The leap

“Wife and I have a little diaper filler coming up on one year old,” says Peter, 30, who didn’t get the memo about objectifying his spouse, “and it’s getting tight in our one bed apartment here in Vancouver and we need more space.”

You know what’s coming next. Mars vs Venus in YVR.

“We love the neighbourhood we’re in, it allows us to walk to everything, it’s safe for the kid yet close to downtown, my commute is minutes by bike so I spend more time with the family. It’s where we want to be. Problem is the $1500/month we pay needs to double to get us a two-bedroom place.

“To her, $3000 seems like such a huge amount of money to “throw away” on rent so she’s talking about buying. It won’t be around here, as that $3,000 rental went for $1.2M last time I saw a nearby unit up for sale. I’m happy to live a million dollar lifestyle by renting and with our $12,000/month take home we can afford it. However I see what she means by spending such a large chunk of change on rent. Am I kidding myself?

“Is there an amount when renting is too much and we need to either cram into a cheap place or admit we can’t afford our area, suck it up and move to the burbs? Have you ever had to tell a client to not spend so much on a rental that builds no equity?”

Now that it’s likely real estate values could stagnate, if not decline, the rent/buy analysis gets more interesting. After all, if housing’s not appreciating and no longer a slam-dunk investment vehicle, it’s just shelter. There has to be a reason to buy. Especially in a city where prices are insane.

To purchase the average detached ($1.6 million) for 25% down requires $400,000 in cash upon closing with monthly mortgage payments of $5,900. Add in property tax and insurance, plus a wee bit for maintenance, and you get almost $7,000 in overhead. Meanwhile the lost opportunity cost of the downpayment (what that cash could earn if invested at 7%) is $2,300. This brings the true cost of owning the house to $9,300 a month, or $111,600 per year.

For a property like this one:

So, seven grand a month equals almost 60% of your take-home income, Petey. You’d not even qualify for this amount of financing at conventional rates, let alone with the stress test in place. You could increase the deposit to five or six hundred grand, but that would simply be subsidizing the monthly outflow by gobbling up liquid net worth. If the Dippers in power manage to destroy the market, as they clearly wish to do, buying could amount to the worst decision in your lives.

So why would you? To this point you’ve been spending only $1,500 a month, or a paltry 12% of your take-home on shelter. If you double that to three grand, the proportion rises to 25% – which is still a helluva lot better than 60% for an asset that could lose value faster than it gains. In terms of ‘throwing away’ the rent, what does Wife think mortgage interest, property taxes and foregone investment returns are?

It’s useful to remember what the price-to-rent ratio tells us about the cost of shelter, and in what markets tenants are wise to become owners. It’s simple. Divide the market price of a property by the annual rent it commands to determine the ratio. As I have detailed previously on this pathetic, yet gender-sensitive blog, here is the scale:

  • Price-to-rent ratio of 15 or less – buy the sucker. You’ll save money.
  • Price-to-rent ratio of 16 to 20 – you’ll be money ahead renting.
  • Price-to-rent ratio above 21 – your landlord is a benevolent deity. Or an idiot. Or a realtor.

In your hood, Peter, that $1.2 million place which rents for $3,000 has a P/R ratio of 33. So your landlord is subsidizing you each and every month. Given the hefty take-home income, you’d be far wiser to continue renting and shovel your cash into a nice balanced portfolio, ensuring your TFSAs are filled to the gills.

Tell Wife this: the $4,000 a month you will save by renting, invested in a balanced and diversified portfolio, plus the $400,000 not shovelled into a downpayment, will become $1.496 million in ten years. In twenty years – when are just 50 – it becomes $3.7 million. At that point you can retire with an annual, lifetime, tax-efficient investment income of $260,000 and still retain the principal.

Or, you can have the house.

Tough choice. Let us know.

226 comments ↓

#1 Arun on 01.29.18 at 5:34 pm

First….:)

#2 Zapstrap on 01.29.18 at 5:37 pm

Better figure in some “Trudeau effects” on the future savings. That part still to be written.

#3 For those about to flop... on 01.29.18 at 5:37 pm

Bringing up a small kid on Knight st?

Stand back boss and hold my beer.

I got this…

M43BC

https://www.zolo.ca/vancouver-real-estate/5040-elgin-street

#4 BlorgDorg on 01.29.18 at 5:38 pm

It becomes especially easy to compare price-to-rent ratios when so many properties are listed for both rent and sale on MLS. In most cases I’ve cared to calculate, much of the 905 averages around 40.

It ain’t rocket appliances.

#5 vanreal on 01.29.18 at 5:44 pm

This is what I don’t fully understand about your recommendation to continue renting. The rent will only increase and in the space of 10 years could likely go from the current 3,000 to possibly 5,000 and who knows where in twenty years. The mortgage however will likely decrease as they make payments to erode the principal. Don’t you have to look at the future as well as the present when you’re making this decision of rent vs buy?

#6 OttawaMike on 01.29.18 at 5:44 pm

And how much will the house be worth?

Population growth. Densifying cities.

I bet that shack sells for the same price or more.

#7 LoL on 01.29.18 at 5:47 pm

That was funny.

#8 Ian on 01.29.18 at 5:48 pm

Do you see what Garth is saying there?

Effectively, the unit would have to fall by 50% to get it back in the ‘maybe we should buy it’ category.

And that’s exactly what’s going to happen with YVR property too. Actually it will overcorrect.

#9 Toronto on 01.29.18 at 5:48 pm

Some of the numbers in Toronto are approaching the favourable-to-buy territory wouldn’t you say? $400k condos are renting for $2000+/month.

#10 Ed. on 01.29.18 at 5:50 pm

not a comment but u mite check the math
20% of 1.6 mil is 320k. You’ll confuse the hillbillies

Typo. Meant 25%. – Garth

#11 Damifino on 01.29.18 at 5:56 pm

As I mentioned a few posts back, I’m a person enjoying a price-to-rent ratio of 33.

I get up each day scarcely believing my good fortune. Meanwhile, during the night, the same amount of cash I could have wasted purchasing this place was busy churning out over double the rent I pay.

And yet, I know home owners who think I’m misguided. In fairness, though, most of them are rather poor at math.

#12 Cloudy on 01.29.18 at 6:04 pm

Southern Vancouver Island is insane right now. I might be getting the renters boot soon and there is nothing to rent for a young family with a big dog. Vacancy is where Poloz wishes interest rates could be. I know of a house that was just listed at a price so high even my wife couldn’t help but laugh at and in a matter of days they have an accepted offer at asking price! This isn’t within Greater Victoria either. I can’t believe it. Is this the panicked last bastion that ‘beat’ B20 and have a preapproval before the last few jumps? Or are we really

#13 Brett in Calgary on 01.29.18 at 6:07 pm

$12k/month take-home with a 400K down payment…

“You’d not even qualify for this amount of financing at conventional rates, let alone the stress test in place. ”

Let the insanity of this sink in.

#14 Cloudy on 01.29.18 at 6:07 pm

Oops the kid hit post. I was going to say are we really in the new normal? It’s sad to see Poloz say those that pigged out on debt have tied his hands and anyone that didn’t listened to his predecessor and was responsible is the ultimate loser.

#15 tccontrarian on 01.29.18 at 6:11 pm

Just checked my own Price/Rent ratio, as a reminder that I am in fact doing the ‘smart’ thing: it’s about 30 : 1!

Thank Mr. Landlord!!

My advice – rent at current 1-bedroom for at least 2 more years. Then re-assess the situation.

TCC

#16 TheSpangler on 01.29.18 at 6:11 pm

#5 vanreal on 01.29.18 at 5:44 pm
This is what I don’t fully understand about your recommendation to continue renting. The rent will only increase and in the space of 10 years could likely go from the current 3,000 to possibly 5,000 and who knows where in twenty years. The mortgage however will likely decrease as they make payments to erode the principal. Don’t you have to look at the future as well as the present when you’re making this decision of rent vs buy?
—————————————————–

In 10 years if you save the $4,000/month and the $400k down deposit, that would be worth about $1.3M in 10 years at 5%.

The net value you would own on that house would be around $829k. Any rent increases would be offset by repairs and maintenance.

I don’t know about you, but I would rather have $1.3M in liquid stuff. Plus I am not handy and don’t want to spend time fixing up that junker.

#17 LOLA421 on 01.29.18 at 6:14 pm

#2 Zapstrap…so true…the powers that be will always find a way to take away more of what we’ve managed to squirrel away…by the time I might be able to retire they may start taxing RRSP withdrawal/earnings at 50% once you hit
an income level of $30,000.

#18 Suede on 01.29.18 at 6:15 pm

One issue for the Price to Rent ratio is that it does not often bounce from above 20 to below 10 in desirable markets.

San Fran, NYC, Vancouver… all have ratios over 20 and as high as 40 or more. And have had this for years.

So the P2RR was above 20 five years ago in these markets, and is much further above 20 now.

That doesn’t mean they will tank below 15 or 20 anytime soon.

I mean yes, if you want to live in Detroit or Memphis, you should probably buy a place outright.

https://www.mashvisor.com/blog/best-real-estate-markets-price-to-rent-ratio/

#19 Van no it all on 01.29.18 at 6:15 pm

Sorry but real estate in Vancouver isn’t going down the drain ever…. there’s no land left just old crappy buildings that will get demolished for high rises. Vancouver isn’t Toronto no comparison garth. It’s the new London/Singapore. Born and raised here and love it. If van real estate collapses I will eat a plate of your dogs, dog shit. On 3, 123 VANCOUVER!!!

#20 Victor V on 01.29.18 at 6:22 pm

Peter,

My wife and I are renters; paying $4,200 per month + utilities. Sound outrageous? Hardly …we live in a luxury $2M home so our P/R ratio is a juicy 33.

We have no debts, maxed out TFSA, RRSP, RESPs as well as non-reg accounts that have grown *significantly* over the past decade.

As Garth pointed, you must invest to get ahead and build wealth in this kind of scenario…and once you do, the financial results and peace of mind are priceless.

Good luck with your decision.

#21 Shawn on 01.29.18 at 6:23 pm

TSLA to $525

#22 Linda on 01.29.18 at 6:23 pm

While I sympathize with the wife’s wish to purchase, I have to admit that the prices in YVR are simply too high for what you would get.

The portfolio example presumes that returns will occur at historic balanced portfolio/market averages. This of course can not be guaranteed. What can be guaranteed at this point in time is that purchasing residential property in YVR is not financially prudent for most.

#23 Dan on 01.29.18 at 6:25 pm

The less than 15 rules even too aggressive. The one here is 100 times monthly rent, which translates to around 9.

#24 JC in vancity on 01.29.18 at 6:27 pm

Just signed a lease in Vancouver. Price to rent score of ~47, long-term owners looking for long-term tenants so of course they paid pennies on the dollar. But hey, win-win?

#25 NorthOf49 on 01.29.18 at 6:29 pm

Price-to-rent ratio of 33.333. Sittin’ pretty in my Ancaster 5-bdrm rental surrounded by $million dollar homes. Landlord doesn’t do sweet FA but she became one unintentionally so she doesn’t know what to look out for anyway. I fix most things and get her to cough up when it’s a major fix. She’s just glad she doesn’t have to deal with it.

#26 Raise rates Poloz or youre a currency manipulator! on 01.29.18 at 6:30 pm

When is Poloz going to raise interest rates? I’m only getting a measly 0.55% in a high interest savings account at TD Bank!

#27 Greg on 01.29.18 at 6:32 pm

#5 vanreal on 01.29.18 at 5:44 pm
This is what I don’t fully understand about your recommendation to continue renting. The rent will only increase and in the space of 10 years could likely go from the current 3,000 to possibly 5,000 and who knows where in twenty years. The mortgage however will likely decrease as they make payments to erode the principal. Don’t you have to look at the future as well as the present when you’re making this decision of rent vs buy?
———————————

Once you are renting a unit, the landlord can only increase the rent once per year by a provincially-prescribed maximum percentage. In BC it is around 4% this year. Based on your example, a rent of $3,000 will increase to about $4,440 in 10 years. Which is typical inflation at work.

#28 common sense on 01.29.18 at 6:44 pm

Did the DOW actually finish down over 100 points today?

Be still my beating heart.

#29 InvestorsFriend on 01.29.18 at 6:44 pm

RRSP Taxation

Since LivinLarge replied twice to challenge my math or assumptions, at number 235 perhaps it is okay to show it again and respond.

My post:

A tale of Two Attitudes Towards Tax on RRSP Withdrawals

Imagine Frank and Joe have identical and relatively modest RRSPs and are both 65 and were never big income earners.

Both contributed $50,000 over a period of years starting at age 30 (it was 1983). Their marginal tax rates averaged 30%. Now, in 2018 the two RRSPs have grown to $200,000.

They are both told that on withdrawals they will face a 33% marginal tax rate, a bit higher than when they contributed because both have modest defined benefit pension plans or other incomes such that the marginal tax rate went up.

Frank calculates that on his original $50,000 contribution he got back a 30% refund so $15,000. And he now realizes that he will have to pay 33% tax on $200,000 for a total tax of $66,000. He will net $134,000 over a period of years as he withdraws. (We will ignore further growth in the RRSP).

Frank is wild: “This tax is outrageous! I never should have invested in the RRSP! I saved $15,000 in tax and now have to pay back $66,000! Not only that but much of my gains were capital gains and dividends. I could have invested in a taxable account and paid WAY lower tax, like maybe 15 to 20%, not 33%! This RRSP has been nothing but a tax trap.”

Joe looks at it differently. He calculates that after the refund he only ever invested $35,000 net. He looks at “his” RRSP as being $35,000 funded by him and $15,000 funded by the tax refund. Or 70% funded by him, 30% bey the refund. He notes that the RRSP quadrupled to $200,000. He calculates that had his net $35,000 quadrupled with zero tax it would net $140,000. He notes that in the RRSP calculation he will net $134,000 after the $66,000 tax. He feels that the [$15,000] refund had funded 30% of the RRSP [and has grown to $60,000 and so covers up to $60,000 in tax]. He calculates that his net share of the tax will be $6000. He is paying $6000 tax on his gains of ($140,000 minus $35,000) $105,000 for a tax rate of 5.7% on the growth in his net investment in the RRSP.

