They’re back

Ten years ago when Lehman Brothers collapsed and the lights started to go out, money fled into safe stuff. Bonds. US debt. Yields shot higher, taking the two-year Treasury over 2%. By 2011, with the Fed rate at zero, those bonds had dropped to 0.14%, or next to nothing. Even two years ago they sat at just 1%. But as of this week that yield has doubled.

In the bond world, this is like T2 getting a standing ovation for giving $10 million to Omar Khadr or the US president calling all-black nations ‘shitholes’. It’s hard to make this stuff up.

But here we are. Yields have spiked and markets now give 80% odds US rates will rise again in March after being hiked four times in the last 13 months. In the brief period of Trumpenomics stock markets have raced higher, bond prices have plopped, inflation has returned, joblessness is gone, debt yields have spiked and interest rates are barreling higher faster than anyone could have imagined a year ago.

Are you ready?

This week (so far) RBC, CIBC and TD have raised their key five-year mortgage rates. The yield on Justin bonds has popped despite the fact we seem pooched on NAFTA. It also looks pretty certain the central bank will raise its key rate on Wednesday. That would be the third time in little more than half a year, and will be one of three – maybe four – such increases this year.

So rates are normalizing. This pathetic but shapely blog told you more than a year ago this was bound to happen, and here we are. Not even half way there yet. Four years ago there were 1.89% short-term home loans available and last spring fivers were going for barely over 2%. Now the RBC five-year posted rate is 5.14%, and by this time next week all the banks will be at, or close to, the same level.

This is a big, hairy deal because of the stress test. In order to prevent us from being devoured by debt, the federal bank regulator has a new hurdle every borrower must clear. You have to qualify to carry a loan (with payments that do not exceed a set portion of your income) at the greater of the posted benchmark central bank five-year rate (4.99% – see here) or the rate your lender is offering you, plus 2%.

With another Bank of Canada move next week, that benchmark will drift above 5% – to 5.14%. In other words, that’s the minimum level for borrowing and would only apply to someone who is offered a bank mortgage at 3.1%. But the best discounted five-year mortgage rate currently being offered (BMO) is already at 3.34% – soon to be higher. At RBC it’s already 3.54%, putting the stress-test bar at 5.54%. So you can see you can see where this is headed.

Logic dictates when the qualifying rate for a mortgage travels from a little over 2% to 5.5% in less than a year that there will be consequences. Mortgage dudes have been warning for months that the stress test alone would reduce the amount people can borrow by about 20%, and kick the crap out of the bottom of the market. Less extreme analysts have pegged the damage at 5% to 15%. The Bank of Canada itself said about 100,000 families would be impacted this year and at least 50,000 of them knocked out of the market.

Of course, that was before this – the jump in bond yields, mortgage costs and central bank rates. Now it’s a guess as to how the market reacts when borrowers face sticker shock. The fact is people will be able to borrow less and spend less. Either sellers reduce prices to accommodate that new reality, or languish on the market.

As mentioned recently, listings have started the spring explosion. They’re up more than 170% in the GTA, with a surge being seen this past week from Halifax to Kitsilano. Over 670 new For Sale signs sprouted in the Lower Mainland in the last four days. This early-2018 market will be defined by excess supply chasing distressed supply as sellers try to bail at year-ago prices while buyers run into the reality of bankers who’d rather hunker than lend.

Of course, all real estate is local. In some places there are incredible bargains opening up (an iconic NS property listed for $2.25 million a year ago is now $995,000) while in others, prices are sticky and will take months to budge. The B20 stress test is still a shock to most borrowers, while a whole genset of Tweeters and Snapchatters think interest rates can never really rise from the absurd levels they grew up with.

But this much is no longer in doubt: the bottom’s in the rear view. Next stop is Wednesday.

209 comments ↓

#1 Mike on 01.12.18 at 5:16 pm

Rates can go to 8%, but GVA real estate will never be at 2014 levels.

This is Kanada, and within Kanada it is Vancouver.

Rates, B20, etc doesn’t matter.

Keep renting readers, while people doubled their money.

#2 Ian on 01.12.18 at 5:22 pm

That US 2 year yield was a big, big story today.

The bond market is now selling off, which will way spike yields.

Look at a graph of UUP. I haven’t seen this in a long time. The US Dollar is just getting murdered. The China Treasury news earlier in the week has to be a major factor.

The US stock market is at extreme risk. It makes no sense it keeps rising with the USD falling for more than a year. It’s gonna go kablooey.

#3 TorontoBull on 01.12.18 at 5:32 pm

@244 from yesterday
Please reread the comment sweatheart:
“Re min wage regulation – it has been a long time coming after decades long suppression of labour bargaining powers that has led to poorer and more indebted middle class.”
suppression of bargaining power…capiche?
raising min wage will affect other contracts as there will be a chain reaction.
Does that make sense or are you way past the peak to understand the relationship and the reason that gvmts everywhere are increasing min wage is because they are acting in lieu of the missing unions.
You know, after the failed “the tide raises all boats” experiment?

#4 For those about to flop... on 01.12.18 at 5:32 pm

Pink Snow falling in Vancouver.

These guys just took 230k off and are trying not to capsize.

Paid 2.6 in April 2016 and are now asking 2.65

The Westside of Vancouver is a dangerous place to be purchasing real estate at the moment.

Just ask these guys.

Just another Westie who thought they knew bestie…

M43BC

3569 KING EDWARD AVE W VANCOUVER paid 2.6 April 2016 now asking 2.65

Aug 28:$2,999,000
Dec 24: $2,880,000
Change: – 119000.00 -4%

https://www.zolo.ca/vancouver-real-estate/3569-w-king-edward-avenue

https://www.bcassessment.ca/Property/Info/QTAwMDAwMEhWRQ==

#5 NiceBeach on 01.12.18 at 5:33 pm

You can see how recent borrowers are doomed by looking how much it will cost them to renew at +1% every 5 years from now. They’ve taken a big risk indeed…

That being said, every renter like me should save and invest. Homeowners are forced to save through mortgage so discipline is the key. Do the math, saving and investing will get you at least x2 times more than someone who bought a Van detached in the good old 80’s. But you have to have invested that money, so the key is discipline and consistency.

#6 nick on 01.12.18 at 5:33 pm

GTA is so done.

#7 Preferreds on 01.12.18 at 5:34 pm

Preferred shares are up nicely this year with interest rates on the rise. But the long term returns (including dividends) are pretty crappy, with long stretches of stagnation – somewhere just under 2% annually since inception for CPD. Are preferred shares keepers or is there an exit point? If so what would indicate that – if the economy slows again and interest rates drop?

#8 Screwed Canadian Millenial on 01.12.18 at 5:37 pm

I can’t believe anyone is still bullish about the US. They are in deep sh*t. Long time conservative icon of compassion and warm heartedness, Dick Cheney, famously said “Reagan proved deficits don’t matter”. Turns out deficits do matter.

I told you boomers to get out of the USD. CAD/USD might get to 90 cents this year but CAD isn’t a good choice either. There are better options.

You’ve been warned.

You just hit your quota for today. – Garth

#9 I’m stupid on 01.12.18 at 5:40 pm

#1 Mike

I live under a bridge. Just like a troll like you!

#10 Duke on 01.12.18 at 5:40 pm

#1 Mike on 01.12.18 at 5:16 pm
Rates can go to 8%, but GVA real estate will never be at 2014 levels.

This is Kanada, and within Kanada it is Vancouver.

Rates, B20, etc doesn’t matter.

Keep renting readers, while people doubled their money.

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

Wahahahahaha~

Really? I bet the RE prices will go back to pre-2010 soon.

#11 index on 01.12.18 at 5:43 pm

Who would have thought?
Vancouver prices are up.
Probably the rush to avoid new OSFI rules.

+1.3% compared to previous month.

https://housepriceindex.ca/2018/01/the-house-price-index-stopped-retreating-in-december/

#12 Screwed Canadian Millenial on 01.12.18 at 5:44 pm

Oh the irony.

Wal-Mart to cut corporate jobs: report
https://www.marketwatch.com/story/wal-mart-to-cut-corporate-jobs-report-2018-01-12

I honestly will never understand what goes on in the minds of people who think that corporations that already make $13 billion a year in PROFITS, needed a tax cut.

#13 crowdedelevatorfartz on 01.12.18 at 5:47 pm

WooHooo
Rising interest rates……Multiple Listings.
Maybe Millenials can buy a distressed house next year like the Boomers did in the late 1980’s and 30 years from now…..
Their kids will hate them too!

#14 Andrewski on 01.12.18 at 5:49 pm

Part of the challenge when buying real estate is finding an honest agent who is not bamboozling the buyer to “get in now because they’re not making more land”…

#15 Screwed Canadian Millenial on 01.12.18 at 5:50 pm

Hey Garth, no Fed rate hike at the end of this month? What do you think?

I don’t know but I don’t think they want to fall behind the curve on this avalanche.

With the USD falling, it’s a giant boon to the rest of the world.

I guess March-May-September-December. Geez they may need to do more than 4 if this keeps up.

#16 great!!!!!! on 01.12.18 at 5:55 pm

thousands priced out of the market. More renters!! supply /demand…..happy camper.

#17 Guy in Calgary on 01.12.18 at 6:00 pm

See you at your neighbourhood credit union :)

#18 Periscope on 01.12.18 at 6:00 pm

It’s different in Vancouver, house prices are still going up. Check zolo. There are a billion customers for West Coast homes. It’s different here.

#19 Ronaldo on 01.12.18 at 6:00 pm

We will soon discover how many specker realtors are holding multiple properties and subsidizing renters. I expect a flood of listings to hit the market in the spring.

Remember this:

https://www.youtube.com/watch?v=hqOn5XEm86A

#20 Jimmy on 01.12.18 at 6:02 pm

DELETED

#21 Dolce Vita on 01.12.18 at 6:02 pm

#1 Mike

Rates go up. Prices come down. Always have and always will.

Agree prices sticky for a few months but already, people rushing for the turnstiles to cash out with Garth’s inventory stats; thus, discounting of prices will worsen with fewer buyers courtesy of B20.

I still say that by mid-year there will be a 25% drop in average RE price in YVR and 416, mimimum. Much more by the end of 2018, maybe 50%.

Banks will see RE asset values drop. They will need quick cash flow to make up the difference; otherwise, their stock price will drop.

Any loan based on a home, such as HELOCs, will probably get the letter to pay up.

Banks will probably put the screws on unsecured debt to increase cash flow quickly.

April/May 2018 Realtor spin ought to be entertainment plus. Epic by year end.

#22 Stan Brooks on 01.12.18 at 6:10 pm

We are sooooooooooooooo f..ked.

Doubling the money means nothing when inflation shows up and it is already here.

Watch out for the s..tstorm.
Load on popcorn, it will be spectacular.

You won’t recognize this country when I am done with it: Herr Harprer + the fancy socks idiot

#23 Screwed Canadian Millenial on 01.12.18 at 6:12 pm

You just hit your quota for today. – Garth

—–

Only 3?! So this is what a margin call feels like…

That’s 4. – Garth

#24 OttawaMike on 01.12.18 at 6:14 pm

Can you link us up to that NS deal?

I want to see what a million buys there.

#25 Guy in Calgary on 01.12.18 at 6:17 pm

“#7 Preferreds on 01.12.18 at 5:34 pm
Preferred shares are up nicely this year with interest rates on the rise. But the long term returns (including dividends) are pretty crappy, with long stretches of stagnation – somewhere just under 2% annually since inception for CPD. Are preferred shares keepers or is there an exit point? If so what would indicate that – if the economy slows again and interest rates drop?”

They are fixed income and a play on interest rates. Will help with volatility but mainly an interest rate play.

#26 Flyboy on 01.12.18 at 6:18 pm

Longtime reader first time poster. Garth thanks for this blog and all the great info.

Question for you and any of the blog dogs here. Any insight on housing market in niagara region? Bought here two years ago and the housing market has taken off until about the last 3 months. Listings have increased and sales have slowed significantly it seems. Houses that are priced right seem to sell but everything in the 500k plus range has been slow.

I am currently going through a separation with my common law partner (we have worked out an agreement and I am keeping the house). However I am considering selling and moving back to Toronto, and either buying a condo or renting there. Not sure if noww is the time to sell? Spring? Later in the year? Next year? My wheels are spinning on this. Not sure I want to be I na small city being a single guy in my mid 30s. I guess I should add my job is in Toronto however only have to commute in 4-5 times a month.

Any insights on the niagara region market would be great.

#27 SimVan on 01.12.18 at 6:19 pm

I am expecting a baby on Feb 4. The husband and I are staying in our one bedroom condo in downtown Van. We want to see what the market is like at the end of 2018 before we consider an upgrade. People cannot understand why we wouldn’t just rent or buy a larger place. People are stupid. I will not let go of my primary residence exemption. I also will not pay 2500 to live in someone’s two bedroom basement like a hobbit. Better to experience a little short term discomfort by living in a smaller space and building our future by saving for our next down payment. By discomfort I mean just keeping the place clean and organized. Anyone who buys in this market with all this uncertainty is stupid.

#28 Guy in Calgary on 01.12.18 at 6:19 pm

#5 NiceBeach on 01.12.18 at 5:33 pm
You can see how recent borrowers are doomed by looking how much it will cost them to renew at +1% every 5 years from now. They’ve taken a big risk indeed…
That being said, every renter like me should save and invest. Homeowners are forced to save through mortgage so discipline is the key.”

You do realize that people pay their mortgage and save money at the same time right? I’d wager that if you pit a home owner you bought within their means against a renter after 25 years, the home owner would be ahead in aggregate net worth.

