Not yet

Back in May just over half of us said house prices would, for sure, increase in the next six months. Days later the fastest decline in the history of housing (at least in the GTA) started. By the time the summer ended, values were lower by an average of 20%. So much for common wisdom. No wonder people like garage sales.

Where are we now? The latest poll of consumer sentiment from Nik Nanos finds 37% still believe prices will go up. About 15% expect declines. And 48% apparently have no idea what the hell’s going on. How can you blame them?

On one hand, rates are rising and there’s more to come. Mortgage regs are about to be tightened again. NAFTA could blow up. Maybe you work for Sears, or Bombardier. And houses are still stupid expensive in most cities.

On the other hand, the average property in the largest market costs $200,000 less than six months ago. Mortgages are still dirt cheap by historic standards. And maybe the best time to buy is when others aren’t, or before politicians diddle things further and interest rates augment. Waiting until the universal stress test is enacted could guarantee less choice for most buyers, since they’ll qualify to borrow a smaller amount.

Such things could be behind the September rebound in the GTA. Well, not exactly a rebound. More like a little hump. Or even a dead cat bounce. (That’s when you throw a deceased feline off a balcony. It bounces. But it’s still dead.)

In any case, GreaterFool brings you the latest market stats for September – a prelude to what the realtor cartel will unveil days from now (thanks to realtors Alex Prikhodko and John Pasalis). Here are some highlights:

  • A big kitty bounce in Toronto with the average detached house price plumping up by a hundred grand, back to the $1 million mark. But, sales fell by more than a third. Were the buyers cunning, or reckless?
  • Stable conditions in Mississauga and Brampton, where volumes and prices plunged in mid-summer.
  • No joy, however, in York Region with Vaughan, Richmond Hill, Aurora and Newmarket seeing big drops. Sales in York dumped by half.
  • “While September sales ended up surpassing August numbers by an average of 20.8%,” says Prikhodko, “the sales volume of detached homes was over 50% lower compared to September of 2016. The recovery everyone is waiting for has not materialized and there is an increasing supply, currently standing at 26,844 listings.”
  • Across the region of six million souls, overall sales were down 36%. Houses plopped 39% and condos fell 20%.
  • In general, prices edged higher 3% in September, but that was almost completely driven by moisters moving into condos. Poor things.

The detached-house scorecard:

Click on chart to expand.

The conclusion seems obvious. September changed nothing. The market momentum is lackluster, weak, hesitant, tepid. Listings are starting to pile up again. Sellers waiting for the price and sales rebound are still waiting. The detached and move-up market is marking time. Kids lacking perspective or history continue to buy. October and beyond look gritty, given what’s coming.

Of course, most people are now focused on Thanksgiving. Then Hallowe’en. Then Christmas. And after that they might not know what hit them. Save your offers until then.

198 comments ↓

#1 Randy on 10.02.17 at 6:21 pm

I blame the Liberals

#2 Money Miser on 10.02.17 at 6:21 pm

As much as Toronto might be feeling the pinch, we in Vancouver aren’t getting much of a respite. Sure, detached housing has faltered somewhat, but the condo market is absolutely ridiculous.

Unfortunately for most, the condo market is what matters, not the detached housing market. I think most people gave up on that years ago…

#3 The Fat Lady on 10.02.17 at 6:27 pm

Pay your taxes you sucker Canadians.

#4 Lost...but not leased on 10.02.17 at 6:29 pm

What happened to the dog in the last post?

#5 Mike on 10.02.17 at 6:33 pm

When will housing be ever at 2014 levels. Never.
Vancouver still rocking and rolling.

#6 Dwide Schrude on 10.02.17 at 6:35 pm

The low ratio stress test, if passed will affect everyone’s buying power but it is a fallacy to assume everyone will have to buy a cheaper house. Some of us bought something totally within our price range that was affordable and sensible (while breathing a sigh of relief that we lost out on a bidding war or two…) and they will not be affected. If your GDS/TDS ratios are 15/22 today then the addition of a 2% hike to your qualifying rate has zero effect. It’s the one’s stretching themselves or who are already at the margin that will be hurt, particularly your first time home buyer. Either way, it is sensible to add a fake rate into mortgage applications at this point since it would appear we will see at least 1 more quarter point rate hike before the BoC takes a pause with their monetary tightening.

#7 Stick Man on 10.02.17 at 6:36 pm

Interest rates are a slow bleed, but the OSFI change is a cliff IMHO.

#8 MF on 10.02.17 at 6:40 pm

Hate to say it but I knew the market would rebound in some way shape or form around the fall.

There are just too many tail winds.

And now that condo that I want is more expensive.. along with my rent.

MF

#9 the ryguy on 10.02.17 at 6:40 pm

“Save your offers until then”

Thank you Garth, thats what Ive been trying to tell my house horny friends.

I always turn it around and ask “what would make prices go up from (the absolute off the charts highs) where they are now?”

– New high paying jobs in the area? nope

– New government policies? nope

– Lack of inventory? please, drive around on the outskirts of ANY city and you’ll see tons of development at all phases of completion.

– Lower rates? not for the foreseeable future

– Easy access to capital? B-20 is slamming this window shut, and boarding it up, and posting security guards.

– A fiscally sound populous waiting to pounce on opportunity? Eye roll emoji

– Tons of new buyers? nope canada has almost 70% ownership already

– New influx of wealthy foreigners? kinda maybe yeah, but even this seems to be slowing with the attempts by China to crackdown on capital leaving the country.

So I ask any RE bull, what could possibly make prices go higher?

#10 Easy Street on 10.02.17 at 6:42 pm

Condos are the easiest things to buy and the toughest things to sell. Never ending stream of new ones being built and more of them trying to be off-loaded by people who suddenly wake up and realize they can rent the same thing for much less $ than the outgoing rent, strata fees and property taxes, special levies etc. every month

#11 Toronto Best City in World on 10.02.17 at 6:42 pm

Toronto real estate will never fall….Toronto is the best city in the world, and over 400,000 newcomers from overseas and within Canada want to make Toronto their refuge of heaven.

Toronto is #1 for restaurants, fine dining, safety, women,dating and career advancement.

#12 Howard on 10.02.17 at 6:51 pm

I wonder if the big uptick in monthly sales in Vaughan is related to new developments around the Spadina subway extension?

#13 SoggyShorts on 10.02.17 at 6:57 pm

#11 Toronto Best City in World on 10.02.17 at 6:42 pm
Toronto real estate will never fall….Toronto is the best city in the world, and over 400,000 newcomers from overseas and within Canada want to make Toronto their refuge of heaven.

Toronto is #1 for restaurants, fine dining, safety, women,dating and career advancement.
**********************************
Being #1 doesn’t actually mean it’s the best, and here’s why:
If the restaurants are 10% better, and the jobs pay 15% more, but everything costs 50% more, is it really better?

#14 Howard on 10.02.17 at 6:57 pm

Was hoping the prices were down again month over month so I could do a Tom Petty “Freefalling” tribute. RIP.

#15 Fish on 10.02.17 at 6:57 pm

Stunning, That dog knows how to wake you up
Thanks Garth

#16 Duffy on 10.02.17 at 7:01 pm

I think what the dog is wanting is for them to get up and get to work and make that mortgage payment. The German is allergic to living in a soggy cardboard box on the street even if it is the deluxe model with bubble wrap flooring. I’ve owned many good dogs over the years and greatly enjoyed their company mostly because, they can’t talk, another reason why keyboards are so popular for communication . . . . . silence is vastly underrated . . . . I hope you’re in an area where you can hear it.

#17 espressobob on 10.02.17 at 7:02 pm

Trekking through the side streets of old Toronto I wonder if a D-9 bulldozer could make a serious improvement to the neighborhood?

Some of these dwellings are a joke.

And they’re listed for how much?

#18 Tim on 10.02.17 at 7:07 pm

We’ve been waiting 10 $%$$ years for housing to correct in Vancouver and Toronto. It just keeps staying propped up.

#19 paulo on 10.02.17 at 7:07 pm

#11:
well -20% of the eventual -50% off peak value in the book.
To bad most people whom live in Toronto can not afford to buy there and at 170% debt to income ratio average cant afford anything besides mc’d. but loving the mac an’ cheese.

#20 Popeye the sailor man on 10.02.17 at 7:08 pm

Of course the realtor report will highlight the MoM Gain of 20% with some areas gaining 85% in number of sales. Price gains of 100K for Toronto MoM and other areas being flat; but get in now because the trend of rising sales means price are likely to rise with it.

FOMO Again, with sales being brought forward due to Government regulation changes and pre-qualified mortgage rates. Couple of more fingers holding on the edge of that cliff still. This cliff hanger might not be resolved until next season. Stay tuned!

#21 The real Kip on 10.02.17 at 7:09 pm

Hope you basement dwellers grew a set and bought in the dip. This is as bad as it’s going to get. Houses in Georgina area shot up 33% last year and are now selling again albeit at about a 25% price chop. Big deal, I never believed the 33% increase either.

Houseageddon is over.

#22 Costco Nation on 10.02.17 at 7:10 pm

What are the chances Morneau et co have enough time to overtaxed the inheritance of a house too? Did he do it already? How would a crappy life trying to subdue a mortzilla look like when it ends up with total skimming at the kick of the bucket.

#23 OttawaMike on 10.02.17 at 7:11 pm

#9 the ryguy on 10.02.17 at 6:40 pm

So I ask any RE bull, what could possibly make prices go higher?

————————–

hee hee..This blog has been asking that question for 9 years and never found the answer. Mr. Market(RE) does as he pleases.

#24 Lost...but not leased on 10.02.17 at 7:14 pm

Does the above video count as menage a trois?

#25 Digruntled Condo Owner on 10.02.17 at 7:14 pm

#9 ryguy
“New influx of wealthy foreigners? kinda maybe yeah, but even this seems to be slowing with the attempts by China to crackdown on capital leaving the country. ”

Actually YES. I think this will never end. Until immigration policy changes (bringing in the world’s rich with no limits) or we hit the housing prices of Hong Kong (TRIPLE again from here – link below, scroll to cost per square meter of RE). Problem is, other cities like HK have much higher prices than Vancouver, supported by far higher wealth/incomes. Since our governments open the door for these wealthy foreigners to come live here, people who grew up here have NO chance. Add to this open door to the rich policy the fact that no Canadian or BC government (incl NDP) wants ownership of a much needed housing crash, and homegrown locals who do not already own houses are pretty much SOL.

https://www.numbeo.com/cost-of-living/compare_cities.jsp?country1=Hong+Kong&city1=Hong+Kong&country2=Canada&city2=Vancouver

#26 Digruntled Condo Owner on 10.02.17 at 7:17 pm

#9 ryguy
“New influx of wealthy foreigners? kinda maybe yeah, but even this seems to be slowing with the attempts by China to crackdown on capital leaving the country. ”

P.s. I’ll add, China has been trying to stop its money from leaving their country for many years, with no success. They cannot stop it and we do not have the leaders to stop it on this end.

#27 Stone on 10.02.17 at 7:18 pm

#10 Easy Street on 10.02.17 at 6:42 pm
Condos are the easiest things to buy and the toughest things to sell. Never ending stream of new ones being built and more of them trying to be off-loaded by people who suddenly wake up and realize they can rent the same thing for much less $ than the outgoing rent, strata fees and property taxes, special levies etc. every month

—–

Couldn’t agree more. Not just condos though, houses too. The other day, I calculated the carrying cost between my renting a house that has a supposed value of $700,000 (at least that seems to be the approximate range in the neighbourhood) or buy a $500,000 house. The cost to buy that $500,000 equates to a bit more than $16,000 more per year than renting a house worth about $700,000. Oh lordy! How stupid can people be to want buy. To just balance out, the house price, would need to be around $270-290,000.

So for now, renting is the new black. I’ll leave my precious money invested in my lovely balanced portfolio. Today was a nice day for the portfolio. Up 0.50% from last Friday to 6.25% YTD and considering all distribution. another lovely dividend coming Friday for ZPR. Ahhhh, life is great!

#28 Asterix1 on 10.02.17 at 7:18 pm

When you analyse all the financial data, history, new government regulations and a shift in monetary policy, whats the point of debating with these clueless (dreaming) RE bulls.

#29 Gentle ,Loving Kindness on 10.02.17 at 7:19 pm

If you think Canada has gone full bore socialists with T2 & group, wait until the snowflake millennials vote in Prime Minister Jagmeet Singh in the next election.

#30 Lost...but not leased on 10.02.17 at 7:19 pm

Seem to recall after the long reign of PM Kim Campbell…Lib PM Jean Crouton gov’t axed the $100,000 lifetime capital gains exemption, and also introduced that quarterly extortion of small businesses that had to remit estimated revenue to the au naturale governing party of Canuckistan.

This latest attack by T2 and Moroneau has deep roots.

#31 I’m stupid on 10.02.17 at 7:21 pm

#8 MF

You should’ve bought, this way we wouldn’t need to hear you complaining.

#32 I’m stupid on 10.02.17 at 7:24 pm

#10 Easy street

Condos are like herpes once you get them they don’t go away.

#33 Midnights on 10.02.17 at 7:25 pm

Interesting…

https://beta.theglobeandmail.com/resizer/_nBopL_XL–FywHp5GaO70XV4X8=/480×0/arc-anglerfish-tgam-prod-tgam.s3.amazonaws.com/public/LUYMMWRQGVD3RCIFFMIHLPRBGA.JPG

#34 Canada Best Country in World on 10.02.17 at 7:26 pm

Therefore Canadians should give 99% of their pay check to the criminal banking cartel.