Joe is very happy with the situation. “I am SO glad I struggled and put that $50,000 in the RRSP over the years he says. Not only was it savings that I otherwise would have spent, but the tax on the growth of my net $35,000 cost of those contributions was only 6% which beats anything I could have done in a taxable account all to heck. Even though my marginal tax rate went up, I came out way ahead. And just think if I could manage to get this money out at say a 25% marginal tax rate. That would mean the refund MORE than covered the tax on withdrawals, with money left over!”

So, two identical RRSPs both with 33% taxes on withdrawals, one taxpayer is screaming and regretful, the other smiling.

Who is correct?

************************************
Livinlarge responded”

“Frank and Joe had a 30% marginal in 1983 and 33% marginal in 2018, 35 years later? These will be the first people in Canada to have ever fallen 3 full marginal rate bands in 35 years and still never touched their RRSP deposits.”

I appreciate the response. Well, I don’t have the data but tax bands have risen with inflation and I assume they are retired and withdrawing now at 65% but likely lower income than last years of working but I assumed up 3 percentage points. People say RRSP no good if marginal tax rate rises. I have it rising.

Then LivinLarge said:

“And.. imreally feel bad for Frank and Joe, they have 400% growth in 35 years. What did they use to deposit into to end up with 400% in 35 years????
Lif you want some remedial math tutoring, I charge $125/hr plus HST.”

Again, thank you for the response. Well, I am too polite to point out that a quadruple from $50,000 to $200, 000 is 300% not 400%. Also the money was put in the RRSP gradually so is maybe 18 years invested on average for a double and another double. Some of us have done far better but I wanted to use realistic numbers.

Livinlarge has already made up his mind. A few others may gain some understanding from my post.

Whether the 33% tax is onerous depends partly on understanding that some 30% of the RRSP or whatever was in effect funded by the refund. If someone thought the refund was free money and spent it. Well, that was one expensive trip to Mexico. Live and learn.

I thank Garth for the opportunity to share this math.

#30 InvestorsFriend on 01.29.18 at 6:45 pm

Sorry retired now at age 65 not at 65%.

#31 common sense on 01.29.18 at 6:46 pm

#21 Shawn

I hope TSLA goes to $1000.

The short will be life changing.

Keep bidding it up!

#32 S.Bby on 01.29.18 at 6:50 pm

That shack on KNight Street is overpriced.

#33 Bob Dog on 01.29.18 at 6:52 pm

Attention People of Canada.

This an important announcement.

Your Government has been compromised by terrorists.

EOM

#34 Cristian on 01.29.18 at 7:01 pm

I always find it interesting why people do not understand that money spent on renting a place to live is an expense like many others: food, transportation, healthcare, etc
Why not buy a car when you feel you pay to much on transit? Why not buy a farm when you feel you pay too much on food? Why not buy a pharma company when you feel you pay too much on medication?
Everybody would agree that all of the above are extremely stupid things to do, so then why do something equally stupid and buy a house, especially when monthly cost of renting is much lower than buying?…

#35 Milos on 01.29.18 at 7:01 pm

We (people) in Canada and USA have forgotten for some reason that it is possible to live in smaller places with no mayor issues. It has been like that for centuries for a lot of people with red blood (in comparison to blue blood). Peter and his wife obviously know how to manage money. It is not that hard (if you are interested) to learn how to properly manage space in which you live. The info about that can be found everywhere. A lot of people in a lot of countries in the world (including Canada) are already doing this. Maybe you do not even have to move. Your call.

#36 CanadianOne on 01.29.18 at 7:02 pm

Renting at 20.8 price to rent. I know I know its in Edmonton and I should be into buying but guess what… we as a fam of 4 do a lot with the spare cash at the end of the month. Traveling around the world, university education, cars (buying and maintaining), job losses, etc. etc. are no worries.

Somehow have been able to stand my ground against the hormonal nesting instincts in my SO and constant rants from inlaws and parents (off-course). I have found out personally avoiding insane leverage and maintaining steady cash flow keeps things in perspective.

Left the insanity on the west coast(lower mainland) a while back, and while we did leave the Beautiful BC behind, the beauty of the land certainly wasn’t footing the bills. What’s more is that saving anything is a huge endeavor on the soggy coast. I find that cost of living/operating is a crucial metric in any working/investing adult’s life. Especially with a growing family and a future to worry about.

In Peter’s case, certainly Garth’s advice could be taken further out and reduce cost/increase savings by moving to lower operating cost jurisdictions. There are plenty of them in Canada. It may sound/feel like being unnecessarily frugal, but the luxury of decision making that cash on hand provides is unparalleled.

And as for the fad that is “living an experience” in , one word comes to mind. Hysteria.

Wishing Peter&Co. Luck!

PS: REAL turds/pumpers have been & will continue to be ignored.

#37 Vanrentor on 01.29.18 at 7:03 pm

We pay $3600 a month for our house. Our landlord (a realtor no less) paid $1.6M putting our price to rent ratio at a lofty 37. My house horny best friend, whose net worth is 95% in the Van real estate market, says we are stupid to “throw away” $3600 a month. Crazy times….

#38 cultural elitist on 01.29.18 at 7:04 pm

@#19 – van no it all

In what sense is vancouver comparable to Singapore or London (aside from real estate prices)?
Industrial base? GDP? Employment opportunities? Population? Growth? Global financial center? Shipping? …
Please be specific. I really want to know! (PS I am also a van local)

#39 Doug t on 01.29.18 at 7:05 pm

Livin ain’t cheap and dyin sucks

RATM

#40 Andrew Woburn on 01.29.18 at 7:10 pm

What happens when hipsters lose their hip?

The Suburbs.

OMG!! They’re turning into … parents.

“It has been often asserted that millennials (defined as the generation born between 1982 and 2002) do not want to buy homes or live in suburbia; Fast Company, saw this as “an evolution of consciousness.” The Guardian declares that millennials are refusing to accept “the economic status quo” while Wall Street looked forward to profiting from the idea that millennials will be satisfied to live within a “rentership society” (PDF).

But millennials, as noted in a new paper from Anne Snyder and Alicia Kurimska, aren’t embracing downward mobility but rather are increasingly creating their own aspirational strategies (PDF). Some are doing this consciously by ignoring the wise planners and establishing homes for themselves in suburban and Sun Belt locales once considered insufficiently hip.”

It’s never different this time.

– The Screwed Millennial Generation Gets Smart

https://www.thedailybeast.com/the-screwed-millennial-generation-gets-smart?ref=scroll

#41 bhramar on 01.29.18 at 7:10 pm

My first comment on this blog. Garth – thanks for all the informative posts.

#5 vanreal on 01.29.18 at 5:44 pm
This is what I don’t fully understand about your recommendation to continue renting. The rent will only increase and in the space of 10 years could likely go from the current 3,000 to possibly 5,000 and who knows where in twenty years. The mortgage however will likely decrease as they make payments to erode the principal. Don’t you have to look at the future as well as the present when you’re making this decision of rent vs buy?
—————————————————–

Rent vs. buy calculators like these might help you see how all the scenarios work out in long term –

http://mortgageintelligence.ca/assets/calculators-mi/CAMortgageRentvsBuy.html

https://mdm.ca/tools/rent-or-buy-calculator

https://www.nytimes.com/interactive/2014/upshot/buy-rent-calculator.html
(For NY Times Rent vs. Buy calculator, set marginal tax rate at 0% to take out the mortgage interest deduction applicable in US)

#42 young & foolish on 01.29.18 at 7:11 pm

It all sounds good, but ….

If the trouble has been easy money, whether you were invested in RE or equities values have risen. But now? If RE goes down, it’s likely markets will be going south as well. And yes, historically liquid investments do go up, but so does the value of land/RE. Will we really see a divergence here?

Global financial markets are not correlated to Van real estate. – Garth

#43 Ron on 01.29.18 at 7:12 pm

Good work Garth. I haven been a regular reader of your blog from past years. I would like to participate in comment section.

#44 Glengarry Girl on 01.29.18 at 7:18 pm

Why does having an infant make them think he needs to move and double his housing costs…not very logical. It’s a no brainer, stay put, don’t buy at the peak of the market. It won’t be a huge sacrifice, try living Simply.

#45 $3,700,000 on 01.29.18 at 7:19 pm

To return $270,000 would require a portfolio of $3.7 mill yielding over 7 % . Not In this environment . ROC? Yeah sure but careful with succession risk

That portfolio returned 11% in 2017, 8.5% in 2016 and 7.0% over the last eight years, despite some poor markets. The world is now growing again and such an assumption seems reasonable. – Garth

#46 Newcomer on 01.29.18 at 7:22 pm

If I was in the market for a 2/3 bed unit here in Vancouver, I would be checking out some of the new laneway houses. Some of them are cute as a button, with mini-gardens and the coveted granite countertops. And they are not only bigger than many apartments, but you don’t have to worry about your noisy kid waking the neighbors (or vice-versa). It’s also good to know that they are purpose built for rental, so even if the property is sold, you would just rent from the new owner. And they are cheap. I think that’s the turn-off for most people.

(Here’s one in Kits: https://vancouver.craigslist.ca/van/apa/d/spacious-character-home-2-bed/6461900487.html)

As it happens, at my price-to-rent of 63, I’m staying put.

#47 Vancouver in the Rearview on 01.29.18 at 7:24 pm

My ratio is 41.7, based on this year’s BC Assessment value. Vancouver suburb near SkyTrain. What do I win?

#48 Lost...but not leased on 01.29.18 at 7:31 pm

I doth PROTEST

Today’s pooched photo(redundant) has a sign with words only in ONE of Canada’s 100+ “Official Languages”

#49 LivinLarge on 01.29.18 at 7:33 pm

Vanreal, two things. Read those last paragraphs 4 or 5 times.

Second, they love their neighbohood an would have to move well away from it if they bought.

The numbers properly conservative across the board not made up “spooky science” ones. With the insane prices for a home in Van, this couple are soooooo far ahead to rent where they are and are happy now rather than going all in with all they have to own in a place they don’t love.

#50 LivinLarge on 01.29.18 at 7:38 pm

“It’s a no brainer, stay put, don’t buy at the peak of the market. It won’t be a huge sacrifice, try living Simply.”…not only a market peak but a rising interest rate environment as well. Falling value and significant carrying costs that no one knows for certain how far they can rise. Add a good cyclone into the bowl and there’s a recipe for a stroke.

#51 Yuus bin Haad on 01.29.18 at 7:44 pm

Someone is paying these people how much a month?

#52 Van no it all on 01.29.18 at 7:47 pm

#38
All that u mentioned plus all the beautiful empowering women of different cultures & commercial drive restaurants and no george soros

#53 Oakville Rocks! on 01.29.18 at 7:50 pm

Sorry, off topic for today but completely related to yesterday’s topic….

Garth, how the hell are you kicked out of caucus for writing a blog and daring to propose a family tax return to F! but that same Conservative party executive can make the decision to keep Rick Dykstra and allow him to run under the Conservative banner given the allegations against him?

CRAZY!

Now I see why women are turning to social media to present their stories. It seems like their only hope for any form of justice or redress.

How did we get here?

It seems like some political assistants would qualify for danger pay.

#54 Paul on 01.29.18 at 7:52 pm

47 Vancouver in the Rearview on 01.29.18 at 7:24 pm
My ratio is 41.7, based on this year’s BC Assessment value. Vancouver suburb near SkyTrain. What do I win?
—====================================
You win chance to be jammed in a small space listening to your neighbors arguments, music and there cooking smells Yipeee.

#55 Nonplused on 01.29.18 at 7:53 pm

Garth, it is difficult to argue with some women on the buy/rent question, because numbers like $3000 vs $9000 are not important to them. What is important to them is upon divorce they get the house and enough alimony to cover the mortgage. Until this changes no amount of numbers of whatever magnitude can matter.

Marriage used to be about raising children. It is now about extracting resources.

#56 mark on 01.29.18 at 7:55 pm

Where is the screwed canadian millennial, i so miss his/her great posts!

#57 Blessed Canadian Millenial on 01.29.18 at 7:59 pm

29 InvestorsFriend on 01.29.18 at 6:44 pm
RRSP Taxation

Since LivinLarge replied twice to challenge my math or assumptions, at number 235 perhaps it is okay to show it again and respond.

My post:

A tale of Two Attitudes Towards Tax on RRSP Withdrawals

———–

Thank you for the detailed response with calculations.

I always knew that RRSP vs equivalent to TFSA if you marginal tax rates remain the same. Didn’t realize that even with a HIGHER marginal tax upon withdrawal, RRSP is better than non-registered (in some cases).

#58 Angie on 01.29.18 at 8:00 pm

I feel for you, Peter. Every time we look at moving itnis easier to just stick my head under a rock amd cry. The jump to 3k a month in rent is hard to swallow when the move up to 1500 was probably a hard move too. If you are like us you lived comfortably with two incomes before kids and kick yourselves for not buying 5 years ago. Who could’ve known what would transpire these past few years. Keep on making whatever works for you work for you. Nothing stays the same forever. The way things are now are not the way it will always be, whatever that means. Something will change. Your jobs, the economy, your lifestyle, the housing market.

#59 thnk you on 01.29.18 at 8:02 pm

That portfolio returned 11% in 2017, 8.5% in 2016 and 7.0% over the last eight years, despite some poor markets. The world is now growing again and such an assumption seems reasonable. – Garth
………….

with all due respect, you’re cherrying picking calender years/current emvironment

the year they retire, or the yr right after, say a 2007, 2008 combo occur ? would they be still withdrawing $260,000? what would that do to their retirement withdrawal plans?

might be a good topic for a future blog , Garth. How to manage the years just before and just after retirement.

Simple. Have a balanced portfolio. If cruised right through the credit crisis. – Garth

#60 ANON on 01.29.18 at 8:07 pm

#51 Yuus bin Haad on 01.29.18 at 7:44 pm
Someone is paying these people how much a month?

Obscenely much.
–Ihas Bin Ricrold.

#61 BK on 01.29.18 at 8:09 pm

@#19 Van no it all

You will be eating that dog shit along side that other guy eating his own bitcoin.

#62 AJM on 01.29.18 at 8:09 pm

Since we seem to be comparing price to rent ratios, I’ll chime in with 62!

The thing is, we don’t have a “good deal” per se, we’re paying the going rent in this part of Vancouver. Crazy to think that the valuation would need to drop to $650K (or down 75%) for me to consider buying the place.

Current PTRR seems unsustainable without significant capital gains, no?