#29 VanMan on 01.12.18 at 6:20 pm

If rates go up, then stress test will disappear… just watch. They will not ruin the gasbag… just deflate it a little. Just watch…

The bank regulator cares about the banks’ stability and health, not the Vancouver real estate market. Just watch. – Garth

#30 Lost...but not leased on 01.12.18 at 6:22 pm

Re: Today’s photo

Is that AL GORE in the dinosaur costume ?

(Oh yeah??? prove me wrong !!!)

#31 AGuyInVancouver on 01.12.18 at 6:22 pm

DELETED

#32 Kelsey on 01.12.18 at 6:23 pm

Wow, DXY down to 90.90 a full 1.00 points and 1.08% on the day. Did anyone see any obvious catalysts in the news today? Maybe its China selling treasuries in the background and other players preparing for the upcoming Oil/Yuan futures contract rumored for January 18th. With rates and commodities rising at the same time as the stock market is rising with a falling dollar, it’s starting to smell like a crack-up boom.

#33 January Test on 01.12.18 at 6:24 pm

“The fact is people will be able to borrow less and spend less. Either sellers reduce prices to accommodate that new reality, or languish on the market.”

Well, the sales report for January will test the hypothesis that B20 will be a market changer. The effect of wiping out potentially 20% of buyers will surely be felt right immediately? I mean 20% can move a market right? Unless of course, buyers are not ‘local’….

On Vancouver Island, there is no deluge of listings – in fact no one is listing. The odd one hitting the market still have April 2017 prices. Perhaps an unintended consequence of the new mortgage rules that defy predictions….as the market has defied predictions for a decade.

Most observers think (I agree) we will need six months of data to measure the impact of B20. – Garth

#34 Poloz Peso on 01.12.18 at 6:28 pm

Dont tell me that Poloz is going to CUT rates next time!
I’m fed up with holding such an unstable currency like the Poloz Peso….Will Garth start charging his professional fees in US Dollars or Haitian Gourdes?

#35 Smoking Man on 01.12.18 at 6:33 pm

LMAO on yesterday’s comments.

To so called educated lefty loons can’t tell the difference between the words Loathing and Hate.

For the record. Lesbonic people are from the planet Lesbetron in the sequel to my first fiction novel.

Yes it’s never going to be a movie in Hollywood
But Trump supporters will like it.

#36 conan on 01.12.18 at 6:34 pm

“The US stock market is at extreme risk. It makes no sense it keeps rising with the USD falling for more than a year. It’s gonna go kablooey.” – Ian

They were all borrowing big money to purchase their own shares. So Q.E. + share buy backs = fake markets

Very much like baseball records during the steroid era.

No one knows how it will end. Trump screwed up the fundamentals even more, assuming there were fundamentals to begin with.

#37 Screwed Canadian Millenial on 01.12.18 at 6:35 pm

#33 Poloz Peso on 01.12.18 at 6:28 pm
LOL.

Garth doesn’t deal with such shithole currencies. Norwegian Krone might be attractive though.

I couldn’t resist. Ok that’s it for today. I don’t want to test Garth’s margin limit and get liquidated.

I’ll catch you boomers tomorrow.

#38 Technical analysis? on 01.12.18 at 6:38 pm

So… with all this great news in Trumpland, why is the USD collapsing?

#39 Vince on 01.12.18 at 6:40 pm

I spoke with a CIBC mortgage advisor. Showed me a page on how to maximize my buying power by synthetically creating a 25 year mortgage to beat the stress test. Step one: qualify at 35 year amortization, step 2: set up an automatic payment plan to enhance principal payments to make the 35 year amortization equal the 25 year. Step 3: accelerate cash availability with an additional HELOC product that gives immediate access to any principal paid on the home. You can’t make this stuff up. The stress test is bogus.

#40 Donut on 01.12.18 at 6:42 pm

#1 Mike

That’s what they all say. From Johannesburg to Jarkarta, from Honolulu to Lima. It’s time.

Let’s see those home prices halve. Let’s see non residents pushed back out, flippers and renters taxed at their marginal.

People cannot afford the homes they are buying regardless of interest rates. It’s all based on FOMO and 10% compounding gains.

And for the record I own. But also have cash waiting for the kill.

Speaking of donuts, why does everything at Tims taste like donut – from grilled cheese to chili.

#41 Utility Johny on 01.12.18 at 6:42 pm

Not only do bonds believe rates are going up, but utilities too. Take a peek at XUT and ZUT. Safe stuff is losing momentum faaaaast.

My coworker is very quiet about real-estate. Only 6 months ago he was telling me he was looking for a second house under 750k but couldn’t find one but would love to. He makes 95k and his wife zero.

#42 crowdedelevatorfartz on 01.12.18 at 6:51 pm

@#26 Flyboy

All indications are things will get worse before better.
Probably want to flog it now rather than wait.

#43 acdel on 01.12.18 at 6:53 pm

Good post Garth, 2018 will finally dispel many of the b.s. games out there. A re-balance is needed and hopefully not too many suffer of it, but it is much needed!

#44 Danny on 01.12.18 at 6:55 pm

Garth you are a straight Shooter……..”In order to prevent us from being devoured by debt, the federal bank regulator has a new hurdle every borrower must clear. ”

Well what is new…..the lending market is unfolding as it should…..the Banks always crunch their secret numbers, evaluate their risk and now realize what you have been saying for some time……personal debt brought on by an over extended period of unprecedented low interest is in the “let’s start worrying ” stage of reality.

Maybe these real unprecedented debt levels in private and public sectors…… living beyond our means reality are really indicating that maybe North America is the real “Shit Hole “…..just that it is not as visible on the streets like poor and underprivileged countries in the world.

Many are not ” richer than they think”…they are ” poorer than they know ” persuaded to borrow beyond their means by overzealous salespeople…without a conscience.

I have not visited those underprivileged countries that shameful and disgraceful Donald Trump from the White House calls ” Shit Hole “…..but I know as many have in their lives before……I know a ” Shit Head “when I hear one him speak …and he is living off of the tax payers of America.

#45 john m on 01.12.18 at 7:01 pm

What a crazy country we live in this day and age…credit card millionaires are doomed to fail and they will..just look around and wonder how we got here…one doesn’t have to wonder how this will end………..

#46 M on 01.12.18 at 7:02 pm

Canada is a one cylinder engine for 5 to 10 years now. RE and connex are FIREC all hooked into the housing.
Remortgaging every 5 years makes the entire home ownership “subprime”. The fact that gringo forgot his own history (1988) just add into denial and as such has a magnifying effect.
It won’t matter that the FED will bail out the canadian banks again :
https://www.youtube.com/watch?v=9K_N0uOXkQA)

..shorting the “big” canadian banks will be indeed the deal of the decade once that bus will start moving downhill.

..and the golden unloved.

Gartho baby, take this and the previous “lame winner” comment done previously and keep them well. One day you’ll have them framed in the ice cream shop.

#47 Periscope on 01.12.18 at 7:04 pm

Vancouver single detached prices are up +25% year over year. See zolo. Looks like the B20 bomber was shot down over the south China sea.

#48 millenial-falcon on 01.12.18 at 7:05 pm

DELETED

#49 tccontrarian on 01.12.18 at 7:07 pm

“In the brief period of Trumpenomics stock markets have raced higher, bond prices have plopped, inflation has returned, joblessness is gone, debt yields have spiked and interest rates are barreling higher faster than anyone could have imagined a year ago.

Are you ready?”-GT
———————————————————–

I’m getting the sense that you’re about to break down and buy yourself some gold – the best asset to hold during inflationary times.
It’s OK Garth, you can own it without licking it! :-)

TCC

#50 For those about to flop... on 01.12.18 at 7:15 pm

Pink Snow falling in Vancouver.

These guys paid 3.2 for this World War 2 era build in March 2017.

Been on the market now for close to 3 months without any takers.

Maybe they are being smart and holding out until the one year mark until the exemption is valid.

Then someone will come in and offer 6 million bucks.

And then they wake up …..it was all just a dream…

M43BC

1749 w 62nd ave,Vancouver. Paid 3.2 March 2017 ask 3.39

https://www.zolo.ca/vancouver-real-estate/1749-w-62nd-avenue

#51 n1tro on 01.12.18 at 7:15 pm

#220 TorontoBull on 01.12.18 at 2:03 pm
@197
not a 1st time poster but your comment illustrates the vile nature of many commentators.
—————————–
Between the “vile” comments made by me or any other poster, which one of us has been banned 3+ times by Garth? Oh I forgot, Garth is a bully, Paleo, mysoginist, Conservative, hater of the young, etc, etc

#52 -=jwk=- on 01.12.18 at 7:17 pm

Good lord, RBC was at 4.99 on Wednesday – yes two days ago- when I got the 5yr renewal option for 4.99-1.7=3.29. If I let that expire I would get 3.44 now, best case.

Now might be the time, rate increase on the 17th or not.

We owe 2x our HH income,with solid 35% equity (it helps to put 20% down:) So we’ll be ok, just sucks to pay so much more interest for the same thing.

This is not going to end well for those high ratio folks. not well at all.

#53 Robert B on 01.12.18 at 7:17 pm

Garth, funny how you fell for the “Shithole” fake news story….The Donald denies saying that. I’m pretty sure the others there can back him up. You know there is a Democrat agenda in place to smear Trump when they can.

Also the other fake news story on China stop buying US treasuries.

You do not know what to believe any more.

I trust that is sarcasm. – Garth

#54 Bottoms_Up on 01.12.18 at 7:23 pm

#27 SimVan on 01.12.18 at 6:19 pm
—————–
You’ll be singing a different tune in 6 months…crib, jolly jumper, play mat, change table, diaper genie, baby swing, baby rocker, stroller, toys, books, clothes, all the bath stuff etc. you think you are short on space now, cut it in half and you get a realistic idea of the space kids take.

#55 DON on 01.12.18 at 7:28 pm

Oh where or where are the posters that say ‘rates will never rise’ cause people are too indebted.

#56 DON on 01.12.18 at 7:36 pm

#1 Mike

Do you really think that way. Too much time hanging around with realtors. And only reading realtor paid advertisements.

You need different sources.

#57 Lost...but not leased on 01.12.18 at 7:39 pm

Is it time to:

(i) Short
or
(ii)Sh*te

Tim Horton’s stock?

#58 S.Bby on 01.12.18 at 7:39 pm

Mike & Periscope:
They must be realtor trolls running scared …

#59 Oakville Sucks on 01.12.18 at 7:43 pm

Richmond Hill is so done!!!! Down 30% so far this year and nothing is selling. I’ve been watching a few houses sit on the market since the deal collapsed last may.

Yeah it’s true…greedy sellers are trying to get March 2017 prices.

1.6 million homes now selling for 1.1 million.

90% of homes are reliatings!

#60 Andrew Woburn on 01.12.18 at 7:44 pm

#32 January Test on 01.12.18 at 6:24 pm
On Vancouver Island, there is no deluge of listings – in fact no one is listing. The odd one hitting the market still have April 2017 prices. Perhaps an unintended consequence of the new mortgage rules that defy predictions….as the market has defied predictions for a decade.
==================

From what we see in our neighbourhood in Nanaimo, there are few listings and they sell very quickly, as you say, at high prices. I suspect a hike in rates won’t change this much because the buyers are mostly from elsewhere, older and probably paying cash. Also the recent run up in sales and prices likely represents the leading edge of boomer retirements, not speculators, so they mopped up the limited stock of SFH within walking distance of ocean view and there will not be a lot of turn over in the mid term.

That is not to say prices won’t decline, especially if YVR gets hit badly, but probably not very fast. Few of the new buyers we have met around here are actually from BC. So far they have mainly been from Ontario, Alberta and China.

#61 Oakville Sucks on 01.12.18 at 7:45 pm

#52 Robert B on 01.12.18 at 7:17 pm
Garth, funny how you fell for the “Shithole” fake news story….The Donald denies saying that. I’m pretty sure the others there can back him up. You know there is a Democrat agenda in place to smear Trump when they can.

*********

The Coup is in full swing!!!

#62 Happy Housing Crash Everyone! on 01.12.18 at 7:49 pm

You dirty low life and now starving for money SHYSTERS will suffer for years to come. No sales = no money. You can go bankrupt or try a consumer proposal. Game over :-)

Happy HAPPY Housing Crash Everyone! :-)

#63 akashic record on 01.12.18 at 7:52 pm

the US president calling all-black nations ‘shitholes’

====

Was the US president calling out the obvious lack of multiculturalism and diversity of the all-black countries?

Loyd Blankfein tweeted: “View from our building today reminds me that despite all the sh*t, American values will shine through.”

Is he referring to the “American values” that turned Afghanistan, Iraq, Syria, Libya, to name a few recent one, into total economic sh*th0les? At the same time contributed to Loyd for building wealthy tower where he can watch the sh*tsh0w from perfect comfort, with a bag of popcorn, while moralizing in perfect diplomatic language?

Are sh*th0le countries the creation of diverse group of people who’s common trait is to profess perfection of the diplomatic lingo?

#64 Cto on 01.12.18 at 7:53 pm

Poloz, great at self preservation, by keeping rates low. Great job!
Doing the right thing? Not so good…

.

#65 Andrew Woburn on 01.12.18 at 7:54 pm

“According to Epoch Investment Partners, since 2009, there has been a 95 per cent correlation between the level of the S&P 500 and the combined balance sheet of the G4 central banks. Therefore, despite all of the recent talk of easing, central banks are in a precarious situation as they do not want to transfer the risk they have taken out of the market back to the investor.

But how much longer can these banks control the force?”

