Chutzpah

TRUCK modified

Note: If you were coming here today to learn about rebalancing, too bad. Regular programming resumes tomorrow.

My first impression was that somebody wanting you to give them four grand a month to live in their house should cut the grass. But I overlooked it. After that, the next view past the cheery red door opening onto the Lilliputian foyer was of a tiny, galley kitchen straight out of Starsky & Hutch. Put shag in the dining room next door and a Dodge Dart in the drive out front, and it’d be perfect.

I tried to open the ancient dishwasher. Seized. Refinished floors but tired walls on the main floor. No bathroom save the miniature one with the Home Depot vanity-in-a-box upstairs, looking like it had gone through an exhaustive three-hour reno.

‘No guest bathroom?’ I asked. The agent said there was a two piece in the basement. I trundled down and found it:

BATHROOM modified

Outside no deck, no gardens, no landscaping on the 30-foot lot. Just some dank grass surrounding a geriatric garage down the mutual laneway. We stood and looked up at antique wooden storm windows painted shut with fifty coats, and I wondered what this world is coming to.

This is a famous house. Back in April it made national headlines because it typified a real estate feeding frenzy that briefly drove the price of the average detached home in 416 – urban Toronto – soaring past the $1 million mark. This building, now sitting unkempt and frumpy, was then an intense object of unbridled desire. During the open house Glencairn Avenue in the north Toronto hood was all but impassable. More than 1,000 people jammed into its unrenovated rooms and jostled on the narrow wooden stairs.

When it came time to review the offers on a Sunday night there were 72 of them. Hours later the property sold for almost double the asking price – 195% above list. The vendor wanted $699,000, and ended up with $1,366,000. In fact, 80% of the offers were for more than $1 million.

GLENCAIRN  Of course, there was more to the story, as I told you many months ago. The agent had purposefully mispriced the home to engineer a massive bidding war among as many rabid buyers as possible. No house on Glencairn had sold for that kind of money in over a decade, after all – even an original 1930s structure full of knob-and-tube with a one-holer in the unfinished basement.

And frenzy is what he got. Plus a boatload of criticism when it came out that one of his own clients ended up ‘winning’ the war. Not only did the agent double-end the deal, but a lot of people asked if it was ethical for the agent overseeing the blind auction to also be the one guiding the buying decision.

Said Bradley Hutton, in his own defence: “We expected in the $1.1 million range, but the market pushed it. There are a lot of buyers out there desperate to find a house. It’s definitely a sellers’ market.” Hutton also said he did what he did “to create buzz”, that the house needed about $300,000 in immediate renos and the buyer was a neighbourhood guy who intends to fix it up and then live there.

But that didn’t happen. When the house surfaced days ago as a rental, I checked it out. The agent (a new one) says the owner’s “an investor” who spent some cash on refinishing floors and paint, and now wants to find a tenant who will pay $3,900 a month (plus utilities). Frankly, it’s hard to imagine who would hand over almost $50,000 a year to dwell in such a place, even on an upscale street. But the buyer’s apparently no financial genius, either.

With Toronto’s double land transfer tax, legals and a quicky ($50K) reno, the invested amount is at least $1,470,000. The lease (less commission and property tax) will net about $35,000 – money added to the investor’s income and fully taxed at his marginal rate. Even so, it’s just a 2% return on the investment.

Of course, if he financed a million or so, then the ‘investor’ is cash-flow negative by about $1,000 a month. And if he paid cash, bad choice. His $1.4 million invested in a nice middle-of-the-road balanced portfolio could earn about $105,000 a year – taxed at half the rate payable on rent – instead of sitting in a geriatric pile paying (at best) the same as a GIC at the Croatian Curlers’ Benevolent Credit Union.

Anyway, this house played a significant role in making several million people believe real estate was going ballistic five months ago. With the news of 72 offers and someone paying $670,000 more than the asking price, it gave every agent and broker something to point to as evidence of insatiable demand and never-ending gains. The property helped increase average prices in the country’s largest market, making real estate less affordable for everyone.

There should be a statue on the lawn. To Brad. Inscribed, simply, “What were we thinking?”

180 comments ↓

#1 Van Isle Renter on 09.08.14 at 5:44 pm

I’d have nightmares about owning that house. It would be the first instance of someone being functionally homeless while owning a $1 million + property.

#2 TheManwhoStaresatSheeple on 09.08.14 at 5:52 pm

NYTimes article – Dethrone ‘King Dollar”

http://mobile.nytimes.com/2014/08/28/opinion/dethrone-king-dollar.html?referrer=&_r=3

#3 active on 09.08.14 at 5:57 pm

Seriously, reblancing? people don’t know how to do that? your long term strategic asset mix (SAM) is 60% stocks, 40% fixed income….if your portfolio rises to 65% stocks, well you ‘re-balance’ and sell 5% of stocks and add that amount to your fixed income to maintain your 60/40 SAM….there, Garth, I just saved you a post. Do it annually, people….quarterly is too excessive.

#4 Jan on 09.08.14 at 6:02 pm

My husband and I have been in the construction industry for many years and experience the slow down in the 80’s, 90’s and the brief pause of 2008. Each time kicked off with builders halting projects. Just got notice that a building we were to start working on in the spring will not be finished as the builder has cancelled it because they couldn’t sell enough units. This was phase three of a residential project in Richmond. This was the second cancelled contract we have had recently here in the Vancouver area. Just FYI from the construction industry trenches.

#5 Piano_Man87 on 09.08.14 at 6:04 pm

At $1.37M that means the buyer put at least $274K down. How do such stupid people get so much cash? It is remarkable.

#6 Freedom First on 09.08.14 at 6:04 pm

Nice Garth. This is how people who actually have money can go broke. It is also how people who don’t have money can leverage themselves into bankruptcy. The age old adage is certainly true, “a fool and his money are soon parted”. RE mania. Easily the world’s #1 Financial condition catapulting people into financial ruin. Already recently proven to be the truth. I am so glad Canadians are different. Oh, wait.

#7 screwed on 09.08.14 at 6:11 pm

What is all this deflation I hear about?

1 lbs of Apples costs 4x this summer vs. 4 years ago.
Potatoes, tomatoes, lettuces and so on you the same.

It’s not even the cost of energy that is the killer to the consumer economy.

Cost of food and housing has done us in.

#8 Helen on 09.08.14 at 6:15 pm

Drove down Denman in downtown Vancouver today. Counted five businesses that have closed in the past several weeks with. None for remodeling. Only one indicated a new business opening soon.

#9 Catalyst on 09.08.14 at 6:21 pm

In other news, a report from CIBC says that sales of $1.1M+ homes has been increasing while sales of <$500K has been decreasing. Ask yourself, how is this possible. It isn't first time buyers, and it isn't move up buyers (since they can't sell their own dwelling) so who is buying this stuff?

#10 Happy Renting on 09.08.14 at 6:24 pm

Great work, turning up this house’s reemergence as a rental! (Did you have to use an alias to get a viewing with the agent?) A sober, second look at a house everyone was so hot for, not that long ago. Didn’t turn out as expected.

#11 OttawaMike on 09.08.14 at 6:25 pm

You need to revamp your entire research department staff, Turner.

Starsky and Hutch drove around in a Grand Torino not a Dodge Dart.

#12 Metrotown on 09.08.14 at 6:28 pm

Friend “lost” a bidding war last nite for a house here in new Westminster a burb of vancouver . House went 20k over asking. My tongue is still bleeding from biting it so hard….I was outnumbered and didn’t have Garth’s talking points on hand….plus it’s an argument you can’t win with horny millenials.

#13 Brian Ripley on 09.08.14 at 6:33 pm

“Even so, it’s just a 2% return on the investment.”

I argue that a real estate investor should get at least 2x the yield of a BoC 10 year bond (4%) to insulate against risk and in Vancouver I calculate that a minimum 25% drop in condo prices could provide that yield.
Case study: http://www.chpc.biz/history-readings/vancouver-condo-yield-case-study

But there is an aspect about the Toronto housing market that keeps the players coming, and that is size. It’s the biggest Canadian market and has the highest sales volumes (2-3 times any other Cnd metro) AND has the highest Monthly Absorption rate (over 40%) and the shortest time from list to sell (just over 2 months)
http://www.chpc.biz/mar-moi.html

#14 Victor V on 09.08.14 at 6:42 pm

PRICE DROP #4 – 226 Riverside Drive – SWANSEA

http://themashcanada.blogspot.ca/2014/09/price-drop-4-226-riverside-drive-swansea.html

I first posted it in July 2012 when the asking price was $3,198,000. Though the house is located on an amazing lot with a great view…

The price was kind of high for a 3 bedroom.

It didn’t sell and the price was dropped a year later to $2,799,000. It didn’t sell but was back on the market in October for the same price.

Still no sale and in May the price was dropped to $2,788,000.

The price is now down to…

$2,600,000.

#15 Porsche on 09.08.14 at 6:48 pm

Stocks continue to make new record highs, despite poor jobs data and the potential threat of World War III.

Share buybacks continue to boost the illusion that stocks are attractive, enticing retail investors to pour more money into this bull market.

Fighting (and shorting) the market here is just plain stupid – no matter how fundamentally wrong stocks are relative to the economy.

Over the past five years, I have told readers to never bet against an entity that has an unlimited bankroll.

The Fed has effectively boosted world stocks through asset purchases and low interest rates, turning risk-on mentality into overdrive.

And the risks continue to pile on.

Debt: The Ultimate Cover-Up

Countries and corporations all over the world are turning to debt to cover economic decay.

Take a look at the growth of international debt securities:

http://www.equedia.com/debt-ultimate-cover-up/?utm_source=September+7%2C+2014&utm_campaign=September+7%2C+2014&utm_medium=email

#16 Victor V on 09.08.14 at 6:49 pm

Thinking about a move-up buy? Forget it, new study says you can’t afford it

http://business.financialpost.com/2014/09/07/thinking-about-a-move-up-buy-forget-it-new-study-says-you-cant-afford-it/

He says the more expensive a property is the faster its price tends to be rising. Mr. Tal adds someone trying to move from say a $600,000 property in Toronto to a $900,000 property ends up having to pay not only for the jump in category but for the fact that “the move-up property has risen faster than the price of their own property.”

The economist maintains this trend is true in all the five cities studied, which also included Edmonton and Ottawa.

Canadians faced with this inability to”move up” have turned to the renovation market with spending on home renovations as a share of total residential investment about 46% over the past five years — the highest on record.

“The picture that emerges is of a much more static market than perceived by many,” says Mr. Tal, who thinks the higher end of the market might end up more vulnerable to price adjustments.

#17 GsAmazon on 09.08.14 at 6:51 pm

Outstanding. Rebalancing can wait for this. wow.

#18 cecilhenry on 09.08.14 at 6:55 pm

See bathroom pictures like that are the reason why when people say “YOu could own a house”

I just say: “Nah. Even if I did, I just wouldn’t care.”

Would I be proud to own this??? NOPE.

I’d rather have the cash. For sure. This feels like a burden and I dont even own it!!!!

#19 jess on 09.08.14 at 6:57 pm

http://www.marketwatch.com/story/stock-buybacks-blamed-for-lack-of-us-prosperity-2014-09-02

Each series of notes will constitute a new class of securities with no established trading market. The notes will not be listed on any securities exchange or on any automated dealer quotation system. The underwriters have advised us that they currently intend to make a market in the notes. However, they are not obligated to do so and they may discontinue market-making activities with respect to the notes at any time without notice. Accordingly, we cannot assure you as to the liquidity of, or the trading market for, the notes.

#20 Mon on 09.08.14 at 6:59 pm

Clearly the buyer doesn’t want to put money into it since he bought it to appreciate in value. He knows that any money invested in a reno is a lost cause since it will sell in the future for lot value only.

However, he is truly delusional if he thinks someone will rent it in the current condition.

#21 Mark on 09.08.14 at 6:59 pm

“In other news, a report from CIBC says that sales of $1.1M+ homes has been increasing while sales of <$500K has been decreasing. Ask yourself, how is this possible. It isn't first time buyers, and it isn't move up buyers (since they can't sell their own dwelling) so who is buying this stuff?"

