca.finance.yahoo.com/news/canada-jobs-growth-picks-august-124748413.html

Part-time jobs increased by 110,400, while the economy shed 88,100 full-time positions.

And Bill keeps insisting on fairness. BTW, part time also counts self employees.

Bill should hurry with his reform as soon part timers/self employed will be the majority of the labour force.

#198 HaHaHa on 09.08.17 at 12:49 pm

Need to help with new Liberal ideas now that I am converted. Climate Change. No more having children to eliminate careless use of the earths resources. No rebuilding on coastlines as the world will soon be under water. Especially not in areas that throughout history experience typhoons or hurricanes. Poor Richard Branson might have to move to a safer island like say Britain and seek high ground. Immigration needs revamping too. Indigenous people should be also more involved in who gets citizenship. Not really fair they have no say. Kinda got screwd over the first time so please Justin stop inviting people without first consulting Native leaders. Wow I feel better already being a new Liberal. And the weed is gonna be awesome

#199 IHCTD9 on 09.08.17 at 12:52 pm

#187 HaHaHa on 09.08.17 at 11:44 am
#17 quoting the cbc math. You liberal tax idiots have convinced me to retire. Why should I continue to strive to work spending over 100 hours a week away from home. on call 24/7. weekends holidays. To make 150000 grand a year? I am gonna join you in 2018 take a pension and vote liberal from here on in to shove it up your asses. No talking sense to you mental midgets you need to feel the pain of paying off liberal graft for your next 30 years. Will be voting NDP in Alberta too just to make sure we stay a have not province. Burn baby burn
____________________________

Ah, my long lost brother/sister! :). I am voting swan dive as well. It’s the only way to avoid becoming Greece pt2. Train needs to come off the tracks hard to slap some sense into Canadians.

#200 Lillooet, BC on 09.08.17 at 12:52 pm

*** InvestorsFriend ***

It appears CRH is becoming a penny stock.
Worried?

#201 Ian on 09.08.17 at 1:00 pm

#188

“I’m not saying prices will go up because I want them to. As I have said before, many times, I have no vested interest in prices going up.” – David Fleming

This is my new go-to comedy site!! I love it.

#202 Reasonfirst on 09.08.17 at 1:03 pm

“the potato guy sucks” sounds like an “ad hominen” argument you have railed against in the past.

But I guess it is really an “ad solanum tuberosum” argument so perhaps you are off the hook.

#203 Gravy Train on 09.08.17 at 1:09 pm

#173 marketpundit on 09.08.17 at 9:22 am

“Hmm… So, this is how recovery looks like. Losing 88K full-time high/decent paying jobs and gaining 110K part-time jobs, somehow makes it a 22K jobs gain for the month of August. Participation rate is @ 65% and we have 6.2 unemployment rate.”

You left out a few facts.

“… While the increase in part-time employment was spread across the age groups, most of the decrease in full-time employment occurred for youth aged 15 to 24. The overall employment decline for youth was accompanied by a notable decrease in their labour force participation.

“In the 12 months to August, employment rose by 374,000 (+2.1%), with gains in both full-time (+213,000 or +1.5%) and part-time work (+161,000 or +4.6%). Over this period, the number of hours worked increased by 2.2%.”
http://www.statcan.gc.ca/eng/start

#204 Ian on 09.08.17 at 1:27 pm

#188

This line is even better!!

“First and foremost, we’ll be coming off four straight months of declining prices. Doomsdayers be warned – there’s nowhere to go but up.” – David Fleming

I shudder to think what Happy Housing will say when he finds out about this guy!

#205 NoName on 09.08.17 at 1:28 pm

#193 Faker, Fake News on 09.08.17 at 12:45 pm

Oh hell yes, whats 180 billion for Harvey and estimated 200 billion for Irma, oh shit I wonder what little Jose is going to cost? Hmmmmm Oh isn’t that interesting Hurricane Jose is now a CAT 4. Hmmmmmmmm
Yes sir that global warming crap cost more than a half a trillion dollars per year. Or does it, makes you think doesn’t it. So how much does the global warming industry make or cost? Hmmmmmmm

—-
Hurricane relief was added to debt cealing, but what funny part is trupm made only 3 month debt ceiling lift. So basicly republicans are “running” a show but democrats are making decisions…

But funnier part is he (supported by republicans) is the one who agrees and wants to abolish a debt ceiling altogether as democrats. So politicking about increasing debt ceiling might stop altogether maybe after mid terms me think, all this looks good for dem to take over or significantly increase seats if not get majority in house and senate. Soon he might fell like obama did.
And that will be funny.

