The obvious

STEALTH1

I didn’t see it, but apparently the chief economist of the Canadian real Estate Association called me a troublemaker. Or a maverick. Or merely pathetic. At least one of those I wear with pride.

Why was he on TV doing that? Because I challenged the integrity of CREA’s data. Apparently we live in a world where smoking cocaine, random diddling, twearking and drunken rants are cool. But cite statistical anomalies, and yer ass is fried.

It may happen again this week.

The cartel’s latest numbers will be released shortly, and you can count on a reported jump in October sales of 10% or more, driven largely by results provided by the Toronto and Vancouver boards. As this pattern continues – with no independent auditing of MLS data, and no regulatory oversight of the industry’s tainted (by its own admission) process – more and more observers think we’re all on crack.

The latest is The Financial Times, warning that our housing market “is perched precariously at its peak.” This comes hard on the heels of a Goldman Sachs report calling for a “large correction” in the Canadian real estate scene. “If the elevated level of homebuilding persists in coming years, the risk of overbuilding will increase substantially,” it says. “And if the ongoing housing boom is followed by a housing bust, the price decline can be quite significant given the excess supply of housing at that point.”

And let’s not forget The Economist, which says flatly that our market is “the frothiest” in the world. Overvalued by about 40%, in fact. Imagine that.

I sat across the table from a career real estate broker today (he’s now specializing in doing deals for big box retailers) who personally exited the Toronto real estate market a year ago. “What boom?” he asked. “I keep reading about this hot market, and it simply doesn’t exist. Take a look at sales under four hundred or over twelve. This is just ugly.” He’s right. Sales of new condos are down 30% from last autumn and 50% since 2012. Meanwhile listings over $1.2 million are languishing, then selling at a discount. Comparable homes were flying off the shelf for 15% premiums eighteen months ago.

Hell, even the MSM isn’t buying the CREA story line. “Canadian Housing Bubble? 9 Signs We’re In For A Major Correction,” said a headline in the HuffPost this week, following by graphs (with real numbers, and everything) showing that Canadians are debt hogs…

DEBT

…and an unhealthy hunk of the entire economy is now dependent on people continuing to buy houses.

GDP

As this much-maligned, tiny-balls blog has told you in past months, markets are segmenting fast. The virgins are struggling, and largely failing, to get in. The top end’s gone cold because rich people didn’t get that way buying assets set to decline. So it’s the middle, teeming with 30-something breeders who actually think prices will rise without end, keeping average values aloft. These are the offspring of the wrinklies, who learned all about real estate from their house-addicted Boomer parents.

So, we have a growing disconnect between what lots of Canadians believe (and are told), and what many global observers see. One thing’s for sure. One group is wrong.

BeeMo economist Robert Kavcic says CREA is about to claim average home prices are up 6.5% over this time last year. As you know, the data will include multiple listings and sales figures for the same properties. Yearly comparisons will be done by contrasting current raw data with last year’s revised numbers. Stats will be seasonally adjusted without explanation or context. Private sales will plump up the MLS results. And it will all be reported as gospel.

If some fool producer invites me back on TV, Mr. Klump will have a cow.

One more for the herd.

128 comments ↓

#1 sockeyemoon on 11.11.13 at 9:16 pm

I like Shiller’s quote on #9 that this is a bubble breaking in slow-motion http://www.huffingtonpost.ca/2013/11/11/canada-housing-bubble_n_4255889.html

#2 Toronto Home Prices on 11.11.13 at 9:19 pm

Cheap interest rates will likely keep the party going for another two years.

#3 Daisy Mae on 11.11.13 at 9:19 pm

“I didn’t see it, but apparently the chief economist of the Canadian real Estate Association called me a troublemaker. Or a maverick. Or merely pathetic. At least one of those I wear with pride.”

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

Probably all? ;-)

Seriously, you aren’t a troublemaker. You ARE a maverick. You’re not pathetic. But you are our savior!

Keep up the pressure…

#4 Glenn van Tisdall on 11.11.13 at 9:19 pm

Every time I read this blog, I get furious. Not at Garth (who I think is doing a wonderful public service that, unfortunately, nobody else seems to be doing), but rather at the stupid consumers in this country. I am sometimes embarrassed to be a Canadian (for reasons other than no Canadian hockey team has won the Cup in over 20 years).

#5 Mark on 11.11.13 at 9:19 pm

The statistical mirage of rising averages, but substantially rising medians, but no increases on ‘identical houses’ is well known to those in the industry. The Regina RE board even went so far as to admit, a couple weeks ago, not to take the rising averages to mean that an individual house will actually be able to sell for any higher than the year prior.

Since the data points to the same thing happening in most of Canada’s major cities, with the low end dropping out (due to hitting the CMHC subprime limits), the question that begs to be asked is why the RE boards in the other cities are not as honest as the Regina RE board. Could it be that greed is greater outside of Regina? Hard to believe, but Realtors are shooting themselves in the feet over the long run by not being independent sources of market information.

#6 Yours on 11.11.13 at 9:19 pm

If there is a correction and it is a significant one…how do you see the Great One dealing with it?

Reits?!
How will they be affected by this soon to come Housemagedon?

Why would they be affected? — Garth

#7 eddy on 11.11.13 at 9:21 pm

Bloggers, only click the link below if you are

“basement-dwelling, pajama-clad bloggers with no professional credentials”

http://thecommonsenseshow.com/2013/09/25/congress-moves-to-outlaw-the-alternative-media/

#8 JSS on 11.11.13 at 9:24 pm

SO I went to the Lexus dealership to buy a 2009 RX350 navigation, premium package. 85K mileage.

Lexus wants $30,500. I made an offer of $23K.

No go.

The Lexus blog is two blocks to the south. — Garth

#9 Jsan on 11.11.13 at 9:28 pm

Live financially extended in your grossly overpriced house full of all of the trinkets and electronic toys. Drive your luxury automobiles, enjoy life to the fullest and than enjoy an exciting retirement…….for a couple of years than haul your @SS back to work for the rest of your retirement and life because if you are middle class and living like you are rich, you CAN’T HAVE IT All.

As Scotiabank would not say, “You’re probably much poorer than you think”!

Americans Retiring Early, Then Running Out of Money

http://www.thestreet.com/story/12103531/1/americans-retiring-early-then-running-out-of-money.html?puc=yahoo&cm_ven=YAHOO

#10 Realtors are scumbags on 11.11.13 at 9:30 pm

Here is the land size of Florida 170,304 km² Population 19.32 million Vs Ontario 1,076,395 km² Population 13.51 million .

LOL yeah Canada is running out of land. The housing bubble in Canada is the BIGGEST in the world. Realtors are true scum of the earth who will lie and cheat for a dollar.

#11 Cici on 11.11.13 at 9:34 pm

Right on Garth!

See, that’s why you do this everyday :-)

And thank you by the way for saving my financial a$$ once upon a time, when I actually was house horny!

#12 TnT on 11.11.13 at 9:41 pm

In The Beaches GTA I seen a semi-detach house with dirty underwear hanging on a door knob, ceiling fallen in with water damage, dated from the 1980’s still sell for 82K over asking (sold for $682K)…

The market between 500K to 700K is still insane….

#13 X on 11.11.13 at 9:41 pm

Most people have the bulk of their net worth in RE, and as a result have too much debt.

Yet the RE market has no oversight, and can fabricate their own stats.

It is absolutely crazy to think about…

Sheep being led to slaughter.

#14 Gor Gon Lin on 11.11.13 at 9:52 pm

If they have nothing to hide why aren’t they releasing the raw data minus personally identifiable information for verification?

At the very least there needs to be 3rd party oversight of the data reporting. Black box reporting for a billion dollar industry wherein keeping the party going with magical accounting methodologies is in the best interest of the party that owns and reports on said data should not be tolerated in a free market.

Imagine a public company reporting their financials like this? How long can the game last before the elfin one does something about it? ;P

#15 I'm stupid on 11.11.13 at 9:53 pm

#10 realtors are simbags

What do you expect when you let sales people control the information regarding their products. I don’t understand why people rely on info generated by realtors. Why do Canadians see them as experts when their qualifications are equivalent to Grade 10 math and grade 7 English? Yet the guy who gets a PhD in economics has no idea is wrong.

