The end

TAILS modified

Remember the Fort Mac dude who told us some weeks ago he was going to unload his house in a squalid city populated with horny engineers? (Like there’s any other kind.)

Well, the guy has horseshoes up his rear, apparently, listing and selling just days before the price of a barrel of oil plunged enough to put oil patch execs into cardiac arrest. “First of all, thanks for reading and posting my story! I feel somewhat famous now,” he says, pathetically. “My house just sold for $10k less than what I bought it for back in June of 2008.

“I’m just glad it’s over, especially the way the world markets have been acting this past week! I’m pretty sure back when I bought it the exact same thing was happening globally, but I was completely oblivious to it, just like these new greater fools probably are. I bought at a bad time, but looks like I probably just sold at a great time.”

Now, remember the Financial Post dude who dissed me recently, arguing there’s no real estate bubble – only a gasbag full of twits like me writing about it. “Booming real estate markets are producing another kind of bubble: An expansion of authors writing about a looming crash,” he wrote. Then Marr quoted such unbiased and credible people as Joe Owe and Brad Lamb to help calm the afeared masses.

Well, times change. Sometimes ya gotta flip. Sometimes, flop. Mr. Marr, praise be, has seen the light. “No matter what statistics show, Canada’s housing boom is about to end, experts say,” is his latest piece. Just in time, too. CREA reports sales fell last month – a significant event. Even Royal LePage is warning consumers not to expect real estate to perform. And Capital Economics’ David Madani earns some ink with this observation:

“What concerns me is some buyers seems to have this view that prices can only go up. People feel it’s a one-way bet. A lot of younger people seem to think that if they don’t get in now on the home ownership ladder, they’ll miss out. Some of these people will come to regret this decision. In the more expensive markets, it’s almost like a capitulation where they say ‘If I don’t buy now, I’ll never own a home’. This is what happens in a housing bubble.”

Meanwhile, even The Motley Fool is lining up to take a whizz on the housing market. “If you buy Toronto real estate now, you’ll hate yourself later,” says this week’s headline. In arguing for an investment in nice REITs that pay you actual cash to own them, the Fool reminds is why GTA housing is a potential sinkhole.

“The city’s real estate boom has produced some jaw dropping figures. For instance…

  • $951,000: Toronto is about to become the second Canadian city where a single-family home costs more than $1 million. Last month, the average detached house sold for $951,000, up 8% year-over-year.
  • 130 skyscrapers: Toronto has more skyscrapers under construction than any other city in North America. Today, there are 130 high-rise projects underway.
  • 39,000 realtors: The number of realtors in Toronto has doubled over the past 10 years. Today, there’s one realtor for every 140 people in the city.
  • 37x rental income: Toronto housing prices are valued at 37x annual rental income. Typically, the market has traded between 15x and 20x rental income.
  • 3.7% cap rate: Toronto capitalization rates — the rate of return based on what a property is expected to earn in rental income — have hit new lows. This was highlighted last year when the Bayview Village shopping mall sold for a record low cap rate around 3.7%.

The conclusion: “You should buy assets that make sense based on cautious assumptions. Nobody should be speculating that people will pay growing premiums for a house.”

That sure is good advice these days in a bunch of cities, like poor Regina. The latest realtor survey shows the average two-story house is 7% cheaper than it was a year ago, even as sales hold steady, while bungs have dipped 8%. Inventory has been flooding on to the market as more sellers sense this is a now-or-never moment. There are more houses for sale than at any time in the past twenty years. Says local broker Mike Duggleby: “The inventory levels available on the market right now are approximately 40 per cent higher than usual, which has created a supply-demand imbalance and pushed home prices down. Strong unit sales this quarter have not been enough to support previous price levels.”

In all of Nova Scotia, including Halifax, prices are dropping. They were off about 3.5% last month compared to the same time a year ago, with more than full year’s worth of houses sitting on the market. In Montreal, prices are running less than the rate of inflation, after an absolute decline through the summer.

Of course, this is at a time when the cost of money has never been lower and a five-year mortgage can be stapled down for a lowly 2.8%. As mentioned earlier this week, already 60% of Canadian markets are seeing falling sales, with most experiencing rising inventories. So the hot housing conditions most realtors and reporters keep telling us exist is really a three-city phenom. And, as I wrote here a few days ago as oil collapsed, you really have to wonder about Calgary.

Well, a crappy, raw semi with a Wild Kingdom basement on a hipster street in Toronto sold this week with twelve offers – all from virgins. The asking was under $830,000, and the sale was over $950,000. When I spoke to the agent for one of the losing bidders (who reads this blog), all he would say is, “I am so done with this town.”

Smart people know where this is going. Tails up.

167 comments ↓

#1 pathcontrolmonk on 10.16.14 at 6:24 pm

Finally.

#2 obviously on 10.16.14 at 6:24 pm

and in an act of complete DESPERATION….

“The head of the St. Louis Federal Reserve Bank said on Thursday the U.S. central bank may want to keep up its bond buying stimulus for now given a drop in inflation expectations.”

http://www.cnbc.com/id/102094113

#3 Retired Boomer - WI on 10.16.14 at 6:24 pm

Buy A house in Toronto right now?

Na, I’s rather contract ebola – better outcome.

#4 Ferrari321 on 10.16.14 at 6:34 pm

Wow – early post today :)

#5 Soused on 10.16.14 at 6:36 pm

“Booming real estate markets are producing another kind of bubble: An expansion of authors writing about a looming crash,”
—————————————————————–

I laughed when I saw that headline, myopic article is going to remembered for a long time but The Globe And Mail and the rest have been just as eager to praise real estate while selling ad space to developers and realtors.

#6 Mike in the Okanagan on 10.16.14 at 6:36 pm

It was interesting to hear from CIBC yesterday saying Canadians are paying down debt faster than BofC thought and could weather 100 basis point increase in interest rates by stretching out the term of the mortgage.

They also did admit horny virgins have been priced out of many markets.

#7 Anson on 10.16.14 at 6:37 pm

I wouldnt necessarily call this having horse shoes up the rear, not totaly screwed maybe, but lucky, I dont think so.
“My house just sold for $10k less than what I bought it for back in June of 2008.”
Sounds like someone lost more than $10k to me. How much is the true loss after factoring in realtor fees, lawyer fees, moving expenses, painting, repairs, lost time and opportunity.

#8 Van Isle Renter on 10.16.14 at 6:38 pm

#45 Inglorious Investor on 10.15.14 at 9:31 pm
Listen, folks. Greater Fool is a bastion of free speech. Kudos to Garth for allowing people to spew, vent, pontificate, opine, and share. This is Mr. Turner’s blog; it’s not up to any of us to decide who should be banned or not. I disagree with much of what some people say on this blog, but I’m glad they have a forum to say it.
++++++++++++++++++++++++++++++++++++

You can say anything you want except question the dogma of Man-Made Global Warming. That ends up on the floor faster than Osama Bin Laden’s burkha in sheep country.

#9 SH on 10.16.14 at 6:40 pm

Toronto is doing just fine. A house I was looking at and was willing to pay $3.5 for just sold for $3.85 and the asking price was $4. The seller had listed it on and off for 5 years. This time around it sold in just 10 days. It is 24 Ivor Rd.

As I said recently, the high end is going gangbusters and is up 20% from last year.

#10 Mark on 10.16.14 at 6:41 pm

“In arguing for an investment in nice REITs that pay you actual cash to own them”

REITs are also a bubble. The inputs to REITs are very similar to that of residential RE. P/E multiples are sky-high compared to the stock market. Returns over the past 2 decades have been quite excessive. And the taxation preferences for REITs are hardly sustainable and a loophole ripe for closing.

Wild generalization. Many REITs are well-financed, well-managed and pay handsomely. — Garth

#11 Mark on 10.16.14 at 6:43 pm

” So the hot housing conditions most realtors and reporters keep telling us exist is really a three-city phenom.”

No, its just a shift in the sales mix in Vancouver/Calgary/Toronto behind the Realtor claims of ‘rising prices’. Actual house prices, relative equals for equals, have been falling for the past year and a half in those cities.

#12 mark on 10.16.14 at 6:45 pm

When it falls apart remember to catalogue all those “it’s all good here, never a better time to buy” quotes from real estate shills that deny reality of the situation. Great historical knee slappers.

http://www.idiottax.net/2014/10/goodnight-sweet-prince.html

#13 crowdedelevatorfartz on 10.16.14 at 6:46 pm

When CREA starts admitting the sales numbers are down………not good.

#14 TEMPORARY® Foreign Prime Minister on 10.16.14 at 6:53 pm

“…….Today, there’s one realtor for every 140 people in the city………..”
=========================

(cue Scottish accent) Ah don’t think the homeless shelters can take much moore, Captain….

#15 Mister Obvious on 10.16.14 at 6:56 pm

Don’t be too hard on mister Mr. Marr, Garth. Unlike yourself, he and his colleagues are valued only by the sum total of mouse clicks they generate. His sad destiny is to forever ‘predict’ where the wind blew yesterday.

#16 Freedom First on 10.16.14 at 6:57 pm

Yes, Mr. Marr is just a typical msm writer. No offense meant to him, as I have known for many years that the msm world wide is Bullish on buying housing as a no-fail brilliant thing to do financially, until they are forced to tell the truth. After the sheep have been fleeced. Past, and recent history world wide proves this to be true.

This is why we need people like Garth, who, even when people are trying to mock and shame him, he is steadfast in teaching the tried and true successful financial principles. Hell, even the PM tried to change Garth. Who you gonna trust?

#17 M on 10.16.14 at 7:00 pm

Bubbles everywhere. But ain’t over yet. For whom still believes in “recoveries” (other by the one induced by printing ups.. by having central banks buyin’ “assets” ) please watch:

http://www.bloomberg.com/news/2014-10-16/u-s-index-futures-fluctuate-between-gains-and-losses.html

..very nice of the comrades at Bloomberg:) Canada will keep goin’ printing
-by the way..just got a Scotia brand new CC with a 10K limit on ity with a desperate promotion of 0.99% for 6 months. Never asked for it .

Sprott would definitely love me :)

..just sayin’ :)

Only Mr Market will move those mortgages up. Which is good: gives more time to suckers to buy more cardboard stuff. Print baby, print for when the “correction” comes those markets lower they’ll go.

Gents, this time around we’ll be able to make it like thieves for we’ve seen it all in 207-2009. Same thing now..a few orders of magnitude better .

#18 Daughter of Ponzy on 10.16.14 at 7:07 pm

All assets, especially real estate and stocks were just pumped up by cheap credit. Much of that credit will never be paid back and asset prices will drop to reflect global economic, social and political reality which is grim. Its is as simple as that.Yep, they are pulling the plug. Good luck, cowboys.

#19 Steve French on 10.16.14 at 7:12 pm

This is the end….

My only friend, the end…

Of our elaborate plans, the end.

#20 Daisy Mae on 10.16.14 at 7:12 pm

“The conclusion: “You should buy assets that make sense based on cautious assumptions. Nobody should be speculating that people will pay growing premiums for a house.”

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

The ‘conclusion’? Coming YEARS after you first predicted it…and EVERYONE, of course, gleefully dissed you. Now everyone understands that you were right, after all. Duh! Disgusting.

#21 M on 10.16.14 at 7:15 pm

“39,000 realtors: The number of realtors in Toronto has doubled over the past 10 years. Today, there’s one realtor for every 140 people in the city.”

Holly crap.. more realtors per capita than Tim Horton’s employees :) Great picture !!