If rent isn’t quadrupling, you’ve got to figure real estate prices are coming down, right?

#63 Hugh Janus on 01.29.18 at 8:10 pm

1% of the population controls everything.
4% of the population are useless puppets
90% of the population are asleep.
5% are awake and trying to wake up the 90%

The 1% dont want the 5% waking up the 90%.

#64 BlogDog123 on 01.29.18 at 8:17 pm

But what does wifey tell her mom and dad? She’s a failure and STILL throwing her money away! (the financial arguments flew over everyone’s head)

Renting is STILL for losers, so says the folks at HGTV
Why can’t we just buy NOW and figure it all out later? Can’t we just tough it out?

#65 LivinLarge on 01.29.18 at 8:18 pm

“Livinlarge has already made up his mind. A few others may gain some understanding from my post.”…first part is absolutley correct, I have done the real math hundreds of times with hundreds of individuals and it looks nothing like Frank or Mike. The real life version has Frank and Mike starting out in 1983 at about 20ish percent combined provincial/federal marginal and slowly rising to their current high 40% rates. Even if they grew the total RRSP over decades, they’re still screwed and tatooed when they retire because they’re real doooods and have no intention of living like refugees at a little more than junior managers at a Burger King so they’re maybe dropping their income requirements in retirement but not by a huge amount.

But, yes I was way off on that 50-400 growth but I was way low not way high so they’re actually far worse off than I thought they were. They didn’t get a paltry 4.02% CAGR they came in more like 3.3% for 30+ years. That’s horrible with a capital H.

I still think you have no idea what I was refering to when I was talking about their 33% source witholding amount. That 33% is what the institution withholds from RRSP withdrawals not their marginal rate…their marginal rate at withdrawal is their marginal rate at withdrawal and that’s impacted upwards by CPP, OAS, pension, other non registered income etc. so their REAL marginal rate is going to be well into the 40% on deposits, part of which they made as low as 20% in 1983 and grew at a dismal 3.3% CAGR for the rest of their working lives.

Based on your numbers, Frank and Joe had better be pan handling on the corner of Bloor and Yonge or they’re going to be shopping for catfood for lunch.

You keep using totally unrealistic numbers to demonstrate a failed position when real numbers show both doooods pooched.

When there is some incredibly lucrative investment instrument vailable only in an RRSP and nowhere else then I’ll sit up and take notice and maybe even change my opinion of RRSPs developed over 40 years but not now. As long as there are very significant tax advantages to earning capital gains and dividends in unregistered investments that aren’t available if earned in an RRSP and the advantage of tax free growth in an TFSA, I’m sticking with what I have experienced first hand with hundreds of people.

Although I rarely proffer “common sense says” arguments, think for a minute about why we have RRSPs since 1955 almost unchanged in governing rules. It’s naïve to think that all Federal governments since 1955 want to just give Canadians a simple way to reduce the taxes they pay over their lifetimes at the expense of the Federal coffers. No, every government has known since 1955 that by allowing or even encouraging RRSP savings, the Feds are simply playing a waiting game, they’re getting their pound of flesh in a few years rather than today and they’re getting more today than they ever gave up yesterday. On top of that, the institutions are holding and tracking the RRSP funds for the Feds so they ain’t a comin out without the Feds knowin’ about it and gettin’ their pound of flesh first.

#66 Axehead on 01.29.18 at 8:20 pm

Or just move.

#67 Hairhead on 01.29.18 at 8:23 pm

I got you all beat. My ratio is 111.

No joke. The house I live in is “valued” at 4.4 million. I rent for $3,300/month.

#68 IHCTD9 on 01.29.18 at 8:24 pm

#44 Glengarry Girl on 01.29.18 at 7:18 pm
Why does having an infant make them think he needs to move and double his housing costs…not very logical. It’s a no brainer, stay put, don’t buy at the peak of the market. It won’t be a huge sacrifice, try living Simply.
———

Agreed. This is the no brainer of the century.

#69 thnk you part II on 01.29.18 at 8:27 pm

Simple. Have a balanced portfolio. If cruised right through the credit crisis. – Garth

……………

again, if 2007 and 2008 occur just after they retire, would they still withdrawal $260,000 in 2007 (selling capital during a down yr just after retirement)?, then to withdrawal $260,000 in 2008 (selling yet again during a down year, a yr with a massive fall)—– would it in any way change their odds of not running out of monies? is this a reasonable risk ? anyway to mitigate it?

#70 Capt. Serious on 01.29.18 at 8:30 pm

I find it amazing people can be taking home $144k a year and be such financial illiterates. It boggles the mind.

#71 ImGonnaBeSick on 01.29.18 at 8:31 pm

Ugh.. 1%er talk.. do you know what it takes to be in the top 1% earners of the world? A household income of around $35,000… Do you know what it takes to be in the top 1% in wealth? A net worth of just under $800,000… I’m guessing quite a few commenters on here are part the 1% controlling the world… There’s no such thing as the boogeyman…

#72 Blacksheep on 01.29.18 at 8:31 pm

“We love the neighbourhood we’re in, it allows us to walk to everything, it’s safe for the kid yet close to downtown, my commute is minutes by bike so I spend more time with the family. It’s where we want to be. Problem is the $1500/month we pay needs to double to get us a two-bedroom place.”
—————————–
Pete Buddy sorry, but you can’t afford Vancouver.

I know, I know, you won’t be able to cycle to work anymore, but your having kids and it’s not just about you anymore.

Set up some ride sharing deal, get the hell out Van and by some dirt. Who the hell wants to raise a kid in that environment anyhow?

Come out to the Valley (White Rocks nice) own and live very well on that income….

#73 chris on 01.29.18 at 8:32 pm

OK we talk about rent vs own. What about the quality of life what value we put on this ?
Also mortgage is paid down in time why we don’t account for this ?
I am not advocating for buying houses specailly at this insane prices however I think we might miss some stuff in the equation
Disclaimer I am a landlord 6 unit in Toronto Beaches and 11 unit in Toronto Upper Beaches (yes bought when the numbers made sense) and yes there are some headaches here and there but if you have a system, people that can fix any issues with the building and you are hands on it is very rewarding financially trust me
And also LOCATION, LOCATION !

#74 CalgaryCarGuy on 01.29.18 at 8:32 pm

My price to rent ratio is currently about 139—I have to guess at the current property value. I’m guessing at approximately 1 million. Back in 2008 it was appraised at 1,560,000 but spreads like this are hard to sell now. My rent used to be 500.00 per month but this year it went up to 600.00.
How can this be? It is 112 acres of undeveloped semi-wilderness treed property in the foothills west of Calgary. I live in an older model luxury diesel-pusher 40 foot motorhome that I bought for a steal from ebay five years ago. Paid for completely upon purchase. The only hook-up I have is power. I do have to haul water in myself and pump it into the coach but it’s not hard to do. There is a septic field from an ancient, collapsing mobile home on the property so I pump out the waste tanks into it when needed. Not a big deal either. I’ve been living here five years coming up this year and will stay here as long as I can. It is a gorgeous property. I often have deer right outside my coach. Bears, cougars, moose are regulars. Loving it. Unless the Calgary economy picks up a great deal or my landlord finally succumbs and realizes he would have to take a big drop to sell, I think I’ll be staying here a while yet. Even if I’m wrong and have to move my house is on wheels. I’ll find somewhere else. After all, I found this place with a bit of searching around.

#75 Dee on 01.29.18 at 8:34 pm

My price-to-rent, in trendy Leslieville, is 25-30. Please, no one show my landlord this post; I’m rather enjoying that my rent is only 15% of my income.

Own one of these falling-apart houses in a downward market? hahahaha no thank you

#76 Canadian Moose on 01.29.18 at 8:35 pm

I will try to be respectful but come on Petey. Great financial advice from Garth, no charge to boot. This is your “duh” moment. If only I had received this advice 20 plus years ago. F..k. Gotta have a drink now.

Greetings from the pissed off in the Hinterland.

#77 Lost...but not leased on 01.29.18 at 8:36 pm

Analysis:

Peter is 30
Combined family income is $12,000 month

(BTW ..curious their careers/jobs ????)

What seems to be occurring is a house horny battle between the Amazons and the traditional ruling gender.

This ever- widening chasm between natural order, genetics, and long established plans of “Higher Deities” may be resolved by creating Amazon zones for one gender..and non- Amazon ones for other genders who will be granted visiting and other conjugal rights .

Lesson: be careful what historical house- horny genders wish for..

#78 Dobermanduke on 01.29.18 at 8:39 pm

LOVE today’s picture and your reply Garth.

#79 Poorgirl on 01.29.18 at 8:40 pm

Missed the big vote the other day, but I will belatedly put in my 2 cents. Let SCM continue to comment. It is refreshing to see that not every young person is asleep at the wheel. Recognizing that there IS a problem is the first step to solving it. Although, admittedly, this is an elitist-versus-the-rest-of-us problem masquerading as an ageist one.

#80 A Yank in BC on 01.29.18 at 8:42 pm

If one continues to lease for an extended period of time (two years or more), the price-to-rent ratio can change considerably. When we moved-in two years ago, I figured the price-to-rent ratio to be about 22. But now, because of appreciation, it’s more like 28. I suppose both sides win.. at least in this case.

#81 Vancouver in the Rearview on 01.29.18 at 8:53 pm

#54 Paul on 01.29.18 at 7:52 pm

You win chance to be jammed in a small space listening to your neighbors arguments, music and there cooking smells Yipeee.

————————

Sorry, fail. We rent a three-bedroom 3-bath house plus nursery and basement, yard, landlord operated vegetable garden, and detached garage. Don’t smell anyone’s food or hear their music or arguing.

#82 Hamilton on 01.29.18 at 8:54 pm

What does it mean when the relators are trying to rent instead of holding the places empty?
https://www.facebook.com/groups/BuySellHamilton/permalink/1792747161034898/?sale_post_id=1792747161034898

LOL!!!!

#83 IHCTD9 on 01.29.18 at 8:58 pm

With regard to RRSP’s, I like to keep it simple.

If you are married and both depositing, and you both started in your mid twenties and never miss a deposit – you can’t lose.

Example:

A couple deposits 1000.00 per month for 40 years. They also reinvest their 3000.00 tax return every year. They get 5.0% every year for sake of argument.

At 65 they will have:

Deposited $481,000.00 after tax dollars

Received back income tax dollars totalling 120,000.00 which is real dollars in your pocket, same as interest.

Earned 1.27 Million in interest, of which 254,000.00 is interest on their returned income tax dollars alone.

1.87 million is in their accounts, and it kicks off 44,300.00 per head per year. Add in CCP, and OAS per head, and you’re just under the clawback, but household income is still a nice 6 figure number.

Investment of 481,000 turns into 1.87 Million. Retire on proceeds alone, pay the income taxes on that amount, and when you’re gone, gov takes 940K, kids get 940K.

The above assumes no effort to avoid taxes is taken – ie, worst case scenario. A lot can be done if you are planning ahead.

Saving 1000.00/month is easy, and I can’t blow the resulting 130K/yr in retirement. The above would have me swimming in money I just don’t need. Once you get past giving almost a Mil to the gov things look pretty good. I get past it by focussing on the fact that I will be dead when that happens. I only ever put 481K on the table.

#84 Smoking Man . on 01.29.18 at 9:01 pm

It’s official.

Clint Eastood is a deplorable. Tonight on Hannity.
Make my day punk.

So amped going to see Jordan Patterson.wend night in LA.

Doug Ford running.

Muller is next.

The stars are in alignment with super moon at twelve o’clock high.

Great time to be alive.

#85 Gravy Train on 01.29.18 at 9:03 pm

To purchase the average detached ($1.6 million)…. For a property like this one…. — Garth

The list price of that property is two orders of magnitude more than any offer I’d make on it! (Yes, I’d not pay more than 16 grand!)

#86 InvestorsFriend on 01.29.18 at 9:05 pm

Blessed Canadian Millennial at 57 thanked me for my RRSP math.

You’re welcome. It is enough if even one or a few people learn something from my math, It is what it is.

I thank Livinglarge who pushed me to make it more realistic and I did. (I originally had 40% marginal tax rate, I changed to 30% at contribution, 33% at withdrawal). And I showed how two people could pay 33% and one resent it deeply and one, understanding how the refund effectively funded part of the RRSP and funded almost all of the tax, was happy as he realized the tax on the growth of his net 70% share of the RRSP was very low.

But now as at number 65 LivinLarge just can’t accept the math and even suggests I meant withholding rate when I clearly said I assumed a 33% marginal tax rate, three points higher than the average at contribution. Then he quibbles with the percent gain over the years which in fact does not matter to the examples I gave whether it was a Quadruple or a ten bagger, the tax RATE would be the same at the assumed 33% marginal rate.

I have been polite here and showed some math. It is what it is. A few people have appreciated it. My example had assumptions, yes. Realistic assumptions for at least some people.

I have shown the math enough times now. I hereby swear off responding or posting about RRSP math until at least May 1.

In my own case my marginal tax rate will be quite a bit higher when I withdraw from RRSP. A very nice problem to have. But my RRSP happens to be a ten bagger (so far and I have 13 years until first mandatory withdrawal) and I doubt that would have happened in a taxable account where taxes would have had to be paid annually, nor would I have likely saved the money without the incentive of the RRSP refund given I had defined benefit pension. And that ten bagger is more like a 14 bagger on my net cost of the RRSP after refund. I may face about 50% marginal tax leaving me “only” a seven bagger after taxes. My situation is not typical but it is real.

Again, no further RRSP posts from me until at least May 1. I am on the wagon.

#87 rockpile on 01.29.18 at 9:07 pm

#26 Raise rates Poloz or youre a currency manipulator! on 01.29.18 at 6:30 pm
When is Poloz going to raise interest rates? I’m only getting a measly 0.55% in a high interest savings account at TD Bank!

Not that this is going to make much difference unless you have tens of thousands in a saving account, but ScotiaBank has a relatively new type of savings account . Depending on the length you have it saved, you can get 1-1.7% on your money. Not great, but we put some pre-TFSA money in there for a few months and make a few extra bucks.

#88 juno on 01.29.18 at 9:09 pm

I created a spreadsheet of

mortgage bank would lend | for Household income | adding .0044 x mortgage (estimated property tax) | maintenance | utilities | (did not add living cost)

and was quite suprise on the incredible drop on how much the banks will lend you vs several years ago when mortgage rates were 1.84.