#16 Smoking Man on 11.11.13 at 9:58 pm

Garth we are connected some how via the UCC

I started writing a new short story for a contest, I click on here and it’s an airport.

First few lines

……………………..

Don’t fly with Dmitri

Every now and then I lurk in the departure hall of airports.

I’m a soul transitional specialist as described on my contract with the dude. Trust me this job is not easy, dealing with the newly dead coming threw the door after a plane is vaporized on impact is complicated and the moms mad as hell at me.

My pal Rick has it easy, he gets the ones that just die in there sleep. They think it’s a dream, it’s so smooth. Big Dude likes him more than me, kind of pisses me off but nothing I can do about it.

I’m sitting on the big clock in the main terminal, no one can see me.

It’s 9:28 am

#17 Toon Town Boomer on 11.11.13 at 10:05 pm

Please, please some producer ask Garth to come back and do another TV interview. I’m sure he has a lot more to say.

#18 Daisy Mae on 11.11.13 at 10:06 pm

“The latest is The Financial Times, warning that our housing market “is perched precariously at its peak.” This comes hard on the heels of a Goldman Sachs report calling for a “large correction…”

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

Oh, for Christ’s sake! You’ve been telling us this forever. A big ‘duh!’ Finally, the media gets it?

#19 45north on 11.11.13 at 10:12 pm

So, we have a growing disconnect between what lots of Canadians believe (and are told), and what many global observers see. One thing’s for sure. One group is wrong.

it’s the household debt to GDP that’s the show stopper – Canadians are tapped out – you cannot fix that.

I sat across the table from a career real estate broker today who personally exited the Toronto real estate market a year ago.

one man after many years in the industry may be able to redirect his career but the real estate boards sure as hell cannot. They are there for one reason only – to help the individual real estate agents close the sale

JSAN: As Scotiabank would not say, “You’re probably much poorer than you think”!

pretty funny

#20 crackservative on 11.11.13 at 10:13 pm

When will the crackservative party of Canada do something about the criminal RE industry ? Crackservative F is a useless silver spoon who would have no job if it wasn’t for his money and connections . F is a useless crack head ooops I mean conservative. How could I possibly get the two confused?

#21 TnT on 11.11.13 at 10:18 pm

#18 Daisy Mae

A big ‘duh!’ Finally, the media gets it?

*******

Globe & Mail and Maclean’s magazine have been calling bubble for over 2 years….

Everyone now knows were in a bubble now, no one knows when it will pop (or deflate very slooooooooow over many years…..)

#22 Money talks on 11.11.13 at 10:22 pm

Garth, I feel you discount the affect of immigration however it might be worth examining the rush the Feds have on right now to push through applications for citizenship as well as the push to bring in more immigrants next year at numbers not seen since 1998.

Jason Alexanders speaking notes from October 2013:

“There was a study released in June by the Bank of Montreal that showed almost half of Canada’s millionaires – the proportion may be even higher among billionaires, I’m not sure – that millionaires are immigrants to Canada or first generation Canadians with at least one parent born abroad – almost half.”

” And when they find out that one of our programs at Citizenship and Immigration has a waiting time of one year, let alone three years, they will go elsewhere.

“And that’s why we’re committed to eliminating these backlogs, shrinking processing times, and it’s also why we created the Start-Up Visa Program, which is the first of its kind in the world. What makes this program unique– and it was only created this spring –is that, unlike similar programs in other countries, we are offering permanent residence upfront to successful applicants.”

“So this new stream will be open for applications as of this Saturday, October 26th. So please put the word out. By expanding the Start-Up Visa Program, this is really one of the fastest launches of any immigration program we’ve ever had. We launched the Federal Skilled Trades Program in January of 2013. We brought the first people into Canada under that program in August.”

Full speech: http://www.cic.gc.ca/english/department/media/speeches/2013/2013-10-21.asp

“We’re very proud to be continuing the strongest sustained levels of immigration, particularly economic immigration, in Canadian history,” Alexander said.

http://www.torontosun.com/2013/10/28/canada-aims-to-open-doors-to-265000-immigrants-in-2014

#23 Money talks on 11.11.13 at 10:24 pm

Correction to my post re: “1998” posted in error

“That’s a level surpassed only once since 1988 — in 2010, when the country opened its doors to more than 280,000 newcomers.”

#24 BC on 11.11.13 at 10:37 pm

Foolish mistakes will ruin you – Bankruptcy will take care of the rest.

http://www.goo.gl/u9Ebef

#25 Tiger on 11.11.13 at 10:46 pm

Smoking man #16 yeah don’t fly sun wing air what a retard airline point to point flight home then we have to fly to Calgary for fuel then oh no we can make it to Vancouver was the pilot havinga melt down cause of re or just a spoiled little bastard or bastard, my son said to me what if the pilot commits suside it was won of the most uct up flights ever do even pilots have finical problems be careful Ho you fly with !! Get it, I wonder some times

#26 Retired Boomer - WI on 11.11.13 at 10:54 pm

Hey Garth-

After reading your columns these past years, ask me who I trust, you, or the RE talking heads?

Your advice about savings, and investing have been righteous for all who will listen.

Your advice about the dangers of RE have been correct as well, but their has yet been no serous melt, or flood of smelly shorts Boomers fleeing home ownership. You will be vindicated here as well in due course.

I don’t always understand why you do what you do.

I’m just one Yank who finds your advice and comments worth enjoying as part of my little world. Thanks!!

#27 Bob Rice on 11.11.13 at 10:55 pm

I’m hearing talk again that QE might actually be eased this time around… thoughts, Garth? Think it’ll: a) happen b) have a negative impact on rates (as in increase them?)

Interesting times, for sure… but ya gotta wonder when they’re lining up to paint a negative picture…

Seems to me that the only folks denying there’s a looming correction are Canadian homeowners and the RE industry… don’t blame them – they’ve got the most to lose!

#28 Tiger on 11.11.13 at 10:59 pm

DELETED

#29 Martin Lazi on 11.11.13 at 11:09 pm

where in the heck you find these photos

#30 recharts on 11.11.13 at 11:13 pm

This is RE B$!
Show us stats and examples
FYI, if you select such a narrow interval (500K-700K) you will barely see a change in the average price.

#12 TnT on 11.11.13 at 9:41 pm
In The Beaches GTA I seen a semi-detach house with dirty underwear hanging on a door knob, ceiling fallen in with water damage, dated from the 1980′s still sell for 82K over asking (sold for $682K)…

The market between 500K to 700K is still insane….#12 TnT on 11.11.13 at 9:41 pm
In The Beaches GTA I seen a semi-detach house with dirty underwear hanging on a door knob, ceiling fallen in with water damage, dated from the 1980′s still sell for 82K over asking (sold for $682K)…

The market between 500K to 700K is still insane….

#31 Devore on 11.11.13 at 11:16 pm

#20 crackservative

When will the crackservative party of Canada do something about the criminal RE industry ? Crackservative F is a useless silver spoon who would have no job if it wasn’t for his money and connections

Crackservative, eh? Very mature, you will go far in life what that attitude.

The “crackservative” party of Canada will not do anything because the sale and development of real estate (and real estate boards) are under provincial jurisdiction.

If you’re gonna piss up someone’s tree, at least make sure you’re in the right forest.

#32 recharts on 11.11.13 at 11:16 pm

TnT I wonder why don’t you say anything about the condo disaster that is brewing???
Resales numbers are going down in flames. The price is led up by discounted above 600K condos that are selling at 80% of the asking price after 160 DOM.

I never heard BoC speaking about the Beaches Market but they did speak about the Condo Market.

He he !

#33 Mark on 11.11.13 at 11:19 pm

#22, they’re not coming to Canada as millionaires. Most immigrants arrive with little more than the funds to purchase a used car and an apartment rental down payment. They’re becoming millionaires once in Canada, through hard work, frugal living, etc.

#34 Devore on 11.11.13 at 11:20 pm

#22 Money talks

I seriously doubt you are in competition with billionaires, or even regular millionaires for ANYthing, least of all real estate. They’re not they ones buying 300sqft skyboxes and Leaside teardowns.

#35 Tiger on 11.11.13 at 11:24 pm

Yup in the early 80s oh ya that’s 1980+ Mac million blodell lost millions their new strategy buy low sell high, they no longer exsist but I do thanks a million Mac million blodell a timber company great story just an observation on my part, maybe should have talked to Garth as well three kinds people did it going to do it what the f happened you are in control now make it happen, or forever shut up don’t blame others !!!!!

