Apathy

Two days ago we talked killer taxes. Then a couple hundred people came here to, shockingly, reveal what they earn. Then my Porsche-driving fancy portfolio manager buddy Ryan baffled us with some crazy stock formula so he could look clever. Just another laconic weekend at GreaterFool.

Let’s put some of these things together and see what squirts out. First, there’s no doubt a huge number of people you know, including house-horny family members, are financially pooched. Most don’t actually realize it. Debt is massive, taxes are rising and the real estate market’s surfing on an epic wave of credit. Rising interest rates and tighter lending regs in 2018 threaten that.

Canada is in worse shape when it comes to family debt than were Americans before the housing market there blew up 12 years ago. Our borrowing equals that of the Japanese when that country imploded in 1993. Here’s a chart the OECD turned out last week, to put things in perspective and scare you.

Private sector debt has doubled in a decade, and two-thirds of that is mortgages. Stats Canada says Canadians’ wages, after inflation is accounted for (and it’s historically low) haven’t increased in fifty years. This is why dads in the 1960s could support a family of four, buy a house, maybe a cottage, then retire comfortably on a single income. Today it’s a struggle for two working people to buy a condo, let alone have a kid. The cost of living – pushed ahead by taxes and real estate – led directly to a borrowing orgy once interest rates collapsed. Now it’s starting to unwind.

What’s the point?

Well, taxes are about to rise more in Canada because governments cannot live within their means, either. Soon your CPP premiums will be increasing, but higher benefits won’t arrive before today’s teens are tomorrow’s wrinklies. Real estate prices will take several years to melt lower, but as they do mortgage rates will be increasing. A Fidelity survey found 80% of people plan to “rely heavily” on scrawny public pensions to get by, and almost half of pre-retirees figuer they’ll need to dump their houses to raise cash to live on.

You have a choice. Do what everybody else is, and pray. Or not.

Given that all other countries have suffered a reversal when its citizens pigged out on this much debt, it’s reasonable we will, too. Credit is not infinite. When it begins to contract, those who need access to it on a routine basis are whacked. Time for another chart, just to belabour the obvious…

In three words: you must invest. Being apathetic, keeping the bulk of your net worth in one vulnerable asset, on one street in one city is now a really bad idea. Sure, own a house if you want one, but also strive to have a balanced approach to your finances – maxing out your TFSAs, taking part in your company’s matched RRSP, income-splitting with a spousal plan, opening a joint non-registered account and, above all, not being afraid of markets or the future. Sitting in cash, in GICs, in some bank bond fund, paralyzed after reading a doomer web site written by a guy who can’t afford a new Star Wars backpack is a dead end.

Invest in the kind of balanced, diversified portfolio this blog has oft suggested. Load up on exchange-traded funds, avoid [email protected], don’t gamble by flipping individual stocks (even weed) or buying cryptos, or being sucked into high-fee mutuals. Also recognize that while technical-analysis gurus like Ryan make a living riding the ebb and flow of markets, average investors do not. A 10% or 15% correction that lasts a few weeks or months will be irrelevant to your long-term future. Every shred of research has shown you’re better off investing today and staying invested rather than trying to time markets.

If you have a little money, open an online TFSA account and get started. If you have enough, look for a fee-based advisor. If you have an ‘investment’ condo plus a house, dump the sucker. If you have a variable-rate HELOC, start paying down the principal. If you’re self-employed, take salary instead of dividends, feed an RRSP and avoid an audit. If you’re sixty, take early CPP and push it into your tax-free account. If you’re twenty-five, wait to buy property unless you dwell in Halifax or Regina (and invest in fuzzy underwear). If you’re coming up to retirement, house-rich and asset-poor, bail.

Good luck. You have five weeks.

160 comments ↓

#1 Sam on 11.26.17 at 5:11 pm

Why bail within 5 weeks? If prices won’t crash and take several years to bottom why rush to sell? There may even be a surprise and prices will go up next year. Haven’t seen any significant correction anyhow I’m still pooched. And renting is hard. Bidding wars everywhere and $1600 for on bedroom. Can’t afford that.

#2 technical analysis? on 11.26.17 at 5:24 pm

” #89 Gravy Train on 11.26.17 at 3:56 pm
Just out of curiosity, when stock prices fall below your weekly moving-average crossover system, do you buy or sell? And how much? All of it? :)
(You’re not a long-term investor, are you?)”

you really don’t understand technical analysis do you?

a simple monthly moving average system would have you in the SP 500 in late 1982, and out in early 2001. you would also have been out for the 2008 collapse, and back in late 2010 and STILL long the SP.

some of you people seem to be confused as to what technical analysis is and how to use it.

#3 Cheese on 11.26.17 at 5:25 pm

Even making below 30k, I have managed to invest. People making more have no excuse!

CHZ

#4 Dave on 11.26.17 at 5:31 pm

Been hearing about TOOOOO much debt for over 5 years. At what point does the banking system turn down the taps?

Does some major event need to occur….My guess it will be Trump. Our govt will not change on its own

#5 SimplyPut7 on 11.26.17 at 5:33 pm

Food for thought

Simply Real Estate at 6:35min – 10:10min
How investors can become non-profit organizations by not adding up the true cost of owning a condo and renting out the units.

https://soundcloud.com/simply-real-estate/november-18-2017

CTV Toronto
New 49-storey condo has all 4 elevators not working.

https://www.youtube.com/watch?v=0G-S_MSx6O4

The condo market in Toronto should be interesting over the next several years.

#6 TRUMP on 11.26.17 at 5:37 pm

Garth I will refrain from taking any of your advice for the time being.

Morneau-Shepell is gonna hook me up.

They call it the “Bill” plan.

#7 Dee on 11.26.17 at 5:38 pm

Post #2 tech analysis, best source/book for tech analysis?

#8 DON on 11.26.17 at 5:44 pm

What about China’s housing market…oh no!

http://www.scmp.com/property/hong-kong-china/article/2121309/limited-upside-chinas-2018-home-prices-banks-keep-mortgages

“Property transactions will shrink in volume, according to the majority of the 51 financial institutions and more than 20 developers assembled in a November 16 meeting organised by the china Index Academy in Beijing, according to meeting minutes seen by the South China Morning Post. Most banks said there’s little chance for either mortgages and property loans to grow next year, according to the minutes.
Shanghai adds land supply for 20,000 rental homes
The meeting sheds light on how the property market in the world’s second-largest economy may be heading into a long winter, as the raft of speculation-curbing policies introduced in the past 12 months began to bite.
Chinese financial institutions are more cautious than real estate developers in the prospect of the real estate market in 2018, according to the document.
The outstanding value of China’s property loans, loans for developers and mortgages, grew at a slower pace during the first three quarters to 31.1 trillion yuan (US$4.7 trillion), according to data by the People’s Bank of China. The growth rate slowed by 2.4 percentage points to 22.8 per cent compared with last year.
China’s home prices won’t rebound anytime soon
Still, one area that was growing was the rental market, which was endorsed by the Chinese government as an alternative option, as it offers more incentives like education and other benefits to give renters the same rights as homeowners.
“We see the rental segment as one of the growth engines with more banks considering tapping the segment, which is backed by the government,” said Xia Dan, a property researcher at Bank of Communications in Shanghai.
The two biggest banks in China by assets have already tested the waters in the segment.
What President Xi’s congress message means for China’s housing market
Industrial & Commercial Bank of China (ICBC), the nation’s largest bank by assets, said last week it would offer 500 billion yuan worth of credit to support home rental market in Guangzhou, becoming the second among the nation’s four biggest state-owned banks to dash into the government-backed segment.
In early November, China Construction Bank (CCB) signed deals with Evergrande, Vanke, China Merchants Property and eight other developers to help them lease more than 5,000 rental flats in Shenzhen.”

#9 Zapstrap on 11.26.17 at 5:46 pm

I got another haddock.

#10 For those about to flop... on 11.26.17 at 5:49 pm

Lost…but not leased …pm
# 62 For those about to flop

Those Hollybridge condos look like they are part of the Richmond Oval area. Recall the developer ASPAC paid premium of over $140 million.

They were quite pricey and I recall very high strata fees.

Your data seems to indicate that buyers are armed with information and bidding wars are passe’.

One anomaly is from realtor Steve Saretzky on his recent video. Apparently a realtor in the valley is creating bidding wars for pre-sales!?

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

Hey Lost,here is one of the ones up the top of the tree in Richmond.

Asking what the paid for it ,will take a solid hit just with expenses.

The main reason I am showing you this one is that the maintenance fee and taxes add up to the best part of 30k a year.

30k a year plus 10k a month mortgage for anyone who can scrape up 20% down to live near an airport in the middle of a flood plain.

B.A Baracus said it best.

I pity the fool…

M43BC

103 5151 Brighouse Way Rich. Paid 2.98 asking 2.98

https://www.zolo.ca/richmond-real-estate/5151-brighouse-way/a103

https://evaluebc.bcassessment.ca/Property.aspx?_oa=RDAwMDBKUFFHWg==

#11 People watching people on 11.26.17 at 5:51 pm

I’ve seen this chart before, and the one thing that I found striking are the countries that are missing from the chart, most notably Australia with a similar housing mess and a household debt to GDP of about 120%. According to OECD data Aussie debt to disposable income (212%) is even worse than Canada (176%) as well. If I wore a tin foil hat I’d think there was a conspiracy afoot to somehow make Canada look like THE basket case of the world.

http://www.businessinsider.com/these-are-the-countries-with-the-biggest-debt-slaves-2017-1

This list has a few more countries added and I’m going to assume their calculations are slightly different, but the effect is the same. Canada is not the top, but being in the top 10 of this list is nothing to brag about.

#12 Deplorable Underwearer on 11.26.17 at 5:51 pm

Crazy debt to be sure.. people are nuts.. oh well, party on.

Argentina here I come!

You have a thing for undewear

#13 prairie person on 11.26.17 at 5:53 pm

Garth, you are preaching to the deaf. Only pain will get their attention. By that time it will be too late for many, if not most. The malls are crammed. Best Buy, Costco, etc. have TVs stacked to the ceilings. 65, 75, 85 inches. 6300 for the biggie. The Bay has a cast iron, enamelled pot on sale. It’s normally 550.00. It’s a pot. The Scandinavian shop has chairs on sale for 3500.00. They are chairs as in to sit down on. Maxed out. I watched one person go through three credit cards before she found one that wasn’t maxed out. In the meantime, WalMart, that empire of Mammon, has ads on TV in which kids go completely nuts when they open gifts. No religion in sight. Except the religion of the dollar. Too late, too late. Canadians are doomed.

#14 Loonie Doctor on 11.26.17 at 5:54 pm

Thanks Garth. Lots of risk out there with our leverage and spending problems. One of the concepts that I have been thinking about is diversifying against political risk. By that I don’t mean wars or foreign government problems, but rather actions by our own government here. The current situation has been brewing for years and I have practiced this way with my own planning.

For example, I am an incorporated MD. I contributed to RESPs for both my kids since they were born because I figured at some point the government would be looking for money and target CCPCs. Plus I follow your never turn down government money rule. On the other hand many of my colleagues kept that money in their corps with the idea to fund their kids via dividends because there was a small financial advantage to that. Now those folks won’t be able to do that and have missed all those years of RESP grants that they will never make up. An example of playing by the rules, but putting all your eggs in one basket, and losing because government changes the rules. There is “political risk” in not diversifying like that.

For that reason I have also always taken a salary to build a spousal RRSP for my wife plus paid her a salary to have her own RRSP and further income split using an investment account in her name paid with her salary only. Even then most of the money is left in the corp. We also have money in our primary residence following your rule of 90 (we are 42 and about 25% of our networth in our house). My point is that we are spread out amongst as many investment account types and asset classes as we can be in case it is politically expedient to target any one of them (like using dividends to fund offspring educations was just recently). We are fortunate to have enough to do that rather than pick and choose.

As you keep eluding to, the government problems here are likely to worsen over time and cause government to seek new targets for revenue. I am calling it diversifying against political risk, but is there another name for this type of diversification strategy/concept?

#15 Happy Housing Crash Everyone! on 11.26.17 at 5:58 pm

SHYSTER SAM

Who are you SHYSTERS trying to fool? Nothing is selling and this after many price drops. Look at this place which sold in five days in March in a bidding war for $2,118,000. The lucky buyers wanted out in late July. House went on market for $1.95 million. Open house after open house. Price drop after price drop and still sitting. This is it. http://www.realtor.ca/Residential/Single-Family/18661715/132-LAURELCREST-AVE-Toronto-Ontario-M3H2B3-Clanton-Park

This is a good area where houses used to sell in a day. Now nothing. No bidding wars. You dirty SHYSTERS are
horrible scum of the earth liars. Housing is finished and will fall for YEARS

#16 Exodus 2020 on 11.26.17 at 6:07 pm

A couple things about the household debt graph:
1. Every country has differing interest rates. If Canada has the highest debt to GDP but the lowest interest rate, then the graph is out of context. Divide the info by an interest rate factor and re graph.
2. Population growth must have some factor. Japan’s population isn’t growing but Canada’s is through immigration. If current borrowing remains static while population increases, the ratio will decrease.
3. If the bubble bursts I hope the over leveraged speckers take a lickin.

