The apologist

On a day when Venezuela decided to shaft bondholders and global commodities choked, the Bank of Commerce announced next year will be Party Time for real estate in Toronto and Vancouver.

Huh? Has the bank officially embraced weed, nine months early? After housing’s excess and remorse in 2017, with big new issues looming next year, how can CIBC make such a bold declaration like this?:

“When the fog clears,  it will become evident that the long-term trajectory of the market will show even tighter conditions. The supply issues facing… Toronto and Vancouver will worsen and demand is routinely understated. Short of significant change in housing policies and preferences, there is nothing in the pipeline to alleviate the pressure.”

This is the work of Benny Tal, the bank’s long-time real estate-friendly econo guy who is telling everyone who sold at the height of the frenzy last Spring (so they could buy in again for less during the Funk of ’18) that they’re fools. It stands in stark contrast to the opinion of real estate finance guys like RateSpy founder and veteran mortgage broker Rob McLister. Even without the peril of rising interest rates, McLister concluded this will be the result of the new universal stress test, now six weeks away:

“Slashed Buying Power — The majority of homebuyers put down 20% or more. The bulk of those are uninsured mortgage customers. OSFI’s stress test would slash buying power for prime buyers by roughly 18%—assuming they chose a bank mortgage and 25-year amortization. For non-prime borrowers, qualifying rates would immediately rocket into the 6% to 7% range—unheard of territory for most young buyers.

“Home Price Haircut — Equity is the #1 safety net keeping bank mortgage books safe. Less buying power means less demand at the same price. OSFI’s much tighter credit policies could conspire with other factors (e.g., rate hikes and debt loads) to kill a portion of demand and jeopardize equity for 70% of the Canadians who own. That soft landing we all hope for could harden up, tout suite.”

So why does CIBC’s guy discount the impact of reduced credit and the chaos that will cause in real estate? Can we tell who’s zooming us? Both views cannot be correct.

Tal’s logic is simple. Demand will outstrip supply, rising rates or the 2%  test notwithstanding. There’s a restricted supply of land in the GTA and YVR, stunned politicians (he didn’t use that exact term), plus a steady stream of new buyers, thanks to migration and immigration. While the B20 bomber stress test will reduce demand by up to 15%, the bank says buyers will find their way around it by going for longer-term mortgages (30 years+) and borrowing from subprime lenders or credit unions who aren’t subject to the new regs. This will be “troubling” he adds, since that part of the market’s essentially unregulated.

But, hormones being what they are, buyers will keep buying whether it’s wise or not. Tal also points to the pent-up demand coming from hordes of blinky Millennials between 20 and 35 who are still living in their parents’ basements (between 35% and 40% of the entire cohort) and will eventually leave the nest some time before they retire.

Yes, says, Tal, condos are likely in the soup thanks to overbuilding and the fact nobody can buy one and lease it out for positive cash flow (forget what Brad Lamb tells you). But for real estate as a whole: “The housing market is about to face its most significant test in a decade as the combination of higher interest rates and regulatory changes will work to reduce purchasing power. The impact will be noticeable but probably short-lived – mainly in the GTA and Vancouver where supply issues will continue to dominate long-term housing trajectories. At this point we do not see any real relief. In fact, the opposite is the case.”

Hmm. It could just be bank talk as the big lenders try to mitigate the damage B20 will have. Especially CIBC, with a fat property exposure. It wouldn’t be the first time we’ve been led around by the nose when it comes to housing – the Ponzi of our time. But what if Benny’s an oracle? What to do?

First, heed the word on condos. The 20%-plus price romp in the Lower Mainland and the GTA in high-rise units is irrational, the result of a torrent of newbie money diverted away from unaffordable detached homes. But evidence is everywhere the market’s being overbuilt, is still heavily influenced by speculation, and will be hurt next year in the heady combo of rent controls, B20 and rising rates. Right now the greatest degree of real estate risk likely sits at the bottom of the market.

Beyond that, CIBC’s  perma-bull Tal could be blowing smoke. After all, it was cheap rates and free-flowing credit which created house prices most people no longer can afford. Why wouldn’t rising rates and falling credit bring them down? How could mortgage brokers be so wrong about the impact on their clients? How can real estate values be sustained when the qualifying rate for a home loan goes from 2.5% in April to 5% eight months later? As more and more net worth flows into housing, yet incomes are stagnant and household debt bloats, do we not inch closer to HouseAgeddon? Do you really want to be there when things unwind?

Sheesh. Maybe I’ve just seen too much. Nortel, gold fever, dot-coms, silver hoarding, 19% GICs, plunges, bubbles, panics – and now weed, Bitcoin and $2 million bungalows. Every crisis eventually healed. Even boom became a bust. And every apologist for excess turned out to be wrong.

Is it different this time? Ask a unicorn.

165 comments ↓

#1 Hamilton on 11.14.17 at 4:46 pm

Sent today from a relator in Hamilton:

For a couple months I have been largely quiet, trying to gauge​ whether or not I was correct on the factors that were affecting the resale market.  Today I can finally tell you some professionals from CMHC are backing the same principles I was basing these factors on.  I have attached the document from the recent 2018 Market Forecast conference – this data comes directly from a CMHC representative for the Golden Horseshoe area.  As some of you may know, one of the main fundamentals I had been citing in early 2017 was that the demographics did not support a crash…. nor did the employment numbers.  Today I can get very detailed and summarize the document that I have attached.

​S​ome factors to consider:

The 1990 Real Estate crash has some specific factors that lead to the downturn that we are not seeing in this current market:
– Toronto population was DECREASING
– jobs were being lost, economic conditions were not good over-all
– mortgage rates were much higher than today (interest rates peaked in 1990 at 12.25%, referenced from the Bank of Canada)

TODAY:  We have strong economic conditions, jobs are being created, the Toronto/GTA population is set to reach 9.6 million in 2041 from the 6.7 million 2016 (referenced from the Government of Ontario population projections) and mortgage rates remain low compared to the 12.25% of the 1990s.

DOCUMENT SUMMARY
The representative from CMHC who did all the attached research had no doubt that the new rules implemented by the Provincial Government of Ontario in May 2017 pushed a number of buyers to the sidelines.  One can’t blame them, it was already nearly impossible for some buyers to compete in multiple offers.  There are also new rules coming from the Federal Government which will be implemented on January 1st 2018.  The Jan1 rules are the wild-card that make certain factors unpredictable.

CMHC is expecting a slight up-tick in sales during November and December (fuelled by any buyers who want to get in before the new Jan1 mortgage rules are implemented) then a slow-down until the spring market.

Affordability:  affordability is still the main factor that will continue to send buyers from GTA to Hamilton, Niagara, & Brantford.  The income required to own the average home in Hamilton is less than GTA, just as the income required for Brantford & Niagara Region is less than Hamilton.

Demographics & Income:  in GTA, only 19% of households have the required income to cary a mortgage on the average home having 5% downpayment with a 30 year amortization … that number increases to 25% in Hamilton, 27% in Niagara Region, and 36% in Brantford.  The number of 25-34 year olds living at home follows a similar trend:  29% in Toronto, 25% in Hamilton, 23% in Niagara Region, and 20% in Brantord.  This demographic is key to the number of future first-time buyers that will be out there.  As they move out, particularly those who end up moving out with a dual-income situation, they will continue to fuel a large portion of home sales.

Supply & Demand:  the surplus of listings in Q2 & Q3 for Hamilton & Burlington were investors (3:1 ratio, investors to home owners) … showing that just as potential buyers were sidelined due to speculation, investor sellers were also speculating that it was the time to get out.  Almost all investors that I was working with in the Spring that stayed on the side-lines have approached me in the last month for an update like this.  Finally I have the details.

Housing starts (new home builds):  Builders are expected to continue building at or above the five year average (and just slightly below the 2017 number) showing that builders still expect buyers to be present in 2018.  Builders spend large amounts on consultants and they are clearly showing confidence.

Condos:  condos are showing more demand than detached homes in the GTA & Hamilton due to affordability, and therefore should be considered a different and more stable market for the time being.

Detached or town homes:  builders are building more towns than detached homes to address two issues, urban sprawl and affordability

CONCLUSION

CMHC numbers show Hamilton-Burlington’s average home price at $550k in Q3 2017.  The prediction is that the 2018 average will be between $535k – $585k.  The representative at the conference was VERY confident in that prediction.   Should the current fundamental principles remain the same (population growth, economic growth, low mortgage rates) CMHC is predicted a balanced market in 2018.​

FULL DOCUMENT:  
 CMHC-Presentation-for-RAHB-2017.pdf
 

#2 The Technical Analyst, CSTA, CPD on 11.14.17 at 4:49 pm

I’ll put $50 on Garth’s very long term prediction about the realestate over the other two.

SELL and RENT till the Garth light goes green.

#3 Lost...but not leased on 11.14.17 at 4:52 pm

Pyhhrrzzit

#4 Victor V on 11.14.17 at 5:02 pm

CMHC targets shadow lenders as more people take out ‘riskier’ uninsured mortgages

http://business.financialpost.com/real-estate/mortgages/cmhc-targets-shadow-lenders-as-more-people-take-out-riskier-uninsured-mortgages

Canada’s housing agency is seeking more data on home loans from shadow lenders, amid concern rising levels of debt aren’t being adequately tracked and may increase the risk of financial instability.

Canada Mortgage & Housing Corp. will seek data from participants in the securitization program on their uninsured conventional mortgage lending, said Evan Siddall, chief executive officer at the Ottawa-based agency. CMHC needs to “know what risk we are exposed to,” so will use the reported information to decide if changes are needed to their rules, he said.

“We are concerned about increasing levels of riskier mortgage activity by non-federally-regulated financial institutions,” Siddall said in the text of a speech he gave in Montreal Tuesday. “We have a responsibility to isolate sound, solvent institutions from the contagion that can erupt when a lender fails.”

#5 FOUR FINGERS WATSON on 11.14.17 at 5:04 pm

I think Benny and CIBC got it right. The government will not do the 3 things necessary to pop the bubble . The government rhetoric is BS, just like the campaign promises. The govt. created, nurtured, and NEED the bubble to continue.

#6 3s on 11.14.17 at 5:06 pm

Meanwhile this is how it’s all working out for house horny Australia ;)

https://www.linkedin.com/pulse/australias-economy-house-cards-matt-barrie/

#7 AGuyInVancouver on 11.14.17 at 5:07 pm

…The 20%-plus price romp in the Lower Mainland and the GTA in high-rise units is irrational, the result of a torrent of newbie money diverted away from unaffordable detached homes…-Garth

So how come those detached homes are unaffordable to working Canadians? Surely it couldn’t be…Foreign Investors, could it!?

#8 Linda on 11.14.17 at 5:09 pm

Mr. Tai has a point, illustrated by stats in this blog. A few posts ago, the ‘swollen’ listings in GTA’s housing market still totaled less than 19,000 properties for sale. Yet some 5 million plus people live there. Even if you limit potential buyers to only 1% of the GTA population, that is still 50,000+ people for less than 19,000 properties. Now, prices have dropped since ‘peak’, DOM has increased & sales have dropped in volume. That having been said, most folks are still taking on way too much debt in order to buy, so hopefully the new rules will have the desired effect of moderating sale prices to align with the lower mortgage amounts potential buyers will qualify for.

#9 Dimitri on 11.14.17 at 5:10 pm

Toronto real estate is like Venezuela’s economic collapse? Don’t compare a low class city like Toronto with a vibrant socialist country populated by hot, affectionate and passionate Latina women from Italy, Spain, Germany and Catalonia.
Comparing that is a yuge insult. Toronto will never become like the social life of Venezuelan chicas unless those Venezuelan chicas migrate to Toronto en masse and rule Canada.
Toronto can keep their paranoid, stiff upper lipped, uptight chica population!

