Enough about the snooty people in Toronto and Vancouver, with their Lambos and Land Rovers. What’s happening in the real world?
Not much, as it turns out. Most Timmy-swilling citizens in other parts of this nation seem to have already decided only idiots would be buying real estate at historic highs. There’s a dramatic and growing gulf between the fairytale stats being turned out by local boards in Calgary or the GTA, and reality on the ground in many other cities. As Capital Economics wizard David Madani said the other day (in predicting a 25% price decline), the rot begins at the edges.
Examples abound. Here’s Kingston, for example, a robust university city in Ontario full of restored stone buildings and buckets of culture. House sales last month were down almost 6% from a year ago, which included a 6.1% drop for SFHs and a 19% plop for semis. For all of 2014 so far, fewer than 2,000 properties have changed hands, 6.6% under a lacklustre 2013 performance.
Prices? Also dropping, off about 4% so far.
Down the 401 and across the line, Montreal is the second-largest market in Canada, with four million people (that equals everyone who lives in Alberta). Pas de realtor joy there, either. It now takes an average of 113 days to sell a condo and 91 days for a detached home, and sales are on the slide. In April another 9% drop, for the fifth consecutive month of declines.
“Given the increase in the number of listings and the decrease in the number of sales in recent months, buyers are regaining bargaining power,” says realtor boss Diane Ménard, “particularly if they’re shopping for a condominium, as market conditions clearly favour buyers in most areas.”
For Quebec as a whole (more people live there than BC and Alberta combined), sales have fallen in six of the last seven quarters, and are running 2% below this time last year. Meanwhile things are no better in Halifax, the biggest market in Atlantic Canada. Listings have started to balloon and realtors report a drop in activity of at least 30%. Sales in Halifax are running 12% below last year’s levels, and prices have declined 3%.
In Winnipeg (population 730,000, the 7th-largest city), sales are down 2% and listings have swollen by 11%. Last month there were a lonely five sales of properties listed over $750,000 and zero above $1 million. Year-to-date sales are running 4% below the 10-year average.
Sales are down 6.7% in Lethbridge. In Regina, April was the first month of the year when sales passed 2013 levels. But houses are getting cheaper. “Residential property values have actually declined in Regina over the past year – the decrease is evident in all housing types,” says the local board in its official release.
Outside Toronto, in horsey Caledon, it’s not uncommon for listings to sit now for an entire year. In Muskoka, realtors report sales of cottages are running 18% below 2013 levels.
Hmm. See what I mean? For millions of Canadians in cities and towns across the country, some kind of real estate correction is already taking place – despite the fact mortgage rates have declined and the mainstream media continues to pump sunshine up the orifices of an entire population. Even the Globe and Mail has apparently succumbed, mandating that a reporter turn out real estate porn daily, whether it’s news or not. “Sales of high-end real estate soaring”, shouted the latest effort, citing “affluent buyers regaining their confidence.”
“A number of markets across the country are seeing a strong pickup in the number of high-end homes that are selling,” reports the Globe. “Real estate industry players say they think it’s because people are less worried about the housing market’s future.” The sources for this story? A real estate marketing company (Sotheby’s Realty of Canada) and a real estate agent with a $28 million listing (Barry Cohen). Duh.
And apparently Mr. Cohen has his fingers on the pulse of the market. It’s all so simple. “You’ve got low interest rates feeding the lower end of the market, and those sellers become the next buyers for luxury.” There ya go. One day you’re closing on a one-bedoom, 450-foot shoebox overlooking fumes on the Gardiner and the next day you’re moving into $1.8 million digs in Moore Park. Bingada-bangada-boom.
Well, let’s face it. The economy is weak. Incomes are stagnant. Jobs are scarce. Debt’s huge. There’s no credible information.
Apparently they’ve figured this out in most places. And we can’t all be right.
215 comments ↓
Oh but it’s painful to be contrary.
SilverMeridian Greater Ottawa surReal Estate Update
I am constantly looking for new sources of information regarding RE situation in Ottawa. As you may know, sources of that information are very scarce, highly biased and very often turn out to be no more than another infomercial. While I was listening to 580 CFRA, I came across Open House – The Real Estate & Mortgage Show, which I found somewhat interesting. The last weekend’s show (it runs once a week on Saturday morning) was hosted by Steve Gregory who was interviewing show’s regular guest, realtor Paul Rushforth. If you interested, you can listen the entire show by clicking on the following link:
http://proxy.autopod.ca/podcasts/chum/13/22298/Open.House.140517.mp3
I took a liberty to transcribe the first few minutes of the show because they are, in my opinion, describe very accurately current situation on the Ottawa RE market:
“Steve: Good selling weather?
Paul: Great selling weather! Markets are booming, there’s lots of homes on the market and there is lots of homes selling too.
Steve: So they are moving.
Paul: They are moving, they’ve always have been moving, but there’s just a lot of homes on the market too. Buyers have lots of selection right now, lots. You know, you do comparables in the area, we used to have 3, 4 or 5 comparables in certain areas, now there is 15 -20. So, there is a lot, a lot of selection out there. There’s never been a time, ever, when the RE market is this listing’s heavy.
Steve: So it is a buyers market.
Paul: Well, we teetering towards a buyers market.
Steve: How can we be teetering towards buyers market? I’ve never seen so many listings.
Paul: Well… because things are still selling, and when they are selling, you know, we are in the balanced market teetering to a buyers market, but we are nowhere buyers market right now, nowhere near.
Steve: No kidding. Remember couple years ago? How many listings been out there when people were actually getting more for their homes?
Paul: There were probably have been about six or seven thousand, may be six thousand, where is now we just 5 listings shy of 9500. And Frank actually said that by the end of May he predicts 10 000 homes on the market. I though he was crazy, but he may not be wrong.
Steve: That would be the first time we have approached that (number), I guess.
Paul: Yea, this is the first time we ever this high.”
So, there you go, inventory is sky high, but we are nowhere near buyer’s market because “things are selling”. I understand Paul’s position, he is a sales person, he needs to move houses, he doesn’t want to spook potential customers, but at the same time, how high does inventory have to go for realtors to admit that some regions of the country are in the buyer’s market now?
http://creastats.crea.ca/otta/images/otta_chart03_lo-res.png
It’s coming. Get ready for a reality.
Excellent advice as always Garth.
Flogging your blog to as many as possible, lots of thickness out there.
Parental pressure is very real sadly.
Hope your wheel is well.
Garth – attaboy for mentioning Montreal! You won’t see the slide in Vancouver first. It’ll happen on the periphery and work it’s way back in. This is what happened in the UK. So watch the edges more than you watch the epicentre of debt lunacy to get ahead of the game.
bigarider can you translate: Bingada-bangada-boom ?
I watched Bob Rennie’s most recent UDI AGM presentation, and the stats and figures he has for vancouver are pretty impressive, I encourage all the vancouver Real estate bears to watch it to get some bullish perspective he makes a lot of good points! Garth if you are looking for stats to dispel HAM he has some you might like in there!
By the time the recession makes its way to cities like Vancouver or Toronto, the recession is over. Use Zillow to see what happened in New York compared with other american cities.
Denial is a drug. — Garth
Garth, you yourself have said many times that all real estate is local. You cite the weakness in all parts of the country you mention as proof that there is a “rot” from the outside in.
Is it not possible that what is happening negatively towards prices and sales in all the other parts of the country you mention do not matter to the GTA and Vancouver?
After all, all real estate is local
Isn’t Bingada-bangada-boom racist towards Canadians of Italian decent?
Italians are a race? — Garth
@ #2 SilverMeridian on 05.23.14 at 8:16 pm
SilverMeridian Greater Ottawa surReal Estate Update
I am constantly looking for new sources of information regarding RE situation in Ottawa. As you may know, sources of that information are very scarce, highly biased and very often turn out to be no more than another infomercial. While I was listening to 580 CFRA, I came across Open House – The Real Estate & Mortgage Show, which I found somewhat interesting. The last weekend’s show (it runs once a week on Saturday morning) was hosted by Steve Gregory who was interviewing show’s regular guest, realtor Paul Rushforth. If you interested, you can listen the entire show by clicking on the following link:
http://proxy.autopod.ca/podcasts/chum/13/22298/Open.House.140517.mp3
I took a liberty to transcribe the first few minutes of the show because they are, in my opinion, describe very accurately current situation on the Ottawa RE market:
“Steve: Good selling weather?
Paul: Great selling weather! Markets are booming, there’s lots of homes on the market and there is lots of homes selling too.
Steve: So they are moving.
Paul: They are moving, they’ve always have been moving, but there’s just a lot of homes on the market too. Buyers have lots of selection right now, lots. You know, you do comparables in the area, we used to have 3, 4 or 5 comparables in certain areas, now there is 15 -20. So, there is a lot, a lot of selection out there. There’s never been a time, ever, when the RE market is this listing’s heavy.
Steve: So it is a buyers market.
Paul: Well, we teetering towards a buyers market.
Steve: How can we be teetering towards buyers market? I’ve never seen so many listings.
Paul: Well… because things are still selling, and when they are selling, you know, we are in the balanced market teetering to a buyers market, but we are nowhere buyers market right now, nowhere near.
Steve: No kidding. Remember couple years ago? How many listings been out there when people were actually getting more for their homes?
Paul: There were probably have been about six or seven thousand, may be six thousand, where is now we just 5 listings shy of 9500. And Frank actually said that by the end of May he predicts 10 000 homes on the market. I though he was crazy, but he may not be wrong.
Steve: That would be the first time we have approached that (number), I guess.
Paul: Yea, this is the first time we ever this high.”
So, there you go, inventory is sky high, but we are nowhere near buyer’s market because “things are selling”. I understand Paul’s position, he is a sales person, he needs to move houses, he doesn’t want to spook potential customers, but at the same time, how high does inventory have to go for realtors to admit that some regions of the country are in the buyer’s market now?
http://creastats.crea.ca/otta/images/otta_chart03_lo-res.png
_________________________________
If you want to write that much, go and start your own blog. Don’t hijack Garth’s blog. When I see a long post like yours my finger just continues to SCROLL past at a fair lick.
#2 SilverMeridian on 05.23.14 at 8:16 pm
My realtor buddy sent me 3 POS listing a couple of nights ago and all of them have been sitting since the winter with one reduced from $460,000 down to $369,000.
To let you know what a small town we live in, I know the flamed out former owner of that property by shear coincidence.
All of the properties come with terrible realtor photos and lengthy as-is /where-is disclaimers which seem to scare off the amateurs.
#6 Turnernation
I transalata for you turneranation, dis bingada bangada -boom.
It meansa da real estata prices she’sa still gonna go uppa Uppa UPPA ina da GTA !
OH !!
Sweet Ride
It is not a buyers market, contrary to what the realturds are saying. It will be a buyers market when prices are back to 2003 levels. Give it a bit more time.
GARTH’S QUOTE: “Jobs are scarce.”
Sorry but I just read that there is now a labor shortage and workers of all types are hard to find.
Other people are saying that there is no shortage of jobs if you look hard enough, with high pay and good benefits.
So please tell me; what do others see in their parts of the world, what is the job market like where YOU LIVE?
Bc is going to be alright . The western investor has head lines like , China discouvers Sunshine Coast and Uplift in the Okanagan . What could possibly go wrong ?
OK lets hypothesize on today’s Gartho .
So Toronto and Vancouver prices are uppity, and the rest of Canada heading south.
Hum let me think….Bingada-bangada-boom.
It hits me in the head like a teachers apple.
More tree hugging schooled in Toronto and Vancouver than anywhere else.
The truly smart ones are feeding the market.
Lets face it, an obedience certificate
hanging in a rental makes you look like such a shit loser.
You’re the privileged, The up and coming…You’re The soft spoken, the civilized, the cultured.
You will do anything to have that expensive piece of shit hanging on a wall that you can proudly say you own.
Mon and Dad will be so proud…You’re Professors smiling.
You’ve made it…….
The Herd is all I’m saying.
#10 Spiltbongwater -” Bingada Bangada boom racist towards Canadians of Italian decent.
Those words sound Phillipino to me…LOL , as a Canadian of Italian decent.
