The landing

SOFT LANDING

Wednesday morning at nine the federal minister of finance is scheduled to make an announcement. An hour earlier his officials will be holding a briefing, “for deep background purposes only, without attribution or source indication.” Accredited journalists only will be allowed in.

So will Joe Owe be unveiling new rules to make houses affordable again? Raise minimum down payments? Reduce CMHC coverage? Finally trash no-money-down financing or cash-back mortgage bribes?

Nah. Not this time. Sources tell me it’ll be boring. But I think we’re inching closer to the day when the feds will have no alternative but to do more than nibble around the edges of the runaway real estate market.

Remember, they turned 40-year loans into 25-year ones. Didn’t work. They raised the bar for first-time borrowers. But the Bank of Mom just moved in. They punted million-dollar homes from CMHC insurance. But the banks slashed lending rates. They banned zero down payments. But the mortgage brokers got around that. They outlawed fed insurance for second properties. But the speculation continued. And they blew up the Immigrant Investor Program. But horny Canadians flooded into fill the gap.

So here we are. Worse off than ever. Average wages aren’t budging. Household debt rises every month. House-buying families are forced into more and more risk. And the real estate market grows extreme in our major markets.

Consider the latest. The average SFH in the 416 costs $921,000. The average price for all properties across the GTA (six million people) is $569,000, up 7.4% since last summer. In Vancouver, sales are ahead 28% over last year, prices are up about 5%. A million buys you crap. In Calgary, a single family home averages $510,000, which is 11% more than in June of 2013.

Yes, some markets (like Victoria and Montreal) are mired while others (like Halifax) are weak. But in the headline cities there’s enough house lust to have realtors panting. For example, a Toronto agent wanted me to post this here today:

“To Garth, consider and acknowledge that you have done more harm than good. To the commenters, so many of whom are trying desperately to find delight in a real estate downturn that just will not happen, please reconsider. The summer market is still possible as an entry point for you. But ahead there will be many more thousands of buyers, including those fleeing Hong Kong, who will be pushing up prices everywhere, and pushing you out. Live in your mom’s basement and never get your life started. Or contact a good realtor today (there are lots of them) and get busy as a participant in life, not a spectator.”

So, to the house-floggers, higher prices mean prices will go higher. When houses are insanely unaffordable, you should buy because they’ll get more unaffordable. And if you don’t hustle into a realtor’s arms, some crafty Hong Kong dude will leave you homeless. Living with mom. “A spectator”, with no life.

This is even more pathetic than this blog. Imagine if someone licensed to sell stocks, now sitting near all-time highs, told you to buy because everyone else is buying, “pushing up prices everywhere, pushing you out.” Imagine if they told you a downturn in prices “just will not happen” and if you don’t act now you will “never get your life started.”

You’d laugh. What a scammer.

But when it comes to the wild west, unregulated, high-risk business of pushing houses, the floggers can say anything. And do. Like this. Or this. Or the example I gave you last week of Re/Max and their recreational property report pumping cottages – the most doomed of all properties – with zero methodology. The media didn’t care any more about the lack of creds in that instance than with a Sotheby report this week on ‘luxury’ house sales.

Reported the Vancouver Province, breathlessly:

“Demand for luxury real estate in Vancouver is booming and should increase through the year, according to a new report by Sotheby’s International Realty Canada. Eager buyers snapped up almost 40 per cent more million-dollar-plus condominiums and detached single-family homes in the first half of 2014 than they did during the same period in 2013, according to the luxury real estate report.”

And what’s a ‘luxury’ house? According to Sotheby’s, it could look like this:

BUNG modified

Yup, an old, ugly bung on a 44-foot lot in North Toronto which comes with a ‘newer’ kitchen and all electric light fixtures! At $1.1 million it falls squarely within Sotheby’s criteria for high-end real estate that is now flying off the shelf because, as we all know, rich people are smarter than you. Especially rich Asian people. So, you should buy a house, whatever the price. That’s called realtor economics.

Says Sotheby’s boss, Ross McCredie: “There’s so much confidence in the market right now, and that comes from the industry people as well as buyers and sellers.” Actually, if it exists, the buying momentum comes from a heady mix of cheap interest rates, bad intel and financial illiteracy.

That lousy houses routinely cost seven figures in major cities is proof only that we’re in an asset bubble and risk is extreme. And, sadly, that Joe Owe won’t get his soft landing.

So here’s his choice: Let the housing industry continue to victimize citizens, leading them into the valley of debt. Or say, simply, “When bungs in the burbs cost a million, we have lost our way. Follow me.”

But not today.

152 comments ↓

#1 wayne on 07.08.14 at 8:29 pm

We’re pretty much screwed.

There will be a big time crash in some markets and a lot of people will be completely wiped out.

:(

#2 totalinvestor.com on 07.08.14 at 8:30 pm

If you are late because you were celebrating Germany’s win then we forgive you. :)

Deutschland! Deutschland!

#3 Smoking Man on 07.08.14 at 8:31 pm

Can someone bring on a crash right now so I can watch shirtless become doomed.

So the shirtless protesters are all the rage, stocking a recovering addict.

From the media reports that are out, occupation of these bottom fender scum sucking parasites.

What else teachers,

Teachers never had to close deal, make the sale, work 20 hour days.
Teachers never had to take a risk, go all in, make a bet.

Nope, they just have a sething jealousy and contempt toward anyone that’s made it.
They make too much money and have to much time on there hands.

What they do is not special, a five year old could do there job.

They deserve the same fate as the air traffic controllers back in the day of Ronald Reagan. After all, a five year old could to their job, so long as it’s been home schooled.

#4 Randy on 07.08.14 at 8:34 pm

I’ll take it. Where do I sign ?

#5 mark on 07.08.14 at 8:36 pm

“all electric light fixtures!”

Oh wow, no more gas lamps! Sign me up!

#6 Withheld on 07.08.14 at 8:37 pm

National securities regulator.

#7 Ferrari321 on 07.08.14 at 8:39 pm

A fool will be separated from his/her money … buy buy buy. House prices never go down and RE agents always have your interests in mind FIRST…

#8 Albert on 07.08.14 at 8:43 pm

When will interest rate raise????????

#9 Adam on 07.08.14 at 8:44 pm

So, if you’re not a home owner, your life has apparently not “started”.

#10 Michael on 07.08.14 at 8:45 pm

First!

Keep them coming Garth.

If you have RE now and you bought 10 years ago you won the lottery.

If your trying to buy RE now your buying a ticket for the lotto that has already been drawn…

#11 NoName on 07.08.14 at 8:45 pm

Imagine if Owe pull that Swiss thingy and set a limit of properties available per year for non resident.

#12 Bob Rice on 07.08.14 at 8:46 pm

“Live in your mom’s basement and never get your life started.”

Is this guy serious? What a tool.

#13 idontknow on 07.08.14 at 8:48 pm

1st

#14 pinstripe on 07.08.14 at 8:48 pm

Not too long ago “bail-out” was a common term.

Then “bail-in” appeared because Cyprus put that into practice. However, “bail-in” would never happen in Canada. Yes/No?

Guess what, “bail-in” is floated as a trial balloon in Canada.

never say Never.

#15 old man winter on 07.08.14 at 8:51 pm

Yoke the joker

#16 Temporary Foreign Prime Minister on 07.08.14 at 8:52 pm

“…..To Garth, consider and acknowledge that you have done more harm than good………”
=========================

To REALTURD® , consider and acknowledge that by renting in the current housing market, I will always have more disposable income to invest in things that will actually go UP in value in the long term.

#17 chopper on 07.08.14 at 8:58 pm

People are like sheep the just follow blindly onto the valley of debt, money is cheap now so no problem. I can see this blowing up and when it does Garth you will look like a Saint.

I believe you are a saint for giving us great advice to avoid debt but the greater fools will not listen.

Cannot wait to buy when the market blows up, already saving for that day.

#18 Jas Girn on 07.08.14 at 8:59 pm

I will stick to buying an older condo. Lol.

#19 Axis on 07.08.14 at 8:59 pm

Co-worker bought a 900k house north of Victoria and got bonus carpenter ants. Quote from the exterminator was $4,000 with no guarantee of getting rid of them.

I’m off to the Okanagan for some r&r, have to get my life started later I guess.

#20 Retired Boomer - WI on 07.08.14 at 9:00 pm

THAT’S A MILLION DOLLAR ‘LUXURY HOME” ??

Sorry, I’ve seen better places in Detroit Cleveland, or Buffalo. For a whole lot less, thank you.

Prices, like their cousin the interest rate rise, and fall over time. If you had interest rates say at 12 or 14% like we experienced in the 80’s where would these markets be?
For that manner, where would our collective economies be?

I believe interest rates will rise somewhat over the few years. Prices could stall or revert the same amount, or even more as Boomers begin to cash out.

Nothing will choke a Boomer faster than having one of the couple croak-off while the remaining one realizes they are cash starved, and house rich. SELL! SELL!

Maybe the kids will help. Yeah, right. The kids are probably choking on their own debts.

Meanwhile, how many of those potential buyers will be ready with a decent sized down payment?

Stay tuned for more “Fantasy Inland” after these messages…

#21 lee on 07.08.14 at 9:04 pm

I think we should all be really concerned with what a drag these over-indebted homeowners with large mortgages will be on the consumer economy. I do not know what percentage of GDP is consumer spending but I think it’s like 60-70 per cent. When that goes, the whole economy goes with it.

#22 omg on 07.08.14 at 9:06 pm

“Yes, some markets (like Victoria and Montreal) are mired……”
———–
As for Victoria, so long as “mired” means pretty much flat, OK. The market here is still reasonably strong for anything priced fairly – a house priced at market will sell in a week.

Victoria is still MORBIDLY over valued, with prices about where they were in 2007 when interest rates were much higher.

