#hard

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As you might imagine, the big anti-Boomer, anti-foreigner, anti-politician, anti-anti rally in Vancouver yesterday was a bust. About a hundred residents (maybe 150 including pets) care that the average detached house costs $1.4 million. To be fair, maybe the rest were Tweeting. Or at hot yoga.

In any case, everyone’s off the hook – the mayor (who caved Friday night and called for a speculation tax), the premier and the feds. It’s one thing for 25,000 people to sign an online petition but actual protesting is, like, real hard.

So is voting. In the last federal election, while 73% of everyone over the age of 55 cast a ballot, the rate dropped to 54% for GenXers and plunged to 38% for the under-25 condo-buying set. So what the kids need to understand is that Twitter, Instagram, Facebook, blogging and social media in general ain’t gonna win diddly for Generation Squeeze.

Politics is a numbers game. If you don’t have them, you lose. So if you call for a big rally in downtown Vancouver and get tons of advance media, then light up the entire Twittersphere with live coverage, you’d better be certain you can deliver. Sadly, organizer Eveline Xia did not. And she’s such an earnest young woman. Pity.

The fact is Vancouver, like most of the GTA – where people sleep in their cars to buy $2 million suburban piles – is obsessed with housing. As I strove to make obvious yesterday, this is not the result of cash-laden Chinese dudes invading the Lower Mainland, it’s all about a bubble mentality that has gripped everyone. Yes, stupid cheap rates have engendered reckless borrowing. Yep, the lenders are ethically challenged for their race to the bottom. And, for sure, by taking away the bankers’ risk, the federal CMHC is core to this speculative frenzy.

But central is the intergenerational movement of money, as boomers suck out their own equity and raid retirement savings to enable their horny kids to buy and become mortgaged. Without the Bank of Mom, according to a BeeMo report, 40% of first-time buyers and 50% of move-uppers would not be able to purchase. And if that were to happen, the market would stop dead in its greedy little tracks.

Of course, that won’t happen. Now that delusional parents have stepped in to thwart market forces (ie – when stuff costs too much people stop buying because they don’t have the money. Duh.) it will take require some misery to do the job. It looked for a while like the oil collapse might kick it off, but the effects of that are proving to be more muted and localized. In Calgary, for example, sales are running about 30% behind last year. It’s a similar story in Saskatoon, where last month listings swelled 34%.

The brains at CMHC came out with their forecast on Monday. “Lower oil prices are contributing to disparities between provincial housing markets. A slowdown in housing starts and resale transactions in oil-producing provinces such as Alberta will be partly offset by increased housing market activity in other provinces, such as Ontario and British Columbia, which benefit from the positive impacts of declining energy prices, a lower Canadian dollar and continued low mortgage rates,” said chief economist Bob Dugan.

The feds are predicting the average house in Canada will trade for $422,129 this year, and $428,325 in 2016. But, “due to the recent decline in oil prices, our assessment is that there is more downside risk than upside risk to our forecast.”

So we’ll see. Ditto with interest rates. It seems clear the Fed will pop in the next few months. Maybe even in June, if the latest pronouncement means anything. “If the data comes in according to my forecasts then the time is near where we’re going to be wanting to raise rates,” Fed insider Loretta Mester said Monday – just days after chair Janet Yellen made a similar point. Obviously the US central bank is signalling hard to the markets that the trigger is about to be pulled.

Once the Fed starts to push the needle, it’ll be a lengthy process. Anyone thinking a couple of quarter-point increases will be the whole story isn’t paying attention to history, and fails to understand the risks of too-cheap money. The more debt that citizens accumulate now, the more miserable will be the consequences as rates slowly normalize. I wish the house-lusty kids would get it, and that those taking out 2.5% five-year mortgages would quit thinking we’re the next Japan.

We’re not. But we could be the new Alberta, if Eveline ever learns how politics works. Way worse.

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195 comments ↓

#1 bob on 05.25.15 at 6:50 pm

Who’s fault is it, for the high housing price?

Garth already gave us a take on the real answer. (re: stupid people taking on massive debt).

So if you dig further, you may recall in 2008/2009, housing prices were going down. People were afraid about the next depression. So the governments poured in money for stimulus and lowered interest rates (to buy houses).

So the people to blame are not the foreigners… it’s the government who did this… for the benefit of those who needed it. So blame government, and blame the people who benefited (like auto workers, and people in the construction industry and existing home buyers). Yeah, that’s it, blame existing home owners for not selling their place cheaper.

Or, drag this out further – blame people who voted for to re-introduce the PST and give back 3 billion to Federal Government. In other words, blame stupidity.

#2 Forzudo on 05.25.15 at 6:51 pm

Possible Federal Reserve overnight rate increases aside, there are also plenty of Canadian economists predicting less of a lock-step at the Bank of Canada over the next year or so: http://www.financialpost.com/m/wp/news/blog.html?b=business.financialpost.com/news/economy/dont-expect-the-bank-of-canada-to-follow-the-feds-lead-on-interest-rates&pubdate=2015-05-25

#3 Jackson on 05.25.15 at 6:55 pm

it’s hard to care when ppl are doing it to themselves.

#4 Liquid Independence on 05.25.15 at 6:55 pm

I’ve tried to convince my friends here Vancouver that foreign buyers only make up a small portion of the residential housing market, and are not the main culprit of high housing prices. Sustained low interest rates, and a long term bull market (almost 20 years in the GTA) are the primary drivers of the strong demand in home ownership we see today. I hope the Fed tightens later this year and maybe Poloz will follow soon afterwards. But I have a feeling Yellen doesn’t have the conviction to pull the trigger this year. The economic numbers from the U.S. this year have been relatively weak so far. Maybe 2016 though. But the longer she waits the bigger the asset bubbles will get.

#5 JustMe on 05.25.15 at 6:56 pm

Oliver Stresses Canada Housing Agency Won’t be Privatized

Finance Minister Joe Oliver said that the government is only monitoring the housing market and isn’t concerned if price gains are unsustainable.

Mr. Oliver stated that “we don’t see a need for an immediate shift in policy,”

http://www.oyetimes.com/news/canada/82089-oliver-stresses-canada-housing-agency-won-t-be-privatized-any-soon

#6 Brunett43 on 05.25.15 at 6:57 pm

Hmmm…First? Maybe not.

This mom will not be lending money to my children for a down payment on a house. I bought my first house before marriage when I was 24 by saving for the down payment and a small interest free loan which was paid back promptly. My kids will have to do the same. Sorry Kids! I’m not the Bank of Mom!!

#7 Realtor007 on 05.25.15 at 7:01 pm

The market has been hot, hot, hot, man o man do I feel bad for those waiting for this apparent crash to happen, these prices are concrete and the faster people realize this the better, millions of people are looking to move to Canada and they all want a piece of the land. We as a country are the second largest land mass in the world with a tiny population, so much potential.

#8 Blobby on 05.25.15 at 7:03 pm

I think you’re being harsh on Eveline. I would’ve gone to the protest myself, as i believe the city does need to do something about overpriced property (including rental!).

.. However, the way she was talking about doing it, wouldn’t have worked. Now, if the solution was to get rid of CHMC and limit banks to only lend a maximum of 4x peoples pre-tax income for mortgages..

Now THAT i’d get behind.

(But, despite it being good for people in the long run.. I couldnt see it going down too well with most people)

#9 USDCAD on 05.25.15 at 7:04 pm

One way to protect wealth and purchasing power is to convert C$ into US$. Every Canadian bank is offering cheap US$ accounts to Canadian individuals.

Hedging losses to a drop in our Dollar thus drop in purchasing power is possible by holding US$ cash. At least we have that option and don’t need to go to a black market.

If you are able to save anything, for God’s sake do it in US Dollars. That currency will be worth higher for the foreseeable future. Not making any predictions but the trend seems clear.

#10 Sebee on 05.25.15 at 7:07 pm

Hate to call you out, but didn’t you say that we are the next Japan as far as RE is concerned? You used the fact that RE values dropped while rates remained low in Japan and said same will likely happen here. Or did i misread?

You did. — Garth

#11 Where is mom getting the money? on 05.25.15 at 7:07 pm

bank of mom? I thought Vancouver people only earned 70K yet they have hundreds of thousands to give to their kids?

Yeah and I have a bridge to sell you…

#12 Catalyst on 05.25.15 at 7:09 pm

@#6
“I bought my first house before marriage when I was 24 by saving for the down payment … my kids will have to do the same”

It’s not possible today, even with record low rates; to do the same as was available to previous generations. That is the whole point.

I’m not saying you should provide your kids a down payment and perpetuate this bubble – I just hope you aren’t too hard on your 26 year old kids living at home. :)

#13 Interstellar Old Yeller on 05.25.15 at 7:09 pm

A hundred protesters? That’s an embarrassing lack of follow-through. That doesn’t even qualify #Don’tHave1Million for fringe cult status.

#14 Jay on 05.25.15 at 7:10 pm

Where are all these wealthy parents? Mine live in the Maritimes and I’d be surprised if their lovely home was worth a penny over $75,000. They’re not helping us with our Toronto real estate – not should they!

#15 Newbie on 05.25.15 at 7:31 pm

So that nobody doubts the effectiveness of this blog–after several years of doing nothing with the funds, and two years of lurking here, I have now put my RRSP funds into a balanced portfolio of ETFs. Maybe this is a trend that will catch on…

#16 Oot der Hoos on 05.25.15 at 7:31 pm

Here is data to support the notion a rise in interest rates is due: bank credit is growing too fast in USA.

That is the third graph down the page from this link:
http://scottgrannis.blogspot.ca/2015/05/no-deflation-in-ppi.html

There was no deleveraging overall in that graph. Maybe there were bank profits earned to overcome negative equity of banks 2008-2015. haha That could be called deleveraging; maybe from infinity to 30x.

Shawn is correct about the mechanics of banking. A political party called Social Credit was based on a banking fallacy. The logic error seems to never end, although the S.C. party ended.

I say the 6% inflation of credit when incomes only grow 2% is the criticism we should have with the currently popular central bank socialist-monetarist economic theory, which is evidently failing.

Core inflation is 2% in Canada and USA and that is theft. An additional 2% is real growth. An additional third is 2% and is unaccounted except as debt/savings growth. That 2% compounded credit rate excess is a mathematical difference that cannot go on forever. I think it is ponzi wealth creation but I could be wrong. It could become future fast inflation or default if it goes on for a long time.

Securitizing paper is not a new era in banking such that you can justify that difference. The whole economy could be ponzi now and socialism is failing to deliver income growth. If it was 4% instead of 6% credit growth I would maybe not know the entire economy is ponzi.

http://blogs.reuters.com/rolfe-winkler/2008/04/06/minskyin-brief/

Housing or maybe the whole economy has become a ponzi stage per Minsky:

But by the first quarter
of 2007, the subprime mortgages issued in 2006 had
a surge of early payment defaults. The percentage
of borrowers not making the first payment on their
mortgages rose quickly, which signaled that the
property market had reached the Ponzi stage. For
borrowers, the rationale behind not making the first
mortgage payment can be explained by the call
option effect. If the value of the property goes down,
then borrowers’ call options are worth nothing, so
why should the borrower continue to pay for it?
Once affordability is stretched beyond any rational
sense relative to rent values, borrowers stop seeking
loans. The Minsky journey is over, and the economy
starts heading in the other direction.

#17 Ardy on 05.25.15 at 7:33 pm

The CMHC has been better at forecasting home prices than Garth, but of course it helps when you get to make the rules and change them during the game.

We used to stand at the casino and watch the high rollers throwing thousands down on the tables or pumping the $20 slot machines…….$60 bucks a pull.

Now we watch the million dollar home owners.

#18 Suede on 05.25.15 at 7:39 pm

In metro Vancouver the 40-50% no of first timers buying a place where with money from the bank of mom and dad is too low IMO

I don’t know a SINGLE person of my family, friends and colleagues aged 20-40 that didn’t get help from that bank.

One family with 4 kids. All got money from parents. That’s two houses and two apartments right there. Now multiply out and see why houses are so expensive in yvr. Lots of demand and cash slated for Sfh’s

Good luck saving for a DP. Very few can actually do that.

#19 Spectacle on 05.25.15 at 7:43 pm

Today’s title, #HARD …….and Bad Advice, $1 !

Wow, great haiku Sir!

I had a related and amazing discussion with a client . They said , forget this Hot Asian Money crap, they are getting bad advice. Robertson knee jerk reaction to this Twitter nonsense and Rennies brilliant public commentary only draws the herd away from more significant issues.

The local HAM are for the most part, the Middle Class Asian market merely trying to invest in a future escape plan and $ preservation plan. Kind of like the first generation canadians stocking up on Alpo, and Cottonell , as Garth Turner puts it. Just doing so on a very different scale….

My client added that there is something greater, the Ultra Rich Asian money, that my client just finished a marketing project for. This group doesn’t look for anything under $500,000,000 projects. You may have heard rumour abounding about them in BC, and around the globe.

Seems a large European company even created a custom industrial truck for one of their projects, the mining etc of whole “Mountains” , yes mountains in Asia!

Same Sino businessmen are dismayed that there are not plenty of $billion projects to invest into here in Canada, and they want to do so very , very quickly!

Anyone in business knows how difficult expediency in that capacity is! Deals of that size can’t be forced, at least not quickly in North America.

On the local front, The #Hard will come to those who believe “crappy advice” by the local twitterati. There are bigger issues to invest ones talents into now to preserve your future success.

Mr. Turner is so very correct about one asset class, and the supposed need to own timber shelter.

Regards all

#20 Mom's bank on 05.25.15 at 7:44 pm

re #11

Mom and Dad are tapping the equity in their four walls to afford the kids downpayment. That’s after they afforded the kids college or university tuitions.

Parents are carrying mortgages into retirement and then there’s HELOC….

Yup, believe what you will but the Bank of Mom is working overtime in places like Vancouver.

