The bloat

fat dog modified

How do you eat an elephant? One bite at a time, of course. Just ask CMHC.

If there’s one overriding reason people can’t afford houses anymore (without swallowing a boatload of debt), it’s this federal agency. As I’ve detailed before, its $553 billion in insured mortgages has allowed people without money to buy real estate, since it takes all the risk out of lending. Because of CMHC, bankers will give money to moist virginals with no savings to buy a $700,000 semi at same rate and on the same terms as a move-up, experienced, 45-year-old buyer with 60% to put down.

As a result, the kids fly into bidding wars, inflating prices using money they know they’ll never repay. Also because of CMHC, bankers routinely offer borrowers astonishing multiples of their income to buy houses which have never cost more. (But just try to get $500,000 with 100% security to open a small business and employ two people.)

However, is Canada Mortgage and Housing Corp now changing?

The last few weeks have brought big changes in its lending. No more second property loans. No more borrowings by self-employed or commissioned people without proving their income. And on Friday, we got more. No more CMHC funding for condo builders (affirming a practice pretty much in effect already). And no more loan insurance for any house selling for more than $1 million, regardless of the size of the down payment.

As you know, CHMC already punted seven-figure houses when it comes to the 5%-down crowd. But it still allowed lenders to insure mortgages on expensive homes if the purchaser had 20% or more. That’s now history. And while it affects only 5% or less of the CMHC portfolio, it’s a telling move – the end of jumbo mortgages in Canada. At least, jumbo mortgages the taxpayer’s on the hook for.

Where’s this headed?

Simple. The feds lack the cajones to increase that dumb 5%-down rule (and up the minimum requirement to 7%, as they’ve been discussing), but they’re getting closer to establishing an upper limit on loans. Say, $750,000, or perhaps $600,000. Do the math. See what that does to average prices in Toronto or Vancouver.

***

RUDIN modified

When the elfin deity, F (RIP), walked out of the Department of Finance for the last time, there was some serious unfinished business to take care of. The country was in need of a new bank cop.

The independent-minded and feisty Julie Dickson indicated a long time ago she would step down as head of OSFI (the Office of the Superintendent of Financial Institutions) this summer after seven years on the job. During that time, the banks she regulates have increased their mortgage and loan portfolios in undreamed-of ways, with Canadian households becoming marinated in debt. The economic consequences will likely be major.

F himself said of the position: “It’s a very difficult job and it’s an unpopular job. It’s probably worse than being finance minister.”

Dickson’s been a star. During the GFC no Canadian bank failed or even stuttered. The feds orchestrated a bank bail-out (buying a mass of mortgages from the lenders) and managed to keep it a virtual secret from voters. Now OSFI is all over those swollen mortgage portfolios like a bad virus. Everybody knows the consequences of the next housing correction.

So, who will be the one to inherit this mudder?

The GreaterFool Intelligence Service reports it will be Jeremy Rudin, who is now assistant deputy minister of Joe Oliver’s Financial Sector Policy Branch, a lifer Finance wonk, who also spent time at the Bank of Canada. Rudin taught at UBC and Queens, before becoming a bureaucrat 21 years ago. The Stanford and Harvard grad is considered nicely controllable, which means the Harper government has little to worry about.

“They chose him because he’ll fall in line with the program,” says a departmental insider, “unlike the more independent Dickson.”

It’s consistent with the Big Owe so far.

I mean, do you think F would have allowed 1.99% mortgages and a race to the bottom? I actually miss him.

214 comments ↓

#1 TurnerNation on 06.06.14 at 6:46 pm

An absolutely stunning display of Herbunism on this blog recently.
(Are you now or have you ever been…)

Leftee fact check, verified: Toronto parking control officer working overtime each week, grossing yearly $140,000. For writing parking tickets. Tax increase again this year? DB pension plan? Et tu?

#2 Suede on 06.06.14 at 6:59 pm

Alright, HAM buying alert for you all conspiracy nuts.

http://finance.yahoo.com/news/ipo-nears-alibaba-prepares-employees-004716569.html

20,000 new millionaires.

Just like when Twitter and FB went public and thousands of people became millionaires overnight with stock…they go out and buy BMW’s, Ferrari’s,

“Check real estate in Vancouver, not so much Ferraris and real estate in China,” said a person closely involved with the IPO who was not authorized to speak publicly on the issue.

bahahahaha, this was IN THE ARTICLE

Pair this with the new reality TV show about Chinese high roller women and it will be HAM fever in vancouver for the helicopter guys!

oly moly can’t wait to see this on GlobalTV tonight

#3 Shawn on 06.06.14 at 7:05 pm

High house prices CMHC’s fault?

I dunno. CMHC has been around for some 60 years. House prices kept rising the past four years or so as CMHC tightened up from 40 to 25 years… and introduced qualifying in the fiver even if you take variable.

It’s low interest rates that are the main cause of high prices.

And I suppose in large measure high prices begat high prices. High prices mean no defaults (why default if you have equity in the place?). No defaults mean lenders and CMHC are calm and keep lending.

IF some trigger starts house prices down it could get ugly. If people stop expecting rising prices they will stop pushing them up. If people start to have no equity then defaults will rise and this will push house prices down. Lending would tighten…

CMHC or no CMHC, if the tide starts to turn then it’s anyone’s guess what will happen.

I won’t try to predict it. I will react if it happens. Like trade up if house prices crater. If my house drops from $500 to $250 and I can get today’s million dollar house for $500, I have lost $250 in net worth (no big deal for me) but I would get to trade up to twice the house for half what it would cost me today.

More realistically if I lose $100k on my house but trade up to something $200 better, it might not be such a bad thing. In any case I can react. I would also have the choice of staying put and suffering a fairly meaningless drop in net worth.

I do believe net worth is important. But I also believe changes in the value of my investments are more important than changes in the value of my house.

#4 J on 06.06.14 at 7:07 pm

I’m 32, sold my rental in January and finally have some cash in the bank. What a relief.

#5 Goldie on 06.06.14 at 7:09 pm

I miss F too. He was the devil we knew.

#6 SilverMeridian on 06.06.14 at 7:11 pm

SilverMeridian Greater Ottawa surReal Estate Update

“Spring buyers have come out of hibernation”

http://www2.ottawarealestate.org/home/NewsInformation/LatestNewsRelease.aspx

According to OREB sales are down only 0.3 % in comparison with May 2013. ” The inventory on hand continues to grow, and prices remain stable.” says Randy Oickle, President of the Ottawa Real Estate Board.But how much did the inventory grow in comparison with last year? Well, it looks like spring buyers are not the only ones who came out of hibernation. According to information from some sources, Ottawa’s active listings inventory in May was only some 50 property short of all time record of 10 000 homes for sale. CREA’s own graphs show that last month active inventory has only reached only 9 000 listings though:

http://creastats.crea.ca/otta/images/otta_chart03_hi-res.png

But when compared to last year numbers, it is solid thousand listings more. Months of inventory is record high too, now we are looking at almost 5 months worth of unsold houses. However, is spite of all these factors, Residential Average Price is also growing and has already jumped over $375,000 mark last month. How can the price grow at the same time as sales are dropping and inventory is growing is beyond me…

“Although the residential property class is performing as anticipated, the market for condos has been a bit sluggish,” says Oickle. “We’re seeing a 19 per cent increase in the amount of inventory on hand over this time last year and unit sales are down 7.1 per cent. If you are looking to buy and hold, the selection and prices are attractive.” “The average sale price for a condominium-class property was $280,661, an increase of 6.9 per cent over May 2013.” So to sum it up, condo inventory is up by almost 20%, sales are down 7%, but the price is up by almost 7%! Does that look like a predictable pattern which free-market economy should follow? Nortel/Bre-X moment anyone?

#7 manish on 06.06.14 at 7:12 pm

First

#8 Babblemaster on 06.06.14 at 7:24 pm

So what! The Feds will quickly reverse course if the price of RE really does drop to any extent. They’re just pretending to stabilize things so they can say it’s not their fault if the s&*% eventually does hit the fan.

#9 Freedom First on 06.06.14 at 7:27 pm

Get up from wherever you are. Go and look in the nearest mirror. What you see is your consumer protection. Read all of Garth’s Blog and the comments. The comments also expand on what Garth is teaching in a wide variety of ways. Don’t worry about the people who comment on here that live in the financially insane asylum. In a very short time you will easily be able to see Garth is a very good financial adviser, and separate the sane people from the insane people in the comments, as there is a lot of house salespeople and other RE pumpers who post on here.

1st lesson you will learn from this Blog. Having all of you $$$$$$ in one a$$et is financial insanity. No exception.

#10 Lurcher on 06.06.14 at 7:27 pm

“I actually miss him.”
Sometimes the people who get under our skin the most are the ones we miss the most when they are gone.

#11 mousy on 06.06.14 at 7:35 pm

Yep, I miss the ED too. He had personality. Totally did not agree with most of his policies. The big OWE is like the big yawn.

#12 TurnerNation on 06.06.14 at 7:37 pm

^today’s pic: the person is the taxpayer, the dog is CMHC.
(Don’t buy a pig in a poke?)

#13 the jaguar on 06.06.14 at 7:44 pm

“They chose him because he’ll fall in line with the program,” says a departmental insider, “unlike the more independent Dickson.”

It’s always the men who cave in to the pressure, desperate to be “one of the guys”, “take one for the team”, “like me, please, please, please”.
Women are like black bears protecting their cubs, used to taking shit and know they can’t please everybody.

We’ll miss you, Julie. You done good.

#14 Dean Mason on 06.06.14 at 7:44 pm

To Shawn #3

It is over and get used to a real estate market going down.

Money morons and their debt junkies will feel it over the next 12 to 18 months.

People are so financially illiterate and clueless when it comes to managing their personal finances that if it was not for the CMHC, there would be at least 30% cheaper Canadian house, condo prices.

This is not a Canadian real estate market based on income growth and increasing job opportunities.

It is all based on giving cheap, mortgage interest rate money to people who have no idea what they are doing.

#15 AisA on 06.06.14 at 7:52 pm

The only way it ends is with a crash, for the 1000000’th time.

#16 sheane wallace on 06.06.14 at 7:58 pm

DELETED

#17 Smoking Man on 06.06.14 at 7:59 pm

Put a pic of the retarded dog on my blog… He’s doing one of his spin-o-ramas..

Never been so entertained in a long time…

When I came home the bastard is in my lazy boy..

Obviously he’s voting liberal..

#18 Piketty Pocket on 06.06.14 at 8:26 pm

In the new world order, stocks and RE always go up. Macro data no longer matters.

