What it means

Only in Canada would a quarter-point rate increase grip the nation. It’s weird. The folks in Venezuela (inflation 2,350% this year) would laugh at us. Such first-world problems we have.

However, there’s a good reason this week’s news matters. Consider those lines of credit secured by real estate that people have binged on. We owe an historic $211 billion in HELOCS. Astonishingly (says the federal government) four in ten people are paying nothing on them. Nada. Ziltch. Another quarter pay just the interest. So, two-thirds of borrowers haven’t been reducing their debt load by a penny – even during a time when the cost of money’s been incredibly low. What a losing strategy. Everyone should have known rates would rise. Now they are.

Home equity lines float along with the prime. A quarter point increase means families will have to fund $1.6 billion more in bank charges in 2018, or try to absorb that amount of additional debt. That’s what a lousy quarter point means. When surveys show us almost half the households in Canada have less than $200 after paying the monthlies, how can this not matter?

This week realtors went into overdrive trying to minimize the impact of central bank tightening, aided and abetted by their pimps in the media. “In the near-term, it will likely mean some belt-tightening among those with variable rate mortgages and lines of credit, and with more increases expected, some consumers will be scrimping further as the year goes on,” said the country’s largest newspaper. “But the demand for housing remains so strong that the higher mortgage rates aren’t expected to have a big impact on home sales.”

We’ll see. Higher rates have pushed the benchmark five-year rate to 5.14%. The B20 stress test now requires borrowers to qualify at that rate, or their offered bank rate plus 2%, whichever is greater. Last January rates were 2%, and no stress test. So, obviously, somebody is lying to you. And it’s not this blog.

It will take time for the new reality to sink in, and be translated into changes in market supply and demand. But it seems a no-brainer listings will increase and the pool of buyers shrink as credit is restricted and tens of thousands of purchasers are shut out. More supply, Less demand. Prices fall.

Here are some interesting thoughts from the capital markets guys at brokerage Macquarie. Because Canadians have self-pickled in historic heaps of debt, they say, this cycle of rate hikes by the Bank of Canada is “far graver” than most people believe. If rates rise just one more itsy-bitsy weeny quarter point, the impact will be 65% to 80% as severe as the one that crashed Toronto real estate by 32% in the early 1990s.

Those of you old enough to recall those days may remember house prices declining year after year after year. Nobody was buying. Properties turned illiquid. Real estate was seen as a risk-laden asset after a huge price run-up in the previous decade. I sold a commercial building to a dude who ran into trouble because of the recession and couldn’t pay the financing I’d extended to him. So we swapped out two condos in a brand new building on the waterfront, cancelling his mortgage. I sat on those for six years until I could recoup the money, all the while leased for negative cash flow because rents had tumbled along with prices. Once the storm hit, it took 14 years for prices to recover.

2018 is not 1991, of course. It might be worse. Canadians have never owed so much, nor been so leveraged into real estate. Macquarie points out that 30% of the whole economy comes from selling houses or cars, which is 50% greater than in the past. “The wealth effect from rising home prices has driven nearly 40 per cent of nominal growth in gross domestic product over the past three years, about two to four times the amount experienced previously when the BoC was hiking rates. Even as this has occurred, fixed business investment and exports have struggled, limiting the ability for a virtuous domestic growth cycle to unfold. This again is in sharp contrast to similar periods in the past when these were accelerating.”

In fact, 2% of all of Canada’s GDP has come from realtor commissions alone. Yikes. Imagine all the homeless Audis that will suffer as a result.

Well, add in the stress test and Macquarie warns the effects will be exaggerated. Buyers are expected to have 17% less purchasing power, “which jumps to 23% after incorporating the rise in mortgage rates since mid-2017.” So, all things being equal, houses should cost 23% less than they were when the rates started to move – which was mid-summer.

At that time the average Toronto detached was changing hands for $1.304 million. So are we on the way to a $300,000 decline as the market reflects the changes to credit and the cost of money? If so, why would anyone buy now?

Beats me. I’ve seen this movie before.

221 comments ↓

#1 TurnerNation on 01.18.18 at 5:01 pm

Early post Gartho must be at a Bay St. Happy hour.

#2 Lee on 01.18.18 at 5:06 pm

$1,000,000 sounds about right for a Toronto detached. That is as far as it will drop.

#3 Lee on 01.18.18 at 5:06 pm

Oh, by the way, I forgot to say FIIIIRRRRSSSSST.

#4 SimplyPut7 on 01.18.18 at 5:09 pm

I sold a commercial building to a dude who ran into trouble because of the recession and couldn’t pay the financing I’d extended to him. So we swapped out two condos in a brand new building on the waterfront, cancelling his mortgage. I sat on those for six years until I could recoup the money, all the while leased for negative cash flow because rents had tumbled along with prices.

—————————————

It seems like this paragraph should be expanded into a blog post on its own.

#5 R. Vanzo on 01.18.18 at 5:11 pm

If prices don’t collapse now it can only mean one thing: what’s driving real estate prices is foreign money. And by foreign I mean in general, including permanent residents like myself. Getting a PR is a joke: all I had to do is validate my foreign education and score high enough on an English exam (plus proving that I had 20 k in cash). Rates don’t affect me at all since I will be paying cash, I’m only waiting on the sidelines for a bargain.

#6 ANON on 01.18.18 at 5:13 pm

Lots of news about debt, houses as ATMs, then about debt, some about debt, a few about debt.
The narrative has changed, and the media mirrors it. It is finished.

#7 GDP on 01.18.18 at 5:15 pm

“In fact, 2% of all of Canada’s GDP has come from realtor commissions alone.”

Do you have a reference for that?
That’s a scary number!

#8 Duke on 01.18.18 at 5:21 pm

For anyone who remembers those days in 1990, I am telling you that 2018~ will be far worse.

#9 Zapstrap on 01.18.18 at 5:21 pm

The movie to end all movies was in the early eighties.
Took many years to recover out here on the west coast.

#10 Troy McClure on 01.18.18 at 5:25 pm

More axe pictures, please.

#11 Elizabeth on 01.18.18 at 5:26 pm

Long time reader. First comment today!
We have a secured LOC much less than half the home value in Ottawa. Switched our mortgage balance to LOC when we didn’t want to commit to another three or five year term. Only carrying half of the loan that’s registered on title. I know of at least one other family in our circle who have done the same. And their LOC is at zero. Perhaps this super high Canadian debt isn’t actually all maxed out??

#12 pathcontrolmonk on 01.18.18 at 5:27 pm

Garth, you should have been a hand model.

#13 Rents Rocketing on 01.18.18 at 5:28 pm

Rents will soon swell with the new B20 rules as those who do not have credit to buy will place pressure on existing rental stock – because everyone needs shelter. There will be a lot more competition in hot markets with already near zero vacancy rates.

Sure, there will be some more rental houses on the market from speculators cracking under the pressure, but local rental demand will absorb them as there will be more ‘rejected B20 potential buyers’ than houses on the market from speculators.

The irony is that due to more competition for scarce rentals, renters will soon be paying more than the mortgage/insurance of owners who bought their houses under the old rules and cheaper mortgages.

And owners will sell when they want, and renters will continue to be in a precarious posiiton waiting for the next eviction – in the bigger markets like Van, TO and Victoria.

For those sideline renters in major bubble markets cheering on B20, you might have just caused rent increases and even less security of tenure. Good job.

So not only have the smart sideline renters missed out on lifetime capital gains, but their decision will eventually result in them paying

And all of this will take place over many many years as prices melt – they are sticky on the way down remember?.

So I hope those renters who invested wisely for years can absorb the rent increases; that they can deal with the constant fear of being evicted as some landlords will cash in on past captial appeciation; that their partners and kids can understand the need to be constantly moving; and have the patience for years as price melts take years and years, especially after a decade bull run.

See you in five years till waiting for the correction…

You are wrong about rents. – Garth

#14 YVRMC on 01.18.18 at 5:28 pm

It will be interesting to watch the fall of prices in the RE market… when will they begin in earnest. How deep and steep will be the slide. How long does it last and where is rock bottom ?

#15 Joe on 01.18.18 at 5:29 pm

Some friends of mine are members of the first quarter. Calling their continuous borrowing against the house a “loosing strategy” seems to imply that there was some forethought and planning involved.

But that’s not the case. Rather, the borrowing was driven by an inability to live within their means and the vague hope that future income would somehow make all that debt disappear.

Instead, it drove them apart. Now their kids live in a broken home–at least until the bank takes it away. This makes me sad.

#16 moneyDriven on 01.18.18 at 5:30 pm

Thanks Garth..

What about Vancouver?

Its not better here. Its not different here but it is different because of extraordinary money flowing in (local people earning in other places or new immigrant or foreign buyer). These people are not as interest rate driven.

I remember your “get out” post from a year and half ago and since then the median prices have started to move up.. amid different sales mix but except ultra luxury market which makes no different if you work for living.

When would Vancouver finally see the price correction? Its harder to be happy renter everyday knowing how sticky are prices on the way down!!

#17 moneyDriven on 01.18.18 at 5:30 pm

Thanks Garth..

What about Vancouver?

Its not better here. Its not different here but it is different because of extraordinary money flowing in (local people earning in other places or new immigrant or foreign buyer). These people are not as interest rate driven.

I remember your “get out” post from a year and half ago and since then the median prices have started to move up.. amid different sales mix but except ultra luxury market which makes no different if you work for living.

When would Vancouver finally see the price correction? Its harder to be happy renter everyday knowing how sticky are prices on the way down!!

#18 X on 01.18.18 at 5:32 pm

Macquarie warns the effects will be exaggerated. Buyers are expected to have 17% less purchasing power, “which jumps to 23% after incorporating the rise in mortgage rates since mid-2017.”

Might want to make that 30% after a couple more rate hikes later this year….

#19 Penny Henny on 01.18.18 at 5:33 pm

I guess you can call me Lucky.
I bought into the Toronto market in 1995 and got out in May of 2017.
I just missed catching the bottom in 1996 and the peak in March of 2017. But all in all it was a good run.

#20 NoName on 01.18.18 at 5:34 pm

disgruntled pharmacist from costco?

#21 Screwed Canadian Millenial on 01.18.18 at 5:35 pm

The geniuses over at Macquarie are the same people who predicted a 55 cent Loonie back in 2015.

Canadian dollar will drop to 59 cents US in 2016, Macquarie forecasts
http://www.cbc.ca/news/business/macquarie-loonie-forecast-1.3401644

I was hoping they were right and stockpiling on USD but they were dead wrong. Now I’m out of CAD and USD.

Thank god Trudeau has taken us to the promised land and now the Loonie is up to 80 cents and rising strong.

Conservatives Can’t Compete With Liberals On Economic Issues
http://www.huffingtonpost.ca/shane-mackenzie/conservatives-cant-compete-with-liberals-on-economic-issues_a_23335010/?utm_hp_ref=ca-homepage

#22 joblo on 01.18.18 at 5:40 pm

Poloz needs to do a Bernanke, oops Burnayankee.

https://www.youtube.com/watch?v=INmqvibv4UU

#23 Screwed Canadian Millenial on 01.18.18 at 5:40 pm

Canadian wages have been stagnant for decades because of a massive over-saturation of the labour market. This is what has led to the debt bubble. Low interest rates haven’t helped of course.

Canadians’ Real Wages Are Shrinking. Is That Why We’re Falling Into An ‘Endless Debt Cycle’?
http://www.huffingtonpost.ca/2017/07/11/canadians-real-wages-are-shrinking-is-that-why-were-falling-i_a_23025302/

Politicians (Garth included) have lost sight of what the purpose of the economy is. It is to maintain FULL employment and solid, rising wages for workers. In times of economic distress and heavy slack in the labour market, of course it makes all the sense in the world to reduce immigration intake. This isn’t racist, it’s basic economics. Even Trudeau Sr. understood this in the early 80s when he reduced annual migration intake to below 100,000 for a number of years.

When we get down to 3-4% unemployment like we had in the 60s, solid wage growth and job openings are plentiful then of course it makes sense to increase immigration intake. But that’s not where we are today.

#24 Mike in Edm on 01.18.18 at 5:41 pm

A little off topic today, but I was late to the party yesterday, so here goes. If you’re interested in talking about Bitcoin, read ahead, if not, skip my post.

For all those bashing (or still curious) about Bitcoin (BTC), here you go from someone who is in the ‘game’… There’s 2 types of crypto investors. 1) Those that were told by their half uncle’s co-worker to buy BTC (or maybe 1 single random altcoin (alt = alternative from the big 3 coins – BTC, ETH, and LTC)), who generally don’t have a clue, and then there’s the others who know the last month was an insane bubble, own several different coins (many of which are incredibly interesting and have the possibility for game-changing disruptions in whatever industry their targeting), and are in it for the long haul. I initially LMAO’d when I heard that Kodak was creating a coin, but It’s potential to disrupt the stranglehold Getty Images has over stock photos is amazing. It’s ideas like this that are where the value lies, not in an anonymous coin that basement dwellers can use to buy hookers and weed.

The recent drop/crash was caused by a couple of things. #1) South Korea possibly banning crypto exchanges, or at least that’s what the MSM is reporting, when in fact they’re discussing banning the rogue ones that don’t require any ID to sign up. Basically getting rid of the sketchy ones and adding some regulation. This all happened in China a few months ago, and when the latest FUD settles (Fear, Uncertainty, Doubt), it’ll be a good thing for the market. #2) On Jan 17th, the first round of Short bets against BTC expired, and it was discovered that a big chunk of whales manipulated the market in order to make their fortunes even bigger. There’s another one due on Jan 24th, and then another on Feb 14th. So expect crypto’s to fall on or before those dates. Is having a few people being able to manipulate the market so much a good thing? Of course not, but that’s part of it right now. If these very smart people (not me) are correct about these dates, then it’ll be a great buying opportunity for the non-millionaires.

