Supply & demand

SO MANY DOGS modified

So the split starts. This week the Toronto Real Estate Board told the huddled masses (freezing their derrieres off) that housing in December continued its advance, while in Calgary the needles went the other way. GTA realtors say prices are 7% higher than this time a year ago, while in Cowtown (so far in January) they’re lower by 6.7%.

Toronto sales grew 8% in December over the same period a year ago. In Calgary they’re shrinking by 24%. And while listings in Toronto are a key reason why prices stay high, in Alberta’s oilgopolis new listings have jumped 10% while the total number of properties for sale is 43% above that of last year.

Housing is all about supply and demand, of course. Both are heavily influenced by emotion, which is a subtle blend of fear, greed, hormones, nesting genes and what the boys on your hockey team think. People want houses when they feel they’re good investments, which means when they see everybody else buying and prices rising. They also need stable incomes and confidence the world won’t be a worse place in six months than it is today. Along with crude, those key factors are fading in Alberta .

In Ontario, the opposite. Cheap gas puts a lot of money into people’s jeans – an estimated $15 billion this year across Canada if prices stay at this level. Cheap oil, which costs jobs in the West, fuels factories, homes and offices more economically in the East. This is akin to a significant tax cut, and even though it whacks the overall economy, it sure shifts wealth in a new direction.

As for listings, nothing surprising. When markets suddenly weaken, like now in Calgary, people rush to market for two reasons. Either they’re trying to cash in on recent gains in house prices, figuring there must still be a greater fool  to snare. Or they’re up to their pits in debt and realize disaster looms.

Conversely, when homeowners think prices and sales are robust, they don’t sell for one of two reasons. They’re greedily hanging on for more, or they think they won’t be able to buy again. In fact, most people offloading property in this kind of unstable and emotional marketplace would never pay the price they’re asking. But they’re convinced some other sucker will.

Well, the real estate market in 2015 will not be for the faint of heart. Many markets (Halifax, Regina, Montreal) are morose. 604 and 416 are, like me, mature but fetching. Alberta’s burgs are entirely volatile. Everywhere, Canadians took on substantially more debt in 2014. They put even more of their net worth into a single asset. They saved and invested a miniscule portion of their incomes. And in so doing, they universally increased their financial risk.

Oil is shocking part of the country, while it benefits another. The lower dollar will have an inflationary effect everywhere, even while falling oil deflates half the economy. And it’s certain now, after the Fed report on Wednesday, that interest rates will begin their ascent in about 100 days. Of course, nobody on your street believes that. This’s what will make the year so damn interesting.

Meanwhile in Toronto, this is what the realtors say: “While home prices certainly increased substantially in 2014, the purchase of an average priced home remained affordable, in terms of the average household’s ability to comfortably cover their monthly mortgage payments.” The average detached house in 416 costs about $934,000. To ‘comfortably’ afford that you need to earn twice the average GTA salary. Now just imagine what a few interest rate increases over the next two years will do – especially if oil prices eventually recover to levels of six months ago.

So this pathetic blog clings to its mantra of diversification and balance. If you don’t have that, you have risk. This includes keeping the bulk of your net worth in any one asset class, whether its stocks, government treasuries or a house in Dunbar.

Interesting that plain-talking Van realtor Sam Wyatt is telling his clients there’s now a direct link between home prices in the tony Westside, where he toils, and whether or not the Americans are engaged in central bank stimulation.

“The Vancouver real estate market has been the unintended beneficiary of a gargantuan influx of money into financial markets thanks to the Fed,” he says. “However, rest assured that the Fed does not worry about whether or not house prices rise or fall in Vancouver.   The obvious question for me is:  what is going to happen now that QE3 has ended?

“My own sense is that if the US economy does well, that Vancouver real estate will suffer and that if the US economy does poorly that Vancouver real estate will prosper.  My rational is this:  if the US economy does poorly there is a strong probability that the Fed will introduce yet another round of stimulus.  If history serves us well, then Vancouver house prices will probably rise.  If, on the other hand, the US economy does well, then there will be no reason for the Fed to intervene in financial markets and Vancouver will be left to its own devices.”

Of course, we know the answer to this. The Fed won’t be stimulating. It’ll be contracting. Monetary policy will become more restrictive, which means a rate hike by the Spring, and a few more after that, as America booms. Not only does the Fed not care about Vancouver, it doesn’t actually care much about Europe or Russia, either.

You’ll be surprised what happens to the supply-demand equation across the country this year. It’s so exciting, And it’s only January 7th!

What Workopolis says you need to earn to buy in these places:

Vancouver
Average price: $819,336
Monthly mortgage payment: $3,570
Property tax: $251
Income required: $147,023

Calgary
Average price: $465,047
Mortgage mortgage payment: $2,026
Property taxes: $236
Income required: $88,578

Edmonton
Average price: $365,520
Mortgage payment: $1,592
Property tax: $244
Salary required: $72,617

Regina
Average price: $331,161
Monthly mortgage payment: $1,443
Property tax: $378
Income required: $72,028

Saskatoon
Average price: $349,322
Monthly mortgage payment: $1,522
Property tax: $366
Income required: $74,546

Winnipeg
Average price: $270,605
Monthly mortgage payment: $1,179
Property tax: $274
Income required: $58,235

Ottawa
Average price: $357,887
Monthly mortgage payment: $1,559
Property tax: $336
Income required: $74,820.28

Toronto
Average price: $587,505
Monthly mortgage payment: $2,560
Property tax: $354
Income required: $113,009

Montreal
Average price: $344,273
Monthly mortgage payment: $1,500
Property tax: $237
Income required: $68,884

Halifax
Average price: $264,447
Monthly mortgage payment: $1,152
Property tax: $266
Income required: $56,929

163 comments ↓

#1 Ontario's Left Coast on 01.07.15 at 8:27 pm

First! Snow day up on Lake Huron. Also, glad a took Garth’s advice and bought a small position in REITs… Nice pop in Dream Office REIT today!

#2 Oil sands are finished. Alberta is finished on 01.07.15 at 8:28 pm

Alberta RE will be the next Detroit where you can buy a house for the price of a car.

http://globalnews.ca/news/1761096/most-of-canadas-oilsands-must-stay-in-ground-if-world-to-limit-global-warming-report/

#3 $30 oil here to stay on 01.07.15 at 8:31 pm

Look for at least a 70% drop in RE in Alberta and 30% or greater in the GTA. Realtors can spew their drop out of high school insight on world events but who cares what a drop out has to say. Alberta is toast and the hit to the rest of Canada will be felt.

#4 rk usa on 01.07.15 at 8:33 pm

those workopolis prices vs incomes will make you house poor

#5 Yuus bin Haad on 01.07.15 at 8:40 pm

Cheap gas saves people from spending that extra money they didn’t have in the first place.

#6 bigtown on 01.07.15 at 8:41 pm

Gas in Myrtle Beach, South Carolina is $2.05 per gallon. You can buy a good bottle of Australian wine for $2.00. The beach is cleaned and pampered daily and it sure is pretty. There is no traffic.

#7 Bob on 01.07.15 at 8:43 pm

The axe fell today in my department. Large job cuts happening in Alberta…just no public announcements. Thankfully I still have a job.

#8 Retired Boomer - WI on 01.07.15 at 8:45 pm

Interesting price averages. Worse, calculating the payments, income taxes, and payroll taxes what are the buyers going to live on?

Hey, I am a rather “high maintenance” type guy, and there is no room in this calculus for LIFE as I have grown accustomed to living it. Beans and Rice is no diet for any body less so for a geezer, or one approaching geezerdom.

2015 will indeed be interesting, so many changes already in a mere week! Still freezing our noggies off here in the mid-west fly-over country.

Never take your buying advice from a chart, or a salesman, or worst of all -that you can ‘afford’ the monthly payment.
I get a chuckle from the RE promoters always refacing a PIG for the next screenshot. times never change, only their circumstances.

#9 Ronaldo on 01.07.15 at 8:46 pm

So what these average prices tell us is that Vancouver would be affordable with Montreal and Regina house prices since Vancouver’s average income is half what is required to be able to afford a house at current prices there. Interesting.

#10 espressobob on 01.07.15 at 8:50 pm

Who would believe oil could sink below $50 a short while ago? So why would the herd think interest rates will ascend?

#11 Robin on 01.07.15 at 8:53 pm

Wondering if the almighty Garth has any words of wisdom to offer on Fixed vs Variable mortgages…

Or even more specifically, whether Dr. Milevsky’s analysis (http://www.advisor.ca/images/other/ae/ae_0208_mortgages.pdf) still holds true (or as true) today.

#12 Happy Renting on 01.07.15 at 8:53 pm

“Mature but fetching.”

I vote this to be today’s phrase stolen for single blog dogs’ Match.com profile (after yesterday’s “enormous plethora of consumptive power” line.)

#13 Saskatoon-Living on 01.07.15 at 8:54 pm

DELETED

#14 Terry on 01.07.15 at 8:54 pm

That’s insanity for average prices across Canada????

Those average home prices are at least 50 to 70 percent overvalued!!!!

There is nothing special about living in Canada other than everybody from the Sellers to the Realtors to the Main Stream Media and finally Organized Real Estate hoodwinking everybody into paying these ridiculous prices for poorly built housing.

Get over yourself Canada your NOT that special!

#15 Nemesis on 01.07.15 at 8:57 pm

Yikes! Puppies!

Ooops…

#16 zedgt87 on 01.07.15 at 9:00 pm

Garth, your mistaken about the US economy.
Cheers

#17 Linda on 01.07.15 at 9:04 pm

So inflation due to a rising dollar while deflation occurs due to falling oil – it sounds like it should balance out but something tells me that won’t be how it works.

#18 john duffy on 01.07.15 at 9:07 pm

Today, we are all “Russians”.

http://www.zerohedge.com/news/2015-01-07/economic-terrorism-against-russia-intensifies

#19 will on 01.07.15 at 9:09 pm

the whole concept of real estate is a scam.

