The smell test

SNIFF modified

Let’s start in Toronto, where this moist mid-August has been punctuated with the cry of realtors trumpeting another few weeks of boffo sales and romping prices. Of course, the media parroted it all. And, as usual, the housing guys got away with it.

Poor Jason Mercer, the real estate board’s sacrificial spokesguy, said this: “During the first 14 days of August, the number of home sales grew at a faster pace year-over-year compared to the number of homes listed for sale. This means that competition between buyers increased relative to the same period last year, which explains the continuation of very strong average price growth in the GTA.”

Sigh. The cartel claims sales were up 7.6% over the same time last year, when the increase was actually 4.3% over reported sales in 2013. So what? It goes to the credibility of an agency which routinely announces numbers which are later revised in secret, with the methodology never made public. You should believe this stuff at your peril.

As for prices, it’s hard to get excited if you’re trying to sell a detached house in the GTA for north of a million. Which sucks, since there are about 2,800 of them currently listed. And when you look at the bellwether SFH in 416 – the centre of all art, history, culture and human achievement – you’ll wonder what the realtors are smoking.

What was over $1 million in April has dropped to $843,138 today. That’s a reduction in average price of $169,000, or a fat 16.7% – in a mere five months. Incroyable, as they say in Leaside. Yeah, yeah, it’s summer. I get that. Things slow and prices moderate. But look at the chart below, painstaking prepared by the quants we keep locked in the GreaterFool fruit cellar, with the fruits. Average prices have declined steadily month-over-month, even as mortgage rates bottomed. As I’ve told you before, there is trouble at the top.

Says someone who knows: “Clearly, TREB’s mandate is to greedily keep the incredible price growth going as long as possible, even by misleading to this extent – People will keep buying all in to their absolute max if they believe there are still more buyers than there are properties available for sale, and that this alone is resulting in eye-popping price growth.  The story never changes… you better get in NOW. Like you say, if this came from a publicly traded company, there would be firings, de-listings, legal actions taken, and yes, jail time.”

416 SFD modified

Now let’s go to Japan. It’s an interesting place, since all those people who believe interest rates can never go up again in Canada point to Japan as a role model. Following its fantastic property bubble of the 1980s, things basically went to crap and have never recovered. Deflation has stalked the economy, and real estate seems largely to blame.

However, you might be interested to know that 10-year mortgage money is 1.3%. You can get 30-year money (no rate increases for three decades) for 1.79%. And floating-rate mortgages are a little under 0.8%.

So how do people borrow? Increasingly, it’s variable. While 80% of Canadians lock in for five years, 40% of Japanese would rather float – which means if rates ever do rise to even Canadian levels that the housing market would implode once again.

By the way, aggregate mortgage debt in Japan is about $1.3 trillion, and there are 128 million people living there. Our total mortgage debt is $1.2 trillion, and we have 34 million souls. Noodle that. I’d say the Japanese learned something.

Well, a final few words about Britain, where our former blog dog Mark Carney rules at the Bank of England. Poor bloke. He might want to edit his LinkedIn profile if the trending continues. The UK media’s been full of stories lately about ‘panic selling’ in London and ‘panic buying’ in the boonies as lots of folks come to believe big-city real estate has topped out amid insane, unsustainable prices.

In fact the widely-followed Halifax Housing Market Confidence Tracker recently asked people if they felt they “must sell” their house now before prices drop. Those saying yes: 60%.

Property values already took a big dump in July, falling about 6% in London after a huge run-up fueled by cheap money (thanks, Mark). The house price-to-earnings ratio has jumped again, so that the British average is now above five. The last time that happened (at 5.8) was just before the credit and property crash of 2007.

Says Hometrack: “All the signs are suggesting that prices are now so high no one can afford to actually buy houses in London any more, and that’s fueling a stampede for the exits among those sitting in Britain’s most expensive real estate.”

By the way, in terms of affordability (according to Demographia) London is the 10th most unaffordable city in the world, based on local incomes.

Guess who’s Number Two?

120 comments ↓

#1 Derek R on 08.19.14 at 7:25 pm

Yep, It’s great being mortgage-free and not having to worry about it.

#2 Fred on 08.19.14 at 7:27 pm

Vancouver!

#3 Bancoober on 08.19.14 at 7:34 pm

Im driving to bancoober in my ban.

#4 LJ on 08.19.14 at 7:39 pm

#2) Vancouver

#1) Hong Kong

Been like that for a while. And, Vancouver has a long way to fall before sane people live there again…

#5 Happy Renting on 08.19.14 at 7:44 pm

Eye-opening comparison, the aggregate mortgage debt of Canada vs. Japan. I’m guessing the pendulum swung a bit too far the other way over there.

#6 Flawed on 08.19.14 at 7:46 pm

Sure looking forward to moving to S.America !!

#7 JSS on 08.19.14 at 7:50 pm

Calgary?

(BTW – recently acknowledged as one of the best places to live)

#8 Randy on 08.19.14 at 7:53 pm

Screw Real Estate, I’m building another airplane. Have some fun, life’s short.

#9 Smoking Man on 08.19.14 at 7:54 pm

Affordability is a relative term.

Not really. Demographia bases it on multiples of local household incomes. — Garth

#10 irnbru on 08.19.14 at 7:54 pm

What was over $1 million in April has dropped to $843,138 today.

Garth, can you tell me where this number comes from on the TREB site? can’t find it.

#11 irnbru on 08.19.14 at 7:55 pm

What was over $1 million in April has dropped to $843,138 today.

-what source?

MLS stats. — Garth

#12 Porsche on 08.19.14 at 8:03 pm

In the stock markets they refer to this as a penny stock promotion (pump)

and all the penny stocks pumped end up lower then before they were pumped

the writers of the pump are all preloaded and selling during the pump and are all long gone before the crash

#13 Vamanos Pest on 08.19.14 at 8:03 pm

Anyone see the article in the globe on the 26 year-old with 32 grand saved.

Yeah, I guess that’s news these days.

Anyway, article mentioned he plans to buy a house with it. Seriously, he can’t afford to eat at a restaurant, buy an iPad, rent his own place, or drink beers at a pub, and by sacrificing all that he saves $400 a month. And he thinks he can buy a house?! (BTW, Rob Carrick writes the article like he’s an up-and-coming Zuckerberg. Hilarious.)

This guy should have one goal only: increase his income (he can’t live more frugally and 400 bucks a month will never ever ever ever get you there: at age 66 he’ll have 1.5 million…but it will also be 2054 when 1.5 million might be the base model price of a kia). He needs to invest that money in his income, either buy a business and work his ass off making it a success, or take time out and retrain for some more marketable skills.

But no. He’s gonna buy a house. Cause there’s no end to what he’ll be willing to deprive himself to save, as long as he’s not renting. Crazy.

#14 Sheane Wallace on 08.19.14 at 8:07 pm

What? Bank profits in jeopardy?

Poloz should reduce the interest rate to minus 10 % and Joe should insure through CMHC all 100 years, minus 5 % down, interest only mortgages.

Problem solved.

#15 Waiting on 08.19.14 at 8:09 pm

Aren’t there any bored, under employed lawyers out there wanting to start a class action law suit against real estate boards on behalf of people who bought based on their statistics and reporting.

#16 Happy Renting on 08.19.14 at 8:17 pm

#13 Vamanos Pest on 08.19.14 at 8:03 pm

Saw the headline, didn’t think it was worth clicking as one of my “10 free articles”, nor the five minutes of my life I’d spend reading it. Sounds like that was the right call. Sad to see it’s one of the most heavily read articles today… I guess people that age really are saving-impaired.

#17 Sheryl on 08.19.14 at 8:20 pm

house prices r never going to go down in major cities…both men and women are working in higher paid Bay St. jobs and they find the condominiums to be more convenient than to commute 2 hours one way from suburbia.

