It’s ancient history now, but lives on in my mind. Seven years ago my little buddy, the minister of finance, dropped a budget on my desk that most people thought was a yawner. Buried in it, I found, was a provision that would allow people to borrow mortgages that need not be repaid for 40 years, or to buy houses with no money down, which the government would backstop.
It was 2006. The US real estate market was starting to implode after reaching bubbly, frothy, gaseous heights. I sat in the House of Commons and sent F a note. Won’t this just encourage the American excess to happen here?, it said.
He didn’t answer. But nor did I expect. I was already in monumental crap with the prime minister over my daily blog and my dangerously independent ‘tude. In fact it wasn’t long before the Chief Government Whip – the guy who can move your office to the nether reaches of the worst building on Parliament Hill (which, in a few weeks, he would do to me) – pulled me behind the curtains and said this: “The prime minister expects you to be a team player. Will you do that?”
Of course, I said. Then I went to my job on the Finance Committee and caused enough stink to have public hearings called over this 0/40 business. Within months two things happened. The budget passed, because nobody cared much about mortgages. And I was thrown out of my own political party by the PMO, destined to lead a ghastly, bitter, twisted and pathetically squalid existence writing a daily blog for a bunch of moldy, blinking, pasty-puss, basement-dwelling renters.
Well, here we are.
No more will CMHC insure houses bought with nothing down. Gone is the 40-year amortization, reduced to 30 and ultimately back to 25 years. In other words, little F was forced to roll the clock back to 2006. Along the way, to chill the sweaty, heaving housing beast he prodded, mortgage rules were tightened and banking regs toughened.
The price of housing has exploded since that budget, which made money irrelevant for people buying real estate. Affordability has eroded, even though mortgage rates plunged following the 2008 financial crisis. Household debt has erupted to levels previously unseen. Mortgage indebtedness has bloated to $1.2 trillion. CMHC’s exposure to home loans, many of them high-risk, has doubled to $600 billion.
Compared to both rents and incomes, homes have become largely unattainable for most, and absolutely so for the young. The nation has embraced real estate as a growth industry while we lose ground with manufacturing and resources – a move other countries have proven is fatal. Home ownership levels have soared to 70% of the population, while savings and investments plunged. A third of us are retiring with mortgages, and four in ten say they struggle to meet the monthly.
By every measure, F failed. The era of zero-down and lifetime mortgage payments – resulting in an eruption of condo-building and frenzied, assembly-line house construction – was a crude attempt to deregulate real estate and blow a speculative bubble in Canada. Two years later when rates collapsed, it was too late to tame the creature. Now we have the average SFH sitting at $850,000 in 416 and a million in Van. ‘Buy now or buy never’ has created a culture in which fools jump into bidding wars for junk housing they think can only go up. While sage, experienced players around the world shake their heads and warn of coming consequences, we flub on. Reality is for other people.
Given what I have seen, it’s always fun to watch F rewrite history, playing the role of the hero. “We have to watch out for bubbles – always – in markets around the world, including our own Canadian residential real estate market, which we keep a sharp eye on,” the elfin deity told reporters in Edmonton this week. “And I’ve intervened four times in the last several years and I’ll intervene again if I have to.”
Tough guy talk. From a man desperately hoping you won’t notice he lost his pants.
161 comments ↓
Just a slight correction Garth, CMHC has $600B of direct insurance, and $300B of 90% re-insurance of Genworth and other guarantors. For a total exposure of $900B to Canada’s subprime mortgage marketplace.
That’s right, 2/3rds of Canada’s mortgage balances outstanding are of such poor quality that they’re considered to be subprime and require insurance to go onto the bank’s balance sheets.
No wonder the market hit a brick wall when this limit was hit earlier this year!
People demand honest politicians but can’t be bothered to remember a promise made before an election. It’s too easy for Harper and co.
Tough guy talk. From a man desperately hoping you won’t notice he lost his pants.
……………………………………………………..
And I thought you guys where pals….Silly me.
Seriously Garth go easy on F – I think he’s nice guy.
But He’s not you,not every one is born with solid cahoonas. Some men are born with vig, never mind not going to use that word.
Bottom line F nice guy who respects or is afraid of the hyarchy.
Politicians are a lot like diapers; they should be changed frequently, and for the same reason.
No offence, of course, Garth :)
I am sitting in a restaurant in Toronto as I type this, and I just overheard a gentleman in slicked back hair and a bluetooth headset tell another “if you have a heartbeat, I will get you a mortgage”.
Good lord…can’t this man see the bubble right in front of his face….and he is the enabler. When everyone and their donkey can get a mortgage, what do you think would happen? I think wages will catch up to home prices too……bwahahahaha!
Flarety is providing a lot of indicators that the housing market is under control. What happened to the house price in the US will not happen in Canada.
There is no need to dispute the FACTS.
Anyone wanting to buy a house but chose to wait for house prices to drop has lost a lot of money over the years.
Interest rates will stay low for a long time.
http://goo.gl/hj4muf
How could Rob Ford have ever gone astray with Dim Jim shepherding him?
(he’s clearly “shepherded” the economy towards a disastrous ending)
Today, is the first time my whole family is reading Greater Fool together.
Me, my wife, three year old toddler, and my six month old.
It’s these precious moments that make up life.
These crack head CONservatives are on crack for lending out $600,000,000,000.00 in sub-prime / liar loans. Only a crackservative would tell the Canadian people they are conservative with tax payer monies. The Harper Crackservatives are the biggest socialist in Canadian history. $600,000,000,000.00 wow. They truly want to bankrupt Canada and Canadians.
writing a daily blog for a bunch of moldy, blinking, pasty-puss, basement-dwelling renters.
———————————————————
LOLOL…. So true
Got to start drinking during the week again. I can’t get away from keyboard any more.
Want a post it here but way off topic. I don’t want to detract from the F and Harpo bashing tonight. I want to join it.
This is only for the 26 smoking man fans.
everyone else go away.
http://dyslexicsmokingman.blogspot.ca/2013/11/the-shear-lunacy-of-science-and.html
But lets face it, Federal election around corner, the hero’s will keep the market alive and well up to that point. After that.?
I am even too afraid to call it.
Garth, have you ever thought of shorting it. Because, seeing the bubble and not being able to do anything is worthless…
Can any crackservative here honestly think that the harper Crackservatives are fiscally responsible? You would have to be a crack head to think the crackservatives are conservative . When I think crack head I think of conservatives.
Garth – I was a follower of your previous blog & to be honest, couldn’t believe that you didn’t see through Harper, et al. from the very beginning.
I’m so sick of hearing that ” team player” phrase. It’s just a nice professional, manipulative technigue to get people to follow their lead. And god forbide if you have an opposing opinion then your no longer a good little team player anymore.
Garth, what’s your take on Flaherty’s fabulous projected budget surplus? Could this be nothing more than a pre-election-campaign mirage?
The Elfin Deity is The Emperor’s New Clothes all over again. He has no clothes , let alone no pants. A chilling visual in a Canadian winter about to come .
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Flarety is confident that the books will show a surplus by 2015. With that achieved the Conservatives will get a majority in the next election.
In the meantime, a lot of noise is being stirred by the opponents to distort the FACTS.
Garth
It is better to die on your feet than live on your knees….
Unless of course you are wading hip deep in whisky… :)
146.8 billion in deficits since 2008 and F is forecasting a small surplus for 2015. A Con-servative in never- never land.
http://www.cbc.ca/news2/interactives/canada-deficit/
The prime directive of any politician is to stay in power the rest of the day. In that sense Garth, F was right and you were wrong
Indeed.
In the company of Heros…
It was a Stars&Stripes sojourn.
Ever the HomeOfTheBrave, if perhaps rather less these days the LandOfTheFree… for altogether too many, the Heroes’ Uniforms come emblazoned with the GoldenArches… and they’re the ‘lucky ones’.
The rest of the DriveByTrade are issued thongs.
Some aggregates may look impressive… the GranularGritty?… Not so much.
ExtremeBifurcation.
This isn’t going to end well.
What’s up with the phone # on that truck?
@ #18 Cici on 11.12.13 at 10:05 pm
Garth, what’s your take on Flaherty’s fabulous projected budget surplus? Could this be nothing more than a pre-election-campaign mirage?
