Faux times

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Some days I just don’t know where to start this pathetic blog. So let’s do it in Mississauga, where we ‘re suddenly up to our skivvies in unsaleable luxury homes, providing a fitting backdrop for the main event.

Remember Saxony Manor? Sure you do. It’s the 18,000-square-foot faux French monument to bad taste nobody wanted to buy during the winter, so it went up for auction. The owner wanted nine large for it, but the hammer price came in at $6.2 million. But even that was too much.

The deal’s now falling apart since the buyer (it wasn’t me) couldn’t get financing, so a new auction is set, which means the fruitcake who decided to recreate Versailles among the suburban schleps and endless minivans, will just have to keep making payments on his $5.2 million mortgage. By the way, at today’s rates that’s a monthly of $25,797, plus property tax and three grand a week for the cleaning lady.

Meanwhile a second monstrosity not far away – also unsold after eight months on the market – will also soon go up for auction. Make sure you have $39,000 extra every year for the taxes.

Now, why aren’t unique, expensive homes selling if we’re at the apex of a boom market with all-time high prices and wall-to-wall social horniness? Simple, because we’re not.

The housing market in Canada peaked months ago, and is showing material signs of weakness which are lost in the oh-wow-look-at-the-latest-prices coverage in the mainstream media. Overall volume is down. Fewer SFHs are selling Toronto than did in 2010, 2011 or 2012. Homes well over seven-figures – now a major market segment, especially in Vancouver – are unloved. And as prices jump, inventory shrinks since homeowners are afraid of buying again – which makes prices swell more.

This is all the more significant because you can get a mortgage for the dirt-cheap rate of 2.99% and (as I showed in recent days) you don’t actually need any money to own real estate. So why wouldn’t the hipsters be going ape over saggy semis held together with bug spit and love?

Anyway, lots of people think we’re all nuts.

Derek Thompson wrote about weird Canadians in the Atlantic a few days ago, for example, wondering how we got a wealthier middle class than America (as judged by something called the Luxembourg Income Study Database). The answer, he says, is simple. It’s housing. And this is a eureka moment. We are house-rich the same way Americans were before real estate blew up and destroyed them.

“The U.S. is emerging from a catastrophic collapse of the housing market that obliterated household wealth for millions of middle-class families. Canada, however, is in the midst of a delirious housing boom and a personal debt craze that reminds some economists of the U.S. market exactly a decade ago (before you-know-what happened).”

And just to scare the crap out of anyone with a $5.2 million mortgage, Thompson treats us to two graphs. The first comes courtesy of Maclean’s which uses data from US housing guru Robert Shiller to show that real estate prices are almost double their mean average of the half-century between 1950 and 2000.

CHART 1

And here is the same index of US home prices, using the same data. As Thompson notes, reassuringly, “the US collapsed just before reaching 200, the red line that Canada is approaching.” Oops.

CHART 2

While we’re chunking charts guaranteed to work as fast-acting laxatives in Calgary and Vancouver, here’s one from the Globe and Mail, which has just discovered Canuckistan houses cost 66% more than similar US properties. It’s a record gap, astonishing given the fact US house prices have been in major recovery mode for the past year.

CHART 3

Now, what are we to make of this? Canadian housing economist Will Dunning says the market has peaked, and is turning. Sales crested last autumn and the sales-to-listings ratio is eroding. As inventory drops, prices increase – entirely consistent with the late stage of a market now poised for correction.

As for the Yanks, they just watch us with bemusement as we blow the world’s biggest housing bubble. Canada’s middle class is house rich, and saturated in debt as a result.

“But if you’re seeking a proximate reason why Canada has passed the U.S. as the world’s richest middle class this year of all years,” says the Atlantic author, “it seems to me you have to consider the opposite trajectories of our real estate fortunes and household wealth. Canadians are standing on their rooftops screaming for more debt while too many Americans are buried under their houses.”

Write this down: come April 27th, Saxony Manor will fetch less than its mortgage. Let’s crowdfund the sucker. Greater Fool world HQ.

MANSION

228 comments ↓

#1 Julie on 04.23.14 at 6:35 pm

Let’s face it, most people with a few million to spend (or borrow) for a house aren’t looking in Mississauga!!

#2 Holy Crap Wheres The Tylenol on 04.23.14 at 6:37 pm

Hey that’s my neighbours house!

#3 Rick Fast on 04.23.14 at 6:38 pm

FIRST! – let the mansion burn down!

#4 Derek R on 04.23.14 at 6:44 pm

Beats me why the Saxony Court guy doesn’t just buy the two houses on each side, demolish them and landscape the plots. The chateaux would look far less ridiculous and might attract something closer to the offer he wants.

#5 Terrie on 04.23.14 at 6:47 pm

I think it would be perfect as your HQ.

#6 prairie person on 04.23.14 at 6:47 pm

Garth, your choir, that’s us, sings the chorus to your solo but I’m afraid the audience has disappeared and is away singing with the realtors. Every time I go out, I see more sold signs. Who are these people buying properties at ridiculous prices? One place went up and was sold within two days. Vacant lots are appearing for sale again. 350 to 400. Cheap by Vancouver standards but still a stiff price with which to begin. Lot of costs added on before there’s a house ready to move into. More calls for a housing correction. No one is listening. The bankers are singing loud and strong. They’ve got the audience. Record low interest rates will stay low forever is one tune. Buy now or get locked out forever is another on the hit parade. People seem mesmerized.

#7 joblo on 04.23.14 at 6:56 pm

Hey Smokey, ever party at Steve’s?
Reforrrrrrrrrrrrrrrm!

#8 takla on 04.23.14 at 6:56 pm

My best guess on that last graph…..the blue rises to meet the red line around center of the difference between the two.THat means the average home in Canada drops to 300-325,000.00 from 425 tho. Now that’s more manageable!!Still just represents a 25 % drop in average price which is realistic baring continued weakness in the economy…..could end up it will be closer to a 40 precent correction ultimately ,then stagnant for the next ten yr….peak oil after that…

#9 Okanagan Valley on 04.23.14 at 7:03 pm

I live directly above one of the Okanagan Valleys pride and joy complete with Greg Normans plastered all over the promo material.

18 holes designed by the Shark himself laid out over 400 acres of some of the most beautiful scenery/terrain the valley has to offer.. Of course these days golf courses of this scale are impossible without the accompanying “neighborhoods” and resort lifestyle built in. The plan calls for 2300 beautifully sculpted homes – in a town with a population of barely 5000. The ball started rolling here 5 years ago.

The golf course was supposed to be finished in 2012, then 2013 and now 2014. Phase 1 has been 67% sold out for 2 years. Developers were $1.5 million in arrears with contractors 2 years ago.. sales have plummeted – money has dried up and the next step is bankruptcy.

I went and toured a show home and viewed several under construction – laminate covering fiber board everywhere, cheap corners being cut on every material imaginable.

The developer is now headed for bankruptcy. I feel bad for the 4 new owners that purchased in 2011 and moved in this weekend.. they are surrounded by a dust bowl on land of broken dreams.

Needless to say, here in the Okanagan Realtors and Sales staff alike have really started to get desperate, they are not used to being bottom feeders in society and using Mastercards to make lease payments. Failed developments like Ponderosa Pines is just another kick in the face.

#10 Billy on 04.23.14 at 7:03 pm

I discuss real estate almost daily at work. I’m constantly told that prices will just go up, and that there won’t be a crash, and I’m wasting my time renting.

No amount of evidence can sway these people from their opinions. They have drank the koolaid and dived into the deep end.

#11 I'm stupid on 04.23.14 at 7:04 pm

I say it sells for under 5 million.

#12 Free Beer Tomorrow on 04.23.14 at 7:05 pm

I wonder if there will be free beer at the auction?

Seriously though. It sure makes you shake yer head on prices.

#13 Rick on 04.23.14 at 7:09 pm

I’m in! Got my big American tax refund. I’ll add $35 to the kitty. Then will you give me a job?

#14 Dinner_with_Groucho on 04.23.14 at 7:12 pm

That Saxony pile better come with miniature giraffes.

#15 kam on 04.23.14 at 7:13 pm

Office Max [Grand and Toy] is closing all stores in Ontario.

#16 Homeless in Canada on 04.23.14 at 7:15 pm

“Fewer SFHs are selling Toronto than did in 2010, 2011 or 2012.”

Isn’t that because there a lower listings? Therefore, is this a meaningful fact.

#17 45north on 04.23.14 at 7:19 pm

The housing market in Canada peaked months ago

It amazes me that after the US market peaked, it has taken eight years for the Canadian housing market to peak. The political parties are scarred. They don’t know whether to shit or go blind. Look at the damn graph! What is Woodbridge going to look like in two years? Mark Hansen talks about “effectively underwater”. You are effectively underwater when the selling price of your house is less than the cost of a new house plus selling expenses plus moving expenses. A 10% drop in selling price will put half of home owners effectively underwater. Means that there will be a huge, huge decrease in mobility.

#18 Smoking Man on 04.23.14 at 7:21 pm

http://www.fox5vegas.com/story/20974764/for-sale-signs-hang-on-historic-nevada-town

You can buy an entire town for that Shack in mississauga and still have loot left over..

Comes with a

Casino, brothal, motel, restaurants, commercial building.

Basically employ the entire town, I looked at it in Feb…

My drinkin account didn’t like the number, my plan was chop 10% of the staff, spend a bit on marketing, have a huge sign of Rob Ford, CO owner.. Everyone loves and Knows Ford..
Then flip it after I doubled the sales….

To Ham…

Harry Reid was the problem, fire anyone from his home town..

Not a good idea…

Verlie, would not budge of price..

If it’s still for sale may24 weekend. Might try again…

Can you imagine me, the ruler of a town, casino, and brothle..

#19 Blase on 04.23.14 at 7:21 pm

The Cons turned off the tap on +$million dollar insurance and by god they will do it for under a mil as well. Eventually there will be bidding wars on $199,999 semis in Toronto.

#20 Joe on 04.23.14 at 7:22 pm

YOu are forgetting that most of the housing is bought by foreingers…………..

#21 blue steel on 04.23.14 at 7:24 pm

I hate to say this but nothing is gonna happen in the market until the cost of borrowing dramatically increases for Canadians to think twice. Until then I’ll paraphrase Buzz Lightyear, “To pimpfinity and beyond!”

#22 Saskatoon-Living on 04.23.14 at 7:29 pm

And new home sales in the States are terrible. Down 14.5%!!

What do you expect after that winter? — Garth

#23 James on 04.23.14 at 7:40 pm

Hi Garth, is there any chance you could elaborate a bit on your comment here?

http://www.greaterfool.ca/2013/11/03/scrubbed/#comment-269324

I understand moving averages and am quite willing to be patient, but what do you mean by a “value point”? You’ve also said that equities are too high to buy right now and certainly they have been above their 200MAs for a long time.

I was planning to wait until they dip below the MA but if that’s ends up being six months from now and the MA is higher than the current price then obviously that won’t gain me anything. You’ve also many times said, effectively “just get it built”.

I’m starting to wonder if I’m just another market-timing idiot and should start dollar cost averaging in anyway. Any comment would be appreciated!

#24 Joe on 04.23.14 at 7:41 pm

Most of the Uk and Canada are bought by Chinese and Russians,,,, and paid in Cash…
Prices will stay forever high…if you don’t buy now you will miss the boat….forget about cheap houses in big cities …it is history….
waiting for crash is a fairy tale….The new reality is that housing is expensive…
Toronto average is one million dollar and you have to get used to it….and most of it is paid in cash, so no one cares about interest rate and unemployment…

What are you on? — Garth

#25 JBird on 04.23.14 at 7:43 pm

Garth,

If an insured property is worth less than it’s mortgage, can CMHC request that the owner pay down the debt in order to bring the ratios back in line?

Hope your leg is better too.

No, but your lender might upon renewal. — Garth

#26 Entrepreneur on 04.23.14 at 7:44 pm

A correction is what we need. Let’s get realistic and realize that high house prices just locks the buyer into buying one thing…a mortgage. The banks love it but it is not good for the ecomony. Too high and long of debt cripples everyone around.

Keep your debt down and buy from small businessess.
Casinos and big box stores do not count.

If buying fish from a store make sure that it says “wild” on the sign and if more people to this it will eventually eliminate the numerous fish farms surrounding Vancouver Island.

Read Ray Grigg “Shades of Green” in the North Islander papers; read his artice on “The cost of salmon
in Senegal.”

#27 Joe on 04.23.14 at 7:48 pm

Garth,
No response to staring up an online petition pushing for all Canadians to be privy to Zillow like stats?

Is anyone with me on this?
You could save a bunch of people a load of hurt.

#28 Nemesis on 04.23.14 at 7:49 pm

Hmmm…

Personally, AuldPol – I’d always rather fancied this ‘FixerUpper’ for GreaterFool GlobalHQ:

http://ww2.nationalpost.com/m/wp/blog.html?b=fullcomment.nationalpost.com/2013/12/02/full-pundit-either-fix-24-sussex-drive-or-tear-it-down

I’d wager that I’m not the only one.

That feature’s Leader works on so many levels.

#29 coastal on 04.23.14 at 7:49 pm

#9 Okonagan Valley,

Greg Norman’s Maple Bay golf course meca on Vancouver Island went under too. Just like Bear Mountain in Victoria, these famous golfers put their name behind it but not much of their own cash to lose. Ponderosa used to be a nice course to play, now just another dust bowl. The wannabe developer builders are still going under one by one on the Bear, where the stench of Barrie still runs deep.

#30 Joe on 04.23.14 at 7:55 pm

Real estate market is no more local …is global….
so not event high bank interest and regulation would prevent to buy a house by Cash….
making higher interest for Canadians you simply hurting Canadian Citizens….
housing market became expensive because of wealth coming from outside of Canada!!!
and will be expensive for a looooooooooooooong time

#31 TurnerNation on 04.23.14 at 7:55 pm

Heard someone on the phone today securing a 2.5% mortgage rate. For another property. This ain’t ending soon.
Traders know fundamentals change the market’s direction for good; technicals only weave and bob it in the short term.
Unless we see either a massive spike in rates or CMHC lowering its limit to 1/2 mill…

#32 Freedom First on 04.23.14 at 8:06 pm

Nice graphs of the U.S. and Canada’s housing bubbles. And a lot of countries could be added to the graph showing their housing bubbles, which, of course, burst like the housing bubble in the U.S. Herd behavior is indeed mystifying. Of course, the smart money is always re-balancing all of its assets. This would be the truly financially well off, not the indebted/mortgaged “Wannabee well off” slaves. Ignorance is so expensive.

