Through the roof

MOVINGUP modified

On Tuesday the second phase of “Aspen Ridge” McMansions in the distant GTA burb of Vaughan went on sale. People started lining up on Friday for the chance to buy a particle-board monster home with endless toys. A detached house on a 50-foot lot started at $1,641,990. With closing costs the premium model came in at over $2 million.

This was special pricing for the ‘VIP’ waiting list – people who still felt they had to sleep three nights in a lawn chair. There was another ‘VIP’ event for potential buyers on Wednesday, too. But this time there was an added surprise – a $150,000 increase. Now the basic fifty-footer was going for $1,791,990. By the way, that represented a half-million-dollar increase over the same house sold by the same developer in the same project one year earlier.

Guy lives not far away. “The houses are gorgeous,” he says, “but to go up $500,000 in a year is ridiculous.” By the way, these places are available to the general public this Saturday. If there are any left.

ASPEN LINEUP modified

While obsessed people willing to swallow unbridled risk camp out and pee in jars for the chance to shell out two million on an unbuilt suburban pile, it’s a far different reality in others parts of the country. Like Alberta.

Matt check in from Fort Mac. “Don’t judge me Garth,” he says, “but hookers and blow have gone through the roof here!” Good thing, because real estate is peeling in the other direction.

“Well, one of my workmates bought a lovely little shack in the Mac for $765,000 in the spring of 2014 and then lost his job at Suncor a month before Christmas,” Matt tells us. “He and the wife and baby put said anchor up for sale in late January 2015 for $785,000, it is now listed for $760,000 along with all the other ones mushrooming up on his street. They also had an offer in on a detached home in Edmonton for $450,000 pending the sale of their Northern Albatross. That ship of limes has now sailed, leaving them with scurvy and bleeding gums.”

Actually, across Alberta, sales to the end of April were off 24% with listings up and the average sale price down 2%. That’s consistent with Calgary. As of yesterday sales for May are off 25% and the length of time it took the lucky people to sell is up 52%.

Ratings agency Fitch said this week it forecasts Cowtown prices are still too expensive by a whopping 17%. “With oil prices off more than 40 per cent from a year ago, there are broader worries of a contraction in the region … with employment prospects shakier in a region highly dependent on commodities pricing, uncertainly has begun to chip away at demand for housing.”

You bet. For the first time in half a decade, the number of Canadians collecting jobless payments has increased – and we are supposed to be in year six of a recovery fostered by government stimulus and the lowest interest rates since ever. Unemployment insurance claims have swollen by 9% in Alberta, leading the nation in claims for the third month running. EI ranks are also growing in Saskatchewan and the Martitimes.

Anyway, back to Matt: “Now let’s talk huge oil paycheques: they’ve shrunk. Contractors making $125hr last year are working for $85hr, and many staff hires are working for $65hr instead of $80hr…the pain continues. I (like all great authors) have resorted to selling my self-published novel out of the back of my pick-up truck to make ends meet…300 sales and counting. Jeez, I wish truck-nutz weren’t so damn expensive.”

David Madani is the chief egghead with Capital Economics. In his mind the Alberta misery is vastly overweighing the hormones in Vaughan. This week he upped the ante with a forecast saying things are bad enough the Bank of Canada will cut rates again. And again. “We expect the economy to struggle over the rest of the year, disappointing policymakers. In our central scenario, we have pencilled in another 25 basis point rate cut in July, and another again in October. Reflecting this, we expect the Canadian dollar to resume its downward trend, ending the year at US$0.75.”

So it’s almost like there are two Canadas. On one hand, moany Millennials with six-figure incomes say the system’s unfair and broken because they cannot afford detached houses the way their parents did four decades ago. In this Canada people sit in lawn chairs waiting to spend millions on an unbuilt house in a former field that even the cows thought was boring. On the other hand, economic growth for the nation disappoints, job creation is dry, exports are thinning, houses go unsold and we’re told money needs to get even cheaper to rescue things.

In between the extremes is the most indebted middle class in history, and Albertans voting in socialists.

Can you imagine a better time to be unencumbered and liquid?

197 comments ↓

#1 LazyJason on 05.21.15 at 6:46 pm

So where should I be looking to invest? I like the US and have BRK.B and some of the banks and techs. Is Europe expected to get out of their funk sometime soon, or is Greece going to be like the US Debt Ceiling thing awhile back and just drag on and on?

#2 Big English on 05.21.15 at 6:48 pm

The sales continue and the prices continue up in Vancouver.
Friends bought their dream house in North Van for $1.6M
Its really is getting scary, what will we say to friends who suffer great loss?

#3 JustMe on 05.21.15 at 6:54 pm

Go out and buy the biggest house you can get a mortgage for. Then don’t pay. You might get it for free.

Foreclosure to Home Free, as 5-Year Clock Expires

In September, Susan Rodolfi celebrated an unusual anniversary: five years of missed mortgage payments.

She is one of thousands of Americans who have skipped years of mortgage payments and are still living in their homes.

Now a legal quirk could bring a surreal ending to her foreclosure case and many others around the country: They may get to keep their homes without ever having to pay another dime.

lenders may never be able to seize the homes because the state statutes of limitations have been exceeded

http://www.nytimes.com/2015/03/30/business/foreclosure-to-home-free-as-5-year-clock-expires.html?_r=0

#4 The American on 05.21.15 at 7:04 pm

At #2: Big English, you say to them, “I’d like fries with that, please.”

Don’t think that’s possible for someone to slide on the socio-economic ladder that quickly? Believe me, it will.

#5 GTA Observer on 05.21.15 at 7:05 pm

Aspen, not Aspin, like the trees they’re mowing down for these miserable cookie-cutter subdivisions.

#6 Baffled on 05.21.15 at 7:09 pm

Garth, I can’t wrap my head around how this nonsense still continues after all these years. I’m an old timer and as far back as I can remember never have I seen this type of crazy behavior when it come to residential real-estate. A catalyst to slow things down has to be around the corner. We can only hope.

#7 gladiator on 05.21.15 at 7:14 pm

50% price increase in one year.
Now, Smoking Man, isn’t it the hockey stick predicting the crash?

#8 Italians love real estate on 05.21.15 at 7:14 pm

Thank you for confirming what I have mentioned several times over past year… The fact that certain parts of the 905 are appreciating at a faster clip then most of the 416.

By the way , I own an investment property near by this site

#9 Condo Minion on 05.21.15 at 7:15 pm

Lawn chair waitlines in Vaughan…..sound positively civilized compared to Vancouver, where murder is the newest way to get your hands on West Van real estate:

http://www.cbc.ca/news/canada/british-columbia/gang-yuan-dismembered-millionaire-allegedly-killed-for-his-money-1.3081189

#10 Honey Dripper on 05.21.15 at 7:17 pm

eschew debt in all forms and if you come here, take and heed the advice or why bother

#11 H on 05.21.15 at 7:19 pm

House down street from us went up for sale last night.

Was chatting with guy down street who lives next door. 3 offers in already. All over list.

$634,000

“illiquid” is a bit of a stretch this days. More like, “move your stuff prior”.

This way you can entertain more offers.

#12 Interstellar Old Yeller on 05.21.15 at 7:19 pm

Any chance some of those lawn chair jar pee-ers were decoys? I cannot fathom $2M for a McMansion in Vaughan.

#13 Smoking Man on 05.21.15 at 7:20 pm

Wolf is back…Carneys right hand man when he was boc

Says rates going to zero…

Im like then Lead Belly of financial forecasting, often copied but credit never given. I need a Kurk Cobain.

http://www.financialpost.com/m/wp/news/blog.html?b=business.financialpost.com/news/economy/stephen-poloz-may-have-to-drop-rates-to-zero-ex-bank-of-canada-adviser-warns&pubdate=2015-05-21

#14 GTA ponzi on 05.21.15 at 7:25 pm

#8 Italians love real estate on 05.21.15 at 7:14 pm
Thank you for confirming what I have mentioned several times over past year… The fact that certain parts of the 905 are appreciating at a faster clip then most of the 416.

By the way , I own an investment property near by this site

– See more at: http://www.greaterfool.ca/2015/05/21/through-the-roof/#comments
____________________________________

Wow people are stupid enough to pay that much to live in the middle of no where? For that money you can live in the annex. People are gambling huge sums of money. When the ponzi crumbles….. 905 will be hit the hardest.

#15 Squirrel meat on 05.21.15 at 7:25 pm

Hookers, blow and oil go well together. There is nothing else in Fort Mac.

#16 Obvious Truth on 05.21.15 at 7:26 pm

What we can clearly see here is that Van city and anywhere within an hour of there is way too cheap. After all, a place with no available land should be way more expensive.

Raise prices. The line ups will be longer.

#17 Julie on 05.21.15 at 7:27 pm

I understand buying a cookie cutter house in the suburbs if that’s all the budget allows – spending $2M for a subdivision house in Thornhill just blows my mind! Do $2M houses still have popcorn ceilings??

#18 ShawnG in TO on 05.21.15 at 7:27 pm

“a former field that even the cows thought was boring”
LOLOL this is one of the reasons I come here everyday. after an exhausting day at work Sir Garth’s blog make it all better.

in Russia, people who line up to buy over valued houses mysteriously get on motherland’s revenue agency’s audit list, and get visits by the KGB. what’s these guys’ background anyway? are they really that lusty? prices are so crazy right now that I can’t understand these people at all.

#19 Spiltbongwater on 05.21.15 at 7:32 pm

They pee in jars? Well that answers one of my questions. Where do they happen to poop?

#20 ANON on 05.21.15 at 7:34 pm

“Can you imagine a better time to be unencumbered and liquid?”

Not ever in the history of the world has there ever been such a time. On top of it, this is the first time this knowledge is widely and freely available, and the population at large has the education to understand simple math and logical arguments.
Sadly, the percentage of “unencumbered liquids” is most likely exactly the same as it has always been.

#21 X on 05.21.15 at 7:38 pm

I don’t think we will have to do a rate cut, the US will do it for us (of sorts) with their rate increase in September.

#22 LH on 05.21.15 at 7:38 pm

What I don’t understand is the unnaturally tight spread between the core C01 and C02 and outer Vaughn. Makes no sense. It’s as if outer Paris traded above Opera. Or Stratford over Soho. Or Westchester over west Village. Time to sell the periphery and buy the core. Can’t short sell RE so just buy (and hold) SFH in the core then. If the periphery crashes one day BOC will dive towards zero to save the suckers, only to benefit the core.

#23 LH on 05.21.15 at 7:40 pm

Or paramatta over Potts point. Or Kowloon over Kennedy town. Or Saitama over Shibuya. I can keep on going :)

#24 Italians love real estate on 05.21.15 at 7:44 pm

#14 GTA ponzi on 05.21.15 at 7:25 pm
#8 Italians love real estate on 05.21.15 at 7:14 pm
Thank you for confirming what I have mentioned several times over past year… The fact that certain parts of the 905 are appreciating at a faster clip then most of the 416.

By the way , I own an investment property near by this site

– See more at: http://www.greaterfool.ca/2015/05/21/through-the-roof/#comments
____________________________________

Wow people are stupid enough to pay that much to live in the middle of no where? For that money you can live in the annex. People are gambling huge sums of money. When the ponzi crumbles….. 905 will be hit the hardest
————–

You 416,ers are comical.you have no idea who the buyers of these homes are and how well capitalized they are. They could just as easily buy in Leaside and Rosedale.

As to your comment about ” getting hit the hardest” ?? Remember to say the same thing next year when they are selling for 2.2 mill .

Try getting out of the core sometimes to open up your mind.

#25 Hot in Kelowna on 05.21.15 at 7:44 pm

Holdings are 50% Cash

Although I read Garth’s comments and basically believe that staying invested is a good course of action over a long time period, I find myself, for the first time in years, in a 50% cash position. I’m not that impulsive, so I wonder if others also have a creepy feeling that the overdue 10-20% correction may appear soon. I may miss out on some slow melt up for a few months, but I’m willing to do that if my gut instinct is correct. I can handle missing a percent or two if I miss a 10% drop.

I haven’t posted often on this site, but I would be interested in other’s opinions…

#26 Shawn on 05.21.15 at 7:47 pm

Alberta

Actually, across Alberta, sales to the end of April were off 24% with listings up and the average sale price down 2%. That’s consistent with Calgary. As of yesterday sales for May are off 25% and the length of time it took the lucky people to sell is up 52%.

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

Don’t worry about Alberta.

Almost everyone here already owns a house and we didn’t need to sell many this year.

Also we are being more selective about who gets in.

Also more people decided to buy a new house instead of a smelly used one. After all, new houses here are incredibly cheap compared to Vaughan.

#27 Shawn on 05.21.15 at 7:49 pm

Livin’ Debt Free

“Can you imagine a better time to be unencumbered and liquid?”

*********************************
True, who wants to be in debt at these record-low interest rates?

More like, ‘Who wants record debt?’. BTW you are starting to be a dick again lately. Maybe you should go back to work. — Garth

#28 Italians love real estate on 05.21.15 at 7:50 pm

27 pm
I understand buying a cookie cutter house in the suburbs if that’s all the budget allows – spending $2M for a subdivision house in Thornhill just blows my mind! Do $2M houses still have popcorn ceilings??