#21 hot, hot, hot market on 05.25.15 at 7:45 pm

@realtor007

don’t equate GVRD and GTA with Canada

#22 Made in BC on 05.25.15 at 7:47 pm

As I strove to make obvious yesterday, this is not the result of cash-laden Chinese dudes invading the Lower Mainland, it’s all about a bubble mentality that has gripped everyone.
+++++++++++++++++++++++++++++++++++++

Except that every time there is an open house, its foreign chinese dudes or their chinese proxies. These are facts. I’ve been there, seen it happen and know people who have been there and seen it happen. Same is true for a new condo building. This is not anti-chinese……this is facts. Facts which are sorely not reported on MSM. They even admit daily on the news that “no records are kept” of whose buying. Yet we are told continually – we need to know EVERYTHING about you so we can be sure you are not a terrorist financing terrorism. Huh? Wha? Does not compute……..

Anyone who refers to Canadians of Asian ethnicity as “Chinese proxies” has a problem. — Garth

#23 Brunett43 on 05.25.15 at 7:47 pm

@ #12 Catalyst
“I’m not saying you should provide your kids a down payment and perpetuate this bubble – I just hope you aren’t too hard on your 26 year old kids living at home. :)”………………..

Actually, my boys 19 & 24 still live at home with me. Both are working and pay me rent. But they are both socking away every penny they make and maxing out their TFSA’s. A couple more years and I’ll give ’em the boot! But I’ve advised them both not to “house horny”!

#24 Made in BC on 05.25.15 at 7:54 pm

So if you dig further, you may recall in 2008/2009, housing prices were going down. People were afraid about the next depression. So the governments poured in money for stimulus and lowered interest rates (to buy houses).

So the people to blame are not the foreigners… it’s the government who did this… for the benefit of those who needed it. So blame government, and blame the people who benefited (like auto workers, and people in the construction industry and existing home buyers). Yeah, that’s it, blame existing home owners for not selling their place cheaper.
++++++++++++++++++++++++++++++++++++

So it’s also known that NO RECORDS are kept of who is buying houses. So the foreigners are NOT to blame camp keeps saying the same thing over and over again yet they have not stats to prove it. Yet the streets of Vancouver are filled with secret Secret Chinese Police looking for money launderers. Everyone knows someone who knows someone who bought a house or condo from China directly or by proxy through a “Canadian” relative.

Still waiting for proof of stats that foreigners are NOT to blame. Oh I forgot…..there are no stats. This is NOT ANTI-Chinese….these are facts. If it were white anglo Russians doing the same thing…..I guess we would be self hating anti-Anglos?

#25 Freedom First on 05.25.15 at 7:54 pm

I feel for the people in India who are suffering through a massive heat wave right now. Temperatures are in the 40-50 degrees celsius range in some areas.

However, back in Canada, the debt levels of Canadians have risen over a period of years, so like the proverbial frog sitting in a pot of water that has the heat slooooowly turned up, Canadians will not feel the burn until it is too late. Most unfortunately, the taxpayer is at risk.

#26 Nemesis on 05.25.15 at 7:56 pm

“But we could be the new Alberta, if Eveline ever learns how politics works. Way worse.” – HonGT

#HowTheWorldReallyWorks… #Or,InnocenceLost… #”ThePromiscuousSqualorOfBarbarism”… #ABriefIntroductionToPolitics…

https://youtu.be/zMNUcNokvkU

#BonusConnery… #SharpBusinessmen&TheObligatory… #AmusementsOfUnmarriedGentlemen…

https://youtu.be/Lgmzj8eWK8M

#27 Linda on 05.25.15 at 7:57 pm

I’m with #3 Jackson, who aptly comments people are doing this to themselves. I get the desire to have your very own place. I get that new purchasers are not necessarily savvy at the whole house purchase process, because hey, they have not done this before. But what I do NOT get is how anyone can believe they can shell out millions for a place that is maybe worth $400,000 even with all the fancy upgrades on an income that is not commensurate with the purchase price & not be looking at a world of pain. As in, millions of Boomers trying to get their equity out of the house so they can retire & live the good life. Despite the cries of the disenfranchised, Boomers are not all of them wealthy elite who have lots of spare cash to spend on whatever takes their fancy. Most are at best looking at burning the mortgage real soon if they have not done so already & hoping they can get their house unloaded before housing prices adjust sharply downwards.

#28 Canadian sheep on 05.25.15 at 8:05 pm

Canadians don’t protest on the street Garth.

When was last time in recent Canadian history when more than “hundred residents (maybe 150 including pets)” protested – and against what?

#29 Kim on 05.25.15 at 8:10 pm

In terms of attendance, perhaps it was a bust.

However, extensive coverage on every media outlet (print, TV, radio) a statement by the Mayor and making it a major topic of conversation for a few weeks are all pretty good outcomes.

I say kudos to Eveline for finally getting the ‘other side of the story’ out there. For too long, Vancouver media has been inundated with ads from RE pushers: developers, realtors and agencies offering HELOCs.

Until Eveline’s campaign, daring to say anything negative about the Vancouver real estate market was unheard of.

I don’t understand your snarkiness towards her and her attempt to open our eyes to the realities of this market – isn’t that exactly what you have been trying to do here?

If you gave Eveline a million, she’d buy a house. In a heartbeat. The erudite people who come here, in contrast, know better. Right, Kim? — Garth

#30 Hampton Travaille on 05.25.15 at 8:10 pm

To believe that housing in Vancouver will go up forever is to believe that a Pyramid Scheme has found another planet full of people to sell shares to. The question in real estate circles will become..”Sell to Who”?

Simple mathematics suggest that there aren’t enough Chinese in China willing to come to Canada to continue fueling the parabolic rise in prices. In fact there aren’t enough people on Earth to keep any pyramid scam going so that everyone wins. It’s this mathematical fallacy that keeps the greedy mystified.

This is a classic mania…one that will go down in the books….and maybe in time for the next edition of ‘Extraordinary Popular delusions and the Madness of Crowds’. The old adage is “That those inside a bubble can’t recognize it as a bubble”.

Here’s the math

http://www.mathmotivation.com/money/pyramid-scheme.html

If you own a house…sell into this idiocy as soon as you can. If you have thought that this has legs and that your one million will turn to three if you can hang on for another wave from ……Zimbabwe? Don’t wait for sell signal from China.

There’s an old joke in the stock market. It goes like this

‘ A broker calls a mark and says…’Buy a thousand shares of XYZ’…the mark agrees.

The broker calls the next day and says XYZ is up 20 % …going to 50%…you should buy more…the mark agrees.

Next day the broker calls again and reports that the stock is going to double and the mark needs to buy.

A the end of the week the mark calls the broker and says…”I want to sell half my position and take my profits”.

“Sell”? , says the broker. “Sell to who?….You’re the only one who’s been buying”. And the broker hangs ip laughing.

#31 average house in Canada on 05.25.15 at 8:17 pm

The feds are predicting the average house in Canada will trade for $422,129 this year, and $428,325 in 2016.

===

I am not sure what the “average house in Canada” looks like, but what’s the building cost ( material + labor + services + architect + permits + land survey, landscaping, etc.) of an “average house in Canada”?

Replacing a few broken glasses on the green house, broken by the heavy snow and ice cost over $600.

#32 mdm on 05.25.15 at 8:20 pm

here is an article that touts the same thing garth has been saying all along in today’s globe and mail… http://www.theglobeandmail.com/globe-investor/personal-finance/household-finances/for-young-adults-stock-market-a-better-investment-than-home-ownership/article24583446/?service=mobile

#33 cramar on 05.25.15 at 8:23 pm

So the average house price in Canada is $422,129, eh? So instead of buying a house that is way above average (GTA & Van), why not buy one that is below average. For example, in Windsor-Essex County (Ont.) the average is $199,586

http://www.windsorstar.com/business/Housing+sales+rise+Windsor+Essex/11031491/story.html

#34 rawdiswar on 05.25.15 at 8:31 pm

The crazy thing the very people who borrow from parents for the down payment are the same people who complain house prices are too high. I guess they are too short sighted to see they are the major contributors to the problem.

A common refrain I’m hearing, from people outside the GTA, is that housing is overpriced, but only for the GTA. I’m not so sure on that one, there are a lot of over priced bungalows and generally un-spectacular houses all over.

When the Fear of losing money overcomes the Greed of not having a house, things will tip and not before.

#35 Cici on 05.25.15 at 8:36 pm

#11 Where is mom getting the money

That’s EASY: mom’s house has quadrupled (more in BC and Toronto) in price in the last twenty years, and those friendly banks tell her that her that that means her “net worth” has therefore tripled, and they’re happy to let her take approximately 50% of that equity out of the house…virtually interest free!

Now you know what bubbles are made of ;-)

#36 omg the original on 05.25.15 at 8:38 pm

Now that delusional parents have stepped in to thwart market forces (ie – when stuff costs too much people stop buying because they don’t have the money. Duh.)
———-

Bank of Mom/Dad is yet another reason why house prices will not go down anytime soon.

The only thing worse than being forced to sell your house because you cannot afford it, is your kid having to sell his/her house because they can’t afford it.

Bank of Mom and Dad will come to the rescue of 10s of thousand of their progeny that are underwater, when rates finally start going up sometime in the next decade.

Mom/Dad will be bleed dry before they will let the kids go into foreclosure.

Canadian housing debt is and will continue to be a massive transfer of wealth from Boomers and Millenials to Canuck financial institutions and their shareholders.

Long live the Canadian banking oligopoly – I love you and your dividends dearly.

#37 bigtown on 05.25.15 at 8:55 pm

India could teach us a thing or two about housing. There is a heat wave in India now and the millions of people who sleep in the streets are at very high risk of death. You have to be happy to have a room and indoor plumbing and air conditioning and cooking facilities in relation to our Indian friends. There but for the grace of the Good One.

The Danes are embracing cash less transactions and the political climate is pushing the society to embrace debit/credit card use. A cashless society such as Europe with negative interest rates would be expensive for the banking public as banks would charge the public for safekeeping of their savings. Can the news get much worse?

The Ford workers in Venezuela make $8.00 per day..funny how government policy impacts an economy.
The airlines in Venezuela accept only U.S. credit cards as the currency controls established by the Venezuela government have created havoc for day to day transactions.

#38 Andrew Woburn on 05.25.15 at 8:57 pm

Many people have suspected that Saudi Arabia is exaggerating the size of its oil reserves. Now this ambitious policy pivot is announced.

– Kingdom built on oil foresees fossil fuel phase-out this century

Saudi Arabia, the world’s largest crude exporter, could phase out the use of fossil fuels by the middle of this century, Ali al-Naimi, the kingdom’s oil minister, said on Thursday.

The statement represents a stunning admission by a nation whose wealth, power and outsize influence in the world are predicated on its vast reserves of crude oil. Mr Naimi, whose comments on oil supply routinely move markets, told a conference in Paris on business and climate change: “In Saudi Arabia, we recognise that eventually, one of these days, we are not going to need fossil fuels. I don’t know when, in 2040, 2050 or thereafter.”

For that reason, he said, the kingdom planned to become a “global power in solar and wind energy” and could start exporting electricity instead of fossil fuels in coming years.

http://www.ft.com/cms/s/0/89260b8a-ffd4-11e4-bc30 00144feabdc0.html#ixzz3bCXIPbgb

#39 Andres on 05.25.15 at 8:58 pm

I happen to be downtown Sunday running errands (I was going to the Apple store to get my iPod repaired, typical millenial) and so I walked past the protest. As of 12 noon sharp when it was set to start there were possibly forty to forty five people there if you include those who may have just sat down to watch because it looked like something interesting might happen. They tipped their hand and I think now this thing is dead.

#40 Leo Trollstoy on 05.25.15 at 9:00 pm

Liquid Independence

Single malt scotch?

#41 MGTOW on 05.25.15 at 9:01 pm

Want to know why men feel that they HAVE TO BUY A LARGER AND LARGER house? Its because they married, that’s why they need to buy a house no matter how extremely over-priced houses are right now:

Read it all here:

http://happybachelorsforum.com/viewtopic.php?f=4&t=1610

WORDS FROM THE ARTICLE:

((((” Well, love is blind, and damned stupid, if you ask me, and six weeks later they’re married. She got pregnant immediately, ….. , and all of a sudden, mysteriously, her attitude has changed.

He announced to several of us last week that his little ‘LADY’ has decided that Sad Sack no longer makes enough money to suit her needs. She is also demanding he buy a much nicer car and a house, a big house, which he can ill afford these days. She also wants to have her mother come over from Osaka to stay with them and take care of the baby. Not that she plans on going back to work after the kid is born, mind you. It begs the question, if she isn’t working, why does she need help raising the baby…?

But, her mother needs her own room, and what if her sister has to come over, she’s pointed out. She constantly reminds him that as a provider, he is obligated to make sure his wife has a nice home and everything that goes with it. He is routinely shamed if he balks at his load.

This guy is new on the job. He makes about $40,000 a year. Period. He can’t afford a house, or a new car. Or much of anything else .

Yet, the demands are piling up, higher and higher. Every time he’s tried to point out the realities of the recession, she counters by pointing out that a Japanese man would never allow his wife to live in poverty. ” ))))

#42 Smoking Man on 05.25.15 at 9:04 pm

The organizer should have broad cast of FaceBook

Street party free booze.

#43 AB Boxster on 05.25.15 at 9:09 pm

“B.C. finance minister suggests speculation tax wouldn’t control prices” – Globe and Mail

“If property values in Vancouver were to reduce by, let’s say, 5 per cent, that could easily translate into a reduction in equity for families who own homes in Vancouver of $60,000, $70,000 or $80,000.”

Yeah, you wouldn’t want to have multi-million dollar homes that have doubled in price over the past 10 years for no underlying fundamentals other than low rates, to have a reduction in equity of 5 percent.

What a moron.
Duh! A reduction in price is the only way homes become more affordable.

But this is also the government that is seriously looking at providing seniors, with low very incomes, low interest loans, despite their living in multi-million dollar properties.

