The triple header

When Canada’s biggest builder figured its prices had to drop to stay in the game, the media went nuts. For the past few weeks sorry tales have hit mainstream sites, Twitter and FB, pillorying Mattamy Homes for selling unbuilt houses for $90,000 less than outraged buyers paid a year ago – for homes yet to be built.

To its credit, the firm shrugged. Nobody complained when prices were rising, it said. The housing market goes up, it goes down. Deal with it.

Now check this out. Even the well-heeled have decided real estate’s too laden with risk, and values must come down to reduce it. An upscale GTA development has just slashed its asking prices – by $1 million. Just be thankful you didn’t buy a palace in the Upper West Side from Conservatory Group a few months ago. If you did, lawyer up.

New home prices have stalled out in Canada for the first time in memory. Sales of newly-constructed houses in the nation’s biggest market collapsed last year. Resales are being hit too – down 22% last month in the GTA. The price of the average detached fell 9%, or more than $90,000. Listings are 130% higher than a year ago. It takes twice as long to sell a property.

No wonder.

The recent stock market gyrations are telling us something. No, they’re not in trouble and there’s no evidence another 2008 is on the horizon. But markets are signaling the wind has changed. No more are we in an era of cheap money, easy credit, low rates, zero inflation and central bankers throwing cash from helos.

Stocks have been in a wild funk now that CBs are serious about removing stimulus from the economy, letting bond yields run amok and doubling down on inflationary pressures that have the rabble demanding higher wages. Suddenly, after bubbling 30% higher in little more than a year, equity prices looked way too expensive as the tide of cheap money started to recede. As a result, we got a correction.

What’s whacked stocks, however, can be lethal to real estate in a country when 70% own houses and have racked up $1.6 trillion in debt to get them. If the economy here were ever to sputter and people started losing their jobs, well, watch out.

Oh, wait…

Friday’s employment numbers were awful. Where 10,000 new jobs were expected last month, 88,000 were gone. The national jobless rate increased. January became the worst month for people losing their incomes since the beginning of 2009, when the country was plunged into the credit crisis. More part-time jobs were shed than ever before.

Of particular concern was this: the service sector led the retreat, giving up almost 72,000 positions in real estate, insurance, financing and professional services. This matters since our real estate lust has resulted in a bigger share of the economy going to residential real estate than oil and gas. As pointed our recently by Macquarrie economists, property-related commissions alone equal 3% of the country’s GDP. Yikes. So what happens when people stop buying, when mortgage rates rise, and the feds usher in a moister-eating stress test?

You bet. Job loss. Along with the rising cost of money and tougher regs, this is toxic to the real estate orgy.

Also of note: the average number of hours worked last month declined, yet wages surged by 3.3% – the biggest advance in years. Why? “The employment drop coincided with an increase in the minimum wage in Canada’s largest province – Ontario,” noted Bloomberg. “That fueled an acceleration of the national wage rate.”

So there you go. Higher wages and fewer people collecting them. Meanwhile the cost of money is swelling while houses on the Upper West Side get pushed down by a million.

How can anyone be surprised?

167 comments ↓

#1 Note from YVR on 02.09.18 at 5:32 pm

Can you tell us what is happening in beautiful British Columbia. We know GTA is pooched.

#2 Jungle on 02.09.18 at 5:33 pm

So is it a good time to invest new money in the stock market?

#3 Screwed Canadian Millenial on 02.09.18 at 5:35 pm

Working less and making more money is bad now? Lol. Just to burst the boomer bubble, I’ll leave this here. The job losses had nothing to do with the minimum wage.Quebec lost 30,000 jobs (more than Ontario per capita) and they didn’t have a minimum wage increase.

https://www.theglobeandmail.com/report-on-business/economy/jobs/economy-sheds-88000-jobs-unemployment-rate-climbs/article37917112/

Job losses were heaviest in the services sector, which shed 71,900 positions in industries including educational services, finance, insurance and real estate. Among goods-producing firms, the construction sector saw the biggest decline, losing 14,900 jobs.

Ontario had the biggest jobs decline among the provinces, shedding 50,900 positions on a drop in part-time work.

***The job losses were spread across industries and included higher paid work, according to the statistics agency. Employment in the food and accommodation sector, where many workers make minimum wage, was little changed.***

You are over your limit. – Garth

#4 Mark on 02.09.18 at 5:35 pm

Barring any improvement of the data, the Bank of Canada will be on the sidelines for a long time to come and may even have to start cutting again.

This won’t help homeowners though. As falling prices imply higher risk in lending as the value of collateral backing mortgage loans decreases. Risk premiums will continue to rise.

Poloz thought he was being all cute raising to 1.25%, but as I warned frequently over the years, deflation is the bigger longer-term problem, not inflation. Especially as the Canadian consumer debt bubble implodes.

#5 Penny Henny on 02.09.18 at 5:37 pm

Hey where is the rest of that dog sled team.

Reminds me when Rosie Someone took the subway as a contestant in the NY marathon.

#6 213 FOOL on 02.09.18 at 5:39 pm

I’m 36 going through my first(!) correction. Got some $$ in a self managed account which I thought was balanced but maybe it isn’t… This SUCKS!!!

#7 Penny Henny on 02.09.18 at 5:40 pm

Those Conservatory homes did not sell. Lots 112-118 are still available. Might they be FAKE list prices? Nudge, nudge, wink, wink. Know what I mean?

#8 Mike in Edm on 02.09.18 at 5:42 pm

Are real estate agents considered employees, or are they considered self-employed? If the latter, they wouldn’t be counted in this latest dismal job reports, would they?

#9 MF on 02.09.18 at 5:44 pm

I know tons of people who work in the restaurant industry here in Ontario.

They all same the same thing: hours cut dramatically, prices rising.

We all know this minimum wage increase would be a disaster. Guess we have some proof now.

Make sure you all vote in June to get rid of the provincial Liberals as soon as we can.

MF

#10 Screwed Canadian Millenial on 02.09.18 at 5:44 pm

Hey Garth, you’re a numbers guy right. I read the monthly Statscan jobs reports. Been doing so for years. Do you find it at all odd, that every friggin month, “economists” expect 10,000 jobs to be added? Every month, it’s always “a survey of economists expected 10,000 new jobs to be added”. I just find it funny. They’re not even putting any effort in. I mean, this country imports 350,000 migrants per year (not racist), and unlimited TFWs (not racist), you’d think we’d expect more than 10,000 jobs per month to be created. Just sayin! Not to mention how many hundreds of thousands of kids graduating every year.

Anyways yeah I agree this country is in p*ss poor shape but it’s got nothing to do with the minimum wage. Imo it’s open door mass migration (not racist), crap tier wages (which leads to debt), all these limitless foreign worker visas, high taxes and insane cost of living. The weather doesn’t help either.

——————–

Relating to housing. Did any of you boomers catch this article?

https://www.thestar.com/news/queenspark/2018/02/08/pc-party-has-stopped-paying-the-rent-for-former-leader-patrick-browns-downtown-condo.html

What in the world was Patrick Brown thinking blowing $2.3 million on this mansion in the frozen hinterlands outside of Nowheresville Barrie. Jesus Christ. People have lost their minds in this country. I guess he was counting on that Premier’s salary… #MeToo Peoplekind had a different path for him.

I say let it all come tumbling down.

Anyways, wish me luck for the Lotto Max tonight boomers. I need a ticket out of this frozen, snowy sh*thole.

#11 Rocky point on 02.09.18 at 5:51 pm

Garth , is the tsx a bargain right now ?

#12 MF on 02.09.18 at 5:51 pm

Of course because yields are starting to rise (for real, this time…I think) in the US, we have to make sure we hold off rising our own in order to save the credit bubble.

It was predictable that the jobs report would be crap.

Watch CPD get pummeled again. Also predictable. Weather is crap today too.

MF

#13 Your Local Misaugenistic Police officer on 02.09.18 at 5:53 pm

DELETED

#14 Penny Henny on 02.09.18 at 5:59 pm

Those pesky millenials

“Since at least the January 2015, when the SNB de-pegging sent the Swiss franc soaring against the euro, costing some of the world’s largest currency dealers hundreds of millions of dollars in losses, Wall Street banks and the media have blamed the severity of the crash not on market factors endemic to markets, but on another less obvious variable: Millennials.”

I tried to cut and paste the article from Zero hedge but couldn’t. Sorry

#15 Niagara Region on 02.09.18 at 6:02 pm

Great photo of Cerebus, the three-headed dog that guards the gates to the underworld, Hades, in Greco-Roman mythology.

I’ve been lurking on this website for weeks; and, as a middle-aged professional who wants to buy her first home at some point, I’m grateful for Garth’s invaluable insights on real estate. The stats on Vancouver RE sales from a respondent are extremely helpful, as are the comments and article links offered by many other respondents. (Thank you, folks) I have sent links to this blog to many of my colleagues in the Niagara Region, mostly single career women who want to purchase homes or who already own homes and are monitoring their real estate investment. However, I do agree with comments over the past couple of days reporting that the consistent anti-women sentiment by a few of the posters–happily, not the majority of posters–makes the blog less-than-inviting for women readers. Otherwise, it’s a very informative blog.

#16 theoryAndPractice on 02.09.18 at 6:03 pm

It looks like party is over. They first priced it max profit they could get, (even they are capable of building $1M less priced…), then crickets in 2018 ?

That only tells the level of speculation in Real Estate in Canada, with major players Realtors(R), Builders(B), Canadians(C), Organizations with excellent math skills(O) and so on and so forth…

#17 tccontrarian on 02.09.18 at 6:10 pm

“So there you go. Higher wages and fewer people collecting them. Meanwhile the cost of money is swelling while houses on the Upper West Side get pushed down by a million.” -Garth
———————————————————–

Nothing to worry about. Corporations are still profitable and will continue to be – forever and ever.
Who will buy their ‘junk’ and how…well, that’s a question for another day.

Question for Garth (or anyone else):
at which point do we stop calling it a ‘correction’ and begin using that other term (‘b__r market’)?

bTW, as Dennis Gartmann has publically addressed the possibility that a deep correction/bear is on the horizon, I’ve reduced my shorts in expectation of a vigorous rebound next week or two.
He almost never fails to provide an accurate guide at key inflection points, in either direction.
Thanks Dennis!

TC

#18 Capt. Serious on 02.09.18 at 6:10 pm

I watched a bunch of clips from The Big Short on YouTube last night. Reminded me how bad things can get when everyone assumes that it’s impossible for people to default. Especially of note is that very few people even thought to short the AA and AAA tranches because nobody figured any of the garbage was in those tranches.
Going to be fun when folks start renewing over the next few years. Hang on to your hats kids.

#19 Smartalox on 02.09.18 at 6:11 pm

@ Note from YVR:

I work in an industrial park in West Richmond, and have seen 3 companies in the park either shut down, or relocate (offshore) in the past few months. Layoffs at the tech Co. that I work for, too. Another Co. in Burnaby winding down in June, probably about 100 tech jobs looking for work.

Small sample, possibly just co-incidence, really.

I’ve noticed that traffic on my commute is getting a lot lighter, too.

We’ll see what things look like after mid-month. The Lunar New Year may be transformative, if not instructive.

#20 Jungle on 02.09.18 at 6:14 pm

The tsx sure is a dog compared to us stock market
Some large caps dividend 5-6%
Bce
Enb
Pwf

But look at 2015 tsx went over sold and recovered on oil

#21 Colton on 02.09.18 at 6:15 pm

My bank just offered me 4.95% on a 5 year uncashable GIC. Maybe with the volatile markets under a rising rate environment it makes sense with part of my investable funds. It’s also better than perferred ETFs are paying.