———————————–
If you have to ask, it is definitely a mirage.
Just like how Flaherty booked a 100-year lease on the 407 as a 1-year gain to fake that he was balancing the Mike Harris / Ernie Eves books in Ontario.
Ya – same scam, new billions.
I like the Elfin Deity, maybe he smoked me on that tear full display a few days ago. Could have been fake.
I bought it.
It’s his boss that pisses me off. Look at how many guys he’s thrown under the bus.
No loyalty what so ever. It’s like he’s taken orders from a marketing company. Image is everything Image is reality. Afraid to take risks and follows a script to the letter.
Tells me as a man he’s not the bright, Vindictive and to not take lightly but he’s no Einstein that’s for sure.
F knows his place, he’s weak, He want’s that pension.
Leave the little guy alone…..
Not to worry, Garth.
Susan Pigg tells us today that real estate will be booming again by 2016 if not sooner. In fact, she has penned two, count ’em, articles just today suggesting real estate, residential and commercial, looks very ahead.
http://www.thestar.com/business/real_estate/2013/11/12/echo_boomers_set_to_hit_the_housing_market_in_2016.html
And here I thought that “echo boomers” were just embarrassing moments in crowded elevators better left forgotten……
The parliamentary budget office used access-to-information to obtain a document about a $3.1-billion national shipbuilding project after the defence department repeatedly refused its requests.
THIS STORY RE IRVING SHIPBUILDING IS IMHO ONE OF HARPER’S BIGGEST RIP OFFS IN CANADIAN HISTORY
http://globalnews.ca/news/962593/budget-watchdog-goes-through-access-to-information-for-arctic-patrol-ship-data/
…………………………………..
Contract KickBacks:
Lessons on How Harper’s Reform Party is Run:
A “Fat Cat Businessman” gains the trust of a government official. Soon “Fat-Cat Businessman” gives government / politician guy wads of cash in exchange for unfettered access to all the good juicy untendered / no-bid contracts.
If politician man can not find willing and corrupt businessman, in a pinch, the politician will use one of his family, friends or mistresses to start up a company or a fake charity. Then politician man gives them the contract, and then those two start issuing inflated invoices, bam, split the difference, done.
Everyone else in society is left scratching their heads trying to figure out why politician guy makes such weird and crazy policy decisions that make nO SeNsE.
http://www.cbc.ca/news/conservative-senator-leo-housakos-denies-involvement-in-questionable-fundraising-in-quebec-1.1874005
http://www.ipolitics.ca/2012/12/14/secrecy-surrounds-federal-suppliers-with-links-to-crime/
http://www.canada.com/News/Canada/Public+Works+suspends+contracts+with+Consulting/7170281/story.html
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What will it take for F to act….
Canadians with record debt levels. No action just warnings not to take on more debt.
Economy more reliant than ever on RE. No action to encourage manufacturing.
RE cartels fabricating stats. Nothing to see here. Good news makes me feel warm.
Thank You for your blog. I am a retired engineer and do my own investing. I find your thoughts and opinions helpful in making decisions about investments. There are a lot of loud contradicting opinions about inflation, gold, the US recovery and the global recovery. I have found your views to be sane and true.
Garth you did the right thing and thank you also for sharing your real estate and financial wisdom almost every day. Also the pictures and your humour, todays especially make us see the lighter side of this madness
Talk about a haircut happening for homes over the 700K range..
Zoocasa (Lawrence Dale) details today that #4 Wychwood Park in Toronto sold this week for $2.178M after 22 days on market, 87% of list.
In fact, it has been on sale forever, since 2011, originally priced at $3.495M
http://themashcanada.blogspot.ca/2013/02/price-change-8-4-wychwood-park-wychwood.html
That’s 62% of list, and 850 DOM.
I’ve been wrongly calling the market overvalued for years – reminds me of a saying an old (and wise) boss had on short positions: “people will stay stupid much longer than you will stay solvent”
Unfortunately this won’t end with a quick pop like in most markets but a long, drawn out erosion of canadian family incomes over many years. All those american retailers coming across the border now will pull back in a few years time. Like good Canadians, we won’t walk away from our houses but sit and pay off those mortgages.
Anyone holding air canada AC.B?
What a sweet ride that’s been the last few days.
Now if they would just fire that asshole in Toronto who works international departures, they would be a great airline.
Bang on, Mr. Turner. What you wrote in this post speaks volumes. As does that which your finely honed discretion did not permit you to divulge.
So why did John Cannis always send Liberal Ottawa literature from his office that dropping mortgage rates and low interest rates were savings Canadians $10,000, $20,000 or more in annual interest costs.
This was over many years from 1995 when 5 year fixed mortgage rates were 10% until that literature was when 5 year mortgage fixed mortgage rates were 4% in 2010 almost 2011.
We all know what happened to his office.
Just got a realestate brochure in my mailbox stating
a home in our neighborhood sold for 46K over price
in 14 hours. Of course we are not in a bubble! This is
the second bubble in 7 years, and I’m sure it will not
end any differently than the last one.
GTA Weekly Drop – November 9, 2013
http://gtapricedrop.blogspot.ca/
The recent rebound in housing was all lender and gov't driven. Shown here in two charts.
Lenders made a run on CMHC guarantees-in-force (on behalf of the government), allowing them to free up capital by purging risky assets onto investors' and her Majesty's taxpayer-backed balance sheet. This is why in August CMHC had to pull the plug and begin allocating MBS issuance.
Alas, the quote below just never get's old. But is more relevant today, now that his wife heads the Federal Reserve.
And so it's the same ol' switcheroo trick played by gov'ts and central banks again and again: They say one thing and then do the other.
At least F created and implemented the TFSA…..oh no wait….nevermind…..
It does make me wonder WWGD (what would garth do) were he in F’s position to bring RE to reality, put the RE cartels in check, yet keep the economy puttering along.
Nobody … I mean Nobody … not one economist … not one … er, … ah, … sorry, … who?
So, the arsonist is warning everyone that the fire is out of control and later will shake his finger and say “I warned you many times”, conveniently keeping mum that he is the one who started the fire.
“While sage, experienced players around the world shake their heads and warn of coming consequences, we flub on. Reality is for other people.”
Best summation ever. Don’t take off the rose colored glasses, all is fine, micro-condos and the Asianization of Canada is being rammed down our throats as developers and their God like lemmings sing their brilliance. Total suckers.
Meanwhile we are supposed to trust F’s vision of Canada’s economic prosperity when he cries in public over the train wreck,drug addicted Ford ? Talk about bottom of the barrel and it’s a rotten one to boot.
“…writing a daily blog for a bunch of moldy, blinking, pasty-puss, basement-dwelling renters.”
This is going on my business cards.
#7 pinstripe — “Flarety is providing a lot of indicators that the housing market is under control. What happened to the house price in the US will not happen in Canada. Anyone wanting to buy a house but chose to wait for house prices to drop has lost a lot of money over the years. Interest rates will stay low for a long time.”
Ah, Pinstripe. You really take your housing market cues from the finance minister? Show me one politician who’s ever answered the “is it time to panic?” question in the affirmative. Jean-Claude Juncker opined “When it becomes serious you have to lie.”
I regularly evaluate where my capital is best placed. I don’t do it by contemplating where I’d be if I’d picked different investments sometime in the past.
Take it from a professional:
http://www.youtube.com/watch?v=AjGXn249Fc0
WHEN THE BUBBLE BURSTS ALL OF THE RESPONSIBLE PEOPLE WILL BE PICKING UP THE TAB
IF the RE bubble pops in a big way:
– F will immediately lengthen CMHC terms for new mortgages and allow people to lengthen terms of existing mortgages, lest the poor people default.
– there will be a plethora of federal subsidy programs aimed at forcing private lenders to renegotiate terms with people underwater. Thanks go to taxpayer.
– tens of thousand of people that paid $800k for a piece of 416 crap or Vancouver shoebox will just walk away and leave CMHC with the default – no downside for people if they do not have assets. Taxpayer backstops CMHC.
– Rule #1 – Canadian banks never lose money – they just increase user fees – so expect all your bank fees to go up.
——————————-
The good news is that before this happens RE will have to go into a free fall, and for that to happen interest rates will have to go to what would now be considered improbable levels.