Anyone thinking it is a buyers market in Victoria has been reading too much local realtor trash.

#23 Stizzle on 07.08.14 at 9:07 pm

I was sitting with some younger people at work on lunch talking about housing. Early 20 somethings truly believe that they will never own a house in the GTA. It was sad, being in my 30s I can stretch myself but choose not to. The idea to them seemed like a far off dream as they chuckled at the thought.

#24 Babblemaster on 07.08.14 at 9:07 pm

“Nah. Not this time. Sources tell me it’ll be boring.” – Garth

——————————————————-

It’ll never be anything but boring! The Feds will not do anything to seriously hurt RE prices. They will just pretend to be doing the prudent thing by pretending to take measures to reign in prices.

#25 Retired Boomer - WI on 07.08.14 at 9:08 pm

Smoking Man-

Try teaching, even as a gag at some place. It might be an eye-opener. Not necessarily the same as a ‘regular’ teacher, as their students are there by order, not by their own choice.

They obviously did you some good. You can communicate, get your points across, and are gainfully employed.

So, what’s the beef ? THEY ave a better life ? TRY IT!!!

Respectfully,
not a teacher

#26 cto on 07.08.14 at 9:09 pm

Garth
Iv found that realturds tend to believe their own bullshit. Just like george kastanza one said,
“jerry, its not a lie if you believe it”

#27 james on 07.08.14 at 9:10 pm

I am really curious about all these people ‘fleeing Hong Kong’. Is Godzilla going to attack? Rising sea levels?

My father is from there (although not Chinese ethnically). I’ve long salivated over the 15% income tax rates, and maybe I’ll have to flee there at some point.

#28 4 AM Sunrise on 07.08.14 at 9:10 pm

“…including those fleeing Hong Kong”??? Did this realtor’s message wash ashore in a bottle from 1997?

#29 omg on 07.08.14 at 9:11 pm

WTF happened in that car?

If the idea is that it got so hot inside the car the paint buckets exploded I would think the tops would have just popped off maybe splash a bit of paint out.

That looks more like a bomb went off inside the bucket.

Maybe an insurance scam for that 1997 minivan.

#30 Role on 07.08.14 at 9:13 pm

If I could had done known if anything cost of big house, small house, even TINY house can cost as many monies as many many, many times expensive castle, I have buyed!! Now. I wait. Wait . wait. never again can fall with-out shopping houses, real red jacket guy or not!!!

#31 Temporary Foreign Prime Minister on 07.08.14 at 9:14 pm

“…..So will Joe Owe be unveiling new rules to make houses affordable again?…..”
=========================

Not a chance.

No government, even one led by a mean-spirited, pot-bellied Harpocrite, is going to allow 70% of Canadian voters watch trillion$ of their pyramid scheme home equity evaporate into thin air on their watch.

Our so-called ‘free-market’ ReformaCons will do anything to continue to manipulate and pump this gasbag until it bursts after the next election.

#32 Mr Buyer on 07.08.14 at 9:17 pm

Dearest Smoking Man…
You gotta see somebody about this whole teacher thing dude

#33 Montellino on 07.08.14 at 9:22 pm

Role – what’s with the red jacket?

#34 Inglorious Investor on 07.08.14 at 9:25 pm

Met a glad-handing wannabe mayor (not Toronto) this past weekend.

When I said I was from Toronto he asked who I plan to vote for in the forthcoming election. When I responded Rob Ford, he shook his head indignantly and turned away from me, saying that he’s glad I was not a resident or property owner in his city, like I had some kind of incurable mental problem.

What too many politicians don’t seem to understand is this: the fact that so many Torontonians would still vote for Rob Ford is not a reflection of the people of Toronto––who are just as smart/stupid, informed/uninformed, worried/optimistic, angry/satisfied, rich/poor, industrious/indolent) as people anywhere. Rather it is a reflection of how so many politicians are regarded today…

Nobody wants an alcoholic, crack-smoking mayor. It’s just that so many of us don’t trust the alternatives currently on offer in our city.

So who has the REAL problem here?

#35 Nemesis on 07.08.14 at 9:28 pm

#Egads!YouJustDroppedADimeOnACrackShack!?! #”Never you mind,Honey.” #ClorisWillMakeItBetter. #EvenIf,EspeciallyIf… #TheBigOweCan’tOrWon’t. #BoomTownDustBowls&OtherCautionaryTales.

http://youtu.be/nejXDl9BPbY

#ComicRelief. #ClorisDoesPragmatic. #MalibuStyle.

http://youtu.be/pwfqkbt9pNQ

[NoteToSaltyCinephiles: Cloris was, like, SO hot in her prime. Eat your heart out, Miss Jean Brodie. #BonusZen. #ProfilesInCourage. “Sometimes, every family needs a little translation.”: http://youtu.be/bN2yQBF7n3Y ]

#36 Detalumis on 07.08.14 at 9:28 pm

The ratty bungalow you show is being sold as prime land value c’est tout. It doesn’t matter how ugly it is, nobody will even go inside. It’s walking distance to Havergal in one of the most desirable areas in Toronto so no, it won’t be dropping to 500K anytime soon.

In my area they don’t even bother with interior pics, they just show the lot and the builders congregate with nobody even going inside. A fully renovated bungalow and a falling apart moldy Granny-special on my street will sell for the same price.

#37 Vanecdotal on 07.08.14 at 9:31 pm

A few observations: I’m often in Van Westside, and am seeing more for sale signs in recent weeks (single detached, and large multi-suite investment-type character homes). The new builds, and gut-&-reno’d ones waaay over $1.5 million are still sitting largely unsold, whereas I’m noticing the $1 million+ tear-downs (not a typo) have SOLD stickers. Flippers still buying? Sharply segmenting market? Definite impression of a cooling luxury market, whether one subscribes to the perceived reality of the HAM phenomena or not, which seems to contradict the latest luxury house-humping propaganda. Also seeing a lot of unsold new “luxury” condos and townhomes on the West Side, some of these have been on the market for a year or more. Developments are not selling out, and more are due to complete this year. The FOR LEASE signs on vacant storefronts along West 4th, and Broadway almost outnumber the number of active businesses, and it’s the rare retailer or restaurant that makes it past their first lease renewal. There were a handful of businesses that had managed to survive for many years, some for decades, that have finally folded in the past year. I always ask the owners why they’re closing and the #1 response is like so: “The landlord raised the rent by a large margin on renewal, and I can’t reliably turn a profit any longer”. It appears there is A LOT of money parked in commercial real estate here, with building owners who would rather endure lengthy vacancies, than keep the rents in a financially viable zone that attracts tenants. Several large national retailers have also closed their westside locations in the last few years for the same reasons. Excluding the highest-end luxury retailers downtown, (which seem to be thriving), the same problem is seen in Coal Harbour, Yaletown, and on Robson Street. Large swathes of downtown & Westside Van have that empty-ski-resort, end-of-the-tourist-season feel year round now, which is weird in a large, supposedly vibrant urban city. There’s a general lack of of people on the streets, (if you don;t count those that appear to be tourists), all over the place. Reminds me of the ghost city of Winnipeg in the late 80’s, yikes. But We’re Different Here! (stomps foot, drinks more Kool-Aid). We desperately need transparency and regulation of the real estate business here. I did notice this article today though, so maybe there’s hope for some balanced reporting:

http://globalnews.ca/news/1439207/many-canadian-lenders-concerned-about-housing-bubble-survey/

#38 Mr Buyer on 07.08.14 at 9:32 pm

I have been sitting back in awe of this whole bubble thing. When I started trying to figure out how this thing is continuing as it is I realized that most everybody has a vested interest in the continued expansion of the bubble. I mean almost every institution, because many of the people working in these institutions hold mortgages. I always questioned the whole melting thing because in my five minutes of googling bubbles nothing got returned in the first ten links or so that indicated a melting end to a bubble. That is seriously the extent of my understanding so I deferred to those that know better. Unfortunately it is one propaganda campaign after another that continues this continued degradation of our economy. It certainly has been an opportunity for those that have bought and held to cash out and for others to amass small fortunes through buying and flipping. This is undeniable but a great many have gone all in on each iteration of this cycle so I do not see them quietly toning it down. Either the multiples have been permanently been reset, we are going to end up at the bottom of a smoking hole, or the multiples are permanently reset at the bottom of a smoking hole. BTW typing on a touch screen is a load of crap. My wife makes it look feasible but it simply isn’t.

#39 Mister Obvious on 07.08.14 at 9:32 pm

The house next door to a friend’s place in East Vancouver had just recently completed a major renovation and was listed for 1.5M.

It sold almost immediately for 1.7M in a bidding war. That neighbour then bought another house on the same block and plans to repeat the trick. He has complete confidence he will be able to do so.

That same friend’s son owns a condo in Vancouver. He has just purchased an older home in East Van (for probably about 1M). He will keep the condo and rent it out. He will rent out a basement suite too.

Yep, the real estate market for detached homes seems to be on fire within the city limits. Outside? Well, not so much. I know many in the burbs who simply have been “unable to get their price”.

Money seems to have become exceedingly cheap these days with no fear whatsoever of escalating debt. It’s clear why greaterfool.ca is either ridiculed or ignored. I’m utterly baffled as to how RE has remained suspended in mid air for so long.

I’m so happy to have sold out in 2010. It has spared me four years of anxiety and yet cost me nothing thanks to balanced investment.

#40 TFW in China on 07.08.14 at 9:33 pm

Who exactly is fleeing Hong Kong? Hong Kong is a nice city with a really good standard of living, busy night life, an exciting bustling place unlike my Canadian home. Clearly this Realtor has never been.