As I pointed out probably hundreds of times on RFD before a bunch of trolls got me banned — the sales mix is changing. Boomers with significantly paid-off houses continue to, as a matter of the ordinary course of business/life, trade houses amongst themselves. While the first time buyers, due to changes in CMHC subprime mortgage insurance, have largely been locked out. Mortgage credit expansion has largely been stopped in its tracks.

“1 lbs of Apples costs 4x this summer vs. 4 years ago.
Potatoes, tomatoes, lettuces and so on you the same.”

Not seeing that here in Western Canada at all. And am still filling up the car at lower prices than I paid at the same time in 2008, or even 2005 (in the wake of Hurricanes Katrina/Rita).

#22 Smoking Man on 09.08.14 at 7:01 pm

Real estate slows in fall comes back in the spring. MSM will not lead it’s cash cow to the gallows.

It’s job easy, surfs, fools, idiots with false sense of brains cause they successfully memorized, regurgitated and obeyed. The certificate in the frame proves it.

Tomorrow MSM will give us a report on MH17

Can’t wait for this….. I’ll tell you what they will say.

MH17 suffered an explosive decompression. We suspect it was a missile, we don’t know who fired it.

There will be no communication of the ATC and pilots.

If there is, it will start after the pilots where ordered to change course, and desend.

The Dutch, if they want to maintain any credibility to there precious war crimes court better do the right thing.

Cause if they don’t, if they lie, remember Russia has bombers practising first strike nuke attacks..

Or side has completely lost there moral compass, allowing the murdering of innocent passengers and allowing the cover up…

#23 GARTH VADAR on 09.08.14 at 7:07 pm

Hey Garth, I’m packing up the family & getting the hell out of Vancouver. Where in Nova Scotia do I start looking for a home in the $25OK price line. Wife a dentist. Myself in the trades, reno, & reo properties. 2 big dogs & we hate west coast style people of course, lol.

Much appreciated.
Vince

#24 GARTH VADAR on 09.08.14 at 7:14 pm

My other option to Nova Scotia is Arizona as the wife is American. I am the Canadian. Were both 4O.

WTF would you do?

Vince

#25 Sheane Wallace on 09.08.14 at 7:15 pm

therr ya go

http://www.silverdoctors.com/supreme-excellence-pt-5-the-worlds-plan-to-leave-the-dollar-behind/

#26 Mr. White on 09.08.14 at 7:15 pm

Wow, I mean wow. I hope stupid isn’t catchable.

Will someone actually rent this joint?

#27 lee on 09.08.14 at 7:18 pm

#2

Doesn’t rebalancing work better when you invest more to rebalance, rather than taking from one pile and shifting it to another?

#28 Cici on 09.08.14 at 7:26 pm

#2 active
Thanks, but I think most of us are aware of that approach. There are different strategies to rebalancing, and I myself would like to hear GARTH’s view.

#20 Mark
#6 Screwed is totally correct as pertains to the rising-food-cost situation back East. I walked into a grocery store today with the intention of buying some luncheon meats and a bit of chicken, but changed my mind in a fit of rage.

Will be canning what’s left of this year’s garden harvest all weekend (I’ll call my Grannie for recipes), and then I think I’ll revert to vegetarianism. Beans, rice and lentils baby…in bulk. And if those go up too much, I’ll be doing cat food…the generic off-brand stuff.

#29 Stupesing in Cabbagetown on 09.08.14 at 7:27 pm

Will the house lust never end? A young man at work (30 something) breathlessly announced this morning that he and his wife saw a house in a suburban neighbourhood on the weekend that they just have to have and they will put in an offer if they can get financing. This same young man does not have an RESP for his two-year-old child because they “can’t afford it”. Sigh!

As an aside, he said they will make an offer below asking because the house requires some work. For example, they will have to tear-out the linoleum and put in “real” floor tiles. Why did linoleum (made from a renewable resource – linseed oil) become so undesirable while granite and marble (environmentally disastrous to mine and ship) became de rigueur?

#30 T.O. Bubble Boy on 09.08.14 at 7:30 pm

Garth – did you ask if the buyers were HAM?

#31 Sheane Wallace on 09.08.14 at 7:34 pm

and another one:
http://www.paulcraigroberts.org/2014/09/08/25748/

#32 Flawed on 09.08.14 at 7:35 pm

You mention Canada when I am talking about Toronto.

Toronto is Canada’s financial and business capital.

Rated as one of the top four global cities with economic clout (Cities of Opportunities Report, PwC, 2014), and topped the North American Cities of the Future, fDi, behind only New York, Toronto is a dynamic, diverse, rising city that provides the ideal business environment for companies looking for a competitive edge.

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

So….your talking about the province that is pennies away from declaring bankruptcy? I see.

#33 Realties.ca » Chutzpah on 09.08.14 at 7:50 pm

[…] Source: http://www.greaterfool.ca/2014/09/08/chutzpah/ […]

#34 Retired Boomer - WI on 09.08.14 at 7:58 pm

Wow. A nice Green Bay, WI home for $69,900 in Milwaukee probably between $44,900 and $119,000 a lot would depend on the hood. Detroit figure $34,000 in the city proper.

Look the dam thing is 80 years old, no renovations and basically a POS as it sits. So, only a delusional in 416 would pay that kind of money. Of course, you might earn more in Green Bay.

Back tomorrow for the rebalancing act.

#35 Sheane Wallace on 09.08.14 at 8:03 pm

wow Garth, these links made it.

I am impressed.

#36 Kenchie on 09.08.14 at 8:05 pm

Garth,

I love these examples of bad investing decisions. More people need to learn from other people’s mistakes. Thanks for showing this to the world.

#37 Sheane Wallace on 09.08.14 at 8:05 pm

organic apples 3.99 per pound. the price was 1.99 (on deal 1.49) 4 years ago.

Deflation… sigh…

#38 crowdedelevatorfartz on 09.08.14 at 8:05 pm

@#31 Flawed
As much as I hate to admit it …..

excellent rebuttal

#39 Lolo on 09.08.14 at 8:08 pm

Garth, just curious, do you find the photo first, do you come up with the title first.

They come together in a trance. — Garth

#40 crowdedelevatorfartz on 09.08.14 at 8:11 pm

@#22 Garth Vadar
Your wife is a dentist and your moving to Nova Scotia?
Hmmm, avoid Sydney, Cape Breton. Teeth dont seem to be a priority there.
As a matter of fact when I drove the beautiful Cabot Trail last summer I noticed that the folks(male AND female) in Sydney seemed to have more feet than teeth…… For example I filled up at a gas station and went in to pay and told a funny joke to the pretty girl behind the cash register, …… and then she laughed…………..

The horror, the horror.

Then I ran, I swear I heard banjos………
Still cant get the visual outta me head.

#41 JSS on 09.08.14 at 8:23 pm

#6 screwed on 09.08.14 at 6:11 pm
What is all this deflation I hear about?

1 lbs of Apples costs 4x this summer vs. 4 years ago.
Potatoes, tomatoes, lettuces and so on you the same.

It’s not even the cost of energy that is the killer to the consumer economy.

Cost of food and housing has done us in.

=====

Some days I don’t even want to eat. As long as my wife and kids eat, i’m ok.

sad truth.

#42 TnT on 09.08.14 at 8:27 pm

72 Offers and 80% of the offers were for more than $1 million. That means there are 57 buyers seeking a 1 million dollar plus fixer upper in that neighborhood.

Real Estate is local and it’s all about supply and demand.

I don’t think this owner or the 57 other potential customers worry about the same things the average Canadian does.

#43 High Plains Drifter on 09.08.14 at 8:29 pm

I love this story, a house starts with the Spring Headliner for the bulls and ends the year as the Fall Headliner for the bears.

#44 Snowboid on 09.08.14 at 8:31 pm

#23 GARTH VADAR on 09.08.14 at 7:14 pm…

May want to wait on AZ until it dries out – some places got 5 inches of rain today, most rain since the late 1800s.

Luckily our home was untouched, due to a slightly elevated lot, and well-planned drainage – but a neighbours’ pool overflowed!

I would prefer the maritimes if it weren’t for the winters, on the other hand we spend our summers in the Okanagan to avoid the 40+ degree heat in Phoenix.

250K will buy a very nice home in Phoenix, however!

With all the online RE information available (all secret in Canada) it’s also easy to pick the right place.

#45 Drn on 09.08.14 at 8:39 pm

Relating to a post a few days ago (17% drop in price from Spring to August or so). What do you think this Glencairn property would fetch now? Also, what part of TO is this in? Thanks.

#46 SOS on 09.08.14 at 8:42 pm

Sydney, Nova Scotia is beautiful. A nice house costs about $175,000.

#47 Kenchie on 09.08.14 at 8:49 pm

#30 Sheane Wallace on 09.08.14 at 7:34 pm
“and another one:
http://www.paulcraigroberts.org/2014/09/08/25748/

Paul Craig Roberts is a total hack. He’s super anti-US economy for some reason. He can find the worst thing about anything in any story, which is a shame. He’s just so bloody pessimistic. Very often, when I fact-check his writing, I find that he’s completely tilting a story or a point in a way that is very hyperbolic and borderline lying to the audience.

Be wary of anything he writes.

#48 Kenchie on 09.08.14 at 8:51 pm

Paul Craig Roberts is very partisan, despite what he writes in his “Quarterly Donation Request” post on the website you posted. He makes money off of those who are buying into his point of view in the same way that Bill O’Reilly or Sean Hannity do it for Fox News.

#49 Detalumis on 09.08.14 at 8:58 pm

#27 Lentils and dried beans in bulk are way cheaper than cat food. I’m not sure where the cat food is cheap myth comes from but that’s all it is, fantasy. I am vegetarian and you can eat very cheaply if need be on big pots of vegetarian chili and such.

#39 Yes so funny making fun of people that don’t have dental insurance, lower incomes, can’t afford it and have to make do with lousy teeth, what a joke, ha, ha, hillbillies. Give your head a shake. Dental bills are out of control.

My husband is going through 75K of treatment for implants including all the bone grafting etc. etc., none of it covered by insurance. Those that can’t afford it can put up with ill-fitting dentures, sunken cheeks and gum it the rest of their lives, what a joke ha-ha, hillbillies. Dentists today make more than doctors and I’ve never met one yet that had an altruistic bone in their body.

#50 IT'S DIFFERENT HERE! on 09.08.14 at 9:01 pm

I hope this shows everyone here that blogger Mark, even in an infinite universe, is a waste of space.

Believe your eyes and ears

195% above list
72 offers

Still Believe in the Garthian gospel of ‘The Correction’?

And guess what? There is a shortage of listings in 416.

I hear the chorus of parrots:
‘vultch vultch’
‘this will not end well’
‘when emergency rates end’

blah blah

Yup, yawana buy here? Read your slide rule, historical stats, and spread sheets as you stand in line behind 20 others to get your offer rejected.
Because

IT’S DIFFERENT HERE!

#51 Roy on 09.08.14 at 9:04 pm

HuffPost front page

3 out of 10 Canadians Screwed if Bad Times Hit: BMO**
http://www.huffingtonpost.ca/2014/09/08/emergency-savings-bmo-financial-security_n_5784992.html?utm_hp_ref=canada

*Number of screwed only refers to those who have little to no savings. It does not include those who lose their job, retirement savings, or would be affected by a housing market bust in a downturn

**It’s different here.

#52 Gary in Kelowna on 09.08.14 at 9:12 pm

“The Croatian Curlers Benevolent Credit Union”?? Thanks for the laugh

#53 Smoking Man on 09.08.14 at 9:15 pm

#47 Kenchie on 09.08.14 at 8:51 pmPaul Craig Roberts is very partisan, despite what he writes in his “Quarterly Donation Request” post on the website you posted. He makes money off of those who are buying into his point of view in the same way that Bill O’Reilly or Sean Hannity do it for Fox News
……

So because he’s asking the teachers questions, he disagrees with narrative… He’s a grown up now, independent and can speak his mind without consequences.

Let’s brand him, a nut. A tinfoil. A stupid jerk.

Your teachers did a good job on you….

#54 Uh Oh Canada on 09.08.14 at 9:16 pm

I inquired about a house for sale that used to be a grow-op. Asked the agent if an inspection was done to see if it was habitable. She told me that no inspection was done but that I should hurry since three offers are already at the table. That was two months ago, and the house is still listed on MLS for sale. Liar, Liar, pants on fire.