#33 Paolo on 04.23.14 at 8:12 pm

Saw this today at work. Didn’t realize right away that the original house that sold in January is back on the auction block. Hilarious.

Not surprised the money feel through. Shady offshore money most likely.

#10 Billy
I am in the same boat. Been saying this for over 10 years. For most people the ‘high water’ mark for RE prices never recedes.

Numbers don’t lie. World of hurt coming for many.

10% would devastate most people.

Paul

#34 Doug in London on 04.23.14 at 8:14 pm

I’d be curious to know about the sellers of the Saxony Court or Doulton houses. Are they outrageously wealthy multimillionaires who can afford to take a loss, or moderately wealthy people who are heavily mortgaged and selling at a loss will put a big dent in their portfolio?

#35 TheCatFoodLady on 04.23.14 at 8:16 pm

I don’t think many of the younger buyers have a genuine understanding of the impacts of negative consequences; serious ones if they buy into a hot market at the peak with minimal financing & no cushion.

Loving, well meaning parents indulged them as children. All too often my ‘parental peers’ told me they preferred giving their kids generous allowances rather than impose a part time job: “Their childhood ends SO early & I don’t want them stressed out.”

There was little accountability at school & increasingly, less & less learning. Sorry kids – you can’t Google life; school at the very least should teach you: a) You don’t know squat, b) these are important things to know & c) never stop learning & learning as in depth as you can manage.

They’ve been able to easily get credit since they were lining up to buy text books at the local college or university. They haven’t heard “No” enough. Rather than being told: “Come back when more of your student or consumer debt is paid down”, helpful bankers or mortgage brokers offer to ‘work with them’ to ‘make it work’. They suggest convincing the Parental Units to hand over some money for initial housing costs is the proper thing to do, especially if you’re having trouble saving.

And they make it work now… barely. Lord help them if life throws up one of its frequent reverses or unexpected events.

They think consumer proposals & bankruptcy are a solid part of fiscal planning – okay SOME of them do. And why not? Bankruptcy is no longer shameful & it sure doesn’t seem to slow down spending. I understand as part of bankruptcy, you have to sit in on two, TWO sessions about finances & spending & all that fun stuff? Only two? I’d love to know what’s covered.

I like to think most Canadians aren’t mired in scary levels of debt, that they own their homes or are almost paid off. We can’t all be that stupid… can we? If we’re not, it’s still worrisome to contemplate. Those close to the edge will only find it tougher. Interest rates aren’t rising but energy prices, food prices, prices for a great many essential consumer goods are going up – there’s less disposable income of which to dispose every quarter for a lot of families.

I’m not wishing a housing crash on the nation or any part of it – even if it meant I could safely waltz into home ownership. Call me a wimp but I don’t enjoy the thought of profiting on what will be utter devastation for too many families. The consequences will eventually hit all of us.

Do we really want that?

#36 Andrew Woburn on 04.23.14 at 8:21 pm

28 coastal on 04.23.14 at 7:49 pm
Greg Norman’s Maple Bay golf course meca on Vancouver Island went under too. Just like Bear Mountain in Victoria, these famous golfers put their name behind it but not much of their own cash to lose.
========================

If you’ve got a wife and two kids and a $500K+ mortgage, where are you going to get the money to play golf?

#37 Shawn on 04.23.14 at 8:22 pm

How to Index house prices?

I am not sure how an index of real housing prices would be contructed.

One can’t simply use resale prices of same houses over time as the houses tend to depreciate and/or get major renovations.

Real price of the average new home price over time might not work because new homes have gotten a lot bigger over time. How to account for that?

So I doubt there is any real way to make an accurate index of real house prices, so take those graphs with with large grains of salt.

Yeah, I conclude there is no reliable index of real house prices and most certainly there is not such a thing that extends back to 1890.

I also predict that real U.S houses will rise far more in the next five years than Canadian real houses prices will decline. It’s the U.S. house prices that went off trend the most. The curves will come together as the U.S. houses prices rise and cCanada goes down a bit in real terms. That’s my guess.

#38 Joe on 04.23.14 at 8:23 pm

no more middle class………..rich house owners and poor renters……..the new world order….

#39 Old Man on 04.23.14 at 8:25 pm

#18 Smoking Man – this has potential depending on the cash flow. It needs a grocery store; employees might go for a profit sharing plan; has a gold mine; lots to be sold; a few commercial properties; rig the casino; and so much more. The old lady might bite on a VTB first mortgage instead of the cash.

#40 Realtor # 1 GTA on 04.23.14 at 8:25 pm

Listing for detached homes under one million is on the low side.

However the market is top heavy with many homes selling in the 1.5 or above.

There are many buyer that don’t believe that housing market will drop and are all in if they love the area.

Lenders crash markets and as you can see the banks want your business.

#41 BullishBCbear on 04.23.14 at 8:26 pm

Vancouver is the largest port in North America by tons moved and the gateway to the pacific. More people in Asia know Vancouver Canada than New York USA . No one gives a sh*t about some crap mansion in the old guard province of Onterrible, I wouldn’t pay 300k for that crap, who wants to live ther?

Tonnage? Seriously? — Garth

#42 Loquat on 04.23.14 at 8:33 pm

I live in Vancouver and am happy to rent and not owe any debt.
I feel bad for everyone who has drunk the Koolaid.
Vancouver is a beautiful place but it’s not worth a lifetime of debt.

#43 Ben on 04.23.14 at 8:35 pm

Crowdfunding world HQ of Greater Fools would definitely be a venue upgrade from the Annual Sunnyvale Trailer Park Greater Fool Blog Dog Christmas Party (ASTPGFBDCP)! Bandit and the Amazons (a great name for a disco band) would throw a great soiree! Great post, as always. Thanks Garth.

#44 Spectacle on 04.23.14 at 8:40 pm

Big Thanks for blogging Garth, Your appreciated.

Regarding the “Faux Saxony Mansion” re-re-sale/auction. Nobody I know would brag about bidding on a public mess like that; it’s pathology is like knowingly electing yourself as “the greater fool in the room” while buying your own trophy to prove it. Pathetic?

A fool with money are really, really hard to find these days…….

Noting the above graph: scary real. That indicates a 50% decline on its way. ( 100% increase at some point, from where it should be). My father pointed out a similar historical graph to me about 2 years ago. He bought his vancouver home , central west side home for $18,000 (including the taxes ). In mid 1960’s. You’ve heard the story before, It’s worth more than that now though.

We’ve had some interesting discussions over the years about investment. He bailed on all other real estate, won’t even consider it, he keeps diversified.

Regards All.

#45 Aggregator on 04.23.14 at 8:42 pm

#31 TurnerNation

This ain’t ending soon.

I agree. Especially now with an ex Goldmanite heading CMHC who's mulling risk based subprime insurance and, the UN's two-faced muppet, Chris Alexander expediting TFWs while the Big Five are waiting with a debt slave catcher's mitt at the back of CIC's backlog. They'll make something happen to keep the housing game going a little longer. No doubt about that.

Too much power has been given to a select group of individuals that care not what Canadians think. That's why it has lasted this long, and why it'll be worse when it all unwinds.

#46 Joe on 04.23.14 at 8:43 pm

it won’t be any crash….population is growing, new comers coming….everyone wants a house …no one wants to feed the landlord…isn’t that simple….people want to be around their families and forget about financial stocks and mutual funds, bonds scam…

#47 JSS on 04.23.14 at 8:44 pm

Well, guess what…today I had my performance appraisal. and it wasn’t good. For the whole year, my boss said nice things and made me feel like I was a good team worker. Today he said to me that I’m not displaying a “sense of urgency”. what a complete load of bs. I work hard, ok? sorry but I need to vent.

#48 Notta Sheeple on 04.23.14 at 8:45 pm

“……the Globe and Mail, which has just discovered Canuckistan houses cost 66% more than similar US properties……..”
=========================

66% ??

Given that a mortgage is a citizen’s greatest personal expense, does this mean that a Canadian must earn a 66% (uncompetitively) higher wage to maintain the same standard of living as an American?

Ever wonder why some provinces continue to shed manufacturing jobs to the U.S., while other provinces sit smugly upon a pile of liquid dinosaur feces?

Ever wonder why we’ve reduced this once great manufacturing country to a nation of hewers of wood, diggers of dirt, and drawers of oil?

Expensive housing requires expensive (uncompetitive) wages.

#49 Chris on 04.23.14 at 8:46 pm

I put an offer on that house. It was more than reasonable. (above current price). It was rejected. There is more at play here than even Garth knows.

#50 BullishBCbear on 04.23.14 at 8:49 pm

Touché Garth, just letting the hipsters in van waiting in the wings to come and vultch a property, that no significant correction will be coming. Kelowna and Victoria, I agree the decline is underway.

#51 Spiltbongwater on 04.23.14 at 8:49 pm

Canadian housing peaked in Autumn? I have been reading this blog for 5 years, and every year (or possibly week/day), it is written that the housing market has peaked. What does peaked mean?

Sales. — Garth

#52 Dave D on 04.23.14 at 8:51 pm

You know what funny. I make 90K/year working in downtown TO. I have an opportunity to work in London, ON for a job that makes 84K/year. As you all know housing prices are at least double (or triple) in Toronto what they are in London. But Even if it were the inverse I would rather pay double (or triple) to live in a place London, Ontario than a craphole like toronto that is overcrowded has TTC/GO Train where you have to cram in like sardines , has highways that have perpetual traffic jams due do socialist city councilors that left everything as-is since the 1970s! I really don’t care either way if Toronto housing prices go up forever, or if they plummet as everyone seems to thing on this blog. Makes no difference to me as I would never even consider living in this horrible city, even if those shacks in leslieville were up for sale for only $100,000! I am outta here soon and can’t wait. Will pay cash for my next place really wont care if housing prices in London go down, After all, need a place to live, but will never be a SLAVE to it!

#53 Smoking Man on 04.23.14 at 8:53 pm

#39 Old Man on 04.23.14 at 8:25 pm#18 Smoking Man – this has potential depending on the cash flow. It needs a grocery store; employees might go for a profit sharing plan; has a gold mine; lots to be sold; a few commercial properties; rig the casino; and so much more. The old lady might bite on a VTB first mortgage instead of the cash.
………

I tried to get just the casino and restaurant only, she wanted 3.6 not a dime less… I would only go 3m gross Rev 1.85..

45 employees,

I’m sure could find efficiency, and get sales up to 2.5

I will try again in may, but this time only offering, 2.7..

See if she budges….

#54 devore on 04.23.14 at 9:18 pm

#47 JSS

Get a big mortgage, you’ll be experiencing a “sense of urgency” ASAP.

#55 TRT on 04.23.14 at 9:18 pm

Let it go higher, higher, higher….

Watch what happens!! :)

If you’re wanting a crash, let prices go higher in the meantime…

If you are a RE pumper, you should hope for a plateau…its in your best interest.

In either case, the powers that be will have 2 choices.

A) Devalue currency by about 5-7 cents per year….until we reach the 60 cent range.

B) Raise rates. They can’t! because whoever is in office will lose their seat.

Expect a maximum of a half point rise in rates in the next 5 years…along with a 60 cent dollar.

#56 Aggregator on 04.23.14 at 9:18 pm

Ha… David Wessel interview with Hank Paulson on Chinese entrepreneurs (corrupt officials that own SOEs).. At 30:19min about what wealthy Chinese want and say, "I'm buying a house in Vancouver"

When of all the cities in the world, Vancouver comes up that casually in a conversation, you know who's buying up half of those top end properties.

#57 Dave D on 04.23.14 at 9:18 pm

Hmmm, considering my options as to moving to london. I currently rent 1Bdrm for $1700 here in Crappy toronto but can get a similar rental for well under $1000 in London (no chance of affording any kind of detatched or semi-detached house in GTA, I have no desire to purchase a condo in this GTA shithole BTW) . On the other hand can buy a condo for around $150K in london.. of course the condo fees etc are at least $500… Or could get a 2000 -3000sq foot detached house for at least $200-400K (Impossible in crappy Toronto)..Or I could rent the nice (small) 1Bdrm Apt I used back when I was a student at UWO(comp Sci) for only $750 (back then was $550 but hell. inflation etc.) Man the amazing decisions I get to have to make just by getting out of this hellhole known as Toronto! Depression had set in over the years, but now that I know I am outta here it has lifted quicker than ever! I can’t imagine the effect this stupid housing market has on the people who grow up in [email protected]

#58 Toni on 04.23.14 at 9:22 pm

Am starting to feel like maybe I am the one who drank the koolaid. All the evidence says to me this market is ridiculous and these prices are not sustainable for a number of reasons. I sold my house and am renting but now it feels like the market has exceeded our ability to buy back in with no signs of slowing down. In the last 4 weeks I’ve attended two conferences where prominent economist have basically dispelled my hopes of a housing correction. Their predictions, rates will not rise until late 2015 and only very slowly so this will not cause a correction so much as a slow down in price acceleration. The level of sub prime buyers in Canada is so low, less than 5%, that as compared to the Americans which were more in the high 20% that this will not drive a correction either.

Did you invest your house proceeds or put the money into a deadend savings account? If the former, you should be money ahead. — Garth

#59 Nemesis on 04.23.14 at 9:25 pm

#HumpDayCocktailHourTrax #JiminyCricketOnlyWishes #TriumphOverAdversity #AuthorialVoices

#Linda:

http://youtu.be/FQTzO2eRwwE

#Santana, Lauryn & Cee-Lo

http://youtu.be/ZebE-MDI3xE

#Denouement/ProfilesInCourage

http://m.smh.com.au/entertainment/music/silenced-songbird-linda-ronstadt-still-calling-the-shots-20140410-36dw3.html

http://www.telegraph.co.uk/culture/music/rockandpopmusic/10757636/Linda-Ronstadt-deserves-Rock-and-Roll-Hall-of-Fame-honour.html

[NoteToSaltyDogz: NarrativeMorals? Never fear use to use your ‘voice’… It’s a Rare&Precious gift.]

#60 MagnumMtl on 04.23.14 at 9:25 pm

dibs on a corner office with a view of the amazons poolside.