#35 Bobby on 10.02.17 at 7:27 pm

For #11, what you meant to say is you have never been out of Ontario. Too bad.

#36 Shane Gallant on 10.02.17 at 7:29 pm

what about the Durham region?

#37 Screwed Canadian Millenial on 10.02.17 at 7:31 pm

#11 Toronto Best City in World on 10.02.17 at 6:42 pm

and over 400,000 newcomers from overseas and within Canada want to make Toronto their refuge of heaven.

—————-

That’s the problem.

#38 rental property math on 10.02.17 at 7:32 pm

Keep waiting and renting, it’s helping me out greatly.
I was able to rent one half of my duplex in Hamilton within a week to young professionals. Told them right off the bat only a 1% rent increase per year because I’m such a nice guy.

Thanks renters!

#39 Doug t on 10.02.17 at 7:41 pm

The worlds going to hell in a hand basket – some days I think it wise to just sell all my sh*t and hit the road

RATM

#40 Ian on 10.02.17 at 7:47 pm

I do not understand the ‘buy before the Happy Stress Test’ logic.

That to me shows someone who really shouldn’t be buying at all. If you would be approved now, but won’t in five weeks, then there’s no way in HELL you should be buying as you’ll still be subject to Happy Stress Test on renewal, in all probability with rates much higher.

Prices are guaranteed to keep falling. 100% odds!

Just keep renting. Even if in my case my rental building parking spot costs 21% more than last year which Mark neglected to put in his CPI index.

#41 OSFI on 10.02.17 at 7:47 pm

One of my friend works at CIBCC and said that banks already started stress testing all mortgages at 4.84% even though OSFI rules are not implemented. Any confirmation from blog dog

#42 Happy Housing Crash Everyone! on 10.02.17 at 7:56 pm

LoL you dirty greedy evil lying SHYSTERS. September was barely a dead cat bounce and you dirty POS SHYSTERS are out screaming for people to financially murder themselves as you high school drop outs try to make a sale or get out from a cash flow negative property in a crashing market. September is supposed to be a big month and it was nothing but a wimper. October will prove that all you dirty SHYSTERS scum are liars who know nothing. How can you guys know anything when you couldn’t finish elementary school and many others unable to finish high school. November will be a bloodbath . Best part of so called dead cat is many of you didn’t even make a sale :-) .

Happy Housing Crash Everyone! :-)

Keep cheering SHYSTERS. Lipstick on a pig is still a pig.

#43 For those about to flop... on 10.02.17 at 7:59 pm

Another week,another howmuch article…

M43BC

“The Gender Pay Gap is Shockingly Dramatic Among the Richest

Almost everybody now agrees that women make less money than men. Things get heated, however, when it comes to figuring out why the gap exists and what policymakers should do about it. Since there’s been so much discussion about inequality recently, we decided to investigate the gender pay gap among the highest income earners, focusing exclusively on the top 2%. We found that the gender pay gap varies dramatically among this group, and it all depends on where you live. So we created a new viz to understand this issue in all of its complexity.”

https://howmuch.net/articles/highest-paid-women-make-compared-to-men

#44 Stone on 10.02.17 at 8:00 pm

property math on 10.02.17 at 7:32 pm

Keep waiting and renting, it’s helping me out greatly.
I was able to rent one half of my duplex in Hamilton within a week to young professionals. Told them right off the bat only a 1% rent increase per year because I’m such a nice guy.

Thanks renters!

—–

Did you miss my previous post #27? Trust me, I think the renter is the winner. If you bought your duplex when prices were more reasonable (let’s say more than 6-7 years ago) then I understand. If less than that, renting is the new black, not owning.

#45 A123 on 10.02.17 at 8:03 pm

#11 Toronto Best City in World on 10.02.17 at 6:42 pm
————–
I was born and grew up here. I used to call Toronto ” Toronto the Good.” It was clean, safe and cosmopolitan then.
No more.
High crime, dirty streets, poor transit, beggars at every intersection asking for money I suspect that they are professional beggars), expensive to live in and perhaps more cosmopolitan, but also has it’s ghettos.
I am happy to leave Toronto.

#46 Lost...but not leased on 10.02.17 at 8:06 pm

#10 Easy Street

True wisdom was stratified in that post…

Condos are like Sports Cards in the early 1990’s…they produced far more than the market could bear and the price collapsed.

It’s almost a given that in a hot market..and with the morons that buy into Pre-Sales….workmanship suffers.

My understanding is that the Telus Gardens in Vancouver is a dog….lots of problems…even though we have a big corporation Telus with Westbank as the general contractor.

The condo market seems to go on ad infinitum, zero checks and balances which means an even greater unknown as the rationalization known as “reality” kicks in.

This multi-family/strata market is the one at greatest risk

#47 Ian on 10.02.17 at 8:07 pm

#39 Doug

Then you will be Smoking Man at Seneca Casino, and that is contraindicated lol.

#48 Stone on 10.02.17 at 8:09 pm

#40 Ian on 10.02.17 at 7:47 pm
I do not understand the ‘buy before the Happy Stress Test’ logic.

That to me shows someone who really shouldn’t be buying at all. If you would be approved now, but won’t in five weeks, then there’s no way in HELL you should be buying as you’ll still be subject to Happy Stress Test on renewal, in all probability with rates much higher.

Prices are guaranteed to keep falling. 100% odds!

Just keep renting. Even if in my case my rental building parking spot costs 21% more than last year which Mark neglected to put in his CPI index.

—-

Completely agree Ian. I rent now and with my investment portfolio now pumped up with the equity from my house sold late last year, financial independence is just around the corner. Fully adaptable, flexible, mobile and liquid. Many people tell me I should buy back in because prices have come down. I ask them if they are aware of B-20. I get back deer in the headlights as a response. They really don’t understand the math behind renting vs owning. It’s either I’m deluded or they are. Personally, I think it’s them. Certifiably insane. Big time!

#49 I thinks I know something on 10.02.17 at 8:11 pm

Ask yourself, “Where will GTA house prices be in 10 year’s time”? The best future indicator is what happened in the last 10 years. You can be sure that they will be more expensive. Maybe a lot more.

#50 Chelsea on 10.02.17 at 8:12 pm

It looks, and feels like the B.C. real estate market is in a lull. More high price listings, little to none decrease in asking prices. But, the good thing little to zilch homes are being sold. More supply than demand curtails the sign of prices dropping. Not seeing this happen as yet. The NDP here in BC are taking their jolly time prevailing the winds of the high price, insane real estate market here. And as we speak, the Liberals (Crusty bunch) are in HOT water with a little money laundering….

Oh well… something has to give… just waiting, like the rest of us..

#51 Then Christmas on 10.02.17 at 8:13 pm

Of course, most people are now focused on Thanksgiving. Then Haloween. Then Christmas. And after that they might not know what hit them.

The mother of all economic crashes is the most likely that might hit around that time.

#52 Robert White on 10.02.17 at 8:22 pm

Regression towards the mean takes time, and the Toronto market has seen nothing but froth from irrational exuberance & hot money laundering from China over the last decade. BofC interest rates will progressively increase over the next couple of years.
Markets are forced to adjust to QE withdrawal and
private industry will be forced to adjust/improvise to stay afloat. GE just announced they are goinf strictly all electric so we won’t see their kind dabbling in subprime mortgage loans with the now defunct GE Credit Unit. Bottom line is that each and every business quarter will see declines that the CB will have to negotiate in light of Debt/GDP numbers on a national basis. It’s reset time, Garth. Fasten your seat belt. QE withdrawal will soon have political backlash in the form of civilian protest throughout the EU & North America.

May you live in interesting times seems to be the present & future game for all in the boat. Toronto will slide slightly less than New York IMHO. The stagnancy will be noticeable and synonymous with secular stagnation which was elucidated a few years ago by Summers.

RW

#53 Andrew Woburn on 10.02.17 at 8:24 pm

‘An adviser walks into a bar …’

http://www.investmentnews.com/gallery/20151023/FREE/102309997/PH/10-best-financial-adviser-jokes

#54 Victor V on 10.02.17 at 8:26 pm

No Autumn Rebound As Toronto Home Sales Tank Again

http://www.huffingtonpost.ca/2017/10/02/no-autumn-rebound-as-toronto-home-sales-tank-again_a_23230283/

Realtors hoping for a rebound in Toronto’s housing market this fall will likely be disappointed by September’s numbers, which show that the city’s market continued to put in a weak performance.

Preliminary data for the city shows sales fell between 38 and 45 per cent compared to a year earlier, depending on the location, according to an analysis of data from real estate site Zoocasa.

That’s the fifth straight month of declining sales in a city that was known, until recently, for relentless house price hikes and soaring sales numbers. The market turned downwards in May, the first full month after Ontario introduced a slew of new housing rules for Toronto and surrounding areas, incuding a 15-per-cent foreign buyers’ tax.

#55 Tony on 10.02.17 at 8:30 pm

Re: #9 the ryguy on 10.02.17 at 6:40 pm

Falling interest rates, search for yield through rental units and lack of anywhere else to put money (alternate investments have dropped about 10 percent in price year to year). You might be surprised. I gave Ian H. (the disbeliever) the green light to buy in Peterborough and Orillia. I told him interest rates will fall in Canada.

#56 Victor V on 10.02.17 at 8:30 pm

#41 OSFI on 10.02.17 at 7:47 pm

One of my friend works at CIBC and said that banks already started stress testing all mortgages at 4.84% even though OSFI rules are not implemented. Any confirmation from blog dog

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

https://beta.theglobeandmail.com/real-estate/proposed-mortgage-rules-could-hurt-many-borrowers-credit-unions-say/article36413244

Several of Canada’s largest banks have said they anticipate relatively little impact from the proposal because they are already stress testing many of their loan applications at the tougher standard, and most applicants would still qualify. But those banks are having “an ongoing discussion” with regulators, according to Canadian Imperial Bank of Commerce chief executive Victor Dodig, aiming to strike a balance in housing policy after a series of recent regulatory changes.

“I don’t think that you can expect much more of a wet blanket on the industry,” Mr. Dodig said on Wednesday at an industry conference. “There’s a lot of risk there if they go too far.”

The OSFI changes are expected to have the greatest impact on smaller banks and other regulated lenders, whose customers often do not qualify for loans at major banks.

Canadian Western Bank CEO Chris Fowler expects the final rules could be announced in the second half of October. And while he expects some current applicants will find it harder to qualify for a loan, he also predicts larger banks would reject more buyers, some of whom would turn to alternative lenders.

“Over all, we’re thinking [the impact would be] moderately negative” for his bank, he said at the industry conference.

#57 ulsterman on 10.02.17 at 8:31 pm

As terrifying as it is to admit it, I’ve been bearishly wrong on housing for 15 years – yup, 15 years of watching Vancouver prices go up and up and up. Now some of you young bucks may be thinking how could i not see the inevitable rise? Well, reading online blogs was a really bad idea. You get yourself surrounded by people who are confident the peak is in and lower prices are around the corner. I’ve lost count of how many government policy changes or macro-economic developments were touted as the catalyst that would make the market meaningfully correct.

The latest would seem to be the November rule change that forces non-insured mortgage holders to stress test their mortgages at the going rate +2%. I can see many here who now hold onto this policy change as their salvation. Inevitably the policy will be watered down, or there’ll be some clever mortgage broker assisted route around it, or it just simply won’t have the effect you are looking for.

Even though a housing correction would virtually be too late for me now anyway (i’m 45), I STILL hope each new policy change (etc) is “the one.” Thinking “this time it’ll change” is very seductive but history is not on your side.

#58 MF on 10.02.17 at 8:42 pm

31 I’m stupid,

You are right. Cannot argue with that.

Still Can’t stand renting. There’s another complaint for you. Write that one down.

MF

#59 Pete on 10.02.17 at 8:46 pm

I grew up in Toronto in the 60’s to mid 90’s…it’s turned into a typical dirty American city. Glad I left and never looking back. Niagara region has so much more to offer.

As for RE? It’s driving much our economy and that’s becoming an ever more dangerous situation for what’s left of economy. We have almost no manufacturing except for the likes of bombardier…who are being spanked and will start shedding good paying jobs. I give it another 9 – 12 months before it pops.

#60 I thinks I know something on 10.02.17 at 8:47 pm

56 ulsterman on 10.02.17 at 8:31 pm

Inevitably the policy will be watered down, or there’ll be some clever mortgage broker assisted route around it, or it just simply won’t have the effect you are looking for.

———————————————————–

Exactly! Money laundering and massive incoming immigration trumps everything else and are driving prices higher. And any policy changes purportedly aimed at controlling housing prices are just BS. The powers that be just want to make it look like they’re taking a tough stance, but they certainly don’t want housing prices to actually go down. The truth is that if prices do go down, policy will be reversed.

You just brought the blog IQ down by five points. — Garth

#61 Krisha on 10.02.17 at 8:50 pm

Fills my heart with joy to see so many nervous, greed driven maniacs talking tough! But you can feel the fear in the air!! Sorry suckers, Game Over!!

#62 Lost...but not leased on 10.02.17 at 9:03 pm

History sez…beware of ides of…Fall/Autumn??

Economic enemas…seem to happen in Sept./Oct.???

Great Depression OCT. 29, 1929
Black Monday ..OCT. 19, 1987
Stock market Crash 2008..SEPT. 29, 2008

#63 Algonquin Settler on 10.02.17 at 9:06 pm

#41 OSFI on 10.02.17 at 7:47 pm
One of my friend works at CIBCC and said that banks already started stress testing all mortgages at 4.84% even though OSFI rules are not implemented. Any confirmation from blog dog
………….