#20 james on 01.07.15 at 9:10 pm

Why is workopolis not using the traditional 3x income affordability calculation?

The argument is that anything over 3x strips people of their savings, including retirement savings.

#21 Arfmooocat on 01.07.15 at 9:11 pm

The Edmonton-region housing market will slow down but still hold steady in 2015 despite an ongoing collapse in oil prices, says the Realtors Association of Edmonton.

http://www.edmontonjournal.com/business/commercial-real-estate/Realtors+forecast+slower+steady+2015/10709361/story.html?__lsa=44f7-a630

Of course realtors could never say anything worse than steady. lol

#22 Supply & demand | Realties.ca on 01.07.15 at 9:11 pm

[…] Source: http://www.greaterfool.ca/2015/01/07/supply-demand-2/ […]

#23 Freedom First on 01.07.15 at 9:18 pm

I was born in the east and lived in 4 different Provinces in my life, and currently in Alberta. I feel exactly like Garth, as this is such an exciting time to be living in Canada, and especially in Alberta right now.

It is amazing about how people behave, as when it comes to money and RE, people are the same world wide. The Japanese were financially screwed by their love of RE, the Europeans were financially screwed by their love of RE, the Americans were screwed by their love of RE, the Canadians are now leveraged to RE at a level that now has the whole world laughing at us for having the same ignorance and arrogance they now know they were also guilty of. Canadians disregarded all of the warning signs given to them by the whole world, and which Garth has been highlighting on his Blog every step of the way. Yes, arguing with insanity is like peeing into the wind, but I have to hand it to Garth, as there is people who regularly post comments here thanking Garth for saving their financial a$$et$. They know they have dodged a bullet. Unfortunately, many can’t see the bullet coming. They are different.

#24 pravchaw on 01.07.15 at 9:20 pm

1. A decline in the price of gasoline induces people to drive more, increasing the demand for oil.
2. A decline in the price of oil negatively impacts the economics of drilling, reducing additions to supply.
3. A decline in the price of oil causes producers to cut production and leave oil in the ground to be sold later at higher prices.
In all these ways, lower prices either increase the demand for oil or reduce the supply, causing the price of oil to rise (all else being equal). In other words, lower oil prices – in and of themselves – eventually make for higher oil prices. This illustrates the dynamic nature of economics. (from Howard Marks – Lessons of Oil).

Enjoy the low oil prices while you can (and sell the over priced 416 condo). It ain’t gonna last.

#25 bdy sktrn on 01.07.15 at 9:22 pm

#6 bigtown on 01.07.15 at 8:41 pm
Gas in Myrtle Beach, South Carolina is $2.05 per gallon. You can buy a good bottle of Australian wine for $2.00. The beach is cleaned and pampered daily and it sure is pretty. There is no traffic.
——————————–
sounds nice. a family vac may be in order. any downsides?

#26 David on 01.07.15 at 9:31 pm

If the current contagion were confined to Calgary city limits and a few Bay Street hedge fund offices selling junk bonds things might not be so bad.
All of us should be pleased to know that our national widows and orphans fund aka CPP had a place at the table.

http://wolfstreet.com/2015/01/07/oil-bust-bloodletting-projects-cancelled-layoffs-ripple-to-other-areas-default-hits-private-equity-and-pension-funds/

#27 Obvious Truth on 01.07.15 at 9:31 pm

Eric the star bnn energy dude told us today that every producer in the oil sands will pack up shop at this price. Can’t see why it goes much higher if any. World doesn’t need the Canadian barrels.

These oil companies can’t raise money and are producing at a loss. Forget the capex announcements. That was token. Just watch as analysts get reports ready.

Nobody in canada escapes this. O and G along with FIRE are too big.

We have become uncompetitive. It’s serious stuff.

#28 epr on 01.07.15 at 9:35 pm

Having just finished up three years in Calgary in 2014, people either have huge obscene amounts of money, or up to maxxed out with debt.

#29 gtrz4peace on 01.07.15 at 9:42 pm

It would be fun to see realtors get their comeuppance. We are West Van residents, with more equity than mortgage, seeking to move into a smaller home (we like having our own house plus have some “special needs” in terms of home setup). So renting does not interest us.

We found a home nearby we were very interested in, but because we refused to put our house up for sale before the owner even agreed to meet us price-wise, and the owner did not want a Subject To Sale, the realtor just dropped the ball in spite of multiple calls and emails asking them to question the seller on price so we could list our home immediately.

We got exasperated and spoke to the owner ourselves about whether they would consider our price (a 5 minute drive) and then emailed the realtor the owner’s answer (no).

The realtor had not had the common courtesy to email back and tell us — that there was an accepted offer on the house! So we wasted our time on this needlessly.

The realtor became very angry and huffy as if we had personally slighted them and threatened us! How dare we actually speak to the home owner who lives 5 minutes away (and we know many of the same neighbors).

People are free to contact whomever they wish — and good service of a potential prospect does not include ignoring them on time-sensitive issues.

We can only hope people like that get a little life shock, but they are all millionaires now here, laughing all the way to the bank.

#30 Balmuto on 01.07.15 at 9:49 pm

“And it’s certain now, after the Fed report on Wednesday, that interest rates will begin their ascent in about 100 days.”

All the Fed indicated was that the earliest possible timeframe for an increase would be late April. That’s the earliest, not the latest. If inflation remains below target between now and then the rate hike isn’t happening.

#31 ANON on 01.07.15 at 9:50 pm

Will the supply of credit, or the demand for credit dry off first? One feeds into the other…maybe it is unimportant. But my bet is no one has control of the rates. The Fed might front-run the inevitable rise by loud proclamations, but it cannot and will not raise the rates willingly.

#32 Smoking Man on 01.07.15 at 9:56 pm

I agree with Garth, Fed will probably raise the over night rate. Currently at. 0.25% In Canada we’re at 0.75%

So that gives Prozac lots of time to sit on side lines.

Canada won’t get a spike till trade balance is in the positive for 2 quarters.

Plus bond yields, those things that fund fix rate mortgage, at near record lows.

Cowtown, it doesn’t look good. But I don’t know herd so I could be wrong on that one…

Anyone check out W6..how long have I been telling you to buy here.

I might sell, this spring then head south for ever.. Finally kids are self reliant, there business growing.

Pops is the only anchor, although he’s got dementia, out there big time.. I can feel his sadness, but he can’t articulate about mom, it’s starting to take its toll on him..

#33 omg the original on 01.07.15 at 9:56 pm

#28 gtrz4peace
The realtor became very angry and huffy as if we had personally slighted them and threatened us!
—————————–

There are good agents out there – but none of them are worth what they make on commissions.

I ALWAYS assume that I will be the one learning about the market, watching the MLS, and pushing to get showings. Of course the agent will write the offer for you but even with that you have to know what you are doing as they do make mistakes.

Really all the agents do is get you access to the MLS and that hopefully will change over the next few years.

#34 omg the original on 01.07.15 at 10:18 pm

HOUSE PRICES – SLIPPERY UPWARD BUT STICKY DOWNWARD

Somebody posted a link to a op-ed piece in the Halifax newspaper yesterday. The author complained that even though there seemed to be a 16 to 1 seller to buyer ratio prices had barely moved down in Halifax.

This illustrates a classic behavioural economics principal. PEOPLE SIMPLY DO NOT LIKE TO LOSE MONEY ON AN ASSET.

Prices are very slippery upward as we have seen in some Canadain markets. The euphoria of making money on your house and the fear of being left behind by the market conspires to ratchet prices up quickly.

On the other hand in markets where there is an oversupply prices are sticky downward. They simply do not want to go lower. People hate to lose money, even if its just on paper (damn I could have sold my house for $50K more last August). So rather than take a loss, people pull their houses off the market and wait. Often while they wait the market softens more.

So unless we have a major catalyst like they had in the US during the GFC I think we are in for a decade or two of a slow grinding correction in Canada.

And its likely that it will be a correction in real dollar terms rather than nominal dollar terms. Overall over the next 20 years a house in YVR or TO will just end up having been a crappy investment.

Of course if we have rapid and meaningful increase in interest rates or a sever recession in Canada (not just regionally) things could get interesting. But that is unlikely anytime soon.

WHAT TO DO? – just rent and save your money for other things besides being married to a money pit.

#35 batt519 on 01.07.15 at 10:23 pm

Happy New Year to all but especially to the host.

Rates will not be rising in America this year. An unprecedented disaster will unfold if that were to occur. Instead we will see a new QE. Probably by another name, Obamnomics?
Highly leveraged home ‘owners’ are going to receive a lesson this year and next in this country. It’s a good time to practice family law, business should boom the next few years…
Oil will not be too low for an extended period. Keep your eye on the white metal it will be the signal leading the charge.
Regards.

#36 Nemesis on 01.07.15 at 10:26 pm

#JustForGrievin’Smokin’MenWhoseFathersAreFading….

http://youtu.be/NnLzqZFODjs

[NoteToSmokingMan: ComicRelief: “The One With The Capacity for AbstractThought”…. http://youtu.be/drvaZz3FWOI ]

#37 TurnerNation on 01.07.15 at 10:27 pm

Went on a date with a Mortgagetress. All in the purpose of market research – assessing depth and liquidity in this market.

#38 boopsie on 01.07.15 at 10:36 pm

#25 David

Myrtle Beach
Wed eve -4C
Wed overnight -7
Thurs morn -6
other than that….

#39 devore on 01.07.15 at 10:40 pm

#23 pravchaw

1. A decline in the price of gasoline induces people to drive more, increasing the demand for oil.

How does it induce people to drive more? Anyone you know taking the scenic route to work or grocery store suddenly? Are Sunday drives a thing again?