The Toronto market has been in decline for a year, peaking with the “F” CMHC changes of the 2013 Budget only masked by a shifting sales mix. Various trollish Realtors and RE boards selectively release statistics in a rather lame effort to mislead, but thankfully many can see through that.
Yes Realtors may be transacting in more expensive houses, but when the sales mix has shifted as significantly as it has, those individual houses may not have gone up. In fact, the Teranet data is now weakening, and Teranet data tends to lag price declines quite significantly due to the nature of the methodology used to derive it (linear extrapolation of price changes!).
“So please tell me; what do others see in their parts of the world, what is the job market like where YOU LIVE?”
Terrible where I live for professionals, but if you like cleaning toilets or wiping the bums of seniors, there’s more work than one can shake a stick at.
“So Toronto and Vancouver prices are uppity, and the rest of Canada heading south.”
Not really. What is being seen in YYZ and YVR is a significant change in the sales mix, because there is a dramatic difference between high-end and low-end not seen in any other Canadian city. High end is still moving, low-end is not because the low-end buyers can’t access CMHC subprime mortgage insurance like they used to be able to.
In all seriousness, I think # 9 ” Italians love real estate” comment deserves a response from you Garth.
After all, the argument you present tonight about the weakness in other parts of the country flies in the face of your previous statements about ” all real estate being local “
“It is not a buyers market, contrary to what the realturds are saying. It will be a buyers market when prices are back to 2003 levels. Give it a bit more time.”
Amen. I always wonder what sort of intoxicant the Realtors are smoking when they claim that the market is ‘balanced’ or a ‘buyers’ market with prices so elevated beyond historic norms. Maybe they could make a business selling it now that RE prices are going down and activity is drying up.
#HillBillySwillers
“Most Timmy-swilling citizens in other parts of this nation…” – HonGT
As if three weren’t enough… Personally, I blame the high Fructose Corn Syrup lobby.
[BC LocalNews] – Despite opposition Penticton supports 4th Tim Hortons/gas bar development
http://www.bclocalnews.com/news/260341861.html?mobile=true
[NoteToGT: Seriously, how many cops can there be in Penticton? Perhaps it’s a [Redacted]™ thang?]
I am not denying anything
You are right, the edge will die first but don’t expect prices in To do go down too much.
Here you are in denial by not admitting that the pressure in Toronto and Vancouver is big due to low inventory.
I would be interested to know what percentage of Globe & Mails’ (et all) advertisement rates are real estate related? Advertising rates are plummeting for newspapers, not a great deal of willingness from editors to piss off major advertisers.
Canada does not have a robust enough media, in the G8 only Italy has more concentrated media ownership. Not much impetus for a newspaper to go rogue and scare away ad revenue, here we are on a blog to find the real analysis.
So it must be true what the Toronto street flippers saying…
They do last deals now and going for a vacation…
Just listen the talks of flippers in Tim Hortons….they are loud..together with RE agents….
Very laughable…
Edmonton spec homes are waiting this spring time…just look up at internet
Plently of unpaid internships for women in Canada, actual professional jobs not so much when you can get it for free. Even the McJobs are given to TFW because of lower wages.
#Yikes! #[Redacted]™DonutPusher.
http://youtu.be/tw2JTrBF56M
“You are right, the edge will die first but don’t expect prices in To do go down too much.”
Prices are already going down in Toronto, and Toronto wasn’t spared in the 1990s by the RE downturn either. In fact, with the huge concentration of debt in Toronto RE, even more significant downturns are likely. At least the ‘burbs are more economically competitive in many cases, with less indebted inhabitants relatively speaking.
RE Sales Representatives rarely know what the market is actually doing, especially the trolls who come on this site, and there are a lot of them. They just read the stats from the local RE Board. Just ask an agent to really explain those lovely colourful charts and stats to you. Ask them to explain the HPI. I guarantee you they will mumble and trail off about “average prices in your area” and something like it’s similar the CPI. But to be fair most agents don’t know how to sell people on buying RE, their prospective clients have already decided, been convinced by their parents, friends, the media, their local bank. At least that’s how it’s been the last few years.
Back to those air head airline workers chirping me about the cost of a flight to Vegas, saying 1000 bucks a head is cost, and I said it’s 80 bucks.
So I call up my casino host and yes I was wrong, it’s 80 bucks a leg. so 160 bucks return.
Al right of I’m going to verbally rip of some one head and shit down their neck in an open debate I need my facts straight.
Off to UOG I go.
Used the new Cseires specs for my calculations.
One way leg cost
150 Passengers
2.88 per gallon for Jet fuel
2000 NM Miles
.081 NM per Gallon
=
31.10 Total Fuel Per Seat
27.78 per seat to lease the plane doing two trips a day
6.67 Pilots Per seat
5.33 Flight attendants per seat
3.33 Other support staff per seat
6.67 Other fees, including maintanence per seat
6.67 Marketing per seat.
Total cost per head on one leg 87.55
Or about 160 per head….
Can you dogs see it.
SMOKING MAN AIR…
2 Direct non stop flights form Niagara Falls NY to Live Vegas.
480 Return……….BYOB and Pretzals.
Flight attendants, dressed as Chippendale for the ladies and Las Vegas show girls.
I can see it……
That “crazy” lady that was on Russia Today a while ago, calling for a 90% crash in the Canadian real estate market probably wasn’t that far off.
Yes, yes, I know, there is no such thing as a Canadian real estate market, there are only local separate markets guarded by crocodile infested moats. Surely those special markets have their own separate guarded national anthems as well. Pfff……….
Mtl’s real estate has been in decline since the Quiet Revolution, Garth… I wouldn’t include it in any assessment of the Cdn real estate market or the Cdn ecn.
Sure. Nine million people. Statistical error. — Garth
#21 Mark on 05.23.14 at 8:46 pm
“So please tell me; what do others see in their parts of the world, what is the job market like where YOU LIVE?”
Terrible where I live for professionals, but if you like cleaning toilets or wiping the bums of seniors, there’s more work than one can shake a stick at.
—–
The real question is, if there’s tons of toilet-cleaning/bum-wiping vacant jobs, are the wages offered rising to reach demand-supply equilibrium? Or are TFWs or foreign labour being brought in to fill the spots and keep wages down? Or lots of toilets and bums being left dirty?
Look at Kijiji …it will shows how many houses are for sale…right now in GTA —–Tons……
Maybe that’s the real statistics…
“the mainstream media continues to pump sunshine up the orifices of an entire population”
Well, sunshine is better than the eventual (for most) alternative. Having non-disastrous finances, hopefully I can keep the sunshine feeling going for a while, even after TSHTF.
So much for deflation…
http://www.bnn.ca/News/2014/5/23/Enery-prices-help-boost-April-inflation-to-2-target.aspx
Look at core CPI. — Garth
This is a beautiful scenario with the average Canadian consumer tapped out, beholden to the bank and therefore bank shareholder. It’s good for the shareholder, good for renters and good for the environment, as Canadian homeoweners can no longer afford retail purchases. What more can one ask for?
#2 – thanks SilverMeridian!
I hope you will be right (and I know you will be right). With five university degrees between us, millenial-gen X couple, making 185,000 combined, apparently we can only afford a 425,000.00 place according to RBC affordability calculator. Living in downtown ottawa that would get you a condo or a shite house of a semi. We aren’t interested in saddling up with such a mortgage, but we wonder: who are buying these 500,000 plus places? #propertybubble
According to Statistics Canada the M3 money supply in Canada rose by 8.9% in the one year period between the end of April 2013 and the end of April 2014.
http://www.statcan.gc.ca/tables-tableaux/sum-som/l01/cst01/indi02a-eng.htm
“The real question is, if there’s tons of toilet-cleaning/bum-wiping vacant jobs, are the wages offered rising to reach demand-supply equilibrium? Or are TFWs or foreign labour being brought in to fill the spots and keep wages down? Or lots of toilets and bums being left dirty?”
Yeah lots of TFWs being brought in. Wages are only rising to the point where the domestic workers that are still doing those jobs don’t start to riot.
Today I met a fellow from Langley.
He was talking about the ridicous housing prices in Vancouver.
I told him that it was unfortunate having to go into such huge debt to buy a home and stated that I don’t know how our kids are ever going to able to enter the market.
He told me that last week a young Asian kid drove up to his job site in a new Ferrari and his boss told him that the youngman owned the complex they were building thanks to Dad who lives in China.
Used the new Cseires specs for my calculations.
Well nobody actually flys the C-Series, and your numbers are way off the mark. Additionally, you’re assuming a full airplane. You’re assuming that the plane takes off and lands on-time and has no diversion. Your lease rates are right out of whack and do not consider the cost of capital required to even obtain such a lease. You don’t include airport rents.
An internal AC newsletter indicated that, for the A320, the most popular airplane in their fleet, at $75/barrel oil, a ~2000 mile run from Montreal to Vancouver was costing $80-$90 in fuel alone. Fuel is typically 1/3rd of the airplane’s overall operating cost, so figure around $270 for such a flight (YUL-YVR in the 2000 mile range, give or take!) before the airline even earns a dime of profit. $90 per leg, not even close!!!
“There ya go…….”
People actually think this way. It’s amazing.
“He told me that last week a young Asian kid drove up to his job site in a new Ferrari and his boss told him that the youngman owned the complex they were building thanks to Dad who lives in China.”
Sure, there’s a few of those. Just like there’s probably a few Canadian kids who do the same overseas where Canadians invest. But there simply are not enough of these cases to make any meaningful impact on the housing market. And remember that old saying about a fool and his money are easily separated — seems apt here building into the Vancouver bubble.
Almost four out of 10 Canadians who don’t have a job have completely given up hope of ever finding one, a new survey suggests.
http://www.cbc.ca/news/business/39-of-unemployed-have-given-up-job-search-poll-suggests-1.2652239
Yes, yes, I know, there is no such thing as a Canadian real estate market, there are only local separate markets guarded by crocodile infested moats. Surely those special markets have their own separate guarded national anthems as well. Pfff……….
The Canadian RE market is a lot more monolithic than the Realtors may think, as nearly all of the lenders and the lending standards are set on a national basis, especially with the CMHC as the nation’s most prolific subprime mortgage guarantor. Evidence is significant that RE prices are falling on a nationwide basis, although there is some masking in some of the major cities due to a fairly significant change in the sales mix.
“So please tell me; what do others see in their parts of the world, what is the job market like where YOU LIVE?”
Well, in Calgary, I now know more than a couple of formerly employed oil-patch professionals. And, a few recently laid-off people who are now struggling to start their own “executive training” or “consulting” businesses.
But, if you can swing a hammer, push a lawnmower or service a BMW, you are probably doing quite well – for now.
The oil-patch isn’t doing that hot, but housing is (with all of the people migrating here looking for work). Things will turn around sometime in the next year or two when people realize that the “root money” is no longer being generated in such great quantities.
Sweet Rent vs Buy graphics and chart for the basement dwellers here.
http://www.nytimes.com/interactive/2014/upshot/buy-rent-calculator.html?smid=fb-share&_r=1
Also throwing out a #RY to all the RBC owners out there!
Do you think the geese care about house prices? They come here for the summer, procreate, eat grass, raise their babies and go back to Florida for the winter. What the hell is wrong with people? Is getting other people to work for them all they care about? Are we all slave owner wannabees? Smoking Man, do you have the answer to life’s questions?
Stay out of the RE market! Find something else to occupy your time and discussions. You have slowly but surely given into the hype of the trickle down of RE news for years.
Kingston’s job market is in bad shape. Hearing lots of twenty somethings who swore they’d never leave the area reluctantly admitting they’re going to have to – no work here. The press may brag about well attended job fairs but the employers there are mainly taking resumes for “potential openings in the future”, if the work is local.
The drop in housing prices & longer DOM are increasingly visible. Interestingly, rentals are beginning to get soft as well. Our vacancy rate, traditionally very low is increasing & that’s measured on a yearly basis.