Right now, this is most likely just a correction, on it’s way to bigger and better things albeit slower than the December bubble. Personally, I’m not too sure what BTC will do. I’m concerned about the mining costs, but then things may get nutty when all 21M coins are ‘mined’. I’m holding a fraction of 1 single coin though. I’ve made worse bets in Vegas. This is also purely disposable income for me.

So in closing, like any investments (remember, these cryptos are basically like ‘investing’ in penny stocks right now – high risk, high reward), educate yourself on the different coins, their whitepapers, which (if any) large companies or govt’s are currently partnering with them (ie XRP with moneygram, LINK with SWIFT, etc), and spend a couple hundred bucks (if you can afford to lose those couple hundred bucks) on some coins. I’m not saying history will repeat itself, but imagine if you would have thrown in $200 on BTC back when it was $0.05 7.5yrs ago… You’d now have ~ $48million.

Just remember there’s probably more garbage coins out there than good ones and sketchy exchanges too, so be careful (ie TRX Tron is basically a complete plagiarism, Dentacoin – the coin of dentists… Seriously? Lol). It’s also a major PITA for us Canadians to get money into these exchanges to actually buy any coins. Capital one credit cards stopped allowing card holders to buy with their cards. Coinbase limits to $250/week for the first month via CC. I wire transferred funds to Kraken, and it took about a month, so IF by chance you’re even thinking of getting in, start at least signing up now (funding is step 2), as both take some time.

#25 The Wet One on 01.18.18 at 5:41 pm

Meh.

I just wiped out my LOC principal amount.

Money invested in weed stocks (remember those horrible investments), promptly doubled because ZOMG those things are expensive.

Happy times Garth!

You gotta look on the bright side of some of these things now and again. There is an actual upside in some situations even though, generally speaking, it’s grim as all heck.

In my case though, thousands of dollars to the good.

Yay me!

#26 John in mtl on 01.18.18 at 5:44 pm

Disaster looming in tdot and Vancouver for sure, but what should us folks in not too inflated markets like Montreal do? Rents are insanely cheap it feels like it’ll never be the right time to move in. 28 and would want to follow the 90 rule (and would be able to at current prices). Thanks!

#27 Johnny D on 01.18.18 at 5:44 pm

With the rate increase this week, let’s see if the US let’s off the ‘tear up NAFTA’ rhetoric just a little.

I have a feeling that a US to CAD dollar that moves relatively lockstep is going to be a requirement for NAFTA not to get torn up whether the BOC will say it or not.

More increases on the way.

#28 The Wet One on 01.18.18 at 5:44 pm

I guess the real question is, when will prices have accounted for these shocks in Edmonton?

In about 2 years, I’m looking to buy a home.

I’d be curious to know your thoughts?

Let’s assume we get a full percentage increase this year and that the forecast is for another 1/2 percent next year. When will that be priced into the market in Edmonton and the falling of prices stop. Let’s also assume that oil prices continue their languid upward trajectory because the economy globally remained strong and energy demand kept growing.

Thanks!

#29 Helic atm on 01.18.18 at 5:45 pm

First!

#30 Jungle on 01.18.18 at 5:46 pm

Even some bulls are selling their condos now and saying we won’t see the gains like we did in the past few years.

The party is officially over and does fell like it died after yesterday’s rate hike.

#31 Firster on 01.18.18 at 5:47 pm

Primero

#32 BlogDog123 on 01.18.18 at 5:50 pm

It’s time for HHCE to say those inspiring words to your friendly neighbourhood Realtor(R)s out there…

#33 I foolishly thinks I realy know something on 01.18.18 at 5:50 pm

We live in a FIRE economy. Poloz will be employed in the FIRE economy in the near future. Many other politicians will be as well. For instance, many will serve on the BOD for many government friendly corporations. These are the corporations that lobby and take them to lunch on a daily basis. So, no need to worry. The people in power will not let things get out of hand. If RE and the economy is indeed affected so badly by a slight rate increase, then they will take measures to ensure that it lands softly and deficits be damned. The national debt doesn’t scare them at all. That has been amply demonstrated these last few years. The people in power know who butters their toast.

#34 Zed on 01.18.18 at 5:53 pm

Sticky Sticky on the way down… GTA Sellers are still delusional and Realtors keep trying to pretend nothing has changed and soon prices will skyrocket like we saw last spring.. Always up never down .. never a correction… We have foreigners / immigration / buyers lining up to live here…!!! Sticky sticky light honey dripping down…. March /April prices will fall…. 10%? 20 % ? 50% .. depending on area

#35 Ronaldo on 01.18.18 at 5:57 pm

”So are we on the way to a $300,000 decline as the market reflects the changes to credit and the cost of money? If so, why would anyone buy now?”
—————————————————————
Nope. A lot more. Seen this movie before a couple times as well. Took long enough.

#36 IM in C on 01.18.18 at 5:57 pm

More supply, Less demand. Prices fall.
That is the theory
What you will see in the housing sector is prices stay flat. People will sit on their houses rather then sell at a loss

What ‘loss’? – Garth

#37 Paul on 01.18.18 at 6:01 pm

If so, why would anyone buy now?

Because there’s no rentals (or very few and super expensive) in many cities.

I rent downtown. Lots of stuff available. – Garth

#38 Mic on 01.18.18 at 6:01 pm

How is it that “rents had tumbled along with prices.” Heavy job losses?
Thanks

They always do. – Garth

#39 Hans on 01.18.18 at 6:01 pm

Hahahhahah. 0.25% hike is equiv or worse than what happened in the late 80s? Correct me if Im wrong…..mortgage interest rates went from 12 or so up to 21%. Unemployment went through the roof. Ill take some of that analyst’s pot if theres any left. Lol

You are wrong. Mortgages peaked in the 20% range in 1981, then steadily declined. I referenced 1991. Try to be less sloppy. – Garth

#40 Mouldy Millenial on 01.18.18 at 6:02 pm

Prices up 10% YOY in Toronto. When Toronto gets the new Amazon HQ2, it will do to that city what the Olympics did to Vancouver.

Wrong. Average Toronto detached price year/year in December was down 2.5% (a loss). Average price for all properties up .07%, less than inflation. – Garth

#41 IM in C on 01.18.18 at 6:03 pm

What loss – Garth?

Perhaps I should have written – perceived– loss

#42 For those about to flop... on 01.18.18 at 6:03 pm

Well,not sure how to write this ,but that hasn’t stopped myself from embarrassing myself on this blog daily.

A letter from my parents has sat on the kitchen table for the last couple of days.

I was too scared to open it as I am essentially estranged from them and we go about our lives separately.

My father has been diagnosed with cancer and has been given two years to live if all goes well.Started chemotherapy a couple of weeks ago.

I can tell he is dying because he said that this was not his worst ever Christmas and the one where I almost died on Christmas Day 30 plus years ago was.

I spent 3 months in hospital fighting for my life.
A couple of presents under a tree ,not so important after that.

He apologized for failing me as a parent ,which besides the cancer diagnosis was shocking because I never heard him take the blame for anything negative.

As this relates to this blog,I reported last year after hearing on the grapevine that they retired and sold their house and bought a condo of the Gold Coast of Australia to live a more comfortable retirement.

You know what they say about plans.

Just like my beloved blog buddy Boom,this could be used as a cautionary tale.

They planned for retirement but the family fell apart on the way.

I believe the main problem was that they had my brother and I way too young.

My mum had my elder brother for her 18th birthday and I burst onto the scene 22 months later.They were just kids themselves.

They were empty nesters in their late 30′.

My father will be 65 in February if he is still alive…

M43BC

#43 Angelica on 01.18.18 at 6:08 pm

I’m excited to see what will happen. Although it doesn’t make me happy to see people suffer. Even if it was their own fault for being greedy…

#44 ozy - #19 Screwed Canadian Millenial on 01.18.18 at 5:40 pm on 01.18.18 at 6:08 pm

#19 Screwed Canadian Millenial on 01.18.18 at 5:40 pm

Canadian real wages are indeed shrinking – in a free market this could be the result of the real value of the work they provide. Did we get lazier? What’s our productivity vs Americans or others on the planet?
Unless, this is the fault of the leftist GOVT interfering in the economy every year. Duh, so much delusion. We need a Trump. You choose, just stop complaining. The truth is ONE.

#45 Nick on 01.18.18 at 6:12 pm

A 23% decline seems like a rosy forecast to me. Things never tend to decline by the amount they should decline by. Based on the other factors you mentioned in your article, it likely houses will decline by more than 23% and as a result trigger a recession. We are long overdue for a recession and it will likely result in a typical 30-50% drawdown in equity values. If you remove the credit punch bowl from the economy then it will likely result in lower growth for Canada in 2018. Time will tell.

#46 Those 2s that keep coming up on 01.18.18 at 6:22 pm

First, the $200 for broke is millennials that don’t know how to manage their money. In my office, they spend upwards of $15 a day on lunch and walk around in cheap import clothing that costs something I would never pay. They only need adjust their basic habits, and they will free up some cash flow. I think the $200 is optimistic. I think at $1,000 we are getting more serious i.e. when the average person’s expenses go up by $1,000, then we can expect some hurt.

Second, the fellow yesterday that said things will plateau at $2M in Vancouver. Not sure when last they ran an affordability calc, but mine says that with 20% down, they would need upwards of $300K in income. Yip, we all do those numbers in Vancouver luckily. Not. If my research serves me correctly, there are several hundred thousand detached homes in Vancouver and surrounds. It’s not sustainable. People cannot afford $2M homes.

Two 2s that are probably not quite right.

#47 Paul on 01.18.18 at 6:24 pm

Maybe in your town. Check out Kelowna, Victoria, Duncan, Summerland, Penticton, and there’s a line up at the door to view. You need to get out more. It’s easy to look at the listings and say there;s lots.

I admit it’s been a while since I researched rentals in Summerland. I’ll try harder. – Garth

#48 Leo Trollstoy on 01.18.18 at 6:25 pm

What I like about the feds is that they always look out for the rich

My child’s trust fund is safe under the liberals

I feel sorry for the mediocre

#49 mitzerboy aka queencitykidd on 01.18.18 at 6:26 pm

a few layers of shed-ed skin ago
bank money out here in 82-83 was 13%
with a little help from grant devine.

its all good

#50 Headhunter on 01.18.18 at 6:27 pm

Our kind scribe is pretty much bang on. I too have seen this movie. I was cruising into the future with my time machine today ran into some entity call himself PHD of Herdonomics.. anyhoo…

As Garth as espoused “When sentiment turns” is does so rapidly. Well kids time to put on the big boy pants. Sentiment has turned. Hard. Sheep are tapped and ready to be sheared.

Hang on Dorothy we ain’t in Kansas anymore.

#51 Burnaby Boy on 01.18.18 at 6:30 pm

M43BC Cancer is a bit off topic but since you raised it don’t be so pessimistic. I too have cancer (stage 4) and the radiation worked wonders for me and I hope the chemo will too. For you, google Keith Scott-Mumby MD, PhD and get his book Cancer Research Secrets and you’ll get tons of tips on how to help yourself. You will learn that 49% of cancer patients die of something else. Get out of the dance with death you are in. Get rid of stress in your life, chemicals and improve your diet. Learn what feeds cancer (glucose) and what kills it. Help the doctors help you. There are others apart from the doctor i mentioned. Even he says some people go to famous natural health gurus and still die but as everyone is different try different diets and between that and the hospital stuff you’ll be fine.

#52 Paul on 01.18.18 at 6:31 pm

The point was it doesn’t matter if it’s a large city or not. It’s a serious problem with regular folks.

#53 Screwed Canadian Millenial on 01.18.18 at 6:31 pm

Trump hires the best people doesn’t he folks!!!

Sebastian Gorka was White House aide while a fugitive from Hungarian justice
https://www.theguardian.com/us-news/2018/jan/18/sebastian-gorka-hungary-fugitive-white-house-aide

Former Trump adviser Gorka wanted for arrest in Hungary: report
http://thehill.com/blogs/blog-briefing-room/369548-sebastian-gorka-has-an-active-warrant-for-his-arrest-in-hungary

Trump hired a literal criminal immigrant and put him in the White House. Oh the irony. You just can’t make this stuff up anymore.

I’m sure Trumpettes will be outraged by this.

I’m surprised nobody here has posted about Stormy Daniels lol.

#54 common sense on 01.18.18 at 6:37 pm

211 Billion?

Did I read that right? 211 Billion?

I bet Poloz puked when he raised the rate Wednesday. Yes the party is long over. And what a hangover on tap, no pun intended.

Flop….don’t know what to say but the fact they had your address to contact you tells me the line of communication between you and your folks is still open. You only have 1 dad…good or bad. The choice is yours alone to make as to what your relationship the next few years will be with them… All the best.

#55 Ian on 01.18.18 at 6:39 pm

This will be MILES worse than the early 90’s.

All the affordability metrics such as median home price / average income etc are far worse than the US had at its housing top ten years ago. And way, way worse than Toronto in 1989.

The 90s didn’t have the absurd low interest rates that in large part have caused all this current problem.

This is way different, and it’s going to really suck for a lot of people.

The economic effects will be dismal. Housing is already way too large a percentage of Ontario’s economy. Wynne gutting manufacturing and our family business didn’t help the percentages much either.

#56 AK on 01.18.18 at 6:40 pm

#40 Mouldy Millenial on 01.18.18 at 6:02 pm
“Prices up 10% YOY in Toronto. When Toronto gets the new Amazon HQ2, it will do to that city what the Olympics did to Vancouver.”
=====================================
Good Luck with Toronto getting the new Amazon HQ2.

LMFAO….