#19 JO on 06.06.14 at 8:39 pm

one of the things I do is lend a lot of money, most of RE related. The majority of my clients are public sector employees and retirees. But i also have clients who come to us from brokers who are mostly non PS. From my perspective, here is what I have noticed over the last 2 yrs or so:
-the typical buyer has no more than $ 20-30K in the bank. Many use borrowed money from relatives. There are a minority of buyers who are solid. Less than 2 out of 10.
-the typical mortgage is between $ 450-700. I have done about 5 mortgages of 700-900K this year.
-CMHC/Genworth (NHA policy) are directly causing the greatest debt bubble in history and fooling the average person that they are rich. They are actually being taxed and helping to impose that tax on the prudent and vulnerable. The purpose of the NHA is to inflate RE.
-Neo Liberal economics, AKA Junk Economics. I describe it as: An economic policy designed by and for the primary benefit of the FIRE sector and government that claims to be free market but in practice wants to be free from market forces.
-the rate of growth in debt vs ROG in GDP, productivity, and income leave no doubt about what awaits us over the next 5-10 yrs. The only outcome is eventual collapse and a shocking collapse in the inflation adjusted standard of living. This has already started in most of the developed world including Canada since 2000. Accelerated in Europe and US since 2007. Problem is we can easily go into the final collapse with Toronto houses at 2M and property taxes at 10-12K / yr for the average home and a DOW at 30 K
-Cost of government is out of control. In the final stage, taxes and currency debasement will consume most of the little wealth left and the system will simply “reset”. Corruption is out of control, especially between politicians and large global corporations and PS unions.
-the public is for the most part financially illiterate and cannot comprehend the we are in a global systemic crisis. If we were not, the ECB would not go negative (negative rates are a wealth confiscation scheme) and the Bank of Japan would not be printing huge amounts of money, etc. The signs of collapse are all around us. The US will be the last domino to fall. No one knows when.
-the great news is once we pass this, the world will probably enjoy a great period of growth and technology and the new economic model will not resemble this. No one knows when. Might even take until the 2030s.
-Be cautious, be liquid, be positive. Minimize debt but if you have the risk tolerance, buying cheap assets during the next major decline will likely be smart as long as you lock in the mtg rates.

#20 TO Renter on 06.06.14 at 8:42 pm

#17 Put a pic of the retarded dog on my blog
——-
Bastard dog indeed, but very handsome. What is he mixed with? That may explain the split personality and chasing of its own tail.

#21 nonconfidencevote on 06.06.14 at 8:47 pm

History will decide if the Elfin Deity truly “F”ed up.

#22 Shane on 06.06.14 at 8:50 pm

Garth, what if I have more then 20 percent ,say 30 percent to put down on a home and I wanted to buy a 1 million dollar house would CHMC give me a mortgage?

#23 sheane wallace on 06.06.14 at 8:53 pm

What I said in very direct manner is to run for the hills and to save your money and capital for the sake of your children.

You think blaming H, F and Joe the Olive would help your children?

#24 X on 06.06.14 at 8:55 pm

If the average downpayment is 7%, the average taxpayer should not insure a mortgage that is less. this should be done to protect the bottom feeders from signing on for a lifetime of indebtedness.

Same for the average Canadian home price….why does a Canadian taxpayer pay taxes to insure mortgages that are greater than the average Canadian home.

#25 sheane wallace on 06.06.14 at 8:56 pm

#18 Piketty Pocket on 06.06.14 at 8:26 pm
In the new world order, stocks and RE always go up. Macro data no longer matters.

…………………
Stocks will go up for a while since there is no other place to park you money (except gold).
Real state is doomed as it is credit driven.

When credit dries and it will if we revert to cash payments a SFH would be 200-250 k in Toronto (current currency purchasing power).

And revert to cash payments we will since once the things hits the fan there would be no saving of the current monetary system, it would be forced upon us.

#26 sheane wallace on 06.06.14 at 9:10 pm

#19 JO
…………………………….
this seems written by me, absolutely agree, this is why I diversified out of Ca dollar and economy at exactly the right time (peak Ca dollar)

But your are wrong on Europe. Germany is on fire and Europe has very bright future.
BRICS will do even better they will simply shine.

Credit driven west is going down the toilet.
Canada? Who cares, it is 2 soon to be 1 % of the world economy.
Where else people live in basements.

Saying that the public is financially illiterate is putting it very mildly. In my daily life I have a feeling that I am surrounded mostly by complete idiots who speak in very deep-trustworthy voices and in assuring manner utter nonsense.

Now I understand Smoking man and the need to drink…

#27 Nemesis on 06.06.14 at 9:21 pm

#OneBiteAtATime. #FridayNightCocktailHourHomageToAuthenticPaeëons. #&OtherHeroines,YouKnowWhoYouAre

http://youtu.be/4XWxyQVqP-M

#ForTheRestOfUsThereAreMotorcycles.

http://youtu.be/hKKB7pV0uaU

[NoteToAll: Just between us SaltierDogz, it didn’t take a lot of convincing to encourage DameCatFood to brandish her RidingCrop.]

#28 Madeline on 06.06.14 at 9:22 pm

This idea of women as victims falls on deaf ears when you spend year after year on inflated houses caused by bidding wars.

Women in Toronto are denied the basic human need of shelter because some douche male keeps on outbidding the female for a home. This is sexist by the real estate market.

Caucasian women in Toronto are forced to pay more for their houses, and as our paycheck is 55 cents less than a dollar earned by a male of privilege, we have to work longer hours in a sexist workplace environment. A sexist work environment which pays us less than men and men stare rape us and look at our butts for their perverted minds.

I had to go to the gym to tone my butt, and I do it for MYSELF and no loser! Never! Men are scum. I wouldn’t even let a male go near my anus because it’s my body! My anus is cleaner and no men in Toronto deserve it!

#29 4 AM Sunrise on 06.06.14 at 9:22 pm

One more thing about outsourcing from yesterday:

When I call a 1-800 number and I want to talk to somebody in Canada, I press 2 for French. (I’m bilingual). There’s maybe a 40% chance that the agent is a bilingual Anglophone in Ontario anyway.

So I’m watching this Bollywood movie the other night, and there’s a throwaway storyline involving a kidnapped French tourist. The gangster’s daughter speaks pretty good French and translated for him.

Yup. They’re learning French. Not that they didn’t speak any before, what with the French legacy in Pondicherry, but the youth are expanding their horizons. I bet they’ll even learn to speak with “l’accent de chez nous”, too. And maybe in 5-10 years those “Bilingual Call Centre Representative” jobs may be shipped offshore.

#30 4 AM Sunrise on 06.06.14 at 9:24 pm

Oh yeah, the gangster was complaining to his daughter about not understanding what she was saying, and made some comment about how, “oh, you speak the *new* English now?”

#31 sheane wallace on 06.06.14 at 9:28 pm

And not to mention the crap we buy at the stores, the GMO food, glucose-fructose syrup (both strictly prohibited in Europe, had the chance to watch German TV lately, they are prohibiting american chocolates in Europe…) and the growing cancer rates, one of 3 North Americans will develop cancer in their lifetime while working crappy serve-titute job.

And kids freshly permanently unemployed out of University (if lucky to get in due to competition),

while the rich are supplied from organic farms.

#32 Financial Freedom at 40 on 06.06.14 at 9:36 pm

#22 Shane
Yes, you can get a conventional mortgage. No, the CMHC will not back-stop it by providing insurance that the bank passes the costs through to you for. You don’t qualify for government insurance as you’re not considered at high risk of default for a lender.

#33 takla on 06.06.14 at 9:36 pm

debt,cmhc,interest rates,the Fed….bla,bla bla…putting this aside for a moment…question Garth…..Probably still tender but are you rideing that piece of Milwaukee iron yet???Cruisin into work at 5;30 am daily here on the beautiful west coast all week has me thankin the creator…live to ride dude!

#34 Mister Obvious on 06.06.14 at 9:38 pm

#28 Madeline

Maybe it’s time Madeline was shown the door.

#35 Smartalox on 06.06.14 at 9:49 pm

@4am Sunrise,

It’s already happening. I called Air Canada about a lost bag a couple 7 years ago, and chose the French option. When I chatted up the operator, she mentioned (in French) that she was speaking to me from India. I was impressed, her accent was actually pretty good!

#36 james on 06.06.14 at 9:50 pm

“During the GFC no Canadian bank failed or even stuttered. The feds orchestrated a bank bail-out (buying a mass of mortgages from the lenders) and managed to keep it a virtual secret from voters.”

Let’s not forget the Canadian banks were also accessing funds from the US gov and Federal Reserve. The public was not told about that either.

#37 Big Al (New) on 06.06.14 at 9:52 pm

Madeline seems to have multiple personality disorder, having been on here with the same shtick but under different names in the last little while. She apparently has a very clean anus as well, you always learn something new about people if you just listen.

#38 saskatoon on 06.06.14 at 9:54 pm

these pathetic comments are awesome!

highlights:

– “My anus is cleaner and no men in Toronto deserve it!”

– “In my daily life I have a feeling that I am surrounded mostly by complete idiots who speak in very deep-trustworthy voices and in assuring manner utter nonsense.”

– “one of the things I do is lend a lot of money”

and finally:

– “If my house drops from $500 to $250 and I can get today’s million dollar house for $500, I have lost $250 in net worth (no big deal for me) ”

classic.

#39 Basement dweller on 06.06.14 at 9:54 pm

So let’s recap
Years ago they created a rule that second homes needed
Needed 20% down , but apparently that rule needed
Further tightening
Later they said no insurance for homes over a million
Dollars but again that needed further tightening

I don’t get it. no wondered RE is unphased with all the previous rules… Because they weren’t really enforced.

To me that’s the bigger story, previous rules had no substance.

#40 Daryl Allen on 06.06.14 at 9:57 pm

More ammunition for GT:
House of Debt: How They (and You) Caused the Great Recession, and How We Can Prevent It from Happening Again, by Atif Mian and Amir Sufi, University of Chicago Press

#41 irrational protuberance on 06.06.14 at 10:04 pm

#34 Mister Obvious

I concur. Preferably the back door.

#42 takla on 06.06.14 at 10:04 pm

re #28 MADiline…let it go girl…google{not male or female }is your friend …put it to work and find a good psychologist willing to go into the dark,tainted recesses of your mind to help heal your man hateing Ideology…Ps..its great having the ability to stand to pee!!

#43 Old Man on 06.06.14 at 10:09 pm

#28 Madeline – I have a solution for you – MOVE!

#44 jess on 06.06.14 at 10:10 pm

David Cay Johnston: The Perils Of Our Growing Inequality
http://ineteconomics.org/new-economic-thinking/david-cay-johnston-perils-our-growing-inequality

=

Piketty Responds in Detail to FT Criticism
http://ineteconomics.org/blog/institute/piketty-responds-detail-ft-criticism

#45 Teacher's Ass-istant on 06.06.14 at 10:21 pm

I can’t understand why CMHC was ever insuring condo builder’s loans. My understanding of it’s purpose was to help returning vets get a home, seems like a good thing to do. Then it was expanded to everyone buying a first home, at least essentially, also not a bad thing.

I assume through lobbying by the banking industry it has been ever expanded since inception. Then it became a political tool where the rules were ever changing to keep people buying real estate and the government claiming credit for what a great job they were doing with the economy. F pulled back on some of that, eventually, knowing that it was way out of hand. I’ll bet that was a big battle with Harper.