My youngest in Halifax is still in shock. He was renting a place downtown with friends – expensive. 3 of his room mates have left town looking for work & the other is leaving in a few weeks. My son scored a rental in a brand new build just north of Bedford – 7th floor, overlooking the Basin. 1200 sq. ft. 1 bedroom, 1.5 bathrooms – modern everything. Utilities included, a year free cable & net for $650/month! He tells me many in his peer group are leaving town – little meaningful work to be found. His GF finishes her degree next year & I’m pushing them to get out of Dodge. His job is a constant struggle to stay ahead of layoffs & his gf already knows she won’t be able to get work in the province in her field.
#7 Millennial-Falcon on 05.23.14 at 8:30 pm
I watched Bob Rennie’s most recent UDI AGM presentation, and the stats and figures he has for vancouver are pretty impressive, I encourage all the vancouver Real estate bears to watch it to get some bullish perspective he makes a lot of good points! Garth if you are looking for stats to dispel HAM he has some you might like in there!
——————-
Silly me. I thought it’s RE people who are pushing the HAM angle.
Buy now before HAM drives up the prices.
“Also throwing out a #RY to all the RBC owners out there!”
Yeah RY closing in on 10X GAAP earnings with the recent earnings beat. Canadian residential RE is at around 35X earnings when you calculate it in the same way one would a stock. Yet lemmings still “feel” that its best to lever up and buy houses instead of stocks.
#8 test on 05.23.14 at 8:32 pm
By the time the recession makes its way to cities like Vancouver or Toronto, the recession is over. Use Zillow to see what happened in New York compared with other american cities.
Denial is a drug. — Garth
———————–
There’s anger, denial and then acceptance.
So you’ve got a spare $15 Million lying around and you’re wondering what to do with it ….
http://www.vancitybuzz.com/2014/05/61st-floor-shangri-la-hotel-vancouver-penthouse-sale-photos/
Its might look move-in ready, but you know millions more will be spent on renos and new furnishings.
Not the most expensive penthouse in Vancouver, and it might show up on vancouverpricedrop at a reduced price next year.
#43 CPG on 05.23.14 at 9:51 pm
According to Statistics Canada the M3 money supply in Canada rose by 8.9% in the one year period between the end of April 2013 and the end of April 2014.
———————
Agreed, I noticed a substantial increase in M3 BMW’s in Richmond, too.
#48 Mark on 05.23.14 at 9:59 pm
“He told me that last week a young Asian kid drove up to his job site in a new Ferrari and his boss told him that the youngman owned the complex they were building thanks to Dad who lives in China.”
Sure, there’s a few of those. Just like there’s probably a few Canadian kids who do the same overseas where Canadians invest.
———-
Thanks Mark for the sarcasm.
Financial Post: “Canadian inflation hits Bank of Canada 2% target in April for first time in two years”
If it goes above 2%, the BoC should theoretically increase rates. Would they? If it doesn’t breach 2%, at least it prevents the BoC from cutting rates again and push house prices even higher.
So thank you energy prices. Not only for pushing the inflation metric up, but for my $XEG and $ZEO ETFs.
Nice car. Are those Sask plates?
#53 Renter’s Revenge! on 05.23.14 at 10:09 pm
Do you think the geese care about house prices? They come here for the summer, procreate, eat grass, raise their babies and go back to Florida for the winter. What the hell is wrong with people? Is getting other people to work for them all they care about? Are we all slave owner wannabees? Smoking Man, do you have the answer to life’s questions?
………………………………………………..
I do…..
Give no shit, enjoy life to it’s fullest. You’re not above ground long. Try an find a way to de-program your mind.
Enjoy watching others focused on chasing carrots into a wall. and talk about it.
Take risks, enjoy the high of winning, and learn from and don’t get down when losing.
In the end we are all worm food. Spelling not that important in the grand schema of things.
Fornicate as often as you can, cause when that dies, you die…
Not complicated at all.
There’s a dramatic and growing gulf between the fairytale stats being turned out by local boards in Calgary or the GTA, and reality on the ground in many other cities.
where I live (Hunt Club, Ottawa) listings are piling up
Silver Meridian : I took a liberty to transcribe the first few minutes of the show because they are, in my opinion, describe very accurately current situation on the Ottawa RE market:
thank you, they filter their thoughts but you get the idea. Unlike politicians. I mean politicians running for election in Ontario.
test : Use Zillow to see what happened in New York compared with other american cities.
New York dropped 20% compared to the national average of 33%
http://www.nytimes.com/interactive/2014/01/23/business/case-shiller-slider.html?ref=business&_r=0
bigrider : It meansa da real estata prices she’sa still gonna go uppa Uppa UPPA ina da GTA !
it means “watch out!”. I’m not kidding. He’s my Italian story
http://www.greaterfool.ca/2013/03/19/what-f-knows/#comment-230535
Smoking Man : You’re the privileged, The up and coming…You’re The soft spoken, the civilized, the cultured.
not just literate, aptly descriptive, succinct
http://www.merriam-webster.com/dictionary/succinct
#49 CPG – there is opportunity if 39% have given up looking, so be creative. An example: I have found several jobs for people in the hotel business that wants employment in the main kitchen. They send out resumes to the hotel personnel office – all wrong, as the head chef does all food purchases and hiring. The best time to meet him or her is at 3:00 PM, and just walk in with a resume in hand for an instant interview. They appreciate a candidate who makes it easy, and with this method several have been hired on the spot.
#18 Smoking Man
Buddy, I can totally feel your hurt and pain coming through. Let it go, release it, that’s what I am learning up here in rehab.
Your whimpering, insecurity and desire for some, any, positive strokes comes through so clearly in what you write here, so often. Are you crying as you write? I am learning to cry a little myself, good for both of us.
A teacher threw an apple at you? Now it is all making a lot more sense to me. That, plus maybe that time you made a cat out of plasticine and the teacher told you it looked like a space alien. These things are so totally crushing for people like you and me too, we spend a lifetime trying to recover and blame everyone else but ourselves. You blame anyone who graduated high school, I blame the pathological liars at the Toronto Star. But it’s the same game we are playing on ourselves, don’t you see, man?
You are a delicate creature, with tender feelings of low self-esteem bubbling underneath. I know it brother, am learning the same about myself. You’ve gotta forgive your grade two teacher man, and move on.
You totally need to check in here with me. I would love to do a trust fall on top of you to show how much I care, and give you a big hug.
You are a very delicate creature, Smoking Man. I see that now. Those teacher-weachers hurt your feelings and you still feel the pain. Embrace your pain and childhood humiliation, and join me on the journey of transformation.
Sunday we’re off on free time. Pub crawl!!!
Smoking Man welcome home from Las Vegas we have a room for you this weekend at Seneca Casino. I’ll be serving you at the bar. See you Saturday afternoon!
Here in Vancity where the bubble has encapsulated the herd who all are so brainwashed into believing prices will keep rising, it’s starting to wear thin and people are looking outside the thin frail bubble, renting is the new trend my friends
Home prices to rise due to slower new home build …
http://www.cbc.ca/news/business/house-prices-to-increase-as-new-home-builds-slow-cmhc-says-1.2651009
Smoking man im dissapointed, but i read between the lines. the cost of the flight per head based on what you displayed doesn’t take into account all the incidental costs of running a corp. the flight may make money but the company sucks out money and ends up with low and or negative margins. Its why canada and austrailia and many other countries cant make a profit in airlines. There is too much competition, so they cut prices to compete but in the end they dont make money because as you say they dont differentiate with chippendales. You my friend may be able to make money virgin makes the customer think they are geting value from some tits and nice pillows, it works, differentiate and maybe an airline can win. You just taught mba 101 in a hard to understand post. Sorry this is from my phone excuse the typos but smoking man is actually right on this one and there is plenty of studies to prove it.
#51 job market
I live in vancouver and i am trying to hire an electrical engineer it is very difficult they just are not available if they have any chops. A mechanical we hired 3 months ago and relocated to vancouver already put in his notice he is moving to cupertino to work for apple at more than twice what he was earning with us. Buying talent is e pensive and companies like apple and tesla are taking the good ones.its it is not as bad as when nortel said they would hire every engineer graduating i n canada but it is tough. Job market for engineers right now is not bad at all more so if you are willing to relocate.
The fact is sales are crashing hard in the GTA as realtors INFLATE sales for the month and then compare REVISED sales from the year before. The word is already out that sales numbers and prices from realtors are pure BUNK and every realtor posting here knows it. If the market was so good realtors why are so many of you out of work realtors posting here? No sales and NO MONEY for you realtors. :) you are financially hurting and we all know it. :)
Mark re Joe2.0
I grew up in West Van which now resembles a town in Iran with a large amount of Chinese and Japanese also.
Many parts of N Van are the same, Lonsdale businesses are now mostly Iranian.
Edgemont Village is now being bought up by the Chinese, Japanese and Iranians.
This is the scenario playing out all over Vancouver and it’s suburbs.
The demographics of Vancouver are rapidly changing.
To keep hearing that HAM or immigrants aren’t relevant is ridiculous just look around.
@#11 Josef on 05.23.14 at 8:33 pm
@ #2 SilverMeridian on 05.23.14 at 8:16 pm
”If you want to write that much, go and start your own blog. Don’t hijack Garth’s blog. When I see a long post like yours my finger just continues to SCROLL past at a fair lick.”
I am so sorry that my long posts with analysis of Ottawa RE market had caused you so much inconvenience Josef, but is it not Real Estate blog? I was wondering what kind sophisticated intellectual activity my boring posts distract you from and this is what I have found:
“#15 Josef on 05.08.14 at 6:11 pm
#11 Josef on 05.08.14 at 5:34 pm
Wow! Early today.
First!!! Oh YEAH BABY!!! YEAH!!!
Josef is awesome!!!
-———————————
Looks like Josef was DOUBLE FIRST today!!!”
Now I see what the problem is, but I don’t think I can squeeze all I have to say into four brilliant sentences, just like you managed to do it. Have a nice weekend!
when we get back to 2002 prices with 5% interest rates it will be a safe time to buy but until then……
God damn where are the towels, time for a shower.
I post a love post honoring wife.
On Facebook. She says only do that when your sober. Delete it.
Fk I can’t find the delete button..
I’m in the dog house again.
The room is spining, but the ceiling fan is stalled, I’m sure it’s on full speed.
Life is complicated, give no shit is my religion.
#33 Smoking Man Air
Fuel surcharges.
Older airplanes burn an average $20/seat per hour. Some of the newer ones are more efficient and burn $15/seat per hour. (Assuming the plane is full)
So ALL the fuel you burn on a 5 hour flight is $100. Yet, because fuel has spiked a bit, the consumer/passenger/guest is told they have to pay $300 to offset the increase.
Umm, that is 3 times the TOTAL fuel burned.
Then there is the tax.
What is reasonable? 5%? 10%? 15%?
How is it remotely reasonable to charge $300+ tax on a $99 fare to Florida.
Would anyone buy a $99 printer at Staples if the tax on the printer was $300+.
I doubt it.
After being an unemployed as a Journeyman Telecommunications Electrician for over a year now… I might have a telecom job for $20 a hour.
$20 friggen dollars an hour… can you believe that!
My 18 year old son is making $14 an hour as a bus boy.
I was making $50 U.S. an hour in Dallas for AT&T where it cost me absolute dick to live.
Oh Canada
Please let me know why my previous post was deleted.
Where I stated fuel costs were $15-$20 per hour per seat. But due to the increase in fuel prices the airlines have added a fuel surcharge.
However, the fuel surcharge of $300 is not for the INCREASED price of fuel…
The $300 exceeds ALL the fuel burned.
(If you prefer, please add my first post to your blog, and delete this)
Not deleted. — Garth
Late post for the day… think about this Garth:
Step 1) Tell everyone things are great
Step 2) Seek advice from rep. source just before crash
Step 3) See, we did all we could. “Trust us” -Mr.Realtor.ca
Don’t be “that guy”.
DELETED
#155 TheCatFoodLady on 05.23.14 at 11:49 am
Now, I’m puzzled about one thing. Why would foreign investors be willing to sink a ton of money into block buying condo units they’re leaving empty or renting at a loss? Property not lived in/looked after depreciates… in most markets. I’ll admit I know squat about foreign money rules but I can’t fathom the advantage for HAM, especially if places sit empty & deteriorate.