#40 Washed Up Lawyer on 01.07.15 at 10:48 pm

Where is everybody tonight? Watching the Leafs game?

New business idea for me. With the threat of the debate over climate change shuttering the oil sands, hire a bunch of out of work Environment Canada scientists and start a consultancy called “Ye Olde Deniers Shoppe” (Est. 2015). Prospective clientele are Imperial Oil, Shell, Suncor, Syncrude, CNRL etc. and a flyer on Bob’s Fracking & Drywall Ltd.

Serious coin is available.

#41 mr.pleasant on 01.07.15 at 10:48 pm

Sorry, I don’t buy the story that crashing oil is a net gain for parts of Canada. The oil industry supports so much growth, investment, and profit in Canada that removing it will drag the entire country into recession, some parts sooner than others.

#42 Steve on 01.07.15 at 10:49 pm

#32 omg the original

I agree with the statement that realtards are beyond redemption. However…. When we were desperate to sell our hovel a real estate agent was the best choice. Here’s why. The guy I used was a gritty smoker, a resident of our slummed out neighborhood. He understood the grease stains on the kitchen counter, and the seven foot dandelions on the front lawn. I fed those plants nothing but monoxide and antifreeze for thirteen hard years. I’m a hard core grease monkey, a pinstriper and a hotrodder. I’m 250 lbs of bald white trash. I needed a kindred spirit He was my champ, my prize fighter. He talked trashy and dirty and foul and I owe that maniac my left leg. He got us the hell out of hell at a profit. I feel for the suckers that sprung us, but hey, they’re fricken adults. Do the math. I hired a princess to flog that dump. She wasted two years trying to pose it like it was caviar to people who could see it was fish eggs. My Boy worked like a starving charlatan. Broke his back. Pushed that turd so deep in the buffing wheel that it blinded the MLS with its intense sheen. I never met a man so cut for his trade. I just set back and watched him work. Right
Man for the job. Sometimes it pays to hold hands with the devil. It’s survival for gods sake!

#43 Smoking Man on 01.07.15 at 10:51 pm

Alcohol and writing.

I don’t know how many of you out there took a stab at writing Fiction, developing rich characters, speaking their lines in public, passers bye think, is weirdo taking to himself..

But the worced thing you can do is write dialog and scenes of the bad guy in your story, then go out in public, get JD black out drunk while thinking about the next sentence.. AL of a sudden, your in the story, your the bad guy. And it’s live in real time.

O boy, I’ll be paying the price for that story..

No chance in forgives, or even, how do you explain this..

That wasn’t me, it’s a character in my book. Damn

I’m doomed..

Life is all about walking through fire.. Not avoiding it..

#44 ok - Toronto spring - a gas fire on 01.07.15 at 10:56 pm

ok, so Ontario will be booming for next 3 years. And the low dollar is inflationary. AS Expected. How does it bode for Real estate in Canadian top city?

Toronto spring – another year after year after year gas fire, it’s 20-30% normal for some areas? or it’s going to be 50% this year

#45 Garth's proofreader on 01.07.15 at 11:03 pm

“a rate hike by the Spring, and a few more after that, as American booms.”

as America booms

#46 Je suis Charlie on 01.07.15 at 11:08 pm

World events like today present yet another type of shock that can and will affect global economies and yes, our real estate bubbles as well.

Terrorist attacks in Ottawa, Australia and France within two months and a bit should truly shock us. Major anti-Islamist marches in Germany too – want to bet there will be more? (Boy, the PQ election losers must be wringing their hands – their awkward legislation aimed at undermining Muslim extremists may start to look ahead of its time)

Tonight on CNN, Maajid Nawaz, a self-described former Muslim extremist and current Muslim believer, eloquently described the problems with Muslim cultures in the west. He talked of the “vacuously literalist” interpretations of the Quran that fuel such attacks as today. On the same show, Aayan Hirsi Ali added that the prophet (no caps, that’s my freedom of speech choice, thank you) can simply not be taken as a moral guide in the 21st century. Even more so, Nawaz pointed the finger directly at Muslim people living in the west for their silence and implied complicity in events like today’s.

https://twitter.com/maajidnawaz

As he said, after the Australian attack, there were many people working hard so that innocent Muslims would not be targeted for revenge or hatred – the “I’ll ride with you” hashtag campaign took great strides to comfort Australian Muslims affected by any possible backlash and social isolation.

http://www.huffingtonpost.com/aimee-chan/ill-ride-with-you_b_6326376.html

And in his words, after attacks like today in Paris, we need to see Muslims in the west taking up a similar cause of reassurance to their fellow western citizens.

But there are no hashtag campaigns coming from Muslims in the west.

Only crickets.

Time will tell, we can be patient, for a while.

But this is looking like we are heading for huge trouble and social upheaval if that does not change.

Those who think that real estate can be saved by mass immigration might want to reflect on this.

Real estate bursting will be only one part of economic chaos, terrorism and war the way this is headed.

#47 #1 is Time on 01.07.15 at 11:09 pm

#15 Zedgt87

Garth, your mistaken about the US economy.
Cheers

What do u back this comment up with? Garth backs his opinion up with facts. He is SVP at Raymond James, past Revenue Minister of Canada. His wit and consistency are exceeded only by his rugged manliness. And You?

#48 Sponge Rob on 01.07.15 at 11:09 pm

#3
This is nothing that wasn’t planned for in the oil patch. In 2008 oil prices went from $150 to $35 in 6 months. It took 20 m0nthsto get back over $100. After all that and the ensuing global financial crisis guess what the effect on Alberta real estate was. Zero. Nada. Zilch.
This is nothing so far. Like I said before. It’s way to early for an anti Alberta touchdown dance.

#49 Andrew Woburn on 01.07.15 at 11:16 pm

#156 Mark on 01.07.15 at 11:21 am

Some of the highest rates of debt growth, on a cohort basis, has been amongst the seniors and the almost-retired crowd. So I would approach labelling individual groups with caution. And if the implication if that todays under-40-year-old crowd is any less intelligent than in the past, I would implore you to cite data for such than merely making a baseless and rather inflammatory claim.
==========================

Every generation is stupid in its own way. My parents were part of the war generation, now often seen as the generation which exemplified prudence, thrift and family values. These sober souls with the buttoned-down minds were the people who launched the consumer debt revolution so they could finance two-ton pastel and chrome land yachts to commute to angelstone fronted villas in the suburbs, often after two or three martinis.

When I am tempted to criticise younger generations for their bad plastic habits, I realize that I would have done just the same if anyone were stupid enough to lend me that much money and so would my parents. I suspect the real difference is that modern financial engineering has created structures which make the people who actually pay their debts to recompense lenders for the defaults of those who don’t. The result is more people get more credit than they can afford.

#50 RealistvsExtremist on 01.07.15 at 11:26 pm

The only thing not going to go down in this era of deflation is Govt and Taxes. Just watch. And it’s going to piss off allot of people sitting on the sidelines……

#51 RealistvsExtremist on 01.07.15 at 11:29 pm

#44 Garth’s proofreader on 01.07.15 at 11:03 pm
“a rate hike by the Spring, and a few more after that, as American booms.”

as America booms

+++++++++++++++++++++++++++

Agreed. As Amerika booms….

#52 Mukadi on 01.07.15 at 11:33 pm

[Vancouver
Average price: $819,336
Monthly mortgage payment: $3,570
Property tax: $251
Income required: $147,023]

Assuming that I am earning $147K today,
where can I buy a job insurance that guarantees a my job for 30 years?

#53 Calgary retiree on 01.07.15 at 11:34 pm

Like others, Sam Wyatt seems to be confused about the 604 real estate prices causes and effect. Vancouver prices precede QE stimulus by decades. Presence or absence of QE does not relate materially to Vancouver house prices. One of the reasons is that million dollar houses are rarely bought by folks needing major mortgages. Cash is king in these circles.

A more likely contributing cause for the 604/416 prices is that these locales are good initial locations for immigrants. I know, because I was one of them. If some of the huddled masses came from places where their shoe box sized flats sold for a million plus – that would definitely have an impact on local Canadian house prices.

#54 Ben on 01.07.15 at 11:46 pm

Montreal supply is up but still sellers wait for “what it’s worth”. Only interest rate rises will flush the pipes. And boy will they flush.

Roll on spring!

#55 workingarchitect on 01.07.15 at 11:53 pm

Yay! Calgary is immune!

Luxury home market hit new heights in Calgary (Calgary Herald – January 7th)

http://calgaryherald.com/business/real-estate/embargoed-luxury-home-market-hits-new-heights-in-calgary

#56 broadway skytrain on 01.07.15 at 11:55 pm

Assuming that I am earning $147K today,
where can I buy a job insurance that guarantees a my job for 30 years?
—————————–
in 30 yrs you should triple your pay

#57 broadway skytrain on 01.07.15 at 11:57 pm

Vancouver prices precede QE stimulus by decades.
————————————
bingo

#58 fleabitten monkey on 01.07.15 at 11:57 pm

#48 Sponge Rob,
So BoC reducing interest rates had nothing to do with keeping it afloat? Is that what you’re saying?

#59 workingarchitect on 01.08.15 at 12:00 am

I have been perplexed by how many people I know (most recently this year in Calgary and central London, UK) who have been focused on paying off their mortgage, instead of using that cash to invest in other products. It seems with property “values” at an unsustainable level, they would have been better off maintaining their mortgage and diversifying. Instead, the now diminishing value of their property washed away equity in their asset and they are no further ahead, except without a monthly payment.

Is there some type of model or calculator which can be used to test the benefits of going either way (not a precise science, I know)? …as I see the scenario with benefits for both point-of-view.