It’s astounding how this government claiming to want such a free market has manipulated things so much. If they are talking about a lower cap I say cheers, get at her. It needs to be lower then wht you say is being contemplted though, maybe $500,000 although really lower than that would be better. Realistically in the current enviroment that is probably as low as you could go. 5% really is to low but again that was done as a reaction to the prices. A further manipulation that I think was politically motivated.

I’m no expert but that is the way it looks to me.

#46 Ret on 06.06.14 at 10:22 pm

A brilliant political move today by CMHC. All the sheeple heard is that million dollar homes will no longer get mortgage insurance.

Who really cares about rich people who live in million dollar homes anyway? Owners of sub-million dollar properties mistakenly see this announcement as a non-event.

Banks will be looking for huge down payments on those $1M plus properties if they are not back stopped by CMHC. The bank’s potential losses on a home in that price range if they have to foreclose would be considerable.

As the million dollar homes get harder to sell, sans CHMC insurance, price cuts will invariably happen and this will affect the homes listed at $900,000. Connect the dots on this as price reductions trickle down through the whole market.

Personally, I’ll be waiting until the smoke has cleared to move up as will many other qualified potential buyers of upscale properties. Guess what that will do to prices?

Today’s announcement could be the most significant CMHC change to date.

#47 Chickenlittle on 06.06.14 at 10:30 pm

Re: Madeline…

I feel victimized just by reading your post.

Most people buying homes are COUPLES. If you don’t know what a “couple” is just ask any non-feminist, clean shaven woman. They are the ones who actually look happy, clean, and odour-free. They may even be wearing a bra.

#48 Anthony on 06.06.14 at 10:34 pm

#29 4 AM Sunrise on 06.06.14 at 9:22 pm

Not sure what you’re on about.. but yes, call center jobs for cheaper French speaking people is outsourced to Romania.

Aim higher than working in a call center.

#49 Teacher's Ass-istant on 06.06.14 at 10:36 pm

Hey Madeline are you the same woman who was railing in fear after that mentally ill repribate in California went on his killing spree? Are you typing these messages from under your bed on a laptop?

You should perhaps read your own posts and then realize that you really need to talk to a mental health professional.

I’m a man and you know they break down into groups. Some love womens breasts, some legs and some bums. I suspect that you work that hard on yours then wear a short tight skirt to ensure men in the third category look then then tell them what pigs they are for looking.
I don’t know what happened to you but I’m sorry. It is not every man though. Go talk to someone about it.

By the way those tiny little teenage boy like bums on a woman aren’t appealing. So don’t work to hard at it.

Enough already. — Garth

#50 Calgary Car Guy on 06.06.14 at 10:37 pm

Garth, I’ve been a regular reader of your blog for about four years now. Always great info and sometimes great comedy. The comedy in tonight’s comments have given me the best laughs ever from this blog. A classic.

#51 45north on 06.06.14 at 10:42 pm

The feds lack the cajones to increase that dumb 5%-down rule (and up the minimum requirement to 7%, as they’ve been discussing), but they’re getting closer to establishing an upper limit on loans. Say, $750,000, or perhaps $600,000.

so let’s suppose I bought 325 Perth Avenue for $848,000

http://www.greaterfool.ca/2014/01/23/the-wars/

and suppose I have a mortgage of $750,000. The good news is that I can renew my mortgage but the bad news is the value of my house is capped at $848,000

#52 Nemesis on 06.06.14 at 10:46 pm

#AndNowForSomeTrulySeriousShit. #WhatTheyForgotToShowYouAboutTodayInHistory. #InBetweenThePhotoOps. #NeverTheirKids. #GetIt?

http://youtu.be/lCEFOx5Hc2Y

#53 One More Move on 06.06.14 at 10:55 pm

#28 – commenter should be banned. And just for her – this thought – a great many houses are purchased by couples, and it is often the woman who leads the charge to buy a house, not the man.

#54 Chickenlittle on 06.06.14 at 10:59 pm

Nosty 666:

I read and re-read that David Graeber article.
It makes so much sense: from an early age we get used to pointless busy work assigned to us by teachers and it just continues into adulthood in the form of BS jobs.

It always has annoyed me that I have so many friends who get paid top dollar to push papers, while I apparently work because I love kids and that in itself should be reward enough. Sigh.

Good link. Thank you!

#55 TO Renter on 06.06.14 at 11:03 pm

“Consumers were already required to have 20 per cent down for million plus homes, and insurance was not required for these properties,” said Ann-Marie Lurie, chief economist with CREB. “However, some lending institutions would still buy insurance for these properties. The impact will ultimately depend on the banking industry and if they will adjust lending requirements given that the low-ratio insurance product is no longer available.”

P.S.: “Disrespectful commenters will not be published” – ? Would have preferred the media not to publish Elliott R’s disturbing 140 pgs either. Sad generalizations and blame we all (m/f alike) seem to have to endure from a few who feel powerless. #solidarity

#56 Smoking Man on 06.06.14 at 11:09 pm

#28 Madeline on 06.06.14 at 9:22 pm

DELETED

#57 OttawaMike on 06.06.14 at 11:13 pm

#33 takla on 06.06.14 at 9:36 pm
Not much Milwaukee left in the HDs. Fiberglass fairings, some engines and the locks. Most are built in York Pa and Kansas City Ms.

Plus, the last time I checked Turner rode a metric cruiser. You know–something reliable that won’t cause carpal tunnel syndrome or handle like a broken wheel. barrow.

#58 4 AM Sunrise on 06.06.14 at 11:14 pm

#28 Madeline on 06.06.14 at 9:22 pm

It’s not men who are outbidding you. It’s those annoying double-income couples (of all gender combinations). Being single sucks! Society is conspiring against single people through everything from single supplements on packaged tours to bosses who guilt-trip you into doing overtime on grounds that you don’t have a family. And now with this new hook-up culture, punishing divorce laws, and unintentional common-law-dom, fewer straight men want to be in relationships. And that’s what’s screwing you out of your entitlement to this overpriced RE market. Go complain about that.

#59 Intuitive Missus on 06.06.14 at 11:15 pm

#14 – Dean Mason

Your explanation is absolutely spot on. Thank you for your concise description of exactly why the RE market is in such a state.

#60 Bottoms_Up on 06.06.14 at 11:25 pm

#34 Mister Obvious on 06.06.14 at 9:38 pm
———————————————–
Yes Garth please remove post #28. It is sexist and bigoted.

#61 Bottoms_Up on 06.06.14 at 11:28 pm

#22 Shane on 06.06.14 at 8:50 pm
—————————————–
I think the new CMHC rules means that a bank can still decide to give you a $700,000 loan for a million dollar home, but they now have to take the risk (instead of the Canadian taxpayer). So this will mean having to use another insurer, or the bank may require proof of other assets?

#62 Retired Boomer - WI on 06.06.14 at 11:40 pm

#19 JO

Good lucid post. Agree totally. We in the US are seeing the same type of action that led us down the road to folly in 2008. “Too BIG to Fail means just too DAM Big!!
Break up the Mega-banks, and restore Glass-Stegall.
my .02 worth for today.

#28 Madeline

So you have clean glands, who cares?? Tell it to a dog.

#63 NotAGreaterFool on 06.06.14 at 11:42 pm

Too little, too late by CMCH. Death by 1000 cuts? Not at this pace.

At $1MM for a SFH in Toronto and Vancouver, what political party would oppose raising the down payment requirement?

With the blazing hot housing market of the last several years, opportunists have made out well; so have the FEDS. Time for Harper etc. to do the right thing including ignoring the self serving realtor lobby – especially as rates still low (thus the market has NOT hit the ceiling or tipped over – yet)

#64 Nomad on 06.06.14 at 11:43 pm

Interest rates are low but I refuse to buy those sad Toronto semis. However I do like the idea of taking advantage of this rate to buy a european index ETF, since their marker unlike ours and the US is 15% below 2007, plus the ECB just starting some stimulus measure.

Any of you know if there’s a way to take a 100k bank loan paying the same interest as a mortage (2-3%)? I want to “marinate in debt” short term!

#65 BG on 06.06.14 at 11:46 pm

Thanks to this blog I’ve started investing last December.

I started with a Canadian Potato Couch portfolio because my net worth is low and I wanted to start simple anyway.

So far I’ve made 6.74%
It was just too easy and I’m afraid this could be wiped out as easily.

Wait and see.

#66 KommyKim on 06.06.14 at 11:48 pm

RE: #34 Mister Obvious on 06.06.14 at 9:38 pm
#28 Madeline
Maybe it’s time Madeline was shown the door

It looks like she already found the back door.

#67 Glen B on 06.06.14 at 11:48 pm

#28 Madeline = Mrs Smoking Man perhaps?

#68 Martin 9999 on 06.06.14 at 11:49 pm

#28 Madeline on 06.06.14

DELETED

#69 Nemesis on 06.06.14 at 11:53 pm

#LateNight[EarlyMorning?]DanceParty.
#ForSaltierDogz.

http://youtu.be/DVJkfXeTs9Q

#70 Cici on 06.06.14 at 11:55 pm

#28 Madeline

Thank you for that crazy, cool post. I don’t agree with everything you said, but I’m glad you said it anyway.

I definitely don’t think men are all loser scum though, and hope you will one day come to that realization too, while still watching your back and keeping an eye out for the ones that are.

As for your anus, not only will keeping it dick-free ensure that it is cleaner, you’ll fart less when you are old. And, you’ll reduce your risk of getting a nasty STD. So kudos to you young lady, but try not to be too, too hard on the guys…

#71 milenial1982 on 06.07.14 at 12:02 am

What’s the guy with the glasses in the middle of the picture grinning about? Must have just let one rip…

#72 Spectacle on 06.07.14 at 12:18 am

Thanks Garth , nice overall log tonight .

During the GFC no Canadian bank failed or even stuttered. The feds orchestrated a bank bail-out (buying a mass of mortgages from the lenders) and managed to keep it a virtual secret from voters.

I like info like that….appreciated Garth .

Also, I kind of liked the post by #19 Jo .

I used to insure a lot ( huge massive amounts ) of money. Amazing insider perspective that provides one with. Paul Sobieski has personally financed over 3 billion in BC real estate! Yikes , huge dollars.

Night all

#73 For those about to flop on 06.07.14 at 12:23 am

WOW! I have had some comments not published recently ,maybe I should have talked about “clean anuses”!

#74 WhiteKat on 06.07.14 at 12:37 am

I suspect that perhaps Madeline is not actually for real.

#75 WhiteKat on 06.07.14 at 12:39 am

@ChickenLittle, Not all feminists hate all men – just some men.

#76 bubu on 06.07.14 at 1:01 am

“they’re getting closer to establishing an upper limit on loans. Say, $750,000, or perhaps $600,000.”

I think this is your dream Gart.. .nobody is crazy to lower the upper limit to these values.

I think we’ll see soon the 40y mortgages back to keep the prices high and deal with the interest rate increase.

#77 Today's Sunshine Girl Lesson on 06.07.14 at 1:14 am

Here is where you want to focus your attention. Never mind houses and investing and such. Be an esthetician and buy a million dollar car.