=====================================
First of all you have to imagine being rich enough that you are more worried about losing the money you have than about making more. Secondly you have to come from a culture where wealth is land.
For most of history land held the place that bonds are supposed to today. The capital value was preserved while yielding an annual bounty of food or a dividend of forest or mineral production. At the beginning of the Industrial Revolution, almost all wealth in society was land supplemented by a small amount of capital goods such as merchant ships and of course some precious metals. In today’s industrialized economies land is a small percentage of total wealth completely eclipsed by financial products like stocks and bonds. However financialized economies are a new invention and in many parts of the world, such as Asia, land is still the prime investment.
Wealthy Arabs and Russians have purchased enormous mansions in the heart of London that are neglected to the point that roofs cave in. Tan Yu, the Philippine billionaire, purchased Fantasy Gardens in suburban Vancouver and closed its quite functional business operations down for years while he decided what to do with the site. Writers have correctly described these purchases as equivalent to gold bars in a vault. The underlying land is simply a form of cash. The value-in-use of the buildings is inconsequential.
The rich really do think differently. One classic example concerned the German prince who was assessed by Revenue Canada for a real estate gain on BC property in the fifties. In those years before capital gains became taxable in Canada, if you sold land which you had held primarily to produce an income from it, any realized gain in land value wasn’t taxable. If you bought the land as speculative inventory with the primary intention to sell it at a profit, the whole gain was taxable as ordinary business income.
The prince had a large tract of raw land on Vancouver Island some of which was appropriated to build a highway. Revenue Canada claimed that the gain on the appropriated portion was taxable business income despite the fact that the Prince had not intended to sell it. They based their case on the fact that the land yielded no income and so must have been bought for speculation. The prince showed the court that his family had been buying land for 400 years and never sold it. He won.
Garth,
in Edmonton, it’s different here.
Asking prices are much less than the big smoke. Ours are about 3.5 times income, the world average is 5 times income. TO is about 9 times income?
The only thing that could bury the Edmonton market is a crisis from China and $50 oil. Not going to happen.
The Chinese municipalities are now allowed to sell ten year muni bonds, sending their current crisis that far down the road.
in another two years, you’ll see broke hipsters in downtown TO, and 100K added to Alberta RE prices.
#44 Mark on 05.23.14 at 9:52 pm
Yeah lots of TFWs being brought in. Wages are only rising to the point where the domestic workers that are still doing those jobs don’t start to riot.
===============
Too late. It’s already starting
“McDonald’s workers protest low wages, more than 100 arrested”
http://www.reuters.com/article/2014/05/21/mcdonalds-protests-idUSL1N0O718220140521
In Winnipeg (population 730,000, the 7th-largest city), sales are down 2% and listings have swollen by 11%. Last month there were a lonely five sales of properties listed over $750,000 and zero above $1 million. Year-to-date sales are running 4% below the 10-year average. -GT
Yes, there seems to be a pop in the number of listings this week. Three new ones in my small hood. Asking prices crazy. One 990 squ ft bungalow asking 299, 000.
Lots of stuff for sale in the Peg’ in the $179,000 (tiny) to 395,000 range.
As for the million dollar homes, I don’t think there are really that many in Winnipeg, but then, I don’t travel in those circles.
#18 Smoking Man.
This post of yours today is very perverse. Unfortunately, there is a lot of truth to it. Many Obedience Graduates have learned how to talk the way you described, but they can’t think for themselves, and yet, they are not aware of their real life ignorance. Ivory Towerism is deadly.
Also, I think that world wide RE addiction can now be classified as the infectious disease “Realestateitis”. Unfortunately there is only 2 known cures: Garth’s Blog, or Foreclosure.
#34 Asia
Nicole Foss, she was interviewed by Max Keiser and said she thought there would be a 90% correction in Canadian real-estate.
She has since moved to New Zealand and is part of a self sustaining eco village.
She still posts on the Automatic Earth occasionally.There is a vimeo video of her at the village talking about what she believes is going to happen, it’s apocalyptic, which is why she moved first from England to the Ottawa region and then to New Zealand.
The video is at the Automatic Earth site.
“Well, let’s face it. The economy is weak. Incomes are stagnant. Jobs are scarce. Debt’s huge. There’s no credible information.”
Just this last week there was piece on the CBC about employment…or rather, un-employment. Apparently 39% of the un-employed have given up on finding a job.
http://www.cbc.ca/news/business/39-of-unemployed-have-given-up-job-search-poll-suggests-1.2652239
There were some related pieces, such as;
“Jobs recovery overstated, Bank of Canada study finds
jobs employment job jobless board”
“Generation Screwed: Youth struggle for jobs, home ownership”
Links to those stories are found in the link above…
comment #33 S M
Not even a close approximation of the costs of aircraft operation.
You forget the one of the biggest cost input for airlines flying into Canadian airports – landing fees – the highest in the world!
Based on aircraft size and weight, point of flight origin, etc. the costs are outrageous.
10 years ago, it cost over CAD $ 9,000 (not a typo) to “drop” (landing only !) , a 747 – 300 at Pearson airport in Toronto.
I know this because a family member headed their accounting department for several years.
Smaller planes are less, but average for all aircraft was CAD $ 5,000 back then. I do not know the current tariff.
Also, some tickets you book have a breakdown of taxes, my last flight to Europe cost CAD $ 970 roundtrip, of which CAD $ 453 was Canadian and destination airport departure taxes, etc. Don’t believe me – ask your travel agent for the numbers.
This is why Warren Buffet has stated jokingly that investing in airline shares should be illegal ( he lost US $ 700 million in doing so and was one of his few losses)
Not sure of this has been brought up yet, but anyone think about what impact the Russo-Sino gas deal ($400B) will have on the global economy and the Canadian economy? That’s one helluva deal… Putin just flipped the bird to the Euros… “Don’t want my gas? I don’t need you!”
Now US is going to be energy independent… Do/can we sell more to Europe?
Look at core CPI. — Garth
Core inflation is bastardized and has no meaning whatsoever. It is measuring inflation excluding inflation (energy, food,…). It is still 1.4 % though.
THE REAL REASON CANADIAN R.E. IS ABSURDLY EXPENSIVE
A little examined cause (outside of this blog, of course) for the ballooning of Canadian RE prices has to do with a complex mix of personal status / ego and low self-esteem.
Garth, Smoking Man, Freedom First, Snowboid and a few others on this blog have intelligently opined on this factor, but I feel that they have understated its importance somewhat.
Most sincere commenters here seem to have a good sense of themselves and are not given to self-aggrandizement, boasting or emotional compensation. That is why I enjoy reading their comments regularly. They seem to be balanced, realistic and reasonably well-adjusted people.
However, many people live mundane existences and have mediocre minds. As my father said, generally speaking that;
1) Small minded people discuss other people
2) Mediocre minded people discuss things
3) Big minded people discuss ideas
In the absence of appropriate self-esteem, the mediocre mind seeks status among others in order to quell their inherent insecurities.
They attempt to achieve this by buying, displaying and discussing things (possessions and chattels), often making very expensive and financially unsound decisions in the process.
The biggest possession they can buy, display and discuss for most of these people is a house.
Canadians, like Americans and others, are a rather insecure lot (Canadians are the most insured people in the world for example) and as such, some seek to assuage their insecurities by buying a big house, a new car, etc., costs be damned.
Don’t believe me, check the indebtedness levels of Canadians or just watch the antics of those insufferable hipsters who “just want to belong”.
Smoking Man and some of you other commenters here know exactly what I am referring to, the rest who are offended by this, look in the mirror and check your egos.
“Well, let’s face it. The economy is weak. Incomes are stagnant. Jobs are scarce. Debt’s huge. There’s no credible information.”
Absolutely…and you can see and hear it all around you, everyday. I shun MSM and listen to real people, watch them shop and ask them what they think. Oh, and when an election looms, listen to the promises for the state of the nation’s economy, one of the few times when anything approaching the truth in matters economic emerges. Just don’t hold your breath on fulfillment.
We recently got a call from a seller who decided to accept the offer we made last Fall. Ooops! Prices have been dropping since and that offer is no longer on the table.
Just as our youth and those who crystallized their re profits have had to wait out this ridiculous spike in prices due to near zirp, so will a huge number of the greedy for their retirement funding dreams.
Many have got the situation that sellers want- they own their lives, have money and freedom to travel and do what they like with no worries about unexpected bills cramping their style.
Don’t waste this priceless situation by succumbing to re “players” frankenstats and bs.
If realtards are “players” does that mean human beings are mere pucks in their game?
Sounds like it to me.
So with Ca interest rates at 1 % and inflation ‘officially’ at 1.4-2 while in reality is at 4-5 we got officially negative interest rates. In reality deeply negative interest rates.
congratulations savers. still willing to lend at negative interest rates? good for you.
BTW a depositor is now considered unsecured creditor.
That’s bunk. — Garth
David invariably supplies insightful analysis but recently his conclusions appear to be somewhat jaded.
Easy excusable, considering the ongoing financial market manipulations and monetary policy distortions.
Too much stimulative fog to see the winding road ahead; let alone brick walls in our path..
Rosenberg:What Mr. Bond is telling the market…
http://business.financialpost.com/2014/05/23/what-mr-bond-is-telling-the-market/?utm_source=dlvr.it&utm_medium=twitter
Everything You Thought You Knew About The 10-Year Is Wrong…
http://www.businessinsider.com/10-year-yield-change-during-recoveries-2014-5#ixzz32dFpnBsY
Another quick and sadly revealing read:
39% of unemployed have given up job search, poll suggests
http://www.cbc.ca/news/business/39-of-unemployed-have-given-up-job-search-poll-suggests-1.2652239
67 Rob Ford In Rehab on 05.23.14 at 10:57 pm
You very funny.
straw men
============
Ben Judah @b_judah
Follow
How Putin laundered his money in UK: via a company registered in Rochdale and with accountants registered in Essex. http://www.reuters.com/investigates/russia/ …
7:06 AM – 21 May 2014
http://www.reuters.com/investigates/russia/
re: 33 Smoking Man on 05.23.14 at 9:07 pm
Back to those air head airline workers chirping me about the cost of a flight to Vegas, saying 1000 bucks a head is cost, and I said it’s 80 bucks…….
please start your own blog and blather away somewhere else
you have become a tiresome fool
#90 Hillbilly on 05.24.14 at 6:38 amNot even a close approximation of the costs of aircraft operation.
You forget the one of the biggest cost input for airlines flying into Canadian airports – landing fees – the highest in the world!
……..
Smoking Man Air operates from Niagara to Vegas..
Can’t you read….
#11 Josef on 05.23.14 at 8:33 pm
Are you the same Josef that posts “first, oh yeah baby!” all the time? And of all the lengthy stuff that gets posted here, you pick on Silver Meridian’s post? I found Silver Meridian’s post to be excellent, unlike much of the whack-a-doodle that shows up in here. Have some respect for quality information and on-topic commentary, even if it taxes your ADD medicine.
TEMPLE
Even the prices in Toronto seem to be falling. I have been looking for a property for about a month and a half. I see some homes for over 90 days (Expired) in what is counted as highly desireable area. Sellers dropping price by as much as 5% has not moved them. The market is finally getting in tune with reality that those LOFTY prices don’t make sense.
#67 Rob Ford In Rehab on 05.23.14 at 10:57 pm
Had a great life in School, star actor in Drama, star on the hockey team.
Problem with one ass hole in grade 7, snipping all 4 valve stems on his tires and suger in his gas tank was enough revenge.
It was worth the extra year the bastard gave me.
My thesis on teachers relates to what I observed when my kids where in High School.
Bring them up to be self confidant strong men and teachers are fighting you all the way.
Their vision was to tame the bull and turn it into a grazing cow, with a man purse and a pink shirt.
Making them oblivious to that smell coming from the slaughter house.