My husband and I purchased three houses between 2012 and 2015, already had a personal mortgage. In each case Scotia stress-tested us at the posted 5 year rate (4.64%), even with two of the purchases with 20% in equity. Long-time customers with very good credit rating, received very good mortgage rates, far below posted rate.

Banks stress-testing at higher rates are nothing new.

#64 Lost...but not leased on 10.02.17 at 9:15 pm

Lessons to be learned/plagiarized from the past..

IMHO…the Canadian banks are into fiscal foreplay mode…

They saw the 2008 economic carnage in the USA , and are simply using the same playbook whereby they acted as credit pushers to naive fiscal junkies…till the matter reached a tipping point whereby risk exceeds reward, and they are simply washing their hands in concurrent anticipation of hand- out$$$$ from Fed Gov’t..aka La “Quantitative Easing” mais oui.

Canada avoided a lot of the 2008 economic carnage…or was it delayed….? but the pattern for the same carnage was in play since them…

Comments blogging comrades ????

#65 No comment on 10.02.17 at 9:24 pm

Las Vegas shooter was multi-millionaire real estate investor.

#66 TnT on 10.02.17 at 9:34 pm

#59 Pete on 10.02.17 at 8:46 pm
I grew up in Toronto in the 60’s to mid 90’s…it’s turned into a typical dirty American city.
Glad I left and never looking back.
Niagara region has so much more to offer.

I always laugh at T.O deserters who claim “it’s better outside”.

Either you want to live in a metropolis or you don’t.

There is only 1 metropolis in Canada and that’s Toronto.

Don’t even waste your time replying how Toronto sucks and its better in Niagara.. lawlz…

Niagara region is great for the 9-5er zombie…
where you’re a slave to the weekend house & lawn chores…
with the occasional Smart Center / Costco cattle horde excitement…

Enjoy!

#67 yorkville renter on 10.02.17 at 9:37 pm

Whomever looks at one month of data and thinks “hey, glad things are back to normal” is a fool.

A fool and their money are soon parted.

#68 acdel on 10.02.17 at 9:41 pm

I should of posted this a few day’s ago on Ryan’s article but as usual life gets in the way. It is regarding an interesting perspective on why the economies around the world are fed up with the U.S. dollar controlling the world economy.

Feel free not to post it Garth, it is your blog but I found this to be a most interesting read but one will need to subscribe to the newsletter in order to read the articles. One’s choice as well as yours, thanks.

https://www.equedia.com/equedia-letter/

#69 jeremy on 10.02.17 at 9:42 pm

Well my friend’s semi house just sold $300k over asking for $1.2M in downtown Toronto. Not sure where this data is coming from, but the apocalypse is nowhere near the bullseye of 416

Who said anything about an apocalypse? This markets just going to melt over time. Your friend is smart. — Garth

#70 Smoking Man on 10.02.17 at 9:43 pm

Dylan his dad and his band all safe. Thank God When I met them in Nashville few weeks ago they gave me vip tickets to the concert. A coin tose keeped me out of Vegas this week end. Glad. But that’s how life and death is. Is a fluk. It’s a coin tose.
They loved my book and are blog dogs. This pathetic blog has reach.

http://people.com/country/dylan-schneider-account-from-harvest-festival-shooting/amp/

#71 FOUR FINGERS WATSON on 10.02.17 at 9:55 pm

#60
Exactly! Money laundering and massive incoming immigration trumps everything else and are driving prices higher. And any policy changes purportedly aimed at controlling housing prices are just BS. The powers that be just want to make it look like they’re taking a tough stance, but they certainly don’t want housing prices to actually go down. The truth is that if prices do go down, policy will be reversed.

You just brought the blog IQ down by five points. — Garth
………………………………………….

I don’t think the govt. wants prices to go down either. I think that they would like to: a. protect the banks, and b. Hold prices right about where they are. But I don’t think anything is gonna work as long as there is no capital gains tax and interest rates are dirt cheap.

#72 mikes on 10.02.17 at 10:00 pm

#63 Algonquin Settler on 10.02.17 at 9:06 pm

‘My husband and I purchased three houses between 2012 and 2015, already had a personal mortgage. In each case Scotia stress-tested us at the posted 5 year rate (4.64%), even with two of the purchases with 20% in equity. Long-time customers with very good credit rating, received very good mortgage rates, far below posted rate.

Banks stress-testing at higher rates are nothing new.’
___________________________________________

They did not stress test everyone across the board. They did it selectively at their own discretion….you were likely tested because they were rental properties(not primary).

But one of the issues getting less airplay is the elimination of ‘mortgage bundling’….which means a bank like CIBC can no longer team up with a mortgage broker to get you approved with funds from both sides. A lender like First National(FN.TO) is going to get demolished

Trust me, if the banks didn’t care this was coming down the pike, they wouldn’t be pushing back so hard against me…..and believe me, they are pushing back HARD. Once they are forced to stress test everyone across the board, make no mistake, it is going to decimate the market…..prices easily 20% lower but likely 30% is back to 2010 prices

#73 Smoking Man on 10.02.17 at 10:04 pm

Me and the kid. So happy he’s ok.

https://twitter.com/SmokingMan/status/910691151925018624

#74 conan on 10.02.17 at 10:07 pm

What is that dog doing? I thought they only did stuff like that when they are soaking wet.

The right to bear arms really only meant flint lock rifles. Time to open Pandora’s box. The camel’s back has too much straw on it.

#75 AGuyInVancouver on 10.02.17 at 10:13 pm

#10 Easy Street on 10.02.17 at 6:42 pm
Condos are the easiest things to buy and the toughest things to sell. Never ending stream of new ones being built and more of them trying to be off-loaded by people who suddenly wake up and realize they can rent the same thing for much less $ than the outgoing rent, strata fees and property taxes, special levies etc. every month
_ _ _
There are Zero problems with selling a condo in Vancouver. Old new with prices now averaging around $1000 a sq/ft it doesn’t matter.

#76 tccontrarian on 10.02.17 at 10:22 pm

“Of course, most people are now focused on Thanksgiving. Then Haloween. Then Christmas. And after that they might not know what hit them. Save your offers until then.” -GT
—————————————————————-

Now this sounds a lot like you’re ‘timing the market’ (while at the same time you adhere to the claim that no-one can time the markets).

As far as timing this particular market (ie. YVR/GTA RE);
I’m gonna wait at least 2-3 more years – first the ‘bleed’, then the ‘crash’.

Patience is a virtue.

TCC

#77 mikes on 10.02.17 at 10:30 pm

#76 tccontrarian on 10.02.17 at 10:22 pm

It took the market 6 years back in the mid 90’s to bottom…….waiting 2-3 years will do nothing for you. could be 10ish years before this all plays out

#78 Smoking Man on 10.02.17 at 10:31 pm

What pisses me of about mass shooters msm always publishes theit teal names. Pisses me off.

Insporing the next great ratings story.

They add fuel to the fire of losers that never fiured out how to trade forex in tax ftee islands.

#79 tccontrarian on 10.02.17 at 10:37 pm

#49 I thinks I know something on 10.02.17 at 8:11 pm

Ask yourself, “Where will GTA house prices be in 10 year’s time”? The best future indicator is what happened in the last 10 years. You can be sure that they will be more expensive. Maybe a lot more.
**********************************************

Look up ‘recency bias’. Then you’ll see why the next 10 years will be nothing like the last 10.

TCC

#80 yorkville renter on 10.02.17 at 10:59 pm

Question for #69 – if your friend listed for $1 and sold for $1.2mm would you say the market’s on fire because the house sold for $1.2mm over ask?

It’s pathetic that people look at every “over ask” and assume the ask was priced according to the market… it’s a ploy the RE cartel uses to make things look hotter than it is.

Tell us – was your friend actually expecting to fetch $900K, or was this a marketing ploy by the agent?

I know of plenty of offers on homes for the asking price just to have the seller said “sorry, we wanted more” .

It’s a smokescreen… to fool emotional people into “buy now or forever rent”

#81 rental property math on 10.02.17 at 11:00 pm

#44 Stone on 10.02.17 at 8:00 pm
property math on 10.02.17 at 7:32 pm

Keep waiting and renting, it’s helping me out greatly.
I was able to rent one half of my duplex in Hamilton within a week to young professionals. Told them right off the bat only a 1% rent increase per year because I’m such a nice guy.

Thanks renters!

—–

Did you miss my previous post #27? Trust me, I think the renter is the winner. If you bought your duplex when prices were more reasonable (let’s say more than 6-7 years ago) then I understand. If less than that, renting is the new black, not owning.

—————————————————-

Hmm lets see.. paid $275 in 2013.
Brings in $2600 /m in rent.
I don’t pay any utilities
Property tax 3500
Maintenance approx 2500 yearly
Insurance $1000
Mortgage interest this year $6600
Net: $17600
Down payment: $60,000
This year’s net percentage: 29.33%

Place would probably sell for 525K today.

And what did your balanced portfolio do?

#82 Ian on 10.02.17 at 11:05 pm

#48 Stone

The best part of this blog is we can all help each other identify the bottom, which I don’t think has a chance of being in 2018.

The monetary tightening is a clear shining path to lower house prices. And a hawkish new US Fed person is going to put the pedal down on higher rates like crazy.

Even without that the selling of the 4t on their balance sheet guarantees a rising rate curve in the US for a long time, giving BoC plenty of room to crank rates up.

We will both be renting a long time!

Just make sure you have some stops in on that portfolio of yours :)

#83 Pete on 10.02.17 at 11:15 pm

#66 TnT

I have a 4000sq ft home in St Catharines that cost $400k last year. I manage my investments from home and walk to the beach with my glass of wine each night. Why would I want live in a moister-infested overpriced city like Toronto? LOL

#84 Dolce Vita on 10.02.17 at 11:15 pm

B20 for uninsured mortgages will drop the number of qualified buyers by a lot and lower mortgage amounts.

+2% Stress Test on insured mortgages (1st 2016 vs. 1st Qtr 2017):

Vancouver
New mortgages, 9,162 down to 6,226, -32%
Mortgage Amount, $553,719 down to $517,415, -7%

BC
New mortgages, -20%
Mortgage Amount, $384,430 down to $375,126, -2%

Explains why YVR RE Cult crowing about Condo sales, they got turned down for everything else. The above impact on the cheap seats mortgages for the barely scrape together 5% down crowd.

Some here say not affected by B20. Good for you BUT apparently MANY were.

They will get alternate financing instead?
Nope, link below to what the largest of alternate lenders says about what B20 will do to their business.

If you do not think B20 will negatively impact sales and prices, you are dreaming in technicolor (i.e., fewer buyers, less money to spend = prices go up to the RE Cult).

BTW, 50% of those now scraping together 20% down are JUST able to put that amount together using alternate lenders.

Hate to burst the RE Cult narrative here, but the numbers do not lie, people do.

Above from TransUnion, Aug. 2017, whom might know a thing or two about Canadian debt load.

http://www.bnn.ca/real-estate/video/big-banks-win-alternative-lenders-lose-with-new-mortgage-rules-first-national-financial-ceo~967389

#85 A Girl Who Invests on 10.02.17 at 11:23 pm

I just checked CREA’s website for the monthly stats and they appear to have removed or not updated most of the stats in months. The national price map page has disappeared. What the hell? I really wanted to check out the Regina stats for September! Does anyone know this info available on another site?

#86 Ian on 10.02.17 at 11:29 pm

The suggestion that September was somehow bullish is absolutely hilarious!

GTA inventory on Zolo is back on a serious rise and is SO far ahead of sales, it’s like Voyager’s distance from earth at this point. The only difference being Vouager is still working and Toronto’s housing market isn’t LMAO

#87 Duke on 10.02.17 at 11:32 pm

#45 A123 on 10.02.17 at 8:03 pm

I left Toronto with the same reason and will never go back. Living in Toronto is like being part of Trueman show.

#88 Dolce Vita on 10.02.17 at 11:41 pm

Apparently many here think, yet again, China and other foreign investors will come to the RE rescue.

Well CRA must be reading GreaterFool as well and seem to be developing an appetite to ensure foreign investors do not skirt foreign buyer taxes which tend to be an ROI downer if you are an offshore investor in YVR and 416 RE (skirt as in FAKE Cdn. residency).

Seems the MSM missed this or are just recently waking up to this fact, of course, they are in on the RE Cult themselves and do not like bad news.

CRA’s headline:

“Four more sentences in the largest immigration fraud case in British Columbia history”

https://www.canada.ca/en/border-services-agency/news/2017/09/four_more_sentencesinthelargestimmigrationfraudcaseinbritishcolu.html

Typically, the above does not get better, it gets worse as success emboldens CRA.

#89 cd on 10.02.17 at 11:46 pm

One thing I was recently thinking about the possible Morneau tax changes and the Toronto RE market, is that certain suburbs have a lot of immigrants (for ex. Richmond Hill, Brampton). These immigrant communities have a lot of small businesses that operate purely for those in the community (everything from butchers and bakers to clothing and restaurants). With these tax changes, these businesses will suffer and eventually RE in those areas will be significantly impacted.

So this leaves me to believe that everyone is screwed then. The non-immigrants blow all their money due to the doctrine of consumerism and thus have little or no down payments and thus massive loans with increasing rates. The immigrants tend to save their cash, but many who have small businesses will be screwed by Morneau. I’m really tired… maybe it will make sense in the morning.