#61 Mark on 04.23.14 at 9:25 pm

“If an insured property is worth less than it’s mortgage, can CMHC request that the owner pay down the debt in order to bring the ratios back in line? “

As Garth said, no, they can’t. However, nothing is stopping the bank from only offering to renew at a considerable penalty rate more in-line with the very poor credit metrics of the loan.

#62 Mark on 04.23.14 at 9:27 pm

“no more middle class………..rich house owners and poor renters……..the new world order….”

Actually with the recent price declines, the home owners are getting poorer relative to the renters. And definitely relative to the business (stock) owners. The “middle class” only has itself to blame for over-indulging in housing on credit.

#63 KG on 04.23.14 at 9:28 pm

Are we reviving the old bets, hope you had a recall clause on the prize you gave away.

I could be wiling to crowdfund provided we do not bid any more than my betting price – was it 2.9 mil ?

#64 BG on 04.23.14 at 9:29 pm

Love the picture.

Dogs are the best.

#65 Inglorious Investor on 04.23.14 at 9:29 pm

45north on 04.23.14 at 7:19 pm

“It amazes me that after the US market peaked, it has taken eight years for the Canadian housing market to peak.”

Canada does just about everything the US does, only on a time delay. Usually it doesn’t take so long as eight years, but this is just more proof that Canadians are getting even more retarded.

————————-

blue steel on 04.23.14 at 7:24 pm

“I hate to say this but nothing is gonna happen in the market until the cost of borrowing dramatically increases […]”

Or lots of people start losing their jobs. Or likely both.

————————-

Joe on 04.23.14 at 8:43 pm

“….everyone wants a house … […]and forget about financial stocks and mutual funds, bonds scam…”

Yep, that does seem to be the consensus, doesn’t it. Sounds like maybe it’s time to think more seriously about stocks for, oh, say the next ten/twenty years or so?

#66 The Patient on 04.23.14 at 9:31 pm

I can’t see it going for much more than $4.5 million, and even that is nuts!

#67 TheCatFoodLady on 04.23.14 at 9:39 pm

#46 – Joe: You said:

***it won’t be any crash….population is growing, new comers coming….everyone wants a house …no one wants to feed the landlord…isn’t that simple….people want to be around their families and forget about financial stocks and mutual funds, bonds scam…***

It’s never that ‘simple’.

We have a very low birth rate; 188th in the world & births barely outpace deaths:

https://www.cia.gov/library/publications/the-world-factbook/geos/ca.html

We average roughly 250,000 immigrants to Canada per year:

http://en.wikipedia.org/wiki/Immigration_to_Canada

The numbers don’t bode well for increases in home value in all markets. Newborns & kids don’t buy & many immigrants are years from being in a position to buy. A lot of people DON’T want to own & feeding the landlord? We’ve often given fairly detailed numbers here on how in actuality, most landlords in bubbly markets are subsidizing their tenants.

You can be close to your family if you own, rent or live in your car. Bonds, stocks, mutual – no more scammy than overpriced housing. People cane get screwed buying any asset class or more accurately screw themselves by letting greed overwhelm common sense.

#68 45north on 04.23.14 at 9:40 pm

aggregator : Especially now with an ex Goldmanite heading CMHC

Evan W. Siddall
President and Chief Executive Officer
Canada Mortgage and Housing Corporation

Over the course of his career, Mr. Siddall has held a variety of positions in both investment banking and general management, including at BMO Nesbitt Burns, Goldman Sachs & Co. and Lazard Frères & Co. Immediately prior to joining the Bank of Canada, Mr. Siddall held the position of Corporate Finance Officer at Fort Reliance Co. / Irving Oil Ltd.

http://www.cmhc-schl.gc.ca/en/corp/about/cogo/cogo_061.cfm

trouble is that you can always get more sales by lowering standards. And Siddall is in charge of standards.

It’s funny that the cutoff of CMHC insurance makes bidding on a house like playing blackjack. My idea is to require 10% down on houses over $900,000.

#69 Andrew Woburn on 04.23.14 at 9:41 pm

41 BullishBCbear on 04.23.14 at 8:26 pm
Vancouver is the largest port in North America by tons moved
——————–
Tonnage? Seriously? — Garth
======================

Port Metro Vancouver’s website says it handles the fourth largest tonnage in North America. It may be the biggest in total area but this includes several discrete locations in the Lower Mainland. It is unquestionably the biggest and busiest port in Canada.

#70 KommyKim on 04.23.14 at 9:45 pm

RE: Top caption on the first graph from Maclean’s;
“If Canadian home prices were the same as U.S. home prices before 1990 then this is what Canadian home prices since 1890, would look like”

Garth! What the hell does that even mean? Please show us the math that created this FrankenGraph.

#71 Ray Skunk on 04.23.14 at 9:46 pm

#47 JSS – Chip up lad. Of course you’re a hard worker. You know this, your boss knows this. But your performance appraisal is linked to salary increase so time for them to claim you’re not up to snuff. There’s no money in the pot for the little guys – the C-suite ain’t gonna get their 20%+ out of thin air. Chances are it’s happening to all your peers; don’t take it too personally.

#52 Dave – if my partner could find a job in London I’d go halves on the moving truck with you. Can’t wait to get out of the self-absorbed shithole that is the GTA.

#72 randman on 04.23.14 at 9:57 pm

USA housing recovery?…whoops no..sorry Garth

USA Today noted “Harsh winter weather helped hold down sales in February and may have in March as well.”

Also note: “Economists had predicted an annual rate of 450,000 for March, according to the median forecast in Action Economics survey.”

My question: If sales decline was weather related, then why were sales up in the Northeast?

I suggest the Fed managed to blow another housing bubble, especially in California and the West where sales are down the most. With rising rates, people are priced out of the market.

Read more at http://globaleconomicanalysis.blogspot.com/2014/04/new-home-sales-plunge-145-its-not.html#F2oC4TDyHWo0PED6.99

New homes sales are a minuscule portion of the US market. I wouldn’t get too excited. — Garth

#73 WLM on 04.23.14 at 10:02 pm

Garth

You must seize that mansion with your band of merry contrarian brothers, rename it the Royal Order of Garth Uber-Estate (R.O.G.U.E) and declare a new Canadian republic, with the house as the new HQ. You could then be the head of a ROGUE state in a ROGUE estate. This could be bigger than 1837 and the Montgomery Tavern.

#74 AisA on 04.23.14 at 10:19 pm

It’s grim, but how grim?

Exuberance corrects, silliness corrects, even stupidity can correct.

The madness of crowds however, always crashes.

There is nothing the Government can do to avoid a crash. It will all come down and there will be no sound, not even a whimper. The crater will be so deep that the sound of wailing will not be able to reach the surface. The shame suffered by bidding war buyers will outlast their mortgages.

It’s THAT GRIM.

#75 Led on 04.23.14 at 10:19 pm

just got off the phone with a friend who made a few comments about his father’s generation. He bought his first house with cash – working as a waiter – for 3k. Remember this is the 1950s in Hamilton. Paid for property taxes with one days wages. He supported a stay at home wife and four kids. He would also, a few years later, buy a brand new car, also with cash.

Can we really fast forward to today and call it progress?
I wonder if our parents would have stood a chance in this madness?

#76 Babblemaster on 04.23.14 at 10:20 pm

So what if Canadian houses cost 66% more than similar US houses? Does this mean that we are due for a correction? Certainly not. Then again, maybe, but only when rates rise significantly and that is not going to happen for a long, long time. People, including Garth, have been carping about rising rates for at least 5 years and they’ve barely budged. It seems pretty obvious that the world order is determined to keep rates low. The Feds adjust the CPI basket of goods to keep inflation low and the bond market has obviously accepted these low rates. Where is the pressure to raise rates?

#77 general observer on 04.23.14 at 10:20 pm

#27 Joe on 04.23.14 at 7:48 pm
Garth,
No response to staring up an online petition pushing for all Canadians to be privy to Zillow like stats?

Is anyone with me on this?
You could save a bunch of people a load of hurt.

Me – never mind saving people
We need to save us the taxpayers, not the irresponsible,gullible 5% downers.

#78 Sean on 04.23.14 at 10:22 pm

#56 KommyKim on 04.23.14 at 9:45 pm
RE: Top caption on the first graph from Maclean’s;
“If Canadian home prices were the same as U.S. home prices before 1990 then this is what Canadian home prices since 1890, would look like”

Garth! What the hell does that even mean? Please show us the math that created this FrankenGraph.

————

It means we are so backwoods retarded in Canada, that we don’t even have solid real estate data prior to 1990.. we have to borrow US data.

Also, responding to Shawn of an earlier post… real home prices could easily be created by a) de-trending for inflation and b) de-trending for square footage. Also, why should the resolution of the “troubling” graphs be at some intersection of US and Canadian trendlines, somehow suggesting our adjustment should be less? In fact, the ultimate US resolution points to dramatic new lows on their chart.. historic trends can’t revert without overshooting to the downside. And what this points to for the Canadian chart is downright ugly.

I mean people can’t honestly think that an historic lowering of lending standards, and an historic credit bubble, will lead to a long term upward move in “real” home prices? Can they?

#79 Att on 04.23.14 at 10:22 pm

I find it hard to believe the Canadian middle class is wealthier than the American middle class if mortgages are in the liability column. They are a liability to the bank after all.

#80 Observer on 04.23.14 at 10:22 pm

I know that the more cautious “experts” are forecasting a “soft landing” in the housing market, but as you point out today, things are getting a leeetle scary out there.
It’s kind of like when someone keeps inflating a balloon and you start getting a bit anxious and start to wince, then they inflate some more so you stick your fingers in your ears and close your eyes ‘cos you know what’s coming. Then they keep on inflating that balloon ……….

#81 dancingfool on 04.23.14 at 10:23 pm

Garth, PLEASE, SSSSHHHHHHHH…..don’t draw so much attention. Wait until I can find some house horny hipsters to buy my “saggy semi held together with bug spit and love”!! I too was brainwashed by the RE agents and my wiser elders that I was nothing until I too owned property.
I want out!!!!

#82 omg on 04.23.14 at 10:24 pm

Yes we will revert to the mean and for some markets like Toronto and Vancouver that will be a drop of 50% to 70% in real house prices.

But it isn’t going happen quickly like in the US, it will be a generational drop in prices that could take 10 to 20 years and will be seen mainly in the steady erosion of “real” house prices.

We may get a small correction in the shorter term, when interest rates start to rise – maybe a 10% to 15% correction. But Canada’s market will be backstopped by “bargain” hunters jumping in and buying.

Also remember that the US housing correction was helped along with the economic turmoil it cause world wide – nobody wanted to buy a house in the US when the “end of the world financial system” was upon coming.

In Canada a housing correction will be a “made in Canada” event – nobody is going to think that the world is coming to an end and most people in Canada, unless you sling drywall mud, will not lose their jobs. So there will still be lots of money floating around to by homes.

So settle in for the long-haul. Rent and plow your savings into investments. Then 10 years from now you’ll be able to buy for 50 cents on the dollar.

#83 James on 04.23.14 at 10:25 pm

#72 randman

Even worse, US mortgage applications (and NOT just for new homes, Garth) have tanked.

I was in the market for a US property, but I am now holding off to see what is happening. I think some sellers are convinced that prices are going to continue to rise. In the counties that I am interested in, sales of existing homes have dropped in half. Very few new houses there, so it is mostly resale.

Most mortgage apps are for refis, not new originations. Of course they drop when rates rise. — Garth

#84 Property History @ Univs.ca !!! on 04.23.14 at 10:32 pm

I was checking the (now twice reduced) price of a neighbor’s house in the Montreal area when I stumbled on the site Univs.ca. It clearly lists the number of days on market, the dates of price reductions (with percentage/amount) and also the company it is listed with (in this case, ProprioDirect) the info seemed quite complete for this particular house, but I’m sure one could find some interesting info on many listings in Canada. They clearly have tabs for BC, Ontario, etc.. Check it out!

#85 Jl on 04.23.14 at 10:32 pm

“Now, why aren’t unique, expensive homes selling if we’re at the apex of a boom market with all-time high prices and wall-to-wall social horniness?” – Garth

Actually the answer why million+ dollar homes aren’t moving is because of mortgage rule changes.

To buy a $2 million dollar home today you need a downpayment of $700,000. Banks will only lend 20% on the first $1 million and then 50% on the rest. Not many people have $700,000 to put down even if they make enough to “qualify” for $2 million.

#86 Nemesis on 04.23.14 at 10:34 pm

#Odd’Coincidences’ #PowerFearsMusic #PowerFearsLaughter

http://m.theglobeandmail.com/news/british-columbia/cuts-threaten-vancouver-school-board-music-program/article18050962/?service=mobile

#87 Nemesis on 04.23.14 at 10:36 pm

#AddendumToMillenials

http://youtu.be/X6WHBO_Qc-Q

#88 shawn on 04.23.14 at 10:37 pm

Performance Appraisals

Re JSS at 47 on this topic.

***************************************
Performance appraisals seem to be a destructive pile of crap invented by the human resources industry to justify their existence.

The notion that telling people where they don’t measure up is going to motivate them is idiotic.

If this works, why not have all the men go home and rate their wives on a scale of 10. Let’s see we should get about 60% rated 6 or under. Let’s see how that goes over.

And ladies do the same tell your man exactly in which areas he is not measuring up. See how that improves his performance and his mood.

No I say praise your people or fire them, no in between. It’s what Buffett does. Praise your spouse or get divorced.

Remember, there is no such thing as constructive criticism. Criticism is ALWAYS resented.

Unsolicited criticism is ALWAYS especially resented.

#89 Inglorious Investor on 04.23.14 at 10:39 pm

#79 Att on 04.23.14 at 10:22 pm

“I find it hard to believe the Canadian middle class is wealthier than the American middle class if mortgages are in the liability column.”

Don’t you know that debt is the new wealth? There’s the old apocryphal anecdote about the poor man who one day discovers the miracle of bank credit. So he goes and gets huge loan. After which he proclaims, “Yesterday I didn’t have two nickels to rub together. Today I owe millions!”

#90 ozy - i am convinced, the fat lady can start singing on 04.23.14 at 10:44 pm

Finally, I am convinced!

Garth, please tell the fat lady she can start singing.

Authors of the boom are gone….so no one to blame…

Shorting the kanatian banks first and government bonds next -or vice-versa???? someone, please advice

#91 Spectacle on 04.23.14 at 10:48 pm

This is why I read the whole blog, thx Garth.