#55 SealTeam0 (so secrect I'm not sure I exist) on 09.08.14 at 9:21 pm

I have a better question with regards to the picture. Do you know where it was taken? Because I know a few paraplegics, with huge upper body strength, that would like to have a word with this idiot while a few quadraplegics looked on (I’ll supply the bats free of charge). What an asshole and the sad thing is how often you see similar things all the time. Usually an 18 to 30 year old bounds in or out of the store.

On the house, could some rent just the basement? It looks uhmmmmm rustic and open concept.

#56 Sheane Wallace on 09.08.14 at 9:28 pm

#46 Kenchie
And yet Paul Craig Roberts is the only author I know who points to the real issues: outsourcing and Genetically modified food.

The only one! amazing.

#57 Sheane Wallace on 09.08.14 at 9:29 pm

#52 Smoking Man

You absolutely and terrifically nailed it. I will engrave this post in my memory.

#58 Kurtis on 09.08.14 at 9:32 pm

Place looks more SAW than Starsky and Hutch to me…OTOH, the basement might be a good base for you to lock up your infamous research staff…definitely be livin’ large compared to your wine cellar….

#59 Kenchie on 09.08.14 at 9:38 pm

From Confusion:

#25 gladiator on 09.07.14 at 7:14 pm
“How can deflation destroy money, when it actually increases its value?
Inflation, on the other side, DOES destroy money gradually by eroding its value. How much does a dollar buy today compared to 30 years ago?… Exactly!”

It’s a different definition of “destroy”. Inflation, as you mention, slowly erodes the value of $1, blah blah blah. Everyone understands that.

What people don’t get about deflation is that it leads to overbearing debt burdens that can’t possibly be paid back (think Greece right now). Therefore, the only way to break the burden (without inflating away) is to have companies and people go bankrupt and wipe away the debts. The banks will own equity in companies that is worth less than the debt they lent. Assuming they liquidate the company, or the collateral pledged by people, they would receive less than 100 cents on the dollar. Hence, money is “destroyed”. To be fair, money is destroyed at the time of misallocation of resources, rather than when debts are in default.

#60 Financial Freedom at 40 on 09.08.14 at 9:40 pm

#44 Drn on 09.08.14 at 8:39 pm
Relating to a post a few days ago (17% drop in price from Spring to August or so). What do you think this Glencairn property would fetch now? Also, what part of TO is this in? Thanks.
———-
Lawrence Park South. Gut it and put in $500K of renos and you may try for $1.2M like this one a few hops away
http://www.realtor.ca/propertyDetails.aspx?PropertyId=14848106

#61 devore on 09.08.14 at 9:40 pm

#7 Helen

Drove down Denman in downtown Vancouver today. Counted five businesses that have closed in the past several weeks with. None for remodeling. Only one indicated a new business opening soon.

There is turnover. One of the places was a sort lived bbq pulled pork sandwich place, which found quite tasty if a bit overpriced, opening a pasta place. Another has Vietnamese fusion restaurant opening, and the market is reopening. Another 2-3 more are closed. The area always has vacancies, something new is always coming up. I wouldn’t read too much into it.

#62 OttawaGUYRenting not worried but totally worried on 09.08.14 at 9:41 pm

Ontario is buggered as it can’t create jobs… Only more debt!

http://www.ofina.on.ca/borrowing_debt/issuedbonds.htm

Sad state of affairs as this Economy sputters and spins down the crapper

Fill the bowl with medical…smoke em if you got em

#63 Kenchie on 09.08.14 at 9:41 pm

#52 Smoking Man on 09.08.14 at 9:15 pm
“#47 Kenchie on 09.08.14 at 8:51 pmPaul Craig Roberts is very partisan, despite what he writes in his “Quarterly Donation Request” post on the website you posted. He makes money off of those who are buying into his point of view in the same way that Bill O’Reilly or Sean Hannity do it for Fox News
……

So because he’s asking the teachers questions, he disagrees with narrative… He’s a grown up now, independent and can speak his mind without consequences.

Let’s brand him, a nut. A tinfoil. A stupid jerk.

Your teachers did a good job on you….”

I’m simply pointing out that he is incentivized in courting a specific type of reader with a specify pre-ordained bias.

Forgive me for insulting you if you are one them (my dad is for sure). I just remind people to fact-check before reading consistently overly pessimistic and negative view points.

PS: If Garth asked for donations, I would say the same thing about him!

#64 AfterTheHouseSold on 09.08.14 at 9:42 pm

#40 JSS
“As long as my wife and kids eat, I’m ok”.

Our contract work dried up during the great downturn of the 1990’s. Some weeks we were left with $20 after the bills were paid, enough to buy milk, apples, bread and jam for school lunches. Fortunately we had meat in the freezer and vegetables in the garden for dinner.
I wish you well. Take care.

#65 Spectacle on 09.08.14 at 9:43 pm

#28 Stupesing in Cabbagetown on 09.08.14 at 7:27 pm
……….For example, they will have to tear-out the linoleum and put in “real” floor tiles. Why did linoleum (made from a renewable resource – linseed oil) become so undesirable…………?
***************************

That good old Lino has asbestos backing/filler, that’s why it takes a Haz permit to remove it now. Like Vermiculite in that $1.366 million beauty in the blog today.

Ps Garth, that place is actually a 3 piece downstairs if you turn that cool retro drain into a walk in shower stall! Just saying….

#66 Kenchie on 09.08.14 at 9:43 pm

#55 Sheane Wallace on 09.08.14 at 9:28 pm
“#46 Kenchie
And yet Paul Craig Roberts is the only author I know who points to the real issues: outsourcing and Genetically modified food.

The only one! amazing.”

Is he? Have you ever stumbled upon trnn.com?

http://therealnews.com/t2/

or http://www.informationclearinghouse.info/

Both are good repository for alternative views.

#67 Andrew Woburn on 09.08.14 at 9:45 pm

#24 Sheane Wallace on 09.08.14 at 7:15 pm
therr ya go

http://www.silverdoctors.com/supreme-excellence-pt-5-the-worlds-plan-to-leave-the-dollar-behind/
==============================

The article said:

“Without the world reserve currency, Washington D.C. would have to resort primarily to taxes, as the manner in which it paid for things.”

If Washington is only able to run deficits because it controls the world’s reserve currency, then obviously other countries must be unable to spend more than they tax.

What a relief!

#68 OttawaGUYRenting not worried but totally worried on 09.08.14 at 9:46 pm

That was two months ago, and the house is still listed on MLS for sale. Liar, Liar, pants on fire.
————————-

Call him and tell him that. Use an IPhone app to record it… Worthy of an upload

#69 Marco Polo on 09.08.14 at 9:46 pm

I just got back from Nova Scotia, everyone I spoke to had good teeth. Amazing, half the province is uo for sale. A good, big home will be $175K. They have some huge, older post and beam homes you don’t see in Western Canada. Solid. People are very nice there, easygoing, and far less rushed than here. I love the Anapolis Valley. A really nice part of NS. Halifax is great too if you have good legs, but you don’t see too many old folks downtown, far too steep a climb. Great for someone wanting a quiet semi or full retirement. A big loss of income opportunity for a young professional.

#70 GARTH VADAR on 09.08.14 at 9:48 pm

THANK YOU FOR THE INSIGHTS GENTLEMEN. Such a small world & nowhere is perfect anymore BETWEEN THE RED TAPE , WEATHER & ECONOMIC LACK OF FREEDOM’S.

MAYBE MARS would be a good move, if they have running water!

#71 Mac on 09.08.14 at 9:49 pm

Let’s say a million of that house sale wasn’t financed and was brought out of a totalitarian Marxist capitalist country (that shall remain nameless but suddenly I feel like a ham sarnie) through political connections, I’d say the buyer has done well.

#72 Kenchie on 09.08.14 at 9:52 pm

#49 IT’S DIFFERENT HERE! on 09.08.14 at 9:01 pm
“I hope this shows everyone here that blogger Mark, even in an infinite universe, is a waste of space.

Believe your eyes and ears

195% above list
72 offers

Still Believe in the Garthian gospel of ‘The Correction’?”

Guaranteed that property wouldn’t get $1.37m today. The mood is shifting. Millennials are slowly figuring it out that the price isn’t right.

#73 Smoking Man on 09.08.14 at 9:58 pm

Their is nothing wrong with printing money out of thin air to foster growth, like our central banks do..

Let’s say you took a million people and put them on a Island.

OK let’s start a society, you, you and you, dig out the foundation so we can build houses before winter.

They say screw you, you did the Ditch.

That’s the problem. No one wants to work for free…

So we create an object that had a perceived value.. You print a few bills, people can trade, you move forward.

Throw in a bit of interest to compensate for the inflation that occurs and it’s a fair good system.

The problem we got into, we’ve unbalanced the distribution, far to much goes to the investor class, and too much was taken away from the ditch diggers.

Central banks are desperately try to correct that… But far to much is in too few hands.. They lost control.

System is broken…. The ditch diggers dropped the shovels and are sharpening the pitch forks…

#74 devore on 09.08.14 at 10:02 pm

#55 Sheane Wallace

I don’t care for his (Paul Craig Roberts) economics, too doomerish, but his politics are alright. I am more of a Gary North fan, personally. Between him and Garth, I’ve been steered right on my investments macro picture for the last 5 years or so.

#75 gut check on 09.08.14 at 10:03 pm

#48 Detalumis
I applaud you for laying the smack down on that completely unnecessary post about lower incomes and bad teeth. Nice one.

Just wanted to pay it forward a little myself and let you know that I am acquainted with a dentist who gives quite a bit of his time and talents voluntarily – or at least he did – he’s likely retired now.

It impressed me when I heard of his volunteerism because, to me, having to stare into mouths all the time would be bad enough when you were making $$ from it, let alone to do it for free in some of the communities least likely to have healthy gums.

He’s a really good and interesting man whom I respect. :)

#76 ozy -Leave the City or Wait See Prices double on 09.08.14 at 10:06 pm

Why do you think he or she bought it????

Untaxable Capital Gain. Plus can borrow a TON against it and buy more and so on. Smart fellas with heavy cojones.

Basically, Leave City or Wait See Prices double in another decade.

Without MASS EXODUS to the US – the Kanatian Post-Collonial Folks are Trapped for LIFE by the banks in legalized mortgage chains.

LEAVE OR STAY. Well, unless you own a few properties already. Reply with your choice and I’ll tell you where the market is going in 5 years:

1 .Will Leave Canada due to house affordability crisis
2. Will Stay in Canada and watch prices go up
3. Already Own at least one Valuable Property (above average in location, quality of built, current condition, intangibles, etc)

#77 Ray Skunk on 09.08.14 at 10:21 pm

Hmm. I wonder if the MSM will print these latest revelations with the same gusto that they did with the bidding war…

#78 Andrew Woburn on 09.08.14 at 10:28 pm

The financial media have been full of stories about tax “inversions” like the takeover of Tim’s by Burger King. Reportedly droves of US corporations are planning to flee from the highest corporate tax rate in the developed world.

This leaves me with a bad case of cognitive dissonance which is psychology-speak for “WTF”. I mean everybody
knows the US government is owned by a cabal of evil billionaires so why can’t they just grease a few lobbyists and fix the tax rates?

It must be some kind of plot. They’re making it look like nobody is in charge. Oh, of course! That’s why they chose Obama!

#79 Ayn Rand Army on 09.08.14 at 10:32 pm

Garth, i have a suggestion for your website that i keep forgetting to mention so will do it now before i read today’s post.

I wish there was a link at the foot of your blog posts that takes us back to your home page. So when finished reading the comments from yesterday, we can just click a link to go home and see new day’s post…..

I know, i know, it seems trivial, but it happens to me all the time and it would be a nice convenience to save me scrolling through my bookmarks or all the way back up to top of page.

#80 Dr. D. E. Leted C.F.O.S. (but I admit it) on 09.08.14 at 10:45 pm

“As I pointed out probably hundreds of times on RFD before a bunch of trolls got me banned”

Maybe you should consider what a rediculously repetitive ass you are?