#36 raisemyrent on 11.11.13 at 11:30 pm

Money talks on 11.11.13 at 10:22 pm
Garth, I feel you discount the affect of immigration however it might be worth examining the rush the Feds have on right now to push through applications for citizenship as well as the push to bring in more immigrants next year at numbers not seen since 1998.

Jason Alexanders speaking notes from October 2013:

“There was a study released in June by the Bank of Montreal that showed almost half of Canada’s millionaires – the proportion may be even higher among billionaires, I’m not sure – that millionaires are immigrants to Canada or first generation Canadians with at least one parent born abroad – almost half.”

” And when they find out that one of our programs at Citizenship and Immigration has a waiting time of one year, let alone three years, they will go elsewhere.

“And that’s why we’re committed to eliminating these backlogs, shrinking processing times, and it’s also why we created the Start-Up Visa Program, which is the first of its kind in the world. What makes this program unique– and it was only created this spring –is that, unlike similar programs in other countries, we are offering permanent residence upfront to successful applicants.”

“So this new stream will be open for applications as of this Saturday, October 26th. So please put the word out. By expanding the Start-Up Visa Program, this is really one of the fastest launches of any immigration program we’ve ever had. We launched the Federal Skilled Trades Program in January of 2013. We brought the first people into Canada under that program in August.”

Full speech: http://www.cic.gc.ca/english/department/media/speeches/2013/2013-10-21.asp

“We’re very proud to be continuing the strongest sustained levels of immigration, particularly economic immigration, in Canadian history,” Alexander said.

http://www.torontosun.com/2013/10/28/canada-aims-to-open-doors-to-265000-immigrants-in-2014

and again with blaming the foreigners. that’s the easy way out, mate. Think of your Canadian friends, say 10 of them, then ask yourself how many have mortgages. That’s the market.
The bulk of immigrants are here to escape worse conditions elsewhere; they’re not here to buy off real estate, and it is fairly tough for non-residents to get the same kind of silly loans [email protected] pushes.
The article is a band-aid for what have been a few years of relatively tight immigration rules. While some changes were very much welcome (mandatory commonwealth english testing), as locals don’t reproduce enough (they’re all buried in debt!), it will become very difficult to sustain our economy without immigration. For a year, we even had a net decrease in population. Now THAT hadn’t happened in years either (without immigration, the population would decrease every year).
If you early think about how useful our pretty little Millenialls/GenYs are, add up masses of retiring, sick, and broke boomers, and an already suffering workforce, it’s hard to see a bright, shiny future for all of us within the next few years. And it doesn’t matter how much oil we’re sitting on. Can you say rising taxes? But I digress…

#37 Tiger on 11.11.13 at 11:35 pm

Oh yeah Garth get off your ass and do what you do best
What is that, your blogs rock,evenif it’s slo mo it’s still Hapinin just going to be a bigger event!! I’m diversifying soon , all my investments are in rbc a cool 125% wtf

#38 will on 11.11.13 at 11:38 pm

As Scotiabank would not say, “You’re probably much poorer than you think”!

HaHa. I like that. You’re poorer than you think. Good one Jsan.

#39 R on 11.11.13 at 11:50 pm

Hi Garth

Do u expect little F to take further action to cool the market or interest rate to rise in near term
If not then insanity will continue

#40 Tiger on 11.11.13 at 11:52 pm

#28 why would you delete that are you sticking to that bs , are you scared that kids at 30 still needs mm
Ritchie bros auction as an example that said it all, used say sold to the highest bidder and I will use you when I’m done you will be put back on sail for some one else to abuse ya your just a slave in my opinion

#41 FormerSaskie on 11.11.13 at 11:52 pm

A question Garth – recently sold my condo to a rental property investor. I crunched his numbers and he could make a tiny profit per month if there is no vacant months or repair costs to fix tenant damage. The building is 30 years old with 500 or so new units coming onstream in next 24 months in this area. I can’t see the price of these units keeping up with inflation or covering buisness income taxes over the next 25 years should he sell. HOW does this guy expect to make money?

#42 TnT on 11.11.13 at 11:55 pm

#32 recharts

TnT I wonder why don’t you say anything about the condo disaster that is brewing???
Resales numbers are going down in flames. The price is led up by discounted above 600K condos that are selling at 80% of the asking price after 160 DOM.

I never heard BoC speaking about the Beaches Market but they did speak about the Condo Market.

He he !

**********

For someone who considers themselves an avid data collector then I invite you to do a selective search via Google e.g. site:www.greaterfool.ca TnT

Spend a few minutes reading my posts for almost 2 years now. Note it’s TnT (TNT if it’s a typo) – older than 2 years there was a TNT, that’s not me…

I am NOT a realtor. I am a RENTER for almost 2 years in The Beaches. Sold 2 homes that I fixed up myself outside of Toronto. Invested my ROI in ETF’s. There’s plenty of posts from me outlining these facts.

Quit embarrassing yourself with the sky is falling routine and that I am a realtor…

Also note: So far Real Estate is winning the argument and your constant belly aching comical.

Thanks for the entertainment :)

PS.. http://dgvirtualtours.zenfolio.com/p347438134

Sold for 82K over – I was shocked because this house dirty, not a single attempt was made to stage it and it still sold over asking.

#43 Inglorious Investor on 11.11.13 at 11:55 pm

Prepare for the Great Canadian Credibility Crisis.

Senators who once reported on fraudulent expenses by politicians for CTV (and one Algonquin guy) now claim fraudulent expenses for themselves.

Prime Ministers who try to cover it up. Then throw these same senators to the dogs when it falls apart.

Senators who sit on the boards of mining exploration companies that are really pump-and-dump schemes:
http://www.theglobeandmail.com/news/national/lawsuit-against-bankrupt-company-pamela-wallin-directed-settles-for-102-million/article13945310/

All the other mining company pump-and-dump schemes. Oh hell, almost the entire venture exchange.

Prime Ministers who petulantly proclaim (indirectly, because that’s all he can do) to cool daddy American presidents that they won’t take “no” for an answer for a new pipe. And the American president responds by saying, “Harper who?”:
http://www.cbc.ca/news/politics/harper-won-t-take-no-for-an-answer-on-keystone-xl-1.1869439

Wannabe prime ministers acting like wannabe gigolos:
http://fullcomment.nationalpost.com/2013/11/10/michael-den-tandt-justin-trudeaus-recent-gaffes-undermine-his-political-strengths/

Provincial politicians who spend over a billion dollars to NOT build power plants.

Mayors who smoke crack while drunk. Or make deals with the mob. Or get their sons under-the-table real estate deals (well, not technically):
http://www.thestar.com/news/city_hall/2013/10/24/hazel_mccallion_awarded_170000_in_dismissed_conflict_case.html

Or mayors who pay 35 million to cancel a 22 million dollar bridge:
http://communityair.org/Background/35_Million/35_Million.html

A very CREAtive real estate cartel that OPEC would envy for their numerical legerdemain.

Overvalued housing (or is the market never “wrong?”)

Too much consumer debt––compared to, well… just about everybody else.

Rampant mortgage fraud:
http://www.thestar.com/business/2012/02/21/mortgage_fraud_up_150_per_cent_in_the_last_year.html

Another soon-to-be revealed accounting scandal at BlackBerry (?) Hey, Prem, watsap?

A love affair with tar that is destroying the world’s climate? Indignant (and jealous) foreigners wagging fingers:
http://tarsandssolutions.org/member-blogs/climate-change-report-adds-to-albertas-oil-sands-woes

Canadian ambassadors who are really CIA agents (OK this is kind of old news):
http://www.theglobeandmail.com/news/world/canadas-man-in-tehran-was-a-cia-spy/article4311038/

A whore national broadcaster who reportedly (according to am640) secretly prostituted itself by taking money to manufacture a news story. Confirming that advernews has now completely killed Canadian journalism. American reporters say, “Meh… welcome to the club.”

Hamilton, Ontario.

Oh (my God), Canada!

