Prices are not dropping. Have you seen Markham? Houses are staying on the market for a little longer but are ALL going over asking price to the tune of 5-10%. 2008 was the best time to buy. We will never see those prices again. Do you delete my comments because they don’t fall in to your agenda of tricking “greater fools” who read your blog. The fools are those who missed their chance to buy in 2008. Prices will never go back to those levels. It’s different now. – Blog comment, posted Tuesday.
I wouldn’t be so certain about that. Never is a long time. Nothing’s ever different. Just ask somebody who bought Blackberry at $140 a share, now missing 92% of their money.
Let’s ask ourselves: are the following indicators of a healthy, booming market? Or one that’s living on borrowed time, bad intel and a surfeit of hormonal juices?
Mortgages rise. Yup, again.
BeeMo upped the cost of a fixed-rate, 5-year mortgage by a fifth of a point on Tuesday, taking it from 3.59% to 3.79%. This is the fourth round in the past seven weeks and will, in due course, be quietly matched by the other big banks.
So what? Loans are still cheap, right?
You bet. But let’s remember it was just months ago the bank was offering the same thing for 2.99% and, if you sucked up enough to [email protected], for a record-setting 2.69%. The increase, then, has been massive and comes despite the ironclad guarantees from every realtor and house-humper on this blog that interest rates in Canada can’t possibly rise for the next 20 years, or society as we know it will wither.
It’s not over, either. The five-year Canada bond rate has jumped sixth-tenths of a point (to 1.9%) since March as the world ponders when the US central bank will start dialing back its stimulus spending program. Looks like next month. Hope you locked in when the advice was given.
New condo sales crater…
It just gets worse for those poor, impoverished developers. Will Brad Lamb have to downsize to an S-Class?
For 15 months, sales of new houses in the country’s biggest market have eroded until we’ve reached this point: the worst numbers in 10 years. This week the industry was forced to reveal that condo sales have crashed 34% below the 10-year average while SFH sales are sitting 45% underneath that level. Between January and the end of July a total of 15,302 new properties were sold. That’s 32% less than in the same period last year, and a drop of 43% from 2011.
…while the towers rise.
But if sales suck, why are cranes all over the sky?
Another sign of a market entering a time of distress. More than 250 condo towers are being built in the GTA (the most anywhere in the world), which will deliver 66,126 new units onto the market, close to a third of those by the end of 2013. It means there’s now a 17-month supply of new units, thanks to decisions made in another time. This is not a buyer’s market. It’s a mugging.
Let’s recap. The bond market pushes mortgages higher. Even though the Bank of Canada hasn’t raised a rarified pinky, loan rates are 1% fatter than half a year ago.
Higher rates bring lower prices. Always. Write that down.
New single-family home sales in the country’s biggest market shrink by more than 40%, and yet the average price hits a fresh record high ($645,854).
Of 19,000 new condos currently available, only 995 sell in a month, and yet 250 new towers are going up with sixty thousand more units coming.
Says the head of the builders’ association: “It’s important to understand that while we are experiencing record-high construction, these homes have been sold two to three years ago and are not an accurate representation of today’s new homes market. Sales activity in 2013 has been low and we will start to see the effect of that in two to three years.”
So. With new houses, prices rise while sales fall. Supply overwhelms demand. With resales, the one, single market driver is now fading fast.
If this was a stock, you’d shoot it.
156 comments ↓
TO and GTA Stats and Sales 2013/08/20
http://recharts.blogspot.ca/2013/08/416905-condo-sales-and-stats-2013-08-20.html
http://recharts.blogspot.ca/2013/08/905-sfh-sales-and-stats-2013-08-20.html
http://recharts.blogspot.ca/2013/08/416-sfh-sales-and-stats-2013-08-20.html
Bonds showed a gimmer of dope today.
If this was a stock, you’d shoot it.
I assume ‘shoot’ = ‘short’?
either way, condo buyers are screwed (even those from 2 years ago waiting for the construction to finish so that they can dump their unit and avoid being an accidental landlord)
Nova Scotia Realtors Association decided to block the sold prices until the property closes.
http://www.viewpoint.ca/closedate
This puts a cover on the prices on viewpoint, as you have to go back and check the sold property’s price a few weeks to a few months later to see what it sold for vs the asking price. Since this is now blocked, you can’t simply scroll through the list of solds, to get a feel of how the market is preforming with respect to asking prices.
I am sad because my 5 yr fixed mortgage is up for renewal in March 2014. Break penalty is $3000. No blending offered says the RBC branch manager. What to do?
USD back above $1.04 CDN… will it hit $1.06 like it did in July?
I have come to realize that the GTA really is different when it comes to RE. Prices will continue to rise.
Why you ask ? Because except for Italy, there simply is no greater concentration of Italians anywhere in the world.
Have you seen Markham? Houses are staying on the market for a little longer but are ALL going over asking price to the tune of 5-10%.
Yes I've seen Marham, and this is what Q2 dollar volume looked like with historically low rates. Table
And all of this condo fiasco in Toronto courtesy of Flaherty/Steve Prorogation Harper and I’m-gonna-give-them-Brits-lo-rates-until-they-croak-or-until-they-stop-serving-me-them’s-greasy-disgusting-dishes-Carney.
@Canadian Watchdog
Can you please post for us the dollar volume for 416 for Condos for the first half of August compared with the same period last year ?
thanks
recharts
http://rabble.ca/blogs/bloggers/mainlander/2013/08/debate-on-housing-supply-really-about-monopoly
Milla !
Please tell me you just bought your condo……..
“negative equity” is another evil capitalist term you may become familiar with in the next year.
Unless, of course, you bail on your financial obligations and flee to eastern Europe like several of my co workers did.
They never expected to come back to Canuckda but after one winter of power outages, drunks vomitting on their doorsteps, mail packages stolen, and thugs demanding “protection” money.
Lo and behold!
They were BACK!
And the banks were waiting! :)
“…as the world ponders when the US central bank will start dialing back its stimulus spending program. Looks like next month. ”
What do you think this augers for Canada and Canadian bank stocks in particular? I’m always curious to find out why you seem to have such a rosy outlook on finance inj general, even given how the Americans play casino with their economy and the MSM stats they feed everyone are just big ‘ole lies.
J
http://www.theglobeandmail.com/report-on-business/life-after-blackberry-canadas-innovation-vacuum/article13825154/
“An abundance of science is generated in university labs and startup firms but most of it never finds its way into commercial applications. Risk-averse banks and too many businesses of the bird-in-the-hand variety remain the weak links in Canada’s innovation system.”
perhaps the government should have created a CMHC style crown corp “Canadian Science and Technology Corporation” instead of keep on boosting the CMHC the last few years …
These two have $2,355 left at the end of the month after paying rent AND utilities of $1,180 and their other expenses. They have $44,500 in non-RRSP funds and about$62,000 of RRSP funds that they could us to purchase a home. Because purchasing a home is the ONLY option, right?
So basically, they’re going to pillage their savings and get saddled with a mortgage that will take almost 25 years to pay. Meanwhile, the $44,500 they have now could earn almost $2,000 per year at a reasonable 4% rate…..but they could grow it, even if they boost their rent by $1,000 a month to $2,200 and get a bigger place. They’d still have $1,355 surplus at the end of the month, that’s over $16,000 a year they could save!!!!! In addition to the $106,500 they have in cash and RRSPs. And as their income increases, they could save more!
What is not said in the article is how BIG a mortgage they want to get, what payment they’ll have and how that monthly surplus will change with a purchase of a house.
http://www.theglobeandmail.com/globe-investor/personal-finance/retirement-rrsps/hats-off-to-savvy-savers/article13819689/#dashboard/follows/
Well,
ok sales are cratering on the planet, but what about micro economy in dawson creek b.c.
Oil and gas is booming, so is housing………..Is dawson creek headed for the big so called crash……..
Mark
#4 Sparky55
Nova Scotia Realtors Association decided to block the sold prices until the property closes.