We would not want to have to force these folks to sell their $2 million dollar + properties in order to survive.
My goodness, what could this to to the housing market if all the grannies sold at the same time!
Better to give them free money, and keep the bubble going.

Do we really elect these buffoons?

They are actually worried about equity loss of 5% despite the massive appreciation over 10 years.

This just confirms to me that housing prices will ‘never’ come down in a significant manner.

The bubble is too big.
The establishment will do anything to preserve the status quo.

If you are foolish enough to remain in Vancouver you must buy now as prices will never drop to affordable levels. Shame on you for doing so, though.

If you are smart enough to leave and need to own real estate, same advice, buy asap.

#44 Buckhorn Bum on 05.25.15 at 9:09 pm

The only real estate worth owning…. Waterfront nuff said. Worth every wasted penny. Enjoy the view, invest the rest. And I didnt even use a realtor. Useless!! Did I mention an acre? And waterfront? Not a cardboard cutout?? What are people thinking…

#45 Marco on 05.25.15 at 9:11 pm

What happens when the Boomer kids get hooked up? Which one sells their Bank of mom and dad down payment paid house or condo? Both? So as to get a bigger place? Joint Bank account?
Talk about getting set up for family feuding and meddling.
Not my cup of tea.
Makes me feel queasy just thinking about it.

Cheers.

#46 Anson on 05.25.15 at 9:14 pm

It’s been how many years since this blog has been predicting a housing market downturn?
There are so many people waiting for housing to turn so thy can buy at the bottom. Here is some sobering news for you…When the market finally turns it will take between 4 to 6 years to bottom…so when you add that to the years already spent (wasted) waiting for a house so you can start your so called life we are talking like ten plus years..Give your head a shake and remember THERE IS MORE TO LIFE THEN OWNING A HOUSE.

#47 Smoking Man on 05.25.15 at 9:15 pm

#35 omg the original on 05.25.15 at 8:38 pm
Now that delusional parents have stepped in to thwart market forces (ie – when stuff costs too much people stop buying because they don’t have the money. Duh.)
———-

Bank of Mom/Dad is yet another reason why house prices will not go down anytime soon.

The only thing worse than being forced to sell your house because you cannot afford it, is your kid having to sell his/her house because they can’t afford it.

Bank of Mom and Dad will come to the rescue of 10s of thousand of their progeny that are underwater, when rates finally start going up sometime in the next decade.

Mom/Dad will be bleed dry before they will let the kids go into foreclosure.

Canadian housing debt is and will continue to be a massive transfer of wealth from Boomers and Millenials to Canuck financial institutions and their shareholders.

Long live the Canadian banking oligopoly – I love you and your dividends dearly.
……..

Don’t be so sure about the banks, they will face insane competition from start ups. Apps that put loan seekers with private lenders. foreign exchange apps between individuals.

Did I mention my son is becoming an iOS developer..I got the Android side covered.

Visualize a vengeful evil laugh.

#48 Mark on 05.25.15 at 9:16 pm

“One way to protect wealth and purchasing power is to convert C$ into US$.”

Oh please… At the top of a USD$ bubble, and you’re wanting to herd people into even more USD$? Just as, according to many, inflation is about to take off and rates are going to rise?

Although currency diversification is a good thing as part of a balanced portfolio, extreme comments, like claiming that wealth is going to be destroyed in the CAD$, especially going into a broad-based asset deflation really is out of touch with economic reality.

#49 Mark on 05.25.15 at 9:23 pm

“I am not sure what the “average house in Canada” looks like”

The problem with the concept of the ‘average house’ is that it is constantly changing. Of course, individual houses themselves don’t change, but the ‘average house’ has changed over the years. So someone who tries to compute a long-term return on ‘average’ real estate, without taking into account the changes in the nature of the average house, or even the mix of transactions in the overall stock of housing (which itself, can change) really is setting themselves up to come to some wrong conclusions.

So don’t feel bad. What makes up an ‘average house’ as far as the CREA “headline” numbers go is ever changing. You might nail down the exact definition today, but tomorrow it is almost certain to be different as the nature of housing changes, and as the mix of transactions CREA’s members engage in changes.

#50 Sean on 05.25.15 at 9:29 pm

It will really be interesting to see how the US Fed actually responds. So far, fed funds futures are NOT signaling a rate increase. The date, at least according to the markets (i.e. people who actually put their money where their mouth is), keeps getting pushed out.

And it is hardly surprising. To believe in this US recovery is to believe in the very same government intervention in markets that we are blaming for such distortions as our own housing bubble. That is to say, without artificially low rates in the US, there has been and is no recovery. To believe that the feds can now raise rates, is to believe that the bad medicine has actually worked. It is to believe that an economy can borrow its way to prosperity.

I know Garth will disagree vehemently… but all I’m saying is, let’s see what ACTUALLY happens. I agree that housing should have cracked by now, but.. hasn’t happened. I agree that the US should raise rates, but.. hasn’t happened.

In a world where multiple countries are running negative NOMINAL rates, and many more are running negative real rates, the message is clear… the system is broken.

So a prediction… if the US does embark on rate increases this year (which I doubt), it will NOT result in a long term policy shift. It will prove to be a failure. The economy will stall out at higher rates. And the policy will be reversed.

None of which will save the Canadian housing market, though.. lol!

#51 BS on 05.25.15 at 9:31 pm

Gregor Robertson and Bob Rennie both on the Vancouver CTV news cast tonight touting the speculator tax. Funny how after a 10 plus year bubble they both came to the same conclusion on the same day that a speculator tax is necessary. Of course Gregor cannot implement this tax and he is asking the provincial government to implement it. For those that don’t know Gregor (ex NDP and vocal critic of the BC Liberals) is not one of the BC Liberals favourite civic leaders to say the least. Just the fact he is asking for the tax pretty much makes it a non starter. Not going to happen and both Gregor and Rennie know this.

So what is the end game? Could this be a set up for massive changes to zoning in Vancouver to increase density? Something the nimbys (voters) in Vancouver hate. Clearly Rennie was consulted on this prior to Gregor going public and what interest could Rennie have other than be able to sell more condos? I bet we see the city come forward with new aggressive zoning to ‘help the first time buyer’ soon after the tax thing dies. Of course the only people it will help is the current land owners, developers and people like Rennie who sell the condos (all the people who finance Gregors political campaigns).

#52 Smoking Man on 05.25.15 at 9:33 pm

One more month of boot camp, then Jr and I head to California, prototype in hand. Meeting with a few VCs 10 servers , 10 staff.

And you tax farm slaves will never get bent over and goosed when you go to Florida and need some US money.

Two pips off the spot rate. Oh I’m so evil and brilliant.
Now you know why had him trading a bit of forex.

Made his teacher a partner. So he can hire the right slaves. Its only reason Ivested 12k. One so jr has basics , two to locate the stars

This is how an unscholled dyslexic rolls.

Have so much to teach….

Only reason telling you now, parent’s are in. Company formed. Proto type built.

#53 What about CMHC? on 05.25.15 at 9:34 pm

“And, for sure, by taking away the bankers’ risk, the federal CMHC is core to this speculative frenzy. – Hon GT”

Whenever you mention CMHC, I get emotions – anger and despair.

#54 Bottoms_Up on 05.25.15 at 9:35 pm

I believe the petition was signed by people across Canada. So the turnout seems high actually.

Eveline’s main point during her tv spot was that she would like to see actual data collected. Real, reliable data. She has a point.

#55 different roads on 05.25.15 at 9:36 pm

# 22 Brunett43
@ #12 Catalyst
“I’m not saying you should provide your kids a down payment and perpetuate this bubble – I just hope you aren’t too hard on your 26 year old kids living at home. :)”………………..

Actually, my boys 19 & 24 still live at home with me. Both are working and pay me rent. But they are both socking away every penny they make and maxing out their TFSA’s. A couple more years and I’ll give ’em the boot! But I’ve advised them both not to “house horny”!

======

My father told me he would not leave me a penny, as he had not inherited a penny, either. I was perfectly fine with that, never had any bad feeling about it.

We never asked for a penny from our kids while they lived at home, as long as they wanted to, luckily we could get by. We did not hesitate to help them financially or otherwise as much as we could, including hefty post-grad tuition fees.

Supporting all their goals, giving them what they turned into great investment for themselves has been a profound source of joy for both my wife and myself.

The kids turned out to be fine high achievers, they are both quite successful, self-employed professionals from the very beginning. We also stayed in a very close, warm relationship, we all can count on each other.

There are different ways – any of them can turn out good.

#56 Sean on 05.25.15 at 9:36 pm

#43 Buckhorn Bum on 05.25.15 at 9:09 pm
The only real estate worth owning…. Waterfront nuff said.

———-

I always find this so funny… waterfront in Canada is COLD!! Really cold. Ocean waterfront is like living next to an icebox… it can’t even warm up mid summer. Lake waterfront is quite nice for the three months of summer, but otherwise… cold, and often inaccessible. But hey, my perspective is probably distorted from having lived in the tropics for too long.

#57 Sebee on 05.25.15 at 9:38 pm

‘Tis true Garth, but you did hint that we were heading in similar direction with RE here:
http://www.greaterfool.ca/2014/08/25/big-dog-2/

#58 whitehorn on 05.25.15 at 9:42 pm

#249 Mechanized “Bank of Mom isn’t the cause, it’s the response. Don’t forget it was Fleherty that started inflating the market with 30-year, then 35, then 40-year mortages, 100% financed properties (own home and income properties), and THEN the interest rates started going through the floor. Oh no, it’s not Mom, it’s Jim. Housing was unaffordable by normal standards as of even 4-5 years ago, let alone now.” Totally agree with your statement 100%. Also, the part that puzzles me the most at that time, the overall economy was in extremely good shape, lots of job creation and the gov’t added fuel which was not required. It remains to be seen what harm this will cause in the years ahead. We may find out in the not so distant future. IMO the gov’t should of let the free enterprise market work on its own.

#59 seeing it from both sides on 05.25.15 at 9:43 pm

This is why we love Vancouver …. at any price ;)

“There may not be another place like it on Earth”

http://www.vancouversun.com/opinion/columnists/Pete+McMartin+appreciate+Vancouver+leave/11081796/story.html

#60 GTA Observer on 05.25.15 at 9:44 pm

#7 Realtor007… millions of people are looking to move to Canada and they all want a piece of the land. We as a country are the second largest land mass in the world with a tiny population, so much potential.


Millions of people, eh? Per the CIC, Canada in 2015 will welcome about a quarter of a million people, see:
http://www.cic.gc.ca/english/department/media/notices/2014-11-06.asp Subtract all the people not likely to be in a position to buy a house in the GTA or Vancouver in the next few years (caregivers, spouses/partners/children, Quebec, refugee etc.).

Canada is bringing in people only for replacement value; the population is not booming and much of the land, however impressive, is not livable. (See: Siberia)

The nation would have far more economic potential with affordable housing & a GDP with greater underlying diversity.

#61 chumming the waters on 05.25.15 at 9:46 pm

#9 USDCAD on 05.25.15 at 7:04 pm

This will bring something from Mark for sure. As a person who spends his winters abroad, I wish Mark was right about the Canadian dollar rising. Sadly it just hasn’t come to pass.

It’s always entertaining to come and read the lamentations of those who were taught the virtue of saving by their depression era parents. I took Mr. T’s stance back in 96′ and thought my friends were insane to borrow over 200k to buy houses in North Van. I guess if one has to be wrong it may as well be spectacularly so.

#62 Sean on 05.25.15 at 9:48 pm

OK, a bit too much wine.. too much commenting.. sorry.

Kind of funny about the lame turnout for the rally. I sympathize with the cause, but I suspect that most of these types would be thrilled with a low interest loan, so that they could run out and join the bidding wars.

What if there was a rally to address some of the real causes of this thing? Abolish CMHC. Allow the market to set rates without government interference. Demand that tax policy promote investment over mindless speculation.

How many do you think would show up to that rally?

(A tumbleweed blows past.. lol!)

#63 tundra pete on 05.25.15 at 9:51 pm

Bank of Mom and Dad. Simply ignorance. Which is odd that a lot of them should know and remember what happened in the late 70’s, early 80’s. Maybe the fog of the Columbian Gold and the magic mushrooms impaired their ability to recall the rate increases and the result of it. Maybe they just love up their little Johnny too much.

People want to beleive that rates aren’t going to increase and the debt filled orgy never ends. But it will. We’ve seen it happen before and it will happen again. Suddenly freedom 55 will start looking like a bad dream not a wet one.

#64 Hot Albertan Money on 05.25.15 at 9:56 pm

It’s one thing for 25,000 people to sign an online petition but actual protesting is, like, real hard.

Good ol’ Slactivism. A Retweet or a Like doesn’t mean squat

#65 Meeting with a few VCs on 05.25.15 at 10:10 pm

51 Smoking Man

One more month of boot camp, then Jr and I head to California, prototype in hand. Meeting with a few VCs

=*=*=*=*=*=*=*=*=*=*=*=*=*=*=*

Good luck Smoking Man and Smoking Son :)

There are only a handful of VCs in the Valley who seem to count… as if the success of a start-up would depend mostly on who invest in it and who gets rich. The list of those VCs who managed to strike gold in all major happy-end is surprisingly short.

Put Junior in the front, no matter how hard is it for your ego. Young, handsome and drop-out genius rules the Valley.

#66 Was there... on 05.25.15 at 10:10 pm

I was at the Vancouver rally at about 12:30 PM, and I’d estimate there were at least 300 people there. Eveline made a heartfelt speech and while she mentioned low interest rates, it was merely in passing. Her thesis is working, educated people should be able to buy a “modest” house. Yup, that’s what everyone in YVR is doing, and they’re getting mortgaged to the hilt in order to do it. I don’t think anyone at the rally, speakers included, realized this has been brought about by everyday locals, not foreign investors.