#60 Schadenfreude on 01.08.15 at 12:01 am

It’s amazing how often the “Travel Alberta” commercial comes on during Sportsnet/CBC hockey games… Got to get those foreign (i.e. not Albertan) dollars into their economy somehow…

#61 SWL1976 on 01.08.15 at 12:05 am

#42 Steve – Straight up laugh out loud funny post

#62 Really on 01.08.15 at 12:06 am

#48 Sponge Rob

Perhaps you”re forgetting the emergency low rates in Canada and massive stimulus in the US that followed the crisis to prop up prices – that will not happen again. Now there is just excessive debt in Canada.

#63 AfterTheHouseSold on 01.08.15 at 12:08 am

#47 #1 is Time

“His wit and consistency are exceeded only by his rugged manliness”.

“Manly yes, but I like it too”.

#64 Whipster on 01.08.15 at 12:12 am

Are those workopolis numbers not gross income numbers? If so then you would need to factor it into net income for the vancouver house example minus all expenses ……this would not be very affordable (transit, food, utilities, hydro, savings)

#65 Sponge Rob on 01.08.15 at 12:25 am

Of course reduced interest rates helped. But the oil industry didn’t flinch at the first sign of adversity. They are all cashed up and chugging along. Companies have a tough enough time getting good workers here and once they do, they are very reluctant to let them go. It will take sub $50 oil for at least a year to get oil guys to throw in the towel, shut stuff down and wait for better conditions.
There will be some cuts for sure. Some lost overtime and bonuses. There will hopefully be some cheap toys for sale this spring. I’m hoping for a Harley Switchback myself.
Real estate will pop. But not yet. There are an awful lot of people with an awful lot of money here and that won’t change overnight.

#66 Kenchie on 01.08.15 at 12:26 am

#55 workingarchitect on 01.07.15 at 11:53 pm
Yay! Calgary is immune!

Luxury home market hit new heights in Calgary (Calgary Herald – January 7th)”

Lol, great observation!

All these people buying “luxury” condos and houses make up the majority of the Calgarian housing market, right?

#67 Mike T. on 01.08.15 at 12:28 am

‘This is nothing so far. Like I said before. It’s way to early for an anti Alberta touchdown dance.’

How much debt did people have then?

How much debt do they have now?

#68 Smoking Man on 01.08.15 at 12:29 am

I am Charley..

Always was…..

#69 Leo Tolstoy on 01.08.15 at 12:31 am

#14 Terry on 01.07.15 at 8:54 pm

That’s insanity for average prices across Canada????

Canadian real estate has been booming forever. What did you expect?

#70 squidly77 on 01.08.15 at 12:35 am

http://www.creb.com/Seller_Resources/Housing_Statistics/

These updated Calgary stats will soon disappear.

#71 Leo Tolstoy on 01.08.15 at 12:36 am

#48 Sponge Rob on 01.07.15 at 11:09 pm
This is nothing that wasn’t planned for in the oil patch. In 2008 oil prices went from $150 to $35 in 6 months. It took 20 m0nthsto get back over $100. After all that and the ensuing global financial crisis guess what the effect on Alberta real estate was. Zero. Nada. Zilch.

Completely agree. Readers have short memories. All this has happened before. Yawn. Real estate will shrug it off. Again. Readers never learn…

#72 Washed Up Lawyer on 01.08.15 at 12:37 am

#26 David

The link you provided leads to a good article. We used to say in the law biz that an expert witness was someone who lived 400 kilometres away and arrived with a slide projector. Now it is a Power Point presentation.

There is no “exploration” in the oilsands. Yes they core and delineate but it is a gut cinch that the McMurray formation is under their feet. No snuffing out a pinnacle reef from which the oil roars when the well comes in. The resource is everywhere between 70 and 350 metres below your feet. So every penny stock SAGD junior comes up with the latest and greatest technology (always trade marked and patented) to get the gunk out cheaper. Asphaltenes turn into plywood at room temperature. Steam chambers grow heat instead of dissipating. Sweet light crude emerges. Blah, blah, blah.

Salesmen from Calgary in six piece suits spot an easy mark in Toronto with the CPP investment arm and raise a billion $.

Why can’t these investment gurus hire a 3rd year engineer with two years reservoir engineering experience and one year evaluation experience to send the hucksters packing.

#73 western observer on 01.08.15 at 12:40 am

#42 – Steve

Great Post!

#74 wallflower on 01.08.15 at 12:49 am

“Why Bitcoin Matters shows you what a “block chain” is, what it means to “mine” bitcoins, and what Bitcoin could do to real estate, account security, money transfer, and a host of other industries.”
http://www.mauldineconomics.com/lg/bitcoin

#75 Vanecdotal on 01.08.15 at 12:52 am

#34 omg the original

Yup. That’s exactly what’s happening in different areas of Greater Van already, and it’s into year 3-4 or longer of some SFH relists as owners can’t get “their” asking price. Yet nothing in the MSM about this, not even a peep. According to BC Assessment though, with the ones that do eventually sell most of the herd is still overpaying, either by a little, or a lot. There’s a really weird disconnect that does not bode well for the possibility of a severe correction in the event of a major additional external shock, We need Zillow, and regulatory oversight of the RE industry. I think you are correct, Van RE (outside the few select HOT zones) may end up a slo-mo train wreck for the next decade or 2.

#76 Doug in London on 01.08.15 at 12:56 am

@devore, post #39:
It’s probably more appropriate to say that lower fuel prices don’t encourage people to drive less, carpool, or try to consolidate more errands into one trip. These lower fuel prices are also encouraging more car buyers to buy bigger cars or SUVs which use more fuel. That will prove to be a mistake if these low fuel prices are temporary. In any event, you should be using the savings from lower fuel prices to pay down debt or build up an investment portfolio.

#77 Smoking Man on 01.08.15 at 12:59 am

I’ve determine tonight I’m a completely f-d up human being.

Who walks to the edge of a mountain, just for the hell of it leans over the cliff, putting faith in God, who you don’t beilive in, that the up draft will keep you from going over..

Any shrinks out there, screw you, I have google. I’ll figure it out..

#78 Doug-o on 01.08.15 at 1:03 am

@ #2 — Another theory out there is that aside from secret anti-Russia sentiments (debatable imo) perhaps Saudi sees the writing on the wall and want’s to get market share as the world weans itself off of a heavy oil addiction. If that’s the case, well, prices won’t be popping up very soon. 6 months down the road should start to show peoples hands.

#79 Pompeii on 01.08.15 at 1:05 am

So much fun seeing the Canadian inter-province love. Go Canada. Go Go…

#80 Carousel on 01.08.15 at 1:06 am

You think renting is the way to go versus owning. That is funny! We sold our first home, as it was not for us at the time, and rented for nearly 14 years. We are finally waiting to buy an affordable home in BC we hope. If your land lord is handy at fixing things where you rent, that is great. We unfortunately, our experience with land lords have been a nightmare. Although, prices of homes are over-valued for sure, one more go at buying, and with buyer beware in mind we will tred carefully. Keeping in mind RE rep’s are just sales people, and it will be like heading into a sea of sharks. Pressure for sellers to unload will be greater this year. Buyers will be in the drivers seat….. The laughing will stop….

#81 RealistvsExtremist on 01.08.15 at 1:18 am

Terrorist attacks in Ottawa, Australia and France within two months and a bit should truly shock us. Major anti-Islamist marches in Germany too – want to bet there will be more? (Boy, the PQ election losers must be wringing their hands – their awkward legislation aimed at undermining Muslim extremists may start to look ahead of its time)
+++++++++++++++++++++++++++++++++++

Canada bombed and killed people in Afghanistan (and guarded all the DOPE now flooding the market), Libya and now in Iraq…….the coalition of the “killing” murdered over one million men, women and children over the last 14 years….Canadian, US and British soldiers did this. Not to mention all the depleted Uranium laying around everywhere. Iraq and Afghanistan are like Hiroshima and Nagasaki now. No? Go look up all the deformed babies.

AND YOUR SHOCKED BY THIS BLOWBACK? Give your head a shake…..and I guarantee you there is more to come. Same with the police state USA and its SWAT teaming people 5 times a day everyday for overgrown gardens, baby deer and pink alien ray guns from 10 year old boys having fun……people are fed up and they are fighting back. There is no surprise here…..

#82 No Debt on 01.08.15 at 1:25 am

#4 rk usa

Just wait until interest rates get back to “near normal”. The numbers in that chart will be laughable then with carrying costs being 2 – 3 times (or more) what they are now.

I can’t begin to imagine what the rates of the early 80’s would do today. Not that I expect we’re likely to see half of those rates, but trying to imagine carrying a $500k mortgage on a 18% mortgage is mind numbing.

#83 Anything you can do ... on 01.08.15 at 1:35 am

As resource-based economies, Canada (oil and gas, mainly) and Australia (iron ore and coal, mainly), have much to learn from one another.

To see what I mean, simply replace “Australia” with “Canada”, and the relevant Canadian cities for “Melbourne and Sydney” in the excerpt below:
(Source: http://www.macrobusiness.com.au/2015/01/australian-private-debt-and-dont-skimp-on-the-pate/)

================
Australia’s private sector is grossly over-indebted, especially the household sector. The hysteria surrounding Australia’s non-existent public budget ‘emergency’ is a smokescreen cloaking the critical household budget crisis. The fictional narrative concerning public debt arises from an unshakeable adherence to pseudo-scientific economic theory and class war, such as ‘justified’ public austerity policies which target the poor and marginalised.

Meanwhile, the public is distracted from the true threat: the unrestrained private spending spree that further enhance the power, profit and authority of the horde of private monopolists, usurers, speculators, rent seekers, free riders, financial robber barons, control frauds and indolent rich.

The current dynamics of the political and economic system means private debts will continue to spiral out of control, until the catastrophically-inefficient FIRE sector inevitably implodes. Nevertheless, the current housing booms in Melbourne and Sydney show no sign of abating in the short-term ….

If the real estate fever gripping the nation does not break soon, Australia may well secure the top OECD ranking for the most over-indebted household sector. A financial crisis beckons, for history documents that extraordinary over-lending routinely precipitates chaos, falsifying expert claims that ‘this time is different’.