Wondering why? Look here
That's what happens when you give too much information and don't conceal price history from buyers. I guess good data does matter after all.
you are in denial of you say prices are moderating. Everythig selllls. maybe that is just the edge of the cliff where people say now or never, and then there will be a brutal wake up… we’ll see, but this is not the time yet, maybe another 2% higher interest rates will make you a prophet, but until then we are just having fun here…
http://finance.yahoo.com/echarts?s=^TNX+Interactive#symbol=^tnx;range=1y;compare=;indicator=volume;charttype=area;crosshair=on;ohlcvalues=0;logscale=off;source=undefined;
This is the world’s ‘risk free’ benchmark….the US Government 10 year bond. All fixed income products worldwide are priced relative to this interest rate (yield to maturity in bond speak)….that means all other country’s bonds around the world, corporate bonds, mortgages, car loans, equipment loans, etc. So when you witness the rapid rise in yield (because bonds are being sold) in the US 10 yr bond since May’13, and that is the baseline on top of which all other bonds in the world are priced at a PREMIUM to….well, you can tell your financial advisors who preach that interest rates are not going to rise that they need to refresh their online business degrees from Devry. Oh yeah….if you look over a longer time frame on the chart options, you will see that the yield on the US10yr traded between 4% and 5% for most of the decade that preceded the financial crisis….so that might be where the yield, currently at 2.8%, is heading?
It’s more like a stockyard.
Great blog today, straight to the point.
Toronto condos, the new bridges to nowhere. I mean, I don’t mean to BE mean but, when will these dummies learn? Here we have banks right, they are supposed to know what drives interest rates. They are supposed to know what higher interest rates will do to new builds, residential construction, the works. Our financial institutions are supposed to know that a U.S. recovery means higher yields in the bond markets. They are supposed to know this and do the right thing by throttling growth. For that matter, so is government.
What do these dummies do? (seriously, don’t mean to be mean but a spade is a spade) These dummies build bridges to nowhere in the face of U.S. recovery and higher yields sure to lead Canada into a serious RE correction. Why did they do it? Self interest. And that’s pure plain plumb dumb. the damage is systemic now. Money is more expensive and won’t relent. Asset valuations will decline as its all built on credit.
I must say, Harper makes my dummy of the day. Here he is, bragging up Conservative stewardship in the north. Well, where’s he been? He’s had 7 years to do something in the North, what has he done besides photo ops and hot air? Harper claims interest and progress while Russia kicks our ass in terms of development:
http://www.cbc.ca/news/business/story/2013/08/19/north-arctic-shipping.html
Its the same with west/east pipelines. 7 years go by and just now Harper is talking about it? Must be because the dummy was too busy helping banks through CMHC build bridges to nowhere readers, while the signs any average economist would have caught were there in plain sight for all to see, the marketplace knowing this for more than 3 years now:
http://www.aei-ideas.org/2013/06/us-oil-output-in-2012-largest-one-year-gain-in-us-history/?
U.S. trade deficits shrink big time:
http://online.wsj.com/article/SB10001424127887323968704578651734228576550.html
Seeing the historical is believing (check out the 15 year chart. Are there still a few dummies bleating a bright future for gold with what this chart spells?):
http://www.tradingeconomics.com/united-states/balance-of-trade
America is getting back to work:
http://www.tradingeconomics.com/united-states/unemployment-rate
Housing valuations are up 12% year over year. Homeowners took a pop in equity and we all know what that means for consumer spending and financials:
http://www.bloomberg.com/news/2013-08-08/home-prices-rise-in-87-of-u-s-cities-amid-recovery.html
The signs of U.S. recovery are everywhere and have been for some time now, everywhere except the PMO. Apparently, Harper, Flaherty and cast was too busy helping self interested developers and multi millionaire banker CEO’s on Bay Street help build bridges to nowhere, condo’s reaching for the space of broken dreams, to see the U.S. recovery, see the rising yields that follow in the bond markets, see ugly RE correction to come while industry sits idle waiting for leadership.
Stupid is as stupid does. Sad really, that these dummies run our nation.
looks like some major panic in my part of the woods,signs just went up on my latest condo endevor and low and behold pre-sales were so weak they are now being advertized as “hi end rental units”.IM thinking theres more than enough nervous butt sweat happening about now with the money men behind this project
Must be SM’s progeny in the pic. bra.
Oil’s giving the sign. Who’s left to buy? In banks we trust. I’m whiffing a bit of 2008 here. VIX notching.
What a nite: Duke Devon (Lodge #1) patio party and Bymark. Someone else’s paying, natch. I’m on a blog dog salary.
For the boomers: CCR’s cover of Wilson Pickett. I swear this drumbeat’s being sampled, to this day. Ahead of their time.
http://www.youtube.com/watch?v=CrY-S6keYg0
Wake me up after another 15 rounds of 20bpts increases.
I’m in Mississauga and I don’t see any home construction going on except for the atrocious cluster of condos at square one. Condos definitely are in for some trouble over the next 2-3 years but I am starting to think detached and semis will be just fine – they aren’t being built anymore. (unless you want to live in bramledesh)
G’s D: good one about Devry!
And now, from the other side of the Pond
http://www.theguardian.com/books/2013/aug/18/default-line-extract-faisal-islam-housing
We are now about to hit seasonal slow down, all the double bubblers will be on a rampage, see prices are falling, laughingcon may even make an appearance, my gut says the idiot bought a condo.
But I will be here, so long as I stay healthy to tell you.
Relax spring market around the corner, now if these price gains continue, over the fall not likely, but if they do.
That’s when I would call, fat lady your up next.
#6 T.O. Bubble Boy on 08.20.13 at 8:48 pm
“USD back above $1.04 CDN… will it hit $1.06 like it did in July?”.
====================================
Not only will it hit $1.06, It will be heading down to 0.80 cents within the next 18 months. After that, who the hell knows. :-)
the initial comment is correct.
Since 2008, prices have gone up on average 50% in GTA. To get back to that level prices have to go down at least 30%!!! and that will not happen in TO and GTA unless there is an economic shock!
The average house price in the GTA at the beginning of 2008 was $393,747. It is currently $494,617. That is a 25.6% difference, well within the scope of a correction. — Garth
#23 takla
Are these the “hi end rental units” in your neighbourhood? http://www.circaresidences.com/
First Capital Realty owns the mall beside the development. I don’t remember if there was a pre-sale or if it was FCR’s original intention to be the landlord. $1350/month for one bedroom is robbery in Richmond. There is no way stainless steel appliances and quartz countertops (what, not granite?) are worth the extra $400/month.
#14 tigerbaby
“perhaps the government should have created a CMHC style crown corp “Canadian Science and Technology Corporation” instead of keep on boosting the CMHC the last few years …”
—————————————————————-
They did. The National Research Council’s Industrial Research Assistance Program gives out approx. $300m a year to start up technologies. This is totally separate from govt funding to university research.
The intent is to keep IP and jobs in Canada.
Quick: How many blawg dawgs noticed that the guy holds an iPhone in his hand? :)
Take a chill pill folks …. all those condos will be inhabited. After all, they are shelter!
You can choose not to invest in stocks or bonds, but you have to invest (buy or rent) in housing. And it’s this reason that RE remains a popular investment vehicle for many. Short of a SARs type event which will hurry people out of large cities, the world is still urbanizing.
[…] via We’re different — Greater Fool – Authored by Garth Turner – The Troubled Future of Real Esta…. […]
and btw, liv Smoking Man alown. He no’s what hiz toking aboot. Me hiz fan two. Fan numba twonee, SM?
My friend who owns 5 condos in Calgary/Kelowna regularly runs calculations to himself on what these will be worth in 20 years and how much he is going to cash in for retirement.
Right now he is assuming each will appreciate $50,000 over the next 20 years.
#31 gladiator
….. probably why he can only afford the DIY bra for the man boobs.
