The challenge

Okay, dogs, here’s the question: could you find $400 a month, if you had to?

Apparently 82% of Canadians cannot. A bank survey this week discovered a hundred dollars a week is beyond the capacity of the vast majority of people – they spend virtually everything they earn. No surprise that 79% of the folks CIBC queried said they worry about not having enough money to retire on. Which they should. They’re pooched.

This is what happens when people pay stupid amounts of money, and many multiples of income, to get a house. Insane real estate prices have bred swelling rents, low vacancy rates, elephantine debt and what’s obviously turning into a potential retirement crisis. Young adults are straining to afford leases or dangerously over-reaching to buy property. Boomers are sitting on small mountains of windfall equity, but immobilized by not knowing where to go, with scant liquid assets and crap pensions. Employers in T.O. or YVR can’t find talent, because kids can’t stay. Real estate is our addiction, our obsession and our disease. It’s killing financial stability.

So, what does Ottawa do?

“All Canadians need and deserve housing that is safe and affordable,” the prime minister said on Wednesday as he committed $40 billion to a national housing program. Nice words. But “all Canadians” ended up being the 6% of people that social agencies say are under-housed. Over 300,000 families will eventually be receiving $2,500 to pay their rent. Many billions will be spent building about 100,000 units of housing with lease costs geared to income. At least 25% of the $40 billion in spending will be gender-based going to “to projects for women, girls and their families.” Homelessness will be targeted.

Worthy goals? Sure. Everybody deserves a roof.

But forty billion is a pile of money, and spending it won’t bring property prices down or boost the incomes of families trying to get some. Giving lower-income people free housing money is generous, but might end up putting more pressure on rents.

Meanwhile, mortgage rates are rising (the Fed indicated again this week that the next US hike comes in a few weeks), and borrowing rules are tightening. This means even as real estate values inexorably decline, the financial burden of buying and owning will remain about the same. Insurance premiums and property taxes are rising almost everywhere. AirBnB is sucking off rental inventory. Taxing scant empty houses or mythical foreigners has done nothing but allow politicians to look like they care.

Nope. Ain’t working.

So here’s our challenge. As the Number One blog in Canada on real estate bitching, financial debauchery, hormonal behaviour and breed prejudice, we have a duty to set T2 straight – before any of the $40,000,000,000 is actually spent. Are there better ways to deflower housing so average families can once again afford average homes? Raise rates? End mortgage insurance? Nix the capital gains exemption? Bigger down payments? Thirty-year loans? What?

Canada needs you, blog dogs. This could be the defining moment of a generation. Or at least until Thursday night. Every comment will be sent directly to the prime minister. Trust me. I know where he lives.

422 comments ↓

#1 Nick on 11.22.17 at 7:06 pm

What a waste of money

#2 Zapstrap on 11.22.17 at 7:07 pm

I found 65 cents in the coach last night before the missus did.

#3 FOUR FINGERS WATSON on 11.22.17 at 7:09 pm

Every comment will be sent directly to the prime minister. Trust me. I know where he lives.
……………………………

Not gonna help…….Send two burly men with a stick.

#4 Crazy millennial on 11.22.17 at 7:11 pm

Man up Mr prime minister.

#5 Dolce Vita on 11.22.17 at 7:11 pm

See chart, second half of 1981.

https://www.theglobeandmail.com/real-estate/the-market/remember-when-what-have-we-learned-from-80s-interest-rates/article24398735/

#6 common sense on 11.22.17 at 7:11 pm

Interest rate hikes?

Janet sounded a wee little iffy in the released minutes today….

US must be booming so much a .25 rate hike is STILL questionable! What a joke.

#7 None on 11.22.17 at 7:13 pm

As you say: no one is entitled to own a house but everyone deserves a place to live. This means we need to reduce rents. Thing is we need to reduce rents across the board and the only way to do that is to ultimately inject fear into the market. Lots of people need to lose a whole bunch of money.

How one does it…. does it matter that much? start capital gains on housing starting in 2018. Hell, let’s throw home owners a bone and even give them capital losses out of it. I think is the grand scheme and in the world of abundant TFSA and RRSP room that won’t be a huge bite in the grand scheme of things.

#8 Karma on 11.22.17 at 7:14 pm

Link to press release:

http://cibc.mediaroom.com/2017-11-21-Why-is-it-so-hard-to-save-Most-Canadians-say-they-need-to-save-more-but-arent-making-it-a-priority-CIBC-Poll

#9 Jimmy on 11.22.17 at 7:14 pm

Waste of time.
Won’t change anything.

#10 juno on 11.22.17 at 7:14 pm

simple

Government should stay out of interference and let the market balance itself.

1) No more CMHC
2) let the banks and insurance companies take the full grunt of the risk, they will determine what people can and can’t afford. They will also set rules and credit checks to determine who and how much of a loan a person can get.
3) Off shore investors must declare xfer of money to their home countries when buying a home.
4) Foriegn households cannot get Canadian benefits, especially if they have income from a foriegn source funding them

#11 Bottoms_Up on 11.22.17 at 7:15 pm

Rent price controls on ALL units. Abolish flipping pre-build condo contracts. 20% down payments for ALL purchases.

#12 VanDoug on 11.22.17 at 7:16 pm

I think that CMHC should be wound down with no new coverage provided. The RE market will, sadly, need to float based on supply and demand with no gov’t intervention to protect or subsidize it. No more home reno tax credits, or other forms of subsidy to the industry. The only intervention that I might get behind is efforts to slow a rapid decline in price. If the CRA starts looking at home sales and ensures that the folks who are flipping are paying the appropriate taxes, that may further cool the greed.

#13 FOUR FINGERS WATSON on 11.22.17 at 7:16 pm

The housing bubble has resulted in a misallocation of capital, depriving growth in business and industry and retirement savings. But the government wanted this, they created the bubble and they nurtured and encouraged it. A hard rain is gonna fall………..

#14 Royal City Dweller on 11.22.17 at 7:17 pm

“As the Number One blog in Canada on real estate bitching, financial debauchery, hormonal behaviour and breed prejudice (…)”

“The final winner of this poll wins $100 CASH and the 2 runner ups each get $50.
And of course you get bragging rights.”

The Greater Fool 91%
Canadian Couch Potato 10%
Gail Vax- Oxlade 6%
etc.
(https://www.modestmoney.com/top-canadian-finance-blogs-2013-final-round)

100 bucks! How the heck are going to invest so much… cold cash… ??

#15 Mike in Airdrie on 11.22.17 at 7:17 pm

Nix the capital gain exemption on primary residence and you kill the market overnight.

Or how about taxing public servant’s pensions over $50,000 a year at 75% and diverting that tax money to pay for this $40B spending spree.

#16 Caleb Landry on 11.22.17 at 7:18 pm

Do whatever they do in Germany.

#17 will on 11.22.17 at 7:19 pm

Already saved $400 per month and more. Before the end of the year will save hopefully another $2000. Won’t quite have the 5500 ready for tfsa Jan 1st. No problem. Coulda, woulda, shoulda saved more but unfortunately my beer and scotch bill is even bigger than my grocery bill.

#18 Reader on 11.22.17 at 7:20 pm

Cap CMHC mortgage insurance at no more than the national average housing price.

#19 Fran Deck Jr. on 11.22.17 at 7:21 pm

Canadian real estate has become unaffordable and a “bubble” for a couple of reasons … low interest rates is one of them … but the real reason for the inflated and unrealistic cost of owning a home in shit-holes like Toronto would be the loop-holes which allow unsavoury creeps to launder money through the purchase of real estate in this pathetic third-world banana-republic quasi-communist corrupt wasteland.

Everyone knows that Canada is one of the top preferred destinations for dirty money and everyone knows that this new “housing strategy” is another make-work project for the mob.

I hope this helps.

#20 Middle class is pissed off on 11.22.17 at 7:22 pm

Middle class is pissed off who earn just above the Government called lower-income. And they are doing nothing for the middle class. Lower-income people get everything and they don’t need to work on documented jobs (business and cash is okay). While middle class salaried people are now having difficulty even paying rents as they are going higher after every few months.

This $40 billion is for those who are not contributing to the economy of this country (are already getting all the Government subsidized services) while doing cash jobs and running businesses as well. The definition of low-income need to be changed. If someone can afford multiple high-end cars and have expensive homes, how that person can be under low-income category.
Many people will simply leave their jobs to get free university tuition for their children, get all the Government help and at the same time earn money using non documented ways.

#21 Patricia Miles on 11.22.17 at 7:23 pm

I vote for down payments of 25 per cent of the assessed value of the house. Further, no more CMHC insurance.
If homeowners want insurance to pay off the bank in case of failure to pay their mortgage, let them purchase private insurance at competitive rates. AND it should be mandatory that every mortgage lending institution must own 1 quarter of a private insurance company that insures these mortgages.
Then the banks and credit unions would practice responsible lending.

#22 Sockeyemoon on 11.22.17 at 7:23 pm

Look at the population density (people / sq km) in our most overpriced markets and compare that to what they could be…
Vancouver: 1,650
Toronto: 2,650
Paris: 3,550
London: 5,100
Beijing: 11,500

Here’s an idea: Tax incentives and encouragement for builders who tear down huge energy inefficient old homes on enormous lots and then build high efficiency homes at double or triple density. Supply and demand will drive the prices down to more reasonable levels.

#23 Prophecy on 11.22.17 at 7:24 pm

Torontonians living in million dollar bungalows, Vancouverians living in $5million dollar condos,
But not an extra $400 to spare?
That is not poverty….That is living beyond your means.
Real poverty is what is going on down in the First Nations reserves north of Ontario and Quebec.
BTW Garth hasn’t updated his twitter feed, that I’m seeing April Brockman…Oh man how I wish I had an extra $400 to spend on her on a dinner date.

#24 Dee on 11.22.17 at 7:24 pm

Higher downpayments, higher rates, less cmhc

Credit markets ruined the country

#25 N on 11.22.17 at 7:26 pm

Shared this before – sharing it again….

There is a ton of money that is flowing into the Toronto market from overseas, both through foreign buyers, and through people who are now permanent residents or citizens, who have access to capital from overseas.
Realtors have resisted efforts to get the government to collect data about this (foreign buyers). In Vancouver, real estate representatives said foreign buyers were five per cent of the market. When the government went out and collected the data, it was closer to 13 per cent of buyers. So we have seen that real estate representatives are not exactly being open and candid when it comes to their estimates of foreign buyers….
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/

#26 Property Accountant on 11.22.17 at 7:26 pm

1. Make it easier for builders to develop houses by
a) relaxing zoning restrictions
b) abadoning development charges (20$ / sq.ft)
c) working with Building Associations to remove “red tape”
2. Subsidize builders in development costs rather than sending free money to poor ones – (so they dont spend it on booze and hike up rent prices of existing supply)

Lets start with those first.

#27 espressobob on 11.22.17 at 7:27 pm

Putting some of this money into continuing education in the form of a grant might help some individuals get a job. In the 1970s the government also paid part of a employees wages for a period of time so they could learn on the job, without stressing the employer.

Maybe I’m dreaming and out of touch, but it just seems better than a handout.

#28 Carlos El Magnifico on 11.22.17 at 7:27 pm

Punitive speculators tax.

#29 Hugh Jassel on 11.22.17 at 7:27 pm

You said it in your first three suggestions – “Raise rates? End mortgage insurance?

This whole bubble is due to the government artificially suppressing rates and backing high risk mortgages.

The capital gains can be left alone as we actually need more vehicles that reduce the amount of revenue for the government to waste on their vote bribing schemes

Let the actual lenders decide how much risk tolerance they are willing to accept and at what cost of money.

Problem solved after an inevitable deflation of overvalued home prices – which I’m fully aware is political suicide. It’s time for Canadians need to hear the truth.

Money needs to cost money and a lender has to earn a reward for their risk – not have the over meddling government continue to play politics which has resulted in this screw up in the first place.

End rant.

#30 Paul on 11.22.17 at 7:28 pm

Don’t ever put the Conservatives in charge of Canada again!

#31 CMHC Needs to leave the game on 11.22.17 at 7:28 pm

Why is CMHC even in business anymore? It was created to help WWII vets buy a house after they returned from the war. Now it’s mission is to stoke the ponzi scheme of modern real estate. If the banks aren’t willing to shoulder the risk of giving money to morons to buy houses then why are they allowed to give money to morons to buy houses they can’t afford?

#32 crowdedelevatorfartz on 11.22.17 at 7:28 pm

Raise rates? End mortgage insurance? Nix the capital gains exemption? Bigger down payments? Thirty-year loans? What?

+++++

All of the above.
But it takes a “selfie”less Prime Minister with testicles ….not fashionable socks to do whats right.

$40 Billion of other people’s tax money. Trudeau couldnt care less…….
Another nail in his political coffin.

#33 john blundell on 11.22.17 at 7:28 pm

end CMHC
20% down
25 year loans

#34 Debtslavecreator on 11.22.17 at 7:29 pm

To Rt.Hon JT
To solve housing :
-end all CMHC/NHA insurance
-end interest deduction for rental homes
-eliminate all housing credits such as property tax relief and grants
-minimum Down payments of 10% from own sources
-end CDIC deposit insurance and provincial CU deposit schemes
-spec tax of 100% of any cap gain from housing is taxed as salary if bought and sold within 36 months
-foreign owners pay a 50% property tax surcharge that can be refunded against income tax paid in Canada for that year
-complete reform of the tax system: eliminate 95% of all credits and deductions / no income tax on first 50k of income / income defined as all sources including net rents& cap gains and divs etc with tax of 10 % on all income 50-100 k, 15 % between 100-200k, and 22-25 % above 200 k, raise HST slowly up to 18-19% to be shared between 3 levels of govt / max Corp tax rate of 10% on profits with passive income tax of 15-20% on passive income above 50 k
-then slowly cut govt spending and move all govt staff onto DC pension
-a 10 % health care estate tax on all assets including joint assets and insurance proceeds above 1M to be shared between feds and Provincial govt
-eliminate most local zoning and development laws and stress modest homes on modest lots and freehold open concept townhomes / dramatically improve local building codes to improve the quality of housing/ eliminate green belt legislation
-bank of Canada to print to more than 2 % of nominal gdp to be credited directly to households where household incomes are under 100 k via 0 coupon strip bonds that are cancelled by BofC on maturity

#35 bigtowne on 11.22.17 at 7:29 pm

The Japanese have a “vacancy problem”. Due to their falling birth rate in less than a couple of decades the empty houses will swell to 20% vacancy. There is a cheaper and more humane way to handle the crushing housing crisis. Stop the UBER immigration….go back to Pierre Trudeau’s numbers of 50,000 per year and problem solved without any valuable tax dollars required.

#36 WillD on 11.22.17 at 7:29 pm

Here are my best thoughts…they’re not great:
1. If multiple homes are owned simultaneously, the owner must declare which home receives the tax free gains upon selling. All others will be taxed like regular income. No hopping from one “primary” residence to the next.
2. Non-citizens must be at least 18 years old and are limited to 1 property.

#37 Looney Baloney on 11.22.17 at 7:30 pm

My to-do list for Thursday:
1. Quit job.
2. Sex change
3. Find the line to stand in for my share of the handout.

$2,500 for rent? Why should the rest of us even bother when gubment just steals more than half of what we make through inflation and taxes, then uses it to discriminate against us male working stiffs even more?

#38 Steve on 11.22.17 at 7:31 pm

What about limiting property tax to the actual amount used to buy the property and not some number from a model. Pay too much and it will hurt until you sell.
It would remove volatility from your tax bill.
The principal residence exception should also be removed. This would make people look at investment

#39 akashic record on 11.22.17 at 7:31 pm

Mr. Trudeau, it’s not your money, you didn’t work for it.

You never asked the “donors”, but the answer is no *** way.

Tax revolt.

People who actually taxed to pay for this should hold back their taxes.

What are you gonna do? Jail the providers?
Are you going to pay the bills from your trust fund?

#40 Eco Capitalist on 11.22.17 at 7:31 pm

Nix the CMHC and revisit rules for housing co-ops. When I attended university there were many and I thought them a fantastic idea for keeping rental costs down. Now I live in a bigger city and there are virtually none to be found.

#41 Lisa on 11.22.17 at 7:32 pm

Trudeau’s idea is past due. The distortions that have driven real estate prices up in major Canadian cities are long term and structural — not due to low interest rates alone–unless viewed from a global perspective.

If we are living in a global society, without proper checks and balances on huge pools of international money, then we have to be ready to tax those pools accordingly and use some of it to build low cost housing for those who have been displaced.

There is no “market solution.” Government intervention, in this case, is clearly the way to go.

Sorry Garth. You are not going to get much support for your point of view.

#42 Tbone on 11.22.17 at 7:33 pm

All someone has to do is put their hand out and the liberal government
Will gladly pad it with your money.
Wait until all the boomers retire and pay half the tax they pay now .
All the free and subsidized social services are going to feel the pressure.

#43 Harry Heuser on 11.22.17 at 7:34 pm

The house price genie got let out of the bottle with the last several years of low rates. T2 and gang failed to learn from history of other economies and put in early barriers to ridiculous debt leverage. But you’ve said all this. The genie can’t be put back in without unintended consequences. One has to let the market solve it as ugly as it may be. T2 has to resign. It’s a national vote of non-confidence. HH

#44 Toadweevil on 11.22.17 at 7:34 pm

Tax Speculators

#45 Rufus on 11.22.17 at 7:35 pm

Government should stay out of industry. Instead, it should focus on EFFICIENT AND EFFECTIVE GOVERNMENT. Its just so sad that Billions of taxpayer dollars are wasted by archaic systems and entitled bureaucrats who just don’t care about making things work well. Can the new generation implement a system whereby bureaucratic decision-makers actually become culpable?

#46 Steven on 11.22.17 at 7:35 pm

1. Increase interest rates already!!
2. Increase them again!
3. Limit foreign investment.
4. Reduce greenbelt limitations.
5. Incentivise development of high-density multi-unit res.

#47 The real Kip on 11.22.17 at 7:35 pm

Let me guess, the $40-billion is contingent on a liberal victory in the next election.

#48 Todd on 11.22.17 at 7:35 pm

How about we tackle the delusion that home ownership is the path to becoming wealthy. 70% of Canadians own a home yet 1% of Canadians are considered wealthy. The math does not add up.

Another fix is to give buyers every bit of information they need to make an informed decision about real estate purchases. Canadian Zillow please.

#49 Hiding On the Backstreets on 11.22.17 at 7:35 pm

The U.S. Fed Reserve raising rates in December and Canada following suit? We’ll see….Jim Rickards has an interesting take on the Fed, and has a decent track record from his alternative models. Gives the Fed a 35% chance of raising.

https://dailyreckoning.com/markets-are-trapped-in-zombie-like-state/

As far as the Libs’ new socialist housing plans, what could go wrong. Free market my arse. Take our money, Libs. It’s yours anyway, right?

Who wouldn’t trust T-2 and More-No with more of our tax money? Maybe they should invite all the homeless into their mansions and trade selfies.

82% of proudly independent Canucks can’t scrape $800 a month together in a pinch? I agree, part of this financial jackpot is because of their house chewing up so much disposable. How about the consumer society where people just have to have more “stuff”?

Check out the parking lot at the local Costco lately?

#50 Virtue on 11.22.17 at 7:35 pm

Go back to fault divorce so woman cannot divorce their husbands, break up their families, have children out of wedlock, and get 25% of $40,000,000,000 of free housing to make their wrong behaviour an easy option.

#51 Dobermanduke on 11.22.17 at 7:37 pm

Sounds like an election ploy.

Ending CMHC should do it

#52 not 1st on 11.22.17 at 7:38 pm

I vote for the wax statue. At least I know that version of T2 wont really try to do anything this stupid.

#53 Rents will rise on 11.22.17 at 7:39 pm

Landlords will simply increase the rent starting 2020 (or sooner if they’re greedier) and absorb the extra cash to low income families that Ottawa is spending.

If they really wanted to create affordable housing, they would put a lid on immigration in order to protect those that are already in Canada and cannot find housing.

Convert government owned land into building sites and sell building lots at set rates. Drive private land assemblers out of business and end the competition for building land which should be a public domain to begin with. The lack of RE laws and regulations in Canada is what created this mess in the first place!

#54 Steve guylee on 11.22.17 at 7:40 pm

Affordable housing will occur when the bubble bursts.
Our housing bubble is a result of easy subsidized credit by cmhc and financial illiteracy.
If the government wants more affordable housing it should work at all levels to reduce the red tape involved in building additions, new builds, multi-residential and maybe offer tax incentives.
The government needs to get out of the housing business.

#55 just a dude on 11.22.17 at 7:41 pm

Garth,

I think a simple solution is to somehow force the banks to return to their much more prudent ways and ultimately not permit mortgage values in excess of 3x family income, all while factoring in the family’s available credit from all sources. These are the constraints my wife and I were subjected to 20 years ago when we bought our first home. They certainly helped keep us in line financially, and we were still able to buy a respectable home on a single income at the time.

Thanks for the opportunity to share my experience and what I feel is the best way forward to deal with this untenable situation. $40 billion spent as proposed is insane in my opinion. There has to be a better way forward than harming our future generations with even more debt piled onto our nation’s existing growing mountain of the stuff. At some point Mr. Trudeau will have to come to realize that the budget cannot “balance itself” as he stated during his campaign. It needs some restraint and prudent governance on the part of his government.

#56 Real estate only goes up on 11.22.17 at 7:42 pm

Real estate is all Canada has. That wonderful zero sum game creating spin off gdp. T2 needs to look like a champ, keep the economy going, and find a home for the illegal immigrants since we can’t deport them.

Typical govt… Leave the mess for the next dude. Inevitably the general population will be the ones to suffer.

I think I’m gonna go buy some new condo developments now!

#57 Cow Man on 11.22.17 at 7:43 pm

Sir Garth:

Close down all hospitals and introduce Ebola to the general population. Reduce the population by 40%. Lots of houses for those left, at really cheap prices. Makes as much sense as adding $40,000,000,000, to our Federal debt. Death by debt may be almost as bad as Ebola.

#58 acdel on 11.22.17 at 7:43 pm

Ok mills, now is your time to step up, prove us wrong that you are not a bunch of spoiled meatheads only looking after yourselves.

Can us all you want, (you probably will not understand that expression); criticize the Gen-exers after what we have gone through and deserved what ever response you get.

That is not the point, Garth asked us to work as a team so let us do so, the previous two blogs have had incredible replies with very smart ideas; time to work on this and take back what is ours, politicians are so manipulated by those who laugh at us. Is there anybody out there that understands what I/we are asking??

#59 Freebird on 11.22.17 at 7:44 pm

“…could you find $400 a month, if you had to?”
———————

Yes. I took the advice by a friend in the past to rework our payments based on rates going up by 1-2% and plan accordingly. Being self employed usually means early lessons in cash flow.

The harder we worked (and the more we learned), the luckier we got. And there has been challenges.

#60 Keith on 11.22.17 at 7:44 pm

Affordable home ownership in Vancouver is history, perhaps for a very long time. For the renters, a mere 5% of the housing stock is publicly owned, versus 10% in New York city, and 30% in Sweden. Best to get on with investing billions in non market rental housing, if we want a truly diverse population.

They’re working wonders in Whistler, a very expensive place with a focussed program.

https://www.cmhc-schl.gc.ca/en/inpr/afhoce/afhoce/afhostcast/afhoid/fite/hotrfu/hotrfu_005.cfm

#61 ZIGGY on 11.22.17 at 7:45 pm

Speculation tax: Tax capital gains minus proven improvement costs at regular income tax rates on all transactions. Prevents tax avoidance from contractors working for cash and shuts down speculation loopholes.

#62 Buyers have no rights on 11.22.17 at 7:47 pm

First, make real estate statistics open. (I know this is a provincial thing but it is why prices in N.S. are more reasonable than elsewhere.)

Make a law separating buying agents from selling agents. In other words, when I buy a house, my agent owes it to me to give me proof of why the house is worth a certain amount. When is the last time an agent showed similar properties to a buyer? They simply spout a number that they think will work. If I negotiate anything through a lawyer, I need a separate lawyer to advise me. Who stands up for the buyer’s rights, even when the “agent” hauls out a buyers agreement, just when you want to make an offer. I promise to pay 2% no matter if I find a for sale by owner, so they should be promising more too.

Ross Kay on howestreet.com says that to buy you need a lawyer, a home inspector and someone to open the door.
Some agents will open the door for $1000, so all these costs together do not add up to the amount we pay agents. These other people are true professionals, the real estate agents are simply salespeople who coach the buyers in “faking” the condition of their house – usually by “staging” so some fool forgets that this 50 year old home has poor insulation, cracks in the foundation or mice poop in the basement.
Buyer have no protection. One dumb one can make a high offer and the agents have a new stat to raise everything in the neighbourhood. Remember the dumb one had no true statistical information to go by.

So open statistics from the market and start protecting buyers with laws. Raise the interest rates for mortgages if necessary and things should settle down.

Check out viewpoint.ca you can see when the house was sold in the last 10 years or so and for how much!

#63 For those about to flop... on 11.22.17 at 7:48 pm

Recent Sale Report.

This one so fresh that some of the realtors still have it up and zolo is yet to update.

7859 Birch St,Vancouver.

Originally asking 1.91 then 1.84

Just sold for 1.7

Tax assessment 2.01

She’s ugly but I will find uglier…

M43BC

https://www.zolo.ca/vancouver-real-estate/7859-birch-street

#64 J on 11.22.17 at 7:48 pm

You, Mr. Prime Minister are sinking Canadians into the financial blender. Please resign before you do any more damage. Please take Bill Morneau with you. You tax the very business backbone that makes the middle class possible while you step up to trough with you bib and ladle. 82% of people can’t find $400 in a month. 79% think they won’t have enough to retire on. It’s probably closer to 90%. I hope they come and live with you. Let the housing bubble blow up like it should. If people can’t afford it then they can’t have it. It’s called living within their means. The liberal governments should try it.

#65 Doug t on 11.22.17 at 7:49 pm

T2 is an asshat – raise rates you idiot -‘do the tough thing and the right thing instead of this bucket of shite

RATm

#66 Randy Belwood on 11.22.17 at 7:49 pm

Your Biggest Problem is Government Solutions…As Always

#67 RE-diculous on 11.22.17 at 7:49 pm

A couple of ideas regarding RE speculation:
1. I like the 2% speculation tax that was being proposed by the B.C.NDP prior to the recent B.C. election. They may still implement in their February budget, however, I won’t be surprised if they chicken out. Essentially, with this tax, if a holder of RE in Canada does not pay income tax in Canada, their house is assessed property tax at 2% of assessed value. This will help to off set the education and health care costs we provide to those families that declare “no income in Canada” and yet live in multi-million $ homes.
2. Change the tax free Principal Resident rules – i.e. you need to live in your principal residence for at least 3-5 years to be order to claim.

#68 dw on 11.22.17 at 7:51 pm

ideas:

1 – increased cap gains tax on secondary residences
2 – small proportional cap gains tax on primary based on age
3 – further reduced CMHC
4 – cap gains tax breaks for having installed solar after purchase (ie instead of everyone uselessly redoing a kitchen before they move to ‘add’ value do something actually useful for all parties

call me crazy

#69 Smartalox on 11.22.17 at 7:51 pm

An extra $400/month? I send twice that much to mine and my spouse’s RRSPs to practice 100% LEGAL TAX AVOIDANCE.

But seriously.

Mr. Prime Minister, stop confusing ‘Affordable Housing’ and ‘Housing Affordability’. ‘Affordable Housing’ is what’s needed to keep people who can’t help themselves from dying of exposure (or worse, burning to death) on city streets and on remote reserves.

‘Housing affordability’ – or more accurately, UN-affordability – is what keeps my family and I (combined household income $225k) from owning our own home, in the region where we work.

How to fix this?