#41 Terrier on 07.08.14 at 9:33 pm

Ignorant over-indebted masses will never learn. While facing inevitable downturn they’ll rather get busy with new granite countertops, freshly renovated basements and 60″ LCD TV’s. Mass hypnosis is quite deep … wake up snap will make them pretty pissed.

#42 Kurt on 07.08.14 at 9:37 pm

#28 OMG

You can see that the minivan collided with the red car in the background. The paint pails hit the right side of the cargo area and blew open.

When loading your car, always consider the possibility of a sudden stop.

#43 R on 07.08.14 at 9:39 pm

How about regulating the marketing of RE, like they do cigarettes?

#44 X on 07.08.14 at 9:40 pm

RE bears and bulls don’t expect anything from the big Owe.

Unfortunately it is too late for the RE market….IMO the indebtedness of the average Canadian is a greater risk to the Canadian market.

#45 Roy on 07.08.14 at 9:41 pm

The Sotheby’s report was a gloat-fest today. It was on virtually every corporate-fed, realtor media network. Pumped out hard for the masses to swallow. A designed puff piece backed by laughable excuses such as a “strong economy.” Guess they don’t read our GDP and job numbers.

Still if we accept for a moment the Sotheby’s report on “booming luxury housing” as gospel then it only seems logical to conclude that the gov’t and banking policies to “rescue the economy” since 2008 have ultimately only benefited the rich.

Furthermore the report is then indicative that Vancouver and Toronto can essentially be considered the playgrounds, casinos, and “hedge cities” for the offshore rich, as well as the homes of the severely indebted who blindly are just trying to keep up.

Realtors, economists, bankers, politicians, and the corporate media proudly celebrate these facts. Meanwhile the formerly productive, working middle class everywhere around them is being segregated or eviscerated from society.

#46 Nemesis on 07.08.14 at 9:45 pm

#@TotalInvestor. #BeCarefulWhatYouWishFor. #”Das Wunder von Bern”. #FIFA1954

http://youtu.be/vbpN–WiwEU

[NoteToGT: Probably just a case of historical SourGrapes. They thrashed my AncestralProgenitors. And not for the first time. http://en.wikipedia.org/w/index.php?title=1954_FIFA_World_Cup_Final#Impact_on_German_history ]

#47 D.D. Corkum on 07.08.14 at 9:50 pm

I hope you are wrong Garth. We really could use further rule-tightening and I would hope that a Government who likes to be seen as “fiscally responsible” could see that.

Unfortunately I also think you are right. The current minister doesn’t have the same guts that F had to realize things were going the wrong way and do something about it.

#48 ShawnG in TO on 07.08.14 at 9:52 pm

HAM is a factor in Canadian real estate, even if just around the margins. You see, these flippers never seen re price went down before… until now. Pretty soon, they WILL realise, despite what their agent “friend” tells them, Canadian re prices does not hold forever either. and they WILL sell to protect their money.

And another lesson from the Chinese real estate: when the market want to go down, there ain’t a darn thing the gov can do to prop it up.

#49 CanamC on 07.08.14 at 9:58 pm

Get the feds (aka taxpayer) out of the mortgage insurance business; Wind up the CMHC. Won’t happen, but it needs to.

#50 Vanecdotal on 07.08.14 at 10:03 pm

#37 Mr Buyer on 07.08.14 at 9:32 pm

Lol, feel the same. It’s a crap shoot what happens next!

#38 Mister Obvious on 07.08.14 at 9:32 pm

I am noticing the same phenomena as well. That said, buyers are still active in some suburban areas, around here they appear to be (mostly) patiently waiting for the prices to drift down to hit their (low-ball) bid. Some beautifully updated older homes in good areas are selling quickly, but the overpriced, dated, bone-stock homes in the same good areas sit for months or years until they price MUCH lower than where they started. 3 of the latter type of homes have finally sold in the last week nearby, after multiple price reductions and ages on the market. There are also a few $ million+ McMansions in the same area that are not selling at all, some newer builds, some dated. I will be surprised if any of these sell over $ million. In Spendy S. Surrey, the number of mid-to high-end homes ($1.5 million+) with for sale signs has been steadily increasing in the past few months. Recently noted one SOLD sign, (the only SOLD sign on at least ten premium for sale waterfront properties) on a high-end luxury waterfront property near Crescent Beach. Many of these homes have been on/off the market for at least a year or more. Some for several years or more. Prices had been sticky, but in the last month or so some token, and some substantial price drops. Some more modest, older homes (1960’s-70’s starter home) previously priced above $1 million have dropped price substantially to the magic CMHC-friendly sub-$1 million mark. The stale ones are still unsold, but others priced under $1 million in this same area are now selling relatively quickly, then just as quickly being gutted/torn down and rebuilt. It appears flippers may still be active in this market. Worth noting however, several apparent tear down / rebuild flips completed several years ago in Crescent Beach and White Rock proper have sat on the market for several years or more, also sticky in price until recently, then, in the last month or so, price drops. All still asking well over $1 million. A few SOLD signs have appeared in the past few weeks, guess a few finally hit a bid.

#51 Happy Renting on 07.08.14 at 10:06 pm

Re: Garth doing more harm than good

I guess that used house flogger missed the census of Garth’s readership. Mostly thirty-somethings raking in $170k/household (including investment income from our happy, diversified portfolios). Maybe he thinks if Garth wasn’t “harming” us we’d be 20-somethings raking in $170k/household?

#52 Spectacle on 07.08.14 at 10:11 pm

Great , concise points tonight Garth, thnx.

Question to everyone:

The Vancouver sun paper this morning had a story hidden in the back pages. Mayor Gregor Robertson outed as having an extra marital affair!

With his major ties to real estate developers , that “rumour” must be pretty strong, as the realtors, developers etc pretty much run the media and the province of BC , & city of VanityCouver.

What will this impact on the city be, should he be punted at next election? Could be a good thing.

YOUR THOUGHTS?

Regards all….

#53 Kreditanstalt on 07.08.14 at 10:13 pm

“FLEEING Hong Kong”????

Hahahahahahahahahahah…!

#54 Terrier on 07.08.14 at 10:20 pm

#35 “It’s walking distance to Havergal in one of the most desirable areas in Toronto so no, it won’t be dropping to 500K anytime soon”
—————————————————————–
The whole area will be decimated with no one left to gulp 900K shacks … these will implode below 500K in a year or two from now.

#55 Andrew Woburn on 07.08.14 at 10:28 pm

#35 Detalumis on 07.08.14 at 9:28 pm

In my area they don’t even bother with interior pics, they just show the lot and the builders congregate with nobody even going inside. A fully renovated bungalow and a falling apart moldy Granny-special on my street will sell for the same price.
——————————–
#36 Vanecdotal on 07.08.14 at 9:31 pm
A few observations: I’m often in Van Westside, and am seeing more for sale signs in recent weeks (single detached, and large multi-suite investment-type character homes). The new builds, and gut-&-reno’d ones waaay over $1.5 million are still sitting largely unsold, whereas I’m noticing the $1 million+ tear-downs (not a typo) have SOLD stickers.
=====================

According to the Chinese realtor with 20 years experience who sold our West Van property, wealthy mainland Chinese buyers typically want new build and she has seen them tear down a pristine $500K reno to get the lot they want. This could be a factor on the West Side of Vancouver

#56 HAM on 07.08.14 at 10:28 pm

Foreign money has a lot to do with this.

Plus, the left over immigrant investor program applicants are still being processed.

The Quebec Immigrant Investor lottery will take place after that…in September 2014. These applicants then move to Van or T.

Again, RE is a store of wealth. Has nothing to do with incomes anymore IN VAN OR TOR.

#57 Andrew Woburn on 07.08.14 at 10:38 pm

Good news for real estate! Soon lots of truck drivers will take early retirement and buy condos in TO and Vancouver.

Daimler Debuts, Drives Autonomous Mercedes-Benz Semi

“The truck of the future is a Mercedes-Benz that drives itself.” Dr. Wolfgang Bernhard, the member of Daimler’s Board of Management responsible for Daimler Trucks and Buses, came straight to the point in his description of the Mercedes-Benz Future Truck 2025, which had its world premiere today. The truck is equipped with the extremely intelligent Highway Pilot assistance system, which enables it to drive completely autonomously at speeds of up to 85 km/h. Daimler Trucks today demonstrated the vehicle on a trip along a section of the A14 autobahn near the city of Magdeburg, in which the Future Truck drove itself in completely realistic driving situations.”

#58 Cici on 07.08.14 at 10:39 pm

Looks like they are going to keep stretching it and go the bail-in route instead, turning “bank debt” into “equity.”

http://www.cbc.ca/news/business/moody-s-cuts-bank-outlook-to-negative-on-ottawa-s-bail-in-rule-1.2700128

Non-event. — Garth

#59 Cici on 07.08.14 at 10:48 pm

I can’t believe that Garth agreed to publish that self-serving BS realtor promo piece on the blog tonight.

Buy now or buy never…but be prepared to lose a good chunck of your equity (and maybe even your home) in the blink of an eye if the market hiccups, stutters, glugs or burps (and it most likely will).

The higher she rises the further she falls. Baby, bring your risk on – I’m a realtor, you can trust me!

#60 Sheane Wallace on 07.08.14 at 10:52 pm

Deutschland, Deutschland…..
……………………..
#33 Inglorious Investor

Rob Ford is much less dangerous than Joe Owe and Mr H. much less dangerous, I would be much happier if he was leading Canada.

#61 Realtor on 07.08.14 at 10:52 pm

It’s Not the 5% down or cash back mortgages

It’s because Banks have no risk and
Low debt service ratio

Bonds markets barely moved even with stock markets at an all time highs. BoC has no concern with inflation numbers, that should tell you that they do not want to raise rates and drive up the CAD
Higher CAD and soft employment numbers mean no interest rate hike.