GTA strata unit prices have probably run up too fast too quickly relative to SFDs.
Average GTA condos are priced at 53% of SFDs and strata townhouses are priced at a very high 62% of single family detached houses. Chart: http://www.chpc.biz/toronto_chart.html
Whereas in the manic epicenter of Canadian real estate, Vancouver, ratios are condo only 40% and townhouse only 50% of SFDs. Chart: http://www.chpc.biz/vancouver_chart.html
And in Calgary where earnings are much higher than the rest of Canada condos and townhouse price ratios are similar to GTA, 58% and 62% of SFDs. Chart: http://www.chpc.biz/calgary_chart.html
But hey… earnings in AB are 20% higher than ON and 26% above BC. Chart: http://www.chpc.biz/earnings.html
#32 Young & Foolish
Guess you don’t get out much or read much. Ireland, Spain, China, and the U.S. (could go on… U.A.E. etc) have a lot of empty houses/housing units.
talk is cheap Garth, so why don’t you built 100 more towers and sell then at half price?
until then, is easy to sell dreams to the unsuspecting. obviously prices are unjustificably high – but unless someone DOES something (build build build) all of those talkers will have to showel their zero value currency in high amounts. Saw gold spiking back today? watch it going to 1500 soon
@DayStar/#22
#7 bigrider
Is this the same Italy?
http://euro-banks.com/real-estate-europe/
FatFinger truncated…
“The signs of U.S. recovery are everywhere…”…
Nope.
In the interests of concision I’ll be succinct…
Following extensive, if methodologically unsound, FieldWork… Here and there you will encounter pockets of affluence… contextualized by swathes of despair.
It’s a very mixed picture…
It’s certainly not EisenhowerPlenitude.
re#30…nope not my project,but i see this as a trend going foreward as these newest condo buildings comeing online will be very difficult sells unless drastic price reductions are utilized.I seen it in vancouver in 08 with ONNI projects with extensive radio ad’s and marketing along with up to 35-40 % price adjustments.If you cant sell em rent em
WARNING: For those who purchased a GTA presale condo from 2010 forward, don't look at this chart.
#25 Catalyst
Condos definitely are in for some trouble over the next 2-3 years but I am starting to think detached and semis will be just fine
Nope. Read here: Condo market dip could have ripple effect
"Any correction in condominium prices could spread to other segments of the housing market as buyers and sellers adjust their expectations,"
There it is… the most important word to every central banker in the world: expectations. This is precisely what the difference between resale and new homes indicates, like a grand survey of confidence (not like BMO surveys with 1000 respondents), the spread or the basis tells you where Greater Torontonians think prices are heading, and that direction is now down.
At least Madini's radar sensed what was reported on this blog many months ago: that you can't have crashing volume and rising or moderating prices without something major happening next, as seen here for condos for anyone who's technically inclined to forward markets, knowing full well what happens to resale spot after future prices crash.
But forget the stats. We don't have statistical problems. We have a reporting, disclosure and the big mother of all problems, widespread fraud. That comes later, I promise.
The game now is how long developers can remain solvent with diminishing cash flow and whatever deposits they retained from defaulting speculators (which was intended) before the market implodes and all is exposed.
When that happens is anybody's guess in a country where most, if not all, MSM and regulators are paid to look the other way.
More than 250 condo towers are being built in the GTA (the most anywhere in the world)
I appreciate and enjoy this blog, but this assertion is way off the mark. Go to the new suburbs of any B class city in China (Changchun, Tianjin, Harbin etc.) and 250 condo towers are under construction within an hour’s walking distance.
A Chinese suburban block can easily have 50 condos under construction. I have sent a photo I snapped of a new development across from where my wife and I live when we are in China. The development in the photo is only a tiny drop in the bucket of the massive building happening in every city.
Fifty condo towers being built in one block? Show us. — Garth
#43 Nemesis
Perhaps both U.S. recovery and U.S. income inequality could be growing? This would account for your subjective observations regarding pockets of despair?
#33 young & foolish
You’re right. We all have to spend money on shelter (except for those who live rent-free with family, because of a caregiving arrangement or something else). So what’s wrong with finding the smartest way to spend that money? Did you read the article (posted by someone else) about the poor 55-year-old whose mortgage is pushing her into bankruptcy?
Everybody’s different. Just because buying real estate enriches your bottom line (and I hope it does, or why would you be posting this?) doesn’t mean it does the same for everybody.
The housing bubble is over. *POP* That’s it.
The feds don’t need it anymore to support the economy. Now that the US is recovering, manufacturing and exports can take over. That’s why the feds are deflating it. Thank you to to all the greater fools who bought during the last four years; you really helped your country out in a time of need… suckers
#134 Milla on 08.20.13 at 10:51 pm
Good for you!
Global citizens with STEM education and ability to adapt to new cultures/languages will rule!
#43 Nemesis on 08.20.13 at 11:04 pm
Granted, not everyone owns oil and gas shale and basin plays, not everyone owns the DOW (now at 15000, I might add) and not everyone owns houses (which are respectfully bouncing back), but some folks do! And they are doing all the better for it!! And my well made point is simply, it was predictable!!!
The market place saw this slow moving train pulling up to the station years ago, our dummy leaders didn’t and its a tell all, truly. It smacks of the vision of the dodo bird (or politicians easily bought).
#7 Bigrider
“Because except for Italy, there simply is no greater concentration of Italians anywhere in the world.”
—————————————————————
Hey, regardless of what I might say otherwise to any of your posts, I have to take my hat off to the Italian tradesmen that agreed to come out of retirement in order to work on the interior (especially the plasterwork) of the opera house in Toronto. Salute!
Calgary is not doing well – however it is a short term blip in re pricing as those drowned rats from mission / boness and elbow river areas find places to live.
Major energy companies are not seeing the future as rosy. The Edmonton mod yard that build a lot of the infasturcture for the oil sands are empty – drive by any of them.
@#5 JSS get a variable mortgage and pay it off as fast as you can. Variable is based on BOC. They won’t raise rates too quick. History has shown variable has been better than fixed. More importantly seek some advice from people you trust.
I’m patiently waiting for Vancouver house prices to go down for the past 2 years. Have a baby and married in the meantime. Ive been renting for 2 years now, but I’m getting very itchy to buy a house. I want to settle into something and paint the walls.
I started to go to my client’s site each day.
There is so much Keynesian economics at work.
Lots of infrastructure projects to ensure roads are built and schools are built.
Meanwhile, other schools are closed and streets have pot holes.
I believe in Keynesian economics but I have my limits.
All I see is aging boomers holding stop or slowdown signs and monster trucks destroying farmland or watersheds.
Such a shame that Canada is building but not producing.
We shall all feel its wrath.
@DT/93 {PriorThread}
Yep. Accordingly, you have earned an EasterEgg:
http://youtu.be/u5HOt0ZOcYk
@Marginal/#47
FirstThingsFirst: Subjective. Yes, admittedly. Sometimes highly so. Consider it a prior OccupationalHazard, albeit reasonably tempered by some fairly HighLevel tutoring in Epistemology [although personally, I’ve always preferred Aesthetics]. Apart from that, it was “pockets ‘o affluence… and swathes of despair”… Words are important, ya know!
I’m still processing it all, actually… and have drawn no definitive conclusions. That said… and as regards the remainder of your query/hypothesis…
Make that a, “Yep/Redux”.
The GiniCoefficient – much like the Federation of American Scientists’ DoomsDayClock – is nearing MidNight, so to speak. Some of us call it the AnomicStrainMeter.
Right now, all I can say is… “We’ll see.”
NoteToGT: Just this once… and strictly between the two of us; CIBC may be having ‘a spot of bother’… Everybody knows about VISA/AeroPlan. But the real problem is outsourced CRM. “Hemorrhaging” describes it nicely.
Higher rates bring lower prices. Always. Write that down.