================

#84 Joe2.0 on 01.08.15 at 1:40 am

Care to wager a wee bet on if QE 4 comes to the rescue in 2015 or another bailout under another guise?
I say yea.
You could put my whisky where your mouth is…

#85 No Debt on 01.08.15 at 1:41 am

#44 ok – Toronto spring – a gas fire

Not to worry. Interest rates will deal with the GTA. Take that monthly and double it, as a minimum. If you want to be realistic, multiply it by 4 just to get close to the “normal” average for interest rates.

Yes folks, higher interest rates are coming. And those higher rates are gonna whack a lot of unsuspecting, already over-debted families.

#86 Doug-o on 01.08.15 at 1:59 am

@ #2 — Another theory out there is that aside from secret anti-Russia sentiments (debatable imo) perhaps Saudi sees the writing on the wall and want’s to get market share as the world weans itself off of a heavy oil addiction. If that’s the case, well, prices won’t be popping up very soon. 6 months down the road should start to show peoples hands.

Ali Naimi said: “There are many things in the energy market – not the oil market– that will determine prices in the future. A lot of effort is being exerted worldwide, whether in research, or boosting efficiency, or using non-fossil fuels. All these might witness a breakthrough one day. Any strategy must be done in a way that allows it to be changed continuously”.

#87 Will you censor this on 01.08.15 at 2:30 am

http://m.theglobeandmail.com/news/british-columbia/schools-backs-prof-who-says-asian-immigration-has-damaged-vancouver/article22358317/?service=mobile

#88 saskatoon on 01.08.15 at 2:45 am

#35 batt519

exactly.

name-change to save face.

#89 Tom from Mississauga on 01.08.15 at 2:57 am

http://www.bloomberg.com/news/2015-01-08/oil-export-plunge-signals-canada-economy-running-on-empty.html

Article pokes at Canada’s $644M November trade deficit with this “steep decline in exports and investment aren’t what BoC Governor Poloz had in mind when he predicted full output by the end of next year”
9 of 11 export sectors dropped including 5 of 6 of the lately touted manufacturing groups.
Both WTI and natgas have fallen 35% since the Nov report. The January trade deficit could go into the billions.
The USD is still definitely the place to be.

#90 jane24 on 01.08.15 at 3:13 am

Garth is you add the RE industry with all its associated jobs to the oil and gas industry with all its associated jobs – what % of the total Canadian employment is this please? I figure maybe one in two jobs. Am I wrong?

Canada is facing a flock of black swans not just one.

European media full of US interest rate rises and EU money printing to fight deflation. They can’t all be wrong.

Justin Trudeau, the Red Prince, is toast. When bad times roll, people always go right of centre with their vote, hoping for more security.

The most shocking thing about today’s RE stats is the average house price in the bleak prairies. How could these ever be in this range. Buyers must be mad.

#91 nonplused on 01.08.15 at 3:16 am

Hey GMO question here, inspired by Bladerunner the movie.

Aren’t we all genetically designed organisms? Whether you go with natural selection or intelligent design, both are genetic engineering one by nature one by a designer.

So the big problem with GMO’s is that we are possibly introducing “mutations” (that’s what they are) faster than nature can enforce “selection” (which it will).

Well that was a bit off topic but give it a thought.

#92 nonplused on 01.08.15 at 3:24 am

Oh and don’t forget AI. True AI is still a few years or decades off, but if the internet ever learns to think for itself we better hope to hell the programmers had good intentions. The device pictured in “Transcendence” was fortunately benign, but it doesn’t have to be designed that way. And it will happen. If meat can think so can silicon. Silicon can already do so many things meat can’t. Shoot down a missile or a plane? Yu need silicon. Pull up gabs of free porn? Silicon. Stream live video? Silicon. Store the entire Encyclopedia and ad to that all the great works of all authors of all time on a device you can carry in your pocket? Silicon. Driving directions to anywhere in the world? Silicon. It’s already smarter than most people it just can’t think for itself yet. But on the other hand neither can most people.

The internet already knows multiple times what you do, and by that I mean it knows so much more than you do that you can’t even comprehend the difference, it’s like thinking about how many stars there are or how much debt the government has. People just can’t comprehend it. Who knows what happens when it reaches cognition with intent.

#93 Mark on 01.08.15 at 4:21 am

“Luxury home market hit new heights in Calgary (Calgary Herald – January 7th)

http://calgaryherald.com/business/real-estate/embargoed-luxury-home-market-hits-new-heights-in-calgary

Real news isn’t ’embargoed’ (see the URL). This is propaganda, bought and paid for by somebody (hence the ’embargo’). Shame on the Calgary Herald for running this as ‘news’.

#94 Mark on 01.08.15 at 4:25 am

“Why is workopolis not using the traditional 3x income affordability calculation?

The argument is that anything over 3x strips people of their savings, including retirement savings.

Workopolis is owned by a major media outlet heavily dependant on the RE industry for its ad bucks. You expect them to be objective when their jobs depend upon confidence remaining in the tatters of the Canadian economy?

The last big downturn mostly affected nerds who worked at Nortel and other supporting companies. Almost nobody shed a tear as significant numbers of very high paid workers lost their jobs, and huge numbers of new grads were forced onto welfare. This downturn will be far broader.

#95 Chickenlittle on 01.08.15 at 8:06 am

#46 Je suis Charlie:

I have been thinking that for some time. The Muslim community needs to speak up on this subject.
I like the idea of the Muslim walking a friend. …but no, it hasn’t happened yet. It may never happen.

#96 TS on 01.08.15 at 8:36 am

Ottawa
Average price: $357,887
Monthly mortgage payment: $1,559
Property tax: $336
Income required: $74,820.28

Wow, I would need to make $250,000+ to feel comfortable having a $350,000 mortgage

but that’s just me…..

#97 canadian housing prices to crash like Oil on 01.08.15 at 8:52 am

Canada faces a world of economic pain as harpers Conservatives huge bet on oil and gas crumbles leaving Canada running on empty. The massive house of (RE) cards is going to fall apart starting in Alberta and spreading all the way to the GTA.

http://www.bloomberg.com/news/2015-01-08/oil-export-plunge-signals-canada-economy-running-on-empty.html

#98 puddle jumper on 01.08.15 at 9:02 am

G Man…were you in a small elevator with Premier Wynne when she let one go? Ontario is going back to being an engine of commerce?

Bwhahahahahahahahaha !! It wasn’t expensive gas or expensive housing that forced all those thousands of small and medium sized businesses to leave Ontario. It was/is the Liberal policies of ratcheting up regulations and taxes.

Dude…you’ve got to find a new lunch counter.

#99 maxx on 01.08.15 at 9:08 am

#5 Yuus bin Haad on 01.07.15 at 8:40 pm

“Cheap gas saves people from spending that extra money they didn’t have in the first place.”

Yup. Or squirrel away more savings. Or put a practically non-existent dent in ever-growing mountains of debt. My gut tells me that these lower gas prices will not make much difference to the real economy at all.

#100 tonyw on 01.08.15 at 9:13 am

Workopolis numbers are as suspicious as TREBs!!

Average GTA price of $587K with 20% down and a mortgage at 3% with a 30 year amortization = $2K approx. per month + property taxes at 1% of market value = $500 per month. This leads to a qualifying income of $100K approx. even with $117.5K as a down payment.

#101 SWL1976 on 01.08.15 at 9:21 am

#90 nonplused

Silicon. It’s already smarter than most people it just can’t think for itself yet. But on the other hand neither can most people

————————————

Two words ‘soft despotism’ its here and our tax dollars have paid for it

#102 -=jwk=- on 01.08.15 at 9:46 am

In fact, most people offloading property in this kind of unstable and emotional marketplace would never pay the price they’re asking.

Why people can’t see this baffles me.

“my house is worth 700,000!”
“would you pay that for it?”
“heck no that’s crazy”
“then why do you think someone else would?”
“because I am a genius, and you are a renter! ha ha!”

#103 TurnerNation on 01.08.15 at 9:48 am

#46 Je suis Charlie I strongly believe these attacks are the work of higher levels in this control pyramid we’re in. Giveways are emotions not fact, and our ‘leaders’ pounding their chests on nationalal TV only hours afterwards. ‘Trust us to keep you safe from the other, t-t-those ‘people’ who hate OurWayOfLife [sic].’
Almost scripted.
I notice no tears were shed over the many 500lb bombs dropped. We cheered. I know what a life’s worth. Depends.

Now, back to our internet pablum newz: “X did Y, and you won’t believe what happened next!”

#104 Holy Crap Wheres The Tylenol on 01.08.15 at 10:08 am

#85 Doug-o on 01.08.15 at 1:59 am

@ #2 — Another theory out there is that aside from secret anti-Russia sentiments (debatable imo) perhaps Saudi sees the writing on the wall and want’s to get market share as the world weans itself off of a heavy oil addiction. If that’s the case, well, prices won’t be popping up very soon. 6 months down the road should start to show peoples hands.

Ali Naimi said: “There are many things in the energy market – not the oil market– that will determine prices in the future. A lot of effort is being exerted worldwide, whether in research, or boosting efficiency, or using non-fossil fuels. All these might witness a breakthrough one day. Any strategy must be done in a way that allows it to be changed continuously”.
_____________________________________________
Yep price will pop just in time for summer vacays!

#105 Holy Crap Wheres The Tylenol on 01.08.15 at 10:21 am

#96 puddle jumper on 01.08.15 at 9:02 am

G Man…were you in a small elevator with Premier Wynne when she let one go? Ontario is going back to being an engine of commerce?

Bwhahahahahahahahaha !! It wasn’t expensive gas or expensive housing that forced all those thousands of small and medium sized businesses to leave Ontario. It was/is the Liberal policies of ratcheting up regulations and taxes.