Hi Turner,
This was in my inbox. I thought you may like it………
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#34 Barold – I think you are right. A few years ago I felt we were looking at a pretty big short-term melt down (honestly things have been in bubble territory on the west coast for a decade).
But now I think, short of a huge increase in interest rates, we will be looking at a 10 or even 15 year grind back down to long term income to home price levels.
Canadians will just not sell at a price lower than what they paid for the house (or for that matter could have gotten for the house last year.) Of course some will be forced to sell at a loss, but most will hang on at all costs.
But what about all that foreign money…
http://house.yorkbbs.ca/article/estate_dynamic//1408507.html
#13 Smoking Man on 11.12.13 at 9:54 pm — “I am even too afraid to call it.”
— and —
#18 Cici on 11.12.13 at 10:05 pm — “Garth, what’s your take on Flaherty’s fabulous projected budget surplus? Could this be nothing more than a pre-election-campaign mirage?”
Here is an apropos saying:
“Without promotion, something terrible happens … nothing!” — P. T. Barnum
That’s why voters are sheeple. Generally speaking, they know last night’s hockey scores but don’t know what day it is let alone the lies that politicos molly-coddle them to buy votes, so Cici — you are correct. Harper et al are already planning another majority.
As far as SMan’s point on not calling it, this, this and this may be helpful, as no one knows what tomorrow brings.
Comment #7
Can you explain to me how a prediction can be a, “FACT”?
F looks and sounds like he’s gonna pop any day. He actually seems worse off than Ford!
He is struggling through a skin condition. Not easy when you’re in the limelight. — Garth
Vid 1.5 min – Here’s how Jim Flaherty put #cdnpoli budget together w “help” from Harper’s unelected backroom goons http://youtu.be/EpT9PL8RCw0
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There are two kinds of people in the world, those that respect authority and those that respect competence. Thanks Garth
Very recently F has stated he would not intervene again in market as he had done so numerous times so things were in control. He now says he watches very closely the market and is ready to act if need be. A tad bit nervous, I bet.
The industry to date has been creative and engineered workarounds and buyers continue to spend…so if he wants to ensure desired changes are effective, he needs to go BIG.
With the recent bullish MSM reports on sales/prices, I do expect him (or OSFI) to make a play again. when he does he will put on the Cape like Superman :)
#48 Trish Maple
I don’t know about you, but whenever I think “luxury”, colleges and students always spring to mind. As they do when I think “premium pricing”. I suppose you can charge “premium rents”, then turn a blind eye when inevitably 4 of them move into your luxurious 1 bedroom condo.
“Luxury” is easily the most meaningless word in real estate.
I almost choked last week when the F-Man talked about the “possibility” of a bubble… and again today when he made his spurious assertion about a budget surplus by 2015 (after the next election, of course). Izzy Stone, the noted Washington, DC, journalist, defined “politician” as “a professional liar.” The F-Man is a politician.
I’ve repeated many times on this blog how QE (and central bank policies and actions in general) are intended to benefit the banks, not ‘we the people.’ Any benefits that acrue to the real economy (e.g. jobs) is coincidental.
“The central bank continues to spin QE as a tool for helping Main Street. But I’ve come to recognize the program for what it really is: the greatest backdoor Wall Street bailout of all time.”
– Andrew Hussar
(Fed and Wall Street insider)
http://online.wsj.com/news/articles/SB10001424052702303763804579183680751473884
It’s been two years that we made our move to Europe. 24 month of Croissants and baguettes.
Not all is perfect in Cheeseland here, but when I look at my monthly obligations (no mortgage), I sleep much better.
Costco is the store I miss most. All else, not so much.
Government and media is busy backslapping themselves for a job well done, great banks and no bubble.
Another nail in the housing coffin that Garth pinned with his jumper photo in October.
For the housing bulls out there. Nobody tells you when the music stops. You have to listen for it yourself. It’s what makes capitalism go round.
Prices in the outskirts of the 416 are decelerating quickly along with listings as people are trapped. 1M plus has gone no bid.
And housing is very illiquid.
And let’s not tell people van and tor are different. They smell the same. Garbage trucks and street car rumbling all night must make for the full city experience. Let’s not forget stepping over passed out addicts. ( the only people I have empathy for in these cities). Toronto is the most boring city I know next to Calgary.
Regional centres at least an hour from Toronto are way better places to live and work. In Europe people can’t wait to find employment outside of big cities and move to smaller communities. And their cities are way better.
33 Hogtown – I dont know how much you can read into that price drop. All I see is that it went for FMV on
whatever day it sold. (I live 1000s km away) Was the
original place just out to lunch and/or the subsequent
drops just chasing the market down? Your opinion? Can
you provide any comparables over the last two years?
$2.1M is still a lot of money. Thanks.
Garth, I’m actually a fan of your blog. But this post really comes across as resentful, sad and pathetic. Yes, clearly Flaherty made a mistake in that budget and you were right and they were wrong.. but honestly man get over it.
As for all the critiques of the conservatives and the budget and the deficit (including Garth to a certain extent) get some perspective people. Canada has a deficit of around 15 billion this year? and we have an economy about 1/10th of the USA who has a $660 billion deficit (after years of trillion dollar deficits). And don’t even talk about the debacle that is Europe (other than Germany) and Japan, all with deficits that have been closer to 10% of GDP! Objectively speaking Canada has navigated the economic downturn incredibly well, and only biased people won’t give the credit they deserve.
My comments on the finance minister were concentrated on housing policy, and stand. The man would benefit from being more contrite. As for the deficit (this year $19 billion), Mr. Harper’s fiscal legacy will include adding some $140 billion to the national debt. — Garth
Garth Turner for Prime Minister !
I’d vote for him, would any others here at this blog do the same?
moldy?
Check.
blinking, pasty-puss?
Check!
basement-dwelling renter?
TRIPLE CHECK!!!!!!!!
Sometimes it seems Garth is writing just for me !!!!
I am not mouldy, otherwise accurate.
Tubby the economist couldnt manage a lemonaid stand. EG:Bloated debt, those stellar picks for senate. and he whacked garth.
Still renting in Van for 2 bucks a sq. we could buy for 750, no thanks.
here in italy spending some of the investment dough. am convinced the average italian has the organizational skills of an 8 yr old. great food ,vino and scenery though ……
Moral of the story: Team players stay employed.
Flaerty isn’t to blame. He just the messenger.
http://www.youtube.com/watch?v=KfSTJSqCy5E
F couldnt see a bubble, even if he were michael jackson, and he was blowing… bubbles.
Blobby – “F couldn’t see a bubble, even if he were michael jackson, and he was blowing…bubbles.”
Oh, he sees it. He just can’t acknowledge it. As soon as people start to hear the word “bubble,” especially from the Finance Minister, they start backing off buying, and then builders and the big money start to lean on Flaherty.
He doesn’t dare acknowledge it.
48 Trish Maple on 11.12.13 at 11:33 pm
I particularly love the idea that students are going to rent tiny one bedroom apts in “Yorkville” (which it isn’t) they can’t share for $2000 per month. If the rental situation in this town is that tight we have a huge problem. Hopefully by the time CASA III is built supply in that area will have increased such that rents come down a bit for all us renters who live near Y & B. Plus I don’t think the buyers who are paying top dollar to actually live in the building would appreciate it being promoted as student rental accommodations.
Its now only a question of interest rates. Keep it low at all cost. If not, move away fast. This game can last many years. Sad.
Hi Garth
I am a university professor (37) and all I have is 200K. I don’t own a house. I wonder what is the best thing to do with it?
Thank you for your website and time
Abraham
More details, prof. — Garth
“daily blog for a bunch of moldy, blinking, pasty-puss, basement-dwelling renters”
And Ford supporters. Consider this: Mob influence in Toronto and Montreal, too?
1. Guy with Ford video reported visits by American media players. Makes sense. And, as he said, “really scary mobsters”. Now, what interest does the mob have in videos?
The Mob are in the Protection business. Protecting their own people and business interests. This tells me they have an interest in his Highness.
2. That guy who wrote threatening letter to the other F, and went to his house shooting his mouth off, admitted he was stupid. Seems like petty mischief. Yet, in jail others were ordered into his beating. They messed him up real good. Was hushed up, no-one named as perps. Tightly controlled on the inside. Who ordered this beating, but the mob, or other large gang controlling prisons?