Garth we bought a house in North Van in 1978 for 62,000 dollars. Intrest rates were 10.5%. Three years later the house was assessed at 120,000 and intrest rates were at 18%.
Higher rates bring lower prices. Always. Write that down.
Hmm… any comment Garth.
Sure, assessed value is not market value. — Garth
#33 — you aptly named yourself!
Bulls quote one “not so bad” month, I quote the last 12 months. July wasn’t as bad as 2012, but it was nowhere near the ten year average, I guess that qualifies as a recovery these days.
Nemesis,
The bet seems to be “can a society which generates 60-70% of GDP from consumer spending be affluent if the bottom 60% aren’t affluent?” The answer seems to depend on the definitions for ‘society’ and for ‘consumer spending.’ Bank fees and interest, car payments and fuel, and mortgage payments and rents and health care are the must-pays of all but the bottom 5-10%. those in the 60-90th percentile are and have remained pretty comfortable, even if they haven’t shared the gains which have accrued to the topmost of late.
There are definitely two Americas — the one that one spends most of the time driving through when visiting, and a combination of a series of much smaller enclaves plus the financial statements of nearly all but the smallest of America’s public companies. One can’t confuse the two when investing, and must analyze the likely future actions of both.
Forget houses and condos – for a cool $100k, I wanna get me one of these!
http://martinjetpack.com/
Investors group acquires Olympic Village apartments
http://www.theglobeandmail.com/news/british-columbia/investors-group-acquires-olympic-village-apartments/article13864833/
A large Canadian investment group has bought the dozens of market rental apartments at the Olympic Village site for about $350,000 a unit.
The name of the buyer was kept out of recent court documents filed by the receiver managing the City of Vancouver-owned property. However, The Globe and Mail received confirmation that the purchaser is a fund operated by Bentall Kennedy, a real-estate advising and investment managing company.
“This is our first multifamily rental investment,” said Malcolm Leitch, chief operating officer for investment management at Bentall. Mr. Leitch is listed as the only director of the limited company that was formed in July by Bentall to take ownership of the property, BK Prime False Creek Residences Holdings Ltd. “This is in our view one of the top rental projects in the city. And we’re very happy with [the price].”
That sale of the 119 units will reduce the City of Vancouver’s leftover debt from the Olympic Village financial mess by $41.5-million in one swoop and get it out of at least one part of its landlord business in the development.
=================================
WTF?
Suckers.
Has It Been A Year Since You Filed For Bankruptcy? dont worry in the USofA if you filed for bankruptcy on or before jul2012 you can now get another one this truly is desperation of a ounce great empire to show a little GDP .america is a joke Garth .READ PAGE 2 of this link
http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2013/08/FHA%20Mortgagee%20Letter%202013-26.pdf
#33 young & foolish — “You can choose not to invest in stocks or bonds, but you have to invest (buy or rent) in housing. And it’s this reason that RE remains a popular investment vehicle for many. Short of a SARs type event which will hurry people out of large cities, the world is still urbanizing.”
Wow. That’s either really profound, or it’s foolish.
Let’s start with Rational Expectations: Everyone should acquire skills and choose where they want to live and work in order to maximize dynastic income (earnings + real estate appreciation, net net net) and happiness (amenities and proximity to family). Some people actually do this.
Money money money …. way too much credit chasing too few assets … result … bubbles!
Re: #8 Canadian Watchdog on 08.20.13 at 8:51 pm
You must get the same mail from Richard Bibby. Fact is more houses are listing in Markham and not selling.
Another thing to think about
An 800,000 home with zero percent down cost you about 2000 bucks in interest a month at 2.99 percent
at 3.59 it is around 2400/month increase of 24%
at 3.79 its is arount 2525 /month increase ofaround26%
===>
Now lets say a couple goes to the bank and says they can only afford 2000/month in interest + principal
– they can get a loan for 800,000
With the interest increased to 3.58% they can only get a loan for 668,523 (that means housing will automatically drop 131,477 or approxiately 15%
at 3.79 % they can only afford 633245 a decrease of 35K.
That is the affects of the basic interest rate increase. Add tightening of lending standard, less supply of loan/mortgages and you have a perfect storm. It will not hit you right away. But during renewal and a constant decrease to demoralize sellers and putting buyers on the fence and you have the 1980’s all over again.
And the market will force interest rate back to 6 to 9 percent. And a possibility of 10 to 14%.
“The average house price in the GTA at the beginning of 2008 was $393,747. It is currently $494,617. That is a 25.6% difference, well within the scope of a correction. — Garth”
If detached homes in the TO correct only by 5-10% the suburbs and condos will go down 50% to fulfill this realistic expectation of average correction in GTA. Care to time it Garth? Would you agree with my estimate of 2016-18 being the bottom years?
see great post from Martin Armstrong
http://armstrongeconomics.com/2013/08/18/money-had-never-been-tangible-period-if-you-do-not-understand-what-money-is-you-will-lose-your-shirt-more/
#33 young & foolish
That’s pretty dumb. Foolish even, yes? That’s like saying you have to invest in food.
In fact, no one NEEDs to invest in anything. Including real estate. We all need to live somewhere, just like we need to eat. That’s called an expense, something you want to minimize.
BTW, are you also investing in food? Own your own farm? Grow your own carrots, apples? Raise your own chickens and milk your own cows? Or do you rent from Safeway, throwing your money away?
There are many ways to invest into real estate. You do not need to live in your investments, in fact it is highly inadvisable to do so. Treating homes like investments (and savings accounts, and ATMS, and credit cards, and retirement plans) is what got us into this trouble.
#29 kenken on 08.20.13 at 10:08 pm
the initial comment is correct.
Since 2008, prices have gone up on average 50% in GTA. To get back to that level prices have to go down at least 30%!!! and that will not happen in TO and GTA unless there is an economic shock!
The average house price in the GTA at the beginning of 2008 was $393,747. It is currently $494,617. That is a 25.6% difference, well within the scope of a correction. — Garth
————————————–
A lot of the prices I have been observing are slowly dropping back to 2008 levels. I expect them to go much further.
Garth you just said;
The average house price in the GTA at the beginning of 2008 was $393,747. It is currently $494,617. That is a 25.6% difference, well within the scope of a correction. — Garth
Yet back in the Blog called – FACTS
You said;
The average house price in the GTA in May was $542,174. In June it was $531,374. In July it was $513,246. See what I mean? The trending is down, not up.
Be careful what you are told, and what you believe.
Be more careful of what others believe. For therein true risk lies
===================================
So which is it?
News flash for you: prices fluctuate. I always use the most current stat. — Garth
#54 Finally
Baby doesn’t know or care if the crib is in a rental.
But your child will be affected if you have a long commute because you can’t afford to buy near your workplace.
If you have to work overtime/two jobs to afford the mortgage +taxes + maintenance. If baby’s parents squabble because the’re tired and money is tight.
Buying real estate in Vancouver area at this point is like financial jail – for 25 years. It’s priced so high that you’re not going to be able to adequately fund your RRSP’s or TFSA or a child’s education fund. You will forgo great travel vacations, better bikes, cars and clothes and other stuff. All so that you can paint?
Prices in Vancouver are way, way overdue for a drop. (BTW a major earthquake is overdue too, but that’s another story.) What happens if prices drop just 15% next year, when your house was purchased with 5% down? That’s right, you can’t afford to sell, unless you can fork over the difference in cash to the bank. Trapped like a rat on a sinking ship. Hope you have a guaranteed job for 25 years.
Don’t go from “frustrated with prices” to an owner that is “scared S#!tless that prices will fall”.
#17 Canadian Watchdog on 08.20.13 at 9:28 pm
#4 Sparky55
Nova Scotia Realtors Association decided to block the sold prices until the property closes.
——————————–
Wondering why? Look here
That’s what happens when you give too much information and don’t conceal price history from buyers. I guess good data does matter after all.
——————————-
Thanks for the chart! I’m surprised it’s not worse.