#90 Duke on 10.02.17 at 11:46 pm

#76 tccontrarian on 10.02.17 at 10:22 pm

I’m gonna wait at least 2-3 more years – first the ‘bleed’, then the ‘crash’.

Patience is a virtue.
————————-

Very smart!!

#91 Approved on 10.02.17 at 11:49 pm

Last year preapproved for 650k, this year/last week only 550k and my income rose 10%

Truth

#92 TnT on 10.02.17 at 11:59 pm

#83 Pete on 10.02.17 at 11:15 pm

Yeah, but it’s in St Catherines…

PS… I rent a house half the size, have a guy manage my investments and walk to the beach ever night with my dogs. Drink beers on any # of patios – kayak Toronto islands, bike 100s of kilometres of nature paths plus access to tons of authentic variety ethnic restaurants. All done after or before or during work. Endless supply of variety of people, places, exhibits, events, etc…

And my kids won’t grow up thinking Toronto is where the big billboards exists.

Like I said, either you want metropolis or you don’t.

Glad you found paradise.

Toronto vs St Catherines – lol indeed….

#93 bdwy sktrn on 10.03.17 at 12:01 am

just looking at a nice place in south boston.

small lot by van standards 2600′
bigger house 3400′

only 2.5m. about the same as vancouver westside.
(and there are not 25 daily non stops from china to boston)

what bubble?

#94 Dolce Vita on 10.03.17 at 12:04 am

To the Crowing Condo, make YVR RE great again, Crowd, many of your new condo price gains are a result of assignment flippers boosting Development prices. One YVR Realtor reckons 25% of development sales are flipped.

Of course, CRA which must read GreaterFool, want to ensure they get their pound of flesh from GST on the flip and Capital Gains on the flip profit.

So much so they are going to court to get client lists from shyster Developers benefiting from these price gains, yet, pleading ignorance, we followed the foreign buyer rules and we did nothing wrong (nudge, nudge, wink, wink).

Yup, client and sales lists, to find the assignment flippers, foreign or otherwise.

Seems CRA sprouting a few these days:

http://www.cbc.ca/news/canada/british-columbia/cra-takes-developers-to-court-seeks-information-on-pre-sale-condo-flippers-1.4223488

So, if the YFR RE Cult thinks Condo prices are going to keep rising like crazy, with B20 coming and CRA breathing down the necks of those that are responsible for the price increases, well Garth posted an enticing Unicorn photo for the non-believers a while back.

Queue HHCE!

#95 Happy Housing Crash Everyone! on 10.03.17 at 12:14 am

49 I thinks I know something on 10.02.17 at 8:11 pm
Ask yourself, “Where will GTA house prices be in 10 year’s time”? The best future indicator is what happened in the last 10 years. You can be sure that they will be more expensive. Maybe a lot more.

______________________________

This is why is HATE elementary school drop out SHYSTERS. You do realize past results dont guarantee future returns? You also know SHYSTERS like you would be in jail if you worked in financial industry. The governments has to shut the SHYSTERS down. They truly are a terrible bunch of human scum. You give honest realtors a bad name. The government really has to do something about SHYSTERS. I will fire off another round of emails. SHYSTERS have got to go.

#96 DON on 10.03.17 at 12:16 am

US factory growth hits 13-year high, but UK economy ‘loses momentum’ – as it happened

https://www.theguardian.com/business/live/2017/oct/02/uk-manufacturing-growth-hard-brexit-eurozone-monarch-airline-fails-business-live

Bank of England tells lenders to find £116bn to help prevent bailouts

https://www.theguardian.com/business/2017/oct/02/bank-of-england-bailouts-rbs-lloyds

Millions wiped off value of properties in UK’s wealthiest streets

https://www.theguardian.com/business/2017/oct/02/zoopla-reveals-changing-fortunes-for-britains-wealthy-homeowners

#97 acdel on 10.03.17 at 12:22 am

Perhaps this will put some perspective into the little things that we worry about, this man ” Lt. Colonel Stanislav E. Petrov” is a true hero, if it was not for him many of us, the world would not be here.

http://tvo.org/video/documentaries/the-man-who-saved-the-world

#98 Karma on 10.03.17 at 12:24 am

#63 Algonquin Settler on 10.02.17 at 9:06 pm
“#41 OSFI on 10.02.17 at 7:47 pm
One of my friend works at CIBCC and said that banks already started stress testing all mortgages at 4.84% even though OSFI rules are not implemented. Any confirmation from blog dog
………….

My husband and I purchased three houses between 2012 and 2015, already had a personal mortgage. In each case Scotia stress-tested us at the posted 5 year rate (4.64%), even with two of the purchases with 20% in equity. Long-time customers with very good credit rating, received very good mortgage rates, far below posted rate.

Banks stress-testing at higher rates are nothing new.”

That’s true. But the people you talk about aren’t the ones being put at risk by rising interest rates. It’s the young people who don’t have “long-time” relationships or have ever seen rising interest rates.

#99 DON on 10.03.17 at 12:27 am

Disclaimer: The intent of the the below is not to start an outright war against the boomers. Be forewarned SCM is gonna have a field day with this one.

“Baby boomers are enjoying a second bite of the economic cherry

While older Britons have enjoyed two spending booms, millennials have been squeezed by flat incomes and rising housing costs”

https://www.theguardian.com/business/2017/sep/29/baby-boomers-are-enjoying-a-second-bite-of-the-economic-cherry

********* Why do Millens keep buying their way into big debt – bailing out the Boomer? Bad education?? Bad Parents?? OH wait a minute!

#100 Ronaldo on 10.03.17 at 12:54 am

#10 Easy Street on 10.02.17 at 6:42 pm

Condos are the easiest things to buy and the toughest things to sell. Never ending stream of new ones being built and more of them trying to be off-loaded by people who suddenly wake up and realize they can rent the same thing for much less $ than the outgoing rent, strata fees and property taxes, special levies etc. every month
—————————————————————-
Yes, and those people who lock into a long term mortgages and for some reason need to sell the place with mortgage interest rising could find themselves having to pay huge penalties to our wonderful lenders if they have to sell and break the mortgage. This imo is one of the biggest risks to these moisties who are jumping into these boxes in the sky given the 50% chance one or the other will be baling out on the other due to financial stress. And that is not taking into account the likely drop in prices that will come along with the interest rate rises plus realturd fees etc. etc. Major trap. The renters may turn out to be the winners here. Right MF?

#101 Ronaldo on 10.03.17 at 1:02 am

#75 AguyInVancouver

There are Zero problems with selling a condo in Vancouver. Old new with prices now averaging around $1000 a sq/ft it doesn’t matter.
——————————————————————
A heck of a lot of money for air space. So the clothes closet is worth $125000. What a deal.

#102 Ronaldo on 10.03.17 at 1:04 am

Correction to my last post. Closet only worth $12,500. What a deal.

#103 Dolce Vita on 10.03.17 at 1:10 am

#81 rental property math

Ian and others are talking about more expensive properties as in YVR and 416. The average resale condo in YVR sells for $857K.

If you calculate cumulative interest 48 months later with 22% down as you did on an $857K condo with a 3% rate, that number equals:

$77,094

Your numbers after 48 months ($215K mortgage, 3% rate):

Net Rental Income $70,400
Cum. Int. Paid $24,233
Net Invest Income $46,167
Avg. Return 19% (=46167/60000/4 yrs)

That $77,094 cum int for a current YVR condo would wipe out your entire Net Rental Income and result in a negative avg. return. To get a 4 yr 19% return using your cost structure, rent would have to be $3,690/mo for that YVR condo.

Running the same numbers for the average 416 property at $839K…well, I think you get their point.

But great for you, wherever that investment property of yours is located.

19% return avg. over 4 yrs certainly something to be proud of and it will get better as your mortg. int. portion diminishes.

#104 Ronaldo on 10.03.17 at 1:27 am

ACCORDING TO STEVE SARETSKY:

”Happy Monday Morning!

The newly elected NDP Government recently came out stating “Housing is a critical component in many people’s equity and their retirement prospects and we want to make sure that we don’t adversely effect the market place. What we want to make sure is we get speculation out.”

In other words, we ain’t touching this thing.

While many were left utterly upset, this is the reality of politics. You can’t simultaneously promise affordable real estate, while also creating more jobs, higher wages, and strong economic growth. We were duped.

The reality is, housing busts always have major economic consequences. Including massive layoffs and a deflationary shock that would send the Bank of Canada reaching for ammo they simply do not have.

While home prices are completely whacky, the consequences of falling Real Estate prices would also trigger an unraveling of a gigantic credit bubble which includes $200 Billion of HELOC debt (that’s 14% of our GDP) while simultaneously hitting the banks loan book, which consists of 40% Residential Real Estate.

Thus nobody wants to be the fall man, including Horgan. Hard to blame him, even if he duped all of BC…”

#105 Karma on 10.03.17 at 1:46 am

Yikes… “Worse may yet to come”.

http://www.bnn.ca/why-the-worst-may-be-yet-to-come-for-toronto-housing-1.870952

#106 Bob Dog on 10.03.17 at 2:10 am

Time is the fire in which we all burn. I’ve been predicting a crash in bc since 2005. Inflation will eventually equalize everything. That was the plan all along. Globalization is an inter-generational endeavour. Given enough time globalists could breed humans the same way we breed dogs.

Read more sci-fi

#107 Disgruntled Condo Owner on 10.03.17 at 2:46 am

The least expensive detached house in Burnaby, still just over a million. And what a looker.

https://www.zolo.ca/burnaby-real-estate/4152-parker-street

#108 When Will They Raise Rates? on 10.03.17 at 4:25 am

$RADS

Buy @ .00101
Sell @ .0012

https://i.imgur.com/m6gwkz9.jpg

#109 When Will They Raise Rates? on 10.03.17 at 4:31 am

*typo Sell @ .00115

#110 When Will They Raise Rates? on 10.03.17 at 4:32 am

*.001115

#111 A-No on 10.03.17 at 5:18 am

11 Toronto Best City in World on 10.02.17 at 6:42 pm

Toronto real estate will never fall….Toronto is the best city in the world, and over 400,000 newcomers from overseas and within Canada want to make Toronto their refuge of heaven.

Toronto is #1 for restaurants, fine dining, safety, women,dating and career advancement.
==================

Yeah I like my women in Muck Mucks and cover with fur!!!

#112 ANON on 10.03.17 at 5:47 am

Big kitty bounce

Golden.
So, finally there’s a bull trap. Not different this time, eh? Happy 9-th TARP anniversary!

#113 Stone on 10.03.17 at 5:47 am

property math on 10.02.17 at 11:00 pm
#44 Stone on 10.02.17 at 8:00 pm
property math on 10.02.17 at 7:32 pm

Keep waiting and renting, it’s helping me out greatly.
I was able to rent one half of my duplex in Hamilton within a week to young professionals. Told them right off the bat only a 1% rent increase per year because I’m such a nice guy.

Thanks renters!

—–

Did you miss my previous post #27? Trust me, I think the renter is the winner. If you bought your duplex when prices were more reasonable (let’s say more than 6-7 years ago) then I understand. If less than that, renting is the new black, not owning.

—————————————————-

Hmm lets see.. paid $275 in 2013.
Brings in $2600 /m in rent.
I don’t pay any utilities
Property tax 3500
Maintenance approx 2500 yearly
Insurance $1000
Mortgage interest this year $6600
Net: $17600
Down payment: $60,000
This year’s net percentage: 29.33%

Place would probably sell for 525K today.

And what did your balanced portfolio do?

—–

You are forgetting you still need to inject principal payments. Over 4 years, add $24,000 approximately to your $60,000. The return on your rental now drops to 21%. Still nice though. Did you forget that you have to pay income tax on your net income. Might that be about $5000? Now your return drops to 15%. Did you collect $2,600 a month from the outset or is that just recent? If you did, fantastic but I’m doubtful as that is probably a recent amount your are charging. That might be within the last year only or so. Kiss big increases goodbye if you live in a province with rent control going forward. What was your land transfer tax when you bought the place? Legal fees? Possible vacancy? Cost getting a new tenant when one leaves? If no one has trashed anything yet, count yourself lucky. Is your repairs and maintenance $2500 consistent? When does the roof need to be replaced? The furnace? The air conditioning? Windows? I see that 15% dropping further when all those hidden/undeclared costs are factored in. You say you could sell for $525,000. Ok, now knock off realtor fees of 5% + HST which comes to $26,250 + $3,412.50 for a total of $29,662.50. You may sell for $525,000 but then you might be sitting for a while waiting for a buyer. As an investment, your property earnings versus your 2013 purchase price makes sense and the gamble paid off. As a real estate investor, your currently valued price is unattractive – then again, there are still fools who might still overpay and become cashflow negative. To me, it’s nonsense as I would only pay your original purchase price as that is consistent with the 1% rule per door for rentals. If high cost expenses mentioned above occur after you sell, good for you. If not, those returns will slowly erode your proft the longer you hold. Also, sell the property and you’ll have a capital gains tax to pay. Hmmm… $220,000 plus whatever income you earn normally may possibly put you in the top tax bracket. Say goodbye to possibly 25% of your capital gain which comes to $55,000. Don’t forget HST will need to be paid on that property as it’s not a personal residence. On $525,000, that’s $68,250 in Ontario. As a purchaser, I’m not interested in paying that for you unless I’m a professional real estate corp. Also, a professional real estate corp would never give you $525,000 as that is too rich for current rent collected. I can guarantee that 100%.