-A Star Wars warning for central bankers: Economically speaking, the Force is not with you

http://business.financialpost.com/investing/a-star-wars-warning-for-central-bankers-economically-speaking-the-force-is-not-with-you

#66 For those about to flop... on 01.12.18 at 7:56 pm

Pink Snow falling in Vancouver.

This one is borderline but anyone paying attention to what’s happening on the Westside knows that they will be concerned as to what is going on.

Originally listed at 5.09 in early November last year , it only took them a couple of weeks to chop it down 110k to the present number of 4.98 to get under the five barrier.

The problem for these guys and a lot of their neighbors is that they bought at the peak and anyone with this type of change is spoiled for choice.

If I had to guesstimate I would say I had somewhere between 20/25cases in that area in that price range trying to get their money back at the same time.

Someone bailed in that price range at 1324 w 58th ave about a month ago.

I posted it last night and tried to get an answer from a realtor.

Guess they were all busy holding the frozen vegetables to their clients forehead…

M43BC

4293 w 13th ave,Vancouver. Paid 4.5 February 2016 were asking 5.09

On 4.98

https://www.zolo.ca/vancouver-real-estate/4293-w-13th-avenue

#67 Nonplused on 01.12.18 at 7:58 pm

Rising interest rates are no problem just move the minimum wage up to $30/hr! If that doesn’t work move it up to $45! If the logic is that people need to earn enough to get by, why shouldn’t they get by in style!

Also, we need to combat this problem of businesses replacing employees with some sort of “self serve” technologies. Mandate employee levels for every type of business. For example doctors should have to employ at least 2 nurses and 4 receptionist. A fast food restaurant should have at least 40 employees. Etc. After all, if the government can change the realities of economics in one area, why not change them all???

Plus, think of all the money we could save on education! Why would anyone even complete high school if they could get $45 an hour to deliver pizza? Plus tips of course we should mandate that too. However declining enrollment might put a few teaching jobs at risk so let’s mandate minimums there too!

I think using methods such as these we should be able to correct for all the deficiencies of capitalism and free markets just like they did in Venezuela and the Soviet Union. Everyone knows the only reason those systems failed is because of “Western influence”.

The idea that a person should earn “what they are wroth in the market” is just plane wrong. They should earn what they are worth as a person! Sweet SJW’s that they are.

Heck why even require them to show up for work at $15/hr? Work is demeaning. Send everyone $15/hr from the government. Or $30, or $45, whatever it takes.

#68 Chico on 01.12.18 at 8:04 pm

#24 OttawaMike on 01.12.18 at 6:14 pm

Can you link us up to that NS deal?

I want to see what a million buys there.
———–

Here’s couple dumps from our have not province Mike ;)

The last one is a mill.

https://www.realtor.ca/Residential/Single-Family/18978159/37-Deerview-Crescent-Salmon-River-Nova-Scotia-B2N6P6-Salmon-River

https://www.realtor.ca/Residential/Single-Family/18869574/312-Haliburton-Road-Pictou-Nova-Scotia-B0K1H0-Pictou

https://www.realtor.ca/Residential/Single-Family/18874867/127-STONEHURST-Road-Blue-Rocks-Nova-Scotia-B0J2C0-Blue-Rocks#v=d

https://www.realtor.ca/Residential/Single-Family/18971058/1342-Robie-Street-Halifax-Nova-Scotia-B3H3E2-Halifax

#69 Robert B on 01.12.18 at 8:08 pm

#52 …I trust that is sarcasm. – Garth

I never intended it to be sarcastic .

There have been many media posts that have turned out to be false. This may be done for for financial gain or character assassination. In Trump’s case the latter.

My point is that “we” hear news everyday but I think we have to take some of it with a grain of salt.

Participants in the room reported it. Seems reliable. – Garth

#70 millmech on 01.12.18 at 8:10 pm

Currently watching three different markets in B.C. right now, inventory increasing no price increase in last six months. The houses are being relisted but no price reductions yet but the new changes to banking rules have removed 40% from my purchasing power, a $200,000 drop.
I will simply wait for the housing to correct the 40% to bring everything back into balance, always has, always will, this time is not different.
Patience!

#71 Yorkville Renter on 01.12.18 at 8:12 pm

The RE Bull has been going for years and people think two weeks into B20 they can call it a failed policy?

get real.

#72 Dan.t on 01.12.18 at 8:13 pm

Was actually going to comment about yesterday’s crypto post but now, don’t really give a flying frog (that was censored by the way).

But just to touch on the subject…crypto was exactly what you mentioned….a fear proxy…hedge against the man (central bankers), governments, devaluing the poop out of our currency, stimulating asset bubbles, GROWTH at all cost because DEFLATION is the devil!

Now, since they are letting Crypto run, I hope and think it is more of a GROWTH story. The powers that be, think, well, lets see how this works out…either that or buying a 1985 bungalow in Abby for 685k ( who is the friggen fool now).

My point big guy…. just like in housing and believe me…when I visited Canada the last years and tried to explain the stupidly and economics behind it I was pretty much banished and branded an idiot, I gave up.

Almost believed my best course of action was to buy 9 pre-sales before the asian market got em…but, whatever.

My point in all of this….you may be right in Crypto…but wrong on the timing…tons and tons of more profits to go before this puppy blows. Just like housing…Crypto will make many millionaires before the story is over and how do you know when the story ends? PM me when the top is in….just like housing.. don’t underestimate the wisdom of crowds….it’s in it’s 6-7 inning and lots of up to go.

K I m done for now…just saw a cool 1986 condo for sale in Canada…does it matter where, I mean it’s Canada real estate, who cares where it is…rich, I’m gonna be friggen rich…oh wait, pot stocks dropped,,,crap….no they recovered…no they dropped….I gotta go!

#73 TheSecretCode on 01.12.18 at 8:13 pm

We will know once the spring market is in full force what the B20 will do. Especially in BC where credit unions are everywhere (take note – although no B20 – credit union rates are up).

First comes interest rate hikes.

Then comes an unwind / job loss shock.

The RE agents know this is coming and the smart ones have socked away tons of cash so that they can survive the part of the cycle where RE is dead.

The question is: was 2008 a head fake? And is this going to be the mother of all RE corrections that Canada has been putting off? Or is the can going to get kicked down the road more?

If interest rates are truly are going up, and the discount pops above the 2010 level – then buckle up. Everything is in line for one big mother of a plunk where we will really find out how bad the debt disease is in Canada.

#74 Ace Goodheart on 01.12.18 at 8:15 pm

“You better act now or be priced out of the market forever.”

“But no one can afford the houses. Who is going to buy them?”

“Well, what about all those foreigners? They’ll buy all the houses. You won’t be able to compete. They’re much richer than you”.

“You better act fast, bitcoin will go up forever, pretty soon it will be the only currency accepted anywhere, and it will replace fiat. You’ll be struggling to get Satoshis and the people who bought in first will be billionaires who control everything”

“But no one can afford a bitcoin. They are much too expensive”.

“Foreigners can. They have more money than you do. They will buy up all the bitcoin. You better buy in before it is too late.”

The anatomy of a bubble. Follows human psychology, which can be seen by watching any line up that does not have crowd control measures in place. You better act fast or you won’t get any. People who are different from you and more special than you are, will get it all. Take any measure to get in now, before it’s too late.

Yawn. Boring, boring, boring.

Why don’t we talk more about serious investing? So many interesting opportunities right now. The billionaires and millionaires of tomorrow are just getting started today.

#75 YVR Renter on 01.12.18 at 8:16 pm

The Fraser Institute noted this week that a shortage of space for densifying in Toronto and Vancouver does NOTexist. In fact there is a treacherous combination of low density and high housing costs with low economic generators in Vancouver:
https://betterdwelling.com/toronto-vancouver-real-estate-rank-low-density-high-prices/

The Globe and Mail cites that other factors must be coming into play to create the terrible unaffordability of Vancouver and Toronto. In fact, a good measure of affordabilty, average house price to average household income ratio, has completely detached in parts of Vancouver at 25-35X income, and Richmond Hill, ON at 20X, while the average Canadian city sites at a ratio of 3-4X. The Globe calls it, “…a de-coupling on steroids”:

https://www.theglobeandmail.com/report-on-business/rob-commentary/what-toronto-and-vancouver-housing-data-do-and-dont-tell-us/article37562481/

#76 Hugh Janus on 01.12.18 at 8:16 pm

Had a friend tell me the other day that rates cant go up as too many people will be in trouble if they do. “The government wont raise rates” he said as too many wont be able to afford it. I told him thanks for the advise but im glad i rent. He sid he has renters in two of his three ” investment” properties. I wished him luck.

#77 When Will They Raise Rates? on 01.12.18 at 8:18 pm

DELETED

#78 For those about to flop... on 01.12.18 at 8:19 pm

Pink Snow falling in Vancouver.

Here’s another one that’s been on the market for over 100 days.

Paid 3.21 at the peak and they are asking 3.29 ,which won’t even cover all the expenses.

So much Pink Snow on the Westside ,I’m going to build a Pink Igloo…

M43BC

3821 w 22nd ave, Vancouver. Paid 3.21 April 2016

On 3.29

https://www.zolo.ca/vancouver-real-estate/3821-w-22nd-avenue

#79 Long-Time Lurker on 01.12.18 at 8:24 pm

“Bean-pole” –a substitute for another word– sure is becoming the dominant meme here. Everyone is saying it. I mean this comments section is turning into a real “bean-pole”.

#80 TheSecretCode on 01.12.18 at 8:25 pm

Expect listings / inventory to swell, but prices are still coming out at all time records in BC / Scamcouver.

Once the inventory swells it will swing into a buyers market if over 6 months of inventory is achieved in any market.

Then the ones who have to sell will adjust the price to make it happen while the rest will just disappear – pull their property off of the market. The ones who pull will be in denial for awhile and this denial will cost big time if interest rates continue to rise.

I get a sense that most people think that it will be temporary, but a better analogy would be the comparison of Alberta. The most hardcore who tried to hang on in the oil down turn (thinking how they survived 2008) have now thrown in the towel. Although a recover can happen, it has not been V-shaped; therefore, long and painful this time around.

Anyone in oil knows how bad this has downturn has been – the worst on record?

If the long cycle is turning and we are moving to a longer term interest rate rising environment (with drops along the way when recessions hit) then 2015/2015/2016 may go down as the greatest rising price period in Canadian RE history – a period of BoC policy error – only to be seen maybe in another generation. I am not saying RE is going to crash but get ready for RE gains to fizzle out and start to get back in line with inflation – naturally yield chasing money will switch to other products.

And remember – the only true way to know if things are changing is to always test yourself with the banks who run the game.

I do this all of the time and for the first time since 2010 (starting last fall) things are actually starting to tighten. And if TheSecretCode (who is in the top tier of credit worthiness and not ever needing credit due to excess cash from good decision making) starts getting a no from the credit unions and told that there is less in the lending kitty – it’s on baby!

#81 Buy The Dip on 01.12.18 at 8:29 pm

Did you buy the Dip in crypto? If not why? Great deals were to be had in the past few days and now we are entering the next leg up. BTC 28K and ETH 2K. So many fortunes are being made with this new technology. Corrections are healthy.

#82 dgb on 01.12.18 at 8:34 pm

#53-don’t believe everything the advertisers tell you that you must have…you need a crib…and a stroller unless you would like a nice upper-body workout as you stroll…none of the rest of that stuff you mentioned is even remotely necessary…maybe a toy or a book but they will make a toy of anything you give them eg. a kettle or a bowl with some spoons is great fun and everyone has a tv for kids learning shows..do not believe everything that you hear and see now-a-days…life used to be so much more about needs and not about wants and we boomers are pretty smart for growing up with just the needs….advertisers make their money by selling you things you never needed in the first place and children grow out of things way too fast ….teach them yourselves instead of thinking that some toy will teach them for you …just my 2 cents reply to #53 who seems to think everything in a store is needed ,,,it’s not.

#83 For those about to flop... on 01.12.18 at 8:43 pm

Pink Snow falling in Vancouver.

These guys are currently in Pink Draw territory at the moment but that is only if they can separate someone from a wad of cash.

Paid 4.05 in early 2016 ,like I said in a post earlier there is lots of distressed inventory in this bracket.

Asking 4.45 if they get that number and walk away with all their fingers intact they might say that’s all Whyte…

M43BC

2006 Whyte Ave,Vancouver. Paid 4.05 January 2016

On 4.45

https://www.zolo.ca/vancouver-real-estate/2006-whyte-avenue

#84 TRON on 01.12.18 at 8:48 pm

yikes 5.1% looks like this in downtown Vancouver, 28 yo, 1100 sq foot, 2 bed condo…

20% down – $250k$
monthly payment – $6,600 taxes and fees in.
Annual income to qualify – $236k

Weather…it’s been raining since the first week of November non stop. But hey everybody says we’re like Manhattan and San Francisco and everyone wants to move here. The counter top, LOC vacationing every year crowd is beginning to get nervous.

#85 DON on 01.12.18 at 8:56 pm

#27 SimVan

Give the baby your room and sleep in the living room and don’t stress – your lives are about to change. Babies need love not space – hang out and wait.

#86 domain on 01.12.18 at 9:00 pm

HUI broke above its 200DMA, finished a nice re-test and appears to be off with a bullish confirmation.

If this holds, expect the gold market to give you another performance like the first half of 2016. The bull market continues in gold, and I’m squarely positioned for the miners again.

Its time for a rotation from risk.

#87 LivinLarge on 01.12.18 at 9:02 pm

“Had a friend tell me the other day that rates cant go up as too many people will be in trouble if they do.”…don’t listen to your friend, maybe ever again about financial matters.