One day I’ll bore you with a story about some guys that asked me 12K for a damn boom (some piece of rigging on my sailboat). Next they tried to sell me two straight aluminum, tubing for 3K and they tried really hard to load another 3 K to bend them in shape. Extra 6K was supposed to come from drilling and tapping 12 wholes. Anything wrong with this pic ?
How about lack of being competitive, third world job at first world prices ?
Tza boyz at the foundry charged me 2.5 K for 35 tubes and some other boyz did the bending for 600K.

This, gentlemen, is what is wrong with Canadian economy. The sense of entitlement I’d say. In teenagers (and the lovely beauties) is tolerable. Disastrous in adults.

Still anyone says recessions/depressions are bad for , when their time comes ?

The lil example with the tubes can be matched in 1000 ways with other examples that I’ll spare you. For now.

:)

#22 Strathcona on 10.16.14 at 7:15 pm

I’d like to think Garth is right on this.

Unfortunately, here in a good neighborhood of Edmonton, decent homes are selling very quickly, some shorter than a day. A good four bedroom detached here in Southside won’t be on the market long for under 350K. Listings are low, only the junk languishes for months.

It’s irrational. The same irrationality I saw in 2007. Unless we have another 2008, Garth assures us we won’t, and we don’t see a year’s period of $60 oil, the Edmonton market will continue being irrational, as more and more newcomers arrive.

The distance between reason and reality is measured by the common man. Most people generally aren’t very intelligent. The herd is what makes the market, unfortunately.

#23 prairie person on 10.16.14 at 7:17 pm

Sales may be down in Victoria but they’re not dead. Someone has just put up a for sale sign on a spec house. I thought someone had bought the lot and was bldg for themselves. Nope. A house just down the block has a sold sign on it. For sale sign went up about two weeks ago, if that. It’s not a hot mkt here but people are buying and bldg. Surprises me. This isn’t a town of high wages. Most jobs are just over minimum wage. Serving tourists, cutting lawns, taking care of the elderly. If Alberta buyers disappear, will that affect Victoria?

#24 Cato the Elder on 10.16.14 at 7:19 pm

Garth I respect you and think you’re an honest and decent man.

I strongly recommend against thinking other members of government are the same.

They aren’t going to do the right things. They are going to do everything in their power to prop up home prices.

They’re not going to let the foolish debtors pay for their mistakes – they’re going to bail them out.

Savers and responsible people are going to be punished. Massive stimulus will increase inflation and eat away at what little wealth they have.

I have no confidence in government, especially a government beholden to the whims of the masses. History justifies my position on this.

Banks will get rewarded, while taxpayers and the most productive of society are punished.

It’s the system of government we have today. Many people on this blog get upset with me for pointing out the obvious, rather than thanking me for clarifying the truth.

#25 mitzerboy on 10.16.14 at 7:24 pm

hopefully Saskatchewan will revert back to being a
1 horse province with
2 bit cities and a semi-pro football team…..
the way I like it….
seems like all the bad people stay away then….
the weather is too harsh

#26 M on 10.16.14 at 7:24 pm

Garth,, sorry if I’m hyperactive tonight :)

I go with Cato @#18.

.. it doesn’t mean that if we disagree with you we do not love you !!

#27 Role on 10.16.14 at 7:26 pm

Almost did finding myself again, shooting for many, many mores condos. Offer. Offer, than offer anything. Glad I wasnt or not left again behind, cant save or do more,, any best would be too much!! Envest,, save. Then buy buy buy!!

#28 to_be_frank on 10.16.14 at 7:28 pm

The Rogers Centre/Skydome can seat 54,000 people, so you could only hold a convention of 39,000 Toronto realtors there. Frightening thought.

#29 Arfmooocat on 10.16.14 at 7:28 pm

#7 Anson on 10.16.14 at 6:37 pm
I wouldnt necessarily call this having horse shoes up the rear, not totaly screwed maybe, but lucky, I dont think so.
“My house just sold for $10k less than what I bought it for back in June of 2008.”
Sounds like someone lost more than $10k to me. How much is the true loss after factoring in realtor fees, lawyer fees, moving expenses, painting, repairs, lost time and opportunity.
……………………………………………………………………….

Forgot 6 years of property taxes

#30 Caveman on 10.16.14 at 7:29 pm

Motley Fool? I stopped looking when I saw back-to-back headlines (September?) one telling how you can’t lose if you buy and the other guaranteeing a loss if you don’t sell . I actually read an article listing the “best dividend paying companies you must own”; all three were from Calgary… really? all of the world and all three are in Calgary?

Motley Fool is made up of a lot of writers; most too busy selling recommendations to give any meaningful … anything.

#31 Smoking Man on 10.16.14 at 7:29 pm

I don’t get today’s picture, anyone…?

#32 Happy Renting on 10.16.14 at 7:34 pm

This month’s issue of Toronto Life arrived two days ago, and one of the main stories was about how common it is for 30-something couples to get significant cash help from their parents. The conclusion was that it’s an unsustainable behaviour, fuelled by Boomer home equity from the bubble and their retirement funds (which are mostly home equity from the bubble.) So if RE crashes “we are all screwed”.

Funny timing, the publishing of that article… When even MSM starts cautioning on housing, you know the jig is up.

#33 Waterloo Resident on 10.16.14 at 7:46 pm

Okay, one of the 5 charts that I follow now has a rising pattern to it, so if anyone wants to place buy stops on any American based S&P 500 ETF ( on American markets, ETFs like UPRO, SPXL, SSO ) its okay to do it now. There is no guarantee they won’t rise up and then crash the next day, but the odds now are a lot less of the happening.

#34 raisemyrent on 10.16.14 at 7:50 pm

#7 Anson on 10.16.14 at 6:37 pm
I wouldnt necessarily call this having horse shoes up the rear, not totaly screwed maybe, but lucky, I dont think so.
“My house just sold for $10k less than what I bought it for back in June of 2008.”
Sounds like someone lost more than $10k to me. How much is the true loss after factoring in realtor fees, lawyer fees, moving expenses, painting, repairs, lost time and opportunity.

Don’t forget having to live in Ft. Mac for years (I’ve been there for months and that was enough), secretly treasuring the fortune that would ensue from having bought RE.
Each to their own, but take Québec for example. I was just looking at properties in St. Adéle, where my friend is still working on renovating her small house that she wants to sell (sigh), and bungalows go for about 100k (realistically). Small, resort town, with great nature in the summer, less cold in the winter, much, much fewer junkies, no real economy, but who cares about that. Just an eye-opener on what real estate might/should cost post-bubble (and this 100k is partly fuelled by the overall bubble anyhow).

#35 Old Man on 10.16.14 at 7:58 pm

I am back in business. Any ideas what can be had on sale during this Boxing Day in October. I am looking at PRC, TRT and FU. Any other juicy dividend players? Time to jump in with both feet. I am not getting any younger.

#36 s'all right again on 10.16.14 at 8:00 pm

The anxious looks on the news readers faces for the last week or so as they’ve been reading the leads for the stock market stories have been replaced by …

everything’s fine again!
market bounced up again today!
no worries.

… in other news, the animals at the zoo were playing with pumpkins today …

#37 Nemesis on 10.16.14 at 8:00 pm

#Sometimes… #AllItTakesIsA… #TightSqueezeOrTwo… #ToBeatTheRacket… #Or,WhyItalianTelevisionIsSoMuchBetter:

http://youtu.be/W7lcrK7tNaQ

#38 young & foolish on 10.16.14 at 8:09 pm

Sell now, or be prepared to be an owner in a dead market, a la 1990s, for a few years.

#39 not 1st on 10.16.14 at 8:14 pm

So Garth, the brainwaves who built a $5 million dollar house in Regina about 5 houses down from my modest circa 2008 bung just lost 7% of their value 2 months after they moved in. Or in a numbers only a fool can understand – $350,000.

#40 Victoria Real Estate Update on 10.16.14 at 8:14 pm

We are back to 2007 prices in Victoria!

House prices were down again in September. We would have to go back to 2007 to see September prices this low in Victoria.

. . . . . . .Price Increase/Decrease. . . . . . . .
. . . . . . . . . Since June 2008 . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
+40%. . . . . . . . . . . . . . . . . . . . . . . x. . .
+38%. . . . . . . . . . . . . . . . . . . . . . . . . . .
+36%. . . . . . . . . . . . . . . . . . . . . . . . . . .
+34%. . . . . . . . . . . . . . . . . . . . . . . . . . .
+32%. . . . . . . . . . . . . . . . . . . . . . . . . . .
+30%. . . . . . . . . . . . . . . . . . . . . . . . . . .
+28%. . . . . . . . . . . . . . . . . . . . . . . . . . .
+26%. . . . . . . . . . . . . . . . . . . . . . . . . . .
+24%. . . . . . . . . . . . . . . . . . . . . . . . . . .
+22%. . . . . . . . . . . . . . . . . . . . . . . . . . .
+20%. . . . . . . . . . . . . . . . . . . . . . . . . . .
+18%. . . . . . . . . . . . . . . . . . . . . . . . . . .
+16%. . . . . . . . . . . . . . . . . . . . . . . . . . .
+14%. . . . . . . . . . . . . . . . . . . . . . . . . . .
+12%. . . . . . . . . . .x. . . . . . . . . . . . . . .
+10%. . . . . . . . . . . . . . . . . . . . . . . . . . .
+8%. . . . . . . . . . . . . . . . . . . . . . . . . . . .
+6%. . . . . . . . . . . *. . . . . . . . . . . . . . . .
+4%. . . . . . . . . . . . . . . . . . . . . . . . . . . .
+2%. . . . . . . . . . . . . . . . . . . . . . . . . . . .
..0%. . . .x *. . . . . . . . . . . . . . . . . . . . . . .
– 2%. . . . . . . . . . . . . . . . . . . . . . . . . . . .
– 4%. . . . . . . . . . . . . . . . . . . . . . . . . . . .
– 6%. . . . . . . . . . . . . . . . . . . . . . . . .*. . .
————————————————————————-
. . . . . . .June . . . .June. . . . . . . . . . Sept. . .
. . . . . . .2008. . . .2010 . . . . . . . . . .2014. . .

x = Hamilton
* = Victoria

(Based on Brookfield’s index) link

Year-over-year: prices were down in Victoria
Month-over-month: prices were down
Since the end of 2013: prices were down

Based on Teranet’s index:
Year-over-year: prices were down in Victoria
Month-over-month: prices were down

Housing bubbles in both Canada and the US began to inflate in 2000 due to the implementation of lax lending standards. Today, prices in most US cities are higher than they were in 2000. Some US markets don’t appear to be bubbly. In contrast, prices in bubbly Victoria are clearly detached from economic fundamentals (incomes and rents).

Price increase/decrease since September 2000:

Atlanta: + 13%
Chicago: +22%
New York: +61%
Las Vegas: +30%
Dallas: + 34%
Phoenix: +40%
Detroit: -7%
Tampa: + 52%
(Victoria: + 125%)

Prices in Atlanta, for example, are only 13% higher than they were 14 years ago.

8 years after peaking, prices in the US remain significantly below 2006 peak levels. Overall, prices have rebounded 29% since hitting bottom in 2012, but millions of American families continue to struggle with the financial difficulties associated buying near the peak of a major housing bubble.