———–

You will be spending much more in the subsequent months for additional phases.

As for popcorn ceilings, the interiors would make any women wet their pants

Sexist. One more like that and you are banned again. — Garth

#29 Godth on 05.21.15 at 7:53 pm

#209 waiting on the westcoast on 05.21.15 at 6:50 pm
From yesterday.
Maybe you should have read the whole post. Here it is again: http://thearchdruidreport.blogspot.ca/

#30 John on 05.21.15 at 7:55 pm

“Can you imagine a better time to be unencumbered and liquid?”

Wanna bet the folks peeing into the bottles haven’t figured out the joke that they’re really illiquid and now they’re dehydrated.

#31 james on 05.21.15 at 7:58 pm

905 real estate like these shacks will take the greatest hit in the GTA.

I would wager it’ll be a drop between 40-70% in real terms by 2025.

Vaughan?

Seriously !?

#32 Full recourse loans on 05.21.15 at 7:58 pm

#3
Foreclosures in Canada are meaningless. The loans are full recourse.

FWIW, the Americans who get to keep their houses and mortgages written off are barely able to pay the property taxes. The municipality will evict.

#33 Kreditanstalt on 05.21.15 at 7:59 pm

“So it’s almost like there are two Canadas.”

Bingo. There ARE.

One consists of those people in technician work, professions, government employment of all kinds and in the (government-coddled) resource industry sector.

These rich people are your neigbours, not “banksters”. They think the economy is going great guns. They carry McMansions with massive mortgages and buy all the toys: NFLX, quad bikes, boats, cell phones for each family member, eat out on demand, shop in the deli section, Ford F-150 pickups (new), frequent US vacations and trophy blonde wives…

If the forest industry and oil and gas were not effectively subsidized by government with near-giveaway natural resource access…ah, but that’s another story! (Hint: would their employers be paying $60/hour for grunt truckdrivers and tree fallers if they actually had to PAY for their access to public resources? Or if there were true wage competition?)

The other Canada. That’s most of us. Those who have to budget carefully, have trouble finding careers (both for themselves AND their kids), work part-time, unemployed, on government payouts, hiding in school to avoid the (non) job market, safely retired on something other than a rich company pension, or are in the informal economy, cutting lawns and pruning garden shrubs for cash…or emigrating…

Income inequality is a direct creation of GOVERNMENT favouritism, medding in the economy and policy choices.

#34 Rent-A-Crowd on 05.21.15 at 8:02 pm

Garth,

It’s possible that some of the people camping out in lawnchairs are paid to be there.

Apple has rented line-ups for years in advance of their latest Iphone release.

Looks impressive and creates attention and will get real buyers sucked into the hype.

Developers are scum. The cost to build those beaver barf boxes is maybe $500,000 fully finished. The 50 ft lot on the cow pasture cost $50,000 to subdivide.

Nowhere near the 1.6 or 1.7 million he’s selling for.

Are people in Vaughn really that stupid?

#35 Hawk on 05.21.15 at 8:03 pm

$1.641 Mill for Vaughan Mansion!

Its quite amazing. Unless one can buy that outright or has a pre-tax income of $400,000 + per year, its mystifying.

I think basically the people have the confidence that no matter what happens the government will find a way to rescue them since after all 70% of Canadians are homeowners. Otherwise why would any middle class person take such large debt gambles.

I am seriously beginning to wonder whether doomers have a point in acquiring physical metals. The way things are going either money will lose all value and hard assets will shoot through the roof or the reverse will happen and indebted people will lose everything, which means basic instinct will kick in and they’ll take all the savings from the rest of us by voting in criminal “public servants” that confiscate everything from the savers.

This will end in disaster for all…….even the ants.

#36 Wolf and Rates on 05.21.15 at 8:05 pm

#13 Smoking Man

So you think the Wolf is right and will Poloz follow his advice?

I should be 100% in USD by like yesterday if that’s the case.

Come to think of it… why actually not? Is there anymore upside in the C$?

#37 crowdedelevatorfartz on 05.21.15 at 8:06 pm

Garth
The Economist is warning of a possible slowdown in the US economy.
Texas seems to be having negative ripples emanating outward due to the price of oil.
A US wide slowdown in job creation may be the result.
Any chance Yellen may postpone her expected rate hike?

#38 John on 05.21.15 at 8:08 pm

Hey in late 2008ish era, the core of Cathedraltown, GTA Markham division, had the same kind of lock and load buy a year ahead event, only to find that the builder wasn’t ready to close. After closing extensions were exhausted, the builder finally had the stuff ready a year late. The builder offered to release the purchasers and return all monies, but cut the price as a teaser, most couldn’t refuse. Not too worry, but the flat-topped models have leaky roofs, blah blah blah…………. Some may have regrets, considering the Cathedral centre piece is locked and cobwebbed. It’s a barren wasteland of faceless walls of yellow brick and cement. No need to buy a lawnmower – use your wipper snipper – basically almost no private grass. And this is what they market as paradise. Now those blighters in Vaughan are doing a rinse and repeat……….. Give up Garth, Canadians are nuts.

#39 mitzerboy aka queencity kid on 05.21.15 at 8:16 pm

Can you imagine a better time to be unencumbered and liquid? – garth

u got that rite
party on blogdogs

#40 MSM-free Zone on 05.21.15 at 8:19 pm

For Canadians, I guess it really boils down to just the monthly or bi-weekly payment now……principal be damned and no longer to be acknowledged nor discussed.

Kind of like when the Harper Cons spin you they balanced the budget, all the while adding a record amount to the national debt.

#41 Burnaby Living on 05.21.15 at 8:21 pm

I have a new favourite listing in my neighbourhood, where 2.3 million (before the bidding war, of course) gets you both great curb appeal and a lovely swimming pool for a refreshing dip:

http://realtor.ca/propertyDetails.aspx?PropertyId=15699537

#42 Italians love real estate on 05.21.15 at 8:22 pm

#22 LH on 05.21.15 at 7:38 pm
What I don’t understand is the unnaturally tight spread between the core C01 and C02 and outer Vaughn. Makes no sense. It’s as if outer Paris traded above Opera. Or Stratford over Soho. Or Westchester over west Village. Time to sell the periphery and buy the core. Can’t short sell RE so just buy (and hold) SFH in the core then. If the periphery crashes one day BOC will dive towards zero to save the suckers, only to benefit the core.
——-

Core is way over bought. Too expensive for how little you get.
Closer 905 has lots of room to grow in both price and influence not to mention how much more house you get.

#43 PP on 05.21.15 at 8:24 pm

All this info is fine and dandy but when is it a good time to a buy a convertable in AB……I hear El Ninyo is coming (don’t mean the weather phenomenon)

#44 José on 05.21.15 at 8:26 pm

David Madani has a very similar track record for prognostications as does Marc Faber.

Maybe you should quit quoting him.

#45 Gemma June on 05.21.15 at 8:27 pm

Meanwhile in Ham-Couver another mangy unwelcome cat has jumped out of the bag. This one, in the guise of a prominent spokesman for the legal community, was interviewed on ‘CTV Unfiltered’.

I wrote several weeks ago that it might be a ‘black swan’ type figure that may turn the tables on HAM, such as a surprise extradition treaty with Canada. But, this lawyer says the problem with HAM is so huge that it is the legal communities suggestion that it is tackles the problem with an Al Capone-like strategy, dealt by using the CRA to differentiate between citizen and non citizen and whether they have paid the taxes owing to both countries…the one we live in and the one they live in. Buyer and seller will be required to file tax documents attesting to their status.

It is suggested that HAM and Local buyers and sellers will disclose their tax and citizenship status at the time of purchase as is currently done in the US.

This way he says ‘the black money’ ( I guess he means the money being laundering from the looting of Chinese ministries) will be exposed and the CRA can have the lawyers withhold the taxable portion of the sale seeing that the HAM sellers are not tax exempt as are Canadians.

I laughed a vindicated laugh when I heard the lawyer repeat my phrase that ‘thousands of for sale signs might pop up’ when people hear of the new law pending and try to get out before they’re caught and reported to the home office.

Anyway, that was a short synopsis of what the guy said. I suppose they will rerun the interview tonight. It looks like just wishing no one would mention HAM for reasons of community and political correctness is not going to see their silence respected if the Vancouver Law Society gets it’s way. I’m just supposing they must know a thing or two about what’s going on.

#46 Doug in London on 05.21.15 at 8:28 pm

Contractors making $125hr last year are working for $85hr, and many staff hires are working for $65hr instead of $80hr…the pain continues.
****************************************
Oh, poor baby, I feel so sorry for you all having to endure such trauma and hardship. I’m crying in my beer. If you believe that, could I sell you some premium priced Nortel, Enron, or Bre-X shares?

#47 BottomsUp on 05.21.15 at 8:28 pm

I am a 905’er and yup fools run wild here.
That @Italians love houses guys is hilarious wow.

Anyhow, I made a bet with the wife that a run down home she thinks is a deal for 620K will not sell – she bets that the home will sell in a week. This house is a mess..

I’m waiting to collect a week’s worth of foot massages unless there’s a 905 fool in waiting

#48 Yuus bin Haad on 05.21.15 at 8:32 pm

I was originally thinking federal conservative minority – now it’s lefty coalition – entitlements for all!

#49 GTA ponzi on 05.21.15 at 8:43 pm

24 Italians love real estate on 05.21.15 at 7:44 pm

You really want to compare vaughn to the Annex? I don’t know where to begin with how ridiculously foolish you sound? I can only smile knowing people like you don’t live in the annex. Enjoy Vaughn.

#50 Leo Trollstoy on 05.21.15 at 8:46 pm

I understand buying a cookie cutter house in the suburbs if that’s all the budget allows – spending $2M for a subdivision house in Thornhill just blows my mind! Do $2M houses still have popcorn ceilings??

As I mentioned in previous posts, Toronto RE prices are crazy and unsustainable. The price of Toronto RE has been going straight up for almost 2 decades across the sales mix. It’s been unreal. Unfortunately I’ve sold all my interests there. It’s been a treat!

#51 Leo Trollstoy on 05.21.15 at 8:49 pm

Toronto real estate is currently and definitely not illiquid. For whatever reason you can sell almost any property and pocket 6 or 7 figures in 2 weeks. The city is insane.

#52 Davy Dogs on 05.21.15 at 8:53 pm

I got a lot of hate when I reported that my personal market winnings have been in the 17% range. All a board the hate train…for the CPP managers

http://business.financialpost.com/news/fp-street/cpp-fund-generates-highest-one-year-return-of-18-3-per-cent

The Couch Potato fans must be livid.

The CPP board’s 10-year average is 6.2% – very similar to a 60/40 balanced portfolio. — Garth

#53 Julia on 05.21.15 at 8:53 pm

Who is buying these homes? $1.7Million. In Vaughan. People lining up.

Was walking home the other night in mid-town Toronto, saw a new house up for sale. Infill. Thought: Looks nice. I guessed $2.5Million. Pull up the Realtor app. (yep, have it on my phone just for fun). $2.995Million. Boy was I wrong. Walked by a week later: Sold.
Who are these people?

#54 young & foolish on 05.21.15 at 8:55 pm

” .. “illiquid” is a bit of a stretch this days …”

Well, that’s why they say the smart money sells at the top?

#55 Realtor007 on 05.21.15 at 8:55 pm

Prior RE corrections can’t be compared to what is going on today, free trade has allowed movement in people and capital like we’ve never seen before. I believe these prices are sticking for the most part, maybe a small correction here and there but nothing significant.

Anyone looking to buy should take it seriously, look into what you can afford, settle for a townhouse just to get into the game because these prices are moving north, Canada is a small country in population and comparing it to the US is pointless, especially when immigrants would rather flock here then there as it is. Just sayin….

#56 Julia on 05.21.15 at 9:00 pm

#24 Italians love real estate
“You 416,ers are comical.you have no idea who the buyers of these homes are and how well capitalized they are. They could just as easily buy in Leaside and Rosedale. ”

That’s the thing though. House in Leaside sell themselves practically. That is a lot of people buying the $1.5 million + houses. Who are these people?

#57 Mark on 05.21.15 at 9:01 pm

“Come to think of it… why actually not? Is there anymore upside in the C$? “

Tons of upside in the CAD$, especially as house prices continue to fall across Canada (including Vancouver/Toronto), and panic starts to set in to repay CAD$ debt.

Just as taking on a loan is effectively “shorting” the currency, repaying a loan is the opposite — “going long”. And we know that a large number of Canadians are going to have to start covering their shorts over the next few years. As risk premia starts to rise, and deflation deepens/accelerates, the upside in the CAD$ could be quite considerable.

#58 Smoking Man on 05.21.15 at 9:03 pm

#36 Wolf and Rates on 05.21.15 at 8:05 pm
#13 Smoking Man

So you think the Wolf is right and will Poloz follow his advice?

I should be 100% in USD by like yesterday if that’s the case.