Is It me or are we always two years away from the crash
Being two years away

#62 Sheane Wallace on 07.08.14 at 10:53 pm

or far

#63 devore on 07.08.14 at 10:58 pm

That’s called realtor economics.

You want REALTOR(tm) economics?

Behold:

Prime Vancouver property designated flood plain. City proposal aimed to prevent future damage may increase new home prices.

Yup, houses on a flood plain are now more valuable than houses on high ground. Yes, construction costs will go up (as will insurance, undoubtedly) to properly design and construct a house that will have to withstand flooding, but how can one possibly believe land prices will not be negatively affected? Apparently not, house prices can ever head in only one direction.

#64 Mark on 07.08.14 at 10:58 pm

“Looks like they are going to keep stretching it and go the bail-in route instead, turning “bank debt” into “equity.” “

The real bail-out of the banks, one that is already codified into law, is the CMHC making good on the $900B of subprime mortgages it has insured. $600B for 100% insurance, the other $300B or so at 90% insurance. As Garth points out, there’s nothing to worry about with the equity of the Canadian banks. And even if there were to be a ‘bail-in’, the equity that results from the bail-in would be valuable in and of itself.

#65 Mark on 07.08.14 at 10:59 pm

“Is It me or are we always two years away from the crash
Being two years away”

Housing has spent the past year declining in Canada mostly. A few high-end enclaves that are the subject of Realtor exaggerations aside.

#66 young & foolish on 07.08.14 at 11:03 pm

An observation regarding debt from my contemporaries:

We read in the papers that governments all over are carrying huge debt loads, so we figure, what the hell …. we can too! After all, we are the children of helicopter parents who told us we can have everything, NOW, and that no matter what we will get a medal, because we’re special.

What politician wants to get in front of that? Take the punch bowl away and bring on “austerity measures”? Seriously?

#67 Ronaldo on 07.08.14 at 11:07 pm

#20 Retired Boomer – ”Prices, like their cousin the interest rate rise, and fall over time. If you had interest rates say at 12 or 14% like we experienced in the 80′s where would these markets be?”

6% will do the trick.

#68 Chaddywack on 07.08.14 at 11:07 pm

Now it’s rich Hong Kongers coming!!? That is so 1997………

They could have thought of a more creative diversion? What about all the rich Germans that are going to be moving here after cashing in on their World Cup wagers today?

#69 devore on 07.08.14 at 11:07 pm

#19 Axis

I’m off to the Okanagan for some r&r, have to get my life started later I guess.

Ditto. This year we will notably NOT be joined by a certain couple, because you know, with the house and all money is a bit tight. I guess I’ll have to put my life on hold and do without their company.

#70 jess on 07.08.14 at 11:12 pm

inversion deals / “migrations”

…in which a U.S. company buys a foreign target and adopts its home country’s domicile and lower tax rate, or establishes a holding company in a country with a low tax rate—

Acquirers Plot Escape From a Turn on Taxes
Firms Seek Protection From a Change in the Law
(wsj)

=======

film investment scheme
directors of partnerships which made losses of £1.3 billion, which they offset against other income to reduce their tax bill.

http://citywire.co.uk/wealth-manager/david-beckham-among-stars-facing-520m-tax-bill-on-ingenious-alert/a760755

=
Citi to pay $7bn to resolve US probe
Penalty over mortgage-backed securities bigger than analysts expected

http://visar.csustan.edu/aaba/jerseypage.html

#71 Dr nihl s niche on 07.08.14 at 11:12 pm

Maybe it’s time for the Feds to create a “generational mortgage” zeitgeist like that which permeated Japan in the bubble days of the 80s….real estate was vastly overvalued, but no problem, since the kids, grandkids, great-grandkids, would eventually take over all legal rights and obligations….this would allow the house hornos to continue to pay top loon for overpriced real estate with a clear conscience…the prices will keep rising for some time, and then they won’t…..

#72 NotAGreaterFool on 07.08.14 at 11:14 pm

That’s it Garth. This is the best your covert operations can muster up? No juicy details? Suspense is killing me! :)

#73 PeterfromCalgary on 07.08.14 at 11:19 pm

I wonder how much the house price madness in the GTA is driven by the idea some ill informed people have that it is the center of to universe.

Of course this is absurd as their are over 7 billion people alive on earth. Less then 1 out of every 1167 alive humans live in the GTA. They might be the center of Ontario but that is about it.

#74 DW on 07.08.14 at 11:23 pm

Realtors are going door to door in North York proclaiming a particular semi has just sold north of $820,000 and the cracks in the walls are included. There is excitement in the air with the thought that it will all keep going higher. So people are busy renovating and pulling dandelions out of the lawns. Makes the house look more appealing from the street! House lust is ruling at present but for how long?

#75 Flawed on 07.08.14 at 11:26 pm

#57 Cici on 07.08.14 at 10:39 pm
Looks like they are going to keep stretching it and go the bail-in route instead, turning “bank debt” into “equity.”

http://www.cbc.ca/news/business/moody-s-cuts-bank-outlook-to-negative-on-ottawa-s-bail-in-rule-1.2700128

Non-event. — Garth

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

Like HAM and other tax free (laundered money) zones that flood Canada with money hurting the locals?

Yes, exactly. — Garth

#76 Andrew Woburn on 07.08.14 at 11:26 pm

Those who are chortling over the idea people would flee Hong Kong don’t know much history. In the years before China took back Hong Kong, thousands of people did exactly that. That is how Richmond, BC became an Asian city. When the new arrivals realized that the People’s Republic was open for business, and that Canada wasn’t, they left their wives and kids in BC and went back to make real money. That is why there are about 300,000 Canadian citizens in Hong Kong who can all come back tomorrow if the tides change.

Whether that means much to real estate is debatable. First off, Hong Kongers who took out Canadian citizenship likely don’t trust Beijing that much and so probably already own Canadian real estate. Secondly, Hong Kong appears to be too useful to Beijing as a sort of airlock between the mainland economy and the rest of the world so they are not likely to send in the tanks anytime soon. There is now a river of discontent in Hong Kong over the decline of democracy but what did they really expect?

I have asked several mainland Chinese businessmen are they bothered by the lack of democracy. The general answer is if they can continue to make money and keep it, who cares? ( I’m not sure you would get a much different answer from North American businessmen).

#77 Scully on 07.08.14 at 11:28 pm

Lots of talk about foreign money. Lots of talk about “cash” sales. Most of what I see is immigrants speculating, flipping, all to make a buck as many say the jobs (and income) here are abysmal. From what I know personally these homes are mostly mortgaged. Over the last couple of years many of these homes have been taken off the market and rented, then put back on the market, relisted, rerented or sold for less. However, I have never seen the mass delusion I am seeing right now from the herd, (people who really cannot afford to speculate in RE) which seems to be coming from the assumption that interest rates will be near nil forever. Could this be the hockey stick?

#78 Flawed on 07.08.14 at 11:28 pm

#59 Sheane Wallace on 07.08.14 at 10:52 pm
Deutschland, Deutschland…..
……………………..
#33 Inglorious Investor

Rob Ford is much less dangerous than Joe Owe and Mr H. much less dangerous, I would be much happier if he was leading Canada.

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

If Ceaser and Praetorian Owe were both drunk all the time there would be allot less damage to Canadians.

#79 45north on 07.08.14 at 11:28 pm

So will Joe Owe be unveiling new rules to make houses affordable again? Raise minimum down payments? Reduce CMHC coverage? Finally trash no-money-down financing or cash-back mortgage bribes?

Nah. Not this time. Sources tell me it’ll be boring.

very boring

http://business.financialpost.com/2014/07/08/joe-oliver-to-announce-more-provinces-to-join-national-securities-regulator/?__federated=1

the Federal Government can bring prices down in a heart beat. Reasons to do so:
– prevent mal-investment
– encourage investment in productive assets
– protect the middle/ working class

#80 Suede on 07.08.14 at 11:29 pm

Insurance bet alert.

VIX Oct call option up 15%.

Still no sign of housing market in Vancouver slowing down. Had a cousin want to enter a bidding war.

Bad things happen when exhausted people just sit around and laugh

#81 Vangrrl on 07.08.14 at 11:30 pm

Smoking man- speaking of 5 year olds, you need one to teach you how to spell. Your writing brings on a headache.

#82 jess on 07.08.14 at 11:36 pm

single security regulator hq toronto

#83 supermike on 07.08.14 at 11:55 pm

Several things are sustaining the RE

1. First and formost, easy mony. With CMHC, banks have no any risk. So why don’t banks keep turning a blink eye and giving dirty cheap mortgage money out?

2. Low interest.

3. Foreign buyers.

As long as those factors don’t change. The housing price will keep going up. Until the bubble bursts. It will. Just a matter of timing. There is no such thing that goes up forever in the world. Then all hardworking taxpayers will suffer the Consequence, unfortunately, except those politicians because they are normally rich and have fat pensions, and RE agents because they have made enough money.

Thus, those factors won’t change. At least not until next election. We sober people might have to watch this stun for a while. And we don’t have much to do. Whining won’t help. Just find a way to protest ourselves as much as possible when the crisis finally comes. Maybe a balanced portfolio is the best try.

We are doomed guys!

#84 KommyKim on 07.08.14 at 11:57 pm

RE: #28 omg on 07.08.14 at 9:11 pm
WTF happened in that car?

It was in an accident on it’s way home from Home Depot with a load of paint in the back. You can see the crumpled hood of the left turning red car it hit. It looks like a fireman on the right hand side of the picture.