House prices in Canada and the US should be approximately the same, considering that incomes in the two countries are comparable. A look at house prices in several US cities gives us an idea of how massive Canada’s housing bubble is. For example:

$176 K, Wesley Chapel, FL (5 beds, 4 baths, 3,228 sq. ft., built in 2006, attached double garage)

$150 K, Coolidge, AZ (5 beds, 3 baths, 3,801 sq. ft., built in 2005, attached 3 car garage)

$157 K, Houston, TX (5 beds, 3 baths, 3,206 sq. ft., built in 2004, attached double garage)

$234 K, Las Vegas, NV (5 beds, 4 baths, 3,001 sq. ft., built in 2006, attached 3 car garage)

$173 K, McDonough, GA (5 beds, 4 baths, 3,290 sq. ft., built in 2004, attached double garage)

Girls and guys, Victoria’s price decline continues, even though interest rates are at historically low (emergency levels). If rock bottom rates can’t stop Victoria’s price decline, what will?

Obviously prices in Victoria will continue to sink.

If you buy now you we be stuck with an underwater mortgage almost immediately. Then you will be forced to stand by and watch helplessly as the value of your house declines for years, an experience that will prove to be gruelling.

Stay out of Victoria’s housing market for now and you will avoid the extreme financial difficulties that millions of American families continue to deal with today, 8 years after prices peaked in the US.

Until next time – Cheers!

#41 Berk N Tile on 10.16.14 at 8:19 pm

My story:
Bought a condo with in prime location Calgary for $215/sqft back in 2002. Just sold it this Oct 1st for $475/sqft. Sold to AM. Don’t know if it was H or not! Time to move on though. The timing looks good right now.
I discovered this blog May 2012, and it’s been a game-changer for me and the family. Independence pretty much assured as a result, and making decisions based on awareness that has grown exponentially since becoming a regular reader here.
I’ve added the condo cash to the portfolio, and am now in the process of laddering buys as Mr. Market provides opportunities with the recent twists and turns. Many, many thanks to you Garth, for providing this venue for the kennel of good dogs who contribute here. If ever we meet, I’ll be buying!

#42 crowdedelevatorfartz on 10.16.14 at 8:20 pm

@#31 SM
1. Fido found your stash.
2. Realtors are the butt end of a dog.
3. Brad lamb is suddenly camera shy.
4. Even old dogs can teach new realtors “tricks”.

#43 Linda on 10.16.14 at 8:34 pm

Glad to see that bargain hunters had a feeding frenzy on the market today. Be interesting to see if the TSX holds its pumped up gains or drops like a rock again on Friday.

#44 Mike on 10.16.14 at 8:34 pm

“In Vancouver,” Ms. Hong says, “the house prices are perfect.” I’m glad she thinks so… More HAM here.

http://www.cireport.ca/2014/10/vancouver-citys-real-estate-market-invaded-by-millionaire-chinese-immigrants.html

#45 Smoking Man on 10.16.14 at 8:34 pm

Welcome back old man, my regards to your hottie.

Tonight I’m at the grocery store, outside boy scouts, almost every one that walked by donated.

If your outside union station you will see down and out kids, old bastards with their caps out looking for a donation. 500 have to walk by before someone gives.

What’s this tell us about ourselves. To the young boy scoots who’ve never been changed by life. Here you go.

To the homeless, depraved drunks, drug addicts, . Losses, you Fd up somewhere along your journey, it’s your fault now suffer bastards. No donation… From the herd.

Do you now understand why I have no guilt taking from the dumb and giving to the hopeless.

#46 Kenchie on 10.16.14 at 8:36 pm

#116 Son of Ponzi on 10.16.14 at 11:28 am

“#106 Kenchie on 10.16.14 at 9:14 am
FYI,
Greek bond yields hit 8.94% this morning in Europe.
Last week, it was 6.6%.
————
Beware of Greeks bearing bonds.”

Bwahaha. I’ve been suspicious of the Greeks since Euro ’04! Bet against them in the Quarters, Semis and Finals. Lost each time. Still holding a grudge!

#47 Smoking Man on 10.16.14 at 8:40 pm

#35 Old Man on 10.16.14 at 7:58 pmI am back in business. Any ideas what can be had on sale during this Boxing Day in October. I am looking at PRC, TRT and FU. Any other juicy dividend players? Time to jump in with both feet. I am not getting any younger
…..

Love your optimizum, perhaps before you go to nuts, wait a few weeks, see how Ebola plays out…

#48 nonplused on 10.16.14 at 8:44 pm

And the part I don’t get, which has of course been highlighted over and over and over on this site, is how many of these houses are tear downs. The average wooden house is good maybe 50 years, and I think the particle board versions are closer to 20 i.e. not expected to outlast the furnace.

So in other words people are buying the land mostly. In Canada. Land everywhere.

Here in NW Calgary they finally opened the Tuscany LRT station with little pomp. But it did get my wife a parking spot at Crowfoot which is less than 10 minutes from our house. And we live in the country! There are horses down the hill. Point is there is no land shortage only zoning restrictions.

When you normally do a business analysis you might use a 20 year time horizon, put in your incomes and outgoes, all estimated of course, and use an excel function to calculate your rate of return. (Nobody knows how to do that on a calculator anymore, but on the other hand why would you need to?) Usually at the end of your time horizon you include a cost or an income item for disposing of the asset, 20 or 30 years out. Are the people buying tear downs including replacing the structure? I don’t think so. Somehow we’ve all concluded that wood structures do not decay or need to be replaced. Yet experience says they all end up in the land fill eventually.

#49 Annek on 10.16.14 at 8:48 pm

Help!
My daughter just got engaged and will be married in Nov 2015. Her fiancee’s parents are insisting their son buy a house this year by December. He had about 80,000 saved up and his parents are convinced it is the best time to buy in Milton. The neigbours are convincing them as well!
The parents feel that renting is throwing away money.
They have given him an ultimatum: buy a house and move out by December.
Readers: help me out to convince this family it is not the time to buy, even in Milton, Ontario.
( I can see most of his 80,000 going down the drain if he makes this move)
Any advice for the young couple?

#50 Next prediction? on 10.16.14 at 8:50 pm

And for your next prediction ….. ?

Alwyn

#51 Victoria Real Estate Update on 10.16.14 at 8:51 pm

Has anyone else noticed that changes have been made to some of Brookfield’s monthly index levels for Victoria since last week? These changes affected data as far back as 2008. This is the second time that I’ve noticed changes to Victoria’s data, the other was in June 2014.

For future reference, I’m posting some of Brookfield’s current index levels for Victoria.

2014: September: 143, August: 143.4, March: 141.8, April: 141.4

2013: October: 145.4, November: 145.4, March: 141, April: 141

2012: January: 150.2, April: 145.8, July: 146.8, December: 144

2011: January: 153.8, June: 159.6, July: 160, December: 151.4

2010: January: 157.4, May: 160, June: 160.2, July: 159.8, December: 153.8

2009: January: 141.2, February: 140.8, March: 141.2, December: 155.4

2008: January: 146.4, May: 151, June: 151.6, July: 151.2

2007: January: 130.2, March: 133.2, June: 137, December: 144.2

2006: January: 114.6, June: 120.4, December: 128.6

2005: January: 100, June: 105.8, December: 114

I’d appreciate it if someone would check these numbers to make sure they are correct and write a note back to me.

#52 young & foolish on 10.16.14 at 8:53 pm

If you don’t own, then you rent … but either way you pay for a roof over your head. It’s what makes RE so confusing for people. And it’s really not such a straight forward decision either. Depending on where you live, housing options can vary widely. It’s not a one size fits all option.

#53 Ole Doberman on 10.16.14 at 8:55 pm

Gartho – the piece of the puzzle you and the blog dogs are missing is foreign capital getting off the grid in Europe and hiding in Canadian RE.

This phenomenon is happening because of potential bank bail ins when the SHTF their – it’s getting close.

My friend just sold his $750K home to a German man – that said it all.

Don’t forget our politicians have sold our country out, well what can you do.

Wow. Some German guy bought a house from a guy you know. What a sovereignty sell-out. — Garth

#54 nonplused on 10.16.14 at 8:55 pm

Oh and the other thing that always surprises me when I go looking at houses with a realtor is just how little money people spend maintaining or upgrading them. 50 year old houses that still don’t have a developed or insulated basement? 40 year old furnace? Ok I guess it still works but what if it conks out when it’s 30 below? No insulation in the attic? You’ve got to be kidding, 2 inches of zonalite in 2014? A fireplace that doesn’t have a circulating fan? Why? Why why why why why? Chip board fences that are falling over? Rotted out decks? Nice car in the driveway though.

#55 olderthanaboomer on 10.16.14 at 8:55 pm

I notice that Mr Marr does not attract many comments, unlike this place.
Also noted that that chap Bellavance from La Presse had interesting comment at the tail end of Power Play yesterday 15th…he seems to have really good sources..so watch it if you like, draw your own conclusions.

#56 Cici on 10.16.14 at 9:00 pm

#21 M

600K to bend some tubes? Either you meant $600, or you should have bought a couple of condos in Torontuh…

#57 Joe2.0 on 10.16.14 at 9:03 pm

Looks like the only place the rats can hide is in US treasuries.
And then the way I see it is.
A-a new form of QE4
B-precious metals start going up.

#58 Sheane Wallace on 10.16.14 at 9:04 pm

#24 Cato the Elder

exactly

Ca dollar could be doomed. even the US dollar might look much, much better.

There go our CPP contributions and savings.

Strongly recommend FXE/FXF/UPP or better invest in their economies – VGK etc. but_stay_away_from_Ca_dollar

I warned about it several months ago, for now the CA dollar thanks partially to the idiot Poloz has declined more than 10 % against the US dollar.

Cheers.

#59 Cici on 10.16.14 at 9:07 pm

#31 Smoking Man

The cat got squished in between the sofa cushions; the cowboy squeezed out of moola when he sold his Calgary home.

#60 Cici on 10.16.14 at 9:07 pm

#31 Smoking Man

Oh wait, it looks like a little dog actually.

#61 SOS on 10.16.14 at 9:11 pm

Smoking Man #31 it’s a dog face down in a couch cushion. Strathcona #23 “only the junk languishes” I think this is a problem throughout Canada because some houses just aren’t well maintained and won’t sell until they’re torn down or completely renovated.

#62 Joe2.0 on 10.16.14 at 9:12 pm

Smoking Man
I agree the ebola is a big issue with impeccable timing, masking the Saudis manipulating oil prices to screw the US fracking industry.

#63 devore on 10.16.14 at 9:12 pm

#52 young & foolish

If you don’t own, then you rent … but either way you pay for a roof over your head. It’s what makes RE so confusing for people. And it’s really not such a straight forward decision either. Depending on where you live, housing options can vary widely. It’s not a one size fits all option.

It’s not that complicated. Subtract rent equivalency, add in mandatory expenses such as property tax and maintenance, so at least you’re comparing something resembling apples to apples, and adjust for horniness and “pride” of ownership premium.

#64 Nemesis on 10.16.14 at 9:14 pm

#OldMan’sHiatusExplained… #AndHeCallsThem,”JuicyDividends”

http://youtu.be/PgAyRCK9y9A

#65 Led on 10.16.14 at 9:15 pm

Does anyone know what Canada’s number one export is? It’s oil.
It’s sinking and so are we.
we are so done being different.

#66 Happy Renting on 10.16.14 at 9:18 pm

#49 Annek on 10.16.14 at 8:48 pm

You haven’t mentioned what your daughter and future son in law want. That’s actually a pretty important piece of information in this scenario.