Come to think of it… why actually not? Is there anymore upside in the C$?
…..

Don’t put to much weight on wolf, he probably reads my every post. In 2009 gloom doom days he made national headlines calling for a housing melt down..

But in all fairness he didn’t anticipate nor did I that rates would get crushed. Wait I did, about two weeks after selling a rental property, but it was to late.

Problem is the world makes to much stuff, does your country want to export. If the answer is yes you need to find away to crush it.

Not only should you be heavey in US dollars , if you can work there to it.

ComuCan is going down the toilet.

#59 Mark on 05.21.15 at 9:04 pm

“Anyone looking to buy should take it seriously, look into what you can afford, settle for a townhouse just to get into the game because these prices are moving north “

Prices have been going down for two years now, the averages only being propped up through significant shifts in the sales mix, and you have the audacity to claim there’s still upside to be had even though an onslaught of supply is coming to market?

OTOH, at least you identify yourself as a Realtor. Which is far more than many of the unscrupulous RE pumpers do in these blog comments.

#60 Julie on 05.21.15 at 9:05 pm

#28 – I can assure you that there isn’t an interior finish in existence that could ever convince many of us, male or female, to spend near $2M to live in the location of this project!!

#61 Italians love real estate on 05.21.15 at 9:07 pm

8:43 pm
24 Italians love real estate on 05.21.15 at 7:44 pm

You really want to compare vaughn to the Annex? I don’t know where to begin with how ridiculously foolish you sound? I can only smile knowing people like you don’t live in the annex. Enjoy Vaughn.

——-
What is most ridiculous and foolish is the constant need for people who live in the 416 to assert the fact that the decision to do so ,is far superior than the choices of those who live in the 905.

You live where you like for the reasons that are most important to you.

So glad snobs like you don’t live here either.

Enjoy the annex

#62 Nemesis on 05.21.15 at 9:09 pm

#Meanwhile… #BackInFortMac…

https://youtu.be/H3E2nY0djIQ?list=PLZbXA4lyCtqoIiN9Fbxs14FEZTK2noYO-

#63 Bigrider on 05.21.15 at 9:16 pm

Italians Love real estate.

As much as your posts irritate most others ,who come here to promote the impending real estate correction thesis and those who choose to figure themselves better than others, based on area codes, you have been correct in both your bullishness for RE prices as well as greater price increases in areas of 905 you have previously predicted would do better than 416.

You have been the luckiest of all only, as none of your predictions are based on any reasoning, just chest pounding.

Sell into your win before its too late.

#64 Italians love real estate on 05.21.15 at 9:20 pm

00 pm
#24 Italians love real estate
“You 416,ers are comical.you have no idea who the buyers of these homes are and how well capitalized they are. They could just as easily buy in Leaside and Rosedale. ”

That’s the thing though. House in Leaside sell themselves practically. That is a lot of people buying the $1.5 million + houses. Who are these people?

——

Julia , would you be surprised to know that the Russians , Persians and Asians buying these homes are buying more than one ? All very close to each other for family members ??

All is not what it seems and all these homes are not being bought on a sea of debt.

#65 Italians love real estate on 05.21.15 at 9:25 pm

#60 Julie on 05.21.15 at 9:05 pm
#28 – I can assure you that there isn’t an interior finish in existence that could ever convince many of us, male or female, to spend near $2M to live in the location of this project!!

———–
Well for sure that is the case. I live in an older home myself on lots of property and I would never be sold on any of these either.

Luckily for the builders they don’t have to convince you or me as they are for all intents and purposes sold out…and fast.

#66 Correct SIR on 05.21.15 at 9:29 pm

That is correct sir, 2 Canadas.
One where personal debt and lack of employment balance out low interest rates, resulting in a relatively flat housing market.
The second, major cities where rich foreigners immigrate to and/or park their money for security. In such cases (TO and Van) high personal debt and lack of income are outweighed by the influx of money into the region, leading to upward pressure on the housing markets in these regions.

There are 6,000,000 people in Toronto. “Foreigners” are not responsible for current prices. — Garth

#67 ShawnG in TO on 05.21.15 at 9:30 pm

seems there’s more outrage at the price than usual. feels like the blog dogs here have taken the red pill, and woke up to the unpleasant reality. so, what are you going to do now? warn others or enjoy steak?

#68 Freedom First on 05.21.15 at 9:35 pm

Can I imagine a better time to be unencumbered and liquid? No, no, as a matter of fact, I insist on it.

#69 Cowtown Cowboy on 05.21.15 at 9:48 pm

Update from Cowtown; the neighbour one door over has listed..$599,900 for about 2000sf with a finished basement. Built in 2006 for about 400k, we’ll see what happens…

#70 Waterloo Resident on 05.21.15 at 9:48 pm

Shouldn’t minimum wage be raised to $20/hr??

It always used to be that minimum wage was there to make sure that the average folk could earn a ‘living wage. That used to be calculated at around ½ of what it took an average person to afford to buy their own house. Didn’t want the guy to become homeless so at least by earning half the normal income he ‘MIGHT’ be able to rent an apartment.

It used to be that a house would cost 2 to 3 times the family’s income, then it rose to around 4 times the family income with these ultra-low ‘EMERGENCY’ rates.

So think about it now: If the average house now costs $1,000,000 and this is 4 times the family income, then a couple has to earn a minimum of $125,000 each just to buy their house. At 2,000 hours per year, that is an income of $60 per hour MINIMUM just to be able to afford a house. Now if you take half that, then that gives you a minimum wage of $30 per hour just so that the average person doesn’t end up homeless and on the street. So when all is said and done, shouldn’t the government raise the minimu wage up to at least $20 / hr to start, and continue gradually over a few more years to $30 / hr?

You don’t run a small business, obviously. — Garth

#71 Thornhiller on 05.21.15 at 9:57 pm

I live very near to this new residential development site. The vast majority, if not all, buyers are foreign investors. They are most likely hedging. The government doesn’t regulate foreign investments in real estate, which is why the house prices are so over-inflated. Canadian residents are not those scooping up these particular $2 million homes. There was a coach bus parked outside the sales office yesterday…

Any evidence pointing to the nationality of these buyers? Are are you just making it up? — Garth

#72 Washed Up Lawyer on 05.21.15 at 10:04 pm

6 million people in Toronto? Ugh. I can’t stand crowds.

“Just turn me loose, let me straddle my old saddle
Underneath the western skies
On my cayuse, let me wander over yonder
Till I see the mountains rise”

“I want to ride to the ridge where the West commences
And gaze at the moon till I lose my senses
And I can’t look at hobbles and I can’t stand fences
Don’t fence me in”

(Bing Crosby)

And much higher median family incomes and much lower house prices.

Go West young man. Go West.

#73 young & foolish on 05.21.15 at 10:08 pm

” … I guess it really boils down to just the monthly or bi-weekly payment now … ”

That’s it today. It’s no longer buy at 3 times earnings, and pay off the mortgage on your way to retirement any more. Now, jobs are temporary, people move every five years or so, and nobody expects to pay off their mortgage, ever. Just sell to the next guy, for hopefully a “profit”.

New economy, new rules, new expectations.

.

#74 mathman on 05.21.15 at 10:09 pm

I like many of the comments don’t understand who would pay this kind of money to live in Vaughan. You have a hellish commute, life revolves around your car, its crazy to me. The CRA would tell you the top 1% of income earners in Canada earn $190k+, who are all these people that can drop $1.6 on a POS in Vaughan? To carry a property at this price and live, you should be pulling 500k + if not more. Stop the insanity.

#75 young & foolish on 05.21.15 at 10:12 pm

“All is not what it seems and all these homes are not being bought on a sea of debt.”

You mean to tell us that you actually know people who sink big cash into such developments?

#76 Smoking Man on 05.21.15 at 10:13 pm

There are 6,000,000 people in Toronto. “Foreigners” are not responsible for current prices. — Garth
………..

Supply and Demand period.

Add supply , prices drop..curb demand prices drop.

In GTA

Drop rates , increase demand, prices go up.
Green belt law, limit supply , prices go up
2000 people a week come to GTA increase demand.

Smoking Man still Bullish. But sick of communism.

USA! USA!

I’m coming baby, but not selling long branch.

#77 Shawn on 05.21.15 at 10:15 pm

Cowtown Cowboy on 05.21.15 at 9:48 pm

Update from Cowtown; the neighbour one door over has listed..$599,900 for about 2000sf with a finished basement. Built in 2006 for about 400k, we’ll see what happens…

***************************************
Develish of him to lowball like that at $600k. Must be trying to ignite a bidding war.

#78 Leo Trollstoy on 05.21.15 at 10:18 pm

Idonthave1million

They want the ‘opportunity’ to purchase a house rather than the ‘right’ to buy a house?

Why?

Some people want the opportunity to purchase Berkshire Hathaway Class A shares. Who cares?

#79 Made in BC on 05.21.15 at 10:22 pm

http://www.coasttocoastam.com/pages/new-chile-volcano-images

I wonder if the UN should charge Chile a carbon tax. An active volcano puts out more CO2 than every car running in the world 24hours a day 7 days a week for 3 years.

Dozens of volcanos do this a year. And that’s just volcanos. But somehow we are to believe “Global Warming is man made”. Keep drinking the Kool Aid !!

#80 Leo Trollstoy on 05.21.15 at 10:23 pm

Using Google shows that Toronto real estate prices have been increasing for years irrespective of sales mix. How long can this continue?

Hopefully not much longer, but who really knows?

Right now, Toronto real estate owners are holding all the cards (and cash).

#81 young & foolish on 05.21.15 at 10:27 pm

” … free trade has allowed movement in people and capital like we’ve never seen before … ”

It’s not your daddy’s economy any more, so how to expect to “return to the mean”? How do you assess this new situation of temp jobs, open capital markets, robotic manufacturing, and widening income inequality?

#82 Made in BC on 05.21.15 at 10:28 pm

#71 Thornhiller on 05.21.15 at 9:57 pm
I live very near to this new residential development site. The vast majority, if not all, buyers are foreign investors. They are most likely hedging. The government doesn’t regulate foreign investments in real estate, which is why the house prices are so over-inflated. Canadian residents are not those scooping up these particular $2 million homes. There was a coach bus parked outside the sales office yesterday…

Any evidence pointing to the nationality of these buyers? Are are you just making it up? — Garth
++++++++++++++++++++++++++++++++++++

Any evidence of them NOT BEING foreign? No because no one keeps any records in order to cover it up. And yet all the thousands of peopee that record such events themselves are apparently lying tinfoilers……..

That was convincing. — Garth

#83 Smudgekin on 05.21.15 at 10:34 pm

Vaughn = Tornado alley.

#84 young & foolish on 05.21.15 at 10:39 pm

“It always used to be that minimum wage was there to make sure that the average folk could earn a ‘living wage’.”

Yes, it “used to be”. It seems the rules have changed, and I don’t think we are going back there soon.

#85 Charity on 05.21.15 at 10:44 pm

#70 waterloo resident

Garth is right…. And you have no clue. Now if you get a minimum wage of even $15 like they want to do in commie Albertastan will you be able to afford your starhucksterz coffee at $10 every morning?
What about anything at Sobey’s that is fresh or healthy?
Everything from charities to recycling to sports will increase exponentially. And we won’t even need HAM’s to blame when it comes to housing like half the people on this blog.
Great job Garth keep it up eventually some of them will get it

#86 Made in BC on 05.21.15 at 10:50 pm

#84 young & foolish on 05.21.15 at 10:39 pm
“It always used to be that minimum wage was there to make sure that the average folk could earn a ‘living wage’.”

Yes, it “used to be”. It seems the rules have changed, and I don’t think we are going back there soon.

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

What a great election platform. Have the minimum wage be the same as the average Public Servant in that province. Seems they have it figured out as to what they are worth……everyone being broke problem solved.

#87 Smoking Man on 05.21.15 at 10:54 pm

Existence is a mirage.

Humanity is pathetic, our brains are too easily programmed. We dance to the coders instructions.

Your brought up with enhanced self-esteem, you will succeed in every endeavor.

Your brought up to rigidly follow rules, question nothing. Your doomed.

We are all made of the same shit. Equal ability.

The losers drank the cool aid the teachers served and put limitations on their upper band limits.

The winners either had a learning disability growing up, or were brought up with money. Arrogance and distrain for others give you value in the eyes of the schooled.

And then their is Smoking Man..

The kid who could not spell or write.

I got a shit load of book food dogs. Let the games begin.

#88 gut check on 05.21.15 at 10:54 pm

“Can you imagine a better time to be unencumbered and liquid?” – Garth

I can tell you what would make it better:

1. There were decent rentals available that I won’t have to pay $500 a month to heat (and still be cold)

2. I didn’t have to become a law breaker in order to live half the year in another country while continuing my self employment work from there.

3. Non-speculative savings accounts actually GREW

#89 gut check on 05.21.15 at 10:57 pm

@ #55 Realtor007 on 05.21.15 at 8:55 pm

that entire post was horsesh#t
just sayin’

#90 Mark on 05.21.15 at 10:58 pm

“Any evidence of them NOT BEING foreign?”