#67 the Jaguary on 05.25.15 at 10:12 pm

#11 – Where is mom getting the money?
By drawing on the HELOC she & hubby set up on their home which was possible due to the massive appreciation in house prices. Too bad she doesn’t realize how scary her payments will be when interest rates turn around. Using your house as an ATM can have disappointing consequences.

#68 crowdedelevatorfartz on 05.25.15 at 10:14 pm

@#27 Canadian Sheep

“When was last time in recent Canadian history when more than “hundred residents (maybe 150 including pets)” protested – and against what?”
+++++++++++++++++++++++++++++++++++

Guess you missed this.

http://www.google.ca/url?sa=t&rct=j&q=&esrc=s&frm=1&source=web&cd=1&cad=rja&uact=8&ved=0CB0QFjAA&url=http%3A%2F%2Fen.wikipedia.org%2Fwiki%2F1994_Vancouver_Stanley_Cup_riot&ei=WdZjVdf2HoLToASgiYKIBQ&usg=AFQjCNEwxdCoKHQn6RvJhUxKAy5bczQRoA&bvm=bv.93990622,d.cGU

or this

http://www.google.ca/url?sa=t&rct=j&q=&esrc=s&frm=1&source=web&cd=2&cad=rja&uact=8&ved=0CCMQFjAB&url=http%3A%2F%2Fwww.cbc.ca%2Fnews%2Fcanada%2Fbritish-columbia%2Fvancouver-riot-redux-police-prepared-for-post-game-violence-1.3046397&ei=ltZjVcXiFtbqoATb6YBI&usg=AFQjCNHsrcT5P9vatAmIopPZK3ynzKagdw&bvm=bv.93990622,d.cGU

The Romans learned over 2000 years ago what “interests” the mob……..and it aint Vancouver Art Gallery hissy fits.

#69 Sheane Wallace on 05.25.15 at 10:19 pm

DELETED (Ad hominem)

#70 Sheane Wallace on 05.25.15 at 10:21 pm

Harpo and Oliver will be hold accountable for CMHC, make no mistake about it.

#71 Smoking Man on 05.25.15 at 10:25 pm

#60 chumming the waters on 05.25.15 at 9:46 pm
#9 USDCAD on 05.25.15 at 7:04 pm

This will bring something from Mark for sure. As a person who spends his winters abroad, I wish Mark was right about the Canadian dollar rising. Sadly it just hasn’t come to pass.

It’s always entertaining to come and read the lamentations of those who were taught the virtue of saving by their depression era parents. I took Mr. T’s stance back in 96′ and thought my friends were insane to borrow over 200k to buy houses in North Van. I guess if one has to be wrong it may as well be spectacularly so.
…..

Marks insane.

CAD will get crushed times two, yellen has to spike , cause she said so. Dumb as shit , but credibility is on the line, poor Americans.

Poloz will cut, he’s export centric and gives no fk about the consequences.

Herdonomics 101.

Bet right.

Smoking Man
PhD in Herdonomics.

#72 Sheane Wallace on 05.25.15 at 10:25 pm

The brains at CMHC
/saracsm off

#73 Sheane Wallace on 05.25.15 at 10:27 pm

#66 Sheane Wallace on 05.25.15 at 10:19 pm
DELETED (Ad hominem)
—————————–
assentior

#74 joblo on 05.25.15 at 10:28 pm

#14 Jay on 05.25.15 at 7:10 pm

Lovely house in Maritimes for $75K, where prey tell, any more avails?

OK YVR and GTA house horny we get it, they be IDIOTS,
Hope they all blow themselves up, when can we move on?

#75 crowdedelevatorfartz on 05.25.15 at 10:28 pm

@#58 Seeing it……
“This is why we love Vancouver …. at any price ;)

“There may not be another place like it on Earth”
++++++++++++++++++++++++++++++++++++

Yeah I saw those license plates too!

http://www.google.ca/url?sa=t&rct=j&q=&esrc=s&frm=1&source=web&cd=1&cad=rja&uact=8&ved=0CB0QFjAA&url=http%3A%2F%2Fthetyee.ca%2FMediacheck%2F2011%2F10%2F04%2FBC-Best-Place-On-Earth%2F&ei=v9ljVbQm1uegBP_XgugB&usg=AFQjCNE8cSfRFGlAlpuz3iAusTs9Hq8wMQ

#76 Leo Trollstoy on 05.25.15 at 10:29 pm

The USD will follow the U.S. economy upwards.

The CAD will follow the Canadian economy down the tubes.

Rates will rise. Deflation will be absent. Debt holders will be crushed.

No brainer.

#77 Leo Trollstoy on 05.25.15 at 10:30 pm

Bet that Mark will be wrong. It’s the right call.

#78 Mark on 05.25.15 at 10:37 pm

“Bet that Mark will be wrong. It’s the right call.”

Doomer! But seriously, you think that after a debt orgy, anything but deflation is possible? Good one.. but you’re not alone — most got it completely wrong in the USA circa 2008 as well.

#79 Investorz on 05.25.15 at 10:39 pm

Larry Berman, a technician and long time guest on BNN said today that in his opinion, we’ll have low rates for a decade. That the system can’t much a big rate increase. I respect the man, as his track record is solid. He’s also cool-headed and gains nothing out of selling his opinions.

I’m keeping notes of “expert” bets and can’t wait to see the 5-year yields over the next years. My bet is no more than 0.5% more than now during the next 1.5 years. Good for your REITs.

You need to learn more about Mr. Berman. — Garth

#80 LTRFTW on 05.25.15 at 10:39 pm

The Lemmings just need to be led by a few. One person buying in a neighbourhood will generate multiple sales and purchases. All you need is a positive flow of people.

http://www.scmp.com/comment/blogs/article/1671607/blame-quebec-why-halting-immigrant-investor-programme-cant-halt-flow

The feds are aware though :

http://www.parl.gc.ca/HousePublications/Publication.aspx?DocId=6233082

Find Jason Kenney’s quote between page 1650 and 1655

As long as there are people with the ability to spend, they will put some of it in RE. As the prices climb, most of us will follow. Remember 70 % ownership.

Don’t ask your boss for a raise, it may not help:

http://www.scmp.com/article/1611982/fixing-vancouvers-woeful-wages-wont-end-housing-affordability-crisis

Everyone knows there’s a problem but the question is, what if anything should we do about it ?

http://www.scmp.com/comment/blogs/article/1804916/something-grotesquely-wrong-vancouvers-housing-market-and-time

Once the majority of the folks that are primarily using their homes as retirement plans see the price wobble and start to go down, will they stay in the game or head for the exits ?

#81 Made in BC on 05.25.15 at 10:39 pm

Anyone who refers to Canadians of Asian ethnicity as “Chinese proxies” has a problem. — Garth
++++++++++++++++++++++++++++++++++++

Quite correct sir. I believe I fixed that in my second post. I have lots of friends born and raised here with many relatives overseas. Hence the phrase “Canadian Proxy”. Which personally I know happens with purchasing RE here in the lower mainland.

+++++++++++++++++++++++++++++++++++++
It will really be interesting to see how the US Fed actually responds. So far, fed funds futures are NOT signaling a rate increase. The date, at least according to the markets (i.e. people who actually put their money where their mouth is), keeps getting pushed out.

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

The word on the street is although rates will go up 1/4 of one percent – nothing really – this fall…..this will be the trend. REALLY REALLY slow raising. So for all intense and purposes…….no raising. There will be more of a gap in interest rates from lenders….than there will be in amount the FED raises in the next three years.

#82 Made in BC on 05.25.15 at 10:41 pm

#77 Mark on 05.25.15 at 10:37 pm
“Bet that Mark will be wrong. It’s the right call.”

Doomer! But seriously, you think that after a debt orgy, anything but deflation is possible? Good one.. but you’re not alone — most got it completely wrong in the USA circa 2008 as well.
++++++++++++++++++++++++++++++++++++

Mark I like your posts……but you head downhill really fast when you say things like “The Cdn will be $1.35 to the USD.” NEVER in my 2 year olds lifetime will that happen.

#83 Smoking Man on 05.25.15 at 10:42 pm

#75 Leo Trollstoy on 05.25.15 at 10:29 pm
The USD will follow the U.S. economy upwards.

The CAD will follow the Canadian economy down the tubes.

Rates will rise. Deflation will be absent. Debt holders will be crushed.

No brainer.
……

Its all based on productivity, we here in Communist Canada only deserve a 50 cent dollar. Over paid govt workers, corruption up the ying yang in govt, green energy, insurance, banking, telecoms, airlinrs. I could go on..

Smarts are not rewared in this shit hole of a country. Its not measured or appreciated .

May the best Commy win.

I renounce my leaf nation loyalty.

Keeping the bung in long branch, no brainer.. The stupid will inherit the world.

I’ll take their loot.

#84 Smoking Man on 05.25.15 at 10:47 pm

#77 Mark on 05.25.15 at 10:37 pm
“Bet that Mark will be wrong. It’s the right call.”

Doomer! But seriously, you think that after a debt orgy, anything but deflation is possible? Good one.. but you’re not alone — most got it completely wrong in the USA circa 2008 as well.
…….

You don’t know shit. I torate you only for the love of the arts, its entertaining .

But I’m drinking jack right now…. Sorry about aggressive thumb types. That’s just me being Canadian.

Jack is telling me:
Your an ass, you don’t deserve to live.

Let alone post..

#85 Fuzzy Camel on 05.25.15 at 10:50 pm

Interest rates go up in the US, economy goes down.
Interest rates don’t go up in Canada, CAD goes down big.
Economy will still tank if the Fed ups rates, our biggest trade partner is the US.

Take Garth’s advice, and a little further beyond, diversify out of real estate and the Canadian dollar. We are in a trap, rates go up, real estate tanks, rates stay low, the Canadian dollar tanks. Either way if your assets are denominated in CAD you are screwed.

That said, if the Fed ups rates, I think the world is screwed, might want to invest in a smith and wesson if that happens.

#86 Setting the Record Straight on 05.25.15 at 10:51 pm

People who buy land, and pay the taxes upon it should decide what becomes of it, who may have 1st options 2nd options on it etc. I “own” it like my car, and clothes. I, AM the decider on disposition, not you! Clear?

#######
Not in
Canada !
Ownership is only fee simple. Not real ownership. The Crown owns the property.
But even in the U.S. It’s not like owning a car. They can’t take your car away if you don’t pay taxes. If you want to use the roads you have licence/insurance but if you want to put it up on blocks in your living room knock yourself out.

But if you fail to pay your property taxes your “property” is no longer yours.

#87 Setting the Record Straight on 05.25.15 at 10:53 pm

@#236 Marco on 05.25.15 at 11:54 am
“Your logic is flawed–if it was just low interest rates that have caused sky high prices in Vancouver, then why are they so much higher than anywhere else in the country?”

Most desirable, popular place to live in Canada. We are made to believe we must pay more to live in the BPOE. Even though wages lag even behind Winnipeg. We are made to believe we should work for less pay sky high prices to be one of the special ones living in the BPOE, propaganda, real estate fuelled city by the Bay. Not the world class city by the Bay, that’s San Fran.

Cheers.

&&&&&&&&
Get serious this is not an explanation of Vancouver pricing.

#88 Rivers Ghost on 05.25.15 at 10:55 pm

Garth

How did you manage to squeeze so many fashion felonies into today’s photo? Needed my sunglasses to look at that!

#89 Rivers Ghost on 05.25.15 at 11:01 pm

#9 USDCAD on 05.25.15 at 7:04 pm
One way to protect wealth and purchasing power is to convert C$ into US$. Every Canadian bank is offering cheap US$ accounts to Canadian individuals……….. At least we have that option and don’t need to go to a black market.”

That’s a big YET…the zlotification, (drachma-ization or peso-ization) of the loonie has already started, and with people trapped in real estate, a black market currency trade, after the coming collapse of the loonie, is not beyond the realm of the possible!

#90 John Pea on 05.25.15 at 11:02 pm

I just had to share this one,

“The Nanos poll included 1,000 Canadians who were surveyed between April 24 and April 27. It showed 17 per cent of Canadians oppose increasing the TFSA limit as a government priority, while 14 said they would “somewhat” oppose it.”

that would be 31% who are not in favor of raising the TFSA. I just couldn’t believe that there are nearly 1 in 3 idiots to that degree in this country. Who in their right F mind would OPPOSE TAX FREE WEALTH GAINS and RETIREMENT BUILDING TAX FREE?

garth help me! WHO!?!?

#91 lala on 05.25.15 at 11:06 pm

Just bought a 120 square metre apartment in Thesaloniki Center for 31000 euros build in stone, no crapy wood house for me. No maintenance fees, 300 euros a year property tax, sea view from living room. Healthy food, beautiful beaches, good looking people, uzzo is cheap, +10 is the coldest it gets and so on…for now I’m going there 4-5 months a year. I can’t handle another Canaduh winter and the Canadunians with their stupid attitude in their empty faces. Where I came from, cow and chickens refuses to live in what 1 mil bucks can buy in GTA.

#92 totalchaos on 05.25.15 at 11:09 pm

#23 Made in BC
” Yet the streets of Vancouver are filled with secret Secret Chinese Police…”

What is driving Vancouver house prices is those darn Chinese secret Secret Police coming here to look for bad guys and needing to buy a place to live while they’re at it.

The streets are filled with these guys, but they are so secret, they look like anyone else. Some are so crafty, they sent their parents and even grandparents out decades ago so they could be born in Canada and no one would know about their secret Secret mission. I might have even married one of these sneaky secret Secret police, but how am I to know? It’s a secret!

Made in BC, go back and read what you posted and tell me it doesn’t sound ridiculous.