#10 TRUMP on 11.14.17 at 5:16 pm

Unicorn = an honest Finance Minister…

#11 FOUR FINGERS WATSON on 11.14.17 at 5:16 pm

The average Canadian family, earning the average household income, is priced out of the market forever unless they can come up with some outside money. For my generation the average home was say a detached 3 bedroom house with a basement and a white picket fence. The new average Canadian family home is a 2 bedroom condo containing 2 adults and 1.9 kids. We blew it for our kids and grand kids. We sold out. Welcome to the 21st. century.

#12 VanMan on 11.14.17 at 5:18 pm

I dont know… a part of me wants to believe in fundamentals and history, but recency bias is an extremely strong force. I just can’t see things changing regardless of B20. There are always loopholes. Plus, when you have an entire population that are obsessed (which includes foreign ownership) it seems like things will party on.

I understand Vancouver is not New York, is not London nor Hong Kong, but all those cities had to start somewhere. Plus, Vancouver doesn’t need to be those cities… looks like investors love Vancouver for what it is.

#13 Jimmy on 11.14.17 at 5:28 pm

Pink Fluffy Unicorns Dancing on Rainbows!

#14 I’m stupid on 11.14.17 at 5:32 pm

We’ve seen the bank of mom help kids with down payments. I wouldn’t be surprised if the bank of mom co-signs on the mortgage. That will get h

#15 I’m stupid on 11.14.17 at 5:32 pm

That will get the kids in ratio.

#16 SimplyPut7 on 11.14.17 at 5:34 pm

CIBC may want to do a thorough review of the borrowers they gave mortgages to in the past 2 years e.g. have an independent auditor check their income as per their tax filings with the CRA and review the income that is going into their bank accounts today.

When I went to the open house in my area in the GTA in March, the on-site CIBC mortgage advisor didn’t care where the down payment for the house for sale was coming from. They could help me get a 4-year variable mortgage at 2.89% if my down payment was big enough (the person assured me rates were not going up anytime soon). I got the hint, go to a non-bank lender, private lender or family member HELOC and get the downpayment from them.

They also said to make sure I would have a tenant in the basement apartment to increase the amount of money I would qualify for.

I wonder how many of the mortgages from just that one person are now underwater?

#17 Big Daddy on 11.14.17 at 5:42 pm

Mayor Moonbeam and his gaggle voted overwhelmingly to kill Air B&B in Vancouver for the condo specuvestor elite. No more renting a spec unit which is not a principal residence or part of….no more renting out lane houses. Those spekkers who have held on by the skin of their teeth by renting by the day to crack whores are soooooo screwed.

This is in addition to the empty house tax coming into effect with added taxes, fee’s and a whopping $10,000 per day fine for not registering an empty unit as such. Do I dare think that a lot of overseas holders might be hiring temps to rush around turning lights on and off to fool the inspectors?

The locals are screaming that they won’t be able to make the mortgage without the Air B&B income…..that mist be music in the ears of an active listing agent.

#18 Harvey on 11.14.17 at 5:47 pm

Tal is making a disguised plea for the government to do something. It is career suicide for him to openly state that the government should seriously limit foreign money pouring into real estate or that the immigration policy is just too aggressive for current infrastructure levels.

Some millennials I know are broke ass poor so I’m not sure what buying pressure Mr. Tal expects from this group? I actually overhead in summer a few millennials at work half-jokingly say that assisted suicide is their only route to home ownership aka. a casket home. They are a hard working and intelligent bunch so I felt sad that this is the housing world for them. Born too late into the game I guess?

#19 FOUR FINGERS WATSON on 11.14.17 at 5:59 pm

#12 VanMan on 11.14.17 at 5:18 pm
I dont know… a part of me wants to believe in fundamentals and history, but recency bias is an extremely strong force. I just can’t see things changing regardless of B20. There are always loopholes. Plus, when you have an entire population that are obsessed (which includes foreign ownership) it seems like things will party on.

I understand Vancouver is not New York, is not London nor Hong Kong, but all those cities had to start somewhere. Plus, Vancouver doesn’t need to be those cities… looks like investors love Vancouver for what it is.
…………………………

Do New York, London, and Hong Kong increase their population by 1% per year ? Do they restrict land use with Green Belts ? Do they allow tax free capital gains ? Do they all have government mortgage insurance that removes risk from the banks and places risk on the taxpayers ? Do they give out interest free loans to new home buyers ? Do they allow foreign speculators and money laundering ? Just wondering…….

#20 Blacksheep on 11.14.17 at 6:00 pm

“Home Price Haircut — Equity is the #1 safety net keeping bank mortgage books safe. Less buying power means less demand at the same price. OSFI’s much tighter credit policies could conspire with other factors (e.g., rate hikes and debt loads) to kill a portion of demand and jeopardize equity for 70% of the Canadians who own. That soft landing we all hope for could harden up, tout suite.”
—————————————-
So…..the new OSFI reg’s may not only: Deplete equity for 70% of the voting population AND put the banks at risk, but ALSO trigger a potential hard landing in RE, causing a recession, OK.

And the system (Politico’s) are just going to watch all this happen with out taking, any action?

Sure, the OSFI is independent, but there are many other levers that can be pulled to counter the above, negative impacts that Mr. Mc Lister mentions.

Garth I love your blog, but where do these ‘experts’ come from?

#21 Democracy Is Mob Rule on 11.14.17 at 6:04 pm

https://www.ft.com/content/07c97b9e-c633-11e7-b2bb-322b2cb39656

Sweden’s big banks call an end to decades-long housing boom

#22 In Van eat KD to have roof on 11.14.17 at 6:06 pm

In Van it’s very difficult to find an apartment, there’s not enough of them! You now have to pay ridiculously high rents. That’s why people are willing to pay ridiculous prices for RE. Why don’t they build more housing here?
You don’t need much land to build high rises.

#23 The real Kip on 11.14.17 at 6:09 pm

Canadian housing has defied the pundits time and again and prices will hold. The measly 25% average correction since spring came on the heels of a 33% increase. Hardly the “Housaggeddon” many here are pining for.

Benjamin Tal is likely right. All the government meddling will make home ownership more expensive and difficult. The basement dwellers here should stop waiting for a housing collapse and buy the slight dip they’re seeing now.

#24 jess on 11.14.17 at 6:16 pm

Siddall said:
“We are concerned about increasing levels of riskier mortgage activity by non-federally-regulated financial institutions,” …hum? contagion

=====
After 911 makes one wonder why….
…”Documents obtained by the International Consortium of Investigative Journalists show that an American bank – the Bank of Utah – helped Russia’s richest oligarch Leonid Mikhelson, a close ally of Russian President Vladimir Putin, secretly register a private jet in the U.S. Mikhelson runs Novatek, a major gas company that is on the U.S. sanctions list. A current legal loophole in the U.S. allows criminals, terrorists and sanctioned individuals and companies to register aircraft in the U.S. hiding behind anonymous companies or trust accounts, warns Global Witness.

The Bank of Utah used a trust account under the bank’s name to enable Mikhelson to register a private jet in the U.S. without having to disclose his identity. Such registrations would normally require American citizenship or residency – neither of which Mikhelson had.

All private aircraft seeking to operate in the U.S. must register with the Federal Aviation Administration (FAA). However, if you purchase an aircraft using a shell company whose ownership isn’t disclosed, the only name that shows up on the registration is the company name or a nominee, not the actual owner.

“Anonymous companies are key getaway vehicles for a whole range of criminals looking to commit crimes and launder money – terrorist organizations, drug traffickers, human traffickers, corrupt officials, the list is endless,” said Mark Hays, Anti-Money Laundering Campaign Lead at Global Witness. “The fact that the U.S. still allows suspicious actors to register aircraft in the U.S. by hiding behind anonymous companies

https://www.globalwitness.org/en/press-releases/paradise-papers-expose-flight-risks-posed-anonymous-companies-and-private-us-aircraft/

#25 just say no on 11.14.17 at 6:16 pm

I was watching Million Dollar listing L.A on slice t.v….This is the stuff filling this frenzy lol….our homes look so cheap compared in price. As for buying a home here no doubt it is multi-generation households filling these 6 bedroom 5 bath 1.2 million dollar new builds. And my financial advisor said if you have 750,000.00 to invest you only pay 1% fee and she said it can be many people in the same household? Just add all the portfolios totals together to meet this amount? So it is not just man and women 2 kids doing all this buying and investing? What is the truth?

#26 under the radar on 11.14.17 at 6:17 pm

Tal makes sense, higher employment and increased immigration will fuel growth or at least a soft landing . When real estate tanked in 89 -90, interest rates were double digits, GIC’s paid 10% . Then came a recession and one of the double income earners got sacked. Those were the factors then. Is it different this time.?

#27 Willy H on 11.14.17 at 6:17 pm

“Tal’s logic is simple. Demand will outstrip supply, rising rates or the 2% test notwithstanding. There’s a restricted supply of land in the GTA and YVR, stunned politicians (he didn’t use that exact term), plus a steady stream of new buyers, thanks to migration and immigration. ”
___ ___ ___ ___

The GTA is a gridlocked soulless urban hellscape. The 400 series highways are constantly backed up due to volume exceeding capacity and one accident after another > 24 hours a day!

Public transit infrastructure is still 30-40 years behind cities like Hamburg, Frankfurt, Munich, Montreal and Chicago > cities that we should be comparing with T.O. (not Tokyo, Beijing, Hong Kong, Paris and London > T.O. isn’t even close to being in this world class category!)

Commuting has become a hellish affair negating any savings from buying a detached country-side box 50-100kms outside the 905. Again, public transit commuter trains are 30 years behind other similiar sized cities in Europe with the same population density as southern Ontario.

Strip malls, big box retail and fast food outlets are ubiquitous. The inner 905 is a dilapidated mix of 1970’s apartments and crumbling industrial sprawl. A gangster paradise. The outer 905 is poorly planned; developer-friendly, park scarce; and car-centred, in short, suburbia at it’s worst.

God help us if Amazon picks the GTA.

The South of France is cheaper!

#28 MSM-Free Zone on 11.14.17 at 6:22 pm

The maroon bank has always been the red neck forecaster of the Canadian banking industry, and usually takes the biggest hit when bank stocks go south.

Remember Jeff Rubin and $200 oil? We all know how that movie ended.

#29 dr. talc on 11.14.17 at 6:22 pm

The stress test sequel is a scam. It is designed to keep people with existing lenders, no more shopping for better rates. But worse than that, many will be afraid to upgrade, relocate, re-fi to reno, consolidate etc, if their financial situation is worse than when they bought, so they will just stay put and ride it out=less supply. I’d agree with Tal. I am indeed tired of typing: the governments have done absolutely nothing to address the supply shortage, which is orchestrated by the United Nations

#30 Alberta Ed on 11.14.17 at 6:24 pm

Heard the SOS on CBC Radio’s “Business” report today; sounded like the usual regurgitated press release that CBC considers to be “news” these days.

#31 rainclouds on 11.14.17 at 6:24 pm

These folks could really use a spin meister like the Benerator.

To review. Publically traded company responsible for running a BC Casino accepts bags of small bills from foreign gamblers.no questions. Wonders why the media is now asking THEM questions. Tries to prevent it. More skeletons in the BC Liberal Closet?

http://thebreaker.news/news/gcg-foi-release/

#32 When the Whip Comes Down on 11.14.17 at 6:27 pm

Also be reminded Benny bitched about the prospect of the OSFI reg coming in. Too early he said and OSFI should wait and see what rising rates do etc prior to changing regs, or something like that. Can’t find the exact link, but it was on air. He was very vocal about it.