#45 Aggregator on 04.23.14 at 8:42 pm
#31 TurnerNation

“This ain’t ending soon.”

I agree. Especially now with an ex Goldmanite heading CMHC who’s mulling risk based subprime insurance and, the UN’s two-faced muppet, Chris Alexander expediting TFWs”

Wow wow wow! Thanks #45 aggregator & #31 Turner nation.

I’m so researching that further thanks to your comment.

Unbelievable, yet with Agenda-21 & the UN, Canada will be ruined. This is not ending well and not ending soon, as we like to quote on here! Compassion for those mortgaged to the max, believing they are on the real-estate path to security & riches…….

Ps trust your leg is progressing well Garth, & healing.

#92 brad on 04.23.14 at 10:52 pm

This is probably the best post I have read on your blog. Sums up the Canadian housing bubble perfectly, that even the financial illiterates in this country could understand.

#93 SCIBADUBADEBUMBADO on 04.23.14 at 10:55 pm

I was talking to my bank manager today. Small talk led me to ask him how the mortgage business was.
He was more than ready to tell me that almost no sales are completing in White Rock area. Thousands of Condos and New Town homes for sale and prices dropping all over the place.
I have a friend who bought a town home in central White Rock 3 years ago. They are trapped now. They wanted to sell but will stay put because they estimate a 15% drop in price according to recent sales by their neighbors. They would need to take a cheque to the bank in order to sell.
The developers are still building though. Not as fast as last year.

#94 boopsie on 04.23.14 at 10:56 pm

This report on Canada’s middle class sounds bogus. One of our big-bank economists says that these incomes are based on the “third quintile” ,whatever that may be, and the median income for that group is a whopping $18700 p.a. Now that is half of what I made at a mediocre job 16 years ago, so this group is not, ever, going to be a home owner. I am going to explore this further.

#95 worried realtor on 04.23.14 at 10:57 pm

A Lot of worried realtors here and I know why. Sales are not going well as people are walking in by the dozen during open houses and then nothing. Some foolish realtors here talk about rich people parking their money here are well clueless or lying. Sales are down in the Gta. I wish this wasn’t the case.

#96 Old Man on 04.23.14 at 10:58 pm

#57 Dave D – what locations for a condo / detached are you looking at because its critical not to make a mistake – do tell! I will discuss this with my connections.

#97 Inglorious Investor on 04.23.14 at 10:59 pm

#76 Babblemaster on 04.23.14 at 10:20 pm

“Where is the pressure to raise rates?”

Potentially in a looming US dollar crisis for one. Old Yellen and the Fedsters would be very willing to tank the economy to save the almighty dollar.

Do not underestimate the Americans. They still have enough schemes and firepower (both military and financial) to blow others away in order to preserve the status quo. Do you think that what’s going on in the world (Europe, Russia, China, Japan, et al) is all just happenstance?

When Old Yellen tapers and threatens to increase rates, it’s not because employment is growing. They (the F’d Over More Credit group) couldn’t give two turds about that. It’s because the big banks may no longer need the support for their derivatives, and/or the world is growing skiddish on the dollar. Do you also think all the new US oil and gas is just coincidence? The US Geological survey knew long ago where the oil and gas were. Fracking technology has been used since the ’50s. You think the Chinese are strategic because they are good at math? No one thinks more strategically than the Anglo-American elites.

#98 SCIBADUBADEBUMBADO on 04.23.14 at 10:59 pm

We can still have a helluva crash…
Our property market is marginally better than countries with no recourse mortgages but look at this:!

First, it’s not true that the U.S. is uniformly nonrecourse. Two states with among the highest foreclosure rates, Florida and Nevada, are full recourse. In fact, the Federal Reserve classifies most states as full recourse. Ireland has full recourse mortgages and some of the harshest bankruptcy laws in the developed world. But as of December 2012, 11.9 percent of Irish mortgages were delinquent by 90 days or more.

http://www.cnbc.com/id/100736121

#99 Chickenlittle on 04.23.14 at 11:00 pm

#7 joblo:

I love that word, REFOOORRRM!

#75 Led:

My grandparents have a similar story as well. In the 50s my grandma worked at a bank for 3 years to pay for their house. To make the story short, the bank refused their loan application, but gave them the mortgage when they hired my grandma to work for them. Like that would ever happen now.

#100 the jaguar on 04.23.14 at 11:01 pm

OMG. That photo. What kind of person builds a house like that, especially in the suburbs of Mississauga? It’s beyond the pale. Conspicuous consumption on steroids. It demonstrates that while some may have money, it doesn’t mean they have good taste.
Ditto for the person who would put an offer of 6.2 million on it. If you have that kind of change why not build something tasteful. Something graceful. Something elegant.
Tell me Obi-Wan Kenobi ( that’s you Garth)……..what inner demons or total lack of self esteem would cause someone to construct such a monster in the quiet suburbs of the GTA?
Who would finance this Moby Dick of a house with such limited marketability? Was it financed?

#101 Nemesis on 04.23.14 at 11:02 pm

@JSS/#47

“The beatings will continue until morale improves…”…

http://youtu.be/4OPK5PfunNQ

#102 Raging Ranter on 04.23.14 at 11:08 pm

Does the Saxony Manor include window coverings? Because that’s a deal-breaker for me. I hate shopping for blinds.

#103 Fraud investor on 04.23.14 at 11:12 pm

One of my friends in Burnaby BC, made 2 offers on 2 different duplexes, but both rejected due to an other higher bidder, what’s going on, I cannot believe a duplex is almost 1 million dollars here. If we have a transparent sales history online, it might help to at least give buyer some ideas that how much the previous owners paid for the same property.

#104 8102 on 04.23.14 at 11:13 pm

Garth,

At the new Greater Fool HQ I will keep the lawns trimmed for a room and access to the theater and bar.

Cheers!

#105 Raging Ranter on 04.23.14 at 11:14 pm

Jess, screw your performance appraisal. They are, as has been mentioned already, a monstrosity invented by HR types and management ” consultants” among other parasites to justify their own sorry existence. If they gave everyone a good appraisal, they would lose credibility. So someone has to take the hit, even if it is entirely arbitrary. Sorry to hear it was you this year. I hate to make you worry, but you may want to start looking for another job. Sometimes a “poor” performance appraisal is used as supporting documentation to fire someone when they can’t justify it otherwise. Happened to my brother once. I hope that’s not the case but you might not want to wait around to find out.

#106 Doug in London on 04.23.14 at 11:17 pm

And as prices jump, inventory shrinks since homeowners are afraid of buying again – which makes prices swell more.
—————————————————————–
I still don’t get it, although a small number of wise recent sellers do. You would think any Boomers who were contemplating retirement any time soon (obviously sooner if they made a big capital gain!) would see the opportunity to effectively win the lottery and sell their house NOW while prices are high and that would increase listings. Remember, we Boomers have seen real estate correct before in the 1980s and 1990s, and should want to get out before in case it happens again. Also remember that when you retire you can live wherever you want, namely some cheaper to live place.

#107 AACI Home-dog on 04.23.14 at 11:17 pm

What a behemoth of a house. Disgusting use of resources, really.

#108 T.O. Bubble Boy on 04.23.14 at 11:27 pm

@ #68 45north on 04.23.14 at 9:40 pm

It’s funny that the cutoff of CMHC insurance makes bidding on a house like playing blackjack. My idea is to require 10% down on houses over $900,000.
—————

I like the idea of tiered LTV limits… say:
5% down on $250k and under
10% down on $250k-$500k
15% down on $500k-$750k
20% for $750k+

This would probably kill the market for $500k+ houses, but that is a necessary step.

I would also make CMHC only for first-time buyers, and only for primary residence (assuming that it isn’t eliminated altogether).

#109 april on 04.23.14 at 11:44 pm

#46- The same thinking as in the last boom to bust……..

#110 Free Beer Tomorrow on 04.23.14 at 11:50 pm

US recovery?

http://townhall.com/tipsheet/katiepavlich/2014/04/21/obamas-america-50-and-60-years-olds-moving-in-with-parents-to-survive-n1827132

#111 john on 04.23.14 at 11:52 pm

You pick extreme examples to defend your thesis. The difference between Canada and the US is that the former has lending standards, more equity in their homes and mortgages does not come with teaser rates. Some correction is due with any bull market but nothing more than 5% on average. Even less for high demand areas. If a bigger dip happens it will be supported with pent up demand. Hence, any correctly will be brief.

#112 Blacksheep on 04.24.14 at 12:00 am

I would like to see a chart, comparing average home prices in canada, 100 miles from the US border north and in the US, 100 miles from the east/west coastline.

I would be surprised if prices in both countries, under these realistic comparables in regards to desirable locations, were not very equatable.

Yes, canada is a huge friggen country, but who the hell wants to live any where, there is snow on the ground
(generalizing) 5 months a year?

#113 Free Beer Tomorrow on 04.24.14 at 12:06 am

#86 Nemesis on 04.23.14 at 10:34 pm
#Odd’Coincidences’ #PowerFearsMusic #PowerFearsLaughter

http://m.theglobeandmail.com/news/british-columbia/cuts-threaten-vancouver-school-board-music-program/article18050962/?service=mobile

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

I wonder how many cuts the teachers salaries and pensions have suffered over the years. Zero. I live in BC and guess what? Low and behold….another teachers strike.

#114 fed-up on 04.24.14 at 12:19 am

Canada, a country rich in land, energy and oil. But yet it chooses to fleece its own population with it costs to acquire them.

I have traveled the world over and have never seen another country like the one we live in today.

#115 retired WI Boomer on 04.24.14 at 12:29 am

Another Wednesday “wing night” at the local pub. .25 cent wings, and 5 beers for $5 what a deal. Who says inflation is a problem here?

We HAD our Real Estate crash 6 years ago with all that nasty weeping, and gnashing of teeth. You will get your turn in due time (unfortunately). The renters are the wise there, but you can not possibly see it just now.

Well, i’m maggoty and heading for the rack!! Dream fir better times, when houses are rational, and you are not!

Everything I like seems to be illegal, immoral, or fattening.

#116 MississaugatoVancouver on 04.24.14 at 12:55 am

Magnitude 6.5 in Vancouver this evening.

The condo owners were complaining their pads were swaying in the wind.

I wonder who now regrets buying these boxes in the sky.

#117 Nemesis on 04.24.14 at 12:57 am

#BonusZenForFauxTimes #WorksWellWhenTheBeatingsAren’tImprovingMorale

http://youtu.be/G6J1jgQs1Cg

#118 Realtors not liking Garth's charts on 04.24.14 at 1:04 am

Looks like many realtors who spend countless hours and days on garth’s blog are not liking the factual charts posted by garth. Why realtors are spending time here when the market is doing so well….LOL. Look at how stupid realtor joe sound below(one of many posts just today)
—————————————————————–

Joe on 04.23.14 at 7:41 pm
Most of the Uk and Canada are bought by Chinese and Russians,,,, and paid in Cash…
Prices will stay forever high…if you don’t buy now you will miss the boat….forget about cheap houses in big cities …it is history….
waiting for crash is a fairy tale….The new reality is that housing is expensive…
Toronto average is one million dollar and you have to get used to it….and most of it is paid in cash, so no one cares about interest rate and unemployment…

What are you on? — Garth
—————————————————————–

What are you smoking realtor joe? These realtors don’t even have HIGH SCHOOL. That’s no joke.

#119 Realtors not liking Garth's charts on 04.24.14 at 1:16 am

Aggregator on 04.23.14 at 8:42 pm
#31 TurnerNation

This ain’t ending soon.

I agree. Especially now with an ex Goldmanite heading CMHC who’s mulling risk based subprime insurance and, the UN’s two-faced muppet, Chris Alexander expediting TFWs while the Big Five are waiting with a debt slave catcher’s mitt at the back of CIC’s backlog. They’ll make something happen to keep the housing game going a little longer. No doubt about that.

Too much power has been given to a select group of individuals that care not what Canadians think. That’s why it has lasted this long, and why it’ll be worse when it all unwinds.
—————————————————————-Why couldn’t Goldman stop the US housing crash? BTW do you know which big pockets(US) are shorting the Canadian housing bubble? I can’t look. it’s not going to be pretty. Oh ya the rich and ex-goldmen and bla bla bla and bla bla will stop the Canadian housing bubble from crashing….LOL you realtors are real idiots. GOT HIGH SCHOOL?

#120 Nebbio on 04.24.14 at 1:29 am

It was pretty obvious that property on Saxony would never close. Mr. McDadi, the realtor, was all full of pump on his twitter feed prior to the auction, but fell totally silent after the auction was complete. I am sure it was just a bunch of smoke and mirrors to get the MSM to give his agency a pile of free publicity. The realty industry screams out for regulation.= and the MSM are a bunch of suckers.

#121 Nebbio on 04.24.14 at 1:29 am

It was pretty obvious that property on Saxony would never close. Mr. McDadi, the realtor, was all full of pump on his twitter feed prior to the auction, but fell totally silent after the auction was complete. I am sure it was just a bunch of smoke and mirrors to get the MSM to give his agency a pile of free publicity. The realty industry screams out for regulation. The MSM are a bunch of suckers.

#122 coastal on 04.24.14 at 1:42 am

If you’ve got a wife and two kids and a $500K+ mortgage, where are you going to get the money to play golf?

#38 Andrew,

Especially at the Bear where at $149 per round plus all the other goodies turns into a $200 day. Not to mention $500K houses are so close together with no lots to speak of you can talk to your neighbor from your john.

#123 Darko on 04.24.14 at 2:48 am

I would be singularly grateful to hear some/any facts unerpinning the theory of our housinge being spurred on by outside capital. Anyone ?

#124 Happy Renting on 04.24.14 at 3:42 am

Love the final call to action. Since you’ve indicated you don’t want to run for office again, I’m in for $100 for the crowdfunded GF HQ if that means I get a free tour if ever down that way.

#125 Happy Renting on 04.24.14 at 3:48 am

#23 James on 04.23.14 at 7:40 pm

I’m starting to wonder if I’m just another market-timing idiot and should start dollar cost averaging in anyway. Any comment would be appreciated!