#93 Madcat on 05.25.15 at 11:14 pm

The housing mess will be a public debt soon enough. The protest should be against the CMHC insuring high risk loans for houses. Borrowers should have to qualify based on some kind of historically average interest rate not today’s rate. We the taxpayer should not be on the hook if rates go up. The taxpayer should be sheltered and protected from high risk lending and it’s time to legislate some rules for the CMHC to follow (make that your next protest millennials). Amortisation periods and down payment rules should have been tightened in a synchronized manner with decreasing interest rates to normalise house prices and prevent a housing apocalypse should rates rise.
Rules need to be put in place for the CMHC to follow in order to protect the taxpayer and to keep hose prices from swinging wildly.
Rule suggestion one: A minimum down payment requirement of 25% of the total cost of the house. *Not to be adjusted once implemented.
Rule suggestion two: 20 year amortisation period only adjustable with the average life span.
Rule suggestion three: Buyers should have to qualify based on the 20 year average interest rate not the rate at the time of application.

#94 Bob2 on 05.25.15 at 11:17 pm

“If there were any lingering doubt, this week’s gyrations demonstrate neatly that it is central bank liquidity, not fundamentals, driving markets. It is the flow, not the anticipated stock, of QE which counts.” – Citigroup, May 2015

So sell your house, go on and put the proceeds in a balanced portfolio of central bank controlled markets.

#95 lala on 05.25.15 at 11:23 pm

Garth the Turner you remind me of homer, plain and direct with your thoughts. But, you are losing a lot of traffic, your blog it is not SEO friendly. With all this fantastic original content you have, you should be the first spot in SERPS for keywords like “real estate” , @re agents” etc. Imagine how many people google can lead to your blog.

#96 meslippery on 05.25.15 at 11:24 pm

The feds are predicting the average house in Canada will trade for $422,129 this year, and $428,325 in 2016.

Dam. I live in York Region 1000 feet from Lake Simcoe
half acrea 1400 sq feet brick home with nat gas, rogers,
street lights, m-pac says 260k

#97 Investorz on 05.25.15 at 11:31 pm

“You need to learn more about Mr. Berman. — Garth”

Is there something we should know about him? Perhaps bad advices from the past? Any link?

All I find online is that he goes around Canada giving courses about investing.

And that he was adopted and had a really rough childhood: http://www.cafdn.org/thebuzz/2015/03/31/larryberman/

#98 Canadian sheep on 05.25.15 at 11:32 pm

# 67 crowdedelevatorfartz

That’s right… I did not consider drunk hockey fans riot as a political protest… Mea culpa, Canadian sheep.

#99 Mark on 05.25.15 at 11:33 pm

“Its all based on productivity, we here in Communist Canada only deserve a 50 cent dollar.”

Of course I disagree. Despite this apparent lack of productivity, Canada has managed to post a trade surplus for a significant chunk of the past 20-something years. Meanwhile, the US, apparently more ‘productive’, has run chronic trade deficits. Sure doesn’t seem like the US is all that ‘productive’ if they are reduced to importing dramatically more than they export.

The problem with ‘productivity’ is that it largely doesn’t adjust for the long-term value of certain activities. Finance, heavily represented in the US economy, isn’t particularly value-adding, but is counted as a significant input to GDP. In Canada, dramatically less so. Are Canadians really less productive because less of our overall economic activity mix is weighted towards finance than in the US? What happens to the USA’s “productivity” as the sectors heavily represented in their economy go out of favour?

Last but not least, I’m not sure why it is in the psyche of many Canadians to think of Canada in such diminutive terms. Eventually Canada will enjoy its day in the economic sun, and I’ve outlined a set of conditions, including global debt deflation, and good performance of a sector which Canadians have an overwhelming command of, that could drive the CAD$ to heights never before experienced. An inversion of the circumstances, in essence, that brought the CAD$ to its all time lows.

#100 SWL1976 on 05.25.15 at 11:37 pm

#70 Smoking Man

CAD will get crushed times two, yellen has to spike , cause she said so. Dumb as shit , but credibility is on the line, poor Americans.

Poloz will cut, he’s export centric and gives no fk about the consequences.

Herdonomics 101.

—————–

The fed will spike, but not based on market fundamentales, but to cause turmoil. I agree with herdonomics, but the plan is also to crush the herd.

Can’t have any super-powers in a one world government now can we?

The stage is set.

If your son is heading off to Cali, tell him to bring water. They’re going to need it.

Realistic thinking 101

#101 Liquid Independence on 05.25.15 at 11:45 pm

Re: #39 Leo Trollstoy on 05.25.15 at 9:00 pm

Yes please. Don’t mind if I do.

#102 Derek R on 05.25.15 at 11:56 pm

#63 Hot Albertan Money on 05.25.15 at 9:56 pm wrote:
Good ol’ Slactivism. A Retweet or a Like doesn’t mean squat

Yeah, the Alberta Progressive Conservatives thought that. Right up until they found themselves out of office. I’m pretty sure some of them still haven’t got it.

Shame really, because they should have learned that lesson when Nenshi stole the Calgary Mayor position from Rick McIver. Using Retweets and Likes…

#103 Kreditanstalt on 05.26.15 at 1:08 am

I’ll never understand why they’re SO desperate to live in the lower mainland…

Here on Vancouver Island there are heritage houses (or newish ranchers, if that’s your bag) going for 1/3 to 1/2 the cost of a lower mainland box-in-the-sky…

But your job is there? Well, that Massive Mortgage you’d have to bear in Vancouver (or suburbs) you could also also enable one to live comfortably for a hell of a long time elsewhere, in a paid-off place…

#104 GreatBlackSwan on 05.26.15 at 1:15 am

Garth,

I was hoping you could touch on this in your future posts. It’s obvious the Fed is raising in September or December. What’s going to happen with the BOC. If the raises in September, it doesn’t seem likely that BOC will raise on a sluggish economy, slow job growth and by the fed raising, it will devalue the CAD enough that were won’t be a hike?

I’m trying to figure out the scenarios and time lines that the housing bubble can burst.

Please help, and I know forecasting is hard and risky but would love to hear your predictions on the slowing.

P.S would love more and regular updates on Alberta and the COW Town death march.

#105 Oceanside on 05.26.15 at 1:16 am

Mr. Oliver stated that “we don’t see a need for an immediate shift in policy,”

All this brilliant politician ever says it “We’re monitoring the situation” (Like Nero while Rome burned)

#106 protestfully on 05.26.15 at 2:09 am

Did u hear Our Own Bob Rennie was at the rally…no one knows as he was dressed up as a clown to fit in with all the protesters (-;

#107 Hans Fuchs on 05.26.15 at 2:19 am

#32 Cramer….

“For example, in Windsor-Essex County (Ont.) the average is $199,586”

I’m in…what’s the commute into Vancouver like in the morning?

#108 Goldie on 05.26.15 at 3:47 am

It’s nice to see Nova Scotia up there on your list. It’s a place where the average person can still afford a house, providing they can find steady work.

#109 MarcFromOttawa on 05.26.15 at 3:47 am

Garth, you’ve been predicting higher rates for 6 years now.

I predict when the next recession hits in 2-3 years, central banks world wide will be going with Negative interest rates.

The elite want to push people into crypto-currencies.

#110 Nagraj on 05.26.15 at 3:56 am

The PM is loath to participate in a traditional tv leaders’ debate. Is he worried that a make-up or lighting man will subtly sabotage his looks? Or that a cameraman will pull a fast one with a well-timed unfriendly close-up?
Is he worried about a studio audience not being sufficiently vetted? A rogue question?
Absent a studio audience does he fear “staged” demonstrations at (all) the building’s doors?

The ONLY possible sensible response from the PMO is: yes of course the PM will participate in a traditional tv debate. But we haven’t heard that yet.

Harper couldn’t possibly hold a legit town hall without a fracas happening. He can’t possibly speak to a Fall Fair crowd and not get booed off the stage. Is the PMO really equally worried about the CBC, CTV and Global?

His PR people must surely have said to him that he’s in for worse than the above if the networks hold a debate without him.

The larger message is for all Conservatives: do you understand that having an unusual debate about the debate means your man is already half dead? Are you less disposed to dismiss polls than you were a little while ago in Alberta? Are you ready to see the last remaining Cons provincial gov’t turfed out in Nfld? How many of you say “I’m a Conservative but not a Harperite”?

What an amusing mess.

#111 fred bolger on 05.26.15 at 5:41 am

CBC top story

“Living house poor, Canada’s ‘dirty little secret’”

With rising housing prices and the lure of low interest rates, more Canadians are living house poor

http://www.cbc.ca/news/business/real-estate-woes-the-secret-lives-of-house-poor-canadians-1.3086793

#112 Julia on 05.26.15 at 7:14 am

#92 Madcat
“The protest should be against the CMHC insuring high risk loans for houses. Borrowers should have to qualify based on some kind of historically average interest rate not today’s rate. ”

There was some progress made when qualification was modified to the 5 year posted rate, not the negotiated rate.
I think what needs to change is the debt service calculation (TDS). Is it 42% TDS maximum right now? That is way too high for most people’s lifestyles.
Used to be that used to include 3% debt service on credit AVAILABILITY now it’s 3% of BALANCE. That in itself can make a big difference.
I think it should be mandatory to have a budget done, including current lifestyle expenses for the last 3-6 months and factoring in some average home ownership expenses in the future, like a reserve. Maybe even a monthly reserve in the event on unemployment, having a child etc…

If anything, it could be a wake-up call.

#113 Canada is a house of cards on 05.26.15 at 7:14 am

Realtor scum and the rest of the FIRE industry have bankrupt Canadians and Canada with their lies and deception. These people are the low of the low with very little education and really no usable skills other then to con people.
http://www.cbc.ca/news/business/real-estate-woes-the-secret-lives-of-house-poor-canadians-1.3086793

Bonehead comment. The blame for people walking into reckless consumer debt, including mortgages, rests with them. Not realtors, Americans, central bankers, the Chinese, politicians or baby boomers, as so many of us like to believe. — Garth

#114 BillyBob on 05.26.15 at 7:15 am

#60 chumming the waters on 05.25.15 at 9:46 pm
#9 USDCAD on 05.25.15 at 7:04 pm

This will bring something from Mark for sure. As a person who spends his winters abroad, I wish Mark was right about the Canadian dollar rising. Sadly it just hasn’t come to pass.

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

As someone who works abroad and gets paid in USD, I’m glad Mark is wrong about his CAD theories. Even yesterday, an article in the G&M about the “bullish” CAD…while it loses another 2%.

Nonsensical.

#115 fancy_pants on 05.26.15 at 8:10 am

Key indicators appear generally normal so I imagine they will hold the overnight rate tomorrow. No boat rocking with the election on the horizon.

#116 BOM on 05.26.15 at 8:18 am

To save valuable time, we should refer to BOM for “Bank of Mom”. The imagery is good.
You’re welcome!

#117 Randy on 05.26.15 at 8:33 am

Just think of your Property Taxes as a Annuity attached to your property forever, payable to your governments. It’s like a mortgage that you can’t pay off.

#118 crowdedelevatorfartz on 05.26.15 at 8:35 am

@#90 Canuck Sheep
“That’s right… I did not consider drunk hockey fans riot as a political protest…”
+++++++++++++++++++++++++++++++++++

Oh , I was confused.
I thought the handful of people standing around on the Art Gallery lawn were whining about how “unfair” it was that they couldnt afford to own a piece of the “dream”.

A protest about money wrapped in a xenophobic flag=politics?

#119 David B. Granner on 05.26.15 at 8:47 am

‘…the under-25 condo-buying set.’

Hey Garth –

This is the demographic increasingly referred to as the ‘Snowflake generation’. The idea is that they have been told from birth that they are unique, special, precious, vulnerable, amazing and so on. Small wonder they feel entitled to a house, and not just any house, either. It’s a good metaphor – check it out!

#120 Holy Crap Wheres The Tylenol on 05.26.15 at 9:01 am

#99 SWL1976 on 05.25.15 at 11:37 pm
#70 Smoking Man
CAD will get crushed times two, yellen has to spike , cause she said so. Dumb as shit , but credibility is on the line, poor Americans.
Poloz will cut, he’s export centric and gives no fk about the consequences.
Herdonomics 101.
—————–
The fed will spike, but not based on market fundamentales, but to cause turmoil. I agree with herdonomics, but the plan is also to crush the herd.
Can’t have any super-powers in a one world government now can we?
The stage is set.
If your son is heading off to Cali, tell him to bring water. They’re going to need it.
Realistic thinking 101
____________________________________________
Sí mi amigo llevar mucha agua . My friend that I grew up in school with lives in SoCal (San Diego)and he is shitting bricks. He has removed his lawns and replaced with stones. They now have huge fines for water waste even via leaks on your property that you may or may not know you have.
The typical single-family domestic customer has a 3/4-inch meter (some larger homes may have a 1-inch meter). The total bill is a combination of the monthly meter base fee (which is based on the size of the meter) and the amount of water used. For billing purposes, the Public Utilities Department measures water used by hundred cubic feet or HCF. Each HCF equals 748.05 gallons.
The bi-monthly charges for a typical single-family domestic customer are:
Base fee: $40.62
0 – 8 HCF used are billed at $3.896 per HCF.
9 – 24 HCF used are billed at $4.364 per HCF.
25 – 36 HCF used are billed at $6.234 per HCF.
Each HCF used after the initial 36 HCF is billed at $8.766 per HCF.
Water is a huge issue in California!