#57 Paul on 01.18.18 at 6:40 pm

#7 GDP on 01.18.18 at 5:15 pm

“In fact, 2% of all of Canada’s GDP has come from realtor commissions alone.”

Do you have a reference for that?
That’s a scary number!
—————————————————————–
Scary, now add in Lawyers, Movers, Mortgage brokers,
Reno’s, New cable and phone connections, Junk removal, 2% ? when this bubble blows no one will escape totally.

#58 JSS on 01.18.18 at 6:48 pm

I’d say it is a bit different than before.
Few reasons:
1) bank of mom and dad who can write a cheque and cash their pensions if they need to help junior out with his mortgage. Didn’t have so much help from mom and dad back in the early 90s
2) double incomes today are much higher than before
3) interest rates are still historically low

#59 Dan.t on 01.18.18 at 6:50 pm

Wait, I don’t get it it… just like half of Canadians! Can you explain again what interest rates have to do with housing and debt? Why do rising rates matter?

I mean who cares, just buy a house and get rich, what is with all this interest rate stuff?

Can I quote my favorite Canada quote last year?…ok, thanks… it was, well, you should just do it (we were talking about travelling!!) “I mean who cares, it’s only debt”. and that from someone who worked in FIRE industry and was well paid…and I’m pretty sure huge in debt…nice.

I didn’t want to mentioned I hate debt- have none- and would never go into debt to travel unless I had the money to do it.

I gave up on Canada years ago. Tired of talking to financial illiterite people (did I spell that right- who cares, it’s only spelling).

Just keep buying houses and make sure you have a pre-sale or two so all your friends think you are cool and super smart. The herd in Canada is soooo strong, they better not get wind that housing is maybe not the best investment after a 17.5 year massive run up. I wonder how many bought BTC at 20k and just sold?

#60 FOUR FINGERS WATSON on 01.18.18 at 6:51 pm

…………which is precisely why further interest rate increases are not gonna happen. Too painful for all. And nobody pays the posted bank mortgage rate anyhoo. 3% mortgages are still out there and will be for a looong time to come. Chill.

#61 RAY on 01.18.18 at 6:56 pm

I have switched to a completely ETF portfolio. No more “Whack a mole” with high growth individual stocks. Globally diversified away from Canada, 80 % $USD ETFs. Now I’ll just add some “zing” buying calls.

#62 jas on 01.18.18 at 6:59 pm

RE is a very local phenomenon. Price decline in Surrey is unlikely. 1000 new folk moving here from within Canada and abroad. A lot from India. I know their mindset. To be home owner is burnt into their psyche.They want to become home owners asap. And they are bringing sizeable amount of dough too.
So we are ok in Surrey until rates go double digit.

#63 millmech on 01.18.18 at 7:03 pm

#13
Do not worry about us renters, just keeps getting better and better.
Tons of suites for rent here in Langley BC for under $1000 all in for a 2bdrm, just got to look for the over extended landlords who need the money and there are lots in my area. As the rates rise there will be way more suites coming on the market as all the owners feel the noose tightening, more competition equals lower rents.
A co worker got a 2bdrm for $900/mth because he paid a year upfront, they know your staying and if your good tenants they will not raise your rent.
As for missing out financially not a chance, already up four years rent so far this year. I could easily buy the place I am renting in, but alas the taxes, upkeep, electricity, gas, internet, cable and yard maintenance(all included) would be over twice what I pay in rent easily.
Go BOC and raise those rates!

#64 DON on 01.18.18 at 7:05 pm

#11 Elizabeth on 01.18.18 at 5:26 pm
Long time reader. First comment today!
We have a secured LOC much less than half the home value in Ottawa. Switched our mortgage balance to LOC when we didn’t want to commit to another three or five year term. Only carrying half of the loan that’s registered on title. I know of at least one other family in our circle who have done the same. And their LOC is at zero. Perhaps this super high Canadian debt isn’t actually all maxed out??
_______________

You are prudent but I betcha the majority or house horny are not. All the toys, renos and vacations etc. The Financial post video/article (today) references the idea that people in their 30s and 40s are crossing things of their bucket lists early (good excuse) and using the house (atm) and credit cards. They have seen an increase in vacations being put on credit cards.

Yikes….somebody give me some Scooby snacks.

#65 tccontrarian on 01.18.18 at 7:05 pm

“2018 is not 1991, of course. It might be worse. Canadians have never owed so much, nor been so leveraged into real estate. ” -GT
————————————————————

How can it not be worse? Orders of magnitude worse – that’s my bet.
I was almost begging my over-indebted friends to prepare for what was coming (along with charts and historic trends, data…etc), and I almost got accused with ‘fear-mongering’.
I’m now beginning to see the fear in eyes…with every 0.25% increase in rates. Oh well…

TCC

#66 DON on 01.18.18 at 7:07 pm

#2 Lee on 01.18.18 at 5:06 pm
$1,000,000 sounds about right for a Toronto detached. That is as far as it will drop.
*************
Wishful thinking.

What sounds right is 3x income. What will happen is based on what a person is willing to pay on an asset that is no longer loved. You are only factoring in the good times not what is coming and was always coming.

#67 DON on 01.18.18 at 7:09 pm

Rents Rocketing on 01.18.18 at 5:28 pm
Rents will soon swell with the new B20 rules as those who do not have credit to buy will place pressure on existing rental stock – because everyone needs shelter. There will be a lot more competition in hot markets with already near zero vacancy rates.

Sure, there will be some more rental houses on the market from speculators cracking under the pressure, but local rental demand will absorb them as there will be more ‘rejected B20 potential buyers’ than houses on the market from speculators.

The irony is that due to more competition for scarce rentals, renters will soon be paying more than the mortgage/insurance of owners who bought their houses under the old rules and cheaper mortgages.

And owners will sell when they want, and renters will continue to be in a precarious posiiton waiting for the next eviction – in the bigger markets like Van, TO and Victoria.

For those sideline renters in major bubble markets cheering on B20, you might have just caused rent increases and even less security of tenure. Good job.

So not only have the smart sideline renters missed out on lifetime capital gains, but their decision will eventually result in them paying

And all of this will take place over many many years as prices melt – they are sticky on the way down remember?.

So I hope those renters who invested wisely for years can absorb the rent increases; that they can deal with the constant fear of being evicted as some landlords will cash in on past captial appeciation; that their partners and kids can understand the need to be constantly moving; and have the patience for years as price melts take years and years, especially after a decade bull run.

See you in five years till waiting for the correction…

You are wrong about rents. – Garth
************************

How about this, lower sales will mean houses aren’t selling and will need to be rented out. There may be a competition for renters……..remember things are about to change.

#68 TheDood on 01.18.18 at 7:10 pm

#13 Rents Rocketing on 01.18.18 at 5:28 pm

Rents will soon swell with the new B20 rules as those who do not have credit to buy will place pressure on existing rental stock – because everyone needs shelter……..blah blah…..

And all of this will take place over many many years as prices melt – they are sticky on the way down remember?.

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

The “tone” of this rant appears to support continued buying over renting. Any person who would risk a buy in the current landscape is a financial idiot.

Renters on the sidelines are the safest lot right now. Stay right where you are, stay invested, and watch RE burn.

#69 tccontrarian on 01.18.18 at 7:10 pm

Speaking of Venezuela and inflation, here’s a tracker of…the price of coffee:

https://www.bloomberg.com/features/2016-venezuela-cafe-con-leche-index/

tCC

#70 DON on 01.18.18 at 7:13 pm

Deal of century…time limited offer…

I am now accepting Bitcoins to purchase my collection of Unicorns and Faerie Dust. They are all magical. Get in while stocks last, your neighbor will be jealous.

#71 #24 Mike in Edm on 01.18.18 at 7:16 pm

What a pile of crap. You read all that on CNN. Bitcoin isn’t an investment or a currency. It’s a modern figment of imagination which the sheeple are gambling on because other sheeple are. You strike me as a crypto dilettante.

#72 YVRMC on 01.18.18 at 7:19 pm

Flop , sorry to hear about your dad , tough personal situation for you …. hope you guys work it out …

#73 Turn Out the Lights - the Party is Over on 01.18.18 at 7:24 pm

Everybody stand back and wait for race to the bottom to end. The prices could be falling for many years ahead.

#74 kathie on 01.18.18 at 7:30 pm

to comment #42 flop.
Thinking of you. I can’t imagine how you must feel.

live life to the fullest, is all I can say.

#75 CanadianOne on 01.18.18 at 7:31 pm

Good evening dogs,

came across this little table on interest rate increases back in the late 50s. Somebody mentioned how fast they went from April of 1958 to August of 1959… from 1.62% to 6.29%. A change of positive 4.67 in a span of 17 months. In Canada of Diefenbaker. History certainly can teach us about a spike in interest rates. Ignore at your own peril. https://www.bankofcanada.ca/wp-content/uploads/2010/09/selected_historical_v122530.pdf

And in further news about that 2015 court trip for Loblaws Vs. CRA… the judges have put their proverbial foot down. The problem of “circumventing” taxman’s pound of flesh…..http://www.cbc.ca/news/business/loblaws-cra-glenhuron-bank-barbados-tax-1.4490564

From profit-economy to wage-economy to the current propped-up-by-debt-economies of good part of the world, aggregate demand(without debt) hasn’t seen the light of day for a few decades now…..http://johnmenadue.com/michael-keating-trickle-down-economics-and-a-company-tax-cut/

…in spite of all the optimism one can muster to go forward, I fail to see how this doesn’t get a lot worse before it gets a tiny bit better.

…relying on Old Monk 12 year rum.
Cheers peers.

#76 Linda on 01.18.18 at 7:32 pm

#46 ‘Those’ – have to agree regarding people’s spending habits. Don’t think it is just the young people either. Sadly, there are examples on this very blog of folks in their late 50’s or early 60’s who have not set aside anything for retirement. Maybe they didn’t think they’d ever get old or didn’t realize that day was arriving whether they were ready or not.

Based on observation, I see lots of ways people could cut their expenses. Bringing your own lunch & coffee (there is this amazing thing called a thermos) to work every day would save a huge amount, though the local coffee shops/restaurants would suffer as a result. Example: you say $15 per day on average for lunch/coffee. Say that person works 48 out of 52 weeks per year, 5 days per week. That is 240 days & at $15 per day that is $3,600 per year spent ‘just’ on the daily work day lunch & coffee. But in this brave new world of ‘tap & go’, most have no idea of just how much they’ve spent in a day, let alone a year.

#77 Zapstrap on 01.18.18 at 7:39 pm

#73 Turn Out the Lights – the Party is Over on 01.18.18 at 7:24 pm
The prices could be falling for many years ahead.

At least we know according to jas that Surrey will be OK.

#78 DeAris Azoth on 01.18.18 at 7:47 pm

DELETED

#79 OttawaMike on 01.18.18 at 7:47 pm

2% of GDP on realtor commissions.

Absolutely ridiculous.

How can we dedicate that much to people telling us which room is the bathroom and which one is the kitchen.

We are truly futzed.

For perspective:
6% of out total GDP IS energy. From oil and gas to hydro to renewables to the guy in the self serve gas bar.

#80 Nonplused on 01.18.18 at 7:48 pm

Wait, realtor commissions are 2% of GDP??? How did that number get in there?? There is nothing being produced.

Even the guy who originally created GDP felt that certain businesses should not be included, specifically banking and advertising, because the whole of those industries input was already included in sales prices. For example if Ford pays Goldman Sacks interest on a loan, that interest is already included in the price of the car so counting the payment again is double counting it. I would think that realtor commissions belong in the same category. The poor sap who has to pay them is out the money so where it appears in one ledger it disappears in another.

Oh well I guess they have to measure it somehow, and the ultimate goal is to find out how much it’s growing on a percent basis, so maybe it doesn’t add too much confusion. But what it does show is how a credit fueled boom created by artificially low rates can distort GDP for as long as the credit intervention lasts. For example, when people borrow from their HELOCs because they don’t have any money and want a new TV, well that TV goes into GDP even though it came from China and nobody ever earned enough money to pay for it. And if house prices just keep going up and up and up and borrowing follows right along but no other money was earned along the way, is it really GDP growth? And what happens when it’s time to pay the money back? Then people will be spending less than they make instead of more so that means all we’ve done is borrow GDP from the future.

There is no free lunch. In order for GDP to grow, you have to produce something. Everything else is just playing with the numbers. Remember, no real statistician with a true understanding of his profession would ever try to cross a river that is on average 2 feet deep, unless he was a really good swimmer.

#81 Doug t on 01.18.18 at 7:53 pm

Iceberg meet titanic

RATM

#82 OttawaMike on 01.18.18 at 7:55 pm

53 Screwed Canadian Felony

Yeah that Gorka is one tough Hungarian gangsta.
I wouldn’t mess with him:

https://twitter.com/dogstar7tweets/status/934555730748854272/photo/1

#83 VanIsle Retiree on 01.18.18 at 8:01 pm

So, for comparison purposes, what was our debt to disposable income ratio at the end of the run-up in prices to 1991??

#84 InvestorsFriend on 01.18.18 at 8:03 pm

Rate Increases 1958 versus now

#75 CanadianOne on 01.18.18 at 7:31 pm said:
Good evening dogs,

came across this little table on interest rate increases back in the late 50s. Somebody mentioned how fast they went from April of 1958 to August of 1959… from 1.62% to 6.29%. A change of positive 4.67 in a span of 17 months.

****************************************
That is shocking and interesting.

But I guarantee you that consumers never saw borrowing rates down near 2% in 1958. There were no lines of credit. I don’t know what mortgage rates were but I would guess something like 6% or more and I doubt if they budged much with those Bank of Canada rate changes. Someone posted earlier today that lending rates basically did not change in those days. That sounds about right, changes would have been infrequent.