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

Well, I’m a (restrained) market-timing idiot who is DCAing in right now (gradually). Though it feels wrong (not quite as wrong as jumping all-in, never mind what studies of historical data say), I remind myself that I don’t know what the markets will do short/medium term, so “getting it built” is likely the best thing. Curious to hear what you decide!

#126 Waterloo Resident on 04.24.14 at 3:56 am

I keep reading the same articles again and again:
“HOW TO GET RICH IN CANADA = THROUGH REAL ESTATE”

Tell a dumb person something like that over and over again and eventually they believe it. That’s what has happened to the Canadian public.

In the years 2004 to 2007 the American public believed the exact same thing too, but after their bubble popped you cannot convince them that Real Estate is the road to riches, they are drowning in Student debt all because they are trying to get new jobs after they lost their old jobs, and the only way to get a good job is with education (or so they believe).

#127 Happy Renting on 04.24.14 at 3:56 am

#88 shawn on 04.23.14 at 10:37 pm

If this works, why not have all the men go home and rate their wives on a scale of 10. Let’s see we should get about 60% rated 6 or under. Let’s see how that goes over.

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

BAHAHAHA! This is the funniest thing I’ve read all week. I imagine those men showing up at work the next day with eyes gouged out.

Besides, it’s not how well the employee is working so much as the cost of severing the employment relationship. Works that way with under-performing spouses, too.

Anyway, I’m with #71 Ray Skunk. The surprise bad appraisal is to avoid giving you any bonus or pay increase. A good manager has no surprises for employees at performance appraisal time. The good manager will have provided feedback and communicated clearly throughout the year. Of course, most of us will never have the good fortune of working for this magical unicorn good manager and just have to take those performance appraisals for what they are: less a message about your work and more a signal on your standing in the company. (I am not a big fish either, buddy, and can commiserate.)

#128 crossborderinvestor on 04.24.14 at 5:09 am

canadians are cold people, most people dont talk to you here. the weather doesnt help and the fact there is no glue to keep our society together. i tell people its just like university, 5 guys from 5 different places sharing a house together, we pass each other in the hallway and stuff but we dont really know anyone. canada is a large version of that house. canada is a house, not a home. in terms of people buying houses they cant afford at the expense of having a good life, i find young people in general nieve about the past, they know nothing about what happened in the world before they were born, and have no interest in it. everything revolves around them,
they are educated but its a watered down degree now, not like before, and they are competing for jobs with seniors who cannot leave their job or a billion foreigners here and abroad. Why buy a half million dollar house on 80 grand gross a year, hey the bank gave me the keys. If someday they want it back, well so be it. They are not prudent or have the moral backbone that we had. just hope there isnt another war, these kids would give in to the next guy with a funny mustache.

#129 Dean Mason on 04.24.14 at 6:04 am

To #55 TRT

I have been saying the same thing about interest rates since 1993 to 2014. They were 10% and now are 3.00%

They can’t go up much if at all because everyone is living on cheap money.

All consumers, small, medium size businesses, corporations, governments etc. are all hooked on it.

I hope we get a 60 cent Canadian dollar so all the cheap money they are borrowing will be paid with much higher gasoline prices, food prices, clothing prices, property taxes, electricity, heating and water bill costs, repairs and maintenance costs, car, home and other insurance costs, H.S.T, land transfer taxes, income taxes, new and higher taxes to come with much more financial pain for decades.

#130 unbalanced on 04.24.14 at 7:10 am

I really get a big laugh when you hear sales were terrible this winter. Was it really cold all over North America? The fact is SMART people know when to shop.

#131 Buy? Curious? on 04.24.14 at 7:12 am

Oh Garth, you’re adorable when you try to scaremonger. Since I got an honourable mention when you posted about the last auction, allow me to give the cute little blogs dawgs some insight.

When this place sells in August, it will be for $5.87mil. A large family will buy it. They will employ a few people (extended family) then sell it in 6 years. Will it be worth more or less then than it is now? Probably more.

https://www.youtube.com/watch?v=ZfL4xKQeSfo

#132 OttawaguyRenting on 04.24.14 at 7:32 am

#8
could end up it will be closer to a 40 precent correction ultimately,then stagnant for the next ten yr….peak oil after that…
________________________

The winner!!!!!
You are correct sir/madam

The future is bleak. It is a dark place as Peak Oil comes in within 5-10 years. Like as a REALITY.

These heels that are driving around in big SUV sucking up gas will trade that money they pis&&ed away for a meal in that time frame.

Thanks for being right on the button.

Garth has probably seen the white papers showing the need for urbanization due to peak oil… no conspiracy talk. Just REALTALK yo

#133 Brutus on 04.24.14 at 8:15 am

Ukraine forces now advancing on Sloviansk and Putin saying he will carry through on his threats.

http://www.bbc.com/news/

Gas will soon look cheap at $1.50/litre. This will accelerate the drop in house prices in suburban areas.

Let’s just hope we can avoid a larger conflict. I fear we may not.

#134 NYCer on 04.24.14 at 8:22 am

Saw a condo townhouse with ridiculous maintenance fees in Yonge/Finch area asking $769k for the last year. Slowly dropped price to $729k etc down to $699k.

Boom, sold in a few days at $719k. Gee I wonder if this will be shown as “X% over asking”.

#135 clara on 04.24.14 at 8:32 am

So the moral of the story if you must buy, choose an urban area. Ie downtown Toronto or Vancouver. A SFH and not condos.

#136 fixie guy on 04.24.14 at 8:34 am

#22 Saskatoon-Living: Yep, the housing market reflects that election cycle printing presses are now off. No more quantitative easing. American real home prices still have 15% to drop.

#137 :):(Ying Yang on 04.24.14 at 8:34 am

Hey Smoking Man my buddy is still looking at homes and looked at this one down your way. It was a nice little cottage type home. Would have been OK for me but not more than three people. These homes are dirt cheap! But you are right the neighborhood is still work in progress. He said there are a lot of sketchy people rambling around. He is worried about his children. I keep telling him Bloor West Village is out of his league.
$549000 still cheap! I guess there still are bargains in Toronto.

http://beta.realtor.ca/propertyDetails.aspx?PropertyId=14323431

#138 Aggregator on 04.24.14 at 8:44 am

As expected…

The new way Toronto condo developers are saving space

RealNet Canada Inc. released its latest stats for new condos in Toronto last week, and the numbers showed that the average size of a unit has shrunk to about 797 square feet, from closer to 900 square feet five years ago.

“The size, if it gets much smaller I can’t imagine how,” Bryan Tuckey, chief executive officer of the Building Industry and Land Development Association (BILD) told reporters on a conference call.

But there is a way. Cut ceiling heights.

“It’s already going on,” George Carras, the president of RealNet, which provides data on Canadian property markets, tells me. “We’ve seen that in a number of cases. What’s scary is that, for most people who look at the plan, you don’t see it. The two-dimensional floor plan just shows you the area – you don’t catch ceiling heights. And if you’re not used to what normal [heights] are, you won’t know what six inches off of normal is.”

Neglecting safety standards and shrinking units below code is all part of condo game and well explained in a working paper titled Pricing of Presale Properties with Asymmetric Information, that states:

In China the poorly-built quality of presale properties derives not only from the use of substandard building materials but also from mismatches between the decoration and what has been promised in the presale promotions.  Similar problems have also been found in other countries like Singapore, Taiwan, Canada and the U.K.  In Taiwan, developers can pre-sell uncompleted properties once they obtain the building permit.  Presale property buyers will usually have to pay 5% of the house price for a deposit and sign the forward contract afterwards.  Once the construction starts, the buyers have to pay 2-3% of the house price at each construction stage so that a down payment of at least 40% of the house price is settled before completion of the properties.  On the other hand, more than half of the housing complaints in Taiwan come from presale transactions and they account for 65% of the total housing complaints filed.  The three main types of complaints include poor quality building work (30.6%), shrinkage of housing space (11.9%) and incorrect housing information (21.2%). 

You see.. there's already a blueprint on how this market plays out. It's all dependent on how far developers can bypass building standards and breech contractual agreements to get a portion of speculators to default, that way i) they can raise cash by cutting space and building material quality and ii) keeping deposits on defaulted units while they seek recourse for any losses below the agreed purchase price.

It's a brilliant communist system that allows developers full control and the ability to offshore risk by shorting their own projects, however, its major flaw is that it was designed with perpetual rising prices and population growth based on hundreds of millions of people to keep the ponzi scheme going. If too many individuals (domestic and foreign) realize it's a rigged game and change their expectations, developers who are already in a cash flow squeeze would right away begin defaulting en masse.

#139 Smoking Man on 04.24.14 at 8:55 am

#137 :):(Ying Yang on 04.24.14 at 8:34 am

That will go for 100k more that list..

That’s what they do, put low price, no offers for two weeks, bidding war…

That one has a nice reno.. You want to get a dump, pop the roof off, second story. Boom, 900k

Sadly the low life’s are vanishing.. I got to take my empty wine bottles back now.

My toothless guy has been awol for a few months now..

Kind of miss him..

#140 maxx on 04.24.14 at 8:55 am

#17 45north on 04.23.14 at 7:19 pm

“”The housing market in Canada peaked months ago

” It amazes me that after the US market peaked, it has taken eight years for the Canadian housing market to peak.””

……likely the world’s most fertile ground (aided, abetted and catalysed by tptb, and fire) for jockeying this mess for all it’s worth…..a critical mass of people still in the ether.

I can’t shake the feeling that something fiscally ominous is around the corner….

A nation is its people, and Canada’s has had their wealth hollowed out. Worse, consumer and mortgage debt dwarfs net worth beyond sustainability. This is a truly sick economy.

Will Canada be forced to continue to trash its dollar to support this mess?

On the global stage, Canada will slide.

#141 lolcharts on 04.24.14 at 8:58 am

charts are meaningless. The US is huge and has many more poor rural areas / towns than Canada does. This drives down their average house price. A more legitimate statistic would be to take the top 5 strongest economic cities in the US and compare them with the top 5 from Canada. When you start comparing Vancouver, Toronto and Calgary with Manhattan, LA and San Francisco. The US market is just as hot as in Canada if not more so. Nobody cares about some one horse town in the American heartland. You can buy a house there for $20,000 and live on foodstamps for the rest of your life if you want…

You can buy a nice SFH for $450,000 in Queens. Try doing that in Etobicoke. — Garth

#142 shawn on 04.24.14 at 8:59 am

All Recourse is not created equally

#98 SCIBADUBADEBUMBADO on 04.23.14 at 10:59 pm

First, it’s not true that the U.S. is uniformly nonrecourse. Two states with among the highest foreclosure rates, Florida and Nevada, are full recourse.

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

The first sentence is true.

I have some knowledge of Florida and it’s not exactly full recourse.

Florida bank practice includes authorized “short sales” where the house is sold for less than the mortgage and the old owner is off the hook. It goes on the credit report that this was done. (Perhaps like a credititor arrangement). The bank agrees to do the short sale. The old owner has basically negotiated out of being responsible for the mortgage even though the bank sold it for less than the value of the mortgage. This may be a Fannie Mae, Freddy Mac program. I don’t know. I understand the practice is or was widespread in Florida. I simply don’t know about other States. Short sales are not approved in every case and I suspect you don’t you don’t get away with this more than once.

So, Florida in my mind is not exactly full recourse.

Others may have more information but my sources in Florida have lived there for quite a few years and have bought a short sale and been involved in real estate sales and I have asked about this.

#143 Sheane Wallace on 04.24.14 at 9:11 am

#55 TRT on 04.23.14 at 9:18 pm
Let it go higher, higher, higher….

Watch what happens!! :)

If you’re wanting a crash, let prices go higher in the meantime…

If you are a RE pumper, you should hope for a plateau…its in your best interest.

In either case, the powers that be will have 2 choices.

A) Devalue currency by about 5-7 cents per year….until we reach the 60 cent range.

B) Raise rates. They can’t! because whoever is in office will lose their seat.

Expect a maximum of a half point rise in rates in the next 5 years…along with a 60 cent dollar.
……………………………………………
60 cent Ca dollar against depreciating by 10 % a year US dollar. Great perspective.

They blew the bubble so high that there could be no rational solution that would avoid deflationary depression (bad for banks) so expect the other outcome: destruction of currencies and capital controls.

#144 DocInWaitingRoom on 04.24.14 at 9:21 am

Sure Joe just keep telling yourself those things, then see a psychiatrist as you are delusional. Fact less nonsense so either an agenda or just crazy

#145 brainsail on 04.24.14 at 9:26 am

#136 fixie guy on 04.24.14 at 8:34 am

“American real home prices still have 15% to drop.”

“Cities where home prices are hitting new highs”

http://money.cnn.com/gallery/real_estate/2014/04/22/housing-market-prices/index.html?iid=HP_River

#146 Sheane Wallace on 04.24.14 at 9:30 am

#141 lolcharts

……………………..
You can buy fantastic bungalow in California for 350 k. with far better weather and far less idiots per capita than in GTA.

#147 Gloomy Gus on 04.24.14 at 9:34 am

Reason after reason is given why Toronto real estate prices should be dropping, but they haven’t.

On another note, year after year I keep telling my friend that the Leafs will win the cup.
One year I will be right!

Let’s not get extreme. — Garth

#148 Sheane Wallace on 04.24.14 at 9:37 am

Here is another bullsh.t from the statisticians:

https://ca.finance.yahoo.com/news/baloney-meter-canadas-job-numbers-really-best-g7-120039856.html

It is amazing how brainwashed Canadians are.
Germany has economy. Canada is a resource based colony.

#149 christo on 04.24.14 at 9:40 am

Well, I still think Toronto core will not see much of a drop for houses. Condos on the other hand – it’s starting. At least for the existing/used ones. A lot of stagnant listings in good neighbourhoods. No one wants to live in a condo – even Brad Lamb admits that.

#150 Smoking Man on 04.24.14 at 9:54 am

Ying Yang.

From that bungalow, 5 min walk to go train. 17 min train ride to union.

From BloorWest village. 5 min walk to subway Two
subways to union.. 40 min

No Lake, no Southside Johnny…

Long Branch in 10 years be worth more than beaches…

Bank on that..

#151 sciencemonkey on 04.24.14 at 9:56 am

All this talk of an upcoming destruction of the Canadian dollar makes me want to shift the total percentage of my investments in non-hedged foreign equity ETFs from 50% to 60%.