#17 Howard on 11.26.17 at 6:08 pm

During the US housing crash, in a moment of classless nationalistic snobbery, I looked down my nose at those idiot Americans who apparently didn’t know the difference between interest and principle. Could never happen in Canada, I said. We are far too sensible and frugal by nature. We would never jeopardize our families by living so spectacularly beyond our means.

To put it mildly, I’ve had to eat crow. To our American friends, please forgive me.

#18 broader mind on 11.26.17 at 6:14 pm

I’m thinking Canadians are pretty smart. They take on a lot of debt when it’s dirt cheap and shed it when the rates are high. British and Americans seem to lower there debt obligations when money is almost free.

#19 Underemployed Male in Toronto on 11.26.17 at 6:15 pm

I don’t understand how a Hipster-Feminist couple in Toronto could afford to purchase entire 1.5+ MILLION DOLLAR houses in Toronto @ Leslieville, Leaside & Queen St, unless they are earning undeclared income from the underground market, or as Canadians as they are, take on yuge debt or borrow from their Boomer Yuppie parents?

As a 31-year-old “screwed millennial”, after my last contract with the City of Toronto, I barely can find a job which pays me over $12.50/hr in Toronto & I have a Master’s degree in Social Work (York University), class of 2011…I wonder if I’m because a male that I don’t get hired full time in government jobs in the social services sector.

I feel angrier than the screwed millennial troll that was posting entire novels and encyclopedia of anti-capitalist rant.

I feel left behind in Toronto, but I barely have a dime on me to re-locate in Canada, and Ontario Works will only pay a $900 moving allowance if I was qualified on welfare in the first place.

I pay $1,099 a month in rent for a 1-bedroom apartment located 15 minutes away from the nearest Downsview station, or 30 minutes bus ride to Lansdowne station on the Bloor Line.

Unlike other men in Toronto who off themselves, join overseas isis groups or become criminals like drug dealers, hitmen and/or human traffickers because of the SJW job market in Toronto = male discrimination, I’m a law-abiding citizen who reads financial blogs and tries really hard to elevate my position, but I feel this time, Toronto has failed me, and I advise any male that Toronto is not the city for you unless the SJW crowd accepts you.

#20 FOUR FINGERS WATSON on 11.26.17 at 6:21 pm

#9 Zapstrap on 11.26.17 at 5:46 pm
I got another haddock.

………………….

Take 2 aspirin and call me in the morning. Just for the halibut.

#21 Lee on 11.26.17 at 6:25 pm

George Soros seems to have done quite well picking individual companies as investments!

By the way people, everyone I know trying to live off of CPP and OAS is in a nursing home.

#22 Hans on 11.26.17 at 6:25 pm

I’m going to play devil’s advocate…

In what circumstances would you say that real estate is a viable investment? I’ve been reading your blog for a while (thank you!), but I haven’t been able to relate to the real estate doom and gloom. What you have written over time makes sense, however the market continues to evolve and people make money. I’m definitely not saying this time is different, however, I am asking when would you say that it does make sense to own?

A thought rattling around in my head…
If you are purchasing an investment property where the returns are xx%, fully covering your cost of ownership, maintenance and upkeep, and still throwing off some $. I know this doesn’t really exist in the GTA, but it does exist. Being a landlord does come with issues (calls, repairs, etc), but it must make sense as an investment at some point?

#23 Lee on 11.26.17 at 6:27 pm

Story in zero hedge today suggests Bitcoin will put banks out of business.

#24 Arto on 11.26.17 at 6:27 pm

We know all this. We all agree. You have been talking about it for 8 years. When the F is it finally going to happen?

#25 Tbone on 11.26.17 at 6:34 pm

Houses in etobicoke in the 900 to 1.5 mill sell in a couple of weeks.
No crash there.
If people can’t afford to buy a house now , they probably never will.

#26 Dolce Vita on 11.26.17 at 6:40 pm

Good advice but too late Garth.

It’s all extend and pretend now.

Signs YVR Condo market cooling (read: “The agents take”), troubles in 416 RE, more retail layoffs this week and the list of bad news keeps marching on.

Gut feel that it will not end well in 2018, or start well, for that matter (B20).

Will end up the largest asset devaluation in Cdn. history (RE) within the year, and, the rest is predictable after that.

https://www.theglobeandmail.com/real-estate/vancouver/west-end-vancouver-penthouse-gets-lowball-offers/article37079114/

#27 Dan.t on 11.26.17 at 6:41 pm

Might be a bit of a strange post but I ve had a few again… checked out the comments again on the comment section about what blog dogs make, income and taxes, (felt a bit depressed & it’s a bit pathetic that I did it) and saw a nice jab about…”hey dan.t are you a house owner”.

No, and yes, Canadians who bought in BC and GTA the last 12 years made a huge right decision even thought most don’ t know crap about investing and markets…IMHO they caught a massive bull market based on zero regulation or control, lax credit policies, gov wanting to devalue the s”t out of money, falling interest rates, gov incentives and more and not sure it will ever happen again…so I agree home ownership, buying with zero down, risking every cent on a house was the right decision.

Disclaimer, i don’t live in Canada, might want to come back, but stayed away because BC I find insane. If I had no ties, I would buy outright in Halifax- in a second. People are delusional and I live in Europe and maybe 1 time a year I hear real estate talk…I guess thats why I read this blog daily:-) Canada born after all, maybe it’s in every Canadians blood.

But after reading this post, it’s like I see every time I visit…prices get stupider, debt loads increase, prices get stupiderer, debt goes up, debt gets stupiderereer….you get the point…and I think, WTF is wrong with people.

Again, those who bought 10 years ago awesome, retire…and many are boomers anyhow who owned homes for 25 yrs, who just milked, other boomers for the down ( for their offspring) while their offspring can feed their retirement, with a cool massive amount of debt.

So question is, if you recently bought in GTA, YVR, what do you own. The RBC owns you, CIBC owns you, TD, owns you, yes, you may be richer than you think, if you bought at the right time, good for you. But I would say many got lucky. If you bought a condo- how is strata, taxes, mortgage, fixes, repairs…..etc.

<dam, almost forgot where I was going with this..How about next time garth, you ask blog dogs, much cash can you come up with in a week… 10k, 50k, 100k, 200k, half a mil, maybe a million (I wish)?

because I get the impression that all Canadians or most, point only to a house as a measure of success. Seems strange to me.

What about quality of life, friends, cheap rent, nights out with friends, getting hammered for 60 Euros downtown, fun meals, hoping on street car that runs every 20 mins until 3 am, go home buzzed with no stress, eating out bla bla…right, stupid, only house matters.

It seems anyone can buy crap on credit in Canada..is that a measure of success?

Anyhow, I m done now… gonna drink a 29 cent half litter beer…sorry 55 cent CAD half litter beer. (I went discount beer tonight).

Rip away!

#28 Danny on 11.26.17 at 6:46 pm

Thanks for the private sector debt.
Why did this happen.
1. Low interest….buy buy buy….with short term planning for payback period…..when really the borrowed amount was for a longer payback period?
2. Harper reign…..(time period of the debt chart Garth showed )….life is great …conservatives are in charge…they are the” super heroes “….when it comes to finances and helping the general public get richer?
Or
3. Have all those ” richer than you think!”…..ads worked?

I think all three above hypnotists approach worked together to give people a real false sense of security….which will haunt many Canadians for a long time until higher interest rates becomes ….a rude awakening…you are actually “Poorer than you think” and the nightmare will begin.

#29 Butcher on 11.26.17 at 6:47 pm

I love seeing Czechoslovakia in that debt graph.
Slovaks left the Czechs in 1993

#30 -=jwk=- on 11.26.17 at 6:47 pm

Simply Real Estate at 6:35min – 10:10min
How investors can become non-profit organizations by not adding up the true cost of owning a condo and renting out the units.

https://soundcloud.com/simply-real-estate/november-18-2017

Todd is one of the few good guys in real estate. Yes, he has a porsche turbo, but he earned it by actually helping people invest – properly- in real estate.

#31 mitzerboy aka queencitykidd on 11.26.17 at 6:48 pm

the doggie in the pic looks like a very good boy/girl
they sleep like us on their backs after
seeing we sleep on our backs…. neat

#32 akashic record on 11.26.17 at 6:49 pm

Let’s get the chart now that who are the lenders of this debt.

Until then, here is the source for today’s chart:

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

#33 Dan.t on 11.26.17 at 6:58 pm

Sorry, forgot to mention, community, local bakeries, knowing your neighbours, not looking down on others because well…”they are filthy renters” since most do anyhow, stable rents and 1 rent increase in 10 years (10%- the horror), ok, what a stupid culture I guess. Having money for vacations, travel, other fun stuff- watching what you spend, buying but not on credit. Maybe I am seriously wrong- maybe I won’t check back to read the comments. Might be better.

#34 Andrew Woburn on 11.26.17 at 7:01 pm

At least over-indebted Canadians can go bankrupt. Not so much in the “Land of the Free” where debt-slaves can be owned for life.

– Take Veronica Martish. She’s a 68-year-old veteran, having served in the armed forces in the Vietnam era. She’s also a grandmother who’s never been in trouble and considers herself a patriot. “The thing is, I tried to do everything right in my life,” she says. “But this ruined my life.”

This is an $8,000 student loan she took out in 1989, through Sallie Mae. She borrowed the money so she could take courses at Quinebaug Valley Community College in Connecticut. Five years later, after deaths in her family, she fell behind on her payments and entered a loan-rehabilitation program. “That’s when my nightmare began,” she says.

In rehabilitation, Martish’s $8,000 loan, with fees and interest, ballooned into a $27,000 debt, which she has been carrying ever since. She says she’s paid more than $63,000 to date and is nowhere near discharging the principal. “By the time I die,” she says, “I will probably pay more than $200,000 toward an $8,000 loan.” She pauses. “It’s a scam, you see. Nothing ever comes off the loan. It’s all interest and fees. And they chase you until you’re old, like me. They never stop. Ever.”

“The Great College Loan Swindle – How universities, banks and the government turned student debt into America’s next financial black hole”

http://www.rollingstone.com/politics/features/taibbi-the-great-college-loan-swindle-w510880

#35 Dolce Vita on 11.26.17 at 7:06 pm

#27 Dan.t

You sure that’s beer you’re drinking?

I live in Italy, traveled most of the EU and good luck finding 55 cent CAD half litter (litre) beer.

Just to be sure I checked and the cheapo English could only come up with these cities and prices (been to most of them recently):

http://www.mirror.co.uk/lifestyle/travel/europe-short-haul/best-european-cities-cheap-beer-10649046

https://www.skyscanner.net/news/beer-we-go-7-best-drinking-destinations-europe

Not been to the Ukraine, don’t want to go either (I’m a bit sensitive about being invaded by Russia) but cheap beer, but not as cheap as you say – by spun out Millennial:

http://budgettraveller.org/cheapest-beer-in-europe-check-my-europe-cheap-beer-index/

#36 TurnerNation on 11.26.17 at 7:19 pm

Chart lines have Canada following Communist China. You don’t say.

#37 Ace Goodheart on 11.26.17 at 7:23 pm

RE: “CTV Toronto
New 49-storey condo has all 4 elevators not working.”

https://www.youtube.com/watch?v=0G-S_MSx6O4

I love how they all stand there and complain, as if there is some government involved in fixing everything for them. News flash peeps, you own the building, the elevators are your problem, you are condo owners, not renters and if the ‘vators don’t work, guess what, you all have to pay a special assessment to get them fixed.

#38 technical analysis? on 11.26.17 at 7:26 pm

#7 Dee on 11.26.17 at 5:38 pm

i haven’t read everything there is out there. i like Perry Kaufman’s work. Trading Systems and Methods, A Short Course on Technical Trading. the second one is a little old, but if you’re new at this, it’s as good as anything to get you started. Le Beau and Lucas’ book Computer Analysis of the Futures Market has a good chapter on systematic trading. and i’d investigate Van Tharp and June’s book Financial Freedom through Electronic Day Trading. also old, but there is a chapter on having a business plan, and what it involves. also a good start. if you go through that stuff, you can start investigating on your own.

#39 akashic record on 11.26.17 at 7:28 pm

The decision about crypto currency brings down to this:

Who do you think has smarter money: old school Jamie Dimon or Peter Thiel?

#40 Ace Goodheart on 11.26.17 at 7:29 pm

I happen to know a person who has been living in a downtown condo for a while now. Recently talked to her again. She was talking about “all the fire alarms”. I had no idea what she meant. Used to living in a house, I had assumed (kind of naively) that things would be the same as they are here, if the fire alarm goes off we just press the reset button on the smoke detector on the ceiling and wave the offending smoke away or open a window, and then carry on with our lives.