#67 lee on 10.16.14 at 9:20 pm

In the last two days I have picked up quite a bit of etfs. In doing some research I learned the first $85000 in Canadian dividends will attract a tax bill of about $6500. Is this possible? If so, how do the rich get away with this? Secondly, is the dividend income added to your net income for taxation thereby increasing your income tax on the rest of your income? If not, this may be everyone’s road to riches.

#68 Sheane Wallace on 10.16.14 at 9:20 pm

Poloz talked down the loonie and it took massive dive lately. All this to support our manufacturing.

And we are reading this today on yahoo.ca:
https://ca.finance.yahoo.com/news/manufacturing-sales-fall-52-1-billion-august-statistics-123723445.html

Yep, record contraction in manufacturing.

………………

Bought organic new Zealand apples for 0.89 per pound (on sale) this week. Last week there were Australian organic apples on sale – 0.99 per pound. For Canadian organic apples the prise is 3.99 per pound, no sale.
In Canadian store.

Amazing.

#69 Sheane Wallace on 10.16.14 at 9:20 pm

the price, darn it.

#70 Kenchie on 10.16.14 at 9:21 pm

Garth et al, pardon this long response to Cato the eldest fool.

#144 Cato the Elder on 10.16.14 at 6:49 pm

“Many people have trouble coming to terms with the government we REALLY live in when they’ve gone their whole lives believing it’s a free and prosperous democracy.”

Once again, this is just your view and life experience. Maybe you are not “free and prosperous” (whatever that actually means) because you don’t make enough money to have those feelings. However, the vast majority of the people I know make enough money to take vacations, treat themselves when they need (not want) and save money for retirement.

“It’s called cognitive dissonance and sometimes its so powerful people often resort to anger and violence to deal with the discomfort of learning of it.”

It’s nice to see you admitting to your fault. That seems to be a first. There is hope for this hopeless one (as Milton Friedman would call you).

And

“Want the truth? We live in a crony capitalist/fascist system. You know when the Ontario premier went on TV with her commercials and promoted more ‘public/private partnerships’ I had to laugh because that’s basically the same way Mussolini defined fascism.”

I haven’t seen these commercials you speak of, but I will give you the benefit of the doubt. Now, however, you’re being exceptionally hyperbolic when comparing a couple of 3Ps in Ontario to the beginning of Fascism. The Kingdom of Italy was a centralized state that had a military, was jingoistic, and had felt it was betrayed by the Allies after WWI because they didn’t get what they were promised to join the Allies (UK, France and Russia). Ontario is just a province in the country of Canada. It doesn’t have a military. It’s leader won because of the incompetence of the rival candidate who squandered his lead because he was too radical for the majority of people. (Disclaimer: I voted PC). 3Ps, on the other hand, work perfectly and are very intelligently designed (I bet you’ll disagree, which is fine). The Canada Line in Vancouver is a great example of how it works. Do you really think Christy Clark is Mussolini in Manolos?

And

“How is a small business supposed to compete and upend existing businesses when those big businesses have lobbied the government to pass burdensome regulations?”

Lol. Have you heard of an organization called the Canadian Association of Petroleum Producers? Do you actually think they lobby government for more regulations on the oil sands?

“those regulations are there to PREVENT COMPETITION.”

And

Yet, the TSX and TSX Venture have roughly 41% of the world’s listed Oil and Gas firms (http://www.tmx.com/en/pdf/OilGas_Sector_Profile.pdf) and similar % of the world’s listed mining companies (http://www.tmx.com/en/pdf/Mining_Sector_Sheet.pdf). Seems like there’s enough of the pie for new guys to raise financing and grow.

And

“Competition that would lower prices, introduce new technology, improve quality, and increase productivity are never allowed to exist because of this situation.”

Yes, in theory. But theory doesn’t always work. Just ask all those analysts working at the big global banks that didn’t see this correction. Also, technology is already exceptionally fast. How much faster do you want it? Productivity is very high already. It’s part of the reason so many people are unemployed: they are excess labour. China (and Asia in general) already produces enough for the world in many products. Does there need to be duplicated production in North America or Europe when the products can be done economically in Asia? Seems like a waste of resources to “race to the bottom” for the sake of producing things.

More to come…

#71 Joe2.0 on 10.16.14 at 9:22 pm

Dog gone it?

#72 lee on 10.16.14 at 9:24 pm

In the last couple of days I have picked up quite a few etfs. In researching a bit I learned the first 85000 in dividends attracts a tax liability if about 6500. Is this true? Secondly, are the dividends added to your taxable income so ad to increase the tax you pay on your other income? If not, this may be the road to riches. How do the rich get away with this?

#73 Sheane Wallace on 10.16.14 at 9:32 pm

#70 Kenchie

Listed on TSX makes them Canadian?

Who owns them, boy? How much do you have in these companies?

#74 Happy Renting on 10.16.14 at 9:34 pm

#67 and 72 lee on 10.16.14 at 9:20 pm

1) Dividends are taxed lightly in investor hands as they are paid out of profits that were already taxed at the corporate level.

2) You may get dinged with programs based on income level (OAS clawback, Ontario Health Premium, etc.), but additional income is taxed at your marginal rate. It doesn’t change the basic tax rate applied to your other income.

3) If you are looking to get away with anything in life, being rich is a pretty good way to do it.

#75 Roman on 10.16.14 at 9:42 pm

This is your best, forward looking real estate report

http://finviz.com/quote.ashx?t=TD&ty=c&ta=0&p=m
This honest thing just dropped almost 20%, erased all year to date gains and now experiencing whats commonly known as “dead cat bounce”.

#76 Not an Economist on 10.16.14 at 9:44 pm

“To the homeless, depraved drunks, drug addicts, . Losses, you Fd up somewhere along your journey, it’s your fault now suffer bastards. No donation…”

Stephen Harper, is that you? Are you the real Smoking Man?

Seriously though Smokie, I don’t understand why you’re so upset at the world. It’s a neocon’s paradise today in our Country. Eat or be eaten. Law of the jungle with money and oil. What exactly would you change?

#77 Linda Pearson on 10.16.14 at 9:50 pm

#3 Retired Boomer – WI on 10.16.14 at 6:24 pm

Na, I’s [sic] rather contract ebola – better outcome.
********************
You would, eh? That stupid comment isn’t up to your usual standard.

#78 raisemyrent on 10.16.14 at 9:50 pm

#68 Sheane Wallace on 10.16.14 at 9:20 pm
Bought organic new Zealand apples for 0.89 per pound (on sale) this week. Last week there were Australian organic apples on sale – 0.99 per pound. For Canadian organic apples the prise is 3.99 per pound, no sale.
In Canadian store.
Amazing.

That’s because farmers here tend to have unsustainably small parcels of land (and business practices), for various reasons, yet are protected all the way to the consumer in the understanding that it is their right to make a profit whatever the circumstances and you should just pay for it and be thankful that they exist because they are the core of our society and GOD forbid you question any of it.

#79 Smoking Man on 10.16.14 at 9:53 pm

#76 Not an Economist on 10.16.14 at 9:44 pm“To the homeless, depraved drunks, drug addicts, . Losses, you Fd up somewhere along your journey, it’s your fault now suffer bastards. No donation…”

Stephen Harper, is that you? Are you the real Smoking Man?

Seriously though Smokie, I don’t understand why you’re so upset at the world. It’s a neocon’s paradise today in our Country. Eat or be eaten. Law of the jungle with money and oil. What exactly would you change?
……….

I don’t know

#80 FormerSaskie on 10.16.14 at 10:00 pm

#49 Annek

I’m not sure if this is a genuine request for information or not… but here goes. Why would your daughter marry someone who has not lived independantly of his parents? Will your daughter be happy when the in-laws continue to force their decisions onto their son when she is his wife. This marriage seems destined to be unhappy.

#81 Kenchie on 10.16.14 at 10:09 pm

Continued from above regarding:

#144 Cato the Elder on 10.16.14 at 6:49 pm

“Look no further than Uber – a company that is providing employment, better service, and more availability for customers. What is the government’s reaction? They need to pay for a taxi license or they’re not allowed! Why? For ‘safety’!”

Finally, you bring up something relevant to this world and not conjecture. I agree that the way cities have reacted is complete BS. It’s a fine technology. More poignant is Hailo abandoning North America. (http://www.thestar.com/business/2014/10/14/hailo_taxi_app_closing_north_american_operations.html)
However, this is democracy. You don’t have to agree with it, but it’s better than no accountability to the ones with the power. You’re right that it’s not fair. But life isn’t fair. It never has been, and never will be. It certainly does hurt the consumer, but not very much. Taxies are expensive, per se, and it’s a shame that Uber et al can’t be allowed to compete with no barriers to entry. But acting as if this is an ungodly problem that means everything is evil and corrupt is ridiculous. Things will change in Uber et al’s favour. It’s already showing up in the value of the taxi licenses. http://www.washingtonpost.com/blogs/wonkblog/wp/2014/06/20/taxi-medallions-have-been-the-best-investment-in-america-for-years-now-uber-may-be-changing-that/

And

“The greatest regulation is the marketplace. Scammers don’t last long in a free market.”

Well, if the SEC didn’t take down Madoff, would he still be around? How is the “marketplace” going to stop this: http://www.cbc.ca/news/canada/british-columbia/major-new-credit-card-scam-uncovered-in-b-c-1.2579214
Or any of these:
http://www.cbc.ca/news/canada/british-columbia/vancouver-police-release-top-ten-scams-for-2014-1.2555516
Or this:
http://www.consumerprotectionbc.ca/consumers-other-businesses-home/consumer-tips/979-rentalpropertyscams

Well, it can’t. The only way (theoretically) is if every participant in every market for every kind of product or service has perfect or near-perfect information. And that’s impossible.

And

“The owner didn’t serve you unsanitary food because the government forced him not to, he fed you good food in a sanitary environment because he wanted to MAKE A PROFIT. He also wanted you to come back! And he also didn’t want to kill you (that’s good for business).”

And it’s easier for clients to know whose got a good track record and whose got a bad track record by KEEPING RECORDS AND DOING INSPECTIONS! Such as this: http://www.nyc.gov/html/doh/html/services/restaurant-inspection.shtml
There is NO WAY for humans to know good vs bad without a) trying it first or b) getting a recommendation from a trusted source. That’s human nature. Lack of gov’t programs doesn’t change that. You’re obviously grasping at straws with this paragraph.

“The entire notion that we need regulation to save people from the market is ridiculous. Bad product and bad people will exist regardless of regulation”

You are missing the point. Regulation is a reaction to bad circumstances created by bad actors in the market. Everyone knows that bad products always exist. But it’s easier, generally-speaking, to put a floor on the worst behaviour possible done by the market.

And

“Unfortunately, I dare say that regulation actually hurts more people than not.”

Many people would disagree with you on this one. This is straight up ideological.

And

“People get COMPLACENT when they feel the government is sorting out the bad guys and are MORE prone to becoming victims.”

This is a legitimate concern. People do act like victims entirely too often. But it’s also easy to brush all people who consider themselves as victims (when they are at fault) with those are ACTUALLY victims! These are very different. The injustice of “wronging a right” is worse that “righting a wrong”. Overall, nothing’s perfect, so don’t expect the other situation to be perfect, or better.

And

“They’re taking massive risks under the MISTAKEN assumption that the government regulators know best.”

It’s highly unlikely that people buying a house consider that “government regulators know best”. That’s ridiculous. Those who need CMHC pay a fee, which is quite high, for the services. The Gov’t hasn’t had to contribute extra capital to CMHC is many years, if not decades, because the fees paid by purchasers produces enough of a cushion to offset the losses (to date. The future may be different, or it may not be different. None of us know).