SUNShine Girl Desiree, 24, is headed to school to become an esthetician. Her dream car is a Bugatti Veyron (top speed, 431 km/h), but the Star Wars nerd in her longs for a spin in the Millennium Falcon. Because even a Bugatti can’t make the Kessel Run in less than 12 parsecs!

#78 Nemesis on 06.07.14 at 1:52 am

#Wheaties!BreakfastOfChampions. #EspeciallyWhenJulieLee”sCookinForYa.

http://youtu.be/MxoNAyPU9m4

#Egads!WhatEverWouldEuellGibbonsSay?

http://youtu.be/QffEYYotXIk

[NoteToSaltierDogz: “Eat a Beaver… save a Tree.”… if not mistaken, I do believe that was the CorrectColloquial syntax.]

#79 Rabbit One on 06.07.14 at 2:17 am

Re: CMHC insured mortgage with >20% Downpayment

Did you know you don’t need bank appraisal to get CMHC Mortgage? CMHC uses their own (formerly called) Emilli system.

Some properties needs CMHC insurance to get bank mortgage, not because your downpayment is belowe 20%, but because of the structure of the building, square footage below bank’s lending minimum, etc etc.
whatever the reason.
Or borrower can simply apply for CMHC low-ration mortgage by choice.
(they will take it. insurance premium for borrower is low, too)

I know the case where Van West old timer detached house didn’t pass the regular appraisal, and buyer got the CMHC low-ratio mortgage.

#80 goldie on 06.07.14 at 5:37 am

half of americans can’t afford their house:

http://www.marketwatch.com/story/over-50-of-americans-struggle-with-home-affordability-2014-06-03

#81 I'm confused on 06.07.14 at 7:23 am

Re cmhc new rule. What does this mean for those that will need to refinance their current variable loans from this year?

#82 Realtor # 1 GTA on 06.07.14 at 7:25 am

Private insurance companies will pick up the demand.

Like previous changes — it will have no effect on RE market

#83 OttawaMike on 06.07.14 at 7:35 am

Garth,

You never did say what replaced the VTX 13.

I have been too busy to ride much this spring but I intend to spoon on some new tires this weekend and add a few miles to the dual sport. Maybe hit the Adirondacks.

The beauty of a dual sport is that one can change their own tires and not be at the mercy of incompetent stealerships.

#84 Hillbilly on 06.07.14 at 7:36 am

Madelaine – comment # 28

W T F ???????????????????????

#85 Stickler on 06.07.14 at 7:50 am

Am I the only one that thinks the government (my tax $) should not ever insure a 5% down house purchase?

If you can’t put 20% down, you can’t afford it.

Instead of trying to stimulate the economy via house buying schemes (that result in higher house prices), how about doing something that will last and actually build a better future?

#86 Bottoms_Up on 06.07.14 at 8:05 am

#65 BG on 06.06.14 at 11:46 pm
————————————
You could always use stop-losses to limit losses and lock in gains.

Or, Garth’s method would be to rebalance and buy more, if things go down.

#87 Sean on 06.07.14 at 8:06 am

#28 Madeline on 06.06.14 at 9:22 pm

…I had to go to the gym to tone my butt, and I do it for MYSELF and no loser! Never! Men are scum. I wouldn’t even let a male go near my anus because it’s my body! My anus is cleaner and no men in Toronto deserve it!

—————

Thank you for not deleting this, most excellent, comment, Garth… lol!

#88 Bottoms_Up on 06.07.14 at 8:12 am

#28 Madeline on 06.06.14 at 9:22 pm
—————————————
Garth, this poster should be banned. And, revealing their location/identity could go a long way into understanding their motivation here.

“douche male”

“male of privilege”

“sexist workplace”

“sexist work environment which pays us less than men”

“men stare rape us”

“look at our butts for their perverted minds”

“Men are scum.”

#89 TS on 06.07.14 at 8:45 am

#28 Madeline on 06.06.14 at 9:22 pm

Please go away. You add nothing worthy here with your vile and disgusting comments.

#90 Joe on 06.07.14 at 9:15 am

Yes F would have allowed 1.99% mortgages, he is the one who allowed 40 year/zero downpayment mortgages and of course the interest rates raced down to the bottom with him at the helm! I don’t think that tinkering a few CMHC policies is going to have a huge effect — they began modifying them years ago and prices are still increasing with low rental vacancies.

#91 Ayn Rand Army on 06.07.14 at 9:17 am

#74 WhiteKat on 06.07.14 at 12:37 am

I suspect that perhaps Madeline is not actually for real.
——

I’d have to agree. The posts by Madeline and Alicia are just to nutty to be real. Funny as hell tho and getting a great reaction from the posters.

#92 Dual Citizen In Canada on 06.07.14 at 9:46 am

#74 WhiteKat on 06.07.14 at 12:37 am
It was a troll and some people got hooked. No wonder Canada has some of the best phishing in the world.

#93 Lala on 06.07.14 at 9:50 am

Alicia, Carly, Madeline marry me, I want them all. CMHC please help me to provide some shelter for my wifes.

#94 eddy on 06.07.14 at 10:08 am

CMHC is a proxy printing press for the Federal government. None of these collateral loans need to be insured, but if the banks and government repeat it often enough, people believe it.
I think it should be abolished.

#95 Cowpoke on 06.07.14 at 10:13 am

IG and 1.99% mortgages. Its called ‘get your foot in the door’. Get the cows in the barn and milk them. Financial war is like real war, its all deception.

#96 Old Man on 06.07.14 at 10:29 am

The Toronto Star highlights a recent sale for $315,000 at 88 Charles Street East. Nice condo; very little turnover; solid neighbourhood; but no parking for this boutique building. This is a great case study because the location lacks transportation facilities more or less as a vector. Now, who would buy this condo? I have a couple of theories, so what do you say?

#97 Bubblicious on 06.07.14 at 10:39 am

Alicia, Carly and now Madeline.
Holy crap. Be afraid, very afraid.

#98 Alberta Ed on 06.07.14 at 10:44 am

It’s always a disappointment when a government becomes more concerned with staying in power than its citizens. We saw that with Chretien, who never hesitated to place personal and Liberal Party interests before the needs of the country. Now, we see the ‘Conservatives’ falling into the same pattern. Sad.

#99 Bubblicious on 06.07.14 at 10:44 am

Question here, I need to be edumicated.
Why would someone want or need CHMC insurance if they are putting more than 20% down?

Insurance protects the lender, not the borrower. — Garth

#100 crowdedelevatorfartz on 06.07.14 at 10:45 am

@#28 Madeline

Bwahahahhahaaahhahahaha. Havent laughed that hard in ages! Thank you.

It must be a challenge hating 50% of the population. Seek help my misandrious friend, or find a copy of this book.

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

It espouses every paraniod rambling thought you may have ever had and expands on it. Enjoy.

It was written by Valerie Solanus in 1967.
Before she attempted to kill Andy Warhol in 1968 for “stealing” her play, titled (ironically enough, in this instance) “Up Your Ass”.
Many people at the time believed she shot Warhol to “become famous” and increase book sales.
It worked.
She was diagnosed as a paranoid schizophrenic and spent 3 years locked up……..a year for each bullet pumped into Warhol

#101 Victor V on 06.07.14 at 10:58 am

CMHC drops mortgage insurance for condo developers

http://www.theglobeandmail.com/report-on-business/economy/housing/cmhc-drops-mortgage-insurance-for-condo-developers/article19040448/

Canada Mortgage and Housing Corp. says it will no longer offer mortgage insurance to developers to finance the construction of new condo buildings.

The Crown corporation has not actually provided any of the controversial insurance since 2011, but is now officially removing the product. It was controversial because the insurance made it easier for condo developers to finance new projects, but the Bank of Canada and economists have been warning that there’s a risk too many new condos are being built in cities like Toronto.

#102 robert james on 06.07.14 at 11:06 am

I wonder how many of these families ended up in Canada ?? http://www.scmp.com/news/china/article/1527045/guangdong-cracks-down-hundreds-naked-officials

#103 Alex n Calgary on 06.07.14 at 11:21 am

Another great post Garth! I think its time to upgrade your Blog hosting software though, we need to be able to organize comments on local situations into groupings and make replys, the information in comments is too hard to look at, time to get serious buddy!

Meanwhile how high does the sprial go? I wonder sometimes if prices will just flatline for years and years, and the construction faltering spiral won’t happen, alas!

#104 maxx on 06.07.14 at 11:42 am

Another year of this destructive policy will only serve to crystallize voter resolve.

#105 mm on 06.07.14 at 11:46 am

Simple. The feds lack the cajones to increase that dumb 5%-down rule (and up the minimum requirement to 7%, as they’ve been discussing), but they’re getting closer to establishing an upper limit on loans. Say, $750,000, or perhaps $600,000. Do the math. See what that does to average prices in Toronto or Vancouver.

I wish this were true Garth, it would be great if it was. People are simply maxed out with the mortgages. Vancouver has businesses closing everywhere, yet the housing market is completely robust. I wonder about the future of this city.

#106 maxx on 06.07.14 at 11:51 am

#13 the jaguar on 06.06.14 at 7:44 pm

Hear, hear!

One more: “Thank you sir, may I have another.”

#107 jen on 06.07.14 at 12:11 pm

And no more loan insurance for any house selling for more than $1 million, regardless of the size of the down payment. – Garth.

That only represents 3% of CMHC portfolio. Hardly significant news. People who buys 1M+ homes are well off to begin with.

You underestimate the size of this segment or the trickle-down effect on the market. The average SFD in Van and 416 now costs a million. — Garth

#108 TurnerNation on 06.07.14 at 12:20 pm

Life at the bottom of the pyramid. The elites unleash a trio of stump candidates in ON who cruely taunt us with promises of millions of jobs. This is economic terror, make no mistake. As the next layer higher busies itself turning us into a 2nd World country…by pledging our cash as ‘aid’ to corrupt 3rd world regimes.
Anyone fancy a ride in Sea King?

Traders know markets move with technical indicators in the short term, fundamentals take hold over the longer term. CMHC’s changes are fundamental in nature. A stream of hormonal bidding wars are not.

#109 Ayn Rand Army on 06.07.14 at 12:45 pm

#105 mm on 06.07.14 at 11:46 am

Simple. The feds lack the cajones to increase that dumb 5%-down rule (and up the minimum requirement to 7%, as they’ve been discussing), but they’re getting closer to establishing an upper limit on loans. Say, $750,000, or perhaps $600,000. Do the math. See what that does to average prices in Toronto or Vancouver.

I wish this were true Garth, it would be great if it was. People are simply maxed out with the mortgages. Vancouver has businesses closing everywhere, yet the housing market is completely robust. I wonder about the future of this city.
——–

um hmm, Check this out,

The Fed Won’t Let the Economy Heal,

http://www.zerohedge.com/news/2014-06-06/fed-wont-let-economy-heal

This is what’s truly happening out there, everywhere.

Only the most robust and necessary businesses are currently still surviving, so far…. and even fewer are growing.