1. Offer some of the ‘National Housing Strategy’ dollars to allow renters to deduct rents from their income taxes.
– Make it claim-able up front, by filing a T1213, allowing lower income Canadians to free up cash flow that they need, instead of making them wait until April to get it.
– Put it on a sliding scale, to limit the benefit for those whose rent is readily affordable, in favour of those whose rent is not.

– Make renters looking to claim the benefit, identify their landlords, by name, address, and to identify the property that they rent.
– Spend some money to get CRA to correlate claims of rents paid, to the income reported by landlords.
– Allow families who pay to house elderly and disabled relatives in care homes to claim this tax benefit as well.

2. End the Moral Hazard that is CMHC for all but first-time buyers and their principal residences.

3. Consider a small-scale program modeled on Quebec’s program to encourage investors to buy multi-unit (Six-plex or more), properties and to allow grants, or tax deductions for costs to upgrade and refurbish safety features (such as sprinklers, fire alarms) in order to improve safety and liveability while avoiding rent increases.

#70 Terry on 11.22.17 at 7:51 pm

Please get Government out of housing. Let the free market decide where prices should be. Enshrine the right to own Real Estate into our Constitution. Every man for himself ………… either you have the money and the income to buy and afford a house or you don’t ……….. no government handouts here. Put more of our tax dollars into rebuilding/upgrading and maintaining our infrastructure, healthcare, national defense, promoting more investment into Canada from abroad & OAS pension increases.

#71 Skin in the game on 11.22.17 at 7:52 pm

First, raise the rates!

CMHC insurance should be abolished and a proper risk model should be implemented that makes the banks put some skin in the game. Your interest rate should be dependent on how much you put down, because the person with no assets and 5% down should not be getting the same rate as someone with 500,000$ putting 20% down.

Also, can anyone just build a normal apartment anymore? Why do they all need to be 400 sq/ft with a movie theatre, pool, concierge, ballroom, gym, and bowling alley? Can we just have like 2/3 bedroom apartments that don’t have 1000/mth maintenance fees? That’s what they need to be building in the major cities.

Finally, they should be working on proper distribution for the population. Everyone flocks to Van city, GTA or Montreal to a lesser degree. The governments should be working on getting quality jobs in the smaller cities so people go there and can afford a house and a life. That will take the pressure of these places. Maybe we will get more sports teams then!

#72 NoName on 11.22.17 at 7:55 pm

If you are living in toronto, if you are planning on living there or just interested in it you should definetly press PLAY and listen to this dude.

not even electing NPD federaly and provintialy gov will be able to save you milenials…

#73 Knobhill on 11.22.17 at 7:57 pm

The safety, fastest, and fairest way to end the housing madness to end the capital gains exemption.

It is better than raising interest rates because it doesn’t affect affordability.

#74 Steve French on 11.22.17 at 7:57 pm

$400 per month is no sweat for me.

I save $3,100 per month.

How do i do it?

– rent an apartment
– no car (bike to work)
– no smart phone (use basic texting plan)
– no home internet (use workplace or coffee shop wifi, people spend too much time online anyway)

I still live very comfortably. With enough for a very nice bottle of scotch every few months.

Plus I’m up $2,500 this month on my balanced and diversified ETF portfolio alone.

Watch and learn grasshoppers.

#75 Wrk.dover on 11.22.17 at 8:00 pm

So still no sympathy for an old fellow trying to survive on the interest on barely 6 figures saved up?

Then change my gender and give me one of those selfie houses too.

#76 ANON on 11.22.17 at 8:02 pm

What?

Since these things always solve themselves, even better without additional aid, the logical thing to do is nothing, which is exactly what cannot be done.
Another dude argued some time ago that “the chief cause of problems is solutions”. Of course, even this dude had his own solutions, but, being his, they surely were the right ones :)

#77 Cpdlc on 11.22.17 at 8:02 pm

$30,000/year in rent subsidy. Have a couple kids at $6400/ year. A couple with 2 kids on welfare another $1100/month.
Equals $56000/year

A family earning $75000/yr in Ontario would pay approximately $20,000 in taxes leaving them $55000/year.

Communism priceless.

#78 john m on 11.22.17 at 8:02 pm

end mortgage insurance and the lenders will take care of the problem

#79 Smoking Man on 11.22.17 at 8:03 pm

Extra 400 per month just do an insane periscope instant book sales.

Ha snail mail Garth.

I talk to him all the time.
@justintrudeau

#80 Steve French on 11.22.17 at 8:03 pm

In the last 5 years of working my first career job, on a middle class income, between my retirement and ETF portfolios, I have socked away a nest egg of $300,000.

And that’s not including the $20,000 car my ex-girlfriend took as a going away present to herself.

They should make a TV show about me.

Smoking Man and even Freedom First could learn a thing or two I reckon.

#81 acdel on 11.22.17 at 8:03 pm

My apologies; after reading the current comments there are many excellent ideas; good on you/us!

#82 SI2K on 11.22.17 at 8:03 pm

Incentivize good full time jobs with benefits in centres that aren’t YYZ, YVR, or YYC. Problem completely solved. I can’t even imagine why this isn’t on anyone’s radar.

#83 For those about to flop... on 11.22.17 at 8:04 pm

Recent Sale Report.

These guys just took a hundred thousand off ask last we and it worked cause ,she gone.

4566 w 12th ave Vancouver.

Originally asking 2.78 then 2.68

Just sold for 2.6

Tax assessment 3.0

This place is great for a pizza lover.

Every night it’s like coming home to Pizza Hut.

Except you can’t afford any of the extra toppings because you just spent 2.6 million on this heap of shit…

M43BC

https://www.zolo.ca/vancouver-real-estate/4566-w-12th-avenue

https://www.remax.ca/bc/vancouver-real-estate/na-4566-w-12th-avenue-na-wp_id187963693-lst/

#84 islander on 11.22.17 at 8:04 pm

#70 – Terry
‘worth having a look at historical precedent’…. re ‘right to buy’

https://www.theguardian.com/society/2015/aug/26/right-to-buy-margaret-thatcher-david-cameron-housing-crisis

#85 Help on 11.22.17 at 8:06 pm

Dear Ottawa and those individuals running our Country. Please tax real estate speculators.

Thanks,
Concerned Citizen.

#86 MSM-Free Zone on 11.22.17 at 8:06 pm

All very excellent, courageous, and valid propositions.

Unfortunately, few, if any, will be taken seriously, as there are too many self-serving interests (CHMC, CREA, CBA, CAAMP, etc.) with too much skin in the game.

(P.S. You gotta lose tonight’s headlining photo. Nasty. Spent 10 minutes at work this evening explaining to my colleagues looking over my shoulder that this is a ‘daily financial forum’, not a…well…let’s not go there.)

#87 Wrk.dover on 11.22.17 at 8:07 pm

Actually I could muster $400 /month if interest is what it was when I borrowed.

#88 Rookie57 on 11.22.17 at 8:07 pm

The problem with the $40 billion is that it treats the symptom and not the root problem. It buys votes though which is unfortunately the perceived job of many politicians (not all though). The root problem in my opinion is the easy access to cheap money, restrictive regulation for all business, and an endless rise in taxes and fees from all levels of government. Match these with stagnant wages and you have a problem with disposable income and savings. Look at Vancouver and Lower Mainland, it used to be an industrial port area with many businesses set up along the waterfronts. They have disappeared and been replaced by RE developments. Allowing people, gov’t, and business to borrow beyond their fiscal ability has fed the RE boom and created the present mess. Being fiscally responsible with our tax dollars is a good start…but doesn’t have a snowballs chance in a not nice place of occurring. Eventually the bond market will speak to shake things up but until then spending is a problem for everyone. Fix the spending.

#89 john m on 11.22.17 at 8:08 pm

The taxpayer should not be covering defaults for private industry…>the banks

#90 Ret on 11.22.17 at 8:08 pm

We give all three levels of government too much tax money and then seen genuinely surprised at all the new programs that they bring in to pi$$ it away.

In the process, Canadian values such as hard work, thrift, self reliance, resourcefulness and respect for fellow Canadians got thrown under the bus.

It is time for a tax revolt. It is the only way to stop this lunacy. Governments quit listening to taxpayers footing the bills for these programs twenty years ago.
__________________________________________

I saw John Tory at the photo-op/ program roll out today.

I heard him blathering on about some transit environmental assessment needed a week or so ago.

How about fixing this Mr. World Class City Mayor?

https://www.thestar.com/news/gta/2017/06/12/raw-partially-treated-sewage-dumped-in-lake-ontario-by-toronto-during-heavy-rain-fall.html

#91 wallflower on 11.22.17 at 8:09 pm

Policy. Provincial policies. Why is the 1970s the last decade of any significant rental accommodations building? Policy. Anti landlord policy.
Then the vicious cycle began. Nobody builds to rent. Condos become the new units, owned by individuals who themselves are often imperilled. And now, we have many folks who own multiple “rental” units going down and underwatering.
How the federal government addresses provincial policy is a weird one. But they would have to establish an oversight group and funding for driving house-formation friendly policy for tenants. This means landlords need to know they won’t get jerked around and look at what Wynne just did. Stuck it to the landlords. All of them.

#92 AGuyInVancouver on 11.22.17 at 8:09 pm

Simple. Ban all foreign purchases of Canadian residential real estate. In all my years here nobody, including Garth, as ever advanced a compelling reason why we should sell off homes to foreign money.

No Canadian passport and Canadian tax returns = no property. Rather than have the government build rental housing for Canadians, let foreign students and permanent residents rent. If you really want to buy, commit to Canada and get citizenship.

#93 Bob Dog on 11.22.17 at 8:11 pm

The wealth inequality we are seeing today is a crime against humanity. It is being committed with the full content of the Government if Canada. Our government has been carrying out a war against the young for at least 10 years. I think it began when Harper was elected. Canadas version on Trump.

There are people in this country who are guilty of serious crimes. Crimes so heinous we have no laws on the books so no punishment is being applied.

I hope it ends in revolt.

This video makes me sick.

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

#94 Mean Gene on 11.22.17 at 8:12 pm

Tax capital gains on ALL residential real estate.

#95 wicked as it seems on 11.22.17 at 8:12 pm

Completely revamp the real estate industry, new rules of total transparency when buying. Take away their secret agendas so people have a better shot at gauging the deal!
Only after 2 years are properties tax free on sales.
Shut down CMHC but grandfather in all existing.

#96 joblo on 11.22.17 at 8:12 pm

Hey Alberta, ya gonna stand for this?
America is getting great again, make the move.
Ottawa doesn’t give a crap bout ya, never have.
Secede!

#97 MSM-Free Zone on 11.22.17 at 8:15 pm

I’m sure that New Zealand’s new Prime Minister, Jacinda Ardern, could offer some sensible solutions to jt2.

She’s young but not naive, full of class and integrity (so far), and is looking to do what’s best for New Zealanders, and only for New Zealanders.

#98 BlogDog123 on 11.22.17 at 8:16 pm

It’s simple: Greatly increase the supply:
How many little old ladies never really use the basement of their house. Give financial incentives to the poor house-rich folks (loans secured on the value of the house) to renovate, separate entrances, certain standards (so basement is a livable separate unit), loosen up red tape on building permits/zoning, make these basement suites super bright and fireproofed. Then the supply of housing increases, lowering the rents and sending some money to grandma. Win win except for current landlords.

Population density in suburbia goes up, and all those empty transit buses get filled with low income folks.

#99 Entrepreneur on 11.22.17 at 8:16 pm

Giving forty billion for low-cost housing is only a band aid solution. Probably an election grabber and avoiding issues like the China trips, oil pipelines: the trades agreements.

Have we come too far to fix the problem? And the only solution is more money into the economy? My, oh my, really. One only needs to make a graph of small businesses to acquire knowledge of any understanding of their importance in our country. Make several with different points and dates until a reasonable conclusion is made.

Couple of interesting articles: Google “Could Technology Remove the Politicians From Politics?” and “Reform Political System.” Sooner than later, please.

Notley talked of why the pipeline should go through but has she realized that removing of an abundance of oil shifts the delicate earth’s strata?

#100 millmech on 11.22.17 at 8:17 pm

#48 Todd
Nailed it!

#101 not 1st on 11.22.17 at 8:19 pm

Rezone the entire country to permit secondary suites. Problem solved, cost = zero. Your welcome

#102 Ben on 11.22.17 at 8:19 pm

Providing proper financial education for Canadians might help with the problem. Whatever token programs the government might claim to be running don’t seem to be working. People need to find a way to get over their embarrassment or fear of discussing financial issues.

#103 Rental property math on 11.22.17 at 8:19 pm

DELETED

#104 acdel on 11.22.17 at 8:20 pm

My voice states that we need to stop immigration for 3 to 5 yrs to allow our economy to fully recover and employ millions that are out of work, lower taxes and make sure that by doing so it that it creates jobs and not go towards only to the shareholders.

Once we have a population of workers that can afford a lifestyle then open our borders strictly regulated to the true employment numbers; this is the only way we can give ourselves and new comers a decent living without driving wages down and real-estate artificially high.

#105 Victor on 11.22.17 at 8:20 pm

– address speculation;
– end CMHC;
– universal foreign buyer tax across Canada for all types of homes and more than 15%;
– tax free capital gains is too generous when people pay taxes on 1% or less interest from GICs. Less than inflation gain on GICs or saving accounts should not be taxed IMHO;
– the green belt does not help GTA; Are there other countries where major economic regions are restricted in a similar way?

#106 Liquidgoldzandz on 11.22.17 at 8:22 pm

Ok Blog Dogs

I live in Fort Mac and been renting for 3 years. Real Estate has gone down a lot in these parts. There is a foreclosure in the building I rent in. The building is 3 years old. The foreclosure is 200K (original was close to $400K now its $200) less than what the person paid. I did the calculations and my mortgage, condo fees, property tax, electricity, cable and internet would come up to the same amount as my current rent amount. The unit is a 2 bedroom and I rent a 1 bedroom.

Do I keep renting or do I buy it and treat it as rent? I plan to stay in Fort Mac for a long time.

#107 Burnaby Boy on 11.22.17 at 8:22 pm

For a start the government could ensure that Canadians have reciprocal rights in any country that immigrants come from before any more are allowed in.

#108 islander on 11.22.17 at 8:22 pm

https://www.youtube.com/watch?v=KgUemV4brDU

..timeless….not exactly on today’s topic…..but good if you enjoy a laugh re politicians

#109 Yanniel on 11.22.17 at 8:23 pm

This only encourages me to quit my job and line up for the free rents and other goodies. I hate to say it but I am subsidizing people’s kids(no CCB for me), people’s rents (with this 40bill), people’s health care ( paying Ontario surtax when lots don’t) and good knows what else.

Am I rich? Hell no. And the way things are right now I might decide to be poor. Poor is the new rich.

#110 mark on 11.22.17 at 8:24 pm

How about our 10,000 dollar a year TFSA room back Mr P.M.

#111 Cindy on 11.22.17 at 8:26 pm

#37 My to-do list for Thursday:
1. Quit job.
2. Sex change
3. Find the line to stand in for my share of the handout.

$2,500 for rent? Why should the rest of us even bother when gubment just steals more than half of what we make through inflation and taxes, then uses it to discriminate against us male working stiffs even more?
____________________________________________

Hahahahaha….ha!! Good one. I’m already one step ahead of you, being a woman and all.

I get that everyone deserves a roof over their heads, but this is outrageous. $2500 a month for rent? How is that going to give these women and girls any incentive to be productive members of society and the workforce?

This government and their actions are mind bending.

Stop bringing in so many immigrants! Get rid of CHMC. If the banks have to shoulder the risk, they won’t give out loans like candy to any as*hat that applies! Speculation tax!! Everyone and their aunt was buying up houses in Toronto thinking that they were going to make 30% year over year…that fuels a housing bubble.

Sigh.

#112 Alex S on 11.22.17 at 8:31 pm

Michael Chong wanted to privatize CHMC: http://nationalpost.com/news/canada/tory-leadership-candidate-michael-chong-wants-to-privatize-cmhc-to-fight-trend-to-higher-housing-prices

#113 jane24 on 11.22.17 at 8:32 pm

Easy one Garth but no Canadian govt would have the balls to do it or the elite who run the govts don’t really care and they are just looking to appear concerned.

1. Speculation tax on shorter term flips. Worked before and will work again.
2. No foreign buyer purchases. Must be a resident as in NZ.
3. CHMC capped at insuring homes up to $500,000 only. Basically this agency returning to what it was created for, supporting low income mortgages on low price homes. CHMC only available to Canadian citizens who have paid the taxes to build it and not to short term residents with no Canadian income.
4. Banks must carry at least 20% of the risk with CHMC mortgages so they have skin in the game and properly assess and cost out loan risk.

Any one would work. Shame that no-one would ever action them.

#114 Hotdogs from Heaven on 11.22.17 at 8:33 pm

#71 Skin in the game on 11.22.17 at 7:52 pm
———————————————–
Wow, I was going to make those very points.

However I would still keep the CMHC, but once an area has been identified as approaching a bubble by a basic algorithm then NO CMHC coverage would be eligible. All private property insurance has coverages and rates based on postal codes, why can’t CMHC?

This would include mortgage renewals. So property owners who were basking in the rising price of their properties would have an incentive to pay off more before renewal because their new rates would go up without the CMHC coverage.

As for your last point, why not just end all income tax on businesses in areas with small towns and lower populations. This would provide an incentive for more businesses to move out of crowded areas like Toronto up to areas like Timmins, Sudbury and the north. The workers would then follow.

#115 Post on 11.22.17 at 8:33 pm

I do like the idea of adjusting the capital gains exemption on housing. I’m not sure which country already has a system in place like this (France?). But it was also propsed by a prof at SFU.

It works like this: if you resell ANY home (not just your principal house) in the first 2 years of ownership, 100% of the gain is taxable at your marginal rate. Every year after that, you can claim 10% less of the gain as taxable. After you own the home for 12 years, it’s capital gains tax free.

This makes it more likely that a home is being bought as a place to live, or for long term rental income. If you want to short term speculate on housing stock, you gotta pay.

Sounds good to me.

#116 dan the it guy on 11.22.17 at 8:34 pm

.No foreign buyer allowed to buy any residential up to 4 plex or agricultural real estate.
.if you buy a primary residence you must keep it for at least 5 years and live in it.
.if you buy a secondary residence, fully taxable(already like that)
.Anybody caught transferring money illegally from overseas to be penalized to the full extent of the law.
.Fake citizens (address here for the kids school and hiding money but working and living overseas+ 100’s of other scamming schemes) are treated as foreigners and lose their residency.
Sound alt-right hey?! unCanadian? Maybe it’s what we need?!? sadly. But won’t happen. I dearly miss Harper…

#117 Xpat on 11.22.17 at 8:35 pm

The most realistic and easy way to let the housing market sort itself out is to make real estate information public ala Zillow.

Unfortunately, I don’t see it happening because, well, money talks.

http://nationalpost.com/news/politics/money-began-to-rain-on-trudeau-foundation-once-justin-took-over-liberals-analysis-shows

#118 Andrew Woburn on 11.22.17 at 8:35 pm

Not to worry. There’s plenty of jobs as Walmart greeters.

Oh, wait!

“Chatty robots who help with your shopping and recognise faces of regular customers rolled out in Russian supermarkets”

http://www.mirror.co.uk/news/world-news/chatty-robots-who-help-your-11566357

#119 People are strange on 11.22.17 at 8:36 pm

OMG!!! Every time I look at Vancouver listings, I feel queezey! Crazy homes that should be worth no more than $600k are going for over $2 mil!!! There are way better deals in Brooklyn NY. I really don’t get it. Once this roller coaster starts heading downward, I don’t know where it’s going to stop. It just makes me cringe that people think these sheds are worth that money.

But there are mountains in the background.……

#120 David dd on 11.22.17 at 8:40 pm

Thank you very much Mr. Garth Turner. If you decide to run an election to become Canada’s Prime Minister, I vote for you because I know you love this beautiful country and people.

#121 common sense on 11.22.17 at 8:41 pm

Hey Justin…who will be paying for your plans?

Higher Taxes or just add on the debt til it all blows like most countries in the world, call it a “Debt Jubilee” or start a war and kill millions?

You self serving pricks spouting the illusion of helping the poor, seniors, etc while laughing all the way to the bank….

#122 Bob on 11.22.17 at 8:42 pm

And just how are we supposed to pay for all this neat stuff?

#123 Anderson de Andrade on 11.22.17 at 8:42 pm

Change tax policy to incentivize investment plans and entrepreneurship over house speculation. Residential property should never again be seen as an investment but as a utility. Not any different than having a car.

#124 VICTORIA TEA PARTY on 11.22.17 at 8:43 pm

T-2’S HOUSING IDEA: MEGA PROJECT TO NOWHERE?

Canada is famous for its huge public and very expensive megaprojects.

They’ve included the following: Construction of the CPR, CNR, St. Lawrence Seaway, our share of both world wars’ expenditures.

You can probably find a few examples yourselves.

My point: Is this Trudeau housing announcement Canada’s latest in a long line of megaprojects for the “public good” or is it a vote-buying scheme for the 2019 general election?

The NDP whines it is not enough. Of course it does. So how can it be included in this conversation? Can’t.

Garth reports that this 10-year-long $40-billion initiative will affect the lives of only some 6 per cent of our population. Those people will get some kind of better housing but details are sketchy still.

I’d like to think that there is in fact NO solution to our housing problem BY GOVERNMENTS.

So two issues leading to a possible partial solution stand out:

1) Mr. Market needs to get more involved. He’s been pounding the daylights out of the GTA. But he is still AWOL from YVR. Victoria is locked up in its own Fantasy Island existence, of a jammed-up tight real estate/rental market, where one landlord is jacking up rents by 38 per cent!!

2) Canadians, especially the young who are generally more mobile, should consider moving to less expensive locations where a lot of stress would be removed from their lives. They would be moving markets by this act alone.

So individual enterprise and these government expenditures may help to break SOME of these horrifically-priced accommodation log-jams.

One positive aspect is that many small home construction
businesses may get more work. That’ll increase employment and tax revenues for the government. Won’t be enough to pay back the 40-billion but it would be SOMETHING.

Will this program ensure the re-election of the Liberals aka the “Divine To Rule Party?”

That’s up to all of us. Right?

#125 Interest Only on 11.22.17 at 8:43 pm

Interest Only Mortgages.
Especially w low rates, everyone can afford the interest.

Heck, at zero rate, the homeless can afford interest only mortgages. It would push up prices to a billion for a condo, though.

#126 Wrk.dover on 11.22.17 at 8:44 pm

I paid hefty interest to get started.

I since then saved up some money of my own.

When do I start to collect interest?

Fair enough request?

See my name???????????

#127 I thinks I know something on 11.22.17 at 8:44 pm

I agree that swelling real estate prices are bad overall for society in general. It creates huge societal imbalances. However, not participating in the housing market has been personally far worse for those that chose not to buy in the last eight or nine years. They have missed out on huge equity gains and many will be locked out of the housing market forever.

#128 Fred on 11.22.17 at 8:46 pm

 The problems in the Housing markets were caused by the Federal Government imposing record low interest rates for the past 15 years.
These record low interest rates resulted in Record High Real Estate Prices, Record High Personal, Corporate and Government Debt and Record Low Savings Rates.

INTEREST RATES SET BY THE FEDERAL GOVERNMENT are at the heart of the problem.    
 
We have a HOUSING PROBLEM and we have a RETIREMENT SAVINGS/PENSION PROBLEM and we have a DEBT problem.   All are directly linked to RECORD LOW INTEREST RATES.
 
The problems caused by the low interest rates didn’t happen overnight. The problems have gotten progressively worse year by year for 14 years and the government sat by and did nothing to stop and reverse the damage they caused.     The root cause of the problem is the politicians and the so-called experts who got us where we are today.
 
What do we need to do to fix this problem?
 
1. Interest rates need to go back up quickly. Canadians need to be told that rates are going up 2.5% this year and 2.5% next year at least until we have interest rates back at 6%. Then the government needs to get out of manipulating interest rates.

2. Phase out CMHC. No more CMHC insured loans for residential real estate.

3. Limit purchases of any residential property valued under two million dollars to Canadian Citizens and Landed Immigrants. Maintain this policy in place until we have regained a sane residential real estate market.

4. Honest, accurate reporting of real estate sales showing actual price paid plus any conditions, etc; reported publicly real time.

5. Convert all Government Defined Benefit Plans to Defined Contribution Plans immediately.

6. Stop running budget deficits now. Who is going to pay the interest and pay back Canada’s enormous debt? Certainly not our over indebted citizens. Our politicians and our political parties have let us down badly for the past 14 years.  Only Paul Martin and Jean Chretien stood by Canadians. (I’m not a Liberal) They undertook the painful steps to cut spending to eliminate the annual federal budget deficits and start to reduce Canada’s enormous debt.  They did this despite the political outcry and the pleading of special interest groups.  

7. Stop Canada’s political and military interference in the affairs of foreign countries.  Why do we have our military in the Ukraine when they are fighting an active civil war?  Why did we lend the Ukraine 200 million dollars for military purchases? We didn’t have 200 million dollars.  We had to borrow it and add it to our national debt.  Money that the Ukraine can never pay back because they are bankrupt.  They pay their pensioners $50 a month and the average industrial wage is $150 a month.  How are they going to pay back their debt to Canada?  The answer is they can’t and won’t.  Canadians will have to pay the interest and repay the debt. Were Canadians asked if we approved? Were Canadians asked if they waned Zero percent interest rates?

Our government thinks of new ways to spend us into the poor house every day and the politicians don’t care. It’s all a game for them.

Fred

#129 For those about to flop... on 11.22.17 at 8:46 pm

Some people on the blog that might want a break from the real estate madness might enjoy a peak at this article.

I was disappointed that they didn’t cover Croatia…

M43BC

“Mapping the Richest People in the World 2017

A few weeks ago, we put out a viz highlighting the richest person on each continent. We thought we would take this one step further to show you the richest person in each country according to Forbes. To further refine our analysis, we required that each person amass a personal fortune of at least $1 billion. We created the maps to have a dark shade representing a country with a billionaire on our list. We included a photo of the individual in question as well as their estimated net worth. We think you might be surprised by the results.”

https://howmuch.net/articles/the-richest-people-in-the-world-2017

#130 rainclouds on 11.22.17 at 8:47 pm

I had a list. No point. The lack of political courage precludes substantive relevant action to right the ship. The recipient of this information would have to have a clue.

Keep whistling past the graveyard politicians. Keep spending our money on half baked progressive gender BS.Any other plans that don’t require shoveling money we don’t have out the door?

Somebody dreams this stupidity up and it sees the light of day? Embarrassing example of the liberal braintrust.

And you wonder why politicans are now held in the same company as tow truck drivers used car and house sales “professionals”

That was cathartic but pointless…….

Thx GT

#131 After Communism on 11.22.17 at 8:48 pm

The cost of a house is lower if more people are building houses, instead of living in them without producing anything of value.

So reduce the number of people housed for nothing, and working for government, and switch them to building houses.

Many hands make work light work.

The LORD does not let the righteous go hungry but he thwarts the craving of the wicked. Lazy hands make a man poor, but diligent hands bring wealth. Proverbs 10:2-4

#132 I thinks I know something on 11.22.17 at 8:49 pm

Forty Billion Canuck dollars. Garth, you criticised the tax evaders a few blogs ago. This is exactly why they want to evade the taxman. I’m just sorry that I’m too stupid to join them.

#133 Kelsey on 11.22.17 at 8:50 pm

Garth, great post today, but I think we will need to make it more relatable for our friends in Ottawa. In that spirit, I have prepared a draft to express our collective outrage in a way they might understand.

Dear Glorious Leaders:

Despite your benevolent intentions and immutable intelligence, please recognize that as an unintended consequence this policy will provide the productive among us with zero benefit yet eat away at our real purchasing power through either increased taxes, inflation or future debt repayment. $40,000,000,000 is also more than $1,000 for every man, woman and child in Canada, and this newest non-core spending burden may stretch our ability to continue to produce for you at an optimal rate.