I remember this being mentioned here before. However the way it was told then it was you being banned for being the troll. I have never been to that other site so I can’t be sure what happened there. Still it would not hurt my feelings if Flawed would just hurry up and go to South America and take you, Smoking Dipstick and a bunch that begin with S. Preferably to somewhere with no internet connection because once all of you are gone I’d prefer you didn’t write. Even stay here and don’t write.

Here’s a poll proposal, Who else agrees?

#81 Spectacle on 09.08.14 at 10:46 pm

#62 Kenchie on 09.08.14 at 9:41 pm
#52 Smoking Man on 09.08.14 at 9:15 pm
“#47 Kenchie on 09.08.14 at 8:51 pmPaul Craig Roberts is very partisan….

I’m simply pointing out that he is incentivized in courting a specific type of reader with a specify pre-ordained bias.

PS: If Garth asked for donations, I would say the same thing about him!
******************************

Garth’s asking for donations?? Single Malt or Cash?

Regards all… : )

#82 Inglorious Investor on 09.08.14 at 11:01 pm

#195 Mark on 09.08.14 at 6:42 pm

“Real estate doesn’t behave like a ‘real’ asset until all of the leverage has been removed. As leverage in a hyperinflation goes to zero (ie: nobody lends). […] Real estate generally only regains its pricing during the deflation that inevitably follows a hyperinflation, after having lost most of its value during the hyperinflation.”

Yeah, that may be. Certainly during a major disruption such as a bonafide currency collapse things will go haywire for a while. But my point was that unless there is a total collapse and the area is basically abandoned, once the dust settles, and the government issues a new currency, and the economy heals, real estate will recover. It will simply be repriced in the new currency, along with every other good and service; but that new price is just a nominal figure.

The pre-hyperinflation price of a property did not necessarily reflect its real value. Does RE in places like Toronto and Vancouver reflect the real value of property today? However, while real estate will recover, the value of the old currency will be destroyed for good, so any savings will simply be wiped out––forever.

Therefore, if one has property and they can manage through a hyperinflation without losing that property, they will still have a real, valuable asset on the other side. Of course the best asset to own during a hyperinflation is one that is no one’s obligation––gold bullion. And I’m not talking about a war or complete societal collapse into a Mad Max scenario. I’m talking about a currency collapse that really only affects the monetary plane, but where the real wealth of a society (resources, roads, bridges, factories, homes and other property) is not destroyed.

#83 AfterTheHouseSold on 09.08.14 at 11:03 pm

#55 Sheane Wallace
GMO foods

We are currently in the beautiful rolling hills of Pennsylvania awaiting the Mother Earth News (magazine) information fair. I highly recommend this magazine as a source of info on sustainable living.

#84 Dumbo on 09.08.14 at 11:06 pm

If I found a cure for stupid I’d be a rich man, out here in Vancouver the bargains are appearing, thing’s like contractors vans and ,trucks. Harleys boats etc

#85 OffshoreObserver on 09.08.14 at 11:09 pm

I posted a chart up the effect of rising interest rates on the present value of a fixed stream of payments on periods of 10 and 20 years.

[I believe the world is in a liquidity trap with government invoked low interest rates. Everything is going to be affected with the inevitable rising of interest rates.]

Anything, what I posted did not display very well, so here is a link to the spreadsheet. (You can play with the models yourself.)

https://docs.google.com/spreadsheets/d/1AZnLKk1aQjxTFHkriHULt_Bs_ihm2-frggUXb2uw6dM/edit?usp=sharing

Cheers from China Beach, Vietnam

#86 Mark on 09.08.14 at 11:21 pm

Maybe you should consider what a rediculously repetitive ass you are?

Hardly. The truth beared repeating, and as history now shows, I was one of the few people who actually brought truth to what effectively was a forum dominated by RE bulls, RE pumpers, Realtors, and a laptop repairman turned mortgage broker who was willing to stoop to the level of editing Wikipedia in an attempt to push his point.

#87 Mark on 09.08.14 at 11:23 pm

“The pre-hyperinflation price of a property did not necessarily reflect its real value. Does RE in places like Toronto and Vancouver reflect the real value of property today? However, while real estate will recover, the value of the old currency will be destroyed for good, so any savings will simply be wiped out––forever. “

You can say the same about pretty much any asset class other than cash and bonds. It still is no excuse to have a 100% RE portfolio instead of being, as Garth repeatedly suggests, somewhat more balanced. You are correct though, the people who owned gold were the huge winners in Weimar Germany, and could basically, with gold (or other hard currency), purchase almost anything they wanted, including RE, very inexpensively.

#88 Inglorious Investor on 09.08.14 at 11:30 pm

#72 Smoking Man on 09.08.14 at 9:58 pm

“Their is nothing wrong with printing money out of thin air to foster growth, like our central banks do.. […] So we create an object that had a perceived value.. You print a few bills, people can trade, you move forward.”

Absent government fiat, the market will simply create its own money for trade. That said, a common currency is a good thing. The government, who has the power to push you around, decrees that everyone must use its currency for taxes. This creates a built in demand for the government’s currency and so everyone uses it. But the value of said currency comes from the productivity of the people, not the other way around.
———————–

“Throw in a bit of interest to compensate for the inflation that occurs and it’s a fair good system.”

Fair enough. In a well-designed monetary system, organic inflation that results from faster rising demand can be offset by growth in productivity. So under a sound money system, the only real reasons to charge interest or fees are risk of default, transactional costs, and opportunity costs.
——————–

“The problem we got into, we’ve unbalanced the distribution, far to much goes to the investor class, and too much was taken away from the ditch diggers.”

Sure, but we need to understand why this is happening. Human nature is such that when there is more than enough to go around, those lower down on ladder can get a greater share of the pie. But when the relative size of the pie shrinks, those in positions of power and wealth begin to aggregate more for themselves at the expense of the everyone else.

Is it just a coincidence that the average ‘serf’ was able to enjoy a highest standard of living during the age of petroleum, when suddenly energy became essentially free and easy to distribute? Petroleum allowed humanity to increase productivity on a scale ancient man could probably not even fathom. But when energy becomes expensive, humans become less productive and wealth cannot grow as fast. For the system to shrink, energy supply does not even have to shrink, just grow at a slower rate.
——————–

“Central banks are desperately try to correct that… But far to much is in too few hands.. They lost control.”

Don’t think so. Central banks works for governments and their big bank shareholders. Our monetary system is an evil partnership between the banks and the government. They colluded to establish a monopoly monetary system based on currency inflation from which they both benefit enormously. For governments inflation is a covert tax. It extracts real wealth from the people via currency devaluation, while at the same time it also reaps higher nominal returns (as incomes rise, tax receipts increase as well). For banks, inflation is the very source of their profits (interest payments).
———————-

“System is broken…. The ditch diggers dropped the shovels and are sharpening the pitch forks…”

Yes. Or perhaps it’s more accurate to say the system has run out of energy. All systems in nature entropy. Monetary and economic systems are no different.

#89 Inglorious Investor on 09.08.14 at 11:36 pm

86 Mark on 09.08.14 at 11:23 pm

“It still is no excuse to have a 100% RE portfolio instead of being, as Garth repeatedly suggests, somewhat more balanced.”

Oh hell, I wasn’t suggesting putting all your eggs in one asset. One should only do that if one could actually travel to the future, see what will happen, and then return and act accordingly by investing in the right asset. But even then, if the “many worlds” theory of time travel is true, then our time-traveling investor couldn’t even be sure that the future he visited will be one he ends up in. Isn’t this fun?

#90 Jon on 09.08.14 at 11:39 pm

Go onto craiglist and search rentals in toronto for 5k this guy will not get that rent period, what he is asking is not even close to what 5k a month will get you in toronto!

#91 epic post on 09.09.14 at 12:01 am

i still can’t believe someone would do this to themselves voluntarily? Thanks for posting this! if someone told me this i would say no WAY! impossible! grade 6 math would have shown the folly of this investment. it’s no wonder people still buy mutual funds in canada!

#92 Fed-up on 09.09.14 at 12:10 am

“The agent had purposefully mispriced the home to engineer a massive bidding war among as many rabid buyers as possible. ”

—————————————————————————–

Yes and at $700k, it was a veritable bargoon!!! :p

Take a look at what $700k asking will buy you in one of the better hoods in Dallas, Texas.

http://www.tommypennington.com/listing/12191161-15901-ranchita-drive-dallas-tx-75248-3832/

I know, I know ,before many Canuckleheads bite my head off, you cannot compare Dallas Fort Worth to Moronto, right? It only has population just shy of 7 million, a climatic paradise by comparison with more and better paying jobs, a technology powerhouse, the third-largest concentration of Fortune 500 companies in the USA, winning sports teams, world class infrastructure and public transportation and is the largest city in a state who’s population and economy is almost as big as all of Canada’s. Why would I be soooo dumb to compare the 2 cities? I’d much rather pay twice the price and have that crap shack on some pot-holed street in North Toronto and freeze my sorry ass off 6 months per year.

Silly, stupid me.

#93 Drn on 09.09.14 at 12:31 am

Thanks FF40. So the original ask of $700k is actually closer to the true value. Huh, it’s unbelievable what the hype does to the hornies. It’ll take him a lifetime to make up for this.

#94 Milennial_Falcon on 09.09.14 at 12:32 am

#71 Kenchie

Agreed. 31 year old “millennial” here.

There are two camps I find in my generation now.

60-70% are new homeowners, or wannabe homeowners. Often, new owners have previously sold a condo, and now moved into a house after some price appreciation over the past 5-7 years. The desire for condos is eroding rapidly, but the idea of an “investment condo” that can be rented out “so someone can pay your mortgage” still persists and is floated by ALL these guys. Mortgage amounts do not seem to scare anyone. When all we hear about is crap selling for 1 mil plus, why would a 400, 000 mortgage scare anyone?

Most in this group live with in a complete daze. They believe in “buy now or forever be shut out”, “Toronto is unique due to immigration and jobs”, “Interest rates are never going up”. blah blah blah.

Every group of friends has a few of us working in real estate in some capacity. I can’t tell if these guys see the writing on the wall yet, but I can tell you that they are all self proclaimed experts and wannabe mini Donald Trumps.

The remaining 30-40% are people who are either shut out of the market due to low income/savings/job prospects, or, like myself, believe that the GTA market is a complete joke and wouldn’t touch it with a ten foot pole.

This segment is growing in proportion slowly and it is still outnumbered.

Financial illiteracy amongst all of us is so rampant it is laughable.

I will say that most of my generation seems to view real estate as a rite of passage AND a solid investment. No concept of the recency effect at all and no one has ever known financial ruin so why would they?

Myself? I do not understand the financial system very well because I am a science and politics guy. To me it seems the financial system’s too complicated inner workings are guarded in secrecy almost. I am learning slowly though…thanks to this blog and the great comments. Keep em coming.

MF

#95 Suede on 09.09.14 at 1:06 am

Negative Interest Rates In Germany?

boom!

You want some 2yr bunds, you gotta pay the chancellor. Talk about forcing money into the DAX…

http://www.bloomberg.com/quote/GDBR2:IND

#96 Cha Ching on 09.09.14 at 1:19 am

Mark is upset that the RE bulls are winning. Easily.

Oh, and trolls can’t get a poster banned on RFD, only the poster can do that. And Mark was making up fake data without citing any sources (just like he does here) so he got banned. Simple.

#97 devore on 09.09.14 at 1:47 am

CMHC could force banks to pay deductibles on mortgage insurance

The Canada Mortgage and Housing Corp. is looking at a new formula to push some of its losses on to financial institutions, essentially forcing them to pay a deductible on mortgages insured with the Crown corporation before claims are paid, according to sources.

The Financial Post has learned the Office of the Superintendent of Financial Institutions is involved in discussions with CMHC…

Wait what???

#98 Christopher Lackey on 09.09.14 at 2:48 am

@ #49 it’s different here. What’s clear is that people with money – real money – to close deals like this or real top-end incomes to service the debt are far outnumbered by the average canadian who is heavily indebted, has pitiable knowledge of finance and has fallen hard for the mainstream media/realtor industry 1-2 sucker punch of “buy now or be priced out forever”. Such a person does not generally have 250k cash down or 7k a month net income to do a deal like this. The people who have driven up the price of detached homes in YYZ and YVR are a tiny segment of the population. Most – by force or by choice – are still on the sidelines.