Living here, there is a lot of local effects, namely a weak economy, and speculation that is dying out from a massive ship building contract that at best might be a small fraction of its original size.
@#58 Paddler44
“…Garth we bought a house in North Van in 1978 for 62,000 dollars. Intrest rates were 10.5%. Three years later the house was assessed at 120,000 and intrest rates were at 18%…..”
++++++++++++++++++++++++++++++++++++
Ok , so it was assessed at 120 k in 1981 when interest rates were sitting at 18%.
As I recall the big crunch came in 1982 when the rates were STILL at 18% and a house I was renting dropped in assessed value from 240k to 80k.
I had co workers at that time declaring bankruptcy. Some of those same people are in the EXACT same boat 31 years later.
Fools dont learn.
There seems to be a concept many people are missing.
50% up, is only 33.3% down to reach the same initial value….
So a house going from $500,000 to $700,000 gained 40%
To get back down to $500,000, it only has to drop 28%
Then add in inflation effects (even only a few years worth, as per below), and that same house may only need to drop 22 – 25% to be worth the same initial value.
In my area, it is looking like a drop of 30% or more is not out of the question, especially condos and above average houses which are already taking a beating for the most part.
To emphasize this concept more, a house that doubled in value, say $500,000 to $1,000,000 gained 100%
To fall back to it’s $500,000 level, it only has to fall 50%. Add in inflation, and it’s likely in the 40-45% range…
Percents are funny that way.
Garth,
Just wondering, couple of days ago you mentioned in your blog post that a magazine interviewed you for your view on the current housing market and you shared your comments with us. You also mentioned that they interviewed other RE benefactor i.e. Lamb and you mentioned you would share with us what he had to say. Just wondering if you can share that with us as well? I think it will be quite amusing to hear that he has to say … Thanks Garth.
As soon as it is published, will do. — Garth
#29
“The average house price in the GTA at the beginning of 2008 was $393,747. It is currently $494,617. That is a 25.6% difference, well within the scope of a correction. — Garth”
I have TREB figures (whatever was reported on a monthly basis) below
Jan-09 343,632
Jan-10 409,058 19%
Jan-11 425,762 24%
Jan-12 463,267 35%
Jan-13 482,648 40%
May-13 542,174 58%
the lowest figure for GTA was actually in Jan09 and the peak is in May13. For seasonality reasons, i am comparing the Jan figures from 09-13
My quoted figures are also from TREB. The current average is $494,617. — Garth
I noticed Garth often takes pictures from reddit.com.
He’s up with the times.
I live in Markham and watch the market as I am renting ( I sold in 2011). Houses are sitting for months, some have been listed since the winter. Sure, some houses move after a few months but whenever you have low listings (only one house has been listed on my street this year and it took 3 months to sell) and 10 year low sales levels, but prices stay firm it is a classic example of any bubble pending to burst. All bubbles in any asset class show the same behaviour. All is happening now is the last few people who are biting the lure, but those people are in shorter supply (as sales data shows). I have seen the HK property bust in 2007, I have seen the property bust (through my father) in Canada in the late 1980s/early 90s. I was in banking during the dot come and credit crisis in 2006. When markets become illiquid after a big run up, its a sign of big trouble. I remember sitting on a plane from Atlanta talking to a guy from the South around 2005 and he told me the property market was in terrible shape, houses sitting forever. I was surprised as if you read the papers everything seemed booming. Then 2006 came and cracks starting to show, then a full force financial crisis. Guys, the avg CDN has 165% debt to income ratio. One of the highest in the world ( higher than in the US when it burst), and the history of Canada. It is not sustainable.
The fools are those who missed their chance to buy in 2008. Prices will never go back to those levels. It’s different now.
It’s not different. Just that the correction won’t be big enough. A crash is pretty much a forgone idea. Be realistic. If you want 4 bed detach for 600K in rosedale with all the upgrades…dream on.
Also, I suspect one of the reasons why there are so few listings is many people have taken huge credit lines off their property. I know one guy who house has risen in doubled in value the last 5 years, but through years of accepting credit lines, his equity in that house is just a sliver. If house prices corrected 10-15%, he would owe the bank money. He knows he should sell, but emotionally its tough when you have built a lifestyle on that credit line. When I run around Markham I see older retired people with brand new porches or 2-3 brand new top end cars in the drive way. Something just smells wrong. I don’t know how many times I have received calls from the bank about a credit line. My dad played the property market in the 1980s, and made money at first, but then got burned. However, those days interest rates were 10% plus and you really had to kiss the bank managers behind to get credit. So only speculators got hurt. These days it seems anyone with a pulse can walk out with a mortgage approval and credit lines, all done over the phone or internet. I think there will be huge social implications down the road where we have tons of people who should never have bought or understand basic finance bonded to debt for most of their prime years of life.
@#75 CrowdedElevatorfartz
I know that assessment is not market value. Even if you knocked off 50 or 60% of the assessment the value would still be higher then 3 years prior to that and intrest rates were almost double.
My point was about what Garth said “Higher rates bring lower prices”
We had a neighbours too that got into financial problems, not because of the house price, because their payments almost doubled when they renewed.
Yam: I remember sitting on a plane from Atlanta talking to a guy from the South around 2005 and he told me the property market was in terrible shape, houses sitting forever. I was surprised as if you read the papers everything seemed booming. Then 2006 came and cracks starting to show, then a full force financial crisis.
yep
#63 Donald Trump: “A large Canadian investment group has bought the dozens of market rental apartments at the Olympic Village site for about $350,000 a unit.”
********************************
Investors Group bought them all? Global TV forgot to mention that last night…..
#4 Sparky55 on 08.20.13 at 8:46 pm
Very interesting Sparky- it is a bit of a pain in terms of knowing sooner rather than later, however, get this:
A realtor friend (nearly 30 years in the business) said recently that many, many deals are not closing because people either cannot get financing, or chicken out and walk.
Another realtor acquaintance said that they had sold a property we had had a peek at, but that the buyer eventually bailed and the sellers and he “let him go”. If I were in the banking business, I’d be checking the fiscal health and long-term employment prospects of ALL prospective buyers with a fine-toothed comb- without exception.
My take is that RE associations are loathe to post sold stats because the process is now more precarious than ever.
Canadian Watchdog “But forget the stats. We don’t have statistical problems. We have a reporting, disclosure and the big mother of all problems, widespread fraud. That comes later, I promise.
The game now is how long developers can remain solvent with diminishing cash flow and whatever deposits they retained from defaulting speculators (which was intended) before the market implodes and all is exposed.”
-Chilling post CW! Keep ’em coming, I love what you bring to this forum.
-Yam, that Atlanta story brings me to thinking about the crash in building permits in Calgary, T.O., and Van. Builders know what’s what.
-Berniebee, your post couldn’t be more true, but the hormones of most new mothers trump all reason and logic. Let’s hope for her sake she takes a painting class instead.
#73 Berniebee
Thank you Bernie, you make alot of sense. I know the dangers and I’ve been preaching them to anyone that would listen to me the past few years. I plan to put down at least 30% downpayment so I have some $ saved. I will wait until early 2014 and start getting itchy again.
I even made a bet on Sept 2011 with my 2 brothers that prices would fall 15% by Sept 2013. I don’t think it will, so I’ve lost 2 pairs of canucks tickets, but canucks are going downhill anyways so the sting is alot less.
Garth, I believe the quote was “the U.S. will start dialing back it’s stimulus spending program”…
Nope, it won’t. The U.S. economy is one sick puppy and burger flipping and coffee sloshing is never going to restore it to it’s former glory, the free shit army is in control now so expect things to deteriorate further, not improve…
The central bank life support injections will continue…
Of course they will, but diminshed over time. It’s called ‘tapering.’ — Garth
[…] We're different […]
Another hazard ahead sign for our economy:
http://www.thestar.com/business/personal_finance/2013/08/20/crossborder_shopping_lure_still_strong_for_canadians_report_shows.html
The report notes a dramatic decline in Americans coming this way to shop, perhaps a sign of the “two America’s” that create disagreement here when one talks of the strength of that economy. Traffic that used to be equal both ways is now about 3:1 in favour of Canadians going to the U.S..