#206 NoName on 09.08.17 at 1:30 pm

But funnier part is he (supported by republicans) is the one who agrees and wants to abolish a debt ceiling altogether as democrats.

—-

bad sentance, i know that rep. are oposed to lift debt cel. but dem are not.

#207 SilverSon on 09.08.17 at 1:33 pm

#81 InvestorsFriend on 09.07.17 at 8:46 pm

“How about we target getting that down to 40% but in return for actually taxing ALL the income of big earners / investors?”

I say the CRA should focus more on tax evasion first, because it’s rampant in Canada. Most of the Canadians I know evade a lot in taxes even though they’re otherwise not shady people. I’m talking evading $50,000 in taxes out of a $200,000 income (or worse), not just evading a few thousand. And for some they’ve been doing it for over 10 years. It’s almost like some of them feel they are entitled to cheat on their taxes, like they’re entitled to own a house, and they suggest that it’s not actually illegal because it’s really their money and they’re not getting caught. This is what happens when taxes get this high – it’s to the point where the CRA has to ask for 50% to actually receive 30%. If they increase taxes further it will give people even more financial incentive to evade them.

The CRA should ask for 30% and enforce the crap out of it. That’s way easier to do and than creating new taxes and won’t ruffle nearly as many feathers. With so much data easily stored and easily analyzed by servers these days it wouldn’t take a lot for the CRA to write crawler algorithms to look through details of tax returns and compare it to public web data (since everybody seems to put everything online these days). Like a realtor posting his new brand new $90,000 car on Faceplant while his past few years’ tax returns show $50,000 annual household income on average. Hello audit!! In fact it’s very likely that the CRA has already begun doing this so perhaps it’s just a matter of a year or two before there’s a significant increase in tax evasion investigations.

It’s like InvestorsFriend said:

“Someone’s gotta cover the costs of government. The issue is to make it more fair.”

#208 n1tro on 09.08.17 at 1:44 pm

#193 Faker, Fake News on 09.08.17 at 12:45 pm

No one is denying the hurricanes will cost money to clean up. You are just automatically making the assumption that the hurricanes are cause by climate change/global warming. If so, please provide a link(s) or accept that shit happens in the world and no amount of money taken from taxpayers to give to China and India out of guilt will stop future hurricanes from occurring.

#209 Stan Broock on 09.08.17 at 1:49 pm

#205 SilverSon on 09.08.17 at 1:33 pm

The problem (this is something that you do not understand) is that most of the small Business operate entirely legally and according to the low and CRA rules.

What tax evasion?

Income splitting is legal if it can be justified.
Retailing of earnings and distribution of dividends is also legal. Big and small corporations do it.
Would you reject or need to justify your dividends from the big banks stocks that you own?

What the governments wants to do effectively (and you might not be bright enough to understand it) is to end effectively all small businesses and treat them as employees.

For the benefit of the big private and public corporations.

Big business does not want competition. They would like to own it all.

And people like you are helping them.

#210 90 CENT LOONIE HERE WE COME!!! on 09.08.17 at 1:57 pm

90 cent loonie here we come!!!!!!!!
Currently at 82.4 cents as of today!

Yippie!!!! Now I caN aFFOrd to travel to the Dominican Republic to tan my cheeks!!!! I luv myself and a 90 cent LOOnie!

#211 Stan Broock on 09.08.17 at 1:58 pm

#205 SilverSon on 09.08.17 at 1:33 pm

So if you think screwing your doctors, lawyers, small Business service providers from their FAIRLY EARNED MONEY will make them work more for you, you will soon find out that you are wrong.

Good look finding a doctor when diagnosed with diabetes (over 1 million Ontarians) or cancer.