Apparently in a large condo building, if ANYONE sets off a fire alarm, or if the alarms are being tested (which apparently happens very often in her building) then the entire building is woken up, and the idea is that everyone has to go outside (she says she usually just stays in her unit because there are too many false alarms and walking up and down the stairs once or twice a week in the middle of the night (elevators don’t work during fire alarms) is too difficult for her).

Condos are hell from what i hear about them. Particularly in “Big Brother” Canada where people are treated like brainless lemmings to be shunted around and never told anything. I like being able to reset my own fire alarms and fix my own house.

#41 SoggyShorts on 11.26.17 at 7:30 pm

#22 Hans on 11.26.17 at 6:25 pm
In what circumstances would you say that real estate is a viable investment?…….. Being a landlord does come with issues (calls, repairs, etc), but it must make sense as an investment at some point?
***********************
Sure it does, at some point. I’m sure there are online calculators for this, but here’s a quickie
$1,000,000 purchase
$2,000 rental income
In 40 years your renters will have paid you back that $1m
How much will you lose in
-mortgage interest
-repairs
-vacant months
-taxes etc
vs how much you gain in
+appreciation of the property

Then take all those minus numbers and pretend you put them in a balanced portfolio at 7%, or whatever you feel is reasonable over 40 years.

#42 Hugh Jassel on 11.26.17 at 7:30 pm

Personal debt to a countrys debt is an irrelevant measure.

Do you have stats of personal debt vs personal assets OR personal debt vs personal income?

#43 Rexx Rock on 11.26.17 at 7:31 pm

Hey Dan T where do you live?Sounds like a great place.Yeah GTA,YVR and Victoria are insane house and condo prices.People who bought many years ago are laughing and will have great retirement.Look at Mexico,Thailand and Central America.Valencia Spain looks good!Its a real grind for many here in Victoria if your renting and make under $45,000 a year.When people lose everything and have nothing left to lose they lose it.

#44 islander on 11.26.17 at 7:31 pm

Finally!!!

“Now, the City of Vancouver wants to collaborate with the provincial and federal governments to explore the viability of “restricting property ownership by non-permanent residents.”

http://vancouversun.com/news/local-news/sea-change-vancouver-considers-restricting-property-ownership-by-non-permanent-residents

“That line appears in Vancouver’s 10-year housing strategy released Thursday, a comprehensive plan seeking to address all elements of the city’s housing crisis.”

“This does mark a bit of a sea change,” said Yan, now the director of Simon Fraser University’s City Program. “From the accusations that observers and critics are racists, to the realization that Vancouver does indeed sit in this global marketplace for residential real estate, through which local incomes can’t compete.”

Dan Garrison, Vancouver’s assistant director of housing policy, said Friday: “Our thinking on that has evolved in the last number of years … Whether it’s foreign ownership or investment from other sources, certainly that piece around investment driving housing costs is something that’s really ramped up in the public mind in the last couple of years.”

#45 SoggyShorts on 11.26.17 at 7:31 pm

#19 Underemployed Male in Toronto on 11.26.17 at 6:15 pm

Get the F out of TO. You might not have the most employable degree, but you should qualify for more than minimum wage.
https://ca.indeed.com/Social-Worker-jobs-in-Alberta

#46 crowdedelevatorfartz on 11.26.17 at 7:35 pm

Went to the Mall today to buy hiking “shoes” for the winter.

Christmas decorations, “Jingle Bells” music, the works….
The biggest lineup in an otherwise empty Mall?
Free Santa photos for the kiddies.
I decided to do a Floppie investigation “walkabout”.
The parking lot was easy to find parking.
The Food Court was empty.
Retail Stores empty.
Bored staff standing at the doors.

Not good.

Went to the store that advertised on-line as the Sorel “Hiking Boots” distributor.

Nothing.

“Oh, we dont keep those in the store. You have to order them online and pick them up here….”

Nowhere on their website does it say that…….

The unbelievably arrogant stupidity.

“No. I want them now and if I have to wait…..I’ll order them online from Amazon and have them delivered to my house…..”

Another “bricks and mortar” store loses a desperately needed sale……..

#47 acdel on 11.26.17 at 7:38 pm

#18 broader mind

I never like to undermine or ridicule people’s comments; Garth has given us the opportunity to express our opinions within guidelines too the fullest!

This posters comment is all that is wrong in this country, Canadian’s can be so smug and pretentious, unfortunately or fortunately we will learn a very valuable lesson in the near future; hopefully sooner than latter to knock some sense into us. I am disgusted by the chart Garth posted, we suck big time, we need to smarten up righteous ones!

#48 Rental property math on 11.26.17 at 7:39 pm

Taking the no balls approach: rent and invest in a balanced portfolio. you might as well add in your advice that you should drive a Ford Taurus and give up on your dreams.

#49 crowdedelevatorfartz on 11.26.17 at 7:47 pm

@#44 Islander
“Dan Garrison, Vancouver’s assistant director of housing policy, said Friday: “Our thinking on that has evolved in the last number of years … Whether it’s foreign ownership or investment from other sources, certainly that piece around investment driving housing costs is something that’s really ramped up in the public mind in the last couple of years.”

++++++

Too little too late.

Gee I’m sure that the Mayor Gregor the Dim’s tanking poll ratings and the fact that he has an election in less than 11 months had NOTHING to do with focusing their attention on an issue that has been staring them in the face for years…….?
Or is it just sour grapes on Gregor’s part now that his Chinese GF dumped him to devote all her time to her millionaire mother rotting in a jail cell back in China awaiting a massive corruption trial……

A cynical elevator flatulator might consider this nothing more than political populist pandering for votes……

#50 SimplyPut7 on 11.26.17 at 7:49 pm

#15 Happy Housing Crash Everyone! on 11.26.17 at 5:58 pm

The median family income according to Realtor.ca is $160,076.

After B-20:
Income: $160,076
Bank Rate: 4.89%
25 Amortization
20% downpayment based on listing price, $345,000 (0.20 x $1,725,000)

Bank could only give a mortgage of $685,240 (ratehub.ca)

Even if it was just a lateral move, and a family in the area with a similar house wanted to move into that house, I don’t know if any lender after B-20 feels confident enough to appraise a house for $1.725 million when the median family in the area would not qualify to buy the home.

I did see a lot of for sale signs this weekend, none of the houses I saw had a sold sign on the lawn.

#51 crowdedelevatorfartz on 11.26.17 at 7:53 pm

@#40 Ace

By Code.
Fire Alarms in High Rise buildings MUST be tested annually by ringing them.
The municipal authorities may require, quarterly or MONTHLY tests.
And , yes. The fire alarm is also at the mercy of every idiot in a condo building that burns toast, popcorn or bacon…..
Most people ignore them.
Its only a matter of time before Canada has it’s “Grendfel” disaster

#52 Linda on 11.26.17 at 7:55 pm

Garth, excellent advice. However, given that so many Canadians have more debt than income, not sure just how they will be able to follow it. I’m presuming that most would rather die in debt than sell the McMansion. I’m also presuming most of the debt is due to ‘owning’ the McMansion. If these folks are mired in debt & do not have a house/condo/cardboard box to live in, oh my.

#53 yorkville renter on 11.26.17 at 7:56 pm

#37 – 4 elevators for 49 floors? yikes.

3 elevators where I live… 13 floors. I never have to wait more than a minute… All these giant condos are sorely lacking in elevator capacity.

My friend has a tenant at Yonge/Gerrard – 70+ storeys – and his tenant said it can take 20 minutes to wait for an elevator during rush hour.

#54 MM on 11.26.17 at 8:12 pm

“Czechoslovakia” ? Not again !!! it was once one economy now there are two Czech Republic and Slovakia chart and data sketchy the guy has no idea of economics but Canada sure looks bad there, just my opinion.

Canada … and I stop there otherwise I start comparing things here to Eastern Europe again and it’s bad … for Canada.

I’m flying back to Europe in one week, to bad Canada! I’m not going for good, we have really good incomes and a good life here :) , but I don’t trust it anymore, so my money is bleeding out of this economy going back home with me, not literally, so don’t follow me to the airport I don’t even have pjs with me, my mom reassured me I still have some back home :). It brakes my hart, trust is lost with all this house craziness and infrastructure in GTA (another hot topic nobody talks about) – both leading to “zombies” that lost all the lust for life, minimum 1 hr commute to pay a for a high mortgage (fun fun fun). Most are not able to go on vacation enjoy their free time. Everyone envies me for not having debt and being 15 minutes away from work and at the same time pities me for renting and “loosing money”, what about A LIFE !? … Canada please wake up!

Just for fun and really interesting: Croatia that small Eastern European country, WAS part of Yugoslavia (don’t put Yugoslavia on the chart) developed a “Tesla alternative”:

https://www.youtube.com/watch?v=YsB-AK7qqP0

#55 tbone on 11.26.17 at 8:14 pm

# 40 Ace
Wait til weed is legal and that smell wafts throughout the
building. That should be fun when everything reeks of weed . They are going to have to increase the hall pressurization big time to try to control that stink .
I wouldn’t want to put up with that.

#56 Geez on 11.26.17 at 8:15 pm

Dan t , that rant reeked of regret

Let it go . It’s just money

#57 toronto1 on 11.26.17 at 8:16 pm

Garth and #26 Dolce

you are both correct but it is too late by now- i agree though, to those that may need to sell, or are caught with spec condo’s houses etc.. better to sell now at what appears to be a discount then wait- once the fear sets in, it will be a hard and fast drop.

Im already seeing some desperation in North GTA, scared Vaughan/Richmond Hill and Aurora, pretty competitive prices drops and a lot of homes being relisted for the third time with 100k plus lower prices drops and still nothing.

the minor demand that B20 will pull forward will make the spring market very weak, all this as inventory grows and sellers that must sell will be undercutting others….

get now if you must, if your in the market to buy wait at a very minimum 12 months. we are going back to 2010-2013 prices at best case scenario.

in my opinion, the next 12-24 months will present buying opportunities last seen in the fall of 2008.

#58 45north on 11.26.17 at 8:16 pm

Lee: Story in Zero Hedge today suggests Bitcoin will put banks out of business.

Danielle DiMartino Booth: at the 19:00 minute mark: talking about block chain technology: “it scares me that central bankers are studying it very closely to figure out precisely how it works. So that when the time comes, they can march right in and do an outright monetization of the debt. They’re going to be controlling our spending using the block chain technology.”

http://www.howestreet.com/2017/11/22/bubbles-capital-risk-and-the-panic-building/

banks are the central characters. They’re not going out of business.

Dolce Vita: talking about 2018: we will end up with the largest asset devaluation in Canadian history (RE) within the year, and, the rest is predictable after that.

easy to say “the rest is predictable” – what’s going to happen to Woodbridge ( in Toronto )? to Riverside South ( in Ottawa )? It’s not easy to predict. Everyplace has a lot of debt. The actions of government are yuge! The Federal Government seems committed to building community housing which will disrupt established neighbourhoods. In Ottawa, the Salvation Army will relocate its homeless shelter to Vanier:

http://ottawacitizen.com/news/local-news/last-ditch-lobbying-ahead-of-salvation-army-vote

#59 TalkingPie on 11.26.17 at 8:20 pm

#19 Underemployed Male in Toronto on 11.26.17 at 6:15 pm

As a 31-year-old “screwed millennial”, after my last contract with the City of Toronto, I barely can find a job which pays me over $12.50/hr in Toronto & I have a Master’s degree in Social Work (York University), class of 2011…I wonder if I’m because a male that I don’t get hired full time in government jobs in the social services sector.

It’s not because you’re male. Males are still making money. Hell, I’m a 34 year-old male in a female-dominated profession that doesn’t require a degree and I’m making money… well, not enough to really brag about it, but enough that the girlfriend and I can live in a nice (small) apartment and 40% of my take-home income gets invested. And we spent 12 days travelling around in Spain earlier this month. Weekend in San Francisco two months ago. Miami earlier in the year. Took the girlfriend on a weekend B&B trip along the St Lawrence in my old convertible over the summer. You get the idea; we’re frugal, but don’t live under a bare light bulb playing solitaire. I’m also finishing up a Management degree that I’ve been working on part-time for the past six years. Living in a place with cheap tuition is nice.

I hate to say it, but I’ve never known anyone in social work who wasn’t poorly employed and a little bit screwed up. If you’re looking for success, maybe look outside of that profession. And yeah, unless you’re in a profession that makes considerably more money in Toronto than elsewhere, it’s not necessarily the best place to live. My sister-in-law and brother probably have a household income in the $300k+ area, at which point buying the million dollar house in Oakville in order to have access to that job market makes sense. If you’re making <$100k, you likely can find a lower-cost city. I still think that Montreal is underrated by most of the country (often it's because people believe that learning a second language is the worst thing in the world), but for all I care it can stay that way.

Complaining doesn't get you anywhere. Thinking creatively and working hard to solve your problems does.

#60 X on 11.26.17 at 8:36 pm

Reading the posts the other day, it seems like the average joe feels like they have to illegally avoid taxes to get ahead in life. It shouldn’t be like this. Even with reasonable taxation, the average person who gets an above average job, or even an average job but works an above average amount of hours, should slowly be able to get ahead in life. When people have to pay too much in taxes, eventually it will catch up with the political career of those who imposed the taxes.