We therefore humbly ask you, our Government Overlords, to show a tiny modicum of restraint when imposing new taxes, spending and interfering in free markets. If you would so kindly restrain yourselves from encroaching upon the remaining sliver of freedom we here at the ranch still enjoy, we promise to continue voting based on nice hair.

Yours Truly,
The Tax Livestock

#134 Ace Goodheart on 11.22.17 at 8:51 pm

Statistically, most homeless people are actually men.

#135 Marc on 11.22.17 at 8:51 pm

Increase the minimum down payment on CMHC to seven or even ten percent.

#136 Bob on 11.22.17 at 8:52 pm

This is just another wealth transfer from the producing class to the consuming class…nothing new in the new Canada.

#137 Happy Housing Crash Everyone! on 11.22.17 at 8:52 pm

Garth send a few of your posts. No one in Canada has spelled it out better than you. You detailed word for word the exact causes and reasons. I only wish you were PM.

#138 The Preacher on 11.22.17 at 8:54 pm

Get the frickin’ leverage out of the system!

1) If the feds can’t sack up enough to abolish the CMHC, then hybridize underwriting … limit CHMC’s underwriting to LTVs of no more then 90%, capped at $400k total loan … everything above that must be underwritten by the loan originator.
2) Give primary residence cap gains the same tax treatment as private business equity with a $400k lifetime cap on exemptions. Everything above that gets assessed at the usual inclusion rate.
3) Boost TFSA contribution room to $10k annually to make up the difference for tax free cap gains lost in Item 2. Make it attractive to buy productive assets and not just houses.

#139 Nonplused on 11.22.17 at 8:55 pm

I think if you pump $40 billion into the housing market, however you do it, prices go up not down.

The only way the Turdeau can get $40 billion of new houses for the poor is to outbid the people who would otherwise buy them. He’s just making the matter worse.

This will have a much greater affect than HAM.

If we want to fix poverty, we have to get the economy working again. Using government debt to buy people free houses won’t fix anything, it’ll make matters worse. What we need is jobs. Productive jobs, not government jobs.

#140 moneymike on 11.22.17 at 8:57 pm

What bond ETFs are you all holding to follow Garth’s fixed income weighting? I currently have VSB.

What about preferreds? I have XPF and CPD.. but now I wonder about over exposure to the US with XPF, also it hasn’t done nearly as well as CPD.

Thanks!

#141 Damifino on 11.22.17 at 8:59 pm

Instigate a ‘phasing in’ of capital gains tax on the sale of principle residences beginning Jan 1, 2018.

From that date onward, capital gains exposure on realized profit becomes 50% – ((N/240) * 100) where N is the number of months the principle residence has been owned, up to a maximum of 120 months.

Thus, if you bought in Jan, 2008 (120 months ago) your gains are exposed like this:

50% – ((120/240) * 100) = 0%

If you bought in Jan, 2013 (60 months ago) your gains are exposed like this:

50% – ((60/240) * 100) = 25%

And if you bought just a few months ago, your gains are exposed at practically 50%, just like any other speculative gain.

It would be murder on flippers, and easy on people who want to own and stick around to build a community.

#142 Bob on 11.22.17 at 9:00 pm

Move along… nothing to see here…just more of your tax dollars being flushed down the drain.

JuniorT will still win the next election and the one after that too….

#143 TRT on 11.22.17 at 9:01 pm

Bogus poll.

82% of people plan to buy a premium smartphone over the next 2 years costing $1000. Looks like they found $500/yr.

Believe these polls at your peril.

#144 I can type. on 11.22.17 at 9:03 pm

Raise rates? End mortgage insurance? Nix the capital gains exemption? Bigger down payments? Thirty-year loans? What?
—————
All of the above and hold back immigration a small amount – not being a bigot.

#145 Smoking Man on 11.22.17 at 9:03 pm

Get rid of the stupid tree hugger regulations.

Open this bitch up to free market forces. Make a shit load of supply in a short amount of time, problem solved.

Everytime govt gets involved. It gets worse.

I put a link to tonight’s post on T2’s twitter account. Don’t think he reads them, if he did, I would be in the slammer by now. I’ve seriously chirped in full on drunken rants our wonder woman prime minster.

#146 akashic record on 11.22.17 at 9:04 pm

#77 Cpdlc on 11.22.17 at 8:02 pm

$30,000/year in rent subsidy. Have a couple kids at $6400/ year. A couple with 2 kids on welfare another $1100/month.
Equals $56000/year

A family earning $75000/yr in Ontario would pay approximately $20,000 in taxes leaving them $55000/year.

Communism priceless.

——

Insane numbers.

In Communism actually welfare didn’t exist. Everyone had to work, carry an ID card, which included the workplace information.

Not working was a crime, punishable with jail time.

#147 After Communism on 11.22.17 at 9:05 pm

You do not need a speculation tax because there is no inflation of prices if world interest rates are high enough to stop the price inflation. Raise world interest rates.

Also stop growing the size of government which unintentionally raises house prices, and all prices (as I described above).

Change those two things, and then there are no capital gains … and no new ignorantly inspired speculation taxes.

#148 Yanniel on 11.22.17 at 9:08 pm

Dear Garth,

It was not my intention to be offensive with my previous comments (one a few days ago and another one today). Both those comments were not posted (not even a “deleted”). So that I can auto-moderate my comments moving forward in this blog, my I ask in which way was I incorrect? I’ll do my best to behave correctly as a guest here.

Thanks.

#149 Bob on 11.22.17 at 9:08 pm

Check out this interesting analysis from the National Post:

http://nationalpost.com/opinion/john-ivison-canadas-wealthy-may-have-started-a-tax-revolt-and-ontario-is-the-first-to-notice

#150 Long Branch Apprentice on 11.22.17 at 9:09 pm

Easy, legislate a minimum wage of $30/hr. People deserve a living wage you know!

More government intervention is the cure to government intervention. It’ll never happen, but disband/unwind the CMHC, which would force the banks to price in risk more accurately, which would put upward pressure on mortgage rates or at least reign in the banks’ lending. Cheap credit has been the steroids for this bubble, and JT can diddle with it all he wants, not likely to change it for the better.

Garth is right, move out of TO and Van and start to populate Canada’s interior.

Also for your consideration:

https://youtu.be/JuP2hH0Kpro

The debt we have forced upon our unborn young is the most immoral and unethical act ever committed. Our offspring will curse our names.

I wouldn’t mind a steep correction, wife and I have over 3 yrs salary saved and invested, no debt. But in the eyes of our peers, we have to rent and therefore are wasting our money. LOL.

Then again, Canadians are numerically illiterate.

Discovery Math, shaking my damn head.

#151 I like cookies on 11.22.17 at 9:13 pm

How about a minimum of 50% down for non-primary residences? If the problem is chiefly from speculators, then nip the speculation in the bud.

Either that, or let me leverage my stock investments at 4:1 too… don’t punish me because I prefer to invest for my future rather than sink all my money into bricks and dirt.

Also, make the banks bear the burden of the risk — end the government backstopping of CMHC insurance, and allow for competition in the mortgage insurance space (or get rid of the requirement altogether). Taxpayers should not be subsidizing the lenders’ risky decisions.

#152 Bezengy on 11.22.17 at 9:13 pm

The problem is no one wants to be a landlord. The truth is it’s a tough business as many tenants are pigs, plain and simple. You can’t get rid of them even though you own the house as they have more rights than you do. I have a nice house that sits empty. I’d love to rent it but I can’t find normal people who would actually take care of it. I rented it well below market value, but of the 10 tenants I’ve had, not one took care of the place. Thirty years of being a landlord is enough, and I know plenty of people who fell the same way.

#153 Jimbo on 11.22.17 at 9:16 pm

50% down for non-primary residence investments.
30% down for primary.
30% down for primary with a rental unit. If rented within the first 90 days of deal closing, bank will return 10% of the down payment and would transfer that amount to the mortgage.

That’ll do the trick. More rental units and lower prices.

#154 Bob Dog on 11.22.17 at 9:16 pm

I have one serious question for Li’l Pierre.

Does the criminal banking cartel permit you to comb your own hair?

#155 john m on 11.22.17 at 9:17 pm

Harper and the cons created the problem…wonder of they ever thought of a solution for their handiwork?

#156 eat pie on 11.22.17 at 9:19 pm

Convert all wind turbines into multi-level apts… rent free of course

#157 Smoking Man on 11.22.17 at 9:20 pm

You know what, when Justin starts building his low cost housing it will end up 10 times over budget and liberal donors, builders will make out like bandits.

Why I’m an honest conservative is beyond me, its really stupid.

I should just abandon righteousness, gain power through bull shit and celebrity status, molest young chic’s for free and become a Hollywood Democrat.

Can’t do it.

Not because I’m a feminist, but because I’m a man.

Woman need protection from bigger stronger horny mean beasts no matter what your lesbo teacher says about safe spaces.

Dr Smoking Man
Phd Herdonomics

#158 Paully on 11.22.17 at 9:20 pm

It should be obvious to all that the CMHC has overstayed its welcome. Wind up the CMHC, and the real estate problem will balance itself.

#159 Kat on 11.22.17 at 9:26 pm

Juno had it right, also ban airbnb as it was illegal and allowing is just pushing the problem under the rug. How about spending some of that money on financial education. I am almost 40 and just learning that saving will get me nowhere and I could have had a crap load of money if someone had taught me the basics of investing all the money I was putting away. Like every other comment I do not see things changing any time soon as no politician wants to be the one to cause a crash even if the country needs it to reset.

#160 fred in van on 11.22.17 at 9:26 pm

114 Post

“This makes it more likely that a home is being bought as a place to live, or for long term rental income. If you want to short term speculate on housing stock, you gotta pay.”

—————————————
I’ve been a renter in Vancouver for the last 5 years. I also thought it would be smart to cash in my real estate chips and rent. I guess I was wrong.

Not only did I not reap the gains of the past 5 years, I’ve been forced out of 2 suites and I just rented a 3rd. Both times, my landlord sold the property and “coincidentally” the new owner was moving in – it’s just an excuse. It was just a way for the new owner to drastically increase the rents. Both of the owners that sold the suites each owned them for less than 3 years.

I started renting a nice two bedroom suite with a bit of an ocean view for $1900. Now I pay $3400 for smaller 2 bedroom in a worse location overlooking the new construction site across the street. My wife and kid are always stressed out about the prospect of longer commute times or schools changing. RENTING SUCKS!

Hell yea, I’m all for limiting the speculators and having some owners that are content to be long term landlords.

#161 Victor V on 11.22.17 at 9:29 pm

– Maximum amortization of 25 years — no exceptions.
– Increase capital gains tax on sales of non-principal residences to deter speculation / flipping.
– Increase minimum down payment for homes over $500,000 to 20 per cent.
– Increase TFSA limit back up to $10,000 per year, indexed to inflation.

#162 mathman on 11.22.17 at 9:30 pm

Been said multiple times. Three easy steps

1. remove CMHC

2. Force the banks to price risk and shoulder it

3. speculation ends and the market mean reverts

Nothing to do with foreign ownership and everything to do with cheap money. It is the same reason a 35 year old living in their parents basement drives a mercedes, no consequences to taking on the lease, no sticker shock – only focused on making the payments.

#163 Kurt on 11.22.17 at 9:32 pm

“Are there better ways to deflower housing so average families can once again afford average homes? Raise rates? End mortgage insurance? Nix the capital gains exemption? Bigger down payments? Thirty-year loans? What?”

There is no way to end this without hurting a lot of people in the pocket book: malinvestment is malinvestment, and there is no turning back the clock.

The first order of business is to fix the grossest market distortion: Government-backed mortgage insurance must end today. No more CMHC.

Second step is to ensure a wide range of shelter options so that there is shelter that consumes less than 30% of disposable income for 90% of households. This means throwing most zoning regulations in the trash – they exist primarily to protect the interests of current property owners, not to protect the social interests that they pretend to. Again, lots of people going to get hurt financially, but they are benefiting from a government-imposed market distortion – essentially collecting an economic rent.

DO NOT go through with the current plan – if you think the market is distorted now, just wait until *that* baby is implemented.

#164 paracho on 11.22.17 at 9:33 pm

Variables that may bring in affordability :
1.Raise interest rates and keep raising rates .
2. Make it mandatory for buyers to have a minimum 20% down payment .
3. Loosen some building restrictions , but not too loose in order to increase density .
4. Increased capital gains taxes on houses and condos for flippers if not a principle residence .
5. Empty house/condo tax
6. Restrictions on foreign ownership ( a minuscule variable but still present … every policy adds to lowering values )
7. Invest in low income housing . Build more of it !
8. Restrictions and more supervision of mortgage agents, brokers and lenders . Making it harder for those that can not afford to receive a dangerous mortgage .
9. Educating the public on the dangers of over indebtedness . It worked slowly but surely with smoking and drinking and driving !
Combining all these together and maybe adding more policies may help stunt the value appreciation and reign in some stability .

#165 mathman on 11.22.17 at 9:33 pm

I would encourage everyone on this blog to write their MP about T2’s plan. I agree everyone should have a roof over their head – especially children that did not choose their situation.

However as already mentioned, get to the root cause. Tie the rent or subsidy to conditions driven to make these adults contritbuting members of society – otherwise there is avery high probability of their children following in their footsteps.

Teach people to fish – it works!

#166 wieners on 11.22.17 at 9:38 pm

abolish rent control

#167 Millenial1982 on 11.22.17 at 9:42 pm

Don’t forget the free tuition for kids from low income families too. With these types of policies coming into place faster all the time it’s not long before the average rational person comes to the conclusion they can get the same from doing a lot less. Of course it doesn’t work but i fear that thnking will catch on and take over.

#77 Cpdlc on 11.22.17 at 8:02 pm

$30,000/year in rent subsidy. Have a couple kids at $6400/ year. A couple with 2 kids on welfare another $1100/month.
Equals $56000/year

A family earning $75000/yr in Ontario would pay approximately $20,000 in taxes leaving them $55000/year.

Communism priceless.

#168 Cecil Henry on 11.22.17 at 9:45 pm

Just like students loans, and interest rates, if government gets involved in this the result will be higher prices and poorer people.

To ignore the role of the immigration invasion in the housing disaster isn’t just irresponsible, its criminal.

http://www.eurocanadian.ca/2016/11/what-immigration-lobby-has-in-store-for-canadians.html

http://www.eurocanadian.ca/2017/05/once-again-obvious-solution-to-vancouver-housing-crisis-goes-unmentioned.html

#169 Sad blog dog on 11.22.17 at 9:46 pm

Re 163 mathman: Amen.

#170 garthjr on 11.22.17 at 9:46 pm

-25% down on 500,000 or less
-50% down on 500,000 or more
-tax capital gains on housing. This is a place to live, not an investment.
-Foreign investors taxed at 50%
-Foreign money taxed @ 50%
-Foreign investors can only own 1 property and in only certain areas. (A rule that comes from a lot of foreign countries)
– No more CMHC
-Realtors can no longer hold off on offers till a certain day…first come first serve
-Take housing back to being a privilege and not a right.

#171 robert b on 11.22.17 at 9:48 pm

I lived in Switzerland in the 80’s when there was a significant real estate bubble fueled by rampant speculation. The government quickly stepped in and imposed a punitive capital gains tax that went down over 20 years. Meaning that if you bought a house today and sold it in six months, the capital gains tax would eat all of your profits. If you lived in the house for 20 years, there was no more capital gains tax. it worked very quickly and speculation was quashed. The price increases in Canada are due to a small percentage of people buying a disproportionately large percentage of real estate. The same thing happened with Bordeaux wines in the last 20 years. All these newly minted millionaires/billionaires around the world were buying up all of the wines and to add insult to injury, they knew nothing about wine. They just bought it to impress others. Now Bordeaux wines are unattainable to mere mortals such as myself as is Vancouver real estate.

#172 Vancouverite on 11.22.17 at 9:49 pm

Have borrowers qualify with:

Scenario 1:
minimum 25% down and
maximum twenty (20) year amortization mortgages
(this will get people to have “skin in the game” and hopefully get them to pay off mortgage before they retire)

Scenario 2:
Less than 25% down, maximum 15 year amortization
(this will still allow higher verifiable income earners such as doctors or dual income family to buy home)

#173 Timmy on 11.22.17 at 9:49 pm

Ban foreign ownership. Housing in Canada should be for Canadians living in Canada and paying taxes.

#174 Sunny Dayz on 11.22.17 at 9:52 pm

Having 6 kids and “divorcing ” my wife allows us to be better off in this liberal world then ever. My XXL pays $200 for brand new subsidized house incl all expenses . We could/might both work cash $5-6k a month .Her old mom new to the country takes care of our herd.With kidos benies could clear $9k per month total .Auntie send back home a few years could allow her subsidized apartment rent to a cousin at a discount . We love uncle Sunny Dayz and this beautiful country. $40b will allow for more good stories.

#175 rc99ar on 11.22.17 at 9:52 pm

More supply. Laneway houses, nanny suites, basement appartments, multi-unit. Just build it all. Treat all capital gains equal. Encourage foreign investment, DON’T tax it. CMHC please don’t insure any mortgage default above 10-15X probable annual rents. List an ETF linked to regional home prices or default rates so people can hedge some exposure and we can actually bet against home prices.

#176 Smoking Man on 11.22.17 at 9:54 pm

DELETED

#177 Terry on 11.22.17 at 9:57 pm

Extra …. Extra ….. in other news unrelated to today’s blog post …………. the rumor going around in London today is that Labatt’s Breweries will be announcing tomorrow that they are going to close their downtown London plant!

Stay tuned ………. ?

#178 Smoking Man on 11.22.17 at 9:59 pm

DELETED

#179 CalgaryCarGuy on 11.22.17 at 9:59 pm

Re #133 by Ace Goodheart
Statistically, most homeless people are actually men.

——————————————————————–

Men???!!! Save your breath Ace. Canadian society is all about women now. You must not have got the memo from JT.

#180 Yanniel on 11.22.17 at 10:01 pm

I apologize for my previous comments. Please, don’t ban me :-(

#181 Smoking Man on 11.22.17 at 10:03 pm

DELETED

#182 X on 11.22.17 at 10:03 pm

Keeping in mind politics….

1. Couldn’t the Liberals eliminate the ability to borrow from the RRSP for home ownership, under the guise of most Canadians haven’t saved enough for retirement, this will help all Canadians in retirement, along with increased CPP, also brought to you by the Liberals. (not mentioning the fact that it is how a lot of Canadians come up with an actual down payment for a house) Also perhaps mentioning that the Conservatives introduced this (I think) and throw them under the bus for being so fiscally irresponsible.

2. Nix the 30 year loans. Period. Blame the Conservatives, saying it was bad policy that simply didn’t work.

3. Taking that a step further, perhaps they could revers the CMHC insurance and the Conservatives minimum down payment reduction, and increase it back to 10%. Publicly telling Canadians that the average Canadian should not be on the hook for someone who has purchased with so little down/saved, that it isn’t fair to the average Canadian, reverse it to the traditional norm, blah, blah, blah, or to simply blame it on bad Conservative policy.

Personally, I think the Liberals should do all 3 above. You want normal prices, reverse policy back to the norm. Once the average5 yr closed mortgage is in the 6% range…get rid of the 2% additional qualifying thingy.

4. Another option. Legislate, all housing transactions to be registered through a gov’t operated MLS. Everything is public. And freely available for research of information to the public. However to register a property for listing, there should be a fee to have it listed for 60 days. The listing fee should be enough to cover operating costs. The listing fee should discourage multiple listings of properties. The registry should provide the public with apples to apples comparison for monthly stats, and not the misleading frankenumber (did you trademark that Garth) that CREA provides.

The Liberals also desperately need money.

5. Tax sale of 2+ properties, blame it on selfish people and their greed. (which is total BS, and I hate this option, in the sens that people will probably do whatever they can to avoid the taxes….not report the sale to CRA, sell at purchase price + suitcase of money, simply not sell – which is not what the gov’t wants, that and it isn’t fair to anyone who has taken the risk to buy with leverage and rent it out to make a buck)

6. Tax all empty houses. All. Including cottages. (Dumb, I would love a neighbour who paid their property taxes, yet didn’t consume anything, thereby reducing my tax burden)

Honestly, I know the Liberals need money, as they seem to think the taxability of Canadians is endless. But no more taxes. Enough. I don’t mind giving people a hand up, not a hand out. At a certain point people have to help themselves and take responsibility for why they are where they are in life.

#183 Solution Finder on 11.22.17 at 10:07 pm

Couple of quick suggestions:

1) Make airbnb a crown corporation and promote it
2) Lower interest rates to 0.01% so more people can get more money to buy and afford housing
3) Set min required down payment to 0%
4) Raise taxes
5) Increase refugee and immigration and asylum seeker quotas
6) Merge CMHC and Bombardier
7) Auction off #justin’s sweaty, moldy socks and use money to give interest free loans to first time home buyers
8) End TFSAs
9) Create marketing campaign to belittle those who rent and those who save money

#184 Anish Makim on 11.22.17 at 10:08 pm

A few better options.

1. End the capital gains exemption on principal residences. Or have a limit like the US of $500,000. This will slow some of the flipping we have seen.

2. Double property taxes with the increase deductible against your income tax. This will catch all the non-residents and people under reporting their income. That should create a nice fund to use to help solve the lack of housing problem.

3. Allow open bidding for Community Housing repairs. Currently too much is spent on unions and bureaucrats.

#185 DON on 11.22.17 at 10:11 pm

Let’s talk about one of the real ‘root causes’.

Got TV free TV for three months (Been living without cable for for 10 years – refreshing as I can’t be forced to watch utter crap…pure shit in most cases).

So I turn on CBC news and for FFS! – the weather person states, ‘it’s raining and when it…rains river rise and run faster’ I kid you not! – this stopped me in my tracks, that after watching a news story on a wax version of T2, people can take a selfie with.

NO news on the state of the economy, business activity, international affairs etc etc. I take it that’s why CBC has models speaking the “news” The news is no longer news – it is pure distraction. Lacks quality investigative reporting enabling an informed public on a range of topics.

#186 m212 on 11.22.17 at 10:11 pm

Agree with #98 BlogDog123 & #144 Smoking Man…

The solution is to increase the supply of housing. Instead of giving peeps money for beer and popcorn, use the cash money to building residential units. Completely shock the areas that need it the most.

#187 Sydneysider on 11.22.17 at 10:13 pm

Suggestion: take the approach of the Singapore govt.

(a) Invest in a public housing corporation that can actually deliver affordable dwellings, almost in real time. Acquire land compulsorily for the purpose (with compensation) if necessary. Alternatively, pay Singapore’s HDB to do the job.

(b) Put a tax on flipping.

(c) Ban foreigners from buying houses, but encourage them to buy condos.

I’m guessing these measures, if announced, would solve the problem in about 1 month.

#188 SimplyPut7 on 11.22.17 at 10:14 pm

Raise rates? End mortgage insurance? Nix the capital gains exemption? Bigger down payments? Thirty-year loans? What?

—-
1. Keep raising rates, speculators need to know the real cost of keeping homes vacant and having large lines of credit.

2. Bigger down payments, too many people bought homes without understanding how much of a sacrifice homeownership really is. Many people thought their homes were like financial securities trading on a stock exchange. When the market tanked in March/April in the GTA, they didn’t understand their contractual obligations were not like a stock they could sell quickly or cancel their order when prices started to tank.

3. Better training at mortgage brokers. I am not sure how some of these speculators got their loans, but not enough questions were asked about what they planned to do with the large amount of money they were receiving. When large amounts of money are being withdrawn from the credit line, banks should be obligated to treat those loans in a similar fashion to a loan not secured with the borrowers’ home, to ensure they would give that amount of money to the person if their house was not used as collateral for the loan. Branch employees should know their client and warn them if they think they are heading into financial trouble due to their speculative behaviour in the housing market or excess borrowing to purchase items that depreciate fast (e.g. cars and home renovations that become dated and worthless over time).

4. No to longer amortizations, they are just a false sense of security and make people think they can afford to take on more debt because their payment schedule is longer. This is similar a problem in the auto industry with their 84 months finance payments.

5. Builders should be encouraged to develop purpose-built rentals, to increase the rental vacancy rate in the major cities back above 4%, as well as build more commercial properties in the GTA, to bring the vacancy rate back above 10%. Lower rents mean people will have money to save for retirement and support the city they live in (e.g. entertainment, restaurants, shops) rather than households spending most of their income on housing costs. More commercial properties mean small business owners will have more opportunities to enter the market and be able to move or expand as the business grows. The government would also collect more tax revenue from all the new things people would be able to spend their money on, instead of giving it all to their landlord or mortgage lender to pay for housing costs.

6. Improve infrastructure so people can live in more cities outside of Vancouver and Toronto and easily commute to work. I have family members who can live in Pennsylvania and travel to New York City for work because they have cheap and easy access to trains and highways that lead into the city. If all the electric vehicle fanatics are correct you won’t need to worry about increased pollution from cars on the road as all vehicles will be zero emission vehicles in the next 20 years.

This would decrease the need for housing in Toronto and Vancouver as families would choose to have detached houses in other cities and commute to work, as the cost of these homes and transit costs would be less than owning a condo in Toronto or Vancouver. Speculators would not be able to easily drive up all areas at once because there would be more than enough homes for everyone who wants to buy to chose from.

If prices did not increase double digits year-over-year over the last several years due to lack of supply for people wanting a home for a primary residence, the number of people holding on to vacant homes in the GTA and YVR would be a lot less because there would be fewer opportunities to speculate and make a quick profit.

We would have a more stable housing market like the cities outside of new york city or the state of Florida where thousands of Canadians own homes and no one there complains about the Canadian speculators taking all their land and keeping homes vacant for 6 months for the year.

#189 BossHogg on 11.22.17 at 10:20 pm

We have rent controls, at least in Ontario. Create a Home buyer plan similar to RRSP where the rent paid will be taken into account to give tax back on the rent paid and held in the HBP with the government which can only be used once to buy own home. The government does not have to spend loads of cash to solve the home ownership issue.

#190 Zamil on 11.22.17 at 10:23 pm

Garth, you talk too much.

And the answer is obvious, raise taxes on second, third, fourth houses to biblical proportions.

#191 Cash is King on 11.22.17 at 10:25 pm

As an employee of a Non-Profit Housing Company it appears that my job security is now guaranteed.

Ditch the idea of building more “Social Housing.” The current stock of Social Housing in Ontario (Thanks Bob Ray) has reached 30+ years and most are in need of complete retrofitting which they are unable afford. This does not include your local Cities housing stock, which is also requires billions of maintenance.

Allow Private landlords more access to Rent Subsidies. Make it mandatory that recipients of Ontario Works (welfare) and Disability Support must have the rent paid directly from their cheque to the landlord. The landlord MUST pass yearly inspections performed by City by-Law officers and Local Fire Departments.

It is time to address financially, the lack of resources for people with mental illness; the large percentage of which are young males. Who “projects for women, girls and their families” are not being addressed with this announcement.

#192 Smoking Man on 11.22.17 at 10:25 pm

3 deletes in a row.

Obviously you hate words tide to the times or your a pal.

To at the moment to form a cohesive concussion.

Still love you you ugly old faced man with a salt and peeper bread.

Shave the bitch and gain a few year younger.

Not sure going young is a good strategy in today’s mental world

#193 Trojan House on 11.22.17 at 10:25 pm

Whatever happened to the time when families all lived under one roof? Grandparents, parents, children maybe even an uncle or an aunt or two. Housing was handed down by generation so the kids always had a place to live.

$40 billion, huh? Somehow they will cock it up. Government created this mess and they will create a new mess with this scheme.

#194 mike from mtl on 11.22.17 at 10:28 pm

I am not against public housing at all. However, access to information to real data on housing is dearly needed. Considering that is by and large, the biggest purchase any Canadian citizen makes, everything must be funnelled via a realtor (along with his/her vested interests) as if the year is 1887.