Part of this is also being fuelled by government cutbacks in Canadian Border Services labour costs, a little more neocon ideology to fuel the fire:
http://www.huffingtonpost.ca/2013/08/06/cross-border-shopping-cbsa_n_3714098.html
It stands to reason that our 70% home-owning populace with their 165% debt and maxed out credit and HELOCs are increasingly travelling across the border for staples, not vacations. It’s kind of like yet another line of credit. Could get much more painful in a hurry if our dollar drops.
Prices are not dropping. Have you seen Markham? Houses are staying on the market for a little longer but are ALL going over asking price to the tune of 5-10%. 2008 was the best time to buy. We will never see those prices again. Do you delete my comments because they don’t fall in to your agenda of tricking “greater fools” who read your blog. The fools are those who missed their chance to buy in 2008. Prices will never go back to those levels. It’s different now. – Blog comment, posted Tuesday.
It looks like operation stonewall to me Garth.
That means resistance to letting prices fall on the part of vendors and realtors. Just got to starve them out.
The smart real estate investor would use this opportunity to average down and buy more on the dip.
Gee, that worked well in the US in 2006, didn’t it? — Garth
#86 Daisy Mae on 08.21.13 at 10:05 am
I realize some firms have a knee- jerk reaction to buying something at “X” cents on the dollar…but what are these people thinking? I foresee the OV as an overrated dog with lots of maintenance costs given its enviro friendly design.
Secondly…of course the RE data will show that condo sales jumped (woo-hoo) as a result of this fire-sale.
The housing boom in Canada is over. A significant number of buyers in the last couple of years have been construction workers. As these people get laid off, the hit to housing sales will be apparent. Fundamentals are finally beginning to win out over emotion. What remains to be seen now is how overbuilt we really are. Based on household formation, it looks like at least 250,000 too many homes and growing………
westernman :
the U.S. economy is performing better than any other major economy in the world right now. Your village is looking for you right now……they are missing their idiot……..
#52 Marginal on 08.21.13 at 12:00 am
it is always a pleasure to watch master craftmen work.
I fondly remember watching the masons at ‘quadra stone’ split a multi ton chunk of granite into smaller pieces suitable for a nice stone wall or stairs or…
the master mason would give his instructions [in italian] and the journeymen would set to work with a will.
kind of like this guy but a bit bigger scale…
http://www.youtube.com/watch?v=cBMcMGBhUVk
It may be a “Tale of Two Markets” in the GTA (Today’s National Post) but here in Sunny Vancouver we still have only a single faltering market that stinks uniformly everywhere.
And there’s isn’t nearly enough Italians living here to save the day.
This Real Estate market in Toronto reminds me of a horror movie that I watched last night. There was a car stalled on the tracks, and the train was coming, and could hear the engineer breaking with a screeching sound. The train kept moving with sparks flying, and the driver kept trying to start his car as a greater fool, as he could have jumped out in time. Then the movie went into slow motion and oh the horror of it all, and then I knew there really exists a Heart of Darkness.
#94 brilliant investment advisor on 08.21.13 at 11:13 am
The smart real estate investor would use this opportunity to average down and buy more on the dip.
Gee, that worked well in the US in 2006, didn’t it? — Garth
What Dip? WTF? Are you 6 years old? Smart Real Estate Investor has long time ago diversified to places like USA, Chile, Paraguay, southern Asia etc., bought productive land and commercial RE. And is sniffing out deals in places where “blood” is or will soon be on the streets (PIIGS, egypt ), for that is when you buy houses.
Condominium prices falling while low-rise homes continue to soar
Good thing MSM is finally starting to catch on, but have yet to put two and two together as to why condos are falling while SFHs are moderating. There are numerous reasons. But here's one in particular that is not available in any data, while it was recommended to disclose by the FSB (before Carney). Link 1 Link 2
Flaherty the Austerian says he wants fiscal flexibility in case of a crisis, apparently forgetting Flaherty the GST cutter contributed greatly to deficits. “The danger in the longer term, to me, is inflation.”
Gads this guy looks weak at this press conference! Confidence! Canadians can sell anything we can produce, to the world, in Canadian dollars!
It’s always a good time to buy low and sell hi……you heard it from me first.
Some comments on VCI re OV condo sale:
http://vancouvercondo.info/2013/08/olympic-village-sold.html
YVR Says:
If I recall the city turned a bunch of units into rental units back in 2011 because they couldn’t sell them at the time (for the asking price). Now they sell them after turning them into rentals for $350K each. The big problem here is had they lowered the price back in 2011 they could have easily sold them for significantly more than the average price of $350K each. In addition to getting more money they would not have had these units bleeding money for the past few years. Just another buggled part of the project which adds to the City losses.
On a side note it shows that if you must invest in real estate buying a REIT is going to get you much better value than going out and buying a mom and pop rental. Mom and pop would have paid 500K to 700K each for these places (and many did pay).
===================================
Randy Randerson Says:
August 21st, 2013 at 7:32 am 4
I wonder how much rent they would charge for those rental units. Using the rule of Price/Rent ratio lower than 15, monthly rent for one of these units would have to be higher than $1944 a month in order to make sense investment-wise.
Seems like the rent will still be a little bit higher than the surrounding areas and downtown.
======================
@#2 YVR
I would be skeptical of REITs. People have been dumping huge amounts of capital into them which they use to buy more property driving up the price of commercial RE. No different than Canadians bidding up residential RE, just on a bigger scale with other people’s money.
Take your money and run. Once free money stops flowing REITs will be in just as much trouble if not more than RE.
There is no evidence I have seen that REIT funds have inflated commercial real estate values. Those properties are bought for cash flow. — Garth
There was a trick we used years ago to clear out a mortgage with a bank that was closed and no big breakup fees had to be paid. I am not suggesting you try this unless you know what you are doing, unless under special circumstances. We forced a Power of Sale by the vendor with a new mortgage in place to close quickly in a day or two. This works well if the closed mortgage is at a higher rate than the market rate to hoop the banks, so keep this in mind for another day.
@Yam
The janitor in my office building was telling me that he put his house in Vaughan up for sale. He bought it for $550ish and is asking $770. He’s received offers of $750, but isn’t selling. I asked him why doesn’t he just sell and lock in his gains, and he looks at me and says that most of the money has been spent already through a second mortgage and lines of credit. He wants to keep some of the proceeds as he bought a townhouse that is under construction and he needs to use that as a down payment.
Look at you people. Talking all big about real estate investing and buying more real estate on a dip. Diversifying into exotic real estate markets in military coups and wars.
And here i am coming to this blog everyday to gain knowledge so that i can make an informed decision to make the biggest purchase of my life ( once).
What was the purpose of this blog again?
To irritate you. How we doing? — Garth
Garth is right to point out the fact that over 5,000 places are listed in the Greater Vancouver area at 1+ million.
These places aren’t moving as they’re chasing too few qualified buyers. Sellers of these homes are in a bind as the fake hot money price appreciation has priced out the local home-grown buyer due to Flaherty’s and CHMC concerted efforts to curb prices. Done, not coming back.
What’s selling is multi-residential or anything the home-grown buyer can still afford and wants to be owning as opposed to be renting.
US reporting an increase in real estate sales while mortgage apps are flat or in the case of new mortgages, going down sharply. Cash buyers. Funds and investors looking for places to park money. Rental income is steady. Not all will be successful.
Bentall/Kennedy bought over 40 million worth of units at the False Creek Olympic Village at avg. 350k per unit. They will make some money on that, you betcha.
As for the 5,000 more or less motivated (who cares, really?) sellers of 1+ million Dollar listings in Greater Vancouver. You’re screwed.