There is no 5-year GIC paying 4.95% annually. – Garth

#22 Habbit on 02.09.18 at 6:16 pm

Hi Garth. Do you think the stress test and rising interest rates will impact pricing and sales in other parts of our great country? Places like the BC interior the prairie provinces and maritimes. Thanks eh

#23 Penny Henny on 02.09.18 at 6:19 pm

Meanwhile bitcoin keeps on hanging on. $8666 USD.
The number of the beast (with a 8 out front, lucky in Chinese)

#24 LOL on 02.09.18 at 6:19 pm

@ #258, 259 Stan Brooks: Nope, sorry. Please educate yourself.

Every now and then a rube will notice the word “socialist” in Nationalsozialistische and be fooled into believing the Nazis were somehow politically aligned with modern liberal parties.

Hitler renamed the party to fool people like you, Stan. He knew that some people are so gullible, all it takes is changing the name of your party and they’ll believe it. And it worked! You actually believe he was a left-wing liberal Nazi. Imagine: Adolph Hitler, social justice warrior snowflake!

In reality, the Gestapo rounded up Socialists, Communists and union leaders. He was not their friend. He killed them. And then my grandparents kicked his ass. Then you were born and Hitler fooled you from beyond the grave. How sad for you.

#25 Hans on 02.09.18 at 6:20 pm

One sector that has taken a quick beating are utilities and the like. Sure, interest rates are rising, but valuations in pipelines and utilities have been cut at the knees and many are paying close to 8% in tax advantaged dividends. I know you like rate reset preferreds for their mandate to match periodic changes in interest rates. How do you feel about beaten up dividend payers like enbridge, their income fund, ipl, ala, rnw, etc.?

#26 KLNR on 02.09.18 at 6:22 pm

@#9 MF on 02.09.18 at 5:44 pm
I know tons of people who work in the restaurant industry here in Ontario.

They all same the same thing: hours cut dramatically, prices rising.

We all know this minimum wage increase would be a disaster. Guess we have some proof now.

Make sure you all vote in June to get rid of the provincial Liberals as soon as we can.

MF
______________
hours cut = bad service
prices rising = less customers

You honestly think the shit show that is the conservative party will do any better? I hope so but won’t be surprised if its status quo lol

#27 Stan Brooks on 02.09.18 at 6:24 pm

This location is a piece of crap. Major Mac and Bathurst? 2.3 mil?
Really?

A friend of mine sold his 5000 sqft house close to Centre and Bathurst, further south, for 500 k in 2005 and moved to the states, to never come back, never looked back.

This is absolutely delusional price in a crazy city in a loonie country.

#28 unbalanced on 02.09.18 at 6:25 pm

In 2017 all we ever heard was that every month the economy is hiring. Hiring for Xmas season. January comes layoff time. Every year same thing.

#29 rates marching higher on 02.09.18 at 6:26 pm

Funny how Canadians think they’re insulated from a US Bond market that is determined to push rates higher.

Rates will go up in Canada. Shitty economy, good economy doesn’t matter.

Canada is not immune and our debt is competing with debt from other parts of the world. Doesn’t matter that our debt has a maple leaf on it. The attraction is in the yield.

#30 Stan Brooks on 02.09.18 at 6:26 pm

BTW in my humble opinion/by estimating the real economy and wages, these prices should be 5-6 time lower than the reduced price in the picture.

#31 AK on 02.09.18 at 6:28 pm

“But markets are signaling the wind has changed. No more are we in an era of cheap money, easy credit, low rates, zero inflation and central bankers throwing cash from helos.”
——————————————————————-
They are telling us that things are returning back to normal. Go figure.

#32 The Coming Storm on 02.09.18 at 6:28 pm

Employment falling; small businesses that are the backbone of the economy cutting back staff and hours worked; rising interest rates that will hamper business investment; falling house prices; broke-ass boomers hitting the wall; rising taxes; specuvestors getting creamed.

Fun times…

#33 Suede on 02.09.18 at 6:28 pm

Canadian economy is hot

Canadian economy is not

Canadian economy is hot…

So much back and forth, i need a beer and a patio to sort out what’s really happening.

#34 Ferry Up on 02.09.18 at 6:29 pm

We are pre rutting season on VI, but the masses keep growing. Line ups for the slow boat are endless. Nanaimo homes are up 3% in one month. Bring on the mainland lottery winnings. Preference given to foreign buyers that remain on the mainland and don’t contribute to congestion on VI. We love our remote Pacific Island and don’t mind if you are a non resident. Unfortunately we don’t take your shitcoin though.

#35 Re: tccontrarian on 02.09.18 at 6:31 pm

@ tccontrarian

See yesterday’s post #104 Huckleberry.

You seriously open to negotiating a $100k bet?

#36 Stan Brooks on 02.09.18 at 6:32 pm

Nobody has any interest in the TSX as well as in Canadian housing.

Enjoy the nice weather.

https://www.cp24.com/weather/steady-snowfall-falls-over-gta-impacting-commute-home-1.3796213

while in Spain/10 times cheaper:
(it was 12 Celsius today)

#37 Bobs Uruncle on 02.09.18 at 6:35 pm

Hey 213 FOOL,

If you’re 36, you were born on 1982 (or possibly 1981), which means: a) you’re not the young puppy you’re pretending to be; and b) this sure isn’t your first correction.

You’re welcome

#38 Stan Brooks on 02.09.18 at 6:37 pm

Good almighty, please keep this insanity going for few more years so I can liquidate all of my holdings there in tax efficient manner.

I don’t miss the weather.

Amen.

#39 Mattl on 02.09.18 at 6:37 pm

A RE crash will effect everyone. The idea that this huge gasbag could pop with no impact to renters and savers was always ridiculous. All those savers that were going to vulch when the time was just right may be in for a big surprise. Great, homes are 30 percent cheaper but credit is harder get get and deb costs twice as much to service. And that second income is gone, wife just lost her job. And your savings? Down 8-15% wherever this thing ends. 30 percent discount on RE may not look that great in a fiscal shit storm.

#40 paul on 02.09.18 at 6:39 pm

Part timer’s can Thank Wynne $14 hr. going to $15 minimum. Small sample, but I know three business owners that compressed work hours and laid off workers.

#41 aa5 on 02.09.18 at 6:39 pm

I’ve seen towns in the BC interior, where prices could fall by 75% and I still wouldn’t view the prices as a bargain.

Like old resource town with population falling consistently over the last 3 decades.. where average homes are asking – and getting $800k. A 75% drop would bring those houses to $200k.

Alberta seems more stable. Like big and growing city with high income jobs(Calgary) where you can buy a house for $450-$550k. They might see some fall off but then again the city may keep growing rapidly and that has upwards pressure on prices.

#42 TEMPLE on 02.09.18 at 6:40 pm

Also of note: the average number of hours worked last month declined, yet wages surged by 3.3% – the biggest advance in years. Why? “The employment drop coincided with an increase in the minimum wage in Canada’s largest province – Ontario,” noted Bloomberg. “That fueled an acceleration of the national wage rate.”

So there you go. Higher wages and fewer people collecting them. Meanwhile the cost of money is swelling while houses on the Upper West Side get pushed down by a million.

I see what you are implying here, but it’s a weak correlation and doesn’t actually fit your ideology. Average weekly hours have been declining across Canada for at least five years (http://www.statcan.gc.ca/tables-tableaux/sum-som/l01/cst01/labr82-eng.htm) and probably longer. I know you want to attribute a massive reversal of trickle down to the raising minimum wage from pathetic to merely oppressive in Ontario, but you can’t. Your opinion doesn’t fit the facts.

#43 FOUR FINGERS WATSON on 02.09.18 at 6:42 pm

Seems like just yesterday we were told that Canada had the most “ robust “ economy of the G7. If that is the case the other 6 must be really hurtin’ eh ? Or maybe the numbers are just misleading.

#44 For those about to flop... on 02.09.18 at 6:52 pm

January 2018 Sales Report/Realtor Assistance Needed.

These are the sales that have dripped through my Pink Snow Folder for the month of January.

As you can see I have already had some assistance ,but would like to put a few more pieces of the puzzle in place.

If you have access to the Mls then please assist.

Thanks in advance,Flopper…

M43BC

Sophia Paid 1.47

https://www.zolo.ca/vancouver-real-estate/5748-sophia-street

Farmer Paid 1.21 Sold 1.21

https://www.zolo.ca/abbotsford-real-estate/34288-farmer-road

Jaskow Paid 1.9 Sold 1.58

https://www.zolo.ca/richmond-real-estate/5691-jaskow-drive

Woodhead Paid 1.31

https://www.zolo.ca/richmond-real-estate/4231-woodhead-road

79thave, Paid 845k

https://www.zolo.ca/delta-real-estate/11288-79-avenue

Chamberlayne Paid 1.02 Sold 1.08

https://www.zolo.ca/delta-real-estate/5295-chamberlayne-avenue

Coventry Paid 2.83

https://www.zolo.ca/richmond-real-estate/4260-coventry-drive

Sunland Paid 1.3

https://www.zolo.ca/burnaby-real-estate/4582-sunland-place

Pintail Paid 1.62.not sure if sold yet as not cleared.

https://www.zolo.ca/richmond-real-estate/11580-pintail-drive

72nd ave,Paid 560this cheaper option in Surrey actually sold in late December but I will put it up in the hope it helps someone.

Was in Possible Pinkies Folder but most likely made money.

https://www.zolo.ca/surrey-real-estate/14948-72-avenue

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

Feel free to make a donation.

Flop For Fox Fund…

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

#45 Fish on 02.09.18 at 6:55 pm

@ #8 Mike in Edm on 02.09.18 at 5:42 pm
Are real estate agents considered employees, or are they considered self-employed? If the latter, they wouldn’t be counted in this latest dismal job reports, would they?

********
Once talked to a pictular realestate guy that comes to mind and when he smiled you could see his front gold tooth

#46 I’m stupid on 02.09.18 at 7:04 pm

But houses and bitcoin only go up. This makes no sense to me, I must have missed something in my grade 2 finance class. How could all those PhD economists be correct?

#47 Karma on 02.09.18 at 7:06 pm

Lol, where are we now?

http://theirrelevantinvestor.com/2018/02/09/35-steps-to-a-market-bottom/

#48 theoryAndPractice on 02.09.18 at 7:07 pm

#10 Screwed Canadian Millenial on 02.09.18 at 5:44 pm
“….Anyways, wish me luck for the Lotto Max tonight …..”
—————————————-

Check that out :

http://lottery.olg.ca/en-ca/help/about-lotteries-tickets-and-lotto-games/hit-or-miss

It can tell some hints about how the lottery games are controlled…

In short, sorry it is not only odds to win, but also you need to pass the algorithm as well.

#49 Spaccone on 02.09.18 at 7:08 pm

Garth , is the tsx a bargain right now ?

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

The TSX could be like preferreds two years ago, when they were getting slammed on our wild west markets day after day, week after week, month after month, and everyone was whining on here daily.

#50 Trawna on 02.09.18 at 7:10 pm

If we are neck deep in a giant recession come Federal election time, and there is zero room for fiscal stimulus, the electorate might finally call in someone competent to begin to clean up the mess.

Wait, what am I saying? The budget will balance itself.

#51 Bezengy on 02.09.18 at 7:11 pm

What’s with the gag order on Morneau? Considering the ship is sinking, it would be nice to know if there are enough lifeboats for everyone.

#52 TheSecretCode on 02.09.18 at 7:12 pm

This is what is happening in BC:

NDP has built the mother of all hammers – but will they drop it Feb.20?

The cleanup of BC by P. German will rattle RE to the core.

The stress test? Not so much – credit union business going straight up.

You can still get locked 5+year rates for under 4% without a stress test.

A lot of homes in the interior are coming back on the market as “re-listed” without any mention of the prices drops….price drops? Seeing 50k drops on a lot of SFD’s in Kelowna. Outside Kelowna…seeing price drops as well.

In Vancovuver/Richmond? business as usual…areas just outside having SFD’s listing around 1.1M…Langley included.