Okay found a source, prime mortgage rates were just under 5% and as expected barely budged.

https://www.ratehub.ca/prime-mortgage-rate-history

#85 Mayor of Milton on 01.18.18 at 8:06 pm

Hello Friends,

It’s your friendly, Mayor of Milton here. I know it’s been a little while since I posted, but don’t worry I read all of your posts here daily.

Just wanted to give you a few updates, about our beautifully beige, uncomfortably unsophisticated city.

First things first, a public safety warning: we have become increasingly concerned about the health and welfare of the, Happy Housing Crash Guy. He is often seen near local Milton realtor offices, foaming at the mouth and convulsing.

We have also been notified by authorities, about him shouting out obscenities at people going into the Mattamy Sales office. We believe he may have rabies and are warning the general public (as well as those special individuals wishing to purchase one of our newly released, overpriced aluminum sided, townhomes with complimentary 10 oz beige carpeting) to use the rear entrance and avoid direct eye contact with him.

Now on to a positive note.

We are very pleased to announce that, Screwed Canadian Millennial has bought a wonderfully “newish” beige coloured townhome here since his new wage increase of $14 per hour. We here in the city of Milton, were so pleased that all of his costly education landed him a wonderful job as a drive thru assistant at our most busiest, Tim Hortons on Steels Road! Plus we have been assured that his lunch breaks WILL be paid, because he has rights! Way to go young man, only 300 more monthly mortgage payments and that lovely townhouse with faux brick accenting is all yours! Great job son! I am sure your future over educated frumpy wife will fit right in – in this beautiful, culturally-dead wasteland, I mean paradise.

Anyway, just wanted the rest of you dogs to know, we have plenty of housing inventory available and plenty of minimum wage jobs here, and that’s something that we know will entice you to come and live here and choose Milton as your city!

Can’t wait to meet you all.

#86 Newcomer on 01.18.18 at 8:08 pm

#16 moneyDriven on 01.18.18 at 5:30 pm
….the median prices have started to move up.. amid different sales mix but except ultra luxury market which makes no different if you work for living.
——

By “ultra luxury” I guess you mean bungalows. Ah, yes, the ultra-luxurious life!

#87 Hugh Janus on 01.18.18 at 8:09 pm

Just wondering, do repo guys take back houses and condos as well as f 150’s and audi’s? I’ve seen those dudes on tv taking all that stuff even planes. Can just about anyone become a repo guy? It looks like it on tv because some look really dumb and do some dumb things. Its kind of cool. Better than those fake news channels.

#88 Rexx Rock on 01.18.18 at 8:10 pm

These rate hikes are just a prelude for rate cuts just like what hapenned before 2009.300,000 people coming to live in Canada mostly to live in GTA, YVR and Victoria.Real estate will remain stable with all these wealthy immigrants who would never think of renting in some old dumpy apartment.Don’t forget higher taxes will be coming because Canadians haven’t reached their breaking point.When certain foods become unaffordable to the mass public then there might be change.

#89 meslippery on 01.18.18 at 8:11 pm

#76 Linda

That $3600.00 per year if you add HST add $468.00.
Total $ 4068.00 net. So earn $5600.00 keep $4068.00.
I need to work 400 hours @ $14.00 for lunch and coffee
at work or 10, 40 hour weeks. WoW

#90 NV Landlord no more on 01.18.18 at 8:14 pm

History is repeating itself. I remember realizing we had about 8 months till we had to renew our mortgage or pay it off, in 1983! We didn’t know HELOCs existed, we weren’t savvy financially at all. We had a 25 yr msge and were 8 yr 4 months in. So I charged the family’s groceries to good old Woodward’s department store, paying the bare minimum payment. We scraped every penny and shocked the banker when we came in with check book in hand. He tried to get us to reconsider, and we took so long with him our car was towed from the the parking spot. We raised hell with the bank seeing our car being towed away! But paid Woodward’s back easily without a mortgage to pay. Pretty lucky. Mortgage free almost ever since. Heaven!

#91 Angie on 01.18.18 at 8:15 pm

#63 Millmech – where are you finding these <1000 rentals? More like 1400 to 1700. Rents in Langley are ludicrous.

As a renter, I've never felt more secure. My neighbours are all renovating on credit because their kitchens are "old." We've been busy over the last 10 years squirreling away our acorns. I'll take debt free and evicted with a big pile of F you money over the "security" of owning a mortgage and granite on credit and the property tax bill bomb any day. People say I'm throwing away money on rent. I think renos are a waste of money given the human condition of hedonistic adaptation. Fix one thing and in a few months they'll just find something else to update.

#92 SW on 01.18.18 at 8:21 pm

#42 For those about to flop… on 01.18.18 at 6:03 pm
“Well,not sure how to write this ,but that hasn’t stopped myself from embarrassing myself on this blog daily.”

Nah, you do good work.

I, too, had a difficult time with my father in his last decades. I kept the channels open and I was with him when he died.

Now, I choose to remember him when he was that lovely guy, the best father in the world, before the drink got to him.

None of us are perfect.

#93 Damifino on 01.18.18 at 8:22 pm

#40 Mouldy Millenial

…it will do to that city what the Olympics did to Vancouver
——————————

So what you’re saying is, it will be a colossal waste of time and money?

#94 A Poem By A GTA Realtor on 01.18.18 at 8:22 pm

Oh, when will my phone ring?

Ring

Ring

It’s been months since my last sale
And my career is starting to fail

The Toronto Star said: “the markets hot”
But my bank account – not!

My money’s run dry
I think, I’m gonna cry
Maybe I’ll move to Milton

Where

culture

goes

to

DIE!

#95 Sebastien on 01.18.18 at 8:24 pm

YVR real estate went up today on Zolo. This beast just can’t be put down. Sorry renters…

#96 Danny on 01.18.18 at 8:25 pm

Garth.
This well explained blog answers my question of yesterday about CTV…economic expert.

Yes the pimps for the real estate salespeople are on TV….too bad so many of them are regulars which have no conscience….that’s what greed does to people …confusing half truths.

“So, obviously, somebody is lying to you. And it’s not this blog.”

Very true.

Yet you must agree that over the last few years these real estate agents were well trained in deceitful practices.

Comes with the territory….just try to understand that American realtor Guru….Trump.

When he made money others got ripped off.
Only difference was the scale and degree.

Next is Kazakhstan…..false development proposal that Donald apparently was paid…$1,000,0000 to appear on the promotion…sales pitch….great drawings….just no real building.

Of course Trump will justify it as ” buyer beware ”
Now it’s voters beware.

#97 just a dude on 01.18.18 at 8:27 pm

I remember being in the midst of a terrible recession in 1990/91. I couldn’t find a job even though I was newly armed with a pretty good degree. I decided to go back to school and earn an advanced degree rather than become an overeducated taxi driver (I mean no disrespect to taxi drivers).

I’ve no clue how much the recession contributed to the painful housing scene then, not to mention the beginnings of the separatist movement in Quebec once again if I remember correctly. Truth is I didn’t give a hoot then since I was in my mid 20’s and having one hell of a good time being young :) Buying a house was the furthest thing from my mind unlike so many young people I speak with today.

#98 Tim on 01.18.18 at 8:34 pm

DELETED

#99 Gary smith on 01.18.18 at 8:39 pm

#62 jas on 01.18.18 at 6:59 pm

“Price decline in Surrey is unlikely”
—————————————-

It’s already happening in the SFH segment over past fe months. even in “desirable” areas like Scottsdale (I know, not exactly surrey)

What are the chances you own property in Surrey other than your own residence?

Don’t think the region will have a significant, sudden drop. Economics here aren’t rational-a lot of foreign money supply, despite what Garth says. And unless there is a “shock” vancouverites will continue to pay their own mortgage and bleed slowly.

It’s the flippers that may get caught.

#100 AJ on 01.18.18 at 8:42 pm

To: For Those About To Flop.
I’m so sorry. No matter your estrangement, that news is incredibly hard. I wish you peace as you try and figure out next steps. My dad lost his capacities to dementia and pushed me (his favourite) away before he died. It was and is incredibly hard.
Thanks for the perspective.

#101 Screwed Canadian Millenial on 01.18.18 at 8:43 pm

Gartho, are you sure that 2% of Canada’s total GDP is just real estate commissions? That can’t be right.

Or do you mean 2% of GDP GROWTH in a particular quarter came from real estate commissions?

#102 islander on 01.18.18 at 8:44 pm

HELOCS….as you’ve mentioned ‘ad nauseam’, Garth,… HELOCs will be the death knell. Haven’t been paying anything on them …wow…good luck with that. BTW the nice sales people at the banks who arranged your HELOCS aren’t the same people who start pestering you when you’re ‘overdue’ on your payments. Golden retrievers vs pitbulls…and they are well trained and they are not your ‘friends’ ………
http://www.cbc.ca/news/business/home-equity-lines-of-credit-what-you-need-to-know-1.3108672
From 2015!
“The bank is a business. The bank is going to do what they need to do……
….. if you are behind with your payment, things could get ugly.
HELOC terms can change with little or no notice.
The bank can alter the terms any time they want. It’s completely open.
The bank may decide: ‘We are cutting your limit in half: Instead of $100,000, now it’s $50,000.’
And the interest rate can change, too, ….. there’s nothing you can do about it. It’s potentially much more risky,” “You are at the mercy of the lender.”
22 per cent of homeowners — an estimated 2.15 million Canadian homeowners — had a home equity line of credit in 2014. They owed an average of $57,000.
It’s 2018 now!
On that note, had my fridge repaired the other day….happened to ask the repair person what the average life of my 10 year old fridge was. Oh, he said, this one’s doing well …usually they last 5-7 years.
Okay…so every 5-7 years you can expect to repair/replace your fancy $2,000+ CAD fridge…Now extrapolate to your other appliances, and all ‘designed obsolescence’ of modern life and you’ll understand why these folks aren’t paying off their HELOCS. Too busy paying ‘catch up’, as the crap they’ve bought disintegrates around them.
Condos – wow ‘New Home Warranty insurance’ – Good for 10 years…….
10 years before you have to start coughing up for building envelope repairs, plumbing repairs, balcony replacements, window replacements etc. etc. Oh we’ll just roll that into the HELOC……no problem….

#103 mathman on 01.18.18 at 8:45 pm

re #91 Angie

Well said! My bank account will always lack the sex appeal of granite countertops and leased luxury cars – and I’m fine with that.

I’m just under 40 and never heard the word renovation before I was well into adulthood. Growing up, your house was your house – maybe because I lived in a working class part of the 6 I wasn’t exposed to it.

It’s our HGTV, insecure, hyper consumption culture – I’ve had friends who renovated new builds 3-4 years after living in them. Easy access to credit, cheap money and financial illiteracy are a deadly combo. We all know how this is going to play out.

Math

#104 Smoking Man on 01.18.18 at 8:55 pm

DELETED

#105 ozy - #53 Screwed Canadian Millenial on 01.18.18 at 6:31 pm on 01.18.18 at 9:05 pm

SCM, King Trump is somebody that can hire others…

When do you think you’ll be taking on RESPONSABILITY of hiring someone for first time in your life????

Until then, I say – we should let Experience talk. More Real Life Action, less theory and unsubstantiated by facts talk my Comrade ;)

#106 NoName on 01.18.18 at 9:08 pm

#42 For those about to flop… on 01.18.18 at 6:03 pm

A month ago very good friend of mine, passed away after long batlle with cancer, he also was diagnosed late and he was given only 2yrs by docs, but he lasted 5. You never know…
As for estranged, part I can tell, don’t do what I did, nothing. Do something.

Take Care

#107 meslippery on 01.18.18 at 9:15 pm

#102 islander
Okay…so every 5-7 years you can expect to repair/replace your fancy $2,000+ CAD fridge…Now extrapolate to your other appliances, and all ‘designed obsolescence’ of modern life and you’ll understand why these folks aren’t paying off their HELOCS. Too busy paying ‘catch up’, as the crap they’ve bought disintegrates around them.
——–
Oh yes
free working frig or stove on kijji
friends would laugh at you.

#108 Jon on 01.18.18 at 9:21 pm

Mike in edm on btc. What is your one month target on btc it’s looking bad I think 5k to 7 k in four weeks could easily happen but on the fence right now. It’s down forty percent and weekly chart is only getting worse why would it rise right now with so much negative momentum and sentiment. If it breaks above 17k I may be buyer but expecting worse before that don’t be surprised if it’s at early November levels in a few weeks. I have traded for 25 Years I don’t see why this is magical right now so wait if anybody interested in this stuff. I would agree of the. Kind out there this one has some potential asplace to store value but I’d store f all there right now. Otherwise I wait for a bottom which hasn’t happened and that could be much lower than current prices buyers beware!

#109 Currency on 01.18.18 at 9:21 pm

#21 SCM
The geniuses over at Macquarie are the same people who predicted a 55 cent Loonie back in 2015.

Yeah, forecasting currencies is tricky.
Years ago, I shorted EURO when that whole Greece thing was looming over the EU.

EURO just kept rising, who knows why?
It’s c$ 1.52 at the moment, crying out loud.
How come a European Market in such dire circumstances has such a rock solid currency?
I don’t get it.

#110 Wealthy Renter on 01.18.18 at 9:23 pm

For those wondering where the realtor commissions being 2% of GDP came from, I found this:

http://www.cbc.ca/news/business/real-estate-fees-home-sales-1.4226630

It says commissions plus legal fees and transfer taxes, but it’s also 6 months old so maybe there’s something newer. Garth knows his stuff.

Either way it’s a shocking number.

———————————
Article quote:

Real estate commissions, land transfer taxes, legal costs and fees for inspecting and surveying homes make up almost two per cent of Canada’s economy.