#212 Stan Broock on 09.08.17 at 1:59 pm

Good luck finding a doctor when diagnosed with diabetes (over 1 million Ontarians) or cancer.

#213 Reality 1 on 09.08.17 at 2:10 pm

to # 174 JohnK

Smart kid you are – quite observant.

Keep thinking critically – it will serve you well in the (potentially tough sledding ) years ahead.

To help us determine current market sentiment it would be helpful if you could give us what these peoples’ opinions are now that they are facing challenges with their RE purchases.

For example;

1) are they are still sanguine about residential real estate ?
2) do they voice regrets to you ?
3) how do they plan / are planning to deal with a potentially down market ?
4) would they buy again now knowing there can be downside ?
5) anything else they may opine

Thanks.

#214 JD on 09.08.17 at 2:18 pm

I was told that blueberry prices to go up as houses in GVRD and was presented this listing…
https://www.zolo.ca/richmond-real-estate/12120-no-5-road
little farm growing blueberries went on sale asking 8M.
Interestingly different perceptions of local people here in BC…..

#215 CJBob on 09.08.17 at 2:19 pm

#206 n1tro on 09.08.17 at 1:44 pm
#193 Faker, Fake News on 09.08.17 at 12:45 pm

No one is denying the hurricanes will cost money to clean up. You are just automatically making the assumption that the hurricanes are cause by climate change/global warming. If so, please provide a link(s) or accept that shit happens in the world and no amount of money taken from taxpayers to give to China and India out of guilt will stop future hurricanes from occurring.
______________
It’s pointless pointing out the obvious but it’s raining here this afternoon so I’ll piss into the wind for a minute.

Hurricanes are getting stronger because the water is getting warmer. This is climate change. There may be additional causes related to normal fluctuations but 99% of scientists agree that we have an impact on it and can help prevent it from getting worse by making changes.

While Trump is pulling out the Paris agreement there are thousands of companies and states and cities who are going to meet the agreement anyway.

Instead of telling coal miners they will get their jobs back, Trump could be helping them retrain for high tech and renewable energy jobs.

Knowing this was a waste of time I await your witty and personal insult.

#216 Jon on 09.08.17 at 2:23 pm

ulsterman:

You are assuming a lot about me and literally got it all wrong. In 2003 I was graduating high school so I didn’t have a downpayment in hand at the age of 18. 14 years later I finally do but this is the market I’ve faced.

My co-workers laugh because they are a bit older and they bought property 5-10 years ago and yes, they have seen amazing gains. That said their arguements as to why it will CONTINUE to go up basically amount to, ‘it will go up because it always goes up’ and if they are a little more sophisticated they attribute this to an endless supply of Chinese money and a belief that this market is different to every other market in history and is immune to downfall.

If I was in my 30s in 2003 and had the money I probably would have bought in then.

I have seen a lot of my friends recently buy into this mortgage and extend themselves to a dangerous point. It will be 10 years from now that we’ll know if I am still a ‘missed out sideliner’ or if I had the wisdom not to buy.

Right now I pay rent for 50% of what a mortgage in the same kind of 1 bedroom, nice neighbourhood, condo that I currently live in. Why would I pay twice as much to live in the same conditions, have no holidays, have constant money stress, and take on a ton of risk when there are a lot of factors pointing to a downturn? If I’m wrong, so be it, I’ll continue playing the markets and can expect a reasonable return from that while taking 6-8 weeks of holiday a year.

I don’t like to engage in arguments on the web but you really painted my life with a completely fallacious brush.

#217 Bruce on 09.08.17 at 2:35 pm

#187 and 196 – HaHaHa

I certainly encourage my conservative friends to give up. You just can’t fight the fact that 70+% of this country are left wing. While I would never join them in voting, I have resigned to moving in the directions their policies want people to go:
– Do not work any harder to make any more money as now over half (54% in Ontario) at the top bracket will go to income tax
– Spend less. Prices for everything (except that in the CPI:) is going up, a lot, and there is less after tax money to be had.
– Retire early if you can. My retirement plans are to go early, do some part time work, while drawing down my RRSPs to fund me until 65 when I would take CPP & get OAS. Make sure I don’t go over to get anything clawed back.
– Utilize the hell out of the health care system while you can. There is no reason not to.
– Trade money to get more time. Use that time to figure out deals where you spend less (groceries, trips, etc).
– Consider getting a heavily subsidized solar system if it makes sense for. The price of electricity in Ontario in 10 years time will be astronomical. It might cost more upfront now (or in a few years), but electricity prices will be 2-3x what they are now. Get as much gov’t money while they can still borrow.
– If a dual income family with young children, one person should quit work to lower family income to maximize the Trudeau child care benefit.