#33 Doug t on 11.14.17 at 6:30 pm

We are in the eye of the hurricane – when the dust settles and we can survey the wreckage then we will see what ran this ponzi we’ve been involved in for the last 30yrs

RATM

#34 Danny on 11.14.17 at 6:31 pm

CIBC obviously is ignoring the news last week of fraudulent builders of condos intentionally not building pre-approved condo buildings in the GTA in order cancel purchase agreements with new condominium buyers.
Possibly to start a new cycle of selling at a higher market value when these developers rename themselves.

Not much legislation to protect buyers who have been waiting for construction completion and are thoroughly screwed having to start again in the buying phase….lost time….lost money…..and serious personal and family stress.
Where are the consumer protection for the buyers?
Definitely not CIBC……maybe in bed with developers?

Just like greedy Trump.

#35 just say no on 11.14.17 at 6:32 pm

Back in 1988 I bought a house for 66,000. The seller had a hard time selling cause it was expensive for the incomes. The daughter and son in law lived with the mother in this house cause they most likely saved. They all bought a home together for 120,000.00 so the mother would be taken care of. The numbers seem cheap but this is maxing out at that time. I believe this is being repeated with higher resale prices of today. What comes out is being matched and put back in? The more $ the merrier! Anyway no apartment is worth 400,000.00 but let them play have fun!

#36 Linda on 11.14.17 at 6:36 pm

#22 ‘In Van’ – who is the ‘they’ to whom you refer regarding building more rentals? If it is business interests, ‘they’ will build only if ‘they’ believe ‘they’ can make a profit. No viable business will invest if they believe they will lose money. ‘They’ aren’t in the business of making your life easier at their expense. If it is government, well, stand in line for that endless demand for taxpayer funded services. Demand always exceeds supply & deficits eventually result in higher taxes to service the debt & continue to run the services already in place. No surprise, most taxpayers are less than enthused when their tax bill increases, even when the services being provided are services they want.

#37 dr. talc on 11.14.17 at 6:38 pm

The idea that osfi is an ‘independent’ entity outside the control of banks and government is fairy tale for children. There is only one conclusion for adults- it is an arm of central banks

#38 JSS on 11.14.17 at 6:39 pm

I’m beginning to believe that house prices will indeed continue to grow, or at the least, stay steady. I actually believe that CIBC guy.

Many immigrants are coming with generational wealth, and are capable of buying a large home, a semi-luxury vehicle, and a small business that can provide some cash flow. Families are living together under one roof, and are able to pool their money, and pay the mortgage down quicker, thus building equity. Grandparents are at home, and act as caregivers to their grandchildren.

Those Canadians who wasted several decades of their working lives buying useless items, eating out and drinking at the club everyday, enjoying expensive vacations, etc. are the ones in big trouble. when they should’ve been saving, they spent. It’s now too late for many.

#39 Sitting on the toilet thinking on 11.14.17 at 6:50 pm

Everyone seems to be forgetting the risk of a recession like we will never have one again. And all the people saying the 90’s crash was caused by high interest might be true but it was actually a falling interest rate environment. Also amazon will not come here and high housing prices will be one of the factors

#40 Dan.t on 11.14.17 at 6:57 pm

#5 FOUR FINGERS WATSON on 11.14.17 at 5:04 pm
I think Benny and CIBC got it right. The government will not do the 3 things necessary to pop the bubble . The government rhetoric is BS, just like the campaign promises. The govt. created, nurtured, and NEED the bubble to continue.
————————

I agree. Give it up. Nothing will change until money costs something and tax free gains and reckless behaviour is no longer rewarded with massive windfall gains.

http://theprovince.com/news/local-news/clark-wat-met-hong-kong-developers-while-foreign-investor-debate-roiled-b-c/wcm/4c85ce2b-f68f-43d0-aa54-4bc887617809

that in a nutshell is the BC government looking after it’s voters. Go liberals. Say one thing in public but shaft the locals in the back room meetings. Now I guess BC can trust the NDP- they seem to be really studying the situation hard. So much for affordable housing policies. Just repeat Clarks mantra 100x “we can’t mess with peoples “hard earned” equity”. Just like NDP are now saying.

Looks like those who put every cent in the last 10 years, leveraged their last penny at 99.5% leverage, begged bank of mom, took out credit card debt for the down, backed by tax payers, with banks licking their lips (taking zero risk) made out like champs in BC and GTA. What is the lesson again??

Do what the powers to be want you to do! When they say spend and borrow and buy houses, do it. No money? No problem…zero down, 40 years…oh, who cares. Whatever. Nothing has changed in 15 years. Just gotten worse. And now, it’s gonna get better?

#41 Looney Baloney on 11.14.17 at 6:59 pm

(((Benny Tal))). ‘Nuff said.

#42 rainclouds on 11.14.17 at 6:59 pm

Who has more credibility?
A constantly pumping CIBC Economist with obvious skin in the game VS Nobel laureate Economist who doesn’t ?

http://business.financialpost.com/investing/robert-shiller-on-canadian-housing-bubble-market-distractions-like-trump-and-new-bmo-etf/amp

What are your views on the Canadian housing market?

Existing real estate in established cities like Toronto and Vancouver looks bubbly to me, and I would be concerned. I wouldn’t advise someone to buy two or three houses in Toronto.
I don’t know what exactly is driving it, and I know it’s not just Canada — it’s also New Zealand, Australia, Hong Kong and Shanghai.
History doesn’t show this as a good investing strategy, as even great cities don’t appreciate very much over time. It’s very slow compared to other investments and in the long run, it hasn’t worked out. If you look at major U.S. cities over 100 years, they do not appreciated that much. That’s because cities are spreading out, and office centres move further away. A recent study showed home prices are higher in boxed in areas. That’s logical, but Toronto isn’t boxed in.
Home prices in New York, particularly Manhattan, are several times higher than they once were, but they acquired that status over hundreds of years, so it’s not that dramatic of an investment performer over the long haul.

#43 MSM-Free Zone on 11.14.17 at 7:03 pm

#27 Willy H on 11.14.17 at 6:17 pm
_________________________

Yeah, that pretty much sums up the GTA, though you neglected to mention road rage, semi-trucks three abreast, and green-and-orange Beck taxis, whose drivers regard traffic laws as really only suggestions.

As recently as five years ago, there was an opportune time during the weekday (forget about weekends) between 10:00-14:00 where one could actually witness one’s speedometer needle swing higher than one’s oil pressure gauge. No so anymore. Can’t even fathom why a Bridlewood 1%-er would consider leasing a paddle-shifting Lambo in this town.

Why they do they even have traffic cameras on the 400-series anyways? Seems like re-beaming yesterday’s blurred, b&w images as screen savers would spare a lot of expense. Ditto for Google Maps, whose spider-web images of twice-daily, cherry-red, cholesterol choked arteries would give delight to any heart surgeon.

Two more years and I can retire from this Sodom and Gomorra. Sure going to miss hawg trips for tiger-tail ice cream, though.

#44 In Van eat KD to have roof on 11.14.17 at 7:04 pm

to Linda #36,
Let’s say 500 persons can live in a high rise (condos or apartments I don’t care)
If the cities in Greater Van give permits for 200 high rises, it means additional roofs for 200 x 500 = 100,000 persons. It should fix the problem of overpriced housing! Of course the developers would make money because they only need a small amount of land to build a high rise.
Van density is far less than Manhattan or Hong kong density. There’s room for thousands of high rises.
In my humble opinion it’s the way to fix the problem of ridiculous prices.

#45 Dolce Vita on 11.14.17 at 7:10 pm

Select Max for the chart:

https://tradingeconomics.com/canada/unemployment-rate

Now compare peaks in chart to when RE crashed, it was soon thereafter (i.e., pogey, savings, severance etc., ran out).

Explains each crash, 100%. That’s what it will take.

If you’re a market technical analyst, well then, the chart cycles indicate we are about due for another unemployment peak.

And not one of those unemployment peaks were predicted, not even by CIBC.

#46 Nonplused on 11.14.17 at 7:13 pm

War is coming.

Now, some of you are going to say, “when did we not have war, at least a war, somewhere?”

That would be true.

But the precursor to war is usually what we would now call “unemployment”, or might have at times past called a depression (or “recession” since the “great depression”, only to make sure people don’t think one is the other, which they are just the severity is different.)

The thing to look at both north and south of the border is “people not in the work force”. The unemployment number is a lie. It only counts people who have worked recently. Those not in the work force because they haven’t worked in over a year, what would they have us think? None of those people want or need a job? If so the retirement crises is well overstated.

Sure, some of those people are former government employees with a nice pension. But they are also the hoards of millennials living in their parent’s basement, with no prospects, no one demanding their labor by flashing money at them, no hope.

When the youth cannot find employment, war comes. At least the army gives 3 square meals a day. And sure you might die, but that’s going to happen one day anyway. Unemployed youth are the key to forming an army, and armies don’t stay in their barracks. It’s a waste of money to do so.

You don’t buy a tractor and then leave it in the garage instead of the field. You don’t buy a laptop computer and then never turn it on rather than commenting on Garth’s posts. If you buy a hammer, chances are you plan on pounding a nail. And the unemployed or “not in the workforce” are all just soldiers in waiting.

And the millennials are not as against going to war as you might think. They’ve been playing war games on their computers since they were born, ever since the computer could render the graphics. But while the computer games made war “glorious”, no real pain was ever rendered other than that you might have to “restart” a battle. Don’t misunderstand the consequences, computer games have made war more acceptable to the potential participants than any religion ever did, and now that they are broke and starving, it won’t be hard to muster them.

Just like every time in the past, unemployment causes war.

#47 Crazy millennial on 11.14.17 at 7:19 pm

Hey Garth. You wrote a post some time ago about vulching properties. A sort of how to vulch manual. I haven’t been able to find it using the search bar on your page. Could you please post a link to it. Thanks

#48 vulcan without ears on 11.14.17 at 7:21 pm

Weed is the new tulipomania…

#49 bigtowne on 11.14.17 at 7:28 pm

You forgot “Bre-X”.

#50 akashic record on 11.14.17 at 7:31 pm

Every crisis eventually healed. Even boom became a bust.

—-

All of these are good opportunities to make great returns for people with appetite for high risk tolerance. Combined with early trend spotting and willingness to get emotionally detached from the noise helps a lot.

After all everything is a form of vibration and energy, including money, wealth, it’s an endless, breathtakingly beautiful flow and convergence regardless of the direction.

#51 Smoking Man on 11.14.17 at 7:34 pm

Dead cat bounce is over.

Just pull up any hood in the city on zolo.
15 years before April prices return to Toronto.

#52 crowdedelevatorfartz on 11.14.17 at 7:53 pm

@#44 KD is eating your Brain
“Van density is far less than Manhattan or Hong kong density. There’s room for thousands of high rises.”
********

http://www.google.ca/url?url=http://www.vancourier.com/news/vancouver-has-highest-population-density-in-canada-1.9735630&rct=j&frm=1&q=&esrc=s&sa=U&ved=0ahUKEwik496jrb_XAhVY-mMKHb_8B4cQFggmMAI&usg=AOvVaw3GtwnLq4vEoVFG-fIjjmz6

…… and you want more people here?

Thousands of highrises….

Traffic not gridlocked enough for you? Or will everyone ride bicycles in this “utopia”?
Smog not quite thick enough?

Arthur Erickson was asked many years ago when the population hit 1 million what he thought Vancouver would look like in 2050.

“By 2050 there will be 10-15 million people living here”

Everyone laughed.

Not anymore

#53 the Jaguar on 11.14.17 at 7:53 pm

Especially CIBC, with a fat property exposure. It wouldn’t be the first time we’ve been led around by the nose when it comes to housing – the Ponzi of our time.