#99 Dr. D. E. Leted C.F.O.S. (But not as full of it as Mark or of myself as he) on 09.09.14 at 3:18 am

#89 Jon on 09.08.14 at 11:39 pm

Please exercise caution with statements like that. Have you any idea the frenzied craiglist search you sent Smoking Yahoo into? He, for several hours thought he’d found somthing far superior to backpage.

#85 Mark on 09.08.14 at 11:21 pm

You are even more narcissistic than I thought. By the way it would be bared not beared genius. I have a very strong suspicion that your true expertise is cut and paste.

I do like bears though, brown, black, pandas, really all of them. Wolves too. My favourite is dogs though. I’ve always had an incredible bond with them since I was a kid but none of them needed to inflate themselves. Maybe that’s what makes them such appealing friends, completely unassuming, not demanding, loyal pals. Nothing like a dog and his boy.

This is how loyal a dog is.

http://www.youtube.com/watch?v=cVg2QEYtdIM

Can you help me out with this though Mark, Please I’m not as succesful as yourself obviously.

http://www.youtube.com/watch?v=C-V8EzyNtk0

Or more to my liking and especially for you. Only one line really applies. Can you pick out which one?

http://www.youtube.com/watch?v=17eSUnQ-_ek

although the messenger is a parisite for what he’s done the message is good.

#100 drydock on 09.09.14 at 5:12 am

Ever wonder what a trillion dollars is?
Watch this video.
It’s mind blowing.

https://www.youtube.com/watch?v=n4-4bvuX7qA

#101 T.O. Bubble Boy on 09.09.14 at 5:54 am

Forget this $1.3M place… $3M is the new $1M!
(in Vancouver)

http://www.theglobeandmail.com/report-on-business/economy/in-vancouver-home-sales-3-million-is-the-new-1-million/article20483704/

Interesting HAM note from the realtor in the article:
Macdonald Realty notes that 178 of the firm’s 531 sales of detached houses within the City of Vancouver last year, or 33.5 per cent, went to home buyers with ties to China.

Notice how it says “ties to China” vs. “in China”… Vancouver’s overall population have more than 33.5% ties to China!

According to this article, 43% of Vancouver has “Asian Heritage”:
http://blogs.vancouversun.com/2014/03/28/vancouver-is-most-asian-city-outside-asia-what-are-the-ramifications/

Yes, “Asian” includes far more than just Chinese heritage, but you get my point… the realtor is trying to point out how much business he is doing with Chinese clients, but it is actually UNDER the expected percentage!

#102 };-) aka Devil's Advocate on 09.09.14 at 5:59 am

After this many years I think it’s safe to say; the current economic state of affairs is the new normal. We may think it’s broken but they who own it think otherwise. Remember the golden rule.

#103 Sir Rentalot on 09.09.14 at 6:09 am

GARTH VADER:

Don’t believe the hype about NS. Yes you can buy something decent for $175K, but not if you want to live anywhere where you and the missus can actually make a living / shop for groceries / have friends under the age of 60. And yes, it’s a beautiful, laid back place to live, but the rural areas are dying a not-so-slow death.

You could work in the HRM and commute from an hour away to get that $175K home if driving is your thing. We did that for two years. Rented an old home on the ocean about 30KM from downtown Halifax. Rents are cheap (3br house for $850/month) but sale prices are high (nothing priced below $300K in same area). We loved the ocean, but the driving was killing us.

Great thing about NS, though, is that you can shop around for R/E with eyes wide open through this site:

http://www.viewpoint.ca

You have full access to all data that R/E agents usually hide from you. Makes for excellent vulchporn.

#104 T.O. Bubble Boy on 09.09.14 at 6:33 am

I got the Bitcoin vs. Paypal stats completely wrong the other day… from an article on CNBC today:
Bitcoin currently has a daily transaction volume of $44 million, according to coinometrics.com, a digital currency research firm. This compares to $397 million for PayPal and $16.5 billion for Visa.
http://www.cnbc.com/id/101982927

Note that the article is actually about Paypal supporting Bitcoin, so some transactions will effectively count as being processed by both Paypal and Bitcoin.

#105 BillyBob on 09.09.14 at 6:44 am

uh…it may be a bit late to warn Garth about “the hype about NS”. But I think he’ll survive…;-)

#106 crossbordershopper on 09.09.14 at 7:21 am

you dont buy real estate in nova scotia. you go there to get a wife. everytime business brings me there, i start talking and i stop them when i ask why are you here.
ya people move for only 3 reasons, 1 is that its lousy where they are from, like war and crime etc, 2, a better paying job or stability, 3, a women.
nothing has changed in 1000 years. in 1000 more years add a 4th, literally cant live there anymore due to poor weather.
and people talk about real estate, interest rates etc, those are side shows to why people live where they live and do what they do.
the chinese and the internet changed a lot of things, i now know everything about everything at my fingertips and the chinese made me think that having 30 pairs of shoes makes me rich, where my dad had 2 and thought he was rich.

#107 Italians love real estate on 09.09.14 at 7:22 am

As an Italian Canadian who adores real estate, even I have to agree that this is a bad deal for the landlord.

Price of the house will go up in coming years however.

#108 Sir Rentalot on 09.09.14 at 7:33 am

BillyBob:

Agreed, but the post was for #22 GARTH VADAR, not Turner.

#109 SUave on 09.09.14 at 7:35 am

Victor V
PRICE DROP #4 – 226 Riverside Drive – SWANSEA

LOL property in that area does not sell in summer!

Usually sells in winter when buyer cannot smell
woof from Water ( shi**) treatment plant!
windows are closed. LOL

South Kingsway Swansey Stephen Road…
…wait for cold weather…

Demented buyers come see nice trees,like it, cough out money…

Spring comes, they open windows and at night and
they learn lesson…
In spring here we go again for sale sign!

LOL, LMFAO!!!

as long as there are idiots ,
smart people will have money…

#110 bigrider on 09.09.14 at 7:43 am

#91 Fed-Up.

Well said and I couldn’t agree with you more.

Why then are these international publications ,that have been mentioned by other posters on this blog, continue to rate Toronto as 4th best city in the world, or top 10 , or best business center etc. etc. ?

It is not a rhetorical question. I seriously don’t understand what these sources are seeing that I/we are not.

#111 CP on 09.09.14 at 7:57 am

Thoughts Garth?

http://business.financialpost.com/2014/09/08/cmhc-could-force-banks-to-pay-deductibles-on-mortgage-insurance/

#112 Londoner on 09.09.14 at 8:23 am

BoE knee-jerk reaction to cable falling off a cliff…

http://uk.reuters.com/article/2014/09/09/uk-britain-boe-carney-idUKKBN0H40ZV20140909

#113 Porsche on 09.09.14 at 8:26 am

#91 Fed-up

Worked in Dallas for two years, it was a dream. Then I woke up and it was all over.

Back in Canada, unemployed for 14 months and finally getting a tech job that paid less than half of what I was making in Dallas.

#114 Sheane Wallace on 09.09.14 at 8:28 am

#110 CP
…….
The idea is being floated around right now,” said a senior industry source, who asked not to be identified. “What they are trying to do is make sure lenders have some skin in the game.”

So the banks offiically have no skin in the game now.
Fantastic!

#115 TSL on 09.09.14 at 9:01 am

S&H drove a Gran Torino, not a Dart and not a Grand Torino.

#116 Ray Skunk on 09.09.14 at 9:14 am

#91 and #109

I’m on the same page.

Toronto is not a world class city, in my view. A city having the largest population in their respective country does not automatically give them a right to be world class.

I suspect these awards are generally skewed by the metrics – Toronto still is the financial centre of Canada and the average income and wealth levels reflect that infuence. Services (education, health, welfare) are Canadian standard, so good to go. Being a large city, there are lots of restaurants, arts and events – the Toronto Life set love it.

Let’s look at the other side of the coin… city leadership is non-existent. The chief magistrate is a clown. City Council couldn’t agree to install a public lavatory if their lives depended upon it. There is zero cohesive transit strategy. Two and a half subway lines to serve an urban population of nearly three million is a joke. Roads are permanently under construction – to traverse the city in less than an hour is a minor miracle. Airport landing fees are the highest in the world; air travel is about to get worse once fuel tax in Ontario goes up a whopping 164%.

Toronto was once the engine of an economic powerhouse – Ontario. Look at the bigger picture… Ontario is collapsing. An economy which was once driven by industry and actually producing goods has eroded to one where the only employer on the rise is the provincial government (adding $20bn in debt a year when interest rates are historically low) and the only boom is in slapping up cheap condos and selling them to one another for ever increasing prices.

I don’t see any recovery for the provincial mothership on the cards, and with the city literally choking itself under the strain of constant speculative RE development with no investment in supporting infrastructure – I can’t see things getting much better.

Toronto resident, btw.

#117 Holy Crap Wheres The Tylenol on 09.09.14 at 9:16 am

#21 Smoking Man on 09.08.14 at 7:01 pm
Tomorrow MSM will give us a report on MH17
Can’t wait for this….. I’ll tell you what they will say.
MH17 suffered an explosive decompression. We suspect it was a missile, we don’t know who fired it.
There will be no communication of the ATC and pilots.
If there is, it will start after the pilots where ordered to change course, and desend.
The Dutch, if they want to maintain any credibility to there precious war crimes court better do the right thing.
Cause if they don’t, if they lie, remember Russia has bombers practising first strike nuke attacks..
Or side has completely lost there moral compass, allowing the murdering of innocent passengers and allowing the cover up…
____________________________________________
Smoking Man, I don’t believe you nailed your premonition of MSN quite on the head, nevertheless they in point of fact concur with your original conjecture. Malaysia Airlines Flight 17 was likely struck by multiple “high-energy objects from outside the aircraft,”

http://news.msn.com/world/report-flight-17-likely-downed-by-outside-impacts

#118 crowdedelevatorfartz on 09.09.14 at 9:17 am

@#112 Porsche
Where’s Dallas?
Maybe try job hunting in Halifax :)

#119 Ret on 09.09.14 at 9:25 am

The economy with respect to jobs in southern Ontario is on government life support. All three levels of government keep pumping in stimulus and racking up more debt but we keep losing jobs.

There is an illusion of wealth and growth in the economy that is almost surreal. No level of government addresses the debt that has underpinned the good times or even seems the least bit worried about the future.

Building thousands of new homes and questionable infrastructure projects are now the main economy in this area.

Pouring tax dollars into hospitals, stadiums, and universities didn’t save Detroit and it won’t save Hamilton either.

I do wonder though, about how significant deflation could be in the future. Thousands in Hamilton are on CPP, OAS, GIS, welfare or disability payments which no government would ever cut.

Fire, police, paramedics and city workers are also untouchable along with all federal and provincial workers.

Cuts to health care, Junior Kindergarten or any other program? Not a chance. (I can get a free government supplied scooter like everyone else in the downtown core!)

I do believe in the Tooth Fairy and Santa Claus, but a soft landing in Ontario? Hope for the best, but plan for the worst.

#120 Holy Crap Wheres The Tylenol on 09.09.14 at 9:29 am

Of course, if he financed a million or so, then the ‘investor’ is cash-flow negative by about $1,000 a month. And if he paid cash, bad choice. His $1.4 million invested in a nice middle-of-the-road balanced portfolio could earn about $105,000 a year – taxed at half the rate payable on rent – instead of sitting in a geriatric pile paying (at best) the same as a GIC at the Croatian Curlers’ Benevolent Credit Union.

_____________________________________________

Key words here is “could earn” not “will earn.” It’s always a crap shoot!

No returns are guaranteed. Then again, the tenant could torch the place. — Garth

#121 bdy sktrn on 09.09.14 at 10:25 am

the chance of this place appreciating to 2.4 million seems small right now.

reminds me of a house with the same price/rent ratio i rented in kits point in 91.

when it sold for a mindbowing 450k , we wondered who would take such a huge loss (rent paid 50% of mtge at prevailing rates) and why anyone with so much money would do something so foolish.

today the house would sell for 2.2-2.4m

some paitent offshore investor(china) did very well to ‘overpay’ so drastically

#122 Mike on 09.09.14 at 10:29 am

For $1.4mill you can buy 2 really nice homes in Fort McMurray, and easily rent them each out for $4000-5000 per month. Well done buyer. lol.