@ 47 JSS: Performance Appraisal
Yeah my first year my boss said I did really well, but I couldn’t be given too high a rating (because that would necessitate a raise higher than inflation).

http://dilbert.com/strips/comic/2013-07-09/?CmtOrder=Rating&CmtDir=DESC

#152 Sheane Wallace on 04.24.14 at 10:17 am

BTW we live in very interesting times.

Obama is trying to build and rally a coalition (the guy is a community activist…) but the ONLY nations that go along with him are Canada and Japan.

It is very interesting shift in Europe towards the BRICS, something that neo-cons are fullish-ly trying to break with the escalation in Ukraine.

I can help it to feel that the west is ruled by VERY STUPID COMPULSIVE GAMBLERS.

Even UK is shifting direction.
I can’t imaging what is going to happen as these guys become desperate.

#153 Prognosis for the Leafs on 04.24.14 at 10:22 am

Ref #147 Gloomy Gus

GG, you are an optimist to say the least. I think it would be closer to the truth to say that the likelihood of the Leafs winning the Stanley cup is related to some other event such as Hell freezing over or to them winning the Grey cup (which would give them something to do during the Stanley cup playoffs). Must be nice being a Leaf player – all that time off.

Alternately, you could expand your time frame. Instead of saying some year, you could say some century which is probably about the same timeframe in which most of the youngsters that Garth has in his sights will have their mortgages paid off.

This leads me to ask if there is some secret big bank initiative to sponsor life extension research to ensure that the current crop of mortgage slaves will live long enough to pay off their debts in full. No doubt this drug will be administered monthly, in the form of a special Kool-aid that the indebted will have to drink at the bank. For those with a good record of payments, they will be able to purchase a one year supply.

So, using this line of thought about bank-funded research to develop a life-extending drug, perhaps we also need to consider why the Federal government should get involved. By extending the lives of the indebted, because they need to work, we will see an ongoing, greater-than-expected amount of tax revenue and a corresponding, less-than-expected payout of CPP and OAS.

All of this is to say that there is a possible upside to this madness that Garth has blogged about and it is this: keeping people alive into their second centuries and keeping them in the workforce will be profitable for the banks and it will be good for Canada. And just think how great it will feel for the indebted, in their nineties, as they contemplate the sheer unadulterated bliss of another 10 to 20 years of working.

#154 Sheane Wallace on 04.24.14 at 10:45 am

#153 Prognosis for the Leafs
…………………………..
I will pay you $ 100 for the rights for that post.

#155 Derek R on 04.24.14 at 11:14 am

#146 Sheane Wallace on 04.24.14 at 9:30 am wrote
You can buy fantastic bungalow in California for 350 k. with far better weather and far less idiots per capita than in GTA.

Yeah, and you can buy a fantastic bungalow in Canada for 350K with far better skiing and far less idiots per capita than in New York.

But let’s compare like with like. If you want to buy a bungalow in Palo Alto or Sunnyvale, CA or anywhere else in the San Francisco metro area, you will pay Vancouver prices, not Moncton ones.

#156 Rainclouds on 04.24.14 at 11:15 am

JSS #47 I had my performance appraisal. and it wasn’t good. For the whole year, my boss said nice things and made me feel like I was a good team worker. Today he said to me that I’m not displaying a “sense of urgency”.

The “sense of urgency” only applies to you and not him for waiting till now to divulge this ambigious turd? I smell winnable Lawsuit………

Sounds like your Co is planning to downsize and they need to cull. Nothing personal. Marching orders from HR to your idiot “leader”. It would be WELL worth the $300 bucks to consult a good Employment Lawyer to understand your rights AND how to formulate your go forward position. GOOD LUCK!

In the meantime Read this: Get rid of the performance review by Samuel Culbert….cathartic

#157 Saskatoon-Living on 04.24.14 at 11:17 am

What do you expect after that winter? — Garth

Yep, it snowed in California. The US 10yr is saying growth is slowing. You still going along with the consensus for a 7% increase in the S&P??

Now, when did I ever say that? — Garth

#158 Mixed Bag on 04.24.14 at 11:22 am

That Doulton Drive house looks good to me. I couldn’t get a Google street view of the place, what with all the trees. The lot dimensions are 124.61ft x 350.0ft, which is roughly 2.5 times the size of my lot, and about 2.5 times the size of the Saxony lot (that can’t be right, but that’s what it says on http://www.2290saxony.com/about-this-property/).

Now imagining the Doulton Drive house on my, my neighbour’s, and half the other neighbour’s lots, and doubling the length…. I’d say, yeah, it’s in better proportion to the lot size.

Notice the wood trim around the doors and windows – that will appeal to the male buyers.

#159 Realtor Fool on 04.24.14 at 11:24 am

WOW… The majority of posters here are realtors and have been for some time. Looks like the peak of the market has been hit like Garth has been saying and we are headed on the long road DOWN. Many open houses full of people end up sitting on the market. Sales are way down and prices have been dropping which means a lot of hurting realtors posting on garths blog. It’s over realtors.

#160 Bramalea on 04.24.14 at 11:32 am

Here are 650,000 reasons per year the housing market is going higher.

http://www.newswire.ca/en/story/1343543/royal-bank-making-it-easier-for-newcomers-to-settle-in-canada

Wrong. Immigration this year will not exceed 250,000, per usual. — Garth

#161 miketheengineer on 04.24.14 at 11:39 am

When I see 1 million dollar homes and such up for sale, I think to my self, who owns these buggers…then I think of all the government employees who earn more than 100k, and I think of a teacher I know, who earns 90k, and is married to another teacher earning about 90k…total is 180k. These must be the people who own these things…government workers/manager and their spouses. (and Doctors/lawyers/Dentists/Real Estate Brokers..add to the list anyone else)

I really feel bad when someone has to sell a property like that. They would have put in a lot of “personal” touches into that home…and it must really break their heart to sell it.

Everyday I would love to move up…and I keep dreaming of the day until I can find my next home ~ a SFH, 1800sf on a pie shape lot….I keep dreaming, but I keep getting nightmares….then cry myself to sleep.

#162 SCIBADUBADEBUMBADO on 04.24.14 at 11:47 am

#108 T.O. Bubble Boy on 04.23.14 at 11:27 pm

@ #68 45north on 04.23.14 at 9:40 pm

Both of you are dreaming. The Government will not let go of a political tool like the CMHC.
All the people paying 100’s of thousands more for their homes are doing so to support the political party in power who in turn uses the CMHC for political points.
The government knows that if house prices rise homeowners (Voters) are happy in their own sick and twisted way. The will vote for the incumbent as long as things are looking good on the month before election day.

The Government will ask themselves 2 questions before making policy.
1. What is good for the country. Ans. Who cares.
2. What is good for the party. Ans. Do it.

#163 Son of Ponzi on 04.24.14 at 11:48 am

RBC says 650,000 new immigrants a year.
http://www.newswire.ca/en/story/1343543/royal-bank-making-it-easier-for-newcomers-to-settle-in-canada

RBC is a bank – with bad copywriters. Immigration this year will total 250,000 (0.8% of the population), consistent with the last five years. — Garth

#164 Sheane Wallace on 04.24.14 at 11:58 am

#155 Derek R

But let’s compare like with like. If you want to buy a bungalow in Palo Alto or Sunnyvale, CA or anywhere else in the San Francisco metro area, you will pay Vancouver prices, not Moncton ones.
…………………………….
Wrong, utter bullsh.t and nonsense.
Even if you have Mark Zuckerberg as neighbour you probably pay less than in Vancouver.

Nice trick, comparing the incomparable: Vancouver and the Bay Area.

Do you know how many millionaires live in the Bay Area and how many top companies have offices there?

What is the Bay area average income and what is the income in Vancouver?

Average house in Santa Clara sells for 700 k while in Vancouver it sells for 1.36 mil.

#165 Sheane Wallace on 04.24.14 at 12:05 pm

#155 Derek R

And if you would like to compare likes for likes compare the prices in Palo Alto with the down town/lakeside in Oakville. Guess what, Oakville wins, and you get the extra bonus with the horrific smell from the Burlington/Hamilton factories.

#166 Pre Retiree on 04.24.14 at 12:09 pm

About the Saxony house. This is a sad story of so-called progress. I had the chance to visit the previous house that was on that site. It burned down and they demolished it. It was a beautiful plantation-like white house. While it looked grand to me, it was much smaller than the monstruosity that replaced it, and it looked more in harmony with its surrounding. The replacement is odious, puffed up, and pretentious which no doubt will match the next owner. Toronto and GTA, and apparently Canada needs to get a grip on reality.

#167 Prognosis for the Leafs on 04.24.14 at 12:14 pm

Ref # 154 Sheane Wallace

No need; it is yours unless Garth owns it. I certainly wasn’t paid for it (nor would I expect to be).

To the all-knowing, all-seeing Greater Fool legal team: your copyright notice at the bottom of the page needs to be updated to include 2014.

Cheers

It’s 2014? — Garth

#168 Sheane Wallace on 04.24.14 at 12:20 pm

#161 SCIBADUBADEBUMBADO
…………………….
You make one basic assumption which is wrong:
That governments can control long term interest rates.
THEY CAN’T.

Once we burn through the savings (which is capital) what is going to fuel the expansion? More money printing at zero interest rates?

When TSHTF is ain’t gonna be pretty and just watch out for the capital controls that the governments would be forced to use at that point.

#169 johnny d on 04.24.14 at 12:22 pm

Uh oh!

Poloz is going to speak at a gathering this afternoon. DOWN GOES THE CANADIAN DOLLAR!!!

#170 Vamanos Pest on 04.24.14 at 12:26 pm

#24 Joe
“…most of UK and Canada bought by Chines and Russians”
FALSE

“most paid in cash”
FALSE

Joe #30
“housing market in Canada became expensive because of wealth coming from outside of Canada”
FALSE

JOE #38
“rich house owners and poor renters”
FALSE
(rentals being foreclosed on is becoming a common story. Why would a “rich house owner” be in foreclosure?)

#46 Joe
“population growing, newcomers coming”
FALSE (in the sense that there has been no spike in population or immigration that would correlate with the rise in house prices)

Thanks Joe. We all love hearing the opinions of people that bog themselves down with things like facts or truth.

#171 :):(Ying Yang on 04.24.14 at 12:28 pm

#150 Smoking Man on 04.24.14 at 9:54 am
Ying Yang.
From that bungalow, 5 min walk to go train. 17 min train ride to union.
From BloorWest village. 5 min walk to subway Two
subways to union.. 40 min
No Lake, no Southside Johnny…
Long Branch in 10 years be worth more than beaches…
Bank on that..

………………………………………………………………………

Buddy works in the movie industry and is 5 min from work at a huge production stage. Doesn’t need downtown but prefers west end. Needs a decent neighborhood for the kids. As for the Beach hes been there and done that. Ehh! His wify poo likes the fancy trendy cafes, shops and nightlife on Bloor, lots of Pubs and good music, (they are very Indy). I looked at his place on the MLS thing last night, hes not going to make an offer. Real Estate agent said let this one pass. Don’t know why its still cheap. Oh ya his wify poo was bitching about it being the most heavily polluted area of Toronto, she showed me a report from the City and she is correct. She worries about the kids long term exposure.

#172 Pre Retiree on 04.24.14 at 12:28 pm

#75 Led on 04.23.14 at 10:19 pm

Maybe our parents would not have stood a chance, but then again, they did not have granite counters, Miele appliances, movie rooms, wine cellars, cool shower heads, and the rest, ….and a German made car in the driveway. They were content with less. In other words, they lived within their means.

#173 BCD on 04.24.14 at 12:29 pm

#6 prairie person on 04.23.14 at 6:47 pm
Garth, your choir, that’s us, sings the chorus to your solo but I’m afraid the audience has disappeared and is away singing with the realtors. Every time I go out, I see more sold signs. Who are these people buying properties at ridiculous prices? One place went up and was sold within two days. Vacant lots are appearing for sale again. 350 to 400. Cheap by Vancouver standards but still a stiff price with which to begin. Lot of costs added on before there’s a house ready to move into. More calls for a housing correction. No one is listening. The bankers are singing loud and strong. They’ve got the audience. Record low interest rates will stay low forever is one tune. Buy now or get locked out forever is another on the hit parade. People seem mesmerized.
_________________________________________

I repeat. There will be no housing crash of the “supreme reckoning” kind. Maybe a correction of 10% +, or a flattening for a few years, but what does that mean when your residence has risen 50%+?

Think about what you just wrote. . .you are spouting off all the tell tale signs of a booming real estate industry. . .and you expect a crash? It’s called not seeing the forest for the trees.

Greater fools are half the folks reading this blog.

#174 Aggregator on 04.24.14 at 12:29 pm

Like clockwork, just as home sales start falling…

Royal Bank making it easier for newcomers to settle in Canada

TORONTO, April 24, 2014 /CNW/ – RBC Royal Bank today announced it has made a number of enhancements to make it easier for newcomers to manage their finances and settle in Canada. The changes being made recognize the unique needs of newcomers and better enable access to credit products, including options that require no Canadian credit history.

"Each year, we welcome approximately 650,000 immigrants to Canada and one of the common challenges newcomers face is establishing credit in their new home country," said Christine Shisler, director, Multicultural Markets, RBC. "We want to be the bank that helps people with their important firsts – their first bank account, their first credit card, their first car purchase and their first home. These are significant milestones and we want to make the transition to Canada as seamless as possible by recognizing their needs and values."

Everything is controlled. And I mean everything. A Threat To Canadian Sovereignty "It's all the same [global] plan"

You are certainly controlled – by your boundless paranoia. — Garth

#175 Bravo! "Aggregator" on 04.24.14 at 12:46 pm

post #59 —

Garth does’t like those facts. He just wants to preach his sole wisdom and ignore where the true wealth in our housing market is coming from,so he can be on national tv saying he’s been calling for a correction for the last # of years and thus sell more books. A bit like a Shiller or Taleb. N’est pas, Garth?

There are not, nor ever have been, 650,000 annual immigrants to Canada. — Garth

#176 Suede on 04.24.14 at 12:48 pm

#129 Dean Mason

You better not hope for a 60 cent CAD unless you want all Canadian hockey teams except maybe Toronto and Montreal to skip the country.