The banks may “care” but well, since when have banks been alruistic friends, conerned in the least about you? Yea, never. They are businesses and they hold the lien on your home…period, end of that fact.

The government ? See above. The govenment isn’t really in the business of covering home owners butts. As long as governments get their funding via taxes on income and consumtion and not on our peace of mind then you or me losing our home is totally irrelevant to them. Now, they are concerned with folks being unemployed because that lowers tax revenues but whether you pay rent and the landlord pays yhe taxes or you own and you pay the taxes, the taxes get paid. And since residential tax revenue is pretty much provincial and municipal, the feds aren’t terribly concerned at all, their getting their pounds of flesh from payroll deduction of taxes and point of sale consumption taxes.

Beyond above philosophical arguments against raising interest rates is the fundamental reality is that BOC rates and federal bonds are connected like siamese twins and also totally unconnected to whether you or I are “hurting”. History has shown us that as recently as thd mid to late 1970s mortgage rates hit mid double digits. They’ve been there in recent memory so they can very well go there again. Will they? Damned if I know.

So? The lender get’s their money first. The lender gets their money to lend at a cost unrelated to the borrower’s personal feelings and the rates the lenders get those dollars is unrelated to even their level of pain too. When long term bonds increase at the BoC then the cost of money to the lender goes up and the borrower pays more. Hurt has nothing at all to do with it.

Listen to Fearless Leader and not your friend. He was the minister in charge of federal revenue collection, he knows the reality and where the bodies are burried.

Until the US Fed stop raising rates, Canadian rates aren’t abating. The ONLY question is when. Thenhow much is still largely at the whim of the Fed. Canadian bonds have to be competitive with the US or the big money flows south not north and the BoC have to raise rates to keep our long term bonds fully sold.

#88 InvestorsFriend on 01.12.18 at 9:08 pm

Why are FAKE Mortgage rates allowed and condoned?

I have a bit of a rant here. Am I wrong on what I say here?

The big banks have for years and years had posted 5 year rates that were FAR higher than the actual rates they offered to virtually anyone.

What are rates that are posted but not really used if not FAKE?

They did this partly or entirely in order to use the higher FAKE rates in calculating high interest rate differentials when people were paying off a five year rate early.

It went something like this:

You took out a five year fixed at 3.0%. At year three, with your house having doubled in value, you read this fine blog (transparent suck up) and decided to sell and rent to lock in that huge tax-free gain. The bank would not let you just pay off the mortgage because then they would be out two more years of interest at 3.0%. And if they re-loaned that money the going two year rate was say 1.6%. In that scenario the bank is out a net 1.4% for the two years.

Let’s say the balance was $300k. A logical and fair interest differential would be the missing 1.4% times two years times $300k equals $8,400.

Now, perhaps in fairness the interest differential should be the 3.0% less whatever the bank was paying on the deposits (say 1.0%) that funded that five year mortgage, so perhaps more like a loss of 2.0% so $12,000 penalty.

But using the posted five year rate of 5.0% the bank calculates it is out a net of more like 5 minus 1.6 = 3.4% and calculates an interest differential of more like $20,400. Or did they do posted minus what they paid on deposits and get more like a loss of 4.0% for two years for a penalty of $24,000?

They got away with this because it was in the contract and when looking for a mortgage customers looked at the actual rate and shopped for the lowest but paid little attention to arcane interest rate differential formulas and perhaps trusted it would be fair.

Someone in banking can tell me if this is exactly how it worked or not but it was something like the above. The Website ratespy described a feature of that great BMO 10 year that Garth alerted people to last week as:

“This is where BMO’s Smart Fixed differs. Its posted rate is quite reasonable at 4.14%. Compare that to the average 6.10% big bank posted rate.

That results in a lower IRD charge because your discount from the posted rate is less. Assuming rates didn’t drop significantly over the next five years, the most you’d likely pay to break BMO’s 10-year is three months’ interest.”

https://www.ratespy.com/bmos-10-year-fixed-12225339

My point being the interest rate differentials calculated by the all the big banks for years and years has been unfair and made no sense mathematically. There is no possible rational reason to include a higher 5 year posted rate in an interest differential.

As far as I can see. the posted rates were completely FAKE and used mostly to gouge on interest rate differentials.

Where were the bank and consumer regulators and in fact the entire financial press and all the lawyers that allowed this to happen?

And now the Bank of Canada is using those FAKE posted rates in their stress test. It makes no sense. It should be based on the ACTUAL rate paid plus say that 2%. That’s fine. But why use these FAKE posted rates?

Again, I say they are FAKE because they were not the real price.

When Sears advertised 75% off a FAKE inflated matress price they that they never charge they got in trouble, But not the banks. Why?

#89 Old gringo on 01.12.18 at 9:21 pm

Still not sure why you all defend Toronto and Vancouver!
They are overpriced smelly armpits of humanity and nothing less.
I and many thousands of others, left this years ago knowing it would not change.
Shame on you for whining now and expecting different results!
If you have any chance of leaving, take it and run.
If not, live with your choices

#90 Nick on 01.12.18 at 9:28 pm

I don’t think the bull market in US bonds is done yet. When you look at the finances of US cities (Chicago, Dallas, etc.), states (Cali) and the federal government, they can’t afford anything close to average long term rates. Take Ontario for example, it’s finances are worse than California who most consider the bottom of the barrel. I believe over the next 12 months all the expected future interest rate increases will disappear. Especially if we hit a recession which is overdue, it’s just the normal business cycle and it doesn’t end thanks to central bank intervention. It will be fun to watch either way. I’m rooting for your prediction. I’m long cash waiting to an opportunity to buy into my current home town of Canmore which is not well priced for locals. Similar to Calgary pricing with a population of 16,000.

#91 Leo Trollstoy on 01.12.18 at 9:28 pm

#38 Technical analysis? on 01.12.18 at 6:38 pm
So… with all this great news in Trumpland, why is the USD collapsing?

Cuz the Canadian economy is gangbusters bro!

I love it here. Plentiful jobs. Stable government. Booming economy. Vibrant tech scene. Canada is the shiznit!

#92 Lost...but not leased on 01.12.18 at 9:29 pm

There is ZERO need to increase the minimum wage..applicable to those seeking public office.

the converse is to limit:
(i) terms of elected office
(ii) their PEN$ION$
(iii) the revolving door between Private/Public sector

and…
….drum roll….

……. NO Lawyers need apply.

#93 toronto1 on 01.12.18 at 9:30 pm

#73 and #80 Secret code

normally i would agree that it takes 6 months of inventory for desperate to capitulate but in the GTA, there is lots of ghost or shadow inventory in the pipeline- stuff that was listed since May- relisted July, pulled of the market in Nov-Dec will start to go up en masse shortly

the speculators will bail at the first sign of interest rate hikes, my guess is that after the 2nd interest rate hike is when the action starts………

this will be the first time that many home buyers experience a rising interest rate cycle.

#94 Newcomer on 01.12.18 at 9:32 pm

I lost the link to the stats, so I can’t prove it, but YVR listings are basically the lowest they have been since, like, 1946. The metro region currently has 6886 listings. For comparison, at this time in 2013 we had 13K and the high-water mark is around 20K. This is the opposite of a flood of listings. Everyone is sitting on their hands.

I’m not saying that this will last, but I think it is pretty typical of the way people here think about prices. I know a woman who bought for 300K and, ten years later, wanted to list at 1.6M. The realtor told her she would not get more than 1.4 and so she decided not to list. “After all,” she told me, “it’s my money.”

#95 Arto on 01.12.18 at 9:34 pm

DELETED

#96 and the budget will balance itslef on 01.12.18 at 9:37 pm

is PFF the USD equivalent of CPD?
how come it hasnt risen ?

#97 conan on 01.12.18 at 9:37 pm

“So… with all this great news in Trumpland, why is the USD collapsing?” – Tech A

Just a guess, his new tax plan is really just an extra 1.5 trillion in deficits. So more dollars printed representing nothing, gets divided in to the big pile of something , and the result is a watered down dollar.

Even with a fiat currency, if it does not balance out then it has to be added to the ” we fucked up drawer. Eventually that drawer turns into a Weimar Republic clone. We are just getting a mild taste of that. There is a cost to Q.E., it is not free.

#98 For those about to flop... on 01.12.18 at 9:39 pm

Pink Snow falling in Vancouver.

Here’s another one that lost its mind during Spring Fling 2016

On the hook for 2.88 ,that won’t even cover expenses at current ask.

As for the actual product?

This house feel out of the Ugly Tree and hit every branch on the way down…

M43BC

4213 w 14th ave, Vancouver. Paid 2.88 Feb 2016

On 3.07

https://www.zolo.ca/vancouver-real-estate/4213-w-14th-avenue

#99 Fake News Again on 01.12.18 at 9:53 pm

DELETED

#100 When Will They Raise Rates? on 01.12.18 at 9:59 pm

#81 Buy The Dip on 01.12.18 at 8:29 pm
Did you buy the Dip in crypto?
———-

Yes. Kind of.

Been trading the BTC/USDT pair ever since the correction began. Sold a bunch at 18, picked up some 11’s… been playing the swings ever since. Literally doubled my BTC holdings over the past month, not including my core position in cold storage.

The volatility is a gift. No wonder Golman Sachs is setting up a crypto trading desk. So much easy money being made!

#101 Lost...but not leased on 01.12.18 at 10:02 pm

To: Flop

Great info on SFH

However…(and just moi’s opinion)..it is clear that SFH market is tanking….it becomes redundant after a while.

May suggest a collective “greater good” is to perhaps expose the multi-family market(aka condos, apartments, townhomes) certified “floppers”…… so that these potential RE victims at least have some sober /cognitive/ rational advise to mentally masticate over.

aka SFH news is becoming so passe’…..thus the logic dictates analysis of the other crutch in the RE balloon, ie non- SFH.

#102 For those about to flop... on 01.12.18 at 10:03 pm

Pink Snow falling in Vancouver.

Welcome to Friday night Heavy Hitters,Westside Edition.

I’ll be your host for the night…DJ Flopper in the house.

Here’s another one in that aforementioned bracket.

These guys have a bit of wiggle room but if you run the numbers ,after expenses and opportunities lost then they will have enough for a $1.99 purchase on iTunes.

I hear they are huge Britney Spears fans,may I suggest…

Hit me baby,one more time…

M43BC

2418 w 18 Ave ,Vancouver . Paid 4.08 April 2016

On 4.58

https://www.zolo.ca/vancouver-real-estate/2418-w-18th-avenue

#103 Leo Trollstoy on 01.12.18 at 10:04 pm

anti-Trump he-said-she-said drama makes me laugh

Lawyers call this “heresay”

Lol

#104 KLNR on 01.12.18 at 10:07 pm

@#43 acdel on 01.12.18 at 6:53 pm
Good post Garth, 2018 will finally dispel many of the b.s. games out there. A re-balance is needed and hopefully not too many suffer of it, but it is much needed!

————————————————————-

if housing depreciates as much as some here would like it to, we’ll all be in trouble. Not just over leveraged home owners.

#105 Wrk.dover on 01.12.18 at 10:08 pm

Fluff piece on ATV supper news (CTV Atlantic) Real Estate seller of highest end properties, said 1% of Nova Scotians can afford a million dollar home! Moved 44 last year, 42 year before. 95 listed now. Gotta love it here!

#106 For those about to flop... on 01.12.18 at 10:21 pm

Lost ..but not leased on 01.12.18 at 10:02 pm
To: Flop

Great info on SFH

However…(and just moi’s opinion)..it is clear that SFH market is tanking….it becomes redundant after a while.

May suggest a collective “greater good” is to perhaps expose the multi-family market(aka condos, apartments, townhomes) certified “floppers”…… so that these potential RE victims at least have some sober /cognitive/ rational advise to mentally masticate over.

aka SFH news is becoming so passe’…..thus the logic dictates analysis of the other crutch in the RE balloon, ie non- SFH.

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

Hey Lost ,below is a townhome in Surrey that is in trouble that I wrote a post on in the previous thread…

M43BC

$$$$$$$$$$$$$$$$$$$$$$$$$$$$

Pink. Snow falling in Surrey.

Here is a more affordable option that I have featured a couple of times still struggling.

They had it off the market for a few days and so I checked in to see if it was sold ,but all they did is take another 11k off and put it back up all shiny and new.

This practice in my opinion should be banned.

The selling price history should be free from manipulation,if the seller wants to play games then fair enough,but it should be there for all to see.

I will detail this one for them.

Originally asking 948 then 918 then 899 ,now asking 888k

Staring a loss in the face after massively overpaying at 897k

2016 assessment 662k

2017 assessment 781k

And so the 2017 assessment came up to bridge the gap a little ,but the Fraser River still runs through it…

M43BC

16 16261 23a Avenue, Surrey paid 897 ass662 TOWN HOUSE was asking 899 now 888

Jul 8:$948,000
Oct 8: $918,000
Change: – 30000.00 -3%

https://www.zolo.ca/surrey-real-estate/16261-23a-avenue/16

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

#107 akashic record on 01.12.18 at 10:30 pm

Mainstream info is the present. You don’t have to waste much time on it. You are living it already, you feel it. Water under the bridge. 6% return, the closest instrument to GIC.

Fringe is what’s interesting. It’s a wide-open window at the competing potential future timelines. Nothing is certain – everything is possible. BTC is twenty bucks. You can make a bet which timeline to manifest into present.

#108 steph on 01.12.18 at 10:30 pm

I like the “I’m stupid” guy.
At least he knows something.

#109 dr. talc on 01.12.18 at 10:33 pm

#88 InvestorsFriend on 01.12.18 at 9:08 pm
Why are FAKE Mortgage rates allowed and condoned?