More women are entering postsecondary and earning degrees which increase her earnings, to say that house prices will fall is conflating that the demand needs to be lowered, but Statscan posted that at least 150,000 newcomers relocate to Toronto every year.

The only way to drive down prices is either to build more condos or cap immigration

#18 mike leblond on 08.19.14 at 8:21 pm

Mark Carney set the Canadian housing market up for implosion. Now he’s doing the same in the U.K. Funny thing is, the Brits are waking up to the Ponzi scheme before the Canucks…..

#19 eddy on 08.19.14 at 8:21 pm

What was over $1 million in April has dropped to $843,138 today.

-what source?

MLS stats. — Garth

—-

Excluding Leaside in which a bungalow broke an all time record at the end of July. This is an undeniable fact. I know the self appointed blog prefect says Leaside is irrelevant, but the same thing is happening in many ‘good’ areas of 416 in the under 1 million range

One bung sale does not a market make. The average price for detached homes in Toronto has declined 16.7% in five months. — Garth

#20 crowdedelevatorfartz on 08.19.14 at 8:25 pm

Garth.
My friends from PEI wanna know why you have fruits locked in your cellar

#21 Realties.ca » The smell test on 08.19.14 at 8:27 pm

[…] Source: http://www.greaterfool.ca/2014/08/19/the-smell-test/ […]

#22 crowdedelevatorfartz on 08.19.14 at 8:28 pm

@#18 mike
“Mark Carney set the Canadian housing market up for implosion. Now he’s doing the same in the U.K. Funny thing is, the Brits are waking up to the Ponzi scheme before the Canucks…..”
+++++++++++++++++++++++++++++++++++

Thats because the MSM in good old Blighty take no prisoners AND have spines.
Unlike the single celled ameoba that we have in charge of the MSM here.

#23 mike leblond on 08.19.14 at 8:33 pm

Home prices declining in China

http://www.ecns.cn/business/2014/08-18/130111.shtml

Housing market plunging in the U.K.

As for Canada? Oh yeah! I forget. We are different… (Except for Atlantic Canada and Quebec, and B.C. outside of Vancouver…where prices have been stagnant or dropping over the past seven years)

#24 Chump on a Stump on 08.19.14 at 8:41 pm

#20: Garth.
‘My friends from PEI wanna know why you have fruits locked in your cellar.’

Maybe he meant ‘fruitcakes’.

#25 Andrew Woburn on 08.19.14 at 8:46 pm

Why rents are softening and what’s in store for Toronto’s condo market

http://www.theglobeandmail.com/report-on-business/economy/housing/whats-in-store-for-torontos-condo-market-as-rental-demand-soars/article20103226/#dashboard/follows/

#26 Mandria on 08.19.14 at 8:48 pm

#16 Happy Renting

You can get around the “10 free articles” restriction by clearing your browser history or using Google Chrome’s incognito mode.

#27 CPG on 08.19.14 at 8:49 pm

Veterans Watchdog: Half Of Badly Wounded Ex-Soldiers Not Getting Disability Cheques

http://www.huffingtonpost.ca/2014/08/19/canada-veterans-watchdog-disability-cheques_n_5691288.html

#28 Vangrrl on 08.19.14 at 8:51 pm

#2 most unaffordable city in the world has got to be Vangroovy-gone-looney!

#29 Mic on 08.19.14 at 8:54 pm

@#18 Mike Leblond

Mark Carney set the Canadian housing market up for implosion. Now he’s doing the same in the U.K. Funny thing is, the Brits are waking up to the Ponzi scheme before the Canucks…..

Mark’s legacy ==> a common view of the governor’s accomplishments ??

https://www.youtube.com/watch?v=e4txHWNF_5Y

Don Drummond’s criticism is nicely expressed and to the point at 4min10secs.

#30 takla on 08.19.14 at 8:55 pm

much like Peak oil has come and gone so has peak realestate,If your a homeowner prepare for a haircut,Wage growth has stagnated and only the weathy 10% can afford the buying/carrying costs of our massively inflated current home prices.
What hasn’t reached PEAK is your every day expenses,gov. taxation,food,home heating/automobile fuel and interest rates!
To hold out hope that there will not be a correction in home values is dysfunctional thinking,the states after over 3 trillion in quantitive easing is just barely growing and yellens pulling the on going stimulas as we speak.The smart amoungst us with jobs are paying down debt and putting cash away,no wonder the broader economys stagnateing,the new paradigm

#31 Smoking Man on 08.19.14 at 8:57 pm

Not really. Demographia bases it on multiples of local household incomes. — Garth

House hold incomes are not accurate, case and point.

Many small business report and pay themselves a minimal salary, some in cash, pocket it.

Many employees electricians, heating and air. Pay tax on salary which goes into stats, but do a shit load of side jobs in cash..

And let’s face it, lots of dumb, low self-esteem settle for less, min wage slaves. There not even a factor when it
comes to real estate..

But there t4 goes into bring down the average..

It’s all relative…

#32 TEMPORARY® Foreign Prime Minister on 08.19.14 at 8:59 pm

#15 Waiting on 08.19.14 at 8:09 pm
“…Aren’t there any bored, under employed lawyers out there wanting to start a class action law suit against real estate boards on behalf of people who bought based on their statistics and reporting..”
=========================

Kind of tough to do when both are fighting it out for the same spot on the food chain, slightly below that of the Ebola virus.

#33 TEMPORARY® Foreign Prime Minister on 08.19.14 at 9:02 pm

London is the 10th most unaffordable city in the world, based on local incomes. Guess who’s Number Two?
=========================

Nothing like having a prostituted Canadian government blindly propping up a one-trick economy, all the while driving a bigger wedge between the have’s and the will-never-have’s.

#34 james on 08.19.14 at 9:04 pm

#17 Sheryl

Sadly for you, there are numerous objections to your view that prices cannot go down.

First, prices declined in US cities despite high immigration (e.g., Miami). In fact, they crashed.

Second, those Bay Street jobs are not as safe as you think. Speaking from personal experience (teaching at a major law school and hanging out with managing partners all the time), the big firms are in trouble. The CBA is mulling over the liberalization of legal service delivery. This is not unique to Canada, as the big US firms (e.g., DLA Piper) are desperate to reduce headcount and increase efficiency.

Oddly enough, some of my law students are coming in from finance backgrounds, because they think the end is nigh for many analysts due to software.

#35 kenchie on 08.19.14 at 9:12 pm

#17 Sheryl on 08.19.14 at 8:20 pm

“Statscan posted that at least 150,000 newcomers relocate to Toronto every year.”

This is wrong. In 2013, there was a net increase in the GTA of about 55,000 people. About 140,000 came and about 85,000 left for other places (particularly Alberta). So yes, newcomers relocate to Toronto, but that’s not the full story. A heck of a lot of people leave too.

There was a higher degree of retention of people in previous years in Toronto though.

#36 NoName on 08.19.14 at 9:19 pm

off topic, but very very interesting

“That last point may be the most troubling. The different subjects that occupy people’s thoughts aren’t just a window into American life today. They’re a window onto future inequality, too.”

http://www.nytimes.com/2014/08/19/upshot/inequality-and-web-search-trends.html?_r=0&abt=0002&abg=1#

#37 Smoking Man on 08.19.14 at 9:21 pm

Hey Turner Nation..

Going out on the town with Yoda tomorrow night.

The smartest humanoid on the planet.. Thinking Pravda, my pal sherrly always there… Maybe earls…

My favorite drinking hole is my gazebo, don’t get out much lately.

Any hot spots you recommend…

#38 Sebee on 08.19.14 at 9:23 pm

#31 Smoking Man

Don’t filthy rich folk like you pull the average up on a huge way on the other end to offset the “slaves” pulling it down?