#85 NoName on 07.09.14 at 12:07 am

Blast From The past
1926 florida RE bubble
http://www.investopedia.com/features/crashes/crashes4.asp

#86 Flawed on 07.09.14 at 12:07 am

It’s all about the global hunt for money. This is why bitcoin is going to take off. It’s a global de-centralized currency that is not hierarchical or corruptible. Too bad Canadians can’t get outside of their own asses. It’s taking off all over the world but I keep reading hogwash from people that do not seem to do enough research and think that its only about drugs and terrorism. Ummm…hey guess what? Tens of billions of US Dollar Bills fund 99% of drugs and terrorism. Not bitcoin. And the higher and higher and higher the debt of govt and people gets…the higher bitcoin will go. And the best thing is? Its run by the people of Earth. Not dictator Harpo or Obozo or the Taliban or Kim Jong Idiot or the Chinese Politburo or the President of Liberia or whomever.

Nothing the govt says is the truth. Absolutely nothing.

http://armstrongeconomics.com/2014/07/08/1999-world-economic-conference-vancouver/

http://armstrongeconomics.com/2014/07/07/computer-modeling-depends-upon-the-input-un-global-warming-model-dead-wrong-for-18-years/

#87 No HAM here LOL on 07.09.14 at 12:47 am

Chinese Cash-Bearing Buyers Drive U.S. Foreign Sales Jump

http://www.bloomberg.com/news/2014-07-08/chinese-cash-bearing-buyers-drive-u-s-foreign-sales-jump.html

#88 Bobs friend on 07.09.14 at 12:59 am

If Gregor Robertson loses, his nemesis Rob McDonald, an executive of the competing civic political party NPA, who also happens to be a developer himself, will keep the party going. This guy also used to work for former premier Gordon Campbell

#89 Ilona on 07.09.14 at 1:58 am

Since when Bathurst & Lawrence is “North Toronto” or “the burbs”?! Last time I checked, it was Toronto CENTRAL C4: http://www.manojatri.com/pp_08.asp (live in the same district)

No offence, but more often than not I think your blog should be called dramaqueen.ca :)

Of course it is North Toronto. Thirty minutes to DT. — Garth

#90 Freedom First on 07.09.14 at 2:42 am

When others all around you are losing their sanity and you can keep calm you will have achieved mental and emotional maturity.

Unfortunately, many many millions of citizens in many countries world wide were bankrupted or financially ruined by their crashing RE markets in recent years, led to the slaughter by the same people in the same occupations that are doing the same things to Canadians. And it is only the bankrupted that will bear any consequences. Criminal con artists refer to their prey as “Marks”.

Thank you for your honest financial Blog Garth. Many people have already personally and publicly thanked you for their financial solvency thanks to you. With what is coming, and F knew, as he in his own way told us he was worried and warned Canadians numerous times, when TSHTF, it WILL be revealed how many people will be very grateful they dodged this deadly financial bullet. The taunting is here but the surrender will come. Probability- 100%.

#91 dosouth on 07.09.14 at 4:02 am

Nanaimo is still the place to be….. apparently housing prices are taking off? (again)

This hype is getting long in the tooth…

#92 Aaron - Melbourne on 07.09.14 at 4:04 am

If anyone is interested in reading about the Aussie RE bubble, here is a good primer about where it all started down under… (tax policy)

http://www.abc.net.au/news/2014-07-07/janda-few-positives-to-be-found-in-negative-gearing/5576662

#93 World Traveller on 07.09.14 at 4:29 am

So if this bubble continues, how can we renters take advantage, if any blogdogs have advice I’m interested. I have some money in stocks but I want to diversify and make some real money from investing. Are REIT’s still a good idea? Is the couch potato investor a good way to go? I’m not an experienced investor, I made money flipping properties but I see the end of the line coming soon so not willing to buy another house or even condo til the dust settles, RE agents not withstanding.

#94 Londoner on 07.09.14 at 4:59 am

I like looking at the demographics tab on the mls listing. Almost a quarter of the population identified Tagalog as their primary language. I had no idea.

#95 Ralph Cramdown on 07.09.14 at 6:12 am

Good grief, it’ll be to announce that Sask and NB are signing on to the national securities regulator. Nothing against those two fine provinces, but until Alberta or Quebec announce, it’s a nothingburger. Thanks, Owe!

#96 Smoking Man on 07.09.14 at 6:25 am

#79 Vangrrl on 07.08.14 at 11:30 pm

Smoking man- speaking of 5 year olds, you need one to teach you how to spell. Your writing brings on a headache.
………..

Oh I can spell, it’s just this darn phone, auto correct and fat thumbs.

Speaking of spelling, I suggest you replace an R with an I in your name.

#97 B_Mo on 07.09.14 at 6:57 am

So, I’m not a die hard fan, but do enjoy. Sudbury Ontario, so many houses have the sticker “New Price” or “Reduced”. and two weeks ago, I spoke to a fella in the military in North Bay, who bought in 07 for 420 and will be lucky to get 320 today. I told him, real estate will drop by 30%, and he said, I already has!
Then last Sat, I was speaking to friend, who still believes RE is a must, and renting is a waste of money.

#98 Crossbordershopper on 07.09.14 at 7:04 am

Canadians are totally maxed out. The economy is soft because the level of disposable income is so low. No one can afford to buy anything extra since every single dollar is accounted for. Walmart CEO said the real unemployment higher, and his numbers are flat and will stay that way for a while. and the same this side of the border. In Canada if everyone is maxed out and every dollar spoken for and no wage growth, then thats why the economy will not grow. Well, until the immigrants come and prop it up by buying the old Canadians house. So immigration raises real estate values and depresses wages. Everyone pays cash for everything and no one pays list price for anything, well except painted drywall sheets and oriental wafferboard sheets put together that people call houses. These homes are made out of paper and with canadian weather and shifting earth, in 25 years when you have given up so much to own it, has to be rebuild because its falling apart so you pay for it again. If you want to buy and sell these things like a stock or a comic book go ahead, but its all about rent to price ratio because time is what we should be valuing not money. Money is created from thin air, no one gives you time back. I asked someone for my time back when we were arguing over something, he said what, i said you have wasted 2 hours of my time arguing over this and I want my time back the money is mute point, you are wasting my life. He said how am i going to do that I said exactly,
The life Ponzi scheme. Charles would be so proud.

#99 Ralph Cramdown on 07.09.14 at 7:19 am

#84 Flawed — “It’s all about the global hunt for money. This is why bitcoin is going to take off. It’s a global de-centralized currency that is not hierarchical or corruptible.”

People with actual money are in a hunt for RETURN. Bitcoin is just a manifestation of the alternative assets frenzy that happens every cycle. Rich people buy modern art (last cycle it was impressionist art) and vintage wines and spirits, middle class people buy vintage sports cars and the rest buy vintage sports cards. Morons buy bitcoin. There’s plenty of money to be made if you get on and off at the right point in the cycle. Bitcoin is funny in that it promises scarcity without any actual residual value — you can’t hang it over the fireplace and enjoy it while it appreciates, or take your peers down into your dusty wine cellar to appreciate it, and it never mails you a dividend cheque.

#100 Ralph Cramdown on 07.09.14 at 7:27 am

#92 Londoner — “Almost a quarter of the population identified Tagalog as their primary language.”

It’s the help. With both parents working overtime to pay the mortgage, there’s no time to take the tyke to the park, so they import a girl to do it. Two years of that, and she can become a permanent resident and bring in her family. There really is a new life awaiting in the off-island colonies!

#101 ozy - yesterday's article and tomorrow's article on 07.09.14 at 7:39 am

of course the sharks will bite ya, no one wants money made of thin air being destroyed – penalty, penalty, penalty

no worries, the balloon will deflate slowly, the sheep is tame in Kanata. don’t ask why – it was the selection process – my guess…hardworking klass. too busy to think differently. I wish I had their determination, but hey, speculation and even whichcraft is legal now….
no more stigma

when is that article on Fractional Lending coming-up Garth, I feel folks from Kanata – the village with tents – do not have a core understanding of the root of the unaffordable housing problem…

#102 Kevin on 07.09.14 at 7:39 am

james (#26): “I am really curious about all these people ‘fleeing Hong Kong’. Is Godzilla going to attack? Rising sea levels?”

4 AM Sunrise (#27): “‘…including those fleeing Hong Kong’??? Did this realtor’s message wash ashore in a bottle from 1997?”

Hundreds are being arrested as the government cracks down against pro-democracy rallies. Try reading the news once in a while.

#103 TurnerNation on 07.09.14 at 7:55 am

A funny thing happened on the way to Mexico.
(1st World countries, we hardly knew ya.)

“Kodiak to close Terra Nova Shoes, move jobs to Ontario

Kodiak Group Holdings said Tuesday it can no longer afford to keep running Terra Nova Shoes, a factory that has gone through several owners since it was founded in 1971.

About 80 people will lose their jobs, although Slade said the economic benefits from the factory extend well beyond the main workforce.”

http://www.cbc.ca/news/canada/newfoundland-labrador/terra-nova-shoes-shutdown-devastating-mha-says-1.2700779

#104 saskatoon on 07.09.14 at 7:59 am

garth,

wtf(?!):

http://www.thestar.com/business/2014/07/09/toronto_housing_market_on_track_to_be_hottest_in_canada_for_2014_report.html#

#105 Uh Oh Canada on 07.09.14 at 8:14 am

Renting is too sweet. We estimate the annual property tax on our rented townhouse should be about 3k- so this is our annual budget for new house stuff like stainless steel appliances, new light fixtures, etc. For owners, this money goes to the tax man and they don’t see anything for it. Also, thanks to renting, we’re debt free, work less, and travel a lot. I notice that all my home ownership friends are the opposite. This is my observations, so I am in no rush to buy until the bubble really pops.

#106 Incubus on 07.09.14 at 8:27 am

They should close the CMHC for good.

When a loan is due , the insurance is no longer valid and the bank is left alone.

Without CMHC, the market will reajuste rapidly.