This is completely archaic and supports an entirely unregulated sector. Our neighbours to the south have mostly done just this and their real estate market has not seen much in the way of detriment.

Simply make data access to whichever local land registry open, like post codes are, for an informed decision.

As well as why does it appear as investing in financial instruments deem such scrutiny down to the penny, and in the same, real estate be given a free pass? Naturally given the choice, anyone would put all their net worth in their biggest expense and it is completely tax free – hence the quandary arrived to now.

Self perpetuation of a similar theme of low interest rates and the above over nearly two decades has brought us here.

#195 crowdedelevatorfartz on 11.22.17 at 10:29 pm

@#41 Lisa
“Government intervention, in this case, is clearly the way to go……”
++++++

Mmmmm Hmmmm

Govt intervention will fix everything….

Checked out the new Public Works Canada Pheonix Payroll System lately?

A classic example of govt beaurocracy meeting govt sloth and unaccountability.
A billion dollar screwup and no one is fired and more money is thrown at the problem……..

#196 Smoking Man on 11.22.17 at 10:30 pm

This song made me A WRITER whats your song kids?

https://www.youtube.com/watch?v=tAGnKpE4NCI

#197 theoryAndPractice on 11.22.17 at 10:31 pm

if they want affordable housing they can do that without wasting $40B of taxpayers money:

– Make only first-principal-house gains tax free, if occupied by the owner more than 5+ years, and any subsequent ones should be taxed on gains no matter what.
– Tax at 99% of the capital gains, or at 15% of house price whichever is bigger, if the house changes owner before initial sale from builder is closed. Revoke builder license if this is done underground and charge the house price to builder as penalty.
– Remove CMHC Insurance
– Provide public access to Real Estate and Land Registry Data.
– Alter CREA rules, Unique MLS# for same address as long as the owner stayed same, and history of any change must be openly trackable for same MLS#
– Alter rules make, real-estate lawyers to involve at the beginning of the process as well as closings not real estate agents.
– Prevent same real estate agent to represent buyer and seller at the same time
– Prevent same agency to represent buyer and seller at the same time

#198 acdel on 11.22.17 at 10:32 pm

Every comment I have read this evening can be managed through a blockchain ledger; no not bitcoin but a ledger that is the mind behind all this. I am just a normal idiot; there is more then enough young bright minds that can make this happen!

#199 BM on 11.22.17 at 10:35 pm

The easiest way to fight high real estat price is to have 3% property tax.

#200 My dog has issues on 11.22.17 at 10:35 pm

Make mortgage interest tax deductible.

#201 bubu on 11.22.17 at 10:37 pm

1) No more CMHC
2) Increase down payment to 25%
3) Off shore investors should not have access to Canadian Bank mortgage system
4) Pay 90% taxes on capital gains if the house is sold in less than 3 years, 75% between 3 and 5 years , 50% 5 to 10 years, 0 taxes after 10 years..

#202 cramar on 11.22.17 at 10:37 pm

Dear Mr. Trudeau:

As the Prime Minister of Canada you are responsible for the financial direction of the nation. Will you please stop freely spending our tax money on irresponsible ideas ranging from a $5.6 million temporary Parliament Hill skating rink to a $40 billion attempt to mitigate the housing situation across Canada.

To be fiscally responsible is to get the best return on our investment. I’m sure that there are experts that have a better grasp of how to address housing. It doesn’t matter what political persuasion anyone is. What matters is the quality of their ideas. Why not start with Garth Turner for recommendations?

You might try asking for ideas and actually follow up on the best suggestions.

#203 RG on 11.22.17 at 10:41 pm

T2 = Tax taxpayer twice! Knows only one strategy.
Seems very confused about the distinctions between:
– “trust fund millions” rich and “earning 200K/small business” rich
– “welfare” of middle class and “freebie handouts” on honest taxpayers’ back (which are beginning to look like the boutique of conservatives tax deductions which liberals righteously and indignantly cancelled)

As for housing, it is called higher tax rates and no to easy credit!

Unless Liberals go back to being a TRULY centrist party, I am done with them!

#204 bubu on 11.22.17 at 10:41 pm

Forgot one more… if you are not permanent resident pay additional property taxes to make up the difference in contribution to the system. A local investor is going to spend the money in the Canadian economy… a foreigner might not….

#205 RG on 11.22.17 at 10:45 pm

….sorry, should have read….

As for housing, higher credit/mortgage rates (not tax rates )

#206 Long-Time Lurker on 11.22.17 at 10:46 pm

I’ve been thinking about this for the last two hours now. Activate a speculation tax and let ‘er rip. That seems the fairest way to pop the housing bubbles and get things affordable again.

Thinking about fixing the government is like looking at the Gordian Knot. Now you’re making me wonder if the old Reform party had the right ideas? Thanks a lot, Garth.

More spendthrift ways by Justin: the guy’s never done a real’s day work in his life or he’d know not to waste money.

Some good ideas here from many blog dogs.

#34 Debtslavecreator on 11.22.17 at 7:29 pm
To Rt.Hon JT

Good

#106 Liquidgoldzandz on 11.22.17 at 8:22 pm
Ok Blog Dogs

I live in Fort Mac and been renting for 3 years. Real Estate has gone down a lot in these parts.

There is a foreclosure in the building I rent in. The building is 3 years old. The foreclosure is 200K (original was close to $400K now its $200) less than what the person paid. I did the calculations and my mortgage, condo fees, property tax, electricity, cable and internet would come up to the same amount as my current rent amount. The unit is a 2 bedroom and I rent a 1 bedroom.

Do I keep renting or do I buy it and treat it as rent? I plan to stay in Fort Mac for a long time.

>If you think Fort Mac has a future then it sounds like a good deal.

#207 Smoking Man on 11.22.17 at 10:47 pm

Going against the school system.

https://www.youtube.com/watch?v=v2AC41dglnM

#208 Mixed Bag on 11.22.17 at 10:48 pm

Why CMHC was allowed to insure such large mortgages makes no sense, as this allowed the banks to offload the risk but keep the gain, approving mortgages they shouldn’t have. It should have been obvious this would have led to much higher prices. Unless this was the intention all along.

There will be no deflowering.

#209 Hugh Janus on 11.22.17 at 10:50 pm

DELETED

#210 Long-Time Lurker on 11.22.17 at 10:53 pm

I notice my writing errors now. Sorry.

#211 ER on 11.22.17 at 10:59 pm

Get rid of CHMC, or use it only to help veterans find housing, as it was meant to do. That will fix the housing issue pretty quickly. Also, CRA should target all the data Air BnB has, impose penalties, give the data to cities to charge accommodation tax, etc; that will loosen up housing pretty quickly.

#212 For those about to flop... on 11.22.17 at 11:06 pm

A few people have written about banning the realtors from representing the buyers and the seller in the transaction.

I wrote a post about a week ago stating that this is going to be reality in British Columbia in mid March 2018…

M43BC

#213 The Fat Lady on 11.22.17 at 11:07 pm

VOTE Trudeau/Morneau = The ISIS cover-up state. CanadISIS…….. We’ll make all mistreated terrorists Millionaires.

#214 Middle Class on 11.22.17 at 11:10 pm

Dear Mr Trudeau,
Congratulations for your National Housing Program.
And it would be great if you also helped the MIDDLE CLASS:
Could you somehow stimulate the construction of high rise buildings in Vancouver? The renters and condo buyers are stuck in bidding wars because there is simply not enough housing.
More supply should drive the prices down for EVERYBODY!
Thanks.

#215 John from Alberta on 11.22.17 at 11:10 pm

Dear Mr. Prime Minister,

Tough love is, still, love. Please make the right choices that will permit others the opportunity to make right choices as well, without interference. Please show more trust that Canadians can look after each other. Encourage financial reform by demonstrating it first, then educating us on it second. If you need some guidance on how to educate us on financial reform, Garth Turner has some excellent ideas beneficial to ALL Canadians.

John

#216 M on 11.22.17 at 11:13 pm

Gartho baby,
All that keeps economy going is printed money.
Boyz down south lift rates in such way that while the nominal rates appear to go UP…the real rates actually go DOWN or remain the same. It’s “edge of the knife” acrobatics that floods the market with cheap $.

The policy is the same across the board from Swiss to Jap.

In Canada the only way to inject $ into the market is housing. This is the reason behind the policy.
Desperation not ignorance.
..of course it will not help. We live “Tesla times” i.e. broke but full of wishful thinking and empty words on two or three part time jobs.

#217 paulo on 11.22.17 at 11:15 pm

some thoughts :

Limit capitol gains exemption on residential property to a once in a lifetime exemption, provided the claimant is 1) a citizen 2) has owned the property for not less than 7 years.
all others subject to normal applicable income tax.

Consider amending banking and loan regulations to completely update residential loan procedures adopting a us style system including 30yr fixed mortgages,interest cost deduction dependent on house hold income, elimination of the capitol gains deduction
and a one time grandfathering of the current capital gains deduction non transferable. current property owners to make a decision on keeping the capitol gains exemption, or forfeiting to take advantage of interest cost deduction no double dipping.

terminate CHMC insurance completely.
make mortgage insurance a private regulated insurance
business that sets its own regional rates and down payment requirements= let the market determine risk premium and liability.

Put in place federal legislation requiring anybody looking to rent short term accommodation on airbnb or like similar operation be required to obtain a federally issued permit to do so including the requirement that regional/provincial hotel tax levies are included in rates charged and a requirement that operators such as airbnb or similar confirm that there clients have said permit before accepting any listing or be liable for taxes or levies due.

close stupid loopholes in provincial rent control regulations such as British Columbia’s lax law allowing predatory landlords to issue 1 year leases with specific move out dates: really you stupid A###s

#218 Fish on 11.22.17 at 11:16 pm

Well I guess I have to find my red shoes and click my heels together

#219 OttawaMike on 11.22.17 at 11:19 pm

I’m in Montreal to do some Christmas shopping. Restaurants and bars packed on Weds. night and I’m not even in the tourist district.
No shortage of discretionary spending money here.

Must be the cheap housing freeing up money.

#220 Fake News Reader on 11.22.17 at 11:19 pm

@Terry

Where did that rumour about Labatts come from? Did it come from your bumhole Terry?

#221 Reformed Snorfler on 11.22.17 at 11:21 pm

In my opinion, CMHC has for years contributed to inflated home values by enabling demand where there shouldn’t be any by encouraging low down (and for a while, no down) payment mortgages. An obvious, but likely politically unpalatable solution would be to privatize or dissolve CMHC and allow the invisible hand to determine prices. If CMHC must be kept, it should re-visit the price limits that existed in the 1990’s and 2000’s. CMHC would only insure low-ration mortgages up to $250,000 in Toronto, Vancouver, and other major cities, $175,000 in northern regions, and $125,000 in the rest of the country. Inflation adjusted these numbers would be roughly, $340,000, $240,000 and $170,000. With such limits, the prices for starter homes would eventually match what the kids could get approved for.

#222 Linda on 11.22.17 at 11:23 pm

Re: $400 per month, so problem. Set up a $200 per pay deduction decades ago, so always have some extra cash on hand when sudden emergency expenses come up.

As for the 40 billion for housing, while it is laudable to try to reduce or eliminate homelessness the optics of this announcement don’t do much for me. First, the program isn’t supposed to begin until 2020, after the next federal election. Second, the presumption is that the provinces are going to match, dollar for dollar, the federal allotment. Given how most if not all the provinces are running deficits, don’t know that they’d be willing to throw in a matching amount of funding to help the current federal government win the next election. Also, just who makes up the 300,000 households? And is the $2,500 mentioned in Garth’s post per month, or per year? Because $2,500 for 300,000 households is $750 million if paid out only once per annum; if paid out monthly that totals 9 billion per annum just for rental subsidies. The 40 billion is supposed to be handed out over 10 years, so the ‘budget’ is 4 billion per year. Even if the provinces did match dollar for dollar per annum, that still means a budget shortfall of a billion dollars per year just in rental subsidies. So how are the 100,000 new housing units going to be paid for?

Which brings up another issue. Where are these housing units going to be built, who is going to build them & what safeguards will be in place to ensure that the contractual process is fair, open, transparent & accountable for all funds awarded/spent? Money like that, you just know that there will be plenty of folks looking to line their pockets at the taxpayers expense.

#223 OttawaMike on 11.22.17 at 11:26 pm

Oh yeah. Staying in an airbnb loft this time instead of the Queen Elizabeth Fairmont.
Right beside old city hall. Bigger suite. Half price of the QE.

Yes we need more social geared to income housing. Our public housing stock is atrocious. No spending on it in 40 years. T2 is just playing catch up.

#224 Hugh Ja. Dyck on 11.22.17 at 11:31 pm

Interest rates will not be raised much in Canada folks. It’s the main cause of the problem and the main solution and Poloz won’t raise em much. Apparently the Canadian economy is “surging” according to the fake media but yet he’s barely budged on rates.

You can’t have it both ways Poloz!

#225 karl hungus on 11.22.17 at 11:39 pm

True capitalism would mean the banks are actually on the hook when people bail on their mortgages. Lets start with that. Why is CMHC even a thing?

#226 Newcomer on 11.22.17 at 11:44 pm

The problem was caused by the government pumping money into the bottom the market. It will not be solved by pumping more money in, even lower in the market. Everyone knows how to solve the problem. It’s only a question of political will.

#227 Mrs Hubris on 11.22.17 at 11:45 pm

Dear Justin, Yours disgusted…..?

Government proposals on housing refuse to address the fact that grossly inflated house prices in Canada need to fall and yes, that needs to involve financial pain for house owners who have not earned their windfalls, speculators and developers, and governments. It is not just the 6% who cannot afford to live in urban Canada, but increasingly ordinary people and particularly young adults. Yes – there are increasing numbers of homeless but that is only a small part of what is a national disgrace – the national obsession with money and housing. Before young people can remain in the cities, afford to live, have families and regular lives, yes, you need to take action to bring house prices down. Instead you are continuing to pump money in at the bottom so speculators (half of all Canadians?) and obscenely wealthy realtors and developers are guaranteed to make more money as this thing continues to inflate. You, and the government before you, have no backbone and are morally bankrupt. Your entire society has housing sickness and all you can do is foster bacteria. Shame on you! There are many places in the world where this is not normal and oddly, I often read you’re “world class”. As an immigrant, it seems to me you have all lost sight of reality. You deserve this bubble.

#228 Sharon on 11.22.17 at 11:48 pm

When I came to Canada 15 years ago I heard that there is only 4 ways to make tax free money: weapon , prostitutes, drugs and realestate….I choose last one (the safest)…We need to tax personal recidence…Tax free should be only gain tied to inflation…the rest (speculation gain) should be taxed

#229 The new working poor on 11.22.17 at 11:48 pm

Government policies have destroyed our future. Husband and I are youngish professionals living and working in YVR. We make $300k a year in employment income which is heavily taxed and yet we can’t afford a home in our city. If we can’t make it work without putting out entire financial future at risk, who can? Justin, please stop trying to be Robin Hood and start looking out for the middle class Canadians, it is time to really rethink how we do things instead of throwing money at problems.

#230 Sharon on 11.22.17 at 11:50 pm

When I came to Canada 15 years ago I heard that there is only 4 ways to make tax free money: weapon, prostitutes, drugs and realestate….I choose last one (the safest)…We need to tax personal recidence…Tax free should be only gain tied to inflation…the rest (speculation gain) should be taxed

#231 Giancarlo Consoli on 11.22.17 at 11:52 pm

Increase the minimum down payment. People don’t know how to save and that is something that needs to be established before homeownership. People think for their homes as their total asset value. Everyone deserves a roof over their head, yes. But that doesn’t mean they have to own that roof, especially if they’re not ready. Say what you will about the previous generation, my parents matured quick and learned the value of money and how to save quick. Your birthright is not your dream home by 28.

#232 genbizx on 11.22.17 at 11:54 pm

implement speculation tax and enforce, follow u.s. rate increases lock step, instead of nauseating and patronizing cheerleading, educate canadians on the extreme challenges facing the country,
remove real estate boards’ ability to control, manipulate, suppress property stats…(ie days on market, previous sales prices…), fire bill

#181 -good ideas

#233 TKW on 11.22.17 at 11:55 pm

i have seen so much shit hit the fan recently concerning money and men and houses…don’t know where this is going Garth but have to agree”’this will not be good for a
lot of folks staring into huge house payments…

#234 Zed on 11.22.17 at 11:56 pm

Just give one Bitcoin to every household that does not own property, not too many of those in Canada so less than $40 billions, let them sell that Bitcoin, then they could buy: a home cinema, $200 running shoes, $600 purse, a few useful clothes…

They would feel part of maintream Canada for a few days and revert back to their demand for entittlement (i need that too!).

Seriously, just build social housing. If you are poor just accept that you are being cared for by the governemt

#235 Alberta Ed on 11.22.17 at 11:57 pm

Boondoggle. T2 couldn’t run a lemonade stand, much less a country. The $40 billion (IF the provinces cough up their share) might as well be flushed down a toilet.

#236 Sean on 11.22.17 at 11:58 pm

Speculators tax.

I honestly have 4 different family members asking if I want to rent one of their properties. Everyone is investing in RE, but it should be for living in.

If the Feds took this position and imposed a spec tax and ensured the CRA was collecting on sales gains – we would have no more bubble.

#237 PW on 11.23.17 at 12:01 am

Hopefully this answer the call…

Get the balance right and deter speculation. Do this through a number of government policies that will sensibly guide the market forces in the right direction to solve our national housing crisis. Some guiding principles…

1) Come up with housing model and national plan for next 10 years and predict the number of housing units needed based on birth rate, death rate, immigration, trends (e.g. people living alone, living longer) and regional preferences.

2) Encourage supply (both rental and properties (family as well)) with incentives to meet demand in the areas most needed. If supply is short, then adjust immigration numbers until supply can catch up. Do this sensibly so that cities have reasonable density, but not super high density that makes the city unliveable.

3) Deter domestic speculation with harsh disincentives (e.g. speculation tax for flippers, Airbnb ban), etc so that housing units are no longer treated as commodities, but places to live. Put a temporary ban on foreign speculation (for those who do not live here and pay taxes); its disruptive for folks trying to live here .

4) it is understood some folks will choose to rent even if house prices becomes affordable. This is where you apply control policy.

The belief is if supply can easily meet demand (without being impacted by speculation), then price should restore to its tradition equilibrium (3 to 5 times household income) and as such, we can affordably house all people living in Canada without throwing so much money at the solution.

#238 Staying the Course on 11.23.17 at 12:04 am

Tell the children the truth

#239 Ryan Perich on 11.23.17 at 12:04 am

The most vulnerable could use a roof, safe warm place to stay. A commune like Lister hall residence @ University of Alberta is a very efficient use of land, use some government land to build a 10 story building,
have 3 or 4 “arms” of very small apartments (about 10 per arm) that have a communal bathroom (3 showers, for men 1 urinal (to the floor so little kids can use), and 2 toilets, for women 3 toilets, and have each “wing” connect to a central point with 3-4 TV’s. It’s not for life, it’s to help people get on their feet to move out.

Free money to free loaders = raised rents for everyone else who is working, can work, or wants to work.

#240 Allan on 11.23.17 at 12:07 am

Have a bubble bursting correction combined with non-recourse lending, similar to what happened to Japan.

The downside is the terrible toll it effected from 1990s to 2010s on many young Japanese of that period who took out large loans to step into homes hours from the cities centers that many salarymen work, and are furthermore locked in by that negative equity.

The positive side is that the current generation of Japanese graduates and young families have relatively low problems finding rental housing, and a majority of those who’s worked for a few years with some savings have relatively reasonably priced housing to choose from.

Some people may say that 20 years of real estate deflation is too high a price (especially for the boomer generation in the case of Japan).

But the question to pose to the Canadian (and pretty much the Australian) first home buyers is: do you prefer an average dwelling of $500,000 at 0.5% interest ($375/week), or $1,000,000 at 3.5% ($1125/week)?

#241 n1tro on 11.23.17 at 12:07 am

$40B to help poor folks have affordable housing. Nice touch making the announcement in front of a low income housing project.

My message to our prime minister is to take the $40B and build ghettos…I mean affordable housing… In neighbourhoods where his friends and buddies live. Us regular folks have enough problems without having to deal with increased crime rates linked to these “affordable” shelters.

#242 Dave on 11.23.17 at 12:13 am

I live in Whistler BC myself and my wife have good jobs that earn good money. We may live in the town with the highest real estate in Canada. We have zero chance of ever owning a single-family home.(we do own a condo but the move up market would cost minimum 1 million more) I think a tax that limits the free capital gains on a residential house would be the way to stop flippers and foreign buyers mostly Americans in my town. If you got something like 20,000 per homeowner over the course of a Lifetime on a home tax free. And need to own a home for up to five years to qualify for the tax-free portion. I think that would keep real estate prices in check and more within the means of what people can afford based on their earnings not speculation. Speculation should be left for Bitcoin not residential real estate.

#243 Guillaume on 11.23.17 at 12:14 am

Regarding house affordability you should try the 20/20 rule : 20% minimum down payment and 20 years max amortization. Second, Bill and you please bring back your money and invest it in Canada. Thanks

#244 Ricky420 on 11.23.17 at 12:14 am

Don’t legalize it !

#245 N V Landlord on 11.23.17 at 12:14 am

We have SOLD our 2 rental condo properties. We do not want to be landlords to tenants who may be allowed federally to grow their own marijuana, to smoke medicinal marijuana for medical reasons, nor do we wish anymore to pay 50% OR MORE of the rental income to the CRA in taxes. We are better off putting the million dollars into Canadian dividend paying companies so we’ll have tax favourable income to live on in our retirement years.
My advice: Provide more co-op housing for middle class families. Reduce red tape for development permits in smaller cities. Encourage families to LEAVE YVR and Toronto, by providing employment in smaller cities. Give tax incentives to businesses who develop their businesses away from the urban centres.

#246 My 2 cents on 11.23.17 at 12:15 am

I am a multimillionaire, having done well in business, yet my wife and I four years ago decided to rent, not buy. We refuse to buy until markets have returned to the historical normal, modulo modern-day nuances. It will happen by itself in the next few years. Our government will not take any of the measures you mention, Garth, but they will be forced to devalue the CAD by not raising rates further; inflation will happen as a result, creating even greater pressure on government; at that point things will be even more ugly. To avoid that, our govt should have tightened mortgage rules already years ago. And, frankly, it is time to slaughter that holy cow: tax-free profits from the sale of one’s primary home.

#247 Ace Goodheart on 11.23.17 at 12:23 am

RE: #177 CalgaryCarGuy on 11.22.17 at 9:59 pm
Re #133 by Ace Goodheart
Statistically, most homeless people are actually men.

——————————————————————–

Men???!!! Save your breath Ace. Canadian society is all about women now. You must not have got the memo from JT.”

It’s an inconvenient truth. Most of the homeless people in Canada are male.

You will find many, many children living in poverty. That is the most common way for a child to live in this Country. These children however do not all live with their mothers. Quite a few live with their fathers. A number also live with relatives. Some of the poorest children in Canada actually live with their grandparents.

in terms of homeless “children” the most common age for homelessness in youth is age 15-16. But they are not really called children at that age, they are referred to as “teenagers” so they would not really qualify as either “women” or “girls”.

But what is a trust fund kid going to know about homelessness? He’s trying……..

#248 Jon B on 11.23.17 at 12:29 am

I’d post a comment, but he’ll have hit the delete key long before he gets down to my message.

#249 Upper Class Sass on 11.23.17 at 12:31 am

-end CMHC insurance
-crack down on unregluated lenders
-prevent banks from allowing payment vacations which are skewing numbers reported on missing/late payments

-increase first time homebuyers plan to 100k

Oh and stop wasting money on stupid things like this, having the floodgates open for immigration (allow immigration but be selective to only the best skilled people who will have the most positive impact in canada)

Finally eradicate personal invome tax, only tax corporations and lay off half the CRA who won’t need this. Programs such as the child tax benefit, orphans benefits etc should be ended. Let people opt out of CPP and EI programs.

#250 rainclouds on 11.23.17 at 12:39 am

Speaking of excessive debt. T2 may be pleased to learn Canada is #1

https://wolfstreet.com/2017/11/22/private-sector-debt-implode-next-us-eurozone-japan-china-or-canada/

Where is that competition tribunal decision we have been waiting 10 YEARS for?

http://www.howestreet.com/2017/11/20/lawsuit-threats-from-realtors-keeping-you-from-the-truth/

We are being played by unscrupulous people and led by fools, adjust your life accordingly

#251 Newcomer on 11.23.17 at 12:47 am

#69 Smartalox on 11.22.17 at 7:51 pm
————
….An extra $400/month? I send twice that much to mine and my spouse’s RRSPs
….
(combined household income $225k)

Why such scrawny RRSP contributions?

#252 Harvsquatch on 11.23.17 at 12:47 am

Nix the capital gains exemption

#253 Mrsa on 11.23.17 at 12:49 am

Maybe I’m naive, but I really think we need to stop living beyond our needs and teach children about reusing, trading, fixing items through our own examples. We sold our house, are renting, and I’m trying really hard to live minimally. I’m watching some movies and reading blogs about how to do better at this. We talk about it at dinner because I want my child to know that this Christmas is going to be meaningful. Maybe public service commercials or ads as most people have no idea how to calculate what proportions they need. It’s a crisis! What will we do with 1/3 of our aged population below the poverty line?

#254 dr. talc on 11.23.17 at 12:49 am

tell the United Nations to get lost
tell jeremy rudin to get lost
tell bill morneau to get lost
ban freemasonry nationally
scrap the green belt
scrap smart growth
scrap hst on new homes, condos and land
scrap every regional ‘conservation authority’
fast track new subdivisions of ‘single family detached houses’

the job is done, gta prices will fall, the real economy will boom

Any other questions?

#255 Fiendish Thingy on 11.23.17 at 12:50 am

Easy one step solution to solve housing insanity, and save taxpayers money instead of wasting it:

Get the government out of the business of insuring mortgages- give one year notice, shut down the CMHC to new loans.

#256 A man on 11.23.17 at 12:54 am

1. 100% inclusion of capital gains, exemption allowed after 8 years of time.
2. Renters should declare paid rent in their tax filing and that’s how they should he given a refund of this $2500, while land lords have to declare the same as income.

#257 Robin on 11.23.17 at 12:58 am

Mr. Trudeau:

Housing needs to stop being treated like an investment. It would be a bitter pill to swallow, but may be that the capital gains exemption on your primary residence needs to be eliminated. This is a taxable benefit that is not available to renters.

#258 Blobby on 11.23.17 at 12:59 am

This is easy!

1. Change loan requirements. Mortgage can be no more than 3x income, or 2.5x joint income. (This was actually rule in Germany when I bought a house years ago)
2. Tax speculators heavily if they sell within x period of time of buying.. I blame tv for this!
3. Regulate the real estate industry. No more frankenumbers. Same rules for them as the investment industry, have people properly informed about what is really happening
4. Stop media reporting real estate propaganda as fact, yes I know the majority of a news papers ads are for real estate, and they need to keep that industry sweet. .. but rules stopping advertorials would be nice.

I think that’d be enough. Hell #1 would sort out most the problems with one swoop.

#259 Blobby on 11.23.17 at 1:02 am

5. Stop insuring bank loans with chmc, have banks take on all the risk.

#260 Fake News Again on 11.23.17 at 1:03 am

Well Garth I have to say you have balls of steel by sticking to your guns about “mythical foreigners” in places like YVR.

#261 Last of the Boomers on 11.23.17 at 1:09 am

Glad you are doing Garth!

I have already sent many letters to the premier’s office and believe it or not I actually got a response back and they forwarded my suggestions to the housing and finance ministers! It really works to speak up!

I support many of the previous suggestions:

– graded capital gains exemption starting at 100% taxable if sold within 3 years, ending at 0 after 10 years.
I support the following:

– all initiatives that remove speculation, particularly in areas where rents are funding foreign investors and are disproportionate to income earned from local work.