Again, who is being protected, and by whom?
How about the King St. ‘hit’ on the guy who might have the video? Who ordered this and why.
From day one I found it odd the push for ‘Subways subways subways’. First thing in my mind was fat building & construction contracts awarded. Again, who benefits? Who might be running the construction industry?
Even if better, cheaper that LRTs go in – they won’t be allowing this.
As predicted the high end of the market is taking pressure and it is going down.
you can not say that these guys just tried the market with an initially higher asking price.
They actually persisted for 4-7 moths. (progressive price reduction not shown but available)
Here are the best of the best. Of course there is more but I am not bothering with what is sold above -90% of asking anymore
MLS# Asking Sold Price % of Asking Discount DOM
C2747573 1799000 1475000 82 -324000 171
C2743998 1650000 1400000 85 -250000 146
C2772862 1186500 1010000 85 -176500 212
E2779098 1225000 1048000 86 -177000 144
C2771136 1100888 958200 87 -142688 26
E2696587 1249000 1111000 89 -138000 212
C2774246 2195000 2000000 91 -195000 63
For this batch, out of 60 homes reported as sold in To, 18 were above 1mil, 3 above 2 mil, see below
Price Histogram (100K bins)
Above Sales
300000 4
400000 12
500000 7
600000 6
700000 6
800000 5
900000 2
1000000 4
1100000 3
1200000 1
1300000 1
1400000 4
1700000 1
2000000 1
2100000 1
2400000 1
4800000 1
For this reason expect an increase for the average price in 416 and more B$ for TREB.
When I think of politicians, particularly those whose egos out shine lasers causing no end of misery for taxpayers (now why do I think of Duffy, etc.), I automatically think of those countries where if some of this stuff happened there, there would be blood (literally) in the streets. Periodically, I envy those who are less civilized than us Canadians.
Thank you for your reply, I think you saved me once from buying an expensive house around 2008 in Calgary for 440K! had I bought that house, I would have been left with a house and a huge mortgage and no cash.
I now live in Vancouver and a big portion of my cash seating in TD bank mutual funds. I am renting and I am single. I look forward to forming a family. If you were me what would do now with 200K?
I think Mr. Flaherty is right on track and can deflate or reflate the economy as he sees fit. I said months ago he would balance the budget in time for the election. You scoffed at the mere mention of it but, even though it’s straight up electioneering, it now appears it will happen.
Steady as she goes Mr Flaherty, the Boomers will buy into it and vote as a block, we always do. With Gen-x, Gen-y and Gen-whatever asleep at the switch, you have a very good shot at another government.
#55 rainclouds
——————
Heaven and Hell
Heaven Is Where:
The French are the chefs
The Italians are the lovers
The British are the police
The Germans are the mechanics
And the Swiss make everything run on time
Hell is Where:
The British are the chefs
The Swiss are the lovers
The French are the mechanics
The Italians make everything run on time
And the Germans are the police
Yesterday my wife told me that she listened radio in her car and guy was talking how renting is like throwing money away, and owning is best thing ever since sliced bread.
She was so proud that we are not wasting money. And all that while she was half way thru money road…Sad sight
Just for fun I took her car radio out last night and in a hole in dash left a book, can’t wait for her phone call… I AM IN SO MUCH TROUBLE what do i do???
Hey SM, looks like bond prices on the way back down with yields increasing.
“The prime minister expects you to be a team player. Will you do that?”
Garth – you stood up for what was right, tried to protect the citizens. It was the right thing to do.
That picture – What can I say about Moose Jaw? Well, if you’re part of the witness protection program its a good place to live.
Garth et al:
If I sell (or lose) my existing home for any reason….job loss, bankruptcy etc.
I will never, ever own one again.
My income will not be able to sustain mortgage rates and home evaluations….
This is the “new” reality, and I have accepted it.
The taste for home ownership has now gone very stale and bitter in my mouth.
Just because I don’t comment much, please know that I value your posts. To be thrown out of Caucus now is a badge of honor. Truth will prevail. Scamming the electorate eventually leads to being turfed out at election time. Admire your work.
they are cheering a possible budget surplus of 3-6 billion yet CMHC exposure is 100-200 times that amount…
#63 JL on 11.13.13 at 1:26 am
Garth, I’m actually a fan of your blog. But this post really comes across as resentful, sad and pathetic. Yes, clearly Flaherty made a mistake in that budget and you were right and they were wrong.. but honestly man get over it.
As for all the critiques of the conservatives and the budget and the deficit (including Garth to a certain extent) get some perspective people. Canada has a deficit of around 15 billion this year? and we have an economy about 1/10th of the USA who has a $660 billion deficit (after years of trillion dollar deficits). And don’t even talk about the debacle that is Europe (other than Germany) and Japan, all with deficits that have been closer to 10% of GDP! Objectively speaking Canada has navigated the economic downturn incredibly well, and only biased people won’t give the credit they deserve.
====================================
I have made this comment several times before, but I have to keep repeating it because some very biased people keep saying something else with zero evidence to back it up. Just because Stephen Harper tells you he is a fiscal conservative – doesn’t mean he is.
Canada’s recent strength during the Great Recession had almost nothing with ANY Conservative fiscal policies. If anything they made it worse. The only reason there was any sort of a surplus was due to Liberal fiscal policies prior to them. A short sighted politically motivated cutting of the GST was/is still the stupidest thing ever done by this government.
The only reason our banks did not get in the soup the US banks did was because the Liberals refused to let BMO merge with RBC, and TD merge with CIBC. If those mergers had happened, we would have had our own “too big to fail” banks here.
There is a crap load of evidence that this government lacks any sort of foresight, and that most of it’s policy is purely politically driven and partisan. While the same charge can be made of most administrations – I find the current one the worst ever.
The current surplus announcement is a perfect example. 6 years of deficits and another one planned and wow check it out. in our election year where we still plan to run on our economic record – we finally manage to balance the budget.
Garth’s comment below.
==============================
My comments on the finance minister were concentrated on housing policy, and stand. The man would benefit from being more contrite. As for the deficit (this year $19 billion), Mr. Harper’s fiscal legacy will include adding some $140 billion to the national debt. — Garth
Interesting – Pension Plans
http://www.sacolafinancial.com/blog/
It appears to me that the RE market, especially in the big cities in Canada will continue to stay health and have modest gains as we move forward, they may not be the big gains of the past, but none the less they will be gains.
So basically the purpose of this blog predicting doom and gloom in the RE market has been consistently wrong and the posters delusional, expecting a 50% drop in price. Garth Turner it is time to admit you were wrong, it takes a big person to do that, do you have it in you?
Of course. If it were necessary. But my message has been clear and simple: no 50% crash, rather a correction followed by a lousy housing market for a long time, plus advice to be balanced and dversified in your finacial life, and not overweight in real estate. Didn’t your mom tell you not to exaggerate? — Garth
#20 pinstripe: “Flarety is confident that the books will show a surplus by 2015.”
*****************
He’s created a monster he can’t tame…he doesn’t know WHAT to do. We’re experiencing global suffering…but he plans to show a Canadian ‘surplus’ by 2015? The little twerp has lost control.
#61 Obvious Truth
Regional centres at least an hour from Toronto are way better places to live and work. In Europe people can’t wait to find employment outside of big cities and move to smaller communities. And their cities are way better.
*********
This is not an obvious truth but more of a personal preference.
People move into Toronto for work and excitement, to feel alive.
Then they move out of Toronto for House and a false sense of being in a “safe community” for their kids.
Then they get fat and wear clothes from Walmart and buy bulk food from Costco.
Then they visit the City and feel inferior then slag Toronto on blogs.
Hey Franco…. can you detail your views on the Quebec Condo Market or Ottawa if you wish?
I take it that Ottawa,Montreal and Quebec City “appear to you” to be small cities and are not included in you . Of course Victoria is a sort of marginal village and I don;t even bother to ask you about it.
Moving back to Canada was the biggest mistake of my life. Becoming 3rd world country at an alarming rate.
#63 JL: “Yes, clearly Flaherty made a mistake in that budget and you were right and they were wrong.. but honestly man get over it.”