#39 Smoking Man on 08.19.14 at 9:40 pm

#38 Sebee on 08.19.14 at 9:23 pmDon’t filthy rich folk like you pull the average up on a huge way on the other end to offset the “slaves” pulling it down

……

Like I’ve told you bastards, report all your sales, don’t cheat on taxes.. Take a small salary… With a huge expense account.. Hell the stock market pe ratio is 17 to 1

Obviously you won’t get that selling a small biz, but damn, the quest for yield, you get the right mark… 10 to 1 on your gross sales…

Not chicken feed….

#40 pravchaw on 08.19.14 at 9:46 pm

Maybe some enterprising class action lawyer can sue TREB for misleading the public …most of these class actions are settled out of court anyway …but the lawyers can make a bundle.

#41 TEMPORARY® Foreign Prime Minister on 08.19.14 at 9:51 pm

#31 Smoking Man
“…..Don’t filthy rich folk like you pull the average up on a huge way on the other end to offset the “slaves” pulling it down……”
=========================

Don’t know many filthy rich people that take the time each evening to assist others in escaping, or even better, avoiding financial slavery.

Then again, there are other writers, well, I digress…

#42 Garth and Stats on 08.19.14 at 9:52 pm

Love the stats Garth, but would appreciate to either know how you do the calcs or for your spreadsheet to be available. Makes it harder for our blog dogs to spread the word otherwise. All I have right now is a stat from a blog I can’t personally relay to anyone else (including my house horny gf whose voice is becoming banshee like).

The stats are published every two weeks. — Garth

#43 van guy on 08.19.14 at 10:01 pm

We have seen this story before with the average price. The average price is very volatile and can be extremely misleading. Cmon Garth, you know that. Maybe a few homes over 1 mil didnt sell during those months. But, if the trend continues, then yes it does actually matters. Short term, this could be a bears wet dream, long term we will soon know

No, it means people who waited five months saved $169,000. — Garth

#44 Cici on 08.19.14 at 10:03 pm

#18 Mike Leblond

That’s because they’re a wee bit smarter than us Canucks. Either that or they smoke less of the good stuff.

#45 Smoking Man on 08.19.14 at 10:07 pm

Success in life is your sales pitch….

If your good at it. You eat…

If your not, you bitch about how life’s not fair.

Who’s coming to Smoking Man School….

#46 45north on 08.19.14 at 10:24 pm

it’s hard to get excited if you’re trying to sell a detached house in the GTA for north of a million. Which sucks, since there are about 2,800 of them currently listed.

and if you’re trying to sell for over $1 million you read the real estate board’s stuff but then you mow the lawn for the 3rd time in the week.

James : Sheryl

prices declined in US cities despite high immigration

they did. price declined across the whole of the US – a massive market. The common factor between the US and Canada is debt. Debt per income. Since 2008 the ratio has declined in the US but has risen in Canada.

#47 Vancouver-Millandtimber on 08.19.14 at 10:32 pm

Wow!

#48 Smoking Man on 08.19.14 at 10:35 pm

You snuck a few JD shots strategically hidden in your yard.

Your 4 lbs paddle is taking on four raccoons , and you have the ear buds on listing to Johnny cash under the cover of your gazebo..

That’s my world on a Tues night…

Boaring with potential..

#49 crowdedelevatorfartz on 08.19.14 at 10:40 pm

@#24 Chump Stump
Apparently reading comprehension isnt a skill you’ve aquired quite yet.

Nope.
I said fruits.
Garth said “we keep locked in the GreaterFool fruit cellar, with the fruits……”

Soooooooooooooo , you are confused ………..how?

#50 Shawn on 08.19.14 at 10:49 pm

Immigration and houses

Yesterday I stumbled onto this rather taboo topic.

I saw a stat that said Canada takes in 250,000 immigrants per year. And Garth pointed out that is only about 0.7% of the population and has been unchanged for years.

Okay, but then I thought hmm at 5 per household that would be 50,000 new housing units per year needed to house the 250,000 newcomers. We only build 200,000 housing units per year. So the math would indicate that perhaps 25% of the net demand for new housing units is due to immigration. Even if all immigrants occupy existing housing it still means the 50,000 new housing units need to be built. It may be existing citizens that bump up the housing food chain and get the new units but 50,000 new households per year does require 50,000 new housing units, all else equal.

Now maybe Canadian deaths exceed births, if so that would free up some houses for immigrants. I don’t have the stats. In fact if deaths exceed births why else but immigration or to replace torn down houses are we building 200k per year. Part of the reason would be fewer occupants per house. But really immigration has to be a significant driver here.

But while we build 200,000 new units we must destroy and tear down some thousands as well?

So what is the net number of new houses minus the torn down units? 150,000? or more like 180,000?

And what is the amount of house units caused by say 50,000 new immigrants households each year as a percentage of that net housing additions number? ( a third?)

It seems clear to me that immigration is indeed (directly or – more likely – indirectly) a BIG driver of new home construction. That does not bother me one way or the other. It’s just appears to be a fact to me.

I don’t judge this good or bad. In fact I think Canada has a moral obligation to accept immigrants.

#51 Shawn on 08.19.14 at 10:54 pm

Kenchie’s post at 35 reminds me I forgot to knock off for any emigration out of Canada freeing up houses. Maybe some of the immigrants immediately turn around and leave for the old country, Canadian credentials in hand? I don’t know. And some Canadians do emigrate.

Someone here may do the math

#52 Obvious Truth on 08.19.14 at 10:55 pm

Looks like rates will save everyone. Whole world could become japan. Maybe we revisit crisis low yields. A one handle on a mortgage was awesome. What the heck is going on out there.

Deflation?

#53 saskatoon on 08.19.14 at 11:02 pm

Demographia:

“The future for the household standard of living in Canada could be grim.”

#54 As Is Old Man on 08.19.14 at 11:19 pm

Today’s Ottawa Citizen:

July new home sales in Ottawa hold steady

There were 320 sales in July, up 1.6 per cent from June, when there were 315 sales. But compared to the year before, sales were down 5.9 per cent (new home sales hit 340 in July 2013). And new home sales continue to run well short of the 10-year average for the month, which is 415.


“Overall, sales continue to be quite depressed,” he adds in an email. “While we had seen a surge in the single-family market share for nearly half a year, in July there was a solid increase in town sales (with many of those sold with above-average incentives). The depressed town and condo market has been greatly affected by the decreased number of first-time homeowners.”

#55 Butch on 08.19.14 at 11:38 pm

Garth:

Set your gimps free. Being locked in the fruit cellar may be skewing their analysis.

#56 Roman on 08.19.14 at 11:39 pm

>> …SFH in 416 – the centre of all art, history, culture and human achievement

forgot dumplings!

#57 Jimmy on 08.20.14 at 12:12 am

RANDY #8,
What are you building? Perhaps an RV8?
Have you been to Oshkosh?
I’m saving up to build a Lancair.
I think SM wrote he used to fly. Also Retired Wisconsin dude?
Cheers,

#58 Cha Ching on 08.20.14 at 12:35 am

As both prices and rents continue to rise for real estate across Canada, The Economist lists Toronto, Vancouver and Calgary amount the best places to live in the entire world.

As a proud Canadian, I agree!

http://business.financialpost.com/2014/08/19/vancouver-toronto-calgary-named-among-the-best-places-to-live-in-the-world-by-the-economist/

#59 Timmy on 08.20.14 at 1:03 am

Not going to happen in London, the Chinese will keep the market afloat just like they have here. They pay cash.

#60 Second Class on 08.20.14 at 1:33 am

Im seeing my friends who all read this blog are all finally jumping in and have given up hope on a correction. Nobody needs to buy but everyone is tired of crappy landlords that are plenty.