– removal of the property tax deferral for all persons not working locally.

– restriction of foreign purchase of real estate in all areas where housing supply is limited and rents are not in line with income earned by the local population.

– No real estate purchased near schools with foreign capital. Zoning restrictions to limit size of houses near schools so the greatest number of families may take advantage of greater productivity of shorter commutes.

– sharing of information between government agencies such as border security and CRA to determine whether length of stay each year in Canada qualifies immigrants For benefits such as MSP, climate tax credits, oas. Investigate dis harmonies such as large purchase of real estate vs. Low income tax claims. ( I.e. Purchased $2,000,000 house while claiming $25,000 in income).

– disband cmhc and all forms of over leverage.

– farmland must be reasonably productive and homes on farmland must be restricted ( I.e. No more than 4,000 sq feet).

– heavily regulate Air bnb and all copy cats. If people are needing to supplement income in order to purchase a home, it means their over leveraged. Tax all rental and tax short term rentals at a higher rate. Tax all portions of the home generating income for the period of time it was rented as “non primary residence and therefore not subject to capital gains exemption.

– let foreigners bring their factories to Canada and produce goods here. Lease them land in rural areas and allow a percentage of workers to be accommodated by the employer on this land, and paid at wages competitive to those in their home countries.

– allow developers to develope towers of condos for foreign purchase in rural areas, if foreign capital is in need of a soft place to land. (But do not let it be in areas where the locals are unable to purchase or rent at 30% income).

– expropriate land/houses that have been proven to have been purchased with the proceeds of crime and renovate and respond these properties as mutifamily units for purchase or rent by local workers without affordable housing. Use the whistler housing society application model to determine eligibility and use this same restrictive model to cap gains and maintain the housing within this same pool.

Remember, once the land is sold to someone who is not producing within the area, or living within the country, you have reduced available supply and driven prices up for those that do live and work in the area.

Best wishes for success.

#262 Cdn Mom on 11.23.17 at 1:37 am

Some of these ideas are poorly thought out at best.

Capital gains tax on principal residence? Great, because everyone has kept all receipts for all renovations or improvements to deduct from gains. Not.

Capital gains tax based on how long you’ve lived there? So what happens when your company moves to Mexico, and you have to move to another Canadian city?

Encourage the elderly to renovate and rent their basement? Better work on provincial rental laws so they become no pay, no stay, unlike now.

Any new taxes on residents, for any reason? ARE YOU PEOPLE OUT OF YOUR MINDS?

Kill any new condo growth. Kill it, stomp it into the ground. Apartments and houses only. No more buildings full of 450 sq ft condos. Require all new buildings to be a mix of 1-4 bedroom apartments.

Change all provincial rental laws to hold ALL tenants accountable for rent (no pay, no stay), create a public bad tenant registry online, hold ALL tenants financially reaponsible for damages and lack of cleaning. Reinstitute damage/cleaning deposits. As it stands now, tenants on welfare or disability you CANNOT legally enforce collection orders.

Turf the current federal government if they can’t stop spending money:

1. outside the country
2. to buy votes

Cut current immigration levels by half for the next 5 years. Cut refugee acceptance to zero, for the next 5 years. They can’t afford to live here right now, and we can’t afford to pay their rent.

End house/condo ownership by companies/hidden owners, unless the owner is a proven, tax-filing resident. Multiple ownership ok for residents/citizens.

CRA must enforce tax against flippers. You either live in it (full or part-time), or file tax returns for rental income.

National house sale data registry online. Real time.

Increase mortgage rates 1% per year, for 4 years. That takes us back to historical norm territory. Jan. 1 each year, everyone knows it will happen.

End mortgage renewal terms for new mortgages as of Jan. 1. Interest rate good for life of mortgage. Jan. 2018 5%, 2019 6%, 2020 7%. Park it there.

#263 morrey on 11.23.17 at 1:38 am

do without Starbucks for a month. easy

#264 morrey on 11.23.17 at 1:39 am

ps. i see you didn’t like the fact i made over 150K on internet stocks ;-) Grin and Bear it

#265 Lurker on 11.23.17 at 1:53 am

Dear T2 et al:

Do not throw more good money after bad to try and fix policy errors. FIX THE POLICIES FOR FREE. How about repealing every BAD policy that was put in place to increase house prices:

-first time buyers borrowing from RRSP – abolish
– CMHC – abolish
– foreign students – have a small cap on the number permitted. Maybe 5% – 10%.
– Bank of Canada – abolish. Well maybe a stretch but interest rates should be set by supply and demand for money, not based on some unelected idiots whim.
– Home renovation tax credits – abolish if they haven’t been yet.
– Foreign buyers – people who do not pay taxes in Canada should be required to pay taxes in Canada. Foreign owners should pay 3% of assessed value per year unless they are paying income taxes in Canada.
– pre sales in foreign countries. Hopefully stops with the tax measures above.
– Capital gains tax on primary residence – need one.
– tax cheats. Those not reporting rental income or capital gains. Steep penalties that discourage it and relentless enforecement activity.
– realtors circumventing their professional standards or rules. Have some real enforcement and punitive penalties. Maybe previous 5 year commissions need to be repaid if offside on professional standards.
– FINTRAC needs a complete housecleaning of the entire organization. Put people in place who can keep the corrupt money out of the country.
– Money & Politics. Need toget the money out of politics. Decisions can not be made based on the strength of the lobby of the realtors, mortgage brokers, or developers.

Disclosure: I have benefitted financially, on paper, from the run up in real estate in Vancouver. However, the destruction on the local economy has been overwhelming. Owners and renters paying 40%-70% of their monthly take home pay on housing leaves no money to support any other parts of the local economy. Housing has sucked up all peoples discretionary funds and there is no money left to support a dynamic and diverse economy.

#266 BS on 11.23.17 at 2:04 am

I have an idea. How about deflate the housing bubble rather than pump more money into it?

This plan is like pouring gasoline on a fire expecting the fire to get smaller. More demand for land, more demand for construction resources, more demand for municipal permitting, more debt and/or money out of tax payers pockets. It is like the government has decided to jump in and participate in the housing bubble. All at the expense of tax payers.

The solution is not government funded supply. The solution is less demand and better utilizing the stock we already have. Let the private sector build the supply.

#267 cmj on 11.23.17 at 2:05 am

I’m furious to learn today that the government is going to give 40 billion dollars toward housing. How irresponsible they are with our money!

Government is becoming involved in areas that do not sustain our economy. It is also creating a pattern that when people make mistakes, the government will take care of it. The government is not doing our country any favors by creating this entitlement we have come to expect.

Our housing market was fueled by greed. In many cases, people have purchased added homes through their principal residence. Others have gone out on a limb and borrowed excessively. Parents have supported this Canadian dream of owning your home and it is a right of Canadian passage. It is really every individual’s financial responsibility. Many have made mistakes and I am furious that the government expects to step in and fix it. Why? Because they are fast forwarding to win votes for the next election? Otherwise why would they go ahead and perpetuate financial dependency?

We all make mistakes. Unfortunately mistakes are our best teachers. Stop rescuing people!!! In the 80s I was suddenly hit with 18-20% mortgage rates. My husband and I had to keep our heads above water with high mortgage payments and our business afloat at the same time for a period of 4 years. Then I also got caught in the housing greed with 3 investment properties in late 90s. Back then, it was also a fantasy that houses could only go up. Our rent from these investments weren’t even paying the expenses. We personally subsidized the cash flow to make the mortgage payments and carrying costs. Fortunately we got ourselves out of that mess and with NO help from the government.

This experience over 15 years did build a strong backbone toward financial freedom. We are now retired and are thankful to have not gotten caught up in this recent real estate frenzy like many people we know in the GVRD. We had learned the hard way and through this blog we are now fortunate to have a well balanced portfolio which includes a mortgage free home

I want this government to stop spending our hard earned money irresponsibly. Direct our tax money to ways that
will sustain our economy. If you continue to provide handouts from our blunders, your legacy will be raising many generations of Canadians who have the sense of entitlement dysfunction.

#268 fishman on 11.23.17 at 2:05 am

Average family affording average house? Its a race against time: immigration at 330k add foreign students,(there’a 125k in B.C. right now) TFW’s 110k, & 10year visa holders at a million. Millions of expat Canadians coming in if SHTF. Refugees? Must be 60,000 so far this year. I dunno but that number guaranteed isn’t going down. Thats on top of citizen demand so we gotta build.

The 20th century proved govt. can’t do housing.
They can be the game officials & we need good referees for capitalists to play the game. That means increasing density & easing permits (but not building standards). The choke points are: in order; sewage,water, electricity,gas,& public transport. The feds put the 40 billion into the above under condition provincial & especially municipal ( because everybody knows that city hall can make or break you)gives OK to let her rip for rezoning & issuing building permits.

Throw in a few sweeteners like tax breaks for rentals & multi single family stuff . You can always squeeze a homeowner later. Their not going anywhere.

If the Fed,Province & City could agree on infrastructure deployment & medical/education allocations which would be a singular case of Canadian pigs flying then we’re off to the races. I’d go for cheap land,big modern septic fields ,year around water, electricity, natural gas . Lay large floating cement slabs on good drainage. Start with bunkhouses & cookshacks. Proceed to 800sq.ft./average family. Have your infrastructure in place to layer up to 500-1000 people. The govt. will pay you to keep on building. It’ll be like a cheap high density trailer park. Most likely outside city limits. Cheaper rent, sell pieces off as you need cash. Work hard to keep deterioration in check. In 25 years buy off the local aldermen, better, become one, change the zoning,kick everybody out on what you got left & put up something nice.
Build it & they will come.

#269 Tony on 11.23.17 at 2:06 am

Obviously the first step would be to put the onus on banks instead of the banks having zero risk. The next step would be free financial education for Canadian Millennials who are out to lunch when it comes to financial decision making. Third fire Stephen Poloz who is partly responsible for the housing bubble. Raise interest rates to quash housing. Bring in a lifetime capital gains exemption on housing of $500,000 which in theory will kill the high end of the market in the regions where housing prices are the highest. Make foreigners pay full capital gains tax on Canadian real estate both residential and commercial.

#270 Tony on 11.23.17 at 2:13 am

Re: #203 Long-Time Lurker on 11.22.17 at 10:46 pm

I doubt “the powers that be” will ever let the price of oil spike upwards again. The world economy is teetering so the central bankers will forward sell oil contracts to restrict any gains in oil. Keep renting.

#271 Tony on 11.23.17 at 2:22 am

Re: #183 m212 on 11.22.17 at 10:11 pm

Increasing the supply of housing will do absolutely nothing. This is a fallacy the realtors dreamt up and is not true.

#272 backwardsevolution on 11.23.17 at 2:43 am

Justin Trudeau, what the hell are you doing?

1. Drop immigration back down to 50,000 per year. When existing Canadians are suffering with outrageous home prices or can’t even find a place to live, we do not need over 300,000 newcomers adding to the problem!

2. Get rid of the CMHC. Let the banks shoulder their own risks. The banks must keep the mortgages on their own books. When the banks take on the risks, they’ll start being more prudent about who they lend to.

3. 25 year amortizations (not 30, 35, 40 years).

4. 20% down payments.

5. All real estate assignments need to be legally disclosed. If assignments are flipped before possession, tax needs to be paid on this money.

6. No buying of property through trusts and shell corporations. Your legal name goes on the title, or no deal.

7. Stop artificially suppressing interest rates. Allow interest rates to rise to what they would be if the central bank wasn’t meddling in them.

8. No government bail-out of the banks (as was done in 2008 to the tune of $125 billion) when the property market crashes. This was done in 2008 to stop house prices from dropping further. When we go bankrupt, no one steps in to buy our deflated assets and then hand us cash in exchange for these assets (like was done with the banks).

9. Since when is it prudent behavior to allow foreigners to come into a country and buy it out? You can’t do this in China, Japan, Thailand, India, etc. They would never allow this. You can’t even buy land there.

10. Get your head out of the real estate lobby’s *** and start thinking about what’s good for the country.

You, Harper and the previous prime ministers going back decades have sold this country out. And for what?

A lot of people are actually suffering out there, and yet your response is another Band-Aid, all in an attempt to keep house prices up and prolong the misery.

Do the right thing, Mr. Prime Minister. Let the bubble (and it is a bubble) deflate. It will only get worse if you don’t.

We don’t need help with our rent. We need prices to be allowed to come down.

We need the government OUT OF THE HOUSING BUBBLE!

#273 MoneyFromA$ia on 11.23.17 at 3:02 am

Find, tax and fine all in declared rental suits.

Kill the mortgage helper!!!!

$

#274 Big Daddy on 11.23.17 at 3:11 am

1. Tax foreign money coming into Canada as if it were earned in Canada…..like many other countries already do.

2. Nix DB (6 to 1) civil servant pensions. Make them DC like everyone else. Claw back all taxpayer contributions to zero.

3. Eliminate youth poverty by eliminating double dipping by civil servants and create a million youth j/ new grads jobs overnight.

4. Quebec doesn’t get another transfer payment of $12 billion ever again.

5. Immiigrants pay thier own way or leave.

6. No more multi million dollar cheques to convicted murderers and terrorists.

7. No more 95 million dollar relgious centers serving minority lberal voters in Ft Mac.

There’s lots more but I just balanced the budget, paid down the debt and created full employment. Big Daddy for Prime Minister.

#275 NEVER GIVE UP on 11.23.17 at 3:33 am

If I was the Leader of this nation I would do the following:

1. I would ensure that renters could not be kicked out of there homes without the equivalent of 2 years rent paid back.

2. Renters have enables the Rentier class to get rich by paying their mortgages and they receive no rights for this service.

3. Speculators just cast aside Renters like chopped liver when they are ready to sell and upgrade to other properties with a bigger down payment made from the fruits of the labor of Renters.

4. Tax Heavily all speculators who sell within 7 years. Property is for living in, not for a futures market.

5. Make air B&B Pay taxes like hotels do.

6. Make municipalities end NIMBYISM. Force them to hire the correct amount of staff to expedite building permits within 3 months max.

7. Stop giving NIMBY’s so much power to stop the world from turning. We have to live and let live.
This should be taught in School. What an intolerant and extreme society we live in.
The majority rules. We cannot be zeroing in on every block and asking them if they mind a new bunch of neighbors. Of course they will not approve. They are NIMBYS.

#276 Greater Fool on 11.23.17 at 3:35 am

Dear Mr. Trudeau,

Today I saw a guy renting his trailer here in Victoria for $800/month.
Last year I saved every penny for townhouse/condo, prices went up by 3 times of what I saved (and I saved LOTS), my salary? up only 2%.
I’m thinking of setting up a tent in front of the parliament building and living there, very close to you, maybe we can be friends!

#277 MBG on 11.23.17 at 3:52 am

How about (i) improving public schools so that young adults graduate with some skills a and abilities, (ii) taxing people less so the free market can run itself and (iii) leave charities to helping those in need.

#278 Jay (not that one) on 11.23.17 at 4:46 am

Start selling living in places other than Toronto or Vancouver. Hard.

Small towns across Canada have plenty of houses available, cheap as dirt. Even small cities and medium cities are pretty affordable. What’s more, these places are often hurting for workers — there are jobs out there, and nobody to do them. However; even if there weren’t, you don’t need to live in the highest cost jurisdictions in Canada to receive a welfare cheque.

Not everyone has a right to live in Toronto or Vancouver. I make six figures and can’t afford to live there. We need to stop pretending everyone deserves to live wherever they want. That isn’t reality.

Spend a few billion on a messaging campaign and ad campaign selling the rest of Canada. Or better yet, instead of paying people to rent in the most expensive places, pay long term welfare recipients to buy places in the least expensive places.

What does that achieve? Quite a few things. It helps reduce rents and home prices in the most expensive places by reducing demand. It helps raise rents and home prices in the least expensive places by increasing demand. It brings new individuals to communities hurting for people which means people might find opportunities they wouldn’t find in the megalopolis rat race, and it would give new opportunities to small business owners servicing smaller communities. It gives the worst off in Canada ownership of something instead of a continual hand-out. Overall, I’d expect the effect to be positive on all fronts.

#279 Howard on 11.23.17 at 4:53 am

One of your best yet. Not surprised it already had 200+ comments before you went to bed.

In a previous post of mine, you responded by saying that frugality is more of an affliction than virtue.

Is it not better to be naturally frugal and perhaps overly obsessed with saving money to the point that it negatively impacts one’s happiness and ability to live in the moment (this is certainly my problem), than to be carefree about money for decades only to find oneself in a panic when the debt becomes overwhelming?

#280 Howard on 11.23.17 at 4:57 am

#153 john m on 11.22.17 at 9:17 pm

Harper and the cons created the problem…wonder of they ever thought of a solution for their handiwork?

——————————————

Quite right. They should have cut immigration by a third and capped the tax-free capital gain on primary residences. But they did at least get rid of the $0 down 40-year mortgages.

I see nothing that T2 is doing that will improve the situation. In fact they are making it worse.

#281 Dan.t on 11.23.17 at 5:00 am

Give people the incentive to save and invest in other things other than housing. like personal investment or business investment!

Every government policy to date has been to encourage reckless borrowing and To spend every last cent on housing. It has worked out fine for most people who bought within the last 10 years and as long as housing keeps going up there is no problem.

Everyone understands house, sees prices rise, and thanks to reckless lending from lenders who risk nothing giving out massive piles of money, that behavior is rewarded as virtually everyone is approved for insane amounts of credit. Banks don’t care- tax payers will pay if things go south.

Look at all the incentives and tax breaks given to people to buy houses. The tax-free savings account was an incentive for people to invest and it was reduced in half!

Typical government solution let’s just give people with no money, money to pay the rent and put a Band-Aid over everything and hopefully look good.

All Canada has become is a real estate country. Buy and sell each other’s houses, use the fictitious equity to get more debt and double down… incentive to do so is huge. Tax free gains, dirt cheap money, easy credit.

Instead of giving out 40 billion in free rent money, use that money to invest in industries, that create jobs, communities and benefit all Canadians.

I guess my point is if you give out big enough incentives people will act accordingly- so stop giving housing incentives and allocate it elsewhere. Raise the tax free saving limit again- double it- make it 20k a year- see where money flows… But the government does not want to touch anything housing related- So nothing will change.

#282 Adrian on 11.23.17 at 5:04 am

Dear Garth,

I hope this doesn’t reach you too late, as I have been looking forward to an opportunity to discuss the macro-dynamics of the real estate market, and perhaps delve into what can be done to address the problems of rising rental rates and falling affordability.

I recently came across the following article in the Globe & Mail:

“Academic takes on Vancouver’s housing-supply ‘myth’”
November 17, 2017

“Dr. Rose went back to the 2001 census, covering a 15-year span [and] found that for each household added during this period, the region added 1.19 net units of housing. Put another way, for every 100 households that came along, Metro Vancouver added 119 net units of housing. And despite a surplus of housing stock, affordability has significantly worsened – a contradiction to the supply mantra.”

https://www.theglobeandmail.com/real-estate/vancouver/academic-takes-on-vancouvers-housing-supply-myth/article37015584/

This seems to be an utter contradiction. How could prices be rising, even as supply rose faster than demand? Rental vacancies aren’t falling, so someone must be buying these extra units, or else developers would have rising stocks of units for sale.

As it turns out, I also came across the following article – courtesy of the implementation of the vacant homes tax in Vancouver, which improved data regarding the number of housing units standing empty:

“Few Vancouver condo owners selling as vacancy tax looms”
June 25, 2017

“Vancouver’s rate of unoccupied units has increased from 5.2 per cent of all homes in 2001 to 8.2 per cent in 2016. In absolute numbers, that meant a doubling of vacant units.”

https://www.theglobeandmail.com/news/british-columbia/few-vancouver-condo-owners-selling-as-vacancy-tax-looms/article35460287/

(Compare this – the frequency of empty units actually reported – with estimates *before* the empty homes tax was implemented:)

“Vancouver’s vacant home rates in line with other cities, report says”
March 8, 2016

“The overall vacancy rate in the city was less than five per cent – a rate that had barely shifted over the years, even as real estate prices increased rapidly. The vacancy rate is also comparable to those of other large cities in Canada, Ecotagious said in the report. As well, there was no sign of a spike in vacancies of single-family homes, a belief that has led to many media stories and anecdotes about deserted neighbourhoods for several years.”

https://www.theglobeandmail.com/news/british-columbia/vancouvers-vacant-homes-in-line-with-other-cities-but-condos-most-likely-empty/article29072573/

If the increase in unoccupied units in the City of Vancouver holds true for the whole Metro Region – from 5% to 8% of all homes – then the following data would suggest there has been an increase in the number of vacant units of ~39k over 15 years, which is also ~19% of the net new supply of 202k.

“The 2016 Census shows the number of occupied dwellings to be 960,895,” & 758,715 occupied dwellings in 2001, which is 202k new units in 15 years. (5% of 759k is ~38k & 8% of 961k is ~77k households, for a net new supply of ~39k vacant units.)

http://www.metrovancouver.org/services/regional-planning/PlanningPublications/MV_Housing_Data_Book.pdf

In other words, in the same period that Metro Vancouver added ~202k households, the number of vacant units increased from ~40k to ~80k units. This only makes sense if someone is keeping these properties empty and unrented, while perhaps speculating on capital gains… (Property taxes have been *much less* than price gains for many years, now.)

So what is driving this behaviour? And what can be done to address affordability?

I have posted to your blog regarding Professor Steve Keen a few times now. He explains that price changes in real estate are fundamentally driven by accelerating debt-to-income ratios. The rationale for this is relatively simple to understand: monetary demand for real estate in any given year is primarily determined by the NEW debt taken on as mortgages that year. (“New debt” is “credit” in Prof. Steve Keen’s parlance.) Since credit sets the demand curve for the price, this means changes in credit drive price changes. When the serviceable debt limit is nearly reached for a given interest rate – based on a population’s income – then prices must fall as credit (i.e. growth in debt) slows down.

Figure 15 of the following article is a stylized version of what happens to asset markets – followed shortly by the goods & services markets and the employment rate – as debt to income ratios approach the serviceable limit. Figure 16 shows the empirical data for the USA leading up to the GFC and on to present day.

Figure 15:
https://www.macrobusiness.com.au/wp-content/uploads/2017/06/18.png

Figure 16:
https://www.macrobusiness.com.au/wp-content/uploads/2017/06/19.png

From “Steve Keen on the secret source of eternal Australian growth”
June 21, 2017
https://www.macrobusiness.com.au/2017/06/steve-keen-on-the-secret-source-of-eternal-australian-growth/

Please review Canada’s (& other countries’) correlation between “Change in Household Credit and Change in House Prices” here:

http://www.profstevekeen.com/data-on-credit-employment-and-house-prices/

(Also, if you have some time to watch an economics lecture, this explains much of it:)

“Why Australia (& Canada, Korea, China and others) can’t avoid a recession” (~1h)
https://youtu.be/w8fCmUbjDtgon-credit-employment-and-house-prices/

Now, if you look at the following graph, debt-servicing costs for new mortgages in Canada – as reported by Scotiabank – have risen from ~28% of income to ~45%):

goo.gl/PvYJHZ

“Scotiabank predicts that “mortgage carrying costs” — the amount you have to pay every month to maintain your mortgage — will rise by eight per cent in 2018, and another four per cent in 2019. That will “easily outpace” household income growth in that time, which the bank predicts will run at about 2.5 per cent per year.”

Both the graph & quote are from: “Cost Of Owning A Home In Canada About To Jump, But Wages Won’t: Scotiabank”
10/06/2017
http://www.huffingtonpost.ca/2017/10/06/cost-of-owning-a-home-in-canada-about-to-jump-but-wages-won-t-scotiabank_a_23235100/

And this leads us to an essential understanding about real estate markets: if two people with the same income, job security, credit score, etc. are competing to purchase the same property, the “winner” isn’t the one willing to commit a greater percentage of their personal wealth, but rather the one willing to commit a greater percentage of their future income by borrowing more. And this leads us to crucial insights as to how we can impact real estate affordability.

Firstly, the vacant homes tax isn’t a terrible idea. As we have already seen, it has provided important information regarding the state of the market that we wouldn’t otherwise have. In addition, while it is probably too low to overcome the hoarding signal generated by rapidly rising prices – at 1% it doesn’t come close to the 10+% yearly capital gains seen in many ‘hot’ markets – if calibrated properly, it does have the potential to bring more rental supply to market by reducing the incentive to leave a property unoccupied.

More importantly, however, we must address the dynamics of leveraged speculation in asset markets. We learned a long time ago (i.e. 1929) that allowing speculation in financial markets with borrowed money was a bad idea, but we forgot – or ignored – how leveraged speculation in real estate markets amounts to essentially the same thing. Too many people have committed too much future income to property ownership, in part by speculating that prices will continue to rise faster than incomes, which they obviously can’t.

This willingness to commit future income has come from primarily two sources, as I see it. The first group is people who are trying to buy their first home: often, Millenials who are adding to demand just before the Boomer generation ages out & tries to liquidate the equity in their homes to fund retirement. New research out of the US has shown that these single-mortgage borrowers – even the subprime among them – tend to limit their borrowing to what they can reasonably afford to pay back.

“The biggest growth of mortgage debt during the housing boom came from those with credit scores in the middle and top of the credit score distribution—and that these borrowers accounted for a disproportionate share of defaults.

“As for those with low credit scores—the “subprime” borrowers who supposedly caused the crisis—their borrowing stayed virtually constant throughout the boom.

“Clearly, richer borrowers were driving the trend. For instance, among prime borrowers, the growth in per capita mortgage balances held by investors was around 20 percentage points higher for those with the highest credit scores than those with the lowest.

“Come 2007, investors accounted for 43% of the total mortgage balance for the top credit-score quartile. For the middle two quartiles, speculators were responsible for around 35% in 2007.

“This would explain why, as the researchers put it, “the rise in mortgage delinquencies is virtually exclusively accounted for by real estate investors.” The share of single-mortgage borrowers who couldn’t keep up on their loan payments barely budged between 2005 and 2008.”

“House flippers triggered the US housing market crash, not poor subprime borrowers”
August 29, 2017
https://qz.com/1064061/house-flippers-triggered-the-us-housing-market-crash-not-poor-subprime-borrowers-a-new-study-shows/

There has been a growing trend in some circles, recently, towards “passive income” investment vehicles, often taking the form of housing purchased with leverage and rented out for a profit. In fact, I believe this is what motivated Trudeau & Morneau’s ill-fated efforts to reform the small business tax code earlier this year.

Suppose a would-be landlord invests to buy rental properties. Whatever they purchase, the costs of ownership will include property taxes, maintenance expenses, & management fees, at least. The landlord must charge rent equal to at least these costs, and will probably also expect a reasonable return on their capital (e.g. 5% or more), risk adjusted for rental vacancy rates, etc. If the rental income for some investment properties is cash-flow positive by more than the desired rate of profit, then the enterprising landlord can increase their effective rate of return by adding leverage.

As it stands, the renter is paying the operating costs of the property, plus the ROI for the landlord’s invested capital. If the landlord adds leverage – to purchase more property than they can afford otherwise – the costs of servicing this debt become another cost to the business, which are ultimately passed on to the renter. But from the landlord’s perspective, it’s great! They can buy much more property – easily twice the amount – and the renter pays the cost of the landlord’s acquisition of the ownership rights to that property. The rate of profit is lower, because some of the rent is now paid to the bank as interest, but so long as the investment still turns a profit then the landlord stands to gain twice: first from profitable income and the second time in equity.

To play this game even more deviously, one can wrap this business model inside a corporation that pays much less in tax than the personal income tax rate. Pay yourself enough of a salary to keep the Revenue Agency satisfied, while holding the rest of the net income inside the corporation as retained earnings. Then reinvest, rinse & repeat until you’re a millionaire, or something like it. (I think this is what Trudeau & Morneau were trying to go after, in their bungling – and hypocritical optics – of small business tax code reform.)