Teacher where better in the 70’s
#78 grasshopper — “Older airplanes burn an average $20/seat per hour. Some of the newer ones are more efficient and burn $15/seat per hour. […] Then there is the tax. […] How is it remotely reasonable to charge $300+ tax on a $99 fare to Florida. […] Would anyone buy a $99 printer at Staples if the tax on the printer was $300+.”
Look, I’m going to explain to you how the industry works. They attempt to charge their customers as much as they can. That’s it. That’s all. Prices change depending on when you’re booking and a bunch of other factors, but at the end of the day, if the plane pushes back from the gate with empty seats, somebody has failed.
If they price too high, another airline starts up, or people drive instead of flying. Too low, they go bankrupt. ‘Taxes’ are used to pay for things like airports and air traffic control, and really have nothing to do with ticket or fuel prices. Airlines love to blame part of their prices on taxes because it gets people like you angry at somebody else.
Rational people look at the all-in price, be it for a plane ticket or a printer from Staples, and decide whether they want it or not. The whole taxes/fees/surcharges thing is aimed at irrational people who apparently care whose pocket their hard earned dollars are going into.
An awful lot of investors have lost an awful lot of money in airline stocks. That means the people in the seats were winning.
two months ago the Black Swan event was that Quebec was going to separate from Canada. Of course sales were down in Quebec, especially Montreal. Lets see what happens with May’s numbers.
Kingston is a gorgeous city with so many favourable elements (save and except the roads and city council). But sadly this historic downtown has many store fronts with lease and sale signs.
Saturdays I work at a real estate office downtown. In a year of Saturdays I’ve come to the conclusion that people-watching must be what they are paying me for. Most work I’ve done was a couple weeks ago when I saw a car go the wrong way up the one-way street. I flew from my chair and out the door to see the impending carnage – exhausting little sprint. Agents have been blaming the quiet on the weather…
Article in LaPresse+ today about the oversupply of condos on the market – and how that’s likely to get much worse:
http://plus.lapresse.ca/screens/4d28-3910-53764df9-b990-5ccfac1c606a%7C_0.html
(Insightful graphics on LaPresse+ Application, but they aren’t visible on the website.)
#100 bobnbmore on 05.24.14 at 8:55 am
re: 33 Smoking Man on 05.23.14 at 9:07 pm
Back to those air head airline workers chirping me about the cost of a flight to Vegas, saying 1000 bucks a head is cost, and I said it’s 80 bucks…….
please start your own blog and blather away somewhere else
you have become a tiresome fool
……………………………
NO
I have a blog, the problem is everyone one that visits agrees with me.
There is no fun in that….
I’m going to bug you will you come to the darkside or go away.
#73 Sales in the GTA are CRASHING HARD! on 05.23.14 at 11:38 pm
The fact is sales are crashing hard in the GTA as realtors INFLATE sales for the month and then compare REVISED sales from the year before. The word is already out that sales numbers and prices from realtors are pure BUNK and every realtor posting here knows it. If the market was so good realtors why are so many of you out of work realtors posting here? No sales and NO MONEY for you realtors. :) you are financially hurting and we all know it. :)
———————————————
Hey Smoking Man, guess who’s back?
It’s LAUGHINGCON
I wonder if he still prays that his sisters house is going to plummet in value.
@SilverMeridian re: #75
LOL…good one! I cannot figure out why Joseph had to retype your entire post to make whatever point it was that he was trying to make.
Like several others here, I appreciated your comment – informative, and not overly long.
@Hillbilly, post #93:
I’m not offended at all by your post, in fact it’s one of the best I’ve read here in some time. You explain not only why house prices are outrageously high (but still a bubble none the less) but what’s behind all this rampant hyper consumerism.
I wonder, what ever happened to the Me Generation (of which I am a proud 53 year old member) who are supposedly so self centered that we don’t give a damn what anyone else thinks?
#91 Bob Rice on 05.24.14 at 6:55 am
”Now US is going to be energy independent… Do/can we sell more to Europe?”
Maybe not as energy independent as they first thought. Check this out.
http://www.marketwatch.com/story/dream-of-us-energy-independence-was-just-revised-away-2014-05-22?dist=tbeforebell
#HillBillyDoorKnobsOutLawed #LanewayTeslaStablesEndorsed #2020:TheGreening
“That surge just — I gotta tell you — it took us by surprise.” – Vancouver Director of Development Services Vicki Potter
[CBC] – New Vancouver building code prompts single-family permit rush: Contractors and families concerned new bylaw will make building homes more expensive
…”Vancouver will also become the first city in Canada to ban doorknobs, which will be replaced with more accessible levered handles in all new construction.”…
http://www.cbc.ca/news/canada/british-columbia/new-vancouver-building-code-prompts-single-family-permit-rush-1.2652347
#84 Marco Polo
in Edmonton, it’s different here.
Asking prices are much less than the big smoke. Ours are about 3.5 times income.
……………………………………………………………………….
Bullcrap…. with the average house going for 400K + in Edmonton everybody makes over 100K a year? lol
After much exposition by Garth Turner, it should be crystal clear to all that our indebted brethren are going to be hit by a triple whammy:
1. Rising interest rates will jack their mortgage payments into the stratosphere.
2. Stagnant wages (as a result of a slow, stagnant, and uncompetitive economy) will, after inflation, reduce what these soon-to-be poor, huddling wretches can afford apart from their indentured servitude to the banks et al. In this category, you can include the effects of inflation, rising costs (of consumables, health care, and education to name a few), and the need for increased funds to deal with rising lawlessness (I sincerely hope I am wrong about this last item).
3. Excess supply: too many wrinklies, seeking to cash in too late, will effectively drive down prices (too much supply and not enough demand) while their offspring, and newcomers to Canada, will find it almost impossible to pay even these reduced prices because of whammy factors 1 and 2. Years of McJobs, part time work, and a lack of assets will almost guarantee that a significant number of Millenials will be locked out of the housing market.
And of course, what Garth has written about is probably the less harmful scenario if we consider the worst case to be all of the above, plus some catastrophic housing correction driven by some external factors (for example: the Chinese and the Russkies find they can do quite well in an energy deal and the Americans reach energy independence thus lowering demand for Canadian energy exports).
Perhaps what a lot of Garth’s detractors are missing is that there does not necessarily have to be a massive bloodletting with respect to house prices for things to get much, much worse.
@#93 Hillbilly
You just devoted your entire comment to “…discussing other people”
#BonusDoorKnobZen #Here’sJohnny! #DirectorsCut #DeletedScenes
…frustrated WestSide RenoFlipper JackTorrance, enraged by lengthy building permit delays and his client’s incessant, FengShui inspired, byzantine plan modifications – completely loses it when a city building inspector tells him he’ll have to tear out all the MingDynasty porcelain DoorKnobs…
OldYeller to the rescue…
http://youtu.be/lFbCbkpY1FQ
AndScene!
Is Canada heading down the same path with our sub prime mortgage loans? Listen to this.
http://www.ted.com/talks/william_black_how_to_rob_a_bank_from_the_inside_that_is?utm_source=newsletter_weekly_2014-05-16&utm_campaign=newsletter_weekly&utm_medium=email&utm_content=top_right_button#t-5042
You wanna know what’s wrong with the economy? People camping out overnight for new Air Jordan sneakers.
The Mayor of Toronto is now in Midland on Georgian Bay – breaking news – nice photo taken of him with another young attractive woman. I swear this man is another Jackie Gleason, and that Rehab facility sounds like so much fun.
“BTW a depositor is now considered unsecured creditor.”
“That’s bunk. — Garth”
Does that mean we are secured creditors?
“prices continuing to increase between 3% and 33%” the FED states.
Meanwhile chain stores that represent the consumer economy are closing 1000’s of stores across the USA.
Yup, the usa economic Rennaisance that Garth claimed from the hilltops.
#66 Old Man on 05.23.14 at 10:56 pm
#49 CPG – there is opportunity if 39% have given up looking, so be creative.
===================
This is good advice. You are supposed to go through human resource departments to get a job, but I think they are often just a bureaucratic obstacle. When I was a newly minted professional accountant, I decided I wanted to be a Revenue Canada auditor (now CRA). The government HR department said they were no job listings and wouldn’t be for six months. As a brash but well-qualified twenty-something, I wasn’t going to take no for an answer so I decided to find the guy who owned the problem and approach him. I wrote to the regional chief of audit and had a job offer within two weeks. Obviously this only works if you are selling what people want to buy, but always remember that human resources departments don’t own the problem, managers do.
Leaky condo crisis rears its head again in B.C.
“People think living in strata is cheaper (than living in a house). It’s not cheaper,” Gioventu said. “You don’t need to do as much (maintenance) work because you hire experts (to do it), but it isn’t necessarily cheaper.”
http://www.vancouversun.com/technology/Leaky+condo+crisis+rears+head+again/9871711/story.html#ixzz32ecMcYMZ
“All Jake Moldowan needs to know about improving the house-flogging business in Canada was published on this site. Actually, I’ve nothing further to add. I think he knows it.”
Another note to Jake is these shameless house pumping ho’s like Ozzie J. who are now pumping Victoria as the under-appreciated ugly sister to Vancouver. He had the gall to pump his “Hot Property of the Week” as the cheapest house in the Victoria “core” in the Esquimalt.
#1 Esquimalt isn’t in the “core”, and #2, if you look at the pics of this crack shack and do some simple Googling you will see this is the drug shack neighborhood of Victoria with semi-annual drug busts of sizeable quantities.
I don’t know any professional who would pump that piece of shit as a “Hot Property” with a clear conscience but I guess there are several psychological conditions certain types of salesmen have to promote this garbage. Clean up the loose talk Jake, your industry is promoted by sleaze with no fear or repercussion for false statements. Would you recommend this dump to your best investor friends ? Honestly ?
http://beta.realtor.ca/propertyDetails.aspx?PropertyId=14219841
“To keep hearing that HAM or immigrants aren’t relevant is ridiculous just look around.”
Of course immigrants (who become Canadians) are a significant force in Canada’s housing market. No doubt about that. However, the evidence is that they’re buying with large amounts of CMHC-insured subprime credit. Not with “cash” that they’ve brought from overseas.
The underlying assumption of “HAM” is that “Asians” are merely coming to Canada with suitcases of money (or the equivalent) and buying up property. Which is not supported by evidence.
Are some new Canadians using CMHC subprime mortgage insurance as a de facto non-recourse source of financing? Absolutely. If house prices go up, they’re in the money. If prices go down and the house becomes underwater, they hop the next plane back to Guangzhou. Such behaviour can be influential and evidence does exist for such.
“I live in vancouver and i am trying to hire an electrical engineer it is very difficult they just are not available if they have any chops.”
Advertise through Apegajobboard.ca or apeg.bc.ca, and I guarantee that you will have at least a dozen EE applicants to choose from. In fact, employers that advertise on such are usually inundated with resumes from qualified EE’s as there is a huge glut of them in the wake of the Nortel downturn. A local employer who put up a modest ad for an EE received 50-100 resumes.
“. A mechanical we hired 3 months ago and relocated to vancouver already put in his notice he is moving to cupertino to work for apple at more than twice what he was earning with us.”
That’s extraordinarily rare, Apple recruiting a Mechanical, especially from Canada, but the cost of living and housing in Vancouver is similar to that of Cupertino. So if you’re only paying half as much, then I think you need to raise your compensation.
Thanks Mark for the sarcasm.
Wasn’t being sarcastic at all. Canadians invest overseas, and some of those Canadians are either young or are young representatives of older investors.
For instance, Ian Ball of McEwen Mining out of Toronto. In his 20s. Probably elicits the same sort of thoughts amongst the locals when he shows up to some of the Latin American projects that Canadians are investing in, as President of the company.
“congratulations savers. still willing to lend at negative interest rates? good for you. “
Kind of a force of habit. I recently received a small inheritance, and the know-it-all executor demanded that I put a cash bequest into a credit union GIC at an absurdly low interest rate, so as to protect me from the ‘evils’ of the stock market and give me a yearly cashflow so I could buy a few ice cream cones or trinkets in remembrance of my aunt. It was quite a battle, but there’s lots of people out there who are so fixated on GICs and savings accounts that they refuse to consider anything else. Often these people control money for others, so that’s why such horrifically bad investments actually get bought.