Agreed
everyone in the ‘system’ thinks the same
you wouldn’t last a day as a bank employee
‘friendly fire’ is not a type of accident
it’s a type of execution of soldiers who wake up.
corporate, military, government, religion, banking:
everyone thinks the same

#110 mathman on 01.12.18 at 10:38 pm

Correct about the shadow inventory – all the stuff listed and pulled in the fall will be coming back in a few weeks on top of all the panic and forced sellers.

rates on unsecured debt moving up hits folks in the pocket books right away, as in the next months payment. Watch as cash flow becomes tighter how quickly folks dump the “investment properties”, cottages etc. People will sell everything before defaulting on their principal residence – everything else is up for bids, which will make things interesting. For those that own investment properties on heloc’s – your costs have and will continue to go up – you are probably already cash flow negative so at some point you with throw in the towel.

People are dead wrong about B20 juicing the condo market, maybe in a vacuum but rising rates change the economics of buying a condo to rent and we will see a flood of listings in the GTA.

Stay Liquid – wait till June at the very least, this spring is the true test.

Math

#111 isuckless on 01.12.18 at 10:40 pm

POTUS Lyndon Johnson to the Greek Ambassador 1965:
“Fu*k your parliament and your constitution. America is an elephant. Cyprus is a flea. Greece is a flea. If these two fellows continue itching the elephant, they may just get whacked by the elephant’s trunk, whacked good.”

POTUS Barack Obama to UK PM in 2016:
http://www.independent.co.uk/news/uk/politics/barack-obama-says-david-cameron-allowed-libya-to-become-a-s-show-a6923976.html

#112 akashic record on 01.12.18 at 10:40 pm

#100 When Will They Raise Rates?

Been trading the BTC/USDT pair ever since the correction began. Sold a bunch at 18, picked up some 11’s… been playing the swings ever since. Literally doubled my BTC holdings over the past month, not including my core position in cold storage.

The volatility is a gift.

Indeed. Volatility is a gift.
Comparable to TFSA.

#113 CANADA IS A SHITHOLE COUNTRY on 01.12.18 at 10:40 pm

When real estate crashes, very soon IMHO, Canadians will further realize what idiots their neighbours really are.

Canada: You haven’t even won a Stanley Cup in 25 years!

#114 paulo on 01.12.18 at 10:41 pm

well the latest scuttlebutt in the Barrie area is that purchasers are having a devil of a time getting financing plenty of deals crashing on the subject to financing clause.
prices are slowly droping in a sticky market that has stalled since the influx of Toronto ex pats that where smart enough to cash in has apparently started to dry up
even the low end listings are having a hard time finding love. interesting times i think the spring market will be one to remember by the time its over for the wrong reasons.
overall prices are off there highs and slipping daily.

#115 For those about to flop... on 01.12.18 at 10:42 pm

Pink Snow falling in Vancouver.

O.k so one of my faithful followers has fallen off the wagon, but let’s continue with Heavy Hitters Westside Edition.

These guys are in line to take a half million dollar loss in the blink of an eye and could easily lose more.

They paid 5.7 in April 2016 and there is much nicer products at a much lower prices.

What does it feel like to lose a half million dollars you ask?

Does it sting?

No ,it Cedarhurst…

M43BC

6250 Cedarhurst St. Paid 5.7 April 2016 were asking 6.38

On 5.98

https://www.zolo.ca/vancouver-real-estate/6250-cedarhurst-street

#116 DON on 01.12.18 at 10:44 pm

Andrew W

That Victoria commute from downtown to Langford 16km is not an extra 20 minutes on a bad day. It is average 1 hr to 1.5 on an average day depending on what time you leave during rush hour. One accident and it becomes an extra 30 mins. Not the 80s anymore and it will take another 1.5 years to do improvements.

As fast as retirees are coming to the island they are leaving. The ripple will hit the island last but it will hit. Lots of people on this island over bought, or over paid. You are in the ritzy part of nanaimo. Has it stopped raining there yet?

#117 mathman on 01.12.18 at 10:44 pm

Post about space for the kids earlier – some people drink the Kool-Aid and buy everything imaginable for their kids – their homes look like Toy r Us threw up after black Friday.

Stroller, car seat, crib essentials – everything else you can make, buy used and or inherit.

This is a an example of the hyper consumption that has lead to the state of the world in Canada(GTA and YVR especially) – where everyone with pulse feels they are entitled to a million dollar house and a two luxury vehicles in the driveway.

Math

#118 Bottoms_Up on 01.12.18 at 10:45 pm

#82 dgb on 01.12.18 at 8:34 pm
———————
To be fair you don’t need a crib or stroller either…or a car, or indoor plumbing. But some things make life a whole heck of a lot easier, and that can include items such as a change table, jolly jumper and baby swing. Mic drop

#119 For those about to flop... on 01.12.18 at 10:57 pm

Pink Snow falling in Vancouver.

O.k. so there is heavy hitters and then there are whales.

This one is a whale.

Picked up for 11.38 in January 2016 even if it sells anywhere near this price it will distort the whole bracket for a while like what happened when some whales cashed out in the summer.

Asking 12.38 ,you know that doesn’t cover expenses and opportunities lost.

You also know how I’m gonna end this post.

It is a nightmare on Elm street…

M43BC

6349 Elm st, Vancouver.Paid 11.38 January 2016

On 12.38

https://www.zolo.ca/vancouver-real-estate/6349-elm-street

#120 Bob Loblaw on 01.12.18 at 11:04 pm

#47 periscope

B20 came into effect 12 days ago. At least wait for one month of data…

#121 AB Boxster on 01.12.18 at 11:07 pm

Yes the shock of it.

A president using a expletive in a private conversation.
Golly, that’s never been done before.

If fact when Hilly lost the US election she was heard to say:
‘My oh my. That darn Donald sure pulled a fast one over on me.’

Ever listen to the watergate tapes? Nixon was pretty colorful.
(note to all leftist idiots, that’s not a reference to race)

And of course when Obama was president there was no way he would ever use a swearish type word. Nuh uh.
He didn’t even inhale, right?

What Obama would have said is:
“There is no doubt, that there are some countries in the world, who hold human rights in low esteem, where there is no rule of law, and where human rights are routinely abused. We in America will strive to uphold the values we all love and cherish, in the hope that we might make a better world for our children, and our children’s children. If we continue to strive for hope and change, the world can become a better place. Yes we can!”

And what Trump said is that ‘there are some countries in the world that are real shitholes.”

Same diff.
Personnaly I like Trump’s version.

Less bullshit.
Gets the point across in fewer words.

In trying to polish this, you get some on you. Vulgarity was not the point. – Garth

#122 For those about to flop... on 01.12.18 at 11:09 pm

Pink Snow falling in Vancouver.

Well boss ,it’s been a pleasure to play Blog Tennis with you tonight.

I will leave you with one more.

Paid 4.85 in April 2016 and asking 5.18

See you and Robax tomorrow…

M43BC

1122 w 27ave Vancouver. Paid 4.85 April 2016

On 5.18

https://www.zolo.ca/vancouver-real-estate/1122-w-27th-avenue

#123 Blackdog on 01.12.18 at 11:19 pm

@#113 CANADA IS A SHITHOLE COUNTRY re: “When real estate crashes, very soon IMHO, Canadians will further realize what idiots their neighbours really are.
Canada: You haven’t even won a Stanley Cup in 25 years! ”

How is a Canadian housing crash going to make Canadians further realize what we already know about our southern neighbour with the idiot president? :)

#124 45north on 01.12.18 at 11:22 pm

Secret Code: was 2008 a head fake? is this going to be the mother of all real estate corrections?

If interest rates are are going up, and the discount pops above the 2010 level – then buckle up. Everything is in line for one big mother of a plunk where we will really find out how bad the debt disease is in Canada.

that is my feeling. Interest rates are decided in the US. From 2008 to now, Canada has had a free ride. B20 was done hand-in-glove with the banks:

Just listen to Dave McKay, who happens to be in charge of the Royal Bank: “We need some of this policy change, particularly the B-20 change, as we are in a highly stimulative monetary policy environment. We needed to layer on some type of policy change; now that the Bank of Canada feels more comfortable raising rates, that’s supposed to be the brake on the economy that we all like to see.”

And if Secret Code starts getting a no from the credit unions and told that there is less in the lending kitty – it’s on baby!

then it’s on

#125 Andrewt on 01.12.18 at 11:23 pm

#69 Robert B on 01.12.18 at 8:08 pm
#52 …I trust that is sarcasm. – Garth

I never intended it to be sarcastic .

There have been many media posts that have turned out to be false. This may be done for for financial gain or character assassination. In Trump’s case the latter.

My point is that “we” hear news everyday but I think we have to take some of it with a grain of salt.

Participants in the room reported it. Seems reliable. – Garth

—-
Specifically, Senators Lindsey Graham (R) and Rick Durbin (D) along with Sen. Tom Cotton (R) and Rep. Bob Goodlatte (R) who were all in the meeting.

#126 millmech on 01.12.18 at 11:34 pm

#93
I wonder how many people who will try to get out in a rising interest rate environment are aware of how the interest rate differential is calculated. The higher and faster the rate rises the bigger the IRD

#127 LivinLarge on 01.12.18 at 11:42 pm

“What are rates that are posted but not really used if not FAKE?” Seriously IF, are you really naive? Or are you just playing with words like “Fake Rates” because it feel cool to?

It’s called “marketing” and it’s exactly what a car salesman uses about a trade in value to get you off the lot and into their office where they can “work” you. Their “manager” appraises the trade in value only after a signed offer to purchase is presented. They don’t want you to have the real value of the trade until you are on the hook and they certainly don’t want you going down the street with a real value of their trade.

Posted rates maybe should come with a disclaimer that says something like: “The maximum we will charge you if we actually want your business after checking your credit worthiness” but that wouldn’t attract many new mortgage customers would it?

So are the posted rates “Fake”, hell no. Just a starting point in a process that the bank branch want to control all aspects of.

One thing you appear not to be aware of is that every consumer mortgage is “owned” by a branch unless it is maybe a staff mortgage. Even if approved or negotiated by a nice person from their regional credit underwriting office, a branch holds the mortgage on their books as a liability and they even pay a premium back to the regional office for the right to have that liability on their books. This is why we can almost always get a better rate by actually going into the branch and always a better rate if we use a broker. Twice I have used a broker and beaten the regional renewal offices’s “best rate” and still never moved my mortgage one foot from the branch. AND the broker was paid a commission on top of me getting a better rate. Once it was .5% saving and once a full 1.0%.

So? If you go to buy a fridge you don’t have to pay full msrp unless you want to and when you go to buy a mortgage you don’t have to either but it’s a hell of a lot easier for the bank or the appliance salesman to close a deal of any kind when they have you in the chair with your coat off and that max rate is the starting point to get your butt in the chair and your coat on the rack.

Why do you think you have to make an appointment at least 3 days in the future if dealing at a branch yet the renewal office call call you at 7 PM and can make a deal in 5 minutes including a smoke break? Because banks are lending businesses and they have studied what it takes to get “the sale”. No branch lending official is even remotely so busy that they need 3 days to find time to sit down with you. It’s the “process” that gives them the contol of the process.

#128 ozy - rents will DOUBLE in 3 years on 01.12.18 at 11:47 pm

Market has indeed become illiquid, blame the pumpers (central bank and federal govt, childish financing policies of 2009). The $15 dollars minimum wage is bringing 500000 new immigrants to Ontario. Ask CBSA on the recent spike. Perfect storm, but great for LANDLORDS.
1 bedroom apartment rents will effectively DOUBLE in only 3 years. Question: Are you basement dwellers willing to pay 10% more rent for a caring Landlord to take on the capital expense of installing supplementary in-ground heating so you don’t get sick?

#129 DON on 01.12.18 at 11:55 pm

KLNR – did you follow the US and other bubbles are you following Australia? Irrational on the way up…..equal and opposite reaction on the way down. Mileage will be different for everybody. Hang over will be a bitch but my credit and stress level will be in act. Stress kills…it compounds things. I will not be sharing the pain…..stress free, loving the freedom.

#130 re., 113 on 01.12.18 at 11:55 pm

Canada: You haven’t even won a Stanley Cup in 25 years!

……

lol, not a problem. Most of the players hoisting the Cup are Canadian.

Won the World Jr’s, , won the World Cup of hockey and won the last 2 Olympic Hockey……winning too much?

btw, you sound angry… bet I can guess which country you’re from..:)

#131 S.Bby on 01.13.18 at 12:11 am

#88 InvestorsFriend

“When Sears advertised 75% off a FAKE inflated matress price they that they never charge they got in trouble, But not the banks. Why?”

Maybe not Sears, but The Bay sure did.

#132 NiceBeach on 01.13.18 at 12:20 am

#28 Guy in Calgary
In over-inflated markets like Vancouver, if you invest the difference between renting and owning you would come ahead eventually. Many recent owners cannot invest because they overstretched their housing budget.

At some places it does make sense to buy and I would buy the minimum amount of housing that I need and invest the rest, will never move up unless I absolutely need to. The stock market is rough, but it pays off.

#133 Me again - How to BYPASS Communist Rent Controls on 01.13.18 at 12:23 am

I bet you were wondering what Ontario LANDLORDS can do to BYPASS Communist Rent Controls before they are found unconstitutional?