#177 Humpty Dumpty on 04.24.14 at 1:02 pm

Sadistic Times…

VICTORIA, British Columbia, April 23, 2014

The British Columbia Health Ministry has admitted that the remains of babies destroyed by abortion in B.C. facilities are ending up in a waste-to-power facility in the United States, providing electricity for residents of Oregon.

http://www.lifesitenews.com/canadian-aborted-babies-incinerated-in-oregon-waste-to-energy-facility-to-p.html

#178 TnT on 04.24.14 at 1:03 pm

#173 Aggregator

Hey Aggie

You usually have better resourcing skills than this…

250K per year is a rather easy find.

This 650K number may include the temporary workers (new and repeat)…

Source out a true answer for the numbers of immigrants to Canada per year and let us know what you uncover…

PS.. love your posts :)

#179 fixie guy on 04.24.14 at 1:04 pm

#145 brainsail: Lies, damn lies and statistics sir. Dallas is one of the few American markets experiencing relatively little appreciation leading up to 2008 collapse:

http://www.spindices.com/indices/real-estate/sp-case-shiller-tx-dallas-home-price-index

From a baseline of 100 in Jan 2000 it peaked at 126 in Aug 2007, falling to a minimum of 112 by Jan 2012. 2012 is also the year prices started rising again. Did I happen to mention a flood of presidential election QE in 2012?

#180 fixie guy on 04.24.14 at 1:17 pm

#161 SCIBADUBADEBUMBADO: “The Government will not let go of a political tool like the CMHC.”

The government has no choice. If governments has complete free reign to manipulate market economies at will Cuba and the CCCP would own the world. Canada, along with its government funding, operate in a global market economy with no obligations outside our border to fund our lunacy. As it becomes more and more obvious Harper’s self-proclaimed ‘economic miracle’ rested not on responsible financial regulation but irresponsible and hidden housing stimulus foreign wealth will seek safer pastures. The only real question is whether they can sustain destructive policies long enough to pass the consequences to another party.

#181 Snowboid on 04.24.14 at 1:19 pm

#9 Okanagan Valley on 04.23.14 at 7:03 pm…

“…here in the Okanagan Realtors and Sales staff alike have really started to get desperate…”

I would suggest they have been desperate for a couple of years now.

As spring listings start popping up I can’t help but notice most are re-lists from last year. Many are down in asking price, some are only token reductions as agents insist it will be a strong year – a sellers’ market.

As the Professor noted the average price of homes is 66% higher in Canada than the US.

The closest listings in the Okanagan to the home we own in Phoenix are substantially higher than that figure, even as prices are up down south and going down here.

It’s more than double up here, hence our strategy to stay patient. The prices are indeed coming down in Kelowna, despite the bleating of the local RE pumpers.

The development you mention is certainly not unique in the Okanagan, there are several that still look like ghost towns!

BTW, they are trying the bidding ‘war’ technique here in the Okanagan as well – can’t repeat what we told the agent who tried this scam on us last week!

#182 BCD on 04.24.14 at 1:30 pm

Regarding this mansion as the Greater Fools headquarters. Garth, set up an Indiegogo to buy the place and I will contribute. You could hold the annual blog dog reunion there. I can teach Smoking Man how to start vaping to save his lungs.

#183 Dr. Talc on 04.24.14 at 1:33 pm

@aggregator

my 2 cents

Agenda 21 is a UN initiative
The UN is 100% controlled by UK (and commonwealth)
Canada is a colony
Canadian sovereignty is an illusion
What is commonly called NWO is
British Imperialism with a new name

“More tea M’Lord?”

#184 Alan on 04.24.14 at 1:42 pm

I will some suspense. Sometimes it is really easy to read central bankers statement…”…Accommodative for a very long time…”

2015 .25% increase
2016 .25% increase
2017 .25% increase
2018 .25% increase

Bingo 2019 @ 4% interest rate!

Amazing 1.00% increase over 4 years. Now wonder why people continue to buy?

Also, CMHC isn’t the problem. Just because someone defaults on their home, tax payers are on the hook. For that to happen, the bank needs to default on that mortgage as well. Do you really think any Canadian banks will default?

Real Estate is one of the safest longterm bet. Some years are up some years are down. So what?

#185 Holy Crap Wheres The Tylenol on 04.24.14 at 1:44 pm

Another freeloading nut-bar that loves to use the word Slaves in a sentence. Wow its hard to believe people like this still exist. So interesting to see the GOP running like rats from the funigator away from guy that they supported. “Ready set” “About Face” “March or Run”

http://www.nbcnews.com/politics/politics-news/gop-scrambles-condemn-ranchers-remarks-race-n88556

#186 BCD on 04.24.14 at 1:48 pm

#47 JSS on 04.23.14 at 8:44 pm

Today he said to me that I’m not displaying a “sense of urgency”. what a complete load of bs. I work hard, ok? sorry but I need to vent.
____________________________________________

Drink 3 large glasses of water, wait 20 min and go see him again.

#187 jess on 04.24.14 at 1:48 pm

alternative definition of retail?

http://www.sec.gov/rules/proposed/2013/33-9408.pdf?utm_source=page&utm_medium=/financial-reporting-network/insights/2013/sec-proposes-money-market-reform-rules.aspx&utm_campaign=download

http://www.reuters.com/article/2014/03/26/sec-moneyfunds-idUSL4N0MN4B420140326

======
\
Press Release
SEC Halts International Pyramid Scheme Being Promoted Through Facebook and Twitter

INVESTOR ALERT: BEWARE OF FALSE CLAIMS OF SEC REGISTRATION
Share on print Share on facebook Share on twitter Share on email More Sharing Services 37

March 20, 2014

The SEC’s Office of Investor Education and Advocacy is issuing this Investor Alert to warn investors about potentially fraudulent investment schemes that involve individuals or firms misrepresenting that they are registered with the SEC. Investors should be careful to check the background, including license and registration status, of any person who tries to sell them an investment product or service, and should avoid investing with anyone who falsely represents that they are registered with the SEC.

Fraudsters may try to lure you into investing with them by falsely claiming to be registered with the SEC. In a recent fraud case brought by the SEC, SEC v Fleet Mutual Wealth, the defendants allegedly promised investors guaranteed returns of 2-3% per week through the use of a high frequency trading strategy, but instead used investors’ money to operate a pyramid scheme. The defendants allegedly recruited investors by misrepresenting that their firm was “registered” or “duly registered” with the SEC and pointing to the firm’s Form D filings to support this misrepresentation.
http://www.sec.gov/enforce/investor-alerts-bulletins/investoralertsia_falsereg.html#.U1lN_6Lhssg

#188 Holy Crap Wheres The Tylenol on 04.24.14 at 1:57 pm

#176 Humpty Dumpty on 04.24.14 at 1:02 pm
Sadistic Times…
VICTORIA, British Columbia, April 23, 2014
The British Columbia Health Ministry has admitted that the remains of babies destroyed by abortion in B.C. facilities are ending up in a waste-to-power facility in the United States, providing electricity for residents of Oregon.

http://www.lifesitenews.com/canadian-aborted-babies-incinerated-in-oregon-waste-to-energy-facility-to-p.html
______________________________________________
Sick, disgusting, immoral the whole thing is just twisted. I smacks just shy of Soylent Green.

http://www.youtube.com/watch?v=9IKVj4l5GU4

#189 BCD on 04.24.14 at 1:57 pm

#49 Chris on 04.23.14 at 8:46 pm
I put an offer on that house. It was more than reasonable. (above current price). It was rejected. There is more at play here than even Garth knows.
__________________________________________

You mean there is a conspiracy to make you a renter for eternity? What’s “at play” here is a case of natural selection. The better men have more money, more buying power, and more cars/women. Where did you grow up? A Fairytale? You feel entitled to a home because you made a “reasonable offer”? I feel sorry for your state of mind. The world is very cruel indeed, and you are discovering that. Go back and figure out what you did wrong and improve it, don’t blame “conspiracies to keep you down” all the losers do that.

“Destiny is no matter of chance. It is a matter of choice. It is not a thing to be waited for, it is a thing to be achieved”
–William Jennings Brya

#190 Dave D on 04.24.14 at 2:03 pm

#96 Old Man
I was actually planning to rent something similar to what I had when I was a student at UWO. back then I was paying $550/month I can get the equivalent place for less than $800 now. I know that the area west of Adelaide is kind of seedy and would never consider buying anything there. But I’d be quite happy renting an see what happens. my dividends from my balanced portfolio will more than cover my rent so not in a rush to buy. Buy even now on mls Ive seen places that I could write a cheque for that would go for 2+ million in this GTA hellhole its NUTS!

#191 Aggregator on 04.24.14 at 2:13 pm

Immigration this year will total 250,000 (0.8% of the population), consistent with the last five years. — Garth

That excludes foreign workers and students. The total number of immigrants was 576,270 in 2012 (1.6% of the population) according to CIC data. And the plan is to increase total immigration to 800,000 by 2018.

But here's the catch: total home sale transactions in Canada equates to 1.3% of population, that means if only 10% of newly landed immigrants purchased homes, they would increase national sales by 12.5%! That's how big our immigration program is, which is now the largest per capita immigration program in the world, with an outstanding migration stock of 20% of population (UN data).

I've been watching this market long enough to recognize what is now obviously the government's plan to keep our housing market (economy) from collapsing. Never for a minute did I believe their intention was to defalte housing. That is political suicide, and the reason why F always said his intention was to "cool" the market, as in grow in at single digits as opposed to double digits. No finance minster would be stupid enough to deflate housing when the largest allocation of the Big Five's assets is mortgages.

I know how this goes. Next you're going to see something quietly announced from CMHC on risk based mortgage insurance to allow more subprime deadbeats to exercise their Canadian birthright to affordable housing, backed by you, the taxpayer. This is what the government (commanded by GG and United Nations) will keep doing again and again until they lose control and the bond market says enough is enough.

Here's a few minutes of hedge fund manager Kyle Bass (a bond buyer) on what he thinks about Canada's housing market. Video (35min market) And pay close attention when he chuckles about broker's numbers (he means CREA) and how they calculate MOI without disclosing the number of listings in Canada (although it can be calculated for which he must have figured out). You can't fool him.

Students and temporary workers are not immigrants and don’t usually buy houses. Your bias against newcomers is truly disturbing, as it the tone of so many others here. Quite sad. — Garth

#192 Nemesis on 04.24.14 at 2:15 pm

#PickledPropertyTrivia #Who’sJerkin’TheirGherkin!?

[UK Independent] – In a pickle: City’s LandMark ‘Gherkin’ tower to be auctioned off as receivers called in

…”The tower, formally known as 30 St Mary’s Axe, was at one time the UK’s most expensive office when German bank IVG and private equity firm Evans Randall bought it for £630 million from original owner Swiss Re at the top of the market in 2007.

But the financial crisis sent its value plunging and the buyers defaulted on a £400 million loan from a five-bank consortium in 2009…

…But recovering property markets and huge demand for assets in the capital have boosted sale prospects for the Gherkin, prompting lenders to bring in Deloitte as receivers. It is understood a sale is likely within months…

…Potential buyers include Chinese insurer Ping An, which bought the Lloyd’s Building for £260 million last year.”…

http://www.independent.co.uk/news/business/news/in-a-pickle-the-gherkin-to-be-auctioned-off-as-receivers-called-in-9283830.html

#193 jess on 04.24.14 at 2:17 pm

“skilled”

http://www.righands.com/news/news-detail/65-alberta-oil-workers-fired-replaced-with-croatian-guest-workers-561

http://www.sunnewsnetwork.ca/sunnews/canada/archives/2014/02/20140207-161925.html

http://www.cbc.ca/news/politics/skilled-immigrants-to-be-offered-express-entry-to-canada-in-2015-1.2617961

#194 Daisy Mae on 04.24.14 at 2:29 pm

A Look at Canada’s 2014 Immigration Planning

The table below shows the levels range and the operational targets.

Levels range Operational targets
2014 240,000–265,000

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

So…Garth is correct.

#195 Free Beer Tomorrow on 04.24.14 at 2:38 pm

Everything is controlled. And I mean everything. A Threat To Canadian Sovereignty “It’s all the same [global] plan”

You are certainly controlled – by your boundless paranoia. — Garth

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

How is the gentleman paranoid when Agenda 21 is right on the UN’s own website?

http://www.un.org/esa/dsd/dsd_sd21st/21_pdf/SD21_Study1_Agenda21.pdf

#196 bill on 04.24.14 at 2:40 pm

the french provincial faux pas doesnt get reserve…

#197 Free Beer Tomorrow on 04.24.14 at 2:53 pm

#148 Sheane Wallace on 04.24.14 at 9:37 am
Here is another bullsh.t from the statisticians:

https://ca.finance.yahoo.com/news/baloney-meter-canadas-job-numbers-really-best-g7-120039856.html

It is amazing how brainwashed Canadians are.
Germany has economy. Canada is a resource based colony.
@@@@@@@@@@@@@@@@@@@@@@@@@@@

And its worse than that…..the Govt lies about its unemployment numbers like crazy. They don’t count people on welfare. They don’t count self employed. They don’t count people that don’t qualify. What does that bring our un-employment up to? 10%? 15%?

#198 killaboy on 04.24.14 at 2:58 pm

Why is cheese so bloody expensive these days?

Not a cheese blog. — Garth

#199 Running late on 04.24.14 at 3:29 pm

So where do I invest so that when housing prices drop and the Canadian market falls I have the cash to swoop in and score some good deals? It seems you are not a fan of being overly conservative but measuring risk. You also encourage us to avoid the standard mutual funds from the bank which is what I have right now only because I understand them (TFSA AND RRSP). The banker I went to see didn’t offer much advice and I felt I already knew as much as they told me. I know how these tools work and was shown the menu of options to pick. Where do I go to get the right advice, especially if I am 30 year old hipster that doesn’t have $400K (yet) to move to to a money manager? There are alot of bankers, advisors but it seems unless I have more money to move there is a lack of real advice available.

#200 Smoking Man on 04.24.14 at 3:30 pm

#170 :):(Ying Yang on 04.24.14 at 12:28 pm
Pollution?

Not by the lake, South of lakeshore, mind you, my gazebo gets a bit smokey…

#201 Exurban on 04.24.14 at 3:33 pm

The Royal Bank figure of “650,000 immigrants” may or may not be a little high — take banksters with a grain of salt — but it’s quite plausible if you’re talking about people arriving in the country every year. There are three main categories: regular immigrants, Temporary Foreign Workers, and international students.