#121 Holy Crap Wheres The Tylenol on 05.26.15 at 9:15 am

#109 Nagraj on 05.26.15 at 3:56 am
The PM is loath to participate in a traditional tv leaders’ debate. Is he worried that a make-up or lighting man will subtly sabotage his looks? Or that a cameraman will pull a fast one with a well-timed unfriendly close-up?
Is he worried about a studio audience not being sufficiently vetted? A rogue question?
Absent a studio audience does he fear “staged” demonstrations at (all) the building’s doors?
The ONLY possible sensible response from the PMO is: yes of course the PM will participate in a traditional tv debate. But we haven’t heard that yet.
Harper couldn’t possibly hold a legit town hall without a fracas happening. He can’t possibly speak to a Fall Fair crowd and not get booed off the stage. Is the PMO really equally worried about the CBC, CTV and Global?
His PR people must surely have said to him that he’s in for worse than the above if the networks hold a debate without him.
The larger message is for all Conservatives: do you understand that having an unusual debate about the debate means your man is already half dead? Are you less disposed to dismiss polls than you were a little while ago in Alberta? Are you ready to see the last remaining Cons provincial gov’t turfed out in Nfld? How many of you say “I’m a Conservative but not a Harperite”?
What an amusing mess.
____________________________________________
I recall the Nixon Kenedy debate by in 1960. The presidential election of 1960 is best remembered for the first televised debate between Nixon and the Democratic nominee, John F. Kennedy. For many observers, the contrast between the pale, sweaty Nixon and the bronze, poised Kennedy captures the importance of image in politics, though the vote totals for the candidates, it was the closest election of the twentieth century and indicates that image is far from everything but you have to admit you got to look good!
Nixon blamed his defeat on other factors. An economic recession had bottomed out shortly before Election Day. Also, Kennedy had the advantage of the challenger, the ability to stay on the offensive, while Nixon had to defend the record of the Eisenhower administration. And, fatefully, Nixon convinced himself that he was the victim of the Kennedys’ ruthlessness and the rest is history!

#122 LLewelyn on 05.26.15 at 9:19 am

Many years ago I was appointed as the Director of Housing for a medium sized Canadian city. After reviewing the economic status of households I realized that the cost of accommodation for more than 40% of all households exceeded 30% of their disposable income. I viewed this as a potential drag on economic growth.

In an attempt to address this situation I encouraged the development of dozens of not for profit housing projects under the National Housing Act. As the number of affordable housing units increased the local media started to question my priorities and to point out that the introduction of affordable housing would reduce the market value of houses owned by 70% of the population.

After I recommended the development of affordable housing on vacant municipal land the major land developers initiated a political change that brought an end to municipal government support for affordable housing. Shortly after CMHC terminated all support for affordable housing initiatives and left the provision of housing to private enterprise.

All I can say is that the 70% who owned their houses in the 1980’s and 1990’s did very well under the ‘free’ market system Now we live in a world where the the market value of our accommodation continues to escalate as our economic growth is slowing. The consequence is that an unsupportable percentage of disposable income is required to obtain accommodation and credit is being used to meet the basic cost of living.

Don’t Canadians realize that every dollar of disposable income diverted to obtain accommodation is a nail in our economic coffin. This is basic economics and the primary reason why the National Housing Act was created back when our Federal government cared about our future.

Today our economic future looks very very dim unless our Federal government comes to its senses and encourages an increase in the supply of affordable housing. I realize the 70% who have a vested interest in the ‘free market’ system will resist any form of government intervention until our economy actually tanks and house prices come tumbling down. By then private enterprise will have run for the hills and our governments will be left holding an empty bag.

#123 Sonny on 05.26.15 at 9:27 am

TFSA survey suggests a third of Canadians won’t contribute.
A third of Canadian’s won’t take advantage of new TFSA limits: poll

http://www.macleans.ca/economy/money-economy/tfsa-survey-suggests-a-third-of-canadians-wont-contribute/

#124 Rational Optimist on 05.26.15 at 9:56 am

Two thoughts:

1) If the price of the “average” home is going to be flat, mine is losing value. Next year’s average will include a lot of newer homes which are better because they are newer, but also better because they are better (bigger, more in keeping with today’s style, more energy efficient). My house is getting older compared to the average, and smaller compared to the average, and crummier-looking compared to the average, each and every year (plus, like me, every year brings it one year closer to the end of its useful life). So, if the “average” price is not budging, surely my house is worth less.

2) It’s insane to me that the province with the most newcomers has the highest home-ownership rate. If you are an economic refugee from Ontario who’s been in Alberta for two or three years, don’t you know better than most the advantages of staying flexible and mobile?

#125 cramar on 05.26.15 at 10:04 am

106 Hans Fuchs on 05.26.15 at 2:19 am
#32 Cramer….

“For example, in Windsor-Essex County (Ont.) the average is $199,586″

I’m in…what’s the commute into Vancouver like in the morning?

———————–

Westjet VQG to YVR about 6 hours. Sorry.

Don’t know why people don’t become plumbers. You can live anywhere. My plumber is very busy with work. Must be renos on the old beaters. You can get one here as well as in Vancouver. The difference is that $1.4 million fixer there might cost $84k in this area.

#126 Rational Optimist on 05.26.15 at 10:26 am

90 lala on 05.25.15 at 11:06 pm

“Just bought a 120 square metre apartment in Thesaloniki Center for 31000 euros… 300 euros a year property tax.”

You’ve got to talk to your new neighbours, there must be some way around paying that much.

#127 john on 05.26.15 at 10:27 am

interesting article at yahoo finance on house rich, poor Canadians.

https://ca.finance.yahoo.com/news/real-estate-woes-secret-lives-090000545.html

#128 Bottoms_Up on 05.26.15 at 10:32 am

#111 Julia on 05.26.15 at 7:14 am
—————————————
Sure an actual budget would be a wake-up call, but you can’t mandate how much people spend on things such as food or home maintenance.

#129 Bottoms_Up on 05.26.15 at 10:33 am

#110 fred bolger on 05.26.15 at 5:41 am
———————————————–
And conveniently the actual story is the family lost 1 job, so are having a rough go right now. If you keep reading, they have now picked up a 2nd job and their future looks bright. I would have expected the CBC to pick a better scenario than that to highlight house affordability issues.

#130 Bottoms_Up on 05.26.15 at 10:35 am

#109 Nagraj on 05.26.15 at 3:56 am
———————————————-
I kind of like the idea of the candidates debating on more local issues, that is, at several venues across Canada.

#131 Bottoms_Up on 05.26.15 at 10:41 am

#81 Made in BC on 05.25.15 at 10:41 pm
————————————————–
Dude sounds spun…are his posts worth reading?

#132 Realtor007 on 05.26.15 at 11:01 am

#59 GTA Observer on 05.25.15 at 9:44 pm

much of the land, however impressive, is not livable

—————————————————–

Oh really, you want to specify the large areas of Canada that are not livable?

#133 Say no to Yoga Pants on 05.26.15 at 11:18 am

‘Who in their right F mind would OPPOSE TAX FREE WEALTH GAINS and RETIREMENT BUILDING TAX FREE?’

I promise that I could go downtown Kelowna today with a petition to ban di-hydrogen monoxide (H2O aka water) with a silly list of dangers and get a ton of signatures

it transports poison in the bodies of living organisms
it is toxic in high enough concentration
it is an ACID and a BASE, so that’s obviously bad….

thinking is hard and mindlessness is easy peazy

is there an app for that?

#134 H on 05.26.15 at 11:20 am

Garth,

You are not paying attention to the most obvious sign. Currency.

I have no idea why you are ignoring this, in your predictions on interest rates. I can assure the the Fed members are glued to the screen as they see the crisis unfold.

The Japanese yes just pushed through key technical levels and is the lowest vs usd in 8 years. the Euro is doing the same.

The US fed knows this and the term they used a “transitory” which was currency, will soon be replaced with “underlying pressures”.

Your call Garth, your blog. But in all seriousness you would likely get more educated readers like me following if you acknowledged the real issues.

It’s okay. You can leave. I’ll recover. — Garth

#135 Julia on 05.26.15 at 11:30 am

#127 Bottoms_up

#111 Julia on 05.26.15 at 7:14 am
—————————————
Sure an actual budget would be a wake-up call, but you can’t mandate how much people spend on things such as food or home maintenance.”

You are right, you can’t mandate how much and where people spend. However, I will argue that as a lender (or as far as CMHC is concerned) I would want to lend to people that can pay me back AND make sure that the asset I hold as security for my loan is maintained in the event they don’t and I have to enforce.

You can’t mandate how people will choose to spend and I am certainly not one for people looking over my shoulder. I do think that the basis for qualifying people for mortgages should change by including the real cost of owning a home and also some reserve in the event that sh*t happens in life. Because it does.
A reserve for repairs and maintenance (% of price of house?) – not for renovations because that is a choice. A reserve for cash in the event of unemployment etc… but not for lifestyle like restaurants and other discretionary items. Daycare or nanny costs for that matter should be included as it is a commitment parents have in order to generate the income to pay their mortgage. But it’s not included.

I talk to people who only look at the mortgage payment vs rent. I own and as most owners know there is money to be spent every single year on maintenance and repairs. Forget fancy renovations.

#136 Paul on 05.26.15 at 11:35 am

#128 Bottoms_Up on 05.26.15 at 10:33 am

#110 fred bolger on 05.26.15 at 5:41 am
———————————————–
And conveniently the actual story is the family lost 1 job, so are having a rough go right now. If you keep reading, they have now picked up a 2nd job and their future looks bright. I would have expected the CBC to pick a better scenario than that to highlight house affordability issues.
———————————————————-Wow just think if they got a third job how great things would be. A forth job and they are on EZ street.

#137 Vancouver is boring on 05.26.15 at 11:41 am

The Economist magazine says Vancouver is “mind-numbingly boring”.

How true.

But it’s different here…now, back to those bidding wars!!!

http://www.theglobeandmail.com/report-on-business/top-business-stories/vancouver-is-mind-numbingly-boring-economist-magazine-says/article24588128/

#138 Made in BC on 05.26.15 at 11:51 am

#130 Bottoms_Up on 05.26.15 at 10:41 am
#81 Made in BC on 05.25.15 at 10:41 pm
————————————————–
Dude sounds spun…are his posts worth reading?
++++++++++++++++++++++++++++++++++++

Empty comment. Care to elaborate with some of your own facts?

#139 Nemesis on 05.26.15 at 11:53 am

#FunnyOldeWorld…

#NoEeeengrishForYou!…

[CBC] – Richmond won’t pursue bylaw on English-only signs: City instead passes motion on window ‘de-cluttering’ initiative

http://www.cbc.ca/news/canada/british-columbia/richmond-won-t-pursue-bylaw-on-english-only-signs-1.3087409

#Nutz!…

[TimesColonist] – Braking for squirrel leads to four-car collision in Nanaimo

http://www.timescolonist.com/news/local/braking-for-squirrel-leads-to-four-car-collision-in-nanaimo-1.1946596

#140 Made in BC on 05.26.15 at 11:54 am

#91 totalchaos on 05.25.15 at 11:09 pm
The streets are filled with these guys, but they are so secret, they look like anyone else. Some are so crafty, they sent their parents and even grandparents out decades ago so they could be born in Canada and no one would know about their secret Secret mission. I might have even married one of these sneaky secret Secret police, but how am I to know? It’s a secret!

Made in BC, go back and read what you posted and tell me it doesn’t sound ridiculous.
++++++++++++++++++++++++++++++++++++

Ridiculous? Now go look in a mirror….

http://news.nationalpost.com/news/canada/chinese-police-run-secret-operations-in-b-c-to-hunt-allegedly-corrupt-officials-and-laundered-money

#141 Oot der Hoos on 05.26.15 at 12:15 pm

To #121 LLewelyn

You are correct that house inflation will cause economic stagnation.

However, we oppose communist housing ideas such as yours because you will make us pay for somebody elses house as well as our own. It is not because we want our house to go up in price that we oppose you.

Besides, eliminating the profit margin does not drop prices much at all. You were tricking yourself and others by offering up municipal land, which was not free to all, but just free to your favoured few.

Try to think of free market liberty ideas, like my posts, to solve the housing inflation. That way we all benefit and have more income for all, such that you no longer steal from one to arbitrarily, without merit, give to another, which is the method of socialism and the method of central bank inflation.

Also, 1988-1989 was no great buying opportunity. If you made a goofy error buying into that rampant house inflation you suffered for 10 years or more, to break even.

I correct you there because you are beating up on that generation as though things are different now. Young people need to know that history so they diminsh their jealousy and envy which is the root of communist ideas.

The house inflation is being caused by the high taxes and poor productivity of socialism, combined with the current central-bank money-inflation strategy, which Keynes and Monetarists think will increase our incomes, which is our real need.

Keynes was wrong. Austrian economists were right. The inflation will not boost the economy.

#142 Made in BC on 05.26.15 at 12:15 pm

#132 Say no to Yoga Pants on 05.26.15 at 11:18 am
‘Who in their right F mind would OPPOSE TAX FREE WEALTH GAINS and RETIREMENT BUILDING TAX FREE?’

I promise that I could go downtown Kelowna today with a petition to ban di-hydrogen monoxide (H2O aka water) with a silly list of dangers and get a ton of signatures

it transports poison in the bodies of living organisms
it is toxic in high enough concentration
it is an ACID and a BASE, so that’s obviously bad….

thinking is hard and mindlessness is easy peazy
++++++++++++++++++++++++++++++++++++

Which is exactly why this CARBON BS is such a phoney sack of crap…..

In grade three I learned that CO2 is responsible for all life on earth as it is FOOD FOR PLANTS.

yet that little diddy never seems to make it to the desk of politicians or the MSM. They all must have either flunked biology or have another agenda. I will let the readers decide.

#143 Leo Trollstoy on 05.26.15 at 12:21 pm

Don’t know why people don’t become plumbers.

I deal with plumbers to manage my rentals.

Your knees are shot within 5 years.

That’s not a good trade off.

#144 BigM on 05.26.15 at 12:22 pm

@120 and 109.

A more apt comparison would be the recent UK election.
Incumbent Tory played around with formats and dates, and then watched the opposition parties tear themselves apart.

It worked, another majority Tory government.

#145 SWL1976 on 05.26.15 at 12:25 pm

#91 totalchaos

Made in BC, go back and read what you posted and tell me it doesn’t sound ridiculous.

Wake up call.

Welcome to the 21st century where rediculous, at least for now, is here to stay

Just because it something sounds completely rediculous… Doesn’t mean… It can’t, it won’t, or isn’t already happening

#146 chapter 9 on 05.26.15 at 12:36 pm

#27 Canadian Sheep
Canadians don’t protest on the street Garth

When was the last time in recent Canadian history when more than “hundred residents(maybe 150 including pets) protested-and against what?