Wondering if someone had some real calculations the banks uses to calculate your how much you can borrow in a spreadsheet form or just in calculation formula

#89 TheSecretCode on 01.29.18 at 9:10 pm

AJ Hazzi in Kelowna is touting Vancouver money chasing yield by coming to Kelowna in his newly released market outlook. A great time to buy investment properties in Kelowna

Get a few of them.

As the speculation spreads throughout BC you can only win on appreciation – pure speculation.

Kelowna SFD all $700+
Rental Cap – 4 (this is bad)
New housing stock coming online in the thousands for Kelowna.

He writes with the local wage you may be wondering how people can afford to live in Kelowna…but don’t be fooled…it is a world class destination. So, wages don’t matter.

Then he mentions while the current market is a sell signal for landlords as rental prices are expected to soften and the vacancy rate to increase with the building of units at full throttle, it is still a great time to buy investment properties.

He forgot to mention anything about the cost of borrowing sky rocketing – I guess that doesn’t matter. Probably all cash from the Lake City Casino.

Great information though – from a realtor nonetheless.

#90 jim on 01.29.18 at 9:11 pm

How many Canadians have 400k in liquid assets sitting around? Now how many have > 144,000 per year after tax. (Hint: 2x the median family income in vcr).

Very few. And yet, even that sort of person can’t afford a home in Vancouver.

Crazy. Here in Seattle we have had major price increases for 5 years running. This is not a positive, it is an outright pain in the ass. Not only are property taxes rising madly, but it increases the cost of transactions.

We’d like to upgrade to a larger house, but to do so means selling our current house and acquiring another one. It costs money to sell (significant money), and the price/rent ratio in most areas of Seattle is in the midpoint of Garth’s range. Too high to buy.

Those delusional Vancouverites chortling with glee love high housing prices for one reason only: it is their only asset, and only retirement plan.

They don’t have decent careers with which to make money. They aren’t starting businesses. They are relying on massive leverage and an ever increasing housing market.

I spend 6.8% of post-tax income on housing. I can’t even imagine 30%, or 60%. One’s savings rate would be nonexistent.

#91 TheSecretCode on 01.29.18 at 9:16 pm

Sometime in the next 16 months up until mid 2019 is the date when equities are taking a 50%+ hair cut…broad based decline globally.

And that my friends is what will change the current honey badger investing / irrational exuberance in everything. RE included.

Don’t say that you have not been warned.

#92 When the Whip Comes Down on 01.29.18 at 9:20 pm

#19 van no it all – can you please define collapse and set parameters. If it does “collapse” I would really love to see you eat $&@t. Promise me you will webcast it.

#93 TheSecretCode on 01.29.18 at 9:22 pm

The only thing that will upset my prediction by mid 2019 if not sooner is if the US Fed changes course on their balance sheet reduction…watch this number…it will be intensifying this year and the markets will at some point get the memo.

#94 stage1dave on 01.29.18 at 9:23 pm

We’re on the bubble according to Garth’s law, but will keep on renting thru next spring. I’m too lazy to move this year, and am convinced this market around Edmonton will devalue itself another 10-20% in the next 12 months.

Wifey and I will wait ‘n see, take a few weeks off this summer, and enjoy our cars…

#95 Vasa on 01.29.18 at 9:25 pm

The simplified price to rent calculation itself can make any property in GTA / YVR look a really silly purchase option right now as you highlighted Garth. Assuming no other overhead costs, a PTR ratio of over 20 indicates a return of under 5%, if one were to own the property outright with no mortgage.

In you sample, add in a condo fee of $500/month (very low) and property tax of $800/month (conservative again) and return falls to ~1.6% with a PTR ratio of ~60. Add in the additional overhead of owners insurance and maintenance, and the math gets even worse with a return even below inflation. These properties should have been dropped like burning coals even a few years back, and in the current market they just shouldn’t exist.

I have been renting in GTA for the last 5 years. At times I regretted not buying a property in 2014/15 looking at the 50-60% gains on most properties since then, but a simple PTR calculation put most properties in the 18-22 range even then, and up in the 25-30 range now as the rental increases never kept pace with price increases.

I currently rent a condo townhome with a simple PTR of 28 based on a recent sale. Take away the condo fee and the tax, PTR ratio raises to 40 with a yield of <2.5%. If I vacate now the landlord will look to increase the rent by 30-40% for the next tenant. I will just enjoy the subsidy till I vacate and cross the border in a few months for a new assignment with the current employer.

#96 Capt. Serious on 01.29.18 at 9:31 pm

Just read Vanguard’s market outlook. I generally trust Vanguard given their corporate set-up and history with indexing. For what it’s worth, they predict 3.5 to 5.5% ten year annualized return from here for a global equity 60% / bond 40% portfolio. Seems conservative and yet pretty realistic given stretched valuations. At least if you plan with these numbers you are unlikely to be caught short of money later.
https://www.vanguardcanada.ca/individual/articles/education-commentary/markets-and-economy/2018-economic-and-market-outlook.htm
PS Vanguard doesn’t consider preferred shares as worthy of your attention. Present company may differ.

No astute investor would hold 40% bonds. BTW, you are aware of the difference between US and Camuck pref markets, right? – Garth

#97 IHCTD9 on 01.29.18 at 9:34 pm

#74 CalgaryCarGuy on 01.29.18 at 8:32 pm

———-

Now, that is sweet!

Lots of folks on YouTube building tiny houses, and log cabins as well. Even living in vans. Some are legit living this way.

Earning well and living dirt cheap can really allow some investing horsepower to take shape.

#98 Spectacle on 01.29.18 at 9:35 pm

Where do I begin…..

Appreciate Flopper as always, and strangely look forward to the sense ( pun intended) that Crowded elevator brings to the blog.

Happy new year to the Dogs. Yes, been a while since I have written in, but tonight’s blog lost me at ” ride my bike to work” and “$12,000 per month combined income”.

Advice:: Peter, get off of the Fence, in or out. Start living and find out what’s on the other side. Could be a life after Debt?

Let us know what happened to you.

Regards

#99 Vasa on 01.29.18 at 9:38 pm

@#5 Vanreal

The prices in GTA have increased 50-60% for most properties from 2014/15. The rents have hardly increased 20-25% in that time. It’s impossible for rents to keep pace with speculative prices in the current economic conditions.

As I said above, the PTR ratios have gone from the borderline 18-22 range to the ridiculous 30-40 range in the last 4 years. What makes you believe rents will increase astronomically when the prices have started to come down?

#100 Tbone on 01.29.18 at 9:48 pm

Don’t assume every rental has a mortgage , not all landlords got into the game yesterday .

And the fruit bank has a 2 % gic for a one year term if you are looking for a place to park some cash .

#101 Harrison Bergeron on 01.29.18 at 9:51 pm

Can’t say what was written by the author is truthful simply because a quick search on Craigs for a 2 bedroom revealed 2500 available units under $2000.

So who’s foolin who here?

#102 OttawaMike on 01.29.18 at 9:53 pm

This an interesting take on Vancouver from a Hong Kong biz journalist:

http://www.scmp.com/business/commodities/article/2130885/vancouver-too-tough-doing-business-other-being-ideal-retirement

#103 OttawaMike on 01.29.18 at 10:00 pm

#74 CalgaryCarGuy on 01.29.18 at 8:32 pm
How can this be? It is 112 acres of undeveloped semi-wilderness treed property in the foothills west of Calgary. I live in an older model luxury diesel-pusher 40 foot motorhome that I bought for a steal from ebay five years ago. Paid for completely upon purchase.

I was thinking of doing the same around 2010 but ended up buying a real house in the city instead. You’re definitely ahead of your time as the tiny house movement grows.

#104 IHCTD9 on 01.29.18 at 10:02 pm

I spend 6.8% of post-tax income on housing. I can’t even imagine 30%, or 60%. One’s savings rate would be nonexistent.
——————

Yep. Urban Canada is a sink hole for anyone not in the upper crust income wise.

I have shown the math multiple times that a couple making the (now guaranteed) soon to be 15.00 minimum wage in Ontario burger flippers will be better off as home owners than 80-90% of high income GRVD/GTA white collar couples living in a similar quality home.

They’ll have more left over at the end of the month than the $100k+ earning urbanite homeowners. They can meaningfully invest, and retire very comfortably in a home they don’t need to sell.

The math is clear. The only thing making folks stay or leave is “career-pride” and lifestyle choice.

We have not yet seen how much that is worth just yet.

IMHO, it all boils down to a choice between achieving life-long financial security, or living a particular life style.

One or the other.

#105 DON on 01.29.18 at 10:04 pm

Sorry no link!

The expert are talking about inflation (surprise). The main premise of the article on the US – was that those born after 1982 have never experienced those extremes. It was a warning. Then the financial post article on betting against the herd (especially when the herd is under strong group think).

Someone is preparing someone for something.

Cloudy: can you provide the location of that listing outside the Greater Victoria? Things are no longer going over asking…see the slight downward momentum…things going for asking is normal is this nutty environment until the switch turns off. Patience!

To the new dad:

A baby in a one bedroom is fine for now…doesn’t need much room, doesn’t even walk yet. Won’t even remember. Parents need to realize that things change over night, literally. What you did as a couple is gone or harder to do. Rent till the child is older and buy the perfect house. If you commute in Van – you will spend less time with the baby, think about that. Sacrifices are tough!

#106 Mark on 01.29.18 at 10:06 pm

” At times I regretted not buying a property in 2014/15 looking at the 50-60% gains on most properties since then”

Actually the ‘gains’ on properties in the GTA and the GVR have been severely exaggerated since the 2013 peak in prices. The sales mix is responsible for nearly all of the quoted/alleged “gains” due to the extreme onslaught of brand new, high end supply to the market, rather than existing resale. So a condo that you bought at, for instance, the 2013 peak, would not have appreciated since, and more recently is depreciating beneath peak levels.

Unfortunately a lot of people look at the Realtor “headline” number of the average selling price, and merely extrapolate this to their individual unit. Its quite inaccurate and a complete misinterpretation of the data.

#107 45north on 01.29.18 at 10:11 pm

cultural elitist: In what sense is Vancouver comparable to Singapore or London (aside from real estate prices)?

Please be specific. I really want to know!

Hilliard MacBeth, compares Vancouver to Sydney Australia and Hong Kong.

You specified that you didn’t want the comparison based on real estate prices but you also said that you really wanted to know. Well here’s some real information:

at the 17:32 minute mark he says that the average house in Vancouver is 12 times the average salary. In that sense, Sydney Australia and Hong Kong are the only cities comparable to Vancouver. Of the two, Sydney is closer:

https://www.howestreet.com/2018/01/27/this-week-in-money-12/

#108 ben on 01.29.18 at 10:21 pm

value to rent ratio: 22

And that is with all property taxes in.

And all heating in.

Long term that means this market is going to tank! And it’s in Quebec!

#109 Andrew Woburn on 01.29.18 at 10:22 pm

There aren’t many things that make buying a YVR slanty semi look prudent, but this is one of them.

“Japan Suffers the Biggest Cryptocurrency Heist in History (Again!)”

https://www.thedailybeast.com/japan-suffers-the-biggest-cryptocurrency-heist-in-history-again?ref=home?ref=home

#110 dr. talc on 01.29.18 at 10:24 pm

Here’s one for the Toronto haters:

http://www.dailymail.co.uk/sciencetech/article-5278515/Citizens-monitored-turn-Google-city.html

#111 OttawaMike on 01.29.18 at 10:25 pm

A badly run sled dog operation in Moonstone Ont. is now under investigation by SPCA due to a tip and video on Facebook.
What bothers me is the people who blew the whistle still went dog sledding-FFS

https://globalnews.ca/news/3993034/animal-cruelty-dog-sledding-central-ontario/

#112 Boombust on 01.29.18 at 10:25 pm

#92 When the Whip Comes Down

I think YOU had better start eating S**t…with gravy. The RE collapse in Vancouver is now well-underway.

You must live under a rock.

#113 OttawaMike on 01.29.18 at 10:26 pm

Ok that’s enough posts for one day. Because I don’t want to become like SCM.

#114 OttawaMike on 01.29.18 at 10:27 pm

Right? — because it gets annoying when people post too often.

#115 OttawaMike on 01.29.18 at 10:27 pm

If there’s one thing I don’t want to become is SCM.

I’d much rather become Smokingman if I had to choose.

#116 Smoking Man on 01.29.18 at 10:28 pm

Where there is Smoke there fire. I really hope we get 911 justice. One way or the other.

Mueller took over the FBI one week before the 9/11 attacks and he was worse than clueless after 9/11. On Sept. 14, 2011, Mueller declared, “The fact that there were a number of individuals that happened to have received training at flight schools here is news, quite obviously. If we had understood that to be the case, we would have — perhaps one could have averted this.” Three days later, Mueller announced: “There were no warning signs that I’m aware of that would indicate this type of operation in the country.” His protestations helped the Bush administration railroad the Patriot Act through Congress, vastly expanding the FBI’s prerogatives to vacuum up Americans’ personal information.

Deceit helped capture those intrusive new prerogatives. The Bush administration suppressed until the following May the news that FBI agents in Phoenix and Minneapolis had warned FBI headquarters of suspicious Arabs in flight training programs prior to 9/11. A House-Senate Joint Intelligence Committee analysis concluded that FBI incompetence and negligence “contributed to the United States becoming, in effect, a sanctuary for radical terrorists.” FBI blundering spurred the Wall Street Journal to call for Mueller’s resignation, while a New York Times headline warned: “Lawmakers Say Misstatements Cloud F.B.I. Chief’s Credibility.”

Source.
http://thehill.com/opinion/criminal-justice/371206-golden-boy-robert-muellers-forgotten-surveillance-crime-spree

#117 LivinLarge on 01.29.18 at 10:29 pm

Vasa, I could hug you. Someone with “the leetle grey cells” to actually do the calculations and accept AND live by the results and not voluntarily reduce themselves to penury to chase an amorphous dream. Kudos.

Just an open question though about:”If I vacate now the landlord will look to increase the rent by 30-40% for the next tenant.”…is these even remotely possible today with the Ontario rent controls?