#123 };-) aka Devil's Advocate on 09.09.14 at 10:50 am

#112 Porsche on 09.09.14 at 8:26 am
#91 Fed-up

Worked in Dallas for two years, it was a dream. Then I woke up and it was all over.

Back in Canada, unemployed for 14 months and finally getting a tech job that paid less than half of what I was making in Dallas.

With all due respect, why then don’t you go back to Dallas? If the job contract ended then can’t you find another? What’s up?

#124 45north on 09.09.14 at 11:01 am

The agent (a new one) says the owner’s “an investor” who spent some cash on refinishing floors and paint, and now wants to find a tenant who will pay $3,900 a month (plus utilities).

$3900 plus utilities! what!

Jon : Go onto craiglist and search rentals in toronto for 5k this guy will not get that rent period

epic post : (well it’s not that epic, your post I mean) : I still can’t believe someone would do this to himself

I think he is just now realizing that he’s hooped.

where did Vanecdotal and Garth Vader go?

Mark : don’t let the bastards get you down

crossbordershopper : I cant live there anymore due to poor weather

anymore? but you did. We made a couple of trips to Wolfville. The last one was towards the end of October. It was the kind of cold that just penetrates you.

CP : from your link: CMHC is looking at a new formula to push some of its losses on to financial institutions, essentially forcing them to pay a deductible on mortgages insured with the Crown corporation before claims are paid

bout time!

Ray Skunk : Toronto was once the engine of an economic powerhouse – Ontario. Look at the bigger picture… Ontario is collapsing.

I’m an Ontario boy. Born and bred. Wynne is racking up the debt. Here’s a link thanks to OttawaGuyRenting : http://www.ofina.on.ca/borrowing_debt/issuedbonds.htm

what’s with borrowing US and Australian dollars, Euros? what’s going on?

Ret : I do believe in the Tooth Fairy and Santa Claus, but a soft landing in Ontario? Hope for the best, but plan for the worst.

I’ve planned my escape to Québed

#125 45north on 09.09.14 at 11:01 am

Québec

#126 TnT on 09.09.14 at 11:05 am

With respect to the bloggers here and their concern for building too many residential homes.

I think Toronto and the GTA is experiencing something that is not being discussed in the MSM. None of these residences are sitting empty. All of these suburban homes are 100 % occupied regardless of the neighborhood. New schools are popping up everywhere in York, Durham and Peel regions and class rooms are filled to capacity with new Canadians. Canadian’s are inherently uncomfortable talking about immigration which may be the reason a lot of people don’t understand this transformation.

Picture Highway 7 along Yonge and Leslie area 5 years ago and have a look at it now. Chinatown use to only exist at Spadina and Dundas, then Chinatown east at Gerrard and Queen, then Agincourt in Scarborough and now all along Highway 7. Warehouses and office space all filled to capacity with import / exports. Whole shopping malls and grocery stores dedicated to the new customers not only in York Region but also in Brampton and just about every other region in GTA. None of this existed 10 years ago and it is growing exponentially.

This is what will keep Real Estate the economy from going backwards. With Canada’s birth rate not sustaining its own population and the reverse pyramid effect on retiring boomers this immigration policy if needed.

A massive transformation is happening before your eyes and I can tell a lot of people cannot see the trees from the forest.

#127 Smoking Man on 09.09.14 at 11:14 am

#116 Holy Crap Wheres The Tylenol on 09.09.14 at 9:16 am

I just read the report, it’s a PDF 32 pagez

No ATC tapes, just last 20 min of cockpit voice record.
First transmission from MH17
confirms it’s new altitude at 13:08

Pics clearly show round 30 mm holes in photos.

The entire report no mention or speculation of what the holes where, no missile or Shrapnel…

They have a weather pic time stamped an entire hour before the flight entered the area showing some weather. Which was moving North rapidly.. So by the time it hit the area, weather was clear..

Leaving a way out.. But let’s face it, Russian ATC should have recordings of the entire conversation between Ukraine controllers, and plane.

Just waiting for them to release first….

In a nut shell, thus story is over, final report my call will be July Friday after noon of long weekend.. That is of course between now and then there is even a thing call TV. Or the Internet.

#128 Londoner on 09.09.14 at 11:16 am

#115 Ray Skunk

“Toronto is not a world class city”
_______________________________________

I remember you making this statement before but you never really answered my question. What do you think other “world class” cities offer to average families that Toronto doesn’t? Public transport and lavatories? Most families in Toronto can drive in the city and park their cars at home. Try that in London.

Jobs, wages, health care, schools, availability of products and services, stable economy & government and a good standard of living… Toronto looks pretty decent to me.

Former Toronto resident, btw.

#129 rosie "moving forward" in the knowledge that, "this won't end well" on 09.09.14 at 11:16 am

Got a job? Keep it. Need a job? Good luck.

http://www.theglobeandmail.com/report-on-business/economy/canadas-fourth-quarter-hiring-outlook-hits-four-year-low-point-survey-finds/article20483551/

#130 JSS on 09.09.14 at 11:21 am

Garth – can you please do a write-up in the future regarding finances and depression. I see it as a growing issue, both on this site as well as out on the streets. Especially middle class families. thx.

#131 45north on 09.09.14 at 11:35 am

Holy Crap Wheres the Tylenol :

No returns are guaranteed. Then again, the tenant could torch the place. — Garth

more likely the landlord

#132 Son of Ponzi on 09.09.14 at 11:40 am

No returns are guaranteed. Then again, the tenant could torch the place. — Garth
—————–
Torches and pitchforks are the new buzzwords.
Is the revolution on yet?

#133 Holy Crap Wheres The Tylenol on 09.09.14 at 11:40 am

#119 Holy Crap Wheres The Tylenol on 09.09.14 at 9:29 am
Of course, if he financed a million or so, then the ‘investor’ is cash-flow negative by about $1,000 a month. And if he paid cash, bad choice. His $1.4 million invested in a nice middle-of-the-road balanced portfolio could earn about $105,000 a year – taxed at half the rate payable on rent – instead of sitting in a geriatric pile paying (at best) the same as a GIC at the Croatian Curlers’ Benevolent Credit Union.
_____________________________________________

Key words here is “could earn” not “will earn.” It’s always a crap shoot!

No returns are guaranteed. Then again, the tenant could torch the place. — Garth
___________________________________________

$hit happens, now there’s a Hot idea! Two guarantees in life, Death & Taxes. The death part doesn’t sound so bad compared to dealing with RevCan.

#134 Son of Ponzi on 09.09.14 at 11:43 am

#120
some paitent offshore investor(china) did very well to ‘overpay’ so drastically
————–
Patience is the keyword here.
Confucius taught them well.
But then the fear takes over.

#135 Holy Crap Wheres The Tylenol on 09.09.14 at 11:50 am

#115 Ray Skunk on 09.09.14 at 9:14 am
#91 and #109
I’m on the same page.
Toronto is not a world class city, in my view. A city having the largest population in their respective country does not automatically give them a right to be world class.
______________________________________________
I concur as a once former citizen of the big Smoke, London, New York, Paris, Rome, Hong Kong all world class with much better infrastructure and amenities. Moved my company out of Toronto 30 years ago to the boonies of Halton (Oakville) at first my staff were mortified. Then slowly came to appreciate the fact that they could at least move around and get to work in a reasonable time frame. Now even here the gridlock is insane. They did give me incentives to move here as well, Toronto on the other hand has a crappy attitude when it comes to attracting businesses to locate. Nor incentive and socialist policy’s that crush competitiveness. Oh you forgot you have Smoking Man in Toronto he can run the whole dam city for you better that Ford, Chow and Tory combined!

#136 Holy Crap Wheres The Tylenol on 09.09.14 at 11:55 am

No returns are guaranteed. Then again, the tenant could torch the place. — Garth

Claudius Caesar Augustus Germanicus was good at this back in 64 AD!
I think he would have enjyed the playing of this as Rome goes up in flames.
http://www.youtube.com/watch?v=5jzMw9ezE3I

#137 TnT on 09.09.14 at 12:04 pm

#134 Holy Crap Wheres The Tylenol
#115 Ray Skunk
#91 and #109
I’m on the same page.
Toronto is not a world class city, in my view. A city having the largest population in their respective country does not automatically give them a right to be world class.

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

World comparisons are hard as not every Canadian has a choice to live in any world class city.

If you are living in Canada and you want to live in an urban environment with the most amount of “city” available then Toronto is your #1 choice. This is why it is big, expensive, growing and transforming for the better.

Slaggerz will be slaggerz regardless of the facts….

#138 Fed-up on 09.09.14 at 12:18 pm

#115 Ray Skunk on 09.09.14 at 9:14 am and #109

————————————————————————–

Toronto world class? Laughable at best. It has world class traffic, world class debt, world class idiots running it and world class pot holes. That’s about it. It’s GDP is more or less on par with not so world class destinations such as Seattle, Phoenix, Minneapolis-St. Paul, Miami, Melbourne and Atlanta. And although it nudges past the GDP of Detroit Michigan, it is thumped by Boston, Washington, Los Angeles, Houston, Philadelphia, Chicago and Dallas Fort Worth to name a few. Oh and NY City’s GDP is about 75% of all of Canada’s GDP.

But hey, Toronto’s a great place to be a cop, firefighter, teacher or any other public sector “worker”. By richly rewarding these fields and constantly fueling the FIRE economy, this country’s economic and innovative future looks oh so bright.

#139 happity on 09.09.14 at 12:29 pm

Caveat emptor, sometimes it just sounds like haters on those making money.

Meanwhile, central banks own roughly 50% of the stock market with a monopoly on the money supply, unlimited printing capability to cover margin losses, etc. And hence no way to enforce price convergence and discovery …

But hey, greater fools are found everyday.

#140 Ray Skunk on 09.09.14 at 12:55 pm

#127 Londoner:

Yes I remember. Hello.

Do you really think public transport is that unimportant?

How long have you been living out of Toronto? I’ve been here for coming up to seven years. In that time the population has grown by tens, if not hundreds of thousands. The difference between when I first arrived and today is huge – sometimes I can’t even comprehend how much it’s changed in such a short period of time. Back then there were two distinct rush hours – now all cross-city routes are gridlocked all day, most days. It’s reached a crisis point. No word of a lie – if I need to travel from Leslieville to High Park it’s going to take me anywhere from 40-90 minutes. Gardiner is a mess, Lakeshore is a knock-on effect, streetcar is jammed up and/or diverted.

Thousands upon thousands of condo units have been slapped into Liberty Village/Queen West/King West in the last decade alone .How many extra streetcars have been put into service along the 501 and 504 routes? None whatsoever. How’s the traffic along Queen West in particular these days? Absolutely woeful beyond belief.

Families can and have to drive in Toronto because there’s no other choice. Rapid transit exists on the subway lines, all two-and-a-half of them. If you don’t live near one, then you have to rely on the bus or an overcrowded streetcar which inevitably gets tangled up in the gridlock, not to mention a real treat in the winter. It’s a vicious cycle – you drive because surface transit is crappy, you add to the cars on the road, further making surface transit crappier. This is just in the old city of Toronto… if you’re in one of the amalgamated ‘burbs trying to get to another suburb then transit is nowhere near a realistic option.

In London families don’t need to drive. Transit is extensive. Underground covers more area. Surface routes don’t suffer the same weather-related challenges Toronto does. There are more dedicated bus lanes. In London you can be at your main airport in minutes using the underground or Heathrow Express. Here we’re only just putting in our own airport express train, decades later.

The point of the lavatory comment was missed; it was a facetious play on City Hall’s bickering for days over a fast food vendor contract rather than referring to public conveniences enhancing the city’s standing. This is where we stand. Nothing meaningful gets accomplished because there are too many right-v-left petty squabbles and pissing contests.

Jobs, wages, health care, schools, availability of products and services – there are present in many a large city. Doesn’t necessarily make them world class though, does it? I would argue that availability of jobs and wages in Calgary are generally better than those in Toronto, while taxation and cost of living is lower. Would you call Calgary a world class city?