Also…to all of the negative people the other day, who showed a lack of understanding for those higher earners. Keep in mind, those individuals more than likely will not be able to claim OAS, so some of the lower earners, or those who have not saved as much, should appreciate that there aren’t more to suck off of those funds.

#61 The Cat is out of the bag on 11.26.17 at 8:40 pm

#15 Happy Housing Crash Everyone! on 11.26.17 at 5:58 pm
SHYSTER SAM

Who are you SHYSTERS trying to fool? Nothing is selling and this after many price drops. Look at this place which sold in five days in March in a bidding war for $2,118,000. The lucky buyers wanted out in late July. House went on market for $1.95 million. Open house after open house. Price drop after price drop and still sitting. This is it. http://www.realtor.ca/Residential/Single-Family/18661715/132-LAURELCREST-AVE-Toronto-Ontario-M3H2B3-Clanton-Park

This is a good area where houses used to sell in a day. Now nothing. No bidding wars. You dirty SHYSTERS are
horrible scum of the earth liars. Housing is finished and will fall for YEARS


let me guess, you’re in love with Christina El Mussa,
she ignores you, so you type at us

#62 Freebird on 11.26.17 at 8:48 pm

On behalf of some friends (Boomers- Mills) who we’ve sent to this blog (helped turn one single mom off buying a condo) who ask when you only have only a small amount to invest and or want/ need to keep it simple with 2-3 funds better to stay with one good sort term bond fund (VSB, ZCS etc) or a just a diverse one (VAB, ZAG etc)?

Second, are the orange guys better then nothing for those starting out, less then 50k, limited knowledge let’s say then [email protected]? It seems too many we know are doing this. Even a temp switch to fruit bank until ready for DIY etfs and or advisor fee? Too many don’t even know what they’re easy monthly mutual fund pyt is invested in or what the fees are…well until they read this blog.

Thx

#63 mathman on 11.26.17 at 8:50 pm

Numbers mean nothing to most people, ergo – the fact that the car is 2x someones annual income is irrelevant, as long as they can make the payments. Same applies to housing, the amazing FaceBook vacation that was courtesy of VISA etc. etc.

Once rates move north, and the sticker price starts to matter in terms of the impact on payments, then Houston we will have a problem.

There has been zero consequence for blowing your brains out on consumer credit for 8 years – so much so it has become the norm. My investment account will always severley lack in sex appeal to the fancy German car and the granite countertops of those many fools among us who don’t actually have a pot to piss in.

When the tide goes out, the Mathman will be laughing.

Math

#64 Kurt on 11.26.17 at 8:54 pm

“Well, taxes are about to rise more in Canada because governments cannot live within their means, either. ”

NO, Garth. Just NO.

We live in a functioning democracy. *Canadians* cannot live within their means, and the government reflects that. Stop blaming “the government”! It’s your neighbours who keep voting for more services at lower efficiencies who are responsible for this. Which services are *you* willing to give up? Will you back *any* government that has the spine to make, say, a police union back down? Until a solid majority of Canadians can answer these questions, the problem will get worse.

#65 crowdedelevatorfartz on 11.26.17 at 8:54 pm

@#53 Yorkville renter
“4 elevators for 49 floors? yikes.”

++++++

Years ago I was involved in the planning stages of a new office tower in Dwntwn Vancouver.
One of the arguements was for 4 elevators or 3 …in a 15 storey building with , at the time, rather large floor plates.
I argued for the 4 elevator option due to my experiences with breakdowns, furniture deliveries, construction/renos etc.
I was overruled .The decision was made for 3 elevators due to the reduced maintenance costs ( $250k to install each elevator, $25k for maintenance per each per year).
Anywho.
2 years later.
Grand opening day. City officials, The President of our company, all the lickspittles were there.
One elevator out of the 3 was broken down. The other was “locked off” for Movers.
The third elevator had a smashed mirror due to a bicycle courier venting his frustrations at the agonizing slowness of a 350,000sq ft bldg with 1 working elevator.
Great grand opening.

40 story high rise condo towers in Vancouver are commonly being built with 2 elevators.
Avoid the 1st of the month.
Its Hell.

#66 akashic record on 11.26.17 at 8:55 pm

banks are the central characters. They’re not going out of business.

They may be replaced though.

Are you aware that Immigration Canada is heavily relying on the American Facebook, popular chat application transcript, etc. to verify the identity and intentions of foreign citizens for immigration application approval?

I bet not long ago you would have thought it was the job for “central charter” of the fundamental core of the Canadian government for the security of the state.

Globalism have strange unintended consequences.

#67 espressobob on 11.26.17 at 8:56 pm

#38 technical analysis

Actually technicals are used by pros as a tool. Not perfect by any means but used in conjunction with fundamentals can provide some insight to what’s going on in real time.

Day traders a decade ago got slaughtered slowly and suffered an agonizing financial death. Experience trains hard.

Why follow that path?

#68 akashic record on 11.26.17 at 9:06 pm

Stop blaming “the government”! It’s your neighbours who keep voting for more services at lower efficiencies who are responsible for this. Which services are *you* willing to give up? Will you back *any* government that has the spine to make, say, a police union back down? Until a solid majority of Canadians can answer these questions, the problem will get worse.

I can’t remember getting the list sent to all eligible citizens, counted the responses and acted upon accordingly.

Maybe because governments know that people would send it back and politicians prefer to act on the collective interest they assume, instead of executing the actual will of the public by running transparent online referendums.

#69 Bottoms_Up on 11.26.17 at 9:10 pm

#19 Underemployed Male in Toronto on 11.26.17 at 6:15 pm
—————
Be willing to relocate. Look for jobs in smaller towns. Heck, move to Hamilton, you can rent a 2-bedroom apartment downtown for $800. Find a university student to rent the 2nd bedroom and split bills. You’ve just increased your monthly cash flow by at least $500.

#70 Bankish on 11.26.17 at 9:13 pm

What is your opinion on doing a rif meltdown. I’ve got way too much money in my rrsp and my advisor says to take a $300,000 line of credit and buy the same stock I have inside my rrsp(putting some in a rif) outside of a registered account and interest will be tax deductible. My main concern is leaving it to my heirs. Over two thirds of my net worth is in stocks. Age 64 and retired. Another opinion would be appreciated.

#71 Bottoms_Up on 11.26.17 at 9:16 pm

#63 mathman on 11.26.17 at 8:50 pm
———————
Minimum wage will soon be 29k per year (ontario). Many decent cars can be had at that price.

#72 marc on 11.26.17 at 9:18 pm

Does Winnipeg fall under the “If you’re twenty-five, wait to buy property unless you dwell in Halifax or Regina (and invest in fuzzy underwear)” category as well?

Battery underwear required. — Garth

#73 TalkingPie on 11.26.17 at 9:18 pm

#62 Freebird on 11.26.17 at 8:48 pm

———————————————

For mills and other people just starting out, I found Garth’s millennial retiree clients to be very informative, even if I don’t agree with all of their core beliefs. You can check out their (annoyingly-named) site at millennial-revolution.com, which includes an Investment Workshop series, wherein they invest their own money into a model passive portfolio in order to show how noobs can handle their investments, step-by-step, month to month.

My girlfriend has some of her money in Tangerine funds, and they don’t seem terrible by [email protected] standards. I opened a Questrade account and follow one of the Canadian Couch Potatoes model portfolios, and that’s treated me pretty well in the six months or so that I’ve been doing it. I’m sure I’ll be torn to shreds for that, but my returns are an order of magnitude or two better than when I was mindlessly shoveling my money into whatever the bank suggested to me. This should tide me over until I get to well over $100k.

#74 technical analysis? on 11.26.17 at 9:36 pm

#67 espressobob on 11.26.17 at 8:56 pm

i survived 2008. i survived dot com bubble. been trading since early 90’s and still here. technical trading isn’t understood by most. that’s the problem. there are many paths to trading and investing successfully. i’m not a day trader. try not to put words in my mouth.

#75 mathman on 11.26.17 at 9:37 pm

RE 71 – Sad state of affairs – while working full time and putting myself through undergrad I was making $16 an hour (15 yrs ago). Or a cool 32k a year!

Now it’s a given. Sad.

Car loans may be the canary in the coal mine. Last car i bought (used) from a major dealer – no income verification, nothing – simply verbally asked me what I made and for my consent to do a credit check. So lending purely on credit score and nothing to do with the capacity to repay.

Folks have been milking the HELOC’s to buy stuff, toys, useless things for the better part of a decade. When the ability to refinance dries up, so will the economy and we Canadians will be exposed as the dumbest people in the world.

Who is the idiot

The guy worth $10 Mil who has a Lambo, or the guy worth $0 who makes 75k/year and drives a $75 car?

#76 Capt. Serious on 11.26.17 at 9:50 pm

#74 technical analysis? on 11.26.17 at 9:36 pm

Well, you only have to blow up once to fail miserably. Lots of smart people find that out the hard way. Long tails and all that.

#77 odious herodias on 11.26.17 at 9:55 pm

At what point does a guy in his 50s stop investing in an RSP? Balance of $500k, $750k?

Sinec the $ coming out in retirement will be considered income, the owner will be subject OAS clawback etc… https://retirehappy.ca/minimizing-old-age-security-clawback/.

Is there guidance on the magic number by age band?

#78 Shampoison on 11.26.17 at 10:10 pm

“For some years now I have maintained a fairly consistent bullish view of the equity markets .. This view has served our clients well with our portfolios delivering solid returns for investors. And I continue to have a favourable view of the global equity markets given improving economic momentum…..That said, my bullish view is not set in stone and will change as these tailwinds turn to headwinds. As the influential economist John Maynard Keynes once quipped, “when the facts change, I change my mind.” Ryan L

Garth,

3 observations:

1. You are head and shoulders above the help
2. Anyone can look like a genius in a bull market
3. This may be the closest we ever see a Financial advisor, stockbroker, etc coming to calling for a correction. Churning commissions are always higher when calling for a bull market, as in a bear, the great unwashed tend to hold rather than sell.

Point of clarification: my business and my colleagues do not generate or collect commissions. — Garth

#79 yorkville renter on 11.26.17 at 10:20 pm

#48 – you think investing takes no balls only becauae you choose to invest another way, and obviously you have balls… ofcourse, you’re also a child, so let’s call you “baby balls”.

As far as fire alarms in condos, the building alarm only goes off when the hallway alarm does… keep your door closed if your alarm goes off and no one will kniw except your neighbors.

Also, dont pick a building where idiot 20 year olds are the majority

#80 Shampoison on 11.26.17 at 10:23 pm

#27 Dan.t on 11.26.17 at 6:41 pm

What about quality of life, friends, cheap rent, nights out with friends, getting hammered for 60 Euros downtown, fun meals, hoping on street car that runs every 20 mins until 3 am, go home buzzed with no stress, eating out bla bla…right, stupid, only house matters.
….
Anyhow, I m done now… gonna drink a 29 cent half litter beer…sorry 55 cent CAD half litter beer. (I went discount beer tonight).”

Get with the times bro’….you will know you have made it when you are sipping happy hour pints and paying with bitcoin or some other exotic crypto…..

#81 Czechia on 11.26.17 at 10:29 pm

Re Czechoslovakia…

Europeans love to snub North Americans when it comes to the history/geography knowledge… so I will enjoy myself as well ;-)

It is actually not called Czech Republic either anymore, but it goes for a lovingly short Czechia:

http://nationalpost.com/news/world/dont-call-it-czech-republic-anymore-introducing-the-renamed-czechia

Oh, and please do not confuse it with Chechnya, that is quite a different country further East :-):

http://mashable.com/2016/04/15/czech-republic-czechia-chechnya/#AHJfmtFDTiqa

Isn’t a little lesson in geography a great detente after that charged formula from yesterday?!

#82 Loonie Doctor on 11.26.17 at 10:45 pm

#72 marc

Does Winnipeg fall under the “If you’re twenty-five, wait to buy property unless you dwell in Halifax or Regina (and invest in fuzzy underwear)” category as well?

Battery underwear required. — Garth
—————————————————————

The key to that advice is that they are twenty-five. For those requiring thirsty underwear, there is a risk of severe electrical shock to the nether-regions. Then again, that might be considered some good action.

LD

#83 beerinthegulag on 11.26.17 at 10:47 pm

#35 Dolce Vita on 11.26.17 at 7:06 pm

http://budgettraveller.org/cheapest-beer-in-europe-check-my-europe-cheap-beer-index/

Whoopie, to drink cheap beer, we have to go to Eastern Europe and risk ending up in one of those torture chambers seen in the horror movie, Hostel….no thanks!

#84 Cottingham a bargain on 11.26.17 at 10:47 pm

The meme of this blog that RE prices are too high is simply not getting out to the masses. You simply need to tune into CP 24 hot property for example and listen to the various callers from Brampton, MIssissauga, barrie etc. asking whether or not the 500 square foot condo they bought for 377 in a former farmers field last year is a “ good investment” . What they are really looking for is affirmation of their firmly held belief that RE is always a good investment .