#118 Van no it all on 01.29.18 at 10:32 pm

#92
No COLLAPSE ever… line up the plates of dog shit and have global bc ready, throw in your cats litter box to and fill it up to the brim. Horgan will not do anything to prevent money being brought to van, imagine if they cut off the money pipeline from certain countries? They can’t bc needs all their cash….like my cousins says what’s a 10% drop? Chicken feed. He bought a pre built in the Charleston for 1.3 he moves in this summer its worth over 3 mill now lol, so it drops 10% oh well
Nite folks heading to catcus club then fairmont

#119 LivinLarge on 01.29.18 at 10:42 pm

“I have shown the math enough times now. I hereby swear off responding or posting about RRSP math until at least May 1.”…..Yayyyyyyy.

So, who has a combined marginal rate of 30% in 1983 and then retires 35 years later with a combined marginal rate of 33%??? You should have stayed with the retirement rate of 40% at the very least.

Let’s give you something to feel warm and fuzzy about until May rolls around and I’m in Brittany.

Your current example is technically possible but it’s also technically possible that the Great Pyramid was build using ancient alien technology and the chances of some dood having a marginal rate of 30% in 1983 and retiring at a marginal rate of 33% in 2018 is infinitesimally less than those pesky aliens lift the 2 million stone blocks in Egypt.

Just to clear up another misconception, I never said that marginal tax rate income brackets hadn’t increased up to 2000, I said it was only in 2000 that they were formally and permanently indexed to CPI. Before that they were increased on a totally ad hoc basis with no formal tie to inflation.

#120 Mel Lastman on 01.29.18 at 10:59 pm

Sitting in a bungalow in North York with a rent ratio representing a whopping 61. You should see my backyard Garth, Bandit could run for hundreds of meters!

#121 Cold Front on 01.29.18 at 11:07 pm

Thank You Dougy!!

Game on!! Libtards quaking now.

Ontario soon to be a province again, that it so deserves to be after the last 14 years of failure!

#122 Paul on 01.29.18 at 11:22 pm

#117 LivinLarge on 01.29.18 at 10:29 pm
Vasa, I could hug you. Someone with “the leetle grey cells” to actually do the calculations and accept AND live by the results and not voluntarily reduce themselves to penury to chase an amorphous dream. Kudos.

Just an open question though about:”If I vacate now the landlord will look to increase the rent by 30-40% for the next tenant.”…is these even remotely possible today with the Ontario rent controls?
=====================================
Open answer if you vacate now what the F do you care?

#123 Ian on 01.29.18 at 11:25 pm

Just checking the futures before bedtime and the Nasdaq 100 just went off a cliff (10.30pm EST).

There was some serious weirdness before 4pm Monday too. Sell off, then a short squeeze, then more selling.

Maybe setting up for a crazy February?

Anyway until then..keep riding stocks up for those on board.

These markets are so deformed. Nothing makes sense. USD getting smoked, but gold won’t respond much. Interest rates rise four times, and US stocks go sky high. I don’t get it

#124 Duke on 01.29.18 at 11:25 pm

#5 vanreal on 01.29.18 at 5:44 pm
This is what I don’t fully understand about your recommendation to continue renting. The rent will only increase and in the space of 10 years could likely go from the current 3,000 to possibly 5,000 and who knows where in twenty years. The mortgage however will likely decrease as they make payments to erode the principal. Don’t you have to look at the future as well as the present when you’re making this decision of rent vs buy?

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

What you said only makes sense if the property value goes up faster than inflation. Do you really believe the $1.6mil house will be $3mil in 10 years? Really?

#125 CalgaryCarGuy on 01.29.18 at 11:32 pm

Re #103 Ottawa Mike
“I was thinking of doing the same around 2010 but ended up buying a real house in the city instead. You’re definitely ahead of your time as the tiny house movement grows.
——————————————————————–
I have always been the guy who avoids “normal” and I like to think out of the box. There were definitely several years of research and planning before I moved out here. The first winter was an eye-opener but I’m well set-up now.
I’ve never understood the tiny house thing. Why not just buy a quality RV? My coach was 392,000 U.S. dollars new in ’97. I snapped it up for 47,900 on ebay and it was in spotless, purring condition. I’ve seen multiple days of sub -30 temps–even -41–and have always been plenty warm due to a good set-up of a well built coach and some inventive ideas. It’s a great lifestyle actually but you have to research and be determined to make it come true.

#126 When the Whip Comes Down on 01.29.18 at 11:33 pm

#112 Boombust —> See #118 Van no it all. He has a cousin who owns in the Charleston, above us all living under rocks. He’s hungry and thirsty and going to Cactus then the Fairmont. Cool guy

#127 Urban Exec on 01.29.18 at 11:36 pm

Price to rent ratio here in Streetsville, 35. Made enough last year from my portfolio to pay my rent for the next 8 years. Buy? I don’t think so! Price to rent ratio in Markham is close to 45 now.

#128 Newcomer on 01.29.18 at 11:49 pm

#98 Spectacle on 01.29.18 at 9:35 pm
… lost me at ” ride my bike to work” and “$12,000 per month combined income”.

Advice:: Peter, get off of the Fence, in or out….

——-

I’m missing something here. Seems to me like Peter’s healthy, wealthy and wise. I mean, sure he could aim to 20K/month and walking to work, but other than that, what would you have him change?

#129 Leo Trollstoy on 01.29.18 at 11:54 pm

#15 tccontrarian on 01.29.18 at 6:11 pm
Just checked my own Price/Rent ratio, as a reminder that I am in fact doing the ‘smart’ thing: it’s about 30 : 1!

Thank Mr. Landlord!!

That’s what some of my US tenants say when they don’t know what I paid for my properties.

Thank Mr. Tenant!!

#130 Leo Trollstoy on 01.29.18 at 11:58 pm

Evidence showed that sales mix not responsible for gains in YVR and YYZ real estate FYI

#131 Leo Trollstoy on 01.30.18 at 12:03 am

#75 Dee on 01.29.18 at 8:34 pm
My price-to-rent, in trendy Leslieville, is 25-30. Please, no one show my landlord this post; I’m rather enjoying that my rent is only 15% of my income.

I’m sure they’re enjoying that u think they bought the property yesterday

Don’t be late w that rent!

#132 DON on 01.30.18 at 12:19 am

#72 Blacksheep on 01.29.18 at 8:31 pm

“We love the neighbourhood we’re in, it allows us to walk to everything, it’s safe for the kid yet close to downtown, my commute is minutes by bike so I spend more time with the family. It’s where we want to be. Problem is the $1500/month we pay needs to double to get us a two-bedroom place.”
—————————–
Pete Buddy sorry, but you can’t afford Vancouver.

I know, I know, you won’t be able to cycle to work anymore, but your having kids and it’s not just about you anymore.

Set up some ride sharing deal, get the hell out Van and by some dirt. Who the hell wants to raise a kid in that environment anyhow?

Come out to the Valley (White Rocks nice) own and live very well on that income….
****************

White Rock is out in the Valley? It’s cheaper than Vancouver but… by how much? They must be selling good weed in the local shops there.

#133 Daniel on 01.30.18 at 12:29 am

Just calculated my buy to rent ratio living in one of the most expensive areas of Taipei City in Taiwan….

Wait for it :-)

The purchase price would be 48.6 years of current annual rent, OK as a foreigner living and working here I’m OK with renting.

#134 Fortune500 on 01.30.18 at 12:55 am

GTA Home sales data going back two years.

Nice interface

http://www.bungol.ca/

#135 Fraser Valley living on 01.30.18 at 1:00 am

Living the dream in yvr burbs. 10 yr old Executive home on acreage. Rent to own ratio : 53… religious reader, first time post, couldn’t help myself. Deep breath Peter, no need to buy with these deals!

#136 Humdinger on 01.30.18 at 1:14 am

Fake news in Canada increasingly appears to be a matter of what is not reported. Reporting on real estate price drops will be fun to watch.

Let’s see if this update on the Patrick Brown story makes it on the National tomorrow night:

http://frankmag.ca/2018/01/taking-down-brown-ctv-sleuths-girlfriend-experience

#137 Van RE on 01.30.18 at 1:22 am

Garth, the story in Van RE is very complex and mostly disconnected from any typical Canadian RE market.

Van RE is traded like paper at the futures market and attracted (emphasis on past tense) local investors as well as overseas or foreign money in BC numbered corps. The recent discoveries of money laundering at a Richmond casino were only the very tip of a gigantic financial fraud iceberg.

The “game” is stalling though and reversing trend. You’re right that the bag holders are the greater fools who bought at the top with huge leverage. The credit unions are probably under water. Similar to the S&L crisis in the States and more recently the GFC skeletons of Countrywide or Lehman.
BC taxpayers and possibly federal tax dollars are on the hook somewhere at sometime.

Real market value is around 50% of most recent assessment values. The big banks are very careful about lending now. They were instrumental in pushing through the legislative changes to protect themselves.

Unless I had a game plan to flip titles on properties or access to a pool of good and inexpensive qualified labor, I would never invest in Van RE until a correction had materialized.

In the meantime, renting is the only game in town for market outsiders and that’s not a bad thing at all. There are better opportunities in markets that I understand and can capitalize on.

#138 Yorkville Renter on 01.30.18 at 1:28 am

my ratio is over 27…and that excludes land transfer tax costs.

life is good!

#139 Bad Cowboy on 01.30.18 at 1:28 am

Trudeaus scuttling NAFTA to play for time because Obama and Biden want the play to be failure for Teump leading into the American midterms….to hell with Canada. That means a collapse on CDN markets between now and the end of this year. Trudeaus on side…..but not your side.

Trudys been saying all the right things for his racist EU partners and the genocide they’re perpetrating on EU citizens…..but all the wrong things for Canada.

#140 Yorkville Renter on 01.30.18 at 1:31 am

i will also mention… got baby #2 coming, and my wife wants to stay in our 2 bdrm condo until we’re bursting at the seams…

she smells blood in the Toronto market, thought she’d demand a house, but no.

I love my wife!

#141 Attention BC RE on 01.30.18 at 1:40 am

***Public Service Announcement***

On February 20, 2018 the NDP are going to be implementing 4 demand side RE initiatives on the dying BC RE market:

1 – the removal of the bare trust loophole (this is a big daddy – and big daddy Peter German targeting this big time).
2 – implementation of the BCHAF 2% non-resident speculation tax.
3 – expansion of the 15% foreign buyer tax province wide.
4 – the removal of the exemption of transactions for pre-sale condo assignments (another one that Peter German is all over).

The money laundering channels are the nail in the coffin. Don’t believe me? Check out the latest RE stats for West Vancouver. Deader than dead. And if you survive that – the cost of money going up is a rip tide you ain’t swimming out of to safety.

22 more sleeps until BC gets slammed with government induced cooling measures on the already dying RE market.

The NDP wants to close what Eby termed two “loopholes” in the foreign-buyer regulations: the use of trusts and other corporate vehicles to disguise home ownership and the exemption on transactions of pre-sale condo assignments.

#142 For those about to flop... on 01.30.18 at 1:45 am

Pink Snow falling in Delta.

Featured these guys once before,been struggling to minimize their losses for a while.

Just had a bit of a break and have now put it up at a come and get me out of this nightmare price.

On the hook for 1.62 ,which was 320k over the assessment at the time ,now they are down to 1.35 after trying to get 1.75 then1.62 then1.53 unsuccessfully.

Their bc assessment didn’t change much ,but their grasp of how much of a mistake they made seems to have…

M43BC

493 Shannon Way, Delta paid 1.62 March 2016 ass 1.28 were asking 1.53

May 19:$1,750,000
Aug 10: $1,620,000

Change: – 130000.00 7%

493 Shannon Way, Delta

Aug 10:$1,620,000
Jan 29: $1,350,000
Change: – 270000.00 -17%

https://www.zolo.ca/delta-real-estate/493-shannon-way

https://www.zolo.ca/index.php?sarea=493%20Shannon%20Way,%20Delta&filter=1

https://evaluebc.bcassessment.ca/Property.aspx?_oa=QTAwMDA1Vk1BQg==

Feel free to make a donation.

Flop For Fox Fund…

http://www.terryfox.org/get-involved/ways-to-give/

#143 Smartalox on 01.30.18 at 2:00 am

Price to rent: 33
Rent to income: 12%
Savings per month: $4300

Net worth: $600 000
Balanced, diversified.

#144 Smoking Man on 01.30.18 at 2:27 am

Huge melt down on the memo down here in LA la land.

Heads up.Huge libral me too take down imminent.

Star is keeping it quite for now. But there not the only ones with the story.

Popcorn and beer time.

#145 Island B20 on 01.30.18 at 2:45 am

Well, one month into B20 rules and the same overpriced houses in South Vancouver Island that did not sell in December are finally selling. There is so little on the market and no deluge of listings, and hence, no price pull backs. Houses that have sat for 6 months are finally selling because there is nothing out there. Rents up 30-40% over the last year and landlords are able to get that because there is no movement in the market.

Perhaps this is the freeze phase that will last for years as buyers and sellers are at a standstill and there is no product available to push the market in one direction or the other.

No B20 effect here yet….official stats coming in a few days that will prove that not even a dent has been made in the market.

#146 FahtCoot on 01.30.18 at 2:57 am

My landlord is losing ~$1200 a month on his “rental property”

Condo was recently purchased, quite close to the top of the market…

LOOK OUT BELOW!!

#147 Vanecdotal on 01.30.18 at 4:21 am

If the NDP “manage to destroy the market”, that would be a side-effect of reinstating and enforcing the rule of law that’s been strangely absent. Omelettes are messy!

On a related note, over the holiday schmoozing every single homeowner, some with multiple properties, echoed the “something must be done” meme usually heard exclusively from the renters in my circle. Ready to accept a haircut in value as they figure they’ve already made a good ROI. These are not over-leveraged opportunist types though, and all with substantial equity. Spec-u-vestors may have a different take on things, I do imagine if the market corrects more than the 20-30% magical unicorn figure there may be squealing.

The temperature of the herd has changed in the past year. These are guys/girls who have done well in RE and they’re fully expecting the punch bowl to be yanked and preparing. The GreeNDP have been handed a mandate to clean up this particular Dumpster Fire™ left by the old guard and they seem to have the will of both renters AND enough homeowners behind them to either fulfill the mandate, or face political peril.