“This is a stunning 1.9 per cent of GDP,” said Macquarie analyst David Doyle. “It’s really concerning, it’s really unhealthy.”

By comparison, agriculture, forestry, fishing and hunting account for 1.6 per cent of GDP, Statistics Canada reports.

#111 ANON on 01.18.18 at 9:24 pm

#97 just a dude on 01.18.18 at 8:27 pm
I’ve no clue how much the recession contributed to the painful housing scene then, not to mention the beginnings of the separatist movement in Quebec once again if I remember correctly

When I immigrated in Canada (QC) I was a believer in the mainstream narrative of The Good Dudes vs bad dudes. Upon understanding the mass psychology of expansions and contractions, after the GFC, when all the cacophony of contradictory opinions about the causes and the cures emerged making head asplode, I think that was the single main contribution.
Extraordinary popular delusions are always followed by the madness of crowds, and nothing can be done about it. Good to see a comment making the link, maybe advanced degrees do help after all.
(I mean no disrespect to postgraduates) :)

#112 Re: Mouldy Mil on 01.18.18 at 9:26 pm

#40 Mouldy Millennial
Wrong. Average Toronto detached price year/year in December was down 2.5% (a loss). Average price for all properties up .07%, less than inflation. – Garth

I’m with Millennial here… Teranet has Toronto at +9% year-over-year.

https://housepriceindex.ca/#maps=on_toronto

Teranet is useless and relies on ancient data. The most recent stats are as I quoted. – Garth

#113 DON on 01.18.18 at 9:27 pm

Flopper,

My MIL is going through the same thing. I suggested to my wife that she take this time to enjoy her relationship with her mom. Life and time are too precious. Make a good out of a bad situation.

All the best!

#114 Newcomer on 01.18.18 at 9:29 pm

I keep reading people saying that prices will not go down because owners will not sell.

Please remember that not selling is the norm. In any given year, almost nobody sells their house. All those millions and millions of non-sellers are not part of the housing market. Whether prices are going up or going down, people who just sit home do not set prices. But some people always end up selling for all the ordinary reasons. When those are bought, the price is set.

(This is leaving aside the fact that, when prices decline, people are more likely to sell because they think prices will keep going down forever.)

#115 millmech on 01.18.18 at 9:30 pm

Angie
You just rent from Jas and his folks, go to any laundromat and you will see them advertised, get to know the south Asian population. I got my place through a co worker, his uncle actually is my landlord. A homeowner just down from me is always trying to get me to rent his suite( I will not because that would be a dick move)
I am the only white guy in my area, I know they were saying” there goes the neighborhood” when I moved in.
Last tenant trashed the place, me, I do not drink, smoke cigarettes or pot, no parties or loud noise and pay rent on time.
Great people in my area, everybody keeps an eye on things , no crime.

#116 Mark on 01.18.18 at 9:40 pm

$211B in HELOCs, but according to IIROC, only $25B or so in margin debt? Wow, just wow.

http://www.iiroc.ca/industry/marketmonitoringanalysis/Documents/MonthlyClientDebtMarginAccounts_en.pdf

What would the TSX be if Canadians owed $211B on their margin accounts?

Yet for some reason, many Canadians think the stock market is ‘riskier’ than housing. Lol.

#117 RANDY on 01.18.18 at 9:44 pm

The Home Reno business will likely take a hit too. Sell your Lowe’s and Home Depot stock if you haven’t already.

#118 toronto1 on 01.18.18 at 9:55 pm

Markets will do what they always have- they all moves in waves or cycles- the RE cycle is starting to bottom out- truth is that it must bottom out for another boom to happen.

its simple math- in order for growth to continue in the RE market- buyers must take on new debt and mortgages, it appears that we have already past peak available credit so as credit contracts- so will house prices.

same with interest rates that are in their own cycle- the low rates have bottomed out never to see again in our lifetimes, and the normalization begins.

its human fallacy to believe that these cycles can be controlled, they can be manipulated and extended but what goes up must come down- just how the universe works……..

every generation gets to experience a stock market bust, Real estate market bust etc….

#119 domain on 01.18.18 at 9:57 pm

Mr. Turner,

I have a friend/colleague who was refinancing his home and investment condo today in Edmonton. His big-5 lender told him “they haven’t seen this number of people turn in their keys since the 80s”.

I’m not sure if this is hyperbole from the agent of the lender, but my colleague is died in the wool real estate fan, who is slowly changing his tune about his ‘portfolio’ of 100% real estate. When he made this comment to me, I took it as accurate given the fact that it was coming from him of all people.

So I would wager that there are things happening under the hood already, which will eventually ooze out of figures somewhere by the end of this quarter, whether it is earnings or real estate stats with divide by 0 errors…

#120 China House of Bubble Tea on 01.18.18 at 9:57 pm

GREAT NEWS — CHINA HOUSING MARKET CRASHING – UPDATE

China’s Housing Market Is Bursting Again; Should You Be Worried This Time?

https://www.zerohedge.com/news/2018-01-16/chinas-housing-market-bursting-again-should-you-be-worried-time

#121 Smoking Man on 01.18.18 at 9:57 pm

104 Smoking Man on 01.18.18 at 8:55 pm
DELETED
….

I know where the edge is. Had strong feeling I was going with this deleted post.

SCM you dodged a a dagger.

#122 nick on 01.18.18 at 9:58 pm

#112 Re: Mouldy Mil on 01.18.18 at 9:26 pm

All “benchmarks” and “indices” are lagging metrics.

#123 Mordko on 01.18.18 at 9:59 pm

I am keeping my HELOC, which makes up 1% of my net worth (no mortgage or other debt). The interest, which is tax deductible, is still very low, and far lower than expected gains on my investments. If the interest rate gets to 5% then I will pay it off right away, even though it would still be more profitable to carry some debt.

#124 april on 01.18.18 at 10:01 pm

#1 – and you would know……….right, yeah, thought so…….

#125 Cici on 01.18.18 at 10:06 pm

#42 Flop

Sorry to hear about the sad family situation, but you should probably reach out to your dad and try to forgive him: remember, no parent is perfect, yet most do really try…even if it appears otherwise. Sometimes they try too hard, and think they have your best interests in mind. Sometimes they just fail themselves, and don’t have the strength to come through for anyone else.

One thing is clear: it took a lot of guts for your dad to reach out to you and admit he failed you. Shows how much he does love and care for you.

Being estranged from you all these years has obviously caused him great pain, but now that he’s been diagnosed with cancer, he knows that he’s going to lose you for good this time. Having already almost lost you once, he’s damned scared and wants to at least let you know how much you always meant to him before he has to let you go.

Seen this movie before my friend, and trust me on this: reach out to him and forgive him. You’ll never have another chance, and you definitely won’t regret it.

#126 Newcomer on 01.18.18 at 10:16 pm

#60 FOUR FINGERS WATSON on 01.18.18 at 6:51 pm
…………which is precisely why further interest rate increases are not gonna happen. Too painful for all.
———-

Fair ball. Looking back over history, you can see that painful things just don’t happen. Who would be down with that?

#127 TheSecretCode on 01.18.18 at 10:32 pm

So you fled Vancouver and avoided Vicoria because it is almost the $$ of Vancouver now. Where did you go? Great to see you in Kelowna.

6 years ahead of you – been there doing that at a reasonable price as an investment property.

So the dream SFD comes in at a price of 590k – the neighborhood with the gold plated pension neighbors – you know, safe, clean, higher standard etc.

In 2011:

– the asset (house) price 558k.
– 20% / 111k down started me at around $2600 per month (all bs city expenses, taxes, etc in.) Doable, just barely.

Now:
– the realtor says list for 820k (lets go with 800k if I can find a fool)+242k from 2011, which is apparently a bargain.
– buyer puts out 160k for at least 20% down, to avoid some insurance and have some equity at the start, etc.
– The cost of money from just last year at the greasy credit union will cost you +399 per month more on this place.
– The cost of the increase in house price appreciation with the 20% down is another +866.
– Total increase to have this roof over your head is + $1,265 per month.

Get ready for this…to have my place at present at the price RE agents think it will go for in Kelowna will cost you:

$3,865 per month – all in, bare bones…just for the shelter – an sfd – in Kelowna, BC!!!!!!!! population: 124k.

btw – I am not selling. I am in at a price I can sustain with rent at breakeven getting the mortgage paid down.

But who in their right mind would jump at any of this now?

#128 TurnerNation on 01.18.18 at 10:35 pm

#2 Lee are you nuts ? Where else in the world will a tear down POS run 3/4 million…given our 50% total taxation rate too.
You are functionally insane; congrats on your functionalness – still a productive tax slave.

https://www.blogto.com/city/2018/01/everyones-shocked-toronto-real-estate-listing/

#129 Scully on 01.18.18 at 10:50 pm

#42 Flop
Well hell Flop. I’m really sorry to hear that. But there is hope your dad could live longer than his current prognosis depending on several factors (such as type and new therapies, as well as where it has metastasized to.) I was back in the chemo clinic today for my mom’s regular treatment. She needs me there to explain updates and I really don’t mind. She is not much older than your dad and was diagnosed with inoperable stage four cancer and three years later she’s going strong with the “disease” completely managed by IV infusions of targeted and immunotherapy drugs and now I am convinced she will outlive me ;)
I hope you reach out to your dad. It will give him such a boost. But I don’t know what happened or how deep the wound is so I think ultimately you have to make that decision. I wish you and your dad the best.

#130 D Apostrophe on 01.18.18 at 10:53 pm

Worse. Much worse. More logarithmic though in descent. Gen X will be first. Good news for the millennials though. And the deal of a lifetime for any of you with cash.

#131 Yorkville Renter on 01.18.18 at 10:56 pm

pleased as punch that my commercial mortgage is now on-par with residential mortgage rates… negotiated the renewal last Spring and went live in November.

now earning an extra $200+ a month on the same rental income.

life is good!

#132 conan on 01.18.18 at 10:57 pm

Needs more cow bell.

https://www.youtube.com/watch?v=mQZmCJUSC6g

#133 TheSecretCode on 01.18.18 at 10:59 pm

This is the market in Kelowna right now:

Bring a million dollars in cash and then you can buy any house no problem – but where is the million $$ originating?

Where is that money coming from?

Big pension retirees with a huge liquid nest egg OR a paid off house in one of the Metros – however that house needs to be sold to someone – and where does that money come from?

1. Dirty cash already bouncing around inside the country thanks to River Rock whales, speculators, the small RE crowd who was making a killing from it and from off shore still finding ways in.

Eby/German is working on the dirty cash problem and foreign money flows have slowed due to other countries being more aggressive than Canada, right at the time CBs are tightening around the globe.

This is the perfect storm that is going to wreak havoc on Canada. And nobody outside of Canada will care that much.

And if foreign investment blinks / bails just a little…mother of all corrections…ever! Cranes building the concrete towers will be at an immediate stand still nation wide.

Now, the RE market is not over in Canada and the cranes will keep going (with some disruptions) but this slow down is not a coincidence. In fact, it is planned and those plans are being leaked via empirical evidence on the ground in Canada.

Rents up? For those who don’t do math and realize how underwater they are on their rental properties while not being able to sell or not wanting to sell at a loss.

Avoid debt and hang onto your wallet.

This is a Canadian problem and we are going to be collateral damage from the CB moves that are going to try and tame wicked inflation and US dollar woes. You watch.

In fact move to another country where you can have fun with some disposable money left over.

I am sure most are sick of the “I’m broke” story around the Canadian dinner table – even though families are bringing in 80-100k.

#134 MF on 01.18.18 at 11:01 pm

#109 Currency on 01.18.18 at 9:21 pm

Yeah that one bothers me too.

Predicting anything is impossible for sure, but I believe the EURO should be about .80 cents per CAD and maybe .35 cents or less to the USD.

MF

#135 akashic record on 01.18.18 at 11:02 pm

#121 Smoking Man on 01.18.18 at 9:57 pm

104 Smoking Man on 01.18.18 at 8:55 pm
DELETED
….

I know where the edge is. Had strong feeling I was going with this deleted post.

SCM you dodged a a dagger.

You could just setup greaterfool-deleted.ca where people can publish the deleted comments, for the record and fun.

#136 MF on 01.18.18 at 11:06 pm

#42 For those about to flop… on 01.18.18 at 6:03 pm

Awful news flop. Really sorry to hear. Spend as much time with him as you can. Nothing is as important as family/health.

MF

#137 VicPaul on 01.18.18 at 11:06 pm

#55 Ian
The 90s didn’t have the absurd low interest rates that in large part have caused all this current problem.

___________

I believe you know better Ian. Low interest rates may have been the great inducement, but I think a confluence
of greed, low self-esteem (aka FOMO) and lack of fiscal awareness has led many to make choices that will lead to years of struggle. Rational folks read the play, saw the mania and stepped out of the way. Smokey, can’t we blame a teacher for all this?

Flop – heavy news…thanks to #51 Burnaby Boy for some good, positive advice. Best to you both.

M54BC

#138 TheSecretCode on 01.18.18 at 11:09 pm

C. Clark was not joking about the below:

2016

“Just a few months ago, Christy Clark told CTV that if people are concerned about housing affordability they should move to Fort St. John or Prince Rupert,”

And guess what is happening to those hard working up and coming people who don’t want to be bankrupted and can find work outside of Vancouver?

Where did the 9% shrinkage in Vancouver population go to Garth?

Refugees starting to settle in nicely in the rural still not affordable parts of BC who miscalculated the economic hit from lack of economy and jobs in these one-horse, nothing burger towns neck deep in snow.

ps…the gov loves this volatility.

#139 Long-Time Lurker on 01.18.18 at 11:11 pm

Flop, I hope your dad recovers and the two of you patch things up. Cici sounds like a smart cookie.