#110 nancy on 06.07.14 at 12:53 pm

Vancouver is like a drugged-up hooker in Las Vegas Jonse-ing for her next hit. China is the John she’s anxiously waiting for to saddle up and throw a few bucks down on the dresser in the morning.

#111 Hickster on 06.07.14 at 12:55 pm

Yep the CMHC is the single largest threat to our economy. It should be eliminated. The reason for its founding no longer exists, all it does is serve as very own Freddie and Fannie

#112 nancy on 06.07.14 at 12:57 pm

DELETED

#113 dan on 06.07.14 at 1:01 pm

You underestimate the size of this segment or the trickle-down effect on the market. The average SFD in Van and 416 now costs a million. — Garth

You don’t require insurance anyway when you put 20%. What is the big deal? Private insurance or banks will just pick up the slack. With rates to remain low for years to come it is very little risk.

You do not understand what CHMC insurance means to lenders. — Garth

#114 TurnerNation on 06.07.14 at 1:23 pm

If you are going to spend 600k-800k on a semi this is the one. Steps to Forest Hill village and Cedarvale ravine. Like 1 min walk to each, that’s it. Quiet dead end. I know this street.
Unrennovated.

http://beta.realtor.ca/PropertyDetails.aspx?PropertyId=14450382&CultureId=1

#115 triplenet on 06.07.14 at 1:28 pm

………
There are four fundamental forces that affect the value of real estate.
You have made positive statements regarding one of them.
Please continue.

#116 sciencemonkey on 06.07.14 at 1:34 pm

Where is my subprime credit?

A few weeks ago I had a lively discussion with my Italian work-friend (who is a very casual RE agent on the side) about RE, where he thought I could only get a mortgage for 3x my income, and I argued RE was bloated due to easy credit. The conversation also included some “RE is an investment,” “no, RE is a place to live.” So anyway, I said I would go to get a mortgage pre-approval to see how easy it is to get credit.

Yesterday I went to my local big blue branch to talk to [email protected] about a mortgage. I have no debt, own my year old car, etc. Including RRSP homebuyers plan, I have a downpayment equal to 80% of my gross income. She said I could get a mortgage of 400% my gross, for total buying power of 480% gross. (In this case, my DP would be 16.7%.) However, she recommended I save to bump my DP up to 88%, get a mortgage for 352%, and thus have buying power of 440% gross with a 20% DP. And with that I could get a low end condo, LOL.

I don’t understand, I thought that given I have no debt, a decent job, and a relatively large DP, they would at least lend me 600% my gross.

#117 Old Man on 06.07.14 at 1:47 pm

#114 TurnerNation – are all the old shacks down the street still there?

#118 Steve French on 06.07.14 at 1:55 pm

Don’t feed the trolls folks.

(but note the great Smoking Man is not a troll….).

#119 Steve French on 06.07.14 at 1:57 pm

ps: Sir Garths-A-Lot may need to keep a better eye on the moderation this blog comment section as it is in some danger of spiralling out of control….

#120 Joe2.0 on 06.07.14 at 1:59 pm

I just spoke to a friend/ RE agent in Vancouver.
I asked his opinion about what’s going on.

He said that there is loads of Chinese money on the sidelines, that numerous Asian clients are going through the process of getting out of China.

He said they just want to get into Vancouver and out of the Chinese market.

He says he’s very busy and has made multiple sales to Chinese buyers, with others waiting on the sidelines until they can get their money into Canada.

-Vancouver is considered a world class Hedge city and checks off the boxes.
-these people come from a country that has and continues to undergo far more serious events then ” it rains too much”
-And the present military escalation in the area is another reason to reinvest.

-immigration receives 100s of applications daily from future Canadians that can meet the 800k ante required to be eligible.

-The stats regarding average household debt doesn’t include or effect these buyers and will likely be used as an advantage down the road.

-China has well over 1 million millionares and growing quickly.

Vancouver’s housing market is different if your a wealthy Chinese, Persain, Indian, American, European, Russian, Mexican, Japanese Canadian….

For the locals it’s buy high with low interest rates or buy lower with higher interest rates.

Either way we lose and the banks win.

Your friend is ill-informed. For example, the Immigrant Investor Program is over. — Grath

#121 Old Man on 06.07.14 at 2:12 pm

#116 sciencemonkey – I am somewhat surprised why just the banks are always mentioned as have placed many a deal in the past with a different institution that did things differently. It will depend on individual factors, but you might have a discussion with DUCA, and they have private money on the side from Europe too. :)

#122 Mark on 06.07.14 at 2:16 pm

“Question here, I need to be edumicated.
Why would someone want or need CHMC insurance if they are putting more than 20% down?”

Lenders will often purchase CMHC insurance for loans that have greater than a 20% downpayment because they do not have long-term confidence in the value of the collateral backing the loan. Numbers indicate that lenders have been insuring loans with as much as 50%+ down, as individuals who have taken out such loans are finding that the CMHC, ordinarily an unrelated party, are performing credit inquiries which show up on credit reports.

This “prime vs subprime” delineation is deliberately high because even Canada’s lenders know that the RE market is due for a fairly significant fall. As this blog has shown on occasions past, Canadian RE is now more than twice the price of equivalent US real estate. Ratios are completely out of whack.

It is fairly clear that without the risk-taking on subprime credit that the CMHC performs, the Canadian RE market would fall drastically. Even a minor pullback in CMHC subprime insurance operations due to “F”s 2013 Budget has sent the market down in the past year in most major Canadian cities, only masked by changes to the sales mix in Calgary, Vancouver, and Toronto.

#123 Mark on 06.07.14 at 2:24 pm

“When credit dries and it will if we revert to cash payments a SFH would be 200-250 k in Toronto (current currency purchasing power).”

That’s still way above 2-3X average income. Try closer to 1X income in a truly all-cash market.

Mean reversion is a bitch, eh?

#124 Old Man on 06.07.14 at 2:53 pm

#122 Mark – I just read that if one doesn’t have enough downpayment no problem as you can use your RRSP’s without tax or any penalty and have up to 15 years to pay yourself back. This sounds like a hidden second mortgage to me; what a shell game!

#125 Old Man on 06.07.14 at 3:20 pm

I am going to go back to “this is the one.” The street in question has been in transition as all is being torn down with the exception of the shanty shacks down by the Village corner as at October 2011. Now the ownership might be holding out for a whale. Nice street and great location, but for the ‘this is the one” built in 1924 it will not conform. Both owners must get together and sell as a package before they fall down; they too must be torn down as renovating becomes a lost cause. The question is now what to build and at what cost for any new buyer? The semi that is listed for sale should not be bought.

#126 van guy on 06.07.14 at 3:25 pm

Van sales up, prices up, up up up. How is this bearish? Rates keep going lower and the ECB cut rates to free. It’s a messed up world now. Cheap money will keep asset prices high and cause massive inflation. US equities have ripped it up and when u think theres gonna be a slight correction, it just goes higher. Treasuries showed a sign of higher rates and now that has reversed course. Its been tough being a bear, definitely getting whooped by bulls.

Rates in Euro going down to try and stem deflation. Bad news for real estate, and debtors. — Garth

#127 Mark on 06.07.14 at 3:43 pm

“#122 Mark – I just read that if one doesn’t have enough downpayment no problem as you can use your RRSP’s without tax or any penalty and have up to 15 years to pay yourself back. This sounds like a hidden second mortgage to me; what a shell game!”

Exactly. And for a young person, ordinarily those funds would be invested in something long-term like the stock market.

Logically we can conclude that if so much money has been diverted from the stock market and from business investment by the CMHC and by programs like the HBP, that the stock market itself is cheap.

I’m personally looking for a re-run of the 1990s where the stock market (ie: the TSX) tripled, while housing went down significantly, and, at best, stagnated.

Intuitively this makes sense, as I can buy XIU for a P/E = 15 today, with most of its consistuent cyclical firms closer to the bottom of the cycle than the top — while Canadian housing is at a P/E ratio of around 35.

When the stock market’s P/E = 35, and housing’s P/E = 10, will be the time to make the switch and pile back into housing.

#128 Joe2.0 on 06.07.14 at 3:48 pm

Garth re# 120

Your friends ill informed….

Vancouver Sun – South China Morning Post march 21 2014.
HEADLINE
Hong Kong audience hears of plans for a new Canadian Immigrant program.

Chris Alexander, Canada’s Immigration Minister and Diane Laursen spokesperson for immigration Canada announced that further details for the revamped investor venture capital pilot program will be unveiled in current months.

“We want Chines investors and the door is open”
“New pilot program to attract wealthy investors”

http://www.vancouversun.com/touch/story.htm1?id=9643664.

#129 OttawaMike on 06.07.14 at 3:51 pm

#114 TurnerNation on 06.07.14 at 1:23 pm

Grandma won’t be needing that house anymore, where she is.

#130 Joe2.0 on 06.07.14 at 3:57 pm

Garth,

I just tried the link I included and it came up N/G
The article is written by Matthew Robison, Vancouver Sun March 21-2014.
And
South China Morning Post.
Thursday March 20 by Darren Wee.

#131 Smoking on 06.07.14 at 4:03 pm

Steve what’s a troll, been called that.

Back in the day, when I was into cartoons, a troll lived under bridges and scared people.

A Pug up date, I’ve trained the bastard to fetch elastic bands.
He won’t go for a ball, or toy..

Another observation. It loves eating ants…

This dog will never starve…

#132 Joe2.0 on 06.07.14 at 4:11 pm

Another link re new immigration policies
http://www.vancouversun.com/business/Hong+Kong+audience+hears+plans+Canadian+immigrant+program/964366/story.html

#133 cynically on 06.07.14 at 4:14 pm

Nancy at #110 has it right but we “racists” just have to button up or be scolded by the boss. Watch out #120 Joe2.0, he was easy on you this time.

I heard that. — Garth

#134 Joe2.0 on 06.07.14 at 4:15 pm

Not sure why the links aren’t coming up.
They are on my laptop.
If you type in the writer, date, plus some of the info supplied in the link it will come up.
Sorry about that.

#135 FI Guy on 06.07.14 at 4:26 pm

http://www.canadianmortgagetrends.com/canadian_mortgage_trends/2014/06/duca-brokers-this-should-be-good.html

Comic relief….let’s have the brokers underwrite their own deals, that’s a good idea! Me thinks a regulator should be stepping in….

#136 Shawn on 06.07.14 at 4:28 pm

A Troll

That’s what people like to call others who they don’t agree with because they can’t find anything intelligent to say in response so they just resort to a weird catch-all label like “troll”.

Often applied to anyone who posts something controversial especially where it appears designed to get others to react.

But what is one of the main the purposes of commenting on a blog like this if not to get a reaction from others?

We are all in favor of free speech. Well at least for those who agree with us.

#137 april on 06.07.14 at 4:28 pm

# 120 – Are you that naive to believe such spin from a realtor of all people???

#138 Ralph Cramdown on 06.07.14 at 4:33 pm

Here comes the Sunday funnies!

The Financial Post, in a desperate bid to remain relevant amidst a blizzard of staff cuts and outsourcing, today presents your “paying off a mortgage” humour.