#148 Rooster on 01.30.18 at 5:48 am

#121 Cold Front on 01.29.18 at 11:07 pm
Thank You Dougy!!
Game on!! Libtards quaking now.
Ontario soon to be a province again, that it so deserves to be after the last 14 years of failure!
**************

I’m a Libtard that can’t wait to see the rear-end of Wynne (figuratively). I am quaking now, as the Contards are knife juggling with what was a “can’t lose” election. Your champion Doug Ford is a poorly educated man’s Donald Trump.

If Ford wins the nomination, all the Libtards that would have voted PC, and all the Contards with a milligram of sense/morality/dignity will change their minds. There are some contenders from the Bill Davis mould, just pick one already. Forget what has happened to the Party recently and just deal. Ontario needs a change more than it needs arrest.

#149 Howard on 01.30.18 at 5:55 am

From Warren Kinsella’s blog : http://warrenkinsella.com/2018/01/column-metoo-isnt-just-coming-to-political-canada-its-here/

Read the comments too.

The #MeToo movement may yet have bigger fish to fry than Patrick Brown.

#150 OttawaMike on 01.30.18 at 6:46 am

I’m excited about the new startup airline going by the name of Good Boy Airlines.The pilot is literally a dog:
https://twitter.com/pixelatedboat/status/950875081047076864?s=09

#151 Victor V on 01.30.18 at 7:17 am

BREAKING: TREB Releases Market Year in Review & Outlook Report at Economic Summit

http://www.globenewswire.com/news-release/2018/01/30/1314159/0/en/TREB-Releases-Market-Year-in-Review-Outlook-Report-at-Economic-Summit.html

2017 Year in Review:

In 2017, annual residential sales were down compared to the record level set in 2016. Total sales reported through TREB’s MLS® System amounted to 92,394 – down by 18 per cent compared to over 113,000 transactions in 2016.

2018 Outlook:

Looking forward, the forecast range for TREB MLS® sales in 2018 is between 85,000 and 95,000. The midpoint of this range suggests an annual sales count slightly lower than the 2017 total. It is anticipated that year-over-year declines will be more pronounced in the first four months of 2018, as comparisons are made to the record pace of sales at the beginning of 2017. Conversely, sales are expected to be up on a year-over-year basis as we move through the late spring and summer months.

#152 Ian on 01.30.18 at 8:01 am

Doug Ford is not going to win the leadership and he’s an idiot for even entering. And I’m an ultrablue from Etobicoke.

It’s ridiculous. I was in his backyard when he announced for mayor. Now he looks like he’s throwing shit at a wall to see what sticks.

He should focus on the mayor’s job. Putting picnic tables in the middle of King St and conducting a war on cars nonstop is a big of enough problem.

#153 B on 01.30.18 at 8:12 am

Living in a place with a price to rent ratio of 28. Balanced portfolio churned out 10% last year. More than $4K into investments per month. Life is good, and credit to this blog for sharing a different perspective.

#154 Rooster on 01.30.18 at 8:14 am

Idjits guide* to investment accounts:

Non-registered – funded with after-tax income (no max). Taxes due in year investment income received. Losses can be subtracted from gains.

TFSA – funded with after-tax income (max $5500/yr plus the leap year of $11k). No taxes ever (allegedly).

RRSP – funded with pre-tax income (max 18% of earned income or ~$26k). Taxes due when funds are withdrawn.

All accounts are subject to consumption taxes – only another 13%, cough, cough.

The pros vs cons depend on individual characteristics that require some math chops or a good financial guru. The other gurus just want some of your money,
like the banks that charge you to manage your accounts, or buy/sell, or transfer out, or withdraw money, or talk to a human being.

The only concrete rule is that you should maximize all of them if possible with the caveat that life doesn’t begin in retirement.
Saving for a rainy day is always wise, especially if you live in Vancouver. If it doesn’t make your arthritis flare up, and your prostate is still in one piece, and your spine still bends, then living like a monk now will pay dividends.

If you want to stay in an apartment with kids and save it all up till they they leave home (basement is for storage only),that’s your choice. Just be sure to max that RRSP for your your sanity year(s) off.

*all calculations were verified by Dilettante, Roach and Carbuncle. Please report any (grievous) errors or omissions.

#155 Howard on 01.30.18 at 8:32 am

#148 Rooster on 01.30.18 at 5:48 am

#121 Cold Front on 01.29.18 at 11:07 pm
Thank You Dougy!!
Game on!! Libtards quaking now.
Ontario soon to be a province again, that it so deserves to be after the last 14 years of failure!
**************

I’m a Libtard that can’t wait to see the rear-end of Wynne (figuratively). I am quaking now, as the Contards are knife juggling with what was a “can’t lose” election. Your champion Doug Ford is a poorly educated man’s Donald Trump.

If Ford wins the nomination, all the Libtards that would have voted PC, and all the Contards with a milligram of sense/morality/dignity will change their minds. There are some contenders from the Bill Davis mould, just pick one already. Forget what has happened to the Party recently and just deal. Ontario needs a change more than it needs arrest.

——————————–

Bill Davis was left-wing and hails from a time when the Liberals and PCs were exactly the same. That time is long gone, and that’s a good thing. What’s the point in having two main parties that are identical in ideology and driving philosophy? Why shouldn’t voters have some choice?

Doug Ford isn’t my ideal candidate but I don’t see what’s so horrible about him. His personality clearly differs from that of a typical milquetoast Canadian politician but I don’t see how that makes him a bad person, just unconventional.

#156 Yorkville Renter on 01.30.18 at 8:36 am

#148 – agree 100%

DoFo is probably the WORST choice Ont PCs could make.
I’d vote NDP if I must… Libs need to go

#157 LivinLarge on 01.30.18 at 8:46 am

Paul: “Open answer if you vacate now what the F do you care?”…LOL, not one bit. My right brain just sat up and said “really? Don’t the new rules tie the landlord’s hands to a big sinking rock?”.

I live in a small but paid for house SWO when I’m stupid enough to live in Canada at all.

#158 kbean on 01.30.18 at 8:54 am

#131 Leo Trollstoy>>>

Sure if they bought at peak price, they are cash-flow negative and pooched. But the whole point is it does not matter when they bought it, they are better off selling it at a profit rather than getting that measly rent for their appreciated/expensive property. Makes sense?

#159 maxx on 01.30.18 at 9:26 am

#26 Raise rates Poloz or youre a currency manipulator! on 01.29.18 at 6:30 pm

“When is Poloz going to raise interest rates? I’m only getting a measly 0.55% in a high interest savings account at TD Bank!”

No argument here. There are, however, a gazillion ways to make what you have stretch to levels that are sometimes multiples of the returns you wish you could get.

Just recently, my insurer sent a bill with an 8.8% increase. How drôle. I contacted it, said their increase had no correlation to the ROI and they dropped the increase to….ZERO – for two years.

Negotiate, negotiate, negotiate. It’s not work, it’s fun and the feeling of success is far better than shoppers high.

If you look around, you can buy good, useful and often valuable stuff for pennies on the dollar. Tax-free too, which makes it wonderful added value – for you, not the greedy maw of taxation for the nation.

Unless and until Poloz raises rates, I’ll be squeezing the he!! out of retail by negotiating and/or sourcing at second-hand and charity shops.

It’ll work wonders you never imagined for your bottom line.

#160 IHCTD9 on 01.30.18 at 9:31 am

#149 Howard on 01.30.18 at 5:55 am
From Warren Kinsella’s blog :

http://warrenkinsella.com/2018/01/column-metoo-isnt-just-coming-to-political-canada-its-here/

Read the comments too.

The #MeToo movement may yet have bigger fish to fry than Patrick Brown.
————

Man, wouldn’t THAT be a nuke on Canadian Politics…

Kinsella isn’t some punk who wouldn’t have a clue either…

#161 Vasa on 01.30.18 at 10:04 am

#104 @Mark “Actually the ‘gains’ on properties in the GTA and the GVR have been severely exaggerated since the 2013 peak in prices. The sales mix is responsible for nearly all of the quoted/alleged “gains” due to the extreme onslaught of brand new, high end supply to the market, rather than existing resale. So a condo that you bought at, for instance, the 2013 peak, would not have appreciated since, and more recently is depreciating beneath peak levels.

Unfortunately a lot of people look at the Realtor “headline” number of the average selling price, and merely extrapolate this to their individual unit. Its quite inaccurate and a complete misinterpretation of the data.”

I have been monitoring a lot of properties in Mississauga over the last 4 years, Condos, Condo Townhomes and SFHs. The 50% increase from 2013/14 to spring 2017 real based on anecdotal sales and the asking price on similar properties then. Those numbers have come down significantly since then. A unit in my community reduced their ask from $650 to $580 and eventually pulled out the offer in Aug 2017.

So anyone that timed this upswing perfectly,
buy 2013/14 and sell 2016/16, speculative or not, had significantly.

RE or Stocks, any reasonable investor knows timing the market is pure risk, and anyone holding a property in GTA / YVR, secondary / investment ones in particularly, will see the downside risks now .

#162 Vasa on 01.30.18 at 10:10 am

#117 Living Large “Just an open question though about:”If I vacate now the landlord will look to increase the rent by 30-40% for the next tenant.”…is these even remotely possible today with the Ontario rent controls?”

Not with the current tenant, but nothing stops them from increasing significantly for a new tenant I suppose.

#163 IHCTD9 on 01.30.18 at 10:11 am

My coach was 392,000 U.S. dollars new in ’97. I snapped it up for 47,900 on ebay and it was in spotless, purring condition.
———

…and more living space than a gta condo (better view too I bet)!

#164 Mattl on 01.30.18 at 10:15 am

My favourite comments on these rent vs buy posts are from renters gloating about getting one over on their landlord. The assumption being that the landlord bought the property yesterday and the 40 ration they are it makes the the winner in the transaction.

Yes, 2500 rent on an 800k place is a great deal. But if you are in the GTA or YVR your landlord is likely in to that place for half that. They guy paying 3500 rent to a landlord in YVR to live in his 1.5mm house is actually living in a house that was only 400k 15 years ago. Your landlord can’t believe someone pays him 3500 bucks to live in a 80 year old house in dirty East Van.

See where I’m going with this? If house prices are seriously bloated than so is your ratio. So ya, I wouldn’t buy spend 900k for a 2bdm condomin Van but I also wouldn’t consider it a win to rent the same 600sqft for 3k. The only winner is the landlord that bought that place for 500k. New landlords and long term renters both lose in this market.

#165 Smoking Man on 01.30.18 at 10:18 am

The star sitting on the story of the decade.
Damed if they Do, damed if they don’t.

Its coming anyway.

History will judge them. You had this and held it back
Or do they commit ideology suicide and do there job.

Amazing times indeed.

https://www.thestar.com/news/gta/2018/01/30/gta-sexual-assault-crisis-centres-overwhelmed-amid-metoo-movement.html

#166 Vasa on 01.30.18 at 10:23 am

#129 Leo Trollstoy on 01.29.18 at 11:54 pm “That’s what some of my US tenants say when they don’t know what I paid for my properties.

Thank Mr. Tenant!!”
Begs the question Leo. Irrespective of what you paid for the property originally, if the current yield on that based on current prices is a paltry 1.5-2% after cutting all overhead costs, isnt it a prudent choice for a good investor to see it, and invest in other less risky avenues with higher yield?

Instead, a most of RE only portfolios are taking HELOCS and buying more properties at the current speculative prices.

#167 rent v buy on 01.30.18 at 10:39 am

Renting vs Buying calculations can be greatly impacted by stock market returns and housing market returns. Basically, the spread between your ROI between what you would earn on the stock market and what you would earn from the increase in value of the real estate that you own have a real impact on what is preferred. If housing is outpacing the market or vice versa, this can have a serious decision on what you should invest your money in.

An investor who only buys GICs generally would do better owning real estate if the rate of return exceeds their GIC returns.

Some people don’t have the stomach for any form of risk.

#168 Tater on 01.30.18 at 10:40 am

Renting in Roncy with a ratio of 27. Just a great deal. Need to move in a few months and will be able to get that above 30 based on what’s out there right now.

#169 Howard on 01.30.18 at 10:40 am

#160 IHCTD9 on 01.30.18 at 9:31 am

#149 Howard on 01.30.18 at 5:55 am
From Warren Kinsella’s blog :

http://warrenkinsella.com/2018/01/column-metoo-isnt-just-coming-to-political-canada-its-here/

Read the comments too.

The #MeToo movement may yet have bigger fish to fry than Patrick Brown.
————

Man, wouldn’t THAT be a nuke on Canadian Politics…

Kinsella isn’t some punk who wouldn’t have a clue either…

—————————-

Yup, and Kinsella scrupulously screens the comments section to weed out any potential libel. It seems someone very powerful has several affidavits against him, and Kinsella allowed the comment through.

#170 A J on 01.30.18 at 10:47 am

I’ll never understand why people making this much money want to take on tons of debt (and pay tons of interest). Just save as much income as you can and you can retire quickly and buy (if you want) with cash. You’re one of the lucky ones. There are millions of Canadians who would kill to make that much money a month. Don’t squander it by living above your means and saddling yourself with debt.

#171 Rooster on 01.30.18 at 10:52 am

#155 Howard on 01.30.18 at 8:32 am
#148 Rooster on 01.30.18 at 5:48 am
#121 Cold Front on 01.29.18 at 11:07 pm
Thank You Dougy!!
Game on!! Libtards quaking now.
**************
Your champion Doug Ford is a poorly educated man’s Donald Trump. If Ford wins the nomination, all the Libtards that would have voted PC, and all the Contards with a milligram of sense/morality/dignity will change their minds. There are some contenders from the Bill Davis mould, just pick one already. .
——————————–
………
Doug Ford isn’t my ideal candidate but I don’t see what’s so horrible about him. His personality clearly differs from that of a typical milquetoast Canadian politician but I don’t see how that makes him a bad person, just unconventional.
************
Doug Ford is a populist appealing to the lowest common denominator. A populist with a base can often persuade the orthodoxy to do the occasional right thing from time to time, but once in power they are a train wreck. I don’t know if he is a bad man, but he is not, IMHO, a very smart man or a very humble man. Granted, they are rare in politics; watch the Letterman interview with Obama to see what one looks like. Or remember Bill Davis with the respect he earned while in office.

#172 Smoking Man on 01.30.18 at 10:55 am

I think back in the day. Fast cars, beer and hormonds.

I don’t think there is a single guy out there who had a normal sex drive that did not push the boundaries in the mating game.