Let’s ask Benny how much rental property exposure “the Commerce” has on its books. Not all mortgages are the same, nor do they perform the same.

#54 Trumpocalypse2017 on 11.14.17 at 7:56 pm

Nonplused on 11.14.17 at 7:13 pm said

“War is coming.”

You are so right, my friend.

Trump has fled Asia early to prepare for it.

https://www.theguardian.com/us-news/2017/nov/14/donald-trump-skips-east-asia-summit-on-final-day-of-12-day-tour

https://www.usatoday.com/story/news/politics/2017/11/14/analysis-trumps-trip-asia-over-now-what/857474001/

Conditions are nearly perfect for Trump to launch war, and it will only get more compelling for him in the days ahead.

Prepare.

#55 NAFTA ? on 11.14.17 at 7:57 pm

The CMHC report about housing in the Golden Horseshoe cited a sluggish economy and a population decline in Toronto during the 90s as reason for the housing collapse (among others).

There is a small chance that we will see the Trumpster admin. shredding all or parts of NAFTA and that production will have to move South to ensure corporate survival.

C$ will take an immediate hit and then all hell will break lose in Canada because the banks have way too much exposure in RE.

Canadian RE Titanic will probably hit the iceberg if NAFTA gets torn up.

#56 For those about to flop... on 11.14.17 at 7:59 pm

Recent Sale Report.

This one just sold in the last couple of days.

2958 w 28th ave,Vancouver.

Originally asking 3.3 then 2.99 then 2.69

Sold for 2.63

Tax assessment 3.06

And so the buyer got a bit of a discount,but the seller also got a fair whack for an 85 year old house…

M43BC

https://www.zolo.ca/vancouver-real-estate/2958-w-28th-avenue

#57 Debtslavecreator on 11.14.17 at 8:05 pm

Here’s your answer as to why these cibc crooks are suddenly changing their tune

http://www.bnn.ca/fitch-warns-of-persistent-housing-risk-to-canada-s-banks-lowers-cibc-debt-outlook-to-negative-1.898287

That’s all

#58 I thinks I know something on 11.14.17 at 8:06 pm

I thinks Tal knows what he’s talking about. Compare his track record of the last few years regarding GTA RE prices to the doomers. His is much better.

#59 oncebittwiceshy on 11.14.17 at 8:07 pm

So, which Benjamin Tal do we believe. The pre-OSFI legislation Benjamin Tal warning about recession or the post OSFI Benjamin Tal saying everything will be fine. Lol.

http://business.financialpost.com/news/fp-street/we-clearly-see-the-potential-risks-osfi-to-finalize-new-mortgage-criteria-this-month

“In his report, Tal argues that the BoC is not oblivious to the fact that borrowers are highly sensitive to rate rises. “The increased sensitivity to higher rates will prevent the Bank from moving too rapidly,” he said. “The more immediate risk is the proposed rate qualification regulatory changes which we believe have the potential to notably slow down growth in mortgage originations.”

#60 Cristian on 11.14.17 at 8:07 pm

“Short of significant change in housing policies and preferences,…”

Well, housing preferences are known to change when people can’t afford them.
But, then again, what can you expect from a guy who is paid to push mortgages.

#61 Raging Ranter on 11.14.17 at 8:15 pm

CIBC always manages to find these guys. Their chief economist used to be Jeffrey Rubin, who called first for a 50 cent loonie and then for $200 bbl oil. He was the ultimate contrarian indicator. Benny Tal is just carrying on the fine tradition over at CIBC. That tradition of being wrong about everything.

#62 I thinks I know something on 11.14.17 at 8:17 pm

#5 FOUR FINGERS WATSON on 11.14.17 at 5:04 pm

Absolutely right on. The government needs this bubble to continue blowing. They do spew a lot of BS about slowing it down, but it is just BS.

#63 Gravy Train on 11.14.17 at 8:19 pm

#46 Nonplused on 11.14.17 at 7:13 pm
“The thing to look at … is ‘people not in the work force’. The unemployment number is a lie. It only counts people who have worked recently. Those not in the work force because they haven’t worked in over a year, what would they have us think? None of those people want or need a job?….

“And the unemployed or ‘not in the workforce’ are all just soldiers in waiting.”

Not in the labor force:
“Persons who are neither employed nor unemployed are not in the labor force. This category includes retired persons, students, those taking care of children or other family members, and others who are neither working nor seeking work. Information is collected on their desire for and availability for work, job search activity in the prior year, and reasons for not currently searching. See also Labor force and Discouraged workers.”

Labor force:
“The labor force is the sum of employed and unemployed persons. The labor force participation rate is the labor force as a percent of the civilian noninstitutional population. Browse various labor force characteristics. Data also are available by demographic characteristics. See also Not in the labor force.”

Discouraged workers:
“Discouraged workers are a subset of persons marginally attached to the labor force. The marginally attached are those persons not in the labor force who want and are available for work, and who have looked for a job sometime in the prior 12 months, but were not counted as unemployed because they had not searched for work in the 4 weeks preceding the survey. Among the marginally attached, discouraged workers were not currently looking for work specifically because they believed no jobs were available for them or there were none for which they would qualify. See also: Not in the labor force and Alternative measures of labor underutilization.”
https://www.bls.gov/cps/lfcharacteristics.htm#nlf

#64 Land of Oz. on 11.14.17 at 8:21 pm

“even boom” -> “every boom”

Also, about 30 yr terms:
Why bother with a term at all?
Do like the Aussies: almost half of the mortgages are interest-only, and thus have an infinitely long term.

Aussies are screwed by the way:
https://www.linkedin.com/pulse/australias-economy-house-cards-matt-barrie/
That economy will fall over any day now.

#65 crowdedelevatorfartz on 11.14.17 at 8:22 pm

#@58 I Dont Think
“thinks Tal knows what he’s talking about. Compare his track record of the last few years regarding GTA RE prices to the doomers. His is much better….”
******

Then stop talking and go buy more property

#66 crowdedelevatorfartz on 11.14.17 at 8:24 pm

@ nonplused

You had to encourage Trumpocalypse2017 didnt you….didnt you!

#67 Happy Housing Crash Everyone! on 11.14.17 at 8:35 pm

SHYSTERS make me laugh. The laws of economics never apply. Yeah some how against all logic prices will go up. Ok SHYSTERS why are there no bidding wars? Why are buyers refusing to close? Why are prices falling and houses still not selling months later? Prices went up on easy credit and will go down on higher interest rates and tighter lending standards. Garth is right prices will melt for years as rates melt upward for years.

Enjoy the housing crash SHYSTERS
Happy Housing Crash Everyone Everyone ! :-)

#68 Annoying person on 11.14.17 at 8:37 pm

#19 FOUR FINGERS WATSON on 11.14.17 at 5:59 pm

Do New York, London, and Hong Kong increase their population by 1% per year ?

————

Yes. You might like this internet service called, Google (www.google.com). It’s great for finding answers to simple questions.

#69 Cto on 11.14.17 at 8:38 pm

Garth
You are a man a fundamental logic,….
but don’t underestimate the Miracles of sunshine and rainbows that can happen here in the Socialist land of zoombafoo.
In order to live in Canada you have to throw a logic away and live by the wind!¡!!! There will always be a social safety net if you’re screw up! Remind me of Homer Simpson episode that you can do the stupidest most illogical things and still come out ahead.!

#70 Fiendish Thingy on 11.14.17 at 8:38 pm

#23 Real Kip-

Get your calculator out:

That 25% decrease more than erased the 33% increase…

33% decrease erases a 50% increase…

#71 25% Correction ? on 11.14.17 at 8:39 pm

Re # 23

25% housing correction maybe in Toronto and Vancouver areas but most of the country is down no more than 10% from all time highs. In my area prices are flat to down 5% .Condo prices seem to still be rising although at more tepid pace.

#72 FOUR FINGERS WATSON on 11.14.17 at 8:45 pm

#68 Annoying person

Yes. You might like this internet service called, Google (www.google.com). It’s great for finding answers to simple questions.
…………………………

Wrong. The US immigration rate is one third of one per cent. Try Google yourself.

#73 Newcomer on 11.14.17 at 8:54 pm

#22 In Van eat KD to have roof on 11.14.17 at 6:06 pm
In Van it’s very difficult to find an apartment, there’s not enough of them! You now have to pay ridiculously high rents. That’s why people are willing to pay ridiculous prices for RE.
————–

It’s hard to find an example in which, the total cost of buying is not at least twice the total cost of renting. Rents are high, but they are a bargain compared to buying.

#74 TurnerNation on 11.14.17 at 8:54 pm

A fact is that Millennials will invest in that which accords the greatest social acceptance (say on social media).

In order:
1. Bitcoin (cool story bro)
2. Homes/condos.

Today I heard But your home is building equity, it’s your savings riiight?

Blog dogs, the Reddit Rats have it figured out: joining The Party in Kanada is the only way.

Here, we have a ex-police chief, then apparently against legalization of pot; ran for political office – I bet on a law & order platform; now handed a plum job heading up a….pot company:

https://www.reddit.com/r/toronto/comments/7cyleu/former_toronto_police_chief_now_heads_marijuana/

Quote:

“What you’re pretty much describing is the fall of the Soviet Union, when as Russia transitioned to “capitalism”, the richest families of the union scrambled to claim private ownership of the state’s crowns and resources. That’s pretty much what’s happening here in terms of cannabis.”

#75 Annoying person on 11.14.17 at 8:58 pm

Watson.

Have you been drinking or do you just not pay attention to what you write? You asked, “Do New York, London, and Hong Kong increase their population by 1% per year ?” You did not ask, “Is the overall US immigration rate 1% per year?” I’m guessing you know the difference between New York and the USA and you know the difference between population increase and immigration. So which is it, have you been drinking, or don’t you pay much attention to what you write?

#76 People are Strange on 11.14.17 at 9:00 pm

Over the past few months, I’ve been seeing all theses Vancouver price examples moving down for detached home. I recently decided to have a look at some of these examples. Holy crap!!! Crumby 1960’s tiny bungalows going for 2 million! Are you people ok out there? These shacks are worth 1/4 of these prices at best if you really look at it. These are 2045 prices they’re asking for those places! TO has some similar examples but not as bad. Supply and demand aside, at some point the shacks just ain’t worth nearly what the market has catapulted these into. We’re screwed unless something drastic happens. maybe we need to stop buying stuff we can’t afford if this is what the end result is. Expensive cabins. Look at what that money can buy in 99 % of the world.

#77 NoName on 11.14.17 at 9:12 pm

@Nonplaused and Trampoline2017

I just finished reading 1st two chapters of Graham Allison book Destined for war, chapters that I red don’t mention 3 meals but do mention other stuff…
You two don’t, I say don’t read that book it could make both of you depressed for reminder of the life.

#78 joblo on 11.14.17 at 9:18 pm

#54 Trumpocalypse2017 on 11.14.17 at 7:56 pm
“War is coming.”

“You are so right, my friend.”

When did it stop?

$5.6 trillion spent to date, then add counter terrorism.

http://bigthink.com/paul-ratner/the-us-spent-56-trillion-on-war-since-911

#79 M on 11.14.17 at 9:20 pm

My answer to that moron was 1000 contracts on puts at 65 bucks back in March when my screen was flashing housing collapse.
Housing is in free fall. It’s not official yet. Jan-Feb 2018 news will hit that will be miserable even if so revved up by RE, banks, CMHC and the gov.
The ride down on HCG was almost better than sex. Can’t ever beat these things. The best to rob morons is when they are asleep.

#80 NoName on 11.14.17 at 9:22 pm

Addendum to my previous post

North Korea poster child of China’s satellite state.
South Korea poster child of US satellite state.