Condos 2bdrm…that sold for 275k in 2004 listing at 975Kish in Richmond…that is just over 50K in gains every single year since 2004…what ever happened to building depreciation?

The condo market in the lower mainland is still being attacked by first time buyers dealing with credit unions and speculators knowing very well that this is the last affordable product to seize and bid up for first timers…

Foreign money in Canada has seriously disappeared…check out West Vancouver. Crickets.

I guess we will see…do you like buying bitcoin at 20K…same as buying a house right now…all time high…

…as we enter the bear market.

#53 under the radar on 02.09.18 at 7:13 pm

The builder mentioned has enormous resources. Watch them offer 0 percent first mortgages for 3 or 5 years to spur sales at their various sales sites .

#54 sleepingdragon on 02.09.18 at 7:13 pm

All bubbles come to an end. It is only a question of how fast the air comes out. The Canadian housing market has a slow leak.Commercial real estate will have more of a hissing sound. While others just go boom and its gone.

#55 Josh on 02.09.18 at 7:14 pm

Seen this movie, wake me up when the tsx is at 12,000 and dow at pre-trump metrics. Starting to take positions on non-reg tsx names yielding over 4.25% and loving it.

GLTA

#56 Damifino on 02.09.18 at 7:21 pm

#1 Note from YVR

Can you tell us what is happening in beautiful British Columbia. We know GTA is pooched.
———————————-

Sure. We’re still utterly delusional.

#57 common sense on 02.09.18 at 7:25 pm

This is Rand Paul, the ONLY politician to stand up and say the recently passed US budget was horrible for everyone…

Did he say “The US Gov’t BORROWS close to 2 MILLION dollars a MINUTE to operate?????”

https://www.youtube.com/watch?v=lcCXfRTu9oI

#58 Stock Picking White Belt on 02.09.18 at 7:25 pm

#140 tccontrarian on 02.08.18 at 11:20 pm

…I sold my house in 2015 because it was overvalued and I invested the proceeds as I saw fit – now I’m 300% ‘richer’ than 2015. And I expect to be 200-300% richer than now in 2020, betting on my long/short strategies.

——-

Curious to hear how you were able to snag such amazing returns. A good percentage of my portfolio is in shopify and dollarama, and I thought I crushed it over the last few years, but nothing quite like what you able to achieve. I’d appreciate hearing some specifics in your strategy as I am always looking to learn when it comes to investing. Cheers.

#59 Andrew Woburn on 02.09.18 at 7:30 pm

“The U.S. Internal Revenue Service, fresh off its success in uncovering U.S. assets hidden in Swiss banks, has assigned elite criminal agents to investigate whether Bitcoin and other cryptocurrencies are being used to cheat the taxman.

A new team of 10 investigators is focusing on international crimes. In addition to following undeclared assets that are flowing out of Swiss banks after a crackdown, it will also build cases against tax evaders who use cryptocurrency. The promise of anonymity that has drawn money launderers and drug dealers to virtual coins is also attracting tax cheats, the IRS has said.”

https://www.bloomberg.com/news/articles/2018-02-08/irs-cops-scouring-crypto-accounts-to-build-tax-evasion-cases

#60 crowdedelevatorfartz on 02.09.18 at 7:32 pm

@#11 SCM
“wish me luck for the Lotto Max tonight boomers. I need a ticket out of this frozen, snowy sh*thole.”

++++++
Sorry Bubba.
I have the winning ticket.

#61 Andrew Woburn on 02.09.18 at 7:34 pm

A new blog dog recruit? Even Bandit will be impressed.

– Meet B.C.’s snow-shovelling, beer-fetching, vacuuming dog

http://www.cbc.ca/news/canada/british-columbia/morgan-dog-snow-shovel-tricks-1.4525221

#62 crowdedelevatorfartz on 02.09.18 at 7:38 pm

@#15 Niagara region
“Otherwise, it’s a very informative blog.”
+++++++

True.
The info is the main reason for coming here.

The comments can be a bit over the top…..scroll scroll……..scroll past them.

Unfortunately, for me.
Some of the posters are an itch I have to scratch…….

#63 common sense on 02.09.18 at 7:47 pm

Friend who owns a busy restaurant laid off his 4 servers just before Xmas as a F U to Wynne…

Wonder how long before he drops dead being 67, his slave aka underpaid over worked partner is 70 and his wife with a bad leg is 60 doing all the work for 7…and I mean everything for a 80 seat restaurant.

Guess the savings is worth it!

#64 homeless in bc on 02.09.18 at 7:50 pm

Royal bank closes Jodi Emery account because she has criminal record for cannabis conviction! Really!? For all you peeps that think this has nothing to do with you, better think again. What’s next? Can’t get a mortgage because you smoked a joint? Maybe you will just have to pay a higher rate. That o.k with you? It is not like she was convicted of major fraud and ripped off hundreds of people. Conrad Black. When it comes to the Royal banks execs who initiated this and support it, I cannot express how despicable I think they are.

#65 Tim on 02.09.18 at 7:52 pm

RE” Alberta seems more stable. Like big and growing city with high income jobs(Calgary) where you can buy a house for $450-$550k. They might see some fall off but then again the city may keep growing rapidly and that has upwards pressure on prices.”

—–
Yah, but then you have to live there

#66 Cottingham a bargain on 02.09.18 at 7:53 pm

i Know the area and project well enough to know that those list prices were never so.

I also find it hard to believe that you are that gullible Garth.

Not one of those homes or models have ever been sold above 3 million.

So it was merely fraud? I feel so much better. – Garth

#67 -=jwk=- on 02.09.18 at 7:53 pm

lost 88,000 Part time jobs. Gained 49000 FULL TIME jobs. Seems like a decent swap as a whole….

We lost 137,000 part-time jobs. You know, the kind that earn $15 minimum wage. – Garth

#68 dosouth on 02.09.18 at 7:53 pm

What happened to the great prognostications for December and November job numbers. Amazing how 88k of jobs disappear and this is just a minor mention in today’s post yet 79k in jobs took a lot more space in your Dec 1st post?

These are the worst numbers in 9 years……and like the cost of living index that gets manipulated by removing things like fuel etc …. numbers mean nothing. Economics 101….make them up and them will quote them.

#69 Linda on 02.09.18 at 7:54 pm

Job losses last month. I wonder if that had anything to do with post Christmas work force reductions? Or do retailers not hire extra staff for the holiday season on a temporary basis any longer? Ditto other service industries – holidays with events are over, so is the need for additional staff.

As for the million dollar price drop, ouch for those who bought prior to the price drop.

#70 Canadian Moose on 02.09.18 at 7:58 pm

#10 SCM.

I hate to agree with SCM but I smell rat on today’s job numbers. Economists across this country are asked about there thoughts on January numbers and the revelation we lost 88g of jobs is so contradictory to their analysis it doesn’t pass the smell test. Something doesn’t add up. Back to school for this lot or numbers are being manipulated.

Thoughts from the Hinterland enjoying a glass of red.

#71 chopstix on 02.09.18 at 8:06 pm

Garth, I have to ask you, please:
i know you joke about ‘comrade horgan’ and the upcoming BC budget prob containing anti spec taxes (etc) and other measures to help temper the RE craziness (just look at how condo prices are still going bonkers)
http://www.macleans.ca/news/canada/the-battle-to-clean-up-b-c/
However, if YOU were the BC premiere then what measures would you enact to try to quell the craziness that is happening around crazy house prices etc? I know you don’t feel the foreign element is significant, but you have noted how specers (and moisters and cheap money) are the primary drivers…i’m sure others would also enjoy hearing what Prem Turner would do…thanks.

#72 Reality is stark on 02.09.18 at 8:09 pm

No one talking about real estate at parties any longer. Now it’s all about impending divorces because she is no longer happy. Does anyone notice the correlation? Someone took away the HELOC punch bowl.
Financial mistakes are yours and yours alone. That is why a house purchase is your decision only not a joint decision.

#73 Chico on 02.09.18 at 8:11 pm

DELETED

#74 arfmoocat on 02.09.18 at 8:11 pm

Canada Loses 88,000 Jobs In January, Worst One-Month Loss In 9 Years

https://www.spencerfernando.com/2018/02/09/job-loss-canada-loses-88000-jobs-lost-january-worst-one-month-loss-9-years/

#75 Nat on 02.09.18 at 8:12 pm

NEVER buy a Conservatory Home! Worst builder in Toronto! I owned a Conservatory home in the Upper Bea has area of Toronto. Here are the list of screw-ups by the builder:
-they never sealed the kitchen tiles
-they did not use waterproof drywall in the master bathroom
-they didn’t properly ventilate the powder room and so no heat ever got to it
-other people in the neighborhood had problems with leaks from their roof.

Just be careful-these guys take the shortcut! I can’t believe they have products selling for over a million.

#76 LivinLarge on 02.09.18 at 8:13 pm

“My bank just offered me 4.95% on a 5 year uncashable GIC.’….their just playing with their syntax. That’s either you mis typing or this is 4.95% cumulative after 5 years. BNS had signs like this in their branches a couple of years ago. Read the small print. Hell at less than 1% per year you’re getting hosed royally. “Looks good…tastes bad”

#77 RudyGQ on 02.09.18 at 8:17 pm

I am compelled to ask how professional builders have the financial sense to lower their assets by 30% or more, while amateur retail resellers reduce their listing price by 9%. This is a singular reason why the rich get richer and the middle class stay middle class….Financial literacy.

I am confounded as to what on Gods green earth is at Bathurst and Major Mack that would compel someone to pay such enormous prices to live there. It must be the wonderful view of Toronto off in the far distance.

#78 arfmoocat on 02.09.18 at 8:17 pm

#63 arfmoocat

Now, with this report coming in with such terrible numbers, and growing concern about weak economic growth, our weakening stock market, gigantic household debt (the worst in the world), and our deteriorating competitive position, it’s becoming clear that the big-government, high-tax policies of Justin Trudeau are putting our national economy in a dangerously precarious situation.

#79 Who cares on 02.09.18 at 8:24 pm

A question to all dogs on this blog…

What online platform do you use for trading – I’m looking to hold usd in my rrsp and the bank that thinks I’m rich wont allow me… Just looking for some opinions on what you use and why. I may end up moving all my accounts.

#80 serfer dude on 02.09.18 at 8:28 pm

Thanks Jeremy Rudin, we didn’t really want those jobs or houses anyway.

#81 april on 02.09.18 at 8:31 pm

$56 – How does anyone really know what’s going on in Van RE. Garth hasn’t made much reference to what’s happening for some time. Ross Kay says Vancouver is now into a correction. He mostly mentions houses so don’t know if he’s including all categories in his comments.

#82 Mark on 02.09.18 at 8:32 pm

#21 Colton
————
Are you sure you’re not mistakingly referring to a 5 year escaltor rate? The posted 5th year is 4.25% (Blue Shore Credit Union). Good customers might be able to get more. However, the first year is about 2.25% and the 3 years inbetween are rates. So, the rates would average out at about 3+% for the 5 years.

Not bad, but they’ll be a lot better atbthe end of the year!

#83 Smoking Man on 02.09.18 at 8:39 pm

#15 Niagara Region on 02.09.18 at 6:02 pm
Great photo of Cerebus, the three-headed dog that guards the gates to the underworld, Hades, in Greco-Roman mythology.

I’ve been lurking on this website for weeks; and, as a middle-aged professional who wants to buy her first home at some point, I’m grateful for Garth’s invaluable insights on real estate. The stats on Vancouver RE sales from a respondent are extremely helpful, as are the comments and article links offered by many other respondents. (Thank you, folks) I have sent links to this blog to many of my colleagues in the Niagara Region, mostly single career women who want to purchase homes or who already own homes and are monitoring their real estate investment. However, I do agree with comments over the past couple of days reporting that the consistent anti-women sentiment by a few of the posters–happily, not the majority of posters–makes the blog less-than-inviting for women readers. Otherwise, it’s a very informative blog.
…..