The economy is far from stable – it may appear on the outside to be, but it fundamentally isn’t. Ontario doesn’t produce anything apart from government jobs. Industry is shutting down and moving on. The city relies more and more upon Real Estate; from the directly-related jobs created, to the net worth increases thereof trickling down to local businesses. Hydro rates are going up. Insurance rates are going up. Wynne is introducing a 1.9% payroll tax for both business and individuals who don’t have a pension. The economy is on very very thin ice. Of course, for those making seven figures on Bay St. all is well and good – they are in the minority.

I’m sorry, but for the majority – those who can’t afford seven figures for a SFH in the core – who have to spend two hours a day in their car, or waiting for the fourth subway/streetcar to come along in the morning in order to actually squeeze on, this does not equate to a good quality of life.

Try coming back for a few weeks. You’ll be shocked at how much this place has changed.

Cheers.

#141 Mark on 09.09.14 at 1:03 pm

“Oh, and trolls can’t get a poster banned on RFD, only the poster can do that. And Mark was making up fake data without citing any sources (just like he does here) so he got banned. Simple.”

I made up no fake data (here or elsewhere), and everything I posted was easy to verify and is now being confirmed by mainstream sources. There is no truth whatsoever to your extremely incorrect comments.

#142 BillyBob on 09.09.14 at 1:07 pm

#91 Fed-up

Worked in Dallas for two years, it was a dream. Then I woke up and it was all over.

Back in Canada, unemployed for 14 months and finally getting a tech job that paid less than half of what I was making in Dallas.

——————————————————————

Mean this sincerely, but why did you go back? Dallas and Texas in general are on fire. Was just in Houston and the place is thriving. As well as Austin and San Antonio and other smaller centres.

??

I get it, there are other reasons like family and wife etc but economically it’s a no-brainer.

#143 Mark on 09.09.14 at 1:10 pm

“I will say that most of my generation seems to view real estate as a rite of passage AND a solid investment. No concept of the recency effect at all and no one has ever known financial ruin so why would they?”

I’m also in that age group, and I don’t know of anyone who views RE in such a positive light. Most of my peers who have bought, effectively have been forced to, either by their spouses, or by their ancestors/in-laws. They know that they’re sitting on a financial time-bomb, but feel fairly powerless in the whole situation. And with the recent RE declines seen throughout Canada over the past year and a half, the mood on Facebook has, at least anecdotally, turned somewhat sour. “Of course I will come to Cozumel for your wedding, why would you ever doubt that!” has been replaced with responses of somewhat lesser enthusiasm. Lots of “camping” RVs seem to be for sale as well (easy to put onto the HELOC when times were good, but with equity and jobs receding…).

#144 Nuke on 09.09.14 at 1:11 pm

http://www.vogue.com/slideshow/1080625/fifteen-coolest-street-style-neighborhoods/

Toronto’s Queen Street West #2 coolest neighbourhood.

#145 Mark on 09.09.14 at 1:16 pm

“CMHC could force banks to pay deductibles on mortgage insurance
..
Wait what???

CMHC can’t do this on the existing base of subprime loans they have insured, the $900B worth including the re-insured stuff. But they can limit new guarantees.

The problem with this is that if the CMHC acts to limit subprime credit availability to the market, housing prices will likely fall further, increasing claims against CMHC’s subprime mortgage insurance.

So it is sort of a “damned if they do, damned if they don’t” sort of proposition.

Of course, if the CMHC went rogue, and tried to retroactively alter CMHC insurance terms on already-written guarantees, this would create a profound crisis of confidence in Canada’s financial system. Banks would stop lending to mortgage borrowers altogether. The market would, sooner or later, crash to all-cash valuations, which are likely 10-20% of current valuations.

#146 Karl Hungus on 09.09.14 at 1:23 pm

Garth, thoughts on the land banking company Walton?

#147 devore on 09.09.14 at 1:24 pm

#125 TnT

I think Toronto and the GTA is experiencing something that is not being discussed in the MSM. /…/ Canadian’s are inherently uncomfortable talking about immigration which may be the reason a lot of people don’t understand this transformation.

Canadians are fine talking about immigration. Maybe you’re projecting?

This is what will keep Real Estate the economy from going backwards. With Canada’s birth rate not sustaining its own population and the reverse pyramid effect on retiring boomers this immigration policy if needed.

Irrelevant. Canada’s population growth is oscillating around 1% for the last 20+ years. It does not matter whether this population gain is due to immigration, or domestic birth rate.

Population growth is population growth. Outside 3rd world countries, 1% is respectable. But you don’t get to blame this on immigrants. Is that why you are so uncomfortable talking about immigration? I know I’m not.

#148 Flawed on 09.09.14 at 1:32 pm

And the global warming in Canada continues. Anyone float their boat through the north west passage this past summer what with the RECORD ice?

BUT BUT it’s what Al Gore promised?

http://www.theweathernetwork.com/alerts/high-alert/canada/alberta/nordegg

#149 Ray Skunk on 09.09.14 at 1:36 pm

#136 TNT

Toronto is big. Toronto is expensive. Toronto is growing.

Now, please explain how it is transforming for the better.

The only transformations I see are those where RE developers are making a mint by throwing up a condo on every corner before running away and avoiding any responsibility for the infrastructure to support the added population.

What else is there? Oh, we have the Pearson Union express coming soon. Yes – and Union subway has a second platform now! There are a few more coffee shops on Queen West. We’re clearly rivaling Dubai when it comes to investment and infrastructure.

Pan Am games? Fifth-rate sporting event which in reality is a slush fund for Liberal big cheeses, unionized construction companies and other connected persons.

What else is there? We can’t even build a pedestrian tunnel to the city airport without half the city being up in arms about it.

#150 Holy Crap Wheres The Tylenol on 09.09.14 at 1:42 pm

World Class huh, not a great place to be poor or homeless.

http://www.thestar.com/news/gta/2014/09/09/ontarios_affordable_housing_wait_list_climbs_to_record_165000_households.html

#151 Cici on 09.09.14 at 1:53 pm

Posted mortgage rates below 3% are back:

https://businessincanada.com/2014/09/09/bank-of-montreal-2-99-5-year-posted-fixed-rate-mortgage-is-back/

#152 Spiltbongwater on 09.09.14 at 1:58 pm

http://bosa4rent.com/bosa-equity/

http://bc.ctvnews.ca/homebuying-too-pricey-developer-introduces-rent-to-own-program-1.1997683

Rent to own your condo. CTV had this newvertisement on today. What do you think of this scheme Garth? Seems like developers are trying to sacrifice virgins 5 years away.

#153 TO Renter on 09.09.14 at 2:01 pm

RE #79 Dr. D. E. Leted C.F.O.S. (but I admit it) on
…once all of you are gone I’d prefer you didn’t write. Even stay here and don’t write. Here’s a poll proposal, Who else agrees?
—-
You mean you just come for the education and not the entertainment? Skip over who bores you – why is that effort more onerous than complaining?

#154 Nemesis on 09.09.14 at 2:09 pm

#QuickWins… #Or,CalcuttaChristy… #Vs.TheManchurian*Candidate… #Coping,WithChutzpah!… #TheWongWomanAtTheRightTime

[TheTyee] – Two Liberal Strategists Charged over ‘Quick Wins’

…”BC Liberal strategists Brian Ashly Bonney and Mark Robertson are facing charges under the Election Act related to their party’s Multicultural Strategic Outreach Plan scandal, also known as “Quick Wins.”…

…On Feb. 27, 2013, the NDP revealed, via leaked documents, how the Liberals plotted to win the election by targeting ethnic groups for votes. The scheme involved government workers, such as Bonney, doing party work on government time, contrary to B.C. Public Service Agency code of conduct. Bonney, who was the BC Liberals’ director of operations from 2004 to 2006, was the government’s director of multiculturalism communications from Nov. 2011 to Feb. 2013.

Premier Christy Clark’s deputy chief of staff Kim Haakstad was first to resign after the strategy became public. Multiculturalism Minister John Yap later quit cabinet. His executive assistant Mike Lee also quit. They were found to have used personal email addresses in a bid to skirt Freedom of Information laws…

…The charges against Bonney and Robertson came, coincidentally, the same day that Clark announced she would travel to India on an Oct. 9-18 trade mission to Delhi, Mumbai and Chandigarh.”

http://www.thetyee.ca/News/2014/09/08/Quick-Wins-Charges/

[SCMP] – Meena Wong, the Vancouver mayoral hope with Hong Kong roots: Meena Wong draws on Hong Kong experience by putting housing affordability centre stage in her bid to become the city’s first Chinese mayor

…”Hong Kong emigrant Meena Wong has launched a bid to become the first Chinese mayor of Vancouver, one of the world’s most Chinese cities outside Asia.

Wong, the daughter of doctors who fled mainland China for Hong Kong during the Cultural Revolution, on Sunday was declared the mayoral nominee of the left-leaning Coalition of Progressive Electors (Cope)…

…Cope has not run a mayoral candidate since Vision’s creation to avoid splitting the city’s left-leaning electorate, a tactic which has helped Robertson crush rivals from the right-leaning Non-Partisan Association (NPA) in the past two elections.

However, Vision’s close relationship with the city’s wealthy property developers has fed discontent among Cope members and leftist activists, with coalition stalwart Tim Louis deriding Vision as “the NPA with bicycle lanes”. Robertson was criticised in March for taking part in a lunch organised by property marketer Bob Rennie, who asked invitees to donate C$25,000 to Vision for the privilege of breaking bread with the mayor…

“I want to create a political environment at City Hall that reflects the diversity of this beautiful city — to create a Vancouver that everyone can afford and can enjoy… We have a duty to all working people who live in Vancouver, and who are working in Vancouver but cannot afford to live in Vancouver.” – Meena Wong

http://www.scmp.com/news/world/article/1587719/meena-wong-launches-bid-become-vancouvers-first-chinese-mayor

[NoteToGT: *I know, that was egregiously naughty… ah… would you believe that the Devil made do that?]

#155 Dual Citizen In Canada on 09.09.14 at 2:21 pm

Can it happen here, Canada’s Ghost cities? More foreign investors with the, “if we build it, they will come”, attitude. With all the condos being built downtown, and staying empty, how long before the bums move in permanently?

#156 Millennial_Falcon on 09.09.14 at 2:56 pm

#137

Completely agree. I was born in Toronto but have lived in the 905 until recently (I rent a condo in North York). I am 31.

To add to that list, and this is a generality, but there seems to be a consensus that a lot of our women are not that great. Not bad looking -they are stunningly beautiful- but their attitudes. Most dudes in the city are now flocking to the foreign born women with different values. A couple dudes I have met from different cities (New York, LA) and each remarked at how closed Torontonian women seemed to them.

My take is that the novelty of the city seems to wear off after a few years, usually when people realize how crippling the gridlock is, or how annoying the people can be.

Most of my friends who had bought condos in the core or mid town are now buying houses in the suburbs where they grew up, or in north Toronto where there is more of suburban feel with less gridlock. This usually occurs after there is a wife in the picture.

We single dudes still relish downtown nightlife though.

MF

#157 DM in C on 09.09.14 at 3:05 pm

Parents are in NS — all three kids and grandkids all in AB. Mind you, YYC has had +20cm snow over last night and tonight will get more.

Brothers went back to visit this summer — all white hairs, everywhere. Not many working. Hard to find a job (dad is 65 and can’t find anything). Cold, damp, ppl still asking +$300k for a house. Wages bad. If I could work remotely, I might consider going back — but nahhh — taxes too high, still have to go to TO to fly anywhere.

Friend of mine was trying to get out, but RE bottomed and he can’t sell his place in Bedford/Hammond’s Plains for what he ‘needs’ to. Now PT instructor at NSIT.

It’s a sad place. I like the ocean, but the mountains are great too. We will eventually get something on the island (PEI for you westerners) for the summers, maybe. Or AZ.

#158 Bottoms_Up on 09.09.14 at 3:43 pm

Garth, how’s that rich person’s fund doing that is short the Canadian housing market?

#159 Bottoms_Up on 09.09.14 at 3:48 pm

#147 Flawed on 09.09.14 at 1:32 pm
—————————————-
It’s actually called climate change because our climate is changing.