#44 in Mississauga on 11.12.13 at 12:01 am

Something needs to be done to have some regulatory oversight on the numbers being posted by the RE cartel. This would atleast save some from financial ruin. How about some blogdog starting a petition @ https://www.change.org/en-CA/start-a-petition….

#45 omg on 11.12.13 at 12:02 am

GT said – “Hell, even the MSM isn’t buying the CREA story line. “Canadian Housing Bubble? 9 Signs We’re In For A Major Correction,” said a headline in the HuffPost this week…..”
—————————
The Huff Post is MSM? They may be insulted by that.

#46 Ole Doberman on 11.12.13 at 12:07 am

I heard a radio ad today that 50% of houses hitting the market are not selling. This is a small city of 80,000.
Does anyone know if this is a high ratio indicating a bear market??

Also this was an ad by a real estate agent! He might have pulled a Darth Vader and turned away from the dark side.

#47 TnT on 11.12.13 at 12:09 am

#32 recharts

TnT I wonder why don’t you say anything about the condo disaster that is brewing???

********

Specific to my thoughts on the condos for Toronto.

As someone who was born and grew up in Toronto I am very excited to see all these condos. If you know anything about urban planning then you will know about the doughnut effect that can happen in a large city. All these people living in the down town core is awesome. They will get filled, either by renters or owners. These people will add to the local economy (food, stores, dry cleaning etc..), this is a good thing and the building are here forever. They will not be torn down, they will not stay empty.

You keep saying the condo market will or is crashing… have fun with that…

#48 Kilt on 11.12.13 at 12:22 am

Excess supply? In what? Seems like there is fairly good demand, a lot of pent up demand from people who are priced out and low inventories.

Kilt.

#49 recharts on 11.12.13 at 12:24 am

If you are not a RE agent you surely think like one
You are an idiot, let me tell you that.

That house is had the lowest asking price on that street in 7 moths
And that house sold for the lowest price on that street in the last 7 months

Here are the asking prices for all the properties sold on that street in these last 7 months

InitialAskingPrice
1099000
999000
1250000
1199000
775000
649900
699900
1349000
599000

Now tell us, aren’t you an idiot?

#42 TnT on 11.11.13 at 11:55 pm
………….crap removed………

PS.. http://dgvirtualtours.zenfolio.com/p347438134

Sold for 82K over – I was shocked because this house dirty, not a single attempt was made to stage it and it still sold over asking.

#50 Money talks on 11.12.13 at 12:40 am

#36 raisemyrent “and again with blaming the foreigners. that’s the easy way out, mate. Think of your Canadian friends, say 10 of them, then ask yourself how many have mortgages. That’s the market.
The bulk of immigrants are here to escape worse conditions elsewhere; they’re not here to buy off real estate, and it is fairly tough for non-residents to get the same kind of silly loans [email protected] pushes.”

Never mentioned blaming anyone for anything. Just moved out of a brand new development of 500k-1mil homes and the majority of our neighborhood was newly arrived foreign families. Many paid cash and they do not have jobs here.

New immigrants are able to obtain a mortgage here with NO JOB and 25% down as well, as long as they’ve been here for 2 years or less. Do we offer that to Canadians? Not that I’m aware of.

Do I know people up to their eyeballs in debt? You bet, that’s not what the point of my post was.

People question why the prices haven’t fallen and I’m simply trying to bring to light that not everyone is as indebted as “Canadians” are. Not all foreigners are refugees, many immigrants are from very wealthy families. Many are also very smart and pool money to purchase homes with cash which they rent out for a premium (I rented one of those homes from a foreign family for good money). Many generations live in one home until money is saved to purchase another outright.

There is a loop hole we saw (were told about by some who did this) where because they don’t have jobs, they apply for subsidies for various programs and are granted those given their lack of reported income. No blink from the programs acknowledging they live in a 2400+ sq foot home in a brand new neighborhood with brand new vehicles in the driveway.

All this said, all the power to those who are able to make the most of their money and use resources to the max.

It has nothing to do with gender, religion or nationality. It has to do with looking to get the most bang for our buck and many have figured out the loopholes in our systems, as have some Canadians.

The point of my initial post about immigration was to bring attention to the push to bring more people into Canada which equates to more housing needed (aside from the fact they are doing this for the economy). As we’ve learned, many boomers are staying put so in turn, newcomers will need to live somewhere.

Those articles didn’t include the push to bring in remaining family members from overseas as well as the care giver program.

Not looking to fight with anyone here and am surprised with the defensive remarks.

#51 TnT on 11.12.13 at 12:51 am

#49 recharts

If you are not a RE agent you surely think like one
You are an idiot, let me tell you that.

etc…

Now tell us, aren’t you an idiot?

**********

Wow you are shallow and angry…

Take a deep breath and relax.

Use Google street view and you will see that house is the smallest house on the street, that’s why it’s the cheapest. The other houses are new rebuilds or 2x the size and will sell for more than 1 million.

Point is (as noted in Garth blog) that the middle market is still hot. I submitted my take on that with a house that was a complete dirty shack still sold way over asking.

Have fun crying about it….

#52 Frank Dean on 11.12.13 at 1:03 am

Let’s take a closer look at the chart showing Residential + Non-residential construction as a % of GDP.

What we really want is “Residential construction as a % of GPD”, since non-residential construction consists of factories, office towers, and other places where people don’t live.

According to Statistics Canada, investment in residential structures in 2013 Q1 and Q2 was 125,564 and 126,940 million dollars respectively. Total GDP was 1,853,812 and 1,860,404, again in millions of dollars. So investment in residential structures was about 6.8% in both Q1 and Q2.
http://www.statcan.gc.ca/tables-tableaux/sum-som/l01/cst01/gdps02a-eng.htm

Of course, it’s easier to copy bad charts from the Huffington Post than to look up the actual data.

I trust you shared this with the Post and the third-party source which created the graph? Or was it easier to post here? — Garth

#53 Tiger on 11.12.13 at 1:10 am

Wonder what’s its like just do it rob ford all over again Ontario you suck go smoke more crack u making more money for me!

#54 Pt Bob on 11.12.13 at 1:20 am

New First Nations real estate development in Vancouver http://www.biv.com/article/20131111/BIV0111/311129856/first-nations-roll-out-major-real-estate-projects

#55 Balance on 11.12.13 at 1:27 am

Why are you quoting new condo stats when new condo stats are not recorder in MLS most condo developments have their own sales people and do don’t use MLS.

It’s misleading to quote Canada as the hottest market in the world when it is minuscule compared to China or Hong Kong, Singapore Etc.

Eventually your call for a correction will be correct however your timing has and continues to be way off.

Beating up on CREA has become your new mantra because your earlier predictions of a Real Estate crash have fallen way short. I suspect some have lost money as a result of your call to sell sell sell

Every market is different and many are sagging. Over-exposure to RE is an unsound strategy. My message is one of balance. — Garth

#56 Pulp Faction on 11.12.13 at 1:35 am

“…and an unhealthy hunk of the entire economy is now dependent on people continuing to buy houses.”

Doesn’t that say everything you need to know ?

Translation to stupid English:

You get to propel the economy with your poor decision making and willingness to take on extraordinary debt for everyone else’s gain. Baa-Aaa-Aaa…..

#57 Spectacle on 11.12.13 at 2:03 am

Thank you Garth

#29 Martin Lazi on 11.11.13 at 11:09 pm
where in the heck you find these photos?

With all respect, it’s a careful internet search, through all the noise/distraction online.

For some fun facts and fundamentals to greatly back up Garths work, search youtube for agenda21 by Rosa koire! An ex real-estate advisor turned advocate. It can also help us understand Vancouver bike lanes, oil pipe lines, cost of living….and why we have to get personally involved.

Oh, and why it’s essential to keep reading blogs like Garth provides!

#58 John Prine on 11.12.13 at 3:01 am

On Vancouver Island the homes priced between $600K and $900K are NOT selling, one neighbourhood near Parksville with small horsey acreages and big homes most 10 years old or younger has listings that average 400 days on market. The market here for homes around $400k to 450K is doing rather well and there are not enough listings for the demand.