Garth… Sadly its some of your readers who are the greatest fools.

Sheryl (#17)… Unfortunately education does not mean increased income. Like housing the boomers taught ther kids to get educated as much as they can and rack up debt.

Reality is in many places you are better off with a trade and a 2 year tech diploma. Even labor jobs pay good for those with no education in the right market.

Many of those people you snub your nose at have six figure incomes with six figure investment portfolios and the big truck to boot. Many are also just idiots.

And Garth. Picking stocks isnt all bad if its done as a part of a larger diversified investment plan. Its just not for everybody. Like post secondary…. But don’t tell Sheryl!

#61 Happy Renting on 08.20.14 at 2:05 am

#36 NoName on 08.19.14 at 9:19 pm

Interesting glimpse into what the privileged and the downtrodden think about. Some weird stuff in there (the Vengaboys are “back” for the rich folks? Poor people’s dogs get more allergic reactions?)

Perhaps most worrisome are the doomer-religious searches. It points to despair and a lack of optimism for the future, as though the hope that even God can help you is gone. That’s a scary recipe for social unrest. The American have-nots will embrace inequality as long as they have hope (realistic or not) of becoming the Kardashians someday. People are dangerous once they’ve given up. We might need bulletproof Bjorns in a generation.

#62 Dr. Mark Subprime CHMC on 08.20.14 at 2:31 am

You have quite an ability for finding pictures but this one really made me laugh.

Smoking Dickhead if your sales approach is the same as your incessant, mindless, rediculous, mishmash of idiotic foolishness you couldn’t sell a personal flotation device to a drowning man.

#63 Shane on 08.20.14 at 4:25 am

So the 15% correction is done? Is it time to buy now?

But the homes in my neighborhood seem to have not gone down.

Shane

#64 Londoner on 08.20.14 at 6:03 am

“All the signs are suggesting that prices are now so high no one can afford to actually buy houses in London any more”

I think they meant to say “homes” instead of “houses” since most people no longer buy houses in London. You can buy half a house or a floor of a former house which has been converted into a multi-unit dwelling.

Btw – Carney has not done any of this to the UK. He’s gone from a country mildly obsessed with real estate to a country that’s overly obsessed with real estate. It’s nothing new for the Brits and consumers have no one else to blame for this but themselves (and maybe Thatcher).

#65 basement dweller on 08.20.14 at 7:27 am

The true test for prices going down will come in the next few months when prices usually go up.

You need a break in a trend of sale or price to signal a correction. For example a decrease m/m in the next few months when typically its an increase.

By the same token, if you were waiting for detached home prices in urban Toronto to decline by 15%, they just did. — Garth

#66 T.O. Bubble Boy on 08.20.14 at 8:04 am

hahahaha – 80% of 2.4M renters are just home buyers in waiting!

http://www.theglobeandmail.com/report-on-business/economy/housing/survey-show-80-of-renters-under-50-desire-home-ownership/article20128523/

… then you keep reading and see that only 650,000 (1/3) of those house-buyer renters could carry a $350,000 mortgage w/ the minimum down payment etc.

#67 T.O. Bubble Boy on 08.20.14 at 8:05 am

By the same token, if you were waiting for detached home prices in urban Toronto to decline by 15%, they just did. — Garth

Using that logic, prices decline by 10% every summer and winter… the price of the same house didn’t decline 15%.

Using that logic somebody seriously looking for a home would be better off buying now, when prices are 16% lower than in the spring. How is that not obvious? — Garth

#68 Steve French on 08.20.14 at 8:12 am

DELETED

#69 T.O. Bubble Boy on 08.20.14 at 8:18 am

Using that logic somebody seriously looking for a home would be better off buying now, when prices are 16% lower than in the spring. How is that not obvious? — Garth

Yes – of course there is less competition in the winter and in the middle of the summer… but, it doesn’t mean the price of what you’re buying is 16% less.

However, the 16% average price drop you’re highlighting is significantly higher than the 7%-8% GTA average price decline that happens every year from May-August:
http://guava.ca/indicators.html

My point. — Garth

#70 Anson on 08.20.14 at 8:24 am

The news papers seem to be in an ustoppable downward spiral.
As Garth stated in previos posts newspaper subscriptions have seriously declined and continue to do so and they have become so desperate for revenue that they have resorted to printing advertising but spinning it as news because their revenue is shifting from subscription to paid advertising.
These desperate measures will only increase the downard spiral as more and more people come to the realization that the news is no longer unbias.
Just as cable tv as we know it is on the way out so is the way we get our news , free blogs and social media are going to play a bigger role in the future.
Can you really blame someone in their 20’s or whatever age they are for making a bad decission and buying a house when all the information they receive from local media is one sided.
Medias message…..HOME OWNER = WINNER………
…………………………….RENTER = LOSER………..

#71 miketheengineer on 08.20.14 at 8:48 am

Garth et al:

Wonder where all you cash goes…why the economy sucks, why you can’t make ends meet….?

As consumers, we are totally screwed in Canada.

I go into Michigan often. I buy a jug of Mobil 1 engine oil there, cost at the big box store is ~$27.00 reg price. Then I come across the border, same big box store, same jug of oil with the same product number, and it is $39.00. Ouch. Now take this across all the crap you consume every day.

Same thing goes for Amazon.com and Amazon.ca. Same product on one web site, double the amount on the Canadian web site.

I really hate seeing this kind of stuff. I get the feeling that I am being totally really ripped off.

Why should things cost the same in a country with a tenth the consumers, greater land mass, higher transportation costs due to lower population density and increased business taxes to pay for a public health care system? — Garth

#72 Rational Optimist on 08.20.14 at 8:51 am

13 Vamanos Pest on 08.19.14 at 8:03 pm

Just have to say: Carrick is a hack. You probably missed the byline before you accidentally read that bunk.

#73 TurnerNation on 08.20.14 at 8:54 am

Smoking man, Earls patio is always packed, not worth it. Too many boring suits.
Every Thurs nite I go to 3-5 places without fail. Fri is 2 or 3 – most weeks when not sleepy.
On a Wed? Ok I got it: go to Rock N Horse’s rooftop patio ‘Porch’. John/Adelaide.
Then, around 10:30 head to 2 Cats – King/Portland. Amazing little place bar small dance floor, cannot help but bump into people. Staff are cool. Music blasted anything from 60s to 90s. You can be singing along to Sweet home Alabama then next tune is ‘Informer’ by Snow. Irony abounds.

#74 TurnerNation on 08.20.14 at 9:06 am

Ps. tonite is a bi-weekly patio even at the Ritz back patio, DJ and all but more of a 30s crowd.

#75 crowdedelevatorfartz on 08.20.14 at 9:17 am

Tuesday evening 6pm “news” in Vancouver.
Global tv anchor sternly advises us that “rental vacancy rates are dropping”. The proof? UBC students had to “gasp!” …… keep renting their place for the 4 months they were off school……
Cut to the next story which was about more condos being built………
This is Vancouver …..the 2nd most expensive place to buy (re Demographia) ….in the world.

Pop!

#76 PoltawaDiva on 08.20.14 at 9:24 am

Although a little late, this is for you, Smoking Man, (and any of you dudes over 50 with prostate issues).

Check out prolaris.com before you make any kind of decisions. They do genetic testing on the rate of proliferation of cancer cells:

“There are an estimated 1.2 Million biopsies performed annually, leading to 240,000 prostate cancer diagnoses; resulting in approximately 30,000 deaths†. Evidence that traditional tools are inadequate. The fact is, traditional measures for assessing prostate cancer risk don’t provide all the information needed to appropriately weigh treatment options.