And

“My thoughts however are not really my thoughts, they are firmly rooted in objective history. ”

That’s a laugh. First, you’re correct about them not being your thoughts, because they are regurgitation of ASOE BS. Second, you’re not being “objective”. You haven’t produced any evidence to back up what you’re saying. Look through your postings if you don’t believe me. All you do is write conjecture.

And

“There are also ENTIRE COUNTRIES that operate more along the lines of what I’m saying, and they are wealthier than we are (their citizens are better off).”

Which one? Hong Kong? Singapore? Have you been to those countries? I lived 6 months in Hong Kong. It’s not a glamourous life unless you’re in the top 1%. About 50% of their housing stock is gov’t subsidized, including the one my gf’s parents live in. Her mum gets 5 days off a year for vacation. That’s not a very good life. Singapore is having cultural backlashes against the rich foreigners who move there. It’s highly segregated among ethnic lines (little India looks like you’ve walked into Bombay). So don’t bring up “ENTIRE COUNTRIES” that operate along what you’re talking about. Because the only ones with superior qualities of life are the Nordics, Switzerland and Austria and Australia and New Zealand.

Rant over.

#82 WO on 10.16.14 at 10:22 pm

@#49 Annek

The NY Times has a nifty calculator to determine if its better to Rent or Buy?
http://www.nytimes.com/interactive/2014/upshot/buy-rent-calculator.html?_r=0&abt=0002&abg=0

#83 Bottoms_Up on 10.16.14 at 10:31 pm

Between 1999 and 2010 average house prices in Ottawa rose at a rate of about $1350 per month.

It must be hard for people not to look at their houses as cash machines, or to realize that prices could actually reverse. The last price reversal in Ottawa was between 1995 and 1996 (a generation ago).

http://www.agentinottawa.com/1956_-_Present_Prices/page_491704.html

#84 Fed Jones on 10.16.14 at 10:32 pm

So – 81 comments in half a day.

this pathetic blog gets a lot of people commenting.

#85 Kenchie on 10.16.14 at 10:35 pm

#33 Waterloo Resident on 10.16.14 at 7:46 pm
“Okay, one of the 5 charts that I follow now has a rising pattern to it, so if anyone wants to place buy stops on any American based S&P 500 ETF ( on American markets, ETFs like UPRO, SPXL, SSO ) its okay to do it now. There is no guarantee they won’t rise up and then crash the next day, but the odds now are a lot less of the happening.”

I’m intrigued about what charts you follow. Mind providing more info on them?

#86 DM in C on 10.16.14 at 10:50 pm

“Smart people know where this is going. Tails up.”

Thus the pic. Tails up.

#87 KommyKim on 10.16.14 at 10:50 pm

RE: #21 M on 10.16.14 at 7:15 pm
The sense of entitlement I’d say. In teenagers (and the lovely beauties) is tolerable. Disastrous in adults.

Mmmmm….. That’s why we should never tolerate it in our teenagers/kids. They eventually become adults.

#88 Retired Boomer - WI on 10.16.14 at 10:52 pm

#77 Linda Pearson

Regarding my comment at #3. It was said ‘tongue in cheek.’

However, one must look at the REAL possibilities on this.
Buying RE in Toronto at this juncture seems to ‘ensure’ a loss on resale for quite a while. Figure all your extraneous costs in, and it may be a generation before you are free from the underwater market. I would rate your chances of a ‘fatal decision’ at 100% for the foreseeable future, but you can take your chances.

Ebola, if untreated is 70% fatal based on known determinants. That is the untreated survival rate, grim though it is it is not 100%. Provide treatment early, the rate presumably drops. We have seen 3 successful outcomes from 4 cases here. 25% fatality rate.

Based on the simple knowns thus far, the statement, though a crude attempt at humor that it was – with typo –
still hands as the LESS hazardous option at present.

#49 ANNEK

Try a simple sit down with the young couple. I assume one, or both of the intended are renting? If not… then they have to first find a rental unit that suits them. Then have have to find a suitable for sale property that suits them.

Then a simple comparison of “COSTS” is in order.
Rent + utilities, insurance (opportunity costs on deposit to landlord).

Own house price, add in full closing costs, insurance, Taxes, maintenance, (Opportunity costs on $80,000)
mortgage payment, (and total repayment if not paid for early).

Naturally, we have to add in commuting costs to each one’s job from the rental vs the home. Then figure a job change in 4 years anyhow does that change things? Add in the likely hood of kids at some point. Flexibility in school choice? Easy to relocate when you are renting, high costs when you own.

Nobody’s discussed what the kids want either. One other thing not mentioned, and it is unfortunately a reality, what if they later discover they’re not the perfect couple? Almost half end up that way, and money issues are cited as a leading problem!!

I would not buy a home during the first year even I could pay CASH for a home. They need the time to learn to live together as man and wife. Even if they may have shacked up beforehand, it is different when you own each other.

tell your future in-laws to keep their faces out of the kids’ business!!

Best Wishes on this one!

#89 Son of Ponzi on 10.16.14 at 10:59 pm

Shawn and Old Man, a tag team?

#90 Casual Observer on 10.16.14 at 11:00 pm

Is the Fed sending out trial balloons about the possibility of extending/increasing QE?

After a swift and serious selloff, stocks have managed to rise on Thursday’s session with help from the soothing words of St. Louis Federal Reserve President James Bullard…

He said, “We have to make sure that inflation expectations remain near our target. And for that reason, I think a reasonable response by the Fed in this situation would be to … pause on the taper at this juncture, and wait until we see how the data shakes out in December.”

Bullard’s comments come two days after those of San Francisco Fed President John Williams…

Williams told Reuters “If we get a sustained, disinflationary forecast… then I think moving back to additional asset purchases in a situation like that should be something we seriously consider.”

http://www.cnbc.com/id/102094988

#91 Smoking Man on 10.16.14 at 11:01 pm

Ir took a shit load of mind altering substances to figure out the pic.

I’ll start up a kick-start page, take donations for my homeless book food inspiration people.

If your standing and we want to debate who’s got the biggest mojo. I’m in.

But these kids, who stand on Bay Street, looking for love in the firm of a few coins, have messed me up..

I listen to the stories, maskarading as an author.

Kills me….

Give to them

#92 Kenchie on 10.16.14 at 11:09 pm

Hmmm, let’s analyze this post for a moment…

#24 Cato the Elder on 10.16.14 at 7:19 pm

1)
“It’s the system of government we have today [i.e. a democracy]. Many people on this blog get upset with me for pointing out the obvious, rather than thanking me for clarifying the truth.”

“I have no confidence in government, especially a government beholden to the whims of the masses.”

Yup, you pointed out the obvious; that’s how democracies works. They cater to the masses. But your post seems angry at that, and that you want something different? Sounds like you can’t make up your mind about the benefits of democracy.

2)
“Banks will get rewarded”

“while taxpayers and the most productive of society are punished.”

Yet, bankers make a lot of money because of the industry is profitable and are some of the most productive members of society, since they provide services that are in great demand. And because their remuneration is higher than average, they pay more taxes than average. So you’re saying they will do well and get punished? Sounds like a contradiction.

3)
“Savers and responsible people are going to be punished.”

“Massive stimulus will increase inflation and eat away at what little wealth they have.”

Yet, inflation hasn’t been a significant factor overall in North America and Europe since the GFC despite TARP, LTRO, QE 1-3. And since Garth keeps on talking about deflation, and you think he is an “honest and decent man”, you are essentially disagreeing with him. Furthermore, the Fed hasn’t changed the Fed Funds rate in 5 years, yet bond yields have oscillated quite a bit since then. So one can’t confirm that the Fed is the one that’s moving the market (even though they could if they wanted to). Sounds like a contradiction.

4)
“They aren’t going to do the right things. They are going to do everything in their power to prop up home prices.”

“They’re not going to let the foolish debtors pay for their mistakes – they’re going to bail them out.”

Tell that to the people who are being foreclosed on by CMHC. And even worse, if the asset sale doesn’t cover CMHC’s losses, recourse comes back to bite those “foolish debtors”: http://gailvazoxlade.com/blog/?p=5835

And since the CMHC raised premiums, that’s at least one way the gov’t is making them “pay”. Sounds like you haven’t done your research.

Furthermore, as a taxpayer, I am happy that the CMHC doesn’t want realturds to disclose when a property is foreclosed on. It’s in taxpayers’ interest to stop low-ball offers. Garth reported on the changes in Feb 2013.
http://www.greaterfool.ca/2013/02/27/oh-canada/

#93 Kenchie on 10.16.14 at 11:13 pm

#39 not 1st on 10.16.14 at 8:14 pm
“So Garth, the brainwaves who built a $5 million dollar house in Regina about 5 houses down from my modest circa 2008 bung just lost 7% of their value 2 months after they moved in. Or in a numbers only a fool can understand – $350,000.”

Do you know the amount of capital they spent building it? Because for all we know, they may have spent only $1m – $1.5m in total.

#94 Ronaldo on 10.16.14 at 11:23 pm

#7 Anson on 10.16.14 at 6:37 pm

”I wouldnt necessarily call this having horse shoes up the rear, not totaly screwed maybe, but lucky, I dont think so.
“My house just sold for $10k less than what I bought it for back in June of 2008.”
Sounds like someone lost more than $10k to me. How much is the true loss after factoring in realtor fees, lawyer fees, moving expenses, painting, repairs, lost time and opportunity.”

Keep in mind that when he bought the house interest rates (if he was variable) were cut in half by the spring of 09 so he would have had huge savings in interest costs in that time period. Much greater than the $10,000 he gave up when he sold the place. However, if he was locked into a 5 year mortgage, different story.

#95 Kenchie on 10.16.14 at 11:23 pm

#49 Annek on 10.16.14 at 8:48 pm
“Help!
My daughter just got engaged and will be married in Nov 2015. Her fiancee’s parents are insisting their son buy a house this year by December. He had about 80,000 saved up and his parents are convinced it is the best time to buy in Milton. The neigbours are convincing them as well!
The parents feel that renting is throwing away money.
They have given him an ultimatum: buy a house and move out by December.
Readers: help me out to convince this family it is not the time to buy, even in Milton, Ontario.
( I can see most of his 80,000 going down the drain if he makes this move)
Any advice for the young couple?”

Tell them to see how much they can borrow at 3%, 4% and 5% using a pre-approval mortgage calculator. Unless he and/or she are in career paths that will see significant increases in wages over the coming 5 or 10 years, tell them to be patient.

Also, remind them that divorce is expensive, and debt is one of the largest reasons for divorce.

And if you want to be derisive, remind him that $80,000 is peanuts for a downpayment. And they should able to avoid paying CMHC fees before they start looking for a place.

#96 Kenchie on 10.16.14 at 11:27 pm

#55 olderthanaboomer on 10.16.14 at 8:55 pm
“I notice that Mr Marr does not attract many comments, unlike this place.
Also noted that that chap Bellavance from La Presse had interesting comment at the tail end of Power Play yesterday 15th…he seems to have really good sources..so watch it if you like, draw your own conclusions.”

Link to Power Play?

#97 ozy - the FAT LADY hasnt yet sing on 10.16.14 at 11:35 pm

is not over until the FAT LADY sings

I am not going to sell for $951,000, $200,000 in profits in 2.5 y is good $$$ but I feel those Vancouver-ite migration to TO has just started. and my house is probably 1.5 mil in there

shy sell short aka to the sharks????