Sure, the current account and balance of trade figures simply do not support enough CAD$ going out of the country, on the balance, for such to be coming back to buy Canadian RE in “cash” as alleged by those who believe that the markets are being driven by foreigners with suitcases of cash.

Nor is there an epidemic of CBSA seizures of unreported currency, which you’d also suspect if there was clandestine movement of funds into Canada.

The Canadian bubble is entirely and completely explainable with the sheer amounts of credit granted by Canadian lending institutions to Canadian borrowers.

Are there some less-than-fully established Canadian citizens who have bought housing in Toronto/Vancouver on a de facto non-recourse basis, using CMHC subprime mortgage insurance (or an overly generous/stupid provincially regulated credit union)? Absolutely. But not enough to move the needle.

The culprits in high prices are in ways that one might not imagine. For instance, 25-year amortizations being issued to 50-year old boomers — previously verboten because its not reasonable to write credit to borrowers beyond their lifespan in the paid workforce. Mortgages being granted to construction workers at the cyclical peaks of their income without substantial discounting. Same with civil servants. Its loose lending standards and a population that is hooked on credit that has created this bubble. And its rather disgusting that “foreigners” are being blamed for what is almost entirely a domestic affair.

#91 Diversified in Oakville on 05.21.15 at 10:58 pm

#25
Being in cash and waiting for the 10% drop is like buying inverse ETF’s. It may work out, but usually not. Invest, diversify, rebalance quarterly, and don’t bother trying to time the market. It is not a consistently good strategy. Been there, done that. I remain 100% invested. Good luck!

#92 OttawaGUYrenting on 05.21.15 at 11:00 pm

613 inventory must be ballooning

Anyone link to Ottawa numbers? Price reductions in my hood. Panic.
Two years ago “pick up truck” and his wife quoted at the local “we are looking for the lottery ticket when we sell” he meant $1M
House hit the market at $480K
When I asked about the sudden exit
“Priced to sell – need to become “custodians of my daughters house, she wants to move to a new larger home”

Sounds like Bank of Dad and Mom

#93 Paul on 05.21.15 at 11:31 pm

Well another eight days of showing homes ,all the sellers not looking at offers until the house has been on the market for a week or more. So after waiting for four days to present an offer there are 15 buyers competing for the same place. My buyer lost out ,the winner?? Paid $125,000 over list.
Time for a Scotch and bed.

#94 BS on 05.21.15 at 11:33 pm

The CPP board’s 10-year average is 6.2% – very similar to a 60/40 balanced portfolio. — Garth

Yes, except CPP has an expense ratio of over 1% of assets. A do it yourself investor could do it for less than 25% of that expense ratio with a 60/40 balanced portfolio using ETFs . It cost CPP $2 billion last year to manage investments. Only a government organization could spend $2 billion managing a portfolio.

#95 Realtor007 on 05.21.15 at 11:44 pm

@ #55 Realtor007 on 05.21.15 at 8:55 pm

that entire post was horsesh#t
just sayin’

—————

you mad, brah?

#96 Mf on 05.21.15 at 11:45 pm

It’s simple really. The builders are smart and the people (we Canadians) are dumb.

Most people are too dumb to understand investments. It takes work and effort. No one trusts “the stock market”. Real estate is perceived as safe and a sure bet and the only way to make money using leverage.

No one likes renting because they feel they are adding to another human being’s wealth. People hate that worse than being in debt. It seems feudal to most Canadians and they have a revulsion to it. Even I grapple with that thought logic.

Real estate also throws around some big numbers (1.6 MILLION) and is optical i.e. “see the house bob lives in? He must be doing really well!”

Believe it or not, these idiot buyers take the super inflated price of 1.6 mil and believe their profit will be in the millions as well.

#73 young & foolish

Exactly. Artificially low interest rates mean affordable monthly’s. Nobody has any desire to pay these mortgages off. They expect to flip.

As with everything else, we people who worry and calculate often fall behind. Paralyzed by fear. The others just act on what they have heard about this market from their parents and friends and jump in blindly.

Question is: who is the smart one? Smoking Man always mentions the herd and you know what, he is right. The reality is the herd is very bullish on real estate and will be for a long time. Great time to be a builder or real estate agent taking advantage of these simple minded folks that’s for sure.

It will reach critical mass sometime, but I think we are still far off from that point.

When that happens all this wealth will disappear in a flash. RE bulls like that Italians love real estate guy will just become silent, and everyone else will be left to pick up the pieces like usual.

I plan on staying balanced liquid and diversified. I don’t give a rat’s A** when this market goes caplooey. No sympathy.

I value my freedom first second and third (that last part is for you Freedom First)

MF

#97 Smartalox on 05.21.15 at 11:47 pm

@Gemma June #45:

Have you ever wondered why certain members of the HAM community wear visors and surgical masks while out and about? I’ve been told it’s not to halt the spread of germs, or protection from the sun, but instead to keep from being recognized while living in relative luxury.

It may not be true, but it is a belief of some visitors that their activities in Canada may be filmed and used against them back home.

#98 Mf on 05.21.15 at 11:51 pm

#55 Realtor007

Lol my girlfriend just emigrated here to Toronto from the Philippines.

Canada was choice number two for her. According to her, everyone of her friends had the good ol’ USA as their number one choice.

Anecdotal for sure but so was your post.

#90 gut check on 05.21.15 at 10:57 pm
@ #55 Realtor007 on 05.21.15 at 8:55 pm

that entire post was horsesh#t
just sayin’

Agreed.

MF

#99 Thornhiller on 05.21.15 at 11:56 pm

#82 Made in BC on 05.21.15 at 10:28 pm

#71 Thornhiller on 05.21.15 at 9:57 pm
I live very near to this new residential development site. The vast majority, if not all, buyers are foreign investors. They are most likely hedging. The government doesn’t regulate foreign investments in real estate, which is why the house prices are so over-inflated. Canadian residents are not those scooping up these particular $2 million homes. There was a coach bus parked outside the sales office yesterday…

Any evidence pointing to the nationality of these buyers? Are are you just making it up? — Garth
++++++++++++++++++++++++++++++++++++

Any evidence of them NOT BEING foreign? No because no one keeps any records in order to cover it up. And yet all the thousands of peopee that record such events themselves are apparently lying tinfoilers……..

That was convincing. — Garth
—————————————————–
I went to the sales centre to see for myself the line up. Got out of my car, went to speak to the people in line myself. They were for the most part Chinese (could easily be international students) that had definitely not been here a long time (thick accent, broken English). They said they had lined up from Friday night and sleep in their cars overnight. In addition, there was a signup sheet on the door, and instructions from the builder that said you had to sign your name in order to guarantee your place in line AND you had to set up a chair and be there when they open or else you lose your spot. There were about 100 names on the sheet and I’d say 98% were Asian names.

Hundreds of thousands of Canadians in the GTA are of Asian heritage with Engkish as a second language. That does not make them foreign. This is proof only of your supposition. — Garth

#100 BS on 05.22.15 at 12:00 am

So when all is said and done, shouldn’t the government raise the minimu wage up to at least $20 / hr to start, and continue gradually over a few more years to $30 / hr?

I have a better idea to make housing more affordable. Lets lower mortgage rates to all time lows never seen before in history. We can also provide these low rates to pretty much anyone who has a pulse. The lower mortgage rates would make the monthly payment cheaper and the house more affordable for the low income earner…

Oh wait they already did that and the opposite happened. Except now not only is housing unaffordable for the low income earner it is unaffordable for everyone.

Lets go with your idea of raising minimum wage to $30 per hour. Then even minimum wage earners could buy a house and I am sure that would help with affordability. More people able to buy can only help. All we need is for government to draft it into law. We will all have houses and all be rich.

#101 Yo yo on 05.22.15 at 12:08 am

http://calgaryherald.com/business/energy/up-to-185000-jobs-could-be-lost-in-oil-and-gas-industry-this-year-study-says

I wonder how many of these anticipated job losses could be in Alberta or in Calgary.

130,000 in Alberta?

30,000 high paying jobs in Calgary?

Just a guess, but that’s possibly 30,000 people trying to sell or not looking to buy this year in Calgary.

#102 Carpe Diem on 05.22.15 at 12:09 am

Here is another stupid idea and keeping to my thesis.

http://www.vancouversun.com/health/consider+government+backed+line+credit+cash+poor+seniors/11071878/story.html

Old, Vancouver “Millionaires” needing help from government because they want to live in their crappy homes they can’t afford or renovate ….

Can’t cure stupid ….

#103 Mf on 05.22.15 at 12:13 am

#61 Italians love real estate

Lol

I grew up in the 905 and I’m 32, prime house horny age demographic. The only reason why people are buying there is just as you said, the 416 is too overbought. It is definitely not their first choice. They are priced out. Besides traffic is horrendous in the 905 and will only get worse. At least the 416 has the subway and the finance sector. The 905 has costco, jack astor’s and the highway 7 stop and go parking lot.

These people are speculating that prices will rise in the 905. They will. But when the inevitable correction comes, whenever that may be, both the 905 and 416 will be rightly decimated. It will not matter if you bought north or south of Steeles.

MF

#104 article deserves a repost on 05.22.15 at 12:40 am

This article succinctly puts together good arguments as to the total creation of housing bubbles and how politicians benefit. The youth are getting shanked.

http://www.newworldparty.org/2011/04/housing-most-manipulated-market-in.html?m=1

#105 Nagraj on 05.22.15 at 12:53 am

My dear friend “The American”,
How are you? I’m sure you’re as tired of all this house-prices-in-Vancouver talk as I am. (And Garth’s post today was grim, wasn’t it.) So let’s get back to sunny Mexico: there has never been in the entire history of Canadian cookery anything even remotely like CHICKEN MOLE.
CHICKEN MOLE was invented by Mexican nuns. It has 97 ingredients, including a ton of bitter chocolate, and takes 79 hours to prepare (not including the 4 days of shopping). It looks HORRIBLE but tastes good (tho it’s an acquired taste.) There are Qick&Easy CHICKEN MOLE recipes but when I tried one it was neither quick nor easy. [Consult Rick Bayless.]
Canada and Mexico are in no way at all comparable. (Ceptin fer auto assembly.)

Your friend, Nagraj

P.S.
Comparing Mexico to Canada is like comparing Carmen Miranda to Ann Murray. BoomChickaBoom.

#106 OZY - this is END-GAME on 05.22.15 at 1:00 am

this is END-GAME – pity the fools paying that much – wait until they get the $25000 property tax bill after closing

make sure you do no get caught….. millions will be caught….in this scheme… be careful, get help

#107 Longterm on 05.22.15 at 1:15 am

#25 Hot in Kelowna on 05.21.15 at 7:44 pm

My problem is not that I’m 50% cash and waiting for a correction, but that I’m 96% invested and 4% cash and desperate for more cash for an inevitable correction. Might need to take out a HELOC.

#108 Vangrrl on 05.22.15 at 1:23 am

‘In this Canada people sit in lawn chairs waiting to spend millions on an unbuilt house in a former field that even the cows thought was boring.’

Omg, You should compile a list of your funniest quotes and publish it. Best seller!

#109 Vanreal on 05.22.15 at 1:46 am

you would have to be smoking something to pay that kind of money for a house in a distant suburb. That would be the same as paying 2 mil for a large McMansion in Langley. I can’t even begin to picture what would possess someone to for that. The city yes but not a far flung suburb.

#110 millenial1982 on 05.22.15 at 1:47 am

You don’t necessarily have to be fairly smart to be fairly rich. Or even better, you can be really smart in some ways but incredibly stupid in others. We all know the type, and these are some fine examples in play.

#111 Brydle604 on 05.22.15 at 1:49 am

I notice all these new 1m houses represent life on a ladder. Stairs every where.
Just wait until someone in the family needs a wheel chair.
House for sale.
Give me a Rancher with a full cement basement any day. Now that is luxury living to me.

#112 nubbers on 05.22.15 at 2:05 am

Realtor007 @55
Your post has prompted me to read up about Upton Sinclair and his quote:

‘It is difficult to get a man to understand something, when his salary depends upon his not understanding it’.

I am really curious as to his original context for this quote, but my Google foo is not up to it. Can anyone point me in the right direction?

#113 juno on 05.22.15 at 2:20 am

Bring it on. Love to see a 75 cent dollar. They say 75 but I can see 70.

The cost of living going through the roof. Kill the middle class, dry up the food bank.

At the end of the day USD will be king…..

#114 Made in BC on 05.22.15 at 2:44 am

#91 Mark on 05.21.15 at 10:58 pm
“Any evidence of them NOT BEING foreign?”

Sure, the current account and balance of trade figures simply do not support enough CAD$ going out of the country, on the balance, for such to be coming back to buy Canadian RE in “cash” as alleged by those who believe that the markets are being driven by foreigners with suitcases of cash.
+++++++++++++++++++++++++++++++++++++

As pointed out in many many articles that banks and RE agents are receiving billions of dollars of foreign money to pay for mold houses with cash…….

So I ask again…..any evidence there is NO FOREIGN influence?