If a fair market value rent is $2000 today you do not want to end-up subsidizing the tenants while the GOVT is creating a 10% year after year after year inflation. What if you were to find a tenant willing to Pay $2400 and you reduce rent with $100 per month as a loyalty bonus, so second year they pay $2300, then$2200, then $2100, then $2000 in the fifth year? If they want to stay more, the new rent is $2500 flat. Protects you against subsidizing the tenant for 5 years. You pray the supreme court strikes the communist act or communists are exposed and lose power in the meantime. The province will be a disaster financially anyway by then. SAVE YOURSELF SO AT LEAST YOU CAN HELP OTHERS WITHOUT ASKING OTHERS TO PAY :)

#134 Fuzzy Camel on 01.13.18 at 12:37 am

Stock market is being fed with fresh money coming home from overseas. Good old double Irish helped the big US corps dodge the tax man.

Thanks to Trumpo that money’s coming home, and into the stock market as share buy backs.

DOW 50000+, yuuuge inflation coming, Fed will get twitchy at some point and hike aggressively.

Welcome to the next financial crisis once those rates pop above 3%. Read Adam Posen’s article, you know, the superstar banker. Smart guy.

Oh, take Garth’s advice, don’t buy a house right now.

Interest rates are going up, Alan Greenspan said about 5 months ago “When rates begin rise, they will rise rather rapidly”.

#135 ShawnDesman on 01.13.18 at 12:44 am

I think Canada is going to revisit the Chretien years with a subpar business climate – high taxes, deficits, and a currency that will likely decline into the 0.60-0.70$ USD. The US is clearly going in the opposite direction re: business friendly while Canada is penalizing entrepreneurs and businesses. I already know 3 Canadian corporations who are moving to the US in the coming year.

#136 Deplorable Dude on 01.13.18 at 12:46 am

R.e. The shi*hole comment.

Fake news. Trump denies it. 2 Senators (Cotton & Purdue) in the room at the time also issued a statement confirming he didn’t say it.

It was Dem smear because Trump rejected their DACA proposal.

Just add it to the long list of other garbage news that becomes accepted as true.

Meanwhile the biggest political story since Emperor Caesar’s assassination is slowly picking up steam in the
Msm.

The WSJ no less…..

http://www.cetusnews.com/business/The-Dossier-Rehab-Campaign.rkpr6O84f.html

Gonna come to a head nicely around the Primaries in Nov.

#137 Lost...but not leased on 01.13.18 at 1:13 am

QUESTION:

It appears the Big Banks are into survival mode re: lending practices for mortgages.

It appears that the credit unions are picking up the slack.

THUS..what happens to credit unions if and when SHTF on their mortgages…who or what covers their losses ?

#138 for flop on 01.13.18 at 1:17 am

#140 For those about to flop… on 01.12.18 at 1:14 am
Recent Sale Report./Realtor Assistance Needed.

This house sold on December 5th 2017.

They paid 4.36 in July 2016 when at the time it was assessed 4.09

Fast forward to now and the latest assessment came in at 3.84 and these guys were asking 4.65 to try and cover most of their costs.

So by now you realtors know how the dance goes.

You can tell us now what they got for it or I will wait three months until the database gets updated and report it.

Book it…

M43BC

https://www.zolo.ca/vancouver-real-estate/1324-w-58th-avenue

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

bugged a friend for this:

sold for 4.36M

#139 Dee on 01.13.18 at 1:49 am

If rates go up, then stress test will disappear… just watch. They will not ruin the gasbag… just deflate it a little. Just watch…

The bank regulator cares about the banks’ stability and health, not the Vancouver real estate market. Just watch. – Garth

—————————————————

I was thinking this too. It’s entirely possible for osfi to be flexible with the 2% if rates keep climbing. Regardless ppl will be paying more interest or/and have to qualify for more.

Also, anyone pay attention to blogto? Absolute biggest re pumpers out there. Posts on a daily about hot listings, sales and so on. Im guessing dollars from industry people want blogto to pump the sector and pretend everything is great.

#140 AB Boxster on 01.13.18 at 2:04 am

In trying to polish this, you get some on you. Vulgarity was not the point. – Garth

—————-
Not trying to polish at all.

Trump can be a vulgar man, who speaks in these terms.

If you are conflating vulgar references to actual racism, then I disagree.
Everything is racist all the time in the brave new pc world.

I lived in the time where real social and systemic racism existed in the western world. It does still exist in some minds.

But today’s pc world is far different.
In todays’s brave new world I am by definition a racist just for being a white. And sexist just for being a man.

It matters not that I have never expressed any racist or sexist actions or comments to anyone, preferring to judge people by their character than their sex or race.

Real racism is something to be challenged.
Pretend and made up media defined racism is something to be ignored and ridiculed.

I don’t believe that Trump is a racist.
But then I don’t subscribe to the pc sjw movement of identity politics and victimhood hierarchies either.

#141 LivinLarge on 01.13.18 at 3:10 am

Vince: “I spoke with a CIBC mortgage advisor. Showed me a page on how to maximize my buying power by synthetically creating a 25 year mortgage to beat the stress test. Step one: qualify at 35 year amortization, step 2: set up an automatic payment plan to enhance principal payments to make the 35 year amortization equal the 25 year. Step 3: accelerate cash availability with an additional HELOC product that gives immediate access to any principal paid on the home.” Sorry for reposting such a chunk of text but I had to in order to get to the point.

I haven’t run the numbers in years but I used to do exactly this scenario for people to show them how to save interest and pay off principal more quickly.

I’m not certain it works so well now unless you have a totally open mortgage that you have a written option to pay any amount over your regular payment any time yoy wish. My last two mortgages didn’t allow much in the way of prepayment and especially any regular prepayment. Maybe 1 or 2 payments per year totaling no more than the original principal.
T
The plan works but it requires incredible discipline not to go any deeper into debt than the day you took out the longer term mortgage and VERY few people have shown the disciple to do that. Otherwise you start missing the extra payments or shorting them…and still you need a very friendly lender to give you a totally open mortgage and that is what HELOCs are intended to be not a 1st mortgage.

So, also getting the HELOC in step 3 is rather like cutting yourself until you have enough cuts to bleed to death.

Eliminating step 3, getting a totally open mortgage and being more disciplined than 95% of folks are any this works on paper but that’s it.

Oh, and fully open 1sts usually come with an interest rate premium to keep you from cutting into the banks interest.

I can’t count how many people I have known who swore up and down that they could save hundreds each month to put down at the anniversary date and just never did. I never took a term longer than 3 years so I could save and do this but it rarely worked out that I wanted to part with the savings when time came.

You may be different but still, beware. If you don’t follow through religiously with this plan the you have a 35 year front loaded mortgage and something like 95%+ goes to interest and you’ll end up paying a lot more interest in the end.

Great deal for the lender knowing human nature but almost always a terrible deal for the borrower.

#142 FOUR FINGERS WATSON on 01.13.18 at 3:43 am

#29 VanMan on 01.12.18 at 6:20 pm
If rates go up, then stress test will disappear… just watch. They will not ruin the gasbag… just deflate it a little. Just watch…

The bank regulator cares about the banks’ stability and health, not the Vancouver real estate market. Just watch. – Garth
………………………

I’m with VanMan. B20 was created with the stroke of a pen and it can be gone just as fast.

#143 When Will They Raise Rates? on 01.13.18 at 3:44 am

#112 akashic record on 01.12.18 at 10:40 pm
#100 When Will They Raise Rates?

Been trading the BTC/USDT pair ever since the correction began. Sold a bunch at 18, picked up some 11’s… been playing the swings ever since. Literally doubled my BTC holdings over the past month, not including my core position in cold storage.

The volatility is a gift.

Indeed. Volatility is a gift.
Comparable to TFSA.

———–

Yup. Now just praying my sub 9000 orders get filled.

#144 maxx on 01.13.18 at 5:21 am

#1 Mike on 01.12.18 at 5:16 pm

“Rates can go to 8%, but GVA real estate will never be at 2014 levels.

This is Kanada, and within Kanada it is Vancouver.

Rates, B20, etc doesn’t matter.

Keep renting readers, while people doubled their money.”

Here’s the thing: Gobs of owners are stuck far more than they have yet to realize, but many have already doubled (or more) their money and are renting. That makes them superlative winners relative to the 8%………

Tragically resolute, hanger-oners may get 8% on an indeterminate, steadily declining sticker price.

Sticker shock works both ways………..down, down, down she goes………potential buyers who don’t like the look of the sticker can simply walk away with their money – owners, not so much.

#145 Under the radar on 01.13.18 at 5:28 am

103- when a person says he heard trump utter profane words, ( Sen Durban) that is direct evidence not heresay. If person A said person B told me what trump said -that is heresay.

On the topic of real estate, GTA market is caught in January doldrums and rising rates, market is dead. I am not yet persuaded that behind every new spring listing lies a desperate seller. I do not envy those that must sell.

#146 maxx on 01.13.18 at 5:53 am

#8 Screwed Canadian Millenial on 01.12.18 at 5:37 pm

“I can’t believe anyone is still bullish about the US. They are in deep sh*t. Long time conservative icon of compassion and warm heartedness, Dick Cheney, famously said “Reagan proved deficits don’t matter”. Turns out deficits do matter.

I told you boomers to get out of the USD. CAD/USD might get to 90 cents this year but CAD isn’t a good choice either. There are better options.

You’ve been warned.

You just hit your quota for today. – Garth”

Worst case of bulimia rhetorica on this blog…..can’t shake the feeling that its on some payroll with an agenda…….

#147 maxx on 01.13.18 at 6:04 am

#12 Screwed Canadian Millenial on 01.12.18 at 5:44 pm

Cue the swinging pocket watch: “Look deep into your writing……..deeper……….”

Doh!! There it is! PROFITS……..

#148 maxx on 01.13.18 at 6:18 am

#19 Ronaldo on 01.12.18 at 6:00 pm

“We will soon discover how many specker realtors are holding multiple properties and subsidizing renters. I expect a flood of listings to hit the market in the spring.”

Oh, yes. I know at least a few who bought multiple properties at or near the peak to create retirement income streams. The streams could well end up “flowing the wrong way!”

@ 2:45 to 4:33, re “investors” being warned by savers/investors:

https://www.youtube.com/watch?v=reQpGJ2mtv0

#149 maxx on 01.13.18 at 6:32 am

#22 Stan Brooks on 01.12.18 at 6:10 pm

“You won’t recognize this country when I am done with it: Herr Harprer + the fancy socks idiot”

But…but…..what about “sunny ways”? Sniff…..:-(

#150 Gravy Train on 01.13.18 at 7:06 am

The temp. here in Halifax is 14 above (feels like 12 above), but in Toronto the temp. is 13 below (feels like 22 below).

Garth, why are house prices on average four times more expensive in Toronto than in Halifax? It’s certainly not on account of the weather! :)

#151 Ian on 01.13.18 at 7:22 am

US markets closed for MLK day Monday HOWEVER I believe the CME electronic contracts on gold and oil are open.

Tuesday could be a barnburner folks!! Can’t wait to see how the USD and gold resume.

#152 Steven Rowlandson on 01.13.18 at 7:24 am

“But this much is no longer in doubt: the bottom’s in the rear view. ”

Don’t be too sure about that Garth. Real estate is still absolutely un affordable. It has not even seen the bottom let alone hit bottom. Real estate will have hit bottom and become good value when I become a real estate owner for the first time in my life.

The bottom referenced rates. – Garth

#153 Mary Woljstki on 01.13.18 at 7:56 am

#52 …I trust that is sarcasm. – Garth

I never intended it to be sarcastic .

There have been many media posts that have turned out to be false. This may be done for for financial gain or character assassination. In Trump’s case the latter.

My point is that “we” hear news everyday but I think we have to take some of it with a grain of salt.

Participants in the room reported it. Seems reliable. – Garth
———
Not a Trump fan but Which participants? Sounds like “unnamed sources”.

#154 Mary Woljstki on 01.13.18 at 7:58 am

How much will Trudeau cut the TFSA contribution limits this year?

#155 Ian on 01.13.18 at 8:43 am

B-20 is not going away and it’s 13 Jan. Don’t you guys at least want to see it in action for at least two weeks before you proclaim it a non event?

It will be a MAJOR story this year. Millmech is right. Wait till you guys hear the mortgage horror stories this year.

#156 dharma bum on 01.13.18 at 8:52 am

#40 Donut

“…why does everything at Tim’s taste like donut – from grilled cheese to chilli?”
——————————————————————–

I’m sure that was a rhetorical question.

However, for the sake of the unenlightened, I’ll throw my 2 cents in:

The cheap toxic petroleum product that the donuts are cooked in is changed only every 2 weeks. The result is the lingering odour of stale grease that permeates everything in the vicinity.

But, hey, Tim’s is number one. Mmmmm good. It’s the Canadian way.

Sit daily in a drive thru line-up to grab crappy cuppa Timmy’s swill and a greasy donut for the long commute to a wage-slave job.

Like I said before, ain’t life grand?

#157 akashic record on 01.13.18 at 9:06 am

#121 AB Boxster

In trying to polish this, you get some on you. Vulgarity
was not the point. – Garth

——

Because you say so?

You have the opinion of one.
So does everyone else.
That’s all.

But my button is bigger than yours. And I’m, like, really smart. – Garth

#158 For those about to flop... on 01.13.18 at 9:09 am

at 1:17 am
#140 For those about to flop… on 01.12.18 at 1:14 am
Recent Sale Report./Realtor Assistance Needed.

This house sold on December 5th 2017.

They paid 4.36 in July 2016 when at the time it was assessed 4.09

Fast forward to now and the latest assessment came in at 3.84 and these guys were asking 4.65 to try and cover most of their costs.

So by now you realtors know how the dance goes.

You can tell us now what they got for it or I will wait three months until the database gets updated and report it.