This could get very ugly very soon, according to book. Houston knows that there is a problem for some time now…

#81 Nonplused on 11.14.17 at 9:23 pm

#63 Gravy Train

Not sure what your point is? Are you trying to tell me there is a record number of stay at home moms and students? Well of course there is, they can’t get jobs.

#66 crowdedelevatorfartz

Sorry. But regardless Trump is just Marty McFly riding the tailwinds of history without a nuclear powered Delorian. It is a mistake to think one man can change the world. Hitler didn’t cause WWII, he rode it. If not Hitler, someone else. These waves are bigger than any one man or woman.

#82 akashic record on 11.14.17 at 9:27 pm

“What you’re pretty much describing is the fall of the Soviet Union, when as Russia transitioned to “capitalism”, the richest families of the union scrambled to claim private ownership of the state’s crowns and resources. That’s pretty much what’s happening here in terms of cannabis.”

Yep. Just like that.

You transform illegal to legal by putting a former “cop” in charge of the former “illegal”.

A symbolic act manifests the transformation for the minds.

On the side it is also a transformation from one form of power to an other. In this case the energy of political power transformed into the energy of money.

Happens all the time, all over the cosmos.

#83 Paul on 11.14.17 at 9:28 pm

C.I.B.C. Rates going up tomorrow!

#84 FOUR FINGERS WATSON on 11.14.17 at 9:29 pm

#75 Annoying person on 11.14.17 at 8:58 pm
Watson.

Have you been drinking or do you just not pay attention to what you write? You asked, “Do New York, London, and Hong Kong increase their population by 1% per year ?” You did not ask, “Is the overall US immigration rate 1% per year?” I’m guessing you know the difference between New York and the USA and you know the difference between population increase and immigration. So which is it, have you been drinking, or don’t you pay much attention to what you write?
……………………………
How’s your math ? BTW, you got your name right.

Summary. The U.S. Census Bureau has estimated New York City’s population at 8,537,673, as of July 2016. This represented an increase of 362,500 residents (or 4.4 percent) over the April 2010 decennial census count of 8,175,133.

#85 HPI on 11.14.17 at 9:34 pm

Tomorrow, we’ll know which way the wind is blowing.
Less than 11hrs to go for Teranet’s October report.
https://housepriceindex.ca

Meaningless. The indicator that indicates nothing. — Garth

#86 Mirza on 11.14.17 at 9:36 pm

It shows CIBC is very very deep water& cannot afford RE crash

#87 NoName on 11.14.17 at 9:37 pm

And this, I was at hoem depot earlier today, talking about expensive, lady at paint suggested to grab different product and she saved me 3$. That place is lot more expensive than I remember.

But this is what I found. Laying in one of the bins. Don’t know what to laugh or cry…

https://imgur.com/a/0YZDl

Damn. You found my secret. — Garth

#88 young & foolish on 11.14.17 at 9:46 pm

In every organisation … whether capitalist or socialist, the insiders seem to always find a way to game the system in their favour.

#89 Nemesis on 11.14.17 at 10:11 pm

@NonPlused#46…

MassMobilization is so yesteryear… now it works like this:

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

And supercomputers are this era’s battleships/carriers…

https://en.wikipedia.org/wiki/TOP500

#90 Walter Safety on 11.14.17 at 10:28 pm

# 44 -Wrong.

The most expensive cities are the most densely populated.
Increased density makes housing unaffordable.
Politicians respond by saying we’re building low income housing, while displacing low income people and importing more low income people into new higher density.
Four meetings this month in my city to here citizens “opinions “on done deals .
Bungalow replaced by 50 housing units, 450 low income units to be demolished replaced by 1450 housing units
Plaza demolished to be replaced by 6 , 8 floor towers,
and the 7 floor hotel to be replaced by two towers one 18 floors the other 25.
Parking will be unaffordable never mind living.

#91 I have no debt on 11.14.17 at 10:32 pm

Remember the idiot from BMO who kept a price target of $200 on RIM stock until it reached $20 and he has to find another job. Mike Ambrasky I think his name was. There are a whole lotta idiots out there folks, think for yourself, these “experts” are usually full of it and know nothing.

#92 I have no debt on 11.14.17 at 10:34 pm

What is the maximum amortization for mortgages in Canada? Can people get around this?

#93 Adrian Tough on 11.14.17 at 10:36 pm

I encourage everyone to follow this link and look at the data for Canada’s real estate. The next leg of this journey will likely be down, not up…
http://www.profstevekeen.com/data-on-credit-employment-and-house-prices/
Household debt acceleration leads real estate price changes by ~3 months, according to Professor Steve Keen’s research.

#94 I have no debt on 11.14.17 at 10:42 pm

Can’t people just lie about their income to qualify for the same/more once the B20 stuff comes into effect? I mean, this is Canada right – Global Housing Superpower.

#95 When Will They Raise Rates? on 11.14.17 at 10:54 pm

Attention all online business owners:

I just received this in my inbox… Seems the jackals in Ottawa are looking in every nook and cranny to find every last dime they can squeeze. No rock will be left unturned. I now fully expect an audit in the near future. I hope all of you have your books in order… They’re going back all the way to 2014:

Notice to Business Customers and Partners.

We’re writing to notify you that we have received a Federal Court order requiring us to disclose information to the Canada Revenue Agency (CRA) about PayPal Business account holders who sent or received a payment between January 1, 2014, and November 10, 2017. To comply with the order, PayPal Canada will make a disclosure to the CRA within 45 days of the date of the order.

If you have any questions about this email, please refer to our list of Frequently Asked Questions or contact us through our Help Centre.

Thank you for being a PayPal customer. We’re committed to helping your business get the best online and mobile commerce solutions so you can grow your business and compete in today’s digital economy.

PayPal Canada

Bastards.

#96 When Will They Raise Rates? on 11.14.17 at 10:56 pm

What information has PayPal been ordered to share with the CRA?

The court order requires PayPal to disclose the following information to the CRA about PayPal business account holders who received or sent a payment between January 1, 2014 and November 10, 2017:

The full name of every individual or corporation holding a business account that has a Canadian address;
The date of birth of each individual holding a business account;
The business name, if applicable;
The telephone number(s) of the corporation or individual holding the business account, if available;
The full address(es) of the corporation or individual holding the business account;
The email address of the corporation or individual holding the business account;
The Social Insurance Number and/or Business Number of the corporation or individual holding the Business Account, if available.

The following information on transactions made by the account holder:

The total number and value of received transactions for each calendar year between January 1, 2014 and November 10, 2017.
The total number and value of sent transactions for each calendar year between January 1, 2014 and November 10, 2017.

https://www.paypal.com/ca/selfhelp/article/cra-information-request-faq3755

^ Unbelievable that they can blanket violate everyone’s privacy in this manner.

#97 For those about to flop... on 11.14.17 at 10:57 pm

I normally just do an excerpt from the article but I felt this was one of the more interesting ones I had seen and decided to go whole hog…

M43BC

“A Century of America’s Top 10 Companies, in One Chart

Economists like to explain the constant churn of the economy as “creative destruction.” It implies a silver lining when a single company breaks up—something better might take its place. An interesting way to think about this concept is by looking at historical examples of companies that have come and gone. That’s exactly what our new chart does.

Our viz lays out the top ten largest companies according to Forbes in a historical sequence for 1917, 1967 and 2017. The size of the circle corresponds to the company’s valuation adjusted for inflation to 2017 dollars. We then color-coded each circle by industry, and we added the company’s logo for a quick read on the ranking.

Lots can be said about the implications of our viz. First off, the graph represents valuations adjusted for inflation in 2017 dollars. Why is this important? It means that the United States is far wealthier now than it was 50 or 100 years ago. Our largest companies are significantly larger and worth more than the largest companies in 1967 and 1917. Just look at the size of Apple compared to IBM—it’s not even close. In 1967, IBM was valued at $259B. That doesn’t break the top ten today.

The top ten largest companies in each year are all different. The rankings change, and as time goes on, companies lose their place on top of the list. The one exception is AT&T, which held the second spot in 1917 and 1967. That is, until the U.S. government famously broke up AT&T(which is why it’s probably not in the top 10 today). AT&T is the exception that proves the rule.

Technically speaking, most of these companies still exist today, but only because they went through substantial business model changes or were acquired by a competitor. Steel companies aren’t nearly as important as they once were. Within the energy sector, Texaco and Standard Oil both merged with competitors. Polaroid and Kodak essentially became obsolete. It remains to be seen how much longer some companies like Sears and GE can stay afloat.

And finally, consider the diversity of companies 50 and 100 years ago. The top ten largest firms used to represent a variety of different industries, from oil and gas conglomerates to retailers and auto manufacturers. Nowadays, technology behemoths dominate the top five, followed by Warren Buffet’s massive holding company in Berkshire Hathaway. The massive steel monopolies from a century ago pale in comparison to the size of tech companies today. This suggests that the Internet has concentrated financial power in the boardrooms of only a handful of companies like never before. This is one of the many reasons why tech companies have to worry about regulators busting up their monopolies.

So the economy has undergone significant changes over the last century, and the creative destruction will churn on. You can be sure that the top ten companies in 2067 will look substantially different than today, and just imagine what the list will look like in 2117.”

https://howmuch.net/articles/100-years-of-americas-top-10-companies

#98 Here'stoyou on 11.14.17 at 11:09 pm

#1 Hamilton

You may be right that there aren’t similarities between the current housing market and what happened in 1990. I haven’t read enough about it to have an opinion. If you’re interested in similarities you should go to Wikipedia and search “United States housing bubble”. You will find ALL kinds of similarities which I’m sure others have probably already pointed out in the past. It’s so interesting reading about the US Real Estate Bubble – in so many ways it’s as if their facts are about Canada eh.

#99 yorkville renter on 11.14.17 at 11:13 pm

#57 Debtslavecreator on 11.14.17 at 8:05 pm

Bingo.

#100 Smoking Man on 11.14.17 at 11:14 pm

Downtown not my thing anymore. Let the kids have it.
No more flirting no more fun. Faces glued to the dumb phone. With a speed dial to an attorney.

Got to find a beach somewhere any suggestions?

#101 Unicorn on 11.14.17 at 11:15 pm

Sorry Garth was late to blog tonight…was on the phone with some guy named Benny Tal and advertisers from the Globe and Mail. They were pleading with me to encourage all the rich Millenials, living with their parents to by an over leveraged particle board house.

My response: When Pigs can fly!

What a bunch of D-gens.

#102 N on 11.14.17 at 11:37 pm

“When the fog clears, it will become evident that the long-term trajectory of the market will show even tighter conditions. The supply issues facing… Toronto and Vancouver will worsen and demand is routinely understated. Short of significant change in housing policies and preferences, there is nothing in the pipeline to alleviate the pressure.”

Tal’s predictions might make demand/supply sense…. but politically, if there’s price increases in the GTA, the Ontario Liberals WILL ensure that they get some “cold water” to douse the fire. Anything short of it would be political suicide. Elections are in June 2018.

Perhaps, they’ll introduce a surcharge to skim any “black money”/”liar loans” from the housing markets.