Suck it up. And learn something from a fellow wopeoplekind.

SCM comes our here everyday with the gloves on wanting to punch boomers. We punch her back. It’s all in good fun.

Stop being a frightened chick, come out swinging.
Welcome to the comments section.

#84 MagicNumber on 02.09.18 at 8:41 pm

You know we’re in deep trouble when people start talking about buying a 550k house in Calgary as a ticket out of the insanety. You guys know the average (2500 ft2) house in the states costs 250k right? Not only that, you can write off the interest, make about 50% more, and may about 20% less tax. Calgary can grow forever in any direction, there is absolutely nothing that can justify that price premium except that people are retarded.

#85 Ronaldo on 02.09.18 at 8:45 pm

Best GIC rates:

https://www.ratesupermarket.ca/gic_rates/results?location=&province_id=5&lat=43.6404&lng=-79.3995&level=&display_locale=&term=05-00-000&investment=1000&interest_compounded=&tax_status=registered&cashable=no

#86 Russ on 02.09.18 at 8:47 pm

homeless in bc on 02.09.18 at 7:50 pm

Royal bank closes Jodi Emery account because she has criminal record for cannabis conviction! Really!? For all you peeps that think this has nothing to do with you, better think again. What’s next? Can’t get a mortgage because you smoked a joint? Maybe you will just have to pay a higher rate. That o.k with you? …
===============================

If criminals can’t be a Royal Bank customer it might be time to get out of their preferred shares.
That will be a huge loss of customer base.
Damn.
My exposure is in the ETF, so I can’t do anything about that.

Oh well.
Maybe Jodi can go full crypto. Tell her we don’t need no stinkin’ banks anymore.

#87 dr. talc on 02.09.18 at 8:50 pm

#70 Canadian Moose on 02.09.18 at 7:58 pm
#10 SCM.

I hate to agree with SCM but I smell rat on today’s job numbers. Economists across this country are asked about there thoughts on January numbers and the revelation we lost 88g of jobs is so contradictory to their analysis it doesn’t pass the smell test. Something doesn’t add up. Back to school for this lot or numbers are being manipulated.

Thoughts from the Hinterland enjoying a glass of red.

Agree 100%
they just make it up

#88 akashic record on 02.09.18 at 9:10 pm

If criminals can’t be a Royal Bank customer it might be time to get out of their preferred shares.
That will be a huge loss of customer base.
Damn.
My exposure is in the ETF, so I can’t do anything about that.

Oh well.
Maybe Jodi can go full crypto. Tell her we don’t need no stinkin’ banks anymore.

RBC is just offering investor seminar about Bitcoin and cryptos.

#89 Marcia Zhang on 02.09.18 at 9:13 pm

DELETED

#90 45north on 02.09.18 at 9:17 pm

Just be thankful you didn’t buy a palace in the Upper West Side

An upscale GTA development has just slashed its asking prices – by $1 million.

a million if you round down but look at the square feet! They’re yuge!

The recent stock market gyrations are telling us something. But markets are signaling the wind has changed.

Debtslavecreator is telling us something: The dumb luck this country has had for years is coming to an end

#91 ANON on 02.09.18 at 9:26 pm

The national jobless rate increased

This does not look very inflationary from the peanut gallery.

#92 WIN not lose on 02.09.18 at 9:37 pm

Interesting article in the Financial Post about how Trudeau will be confiscating our money by changing the upcoming tax rules
http://bit.ly/2EgzhfF

For all the Liberals,
Why Justin Trudeau is far more dangerous than Donal Trump!
http://bit.ly/2G1PgdW

#93 I thinks I know something on 02.09.18 at 9:41 pm

If this carnage continues, the CB’s around the world will just go ZIRP again. Simple. Don’t worry. Really. No biggy.

Not happening. – Garth

#94 conan on 02.09.18 at 9:42 pm

#69 Linda on 02.09.18 at 7:54 pm

I agree with you. The majority of these jobs, were X mas jobs, that routinely disappear in January.

Santa actors, to Zither players, all get the chop. They somehow survive through winter.

https://www.youtube.com/watch?v=62Y7BXIuX6Y

#95 kommykim on 02.09.18 at 9:46 pm

Hey, saw this on FB. Looks like BC Realtors are in an all out panic:

https://www.change.org/p/bc-gov-needs-to-slow-or-stop-the-real-estate-changes-meant-to-start-june-15-2018

#96 young & foolish on 02.09.18 at 9:50 pm

“Garth , is the tsx a bargain right now ?”

Had to smile at that one …. TSX has been going nowhere for years. I own XIU for the dividend play (and tax credit). Yawn.

#97 Damifino on 02.09.18 at 9:50 pm

#71 chopstix

However, if YOU were the BC premiere then what measures would you enact to try to quell the craziness that is happening around crazy house prices etc?
————————————

Maybe John Horgan could start by cancelling this…

https://www.bchousing.org/housing-assistance/bc-home-partnership

#98 @Huckleberry on 02.09.18 at 10:08 pm

I said that “I know someone” who probably would take such a bet. I haven’t verified it with him but if you have a serious interest, I’ll pursue it and get back to you…somehow. He’s not the ‘cowboy’ type, but who knows?

It’s not only a matter of the level of conviction about the forecast – it also has to do with whether one wants the associated publicity. Sometimes, even when you ‘win’ (money), you don’t actually win, overall.

Personally, I’m quite confident (>90% chance) that Dow 12,000 will be breached over the next 24-36 months. I’m in fact betting with my own funds (short positions) and that’s basically ‘enough’ for me.
For bragging rights I’d ‘bet’ $1,000 or so, but $100k is kinda out of my league (it could be different this time – just this once!)

TCC

House rules: no gaming. – Garth

#99 Entrepreneur on 02.09.18 at 10:34 pm

We do not have a leader here in Canada. Next time you vote, vote for someone who knows about small business and working people.

The Saskatchewan farmer, Stanley, should have been charged with manslaughter since he did kill someone. The law is the law.

News reported an oil tanker collided with a cargo ship off of Japan about a month ago. The news media has in-depth coverage with other issues but not a mention about that oil tanker. So, so quite. BTW, the oil is burning (how did it start?) with massive highly toxic smoke, google it. And Japan is worried of the ocean’s ecosystem.

So hush, hush, on the realities of the oil tankers on the ocean ecosystem.

As for the rules and regulations of the environment by the M. of E. with consultation means: We have consulted but now we will do it our way. Just look at Site C dam and how the consultations with the First Nations were mistreated, ignored.

So I would suggest that the First Nations write up their Environmental Laws and Rules and boycott consultations. Stand their grounds as they are being rudely ignored for too long.

TGF

#100 Cindy on 02.09.18 at 10:41 pm

I used to date a realtor in Calgary, and he recently had to turn his house into an Airbnb because he hasn’t sold anything resembling a house in over two years.

And the Airbnb business sounds tough. Some people want clean towels like, every single day.

My realtor ex also decided last year it would be a good idea to renovate his basement, which cost more than he thought it would. So now he’s not selling houses and he’s tapped out. He’s 40 years old and spends most of the time in the dark with the curtains drawn, playing video games. It’s probably good I got away when I did.

Then there’s this guy….

My buddy, a 39-year old homeowner in Calgary, is moving to Toronto in a few days for a new job. He’s going to list his place in cowtown, and hope for the best

For weeks now, I’ve been trying desperately to convince him not to buy a place in the GTA anytime in the near future. I told him read up on this stuff, gave him the whole knowledge is power spiel, and sent him compelling links from Garth’s blog so that all he’d have to do was tap and read. He didn’t open any of them. I think he went to play basketball instead.

I’ve been quoting him stats about falling prices and rising listings. I school him on B20 and the potential ramifications. We argue about whether interest rates will go up. I go on and on about speculators fueling the GTA market (he was convinced it was all foreign buyers) and about the astronomically high levels of debt Canadians have strapped to their backs.

I try to persuade him his life will be so much simpler as a renter. Very little maintenance when you’re renting. I argue he’ll have more money because as a renter, he won’t have all the hidden costs of homeownership. He tells me he had the inspector out at his house the other night and needs a new roof, and a new seal for his shower. I say, if you were renting, you woudn’t have to worry about that! I was starting to feel like I was hitting my head against a brick wall, but I didn’t give up.

Today I heard the news. He finally decided to hold off buying, and he got a 6-month rental. A condo, downtown. He’s going to see how this all plays out before rushing into buying.

Whew. This feels like a win.

#101 Doug t on 02.09.18 at 10:45 pm

Triple pooched is right – this is all the tip of the iceberg- things have been too hot for too long and the bandaid of the last 10 years is getting ripped off – popcorn anyone ?

RATM

#102 Nick B on 02.09.18 at 10:52 pm

Your views on real estate are quite accurate but your views on the stock market just don’t resonate with me. If a large real estate correction does occur, it’s a slam dunk that we will have a recession. Typically recessions are associated with a 30-50% draw down in equity prices. We are long overdue for a recession and the recent decline in equity prices is barely noticeable on a chart of equities over the last 8 years. I’m not convinced that the low in rates has been reached, I think CB’s will respond to any real equity declines with further QE and lower interest rates. I’m positioned to do well either way. It will be fun to watch.

No recession on the horizon. We had a near-depression eight years ago. Changed much. – Garth

#103 aa3 on 02.09.18 at 10:57 pm

I think in BC the NDP(or whatever government is in power), will take the path of least resistance of just running larger deficits.

Alberta, BC & the Federal government all have relatively healthy balance sheets with room to run deficits for years before it becomes a problem.

Quebec and Ontario I don’t think the creditors will let them run large budget deficits. (the creditors will simply demand much higher rates for the debt that is being rolled over).

Therefore I think Quebec and Ontario will have to tough it out with austerity. And in fairness to Quebec they are already there, and house prices falling are not a big issue for Quebec, where they never ran up much.

#104 FOUR FINGERS WATSON on 02.09.18 at 11:13 pm

#99 Entrepreneur on 02.09.18 at 10:34 pm
We do not have a leader here in Canada. Next time you vote, vote for someone who knows about small business and working people.
…………………………………

You should walk a mile in his shoes before u criticize him.

https://www.google.com.ph/search?dcr=0&source=hp&ei=40p-WqO8KsravgSq7aG4AQ&q=Clown+shoes+pic&oq=Clown+shoes+pic&gs_l=mobile-gws-hp.12..0l2.1722.6311.0.7229.16.15.0.1.1.0.59.540.15.15.0….0…1.1.64.mobile-gws-hp..0.15.539.0..0i131k1j0i3k1j0i22i30k1.0.EHR4eHI815U#imgrc=dU-5cx7VZAi34M:

#105 Probably not what you think on 02.09.18 at 11:30 pm

#21 Colton

That rate seems too high.

Make sure the bank isn’t paying you 4.95% *once* after the full 5 years, instead of 4.95% each year.

#106 Long-Time Lurker on 02.09.18 at 11:47 pm

#17 tccontrarian on 02.09.18 at 6:10 pm

Question for Garth (or anyone else): at which point do we stop calling it a ‘correction’ and begin using that other term (‘b__r market’)?

>If I remember correctly:

~5% drop: pull-back. 10% drop: correction. 20% drop : bear market. Wall Street terms.

>Lots of people knew the price/earning ratios were at all time highs so they knew a correction was coming. It was just a matter of when which was the big mystery.

I’m guessing the market VOLATILITY will start dropping AFTER next week. Drops: People are running from their shadows and selling. Some for smart reasons like not wanting to be left holding the bag. Rises: Other people are buying the dips (duh).

After next week my guess is the spooked out people will stop panicking and stop selling then there’ll be stabilization of the market.

That interest rates were going to rise and quantitative tightening (liquidity removal) has been a long time coming so why the shock now?