#107 rick on 07.09.14 at 8:51 am

To that real estate scammer you quoted , screw you a-hole.

#108 OttawaMike on 07.09.14 at 8:57 am

101 TurnerNation on 07.09.14 at 7:55 am

Too bad. Terra made a great product that I have been buying for the last 25 years. I wonder if the quality will suffer?

We are becoming like the middle east –where we don’t make any real products and bring in slaves to perform our menial tasks under the TWP.

#109 Holy Crap Wheres The Tylenol on 07.09.14 at 9:20 am

DELETED

#110 :):(Ying Yang on 07.09.14 at 9:32 am

#94 Smoking Man on 07.09.14 at 6:25 am
#79 Vangrrl on 07.08.14 at 11:30 pm
Smoking man- speaking of 5 year olds, you need one to teach you how to spell. Your writing brings on a headache.
………..
Oh I can spell, it’s just this darn phone, auto correct and fat thumbs.
Speaking of spelling, I suggest you replace an R with an I in your name.
……………………………………………………………………….

Smoking Man there is no excuse for spelling or grammar mistakes today. Why don’t you get one of the Samsung Galaxy 5 big ass phones. I saw girls in Malaysia carrying them around, it was a joke they are so big. They have keyboards the size of small country’s. There, no excuse! BTW I think Vangirl was my neighbour when I lived there. Then again all girls from the lower mainland call them selves Vangirl…………….
Just got back from Malaysia, spent two weeks in sweltering hell there. Saw my brother, hates job, hates Malaysia, loves the money………..he said five years max he’s out and back to North America or perhaps the UK. He said the banking industry in the far east is insane!

#111 The real Kip on 07.09.14 at 9:41 am

Don’t lose your head over it but I hear prices are creeping higher in Mosul, Iraq. Maybe we could all “vulch” and live there.

#112 Life's a supermartingale on 07.09.14 at 9:43 am

“the buying momentum comes from a heady mix of cheap interest rates, bad intel and financial illiteracy.”

Garth, you keep saying that you want less government but more regulation to prevent the financial illiterate from falling into life’s traps. You can’t have it both ways.

I agree with you that the government has badly distorted house prices, but the inefficiency is from the way risk is split in society. The government has forced the taxpayers into a giant insurance scheme on terms that at an individual investor level we would not have chosen. The argument is simply that CMHC is setting the wrong price with the difference made up by a government subsidy. I think that is largely true. But the response by the public is entirely rational. They are not financially illiterate as you say. They are buying and holding low expected return assets (houses) for consumption smoothing and cross insurance purposes. They are not illiterate, but rational – the government is subsidizing housing and people respond. The harm, of course, is that the economy is pushed off its efficient frontier because risk is allocated inefficiently. All investment projects in Canada must now generate higher expected returns on a risk adjusted basis to make up for the government’s mortgage insurance program (and other implied bank bail out schemes). As a result, many new ideas simply don’t get developed – and that’s the harm.

Garth, there are no such thing as bubbles. People are acting rationally – the market is efficient after a government intervention even if the economy is no longer on its efficient frontier.

The real estate industry should be regulated as the financial business is. That does not mean intervention in the marketplace. It means transparency and ethical, responsible treatment of consumers. — Garth

#113 };-) aka Devil's Advocate on 07.09.14 at 9:58 am

#144 Ogopogo on 07.07.14 at 2:08 pm

#128 };-) aka Devil’s Advocate on 07.07.14 at 11:02 am
Don’t run with scissors
and
SHIFT happens.
};-)

Your faux meme is about as clichéd as everything else you spew here.

How about commenting on the desperate situation of many Kelowna home would-be sellers. This is how the CMHC report puts it, with characteristic realtor-speak:
“Buyers will continue to benefit from an ample supply of listings and price competition among sellers”. It doesn’t take a genius to read between the lines. Translation: “Sellers will continue to suffer due to an oversupply of listings and desperation among sellers”.
I’m lovin’ it!

LOL… OK I’ll oblige;

Tell that to all the buyers who can’t find a suitable home or when they do they are faced with competitive multiple offers. FACT

Tell that to all the REALTORS desperately seeking inventory. FACT

Believe what you want to believe but I’m here to tell you that in some Kelowna market segments there is barely one months worth of inventory. For example; there are just 2 homes for sale in the adult community of Balmoral where there have been 11 sales in the past 180 days.

There are currently 579 SFD properties in Kelowna (excluding Big White, Fintry and Beaverdell/Carmi) listed for sale in the $500,000 and under price category and there have been 886 such properties sold in the last 180 days. FACT

You do the math…

I am not thrilled by these statistics. The irrational exuberance they spawn sets the pace for a market correction as we eventually overshot and the unwarranted gains are culled. But that happens only to the greedy who get in at the very peak. Those who get in at the “safe zone” for the long run will do just fine even though they see some of their new found equity growth eroded by the subsequent correction provided they don’t get silly thinking they are “richer than they think” and borrow against it only to find themselves under water when the market does take back those unwarranted gains but not all the gains.

#114 Life's a supermartingale on 07.09.14 at 10:09 am

The problem with most regulation is capture. Almost all financial regulation ends up helping the well connected and the powerful at the expense of the consumer by limiting competition. This is why our banking system is nearly 100% debt financed (and mostly of the short term runnable kind). Notice how banks complain that equity is too expensive and that debt’s cheap? Hmm, I wonder why…

Yelp reviews and the media (in which you did a good job) do far more to keep business honest than government regulation.

#115 maxx on 07.09.14 at 10:12 am

#16 Temporary Foreign Prime Minister on 07.08.14 at 8:52 pm

” To REALTURD® , consider and acknowledge that by renting in the current housing market, I will always have more disposable income to invest in things that will actually go UP in value in the long term.”

LOL! To which I would add: …..”thereby providing ample disposable cash with which to socialize as and where I please, travel, donate and build an early retirement, because, as we all know, the workaday world is increasingly sooooooo much fun. Yes?”

#116 -=jwkj=- on 07.09.14 at 10:28 am

@ #106 Ottawa mike. They are moving the boot factory to Ontario. Cambridge Ontario to be precise…

#117 Sheane Wallace on 07.09.14 at 10:30 am

No Garth, it is not that simple and non-important anouncement.

https://ca.finance.yahoo.com/news/saskatchewan-n-b-board-ottawa-says-national-regulator-130640844.html

They want to create a national securities regulator, with the new office overseeing financial and capital markets.

Giving more power to people who can missmanage financial and monetary policies and risk with CMHC, giving the incompetent more power is not a non-event.
They will simply remove any risk from financial institutions and keep bailing them out with our money as they are too important to fail. As with CMHC.

The feds announced two of the minor provinces agree to a national regulator. Does not mean we are any closer to it happening – which is a proposal already years old. Yawn. — Garth

#118 april on 07.09.14 at 10:31 am

/Users/colletteedmonds/Desktop/▶ The Decline and Fall of Canada. Prepare Yourself Accordingly. – YouTube.webarchive
I don’t know anything about this source but found it very interesting and eye opening. He covers alot of subjects including Canadian housing, interest rates, government, etc.

#119 };-) aka Devil's Advocate on 07.09.14 at 10:32 am

The real estate industry should be regulated as the financial business is. That does not mean intervention in the marketplace. It means transparency and ethical, responsible treatment of consumers. — Garth “

Please do elaborate…

Are you even aware of the regulation that does exist?

Must I mention Bernie Madoff and a host of others.

In every lot bad apples can be found.

Purchasers of real estate are not nearly so vulnerable of being duped out of EVERYTHING as they can be by the financial services industry (bricks and mortar vs. paper, pretty hard run away and hide a house in a secret offshore bank account). And so the regulation of the real estate industry may not need to be so stringent as it is of your financial services sector, but regulated it is.

There is a saying in the real estate industry; “It’s not a matter of if you will be sued but when you will be sued”. The penalties can be harsh and the courts, and even our own internal real estate board tribunals, do tend to favour the consumer.

ON A SIDE: In either case, is it not somewhat incumbent upon the consumer to exercise some reasonable care in choosing their representative and does it not go to the heart of the saying “a fool and their money are soon parted”. Beware, in any lot there are bad apples you need to avoid.

Madoff was an American. We live in Canada. I am well aware of how real estate is regulated, and abuse abounds. You have no point. — Garth

#120 Doug in London on 07.09.14 at 11:43 am

And if you don’t act now you will “never get your life started.”
————————————————————–
Well, I acted last year, scooping up one of the few kinds of Canadian real estate that were on sale, namely REITs, and am glad to have done so. They just hum along, minding their own business, regularly paying out distributions. Is it too late to get in now? I don’t know, but TPH looks like a good buy with a generous yield.

#121 Ogopogo on 07.09.14 at 12:14 pm

#89 Ilona on 07.09.14 at 1:58 am
Since when Bathurst & Lawrence is “North Toronto” or “the burbs”?! Last time I checked, it was Toronto CENTRAL C4: http://www.manojatri.com/pp_08.asp (live in the same district)

No offence, but more often than not I think your blog should be called dramaqueen.ca :)

Of course it is North Toronto. Thirty minutes to DT. — Garth

You’re playing loose with both geography and official designation, Ilona. Garth is right, even if he’s saying “North Toronto” instead of “North York”. Don’t believe me? Here is how TD lists their Bathurst & Lawrence address:

Branch 0328 at BATHURST and LAWRENCE
Address: 3114 BATHURST STREET
NORTH YORK , ON M6A2A1

Source: https://www.tdcanadatrust.com/cgi-bin/locator/drill.cgi?TRANSIT=0328

Ilona, you’ve just experienced exactly what I mocked here the other day: the “gotcha” crowd who think they’ve caught Garth on a snafu.