My point you ask? As long as this belief structure ( religion)that RE enjoys among the masses continues , prices will continue to rise . The trend is your friend .

#85 Spike on 11.26.17 at 11:17 pm

Why joint non-reg? Why not just in spouse with lowest income only??

#86 TurnerNation on 11.26.17 at 11:24 pm

#5 SimplyPut7 I was in a new downtown swishy Toronto condo last week. 2 elevators for top half, 2 for bottom half. Well the two elevators for top half at once broke down!
This means taking lower elevators up then walking up , to 20 stories above. And extra long wait times.

Condos are modern day minimum security prisons.

Kids get an elevator repair trade and never be out of work (unions have the stranglehold here).
Or get a BA and work in SBUX.

#87 Gravy Train on 11.26.17 at 11:35 pm

#19 Underemployed Male in Toronto on 11.26.17 at 6:15 pm

How do you search for jobs? Do you use a resume? Do you use mass mailings or email blasts? Do you reply to newspaper or online ads? Do you use private employment agencies? You may be surprised to know that the above methods are among the worst for finding jobs or changing careers!
http://www.jobhuntersbible.com/jobs

I strongly recommend that you read Dick Bolles’s book What Color is Your Parachute? from cover to cover! This recommendation may be the best single piece of advice you will ever get in your life! And I don’t think that’s an exaggeration. There are likely 30 to 40 copies of the book at your local library! Go read it! Now!

#88 Gentle ,Loving Kindness on 11.26.17 at 11:41 pm

When I look at the debt charts Garth provides, it means the majority of Canadians believe they will have un- interrupted employment over the next decades to pay/ service for their debts. Many of these people may have good reasons to believe this will be so, particularly if they are a professional like a doctor, a lawyer, an engineer or an accountant. This is probably a small percentage of the total employment categories, and the bulk may be teachers, bus drivers, taxi drivers, machinists etc. I don’t think most people have any idea of the magnitude of change that is coming to “employment” in the next 5 to 10 years. Automation and Artificial Intelligence will eat most the employment categories, including the “professionals”. The only way to stay “safe” is to practice diversification and to always stay cash flow positive. I think this time, “It will be different”.
https://www.youtube.com/watch?v=7Pq-S557XQU

#89 presley1000 on 11.27.17 at 12:03 am

Garth,

Been peripherally monitoring your blog and housing, while focused on weed stocks for the last 2-3 years as a retail investor. Incredible gains so far, but signs of eventual armageddon are cropping up. Everyone and their mother is now buying and discussing weed. Lunch money and mortgage money bets. People that have never heard of a market cap or outstanding share count. Kindergarten comments and questions on message boards. Forget crypto, weed stocks are what they are buying.

A post on reddit… “I was at a friend’s place tonight and his girlfriend just bought some weedstocks. *** and ***. I asked why those ones, her answer was Google. I said if she wanted another big player look into ***. She Googled that and said “wow the share price is even higher than *** – looks like it is already overvalued!”
She mentioned ***, so I mentioned ***. She looked it up. “Whoa!!! So cheap!!! Pennies!!!””

Saying that, I have to believe that these new euphoric buyers in the weed/crypto world care little about putting their money into houses or ‘balanced portfolios’ as an investment. Those games are passe. Nobody discusses houses at the workplace anymore.

So… housing market is done, stock analyst suicides are going to go up, and the mj casino will be insane for the next few months.

If I survive with a few bucks… I’m calling you to talk some sense into me. :)

#90 Lost...but not leased on 11.27.17 at 12:20 am

#34 Andrew Woburn

Re: Student loans

Millenials should be screaming blue bloody murder about this scam. Back in the day student was literally unheard of…certainly not to the scale we see now.

Probably part social engineering meets corporatism gone wild. Universities have become mini -fiefdoms( with the blessing of Gov’ts?)whose goals are no longer the neutral yet altruistic “search for truth” etc, but have morphed into entities to maximize fund generation.

However, the playing field may be levelled via on-line learning..sort of a Sears -like demise for bricks and mortar Universities???

#91 Happy Housing Crash Everyone! on 11.27.17 at 12:33 am

#84 Cottingham a bargain

First of all CP24 call screens. Anyone with negative questions or comments wil not be put on. If you want to go on and make a negative comment or question you will have to tell the call screener a positive/bullish question. Your thought process makes no sense. Cheap credit is only reason for high housing. Cheap credit is going away and so are high prices. Keep telling yourself whatever makes you happy.

#92 april on 11.27.17 at 12:41 am

#84 – I think your right. This type of information is not reaching the masses. The RE industry makes sure of that. What a corrupt lot!

#93 Lost...but not leased on 11.27.17 at 12:44 am

#40 Ace Goodheart

Condo living can be hell.

A relative lives in a 30 year old complex.Granted..it appears to be reasonably well run, but regardless each strata owner can be at the mercy of the given council.

Their strata has this long fountain in the central courtyard. Over a year ago,they decided to repaint the fountains base and walls. They are now on their 4th attempt..as the new paint has failed to adhere.( I suggested they simply line the fountain area with natural round river rock)

Our relative has lived there for 10 years…they have had the leaky condo fix…the internal plumbing retrofitted, etc etc.Their common area had vinyl flooring….but changed ….I didn’t see any signs of need to replace.

Condo living is not for the weak of heart nor fiscally challenged.

#94 Lost...but not leased on 11.27.17 at 12:56 am

#10 for those about to flop

If you get a chance, can you research Richmond’s West Cambie area?(ie bounded by Cambie/Garden City/#4RD and Alderbridge.)

HISTORY: City of Richmond had planned higher density in the 1990’s, but the new runway created a legal mess as parties were suing for the aircraft noise now being directed in their areas….hence the City plans were put on hold.

What has happened was higher density was permitted(likely due to developer lobbying) but subject to purchasers having to sign a waiver form absolving the City and YVR of any liability re: NOISE.

My point?= when the SHTF, and a bear (buyer) market kicks in, suckers that bought in West Cambie will have a much tougher time selling given what I have just outlined.

If you have any West Cambie data it would be intriguing to view.

#95 Henry on 11.27.17 at 1:17 am

Czechoslovakia? Huh?

#96 jane24 on 11.27.17 at 1:52 am

I am in both France and Italy regularly and people don’t flip houses there. They either rent the same space for life, inherit a spare family house or buy their forever house right after the wedding. Your home is your home for life. Of course land transfer taxes of up to 10% my be a factor too! Different cultural mindset.

On the Italian beer costing discussion, I live right in the south of Italy in Basilicata. A bottle of beer used to be one euro but now is commonly 1.2 euros but you do get olives and snacks for free with that!! Avoid the north, prices are more like Canada.

#97 Howard on 11.27.17 at 4:57 am

#81 Czechia on 11.26.17 at 10:29 pm

Re Czechoslovakia…

Europeans love to snub North Americans when it comes to the history/geography knowledge… so I will enjoy myself as well ;-)

It is actually not called Czech Republic either anymore, but it goes for a lovingly short Czechia:

http://nationalpost.com/news/world/dont-call-it-czech-republic-anymore-introducing-the-renamed-czechia

Oh, and please do not confuse it with Chechnya, that is quite a different country further East :-):

http://mashable.com/2016/04/15/czech-republic-czechia-chechnya/#AHJfmtFDTiqa

Isn’t a little lesson in geography a great detente after that charged formula from yesterday?!

——————————————

Chechnya is not a country.

#98 Howard on 11.27.17 at 5:11 am

#60 X on 11.26.17 at 8:36 pm

————————————-

I don’t recall anymore proposing illegal activity so as not to pay tax.

Some terminology:
– Tax avoidance is completely legal and well advised in the current environment
– Tax evasion is illegal

You’re not alone in not knowing the difference. Witness PM excrement-for-brains.

#99 under the radar on 11.27.17 at 5:37 am

22 devils advocate
Of course investment real estate makes sense and should have a place in a portfolio. There are various metrics to analyze real estate and returns. If you can buy a property that produces positive cash flow and come away debt free in 15 or 20 years , you have yourself an annuity.
Takes work and time and not everyone has the time or is willing to do the work.
Apart from being debt free, how you structure your investments to produce income will define your lifestyle. I do agree that those who borrow to the limit to buy a 500 sq ft condo in Brampton are toast, but this is not investment real estate in my book. This is the herd who will soon be culled.

#100 NoName on 11.27.17 at 6:09 am

#85 TurnerNation on 11.26.17 at 11:24 pm

Condos are modern day minimum security prisons.

That is so true, while back when I was in high school, in 10h grade there was a mandatory course called “odbrana I zastita” – defence and protection, basically deals and covers with from injuries and dangers on camp site to the post apocalyptic world…

Anyways to get point here my teacher was retired kapetan of corvette boat. It was a time just before everything started falling apart, I remember him saying, kids did you ever wonder why is only one entrance/exit from building and all of them are facing same way…
Then he followed his questions with an explanation. Next time you visit ex-kommi country hits nebouurhoods built 60s to mid 80 you’ll see.

No word of the lie here.
Here is serbian version of course book for sale.

https://www.kupindo.com/Srednja-skola/24367329_Odbrana-i-zastita-udzbenik-za-srednje-skole#predmet-carousel

#101 Howard on 11.27.17 at 6:26 am

MORE free money to “low-income” parents, proposed by Brown’s Ontario PCs? When will it end?

https://www.thestar.com/news/canada/2017/11/25/low-income-families-will-receive-75-per-cent-refund-on-child-care-costs-tory-platform-says.html

At what point do we say that parents have to take some financial responsibility for their decision to have children?

Brown’s entire platform seems like it could have been written by current Premier Orville Redenbacher.

#102 dr. talc on 11.27.17 at 6:41 am

#97 Howard on 11.27.17 at 5:11 am
#60 X on 11.26.17 at 8:36 pm

————————————-

I don’t recall anymore proposing illegal activity so as not to pay tax.

Some terminology:
– Tax avoidance is completely legal and well advised in the current environment
– Tax evasion is illegal

You’re not alone in not knowing the difference. Witness PM excrement-for-brains.


the cra site keeps changing
a few months ago page 1 had a big globe
headline-‘fighting tax evasion and avoidance globally’
translation- words have no meaning

#103 BillyBob on 11.27.17 at 6:45 am

#96 Howard on 11.27.17 at 4:57 am
#81 Czechia on 11.26.17 at 10:29 pm

Re Czechoslovakia…

Europeans love to snub North Americans when it comes to the history/geography knowledge… so I will enjoy myself as well ;-)

It is actually not called Czech Republic either anymore, but it goes for a lovingly short Czechia:

http://nationalpost.com/news/world/dont-call-it-czech-republic-anymore-introducing-the-renamed-czechia

Oh, and please do not confuse it with Chechnya, that is quite a different country further East :-):

http://mashable.com/2016/04/15/czech-republic-czechia-chechnya/#AHJfmtFDTiqa

Isn’t a little lesson in geography a great detente after that charged formula from yesterday?!

——————————————

Chechnya is not a country.

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

Correct. Also, most Czechs absolutely cringe at having their country called Czechia. That name is relatively recent and made-up by politicians. And like similar names, only people not actually from there would call it that. If you really want to sound like a rube tourist, just try telling a Czech that the Czech Republic is named “Czechia”. But hey it’s easier for ignorant foreigners, I guess.

But it is an embarrassment that an organization such as the OECD seems unaware that there is no country called Czechoslovakia.

Might as well put Rhodesia and the U.S.S.R. on the list as well.

#104 SimplyPut7 on 11.27.17 at 6:57 am

#40 Ace Goodheart on 11.26.17 at 7:29 pm

Unfortunately, some of the condo buildings in Toronto have to treat people like children because that is the way they act.

A coworker I know was renting in a building in downtown Toronto and said he would get emails from condo management telling people to stop throwing eggs at pedestrians on the streets below or one time he got an email about a kitten in a box being thrown out in the garbage.

You can look for buildings that only allows older adults but they start at 50+ and can feel more like a nursing home than retirement lifestyle community. Best bet would be to get an older condo with higher maintenance fees ($600+ a month), no or very few amenities and strict rules, that would scare off the weirdos and immature.

It’s hard for owners and investors to know what they really bought until everyone moves in and they get a good look at the finished units and shared spaces. My coworker said he could hear the microwave being used in the unit adjacent to his even though the walls are made of concrete.

The condo was completed in 2015. If it takes 5-7 years, in Ontario, from the purchase of the property to completion of the house/condo, the planning for this condo would have started around 2010. The city has built a lot more units since then and that doesn’t include the peak pre-sale madness of 2016 and early 2017. The condo problems in Toronto will only get worse.

#105 Ace Goodheart on 11.27.17 at 7:06 am

RE: #61 The Cat is out of the bag on 11.26.17 at 8:40 pm
#15 Happy Housing Crash Everyone! on 11.26.17 at 5:58 pm
SHYSTER SAM

Who are you SHYSTERS trying to fool? Nothing is selling and this after many price drops. Look at this place which sold in five days in March in a bidding war for $2,118,000. The lucky buyers wanted out in late July. House went on market for $1.95 million. Open house after open house. Price drop after price drop and still sitting. This is it. http://www.realtor.ca/Residential/Single-Family/18661715/132-LAURELCREST-AVE-Toronto-Ontario-M3H2B3-Clanton-Park

– Looks like it needs a new deck. That is like a 10K contractor bill right there.