Then there is this from Huff Post:

http://www.huffingtonpost.ca/2015/05/22/vancouver-real-estate-vancity_n_7418650.html?utm_hp_ref=canada-british-columbia&ir=Canada+British+Columbia

I wonder who is going to service Vancouver when everyone in the service industry leaves…..

#115 Victoria Real Estate Update on 05.22.15 at 3:00 am

# 26 Shawn

“Don’t worry about Alberta. Almost everyone here already owns a house and we didn’t need to sell many this year.”

There was plenty of denial in Alberta in 2007-09 also. It didn’t stop the inevitable then and it won’t stop it now.

This is what happened:

From 2007 to early 2009, SFH prices in Calgary fell at a rate of 12.2% per year (for 18 months) until emergency interest rates were brought in.

. . Calgary Single Family Home Prices. . .
. .Percent Below July 2007 Price Level. . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . .
. .0%. . .*. . . . . . . . . . . . . . . . . . . . .
– 2%. . . . . . . . . . . . . . . . . . . . . . . .
– 4%. . . . . . . . . . . . . . . . . . . . . . . .
– 6%. . . . . . . . . . . . . . . . . . . . . . . .
– 8%. . . . . . . . . . . . . . . . . . . . . . . .
-10%. . . . . . . . . . .* . . . . . . . . . . . .
-12%. . . . . . . . . . . . . . . . . . . . . . . .
-14%. . . . . . . . . . . . . . . . . . . . . . . .
-16%. . . . . . . . . . . . . . . . . . . . . . . .
-18%. . . . . . . . . . . . . . . . . . . . *. . .
—————————————————————-
. . . . . .July. . . . .January. . . . January.
. . . . . 2007. . . . . 2008 . . . . . .2009. .

(source: a Calgary realtor‘s site)

From 2007 to early 2009, SFH prices in Edmonton fell at a rate of 12.4% per year (for 21 months) until interest rates were slashed from near-normal levels to emergency levels.

. Edmonton Single Family Home Prices. .
. Percent Below May 2007 Price Level . .
. . . . . . . . . . . . . . . . . . . . . . . . . . .
. .0%. . .*. . . . . . . . . . . . . . . . . . . .
– 2%. . . . . . . . . . . . . . . . . . . . . . . .
– 4%. . . . . . . . . . . . . . . . . . . . . . . .
– 6%. . . . . . . . . . . . . . . . . . . . . . . .
– 8%. . . . . . . . . . . . . . . . . . . . . . . .
-10%. . . . . . . . . . . . . . . . . . . . . . . .
-12%. . . . . . . . . . *. . . . . . . . . . . . .
-14%. . . . . . . . . . . . . . . . . . . . . . . .
-16%. . . . . . . . . . . . . . . . . . . . . . . .
-18%. . . . . . . . . . . . . . . . . . . . . . . .
-20%. . . . . . . . . . . . . . . . . . . . . . . .
-22%. . . . . . . . . . . . . . . . . . . . .*. . .
—————————————————————-
. . . . . May. . . . February. . . . February.
. . . . .2007. . . . . 2008 . . . . . . .2009. .

(source: a Calgary realtor‘s site)

This time it won’t be possible to stop prices from falling by suddenly dropping interest rates from near-normal to emergency levels (Canada already has emergency rates).

#116 juno on 05.22.15 at 3:48 am

A 2 million dollar house is equivlant to

@3% 5,000 per month rental unit
@4% 6.700 per month
@4.5 7,500 per month
@5 8,400 per month

Current I rent for 1500 per month with almost all util paid for. Its more than I need, but we like to stay low profile and have several million stashed away for a rainy day. Collecting dividents and lots in the USD companies collecting interest or invested in the US

The collapses of the dollar just speeds up ourretirement
losing close to 20% on a AAA ++ currency is rad…

When Canada starts printing its $$$ just to make payments, the world will see how stable Canada really is. When the housing market starts to fall, CMHC will issure all bad debt. Causing more $$$ to be printed and a further collapse of the dollar.

Lowering interest rates is like feeding a bottle of scotch to all alcoholic . It a bad solution, but will probably go through just to win the fall election.

#117 Londoner on 05.22.15 at 4:30 am

“Reflecting this, we expect the Canadian dollar to resume its downward trend, ending the year at US$0.75.”

Mandini is a decent economist. He’s been wrong about the housing market but he’s right about the CAD.

“Can you imagine a better time to be unencumbered and liquid?”

Yes I can and it’s exactly because of what you said earlier in your post:

“…we’re told money needs to get even cheaper to rescue things.”

Assets that are purchased with credit will continue to appreciate as long as the cost of borrowing remains low (or gets lower). The best time to be unencumbered and liquid is when the cost of borrowing rises, which it has not (yet).

#118 Steve French on 05.22.15 at 6:22 am

Smoking Man:

Hey Smokey what do you think of Tim Babcock comin’ to the Leafs?!

cheers mate,

Steve-o

#119 Sheane Wallace on 05.22.15 at 6:31 am

so no rate increases in Canada. Instead sinking dollar, rate cut but bonds rates remain low?

Hello?

Congratulations to the savers and retirees. Write thank you letter to Joe and Poloz.

#120 Sheane Wallace on 05.22.15 at 6:34 am

if this thing goes for a little longer we will probably soon experience total collapse of the economy and the Ca dollar. Specially if oil and commodities go down further. If Fed increases this year we are doomed.

#121 Italians love real estate on 05.22.15 at 7:01 am

at 10:09 pm
I like many of the comments don’t understand who would pay this kind of money to live in Vaughan. You have a hellish commute, life revolves around your car, its crazy to me. The CRA would tell you the top 1% of income earners in Canada earn $190k+, who are all these people that can drop $1.6 on a POS in Vaughan? To carry a property at this price and live, you should be pulling 500k + if not more. Stop the insanity.
———-
Cash buyers mathman. None of these over seas buyers
have access to CMHC

75 young & foolish on 05.21.15 at 10:12 pm
“All is not what it seems and all these homes are not being bought on a sea of debt.”

You mean to tell us that you actually know people who sink big cash into such developments?
——-
No much better. I know both the builders well and the principles of the RE agency they use to sell them.

I mean , after all , we’re all paisano’s

#122 Smoking Man on 05.22.15 at 7:09 am

#110 Steve French on 05.22.15 at 6:22 am
Smoking Man:

Hey Smokey what do you think of Tim Babcock comin’ to the Leafs?!

cheers mate,

Steve-o
…………

I am think Tananbom just got goosed to the tune of 50 million USD.

To much external pressure in this town, players to din
stracted. Media greenzy 24/7

Nothing will change.

They need to hire someone with a phd in Herdonomics to do a reverse mind fk on the players. Only then can they win.

#123 Italians love real estate on 05.22.15 at 7:39 am

#103 MF

You fail to u d’état and that buyers at 2 million dollars DO have the option to live in the 416 they choose the 905, as do I.

You are correct in your assertion that in a RE correction both area codes will get hit ( if it ever happens of course)

In addition to the Costcos etc you mention we have I. 905, we also have space , better newer homes and quieter streets.

In addition to the subways et all you mention for 416 , you have constant noise, crowds , pee soaked alley ways

As I mentioned earlier, you make your choices on living arrangements based on what’s most important to you

#124 David McDonald on 05.22.15 at 7:39 am

Hot in Kelona is 50% cash and worries about a correction. Diversified in Oakville is skeptical of timing the market; he is following Garth’s algorithm. I should as well but I fear the market’s frothy so I am in a conservative position with 40% cash since April.

Who is right? At this time, maybe everybody is. Given the facts it depends on how you weigh risks. Buffett is sitting on 80 billion in cash. Clearly he sees a risk.

Garth’s algorithm makes good sense and I am converging to it but in this case like Hot in Kelona I want to see the market reaction to a Grexit and US rate hike. I am waiting until fall and my only action is to diversify partially to India ETF’s and convert Canadian dollars to American.

#125 Ross R on 05.22.15 at 7:44 am

On top of house price escalation it is interesting to read what these guys have to say about inflation…yeah yeah I know it is from the US, but I think it is quite relevant to Canada too. This certainly seems more real to me based on the cost of my groceries alone each week…. http://www.chapwoodindex.com/

#126 LOL Canada on 05.22.15 at 7:48 am

Why real estate keeps going up?
Low and lower rates
House prices increasing causes people to spend the equity on more house.
Extended Amortizations Keeling payments in line.
Mortgage insurance and bulk mortgage insurance
Credit default swaps

When will it go down?
Higher rates
Unemployment
Boomers selling to fund retirement
Cmhc privatized
Suprime bust
Oil to 20

Prices can’t go down in Canada though. If they did, we would have problems:
130 thousand realtors
50 thousand mortgage people
300 thousand bankers
100 thousand home construction
Trickle down effect 500 thousand

A real estate crash or decline would impact over 30% of the Canadian market. We are on very thin ice by not diversifying our economy. We should be an envy of the world in tech and innovation, but all we do is sell houses to each other.

#127 crowdedelevatorfartz on 05.22.15 at 8:23 am

@#119 Steve Quebec

Its actually Mike Babcock but hey! Anyone can mess up a name.

$50 million for a coach…..

Vancouver is a perpetual loser as well and the areana sold out year after year after year.
Until the fans got tired of paying for $8 beer in plastic cups, $100 seats in the nosebleeds, $20 parking to have their cars broken into…….you get the idea.

http://www.google.ca/url?sa=t&rct=j&q=&esrc=s&frm=1&source=web&cd=7&cad=rja&uact=8&ved=0CEsQFjAG&url=http%3A%2F%2Fwww.vancitybuzz.com%2F2014%2F09%2Fdemand-vancouver-canucks-tickets-hits-15-year-low%2F&ei=YR9fVdfbMZe4oQTOvoF4&usg=AFQjCNHM3AcCVzfaPOnhYJf6svMkRwTSsA

I wonder what next seasons Leafs tickets will cost…….higher ? per chance? Good luck with that.

#128 My Wife Loves Garth on 05.22.15 at 8:30 am

I was witness to the madness in Vaughan.

The wife insisted we go over to check out the “dream” homes for fun.

When we got there on a Wednesday afternoon, there were over 70 people camped out sitting on lawn chairs literally fighting to put their red dot on the site map.

The parking lot was rammed and they had security guards controlling the feeding frenzy.

The wife and I stooped to chat to one of the 27- year old administration girls.

When we asked her to give us a break-down on the scene…she told us most of the buyers were extended families (mom, dad, cousins, grandparents and kids and dogs) combining to grab these huge monster homes.

She also said some parents were plunking down $150 K (which was the minimum deposit) for their adult children.

She also described how total strangers were competing and bragging when they checked off the boxes for the hundreds of thousands in upgrades. Btw…one measly potlight would run you $300!

The security guards had to lock down the place for a few hours so the “VIP” buyers could sign the docs and throw down certified bank drafts in the showroom offices.

I must admit the homes were absolutely gorgeous. Beautifully designed with amazing layouts. They even smelled good. (They sprayed that matrix mind control fragrance in every room)

The wife was visibly getting aroused dreaming of nesting in these beautiful mansions overlooking Bathurst St.

Luckily I have been giving her a consistent dose of Garth’s Blog almost every day for the past year.

She agreed to sell the Richmondhill townhouse for top dollar to a greater fool last month.

We then took the windfall and invested the tax free proceeds into a portfolio that spews off over $1200 per month.

Now we are happily renting a 5 bedroom 3500 sq ft $1.1 million dollar home just up the street in a posh part of Richmondhill. The nice landlord is happily cashing our $2300 a month cheques and all we have to do is make sure we cut the grass.

THANK YOU GARTH!!!

#129 LP on 05.22.15 at 8:46 am

#113 nubbers on 05.22.15 at 2:05 am Realtor007 @55 Your post has prompted me to read up about Upton Sinclair and his quote: ‘It is difficult to get a man to understand something, when his salary depends upon his not understanding it’. I am really curious as to his original context for this quote, but my Google foo is not up to it. Can anyone point me in the right direction? – See more at:

********************************
Is the following what you were looking for?

I, Candidate for Governor: And How I Got Licked (1935), ISBN 0-520-08198-6; repr. University of California Press, 1994, p. 109.