Welcome to the growing list of bumbling fools who deserve to wear a sign across their chests: “FAIL”

#122 Ogopogo on 07.09.14 at 12:19 pm

#119 };-) aka Devil’s Advocate on 07.09.14 at 10:32 am

Blah, blah, blah, blah, blah. Blah, blah, blah, blah…blah.

Madoff was an American. We live in Canada. I am well aware of how real estate is regulated, and abuse abounds. You have no point. — Garth

And speaking of fails… What is a day without DA getting pwned?

#123 Mister Obvious on 07.09.14 at 12:19 pm

“Mr. Soper said relatively modest strength for the market means further government intervention is not warranted.”

http://tinyurl.com/k32s8ps
———————-

So there! Hands off Joe Owe. Just in case you were getting any ideas.

#124 Moronihah in Calgary on 07.09.14 at 12:31 pm

“In Calgary, a single family home averages $510,000, which is 11% more than in June of 2013.”

I agree with the Toronto realtor. It is very very easy to say dont buy a mortgage if you are already reasonably secure and are close to retirement. I doubt that Garth rents. Yes people need to be aware of pitfalls of what could happen if a mortgage were acquired, and for that, this blog is valuable. At a different angle, many of these ideas will dissuade those that are paying rents the same as a mortgage, especially in Calgary.

I acquired a mortgage in 2011 for $420K. That same house is now “valued” at $500K. Whatever. It isnt like I am moving anytime soon and I will be grateful to be well and alive when and if I ever retire. As it stands now likely my rent would be more than my mortgage payments to the bank are. If and when a crash does happen and interest rates skyrocket I may not be able to renew despite having a six figure income. The other angle is I could have continued renting for the next 40 years with skyrocketing rents and a steady income. For some people who will retire sooner renting may be the better option.

The problem with this blog or any trying to persuade is that their idea is always the best. There are many angles of view to problems and all angles should be considered when making a decision based on both emotion and logic. Garth wont admit that much of what he says in terms of trends isnt backed by historical data. And that is why anyone reading this blog should question strongly everything they are reading. I know I ignored this blog for years before I purchased a mortgage.

#125 Patiently Waiting on 07.09.14 at 12:38 pm

Garth I have not posted for some time, however, as much as I agree this will not end well, the reality is the inmates are in charge of the asylum. It simply boggles the mind how far this real estate bubble can go … and there simply is no denying the impact that foreign buyers have had, and continue to have on home prices … especially higher end home prices … In my hood (South Surrey / White Rock) prices have increased by $500,000 to $1,000,000 for mid to higher end homes since 2011. All due to Chinese buyers. A friend who has his ocean view home for sale has had 80 plus showings so far … everyone of them Chinese. Unfortunately, even with over indebted Canadians this will not change until China has it’s own economic downturn / hard landing … and this could be many years away … the Chinese are also influencing home prices by buying up US real estate as well … see article below … I am not happy about it but nothing short of a Chinese hard landing will stop this … at least not in the major cities, and not in the near to medium term …

http://www.bnn.ca/News/2014/7/9/US-foreign-sales-fuelled-by-Chinese-homebuyers-who-pay-cash-.aspx

#126 Flawed on 07.09.14 at 12:56 pm

#99 Ralph Cramdown on 07.09.14 at 7:19 am
#84 Flawed — “It’s all about the global hunt for money. This is why bitcoin is going to take off. It’s a global de-centralized currency that is not hierarchical or corruptible.”

People with actual money are in a hunt for RETURN. Bitcoin is just a manifestation of the alternative assets frenzy that happens every cycle. Rich people buy modern art (last cycle it was impressionist art) and vintage wines and spirits, middle class people buy vintage sports cars and the rest buy vintage sports cards. Morons buy bitcoin. There’s plenty of money to be made if you get on and off at the right point in the cycle. Bitcoin is funny in that it promises scarcity without any actual residual value — you can’t hang it over the fireplace and enjoy it while it appreciates, or take your peers down into your dusty wine cellar to appreciate it, and it never mails you a dividend cheque.

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

Sigh – Oldtimers……

People buy bitcoin because they are tired of supporting a corrupted and co-opted system which you obviously support. Where does return or hanging of crap come into any of this conversation? Bitcoin is digital money used to “buy old cars” or “old paintings”. Welcome to the 21st century old man.

http://recode.net/2014/07/08/you-can-now-buy-a-car-with-bitcoin-and-have-it-delivered-with-a-bow/

http://www.entrepreneur.com/article/233809

Do you think the list of stuff you can “buy” with bitcoin is going to go………down Ralph?

#127 Holy Crap Wheres the Tylenol on 07.09.14 at 12:57 pm

#109 Holy Crap Wheres The Tylenol on 07.09.14 at 9:20 am

DELETED
______________________________________________

Wow a first, I still say Amen to #34 Inglorious Investor on 07.08.14 at 9:25 pm.

Ok then how about all of the current applicants to attain the Mayoral position are mundane? With the exception of RoboFord!

#128 Blacksheep on 07.09.14 at 12:57 pm

Madoff was an American. We live in Canada. — Garth
——————————-
Whew!! Do I feel better.

For all these years, we have been worrying about a housing correction similar to what occurred in the US, when clearly, THEY are american, but WE are canadian.

And our correction will be moose & maple. — Garth

#129 Mark on 07.09.14 at 1:05 pm

“Well, I acted last year, scooping up one of the few kinds of Canadian real estate that were on sale, namely REITs, and am glad to have done so. “

REITs on sale? What are you smoking? Very few, if any actually have GAAP earnings. And firms like Loblaws, Sobey’s, amongst others, are selling their RE into overpriced and inflated REITs as fast as they possibly can to take advantage of the bubble.

#130 45north on 07.09.14 at 1:18 pm

No Ham here LOL : from your link : Chinese purchases of U.S. homes are likely to continue increasing as the country’s swelling ranks of affluent consumers seek refuge from pollution and political and economic uncertainty

Mark Hanson writes about the “all cash cohort” but no where does he talk about Chinese buyers. I guess I’d have to talk to him to see what he thinks.

B_Mo : two weeks ago, I spoke to a fella in the military in North Bay, who bought in 07 for 420 and will be lucky to get 320 today.

that got my attention

CrossBorderShopper : I asked someone for my time back

pretty funny

Life’s a SuperMartingale: The problem with most regulation is capture. Almost all financial regulation ends up helping the well connected and the powerful at the expense of the consumer by limiting competition.

regulator capture is significant

super martingale : http://en.wikipedia.org/wiki/Martingale_(probability_theory)#Submartingales.2C_supermartingales.2C_and_relationship_to_harmonic_functions

I’m not making this up!

#131 Victor V on 07.09.14 at 1:31 pm

http://business.financialpost.com/2014/07/09/unprecedented-regulatory-changes-will-have-profound-effect-on-small-advisors-study-says/

TORONTO – Facing new regulations that could push many financial advisors out of business, Advocis has commissioned a study to demonstrate the economic and financial contribution small advisors make across the country.

The small and medium-sized segment of the financial advice industry, which consists largely of two and three-person shops, has more impact on the economy in terms of employment and contribution to GDP than the pharmaceutical, motor vehicle manufacturing or aerospace industries, according to the study from PwC to be released Wednesday.

This “critical subset of the financial advice industry,” which employs 182,000 Canadians and contributes $19-billion to GDP, is facing “unprecedented changes” including current and potential regulatory reforms that could have a “profound effect,” the study says.

Among the national reforms under consideration is a ban on embedded commissions, which would have a huge impact on advisors whose primary business is the sale of mutual funds.

The Ontario government is also moving to regulate the sector, with the initial focus understood to be on uniform standards for advisor education and the use of titles.

What have I always said about salesguys masquerading as advisors? — Garth

#132 Musty Basement Dweller on 07.09.14 at 2:47 pm

I see our esteemed finance minister came out with his big announcement today!!!!! (the one that we thought might be some leadership to deal with the present housing bubble).

Here it is…Saskatchewan and New Brunswick are ONBOARD with changing something to do with regulation. WOW this is big news!!!!! Way to go Joe what a leader!!!!

#133 Bob Rice on 07.09.14 at 2:51 pm

This RE market probably still has legs… from the minutes of the last fed reserve meeting:

“In the end, the Fed statement stuck to the current guidance that rates will likely remain low for a “considerable time” after the bond purchases end.” G & M

Fed rates are not bond rates. No surprise in this language whatsoever. — Garth

#134 Rainclouds on 07.09.14 at 2:58 pm

#125 Patiently Waiting
“In my hood (South Surrey / White Rock) prices have increased by $500,000 to $1,000,000 for mid to higher end homes since 2011”

Really?

http://vancouverpricedrop.wordpress.com/2014/07/08/spotlight-white-rock-south-surrey-july-8-2014/

#135 Rational Optimist on 07.09.14 at 3:04 pm

127 Flawed on 07.09.14 at 12:56 pm

‘Do you think the list of stuff you can “buy” with bitcoin is going to go………down Ralph?’

Just because KFC is willing to entertain any possibility for publicity, including letting you pay for a chicken sandwich with an e-mail transfer, does not mean anything is a currency.

Is their menu printed in play money, and they go and check the price of dollars if I want to pay them in dollars…or is it the other way around?

#136 Smoking Man on 07.09.14 at 3:40 pm

Ying Yang

Smoking Man there is no excuse for spelling or grammar mistakes today.
……….
Perhaps it’s some sort of rebellious psychopathic form of protest to what’s wrong with the world.

Everyone’s wired differently is all I’m saying.

#137 Doug in London on 07.09.14 at 3:52 pm

@Mark, post #130:
Look at various REITs and you’ll see the prices dropped last year (Boxing Week sales came early!) and are now climbing up again. When the prices were lower, the yield was higher, and effectively it still is if you bought at those prices. What part of buy low, sell high is it that don’t you understand? Did you also avoid buying preferred share ETFs and utility stocks while they were on sale last year? REITs are part of a balanced portfolio and, like other assets, are best purchased when they are on sale. Yes, REITs DO have earnings, it’s comes from charging the tenants rent. Last but certainly not least, buying REITs while they were on sale sure beats the hell out of buying overpriced houses.