Interesting thing is, that house is not cheap. 1.7 mil is a lot of money. Less than it sold for last year, but still a lot of money.

If the buyer actually has to have 1.7 mil, then likely it would never sell. If the buyer only has to be able to borrow 1.7 mil then there might still be a chance for it.

But it is dated inside, the carpets are pretty awful, it needs paint and updating, kitchen is old, basically anyone with a bunch of money is going to want to renovate it. So you are looking at putting 2 mil into it including purchase price and renos at least. Which means you have to be able to get two mil back out of it again.

#106 SimplyPut7 on 11.27.17 at 7:08 am

#30 -=jwk=- on 11.26.17 at 6:47 pm

I was happy to hear this podcast, so many people made it sound so easy to become a landlord or flip property.

He is the only one I have found so far that took the time to explain to everyone the risks they were taking in the condo market. Ross Kay is also great, but he focuses more on homeownership on Howestreet.com than investing in condos to become a landlord.

#107 Tbone on 11.27.17 at 7:17 am

#98 radar

Buy a house with your down payment , wait 20 years until your tenant bought you the house , sell for massive profit and use a portion of the money to purchase dividend paying stocks.
You now have a self funded pension and you own the principal.
The dividends generate more than the rent did.
I know , I was a lousy landlord , didn’t want tenant turnover to deal with,
So I kept rent low as the house price reached astronomical levels.
And now ,no more tenants , … bonus.

#108 SimplyPut7 on 11.27.17 at 7:24 am

#85 TurnerNation on 11.26.17 at 11:24 pm

I was in an elevator and got stuck in between the 10th and 11th floor of an office building in Toronto, about 6 months ago, first time ever.

It only took about 15 minutes for the elevator repair guy to arrive, but as I was crawling through the doors on the 10th floor and jumped down on to the 10th floor elevator area, I was thinking I should add elevator repair technician to my backup job lists.

These people are going to be busy for the next 10 years, I won’t have to worry about robots or automation taking over their jobs for a while.

#109 Gravy Train on 11.27.17 at 7:25 am

#2 technical analysis? on 11.26.17 at 5:24 pm
“[Y]ou really don’t understand technical analysis do you?

“[A] simple monthly moving average system would have you in the SP 500 in late 1982, and out in early 2001. [Y]ou would also have been out for the 2008 collapse, and back in late 2010 and STILL long the SP.

“[S]ome of you people seem to be confused as to what technical analysis is and how to use it.”

#7 Dee on 11.26.17 at 5:38 pm
“Post #2 tech analysis, best source/book for tech analysis?”

Dee, before you get too taken with this smooth talker, make sure you’re not taken in.

Here, read this article on how important it is to stay invested for the long term, and examine the chart at the bottom:
http://www.businessinsider.com/cost-of-missing-10-best-days-in-sp-500-2015-3

#110 Hamilton convert on 11.27.17 at 7:35 am

Re #69 ‘move to Hamilton’ although a 2 bedroom here rents closer to $1200 per month I support your vote for this fine town. Moved here after living in TO most of my life – bought a fantastic house with $10,000 down, self employed even, then bought 3 more. The prices were all under $200 000 in 2011 – big Victorian homes downtown. Experience in Queen w. Toronto taught me what areas would become desireable. Moving here allowed us to leapfrog from a couple renting a room in a shared house to a couple with 4 properties(3 duplexed rentals plus our own massive home). On our virtually nonexistent incomes, the cheap money has been very handy(no hot tubs, jetskis or other depreciating purchases), even if we had to go through brokers – the investment in bricks & mortar paid off – got rid of my car (Mr. Money Moustache style) and now building a duplex in the core that we are financing via sale of our own single family home. Will have 6 units soon, live in one, walk to farmers market, trails, waterfront & every gallery, bar or resto we will ever need. No Helocs, small mortgages, good rental income – looking at spending winters away & not working our a$$es off to support a home in TO. Think different & prosper!

#111 crowdedelevatorfartz on 11.27.17 at 8:07 am

@#61 The cat in the bag
“let me guess, you’re in love with Christina El Mussa,
she ignores you, so you type at us”
++++++

I’m pretty sure Happy Housing Crash doesnt have enough money in his bank account to keep “The Mussa” entertained.
But then again, 99% of the rest of the world probably doesnt either……..

#112 Howard on 11.27.17 at 8:18 am

#106 Tbone on 11.27.17 at 7:17 am

#98 radar

Buy a house with your down payment , wait 20 years until your tenant bought you the house , sell for massive profit and use a portion of the money to purchase dividend paying stocks.
You now have a self funded pension and you own the principal.
The dividends generate more than the rent did.
I know , I was a lousy landlord , didn’t want tenant turnover to deal with,
So I kept rent low as the house price reached astronomical levels.
And now ,no more tenants , … bonus.

—————————————-

You’ve posted this kind of tripe before. If I recall correctly, you are in your 60s, which means you won the birth-year lottery in Canada and were therefore well-positioned to do exactly as you have described and reap your massive profit from housing.

Unlikely to be the case for newbies. RE certainly wont crash or even decline much, but it probably won’t rise all that much either outside central Toronto/Vancouver. In Europe (outside the UK) real estate appreciates very slowly, even in countries with a high fertility rate and immigration like France.

#113 HaHaHa on 11.27.17 at 8:37 am

#19 Underemployed…. I feel your pain. Once again the educational system has let another down. Universities are a sham and the degrees in which they peddle are at best a joke. Minds filled up with leftist crap and safe spaces. Even us boomers were being duped in our youth also. Good luck to you but never be a victim.

#114 technical analysis? on 11.27.17 at 9:02 am

#108 Gravy Train on 11.27.17 at 7:25 am

he’s right Dee .. make sure you do your research. i’ve just give you a few books to get started. what you do with them is up to you.

#115 Tater on 11.27.17 at 9:11 am

#2 technical analysis? on 11.26.17 at 5:24 pm
” #89 Gravy Train on 11.26.17 at 3:56 pm
Just out of curiosity, when stock prices fall below your weekly moving-average crossover system, do you buy or sell? And how much? All of it? :)
(You’re not a long-term investor, are you?)”

you really don’t understand technical analysis do you?

a simple monthly moving average system would have you in the SP 500 in late 1982, and out in early 2001. you would also have been out for the 2008 collapse, and back in late 2010 and STILL long the SP.

some of you people seem to be confused as to what technical analysis is and how to use it.
—————————————————————

And what would the CAGR and Sharpe of this strategy be vs a buy and hold of the index?

#116 Brian on 11.27.17 at 9:13 am

I agree with all said about real estate as an investment strategy, but I do have a little difficultly with a concept that perhaps others share.

if house prices drop significantly and debt holders get int trouble, SURELY the stock market will be negatively impacted.

Diversification is obviously helpful, but I have trouble seeing how even with a diversified portfolio I won’t take a major hit when the debt pigs run into head winds. As a Canadian it seems obvious that a substantial part of most portfolio will be Canada based, for a variety of reasons. Diversified between market sectors, and between investment vehicles (bonds/etf’s stocks etc) is more likely I think.

I must be missing something here.

Mr. Turner, would you consider elaborating on this please?

Bottom line question I suppose is “How will the troubles that will be endured by the debt hogs affect financial investments?”

Most people I know who are “investing” in a home and nothing else do so in the belief that if the housing market tanks, the economy will tank and financial instruments will therefore tank.

#117 Dan.t on 11.27.17 at 9:22 am

#35 Dolce Vita
—————————

Sorry, should clarify I guess. I was at home- drinking the generic brand from Penny (like save-on-foods brand or something similar).

6 Pack used to be 1.50 Euro plus deposit but now costs .29 cents per beer. Crazy inflation. On and off I buy the generic brand beer…most likely Becks or some other name, with a different label- taste pretty good. Bet blind folded, most would really enjoy it.

Don’t want to turn this into a beer blog, but often I can buy 20x 0.5l beers for 9.99 Euro. Becks, Hasselroder, warhsteiner, bitburger, or dozen other brands depending on which store you are in. Or go cheap and buy lesser known brand on sale for 6-7 euro for 20x 0.5l. Found Quick link, hope it works.

http://www.supermarktcheck.de/kaufland/sortiment/bier/

Lidl, netto, penny, norma all within 100 m of where I live and all occasionally have prices on beer that would make most Canadians head spin. Sometimes, I feel like I m loosing money if I don’t buy it :-)

But in town and major cities prices have gone up the last years- like everywhere.

Depending on where you eat out here…

Döner store: 0.5l beer= 1,50 Euro

China restaurant. 0.4/0.5l = about 2-2,50 Euro

Nice Italian in the city or something similar near tourist area, 0.5l/0.4L Weizen, Pils, ect.= 3,20-4 Euro sometimes a bit more.

Anyhow, if still don’t believe me, get my email from Garth. I can send you some pics- I often take pics of crazy specials and send them via what’s app back home because even I can’t believe it:-) Wow, I must sound like a major booze bag!

#118 Dan.t on 11.27.17 at 9:32 am

#80 Shampoison on 11.26.17 at 10:23 pm
#27 Dan.t on 11.26.17 at 6:41 pm

Get with the times bro’….you will know you have made it when you are sipping happy hour pints and paying with bitcoin or some other exotic crypto…..
————————-
haha, I hope you are right. Wanna compare crypto portfolios? Busy trying to figure out how manage Bittrex new policy…only 500 buy/sell limit orders and 28 day limit. Not cool.

#119 Mattl on 11.27.17 at 9:37 am

So wait, wages haven’t improved in 50 years, cost of living has increased substantially and your advice is to invest? People don’t have money to invest. That guy making 40k with two kids, all of his money goes to rent or his mortage. This is why home ownership is so appealing to so many people, it at least give them a shot at having something when they get close to retirement. Plowing all your money into rent, and putting the extra 500 bucks a month into a balanced fund that returns 6% is not going to provide anyone security when they hit retirement.

Canadians are house horny because they are desperate. Money is cheap and RE allows a middle class guy the leverage to possibly be ahead by the time he hits 60. These folks buying homes aren’t all fools, they are making a bet that paying off a home will give them most of what they need to retire at some point. For the last 30 years this has been a safe bet. There have been corrections and crashes but those that weathered them have done ok. I suspect that run has come to an end. It won’t end well for the guy that bought my buddy’s house for 1.3mm in Maple Ridge. But I can understand the desire to own a home, it provides security to low wage earners.

#120 Bitcoin baby on 11.27.17 at 9:39 am

Bitcoin to the stars….. add in dollarama and it is all you need.

In other news. the Koch brothers buy Time.. and declare El Presidente Trump the man of the universe til the end of time.

#121 Bastiat on 11.27.17 at 9:53 am

Garth – have you heard the phrase if you can’t beat em, join em? I am thinking of dropping out of the workforce and having a ton of kids, supported by the Canadian taxpayer. I didn’t realize you could “earn” so much (and tax-free to boot) by doing nothing and just having kids.

We are a very frugal household so low monthly expenditures.

Good strategy? This Liberal government hates hard workers, so why not give them what they want?

Keep up the good work!

#122 Soma on 11.27.17 at 11:52 am

I didn’t realize you could “earn” so much (and tax-free to boot) by doing nothing and just having kids.

——–

I don’t think taxpayers in general realize this, along the long list of other government subsidy programs, both for individuals and businesses.

The people who are most familiar with them are who collect the benefits, businesses, agencies who help people to qualify, plus the advocates who are paid for lobbying the existence and expansion of these programs.

Plenty of takers to get a slice of the tax revenue into their checking account directly.

Taxpayers would revolt if all of these programs would be laid out for them to see as a full list, with actual dollars spent on them and the number of people who shared the benefits.

If would be a great post for Garth, but I doubt he has the appetite for it, for various reasons. Maybe I am wrong and he publishes it some day.

#123 IHCTD9 on 11.27.17 at 12:24 pm

#19 Underemployed Male in Toronto on 11.26.17 at 6:15 pm

…Unlike other men in Toronto who off themselves, join overseas isis groups or become criminals like drug dealers, hitmen and/or human traffickers because of the SJW job market in Toronto = male discrimination, I’m a law-abiding citizen who reads financial blogs and tries really hard to elevate my position, but I feel this time, Toronto has failed me, and I advise any male that Toronto is not the city for you unless the SJW crowd accepts you.
__________________________________________

The facts are Women dominate the public sector everywhere except cops and prison guards etc.. as there has been a couple decades of preference given. You are male, and if you are also white, you need to start thinking about getting out of the GTA if you expect to work for the government. You’ve got a tough road ahead of you though no matter where you go.

Out here in the Hinterland – it is the same story. Government institutions are packed full of Women. My wife is also a Social Worker and she has never NOT worked for the gov. We go to the “company” Christmas parties every year and it’s Women 75-80% majority no matter where she has worked.