I think the real kicker is that a lot of people bought overpriced stocks without thinking because they thought the stock market was going to keep going up indefinitely. Now they realize that it can go down and are panicking.

One other thing. I think Kim Jong-Un’s hourglass is running out of sand.

#107 Where's The Money Guido? on 02.09.18 at 11:49 pm

Re: #85 Ronaldo on 02.09.18 at 8:45 pm
Best GIC rates:

https://www.ratesupermarket.ca/gic_rates/results?location=&province_id=5&lat=43.6404&lng=-79.3995&level=&display_locale=&term=05-00-000&investment=1000&interest_compounded=&tax_status=registered&cashable=no

++++++++++++++++++++++++++++++++++++++++++++
Coast Capital in BC has a one year non-redeemable for 2.3% that is not shown at ratesupermarket

#108 Dolce Vita on 02.10.18 at 12:04 am

On the Jan. 2018 Labour Force Survey -88,000 number:

1 data point does not make a trend.

Wait until April 6th when the March numbers are in. Then we have 3 data points. Still and even then, weather will be held to account if the job numbers continue to be -‘ve.

Agree continuing rate increases. TV economist interviewee’s this week falling overthemselves ignoring job numbers and touting wage increases for those with jobs…fodder for BoC continuing to raise rates.

Rising rates will to do in the FIRE GDP Sector with the monumental Household Credit Cdns. have racked up. Then prices will drop, even in YVR.

With current rates, it’s still “extend and pretend”.

#109 re., TTC on 02.10.18 at 12:04 am

I said that “I know someone” who probably would take such a bet. I haven’t verified it with him but if you have a serious interest, I’ll pursue it and get back to you…somehow. He’s not the ‘cowboy’ type, but who knows?

It’s not only a matter of the level of conviction about the forecast – it also has to do with whether one wants the associated publicity. Sometimes, even when you ‘win’ (money), you don’t actually win, overall.

Personally, I’m quite confident (>90% chance) that Dow 12,000 will be breached over the next 24-36 months. I’m in fact betting with my own funds (short positions) and that’s basically ‘enough’ for me.
For bragging rights I’d ‘bet’ $1,000 or so, but $100k is kinda out of my league (it could be different this time – just this once!)

TCC

…………

LOL

we went from $100,000 offer to now a $1,000 offer for ‘bragging right’

CLOWN ALERT

#110 Lesser Ape on 02.10.18 at 12:37 am

> House rules: no gaming. – Garth

Darn. I literally just had a 10 minute conversation with my wife about whether I could take that bet, and she said I could, provided Garth was willing to do the escrow on the $200,000.

(For people wondering why anyone would do this, with fairly simple hedging, it’s impossible to lose on the “will not go below 12,000” side of the bet unless options markets close permanently. So it’s an investment that has annual returns in the high teens if Trump doesn’t start a nuclear war.)

#111 maya on 02.10.18 at 1:02 am

#201 IHCTD9 on 02.09.18 at 10:13 am
#161 maya on 02.09.18 at 2:26 am
I get everything you say Garth. We have saved 175000 in four plus years by renting only. But now the rent in surrey area is so expensive, I wont be able to save. Dont know what to cut from already frugal lifestyle. I live frugally, but do not compramise in food and fun things. I dont buy lots of stuff and try to be a minimalist.
But i am losing it now. Two bedroom decent apartment is 1800 now. Who makes and pays that kind of money in Surrey. You are lucky if you have $20 an hour paying job.

I am losing hope. If I cant save in rent, where else I can cut it. If you have to cut small things in life, what is the point iof living and working. I dont know.
You might say move further away. but the commute increases and we might need two cars. The housing situation is killing us. I hope it seriously crashes.
______

Move to where it makes sense to live costs/income. If not look into living in a Van, tiny house, or RV. Don’t blow that 175K, you’ll never forgive yourself.

Think about moving every day until you get used to the idea. Either that, or start thinking about an alternative lifestyle.

I don’t care how nice the scenery is, if your area has you eating dirt for sustenance with no savings and no prospects – it is time to leave.

Time for a new job, new city, new life.

#201 IHCTD9 on 02.09.18 at 10:13 am

Hi IHCTD9:
Thanks for you suggestion. We are thinking of moving, but when kids are involved it’s hard. Good school is a big factor and my older child dont want to leave her school where she is happy. Plus, we have our community here. It is not like you are single and can live in a tent. Otherwise I will just live in an RV. Things get comlicated when children are involved. Please dont tell me I should not have had children.
What amazes me is who is paying such a rate for renting? Seriously. All the people who have money for downpayment and have good credit have already bought into this market. I am the only one in my communtiy who rents and I get laughted at all the time. They dont know our savings. Jokes on them. But now I am really concerned. I am questining may be I made a mistake not buying few years ago. You know so many arguments going into my head. I am still for renting if I find a decent one with decent price.
We will see.

#112 Slocan Sam on 02.10.18 at 1:32 am

Mattl- Re 30% discount on RE
I bought a CMHC repo in small town BC in 1986 for $12k. It had 60k+ owing on it when they walked. I bought a new pickup that year as well. $12,500 (GMAC 9.9% 4 years) That house sold recently for $299k. Now new pickup is 60….Coincidence?
If history repeats- Same house $60k? Would I buy it again for 60? Hell no- I’ll be looking for better quality and better neighborhood- for 90 or 100. And I’ll take 3 or 4.

#113 Calgary vs. US on 02.10.18 at 1:52 am

RE #84 MagicNumber on 02.09.18 at 8:41 pm
You know we’re in deep trouble when people start talking about buying a 550k house in Calgary as a ticket out of the insanety. You guys know the average (2500 ft2) house in the states costs 250k right? Not only that, you can write off the interest, make about 50% more, and may about 20% less tax. Calgary can grow forever in any direction, there is absolutely nothing that can justify that price premium except that people are retarded.

********************
Sorry, but you are comparing apples with oranges. First, Calgary has many decent public schools across all levels. To live near quality public schools, CAD0.5M will get you a modest detached home, which will offer more than enough comfort & space for most families. You can also go the duplex route and pay from 0.35M upwards. If you want to go a bit more upscale, there are many quality options valued below CAD1M. In many US cities, the 1M price tag is often the starting point if you want decent schooling options for your kids and avoid deep suburbs with crazy commuting. US upscale housing options get stratospherically expensive very quickly.

Second, traffic in Calgary between areas with good schools & good houses and the downtown core is non-existent compared to most US cities.

Third, despite the recent spike in crime in Calgary, it is still incomparably lower when compared to the crime situation in most US cities.

Conclusion: to each his own, but let’s not idolize living in the US as a magic cure for all Canadian issues. Let’s actually acknowledge that life in Calgary, especially for families seeking quality family oriented hoods with quality public schools, remains surprisingly affordable.

Have prices in Calgary been surprisingly sticky since 2014? You bet, although not uniformly. Will Calgarian RE valuations keep on decreasing? Probably for some time. Can a normal working class / professional Canadian family have a quality life in Calgary which includes a decent detached home without the need to time the market waiting for a correction? Absolutely.

Oh, I forgot; in Calgary you can also rent a very decent abode in excellent hoods for not much money. Isn’t it great to have such a choice, which is sadly quite unique within the larger Canadian context?

#114 Mark on 02.10.18 at 2:18 am

“Typically recessions are associated with a 30-50% draw down in equity prices.”

That is perhaps ordinarily the case, but given that the TSX hasn’t gone anywhere for so long, especially not since the 2013 apex of Canadian housing prices and the ensuing weak economy that has followed, perhaps such is already baked into the cake?

That’s cold comfort to those watching the TSX melt down in sympathy with the US stock market these days, but the historic inverse correlation between the TSE/TSX and the Canadian housing market is fairly significant. Canada’s banks are positioned to benefit substantially through spread expansion. And a significant number of TSX-listed Canadian large-cap firms are trading for implied valuations beneath the reasonable long-term replacement cost of their assets, particularly in the oil and gas, mining, telecom, and even railway sectors.

#115 Smoking Man on 02.10.18 at 2:52 am

When SCM finaly figures out I’m really from the planet Nictonite.

She will be singing this song.

https://youtu.be/0-EF60neguk

#116 Leo Trollstoy on 02.10.18 at 3:43 am

Minimum wage increases…

Poor workers culled…

Overall wage increase…

I like it

Keeps the riff raff down

Thanks Trudeau, for protecting my family and other rich families

Appreciated

Will definitely vote for another minimum wage increase

#117 Leo Trollstoy on 02.10.18 at 3:46 am

My children are trust fund kids

Those will always be protected

Let the poor chit chat amongst themselves

#118 theoryAndPractice on 02.10.18 at 7:00 am

#92 WIN not lose on 02.09.18 at 9:37 pm

Interesting article in the Financial Post about how Trudeau will be confiscating our money by changing the upcoming tax rules
http://bit.ly/2EgzhfF
—————————————————————————
Excellent article, I’d like to give very simple solution to them , for the records :
– The one that paid extra tax should be paid back the difference, or taxed less from day 1.

#119 maxx on 02.10.18 at 7:24 am

#212 Screwed Canadian Millenial on 02.09.18 at 11:03 am

“***The job losses were spread across industries and included higher paid work, according to the statistics agency. Employment in the food and accommodation sector, where many workers make minimum wage, was little changed.***

——–

Sorry boomers! Facts matter.”

Do you not think that service industry business owners/managers saw the wage hike coming? Months ahead of time? That’s why there was little change.

Facts do matter, especially when you handle them like silly putty.

Your bilge exemplifies, slippery, shallow, uni-dimensional “thinking”, all held together with a burning, white-hot, seething hatred of boomers.

#120 theoryAndPractice on 02.10.18 at 7:31 am

New heights on greed, Bitcoin mining by connecting air-gapped nuclear facility supercomputer to Internet :)

http://www.bbc.com/news/world-europe-43003740

#121 Rifles on 02.10.18 at 8:44 am

Markets up = good, Markets down = get the pitch forks

Truth is that governments are riding on the back of a tiger. Unless they bail out the greater fools mired in debt their mandate is null and void. Those who promise to make it all right – however baseless their pledge may be – will prosper at the ballot box.

Rejoice! They have come for you: https://www.theglobeandmail.com/opinion/were-bringing-the-sanderscorbyn-momentum-to-canada/article37930841/

#122 LivinLarge on 02.10.18 at 8:50 am

“Make sure the bank isn’t paying you 4.95% *once* after the full 5 years, instead of 4.95% each year.”…of course it’s total accumulated interest in five years, it can’t be anything else. But on top of that, it’s a particularly bad 5 year rate.

#123 bogsaway on 02.10.18 at 8:54 am

3 dog defenestration……too bad the country could not have some defenestration at the highest levels.

#124 Bad Cowboy on 02.10.18 at 9:16 am

I remember another time new house prices dropped. I was building subdivisions of million dollar shacks when the market did a slow swan dive off a cliff between ’89 and ’92 until the market was in a coma and you couldn’t give it away. I also can’t forget borrowing millions at 16.5% in COC demand loans. If you can think of imagining a sphincter pucker tighter than a hot bottle vacuum….try and imagine walking in my shoes. Yes, I survived…..the smartest money always does. But….
The people who bought those homes had to service huge mortgages on homes with constantly falling prices in an era where values went down each and every year. In fact the million mark wasn’t achieved again for almost twenty years. When real estate starts going down it never recovers quickly…..never. Look at those laughably misunderstood 50 years charts. You’ll see that long waves of 7 to 10 years of up….
With 28 to 24 month peaks, 7 to 10 years fails followed by 24 to 36 month troughs. If you just bought big….technically you’re screwed into a rising rate era.