#130 R on 05.22.15 at 8:47 am

Its all boils down to interest rate: Few more cut and real estate will fly over the roof: Question is; will government do anything? likely not they don’t see an issue

#131 Holy Crap Wheres The Tylenol on 05.22.15 at 9:05 am

#76 Smoking Man on 05.21.15 at 10:13 pm
There are 6,000,000 people in Toronto. “Foreigners” are not responsible for current prices. — Garth
………..
Supply and Demand period.
Add supply , prices drop..curb demand prices drop.
In GTA
Drop rates , increase demand, prices go up.
Green belt law, limit supply , prices go up
2000 people a week come to GTA increase demand.
Smoking Man still Bullish. But sick of communism.
USA! USA!
I’m coming baby, but not selling long branch.
___________________________________________
That Metro Toronto or GTA, not Toronto proper which currently sits at around 2.8 million people! Everyone uses the two numerical totals interchangeably. It can be confusing. Anyway its not foreigners that are responsible for Toronto’s current prices, its idiots!

http://news.nationalpost.com/toronto/metro-toronto-population-blasts-above-six-million-according-to-stats-can-montreal-at-four-million

http://www1.toronto.ca/wps/portal/contentonly?vgnextoid=57a12cc817453410VgnVCM10000071d60f89RCRD

#132 Holy Crap Wheres The Tylenol on 05.22.15 at 9:13 am

#123 Italians love real estate on 05.22.15 at 7:39 am
#103 MF
You fail to u d’état and that buyers at 2 million dollars DO have the option to live in the 416 they choose the 905, as do I.
You are correct in your assertion that in a RE correction both area codes will get hit ( if it ever happens of course)
In addition to the Costcos etc you mention we have I. 905, we also have space , better newer homes and quieter streets.
In addition to the subways et all you mention for 416 , you have constant noise, crowds , pee soaked alley ways
As I mentioned earlier, you make your choices on living arrangements based on what’s most important to you
____________________________________________
You are somewhat correct however for example down in Smoking Man’s area in Long Branch we have a friend who lives in a 3.2 million dollar home yet five blocks away are little two bedroom shacks for $550K to $650K. Now take that $650 and come out here to Oakville south of Rebecca and you wont find anything, not even another two bedroom shack. Even within the burbs there are huge difference in what your Toronto home money will buy you depending on the area. So its still, location, location, location.

#133 Holy Crap Wheres The Tylenol on 05.22.15 at 9:23 am

#13 Smoking Man on 05.21.15 at 7:20 pm
Wolf is back…Carneys right hand man when he was boc
Says rates going to zero…
Im like then Lead Belly of financial forecasting, often copied but credit never given. I need a Kurk Cobain.

http://www.financialpost.com/m/wp/news/blog.html?b=business.financialpost.com/news/economy/stephen-poloz-may-have-to-drop-rates-to-zero-ex-bank-of-canada-adviser-warns&pubdate=2015-05-21
– See more at: http://www.greaterfool.ca/2015/05/21/through-the-roof/comment-page-3/#comment-374377
___________________________________________
Bank rates going to zero a huge mistake for all. An appreciating Canadian dollar will spur growth more than a depreciating one. With a low CAD $ we are all doomed to purchasing everything that is not made here at a higher cost. Manufactured goods, agricultural imports, raw materials, machinery and our own fuel which is based on a USD. As in life there is a happy balance on the US/CAD $ unless your a commie pinko unionist and just don’t give two $hits and listen to idiots trying to drive exports based on a low CAD $. The key to success in exporting is not to have a peso based economy but a competitive one.

#134 McNutty on 05.22.15 at 9:23 am

This bloke I know just bought a house in midtown Toronto, and has been working feverishly to get it into order: new windows, etc. And now he has found out that his employer is closing the department he works in at year’s end, and he’s out on his arse. I wonder if he’s better off selling the house right now, or waiting for year’s end…
He’ll never listen to me, so it’s academic. I told him not to buy, so why would he smarten up now?

#135 Italians love real estate on 05.22.15 at 9:26 am

#133 holy crap where’s the tylenol

Yup , location , location location is still the key.

Yonge and 407 is one of the hottest in the GTA.

Now , north richvale is 8th fastest appreciating region in the GTA ( just north of yonge and hwy 7/407. Source was in last months toronto life magazine.

No one should be surprised at the madness at Bathurst and major Mack as today’s post illustrates

#136 Renegade on 05.22.15 at 9:34 am

I am depressed. For years I thought the market would crash and was unsustainable. Now, even though our household income is over 200k, i feel we can not afford to buy a house. paying a million for a average house in the GTA is crazy. Is everyone else in Toronto suddenly millionaires? I just don’t understand it! I am so sad and disgusted with all the greed in the world!

#137 The American on 05.22.15 at 9:38 am

At #106: Nagraj, no comparison was ever mad between Canada and Mexico whatsoever. I would never compare the two countries…. Mexico, as we all know, has delicious food. Instead, I was presenting a counterpoint to your view you had stated, “At #200: Nagraj, you said, “… As long as the Canadian economy holds up reasonably well compared to the US economy, and as long as Canadian unemployment isn’t very much higher than American unemployment in the border states, and as long as Canadian prices aren’t insufferably higher – Canada has time to develop a clearly unique identity.”

My response to you was, “I’m not going to agree or disagree. It is clear, however, by your position that once again Canada would rely on the U.S. by the measure for which it can grow or not grow in its future. Hmmmmmmm. I suppose I am failing to understand the connection in this statement you make for having a relatively good economy, relatively healthy employment, and affordability (all relative to the U.S., mind you) and having or creating a unique identity as a nation. Might I point out there is this country South of the U.S. called “Mexico,” with a very clear identity and culture as a people, without any of the things you mentioned.

As for the CBC being mandated to promote national unity, well that’s quite concerning in itself, and it is certainly not in the best interest of unbiased or influenced journalism. I suppose that is why the Canadian news is obsessed with only the socio-economic and political challenges going on in the U.S., as opposed to looking inward to its own land and reporting on the big topics that are actually afflicting Canada.”

I used Mexico as an example to demonstrate another country that has, in fact, it’s own identity and culture, without any of the things you state are necessary to allowing Canada to develop its own culture. If you prefer, you may replace the country, Mexico, for a country of your liking. Still, it won’t be comparing Canada to that country.

#138 Linda on 05.22.15 at 9:47 am

The CPP is reporting returns of 18.3% on investments last year.

Just try getting that out of your TNLTB mutual funds!

This kind of low-overhead, well-managed pension is exactly why Ontario’s proposed pension will be a huge political winner if it comes into force after the federal election (assuming no major federal changes), and why people will vote federally for NDP or Libs in part based on whoever promises the best retirement security like this.

It’s also why the TFSA increase, stored at low interest by most (who can even contribute) in the orange guy’s shorts, will have little traction on the thinking of most voters.

I’d bet the farm that we are heading for much more expanded public pensions and whoever can offer and manage them the best will be in government for decades to come.

These kinds of secure returns, contrasted with the hazards of DIY, are exactly the kind of security and comfort that voters will seek, especially the retiring boomers and the hordes of younger contingent workers.

They might not even have to sell off their overvalued real estate to survive!

Self-directed investing is just an idea, or worse, a disaster, for 95% of people, and most ‘financial advisors’ are just undereducated hacks caught in a horrible conflict of interest.

Hard to see anything that will stop this emerging trend.

http://www.theglobeandmail.com/report-on-business/canada-pension-plan-fund-sees-best-ever-annual-return/article24546796/

#139 Dup on 05.22.15 at 9:58 am

I feel so poor when I see people buying these expensive homes. No matter what I would have done in this life I still would have felt poor when I see this…
Yes I am a Gen X

#140 Say no to Yoga pants on 05.22.15 at 10:14 am

who says brah anymore? lol

Vaughn is to the Annex as Lillooet is to Arizona

2.2 mil? GOOD LORD LOOK WHAT THAT BUYS IN OTHER CITIES

you can buy an 80 acre olive farm in France for 1.2
you can sell the olives as well

http://www.charming-provence-real-estate.com/en/luxury-real-estate-in-south-of-france/

lots of it is 300K euros

you folks are so far gone there is no hope

#141 pwn3d on 05.22.15 at 10:23 am

#100 Thornhiller on 05.21.15 at 11:56 pm

I went to the sales centre to see for myself the line up. Got out of my car, went to speak to the people in line myself. They were for the most part Chinese (could easily be international students) that had definitely not been here a long time (thick accent, broken English). They said they had lined up from Friday night and sleep in their cars overnight. In addition, there was a signup sheet on the door, and instructions from the builder that said you had to sign your name in order to guarantee your place in line AND you had to set up a chair and be there when they open or else you lose your spot. There were about 100 names on the sheet and I’d say 98% were Asian names.

——————–
Hey, I believe in HAM as much as the next guy, but this isn’t accurate. The list was about 2/3 Chinese and 1/3 mainly Russian and ‘other’. The list on the door was also not from the builder, that seems to be something the line made themselves and I don’t believe the builder honoured it, you had to be in line when the doors opened.

I’ve noticed a big difference between phase 1 and 2 – phase 1 seemed to involve a lot of local purchasers upgrading their current home. The prices in this area have exploded the last 10 years and that is why it was affordable to them. Phase 2 isn’t nearly as affordable as it is up by about 40% now which is way faster than the area has gone up the last year.

#142 Marie on 05.22.15 at 10:37 am

Realtor sells leaky condo owned by his son to mentally disabled woman says…it’s not as bad as it sounds

http://www.cbc.ca/news/canada/british-columbia/james-sidney-parsons-victoria-realtor-accused-of-conduct-unbecoming-1.3079354

#143 RichHillGirl on 05.22.15 at 10:40 am

Why buy in Vaughan when you can buy a new house on a 50-foot lot in North York for under $1.4 ???
http://www.realtor.ca/propertyDetails.aspx?PropertyId=15677270

Of course it’s not gonna sell for asking…

#144 Julia on 05.22.15 at 10:42 am

#124
“In addition to the subways et all you mention for 416 , you have constant noise, crowds , pee soaked alley ways”

You should come down and visit more often, it’s not what you think.

It is a choice. I choose to walk place: tennis courts, great restaurants, parks etc… I have time to do all that because I have a postage size lot to take care of and small house to clean. I leave our only car at home most of the time and take 20 minutes to get to work on the subway while reading a book.

#145 NoName on 05.22.15 at 10:51 am

#26 Shawn

Also more people decided to buy a new house instead of a smelly used one.

—————————
nothing beats fresh smell of particle board formaldehyde. :)

#146 Holy Crap Wheres The Tylenol on 05.22.15 at 11:41 am

#138 The American on 05.22.15 at 9:38 am

At #106: Nagraj, no comparison was ever mad between Canada and Mexico whatsoever. I would never compare the two countries…. Mexico, as we all know, has delicious food. Instead, I was presenting a counterpoint to your view you had stated, “At #200: Nagraj, you said, “… As long as the Canadian economy holds up reasonably well compared to the US economy, and as long as Canadian unemployment isn’t very much higher than American unemployment in the border states, and as long as Canadian prices aren’t insufferably higher – Canada has time to develop a clearly unique identity.”

My response to you was, “I’m not going to agree or disagree. It is clear, however, by your position that once again Canada would rely on the U.S. by the measure for which it can grow or not grow in its future. Hmmmmmmm. I suppose I am failing to understand the connection in this statement you make for having a relatively good economy, relatively healthy employment, and affordability (all relative to the U.S., mind you) and having or creating a unique identity as a nation. Might I point out there is this country South of the U.S. called “Mexico,” with a very clear identity and culture as a people, without any of the things you mentioned.

As for the CBC being mandated to promote national unity, well that’s quite concerning in itself, and it is certainly not in the best interest of unbiased or influenced journalism. I suppose that is why the Canadian news is obsessed with only the socio-economic and political challenges going on in the U.S., as opposed to looking inward to its own land and reporting on the big topics that are actually afflicting Canada.”

I used Mexico as an example to demonstrate another country that has, in fact, it’s own identity and culture, without any of the things you state are necessary to allowing Canada to develop its own culture. If you prefer, you may replace the country, Mexico, for a country of your liking. Still, it won’t be comparing Canada to that country.
____________________________________________
Yes we should develop our own identity and culture. We have had around 150 years to work on it. I’m for good beer, rye whiskey, hockey, great fishing, great hunting, poutine, beaver tails, great open spaces, and cottage time with friends and family up north. Oh and thanks for keeping Mexico next to you instead of us :)
Love Mexican culture………………… especially the drug cartel culture they have developed……………

http://www.cfr.org/global/global-conflict-tracker/p32137#!/?marker=16

#147 Julia on 05.22.15 at 11:42 am

http://www.thestar.com/business/2015/05/22/most-toronto-condo-owners-in-it-for-the-long-haul-survey.html

5 years is “the long haul”?

#148 Mike S on 05.22.15 at 12:00 pm

“You 416,ers are comical.you have no idea who the buyers of these homes are and how well capitalized they are. They could just as easily buy in Leaside and Rosedale.

As to your comment about ” getting hit the hardest” ?? Remember to say the same thing next year when they are selling for 2.2 mill .

Try getting out of the core sometimes to open up your mind.”

Do you know what was the average mortgage in that area for the last 12 months?

Would you do us a favor and ask your [email protected]?

#149 Burnaby604 on 05.22.15 at 12:19 pm

#FED IS TRAPPED

Painted into a corner on rates

http://www.bloomberg.com/news/videos/2015-05-22/fed-is-trapped-painted-into-a-corner-on-rates-whalen

#150 TRT on 05.22.15 at 12:45 pm

Garth, what you think of my track record? The gov and BoC will let the currency suffer and not raise rates. Stated that years ago :)

#151 Wowzers on 05.22.15 at 12:47 pm

@147 Holy crap where’s the tylonol that was a really stupid remark you made re: Mexican culture and the cartel. Despite the drug problems and cartel issues in Mexico it doesn’t forfeit the fact they really do have a better developed identity and culture than we do. The American has a valid point in his counterpoint. I am tired of us using excuses such as the ones Nagraj made for why we don’t have identity. Stop using the US as a crutch and rely on ourselves already.