Money versus Wealth
CPG at 43 provided an interesting link showing Canada’s total money supply
M1 = $739 billion
M2 = $1253 billion
M3 = $1799 billion
M3 is the broadest measure and includes cash in circulation and bank deposits and money market funds
http://www.investopedia.com/terms/m/m3.asp
It’s interesting to think about this total money supply M3 of $1799 billion. A child might wisely ask, is that a lot?
To answer that, let’s look at it on a per capital basis. Canada has a population of 35.3 million. So the total M3 money supply amounts to $51,000 per person.
Some people might think that if you owned all the money in Canada then you could buy everything in Canada.
This is absolutely false. The value of all the stocks on the Toronto index alone would cost you $2500 billion alone. So right there just the stocks on the TSX are worth more than the entire M3 money supply.
http://www.tmx.com/en/pdf/month_stats/FinancingStats_Apr14.pdf
So this is proof enough that a country’s wealth vastly exceeds its money supply.
The reason? Well all money is wealth
But certainly all wealth is not money. All (financial) wealth can be MEASURED in money (in any currency actually) but all financial wealth is certainly not money. Stocks are not money. Houses are not money.
Money is something that the economy creates to facilitate trade and commerce. Money is a grease that is necessary to create wealth. Most wealth is not money as such.
CPG points out that M3 grew at 8.9%. Is that too fast? Probably it is since the economy is not growing that fast. Is it inflationary? I don’t know. Apparently inflation (rising prices) has to do both with money supply and how fast the money is circulating from one person to the next.
None of this really matters to the average citizen or investor and simply illustrates that money and wealth are complicated.
What matters is that we acquires a stream(s) of income and also grow our wealth. Learning about the M3 and its growth is a useful intellectual exercise but will not help us grow our wealth and is not likely to help us predict interest rates, inflation or stock prices since so many other factors come into play.
Buffett has said he NEVER thinks about macro economic factors when investing. So why should any of us?
#83 – Andrew Wooburn: Thanks for the explanation. If land is seen by some cultures as a desirable store of wealth & value it explains the buying up in areas where land IS limited.
#107 – Angela: The rare days I’m downtown on nice weekends there’s a lot of foot traffic & window shopping but I rarely see people actually buying anything or carrying shopping bags.
We do have a marvellous downtown. It’s small, walkable, stunning buildings & we didn’t kill our waterfront. There is a great deal to see & do for little money or free. But yes, 11% vacancy rate for downtown storefronts is killing downtown & business fees & taxes are so high it’s hard for shop owners to cut customers any slack on pricing.
City government is useless & timely access to decent health care is bad & becoming worse. I noticed they stopped pushing Kingston as a great place for retirees & some retirees I know who were interested in moving here lost interest when they learned it can literally take 2 years to see certain specialists.
“Buffett has said he NEVER thinks about macro economic factors when investing. So why should any of us?”
Buffett should, perhaps. For instance, most of Buffett’s wealth was created through leverage. If, for some reason, investments in the US economy no longer perform well under leverage, then Buffett has a major problem on his hands and probably will not be creating value as a manager. Buffett’s refusal to look at macro factors, as well as a dogmatic view of asset classes such as gold, will be his ultimate downfall as a manager if he actually lives that long.
#73 Sales in the GTA are CRASHING HARD! on 05.23.14 at 11:38 pm
Welcome back you crazy bastard. Just need Beach Girl to flash us.
#109 Smoking Man – Is there really a dark side to reality as we know it? One so complex that denial becomes the only answer or does the matrix exist like stepping through the looking glass.
Re: #130 Mark on 05.24.14 at 2:54 pm
A good idea to get something as you ride out the stock market crash and decades of flat lining.
Yes, Depositors are Secured
Basil Fawlty at 122 asks:
“BTW a depositor is now considered unsecured creditor.”
“That’s bunk. — Garth”
Does that mean we are secured creditors?
****************************************
Yes, depositors are secured creditors of banks , and the deposit liabilities of a bank rank ahead of the secured debt investors and even more so ahead of unsecured debt, preferred shareholders and common shareholders.
There are many things in life to worry about. Losing your money deposited in any substantial Canadian bank is not one of them. And under $100k is government insured and completely guaranteed if the bank is a licensed deposit taking institution in Canada.
#126,,,Mark.
No disrespect. However, some of the people who read this blog are in a position to know, and I can assure you that the new immigrants to this country who purchase real estate are not the ones making use of the services that CMHC or other insured lenders offer…..
You can take that information to the BANK!
#131 shawn on 05.24.14 at 3:05 pm
I enjoy your informative posts, but you’re boring as shit.
Try to spice them up with a bit of human observation, some philosophy, and insanity..
Only way you can take page two off me.
#93 Hillbilly
Very well said by you and Kudos’ to your Dad.
“No disrespect. However, some of the people who read this blog are in a position to know, and I can assure you that the new immigrants to this country who purchase real estate are not the ones making use of the services that CMHC or other insured lenders offer…..”
The statistics on leverage, particularly its expansion in the area of mortgage credit, which is almost perfectly correlated with price increases, say otherwise. If actual cash was being brought to Canada and was a significant part of the marketplace (ie: enough to move prices), leverage would be falling, not rising.
M3 is the broadest measure and includes cash in circulation and bank deposits and money market funds
————–
Not correct.
M3 is a German Luxury car favored by many HAM in Vancouver.
“A good idea to get something as you ride out the stock market crash and decades of flat lining.”
Stock market has already flat-lined for a decade and a half pretty much. But anyways, the post was simply to point out the reasons why such poor investments such as GICs and savings accounts are purchased by Canadians. Garth (bless him!) points out on numerous occasions how much TFSA money is “invested” in almost zero-interest “savings” accounts. Its this attitude which has allowed the bankers to become rich, a RE bubble to be funded, while the rest of the economy remains in a state of atrophy.
Casting call for the movie “The Buffeteers”.
Shawn could play the leading role.
#135 Old Man on 05.24.14 at 4:07 pm
#109 Smoking Man – Is there really a dark side to reality as we know it? One so complex that denial becomes the only answer or does the matrix exist like stepping through the looking glass.
………
The only dark side in life is when you try and move and eat the roots of dandy lions from your nicely crafted box.
Reality is an observation based on your programing.
Insanity is the only means of escape…
Garth you know what to do, as predicted by big brother I find myself at Seneca again.
After killing two bottles of wine.. A bottle of 26 ounces of Jack grew a face, it’s taunting me.
Be a man, one gulp.
You know I can’t resist a challenger.
If I say shit about tax farm, be a sport, delete.
Thanks..
Off to the fun zone….
Your deposit security is only as reliable as the bank itself is.
The banks are globally and systemically integrated with each other and collectively hold a quadrillion of off balance sheet derivatives.
Why do you think Canada along with the eu and USA and many other countries have all satisfied the FSB bail in plan in conjunction with the world Bank, BIS and IMF.
It’s all public knowledge right in front of you.
Tin foil alert. — Garth
#135 Old Man
“Is there really a dark side to reality as we know it? One so complex that denial becomes the only answer or does the matrix exist like stepping through the looking glass”.
Let me have a few drinks and I’ll get back to you on that.
#144 Son of Ponzi – Rob Ford would apply in a New York minute for the “Buffeteers” as is hungry, and can never get enough to eat anywhere.
#19 bigrider: “#10 Spiltbongwater – Bingada Bangada boom racist towards Canadians of Italian decent.
Those words sound Phillipino to me…LOL , as a Canadian of Italian decent.”
*****************
This isn’t about race. This is about culture. *sigh* I wonder if we’ll ever all just get along. The world is getting smaller. And….multiculturalism is not working.
May 7 2014
Snapshot of older consumers and mortgage debt
Older homeowners are carrying more mortgage debt than ever before. Today, compared to a decade ago, fewer older Americans own their home outright. In this snapshot, we analyze data from the Census Bureau, the Federal Reserve, and the CFPB’s own consumer complaints to describe the growing number of older consumers carrying mortgage debt, and the risks that this trend presents to their financial security.
Take a look at our snapshot of older consumers and mortgage debt.
http://files.consumerfinance.gov/f/201405_cfpb_snapshot_older-consumers-mortgage-debt.pdf
Now for you climate change people a great movie is scheduled called “The Day After Tomorrow” tonight on TLN. I have never seen it and had no idea the budget was $125 million, so am hoping the schedule holds up. A friend of mine did the digital artist work with many others, and the casting was huge. Nothing else worth looking at, and climate change has a huge impact on economic activity too.
@130
CPG points out that M3 grew at 8.9%. Is that too fast? Probably it is since the economy is not growing that fast. Is it inflationary? I don’t know. Apparently inflation (rising prices) has to do both with money supply and how fast the money is circulating from one person to the next.
******
The growth of the money supply is inflation. Changes in the price level of consumption goods or asset prices may be induced by inflation of the money supply.
Concentrating on the CPI is looking where the magician wants you to look.
That is not to say you are wrong about attempting to generate personal wealth. But its not to say you are correct that understanding macro eonomic factors are unhelpful in solving this problem.
@HommeDuTabagisme/#145
“Insanity is the only means of escape…” – HDT
…”When the going gets weird, the weird turn pro.” – Dr. Hunter S. Thompson
http://youtu.be/P2pgWsYSyUA
[NoteToSM: Better in the 70’s? Damn right they were! Among other things, you could always ‘ShakeDown’ the student body for some quality pharmaceuticals if you found yourself a LittleShort in the RunUp to PayDay. SummerSchool was even better.]
#135 Old Man
“Is there really a dark side to reality as we know it? One so complex that denial becomes the only answer or does the matrix exist like stepping through the looking glass”.
For a moment there I thought I was back in high school reading “MacBeth”.
In the continuing saga to reveal what the RE stats really say in the Central Okanagan.
Here is the comparison April 2008 to April 2014, source OMREB stats:
SFH sales
2008 – 241; 2014 – 262 (sales up)
Condo Sales
2008 – 94; 2014 – 92 (sales down)
TH sales
2008 – 42; 2014 – 78 (sales up)
More importantly, pricing is more revealing:
SFH
2008 av $ 552,830; med $ 494,500
2014 av $ 468,257; med $ 439,500 (down)
Condo
2008 av $ 287,819; med $ 272,000
2014 av $ 243,157; med $ 224,950 (down)
TH
2008 av $ 409,021; med $ 361,250
2014 av $ 379,984; med $ 348,884 (down)
But it’s really worse than that. Inflation from Apr 2008 – Apr 2014 is 11.7 %,sSource Bank of Canada inflation calculator. So adjusting the 2008 figures show what the pricing should be to keep pace with
inflation:
2008 av $ 617,511; med $ 552,356
2014 av $ 468,257; med $ 439,500 (really down)
Condo
2008 av $ 321,494; med $ 303,824
2014 av $ 243,157; med $ 224,950 (really down)
TH
2008 av $ 456,876; med $ 403,516
2014 av $ 379,984; med $ 348,884 (really down)
What happened? Where did all the HAM (Hot Albertan Money) go?
Maybe this is why the local RE agents are in ‘play with the stats’ mode!
It’s also why we are still patiently waiting for the bottom, especially with condos!
#101 Smoking Man
This makes SOME costs lower, but does not make them disappear. Airports charge airlines for landing and docking, and all the services that go with it (air traffic control, refuelling, deicing, baggage, security), and there are far many more costs of operating an airline than fuel costs and some incidentals you bothered to list. Airport fees, taxes and surcharges alone easily double your ticket price. Things like office space, administration, licensing, compliance, insurance, accounting, legal, ticketing and customer service, reservation system, etc, all cost money too. To say nothing of the capital cost of buying or leasing the aircraft itself.
It seems you believe there is big money to be made running an $80/ticket Niagra-Las Vegas airline. I would wish you luck, but won’t bother, because the proposition is ludicrous once you scratch the surface of the business case.
Smoking man!
Your antie and uncle gambled, you are the outcome!
Just an observation
#125 Andrew Woburn
A multi-story condo tower is NECESSARILY more expensive than a house. The mechanicals are way more expensive, as are the people with skills to work on them. The structure is more expensive and complicated to maintain. And you don’t get to defer maintenance or patch it up yourself, as a homeowner might.