#125 Cici on 01.18.18 at 10:06 pm

Seen this movie before my friend, and trust me on this: reach out to him and forgive him. You’ll never have another chance, and you definitely won’t regret it.

Garth, if you ever end the blog it should be preserved in the National Library one day. You can send them the hard drive. Your blog is really a financial history of Canada recorded for years. It’s an historical record and could help future generations.

Anna, I hope you got out last year.

Here, Smokey. A cellphone video of a Sasquatch/Bigfoot. You can tell your American friends that in Canada they come to the back yard picnic table and we share a beer with them.

https://www.youtube.com/watch?v=H3t7mDe3SOo&feature=youtu.be

#140 Bottoms_Up on 01.18.18 at 11:13 pm

My variable rate has gone up 25% since summer. But I have fixed payments, so only the ratio of principle to interest changes.

#141 akashic record on 01.18.18 at 11:21 pm

#42 For those about to flop…

Forgiving and unconditional love is the medicine.

To you and your dad with the best wishes:
https://www.youtube.com/watch?v=NwUxXQlKvHs&index=6&list=RDEYyM60RlhCA

#142 Urban Exec on 01.18.18 at 11:21 pm

I’m a renter. Had a conversation with a guy who said I was nuts and that I missed out on some great gains in rising housing prices. The look on his face was priceless when I told him my portfolio gains in 2017 can pay my rent for the next 8 years. My rent is $2,700 per month in a house that is (was) worth $1.5M. You do the math.

#143 Ed. on 01.18.18 at 11:22 pm

#119 domain on 01.18.18 at 9:57 pm
I’m not sure if this is hyperbole from the agent of the lender, but my colleague is died in the wool real estate fan,
**********
I think you meant “dyed” rather than “died”. I only point it out as it is a rather sensitive topic this evening …..

In case you missed the posts, Flop’s old man is gonna snuff it soon.

#144 bubu on 01.18.18 at 11:31 pm

@ #119 domain

Edmonton is pretty stable market with low unemployment, gov. jobs, high income and not so crazy prices comparing with Vancouver and Toronto… your friend is not telling the truth….

#145 Chico on 01.18.18 at 11:37 pm

#63 millmech on 01.18.18 at 7:03 pm

#13
Do not worry about us renters, just keeps getting better and better.
Tons of suites for rent here in Langley BC for under $1000 all in for a 2bdrm, just got to look for the over extended landlords who need the money and there are lots in my area. As the rates rise there will be way more suites coming on the market as all the owners feel the noose tightening, more competition equals lower rents.
A co worker got a 2bdrm for $900/mth because he paid a year upfront, they know your staying and if your good tenants they will not raise your rent.
As for missing out financially not a chance, already up four years rent so far this year. I could easily buy the place I am renting in, but alas the taxes, upkeep, electricity, gas, internet, cable and yard maintenance(all included) would be over twice what I pay in rent easily.
Go BOC and raise those rates!

———————-

What parts of Langley are you referring to? Our family left Brookswood as renters and came out to Nova Scotia almost 2 years ago. If what you’re saying is true, it’s good news because things were getting so bad.

#146 Deplorable Dude on 01.18.18 at 11:38 pm

#Releasethememo…now trending top on Twitter.

The biggest political scandal in history is about to hit.

Today….

“The House must immediately make public the memo prepared by the Intelligence Committee regarding the FBI and the Department of Justice. The facts contained in this memo are jaw-dropping and demand full transparency. There is no higher priority than the release of this information to preserve our democracy”….
Congressman Matt Gaetz.

REP. MARK MEADOWS (R-NC): I was “shocked” by what I read in the FISA abuse report, “would think that it would never happen in a country that loves freedom!”

Wikileaks today is offering a $1M reward for the memo.

Calling it now….not only was the Trump campaign illegally spied on by the fbi/doj, they spied on the whole family, including ‘intimate relations’

The msn won’t be able to ignore this much longer.

#147 Whipster on 01.18.18 at 11:38 pm

Hey flop….Sorry to hear about your dad. Losing touch for years is painful, but You will never regret opening up those lines of communication and reconnecting. All the best to you and yours. Peace.

#148 Chico on 01.18.18 at 11:52 pm

#42 For those about to flop… on 01.18.18 at 6:03 pm

——————————–

About 16 years ago I was in a group setting, listening to an exchange between a psychologist and a woman whose father had sexually abused her and her 2 sisters when they were kids. The counselor asked “where was your mother?” The lady said that her Mom was right there in the home. The councilor told her that “she didn’t have a mother.” Her explanation made sense to me. The mother’s role, like the father’s, is to protect the child, regardless the cost.

A light went on for me about my own bio dad, who lived in the same small city as me but never reached out to build a relationship with me. I ran into him in the mall and was about 10 and was completely flustered. Until the age of 36, I had felt some sort of guilt until I came to grips with the simple and obvious fact that “I didn’t have a dad.” He got my mom pregnant, and abandoned me, whereas my status as “dad” of 3 children is based on how I care for, protect, guide, worry about my kids.

I have said for years…that unless you back it up with loving, respectful behavior, biology doesn’t mean anything. 85% of the people that suffer physical, sexual, verbal abuse, do so at the hands of biologically/marriage related people.

#149 Screwed Canadian Millenial on 01.19.18 at 12:06 am

#121 Smoking Man on 01.18.18 at 9:57 pm
104 Smoking Man on 01.18.18 at 8:55 pm
DELETED
….

I know where the edge is. Had strong feeling I was going with this deleted post.

SCM you dodged a a dagger.

——————–

Don’t make me get my lesbionic cult to take you down Smokey. What did I dodge? Another rant by you about how your billionaire globalist gods Soros, Buffett, Bezos, Gates, etc need more tax cuts and more wealth because it’s all going to trickle down on you? Gimme a break!

#150 Tony on 01.19.18 at 12:29 am

First time posting , but I just want to thank Garth for all these years of guiding me in the right direction and keeping me informed in these crazy times , nobody else does so thank u Garth!

#151 morrey on 01.19.18 at 1:01 am

“but an outright ban on foreign ownership would be more honest and effective. In the absence of serious civil unrest, however, such “extreme” measures are unlikely to be implemented. Money talks — indeed, somewhat ironically, major resistance comes from thousands of local resident property-owners whose houses have made them millionaires and who are loath to give up their unearned bounty”.

#152 Lead Paint on 01.19.18 at 1:20 am

#85 Mayor of Milton on 01.18.18 at 8:06 pm

LOL you got my vote!

#153 Steve on 01.19.18 at 1:31 am

#42 , #125

Yes forgive now. I just went through this kind of nightmare. Lost my dad last March. Cancer. Seven year battle. Also a brutal parent. I’d do anything to hug him again and tell him I love him. I know he loved us. Your dad loves you man.

#154 Newcomer on 01.19.18 at 1:50 am

#91 Angie on 01.18.18 at 8:15 pm
——

You are right. (And my guess is that you read Mr. Money Mustache — love that guy!)

One of the under-reported costs of home ownership is the constant renovation. People spend multiple years worth of salary every few years improving houses that were basically fine. And they never, ever enjoy the experience. Everyone hates their contractor.

If a renter really starts hating their kitchen, they can just move.

#155 Auto Flop on 01.19.18 at 2:53 am

Not in Real Estate Biz, but here in Vancouver Car sales have tanked the past few months big time… somethings up

#156 Hicksville Alberta on 01.19.18 at 4:19 am

#42 flop and #51 Burnaby Boy ( on cancer )

Sorry this might not be relevant to the usual discussion and bantering here but for those in the fight it might be worth a look.

A friend was diagnosed with an aggressive form of throat cancer in mid July last year and the clinic pressed him hard and quite relentlessly for the operation, radiation, chemo treatment protocol.

When he went back to his family, a sister and cousin became involved and he went on and is on an ingestion treatment of cannabinoids/ cannabis that has so far cleaned up all the swelling and has also significantly reduced the actual size of the growth and the treatments are ongoing.

Since then, the mother in law of another member of that family has come up with colon cancer and the family is treating her with cannabinoids as well and i’ve been told that the treatments are working in her case.

Dietary modification and especially elimination of sugar/ glucose is being used as well as stress management, etc…

I have been in close contact with him through his journey as he is living with his sister in Hicksville and i have seen the changes and so far it has been amazing to me.

There are more and more articles and testimonials for such treatments showing up on the internet and on youtube and it might be worthwhile for anyone exposed to this to take a look.

There are even some doctors in Canada that are specialising in cannabis treatments for cancers and other medical issues now.

I’ve got nothing to sell in this and almost feel like an ogre discussing it because most think you are either a pothead or weirdo when you talk about other possibilities to the prevailing medical protocols.

My thoughts are with both of you in your times and as well with all others exposed to or dealing with this or any other serious medical issues at any time.

#157 Howard on 01.19.18 at 6:15 am

Fancy moving to flyover country?

Saskatoon Only Canadian City On New York Times’ List Of 52 Places To Visit In 2018

http://www.huffingtonpost.ca/2018/01/10/saskatoon-only-canadian-city-on-new-york-times-list-of-52-places-to-visit-in-2018_a_23329860/

#158 No. 3 of the Majestic 12 on 01.19.18 at 6:36 am

Flop……

Regret for the things we did can be tempered by time; it is regret for the things we did not do that is inconsolable.

—Sydney J. Harris

Matthew 6:14-15

—God

You have the power to gift your Dad the passing of peace that only forgiveness can bestow—may your own demise be so blessed.
Pick up the phone.

#159 Millenial on 01.19.18 at 6:48 am

Garth,
A FISA court abuse memo was released yesterday to the House of Representatives. Currently classified, but it’s going to become public. I think this is going to be huge. Stay tuned….

#160 LivinLarge on 01.19.18 at 7:14 am


its human fallacy to believe that these cycles can be controlled, they can be manipulated and extended but what goes up must come down- just how the universe works……..

every generation gets to experience a stock market bust, Real estate market bust etc….”….someone gets it.

Don’t worry, be happy.

#161 LivinLarge on 01.19.18 at 7:24 am

“EURO just kept rising, who knows why?
It’s c$ 1.52 at the moment, crying out loud.
How come a European Market in such dire circumstances has such a rock solid currency?
I don’t get it.”…did you really play in the Forex market without understanding why a collapse and Eurozone expulsion for Greece was the best solution?

If they’d booted Greece, Spain and Italy to the curb at the same time then we’d be looking at maybe a $3 € today.

#162 Hamilton on 01.19.18 at 7:25 am

Mouldy Millenial sorry to burst your bubble but there is no way Toronto is getting Amazon.

Chicago would be a good bet.

#163 crowdedelevatorfartz on 01.19.18 at 7:35 am

@#42 Flop
Crappy news.
You should talk to him because you dont want to spend the rest of your life wondering maybe I should have.
And if you find he hasnt changed, at least you made the effort.

#164 maxx on 01.19.18 at 7:36 am

#13 Rents Rocketing on 01.18.18 at 5:28 pm

“Rents will soon swell with the new B20 rules as those who do not have credit to buy will place pressure on existing rental stock – because everyone needs shelter. There will be a lot more competition in hot markets with already near zero vacancy rates.”

And where precisely do you think they are living now?
Anyone having gambled on serial rental properties as a cash-flow strategy has my deepest sympathies.
This is a recipe for permanent financial disaster (read unrecoverable financial error) from which it is becoming increasingly difficult to extricate yourself.

Lucky souls who haven’t yet gone down this path would be wise to look closely at the cash-flow losers who think that they are big players at this game.

The true big players are overwhelmingly the ones who win no matter the state of the economy.

In this state of economic flux, as interest rates rise, job quality deteriorates (even with job numbers increasing) and the cost of living going up, I wouldn’t budge in the direction of rental “investment”.

Money, as I’ve said many a time before, is hard to get and even harder to hang on to.

Btw, my rent hasn’t gone up in 7 years+.

#165 maxx on 01.19.18 at 7:39 am

#14 YVRMC on 01.18.18 at 5:28 pm

“It will be interesting to watch the fall of prices in the RE market… when will they begin in earnest. How deep and steep will be the slide. How long does it last and where is rock bottom ?”

Smart buyers won’t be putting a floor under this inevitable mess.

#166 crowdedelevatorfartz on 01.19.18 at 7:54 am

@#85 Mayor of Milton.

I’m thinking of moving from “No fun City”(aka Vancouver).
Your description of monotone Milton has me intrigued.
You had me when you said Screwed Canadian Millenial was moving in and I might possibly be a neighbor. Then when you mentioned “frumpy house frau” I was sold.
Would I be allowed to paint my beige townhome some other nonconfrontational color? Off white? Gray?
Would the town council allow it?
It there an anti idling bylaw or have the oligarch’s that own Tims bribed a majority of councillors to “look the other way”?
Anyway.
Im drawing up my immigration exit papers as we speak since Vancouver is like the Hell’s Angels.
Once yer in….you never leave.
So…..w ish me luck and hope to see you in the muddy slushy Ides of March

#167 Steven Rowlandson on 01.19.18 at 8:01 am

“It will take time for the new reality to sink in, and be translated into changes in market supply and demand. But it seems a no-brainer listings will increase and the pool of buyers shrink as credit is restricted and tens of thousands of purchasers are shut out. More supply, Less demand. Prices fall.”

Probably not enough to make a difference and in a pinch the government will import a third of a million potential home buyers.

#168 MF on 01.19.18 at 8:03 am

#161 LivinLarge on 01.19.18 at 7:24

Nope. If those countries were “booted out” then it would just hasten the inevitable collapse. A lot of the smaller countries want out already. Fed up with the clueless snobs in Brussels.

The “euro” should be about .35 per USD. Maybe less.