Let’s go straight to the numbers. The quota of regular immigrants is set at 265,000 this year. Check that here. This target will probably be met, as Canada has had record numbers of regular immigrants for the past several years. Check that here.

Next, we’ve got the so-called Temporary Foreign Workers program. How many of them are arriving? Statistics are muddied, as with real estate, but we know that 125,000 arrived in the first six months of 2013. Check that here. You’ve heard about them at Tim Hortons and McDonald’s; there are also scads of them in janitorial services and convenience stores. Most of the ones I have talked to personally are from the Philippines and don’t intend to return there any time soon. It seems safe to project that 125,000 in six months out to 250,000 a year — a major boost for the urban RE rental market.

Next, international students. There are often not the educational tourists most people believe them to be. Many see being an international student as a “pathway to citizenship”, to use the jargon of the industry. There are officially about 270,000 in the country, the majority in Metro Vancouver and the GTA. Check that here. There appears to be no mechanism whatsoever to monitor that these people leave the country after graduation or visa expiry. According to federal government stats at least 80,000 international students arrive every year. Check that here. They need a place to stay, and many of them are allowed to work and do so.

So, this gives us some clue to the numbers. There must be some illegals, either arriving by boat or arriving as tourists and staying, but I’m not going to estimate any number there. There are Canadians leaving the country or dying, sure, but we’re talking about arrivals here. That 650,000 figure from RBC is probably pretty close to reality.

It isn’t. RBC statess 650,0000 ‘immigrants’. Temporary workers and students on short-term visas are not immigrants, and do not buy houses. — Garth

#202 bullishBCbear on 04.24.14 at 3:39 pm

check out an article on coal harbour in Vancouver, (its really nice to walk around there at nite (you can walk down the middle of the streets, no car traffic at all!)
http://www.theglobeandmail.com/life/home-and-garden/real-estate/at-vancouvers-cold-harbour-a-neighbourhood-hollows-out/article11713598/

#203 jess on 04.24.14 at 3:40 pm

“kingdom time” or the making of a “king”
Dr. Xu Ming, founder of WCM777.com and a devout Christian, is an active angel investor, private equity fund investor, M&A expert and investment banker in China and the United States.
http://passiveincometrend.blogspot.ca/p/blog-page_5601.html
======================

SEC Halts Pyramid Scheme Targeting Asian and Latino Communities
Share on print Share on facebook Share on twitter Share on email More Sharing Services 1.6K
FOR IMMEDIATE RELEASE
2014-60
Washington D.C., March 28, 2014 —

The Securities and Exchange Commission today announced charges and asset freezes against the operators of a worldwide pyramid scheme targeting Asian and Latino communities in the U.S. and abroad.

The SEC alleges that three entities collectively operating under the business names WCM and WCM777 are posing as multi-level marketing companies in the business of selling third-party cloud computing services, which can include website hosting, data storage, and software support. The entities are based in California and Hong Kong and controlled by “Phil” Ming Xu, who is a resident of Temple City, California.
According to the SEC’s complaint filed in federal court in Los Angeles, WCM and WCM777 have raised more than $65 million since March 2013 by falsely promising tens of thousands of investors that the return on investment in the cloud services venture would be 100 percent or more in 100 days. Investors were told they would receive “points” for making investments or enrolling other investors. The points would be convertible into equity in initial public offerings of high-tech companies their money would help launch. However, rather than building out cloud services or incubating high-tech companies, Xu and the WCM entities used investor funds to make Ponzi payments of purported investment returns to some investors. They also spent investor money to purchase golf courses and other U.S.-based properties among other unauthorized expenditures…”

==========
SEC says shuts cloud computing scam targeting Asians, Hispanics

By Jonathan Stempel

Fri Mar 28, 2014 2:56pm EDT
http://www.reuters.com/article/2014/03/28/us-sec-pyramidscheme-cloudcomputing-idUSBREA2R1MW20140328

#204 Gloomy Gus on 04.24.14 at 3:53 pm

Canadians can expect to enjoy relatively cheap borrowing costs for some time to come — perhaps years — even after the economy returns to full capacity.

Welcome to the new normal.

http://business.financialpost.com/2014/04/24/bank-of-canadas-stephen-poloz-says-interest-rates-to-remain-low-for-years-to-come/

#205 Saskatoon-Living on 04.24.14 at 4:05 pm

Now, when did I ever say that? — Garth

January 12th post, reply to comment #20 from Stephen Brewer:

I said equities will likely finish the year higher. And why would anyone buy a bond index fund? I’m still aiming for 7-8%. — Garth

http://www.greaterfool.ca/2014/01/12/the-road-ahead/#comments

The reference was to a balanced portfolio, not the S&P. Nice try. — Garth

#206 Smoking Man on 04.24.14 at 4:16 pm

Poloz, and I quote……

Low rates for years, and years……

Not the smartest thing to say just as the dandy lions about to bloom…

And virgins engorged with house hormones…

#207 Big 5 Employee on 04.24.14 at 4:18 pm

Aggregator, I presently work in the mortgage dept at a big 5 bank. I can assure you those 650,000 numbers are correct. We had it presented at our monthly briefing. I can also tell you it is much easiercgetting approved if you are a foreigner rather than a citizen as we require zero credit history.

Troll. — Garth

#208 Old Man on 04.24.14 at 4:28 pm

#190 Dave D – You mean’t east of Adelaide and discount the south for real estate too. You will not find a descent one bedroom for $800 a month, as take a ride with google mapping for two apartment selections as both built in the recent past. One is in the trendy core, and the other is core west with bus service at the door – both prime locations.

71 King Street which appears to be an apartment condo mix, and 600 Proudfoot Ln.. Renting is the way to go, as when Toronto gets hit there will be a wave reaction delayed and most homes will be discounted from fear listings before a final bottom.

#209 Nemesis on 04.24.14 at 4:36 pm

#QuelleSurpriseThursday #WirFahr’nFahr’nFahr’nAufDerAutobahn #AugmenteToutLeTemps #’ProofOfIntent’

[SurreyNow] – Ferrari driver busted in Surrey for ludicrous speeding – with child in the car

http://www.thenownewspaper.com/news/ferrari-driver-busted-in-surrey-for-ludicrous-speeding-with-child-in-the-car-1.982894

[CBC] – Temporary Foreign Worker Program linked to joblessness, report finds

http://www.cbc.ca/news/business/temporary-foreign-worker-program-linked-to-joblessness-report-finds-1.2620551

[CBC] – Robocalls made across Canada in 2011 won’t bring charges

http://www.cbc.ca/news/politics/robocalls-made-across-canada-in-2011-won-t-bring-charges-1.2620444

…hMMM… I wonder what JohnLennon would say?

http://youtu.be/v_0di2IL440

#210 Zeeman1 on 04.24.14 at 4:46 pm

Oh crap Garth!

BOC just declared low rates for years to come.

Oh well, looks like were more than screwed now.

The ultimate catch 22. The only advantage is that those with discipline can eliminate debt at historic low rates.

Poloz made now such declaration. Besides, it’s the bond market, not the BoC, you should watch. — Garth

#211 OttawaguyRenting on 04.24.14 at 4:49 pm

Agenda 21 is supported by those surrounding themselves with the Prodigal son Mr.T

Libs like big “downtown” work and tech hubs with CONDO living for all. Compressed into boxes in the urban center.

Watch for higher prices for “delivery” of Hydro to suburbs and rural areas. Inner city “hubs” will gain benefits from higher “public transit” tax credits and land tax transfers will be higher in rural and suburban sprawl.

Mark these words.

Ask yourself why Mr.T is surrounding himself with WWF nature granola.
Ask yourself why condos are being built at a tremendous pace?

Wrinklies will be buried right in their suburban bungalows.
Us Hipsters will be living downtown watching the hills burn.

If you don’t get killed first by a collapsing semi. — Garth

#212 economictsunami on 04.24.14 at 4:51 pm

So what else is going on in the Faux US Housing Market?

They’re not sure whether it’s weather related slowing or not but…

Economists Stunned By Housing Fade, But I Told You So:

http://streettalklive.com/index.php/analysis/daily-x-change.html?id=2185

I would have used the ZeroHedge link but I know how dismissive the herd can be…

#213 Rapier Wit on 04.24.14 at 4:57 pm

OK Garth, What is this nonsense all about? Are the inmates running the asylum or is this the bold new future of the Canadian economy?

http://business.financialpost.com/2014/04/24/bank-of-canadas-stephen-poloz-says-interest-rates-to-remain-low-for-years-to-come/

#214 Still Renting on 04.24.14 at 5:01 pm

The figure of 650,000 immigrants seems to have touched off a lot of debate here, But it’s pretty easy to get to the heart of the matter, since RBC’s press release provided contact info for their Communications staff. So I checked with them, and the response was that the figure referenced includes all Newcomers – all Visa types – permanent and temporary residents, including foreign workers and international students.

Since the word immigrant is usually defined as meaning “a person who comes to live permanently in a foreign country”, I think we can all agree the RBC press release should more accurately have referred to Newcomers.

For the purposes of this blog, I think the key figure is the 250,000 mentioned by Garth because that’s the figure which actually impacts overall population and housing demand. The other 400,000 form a sort of dynamic equilibrium (ie: each year some foreign students and temporary workers will leave while new ones will arrive in roughly equal numbers, so they don’t affect the demand for housing).

#215 Old Man on 04.24.14 at 5:07 pm

There was an update on that semi collapse and the renters in the one cannot return and on the other semi there are living elsewhere. There are a couple of construction engineers looking at the problems and they really don’t know what to do yet. I say bring in the wrecking crew and make a parking lot.

#216 Son of Ponzi on 04.24.14 at 5:13 pm

Re: 650, 000 new immigrants.
If we can’t trust the venerable Royal Bank of Canada.
Who can we trust?

Not RBC’s communications department. These are not all immigrants. Period. — Garth

#217 Sarah on 04.24.14 at 5:25 pm

Poloz made now such declaration. Besides, it’s the bond market, not the BoC, you should watch. — Garth

And its signaling low rates for very very long time.

Don’t invest on that premise. — Garth

#218 Bargains everywhere on 04.24.14 at 5:26 pm

There are not, nor ever have been, 650,000 annual immigrants to Canada. — Garth

Garth, I checked the statistics and you are correct so I emailed one of the writers of the article to advise them of their error. Let’s see if they update it.

#219 Bargains everywhere on 04.24.14 at 5:37 pm

RBC states 650,0000 ‘immigrants’. Temporary workers and students on short-term visas are not immigrants, and do not buy houses. — Garth

However, I do have to disagree with you regarding students as immigrants. I know of several students who have come over here and bought a house or condo while going to school. If I know a few, I’m sure others do as well. It may only be a small number overall but to say, ‘they do not buy houses’ is a fallacy.

Many of them stay after graduating and go on to become citizens. It can be an excellent way of becoming a Canadian. I wouldn’t be too quick to dismiss them as not being a factor.

#220 Bargains everywhere on 04.24.14 at 5:43 pm

Here is the response from Jill Anzarut at RBC:

Thanks for your email. The stat we referenced includes all Newcomers – all Visa types – permanent and temporary residents, including foreign workers and international students. While often people associate newcomers or immigrants with permanent residency, we think more broadly as we have solutions in place for many more newcomers. Credit is a need for them as well when they come to Canada. Hope this clarifies.

#221 Son of Ponzi on 04.24.14 at 5:46 pm

So may I assume that government statistics produced by overpaid civil workers are more accurate than those produced by honest and hardworking bankers
Confused!
That’s why I don’t trust statistics no matter who reports them.

#222 Smoking Man on 04.24.14 at 6:12 pm

Ying Yang

I walk the down to that little house…

100 cars, line up to get in.. Virgins, old bastards, and Asians, lots of Asians…

If fact didn’t see one Asian on the long branch line last year, now plenty..

That can only mean on thing for owners in Long Branch….

$$$$$$

You think people in Hong Kong follow the great Smoking Man?

#223 Old Man on 04.24.14 at 6:31 pm

#221 Smoking Man – saw the property you linked in Long Branch and its a winner. I wish that the address was disclosed as wanted to drive around in my new google caddy to look around a bit.

#224 general observer on 04.24.14 at 6:32 pm

#137 :):(Ying Yang on 04.24.14 at 8:34 am
Hey Smoking Man my buddy is still looking at homes and looked at this one down your way. It was a nice little cottage type home. Would have been OK for me but not more than three people. These homes are dirt cheap! But you are right the neighborhood is still work in progress. He said there are a lot of sketchy people rambling around. He is worried about his children. I keep telling him Bloor West Village is out of his league.
$549000 still cheap! I guess there still are bargains in Toronto.

http://beta.realtor.ca/propertyDetails.aspx?PropertyId=14323431

Me – I like that house and price.
Would you kindly comment sir Garth.

#225 general observer on 04.24.14 at 6:57 pm

#162 Son of Ponzi on 04.24.14 at 11:48 am
RBC says 650,000 new immigrants a year.
http://www.newswire.ca/en/story/1343543/royal-bank-making-it-easier-for-newcomers-to-settle-in-canada

RBC is a bank – with bad copywriters. Immigration this year will total 250,000 (0.8% of the population), consistent with the last five years. — Garth

Me – why is RBC getting away with this big number lie ( obviously aimed at scarring locals into buying RE ) ????

#226 Macrath on 04.24.14 at 7:04 pm

Besides, it’s the bond market, not the BoC, you should watch. — Garth
———————————————————
“The Fed runs everything; it has pegged, manipulated, medicated and manhandled the entire financial system. There is not an honest interest rate left from the overnight rate to the 30 year ”
“The markets today jump to the tune of the minutes of the Fed meetings, of daily word clouds that are emitted by various Fed speakers. This really isn’t a capitalist financial market. It is entirely a ‘hothouse’ system driven by a rogue central bank that has totally usurped the role of capital and money markets.”
– David Stockman

Could you be a little more specific on exactly what we should be watching ?

#227 general observer on 04.24.14 at 7:19 pm

#175 Suede on 04.24.14 at 12:48 pm
#129 Dean Mason

You better not hope for a 60 cent CAD unless you want all Canadian hockey teams except maybe Toronto and Montreal to skip the country.

Me – their salaries are in USD you dolt.

#228 Future Expatriate on 04.25.14 at 10:12 am

Hey, at least that second listing isn’t a collapsing 1895 semi with five generations of no permit “up yours” renos for resale.

“oh, but the character”….