#152 Italians love real estate on 05.22.15 at 12:49 pm

#145 Julia.

I am not being critical of your choice to live in the core.

Many benefits and some drawbacks . Much like the 905 , many benefits and some drawbacks.

Choices . It’s all about choices.

What I am pointing out primarily is the constant need of 416ers to criticize those who choose to own and live in the 905. You will not see the same behavior from 905ers

Remember , our blog host owns in the 905 , caledon ,and rents in T.O

#153 Paul on 05.22.15 at 12:52 pm

#137 Renegade on 05.22.15 at 9:34 am

I am depressed. For years I thought the market would crash and was unsustainable. Now, even though our household income is over 200k, i feel we can not afford to buy a house. paying a million for a average house in the GTA is crazy. Is everyone else in Toronto suddenly millionaires? I just don’t understand it! I am so sad and disgusted with all the greed in the world!
———————————————————-
Think you are depressed now. what if you paid 1.3 million
20 % down then wake up one day and see house is only worth 900k

#154 Italians love real estate on 05.22.15 at 12:52 pm

#149 Mike S

How about you ask your [email protected] and report back to us all .

Bet you it’s less than the 12 month average of those buying in the ” core”

#155 H on 05.22.15 at 12:59 pm

Who here wants to bet on another BOC rate cut coming.

#156 Gemma June on 05.22.15 at 1:02 pm

“Can you imagine a better time to be unencumbered and liquid?”

It’s always best to treat real estate assets as an afterthought in relation to your financial statement. It’s dead wrong to include real estate in your net worth statement as it is a non fungible asset.

I call the truly liquid’ allocation of my portfolio my “F*ck You Money” , meaning I can tell the world to go to hell any time I like. The freedom this affords is cathartic. I always keep 15% cash ( it’s enough to keep us in style for 5 years) and that way I worry about nothing, and take no crap, from anyone, ever….and never think about whether the market is up or down on any given day. Have no mortgage, no rent and no one to answer to. Around here we say “If it ain’t fun…fu*k it”.

#98 Smart

“Have you ever wondered why certain members of the HAM community wear visors and surgical masks while out and about? I’ve been told it’s not to halt the spread of germs, or protection from the sun, but instead to keep from being recognized while living in relative luxury.

It may not be true, but it is a belief of some visitors that their activities in Canada may be filmed and used against them back home.”

*The Chinese have a lot of spies in Canada embedded in the community. Everyone already knows that…but exactly what they film or who they follow is anyone’s guess. The Government of China has stated publicly that they want their money and the crooks who took it back…so you may be correct in assuming that some people are paranoid enough to be using disguises thinking they may be under constant observation.

I’m sure that the most egregious cases of corruption and graft are under active investigation by the Chinese authorities. Our RCMP follows Canadian crooks around the world in the same way that police will do . I’m sure the Chinese want to know where the crooks are when it comes time to start rounding them up. That time will come I’m sure as soon as Canada fells it is politically doable to sign an extradition treaty with China…then the fun will begin. They have in fact already ‘tricked’ quite a few Chinese nationals into going back and they have been promptly arrested and convicted.

But…the Sun Visors ( we call them Darth Vader masks) and the Ppera gloves is a common sight in the Orient as the myth goes that it differentiates a woman from peasant to elite if she has whiter skin. A tan is a sign of low class in Asia generally. We freak them out when we show up in sun tans. The ‘skin whitening’ business is a multi billion dollar thing in the Orient and spas claiming to bleach skin are ubiquitous.

#157 Godth on 05.22.15 at 1:11 pm

Neoliberal Globalization: Is There an Alternative to Plundering the Earth?
http://www.globalresearch.ca/neoliberal-globalization-is-there-an-alternative-to-plundering-the-earth/24403

“One thing remains generally overlooked: the abstract wealth created for accumulation implies the destruction of nature as concrete wealth. The result is a “hole in the ground” and next to it a garbage dump with used commodities, outdated machinery and money without value.[37] However, once all concrete wealth (which today consists mainly of the last natural resources) will be gone, abstract wealth will disappear as well. It will, in Marx’s words, “evaporate”. The fact that abstract wealth is not real wealth will become obvious, and so will the answer to the question of which wealth modern economic activity has really created. In the end it is nothing but monetary wealth (and even this mainly exists virtually or on accounts) that constitutes a monoculture controlled by a tiny minority. Diversity is suffocated and millions of people are left wondering how to survive. And really: how do you survive with neither resources nor means of production nor money?

The nihilism of our economic system is evident. The whole world will be transformed into money – and then it will disappear. After all, money cannot be eaten. What no one seems to consider is the fact that it is impossible to re-transform commodities, money, capital and machinery into nature or concrete wealth. It seems that underlying all “economic development” is the assumption that “resources”, the “sources of wealth”,[38] are renewable and everlasting – just like the “growth” they create.[39]”

#158 victoriabc on 05.22.15 at 1:16 pm

House a couple blocks away listed $899K. Three offers @ full ask within 24 hrs. Signed off 24hrs later in the $950K range. Nice house, not marvelous, maybe 1800 sq. ft., good garden/yard. On a short connector street in Oak Bay but not prime OB.

#159 Investorz on 05.22.15 at 1:26 pm

US Federal reserver today: “If the economy continues to improve as I expect, I think it will be appropriate at some point this year to take the initial step to raise the federal funds rate,” she said.

Bloomberg:
http://www.bloomberg.com/news/articles/2015-05-22/yellen-sees-rate-rise-in-2015-gradual-pace-of-tightening-later

#160 lee on 05.22.15 at 1:28 pm

#154,

When exactly is that going to happen – the $1.3 million home going for $900,000? When we split money 2 to 1 like stocks?

#161 bdy sktrn on 05.22.15 at 1:32 pm

live fomc(for those not listenng in)

sees growth 2.5/yr over next couple, slightly better than post 09

ui rate to move to 5 later this year

disclaimer ‘we could be wrong, very wrong’

thanks jan!

how does she make cay-ahh-ash a 3 syllable word?

no step until

****labour market improvement
****inflation exp 2%

“years to get back to normal”

basically she’s scared shitless what will happen after the first move.

#162 bdy sktrn on 05.22.15 at 1:52 pm

#159 victoriabc on 05.22.15 at 1:16 pm
House a couple blocks away listed $899K. Three offers @ full ask within 24 hrs. Signed off 24hrs later in the $950K range. Nice house, not marvelous, maybe 1800 sq. ft., good garden/yard. On a short connector street in Oak Bay but not prime OB.
——————————-
could not happen.

don’t you read the gal with the unreadable ascii graphs?
she says prices only down in vic.

are you some sort of deceitful pumper?
/sarc off/

like marks ‘sales mix’, she is wedded to an idea and won’t let go.

speaking of sales mix, here’s one for mark…

east van, prime grandview-woodlands, 3 years ago to today. same hood, equal locations , different houses.

A.33’lot B.25’lot
A.new B.new
A.2200′ B.1750′

A.1.1M B.1.4M

25% less product for 25% more dollars but mark will stick to his sales mix story till the end!

#163 Rational Optimist on 05.22.15 at 1:54 pm

153 Italians love real estate on 05.22.15 at 12:49 pm

“Remember , our blog host owns in the 905 , caledon ,and rents in T.O”

Caledon is in “the 519.” Don’t besmirch it, it’s a pleasant place. Despite being governed partly by the same nincompoops who run the show in Mississauga and Brampton, it has managed to avoid the terrible sprawl that characterizes “places” like Brampton, Vaughan, Woodbridge. Caledon remains largely rural.

My abode ceased to be in Caledon when they passed a bylaw against loud pipes. — Garth

#164 john on 05.22.15 at 2:06 pm

By on rumors, sell on facts. As long the HAM money rumor remains, the RE orgy will continue and suck in a lot of young people in the pyramid scheme. Eventually a provincial or the federal government will come with the facts that will quantify the impact of HAM money on RE prices and implement measures to reduce the impact, as the government in Singapore, Honk Kong and Australia have done (other small countries where RE prices have been impacted by HAM money). The magnitude of the RE price correction to follow will depend largely on these measures. The Canadian government has no other means at their disposal to change the course of the RE market. No real interest rate increase in the cards for the foreseeable future, Western governments can’t service their massive debt.

#165 Mike S on 05.22.15 at 2:08 pm

“How about you ask your [email protected] and report back to us all .

Bet you it’s less than the 12 month average of those buying in the ” core””

I already did. the number is not pretty. But then again, I’m not the one claiming that Vaughan is bought by rich Chinese guys, in the same time that China’s own RE bubble is deflating

Again, I urge you to go ahead and ask, then let’s have a discussion about this

Don’t know anything about “the core” though, condos in a crazy oversupply for sure …

#166 DisgustMadeMePost on 05.22.15 at 2:14 pm

Hmm.

Just blew through the comments quickly and could definitely sense a lot of R E frenzy even here. Please, God (insert your preference) let the end come soon.

Almost feels like I’m standing back and helplessly watching the fuse burn the path to the TNT. Just want it to burn a little faster!

#167 DisgustMadeMePost on 05.22.15 at 2:27 pm

And as a comment to those who repeatedly call older folks ‘stupid’ for not jumping all over the idea of selling their paid off homes at these elevated prices …

You must not be old enough yet. I have older parents, 82 and 90, who have lived in their own houses for the entire nearly 60 years of being in Canada. The need to sell to liberate the ‘million’ dollars has come about very recently. Unfortunately it coincides with their advanced age. Still in good health but realizing they’re aging, it actually scares them to think of selling and being at the mercy of a landlord. And though you might find that silly or stupid, older people (and Your God willing) you’ll get there too, don’t always do well with change from their familiar settings.

I think they have the right to be pissed about policies their elected representatives have skewed to keep the RE industry jacked up.

#168 Holy Crap Wheres The Tylenol on 05.22.15 at 2:32 pm

#152 Wowzers on 05.22.15 at 12:47 pm

@147 Holy crap where’s the tylonol that was a really stupid remark you made re: Mexican culture and the cartel. Despite the drug problems and cartel issues in Mexico it doesn’t forfeit the fact they really do have a better developed identity and culture than we do. The American has a valid point in his counterpoint. I am tired of us using excuses such as the ones Nagraj made for why we don’t have identity. Stop using the US as a crutch and rely on ourselves already.
____________________________________________
You need to take the blue pill and chill. It was sarcasm duh! By the way Wowzers when I was stationed Los Angeles AFB before my posting to Beal, Mexican Tijuana weekends were fun, but dangerous even back then. Violence in Mexico is a real problem that has been endemic for years.
Así que mi amigo tomar la píldora y el frío .

#169 saskatoon on 05.22.15 at 2:48 pm

#158 Godth

read paul johnson’s “intellectuals.”

marx is a lying, desperate, outdated, immoral scumbag.

articles referencing/quoting marx need to be taken VERY lightly.

cracks me up when left-wing nutjobs talk about the benefits of “diversity”.

dude:

“the whole world will be transformed into money – and then it will disappear.”

?!?!

this entire article is rhetorical nonsense–like most left-wing propaganda.

#170 Iconoclast on 05.22.15 at 2:48 pm

Mark #91

“Nor is there an epidemic of CBSA seizures of unreported
currency, which you’d also suspect if there was
clandestine movement of funds into Canada. ”

Interestingly, I heard just the other day from someone directly involved that there *has* been an upswing lately of seizures of exactly this;
money in suitcases, mostly from China. My understanding is that it has
gone from the occasional happening to multiple seizures per month.

It’s not a crime apparently. The feds take the cash and the mule goes on his/her merry way. I have no idea if or how this is reported.

#171 Victoria Real Estate Update on 05.22.15 at 2:48 pm

# 159 victoriabc

“House a couple blocks away listed $899K. Three offers @ full ask within 24 hrs. Signed off 24hrs later in the $950K range.”

Proof?

The bottom line in Greater Victoria is that prices of SFHs are falling, despite emergency interest rates.

The average price of Victoria SFHs in the first 4 months of 2015 is lower than in the first 4 months of 2014.

What makes this much worse is that there has been substantial upward skewing of Victoria’s SFH average price in 2015.

There has been a much higher increase in the number of SFHs sold in the more expensive areas (Oak Bay, Victoria, Saanich East and North Saanich) than in the less expensive areas (Sidney, Esquimalt, Sooke, Colwood and Langford) in 2015 compared to the same months in 2014.

This means that Victoria’s average price has fallen much more than the decrease in the average price suggests.

. Average Single Family Home Price. .
. . . . (January through April). . . . . .
. . . . . . Greater Victoria. . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . .
620 K. . . . *. . . . . . . . . . . . . . . .
619 K. . . . . . . . . . . . . . . . . . . . .
618 K. . . . . . . . . . . . . . . . . . . . .
617 K. . . . . . . . . . . . . . . . . . . . .
616 K . . . . . . . . . . . . . . . *. . . . .
———————————————————-
. . . . . . . April. . . . . . . . April. . . .
. . . . . . .2014. . . . . . . . 2015. . . .