Over that same 4 year period, my money has compounded 10% annually. So, if I invest $60,000 over 4 years, injecting $6000 on top of that, each year, my investment would grow to about $119,000. Knock out about $4000 in taxes paid leaving $115,000. To be conservative, I consider a 7.5% return annually to be safe which gives about $8,000. After your principal payment is made of $6000 (which you have no choice to make) and income taxes that needs to be paid on your net rent, your cash in pocket comes to about $6,600.

So, if you were lucky enough to sell your property today at $525,000, your net profit would be about $67,000. Add your downpayment of $60,000 and $24,000 principal payments over 4 years for a total of $84,000 and you get $151,000, so a $36,000 difference between what you could potentially make and what I did. This might be a bit higher based on your annual profit but, as I mentioned earlier, you need to pay taxes on that and I have a hard time believing your profit has been consistent for the full 4 years so add an additional $10,000 to be generous, so $46,000 instead of $36,000. It’s ok but when you throw all your money into one asset, you should expect a better return. Also, if you have a high cost repair and maintenance in the meantime, you might be kissing that $46,000 away or at least part of it. Lastly, paper profits are only worth the paper they’re on. Let’s see if you can sell for $525,000. I don’t know where you are located but I have a hard time believing it. I know what my ETF unit values are and can sell at a moments notice.

Also, read my post #27. I mentioned that a purchase price of $270-290,000 makes sense which is what you did. $525,000 is nonsense.

I’ll stick with my balanced and diversified portfolio. I have 20 years of experience with that and have weathered several recessions and economic downturns. Considering the last 10 years, compounded return is 8% even with the great recession of 2008-9. Balance is now just $20,000 shy of 7 figures. You have 4 years of experience and the future is not looking good for real estate (pay attention to higher bond rates is all that needs to be said). Has your real estate investment weathered economic downturn? I don’t think so yet but it will in the near future.

I still think I made a super duper choice.

#114 under the radar on 10.03.17 at 5:57 am

The premise is that the real estate market is fuelled by cheap debt and once the debt becomes significantly more expensive , those monster mortgages will sink those poor folks who irrationally loaded up. I think thats partially true. But, a lot of real estate is owned outright or has little debt relative to value.
What about the stock market? From what i see , a record amount of margin is fuelling a frothy market long in the tooth. when that goes pop, there could be blood in the streets. just saying.

#115 Stone on 10.03.17 at 6:01 am

#82 Ian on 10.02.17 at 11:05 pm

#48 Stone

The best part of this blog is we can all help each other identify the bottom, which I don’t think has a chance of being in 2018.

The monetary tightening is a clear shining path to lower house prices. And a hawkish new US Fed person is going to put the pedal down on higher rates like crazy.

Even without that the selling of the 4t on their balance sheet guarantees a rising rate curve in the US for a long time, giving BoC plenty of room to crank rates up.

We will both be renting a long time!

Just make sure you have some stops in on that portfolio of yours :)

—–

No worries. I have a heavier weighting in rate reset preferreds versus bonds so a rise in rates is working in my favour. I’ll amend that when rate hikes have peaked. No stops in place. I only rebalance once a year or more often if there’s a large swing.

I’m good with renting. The carefree lifestyle suits me well. ;-)

#116 Dharma Bum on 10.03.17 at 6:38 am

“Of course, most people are now focused on Thanksgiving. Then Halloween. Then Christmas.” -Garth
——————————————————————–
It’s part of the capitalist strategy.
Continually distract the ignorant masses.
It’s like jingling keys to make a baby look.
Or holding up a brightly coloured bobble to attract a pet’s attention.
Man, people are so mind numbingly stupid.
Then they go to Tim Horton’s, and think: “Ahhhhh….ain’t life grand!”

#117 Dharma Bum on 10.03.17 at 6:46 am

DELETED

#118 Reality 1 on 10.03.17 at 6:58 am

From the smugness of some posters here, it would suggest they lead pretty shallow lives with the main concern being their net worth and the phony status conveyed by home “ownership”.

No soul, just consumerism.

Parochial as all hell and pathetic really.

Your deathbed thought – I owned a home !

An epitaph for a hollow existence.

You’ll only see this after you have wasted your life chasing things.

#119 maxx on 10.03.17 at 7:15 am

#5 Mike on 10.02.17 at 6:33 pm

“When will housing be ever at 2014 levels. Never.
Vancouver still rocking and rolling.”

Just like Humpty Dumpty……’bout time too.

Sheeple are increasingly beginning to realize the opportunity value of cash in the new global economy and those in the fortunate position to save and accumulate had better do so.

The liquid will be best off in the decades to come, especially with corporate pensions being increasingly unreliable.

“…..all the King’s horses and all the King’s men….”

#120 rental property math on 10.03.17 at 7:42 am

#113 Stone on 10.03.17 at 5:47 am

You are forgetting you still need to inject principal payments. – These principal payments are being paid by my tenants

Did you forget that you have to pay income tax on your net income – No I didn’t forget. I didn’t see you mentioning after tax profits either.

What was your land transfer tax when you bought the place? Legal fees? Factored in the 60K down payment which wasn’t much on a 275K house not located in double land transfer tax Toronto.

Cost getting a new tenant when one leaves?
When the tenant who occupies unit 2 leaves I will have to buy 3 cans of paint, spent a couple days painting and cleaning. Maybe half-a full day with a $30/h handyman.
I was just in the unit yesterday, looks fine.
I vet my tenants very carefully.

When does the roof need to be replaced? 5 years The furnace? 10 years The air conditioning? 10 years Windows? 10 years

Is your repairs and maintenance $2500 consistent? As low as $900 as high as $3500 so far

Don’t forget HST will need to be paid on that property as it’s not a personal residence.
Where are you getting that HST needs to be paid on a resale residential property?
This only happens on purchasing new construction and you can claim the HST back upon submitting some forms and a copy of the lease.

RE in Hamilton has been going up 15% per year. 525K is very real. A shyster agent asked if i would sell if he brought me 550K.

So, if you were lucky enough to sell your property today at $525,000, your net profit would be about $67,000. – I have no idea how you got that figure, but then again I am rental property math.

Economic downturn? Me? Sure, I’m in my early 30s.

It’s ok but when you throw all your money into one asset, you should expect a better return. – Picked up some Enbridge stock at $50.25. Started off with tangerine funds and then moved over to mawer.

Thought it would make sense to let a renter buy me a house and then use the money I earn and save diligently to invest in mawer balanced, ZEB and ENB.
Some smart guy told in his early 60s told me that.

#121 Howard on 10.03.17 at 8:18 am

#118 Reality 1 on 10.03.17 at 6:58 am
From the smugness of some posters here, it would suggest they lead pretty shallow lives with the main concern being their net worth and the phony status conveyed by home “ownership”.

No soul, just consumerism.

Parochial as all hell and pathetic really.

Your deathbed thought – I owned a home !

An epitaph for a hollow existence.

You’ll only see this after you have wasted your life chasing things.

——————

Indeed. The latest appears to be some dude who thinks he’s the man because he bought a house in Hamilton lol. I lived there. Mac alumnus. Class of 2003. Aside from Westdale I believe it’s still a shithole.

At 34, three years ago, I decided that Toronto’s shallowness was getting to me so I upped sticks and moved to Europe. Life is expensive here. Financially I’m poorer here than I would be if I’d stayed in TO. But I’m richer in pretty much every other way imaginable. The only difficulty is the distance from my family.

Oh but our new resident tycoon has a shack on Hamilton “Mountain”! He’s so cool!!

#122 MF on 10.03.17 at 8:28 am

#114 under the radar on 10.03.17 at 5:57 am

Yup. Like my parents, who bought RE outright in the 80s and 90s with zero mortgage.

Interest rates will rise at a glacial pace and then be lowered again as the next inevitable crisis hits.

Very few everyday people trust stocks with their entire net worth like they do RE.

MF

It’s not stocks vs a house – no matter how you continuously try to distort financial logic. Those who put all their net worth in any one basket (including property, at these levels) is courting risk. Diversification, through a variety of financial assets (plus real estate, if you can afford it) is the goal to achievable, long-term success. Most people don’t get it. So, most fail. — Garth

#123 crowdedelevatorfartz on 10.03.17 at 8:44 am

This bears repeating.

Toronto
The biggest housing bubble in the world.

https://ca.reuters.com/article/domesticNews/idCAKCN1C32X8-OCADN

And the REAL ESTATE CARTEL continues to fabricate, hide, and massage the real sales numbers.

HAPPY ENFORCED GOVT LEGISLATION SHYSTERS!

When this goes down hard and the bankrupt ex housing voters are screaming for blood……does the Real Estate Cartel really think the politicians will stand behind them in solidarity?

Lets make a prediction.

If this implodes over the next year or so and Trudeau is facing a tough re election……will he …. or one of his opponents throw the real estate industry under the voter bus? Easy pickings.
Time for a Royal Commission into the sales tactics, disinformation, media manipulation, and blatant lies spewed forth by an industry that lives and breathes off it’s commission based earnings……

#124 Coining "Dead cat bounce" on 10.03.17 at 9:17 am

Or even a dead cat bounce. (That’s when you throw a deceased feline off a balcony. It bounces. But it’s still dead.)

*****
Must have been an interesting conversation when the expression was coined. “Hold my scotch, give me the dead cat and watch this”

Now you have a glimpse into life on Bay Street. — Garth

#125 Ian on 10.03.17 at 9:19 am

Richmond Hill down $450k in five months, wowza!

I make that $3k per day.

#126 Penny Henny on 10.03.17 at 9:29 am

From the stats provided I see that Markham prices were up by $1,888 month over month. Very Lucky indeed!

#127 Ian on 10.03.17 at 10:36 am

I predict Richmond Hill median price is six figures by year end.

That’s only 23% more drop.

#128 Mattl on 10.03.17 at 10:37 am

#113 – Stone you keep raving about your balanced portfolio, and how great renting is, but you gave away in an earlier post that you sold a house at peak prices last year. That seems to be the typical renter around here, they made a bucket of cash on real estate and are now trying to convince everyone that renting is the ticket. Well ya, if you made 200K-1MM, and don’t need a large place (single, retired, no family) that changes the math pretty significantly.

Would love to hear from a middle / upper class renter that has been renting in YVR or the GTA the past 15 years at market rates. There is no way the math works that that renter is in a better position then the person that bought a home at market rates the past decade.

Sure, the guy that lived in a closet, or at home, and ate KD may be on par with the guy that bought more then he could afford and had to jack a house to do a foundation. But the large majority of homeowners – yourself included – made out like bandits on RE. Guys with family’s that need stable SFH’s, maybe a backyard for a dog.

So it’s a little disingenuous to come here and brag about your balanced portfolio that was injected with a big amount of RE cash.

#129 GTA RE on 10.03.17 at 11:06 am

#128 Mattl

+++1. Great comment. I agree 100% with you. Stone and HHCE will be regretting their RE mistakes.

#130 GTA RE on 10.03.17 at 11:15 am

#116

Tim Horton’s everyday is awesome. I drink my timmies while searching online for RE almost everyday cause life’s awesome when you only have to work for yourself cause your positive RE cash flow allows this.

#131 GTA RE on 10.03.17 at 11:19 am

#115

Life is grand when landlords have renters like you.

Have a great day folks. Sun’s shining, so warm in the GTA.

#132 JohnK on 10.03.17 at 11:22 am

Fascinating how some still hold on to the belief that somehow prices will stay up…

And I have to disagree with all those saying that prices have been going up for decades, which is fact but what they miss are the price gains of last two years.

Toronto has always been an expensive place to live, but that is OK there is no problem with real estate going up in value in a city like Toronto above inflation, and that is what we had in the 2000s and into early 2010s. If I look at prices in 2012 for example, yes RE was expensive but I could still buy with comfort, even though I could save a ton of money by moving to Ottawa or Hamilton.

Again, the issue is last 2 years or so where values went up 30% year over year absolutely driven by speculation and nothing else. People are sheep and have zero financial literacy, all the BS surround RE in this town has made everyone think this is Wallstreet and they are Bud Cox. There is no reason to justify these gains, it simply makes no sense.

I’m a strong believer that this thing will tumble without any OFSI changes or further spikes on interest rates.

Simple fact is that moisters are priced out and how much Bank of Mom is there left…The generation of hipsters that bought into this mess and opened businesses selling 5$ Jamaican beef patties and 20$ burgers are all settled by now. A moister myself I have witnessed this influx of hipsters from out of town coming into the city with money from parents buying homes around bloor street and opening stupidly overpriced shops selling Vietnamese sandwiches, beef patties and burgers at a price that is 5x what these things cost in Chinatown, Eglinton West and diners around town. And who were their clientele? Other hipsters who thought its cool to spend 5$ on an organic espresso, and guess what? Now that s1it has gotten so ridiculous with rental prices no one wants to buy these 5$ beef patties and 20$ burgers.

And the influx is over…On the contrary I know quite more than a couple of millennials that have packed their bags and have moved out or are moving soon beyond GTA because they want to start families and simply can’t get into this market.

Couple the above with the fact that every cab driver around Canada knows about GTA home prices and no one wants to come here any more.

Couple that with the fact that people got all these helocs out with equity shrinking…

This thing is melting and melting fast regardless of what happens.

Common sense and logic prevails and what has happened with home prices in Toronto fits none of that criteria, as such it will come down regardless of B-20 or interest hikes.

Many home owners live paycheck to paycheck as it is, and I bet many are finding it hard and contemplating just getting out of here without any B-20s.

So on what grounds will home prices keep going up?

You have people leaving and less wanting to come, you have condos popping up like mushrooms on a wet morning.