You might try CAS as it is a low desirability SW job, but of course pays well with gold plated everything. If you fail at this in a smaller city, I suggest moving to the Yukon and becoming a trapper.

#124 Old Dog on 11.27.17 at 12:27 pm

People keep telling me what a great investment housing is. I bought my present house 22 years ago. It hasn’t quite tripled in price over that time. If I subtracted all the taxes, insurance, maintenance, and upgrades, I haven’t made much profit. Now I paid cash for the house so I didn’t even pay mortgage interest. If I did have to pay interest on it and sales commission and lawyer fees when I sold, then it would be a poor investment. My equity portfolio’s have done much better over that same time period. So be very careful in what you think is a good investment. Add up the numbers and you might be surprised. Garth is pointing you in the right direction. Follow his advice.

#125 Ace Goodheart on 11.27.17 at 12:42 pm

RE: #119 Bitcoin baby on 11.27.17 at 9:39 am

Bitcoin to the stars….. add in dollarama and it is all you need.

In other news. the Koch brothers buy Time.. and declare El Presidente Trump the man of the universe til the end of time.”

Have you had a look at what is going on with Bitfinex? I am watching this situation very closely.

Allegations against this large exchange (not proven, just allegations) being made on “twitter” include that they are creating tether out of thin air, pegging it to the US dollar and then allowing people to purchase bitcoins with it, thus driving up the price of bitcoin.

I guess technically crypto currencies are actually created out of thin air, but they have been making statements to the effect that they have a US dollar for every tether that they have created. Thus far it appears there is no actual banking statements to back this up.

There is also a rather interesting allegation, (again, fully unproven) that they are in effect running an unlicensed mutual fund that invests in bitcoin.

At any rate, they got hacked about 5 days ago and a bunch of tether went missing.

If it turns out that their finances are other than what they are saying, this could cause a rather large bitcoin value collapse. Vultures are of course circling. I would not be purchasing bitcoin right now, until this latest situation comes through the wash.

#126 High, but not highest. on 11.27.17 at 12:42 pm

Yes, private debt is high in Canada, but not the highest.

Luxembourg, Ireland, Iceland, Norway, Portugal all have higher private debt as ratio of GDP than Canada has.
Yet, are omitted from the table in fig1.

https://tradingeconomics.com/country-list/private-debt-to-gdp

When we compare ourselves to Luxembourg in order to feel better, it’s probably over. — Garth

#127 Cunkstan wherever the hell that is? on 11.27.17 at 12:47 pm

#264 Smoking Man on 11.25.17 at 3:47 pm
Got the work visa. Good by Cunkstan.
Another savage road trip to the heart of Libralism.
365 day flip flop climate. I just have to keep my mouth shut.
…………………………………………………………………
Now that would be nice.
So long Smokie don’t let the door hit your ass on the way out! I hope Donald Trump embraces you the way he embraces all the woman.
I give you a month before your back, or before they deport you.

#128 Ace Goodheart on 11.27.17 at 12:49 pm

Here is where you can start reading if the Bitfinex/Tether situation interests you (and it should, if you are invested in, or planning to invest in bitcoin):

http://www.newsbtc.com/2017/11/27/tether-shenanigans-continue-usdt-supply-increases-another-20-million/

#129 IHCTD9 on 11.27.17 at 12:53 pm

#46 crowdedelevatorfartz on 11.26.17 at 7:35 pm

Went to the Mall today to buy hiking “shoes” for the winter…
_______________________________________

Yep, retail is getting a front kick to the gonads. The small city I work in has 5-6 empty storefronts on the 2 block main drag. Take the government rentals out and you’re up to about 8. Can’t miss ’em all papered over. In a nearby city Sears is moving out of the Mall, many empty units inside.

I had to buy a suit last year, and talked with a vendor who had a massive sale on as they were moving out. Turns out the owners rental/lease term was up and the rates had jumped big time. They were bailing as “the Mall did not provide much return on the high cost to be there anymore.” They were moving to a stand alone rental more to the city center.

#130 april on 11.27.17 at 12:57 pm

#105 – Who is Todd?

#131 IHCTD9 on 11.27.17 at 1:16 pm

#53 yorkville renter on 11.26.17 at 7:56 pm

…and his tenant said it can take 20 minutes to wait for an elevator during rush hour.
__________________________________________

Someone remind me why the GTA is great.

I drive home from work in about 13 minutes.

#132 Bilbo on 11.27.17 at 1:28 pm

Why the heck a joint nonreg account? For tax savings should be in name of lower income spouse right?

(a) Income-splitting. (b) Estate purposes. — Garth

#133 Stan Brooks on 11.27.17 at 1:29 pm

The original graph reads ‘Check Republic’, not ‘Chehoslovakia.’

http://www.macleans.ca/economy/congrats-canadians-youre-world-leaders-in-debt/

Focus on the content fellow brain-frozen Canadians, not on the form and the semantics.

Here are some french castles cheaper than an average shack in Van City:

https://www.prestigeproperty.co.uk/11-bed-french-chateau-saint-jean-de-chevelu-savoie-rhone-alpes-france-203763

https://www.prestigeproperty.co.uk/16-bed-french-chateau-tours-indre-et-loire-centre-france-200312

https://www.prestigeproperty.co.uk/15-bed-french-chateau-loches-indre-et-loire-centre-france-203986

https://www.prestigeproperty.co.uk/12-bed-french-chateau-saint-gaudens-haute-garonne-midi-pyrenees-france-201247

https://www.prestigeproperty.co.uk/6-bed-french-chateau-castillonnes-lot-et-garonne-aquitaine-france-202763

#134 NoName on 11.27.17 at 1:35 pm

#19 Underemployed Male in Toronto on 11.26.17 at 6:15 pm

THEY ARE ALL GIVING YOU WRONG ADVICE !!!

Just hit a gym hard for few months grow beard, and you’ll be hired in a jiffy.

#135 AGuyInVancouver on 11.27.17 at 1:40 pm

Looking at the Private Sector Debt by Country graph the connection between China’s upward debt climb and Canada’s is striking. One might almost think there was a connection…

#136 Luxembourg on 11.27.17 at 1:43 pm

#124
When we compare ourselves to Luxembourg in order to feel better, it’s probably over. — Garth

Well, Norway would be something to aspire to, for Canadians!

A petro-state that really works well.
I’ve visited Oslo: it is freaking amazing to see all that prosperity, happiness, modernity.
It’s hard to see how you can beat that quality of life there.

#137 IHCTD9 on 11.27.17 at 1:47 pm

.#64 Kurt on 11.26.17 at 8:54 pm
“Well, taxes are about to rise more in Canada because governments cannot live within their means, either. ”

NO, Garth. Just NO.

We live in a functioning democracy. *Canadians* cannot live within their means, and the government reflects that. Stop blaming “the government”! It’s your neighbours who keep voting for more services at lower efficiencies who are responsible for this. Which services are *you* willing to give up? Will you back *any* government that has the spine to make, say, a police union back down? Until a solid majority of Canadians can answer these questions, the problem will get worse.
____________________________________________

I think Garth speaks via the understanding that T2 is already in with a majority and can do whatever he wants. Is he wanting to return to a balanced budget? How about knocking 10-20 billion or so off the debt? He could if he wanted to. Alas, he’d rather bask in the warm glow of torching Billions on economy immolating goofball SJW bonehead initiatives. Spending is fun, making tough belt tightening decisions is not fun. T2 took the easy road, ie: the only road he’s ever known.

That said, there’s no chance in hell that a politician capable of making real and positive financial changes will ever get voted in with a majority to run this country. So I agree, Canadian voters are the problem, but majority rules in a democracy. We’ve just got too much stupid living here right now.

#138 Stan Brooks on 11.27.17 at 1:49 pm

And these are priced cheaper than the cheapest shack in Toronto/Mississauga/Scarborough/Vaughan:

https://www.prestigeproperty.co.uk/7-bed-french-chateau-angouleme-charente-poitou-charentes-france-201804

https://www.prestigeproperty.co.uk/7-bed-french-chateau-domfront-orne-lower-normandy-france-191217

https://www.prestigeproperty.co.uk/8-bed-french-chateau-navarrenx-pyrenees-orientales-languedoc-roussillon-france-197376

This one is cheaper than average condo in Toronto:

https://www.prestigeproperty.co.uk/5-bed-french-chateau-capvern-hautes-pyrenees-midi-pyrenees-france-194085

Cheers.

#139 Smartalox on 11.27.17 at 2:05 pm

Re: Friday’s Post about earnings and taxes:

2016 Gross income: $118k
2016 Taxable income: $94k
2016 Taxes: $20k
2016 Tax % of Gross: 17.6%

My wife’s tax rate was less (about 13%) and our combined tax rate as a percentage of gross was about 15%, on approx. $210k combined gross income. And we got $500 total in tax refunds.

We each reduced our taxable income significantly by making additional RRSP contributions (about $20k per year for me) over an above our employer-matched contributions. I invested 25% of my earnings, and just touched the annual maximum $22k RRSP contribution limit. Note that I still have over $100k in contribution room to use, forwarded from previous years!

The best part was that instead of bearing the burden of saving AND paying taxes on our high salaries – only to get multi-thousand dollar tax refunds, we set up those RRSP contributions ahead of time, (along with forecasting expenses for child care and charitable giving) we had the amounts deducted from our paycheques for income taxes REDUCED, giving our household hundreds of $ more in monthly cash flow, that would have gone to the tax man (from us) in the form of an interest-free loan, until we received our tax refunds.

These techniques are simple and all are legal, but apparently NOBODY on this forum does it.

Talk about apathy!

#140 X on 11.27.17 at 2:23 pm

re #97 Howard -> re #60

I meant illegally. There were posts on Saturday that indicated taking money under the table, not claiming rent and general intent not to be forthcoming in their returns. There weren’t alot of these posts, but they were there.

True, not fair to the rest of us to have to pay more in taxes to compensate.

#141 IHCTD9 on 11.27.17 at 2:26 pm

#89 Lost…but not leased on 11.27.17 at 12:20 am

However, the playing field may be levelled via on-line learning..sort of a Sears -like demise for bricks and mortar Universities???
______________________________

They’ll fight this tooth and nail.

Absolutely no reason why it can’t, or shouldn’t happen though. The typical degree has never been worth less in the workforce than it is now. Why should the kids be paying out the @ss for something that is so little valued in real wages? So little that it take 10-15 years to pay back the cost?

#142 Stan Brooks on 11.27.17 at 2:34 pm

#124 High, but not highest. on 11.27.17 at 12:42 pm
Yes, private debt is high in Canada, but not the highest.

Luxembourg, Ireland, Iceland, Norway, Portugal all have higher private debt as ratio of GDP than Canada has.
Yet, are omitted from the table in fig1.

https://tradingeconomics.com/country-list/private-debt-to-gdp

When we compare ourselves to Luxembourg in order to feel better, it’s probably over. — Garth

———————-

Let’s be clear here (not in T2 and BM’s way, which is ‘clear as mud’).

Luxembourg’s data is misleading as it/the debt includes banking debt/foreign investment, banks are the Business in Luxembourg, which is the single richest country in the world.

All foreigners working in Luxembourg are excluded from their GDP calculation. So private debt to GDP looks more than twice larger than it really is.

https://en.wikipedia.org/wiki/List_of_countries_by_GDP_(nominal)_per_capita

so when speaking about Luxembourg a little respect is due.

some more read on the topic.
https://www.quora.com/What-are-the-main-sources-of-Luxembourgs-wealth

quotes:

‘Luxembourg is extremely productive economically. With people making on average double the average American salary, this means that education and specialized workers in private sectors are two primary reasons why the little nation became the “little nation that could.” The government is, compared to other successful nations, very lax on the private sector. In addition, the government can afford to invest in assets without having to allocate money to federal sectors, which actually allows the government to make money externally of the private sector.’

and also:

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

In the 2011 Mercer worldwide survey of 221 cities, Luxembourg was placed first for personal safety.

Luxembourg is one of the de facto capitals of the European Union (alongside Brussels and Strasbourg), as it is the seat of several institutions of the European Union, including the European Court of Justice, the European Court of Auditors, the Secretariat of the European Parliament, the European Investment Bank, the European Investment Fund, and the European Stability Mechanism.

————————————-

As for Norway, also misleading, as they have huge savings, including over 1 trillion euro sovereign fund + other huge public pension funds + safety nets, to offset private debt which we don’t have.

—————————-

It always amazes me how brainwashed we are, up to the level of judging Luxembourg, by far the richest country in the world.

#143 under the radar on 11.27.17 at 2:38 pm

#111 -Howard
Just turned 55 and am quite sure what I have accomplished was not due to my birth year.

#144 Stan Brooks on 11.27.17 at 2:39 pm

#134 Luxembourg on 11.27.17 at 1:43 pm
#124
When we compare ourselves to Luxembourg in order to feel better, it’s probably over. — Garth

Well, Norway would be something to aspire to, for Canadians!