Speaking of protests!
The police departments in the US are getting a new product to deal with those pesky little problems of protests etc. It’s called “skunk” a foul smelling, disgusting liquid (technically non-toxic) that smells like dead animals and human excrement. This nasty liquid is sprayed on protesters,similar to a water cannon, and can only be neutralized with a “special soap”. And don’t even think about using any other cleaning product because that will only exacerbate the stench which can linger for up to six weeks.
Just something else to keep the “great unwashed in line.”

#147 Renter's Revenge! on 05.26.15 at 12:39 pm

Realtor scum and the rest of the FIRE industry have bankrupt Canadians and Canada with their lies and deception. These people are the low of the low with very little education and really no usable skills other then to con people.
http://www.cbc.ca/news/business/real-estate-woes-the-secret-lives-of-house-poor-canadians-1.3086793

Bonehead comment. The blame for people walking into reckless consumer debt, including mortgages, rests with them. Not realtors, Americans, central bankers, the Chinese, politicians or baby boomers, as so many of us like to believe. — Garth

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

That article was a little propaganda piece aimed at making it more socially acceptable to walk into reckless debt:

“Look at us good little Canadians. We’re just doing what we’re told. We bought our dream home. What could be wrong with that? Everyone else is doing it, so it must be normal. We’re barely hanging on, but look how stoic about it we are.”

The unsupported declaration that owning a home is part of the “ultimate Canadian dream” was a nice touch.

#148 saskatoon on 05.26.15 at 1:13 pm

#121 LLewelyn

another left-wing nutjob…who can’t distinguish between “I” and “WE”.

psychologically bewildered and hollowed-out.

#149 Vamanos Pest on 05.26.15 at 1:23 pm

#121 LLewelyn

A market were most loans are insured by the tax payer and the lender takes zero risk on default is not a free market. So your entire comment is not valid, as the premise that a free market has failed is patently false. A free market has not even been tried.

#150 bdy sktrn on 05.26.15 at 1:26 pm

‘hard’ day for equity funds also.

no worries , auntie jan will accommodate.

———————

A question for cdn dogs holding us property, we are looking at a 20ac bare lot, about an hour from dt van. (south of aldergroovy , an easy 9iron from the border) 2 hwy options to the city 1/99.

20 acres , power there, easy wells in area.

Since it’s a few hundred feet south of the line it is not 3M but 99k usd (last sold 1999 for same price) went up at 150 last year, 5 drops of 10k , with 2 recently. (i love a motivated seller and zillow!)

Enough room for a monster garage(s) and tennis courts or even a full size soccer pitch! Sub dividable to 5 lots but no plans till much later.

plan to use it mostly in shoulder seasons and lightly in summer.

For the snowdogs, are there IRS implications other than cap gains on selling?

thx

#151 Axehead on 05.26.15 at 1:54 pm

#133 Does the H stand for Hubris?

#152 Holy Crpa Wheres The Tylenol on 05.26.15 at 1:54 pm

#138 Nemesis on 05.26.15 at 11:53 am
#FunnyOldeWorld…
#NoEeeengrishForYou!…
[CBC] – Richmond won’t pursue bylaw on English-only signs: City instead passes motion on window ‘de-cluttering’ initiative

http://www.cbc.ca/news/canada/british-columbia/richmond-won-t-pursue-bylaw-on-english-only-signs-1.3087409
______________________________________
Grow some balls Richmond city staff. There are two official languages in Canada. English and French or French and English depending on what side of the coast you sit. I have to produce all of my technical documents in both languages. I do not produce my documents in any other language unless it is a specification or requested by the customer. By the way we will charge for a translation! Some languages we can not translate and therefore will not as the technicalities can be lost in translation. But this signage issue is crap what are they selling at this store? I understand they are catering to a specific demography but they are essentially isolating themselves and their customers from the rest of the country! Have the advertizing in one two or three languages but make it one of the official ones. It becomes ghettoizing and does not allow everyone to mix in.

Grow up. They’re signs. Not weapons. — Garth

#153 Rexx Rock on 05.26.15 at 2:03 pm

Everything is going according to plan.High home ownership which is great for the banks and the government.Lower cad so money stays in Canada,lax immigration for investment from foreigners.Zirp is here to stay and higher taxes coming.Lets all sing O Canada.

#154 young & foolish on 05.26.15 at 2:22 pm

“Most unfortunately, the taxpayer is at risk.”

Well, in our consumer-driven society, you are expected to consume. Lip service is given to “saving”. So much for “fundamentals” and “financial literacy” (which BTW is plain vanilla math).

#155 ObviousMark on 05.26.15 at 2:23 pm

“governments are incompetent so we need more government” – Logic of typical Canadian

#156 Mark on 05.26.15 at 2:28 pm

“A market were most loans are insured by the tax payer and the lender takes zero risk on default is not a free market. So your entire comment is not valid, as the premise that a free market has failed is patently false. A free market has not even been tried.”

My thoughts exactly. High rents, over time, stimulate more supply. Just as high house prices have stimulated more supply of houses, and eventually the oversupply drives down prices as we have seen over the past two years.

Can government play a role to ensure that there is basic infrastructure laid down, either physically, or in the housing finance market? Sure. CMHC worked all right and wasn’t really a problem when they basically insured only an extremely small subset of loans, mostly written to very low income people.

For the snowdogs, are there IRS implications other than cap gains on selling?

If you do any of the construction yourself, or even manage it, there might be issues with your visa. You have to be quite careful that whatever you do in the US, that it cannot be construed as being ’employment’. It only takes one disgruntled local, or a US Customs officer quizzing you on your plans in the US, to unravel such.

Also, you may be deemed a US resident for tax purposes if you own such property, and have a US filing obligation. Do more research into this.

#157 young & foolish on 05.26.15 at 2:28 pm

“A free market has not even been tried.”

That’s for sure! If we ever do get one, we will return to Feudalism over-night.

#158 MF on 05.26.15 at 2:29 pm

#7 Realtor007

Remember that post Garth made where he asked about the incomes and net worth of his readers?

If we believe it, most blog dogs are young(ish) professionals, high income, and high net worth.

Well, not me personally, but most of those on here.

You definitely don’t have to “feel sorry” for anyone. This is a smarter group than the average Canadian you probably deal with who is dumb with money and views debt as wealth. The folks here are money and investment savvy. You can learn from them, not the other way around.

That is why I come on here. If I want to see delusion, all I have to do is look around me (GTA) for heaps of it. I come on here for investment advice. Not to hear propaganda from a RE agent.

As an aside, I don’t blame RE agents. If the people are dumb enough to buy what you are selling, sell it to them and profit. Nothing wrong with people making money.

MF

#159 Luc on 05.26.15 at 2:50 pm

Canada’s real estate market is undervalued, Trump exec says. What do you think Garth? Is he full of it?
http://www.ctvnews.ca/business/canada-s-real-estate-market-is-undervalued-trump-exec-says-1.2391568

#160 Entrepreneur on 05.26.15 at 2:51 pm

I think Eveline Xia did a great job, 25,000 online petition & the 300 participants in the protest. Not bad for the amount of time. The only voice was (ex-NDP) Major Gregor Robertson (by internet) but at least he did that. Maybe the major should run in the NDP for premier in the next election. He has my vote & probably many others.

#161 Setting the Record Straight on 05.26.15 at 2:55 pm

@121
0% who owned their houses in the 1980’s and 1990’s did very well under the ‘free’ market system Now we live in a world where the the market value of our accommodation continues to escalate as our economic growth is slowing. The consequence is that an unsupportable percentage of disposable income is required to obtain accommodation and credit is being used to meet the basic cost of living.

Don’t Canadians realize that every dollar of disposable income diverted to obtain accommodation is a nail in our economic coffin. This is basic economics and the primary reason why the National Housing Act was created back when our Federal government cared about our future.

Today our economic future looks very very dim unless our Federal government comes to its senses and encourages an increase in the supply of affordable housing. I realize the 70% who have a vested interest in the ‘free market’ system will resist any form of government intervention until our economy actually tanks and house prices come tumbling down. By then private enterprise will have run for the hills and our governments will be left holding an empty bag.

$$$$$$$
Typical bureaucratic response.

The housing mess has been created by governments “supporting” affordable housing through
CMHC, low interest rates, tax policy( taxing capital gains in stocks ) etc.
So what do you want –more government programs to fix the problems govt creates. Bizarro world!

#162 The American on 05.26.15 at 2:59 pm

At #47: Mark, you said, “Oh please… At the top of a USD$ bubble, and you’re wanting to herd people into even more USD$? Just as, according to many, inflation is about to take off and rates are going to rise?”

USD bubble? LOL. That’s rich. The USD is hardly in a bubble, and I have more news for you, its about to strengthen a LOT more against the CAD. Or, should I say the CAD is about to weaken a lot more against the USD? The CAD is predicted to fall to record lows. Although I believe record lows may not be in the cards, the CAD is going to come close. To ever think the CAD was *really* worth the same as the USD is completely laughable, especially when force-ranking GDP as a nation, per capita, knowledge capital of one nation vs. another, etc. The CAD is simply returning to its real worth. Wait and watch.

http://business.financialpost.com/investing/why-the-canadian-dollars-recent-rally-may-be-too-much-of-a-good-thing

http://business.financialpost.com/news/economy/canadian-dollar-will-fall-to-record-lows-once-fed-starts-tightening-analysts-warn

http://www.forexcrunch.com/eurusd-topping-out-usdcad-ready-for-more-corrections-bofa-merrill/

#163 Setting the Record Straight on 05.26.15 at 3:04 pm

@134
You are right, you can’t mandate how much and where people spend. However, I will argue that as a lender (or as far as CMHC is concerned) I would want to lend to people that can pay me back AND make sure that the asset I hold as security for my loan is maintained in the event they don’t and I have to enforce.

You can’t mandate how people will choose to spend and I am certainly not one for people looking over my shoulder. I do think that the basis for qualifying people for mortgages should change by including the real cost of owning a home and also some reserve in the event that sh*t happens in life. Because it does.
A reserve for repairs and maintenance (% of price of house?) – not for renovations because that is a choice. A reserve for cash in the event of unemployment etc… but not for lifestyle like restaurants and other discretionary items. Daycare or nanny costs for that matter should be included as it is a commitment parents have in order to generate the income to pay their mortgage. But it’s not included.

$$$$$$$
Think how ridiculous it is to be holding this conversation.
Private lenders with no govt insurance need to determine whether a person is credit worthy or not on any criteria that works for their business. This is not the business of government or citizens.

#164 Retired Boomer - WI on 05.26.15 at 3:05 pm

CHMC being a “political creation” COULD be dialed back to zero, or left at a million, or set somewhere in-between.

The idea of insurance like CHMC is for buyers who typically do not have the bank required 20% down payment.

CHMC it would seem to be is not for covering your ‘dream home’ but, to assist you in buying that starter home.

Afterwards, you either move up by yourself, or you have proved you are one of those who probably should;d not own a home.

Maybe a two tiered system where it is lower for most of the country, but a bit higher for “high cost areas.”

Seems to me we do something similar in the U.S. Yes, you still need a down payment, good credit, and the available income to make the PITI payments.

Short of meeting those minimum standards, you need to stay renting.

#165 crap advice on 05.26.15 at 3:11 pm

Nice pic, reminds me of summer job in tourism. And an old joke… I’m sitting on regional airline next to some intellectual, he says let’s have a ‘discussion’. I say ‘okay, tell me, why does a cow crap patties, a horse crap pucks, and a deer crap berries if they all eat the same thing?’ He says, ‘I don’t know.’ So I said, ‘Why are we having a discussion if you don’t know crap?’

#166 Moller on 05.26.15 at 3:24 pm

The low-rates argument does not hold. Pretty much everywhere has low rates.

How do you explain that?

#167 Retired Boomer - WI on 05.26.15 at 3:40 pm

#85 Setting the Record Straight

Correct. Depending on state and county, you have between 3 and 7 years if your property taxes remain unpaid before your property is sold, at public tax sale. Even you can re-buy your property if you so desired.

Real property is not the only property subject to this type seizure. Say you lost your driving privileges, and you decided to drive anyway. Get caught in some states and the car NOW belongs to the state.

We are a little ‘less free’ if you don’t fulfill your obligations these days. All states are NOT created equal, either.

Wisconsin for example does NOT require auto insurance, but if you cause a crash, you are held financially responsible – even if it takes you the rest of your life, which is why we buy insurance, but as it is not ‘mandated’ it is a highly competitive marketplace. our uninsured rates are lower than MN or IL two states with ‘mandatory’ insurance laws -go figure.

There is not now, nor has there ever been a FREE LUNCH.

#168 RayofLight on 05.26.15 at 3:41 pm

78 Investorz:
Larry Berman, a technician and long time guest on BNN said today that in his opinion, we’ll have low rates for a decade. That the system can’t much a big rate increase. I respect the man, as his track record is solid. He’s also cool-headed and gains nothing out of selling his opinions.

Larry Berman has predicted 10 of the last 2 corrections. Put your investment faith in real numbers and ratios (Eg Earnings growth to Price/Earnings as a start). BNN talking babble heads will disappoint because there no way of validating opinions in a math based investment process.

#169 miketheengineer on 05.26.15 at 3:43 pm

Garth et al:

Decline in Oil Prices….????????????????

Gasoline where I am was $1.13 per litre….no help for the small people here……

If gas prices were lower, it would put alot more money into the hands of the people who spend money, and make the economy go, go, go. The velocity of money would increase….big time.

But no, the small guy has pay too much again…

Bring the gas price to $0.75 per litre and watch the economy take off.

Watch the people take that 20 extra bucks saved and go to McDonalds again…etc.

#170 devore on 05.26.15 at 4:01 pm

#123 Rational Optimist

Depreciation is particularly visible in the condo sector, where a massive amount of new inventory enters the market every year, pushing up the average price. Yet, resale condos have gone nowhere in Vancouver, and not very far in TO, in the last 6-8 years.