Managing clinically localized prostate cancer presents unique challenges for physicians and patients due to its highly variable and often nonaggressive nature. Clinical parameters, such as Gleason score and PSA, will continue to serve as the standard measurement for prostate cancer severity, but they do not measure the true hallmark of cancer—cell proliferation.

Prolaris®, a novel genetic test for prostate cancer from Myriad Genetic Laboratories, combines traditional risk factors with a molecular assessment of the aggressiveness of an individual patient’s cancer. Prolaris provides unique information about a patient’s cancer and can help doctors and patients make the most informed treatment decisions.
performed annually, leading to 240,000 prostate cancer diagnoses; resulting in approximately 30,000 deaths†. Evidence that traditional tools are inadequate. The fact is, traditional measures for assessing prostate cancer risk don’t provide all the information needed to appropriately weigh treatment options”

The test is expensive ($3000 US) and I don’t know how available it is in Canada. CAn’t give any personal recommendations – missed the boat on that one. However, I would certainly consider it.

Oh, and by the way, PSA can be influenced by infections/inlflamation, stress and prolonged sitting/bike riding, etc. It’s the percentage of increase that is a red flag. Be very careful of biopsies-there is a very real chance of chronic inflammation/prostatis.

Remember, the doctors that treat you for the cancer do not see you years later for your side effect problems, hence it does not concern them directly, only as a statistic – and how many GPs report those?

#77 crowdedelevatorfartz on 08.20.14 at 9:27 am

@#58 Cha Ching
The Economist ‘ratings’ are as the most “livable city”?
Vancouver’s #3 in the world?
Tell that to the drug addicts at Hastings and Main.
Vancouver’s #1 !!!!!!!

Several years ago Vancouverr was #1 in that “poll”.
Complete populist drivel. Free advertising. And , of course, Global 6pm tv in Van will be crowing about it Wed evening like the populist bobblehead dolls that they are. “see how good we are!”
Reminds be of those nauseating license plates that people actually pay $75/year for in BC.
“The Best Place on Earth”………. yup.
apparently if you live anywhere else. Your place is shit.

#78 Bottoms_Up on 08.20.14 at 9:36 am

#76 PoltawaDiva on 08.20.14 at 9:24 am
——————————————–
If a man lives long enough he will develop prostate cancer. And you are correct to inform the audience that it comes down to rate of cell proliferation….many prostate cancers are benign or grow slowly (i.e. you’re more likely to develop a different type of cancer that will kill you while waiting for your prostate cancer to grow).

This is the type of information that should at least be given to all patients….doctors should be forthcoming with what they know, and what they don’t know.

#79 Vstrom rider on 08.20.14 at 9:41 am

I thought Number Two was Dr Evil’s second in command?

#80 Bottoms_Up on 08.20.14 at 9:49 am

#54 As Is Old Man on 08.19.14 at 11:19 pm
———————————————-
And the selling rate of entry level units in Ottawa are likely influenced by the rate of government hiring (not happening) and growth in student base at the universities and colleges (also not really happening).

#81 Bottoms_Up on 08.20.14 at 9:52 am

#50 Shawn on 08.19.14 at 10:49 pm
—————————————
Don’t Canada’s immigration numbers include family members that are coming here to join other family (i.e., they get incorporated into existing family homes), as well as students etc.? Also, what is the emmigration rate from Canada? While I agree with your approach, the numbers of required new units may be less than what you think.

#82 Anson on 08.20.14 at 10:02 am

#171Miketheengineer
Same story regarding local mom and pop stores.
How can a small store stay competative in this big box enviornment? They cant! Big box stores pay far less than small retailers due to the large volumes of orders they purchase.
After years of slow sales due to having higher prices than big box stores and then after factoring in the now otrageous rent they have to pay it is not surprising to see so many small shops packing it in.
I myself believe strongley in supporting my local small business person, however as incomes stagnate and things become more expensive people out of necessity will be forced to shop wherever the cheapest price is , again accelerating the decline of small locally owned business.
Be concious where one spends money because investment follows demand it is that simple.
We are all connected and in every action there is a reaction.

#83 Daisy Mae on 08.20.14 at 10:21 am

“What was over $1 million in April has dropped to $843,138 today. That’s a reduction in average price of $169,000, or a fat 16.7% – in a mere five months.”

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

What are these greedy sellers really losing since the prices are merely dropping back to the ‘mean’?

#84 NorthOf45 on 08.20.14 at 10:22 am

The Orange Guy pulled his hands out his shorts and conducted a survey of Canadians’ saving habits. Results show a good portion of folks are effectively broke, living paycheque to paycheque.

http://www.benefitscanada.com/news/canadians-say-their-savings-habits-are-poor-55872

One of the more interesting bits: “The survey also found 30% of Canadians reported they couldn’t handle more than $500 in unexpected expenses without going into debt.”

Holy Schneike!!!

#85 Tony on 08.20.14 at 10:36 am

Re: #71 miketheengineer on 08.20.14 at 8:48 am

If the Canadian dollar and U.S. dollar were at par all of the blame goes to the french. Since almost everything sold in Canada has to be in both french and English the costs are astronomical up here. Add to that no selection of anything up here again thanks to the french.

#86 Lynn on 08.20.14 at 10:43 am

Now million dollar homes in van area are a norm….But as Garth pointed out, most sales are under mil, what’s wrong on this picture? Do most people buy condo and townhome instead of SFH? I still haven’t seen any impact on CMHC eliminating insuring > 1mil.

#87 BillyBob on 08.20.14 at 11:04 am

#13 Vamanos Pest on 08.19.14 at 8:03 pm
Anyone see the article in the globe on the 26 year-old with 32 grand saved.

Yeah, I guess that’s news these days.

Anyway, article mentioned he plans to buy a house with it. Seriously, he can’t afford to eat at a restaurant, buy an iPad, rent his own place, or drink beers at a pub, and by sacrificing all that he saves $400 a month. And he thinks he can buy a house?! (BTW, Rob Carrick writes the article like he’s an up-and-coming Zuckerberg. Hilarious.)

This guy should have one goal only: increase his income (he can’t live more frugally and 400 bucks a month will never ever ever ever get you there: at age 66 he’ll have 1.5 million…but it will also be 2054 when 1.5 million might be the base model price of a kia). He needs to invest that money in his income, either buy a business and work his ass off making it a success, or take time out and retrain for some more marketable skills.
But no. He’s gonna buy a house. Cause there’s no end to what he’ll be willing to deprive himself to save, as long as he’s not renting. Crazy.
==================================================

Wayyy off base on this one. The guy doesn’t sound like he’s depriving himself of much, has his smartphone, laptop. Enjoys his small pleasures and has some balance, eating out and having his daily coffee. He isn’t saving to “buy a house”, he’s living within his means because he watched his parents struggle with debt. How is this not commendable? He only mentions buying a house in passing, as a possible future goal. With his disciplined habits, I have no doubt he’ll achieve it if he desires.

Of course I’m sure he’d like to increase his income, who wouldn’t? Too bad that isn’t quite as easy as you make it sound, in a world with a surplus of labour and declining jobs due to technology. Get off your high horse already.

Read the article again, you totally blew it, maybe in your dislike of Carrick (which has nothing to do with the actual content, btw.)

#88 miketheengineer on 08.20.14 at 11:20 am

Garth et al:

#76 PoltawaDiva

Cancer and Vitamin C. I haven’t looked at Vitamin C and prostrate cancer, but being a 30 plus year survivor of a soft tissue bone cancer, I can say that Vitamin C had helped me, and thanks to Mr. Silva, I have survived.

Check out the book by Thomas Levy, Linus Pauling, etc..there are others out there. You can now get vitamin C in pill form, 1000mg time release, chewable, etc. All the big box stores have them. Costco’s are cost effective if you have memembership. My co-worker’s wife was give 6 months to live due to ovarian cancer. She used IV vitamin C, through a natural path, along with the chemo. She is still going well over two years.