In other words, a significant minority of the population have been using leverage to make speculative investments in real estate. Since many of the current renters are also prospective buyers, this means renters have been paying their landlords to compete against them in the same property market. Furthermore, the landlords typically have more collateral and better balance sheets. (They have all that passive income from rental properties, after all!)

So prices continue to rise as long as the population is willing to commit an ever increasing fraction of their income to housing. Partly this is driven by a desperate desire for independence combined with FOMO (i.e. “fear of missing out”), but also this is driven by a subset of the population leveraging up the balance sheets of their investment vehicles to acquire valuable rental properties in rapidly rising markets. To the extent that we allow this to continue, it will only make affordability worse.

“At the county level, one in four housing markets across the U.S. was less affordable during the first quarter of 2017 than they have averaged historically for the period. The data represent the largest share of markets under the normal affordability index (100) in more than seven years.”

“US housing affordability drops to lowest level in more than 7 years”
March 31, 2017
https://www.constructiondive.com/news/us-housing-affordability-drops-to-lowest-level-in-more-than-7-years/439377/

And this is where we get to the solutions. As mentioned previously, the vacant homes tax can be useful, though it would have to be set at a rate that discourages hoarding even when capital gains are running greater than 10% per year. More importantly, however, we must limit access to leverage in asset markets, particularly for speculative investors and landlords. Professor Steve Keen teaches us that accelerating debt-to-income ratios drive price changes, so limiting rapid changes to a population’s aggregate debt-to-income ratio is crucial for stabilizing prices.

When one person takes on extra leverage, so that servicing costs rise as a percentage of income, a self-reinforcing feedback loop is created. The growing leverage translates directly into higher prices, which increases the amount of equity available in the surrounding properties, thus enabling more borrowing that leads to even higher prices, etc, etc. Limiting leverage to would-be landlords is therefore vital, both because the debt-servicing costs are passed directly to renters as higher costs of living, but also because it sends the bulk of the population spiraling into debt-servitude, while a few end up owning [almost] all the wealth.

Professor Steve Keen’s model – first published in 1995 – predicted the Great Moderation & Global Financial Crisis. It shows that even when businesses are the only ones borrowing – and even when all borrowing is for productive investment – higher debt-to-GDP ratios result in a growing banker’s share of output, paid for by a falling worker’s share. His model – even in its simplest form – directly connects higher debt levels with higher levels of inequality and lower rates of GDP growth. Falling housing affordability is a symptom of an underlying dynamics of ever-increasing financialization of our economy, particularly as the population commits rising levels of future income to ownership, with the worst offense being speculative investors accessing leverage that inflates demand and grows their equity while someone else pays for it.

I hope this explanation has been sufficiently cogent as to illuminate, rather than obfuscate. And I don’t mean to cast blame on anyone, either. Capitalism is about investing in the pursuit of riches, and I’m not necessarily opposed to that. But some of the particular dynamics of this market are dysfunctional, and we would be collectively better served by preventing some of these feedback loops from damaging the economy.

Hyman Minsky said the fundamental instability of Capitalism is upward. “The tendency to transform doing well into a speculative investment boom is the basic instability in a Capitalist economy.”

Sincerely,

Adrian

(P.S. Nixing the capital gains exemption on investment [rental] properties is also a good idea!)

#283 Howard on 11.23.17 at 5:05 am

At least 25% of the $40 billion in spending will be gender-based going to “to projects for women, girls and their families.”

—————————————-

In the US, men-without-brains elected Trump.

In Canada, women-without-brains elected Turdo.

No suffrage for the brainless please.

#284 Howard on 11.23.17 at 5:14 am

Are there better ways to deflower housing so average families can once again afford average homes? Raise rates? End mortgage insurance? Nix the capital gains exemption? Bigger down payments? Thirty-year loans? What?

——————————————

Can I suggest that government should steer immigration away from Toronto and Vancouver and towards the mid-sized cities to help them build up a critical mass of people to compete for regional offices and the like, in order to pull jobs (and talent) away from the two big metropolises? Kitchener-Waterloo has all the makings of a 1 million+ city and I’m sure housing refugees from Toronto would jump at the chance to move there if the jobs and transit were boosted.

#285 Howard on 11.23.17 at 5:18 am

How about mandatory full disclosure on pricing data and history of each house up for sale, available to anyone with an Internet connection?

Apparently Nova Scotia has this.

#286 backwardsevolution on 11.23.17 at 5:46 am

Limit immigration to 50,000/year like it used to be.

Don’t keep trying to prop up the bubble with more demand.

Don’t keep trying to prop up the bubble by making it easier for people to pay their rent through rent subsidies.

This bubble has been government-manufactured and engineered right from the get-go.

This took willful intent on the part of government.

You are continuing to use willful intent to keep the Ponzi going.

You wouldn’t continue to have children if you couldn’t afford to care for the children you already have. That would just be stupid.

So why do you continue to do this with the country?

Raise those interest rates to where they would have been if the government hadn’t purposely kept them down.

Put the risk back where it should be: on the banks.

Start measuring and reporting inflation by including the gains in rental and housing costs to reflect true inflation.

Capitalism? Free market? Where is it?

Get out of the housing market, Mr. Prime Minister.

Get out! You have done enough damage to people’s lives.

#287 backwardsevolution on 11.23.17 at 5:47 am

Limit immigration to 50,000/year like it used to be.

Don’t keep trying to prop up the bubble with more demand.

Don’t keep trying to prop up the bubble by making it easier for people to pay their rent through rent subsidies.

This bubble has been government-manufactured and engineered right from the get-go.

This took willful intent on the part of government.

You are continuing to use willful intent to keep the Ponzi going.

You wouldn’t continue to have children if you couldn’t afford to care for the children you already have. That would just be stupid.

So why do you continue to do this with the country?

Raise those interest rates to where they would have been if the government hadn’t purposely kept them down.

Put the risk back where it should be: on the banks.

Start measuring and reporting inflation by including the gains in rental and housing costs to reflect true inflation.

Capitalism? Free market? Where is it?

Get out of the housing market, Mr. Prime Minister.

Get out! You have done enough damage to people’s lives.

#288 Dharma Bum on 11.23.17 at 6:43 am

Keep spreading the wealth Justin. It’s what you do best.
Rob from the poor to give to the poorer. While your personal wealth, inheritance gotten, grows leaps and bounds. Spend, spend, spend. What a genius. How is it that you cannot know up front that the $40 billion that you intend to squander will do absolutely NOTHING whatsoever to improve the housing situation? Man, you are even worse than I imagined. In the meantime, how do I get me summadat $2,500.00 handout? I deserve housing too. And some new appliances. And skis. Gimme.

“The welfare state is not really about the welfare of the masses. It is about the egos of the elites.” – Thomas Sowell

https://www.hoover.org/profiles/thomas-sowell

#289 SmarterSquirrel on 11.23.17 at 6:56 am

Garth,

I’ve been able to find $400/month easily for most of my working life because I’ve lived below my means.

A simple way to find an extra $400 a month is to never buy a new car. Buy a used one in good shape for cash on hand. Then there’s no monthly car payment giving you an easy way to find another $400/month.

http://smartersquirrel.com/what%20is%20it%20worth

#290 Wrk.dover on 11.23.17 at 7:01 am

Higher interest rates control borrowing levels, reining in price bubbles.

Traditionally seniors lived on interest from savings. We prepared to do this.

For a decade now, interest on a quarter million has bought a coffee a day.

It is Main Street’s turn to be bailed.

HELP!

#291 P Sydney on 11.23.17 at 7:15 am

More transparency. Replace blind offer bidding with an auction, and make property price and tax history publicly available.

#292 BlogDog123 on 11.23.17 at 7:15 am

I like the sound of post #275.

There are some pros/cons with my idea of incentivizing the creation of more granny flats in existing houses:

Pros: Those single moms T2 is trying to help might actually send their kids to a better neighbourhood school (that’s half empty in greying suburbs) rather than TCHC neglected (where do gang members live/sell) neighbourhood school.

The renovators who will be out of work post-housing-boom will have basement apartment renos to keep them busy. Think of all the older neighbourhoods with 50,60-foot lots and plenty of downstairs square footage to renovate.

Cons: Some (certainly not all) of these low income people are there because they tend to make bad choices (grooming, spending, friends, partners, career path, etc…) Does the person owning upstairs really want them living downstairs? Maybe the true scum of the earth can live in TCHC ghettos and the decent poor folks move into nicer private accommodations. The key is to incentivize making decent living quarters not hellholes.

#293 SmarterSquirrel on 11.23.17 at 7:19 am

Also maybe you could let Justin know that people should be given help accessing funds to get educated (that they have to pay back) so they can improve their lot in life but their expenses shouldn’t be paid for by the government.

When I made $12,000 as an income for a whole year, I found a dilapidated apartment for $275 a month and I could see through the gaps in the floorboards straight through to the basement. It was pretty good incentive to improve my own lot in life. I didn’t expect people who had done well in Canada to give me their hard earned money so I could have a nicer place. I expected I would get out of life whatever I worked for. I was thankful to have access to funding to educate myself so I could earn more, pay off my student loan and afford a nicer place to live.

#294 Slow Canada on 11.23.17 at 7:27 am

Garth, if I had one vote, it would be to end mortgage insurance. This would sober up the banks and return lending to sanity. I would love to see rates rise as well, but I am still naïve enough to think that this will someday take care of itself. No mortgage insurance would have a far bigger impact.

#295 Down and Out on 11.23.17 at 7:38 am

Surprised no one mentioned the war time homes built after WW 2 for returning vets to cure housing shortage . Today’s municipalities rule against a 900 square footage starter home fearing a ghetto like neighborhood later .T2 step in setting up these home outside cities with lots big enough for homes to expand later with garages rec rooms etc. paved drives has home owner can afford to add-on .Check out some of these war time homes today most are well cared for in an always improving area.

#296 under the radar on 11.23.17 at 7:39 am

Cities cannot repair what they have because of neglect , crooked contractors and serial vandalism. Government housing is a sinkhole for money. Soviet era state housing , drab, depressing and falling apart.
Deal with the root causes , poverty, drug addiction, mental illness.

#297 jess on 11.23.17 at 8:01 am

corruption costs – tax evasion
transparency on the real owners of trusts/real estate
https://www.globalwitness.org/en/
fake debt!
The Laundromat was ingenious. who got the money
The money went to 5,140 companies with accounts at 732 banks in 96 countries

extending limitations e.g.
HM Revenue & Customs will be able to assess offshore tax non-compliance dating back at least 12 years, triple the current system, under plans announced by chancellor Philip Hammond in the Autumn Budget on Wednesday.
How was this scale of criminality possible? How did it work?

https://international-adviser.com/advisers-still-misleading-public-with-fake-credentials/

======
Landlord Ministers Leading Grenfell Fire Response Told To Resign Over Voting Record On Housing
Nick Hurd and Sajid Javid actually voted against making homes ‘fit for human habitation’.
20/06/2017 11:22 BST | Updated 20/06/2017 15:32 BST
http://www.huffingtonpost.co.uk/entry/landlord-mps-grenfell_uk_59479431e4b0f15cd5bc74e5

“Seventy two Conservative MPs who benefit from renting accommodation voted against our amendment to make homes fit for human habitation, a basic right for their tenants.
=========
fueling demand with incentives for first time buyers
https://www.channel4.com/news/factcheck/almost-one-in-five-mps-are-landlords

Budget 2017: Hammond’s Stamp Duty Cut Backfires As Watchdog Warns It Will Push Up House Prices
No new homes guaranteed either despite £44bn claim
22/11/2017 17:40 GMT | Updated 6 hours ago

http://www.independent.co.uk/voices/budget-housing-building-plan-hammond-rich-kids-drives-up-price-rest-us-a8070036.html

#298 After Communism on 11.23.17 at 8:01 am

Make the government buy houses for you. When the price goes up, the government gets all the benefit. Later ,make it illegal to buy houses.

That combines the $40 billion Trudeau idea with the numerous comments requesting new taxes on real estate, as if government is more worthy to benefit from the Bank of Canada’s house price inflation, than individuals.

It is the communist mind coming into Canada.

#299 Elmer Gantry on 11.23.17 at 8:10 am

Only one or two posts touched on this so I will expound, if anyone here can handle the truth.

A recent study showed that the vast majority of house price appreciation is due to increases in the cost of land. (No price like home: global house prices, 1870–2012, K Knoll, 2017 )
https://www.econstor.eu/bitstream/10419/103123/1/cesifo_wp5006.pdf

The authors attribute the increases to a scarcity of land within cheap commuting distance, in part due to restrictive planning regulations. Demand factors such as low interest rates and mortgage insurance also play a role.
I believe there is another supply-side dynamic that involves our hallowed farmers, who barely eked out a living until the introduction of mechanization, marketing boards, tax credits and the microFit program. The price of acreages kept pace with inflation until fairly recently, but that is just a farmland mania sideshow. The real price appreciation occurs when city meets country and the​ land developers outbid each other for the opportunity to pass their costs (& a tidy profit) onto the home buyer. This is the crux of the problem. We regulate the construction of our homes, the price of the fuel used to light and heat our homes, but not the cost of the land upon which it sits. I do believe in free markets, but how much is enough?

#300 BoomerKid on 11.23.17 at 8:10 am

While the goal behind subsidized public housing is admirable, it is highly unlikely to work because does not address the underlying problems and in fact may make them worse.

What is the underlying problem?
– Rampant speculation
– Low interest rates
– Loose lending standards (CMHC, long amortization periods, no risk-sharing by lenders, mortgage fraud, etc.)

The governments do not control interest rates, but can effect change with regards to speculation and lending standards.

Why public housing can make the problem worse?
– Public housing does not address any of the underlying problems (speculation, interest rates, loose lending standards)
– Public housing takes a (minority) proportion of housing off the general market. For non-subsidized (the majority) of people, this means tighter supply and higher prices (both owners and tenants).
– For regular (non-subsidized) people, this means higher rents and higher property values/mortgages.
– If anything this will lead to worsening of the underlying issues (speculation, etc.)
– This leads to 3 classes of people: 1. those who get access to public housing (minority), 2. the wealthy elite who can afford luxury housing (minority), and 3. those who cannot afford increasing more expensive private housing (majority)

If you’re looking for an example where this exact strategy is failing the majority of the public very badly, just look across the Pacific ocean at Hong Kong. Almost a third of people live in subsidized or public housing, yet this city consistently ranks the most unaffordable city in the world. Young, working people do not even dream of being able to afford a home. This problem has stunted economic growth as well as causing a large generational divide and growing resentment and unrest.

Suggestions for strategies that may work
– Discourage speculation: crack down on speculators and flippers and implement a flipping tax. Crack down on condo assignments.
– Significantly tighten lending standards for second (or 3rd, 4th) mortgages. This is where local speculation is happening. Second mortgages should be subject to much higher lending rules than first mortgages. Higher downpayments, no CMHC insurance so that lenders must take on all the risks, higher stress tests.
– Also tighten lending standards for first mortgages. For example, crack down on mortgage fraud, and risk-sharing with lenders and CMHC.
– Tighten lending standards on HELOCs to de-incentivize people to their homes as ATMs.

In case it matters, I am a single millennial female and a renter.

#301 crowdedelevatorfartz on 11.23.17 at 8:13 am

Wow!
Lotsa angry people posting.

Amazing what happens when “Socks” Trudeau announces he’s urinating $40 Billion of taxpayers dollars away on ANOTHER vaguely described “social justice” program……

Channel that anger people!
Trudeau’s been in power for 2 years already , flitting from Environmental conferences to Trade missions where he’s accomplished what? Selfies?
And now we’re finally seeing his real socialist colors.

Only two more years and we get to throw his ass out and the incoming govt will cancel this fiscal insanity( unless , of course, we elect the NDP).

Focus your anger people.
Dont elect Libs in Federal by-elections….send these IDIOTS a loud message.
Throw him out.

#302 crowdedelevatorfartz on 11.23.17 at 8:18 am

@#293 jess

Why are you posting British Parliament links?
Perhaps you’re a Nigel Farage fan?
The beer swilling communist idiot expected to be the Prime Minister when Brexit happens.

#303 Manitoba Whale on 11.23.17 at 8:20 am

How many miles of high speed rail will $40 billion lay?
Home prices are a small fraction of the price 2 hours or more away from the big centres. Why not develop a rail system where you can commute from a smaller town, park your car in the car lot and scream your way the big city.

How about $20 Billion to build a network of rail in Vancouver and the GTA. Just imagine 20 billion set aside to subsidize the bullet train. Interest at 2% on 20 billion will raise 400 million per year to keep the trains running.

Then you will have affordable housing. Big city jobs, small city jobs. Big city living, small city living. That is how you do infrastructure spending.

#304 gfd on 11.23.17 at 8:25 am

Get that idiot out of the office, now!

#305 Cheryl S on 11.23.17 at 8:31 am

1. Increase interest rates already!!
2. Increase them again!
3. Limit foreign investment.
4. Reduce greenbelt limitations.
5. Incentivise development of high-density multi-unit res.
—————————————
I’m with Steve! And in addition, close the CHMC!

#306 NewToETFs on 11.23.17 at 9:26 am

To improve affordable housing: Invest in Co-operative housing Projects. https://chfcanada.coop

#307 Madcat on 11.23.17 at 9:28 am

1) You must be a citizen to buy a single family residence.

2) Corporations may not purchase single family residence properties. They may only purchase multi-unit buildings. Foreign owned companies or companies with more than 20% foreign ownership may not purchase existing buildings. They may only buy land to develop multi-unit buildings.

3) End the Quebec immigrant investor program. Local Canadians cannot afford to compete with wealthy foreigners. Many of the wealthy immigrants we invite into our country are not doing much to develop our economy. Rather they are just purchasing homes and filling up out top universities which only makes our lives more challenging. We need to invite immigrants based on their skills and immigrants escaping war-torn countries looking for a better life.

4) A speculation tax. Secondary homes should have a property transfer tax of 15% regardless if the price has gone up or down. Owning a third SFH property or fourth property excetera should be disallowed. Only multi-unit buildings should be allowed for 3rd property or 4th property excetera Investments.

#308 Asterix1 on 11.23.17 at 9:37 am

Eliminate CMHC + Raise interest rates.

Let banks shoulder the risks, not taxpayers.

#309 Mike in Edm on 11.23.17 at 9:38 am

1) 25yr amortization terms should be the max. No exceptions
2) 20% down should be required for all home purchases. No exceptions
3) We’ll have to see how the new B20 rules play out, but maybe modify it so that if interest rates dip really low again (doubtful), always keep a lower cap rate as a minimum
4) Clean up the sleezy mortgage broker, subprime, and even banking industry. It blows my mind how people are actually obtaining mortgages. A relative of mine (23 yr old waitress / student) qualified for a $350k mortgage. WTF!?

I truly believe that if house prices were cut in half (ie pre-2001 era) that the CDN economy would be China-esq. My Mom had a $600 mortgage, my sister has a $900 mortgage. I pay $1600 for rent (down from $1950). Imagine if we all had an extra $1000 of disposable income every month! Most would get blown on consumer goods, which would bolster the economy in huge ways, but I’m sure a little bit would also go to savings so that maybe only 75% of people couldn’t come up with $400/month. The only people benefiting from these high prices are the boomers who are selling, their kids who are selling after the boomers die, banks, and RE agents.

#310 LivinLarge on 11.23.17 at 9:38 am

“How many miles of high speed rail will $40 billion lay?” well, the current cost to lay standard rail beds is over $1 million per mile excluding the cost of expropriating the land.

The largest metropolitan region in Canada isn’t scrub land after 20 miles of down town. People like you and I own that land and it’s not going cheap.

On top of that, our climate makes true highspeed rather than Inter City Express trains close to impossible to safely maintain the trains.

Oh, and the cost of the actual rolling stock, well let’s say 40 billion “might” about cover it if you only want about 4 trainsets in each direction each day in the Corridor between Toronto and Montreal.

I would love it if we could do highspeed rail but the time to have acquired the infrastructure for it is long past. Even MetroLinx can’t seem to get all day service between Kitchener/Waterloo and Toronto and that’s in the heart of the highest population density region in the country.

#311 maka on 11.23.17 at 9:40 am

1. Build rapid transit system connecting major cities
2. CMHC should cover only 40% loan in case of default. Let the lender to take 60%.
3. Increase capital gain tax on house flipping
4. Impose AML rules – seriously!
5. End monopoly of CREA.
6. Set minimum qualification to become a REALTOR – minimum 3 year college diploma
7. Release land
8. Limit foreign ownership or increase tax on foreign buyers
9. put rogue REALTORS behind bars

Bonus suggestion:
10. Donate half a million to families who don’t own houses.

#312 Stan Brooks on 11.23.17 at 9:41 am

All peaceful protests against such idiotic policies will be futile.

One can argue politely with the incompetent and corrupted in power but there can be no positive outcome from such arguing.

Lieberals are not giving anything, they are stealing from the taxpayer and redistributing other people’s wealth as if it is theirs in order to buy votes.

The very idea that they will steal from the honest taxpayers in order to subsidize the expensive housing and keep the property bubble going instead of removing their dirty hands from our pockets is sick.

I bet that their actions will result in more unaffordable housing instead of affordable one.

Affordable housing should be cheap, not expensive.
Expensive affordable housing is oxymoron.

As I said countless times, it is long overdue to change the tax jurisdiction.

You can not remove a cancer by feeding it.
You have to cut it’s supply of energy.

J2, your socks suck.
BM, would you sublet you french villa to an affordable housing fund?

#313 Mike in Edm on 11.23.17 at 9:44 am

Oh yeah and…
5) Eliminate the CMHC. Put the risk on the lenders
6) Clean up and make public the housing stats (sales, previous purchased prices, days on market)… So basically everything that the local RE boards have should be public (like Zillow in the USA I guess?). Part of the problem is the MSM pumping RE from all the fabricated stats the RE boards publish that are often completely false. The Brad Lambs of the world shouldn’t be allowed to advertise “20% YoY increases guaranteed!” type garbage either.

#314 Torontorocks on 11.23.17 at 9:51 am

End capital gains exemption so they stop trading houses. Dial back mortgage insurance and put lending risk back on banks and not the taxpayer

#315 Torontorocks on 11.23.17 at 9:52 am

And get a new prime minister that’s not so full of shit.

#316 The BEST way on 11.23.17 at 9:56 am

Garth,

My best suggestion? Find a way to talk to T2 (you know where he lives). He met with Mr. Mulroney re NAFTA, he needs your comments on this issue.

When in Ottawa, look up your local dogs – we’ll happily take you out for scotch(es).

#317 Catalyst on 11.23.17 at 10:05 am

I would like to see the following done:
1. Reduce red tape for developers to complete projects.
2. Heavily tax vacant land hoarders.
3. Properly staff CRA to target those with 3+ properties and not declaring income.
4. Allow mortgage interest deduction and longer term house loans (ie 20-25 yr term vs current 5 yrs or less)
5. Increase TFSA limit to 10k a yr again and give people a reason to save/invest.
6. Minimum 20% down on all houses with proper down payment scrutiny.

Thanks Garth. I will await my personalized reply from T2

#318 Briana on 11.23.17 at 10:06 am

Let’s see….I came from a middle class family where I did not qualify for OSAP, and my parents had three children and could not afford to contribute to my education, so I had to take student line of credits from the banks. Eventually at a certain age I got some OSAP, but I still had mega student loans to pay off. Then I worked hard to get a decent paying job to one pay off my loans and two try to save for a down payment on a condo/house. I worked hard to get a good job but between cost of living and paying off loans and saving it is very difficult. Then I got married and my husband and I purchased a home where we pay 2700 in mortgage plus property taxes plus hydro and other maintenance costs. We had difficulty having children and had to undergo IVF and other fertility treatments not covered, so that cost us roughly 30 to 60k. Then when we had our children it cost 1850 per month for each child to be in daycare. So I worked my butt off for what when low income folks seem to get all the perks between subsidized housing, low daycare costs, paid education, and other perks……..what good is it to be middle class these days??? There is no incentive to being a productive citizen in society, as you just have to take on more and more debt to get by whereas the low income folks have it made with all the kick backs, plus my taxes are going to finance this!! Does this make any sense??? Please someone tell me. Trudeau is making it MUCH worse for the middle class, it will disappear completely, and more of a gap between the rich and poor. Trudeau needs to take notes from Trump.

#319 pinstripe on 11.23.17 at 10:15 am

All public policymakers will always deal with the EFFECTS of a problem. Nothing will change other than kick the can down the road and the problem will get bigger with time.

The policymaker/s is/are the ROOT CAUSE to what works and does not work in their SYSTEM. The good and the bad.

The policymakers have a choice. At this point the bulldozer is approaching the gate.

#320 Old Ron the Realtor on 11.23.17 at 10:15 am

An old Mortgage Broker pal has told me that 75% of his business these days are “Re-Fi” mortgages. Essentially people pulling money out of their house to keep their heads above water.

It works until it doesn’t.

#321 Oli on 11.23.17 at 10:20 am

Create universal federal standards for mortgage lending, build smart transit, and tax the un-taxed.

The moment people have to start paying tax on the businesses they are running through the underground economy, the more money there will be to support social initiatives, and the less likely people will “invest” in condos only to rent them out as a tax-free short-term rental.

If we can do it with PayPal, we can certainly do it with AirBNB.

Additionally, we need to raise the standards for acquiring a mortgage through standardized qualifying rates. We need to fool-proof our housing in a way that we can ensure that, should the poop hit the fan, rising interest rates, unemployment, financial crisis, etc., people will not be as at risk as the scrutinous mortage approval process will eliminate over-mortgaging.

We need to spend that 40 billion on transit, ensuring people are able to get into and out of the major cities without needing to buy overpriced glass boxes in the sky. Build more low-income housing in cheaper areas with better access to rapid transit.

We need to educate Canadians that owning a house is not a “right”, but also recognize that having affordable housing SHOULD BE. Should the government step in to ensure that rents are affordable, Canadians will be able to focus on investing for their retirement, feeding and educating their families, and focusing on building their communities, rather than shoveling all their time and money into one asset.

Lastly, we need to *actually* do something about the real “underground economy”. How is it fair that a minimum-wage earner pays taxes on their wages, but Uber, AirBNBers, Netflix and other individuals and corporations that operate in our country have 0 tax implications to run their businesses in Canada.

It can be done. Now is the time to put our money where our mouths are.

#322 PeterfromCaglary on 11.23.17 at 10:22 am

Get the provinces to agree to open up more greenfield spaces for housing.

#323 Stan Brooks on 11.23.17 at 10:23 am

As for all the fraud with the crypto-currencies and governments refusing to take any actions on it it makes you wonder what the hell is going on, are they just so incompetent or there is something bigger going on behind the scenes.

Total and complete failure of authorities.

#324 MediOgre on 11.23.17 at 10:24 am

Three things
1) Normalize mortgage interest rates
2) Remove Short-Term rental of secondary property and regulate for primary property
3) Allow market forces to unfold

(& use all that foreign buyers tax land transfer tax to shelter the folks that need it)

#325 Stan Brooks on 11.23.17 at 10:45 am

In order to provide legitimacy for their self-serving policies, the rulers of this place need confusion and fear amongst the population.

Hence all the smoke and mirror distractions with artificially invented crises – the carbon taxes and the global warming scam, the useless gender discrimination legislation.

Soon they will criminalize the very doubt of their policies and fantasies presented as facts and science.

It is by design to keep the masses quiet, while they live the life of the privileged class.

Nothing new under the sun.

#326 MediOgre on 11.23.17 at 10:46 am

Message to the posters here ~ never recommend more taxes to solve a problem.