***************************
“Get over it”? When? We’re still going thru it…still suffering the consequences of the numerous federal screw-ups. Is it possible for them to get anything right?
#69 Backwards: “Oh, he sees it. He just can’t acknowledge it. As soon as people start to hear the word “bubble,” especially from the Finance Minister, they start backing off buying, and then builders and the big money start to lean on Flaherty. He doesn’t dare acknowledge it.
**********************
Yes. His back is against the wall. I still think that’s why the feds are prorogued until January, trying to figure out where they go from here. (???)
#81 Jeff: “The prime minister expects you to be a team player. Will you do that?”
******************
Translation: Just do as you’re told and don’t ask questions.
#80 joblo on 11.13.13 at 9:51 amHey
SM, looks like bond prices on the way back down with yields increasing.
……..
When have you ever seen a trend go in a straight line, talk to me next week.
Until the muddle class comes back in the good old USA, low rates. It’s a fact jack…
# 78 b skytraina,
ha, forgot that ditty. thanks dude
love it here. very gracious people, and yes did have cold roastbeast in london
sipping a nice vino (cheap 6Euro)
i see f is thundering about how he will protect us from a housing calamity. he didn’t however remember to mention who created it.
A house in the neighbourhood has just been listed for sale at below market value. It turns out the home will be repossessed by the bank and potentially become a power-of-sale if it does not sell in the next week.
Question: Negotiate a purchase now hoping to shave down the price and grab before the bank takes it, or let the bank take it and risk losing it to other vultures when the bank unloads it through their process?
#87 Franco
This has been the theme for posters since 2008 (note the date on the post)
*******
#5 Jeff on 04.01.08 at 12:36 am
William:
Wake up neighbour! I am a Realtor in Vancouver and word on the street amongst Realtors is that we’re due for a 20% correction. And I am of the opinion that Vancouver will experience a 40% plus crash.
*******
Posters post “the sky is falling” and bombard us with silly numbers on RE that only the 1% of Canadians can even afford…
Then Garth posts diversify and balance to make us all better investors.
#88 Daisy Mae — “[Flaherty]’s created a monster he can’t tame…he doesn’t know WHAT to do. We’re experiencing global suffering…but he plans to show a Canadian ‘surplus’ by 2015? The little twerp has lost control.”
Not at all. Assuming he lasts that long, he and his boss will face the people in the fall of 2015 after having inherited a surplus, cutting the GST and presenting nine consecutive budgets in deficit. How do you run on that record? Declare proudly that next year the budget will be balanced and you’ll then be in a position to cut taxes for families that work hard and play by the rules, if only you get a mandate. Paint your opponents as irresponsible deficit spenders if they even think about increasing spending, or tax-and-spenders if they ponder increasing any taxes. Actually, just say they’re irresponsible tax-and-spenders regardless of the facts.
That, in a nutshell, is the Conservative platform for the next election. Promising a balanced budget and maybe some tax cuts for the year after the election is an integral part of the playbook.
“Reality is that which, when you stop believing in it, doesn’t go away.” — Philip K. Dick
RE#77 The real Kip on 11.13.13 at 9:40 am
I think Mr. Flaherty is right on track and can deflate or reflate the economy as he sees fit. I said months ago he would balance the budget in time for the election.
Anybody who believes any polician who says, “The budget will be balanced by the next election” is a stark raving mad fool.
Imagine us hoping for Inflation
Having exported our inflation for over two decades in the Great Offshoring to most Asian countries. We always used the “What is the China Price”? This accelerant was used to accrue natural resources from the Hewer nations such as Canada and Australia. Yet our credibility in the “but what do you make” category is woefully lacking, and continues to degenerate as we indulge in the mass orgy of selling homes to each other at higher and higher multiples.
If our Asian friends stop being able to produce and deliver economically viable goods to our shores then the great “Re-shoring” will continue unabated. We should embrace this trend as I believe we can compete with the manufacturing prowse of any nation, but not with their labour component. Will rising oil prices cause their delivery cost to rise to levels that make their products too costly?
I thinks that technology will resolve this Peak Oil Theory and make it a non factor going forward, as it has in the past.
Will inflation return with a vengeance when rates are normalized? This would certainly quell our aversions for yield in speculative ventures and return to savers the assurances of yield with safety. Will our governments saddle us with the debts of the big banks or do an Iceland?
If inflation keeps dropping even with all the QE and rate manipulation, as appears to be the global situation, we should then look to Japan as a precursor as to our markets and R.E. China today is the key. China today is Japan of the eighties and will follow the same deflationary spiral, with larger global implications.
Italy may yet slip on Greece and break China!
Garth, is completely right about the dangers in investing in individual stocks compared to diversity you get with entire market holdings like ETFs give you. Case in point, my sole individual stock I hold (only get through work and get a kick back) plunged recently by 7% in one day. Compared to my ETF holdings in my overall portfolio this has never happened. Lesson, get diversified and get rid of volatility and sleep much better.
#99 Ralph Cramdown: ” Declare proudly that next year the budget will be balanced and you’ll then be in a position to cut taxes for families that work hard and play by the rules, if only you get a mandate.”
*********************
Exactly. Will that be another 38% ‘majority’?
Binning Towers Point Grey created a you tube video in Mandarin. The Asian money I believe does raise prices and then all the common sheeple jump in at those prices armed with loose regulations and cheep money.
I wonder how long until Prime Minister Harper appoints Rob Ford to the upper chamber. He should fit right in with the rest of the senators and be the life of the party there.
My Hero Sir Robert Ford.
And now from city hall.
Things became heated when Minnan-Wong alleged Ford stood in front of him in “a threatening way” as debate on the motion got underway.”He stood very close to me in a threatening manner,” said Minnan-Wong. “It was deliberate.”Minnan-Wong asked for an apology. Heckling and shouting ensued, prompting the chair to call a five-minute recess.
……………..
I suppose when Mini-Wong goes to by briefs, no need for extra large.
#99 Ralph Cramdown “How do you run on that record? ”
Same way he ran last time, irrationally deny obvious dark clouds and keep home prices rising a little longer. Voters won’t reject a party ‘making them rich.’ The only real surprise is how long and to what destructive depths the Cons are willing to game the market for political gain. Canada may never recover from this cadre.
Garth, I’ve followed your blog for quite some time but can’t recall if you’ve done a specific blog offering step-by-step tips, for those wishing to take on a new lease for residential real estate (though you’ve done quite a few that speak to the financial benefits/savings).
Can you advise if there is such a blog in your archive. I google’d but given this subject is part of the narrative in many of your blogs, could not find…
#89 TNT
This is what I mean. People don’t get it. As a place of excitement Toronto doesn’t register. Ugly drab and frustrated people. Everyone wants to leave and go on vacation. Clubs are for 16 year olds. The arts and theatre scene isn’t as good as it was in the 90’s. Nice lake too. How much chlorine gets poured into it so the city isn’t overrun by the stench. Don’t get me started on the brown haze. Employers have an easy pool of labour so jobs suck. Companies are leaving too. When was the last large office building put up. Probably scotia tower.
We have cycling clubs, (50 k tomorrow aft you’re welcome to join)running clubs, golf clubs (sat for 20 bills byob) snowmobile clubs and everything else. Nobody even goes to the city to shop. They take trips to the US. Outing and shopping for the same price as one aggravating drive to yorkdale. No costco or Walmart but a nice tsc store.
Of course we have the time and space for this stuff. People are off work as stores close early and kids activities are close to home.
I’ve lived all over that city and probably cycled half the streets as a kid. There really isn’t anything you can tell me about TO. You might want to get out more though. Start with places that have major junior teams. Regional centres not suburbs. Where adults play more than kids. Bring your bike,clubs or curling gear. We’ll let you put up the first guard. TNT would make a good handle. I’m only worried about you or anyone else moving though. You won’t. But we could use a spare. Going for a walk to Local bakery and library.
MLS shows a total of 5477 listings for sale in TO (Condos and SFHs)
The number of properties priced at above $1M is 1084, that is 19% of them.
I don’t know who is a bigger imbecile here:
-the one who says that price decreases for properties above $1M do not matter since only 1% of us can afford them
-the one who lists a house for that price when only 1% of the population can afford it?
to-#110 Obvious Truth on 11.13.13 at 2:18 pm
what city/town are you in?