There is a new substance called Liposomal Vitamin C, which you can make yourself….you can do the research on this one, and is supposed to be better than the IV vitamin C, and is taken orally.

Good luck to all the people with cancer that read this blog…life is a bitch sometimes.

#89 Mister Obvious on 08.20.14 at 11:38 am

#75 crowdedelevatorfartz

Yeah, I saw that item on Global TV news. Highly suspicious reporting indeed.

It may well be there’s a shortage of dumps for UBC students to rent just before school starts but that doesn’t really address the state of the rental market for people who can afford the higher end.

If you make a halfway decent wage, or are comfortably retired, or perhaps have liquidated your overpriced SFH and invested the proceeds, there are many decent rental options in Vancouver. Of course, they’re not cheap but they come in way under the cost of equivalent purchase.

#90 Sheane Wallace on 08.20.14 at 11:51 am

#89 miketheengineer

cancer is a nutrition deficiency disease triggered by polution, nitrates, growth hormones, preservatives and genetetically modified food.

just search around on internet, there is tons of material available.

And eat organic as much as you can, despite the cost.

GMO is prohibited in Europe and cancer rates there are much lower.

same for diabetes: don’t use products with glucose-fructose syrop.

#91 In Calgary on 08.20.14 at 12:18 pm

@7 Calgary.

Been here since 2007. Rented while saving for a down payment. Was renting for $1700/month, not including utilities, 2007-2011. This renting was an enormous cash drain, I am reasonably young and will be in Calgary probably til 2050. No rent controls, my landlord allowed me to have cats and a dog, no problems. The current situation is it is difficult to find any pet friendly houses for rent in Calgary and still no rent controls. Given current low interest rates many people are still buying places, despite the reality that many properties are up $100K just from 2011. I bought a mortgage in Calgary NW for $420K, it was over 5% down, used some rsp’s and got a 25 year term. If I had waited not only would I have wasted money on rent, if I could find a decent property it would be ridiculous. Prices in Calgary have been outrageous since 2005. For anyone thinking to move to Calgary, make sure you make >$100K per year, just to stay afloat in the current housing situation. Garth may be correct in his assessment that costs may drop, however due to the oil related jobs in this city and the lack of land(thanks to the farmers hogging all the land) there just isnt that much housing available, and most of the zoning sucks(think Brooklyn NY, All in the Family for half a million $).

As far as being a nice place to live, yes Calgary is. Clean drinking water, nice high altitude(harder to exercise), but really cold in winter and very very expensive and increasing gridlock. If you work in the north, dont get a place in the SE unless you want to wait hours on Deerfoot Trail, that being said, NW Calgary is claustrophobic and NE Calgary has a higher proportion of criminal activity.

Anyone seeking to rent or buy in Calgary needs to look at for how long they will be living here, job security, interest rate trends, and worse case scenarios. All angles need to be looked at with a microscope.

#92 Cici on 08.20.14 at 12:20 pm

Looks like those inner-city condos are already becoming crime-infested ghettos:

https://ca.news.yahoo.com/home-invasion-leads-vancouver-man-051608678.html

#93 :):(Ying Yang on 08.20.14 at 12:23 pm

#48 Smoking Man on 08.19.14 at 10:35 pm
You snuck a few JD shots strategically hidden in your yard. Your 4 lbs poodle is taking on four raccoons , and you have the ear buds on listing to Johnny cash under the cover of your gazebo..
That’s my world on a Tues night…
Boaring with potential..

……………………………………………………………………..

Smoking Man why hide the JD shots? Tell the girlfriend to bite it! This is who I am like it or leave it! I like to drink my JD on the patio. Who rules in your house? The Smoking Man or the skirt? Besides she must not be too smart if she can’t smell the JD on your breath!

#94 Cici on 08.20.14 at 12:36 pm

#76 PoltawaDiva and #78 Bottoms_Up

Do you all have any information for someone suffering from Hashimotos with high anti-TPO levels for at least three years? Doc says all I can do is swallow the pill, which apparently isn’t helping much (need to up the dosage every few months, meanwhile the antibodies remain high).

Should I just do the radioactive iodine thing and be done with the damn gland once and for all?

This is not a gland blog. Not that gland, anyway. — Garth

#95 Pete on 08.20.14 at 12:45 pm

Given the discussion above I was interested how seasonality impacts the market I am following (Oakville).

Looking at the Oakville market behavior from March to July 2014 vs 2013

2014 March Median $680K Average $842K
2014 July Median $670K Average $786K
2014 Drop Mar-Jul Median -4% Average -6.7%

2013 March Median $630K Average $737K
2013 July Median $630K Average $734K
2013 Drop Mar-Jul Median 0% Average -0.4%

So it looks like the seasonal price drop in 2014 is much steeper than 2013, where there was no significant drop at all. While the 2014 prices are still significantly higher than 2013, it looks like they might be returning to something much closer, and then (possibly) lower than 2013, if the trend continues.

#96 DM in C on 08.20.14 at 1:02 pm

#91 – sleepless

Try googling — Darren Weeks, Fast Track — Complaints autofills the search. It’s a ‘rich dad poor dad’ ilk.

http://www.canadianbusiness.com/investing/nothing-for-money/

I wouldn’t give them a toonie for the bus.

#97 Peeved owner frustrated renter on 08.20.14 at 1:03 pm

I’d have to see the raw data but suspect the average is down because sales are still brisk in the $1M segment has slowed dramatically.

More sales at $700K, $800K, $900M (even if they are slanty semis) and fewer sales at $1.2M, $1.3M will pull down the average. Anecdotally, anything in my block priced below $1M and comparable to previous sales will sell in a week (even if it is $750K-$900K for a semi, but few of the original albeit renovated detached houses go for more than $1.1M. We are near but not in Leaside) Meanwhile the new builds priced at $1.3M to $1.8M sit and sit and sit…. I only see them move after a price reduction and 2 or 3 months. They do seem to move at that price point in Leaside though, LOL.

We bought, quite unhappily for me, because I could not defeat the argument that a landlord could tell us to go upon lease expiry or sell the house out from under us (a topic addressed by Garth a few weeks ago), and because we are rare birds with actual cash to pay for it…. mortgage-free if we wished. Even at the sub-$1M mark and prices not (yet) falling in this area and segment, I am resigned to never again seeing the purchasing power we put into the house, and have since moved on to aggressively invest what’s left.

But I would propose that if you hate moving and feel pressured to buy as a result, you might consider spending $5K-$10K to have the house packed up, moved, and unpacked (and even organized!) for you by trustworthy packers, and go on vacation for the week or two while this all happens. Even if you are told to move annually by a landlord (doubtful) it may still make more financial sense to hire the packing/unpacking… wish I’d thought of it sooner and worked out a spreadsheet to bolster my arguments…. if anyone uses that idea, what did packing/unpacking/organizing work out to?

#98 Smoking Man on 08.20.14 at 1:05 pm

#95 :):(Ying Yang on 08.20.14 at 12:23 pmYou snuck a few JD shots strategically hidden in your yard. Your 4 lbs poodle is taking on four raccoons , and you have the ear buds on listing to Johnny cash under the cover of your gazebo..
That’s my world on a Tues night…
Boaring with potential..

……………………………………………………………………..

Smoking Man why hide the JD shots? Tell the girlfriend to bite it! This is who I am like it or leave it! I like to drink my JD on the patio. Who rules in your house? The Smoking Man or the skirt? Besides she must not be too smart if she can’t smell the JD on your breath.
……..

Ha, you automatically jump to the conclusion that I’m hiding it from wife poo….. She my partner in this.