#125 jess on 02.10.18 at 9:41 am

if one held 2 part time jobs to make ends meet and now are down to 1?

https://www.theglobeandmail.com/news/national/census-2016-core-aged-canadians-less-likely-to-hold-full-time-jobs/article37136004/

Census 2016: Canadians in prime working years less likely to hold full-time jobs

Canadians in their prime working years were less likely to hold full-time, year-round jobs in 2015 than at any time in the past two decades, new census data show, with declines particularly pronounced among men.

The shift to part-time and part-year work carried implications for everything from household finances to retirement savings, consumer spending and tax returns.

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

Many private small and medium-sized companies hire staff on contractual agreements or on a casual basis so that they do not have to incur the additional cost of paying full-time wages as well as for other benefits for a number of months. Full benefit packages can add as much as 30 per cent to labour costs for companies.
https://www.theglobeandmail.com/report-on-business/careers/career-advice/im-part-time-but-work-40-hours-a-week-should-i-get-benefits/article36434138/

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

Tax avoidance, expenses scams – welcome to the recruitment industry

https://www.theguardian.com/uk-news/2016/nov/15/revealed-temp-agencies-avoidance-scheme-costs-taxpayers-hundreds-of-millions

just in time
Increasing use of part-time workers in the United States is associated with employee scheduling software often resulting in expansion of the part-time workforce, reduction of the full-time workforce and scheduling which is unpredictable and inconvenient.[13][14][15]

#126 AB Boxster on 02.10.18 at 10:17 am

Garth,
Was wondering your thoughts on the following:

I track a standard Greater Fool portfolio that you have described in some past blogs.

To date a portfolio with equal amounts of ETF’s in the following proportions:

Growth
US equities – 20%
Canadian Equities – 20%
REITS – 20%

Income
Govt Bonds -20%
Preferred Shares – 20%

Using pretty standard ETF’s for this portfolio, I calculate a YTD decline of around 2.93% so far this year.

I know that a portfolio can be far more diversified by including high yield bonds in fixed income, and emerging markets and European equities as well.

However, it seems to me that each of these asset classes have been pretty much hammered in the last few days as well. There really has not been an asset class that has avoided this correction, although some fixed income classes have performed marginally ‘less bad’.

It’s a bit of a perfect storm as rising rates over the past few years have hurt bond funds, (ex. over 3 years the short term ishares bond ETF – XSB, is down 5.75%, pretty much negating any interest yield over the past 3 years) And the correction has affected equities around the world.

Many of the assets classes do not seem to be responding according to ‘common theory’ of markets.

For example, preferred share etfs like CPD and XPF are down 1-2%, despite the fact that rates are rising.

Is this just an example of these asset classes getting caught up in the irrational exuberance of a correction?

And with the Canadian index down over 7% on the year, (compared with the US S&P at around 2.4%) are you thinking of changing weightings in CDN equities?

Personally I am beginning to think that holding bond etf’s is unproductive, as opposed to holding actual bonds.

Buying a safe (provincial) 5 year bond 3 years ago, would have paid out 2% annually over the next 5 years, and while its face value may decline due to rates rising, at the end of 5 years you get back the value of the initial bond so capital losses are none.

Bond ETF’s may pay a slightly higher rate, but it is irrelevant if the capital value of the fund itself declines more than the actual interest paid.

Thx in advance.

Those are not portfolio weightings I have described, nor recommended. – Garth

#127 Niagara Region on 02.10.18 at 10:37 am

re: #62 Crowdedelevatorfartz
re: #83 Smoking Man

In the past few days, some respondents complained that women aren’t interested in finance and make poor financial decisions. In response, a couple of folks pointed out that this website, where women could learn more about finance, is often too male a space because a few folks make unnecessary derogatory remarks about women. I agreed. In response, Crowdedelevatorfartz (#62) writes “scroll scroll….scroll past them” and some comments “are an itch I have to scratch.” Smoking Man (#83) writes “Suck it up. And learn something…Stop being a frightened chick.”

Think of it this way, if every 8th or 10th post contained a pejorative, unnecessary racist remark about black folks, and a black man reading the website pointed out that such remarks were making him and his black friends feel unwelcome on the website and that he didn’t see the point of making such gratuitous nasty remarks about black folks, would you say “scroll by these remarks” and “suck it up…stop being a frightened [insert negative word for black person here]”? Probably not. Why then should women readers have to wade through hostile, unnecessary remarks about stupid wives, greedy wives, idiotic women, women taking over the world, women having everything handed to them on a silver platter, etc., to learn more about finance? It’s completely unnecessary; it’s not cool; and it helps chase women away from this website and discourages them from improving their financial literacy.

I thank Garth and those many great respondents who post valuable information about falling RE prices (especially “For Those About to Flop”), who provide links to interesting articles, who discuss investments, and more without tossing in unnecessary negative comments about women. By doing so, you’re implicitly attempting to make this website a place where female readers can feel welcome and can learn more about investment.

#128 Steven Rowlandson on 02.10.18 at 10:48 am

If Mattamy Homes and their fellow travellers want to stay in the game they need to start selling built houses for equal to or less than $90,000. Why? Because that is all the minimum- maximum wage of $15 per hour will pay for under the 3 years pay rule. Homes are places to live.
They must never be allowed to be hyper inflated genocidal investments as they are now.

#129 DON on 02.10.18 at 10:51 am

#15 Niagara Region on 02.09.18 at 6:02 pm

Great photo of Cerebus, the three-headed dog that guards the gates to the underworld, Hades, in Greco-Roman mythology.

I’ve been lurking on this website for weeks; and, as a middle-aged professional who wants to buy her first home at some point, I’m grateful for Garth’s invaluable insights on real estate. The stats on Vancouver RE sales from a respondent are extremely helpful, as are the comments and article links offered by many other respondents. (Thank you, folks) I have sent links to this blog to many of my colleagues in the Niagara Region, mostly single career women who want to purchase homes or who already own homes and are monitoring their real estate investment. However, I do agree with comments over the past couple of days reporting that the consistent anti-women sentiment by a few of the posters–happily, not the majority of posters–makes the blog less-than-inviting for women readers. Otherwise, it’s a very informative blog.
********************

Welcome to the comments section Niagara. It is a constant battle between sensibility and idiocy. You can learn a lot here, just have to weed through the comments. There are good men and women on this blog as well, we all have to deal with the idiots. (Thick skin is required – just as in the non blog world). Enjoy your learning experience and now the real blog dogs have your back.

cheers,

#130 ANON on 02.10.18 at 10:52 am

#6 213 FOOL on 02.09.18 at 5:39 pm
I’m 36 going through my first(!) correction. Got some $$ in a self managed account which I thought was balanced but maybe it isn’t… This SUCKS!!!

Lost money? Fear not! I will be opening a new business to help people find them. Just call 1-800-FIN-DEMM *number to be confirmed).
We will be accepting cash only for our services, and our promise is to find the $$ for you, or explain mathematically that they were just a mirage.
We use the formula for compounded future imagined value, based on initial existing value, and two other variables: rate (the delusion at which the initial existing value will somehow magically expand exponentially), and time (the delusion that the more you wait, the more the value grows out of the delusion of rate). It never fails to explain the “loss w/o find” of $$, going back to the first token-based promise with interest ever made.

#131 M on 02.10.18 at 10:54 am

@125 Jess

Bingo ! That’s exactly why the “increasing jobs numbers” make no difference and actually reflect a decomposing economy. US and Canada have similar workforce dynamics.
I bet that “out of the workforce” percentages are also the same.
In the States, in the last few years, healthcare costs pushed the employers to go hire part time.
Due to different reasons , we have the same in Canada.
Third world status for the workforce in the “first world” expenses for the standard of living.
Result ? Standard of liging is galloping down.

#132 M on 02.10.18 at 11:00 am

@#113 Calg vs US

Beautiful baby ! That is exactly the rationalization of $hit for which the last two Xs were uterly and brutally ditched.
I have never made a better decision in my life looking in retrospect .

#133 Bitcoin Err on 02.10.18 at 11:02 am

If you like charts, check this one out:
https://bitinfocharts.com/top-100-richest-bitcoin-addresses.html

It shows that 0.5 % of the addresses own 87.46% of the Bitcoins.
Does that seem fair, or even correct ? I don’t know much, but I am sure the percentage of idiots in the world is much higher than that.

Not too busy today so I checked out Smokey’s source on the 911 deniers.
http://www1.ae911truth.org/

Interesting read if you want to understand more about the time lag in natural selection. I don’t know much, but when I bust up old concrete with a sledge hammer it turns to dust, and some of it gets in my eye. Although I wonder what would happen if I sprayed burning jet fuel on it first.

#134 DON on 02.10.18 at 11:03 am

#119 maxx on 02.10.18 at 7:24 am

#212 Screwed Canadian Millenial on 02.09.18 at 11:03 am

“***The job losses were spread across industries and included higher paid work, according to the statistics agency. Employment in the food and accommodation sector, where many workers make minimum wage, was little changed.***

——–

Sorry boomers! Facts matter.”

Do you not think that service industry business owners/managers saw the wage hike coming? Months ahead of time? That’s why there was little change.

Facts do matter, especially when you handle them like silly putty.

Your bilge exemplifies, slippery, shallow, uni-dimensional “thinking”, all held together with a burning, white-hot, seething hatred of boomers.
**********************

SCM: idiots transcend all generations. Why perpetuate the labels that allow divide and conquer tactics. There are good boomers and bad boomers. While I understand your criticism – generalizing is not the way to debate nor is making assumptions.

Your thinking isn’t the problem (for the most part) it is your delivery that lacks. Every generation goes through the same trial and tribulations. The young are not unique, nor are the old.

#135 sleepingdragon on 02.10.18 at 11:03 am

@106 Long – Time Lurker

I’m guessing the market VOLATILITY will start dropping AFTER next week. Drops: People are running from their shadows and selling. Some for smart reasons like not wanting to be left holding the bag. Rises: Other people are buying the dips (duh).

After next week my guess is the spooked out people will stop panicking and stop selling then there’ll be stabilization of the market.

That interest rates were going to rise and quantitative tightening (liquidity removal) has been a long time coming so why the shock now?

————————————————————-

The feds balance sheet reduction has a much bigger impact than any single rate hike. Watch out for financial accidents probably a time to be fearful rather than greedy.

#136 DON on 02.10.18 at 11:08 am

#94 conan on 02.09.18 at 9:42 pm

#69 Linda on 02.09.18 at 7:54 pm

I agree with you. The majority of these jobs, were X mas jobs, that routinely disappear in January.

Santa actors, to Zither players, all get the chop. They somehow survive through winter.

https://www.youtube.com/watch?v=62Y7BXIuX6Y
*********************

YUP…always happens in January to some extent as Christmas is over.

#137 DON on 02.10.18 at 11:17 am

#111 maya on 02.10.18 at 1:02 am

#201 IHCTD9 on 02.09.18 at 10:13 am
#161 maya on 02.09.18 at 2:26 am
I get everything you say Garth. We have saved 175000 in four plus years by renting only. But now the rent in surrey area is so expensive, I wont be able to save. Dont know what to cut from already frugal lifestyle. I live frugally, but do not compramise in food and fun things. I dont buy lots of stuff and try to be a minimalist.
But i am losing it now. Two bedroom decent apartment is 1800 now. Who makes and pays that kind of money in Surrey. You are lucky if you have $20 an hour paying job.

I am losing hope. If I cant save in rent, where else I can cut it. If you have to cut small things in life, what is the point iof living and working. I dont know.
You might say move further away. but the commute increases and we might need two cars. The housing situation is killing us. I hope it seriously crashes.
______

Move to where it makes sense to live costs/income. If not look into living in a Van, tiny house, or RV. Don’t blow that 175K, you’ll never forgive yourself.

Think about moving every day until you get used to the idea. Either that, or start thinking about an alternative lifestyle.

I don’t care how nice the scenery is, if your area has you eating dirt for sustenance with no savings and no prospects – it is time to leave.