#218 Lee on 09.08.17 at 2:48 pm

88,000 full time jobs lost in Canada in August and 110,000 part time jobs created. I think the quarter point rate increase is just part of a mirage created to quell the masses. But of course JT is technically not supposed to interfere with the B of C. This is the same type of trick he and Wynne are using in increasing University enrolment to make the unemployment rate look better than it really is. There is going to be a lot of angry twenty somethings in a few years walking around with useless liberal arts degrees and all the FT jobs gone. How many people do we need who know what social justice warriors complain about every day? They are about to realize they’ve been taken for a very expensive ride.

#219 Reality 1 on 09.08.17 at 2:50 pm

to # 207 Stan Broock

Bingo !
Good analysis.

It is much easier for the governments at all levels – municipal, regional, provincial and federal to deal with large corporations. And civil servants are all about making their laughably easy jobs even easier IMHO.

Big companies don’t fight back on new regulations or taxes, but simply pay up and pass the costs through to their “customers”, who due to the defacto monopolies and oligiopolies created for them by the governments’ policies ( that they have so assiduously lobbied them for) have no alternatives.

Big companies acting in concert with governments are one definition of real FASCISM.

#220 Reality 1 on 09.08.17 at 2:55 pm

to # 215 Bruce

Or be a real capitalist and figure out how to MAKE MORE MONEY !

I would hate to be in a foxhole with some of the posters here – you fight back or work out solutions – you don’t just let them steamroll you.

Find a way to meet the challenge.

#221 Seattle or Bust on 09.08.17 at 3:04 pm

Nah, no connection between BC’s Foreign Buyers Tax and the sudden massive increase in Seattle prices from diverted foreign capital :)

After all, everyone said foreign capital was just 5% and had no impact….right?

http://news.buzzbuzzhome.com/2017/08/mayoral-candidates-seattle-real-estate-speculation-tax.html

#222 n1tro on 09.08.17 at 3:13 pm

#213 CJBob on 09.08.17 at 2:19 pm

Hurricanes are getting stronger because the water is getting warmer. This is climate change.
——————————————–
No insults here. Any link to the above statement or is this just your opinion because you heard it on the news and it “sounds” right. The news was quoting that the hurricanes are *caused* by the Atlantic ocean being 1.8C warmer than historically averages.

Ok, let’s accept this as factual truth. My question is, did the Atlantic ocean just get warmer by 1.8C last week or has this been a gradual process? Because if it has been gradual, then wouldn’t we have seen a steady stream of more powerful hurricanes as opposed to the last big one being 10 years ago?

And please point to me any journals that shows the math of given the amount of water there is in the world, what the temperature of the environment would have to be and for how long, accounting for the winters, to warm up the Atlantic by 1.8C.

When you show me that math, I will plot on a timeline and see if it corresponds to the advent of the industrial revolution which we can probably agree is when humans started to burn a lot for stuff.

Also, link me the paper that has been peer reviewed showing the factors that creates a cat 1 hurricane vs cat 5 and how they are different.

I, like many scientist believe man is responsible for a lot of the stuff that goes on but don’t blindly accept causalities.

But I will play devil’s advocate and say there is a 100% link between warmer waters and cat 5 hurricanes. How does writing a blank cheque to China and India going to cool the waters of the Atlantic short of everyone on the earth stop using resources for the next 20-50 years?

Is China and India going to take the Paris Accord money and build a giant refrigerator and make the mother of all ice cubes and drop it in the ocean to fix the hurricane issue?

#223 Reality 1 on 09.08.17 at 3:13 pm

to # 181 TurnerNation

I get the crypto coin short idea, but why short TECK.B ?

What is your rationale for that trade ?