#171 Bottoms_Up on 05.26.15 at 4:12 pm

#149 bdy sktrn on 05.26.15 at 1:26 pm
————————————————-
There is a formula calculated over several years that if you spend too much time in the US you must pay income tax.

No clue about holding/using land.

#172 cramar on 05.26.15 at 4:20 pm

#126 john on 05.26.15 at 10:27 am
interesting article at yahoo finance on house rich, poor Canadians.

https://ca.finance.yahoo.com/news/real-estate-woes-secret-lives-090000545.html

——————

Most interesting:

“Canada has among the highest home ownership rates in the world; owning a home is one of the ultimate Canadian dreams. And it’s perhaps why so many people choose to live house poor rather than sell their home. And it’s probably why some people, no matter what their circumstances, won’t give up their home without a fight.”

Yes, things are special here in Canada!

Also their definition of living frugally is different than mine. I don’t call paying 43% of their combined income on mortgage payments “living frugally”!

#173 cramar on 05.26.15 at 4:22 pm

#142 Leo Trollstoy on 05.26.15 at 12:21 pm
Don’t know why people don’t become plumbers.

I deal with plumbers to manage my rentals.

Your knees are shot within 5 years.

That’s not a good trade off.

———————-

Yeah, maybe you have a point. I remember my plumber complaining about his knees. But he did say he took over the business from his father who was a plumber for 37 years. Maybe Boomers also had better knees?

#174 Grapple Jack on 05.26.15 at 4:57 pm

LOL…Obama’s ‘Attack on Oil’ is causing countries dependent on petroleum revenue to fold. The next steps are revolution and conflagration.

http://www.calgaryherald.com/business/Nigerian+govt+paying+million+suppliers+fuel+crisis+crippling+economy/11083765/story.html

I’ve been pointing this out for months since the ‘Arms for Shutting the Taps’ deal was reached between Obama and the Saudi’s. The fact is that 90++ third world country rely solely on petroleum revenue and aid for basic sustenance. The s*it is hitting the fan around the world.

No one doubts that the Obama’s stranglehold on Congress will end in 21 months…and the whole green blob thing he’s been promoting will disappear. But what of the worlds 5 billion people who have begun to starve already? The UN stooges like Ban Ke Moon say the western countries should take more refugee’s and send more aid…but we all know he’s been spooning with Obama for more money in exchange for support.

This is going to get very ugly….22 months is a long time to starve waiting for an angry malcontent to leave office. If no one’s noticed…revolution is breaking out world wide. Millions of angry battle hardened refugees will wash up on our shores.

#175 Julia on 05.26.15 at 5:00 pm

#162 Setting the Record Straight
“Think how ridiculous it is to be holding this conversation.
Private lenders with no govt insurance need to determine whether a person is credit worthy or not on any criteria that works for their business. This is not the business of government or citizens.”

I agree that lenders make their own business decisions and can take their own risks – within what is acceptable to the regulators. And they do. For instance, you can get a mortgage loan or HELOC based on equity alone (50% loan to value or less), no matter what your debt servicing ability.

The debt servicing calculations used though form part of CMHC’s conditions (and probably similar with other insurers) and that’s where I think it should be tweaked.

#176 Mark on 05.26.15 at 5:05 pm

D bubble? LOL. That’s rich. The USD is hardly in a bubble”

USD not in a bubble? Good one. There’s tons of reasons to believe that the USD$ is in a bubble, the least of which is the fact that the country has not been a net exporter pretty much in an entire generation. Money, at least to a foreigner, is only worth what it can be converted into as far as exports from the US is concerned, and there is no evidence that the US is going to, barring dramatic economic reforms, generate exports in excess of imports.

Meanwhile, Canada, a chronic net exporter. Net exports over time lead to a rising currency, as foreigners want to hold your currency because they credibly believe it can be turned into goods and services provided by the nation of the issuer.

Current CAD$ weakness is largely a function of speculative interest against the CAD$ not based on the fundamentals. USD$ strength due to currency fears, particularly in Europe. Take those factors away (which are largely self-limiting), and along with domestic deflation — the fundamentals imply a dramatically higher CAD$. Throw in the other end of mean reversion — overshoot, and you have factors that easily could drive the CAD$ much higher than we’ve ever seen — a complete inversion of the 63 cent dollar seems entirely plausible. There’s barely any CAD$ in existence overseas — that’s something that could easily change as well, contributing to currency strength and the benefit of seigniorage to the Canadian economy.

Timeframes are difficult, but the whole idea that Canada will always have an inferior economy to that of the US is not based in logic or fact, especially when we’ve had far superior fiscal management. The deflation of all the debt associated with the Canadian housing bubble will drive a very strong move upwards in the CAD$ as borrowers race to repay debt and close their “short” positions on the CAD$ by repaying mortgages. Associated consumer austerity will truncate import demand severely, while deflation will increase surplus domestic supply available for export. The Canada’s precious metals mining sector is a sleeping giant which will awake with a vengeance due to global demand for monetary stability.

On that note, BoC rate cut tomorrow or I’ll be on a blog holiday till the weekend. Bank earnings should be decent, especially with the last BoC cut starting to show up in the numbers. But revenues from stuff like credit card interchange fees should be down — a reflection of a sharply weakening domestic consumer economy.

#177 saskatoon on 05.26.15 at 5:09 pm

#159 Entrepreneur

my washing machine also does a great job–in a very small amount of time.

#151 Holy Crpa Wheres The Tylenol

garth: it is through the force of images, that–in time–real revolutions are made.

#178 MarcFromOttawa on 05.26.15 at 5:11 pm

Hey Garth,

Thanks for all the hard work you put it day in and day out (minus your much deserved day of rest).

You’re Canada’s best journalist and the comment section is like gold.

#179 Sexton Proctor Filings on 05.26.15 at 5:14 pm

#161 The American
The CAD is predicted to fall to record lows. Although I believe record lows may not be in the cards, the CAD is going to come close. To ever think the CAD was *really* worth the same as the USD is completely laughable, especially when force-ranking GDP as a nation, per capita, knowledge capital of one nation vs. another, etc. The CAD is simply returning to its real worth. Wait and watch.

——————————————————————

I do not want to acknowledge it as true, however The American is correct. The CAD is going to drop to lows that catch us off guard and it will stay low for a lengthy period. The American brings up a good point; Knowledge Capital. The US contains more KC by a long shot than any other place. Perhaps trade deficits are not what it is all about when you have all the brains and military might. A swath of the pen and the US can re-re-re-re-strategize its economic global position in less than five days. Never mind the politicians and their nonsense. They’ve proven to pull through when push comes to shove every time.

#180 turn of the tide on 05.26.15 at 5:16 pm

Ha! check this one out…

#dohaveamillion

http://www.cbc.ca/news/trending/wealthy-toronto-residents-don-t-want-neighbours-with-sub-million-dollar-condos-1.3087974

#181 The American on 05.26.15 at 5:23 pm

At #168: Miketheengineer, gas prices suck everywhere to be honest. I pay $3.59/gallon right now.

Let’s do some math: 1 gallon = 3.7854 liters. You pay $1.13CAD/liter.

$1.13CAD/liter*3.7854 liters = $4.28CAD/gallon

$4.28CAD = $3.44USD

So, you are telling me as an American I am paying more for my gasoline. $0.15USD/gallon more ($0.19CAD/gallon), which translates to me paying $0.05CAD/liter more than you are.

#182 james on 05.26.15 at 5:28 pm

#142 Leo Trollstoy

“I deal with plumbers to manage my rentals.

Your knees are shot within 5 years.”

Oh, so just like a Harper cabinet minister.

#183 Realtor007 on 05.26.15 at 5:31 pm

#157 MF on 05.26.15 at 2:29 pm

That was hilarious, try not to believe everything you read online, everybody is richer, better looking, taller, have nicer gf’s etc online then in real life. This blog is no different.

No propaganda here, just stating my beliefs like everyone else, sorry it doesn’t align with yours.

#184 David #1 on 05.26.15 at 5:36 pm

I was late to get here but Garth your article states:

“The brains at CMHC came out with their forecast on Monday. “Lower oil …. other provinces, such as Ontario and British Columbia, which benefit from the positive impacts of declining energy prices, a lower Canadian dollar and continued low mortgage rates,” said chief economist Bob Dugan.”

Ontario Hydro (energy) is NOT declining and the only people to benefit from a lower Canadian dollar are those “foreigners” buying with foreign currencies.

And these CMHC clowns probably get Golden Pensions, unlike me

#185 MF on 05.26.15 at 5:41 pm

Fair enough.

Agreed on the online persona thing.

My generation is the worst for that.

MF

#186 The American on 05.26.15 at 5:53 pm

At #173: Grapple Jack, you said, “No one doubts that the Obama’s stranglehold on Congress will end in 21 months…and the whole green blob thing he’s been promoting will disappear. But what of the worlds 5 billion people who have begun to starve already? The UN stooges like Ban Ke Moon say the western countries should take more refugee’s and send more aid…but we all know he’s been spooning with Obama for more money in exchange for support.”

That’s a really good one! HAHAHAHAHAHA! Let me guess, you’re another informed Canadian who understand how the American political system works. Riiiiiiiiight. Silly person you are. For your information, Obama does not set laws. Congress sets the laws. Obama’s “stranglehold” as you put it is, in fact, a ridiculous notion. Congress is a MAJORITY REPUBLICAN. They can do whatever the hell they want, and they do NOTHING. Republicans hold the majority with 242 seats, while Democrats hold 193 seats. Obama is not the problem… You really may want to rethink your posting and who is to blame. As for the “green blob” thingy. Well, that’s here to stay, and it is growing, growing, growing, growing like wild fire. It is certainly not going away AT ALL. Get used to it.

#187 The American on 05.26.15 at 5:57 pm

Mark, remind me again… How did that CAD and Euro do today?

#188 Llewelyn on 05.26.15 at 5:59 pm

Assuring that all Canadians have access to affordable housing is a far cry from communism. The majority of bloggers on your site seem to view all social programs in a negative light. Turning our backs on families who are finding it increasingly difficult to survive without incurring debt is not only selfish but foolish.

Speaking of government subsidies the Canadian health care system consumes over $130 billion of public money and the average wages and benefits paid to over 600,000 Canadians employed in the health care system now exceeds $135,000. I like our health care system but am intelligent enough to realize that it cannot be maintained at current standards without economic growth. Bringing housing costs into line with median income levels is not left wing idealism it is essential to survival of the Canadian economy.

Asking our governments to take measures to protect the quality of life of future generations is not a bad thing and I make no apologies for pointing this out in a blog devoted to the pursuit of additional wealth.

#189 Made in BC on 05.26.15 at 6:02 pm

#180 The American on 05.26.15 at 5:23 pm
At #168: Miketheengineer, gas prices suck everywhere to be honest. I pay $3.59/gallon right now.

Let’s do some math: 1 gallon = 3.7854 liters. You pay $1.13CAD/liter.

$1.13CAD/liter*3.7854 liters = $4.28CAD/gallon

$4.28CAD = $3.44USD

So, you are telling me as an American I am paying more for my gasoline. $0.15USD/gallon more ($0.19CAD/gallon), which translates to me paying $0.05CAD/liter more than you are.
++++++++++++++++++++++++++++++++++++

$2.72 a US Gallon where I am. Gas is $1.34 in Canada. I fill up my SUV and buy groceries and sundries for 30 to 50% less in Bellingham.

Works out to 0.91 per liter or a 43cents a liter savings. Which in my case is $42 a fill up. Plus what I save shopping. I always save $100 by the time I get home. Always……

#190 Colin on 05.26.15 at 6:10 pm

I’m confused. First you mock Evelin; then you’re chatting buddies crusading against the insanity in Vancouver; and now you’re mocking her again. Which one is it?

Maybe I’m helping. — Garth

#191 Oot der Hoos on 05.26.15 at 6:23 pm

To #156 young & foolish

Ideas and laws about freedom and liberty provided a framework in our history where feudalism changed into capitalism, which is free markets.

So your statement that free markets would cause feudalism is contradicted by history.

I am lately pondering Jesus telling us to give away everything and follow him to be perfect and also I ponder the commandment: Thou shalt not steal.

Those too ideas contrast voluntary giving with socialist stealing.

Socialists fear free markets.

I should more often figure how to serve someone else in free markets instead of being afraid. I should also see how voluntary giving, and sharing, frees me from being afraid of participating in free markets. I think those two activities would help socialists develop a conscience about force, and capitalists to overcome fear, too.

Here is an essay about the topic:

https://mises.org/library/can-society-be-organized-camping-trip

#192 Mark on 05.26.15 at 6:31 pm

“Mark, remind me again… How did that CAD and Euro do today?”

No idea, I’m not a daytrader.

#193 Grapple Jack on 05.26.15 at 8:30 pm

“As for the “green blob” thingy. Well, that’s here to stay, and it is growing, growing, growing, growing like wild fire. It is certainly not going away AT ALL. Get used to it.”

*another green blob fanatic with his eye’s on fire.

Don’t you just love these green blob nutz who smugly look away as 5 billion people starve to death so that Obozo can sell his ‘legacy?

#194 GTA Observer on 05.26.15 at 10:43 pm

#132 Realtor 007 Oh really, you want to specify the large areas of Canada that are not livable?


Best I can do for you right now is this vintage article.
http://www.lookandlearn.com/blog/20685/almost-ninety-percent-of-canada-is-uninhabitable/

Either much of it is uninhabitable due to terrain and climate, there’s no easy way to get there, or both. And in these areas, there’s not much by way of the kind of employment that could net a mortgage loan. But feel free to park For Sale signs somewhere in an ice floe.

When working with facts, it’s probably best to avoid an “Oh yeah? Sez who?” approach.

#195 GTA Observer on 05.26.15 at 10:46 pm

#186 The American

Many Canadians don’t understand how executive and legislative powers are separated under the US Constitution, because they are so easily combined here (to wit, the current Government). It’s frustrating.