To irritate you. How we doing? — Garth
—————————————
It doesn’t irritate me, it makes me bang my head against a wall, pull my hairs off and burn my house. Oh wait i can’t burn my house, its already burnt due to constant riots in Egypt.
Emerging markets are taking on the chin, stocks and currencies.
Didn’t this blog recommend emerging markets just a short while ago?
All those US treasuries are heading back to sender, don’t bet against the FED, right?
Emerging markets are, duh, emerging. Smart investors buy a risk-adjusted weighting for long-term growth. It appears that excludes you. — Garth
So garth, what do u think your proclaimed from the hilltop us economic renaissance has to do with this?
President Barack Obama held a special, closed door meeting with the heads of the U.S. government’s financial, monetary and oversight agencies including tbtf banks…
who said I own any emerging markets?
But given their dive, how is your risk weighting being readjusted?
What a comedian. Chasing markets. Great strategy. — Garth
#55 Finally
You can always ask the landlord if you can paint. Or not, and do it anyways. If you insist on pink and purple walls, you’ll probably have to paint them back when you move out. But guess what. If you have pink and purple walls in your house or condo, what kind offers will you receive when it is time to sell? If your realtor cares even one bit, he will tell you to repaint to ‘neutral’ colors before listing and taking photos. Because repainting while you’re still living there with all your stuff laying around is so much fun.
Higher rates bring lower home prices… But lower home prices bring higher rent returns.
What is the balanced point between renting and buying? Does it make sense to rent a 3 bedroom Townhouse for $1400/m asking $350,000 today or $1000/m for a 2 bedroom condo asking $250,000? We’re talking suburban areas of course… an hour public transit to downtown core. Thru not everyone works downtown. $60,000 single or duo income households can afford that condo. Thru you should have 20% down payments if you want to play the real estate game. Buy a detached home when you had build-up 200K equity, after 10-15 years of owning.
#109 Screwed
They sure will. Their neighbours who bought for 550, not so much.
Redirection via ad hominem, come on, can’t you handle such simple questions?
#115 Mike in Surrey
TH are a money pit. Never buy them unless it’s maybe the place where you’re going to die. Factor in the cost of strata which is never ever going down as well as the risk of leaks or other major repairs over the years.
Buy a cheap box further East and commute the extra 30 minutes. Mission is on the Westcoast Express line and has 5 trains going in/out to Vancouver in about an hours time. Downtown to downtown. Owning in a box in Mission from 250k & up. No sleepless nights, no headaches. Mission is non GVRD as well which keeps the cost of living down.
The traffic alone in Surrey is a reason enough to get out as quick as possible. Not to mention various festivals of a certain local flavor. Let the folks who build around their temples have at it. You’ll never be able to compete with that either financially or politically.
#107 gemdlr3 on 08.21.13 at 1:20 pm
@Yam
The janitor in my office building was telling me that he put his house in Vaughan up for sale. He bought it for $550ish and is asking $770. He’s received offers of $750, but isn’t selling. I asked him why doesn’t he just sell and lock in his gains, and he looks at me and says that most of the money has been spent already through a second mortgage and lines of credit. He wants to keep some of the proceeds as he bought a townhouse that is under construction and he needs to use that as a down payment.
———————–
Wow.
I’m sure he’s not the only one in a similar situation either. It’s gonna get ugly……
I need to bring you all up to date with my home service haircut from a woman who actually had years of experience and a real license in place that charged me $23.00 cash, but no service taxation? It was a part-time business to serve seniors, as was the best haircut that I ever had in my life, and she spent an hour in my kitchen talking her head off. Now when I phoned her said do not call me ahead of time, as have the phone beside the TV, and the computer on and will never hear the buzz.
She said my son is a booster and has a warehouse filled with stuff, and will bring you something when we meet, as your worries will be over. So she threw a Philips product down in the kitchen that could hook into the line to turn the buzz into a ring, and said how much; she said for you $5.00 in cash. Now that is service, as there is hope for us all, as some of these part-time jobs have benefits for us all.
While we know $2 million buys you a dilapidated semi in Toronto, take a look at what it buys you in Atlanta:
http://www.nydailynews.com/life-style/real-estate/ex-mlb-pitcher-tom-glavine-lists-atlanta-home-2m-article-1.1427730
Note that this is a really, really nice area, not the middle of the countryside. I’ve been there and it’s great.
Also interesting is that a $2 million home is being sold by a multi-millionaire athlete. In Toronto, even the middle class is buying $2 million homes.
Form man @ # 96,
You’re such a sheeple, if Garth says something you yip and yap right along with it – like the classroom sneek trying to curry favour with the teacher… if Garth said the sun was going to rise in the West and set in the East you would merrily agree…
Besides, what on Earth would you know about the U.S. sitting somewhere in B.C., swilling beer,watching CBC propaganda and waiting for your next social assistance check to arrive…
@107 gemdlr3:
Wow, I can’t afford a house with my almost 100k before-tax income, unless I put my family in dire financial straits.
How much are janitors earning these days?
I am not getting something here…
Hey Garth,
Have you read this report on the Canadian housing market?
http://www.cansofunds.com/wp-content/uploads/2013/07/Canso-Px-The-Canadian-Housing-Market-July-2013-Revised-2.pdf
Yes. It was referenced here when it was published. — Garth
#118 Screwed. By a “box” I assume your referring to a condo. I would not pay $250 for a condo in Mission… maybe in New West but going that far out I’d expect to find a condo for under $200.000 otherwise not worth it.
#64 angela – you and a few other American bashers who post on this blog tend to use any negative article you come across to make the point you want so badly to make but you probably don’t know or care if the source is reliable or not. We all know that there are many, many detractors, including the opposition party, who will say or publish anything negative about the present economic situation in the US if it has a modicum of truth and sometimes even without it, in order to put the government down. It makes good reading if that is what you want to read and believe and get your two bits worth posted on this blog. My suggestion to you is to get your own house in order because there are a lot of problems in Canada and the way this country is run. I hope we can agree on that!
Form Man #96 – great closing comment!
Few people in the GTA care about investing in the financial markets and in fact look for every excuse to sell out of financial market investments ,whether they are ‘up’ or ‘down’.
However, plenty of brick licking, house humping, granite grinding, stone front stroking, copper roof rumping and of course, tomato sauce making to go around.
Why do you bother making the same, unsupported, anecdotal statement every day? — Garth
What's wrong with this picture?
So the city of Vancouver sold of some of its rental condos in the Olympic village, a move reported to reduce the city’s exposure to the Olympic Village boondoggle by $41 Million.
Can anyone recall the value of the debt? The remaining value after this $41M has been applied? Strangely it’s missing from most news articles on the subject.
Mr. Turner – another breadcrumb on the trail to guide the RE crazed masses:
“Federal finance Minister Jim Flaherty said today he is satisfied with the measures his government has already taken to calm the housing market and has “no plans” to intervene any further.
Flaherty said the government watches the housing and condo market closely, and noted that in the last five years, he has taken steps, including changes to mortgage lending rules, to deal with a hot housing market. But, he said, “there are no plans presently to intervene further.”
Flaherty was asked about the housing market and a range of other issues when he spoke to reporters Wednesday ahead of his annual summer policy retreat in Wakefield, Que., across the river from Ottawa”.
Oh Wait, here is is:
City officials say they intend to halt plans to rent out the units and sell them instead. Officials say they are still owed $758 million for the failed Olympic Village project built by Millennium, and once they sell off all the units, they still expect to lose $40 million to $50 million in the deal.
http://www.cbc.ca/news/canada/british-columbia/story/2011/04/08/bc-olympic-village.html
Getting worse ….. but hey, they have a $700M hockey arena coming.
Abandoned Dogs Roam Detroit in Packs as Humans Dwindle
http://www.bloomberg.com/news/2013-08-21/abandoned-dogs-roam-detroit-in-packs-as-humans-dwindle.html
There is no evidence I have seen that REIT funds have inflated commercial real estate values. Those properties are bought for cash flow. — Garth
==================================
Was hoping you would comment !