First up, some guy who makes me look like a spendthrift, and I’m pretty damn cheap. He’s paying down a 3.04% mortgage from a tax bracket low enough that it might pay to buy dividend stocks instead, even not considering the diversification or equity appreciation benefits, or that he could borrow to invest and deduct the interest:

http://business.financialpost.com/2014/06/07/mortgage-free-in-canada/

Next up, a genius financial columnist (married) who says “We both refinanced our rental properties and used the cash to purchase a modest home outside of the city outright” Sheer genius… if you’re looking for a way of converting tax deductible interest into non-deductible interest. My guess is their advisors (if any) didn’t get this and they might get away with it if they aren’t audited.

business.financialpost.com/2014/06/07/mortgage-burning-party-anyone-three-young-canadians-on-how-they-paid-it-off/

#139 Old Man on 06.07.14 at 4:35 pm

#129 OttawaMike – its an old farm house from 1924 which was divided and would love to see that unfinished basement. What is behind the siding and why is the roofing all messed up? I would guess the other semi might be a match made in heaven too. They are two relics that could be turned into a museum for the tourists. I bet the neighbours would take up a collection in syndication to buy them out as it affects their property values in a very negative way.

#140 China Study on 06.07.14 at 4:51 pm

Toronto is somewhat overvalued, but have you seen the property bubble in China? It makes ours look respectable:

http://www.numbeo.com/property-investment/compare_cities.jsp?country1=Canada&country2=China&city1=Toronto&city2=Beijing

China has 1.3 billion people, 50% of whom are rural and live mainly in self-built houses. Direct comparisons are just silly. — Garth

#141 HD on 06.07.14 at 5:27 pm

@ #136 Shawn on 06.07.14 at 4:28 pm

FYI

http://en.wikipedia.org/wiki/Troll_(Internet)

Best,

HD

#142 devore on 06.07.14 at 5:56 pm

#54 Chickenlittle

It always has annoyed me that I have so many friends who get paid top dollar to push papers, while I apparently work because I love kids and that in itself should be reward enough. Sigh.

I sense a career change opportunity and more competition in the paper pushing field!

Somehow, however, I don’t think your top dollar making paper pushing friends have anything to worry about.

#143 eddy on 06.07.14 at 6:10 pm

dean said
It is all based on giving cheap, mortgage interest rate money to people who have no idea what they are doing.

You don’t have to know what you are doing. I knew a man who did not know what a mortgage was. He actually said “what is a mortgage?” But he had one on his house. In his dining room plate rail, instead of plates, he had baseball hats, a big collection. Basically some agent in the past said “just sign here”. Come to think of it, he wouldn’t have known what equity was either, but he had some.

#144 bigtown on 06.07.14 at 6:16 pm

Looking for a place to retire with good choice of affordable housing and services in small town Ontario is not as easy as our boomer household imagined…there seems to be a lot of those under the radar Ontario towns we all remember and miss: Orillia; Cornwall; Smith Falls; Chatham; Sarnia; Fort Erie and I know I am missing some. There is a lot of good out there beyond the GTA and I want a peace of it.

#145 devore on 06.07.14 at 6:39 pm

#136 Shawn

A troll is not interested in informing, learning, enlightening, discussing, debating or anything else besides the entertainment he derives from the responses received, positive or negative. The actual words and ideas, their correctness, validity or relevance are completely irrelevant, and the troll need not believe or be interested in them.

It is 100% manipulation, and no one likes to be played for someone else’s enjoyment. That’s why one does not engage trolls, it is a self-defeating exercise.

#146 Freedom First on 06.07.14 at 6:58 pm

#28 Madeline

Okay Madeline, you were not DELETED so I will respond to your post. Madeline, women work soft cushy jobs in soft cushy environments. Men work extremely hard jobs in very hostile environments. That is why men make more money. There is very very few women who will take on these jobs for those reasons. They simply can’t handle it. No sexism there, women are the weaker sex. Fact.

#147 TurnerNation on 06.07.14 at 6:58 pm

Old man the shacks were, a few years go when I last saw, there. The parking lot at foot of street was planned into a condo development years ago. The locals shot it down. That’s power.
BSS and UCC walking distance away but more likely Jr II will be driven there in a station-in-life wagon. I dunno, people paying 700k for a Leslieville or Bloor W semi dump, this dump has location. Cheapest house in richest location, the old saw. Funny, a bit further down that street they cut a semi in half. Didn’t go so well, it’s still leaning…

– I wonder if our new ‘lady’ troll blog dawgs are simply SM into the JD again…a new character.

#148 Setting the Record Staight on 06.07.14 at 7:08 pm

“#102 Setting the Record Straight on 06.06.14 at 12:47 am
————————————————————
By using the rationale behind your argument, private sector workers shouldn’t vote either.”

Please explain.

#149 Renter's Revenge! on 06.07.14 at 7:14 pm

@138 Ralph Cramdown

You’re right, those stories must be jokes! In the first one about the 29 year old guy, the story has more holes than a block of swiss cheese. It says he bought the house 5 years ago, but that he made the downpayment on it when he was 27 (2 years ago). He also managed to save $170,000, or about $25000 a year for 7 years, at what I’m guessing was full time hours at $12/hour, while he was doing his university degree. What does that say about the value of his degree if he could earn while working full time. Now he makes nearly as much money freelancing for a few hours each morning as his full time job. All the story says is that if make alot of money, and don’t spend any, then in 10 years you’ll have a bunch of money! But the icing on the cake was when “Mr. Gollum” the “financial advisor” was suggesting ways to reduce a mortgage schedule from 25 years to 20, precioussss. Gollum!

#150 Old Man on 06.07.14 at 7:16 pm

I have one more comment to make about 38A Thelma Street because there is too much money at stake not to do basic homework, and never look at the tree but consider the whole forest as well. Make sure you look at everything. Why is there a separate entrance to the basement on the side? Walk the street and observe all parking configurations; the location is prime; the street itself is improving with big money; and the Village has most of the necessities in life including public transportation.

These semi’s have two different frontages. The one that is not for sale conforms with most of the street with garages, a paved parking strip, or more which is number 38. The one for sale 38A the other part of the semi has no place to park a car. The other strange thing about 38A is why is the kitchen and dining room much larger than the living room?

#151 Big Brother on 06.07.14 at 7:29 pm

Smoking man just spotted walking around bar area at Seneca with a glass of wine. Your welcome I just served you.

#152 maxx on 06.07.14 at 8:15 pm

#19 JO on 06.06.14 at 8:39 pm

JO- very interesting and even more importantly, sobering.

#153 China Study on 06.07.14 at 8:18 pm

#140
China may be different from Canad, but there are a lot of countries with much worse than Canada’s. For example, Australia:
http://en.wikipedia.org/wiki/Australian_property_bubble

There bubble has been on the move for almost 20 years. Housing is basically not affordable.

England
France
China
Rome
Mumbai, India
Rio De Janeiro, Brazil
Moscow, Russia

The theme is that these major cities seem to price out their own residence that live in the city by speculation.

For example, Shanghai rent prices are considerably less than what it would cost to own the same property.

A 650sq ft condo it Shanghai would cost 560K to own with a mortgage payment of 3200/month, whereas to rent the same condo, it would cost 1000/month.

It appears in these major cities, people are using real estate as a form of speculative investment. It appears to be working for them so far…

#154 Old Man on 06.07.14 at 8:27 pm

#147 TurnerNation – your right on about the area, and look at the house nextdoor. Its essentially a 4 level as the garage goes down; fully alarmed; and worth about $2 million or more. His frontage is a tight fit and here is the wild card. What if he needed a bit more frontage, so did 38A sever a strip of land and sell it to him?

#155 OneMoreThing on 06.07.14 at 8:47 pm

Who’s Walking Who?

#156 Joe2.0 on 06.07.14 at 8:50 pm

April #137.

I believe him I’ve known him for years.
Vancouver is different, it’s a very desirable location.
It’s a beautiful city, safe, clean, and culturally diversified.
Vancouver RE is a good place to park money and many wealthy foriegners know it.

Most people have no idea what it’s like living under a communist regime.
Or somewhere you don’t go out after dark.
Or to live in or near a war zone or a police state.

Do you know how many kids starve to death everyday?
Around 40,000.
Forty thousand a day..

A bad day in Vancouver is a line up at Starbucks on a rainy day, that terrible rain it’s just horrible.
Or if the Canucks loose.

Gotta think outside the bubble.

#157 Smoking Man on 06.07.14 at 8:55 pm

#151 Big Brother on 06.07.14 at 7:29 pmSmoking man just spotted walking around bar area at Seneca with a glass of wine. Your welcome I just served you.
…….

Drinking beer tonight, always close but no cigar…..

George is back, that creepy Greek who was hitting on my son’s wife.

Knowing I was a 1/2 Greek, the disrespect…

Well he chipped border guards..last year, band. I guess he got his pardon…

We had words, last year.. This old man, threatened me.

Back in the day of Jr hockey.. I was the goon…

Walked right up to him, blew smoking rings in the famous Toronto restauranture…

No one’s above me…. Less of course they land a sucker punch before me…

Welcome back George….

#158 WhiteKat on 06.07.14 at 9:00 pm

@ FreedomFirst #146

Then how come the men in those same “soft, cushy environments” make more money than women doing the same job?

#159 Smoking Man on 06.07.14 at 9:18 pm

They say first 10 pages of a book is where you hook em, I need a few females who are avid readers to give mine an honest evaluation.

Females are 80% of the market..

Ask garth for my email.. I need females that don’t know me..

The ones in my circle that review it give it raving thumb up..

I’m not convinced.. Because I’m so God damn handsome, it think it influenced them.

Come on ladies, proceeds will go to homeless…

Help me please…

#160 Son of Ponzi on 06.07.14 at 9:37 pm

China has 1.3 billion people, 50% of whom are rural and live mainly in self-built houses. Direct comparisons are just silly. — Garth
———————–
Don’t forget those who live in caves.
http://www.nydailynews.com/news/world/30-million-people-china-live-underground-caves-article-1.1046872

#161 HogtownIndebted on 06.07.14 at 9:43 pm

Election in Ontario coming up, lots of polls suggesting a very tight race. Here’s a site doing some overviews of various polls:

http://www.threehundredeight.com/p/ontario.html

The Tories actually need to do much better than ‘too close to call’, as reported in the media today. They need to lead popular polling overall by about 5% to actually have a chance to make government as a minority. It’s not happening yet, in fact going the other way, and most people expect the Liberals to win now, even if they don’t support them.

Disproportionately, conservatives are gathered in more rural areas. Extra strength in traditionally blue ridings is what puts them close to Liberals in raw polling numbers. The Libs and to some degree the NDP dominate in ridings where there really are horse races.
That will be the difference, once again.

I’m inclined to think there is a strong chance of a Liberal majority at this point. That would at least hasten the departure of the idiotic ‘chain-gang’ Hudak and the ineffectual and rudderless Horwath.

Harper may be seeing what will happen to him in about a year.

It’s interesting to note, that none of these three parties really have any good candidates for leaders
in waiting right now. Can anyone identify anyone else in these parties, beyond the party leaders?