And please no comparisons to YTR, the markets are nothing alike.

#133 Ian on 10.03.17 at 11:25 am

So here’s a question for all those raving about how wonderful Canadian preferred shares are.

Canada’s bank bail-in plan…

http://business.financialpost.com/opinion/joe-oliver-how-the-budgets-bank-bail-in-changes-could-cost-canadian-depositors

What happens when all the preferred shares are converted into common, when the common is getting mashed due to the banks’ mortgage portfolio getting slaughtered?

It’s coming.

Crap. There will be no bank failures and, if there were, no preferreds (or deposits) would be converted. — Garth

#134 IHCTD9 on 10.03.17 at 11:25 am

#107 Disgruntled Condo Owner on 10.03.17 at 2:46 am
The least expensive detached house in Burnaby, still just over a million. And what a looker.

https://www.zolo.ca/burnaby-real-estate/4152-parker-street
_____________________

I’m glad I live a looong ways from Vancouver…

Reminds me of another bubble: Old Dodge pickups with Cummins power. 8-10G’s for a 18-20 year old rust bucket with 400,000-600,000 km on the clock.

Saw one with 600,000 km, no box, no ownership, no third gear, body is shot, 2500.00. This truck would be a toaster oven right now if it had a slant 6 under the hood.

Can you guess what demographic is driving the price up on crappy old Dodge diesel pickups? Have a look at who’s driving the next time one rattles and clanks on by.

#135 MF on 10.03.17 at 11:27 am

Mattl,

Exactly. For someone starting out RE allows the leverage to increase your small down payment into a larger sum well.

It means nothing if your portfolio of 50 k goes up 6% a year..or down like mine did.

People in the GTA and GVR are paying a huge amount to their “landlord” and are left with smaller amounts of left over to invest.

MF

#136 MF on 10.03.17 at 11:36 am


It’s not stocks vs a house – no matter how you continuously try to distort financial logic. Those who put all their net worth in any one basket (including property, at these levels) is courting risk. Diversification, through a variety of financial assets (plus real estate, if you can afford it) is the goal to achievable, long-term success. Most people don’t get it. So, most fail. — Gart”

No it’s not about stocks vs re….but for most people these two are the go to investment types for most people. Given that most people need shelter, don’t trust the stock market, and enjoy the leverage of re, it is the first choice for most people to invest in.

You are correct about risk yes, but those who have leveraged and thrown caution in the wind have came out ahead. No matter how we cut it.

MF

#137 the ryguy on 10.03.17 at 11:44 am

Just got my rejection letter for Garth’s job :(

Sad day, and there is snow on the ground here in Edmonton. Is the new guy going to do occasional blog posts? Im gonna skewer him relentlessly, lol, just kidding, congrats mystery man.

Update In Edmonton RE:

I posted early september that the house Im renting, plus the two neighbours were for sale. Well they all sold in the last 2 weeks, for about 8-10% below asking price, and thats after an initial price reduction.

Mine specifically was listed 409, 399, sold for 378. Assuming conditions clear Im thinking Puerto Vallarta for the winter, who wants to stay in this awful Canadian weather!

#138 Frances on 10.03.17 at 11:48 am

Hi Mattl, I am a 34-year-old middle class renter, renting a condo in the GTA for $1,600/month. I make 100k/year and am able to save $2,500/month, plus bonus. I have grown my balanced portfolio to 300K (Full disclosure, I have had advantages in life that allowed me to graduate debt-free and live with my parents for a few years and save). Even though I can afford to buy my condo with a healthy down-payment, I have run the numbers and I believe it is more cost effective for me to continue renting and saving each month, and allow my investments to grow. By my math, I should have a balanced portfolio of $1,000,000 by the time I am 45 (assuming a 5% ROI, but you never know how the markets will perform). But who knows, maybe if I bought my condo now it would be worth $1,000,000 in ten years anyway…..

That said, my situation is not perfect. I would love to have a home to call my own, and it can be stressful thinking about long-term rental prospects. Rent could increase in the GTA to 2k/month, and I may not be able to save as much. Or maybe I’ll be forced to live in someone’s basement because there just isn’t a lot of rental inventory in Toronto. Still, I get anxious when I look at the TD mortgage calculator and think about signing my life away for the next 30 years just to buy my place. There are pros and cons to both renting and owning I suppose.

If anyone would like to give me advice, I will gladly listen! :)

#139 saskatoon on 10.03.17 at 11:49 am

#116 Dharma Bum

capitalism doesn’t have a strategy.

that’s what makes capitalism, capitalism.

#140 kayaker23 on 10.03.17 at 12:07 pm

Stress test!! I remember my wife and I doing our own stress test before we bought our 1st and only home back in 2001. I honestly can’t remember the going rate (though I believe it was 5.8%) I used back then the 5 year fixed average which was a crazy 11% which was based over 30 years. We based our home purchased on 11%, and could we still swing the mortgage if “A” one of lost their jobs for 8-12 months without any reliable income source and could we handle all the expenses as well without living like hermits . We passed the test but it wasn’t something we would want to deal with for any extended period of time.

Today, mortgage free and very happy on the decisions we made.

Never leave your financial well being in the hands of others – especially the banks –

Food and shelter – keep it simply! Life will shine on you if you do.

#141 PastThePeak on 10.03.17 at 12:08 pm

The banks are, generally, for the B20 rules as they want it to help save them from themselves. No bank wants to lose mortgage business to another lender. They might be getting nervous about the RE market, but if TD is going to offer a rate of X% to Jim, then RBC doesn’t want to be the only bank being “cautious”.

B20 will help the banks be more cautious, but on a level playing field. They want this to avoid a crash in the future.

Whether the B20 rules reduce the buyers enough to cause a crash is anyone’s guess. If it goes through as proposed, I think GTA prices (average) will resume a decline, but the absolute number of households (those who bought with prices above a 30-40% decline from April) affected will be relatively small. It will have a broad “cooling effect” on the wider Canadian RE market, and the economy, but not push it over a cliff (on its own).

There isn’t much RE bubble outside of GTA and YVR. And the drivers in each of those markets is different, IMO.

I can see 2-3 more 25 basis point increases to BoC rate over the next 12 months, but not more, unless the US Fed *really* gets going. Yellen is a dove, and I have read that the Donald thought she was too aggressive on rates, so not sure what to think of who will be next Fed chair.

#142 40 something family man on 10.03.17 at 12:20 pm

#81 Rental Proerty Math

So you made $17k in rental income, netting 29%!!!!! Congrats!!!

My portfolio did not fair as well as you, up only 5% so far this year.. netting me only $75k in gains :(

#143 TnT on 10.03.17 at 12:25 pm

#137 Frances on 10.03.17 at 11:48 am

If anyone would like to give me advice, I will gladly listen! :)

Couple of Points

You are way ahead of the game of “Life”

Milk that rental for all its worth.

If you couple up, then decide if another rental makes more sense.

If you have a child – DO NOT – feel the need to run out a secure a lovely “home” – kid stays in the crib till 2 and needs a 4 x 4 space to hang out inside.

Parks and Play Groups for young children are everywhere in Toronto.

Biggest mistake I see in young couples starting a family is the desire to exit Toronto for Green Space & Schools when in fact the best space for kids is in the city.

Secure a place in the right school district.
Check Fraser Report on Ontario Schools for guidance. Toronto has the best Universities too.

Check out all the Green Space we have in Toronto too. Kayaking / Biking / Beaches & Parks.

I secured a 3 bedroom detached bungalow – 35 x 110 lot – 5 min walk to patio / bars / restaurants, 15 minute walk to Toronto Beaches – $2400 a month.

Tons of deals East End of city.

Public schools here from JK to Grade 12 are top end on Frasier Report.

U of T / Ryerson (and soon York U) subway ride

10 minute drive to St Lawrence Market (Best Butchers / Freshest Fish and Cheese) on Saturday morning for grocery shopping via Kingston Rd / Eastern / Front Street. $1 for parking truck on Saturdays.

Walk to Go Train – 1 stop to Union Station

To buy a house here is 1 million dollar tear down.

#144 n1tro on 10.03.17 at 12:34 pm

#133 Ian on 10.03.17 at 11:25 am

I’m a fellow bullion licker myself but the armageddon you see in financials and/or currency just won’t happen. Too many elites have vested interests in banks aka the system staying afloat that there would be some sort of intervention before things got out of hand. In the meantime, diversify and enjoy passive income while polishing those shiny rocks. That’s what I do.

#145 Renter's Revenge! on 10.03.17 at 12:37 pm

#138 Frances on 10.03.17 at 11:48 am

I often struggle with the same conflicting thoughts.

I think you should do whatever makes sense to you and ignore what everyone else says (except me, lol). It’s good to plan for the future, but keep in mind that your life can change in unexpected ways. So don’t worry about whether you will ever buy a house or not. Just keep doing what makes sense financially now. Having money always gives you options. Maybe you’ll use it to retire early and spend six months a year in the tropics. Maybe you’ll meet the partner of your dreams and decide to buy a house together and start a family. Maybe you’ll give it all away to charity and join a monastery. Who knows? You don’t know what you’ll think or feel in the future. That’s what makes life interesting – the fact that the future is uncertain. So do some generally useful things that will make your life enjoyable in the future, like working, saving money and staying in shape mentally and physically, then focus on enjoying the present as much as possible and see where life takes you!

#146 Pre-retiree on 10.03.17 at 12:46 pm

#11 Toronto Best City in World on 10.02.17 at 6:42 pm
Toronto real estate will never fall….Toronto is the best city in the world, and over 400,000 newcomers from overseas and within Canada want to make Toronto their refuge of heaven.

Toronto is #1 for restaurants, fine dining, safety, women,dating and career advancement.
______________________

And you…have the best sense of humor.

#147 paulo on 10.03.17 at 12:59 pm

#138 Frances:

Easy call on this one. with the Southern Ontario real estate market in the early stages of a long and painful value correction/rationalization why would you even consider purchasing a asset assuming its a box in the sky that will almost certainly loose value in the current market?. keep saving,you will never see the chance that you have to build wealth again. in a couple of years
consider buying but not before. make sure you send your landlord a nice Christmas card, you are richer than you think.

#148 James on 10.03.17 at 1:00 pm

#78 Smoking Man on 10.02.17 at 10:31 pm
What pisses me of about mass shooters msm always publishes theit teal names. Pisses me off.
Insporing the next great ratings story.
They add fuel to the fire of losers that never fiured out how to trade forex in tax ftee islands.
_______________________________________
Still drinking heavy there eh Smokie?
Wow what a waste of human life you are.

#149 gains on 10.03.17 at 1:01 pm

#142 40 something family man on 10.03.17 at 12:20 pm

#81 Rental Proerty Math

So you made $17k in rental income, netting 29%!!!!! Congrats!!!

My portfolio did not fair as well as you, up only 5% so far this year.. netting me only $75k in gains :(

===

$75K paper gain or crystallized? On how much investment?

#150 Mike in YYC on 10.03.17 at 1:02 pm

Hey Garth,

Can you provide your take on the City of Truck Nuts?

As much as hearing about the center of the universe and the City of Gregor is interesting, what do you think is in store for us rednecks that haven’t had the same run-up in prices – are we closer to the floor in the event of a correction?

#151 IHCTD9 on 10.03.17 at 1:05 pm

#142 40 something family man on 10.03.17 at 12:20 pm
#81 Rental Proerty Math

So you made $17k in rental income, netting 29%!!!!! Congrats!!!

My portfolio did not fair as well as you, up only 5% so far this year.. netting me only $75k in gains :(
_________

HeHeHe, I was going to post something similar but resisted :).

…and no phone calls to the plumber either I bet!

#152 IHCTD9 on 10.03.17 at 1:14 pm

#138 Frances on 10.03.17 at 11:48 am
_______________________________

Hit that million quick, move out of the GTA, get a job that pays whatever, buy a nice house for 250K. Power your paycheque and a good chunk of your proceeds from the mil into the mortgage. Nuke it by 55 with now 1.7-1.8 mil in the bank.

You’ll think a lot differently at 45, keep your options open by socking cash away and not buying a 1/2 mil cement sky box in the worst city in Canada.

Take up fishing and hiking, buy a Grizzly 700, you’ve got it made in the shade; work on staying healthy.

#153 Ian on 10.03.17 at 1:21 pm

Well, let’s look at Scotiabank as an example…here are their audited 2016 numbers in billions:

Residential mortgages 218.6
Personal and credit cards 96.8
Business and government 161.4

For a total loan book of 476.8. And what loss provision are they using on all this crap? 4.6, or just under 1%. 1%!

Their equity is only 55.3 bln. So it would only take a 11.6% haircut in their loan book to wipe out their equity, and that’s assuming the best case scenario that their deposits stay constant.

You are right that the finance department clarified that deposits are not on the table to be converted to common. But Preferreds certainly are. Preferreds amount to 3.6 bln at the end of 2016. That junk goes on the table first thing in a buy-in arrangement.

Remember how this works: they mark loss provisions at next to nothing as it doesn’t need to be higher in a normal environment. Get a nice accelerating loan default scenario happening, and guess what: those loss provisions will look like a joke.