#98 Capital One on 10.16.14 at 11:36 pm

#49 Annek
#*2 WO

WO – that is pretty nifty.

My go-to rent-vs-buy spreadsheet is from Blessed by the Potato.

http://www.holypotato.net/?p=1073

Some knowledge of Excel is required, but once you get into it, it really shows the Long Term Cost of Ownership of a house (vs renting and investing the downpayment plus closing costs)

CO

#99 Steve French on 10.16.14 at 11:37 pm

I think this comment section should be restricted to posts by me and Smoking Man.

And Sirth Garth, occassionally.

We’re the only blod gods worth reading.

#100 Retired Boomer - WI on 10.16.14 at 11:37 pm

CATO vs KENCHIE Film at 11.

My money is on Kenchie. While CATO is a capable blogger the posts often drip with untempered right wing dribble, often something the Cato institute for the mildly insane like to produce. While they often sound alluring, much like that used car we have often drooled over in our youth, it seldom proved a good buy over the long term.

CATO, keep writing, you do prove interesting. My hope is the alluring idealism will someday be tempered by the practicalities of a life well lived. Ah youth, why is it always wasted on the young?

#101 Kenchie on 10.16.14 at 11:39 pm

#73 Sheane Wallace on 10.16.14 at 9:32 pm
“#70 Kenchie

Listed on TSX makes them Canadian?

Who owns them, boy? How much do you have in these companies?”

1) I don’t have many individual stocks because of significant specific risk. I grew in Van and did a stint at Canaccord Genuity. Let’s just say it’s not my cup of tea to invest in these ventures. But other investors like the risk, which is fine by me. 2) Majority are based in Calgary for O&G, and Van or TO for mining. 3) Why does it matter who owns them? Are you a modern day Colbert? They are raising capital in Canada, using our system of regulations, using Canadian bankers and accountants and lawyers.

The point is Cato said regulations kill the small companies and kills competition. That’s theoretically true, but, as I provided evidence of, we still attract more start-up companies than any other nation. So obviously, there is a disconnect from reality.

#102 Kenchie on 10.16.14 at 11:48 pm

Great cartoon about ebola:

https://fbcdn-sphotos-h-a.akamaihd.net/hphotos-ak-xap1/v/t1.0-9/10678811_947676645253347_5299347798631232381_n.jpg?oh=c0673d63d85a52310d1f0f68c7bcaf82&oe=54BAFD3B&__gda__=1420776167_2dbbff97e2098d371df4cc407ed007e8

#103 whitehorn01 on 10.16.14 at 11:53 pm

You really have to wonder about the price of houses in Canada especially the 10 biggest cities. I was watching comments by an economist recently on the state of real estate and all it can take is a small negative catalyst to put it in gear, he mentioned studies throughout the world over time. All it could take is this stock market correction over the last month in North American markets to trigger the “beginning” of the sell off in real estate. The oil correction could trigger the real estate downfall in Alberta. Also, despite the oil correction, all indices have been deeply affected including the banks. Yes, most people who have investments are feeling a lot poorer this last couple of months – this could spill over into real estate and “long term” for years.

#104 Helen on 10.16.14 at 11:57 pm

No one is reads comment over 15 lines. Not even your Mom. Be concise.

#105 M on 10.16.14 at 11:59 pm

@#56-Cici

Long tubes, 32 ft. 44 ft radius of curvature. Computerized bending machines.

:)

Point is… 600 vs 3000 :) Someone wanted to stay ahead :) Way too much ahead methinks.

#106 Too Much Kenchie on 10.17.14 at 12:14 am

Right?

I don’t listen to the soapboxers.

#107 chapter 9 on 10.17.14 at 12:26 am

#49 Annek
Pack up and move to Alberta to get away from the future meddling in-laws. The house thing is only the beginning of crap to come in their lives.

#108 Exurban on 10.17.14 at 12:33 am

#72 Lee

” In researching a bit I learned the first 85000 in dividends attracts a tax liability if about 6500. Is this true? … How do the rich get away with this?”

LOL. You’ve had some replies on the technical details already Lee, so let me put it this way … Justin won’t be raising those rates either. That’s where his income is coming from. He’ll be perfectly happy to raise income taxes and maybe the GST, but he won’t be touching those dividends.

#109 Retired Boomer - WI on 10.17.14 at 12:36 am

#9 Cato The Elder (from yesterday’s post)

Yes, most people do rely upon emotion rather than logic to base their decisions (the younger the higher rate of emotion).

People are naturally resistant to change, for the sake of change. They will adapt a better technology IF it serves them better than the old ways. I still don’t own a smart phone.

We elect our representatives. Here in the 21st century they need to look good, talk well, have a ‘presence’ on video -an actor in short. Cue Reagan, cue Kennedy.

Those who listened to the 1960 debates between Kennedy & Nixon voted the winner as Nixon. Why?
Those who saw the televised debate rated Kennedy the winner. Why?

Each generation has to learn the lessons of all that came before. Survivorship bias is present here. Who reads the deleted author? Who cares of the failed ideas? Who writes history, and why?

Ecclesiastes writes (Bible) there is nothing new under the sun. Where are the “NEW” and “Different” ideas? Some things work better than others, yet all had some merit in them, right? What failed societal model would you like to implement in your world, Cato? I can assure you, it HAS been tried before.

Your paragraph on houses applies as well to cars, and other consumer commodities.

Many of the houses that were foreclosed on in the US were later sold off by the hedge funds as they found renting, or selling was nearly as profitable as they calculated. oops!
That may not have made msm news like the purchases did.

So, what did we all learn today?
Decisions made in hast are often unwise.
History books are not benign.
It is often what we ‘see’ that we believe, visual bias is real.
Hedge funds are not always wise, but had the previous owner been more financially secure that trip may not have been necessary. Apply this to Canada’s future.

#110 meanwhile on 10.17.14 at 1:40 am

It’s nearing the 7 yr mark since presales were made available at the infamous Vancity Olympic Village, and guess what? Stillnot sold out, ie real estate on Vancity not so rosy

#111 Waterloo Resident on 10.17.14 at 3:06 am

First they are going to build an actual working FUSION REACTOR next year, and ….. ( a warp drive starship a few years later ).

No, I’m not joking.
And no, I have not been drinking.
Here, read it for yourself.

https://finance.yahoo.com/news/lockheed-says-makes-breakthrough-fusion-energy-project-123840986–finance.html

http://news.discovery.com/space/private-spaceflight/impossible-space-engine-may-actually-work-nasa-140802.htm

#112 alf on 10.17.14 at 3:38 am

#19 Steve French on 10.16.14 at 7:12 pm

Peace Frog might be an even more suitable Doors song these days.

#113 Steve French on 10.17.14 at 6:32 am

I think comments on Sir Gartho’s blog should be restricted to two posters:

– myself,

– and the Smoking Man

We’re the only autodidact geniuses that are posting anything readable here.

#114 maxx on 10.17.14 at 6:54 am

#2 obviously on 10.16.14 at 6:24 pm

“and in an act of complete DESPERATION….

“The head of the St. Louis Federal Reserve Bank said on Thursday the U.S. central bank may want to keep up its bond buying stimulus for now given a drop in inflation expectations.””

And just how long can leaders allow the economy to be cannibalized before there’s less than nothing left but debt? Not long. Most of the damage is already done.

Homeowners are sitting ducks, low-hanging fruit for further tax increases, the biggest blips on the radar.

IMHO, when a purchasing decision is made, potential future tax liabilities should be taken into account, based on the fiscal health and vision of the municipality. Some are colossal, tax-wasting, vanity-project ridden losers. Those of you living in them know about failed infrastructure contracts and serial bad decisions leading to hemorrhaging rivers of tax revenue, resulting in unnecessary tax increases, year after year.

To paraphrase Teddy R., get them by the house, and their hearts and minds will follow.

#115 frank le skank on 10.17.14 at 8:46 am

#49 Annek on 10.16.14 at 8:48 pm

They need to move out (and rent), that’s the best way to deter these helicopter parents who feel the need to micro manage their adult children. Maybe they can wait for the market to crash, buy his parents house at a discounted rate and move them into the basement.

#116 Chickenlittle on 10.17.14 at 8:59 am

Sigh….Another week, another “flip” from the msm regarding RE.

Every week I read something different, yet it’s the same old story week after week: absolute garbage going for absolute top dollar.

……….

#49 Annek:

Sounds like the same ” Old European Wisdom” that I have heard over and over again.

Tell him to man up. If he’s old enough to marry then he’s old enough to figure out his finances. The old people are still living in the 50s.

I know a couple that bought in Liberty Village and they want to sell after less than a year. Apparently the shoebox is too small. I forget what they paid. Doesn’t matter. Point is they were all excited and paid my husband and I numerous condecending remarks because we rent and now they “own” something (such as it is).

#117 frank le skank on 10.17.14 at 9:02 am

– CREA admits housing can’t continue to increase.
– Manufacturing loosing ground.
– Oil prices dropping.

Seems like all of Canada’s short term economic plans are all hitting the wall at the same time.

#118 frank le skank on 10.17.14 at 9:05 am

CORRECTION: Seems like Canada’s short term economic plan (sell houses to each other) and other major sectors are all hitting the wall at the same time.

#119 Sparky on 10.17.14 at 9:32 am

My understanding about cap rates (and I got this from people who actually buy commercial and multi-residential properties and are quite successful), is that the sweet spot is 5-7% cap rate. Lower than this is not worth the risk and higher than this is suspect, usually cooked books and unlikely sustainable.

In my own experience, when someone buys any type of ‘investment’ that they expect a double digit gain yearly is that they didn’t do their own homework and bought emotionally. Then when it goes bad, they are the first to cry because someone ‘ripped them off’.

A real investor stays away from double digit returns with the majority of their portfolio, as they know it is fraught with risk. Some may dabble in it, but only with a small % of their portfolio. Kind of like buying a lottery ticket.

There will be a lot of people finding out sometime in the not too distant future that they are not investors after all.

#120 Cato the Elder on 10.17.14 at 9:45 am

Re: Kenchie

The fact that you hold up the SEC as good example proves my point of the gullibility of the people in believing regulation is good for them.

The SEC is well known to ignore rampant abuses, issue slap on the wrist fines, and only occasionally hold up a highly public figure like Madoff to justify their existence.

We shouldn’t trust the government, even Madoff has said they are running the largest ponzi scheme in history with Social Security etc. If there’s anything we should trust his credibility on, it’s ponzi schemes.

Regulators at the SEC are often former bankers, and/or they make the switch to the private financial sector after years of regulating it. Why do you think that is? It’s an indirect kickback/bribe – they are COMPROMISED, just like most regulatory bodies. Look up ‘SEC revolving door’ on google. After you spend a couple hours investigating it, followed by a couple more attempting to disprove it (which, if objective, will fail), then we can talk. See, I engage in the scientific method before I reach a conclusion – I try to disprove what I have read, I don’t just blindly follow it. You should try that too.

Given that you held up the SEC as a good thing shows me that it will be very hard to convince you of any objective truth. It is so blatantly obvious to even casual observers that it is nothing but a dog and pony show that anything else I say won’t be digestible by you.