#224 AGuyInVancouver on 09.08.17 at 3:46 pm

#70 InvestorsFriend on 09.07.17 at 8:34 pm
About the Small Business Tax Changes

Thou shalt not convert thy personal labour income to dividends (much less capital gains) in order to avoid income tax.

Thou shalt not sprinkle said converted labour-to-dividend income to avoid personal income tax on thy labour.

Though shalt not pay far above market rates to family members to avoid personal income tax on thy labour.

Though shalt not be bitter when tax loop holes are closed to make the system more fair.
_ _ _ _
They are not loop holes, but legislated, decades-old statues of the tax code. — Garth
_ _
So Garth is the tax code inviolable, never to be revised or reexamined, sort of like the 2nd Amendment in the USA?

If Harper had just let well enough alone, and left the GST at 7% like every economist told him we would have been better off as a country.

#225 Smoking Man on 09.08.17 at 3:57 pm

Man made climate chance deciples are void of any logic or reasoning skills and deserve to get their wallets cleaned out.

Evolution dogs. Idiots starve do death.

Cunning gamblers live like kings. And always will. Even when lefty loons sick CRA on em.

Catch me if Can. Taxation is theft.

Carbon tax pays useless academics to sit on there ass and dream up new ways to flees the creative and industious.

I’m not paying shit any more.

#226 Tazi Bnu on 09.08.17 at 4:16 pm

#150 Steve French on 09.08.17 at 2:01 am
It’s official. No storm on record, anywhere on the globe, has maintained winds 185mph or above for as long as Hurricane Irma.

But hey, thank goodness climate change is all a hoax, or at best caused by liberal sunspots, right Smokey?
_________________________________________
A single weather event does not make a climate. This shows that you understand climate change just as much as the person who goes “It’s really cold today. This must be proof that climate change doesn’t exist.” Also, overall stronger Typhoons and Hurricanes have been recorded in the past, the difference is we’ve built more than ever before in the areas that get hit with them.

M29ON

#227 Smoking Man on 09.08.17 at 4:27 pm

CRA THE Dr tax was the red line in the sand. NOW where the hell is my disability check and my ten years worth of tax credits.?

#228 JohnK on 09.08.17 at 4:28 pm

@221

1) Unfortunately it appears that they are.

Most of these “common folk” are simply economically illiterate. They do not seem to comprehend basic economic fundamentals, for example you’d have a hard time explaining how and why central banks control interest rates and general monetary policy.

The only investment they understand is real estate, its what everyone out there is “comfortable” investing in as the population growth factor and need for housing just seems to make sense for them and is easy to comprehend.

You need to invest…what do you invest in? Well a house of course! Why? Well because you know….it goes up…Any other investment products are just too much to wrap one’s head around.

2) Yet to hear a regret, a co-worker bought a house 2 years ago and made a friendly bet with me that next summer houses will be more than now.

3) It appears that they will sit tight until whatever happens, happens.

4) They are still in denial because papers are yet to post much about this, once it’s front page of Metro and 24 they’ll take their word over mine.

5) Only opinion I have is that people are lazy and shortsighted.

#229 Howard on 09.08.17 at 4:34 pm

#149 Remember this on 09.08.17 at 1:50 am
#90
Shake your head at Boomers trying to print something.
Just remember Boomers taught Moisters how to use a spoon to feed themselves

——————————-

That’s good since the Moisters will need to use those spoon-using skills to feed the Boomers in about 20-30 years time. If they (the Boomers) are lucky anyway.

#230 Howard on 09.08.17 at 4:43 pm

re: Saskatoon

I visited once for work, about 10 years ago. Was pleasantly surprised, it’s actually a very pretty city. And I was there in January no less! (I was lucky, it was a balmy -8C during the day when I was there; had I arrived a week prior I would have had to endure -30C).

Regina on the other hand seemed very depressing.

#231 raisemyrent on 09.08.17 at 4:45 pm

casual racism, climate change denials, capitalist propaganda, gold nuts, us vs them rhetoric…

I see not much has changed in the comments section.

#232 SilverSon on 09.08.17 at 4:55 pm

#207 Stan Broock on 09.08.17 at 1:49 pm

Calm down dude. I wasn’t talking about small businesses. I run a small technology consulting business and will get screwed by the changes being discussed by Morneau, just like all the doctors to which you refer. I don’t like it at all.