(source: Victoria’s board)

How would you know the details of this sale? Are you a realtor? You wouldn’t admit it if you were.

#172 Nagraj on 05.22.15 at 3:09 pm

#138 The American:
Thanks for clearing that up, I had thought you were making an inapt comparison.

You’ve been getting undeserved flak from jingoist types for simply pointing out that too many people here carry on as if we were a morally superior people living in the finest nation on the face of the earth.

#173 Victoria Real Estate Update on 05.22.15 at 3:10 pm

Victoria’s housing market continues to struggle, despite record-low rates.

The average price of SFHs is lower than a year ago (in the first 4 months of 2015).

Victoria’s condo market may have serious issues.

Take a look at this condo:

—– #403 – 25 Government Street —–
—– Listed 12% below assessed value —–

* located in Victoria’s core (James Bay), close to downtown, less than a block from the water

* top floor, ocean and mountain views

* 2 beds, 1 bath

* lonely and unloved

* # 350853

More on this in another post.

#174 David Lee on 05.22.15 at 3:57 pm

@161 Bdy Sktrn:

See attached PDF (and especially Chart 7) for support on Mark’s “Sales Mix” position using actual data (that CREA won’t publish):

http://research.cibcwm.com/economic_public/download/if_2014-0908.pdf

Now, don’t you have something to say to Mark (btw, still waiting on Leo Trollstoy to say something to Mark: he’s first in line, so take a number).

#175 Godth on 05.22.15 at 4:17 pm

#170 saskatoon on 05.22.15 at 2:48 pm

The father of Reaganomics has a message for you:
http://www.counterpunch.org/2015/05/22/the-war-commemoration-racket/

#176 Victoria Real Estate Update on 05.22.15 at 4:24 pm

# 162 bdy sktrn

I posted a chart showing that Victoria’s SFH average price in the first 4 months of 2015 is lower than it was in the first 4 months of 2014. The source for that was Victoria’s board.

In the past Victoria’s board has written about how the sales mix can skew the average and median prices.

That the sales mix can skew the average and median prices to give a false impression of the reality of the situation is clearly fact.

My investigation clearly indicates that Victoria’s SFH sales mix so far in 2015 shows that there has been a much higher increase in sales of SFHs in expensive areas compared to less expensive areas.

This shift in the sales mix has skewed Victoria’s SFH average price higher.

The average price of SFHs is lower than a year ago (year to date) . If we add in the fact that the SFH average price has been skewed upward by a change in the sales mix we can conclude that SFH prices are falling faster than the SFH average suggests.

Do you understand what skewing is?

#177 Davy Dogs on 05.22.15 at 4:31 pm

#162 Bdy

“basically she’s scared shitless what will happen after the first move.”

*Nothing is as it seems…shadow inventory of houses held back by banks and hedge funds is in the millions…Alt-A mortgage default is still going strong.

Employment numbers are nebulous theories as to how many people who have quit looking and no longer qualify for assistance.

GDP is .02%

Wage inflation is being ‘created’ by the Obama Administration forcing large corps to increase min wages…false outlooks all.

Raising rates will increase government debt repayment to unsustainable levels.

Developing countries are burdened with US debt and could be wiped out if rates increase and hot money abandons them.

Yellen won’t raise rates on the back of BS from Obama….can’t.

You guys are funny. Of course rates will rise. — Garth

#178 David #1 on 05.22.15 at 5:13 pm

I know it’s not RE related (but maybe it is for all those cash strapped mortgage holders) but G&M quotes a study by TD economic analyst Admir Kolaj that states annual increase in food prices = 3.6%. What is he smoking !!!

http://www.theglobeandmail.com/report-on-business/top-business-stories/600-what-we-save-in-gas-we-lose-in-rising-prices/article24547530/

#179 pwn3d on 05.22.15 at 5:14 pm

#175 David Lee on 05.22.15 at 3:57 pm
@161 Bdy Sktrn:

See attached PDF (and especially Chart 7) for support on Mark’s “Sales Mix” position using actual data (that CREA won’t publish):

http://research.cibcwm.com/economic_public/download/if_2014-0908.pdf

Now, don’t you have something to say to Mark (btw, still waiting on Leo Trollstoy to say something to Mark: he’s first in line, so take a number).
————–
Great link, especially Chart 6 which is up 30%-50% across the board and now maybe Mark can stfu about prices going down in Toronto the last 2+ years. Somehow I doubt he will.

#180 David #1 on 05.22.15 at 5:19 pm

#9 Italians love real estate

Do you come here to brag or submit something useful?

#181 Nagraj on 05.22.15 at 5:29 pm

#157 Gemma June: “I call the truly liquid allocation of my portfolio my ‘F*ck You’ money’, “If it aint fun . . . fu*k it”
[Note how conscientiously I transcribed your travelling asterisk.]

OBVIOUSLY you didn’t name yourself after St.Gemma Galgani.

Could it be that the “Gemma” is the cohortative German “Let’s go” in its Austro-Bavarian dialect form? Did you perhaps in your fun-seeking life fall in love with a Lederhosened Bua who cruelly ditched you the day after a night in the Alps? Could it be that you now suffer from a Miss Havisham complex whereby the echo of his “Gemma June!” call to arms is eternally repeated in your broken little psyche? Eh?

Or are you veddy Blittish and Italianately named yourself “Gem”?

You’re a card, you are. I look forward to your next post.

#182 David #1 on 05.22.15 at 5:49 pm

Another piece of CMHC BS “The federal housing corporation surveyed 42,191 domestic condo owners” and “Most Toronto condo owners in it for the long haul”. I don’t know the Condo ownership numbers in the GTA but I’m thinking that maybe they surveyed a couple of buildings.

http://www.thestar.com/business/2015/05/22/most-toronto-condo-owners-in-it-for-the-long-haul-survey.html

#183 The American on 05.22.15 at 6:00 pm

At #178: Davy Dogs, rates are going up in the U.S. Canada will follow suit. If it doesn’t, think about the long-term implications to the CAD and Canadian economy. Canada’s going to be paying the piper one way or another. Get used to it.

#184 David #1 on 05.22.15 at 6:01 pm

I’m reading through these posts and seem to see a trend. The “Common people” vs “RE people” in cognito who want to perpetuate their ridiculous fees and market. 5% of 2 Mil = 100K, Not bad for a few days work orchestrating a bidding war. More than most Canadians earn in a year.

#185 cramar on 05.22.15 at 6:13 pm

My abode ceased to be in Caledon when they passed a bylaw against loud pipes. — Garth

————–

Hey, when did you become an organist?

#186 victoriabc on 05.22.15 at 6:15 pm

@#172
No need to be personal and snide but you have to live in your skin.
I am not a realtor, I am retired.
The sale I mentioned is literally 250m from my house.
How do I know the details?
Because the seller is a friend, that’s how.
I offered no opinion one way or the other. You would have seen that had you been in less of a rush to try and bollock someone.

#187 The American on 05.22.15 at 6:16 pm

At #173: Nagraj, thank you for recognizing and acknowledging I really wasn’t trying to compare Canada to another nation. As I’ve said before, Canadians are a very fine people. I have friends there, and I want the best for them. However, it seems most of them are walking with willful blindness, running more into debt with larger mortgages, HELOCs, and unsecured lines of crdedit, claiming “We’re different. We don’t have subprime lending. Or news told us so.” I never would wish on them what Americans went through, but I believe it is quite evident it is already too late. I see precisely the exact same behaviors in the consumers, lenders, media, and developers right as the U.S. real estate market was peaking. However, there isn’t much that can be done in Canada as rates are already sitting at lows as “emergency rates.” I actually believe many are going to hurt worse than my Amerocan friends and family.

I have one friend, ONE, who lives in Toronto, and he has been beat up for years about not buying a home simply because he chose to rent instead. He works hard, pays his bills, has a good job, and he’s good at what he does. As he’s explained to me for quite a while, he has opted to stay out because the economic fundamentals were wrong. I agreed with him. Still, he is constantly berated by his friends and coworkers for not buying. I find this type of treatment toward another upstanding, hard-workin, tax-paying, well-educated citizen to be deplorable. I researched the behavior, and I admit through other various publications, blogs, and statements that the berate meant of renters in Canada specifically is entrenched throughout the country. This seems to be a behavior I am detecting in Canada that frankly I did not witness in the U.S. I can’t recall someone being viewed as a “loser” in the U.S. simply because he/she opted to be smart, even at our real estate peak. Im not saying this behavior is an absolute, but more of a generality.

#188 Trala La on 05.22.15 at 6:26 pm

#182

Of course not, a gemma is a small cellular body or bud that can separate to form a new organism; check the dictionary!

#189 Nora Lenderby on 05.22.15 at 7:23 pm

#186 cramar on 05.22.15 at 6:13 pm
My abode ceased to be in Caledon when they passed a bylaw against loud pipes. — Garth
————–
Hey, when did you become an organist?

Surely if it were Caledon, it must have been a law against loud bagpipes?

Q. You know the difference between an onion and a set of bagpipes?

A. No-one cries when you cut up the bagpipes.

#190 Lord help us on 05.22.15 at 9:14 pm

My 6 year old thought the house looks like the house from Despicible Me.

#191 Harry Wilson on 05.22.15 at 9:41 pm

re #113 nubbers

Hello, Nubby; LP at #130 already gave you the name of the Upton Sinclair book, “I, Candidate for Governor: And How I Got Licked”, but if you want some context, here’s a bit.

The author is talking about the differences between him and his opponent on the issue of administration of old age pensions, but the quote you referenced is actually directed at newspaper editors.

The hundred-or-so words that I left out of the middle just referenced a campaign leaflet distributed by his opponent.

The 1934 book is still available in reprint, but seems to be rather pricey for a small paperback; check your local library.

———————————————–
———————————————–

From “I, Candidate for Governor: And How I Got Licked” by Upton Sinclair, pages 108 & 109:

What Acting-Governor Merriam really thinks about the old age pensions is proved by his actions. He has been acting for six months, and what has he done? Our law provides a pension for needy persons over seventy years of age, and fewer than twenty thousand persons are getting less than twenty dollars per month each; about eighty thousand have proved their right to the pension, but there is no money for them. Has Merriam moved a finger to get that money, as ordered by the law of the state? He called a special session of the Legislature to pass certain fiscal measures, but no word about money for old age pensions.

… (Four short paragraphs on the campaign) …

Acting Governor Merriam got the extra votes which he needed, and now he is Governor-Elect, and the grin is on his face, and on the faces of all the politicians who worked for him, and of all of the big business gentlemen who put up millions of dollars. The poor deluded old people can take their petitions to Congress and to President Roosevelt, and cherish their dreams of two hundred dollars a month until they die.

The newspapers said it would be that way with our fifty dollars a month pension. They would challenge me to say where I was going to get the money, and when I answered they did not publish what I said. Impossible for any editor of a commercial newspaper to understand the difference between a profit system in a state of collapse, driving the State and everyone in it to bankruptcy, and a system of production for use in process of growth, providing security and plenty for all. I used to say to our audiences: “It is difficult to get a man to understand something, when his salary depends on his not understanding it!”

#192 nubbers on 05.23.15 at 4:56 am

LP @130 & Harry Wilson @191

Thanks for that. It is indeed listed as available at my local library.

The context of pensions and newspaper editors is curiously relevant to the Greater Fool blog. However, I guess that the very original context of “It is difficult to get a man to understand something, when his salary depends on his not understanding it!” must have been Upton Sinclair’s campaign speeches. Its a shame he never got voted in.

Anyway, well done the well read blog dogs!

#193 Peter on 05.23.15 at 2:58 pm

I am currently staying in Toronto, on assignment, and I had a robo-call to my suite telling me about this great low-interest lending service to fuel my million dollar apartment dreams…

If that isn’t a harbinger of things to come…

#194 Gemma June on 05.23.15 at 6:00 pm

#182 Naggy

For a malcontent whose name Nagging Rash translates to ‘King of Snakes’ I think you’ve over reached.

“Could it be that you now suffer from a Miss Havisham complex whereby the echo of his “Gemma June!” call to arms is eternally repeated in your broken little psyche? Eh?”

And don’t you just hate it that I have enough cash to walk away from everything…at any time? It shows.

#195 Print baby print on 05.23.15 at 7:13 pm

Noting gonna crash while EU and Japan do threir angry printing after Fed had stopped

After they’ll stop in about one year due to inflation runaway or improved gdp “growth” – then there will be China with own QE. And after that in few years everything going to normalize to the mean. Chinese communist clowns are always the last ones to the party.

Meanwhile SPX is exactly equals JPY performance on normalized base. There is no magic outta there…

#196 Bottoms_Up on 05.23.15 at 10:41 pm

Any one else think why can Jon afford a 150k reno of moms but is not willing to use that money as a down payment on a similar home? WTF

#197 Bottoms_Up on 05.23.15 at 10:59 pm

#152 Wowzers
——-
Canadians do have identity.
-hockey loving
-immune to cold
-friendly eh
-pizza tonight?
-multicultural