Book it…

M43BC

https://www.zolo.ca/vancouver-real-estate/1324-w-58th-avenue

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

bugged a friend for this:

sold for 4.36M

$$$$$$$$$$$$$$$$$$$$$$

Thanks for doing this whoever you are,this is the second or third time you have helped me out,I appreciate it.

Let’s run the numbers…

1324 w 58th ave Vancouver

Paid 4.36 July 2016

Sold 4.36 December2017

And so if we keep it nice and simple and do 5% for expenses and 2% for opportunities lost then these guys lost over 300k on this deal.

Compared to the assessment they actually did pretty well getting that much but like a lot of people they simply overpaid in the first place and it cost them.

I will re-visit this case and put it up when it becomes CONFIRMED PINK SNOW…

M43BC

#159 TurnerNation on 01.13.18 at 9:45 am

On this weblog ‘Diversity’ means something other than single-malted.

Got Gold? Don’t know how or why but it’s the first shot firing across bow of Dow.

#160 When Will They Raise Rates? on 01.13.18 at 9:48 am

@139 AB Boxster

Yup.

“They” use it as a weapon to neuter any opposing views. It’s an old trick, and libtards collectively enable the tactic, not even realizing that they are useful idiots advancing an agenda not in anyone’s best interests, including their own. You see, individually, the libtard mind is incapable of critical thinking. They are drones, much like the Borg on Star Trek.

The level of brainwashing that they have allowed themselves to be subjected to is astounding. They parrot the views (no matter how outlandish) of their profs, the MSM, Hollywood, etc without asking basic questions.

I used to think that lefties are completely insane. Now I realize that it’s just brainwashing. Watch any MSM news outlet for 5 minutes and it becomes crystal clear.

#161 Bankish on 01.13.18 at 10:01 am

#88 InvestorsFriend

Please stop picking on my Canadian Banks as the stocks are only up 40% plus(with dividends) in 21 months and I’m hoping for a double in value in a 5 or 6 year time span. After that time I will be so set up you can proceed telling the truth but be gentle so as not to let the general public realize what money making machines they really are.

Your friend Bankish

#162 When Will They Raise Rates? on 01.13.18 at 10:36 am

CNN is having a field day:

https://m.youtube.com/watch?v=fW7k6A8G7UE

#163 Where's The Money Guido? on 01.13.18 at 10:41 am

Here’s some bedtime reading about BC and real estate….
+++++++++++++++++++++++++++++++++++++++++++++++++++
https://gangstersout.blogspot.ca/2018/01/david-ebys-speech-on-white-collar-crime.html
An excerpt:
Everyone is raving about BC’s new Attorney General’s recent speech on political corruption and white collar crime. Although I admit is clearly is a step forward, I will caution that is it only a baby step and if not followed up with two other crucial steps, it will represent one step forward two steps back. Everyone knows money laundering is a problem at BC’s casinos. This is nothing new.

When a RCMP task force on organized crime issued a report exposing that fact, the BC Liberals disbanded the RCMP task force. You want to know the truth? You cant handle the truth. BC Rail wasn’t just about laundering public assets at fire sale prices to campaign contributors like they did in Campbell Heights. It was about money laundering in real estate from drug trafficking. The RCMP know that. They are the ones that said we’ll drop the drug trafficking charges if you renew our contract. I kid you not. The criminal culpability in BC’s white collar crime runs deep.
Not unfrigginbelievable…..

#164 ANON on 01.13.18 at 10:45 am

Hard to make this stuff up? Rates going up faster than anyone imagined?
Only if you lack imagination . :)
There is no money, except in our minds.
Remember this? That was just the bear trap…now is for real.

#165 CANADA IS A SHITHOLE COUNTRY on 01.13.18 at 10:47 am

The airports across Canada are packed this month, with loser Canucks desperate to GET OUT of this unlivable country to get just a wee bit of warmth and enjoyment on a beach somewhere. Then they will come back in misery.

Most parts of your country have barely four weeks of nice weather a year. The rest is a mashup of too much rain, too much snow, too much wind, too many forest fires, not nice enough to stay outside etc….

And you really think you can sell your ridiculous shack to someone for hundreds of thousands more than you paid?!?

To live in the same shithole country you are desperately fleeing right now?

#166 crowdedelevatorfartz on 01.13.18 at 10:47 am

@#154 Ian.

Excellent comment

#167 Deano East on 01.13.18 at 11:05 am

#160 Bankish
Hey, I own 7 Canadian Banks and lots of other blue chip companies. However, I’ve learned to not be smug about it, be humble or you will eventually be humbled.

#168 AB Boxster on 01.13.18 at 11:22 am

#159 When Will They Raise Rates?

libtards collectively enable the tactic

———————————————–
The useful idiots on the left are the perpetrators as well as the enablers.

But the supposed intelligent conservatives on the right are about as bad.

While Wynne and her merry band of marxists enable some of the most socialist cultural and economic policies ever in Canada, so called conservatives like Patrick Brown are silent.

As Trudeau and his band of socialist losers virtue signal on climate change and drive class warfare through their tax policies, Andrew Scheer is silent.

The only person in this country that actually calls out the Marxist leaning politicians for their stupid social and economic policies is Jason Kenny and Brad Wall, just retired.

True conservatism in the political class in Canada, is mostly dead. They have been cowed into the belief that speaking truth to idiocy, and standing up for the ideals of common sense, individualism, free speech and capitalism, will alienate the electorate.

Canada needs its populist leader to take on these morons. It’s one of the reasons that Trump resonates with me.

Vulgur? Sure.
Overbearing and shoot his mouth off? Absolutely.

But he is the antithesis to the leftist morons (in media, education, and the arts) that believe that unlimited immigration is great for all societies (especially when its illegal), and that western society is the source of all evil in the world and needs to be brought down, that conservative thought needs to be censored and silenced, that your inherent worthiness is based upon the color of your skin, your sexual preference, and your position on the victimhood hierarchy, that ‘equality of outcome’ is more important than ‘equality of opportunity’, and that men can have monthly periods too.

As the proverb goes:

“The enemy of the my enemy is my friend”

Anyone who is against the stupid actions and policies of the marxist left, is a friend of mine.

#169 Bankish on 01.13.18 at 11:32 am

#166 Deano East
I am quite fond of InvestorsFriend and always enjoy his posts, contacts and comments, so my post is a fun poke at him. Also I have no control over anything that happens in the future to bank stocks. Just there for a (so far) great ride. Lighten up.

#170 conan on 01.13.18 at 11:35 am

Speaking of donuts, why does everything at Tims taste like donut – from grilled cheese to chili. – Doh-nut

I like their crispy chicken sandwich with the spicy sauce.
It has its own groove going on. The “new” apple fritter is good.

Other then that, for me anyway, down hill coffee, mysterious line ups, and slave class employees.

#171 Guy in Calgary on 01.13.18 at 11:38 am

“#132 NiceBeach on 01.13.18 at 12:20 am
#28 Guy in Calgary
In over-inflated markets like Vancouver, if you invest the difference between renting and owning you would come ahead eventually. Many recent owners cannot invest because they overstretched their housing budget.

At some places it does make sense to buy and I would buy the minimum amount of housing that I need and invest the rest, will never move up unless I absolutely need to. The stock market is rough, but it pays off.”

I agree in places like Van, but I also never questioned cities like Vancouver which are an anomaly. Meant more in the general sense. As I said previously, if you purchase within your means, you will likely come out on top.

#172 InvestorsFriend on 01.13.18 at 11:48 am

Banks Gouge on Interest rate Differentials

LivinLarge at 127 responded to my complaint at number 88 about banks using inflated posted rates to calculate inflated interest rate differentials.

******************************************
You make some good points that inflated (FAKE) posted rates are just marketing.

Getting a discount to the posted rate is fine. But my main complaint is that they are used to inflate interest rate differential penalties in an unfair manner.

The interest rate differential I believe is meant to compensate a bank releasing you from say a 4% mortgage for the fact they can only re-lend at say 3% if rates have fallen and to compensate for lost profit in general.

But they calculate it in such a way that a huge penalty can result even when rates have not fallen because they can’t lend the money at the inflated posted rate that was in place when you took out your mortgage. But that number seems irrelevant to any fair calculation of their lost profit.

My post 88 is long but I tried to explain it there. Perhaps someone has direct knowledge of the math.

I contend it should be illegal as the calculation, although in the contract, greatly over-states the lost profit when a mortgage is paid off early.

If I am wrong, I am wrong based on math and how the calculation is applied. If anyone has knowledge I am interested to lean.

#173 KLNR on 01.13.18 at 11:56 am

@#159 When Will They Raise Rates? on 01.13.18 at 9:48 am @139 AB Boxster

…I used to think that lefties are completely insane. Now I realize that it’s just brainwashing. Watch any MSM news outlet for 5 minutes and it becomes crystal clear.
___________________________________

Hahaha. you honestly think folks on the right are any different? far right and far left are 2 pieces of the same pie. Ideology is for idiots.

#174 akashic record on 01.13.18 at 12:00 pm

#156 akashic record on 01.13.18 at 9:06 am

#121 AB Boxster

In trying to polish this, you get some on you. Vulgarity was not the point. – Garth

——

Because you say so?

You have the opinion of one.
So does everyone else.
That’s all.

But my button is bigger than your. And I’m, like, really smart. – Garth

It was a polite, subtle hint that when you tell someone that “in trying to polish this, you get some on you” is the projection of your own fear.

You are dealing with this fear imposed on you to protect yourself with your own “deleted” button.

Ironically the delete button is not much different from the bigger button, speaks the similar language as “I’m, like, really smart”.

#175 KLNR on 01.13.18 at 12:00 pm

@#164 CANADA IS A SHITHOLE COUNTRY on 01.13.18 at 10:47 am

Dude! What happened to you in life? carrying around that bitterness is not helping you.

#176 KLNR on 01.13.18 at 12:03 pm

@#166 Deano East on 01.13.18 at 11:05 am
#160 Bankish
Hey, I own 7 Canadian Banks and lots of other blue chip companies. However, I’ve learned to not be smug about it, be humble or you will eventually be humbled.

________________________________

How does that saying go
…bulls make money bears make money pigs get slaughtered

#177 InvestorsFriend on 01.13.18 at 12:04 pm

Bank and Consumer Regulators Sleeping?

Royal Bank in 2017 made a return on equity in Canadian personal and consumer lending of 32.9%. This was the bottom line after all expenses and taxes profit on share owner investment. 20017 was not unusual, 2016 was 32.6%. See table 21 page 28 of their recently released fiscal 2017 results. (You must have seen the outraged headlines? No? me neither.)

No wonder Bankish is smiling.

This massive return on equity was made in a what is a commodity business.

In large part this is achieves with massive leverage but somehow that does not seem to translate into risk. Economic theory would suggest this can’t happen in a competitive market.

There are plenty of banks to choose from and yet profits (percentage return on equity) seem consistently massive.

What is preventing stiffer competition? Quiet collusion?
sleepy regulators?

Don’t worry Bankish, nothing seems likely to change.

#178 Wrk.dover on 01.13.18 at 12:04 pm

But my button is bigger than yours. And I’m, like, really smart. – Garth

———

Yuge!

#179 cultural elitist on 01.13.18 at 12:27 pm

@159
“You see, individually, the libtard mind is incapable of critical thinking. They are drones, much like the Borg on Star Trek.”

Nice critical thinking there. Biased labeling much?

#180 LivinLarge on 01.13.18 at 12:29 pm

““When Sears advertised 75% off a FAKE inflated matress price they that they never charge they got in trouble, But not the banks. Why?” Because the consumer protection laws say that if you never charged the full price in the past then advertising a %75 sale is factually incorrect…aka a lie. .

Bankinsh, right on about layong off the banks. They are of the last if not the last remaining “li
Walk into a TV retailer and the procemn the sticker is what they want, expect and will take if YOU don’t make a lower offere they will accept like price matching.

Same thing with most retail consumer durables. The “sticker price” on the car is msrp but no one still breathing thinks they have pay it.

Go anywhere with an “advertised price match” guarantee and it’s the same thing. Bank branch lending portfolios have targets and quotas so if you are a new customer and don’t ask for a rate reduction then the lending officer is going with the posted rate. Sears or the Bay could not demonstrate that they had NEVER sold that specific freezer for the “before” price…ever.

Bankish, right on about laying off the banks. They’re one of the last, if not the last “license to print miney” plays left. Capital value does fluxuate ad 08-13 showed but divs have never been missed or even cut …ever. BMO was at $40ish after a split in 2001 and now worth $102.00+ so…350% capital appreciation in 17 years even with a capital depreciation of 50% between 08 and 20 plus a $3.50 ish div per year. If you hadn’t panicked and dumped in 09 then you made nothing but tax advantaged profits. Gold is about the only thing I see as guaranteed over a decade. Up and down but always more up than down. Nothing is a guarantee but nothing as close as bank shares too.

Mary, no cut in TFSA contribution limit this year or any year into the foreseeable future either. The yearly limit is now determined by the CPI and not capriciously to buy votes.

#181 cultural elitist on 01.13.18 at 12:31 pm

@159
“The level of brainwashing that they have allowed themselves to be subjected to is astounding. They parrot the views (no matter how outlandish) of their profs, the MSM, Hollywood, etc without asking basic questions.”

Basic questions like: Am I painting a fair and accurate picture of my opponent, or am I making unsupported assertions based on emotional reasoning?

#182 John on 01.13.18 at 12:46 pm

Mary Woljstki

Seriously??? You can’t (?) be that gullible. The GOP guys in the meeting said almost without exception.. that they “didn’t recall” or “no comment”. L Graham as much as admitted it… but hey whatever…. ya you’re not a Trump fan.. most always start off with that.