All those that I know that are evading taxes are not running small businesses – they are just individuals. Some are real estate sales people in fact. Picture someone buying a gas cards claiming to give them to clients and then using them to fill their own cars with fuel, then deducting the fuel they bought with the gift cards as well as the face value of the gift card itself from their taxable income. Then expand that to include gift cards for restaurants, electronics stores, grocery stores, etc. Now of course they can’t deduct the value of some things like groceries purchased with the gift card, but they deduct the value of the gift card (which means they fed their families with tax free money). Is that not tax evasion?

#233 oncebittwiceshy on 09.08.17 at 4:55 pm

Rates vs Capital: “I can guarantee you that all the YVR sidelines and bears will be disappointed and single family home prices remain in the stratosphere.”
<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<

…. or my friend you can simply go to this website (run by a "bearish" realtor) and see that the "news reports" on rising SFD in Vancouver are absolutely …. WRONG.

Vancouver Detached Average Sales Price Down 9%

For January 01- August 31, 2016 the average sales price of a detached home in Vancouver was $2,864,520.00. Comparing the same time frame this year, the average sales price was $2,607,377.00. That’s a 9% drop.

The median sales price dropped even further, from $2,339,000 to $1,980,000, a 15% decline.

#234 CJBob on 09.08.17 at 4:58 pm

#220 n1tro on 09.08.17 at 3:13 pm
How does writing a blank cheque to China and India going to cool the waters of the Atlantic short of everyone on the earth stop using resources for the next 20-50 years?
__________________
So you don’t like my ‘claims’ but we are sending China and India an unlimited amount of money according to you? That’s quite a claim. As you like to say, link?

#235 Where's The Money Guido? on 09.08.17 at 5:03 pm

All the info here on BC Liberals lies on Port Mann bridge spending

http://www.cbc.ca/news/canada/british-columbia/b-c-greens-call-for-public-inquiry-into-port-mann-project-1.4184391

#236 jess on 09.08.17 at 5:08 pm

good grief how can these schemes be legit?
831(b)s take a blow as US Tax Court favours IRS in Avrahami case

Avrahamis insurance scheme
https://www.forbes.com/sites/jayadkisson/2017/08/21/irs-wins-avrahami-decision-before-u-s-tax-court-regarding-831b-captive-insurance-companies/#7ce3e52a440a
https://www.ustaxcourt.gov/UstcInOp
/OpinionViewer.aspx?ID=11367

===
see – ‘Reputation laundering’ is lucrative business for London PR firms guardian uk

#237 Penny Henny on 09.08.17 at 5:12 pm

As the Trudeau government legalizes mary juana the only place you’ll be able to smoke will be within your own personal residence. Condo by-laws will soon outlaw smoking within the building. So expect sfh demand to be on the rise.

#238 DON on 09.08.17 at 5:22 pm

#213 CJBob on 09.08.17 at 2:19 pm

#206 n1tro on 09.08.17 at 1:44 pm
#193 Faker, Fake News on 09.08.17 at 12:45 pm

No one is denying the hurricanes will cost money to clean up. You are just automatically making the assumption that the hurricanes are cause by climate change/global warming. If so, please provide a link(s) or accept that shit happens in the world and no amount of money taken from taxpayers to give to China and India out of guilt will stop future hurricanes from occurring.
______________
It’s pointless pointing out the obvious but it’s raining here this afternoon so I’ll piss into the wind for a minute.

Hurricanes are getting stronger because the water is getting warmer. This is climate change. There may be additional causes related to normal fluctuations but 99% of scientists agree that we have an impact on it and can help prevent it from getting worse by making changes.

While Trump is pulling out the Paris agreement there are thousands of companies and states and cities who are going to meet the agreement anyway.

Instead of telling coal miners they will get their jobs back, Trump could be helping them retrain for high tech and renewable energy jobs.

Knowing this was a waste of time I await your witty and personal insult.

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

Solar Flares also intensify weather – we had two large ones this week (Wednesday/Thursday).