Yes, there will be some efficiencies in communal living, but for every one of those there are expenses a SFH owner does not have (elevators? parkade? sauna? pool? valet?) or are much higher, Replacing siding is expensive, but a pittance compared to replacing the cladding/envelope on a glass tower. Replacing a roof is a home owner mile stone, but easily a year-long multi-million dollar project in a condo.
#HowRudeIsThat!? #RectifyingEgregiousErrorsOfOmission.
MagnanimousHost, was it good for you, too – today?
http://youtu.be/md2fxHVw4Fw
[NoteToSaltyDogz: The HogRider I passed on the ChannelParkway this afternoon looked at me with such longing that, for the briefest of instants, I could have sworn he’d mistaken me for DameCatFood. Perhaps it was just my outrageous Termignoni RacingExhaust. Or the PussySuit. Egads! A terrible thought has just occurred to me… Was it just a case of sore ankles, Bunions, Chaps and a CustomHarleyPedicure?]
The more things change, the more messed up humanity becomes. This is the clearest indication yet of Stalin’s quote, “Those who cast the votes decide nothing. Those who count the votes decide everything.” — Ukraine election “The above was sent to me via email (Friday). It reportedly shows a listing of Ukrainian voters eligible to vote in the coming Presidential elections. The far right column is the residence address, and it is the exact same address for everyone on the page!” wrh.com. Looks as if the fix is in, which will lead to a bloodbath. That plays into the elites’ hands nicely — depop. and increasing profits from arms sales to both sides, plus Black Sea Politics.
However, what goes around must come around again — Thailand just tossed its US-installed muppeteer, and is now under martial law for the time being.
Speaking of annexation, another part of the world is a tinderbox, along with another fiscal fight.
#147 Smoking Man on 05.24.14 at 6:58 pm
Garth you know what to do, as predicted by big brother I find myself at Seneca again.
After killing two bottles of wine.. A bottle of 26 ounces of Jack grew a face, it’s taunting me.
MKULTRA says don’t drink too much Smoking Man, you know you always wake up with cuts and bruises after you tie one on. Stay another night at Seneca. Go to Stir and watch the hotties and dancing girls.
Well…Mark went to UK, F died, which to blame, strange how things works. Back to that bottle of Pinot but I have a question: when you have a half bottle of wine, what do you says:
1. Half full.
2. Half empty.
#GimmeABreak,Eh. #It’Saturday.
http://youtu.be/Kj_E1YUrkqI
Nosty,
Just got back home to Dubai from a trip to Bangkok. Pretty weird to see the usually crammed streets deserted for the 10pm – 5am curfew.
But during the day, perfectly normal so far. The’ve done this 12 times since 1932 so I don’t think the normal Joe Public gets too fussed.
“M3 is a German Luxury car favored by many HAM in Vancouver.”
Are you kidding? M3 isn’t a luxury car at all, most are bought mostly on credit or leases. Real HAM wouldn’t be caught dead in an entry-level BMW.
I think the term “HAM” has just turned into a catch-all for people of Asian ethnicity who happen to have a credit card or a mortgage. Because, really, it has very little to do with the relatively few foreigners who are bringing money to Canada to invest in residential RE and high-class living.
#153 ‘Old Man’:
If you want to watch that movie “The DAY AFTER TOMORROW” for free, any time you want, just go to this link and watch the movie. It’s 100% free, available any time you want to watch it:
http://megashare.info/full_watch.php?id=TVRVdw
I’ve got over 2000 movies that I’ve downloaded from free links like that one.
#160 devore on 05.24.14 at 9:29 pm
A multi-story condo tower is NECESSARILY more expensive than a house.
……………………
Why?
Why are the Europe’s equivalents to a condo (free hold apartments) with almost no maintenance/except heating/where applicable?
Because they are not built cheap with glass walls as ours.
Condos always have been for millionaires. In Toronto there are more condo buildings than in New York/the city of billionaires.
Buying Condo in Canada is act of financial suicide, you own nothing and live in community /the ownership is pretty much community ownership.
Off immediate topic but still relevant to investing sanely:
Just moved Mom’s RIF to a self-directed investment account–I have Power of Attorney, though Mom’s sharp as a tack at 90 years to Canadian Bank from another so-called Wealth Management/cum “Financial advisor”.
The former bank sent her a letter bragging about the gross amount net of their exorbitant Management Fees they “earned for her since 1998.”
I have an MBA in Finance so I can count. They stated that she earned 7.67% since 1998. That is net of the 1.25% fee they charged on her portfolio. The fees clock in at about $108,000–and they never had one single meeting or “how are you/we doing?” meeting since 1998.
They were absent–or silent–about the recession of 2001/2002–no discussion about the crash of 2008, but the “Wealth Manager” must have been worried about his retirement!
They refused to recognize my Power of Attorney and denied me access to Mom’s trading accounts because I travel around?
In 2012, they over withdrew from my Mom’s RIF, the result of which she had to pay an extra almost $30,000 in personal income tax for that taxation year.
If I had access to here accounts to monitor events, I could have lent her the money. What’s the return of me lending her $40,000 and saving $30,000 in taxes?
What incompents!
They never set-up nor advised her to establish a TFSA.
Nor did they advise her to keep her taxable income below $70,500 so she could avoid the OAS clawback, depriving her of about $16,000 more of pre-tax income per year.
My remedies are many and I plan to pursue each of them.
Meanwhile, to implement Garth’s financial strategies, I stumbled upon a website about a company does just that: Garth’s strategies, and many other prudent financial advisors: eg. John Bogle, Andrew Halam and, even, Warren Buffett.
Cheers from Vietnam
Hi Garth,
The “rot at the edges” is seemingly the case in the GVRD. I am seeing continued price reductions and lower asking prices for new inventory in the outer Vancouver suburbs.
For example, there is now a fairly decent house in the “River Springs” area of Coquitlam that has been reduced to $380K. This would have been UNHEARD of a few months/years ago.
#AfterThought:EducationalAddendum #HillBillyPussySuits
http://tinyurl.com/kup23e4
[NoteToSaltyDogZ: It’s a RunningJoke between adherents of opposing MotoCiclismoSubCultures… ahem… or, to put it differently, a lively debate enjoyed by those who relish having their plaster casts autographed… versus those who would prefer to avoid FractureClinics.]
#2 SilverMeridian on 05.23.14 at 8:16 pm
“Teetering”………..”we are nowhere buyers market right now, nowhere near”……
Lots o’ verbal fast toggling here.
I guess it will take a few thousand more listings and a few more months or years of quiet telephones, if not crickets to progress to: still teetering and possibly approaching a buyers market.
Worst possible time to be buying.
Low ball and be ready to walk, or forfeit your future wealth to fund boomer retirement.
While you’re sweating it out at work to pay off an overpriced house that you might have become bored with, boomers will be sipping champagne on the promenade deck staring out at Moorea, looking forward to yet another evening’s dining and entertainment.
Over-entitlement by accident of birth? Not on my dime.
Best to let your future “teeter” in the direction of fiscal growth and early independence, rather than fund boomer enjoyment with excess debt.
On inflation from the Federal Reserve:
Subject: Reserve Center Cafe changes coming
Reserve CenterTM Tenants,
Due to rising product prices in the past several years, The Reserve Center will increase its prices in the cafeteria effective May 27.
Over the past five years, many of you may have experience product price increases in grocery stores. Prices continue to rise between 3% – 33%. For the past eight years, The Reserve Center has been absorbing these increases. The last overall price increase in The Reserve Center cafeteria took place in 2006, followed by a limited increase on sugar-based products in 2012.
For the upcoming price increase, a thorough review of café items was conducted and, while some prices will remain flat, others will increase to recognize these market increases. The price increase will help The Reserve Center cafeteria continue to maintain high standards and service levels by providing quality products.
Another change includes the introduction of new menu program changes to provide greater variety as we continue to refresh the cafeteria menu offerings. In the following months, we will be distributing a survey to obtain feedback on these new menu changes, as well as your food preferences so that we can continue to tailor menu offerings based on input we receive from our customers.
Lastly, we’ve reviewed feedback and in response The Reserve Center cafeteria will now close at 1:30 p.m. on Fridays. However, July 11 tahrough Aug. 29 we will close at 1 p.m. as the traffic is lighter due to vacations.
Thank you for your continued support of The Reserve Center cafeteria.
Federal Reserve Bank of Chicago
That’s bunk. — Garth
Negative interest rates are here already, actually they are the goal of the central banks.
Look at the inflation goals – 2-3 for core CPI target, in reality higher inflation (see federal reserve cafeteria note stating food inflation) and with stated long term ZIRP (zero interest rate policies) much lower then normal – in the 3-4 % rate one clearly see negative rates for a while.
What I said was bunk was the assertion bank depositors are unsecured creditors. What crap you metalheads tell each other. — Garth
#100 bobnbmore – Smoking man, you have become a tiresome fool
—
Loving the collective beat-down on this blathering waste of oxygen! You ever notice how the tool takes the time to respond to every single post? Inferiority complex and compensating for so very much. Everyone’s onto you, you useless poser…
142-Mark
#142-Mark – didn’t say they didn’t obtain mortgages, only that they did not make use of CMHC or other insurers…
Re: #170 OffShoreObserver on 05.25.14 at 2:06 am
Even 30 grand in probate fees is pocket change.
Your strategy right now should be to preserve the base amount as stocks are probably the worst of all investments worldwide right now. Remember when stocks fall about 80 percent dividends usually fall the same amount, just something the thickheaded imbeciles don’t realize.
[…] The world according to Garth, the negative naysayer of all things real estate, is not good. He tells us of, over supply in Winnipeg, falling home prices in Halifax. He thinks the bubble is going to burst in Calgary. And Toronto? He believes that Torontonians must all have drank the koolaid, taken the mayor’s playbook and started hanging out with Somali crack capitalist and boozy bimbos in Escalades. […]
It’s different in Waterloo. Who would have imagined? — Garth
#160 – Nemesis: This is more my speed on a sleepy Sunday:
http://www.youtube.com/watch?v=Ld1l4Ud7jp8
#161 – Devore: A major concern I’d have with condos, especially the newer, larger developments is management & day to day operations. In my eyes, such a building is more a business with a lot of different issues to deal with including some pretty complicated issues. Are residents really going to be inclined and/or have the skill sets(s), necessary to be fully aware of condo laws – such as they are? Can they evaluate bids on work needing doing? Tons & tons of potential problems with many masters to please. Potentially, it could be a nightmare.
That would be a major concern if I were looking at buying a condo anywhere – who is running things & how are they handling it?
#41 2or3orsometimes7 on 05.23.14 at 9:28 pm
#111 WhiteKat on 05.24.14 at 10:26 am
Thanks for the support guys. New Open House show was out this weekend, very interesting, lots of material for the next post. Very busy time for me right now, will try to summ it up and make another post sometimes this week. BTW, according to the same show current inventory in Ottawa is sitting at 9788 active listings and nobody will be surprised any more if we are going to hit 11 000 this summer. If you have an hour to spare, you can listen to the whole thing over here:
http://proxy.autopod.ca/podcasts/chum/13/22463/Open.House.140524.mp3
Cheers, SilverMeridian
An interesting and clearly written discussion of deflation from Dr. Gary Shilling.
Seven Varieties of Deflation
“Inflation in the U.S. has historically been a wartime phenomenon, including not only shooting wars but also the Cold War and the War on Poverty. That’s when the federal government vastly overspends its income on top of a robust private economy—obviously not the case today when government stimulus isn’t even offsetting private sector weakness. Deflation reigns in peacetime, and I think it is again, with the end of the Iraq engagement and as the unwinding of Afghanistan expenditures further reduce military spending.”
http://www.deflation.com/seven-varieties-of-deflation/
@161 – boombust
I drive by River Springs on occasion. First of all, it’s a strata. It’s beat up, and it’s 35 years old. I actually think 380K is too much
Meanwhile, a couple km away, entire neighborhoods of detached housing are being sold out at pre-build stage, around 1M per unit.