#59 ApplesToOranges on 11.12.13 at 3:17 am

I don’t comment here much, so pardon me if this has been asked a hundred times over. Where do good tenants go to find good housing? There is nothing on Craigslist that isn’t a stale listing or for students. We are a family in Vancouver currently and will be moving to Milton next spring. I’m freaked out at the prospect of buying because what’s on the market right now is junk. I imagine there will be a nicer inventory come March, but still. We’d be getting a fixer upper and putting in money to rip out rancid carpet and rectify crooked kitchen cabinets in a 100-year-old house that won’t actually increase the value in a falling market. Family and friends assume we’ll buy since we’ve rented for several years but plan to make our stay in the GTA permanent. “I see the market here going up. There doesn’t seem to be as much of a bubble here.” In RIM-land. Sure, they may not be giving away a car with a new condo like out here, but it still seems pricey, $450,000 for a somewhat new semi. If someone has a crystal ball, can you tell me when this market is going to correct so I can plan my life? Or tell me how to find a good rental. I can’t imagine RE agents are interested in helping tenants. If we were to buy we’re not looking at a home as an investment, we just really want a place that we can do what we want with. I’ve had enough of the Lower Mainland plywood constructed houses and trying to accommodate cranky basement suite dwellers when my kids get up at five in the morning. I’m ready to be in a house, rental or owned, but the prospect of the Canadian market finally correcting gives me pause. We’ve all been waiting five years for this to correct. Eventually one has to get on with their life and not make housing decisions based solely on impending doom and gloom that has been so long coming that I just don’t care anymore, you know?

#60 cynically on 11.12.13 at 3:25 am

Garth, now that you are getting some vindication from very reliable outside sources in your findings of a coming RE slump, are you ready to up the seriousness of this situation as these sources are talking of grave consequences and you have never gone out that far on the limb?

#61 Balls, beards, and fire on 11.12.13 at 4:00 am

They would in fact have to be quite large, or perhaps very saggy,non order to become tangled in one’s beard before inexplicably being set on fire.

#62 Sam on 11.12.13 at 4:05 am

Backfire of housing bubble,

The housing market version of the Dutch Disease?

http://www2.macleans.ca/2013/10/03/did-high-home-prices-push-down-manufacturing-employment/

#63 Buy? Curious? on 11.12.13 at 4:27 am

Ok, so everyone is agreed that a correction will happen, now what? Why does everyone make it sound like some Doomsday scenario is going to take place? What’s the worst that can happen?

Rob Ford, I love you! Rob Ford 2014!

http://www.youtube.com/watch?v=pEY17qbdGqE

#64 Led on 11.12.13 at 8:18 am

isn’t this the same stance that the gold bugs use when they are wrong? BS stats, manipulation, etc
Are you as wrong about real estate as the gold bugs are about where the price of gold is going?

Nope. — Garth

#65 The real Kip on 11.12.13 at 8:21 am

“This comes hard on the heels of a Goldman Sachs report calling for a “large correction” in the Canadian real estate scene.”

Goldman Sachs? Really? They should know about screwed up economies, they’ve orchestrated a few of them. Quote someone credible.

Goldman is one of the largest financial players in the world. You are a crane operator. — Garth

#66 recharts on 11.12.13 at 8:45 am

Something must be wrong in your attic.

You are the stupid who has to prove use your statement: “the Beaches area is hot”

So far you pointed us to a single listing which I explained you was intentionally listed under the normal value even for a small house.

First of all define hot and next show us that by that norm the Beaches area is “hot”

Be nice and prove to us that your brains are not full of shit and you are not so stupid to believe that you proved your point with just one listing
Have that much respect for yourself.

As far as the Condo market goes …see my next post

#51 TnT on 11.12.13 at 12:51 am

If you are not a RE agent you surely think like one
You are an idiot, let me tell you that.

etc…

Now tell us, aren’t you an idiot?

**********

Wow you are shallow and angry…

Take a deep breath and relax.

Use Google street view and you will see that house is the smallest house on the street, that’s why it’s the cheapest. The other houses are new rebuilds or 2x the size and will sell for more than 1 million.

Point is (as noted in Garth blog) that the middle market is still hot. I submitted my take on that with a house that was a complete dirty shack still sold way over asking.

Have fun crying about it….

#67 realtors are scumbags on 11.12.13 at 8:46 am

It’s so obvious that TnT is a out of work realtor who hasn’t made a sale in months or even over a year. Many realtors have had to get a real job as sales are hard and few to come by. You have to wonder why these realtors are here posting their propaganda if the market was doing so well? Lol TnT the condo market is finished. Try selling a condo and watch it sit on the market without any offers and even after price drops. People are trying to unload their money pit condo that will fall In value for years to come. Condos should see a 50% drop when all is said and done.

#68 maxx on 11.12.13 at 8:55 am

#3 Daisy Mae on 11.11.13 at 9:19 pm

Ditto. Garth should be required reading – imagine a world where kids got tailor-made lectures at school by people with fiscal common sense. Regularly, as part of the curriculum.

I got that by accident. My parents were far from wealthy, but never owed a penny. Every month, a few days prior to payday, they sat at the kitchen table, discussing how to make the money last a bit longer.

Bless their hearts. What a difference it made in my life. I can’t imagine taking on debt. It’s poison.

Managing for debt avoidance and building wealth develops creativity in individuals. You find ways to get what you need/want at far lower prices and that skill grows over time.

By suppressing interest rates, two of many things happen: debt grows in a large segment of the population and also, savers become entrenched and even better savers.

This does not build a nation’s wealth.

And what of the flood of money funneled into the construction industry? This begs the question: what are the payees spending their money on? A diverse spectrum of goods such as you might find in a varied-job economy? Not so much.

Garth quite rightly suspects a long, slow RE melt. I think that an economic slow melt is happening in parallel.

#69 TnT on 11.12.13 at 9:04 am

#65 recharts

Something must be wrong in your attic.

You are the stupid who has to prove use your statement: “the Beaches area is hot”

So far you pointed us to a single listing which I explained you was intentionally listed under the normal value even for a small house.

First of all define hot and next show us that by that norm the Beaches area is “hot”

Be nice and prove to us that your brains are not full of shit and you are not so stupid to believe that you proved your point with just one listing
Have that much respect for yourself.

As far as the Condo market goes …see my next post

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

Don’t be so recharted….

The market is hot for the middle segment…

Bitter much?

#70 TnT on 11.12.13 at 9:08 am

#66 realtors are scumbags

It’s so obvious that TnT is a out of work realtor who hasn’t made a sale in months or even over a year. Many realtors have had to get a real job as sales are hard and few to come by. You have to wonder why these realtors are here posting their propaganda if the market was doing so well? Lol TnT the condo market is finished. Try selling a condo and watch it sit on the market without any offers and even after price drops. People are trying to unload their money pit condo that will fall In value for years to come. Condos should see a 50% drop when all is said and done.

**********

OK.. I see… you think I am a realtor too…

You and the recharted Rechart have lost it….

Thanks for the entertainment :)

#71 recharts on 11.12.13 at 9:18 am

Condo Market early update

November Last year

416 Sales 987(YoY -25.1%)
905 Sales 392(YoY -26.5%)

Where are we today

416 Sales=233
905 sales=93

We are one third into the month of November and the sales are 25% of what they where last year.

As you can see below the sales are going down in flames (what you see is a 30 days running average, the reality is worse) and the prices thanked.
http://img6.imageshack.us/img6/9928/p1kd.png

If we eliminate the sales for condos over 500K then we have literally flat prices.

http://img811.imageshack.us/img811/3710/u0b0.png

The flat prices are also confirmed by the Median price value in the firs chart where the above 500K sales were included.

The hype regarding prices going up has its grounds in higher end condos being sold discounted which is normal for a downturn in the market. Smart people/money going out…

@TnT: As you asked me I will no cry for all the suckers trapped in this market.

Of course you we will continue to see from TREB desperate attempts to make the above look decent but let’s not forget that at this point they are on the same page with the government: if this blows up ..it will not end up well!

#72 TnT on 11.12.13 at 9:30 am

#70 recharts

You have been posting this doom and gloom for quit some time however you have no idea if people made a profit or not.

You don’t know if it’s a person or a company selling the condo.

You post listed price, sold price and DOM however you do not list bought price.

The lost investment you keep crying about is only realized upon the sale IF they sold for less than what they bought it at.

There are other scenarios where it’s a large company holding a bunch of condos that still made a profit after all the sales are averaged out. Some sold way over and some sold for asking and some could sell well below market in a fire sale to dump product.