The basic idea is to have an annual property surtax that applies on properties over a certain threshold in value—something like $800,000, or $500,000, or $1 million, depending on what policymakers choose. And the surtax would only apply to value above that threshold. The main thing is that you can refund the amount of surtax that is owed based upon income taxes that have been paid. And so that means people who are working locally and paying Canadian income taxes on a consistent basis are going to be exempt from the tax, while those who own property on the basis of foreign income or wealth will be hit by it. That reconnects the housing market to the local labour market. And that would be extremely powerful. The surtax acts as a filter. It doesn’t affect the kind of money that you would want invested in the real estate market, and it discourages the kind of money that you wouldn’t want. It also would tend to discourage speculation.

https://torontolife.com/real-estate/qa-joshua-gordon-researcher-blames-buyers-rising-home-prices-toronto/

#103 bubu on 11.14.17 at 11:53 pm

I’m convinced the prices will not go down… the sales will go down as people will not lower the prices and they will prefer to wait until salaries will catch up or regulation will change…. If you don’t believe this look at all the changes in AB where the prices didn’t go down after all… they went through the mortgage changes from 40 to 25 years, oil crash and 10-11% unemployment… If that doesn’t crash a market, nothing will do it…

#104 Chelsea on 11.14.17 at 11:56 pm

Going to wait until the dust settles to buy a descent, affordable home here in BC. After the BC NDP financial budget in February we all will know (the buyer’s) where we stand. It is a pity cheap money has and will ruin people’s lives who have mortgages and mammoth debt. They tapped into that life style, they of-course will have to endure what will come their way.

To those who can afford to buy, soon I hope, we should cheer for relief on the home prices … eventually the economy will correct itself.

Cheers

#105 DON on 11.14.17 at 11:59 pm

Okay…Okay…Okay!

So…Benny, who works for a Bank (referred to as BIG RED) which is heavily invested/exposed to the housing market (made international news a few weeks back).

No agenda here folks…move along now and forget forget forget and buy buy buy or miss miss miss the Opportunity, Opportunity, Did I say OPPORTUNITY to become a millionaire instantly ???.

Enter stage left: The real estate advertising specialist who works as an ‘reporter’ for the Globe and Mail (lots of revenue from pasting realtor ads). News is old…we are into flashy stories now.

Assumptions: (the list is exhaustive)

?) The remaining Millennial cohort (still living at home) are millionaires and highly willing (maybe it is cool to do something else now) just love living with Mom and Dad. Couldn’t have anything to the unpalatable home values for what glue, particle board and drywall, fake beams etc etc.

?) All current home owners are in great financial shape and everything is perfect, no deaths, no divorces, no job losses, injuries, no financial hardships etc.

?) The economy is great!

?) There will never be another recession (how could the government let that happen…we couldn’t make our payments?)

?) Interest rates will never rise (well again. this year)…oops forgot to tell: Many countries in the world west and east are preparing their citizens for rising interest rates.

?) Latest news…foreigners flocking to Seattle no longer Vancouver or Victoria (which are to expensive offering lower profits). S P E C U L A T I O N Boysz com’on!

?) Benny just discovered his oracle abilities. Before he was just guessing?

?) Benny has his ear tuned to the economic pulse of the nation.

?) PIGS CAN FLY!

#106 DON on 11.15.17 at 12:06 am

#68 Annoying person on 11.14.17 at 8:37 pm

#19 FOUR FINGERS WATSON on 11.14.17 at 5:59 pm

Do New York, London, and Hong Kong increase their population by 1% per year ?

————

Yes. You might like this internet service called, Google (www.google.com). It’s great for finding answers to simple questions.
****************

LOL – Four Fingers still thinks ‘google’ is a new ice cream flavour.

#107 DON on 11.15.17 at 12:15 am

#84 FOUR FINGERS WATSON on 11.14.17 at 9:29 pm

#75 Annoying person on 11.14.17 at 8:58 pm
Watson.

Have you been drinking or do you just not pay attention to what you write? You asked, “Do New York, London, and Hong Kong increase their population by 1% per year ?” You did not ask, “Is the overall US immigration rate 1% per year?” I’m guessing you know the difference between New York and the USA and you know the difference between population increase and immigration. So which is it, have you been drinking, or don’t you pay much attention to what you write?
……………………………
How’s your math ? BTW, you got your name right.

Summary. The U.S. Census Bureau has estimated New York City’s population at 8,537,673, as of July 2016. This represented an increase of 362,500 residents (or 4.4 percent) over the April 2010 decennial census count of 8,175,133.

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

Just gonna leave this here. YUP they all want to live in Vancouver/Victoria.

http://www.cbc.ca/news/canada/british-columbia/seattle-real-estate-tax-1.4398594

Foreign buyers overlooking Vancouver, heading to Seattle at ‘frenetic’ pace
Chief economist says a foreign buyers tax would be likely to go to court if implemented in U.S. city

#108 FOUR FINGERS WATSON on 11.15.17 at 12:23 am

#100 Smoking Man on 11.14.17 at 11:14 pm
Downtown not my thing anymore. Let the kids have it.
No more flirting no more fun. Faces glued to the dumb phone. With a speed dial to an attorney.

Got to find a beach somewhere any suggestions?
…………………..

Bantayaan, Cebu
http://www.kotabeachresort.com/

#109 NoName on 11.15.17 at 12:33 am

#100 Smoking Man on 11.14.17 at 11:14 pm
Downtown not my thing anymore. Let the kids have it.
No more flirting no more fun. Faces glued to the dumb phone. With a speed dial to an attorney.

Got to find a beach somewhere any suggestions?

—-

Croatia.

#110 Ronaldo on 11.15.17 at 12:49 am

#44 In Van eat KD to have roof on 11.14.17 at 7:04 pm

to Linda #36,
Let’s say 500 persons can live in a high rise (condos or apartments I don’t care)
If the cities in Greater Van give permits for 200 high rises, it means additional roofs for 200 x 500 = 100,000 persons. It should fix the problem of overpriced housing! Of course the developers would make money because they only need a small amount of land to build a high rise.
Van density is far less than Manhattan or Hong kong density. There’s room for thousands of high rises.
In my humble opinion it’s the way to fix the problem of ridiculous prices.
————————————————————-
This is what they are doing in New York.

https://www.citylab.com/design/2015/04/this-pencil-thin-tower-sets-a-new-bar-for-skinny-high-rises/391367/

#111 paulo on 11.15.17 at 12:59 am

If memory serves me correctly The CIBC has the largest exposure to canadian residential real estate loans of the big 5
of course there plenty of reasons for tal to tow the line.

#112 conan on 11.15.17 at 2:10 am

Weed is going to be legal soon. Is there an ETF that is made up mostly of snack food companies? Buying Frito Lay seems lame. I want the excitement of buying a snack food giant ETF.

https://youtu.be/IOrUHZjsg_Y?t=1

#113 Howard on 11.15.17 at 4:07 am

Just wait until early next year when Amazon announces that it has selected Toronto for its second HQ.

Woohoo, my folks own a SFD in the 416. Come on money-launderers and government enablers. Make my Mom and Dad rich!

#114 Midnights on 11.15.17 at 4:13 am

New Highway…
http://www.zerohedge.com/news/2017-11-13/canada-builds-300-million-road-nowhere-why

#115 Midnights on 11.15.17 at 4:28 am

Here we goooo‼️
https://www.thestar.com/business/2017/11/14/vancouver-bans-short-term-airbnb-rentals-in-laneway-homes-basement-suites.html

#116 Dan.t on 11.15.17 at 4:29 am

#96 When Will They Raise Rates? on 11.14.17 at 10:56 pm
What information has PayPal been ordered to share with the CRA?

The court order requires PayPal to disclose the following information to the CRA about PayPal business account holders who received or sent a payment between January 1, 2014 and November 10, 2017:

The full name of every individual or corporation holding a business account that has a Canadian address;
The date of birth of each individual holding a business account;
The business name, if applicable;
The telephone number(s) of the corporation or individual holding the business account, if available;
The full address(es) of the corporation or individual holding the business account;
The email address of the corporation or individual holding the business account;
The Social Insurance Number and/or Business Number of the corporation or individual holding the Business Account, if available.

The following information on transactions made by the account holder:

The total number and value of received transactions for each calendar year between January 1, 2014 and November 10, 2017.
The total number and value of sent transactions for each calendar year between January 1, 2014 and November 10, 2017.

https://www.paypal.com/ca/selfhelp/article/cra-information-request-faq3755

^ Unbelievable that they can blanket violate everyone’s privacy in this manner.

———————————-

Just be sure to leave everyone flipping pre-sale YVR and GTA condos, or buying and flipping houses like stocks for tax free massive windfall gains alone CRA.

Right- go after that small time mom or pop who tried to make a few bucks online or tried by starting a business for a bit of extra income ….it’s hard enough to make it, now CRA wants it’s $200 in back taxes, plus 1500 in fines…

but the real estate speculators who have messed up markets and made massive windfall gains, they are all good. Sorry, it’s way to hard to track all those shell corporation and find those off shore buyers and locals who don’t claim so better drill the small guys.

Or is there a reason they are now fixed on paypal transactions? It truly is “Unbelievable that they can blanket violate everyone’s privacy in this manner”.

Isn’t there billions more to by made by going after undeclared rental incomes, pre-sale flipping, multiple house owners skirting the rules, living in a house (kind of) or having someone family for a year to flip for cool 500k tax free?

#117 Midnights on 11.15.17 at 5:08 am

Rental property…
http://charleshughsmith.blogspot.ca/2017/10/observations-on-wealth-income.html?m=1

#118 Dharma Bum on 11.15.17 at 6:54 am

#59 oncebittentwiceshy

So, which Benjamin Tal do we believe. The pre-OSFI legislation Benjamin Tal warning about recession or the post OSFI Benjamin Tal saying everything will be fine. Lol.
——————————————————————–
Economists are the consummate flip-floppers.

“We cling to our own point of view, as though everything depended on it. Yet, our opinions have no permanence;
Like autumn and winter, they gradually pass away.”

-Zhang Zhou

#119 Eyestrain on 11.15.17 at 7:05 am

A really REAL eye-opener from #64 Land of Oz (danke schon) :

https://www.linkedin.com/pulse/australias-economy-house-cards-matt-barrie/

Salient points:
#1 Aussies are as stupid as Canucks.
#2 The Japanese gov. owns 75% of all the ETF’s on the Tokyo exchange.

If you don’t have the time to read it all, read this:

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

SOS

#120 MF on 11.15.17 at 7:13 am

Tal is correct. Too many tailwinds for GTA real estate.

#27 Willy H on 11.14.17 at 6:17 pm

-Two words: political stability.

That is a huge factor you forgot about, and why a business like Amazon would want to open up shop in Canada versus France.

#121 Gravy Train on 11.15.17 at 7:17 am

#81 Nonplused on 11.14.17 at 9:23 pm
“Not sure what your point is? Are you trying to tell me there is a record number of stay at home moms and students? Well of course there is, they can’t get jobs.”

The point is simply that a person who is not looking for work and not available to work is not unemployed; that person is not in the labour force.

Here’s a table showing the latest figures for persons not in the labour force by desire and availability for work, age and sex.
https://www.bls.gov/web/empsit/cpseea38.pdf

I have a feeling, though, that these facts will be lost on you, that you won’t even look at the above link, that I’ve wasted my time trying to explain basic economics to you, and that you will continue to spout your nonsense to anyone willing to read it!

#122 Victor V on 11.15.17 at 7:29 am

‘Sort of sad’: Home Capital’s core mortgage business plunges 85% amid crisis fallout

http://www.bnn.ca/sort-of-sad-home-capital-s-core-mortgage-business-plunges-85-amid-crisis-fallout-1.915915

#123 Millmech on 11.15.17 at 7:45 am

#116 Dan t
Everybody cheers when they go after the few big fish(Panama Papers),but when they come after the small tax evaders it’s now a crime?
Go get em cra, and once they are done with them,they will be going after the flippers and those renting without claiming it!

#124 Fee-based Spiritual Advisors on 11.15.17 at 7:47 am

A number of you have asked me about the differences between an in-the-flesh spiritual advisor and a televangelist. In practical terms essentially nothing, but the Lord doesn’t pay His dividends in dollars and cents.