Time for a new job, new city, new life.

#201 IHCTD9 on 02.09.18 at 10:13 am

Hi IHCTD9:
Thanks for you suggestion. We are thinking of moving, but when kids are involved it’s hard. Good school is a big factor and my older child dont want to leave her school where she is happy. Plus, we have our community here. It is not like you are single and can live in a tent. Otherwise I will just live in an RV. Things get comlicated when children are involved. Please dont tell me I should not have had children.
What amazes me is who is paying such a rate for renting? Seriously. All the people who have money for downpayment and have good credit have already bought into this market. I am the only one in my communtiy who rents and I get laughted at all the time. They dont know our savings. Jokes on them. But now I am really concerned. I am questining may be I made a mistake not buying few years ago. You know so many arguments going into my head. I am still for renting if I find a decent one with decent price.
We will see.
****************

Maya…it is harder to move with kids but not impossible. Timing is everything…best bet is to keep your eyes open. Lots of good teachers in rural areas. I hear yah though and having kids is also a life experience and at the end of the day all you have is family and friends.

Hang is there and enjoy what you have in the moment. The tsunami is approaching.

#138 Widening Gyre on 02.10.18 at 11:23 am

#15 Niagara Region on 02.09.18 at 6:02 pm
Nice to hear from you Niagara. I’m pretty sure there’s lots of us ladies on here -Time to out yourselves ladies.

#72 Reality is stark on 02.09.18 at 8:09 pm.
Every day you come on here and spout the same old BS. Yes, we get it-your ex wife screwed you over.

So, you are a poor judge of character. Marital mistakes are yours and yours alone. Reality is stark- It’s even starker when you are an idiot. Cut your incessant whinging.

F46BC

#139 TurnerNation on 02.10.18 at 11:34 am

Starve the Beast: I’m seeing unbridled food price inflation in both fresh and prepared stuffs. STOP eating out. Buy your own food. Most places are corporate owned (Cara, Restaraunt Brands, McDs, BK et al) anyway.

Awaiting Smoking Man’s next book: How to talk to a Millennial (if you must).

Do they really need the latest $1500 phone and winter parka? And yearly trips down South? I refuse to pay their new hiked min. wage for this.

M42ON

#140 ben on 02.10.18 at 11:36 am

I love how people here are *so* against the minimum wage increase (for the record I think it was a bad idea), yet when it comes to force feeding artificial credit into the market against land it’s all fair game.

Canadian banks have deliberately ramped the land market for their own gain for decades. They’ve worked with BoC (Carnage) to continuously shock the market into life again any time it threatened to stall, via low rates and wilful oversight of clear money laundering.

We’ve all seen this happening *very* clearly, yet apparently even though they have access to every bank transaction in the country BoC couldn’t stop it.

That’s clearly collusion.

Well now we have the inevitable day of reckoning. And after the dust settles and Vancouverites stop pulling $$ out of each others’ asses via housing they will find they have no manufacturing and a bunch of semi-literate retard realtors claiming unemployment benefit.

Would be great if we had a change in government to a party that represents the people.

1. Jail loads of bankers, realtors and accountants who all knowingly took part in money laundering. Send them to the worst jails. Send that message loud and clear.

2. Tax land, not labour

3. Stop trying to ramp land through high immigration numbers – take skilled, required labour only, and as a last resort – train your own kids first.

4. Make it policy to have a small banking sector. A large banking sector is inefficient, the larger the more they are skimming off – this should be very clear to anyone.

5. Make land prices part of the inflation stats. Using mortgage costs just ties inflation to the cost of money, which is a circular reference designed to allow printing via land.

6. Educate people at school on the difference between wealth creation and rentier activity. Adding value is the former, landlordism / bankers is the latter.

7. Learn from Quebec. They have far lower land prices despite having the same retarded low rates. Their non-anglophone culture appreciates the difference between wealth creation and wealth appropriation: https://pbs.twimg.com/media/DVPLYHDX0AEpTG2.jpg:large

British rentier culture is pure cancer for your kids.

#141 chopstix on 02.10.18 at 11:37 am

#39 Mattl on 02.09.18 at 6:37 pm
A RE crash will effect everyone. The idea that this huge gasbag could pop with no impact to renters and savers was always ridiculous. All those savers that were going to vulch when the time was just right may be in for a big surprise. Great, homes are 30 percent cheaper but credit is harder get get and deb costs twice as much to service. And that second income is gone, wife just lost her job. And your savings? Down 8-15% wherever this thing ends. 30 percent discount on RE may not look that great in a fiscal shit storm.
———————————

agree…it’s amazing how some idiots on here wish for a RE crash and don’t forsee any consequences…first thing would be people pulling back in fear and not spendinglike they were…those are the beginning behaviours leading to a recession…less money going around means job losses as no one is buying additional furniture or cell service/ cable, food luxuries, electronics purchases, travel cutbacks etc.

i don’t think we’ll see it…but then again i have no clue what will finally put a plug into the crazy condo prices as in Toronto and Scamcouver (but i get it as it seems condos are the only ”affordable” option for those wanting to buy/get in vs single dwellings…but $1500-2000/sq foot condo bird cages ..insane!

#142 Nether Regions on 02.10.18 at 11:39 am

#129 DON on 02.10.18 at 10:51 am
#15 Niagara Region on 02.09.18 at 6:02 pm
… the majority of posters–makes the blog less-than-inviting for women readers. Otherwise, it’s a very informative blog.
********************
Welcome to the comments section Niagara. It is a constant battle between sensibility and idiocy……

***********

Welcome to Hell.

#143 TurnerNation on 02.10.18 at 11:40 am

Millennials I know also have endless budgets for Weed, Booze and Smokes.

Realtor wants to join the Horsey Set with a lux marque.
Perfect timing. Listen to this wizened financial pro read the interest rates markets with ease:

http://www.cbc.ca/news/business/luxury-retail-cars-canada-1.4517386

“Jas Takhar is on the hunt for a new luxury car.

The Toronto real estate agent has been renting cars since the lease on his vehicle expired two months ago so he can take his time to pick the right brand.”


But that won’t deter Takhar from buying his luxury car as early as this month.

“I’ve budgeted for a hike in rates,” the father of two said.

“I won’t be silly and go get an Aston Martin at $250,000 or a Ferrari or Lamborghini,” he said. “If I can keep it to $1,000 to $1,100 a month for a lease, I’m happy

#144 Smoking Man on 02.10.18 at 11:41 am

#127 Niagara Region on 02.10.18 at 10:37 am
re: #62 Crowdedelevatorfartz
re: #83 Smoking Man

In the past few days, some respondents complained that women aren’t interested in finance and make poor financial decisions. In response, a couple of folks pointed out that this website, where women could learn more about finance, is often too male a space because a few folks make unnecessary derogatory remarks about women. I agreed. In response, Crowdedelevatorfartz (#62) writes “scroll scroll….scroll past them” and some comments “are an itch I have to scratch.” Smoking Man (#83) writes “Suck it up. And learn something…Stop being a frightened chick.”

Think of it this way, if every 8th or 10th post contained a pejorative, unnecessary racist remark about black folks, and a black man reading the website pointed out that such remarks were making him and his black friends feel unwelcome on the website and that he didn’t see the point of making such gratuitous nasty remarks about black folks, would you say “scroll by these remarks” and “suck it up…stop being a frightened [insert negative word for black person here]”? Probably not. Why then should women readers have to wade through hostile, unnecessary remarks about stupid wives, greedy wives, idiotic women, women taking over the world, women having everything handed to them on a silver platter, etc., to learn more about finance? It’s completely unnecessary; it’s not cool; and it helps chase women away from this website and discourages them from improving their financial literacy.

I thank Garth and those many great respondents who post valuable information about falling RE prices (especially “For Those About to Flop”), who provide links to interesting articles, who discuss investments, and more without tossing in unnecessary negative comments about women. By doing so, you’re implicitly attempting to make this website a place where female readers can feel welcome and can learn more about investment.
…….

Look you are the one who played the chic card. Was it even necessary. Hate to brake it to you by and large woman don’t give a rat’s ass about finance or coding. It’s the nature of the best. Now the fact that you do give a shit is a great step forward for woman kind.

Think of this place as a rabid dog pound were every one is going for alpha dominance. And leave it at that. Don’t over think.

Woof Woof.

#145 ben on 02.10.18 at 11:44 am

People who don’t want a real estate crash because they say it will lead to a recession, just absurd.

The cost imposed on society of insane land prices is enormous. One must hand over a huge % of one’s income to the bankers – with nothing back. For the same pile of bricks you could have for way cheaper (because it’s the land that costs the big bucks).

In addition the opportunity cost is huge. STEM grads who use their education to get a job in a bank playing stocks, which adds zero value. Would-be entrepreneurs deciding to flip houses instead of starting a real business. Factory owners outsourcing to China because local wages are too high due to crazy land costs. The list goes on and on.

“Ah but now we have high housing if we stop we will have a recession”, they say.

Are they children? Yes this will hurt. But continuing this stupid policy only stores up more pain.

These people are selfishly delaying the pain for future generations. They should grow up.

#146 Vanrentor on 02.10.18 at 11:47 am

This house at 1086 Pacific Court was listed at $2.5M last year and has just been re-listed at $1.7M and the realtor is having an auction trying to sell it by this Tuesday. It will be interesting to see if it sells and for how much. The high end market in Tsawwassen is non existent right now. 95 houses over $1.25 listed in January and zero sales.

https://www.realtor.ca/Residential/Single-Family/19074113/1086-PACIFIC-COURT-Tsawwassen-British-Columbia-V4M3S3

https://www.bcassessment.ca/Property/Info/QTAwMDA1VzBKWQ==

#147 NoName on 02.10.18 at 11:51 am

Few entries from my diary

Mid October
Canada. It is the most beautiful country in the world. As autumn is going away and winnter is getting closer every day, trees and leaves with all lovely colours of golds, reds and browns, many shades of yellow and orange, are making niciest mosaic of colours i ever sow. Just other day, I drove through nature and saw a couple of deer. They’re so graceful. These are some of the most beautiful animals in the world. This must be heaven. I love Canada.

November 11
Remembrance Day, family feast, only thing i can think of is deer hunting will start soon. Hopefully next year wife will come hunting with me. I hope it doesn’t start snowing any time soon. Life is good.

Early December
So the first snow has fallen. I got up and saw everything covered with white blankets. Looks like the most beautiful postcard. We went out, cleaned stairs and shoveled driveway, then we had some snowball fight of course i won, kids and wife stand no chance against me. As they are licking their bruised ego snow-plow blocked driveway again…

December
Snow again. Again, everything looks like most beautiful postcard, snow plow blocked driveway, again.

December
Snow again. I could not get to car to go to work, so much snow… Winter is really wonderful just a bit tired of shoveling. Again f***ing snowplow.

December
This white $#!7 will be felling again all night. All this shoveling got me sore throat. Duce with snowplow seems to be watching me and waits for me to finish cleaning driveway so he can block it again. A$$h00l3.

Decembar
Merry Christmas. A little bit of snow overnight, kids are enjoying their presents. Driveway blocked again, if i ever get hold of this snow plow guys ill strangle him!
Can they just not put more salt on a road so snow mets…

December
Snow again. I have not been out for three days, as I clean the snow of the driveway, snow plow blocks it again like f***en clockwork. We can not go anywhere, the car stuck half way down hill, Wetherman is saying that the new 30-centimeters of these $#!7 will fall down over night.

December
Weatherman was wrong, it is really bad outside. Half a meter of now came down. If this continues, it will not melt until summer. The @$$h00l3 with snow plow is stuck and sucker came to me to borrow for a shovel. I told him I had already broken the six shovels since winter started, and i slammed door shut on him, i hope door didn’t hit his head.