In the end Toronto is a better place for all these condos. Skyline is better, down town core is better.

#73 recharts on 11.12.13 at 9:32 am

Damn! #70 price tanked not “thanked”

@Garth: you must be running on low resources otherwise I can’t explain why it is so difficult to attach tags to your articles

Also it should not be difficult to allow the authors to edit their posts to avoid unnecessary traffic like this message.

#74 Life With No Fixed Address on 11.12.13 at 9:57 am

It’s déjà vu all over again. I miraculously sold my Florida condo in 2006 at the right time. In hindsight, it was a nano second after the marked turned but while the koolaid was still so thick that no one could see the bottom of the glass. For several months before, and almost two years after the US national realtors talking heads insisted all things housing were rosy, dredging up numbers to back their position. Then came the infamous “the situation is contained” line which was repeated daily by the realtors, the US Treasury Secretary and Ben Bernanke and duly reported daily in the media. By mid-2007 there was no denying it, the music had stopped. Home values had shrunk dramatically.

#75 Breaking news on 11.12.13 at 10:00 am

We are not going to have winter and snow this season because the Beaches area is “hot”. We received reports that palms started growing on the shores of Lake Ontario
The developers have already applied for building permits for building all inclusive resorts in this area.
If the Beaches area continues to be so hot the Ontario Lake’s name will have to be changed so “Fish soup” due to rising temperatures.

Trinidady ‘n’ Torongo

(Garth..back to you in studio)

#76 frank le skank on 11.12.13 at 10:08 am

#47 TnT on 11.12.13 at 12:09 am
They (condos) will not be torn down, they will not stay empty. You keep saying the condo market will or is crashing… have fun with that…
——————-
I don’t think anyone said that these new condo buildings will be torn down or that they will stay empty. The term crashing is in reference to the price of condo’s. The downtown market is saturated, investment properties will be rented at a loss and it is possible that there will be high vacancy rates.

#77 Smoking Man on 11.12.13 at 10:20 am

Goldman is one of the largest financial players in the world. You are a crane operator. — Garth
………………

Not a crane operator, a muppet, we are all muppets

#78 TnT on 11.12.13 at 10:42 am

#74 frank le skank

#47 TnT on 11.12.13 at 12:09 am
They (condos) will not be torn down, they will not stay empty. You keep saying the condo market will or is crashing… have fun with that…
——————-
I don’t think anyone said that these new condo buildings will be torn down or that they will stay empty. The term crashing is in reference to the price of condo’s. The downtown market is saturated, investment properties will be rented at a loss and it is possible that there will be high vacancy rates.

********

Heh… I did not mix up economic crash with physical crash. Just pointing out that having them there is great. It adds new life to the inner core which is a good thing.

This condo boom has made a lot of people rich and this downturn that everyone speaks of has not happened.

#79 john on 11.12.13 at 11:42 am

Looks like we a have a few realtor people here who are a Little touchy today. TnT you are fooling no one and it is obvious who you are. I am sure many like you will find jobs more suited to their education after the crash serving french fries.

#80 Mister Obvious on 11.12.13 at 11:50 am

#58 ApplesToOranges

Sorry to hear about your difficulties finding good rental accommodation in Vancouver. You need to be prepared to spend $2500 to $3000 per month… about half the outlay of buying with a very large mortgage. And in Vancouver, what other kind is there?

Regarding your impatience with the Canadian housing crash: The thrust of this blog has never been to predict a great calamity on a specific date.

Rather, it seeks to inform us about a slow, silent calamity that has been building for many years. That is: the relentless accumulation of debt by misguided, innumerate Canadians for the sole purpose of buying into a market with very bleak upside potential.

Fundamentals strongly indicate that the market has peaked. This has clobbered any remaining rationale for purchasing in the frothy Canadian cities.

It’s pointless debt waiting in the wings. It will bite hard in the final act. That’s what ‘Greater Fool’ is about.

It’s an extremely hard concept for the masses to grasp but Garth has been plugging away at it valiantly for a long time.

#81 TnT on 11.12.13 at 11:56 am

Another reason to stop crying wolf…..

http://www.theglobeandmail.com/report-on-business/economy/housing/forget-schools-and-parks-canadians-increasingly-want-to-live-near-transit-report/article15386788/

#82 miketheengineer on 11.12.13 at 12:02 pm

#58 ApplesToOranges

I am no expert on this, but a RE agent I knew used to help people from out of town to find places. Recommend you contact 3 RE agents in the area, and talk with them about rentals in Milton. Personally, if I had to move I would look at Acton, or Georgetown…but everything here is freaking expensive….and way way over priced.

Recommend…get into any rental…put stuff in storage that you have…then look for a better rental, then move when ready. Buying now is Risky, unless you already own, and are going from Apple to Apple. If you are buying something more expensive or Apple to Orange move, so to speak, you risk loosing your equity….Garth has stated this soo many times, your equity is at risk, so why risk going bankrupt…?

Also, choose a home within walking distance of Go Station, food stores etc….well worth the little bit of price premium for the home, since you have kids and can “walk” to stuff…and look for a “park” close by.

Right now it “sucks” to purchase anything here, and I don’t know how other people do it…I really don’t.

Mike

#83 mousey on 11.12.13 at 12:03 pm

Dear Blog Mates,
Anybody care to share insights on the White Rock-Crescent Beach-Ocean Park, BC market? Thanks.

#84 miketheengineer on 11.12.13 at 12:05 pm

#58 ApplesToOranges

Oh…I forgot to mention….the drive into Toronto is brutal in the morning…I hope you are going to use the go-train.
Virtually everyone in Milton, works in Toronto, so the traffic is BRUTAL.

#85 The real Kip on 11.12.13 at 12:05 pm

“#77 Smoking Man on 11.12.13 at 10:20 am
Goldman is one of the largest financial players in the world. You are a crane operator. — Garth
………………

Not a crane operator, a muppet, we are all muppets”

You must be talking about a different Goldman Sachs, I was talking about this one below. Do a search for criminal activities at Goldman Sachs and your browser will overload, even a crane operator can see it. Who’s the muppet?

http://www.goldmansachs666.com/2013/05/goldman-sachs-criminal-bankers.html?m=1

#86 DUI on Money Road on 11.12.13 at 12:21 pm

#8 JSS on 11.11.13 at 9:24 pm
———————————
check the dealer’s cost at carcostcanada.com

it costs a couple bucks to sign up, but then you’ll see for example that the dealer paid 23k for that car, so why would they sell it to you without a profit? So take what they paid, add a reasonable profit for them, and then give them a reasonable offer!

#87 TnT on 11.12.13 at 12:21 pm

#79 john

Looks like we a have a few realtor people here who are a Little touchy today. TnT you are fooling no one and it is obvious who you are. I am sure many like you will find jobs more suited to their education after the crash serving french fries.

*********

Wow.. calling me a Realtor for pointing out the obvious that does not conform to your hopes and dreams of a RE Market crash is just sad.

This blog thrives on Garth’s golden rule of balance, I am just applying that to opinion.

The only thing I have not been called now is a Gold Bug Metal Head but the day is still young….

#88 DUI on Money Road on 11.12.13 at 12:34 pm

#46 Ole Doberman on 11.12.13 at 12:07 am
——————————————–
The Canadian average by no means relates to a local market. See Mark #5 response….stats really should be broken down per city, and by dwelling type. National and even city averages shouldn’t be reported by the MSM.

My buddy bought a house (~250k) in a small town in 2007 and sold it in 2012 for a loss (despite putting work into it, and despite the national average being up significantly).

What does this tell us? That prices are local, and depend on dwelling type, demand (and supply) for that dwelling type, and the ability of someone to afford buying it.

#89 Spiltbongwater on 11.12.13 at 12:36 pm

Is throwing myself in front of cars and sueing the drivers a viable career choice? I am thinking of ways to make more income, and reduce my expences. laying in a hospital bed for 3-4 months and getting insurance $$$ seems to fit the plan like a glove?

#90 Patrick on 11.12.13 at 12:45 pm

Garth….here’s a short movie about why working with an agent is a good idea, as well as reasons you should sign a buyer agency agreement.