A petro-state that really works well.
I’ve visited Oslo: it is freaking amazing to see all that prosperity, happiness, modernity.
It’s hard to see how you can beat that quality of life there.

—————————

I understand you but that is just us.

One flew over cuckoo’s nest. 2017 edition.

#145 Stan Brooks on 11.27.17 at 2:43 pm

In my observations even eastern europe/the long discussed on this blog Romania or Croatia, Slovenia for sure are quickly leaving us in the dust.

Much better weather proximity to/part of the largest economy on earth and no, that is not US but EU.

No debt.

Cheers.

#146 Stan Brooks on 11.27.17 at 2:46 pm

And no, Luxemborugh does not have T2 or BM to go after their small businesses.

Well they for sure are behind in transgender toilets! Something to be proud of…

#147 Victor V on 11.27.17 at 2:51 pm

Toronto out of revenue Hail Mary passes: time for new playbook

https://www.thestar.com/opinion/contributors/2017/11/27/toronto-out-of-revenue-hail-mary-passes-time-for-new-playbook.html

Ontario’s Financial Accountability Office has estimated the impact of a correction in the real estate market on provincial land transfer tax revenue: using that analysis, we estimate that Toronto’s land transfer tax revenue could drop between $55 million to $95 million in 2018. By 2021, revenue could drop by up to $197 million a year.

Toronto’s red-hot housing market has allowed city council to avoid implementing other tax measures, but that will no longer be the case. There is a concrete and immediate need for city council to secure needed revenue.

In the short-term, it means using the tools already available: namely, property taxes.

Property tax remains the city’s largest and most stable source of revenue, but it has been growing more slowly than the city is based on any measure, including population growth and growth in economic activity.

Over the medium term, it requires some hard conversations with the province to expand the city’s revenue sources to include options that are more appropriate for the sixth largest government in Canada.

#148 Entrepreneur on 11.27.17 at 2:53 pm

“Private sector debt has doubled in a decade and too-thirds of that is mortgages.” Above article.

Dissect this private sector in this sentence: Anyone in Canada that can get a mortgage and that includes the public sector too. They are entitled too but can be misleading as we have been debating public and private issues.

That chart does look like a close tie between China and Canada, #137 AGuyInVancouver and T2 has been going over to China a lot. My guess more trade agreements that we, the people of Canada, are not allowed to hear too much about.

Yup, the middle class is frugal but many feel buying a house is the only way to survive with normalcy. But #115 Brian…”if the housing market tanks then the economy, then the financial system” but the financial system is managed to withstand this time around, hopefully.

And the next act will be…

#149 IHCTD9 on 11.27.17 at 2:57 pm

#100 Howard on 11.27.17 at 6:26 am
MORE free money to “low-income” parents, proposed by Brown’s Ontario PCs? When will it end?

https://www.thestar.com/news/canada/2017/11/25/low-income-families-will-receive-75-per-cent-refund-on-child-care-costs-tory-platform-says.html

At what point do we say that parents have to take some financial responsibility for their decision to have children?

Brown’s entire platform seems like it could have been written by current Premier Orville Redenbacher.
_____________________________________

Brown is useless. He’ll do and say anything to further his Political career. Not someone who is going to do an ounce of good for Ontario – just a douchebag trying to get elected. Hopefully true Cons don’t fall for it.

I’m voting Wynne for maximum financial destruction and to hugely increase the Ontario population of hard alt-right deplorables. When Ontario blows – it’s going to need to blow like a barrel of Tannerite eating a 50 cal. slug.

There is nothing to be gained by voting for Brown. Voting Wynne will 99% be good for right wingers in the long run.

#150 SoggyShorts on 11.27.17 at 3:15 pm

#139 IHCTD9 on 11.27.17 at 2:26 pm
#89 Lost…but not leased on 11.27.17 at 12:20 am

However, the playing field may be levelled via on-line learning..sort of a Sears -like demise for bricks and mortar Universities???
______________________________

They’ll fight this tooth and nail.

Absolutely no reason why it can’t, or shouldn’t happen though. The typical degree has never been worth less in the workforce than it is now. Why should the kids be paying out the @ss for something that is so little valued in real wages? So little that it take 10-15 years to pay back the cost?
*************************************
Some sort of Skype university has to be the future of education. What’s the difference between sitting in the 20th row of a 300 person auditorium, and sitting at home? Also having a really good prof teach 1,000s of students instead of hundreds just makes sense.

#151 IHCTD9 on 11.27.17 at 3:41 pm

#148 SoggyShorts on 11.27.17 at 3:15 pm

Also having a really good prof teach 1,000s of students instead of hundreds just makes sense.
_____________________________

Aye, it makes way too much sense to ever happen. This idea is a colossal no brainer up till you start talking about cutting into our University enrolments. Then suddenly there’s all kinds of opposition…

#152 jess on 11.27.17 at 3:47 pm

#58 45north on 11.26.17 at 8:16 pm

Time IS money and apparently energy

but ….coal to diesel?
But for each tonne of the liquid, six and a half tonnes of water must be piped from an aquifer more than 70 kilometres away and more than three tonnes of carbon dioxide are released into the air. These are major concerns for a country that is already desperately short of water and increasingly criticised as the world’s biggest emitter of greenhouse gases.
https://www.theguardian.com/environment/2009/nov/15/china-coal-industry-mongolia-shaanxi
====================================

the ghost town ordos inner mongolia ….bitmain 39k/mo to run the machines
6m.tera hashes/sec
coal-powered energy, electricity-hungry bitcoin operation
Located in a decaying industrial park on the outskirts of town, the mine employs about 50 and consists of eight single-story, warehouse-like buildings, each 150 meters (492 feet) long. Seven of them host 21,000 machines that, together, represent nearly 4% of the processing power in the global bitcoin network. The other hosts 4,000 machines dedicated to litecoin, an alternative digital currency that’s been rising in price in recent months.

https://qz.com/1137683/the-paradise-papers-suggest-chinese-tech-billionaire-lei-jun-is-connected-to-the-worlds-biggest-bitcoin-miner/
================

https://motherboard.vice.com/en_us/article/ywbbpm/bitcoin-mining-electricity-consumption-ethereum-energy-climate-change
https://motherboard.vice.com/en_us/article/ypkp3y/bitcoin-is-still-unsustainable
Do most transactions actually need to bypass trusted third parties like banks and credit card companies, which can operate much more efficiently than Bitcoin’s decentralized network?
https://qz.com/1055126/photos-china-has-one-of-worlds-largest-bitcoin-mines/

====
toronto tops their list
https://www.ubs.com/global/en/wealth-management/chief-investment-office/key-topics/2017/global-real-estate-bubble-index-2017.html

#153 Phil on 11.27.17 at 4:00 pm

University of Toronto’s Business School is doing a round of layoffs this week.

I hope no-one there bought a 650k condo last week.

#154 JRT on 11.27.17 at 4:23 pm

Great article. There is also the spectre of sub-prime auto loans. People buying what they normally wouldn’t buy and the loans are 84 mos and above in some cases. Of course with lower payments, more people have money for gas which means more traffic congestion as they can “afford” it because of lower payments.

Pray for Afghanistan. Alison “The Red” Redford will be the top policy advisor for Afghanistan. Alberta was debt free until she took over and ruined it possibly forever. An NDP govt elected then wouldn’t have done as much damage. Her husband’s company did well with govt contracts when she was Premier.
http://www.cbc.ca/news/canada/edmonton/alison-redford-afganistan-energy-1.4419170

#155 Stan Brooks on 11.27.17 at 4:25 pm

As I said, be aware of the lieberal thiefs. They are coming for YOU.

https://ca.finance.yahoo.com/news/live-tony-address-postal-code-100000807.html

#156 Gravy Train on 11.27.17 at 4:44 pm

#137 Smartalox on 11.27.17 at 2:05 pm
“… [W]e set up those RRSP contributions ahead of time, (along with forecasting expenses for child care and charitable giving)….”

Are you making contributions to RESPs? If not, you should consider doing so in order to access the Canada Education Savings Grant and to defer tax on investment growth.

#157 Smoking Man on 11.27.17 at 10:21 pm

On the Journey to Hotel California’s taking a slight detour only four hours from my present location.

https://www.google.com/amp/www.latimes.com/nation/la-na-hunter-thompson-bar-20150529-story,amp.html

#158 Freebird on 11.28.17 at 10:19 am

#73 TalkingPie on 11.26.17 at 9:18 pm

Yes, forgot about the Mill’s blogs. Will pass onto younger friends. Thx.

Have read the CCP site and passed on but off earlier in year about rates while this blog and other sources were warning about rates going up.

#159 What??! on 11.28.17 at 2:53 pm

I didn’t read all the comments but did anyone else notice how super crazy #1 Sam’s comment is? Did he mean why rush to buy instead? (He wrote why rush to sell houses in the next 5 weeks). I guess he thinks people don’t mind losing money as their house slowly (or quickly) devalues. Unless you’re holding on to your house for the next 10+ years or something.

#160 Vancouver on 11.28.17 at 5:06 pm

On the eve of a comprehensive, 10-year housing strategy going before Vancouver city council, Gregor Robertson reflected on the impact of offshore money in local real estate over his three terms as mayor of Canada’s most-expensive city.

“In my travels this year in Sydney (Australia) and New York, my sense is that Vancouver’s seen the most rapid impact of global capital of any big city globally,” Robertson told Postmedia News on Monday. “We’re among a group of big cities that have attracted hundreds of billions of dollars each in investment, but Vancouver has seen that hit in less than a decade, where it took several decades in many of those other cities, so they had more time to adjust.

“But it’s hit us like a ton of bricks.”

During the last nine years while Robertson has been mayor and his Vision Vancouver party has had a majority on council, Vancouver’s affordability crisis has deepened and the gap has widened between local incomes and home prices. But, Robertson stressed Monday as he’s said in the past, it’s not a problem that city hall can solve on its own.

Now, with less than a year until Vancouver’s next general municipal election in which housing is expected to be, by far, the dominant issue, city staff will present the Housing Vancouver strategy to council Tuesday. The strategy, more than a year in the making, touches on several different facets of housing, with proposed measures intended to address both the supply and demand sides of the current crisis. The strategy, particularly on the “demand” side, calls for collaboration with the provincial and federal governments.

The 248-page strategy package includes proposals for working with senior governments to explore measures such as reforming regulations for capital-gains taxes and closing “loopholes,” introducing a “speculation and flipping tax,” and increasing the provincial luxury tax.

And in a city where the topic of foreign real estate investment has been perhaps the most hotly debated issue in recent years, one particularly eyebrow-raising proposal seeks to explore “restricting property ownership by non-permanent residents.” The city, provincial, and federal governments have all drawn criticism in recent years for their handling of the foreign ownership of property, especially in red-hot housing markets like Vancouver and Toronto.

But, Robertson said Monday, “there’s no question that capital from beyond Vancouver’s borders has dramatically affected our real estate market.

“Where in the world it comes from is not the issue, and what nationality an offshore investor is doesn’t matter,” he said. “This is all about regulating the flow of capital and ensuring that it’s taxed appropriately, and taking care of Vancouver’s housing and ensuring it’s available to people who live and work here.

“It’s not about race or nationality,” he said. “We can’t have a real estate market that is completely disconnected from local incomes, and that’s what we’re trying to rectify.”

Vancouver has already taken some steps aimed at reducing the “commodification” of housing, including the country’s first Empty Homes Tax and a proposal requiring condo presales to be offered to locals first before being sold overseas. These measures have been criticized by some for going too far, and by others for not going far enough.

In May 2015, Robertson wrote a letter to then-B.C. Premier Christy Clark, seeking “urgent discussions” on housing, stating there was a “strong case for the province to curb unwarranted speculation.” In the letter, which was subsequently released publicly, Robertson wrote: “The escalation in housing prices coincides with increasing reports of Vancouver’s housing market being treated as a commodity for the world’s wealthiest citizens, with people parking their money in Vancouver real estate simply for profit.”

I

This week, Robertson said his 2015 letter to Clark “was met with denial and ridicule for another year before they took action with one step, with the foreign-buyers’ tax,” referring to the 15-per-cent tax on foreign-property buyers in Metro Vancouver implemented by the province in summer 2016.

“We can’t fix this on our own in Vancouver. We don’t control offshore investment or the real estate industry. So we’ve got to keep the pressure on Victoria and Ottawa to follow through on their responsibilities,” Robertson said Monday, adding he has “far more confidence now” in the senior governments compared with their respective predecessors.

Robertson said he had recently spoken with B.C. NDP Attorney-General David Eby, who previously served as the opposition party’s housing critic, to discuss “next steps” on new measures, though Robertson declined to provide further details Monday.

“The big problem we’ve had is that provincial and federal governments didn’t do their job regulating the influx of global capital and the real estate industry, and ensuring that taxes were being paid and speculation and flipping was under control,” Robertson said. “We had years of this being a free-for-all, and that drove up real estate prices.”

The Housing Vancouver strategy, which Robertson said he hopes council will unanimously endorse, will be presented to council Tuesday morning.