There are many other service providers, but before you go joy-riding with some “in-the-flesh” Jehovah’s, consider the costs vs benefits. Here at the Church of the Sacred Bleeding Heart Liberals we provide a holy service that includes marital advice, spare rod rental, and bereavement counselling.

Our annual fee is based what we think you won’t miss. Fees are tax deductible as both an investment expense AND a charitable donation. Let the accountants we harbor in our sanctuary show you how. If any of the Sisters (truly?) have lost a spouse or need marital advice please PM me (include a recent photo for security purposes).

If you wish to go it alone, and walk the fine line between self-directed and self-abuse, it’s up to you.

#125 crowdedelevatorfartz on 11.15.17 at 8:32 am

Just another in a long line of Realtors “working in the best interests of the clients….”

https://www.google.ca/url?url=https://www.theglobeandmail.com/news/british-columbia/bc-real-estate-regulator-suspends-realtor-for-predatory-practices/article36983772/&rct=j&frm=1&q=&esrc=s&sa=U&ved=0ahUKEwie2a2B2MDXAhVW3WMKHQvPBsIQFgghMAM&usg=AOvVaw1mdinDMbYEYKAuqboxzE9W

A slap on the wrist.

When are they going to start stripping these people of their licenses?

#126 Eyestrain on 11.15.17 at 8:33 am

A number of the poorly educated Brothers have asked if I would translate my works into Idjit. Here goes:

———–
Even the Papists have figered out the jig is up. Lookie here –>

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

Slap yer forehead and repeat after me:
“Whale oil beef hooked”

hope it helps…

#127 crowdedelevatorfartz on 11.15.17 at 8:37 am

Oh the poor poor BC Real Estate Council.
Swamped with work.

“the council said it was struggling to clear a mountain of public complaints and would expected to carry more than 700 open disciplinary files into the current fiscal year, which began on July 1….”

“increased fines from $10,000 to $250,000 after public complaints about fines being a mere “slap on the wrist”

#128 Mattl on 11.15.17 at 8:40 am

Well my friend just sold a large sfh with a suite in a cookie cutter development in Maple Ridge for 1.28mm so ya, contrary to the pink pumpkins guy, most properties under 1.5mm are selling well. At some point it has to blow up but as of right now the market is doing pretty well.

#129 crowdedelevatorfartz on 11.15.17 at 8:43 am

@#118 Dharma

” Fuzzy Wuzzy was a bear.
Fuzzy Wuzzy had no hair.
Fuzzy wasnt very fuzzy was he?”
– Author Unknown

#130 up $hit$ creek on 11.15.17 at 9:23 am

France ran out of money last Tuesday — and within days, so will the rest of Europe
Analysis: European countries are being forced to borrow well before the year ends — and sooner or later, that debt will catch up with them

http://business.financialpost.com/news/economy/debt-problem

#131 IHCTD9 on 11.15.17 at 9:45 am

#11 FOUR FINGERS WATSON on 11.14.17 at 5:16 pm
The average Canadian family, earning the average household income, is priced out of the market forever unless they can come up with some outside money. For my generation the average home was say a detached 3 bedroom house with a basement and a white picket fence. The new average Canadian family home is a 2 bedroom condo containing 2 adults and 1.9 kids. We blew it for our kids and grand kids. We sold out. Welcome to the 21st. century.
________________________________________

Several young 20-30 something couples with 1-3 kids bought their first homes down the road from me over the last couple years. Prices were in the 125-300K range. One of them is a 23 year old kid working in the trades – his mortgage payment is ~$600.00 /month all in. I estimate his gross household income at 80-90K per year.

He smiles and waves as he rides by heading for the trails on his brand spanking new KLX 450R.

#132 John of Grant on 11.15.17 at 9:52 am

Teranet/National Bank index hot off the press….

Oct. 1-month 12-month
2017 % change % change
National Composite 11 218.13 -1.0% 10.0%
6 city composite 222.11 -1.1% 10.6%
—————————————————-
Calgary (Weight) 8.3% 182.99 -0.2% 1.8%
Edmonton 5.2% 182.06 -0.7% 0.8%
Halifax 1.5% 143.75 1.3% 1.9%
Hamilton 3.7% 228.98 -1.8% 15.7%
Montreal 14.0% 160.26 0.4% 6.5%
Ottawa-Gatineau 5.7% 152.14 -0.3% 5.0%
Quebec City 2.1% 172.53 0.6% 0.6%
Toronto 34.6% 240.15 -2.8% 13.4%
Vancouver 19.5% 277.75 0.7% 12.0%
Victoria 3.2%199.12 0.1% 14.4%
Winnipeg 2.2% 204.21 -0.7% 0.1%

#133 IHCTD9 on 11.15.17 at 10:22 am

#27 Willy H on 11.14.17 at 6:17 pm

The GTA is a gridlocked soulless urban hellscape. The 400 series highways are constantly backed up due to volume exceeding capacity and one accident after another > 24 hours a day!

Public transit infrastructure is still 30-40 years behind cities like Hamburg, Frankfurt, Munich, Montreal and Chicago > cities that we should be comparing with T.O. (not Tokyo, Beijing, Hong Kong, Paris and London > T.O. isn’t even close to being in this world class category!)

Commuting has become a hellish affair negating any savings from buying a detached country-side box 50-100kms outside the 905. Again, public transit commuter trains are 30 years behind other similiar sized cities in Europe with the same population density as southern Ontario.

Strip malls, big box retail and fast food outlets are ubiquitous. The inner 905 is a dilapidated mix of 1970’s apartments and crumbling industrial sprawl. A gangster paradise. The outer 905 is poorly planned; developer-friendly, park scarce; and car-centred, in short, suburbia at it’s worst.

God help us if Amazon picks the GTA.

The South of France is cheaper!
__________________________________

Hehe – you’re not wrong, and it’s going to get worse even in the coming years. The typical share of total immigration the GTA receives is 30%, so as the Feds crank up the numbers I expect that the 30% will hold, and then slowly start to even increase as the ethnic enclaves take over the vast majority of the city and many new Canadians really don’t want to go anywhere else in the country other than these Canadian versions of their home countries.

As immigration is cranked up from 300K to 500K and beyond the GTA should expect a foreign influx of 1-1.5 MILLION new residents every decade.

LOL, the thought of that just makes me laugh. It also means my perch here 1.5 hrs East of the GTA will someday be way too close. Actually, it already is.

The difference in the GTA today compared to when I was in high school in the late 80’s is astounding. Back then, I actually liked Toronto. The thought of this much change happening again over the next 2-3 decades seems impossible. 50% increase in population over what they have now in 30 years?

Sounds like a mess to me.

#134 jess on 11.15.17 at 10:33 am

see how this connects with Litvinenko,

https://www.propublica.org/article/fighting-russian-mafia-networks-in-spain

#135 MediOgre on 11.15.17 at 10:37 am

—assuming they chose a bank mortgage and 25-year amortization.

I think this undoes Rob’s first point. Anyone that has 20% to put down would not take a mortgage like this and they currently don’t have to. You can do a 30 year with 20% down, but even more importantly, you qualify for a HELOC where your only payment obligation is the interest. This improves the cash flow calculation tremendously.

#136 Stan Brooks on 11.15.17 at 10:49 am

#120 MF on 11.15.17 at 7:13 am
Tal is correct. Too many tailwinds for GTA real estate.

#27 Willy H on 11.14.17 at 6:17 pm

-Two words: political stability.

That is a huge factor you forgot about, and why a business like Amazon would want to open up shop in Canada versus France.

——————————
Shop? What shop?

Amazon is building AWS base in Vancouver to provide infrastructure to host Canadian content due to country hosting laws.

It took them quite a while to build the initial infrastructure. As I know one of their AWS leaders, a huge ‘talent’ from Montreal who got kicked out of the New York office, I am not surprised at all.

The large second Amazon head quarter will not be in Canada precisely because of instability due to NAFTA renegotiation which could fail (if Trump wants to get re-elected he will withdraw from NAFTA, this will guarantee him reelection).
It was funny how the Canadian politicians wanted to attract Amazon to Vancouver and Toronto with cheap labour only!

Pathetic losers.

Here is amazon in ‘unstable’ France
https://www.amazon.jobs/locations/france

#137 Stan Brooks on 11.15.17 at 10:49 am

#120 MF on 11.15.17 at 7:13 am
Tal is correct. Too many tailwinds for GTA real estate.

#27 Willy H on 11.14.17 at 6:17 pm

-Two words: political stability.

That is a huge factor you forgot about, and why a business like Amazon would want to open up shop in Canada versus France.

——————————
Shop? What shop?

Amazon is building AWS base in Vancouver to provide infrastructure to host Canadian content due to country hosting laws.

It took them quite a while to build the initial infrastructure. As I know one of their AWS leaders, a huge ‘talent’ from Montreal who got kicked out of the New York office, I am not surprised at all.

The large second Amazon head quarter will not be in Canada precisely because of instability due to NAFTA renegotiation which could fail (if Trump wants to get re-elected he will withdraw from NAFTA, this will guarantee him reelection).
It was funny how the Canadian politicians wanted to attract Amazon to Vancouver and Toronto with cheap labour only!

Pathetic losers.

Here is amazon in ‘unstable’ France
https://www.amazon.jobs/locations/france

#138 Duke on 11.15.17 at 10:51 am

#67 Happy Housing Crash Everyone! on 11.14.17 at 8:35 pm
SHYSTERS make me laugh. The laws of economics never apply. Yeah some how against all logic prices will go up. Ok SHYSTERS why are there no bidding wars? Why are buyers refusing to close? Why are prices falling and houses still not selling months later? Prices went up on easy credit and will go down on higher interest rates and tighter lending standards. Garth is right prices will melt for years as rates melt upward for years.

Enjoy the housing crash SHYSTERS
Happy Housing Crash Everyone Everyone ! :-)

————-

Applause!!

https://www.google.com/url?sa=i&rct=j&q=&esrc=s&source=images&cd=&cad=rja&uact=8&ved=0ahUKEwiFxbXA98DXAhWMVRQKHWGCDhcQjRwIBw&url=https%3A%2F%2Fwww.engageselling.com%2Fblog%2Fdo-something-nowanything%2F&psig=AOvVaw28reyeXOEh41sHZ_DbnlTt&ust=1510847442809141

#139 HPI on 11.15.17 at 11:02 am

Vancouver: +0.69% compared to last month.
Toronto: -2.79% compared to last month.
Source: Teranet HPI.

Their strategist thinks more declines coming with new OSFI rules, particularly in the most expensive markets Vancouver, Toronto.

Teranet = waste of electrons. — Garth

#140 HCG on 11.15.17 at 11:14 am

#122 Victor V

I wonder if Warren Buffet already regrets putting money into Home Capital Group.

The stock did some weird things this morning:
Super hard down, then super hard up, in the space of one hour.

I wonder if analysts had a case of panic, followed by some new insights.
Or a buyer saw a bargain and plunked down a $4M buy order.

https://finance.google.com/finance?q=TSE

#141 Cheryl S on 11.15.17 at 11:16 am

“CMHC numbers show Hamilton-Burlington’s average home price at $550k in Q3 2017. The prediction is that the 2018 average will be between $535k – $585k.”
Show me where in Burlington you can find an average detached home for $550k and I’ll show you a unicorn.

#142 Alberta Guy on 11.15.17 at 11:18 am

#100 Smoking Man

RE: Beach … Try here

https://www.youtube.com/watch?v=Ln9PGi1ZXks

#143 Stan Brooks on 11.15.17 at 11:21 am

#27 Willy H on 11.14.17 at 6:17 pm

GTA has no infrastructure to handle 2nd Amazon headquarter.

Where will it be located?
How will the people commute? Where will they live?
In basements?
Bhahahahahahaha.