January
Finally we are able to leave house. Straight to the grocery store to buy some food and on a way home deer jumped out brush and collided with car 3000cad damage to front. Those f***ing beasts have to be killed and exterminated, public is not safe with them around. Government did lousy job of controlled hunt the autumn, definetly too many deers not enough hunters…

February
Took a car to the mechanic for oil change, rust everywhere, it mind boggling how much salt they put on a road, ill need new car. Its snowing again, temperature in a range -10 to -15 last couple of days. F***ing groundhog just announced six more weeks of winter, had to hand it to him he is more accurate than weather man, March comes we are definitely moving to Florida…

#148 MF on 02.10.18 at 12:17 pm

#139 TurnerNation on 02.10

I worked in a restaurant for years as a server. Most of the other servers were middle aged recent immigrants and raising a family.

I wouldn’t blame them but I would blame the politicians.

Continue to eat out, but choose wisely.

MF

#149 AB Boxster on 02.10.18 at 12:24 pm

#126 AB Boxster on 02.10.18 at 10:17 am

Those are not portfolio weightings I have described, nor recommended. – Garth
————————————–
Not exactly, but I don’t think in today’s market, returns would not be hugely different.

Weightings in the past were:

Government bonds – 10% (7% + 3% for inflation linked bonds you do not now recommend)
Corporate Bonds – 4%
High Yield 3%
Preferred shares – 18%
Cash 5%

Canadian equities – 12%
Canadian Reits – 5%
US – 21%
International 18%
Completion – 4%

In the Fixed world all asset classes are down.
Corporate less that government, but high yield more than both.

In equities, Europe and international are down 1.5 – 2 depending on your exposure and ETF.

And of course Canadian and US indexes are down 7 and 2.5% respectively with REITS down around 3.5%.

Using more exact weightings, the portfolio is still down 2.35%.

But my point is not to critique the portfolio or the individual weightings. Depending in which ETF is chosen, and the Fund company, returns and results can vary widely.

As I menitioned, all asset classes have taken a beating, and a balanced portfolio, even it is down 2.5% on the year, is doing far than having all assets in the TSX , the S&P or in Bitcoin.

If one is going to invest I still believe your approach is far superior to that of most who think that ‘playing the markets’ actually works.

But it is a little frustrating seeing some of the ETF asset classes that were supposed to provide balance to equities, (such as short term govt bonds) continuing to perform poorly over the medium term.

#150 jess on 02.10.18 at 1:12 pm

ben
re:rentier

OR the misplaced comma ;^>

Lack of Oxford Comma Could Cost Maine Company Millions in …
https://www.nytimes.com/2017/03/16/us/oxford-comma-lawsuit.html

Mar 16, 2017 – A class-action lawsuit about overtime pay for truck drivers hinged entirely on a debate that has bitterly divided friends, families and foes: The dreaded — or totally necessary — Oxford comma, perhaps the most polarizing of punctuation marks. What ensued in the United States Court of Appeals for the First ..

https://qz.com/1204146/oxford-comma-court-case-maines-oakhurst-dairy-has-settled-with-its-drivers-for-5-million/

#151 Victor V on 02.10.18 at 1:24 pm

Canadian Mortgage Growth Falls To The Lowest Rate In 2 Years

https://betterdwelling.com/canadian-mortgage-growth-falls-to-the-lowest-rate-in-2-years

Canada’s booming real estate market led to explosive growth in mortgages, but that may be ending. Numbers from the Bank of Canada (BoC) show growth of household mortgage debt is starting to slow. The decline in growth may not be a red flag for most investors, but that’s because they aren’t looking at the whole picture. When you couple this with some of the other market conditions, we get an indicator that smart investors are taking note of.

Smart people like Richard Vague claim rapid increases in debt, lead to asset price inflation. Vague claims “prices have increased well above the trend for those asset categories where the lending has been concentrated.” Simple words, but a complicated sentence. He’s saying that a rapid increase of prices beyond normal, is usually linked to an area of strong credit growth. Once that credit growth starts to slow, it tends to trigger a correction. After all, if credit was linked to the growth of prices, prices need to come down to accommodate the change.

#152 Lisa on 02.10.18 at 1:25 pm

#92 win not lose:
Great articles!
That is one thing I like about Trump: he’s not a smooth talking politician. Keep ’em on their toes!

#153 Lisa on 02.10.18 at 1:28 pm

Floppy:
You always have news on the Lower Mainland, but not Chilliwack. I used to live there, so any updates are appreciated!
So glad I left. Hamilton smells better. ;)

#154 aa3 on 02.10.18 at 1:51 pm

#141 Chopstix… I was on economics blogs/forums in 2007-2009, and preceding the USA housing bust, few bears online saw that it would spill over into the general economy.

#155 Vprime on 02.10.18 at 1:57 pm

I am very familiar with the Upper West Side location. Interesting how this is spun. If you look at the site plan these are the worst lots in the subdivision facing or close to a major road and would have never sold for those prices. Even at over $2M, they are still expensive to be facing a major road.

http://conservatorygroup.ca/siteplan/upperwestside-siteplan.pdf

#156 MagicNumber on 02.10.18 at 2:09 pm

#113, as you say to each his own, but google is your friend rather than making up numbers. There are dozens of public school districts in the US in the top 85th percentile with average housing less than 200k. Just sayin. That on top of all the other advantages I mentioned.

#157 Ray on 02.10.18 at 2:18 pm

There is a tsunami of automation coming soon to replace almost everyone that has a job that can be mirrored by an algorithm. From truck drivers, sales clerks, accountants, pilots, to air traffic controllers etc. Technology will replace all these workers. A robot will do what it is asked to do, 24/7/365 without whining, or asking for its committee man. Robots will still function even if the humify, temperature and lighting isn’t right. In the past, unions grew powerful because there wasn’t a viable alternative to getting the work done. That’s no longer true, and Trump’s mantra of “Make America Great Again” by bringing back the jobs will not work (pun intended).
With the deep cultural polarization already existing , this will exasperate social problems.
https://www.nytimes.com/2018/02/10/technology/his-2020-campaign-message-the-robots-are-coming.html?partner=rss&emc=rss

#158 DON on 02.10.18 at 2:25 pm

#141 chopstix on 02.10.18 at 11:37 am

#39 Mattl on 02.09.18 at 6:37 pm
A RE crash will effect everyone. The idea that this huge gasbag could pop with no impact to renters and savers was always ridiculous. All those savers that were going to vulch when the time was just right may be in for a big surprise. Great, homes are 30 percent cheaper but credit is harder get get and deb costs twice as much to service. And that second income is gone, wife just lost her job. And your savings? Down 8-15% wherever this thing ends. 30 percent discount on RE may not look that great in a fiscal shit storm.
———————————

agree…it’s amazing how some idiots on here wish for a RE crash and don’t forsee any consequences…first thing would be people pulling back in fear and not spendinglike they were…those are the beginning behaviours leading to a recession…less money going around means job losses as no one is buying additional furniture or cell service/ cable, food luxuries, electronics purchases, travel cutbacks etc.

i don’t think we’ll see it…but then again i have no clue what will finally put a plug into the crazy condo prices as in Toronto and Scamcouver (but i get it as it seems condos are the only ”affordable” option for those wanting to buy/get in vs single dwellings…but $1500-2000/sq foot condo bird cages ..insane!
****************

Those who are not over leveraged and highly indebted can wait out most storms…until the next up swing. Now the over indebted will possibly have credit and divorce issues. So yes everyone’s mileage will vary but I wouldn’t want to have those debt chains weighing me down when the tsunami comes in.

Typical human nature response over spend and expect it will be just as worst for everyone even the sensible. Live with your decision, take ownership. FFS!

#159 Lost...but not leased on 02.10.18 at 2:41 pm

Simple…

Re Mattamy and other builders

DON’T BY PRESALE !!!! It should be outlawed.

“Crashes”..err corrections in any market are inevitable.

Parties caught up in presales always risk buying at peak,when price cuts are just around the corner.

To my understanding.. ..developers profit margins are/were around 25%.

If we are in the midst of “corrections”….then house horny buyers should buy existing completed newer homes ( and kick the tires) which should be flooding the market in the near future. Be patient.

AGAIN..avoid pre-sale !!! whats the purpose…all this does is add more inventory and make the crash worse.If builders like Mattamy guessed wrong.too bad….that’s THEIR problem…not ours.

#160 Penny Henny on 02.10.18 at 3:11 pm

#148 MF on 02.10.18 at 12:17 pm
#139 TurnerNation on 02.10

I worked in a restaurant for years as a server. Most of the other servers were middle aged recent immigrants and raising a family.

I wouldn’t blame them but I would blame the politicians.

Continue to eat out, but choose wisely.

MF

????????????????????

Swiss Chalet?

#161 crowdedelevatorfartz on 02.10.18 at 3:45 pm

@#127 Niagra Region
“without tossing in unnecessary negative comments about women”
+++++++

Please point out to me where I have ‘tossed in” unnecessary negative comments about women by sugessting that you can scroll past what you decide is offensive.

As for “Offensive posts on a blog comment section”.

Welcome to the internet

#162 45north on 02.10.18 at 7:18 pm

Cindy: Then there’s this guy….

For weeks now, I’ve been trying desperately to convince him not to buy a place in the GTA anytime in the near future.

Today I heard the news. He finally decided to hold off buying, and he got a 6-month rental. A condo, downtown. He’s going to see how this all plays out before rushing into buying.
Whew. This feels like a win.

sounds like a win

#163 Linda on 02.10.18 at 7:37 pm

#147 No Name – LOVE the diary – so Canadian & so true! Thanks for posting, I laughed until I cried. More snow coming our way tonight, am not sure where we will put latest dump. Praise be we are on a snow route so the road in front gets plowed eventually. If ever we sell our house, for sure that is going to be listed as an amenity when we list:)

#164 Anomymous Coward on 02.10.18 at 10:31 pm

#147 NoName on 02.10.18 at 11:51 am

That is truly the best Canadian story never told!

I’m predicting a Mirvish theatre play and possibly an independent film entry at TIFF some time in the future!

#165 maxx on 02.11.18 at 7:30 am

#15 Niagara Region on 02.09.18 at 6:02 pm

Just look at the blog as a really great nightclub with the usual mix of characters – some amazing and outstanding and some you wouldn’t touch with a barge pole. The club has a great owner, a solid gold human being who won’t tolerate misogynistic/racist commentary.

No worries, except that any and all comments run through the mill of dawg scrutiny……woof!

Haul up ye olde bootstraps and get on the dance floor. This blog has far too much value to pass up.

#166 NEVER GIVE UP on 02.12.18 at 12:11 am

#64 homeless in bc on 02.09.18 at 7:50 pm
Royal bank closes Jodi Emery account because she has criminal record for cannabis conviction! Really!? For all you peeps that think this has nothing to do with you, better think again. What’s next? Can’t get a mortgage because you smoked a joint? Maybe you will just have to pay a higher rate. That o.k with you? It is not like she was convicted of major fraud and ripped off hundreds of people. Conrad Black. When it comes to the Royal banks execs who initiated this and support it, I cannot express how despicable I think they are.
===================================

ASTONISHING
Freedom has long since ended in the USA, and our Bootlicking industrial complex has followed suit.
I really think Europe is the only real place on earth with any semblance of real freedom and sensibility.

How WRONG can you get?

RBC Count on me closing my Business and personal account FOREVER! And I dont even Smoke POT!

#167 NEVER GIVE UP on 02.12.18 at 12:19 am

Imagine the outrageous notion that you can lose your job because a possibly Jilted ex-wife made an accusation of spousal abuse.
Even Celebrities are human beings. Why should I care? Because it is WRONG, That’s why.
Everyone deserves his day in court. After the court rules that he is guilty then it should be OK for News outlets to reveal the charges and the conviction. Not one day earlier.
Sentencing by public opinion through media is “Cruel and unusual punishment”.