#138 Ilona on 07.09.14 at 4:17 pm

#121 Ogopogo on 07.09.14 at 12:14 pm

Ilona, you’ve just experienced exactly what I mocked here the other day: the “gotcha” crowd who think they’ve caught Garth on a snafu.

Welcome to the growing list of bumbling fools who deserve to wear a sign across their chests: “FAIL”

Sure, I’ll gladly wear this sign when I tell my friends from Richmond Hill that I also live in “the burbs” aka North York – and silly me thought that I live mid-townish (since 1994, so remember when York, North York et al became Toronto), surrounded by most expensive real estate in the city lol

Will go back to hang out with other “failures” – who actually try to solve the problem when faced with “the surprise”: Ironically, TD eventually gave me the loan after they’d rejected me 3 pervious times from 3 different divisions…not only that, but they also gave me the mortgages on two smaller properties at the same time…so, after 3-4 months or so of rejections, from everyone, they gave me not one, but three..

Hope I made you feel better about yourself (which this blog’s scare tactic seems to do the best) – and thank you for reminding me why I usually don’t bother reading the comments, let along commenting myself (even if it passes “the guard dog” – one of “the blog dogs” will pounce :)

#139 VICTORIA TEA PARTY on 07.09.14 at 4:19 pm

THE US FED: IT CAN GIVETH AND IT CAN ALSO TAKETH AWAY!

We’re all transfixed, I suppose, on what will happen when the American QE blitzkrieg ends later this year and then interest rates start going back up.

American blogger Karl Denninger explains that the Fed has no choice but to end QE when it said it would, because…

“…Quite some time ago I explained why The Fed had to end QE. It’s really quite simple — duration matching among bond portfolio managers forced it to end because QE is progressively destroying the return they rely on to fund their obligations, and The Fed knows it.

The bad news is that just as the bad impact on these portfolio returns came on slowly (and ultimately strangled The Fed’s ability to continue QE) it similarly bleeds off slowly and thus the depressive effect on the economy will persist for the next five years as well, slowly fading off…”

Translated into Plain English, US central bank interest rates WILL begin to climb shortly after October of this year.

And Canada’s central bank will dutifully follow. After that watch the bond market, and after that watch the real estate industry begin to fall on its sword of Ponzi nonsense (both here and in the US where some hous prices are in serious bubble terrritory).

So all those Canucks who have been fogging mirrors and tconjuring great hubris-originating real estate wealth thoughts and, in the end, “bought” that little tiny broom closet high in Hog Town’s sky, will come crashing back to earth, even though said broom closet won’t be ready for occupancy for another three years, because it has yet to be built!

This is just brilliant decision making, and St. Garth of Thou Art So Screwed Inc., will be penning a lot of I-told-you-so pieces.

So, stand by for that.

Yes, the Fed gives and it takes.

In the “give” category, there were the negligible interest rates, after 2008’s GFC, but nothing much in fulfilled “promises” of huge economic growth anywhere in the world since.

SO, THE FOLLOWING HAS RESULTED

China’s rejiggering its economy to pop various consumer durable and non-durable bubbles (thanks the the US Fed); Europe continues sliding into even more irrelevance on ALL fronts; South America is an economically troubled area; South Africa, similarly; India struggles with serious economic difficulties; Canada with a clueless finance minister staring at a set of very bright on-rushing headlights from a fast coal train can’t figure out anything; Russia punching back at the stumbling American Empire; and All the Rest in some form of economic/warlike pickle or other.

Loverly.

Now ,finally, the Fed is about to take away. And in doing so it hopes to correct some, or all, of the above worldwide ailments and travails.

Good luck with that. Empirical overreach that is otherwise known as, displayed in its finest raiments. Check your history books.

#140 it this possible? on 07.09.14 at 4:25 pm

Hi Blog Dogs,

This matter is a little unrelated but I really hope to get your feedback.

I retained a lawyer to represent me because I was fired without cause in a non-unionized workplace. Today, I just found that the lawyer that represents the firm I am about to sue works for the same Lawyer Firm. I am astonished. The two lawyer are also co-workers at the same small law firm.

I provided my lawyer with sensitive info, and he already recommended me not to pursue litigation and accept what the company is offering.

I feel very dissapointed. This remains me when a buyer and a seller have the same representat.

Any advice would be greatly appreciated.

Thanks

#141 Nomad on 07.09.14 at 4:42 pm

“Quebec loses 625 jobs in 24 hours as two factories close.”
http://www.bnn.ca/News/2014/7/9/Quebec-loses-625-jobs-in-24-hours-as-two-factories-close.aspx

Quebec has been loosing a lot of jobs. If there are big cities that will see prices go lower it’s Quebec City and Montreal.

#142 Ralph Cramdown on 07.09.14 at 5:17 pm

#127 Flawed — “People buy bitcoin because they are tired of supporting a corrupted and co-opted system which you obviously support.”

I don’t support the system. The system supports me. I don’t care whether you keep your liquid wealth in bitcoin, canned beans, gold or baseball cards. If you don’t pay your internet/phone/electricity/heating/grocery bills you’ll be offline/out of touch/powerless/cold/hungry. If you do pay them (and I’m betting that you will), I get richer. That is all.

#143 brainsail on 07.09.14 at 5:24 pm

#142 it this possible? on 07.09.14 at 4:25 pm

I am not an attorney. You should have been informed that there was a conflict of interest the second you disclosed the name of your employer.

Take the time, now, to document with times and dates every word that you can recall that was discussed during all of the conversations you had with that person. Handwritten in a notebook, not loose pages.

Find another lawyer that specializes in that field. I believe the advantage point is now in your court.

#144 aaron on 07.09.14 at 5:29 pm

#143 Nomad on 07.09.14 at 4:42 pm

Price is up 10% yoy in Montreal.

Actually you’re wrong. Listings are up 10%, prices are up just 2%. Be more careful. — Garth

#145 Mr. Rebut on 07.09.14 at 6:36 pm

#143 Nomad

Garth has a rebuttal for any RE data. Except for an answer to why prices are still going up.

Because many buyers are fools. Next? — Garth

#146 DM in C on 07.09.14 at 6:51 pm

You have no point. — Garth

That should be automatically posted at the end of every one of DA’s contributions.

#147 Patiently Waiting on 07.09.14 at 7:20 pm

To 135 Rainclouds

Yes really. Here are some of the sales to Chinese buyers in White Rock in just the last 6 months. If you have ever been to Richmond this is the making of Richmond #2… they are literally taking over the community … completely dominating the real estate market … just saying it’s reality … yes there have been some price drops – but these price drops were way over priced to begin with … I stand by my claim that prices have increased anywhere from $500,000 to $1,000,000 (in the upper end market of South Surrey) since 2011.

pw

http://mlslink.mlxchange.com/DotNet/Pub/EmailView.aspx?r=369442749&s=BRC&t=BRC

#148 Fred Smith on 07.09.14 at 7:52 pm

My favorite one is that the boomers will just pass the money on to the kids and the perpetual motion machine will keep turning. Second favorite is that foreigners will keep buying and keep the prices high.

#149 4 AM Sunrise on 07.09.14 at 7:56 pm

#137 leftover on 07.09.14 at 3:39 pm
Let the housing industry continue to victimize citizens, leading them into the valley of debt.

I don’t see the housing industry holding a gun to anybody’s head.
—————————————————–

I’m all for personal accountability. McDonald’s doesn’t force people to eat at their restaurants. Anybody with a bit of common sense knows that their food is mostly unhealthy. I personally haven’t set foot there in years. But I draw the line at Frankennumbers. And multiple listings for the same property. And deliberate lowball asking prices. And press releases fluffier than a freshy brushed Chow Chow dog (and just as arrogant as one). FSBO’s can get dodgy, so we rely on the monopoly that is the real estate industry to be, at the very least, transparent with us.

#150 The Man from Alcan on 07.09.14 at 7:57 pm

#73 PeterfromCalgary on 07.08.14 at 11:19 pm

I wonder how much the house price madness in the GTA is driven by the idea some ill informed people have that it is the center of to universe.

It looks like Toronto is being developed by the UN for purposes unknown to the plebes. The previous Premier was more concerned about duck habitat (Oakridges Moraine) than the habitat of Ontarians. 700 sq fr of glass and metal is the new standard. The intensification and density on each side of the Gardiner is not an organic development, it’s orchestrated by an organization that no one voted for.

#151 Anthony Warren on 07.09.14 at 8:05 pm

Here’s a helpful hint on those interested in buying a home or investing in property.

The value of any asset comes down to the net present value of its cash-flow.

So, if you are investing a million bucks on property what is the NPV (forget about cap-rates and that other junk) of the rent you will get for the property over the time you hope to stay invested? If it isn’t better than investing the million bucks elsewhere, even somewhere risky like say the futures market, are you making a smart choice?

If you are spending a million on a home, can you rent the same home for less or would it cost you more. Include the cost of your down payment in this calculation because that money is out of your reach for a long time.

If not, rent. Let someone else take the downside risk and put your dough into low cost market indexed funds.

The reality is that real estate does not actually perform better than the stock market over the long term. It gives you a few percentage above inflation.

So think hard about how much of your wealth you want to tie up because you think it would be ‘nice’ to own your own home.

#152 Furnace on 07.11.14 at 11:29 pm

What are the main causes of uprisings in property costs in major cities? Is it because of new low interest or more money in the market?
How will the next generation afford millions dollar homes in Toronto and area, when the income is about $50,000 a year.