Now if you’re famous, your adolescent adventures will become public record. In a time when man hating is at an all time high.

What was normal courtship is now deviant behaviour.

Those risky French kisses in the past will now grow teeth and RIP out your toung.

Good thing I’m a nobody.

#173 dharma bum on 01.30.18 at 10:57 am

“At that point you can retire with an annual, lifetime, tax-efficient investment income of $260,000 and still retain the principal.” – Garth
——————————————————————–

Then, it’s Dharma Bum time.

#174 A J on 01.30.18 at 11:06 am

#74 CalgaryCarGuy

Kudos to you and your lifestyle! Very smart way to live!

#175 A J on 01.30.18 at 11:12 am

#152 Ian

I completely agree. There’s no way in hell he’s going to be selected leader. And if he was, it’d be a HUGE mistake. There’s no way I, or anyone I know, would vote for a Ford after the fiascos of the past. We need to move forward with solid leadership and bring positive change to the province, not start another circus.

#176 Ian on 01.30.18 at 11:18 am

Smoky,

State of the Union tonight, 6pm California time.

No doubt you’ll be on a beach somewhere with some JD enjoying it on your laptop.

Going to go way out on a limb and guess there won’t be any mention of the $21t of debt and 1/2t deficit…

#177 curious on 01.30.18 at 11:39 am

Hi All, long time reader, first time poster, to #117 Living large, once a unit is vacated the landlord is allowed to bring unit to market rent, even with out bringing it to any sort of upgrade. I live in south etobicoke in an older ( 1950s) building, a one bedroom was 1250, plus 50 per parking spot, plus hydro. Large, lake facing unit. The ladies living there vacated December 31. A new tenant moving in will pay, 1800 plus 50 per parking spot, plus hydro. Upgrade? Coat of crappy flat white paint, plastic handles on cabinets. A 2 bedroom is around 2400 now, and when vacant they say they are asking over 3000.

#178 cramar on 01.30.18 at 11:41 am

Price-to-rent ratio of 15 or less – buy the sucker. You’ll save money.

Price-to-rent ratio of 16 to 20 – you’ll be money ahead renting.

Price-to-rent ratio above 21 – your landlord is a benevolent deity. Or an idiot. Or a realtor.

————

Really useful guidelines.

Around my parts it seems the ratio is about 12, and when a SFH is up for rental, a dozen or two quickly want it. Which begs the question, why don’t they just buy? Perhaps the answer is that most or all have zip for a down payment, and/or cannot qualify for the piddling mortgage.

Just shows the sorry state we are in today when a couple taking home $144k cannot afford a house in their area, and many others cannot even afford to buy a $200k starter house.

#179 Adrian on 01.30.18 at 11:43 am

The buy to rent ratio improves with higher end properties. For example, I currently rent an average 3br townhome for $1700 in the GTA (ratio of 25). Not terribly exciting I must admit.

But, I’ll be moving to Markham this spring where a very decent 1.2M-1.4M 4br home rents for about $2200-$2300 (ratio of about 50!). How can you go wrong with that? That’s not even close to covering interest payment only.

Life’s good!

#180 HaHaHa on 01.30.18 at 11:47 am

Stock selloff last 2 days. Bond market correlation for sure. If you are selling stocks right now(panic) wait till state of union address tonight. I will predict heavy prop of bond market and stocks rise rest of the week. Watch the bond market. Witness the manipulation.

#181 Howard on 01.30.18 at 11:48 am

#167 Rooster on 01.30.18 at 10:52 am

I don’t care about a leader earning “respect”, I care about a leader who can get results. Granted the former usually flows from the latter.

As bad as Rob Ford was, he was still leagues better than the marxist public-sector union toadie that preceded him as mayor. Doug Ford is Rob but with discipline and without the self-destructive vices. After 15 years of far-left dogma shoved down our throats in Ontario, maybe a little populism would be nice?

Anyway I doubt he’ll get the job so it’s almost pointless to discuss it.

#182 For those about to flop... on 01.30.18 at 11:57 am

The guys over at howmuch seem to have a fascination with crypto currency nowadays.

I,ll keep supporting them and hope the fever breaks…

M43BC

“Visualizing The Meteoric Rise Of Cryptocurrency in the Past 5 Years.

The cryptocurrency’s meteoric rise has stunned the world and defied traditional laws of market behavior. After years of being labelled as an “experiment,” “bubble,” and “fade,” the cryptocurrency market continues to remain overall resilient in the face of incredible uncertainty. The crypto movement has gained such a vast amount of steam in such a short period of time that a visual is needed in order to truly appreciate the dramatic changes.

In order to showcase the growth in the overall cryptocurrency, we chose to create a visual showing how the top ten cryptocurrencies by market cap have changed over the past five years. Using January as the benchmark, we found the top ten cryptocurrencies by market cap between the years of 2014 and 2018 from CoinMarketCap.com. In order to more clearly depict the market cap growth during the time period, we used a green color scale ranging from light to dark shade. The darker the green background on each square, the larger the market capitalization. Conversely, lighter shades represent smaller market caps.
Bitcoin Still Top Dog, But Market Cap Dominance In Downtrend
The “grandfather of cryptocurrency,” Bitcoin, has single-handed brought the crypto market to where it is today. Without Bitcoin, there would be no cryptocurrency market. However, the “grandfather” is getting old as other altcoins continue to see massive growth and influence within the emerging industry. In January 2014, Bitcoin’s market cap was $10.20 billion, which represented 89% of the total market cap of all cryptocurrencies. As of January 2018, Bitcoin’s market cap has skyrocketed to $192 billion, but now only represents 33.40% of the overall cryptocurrency industry’s market cap.

As cryptocurrencies were continuing to ride out the final stages of its first bull market in January 2014, only four coins were valued above $100 million dollars. By 2015, the market saw a steep crash, which resulted in only two cryptos above the $100 million mark in the top ten. The market reloaded in 2016 before leading to the start of the current bull run. In January 2017, the crypto market saw a record seven coins above the $100 million mark, but only Bitcoin was still in the billions club. After cryptos began going mainstream in late 2017, a face-melting rally began which propelled all top ten of the largest cryptocurrencies into the billion-dollar market cap club.

Here is a breakdown visual, based on the total size of market cap of the top ten cryptocurrencies between January 2014 and January 2018:

– January 2014: $11,356,979,703

– January 2015: $3,403,948,945

– January 2016: $6,283,781,652

– January 2017: $16,985,815,798

– January 2018: $455,573,149,014

Overall, the total market cap of the top ten cryptocurrencies has risen from $11.36 billion to $455.57 billion between January 2014 and January 2018. This translates to an increase of $444.22 billion or 190.27% over the five-year period. Interestingly enough, the top three largest cryptocurrencies in January 2014 would be the only three to consistently make the top ten list each year: Bitcoin, Litecoin and Ripple. Ethereum busted onto the top ten scene by January 2016, and has surprised the entire community with its massive rise to be undisputed second largest cryptocurrency by market cap for the second year running. Overall, each year brings new revelations and insight into the state of the cryptocurrency market.”

https://howmuch.net/articles/top-10-cryptos-past-5-years

#183 LivingLarge on 01.30.18 at 12:05 pm

Curious, thank you for taking the time to give me real life numbers. Not being a landlord I didn’t realize that there was a “market rate” floor to the rent control rules. It makes sense that there would be such a process but I was naive about the whole process.

Thanks again for adding to my knowledge base.

#184 Todd on 01.30.18 at 12:07 pm

It almost feels like the market is trolling Trump. Dow down 500 points in the two trading days before the State of the Union.

#185 Dups on 01.30.18 at 12:11 pm

That house looks like a barrack. I can not believe it 1.6 Mil. How can a millionaire fall to that level of housing. Have people lost the sense of value? Or is the money they make so easy that they have no sense of how hard it is to make that much in reality?

Moving to another city is always a good option. Be a real millionaire and have something to show that it is not a barrack and with money in the bank so you do not end up driving an rusty Chevy Cavalier as a Millionaire. Life goes on in other places too.

#186 Mike in Toronto on 01.30.18 at 12:25 pm

#155 Howard

I have a few problems with Doug Ford.

First, he’s part of a political dynasty. A small one, but it still reeks of incompetence and nepotism.

Second, he pretends to be the “every man” when he’s more corrupt than the every man, and born a lot wealthier than the every-man.

Third, is that he’s running on U.S. style political branding. Even to the point of in the past trying to bring partisanship into City Hall.

This is a divisive strategy, mentally lazy, pitting “us against them”, embracing all the “isms” in the name of “values”. The PCs should be better than that. Shove your values, balance the books.

Fourth is that he’s going to screw the downtown, branding them “Liberal elites”, something that doesn’t even make sense in Canada, but we all get U.S. news, so everyone knows what he’s talking about. Those “Liberal Elites” and their frappuchinos, fixies and bleeding hearts for welfare.

Fifth, he’s going to follow in Harris’ footsteps, probably cancelling any transit plan he can get cancelled (again, just as his Father stood back and watched…except his brother’s Scarborough disaster of course), and putting more people out on the streets, with no regard for how much it will screw up the city. This man will control healthcare.

I think he’s going to win though, because the Liberals have no candidates, the NDP, well, they’ll find a way to fail.

Garth, could you run? I promise to vote PC to put you in office.

#187 Todd on 01.30.18 at 12:26 pm

Hey Garth, if you are renting a condo, how do the fees factor into the price to rent ratio? Just a straight calculation puts us at 11.5 but take condo fees out of the rent and it changes to 20.

#188 Shortymac on 01.30.18 at 12:26 pm

My friends are in the same boat right now, their baby just hit 1 years old and they are looking for a 2 bed rental but have a tight budget of 1300/mon. Very difficult to find right now.

You may just have to move out of your hood if you want more space OR get very creative with your living space. It’s possible.

I get living cramped like that is very stressful, my husband, roommate, and myself lived in a cramped space for a good 5 years before we got bullied out by our landlord.

It was worth it in the end because we lucked out with a 4-bedroom whole house rental for 1900 in rexdale. We’re not on top of each other anymore and can give each other space.

#189 Alistair McLaughlin on 01.30.18 at 12:30 pm

Leo Trollstoy, now I know you’re full of it. No way are you a successful landlord. If you were, you’d know instinctively that what the owner paid years ago is irrelevant. When it comes to making decisions in the present, what the place is worth today is the only thing that matters. If the place is worth 30 times rent TODAY, then it makes sense to SELL the property and cash in on your windfall.

What kind of idiot would hang onto a property that has appreciated so far ahead of the income stream it produces? (Other than a house-pumping realtor who thinks prices only go up.) Any property investor with a lick of sense would sell, take the windfall, and invest in a different location where the price-rent ratio was more favourable to the landlord. Hanging onto a property because the price-rent ratio was favourable back when you bought it is just the amateur landlord’s version of the sunk cost fallacy. Yes, there are tax considerations, but since you mentioned US property, there are provisions in the US (Section 1031) allowing you to roll the capital gains into new properties without taking the capital gains tax hit. But of course, as a successful international property investor you know that already right? RIGHT?

Comment sections all over the Internet are full of people pretending to be wealthy. Sorry son, but you’ve been outed, and you did it to yourself. You’re not rich. You’re just another guy living out his wealth fantasies online.

#190 IHCTD9 on 01.30.18 at 12:57 pm

#169 Howard on 01.30.18 at 10:40 am
#160 IHCTD9 on 01.30.18 at 9:31 am

#149 Howard on 01.30.18 at 5:55 am
From Warren Kinsella’s blog :

http://warrenkinsella.com/2018/01/column-metoo-isnt-just-coming-to-political-canada-its-here/

Read the comments too.

The #MeToo movement may yet have bigger fish to fry than Patrick Brown.
————

Man, wouldn’t THAT be a nuke on Canadian Politics…

Kinsella isn’t some punk who wouldn’t have a clue either…

—————————-

Yup, and Kinsella scrupulously screens the comments section to weed out any potential libel. It seems someone very powerful has several affidavits against him, and Kinsella allowed the comment through.
_____

I’m guessing Bill M the way he emphasizes power.

Justin has no power, he’s just the PM for now. Plus he seems to believe in a lot of the stuff that comes out of his mouth.

BM has been a power broker his whole life, lots of time to get into trouble.

#191 Newcomer on 01.30.18 at 1:21 pm

#185 Dups on 01.30.18 at 12:11 pm
That house looks like a barrack. I can not believe it 1.6 Mil. How can a millionaire fall to that level of housing.
——–

That is what is known here as a “tear down.” The buyer would be planning to build a new house on the lot, which is why it is so crazy cheap.

#192 Guy in Calgary on 01.30.18 at 1:29 pm

Why are people getting caught up on the $12k/month deal. That is likely gross, which means if they are both working, they are making around $72k/year each. In Vancouver, that is nothing.

#193 Piet on 01.30.18 at 1:41 pm

My wife owns the house, and she doesn’t charge me rent. So does that make my ratio infinity?

#194 I got me some hormonds on 01.30.18 at 1:52 pm

#172 Smoking Man on 01.30.18 at 10:55 am

I think back in the day. Fast cars, beer and hormonds.

I don’t think there is a single guy out there who had a normal sex drive that did not push the boundaries in the mating game.
Now if you’re famous, your adolescent adventures will become public record. In a time when man hating is at an all time high.
What was normal courtship is now deviant behaviour.
Those risky French kisses in the past will now grow teeth and RIP out your toung.
Good thing I’m a nobody.
_______________________________________
For once in his miserable druken life Smoking Man has got it correct, “Good thing I’m a nobody.”

P.S. Make sure you share them hormonds whens yas gos ta Costco for some beer-nuts to make tasties on yer toung.

#195 Smoking Man. on 01.30.18 at 1:54 pm

And another Canadian company going South.

https://www.just-food.com/news/dr-oetker-to-shut-canada-pizza-plant-amid-challenging-market_id138591.aspx?utm_content=buffer38fdf&utm_medium=social&utm_source=twitter.com&utm_campaign=buffer

#196 Howard on 01.30.18 at 1:57 pm

#186 Mike in Toronto on 01.30.18 at 12:25 pm

Points 1/2/3 : Justin Trudeau blew up the dynasty/rich-guy taboo. There’s no denying that rich people from political families have an easier path to power than others. It’s just the way the world is.

Point 4 : Exactly who is projecting one’s values on everyone else? The Liberal elites in power in Ontario have argued that, for example, you must be a religious bigot if you disapprove of the province teaching pornography to your kindergarten-age children.