BNS will not fail. Preferreds cannot be converted into common stock under a bail-in provision. You are blowing smoke. — Garth

#154 Howard on 10.03.17 at 1:26 pm

#138 Frances on 10.03.17 at 11:48 am
Hi Mattl, I am a 34-year-old middle class renter, renting a condo in the GTA for $1,600/month. I make 100k/year and am able to save $2,500/month, plus bonus. I have grown my balanced portfolio to 300K (Full disclosure, I have had advantages in life that allowed me to graduate debt-free and live with my parents for a few years and save). Even though I can afford to buy my condo with a healthy down-payment, I have run the numbers and I believe it is more cost effective for me to continue renting and saving each month, and allow my investments to grow. By my math, I should have a balanced portfolio of $1,000,000 by the time I am 45 (assuming a 5% ROI, but you never know how the markets will perform). But who knows, maybe if I bought my condo now it would be worth $1,000,000 in ten years anyway…..

That said, my situation is not perfect. I would love to have a home to call my own, and it can be stressful thinking about long-term rental prospects. Rent could increase in the GTA to 2k/month, and I may not be able to save as much. Or maybe I’ll be forced to live in someone’s basement because there just isn’t a lot of rental inventory in Toronto. Still, I get anxious when I look at the TD mortgage calculator and think about signing my life away for the next 30 years just to buy my place. There are pros and cons to both renting and owning I suppose.

If anyone would like to give me advice, I will gladly listen! :)

—————————-

You are further ahead at 34 than I am at 37, so I’m far from the best person to give advice.

However from your post, it does sound like you’re itching to buy when the time is right, and you seem to want to buy a condo. Garth’s advice repeated numerous times is that if you insist on buying, buy something with dirt (i.e. single detached). Leave the condos to the mindless masses.

#155 Ian on 10.03.17 at 1:27 pm

#144 nitro

I think it is already happening. The USD has been under pressure all year. They have 4 trillion on their balance sheet that has to come off. They have tried to reflate three times. The stock market bubble has covered all the nonsense that will quickly come into the headlines on the way down, like auto and student debt.

The only surprise is why the market keeps giving them a pass when it’s clearly such a house of cards. It’s going to end soon though.

#156 IHCTD9 on 10.03.17 at 1:29 pm

#140 kayaker23 on 10.03.17 at 12:07 pm
Stress test!! I remember my wife and I doing our own stress test before we bought our 1st and only home back in 2001. I honestly can’t remember the going rate (though I believe it was 5.8%) I used back then the 5 year fixed average which was a crazy 11% which was based over 30 years. We based our home purchased on 11%, and could we still swing the mortgage if “A” one of lost their jobs for 8-12 months without any reliable income source and could we handle all the expenses as well without living like hermits . We passed the test but it wasn’t something we would want to deal with for any extended period of time.

Today, mortgage free and very happy on the decisions we made.

Never leave your financial well being in the hands of others – especially the banks –

Food and shelter – keep it simply! Life will shine on you if you do.
___________________________________________

Good advice, we did the same except differently. We simply took our max approval number and cut it in half – this was the most we would pay. We ended up buying for 25K less than half of our approval back in 2001 at 6.4%.

Paying off that sucker was easy, took 14 years with no real special effort. The last term our mortgage payment was only 1/18th of our gross monthly income, less than half the cost of renting a 2 bedroom apt locally. We’re not rich at all.

The lesson is don’t enslave yourselves to the bank for two+ decades with a huge mortgage. If you can’t afford it don’t buy, or move.

Simple as that.

#157 AGuyInVancouver on 10.03.17 at 1:55 pm

Looks like anyone calling a marketwide slowdown in Vancouver is dreaming:
“The benchmark price for condos sold in September reached $635,800, up 21.7 per cent from the same month last year, the Real Estate Board of Greater Vancouver said Tuesday. The benchmark price is an industry representation of the typical home sold in an area.”
https://beta.theglobeandmail.com/real-estate/vancouver/brisk-condo-sales-fuel-greater-vancouver-housing-market/article36468536/

#158 Mattl on 10.03.17 at 1:58 pm

138 Frances – well I won’t be giving you advice, you seem to be on a great path. I may be coming to you for advice. And you are the outlier, I suspect most folks your age would be spending a large portion of the 2500 you are saving. And I wouldn’t think buying your condo TODAY would be a good idea.

But my point was and is, hardly anyone that was renting the past decade is better off. Savers even more so, they typically pay off houses fast which is the key to home ownership IMO. Not sure how long you’ve been in the apartment but if you bought it 5 years ago you would be 15 years closer to owning it, would still have 300k invested and would have a few hundred k in additional equity. That math may change tomorrow but its true today that RE has been a winner for most Canadians.

#159 mark wolovetz on 10.03.17 at 1:59 pm

As usual you cherry pick the worst markets with worst gains, what about williams lake b.c.
What about Dawson Creek B.C. for house declines, i would say they are static at the very least and no………..big house decline.
How about a link for determining ALL prices in all markets and let the masses decide!

#160 Reality 1 on 10.03.17 at 2:08 pm

to # 153 Ian and Garth Turner

Garth, I think it prudent to review the NVCC clause on all the Cdn bank preferred share prospectuses.

I am not sure that your response to Ian at comment # 153 is clear / correct.

It would be worthy of a comment / column I would think given all the bank worship that occurs on your blog.

#161 Victor V on 10.03.17 at 2:08 pm

BREAKING: OSFI not waiting for housing, debt risks to ‘crystallize’

http://www.bnn.ca/osfi-not-waiting-for-housing-debt-risks-to-crystallize-1.874298

Canada’s top banking regulator said on Tuesday that his organization was taking pre-emptive action to reduce the risks arising from high household debt across the country and frothy housing markets.

The Office of the Superintendent of Financial Institutions (OSFI) proposed in July that it introduce a stress test for all uninsured mortgages and ban “bundled” mortgages, where federally regulated lenders team up with unregulated rivals to bypass rules on lending limits.

“We clearly see the potential risks caused by high household indebtedness across Canada, and by high real estate prices in some markets. We are not waiting to see those risks crystallize in rising arrears and defaults before we act,” Superintendent Jeremy Rudin said in a speech.

#162 Victor V on 10.03.17 at 2:14 pm

Banking watchdog sees risks in Canada’s high debt and home prices — and is doing something about it: OSFI has proposed stress tests for all uninsured mortgages and banning ‘bundled’ mortgages

http://business.financialpost.com/news/economy/update-1-canada-watchdog-says-taking-action-to-stop-housing-risks-materializing

#163 Stone on 10.03.17 at 2:23 pm

#128 Mattl on 10.03.17 at 10:37 am
#113 – Stone you keep raving about your balanced portfolio, and how great renting is, but you gave away in an earlier post that you sold a house at peak prices last year. That seems to be the typical renter around here, they made a bucket of cash on real estate and are now trying to convince everyone that renting is the ticket. Well ya, if you made 200K-1MM, and don’t need a large place (single, retired, no family) that changes the math pretty significantly.

Would love to hear from a middle / upper class renter that has been renting in YVR or the GTA the past 15 years at market rates. There is no way the math works that that renter is in a better position then the person that bought a home at market rates the past decade.

Sure, the guy that lived in a closet, or at home, and ate KD may be on par with the guy that bought more then he could afford and had to jack a house to do a foundation. But the large majority of homeowners – yourself included – made out like bandits on RE. Guys with family’s that need stable SFH’s, maybe a backyard for a dog.

So it’s a little disingenuous to come here and brag about your balanced portfolio that was injected with a big amount of RE cash.

—-

Profit from house was $36,000. That’s it. The rest was forced savings. Sold 1 house when prices were still low. Bought 2nd house (mansion) with sale of 1st home and proceeds from stock market. Decided to sell before everything everything went South. Sold the McMansion at cost. No regrets there. So no, my money was made on the stock market, not real estate. Owning a house was a big mistake which I’ll never do again.

I knew when to walk away. Hope you do too. LOL.

#164 Reality 1 on 10.03.17 at 2:24 pm

to # 135 MF

You are making an awfully big assumption to think entering the RE market at this point will turn your small down payment into a larger sum.

Do you really believe that RE price appreciation is infinite or in some way guaranteed ?

Because that is what you are implying.

Simple mathematics and a grasp of reality would argue against this course of action at this time for someone with limited resources.

And just to be clear, I have a real interest in RE prices rising / holding value as I currently own developable residential lands.

#165 Stone on 10.03.17 at 2:25 pm

#129 GTA RE on 10.03.17 at 11:06 am
#128 Mattl

+++1. Great comment. I agree 100% with you. Stone and HHCE will be regretting their RE mistakes.

—-

Not a chance. Only time will tell. LOL

#166 Victor V on 10.03.17 at 2:28 pm

B20 enforcement will be in place in December/January based on OSFI’s latest guidance.

https://beta.theglobeandmail.com/report-on-business/economy/head-of-osfi-sees-potential-risks-in-high-home-prices-debt-loads/article36469549/

I told ya. — Garth

#167 Stone on 10.03.17 at 2:31 pm

#138 Frances on 10.03.17 at 11:48 am
Hi Mattl, I am a 34-year-old middle class renter, renting a condo in the GTA for $1,600/month. I make 100k/year and am able to save $2,500/month, plus bonus. I have grown my balanced portfolio to 300K (Full disclosure, I have had advantages in life that allowed me to graduate debt-free and live with my parents for a few years and save). Even though I can afford to buy my condo with a healthy down-payment, I have run the numbers and I believe it is more cost effective for me to continue renting and saving each month, and allow my investments to grow. By my math, I should have a balanced portfolio of $1,000,000 by the time I am 45 (assuming a 5% ROI, but you never know how the markets will perform). But who knows, maybe if I bought my condo now it would be worth $1,000,000 in ten years anyway…..

That said, my situation is not perfect. I would love to have a home to call my own, and it can be stressful thinking about long-term rental prospects. Rent could increase in the GTA to 2k/month, and I may not be able to save as much. Or maybe I’ll be forced to live in someone’s basement because there just isn’t a lot of rental inventory in Toronto. Still, I get anxious when I look at the TD mortgage calculator and think about signing my life away for the next 30 years just to buy my place. There are pros and cons to both renting and owning I suppose.

If anyone would like to give me advice, I will gladly listen! :)

——

Don’t worry. Your plan sounds very doable. Yes, you may have to move a few times but in the grand scheme of things, you’ll still be adaptable, flexible, mobile and liquid. Take it from me. Real estate profit over 15 years $36,000. Just keep doing what you’re doing.

#168 Smoking Man on 10.03.17 at 2:35 pm

Wow, Niagara rent’s and prices coming down HARD.
New subdivisions bought mostly by speckers. Now in a dog fight to get a renter or a sucker.

It’s getting ugly down there.

#169 Ian on 10.03.17 at 2:37 pm

#161 Victor

I just love this headline “OSFI not waiting for housing, debt risks to ‘crystallize’”

So I guess waiting until 21 years into a bull market is ‘not waiting’ – so amusing!

Sounds like a clear signal from Mr Rudin: Happy Stress Test is on!! They never make announcements like this without a reason.

#170 Reality 1 on 10.03.17 at 2:39 pm

to # 116 Dharma Bum

So true.

Funny thing is that most posters here don’t even get the relevance of your “handle” of Dharma Bum.

to # 121 Howard

I don’t live in Canada either – gives one a much better life and perspective.

That’s why I don’t post here much anymore – Canadians by and large have no idea of what life can be – they live in their ” Tim Horton / pick up truck and SUV / my kid plays hockey / Canada is the best” little bubble and think their livin’ it up.

To each their own I guess – I just don’t get it.
To me its pretty empty and shallow, but hey, so are most people when you really get down to it – Canadians just excel at ignorance it would seem.

#171 Reality 1 on 10.03.17 at 2:47 pm

to # 130 GTA RE

What a life, eh ?

You’ve got the little world you live in by the balls, don’t ya ?

You need to get out of Canada to see what a parochial little life you lead and stop embarrassing yourself on this blog.

And before you attack me, realize that I probably own more RE in Canada than you will in a lifetime. To me, it’s just another asset to be sold in yet another shithole country.

The fact that you drink that ” Tim’s” swill tells me all I need to know about how great your life really is.

Hahahahahahahahahahahahahahahahahahaha !

#172 n1tro on 10.03.17 at 2:49 pm

#155 Ian on 10.03.17 at 1:27 pm
#144 nitro

The only surprise is why the market keeps giving them a pass when it’s clearly such a house of cards. It’s going to end soon though.
————————————-
Ignorance is bliss they say. No reason I want to be holding USD or any other currency given the state of things but everything I want to buy is in 1 currency or another. So if currencies get inflated away, I will trade in some of my rocks and pay of my debts (which are small but I keep them around for such an occasion). If not, I’m diversified and will try to make as much “paper” as I can to trade it in for “stuff”.

#173 Stan Brooks on 10.03.17 at 2:57 pm

Crap. There will be no bank failures and, if there were, no preferreds (or deposits) would be converted. — Garth

—————

Of course there will be no bank failures.

It is still interesting to know hot much of the external financing for the banks that ended up as loaned mortgages is in international currencies/non CAD.

If USD rates keep going up forcing CAD with it (so we can keep with external debt payments) we might see some interesting situation with both rates going up and BOC doing some sort of QE, something that has not been done before OR ELSE.

I don’t really want even to imagine or speculate what ELSE is but it could be somehow ugly.

It is true though that Canadian banks have good capital
reserves but no mandated deposit reserves (hoping on good old BOC to save them in case of liquidity problems).

If external debt is largely not nominated in CAD it could become interesting (for people with USD deposits).

IMHO OSFI should require deposit reserves for banks to be increased as in US, where the FED requires 10 % of deposit reserves.

Saying that a bank with 1 % reserves (as in the case of BNS) is in better shape than one with 10 % reserves is wishful thinking.

#174 Stan Brooks on 10.03.17 at 3:08 pm

Found it.