I have a thing that lives in the basement, a son, currently obtaining an obedience certificate to be an addiction councilor…

My blackboard has been erased, all my crazy ideas wiped out and replaced with the twelve steps…

Prisoners in our own home…

But I need to encourage the lad, I will need his help one day…

#99 Happy Renting on 08.20.14 at 1:17 pm

#84 NorthOf45 on 08.20.14 at 10:22 am

It’s not a random sample, so the percentage of people who can’t come up with $500+ for an emergency is likely higher. Not surprising, mediocre money management abounds. If you’re ever in a position, observe the panic that ensues when pay/pogey cheques are one measly day late. Lots of people living with little/no buffer.

#100 Sheane Wallace on 08.20.14 at 1:25 pm

#96 Cici

What are you taking, synthroid?

Any medication for Hashimoto thyroid disease needs time to adjust the dose. You go through dose adjustments, blood tests periodically that could take a year and you might feel that there is no effect or the medication effect phases out in the evening (medication is usually taken on empty stomach in the morning at least 1 hour before breakfast).

Once the doctor figures out the dose you go with it and with annual blood test to check if the dose needs readjustment.
Hashimoto is a hormonal imbalance disease so it is no pleasant, you may feel weakness and irritation, your hands might start shaking but don’t worry, it is not Parkinson and could be well controlled through medication.

#101 :):(Ying Yang on 08.20.14 at 2:18 pm

#100 Smoking Man on 08.20.14 at 1:05 pm

Got it, now I know why all the Seneca trips! You have my sympathy in dealing with the problem. My mother hides the chocolate from my father back in Vancouver as he is slightly diabetic. My girlfriend once told me I drink too much and she didn’t like my smoking. Problem solved, new girlfriend!

#102 :):(Ying Yang on 08.20.14 at 2:34 pm

Appears appropriate that Hong Kong and Vancouver round out the top two. I lived in Hong Kong for a while, hated everthing about the city. What was the first thing I did after university, moved back to Vancouver where I hated everything about that city too. Absolutly no chance ever that young people could ever afford to purchase a property in either cities. No chance, no hope not ever!
After some stints in the USA moved finally to Toronto, its OK, just hate the winters here.

#103 Exiled on 08.20.14 at 2:44 pm

Sir Garth: What’s this about a “6 Sigma Event”? Billions of $$ pulled from the JUNK BOND Market??

#104 Mike S on 08.20.14 at 2:48 pm

Using that logic somebody seriously looking for a home would be better off buying now, when prices are 16% lower than in the spring. How is that not obvious? — Garth

I guess the real question: is this as good as it gets for prices in Toronto? Is the correction over?

This is since you said many times you expect Toronto/GTA detached to correct by 15% and then a small slide (like a few percent every year)

And to paraphrase, If one buys now, is there no more risk of even bigger correction?

#105 Assquatch on 08.20.14 at 3:05 pm

Wow, Ferguson police is messed up big time! How can this cop still have a job after his comments?
https://www.youtube.com/watch?v=YknrZE0CCYE

#106 Suede on 08.20.14 at 3:22 pm

https://ca.finance.yahoo.com/news/rbc-forecasts-canadian-housing-market-cool-2015-interest-182202800.html

Umm, Dear MSM, please stop putting out stories of RE cooling until AFTER i sell my place!

#107 Grantmi on 08.20.14 at 3:33 pm

TORONTO — RBC Economics says higher interest rates will put a strain on the Canadian housing market in 2015 and “substantially” moderate prices increases.

In its latest Canadian housing forecast, the bank (TSX:RY) says Canada’s current historically low interest rates are not “sustainable” and it forecasts longer-term interest rates will rise by the end of the year in anticipation of a return to tightening mode by the Bank of Canada in 2015.

RBC says if current rates rise, it anticipates home resales to fall by 0.9 per cent to 463,100 units next year following an increase of 2.1 per cent to 467,200 units in 2014, while it sees home prices increasing just 1.1 per cent in 2015, compared with a jump of 4.3 per cent this year.

Read more: http://www.ctvnews.ca/business/2015-housing-market-will-cool-if-interest-rises-rbc-1.1968176#ixzz3AxjaYxFy

lol… RBC says… IF interest rates go up.

It should read WHEN!!

#108 Bottoms_Up on 08.20.14 at 3:36 pm

#107 Mike S on 08.20.14 at 2:48 pm
—————————————-
Prices don’t have to erode for there to be losses. For example, if prices moderate/are stable, and inflation’s 2%, as some people say, your debt gets easier to pay (if your wages go up), but since your house value didn’t increase you effectively lost value (you could have sold a year prior and that money would have been more valuable at that time).

In terms of someone waiting to buy a house, without wages going up, they would be effectively paying the same price…but would have had an additional year to save for a down payment.

That has really been the killer for those not in the market, how can you compete with gains on the order of $10,000 $20,000 per year just by saving? It is good to see prices moderate, and hopefully they moderate for quite some time.

There are also some crazy markets out there, good and bad. I have seen a house listed for 499k in gatineau (2 yrs ago) now asking 365k. A 27% decrease in asking price.

#109 Shawn on 08.20.14 at 3:40 pm

Money pulled from markets? I don’t think so…

Exiled at 106 asked… Sir Garth: What’s this about a “6 Sigma Event”? Billions of $$ pulled from the JUNK BOND Market??

*****************************************
Aside from the fact that Exiled does not bother to give any reference to what he is talking about… so may be a delusion…

There is no money “in” stock or bond or vegetable or house markets. Money moves “through” markets from buyer to seller.

Therefore no money has been or can be pulled out of junk bond markets.

What one investor sells in a market, another must buy.

(The exception is buy-backs by the company but that is not what you refer to here and that is the company’s discretion not investors’)

#110 rosie "moving forward" in the knowledge that, "this won't end well" on 08.20.14 at 3:45 pm

#107 Mike S

It sounds to me like you answered your own question. Only thing is…

https://www.youtube.com/watch?v=A732Cuuo2tI

#111 Bottoms_Up on 08.20.14 at 3:52 pm

#96 Cici on 08.20.14 at 12:36 pm
————————————-
Sorry not a medical doctor but did find this review for you:

http://www.ncbi.nlm.nih.gov/pubmed/17850170

Immunology/antibody diseases can be quite complex, obviously anything that depresses the immune system (i.e., stress, cancer treatments) may improve your symptoms. If I were you I’d do a risk/benefit analysis of risks living with your current condition vs. risks of taking thyroid out.

#112 Andres on 08.20.14 at 4:08 pm

It’s kind of bizarre living in Vancouver where people in my mid-thirties age group are all convinced the existing housing prices are the new normal despite being among the most unaffordable places in the world to live. It’s like we became another San Francisco in ten years without a corresponding Silicon Valley to back it up (perhaps we should be calling Surrey and Langley Silicone Valley, given the illusory and mainly cosmetic appearance of value). As someone in the employment law sector, I see massive layoffs happening all the time and I’m not sure if these industries are being replaced.

It gets awkward when another couple who make under a combined six figures explain how happy they are to have bought their $500,000 700 square foot condo. Our parents’ generation saw such glamorous increases in their home values everyone thinks their property will be a magical bubbling cauldron of overflowing gold coins that will be their comfortable retirement.

#113 devore on 08.20.14 at 4:20 pm

#50 Shawn

Now maybe Canadian deaths exceed births, if so that would free up some houses for immigrants. I don’t have the stats. In fact if deaths exceed births why else but immigration or to replace torn down houses are we building 200k per year. Part of the reason would be fewer occupants per house. But really immigration has to be a significant driver here.

It is the only driver. Canada’s fertility rate is around 1.6, while 2.1 is considered replacement rate for developed countries like Canada (.1 to account for some infant and early deaths). Our population growth is strictly due to immigration. But that’s just normal for almost every western country.