It also touches on presenting a clean offer to the seller, with no financing conditions.

http://www.agentinottawablog.com/2013/11/the-buyer-agency-agreement-to-sign-or.html

I liked the part about me being ‘really, really smart.’ Dodgy after that. — Garth

#91 Holt Crap Wheres The Tylenol on 11.12.13 at 12:54 pm

#58 ApplesToOranges

Others have commented quite correctly re drive times and locations. It really will depend on where you have to work. If you are heading east of Milton, hold on to your heart pills. If you are driving west its a free ride!
I’m in Oakville, a little hard to get anywhere quickly traffic is bad, but if you have $600K to $8M we have lots of places for sale. Good luck on the move, you might want to consider Georgetown pretty pricy but close to highways, Acton very reasonable but way out in the country. Oh yes stay away from Brampton cheaper prices but crazy busy and well lets just say a little ethnically different.

#92 aprilNewwest on 11.12.13 at 1:02 pm

#83 mousey. I don’t follow house listings but condos have taken a big drop and the decline is only beginning.

#93 frank le skank on 11.12.13 at 1:04 pm

#78 TnT on 11.12.13 at 10:42 am
This condo boom has made a lot of people rich and this downturn that everyone speaks of has not happened.

————————–

I do agree that the increase in condo’s has made downtown TO more lively. You are correct, the downturn has not happened yet, are you implying that it won’t?

#94 aprilNewwest on 11.12.13 at 1:08 pm

#78 TnT – Don’t worry TnT, it’s on it’s way.

#95 Stupesing in Cabbagetown on 11.12.13 at 1:11 pm

#85- The Real Kip: and let’s not forget The Great Vampire Squid.

#96 beefoot on 11.12.13 at 1:26 pm

Hi Garth

We know that the housing bubble has to do with the cheap money due to extremely low interest rates. Does the low interest rate have the same impact on the equity market? If so, what’s the best play against the equity market bubble? Thanks.

What bubble? — Garth

#97 The real Kip on 11.12.13 at 1:42 pm

“#94 Stupesing in Cabbagetown on 11.12.13 at 1:11 pm
#85- The Real Kip: and let’s not forget The Great Vampire Squid.”

Yup, what a great read. I find it hard to believe that anyone in this forum should care what the criminals at Goldman Sachs think about Canadian real estate, but most here blindly follow the leader.

http://m.rollingstone.com/politics/news/the-great-american-bubble-machine-20100405

#98 mike on 11.12.13 at 2:04 pm

http://ca.finance.yahoo.com/news/soaring-farmland-prices-crisis-making-don-pittis-100242744.html

Canada’s soaring farmland prices a crisis in the making

overpriced by 3/4

#99 Oceanside on 11.12.13 at 2:07 pm

#86 DUI on Money Road on 11.12.13 at 12:21 pm
#8 JSS on 11.11.13 at 9:24 pm
———————————
check the dealer’s cost at carcostcanada.com

it costs a couple bucks to sign up, but then you’ll see for example that the dealer paid 23k for that car, so why would they sell it to you without a profit? So take what they paid, add a reasonable profit for them, and then give them a reasonable offer!
_____________________________________________
Having been around automobiles and sales for a lot of my life tells me that if this dealership is into a 6 model year old Lexus with 85,000 k they are buried and should write it off. A reasonable profit should be available unless they over allowed the trade value on a new high end car, if so they should have done well on that deal.

#100 recharts on 11.12.13 at 2:07 pm

RE: DT condos-too many with no infrastructure surrounding them and with very poor demographics.

With the current low rates, it has been hysteria to buy a condo in DT. Many reckless and young people applied for a mortgage and got one (a condo & a mortgage) although they do not have much money to pay for it

The idiotic thinking according with some made money at a greater fool expense reminds me an idea of how a brain surgery that went wrong can affect people. There were a couple of cases when the patient could not plan ahead neither look into his future.

His ability to anticipate and to mentally develop a model that includes options for his future starting from his present were ZERO

This is exactly the case of the idiots who put all these condos there in close proximity, high densification, no infrastructure and a very homogeneous set of people: young people.
IMHO This is a time bomb for the city. There will be times when these properties will go down in value (WTF would like to live in a shed of 300-500sqf? ) and less and less people will be interested in living in them..it will be a deadly spiral for the area and it will end up exactly where they did not want it to go: the “donut syndrome”

This is also the case of those who say that some made money when that was at the expense of a large mass of other idiots, which idiots actually will bring everything down when they will default. At that time the idiots who made money will have their gains reduced to zero by various factors like inflation and high city taxes to fight the disaster that was planted downtown.
These shitty buildings are new and they are having problems. By the time when they age we will be experiencing “the asshole city downtown syndrome” when these buildings will all need repairs in sync and streets will be closed to fix various problems

All in all the DT phenomenon is RE masturbation and speculation
As far as I remember we were the city with the largest number of condos in construction beating by far cities like Mexico City or NY who have large populations.

#101 Ron on 11.12.13 at 2:08 pm

Economist Paul Krugman, and Robert Shiller , both who won a Nobel prize for their work say Canada has a housing bubble and we are in for some pain.

Canada’s Mr. Klump everything is A OK. Who do you think is right????? If you go with what Canadians are doing with their wallet, MR. KLUMP!

#102 Junkieman on 11.12.13 at 2:08 pm

Off topic but interesting insider information regarding QE

gawker.com/former-fed-official-quantitative-easing-is-a-huge-mi-1463000080

#103 recharts on 11.12.13 at 2:26 pm

Ray Dalio: Fed will not raise rates for several years. They can’t. Stocks will return 4%/year for the next decade.

#104 recharts on 11.12.13 at 2:32 pm

Forgot the link (Ray Dalio)

http://www.businessinsider.com/ray-dalio-at-dealbook-conference-2013-11

#105 Another one bites the dust:Finland is going down in flames :-) on 11.12.13 at 2:49 pm

Soon Canada will remain the only country in the packs.

http://www.bloomberg.com/news/2013-11-11/norwegian-housing-bubble-seen-by-shiller-deflating-mortgages.html

High Flyers’

When it comes to residential property, Norway is among countries such as Canada, Australia and Switzerland considered “high-flyers” in the past few years, according to Goldman Sachs Group Inc. These markets have benefited from robust recoveries as well as a significant dose of “inadvertent” monetary policies from the world’s largest central banks. Norway has seen some of the most dramatic increases, with house price gains of close to 30 percent since the first quarter of 2009, compared with increases of more than 20 percent for Switzerland (SZRES) and almost 40 percent for Israel, according to an Oct. 23 Goldman Sachs report.

The average home price in Oslo was about 4.55 million kroner ($740,000) last month, according to a report by real estate brokers, versus the $806,000 in New York as of Sept. 30, Real Estate Board of New York figures show, and 331,338 pounds ($529,743) in London.

Surging Norwegian prices, driven by low borrowing costs, have helped fuel consumer debt to twice disposable incomes, prompting warnings from policy makers and economists that the development is unsustainable.
Hard Landing

In response, regulators introduced measures to cool demand, including capping loan sizes at 85 percent of a property’s value as well as higher capital requirements and risk weights on mortgages. House prices slid a seasonally adjusted 1.5 percent in October from a month earlier, dropping for a second month, according to data from the Norwegian Real Estate Agents Association.

Nordea Bank AB (NDA), the largest Nordic lender, last week forecast that house prices will fall 15 percent to 20 percent over the next two years, forcing the central bank to cut rates twice next year, from the current 1.5 percent.

Nordea’s predictions would mean a hard landing for the housing market, dragging down residential investments and private consumption, DNB’s Haugland said. It would take a series of rate increases and a sharp downturn in house prices to spur a crisis, which “is not in the cards,” Haugland said.

DNB shares slid 1.2 percent to 104.4 kroner in Oslo, paring this year’s gain to 48 percent.

Psychology is overtaking the market, said Terje Halvorsen, chief executive officer of DNB Eiendom, a subsidiary of DNB. People have become cautious, setting off a domino effect that is slowing activity in the market while they wait to see what will happen, he said.

#106 jess on 11.12.13 at 3:44 pm

Stupesing in Cabbagetown

and when the ministers are lord + lobbyist

e.g.” present trade minister was chairman of HSBC, presiding over the bank while it laundered vast amounts of money stashed by Mexican drugs barons..”

http://www.monbiot.com/2013/11/11/why-politics-fails/

#107 EXILED on 11.12.13 at 4:04 pm

Mr Turner: Sir, why can’t I get the Efn Diety economic update? Are you watching it? Where is it, not on BNN!