Even those who don’t like Rob Ford should condemn Character Assassination. CP24 just video loops the guy 24/7. Where was the outrage when Dolt On e-Guilty lost one Billion dollars in e-stealth? Or when Haarper kept lowering the GST long enough to get re-elected, then ‘bait and switch’ HST? Many services had to increase their tax collection- more than double, that right DOUBLE -OVER NIGHT. Finally after all these years we discover Haarper’s “hidden agenda”. Where is the media’s outrage when the agenda is exposed?
Your hero just admitted to buying illegal drugs while in office. — Garth
Interesting article about how Alberta is shining!
http://www.cbc.ca/news/canada/calgary/albertans-racking-up-debt-faster-than-rest-of-canada-1.2425314
Wondering whether credit cards used for mortage down payments?
#33 HogtownIndebted on 11.12.13 at 10:38 pm
Talk about a haircut happening for homes over the 700K range..
Zoocasa (Lawrence Dale) details today that #4 Wychwood Park in Toronto sold this week for $2.178M after 22 days on market, 87% of list.
In fact, it has been on sale forever, since 2011, originally priced at $3.495M
http://themashcanada.blogspot.ca/2013/02/price-change-8-4-wychwood-park-wychwood.html
That’s 62% of list, and 850 DOM.
…………………………………………………
Wonder how many offers they turned down in the past 850 days (i.e. spring 2012 in particular) that were well higher than the ultimate sale price??
Your hero just admitted to buying illegal drugs while in office. — Garth
There is no law to deny fudging the RE numbers. Is that OK?
I think that the law here is a false reference..
Principles are not enough to lead. Morals are also required. — Garth
Damn…I forgot to change the subject line…I am sorry Garth
It’s all over.
“The Teranet index, a weighted gauge of home prices in 11 major cities, eked out a 0.1% gain in October from September after standing still in that month.”
http://stream.wsj.com/story/latest-headlines/SS-2-63399/SS-2-381006/
TO June sales for above $1M: 291 SFH , 190 sold under asking (65%)
TO June sales for above $2M: 43
TO Oct sales for above $1M: 316 SFH , 203 sold under asking (64%)
TO Oct sales for above $2M: 59
These two months should not be comparable in any way, yet October seem to be a better month for expensive properties…WHY?
WHY is the number of above $1M increasing, WHY is the number of above $2M increasing ? why all these when only 1% of us can afford these properties?
My tinfoil hat is on….
given some (very little) credibility to F’s surplus game and lot of credibility to Garth’s housing fiasco approaching us, would it be wild to assume that the surpluses will be handed out to the failing banks at the time, who in turn will use (continued) fractional reserve banking methods with our own tax money and profit hugely and grow even bigger at the expense of the consumer….
#113 eddy on 11.13.13 at 2:57 pmEven those who don’t like Rob Ford should condemn Character Assassination. CP24 just video loops the guy 24/7. Where was the outrage when Dolt On e-Guilty lost one Billion dollars in e-stealth? Or when Haarper kept lowering the GST long enough to get re-elected, then ‘bait and switch’ HST? Many services had to increase their tax collection- more than double, that right DOUBLE -OVER NIGHT. Finally after all these years we discover Haarper’s “hidden agenda”. Where is the media’s outrage when the agenda is exposed?
Your hero just admitted to buying illegal drugs while in office. — Garth
…………
Don’t let garth disawang you.
I really like Jake Layton, and hate to bring thus up.
There is definitely a strong bias in the way MSM in this city treats people with right of centre convictions.
Say Ford was found in a rub and tug, in the police notes said he was naked, got a visual ladies.
Point is he would be crucified, in Layton case the cop got reprimanded for sharing the info.
Forget the billions, I think Toronto people just enjoy touching toes without a knee bend.
Yoga or something…
Your hero just admitted to buying illegal drugs while in office. — Garth
There is no law to deny fudging the RE numbers. Is that OK?
I think that the law here is a false reference..
Principles are not enough to lead. Morals are also required. — Garth
Then let’s admit that media has bigger problems than Rob Ford to discuss if they wish too.
Someone correctly observed that when bigger problems were on the table none of the those who are so vocal today said anything about those problems. Almost anything. The time allocated by media to this scandal is way too big.
That is because Ford is big fish and the hyenas always go after small prey.. that was eddy’s point.
It’s a story because he’s melting down, and people like to watch. The end is predictable. — Garth
#113 eddy — “Even those who don’t like Rob Ford should condemn Character Assassination.”
I do. John McCain secret black baby story? Shameful. John Kerry’s Swift Boating? Horrible. Rob Ford showing up drunk in public every month or two, sometimes at official events, and his own Mother telling the media that he should get a breathalyzer ignition interlock for his vehicle? NOT SO MUCH.
“Agents of character assassinations employ a mix of open and covert methods to achieve their goals, such as raising false accusations, planting and fostering rumours, and manipulating information.” If there has been any victim of character assassination here, it has been the Toronto Star, whose reports have been borne out by the facts.
#118 Rocko on 11.13.13 at 3:13 pmIt’s all over.“The Teranet index, a weighted gauge of home prices in 11 major cities, eked out a 0.1% gain in October from September after standing still in that month.
I
”http://stream.wsj.com/story/latest-headlines/SS-2-63399/SS-2-381006/
……………
Wishful bias kid, Oct prices always lower than Sept, please make a note to yourself to seek assistance from a financial advisor before you invest a cent.
Everybody but you knows about seasonal declines.
The fact that’s it’s up a touch us very bullish and unexpected.
#110 Obvious Truth
I hear ya OT, just playing the “walking over addicts” comment…
It all boils down to personal preference.
I lived everywhere in Toronto growing up then lived 10 years in Stouffville.
After 10 years outside of Toronto raising the kids, wife and I decided this blows… we can’t raise the kids like this…
People in this small town are scared of Toronto and they were shocked when we decided to move back.
Now were in the Beaches and we do family bike rides most of the year into downtown via the bike path.
I play ball every season in the men’s league
Wife and Kids love it as were all foodies… so we never run out of something new to try…
I still work in York Region and there is less traffic from Toronto to York during rush hour than York into Toronto.
I believe the trend in the 90’s was the great flight into the suburbs and that trend will reverse.
Noted: Stouffville was a 1 horse quaint little town that blew up into a mega suburb with the 1 smart center. The charm was lost…
I do hear a lot about London and Barrie.. that may be a good fit one day…
#121 Smoking Man on 11.13.13 at 3:25 pm
#113 eddy on 11.13.13 at 2:57 pmEven those who don’t like Rob Ford should condemn Character Assassination. CP24 just video loops the guy 24/7. Where was the outrage when Dolt On e-Guilty lost one Billion dollars in e-stealth? Or when Haarper kept lowering the GST long enough to get re-elected, then ‘bait and switch’ HST? Many services had to increase their tax collection- more than double, that right DOUBLE -OVER NIGHT. Finally after all these years we discover Haarper’s “hidden agenda”. Where is the media’s outrage when the agenda is exposed?
…………………………………………………………………….
Smoking Man is correct especially with the Gas Plant fiasco. I live in one of the riding’s that was bought by the Liberals. It is criminal what they did with our tax money. Dalton James Patrick McGuinty knew what was going on, and did this to try to save the Liberals sorry A$$es. Holy Crap it cost us almost one billion dollars to re-elect two Liberal bleeding hearts. Where was the outcry from the news media. Why did they not chase McGuinty, Wynn and all of the Liberals down like a pack of wild dogs and tear them to pieces. The media really does bend over and take it up the derriere when its run by the same Liberal bleeding hearts. I wish they had the guts to drop the Rob Ford crazy show and go after Wynn and demand to explain to us how they intend to pay back their one billion dollar screw up! Ford has only cost us our dignity and reputation, big deal, Toronto is not the center of the Universe, get over it. The Liberals already took credibility away and our money. Show me the Money, show me the money!!!!!!