#183 Wrk.dover on 01.13.18 at 1:01 pm

Perusing all of the weeks major US political cartoons at Go Comics.com, I saw Brian MacFadden has solved the economy…simply two robots perpetually passing money back and forth to each other…no consumers needed!

#184 ben on 01.13.18 at 1:43 pm

New mayor(ess) of Montreal just put up property taxes by around 5%. All the landlords think they can “pass it on”.

Many didn’t raise rents last year even though the market could, by their logic, bear paying more.

Were they wrong then or wrong now? Wrong now.

Hot potato, sit and hold it as it burns through your hands.

#185 ben on 01.13.18 at 1:50 pm

> When Sears advertised 75% off a FAKE inflated matress price they that they never charge they got in trouble, But not the banks. Why?

Because there’s been a coup.

#186 Screwed Canadian Millenial on 01.13.18 at 1:54 pm

‘CANADA IS A SHITHOLE COUNTRY’ is rapidly becoming my favourite new poster. After myself of course. The man speaks truth.

#187 Deplorable Dude on 01.13.18 at 2:22 pm

#172 KNR……’Hahaha. you honestly think folks on the right are any different? far right and far left are 2 pieces of the same pie. Ideology is for idiots.”

——-

Righhhhttttt….the media is about 95% liberal. Even the majority of Fox news is now lefties. There’s about 3 conservative mainstream commentators now, that’s it.

I’ve solved this problem by simply not listening to the mainstream media. They are afterall owned by the Globalists, and diametrically opposed to the Trump doctrine of MAGA.

Youtube, Facebook, and Twitter are now openly censoring conservative voices. Google is downright scary with the revelations this week of how it treat’s it employees.

We are living in 1984 if you are a conservative.

#188 LivinLarge on 01.13.18 at 2:30 pm

Re: Banks…”This massive return on equity was made in a what is a commodity business.” OMG, you have no idea what you write about but still you write.
Banks are NOT, repeat NOT commodity businesses in even the most crazy, obtuse way. NBanks, at least Canadian Schedule 1 Chartered banks are 99.99999% service businesses. They produce absolutely no, zero, nada commodities of any sort. They keep your saving safe for a service fee, they lend you other peoples’ money for a fee, they sell you other peoples precious metals for a fee, they sell you investment instuments for a fee ad finitum. So, you really should stop making such crazy claims.

What’s preventing greater competition, you ask? THE BANK ACT, that’s what. Our Bank Act is possibly the most iron clad bit of protectionist legislation on our books. Letting American financial services companies have more access to Canadian’s wallets could be the real primary reason The Donny wants to can NAFTA. Our banks have relatively free access to the US financial services industry simply by buying up private US banks yet our Feds prohibit foreign ownership of Canadian Banks. If they can’t get more than 10% ownership they are only very minority shareholders with zero influence on ops.

BTW, financial theory is like most other theories like engineering theory etc., commonly wrong in the application. Think “Titanic couldn’t sink” and rates can’t go up and “oil will never drop” or even “SFHs will alway appreciate. You really don’t actually comprehend either theory or practice now do you???

#189 Trocxi on 01.13.18 at 2:36 pm

#167 AB Boxter

Excellent post, great assessment.
Dude, we’re doomed.
Unless Make Canada Great Again warrior appears
And soon.

#190 chapter 9 on 01.13.18 at 2:42 pm

#183 Ben
New mayor(ess) just put up property tax by 5%.

In the community that I live municipal taxes went up by 24% in the past 4 years.The election was all about fiscal restraint and better control of spending and keeping a lid on any further tax increase. They didn’t win, the tax and spend group were put back in office resulting in a 5.4% tax increase this year. Typical family is paying 42.5% of their income to support three levels of government, at what point do we wake up when it’s 55%-65% or never.

#191 Doug in London on 01.13.18 at 2:47 pm

@CANADA IS A SHITHOLE COUNTRY, post #164:
If it’s really that bad here you can always pack up and leave permanently, the government won’t try and stop you. So, where are you gonna go?

#192 n1tro on 01.13.18 at 3:00 pm

#144 Under the radar on 01.13.18 at 5:28 am
103- when a person says he heard trump utter profane words, ( Sen Durban) that is direct evidence not heresay. If person A said person B told me what trump said -that is heresay.
————-
Ahhh yes. So when the good senator told the reporter at the washington post who wasn’t in the room about what the president said….that is what again?

#193 Penny Henny on 01.13.18 at 3:09 pm

#26 Flyboy on 01.12.18 at 6:18 pm

Any insights on the niagara region market would be great.

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

IMO the Niagara region has stalled it just took a few months longer for what was happening in Toronto to reach here. Personally I don’t see it picking up by spring.

#194 Penny Henny on 01.13.18 at 3:24 pm

for Flyboy

https://www.niagararealtor.ca/sites/default/files/Statistics%20-%20December%202018.pdf

Niagara region December stats

#195 What I Belive on 01.13.18 at 3:25 pm

“Logic dictates when the qualifying rate for a mortgage travels from a little over 2% to 5.5% in less than a year that there will be consequences.” – Garth

————————————————————-

That’s not really logic. More like rational thinking. I would counter that the GTA RE market has defied rationality for many years. So, I’ll believe it when I see it.

#196 ben on 01.13.18 at 3:26 pm

> they lend you other peoples’ money for a fee,

whoops, someone’s done econ 101 which is not correct

Bank of England official blog:

https://bankunderground.co.uk/2015/06/30/banks-are-not-intermediaries-of-loanable-funds-and-why-this-matters/

Banks. Are. Not. Intermediaries. Of. Funds.

#197 Rexx Rock on 01.13.18 at 3:27 pm

I guess Victoria house and condo prices will not surpass 22%-30% increases that was achieved in 2017.More likely just 15%-20% at most for 2018.Still a nice chunk of money to hold out for another profitable year!

#198 LivinLarge on 01.13.18 at 3:28 pm

Crazy Friend: “But my main complaint is that they are used to inflate interest rate differential penalties in an unfair manner.”…it escapes me my you persist with these sort of dog wistle populist claims. There is nothing “unfair” about how the early payment fees are calculated. Every chartered bank explain the fees in detail on their websites and they are not subjective. Every customer gets the same objective calculation and I think every bank also have an online calculator to help you estimate the charge.

You seem to be objecting to the institution using their maximum posted rates as the reference point when making the calculation but what else can they use that is reliably any more accurate? They certainly aren’t going to or likely even able to, use an average rate for similar mortgages over a period of time. They use the posted rates as baseline because well they ARE official posted rates not open to subjective dispute. That you or anyone else “could have received a lower than posted rate” at some point currently or in the past is immaterial and moot. The “maximum” posted rate is used because it actually is “fair” to everyone. Not necessarily advantageous to the borrower but it certainly is fair if you know going into the mortgage that there is going to be a disincentive to pay out a mortgage early and they are totally transparent in their calculation method. You’re free to not payout early if you wish…the process just isn’t in the least “unfair”.

The online calculators even explain the “why” in plain English so there can’t even be a valid complaint about that.

I had a friend back in the early 80s who was the smoothest sales person I have ever known. He sold cars and when someone came up to him and asked “what price can I really buy this car for?” His answer was “The only price I know for certain is the price on the sticker” and “for anything less than that, we have to write an offer to purchase”. Simple, straight forward, honest, transparent and totally fair.

Banks are businesses selling their services in return for fees and not charities. They act in their best interest but they are in the end “fair” about it.

#199 What I Belive on 01.13.18 at 3:37 pm

#21 Dolce Vita on 01.12.18 at 6:02 pm

Come on. Do you really think that the feds will allow all of that nastiness to happen? If hit that hard financially, the public would be in an uproar and the feds would have to respond. Wait a minute. Of course. Their response will be, as already planned, legalized marijuana. Maybe they will even subsidize it for those in financial hardship.

#200 Entrepreneur on 01.13.18 at 4:06 pm

Looks like the banks have control of us, good or bad. And one has to be careful dealing with them as they are not our friends. Maybe even like dealing with the devil? And maybe make a law where debt is limited even for banks to control this madness. And isn’t this suppose to be about people, citizens, to be productive.

The Conservatives are the opposition party but I have to agree with #167 AB Boxster that they are not very vocal. But maybe it has something to do with who pays the grants for the news as now we get more Liberals views.

When Trump won the election he has been under constant attack. Like #69 Robert B said take the news like a grain of salt about the real truth. Wasn’t this blog a couple days ago mentioning how Trump has picked up the U.S. economy? I have a sense of jealousy against the President that is doing something for the people of his nation.

#201 LivinLarge on 01.13.18 at 5:04 pm

Ben, interesting and a tad dry but if the new model correlates more closely to empirical data then I am mostly wrong…thanks for the link. This may explain why Canadian banks’ credit departments are at the bottom of the ladder in their income generation as well.

n1tro: “So when the good senator told the reporter at the washington post who wasn’t in the room about what the president said….that is what again?”…a direct quote.

#202 ben on 01.13.18 at 5:54 pm

LivinLarge – I provided that link to simply illustrate that it’s a fallacy that banks lend out money from savers. Also it’s a fallacy that they lend out via a “multiplier” of say 15:1 against held savings.

When you go to a bank to borrow 400k they write a contract that becomes worth 400k + interest and hold this as their asset. They then credit your account with 400k as their liability. That is it. Then you spend the 400k on say a house, that goes to the seller as 400k credit and off it goes into the system, which now has 400k more in it. Over time you will have to pay back that 400k plus interest, the original 400k is “destroyed” and the interest comes from additional money created in the interim.

This is why the money supply has to constantly expand, to allow for payment of the interest on freshly created debt.

Or as in the linked article:

> Rather, the key function of banks is the provision of financing, meaning the creation of new monetary purchasing power through loans, for a single agent that is both borrower and depositor. Specifically, whenever a bank makes a new loan to a non-bank customer X, it creates a new loan entry in the name of customer X on the asset side of its balance sheet, and it simultaneously creates a new and equal-sized deposit entry, also in the name of customer X, on the liability side of its balance sheet. The bank therefore creates its own funding, deposits, through lending. It does so through a pure bookkeeping transaction that involves no real resources, and that acquires its economic significance through the fact that bank deposits are any modern economy’s generally accepted medium of exchange.

Now none of this is ever addressed on this blog or in your media. What is the corollary?

Bank lending can soak up an infinite amount of productivity improvements, so land prices will always soak up all productivity gains, leaving workers no better off and shifting gains from workers to the financiers.

#203 KLNR on 01.13.18 at 6:56 pm

@#187 Deplorable Dude on 01.13.18 at 2:22 pm

…We are living in 1984 if you are a conservative.

________________________________________

lol, amazon has a sale on tinfoil hats, you should grab one. gotta laugh at the conspiracy theory narrative that permeates the conservatve mindset.

#204 Jon on 01.14.18 at 12:44 am

I went to mortgage broker this week to see how my ability to borrow cash, in 2012 they said 650k this week I can get 900k with 5?percent down. I asked about b20!and figured my borrowing ability would drop they said it only applies to uninsured mortgages of 20 percent down or more. My guess is b20 has zero effect on market. I was hoping for 20 percent correction this seems like it ain’t happening in Vancouver the rules did nothing

#205 Boombusr on 01.14.18 at 12:24 pm

#204 Jon

BS.

B-20 will have a wide-ranging impact, especially in TO and Van.

Nice attempt in trying to keep the bubble inflated on your part, though.

#206 DON on 01.14.18 at 12:36 pm

#197 Rexx Rock on 01.13.18 at 3:27 pm

I guess Victoria house and condo prices will not surpass 22%-30% increases that was achieved in 2017.More likely just 15%-20% at most for 2018.Still a nice chunk of money to hold out for another profitable year!

**********************
Where’s your usual supporting link from the Victoria Real Estate Association or is it Global BC.

Took the care for a test drive and wow…there are still a lot of listings in new developments sitting empty and some for sale signs falling over (unloved since the snow and the constant rain pushed them over).

Yup…it is rocking out there folks.

#207 DON on 01.14.18 at 12:38 pm

#186 Screwed Canadian Millenial on 01.13.18 at 1:54 pm

‘CANADA IS A SHITHOLE COUNTRY’ is rapidly becoming my favourite new poster. After myself of course. The man speaks truth.
**************

Say hi to Trudeau…when you see him for brunch today.

#208 Midnights on 01.14.18 at 2:22 pm

G.O.P. Senator Says Trump Didn’t Use Vulgarity for Haiti and African Nations
WASHINGTON — A Republican senator who attended a Thursday immigration meeting at the White House forcefully denied on Sunday that President Trump had used the phrase “shithole countries” in describing Haiti and African nations, saying a Democratic senator’s account of the session was “a gross misrepresentation.”

Senator David Perdue, Republican of Georgia, said on ABC’s “This Week” that Mr. Trump “did not use that word,” and accused Senator Richard J. Durbin, Democrat of Illinois, of distorting what the president had said at the meeting, which included more than a half-dozen lawmakers.

Senator Tom Cotton, an Arkansas Republican, joined Mr. Perdue later in the morning in questioning Mr. Durbin.

“I didn’t hear that word either,” he said on CBS’s “Face the Nation.” “And I was sitting no further away from Donald Trump than Dick Durbin was…
New York Times

#209 aa3 on 01.14.18 at 3:14 pm

My feeling is that is what the Cdn banks have sort of a friendly, controlled competition.

They allow enough competition to keep it relatively honest, and to push their organizations to put in new technology and so forth. But they are not competitive in a sense of jeopardizing the total industry profitability.

While I do go for the all out free markets and the creative destruction.. I understand in some countries and especially some industries they may prefer ‘competition-lite’ model.