#327 CommonSense on 11.23.17 at 10:48 am

A better solution would be to expand the planned mortgage stress test rules to ALL lenders which will effectively kill housing speculation and return home values (and rents) to long term norms. I would love to invest in a rental property but every one I look fails as an investment. The governments plan will solve little. Central banks around the globe have flooded the world with cheap money and high rents are just a bi-product of inflated real estate made possible by cheap money. Until interest rates return to long term norms (inflation + 2%) that support a normal free enterprise economy this will only continue to get worse until such time as capitalism is gone.

#328 news flash on 11.23.17 at 10:55 am

Affordable housing should be built in places that are affordable, not at prime locations. There are many Toronto affordable housing locations built in pristine areas which just shouldn’t be the case. If you can’t afford to live in Toronto or Vancouver, don’t live there.

Look at MLS, there are thousands of listings for houses valued under 100K in this country. If you need affordable housing, chances are that your wages aren’t high and you can find a comparable role in most communities.

We should be investing in smaller communities, instead of driving everyone into a few major cities.

In Toronto, I have rented rooms for under $500/month. If you are willing to share accommodations, a 4 BR house that can be rented for 2K/month in the burbs is really 500/month per room. There are plenty of locations that fit the bill.

Even surviving on min wage isn’t that hard if you are good with your finances. with Min wage at 14/hour, net is 435.84/week, just over 1 weeks wages for accommodations, 1 weeks wages for transportation, food, etc. still lots of space for savings.

I’d say the problem is more a questions of financial education.

#329 TraderX on 11.23.17 at 10:56 am

Yes, put CMHC back to what it used to be… 5% downpayment for FIRST time home buyers only! STOP the government from screwing with house prices as the enact all this “helpful” regulation and unleash all sorts of unintended consequences.

People don’t have the right to OWN a home. It is achieved by saving money, job stability, etc. This notion that everyone is ENTITLED to own a home is what has screwed up housing in the first place.

So yea, take the pain… change the rules back… our kids and their kids will thank us for generations!

#330 NEVER GIVE UP on 11.23.17 at 11:03 am

#279 Adrian on 11.23.17 at 5:04 am

One of the best posts I have read on this blog!
Thank you for your effort!

#331 Gravy Train on 11.23.17 at 11:10 am

#244 Ace Goodheart on 11.23.17 at 12:23 am
“You will find many, many children living in poverty. That is the most common way for a child to live in this [c]ountry.”

You and Trump seem to live in a fact-free world, Ace! How is that working for you?

The fact is, 83% of Canadian children do not live in poverty!
http://www12.statcan.gc.ca/census-recensement/2016/as-sa/98-200-x/2016012/98-200-x2016012-eng.cfm

#332 MediOgre on 11.23.17 at 11:11 am

Couple of great ideas on here! – nice one debt slave creator #34 (I like the no interest deduction on rental property) and #62 buyers have not rights.

Made me think of the perpetuator of the issue – real estate agents! haha. I love that idea! Pay the agent every time they open the door say $200 and totally remove the value of the property from the equation! Image if we paid the house inspectors based on the property value! Let the market decide the price. Agents get paid for getting dragged around by picky shoppers that don’t do their own research and prices are set by what is demanded by the market. Pay by the door! :)

#333 UVZ on 11.23.17 at 11:26 am

1. End government mortgage insurance and government-subsidized private mortgage insurance. That’s the core driver of high RE prices in Canada.

2. Invest in high-speed rail transport. There is no geographic logical reason to have the RE prices we do. This is the second-largest landmass in the world. High-speed rail would expand expand the livable footprint into what are now very rural areas, even ‘cottage country’.

#334 Billy on 11.23.17 at 11:36 am

This expenditure is insane…40B ??
The government needs to stop trying to manipulate the housing market on behalf of the Canadian Banks. Let market forces prevail and let the chips fall where they may

#335 Guy in Calgary on 11.23.17 at 11:41 am

The role of government is to create an economic and social environment where these types of subsidies are not necessary. Intervention should be the kind that stimulates economic growth and social justice. What is presented here is not sustainable and is clearly political. Instead of sapping every last penny from the rest of us before we all need affordable housing as well.

#336 TheSpangler on 11.23.17 at 11:50 am

1) Eliminate the PR exemption or give it a lifetime maximum

2) Eliminate the CMHC

#337 swinginghumanzee on 11.23.17 at 11:52 am

Yuck. I can’t even believe I’m about to suggest this, but if we’re going to spend $40 Billion, let’s spend it all on social housing, for rent, capped at 15% of the renter’s income and build so much of it that we create a glut. market economics tells us that this should bring all rental prices down. Time and again we have seen that any spending or the like (like stupidly low interest rates) that is applied to the housing market only becomes a tool for those who would make obscene profits of said market. Ottawa, provincial capitals, the banks and the CREA have done an expert job of creating and managing this ever-inflating bubble as a way to keep revenues pouring in while the rest of the economy underperforms. Time now to expertly manage a deflation of the balloon.Not for profit, but because if we don’t, our country will be a land filled with anguish and misery. Governments and profiteers – it’s time to look elsewhere for plunder.

#338 Andrew on 11.23.17 at 11:52 am

Dear Mr. Trudeau,

To solve the housing issue lower income taxes on rental income below a certain amount say 20k per unit. This will spur the private sector to offer housing. This approach will be a long term solution and cost a fraction of the proposed 40 billion.

#339 Newcomer on 11.23.17 at 11:52 am

There seems to be a correlation between people who are worried about Canada becoming communist and people who imagine that the proposed $2500 subsidy is monthly rather than annual. I guess it makes sense. These are people with a tendency to exaggeration who either don’t have the skills or the ambition to verify things. If one of you is reading this, consider that you cannot make good money decisions if you do not know the facts. When things seem outrageous, check to see if they are true. For current events like this, choose the News tab in Google. For older things, Wikipedia and Snopes are good resources. Generally speaking, outrageous things don’t tend to happen.

#340 Fake News Again on 11.23.17 at 11:55 am

Just finished listening to a lovely high end couple (lawyer/specialized physician) talk about how they rent in Point Grey and that 25% of it is empty. And they talked about all their friends say the same thing in their neighbourhoods around Greater Vancouver. But alas….the denial of foreign influence is as thick as bitumen.

#341 Cowpoke on 11.23.17 at 11:56 am

The crime minister says we are not deserving. All he needs is votes to continue our destruction. This is an invasion. The world is knocking on our door. They want what we have. We can not compete with the sheer numbers of foreigners. We are being played. Financially exterminated without a shot being fired. Gov’t, banks, corps, other global interests, in collusion, are not looking out for Canadian interests and are making it possible for foreign [Fiat] currency and laundering coming here to buy all our land, buildings and businesses.

The government of Canada does not restrict the movement of funds into or out of the country, and imposes no restrictions on the buying or selling of any foreign currency. Corporations and individuals can operate in foreign funds and arrange payments in any currency they choose.

Canada wake up Patriots!

#342 IHCTD9 on 11.23.17 at 11:57 am

#7 None on 11.22.17 at 7:13 pm

Thing is we need to reduce rents across the board and the only way to do that is to ultimately inject fear into the market. Lots of people need to lose a whole bunch of money.

How one does it….

_________________________________________

Just start voting for Politicians like Wynne, and Trudeau, or whoever turns up that is even worse. I’ll be voting for Wynne, and will be doing a careful analysis of Justin vs. Jagmeet in an effort to determine which one likes to incinerate larger piles of money. I know, I know, it’s going to be a tough decision, but I owe it to my fellow Canadians to do what is best for our future :)

Why waste any time? The sooner the financial SHTF, the sooner Canadians will realize they actually need a job, along with money to live, and that the government isn’t going to give it to them (and if they ever do, I’ll quit my job and board the gravy train myself.)

I am already well prepared to avoid and offset much of the taxation that will be coming – and much more is in store.

#343 Polina on 11.23.17 at 12:05 pm

The unaffordability of housing is confined to the two major Canadian metropolitans only – Toronto and Vancouver. There are many municipalities in Canada where housing is cheap. Why don’t governments then have policies to encourage the spread of Toronto and Vancouver economies to the other parts of the country? I.e. why not give tax credits to the companies who open up offices and hire people in smaller cities, or towns? It’s not going to fix the problem by the next election, I agree, but it seems like a wise long term policy. Our country is vast and beautiful with lots of empty land – why not develop it more evenly and take the stress of housing, traffic, pollution, etc. from the major cities?

#344 not 1st on 11.23.17 at 12:07 pm

Just for reference, the fed govt already administers a low income housing program for our indigenous peoples and you can see how well they do at that.

This has debt sinkhole boondoggle written all over it. I imagine our credit rating will be knocked back into the C range after next election and then Garths rate warning will finally come to fruition.

#345 not 1st on 11.23.17 at 12:09 pm

Funny, there are some smart people posting real solutions here.

But the average T2 voter is flocking to the new wax statue for a sock puppet selfie.

#346 Phil on 11.23.17 at 12:12 pm

Alright, I’ve got a suggestion – it is built on the premise that there is TONS of affordable housing available in Canada, just not in the country’s major cities, which makes it less desirable to consumers. So really at the heart of this crisis is the inexorable exodus from small towns across our nation, as pointed out by the CBC’s Don Pittis – http://www.cbc.ca/news/business/housing-canada-policy-market-1.4413882.

So, the solution? Make Canada’s small towns more attractive to consumers – young and old. Use thorough research to find out what attracts folks to the big cities: jobs, sure, but there are many other factors at play, including culture, the arts, good and diversified places to eat out, various amenities, and the presence of diasporas / communities that make you feel good, because you’re in close contact with people who share your experiences, outlooks on life, etc – but also sometimes exposed to a diversity of new experiences, new outlooks on life, etc.

Then, take a similar approach to what Iceland has done to curb it’s (now defunct) culture of teen drinking – engage in some targeted programming (see the very informative http://www.bbc.com/news/av/stories-41973296/how-one-country-persuaded-teens-to-give-up-drink-and-drugs). Analyze the findings of your thorough research, and taylor the approach for earch small town. Not enough culture or arts in Killaloe ON? Help them fund more music classes for kids, offer cheap rent for artists, and build a new concert hall. Not enough jobs in Chicoutimi? Help them attract new companies, offer startup funding, build them a new highspeed internet connection, whatever.

Do I believe government can deliver this type of innovative approach? We have some of what we’d need to do it (especially some fine and committed folks at StatsCan), but it’s gonna be hard, now that all the innovative / committed / outside the box fed workers and senior managers have left the ranks due to the Harper effect, and what’s been affectionately dubbed the “Harper Hangover” in the federal service. Good luck.

#347 The Technical Analyst, CSTA, CPD on 11.23.17 at 12:36 pm

Simple:

Nix the capital gains exemption on all realestate, even primary residences. No grandfathering.

Fixed.

#348 Ogopogo on 11.23.17 at 12:40 pm

Canada desperately NEEDS a housing crash. The system needs to be reset and people need to feel a level of hurt that will unshackle this docile, bovine population of debt slaves for a generation or two from the cult of real estate.

Let’s start by raising rates aggressively.

#349 Calgary Rip Off on 11.23.17 at 12:50 pm

So you give the poor guy a lotto ticket. The ticket wins. One year later after $4 million, the guy has no money.

Why? Money is not a solution to problems. They are just different problems. And most people don’t have the mental skills to handle more choices and more options. Taxes should not aim for equalization of wealth. There is a reason why certain people are rich and others are not, just like most people are stupid and some are not. The equalizing factor of why the stupid ones are not dead is due to improved quality of life, better food, less disease, cleaner water. And still the poor are not grateful for what they do have.

Be grateful and embrace everything and everyone that you do have rather than wanting more.

#350 Braj on 11.23.17 at 12:51 pm

#155 Smoking Man on 11.22.17 at 9:20 pm
You know what, when Justin starts building his low cost housing it will end up 10 times over budget and liberal donors, builders will make out like bandits.

Why I’m an honest conservative is beyond me, its really stupid.

I should just abandon righteousness, gain power through bull shit and celebrity status, molest young chic’s for free and become a Hollywood Democrat.

Can’t do it.

Not because I’m a feminist, but because I’m a man.

Woman need protection from bigger stronger horny mean beasts no matter what your lesbo teacher says about safe spaces.

Dr Smoking Man
Phd Herdonomics

***

Made me laugh out loud.

Ladies and Gents,

Smoking Man, the legend.

#351 Elon does it again. on 11.23.17 at 12:58 pm

If you have confidence in your work…

http://www.businessinsider.com/elon-musk-just-met-his-100-day-deadline-on-a-50-million-bet-2017-11

Now this is a bet I have a lot more respect for than those ForEx bets. Bad ass!

#352 Paul on 11.23.17 at 1:00 pm

I have a question about RRSP withdrawal rules….My wife has RRSPs in her name that she contributed to 20 years ago. She currently does not work and has no income. I am working, taxed at a high marginal rate, and have RRSP contribution room.

Would it make sense for my wife to withdraw $10K or $11K from her RRSP, and at the same time for me to open a spousal RRSP plan for my wife and contribute $10K or $11K? In the end, she will still have the same amount of RRSP savings, but I will get a tax refund for the contribution while she will pay no tax on her income (except I will lose the spousal deduction I would normally use)? Or am I prevented from doing this due to the Spousal RRSP withdrawal rules that say that she cannot withdraw money for 2 years if I make a contribution to the spousal RRSP?

#353 joblo on 11.23.17 at 1:02 pm

Went to walk the dogs the a.m.
Between the front doors of condo, guy sound asleep.
Off to the bank machine, guy sound asleep off to the side.
Walking along green space abandoned carts.

Kanada is a ghetto.
$40 billion fixes nothing.

#354 Wrk.dover on 11.23.17 at 1:03 pm

If money is so hard to obtain, why does it rent secured by collateral for so little?

#355 conan on 11.23.17 at 1:09 pm

“But forty billion is a pile of money”

Yep. Build the right building, with the right mix, and these make money. Also, giving money to people who spend it right away, on necessities, has a solid track record of creating business activity.

The Liberals are just getting warmed up. Wait til the innovation agenda kicks in.

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

#356 Polina on 11.23.17 at 1:24 pm

342 – Phil, I agree with you, we think along the same lines (my comment # 339). However, IMHO, all that governments need to do is just create the initial incentives for the companies/people to relocate to small cities/towns (can be done through corporate and personal income tax reductions) and the rest (culture, services, etc) will follow naturally – just give it some time. Many people will gladly leave Toronto and Vancouver for good paying jobs elsewhere in Canada as many put a lot of value on leaving close to nature, avoiding stress of the big cities, leaving in a close knit communities, etc – AS LONG AS MIDDLE CLASS JOBS ARE THERE. Once this process is started – market will take care of kids extracurricular activities, concert halls, restaurants etc. – no need for further government spending on this. All they need to do is to TRIGGER this process.

In addition, with advances in transportation technologies – think of Toronto-Ottawa-Montreal Hyperloop – the physical distances will be blurred. I would not be surprised if people will start leaving big cities in packs ! Garth, I wonder what effect the Hyperloop will have on real estate across the country?

#357 Stan Brooks on 11.23.17 at 1:27 pm

Lieberal thiefs, people who should be in jail in action, stealing YOUR MONEY:

https://ca.finance.yahoo.com/news/changes-passive-income-rules-could-153458248.html

Changes to passive income rules could net feds $6 billion, PBO says
—————————–

Note: stealing from you is netting for them.

Parasites.

#358 I like cookies on 11.23.17 at 1:30 pm

We can end the subsidies which enable people to purchase a home who can’t really afford it: end the RRSP Home Buyer Program, and cancel the awful “BC Home Owner Mortgage and Equity Partnership” which gives an interest-free loan to new buyers.

Disallow CMHC financing on mortgages that are not backed by federal institutions bound by OSFI. If provincial credit unions want to give out mortgages like candy, then they need to bear the full risk themselves!

#359 West Coast on 11.23.17 at 1:31 pm

1. Raise rates
2. Reduce Foreign investment
3. Capital gains on houses sold less than 3 years owned

Done. Should I run fro PM?

#360 Mr. Market on 11.23.17 at 1:32 pm

1. CMHC has to go. Banks bear the risk of their decisions.
2. Move people out of major cities:
2.a. Encourage Work from Home. (This will take a lot of vehicles off the road. Reduce gas consumption and allow people to move out of YYZ or YVR)
2.b. Encourage manufacturing
2.c. Encourage green houses
3. Have a progressive goal e.g. Mars colony by 2030.

#361 Briana on 11.23.17 at 1:41 pm

@355 West Coast

YES!!! Please run. Say no to Trudeau and Wynne, their current policies are only politically motivated to garner more votes and keep Liberals in power. They are wasting billions of hard working taxpayer money, for absolutely no progress or further economic gain.

#362 LivinLarge on 11.23.17 at 1:53 pm

Dearest Fearless Leader,
I am as concerned as you are that 82% of Canadians fear they might not be able to come up with an additional $400/ month and I am also shocked that it is projected to cost upwards of $40b to subsidize the housing expenses of our most financially vulnerable.
While we are beating up on our Feds for starting this program, let’s also beat on them to abolish the payday loans industry.
If 82% of Canadians fear coming up with another $400/m then where are a lot of them going to have to turn? Right, payday loan shops.
I walked past a bus shelter today with a poster for one of these parasite lenders and I was shocked that the small print on the poster about the cost of borrowing. They charge $9 per $100 borrowed per WEEK. That’s 468% PA simple interest and that’s to the working poor.
No need to send this post to the PMO, I already did just that.

#363 VJ on 11.23.17 at 1:53 pm

Are there better ways to deflower housing so average families can once again afford average homes?
>>Yes.
Raise rates?
>> Market decides it, not govt.
End mortgage insurance?
>> CMHC must go. Let market sell insurance. For others idiotic action, rest of the citizens should not be liable.
Nix the capital gains exemption?
>>No. because then question will come for Capital Loss?
Bigger down payments?
>> Lender and Insurer will decide this.
Thirty-year loans?
>> Lender and Insurer will decide this.

Govt. should be out of business and let market do the business. Govt. should just collect taxes to fund to maintain common std. of living in the country.

#364 AGuyInVancouver on 11.23.17 at 1:55 pm

#65 Doug t on 11.22.17 at 7:49 pm
T2 is an asshat – raise rates you idiot -‘do the tough thing and the right thing instead of this bucket of shite
RATm
_ _ _
What kind of asshat idiot doesn’t realize the federal gov’t has no control over the Bank of Canada’s interest rate policy?

#365 Prarie Piece on 11.23.17 at 2:00 pm

1. CMHC has got to go. The banks should make money on smart loans and service to depositors they don’t need a safety net for bad choices. Credit unions should be the same.
2. Government subsidies of any kind that go towards helping someone PURCHASE something they can’t afford is not right. Providing affordable shelter is one thing, subsidizing SOME Canadians so they can make an investment or enjoy the luxury of home ownership is the opposite of FAIR.
3. Work on making Canada a competitive and attractive place to do business. Business = jobs and $ so those above who are disciplined can buy what they need and afford some luxuries too.

Stop interfering in the market.

#366 Dissident on 11.23.17 at 2:02 pm

This 40 billion ‘windfall’ is only a small indication of what the Government made off of the housing bubble that they realize they caused. They realize now that there is a significant population that has been ‘left behind’. And its nice that they finally got around to addressing these people, and I think its only right that they pony up all that money from their housing ponzi scheme.

I think they should ALSO reduce property taxes because every Millennial and Xennial and Gen-X-er who now owns, and is subject to rising interest rates and new stress tests, alongside still-high real estate prices that are sticky.

Reduce property taxes for anyone who bought a home after 2010. That’s my genius recommendation.

#367 Citizen on 11.23.17 at 2:12 pm

Dear Mr. Trudeau,

Take the silver spoon out of your mouth and treat people with respect.
Your treatment of hard working doctors and self employed was deplorable.

You are paid to solve problems. Your housing strategy is not a solution because it just provides easy money to a lot of people. You need to have some more controls over rent so people can afford their own rent.

That is my 2 cents. Now get back to work.

#368 LivinLarge on 11.23.17 at 2:19 pm

Paul,

I think you’re safe if you spread the “cash out” and “cash in” period over the December 31 point but remember, even if your wife isn’t earning an income now, the institution where her RSP is domiciled is going to hit her with a 30% witholding charge that she will have to wait until the next tax year to get back from the CRA.

#369 Newcomer on 11.23.17 at 2:28 pm

People write about the trouble that renters face. Here in Vancouver, like just about all my friends, I rent. I’ve never heard of my friends having problems. For example, my landlady just let me know that she would be spending 10K to fix a problem in the house we rent. One friend rents a furnished place for half the year, and his landlord takes the trouble to rent it to someone who wants it for the other half, so it is available when my friend gets back.

The key seems to be choosing your landlord. Most of my renting friends have 7 figures stashed away and a few have 8 figures. Some have less, but nobody is struggling. Landlords worry a lot about people not making the rent or leaving because they lost their job or whatever. They also worry about people trashing the place. If you have a great credit score, can show that you have a year’s rent covered with no problems, even if you were to lose your job, and are a generally friendly and respectable person, you are in the driver’s seat, and you can pick and choose your rental. The first thing is to talk to the landlord about their plans. They will generally be up front. For instance, I know my landlady will probably sell when her husband retires. A friend lives in a house that the landlord’s college-aged son will get when he gets married. But I’ve met plenty of landlords with a shady vibe, or who are close-mouthed about their personal plans and finances. I’ve always just walked away. It’s important to get a good sense of the owner’s finances. Don’t rent from flippers or people of modest means who own a half a dozen properties. You want someone who can stay the course and has the means to deal with costs without delay.

As usual, those least in need get the best deals. For example, a newly built eight-bedroom hill-top house in North Burnaby: $4500. A new, furnished two-bedroom penhouse in False Creek: also $4500. A small, old house in East Van: $2000. A two-bedroom suite in Kits: 1700. A large one-bedroom apartment in the trendy part of Main: $900.

Basically, if you approach renting using even a fraction of the time and financial planning that people typically devote to buying, it’s not hard to find a good steady place and keep more of your money for important things beyond the roof over your head tonight.

#370 jess on 11.23.17 at 2:28 pm

#298 crowdedelevatorfartz on 11.23.17 at 8:18 am
the talk is the same
the solutions seem to be the same

‘buy to leave’ phenomenon – whereby investors buy properties to leave them empty –

There are more than 200,000 homes in the UK that have been empty for more than six months, according to the latest government data.

why not just register
comparisons : taxing empty homes
didn’t work in the uk as the wealthy would rather pay the 220,000 pounds in tax than expose who they are

============
In March, Russian President Vladimir Putin gave Kerimov the state award “For Services to the Fatherland, second class” for his contribution to Russian parliamentary life.
https://www.occrp.org/en/27-ccwatch/cc-watch-briefs/7302-france-probes-russian-billionaire-for-tax-evasion

…” several properties on the French Riviera via offshore companies, this way avoiding to pay millions in taxes.”

Financial transparency campaigners said that until everyone was forced to publicly declare their property assets international criminals might still be able to abuse the system to move dirty money into the country. “When it comes to super-rich criminals, secrecy is worth more than cash,” said Chido Dunn, a senior campaigner at Global Witness.

https://www.globalwitness.org/en/

#371 Overheardyou on 11.23.17 at 2:31 pm

I can never understand why the lazy always get’s it easier in life. No wonder people try to avoid taxes as often as possible.

#372 Polina on 11.23.17 at 2:34 pm

It’s sad how many people here don’t understand WHY there is a tax exemption on primary residence capital gains! Has it ever occur to them that without it many people would not be able to afford to relocate when changing employment or getting divorced? Did these people think how much the SUPPLY of resale housing will be REDUCED?

#373 TheDood on 11.23.17 at 2:35 pm

Tips for Justin;

End low interest borrowing on RE forever! Current national debt levels prove this was a horrible idea. Prices are sky high for those that want to buy and majority who bought and have not not sold are now saddled with a lifetime of debt they’ll never recover from. Simple, effective rules going forward – 25% down (no exceptions and no borrowing from RRSP), 25 years maximum!

End the free buffet for offshore buyers! If you don’t live here AND pay taxes here, piss off! If this is too harsh for our left leaning humanity lovers, then maybe we can compromise and allow 1 property per offshore buyer who plans to spend more than 6 months of the year inside the country buying our goods and spending money in the local economy. For the 6 months they live abroad, the property taxes are DOUBLE what residents pay. There are ZERO loopholes for letting family members stay to get around this. The registered owner cannot be some offshore number either, a name that appears on a passport is all that we can accept.
There needs to be an empty home tax for offshore buyers that has some teeth. If the home sits empty for MORE than the 6 months allowed by law (the one that is not in place yet), here’s an empty home tax invoice for $10,000/day that is due in 30 days. If tax invoice goes unpaid, Moose and Rocco are dispatched, kick the door down, change the locks, and forcefully transfer ownership back to the taxpayer. No appeals, no red-tape. Play by the rules or take a hike!

End speculative RE flipping. If a property is not your primary residence, all profit on a sale is taxed at 50%.

End dirtball landlords. If you’re a landlord, a single rental hike of no more than 5% is allowed every 5 years. Caught cheating?? Here’s a fine of $10,000, due in 30 days, no appeals, no red-tape, Nada, just pay up! Caught cheating a second time, here’s a fine of $50,000, same terms and conditions!

End CMHC.

#374 Middle Class Act on 11.23.17 at 2:36 pm

Justin, a $40 billion bandaid does not address the housing problem. Are you are trying to buy votes for your next election (afraid of the NDP?) or do you really want to solve the problem? I worked in the RE industry for a few years and watched firsthand the result of extremely low interest rates and lax lending has done. You could practically set your watch to the exuberant response by the masses “going RE shopping” to the latest interest rate drop. Prices spiked every time. Buyers struggled to qualify – no problem – mortgage brokers could get you far more money than you thought through new CMHC back lax lending processes so you could afford the ever increasing RE prices. Now Mr. Trudeau, the OECD says Canadians are so indebted is that it risks our economic growth. Canadians have become so accustomed easy access to low cost debt that the only way out is to RAISE interest rates and tighten lending practices, (such as phasing out CMHC, higher down payments, maximum 25 year amortizations). Restricting Air B&B, making the RE industry more transparent are also favorable options. For new tax revenues instead of taxing the middle class to death (and I believe instigating a middle class tax revolt) another option would be a speculator tax on cap gains for multiple properties or a graduated cap gains tax on all properties. There are so many options out there that will correctly treat the national housing problem YOURS is not one of them.

#375 Taxpayer on 11.23.17 at 2:36 pm

Saw this in an article about Trudeau’s low rental housing proposal:

“The portable housing benefit could eventually help 300,000 households after 2021 — when the money is to start flowing — and 2028 by providing on average $2,500 in help, and could go to those already in social housing and those on wait lists for a unit, the government says.”

Is that $2,500 a one-time benefit, annual, or monthly? If monthly, that’s $9B a year added to the deficit. Praying it’s not monthly otherwise, why would anyone work?

#376 jess on 11.23.17 at 2:39 pm

crowded elevator fart

just read and weep
https://www.globalwitness.org/en/

#377 Leftover on 11.23.17 at 2:44 pm

Real estate is the primary tax evasion vehicle for the masses. Whether it’s not declaring rental income, failing to declare capital gains, or flipping multiple houses and not declaring that as ongoing income, it’s just too easy to cheat so people do.

We don’t need new or higher taxes, we need to enforce the rules we already have. Put a fraction of that $40 billion towards CRA audits and collections (and give them the teeth to deliver) and watch the fun. Maybe even give people a one year amnesty to make things right, then let the dogs out!

#378 Grey Dog on 11.23.17 at 2:47 pm

I’m grumpy today…got a new hip last Friday with 1 week’s notice…I was on a standby list for a couple of weeks expected it to be next Spring, and got the call to show up Friday.

Yet this is the reason we scrimped and saved for 40 years…RRSPs plus TFSAs when they were introduced. The Hospital waved goodbye to everyone on Sunday…yup took us all off the IVdrips and sent us all home. I’m sitting pretty today in a respite room of active senior luxury retirement home. I am very glad we saved cause I’m just now ready to climb down and up a couple of stairs before I go home to a whole flight of stairs next Monday. The good bit about this place is they let your dog visit you daily.