#108 TnT on 11.12.13 at 4:15 pm

#93 frank le skank

I do agree that the increase in condo’s has made downtown TO more lively. You are correct, the downturn has not happened yet, are you implying that it won’t?

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

I’m implying a ray of sunshine on the doom and gloom that is constantly being posted but never materialized.

A downturn is very possible as every market has it’s peaks and valleys but I don’t think there will be a “condo crash”.

We live in different times and the variables that are factored in are not the same as previous models people use for comparison.

Difference (off the top of my head)…

ZIRP – cheap money

Complacent Government with powerful RE lobbyists

A global economy

China is a modern economic powerhouse and it easier for their citizens to relocate with their cash

Thanks to oil prices Middle East is flushed with cash and turmoil making it more desirable to relocate

Baby Boomer demographics

HGTV

Social Media

Factor in these new variables with traditional ones and my bet is on no “crash”, no vacant empty buildings, no widespread stories of condo owners claiming bankruptcies…

#109 jess on 11.12.13 at 4:45 pm

An illuminating report.
http://www.compasscayman.com/journal/2013/11/06/-I-never-felt-I-was-a-money-launderer-/

===================
san F …twitter agreed to stay in the city in exchange for a payroll tax break that could add up to tens of millions in savings over six years.

The question is: On the whole, who’s getting the better end of the deal? Twitter and its employees, or San Francisco and its residents?

http://www.sfgate.com/technology/dotcommentary/article/Weighing-benefits-of-Twitter-deal-with-S-F-4929365.php#photo-3310078

http://www.buzzfeed.com/justinesharrock/the-twitter-documents-you-didnt-hear-about-last-night

#110 just an observatiion on 11.12.13 at 4:47 pm

Can this tiny balls blog explain why are farmlands soaring in value or would this be to racists of a question ..LOL..????????

#111 Suede on 11.12.13 at 4:54 pm

Gold got a slap today. Fed putting taper talk into the media for a December target.

So much noise, not enough music.

#112 Canadian Watchdog on 11.12.13 at 4:54 pm

There it is on the headlines…

*FLAHERTY SAYS HE’LL INTERVENE IN CANADA HOUSING IF IT’S NEEDED

#113 Canadian Watchdog on 11.12.13 at 5:16 pm

*FLAHERTY: SAYS WILL NOT HAVE FIRE SALE OF GENERAL MOTORS SHARES.

At least not until subprime auto lending implodes!

#114 frank le skank on 11.12.13 at 5:20 pm

#108 TnT on 11.12.13 at 4:15 pm
The “new” variables you listed won’t have any meaningful impact. These variables can’t be quantified anyway so its based on speculation, something I personally am not willing to bet my money on. The CORE message of this blog is diversity and balance. Some people choose to focus on certain topics and miss the bigger picture. You need to read the blog on a daily basis if you wish to get the entire picture.

#115 TnT on 11.12.13 at 5:30 pm

#114 frank le skank

#108 TnT on 11.12.13 at 4:15 pm
The “new” variables you listed won’t have any meaningful impact. These variables can’t be quantified anyway so its based on speculation, something I personally am not willing to bet my money on. The CORE message of this blog is diversity and balance. Some people choose to focus on certain topics and miss the bigger picture. You need to read the blog on a daily basis if you wish to get the entire picture.

*******

Heh.. that’s funny… been reading for years.. cashed out on my second house, renting and fully invested in ETF’s thanks to Garth blog.

#116 Toronto_CA on 11.12.13 at 5:34 pm

110 just an observatiion on 11.12.13 at 4:47 pm
“Can this tiny balls blog explain why are farmlands soaring in value ?”

It is a bubble caused by cheap easy credit. The same as with houses and condos.

That’s my take.

#117 recharts on 11.12.13 at 5:41 pm

He is here with a clear agenda, to bring us some light, like we don’t have enough from his brother in arms, the realtors.
The list that he posted is a fine inventory of the RE bullshit argumentation.

I did enjoy that “the Beaches is a hot market” statement supported by one example :-))

In that sense here is one example reported today:

W2765105

Initial price 1349900
Relisted 1219000
Sold for 1096460 81% of the initial asking price

By the TnT logic this neighbourhood must be crashing and burning because the house sold 253440 under the asking price, 208 days after being listed for the first time.

#114 frank le skank on 11.12.13 at 5:20 pm

The “new” variables you listed won’t have any meaningful impact. These variables can’t be quantified anyway so its based on speculation, something I personally am not willing to bet my money on. The CORE message of this blog is diversity and balance. Some people choose to focus on certain topics and miss the bigger picture. You need to read the blog on a daily basis if you wish to get the entire picture.

#118 Alberta Ed on 11.12.13 at 5:46 pm

We can be sure that the mouth-breathers (a.k.a. business reporters) at CBC, the Calgary Herald and the G&M will faithfully regurgitate the latest CREA stats, just as they did the previous ones.

#119 aprilNewwest on 11.12.13 at 6:10 pm

$108 TnT – No one said there would be a “crash” but a correction which is happening, and not likely to be a small one. You sound like someone who is constantly in denial about the downturn… wonder why………..

#120 Inglorious Investor on 11.12.13 at 6:30 pm

#116 Toronto_CA on 11.12.13 at 5:34 pm
#110 just an observatiion on 11.12.13 at 4:47 pm

From what I hear, farmland prices are also soaring in anticipation of much higher global food demand.

However, just as housing has gone literally vertical in the big cities, some predict so too will farming. See http://www.verticalfarm.com.

If vertical farms work, the farmland thesis could decompose like discarded vegetables. I suppose we could always build more condos?

#121 Inglorious Investor on 11.12.13 at 6:48 pm

#112 Canadian Watchdog on 11.12.13 at 4:54 pm

Flaherty could prick the housing bubble any time he wants. He just doesn’t want to initiate a crash or do anything to harm the banks’ bottom lines. He’s kind of between a rock an a hard asset.

I’m not saying I want the government to intervene. Far from it. I think the government should have never gotten involved in the first place. The bubble is largely their fault.

You don’t ask the arsonist to put out the fire.

I think F should return the markets to sound lending principles and then just get out of the way. Let the markets take care of it.

#122 TnT on 11.12.13 at 6:59 pm

#117 recharts

Your post is very much like CREA’s data – selective and skewed to fit your agenda here playing chicken little.

As noted – #12 TnT
Houses in The Beaches between 500 to 700K is HOT.

I live here and see it first hand.

You seem to be having a problem with this statement and have been crying all day.

#123 Steven on 11.12.13 at 7:38 pm

Considering that commissions on property sales are a matter of financial life and death for realtors one could hardly be surprised by their attitude towards you Garth.
If they were aware of me they would likely consider me a nobody or public enemy number one depending on their frame of mind.

#124 frank le skank on 11.12.13 at 7:48 pm

#115 TnT on 11.12.13 at 5:30 pm
Heh.. that’s funny… been reading for years.. cashed out on my second house, renting and fully invested in ETF’s thanks to Garth blog.
——————————————
I guess I’m preaching to the choir!

#125 jess on 11.12.13 at 7:50 pm

Have a look at the night sky of north western dakota
natural gas flaring…

http://news.nationalgeographic.com/news/energy/2013/10/131009-budget-woes-darken-space-view-of-gas-flaring/

#126 Smoking Man on 11.12.13 at 8:45 pm

http://www.thestar.com/opinion/commentary/2013/11/12/mayor_rob_ford_cant_stop_fording_and_never_will_mallick.html
……………………………………………..
Losers, At Toronto Star

Heather Mallick another scathing chirp of FORD.

11 comments allowed then they close them. Why ?Heather gets chirped. They pull the plug.

Communists. Hahahahaha

That’s why I stay here. Democracy at it finest.

#127 GUY GADBOIS on 11.12.13 at 9:12 pm

The latest is The Financial Times, warning that our housing market “is perched precariously at its peak.” This comes hard on the heels of a Goldman Sachs report calling for a “large correction” in the Canadian real estate scene.

we are doomed.

sell and quick

#128 enthalpy on 11.15.13 at 12:20 am

So what does one short to profit from a collapse ;)