“#142-Mark – didn’t say they didn’t obtain mortgages, only that they did not make use of CMHC or other insurers…”
They most certainly are using CMHC and/or other insurers, because bringing money to Canada is extremely uncommon. “HAM”, in reality, is really credit, and large amounts of CMHC-insured subprime credit at that.
“Remember when stocks fall about 80 percent dividends usually fall the same amount, just something the thickheaded imbeciles don’t realize.”
A rather bizarre comment. Dividends barely even fell during the 2008-2009 timeframe when stocks fell 50%. And dividend income is far less volatile than the overall stock market. A 80% fall in the broad market is just wishful thinking.
“Just moved Mom’s RIF to a self-directed investment account–I have Power of Attorney, though Mom’s sharp as a tack at 90 years to Canadian Bank from another so-called Wealth Management/cum “Financial advisor”.”
I think you need to use that Finance MBA to actually research the rules around RRSPs, RRIFs, mandatory minimum withdrawals from RRIF’s, and just how the OAS clawback works (and how its not really avoidable). Additionally, if you are now advising your mother on what to do in a self-directed account, it is profoundly unethical to make her a loan (which will have to be paid out of RRIF income or an eventual inheritance anyways!).
You mention fees of $108,000, over the span of 15 years, which, at 1.25%, means she has $600-$800k. Yes, this can be considerable, but a net 7.87% return is still quite decent compared to stock and bond market returns since 1998.
#186 Mark
Agree, some bad performing stocks have very high dividend yield.
About price movement, when dividend cut occurs, Stock price down,
so, works quite opposite.
RIF MAP (minimum annual payment) on her 90’s age,
is quite complicated, and yes, could lead to very large final tax payment, so, forget about OAS clawbacks (it is small negative), but your mother maybe better off making lump-sam withdrawal devide into a few years.
Sorry, it is AMP, not MAP
#138 Shawn on 05.24.14 at 4:51 pm
Yes, Depositors are Secured
Basil Fawlty at 122 asks:
“BTW a depositor is now considered unsecured creditor.”
“That’s bunk. — Garth”
Does that mean we are secured creditors?
****************************************
Yes, depositors are secured creditors of banks , and the deposit liabilities of a bank rank ahead of the secured debt investors and even more so ahead of unsecured debt, preferred shareholders and common shareholders.
====================================
At least as of September 2, 2011, bank depositors were not secured creditors of the banks. My source is a letter from the Canadian Bankers Association to the Bank for International Setlements commenting on the proposed resolution mechanisms for failed banks:
“We do not believe that depositors should be given preference over other unsecured creditors upon insolvency. Many jurisdictions already provide protection to depositors up to a certain coverage limit through deposit guarantee schemes. lf deposits are given preferential treatment over the coverage limit, we believe that this would lead to moral hazard and conflict with the system of limited deposit protection. Further, this preference would disadvantage other unsecured creditors (e.g. service providers, suppliers or official authorities).”
http://www.financialstabilityboard.org/press/c_110909m.pdf
Does anyone know if the legal position of deposits has changed since then?
Canadian depositors do not appear to be at much risk, but unless I have missed a major change in the Canadian banking regime, their protection depends mainly on prudence and on the deposit insurance program rather than the ranking of their deposits in an insolvency claim. The reserves backing up the CDIC insurance program are tiny in relation to potential claims in a “black swan” event, so the real backstop is us, the taxpayers.
This issue is being vigorously debated in the EU and it appears that EU insured deposits will wind up being given a preference at least equal to senior bondholders. This moves the risk of insolvency from deposit insurance plans down the chain to junior creditors and shareholders and it takes government largely off the hook.
I have no information as to whether this policy change is in play in Canada, but it makes sense, and as the advanced economies are moving toward harmonized banking regulation, I expect it will be. Presumably the relative cost of junior bank capital will have to increase to meet the perceived risk.
European bank resolution – depositors to have preference
http://enews.threeware.com.au/articles/get/4096/1138069
How Safe Should Bank Deposits Be?
http://blogs.wsj.com/brussels/2013/05/17/how-safe-should-bank-deposits-be/
#184
zzzzzzzzzzzzzzzz
I didn’t say it wasn’t any of those things.
BTW, you can have those Burke Mountain houses for far less than a million…and the new TH’s in that area have seen MAJOR price declines.
I’ve said it before …beware of empty promises
Sure banks protect your savings up to $100,000 but given that there would be tens of thousands of people making claim if a problem arose …how long do you think it’s gonna take to have your money returned?
Answer..years at least 2
What do you think the Canadian dollar will be worth after a major bank folds 2 years later?
Answer…less than half of it’s value now
Think people …think!
Of yeah..I know what’s coming next…” No Canadian bank
will ever go out of business…
Hahahah …and the titanic is unsinkable
….Iraq has WMD’s
…..The NSA doesn’t spy on Americans
…. real estate always goes up
man, the sheep are such suckers!
What I said was bunk was the assertion bank depositors are unsecured creditors. What crap you metalheads tell each other. — Garth
……………………………….
Metal Heads? I have no more than 5 % of my investment portfolio in precious metals.
I was poking around, I agree that the chance of bank defaults are slim and the majority of the people would be fine with their deposits (whatever is left considering the inflation) up to the insured limits, however I happen to know few layers and doctor who have north of 3-4 million dollars with bat least half of it in cash, so the questions is how would they protect the part of their savings above the insured limits. (I think 100 k).
The part above the insured limit is considered unsecured crediting, is that correct?
lawyers, damn it
I have tried this question with the old ladies but they just laugh thinking its a trick or should know by now; they believe I might be flirting. I need an answer for my research, and need a younger point of view. The question is: under what circumstances would a woman remove her watch? Its for my research paper for economic development.
MKULTRA says Smoking Man has left Seneca and is on his boat!
I think this encapsulates part of what Garth has been trying to warn us about:
“Men, it has been well said, think in herds. It will be seen that they go mad in herds, while they only recover their senses slowly, and one by one.” – Charles Mackay, Scottish journalist, circa 1841
> We need shepherds in Vancouver, STAT.
From the automatic earth…words of wisdom
I know many, if not most, people see Nicole and I as doomers and pessimists, and if only we did what Shinzo Abe told the Japanese to do: believe in Abenomics, things would be alright, since pessimism is such an corrosive attitude. But if pessimism means refusing to look the other way when confronted by lies, manipulations and tens of trillions in hidden losses, I guess we must accept the label, perhaps even with a shot of pride. Still, of course I realize that as the picture of the new America emerges and it’s not a rosy one, there are always plenty of sources to turn to that will serve a dose of optimism at demand.
(GARTH…are you listening?)
The best thing I can do, as always, is to say: look at the data. What do you think you see? I can tell you what I see, and what I’ve been seeing for years, is a load of debt so gigantic that not restructuring it could only have been the worst possible decision, and yet it was made. The fact that this didn’t only happen stateside is no comfort, it just makes things worse: no-one left to unload your debt on. The Fed, the government and the media have ‘shielded’ Americans (and Europeans, and Japanese) from their own reality for many years now, so they wouldn’t notice how private debt was transferred to them. Retail and housing appear to be indicating that is not an effective strategy anymore, people overall are too stretched and stressed financially. What comes next is a scary thing to ponder. But it’ll be a new America, that’s for sure.”
Want to insulate yourself from scary stuff (if you believe this stuff)? Build wealth. — Garth
“the real backstop is us”
No, the real backstop is actually the adjustable rate borrowers that can see their interest rates, linked to Prime, skyrocket overnight on the whims of bankers that might be in a state of financial distress.
An awful lot of home equity can be confiscated by a distressed bank, very quickly, when the time arises.
This is what was in the process of happening in 2008-2009. Effectively the banks told “F” that rates would skyrocket if the BoC/CMHC did not help to liquefy their portfolios during the crisis. “F”/BoC obliged through various facilities of the BoC and the CMHC. But if they didn’t, the banks still weren’t in trouble — they simply would have proceeded to bleed customers dry.
US gas consumption down 75% from its peak
http://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=pet&s=a103600001&f=m
recovery or not?
Prices go up, consumption goes down, cars get better. — Garth
Sales in Parksville/Qualicum Beach on Vancouver Island have been really increasing, 117 sales so far in May, it is interesting to note that there were only 17 sales over $500,000, the majority of action being in the mid $300’s. lots of Alberta license plates around but everybody wants small, 1 level homes on postage stamp sized lots…Demographics at work.
Hi Garth,
In light of Keith Marshall’s comments about your blog, could you do (another) post on the KW market?
ie: number of active listings, longer term trends in sales, etc.
Thanks
Edmonton has a huge crisis brewing here.
I have never seen suck a huge amount of empty houses everywhere up to 60% are empty that are on MLS! sign of a crash-too mych housing too few people..
#16 Waterloo Resident on job market in your area…mostly big box stores, fast food chain, janitorial, real estate and health care. Small businessess are closing their doors and the youth are moving either to a bigger city or to Alberta. This has been going on for at least 20 years.
Trouble times ahead.
China’s fuel consumption up 83% since 2004
http://www.tradingeconomics.com/china/fossil-fuel-energy-consumption-percent-of-total-wb-data.html
Prices go up, consumption goes down, cars get better. — Garth
does this apply to china as well?
Very funny. — Garth
ok garth we were talking about consumption not the amount of vehicles I don’t understand how you constantly say Canada is in a state of decline and fudged #s coming from Canada but the US is all true why dont you move to the USA then I’m sure you would do way better there especially since they are in a major recovery even tho the 10y is down from 3.00% to 2.53% so far this year I like your blog but sometimes I really do get surprised by your views (sometimes bordering on silly)
Allow me to make clear how it works 1 car from China consumes 83% more fuel .1 car from USA consumes 75% less in the last decade it isn’t the mileage its people are driving less in the states and more in China because the people from china are now able to spend more since they actually produce things
#199 Mark on 05.25.14 at 3:57 pm
“the real backstop is us”
No, the real backstop is actually the adjustable rate borrowers that can see their interest rates, linked to Prime, skyrocket overnight on the whims of bankers that might be in a state of financial distress.
==============================
Your point about rate hikes is valid, but even savage increases could not adequately replace depositors’ losses in a severe meltdown.
However unlikely might be a Canadian bank failure, it seems really unwise to keep more than $100K in any one chartered bank. If you have so much cash that you are over that limit, you need to pay Garth to diversify your portfolio.
comment # 101 SM
I can read just fine, thanks and comprehend a whole lot better than you obviously.
You are proposing an INTERNATIONAL flight, check the landing fees and departure taxes (ever do that – actually look at the cost of your ticket on A/C , Westjet, etc.?
Comes up right on the website when booking.
comment # 112 Doug From London
Thanks Doug for your comment re my comment at #93, much appreciated.
comment # 117 C E F
No, I described the habits of a group of people.
As per my father, small minded people discuss others meaning specific individuals, i.e gossip.
Perhaps I should have been more exact in my descriptions, but then again, one assumes a certain level of intellect in the reader of such postings. Guess you might be a bit limited there.
#212 Hillbilly on 05.26.14 at 7:32 am wrote
As per my father, small minded people discuss others meaning specific individuals, i.e gossip.
I liked the list your father gave you, HB. I’d add one more category though. Level 0 — people who only talk about themselves. Luckily there aren’t many of them around but we all meet them from time to time.
@ #2 SilverMeridian
Don’t worry about what others say. I am like you and have found very little relevant and trustworthy information regarding the Ottawa area. Anytime you have info to share, is very welcome with me and the rest of us locally here. We all got to stick together as we both know the realtors around here won’t mind selling a POS at inflated rates and home builders can be even worse (still upset Holitzner is wrapping things up while Monarch is building complete dumps off Terry Fox/Fernbank that had the shingling blow off a month and a half ago).
Canadian banks are expanding their business away from residential lending: a good indication that the real-estate party is ending.
Also worth noting: BMO and CM shorts have increased recently, so outside Canada many financial circles are convinced that defaults will happen, otherwise what would make those stocks go down? They were wrong with TD and RY, so it’ll be interesting to see. Two days until BMO and CM report.