Remember someday you too will be a Grey Dog needing a new hip and you can do it YOUR way cause you saved! Next …payments for rehabilitation.

#379 Darren on 11.23.17 at 2:50 pm

Debt load in Canada….
https://wolfstreet.com/2017/11/22/private-sector-debt-implode-next-us-eurozone-japan-china-or-canada/

#380 fisher on 11.23.17 at 2:51 pm

Gov’t should build in high demand cities, quality rental apartments catering to the middle to upper-middle class demographics, in the desired neighbourhoods. These rental apartments should be 1,200 sq/ft and up, 2 to 4 bedrooms. Rent prices should to be based on break even cost for the Government, not based on optimizing profit.

#381 IHCTD9 on 11.23.17 at 3:02 pm

#347 Elon does it again. on 11.23.17 at 12:58 pm
If you have confidence in your work…

http://www.businessinsider.com/elon-musk-just-met-his-100-day-deadline-on-a-50-million-bet-2017-11

Now this is a bet I have a lot more respect for than those ForEx bets. Bad ass!
_______________________________________

Elon Musk delivers a job on time.

He’s some kind of hero?

Well, I guess he was smart enough to rebadge the penalty clause embedded in his contract as a “bet” for all his fanboiz

#382 South Burnaby gardener on 11.23.17 at 3:09 pm

1 – Have the CRA actually enforce anti speculator legislation. This has to not only be done but seen to be done.
2 – Undo whatever the changes to the tax laws that made it unattractive to investors to build and hold multi-unit rental properties. In the lower mainland, you will notice that almost zero multi-unit rental properties have been built since the late 1960s.
3 – Implement the tax rule that if the buyer can’t show their CRA assessment for the last 3 years, you pay a surcharge when a) buying the unit and b) for property taxes. I don’t care where you are from, if you are living there full or part time, but I do care that you are not paying your share of the taxes. Once you have 3 years (consecutive and ongoing) of CRA assessments, you don’t get dinged.
4 – Either eliminate CMHC or drastically reduce their coverage, so that financial institutions make a more realistic assessment of the risk involved in mortgage loans.
5 – require all reassignment RE sales be recorded (in BC, in the land registry) and that the buyers pay the transfer tax.
6 – where a numbered company is the buyer or the seller, the information on all shareholders in the numbered company be disclosed to both the CRA and the land registry.
7 – end the RSP monies to fund RE down payments.
8 – require the provinces to publicly disclose how much they spend each year in funding the tax deferment. Should have to provide the data for the last 10 years.

#383 I can't remember my name on 11.23.17 at 3:14 pm

1. No more mortgage insurance. Banks can put there Big Boy Paints on and take the risk , instead of the Tax Payer. 2. No more ( and this is were you hate me ) Foreign Buyers. CANADIAN HOMES FOR CANADIANS !!! You want to come Here? RENT !!

#384 Jamie Dimon on 11.23.17 at 3:15 pm

My spouse and I earn in the top 5% of earners in our modest little town but yet can not afford the top 5% of housing. well we could if we spent every last dollar on housing and left the portfolios bare and just ate the countertops in our retirement. And the fix for that is 40 billion (with a B) to low income earners to get better housing? That would build 40 port Mann bridges and put thhhouuussands of people to work. And maybe low income earners wouldn’t be so low after all. Justin baby, let the interest rates do the dirty work.

#385 Blacksheep on 11.23.17 at 3:37 pm

Wow…..hundreds of commenter’s suggesting a multitude of actions that could be taken to meaningfully decrease RE values in Canada.

Prompts me to ask:

1) Who here believes the average Canadian, wants RE values to meaningfully decrease? Remember 70% of pop already owns RE, with many carrying significant debt on said homes.

2) Who here believes the Canadian system / politicos, wants RE values to meaningfully decrease? Remember 70% of said pop owns RE and will very likely be voting in the next election.

3) Who here believes the Canadian system / politicos are, or have been, simply too incompetent to apply any of the dozens of reasonable actions suggested here, to meaningfully decrease RE values?

The obviousness of the situation is lost on most of the commenter’s here, or they would realize the system is not at a loss, as “how to” significantly decrease RE values, the system is simply not “willing to” significantly decrease RE values.

Decreasing RE values may be the correct action for those who wish to buy RE or choose / forced to rent, but these unfortunate parties are in the voting minority and no politian is going to consciously end his / her political career by doing the right thing for the minority.

Remember, democracy (mob) rules.

Even though I like to think of myself as Capitalist, I’m honest enough to see that Capitalism no longer works well, for significant % of the population, for a dozen different reasons.

Trudy is proactively sticking the small end of the wedge in by beginning the inevitable transition to ‘Basic Income’ supporting those whom cannot compete in our Dog eat Dog world.

In the near future radical technological change, combined with revised social expectations of equality, will accelerate said change at a rate that will blindside those not paying attention.

Remember: Don’t fight the system….

#386 tulips on 11.23.17 at 3:39 pm

Found this gem in my monthly credit card eStatement:

“Did you know?
Paying more than the minimum payment due on your account each month can save you money in interest charges.”

Whaaat? Are there really people out there who don’t know that? Please fix our education system!

#387 Russ on 11.23.17 at 4:13 pm

This T2 housing plan sounds like another dumb Fed Liberal idea, doomed to fail as with most of the other grande schemes.

How about this one? Let’s go back to aboriginal roots and build some traditional Longhouse, using an updated design. Homeless & poor can live together as in past traditions utilizing low maintenance, community & love in one big abode. Non-smoking, of course.

While we’re at it… rewrite history to history, for gender-neutral considerations.

#388 45north on 11.23.17 at 4:20 pm

Taxing scant empty houses or mythical foreigners has done nothing but allow politicians to look like they care.

Are there better ways to deflower housing so average families can once again afford average homes?

Home Capital Group showed what the banks are doing – they’re withdrawing credit. Hilliard MacBeth says they have changed their view on how much they will lend and to whom. So housing will deflate – it’s deflating now. The result will be average families will be able to afford average homes – no government intervention required. Many will suffer – they will lose their family home – some families will break up – and as if by magic what will appear – subsidized housing specially tailored to women with children. Provided by your benevolent Liberal Government!

The Liberal strategy is duplicitous and will seen as such. Women moving into the subsidized housing will be aware that they have moved down a notch. Socially. They are going to be looking at government and see that it knew what was coming – true it is a noble thing to provide for women and their children but it’s not so noble to hide an impending crisis. It’s the opposite of what government is supposed to do – it’s supposed to see the crisis and look for ways to avoid it or at least lessen the damage. The government policy seems especially designed to break up families – it sounds like single women with children will be given priority – this is just an invitation for the husband to leave. Talk about kicking a man when he’s down. A sudden increase in subsidized housing will damage established neighbourhoods further reducing property values. Subsidized housing is poorly planned – changing for the worse the residential character and disrupting traffic and parking patterns.

The government is supposed to see the crisis and look for ways to lessen the damage. It needs to take the side of families and look for ways to help and encourage them. One simple way is to give families a thousand dollars a month for a year in cases where they have lost their home due to bank action. They take the money and find the best housing they can. The money is available immediately – families get it just when they need some help – they don’t have to wait for housing projects, for zoning, for construction. The money also assures that housing is handed over to the banks in good faith. In the US, when the banks repossessed homes, much of the value was destroyed – mostly due to inattention. The money goes directly into the economy. Administration should be simple but you gotta realize this is government.

The government offers a solution but doesn’t identify the problem. People will see the problem when they live it. They’ll see not only was the government no help, it made the problem worse.

#389 Adrian on 11.23.17 at 4:25 pm

326 NEVER GIVE UP on 11.23.17 at 11:03 am
***
Thank you!

#390 CHERRY BLOSSOM on 11.23.17 at 4:26 pm

DELETED

#391 Johnny Boy on 11.23.17 at 4:26 pm

#346 Braj on 11.23.17 at 12:51 pm

#155 Smoking Man on 11.22.17 at 9:20 pm
You know what, when Justin starts building his low cost housing it will end up 10 times over budget and liberal donors, builders will make out like bandits.
Why I’m an honest conservative is beyond me, its really stupid.
I should just abandon righteousness, gain power through bull shit and celebrity status, molest young chic’s for free and become a Hollywood Democrat.
Can’t do it.
Not because I’m a feminist, but because I’m a man.
Woman need protection from bigger stronger horny mean beasts no matter what your lesbo teacher says about safe spaces.
Dr Smoking Man
Phd Herdonomics
***
Made me laugh out loud.
Ladies and Gents,
Smoking Man, the legend.
…………………………………………………………..
I see the legend is hanging from the window. Holy shit he does have hair! And on his head too!
I thought he was off to LaLa land?
Big Hollywood producer guy?
Let them know what you really do when you hit the border Smokie.

#392 PeterPan on 11.23.17 at 4:38 pm

1. if CMHC no longer provide mortgage insurance, then the bank will be very careful issue loan to the general public.

2. Regulate Airbnb it the same way as the hotel industry.

#393 Bud on 11.23.17 at 4:40 pm

Not everyone can live in big cities or coast communities. We need to decentralize housing to smaller less desirable communities where rental rates are generally lower.
As well builders need incentives to build multi-family units in some communities. We haven’t had a new condo or apartment complex built in our community in over twenty years because it takes the builders too long to recover their costs.
There should also be more emphasis on getting people into trades training instead of pushing them all into universities where they spend four years or more, amass huge student loan debts, then come out with a degree that gets them a job at Starbucks or Tim Hortons. In the meantime contractors are desperate to find carpenters, gas fitters, plumbers, etc., to work on existing and new projects. Many of these are getting delayed due to a lack of qualified tradespersons.

#394 Stan Brooks on 11.23.17 at 4:41 pm

Canada household debt-to-GDP ratio the highest in the world: OECD

https://ca.finance.yahoo.com/news/canada-household-debt-gdp-ratio-highest-world-oecd-182658511.html

reached the lowest point and keep digging…

#395 Adrian on 11.23.17 at 4:48 pm

Relating to what I wrote earlier (#279), this news article was published by the CBC earlier today:

“The tax rule changes are aimed at ending the ability of wealthy individuals to use incorporation to gain what the government maintains is an unfair tax advantage. The most contentious proposal would limit the ability of a corporation to make so-called passive investments in things unrelated to the business, like real estate… The report says 60 percent of all passive income is earned by CCPCs with “no active business income, suggesting they were set up solely for the purpose of generating passive income.””

“Passive income changes could net feds $6 billion, PBO says”
Nov 23, 2017
http://www.cbc.ca/news/politics/pbo-report-morneau-passive-income-1.4415892

#396 oncebittwiceshy on 11.23.17 at 4:58 pm

Blacksheep: “1) Who here believes the average Canadian, wants RE values to meaningfully decrease? Remember 70% of pop already owns RE, with many carrying significant debt on said homes.”
<<<<<<<<<<<<<<<<<<<<<<<<<<<<

Neither the homeowners or the government want to see home prices correct/crash/decrease, Blacksheep.

Perhaps, our somewhat myopic government has actually looked into the future and are preparing for the inevitable.

That future just might entail alot of former homeowners in B.C. and Ontario looking for reasonable accomodation as things drastically change.

Nothing says "caring government" more than subsidized rentals for bankrupt homeowners.

http://www.bnn.ca/economic-impact-of-mortgage-stress-test-nothing-to-laugh-at-veritas-1.920355

#397 Bud on 11.23.17 at 5:04 pm

My parents lived in London in the fifties. When the government saw overcrowding begin they decentralized the larger companies to new and smaller towns on the outskirts, had builders construct lower price housing, and offered tax incentives to the businesses willing to move.
I live in a very nice community on the asunshine Coast in B.C., and I constantly hear and see complaints that it costs too much to rent or buy here. Of course it does, this is a desirable community with a.m. large influx of retiring baby boomers with money to spend to live here. If you want lower rents you may have to give up being in an oceanfront town with all the amenities and move to smaller less desirable communities where rents and house prices are generally lower.

#398 domain on 11.23.17 at 5:09 pm

1. Dissolve CMHC, and exit the mortgage insurance industry. It’s mere existence distorts the entire mortgage industry funding system and banking with it, by mis-pricing risk, and encouraging banks to make their primary goal to be loan volume as opposed to quality. The government has no place in guaranteeing private profits for corporations, or anyone for that matter. Exit. Leave. Let the market re-price risk, then don’t do it again.

2. Please do not hand out money for people to use towards rent. Since these people that you are targeting for support are the lower, marginal renters in the economy, the market will adjust to this new lower limit, and you will effectively be raising the marginal level of payable rent by buoying that group. That will lift the rest of the rental market rates, as the perception of a renter of last resort via government support will be the signal you send to the rental market. The market will adjust, and more taxpayer money (which is all government revenue) will be effectively thrown down the toilet.

3. Focus on enforcing your existing tax laws governing the taxation of income and profit from real estate. There are still TONS of people out there not reporting rental income (more now with AirBnB) or playing the sell the primary residence and move into the rental house, rinse and repeat game. Forget small businesses, that is where the money is, and you don’t even have to justify it since people who don’t report that income are actual tax evaders.

4. Sue AirBnB for records, and enforce the income tax requirements for users. Then, make that data available for municipalities and the public so that municipalities can levy hotel taxation against the transactions by users, and recover some tax revenue as well. I wouldn’t suggest to intervene by banning it, but at a minimum one ought to remove the illegitimate incentives that it currently offers by tax evasion and the breaking of municipal bylaws. Then if people want to continue with it, the choice will have to be made with a level playing field in mind, and that will return some inventory back to the rental market.

5. Take a step back and look at the ‘success’ of all government action in public welfare. Ask yourself why with all of the Billions upon Billions taken from taxpayers and future generations, why there seems to be a never-ending battle of issues, requiring more and more taxpayer money?

Why haven’t you been successful in solving these issues that you claim to be interested in solving? Is it perhaps because you are treating the symptoms as opposed to the root-cause of the issues? Do you not recognize that by your efforts to treat the symptoms, you exasperate the issues or simply create new ones?

Do you think that consuming the economy’s pool of real funding by over-taxation, then squandering it on bad ideas will lead to prosperity? Is prosperity even a concern, or is your goal to cultivate government dependence so that your entire class of bureaucrats can continue to enjoy the security and prosperity that is harvested from the labour of the taxpayers?

At some point, either the government acknowledges that their largesse and meddling with the economy is the root-cause of many issues, and they reverse course. The alternative is they continue to ignore all of the warning signs and symptoms of an economy under immense stress due to their policies and intervention, and they preside over the consumption of the remaining wealth in our economy, and ultimately its demolition.

#399 AGuyInVancouver on 11.23.17 at 5:29 pm

#381 Blacksheep on 11.23.17 at 3:37 pm
Wow…..hundreds of commenter’s suggesting a multitude of actions that could be taken to meaningfully decrease RE values in Canada.

Prompts me to ask:

1) Who here believes the average Canadian, wants RE values to meaningfully decrease? Remember 70% of pop already owns RE, with many carrying significant debt on said homes…
_ _ _
For that you’d have to go back and see how many have bought since the Harper Tories ignited the housing bubble with 40 year mortgage etc.

Sadly the longer the Tories, Liberals and Bank of Canada allowed this bubble to go on, the more people get lumped into the list of who will get hurt when it deflates. The biggest fear has to be it will deflate at a moment they have no control over, ie no policy will help. They won’t be able to use low interest rates again, as they already shot that bolt.

#400 Damifino on 11.23.17 at 5:32 pm

#394 domain

Extremely well said. I’m with you all the way.

#401 Eurovision on 11.23.17 at 5:33 pm

Bitcoin will crush everything in its downward spiral, biggest pyramid in history. Dirty equity will be cleansed.
But first, all the poor fools.must join the party.

#402 Prince Polo on 11.23.17 at 6:06 pm

Spend some of the $40 billion to crush realtor monopoly on sales data (let zolo or Redfin create a Canadian version). Use the rest to teach all citizens about amortization tables….

#403 backwardsevolution on 11.23.17 at 6:12 pm

@#359 VJ: “Raise rates?
>> Market decides it, not govt.”

*******

No, the government HAS been deciding the interest rates. Why do you think we’re in such trouble? Because the government got involved and has purposely suppressed interest rates. Every time the market starts to get jittery, the government steps in.

After the 2008 crisis, do you think for one second that the “market” would have lent money to people who could barely fog a mirror at 3%? No, I didn’t think so.

But you were right to say that without CMHC, the banks would then be on the hook for the loans they give out, which is as it should be. The banks would have a “come to Jesus” moment and we’d be back to 25 year amortizations and 20% down payments within about two seconds.

The problem has been created by government meddling, and now they want to meddle some more.

People don’t need rental subsidies.

THEY NEED PRICES TO COME DOWN. Without government meddling, they would come down.

None of this would have occurred without government meddling. This disaster has been caused by the government.

What do you think would happen if the government came out and told the bond market that it would no longer intervene, that it wouldn’t step in to bail the banks out again, that they were going to take away CMHC? Interest rates would go to the moon.

Government is absorbing the risk for those already in the market, and prices have risen accordingly. Prices would not have risen had banks been responsible for their own risks because the banks would not have been handing out mortgages like candy to anyone who could mark an “X”.

#404 backwardsevolution on 11.23.17 at 6:26 pm

Foreign citizens should NOT be allowed to buy land. Period.

You can’t go to Asia and buy land. It’s not allowed. You can purchase a condo there, but NOT land.

In Asia, only citizens can buy land, and, sorry, they’re not taking applications for any more citizens.

I think Thailand allows the grand total of 100 new foreign citizenship applications per year. 100! Not hundreds of thousands, and especially not hundreds of thousands with unlimited funds.

Can you just imagine if Thailand had opened up its property market to foreigners a few decades ago? Why, it would have been bought up for pennies, forcing prices up for existing Thai citizens. Do you think the citizens would have been happy with this situation? NO.

Do you think they would have sat there and smiled as their rents increased astronomically and they were forced out of their homes by foreigners?

There would have been a riot.

#405 Manitoba Whale on 11.23.17 at 6:28 pm

#342 Phil on 11.23.17 at 12:12 pm
I will take a ‘Harper Hangover’ any day over a chronic ‘Trudeau Migraine’. At least the hangover you can sleep off.

#406 DJIM on 11.23.17 at 6:36 pm

The root of problem is uninformed consumers. Establish a national housing database, with all real estate agents required to contribute any price listed, bid, offered, or paid, available to all buyers. Make it a legal requirement that every home listed for sale must have an independent home inspection, which must be made available to anyone making an offer. Require buyers to deal with one offer at a time; no more bidding wars and therefore no more unconditional offers. Hopefully he listens!

#407 michael kent on 11.23.17 at 6:37 pm

It’s simple either put an end to property in Canada being owned by a Foreigner or foreign company. Allow 3 years for currently owned properties by these individuals to be sold. Or add a 200% foreign owned property purchase tax used solely for low income housing options so a $500000 property would be 1.5 million for a Foreigner. Let Canadians own Canadian homes.

#408 Karl on 11.23.17 at 6:57 pm

Dear Prime Minister,

Please eliminate the deficit. I’m all for helping people as much as possible, but deficit spending just kicks the can down the road and creates a bigger problem in the future. That is why we are in the mess that we are in today. Harper’s preemptive bank bailout + CMHC insurance + ultra low interest rates were an attempt to avoid the crash of 2008. Instead, these factors massively inflated house prices and set us up for a bigger crash in the near future.

I can understand that giving out money feels good, but we need someone to make the tough decisions to make houses more affordable again:
–End CMHC insurance. The banks are the ones benefiting right now and and taxpayers are footing the risk.
–Implement laws that prevent people from making easy, tax-free money by flipping houses. Housing has become an international commodity that is making housing unaffordable for Canadian families.

I want housing more affordable too, but giving out money to pay rent will just inflate rent prices further. Our current economic performance is good, so it is a good time to knock down the deficit, not increase it.

You promised a mild deficit, but instead we are getting massive spending. Please be responsible for the sake of our future.

Thank you and please listen.

#409 Ace Goodheart on 11.23.17 at 7:32 pm

RE: #401 Eurovision on 11.23.17 at 5:33 pm
“Bitcoin will crush everything in its downward spiral, biggest pyramid in history. Dirty equity will be cleansed.
But first, all the poor fools.must join the party.”

I’m just concerned right now that the only thing that Bitcoin, Ethereum and the others are good for, is to create safe havens for dirty money. Whenever I’ve really gotten into debate about the usefulness of Cryptocurrency on this blog, when I get to the root of the matter what I get in response is to the effect that governments cannot control Cryptocurrencies.

The USA cannot “freeze” your bitcoin account. T2 cannot tax your 700% gains. If you want to purchase drugs and you don’t like dealing directly with the drug-mafia, you can do so online using a cryptocurrency. If you want to buy something illegal, cryptocurrency is the way to go.

If you are a former African dictator running from the IMF, Bitcoin is your saviour and the solution to all your problems.

Other than money laundering and creating a safe haven for dirty cash, there appears to be no reason to use a Cryptocurrency.

#410 mountain guy on 11.23.17 at 8:06 pm

regarding housing costs & affordability:
I suggest the simplest approach may simply be to:
1. have the CRA, provincial land titles offices and real estate industry coordinate information sharing to ensure speculators (flippers) pay tax on their capital gains.
2. fund the proposed $40B affordable housing program through closing offshore tax avoidance loopholes. The tax revenue will generate far more than $40B. I believe the current Minister of Finance has sufficient working knowledge to get a good start on this immediately.
3. while you’re at it, review family trust tax-avoidance loopholes as well.
Perhaps the excess tax revenues from these three initiatives could be used to reduce the deficit, thus reducing the tax burden on future generations who will also be seeking accommodation.

#411 not so liquid in calgary on 11.23.17 at 8:35 pm

Zapstrap on 11.22.17 at 7:07 pm
I found 65 cents in the coach last night before the missus did.

Cool! That puts you about half way to an American buck.

#412 not so liquid in calgary on 11.23.17 at 8:37 pm

Dear Sir:

Kill CMHC. It has been used above and beyond it’s initial, intended purpose.

#413 AT on 11.23.17 at 9:52 pm

CMHC should freeze insuring new mortgages temporarily regardless of what down payment the borrower has. Without CMHC insurance, banks will be more prudent and strict in extending/renewing mortgages to borrowers. The amount they can borrow will be less so they can only buy a less costly house. A market with few buyers will balance itself eventually when sellers lower the price of real estate to more affordable levels to buyers. Then the CMHC can resume insuring mortgages.

#414 Anita on 11.23.17 at 11:04 pm

Dear Sir,

As the leader of the country its your duty to act in the best interests of the people for generations to come, not just the short term interests that’ll get you through the next election. CMHC needs to go and the housing needs to be allowed to correct to become affordable again. We’ve had more than a decade of cheap, virtually free, money and look where it got us. Giving cash handouts does nothing but teach us that poor behaviour should be rewarded. Do what’s right for the very long haul, I beg of you.

#415 Nuke on 11.24.17 at 8:39 am

I have been living the solution for over 25 years. Non-profit housing. A tight complex of stacked townhouses and a renovated four storey office. The housing charges (rent) are maintained to keep the property in great shape, 3 bedroom TH for about $1,400pm, increase of about 1% annually since I moved there. My home price equivalent with all opportunity costs would be about $220 to 250K. We just had all our front lawns and interlocking bricks done last week; new windows, hardwood kitchens, new patio fencing and full-time maintenance workers. My rent covers the costs plus subsidizes neighbours on low income. Being a non-profit no urge to use real estate appreciation as an ATM, just for low cost upgrades. I can go on extended vacations and my only housing worries are my holiday ornaments and what to watch in my home theater.
Property is in a very desirable downtown Toronto neighbourhood with property values of 1 to 2.5 million. Property across the street is up for 1.2-4 million but buyer not allowed to enter and no conditions. No bites yet since Sept.

Create a friendly neighbourhood, keep cost down and eliminate house appreciation anxiety. Mixed income, non-profit housing is the solution.

#416 QT Survey on 11.24.17 at 11:06 am

82% is an extremely worrying number, how are Canadians affording Christmas / their lives?

#417 Frances on 11.24.17 at 12:41 pm

I have gone to a few open houses, seen some places that I like, but have not yet felt 100% sure about any of these places. If I’m going to fork over 1 million, I need to spend more than 20 minutes with a chatty real estate agent distracting me from potential deal breakers. I need to know that it’s ‘the one’. So here’s an idea. When you list your home, why not let serious buyers spend a night in your house? You can even charge them $500 to 1k per person and split the money with your real estate agent or put it towards the buyer’s offer. You’ll make some money while your house is listed, and the buyer can be more confident in putting a strong offer on the table. As soon as you list your house, you can put a link to a booking calendar and potential buyers can book themselves in for the night, just like they would for Air BNB. They’ll get to know the home and have a chance to make an offer the next morning after they have woken up to the morning sunlight and made coffee in your kitchen. If it’s truly ‘the one’, they will be more attached and will be more likely to make a strong offer. This would also take care of bidding wars as there would be a 24 hour window for the buyer to make an exclusive offer after spending the night. It would also discourage people who can’t afford the home from making an offer they can’t afford, because they likely can’t afford to spend a night in the first place. #seriousoffersonly

#418 Steven Rowlandson on 11.24.17 at 1:20 pm

Okay, dogs, here’s the question: could you find $400 a month, if you had to?

Yes but only at the cost of not trying to have a place to live.

#419 Andrew Miller on 11.24.17 at 2:31 pm

> Nix the capital gains exemption?

Maybe not an outright elimination, but change it to a tax credit?

#420 Wes Coast on 11.25.17 at 2:24 pm

1) end corporate ownership of residential property
2) end non-resident ownership of residential property
3) create a ‘federal income tax equivalent’ type of ‘property tax ‘against current non resident owners
4) end the CMHC (slowly)
5) apply the stress test rules against credit unions
6) move the mortgage risk closer to the decision makers and never backstop the risk with taxpayers money.
7) Don’t become racist. There are many forces of disunity at play right now. Our strength is in being united for Canada’s betterment. If you were a foreigner and you followed the process to become a resident, you would feel that the society is welcoming you as a contributing member when they allowed you residency. If you the current citizen don’t like how things are going: Vote or run for office. Don’t treat people poorly as they have no idea there was any negative consequences to other Canadians (real or perceived) by their desire to join Canada’s society.
8) increase the rental stock but stay away from draconian rent control. Increased stock regulates price.

My 2 cents for what it is worth.

#421 Chinese Buddy on 11.25.17 at 2:37 pm

Reform our tax system. Right now, property tax goes to the city, while income tax goes to the province and federal government.

In the US, many states do not levy state income tax. Instead, they have much higher tax rate on properties. This way, no additional burden on working middle class but much higher burden on speculators, whether they are local or international.

The contrary example is China, where there is almost no property tax at all. If you haven’t checked real estate prices in Beijing and Shanghai, do it. You will be shocked.

I’m a supporter of BCNDP’s 2% tax on properties, but I highly doubt they will implement it.

#422 Steven Rowlandson on 11.26.17 at 2:13 pm

Are there better ways to deflower housing so average families can once again afford average homes? Raise rates? End mortgage insurance? Nix the capital gains exemption? Bigger down payments? Thirty-year loans?

Yes!
Cap residential real estate prices at 3 years pay for one persons income at minimum wage and have a 25% down payment. Ban residential real estate investing and profiteering and reserve residential property ownership to citizens only. Permit citizens and builders access to crown land to enable home construction and limit undeveloped land prices to a buck an acre and serviced lots to 1/4th the house price.
What people do to make their dwelling place appropriate to their tastes is of limited interest to the state but quashing genocidal real estate prices and making home ownership possible for all workers is to my way of thinking a worthy goal. Homes are just a place to live nothing more. The only money to be made in home construction should be by those who do the work building it.