MF

#169 ben on 01.19.18 at 8:16 am

So the rest of Canada complains to Quebec about transfer payments. Yet now it turns out while Quebec workers were busy working the rest of Canada were printing via land.

This is why measures like GDP are highly misleading. $211bn and yet very little actual wealth *created*. Lots *appropriated* by asking future generations to pay more for the same pile of bricks, but not so much actual work.

This is why you have to regulate the banks. They are a cancer on society.

#170 maxx on 01.19.18 at 8:19 am

#33 I foolishly thinks I realy know something on 01.18.18 at 5:50 pm

“We live in a FIRE economy. Poloz will be employed in the FIRE economy in the near future. Many other politicians will be as well. For instance, many will serve on the BOD for many government friendly corporations. These are the corporations that lobby and take them to lunch on a daily basis. So, no need to worry. The people in power will not let things get out of hand. If RE and the economy is indeed affected so badly by a slight rate increase, then they will take measures to ensure that it lands softly and deficits be damned. The national debt doesn’t scare them at all. That has been amply demonstrated these last few years. The people in power know who butters their toast.”

PIPs don’t give a hoot about who gets stuck under the wheels of the economic bus.

They have a macro view. Period.

They do however, belong to an entirely different societal stratum than the average joe, which makes them pretty well impervious to diddly little movements of rate increases……

……unlike borrowers with HELOCS, etc, drowning in consumer debt. They’re quaking in their boots – that’s the tragedy when you get sucked in by banks, advertising lifestyles of the rich and shopping at low, low rates. You know, the ones with 6 colourful bags per arm akimbo, smiles all around, and fools finding stacks of cash in the attic. That dangerous, schlock advertising.

#171 Rooster on 01.19.18 at 9:06 am

The Dear Gerta column today is full of sad stories (major bummers). Sincere sympathies to all.

A reminder of what’s really important. (hint – rhymes with wealth).

My philosophy: Count your blessings and leave nothing behind for the taxman.

My advice: Give somebody a hug today, but only if you are not in a position of power.

#172 Blackdog on 01.19.18 at 9:16 am

@#125 Cicci, You made me tear up with your comment. Wise advice. I hope Flop takes it.

#173 Andrew t on 01.19.18 at 9:24 am

Rents Rocketing on 01.18.18 at 5:28 pm
Rents will soon swell with the new B20 rules as those who do not have credit to buy will place pressure on existing rental stock – because everyone needs shelter. There will be a lot more competition in hot markets with already near zero vacancy rates.

Sure, there will be some more rental houses on the market from speculators cracking under the pressure, but local rental demand will absorb them as there will be more ‘rejected B20 potential buyers’ than houses on the market from speculators.

The irony is that due to more competition for scarce rentals, renters will soon be paying more than the mortgage/insurance of owners who bought their houses under the old rules and cheaper mortgages.

And owners will sell when they want, and renters will continue to be in a precarious posiiton waiting for the next eviction – in the bigger markets like Van, TO and Victoria.

For those sideline renters in major bubble markets cheering on B20, you might have just caused rent increases and even less security of tenure. Good job.

So not only have the smart sideline renters missed out on lifetime capital gains, but their decision will eventually result in them paying

And all of this will take place over many many years as prices melt – they are sticky on the way down remember?.

So I hope those renters who invested wisely for years can absorb the rent increases; that they can deal with the constant fear of being evicted as some landlords will cash in on past captial appeciation; that their partners and kids can understand the need to be constantly moving; and have the patience for years as price melts take years and years, especially after a decade bull run.

See you in five years till waiting for the correction…

You are wrong about rents. – Garth

——

Most people in financial distress because of this will simply become prisoners of their primary residence. Kids will continue to live at home, or move back. All those investment properties/condos alone will put huge downward pressure on rents.

#174 mike from mtl on 01.19.18 at 9:32 am

#162 Hamilton on 01.19.18 at 7:25 am
Mouldy Millenial sorry to burst your bubble but there is no way Toronto is getting Amazon.

Chicago would be a good bet.

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

Exactly. Why they would start a significant footprint in a ‘foreign’ country?

Montreal was ‘..very disappointed..’ – again why would they want to deal a super high tax, poor transportation infrastructure and third-world-esque language laws? OLF would be on their butts to force their signage to “Les distributeurs Amazon” and set up a committee that tracks French language software usage/quotas and documentation. If you think I’m making this up, I’m not.

My guess would be somewhere in flyoverland or the southeast USA.

#175 Penny Henny on 01.19.18 at 9:35 am

What is happening with Bitcoin?
The price has been relatively steady for a whole day now.

#176 the ryguy on 01.19.18 at 9:40 am

#159 Millenial on 01.19.18 at 6:48 am
—————————————————

Yup. All the information is available if you want. I don’t know the official “content” but I know what happened, people much smarter than me have connected all the dots.

Hilary and Obama are major criminals and people will be shocked..this is the tip of the iceberg..makes one wonder why Socks gave 20M of Canadian Tax payer dollars to the Clinton Foundation.

Oh well its a RE blog..dont buy folks, if you can still sell and get out with a small loss or profit, Id recommend doing so.

#177 soost on 01.19.18 at 9:42 am

Hey did anyone notice their paycheck dwindling too? Higher marginal rates, limited sprinkling opportunities. Here in Ontario, we have sky high electricity and gestapo style regulatory bodies (with unlimited resources) knocking down the door.

There is no money or incentive to create wealth in a small business anymore. Soon we won’t be able to leverage to start one even if we so desired.

Who is going to generate this wealth (to buy houses and stuff)? Big corporations who will become monoliths and eliminate jobs in search of “efficiencies.”?

This government is actually treating the industrious little guy as public enemy #1 in the name of the proletariat. In doing so they will slaughter this economy.

What a confusing tangential rant. I’m out

#178 Ace Goodheart on 01.19.18 at 9:47 am

Re: Bitcoin and crypto bulls: still missing the point. Cryptos like Bitcoin aren’t used for anything. They have no earnings. Bitcoin is useless as a currency. When you buy a coin you are buying the answer to an algorithm.

All the pretty pics of gold coins with a nice symbol on them are not real. You don’t get a coin. You get a bunch of zeros on a computer screen.

Who is going to pay a $50US transaction fee to use a “currency” whose value fluctuates 40% or more each week?

I can use my Visa for free and so long as I pay the balance each month there is no interest. And I even get points.

I am sorry to burst the bubble but I would never use Bitcoin to buy anything. It has no use to me as a currency

#179 Alistair McLaughlin on 01.19.18 at 9:55 am

@ #83, regarding your question about debt to disposable income:

In 1990, for every $100 in income, the average household owed $88 . Today, for every $100 in income, the average household owes $173.

Aggregate household debt was 54.4% of GDP in 1990. Today it is 101%.

These numbers are all from StatsCan’s CANSIM table 378-0123.

#180 Duke on 01.19.18 at 10:02 am

#23 Screwed Canadian Millenial on 01.18.18 at 5:40 pm
Canadian wages have been stagnant for decades because of a massive over-saturation of the labour market. This is what has led to the debt bubble. Low interest rates haven’t helped of course.

Canadians’ Real Wages Are Shrinking. Is That Why We’re Falling Into An ‘Endless Debt Cycle’?
http://www.huffingtonpost.ca/2017/07/11/canadians-real-wages-are-shrinking-is-that-why-were-falling-i_a_23025302/

Politicians (Garth included) have lost sight of what the purpose of the economy is. It is to maintain FULL employment and solid, rising wages for workers. In times of economic distress and heavy slack in the labour market, of course it makes all the sense in the world to reduce immigration intake. This isn’t racist, it’s basic economics. Even Trudeau Sr. understood this in the early 80s when he reduced annual migration intake to below 100,000 for a number of years.

When we get down to 3-4% unemployment like we had in the 60s, solid wage growth and job openings are plentiful then of course it makes sense to increase immigration intake. But that’s not where we are today.

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

You are spot on! This debt bubble will hurt Canadian economy badly.

#181 Craig on 01.19.18 at 10:03 am

“So, two-thirds of borrowers haven’t been reducing their debt load by a penny – even during a time when the cost of money’s been incredibly low. What a losing strategy.”

Just because people haven’t repaid their loans doesn’t mean they aren’t able to do so.

I think carrying debt now makes sense if you’re putting it to work for you. I think it makes sense to borrow when rates are low.

I’m in no hurry to pay off my loan when it’s costing me less than 3% and I have an equivalent amount invested in the market earning more than 6%.

When rates rise some more and returns level off I’ll re-examine.

#182 Flyboy on 01.19.18 at 10:10 am

Come on Hamiltonians buy my house!

https://www.thespec.com/news-story/8081094-new-influx-of-toronto-house-seekers-eyeing-hamilton/

#183 Old Ron the Realtor on 01.19.18 at 10:11 am

Everyone from Royal Lepage CEO to Toronto Star Real Estate Cheerleader is touting 2018 as a boffo year.

I guess we get out first clue in two weeks, when the TREB January data dump hits the streets.

Until I see some hard numbers, I will stick to my previous call:

That there will be a sizeable drop in the number of sales from the 93,394 we had in 2017. If you pro-rate the last 6 months you get around 75,000 for all of 2018. That would suggest a flat to slightly lower average price.

BUT we will know a lot more in two weeks.

#184 Smoking Man on 01.19.18 at 10:12 am

It’s over for the Democrats

#ReleasetheMemo

#185 Mr. PE on 01.19.18 at 10:13 am

Garth, thanks for the informative and entertaining blog. I read your posts every morning with my breakfast.

Regarding your comment about 2% of GDP coming from real estate commissions, I don’t that’s entirely accurate.

According to the below CBC article, the 2% includes items such as land transfer taxes, legal fees, inspection fees as well as real estate commissions.

http://www.cbc.ca/news/business/real-estate-fees-home-sales-1.4226630

I think a case can be made that half the 2% would be real estate commissions.

#186 Smoking Man on 01.19.18 at 10:24 am

#149 Screwed Canadian Millenial on 01.19.18 at 12:06 am
#121 Smoking Man on 01.18.18 at 9:57 pm
104 Smoking Man on 01.18.18 at 8:55 pm
DELETED
….

I know where the edge is. Had strong feeling I was going with this deleted post.

SCM you dodged a a dagger.

——————–

Don’t make me get my lesbionic cult to take you down Smokey. What did I dodge? Another rant by you about how your billionaire globalist gods Soros, Buffett, Bezos, Gates, etc need more tax cuts and more wealth because it’s all going to trickle down on you? Gimme a break!
….

I despise every single one of the globiats you mention.
But taxation is theft. Pure and simple.

#187 Paul on 01.19.18 at 10:49 am

You go Justin.

http://www.cbc.ca/news/opinion/summer-jobs-program-1.4491602

#188 IHCTD9 on 01.19.18 at 10:52 am

Well dogs, soon I’ll be bailing out of work early like I do every Friday. This is done because I don’t need the money, plus the boss loves it when I do 100% of the work in 50% of the time. I have other things to do.

I’m looking forward to a weekend of continued home improvements and upgrades – nearly done. Saved a bundle doing it myself with some help from my boys (they NEED to learn this stuff). No taxes paid on labour not sublet.

Depending on how things go, I may also sneak into the shop over the weekend to carry on with operation NPFS (not paying for stupid) revenue reducer plan. Milling machines and lathes leaving swarf on the floor and money in my wallet. Sorry about your luck Justin and Bill (and whoever comes afterwards).

This would have been a great winter to have been up and running with all NPFS ordinances firing with hot barrels. It’s been a high energy use year so far.

In the meantime, I’ll keep collecting free BTU’s from the mailbox, and keeping warm via tight nose/grindstone proximity.

#189 Paul on 01.19.18 at 11:00 am

#171 Rooster on 01.19.18 at 9:06 am

My advice: Give somebody a hug today, but only if you are not in a position of power.
——————————————————————-
Just to be on the safe side this is how I get my Hugs.

https://www.youtube.com/watch?v=MWGciuLuH8k

#190 Lee on 01.19.18 at 11:27 am

The DOW has gone up along with the S&P 500 by about 12% a year for the last 4 years. I do not believe this unsustainable nor is it correction territory. Maybe 10% short-term correction. I was going to sell some of my US equity ETFs but I think I’ll wait another 15%.

#191 n1tro on 01.19.18 at 11:28 am

#178 Ace Goodheart on 01.19.18 at 9:47 am
Re: Bitcoin and crypto bulls: still missing the point.
————–
Some people are missing the point, it’s still a debate as to whom.

Cryptos like Bitcoin aren’t used for anything. They have no earnings.
———————-
Your statement below about people paying high transaction fees using bitcoin to pay for stuff contradicts your statement of it not being used for anything. As for the second part, does any currency or gold for that matter earn anything?

Bitcoin is useless as a currency.
—————–
Time will tell but i find it interesting there is so much FUD and regulation proposed for something “useless”. Why not let it die on it’s own??

When you buy a coin you are buying the answer to an algorithm.
———————
Does it make you feel better that you trade your labor for little pieces of paper or polymer that the government decrees is the only form of payment they will accept for you to pay taxes?

All the pretty pics of gold coins with a nice symbol on them are not real. You don’t get a coin. You get a bunch of zeros on a computer screen.
————————
Your direct deposits or credit card balance are a bunch of zeros on a computer screen.

Who is going to pay a $50US transaction fee to use a “currency” whose value fluctuates 40% or more each week?
——————
Apparently a lot of people. So much so that goverments, banks, wall street types have to go on record warning us of ponzis, fraud, etc, etc

I can use my Visa for free and so long as I pay the balance each month there is no interest. And I even get points.
—————–
Key words….”so long as I pay the balance each month”. The vendors who accept your credit card pay the fees for transactions.

I am sorry to burst the bubble but I would never use Bitcoin to buy anything. It has no use to me as a currency
—————–
To each his own.