Dude…you’ve got to find a new lunch counter.
____________________________________________

Yes Ontario’s business policies are terrible. No incentive to attract business and no incentives to stay. I’ve been coddled several times per year by The States of North Carolina, South Carolina, Tennessee, Arizona, and on and on, event including the Commonwealth of Pennsylvania! They offer tax incentives that last for 5-10 years, cheaper buildings with lower cost wages. Right to work laws without Union intervention driving your cost sky-high. The only reason I have not moved is 1 My company is ingrained here locally with great workers, 2 My workers are very creative and productive, 3 they get paid well and I make a decent profit margine, 4 My family is here and my wife would never want to leave the children and grandchildren. Number four is the most driving reason for sure. But hell every year the states come a courting me!

#106 Kris on 01.08.15 at 10:23 am

So what’s a reasonable longterm price for oil? Is this a dip, or is this actually the longterm norm?

#107 waiting on the westcoast on 01.08.15 at 10:36 am

#37 TurnerNation on 01.07.15 at 10:27 pm
“Went on a date with a Mortgagetress. All in the purpose of market research – assessing depth and liquidity in this market.”

Has demand been saited? ;-)

#108 Rusty Venture on 01.08.15 at 10:44 am

@TJ

The median family income is $98K, so house prices in Ottawa have nowhere to go but up, up, up!

j/k :)

#109 The American on 01.08.15 at 10:47 am

Idiots…. It’s “Amarikuh.”

#110 The American on 01.08.15 at 10:59 am

Well, I can tell you Americans most certainly pay more in property taxes than Canadians…. If Garth’s presentation above demonstrates the monthly taxes expected to be paid for the corresponding home values, Canadians aren’t paying hardly anything at all by comparative standards. Hell, property taxes are practically free. As dad always said, “Son, the government is going to get it’s taxes one way or another. Nobody really ever pays more or less than another.” Not sure how much of that statement is true, but I will say on the LOW end, Americans would easily pay double this, and on the higher end, six times this amount. For example, an $819,000 in Seattle would be paying just shy of $700/month. Keep in mind Seattle has one of the lowest milliage rates in the country. An $819,000 home in Dallas would pay around $2,400/month in property taxes.

#111 TurnerNation on 01.08.15 at 11:21 am

Now they have given us a riveting made for Tv manhunt. Perhaps will be found in a backyard again a la bostonstrong or halifax. Global event.

#112 Larry1 on 01.08.15 at 11:34 am

David Rosenberg the other day was sayin’ that the fed might not raise in 2015 with the USD so strong. A raise would strengthen to USD even more to the point where the US economy would suffer.

#113 saskatoon on 01.08.15 at 11:35 am

#90 nonplused

as SM might say: be mindful of using the word “we”.

GMO is for the rabble.

bill gates may be drinking poop water, but he ain’t choking back GMO.

#114 Ontario's Left Coast on 01.08.15 at 11:42 am

#76 Smoking Man on 01.08.15 at 12:59 am
I’ve determine tonight I’m a completely f-d up human being…

Finally dawned on you, did it? People on here have been telling you that for ages…

#115 Larry1 on 01.08.15 at 11:51 am

Fed not raising rates in 2015: Economist
http://video.cnbc.com/gallery/?video=3000338831#

Sounds like Bill Gross is saying the same thing, that the FED might not raise in 2015.

“With the dollar strengthening and oil prices declining, it is hard to see even the Fed raising short rates until late in 2015, if at all,” said Gross — http://www.reuters.com/article/2015/01/05/us-janus-outlook-gross-idUSKBN0KE1DG20150105

Garth, you still stand by your call that they raise in 2015?

Yep. Expect so. — Garth

#116 Ronaldo on 01.08.15 at 11:58 am

#81 No Debt

”I can’t begin to imagine what the rates of the early 80’s would do today. Not that I expect we’re likely to see half of those rates, but trying to imagine carrying a $500k mortgage on a 18% mortgage is mind numbing.”

If rates had stayed around 10 or 11 percent as they were for many years housing prices would not be where they are today. Probably half what they are in the major cities that are currently in a bubble. It required a doubling to 22% to end it but today all it would need is around a 2 to 3% increase in current rates to end the party. The government knows this and why they are doing everything in their power to keep rates down. Am surprised it’s lasted this long.
Todays $500,000 mortgage would be equivalent to $50,000 back in the 80’s and wages would be a fifth of what they are now. So, a 22% interest rate would have taken 100% of a single wage earners salary to pay the mortgage. You only have to imagine what 6% would do to Vancouver and Toronto prices.

#117 Sheane Wallace on 01.08.15 at 12:14 pm

deflation

https://ca.finance.yahoo.com/news/apple-hiking-prices-app-store-canadian-customers-due-130102591.html

#118 Ronaldo on 01.08.15 at 12:26 pm

#75 Doug in London

”In any event, you should be using the savings from lower fuel prices to pay down debt or build up an investment portfolio.”

That would be the smart thing to do Doug but am thinking that the savings for the average person are likely not more than 1 latte per day so they would likely choose the extra latte than pay down debt. People who weren’t fiscally responsible prior to lower gas prices are likely not going to be any more responsible now. They’re just people.

#119 bdy sktrn on 01.08.15 at 12:30 pm

$819,000 in Seattle would be paying just shy of $700/month. Keep in mind Seattle has one of the lowest milliage rates in the country. An $819,000 home in Dallas would pay around $2,400/month in property taxes.
===————————–
and about 300/month in vancouver

best value is in BC!

#120 Doug in London on 01.08.15 at 1:06 pm

@Ronaldo, post #116:
Better yet use those savings to buy dirt cheap oil and gas stocks or ETFs. It would be a good hedge against rising fuel prices, if prices go back up sell the stocks or ETFs and use the proceeds to help pay for the more expensive fuel!

#121 Kenchie on 01.08.15 at 1:19 pm

MSM catching up to Garth (slowly)

http://www.theglobeandmail.com/report-on-business/top-business-stories/bc-alberta-ontario-housing-one-of-these-things-is-not-like-the-others/article22360765/?cmpid=rss1

#122 fancy_pants on 01.08.15 at 1:27 pm

pfff. Another governor of the Bank of Canada waving a stick and jabbering about interest rate increases? yawn. ya whatever buddy. 5 years and counting… still calling their bluff. maybe 1% within the next two years if that. oohhh. so scary. move along people, nothing to see there. oil will be back up, party on. I see no pop to this bubble. the incompetence of politicians at all levels is astounding

#123 Retired Boomer - WI on 01.08.15 at 1:27 pm

Property Tax in the states is a state, and local government issue. “How much” you pay is dependent generally, on the cost of the local government, local schools, regional technical, and vocational schools. Some states I have lived in, and owned property (WI,MI,NY) all have generally higher than average property taxes. WI roughly 2-4% of property value, MI roughly 1.3-3% of property value, NY roughly 2-4% of property value. Local school spending is the biggest differentiator, and can send rates as high as 6-7% of value per year. That certainly is true in WI. A school district line can reduce taxes by 50%, or MORE than double them!!
So, add in a 5% sales tax on most items, sans food and medicine. State income tax that averages 4.2% and property tax of roughly 2.2% of actual value, plus your Federal Tax bracket (10% to 52%) averages 19.1% on $80,000 depending on how much earned income…. welcome to the US.
Go to a “southern state” sales taxes are much higher, income taxes similar, car tags usually based on value of the car, vs. a flat fee here $75 per vehicle per year.

Calculated the cost of living here, against TN, (WY, which has no state income tax), NY, MI, and AL. Bottom line difference $1,100 difference between the states.

Car insurance, home insurance, property taxes, average utility rates & usage, local and-or- city taxes, some states assess a “personal property tax” where they tax your furniture & junk per year.

NO “FREE LUNCH” anywhere these days. The full allocated costs are nearly identical. I would suspect the same is largely true between Canadian provinces. I would be curious to hear the differences.

#124 not 1st on 01.08.15 at 1:28 pm

Trouble brewing in Canada according to DEUTSCHE bank;

http://www.businessinsider.com/canada-housing-market-slides-2015-1

#125 GTAHouseHunter on 01.08.15 at 1:28 pm

I beg to differ about the taxes being so high in Dallas, Texas. Here is link from Zillow that states that the taxes on this $750 K property being $965 a month.

Here is a link as well.

http://www.zillow.com/homedetails/101-N-Montclair-Ave-Dallas-TX-75208/26709918_zpid/

#126 waiting on the westcoast on 01.08.15 at 1:33 pm

More anecdotal stories…

My wife’s two best friends are two feet in on the Vancouver market. The one friend is divorced, makes six figures, has a rented out basement suite and just took two students for room and board. She also took out a HELOC to buy a condo (which is also rented out) a couple of years ago. The other is married with combined income of six figures living in the valley with a basement renter.

Both of these friends are living paycheck to paycheck and are totally stressed out.

Both tell my wife that we have missed out and will never be able to enter the market. My wife has told them that we have put our funds in numerous businesses and investments which have grown far more than house prices (even in house horny Vancouver), have significant liquidity, travel a fair bit and lead a far less stressful life.

We suggested that they consider selling and take advantage of the gains that they have made and rent. They say that houses will continue to go up and then they will miss their opportunity to own/continue building equity.

I feel for them – they are so invested in the dream that they cannot see that there is little upside left… How many more renters can you add? How many extra side jobs to help top up you’re mortgage payment.

#127 Rexx Rock on 01.08.15 at 1:36 pm

The fed will not raise rates.Its only been 6 years of 0%,I think another 3 or 4 years will be needed.
As for houses may decline a little in Alberta but will be strong in Toronto because of a booming economy.

#128 Smoking Man on 01.08.15 at 1:52 pm

#112 Ontario’s Left Coast on 01.08.15 at 11:42 am
#76 Smoking Man on 01.08.15 at 12:59 am
I’ve determine tonight I’m a completely f-d up human being…

Finally dawned on you, did it? People on here have been telling you that for ages…
………

It was a JD induced post, ment every word of it..