Sens. Jack Reed (D-RI) and Chuck Grassley (R-IA) Introduce the Government Settlement Transparency and Reform Act (S. 1654) to Bar Tax Deduction of Settlement Payments
For Immediate Release
Wednesday, November 6, 2013
Washington, D.C. – Statement by Francisco Enriquez, U.S. Public Interest Research Group Tax and Budget Program Associate, on legislation introduced today by U.S. Sens. Jack Reed (D-RI) and Chuck Grassley (R-IA) that would prevent corporate wrongdoers from reaping massive tax windfalls from the payments made to settle allegations of criminal wrongdoing. It comes on the heels of reports that JPMorgan’s expected $13 billion settlement could be tax deductible.
http://www.uspirg.org/news/usp/us-pirg-applauds-bipartisan-bill-barring-tax-write-offs-corporate-wrongdoing
#121 Smoking Man — “I really like Jake Layton, and hate to bring thus up. […] Say Ford was found in a rub and tug, in the police notes said he was naked, got a visual ladies.”
I don’t know what your point is. The media didn’t bury the story, which is why you and I know about it. They didn’t bury it when Layton and Chow were discovered to be living in a mixed housing project and paying below market rents either.
Why didn’t they run with it as they did with Ford? Dunno, but it might be that the media taps in to the powerful Universal Consciousness Consolidator via their webservers’ logs. Don’t click, don’t care. Enough people click, and Rosie or Christie get told to do a followup story. Rinse. Repeat.
Real estate is a minor indicator of a similar yet much bigger issue.
The growth of national gdp to central banks consolidated debt is staggering. Historically low interest rates have done this.
The leverage of tangibles to invest in higher returns such as stocks and derivatives is unbelievable.
Digital investments party will have a historic hangover in the coming years.
Your hero just admitted to buying illegal drugs while in office. — Garth
—————————————————–
Garth, I’m confused? Did YOU just admit to buying illegal drugs while in office?
Aren’t you his hero?
Your hero just admitted to buying illegal drugs while in office. — Garth
Funny how Ford can remember paying fro crack but only admitted to “possibly” smoking crack when in a drunken stupor. Guess he checked his pockets in the morning and found his receipt from the dealer. Sounds like what some of the sheep will be bellering when the housing game goes bust.
#49
#34 Barold – I think you are right. A few years ago I felt we were looking at a pretty big short-term melt down (honestly things have been in bubble territory on the west coast for a decade).
But now I think, short of a huge increase in interest rates, we will be looking at a 10 or even 15 year grind back down to long term income to home price levels.
Canadians will just not sell at a price lower than what they paid for the house (or for that matter could have gotten for the house last year.) Of course some will be forced to sell at a loss, but most will hang on at all costs.
—————
That is EXACLTY what I head over and over and over again while living in the US from 97-05. They would never give up their homes (especially in a recourse state!) they would never sell for less than the mortgage, the worst that will happen is prices rise at a lower pace, this is the new normal , etc.
Prices can up irrationally, and they can down irrationally. All it takes is a change in sentiment, not a change in interest rates.
Garth,
Still don’t know why you aren’t calling for a crash in residential real estate. I feel like you’re just hedging your position a bit, rather than calling it like it is. Look at the fundamentals. They’re awful and screaming for a crash. When you consider the extent of how statistically anomalous the current relationship of fundamentals and prices are, and that the only two factors holding this situation together are interest rates (which will go up with 100% certainty) and exuberance (which will flip faster than Dany Heatley’s Ferrari when people seeing their home values eroding), combined with the facts that access to credit will tighten in the environment of any downturn, and that in the history of the world a real estate market even close to as out of whack as this one has NEVER, in the history of EVER, achieved a soft landing (I challenge anyone to give me one example, just one) and it forces me to conclude that your wrong:
No subtle (~15%) correction followed by years of a crappy market. Rather, a shocking, economy threatening death spiral involving AT LEAST a 40% peak-to-trough reduction in a time frame much quicker than the one you’re arguing.
Sorry, but your argument for a level headed, orderly return to normal has no more historical economic support than the argument that “everything’s fine”.
Put another way: it’s gonna be so bad that I hope I’m wrong…and I DON’T own a home.
Toronto has 118,000 millionaires and growing….
If only 1% of them are homeless than we have a shortage on million dollar residences…
Barlow Clowes scandal
http://www.stephenbloomfield.co.uk/page25/page18/styled-9/index.htm
… 23 later
http://www.theguardian.com/business/2011/feb/07/barlow-clowes-declared-closed-compensation
=
honesty sliding scale?
http://news.bbc.co.uk/2/hi/uk_news/magazine/8242050.stm
http://www.publications.parliament.uk/pa/ld200102/ldjudgmt/jd020321/yardle-1.htm
#64 Waterloo Resident on 11.13.13 at 1:43 am
Garth Turner for Prime Minister !
I’d vote for him, would any others here at this blog do the same?
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NO!!!!!!!! Because then he’d probably stop being my financial adviser.
Hey Garth, dammit where are you?
Stuck in traffic?
I NEED my fix!
#124 Vamanos Pest
As noted on Garth’s previous posting…
http://www.greaterfool.ca/2013/10/10/i-was-wrong/
Four years ago I believed some things to be self-evident.
Surely most people would understand cheap interest rates were a tool for paying off debt, not gorging on it. Surely they’d know putting all of their wealth in a single asset at one address on one street was a danger. Surely the Boomers would realize what they need for the rest of their lives is income, not a mortgage or a media room. And surely the young would cherish mobility and freedom, over condo fees and chains.
But I was wrong.
Those around you care more about a house than they do about anything. And that will go on, until it ends. Don’t expect gentle.
**********
There was never a call for a crash…
You are correct the numbers do add up to a crash but these are crunched using missing un-quantifiable data….
No one factors in the foreign investments because it is unknown.
No one factors in the stupidity of the herd mentality (except for SM, he’s batting 1000 here…)
By the time the crash is upon us the US economy will take off like a rocket and pull Canada up then the wages line will creep up and the RE price line will slowly creep down and they will meet at a balanced spot….
It’s a story because he’s melting down, and people like to watch. The end is predictable. — Garth
I love watching a 350 lb train wreck travelling in slow motion. I think though that Toronto really does deserve what they got in Rob Ford.
SMan, didn’t know you were so agile, but this sounds like a really good description! It helps if you’re portfolio is balanced. New TPP stuff. Remember Stuxnet?
Seven years ago my little buddy, the minister of finance, dropped a budget on my desk that most people thought was a yawner. Buried in it, I found, was a provision that would allow people to borrow mortgages that need not be repaid for 40 years, or to buy houses with no money down, which the government would backstop.
Garth you did protest and still do.
Barold: All those american retailers coming across the border now will pull back in a few years time.
In Ottawa, WalMart and Loews just built two retail stores. The dice have been cast.
omg: The good news is that before this happens RE will have to go into a free fall, and for that to happen interest rates will have to go to what would now be considered improbable levels.
Russell Napier explains how interest rates could go up. From his tone, I believe him. Paid subscription required so I’m not about to give the link. Also must be able to understand a thick Scottish accent.
Trish Maple: The Investor Suites of CASA III
I wonder why the Spanish word for house?
Obvious Truth: Nobody tells you when the music stops. You have to listen for it yourself.
Prices in the outskirts of the 416 are decelerating quickly along with listings as people are trapped. 1M plus has gone no bid.
that got my attention
North of 49: you live in Hamilton 43°
http://en.wikipedia.org/wiki/Hamilton,_Ontario
Victor V: can’t recall if you’ve done a specific blog offering step-by-step tips, for those wishing to take on a new lease for residential real estate
good idea!
Rocko: It’s all over.
“The Teranet index, a weighted gauge of home prices in 11 major cities, eked out a 0.1% gain in October from September after standing still in that month.”
it’s like Obvious Truth says “nobody tells you when the music stops”
oh yeah
“driver carries less than $50 cash and is fully naked”
you mean Jim Flaherty!
Thanks, Pasty-Face !
We love your ‘tude !
Being unpopular is a good indicator of being right.
Isn’t “F” just the guy at the back of an inflatable raft going down river rapids full of rocks, with a single paddle in his hands, simply trying to get the boat to stay pointing “generally forward”, while everybody onboard wears lifejackets and helmets and holds on tight ?