As I expected, not very good:

http://www5.statcan.gc.ca/cansim/a26?lang=eng&id=3760148&p2=33

Look at debt in foreign currencies, it grows by 125 billion USD per year.

If the FED decides to squeeze the debtors by further increasing rates, we need to follow suit, so CAD interest rates is going up.

That can bring us to the funny situation in which we have rising rates and QE at the same time.

Let’s see how the magicians at BOC will pull this off.

Luckily for us, the chance of the USD rates going further up measurable is not high.

But hey, who knows….

#175 ban “bundled” mortgages on 10.03.17 at 3:12 pm

ban “bundled” mortgages will have far more impact in my opinion than stress test alone. In my opinion stress test by itself won’t have much impact because people can just borrow more (bank of mom, unregulated lenders etc) to increase down payment until they can pass stress test.
We went to get loan from Scotiabank back in 2014 and we couldn’t get the loan amount for house we wanted to buy due to stress test. Friends suggested us to shop around where stress test is not happening but we decided not to buy until my wife also got a job and we could afford higher mortgage. So we stress tested ourselves as well you can say.

I don’t know how are they going to enforce loan bundling but together with stress test this is going to take away a lot of buyers from the market and you know what happens then.

Garth : You have written a lot about stress test, may be one post for “bundled” mortgages?

#176 bdwy sktrn on 10.03.17 at 3:26 pm

#152 IHCTD9 on 10.03.17 at 1:14 pm
…. buy a Grizzly 700, you’ve got it made in the shade; work on staying healthy.

——————–
i was hoping you wouldn’t mention beloved toys today.

my ‘grizzly 700’ was a xr650l. mountains and city. ultra-useful and too much fun. (also free instant parking downtown)
some low-life renter took it off the street last night. (they left a ducati sitting next to it)
my baby is gone :(
damn renters!

#177 jess on 10.03.17 at 3:28 pm

“tax recovery device”?

The scheme

This is the kind of aggressive tax planning laid bare in the recent First-tier Tribunal (FTT) case of BNP Paribas SA (London branch) v Commissioners of HMRC.

The case involved a complex series of financial transactions within the BNP group, followed by a sale of dividend rights (a ‘dividend strip’) for £150 million to an unrelated counter-party in the Alliance and Leicester (AL) group.

The effect was in substance a loan from AL to BNP: a fixed annual dividend akin to interest, with a final dividend of £150 million equivalent to the repayment of the loan.

The sale of dividend rights took place in mid-December 2005. The London branch of BNP first bought the rights from BNP’s Luxembourg subsidiary for around £149 million, and a day later sold them on to AL for £150 million.”

JudithKnott @

https://www.accountingweb.co.uk/tax/hmrc-policy/tax-avoidance-laid-bare-the-bnp-paribas-case

#178 Ian on 10.03.17 at 3:30 pm

#160 Reality 1

The only thing the government has excluded is deposits, and only when they were asked for clarification. Nothing else is exempt. Bonds and preferreds are on the table as I read it.

#179 Ian on 10.03.17 at 3:38 pm

#166 Victor

Oh man I’m kind of disappointed with this. Just hit the wires in the last hour and thanks for posting. No Happy Stress Test until December / January? What have they been doing since July? Playing golf with the Plozzer? What more needs to be clarified?

Have to wonder if The Snowboarder and Tax Fairness are leaning on them hard to delay, and then maybe cancel. Seems unlikely, but still makes me worried. Why so much delay?

#180 jess on 10.03.17 at 3:40 pm

coded emails discussing golf
insider trading

https://www.sec.gov/news/pressrelease/2015-90.html

like: like terms
http://economia.icaew.com/en/news/september-2017/father-of-insidertrading-banker-barred

#181 Millennial_86 on 10.03.17 at 3:49 pm

Just got my first ever taste of divies yesterday.

Me like.

#182 Stan Brooks on 10.03.17 at 3:57 pm

I have that internal warm fuzzy feeling (as after a shot of Irish Whiskey – Tullamore Dew for example) that when next potential liquidity crises strikes we could see internationally QE, but this time with Central Banks not buying bonds but equities.

So don’t sell your stocks.
It simply works just look at Japan and Switzerland.

But having both rates rising and BOC buying both bonds AND stocks…
Oh Boy,

Does Steve Poloz have the guts for that?
He might be retiring soon due to personal/health reasons. Probability above 80 % IMHO.

Or he could just stay and experience the adrenaline rush.

Time will tell, time will tell.

I will support his spirited efforts with another 40 % shot.

#183 Happy Housing Crash Everyone! on 10.03.17 at 4:05 pm

Victor V on 10.03.17 at 2:08 pm
BREAKING: OSFI not waiting for housing, debt risks to ‘crystallize’

http://www.bnn.ca/osfi-not-waiting-for-housing-debt-risks-to-crystallize-1.874298

Canada’s top banking regulator said on Tuesday that his organization was taking pre-emptive action to reduce the risks arising from high household debt across the country and frothy housing markets.

The Office of the Superintendent of Financial Institutions (OSFI) proposed in July that it introduce a stress test for all uninsured mortgages and ban “bundled” mortgages, where federally regulated lenders team up with unregulated rivals to bypass rules on lending limits.

“We clearly see the potential risks caused by high household indebtedness across Canada, and by high real estate prices in some markets. We are not waiting to see those risks crystallize in rising arrears and defaults before we act,” Superintendent Jeremy Rudin said in a speech.
—————————————————————-

HAPPY H A P P Y HOUSING CRASH EVERYONE!!! :-)

Hopefully it will come in time for X-mas. Would be great to see a lump of coal in SHYSTERS stockings. :-)

#184 Dharma Bum on 10.03.17 at 4:07 pm

Received my first “DELETED” from Garth today.

Not sure why, but it was somewhat unsettling while also curiously arousing!

#185 Happy Housing Crash Everyone! on 10.03.17 at 4:09 pm

# 175 ban “bundled” mortgages on 10.03.17 at 3:12 pm
ban “bundled” mortgages will have far more impact in my opinion than stress test alone
—————————————————————

I’m on it. Going to email OSFI , T2 and the Finance Minsiter. I hope others follow and email as well. I get replies back in one or two months time. It’s nice to complain on this blog but without action there can not be results.

#186 jess on 10.03.17 at 4:14 pm

the use of self-employed contracts …lost cost revolution rlly?3rd party contracts

…”Another pilot showed the Guardian a document in which the agency he worked for told him sign a disclaimer to say he was not an employee of the company but of his own Irish limited company.”

last year German authorities raided Ryanair offices at six German bases over concerns of tax evasion and withholding of social security contributions

pilots as independent contractors through Brookfield Aviation and McGinley Aviation as third parties.
the Ryanair model does not meet the criteria of independent entrepreneurship and authorities assume that the self-employed pilots are de facto employees of Ryanair, resulting in an obligation to pay taxes and social security contributions by Ryanair
Source only in German: http://www.zeit.de/wirtschaft/unternehm … mittlungen

https://www.theguardian.com/business/2017/oct/03/ryanair-pilots-hmrc-investigation-airlines-uk

#187 Dharma Bum on 10.03.17 at 4:19 pm

#170 Reality 1

“Funny thing is that most posters here don’t even get the relevance of your “handle” of Dharma Bum.”
—————————————————————–

One of the great pleasures of reading this blog, and especially the comments, is the subtle humour and wit that both Garth and many of the blog dogs are capable of imparting.

It’s almost like a hidden language among those that recognize it. A kind of “code” that can be shared and enjoyed.

What’s even better, as you astutely allude to, is that most comment posters are completely oblivious, and just don’t get it.

Ahhhhh…..the ignorance is astounding and ubiquitous.

Smoking man KNOWS of what I speak.

#188 Smartalox on 10.03.17 at 4:20 pm

REBGV Stats are out for September – as evidenced by the glowing press releases in the mainstream media.

Stats for Year to Date sales declines have moderated slightly over last month, but median process, sales, listings and sales to listings for detached are all falling.

West Van YTD detached sales down 45%,
Van West YTD detached sales down 40%
Port Moody YTD detached sales down 38%
Coquitlam YTD detached sales down 35%
Burnaby YTD detached sales down 32%
Richmond YTD detached sales down 29%

Houses in these areas are not selling, compared to last year. Median prices in these areas are falling, compared to last year.

Real Estate doesn’t always go up. In these cases, it’s going down.

Sure, different sectors of the market move in different ways, but comparing one property (or a handful of properties) to the broader market is like comparing one stock, or a handful, to the NASDAQ or the Dow Jones industrial average.

#189 Adrian on 10.03.17 at 4:37 pm

This doesn’t sound right, a 525K property bringing in $2600 a month? Where are you located? Maybe Toronto is completely out of whack, but here a $525K property you’d be lucky to get $1800/mnth for, and for $2500 you’re renting a 1.3+M property.

——————————–

Hmm lets see.. paid $275 in 2013.
Brings in $2600 /m in rent.
I don’t pay any utilities
Property tax 3500
Maintenance approx 2500 yearly
Insurance $1000
Mortgage interest this year $6600
Net: $17600
Down payment: $60,000
This year’s net percentage: 29.33%

Place would probably sell for 525K today.

And what did your balanced portfolio do?

#190 MF on 10.03.17 at 5:00 pm

#171 Reality 1 on 10.03.17 at 2:47 pm

And what utopia do you live in?

Please enlighten us??

Must be perfect.

MF

#191 Renter's Revenge! on 10.03.17 at 5:11 pm

#184 Dharma Bum on 10.03.17 at 4:07 pm
Received my first “DELETED” from Garth today.

Not sure why, but it was somewhat unsettling while also curiously arousing!

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

What did you say to get deleted?

Are you looking to get deleted? — Garth

#192 Frances on 10.03.17 at 5:27 pm

Thank you everyone for your helpful advice! You have inspired me to keep going and save as much as possible. Maybe I will purchase a single family home in 10 years, you never know, but at least building wealth will help me keep my options open. To answer Howard’s question about the condo, I actually love condo living, I enjoy the amenities, and condos are within my price-range in a way that single family homes in the GTA currently are not (at least, not the ones I would want to live in). But, I hear you on the bad investment part. They are affordable to purchase, not so easy to get rid of…

Thanks again everyone, you’ve put things in perspective for me and reminded me that I have a lot to be thankful for this Thanksgiving :)

#193 Lost...but not leased on 10.03.17 at 6:00 pm

Any predictions re: how many dogs in the next post photo?

#194 Entrepreneur on 10.03.17 at 6:01 pm

#104 Ronaldo…the NDP Finance Minister David Eby has the RCMP dealing with the fraud side and money laundering as of right now. And now the OSFI rules coming in sooner than expected. The decline is happening even with the dead cat pounce.

The news does not go into these issues which is to me is like “fake news,” too controlled and not controversial almost like a sleepy style.

What is more important the system or the people in a nation? With all the warnings from mother earth I would say the people of a nation.

And when Jagmeet Singh won the NDP leadership I wondered about his turban but after listening to him on some youtube videos I find him alright so far. But, he has two years to prove himself as a leader. And I hope he can.

#195 Lost...but not leased on 10.03.17 at 6:05 pm

Re: West Van market

Historically….the area has been the domain of “Get Rich Quick” crowd…ie those one hit wonders in the stock market etc.

This RE market could be the one to watch re: spekkers….

#196 Mattl on 10.03.17 at 6:17 pm

Stone you were in the RE market in Canada for 15 years, up to last year, and only made 36K on the sale of two houses? Where the heck are you living, and if houses have performed so poorly. And 15 years should be enough to pay off a house for a guy that saved enough to have a fat ass liquid portfolio.

I’ll give you that rents must be insanely cheap in an area that hasn’t seen RE appreciation in 15 years. Where again do you live?

#197 Reality 1 on 10.04.17 at 7:09 am

to # 190 MF

Dumb comment that just illustrates your ignorance more than your vapid postings on this blog ever could.

NO WHERE IS UTOPIA ON THIS EARTH !!!

Some places are just richer contexts in which to pass your existence than others. I don’t find that Canada does that for me – maybe for others, but with my life experiences, just doesn’t work for me (and never did).

Live simple, eschew consumerism, think for yourself and seek out a place that lets you do that.

True story of how I started to find my own utopia:

When I was 24, I lived in Canada and desperately wanted a Ferrari – had CAD $16,000 to my name.

When I was 26, I had been living abroad and through good luck and hard work, I could afford (a used ) one. Went, all excited to see the private seller (estate sale) but just could not make myself write that check. (The guy selling it had a Corvette and thought the Ferrari was a piece of shit in comparison – LOL)

That’s when I GREW UP and realized it wasn’t about the Ferrari – it never was.

It was my insecurities that made me want what society told me was a milestone marker on society’s path of success.

I realized that it was an ego ‘prop’ on society’s ‘stage’ of success. My inner self kicked in and I knew I had made a personal discovery about myself.

Be introspective – ask yourself what REALLY makes you happy , not society’s version of happiness.

If you are mature enough to look in that mirror, do so and it all becomes crystal clear.

Sincerely, best of luck on your path in this life.

#198 paracho on 10.04.17 at 10:31 am

@#197..Reality1…This is a great topic..well said !
It is usually not about ourselves, but what is slowly sold to us via tv, media, society..etc..milestones of success as defined by someone else ! Too many sheeple out there .

On the other hand …even the main stream media is not holding back now..they can not hide it anymore .
I just wonder if they are spinning it to make it look better than it is .
http://toronto.ctvnews.ca/gta-sees-35-per-cent-drop-in-home-sales-from-year-ago-1.3618324