Liberals will also likely bring in austerity measures eventually, because most of us voters are babies who can’t stand to be told the truth, so the parties play games. The Liberal games have been slicker and more grown up, the PC games have been stupidly blunt and error-filled. Easy choice there, alas.

#162 AfterTheHouseSold on 06.07.14 at 9:49 pm

#144 bigtown
“Looking for a place to retire with good choice of affordable housing and services in small town Ontario…”

Cobourg. Hospital, heritage buildings, waterfront, parks, public beach, via rail, 401, easy proximity to gta.

#163 Old Man on 06.07.14 at 9:54 pm

#158 WhiteKat – men make more money because you women are high maintenance and we want to make you happy.

#164 Vangrrl on 06.07.14 at 10:14 pm

#146 Freedom First:
How disappointing. I usually agree with your posts (about being debt-free, etc). What a ridiculous generalization you made, in response to a person who is obviously a nut- proof it’s actually a woman? The name Madeline…).
I have always marvelled at the simplistic idea that because on average men are physically stronger than women, it follows that ALL men are physically stronger than ALL women. Ridiculous. Look around you! Women are not conditioned to reach their physical potential (unless they are athletes). They don’t demand higher pay, or ask for raises as often. They are more likely to undervalue themselves at work. Or perhaps they value money less? Enjoying our jobs is far more important than how much we earn. A male friend who worked in the oil fields for a couple years said to me ‘No woman would be stupid enough to do such a horrible job’. Touché!

#165 Old Man on 06.07.14 at 10:34 pm

#144 bigtown – Look at Stratford, Fergus, Blenheim, St. Marys, or Ingersoll.

#166 WhiteKat on 06.07.14 at 10:34 pm

@OldMan, #163, Yeah, well, there are children to feed.

#167 Bottoms_Up on 06.07.14 at 10:38 pm

Garth, I am not sure why you allow post #28 to stay. If these were slurs against a race, it’d be called racism. But it is against men, and therefore called prejudice.

The greaterfool.ca is now a blog that accepts prejudice against men.

Regardless if it came from a real estate agent troll, or someone with genuine prejudice against men, it should not be allowed. Especially not on a high profile, CANADIAN, and supposedly diplomatic blog.

For this reason, and because you are allowing it, I am OUT (and I hope my male counterparts will consider doing the same).

It’s been fun.

You mean she wins? — Garth

#168 Pope NostyVlad the 666dd Snugglebombed on 06.07.14 at 10:50 pm

#54 Chickenlittle on 06.06.14 at 10:59 pm — “Nosty 666: Good link. Thank you!”

Anytime! One of the best things to do is not to get mad, but rather get even. A decent portfolio, say $750K invested Garth’s way should return eight per cent per year, while giving out about $55K a year, 80% of which is tax avoidance. Two people would be able to leave the workforce, or maybe just do part time work. In effect, slaves no more!
— and —
#109 Ayn Rand Army on 06.07.14 at 12:45 pm — “Only the most robust and necessary businesses are currently still surviving, so far…. and even fewer are growing.” The times they are a changing.

Interesting how the western militaries, primarily soldiers, are being slowly replaced by robots and drones, neither of which need regular pay cheques or vacations, but this also applies to many jobs. Societies all across the board are being dumbed down to receive a lower standard of living, as the money supply is also being gradually withdrawn. Unfortunately, this — WW3 — is where we are headed. Recall 1907 – Economic collapse, then WW1; 1929 – Economic collapse plus depression, then WW2; 2008 – Economic collapse then WW3 coming soon.

A few more links — Most will remember the reason why the US invaded Iraq was not nuke WMD, but that Sadaam was about to ditch the petro-dollar and travel with the Euro. Now, Russia (and China, to some extent), are being demonized by the western m$m because they are on the verge of doing what Sadaam was about to do. It will be very interesting to see if SArabia turns to the far east.

However, the Crimean parliament and the people voted overwhelmingly to secede from Ukraine. Perhaps the west is mortified that other countries are getting sick and tired of their constant lies. Remember Eddie Are You Kidding Snowden? He probably has a nice dossier on the NSA, CIA etc.

#97 Bubblicious on 06.07.14 at 10:39 am — “Alicia, Carly and now Madeline. Holy crap. Be afraid, very afraid.”

Agreed. This is why I follow Monty Python’s line of reasoning in the Australian Table Wines sketch — “Lay down and avoid them!” But this may be good bedtime reading.

#131 Smoking on 06.07.14 at 4:03 pm — “Another observation. It loves eating ants … This dog will never starve…”

A member of the .0000001%, TPTB?!

#169 WhiteKat on 06.07.14 at 11:10 pm

#Vangrrl #164, I’m sorry for your loss.

#170 Smoking Man on 06.07.14 at 11:39 pm

DELETED

#171 crowdedelevatorfartz on 06.07.14 at 11:44 pm

@Joe 2.0 #156
Your comment(s)….
“It’s a beautiful city, safe, clean, and culturally diversified.”
“Or somewhere you don’t go out after dark”

Well, I disagree.

A friend of mine was walking home to his downtown condo a few weeks ago at about 11pm Friday night and was pushed down a flight of concrete stairs,( AT THE LAW COURTS) knocked out, robbed. wallet,phone, keys….everything gone. Woke up, staggered to his building and had security call the cops.
No one showed up. Called a locksmith to rekey his condo. Too busy. No one showed up.
He filed a police report the next day. They couldnt have cared less because he wasnt dead…..

Vancouver isnt safe downtown after dark. If you think it is ……Walk down Granville st at 2am on ANY friday saturday ……watch the drunken thugs fighting and the cops standing in groups of 5 for their own safety……..
If I go downtown drinking on the weekends I leave no later than midnight because of the total crap that goes on……..Its a gong show…….

But we have bike lanes and this makes us happy

#172 ozy -RED HERRINGs on 06.08.14 at 12:59 am

RED HERRING alert (CMHC)…while the offender is…drum-roll….RED HERRING alert (low mortgage rates)…while the offender is…drum-roll….

YES…the system of FRACTIONAL RESERVE LENDING!!!! TATA! pumping $$$ out of thin air into the DEBT BALOON- and we are not on it’s final game.

Housing reaching 3 million in a few years -exponential curve like the gold years back (detached homes currently at 1 mil) before crashing back to 1mil. Is gonna be fun. stay tuned

#173 ozy to #28 Madeline on 06.08.14 at 1:57 am

Mady dear, it takes 2-3 incomes to win a bid today. Some ideas, get a partner (of any sexual orientation and age you want). Put in more overtime, like 70h a week, PROVE you are capable to resolve all issues the company you work for has, and get a promotion! Then use the power of compounded OVERTIME. Rinse and repeat.

If this cuts into your gym time, that’s bad, on the silver lining, you show those perverts who is the boss!!!

Happy hunting Maddline
***************

#28 Madeline on 06.06.14 at 9:22 pm
This idea of women as victims falls on deaf ears when you spend year after year on inflated houses caused by bidding wars.

Women in Toronto are denied the basic human need of shelter because some douche male keeps on outbidding the female for a home. This is sexist by the real estate market.

Caucasian women in Toronto are forced to pay more for their houses, and as our paycheck is 55 cents less than a dollar earned by a male of privilege, we have to work longer hours in a sexist workplace environment. A sexist work environment which pays us less than men and men stare rape us and look at our butts for their perverted minds.

I had to go to the gym to tone my butt, and I do it for MYSELF and no loser! Never! Men are scum. I wouldn’t even let a male go near my anus because it’s my body! My anus is cleaner and no men in Toronto deserve it!

#174 Turtle on 06.08.14 at 2:48 am

#167 Bottoms_Up

I actually like that #28 comment. I like everything that makes me laugh.

#175 SHELTER THE MONEY NOT THE PEOPLE on 06.08.14 at 4:18 am

When the crash happens listen to this while it unfolds…

As hopelessness sets in…there is no more appropriate music.

As you watch your retirement nest egg vaporize…

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

#176 TS on 06.08.14 at 6:32 am

#168 Pope NostyVlad the 666dd Snugglebombed on 06.07.14 at 10:50 pm

Thanks Nosty. Your posts are always interesting and informative, and yours is one of the few posts I actually read.

#177 Detalumis on 06.08.14 at 8:21 am

I don’t think the idea of moving to a small-town is all that smart. Unless you grew up in those sort of places you will find the lack of stimulation, diversity and activities stifling. Cobourg, sure it has a hospital but anything requiring any sort of specialist care you need to go down the road. Via Rail is teetering on the brink of extinction and once that is gone you are cut off. People can and do give up driving, most just don’t think it will ever happen to them.

I would rather live in a mini condo box in Toronto and go out among humanity, there are at least 10 free cultural activities alone to go to every day, they publish lists of them, and spend the end of life with my brain cells still functioning then live in the prettiest house on the prettiest street in the prettiest small town in the entire country.

#178 bigrider on 06.08.14 at 8:27 am

DELETED

#179 Steve French on 06.08.14 at 8:46 am

Garth deleted my comment!

You wish. — Garth

#180 Herb on 06.08.14 at 9:01 am

#162 AfterTheHouseSold and #144 bigtown,

It is a stretch to suggest Cobourg as the answer to bigtown’s prayer.

Yes, it is “affordable” – but only in direct comparison to Toronto. The housing stock is mainly MacMansions in new subdivisions and older houses replete with decades of delayed maintenance. Property taxes are nearly double Toronto’s for a given CAV. Don’t know the quality of services provided for this rate, but don’t bother with the beach on weekends.

We looked for a house worth buying there for three years and gave up this spring. We also rejected Belleville for similar reasons.

#181 Carly in Cabbagetown on 06.08.14 at 9:02 am

#167 Bottoms_Up

This is so totally for you.

http://www.upworthy.com/what-happens-when-you-suddenly-identify-with-the-unpopular-kid-at-the-back-of-th

Your attitude, your desire to passive-aggressive bully women’s voices and perspectives off this site, even though it is already totally male-dominated, is just so utterly ridiculous and pathetic.

I would cry with you, but I am too busy laughing.

“I am OUT (and I hope my male counterparts will consider doing the same).”

OMG!!

LOLOLOLOLOLOLOLOLOLOLOLOLOL!!!!!!!!!!!

:)

#182 Realtor # 1 GTA on 06.08.14 at 9:07 am

Raising the minimum to 7% will have little effect on the RE market.
Down payment has little impact on prices of homes.

It’s all about the carrying costs.

1. debt service ratio
2. Gross debt ratio

5 years and counting . don’t try to time the market

#183 Condo Minion on 06.08.14 at 10:02 am

Yikes – looks like all of Brampton is on fire this morning.

Condolences to the families of those lost and injured.

#184 liquidincalgary on 06.08.14 at 10:11 am

anyone else sensing a bro-mance at #136? (Shawn/SM)

#185 Chris L. on 06.08.14 at 10:14 am

#28 Madeline on 06.06.14 at 9:22 pm

“This idea of women as victims falls on deaf ears when you spend year after year on inflated houses caused by bidding wars.”