Demographic pressure itself is nothing, people need to have money in order to support higher prices.
And they are already broke.

Keep dreaming folks. We at least are getting the permission to smock weed for sure, do you know that all Amsterdam prostitutes will relocate to Toronto along with the red lanterns?

#144 Stan Brooks on 11.15.17 at 11:24 am

smoke weed
https://www.youtube.com/watch?v=KlujizeNNQM

#145 IHCTD9 on 11.15.17 at 11:29 am

#136 Stan Brooks on 11.15.17 at 10:49 am

It was funny how the Canadian politicians wanted to attract Amazon to Vancouver and Toronto with cheap labour only!

Pathetic losers.
_________________________________________

That’s where it’s headed though. Must’ve just slipped out. At least in the GTA – been on the slide for near 2 decades already in my industry. What used to be a great paying white collar bottom line affecting position 20 years ago, is now done by a fresh young new immigrant for under 20.00/hr with no decision making power whatsoever. Everywhere I go in my engineering office visiting travels in the GTA I see the same thing over and over, and over.

These folks get anywhere from 6 months to about 1.5 years before they’re out the door. If it wasn’t for LinkedIn, I’d probably never see these buyers again as they are not, and probably never will be “industry names” that everyone knew and talked about like back in the 90’s and early 2000’s. They’d just disappear into the fog with no solid connections to the industry.

#146 rainclouds on 11.15.17 at 11:34 am

In the unlikely event HHCE thinks the “dirty lying shysters” reside only in Ont, I give you BC Commissioned House Sales malfeasence

http://www.cbc.ca/news/canada/british-columbia/licence-suspended-for-b-c-realtor-accused-of-predatory-rent-to-own-scheme-1.4402747

#147 The real Kip on 11.15.17 at 11:38 am

“#70 Fiendish Thingy on 11.14.17 at 8:38 pm
#23 Real Kip-

Get your calculator out:

That 25% decrease more than erased the 33% increase…

33% decrease erases a 50% increase…”

You sound like every other idiot in here spouting the same drivel over and over. Head back to the basement and wait for your commander to tell you it’s safe to come out!

#148 Stan Brooks on 11.15.17 at 11:39 am

#113 Howard on 11.15.17 at 4:07 am
Just wait until early next year when Amazon announces that it has selected Toronto for its second HQ.

Woohoo, my folks own a SFD in the 416. Come on money-launderers and government enablers. Make my Mom and Dad rich!

——————–

You mean they intend to rent their basement (all 300 sq. feet of it) to 5 needy Amazon engineers?

And the garage to some other 2?

As for the prices in Toronto, they are already higher than Seattle. Toronto is already too price for the poor Amazon employees.

#149 IHCTD9 on 11.15.17 at 11:46 am

#76 People are Strange on 11.14.17 at 9:00 pm

Look at what that money can buy in 99 % of the world.

____________________________________________

Absolutely no one is doing that out there.

#150 James on 11.15.17 at 12:21 pm

#109 NoName on 11.15.17 at 12:33 am

#100 Smoking Man on 11.14.17 at 11:14 pm
Downtown not my thing anymore. Let the kids have it.
No more flirting no more fun. Faces glued to the dumb phone. With a speed dial to an attorney.
Got to find a beach somewhere any suggestions?
—-
Croatia.
______________________________
Defiantly Croatia, Liskamen Beach, Brela, Dalmatian Coast, Croatia

#151 Duke on 11.15.17 at 12:43 pm

#113 Howard on 11.15.17 at 4:07 am
Just wait until early next year when Amazon announces that it has selected Toronto for its second HQ.

Woohoo, my folks own a SFD in the 416. Come on money-launderers and government enablers. Make my Mom and Dad rich!

———————–

Are you out of your mind? Do you really think Amazon will choose Toronto over other cities in US? There will be lots of travelers between these two HQ’s, and do you really think they want to have international travel instead of domestic? Many of their current employees will have to relocate to HQ2, and do you think they don’t mind relocating across the border with their family? Ridiculous housing price is another killer. There is no real benefit of having HQ2 in any Canadian city.

#152 crowdedelevatorfartz on 11.15.17 at 12:48 pm

@#145 rainclouds

Posted at #125 ( 6:32am Vancouver time)

:)

#153 Victor V on 11.15.17 at 1:07 pm

‘Market forces will always prevail’ in housing market: Ontario finance minister

http://www.bnn.ca/market-forces-will-always-prevail-in-housing-market-ontario-finance-minister-1.916114

#154 'War is coming ' on 11.15.17 at 1:37 pm

Nice ! Thanks for the heads up!

I’m all stacked ! Gold bars , silver bars, canned goods esp tuna !!!

#155 AGuyInVancouver on 11.15.17 at 2:01 pm

#95 When Will They Raise Rates? on 11.14.17 at 10:54 pm
Attention all online business owners:

I just received this in my inbox… Seems the jackals in Ottawa are looking in every nook and cranny to find every last dime they can squeeze. No rock will be left unturned. I now fully expect an audit in the near future. I hope all of you have your books in order… They’re going back all the way to 2014:…

Bastards.
_ _ _
Why, because they want to see who has been evading taxes? That’s their job. Maybe if Harper hadn’t cut the GST the government wouldn’t be forced to go scrabbling through all this stuff, but he did.

#156 Glengarry Girl on 11.15.17 at 2:03 pm

#122

Why is this SAD news – they were Shysters, not playing by the Rules, part of the corrupt Housing Bubble blowers…not feeling sorry for them, hoping to read MORE stories like this…Real Estate Agencies next please

#157 TheDood on 11.15.17 at 2:20 pm

#100 Smoking Man on 11.14.17 at 11:14 pm
Downtown not my thing anymore. Let the kids have it.
No more flirting no more fun. Faces glued to the dumb phone. With a speed dial to an attorney.

Got to find a beach somewhere any suggestions?
________________________________________

Smoking Man, if you’ve never been, try Goa, India. Without a doubt one of the most under-rated beach holidays on the planet. Is a long trip to get there, but costs pennies once you land. Easily the most relaxing holiday I’ve ever had, good food, awesome beaches, cheap beer, cheap smokes, cheap hotels. The locals have not allowed the big american hotels anywhere near the beaches. Oh, and the rental scooters come with cup holders – not for coffee – but for beer!

I’ve been there more than a dozen times and it tops all other beach holidays, including Hawaii, Mexico, anywhere in Caribbean. My wife and kids have strict instruction to spread my ashes on Arambol beach upon my demise.

If you like beaches, drinkin’, and smokin’, Goa is your heaven!

Cheers!

TheDood.

#158 Smartalox on 11.15.17 at 2:46 pm

@When will they raise rates #96:

PayPal has been ordered to disclose to the CRA. The CRA is (by law) obligated to keep the information that is disclosed to it, confidential.

There is no public disclosure, so any right PayPal’s clients may claim to privacy, is not violated. Same goes for ‘investors’ who may have ‘flipped’ pre-construction condo assignments, and who may not have declared income from such activities.

CRA won’t publish your birthdate, but judgements typically ARE made public.

#159 rainclouds on 11.15.17 at 3:02 pm

@#145 rainclouds

Posted at #125 ( 6:32am Vancouver time)

:)
—————————————————————
Never a bad thing to shine as much light as possible on the odious nature of the ETHICALLY CHALLENGED SCUM that resides in the bowels of the (no longer self regulated) BC RE industry

#160 Jackie on 11.15.17 at 3:17 pm

#120 MF on 11.15.17 at 7:13 am

Tal is correct. Too many tailwinds for GTA real estate.

#27 Willy H on 11.14.17 at 6:17 pm

-Two words: political stability.

That is a huge factor you forgot about, and why a business like Amazon would want to open up shop in Canada versus France.

Political stability in France is rock solid, great country with rich history and bright future. Perfect place for Amazon and Jeff Bezo.

#161 Entrepreneur on 11.15.17 at 3:22 pm

#95 and #96 When Will The Raise Rates…anytime anyone makes money that money/income has to be declared. CRA is being nice just to go back to 2014 other businesses have to go back seven years. We even have to keep records for seven years after closing shop with all the proper receipts in order. And all those emotions that go with it, hard on a person. And the sad stories.

Would be nice if the CRA started to help the entrepreneur figure things out so they could continue.

Wts, with the CRA displaying a no tolerance attitude the underground market is strong and will get stronger showing no paper/internet trail.

#162 NoName on 11.15.17 at 3:32 pm

#149 James on 11.15.17 at 12:21 pm

#109 NoName on 11.15.17 at 12:33 am

#100 Smoking Man on 11.14.17 at 11:14 pm

Downtown not my thing anymore. Let the kids have it.

No more flirting no more fun. Faces glued to the dumb phone. With a speed dial to an attorney.

Got to find a beach somewhere any suggestions?

—-

Croatia.

______________________________

Defiantly Croatia, Liskamen Beach, Brela, Dalmatian Coast, Croatia

Many vacations in Brela some relatives there. My old man would take me down one week in winter. Uncle owns house there, i would mind spending winters there, in my opinion, september is the best time to be, not too many people around.

i remember walking for miles just to get to this place here ( https://imgur.com/a/xdOAE ) to collect snails and shells to make “brudet” fish stew in white wine.

I had this small cooler and i would pace up and down beach from “soline” to end of the “rat”, where that rock with two trees is, i was believed it or not I was selling ice cream.

No word of the lie here.

#163 Newcomer on 11.15.17 at 5:11 pm

#128 Mattl on 11.15.17 at 8:40 am
Well my friend just sold a large sfh … for 1.28mm so … most properties under 1.5mm are selling well.
———–
Your sample size does not inspire confidence in your conclusions.

#164 TheDood on 11.15.17 at 5:38 pm

#128 Mattl on 11.15.17 at 8:40 am
Well my friend just sold a large sfh … for 1.28mm so … most properties under 1.5mm are selling well.
———–
Your sample size does not inspire confidence in your conclusions.
________

There is an endless supply of financial illiterates in YVR. Every single person I know here has bought RE recently (within last 1-3 years) or is looking to buy in near future. Nobody interested in listening to anything that questions the wisdom of RE purchase. It always goes up here. Let’s all buy houses and be happy!

#165 westcdn on 11.16.17 at 3:19 pm

https://dailyreckoning.com/change-habits-youre-old-stubborn/

“Like, one person can’t be wrong” – Kelly Ripa, commenting on celebrity compliments.

Financial things have always interested me – lots of personal reasons but I never want to be poor again. It is hard not to sell your soul for a few bucks. It just costs a ton more today (sarc).

I transferred in kind shares from my margin account to my TFSA several months back. I have split my Helco into personal and business sub accounts to refute CRA prying. I have been aggressively buying down my Helco balance while minimizing selling my long Cdn equities. Fortunately, I have greatly been assisted by some take outs of my junior Cdn equity holdings – it of kind of sad because they were good Cdn companies being bought by foreigners and taken private. I am preparing for interest rate increases and the resultant recession. Math does not lie; only the users. It is simple – what happens when the plebs can’t borrow more? Answer – lots of trouble.

I bought some call options on HXd today as insurance. I don’t have any intentions to selling my long positions or adding to them. Be prepared to take a knock so you can rock so I hope.

There is a house on my street for sale, similar to mine, that has sat vacant for about a year. I think the house is superior to mine and a foreclosure. I noticed the asking price has been dropped to my 2017 assessed value. I would dare say RE prices in Calgary are falling but not collapsing.

Bitcoin, my antithesis, continues to ramp up defying me. “Danger, Will Robinson” – Lost in Space. Fear and greed is all i can say. The monopoly ownership is my best explanation. http://www.businessinsider.com/927-people-own-half-of-the-bitcoins-2013-12