No other way I would rather be.. You normals are creepy..

#129 not so fortunate on 01.08.15 at 1:52 pm

I am new to this blog and have to admit it has inspired me in my forced early retirement at the very young age of 55. All I have is the real estate I acquired, flipped, held, sold ,kept and rented out. I remember the waves in the market starting in the early eighties and again in the late eighties. Fortunately after getting burned in the first bubble I was able to sit tight for twenty years before I began buying and selling and with low interest rates I was able to hold three properties at once. Today I am expecting to sell the second of three which will leave me with the one I picked up in 2009 when no one else wanted the place. I am not a fan of being a landlord and swore I would never do it. I will move out of my current home which I sold privately and evict my tenant so that I can live in my little waterfront penthouse allowing me to have a piece of the Toronto pie while my money gets invested in safe funds for the next few years. Thank you to all of the participants in this blog as no one really knows what is going to happen but if history repeats itself, than it may be a good time to jump.

#130 not 1st on 01.08.15 at 1:55 pm

Rates will not rise in 2015.

The fed says it won’t make a move until April. By that time we will be entering the spring summer cycle which always starts off a little wonky. Several flash rashes have happened in May and thats usually when Eurozone trots out some panic.

By mid summer, traders are on vacation and no moves are made during this period. Then fall will arrive and then there will be another october crisis again. See how many financial crisis start in the fall. Lots.

After that blows past it will be xmas retail season again and the fed won’t want to mess with that.

A whole year of sitting on hands will go by.

#131 Fed on 01.08.15 at 1:57 pm

The Federal reserve today said it may not begin raising rates until possibly 2018. Link below. talks about threat of deflation … just as expected. rates are going no where.

http://www.marketwatch.com/story/feds-evans-us-might-not-hit-target-inflation-rate-until-2018-2015-01-08

#132 David on 01.08.15 at 2:02 pm

Saving 25 cents a litre on the next fill at the local Canadian Tire gas bar wont be much of a bargain if this continues.

http://truth-out.org/news/item/28406-russia-blamed-us-taxpayers-on-the-hook-as-fracking-boom-collapses

#133 Fortune500 on 01.08.15 at 2:07 pm

How about 63% overvalued …

http://business.financialpost.com/2015/01/08/deutsche-bank-reveals-7-reasons-why-canada-is-in-serious-trouble-starting-with-a-63-overvalued-housing-market/

#134 Bottoms_Up on 01.08.15 at 2:11 pm

#2 Oil sands are finished. Alberta is finished on 01.07.15
—————————————————————–
The same report was aired on tv last night.

For Canada to do it’s part to keep our climate warmed by only 2oC (vs. the 4-6 oC path we are on now), the estimates are:

75% of all Canadian oil must be left unburned.

99% of all Canadian oil sands must be left unburned.

Are we toast?…damned if we do, damned if we don’t.

#135 Bottoms_Up on 01.08.15 at 2:19 pm

#121 Retired Boomer – WI on 01.08.15 at 1:27 pm
————————————————————
Quebec has higher income tax to pay for more social services including daycare. The increased amount can result in paying a few thousand more per year just to live in ‘la belle province’.

Alberta doesn’t have provincial sales tax (so you pay only 5% for federal sales tax, compared to sales taxes in other provinces of 13-15%).

Our property taxes appear to be lower than in the USA, at about 1% of price of house/unit.

We pay a flat health care tax in Ontario around $500 per earner, but on a sliding scale based on salary. Not sure if other provinces have this.

#136 HD on 01.08.15 at 2:21 pm

@ #91 nonplused on 01.08.15 at 3:24 am

True AI is still a few years or decades off, but if the internet ever learns to think for itself we better hope to hell the programmers had good intentions.

Stephen Hawkins has an interesting view on this:

Stephen Hawking said in 2014 that “Success in creating AI would be the biggest event in human history. Unfortunately, it might also be the last, unless we learn how to avoid the risks.” Hawking believes that in the coming decades, AI could offer “incalculable benefits and risks” such as “technology outsmarting financial markets, out-inventing human researchers, out-manipulating human leaders, and developing weapons we cannot even understand.” Hawking believes more should be done to prepare for the singularity:

So, facing possible futures of incalculable benefits and risks, the experts are surely doing everything possible to ensure the best outcome, right? Wrong. If a superior alien civilization sent us a message saying, “We’ll arrive in a few decades,” would we just reply, “OK, call us when you get here – we’ll leave the lights on”? Probably not – but this is more or less what is happening with AI.

Fascinating stuff indeed.

If you really dig this topic, here is an interesting presentation by Nick Bostrom (Author of Super Intelligence) on the subject:

https://www.youtube.com/watch?v=pywF6ZzsghI

Best,

HD

#137 saskatoon on 01.08.15 at 2:41 pm

saskatoon market holding strong!

http://www.saskatoonrealtors.ca/Mediarelease/DetailedArticle.aspx?Article=218|1

#138 Faith on 01.08.15 at 2:46 pm

What are you thoughts on this couple and what they did to build up their TFSA’s? It’s great things worked out, but talk about risk with one egg.

http://www.moneysense.ca/save/tfsa/1st-place-rick-maureen-1m

#139 jess on 01.08.15 at 2:53 pm

see what is a giffen good

Perils of the debt-propelled economy – Asia Times
http://www.atimes.com/atimes/Global_Economy/DI14Dj01.html
Sep 14, 2002 – As William Zeckendorf, the bankrupt real-estate tycoon, once said: “I’d rather be alive at 30 percent interest than be dead at 3 percent.”

What is Lender Liability?
http://corporate.findlaw.com/finance/what-is-lender-liability.html

#140 OMG on 01.08.15 at 3:04 pm

Is that Smoking Man and his hounds in the photo?
Drunk again with the dogs waking him up. Poor doggies!

#141 Godth on 01.08.15 at 3:14 pm

#43 Smoking Man

Take a Dipso like You
http://www.bookforum.com/inprint/014_05/2055

#142 lee on 01.08.15 at 3:20 pm

#122

What does Deutsche say about Toronto?

#143 honeybooboo on 01.08.15 at 3:23 pm

Some other thoughts on the Toronto housing market for 2015.
http://www.torontorealtyblog.com/archives/welcome-to-2015/11881

Honeybooboo

#144 Retired Boomer - WI on 01.08.15 at 3:37 pm

I think that a great many will be “surprised”!!!

The FED will raise rates this year. How much, how fast is unknown. The reason the FED will raise rates is that NOT raising rates is no cure for what does not ail the US.

Yeah, it does not make any sense to me either, but I would like to see interest rates ‘normalized’ with the rate of inflation. Currently, that would indicate to me a 1.5% to 2% base rate.

In the US inflation is rather tame running at a bit under 2%
Can you explain why interest rates should remain pegged to the floor???

#145 Snowboid on 01.08.15 at 3:47 pm

#123 GTAHouseHunter on 01.08.15 at 1:28 pm…

You are 100% correct, and don’t forget that $ 750,000 US ($ 870K CAD) would only buy a crack shack in Vancouver.

Based on the information on the home you provided a link to I would suggest it would likely cost $ 8 million in Vancouver!

Here in the NW valley of Phoenix we pay $ 1600 a year in property tax on a home that would cost $ 550-600K CAD in Kelowna.

We would pay less if we were full-time residents.

#146 Godth on 01.08.15 at 3:55 pm

#82 Anything you can do …

How did it happen?
Capitalism Hits the Fan – Richard Wolff
https://www.youtube.com/watch?v=TZU3wfjtIJY

#147 Nemesis on 01.08.15 at 4:08 pm

#FunnyOldWorld… #YouCan’tWriteThisStuff…

[UK Telegraph] – French baron saves crumbling Jacobean manor from ruin: Baron von Pfetten, who was a member of the Chinese parliament, has agreed to restore Apethorpe Hall

…“He has a great deal of work to do. He doesn’t get a bathroom, or a kitchen. He hasn’t got any heating of electricity. There is millions of pounds to be spent but we are very confident he will turn it into a fantastic family home.”…

http://www.telegraph.co.uk/culture/art/architecture/11333447/French-baron-saves-crumbling-Jacobean-manor-from-ruin.html

[UK Telegraph] – Man who skipped work for 24 years is finally fired: AK Verma, an executive engineer at India’s Central Public Works Department, last turned up for work in December 1990

…” Even in India, where government jobs are considered to be for life, A.K. Verma was pushing it.

Verma, an executive engineer at the Central Public Works Department, was fired after last appearing for work in December 1990. “…

http://www.telegraph.co.uk/finance/jobs/11333885/Man-who-skipped-work-for-24-years-is-finally-fired.html

[LAT] – Snake in San Diego toilet scares workers; search for owner continues

…”On Tuesday, an urban legend of major metropolitan sewer systems and the worst fears of Stephanie Lasca, co-founder of Vertical PR + Marketing, came together in her office bathroom when the Colombian rainbow boa flicked its tongue and poked its head out from within the porcelain throne.

“I thought my eyes were deceiving me,” Lasca said. “This is every person’s worst nightmare.”…

http://www.latimes.com/local/lanow/la-me-ln-snake-in-san-diego-toilet-20150108-story.html

#148 jess on 01.08.15 at 4:17 pm

Derivatives and the Bankruptcy Code

http://www.hedgefund-index.com/edwards-derivatives.pdf

#149 Texan'elle on 01.08.15 at 4:19 pm

As to American property tax, my husband and I own a home in Houston, TX, in the HISD school division (which means the one people try to avoid but we have no children).
The 2013 property tax on the $430K home was about $7500. Then we left for a country for a year and rented it out. 2014 taxes were $11000 for the year when it was not our primary residence, and therefore not eligible for the homestead exemption.