For example, certain ocean areas are now warmer than usual, causing water currents to change, which is thought to be behind the polar vortex we experienced throughout 2014. This made Western Canada hotter than usual and Eastern Canada colder.

#160 TnT on 09.09.14 at 3:53 pm

#146 devore on 09.09.14 at 1:24 pm

Population growth is population growth. Outside 3rd world countries, 1% is respectable. But you don’t get to blame this on immigrants. Is that why you are so uncomfortable talking about immigration? I know I’m not.

*********

You need comprehension skills…. I am not “blaming” immigrants nor am I uncomfortable with the topic.

However, your whole reply reeks of discomfort talking about immigration and a very Canadian reply I must add.

I don’t believe any of the made up numbers you just posted either.

There’s not a single neighborhood that has not been impacted by the huge growth over the last 10 years.

If you can’t see it then your blind to it or not living here.

#161 Bottoms_Up on 09.09.14 at 3:53 pm

#139 Ray Skunk on 09.09.14 at 12:55 pm
———————————————
Immigration to Canada is approximately 1%, so let’s say 300,000 people.

Don’t 1/3rd settle in the GTA?

Thus over 7 years you’ve added upwards of 700,000 people to the area (not counting people that may relocate to the GTA minus the people that leave).

No wonder gridlock is getting worse. The fact that this is true is underscored by politicians actually placing an emphasis on funding and expanding transit.

#162 CP on 09.09.14 at 4:02 pm

Whoops!

http://news.nationalpost.com/2014/09/09/toronto-house-collapses-during-renovations-trapping-three-people-inside/

#163 Mark on 09.09.14 at 4:04 pm

“Posted mortgage rates below 3% are back:”

Sure, just like the United States. But increasingly few people actually qualify. And as equity continues to recede, even fewer will qualify.

Its kind of like those “$100 42″ LCD HDTV Boxing Day” specials that you see advertised. There’s 2 TV’s to be split amongst the 300 people that are in line. Obviously some people are going to be disappointed.

#164 Omg on 09.09.14 at 4:10 pm

ADD IN A FEW MORE COSTS

The lucky landlord will also have to cover maintenance costs – on a place like that figure on at least $10k annually.

Plus if he is not managing it the property manager will take another 10%.

This guy is in a serious net negative cash flow, and banking on property appreciation to make this investment make sense.

Is it possible that he sees enough appreciation over the next decade for it to make sense – who knows?

But when viewed unemotionally there are way less risky places to stick your money.

#165 TnT on 09.09.14 at 4:12 pm

#148 Ray Skunk

Look at it from the perspective and any foreigner from any country who is looking to move their family into Canada.

They are not looking up what the city GDP is, or who the mayor is or which way the political spectrum leans.

They look at job prospects, schools, integration with their own ethnicity, how welcomed they feel by the locals and so on…

Same goes for any millennial generation who grew up in the suburbs. You think they care what the #’s are vs. the cool factor. The convenience of walking to work vs. commuting. You think the 1000’s of graduating kids are going to go back to rural Canada after living here for 4 to 5 years?

Toronto is growing, not shrinking. Problems will be solved as they get worse because Canadian only fix things when they are broken.

Remember the days when Toronto was guaranteed to be left leaning (The Miller days). More and more new Canadians / Torontonians are leaning to the right politically. People will vote their wallets and Toronto council will be replaced.

Check out the new Streetcars. New public push for more subways. Ontario Place to be revamped, Pan Am games.

Less union mentality is rising through the ranks of Toronto’s citizens. We can see private Garbage collectors expanding across the whole city. So on and so on…

Those who can see this and act upon it are being rewarded. There’s 20 new Torontonians for every 1 who belly aches and leave.

You won’t even recognize Toronto in another 10 years.

#166 what bubble on 09.09.14 at 4:19 pm

James Rickards, bestselling author and former general counsel for LTCM, warns that the international monetary system is about to collapse.

http://www.fuw.ch/article/im-expecting-the-next-crisis-rather-sooner-than-later/

Surprise. He’s selling a book. — Garth

#167 Shawn on 09.09.14 at 4:25 pm

Central banks own stocks?

Happity at 138 claims (with no source)

Meanwhile, central banks own roughly 50% of the stock market

****************************************
By approximately 50%, do you mean none?

What central bank owns stocks?

I take it you don’t own stocks (i.e. own companies)? condolences.

#168 Shawn on 09.09.14 at 4:43 pm

Never ask an umbrella salesman if it is going to rain.

James Rickards, bestselling author and former general counsel for LTCM, warns that the international monetary system is about to collapse.

http://www.fuw.ch/article/im-expecting-the-next-crisis-rather-sooner-than-later/

Surprise. He’s selling a book. — Garth

#169 TnT on 09.09.14 at 5:34 pm

#146 devore on 09.09.14 at 1:24 pm

Have a look here for more details.

http://www.fin.gov.on.ca/en/economy/demographics/projections/

The Greater Toronto Area (GTA) is projected to be the fastest growing region of the province, with its population increasing by 2.5 million, or 39.1 per cent, to reach over 8.9 million by 2036. The GTA’s share of provincial population is projected to rise from 47.6 per cent in 2012 to 51.5 per cent in 2036.

This means the GTA will grow by more than 1.51% per year for the next 22 years.

This also means your made up number for the GTA growth being 1% are off by more than 50%. This is a huge difference.

The original point is Toronto and the GTA are growing faster than anywhere else. It’s not growing because it sucks here. It’s growing because it’s the most sought after place to be in Canada.

#170 Inglorious Investor on 09.09.14 at 5:50 pm

167 Shawn on 09.09.14 at 4:43 pm

“Surprise. He’s selling a book. — Garth”

I recently saw an interview with Rickards which was really just an infommercial for his book. He lost a lot of cred with me after that. Also, I found it interesting that prior to this particular interview, he spoke of his involvement with that special intelligence team working in that war game scenario as though he was just an outside consultant. In the latest interview that I saw, they are branding him as nothing less than a fully fledged CIA agent.

Fess up, Garth. Are you really the head of CSIS?

#171 NorthOf49 on 09.09.14 at 6:02 pm

#161 CP on 09.09.14 at 4:02 pm

Whoops!

http://news.nationalpost.com/2014/09/09/toronto-house-collapses-during-renovations-trapping-three-people-inside/

———————————-

Tragic. One of the three trapped has died. Here’s the zoning variances they applied for. Gives you some idea what they were working on when it collapsed.

Property Address:
245 BROOKDALE AVE
Community: Toronto
Legal Description: PLAN 1501 PT LOT 441

PURPOSE OF THE APPLICATION:
To construct a two-storey rear addition to the existing two-storey dwelling. The existing one-storey rear addition would be demolished.

REQUESTED VARIANCE(S) TO THE ZONING BY-LAW:
1. Section 10.10.40.40.(2), By-law No. 569-2013
The maximum permitted Floor Space Index (F.S.I) is 0.69 times the area of the lot.
The proposed F.S.I. is 0.74 times the area of the lot.

2. Section 200.5.10.1.(1), By-law No. 569-2013
The minimum required number of parking space is 1.
The proposed number of parking space is 0.

3. Section 6(3) Part VI 1(I), By-law No. 438-86
The maximum permitted Gross Floor Area (G.F.A.) is 0.69 times the area of the lot.
The proposed G.F.A. is 0.74 times the area of the lot.

4. Section 4(4)b, By-law No. 438-86
The minimum required number of parking space is 1.
The proposed number of parking space is 0.

#172 Millennial_Falcon on 09.09.14 at 6:10 pm

#142 Mark

Then your friends are clearly more in the know then mine are and I am not being sarcastic. It is good to know there are some out there our age who see the writing on the wall finally.

By the way, your posts are definitely some of the most informative on here. I always look for them and silently nod as I read.

Bought the book “Millionaire Teacher” because you recommended it a while back.

While I am here, any other books your recommend?

MF

#173 NorthOf49 on 09.09.14 at 6:28 pm

#161 CP on 09.09.14 at 4:02 pm

Whoops!

http://news.nationalpost.com/2014/09/09/toronto-house-collapses-during-renovations-trapping-three-people-inside/

———————————-

From the CTV News helicopter, it appears they had the rear of the house opened up, old addition removed, new rear foundation dug but not yet poured.

http://ow.ly/BiGwj

Looks like perhaps with the rear support gone, the sides buckled out, the front falling in and the 2nd floor and roof coming straight down.

#174 Ayn Rand Army on 09.09.14 at 9:09 pm

Again Garth, i will have to scroll up the page or find that little bookmark with the grey head in it….. you know grey’s are a type of aliens…. and everyone knows you’re out of the world…. hmmm, Garth IS from mars!

So, while here visiting the earth Garth, can you hyper link the Greater Fool part of the footer text shown below?

Would be out of this world!

Greater Fool – Authored by Garth Turner – The Troubled Future of Real Estate

Copyright © 2007-2013 Garth Turner. All Rights Reserved.

#175 Kenchie on 09.09.14 at 9:16 pm

#168 TnT on 09.09.14 at 5:34 pm

“#146 devore on 09.09.14 at 1:24 pm

Have a look here for more details.

http://www.fin.gov.on.ca/en/economy/demographics/projections/

The Greater Toronto Area (GTA) is projected to be the fastest growing region of the province, with its population increasing by 2.5 million, or 39.1 per cent, to reach over 8.9 million by 2036. The GTA’s share of provincial population is projected to rise from 47.6 per cent in 2012 to 51.5 per cent in 2036.

This means the GTA will grow by more than 1.51% per year for the next 22 years.

This also means your made up number for the GTA growth being 1% are off by more than 50%. This is a huge difference.”

Don’t you know all forecasts are wrong. Do you actually believe they can correctly forecast population growth for 25 years?

I saw a presentation on this projection. It started off by talking about Halifax will grow by xx amount of people by 2036. Then the next slide was about Vancouver adding all the population of HRM by 2036. Then it showed that Toronto will add all of the population of Vancouver by 2036.

Well, a lot of $hit can happen in that time. 1.5% per year is high by historical standards. And this projection seems awfully bullish on Toronto and less bullish on other cities.

PS: many years ago, I saw a projection that said Canada’s population would peak at 37m before the baby boomers started to die off faster than new people are born. That was clearly wrong.

#176 Fed-up on 09.10.14 at 12:04 am

@#168 TnT on 09.09.14 at 5:34 pm
——————————————————————————

And again we ask you, even if all of this speculation you list holds true (fat chance), how does jamming millions more people into a bankrupt city that does not have the transit and infrastructure to handle even 1 million less people than it has now, change the GTA for the better???

We await with baited breath.

#177 TnT on 09.10.14 at 7:08 am

#175 Fed-up

Simply public demand will bring fixes for the better.

Growing pains is where Toronto is now.

#178 Ozy - to #91 Fed-up on 09.10.14 at 9:46 am

haha! you probably have to endure a lot more of the negatives you’ve mentioned in here, hey, plus some new :) like bed bugs, cockroaches, greedy landlords etc

remember how many decades were needed even for women to get the right to vote! where do you think you are?

In the western world, fight and change Is the only answer

http://en.wikipedia.org/wiki/Women%27s_suffrage

#179 Fed-up on 09.10.14 at 10:27 am

@ #176 TnT on 09.10.14 at 7:08 am

#175 Fed-up

Simply public demand will bring fixes for the better.

Growing pains is where Toronto is now.
——————————————————————————

Wow, I don’t even know where to start with that detailed response. I guess you believe in the tooth fairy as well.

We’ve “simply” been waiting for these magical “fixes” for decades as available land and resources dry and disappear to real estate developers and the city becomes more and more unlivable. Any idea where you’d like to set up 2 or 3 super highways that the city has badly needed for decades? Any clue where to build and how we pay for at least 6 major subway lines that may actually give us a barely adequate rapid transit system? Any clue as to when we expect commencement of above let alone completion?

I’m just wondering but in the meantime you hang on to those dreams ok?

#180 TnT on 09.10.14 at 4:26 pm

#178 Fed-up

Here you go little dude….

http://www1.toronto.ca/wps/portal/contentonly?vgnextoid=7ac5d58db2581410VgnVCM10000071d60f89RCRD

If you spent less time belly aching and more time resourcing then you might find some answers….