And regarding inflation – it’s running at 10% a year. This is another demonstration of gullibility that you believe government statistics. Governments have an incentive to goose the figures so as not to appear responsible for anything harmful. Look up ‘CPI substitution bias’ or ‘CPI hedonic regression’. And don’t read government websites that discount those criticisms – what do you think, they’re going to tell the truth? This also demonstrates to me gullibility in that you are allowing government talking points to overrule your own observational skills while shopping. If you shop at the grocery store or drive a car or live in a house you can see very clearly that inflation is not low. And when prices are not rising, package sizes are shrinking, but either way, you are paying more for the product you receive.

See, I question the government. When the government publishes a figure, I ask how they arrived at that figure. When they explain how they arrived at a figure, I ask where they got the data. When they explain where they got the data, I ask who collected it. When they explain who collected it, I ask what incentive they have to tell the truth.

The last thing I do is trust an entity that has proven throughout all of history to have objective truth as the least important criteria on their list. People in power want to preserve their power – even in a democracy.

This ties in so well with my post about emotions vs logic. Like how people scrutinize the personal sex lives of politicians instead of what kind of legislation they’re passing (which is what actually AFFECTS THEIR LIVES!).

While everyone is all concerned about some guy smoking drugs, I’m looking at how much he wants to tax us – which is significantly more relevant. Smoke anything you want, if you keep honest with the public purse, you’re a much more righteous person than most. But that’s not how we operate. We would rather have a clean shaven, white smile, and nice family man that is screwing us again and again. That’s why we’re doomed.

#121 The real Kip on 10.17.14 at 10:12 am

The official that denied entry of a cruise ship in Belize over Ebola concerns should get a medal.

We need to shut down air travel into and out of Canada from all Ebola affected countries now.

http://ww2.nationalpost.com/m/wp/blog.html?b=news.nationalpost.com/2014/10/17/belize-refuses-entry-to-cruise-ship-carrying-texas-hospital-worker-who-may-have-handled-ebola-victims-specimen

#122 jess on 10.17.14 at 10:17 am

breeding grounds

http://www.nakedcapitalism.com/2014/10/will-ebola-vanquish-the-mbas-who-run-our-hospitals

antibiotic resistence
frontline.org
=====
Care Quality Commission chief’s analysis of damning report

“We have concerns about 15-minute home care appointments, and whether they can truly deliver care and support that is safe, caring, effective and responsive to people’s needs.”

The watchdog found nursing home residents lying in wet beds, surrounded by a stench of urine, with many not getting help to eat and being ignored when they called out for help.

#123 Rational Optimist on 10.17.14 at 10:23 am

#54 nonplused

“Oh and the other thing that always surprises me when I go looking at houses with a realtor is just how little money people spend maintaining or upgrading them…. Nice car in the driveway though.”

Buying a car is easy (and can be done on credit). Maintaining and upgrading a home requires thought and interdisciplinary knowledge. That’s why, for most people, it’s sensible to outsource this job to a landlord.

Re: two inches of attic insulation. I was just listening to someone explain that our elevated home ownership rate is terrible for our prospects of reducing our environmental impact. Housing is a huge part of our emissions as an economy, and those emissions are by and large left to the control of amateurs who write blank cheques to the utility company without knowing the first thing about investing in efficiency.

By the way, Smoking Man’s comment at #79 is the single smartest comment ever left on this blog.

#124 Kenchie on 10.17.14 at 10:39 am

Minimum wage debate:

http://www.bloombergview.com/articles/2014-10-16/canada-shows-minimum-wage-has-minimal-effect

#125 Rusty Venture on 10.17.14 at 10:47 am

@Bottoms_Up

Thanks for posting that link. It confirms my failing recollection that prices dropped in Ottawa following the Liberals program review. I recall a similar SFH down the street selling in 1996 for $15k less than I paid.

It was a little disheartening, but back then we didn’t look at housing as an investment, but as a place to keep your stuff…

#126 Jim B on 10.17.14 at 10:54 am

Why do virtually all RE pundits (often including you, Garth) conflate “single-family home” with “detached house”? They are not the same. A semi is also a “single-family home.” Okay, we all know the answer: it makes the numbers scarier when you ignore the (lower) prices of semis. All of which is not to say there’s no RE bubble in this country, particularly in Toronto, Vancouver and Calgary. But that point can clearly be made without this sort of obfuscation.

#127 CdnFlyer on 10.17.14 at 11:10 am

#123 Rational Optimist on 10.17.14 at 10:23 am

“By the way, Smoking Man’s comment at #79 is the single smartest comment ever left on this blog.”

It’s the only honest thing he’s said on this blog.

#128 Derek R on 10.17.14 at 11:12 am

#111 Waterloo Resident on 10.17.14 at 3:06 am wrote:
First they are going to build an actual working FUSION REACTOR next year, and ….. ( a warp drive starship a few years later ).

Here’s hoping on the fusion reactor. But even if the spaceship drive works, it’s an impulse drive not a warp drive, so no day trips to Alpha Centauri quite yet.

#129 Nemesis on 10.17.14 at 11:17 am

#ToldYaSo….

[CBC] – Exclusive: River Rock, Starlight casinos saw $27M in suspicious transactions this spring – Promise to clean up ‘dirty money’ at B.C. casinos results in little change

…”Documents obtained through a Freedom of Information request show that in three months, $2.5 million in suspicious transactions occurred at New Westminster’s Starlight Casino, and $24 million was flagged as suspicious at Richmond’s River Rock Casino.

In some cases, people arrived with shopping bags and suitcases packed full of bills in $20 and $50 denominations.

One person brought in $800,000 in twenties. Another showed up one day with $1.1 million in cash.”…

http://www.cbc.ca/news/canada/british-columbia/river-rock-starlight-casinos-saw-27m-in-suspicious-transactions-this-spring-1.2802281

#HBIC… #It’sNotABank?… #Hint:”WeLookAmazingWhileDoingIt”

[CBC] – ‘Ultra Rich Asian Girls’ in Vancouver trailer released on YouTube

…”The series is described by production company HBIC TV as following the daughters of affluent, Mandarin- speaking Chinese Canadians living in Vancouver.

“They are young independent women starting their life and careers with the newest Hermes Birken bags and YSL shoes while vying for the status of #HBIC ‘Hot Bitch in Charge’.”…

http://www.cbc.ca/news/canada/british-columbia/ultra-rich-asian-girls-in-vancouver-trailer-released-on-youtube-1.2799945

#130 Holy Crap Wheres The Tylenol on 10.17.14 at 11:36 am

Smart people know where this is going. Tails up.
__________________________________________

Thanks Garth for being so polite with your word choice. You could so easily have been brutally crude and truthful, however “Tails up” gets the point across. Do you think anyone will listen to the messangers communiqué?

Oh well c’est la vie.

http://www.youtube.com/watch?v=wRwwUZLV-IE

#131 Son of Ponzi on 10.17.14 at 11:41 am

The end?
Woke up this morning and it’s still raining in Vancouver.

#132 bdy sktrn on 10.17.14 at 11:42 am

my vote for best poster is for smokey, no make that steve french, or is it smokey, nope frenchy. jeez i can’t decide.

let’s call it a tie. SAME rating for both. SAME. both the same. no difference between steve french and smokey.

same ip’s too?

#133 Holy Crap Wheres The Tylenol on 10.17.14 at 11:46 am

#123 Rational Optimist on 10.17.14 at 10:23 am
By the way, Smoking Man’s comment at #79 is the single smartest comment ever left on this blog.

_____________________________________________

I couldn’t belive he didnt have one single diatribe!

#134 Son of Ponzi on 10.17.14 at 12:00 pm

Abondan all hope, ye who enter Vancouver!
http://weather.gc.ca/city/pages/bc-74_metric_e.html

#135 Capt. Obvious on 10.17.14 at 12:26 pm

We just got a marketing flyer from a real estate agency. In our area of Ottawa (avg single family detached in the $600s) prices in Q3 were down 9% yr/yr and days on market has been trending up all year. Prices were barely up in Q2 yr/yr.
Take that for what you will.

#136 Joe2.0 on 10.17.14 at 12:28 pm

Bullards bluff re a QE 4 paper injection and Yellens QE 4 comments re a injection – markets up 400 points.
What a pathetic lot.

#137 dosouth on 10.17.14 at 12:37 pm

Great article to read from the CBC is you want to survive the eventual fallout of all this….

Protect yourself from the makret madness

#138 Funny that on 10.17.14 at 1:02 pm

#31 Smoking Man on 10.16.14 at 7:29 pm
I don’t get today’s picture, anyone…?
———————————————

Short squeeze

#139 Nomad on 10.17.14 at 1:12 pm

Stocks.

I’m sad. Since Thursday afternoon, stocks have been going up. I was hoping to buy some TD at a PE of 12 and some NA at a PE of 8.

This is why renting is awesome. You have cash to invest during opportunities. In a short time you can see your (unrealized) gain shoot up and at the same time, increase you cash flow (more dividends). Feedback loop. More cash generates more cash.

Some feel safe investing in walls. People should feel safer being invested in hundreds of companies.

#140 Rational Optimist on 10.17.14 at 1:29 pm

134 Son of Ponzi on 10.17.14 at 12:00 pm

It’s going to be a beautiful weekend- only a sixty percent chance of showers!

#141 45north on 10.17.14 at 1:30 pm

CREA reports sales fell last month – a significant event.

A couple of weeks ago my in-laws sold their house in Toronto. Thank God! So many will be selling into a declining market.

And, as I wrote here a few days ago as oil collapsed, you really have to wonder about Calgary.

Waterloo Resident really beat me to it but here’s an article about fusion. The point is that if the projected benefits are any where close to being realized then oil will be cheaper. A lot cheaper.

Dubbed the compact fusion reactor (CFR), the device is conceptually safer, cleaner and more powerful than much larger, current nuclear systems that rely on fission, the process of splitting atoms to release energy.

http://aviationweek.com/technology/skunk-works-reveals-compact-fusion-reactor-details

#142 45north on 10.17.14 at 1:39 pm

Annek : My daughter just got engaged and will be married in Nov 2015. Her fiancee’s parents are insisting their son buy a house this year by December. He had about 80,000 saved up and his parents are convinced it is the best time to buy in Milton. The neigbours are convincing them as well!
The parents feel that renting is throwing away money.
They have given him an ultimatum: buy a house and move out by December.

“they have given him an ultimatum” him being singular, I assume that they are not both living in the in-laws house?

ChickenLittle’s : I like your advice the best : Tell him to man up. If he’s old enough to marry then he’s old enough to figure out his finances.

runners up : Former Saskie, Retired Boomer, Frank le Skank

#143 Son of Ponzi on 10.17.14 at 1:41 pm

#129

…”Documents obtained through a Freedom of Information request show that in three months, $2.5 million in suspicious transactions occurred at New Westminster’s Starlight Casino, and $24 million was flagged as suspicious at Richmond’s River Rock Casino.
In some cases, people arrived with shopping bags and suitcases packed full of bills in $20 and $50 denominations.
One person brought in $800,000 in twenties. Another showed up one day with $1.1 million in cash.”…
—————
Just another Day in The Lives of the Rich and Famous in Richmond.

#144 Ft Mac House guy on 10.17.14 at 1:46 pm

#7 Anson – I didn’t lose $10k + a ton of other hidden costs. I actually came up on top about $24k over those 6 yrs of owning that house in Fort Mac. That includes all repairs, realtor fees, lawyer fees, property taxes, etc. But the only reason i’m coming out on top is because 99%+ of all payments I made on that house were made by my roommates when I lived there and my tenants when I moved out of the city. If I had been living in there with myself (or my family) this entire time, I would have pumped more than $250k of my own money into that house.