Texas has no state income tax but it does have a 6.25% sales tax (which can go slightly higher depending on the city/county).

#150 Mark on 01.08.15 at 4:28 pm

“So what’s a reasonable longterm price for oil? Is this a dip, or is this actually the longterm norm?”

Without the oilsands, and without shale, the world would be in a supply deficit. So prices in the long term must be at least equal to the incremental cost of developing those resources. That’s not to say that developers of the highest cost resources will make a lot of money, but if firms at the margins are consistently driven into bankruptcy, then obviously the price is too low and probably unsustainable.

I’d probably put that number at around $75-$90/barrel. At $50/barrel, the shale wells will deplete out in 2-3 years, and most of that supply will be lost. Existing oilsands can keep running at $50/barrel indefinitely, but no new projects will be built until a significant amount of production can be sold forward at $100/barrel.

I might just add to this all that shareholders in the O&G sector have gone an awful long time without seeing anything in terms of meaningful shareholder returns. Boards are going to think long and hard before they commit even a dime to new projects. Which, IMHO, pretty much guarantees the next 5-8 years will be very rough for Alberta’s energy construction tradespeople and O&G engineering sector.

#151 waiting on the westcoast on 01.08.15 at 5:27 pm

I am not sure that oil has to normalize at the higher levels needed for fracking and oil sands. They can operate at lower prices on an incremental level. What will happen is a large swath of the sector restructuring the debt for the exploration side (if used) or really low share prices to reflect the p&l reality if they are sunk costs… Still not a fun scenario for investors/management in this space.l

#152 saskatoon on 01.08.15 at 5:52 pm

#144 Godth

master thief.

#153 Mike T. on 01.08.15 at 5:52 pm

TurnerNation re: Charlie Denbo (or whatever)

obviously staged – how did the police identify the men?

why was someone ready to shoot the whole event at the drop of a pin, how did the gunmen know the meeting that was taking place etc etc

see, the elites are making mistakes on purpose, to wake people up (see Boston, Batman shooting, Sandy Hook)

most folks into the alt-media Alex Jones stuff are waiting for the Rothschild-Rockefellar version of a NWO, gold guns getaway plan – white shoe boys club stuff

that’s the fake NWO – the NWO will be the BRICS plan that defeats the Rothschild version, and like the guppies we are, we’ll embrace it and love it and thank Harper et al. from saving us from invisible boogie men….

anyone seen Cato lately?

#154 saskatoon on 01.08.15 at 6:00 pm

you know shit is going to hit the fan when pigg is displaced by bloom and doom:

http://www.thestar.com/business/real_estate/2015/01/08/canadian_home_prices_overvalued_by_63_bank_says.html

By: Neil Callanan Bloomberg, Published on Thu Jan 08 2015

LONDON—Homes in Canada are 63 per cent overvalued and the level reaches about 50 per cent in Australia and Norway, Deutsche Bank AG said in a report Thursday.

Homes in Wollongong, a seaside city in the Australian state of New South Wales, are more expensive than in New York when the median house price is compared to the median household income, economists Torsten Slok, Matthew Luzzetti and Peter Hooper wrote in the report. The report compares home values to their historic multiples of rent and household income.

#155 Alex N Calgary on 01.08.15 at 6:02 pm

Alrighty Garth, one of your loyal oil and gas spies reporting in. Just spoke to our head of the company, I asked him the scuttlebug after coming downtown. He said things are looking dark indeed, he said his Wife is a higher at Suncor and said they’ve already had cuts but the big cuts are coming March/April. I was discussing with him how we’ve already cut lots and slashed expenses and we hopefully look better to our giant mega corp parent company then some poorer performing assets in AB. He said hes been through 4 of these up and downs in AB and we just have to slash everything we can, cut expenses, hunker in the bunker and hope we all make it through. AB finance minister of course is saying sunshine and puppy dogs through 2015, but the people in the know are not as rosy.

I wish everyone didn’t have to be so afraid of giving potential realistic bad news around here, I guess they all fear that if the regular uneducated people in this province find out we’re heading into trouble, they’ll panic, throw house up for sale, stop spending money at all and make it all even worse…

Keep up the good work on the blog, now that stuff is shaking, exciting times, we are moving to another rental end of Feb (that’ll be 6 in 6years now) but finally I can taste an affordable house in Calgary coming, so the move won’t be as painful as the last ones, I hope?

#156 SWL1976 on 01.08.15 at 7:03 pm

#153 Alex N Calgary – Good points. I am at one of the big sites (not the one you listed) and right now its all about self preservation. The cuts are not too bad in my department, yet, but there are. I shook hands with 2 great guys today I may never see again. The theme for 2015 is do more with less. Cuts were on the way even before the price drop, now no one feels entirely safe. Sure glad I’m not mortgaged to the 9’s, not diversified and sweating bullets. Some are.

#151 Mike T. – Anyone seen Cato lately?

Nope. Was kinda thinking the same thing. Was wondering if he might be on some other blog in blog sphere land. I understand this is a financial blog and don’t like getting too far off topic but def like to chat with like minded people about what’s really going on. Garth seems to have great patients for us here and some of our ‘radical’ ideas about our current state of affairs

Garth your blog format and comments section is second to none out there. Simple is good. Thanks for letting us vent and chirp

#157 Ray Skunk on 01.08.15 at 7:16 pm

#152 Saskatoon

you know shit is going to hit the fan when pigg is displaced by bloom and doom

The editor slipped up by publishing a syndicated news article. Slap on the wrists for him.

Tomorrow it will be business as usual when the Sow delights us with her all-but-verbatim TREB statistics “report” masquerading as news.

#158 Westcdn on 01.08.15 at 7:22 pm

I still think US$ 55 per barrel for WTI (oil) is the price the “market” wants until the supply issue is resolved. The biggest losers will be all levels of Canadian Government revenues at varying degrees among provinces. I am betting Alberta will raise taxes and borrow the rest it needs. As far as taxes go, I think consumption tax increases are better than income tax increases because taxpayers decide what to purchase. I am in favour of a harmonizing a 5% provincial sales tax with GST – if the Feds were to increase GST, I would drop the provincial tax by the same % until we hit zero. Hopefully Alberta will solve its fiscal problems within a few years and drop property and income tax rates.
The number of Albertan’s who lose their jobs will be the prime determinate how far our RE prices decline relative to Toronto and Vancouver. My feeling is that it won’t be until July when the effect of low oil prices can be seen across Canada. I believe Calgary RE prices will only decline slightly (less than 5%) from now to July 2015 as we wait and see what employment levels we have. I suspect many newbies to Alberta will hasten back to mighty TO and get flattened there.
Anyway, lots of things can happen in 6 months but oil above $55 per WTI barrel is not one of them in mho. Despite the number of 1% in TO, I doubt Ontario can save the country. RE prices will remain high in select hoods but the average Joes simply won’t have the income on average.
The amount of private debt and the emptiness of Government promises worry me. I would be happy if the BoC raised interest now to stop people from taking on more debt. But one man’s debt is another person’s (be PC or be shot) asset.
How long this debt/credit bubble can be maintained is beyond my understanding but I can see why it is important to Central Bankers and TPTB. Anyway, let’s see how businesses and people spent their energy savings to improve Ontario and save Canada in the process.

#159 espressobob on 01.08.15 at 7:24 pm

Some are worried about the oil sands. This is a infinitesimal concern to diversified investors. A world equity ETF is a far better space to spend ones attention than a small sector in Canada.

#160 Homie on 01.08.15 at 7:28 pm

Fed report on Wednesday, that interest rates will begin their ascent in about 100 days. Of course, nobody on your street believes that. This’s what will make the year so damn interesting.

*******************************************
Just to remind YOU, we live in Canada and here intrested rate have only one way to go DOWN !

#161 Mohamad on 01.08.15 at 7:37 pm

Why or how does the QE benefit Van real price…could someone please explain..thanks

#162 The American on 01.09.15 at 2:01 am

At #123: GTA HouseHunter… The information you find on Zillow reflects a value for the neighborhood of Oak Cliff, a not-so-great area found Southwest of the city of Dallas. And that’s putting it lightly. Also, you’ll notice the Tax Assessed value for 2014 was only $453,640, a far, FAR cry from the $749,900 asking price. So, in this instance, the property taxes paid in 2014 for a home with an assessed value of $453,640 was $11,577, or about 2.55% of the value of the home, or $965/month. Just because that’s what they’re asking $749,900 (a pipe dream, no less in Oak Cliff), it doesn’t mean that’s what they’ll get for it, and obviously the house hasn’t been purchased for that amount as it is still for sale after nearly a year on the market (306 days). If a person pays the $749,900, you can assure yourself he/she will pay about $19,000/year in property taxes as the sale price typically become the newly-assessed taxable value in Dallas. If you used this same rate and applied it to the house value found in Vancouver, B.C., that person would pay over $1,740/month in property taxes. It pays to know what you’re talking about.

#163 James Forecast on 01.09.15 at 9:28 am

Since I disagreed with Mr. Turners forecast I better post my own forecast for debate

Yes housing will decline by how much not sure maybe 30% as Canada is different than the states.
Baby bommers will not sell there houses in mass, what I see is a shift in home ownership. The younger under 30 crowd will shy away from housing and rent.

Therefore I predict more and more houses having rooms for rent. This will prove to be a life saver for the bommers as they can stay in their homes, retire, get low paying jobs and have rental income to pay off the mortgage.
This will last for the next 20 years until housing normalises. If history is your guide this happened allot in the 30s, 40s and early 50s.

I see a housing slump for the next five years, then picking up to normal growth for the next 20 years, then as the baby boomers move into retirement homes there will be another shift in housing.
Wild card is immigration!
Cheers

I predicted neither a mass exodus by Boomers nor a 30% overall decline. But there is not be a 20-year housing boom on the horizon. — Garth