Don’t most REITs own entire buildings, not parts of them ?
Speaking of craters…
I had some Spanish/Italian relatives visiting me in cabbagetown this summer, and as we passed by that Great Gulf project currently being dug up at Jarvis & Dundas, my father pointed to the sign giggling and translated…”GRANDE ABISMO”!!!…making a big basin with his arms. After taking photos, these guys laughed all the way to the Eaton Centre.
If you’ve been to Spain and seen abandoned condo projects, then you know that naming a development company that may well end up with a bunch of empty holes in the ground “GREAT GULF” is just tempting fate. I mean, I couldn’t think of a better name if I was writing a parody of this mess…!
Re Olympic Village:
City is still taking a major hit…
Look in the Vancouver papers and you will see the COV selling off various properties.
In addition it is ” block busting “, attacking various established neighbourhoods with higher density proposals,(Marpole is the latest) which translates into more tax revenue via higher assessments.
Perhaps the aforementioned is a correlation to the OV debt ?
DELETED
re #120 Old Man
Mr. Man, just to make sure that we’re on the same side of the ‘fence’, you do know what the term ‘booster’ means, right? As in shoplifter? Boosting an item doesn’t always mean pointing out its advantages.
If this really is the way it sounds:
1 – Sonny shoplifts goods (a warehouse full?).
2 – Mommy fences said goods.
3 – Mommy works in an industry that allows her access into the homes of seniors, a group that is a traditional target of certain types of criminal activity.
4 – Mommy regularly comes into your home/trailer.
5 – You have a large target painted on your back.
Dude, seriously, take it from someone who spent a large portion of his life in the crime industry: Stop letting this woman into your home. If she has keys, change your locks. Find out if this ‘real license’ required a criminal record check, with a vulnerable persons rider. Protect yourself, protect your neighbours.
In case I misunderstood your comment, my apologies to you, Mommy, and Sonny, but seriously, like the boxing referee says, “Protect yourselves at all times”.
#7 bigrider
Sorry bigrider, it’s all anecdotal but I think this is one time that if you bet on Italian collectiveness, of which the future (current) offspring of landed Italians have little to do with, it’s going to be a bust. For one, I see a ton of dead branches everywhere, male and female, and the many that marry late who have no reason or motivation to be buying GTA McMansions. You’re going to have to rely on a ton of immigration and it won’t be Italians.
I personally love Italy (am a dual-citizen) but we’re not back in the old medieval agrotowns where we needed each other and were around each other for generations. We are not the same warm Italians who wear their hearts more or less on their sleeves. You will see glimmers of that here but it is fake or fleeting. We are not the same native Italians who overly care as much what others think. I think once the big chunk of immigrants that are near or at their retirement ages dies off we will be well on our way to being mangiacakes.
#122 westernman
Attacking others in grade school fashion rather than defending your position with facts simply reinforces the poverty of your argument.
Struggling against truth and common sense seems to be a habit with you. Perhaps a short vacation in your favourite province of Saskatchewan will restore some intelligence, although none of us hold out much hope.
see comment # 127
#128 Garth to Bigrider- ” why the same unsupported argument day after day.. .
Because it’s both sarcastic with more than a glimmer of truth regardless of any quantifiable proof you mention.
# 139 Spaccone- I agree 100% with what you say . Since you seem to be new you will realize I make fun of the cultural bias towards RE without any mean or inflammatory intent.
#122 and #140
And now, this blog attracts little teenage girls too.
Where else you will find such a diverse audience.
Form Man @ # 140
Your post reminds me of an old saying ” Never argue with idiots, they will just drag you down to their level and beat you with experience”
You are a perfect example of this…
@ #102 Canadian Watchdog on 08.21.13 at 12:38 pm
Condominium prices falling while low-rise homes continue to soar
Good thing MSM is finally starting to catch on, but have yet to put two and two together as to why condos are falling while SFHs are moderating. There are numerous reasons. But here’s one in particular that is not available in any data, while it was recommended to disclose by the FSB (before Carney). Link 1 Link 2
____________________________
Here’s another explanation… you can increase a house’s value significantly with renovations, but a condo is rarely reno’ed (unless it is from 10-15 years ago or more, which most are not).
So, a SFH in Toronto can easily have $200k-$300k or more in renos (far more with a tear-down), but a condo could never have such a thing.
49 renters revenge
Great comment.
More true than any realize
@#138 Harry Wilson
“….Stop letting this woman into your home. If she has keys, change your locks. Find out if this ‘real license’ required a criminal record check, with a vulnerable persons rider. Protect yourself, protect your neighbours…..”
++++++++++++++++++++++++++++++++++++
Total agreement, I wouldnt let this person in my house.
Sounds like a scammer.
@#130 Smartalox
The original debt to the City of Vancouver for the Olympic Village was aprox. $780,000,000.00
The final suites just sold to a real estate company has reduced the City’s debt to about $300,000,000.00
Can you say ‘Tax Hike”?
I knew you could
#56 Carpe Diem
Sadly, I agree with you. Canada is becoming an ugly wreck of a landscape littered with strip malls, big-box, overbuilt highways and lack of green space.
I was in Saint-Eustache today for the first time in a long time. Eeek, what a hole!
#143 westernman
Time to get off the couch and get a job westernman. I have openings right now on my Kelowna site………..you will be expected to do an honest days work though. No whining or crying. Screw up, and we will send you to one of our Saskatchewan sites. At least you will feel at home there……..
#121 bob on 08.21.13 at 2:32 pm
We really need our collective heads examined…….this and many other comparisons are enough to turn anyone’s stomach.
Much of Canadian RE reminds me of Elizabeth Taylor’s exclamation in Whose afraid of Virginia Woolf: “what….a dumpppp!”
And also “Getting angry baby?”
Mr Turner : Is the woman using Sheep shears on him?
@Ralph/DT/Marginal/DayStar, et al…
I’ve thought about this a lot… the best I can do to clarify the YanquiZeitGeist is by way of MusicalParable [together with the following associated link, which will doubtless work for the observant few, aka those familiar with HighLevelAbstractions and MidNightCoders aka SM; “We few, we happy few, we band of brothers.”]…
http://youtu.be/cOeKidp-iWo
http://www.classical-music.com/news/steinway-bought-hedge-fund-firm-512m
NoteToGT: Admittedly, I adore/overuse the ellipsis. In my defence, I am miserly with the semicolon… [but I love it, too].
NoteToRalph: Ya know what worries me about those BalanceSheets? For the most part, the ‘Green’ ain’t TopLine… Sooner or later, CostCutting ‘manifests’ in Anomie. Alas. Let’s just say I’m worried. See also… ScratchThatLast… Make that HearAlso {HighlyRecommended}: http://youtu.be/PNY2FQ9ufxo
Affordability
here is an example of how these rising rates are going to limit the amounts people can qualify for with mortgage.
income 70000/yr property taxes 4000 / yr downpayment 20000
at 2.89% five yr fixed max purchase price is 400000
at 3.89% five yr fixed max purchase price is 370000
this is already a 8% drop in bidding power,
you will see lots of homes in next 6 months with reduced prices
correction to previous post.
i double checked my numbers.
at 3.89% five yr fixed max purchase price is $360,000
that is a 10% drop in bidding power
#144 T.O. Bubble Boy
Here’s another explanation… you can increase a house’s value significantly with renovations
You can also lose the value of that renovation when construction workers are jobless and will work for peanuts. Homeowners don't think of this stuff.
Form Man @ # 149,
Kelowna site? Is that what you’re calling your one bedroom chipboard apartment now?
I suppose your rusty Ford Ranger is referred to as your “Staff Car”…
I think you should empty your bottle in the sink and throw away all your Macleans magazines and join us here in the world of reality…
#156 westernman
an erroneous and pathetic response from an angry, intolerant, misogynistic, sad little man………