#145 Smoking Man on 10.17.14 at 1:49 pm

#133 Holy Crap Wheres The Tylenol on 10.17.14 at 11:46 amBy the way, Smoking Man’s comment at #79 is the single smartest comment ever left on this blog.

_____________________________________________

I couldn’t belive he didnt have one single diatribe!
…………..

Been busy bro…. RE balancing.. $$$$$$

#146 Jack De Pogue on 10.17.14 at 2:01 pm

Motley Fool is an American investment letter written by two totally unqualified blowhards. Neither could find Canada on the map. We have been sending American Hedge Fund blowhards back to Pennsylvania with their tails between their legs for a decade. All have been ‘short’ on Canada…..none have any idea why Canada does not function like the USA…..and all go home less wealthy for their trouble. This is not Nevada….or any other global mudpie. We actually have a unique country here….get used to it.

The energy market has recovered over 300 points in the past two days…exactly at the time when dozens of doomsday prophets predicted the end of the world. Being up 200 points on a Friday means the panic is over…no need to sell the farm in Calgary. You can’t feel sorry for the suckers who panicked…I guess the TSX will be exactly where it was three weeks ago in another three weeks.

Two lessons have been learned…..there is no crash…only the suckers who buy into the hype and hear nothing but the noise when a train rushes by.

#147 young & foolish on 10.17.14 at 2:06 pm

52 young & foolish

If you don’t own, then you rent … but either way you pay for a roof over your head. It’s what makes RE so confusing for people. And it’s really not such a straight forward decision either. Depending on where you live, housing options can vary widely. It’s not a one size fits all option.

It’s not that complicated. Subtract rent equivalency, add in mandatory expenses such as property tax and maintenance, so at least you’re comparing something resembling apples to apples, and adjust for horniness and “pride” of ownership premium.

Oversimplification? I think so. Sometimes suitable rentals are not available. And for some people owning does make a significant quality of life difference. Think about cars for example. If everybody only bought on value alone, we would all be driving Corollas.

#148 Kenchie on 10.17.14 at 2:09 pm

Ed Clark’s recommendations to Ontario on the Beer Store and Electricity companies:

http://www.theglobeandmail.com/news/politics/ontarios-beer-store-shouldnt-get-monopoly-for-free-td-bank-ceo-says/article21144390/#dashboard/follows/

http://news.nationalpost.com/2014/10/17/government-panel-recommends-ontario-keep-lcbo-public-but-allow-12-packs-wow/

#149 Kenchie on 10.17.14 at 2:12 pm

Lol @ Cowtown Condo owners

http://www.theglobeandmail.com/report-on-business/economy/housing/unsteady-oil-markets-prompt-fears-calgary-housing-will-follow-suit/article21138452/#dashboard/follows/

#150 Holy Crap Wheres The Tylenol on 10.17.14 at 2:15 pm

#132 bdy sktrn on 10.17.14 at 11:42 am
my vote for best poster is for smokey, no make that steve french, or is it smokey, nope frenchy. jeez i can’t decide.
let’s call it a tie. SAME rating for both. SAME. both the same. no difference between steve french and smokey.
same ip’s too?
_____________________________________________

I can’t really read either one of them without my brain hurting. Unfortunately I am a schooled one whom apparently follows the rest of the sheeple.
Could be Steve Frenches pseudonym is Smoking Man, they sound the same when you enunciate their dialect.

Je n’ai vraiment pas donner une merde, ils sont les mêmes chats !

#151 Holy Crap Wheres The Tylenol on 10.17.14 at 2:17 pm

If I were in oil I would be shitting myself right now. It’s so dam close its just around the corner…………………

http://www.reuters.com/article/2014/10/15/us-lockheed-fusion-idUSKCN0I41EM20141015

#152 Smoking Man on 10.17.14 at 2:32 pm

http://www.zerohedge.com/news/2014-10-17/how-recognize-them-visual-history-most-popular-market-tops-and-bottoms

For those of you safisticats that require a bit more than Camel, Toe and Batman…

#153 devore on 10.17.14 at 3:30 pm

#111 Waterloo Resident

First they are going to build an actual working FUSION REACTOR next yea

It’s been a while since we’ve seen something in this field from parties more credible than the “Italian scientists” we hear from all the time. The deutrium-tritium reaction is the easiest one to get going, but it does produce spare subatomic particles that make the process radioactive and break down the containment vessel. Other source materials are more difficult, but they produce stable elements and no radioactivity.

Although we know in theory fusion is possible, and in practice there has been some success, the real challenge is making it energy positive and economically viable.

#154 Funny that on 10.17.14 at 3:40 pm

Garth it’s been over 3 1/2 hours since you have updated the comments. Don’t you think maybe you are taking your paying job too seriously?

#155 Bill Gable on 10.17.14 at 3:50 pm

#18 – Cato is echoing the exact same worries I have.

“Anything to get elected”, and so the prudent will be screwed, to bail out the folks that have been driving leased Beamers and traveling on their HELOC. (*While we have been trying to make a future for ourselves, and so we invested and lived like normal folks).

That is exactly how civil disobedience is given credence. Wars have started over less.

One small point and I am not being snarky, because spelling is not my long suit – but – it’s PONZI not PONZY.

The Ponzi schemes that are currently raging in Central Banks around the world are staggering.

Fractional Reserve banking, my foot.

LEVERAGED 60-1 and some are 75-1. That is terrifying.

Take a look at French Banks and Spanish Banks numbers and they are just jaw dropping.

#156 Calgary on 10.17.14 at 3:53 pm

This post has inspired me to sell my mortgage in Calgary and begin renting for more money than the mortgage and zero rent controls.

#157 devore on 10.17.14 at 4:23 pm

#147 young & foolish

Oversimplification? I think so. Sometimes suitable rentals are not available. And for some people owning does make a significant quality of life difference. Think about cars for example. If everybody only bought on value alone, we would all be driving Corollas.

No oversimplification. Hence “horniness and pride of ownership premium”, which is higher in places where, for example, good rentals are scarce. How much is it worth it to you to own your place? For me, very little, because I have plentiful rentals available matching my criteria, rents are low, and I am interested in impressing no one with owning a $500,000 shoebox. Owned, been there, done that, sold, no thanks. A family of 5 in Calgary might feel differently, but perhaps not so differently as to pay double to own vs rent, as almost all who buy do in Vancouver.

#158 Nosty the Snugglebombed Vladman on 10.17.14 at 5:08 pm

SMan — From the link I emailed you a week or two ago, that the Rothschilds will end up pocketing US$600 bln. from this ebola tripe (the withdrawal of money), plus it will help the Rockefellers and Bill Gates with the depop. agenda, this is where ebola was made (the US DoD). Look who is taking Africa’s resources. Surprised? Nah. Cheers!

#99 Steve French on 10.16.14 at 11:37 pm — “We’re the only blod gods worth reading.”

Agreed. Good call!

#159 Spectacle on 10.17.14 at 5:10 pm

Mac House guy on 10.17.14 at 1:46 pm
#7 Anson – I didn’t lose $10k + a ton of other hidden costs. I actually came up on top about $24k over those 6 yrs of owning that house in Fort Mac.

That includes all repairs, realtor fees, lawyer fees, property taxes, etc. ……………..
…………..If I had been living in there……….., I would have pumped more than $250k of my own money into that house.
*******************************
Re: Mac House Guy. Thank You for responding with that qualifier. Confirmed my exact thoughts, and now imagin how often this same process has and will repeat itself with vigorous over the next cycle!

In my daly occupation, I see bank employees , mortgage financiers, & financial support staff, all much more indebted with shining new condos. But they bought at peak Vancouver prices.

Thanks G , & Mac House for this snapshot.
*****************
Ps: fun fact.
There is An “interesting” Casino ( oops I meant ginseng bar ) a street away from the River Rock in Richmond BC. The guy pulling cable into the private building, no permits, said he’s seen hotels with far less High Speed data cable installed………..imagine the $ running through there into Macau. CRA, Hello?? : )

#160 Doug in London on 10.17.14 at 5:14 pm

@Holy Crap Wheres The Tylenol, post #151:
There have been promises that economic fusion is “just around the corner” for many years so I’m not shitting myself about the future of oil or worrying about my investment in XEG yet. Even if the first units are on the market in 10 years they won’t be cheap. When the first prototypes fission reactors were being built, the idea was going around it would produce power “too cheap to meter”. Anyone who predicted that obviously didn’t foresee the outrageously expensive rehab of units at Pickering Generating Station. Even if these fusion units are viable, it will be many years before there are enough of them to make a difference, and in the mean time there will still be a lot of fossil fuel burning vehicles running around. Actually, I hope you’re right about cheap fusion, it may be our best weapon against climate change.

#161 devore on 10.17.14 at 5:26 pm

#100 Retired Boomer – WI

My money is on Kenchie. While CATO is a capable blogger the posts often drip with untempered right wing dribble, often something the Cato institute for the mildly insane like to produce.

Cato is an ideologue, they’re important because they generate novel ideas, but it is just as important to have lots of influential people who are not dogmatic, because we need to implement practical ideas, regardless of source or -ism allegiance.

#162 fisheman on 10.17.14 at 5:27 pm

Russian freighter adrift off Tasu reported 15 k’s off Tasu. Big sou’easter but tide sets you straight in to the cliffs. its going to be close for the big American tug Foss to get there on time. I figure drift in of 1.2-1.5 clicks/hr. and 12 hours from Rupert, the hammers down & they gotta buck a 20 ft. sea. those tugboaters will be earning their money today. One thing is there’s no breakers offshore, you got 30 fathoms of water a couple hundred feet from shore. if that thing hits you can kiss your pipeline to Kitimat goodby.

#163 Godth on 10.17.14 at 5:40 pm

#151 Holy Crap Wheres The Tylenol

Yeah, the latest technological Saviour! Oh, maybe not…again.
Scientists Are Bashing Lockheed Martin’s Nuclear Fusion ‘Breakthrough’
http://www.businessinsider.com/scientists-bash-lockheed-on-nuclear-fusion-2014-10

#164 rainclouds on 10.17.14 at 5:40 pm

@#156 Calgary

Sarcasm noted, Some folks remember that dessicated, treeless, “city” empty out in the early 80’s like explosive diarrhea

No doubt it’s different now………….

#165 bdy sktrn on 10.17.14 at 5:45 pm

#1.ITER fusion reactor (europe) US$50 billion finish construction phase in 2019

#2. NIF (US) 3.5 billion – lasers

In 2012 NIF achieved a 500 terawatt shot – 1,000 times more power than the United States uses at any instant in time.

the heavies in fusion.

our own homegrown lightweight 55M http://en.wikipedia.org/wiki/General_Fusion – much smaller reactor but still several flatbeds worth.

this latest lockeed thing seems like a jump of too far too fast – smells fishy. further, since there is no mention whatsoever of how such a tiny system could deliver the massive amounts of energy needed to initiate any fusion, i remain highly suspect on this one. lockeed has it splashed all over their site, however. and they do know a thing or 2 about that tech stuff.

#166 Joe2.0 on 10.18.14 at 12:31 pm

US housing regulator head (FHFA) Mel Watt proposing housing loans to those with less then perfect credit scores.
Also is suggesting that borrowers can put down less then 3% of the purchase price.

Wash rinse repeat.
Devalue currency.

#167 Joe2.0 on 10.18.14 at 9:24 pm

Steve
You sound like you need a hug bro.
Type-o should of read 1trillion.
It would take aprox 36 thousand years to count to 1 trillion.
Let me know how you make out.