Then you admit that you are an idiot for three reasons:
1. these properties priced above $1M should not be selling discounted if there is a shortage
2. the information posted here regarding these properties being sold 10-20% under asking becomes relevant since they are listed in large numbers and there is tons of buyers for them
3. by posting the above you practically ate your own BS since you said that only 1% of us can afford it but you demonstrated that actually 4% of the population can afford it (millionaires by the article quoted by you means 30M or more)
On top of that, Toronto has a population of 2.79mil people
Last year they sold 10299 detached homes
If we do not consider immigration,GTA and outside buyers that means 0.3% of the population of To bought a house in Toronto.
Applying this percentage to 118.000 millionaires living in Toronto we have just 354 millionaires changing homes in an year. That is almost a year of sales for homes above $1M in Toronto.
However a millionaire as defined by that study is someone who has 30M or more. These people buy more expensive houses, hard to find and for that reasons not many of them change their homes every year.
This is becoming very interesting. I am really curious how far can you go in your idiocy. Let’s keep this going.
This is a mental fart, you should apologize to everybody around here
Man, what do you feed your brain with?
“TREB news” beans ?
Hey Garth, first time commenter on your blog. I am writing to add my thoughts on CREA or TREB sales and number manipulation. This is off topic from today’s discussion, although still relevant.
Here is the scenario about a house recently sold here in Toronto. I understand location is subjective although it was in a good area, Avenue Rd & Dupont. It first went on the market in late fall 2012 for $1.5 million. The property languished on the market with several price reductions until the summer of 2013, ending up at $1.249.
At the end of October, the staging was cleared out and the price reduced to $989,000 which opened some eyes seeing potential value. It finally ended up selling last week for $1.025 with a quick closing.
How will the statistics show this property? Sold in 11 months at 69% if list, I don’t think so. How about sold in 9 days at 104% of list? What happened to those previous price statistics?
#133
I think you are right and I too hope you are wrong. Not because I own multiple homes. I own much lower. I fear the social difficulties.
Your hero just admitted to buying illegal drugs while in office. — Garth
I don’t support drug users, the Police should arrest him. But at least he admitted it, unlike sitting President Bill Clinton:
“I did not have sex with that woman” and
“It depends upon what the meaning of the word ‘is’ is. If the—if he—if ‘is’ means is and never has been, that is not—that is one thing. If it means there is none, that was a completely true statement”
Toronto City Hall has Zeros, not heroes.
@Smokingman, the timing of the Jack Layton smear campaign was classic dirty pool. After he died there were many comments on the net that he was murdered.
We’ll never know. He had a family history of cancer, but I recall I guy on CityTV who had the same cancer and survived for quite a few years. Jack’s exit was so fast. Just before he died he was talking about Canada’s role in ‘international peace’ or some such third rail
RE#121 Smoking Man on 11.13.13 at 3:25 pm
Say Ford was found in a rub and tug, in the police notes said he was naked, got a visual ladies.
Point is he would be crucified, in Layton case the cop got reprimanded for sharing the info.
The media DID go after Jack. The difference was that Jack didn’t go into a tasmanian devil rage when the media showed up with their cameras. He showed regret and shame, while Ford showed arrogance and self righteousness.
#125. TNT
Think we have more in common than not. The larger regional centres are much different than suburbs.
I’ve given many an addict a warm burger and a lift off a lawn. Very difficult for them to get or seek the right help. Don’t be afraid to slip them a few bucks no matter what you think they’ll spend it on.
Will let them know someone cares.
What a tragedy….millions of potential wealth-creating citizens died on the vine due to badly failing fiscal policy, at both governmental and central bank levels. So that a thin veneer of society can gorge themselves at the expense of the young and old.
Instead of educating, encouraging and nurturing millions to create wealth for quality of life, we now have gargantuan levels of useless and long-term, consumer debt, created by levels of ignorance that are hard to believe. Let’s not forget the accompanying boatloads of relationship and social stress as a useless, nay, destructive byproduct. This stress chews up valuable lives, creates free-floating social conflict and wastes millions of man-hours daily.
Question is, at what point do we begin to dig ourselves out of the pit just to get to ground-level? It doesn’t yet appear to be imminent.
Savers and balanced investors should be highly esteemed and not treated like deviants. They are the true fiscal backbone of our country.
What we’re seeing today is profoundly shameful.
I regularly hear exclamations such as “we’re watching this issue closely” and “we’re keeping a sharp eye”.
Really.
I cannot believe how legions among us don’t have a clue about the value of money…and many of them are earning large sums, with which they could so rapidly buy their life’s freedom.
I often imagine what a nation with greatly lowered levels of financial stress could achieve. Productivity would not be the slave-driven issue it is today. Imagination would certainly be less fettered.
#140 Losty in Nosty on 11.13.13 at 6:01 pm
107 years old still drinking and smoking. Ha
Nice.
Fords going the way of the Edsel.
POOF
For you investors out there, what is your take on TSE:LW
The yield is very attractive as the stock price took a hit in the summer. With the aging population, I would expect it to have some growth in the future.
Any thoughts?
Smoking Man hope your not 107 years old! Missed the connection last weekend as the girlfriend insisted we go to Niagara Canada Casino. Good thing I did go as I hit just over $18k at 4:00am. I was tired but she wanted to party all night long. Might go to Seneca Sunday as the boys and me have a hall pass. You around then?
@ #134 TnT on 11.13.13 at 4:41 pm
Toronto has 118,000 millionaires and growing….
If only 1% of them are homeless than we have a shortage on million dollar residences…
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This comment makes no sense… are you saying that all millionaires must live in million-dollar homes? What if they are millionaires because of something besides their house?
#133 Vamanos Pest
The other thing that will keep air in the RE gas bag (defying all fundamentals and all the experts) is man (and woman) kinds pathetic desperation to save face. They will keep saying “everything is ok” right until the bitter end. A good time to own a pharmacy (stress medication) …. or to be a divorce lawyer (it’s gunna get grumpy in those debt bogged households).
I think only mass job loss will bring this Hindenburg down quickly …. until then …. most will live on water and Craft dinner before they would “move down” (OMG! …. what will our family, friends and neighbors think?).
#148 kommykim on 11.13.13 at 7:32 pm
RE#121 Smoking Man on 11.13.13 at 3:25 pm
Say Ford was found in a rub and tug, in the police notes said he was naked, got a visual ladies.
Point is he would be crucified, in Layton case the cop got reprimanded for sharing the info.
The media DID go after Jack. The difference was that Jack didn’t go into a tasmanian devil rage when the media showed up with their cameras. He showed regret and shame, while Ford showed arrogance and self righteousness.
……………………………………
arrogance and self righteousness. HUM?
You my good buddy have just inspired another technically flawed but a monster of a Smoking Man post.
Thanks man :)
@ #113 eddy on 11.13.13 at 2:57 pm
Even those who don’t like Rob Ford should condemn Character Assassination. CP24 just video loops the guy 24/7. Where was the outrage when Dolt On e-Guilty lost one Billion dollars in e-stealth? Or when Haarper kept lowering the GST long enough to get re-elected, then ‘bait and switch’ HST? Many services had to increase their tax collection- more than double, that right DOUBLE -OVER NIGHT. Finally after all these years we discover Haarper’s “hidden agenda”. Where is the media’s outrage when the agenda is exposed?
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So – spending too much on electronic health records is worthy of outrage, but fight jet contracts or cancelling paid-for LRT for a 3-stop subway needing $1B+ in extra taxes is fine and dandy for you?
At least be consistent with your outrage – Ford Nation, Harper Cons, and McGuinty Scammers all deserve some.
#154 :):( Ying Yang on 11.13.13 at 8:36 pm
Smoking Man hope your not 107 years old! Missed the connection last weekend as the girlfriend insisted we go to Niagara Canada Casino. Good thing I did go as I hit just over $18k at 4:00am. I was tired but she wanted to party all night long. Might go to Seneca Sunday as the boys and me have a hall pass. You around then?
……………………………………….
Don’t plan that far ahead
#136 LP — #64 Waterloo Resident
Garth Turner for Prime Minister! I’d vote for him, would any others here at this blog do the same?
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NO!!!!!!!! Because then he’d probably stop being my financial adviser.
***************
Yeah! We’re selfish that way! ;-)
Besides, Garth is not a glutton for punishment and has said many times, he’s just not interested.
[…] Parliament turned finance blogger recounts the origin of the 40-year amortization in Canada here. Says Garth Turner at The Greater Fool: “The era of zero-down and lifetime mortgage payments […]