Relative to housing, the important factor is household growth, while closely related to population growth, it is not the same. The trend is towards singleton and DINK households, rather than 2+ kids and a dog households. More of us live in condos, for no other reason than we don’t need more space, nothing sinister behind it.

As you can imagine, household size is dropping, so household formation should be slightly outpacing population growth.

Housing starts then fall into 4 categories:

1. Rebuild. Net 0. Not interesting, but these often contain 1 or 2 suites the old house did not have.
2. SFH subdivision. Splits a house into up/down or side/side individually titled suites.
3. Densification. Condos/townhouses.
4. Greenfield. New subdivisions, etc.

There are some units destroyed, maybe a handful in small towns and rural areas as properties vacate and fall into disrepair.

So almost every housing start is net adding units, even if it’s just a rental suite. This is why I didn’t understand Garth’s quip yesterday about immigration and housing starts. Additional households require additional housing units, regardless of where they come from or whether they rent or own. In Canada the majority of net new households come from immigration, and that is what drives new unit construction.

Well, that and speculation, but we have no reliable figures on that.

#114 Cici on 08.20.14 at 4:30 pm

#103 Sheane Wallace

Yes, Synthroid, but in my case they’ve been trying to dose me for three years and my TSH and antibody levels still haven’t stabilized. Thought there might be something I’m missing…guess I’m just a complicated case.

Sorry Garth, from now on I promise only to talk about mammary and reproductive glands, and SM’s prostrate)

Now back to finances ;-)

#115 Sheane Wallace on 08.20.14 at 4:42 pm

#115 Cici

We need both financial and physical health.

You might need second opinion on why it takes so long to fine tune the dose.

My advice is to either explore taking to another speicalist in Canada or go to the states (you pay and it could be quite a good amount but you don’t need to wait).

In the last few years I have spent for my family in the lower 5 digits on medical consultation/procedures in the states. Speaks enough about our ‘free’ health care, I prefer to pay and sleep well.

#116 JSS on 08.20.14 at 4:45 pm

#117

Yes, I’m also aware of synthroid for thyroid gland. It seems to work well, but you need to take it regularly.
I think it’s for underactive thyroid.

#117 Nemesis on 08.20.14 at 5:31 pm

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http://youtu.be/RlphfLO3MYA

#118 Habs76-79 on 08.20.14 at 6:05 pm

#102. Happy Renting said,

It’s not a random sample, so the percentage of people who can’t come up with $500+ for an emergency is likely higher. Not surprising, mediocre money management abounds. If you’re ever in a position, observe the panic that ensues when pay/pogey cheques are one measly day late. Lots of people living with little/no buffer.
———————————-

This condition is mostly a state of a society built on over consumption using credit to do so. Building up level of debt that may saturate a normal and balanced lifestyle.

People often buy more “crap” than they need and may even want. Oh, they think they want some crap because they can just buy it and worse buy it on credit. They think this brings them joy, satisfaction and status. But often it only brings misery and big emotional fall as the novelty of the latest piece of crap bought wilts and they see that family and friends they try to impress with are more or less “YAWNING!” to their latest crap purchases and often these family and friends try to impress you with the latest crap they bought!

This cycle can be never ending and if fueled by high use of credit on stuff that pays no return, is not needed and not really wanted (as you stuff it in a closet, drawer, attic, basement or shed within days or weeks of buying it). Thus is big reason why all too many households cannot scrape together TWO QUARTERS let alone LOONIES!

So where does one begin the reprogramming of one’s mind and lifestyle?

1. Stop going out to shop as if it’s a hobby, most people go out to shop in real brick and mortar stores or online because THEY ARE BORED! STOP DOING IT! Also do not just buy stuff because it’s on sale. If you have n need nor real want it matters not if it’s on sale. KEEP YOUR MONEY, KEEP THAT PLASTIC IN THE WALLET!

2. Go through your things and begin to be brutal on what and why you should keep much of the stuff you mindlessly attained. Sell stuff that you can make a buck or two on line or a yard sale, give stuff to others you know and feel may use and give other stuff to thrift stores as a donations.

3. How to get more than $500 in a daily savings/chequing account? Before one can begin to worry on that BIG DAMN PILE OF STUPID DEBT ONE ACQUIRED! You need to change how you look at money. Begin to weekly put money into your savings/chequing account. Stop buying too many coffees, or buying lunch for work etc. Quit smoking, do not go out to the bar/pub as often as you do. Money saved dump back into your daily savings/chequing account! Do this until you reach a set upon goal of $1000.

Once you reach $1000 you give yourself a HIGH FIVE as you hit a goal! You also began to change the way you look, value and use money.

4: As per my reading David Ramsey’s points online, next is the repaying of debt(s). Contrary to belief if you have multiple debts, do not pay of the highest interest one off nor the largest until you clean up the smaller ones. IE: You have $1,000 on a low interest credit card say 5%, You also have $5000 personal loan at say 7% and finally you have a old rung up store credit card balance of $9,000 at 24%. Now if the low interest credit card has room on it to pay out the highest interest card then do it. But if it does not PAY THE LOWEST BALANCED AMOUNT OFF FIRST! Once you pay off that lowest amount debt, you the take the money you were paying for it and move it up to the next lowest amount debt. This creates a snowball effect and will likely get your debts paid down or off quickest.

5: Stop using credit to buy things err; crap you really do not need nor even may want. No more buying big screen t.v.s using credit! No more buying fancy shoes, clothes etc. using credit. Train yourself to save money for said purchases later. Stop buying cars (esp. new cars) just because of sales hype. If your current car serves every purpose KEEP IT! It is cheaper to keep it running on the road even with maintenance and repairs than it will be to ditch it (esp. if the loan is still not paid off) because you are bored with it or caught like a kid in a candy store to a new car, than it is to buy the next great car. Cars are fun, but they are overrated and sold on hype and IMO quite sleezy financing selling ideals.

I can go on with this buying stuff.

7: Do not do consolidation loans UNLESS YOU GET RID OF THE CREDIT CARDS AND/OR LINES OF CREDIT YOU WILL BE PAYING OFF! Even at that the snowball effect pay down I noted above is probably better, but if you are so strung out and see a consolidation loan as your only savior, then do it but never use again IE: GET RID OF the credit cards or line of credit paid off.

8: Debt and the lack of making ends meet is firstly a personal/emotional problem? Nobody forced you to pile on such debt and as a result crimp your ability to keep your head above water. Too much debt robs you of real money earned tomorrow to pay for a lifestyle you cannot meet today! If you want a lifestyle of a princess or king so to speak, YOU NEED TO GAIN MORE INCOME! not use more lines of credit!

9: Once you get to the $1000 in savings/chequing account and high fived yourself, TAKE IT UP A NOTCH! Shoot for $2000 goal. It really is not as hard as you may think. We all tend to piss away money, some have an ability to do so, others don’t. Stop buying crap you don’t need nor really want. Stop shopping as a hobby or for boredom. Find other activities that cost less to no money. Stop buying coffee out each day. It costs mere cents per mug to make yours at home! Stop buying lunch out each work day. BROWN BAG IT the way you parents and grand parents likely did. Stop trying to impress others with things you buy/bought. HONESTLY THEY REALLY DON’T CARE!

Well I hope I helped some here.

#119 Exiled on 08.20.14 at 6:36 pm

Sir Garth: With Patience: Shawn @ 112, 08.20.14 at 15:40/ RINF : Snyder : A Major Event Just Happened In Financial Markets;

#120 Vancouvermill on 08.20.14 at 7:10 pm

Rates are May (key word may) move a half percent in 2015…..I’m sure this will bring the housing market to its knees! …..finally after a decade of waiting in musty basements we mite see a price decline here in the land of Lexus and lulu. Keep dreamin blog dogs