– YOU are a victim, don’t drag other women down.

“Women in Toronto are denied the basic human need of shelter because some douche male keeps on outbidding the female for a home. This is sexist by the real estate market.”

– You are misandric. No man owes you anything, certainly not to lose a bidding war so you can have a house. Welcome to equality sweat heart.

“Caucasian women in Toronto are forced to pay more for their houses, and as our paycheck is 55 cents less than a dollar earned by a male of privilege, we have to work longer hours in a sexist workplace environment. A sexist work environment which pays us less than men and men stare rape us and look at our butts for their perverted minds.”

– Work harder, pay equality is mandated, if you work for less it’s because you are not as valued in a free market as someone else. The pay gap is a myth. “Team woman” makes less than “team man” (this is how that stat is generated), earns less ON AVERAGE due to PERSON decisions. Make better personal decisions like “team man” does and you too can earn more money. Stop being such a bitter individual loser on “team woman.”

“I had to go to the gym to tone my butt, and I do it for MYSELF and no loser! Never! Men are scum. I wouldn’t even let a male go near my anus because it’s my body! My anus is cleaner and no men in Toronto deserve it!”

– Look into being more feminine if you expect special treatment from a gentleman. You’re no worse than a misogynist with your overt sexual comments. Your conduct is unbecoming of a young lady. Comport yourself with some dignity and you might just earn that raise you covet so much.

#186 Renter's Revenge! on 06.08.14 at 10:37 am

@167 Bottoms_Up

“I am man, hear me meow?”

Most of your “male counterparts” are ignoring the fem-trolls and carrying on with the important business of discussing financial matters in a civilized manner.

Don’t let the bastards grind you down, dude.

#187 AfterTheHouseSold on 06.08.14 at 10:50 am

#177 Detalumis
“Via rail is teetering on the brink of extinction and once that is gone you are cut off”.
#180 Herb
regarding housing

I mentioned Via rail to highlight the fact that rail infrastructure is already in place for future go service. Cobourg also has local bus service for those that don’t drive. Well positioned for those train excursions to Toronto, Montreal and east coast. A step away from city crime, noise pollution, congestion.
Lots of 15-20 year old housing stock in established areas in the $250,000 range. I have been looking too but more on basis of place to hang my hat between trips.

#188 Old Man on 06.08.14 at 11:27 am

#187 AfterTheHouseSold – We had the Turbo train years ago from Toronto to Montreal. It was like sitting in a jet ready for a takeoff in those luxury seats with the turbines roaring. All first class going 100+ m.p.h. down the track. I would sit in the bar car behind the engineer, and knock on his glass window with two thumbs up to boot it up. He let it rip for me with a smile on his face at 125 m.p.h. – yes at one time we had a fast train.

#189 BCD on 06.08.14 at 11:50 am

#138 Ralph Cramdown on 06.07.14 at 4:33 pm

_____________________________________

I read this article and the first thing I thought was “dude doesn’t have a woman”. No woman would live this cheap or let him get away with it. $10 on eating out a month I think?! $100 on Groceries a month?! What does he eat? Dry dog food and tap water?

I am all for being thrifty, but cheap like this brings new meaning to the words “slave to your mortgage”.

#190 chapter 9 on 06.08.14 at 11:50 am

#167 Bottoms_Up re madeline
You want to quit because of a blog bully not a chance. She needs some time with Dr. Phil sounds like she has had mayor trauma in her life.

#191 Trevor on 06.08.14 at 11:55 am

Need some help here Garth (sorry if I am slow)..

1.) Does this mean lenders can still make loans to borrowers who put 20% down on a 1 million dollar house but they the lenders will now take all the risk? or does it mean someone would have to pay cash or simply a higher down payment? This must be up to the lenders discretion but how do you think this will play out?

2.) Secondary property loans – again how do you think this will play out? the lender will not longer give secondary loans if the primary is not paid off or simply require a higher down payment? I doubt they will want to take the risk associated like the taxpayers were forced to.

Trevor

#192 crowdedelevatorfartz on 06.08.14 at 11:58 am

@#167

“Bottoms Up” is “OUT” and encourages other men to do the same………..

Good grief. To much info………..

#193 Nemesis on 06.08.14 at 12:15 pm

#AnyThingWeCanDoTheyCanDoBetter #BarCarReminiscences:DisappearingTurboBlues

@VanGrrl/#164… just for you [psst: whatever you do, just don’t tell the GirlyMen – they get so jealous!]

http://youtu.be/QmDKGUr2hWY

@OldMan/#188…

FastTrains. BarCars. SmokingLounges! I’m still sobbing…

Perhaps a NostalgiaFix will help:

http://youtu.be/vhlh7JJVc50

#194 Condo Minion on 06.08.14 at 12:19 pm

#192 crowdedelevatorfartz

Re: Bottoms_Up #167

http://www.youtube.com/watch?v=Oj3VphK9AMk

#195 Old Man on 06.08.14 at 12:22 pm

#192 crowdedelevatorfartz – there are those on the Hill that need a good outing too as am a man of equal opportunity for both men and women, as deception and hypocrisy are not on my page.

#196 Blacksheep on 06.08.14 at 12:22 pm

Bin some crazzzzy chicks on this blog lately and you know what they say about crazy chicks……

#197 Condo Minion on 06.08.14 at 12:27 pm

#192 crowded/bottoms-up

Here’s the longer funnier version :)

http://www.youtube.com/watch?v=Uw6XdNAgyww

#198 Joe2.0 on 06.08.14 at 12:27 pm

192 Crowdedelevatorfartz

I’m sorry about your friend.
But Vancouver is rated the 4-5 safest city on the globe.

I’m onboard with the bike lanes i think they should pay insurance just like the other vehicles on the road.

It’s doesn’t make sense .

#199 Smoking Man on 06.08.14 at 12:36 pm

DELETED

#200 torontorocks on 06.08.14 at 12:39 pm

To me this all reads like being priced out. What is the trickle down effect? Or the impetus to sell which cascades to falling prices. 5 plus years of increasing prices, equity being built, downpayments increasing. If you stayed in cash and gics, you didnt approximate those gains. If you diversified you took your downpayment and grew it at say 10% p.a but lost the leveraged return. I dont see the falling effect, just flatlining and renter forever scenario.

#201 OttawaMike on 06.08.14 at 12:42 pm

#188 Old Man on 06.08.14 at 11:27 am
Re:Turbo Train
http://en.wikipedia.org/wiki/UAC_TurboTrain

Yes, a very cool piece of train history. A Typical Canadian success story, like our hero– poor old Terry Fox. We gave it our best but didn’t quite make it..

#202 Poorgeoisie on 06.08.14 at 12:55 pm

Don’t fret cobourg! VIA has a new pres. and he wants to increase service to stops like yours as well as places like port hope, Trenton, brockville, cornwall etc along the quebec Windsor corridor. This will lengthen the travel time from TO to MTL but if you’re in a huge rush you’re probably not taking the train anyway. Increased service isn’t just for the corridor either they want small towns to get back on the trains and to view the train as the best method to get to the more metropolitan areas.
When CN and VIA split in the late 80s there was a gradual change in priority on the tracks. By 1995 CN became a fully private entity and began being publicly traded. At this time the CN noticed that giving passenger trains priority over freights with many millions of dollars of cargo on tracks that they owned made no sense at all. So now it is common for passenger trains to wait for a freight to pass. There are still places where the train goes 100mph but congestion can slow that down considerably.
Changes are coming but VIA won’t be eliminated

#203 Joe2.0 on 06.08.14 at 1:37 pm

28-Madeline

Why don’t you go to a gym that has classes or workout times for women only?

I think yer funning with us.
No butts about it.

#204 Old Man on 06.08.14 at 1:38 pm

#193 Nemesis – just learned today that the end dome car was a bistro with a piano player, and that is where the real party took place. I eventually went back to the other train with the cheap seats leaving about 5:30 PM on a Friday to Montreal. This was the party train with lots of booze and wild women; much more to my liking.

#205 Madeline's Male Ex-BF on 06.08.14 at 2:06 pm

Madeline,

Please don’t give up on us, baby!

http://www.youtube.com/watch?v=1I3pSZGCuHA

#206 Dhane on 06.08.14 at 2:27 pm

This is a move to give more market share to Genworth and Canada Guaranty. Nothing more.

The government backstops these insurers to 90% LTV.

So Noe 10% down needed on $1 Million dollar homes.

#207 western observer on 06.08.14 at 2:31 pm

#28 Madeline

Coocoo for coco puffs

#208 Old Man on 06.08.14 at 3:35 pm

#199 Smoking Man – will you be doing the right thing, as why be a loser? Its time to search your conscience with sober thought as Wynne took off the gloves in Mississauga. She is now in an attack mode and has them running for cover which is a sign of strength so vote wisely; not twice like before, but just once for a Wynne (Win). Past history must be set aside because its time to move forward for the betterment of Ontario, and btw just fired off an email to her!

#209 4 AM Sunrise on 06.08.14 at 3:59 pm

#28 Madeline

You forgot to brag about the rainbows that come out of that sunshine-y anus of yours.

And why are only Caucasian women priced out of the market? Did you come to this conclusion after studying what women of other races are doing to afford real estate? Have you thought about emulating them?

#210 4 AM Sunrise on 06.08.14 at 4:04 pm

#189 BCD on 06.08.14 at 11:50 am

His story reminds me of Alan Corey. He’s the guy who lived cheaply to build up a real estate portfolio worth $1MM by age 28…aided and abetted by the real estate run-up of the 2000’s. I read his book – he wrote about eating day-old bagels with peanut butter for months on end. Young bachelors have a thing for not eating their vegetables!

The market is so out of control today that living cheaply will help you make your mortgage payments only if you take in boarders on the place you bought with 5% down.

#211 4 AM Sunrise on 06.08.14 at 4:20 pm

#171 crowdedelevatorfartz on 06.07.14 at 11:44 pm

I’m really sorry to hear about your friend. I’m a single gal who’s trying to “get out more” while staying out of trouble, so thank you for the heads up.

#212 KarL on 06.08.14 at 4:39 pm

How do the declining rates in Europe (attempt to stem deflation) affect the Canadian Real Estate and associated debtors?

#213 van guy on 06.08.14 at 5:37 pm

The immigrant program may be over but who are buying up van west at a premium? Van west is hot again and theres no inventory

#214 Ry YYZ on 06.09.14 at 12:57 pm

#85 Stickler on 06.07.14 at 7:50 am
“Instead of trying to stimulate the economy via house buying schemes (that result in higher house prices), how about doing something that will last and actually build a better future?”

Yeah, that’ll happen. Once voters stop voting for whatever politicians promise or appear to be able to deliver to them the most short term gains.

Politicians will sometimes try to do things with the long run in mind, but only if they think it won’t cost them votes. For politicians “long term” means 4 or 5 years (just until the next election).

I wish I could believe that, when the stuff hits the fan, that politicians won’t try their damnedest to bail out the most irresponsible and/or stupid house-buying voters. The lenders, of course, don’t really have anything to worry about since the government has already backstopped them.