#239 Smoking Man on 09.08.17 at 5:26 pm

Communism Full Steam ahead in Canada. !!!!

Poloz shuts out Free Market Economists. Only Select MSM will be allowed in.

Here comes the complete destruction of the middle class to make room for globalists.

http://www.zerohedge.com/news/2017-09-08/bank-canada-shuts-out-free-market-economists-key-policy-conference

#240 Blacksheep on 09.08.17 at 5:30 pm

THANKS, to all for the feedback on Saskatoon.

I will let you know if she decides to go, or not.

#241 bdwy sktrn on 09.08.17 at 5:30 pm

#235 Penny Henny on 09.08.17 at 5:12 pm
… Condo by-laws will soon outlaw smoking within the building. So expect sfh demand to be on the rise.

———————-
was going to rent out the city house for extended travel , perhaps a smoke friendly bed and breakfast is a better idea?

“bongs and blunts and bed and breakfast”

#242 Penny Henny on 09.08.17 at 5:37 pm

#239 bdwy sktrn on 09.08.17 at 5:30 pm
#235 Penny Henny on 09.08.17 at 5:12 pm
… Condo by-laws will soon outlaw smoking within the building. So expect sfh demand to be on the rise.

———————-
was going to rent out the city house for extended travel , perhaps a smoke friendly bed and breakfast is a better idea?

“bongs and blunts and bed and breakfast”

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

don’t forget to add “Free Cheetos”

#243 Smoking Man on 09.08.17 at 5:54 pm

Corrected post.

Pleading with family to get the hell out of Daytona.
Nope. Cowboy runs in the family.

Talking to God right now. This time I’m being polite and not swearing.

#244 n1tro on 09.08.17 at 7:46 pm

#234 CJBob on 09.08.17 at 4:58 pm
#220 n1tro on 09.08.17 at 3:13 pm
How does writing a blank cheque to China and India going to cool the waters of the Atlantic short of everyone on the earth stop using resources for the next 20-50 years?
__________________
So you don’t like my ‘claims’ but we are sending China and India an unlimited amount of money according to you? That’s quite a claim. As you like to say, link?
————————
Apologies. Not “unlimited” just $100B a year for the next 10 years with no legal enforcement as to results or how it is to be used. In a world of QE, what is a trillion dollars but a 1 with lots of zeros behind it.

At the Paris Conference in 2015 where the Agreement was negotiated, the developed countries reaffirmed the commitment to mobilize $100 billion a year in climate finance by 2020, and agreed to continue mobilizing finance at the level of $100 billion a year until 2025.[41] The commitment refers to the pre-existing plan to provide US$100 billion a year in aid to developing countries for actions on climate change adaptation and mitigation.[42]

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

#245 Gravy Train on 09.08.17 at 8:46 pm

#176 n1tro on 09.08.17 at 9:41 am

“Please explain the connection between Irma and climate change if it isn’t a hoax.”

Climate scientists are not saying that climate change causes hurricanes, but merely that it increases their frequency, intensity, and duration.

“Largest earthquake in 100 years just happened off Mexico last night. Was that due to climate change too? If so, please explain to the rest of us how man made activities caused the earth’s tectonic plates to shift like it did.”

Are you being facetious or histrionic? Or do you really think there’s a connection between geology and climatology? (Hint: They’re entirely unrelated earth sciences.)
https://en.m.wikipedia.org/wiki/Geology
https://en.m.wikipedia.org/wiki/Climatology

This comments section is certainly eye-opening, Garth!

#246 espressobob on 09.08.17 at 9:03 pm

Dan Bortolotti provides great info into the world of ETFs. He has my respect.

However, his actual investing strategy is questionable, but that’s a matter of opinion based on the individuals goals. One size doesn’t fit all.

It comes down to knowledge and experience retail investors work with. Most would benefit from pro management. Just read the comment section.

#247 steerage steward on 09.09.17 at 7:42 am

https://www.youtube.com/watch?v=IoTRNZS2OtQ

#248 Leda Forsythe on 09.09.17 at 11:26 am

Great post, I referenced you in my latest blog post.
Hey Garth…some millennials actually saved and bought places before 2008… don’t worry I got the housing lust out of my system and car lust too.