Point 5 : Okay, you got me, Harris shouldn’t have axed the Eglinton subway. A new PC government won’t be able to do the same – Eglinton Crosstown is already half done, and other transit projects benefit more than just downtown. I don’t know what you’re talking about re: Harris forcing people onto the streets. Did he dial back the Nanny State a bit? You bet, and good on him.

#197 conan on 01.30.18 at 2:02 pm

Looks like Mr. Market is doing a healthy correction, don’t go bitcoin on us…….

Quiet day on the #Metoo front. Is it over?

https://youtu.be/-OX2WErOvD4?t=77

#198 chopstix on 01.30.18 at 2:09 pm

trying to rent or buy in Scamcouver is totally crazy on either side right now.
”Vancouver renters’ union to fight soaring costs in city’s housing market
Vancouver Tenants Union formed last spring in response to growing number of renters fearing eviction.”
https://www.northdeltareporter.com/news/vancouver-renters-union-to-fight-soaring-costs-in-citys-housing-market/

excerpt:
”In 2011, more than 50 per cent of Vancouver households were rentals, says Statistics Canada in the latest numbers it has available.

The group initially formed to support low-income renters in rundown single-room accommodations in the city’s Downtown Eastside, but Pedersen said the need for a citywide union became apparent as more people contacted them outside the area looking for help.

“The housing crisis is out of control and so many people are getting pushed out of their homes,” she said.

Regulations in B.C. cap annual rent increases for an existing tenant in a unit, but landlords are free to raise rents by any amount when a renter moves out. Pedersen said that gave landlords an incentive to take advantage of loopholes in the regulations by flipping leases or giving notice of their intention to renovate or redevelop a site to push out tenants.”
“When someone moves out the rents are jacked up two or three times higher, or beyond what people can afford,” she said.

#199 When the Whip Comes Down on 01.30.18 at 2:17 pm

#192 – R-E-A-D…. The guy indicated their $12,000 per month is “take home” which means net to most people. That is not insignificant money. Essentially implies they are making close to $100,000/year gross each as 30 years olds.

#200 Penny Henny on 01.30.18 at 2:22 pm

#67 Hairhead on 01.29.18 at 8:23 pm
I got you all beat. My ratio is 111.

No joke. The house I live in is “valued” at 4.4 million. I rent for $3,300/month.

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

Hey Hairhead. I going to take a guess that the land that the house sits on is worth almost all of the 4.4 mil.

in other news bitcoin under 10,000 usd

#201 For those about to flop... on 01.30.18 at 2:28 pm

Pink Snow falling in North Vancouver.

There is a discrepancy between the two documents regarding which year this house was built,one states 2015 and the other 2017 ,but either way it is still better that they got a new product rather than the bulldozer in the assessment.

Been trying to offload in since last August.

Picked up for 3.63 in May 2017 ,above assessment at the time ,the most recent one came up to at least put one leg back on the stool…

M43BC

3885 Sunset Boulevard, North Vancouver

Aug 22:$3,980,000
Jan 29: $3,648,000
Change: – 332000.00 8%

https://www.zolo.ca/north-vancouver-real-estate/3885-sunset-boulevard

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

Feel free to make a donation.

Flop For Fox Fund…

http://www.terryfox.org/get-involved/ways-to-give/

#202 dave b on 01.30.18 at 2:28 pm

In twenty years – when are just 50
S/B when “you” are just 50

#203 RyYYZ on 01.30.18 at 2:31 pm

My price to rent ratio is somewhere around 13.5. I bought. Currently rent on a place like this is more than what I pay in mortgage payment + monthly condo fee + property tax. Of course I also have to maintain the place and there’s the opportunity cost of the $45,000 I put down on the purchase. Was it the right decision? Only time will tell.

#204 TalkingPie on 01.30.18 at 2:42 pm

#192 Guy in Calgary on 01.30.18 at 1:29 pm

He says right in the post that it’s $12k “take home.”

From where I’m sitting, that’s a very healthy household income. Regarding it being “nothing” in Vancouver, it’s about twice the household average.

#205 RyYYZ on 01.30.18 at 2:47 pm

ps that 13.5 ratio is based on the price when I bought. Based on a current value (or at least price) of around $300k (a similar unit sold for nearly $380k last summer), it would be under 10. Of course, changing property values may well bring that value back down, even below what I paid. Then the ratio won’t be looking quite so good.

#206 jess on 01.30.18 at 3:01 pm

spoofing
http://www.cftc.gov/LawRegulation/Enforcement/EnforcementActions/index.htm

Aiding and Abetting Spoofing and Manipulative and Deceptive Scheme

RELEASE: pr7681-18

January 29, 2018
CFTC Files Eight Anti-Spoofing Enforcement Actions against Three Banks (Deutsche Bank, HSBC & UBS) & Six Individuals

“Deutsche Bank 2008 -2014

The CFTC today issued an Order filing and settling charges against Deutsche Bank AG (DB AG) and Deutsche Bank Securities Inc. (DBSI) (collectively, DB), requiring DB to pay a $30 million civil monetary penalty and to undertake remedial relief. The Order finds that from at least February 2008 and continuing through at least September 2014, DB AG, by and through certain precious metals traders (Traders), engaged in a scheme to manipulate the price of precious metals futures contracts by utilizing a variety of manual spoofing techniques with respect to precious metals futures contracts traded on the Commodity Exchange, Inc. (COMEX), and by trading in a manner to trigger customer stop-loss orders. “…read more @

http://www.cftc.gov/PressRoom/PressReleases/pr7681-18

#207 Yield on 01.30.18 at 3:02 pm

#164
The point Garth makes is that selling and investing the sum, wins.

Even if the 1.6M house was bought for 400k 15 yrs ago.

The rent may have a nice yield on the original 400k, it is nothing compared to income on 1.6M stock portfolio.

#208 jess on 01.30.18 at 3:05 pm

When they work together:

Spoofing, which is a criminal offense under the 2010 Dodd- Frank financial reform law, involves placing bids to buy or offers to sell futures contracts with the intent to cancel them before execution. By creating an illusion of demand, spoofers can influence prices to benefit their market positions.

In August, a U.S. appeals court upheld the conviction of former New Jersey-based high-speed trader Michael Coscia who was the first individual to be criminally prosecuted for spoofing.

This is the first time the CFTC, DOJ and FBI have worked together to bring both criminal and civil charges against multiple companies and individuals, sources said,REUTERS.

#209 Hairhead on 01.30.18 at 3:06 pm

Hey Penny, you’re absolutely correct.

And if I were the owner, that sucker would be on the market in a nanosecond!

#210 joblo on 01.30.18 at 3:23 pm

6500 offered packages at Shaw to cut 650.
So this is what a “new age of doing business.” looks like?
Uhh, okay.

http://newsroom.shaw.ca/materialDetail.aspx?MaterialID=6442452086

According to Trudeau, we have entered a “new age of doing business.” No longer will managers be driven by profits and losses, but rather by a “values-based” approach to business.

#211 James on 01.30.18 at 3:31 pm

#184 Todd on 01.30.18 at 12:07 pm

It almost feels like the market is trolling Trump. Dow down 500 points in the two trading days before the State of the Union.
___________________________________________
Nope dont worry be happy its now only down 400 points.
Health care stocks dragged the market lower on Tuesday after Jeff Bezos, Warren Buffett and Jamie Dimon unveiled a plan to get into the health insurance business. UnitedHealth (UNH) fell 4%, while CVS (CVS) and Walgreens (WBA) shed 5% apiece. Take that healthcare system!

#212 James on 01.30.18 at 3:33 pm

#195 Smoking Man. on 01.30.18 at 1:54 pm

And another Canadian company going South.

https://www.just-food.com/news/dr-oetker-to-shut-canada-pizza-plant-amid-challenging-market_id138591.aspx?utm_content=buffer38fdf&utm_medium=social&utm_source=twitter.com&utm_campaign=buffer
________________________________________
So when you come back here to Canada you wont have a job?
I hear McDonald s is hiring old people like you Smoking Man. Or you could be the greater at the local Walmart in Sarnia.

#213 Cool hand luke on 01.30.18 at 3:41 pm

Now that is an excellent post. Puts it all into perspective. The patient will prevail.

I know renting is not ideal, but in this case, buying is irresponsible to your family and your kids future.

#214 Mark on 01.30.18 at 3:50 pm

“now I know you’re full of it.”

The rest of us have known that for years, especially given how he goes on at length about his delusions of Canada having a good job market for the tech sector and engineering talent. Every time he comes up with such nonsense, I have to school him, but its pretty clear that he’s really only here to live up to his namesake.

#215 John in Stoon on 01.30.18 at 3:50 pm

Looking to change advisors.
Currently with one that uses mutual funds and I find the fees excessive.

Not comfortable DIY.

80k in wifes RRSP and kids RESP. 20 years to go. I have a pension. House will be paid off by retirement. Have other assets such as land, inheritance lol.

While lower fees are just one of the things I’m looking at for an advisor amongst returns and financial planning, lower fees is an important check mark for me.

Any help to be pointed in the right direction would be appreciated.

#216 Victor V on 01.30.18 at 4:21 pm

Once-hot Toronto housing now has buyers ‘sitting on sidelines’ as lending rules bite

https://www.bnn.ca/once-hot-toronto-housing-now-has-buyers-sitting-on-sidelines-as-lending-rules-bite-1.982524

The Magnelli family is feeling the effects. Mom Loredana Magnelli has saved for a few years to help her two kids, age 30 and 26, put together down payments to purchase apartments in Toronto. Their price point of about $300,000 each seemed like a viable opportunity two years ago. Now, that seems impossible.

“When you’re looking at a $400,000 to $450,000 mortgage and your interest rate is going to be higher, that’s huge money,” Magnelli said. She considered adding another mortgage to her own house to help get her kids their dream homes, but ultimately decided against it. They’ve put a stop to their search for now in hopes that home prices will fall to more affordable levels.

“It’s pretty frustrating,” she said. “My son is 30. He’d like to have a place of his own.”

#217 Victor V on 01.30.18 at 4:23 pm

Only thing colder than Toronto right now is its housing market

http://business.financialpost.com/real-estate/once-hot-toronto-housing-hits-deep-freeze-as-lending-rules-bite

While the bleak mid-winter is never the best time to sell a home in Canada, a string of open houses in the country’s largest city were chillingly empty on a recent Saturday afternoon. Tougher mortgage rules went into effect on Jan. 1 just as higher interest rates began to bite, and the market’s on edge, waiting to see if a downturn that began last year will accelerate under the added pressure.

“Lots of people are sitting on the sidelines waiting or hoping that prices would fall,” John Pasalis, president of Toronto-based Realosophy Realty Inc., said in a phone interview. “I don’t expect to see a rapid increase in prices or a big turnaround this year.”

#218 DIY on 01.30.18 at 4:42 pm

#215 John in Stoon
Not comfortable DIY.

You don’t have to assemble a stock portfolio yourself.

Just buy the index, with a Vanguard ETF, and you are done. Almost zero fees, and your money will grow along with the industry/economy. You’ll be fine.

#219 Penny Henny on 01.30.18 at 4:56 pm

#195 Smoking Man. on 01.30.18 at 1:54 pm
And another Canadian company going South.

https://www.just-food.com/news/dr-oetker-to-shut-canada-pizza-plant-amid-challenging-market_id138591.aspx?utm_content=buffer38fdf&utm_medium=social&utm_source=twitter.com&utm_campaign=buffer

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

the dr. oetker pizzas I buy are made in germany

#220 For those about to flop... on 01.30.18 at 5:03 pm

pm
#215 John in Stoon
Not comfortable DIY.

You don’t have to assemble a stock portfolio yourself.

Just buy the index, with a Vanguard ETF, and you are done. Almost zero fees, and your money will grow along with the industry/economy. You’ll be fine.

///////////

Hey John,the only thing I can add to this is a suggestion that is frowned upon around here but it is suitable for a certain type of investor.

The last time I looked Cibc has index funds where if you put 50k in they slash the mer to around 0.40 and you get all the hand holding you want.

With tfsa now above this number this is a new option for nervous nellies.

My wife is one and I don’t hear a peep…

M43BC

#221 FLHTK on 01.30.18 at 5:07 pm

No Brainer….pick the 3.3 million over the house any day..i’d continue to rent and live like a millionaire knowing what was the final outcome….260K a year!!! Knowing you can go, do, and live anywhere you wanted in retirement. I don’t think i’ll have 3.3 million in 20 years
Sign me up for this route Garth

#222 aa5 on 01.30.18 at 5:16 pm

In Victoria right now it is like a gold rush as all sorts of people get put on the gov payroll for salaries that could choke a horse.

I am one of the few right wing people in Victoria. But I did predict, that if the people of Vancouver are stupid enough to vote NDP.. we would tax the people of Vancouver hard.. and it would be spent here in Victoria.

#223 IHCTD9 on 01.30.18 at 5:43 pm

“As a first step in its change initiative, Shaw is implementing a Voluntary Departure Program from January 31 to February 14, 2018, to give selected employees the opportunity to think critically about their future with the company, and make realistic decisions about their role in Shaw’s evolution“

Lol! Nice sanitization job!

Translated:

“Dear employee #4358,

We are automating/outsourcing your job. We can offer you $250.00 to take a hike right now, or you can stay on for minimum wage with no guarantee of future employment”

That release by Shaw reminds me of Hydro One’s release when the new “time of use” billing came out.

“A new way to manage your hydro bills”

We got managed allright…

#224 A J on 01.30.18 at 5:44 pm

#216 Victor V

I’m legitimately disturbed that people my age would allow their parents to put another mortgage on their house so they can buy a place. WTF. If your parents are buying you a place, YOU CANNOT AFFORD IT. Take some personal responsibility over your finances instead of ripping all the net worth out of your parents home. It’s seriously messed up millennials would even consider doing that to their parents. And it’s messed up their parents would allow their kids to do that to them!

#225 YVR Renter on 01.30.18 at 5:47 pm

Our ratio is 50. Hoo hah!

#226 Guy in Calgary on 01.30.18 at 5:57 pm

“#204 TalkingPie on 01.30.18 at 2:42 pm
#192 Guy in Calgary on 01.30.18 at 1:29 pm

He says right in the post that it’s $12k “take home.”

You are right, my mistake.