#192 yorkville renter on 01.19.18 at 11:29 am

#183 That there will be a sizeable drop in the number of sales from the 93,394 we had in 2017. If you pro-rate the last 6 months you get around 75,000 for all of 2018. That would suggest a flat to slightly lower average price.

You think a 20% drop in volume will lead to flat prices?

With increases in mortgage rates, reduced sentiment about RE and inventory growing?

Why? Is it based solely on what Royal LePage’s CEO and TorStar says?

C’mon Ron – give your head a shake.

#193 LivinLarge on 01.19.18 at 11:35 am


Nope. If those countries were “booted out” then it would just hasten the inevitable collapse. A lot of the smaller countries want out already. Fed up with the clueless snobs in Brussels.

The “euro” should be about .35 per USD. Maybe less.

MF”…if it were only true MF…if only.

I live there 5 months a year and there may be a lot of chatter on this side of the pond but it’s not at all the same over there. “Some” populist parties pushing for it for sure but until those marginal players become the government, it’s all just cafe banter.

Brexit will certainly dump on the $€ but as long as Germany and France remain the power in the union there’s stability. Taxing the UK out of the union’s budget will not be pretty but that’s what happens when you remove an economic powerhouse vs removing a country like Greece that is a net economic drainer.

My French notary said last year “if you have a leg that is paralyzed and you cut it off, you can hop around a lot faster than before you amputatd it”.

#194 Duke on 01.19.18 at 11:45 am

#40 Mouldy Millenial on 01.18.18 at 6:02 pm
Prices up 10% YOY in Toronto. When Toronto gets the new Amazon HQ2, it will do to that city what the Olympics did to Vancouver.

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

Amazon’s HQ2 in Toronto? Ha! There is no way they choose Toronto over other cities in US. There is 0.0001% probability.

#195 IHCTD9 on 01.19.18 at 11:47 am

Small businesses are going to fall off a cliff in Ontario. No reason to start a new one, so as the old ones get gobbled up or fail, new ones will be few and far between.

I look forward to a landscape of mega corps employing very few, along with a rock hard division between the haves and have not.

At the bottom of it will be our dumbass governments who got this ball rolling years ago, with ever consistent prodding ever since.

#196 OttawaMike on 01.19.18 at 11:52 am

Skip the million dollar crap shack in Toronto and go directly to a 5000 sq ft church house for $399k:

https://www.realtor.ca/Residential/Single-Family/18912598/411-DUNDAS-ST-DESERONTO-Ontario-K0K1X0

#197 Duke on 01.19.18 at 11:54 am

#174 mike from mtl on 01.19.18 at 9:32 am
#162 Hamilton on 01.19.18 at 7:25 am
Mouldy Millenial sorry to burst your bubble but there is no way Toronto is getting Amazon.

Chicago would be a good bet.

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

Exactly. Why they would start a significant footprint in a ‘foreign’ country?

Montreal was ‘..very disappointed..’ – again why would they want to deal a super high tax, poor transportation infrastructure and third-world-esque language laws? OLF would be on their butts to force their signage to “Les distributeurs Amazon” and set up a committee that tracks French language software usage/quotas and documentation. If you think I’m making this up, I’m not.

My guess would be somewhere in flyoverland or the southeast USA.

===========

Absolutely. It seems that Raleigh NC or Atlanta GA will get it.

#198 CHERRY BLOSSOM on 01.19.18 at 12:05 pm

DELETED

#199 Victor V on 01.19.18 at 12:12 pm

Morneau was reassured about higher Canadian rates last summer

https://www.bnn.ca/morneau-was-reassured-about-higher-canadian-rates-last-summer-1.972703

Canadian government officials reassured Finance Minister Bill Morneau last summer to not worry too much about coming hikes in interest rates, claiming they would be easily absorbed by the nation’s growing economy.

In an analysis delivered to Morneau in August on the impact of higher rates, the finance department said the extent of likely increases — based on economist expectations at the time — would be gradual and take place within a backdrop of a growing economy. The memo was obtained by Bloomberg News through a freedom of information request.

The report was produced after a rate hike by the Bank of Canada in July caused some consternation in Prime Minister Justin Trudeau’s Liberal government, with officials fearing higher borrowing costs could inadvertently trigger a downturn.

“Given the slow and gradual character of this expected tightening cycle, it is most likely that the economy will very steadily absorb projected interest rate increases,” the 11-page memo said, citing “gradual adjustments to consumption, savings and investment.”

#200 Dead Cat Bounce on 01.19.18 at 12:20 pm

Flop,
Sorry to hear about your father.
My 2 cents… go see him, at least a visit.

I’ve been there, (almost 20 years ago) he was a fighter, but passed a few years later. I sometimes feel I could have done more, but I’m thankful for at least fixing some things before he was gone.
M54BC

#201 Doug in London on 01.19.18 at 12:21 pm

Now you know why I’ve been so amused by all the genius posters here who said the Bank of Canada would NEVER increase interest rates. Everything goes full circle eventually.

#202 Happy Housing Crash Everyone! on 01.19.18 at 12:27 pm

You delusional SHYSTERS are such idiots its not even funny. Either that or you are the biggest scumbag SHYSTERS the world has ever seen. SHYSTERS are reaching [email protected] heights. Al SHYSTER on CP24 kicking and screaming and crying for sellers to not flood the market. How anyone can not see the LIAR in his face is beyond me. SHYSTERS telling big lies in hopes it works. Fact is no one
Can qualify to pay more for houses. NO ONE CAN. It mathematically impossible. You can lie and scream whatever fairy tale you SHYSTERS can think of but prices are and will continue to crash.

Happy Housing Crash Everyone! :-)

#203 Ezzy - The Un-Screwed Canadian Millenial on 01.19.18 at 1:00 pm

I was in a Walmart last night (I know what a sin) and right at the entrance I found a display area holding dozens of scanning devices. At first I thought they were just price checkers, but upon closer inspection I was surprised to see that they’re actually designed to scan the barcodes of product you want to buy and store all of them. When you get to the automated registers you simply use the handheld device to scan a barcode on the register, which then produces a barcode on the screen of your handheld device. Once you have that you then scan that same barcode into the register and it produces your entire list of items, leaving you only with the task of paying. How’s that for automation?! I was smitten by the tech because I hate the way my produce (at practically any store I visit) is treated by apathetic cashiers. Give it a year or so and it’ll have had an effect on the number of employees Walmart hires for the sake of cashing people out. Still, at least those left employed will be making $15 /hour. For how much longer, though, is the real question.

#204 Guy in Calgary on 01.19.18 at 1:51 pm

#46 Those 2s that keep coming up

I assure you that it is not all millenials that are over extended. I am ground zero working at a financial institution and they are MAYBE 50% of those that are in trouble. Keeping up with the jones’ is not a new concept and not just millenials fell into the trap.

#205 Newcomer on 01.19.18 at 1:55 pm

#186 Smoking Man on 01.19.18 at 10:24 am

But taxation is theft. Pure and simple.
—-

You are a smart man so it surprises me to see you make a statement like that. Very few things are pure and simple.

You are a big fan of driving on the roads that your neighbors paid for, and you are reaping the benefits of having defeated the Nazis with the army that other people parents paid for. Does that make you a receiver of stolen goods?

#206 Ace Goodheart on 01.19.18 at 1:55 pm

RE: #191 n1tro on 01.19.18 at 11:28 am

Bitcoin and the other cryptos are useless, Nitro. I’m sorry but that is just the way it is.

Bitcoin was promoted very heavily (there is a documentary on Netflix about this) and people started buying it. Due to the way the holdings are set up, with only a small group of people holding most of the “coins”, there was increased demand, leading to a price bubble.

Bitcoin went up in price. Everyone piled on. I called the top of bitcoin at roughly $22,000 CDN a few weeks back and I was right, it crashed shortly thereafter and is still crashing.

The result of bitcoin’s price increase was that people started creating Cryptos. This was easy as the bitcoin software is open source. About 5000 cryptos have been created to date. There are websites where people discuss which ones to buy and which ones will be the next bitcoin (and go up in value by thousands of percentage points).

They are regulating cryptos because people are losing money on them and they are a dangerous, ponzi scheme- like investment. They also regulate gambling, criminal offences, traffic violations and other things that do not create any value but put people and/or property at risk.

Yes people have actually tried to purchase things with bitcoin. Three or four days later the transaction usually goes through (unless the exchange gets hacked, which happens about every other week) and yes it costs around $50.00 US. By the time the transaction goes through, bitcoin may have lost or gained 40% or more of its value.

Bitcoin and the cryptos are a stupid bet, that is all. Bitcoin is the child of very successful promoters, who are all for the most part now very wealthy (they sold their coins early on in the process, for good US dollars that they can actually spend). Whether it goes up any more, is really determined by how dumb human beings are.

If history is any guide, humans are pretty dumb. So it might have a few more rallies before people realize what a waste of time it is.

#207 Penny Henny on 01.19.18 at 2:09 pm

Thanks Ottawa Mike #196.
That was awesome

#208 Mike in Edm on 01.19.18 at 2:10 pm

#108 Jon on 01.18.18 at 9:21 pm
Mike in edm on btc. What is your one month target
*********************
No idea. Anyone predicting what it’ll be at in a month is purely a guess. Could be $5k, could be $15k, could be $0. I’ve got my little bit and don’t plan on day trading it, so I really don’t care what it’s worth in a month.

#71 #24 Mike in Edm on 01.18.18 at 7:16 pm
What a pile of crap. You read all that on CNN. Bitcoin isn’t an investment or a currency. It’s a modern figment of imagination which the sheeple are gambling on because other sheeple are. You strike me as a crypto dilettante.
************************
LOL, all you heard from my entire post was “Bitcoin”. Continue on your way, I’ll continue on mine.

#209 Asleep at the switch on 01.19.18 at 2:27 pm

We agreed Garth…..sold our 80 year old house on the westside of Vancouver 16 months ago (nailed it) ……offshore buyer

Rented a nice house a few blocks away thru a Richmond based property manager (guess what that means?) …..offshore owner.

Accidentally opened Notice of Assessment from Rev Can (address to owner) …. TOTAL INCOME $16k!!!!

Our politicians are asleep at the switch!

#210 Stan Brooks on 01.19.18 at 2:32 pm

Will they remove the ‘right of sucker’ fees?

https://ca.finance.yahoo.com/news/rise-duty-free-allowance-could-173626496.html

don’t hold your breath.

#211 maxx on 01.19.18 at 3:04 pm

#36 IM in C on 01.18.18 at 5:57 pm

“More supply, Less demand. Prices fall.
That is the theory
What you will see in the housing sector is prices stay flat. People will sit on their houses rather then sell at a loss

What ‘loss’? – Garth”

I’m seeing skeletons covered in cobwebs sitting on the front porch chair…….with a squeaking realtard sign hanging from the one remaining hook blowing in the breeze. Piles of empty KD boxes sit in the recycling waiting to hit the curb…..

#212 Tony on 01.19.18 at 3:05 pm

Re: #13 Rents Rocketing on 01.18.18 at 5:28 pm

Rents have fallen about 20 percent over the last two and a half years in America’s pricier cities. Home prices have barely even fallen yet. The exact same thing will happen here but rents will fall even more as prices keep on falling in the GTA and greater Vancouver area.

#213 maxx on 01.19.18 at 3:12 pm

#42 For those about to flop… on 01.18.18 at 6:03 pm

I’m clumsy at this, but I don’t care. My heart goes out to you. Very best wishes.

#214 Tony on 01.19.18 at 3:15 pm

Re: #190 Lee on 01.19.18 at 11:27 am

My guess is the computer programs will allow for a down month on the DOW this month of April. If history is any gauge the best month for the stock market is always May since the computer programmers know about the line that starts with sell in May.

#215 Tony on 01.19.18 at 3:23 pm

Re: #175 Penny Henny on 01.19.18 at 9:35 am

Base building.

#216 Dan from Richmond Hill on 01.19.18 at 3:49 pm

#134 MF on 01.18.18 at 11:01 pm
#109 Currency on 01.18.18 at 9:21 pm

Yeah that one bothers me too.

Predicting anything is impossible for sure, but I believe the EURO should be about .80 cents per CAD and maybe .35 cents or less to the USD.

MF

Maybe you are wrong about UE and Euro … ?

#217 Stan Brooks on 01.19.18 at 4:15 pm

#199 Victor V on 01.19.18 at 12:12 pm
Morneau was reassured about higher Canadian rates last summer

Government has no place in determining the cost of money.

It a travesty and a theft.

Each cost including the cost of money aka ‘interest rate’ is determined on open and free markets driven by supply and demand.

Otherwise it is not money and you should not regard it as such.

#218 Stan Brooks on 01.19.18 at 4:59 pm

Judging by house prices and purchasing power 1 Euro should be 1.2-1.3 USD and around 2.5-3 CAD.

I pray for the Euro to stay low, really low.

#219 LivinLarge on 01.19.18 at 6:12 pm

“Judging by house prices and purchasing power 1 Euro should be 1.2-1.3 USD and around 2.5-3 CAD.”…are you really thinking that 1€ should be worth $2.5-3 CDN?

Geesh, that’s rich even for my Euro loving tuckus.

#220 maxx on 01.19.18 at 8:40 pm

#203 Ezzy – The Un-Screwed Canadian Millenial on 01.19.18 at 1:00 pm

“I was smitten by the tech because I hate the way my produce (at practically any store I visit) is treated by apathetic cashiers.”

Me too…..when it happens, which admittedly is less frequent these days, I simply apologize and tell the idiot that I forgot to inform it that I had planned to eat that overpriced produce.

#221 Ralph Cramden on 01.19.18 at 9:10 pm

Periscope
https://www.myrealtycheck.ca/